A consequential battle is shaping up in a place you may not know (Thunder Bay, Canada) over an issue you may never have heard of – Free, Prior, Informed Consent. (FPIC for short). The parties to the conflict are 10 of the Treaty 9 First Nations on one side and the Canadian Government on the other.

Why should you care? Here’s what’s at stake: $95 billion dollars that the indigenous nations say they will claim as compensation for past wrongs – and potentially much, much more because the argument essentially is about how mines will be approved in Canada going forward.

This fight has been brewing for a long time but now, with the urgent necessity of producing more critical minerals to transform economies and hopefully slow the current environmental decline, the outcome of this case could have consequences reaching far beyond Canada’s Great North.

Common understanding of the terms of an agreement is fundamental to its successful implementation. Shared values, when they exist, make for a stronger and more durable agreement that can be implemented consensually.

From its adoption in 2007 by the United Nations General Assembly the Declaration on the Rights of Indigenous Peoples, in which the concept of Free, Prior, Informed Consent (FPIC) is embedded, has been fraught with differing interpretations leading to misunderstandings. The Declaration itself is a statement of principles identifying and supporting fundamental human rights, with particular reference to Indigenous groups, and does not carry the force of law. Even so, it took decades for many States to acknowledge and accept the Declaration in their national context: for instance, only in 2016 did Canada announce its “full and unqualified support” for the Declaration and its commitment to implement it domestically.

What does FPIC really mean? Is it really so unclear? The FPIC’s comparatively vague definitions embody the difficulties in trying to achieve a document that could be accepted by the Member States of the UN.

“Free” – The consent is free, given voluntarily and without coercion, intimidation or manipulation. A process that is self-directed by the community from whom consent is being sought, unencumbered by coercion, expectations or timelines that are externally imposed.

“Prior” – The consent is sought sufficiently in advance of any authorization or commencement of activities.

“Informed” – The engagement and type of information that should be provided prior to seeking consent and also as part of the ongoing consent process.

“Consent” – A collective decision made by the right holders and reached through a customary decision-making process of the communities.

Implementation also has a wide range of possible interpretations and related actions. Nations can adopt the fundamental elements into their constitutions (as was done in Peru and Chile), national laws, structures or behaviors, with decreasing weight of law in that scale. This wide variation – and the basic unenforceability of FPIC – underscores the fundamental differences in interpretation of the concept.

In 2017, the Canadian Government established “Principles Respecting Canada’s Relationship with Indigenous Peoples.” The implementing commentary around Principle 6 includes the following language:

“The importance of free, prior and informed consent as identified in the United Nations Declaration, extends beyond title lands (author’s emphasis). To this end, the Government of Canada will look for opportunities to build processes and approaches aimed at securing consent, as well as creative and innovative mechanisms that will help build deeper collaboration, consensus, and new ways of working together. It will ensure that indigenous peoples and their governments have a role in public decision-making as part of Canada’s constitutional framework and ensure that indigenous rights, interests and aspirations are recognized in decision-making.” *

In contrast, the Australian Government position is that “Australia notes, however, that the FPIC is a concept unique to the Declaration. As FPIC is not defined in the Declaration, its scope and content remains unsettled.” (authors’ emphasis) The Australian submission goes on to say that “The Australian Government is of the view that legal frameworks, policies and practices in Australia are consistent with the aims of the Declaration.”*

The United States likewise notes in its 2010 statement adopting the Declaration that as regards FPIC “there is no universally accepted definition of Free, Prior and Informed Consent.”  (authors’ emphasis) The US goes on to say: The United States recognizes the significance of the Declaration’s provisions on free, prior and informed consent, which the United States understands to call for a process of meaningful consultation with tribal leaders, but not necessarily the agreement of those leaders, before the actions addressed in those consultations are taken.” (authors’ emphasis)*

Even those Nations where the Principles have been constitutionally enshrined have grappled with the actual implementation on the ground of trying to facilitate dialog between Indigenous communities, mining companies and the government itself. Some of that difficulty lies in time: the majority of Indigenous communities have a consensual model of governance, and reaching a consensus agreement on complex issues is a time-consuming process which by its nature is too unwieldy for modern business practices.

A potentially very important thing in terms of FPIC and mining projects happened yesterday, April 26. Although press articles quote tribal leaders as saying the 1905 governing Treaty with the federal government of Canada is the basis for the legal challenge to mining permits granted by local and national governments, the lawsuit is fundamentally connected to the principles of FPIC. The 10 Treaty 9 First Nations party to the suit say they will be claiming $95 billion in damages from projects authorized by the Canadian government in their lands but without their consent. They will also be seeking injunctions prohibiting the government from regulating or enforcing regulations in treaty lands without their consent – aimed at blocking issuance of new mining permits or continuation of mines already in development.

