Click here to read the October 8, 2009 Shareholder Letter Regarding Developments with the Nunatsiavut Government

Crosshair's Commitment to Local Communities

Crosshair is committed to maximizing the benefits for local communities and businesses, and maintains a policy of utilizing local businesses and service providers whenever possible. Contractors and service providers are chosen based on a combination of cost competitiveness, technical expertise and track record, and history of environmental stewardship. The Innu Business Development Centre and Inuit Business Directory are frequently consulted in order to secure local services during the course of Crosshair's exploration programs.

Crosshair believes in supporting the local community and has taken several measures to ensure that the work done involves the local people. From 2006 to 2008, approximately 80% of Crosshair's exploration budget on the CMB Uranium Project remained within the Province with $2.9 million spent on the local communities in 2008 alone. Crosshair is also utilizing Inuit and Innu Registered Businesses, spending approximately 11% of its project budget on these companies. Approximately 40-50% of all on-site Crosshair employees through 2006 to 2008 have been from Labrador communities. Our local workers are employed as prospectors, cook / kitchen staff, core technicians, core splitters and camp maintenance workers. Crosshair has mindfully developed a diversified exploration team at its CMB Project, where hard work, mutual respect, environmental protection, and above all health and safety are promoted. Consequently, the retention rate amongst our core group of employees has been very high.

Labrador and Newfoundland are home to a rich and diverse group of people with dynamic histories and cultures. Two indigenous groups (the Inuit and the Innu) call Labrador home. The Inuit are descended from the Thule people who arrived in Labrador from the Canadian arctic 700 to 800 years ago, while the Innu are descendants of Algonkian-speaking people who settled in Labrador prior to the arrival of Europeans.

The Inuit and Land Claims

The Labrador Inuit Land Claims Agreement Act (LILCAA) was the first aboriginal land claim agreement in Newfoundland and Labrador and the last Inuit land claim agreement in Canada. On May 26, 2004 seventy six per cent of eligible Labrador Inuit voted and overwhelmingly supported the LILCAA. Seven months later, on December 6, 2004, the Government of Newfoundland and Labrador passed provincial legislation to bring into being the LILCAA, which received Royal Assent the same day.

The LILCAA provides the Labrador Inuit with clearly defined land, resource, and self-government rights. It allows for the establishment of the Labrador Inuit Settlement Area, the creation of the Nunatsiavut Government and five Inuit community governments in five predominantly Inuit communities (Nain, Hopedale, Makkovik, Postville, and Rigolet). In exchange for the rights and benefits agreed upon in the LILCAA, the Labrador Inuit cede all of their aboriginal rights outside of Labrador Inuit Lands. The agreement addresses the rights of the Inuit only and does not affect the rights of other aboriginal people in Labrador.

The agreement provides the Inuit with 72,520km2 of land and 48,690km2 of ocean in which they have special rights related to traditional land use. This region is called Labrador Inuit Settlement Area. Provincial regulations for mining and mineral exploration continue to apply in the Labrador Inuit Settlement Area; however, Impact and Benefits Agreements must be negotiated with the Nunatsiavut Government for large-scale mineral developments. A second category of land is also specified in the LILCAA. Within the Labrador Inuit Settlement Area, 15,800km2 has been designated Labrador Inuit Lands and it is within these lands that the Inuit have the most right and benefits. This includes a 25% ownership interest (25% of provincial government revenues) in subsurface resources. Exploration for subsurface resources on this land requires approval from both the Government of Newfoundland and Labrador and the Nunatsiavut Government.

The Innu Nation of Labrador and Land Claims

There are three stages in the land claims agreement negotiation process: Framework Agreement, Agreement-in-Principle, and Final Agreement. While the Inuit have completed the third and final stage, the Innu have yet to settle their land claims. The Innu Nation is currently negotiating with the federal and provincial governments. A Framework Agreement has been approved by Innu Nation and the federal and provincial governments and negotiations are now proceeding towards an Agreement-in-Principle.

Effect of Land Claims on Crosshair's Property

Approximately 17% of Crosshair's CMB Uranium Property falls within the Labrador Inuit Settlement Area. Of that amount, just over half (less than 9% of the entire Crosshair CMB Property) falls within Labrador Inuit Lands. The C Zone resource and the Area 1 prospect both lie outside of Labrador Inuit Lands.

On April 8, 2008 , the Nunatsiavut passed legislation placing a three year moratorium on uranium mining on their self-governed Labrador Inuit Lands. All of Crosshair's principal assets, including the 4.5 kilometre long mineralized corridor that runs from C Zone to Armstrong, fall outside of LIL and are therefore not impacted by this legislation. Although the moratorium does not apply to exploration activities, all of Crosshair's future efforts will be directed at continuing to advance the 91% of Crosshair's property that does not fall within LIL. Drilling and exploration activities currently proposed will continue as planned.

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Sources:
Newfoundland and Labrador Heritage Website
Government of Newfoundland and Labrador