A junior exploration company operating in the northwest is suing the Ontario government for $110 million in compensation for allegedly having to abandon its mining claims.
In a statement of claim filed in the Superior Court, the Sudbury-based company Northern Superior Resources says it obtained rights to mining claims to prospect and explore in an area about 740 kilometres northwest of Thunder Bay.
The statement says the area covered 57,200 acres, including areas near Sachigo Lake First Nation and Kitchenuhmaykoosib Inninuwug First Nation.
The company says the province should have engaged First Nations in consultation on its behalf.
Agreement with First Nation fell apart
According to Northern Superior Resources, it consulted on its own with Sachigo Lake First Nation and had an agreement until 2011.
But that agreement, it says, fell apart when the First Nation allegedly made demands that it deemed unreasonable, including making payments on invoices the company was not aware of, and wanting the company to charter an unsafe, community-owned aircraft.
Northern Superior Resources says it spent $15 million in acquisition, maintenance, exploration and aboriginal engagement and consultation. It says says Sachigo Lake received about $4 million as part of its agreement.
The company halted its work on June 26, 2012.
It accuses the province of failing to advise the company of difficulties and failing to put in place a framework so it could conduct consultation.
As a result, the company says it lost money and opportunities to finance, develop and sell the properties. It also says the stock valuation went down, and is seeking damages for potential lost income.
None of the allegations in the claim have been proven in court.
The New Democratic party's northern development and mines critic, Michael Mantha, says the lack of any framework for mining is driving away future investors. In a news release, Mantha said Northern Superior Resources is the fourth mining company to bring legal action against the Liberal government in recent years.
"The company...has been stalled by unclear consultation guidelines and lack of willingness on the part of the government to deal with the parties involved," he said.
In a written statement, Minister of Northern Development and Mines, Michael Gravelle said the province has offered to facilitate discussions between the company and First Nation.
Officials with the Sachigo Lake First Nation did not return CBC's calls for comment.
Statement from Michael Gravelle, Minister of Northern Development and Mines:
“In 2009, our government modernized a 100-year-old piece of legislation to bring the Mining Act into the 21st century. Ontario is committed to promoting mineral exploration and development in a manner that respects Aboriginal and treaty rights, and meeting the Crown’s duty to consult where it arises. New regulations require consultation and encourage early engagement with First Nations to bring more certainty to development.
Ontario remains the leading jurisdiction for the exploration and production of minerals in Canada, with over 600 projects being actively explored across the province. Our government remains committed to providing Aboriginal and northern communities with economic development opportunities from mining exploration and will continue to drive job creation and growth by creating a strong business climate for continued investment.
With respect to this particular matter, my ministry remains committed to working with both parties to help foster a positive relationship, while ensuring that Sachigo Lake First Nation is appropriately consulted. My understanding is that Ministry staff have made efforts to engage with both the company and the First Nation, and have offered to facilitate discussions between them. More recently, MNDM also invited the company to make use of the Ministry’s new regulatory process to provide a framework for consultation about any proposed exploration activities. As the matter is now before the courts, it would be inappropriate for me to comment further."