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Western Copper CEO denies Glamis connection

A new player in the Yukon mining sector has ties to a $50-million dispute involving the North American Free Trade Agreement.

A new player in the Yukon mining sector has ties to a $50-million dispute involving the North American Free Trade Agreement.

Western Copper Corporation was created in May 2006 when Glamis Gold Ltd., a Canadian Company with corporate offices in Reno, Nevada, bought Western Silver Corporation for $1.2 billion.

Ownership of the Carmacks Copper Project — an undeveloped mining deposit roughly 200 kilometres north of Whitehorse — transferred from Western Silver to the newly created Western Copper.

Former Western Silver executive Dale Corman became CEO of the new company.

“When we sold Western Silver to Glamis, we retained in a brand new company called Western Copper the Carmacks Copper Project, $38 million in cash and an exploration play in Mexico,” Corman said from Western Copper’s Vancouver offices Thursday.

“There is no association with Glamis and Western Copper.”

But Corman also retained a seat on Glamis Gold’s board of directors.

“There is no association, other than the fact that I am on the board with Glamis, just to protect my own interests,” he said.

Glamis Gold, which merged with GoldCorp Inc. on Thursday, is currently seeking $50 million from the United States government through a NAFTA review panel.

According to Glamis Gold’s submission to NAFTA, the company has invested more than $15 million dollars since 1987 in its  Imperial Project in southeastern California, near the borders with Arizona and Mexico, where the company wanted to dig a series of open pit gold mines on 652 hectares of public land.

Glamis Gold estimates that it could mine more than 136 million tonnes of ore containing gold and silver over 19 years.

“Glamis had every reasonable expectation that its planned mining operation would be approved,” reads the company’s submission.

“It was successfully mining at a similar site a mere eight miles away. It was known for its efficient operation and praiseworthy reclamation practices.”

But in September 2001, the outgoing administration of former US president Bill Clinton denied approval of Glamis Gold’s operations at Imperial, based on prospective impacts to “cultural resources” of Native Americans, particularly a band called the Quechen Indians.

And in December 2002, California decided to require Glamis Gold to backfill any open pits it dug on the Imperial site, which would reduce the value of the company’s investment from $49.1 million to zero.

The US government broke two articles of NAFTA, denying Glamis Gold “the minimum standard of treatment under international law” and expropriating the company’s “valued property interests,” reads the submission.

But the US government has the legal right to deny a mine if it would destroy Native American religious uses, said Roger Flynn, a lawyer with the Western Mining Action Project that has opposed development of the Imperial project for more than a decade, including through the NAFTA panel.

“It was determined that the project would be located (in) and destroy the sacred lands of the nearby Indian tribes,” Flynn said Thursday from the legal activism group’s offices in Colorado.

Groundwater contamination was another concern, “but the primary battle has been over the destruction of the Indian religious uses,” he said.

Glamis Gold, which claims to employ 1,300 mining professionals worldwide, was founded as a Canadian company in 1972 in British Columbia and the majority of its shareholders are Canadian, as are the majority of the company’s corporate directors, according to its NAFTA submission.

“As such, Glamis Gold Ltd. is an investor of Canada, a party to NAFTA,” reads the submission.

The fact that Glamis Gold’s offices are in Nevada is not surprising, said Flynn.

“Canadian mining companies are notorious for … setting up a shell corporation in the United States in order to get United States status,” he said, noting that Glamis Gold has “one of its headquarters” in Vancouver.

“Under federal US mining laws, in order to have a mining claim you have to be a United States citizen, and that could be a corporate citizen too.

“For the purposes of getting mining claims on US federal land, (Glamis Gold) says they are a US corporation.

“But then, for the purposes of trying to get a big fat cheque out of the US government, now they’re a Canadian company utilizing NAFTA.”

“They want it both ways here,” said Flynn.

Corman insisted that Glamis Gold is a Canadian company.

“Glamis is a Canadian corporation,” he said.

“Its operating offices are in Reno, Nevada.”

But Glamis Gold has absolutely nothing to do with Western Copper’s holdings in the Yukon, said Corman.

Western Copper was a “spin-off company” of the Western Silver-Glamis Gold merger, he said.

“Every shareholder of Western Silver got one share of Western Copper.

“That company was then subsequently listed on the Toronto Stock Exchange.”

Since July Western Copper drilled 20 exploratory holes with a diamond drill into the Carmacks Copper deposit.

The company website claims the deposit contains 13.3 million tonnes of mid-grade copper ore.

Western Copper contracted M3 Engineering and Technology out of Tucson, Arizona, to update a feasibility study of the Carmacks Copper Project.

The feasibility update is expected to be complete in early 2007.

Currently, Western Copper is going through the Yukon permitting process.

“If we can get the permits through in a timely fashion then we will make a production decision,” said Corman.

The Carmacks Copper Project will be subject to a review from the Yukon Environmental and Socioeconomic Assessment Board.

“Unfortunately, we were proceeding through the (Yukon Environmental Assessment) process, and then YESAA came in,” said Corman.

“Now we have both YEA and YESAA to deal with.”

Western Copper has made no commitment to help the Yukon Energy Corporation build a hydroelectric transmission line from the power grid that terminates in Carmacks to the copper deposit several kilometres away.

“Certainly it is something that we would welcome, it would cut our cost to power,” said Corman.

“But we’re not in a position to make any commitments to Yukon Energy until we do have our permits.”

The company hopes to begin construction of the site infrastructure by spring 2007 and bring the mine into production by summer 2008.