For a long time, Hans Matthews did not connect his mining career to his background as a member of the Wahnapitae First Nation. A childhood mineral enthusiast who dug “gold” out of the road at age seven, he had risen to vice-president of a mining company without thinking much about aboriginal land issues.
But when a violent land-use standoff between the Mohawk and the army in Oka, Quebec in 1990 led mining executives to fear they would lose the ability to mine in Canada, the nightmare visions shared by his colleagues left Matthews skeptical. He quit his job, got up to speed on treaty and land claim issues, and founded an organization to inform and aid aboriginal groups asking the same question he had always had: “Why aren’t more communities involved in mining when mines are in their backyards?”
Since founding the Canadian Aboriginal Minerals Association (CAMA) and serving as its president for the last 22 years, Matthews says the conversation has changed. Most obviously, the fears of 1990 have turned into awareness among mining companies that genuinely successful mining projects depend on community cooperation. But a handful of aboriginal groups have turned that notion on its head. Why should First Nations, Inuit, or Métis groups not build their own mines?
Self-sufficiency
The Dene Nations of the Northwest Territories (N.W.T.) have become the latest to act on that vision and are the most ambitious so far. In 2013, Denen- deh Investments Limited Partnership formed an exploration and mining company and bought up brownfield mineral properties in the N.W.T. with the intent of developing and operating a metal mine.
The decision to explore arose from broad discussions amongst Dene in N.W.T. communities about their vision for economic development in a region driven by the mining industry. Darrell Beaulieu, president and CEO at Denendeh Investments, tells the story of an elderly woman from the Yellowknives Dene who showed a prospector a lump of gold in 1932 and kicked off the development of the Giant mine. Beaulieu himself got his start in the exploration business. Since then, his focus on economic development as a former Yellowknives Dene First Nation chief and Dene business leader has often involved mining in some form or another.
But over those years, Beaulieu says, “The Dene have not really fully participated in the way that they wanted to.” Economic self-sufficiency is their new vision: Through exploring, developing and directly benefiting from their resources, the Dene can diversify their economies and sustain existing aboriginal- owned mine services businesses, more than 60 of which have sprung up in the N.W.T. in the last decade. As far as Beaulieu knows, they would be the first aboriginal owners of a metal mining company in Canada.
As resident owners, they also want to show potential investors a competitive edge. “We live here, we’re based here, we operate here,” Beaulieu explains, “whereas people in the past have seen mining companies come from other jurisdictions not really knowing the lay of the land.”
The Denendeh Exploration and Mining Company, or DEMCo, bought four brownfield mining properties in the Camsell River mining area near Great Bear Lake in 2013. The Terra mine is the most exciting property, with a past history of silver production. There is also potential for other minerals in the total assembly of leases, which includes the former Smallwood, Northrim, and Norex mines. The claimholder of Norex was a lone prospector, geologist and mining engineer who optioned it to DEMCo and asked to be a director of the company.
DEMCo is now focused on compiling existing exploration data and using that information to create three-dimensional models. Denendeh Investments has raised close to the $1 million needed to carry the project through this phase. After the models are complete, DEMCo will hit the mining conventions in Yellowknife, Vancouver, and Toronto and begin in earnest to seek out a joint venture partner, whether from Canada or overseas.
Project proponents, not beneficiaries
With a vision, good management and a strong funding base, DEMCo could generate far more income as a project proponent than impact and benefit agreements would provide. “I think First Nations are starting to realize that that’s where the real substantial income is made,” says Merle Alexander, a partner at Gowlings, who practises aboriginal resource law, “and that they have to start looking at their own territory and identifying areas where they could find it acceptable for there to be mining development and then trying themselves to start staking claims.”
Aboriginal-run mining operations are out there. Many First Nations run gravel pits, which have low start-up costs, ranging up to $1 million. A few aboriginal groups have run industrial minerals operations producing graphite, garnet or marble, which can cost several million dollars to develop. Matthews and CAMA helped a Labrador Inuit company start up two labradorite quarries. A Sudbury-area garnet mine owned by members of the Mohawk Nation and located on Wahnapitae land has been running for about 10 years. In 2013, Mohawk Garnet received $4.3 million from the Northern Ontario Heritage Fund to expand its processing plant.
But despite the potential, Alexander says the topic of becoming a project proponent seldom surfaces in his conversations with clients. While there are numerous reasons why more First Nations have not started up their own mines, they generally come down to money. “To be a mine operator you have to have a lot of cash, and so that excludes a lot of people, not just First Nations,” points out Glenn Nolan, vice- president, aboriginal affairs at Noront Resources and former chief of the Missanabie Cree. But First Nations have it particularly hard, as their income sources put tight limits on what they can actually do.
“Most communities get probably 90 per cent of their money from government revenues,” says Matthews. “Maybe the other 10 per cent comes from their own economic development ventures.” Government cash contributions are measured within short timeframes from one year to several years, limiting their usefulness on major infrastructure projects.
“Other orders of government do not function on such short financial horizons,” says Harold Calla, co-founder and executive chair of the First Nations Financial Management Board (FNFMB) and member of the Squamish Nation in British Columbia. “Most governments will finance their infrastructure assets over the life of the asset. We’re being expected to pay for them in 12 months. It’s just not realistic in the world we have today.”
More important than cash is the ability to obtain loans. Here, too, aboriginal governments are at a disadvantage. Rarely does a First Nation have the financial track record to reassure lenders; it is also difficult to get a loan without collateral, which is the case for First Nations whose assets are on reserve land. Those assets cannot be put up as collateral, because the lender has no right of seizure and no ability to sell to another party.
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