Commercial real estate values in Williams Lake could fall as much as 30 per cent following the recent federal government decision to stop plans of the proposed Prosperity copper-and-gold mine.
"There is already little demand for office, industrial or retail space," said Ron Hume, of Hume Appraisals in Williams Lake. "With the death of the mine, market values could fall 15 per cent, 20 per cent, 30 per cent."
Hume noted that decline in forestry - the allowable timber cut in the region has been chopped by 50 per cent due largely to pine beetle damage - threatens the town's economy.
Already, downtown retail space is going dark and lease prices have been cut to the $6-per-square-foot range, down from the $8.50-to-$9-per-square-foot range a year ago. "The downturn will be dramatic," he said, noting the mine could have provided up to 750 local jobs.
Vancouver-based Taseko Mines Ltd., which had been stickhandling its $814 million Prosperity bid through a long series of environmental and native studies, slashed 65 jobs in the community within days of Ottawa's decision not to approve the mine.
"This represents the unfortunate impact of the federal decision," said Taseko president and CEO Russ Hallbauer. "The seriousness of the situation is heightened considering that a third of these positions were in the Williams Lake area, which already suffers from high unemployment levels."
The federal government shot down Taseko's plans to build Prosperity, saying it would cause significant adverse environmental effects to Fish Lake, a body of water that would have to be drained because it sits next to the planned pit.
Ottawa's move to block the mine was also a major blow to the provincial government, which has supported the project. The mine had gained provincial environmental approval two years ago.
The Tsilhqot'in National Government, First Nations groups and environmentalists lauded the federal government's decision to protect Fish Lake.
Still, not all hope for the project has been lost.
Toronto-based Franco-Nevada Corp. has said its US$350 million deal to help fund Prosperity in exchange for 22 per cent of its eventual gold output "remains available to Taseko once the project is fully permitted and financed."
Hallbauer said the company has initiated discussions with federal and provincial governments to identify how the project might move forward despite Ottawa's decision.
Locals who favoured the project seem less than impressed. Noting that the debate over Prosperity has dragged on for 17 years, Hume said any talk of reviving the mine now seems "like clutching at straws."
from Western Investor, December 2010
