First Nation says McEwen Mining breached agreement, owes almost $1M in unpaid shares

The Apitipi Anicinapek Nation (AAN) has launched a lawsuit against McEwen Mining Inc., alleging breach of contract and environmental damage.

The lawsuit centres around an Impact Benefit Agreement (IBA) signed in 2011 between AAN and Brigus, the then-owner of the Black Fox Mining Complex near Matheson, Ont.

IBAs are agreements between resource extraction companies and Indigenous communities intended to mitigate the impacts of development on traditional territories and ways of life. 

In this case, the IBA promised AAN financial compensation in the tune of 25,000 shares of the mining company annually.

AAN's director of negotiations, Lance Black, says it was the first IBA ever signed by the First Nation, and it brought good things to the community.

"We benefited a lot from the construction… Over the years we've had many of our members work there. We've had different contracts thanks to the project," he said. 

"We are not against mining development. It's helped advance our community and supported different programs."

Black says McEwen Mining has not paid the shares as detailed in the IBA since it took over the project back in 2017. It also says the previous owner of the mine failed to make those payments. 

In a press release, the mining company says it does not believe its shares and the shares of the mining company that initially signed the IBA are "interchangeable on a 1-to-1 basis" and that this "[complicates] the conversation." 

"We are not responsible for shares that were not delivered by [the previous owner], among other things," they write.

First Nation is suing for $100M in damages

The Black Fox Mining Complex changed hands several times over the past 15 years, from Brigus to the now-defunct Primero to McEwen Mining. Both Brigus and Primero have since dissolved.

The First Nation says that, in 2022,  it noticed it hadn't been receiving the money promised in the IBA for some time. It calculated there's $1M worth of unpaid shares, some of it dating back to the years Primero was operating the mine.

It says meetings to resolve this issue with McEwen mining were unsuccessful.

As for the company, it says it was not notified of any outstanding liability in the IBA when it took over the project in 2017 and therefore cannot be held responsible.

This means AAN effectively has no means of recovering the payments promised in the IBA.

"It's really hard to wrap my head around this," said Black. "How can the company not honour the longstanding agreement with the nearby First Nation?" 

Black says the community relies on these revenues to pay for day-to-day operations like band office expenses, social housing and public works.

The First Nation says McEwen Mining tried to resolve the share dispute by offering 15,000 shares of its stock to cover the period between 2018 and 2023.

It deems that offer is too low to cover what was initially promised in the IBA. 

Company says it remains open to "constructive dialogue"

McEwen Mining denies the allegations that it has let waste materials seep into a nearby creek, as alleged it the lawsuit.

It has declined multiple interview requests from CBC. 

The company says that both before and during this dispute it has worked with AAN to respect the terms of the IBA, including "providing $20M in direct and indirect benefits since 2017," without specifying what these "indirect benefits" are and how much they account for.

It says it has paid the salary of an AAN representive to have a presence on the ground during operations but that this person has not visited the project in over a year. 

"Given there seem to be significant misunderstandings about environmental matters and transparency, we believe it would be highly beneficial to have an AAN representative present at Fox on a daily basis," it writes.

The company recently boosted mining exploration in the area in a bid to extend the mining life at the Fox Complex.