In a decision this week, Ontario Superior Court of Justice Carol Brown sided with the First Nations community, saying Solid Gold (TSXV:SLD) failed to engage in consultation.
The ruling prohibits Solid Gold from any further exploration in the area for 120 days, during which time the company and the provincial government must undergo a proper consultation process with Wahgoshig.
In her decision, Brown pointed to Wahgoshig's position that "to refuse to enjoin Solid Gold from its drilling ... will send a message that Aboriginal and treaty rights, including the rights to consultation and accommodation, can be ignored by exploration companies, rendering the First Nations constitutionally recognized rights meaningless."
"This would not be in the public interest."
If the meetings are not productive, Brown said, the community can go back to court to seek an extension on the injunction.
Wahgoshig Chief David Babin said he hoped the ruling sends a message to all companies that courts will not let First Nation rights "be trampled on by unilateral actions and failures of industry and government."
The community had argued the company staked claims with no consultation, even after it was instructed to contact the First Nation. Wahgoshig discovered the drilling activity when two of its members stumbled upon workers last spring, but the crew refused to say who they worked for.
Solid Gold had argued that granting the injunction would jeopardize its financial well-being and essentially shut down its operations.
Ontario's Mining Act, it said, established a "free entry" system that made all Crown lands available for prospecting.
The company was not immediately available for comment. Its mining claim covers 103 claims covering about 21,790 hectares within Wahgoshig's traditional territory.
This is not the first decision in which the courts ruled to protect traditional aboriginal lands.
In August, the Grassy Narrows First Nation in Kenora declared victory in its 11-year court battle to stop logging on traditional lands after the Ontario Superior ruled the province didn't have the power to interfere with the First Nation's treaty rights.
The Grassy Narrows First Nation had challenged the province's right to permit industrial logging on its traditional lands, saying it infringed on their hunting and trapping rights under a treaty they signed in 1873.
Lawyers in that case had said the ruling would likely have legal implications for similar disputes in Ontario — such as the massive Ring of Fire chromite deposit in the north.
Premier Dalton McGuinty would not comment directly on the ruling Thursday but he waved aside questions about whether this would make relations between First Nations and exploration companies more difficult.
"There is an important legal obligation now placed on businesses to consult in a formal and thorough way," he said after an announcement in Waterloo, Ont.
"We need to get beyond the times where First Nation communities and the interests that they had in resources were given short shrift and were disrespected."
That obligation to consult, he added, is there "for a good reason."
"We fully expect that if businesses have an interest in pursuing these kinds of explorations, that they will consult."
Shares in Solid Gold were unchanged at five cents on the TSX Venture Exchange Thursday.