A Case History on A Case History on Ross RiverRoss River KaskaKaskaand the Mining and the Mining SectorSector

Presentation at CBERN’S Mapping Presentation at CBERN’S Mapping Ethical Issues Workshop, Vancouver, Ethical Issues Workshop, Vancouver, Nov 20, 2009Nov 20, 2009

By Bruce McKnightBy Bruce McKnight

BackgroundBackground

RR area in southeastern Yukon has good RR area in southeastern Yukon has good mineral endowment and a history of mineral mineral endowment and a history of mineral development, not all positivedevelopment, not all positiveThere were very few other community There were very few other community development opportunities besides miningdevelopment opportunities besides miningIn 2003 RRDC recognized a new mining boom In 2003 RRDC recognized a new mining boom was coming and wanted to preparewas coming and wanted to prepareThey hired me to work with the community and They hired me to work with the community and help develop a community plan to improve on help develop a community plan to improve on the past mining experiencethe past mining experience

BackgroundBackgroundAwareness of Awareness of PDAC’sPDAC’s e3 Plus Principlese3 Plus Principles

1.1. Adopt responsible governance and managementAdopt responsible governance and management2.2. Apply ethical business practicesApply ethical business practices3.3. Respect human rightsRespect human rights4.4. Commit to project due diligence and risk assessmentCommit to project due diligence and risk assessment5.5. Engage host communities and other affected partiesEngage host communities and other affected parties6.6. Contribute to community development and social Contribute to community development and social

wellbeingwellbeing7.7. Protect the environment Protect the environment 8.8. Safeguard the health and safety of workers and the Safeguard the health and safety of workers and the

local populationlocal population

1st Step: A Mining Strategy1st Step: A Mining Strategy…Key Community Drivers…Key Community Drivers

CouncillorCouncillor EDO John Chief JackEDO John Chief JackGordon Peter Gordon Peter EtzelEtzel CaesarCaesar

1st Step: A Mining Strategy1st Step: A Mining Strategy…..Rationale…..Rationale

RR area has good mineral endowmentRR area has good mineral endowmentBenefits available if managed properlyBenefits available if managed properlyBut But -- negative impacts likely if notnegative impacts likely if notStrategy needed to recognize the Strategy needed to recognize the realities of the business in order for RR to realities of the business in order for RR to generate opportunities and capitalize on generate opportunities and capitalize on them them Minerals are only valuable if discoveredMinerals are only valuable if discovered

KaskaKaska Dena Traditional Dena Traditional TerritoryTerritoryRealizing Value from concealed mineral depositsRealizing Value from concealed mineral deposits

Mineral Potential MapMineral Potential MapKaskaKaska Dena Traditional TerritoryDena Traditional Territory

MacPass

Anvil Camp

Finlayson Camp

Relative Regional Mineral Potential

Highest

LowestHowards Pass

Ketza River

Sa Dena Hess

Planning ProcessPlanning Process

BeliefsIssues

Lessons of HistoryAssumptionsExpectations

Vision &Mission

SWOTStrengths

WeaknessesOpportunities

Threats

GoalsObjectivesStrategies

VisionVision

“In one decade, Ross River will be a “In one decade, Ross River will be a healthy, unified, sustainable, community healthy, unified, sustainable, community participating actively in mining decisions, participating actively in mining decisions, and benefiting socially, economically, and and benefiting socially, economically, and culturally from environmentally sound culturally from environmentally sound miningmining--related activities in RRDC related activities in RRDC Traditional Territory.”Traditional Territory.”

Mission & SloganMission & SloganMission:Mission:To build capacity of Ross River in all To build capacity of Ross River in all appropriate respects to be able to fully appropriate respects to be able to fully participate and benefit, socially, economically participate and benefit, socially, economically and culturally from environmentally sound and culturally from environmentally sound miningmining--related activities in RRDC Traditional related activities in RRDC Traditional Territory. Territory. Slogan:Slogan: ““The test of a good project should The test of a good project should be: can we benefit from it ?”be: can we benefit from it ?”

