God’s Lake Resources and KI First Nation in escalating impasse

Vancouver — The Ontario Government’s move to ban mining and exploration on a large swath of northern Ontario looks to have done little to diffuse tensions between the Kitchenuhmaykoosib Inninuwug (KI) First Nation and God’s Lake Resources (GLR-C).

On Sunday, March 2, the Ministry of Northern Development and Mines quietly announced a moratorium on prospecting and mining on 23,181 sq. km of KI lands sitting some 580 km north of Thunder Bay in response to KI’s demands that exploration stop on its land. The ban, however, did not cover the roughly 35 sq. km of claims held by God’s Lake.

Unsatisfied with the scope of the moratorium, and annoyed that the government did not consult with them before making the decision, the KI went ahead with a protest outside the PDAC in Toronto March 6 while KI Chief Donny Morris traveled to the claim block in question.

Known as Sherman Lake, the project area hosts some infrastructure from a short-lived gold mine that went into production in 1938, and according to the KI the area is also home to sacred burial grounds.

The KI have objected to the disturbance of sacred grounds, but God’s Lake seems determined to go ahead with its planned 3,000-metre drill program at the project following preliminary work in 2011. In a March 1 press released God’s Lake stated that it is “canvassing security companies to ensure the smooth completion of the drill program,” though The Miner was unable to reach company president and CEO Eduard Ludwig for further clarification.  

The same issues arose last year, but despite some back and forth between the two, they remained unresolved. In an October 2011 press release the company noted that the KI had refused to engage in productive dialogue, stating “KI chose to stonewall, rather than to communicate back on burial site locations, or allow any form of consultation… In the absence of any genuine reply from KI, our company made the decision to proceed with work.”

That work involved preliminary exploration on two known gold veins in the area. The company limited work to 16 leased claims that it secured in 2009 for 300,000 shares valued at 10¢, though last year it added 184 claims to its holdings for $76,300.

Vein 1 is hosted by sheared diorite with numerous parallel zones of silicification and sulphide mineralization, with the vein averaging 1 metre in width and traced on surface through old pits, trenches and drill holes for 150 metres. Drilling by Inco in the late 1980s returned 1.4 metre grading 4.9 grams gold per tonne and 2.2 metres averaging 4 grams gold along with numerous 1-2 metre widths grading 1 to 2 grams gold.

Vein 2 was the focus of the Sachigo River Mine, which produced 52,560 oz. gold between 1938 and 1942. While prospecting around the vein, God’s Lake discovered a new vein 100 metres southwest, with a composite grab sample returning 79.87 grams gold. Sampling in the region also identified 5 potential drill targets between 200 metres and 300 metres southeast of the old mine workings.

It is still not clear whether God’s Lake will actually perform any work at Sherman Lake, with Chief Donny Morris now on site at the project getting ready for the company to arrive and challenging Ontario Minister of Northern Development and Mines Rick Bartolucci to sit down and start negotiations.  

It would not be the first time the KI blocked an exploration company. Chief Morris and five others were arrested and sent to jail in 2008 for blocking Platinex (PTX-V) from exploring in the region. That dispute ended in the Ontario Government paying Platinex $5 million to relinquish its claims in the area.

As of September 30 God’s Lake had 8.7 million shares outstanding and $127,000 in cash. The barely-traded CNSX-listed company recently closed at 75¢.