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| OVERVIEW: | |
The Prairie Creek Development Co-operation Agreement (the "Agreement") was signed in December 1996 by San Andreas Resources and the Nahanni Butte Dene Band ("Nahanni"), a deal which represents an important landmark in advancing the Prairie Creek mine (the "Project") towards production. Situated approximately 90 km by air south-east of the Prairie Creek property, Nahanni Butte is part of the Deh Cho First Nations territory which covers a large portion of the south-west part of the Northwest Territories stretching from the Yukon border eastward to Hay River, a distance of over 600 km. |
 Past Chairman Tony Millar and Chief Leon Konisenta at the historic signing. |
| The objective of the Agreement was
threefold: firstly, to adopt a cooperative environmental approach to the
Project between the company and the First Nation, secondly to achieve a
solid level of support for the Project within the Deh Cho Region that
would help to secure support on infrastructure funding from various levels
of government, and thirdly to achieve certainty on title in an area where
land claims and jurisdictional issues remain unresolved between the First
Nations of the region and the Federal Government. The provisions contained
within the Agreement will result in major economic benefits being realized
not only in Nahanni Butte but also throughout the Deh Cho Region in terms
of employment and contracting opportunities. Through the signing of the Agreement and subsequent active participation on the Project Management Committee, Nahanni has evidenced its full support and backing of the Project. Nahanni is committed to assisting San Andreas in the development of an environmentally sound and commercially viable Project. Both Nahanni and San Andreas recognize that a partnership approach to resource development will lead to substantive benefits for both parties and to the Deh Cho Region as a whole. |
| PROJECT MANAGEMENT |
| Both San Andreas and Nahanni have agreed
that representation by Nahanni on the Project Management Committee is an
essential mechanism for ensuring that communication is maximized between
them with respect to the Project and the Agreement. The Project Management
Committee, which is responsible for all major decisions on the Project,
meets quarterly throughout the year and on a more regular basis if
necessary. (menu) |
| LAND USE AND ENVIRONMENT | |
| The issues surrounding development with regard to land use and environment are critical issues for Nahanni Butte Dene Band. Nahanni Butte is supportive of environmentally sound resource development within its traditional lands. Nahanni has ensured through the terms of the agreement that it has full input and review capabilities on the environmental aspects of the Project. | |
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A cooperative environmental agreement process will be established |
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The First Nation will assemble and provide assistance with the analysis of traditional knowledge as it pertains to the Project. |
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An Environmental Officer will be appointed by Nahanni who will meet with the officials of the Project as environmental issues are identified and addressed. |
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Nahanni will review all environmental data as it pertains to the Project and provide objective and substantive assistance and feedback to officials of the Project in advance of the formal environmental review process. |
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Nahanni will provide maximum assistance and support in the securing of infrastructure funding from various levels of government. |
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Nahanni will provide an easement for the access connecting the Project and the Liard Highway. |
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Nahanni will provide quiet enjoyment of the Project and the access. |
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Upon commencement of the construction of the access, the Project will contribute $25,000 per year to a Trust Fund to provide compensation to traditional harvesters who are negatively affected by the Project and the access. |
| (menu) | |
| SOCIAL CONCERNS AND EDUCATION | |
| Both Nahanni and San Andreas share a desire for a local, stable and educated labour pool. | |
| Following the commencement of commercial production, the Project and Nahanni will fund equally between them: | |
| 1. | The establishment of The Prairie Creek Education Centre in Nahanni Butte. This centre will focus on adult literacy programming and special needs education for children in Nahanni Butte. The costs involved will include capital contributions of up to $150,000 and annual operating contributions of up to $50,000. |
| 2. | A Scholarship Trust Fund will be set up
to assist students from Nahanni to progress to higher education. This fund
will commence with contributions of $20,000 per year initially, increasing
to $30,000 per year. (menu) |
| EMPLOYMENT AND TRAINING | |
| San Andreas and Nahanni share a common goal and intent to maximize local and regional employment at the Project whenever possible, subject to skills and suitability. | |
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A MINIMUM target for Deh Cho First Nations employment will be 20% of the total workforce at the Project and this percentage will include no less than forty Deh Cho First Nations or other Aboriginal peoples. |
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A Regional Employment and Training Liaison Officer will be appointed by the First Nation to coordinate employment and training opportunities throughout the Deh Cho Region. The duties of the Liaison Officer shall include assistance with all forms of training, recruitment and dissemination of employment and apprenticeship information. |
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The "Project Owners" (being San Andreas together with any Joint Venture partner) shall provide the Liaison Officer with a list of personnel from time to time defining skills, qualifications and the number of personnel in each category that will be required at the Project. |
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The Project Owners and Nahanni agree to work and cooperate together: |
| 1. | to obtain funding and programming for all training needs | |
| 2. | to make entrance requirements for apprenticeship and employment flexible enough to meet the joint requirements of Nahanni and the Project Owners |
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The Project Owners and Nahanni shall work together to develop a training and employment plan which shall include: |
| 1. | pre-employment and cross cultural training for Aboriginal and non-Aboriginal prospective employees, and | |
| 2. | a life skills component, if necessary, for all Aboriginal employees, and | |
| 3. | the establishment of entry level training programs for occupations and trades in direct response to the particular needs and personnel requirements of the Project and to facilitate access to training for apprentices with identified areas of weakness. |
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Nahanni will
form a regional employment and training committee and will invite
surrounding First Nation communities in Wrigley, First Simpson and Fort
Liard to participate in the sharing of employment and training
opportunities generated by the Project and the Agreement. (menu) |
| REGIONAL BUSINESS DEVELOPMENT | |
| Aboriginal business development is an important method of ensuring that First Nations participate to the fullest possible extent in resource development projects occurring within their territory. Full commercial participation in the Project will lead to increased downstream benefits for communities by way of employment, profit generation and other economic spin-offs. | |
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Nahanni will enjoy precedence on all contracting opportunities associated with the Project provided that the contract terms are competitive as to price, delivery, capability, performance and quality. |
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Nahanni will
form a regional contracting committee and will invite surrounding First
Nation communities in Wrigley, Fort Simpson and Fort Liard to participate
in the sharing of contracting opportunities generated by the Project and
the Agreement. (menu) |
| FINANCIAL ASPECTS | |
| Both Nahanni and San Andreas recognize the need of First Nations in the Deh Cho to invest in the social and economic infrastructure in their communities in order to strengthen programming and facilities in the areas of Health, Social Services, Wellness, Education, Transportation and other Public Utilities. | |
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Nahanni has a 5% Net Profits Interest in the Project payable following the generation of profits after taxation equivalent to the aggregate costs of bringing the Project into production and establishing the access. |
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Nahanni has also been granted an option to purchase either a 10% or a 15% interest in the Project. |
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Nahanni will
provide certain cost savings benefits to San Andreas as a consequence of
its involvement in the Project. (menu) |
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Corporation Suite 1202, 700 West Pender Street, Vancouver, B.C., Canada V6C 1G8 phone: (604) 688-2001 fax: (604) 688-2043 e-mail: czn@canadianzinc.com toll free: 1-866-688-2001 |