Each deal is different because First Nations and companies alike come to the table with varying degrees of capacity. There are junior exploration companies just out of the gate, more mature exploration companies, majors like De Beers, Goldcorp and Vale Inco, and individual prospectors at the other end of the continuum.
“You also have a range of communities with different levels of capacity,” said Fox. “The role I play is to assess their knowledge level and what can be offered on both sides, so there’s a mutually beneficial outcome.”
Most junior exploration companies and First Nation communities often have very little to offer each other in the early going.
“When you start out as a junior, your cash flow is next to nothing.
You’re chasing money, so you can’t put up too much. You can cut some paper up and offer shares or subcontracting opportunities. You can have a whole suite of commercial opportunities, but do you have the resources in the community to take advantage of them? It’s easy putting something on paper, but can you put that enterprise together?”
It’s important to be realistic about the chances of moving from exploration to mine development, said Fox.
“If mines were easy to find, we’d have a lot more of them than we have today. The negotiations shouldn’t be about if they find a mine. It should be about what if they don’t find a mine because that is the likelihood.”
The challenge then becomes getting “some money off the table in the meantime.”
One option is to offer shares to First Nation communities.
“Imagine if you had Noront Resources shares, for example, at 33 cents and they hit $7. If you were able to negotiate a quarter million or a half million shares, you’d have $3 million or $4 million.”
However, realism applies here, too, because “the majority of juniors never get to that point,” said Fox.
First Nation communities need to understand that companies come and go.
“At the end of an exploration agreement, there’s a promise to talk about A-Z in an impact benefit agreement, but very few juniors become operators. The agreement may contain all kinds of promises, but the face is going to change. You’re going to be dealing with someone else at the bankability stage. If the deposit is viable, they’re going to flip the property or cash out.”
Historically, exploration companies never bothered to engage First Nation communities, but times are changing, said Fox.
“Proactive companies today are saying ‘Let’s engage these communities and try to land an agreement that provides some certainty for our investors.’ “
Fox advises mining companies to be patient.
“There’s a very democratic process in the majority of communities,” he explained. “What I find is that companies have their own timelines and they sometimes want to rush it.”
Another mistake is to think of the relationship in terms of a “one time event.” According to Fox, “it’s a process, an ongoing relationship.
“Companies think that all they have to do is educate the council, but in my opinion, longevity in any relationship requires working with the community. There are elections every two years. If the community supports the project, then there’s long-term support for it, regardless of the council.”
The success of a relationship also hinges on the choice of consultants.
Companies that hire hotshot Aboriginal engagement specialists from Vancouver, Calgary or Toronto may be doing themselves a disservice, warned Fox.
“What they really need are folks who have relationships with these communities, not some hotshot consultant who figures he’s going to overwhelm the community with his charm. It doesn’t work that way.”
Fox says there are several different kinds of consultants: grievance experts, process junkies and those who are focused on results. “I like to get down to the commercial part. That’s the real deal,” he said.
The media focus on the conflict between Platinex Inc. and the Kitchenuhmaykoosib Inninuwug First Nation and the subsequent jailing of KI leaders last summer left the public with a distorted impression of First Nation attitudes toward the mining industry, complained Fox.
“I took politics and media as one of my courses and I remember that motto, ‘If it bleeds, it reads.’ KI eclipsed all the other good stuff because the newspapers and the environmental groups want to focus on that. No one reports all the good acts that happen every day. It’s always that one bad act, a purse snatching or robbery.”