Satellite image of Victoria Gold’s Eagle Gold Mine in the Yukon Territory after a landslideSupplied
The Yukon government is curbing expectations about a sale of the contaminated Eagle mine, saying that environmental remediation of the site is the main priority.
The open pit gold mine in central Yukon was placed into receivership earlier this month after an Ontario judge ruled that operator Victoria Gold Corp. wasn’t moving with enough urgency and lacked funding to remediate a major cyanide spill.
Four million tonnes of cyanide-laced rocks collapsed at the company’s outdoor gold-processing facility in late June causing massive damage to infrastructure and contamination. About two million tonnes of materials containing cyanide broke through the company’s containment zone and spilled into the local environment.
The First Nation of Na-Cho Nyäk Dun fears the spill could devastate fisheries, hunting grounds and groundwater on its traditional territories. In the weeks after the spill, dozens of dead fish were found in a creek near the mine.
Yukon is now funding the remediation of the site, which is expected to cost up to $150-million and last well into next year.
Victoria Gold collapsed with at least $230-million in outstanding debt. Its major creditors include Canadian Imperial Bank of Commerce, Bank of Montreal, Desjardins, National Bank, Osisko Gold Royalties Ltd. and the Yukon government. While Yukon has indicated that it will be able to recoup some of its costs through cashing in $103.7-million in security bonds paid by Victoria Gold, the other creditors have no such recourse.
The preferred financial outcome for creditors is usually a sale of the company’s assets to a third party. That way they receive a certain amount back on their investment. But in a news conference on Friday, Lauren Haney, Yukon’s deputy minister of energy, mines and resources, said the priority in this case is cleaning up the site, and trying to get it back to the state it was in before the disaster.
“Unlike some other receivership situations that are more focused on sale of the main property or assets, this one is primarily focused on remediation,” she said.
Yukon last week advanced $50-million to receiver PricewaterhouseCoopers Inc. for remediation efforts over the next few months. That work will include the installation of groundwater wells at the mine to better monitor the water quality on site, increasing both the storage and treatment of contaminated water, and the installation of a safety berm. The structure is being put in place to protect the external environment from further contamination in the event of a secondary rock collapse in the rock heap that remains on site.
“The stability of that heap is still a primary concern of ours,” said Erin Dowd, technical lead on the Eagle mine response with Yukon’s department of energy, mines and resources.
Groundwater at and around the mine will likely have to be monitored for contamination for years, as well as the health of fisheries, but there are some signs that the situation is improving.
Tyler Williams, water resources scientist with Yukon’s department of environment, said at the news conference that cyanide levels have been dropping in Haggart Creek, a water body close to the mine. That’s because clean water coming from a site upstream of the mine is now being piped into the creek. Previously that clean water had been piped into the mine and was mixing with contaminated water on-site.
“We can already see that this mitigation measure has had a significant positive impact on the levels of cyanide that we are observing in Haggart Creek,” he said.