Taseko’s Prosperity Project, Future of Mining in British Columbia in Jeopardy
Late Friday, the Federal Review Panel came out with a recommendation that will be forwarded to the Prime Minister and his cabinet assessing the environmental impact of the mine. The Federal Review Panel did not weigh in the economic affects of this project. They made environmental recommendations for Taseko to take if the mine is approved.
I believe the Prime Minister, along with the Cabinet will support the British Columbia Provincial Approval based on the opinion that the economic benefits far outweigh the environmental impact.
The mining industry is crucial to British Columbia’s Gross Domestic Product and brings in over 8 billion dollars to British Columbia a year. A major concern is that the construction of new mines has been declining. Many mines are closing and there has been a rapid decline of economic reserves. This has seriously affected poverty levels and unemployment rates.
Prosperity is British Columbia’s flagship project that will bring in 400 million dollars of revenue a year and get many back to work. Now the cabinet has recommendations from the panel on what Taseko should improve if the project is approved. The project is very popular in British Columbia and I do not believe that the Prime Minister and Cabinet will go against British Columbia’s approval. Their approval was based on the belief that the massive economic benefits would far outweigh the environmental loss to the local community. If the Prime Minister rules against the Province, it will have devastating effects not only on British Columbia, but on Canada and its status as a friendly mining jurisdiction. This status brings in huge amounts of investment capital which is crucial for economic development.
The news related sell-off creates another opportunity for investors to buy Taseko at bargain prices. In January I recommended readers to take profit as it was time to sell on good news and when readers were up 250%. Now is the opposite time. I believe this is the time to buy when everyone else is fearful especially if you are still holding shares. Now is definitely not the time to sell into a panic. Prosperity is far from over.
The news related break of the moving averages might appear negative but this decline has not shown to be high volume correction. I expect there to be a move higher as many sold off with the news coming off the wire and do not understand the macroeconomic effects of this project. Subscribers are still up over 100% even though many should have taken profits when I recommended and kept the 15% trailing stop loss which I also made sure for subscribers to have. If you did not take profits with the 15% trailing stop loss and are still holding, I would recommend waiting until September until the Cabinet and the Prime Minister make their decision which takes into consideration other variables than the environment alone and not feed into the panic selling.
Disclosure: Currently do not own Taseko.