The city is facing a lawsuit over the document that guides all planning throughout Whitehorse.

Lobo Del Norte Ltd. filed the lawsuit this week in Yukon Supreme Court.

It claims the city's most recent version of the Official Community Plan (OCP), adopted in 2010, is preventing it from working its claims at the Keewenaw and Gem deposits in the Mary Lake area because the Wolf Creek Park has been designated in the area under the plan.

As Lobo president Barry Ernewein said in an interview this morning, there have also been other parties interested in purchasing, or having an option agreement, on the claims.

When they review the OCP, however, they conclude that industrial work on the site is not allowed, and they are no longer interested.

"We're still prepared to negotiate with them,” Ernewein said.

Efforts to work with the city have gotten little or no response, he said.

No effort was made to contact Lobo when the city was drafting the OCP in 2010, despite its assertions that "stakeholders” were consulted, Ernewein said.

Lobo was never consulted by the city even though the municipality knew or should have known of the claims, the lawsuit states.

It goes on to point out that in 1997, a report and map was produced by a team of eight geoscientists (including some employed by the territory's Yukon Geological Survey) showing mineral potential in the city.

The area of the Lobo claims was ranked the highest as "an established resource”.

The claims, it was pointed out both in the lawsuit and by Ernewein this morning, go back long before they were ever within the city's boundaries, having been staked in the 1960s. They have been kept in good standing.

Lobo bought them in 1998 from Hudson Bay Mining and Smelting.

The Keewenaw deposit was partially mined as late as 1971.

The Gem deposit was stripped in preparation for mining. All exploration development work was completed before the area was incorporated into the city boundaries in the 1980s, it's stated in the lawsuit.

It was in a letter dated Oct. 30, 2008 that Energy, Mines and Resources Minister Brad Cathers noted the continued economic potential of the Whitehorse Copper Belt area was well-known and must be considered in all discussions around long-term planning, court documents read.

Cathers also stated the Yukon government and city were committed to continued dialogue with mineral rights holders when considering future land uses.

The lawsuit goes on to argue that neither the city nor the government consulted Lobo about the OCP before it was passed – despite assertions that meetings with stakeholders had been held.

The company never knew or was informed of the meetings on the OCP, Ernewein said.

"They never contacted us about it,” he said, arguing both the city and territory are being "disingenuous.

"We are stakeholders; probably the largest stakeholders in the area,” he said.

Both the city and territory have benefited from the claims in the form of taxes, fees and so on paid to the two governments over the years, he pointed out.

They have also benefited from the economic stimulus provided to the community when work's been done on the sites.

"The city's got a short memory,” Ernewein said. During the 1960s and 1970s, he argued, mining was the only thing keeping the city and territory going.

The city, the lawsuit claims, owes compensation for the "expropriation” or taking or "injurious affliction” of Lobo's interests in the claims.

Lobo is, therefore, claiming:

• A declaration that its rights to develop and extract minerals on the claims have been wrongly expropriated, or otherwise taken or injuriously affected;

• Loss of the mineral resources valued at $87 million. Ernewein noted this is the gross estimated value of the claims and the net value would be less;

• Damages;

• Loss of opportunity and loss of profit;

• Cost of consultant reports that have been done;

• Annual fees paid under the Quartz Mining Act;

• Pre- and post-judgement;

• Costs; and

• Anything further the court deems just.

Ernewein said Lobo had intended to go ahead with mining in the area before the city came out with its OCP, which doesn't allow for industrial use there because of its park status.

Questioned whether the territory's Quartz Mining Act would override the city's OCP and therefor allow mining in the area, Ernewein replied, "it should.”

However, he noted, the issue has never been argued in court. This would bring the question to a judge for determination.

Ernewein continued to reiterate his position that his company is willing to work with the city to come to a solution.

At one point, he went to city hall personally to let officials know he would.

Ernewein also provided city officials with a study about the claims.

He noted he welcomes the city to do its own study and disprove his information on the condition the information is also given to him.

City spokesman Amos Westrop said the city will not comment on the case, as it's before the courts.

A case management conference is scheduled for June 18.