Mining Strategy fit with RR Mining Strategy fit with RR Economic Development Economic Development StrategyStrategy

Had to be consideredHad to be consideredConsider multiple sectors, mining, Consider multiple sectors, mining, tourism, guide outfitting, forestry, tourism, guide outfitting, forestry, petroleum, utilities, etc.petroleum, utilities, etc.Not all “eggs in one basket”Not all “eggs in one basket”Consider transferable skills and Consider transferable skills and businesses to help adjust to cyclesbusinesses to help adjust to cyclesGeneric comments on Community Generic comments on Community DevelopmentDevelopment

Strategic IssuesStrategic IssuesCompiled from LOH, SWOT, etcCompiled from LOH, SWOT, etc

SocioSocio--economic Environmental economic Environmental Assessment of ProjectsAssessment of ProjectsCommunity CapacityCommunity CapacitySocial Problems (Related to Mining?)Social Problems (Related to Mining?)Community InfrastructureCommunity InfrastructureGeneral Sustainability General Sustainability

Strategic IssuesStrategic IssuesCompiled from LOH, SWOT, etcCompiled from LOH, SWOT, etc

SocioSocio--EconEcon--Environ. Assess of Projects :Environ. Assess of Projects :Ross River should be involved all the way, from day Ross River should be involved all the way, from day one, in another “Anvil”one, in another “Anvil”Need improved environmental performance and Need improved environmental performance and better reclamation planbetter reclamation planConcern of wildlife impact by mining operations or by Concern of wildlife impact by mining operations or by hauling of ore/concentrateshauling of ore/concentratesFear of major environmental damage, including Fear of major environmental damage, including chemical, fuel and concentrate spills, acid rock chemical, fuel and concentrate spills, acid rock drainage, leaking tailings ponds, etc.drainage, leaking tailings ponds, etc.

Strategic IssuesStrategic IssuesCompiled from LOH, SWOT, etcCompiled from LOH, SWOT, etc

SocioSocio--EconEcon--Environ. Assess of Projects:Environ. Assess of Projects:Premature closure and inadequately funded Premature closure and inadequately funded reclamation liabilitiesreclamation liabilitiesFailure to incorporate TEK in past permittingFailure to incorporate TEK in past permittingFirst Nation people have learned to be distrustful of First Nation people have learned to be distrustful of industry and government.industry and government.RR should be involved in YESAA implementationRR should be involved in YESAA implementation

Strategic IssuesStrategic IssuesCompiled from LOH, SWOT, etcCompiled from LOH, SWOT, etc

SocioSocio--EconEcon--Environ. Assess of Projects:Environ. Assess of Projects:The largest project risk to a community appeared to The largest project risk to a community appeared to be lack of technical capacity to fully understand the be lack of technical capacity to fully understand the project impacts and potential risks and the project impacts and potential risks and the corresponding opportunities and benefits which might corresponding opportunities and benefits which might arise.arise.The largest risk from a project component or The largest risk from a project component or company is to fail to develop a close relationship with company is to fail to develop a close relationship with the community in order to understand the community the community in order to understand the community issues and concerns and be able to properly respondissues and concerns and be able to properly respond

Goals:Goals:SEA of ProjectsSEA of Projects

RR to have a meaningful influence on project decisionRR to have a meaningful influence on project decision--making.making.RR to achieve a high level of understanding of projects RR to achieve a high level of understanding of projects and potential impacts (economic, environmental, social and potential impacts (economic, environmental, social and cultural)and cultural)Requires intimate RR involvement in environmental, Requires intimate RR involvement in environmental, cultural, heritage assessment and mapping of TEKcultural, heritage assessment and mapping of TEKRR to be involved in finalizing YESAARR to be involved in finalizing YESAARR to keep entire community and other Kaska Nations RR to keep entire community and other Kaska Nations fully informed on project statusfully informed on project statusRequires financing for RR participation in project Requires financing for RR participation in project assessmentassessment

Objectives:Objectives:SEA of ProjectsSEA of Projects

RR to develop template MOU’s and SEPA’s, RR to develop template MOU’s and SEPA’s, which are checklists of items to include in which are checklists of items to include in agreements, agreements, The sample MOU’s and SEPA’s would vary The sample MOU’s and SEPA’s would vary depending on the project stage (grassroots or depending on the project stage (grassroots or advanced)advanced)Mine developments are individually unique and Mine developments are individually unique and so SEPA’s would need to be tailored to each so SEPA’s would need to be tailored to each project.project.

