Published on: 2/5/2013 9:48:38 AM Print | Font Sizes:  Normal Text Large Text

Junior gold miner suing Ontario government

By: Northern Ontario Business staff

Solid Gold Resources is suing the Ontario government for $100 million in damages stemming from a consultation flare-up involving the province and a northeastern Ontario First Nation community over an exploration project near Lake Abitibi.

The Toronto junior miner announced Jan. 30 that an Ontario Divisional Court had declined to hear the company's appeal against an injunction granted to the Wahgoshig First Nation in January 2012.

The company had been embroiled in a year-long legal fight, led by former company president Darryl Stretch, to resume exploration drilling on its Lake Abitibi gold property.

In a press release, Solid Gold stated had previously obtained leave to appeal from Justice Wilton-Siegal who questioned the “correctness of the injunction decision.”

At a recent hearing, the company said at “Ontario's urging, the Divisional Court found that the appeal was moot due to the new legislative regime under the Mining Act.”

New Mining Act regulations, which go in effect April 1, downloads the responsibility to consult with First Nations and sets a framework for companies to submit exploration plans in order to receive permits.

Solid Gold now said it is initiating legal action against the Ontario government claiming damages suffered from “lost opportunity costs” arising from the Crown's “negligent misrepresentations and other misconduct” concerning the company's Legacy gold project.

Solid Gold began drilling on Wahgoshig First Nation's territorial land in 2011, about a kilometre from the community, located about 45 kilometres east of Matheson. Chief David Babin said the company never informed the First Nation about its plans.

Early last year, an Ontario Superior Court upheld an injunction by Wahgoshig, ruling that the company did not make an effort to consult with the community despite government requests to do so. The company was appealing the decision with the Divisional Court of Ontario.

An earlier judge's decision to grant Solid Gold's motion for leave to appeal stated, “I see no basis in the facts of this case for an imposition of a duty to consult on Solid Gold. If the Crown wishes to delegate operational aspects of its duty, it must establish a legislative or regulatory scheme. The Mining Act does not presently contain such a scheme.”

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