Junior miner edges closer to court fight: Northern Superior case puts Mining Act, duty to consult under the microscope.

• Author: Ross, Ian
• Position: Mining

Barring a settlement agreement, a Sudbury junior miner appears headed to court to lock horns with the provincial government this fall in a case that might have ramifications on the Ontario Mining Act.

An Oct. 5 trial start date has been booked for an Ontario Superior Court judge in Toronto to hear arguments surrounding a compensation claim by Northern Superior Resources resulting from its abandonment of its gold properties after a series of disputes with Sachigo Lake First Nation.

The outcome of the case could be precedent-setting and could impact the government's handsoff practice of leaving it up to the resource industry and First Nations to work out exploration and benefit agreements, and resolve any differences they might have.

Company president Tom Morris expressed confidence in a favourable outcome, but was still hoping to avoid court.

"We would like to settle before going to court. We feel it's unnecessary to go to trial; however, we are more than prepared to see this through to the end and have board approval to do that."

The company filed a $110-million statement of claim in 2013 to recover the $15 million it spent on exploration since 2005, plus the estimated future value of three properties as they worked toward a major gold discovery near the Manitoba border.

But Morris said they've made overtures to the province that they're willing to settle for $25 million.

"I don't think anybody in their right mind expects to be compensated for $110 million. The reality is we do want our money back."

Nothing was resolved during the pre-trial phase last winter that included court-ordered mediation. They were to meet with the trial judge in late May, prior to the start of proceedings.

The case has raised questions in legal circles on the Ontario government's practice of delegating the duty to consult with First Nations over to industry, leaving exploration companies to negotiate access to their claims that are on both Crown land and Aboriginal traditional territory.

New regulations in Ontario's Mining Act say early development work can only proceed after industry consults with affected First Nations, which Northern Superior contends it had performed over the years when things began to sour.

The company claims there was a series of disagreements with the band, including a demand by the First Nation to hand over close to a quarter of its exploration budget for the 2012 drill season, referring to it as an "administration fee."

In court documents...