Strategic Plan ProductsStrategic Plan Products

Strategic Plan ProductsStrategic Plan Products

KaskaKaska expect all Mining and Exploration projects on expect all Mining and Exploration projects on KaskaKaska Land should be subject of an MOU, at least, and Land should be subject of an MOU, at least, and also a SEPA if project advancesalso a SEPA if project advancesA Template MOU and SEPA are provided in A Template MOU and SEPA are provided in “The “The Snow that Eats the Snow”Snow that Eats the Snow” and available to all mining and available to all mining industry people who are interested in working on industry people who are interested in working on KaskaKaskaLandLandThe actual The actual MOUsMOUs and and SEPAsSEPAs would vary depending would vary depending on the project stage (grassroots or advanced)on the project stage (grassroots or advanced)Mine developments are individually unique and so Mine developments are individually unique and so SEPAsSEPAs would need to be tailored to each project.would need to be tailored to each project.

RRDC Progress on RRDC Progress on MOUsMOUs& & SEPAsSEPAs

Since 1995 have negotiated MOU Since 1995 have negotiated MOU and/or SEPA agreements with:and/or SEPA agreements with:

1.1. TeckTeck ComincoCominco2.2. Yukon ZincYukon Zinc3.3. Yukon Nevada Gold Corp.Yukon Nevada Gold Corp.4.4. True North Gems, andTrue North Gems, and5.5. ongoing discussions with:ongoing discussions with:

Selwyn Resources, North American Tungsten Selwyn Resources, North American Tungsten and othersand others

MOU & SEPA withMOU & SEPA withYukon Zinc: Yukon Zinc: TermsTerms

Pref. Hire and Contracting termsPref. Hire and Contracting termsAboriginal Liaison PersonAboriginal Liaison PersonManagement Advisory CommitteeManagement Advisory CommitteeEA process InvolvementEA process InvolvementCompany to address Company to address KaskaKaska concernsconcernsScholarships, Scholarships, EducEduc. And Training. And TrainingActive reduction of employment barriersActive reduction of employment barriersEncourage Encourage KaskaKaska business business J.V.’sJ.V.’sContract flexibility and “unbundling”Contract flexibility and “unbundling”

Signing a Resource Funding Signing a Resource Funding Agreement with Yukon Zinc Agreement with Yukon Zinc Harlan Meade Chief Jack CaesarHarlan Meade Chief Jack Caesar

MOU & SEPA withMOU & SEPA withYukon Zinc: Yukon Zinc: MonetaryMonetary

Resource access fundingResource access fundingScholarshipsScholarshipsLand Use Interruption PaymentsLand Use Interruption PaymentsEconomic Initiatives FundEconomic Initiatives FundCommunity Community DevelDevel LoanLoanProduction PaymentsProduction PaymentsOver a 10 year period could exceed $3 millionOver a 10 year period could exceed $3 million

These do not include monetary value of contracting and These do not include monetary value of contracting and employment benefitsemployment benefits

MOU & SEPA withMOU & SEPA withYukon Zinc: Yukon Zinc: BenefitsBenefits

“Mining 101” Course for 29 “Mining 101” Course for 29 KaskaKaska MembersMembersOnOn--thethe--Job Training Programs covering:Job Training Programs covering:

1.1. SafetySafety2.2. Environmental AwarenessEnvironmental Awareness3.3. Equipment OperationEquipment Operation4.4. Camp Catering & KitchenCamp Catering & Kitchen

Yukon Zinc’s Wolverine Yukon Zinc’s Wolverine Lake CampLake Camp

MOU & SEPA withMOU & SEPA withYukon Zinc: Yukon Zinc: benefitsbenefits

Arctic Construction JV: road to Wolverine ProjectArctic Construction JV: road to Wolverine ProjectTuTu LidliniLidlini Petroleum: Fuel Supply to projectPetroleum: Fuel Supply to projectDena General Store: Groceries for projectDena General Store: Groceries for projectESS Compass JV: Negotiating camp and cateringESS Compass JV: Negotiating camp and catering

KaskaKaska EmployeesEmployees10 direct employees and growing 10 direct employees and growing 77--8 contractor employees8 contractor employees

MOU & SEPA withMOU & SEPA withYukon ZincYukon Zinc

Installing a culvert, Wolverine Access RoadInstalling a culvert, Wolverine Access Road

