A junior mining company brought in by the B.C. government to clean up and restart a small gold mine on Banks Island is now suing the government for expropriation without compensation.
The company has had its interests, including mineral claims, on Banks Island sterilized as part of a deal between the government and the Gitxaala First Nation, which has effectively been given jurisdiction powers over Banks Island.
It appears to be yet another case of the NDP government ceding jurisdictional powers to First Nations, and abrogating its duty to defend the interests of the Crown, which is to say the general public.
And it’s the public—B.C. taxpayers—who will be on the hook for any damage awards, as was the case with two similar lawsuits: the Carrier Lumber and Boss Power cases, both of which resulted in $30 million settlements against the B.C. government.
Gitxtaala given jurisdiction, veto powers over Banks Island
In 2024, the BC government passed orders in council (OICs) that placed a moratorium on mining and mineral exploration on Banks Island for five years, though the terms of one of the OIC is indefinite.
The problem is that MCC Canadian Gold Ventures has, or had, mineral claims, leases and tenures there, acquired at the express invitation of the previous Liberal government, only to have them effectively nullified by the NDP government.
MCC last month filed a claim against the BC government for constructive expropriation without compensation, and is seeking damages.
“The province specifically asked us to step in and rescue this mine,” MCC director Danish Mir said in a press release.
“We invested millions, began the necessary work of cleaning up someone else’s environmental mess, and created real economic value for British Columbia.
“In return, the province negotiated away our property rights in a backroom deal without involving us or even telling us. That is not how a government should treat investors.”
Banks Island the front line of DRIPA battle
The background to this story is messy and is a centrepiece of legal and political battles that have been redrawing the jurisdictional map of B.C., with a transfer of powers to First Nations. Behind the curtain of this drama lurks DRIPA.
The Yellow Giant Gold mine (also previously known as the Tel mine) on Banks Island became the flashpoint for the Gitxaala court case, in which the BC Supreme Court ordered changes to the claim staking process in B.C. and changes to the Mineral Tenure Act.
This drama starts with a legitimate beef that the Gitxaala had with the way the gold mine on Banks Island was approved and then managed.
But it ends with the BC government shirking its duty to defend the interests of the Crown, and sacrificing the interests of a private company.
“The province made a deliberate choice to sacrifice MCC’s private property interest to secure its own interests,” the company asserts in its claim.
Bill Bennett, who was mines minister when the BC government courted MCC to buy the interests of the former Yellow Giant gold mine, describes the government’s decision to effectively sterilize Banks Island as “schizophrenic.”
“The island is either open to exploration and development or it is not,” Bennett told me. “If it is not, the government must say so and exclude it and pay any compensation to those who believed it was open.
“The NDP have just confirmed the uncertainty by allowing exploration and development to occur and then … say it is not allowed. This schizophrenic approach is exactly what B.C. does not need.”
Cleaning up one mess creates another mess
The mine on Banks Island was small enough that it didn’t require an environmental assessment, so none of the usual consultations with First Nations would have taken place.
In 2015, the mine was shut down by the provincial government for a variety of permitting and environmental infractions, including unauthorized discharges of effluent.
The company went bankrupt, and left behind an environmental liability. The mine’s former owner was convicted of multiple environmental law infractions.
MCC was courted by the BC Liberal government to acquire the bankrupt mine with the goal of having a private company to help remediate and restart the mine.
“Specifically, the province lobbied MCC to purchase the bankrupt mine to ensure that it could remain a viable and operating mine in British Columbia contributing to the provincial economy,” MCC says in its claim against the government.
“MCC invested millions of dollars acquiring and maintaining its mineral interests and developing the MCC property for mining operations.”
Meanwhile, the Gitxaala were pushing for all mineral claims on the island to be extinguished.
In the Gitxaala case, the BC Supreme court ruled the province’s claim staking process under the Mineral Tenure Act violated the Crown’s duty to consult, and ordered it changed. First Nations would need to be notified of any claims being staked in their asserted territories.
But the court declined to quash existing mineral claims on the island, as requested by the Gitxaala.
The Gitxaala therefore appealed the court decision. The Gitxaala asked the Appeal Court to quash the mineral claims and also sought a declaration that the Mineral Tenure Act was inconsistent with DRIPA.
A can of worms was opened for the government when the Appeal Court ruled in December 2025 that DRIPA was indeed judiciable.
But the other part of the appeal—the Gitxaala’s application that existing mineral claims on Banks Island be quashed—was never decided on because the Gitxaala agreed to drop that portion of the appeal.
The reason that part of the appeal was dropped was that the BC government had cut a deal. It agreed to do what the BC Supreme Court had declined to do—sterilize Banks Island from mining and mineral exploration.
In March 2024, the BC government issued two orders in council (OICs) imposing an “interim” mining and mineral exploration moratorium on Banks Island.
The OICs describe the land as “alienated land” under the Mineral Tenure Act.
On March 7, 2024, the BC government announced new interim restrictions on mining and mineral exploration in Gitxaała Nation and Ehattesaht First Nation territories on Banks Island and northwest Vancouver Island.
The orders pause current mining activities, issuing of permits or registration of new mineral claims in Gitxaała and Ehattesaht territories without the consent of the nations.
Simply put, the BC government has ceded jurisdiction over Banks Island to the Gitxaala. It is now the Gitxaala, not the provincial government, that decides whether or not mining or any kind of mineral exploration occurs on Banks Island.
Geoffrey Moyse, former legal counsel for the B.C. Attorney General, has been critical of the NDP government’s handling of aboriginal reconciliation, including DRIPA.
He says the Banks Island case appears to be one more example of the NDP government abrogating its duty to defend the interests of the Crown, which is to say the public, when it comes to aboriginal rights and title issues.
“Crown land is Crown land, until such time as somebody proves aboriginal title over a portion of it, at which time it ceases to be Crown land,” Moyse said.
“Until it ceases to be Crown land in that way, there is an obligation on the government to manage that land for the benefit of the public.”
Remember how we were all assured that DRIPA would not confer veto powers to First Nations?
The government’s designation for Banks Island explicitly stipulates that mineral exploration activities on Banks Island, such as the registration of mineral claims, can only occur with the consent of the Gitxaala. That’s a veto.
Nelson Bennett’s column appears weekly at Resource Works News. Contact him at [email protected].
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