A First Nations group has withdrawn its support for Seabridge Gold's (TSX: SEA; NYSE: SA) KSM mine in northwestern British Columbia, citing the need for improved consultation.

The Hereditary Chiefs of the Gitxsan Huwilp government unanimously decided last week to pull their backing for KSM in solidarity with the neighbouring Tsetsaut Skii km Lax Ha Nation (TSKLH), according to a statement issued Thursday. The Gitxsan had supported the development of KSM since 2013.

The withdrawal comes after years of petitions and challenges that have hobbled the mine's development, and follows demands by the TSKLH for "meaningful consultation" to address its concerns about the environmental risks that a planned 52-storey-deep toxic waste pond poses to waterways. In June, the B.C. Supreme Court sent KSM back to the province after finding it had failed to consult sufficiently with the TSKLH before deciding the mine had been substantially started — a determination that carries weight because, under B.C.'s environmental assessment rules, a project that is not substantially started can lose its certificate. KSM's provincial and federal approvals date to 2014, and the ruling sends the disputed decision back to the province for renewed consultation.

"Gitxsan Hereditary Chiefs are looking far beyond the court order to real economic partnerships with collaboration and shared decision-making," said Gitxsan Huwilp government co-chairs Brian Williams and Norman Moore in a joint statement. "First Nations are an essential fourth pillar of a strong northwest BC economy, with investors, corporate citizens and government being the other three."

Darlene Simpson, chief of the TSKLH, said the decision by the Gitxsan Hereditary Chiefs "sends a strong message to the province."

Legal dispute

The move also compounds problems for Seabridge, which is mired in a legal dispute with developer Tudor Gold (TSXV: TUD). In May, British Columbia indefinitely delayed a decision on permit amendments required for KSM's Mitchell Treaty Tunnels because about 12.5 km of the route crosses mineral claims held by Tudor on its early-stage Treaty Creek project.

Located 65 km northwest of Stewart, B.C., in the province's Golden Triangle, KSM is one of the world's largest undeveloped gold projects, according to Seabridge, a developer with no producing mines for which KSM is the flagship asset. A 2022 preliminary feasibility study estimated reserves totalling 47.3 million oz. gold and 7.3 billion lb. copper, with a net present value of $5.8 billion (C$8 billion).

Among the TSKLH's primary concerns is that the mine's location threatens the Nass and Unuk river watersheds, which support several species of Pacific salmon and eulachon. The Unuk River crosses the international border into Alaska, where downstream communities and fishing groups have for years raised concerns about large-scale mining on B.C.'s transboundary rivers.

"TSKLH is not anti-development, as evidenced by our history of partnership with the resource industry," added Simpson. "What we are is deeply concerned about the environmental and cultural impacts of putting the toxic waste dump for the largest gold mine in the world on our exclusive territory, next to pristine waterways we and wildlife rely on."