As is the case with FIPC, the fundamental issue is the absence of a shared understanding of a document, in this case the Treaty. The plaintiffs in the lawsuit argue they never agreed to cede, release, surrender or yield up their jurisdiction to govern and care for the lands, as it says in the Treaty, entered into in 1905. Consequently, their demand is there must be co-jurisdiction where the province and Ottawa cannot move forward on land development without their consent.**

Here is the essence of the problem – the word ‘consent.’ From the inception of the FPIC, Indigenous peoples have interpreted the word to mean that they can say ‘no’ to a mining project and that project cannot proceed. This absolute rejection is not-withstanding any economic compensation offered, which conflicts with the interpretation of most mining companies, who believe that ‘no’ is the beginning of a negotiation to ensure the Indigenous communities affected benefit financially from the mines’ operations. It also conflicts with the interpretation of governments such as Australia and the US, whose emphasis is on the right of the Indigenous to be informed and consulted – but not to prevent the project from taking place.

Treaty 9 First Nations have decided to push for full implementation of FPIC principles in Canada, with sweeping implications for the mining industry. Everyone should pay close attention to how this legal action evolves, particularly given the urgency of developing new critical minerals projects not only in Canada but around the world.

Sources cited:

• * August 10, 2018, report by the Expert Mechanism on the Rights of Indigenous Peoples
• ** CBC article on Thunder Bay legal suit

The Prospector’s & Developers Association of Canada’s (PDAC) Convention returns to Toronto, Canada from March 5 to 8 and once again, InvestorIntel is one of the media sponsors at the world’s largest mining and exploration convention. InvestorIntel will be located on Level 700 and Media Stage #2 if you want to come by and say “hello” as we will be meeting clients and interviewing companies for the duration of the convention.

The convention is a major event in the mineral exploration and mining industry and features programming, business and investment opportunities, networking, and a plethora of social events. The 2023 event will be one of the largest in its 91-year history and will include hundreds of hours of programming such as Capital Markets, Indigenous, Student & Early Career, Sustainability, and Technical programs.

Keynote Speakers

The event will provide exceptional insight into the industry’s future and feature a wide range of speakers, industry experts, and facilitators. There will also be keynote presentations from the following industry experts:

• Commodities Outlook:

  • Ken Hoffman, Head of Battery Raw Materials from McKinsey & Company, will give the keynote commodities speech on Sunday morning about the future availability of metals as it is facing a critical period due to several factors such as increasing consumption, diminishing reserves, declining ore grades, delays in permitting, limited capital, poor shareholder returns, and a trend towards de-globalization. However, he believes that innovative technologies and efforts to reduce emissions are poised to revolutionize the mining industry. In addition, he thinks that financing and development of these new technologies will be a significant challenge, but potential solutions are on the horizon.

• Mineral Outlook:

  • On Monday, Sinead Kaufman, Chief Executive of Rio Tinto Minerals (NYSE: RIO | LSE: RIO), will address the mineral outlook for critical minerals focusing on the opportunities and challenges for the mining industry, as the world shifts to a low-carbon economy. As an example, Rio Tinto recently announced that it plans to provide low-carbon aluminum to BMW’s (XTRA: BMW) vehicle production plant in South Carolina, for use in body components starting in 2024. Low-carbon aluminum from Rio Tinto’s hydro-powered operations in Canada, combined with recycled content, could reduce CO2 emissions by 70% compared to BMW’s benchmark for aluminum.

• Technology Keynote:

  • The technology keynote speech will be presented by Sally Goodman, Vice President Generative Exploration, of Newmont Corporation (NYSE: NEM) on Tuesday.  She will discuss recent technological advances that already impact the way mineral exploration is conducted and the pace of change that continues to move quickly. Her presentation focuses on how exploration geologists might harness newer technologies to make the next major discoveries. Newmont explains that only one in 3,000 discoveries lead to a mine development, only 10% of the world’s gold deposits are economic for development, and exploration can last years to even decades, so it seeks to apply the latest thinking, technologies, and approaches to exploration activities.

• New Discoveries Keynote:

  • Finally, the new discoveries keynote presentation will be hosted by a team from Chalice Mining Limited (OTCQB: CGMLF | ASX: CHN ) for its platinum group element (PGE), nickel, copper, cobalt, and gold discovery at its Julimar project in Western Australia. At the PDAC Awards Gala on Tuesday night, Chalice will be presented with the Thayer Lindsley Award for “a recent significant mineral discovery anywhere in the world”.

With companies and attendees from over 120 countries, there will be many opportunities to learn more about the mining industry and companies to invest in. We hope to see you there.

