Pace picks up for aboriginal engagement

2012 brought unprecedented engagement of First Nations in mining industry activities in Yukon Territory. While tight financial markets appeared to slow the pace of mining exploration, efforts of mining companies, local and territorial governments and others to advance and/or initiate various cooperative agreements with the 11 self-governing aboriginal groups with traditional territories in the Yukon seemed to intensify.

Adding to a significant roster of existing agreements, mining companies forged new pacts with a number of Yukon First Nations, including the Tr'ondëk Hwëch'in First Nation, the Kluane First Nation, the First Nation of Na-Cho Nyak Dun and the Ross River Dena Council and Liard First Nation on behalf of all Kaska communities, including Daylu Dena Council, Kwadacha, and Dease River First Nation.

In addition, First Nations affected by legacy contamination at the abandoned Faro Mine, including the Selkirk First Nation, the Ross River Dene Council, and the Liard First Nation, continued their ongoing discussions with contractors charged with developing a project design for traditional knowledge and environmental monitoring, cultural awareness and other aspects of the Faro Mine Closure and Remediation project. The project, which is funded by the Canadian government, is expected to cost C$450 million to C$590 million. The Affected First Nations are involved in various aspects of the project's planning phase which is due to be completed in two to three years.

Further, five local governments, agencies and corporations reported in July that they are working together to look into the possibility of a biomass project for the community of Haines Junction. The Champagne and Aishihik First Nations, the Dakwakada Development Corporation, Yukon Energy, Cold Climate Innovation of the Yukon Research Centre, and the Village of Haines Junction are investigating the potential for a two to three megawatt biomass plant in the community.

If approved, proponents say the plant would provide some much-needed renewable electricity for the Yukon. It also has the potential to produce district heat and create economic opportunities for local businesses and corporations.

Successful engagement

Cooperative agreements between mining companies and Yukon First Nations are nothing new. Some of the most successful and comprehensive pacts have been inked in recent years between the territory's three producing mines - Minto, Bellekeno and Wolverine - and the respective First Nations whose traditional territories are affected by the mines' operations.

At the Minto copper-gold mine in central Yukon, developer Minto Explorations Ltd. began

working with the Selkirk First Nation at the start of its project and inked a memorandum of understanding with the First Nation and the Yukon government in 2006 that have been formalized since in cooperative agreements that provide numerous socioeconomic benefits to Selkirk, including employment opportunities and a front-row seat in all decisions relation to environmental management and closure of the mine. In 2012, a liaison officer was appointed to facilitate education and training of Selkirk members to fill jobs offered by the mine.

The Minto Mine, located near Pelly Crossing, Yukon, is one of the few mines in Canada that operates on lands where a First Nation government owns both surface and mineral rights.

Since 2008, the Minto mine has paid C$12.6 million in mining royalties, of which 100 percent has been transferred to the Selkirk First Nation. This sum includes C$1,680,398 paid for 2011 production.

Alexco Resource Corp. and the Na-Cho Nyak Dun First Nation completed an agreement in 2010 that builds on an exploration cooperation agreement signed in May 2008. The newer pact further solidified the relationship between Alexco and NND as the Bellekeno silver-lead-zinc mine neared production and set out common understandings, obligations, and opportunities arising from exploration, care and maintenance, district closure activities and mine production.

The Bellekeno mine, located near Keno City and within the Keno Hill Silver District, is historically the second largest silver producer in Canada. Alexco purchased the assets of the previous operator, United Keno Hill Mines Ltd. in 2005.

A key milestone in the revitalization of the Keno Hill Silver District, the agreement positioned Alexco to move forward in all of its current and future activities in the district with certainty, and ensures that NND is well-positioned to maximize benefits that increased activity in its traditional territory will bring.

Covering surface and advanced exploration and environmental activities, care and maintenance, closure activities and mine production, the agreement is a comprehensive tool for facilitating and ensuring the continuation of a good working relationship into the future.

The agreement also ensures that Alexco and NND will work together to facilitate the meaningful participation of NND in environmental regulatory processes concerning the further development of the Keno Hill Silver District.

In October, the Yukon government reported receiving C$351,525 in royalties from Alexco, reflecting Bellekeno's first full year of production. The mine is currently approaching its second anniversary of commercial production.

Yukon Zinc has been active in the southeast Yukon region for more than 10 years and has taken the Wolverine zinc‐silver mine from exploration through development into operation.

In 2005, Yukon Zinc Corp., operator of the Wolverine Mine, entered into a socio-economic participation agreement for the Finlayson area holdings (including Wolverine) with the Ross River Dena Council on behalf of the Kaska bands (Liard First Nation, Dease River First Nation, Daylu Dena Council and Kwadacha First Nation) and their respective members. The agreement provides for Kaska participation in the economic and social aspects of the development and operation of the Wolverine Mine.

