Mining wins as Ontario breaks Temagami pledge – by Moira Welsh (Toronto Star – December 12, 2011)

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Ontario is planning to kill its promise to protect an ecological gem — an old-growth forest near Temagami.

The Ministry of Natural Resources wants to change the “forest reserve” designation for 340 hectares around Wolf Lake to “general use,” which puts a greater focus on mining instead of forests and recreation.

The only company drilling in the region is Alberta’s Flag Resources, which has been delisted or forced to stop trading on stock exchanges across the country. It is currently not trading anywhere.

Located some 50 kilometres northeast of Sudbury, Wolf Lake lies in the area commonly called Temagami. It is beloved by hikers and canoeists for its soaring stands of 300-year-old red pines and deep blue lakes.

Ontario’s Environmental Commissioner Gord Miller said he’s “greatly disappointed” by the ministry’s plan to backtrack on a long-held agreement to protect Wolf Lake, which would have eventually turned it into parkland.

“There is a uniqueness to these forests. They stand for hundreds of years, and they are very important here in Ontario,” Miller said.

More than double the size of Toronto’s High Park, the 340 hectares in question encompass the area where Flag Resources’ two mining leases exist.

The problem, Miller said, is a “policy conflict” between the natural resources ministry (which is supposed to protect Crown land) and the Ministry of Northern Development and Mines (which supports the mining and logging industries).

Last spring the northern development ministry renewed Flag Resources’ mining lease until 2031. A second 21-year lease is up for renewal next May.

A ministry spokesperson said in an email it renewed the lease because “Flag Resources has been exploring in Ontario for over 30 years. Their exploration record in Ontario is in good standing. (This ministry) is unaware of any violations of the Mining Act provisions.”

If the government did not renew the lease, Wolf Lake could have become protected parkland under its “forest reserve” status. Miller said there is no requirement that the lease renewal be jointly discussed by the two ministries — another example of bad environmental policy.

In 2009, he called for changes to the Mining Act that would allow the government to buy out mining claims when there are “clear ecological consequences.” No action was taken.

“So in the end,” he said, “the government’s response is this one. They are going to make it general use and open it up.”

A spokesperson for the Calgary-based Flag Resources, which holds the only two mining leases around Wolf Lake, said there is potential for gold, copper, cobalt and palladium mines. Flag has drilled 200 exploratory holes there since the 1980s, the spokesperson said.

“We just finished the holes in the past year,” Murdo McLeod said by phone from Calgary. “I am telling you, for god sakes, we’ve spent over $8 million there. We’re not fooling around.

“The ministry (of northern mines and development) is very happy with our work. And the environmentalists have no concern about us. You better make that clear. We’ve cleaned up everything. There’s not a goddamned bush that has been disturbed and we’ve never had one formal complaint after 200 drill holes.”

David Sone, of the environmental group Earthroots, said members have complained to the Ontario government for years that mining in general should not be allowed in the Wolf Lake region. The rules concerning clearing land and digging trenches, for example, are just too lax for sensitive land, Sone said.

“Instead of protecting the old-growth forest, they are trying to encourage investment in a company that even the stock exchange won’t list,” Sone said.

The TSX Venture Exchange in Toronto delisted Flag Resources in 2005 for failing to meet listing requirements, an exchange spokesperson said. In 2006 the company was ordered to “cease trading” on Alberta and British Columbia exchanges as well.

In a letter sent to McLeod at the time, the TSX Venture Exchange said it found McLeod “unsuitable” to serve as a director and officer of a publicly traded company.

In 2010, the Alberta Securities Commission upheld the interim order to stop trading of Flag Resources and “permanently prohibited” McLeod from acting as a director of any publicly traded company in the province. The company’s appeal was later denied.

In the reasons for its decision, the commission cited “serious flaws in (Flag Resources’) financial reporting and disclosure practices.”

The Alberta Commission said McLeod “displayed a disregard” for Alberta securities laws and dismissed rules around financial disclosure “as being, in his view, excessive, not necessary or inappropriate for junior mining companies.”

But the 84-year-old McLeod described the enforcement as a vendetta against his company and claimed that he, and Flag Resources, had done nothing wrong.

“And now as far as us being delisted and everything else, that is an ongoing situation and I would suggest you don’t go into it or you are going to have a real legal hassle on your hands,” he said.

He said the hearings were biased from the start. “We believe that someone is trying to grab a hold of this company because of its potential value.

“They will not show us a damn thing we’ve done wrong.”

But now, McLeod said, the company has 3,000 shareholders across North America focused on the gold in the ground. He said he has nine potential mining sites with samples of gold and copper in several.

For the rest of this article, please go to the Toronto Star website:–ontario-breaks-temagami-pledge?bn=1