Things are looking less than golden for Australia’s St Barbara Ltd, but rather than accept responsibility, board chair Tim Netscher is pointing the finger at First Nations, Canadian regulators, and COVID-19 for the company’s woes.
Those woes are not small ones.
On Wednesday, St Barbara reported an annual net loss of over $144 million, largely because of its assets in Nova Scotia, and following that announcement, its share value dropped 70%.
Reporting on the company’s dismal performance, The Australian Financial Review resources reporter Peter Ker wrote that a “black cat” seemed to have crossed St Barbara’s path after the company decided to spend a small fortune — $722 million — to buy Atlantic Gold in 2019.
At that time, Atlantic Gold, a company headquartered in Vancouver but with Australian roots, had just one operating mine — the Touquoy open pit gold mine in Moose River, Nova Scotia.
Related: The $722 million deal. Australian company is buying the Vancouver company that owns Nova Scotia’s largest gold mining operation: What’s in it for us?
However, Atlantic Gold, under its then CEO Steven Dean, had plans for three more satellite mines on the province’s Eastern Shore — at Beaver Dam, Fifteen Mile Stream, and Cochrane Hill, on the banks of the St. Mary’s River near Sherbrooke. The idea was to truck the crushed ore from those mines over public and private roads back to Moose River for gold extraction.
This ambitious plan, which Atlantic Gold called the “Moose River Consolidated Project,” was seen as such a big achievement in the glittering world of gold mining that its developers won the Viola R. MacMillan award for “leadership in management and financing for the exploration and development of mineral resources”at the 2020 Prospectors and Developers Association of Canada (PDAC) convention in Toronto.
One of the award winners, Atlantic Gold’s CEO Steven Dean, joined the board of St Barbara after the acquisition, and stayed there until things started to really go south for the company this year. Dean resigned from the St Barbara board in June 2022.
Related: Atlantic Gold’s parent company hints it may halt its Nova Scotia operation. After St Barbara Ltd issued a statement falsely blaming the province for permitting delays, its stock price fell by 14%.
Writing about the Atlantic Gold purchase and St Barbara’s falling fortunes, Peter Ker noted that the three additional mines planned for Nova Scotia were supposed to have become operational in 2023, “to create a province that was bigger than the sum of its parts.” Whatever that means.
Today, the Beaver Dam and Fifteen Mile Stream projects are still undergoing joint federal and provincial impact assessments by the Impact Assessment Agency of Canada (IAAC). As the Halifax Examiner reported here, the IAAC recently granted St Barbara subsidiary Atlantic Mining Nova Scotia three-year extensions on both assessments.
The impact assessment for the third proposed mine project, the controversial Cochrane Hill mine that would infringe on a proposed protected wilderness area at Archibald Lake, has now been terminated.
St Barbara did not provide the Impact Assessment Agency with the requisite information and studies before the deadline of August 28, 2022, so the IAAC terminated the process, informing the company that if it wished to proceed with the mine project, it would need to its submit registration under the more stringent 2019 Impact Assessment Act, rather than the less comprehensive 2012 Canadian Environmental Assessment Act, passed by the Conservative government of Stephen Harper.
Ker captured the plight of St Barbara operations in Nova Scotia this way:
St Barbara originally expected to have three mines operating in Nova Scotia by 2022 delivering about 174,000 ounces of gold; instead it had one mine producing 61,000 ounces.
St Barbara originally expected the Nova Scotia division would be delivering 231,000 ounces of gold in 2023. But on Wednesday the company said Nova Scotia would do no better than 50,000 ounces in the year ahead, a decline of at least 15 per cent on last year.
First Nations ‘relations’ and ‘bad luck’ to blame
Ker also noted that four members of the St Barbara board were “present” when the Atlantic Gold acquisition was approved, and that “the board appears to be convinced the company did not make an error” in doing do.
Rather, according to Ker, board chair Netscher said the permitting problems for the Nova Scotia mines had to do with “relations with First Nations people” and “bad luck relating to the timing of the pandemic.”