In this InvestorIntel interview, host Tracy Weslosky is joined by Terry Lynch, Founder of Save Canadian Mining and CEO of Power Nickel Inc. (TSXV: PNPN | OTCQB: CMETF), and Peter Clausi, President, CEO and Director of CBLT Inc. (TSXV: CBLT) to discuss predatory short selling and how it is hurting investors and the mining industry.

In the interview, which can also be viewed in full on the InvestorIntel YouTube channel (click here), Terry and Peter talk about how the lack of fair and transparent capital markets allows predatory short sellers to go unpunished and play havoc in the markets with the interests of investors and companies alike. Terry goes on to discuss the need for reinstatement of the “tick test” to curb predatory short selling. Touching upon the lack of response from the Canadian regulators, Peter advocates the need for stronger investigative powers by the Canadian Securities Administrators to correct a flawed system that keeps stock values artificially down.

Don’t miss other InvestorIntel interviews. Subscribe to the InvestorIntel YouTube channel by clicking here.

About Save Canadian Mining

Save Canadian Mining is a not-for-profit, issue-based advocacy group representing the interests of Canada’s junior mining industry and the investment community. Founded in September 2019 by Terry Lynch, Save Canadian Mining is committed to working with governments and agencies to amend regulations in capital markets to help generate investment in Canada’s junior mining industry.

In this InvestorIntel interview with host Tracy Weslosky, CBLT Inc.’s (TSXV: CBLT) President, CEO and Director Peter Clausi discusses the four major mining industry takeaways from Canada’s 2022 Federal Budget.

In the interview, which can also be viewed in full on the InvestorIntel YouTube channel (click here), Peter Clausi talks about four major items in the budget that affect the mining industry, including $1.5 billion to support the domestic critical minerals industry with new infrastructure and “access to federal data”, and the proposed flow-through increase to 30% of the new Critical Mineral Exploration Tax Credit. He also discusses the $70 million earmarked to research and develop small modular reactors as a major policy shift towards reconsidering nuclear power, and the importance of partnering with First Nations.

To watch the full interview, click here

About CBLT Inc.

CBLT Inc. is a Canadian mineral exploration company with a proven leadership team, targeting lithium, cobalt and gold in reliable mining jurisdictions. CBLT is well-poised to deliver real value to its shareholders.

To learn more about CBLT Inc., click here

Disclaimer: CBLT Inc. is an advertorial member of InvestorIntel Corp.

This interview, which was produced by InvestorIntel Corp., (IIC), does not contain, nor does it purport to contain, a summary of all the material information concerning the “Company” being interviewed. IIC offers no representations or warranties that any of the information contained in this interview is accurate or complete.

This presentation may contain “forward-looking statements” within the meaning of applicable Canadian securities legislation. Forward-looking statements are based on the opinions and assumptions of the management of the Company as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein.

Any projections given are principally intended for use as objectives and are not intended, and should not be taken, as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. Prospective investors are urged to review the Company’s profile on Sedar.com and to carry out independent investigations in order to determine their interest in investing in the Company.

If you have any questions about the content of this interview, please contact us at +1 416 792 8228 and/or email us direct at [email protected].

In a recent InvestorIntel interview, Peter Clausi spoke with Felix Lee, President of PDAC about the convention that just kicked off earlier this week and the role of PDAC in promoting miners interest around the world.

In this InvestorIntel interview, which may also be viewed on YouTube (click here to subscribe to the InvestorIntel Channel), Mr. Lee starts with: “The show is off to a great start.”

Mr. Lee pointed out that most people think of PDAC as a convention but the organization exists as an advocacy body. He said that the organization works very hard to support and promote a vibrant, competitive, and responsible minerals exploration industry. They also work with the Canadian federal government to enact policies that benefit the industry. “We are poised to play a very critical role in the transition of Canada’s economy to a low carbon future,” Mr. Lee added.

To watch the complete interview, click here

About PDAC

Prospectors & Developers Association of Canada (PDAC) is the leading voice of Canada’s mineral exploration and development community since 1932. With over 7,200 members around the world, PDAC’s work centres on supporting a competitive, responsible mineral sector. The annual PDAC Convention is the world’s premier international event for the minerals and mining industry. It has attracted more than 25,000 people from 135 countries in recent years.

To learn more about PDAC, click here

Note from the Publisher: PDAC issued an updated statement on the attendee that has been confirmed with the Covid-19 virus that may be accessed here – click here We felt that PDAC 2020 was exceedingly well done, and the attendance was reported to be 23,000, which suggests another outstanding year of attendance in spite of this unprecedented health challenge. On behalf of the InvestorIntel team, we would like to thank the PDAC team for doing an outstanding job, and for having us as a media sponsor again this year. To all of our audience members, stay healthy and be well!

In an InvestorIntel interview during PDAC last week, Peter Clausi secures an interview update with President Felix Lee on Prospectors & Developers Association of Canada (PDAC), the leading voice of the mineral exploration and development community.

