Further delays for Platinex

After a 5-month delay of its exploration drilling program at Big Trout Lake, in northern Ontario, junior explorer Platinex (PTX-V) is facing at least another five months of paralysis, owing to an Ontario Superior Court ruling that said the company tried to “steamroll” over a local aboriginal community that objected to the exploration program, and that the community had not been adequately consulted about activity on its traditional land.

The Aurora, Ont.-based company has been ordered to delay drilling for platinum group elements at Big Trout Lake, nearly 600 km north of Thunder Bay, Ont., until at least December, while consultation between the company, the Kitchenuhmaykoosib Inninuwug (KI) First Nation and the provincial government takes place.

Platinex has not had access to its claims since late February, when protesters from KI interrupted drilling only days after it began, forcing the company to abandon the site. KI has land claims pending in the area.

In his decision, Justice Patrick Smith cited the company for ignoring KI’s repeated objections and the reasons for those objections — lack of consultation and the band’s impending land claim.

“Since 2001, Platinex has received several letters and notices that KI was not consenting to further exploration,” Justice Smith wrote. “It is inconceivable that Platinex did not know that KI strongly opposed any further drilling on the property.”

The injunction is conditional, requiring that KI return any of the company’s equipment in “reasonable condition.” The First Nation must also immediately set up a consultation committee to negotiate with the province and Platinex with the aim of reaching an agreement that would allow the company to resume drilling.

Although Platinex lawyer Neal Smitheman says the further delay is “very bad news financially” for the struggling junior — which had asked the court for an injunction against KI — the ruling offers some hope for the company.

“In many ways, we welcome the decision,” Smitheman says. “While on its face, it’s not what we wanted, nevertheless it does give us an opportunity to try and resolve these matters with KI and get the province involved in the consultation process — (the lack of) which is what got us in this position in the first place.”

Both KI and Platinex have blamed the province for the dispute, which has seen the company initiate a $10-billion lawsuit against the native band, which has in turn launched a constitutional challenge to Ontario’s Mining Act. The courts have established that it is the Crown’s duty to consult with First Nations before allowing activity — such as exploration — that could affect aboriginal treaty rights such as hunting and fishing.

In his decision, Judge Smith wrote that the Ontario government had “abdicated its responsibility and delegated its duty to consult to Platinex” while at the same time, allowing the company to explore the land.

While it is currently working on guidelines for consultation, the province has been criticized for not moving faster to comply with its duty to consult, most recently confirmed in the 2005 Mikisew Supreme Court ruling.

Rick Bartolucci, Ontario’s minister of northern development and mines, said in a press release that the ruling is an “important step forward.”

Perhaps more importantly, he addressed industry fears that the case could have a negative impact on mineral exploration in the province.

“I want to stress that the decision not to grant the company’s injunction application was based on the specific facts of this case, and does not impact the legitimacy of other mining claims in Ontario.”

Lawyers for both Platinex and KI have suggested the decision could have important implications for companies exploring on aboriginal traditional land.KI lawyer Kate Kempton said the decision places more responsibility on companies.

“Mining . . . or exploration companies cannot simply go in and turn a blind eye to whether or not the province has met its duties,” Kempton says. “Mining companies must satisfy themselves that they and the province have engaged in good-faith consultation.”

Industry sources have suggested that the case could also result in clear rules for consultation and increased aboriginal participation in the industry — both benefits for the exploration and mining community T.N.M., July 7-13/06).

Although Platinex is “optimistic” about the court-ordered consultation process, it has filed notice to appeal the ruling.

“Management is concerned that the court’s decision sanctions the KI unilateral ‘moratorium’ on prospecting and exploration on KI’s traditional territory,” said Platinex in a statement. The company added that Natural Resources Minister David Ramsay has stated the moratorium, which KI first declared in 2001, has no legal force.

Kempton says the decision bodes well for KI’s challenge to the Mining Act, which will argue that it violates constitutional protections of aboriginal treaty rights.

“(The court recognized) that from the aboriginal perspective, the connection to the land is very much at the core of their identity and that this must be respected,” Kempton says.