Grass for gold deal suits farmers

Tuesday, August 13, 2013

by BETTER FARMING STAFF

A gold find in a community pasture northwest of Fort Frances has put a smile on its users’ faces, but not for the reasons you might think.

A company that is ramping up mining efforts in the area has opted to help find a new home for the Rainy River Community Pasture.

The 870-acre pasture “was right in the middle of their field of activity. There was no chance for us to try and hold on to it  (the company owned the land’s mineral rights), and neither did we want to,” says Mark Husser, one of the pasture’s members.

“The pasture was established 30 to 35 years ago. All the fences and infrastructure was all showing its age,” he explains.

About three years ago, a representative of Rainy River Resources Ltd. approached the pasture’s members about the possibility of relocation. They struck an agreement that included the company not only acquiring a new location and giving it to the group in exchange for the old pasture, but also supplying other infrastructure, such as fencing, a well and corals. Husser estimates the improvements cost about $150,000.

The group took possession of the new pasture in March. At 1,530 acres it’s nearly double the size of the old one. It’s also in a more accessible location, Husser says, noting eight farmers now use it. Previously, seven farmers used the pasture.

“Rainy River Resources, they were very kind,” he says. “Of course they stated that it was basically ‘a gentle expropriation.’ ”

Indi Gopinathan, Rainy River Resources director, investor relations, declined to disclose how much the company spent to relocate the pasture, saying the company does not normally discuss the financial arrangements of individual contracts with “counterparties.”

“Our intention as a company,” she says, “is that we wanted to make sure that the community pasture people had an equivalent, if not better property resulting from essentially the trade we were doing with them.”

She noted that it took about two years to work out the details of the deal. Along with finalizing a short list of properties and making a decision from there, approvals had to be obtained from the provincial Association of Community Pastures, which owned the pasture, and the Ontario Ministry of Agriculture and Food. “We covered all the deal costs,” Gopinathan says.

In its feasibility study released in May, the company predicted it would annually produce 326,000 ounces of gold and 494,000 ounces of silver over the first 10 years of operation at its Rainy River location. It estimates there are four million ounces of gold and more than 10 million ounces of silver at the location.

Mining operations would take place in both an open pit and underground.

According to the study, the Rainy River Gold Project covers nearly 16,700 hectares about 50 kilometres northwest of Fort Frances. BF