Fasken Martineau DuMoulin LLP assisted Merit Mining Corp.
(TSX: MEM) to negotiate and conclude an Impact and Benefits
Agreement (IBA) with the Osoyoos Indian Band. The IBA relates
to the development and operation of Merit's Greenwood
This, in and of itself, is not unique. What is so unique
about this deal, however, is that the permits were issued in
parallel with the completion of the IBA. This is rare since it
can often take much longer to negotiate an IBA. The fact that
these two documents were completed at the same time
demonstrates that both Merit and the Osoyoos Indian Band
approached their relationship willingly, professionally and
collaboratively, which, in turn, assisted the government in
expeditiously completing the regulatory process.
The Greenwood Project - located near Greenwood in
south-eastern British Columbia near the Canadian-U.S. border -
is comprised of two advanced-stage gold and copper deposits, as
well as a copper and subordinate gold deposit. The deposits are
located on three properties wholly owned by Merit, subject to
underlying royalties. The Project is supported by existing
infrastructure: transportation, power, and natural gas, and a
local skilled work force.
Development of the Greenwood Mill - a centralized 200 tonne
per day gravity/flotation mill and tailings facility
– has progressed rapidly. Construction commenced in
late August 2007 and was completed ahead of schedule in the
first quarter of 2008. Commissioning of the Greenwood mill
commenced in March 2008. Processing of the 10,000 tonne bulk
sample from one of the gold and copper deposits was completed
in the second quarter of 2008.
The Mines Act permit application for full
production at 200 tonnes per day was submitted to regulatory
authorities in November 2007 with the company being issued the
required permits to start production upon completion of the
underground bulk sample. Fred Sveinson, Merit's
president and CEO, following the ribbon cutting ceremony for
the opening of the mine, stated: "We received our mining
permit at the same time that we signed the Impacts and Benefits
Agreement last week. Quite often you end up with your permit
first and it takes quite a bit longer to get an Impact and
Benefits Agreement in place, so we're really
pleased." Although a signed IBA is not a pre-requisite to
receiving the production mining permit, it demonstrates to the
regulatory authorities that the company has consulted fully
about the project with the First Nations and gives government
confidence that its legal duty of consultation has been
fulfilled. Production is expected to continue for the next five
to ten years.
The IBA, specifically, supports construction and operation
at the three mine sites. It also maintains that further
agreements between the parties may be made if other new
projects are considered for development in the Band's
The IBA was negotiated and concluded swiftly, due to the
commitment of the parties to work together to identify, discuss
and resolve the issues of concern. Key issues addressed in the
agreement relate to business development, employment, training
assistance and opportunities, and revenue sharing for the
Osoyoos Indian Band. While the agreement is solely between
Merit and the Osoyoos Indian Band, the interests of other First
Nations in the area are expressly addressed. For example, by
the terms of the agreement, the Osoyoos Indian Band will pass a
portion of those revenues it receives to the members of the
Okanagan Nation Alliance - an organization that represents the
other aboriginal communities in the region. There are other
provisions, including those respecting employment, that also
provide for groups other than the Osoyoos.
Often it is difficult for project proponents to address
successfully and in a timely manner the interests of aboriginal
groups who have asserted traditional territories in the project
area. The ability of the parties to structure the agreement to
address such interests in such a short period of time is a
testament to Merit's commitment to the local community
in the area and to the recognition by the Osoyoos Indian Band
of the benefits the Greenwood project can bring to the area and
of its commitment to be inclusive of other aboriginal groups in
the area in order to be able realize on that benefit for the
short and long term.
Fasken Martineau's Kevin O'Callaghan
provided strategic aboriginal advice to Merit in relation to
the negotiation of this agreement. Michelle Pockey and Paul
Wilson advised Merit in relation to the structure and drafting
of the agreement. Merit also drew on Fasken Martineau's
resources in specific areas, working with Georald Ingborg on
securities issues and Josh Lewis on mining matters.
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