The Pallister government must do a better job of vetting mining projects, Manitoba Liberals say, after learning the proponent of a controversial sand mine east of Winnipeg was part of another company ordered to cease trading by the Alberta Securities Commission last year.

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The Pallister government must do a better job of vetting mining projects, Manitoba Liberals say, after learning the proponent of a controversial sand mine east of Winnipeg was part of another company ordered to cease trading by the Alberta Securities Commission last year.  

Feisal Somji, CEO of CanWhite Sands, is the former CEO of Prize Mining Corp., and was named by the Alberta Securities Commission in January 2019 when Prize was ordered to cease trading while under investigation for allegedly breaching Alberta securities laws. The company was accused of acting "contrary to the public interest, by making misrepresentations and failing to comply with its continuous disclosure obligations."

One month later, the company was ordered to issue a news release disclosing that of the $6.5 million it reportedly raised from investors, $5.5 million was returned to some of them for "consulting agreements," the Alberta stocks watchdog said.

"Prize so issued the release and the cease trade order has long since expired," Somji's spokeswoman Marni Larkin wrote in an email. "There was no finding of any kind that Mr. Somji breached Alberta securities laws, or that he was even specifically involved in the transaction of Prize Mining in issue," said Larkin, owner of BoomDoneNext and a former top Tory strategist who worked with Gary Filmon's PC government.

Currently, Somji's CanWhite Sands Corp. is seeking approval from the Manitoba government to build a sand-processing plant 35 kilometres east of Winnipeg. Critics say it would threaten the drinking water of 64,000 people and they want the project put under greater scrutiny.

A spokesman for Conservation Minister Sarah Guillemard said the application has not been approved. 

"The province is continuing to carry out its due diligence in reviewing the company’s application under the Environment Act for the proposed sand processing facility," he said in a prepared statement. "The environmental assessment and licensing process will be followed, and the proposed project will be thoroughly reviewed in accordance with the act. The period for public feedback on the proposal closed on Aug. 25."

CanWhite Sands plans to remove 3.5 million tonnes of sand a year from the ground, for fracking and other purposes, at its Vivian Sand Facility Project near Anola, in the RM of Springfield.

The plan is to pump sand and water up from the ground and then return the water. Opponents have argued that the water will become contaminated when the pyrite in the shale hits the surface, oxidizes and turns acidic. They say there is a risk of contaminating the groundwater as well as the Brokenhead River and Lake Winnipeg. The frack sand mining and processing might provide short-term wealth to some, but critics say it would threaten drinking water for 64,000 Manitobans.

An environmental impact proposal, which was submitted to Manitoba Conservation, says "overall, the adverse residual effects of the proposed project are expected to be negligible to minor in magnitude, and mitigable."

The Pallister government isn't doing enough due diligence, and should have serious concerns about the project and its proponent, Manitoba Liberal Leader Dougald Lamont said.

He has called for a full review of the project before the Clean Environment Commission, including public hearings, in which the company would be questioned about its plans for Manitoba as well as its CEO's experience with the Alberta Securities Commission.

"Manitoba has enormous potential for resource development, but it has to be done with real integrity and respect for Manitoba’s people and our environment," said MLA Jon Gerrard, the Liberal party's critic for sustainable development.

carol.sanders@freepress.mb.ca

Carol Sanders

Carol Sanders
Legislature reporter

After 20 years of reporting on the growing diversity of people calling Manitoba home, Carol moved to the legislature bureau in early 2020.

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