The Ontario government is paying a mining company to walk away from its claims near the northern First Nations community of Kitchenuhmaykoosib Inninuwug.

Rick Bartolucci, the minister of Northern Development and Mines, said Toronto-based God's Lake Resources has agreed to surrender its mining lease and claims close at Big Trout Lake, about 600 km north of Thunder Bay.

In return, the province will pay the company $3.5 million. KI has insisted that God's Lake Resources stop all activity in the First Nation's traditional territory. Community leaders said the company was working on ancestral burial grounds.

The agreement with GLR is reminiscent of a deal the government made with another mining company, Platinex, several years ago. It gave up its mining claims near Big Trout Lake in exchange for $5 million, after KI demanded it stop its exploration activity.

Earlier this month the province removed 23,000 thousand square kilometres of land in the area from future mining claims.

The God's Lake Resources claims are now also withdrawn from all staking and exploration.

Bartolucci said the deal with God’s Lake Resources responds to KI's concerns, while allowing the mining company to move forward with mineral exploration in other parts of Ontario in the future.