NEWS RELEASE: First Nation Chiefs seek fair, inclusive and transparent bidding process for Cliffs Chromite assets

MARTEN FALLS FIRST NATION, ON, April 25, 2015 /CNW/ – The leaders of Marten Falls First Nation and Aroland First Nation are expressing disappointment that the bidding process for the Cliffs Chromite project assets, as currently managed, has not been inclusive and transparent, leading to a potential unfair and biased outcome. The leaders assert there is a bidder who not only has First Nation support, but has a superior bid that will benefit Cliffs’ creditors and help advance the Chromite project for Ontario.

“We are united in opposing the proposed Noront and Franco-Nevada deal and we will do everything in our capacity to make sure that no ore will ever leave our backyards without the meaningful involvement and participation of all Matawa First Nations,” said Interim Chief Bruce Achneepineskum of Marten Falls First Nation. “It is incomprehensible that the interest and ability of our communities to participate in the transaction has been so discounted that we were never even approached for any commercial discussion. Contrary to statements made in the Court, that the Matawa First Nations should be indifferent to who ultimately buys the Chromite assets, our communities will be directly, economically and forever impacted by the outcome.”

Under the proposed Noront transaction, Franco-Nevada will purchase a 3% Net Smelter Royalty (“NSR”) on the chromite mining claims as part of their agreements to finance the deal. This will bring the total NSR to 5% on these claims, a very high royalty load that will significantly impair the ability to justify and finance the ultimate construction of the Chromite project. If the project is put into operation, this additional revenue royalty will reduce the profitability significantly, cutting into the bottom line and jeopardizing chances of the First Nations obtaining any benefit. This will cause more exposure to pricing cycles and less profits to be shared with the impacted First Nations.

Further to the importance of the buyer, Noront has stated that they intend to prioritize development of their Nickel Project over the Chromite Project and that they continue to promote an East West route for industrial transportation infrastructure. The Nickel development is important to the communities, however it is much smaller and has a much shorter life than the Chromite Project. More importantly, a North South corridor is considered necessary for the chromite development viability. A suboptimal first step regarding the choice of corridor would have long-lasting implications for the communities. Marten Falls and Aroland continue to be 100% in favour of a North South corridor and a plan that will connect all 5 remote Matawa communities.

“I attended the Quebec Superior Court on Friday,” said Chief Sonny Gagnon of Aroland First Nation. “The Honourable Judge showed understanding of our concerns, but he will have to make his decision based on the laws before him. It is unacceptable that the mining companies involved have me sitting in a Court in Montreal to find out how they will extract resources in our backyards. The companies had a choice to make, and they chose to do their deals behind our backs and entirely without consideration of the impact on our communities.”

The First Nations indicate that should the bidding process be opened, they are committed to participate in the ownership of the assets in their traditional territories to protect their rights and interests, and the long-term wellbeing of their communities.

“Even though it is the Government’s ‘Duty to Consult’ our First Nations, mining companies have a moral, if not a legal ‘Duty to Consult’ delegated to them by the Crown, to meaningfully seek First Nation involvement and participation,” said Achneepineskum. “Our participation will lead to better understanding and better relationships, ultimately leading to good business decisions and better protection of our lands, values, heritage, traditions and livelihoods.”

“It was obvious in Court that First Nations were not consulted by Cliffs, Noront, Moelis, and the Monitor, FTI Consulting,” said Gagnon. “We have been denied the opportunity to participate in a fair, transparent and inclusive process. We were surprised to hear in court that the Monitor sanctioned a process that excluded us despite the fact that the Monitor knew at that time that we were interested in participating. We were even more surprised to learn that the supplemental process was flawed in its execution, favouring Noront.”

“We are hoping the Court will recognize the dire implications of a sale to Noront and identify with our aspirations to have direct ownership for First Nation communities, children and future generations. That direct participation can happen if we participate in a transparent and inclusive new process and take part in this mining opportunity as equity partners,” said Achneepineskum.

SOURCE Marten Falls First Nation

For further information: Chief Sonny Gagnon – 1-807-329-5333, 1-807-620-7195; Interim Chief Bruce Achneepineskum – 1-807-349-2509, 1-807-630-1843