Netscher told The Australian Financial Review that COVID-19 “constrained” the company’s “ability to engage with First Nations and government in Canada for a period of about 18 months, which significantly delayed the permitting process.”
Netscher also boasted about the “recent success” St Barbara CEO Craig Jetson has had with “permitting at the federal and provincial level” in Canada, which he said should boost board confidence in its ownership of Atlantic Gold.
Related: Canadian regulators giving Australia’s St Barbara what it wants. First the province approved changes to the tailings facility at the company’s Moose River gold mine. Now the federal government has given in to its request for a three-year extension on the environmental assessments for two open pit gold mines it plans for eastern Nova Scotia.
Related: Millbrook First Nation to Atlantic Gold and government regulators: “We oppose the Beaver Dam mine project”
Those claims from the St Barbara board chair that its problems can be blamed on a lack of engagement with First Nations and regulators caused by COVID-19 warrant a good deal of scrutiny and a healthy dose of skepticism.
The simple fact is that Millbrook First Nation has said, repeatedly, that it opposes the proposed mine at Beaver Dam, close to two reserves where its members live, hunt, and fish.
The failure to gain their support for the project was not from any lack of being able to engage with Millbrook First Nation to convince them otherwise during the COVID-19 pandemic.
Impacts on local Mi’kmaq ‘severe’
In November 2021, the Halifax Examiner reported on the Millbrook First Nation opposition to the mine, and quoted extensively from a powerful June 8, 2021 letter that Millbrook First Nation Chief Robert Gloade and 11 Band councillors wrote to Atlantic Gold:
Over the past 6 years, the Atlantic Gold Corporation has been consulting with the Mi’kmaq of Nova Scotia to fulfil the Crown’s duty to consult. Our Community, Millbrook First Nation, has been heavily involved, even taking the lead on the Beaver Dam mine file due to its proximity to Beaver Lake I.R. [Indian Reserve] #17.
Through the consultation process Millbrook has taken the approach of engaging its membership to document concerns and quantify impacts. We have held information sessions, completed a Traditional Land and Resource Use Study (TLRUS) and most recently finalized a Community Consultation Report to gather opinions regarding the company’s proposed mitigations. In addition to the community-level work, we contracted a scientific review of the Environmental Impact Statement (EIS), conducted by Management and Solutions in Environmental Science (MSES). Each of these studies came to the same conclusions – (1) the extent of the impacts on the local Mi’kmaq is severe and (2) our membership does not support the project, because they fear for their health, their livelihoods and their way of life. It is because of the conclusions of these works that we, Millbrook First Nation, do not support the proposed Beaver Dam mine site. [emphasis in the original letter]
We have the fiduciary responsibility to act on behalf of our constituents. They have made it quite clear that they do not want the mine project to be approved and they want Millbrook Chief and Council to voice their opposition. The specific reasons are well documented in the reports noted above and will be further examined in our upcoming Health and Wellness study, which will be conducted as part of the consultation process.
We understand that a great deal of monitoring and modelling work has been completed in preparation of the EIS, but we are not convinced that the mine will not pose major health and environmental issues. We cite the malfunction that occurred during the early stages of Touquoy’s operation, as well as the 32 Provincial environmental charges brought before the Courts this past spring. This shows a poor established track record on behalf of the Proponent. This does not instill any faith in the proposed Beaver Dam mine site.
We also understand that the nature of Crown consultation does not afford a “veto card” to the Indigenous peoples of Canada, however we hope that the Impact Assessment Agency of Canada (IAAC) acknowledges that they have the ability to exercise discretion when it comes to the decision to approve the project. We are making short term decisions with long term consequences. IAAC has been presented with evidence that the Mi’kmaq will bear the brunt of the adversity brought about by the development of an open pit gold mine and its infrastructure.
In her June 2022 submission to IAAC requesting an extension for the impact assessment for the Beaver Dam project, Sara Wallace of Atlantic Mining Nova Scotia, the subsidiary of St Barbara that operates the Moose River mine, lists 18 interactions with Millbrook First Nation in 2021 and 2022.
