The decision was made after Imperial Metals provided tested Polley Lake water samples that showed water quality close to historically safe levels.
The government says it will be able to verify the mining company's results when it has its own Polley Lake test results back Monday.
The mining company now has approval to install a discharge pipe that will divert water from Polley Lake into Hazeltine Creek and ultimately into Quesnel Lake.
Dr. Trevor Corneil of Interior Health says he supports this controlled release.
He says Polley Lake is full of sediment and debris that is very unstable, and an uncontrolled breach would substantially increase the risk to drinking water.
"Controlling the release is an important step in mitigating the risk and ensuring we are able to keep water safe and clean, so I fully support the ministry decision to move forward," he said at a news conference.
He says the flow of water into Quesnel Lake will be tested daily, and the quality of water in the Quesnel or Fraser Rivers will not be affected.
A partial water-use ban remains in place, but the do-not-use water advisory has been lifted for most of the village of Likely, B.C. and areas north of the Quesnel River.
Residents in an area from the Quesnel River north of where it narrows and is shallow can now drink the water, say health officials.
This includes the area north of 6236 Cedar Creek Rd. on the Quesnel River and the balance of the Quesnel River system to the Fraser River.
Interior Health said the water may now be consumed as it had been before the ban.
The health authority also said the water is safe for recreational purposes, but advised staying away from the area, given the amount of debris on the waters.
200 residents still under water-use ban
The water ban does remain in place for about 200 residents around Polley Lake, Hazeltine Creek, Cariboo Creek and all parts of Quesnel Lake and points south of 6236 Cedar Creek Rd. in Likely.
The water-use ban for the wider area could be reinstated if Polley Lake were to overflow and send a large flow of water into the surrounding waterways.
On Saturday, B.C. Environment Minister Mary Polak said tests showed drinking-water guidelines had been met for the third straight day.
Jennifer McGuire, also with the ministry, said there was still no expectation that aquatic life would be impacted by cadmium levels, but zinc levels were showing in excess of the more stringent guidelines.
"The numbers are under the acute level, but slightly in excess of the chronic guideline level," she said.
The samples were tested for pH, conductivity, turbidity, total suspended solids, total dissolved solids, hardness, alkalinity, nutrients, general ions, total and dissolved metals, and E.coli.
McGuire also said officials are still awaiting the results of a sample taken from Polley Lake, two live fish sent for tissue sampling and sediment testing.
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