First Nation clashes with Red Lake gold miner – by Ian Ross (Northern Ontario Business – December 21, 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

A small northwestern Ontario First Nation community is threatening legal action against a Red Lake gold miner which is advancing a high-grade deposit toward an early 2014 startup.

Wabauskang First Nation Chief Leslie Cameron said negotiations for a benefits agreement are not going well between his community of 300 and Rubicon Minerals over its Phoenix Gold project.

The band has instructed its lawyers to file a lawsuit at the Ontario Superior Court opposing Rubicon’s project. While the band is frustrated with the pace of development by the Vancouver-based miner, it has an even bigger bone to pick with the federal and provincial governments.

In a Dec. 17 news release, the band said it has repeatedly reminded and complained to Queen’s Park and Ottawa of its “constitutional obligations to consult and accommodate,” with First Nations on mining and exploration projects. But the band said both levels of government have ignored them and foisted those duties onto the mining companies.

“We’re a patient people but my patience is running out,” said Cameron, whose community is about 100 kilometres south of Red Lake and has traditional territorial claims in the area.

“It’s not up to them (Rubicon) to consult, it’s up to the province, and we want the province and Canada to step in and do their due diligence,” he added. “The province seems to listen more to industry than to our concerns.”

A major issue with the band is the Ontario Ministry of Northern Development and Mines’ approval of Rubicon’s mine closure plan in December 2011, “over our objections,” said Cameron.

Cameron doesn’t believe the project immediately requires a closure plan for a mine startup “three or four years” down the road, and blames the province for pushing the pace of development.

At Phoenix Gold, Rubicon is deepening a shaft on a past-producing mine, has extended an existing headframe, added a new hoist and is building grinding and ball mills. The high grade underground gold deposit is fully permitted through to production.

With an estimated 12-year mine life, Phoenix Gold is forecasted to produce 180,000 ounces of gold a year.

In a Dec. 17 release, Cameron said his relationship, under Treaty 3, is with the federal government and until the band’s rights and interests are respected, they will oppose all of Rubicon’s activities.

“We were forced to go to court. Maybe then somebody will start to listen. We’re a small community, one of the smallest in Treaty 3, and people figure they’re going to just walk over us. I can’t let that happen as leader.”

The band is leaning on a 2011 Ontario Superior Court decision, considered a legal victory by the Grassy Narrows First Nation, near Kenora, which strengthens the role of Aboriginal bands in the northwest to have a greater say on resource extraction projects north of the English River.

Cameron stopped short of saying his band is seeking a court injunction to stop the mine’s construction – “We’re talking that over with our lawyer right now” – choosing instead to comment on what he deems a “flawed” consultation process

Comment from First Peoples Law, the Vancouver firm that distributed the Wabauskang release, was not immediately available.

As of Dec. 19, Rubicon officials still had yet to receive official notice of any legal action initiated by Wabauskang.

The company claims it has shown good faith in its discussions and consultation with the band since January 2009.

“The relationship generally has been good,” said company president and chief operating officer Mike Lalonde. “We’re coming from two different directions.”

Lalonde said the company has spent $300,000 working with Wabauskang through the consultation process for environmental reviews, providing legal assistance for the band, financial analysis, a traditional land study, meetings, travel for band members, per diems and honorariums, not including fees paid to a consultant, picked by Wabauskang, to complete an environmental review of the Phoenix Gold project.

“There were a number of concerns brought up by that environmental consultant,” said Lalonde. “Every one of those concerns was addressed in the mine plans and with the closure plan. We’ve addressed every issue.”

Rubicon has a benefits agreement signed with Lac Seul First Nation, near Sioux Lookout, that involves employment opportunities and other benefits. The company claims its underground mining contractor is Métis owned and the total value of these contracts is $30 million.

“Lac Seul has some joint venture partners that we have contracts with in constructing the mine and several of their people are employed at the mine,” said Lalonde.

A similar agreement is being negotiated with Wabauskang, the last meeting taking place earlier this month with another scheduled next month.

“We’re getting into the benefits agreement and, of course, there is additional financial benefit for them and employment opportunities.”

Though not directly involved in talks, Lalonde preferred to keep the details of the issues and tone of the negotiations confidential, “but there was no indication they weren’t coming back to the table.

“We may well be back in January. I don’t want to throw any cold water on things. The door’s open.”

Impact benefit agreements between mining companies and First Nation communities and tribal councils are negotiated privately and, in most cases, kept confidential.

Cameron wouldn’t discuss if his band wanted similar arrangements as Lac Seul had successfully negotiated.

“Lac Seul is its own community and all we want is what’s fair,” said Cameron.

“Whatever Lac Seul has, that’s good for them, but it’s got nothing to do with us.”

With other near-term gold and iron ore mine projects in the Red Lake mining district occurring within an hour’s drive of Wabauskang First Nation, Cameron wouldn’t rule out resorting to litigation against other companies.

“That depends on how they deal with us. Everybody’s different.”