And then Wallace notes that, on May 24, 2022:
Millbrook First Nation provided a letter to AMNS [Atlantic Mining NS] to state the newly formed Millbrook Chief and Council opposes the proposed Project.
It looks as if St Barbara just doesn’t seem to know that no means no.
There is certainly no shortage of opposition to the gold mines, as the Examiner reported here, here, and here.
All three proposed mines are on important waterways, which are part of biodiverse and valuable watersheds on the Eastern Shore, including crucial Atlantic salmon habitat.
In a submission to the IAAC, the Nova Scotia Salmon Association wrote of the Beaver Dam and Cochrane Hill mine projects, “We cannot imagine two locations less suited for extractive projects such as gold mining.”
Nor has it helped Atlantic Gold’s cause that in February this year, the company was sentenced to $250,000 in fines and penalties after pleading guilty to federal and provincial environmental charges in a Nova Scotia court.
‘String of pearls’ in ‘backyard Canada’
At the 2018 PDAC, in an interview with BNN’s Andrew Bell, Steven Dean bragged about the low cost of producing gold in Nova Scotia, and said Atlantic Gold had a “great relationship” with the Mi’kmaq, and played up the mine’s profitability and the advantages of gold mining Nova Scotia.
Atlantic Gold once described its expanded plans for three new mines in eastern Nova Scotia as its “string of pearls” and in a 2018 presentation, described the region as “backyard Canada.”
Perhaps St Barbara should have taken a closer look at those “pearls,” and how people in “backyard Canada” would feel about open pit gold mines on their waterways and hunting grounds, before they forked over all those hundreds of millions to buy Atlantic Gold.
But it seems they would rather point fingers at Nova Scotia rather than admit that their problems are largely self-inflicted.
If, that is, they are willing to admit they have problems.
‘A small victory’ for the community
It isn’t obvious that Tim Netscher recognizes the problems with the Nova Scotia mine projects, or the extent of the opposition from Millbrook First Nation and local groups such as NOPE (No Open Pit Excavation), the Nova Scotia Salmon Association, Sustainable Northern Nova Scotia (SuNNS), the Eastern Shore Forest Watch Association, and many others.
According to Peter Ker, earlier this month Netscher told The Australian Financial Review, that “The board remains convinced that Atlantic was an investment that was in the best interest of the shareholders and that it will generate meaningful and differentiating returns.”
But that would mean that both impact assessments for the Beaver Dam and Fifteen Mile Stream projects would have to get environmental approval before the gold runs out at Touquoy.
And now that the IAAC has terminated the impact assessment for the Cochrane Hill mine, it means that if the company wants to go ahead with that project, it would need to start the whole impact assessment process all over again, this time under the more stringent 2019 Impact Assessment Act.
Ray Plourde, senior wilderness coordinator for the Ecology Action Centre, sees the termination of the impact assessment for Cochrane hills as “a small victory for the community and a reprieve for the St. Mary’s River.”
Plourde also sees it as an opportunity, because there is legally no longer an actual mining project application on the regulatory books.
“And that means there’s no longer any reason for the provincial government to hesitate or further delay the long-awaited designation of Archibald Lake as a protected provincial Wilderness Area,” he tells the Examiner.
The mining company’s project proposal included siphoning out huge volumes of water from the Archibald Lake for their mining operations, something that would dramatically negatively impact the ecosystem. It was always an audacious expectation but then gold mining companies are nothing if not bold and presumptive with our lands and waters for their benefit.
Now that the application is dead, the area can now be protected without complication. The Houston government should now move quickly and decisively to put their money where their mouth is in terms of their nature conservation commitments and finally and firmly protect the Archibald Lake area and its important ecosystem from the clear threat of industrial extraction.
Without that, Plourde says, “The threat of a giant open-pit mine looming over the St. Mary’s River someday is still very real.”
Showing once again that all that glitters is not gold….Best news we’ve seen in a while…