Gold junior miner takes on [Ontario] government – by Ian Ross (Northern Ontario Business – September 2012)

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North. Ian Ross is the editor of Northern Ontario Business

Darryl Stretch has his Howard Beale moments. Like the ranting fictional TV anchorman, emotion can get the better of the president of Solid Gold Resources when he discusses the exploration standstill at his Lake Abitibi gold play in northeastern Ontario.

The 25-year industry veteran admits to not being very polished, media-wise, in explaining his gloves-off approach in fighting to resume drilling at his Legacy Gold Project, a 200-square-kilometre property near the Quebec border that the junior miner has held since 2007.

“Everything we do in life is a double-edged sword,” said Stretch, whose torrent of colourful press releases attacking the province, the courts and First Nations as being “bullies,” “tyrants,” and speaking with “forked tongues” is the kind of vitriol that would make his company radioactive to investors.

“Even though I have a pretty pathetic-looking stock price (at $0.035 on the TSX Venture Exchange in mid-August), most of my shareholders are pretty comfortable with what I’m doing. We’ve been left with no alternative.”

His temper flared last January when an Ontario Superior Court upheld an injunction by the nearby Wahgoshig First Nation and the company was ordered to stop exploration for 120 days. The court ruled that the junior miner made a “wilful effort not to consult” with the community despite provincial requests to do so since 2009.

The First Nation claims the area in question holds significant cultural and archaeological value.

Justice Carol Brown ordered Solid Gold and the Ontario government to pay for a third-party mediator to begin a consultation process with the First Nation.

In appealing the decision, Stretch argues that the Ontario government delegated its duty to consult and accommodate onto his company, something it legally can’t do, citing a 2004 Supreme Court of Canada decision, Haida Nation v. British Columbia.

With exploration shut down and no money flowing in, Solid Gold is also suing the Ontario government for $100 million in damages.

“If it comes to the point where they make us give up all that 200-square kilometres, I expect it will be considerably more than that,” said Stretch.

Stretch said Solid Gold is sandwiched in the middle of a long-running turf battle between the First Nation and the government over access to Crown land.

Some in the industry silently cheer him on, while others wince. But Stretch is content to make as much noise as possible, even choosing to picket the First Nations.

“We decided to take a page from the First Nations’ playbook and speak out.”

On the opening day of the Assembly of First Nations’ annual general assembly mid-July, Stretch read aloud a statement outside the Metro Toronto Convention Centre as delegates filed past. He accused the government of looking the other way while First Nations impose a fee on industry and Canadians to access Crown land.

“I think the other half of Canada has to start standing up for its own rights too because we’ve been taking it on the chin and allowing First Nations to interrupt commerce in this country.”

Stretch said for some small juniors with sizeable and valuable properties, it’s difficult to speak out, and more expedient just to cut a secret deal with First Nations to get access to their claims.

Stretch said Wahgoshig representatives demanded that he pay $100,000 to do an archaeological study on the property during a heated meeting last fall. Band officials were not available for comment.

“I need to have the comfort that the Crown is standing up for my rights.”

Stretch is now calling on the province to demonstrate to the court that it’s met its duty to consult with Wahgoshig. He gave them a deadline of Aug. 18.

“I’m hoping the government will come forward with their declaration. Failing that, I will be asking the government to buy me out.”

Conflict with First Nations is part of what Ontario Prospectors Association executive director Garry Clark calls the “perform storm” in a less-than-stellar year for exploration.

The global commodities super-cycle has slowed, making it tough for junior miners to raise exploration capital, and the Ontario government is slow in rolling out its plans and permits revisions to the Mining Act, which affect First Nation consultation.

The lack of a provincial consultation framework has created a minefield for exploration firms working on Crown land.

First Nation court challenges, Aboriginal mining moratoriums, and a Ring of Fire ‘evictions list’ from the Matawa chiefs have caused a hardening of attitudes among prospectors and exploration firms that’s having an economic impact.

“It’s causing people to leave the province,” said Clark, adding most of the Thunder Bay-based junior miners are raising money and concentrating on projects outside of Ontario. One Vancouver mining executive told Clark in July that there are “too many problems in Ontario and until you solve them, we can go work in other places.”

The OPA is still doing damage control from a less-than-flattering national media portrayal last spring of Miners United, an ad-hoc group of frustrated prospectors and junior miners upset over government indecision on policy and consultation.

The over-the-top rhetoric and media coverage of land conflicts with First Nations does little to enhance the general public’s perception of the industry, said Clark

“It think it makes us look like a bunch of buffoons. It makes it look like there’s nothing good happening, and makes it look like you can’t work in Ontario.”

Clark said there are many Aboriginal bands and tribal councils in the Far North, along the north shore of Lake Superior, and in mining camps like Sudbury and Timmins that have embraced the industry.

“We want to get on the land, and a lot of First Nations want us on the land, but we don’t have any sign posts or template to do the consultation. We’re just stumbling around in the dark and make errors and cause bad feelings because we do things we didn’t know were going to be offensive.”

Clark said the upcoming Mining Act changes mean more paperwork for industry, but he is hopeful First Nations at large will buy-in.

“If it works, great, but if it doesn’t, then it’s a waste of our time and it’ll scare more people away.”

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