First Nations create mineral explorer

The Dene First Nations of Northwest Territories has created what is likely Canada's first 100 percent aboriginal-owned exploration and mining company.

Named DemCo Limited Partnership, the startup will celebrate one year in business in October, and is already making its mark in the industry.

DemCo's mission is to enable the Dene to become owners of hardrock mines operating on their own lands. The new company is owned by Denendeh Investments Limited Partnership, which has a membership comprised of First Nations from the five Dene regions of the NWT.

In 2013, it created DemCo and bought up brownfield mineral properties in the Camsell River mining area near Great Bear Lake, NT, with the intent of developing and operating a metal mine.

Aboriginal people in the NWT exert influence on exploration and development activity on more than 350,000 square kilometers of aboriginal- owned lands (surface & subsurface) through settled agreements and ongoing negotiations. Counting Nunavut's lands and NWT traditional territories, aboriginal ownership in the Far North, collectively, spans about 3 million square kilometers (1.16 million square miles), or an area roughly twice the size of Alaska.

Dene territory in Northwest Territories covers an area about one-quarter the size of British Columbia.

Denendeh officials say access to this land mass will give the company a competitive edge that few mining exploration companies are in a position to obtain by virtue of the fact that DemCo is a 100-percent northern Dene-owned company.

Mining is a major economic driver in Canada and the Northwest Territories, spurred by demand for metals overseas. Mining exploration and development has been occurring in the Northwest Territories since the Gold Rush of 1898.

"But the Dene have not really fully participated in the way that they wanted to," Denendeh Investments President and CEO Darrell Beaulieu told a reporter for CIM Magazine last spring.

To create economic self-sufficiency and hope for the future, the Dene plan to explore, find, develop and benefit directly from resources on their lands. Resource development would be a vehicle to gain knowledge, capacity and expertise in geology and the mineral sector thus diversifying the NWT and community economies," the company said in a statement on its website.

More than 60 Aboriginal businesses have sprung up within the past decade to service the NWT's mining industry. Existing mines have a finite life-cycle so more producing mines are needed to sustain these Aboriginal service companies.

Training initiatives delivered through the NWT Mine Training Society have trained hundreds of northern people to work in the industry and develop the potential to enter into senior management and entrepreneurial initiatives on their own.

Meanwhile, regulatory uncertainty due to settled agreements, treaty implementation and governance in the NWT has slowed exploration investment.

Dene participation will inspire investor confidence, improve the understanding of the industry and help develop a responsible legislative, policy and regulatory framework that can encourage investment, thus stimulating the economy of the NWT. In terms of education of the industry, it would help to ensure that Aboriginal communities understand the positive and negative impacts of mining and exploration.

"We live here, we're based here, we operate here," Beaulieu explained, "whereas people in the past have seen mining companies come from other jurisdictions not really knowing the lay of the land."

New era of wealth creation

The limited partnership would release a new era of wealth creation that would not only benefit the Dene, their partners, and the NWT, but all of Canada, Denendeh Investments said in an October 2013 statement announcing the creation of DemCo.

The partnership would utilize northern and aboriginal business and labor. This would apply in the respective Dene regions where work is performed; if the supply and service is available.

DemCo will create value from a pan-territorial, regional and community perspective by building equity in northern resource development, business development, employment that will induce long term activity, capacity building and benefits rather than immediate and short-term fixes.

The process of acquiring land use permits and licenses has long been an issue for resource developers wanting to invest, develop and operate in the North. Permitting is an issue for which DemCo must develop a strategy. Partnerships with governments, other mining and exploration companies and communities will ensure permitting systems that will work for us and others. As it is the Crown's duty to consult, we must meet with them to develop a partnership in the permitting process that is cost effective and efficient due to the short exploration and construction seasons in the north.

Community consultation methods must be clearly formatted in terms of creating the interest for communities to work with us (communities beneficial interest in our project), a clear meeting format, identifying key Aboriginal resource people and leaders that can influence a positive outcome for the project and to ensure that a permitting process is in place that we can all agree to for project development.

"Timing for creation of DemCo is ideal. The current capital markets are at a low. The credit squeeze has made it almost impossible for many junior mining companies to raise money. As a result, the juniors that are running low on cash have simply stopped doing anything and the ones with cash are being very prudent with it.

Currently, 50 percent of the junior mining companies that are listed have less than C$500,000 in cash. That is less than an average year of operating costs. Share prices are plummeting as investors have no confidence that the juniors will be able to develop their projects.

"It would be foolish not to acknowledge the impact of the global financial crisis on the mining industry but it also goes to say that markets will come about, senior mining companies will search out and find good deals to snap up juniors who will not survive and more mergers and acquisitions will be the story of the future," according to Denendeh Investments

"The silver lining to present and initiate a Denendeh exploration and mining company at this time may help create momentum for fundamental change in First Nation participation in resources development in the Northwest Territories and Canada," company officials said.

"So the timing to pick up properties and/or junior mining companies is upon us. How long this window will remain open is unknown," they added.

Past-producer in portfolio

DemCo has three separate initiatives, the Terra silver/IOCG/remediation project, a diamond prospect portfolio and a gold property.

The Terra project is a multi-phase venture, and all aspects of it are very attractive. One phase involves mining high-grade silver, another, IOCG (Iron-Oxide-copper-gold) targets and the third, environmental reclamation.

On the diamond front, DemCo has incorporated "Dene Diamonds Inc." as a wholly owned DemCo subsidiary in the NWT and is progressing to have the trade name registered Canada-wide.

DemCo also has finalized the acquisition of a number of highly prospective diamond claims. These claims include seven known kimberlite pipes once owned by De Beers but relinquished once the De Beers exploration division decided to leave the Northwest Territories.

DemCo said it recently staked a mineral showing known as the Bugow.

"This claim is highly prospective, and it is well known that it has very good gold values. The Bugow is directly north of Behchoko and northwest of Yellowknife. The property has had multiple owners since the 1940s and drilling results to date indicates a current resource of about 233,000 ounces of gold.

DemCo has acquired 12 mineral claims covering 9,199 hectares (22,731.18 acres) at the historic Terra Mine site on the Camsell River at Conjuror Bay on Great Bear Lake from Cooper Minerals Inc. that contains four former producing mines.

The new company also has negotiated the purchase of two other mineral leases and one claim for control of 100 percent 9,830 hectares (24,290.11 acres) at the Terra Mine.

There also is potential for other minerals in the total assembly of leases, which includes the former Smallwood, Northrim, and Norex mines, according to Beaulieu. The claimholder of Norex reportedly was a prospector, geologist and mining engineer who optioned the property to DemCo and asked to serve as a director of the company.

DemCo is now focused on compiling existing exploration data and using that information to create three-dimensional models.

In June, the fledgling company won a grant a mining incentive grant of C$65,000 to explore the Camsell River area from the Government of Northwest Territories inaugural mining incentive program.

Denendeh Investments also has raised close to the C$1 million needed to carry the project through this phase. After the models are complete,

DemCo plans to hit the mining conventions in Yellowknife, Vancouver, and Toronto and begin in earnest to seek out a joint venture partner, whether from Canada or overseas.

More work ahead

As projects develop in various Dene regions, DemCo said it wishes to establish a working relationship and build an equity partnership base to include regional and/or community businesses.

Create partnerships with the regional entities (either through their respective governing bodies or development corporations), to explore and development the mineral potential in the regions.

Prospector, staking and exploration surveying (E.M., Mag and VLF) training can be initiated to ensure knowledge and experience in the exploration stages, the company added.