Whitehorse Daily Star

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SETTLING INTERESTS – The Yukon government needs to resolve the mineral claims in the Peel River watershed, says a company executive.

Settling Peel claims called urgent priority

The Yukon government needs to take a leading role in settling the interests of mining companies with mineral claims in the Peel River watershed, says a company executive.

By Chuck Tobin on March 15, 2019

The Yukon government needs to take a leading role in settling the interests of mining companies with mineral claims in the Peel River watershed, says a company executive.

Jason Weber of Alianza Minerals told the Star this week his company is looking for guidance from the Yukon with regard to addressing the impact the Peel land use plan will have on their mineral claims in the southeast corner of the watershed.

The prohibition against roads and railways contained in the plan will reduce the value of Alianza’s claims to zero, practically speaking, the company president and CEO said from his office in Vancouver.

He says the Goz Creek zinc claims date back to the 1970s, and most recently, approximately $1 million was spent drilling the claims back in 2008 by a company that morphed into Alianza.

Those claims are an asset held by the company, held by the shareholders who’ve invested in the company, he explains.

Weber says the $1 million spent on drilling in 2008 is $1 million put up by the company; it’s $1 million of real money put up by the shareholders.

With the land use plan rendering the claims worthless, he asks, what’s the company to do?

Weber insists there is no question compensation is owed.

He says the land use plan is on the verge of being finalized, but there’s been no discussion about compensation for companies holding legal rights to mineral claims through the 68,042 square kilometres that make up the watershed.

Alianza is not looking for a fight, and is not looking to burn bridges, Weber says.

The company has other promising projects in the Yukon that involve positive relationships working with communities and First Nations, he notes. It doesn’t want to do anything to jeopardize those projects or relationships.

Weber acknowledges there is always court action if compensation is not addressed. It’s not his preference, not at all, though he knows of discussions regarding class action lawsuits.

The Star has spoken to another company which has discussed the possibility of a class action lawsuit, but which is choosing not to go public at this point.

Weber says the government needs to provide leadership and guidance in addressing the issue.

“I would be upset if this was a closed case and we never heard anything from within government to try and find a solution to compensate us for what has happened,” he says. “In an ideal world, we are looking for government to work out a solution that works for everybody.”

The government can show leadership that would be a real positive for the business community, he says. The Yukon is seen as a great place to work with the potential to find and develop world-class mineral deposits, he adds.

Leaving the issue of compensation for claims in the Peel unresolved, to fester away, he says, could change that perception. And when perceptions in the investment community change, they change, he says. (See a response from Energy, Mines and Resources Minister Ranj Pillai below.)

After a lengthy court battle over the Peel Land Use Plan, the Supreme Court of Canada ruled in December 2017 the plan is to remain largely as it was recommended in 2011 by the Peel planning commission.

The previous Yukon Party government threw out the plan recommended by the commission and substituted its own, prompting a lengthy court battle against First Nations and conservation groups. The government lost.

The plan calls for 80 per cent wilderness protection over the Peel watershed, with almost no allowance for surface access by road or rail.

Following the Supreme Court of Canada decision, the government and First Nations conducted the final round of community consultations on the plan last fall. It’s expected to be finalized this year.

Regional land use planning is provided for in the Yukon’s aboriginal land claim agreements. The Peel planning exercise began with the appointment of a six-member commission in 2004.

The commission went public with options in January 2009. The division between industry and the lobby for wilderness protection being called for by First Nations was apparent immediately.

When the planning commission began its research to come up with planning options, there were 530 mineral claims and 525 iron and mica leases registered in the Peel, according to records.

Four years later, in 2008, the number of minerals claims in the Peel had risen by almost 11,000, up to 11,425. The iron and mica leases dating back to the 1960s, leases owned by Chevron Canada, remained at 525.

Today, there are 8,380 mineral claims in the Peel, including 1,835 owned by Newmont Mining Corp. of Canada, a subsidiary of U.S.-based Newmont Mining, one of the largest gold producers in the world.

Some on the side of wilderness protection for Peel suggested back then that such a sharp increase in the number of claims staked from 2004 to 2008 was partly due to companies thumbing their nose at the land use planning process – staking nuisance claims.

Weber doesn’t buy it. If there were, it was a very irresponsible use of their shareholders’ money, he says.

Commodity prices started to turn in the early 2000s, Weber recalls, creating a greater availability for exploration money from the investment markets.

And when that happens, companies like to focus on promising targets to expand their asset base, he says. That’s exactly what happened with the $1-million investment into drilling the Goz Creek claims.

Weber says Alianza is a company focused on proving up an ore body to the point where it attacks the interest of larger mining companies looking to buy the project.

