Solid Gold Resources Corp.
TSX VENTURE : SLD

Solid Gold Resources Corp.

July 18, 2012 11:40 ET

Ontario Shuts Down Mining

TORONTO, ONTARIO--(Marketwire - July 18, 2012) - Solid Gold Resources Corp. ("Solid Gold") (TSX VENTURE:SLD)

Mission: Regional Gold Exploration at Lake Abitibi, Ontario, Canada

"Certainty of title and access to Crown land is paramount to our industry, but only the Crown can provide the certainty required to secure major investment to develop projects like the potential new gold camp at Lake Abitibi, Ontario", states Darryl Stretch, President of Solid Gold. "No obstacle should stand in the way because, like the Ring of Fire, the Solid Gold project may be a once-in-a-century economic opportunity to the benefit of all Canadians."

The Government of Ontario (the "Crown") distributed a draft set of guidelines for its Ministries to properly consult and accommodate aboriginals where required.

A rising gold price, an unequivocal ruling from the Supreme Court of Canada (Haida) confirming that third parties have no duty to consult First Nations, and encouragement from the Crown formed the basis for Solid Gold's decision to conduct a regional exploration program at Lake Abitibi, Ontario, Canada.

Over several staking campaigns, beginning in the fall of 2007 through the summer of 2010, Solid Gold acquired mineral rights to a 200-square-kilometer property on Crown land at Lake Abitibi (the "Property"). The Property hosts a largely untested 15 km strike of the north branch of the famous Porcupine Fault zone. Mineralized bedrock over the region is mostly obscured by a layer of overburden that precludes use of conventional exploration methods to target the geology. To overcome this, Solid Gold followed up on historical exploration initiatives in the region by conducting expensive high-resolution airborne surveys to accurately map the potential gold-bearing geology hidden from early explorers.

Owing to significant investment, data acquisition, compilation, analysis and good luck, Solid Gold's phase one drill-testing program delivered a high-grade gold discovery (previously disclosed on May 17, 2011). Even more important, the program established that at least three separate mineralizing systems are present on the Property. Results of early drilling suggest there is potential for discovery of multiple deposits all along trend. As a result, Solid Gold identified further funding to finance a more aggressive exploration and a follow-up drill program.

Unfortunately, however, sampling and analysis from the follow-up program has yet to be completed because in November 2011 Solid Gold found itself in the middle of a conflict between First Nations and the Crown respecting asserted aboriginal rights over the region, including the Property. The planned financing was lost.

In the absence of any legal requirement, Solid Gold attended a meeting initiated by the Crown on November 4, 2011 billed as a friendly get-to-know-your-neighbour kind of meeting. From the start, Wahgoshig First Nation ("WFN") demanded that all exploration stop until Solid Gold conducted a $100,000 archeological survey to the satisfaction of WFN. When Solid Gold advised that it had no budget for such a survey, the Chief of WFN threatened litigation and stormed out of the meeting. Shortly thereafter, WFN filed a motion and, as a result, on January 3, 2012, the Ontario Superior Court ordered that Solid Gold stop all further mineral exploration on the Property for 120 days.

At the hearing the Crown admitted that it had a duty to consult "that was not met". The Crown argued that it had delegated its constitutional duty to Solid Gold in July of 2009. However, the Crown cannot delegate to the public in the absence of statute, regulation or contract. Notwithstanding, the Crown, WFN and Solid Gold were ordered by the Court to enter into a process of consultation and accommodation for a 120-day period (the "Injunction").

Experts agree that the Injunction decision effectively confers a duty to consult on the public, an outcome they say flies in the face of case law. The Supreme Court of Canada concludes that the Crown's duty to consult does not extend to third parties.

"This case represents the reality that there is still confusion as to whose duty it is to consult, and what exactly the Crown can delegate", Sandra Gogal, Partner at Miller Thomson LLP, has been quoted as saying in reference to the Injunction.

There is no express or implied statutory authority requiring third-party proponents to engage in consultation with First Nations.

Robert Merwin, the director of the Ontario Ministry of Northern Development and Mines' mining act modernization secretariat, said "new regulations were initially scheduled to be implemented in June 2012, but that date has been pushed back until autumn, at the earliest". "We want to take the time to get it right" he said.

