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First Nation Sues McEwen Mining Over Alleged Breach of Impact Benefit Agreement

by admin February 26, 2025
February 26, 2025
First Nation Sues McEwen Mining Over Alleged Breach of Impact Benefit Agreement

The Apitipi Anicinapek Nation (AAN) has filed a lawsuit against McEwen Mining (TSX:MUX,NYSE:MUX), alleging the company has breached an impact benefit agreement (IBA) by failing to deliver nearly US$1 million in shares.

The dispute stems from an IBA signed in 2011 between AAN and Brigus Gold, the former owner of the Black Fox mining complex, which is located in Northern Ontario.

IBAs are legally binding agreements that outline financial compensation and other benefits for Indigenous communities affected by resource development projects. Under the agreement, AAN was to receive 25,000 shares of Brigus annually.

However, the complex has changed ownership multiple times over the past decade, first being acquired by Primero Mining in 2013 before McEwen Mining took over in 2017. AAN says the stock payments ceased long before McEwen’s acquisition, but that the current owner is still responsible for fulfilling the agreement’s obligations.

“We are not against mining development. It’s helped advance our community and supported different programs,” said Lance Black, AAN’s director of negotiations, in a Monday (February 24) CBC article.

“How can the company not honour the longstanding agreement with the nearby First Nation?” he added.

AAN claims that after reviewing financial records in 2022, it found it had not received the promised shares for years.

The First Nation estimates that nearly US$1 million worth of shares are owed, including shares dating back to the Primero ownership period. Attempts to negotiate with McEwen Mining have reportedly failed, prompting the lawsuit.

In a statement, McEwen Mining denied responsibility for the unpaid shares, arguing that Brigus ceased to exist after its acquisition by Primero, making it unclear whether Brigus and McEwen shares are interchangeable on a “1-to-1 basis.”

The company also maintained that it is not responsible for shares that were not delivered by the previous owner.

McEwen Mining said it has offered AAN 15,000 shares to cover the period from 2018 to 2023 as a resolution to the dispute, but the First Nation rejected this proposal, arguing it is insufficient.

The company also notes that it has provided approximately C$20 million in “direct and indirect benefits” to AAN since 2017, though it did not specify the breakdown of these contributions.

Despite the lawsuit, McEwen Mining has expressed willingness to engage in further discussions.

“We remain open to constructive dialogue with AAN on this issue, and we hope to reach an amicable resolution,” the company states in a press release shared with investors on February 21.

Along with the share dispute, the lawsuit also alleges that McEwen Mining has allowed waste materials from the Black Fox mining complex to seep into a nearby creek, raising concerns about environmental contamination.

McEwen has also denied these allegations, maintaining that it operates in full compliance with environmental regulations and that its tailings facility is subject to frequent inspections by the Ontario Ministry of Environment, Conservation and Parks, as well as other regulatory bodies at both the federal and provincial level.

“We continue to take appropriate steps to protect the environment and comply with laws. We do not believe there is cause for concern about harm to the environment or the public from the operation of the tailings facility,” the firm said.

For now, AAN remains firm in its stance, insisting that McEwen Mining uphold the agreement made over a decade ago.

The case is expected to proceed through the Ontario courts, with further developments likely in the coming months.

Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com

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