Can you update us on Momentum Law LLP and the state of the Canadian mining sector?

We have recently rebranded from Ormston List Frawley LLP to Momentum Law LLP to better reflect how we practice, and the value we bring to clients.  There have been some positive trends for minerals like uranium but overall the landscape remains highly unpredictable. Unfortunately, this uncertainty aligns with the general state of the world. Overall, the difficulties juniors faced in 2023 persisted into 2024. Uncertainty in the market persists, making it hard for exploration companies to anticipate any positive changes.

Despite record gold prices, for our clients we have not seen a substantial shift towards precious metals in their focus. This may change.

What are some recent court decisions involving First Nations rights that might impact mineral exploration and mining?

The Supreme Court of Canada’s recent decision in Ontario (Attorney General) v. Restoule is a significant recent decision that reaffirms that First Nations are entitled to have their Treaty rights protected. The case relates to the historic breach of the Robinson-Huron and Robinson-Superior Treaties between the Crown, or Canadian governments, and the Anishinaabe peoples living on the lands north of Lakes Huron and Superior. I believe it will have long-reaching consequences. The court in that case recognized that the Treaty rights of Indigenous communities around Lake Huron had been ignored. Since 1898, the Government of Canada failed to update the compensation owed under the Treaties. In reviewing how Treaty payments had been arbitrarily frozen for 150 years, the Supreme Court’s decision gave a scathing assessment of the Government’s behavior.

The dollar amount of the damages that will have to be paid to affected First Nations, or to their members, remains to be determined. However, the Supreme Court ruled that it will step in and set the amount if the parties cannot reach a negotiated settlement by early 2025.  

The decision is significant for the mineral resource industry because it recognizes the strength of the Canadian government’s Treaty obligations to Canada’s Indigenous communities, where treaties were reached.

I see the decision as another example of how important it is for the rights and interests of Indigenous communities to be recognized wherever mineral resource exploration and development intersects with the interests of those communities. 

Can you discuss the impact of the new rules on Canadian and foreign ownership or critical minerals?

These rules are part of a broader trend where Canada is increasing its scrutiny of foreign investment in critical sectors, including investments in critical minerals and resources like uranium. The government’s approach reflects a desire to retain control over strategically significant sectors. More recent developments between Canada and the U.S. may lead to an increased emphasis on Canadian control or influence, if the trend away from an open international economic system persists and Canada determines that it is in the country’s interests to identify and use key sectors as leverage.

However, the focus on ownership or investment ignores the fact that for certain minerals, a significant portion of production and processing is done outside Canada, notably in places like China. Chinese entities are naturally looking for feedstock for their processing, and they sometimes have the best understanding of the market dynamics for the minerals they produce.  Unless and until processing is available in other locations, there will be a natural collision between the concerns over foreign control by Canadian governments and the fact that the customer and source of investment capital is outside Canada. Furthermore, there are ways to exert control other than through equity ownership (such as debt financing) to achieve practical control.

Have Toronto’s equity markets become less competitive than other markets like London?

The issue is not due to a heavier regulatory burden in Canada, in my opinion. Listing in places like the UK or the US is not necessarily easier.  In fact, being a public company in the US, or in the UK, gives rise to higher compliance costs and regulatory burden than in Canada, or at least that is my experience. While Canadian markets have seen a decline in their relative importance, I think this is more due to increased capital availability elsewhere rather than listing or regulatory barriers.

I would also point out that the time it takes for a company to get listed in Canada is similar to, and often shorter than, the time needed in places like the US or the UK. 

Do you have a final message?

Canada is well-positioned because of its extensive mining expertise, resource base, and strong industry infrastructure. Although the industry has evolved over the years, in my hometown we went from Falconbridge to Xstrata to Glencore, and Inco to Vale, but core exploration and mining capabilities remain strong as they are rooted in the know-how and experience built up over a long history of mining in this country.