Sisson mine approval triggers $3M bonus for 6 Maliseet First Nations

The proposed Sisson tungsten and molybdenum mine near Stanley received federalenvironmental approval last week, but has triggered a $3-million bonusthe province agreed to pay to six Maliseet First Nationseven if themine wasnever built.

When CBC News asked whether the $3-million bonuswas due with the federal environmental approval, a spokesman for the Department of Energy and Resource Development replied with a one-word email.

"Yes."

• Sisson mine gets federal approval, but environmental transparency questioned

The payment is part of a package of incentives the province negotiated withthe First Nations communities of Oromocto, Kingsclear, St. Mary's, Woodstock Tobiqueand Madawaska.

Incentives in the financial package, which were announced by Premier Brian Gallant in February,include a sharing of mineral royalties with the communities and the purchase of replacement lands if the project ever operates.

But whether it operates or not, the province also agreed to pay $3 million to the six First Nations, if the project managed to win federal environmental approval.

Project received opposition

The mine's proposed location is in traditional Maliseet territory and last year, five Maliseetchiefs expressed opposition to the project.

"This is not an appropriate project for Maliseet territory and we urge Canada to reject it," said Tobique Chief Ross Perley, in a statement on behalf of the five First Nations communities, about14 months ago.

It became clear federal environmental approval for the development was going to be difficult, if not impossible to obtain with that level of opposition.Thisled the province to develop a package of incentives to win the communities over.

The federal environmental assessment ultimately found the mine would likely"cause significant adverse environmental effects on the current use of lands and resources for traditional purposes by Maliseet First Nations," but approved it anyway in part because official oppositionby those communities has melted away.

Project in limbo

On Fridayfederal and provincial politicians both expressed confidence the mine will now proceed.

Federal Fisheries Minister Dominic LeBlancsaidhe expectsconstruction to begin next spring.

However, the company behind the mine proposal, Northcliff Resources Ltd., has consistently warned that may not happen.

The world price of both tungsten and molybdenum collapsed in 2015 and they remain well below levels needed to make the Sisson development profitable, according to its own feasibility study.

In regulatory filings required of publicly traded companies this January,Northcliff's management explicitlywarned continuing low metal prices could kill the project.

"If prices for tungsten and molybdenum decline or remain at current levels,Northcliff may not be able to raise the additional financing required to fund expenditures for the Sisson project," the company wrote as part of a comprehensive 55-page disclosure.

In its latest regulatory filing two weeks ago, the company said nothing had changed in the risks facing the project since its January filing.

But none of that affects the $3 million now owed to the six Maliseet First Nations. That was tied exclusively to federal environmental approval and is due now whether the mine proceeds or not.