Since then Yukon Zinc has actively worked to support building the social, cultural, environmental and economic health of the communities in the regions where it operates.

In addition to a major mine training initiative targeting Kaska members, the company has focused intensively on supporting community programs aims at enriching the lives of Kaska youth and improving the overall health of the communities.

A recipient of the prestigious 2011 Robert E. Leckie award for excellence in environmental stewardship that is awarded by the Yukon government, Yukon Zinc was recognized for "innovation and corporate social responsibility for a (quartz) mining operation." During spring 2012, the company sponsored the 2012 Arctic Winter Games and the Yukon Chamber of Mines Exploration and Discovery Camp during Mining Week.

Both spring events were held in Whitehorse, and offered youth and community members an opportunity to learn about the mining industry by participating in interactive activities.

New agreements

In 2011, the Yukon Chamber of Mines, working with the First Nations of Na-cho Nyak Dun and Tr'ondëk Hwëch'in, developed "a Quick Reference Guide to Effective and Respectful Engagement Practices with Yukon First Nations and Communities," a Yukon-specific guide designed to help mining, exploration and development companies working in the territory establish sound and respectful working relationships with Yukon First Nations and communities when undertaking mineral exploration or development projects or activities.

"Global experience reveals that early, effective engagement with First Nations and communities is good business practice and fundamental to fostering mutual understanding and respect between proponents and our citizens," said First Nation of Na-cho Nyak Dun Chief Simon Mervyn Sr. when the guide was released in August 2011.

"First Nations culture is fundamentally linked to the land and the natural environment, and this guide can assist proponents to acknowledge and respect these values when undertaking projects in the Yukon," said Tr'ondëk Hwëch'in Chief Eddie Taylor.

In the wake of the guide's publication, at least four major agreements have been signed or enhanced.

In July, Golden Predator Corp. and the Tr'ondëk Hwëch'in First Nation reported entering into an Amended and Restated Socio Economic Accord for Golden Predator's flagship Brewery Creek Gold Mine Project east of Dawson City. The 2012 Socio Economic Accord updates an existing Socio Economic Accord for the Brewery Creek Project that the First Nation signed with the previous mine operator in 1996. Brewery Creek Project is a past-producing heap leach gold mining operation that Golden Predators hopes to return to production in late 2013 or early 2014.

Golden Predator and the Tr'ondëk Hwëch'in First Nation said they will continue to build on their effective working relationship, fostering successful social and economic development of THFN and its citizens while ensuring successful environmental screening, licensing and permitting, financing and construction and operation of the Brewery Creek Project.

"After intense negotiations, the Tr'ondëk Hwëch'in are pleased to be forging a beneficial relationship with Golden Predator," said Chief Taylor. "We support their efforts to re-open the Brewery Creek Mine. We believe this mine can operate in an environmentally responsible way, and provide substantial benefits to both the Tr'ondëk Hwëch'in and the community of Dawson. We appreciate the open spirit in which Golden Predator is undertaking this task, and our people look forward to the training, employment and contractual opportunities which will be available."

Key aspects of the agreement also include: the Tr'ondëk Hwëch'in acquiring an equity interest in Golden Predator, and participating in profit-sharing from operations beyond the original mine plan; funding for training and scholarships for TH citizens; and an annual grant to a community legacy project for the broader community of Dawson.

Selwyn pact

Selwyn Resources Ltd. also reported in July that Selwyn Chihong Mining Ltd., the joint venture company formed by Selwyn and Chihong Canada Mining Ltd. to advance the Selwyn zinc-lead project, has entered into an Interim Measures Agreement with Ross River Dena Council and Liard First Nation on behalf of all Kaska communities including Daylu Dena Council, Kwadacha, and Dease River First Nation.

The Selwyn project, which straddles the Northwest Territories border in east-central Yukon, is one of the world's largest undeveloped zinc-lead project with a massive global resource that is still growing.

"Selwyn Chihong is encouraged by this significant step forward in our relationship with the Kaska," said Justin Himmelright, vice president of environment and community affairs for Selwyn. "The Interim Measures Agreement establishes the framework for SCML and the Kaska to work to advance the project through final feasibility, permitting, and into construction. We expect to begin negotiations of a Socio-economic Participation Agreement very soon. The Socio-economic Participation Agreement will guide our relationship for the operations phase of the project."

"This agreement is another significant step in our efforts to participate in the economy of our traditional lands," said Chief Jack Caesar, "By entering this agreement, Selwyn Chihong has demonstrated the level of respect for our people and our lands that we expect from all resource companies operating on our traditional lands. We look forward to working cooperatively with Selwyn Chihong and wish them every success with their continued project activities."