Mr Lee started the interview by discussion the substantial history and leadership of PDAC in the mining sector. Having been in existence for the last 88 years, PDAC injects more than $70 million into the local economy every year. While commenting that it is an interesting time for the mining industry with gold at all-time highs, he had some equally interesting incite on what the mining sector to widen their investment audience. To access the complete interview, click here

The mining industry can learn a lot from the Boston Red Sox. I just learned that lesson at PDAC 2019, the greatest mining show on Earth. More than 25,000 people attended in Toronto to meet, mingle, learn, look at core, party, buy, sell and schmooze.

I’ve been attending the mining show annually since 1992. I’ve missed two years. Before I go I have a list of goals that I want to achieve. Overall, it was a very good year at the show as I ticked off all the items on my to-do list and as always found a few more.

Wandering the booths and hallways and seminars, one of the things I learned was that there is a dearth of good projects under development. Simply put, we are consuming metals and not replacing them, causing analysts to believe the world will be in a deficit position over the next few years. This 2015 infographic from the Visual Capitalist makes the case for the coming copper crunch or you can read it in The Mining Journal.

Similar alarms are being sounded for silver and gold. The shortages in the battery metals (nickel, manganese, lithium, graphite and of course perennial bridesmaid cobalt) are obvious as the world decentralizes grid electricity.

Refined zinc metal output is expected be 13.81 million tonnes in 2019. The problem is, the output estimate for 2019 is lagging behind the expected metal usage of 13.88 million tonnes for the year.

We are consuming the metals faster than the mining companies can replace them.

How does this relate to Boston Red Sox, winners of last year’s World Series?

The Bosox over many years invested heavily in scouts to find a larger pool of young possible players, signed players at a young age, developed them patiently through the system, and brought them to the major leagues at the appropriate time. Not downplaying Steve Pearce’s World Series, the most important players on Boston’s championship run throughout the season and the playoffs were homegrown, like Mookie Betts, Andrew Benintendi, and Jackie Bradley Jr., Xander Bogarts was signed when he was 16 years old and made major contributions to the team’s success.

The cost of finding and developing young talent is far less than the cost of trying to acquire that talent once developed. Look at Bryce Harper’s USD$330 million contract with the Phillies after spending the first 7 years of his professional career in Washington. In Year 1 of that Washington contract, Harper was paid a total of $3 million and had a tremendous year, earning a spot in the All-Star game and winning NL Rookie of the Year. His 7 years in Washington were very cost-effective for the team and the returns he provided. Once developed, he priced himself out of the Washington budget.

There’s also Mannie Machado who in 2012 was paid $112,786 by the Baltimore Orioles. Drafted and developed by Baltimore, Machado provided Baltimore with gaudy numbers and strong defence. For you data geeks, his Wins Above Replacement (WAR) is 5.7. He was a bargain for what he contributed to the team. He just signed a 10-year, USD$300 million contract with the San Diego Padres, priced out of Baltimore’s budget.

Finding, drafting and developing your own players allows a team to control costs, keep these players under contract for a (relatively) low cost for an extended period of time, provides some degree of economic stability for the team, and de-risks the overall organization.

And that is one of the things that’s missing in the mining industry. There are few large projects in development to replace the copper, gold, copper, nickel, tin, silver, and battery metals that are needed. The majors have failed to invest in their minor league systems, leading them to have to effect risky M&A transactions to replace lost ounces.

This failure to invest in development started in about 2013, after the mining industry blew up following an acquisition spree. You remember Kinross’ 2010 free agent acquisition of Red Back Mining to acquire ownership of Tausita Gold Mine in Maruitania? Kinross paid $7.1 billion for an asset that was written down by $3.2 billion in 2013, crushing Kinross’ share price with it. There are other examples as well, but this write-down was massive and caught the market’s eye. Fear crept into the market and brought an end to M&A activity.

Following the fear came severe cost-cutting. The majors dramatically scaled back in all areas of operations, including not investing in the intermediates and juniors. If the juniors aren’t being funded they can’t explore (scout), the number of development opportunities shrinks, which reduces the number of opportunities for the intermediates to shepherd good projects along. And that decreases the odds that a major deposit would be found. And that of course means that fewer deposits are making it to the Major Leagues.

The cost of acquiring already-developed properties is extremely expensive. Grabbing proven ounces is what is driving the current $17.8 billion attempted takeover of Newmount Mining by Barrick Gold. It’s like the Phillies acquiring Bryce Harper for $330M after he was cheaply developed by Washington.

The Bosox are 6/1 favourites to win the World Series again, due mainly to the core of highly talented home-grown inexpensive players. It would be cheaper for the majors in the mining industry to invest more broadly in the juniors, knowing there will be winners and losers along the way, than to continue relying upon free-agent signings.