My interpretation of Elmer's answer to my question on the Dec. 24 conference call was that majors would consider buying out a junior prior to completion of an EA if the over-all level of perceived project risk is sufficiently low or acceptable - not just the risk inherent within the EA process itself. It's consideration of the over-all project package. It seems to me that the Schaft Creek project would fall within this definition of a sufficient level of overall de-risking to warrant a pre-CEAA completion buy-out, but that's just my opinion.

I summarized a few things from the Copper Fox Baseline Fisheries Study of 2008 from their website to help answer your questions:

"The proposed Schaft Creek mine is located in the upper Schaft Creek Watershed, and the mine site

itself does not contain any fish-bearing water bodies. The potential effects of future development on

fish and fish habitat will be mainly along the proposed access road, and within the Skeeter Creek and

Start Creek watersheds."

It further explains:

"Most of the lakes in the Schaft Creek Project area contain only rainbow trout; however, in 2007 an

unidentified salmonid was captured in Mess Lake. Targeted sampling in 2008 resulted in the capture

of 38 of these unidentified salmonids (Plate 3.1-12). Adipose fins were collected from 24 of these fish,

and a total of 21 samples were assayed to genetically identify them to species. All 21 samples were

identified as Oncorhynchus nerka. Given the size of the fish collected (all less than 20 cm), and the

presence of a large waterfall barrier downstream on Mess Creek, it is assumed that these fish are

Kokanee salmon, the land-locked life form of sockeye salmon. Kokanee were only captured in Mess

Lake and are presumed to spawn in small tributaries of the lake and possibly on gravel shoals and

groundwater upwellings along the lake shore."

Your question concerning appropriate mitigation measures would be addressed by the following..also in the report:

2.1.2 Compensation Scoping

2.1.2.1 Study Design

The Schaft Creek Project will likely require some fish habitat compensation to offset alterations or

losses of fish habitat due to mine construction or operation. Several potential compensation areas

were identified with the assistance of a water resources engineer. First, potential compensation areas

were identified from the air based on topography, stability of water supply, and accessibility. These

sites were later surveyed on the ground to determine current fish habitat value and fish community

composition...."

"3.2 COMPENSATION SCOPING

3.2.1 Introduction

Preliminary investigations into potential fish habitat compensation areas were conducted in the

summer of 2008. These surveys were undertaken with a water resources engineer (Alan Thomson,

MRM, P.Eng.) and were intended to identify areas that were suitable for compensation habitat to be

constructed. In scoping potential compensation habitat, several factors were taken into

consideration:

o Proximity to existing fish habitat;

o Stability of soils and existing stream banks;

o Water quality; and,

o Potential for bedload movement.

Compensation habitat should be constructed in areas with existing fish habitat nearby because it

ensures that the constructed habitat will be accessible to the existing fish population. Stability of soils

and stream banks will ensure that the constructed habitat will not require excessive maintenance to

prevent erosion, and to maintain fish passage corridors and habitat function. Good water quality is

necessary to ensure that the habitat will be useable throughout the year and that deoxygenation,

sedimentation, and other issues will not affect fish. Finally, considering the potential for bedload

movement will ensure that constructed habitat will remain stable and will not require maintenance to

maintain functionality."

I would encourage you to visit the site and read some of the collected environmental documents like this one, which will inform the federal environmental screening application.

Most people don't seem to realize and often dismiss how significant this process is in terms of whether a project will proceed or not.

I personally think we are in a really good position, with the company having done a great deal of due diligence and the impact signature appears to be very low.

I'm more concerned with the time it will take to process the CEAA application if we don't get bought outright, and I think we would be impacted depending on which CEAA Act we are subjected to under the screening process - 2012 Act or the earlier, more stringent version.