August 2016


Northern Superior pushes forward with appeal

Birdisland RapsonBay
Northern Superior filed to appeal an Ontario Superior Court of Justice decision against the company in a civil case regarding the company’s exploration work in northern Ontario | Courtesy of Northern Superior Resources

Junior miner Northern Superior Resources has filed to appeal the Ontario Superior Court of Justice’s decision against the company in the ongoing civil case regarding its exploration work in northern Ontario.

The company’s notice of appeal argued that the judge in its first trial, Judge Thomas Lederer, did not rule on the “nature and scope” of the province’s duty to consult, among 36 other grounds. The company alleged that the Ontario government did not meet its duty to consult with the Sachigo Lake First Nation about the company’s project, to the detriment of its exploration work.

“There are quite a number of issues out there that the government is not addressing,” said Northern Superior CEO Thomas Morris. “I’m simply trying to look after my shareholders here.”

Northern Superior asked for $110 million in damages in the lawsuit as compensation for the company’s losses.

“This case has far-reaching effects for the industry,” Morris said. He added he has heard that other companies are concerned about similar issues. “We think [the case is] important for the industry, to the First Nations and to government.” Thomas Isaac of the law firm Osler Hoskin & Harcourt, commenting in Canadian Lawyer InHouse, noted “the bigger issue is, what is the reasonable standard of conduct a proponent should expect from a Crown decision-maker, period.”

Northern Superior, formerly Superior Diamonds, and Sachigo had negotiated several agreements since 2005 and worked together while the company drilled near Meston Lake and Rapson Bay, but the relationship soured after disagreements emerged about staking activity in July 2011, “incomplete” invoices from Sachigo that the Nation says went unpaid and Sachigo’s request for a 24 per cent administration fee, based on the value of a contract being negotiated. Negotiations to continue work broke down in the summer of 2012, and that fall the company asked the provincial government for compensation.

As part of a “transitional” approach to the way First Nations were consulted about mining exploration and projects, the government sent letters to First Nations communities and mining companies, between 2009 and 2012. First Nation communities were notified about new claims in their area, and companies were notified about which First Nations were in the area of claims and given contact information.

In the initial trial, the judge ruled against the company and stated that the Ontario government did not owe a duty to consult to Northern Superior.

“There can be no duty owed by the Crown to Northern Superior,” the judge wrote. “In such circumstances, the loyalty of the Crown is to the First Nation.” Requiring the government to advocate for both parties would not be possible, the judge added. The judge stated the company cannot be compensated by the government when it was not “directly involved” in the company’s relationship with the First Nation. The government had offered to meet with communities and companies in some of the letters sent to Northern Superior that provided the contact information for the First Nations in its area of exploration, according to the decision.

Northern Superior’s stock peaked in January 2012 at 42.5 cents/share, and in 2011 was valued as high as $1.05/share. At press time it was trading at two cents/share.

– Kate Sheridan

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