Lynn Lake gold mine seeks to be shining symbol of balance

Opinion

The official start this week of construction on what will be a $1-billion mine in Lynn Lake is obviously a big deal in a province that touts itself as a great mining jurisdiction but has a very hard time opening mines.

The company involved, leading mid-tier gold miner Alamos Gold Inc., is on an amazing run with producing properties in Mexico and Ontario.

Its CEO, John McCluskey, said when it acquired the Lynn Lake property in the 2010s, the market was not impressed. The company’s stock price hit its historic low in 2016.

Gold is worth three times what it was then; Alamos stock is 10 times what it was then.

With a workforce of about 600 people required during the construction phase — effectively doubling the population of the nearby town of Lynn Lake — it’s obviously going to have an enormous impact on the community, which sits at the end of Highway 391, the 322-kilometre road from Thompson.

In addition to the sheer influx of people and material, the economic impact will be huge in a region where the last mine closed 20 years ago (but had been in declining operation for the preceding 10 years).

Alamos is a successful, dividend-paying miner, but it’s also a successful player in community engagement.

It signed what is believed to be the first benefit agreement in the province with the Marcel Colomb First Nation, upon whose ancestral lands the mines will be built.

MCFN, a tiny, impoverished First Nation was only established in the 1990s and suffered great hardships, living in a tent encampment on the edge of town for many years.

But with the arrival of Alamos about a decade ago and the dramatic rise in the price of gold — and some skillful negotiations — over the next three decades, it could become one of the wealthiest First Nations.

Alamos has identified 3.3 million ounces it believes it will be able to extract. With prices currently eclipsing $3,000, that’s potentially a $10 billion revenue stream.

The details of the benefit agreement are not being disclosed, but the band has already received an initial payment from Alamos it said will wipe out its current debt.

Christian Sinclair, former chief of Opaskwayak Cree Nation and a skilled economic development adviser, said the deal was informed from “a lot of learning … and on best practices from across the country.”

Sinclair, who has become a sought-after negotiator on numerous projects in support of First Nations, was recently named CEO of MCFN’s newly formed development corporation. He said with the legal and constitutional inroads made in the past few decades means Indigenous treaty rights must now be honoured.

“The old mining companies that were active around Lynn Lake never gave one penny or one job to any band member from that area,” he said.

Underpinning the economic benefit agreement is the assurance the physical environment is not destroyed, something also not much of a consideration for the industry as recently as 30 years ago.

“It’s now all about making sure as we go forward there is a balance between the mining company shareholders and the rights holders of MCFN,” Sinclair said.

In addition to cash payments, the agreement also gives MCFN first right of refusal on jobs and a range of business opportunities.

“The agreement with Marcel Colomb First Nation was an important step along the way,” McCluskey said.

There’s obviously a lot involved in exploration and analysis and planning for a major mine. The fact such a planning process should also include the duty to consult and meaningfully accommodate First Nations should not be a deal breaker.

It clearly was not for Alamos.

(On Wednesday, the province announced a partnership with the Mining Association of Manitoba, to help attract investment into exploration and development of the province’s critical minerals.)

Although there are only a few dozen ablebodied workers as part of MCFN’s population, the band has already established joint ventures with a construction company, drilling company and a firm that provides work camp facilities in the gold mine project.

“If any developer comes into the territory, the First Nation can decide to give the company the right (to extract) … but only if the companies make sure they negotiate in good faith and make sure there is sharing of the resources and opportunities going forward,” Sinclair said.

martin.cash@freepress.mb.ca