The access restrictions in the Peel plan have removed any chance of selling the Goz claims, he says.

Whitehorse prospector Bernie Kreft spent about $70,000 staking 142 claims in the Peel beginning initially in 2003, with a focus on copper, cobalt and rare earth minerals. He staked more claims in 2004 and even more in 2007 because of good results.

He later entered into a joint-venture partnership with Copper Ridge, a junior exploration company that spent $600,000 doing additional survey work of the claims, including some diamond drilling.

The potential for a viable deposit was substantial, he suggests, lamenting how all that has been erased by turning the Peel into a park.

Kreft says there are a handful of major multi-nationals like Newmont that have claims in the Peel and have spent large amounts of money in there. It speaks to how promising the region was to provide world-class mineral resources, he says.

Kreft says people have to accept they just can’t keep removing these resources from being available. His claims had the potential to supply the growing electric vehicle industry, because it’s copper, cobalt and rare earth minerals the industry needs.

So instead of having the development of resources in one of the most stable countries with the stringent rules to ensure minimum impact on the environment, the industry will have to look elsewhere – perhaps in countries not so stable, he says.

“People need to realize we need resources and jobs or we are going to become a Third World country.”

Since the Peel plan has not yet been officially finalized, Kreft says, he hasn’t focused a whole lot on the matter of compensation.

But he says he’s in the same boat with the others whose claims will officially lose their value when the land use plan becomes final.

He emphasizes the $70,000 he spent to stake the 142 claims came out of his pocket. And then there’s the $600,000 Copper Ridge spent on additional exploration, he says.

“Everybody has to get some sort of restitution.”

Samson Hartland, the executive director of the Yukon Chamber of Mines, said in a recent interview that compensation for companies with mineral claims in the Peel is the big elephant in the room that nobody wants to talk about.

As the finalization of the Peel plan draws near, there a couple of things Yukoners need to address, Hartland says, compensation being one of them. The other is the withdrawal of land available for mineral exploration, he says.

With the completion of the Peel, Hartland points out, 52 per cent of the Yukon will be off-limits for mineral exploration, with several more regional land use plans to go.

Comments (6)

Up 15 Down 13

Captain Obvious on Mar 18, 2019 at 10:00 pm

Simple, it's a protected area. Get out before you are charged with trespassing.

Up 36 Down 1

Atom on Mar 18, 2019 at 12:43 pm

I agree with compensating pre planning claims but not anything staked after...just games those.
I do believe anyone deriving revenue from tourism in the area, anyone, should have to pay for that privilege. There are impacts from continual trips and given the exclusive use it should require a substantial user pay fee. Tourism/Outfitting in the entire Yukon needs a fee schedule. They have been exploiting for free for too long.

Up 16 Down 21

BnR on Mar 17, 2019 at 3:38 pm

“With the land use plan rendering the claims worthless, he asks, what’s the company to do?
Weber insists there is no question compensation is owed.”
Unless he knows something we don’t, where does he get the idea that any mine projects viability and approval is a foregone conclusion?
YESAB isn’t (theoretically) a rubber stamp process.
I’m pretty tired of mining companies expecting that they MUST be allowed to do whatever they want.

Up 27 Down 23

Gillian on Mar 17, 2019 at 6:04 am

Mining companies gamble on projects all the time. More lose than win. I know because my first career was as an exploration geologist. Get over it and move on to the next project.
If you are a company that invested during a time when land rights were not fully settled then more fool you.

The idea that Canada will turn into a third world country is ridiculous! And it is likely there will be more jobs related to tourism than mining, and a lot less environmental impact.

Up 34 Down 22

Joe on Mar 15, 2019 at 6:31 pm

It's mining claims, it's a gamble, these ones didn't work out, your loss, not mine

Up 31 Down 19

gambling in the Peel on Mar 15, 2019 at 4:45 pm

Mining stocks often become worthless. It's like betting on the horses for the most part. “Everybody has to get some sort of restitution.” - Why? Because you bet that you'd be able to mine in an area that was already under review? You laid your bet and you lost, like so many do in mining stocks (including myself).

I do agree that claims dating back to before the review process began should be compensated to some extent for the work done prior to the review beginning, or even up to two years after it began. I blame the irresponsible Yukon Party for not putting in a moratorium after the review began, but still do not think that people who staked new claims after the review began deserve one cent. They were playing games and they knew the process was under way.

I hope this doesn't turn into another 'rusty pipeline for 4 billion dollars'. Be fair, I agree with that, but being fair also includes recognizing that staking a claim is only the first step and nothing along the way guarantees your right to start digging.

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