Rubicon cheers Ontario decision

Rubicon Minerals (RMX-T, RBY-X) is applauding the Ontario Court of Appeal’s move to reverse a lower court’s 2011 decision in the Keewatin case that said the provincial government could not approve resource development in the Treaty 3 region of northwestern Ontario if it affected treaty harvesting rights.

Rubicon was not part of the Keewatin case that Grassy Narrows — one of the 28 First Nations comprising the Grand Council of Treaty #3 — took to court, waging a decade-long battle claiming that the provincial government was violating its harvesting rights by allowing logging on its traditional lands protected by the treaty signed in 1873. But the overturned ruling could now impact how a potential lawsuit by the Wabauskang First Nation against Rubicon plays out.

The verdict, delivered on March 18, says that Ontario could take up treaty lands for mining and other related activities without the consent of the federal government, something Wabauskang, along with many other First Nations, were hoping would not be the case.

Wabauskang, a 300-member community located 100 km south of Red Lake, launched a petition against Rubicon’s mining permits last December.  

Led by Chief Leslie Cameron, the group states that the province and Canada should have consulted with it about the mining project, arguing that Rubicon also failed to adequately consult it before Ontario approved its mine closure plan.

“The province seems to listen more to the industry than to our concerns,” Cameron told Northern Ontario Business in December.

Rubicon says it believes the pending lawsuit is “without merit,” claiming it regularly met with Wabauskang and the other two Aboriginal communities near its high-grade gold project.  

Allan Candelario, Rubicon’s director of investor relations, says Rubicon held 28 meetings since January 2009 with the Wabauskang, Lac Seul and Metis communities. Wabauskang hired an environmental consultant in 2011, paid for by Rubicon, to review the draft of the production-closure plan, he adds.

“They [Wabauskang] made several recommendations and mitigation measures that they believed needed to be included to protect the rights of the Wabauskang people, and we incorporated all those recommendations into our mine closure plan,” Candelario says.

Some of these changes included retaining an environmental monitor, funding a project committee to help with talks and funding independent reviews of future permit applications.    

Rubicon received approval for its closure plan from the provincial government in December 2011, Candelario says, adding that Wabauskang had 15 days to appeal the decision, but didn’t.

Instead, on Dec. 21, 2012, the band named the company in a petition for judicial review questioning Ontario’s authority to approve the production-closure plan.

Candelario says that the group should have submitted an affidavit on Jan. 21, 2013, to support their petition and begin the legal process, but the band requested the province and Rubicon to allow it to postpone its application for judicial review until after the Keewatin verdict, the company reported on March 17. Under the consent order, Wabauskang now has to wait 90 days from when the court ruled on the Keewatin case to perfect its application.

“It was never clearly stated why the delay was sought,” Mackie Research analyst Barry Allan writes in an email. “But if the province of Ontario’s appeal had failed, I’m sure the application for judicial review filed by the Wabauskang First Nation would have also contained a statement saying that the Ontario government had no jurisdiction to approve the closure plan.”

Allan believes the community is “upset with the financial terms offered as compensation, and are using the court system to negotiate a better deal.” 

Candelario says the discussions Rubicon had with Wabauskang to work out a benefits agreement are confidential, but notes that the company is willing to negotiate. He points out that Rubicon has “great relationships” with the Metis Nation of Ontario and Lac Seul First Nation.

Rubicon is finalizing a benefits agreement with Lac Seul, located near Sioux Lookout. The roughly 2,700-member community is one of the largest in the Treaty 3 region of northwestern Ontario.

Talks between Rubicon and Wabauskang have since halted, as the group decides on whether to proceed with the lawsuit. Some analysts predict that Wabauskang could have a hard time proving why the company’s permits should be cancelled with the Keewatin ruling. But that case, which has upset many, could end up with the Supreme Court of Canada.

Ontario Regional Chief Stan Beardy was disappointed about the Keewatin ruling. “This was a unique opportunity for the Canadian judicial system to support the true spirit and intent of important treaty rights, but instead, the court fell back on dubious and one-sided jurisprudence from over one-hundred years ago,” he said in a statement issued by the Chiefs of Ontario. “It seems that nothing has changed in Canada.”

Meanwhile, construction on the fully permitted, underground mine at Phoenix is full steam ahead, with production slated for the second half of 2014. A resource update and an optimized preliminary economic assessment are expected during the year. The project is poised to produce 180,000 oz. gold a year throughout its 12-year life.

Rubicon maintains that it will “vigorously defend its consultation record” and its development of the Phoenix project “in any legal dispute.”