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Investing in the Past, Present, and Future

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Global Mining Review,

The modern mining industry and the world’s indigenous people have not always had a positive shared history. In North America, colonisation meant that settlers took for themselves land and its riches that had for millennia sustained indigenous people. Entire civilisations were decimated while resources were plundered with no thought for the future. As the industry has grown wiser, participants have begun to understand the integral relationship between indigenous people and the land, recognising that past practices are not compatible with future progress.

An accurate landscape

Being good corporate citizens and accountable individuals comes with the responsibility to ethically manage mineral extraction processes. An integral part of this is ensuring that everyone has an accurate understanding of the land on which their work is taking place. This understanding cannot simply be of the physical environment, via assays and test drilling – rather, it must include a clear picture of the communities and stakeholders who live on or near the land, and who are invested in mining operations in more than just a financial sense. In North America, these stakeholders are often indigenous people.

For any endeavour to succeed, it must first have strong partnerships: the balance of power must be clear, and each party must know where they stand. In mining, the operators – usually mining companies – have historically tended to have more power, the invested community and those directly impacted by their operations, less, as demonstrated by myriad case studies from the past of rights violations and lack of consultation. Today, however, the world has shifted, and most countries require mining companies to engage with local communities well before ground is broken or even acquired. Most modern mining companies welcome these regulations; rather than seeing them as a burden, they are understood as a way to begin rectifying old wrongs and providing a framework for engagement. But this is just the beginning; simply ‘ticking the boxes’ is not enough.

A new kind of partnership

In the summer of 2018, Tectonic Metals Inc. partnered with Doyon, Ltd, a native regional corporation incorporated in 1972, pursuant to the Alaska Native Claims Settlement Act (NCSA). Under the terms of the NCSA, Doyon was allocated 12.5 million acres, making it the largest private landowner in Alaska, US, and one of the largest in North America. The company, headquartered in Fairbanks, is now a for-profit corporation with more than 20 000 shareholders.

The land of the Doyon is rich in minerals including placer gold deposits, precious and base metal prospects. A large percentage of the Athabascan people of Alaska live in rural villages within the Doyon region and maintain a traditional subsistence lifestyle, which depends on hunting, fishing, and trapping. Most of these individuals are also shareholders of Doyon.

Under the terms of their 2018 agreement, Tectonic was granted exclusive rights to explore, develop and mine all minerals, ores and mineral products extracted from Tectonic’s Seventymile and Northway Projects, which are situated on Doyon land. Tectonic and Doyon are forging a new pathway by forming a mutually beneficial mineral lease property agreement that has raised the standard of native-corporate partnerships. The landmark property agreement covers non-traditional items such as mandated regular communication, transparency and engagement with Doyon, local villages and citizens on a regular basis, preferential contract and hiring clauses for local indigenous citizens and businesses, scholarship contributions to non-profit foundations, archaeological and cultural resource studies.

In 2020, the two organisations subsequently deepened their partnership, with Tectonic inviting Doyon to become a large shareholder in Tectonic via a strategic equity investment. Doyon subscribed 10.47 million of Tectonic units for a subscription price of 20 cents per unit. Each unit comprises one common share and one-half share purchase warrant exercisable at 40 cents which will expire 17 April 2022. Doyon is now Tectonic’s largest, single shareholder with a 16.5% undiluted ownership and a 22.3% ownership on a partially diluted basis. Doyon’s roughly US$1.5 million investment strengthens its partnership with Tectonic and provides capital during the COVID-19 outbreak, a global social and economic upheaval that has created turmoil for junior mining explorers and virtually every other publicly listed company.

The second part of this article is available here.

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