Fort Simpson (Feb 24/06) - On Feb. 6, Canadian Zinc was reissued the water licence it needed to work at the Prairie Creek mine site.

The original licence was issued in September 2003, but Dehcho First Nations, Nahanni Butte Dene Band and Pehdzeh Ki First Nations challenged it in the Federal Court of Canada.

In December, the court directed the Mackenzie Valley Land and Water Board to reissue the licence.

With the water licence in place, Canadian Zinc plans to have an active season at the property, said John Kearney, the company's chairperson.

With a budget of about $5 million to be spent this year, work will start on the underground program.

Beginning in May or June, a decline, like a ramp, will be sunk down 400 to 500 metres into the ore. Drilling will spread out from there.

"It's a fairly major exercise and it's effective mining," said Kearney.

The difference is the ore won't be processed. The underground program is designed to check the ore location and quality and also to prepare for the next stages of development. Ongoing surface exploration will also continue, Kearney said.

Despite the Federal Court decision, opposition towards the mine still remains.

Anything in the Nahanni watershed is contentious, said Herb Norwegian, Grand Chief of the Dehcho First Nations.

"For Prairie Creek to assume that they have the authority to go ahead is totally ludicrous because in actual fact, this territory belongs to our people," said Norwegian.

Norwegian argues that while Canada may have given Canadian Zinc permission to go ahead, no permission has been given by the Dehcho.

Nahanni Butte is upset about the reissued water licence. The mining company has been working around opposition in the community, he said.

"I will do anything I can to make sure the rights of the Nahanni Butte people are upheld and that they're heard," said Norwegian.

"We are well aware that some people have concerns about the environmental impact of the mine," said Kearney.

He said the Mackenzie Valley Environmental Review Board has examined almost all aspects of the mine and environmental issues have been addressed.

Since 2000 the mine has been the subject of five or six environmental assessments, he said.

Kearney said it's partially a communication issue, with Canadian Zinc needing to show people what steps have been taken to safeguard the environment.

On the recommendation of the review board, the company will be hiring an environmental monitor. Kearney hopes the monitor will be someone from one of the communities near the mine.

Despite having the water licence, the mine is still a few stages away from full operation. Canadian Zinc is currently finishing an application for a main operating permit.

Based on previous experience, Kearney said it will take one or two years to get the permit.