Yukon First Nations appeal BMC’s Kudz Ze Kayah project in court

The decision to approve BMC Minerals’ Kudz Ze Kayah (KZK) polymetallic mine for permitting in the Yukon is being challenged again by Indigenous groups claiming they weren’t property consulted on the project, the CBC reported.

An appeal hearing was held in Yukon last week, with lawyers representing the Kaska Nation, whose traditional territory hosts the KZK project, seeking to overturn a Supreme Court judge’s decision earlier this year largely in favour of the proposed mine.

Among the arguments, CBC reported, was the lack of consultation on the project’s economic feasibility, which the court ruled wasn’t a factor that could be considered under the Yukon Environmental and Socio-economic Assessment Act.

The Kaska lawyers also contested the court’s ruling that the First Nation had not met its “reciprocal duty” and “frustrated” the consultation process by not replying to correspondence or agreeing to meetings in a timely manner.

The hearing comes six months after a decision from a government body appeared to resolve the dispute between BMC and Kaska, and clear a path towards permitting. That decision was the result of consultations between the Yukon and federal governments, the Ross River Dena Council (RRDC), Liard First Nation (LFN) and community members. The RRDC represents the Kaska Nation. The KZK project has faced delays related to disputes with First Nations for more than a year. 

Lawyers for the Kaska also challenged a decision submitted by the RRDC and LFN that outlined several environmental concerns in a letter on June 14, just a day before the project was cleared for the regulatory stage back in 2022. A legal petition was later filed for a judicial review.

In January 2024, the Yukon Supreme Court Chief ruled that the Crown bodies had largely met their duty to consult, except for the June 14 letter. As a result, it ordered Canada and the Yukon to set up a consultation meeting, which had been completed, leading to a re-issuance of the decision in favor of the project this year.

‘Too many restrictions’

The Kaska representatives argued that this consultation came with too many restrictions, including when it would happen, how long it could happen for and what documents could be exchanged, CBC reported.

Lawyers representing the Canadian and Yukon governments, however, both said that the ruling contained no errors, and that the Kaska Nation was seeking outcomes outside the scope of consultation.

Marlaine Anderson-Lindsay, the lawyer for Canada’s attorney general, said the Crown’s decision-making bodies “examined the project’s economic feasibility and addressed potential financial concerns during initial consultation phases.”

The lawyer representing BMC Minerals also argued that the Kaska “had failed to make a connection between economic feasibility and its impact on Aboriginal rights, which they argued is ultimately what consultation is about.”

Meanwhile, BMC, owned by U.K. firm BMC Ltd., is continuing its work to secure water and mining permits after receiving documents from government authorities following the consultation meeting that confirmed re-approval of the KZK project under new conditions.

According to a 2020 feasibility study, KZK has an after-tax net present value (at a 7% discount rate) of US$617 million, and an internal rate of return of 45.9%. The mine would produce 7.8 million oz. of silver, 56,500 oz. of gold, 235 million lb. of zinc, 32 million lb. of copper and 56 million lb. of lead in concentrate annually during steady-state operations.