The Tr’ondek Hwech’in will soon own part of a mining company working in its traditional territory.
Along with training, scholarships and preferential treatment in employment, the Dawson City-based First Nation will acquire shares of Golden Predator Corp., which plans to reopen the Brewery Creek mine.
The gold mine, located about 55 kilometres east of the Klondike town, shut down under former owner Viceroy Resources Corporation in 2002 largely because of low gold prices.
That project, which ran for about six years, used a heap-leach method to extract nearly 300,000 ounces of gold.
But substantial gold deposits remain.
Exploration over the past two years by Golden Predator has found more gold at the 200-square-kilometre property than even Viceroy had ever thought, said William Sheriff, chairman and CEO of Golden Predator.
“We’re 100 per cent confident in the project,” he said. “We would expect to see some production as early as 2014.”
Once that production begins, the Tr’ondek Hwech’in will also benefit from the mine’s success, Sheriff added.
The two groups have just finished negotiating a new socio-economic agreement. There was an existing arrangement, signed with Viceroy, but that was forged before the First Nation’s land claim was settled.
“It was somewhat dated,” said Sheriff. “The economics have changed and times have changed. I’ve always maintained the ‘good neighbour policy.’ If the project doesn’t have the economics enough to bring the community along with it as well, and also ensure doing it in a workman-like manner, and also being responsible stewards to the environment when you close, then you shouldn’t be doing the project. It’s about sharing the pie, basically.”
Sheriff didn’t elaborate on the exact details of the deal, except to say that the shares Tr’ondek will hold in the company will be minimal, with no board positions. The royalties it will collect will not be as much as the territory receives and will be nowhere near what the First Nation would have received if the mine was located on the land it selected in its land claim. The scholarships offered will be specifically for higher education in industry-related fields.
When the mine at Brewery Creek reopens, the company expects to employ 100 to 160 people and extract about as much gold, per year, as Viceroy did, for a minimum of 10 years.