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In the Courts: First Nation takes B.C. government to court over Brucejack mine

February 16, 2023

Petition stems from halted negotiations amid acquisition deal

The B.C. Supreme Court in Vancouver | Rob Kruyt, BIV

NationTalk: BIV – The Tsetsaut/Skii km Lax Ha Nation is taking the province to court claiming the government failed in its duty to consult with the First Nation regarding a mining company’s acquisition of a mine in its territory, and has failed to work with the mine’s new owners and the nation to continue negotiations of a benefit-sharing agreement.

Newcrest Mining Ltd. (TSX:NCM) announced in late 2021 its interest in acquiring Pretium Resources Inc. (TSX, NYSE:PVG) and the Brucejack gold mine.  The First Nation, also referred to as the TSKLH Nation, had been in negotiations with Pretium regarding a benefit-sharing agreement.

But Pretium sent a notice shortly after Newcrest announced its interest in acquiring the company and the mine, saying it would be halting those negotiations pending the outcome of the acquisition, according to the TSKLH court filings.

After Pretium halted the negotiations, TSKLH wrote to the province’s chief executive assessment officer (CEAO), the office responsible for environmental assessments, along with the minister of Indigenous relations and reconciliation, the attorney general and the minister of energy, mines and low-carbon innovation, to “highlight the [provincial] regulatory authority over transfers of interest in the Brucejack mine project.”

Specifically, the nation informed the province of its view that the duty to consult with First Nations was triggered by the acquisition proposal. In its court filings, the TSKLH Nation argued the duty to consult was triggered because a transfer of interest in the mining operations could result in “potential adverse impacts” from having a new entity controlling the mine’s operations and its consultation with the nation.

“The TSKLH Nation has had to develop a relationship with Newcrest as the new controlling entity of the Brucejack mine project,” the court petition from TSKLH notes, specifically referring to the new negotiations it now has to undergo with the new mine owners. “Newcrest’s acquisition of Pretium disrupted the TSKLH Nation’s prior ongoing negotiations with Pretium to reach an agreement to provide economic and other benefits relating to the Brucejack mine project.”

However the province returned those letters in January 2022 to disagree with that assessment. And in March 2022, the company announced that it had completed the acquisition.

In its announcement, Newcrest said it expected “synergy benefits” of $15 million to $20 million per year from the acquisition and called Brucejack “one of the highest-grade operating gold mines in the world.” The company also said it saw opportunities to increase the production rate from 3,800 tonnes per day to 4,500 to 5,000 tonnes per day. The mine is expected to produce 18.5 million tonnes of mineral over its 14-year lifespan, according to the TSKLH Nation petition to the court.

The TSKLH court filings also state Newcrest informed the First Nation in March 2022 that it had committed to the federal Ministry of Innovation, Science and Industry to continue the negotiations over a benefit-sharing agreement.

The court petition notes that in June 2022 TSKLH provided Newcrest with an updated copy of the province’s ethnohistoric report, provided to the nation by the province in December 2021. Newcrest responded that it was awaiting guidance from the province before relying on the updated ethnohistoric report.

“Since June 2022, both the TSKLH Nation and Newcrest have repeatedly urged the province to engage constructively to support negotiations between the TSKLH Nation and Newcrest, notably by providing guidance to Newcrest of the updated ethnohistoric report relating to the Awiijii territory,” states the petition. (Awiijii refers to a portion of TSKLHterritory, which includes the Brucejack mine.)

“Since June 2022, The TSKLH Nation has repeatedly offered to meet jointly with the province and Newcrest so that all three parties may review the updated ethnohistoric report together. Newcrest has expressed its readiness to participate in such a meeting, but the province has yet to express any clear timeline for provincial engagement.”

The First Nation argued the transfer of the mine to Newcrest, and specifically the disruption to the benefit-sharing negotiations, has directly harmed its economic interests and constituted a breach of its obligations to TSKLH. It said the province’s failure to come to the table with TSKLH and Newcrest has only deepened that impact.

This isn’t the nation’s first lawsuit over the Brucejack mine. In 2019, the TSKLH Nation sued the province after it was excluded from benefit-sharing agreements with the Tahltan and Nisga’a nations, which receive up to $7 million and up to $8 million annually respectively.

The provincial government had not filed a response to the petition as of press deadline.