Victoria Gold's Eagle gold mine site north of Mayo, Yukon, on July 3. On June 24, four million tonnes of cyanide-laced rocks collapsed at the outdoor heap-leaching facility.HO/The Canadian Press
Victoria Gold Corp. VGCX-T chief executive officer John McConnell says he regrets staying silent while the company was in crisis, and suspects June’s catastrophic cyanide spill at its Yukon mine was caused by an uncontrolled buildup of fluid.
Four million tonnes of cyanide-laced rocks collapsed at the outdoor heap-leaching facility on June 24 and half of that spilled into the local environment beyond the company’s containment zone. The scale of the environmental damage is unknown, but the local First Nation fears the spill could devastate salmon fisheries, hunting grounds and groundwater. Dozens of dead fish were recently found in a creek near the mine and groundwater in the vicinity of the mine will have to be monitored for toxic cyanide for years to come.
Victoria Gold on Wednesday was put into receivership after Justice Barbara Conway of the Ontario Superior Court of Justice concluded that the Toronto-based miner wasn’t handling the emergency with enough urgency, and it likely won’t be able to fund the remediation of the site, which is now expected to cost up to $150-million.
Heap leaching involves stacking mined ore into outdoor piles and then sprinkling it with water laced with cyanide. Gold leaches from the ore into a lined pond and it is then pumped to an enclosed facility, where it is collected. The operation must be monitored continuously to make sure the rock piles are stable, the cyanide solution is effectively percolating through the ore and there are no leaks in the piping system.
While Mr. McConnell said investigators will ultimately determine the root cause of the rock collapse, he suspects it was caused by fluid collecting on the rock pile causing a massive instability.
“I use the analogy if you had a pile of sand three feet high, and you stuffed a garden hose in at the top, and pushed it down towards the bottom, then turned on the water, it would fluidize some of the sand. It would blow out the side, and above it would collapse into it,” he said.
“How the water got there, whether it was a broken pipe, or a valve left open, I have no idea.”
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Mr. McConnell said one of his biggest regrets was not speaking more after the crisis occurred. The Yukon government castigated the company on several occasions for not divulging enough information to the public about its steps to contain the environmental damage. Victoria Gold sometimes went several weeks without issuing updates. Mr. McConnell said his lawyers had advised him to stay silent, but now admits that was a mistake.
“Their advice was, ‘Say nothing, say nothing, say nothing.’ And that’s not my style. So, I regret that I wasn’t out there talking to more people and getting our message out about what our plans were and the success we were having with managing the water and converting the water treatment plant for cyanide destruction.”
Mr. McConnell said that while he expects to be asked to step down in a few weeks, he’ll remain in place for the time being as receiver PricewaterhouseCoopers Inc. assembles a new team.
With Victoria Gold in receivership, the territorial government has taken over responsibility for funding the remediation. It had already been providing some financial assistance in the past seven weeks as it assisted Victoria Gold in its cleanup and containment efforts.
The company has been attempting to store and treat contaminated water left at the mine site but a lack of adequate storage capacity has been a major issue. The territory’s government late last month had already taken over some of the environmental mitigation efforts after Victoria Gold failed to meet a key government directive on the construction of a safety berm.
According to Judge Conway’s written decision published on Thursday, Yukon has advanced $50-million to receiver PricewaterhouseCoopers Inc. for cleanup efforts in the next 90 days alone. Cord Hamilton, a consulting engineer working for the First Nation of Na-Cho Nyäk Dun, said earlier in the week that it may take until next spring before the site is stabilized.
The Canadian Investment Regulatory Organization halted trading in the shares on Wednesday and the company said on Thursday it expects the Toronto Stock Exchange to soon delist the stock, meaning shareholders are facing a complete wipeout. The stock has lost more than 90 per cent of its value since the late June spill.
The Victoria Gold debacle is at least the third major mining failure in the Yukon that potentially puts Canadian taxpayers on the hook for the remediation bill.
The giant Faro zinc mine in the territory was abandoned in 1988 with 70 million tonnes of tailings and 320 million tonnes of waste rock. The CBC reported in 2022 that the federal government has spent at least $600-million in a contamination cleanup effort that is ongoing.
Minto Metals Corp. abandoned its gold and copper mine in Yukon without warning in 2023. The Yukon government has been drawing down on a $75.2-million security deposit left by the company for remediation work. So far, it has spent $24-million and it plans to spend an additional $21.5-million through to the end of 2025.
In granting the Victoria Gold receivership, Justice Conway said that Yukon is now the priority creditor in the event the company’s assets needed to be liquidated. Yukon’s elevation to the top of the list is because it is undergoing work to protect the environment.
Editor’s note: This article has been updated to correct misspellings of John McConnell's surname.