A cautionary tale for the mining industry [Solid Gold Resources/Wahgoshig F.N. conflict] – by Jeff Gray (Globe and Mail – March 7, 2012)

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David Babin, chief of the tiny Wahgoshig First Nation in Northern Ontario, was driving home from nearby Kirkland Lake during the spring thaw last year when he noticed the heavy equipment of a drilling crew, looking for gold in his people’s traditional lands.

It was the first Chief Babin had heard of the drilling. And it was the beginning of conflict that would end up in court, with an Ontario judge handing down a rare injunction earlier this year that suspended drilling on behalf of Solid Gold Resources Corp., a Thornhill, Ont.-based junior miner, and ordered consultations with the Wahgoshig.

“They didn’t understand first nation’s concerns,” Chief Babin said of the company in an interview. “Meanwhile, these guys kept on drilling, saying, ‘We’ve got the right to drill, and you can’t stop me.’ ”

Lawyers who work on these cases, representing both native bands and mining companies, say Solid Gold’s story is a cautionary tale for companies that fail to properly consult native communities that could be affected by their activities on Crown land.

Mining activity has boomed in recent years in the North, but the Supreme Court of Canada’s landmark 2004 Haida decision, which broadened the legal concept of a “duty to consult” native bands in such cases, has also forced companies to conduct broader consultations. But in addition to revenue-sharing deals, job guarantees and other agreements between native bands and mining companies, dozens of cases like Wahgoshig’s are ending up before courts and tribunals.

It is a front-of-mind issue in the industry. The Prospectors and Developers Association of Canada (PDAC) annual mining industry convention in Toronto this week offers a list of workshops in aboriginal engagement.

Outside the event on Tuesday, members of the Kitchenuhmaykoosib Inninuwug First Nation, located some 600 kilometres north of Thunder Bay, and about 80 supporters protested against the presence of junior miner God’s Lake Resources Inc. in their traditional lands.

On Sunday, the Ontario government suspended all other mineral exploration in the area to avoid conflicts. (In 2008, six KI members were jailed as they battled another mining company, Platinex Inc. In that case, Ontario paid the company $5-million to abandon its plans.)

In the Wahgoshig case, Ontario Superior Court Justice Carole Brown issued an order in January that Solid Gold cease any exploration for 120 days and enter into a process of “meaningful consultation and accommodation.” The injunction was granted pending a lawsuit from the Wahgoshig against both Solid Gold and the province over the drilling.

For the rest of this article, please go to the Globe and Mail website: http://www.theglobeandmail.com/report-on-business/industry-news/the-law-page/a-cautionary-tale-for-the-mining-industry/article2360860/

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