MOU with True North Gems MOU with True North Gems on the on the TsaTsa--dagliszadaglisza ProjectProject

Similar to Yukon Zinc for hiring, Similar to Yukon Zinc for hiring, contracting, training, fees,contracting, training, fees,No production without IBA (SEPA)No production without IBA (SEPA)All permit applications to All permit applications to KaskaKaska 11stst

KaskaKaska right to inspect siteright to inspect siteName Change at Name Change at KaskaKaska requestrequestTNG to have rights to use in marketingTNG to have rights to use in marketing

Negotiating an MOU with Negotiating an MOU with True North Gems on the True North Gems on the TsaTsa--dagliszadaglisza ProjectProject

True N GemsTrue N GemsTsaTsa--DagliszaDaglisza SiteSite

MOU with Yukon NevadaMOU with Yukon NevadaGold Corp. (Gold Corp. (KetzaKetza River)River)

Similar provisions as Yukon Zinc for hiring, Similar provisions as Yukon Zinc for hiring, contracting, training, feescontracting, training, feesRFA negotiated RFA negotiated Agreement to negotiate SEPA before Agreement to negotiate SEPA before

production production -- negotiation is currently nearing negotiation is currently nearing completioncompletionKaskaKaska Benefits, 13 employees on site and Benefits, 13 employees on site and

all purchases from all purchases from TuTu LidliniLidlini Petroleum and Petroleum and Dena General StoreDena General Store

Summary of Benefits:Summary of Benefits:Direct & Indirect EmploymentDirect & Indirect Employment

TeckTeck Cominco: none current, Cominco: none current, many past (KZK, SDH, GPF4)many past (KZK, SDH, GPF4)Yukon Zinc: 15 Yukon Zinc: 15 -- 20 20 YNGC (YNGC (KetzaKetza R): 13R): 13TNG: none currently, <20 in pastTNG: none currently, <20 in pastSelwyn Res: 14 (7 RR, 7 LFN)Selwyn Res: 14 (7 RR, 7 LFN)NA Tungsten: 3NA Tungsten: 3--4 on Mac Pass4 on Mac PassOverland Res: 2Overland Res: 2--3 during summer3 during summerFaro Faro ReclamReclam: 10: 10--2020Others: 3Others: 3--66Total Total KaskaKaska: 60: 60--8080

Summary of Benefits:Summary of Benefits:Involvement in EA ProcessInvolvement in EA Process

Resources to participateResources to participateFunds to retain expertsFunds to retain expertsFunds to retain Funds to retain KaskaKaska YESAA and YESAA and

TK specialists and environ monitorsTK specialists and environ monitorsMore meaningful participationMore meaningful participationTK protocol template developedTK protocol template developedSocial and cultural issues Social and cultural issues

addressed as part of most addressed as part of most SEPAsSEPAs

Summary of Benefits: Summary of Benefits: Community Community SpinoffsSpinoffs

Larger volume purchasing of Petroleum and Larger volume purchasing of Petroleum and groceries providing lower pricing in RRgroceries providing lower pricing in RRExtra Business spurring expanded storage Extra Business spurring expanded storage and refrigeration/freezer capacityand refrigeration/freezer capacityDena Store introduced cellular phone sales Dena Store introduced cellular phone sales and service into Ross River/Faro areaand service into Ross River/Faro areaSEPA Community Development features will SEPA Community Development features will support selected RR projectssupport selected RR projectsEmployee Role Models for YouthEmployee Role Models for YouthDeveloping transferable skillsDeveloping transferable skills

Conclusions: Conclusions: RRRR Progress Community LedProgress Community Led

Chief, Council and EDO, John M Chief, Council and EDO, John M EtzelEtzel, major role, major roleRaised RR profile in Vancouver visiting Roundup and Raised RR profile in Vancouver visiting Roundup and mining mining coscos interested in RR territoryinterested in RR territoryRR Mining committee of about 20 people provided RR Mining committee of about 20 people provided much input on the strategymuch input on the strategyConsultants provided technical supportConsultants provided technical supportGovernments and Companies FundedGovernments and Companies FundedAll new All new coscos in RR talk to Johnin RR talk to JohnRR Mining Brochure helpsRR Mining Brochure helpsStill many issues to work onStill many issues to work on

MussiMussi Cho!!Cho!!Arthur John Robert EtzelArthur John Robert Etzel