Junior miner, province square off: Northern Superior compensation case could be precedent-setting.

• Author: Ross, Ian
• Position: Mining

Barring a last-minute settlement, a Sudbury junior mining company expects to be in a Toronto courtroom in early October to take on the Ontario government in a potential landmark case that could prompt revisions to Ontario's Mining Act concerning First Nation consultation.

"I'd rather be talking about exploration," lamented Tom Morris, president and CEO of Northern Superior Resources, who was making preparations for a four-week trial in an Ontario Superior Court starting Oct. 5.

Northern Superior is seeking compensation from the province for failing to protect its interests in a gold exploration play in northwestern Ontario that the company was forced to abandon its mining claims after a series of disputes with a First Nation community in 2011.

Close to two years ago, Northern Superior filed a $110-million lawsuit in late 2013 to recover the $15 million it spent on exploration since 2006, plus the estimated future value of the three properties on Crown land as they worked toward a major gold discovery near the Manitoba border.

The company has since dropped that figure to $25 million in an effort to reach a settlement with the province through mediation, but to no avail.

The two parties' legal teams were scheduled to meet for one final time during a pre-trial conference on Sept. 17.

"It's been a long process and we're relieved we're at a point where decisions are going to start being made," said Morris. "We're feeling very confident going in and I'm curious to see how it's going to unfold."

In one instance outlined in court documents, the company claims Sachigo Lake First Nation demanded close to a quarter of its exploration budget--about $1.2 million --for its 2012 drill campaign, calling it an "administration fee."

When the company refused to give in, the First Nation served them with an "eviction" notice, forcing them to stop exploration work and leave the area.

The company blames the Ontario government for its alleged inaction in carrying out its duty to consult with First Nations.

The province responded that it's not liable for any damages incurred by the company, adding that the decision to stop exploration was theirs alone. The government further contends it's not responsible for any demands made on the...