Get it right? The Crown has been trying to download its duty onto the public, in the absence of any statute, regulation or policy, for at least the last six years.

The Ontario Bar Association is one of many calling on the Crown to provide greater clarity on who must do what in the area of aboriginal consultation. "Clarifying the requirements for proponents, the role of government and the rights of stakeholders, including aboriginal groups, is increasingly crucial if Ontario is to be home to a responsible, stable and efficient mining sector that successfully competes for investment money and jobs."

The duty to consult First Nations is borne from the honour of the Crown. In this case, a start-up junior public company and its resource exploration investors, with no capacity and no resources, are unfairly singled out to uphold and pay for the honour of the Crown. Worse, this has effectively handed First Nations veto over Crown land and the ability to make unlawful demands.

We are not archeologists, lawyers, native historians or constitutional scholars. We are prospectors and shareholders who have invested in Ontario and have been denied the right to access mineral claims located on Crown land for which Solid Gold has been granted mineral rights and paid millions of dollars to maintain in good standing.

The conflict has created great stress, organizational, financial and a personal hardship for Solid Gold, its shareholders and everyone else involved.

Solid Gold is not alone. There are many others too scared to speak up for fear of retribution. Let's talk about the negative effect that uncertainty has on Canada's resource-based economy, both short and long-term, and what impact it will soon have on ordinary citizens.

It is unconscionable that the Crown continues in its attempt to delegate its constitutional duty onto industry in the absence of any obligatory law, policy, regulation or guidelines.

The Crown is also discriminatory in its inaction and approach (read courting Cliffs) while trampling the rights of junior public companies and other defenceless minnows. The rule of law is at the heart of our society and without it there can be neither peace nor order nor good government (McLachlin J.)

A Leave to Appeal motion brought by Solid Gold was heard on February 11, 2012, seeking consent to Appeal the Injunction, but five months later a decision has still not been published. An Appeal hearing is required to decide if the lower Court erred in granting the Injunction and ordering Solid Gold to consult with WFN. We hope the Court eventually explains the reason for punitive delay.

All these things taken together creates many impossible challenges and negatively affects stability and predictability for industry and the economy. It is obvious by looking at the Solid Gold stock price that investors are not interested in financing consultation or the resulting protracted litigation delays and cost of the Crown's failing. Nevertheless, Solid Gold has cooperated in every way to comply with the Court order including disclosure of sensitive operational information.

Ontario states that it "does not require proponents to enter written arrangements with Aboriginal communities", so we fail to understand then why the Crown makes offers of accommodation to WFN conditional on Solid Gold agreeing to enter in an agreement with WFN to obtain consent to access its mineral claims.

This kind of coercion will do nothing to provide certainty for mineral rights and access and results de facto veto power to First Nations while denying the public access to Crown land. Plainly, any consultation and accommodation required should have been completed by the Crown long before the mineral claims were granted to Solid Gold and at a minimum before the Court ordered the Injunction.

It is improper for the Crown to be adversarial to its resource industrial base while attempting to minimize its own liability through all means fair or foul.

Solid Gold has respected fully the Court order. With the assistance and generosity of our legal counsel, Solid Gold has been fully engaged in the process. Indeed, it is Solid Gold that has taken the lead in many ways and our counsel has done everything it can to facilitate meaningful consultation. A Motion, brought by the WFN, to extend the Injunction has been adjourned generally.

We now call upon the Crown to do the right thing. It is for the Crown to declare to the Court that it has met its constitutional duty to consult and accommodate WFN, so that Solid Gold can access all of its mineral claims and proceed with further exploration. We ask that this be done within 30 days, failing which the Crown should be ordered by the Court to erect a "Closed for Business" sign at the provincial border on day 31.

The information in this news release includes certain information and statements about management's view of future events, expectations, plans and prospects that constitute forward looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties. Because of these risks and uncertainties and as a result of a variety of factors, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by these forward looking statements. Although Solid Gold believes that the expectations reflected in forward looking statements are reasonable, it can give no assurances that the expectations of any forward looking statements will prove to be correct. Except as required by law, Solid Gold disclaims any intention and assumes no obligation to update or revise any forward looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward looking statements or otherwise.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information