The independence of the Yukon Water Board has been upheld by Yukon Supreme Court Justice Ron Veale.

In a 54-page decision delivered late Thursday, Veale ruled the water board had the authority to reject a water licence for Western Copper's Carmacks Copper Project.

The water board rejected the company's licence application last year after several days of public hearings, finding the technology being proposed was "unproven.”

Western Copper's appeal to the Yukon Supreme Court was heard in early December, with several parties participating in what has been a contentious project proposal for several years.

In denying the licence, the board was fulfilling its responsibility to ensure project proposals do not pose a threat to the territory's water resources, Veale wrote in his decision.

He said just because the project had been approved by the Yukon Environmental Socio-economic Assessment Board (YESAB) and the territorial government, there was nothing in law forcing the water board to do the same.

Western Copper and the Yukon Chamber of Mines had argued otherwise during the appeal. The company and the chamber insisted once the government had issued a Quartz Mining Licence after accepting YESAB's recommendation to approve the project, the water board was compelled to issue a licence.

It was free to build in whatever terms and conditions it felt necessary, but it could not deny a licence after the Yukon government had approved the project, they argued.

Veale, however, upheld the water board's argument that deciding whether to issue a water licence was its jurisdiction, and its jurisdiction alone.

"The discretion of the water board to not issue a licence exists even after the issuance of a positive decision document under YESAA (Yukon Environmental Socio-economic Assessment Act),” he wrote.

The Little-Salmon Carmacks First Nation, the Selkirk First Nation, the Yukon Conservation Society and the government supported the water board's position that it was independent when deciding whether to issue a licence.

Veale also dismissed the Western Copper's insistence that the water board did not have the authority to revisit the technical design of the company's heap leach structure after it was licensed by the government.

The water board, the judge ruled, has jurisdiction over water quality, and not just at the point where it leaves the mine site.

Rather, the board's authority extends to the very first drop of water used by a company in its mining operation, he said.

Veale said since the use of water is essential in leaching minerals from large heaps of crushed up ore, the board was well within its rights to examine the heap leach technology already approved by the government.

After seven days of hearings last year, the water board found the heap leach technology proposed by Western Copper was unproven, and therefore rejected the licence.

The Carmacks Copper Project has been contentious from the very day the company dropped the proposal on YESAB's desk in 2006.

The company heralded its economic value for the territory, and spent millions upon millions advancing the project, going as far back as feasibility work in the mid-1990s.

On the other hand, the First Nations, the conservation society and others warned of a potentially catastrophic threat to the environment because the company was proposing to use unproven technology.

It's estimated Little Salmon-Carmacks spent well in excess of $300,000 fighting the proposal.

In his decision, Veale wrote: "The stakes are high for everyone in this appeal.”

Western Copper president Paul West-Sells and the Yukon Chamber of Mines were unavailable for comment this morning.

In its submission to the court in December, the chamber argued if Western Copper was denied its appeal, the entire industry and the Yukon's economy would suffer.

The Yukon, it argued, is among the top jurisdictions in the world for investment by mining and exploration companies because it's seen as open for business, with a sound regulatory regime.

Having a project rejected after years and years of planning, and millions and millions spent – after the environment screening process was approved by government – would send a signal of uncertainty to industry, the chamber maintained.

On the other hand, Arthur Pape, the lawyer who represented the Little Salmon-Carmacks First Nation during the water board hearing of December's appeal, said this morning it was a "wonderful decision.

"It's very clear, and it is going to provide very useful guidance going forward for companies on how YESAB, the water board, and the Quartz Mining Act all relate to each other.”

Pape said he doesn't buy the suggestion the decision will send a negative message.

What it does, he said, is tell project proponents that if they want to do work in the Yukon, they have to spend the time and money doing their homework.

And this should not be seen as a clash between the regulatory titans, he insisted.

Pape said through it all, it's the water board saying: "We still have your back.

"Everybody in life needs somebody in life to watch their backs,” he said.

Pape said it shows that if all the pieces of regulatory regime do their work, sustainable development wins at the end of the day.

"This really shows the system that was put in place under the land claim agreements has tremendous effectiveness for protecting water quality in the Yukon, and that is what the decision brings home – the water issues are very serious.”

In dismissing Western Copper appeal, the judge ruled the parties who opposed the appeal have the right to recover their costs from the company.