Lost opportunity: gold junior wants government settlement after First Nation conflict.

• Author: Ross, Ian

A Sudbury-based junior miner isn't ruling out a settlement agreement with the province to relinquish claims on its dormant gold properties in northwestern Ontario and resolve a past dispute involving a First Nation community.

Northern Superior Resources is suing the Ontario government for $110 million for failing to consult with the Sachigo Lake First Nation after multiple disagreements with the band that caused the company to abandon exploration on its mining claims in late 2011.

"I have no ambition to go to court," said company president and CEO Tom Morris. "It serves no purpose to any party But we do need to get this resolved."

The gold exploration outfit claims the company was hurt by the actions of the Ontario government and wants compensation for the $15 million invested in exploration since 2005 as well as the estimated value of its three gold properties located near the Manitoba border.

Northern Superior filed a statement of claim with the Ontario Superior Court, Oct. 25.

The company accuses the province of failing to protect its interests in a remote area of Ontario that's become a hotbed for First Nation-industry conflict in recent years.

The lawsuit stems from a series of incidents in which the company alleges Sachigo Lake made unreasonable monetary demands. and even briefly detained company employees and equipment, as the miner moved toward a major gold discovery about 740 kilometres northwest of Thunder Bay.

A once-smooth working relationship with Sachigo quickly soured when the company claims the band demanded a 24 per cent "administration fee." The fee was to be pulled from the company's upcoming exploration budget on its Rapson Bay property, believed to be in the $10-million range.

Northern Superior refused to pay and halted exploration.

A Ministry of Northern Development and Mines spokesperson said the province has prepared a statement of defence which would be delivered to the company shortly.

In early January Morris said his lawyers had not received it but were expecting it by month's end.

The company claims it lost out on a golden opportunity in 2011 when exploration financing was easier to obtain and talks were underway with potential options partners.

After Northern Superior halted its exploration program, the Ontario government imposed a huge 23,000-square-kilometre exclusion zone close to their claims in early 2012 that banned mining and exploration in the area. It was a response designed to ease local tensions that...