This article was originally published on dermotcole.com and is republished here with permission.
The Tetlin Native Corporation has posted a press release on its website making serious allegations about parties involved in the mineral lease that underlies the Kinross plan to truck ore to Fairbanks.
The many legal issues, which go back years before Kinross got involved, will be sorted out if and when the dispute over the mining lease ever goes to court.
As for the political and ethical issues, the court of public opinion will come into play.
One of the central issues, it seems to me, is whether the people of Tetlin were treated fairly in this matter from the start. There is reason to believe they were not, having entered negotiations with an experienced Texas promoter at a serious disadvantage.
The long and convoluted history about the struggle to control Tetlin’s land cannot be explained in a single blog post. There were pointed arguments among villagers, corporate recall elections and court fights, one of which went to the Alaska Supreme Court, Jimerson v. Tetlin Native Corp.
After reading some of the legal and financial documents about the history of the mineral lease, I think many elements deserve a full public airing and examination.
We’ll start today with two issues.
One is the full role of the late chief Donald “Danny” Adams and his dealings on the lease with Texas petroleum engineer and promoter Jonn “Brad” Juneau.
A second is the exorbitant finder’s fee the Tetlin chief signed off on to a Texan named Rickey William Hendry.
Juneau is the chairman of Contango ORE, the company that owns 30 percent of the joint venture with Kinross.
Juneau signed the July 16, 2008 agreement to lease hundreds of thousands of acres from Tetlin for mineral exploration and production, while Adams alone signed for the Tetlin Village Council.
The full details are in a document that was filed with the state recorder’s office on Jan. 8, 2015. A copy was included in documents sent to the Securities and Exchange Commission in 2010.
The 2008 lease required that Tetlin not reveal the financial details of the lease and included a provision requiring Tetlin to write a memorandum of understanding that could be filed with the recorder’s office, a document that did not reveal the most important details.
The memo, with no financial details about payments to Tetlin, was recorded on Sept. 19, 2008.
The lease stipulates that Juneau and his company did not pay a “finder’s fee” for the creation of the Tetlin lease.
But there was an immense finder’s fee involved in this transaction, one that may last as long as the Tetlin lands are mined.
It was Hendry, a regular visitor to Tetlin from Apple Springs, Texas, who introduced Brad Juneau to the people of Tetlin, according to a document signed by Chief Adams on July 7, 2008, but not recorded until April 17, 2015.
At a June 6, 2008 “general meeting of the tribe,” there was unanimous support for doing something to recognize Hendry for bringing Juneau and another interested investor to the village.
As a “token of the tribe’s esteem and thanks for his efforts,” Adams later wrote, Tetlin gave Hendry and his heirs 10 percent of the net profits from “any agreement that may be entered into with the Investors for exploration and production of revenue from the sale of precious metals, base metals, gems, oil, gas, minerals or other elements, found by the Investors on the Tetlin lands. . .”
“The Tribe and Mr. Hendry agree this Finder’s Agreement cannot be revoked or revised without the written consent of both parties,” says the agreement signed by Hendry and Adams.
Since there are no other signatures, it’s not clear if the Tetlin Village Council knew or approved of the arrangement to forever give up 10 percent of their net profits.
Curt Freeman, another board member of Contango ORE and a veteran Alaska geologist, wrote a 2020 history of the project that the company has posted, but does not mention Hendry or his finder’s fee.
Freeman’s history, which can be found here, only says, “through a series of contacts, Chief Danny got in touch with Brad Juneau, a succesful petroleum engineer based in Houston, Texas.”
Freeman’s account says it “took several months for lawyers on both sides to write the first ever mineral lease on Tetlin Village lands.”
It did not take several months. Juneau “attended a general Tetlin meeting to present his proposal” on June 6, 2008, the lease says. And “the members of the Tribe without opposition determined to pursue the negotiation of an agreement concerning exploration and, if commercially feasible, production of Tetlin’s mineral resources.”
Adams accepted the terms and signed on July 16. The agreement said that because of the “substantial expenses” incurred by Tetlin in negotiating the lease, Juneau paid $50,000 to Tetlin. “Tetlin shall not be responsible to Juneau to account for the expense payment,” the document said.
On Oct. 15, 2010, Contango hired Adams at a rate of $5,000 a month as a consultant. Contango said Adams had “special knowledge and experience with governmental affairs and tribal affairs issues and operates an independent consulting practice.”
He could pick his own hours, but had to work about 200 hours a year. No one from the village council signed the document. The contract said that none of his work would have anything to do with the mineral lease he had approved as the Tetlin chief.
The company said it would pay for travel and living expenses while traveling. it also paid Adams “discretionary bonuses” for assistance in acquiring more acreage in Alaska. It paid him a total of $80,000 in discretionary bonuses during the first few years, according to a document filed with the SEC.
The Tetlin Native Corporation says the Tetlin Village Council was never in the loop about the mineral lease, that there was no “general meeting” in June 2008 and that the council did not know Adams was a paid consultant for years.
Adams, who died in 2015 at 57, had been the Tetlin chief for 26 years.
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