It's all a 'misunderstanding,' says CEO of alleged breach of agreement with N.W.T. First Nation

The Deninu Kue First Nation says a company breached an agreement when itfailedto notify the First Nation about economic opportunities at the Nechalachomineproject near Thor Lake, N.W.T.

The First Nationmade the claim in a letter toAvalon Advanced Materials CEO Don Bubar, made public in aFacebook post on Wednesday.

The Deninu Kue First Nation found out about the alleged breach through news reports in December that Cheetah Resources awarded a mine manager contract for their work at Thor Lake to the Yellowknives Dene First Nation subsidiary company Det'on Cho Nahanni Construction Ltd.

Bubar said the entire thing is a "misunderstanding." Bubar said the First Nation is referring to a previous agreement signed for a completely different project.

"Different project. Different players. Different resources," he said.

Bubar said the 2012 agreement the First Nation is referring towas about developing a particular deposit at Thor Lake,and a hydrometallurgical processing plant at Pine Point, N.W.T., neither of which are part of current plans at Nechalacho.

Australia-based Cheetah Resources is developing a demonstration project at Nechalacho. The companyacquired ownership of near surface resources in the Thor Lake project in 2019. At the time, Avalon introduced the Deninu Kue First Nationto the new owner, said Bubar.

In the letter to Bubar,Deninu Kue First Nation Chief Louis Balsillie wrote that the company breached its agreement byfailing to notify Deninu Kue about business opportunities as part of Cheetah Resources' work at Thor Lake.

TheNechalacho projectaccommodation agreement, announced in 2012, was signed byAvalon and the Deninu Kue First Nation. Itincluded business and employment opportunities, and up to 50,000 shares in the company for the First Nation, according to a news release dated in June 2012.

CBC has not seen a copy of the agreement.

The newsrelease related to that agreement, said the agreementcommitted the First Nation to support the timely completion of the environmental assessment, and permit processes. Once Avalon got "certain" regulatory permits, the news release said the First Nation would acquire a limited partnership.

The news release does not mention Pine Point specifically, but Bubar said the accommodation agreement was about a possible processing facility at Pine Point, and the development of the "Basal Zone" at Thor Lake.

The Cheetah Resources project involves different zones.

'There is no breach'

At the time, Deninu Kue's Chief Balsillie said the agreement was a milestone.

"The business and employment opportunities, along with the education and training provisions, are essential components of this agreement," he said in the news release.

Bubar saidthe agreement with Deninu Kue is valid, but Cheetah Resources is pursuing a different project than the one outlined in the agreement.

"There is no breach of the agreement. It's a completely different project."

Building ice road, moving equipment

Cheetah Resources Managing DirectorGeoff Atkins says an ice road will be built this winter, to move equipment to the site at Thor Lake. The demonstration operation is expected to pull approximately 600,000 tonnes of rock from the ground starting this year.

Det'on Cho competed to be mine manager. It won the contract, which willcreate roughly 20 and 25 jobs with six months of employment each year for three years, according toDet'on Cho CEO Paul Gruner.

Bubar said he has reached out to lawyers for the First Nation, but did not get a response.

CBC asked Deninu Kue First Nation chief and senior administrative officer for a comment on the letter, but they did not respond to repeated requests.