The Ontario government is paying God's Lake Resources $3.5 million to give up its mining claims and leases on a controversial exploration program in northwestern Ontario.
The area surrounding the First Nation community of Kitchenuhmaykoosib Inninnuwug (KI) has been a hot spot for confrontation between local residents, the province and the mining industry.
The junior miner was exploring for gold in a disputed area 83 kilometres north of the remote village of 1,300.
In early March, the province withdrew 28,181 square kilometres of land from exploration, an area roughly the size of Prince Edward Island, as a way to address the impasse and avert any future industry conflicts. But God's Lake's claims were left untouched.
The community insists the company is drilling on land it considers part of its sacred territorial homeland.
But the unilateral move only seemed to only ratchet up tensions with First Nation leaders threatening a confrontation at the drill site and the company seeking private security.
This time, the God's Lake property is being withdrawn from staking.
In a March 29 release, the Ministry of Northern Development and Mines said it was the government's goal to see the community and company work together “to build a positive relationship. This settlement responds to KI's concerns, while allowing (God's Lake) to move forward with mineral exploration in other part of the province in the future.”
The province's move is reminiscent of its $5 million pay-out to junior miner Platinex to relinquish its Big Trout Lake platinum in December 2009. That controversy resulted in six community members going to jail for blocking exploration and the company launching a multi-million dollar lawsuit against the provincial government.