An Inuit share of the mining business?


As many readers may know by now, the Tahera Corp.’s Jericho diamond mine, Nunavut’s first new working mine in many years, is almost ready to go.

After years of painstaking exploration and many months of equally painstaking work aimed at guiding their project through a long list of bureaucratic processes, Tahera executives have solved their biggest problem of all: how to pay for it.

The company struck a deal earlier this month with the renowned jewellery retailer, Tiffany and Co., to borrow $35 million over the next five years. Tiffany will also buy most of the diamonds that Tahera produces, and sell the diamonds they don’t want to buyers around the world.

But that deal represents only half of the $72.5 million in start-up money that Tahera will need to pay the cost of constructing the mine, an on-site processing plant, an airstrip and other infrastructure.

To raise the rest of the cash they need, Tahera will sell shares through the stock market. We’re not financial experts, but right now it looks like a good buy. The company estimates that the mine will earn profits of about $142 million a year, before taxes are applied. That figure, of course, could rise and fall with the price of diamonds — but most observers believe prices will rise in the future.

How can Inuit share in these profits? One way is through implementation of the Inuit impact and benefits agreement between Tahera and the Kitikmeot Inuit Association. This agreement will produce certain numbers of jobs and training opportunities for Inuit workers, and contracting opportunities for Inuit businesses.

But there’s a more direct way to share in Tahera’s wealth — and that’s to buy into the company. There appear to be several ways of doing this: through the regional birthright corporations, the Nunavut Trust, the Atuqtuarvik Corp., or some new entity.

Some Inuit corporations have a history of investing in dubious commercial enterprises that end up losing money — and the beneficiaries never seem to find out why.

But investments in publicly traded companies are different. Companies such as Tahera are legally required to make their financial statements available to the public, and any other information that could affect their financial position. Anyone with access to the Internet can easily find this information.

And the ownership of shares in a public company gives you the right to attend shareholder meetings, and cast votes. If you own a big piece of the firm, you might get a seat on its board of directors.

This is not the kind of decision that ought to be done hastily, of course. If it’s something that Inuit business organizations decide they want to do, they should proceed only after doing a diligent analysis of the idea.

Jericho is only the first in a series of new mines that are likely to start up in Nunavut over the next decade or so. When hundreds of millions of dollars begin to flow back and forth, including big profits flowing into the hands of southern investors, Inuit will want to know how they can share too. This is one way of answering that question. JB

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