Ontario junior gets C$3.5m settlement to cede controversial claims – by Matthew Hill (MiningWeekly.com – March 30, 2012)

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TORONTO (miningweekly.com) – Against a backdrop of simmering tensions between aboriginal communities and exploration companies in Ontario, the government announced on Thursday it reached a C$3.5-million settlement with God’s Lake Resources, whereby the company agreed to cede its claims over a contentious area.
 
The move evokes memories of the 2008 stand-off between the Kitchenuhmaykoosib Inninuwug (KI) First Nation north of Red Lake, government and a junior called Platinex, which saw the company receiving a similar $5-million payment.
 
“The government, it seems, has capitulated and has expropriated these claims and compensated God’s Lake for that,” Fasken Martineau DuMoulin lawyer Neal Smitheman said in an interview.
 
God’s Lake had bumped heads with the KI over its right to explore its exploration claim, located some 130 km north of the community.
 
According to the KI, God’s Lake wanted to conduct exploration drilling in an area where there were burial grounds.
 
This boiled over into the community staging a protest at the Prospectors and Developers Association of Canada’s (PDAC’s) 2012 convention in Toronto at the start of March, and the Ontario government attempting to pre-empt it by removing 23 000 km2 of land near the community from future mining claims.
 
The government went further on Thursday by agreeing to effectively pay God’s Lake to leave the area.
 
“It was the Ministry’s goal to see KI and God’s Lake work together to build a positive relationship. This settlement responds to KI’s concerns, while allowing God’s Lake Resources to move forward with mineral exploration in other parts of the province in the future,” the Ministry of Northern Development and Mines said in a statement.
 
God’s Lake is left without any mineral exploration interests, and CEO Ed Ludwig declined to comment.
 
The settlement drew mixed reactions
 
For starters, KI was not happy about it.
 
“We just got the announcement through the Internet. There was no consultation – not even a telephone call to say this is what’s happening,” band councillor Cecilia Begg said in an interview.
 
“We were expecting something along those lines, but we would like to be consulted with first.”
 
The stand-off between God’s Lake and the KI first nation is by no means an isolated case.
 
Soaring metal’s prices over the last decade had led to an exploration boom in Canada, much of it in the northern parts of the country.
 
According to Halifax, Nova Scotia-based Metals Economics Group, 2012 will see another record amount of global exploration spending, and Canada will again be the biggest beneficiary.
 
The increased activity has led to a rise in confrontations between junior exploration companies and first nations who lay claim to much of the land in northern Ontario, as communities become increasingly demanding, industry sources told Mining Weekly Online.
 
Much of the conflict relates to the aboriginal’s claim to Crown Land under the treaties signed hundreds of years ago, which has proven to be an incredibly complex issue in the country.
 
Exploration companies such as Solid Gold Resources, which has clashed with the Wahgoshig First Nation over its northern Ontario exploration property, argue it is the duty of the government to consult with first nations when approving exploration claims.
 
One mining executive, who asked to remain anonymous, said that in some cases, aboriginal communities simply refuse to consult even when a company is willing, unless they are paid compensation to do so.
 
Some communities were demanding payments of more than C$100 000 before agreeing to start the consultation process, he said.
 
“It’s going to be the Wild West out there, when it comes to mining companies that have a bounty on their head.”
 
MINERS UNITED

 
Exploration firms have become so aggrieved with the situation that they have started an informal grouping called Miners United, which held a meeting at the PDAC convention to vent, and try formulate solutions.
 
The companies were frustrated, and felt that existing industry advocacy bodies, such as the PDAC were not representing their interests sufficiently, said Smitheman, who gave a presentation at the meeting.
 
They feel that the PDAC has a conflict of interest in attempting to represent the interests of both the industry as well as first nations, and felt the need to form a new body to deal with the problems they are facing in dealing with first nation communities.
 
“A lot of companies feel as though they’re being left out on their own with nobody to go to,” an executive who attended the meeting said in an interview.
 
PDAC senior program director Philip Bousquet said the industry body had done a lot of work on aboriginal issues.
 
“As a member-driven organisation it is important to listen to our members,” he commented.
 
LEGISLATIVE CHANGES
 
Meanwhile, PDAC Land Use Planning and Resource Development Program director Sheriden Barnett pointed out that amendments to the Ontario Mining Act that were due to come into effect later this year would deal with a lot of these issues.
 
The association sits on the advisory committee that is working on the regulatory changes.
 
The regulations are currently open for public comment, and the PDAC will also be making a submission as part of this process, she said.
 
Barnett acknowledged the frustration on the part of junior exploration companies over a lack of clarity on what is required in the consultation process, but expressed hope that the new regulations would remedy this.

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