Gary Wilson
Case Study #3: Brewery Creek
Brewery Creek1 Mine was originally developed by Loki Gold (or “Loki”), which later merged with VLB Resources (Viceroy). The mine is located in central Yukon about 57 km east of Dawson City. The mine was licensed in 1995, and mining began the following year, reaching full production in May 1997. It was a seasonal open pit that refined its product through a year-round heap leach operation. Eight mine and maintenance personnel worked 12-hour days over a 14-day on and 7-day off rotation. The mine was permanently shut down in 2002. With the exception of some remaining site facilities, the mine has been fully reclaimed. Alexco Resources CorporationCorporation: the most common form of business organization. It pursues set objectives and is empowered with legal rights usually only reserved for individuals, such as to sue and be sued, own property, hire employees, or loan and borrow money. became the mine’s owner in 2005.2
The Brewery Creek Mine was the largest lode gold mine ever constructed in the Yukon and the largest open pit, heap leach operation north of 60. The mine is located on Tr’ondëk Hwëch’in (TH) traditional lands. TH has a population of about 1100 people of whom a third live in the traditional territory.
Originally Loki predicted a mine life of only 8 years. TH therefore wanted to conclude with Loki what was then called a Socio-Economic Development AgreementAgreement: any explicit, signed document that is negotiated and includes mutual concessions or limitations placed on both sides. Examples are Negotiation AgreementsNegotiation Agreement: an early agreement in the mining process, likely to occur in the Exploration StageExploration Stage: the whole range of activity from searching for and developing mineralMineral: A naturally-occurring, homogeneous substance that has a definite chemical composition and (usually) a crystalline structure. deposits., which would outline the basis of the relationship between the Aboriginal group and the mining company and how the relationship will evolve if the mine moves forward. , Exploration Cooperation Benefit Agreements, Socio-Economic Participation AgreementsSocio-Economic Participation Agreements (SEPAs): private, confidential contracts between Aboriginal communities and resource developers, like mining companies. SEPAs specify how the communities that will be affected by the development of a resource will also benefit from that development. Many SEPAs include terms about the employment and training of Aboriginal people, compensationCompensation: something (such as money) given or received as payment or reparation (as for a service or loss or injury). payments, protection of the environment, and profit-sharing. SEPAs are often called Impact Benefits Agreements (IBAs) and Cooperation Benefit Agreements (CBAs), and other names. The Aboriginal Mining Guide calls them all SEPAs.. that would develop skills and opportunities that would continue to benefit the community after the mine closed. It seemed prudent to ensure that TH realized benefits not just through direct employment but also upstreamUpstream: the actual mining operations owned and controlled by a mining company. , through a share of the mine’s ownership.
When negotiations with Loki commenced TH still had not negotiated a Land Claims Agreement. They had not ceded or surrendered any rights within their traditional territory. Even if they had concluded such an agreement, they would still have retained substantially unaltered harvesting rights and rights to water quality. With the support of the mining industry as a whole, Loki perceived it had a fundamental right to operate in traditional territories. Still, the company was having difficulty attracting investors. Loki knew that in order for the mine to be viable and move ahead, a challenge to the company’s perceived right could not be risked.
Loki wanted certainty with respect to regulatory procedures and Aboriginal rights and title. An agreement with TH would make it easier to finance the project. Finally, Loki was interested in securing local cooperation in the provisionProvision: an action or item stipulated by an agreement. Often called a clauseClause: a subdivision (often numbered) of a document, that clarifies, defines, or explains the subject matter. Often called a provision.. of power, transportation services, and in the development of housing options.
TH knew that a well-crafted agreement, focused on Aboriginal training, employment and the development of entrepreneurial skills, would enable the members to build a foundation for longer-term economic success.