BC court fight over treaty vs mineral rights

Junior exploration companies with mineral claims throughout the province have no right to know when the government is secretly negotiating interim treaties that the junior sector fears could result in de facto expropriation without consultation.

That’s what government officials are now openly admitting to the courts, according to the law firm representing a junior mining company that is seeking a judicial review of the provincial government’s decision to hand over Crown land, to which the company holds minerals rights, to a First Nation as part of an interim treaty agreement.

The BC Supreme Court is scheduled this week to begin hearing an application from China Minerals Mining Corp. (TSX-V:CMV) and Cassiar Gold Corp.

The companies argue that the B.C. government essentially expropriated their mineral claims when it secretly handed over land parcels to the Kaska Dena. The companies argue that the Kaska Dena’s own plans for a run-of-river hydroelectric project might have prevented the claims from ever being exploited.

The government disagrees, saying it was merely a transfer of land ownership from the Crown to a First Nation, which does not extinguish subsurface mineral claims.

The government is also arguing that a judicial review would be moot now and should not proceed, because it has since decided to take the land back and offer other land parcels instead, after the project the Kaska Dena wanted to develop became “unfeasible.”

The companies disagree and say an important legal question needs to be resolved with respect to treaty rights trumping mineral rights.

According to Joan Young, the McMillan LLP lawyer representing the two mining companies, the provincial government has admitted in its response to the application for judicial review that it doesn’t think it has any obligation to inform claim holders when it is negotiating a transfer of ownership in interim treaty negotiations.

“The government is now on record as having told our client – and the court in its written submissions – that it feels it owes no duty of procedural fairness and consultation to third parties holding mineral titles when entering into treaty-related agreements,” Young said. “That is an astonishing position which we have never seen stated before.”

In its response, the government maintained that there is no obligation for procedural fairness with respect to mineral claims holders: “The petitioners frame the right sought in terms analogous to the duty of consultation and accommodation owed by the Crown to First Nations, although they are not First Nations and enjoy no constitutional basis to assert procedural fairness rights.”

Young said her clients believe the judicial review should go ahead, despite the fact that the original concern over the two parcels of land may now be a moot point. There is a bigger question for the courts to address, she said.

“We’re arguing, as a legal position, that it’s not moot because some of the remedies we’ve asked [from] the courts are ones that would have ongoing application, such as a declaration that we are entitled to procedural fairness.”

The Association for Mineral Exploration BC (AME BC) is also urging the court to hear the application.

Mineral tenure holders in B.C. have no idea what the government might be negotiating behind closed doors with First Nations. The companies argue they have a right to be informed when the government is negotiating the transfer of title that might have mineral claims attached to it.

AME BC has raised concerns about mineral rights in the Cariboo, where the provincial government is negotiating the transfer of land to the Tsilhqot’in First Nation under the Nenqay Deni Accord.

That accord was developed in response to the 2014 Supreme Court of Canada Williams decision, which granted rights and title to the Tsilhqot’in over some of their traditional territory.

“The AME BC is aware of other instances of mineral tenure holders in British Columbia being impacted by agreements between the province and First Nations,” AME BC president Gavin Dirom stated in an affidavit before the court. “And the AME BC believes that judicial clarity on the relationship between third-party rights and the Crown/First Nation agreements would be important and instructive to the mineral exploration and development industry in British Columbia.”

By Jan. 17, 2017

nbennett@biv.com