Does the destruction of a trout lake fished by B.C. First Nations outweigh the economic benefits of a proposed $800-million mine for the struggling Cariboo area?

That's what Prime Minister Stephen Harper and his Conservative cabinet will have to decide by Sept. 2.

A federal review panel concluded Friday that the Prosperity Project gold-copper mine near Williams Lake would have "significant adverse environmental effects" on fish, grizzly bears and First Nations' use of the land for traditional purposes.

Also at risk is Fish Lake, which would be drained to store waste tailings from the copper-and-gold-processing operations of Vancouver-based Taseko Mines.

Although the review made no recommendations for or against the development of the project, Chief Joe Alphonse of the Tsilhqot'in Nation said the federal panel's conclusions were cause for rejoicing.

"First Nations across Canada have been closely watching this Fish Lake process and I am very excited by the results," Alphonse said Saturday.

"It gives us some faith in the process, that our concerns are being heard.

"It sends a strong message to corporations who just want to come in and make use of First Nations land without working with us," said Alphonse, who said he is prepared to take the fight to court.

Fish Lake stands to lose 90,000 rainbow trout, which would be destroyed. It would be replaced by an artificial lake that could support only 20,000 trout.

Dick Harris, MP for Cariboo-Prince George, said his constituency will benefit if the Taseko Mines proposal is approved -- especially as the region's once-prosperous forestry industry has crumpled under the mountain-pine-beetle epidemic.

Brian Battison, vice-president of Taseko Mines, said the project is "in the interest of British Columbia."

Battison said he remains confident following a provincial assessment, which ruled that the harm to the environment was surpassed by a predicted $5-billion "economic injection" over the 20-year life of the mine.

But, historically, the odds are not in favour of the open-pit mine, said Jay Nelson, lawyer for the Tsilhqot'in National Government.

"To my knowledge, the federal government has never approved a project after both the federal and provincial independent panels have found significant environmental effects," Nelson said.

In 2007, Ottawa and Victoria quashed the expansion of Kemess mine in northern B.C. under similar circumstances.

tbaluja@theprovince.com twitter. com/tamara_baluja