Liard First Nation Chief Liard McMillan said "the Interim Measures Agreement is an important first step in terms of the relationship. It governs how the Kaska will be engaged during the exploration and feasibility discovery phase of the project. We were pleased to be able to work with SCML and all the Kaska to reach this IMA and look forward to completing a Socio Economic Participation Agreement that would define our relationship should SCML decide to advance the project to the next level."

Cooperation for Wellgreen

In August, Prophecy Platinum Corp. and the Kluane First Nation signed a cooperation and benefits agreement to support Prophecy's exploration program and environmental studies for the development of its flagship Wellgreen Project located about 25 kilometers (16 miles) from Burwash Landing, Yukon, near the Alaska-Canada Highway. The Kluane First Nation's traditional territory covering 350 square miles in southwestern Yukon.

The new agreement, which is comprehensive in nature, includes provisions for employment and training opportunities for Kluane's citizens, contracting opportunities for the first nation's businesses and citizens, funding for the meaningful implementation of the agreement, and an equity position in Prophecy Platinum for KFN and its citizens.

Acting reasonably and in good faith, the Kluane First Nation may participate fully and without limitation in all regulatory processes concerning the exploration activities. Other highlights its pact with Prophecy include environmental protection through the cooperative design and implementation of environmental management and monitoring programs, and a framework and mutual commitment to develop a Comprehensive Cooperation and Benefits Agreement for the eventual development and operation of a mine.

Prophecy is working to bring platinum-rich Wellgreen, one of the world's largest nickel-sulphide deposits, into production by 2016.

"The Kluane First Nation is pleased to be forging a close relationship with Prophecy. We appreciate the open dialogue and proactive approach to engagement with KFN that Prophecy has initiated and continued to demonstrate," said Chief Mathieya Alatini when the agreement was announced Aug. 2. "Having worked with Prophecy for the past many months, our people look forward to contributing substantially to Prophecy's exploration activities and to strengthening our relationship toward the development of a mine at Wellgreen."

Historic pact

Victoria Gold Corp and the First Nation of Na-Cho Nyak Dun in September reported signing an access and Exploration Agreement on NND Category B Lands adjacent to Victoria's Dublin Gulch Project, nearly doubling Victoria's land package within NND traditional territory in Yukon.

The Category B Lands Access and Exploration Agreement applies to the 1,443 claims

That Victoria staked on two parcels of NND Category B Land adjacent to and to the west and south of the company's existing mineral-rich Dublin Gulch Property. This ground is highly prospective, covers an area of 290 square kilometers (112 square miles) and has not seen any exploration activity in more than 20 years.

The key points of the Category B Lands Access and Exploration Agreement include providing certainty for ongoing exploration; affording the Na-Cho Nyak Dun with employment and economic opportunities, while respecting and promoting NND's desired environmental protection objectives; establishing a process for ongoing communication between Victoria and the first nation so that both parties can identify and pursue contracting and partnering opportunities; and providing financial support.

"The signing of this agreement is a historic moment in the evolution of our relationship with mining resource companies. It is the first time First Nation Land has been explored with the prior consent of the Nation," said NND Chief Simon Mervyn. "We applaud Victoria for their commitment to working with our Nation and in particular for respecting the land and environmental values put forward within our traditional territory."

In October 2011, Victoria and the Na-Cho Nyak Dun completed a comprehensive benefits agreement governing Victoria's original Dublin Gulch property, which hosts the Eagle Gold Deposit and covers about 420 square kilometers (162 square miles). Victoria is working toward startup of a new gold mine at the Eagle deposit in 2014.

Victoria and NND also entered into a letter of intent last fall that provided the first nation's consent to Victoria to stake the Category B Lands that border Dublin Gulch to the west and south. The access and exploration agreement inked in September is the definitive agreement to conduct exploration on these Category B Lands.

Resource royalty sharing

Capping this spate of advancements, the Yukon government Oct. 29 said it has agreed to the terms of a new resource royalty sharing agreement with Yukon's 11 self-governing First Nations that would provide the First Nation governments with increased royalties from mining and oil and gas activity in the territory.

"This agreement is intended to ensure that all Yukon Self-Governing First Nation governments benefit from resource development in the Yukon, whether a producing mine or future resource development is on First Nation Settlement Land or not," said Council of Yukon First Nations Grand Chief Ruth Massie.

The agreement is based on a memorandum of understanding signed between Yukon Self-Governing First Nations and the Yukon government in May.

"This important decision between the Yukon government and self-governing First

Nations demonstrates the government's commitment to ensuring all Yukoners benefit from resource development in the territory," Yukon Premier Darrell Pasloski said in announcing the agreement.

The new arrangement, which will be formally signed during the Yukon Geoscience Forum Nov. 18-21, could see Yukon's Self-Governing First Nations share up to an additional C$4.7 million in royalties each year.