Counc. Marilyn Baptiste, secretary-treasurer of the Union of B.C. Indian Chiefs, said, "We are victorious!" in a statement issued late Thursday night after the report was released.
"The panel listened to us and formally determined the project would 'adversely affect' the title and rights for the Tsilhqot'in and Secwepemc. What a win for us," she said.
The Tsilhqot'in Nation also embraced the new assessment, saying it contains even more concerns and criticisms than the assessment of the original plan.
The New Prosperity mine project was initially rejected in 2011 by the federal government, forcing Taseko Mines to resubmit after addressing environmental concerns.
"In 2010 TML and Environment Canada stated the rejected proposal was the least environmentally risky of all options, so it comes as absolutely no surprise that this latest proposal has been found to be worse," said Chief Joe Alphonse.
Chief Roger William of the Xeni Gwetin First Nation also welcomed the report and its findings, saying there is nothing Taseko can ever do to get their support:
But the recommendation is not binding, and the final decision on whether the project will receive an environmental certificate to proceed is up to the federal environment minister.
"First Nations will be outraged if the federal government accepts this project after rejecting the first one. The federal government now has what it needs to finally put a nail in the coffin," said Alphonse.
Company still backing proposal
Taseko vice president Brian Battison told CBC News "the report does not stop the project from being approved."
Battison said the company disputes the conclusions that the project has "significant adverse environmental effects" on Fish Lake.
"We strongly disagree with the panel's findings related to impact on the potential water quality, fish and fish habitat of fish lake. We're going to be challenging those findings."
The mining company also released a statement saying the project should still go ahead.
"This project must go ahead and will be of enormous benefit to British Columbia and Canada," said the statement.
"It will provide thousands of person-years of employment and billions of dollars in new tax revenue. It is for the government to make this decision – the panel just provides its report and views."
The site, 550 kilometres northeast of Vancouver in the Chilcotin region, is the tenth-largest undeveloped gold-copper deposit in the world.
The company has estimated the New Prosperity mine would generate 550 direct jobs and $340 million in gross domestic product annually.
Taseko's original proposal received provincial approval in 2010, but the federal government rejected the plan, which would have drained a lake of cultural significance to First Nations for use as a tailings pond.
Taseko then submitted a new plan for the site in the Chilcotin region 550 kilometres northeast of Vancouver and said it would save Fish Lake and prevent contamination from groundwater seepage from a tailings pond that it would instead locate several kilometres away.
The Canadian Environmental Assessment Agency report released Thursday said Taseko has underestimated the volume of water that would leave a tailings storage facility and there was "considerable uncertainty" regarding Taseko's contingency plan for water treatment.
It said Taseko's water quality goals for Fish Lake are "not likely achievable" and, even with expensive water treatment measures, the protection of Fish Lake water quality is "unlikely to succeed in the long term."
Moreover, said the report, the adverse effects on water quality in Fish Lake would result in a "significant adverse effect on fish and fish habitat" in the lake.
Concerns of Tsilhqot'in First Nation
The assessment also addressed the concerns of area First Nations people, who remained opposed to the adjusted plan, believing the lake would still end up contaminated.
In its report, the agency said it determined the project would have adverse effects on the Tsilhqot'in First Nation's use of land and resources for traditional purposes.
It said the adverse effects "would be significant" and changes to the environment caused by the mine would disturb Tsilhqot'in burial and cremation sites and "endanger their ability to sustain their way of life and cultural identity."
"The project would have adverse effects on the Tsilhqot'in current use of lands and resources for traditional purposes, archaeological and historical sites, and cultural heritage and that these adverse effects could not be mitigated and therefore would be significant," the report said.
The environmental assessment also concluded that the mine project would likely have a negative impact on the South Chilcotin grizzly bear population, which the province has already determined to be threatened.
The company has said the project is low-risk and high reward, and in the best interests of the region, the province and the country. Mayors and councils from the surrounding communities of Williams Lake, 100 Mile House and Quesnel support the project, as well as the area's Liberal member of the provincial legislature.
Review took five weeks
During the environmental review, which wrapped up in August, experts from Natural Resources Canada told the panel the company has used some incorrect assertions in its proposal, and John Stockner, a professor at the UBC Fisheries Centre who appeared on behalf of the Tsilhqot'in National Government, told the panel he doesn't believe the lake has been saved.
"I kind of feel like a town crier because what I have to tell you is after considerable thought ... (I am) of the firm opinion that within a decade, Fish Lake will die," he told the panel.
Public hearings on the New Prosperity mine proposal took five weeks.
"We've done what we were asked to do. We've listened to the community and re-designed this project to address the issues raised in 2010 and we will continue to engage and listen to the community affected by this project," Greg Yelland, the company's chief engineer, told the panel.
The province had approved the original plan, saying the economic benefits outweighed the environmental impact.
Briefing notes obtained by The Canadian Press under access to information note that B.C. Premier Christy Clark highlighted to her federal colleagues the economic importance of the mine.
The province has committed to advancing eight major mining projects as key parts of its economic development plan, including the New Prosperity mine, the memo said.