The Star-News: Attorney general raises questions on Midas Gold agreement

Since the summer of last year, Midas Gold has been working with haste to make partners out of west central Idaho communities by offering financial incentives in an apparent bid for public support. As of November, Midas has been touting their “partnership agreement” to investors in exchange for rising stock prices. Two weeks ago, contrary to repeated claims of transparency, Midas Gold’s recently formed Stibnite Advisory Board announced that their meetings (hosted at the Midas office) would be closed to the public.

“The reality is that all citizens and all entities have a legal right to engage in the permitting process of this mine through the United States Forest Service,” said IRU executive director Kevin Lewis. “Midas Gold is proposing a project on public lands, which belong to all Americans, not just to Midas Gold and The Stibnite Advisory Council.”

Following a public meeting where Valley County residents expressed to their commissioners a strong opposition to the proposed agreement, Midas withdrew their offer. Moreover, the Idaho Attorney General’s office has raised valid issues regarding Midas Gold’s Stibnite Advisory Council. At IRU, we were leery about this partnership agreement from the very beginning, Assistant Chief Deputy Brian Kane solidified our concerns.

Below is an article by Tom Grote for The Star-News which gives a more in depth look at the questions raised by the Office of the Attorney General.

• Click here to read the Idaho Attorney General’s letter to Valley and Adams County Commissioners.

• Click here for a link to Boise Public Radio’s article: Midas Gold Withdraws Request For Valley County To Sign Community Agreement

• Click here go to go IRU's Stibnite web page where you'll find extensive information and background about what Midas Gold is proposing.

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Reprinted with permission from The Star-News.

Attorney general raises questions on Midas Gold agreement

Letter to Valley County not disclosed before public meeting

BY TOM GROTE
for The Star-News

The agreement between Midas Gold and eight governing bodies “raises some questions,” an opinion from the Idaho Attorney General’s office said.

The opinion was written on Jan. 3 to Valley County Prosecuting Attorney Carol Brockmann from Assistant Chief Deputy Brian Kane.

The opinion has not been discussed at any public meeting of Valley County commissioners, including a Jan. 16 public forum held at Donnelly Elementary School on the proposed agreement.

The opinion was obtained by The Star-News through a public records request.

Kane was asked by Bockmann and Adams County Prosecuting Attorney Chris Boyd to review the Community Agreement, which entitles the signers to have a seat on the Stibnite Advisory Council and on a future Stibnite Foundation that would fund community grants with cash and stock from Midas Gold.

The signers also are required to make comments to the Payette National Forest on the proposed mine, but there is no requirement the signers express support for the project.

Kane wrote that the agreement “seems as if it is legally defensible/permissible - but it raises some questions with regard to appearances and perhaps biases favoring certain outcomes.”

Kane questioned whether it was appropriate for local governments to have a seat on the board of the foundation, which is scheduled to receive about 3 million shares of Midas Gold stock.

“A question arises whether this is a permissible situation to be in for a county or city where it has a vested financial stake in the profitability of a company,” Kane wrote in his opinion.

Kane also noted the agreement calls for the foundation to be funded in the future with a share of profits if the proposed gold and antimony mine near Yellow Pine is built.

“This places the cities and counties in a possible conflict situation since they are the beneficiaries of the foundation and thus have financial incentive to see the project be successful,” Kane wrote.

“Whether it is legal or not, it has a possible appearance of impropriety,” the opinion said.

The Stibnite Advisory Council also could pose a problem if the group formulates policies on behalf of the local governments, he said.

“It may be an improper dilution of the sovereignty of each entity,” Kane wrote.

There are currently eight signers to the agreement. They are the cities of Cascade, Donnelly, New Meadows, Council and Riggins, the community of Yellow Pine and Idaho County and Adams County.

The McCall City Council on Jan. 7 voted not to sign the agreement, but will seek a separate agreement with Midas Gold later.

Valley County commissioners were considering the agreement but ended the process when Midas Gold last week withdrew its offer to sign the pact.

Midas Gold is “confident” in the Community Agreement, company spokesperson Natalie Podgorski said.

“The Stibnite Advisory Council does not have any decision making authority over the Stibnite Gold Project,” Podgorski said.

The Stibnite Foundation will allow Midas Gold to share profits when the are generated, she said.

“There is no impropriety in being a good corporate citizen by creating an endowment for the future,” Podgorski said.

Valley County Commissioner Dave Bingaman said the commissioners did not receive Kane’s opinion until Jan. 15, the day before the Donnelly meeting.

“As I read the AG statement, I did not perceive a clear directive one way or another,” Bingaman said. “His statement voiced concerns that were raised in the meetings and I personally was already considering.”

Commission Chair Gordon Cruickshank said Kane’s opinion “made no firm clarification if it is right or wrong to be involved.”

“I wanted to hear from the citizens as they saw the Community Agreement document,” Cruickshank said.