Exploration deals move Manitoba mining into modern era

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This article was published 10/12/2018 (220 days ago), so information in it may no longer be current.

First Nation inclusion in the mineral exploration process is still in the dark ages in Manitoba and the mining sector has suffered as a result, says a Toronto lawyer who specializes in such contracts.

Kate Kempton, who negotiated two recent contracts in Manitoba where mineral exploration crosses traditional First Nation land, says there are hundreds of such contracts across the country already, but Manitoba’s just getting started.

"Frankly, it’s about time," Kempton said in a phone interview. "First Nations were getting completely left behind."

Kempton, who is with Toronto law firm Olthuis Kleer Townshend, recently completed a "mineral exploration accommodation agreement" for lithium between New Age Metals and Sagkeeng First Nation in southeastern Manitoba.

A year ago, she handled the diamond exploration agreement between Bunibonibee Cree Nation (Oxford House) and Altius Minerals Corp.

"I was told by members of the Manitoba government that (the latter) was the first mineral exploration accommodation agreement of any substance in Manitoba," she said.

Manitoba has fallen in the eyes of the mining industry in recent years, as shown by a recent Fraser Institute survey, and a big reason is an ongoing uncertainty regarding protected land and the consultation process with First Nations.

Kempton can understand why.

"In terms of the Crown government and its interpretation of the duty to consult and accommodate First Nations, Manitoba is years behind," she said.

"It’s where B.C. and Ontario and the Northwest Territories were about 20 years ago."

Ron Evans, chief of Norway House Cree Nation, is co-chairman of a task force with former Progressive Conservative cabinet minister Jim Downey, to develop a new provincial mineral development protocol with First Nation communities.

Kempton said having an exploration agreement, or an Impact and Benefit Agreement (IBA) once a mineable deposit is found, are "bankable assets" for companies.

"The companies get absolute legal and financial certainty. The First Nation can’t sue for the project and it can’t blockade," she said.

Investors like them, too.

"Mines are hundreds of millions of dollars in capital costs and have to raise that money, and those bankers and block investors are saying, ‘Where are your IBAs and consent from First Nations?’ Many either won’t invest in a mine without consent or are more reluctant to."

With exploration agreements, companies deal directly with the First Nation and give legally binding assurances they will both prevent impacts that can be prevented, including performing archeological studies and mitigating unavoidable impacts as much as possible.

Companies also pay a small percentage of about 1.5 to five per cent of their exploration expenditures to the band. Kempton described it as "a cost of doing business" not unlike what a company would pay the government for permitting and administrative costs.

A band’s legal fees are also paid by the company in an exploration agreement. Kempton said it’s unfair to expect bands to pay legal fees.

"It’s putting the First Nation out of pocket to have its rights respected. It’s ridiculous," she said.

"Typically what’s happened in the past is First Nations haven’t had the funding and their rights don’t get protected."

Finally, companies in exploration deals agree to negotiate a revenue-sharing IBA if ore is found. Because her law firm has negotiated hundreds of IBAs, it ensures neither party makes outlandish demands.

"Most lawyers who have significant practice in this area, as we do, will advise on what the acceptable ranges are," she said. Financial advisors are also used.

OKT Law has written over 200 IBAs, including one for Voisey’s Bay in Labrador, and hundreds of more exploration agreements.

"Times are changing. It’s about time we entrenched our inherent right on our traditional lands," said Sagkeeng First Nation Chief Derrick Henderson, who recently signed an exploration agreement.

"Before you do anything in our territory, you need to see us first. The province has no authority to be signing away on agreements that impact our community or our traditional territory," he said.

bill.redekop@freepress.mb.ca