Chief Liard McMillan says the Liard First Nation will take immediate steps to halt the Selwyn underground exploration project until the First Nation's concerns are addressed.

"We are currently reviewing our options, but these actions will likely include both political and legal actions,” McMillan said in an interview last Thursday.

"We are certainly prepared to sit down with both the company and the Yukon government to further address these issues.”

McMillan said the environmental screening completed by the Yukon Environmental Socio-economic Assessment Board (YESAB) last June failed to properly assess key components of the water management plan for the mine site located east of Ross River along the Yukon-N.W.T. border.

The chief issued a press release last Wednesday. That was the day Selwyn Resources and its new Chinese partner hosted a gala celebration in Whitehorse to mark their new joint venture to advance the Selwyn project.

The Liard First Nation was invited but refused to attend, the chief noted in his release.

"Liard First Nation sees no reason to celebrate,” McMillan said in the release.

"We have raised serious concerns with Selwyn and the Yukon about the potential effects of the planned exploration activity and have yet to see any serious attempts to address our concerns.”

During the interview, the chief explained experts retained by the First Nation agreed the YESAB's Watson Lake office failed to adequately assess water management for the underground exploration work.

Even officials with the Yukon government who met with the First Nation prior to accepting the YESAB's recommendation acknowledged there were outstanding matters regarding the water management plan, he said.

McMillan said Yukoners need to understand the mine site will be discharging into Don Creek, which flows into the Pelly River and then into the Yukon River.

It's a huge watershed, and the risk to the environment if proper measures are not in place is also huge, the chief insisted.

McMillan said Selwyn Chihong Mining needs to slow down, address the issues and ensure the Liard First Nation has the resources it needs to provide meaningful participation as the company moves toward a full-blown mine.

There's absolutely no room for another Faro, he said.

Bob Holmes, the director of the territorial mineral resource branch, said government officials did agree with the First Nation at their meeting last July that indeed there were outstanding water management issues.

But they also told the chief and his officials those matters were best dealt with by the Yukon Territory Water Board during its assessment of the company's application for a type B water licence required for the exploration work, Holmes pointed out.

The First Nation's concerns, he said, were also reflected in the government's July 26 decision to issue a permit for the underground exploration work.

Holmes and Selwyn Chihong president Harlan Meade questioned McMillan's reference in the press release to water discharge from the tailings pond.

There is no tailings pond involved in the exploration program, they pointed out.

Meade went further during a brief interview at Wednesday's gala, dismissing any notion that Selwyn would leave behind the public liability Faro has become after mining ceased there in early 1998.

Faro, he suggested, was permitted in a different era. (Mining there began in 1969.)

Projects these days must meet the most rigorous of requirements and standards, Meade assured.

"This is a good project,” he said. "We do not believe when all is said and done, and we have taken whatever mitigation is necessary, we do not believe this project will have a significant environmental impact.”

An application for a water licence was filed with the water board last May.

Board manager Carola Scheu said last Thursday the board sent a letter last week to the company requesting additional information, and was told it should be filed in a week or two. Once the application is deemed complete, the board will advertise for public comments, she said.

Scheu explained there are no requirements for a public hearing into a type B licence, though parties can ask for one. The board, she said, would then consider the request.

As a rule of thumb, she said, once the application is deemed complete, it generally takes about 25 days for the water board to complete its assessment.

Selwyn Resources and Chihong Canada Mining announced last December they were pursuing a partnership that would see the Chinese company buy into the Selwyn project for $100 million. The joint venture was officially signed off in late August, and the party was held last week.

The $100 million is meant to carry the project through to the completion of the bankable feasibility study in the next 18 months to two years.

Bankable feasibility studies provide lending institutions with the level of detail they need to assess the economic viability of a project.

David Ming Qi, chair of the new board of directors for Selwyn Chihong, said last Wednesday he is convinced there will be a large mine at Howard's Pass in four years or fewer.

He's said he's also convinced the company will not have any trouble in China raising the $800 million needed to put the mine in production.

Selwyn is contemplating using an underground pipeline to pump a slurry of concentrate from the mine site to Ross River, where it will be loaded onto trucks and transported to the port of Skagway.

Meade estimates the mine would employ 350 to 450 people.