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TORONTO (miningweekly.com) – Solid Gold Resources, a Toronto-based junior with precious-metals prospects in Ontario, said on Tuesday it is suing the Ontario government for C$100-million, and possibly more.
The company is seeking damages sustained as a result of a January 3 Superior Court of Ontario ruling that prevents it from drilling at its Lake Abitibi property, located east of Timmins in northern Ontario, for 120 days while the TSX-V-listed company consults with the Wahgoshig First Nation.
Judge Carol Brown’s judgement “squarely conflicts with the decision of the Supreme Court of Canada in Haida Nation v. British Columbia, which held that third parties cannot be held liable for failing to discharge the Crown’s duty to consult and accommodate,” Solid Gold said in a statement on January 19.
It said it would appeal the decision.
Speaking in a telephone interview on Tuesday, Solid Gold president Darryl Stretch told Mining Weekly Online the company was claiming C$100-million from the government of Ontario for damages it is sustaining as a result of not being able to carry out exploration work at its Lake Abitibi property.
“That’s what it currently stands at; it could go higher,” he added.
Conflicts between mining companies wanting to conduct exploration work on First Nations, or aboriginal land, in Canada and the Crown have flared up in recent months.
Mining companies argue it is the government’s duty to consult with First Nations before awarding an exploration licence to a company.
“It’s one of the most important precedents set in Canadian history…it says the Crown, or court, can constrict you of a right that you’ve paid money for,” Stretch told Mining Weekly Online of the January 3 judgement.
“It’s their [the government’s] obligation to consult with First Nations, not my obligation. They’re trying to take the position that they delegated the duty to me, which they can’t do by law.”
Ontario Ministry of Northern Development and Mining spokesperson Adrian Kupesic said the government was aware of the notice of claim, but declined to comment on the matter as it was a pending legal matter.
Solid Gold dropped 25% on the Toronto bourse for smaller companies to trade at $0.045 a share by 14:05, valuing the firm at around C$1.3-million.
A formal statement of claim, under the Proceedings Against the Crown Act, cannot be issued until a 60-day hold period has expired, Solid Gold said.
The company is not the first to find itself in such a situation, though it has taken a more aggressive stance than others by suing the government.
Another Canadian mining company, Taseko Mines, said in December the British Columbia Supreme Court suspended two of its work permits at the New Prosperity property in the province for a period of up to 90 days to allow time for the court to hear a judicial review brought by the Tsilhqot’in Nation.
That First Nation was also seeking to stop it from conducting exploration work at the controversial project, arguing they had not been adequately consulted.
Solid Gold’s announcement that it was suing Ontario came on the same day Prime Minister Stephen Harper met with a gathering of First Nations chiefs in Ottawa.