Ontario to pay Platinex $5 million in settlement

 The Ontario government has agreed to pay Platinex (PTX-V) $5 million to drop lawsuits against the Crown and the Kitchenuhmaykoosib Inninuwug (KI) First Nation in Big Trout Lake, Ont., after a messy, decade-long dispute over exploration permits.

Platinex must surrender all its mining claims and leases at Big Trout Lake, but will be reimbursed for its expenses during the mediation process. The amount is still being discussed.

The government is removing the contested land from staking and mineral exploration though Platinex will be entitled to a 2.5% net smelter return royalty if in the next 25 years a mine is developed on the property.

Platinex president and CEO Jim Trusler said he couldn’t wipe the smile from his face when he learned about the settlement.

“You can’t see me but I’m grinning from wall to wall of the room here,” Trusler said in a phone interview. “As an exploration company sometimes you work on a shoestring but this is not a shoestring, it’s a lot of cash to work our properties with.”

Trusler first became involved with the property back in 1985, but it wasn’t until 1998 that Platinex was formed and the conflict really started.

“We did work with KI on exploration for part of the period but there was quite a bit of friction involved with that,” Trusler says. “It was during that period that the KI established a treaty land claim and were interested in taking over the claims and leases.”

The dispute escalated in 2006 when the KI blockaded Platinex from the property. Platinex launched a $10-billion lawsuit against the KI for damages and a declaratory order recognizing the validity of the company’s mining leases. The amount of the lawsuit was later lowered to $10 million.

In May 2008, Platinex sued the Ontario government for $70 million in damages plus interest and costs.
Over the years, members of KI continually prevented Platinex from accessing the property in spite of court orders. In March 2008, six KI members were sent to jail for contempt of court.

All along though, both Platinex and the KI have agreed that the province was to blame — Ontario’s 137-year-old mining act is unclear and outdated in many ways. One key area of confusion was over the duty to consult landowners and communities throughout the exploration and development process. It was unclear whether it was the government or the mining company who had to reach out and there was no official protocol for what information was required. The act was recently rewritten to address all of the concerns and now includes dispute resolution process. However, many First Nations still feel the new act still doesn’t measure up because neither aboriginals nor private land owners have a final say in what lands can be explored.

Still, KI members are happy that exploration and mining won’t occur in Big Trout Lake.

“It’s a major victory for the Kitchenuhmaykoosib Inninuwug,” said Jacob Ostaman, director of the lands and environment program in Big Trout Lake. “The area that’s in dispute has a number of rivers and streams that flow into our lake and our lake is our source of livelihood. If there was mining, it would be contaminated.”

Still, Ostaman is a little disappointed that the KI won’t be compensated for its legal costs over the years.

Michael Gravelle, minister of Northern Development, Mines and Forestry, says the government doesn’t agree to settlements like this very often.

“This has been unquestionably a very challenging situation,” he said in an interview. “And there have been times when emotions have run high.”

Gravelle notes that there are as many as 60 agreements between mining companies and First Nations groups in Ontario.

“There are some real economic development opportunities related to mining in the province and obviously our ministry is keen to see these opportunities moving forward.

Gravelle says Platinex will finally be able to move forward and that the government and KI will be able to build their relationship, too, though the First Nation is firmly against mineral development.

Platinex plans to use the funds to explore its other projects in Ontario, Trusler noting that finally, it won’t be a “litigation company” anymore.