The Liberal government is staying mum about its reasons for shelling out $21 million more in taxpayer money than its valuators suggested it pay to settle a court battle with a Vancouver mining company.
Business in Vancouver has obtained more than 20 pages of government email records that would have detailed the Ministry of Energy and Mines' internal discussions that led to its October decision to pay Boss Power (TSX-V:BPU) $30 million to end a two-year court battle regarding the Blizzard uranium claim near Kelowna.
But, apart from a few email addresses and ministry employee names, the records have been completely redacted – secreting away the reasons why the government decided on a $30 million settlement to end a tumultuous legal battle.
The government has withheld the details of the email records by citing various sections of the Freedom of Information and Protection of Privacy Act (FOIPPA), including that the disclosure of the records would be "harmful to the financial or economic interests of a public body" and "harmful to personal privacy."
BIV originally filed the FOI request in January, but didn't receive the redacted records until late last month – the same day the ministry released three valuation reports for the Blizzard property.
The battle surrounding the property began in 2008, when former mines minister Kevin Krueger banned all uranium mining and exploration in B.C., effectively shutting down Boss' exploration work at Blizzard.
A court battle ensued.
BIV revealed in January 2011 that senior bureaucrats within the former Ministry of Energy, Mines and Petroleum Resources admitted they refused to process a notice of work application for Boss, despite being obligated to do so.
In early 2011, Boss Power president and CEO Randy Rogers said the company was seeking between $42 million and $59 million in compensation from the province.
The valuation reports released late last month reveal a difference of opinion as to how much the Blizzard property was worth.
A government valuation pegged the value at between $2.3 million and $6.7 million, while a Boss Power valuation said the property was worth between US$26 million and US$59 million.
A third valuation, prepared by court-appointed independent expert Keith Spence (who co- developed Canadian mining valuation standards and guidelines) determined the property was more likely worth $8.7 million, which included a "discretionary premium of 30%."
That's $21.3 million less than the government paid Boss to settle its claim. The difference between the valuations and the settlement amount prompted pointed questions from NDP mines critic John Horgan in the legislature April 24.
"It takes a lot of talent to wrestle someone to the ceiling and put five times more money in their pocket than your own advisers tell you that you should give them," Horgan blasted.
A spokesman from the Ministry of Energy and Mines told BIV that placing a value on subsurface minerals is "a complicated process" and that the valuations ranged between $2.3 million and $96 million.
"After negotiations, the parties agreed to a $30 million settlement, well within the range identified by the evaluations," a spokesman said, adding that the province's legal counsel recommended the settlement amount. •
