Victoria Gold's Eagle gold mine site north of Mayo, Y.T., is shown in this handout aerial photo taken July 3, 2024.HO/The Canadian Press
The Yukon government has taken over some of the environmental-mitigation efforts stemming from a major gold-processing plant failure in the territory because operator Victoria Gold Corp. failed to meet a key government directive.
Four million tonnes of cyanide-laced rocks collapsed on June 24 at an outdoor heap-leach facility at the Eagle gold mine in central Yukon operated by Victoria Gold. Two million tonnes of material breached the company’s containment zone and elevated levels of cyanide were later found in a water body adjacent to the mine.
Eagle is located about 375 kilometres north of Whitehorse and 85 kilometres north of the village of Mayo, on the traditional territory of the First Nation of Na-Cho Nyak Dun.
Yukon over the past few weeks has issued Victoria Gold with a slew of directives aimed at preventing another landslide and managing contaminated water onsite. One of those directives is building a safety berm in the area of the rockslide that will allow the installation of wells to capture contaminated water that will be pumped to the surface for treatment.
Lauren Haney, Yukon’s deputy minister of energy, mines and resources, said in a news conference on Friday that the company had failed to meet several deadlines this week, including the need to start construction of both an access road and the berm itself.
Consequently, Yukon has stepped in directly and engaged its own contractors to do the work. For now, the job is on hold because of a nearby forest fire that it is threatening road access. Once the danger passes, the work on the berm is expected to take about two weeks, Ms. Haney added.
The move by Yukon to take over some of the work is an early sign that the territorial government may be moving toward seizing entire control of the site. Earlier this month, government officials said they were fully prepared to do so. Yukon is holding $103.7-million that it received from Victoria Gold that could be put toward the cleanup effort. The funds were originally supposed to be used to reclaim and rehabilitate the site in the event the company didn’t have the financial wherewithal to do so.
There are still many lingering uncertainties over both the collapse and the cleanup effort, including a continuing lack of contaminated water storage capacity at the site, worries about cyanide levels in groundwater and questions over the ability of the company to keep funding the cleanup.
Tyler Williams, a water resources scientist with Yukon’s department of environment, said at the briefing on Friday that monitoring for contamination from the spill will have to continue for years in part because groundwater, unlike surface water, can be very slow-moving.
“We are observing an increase of cyanide in the water,” he said. “This is consistent with what we would expect to see for groundwater, which takes longer to seep into the environment than surface water.”
Victoria Gold currently has no cash flow, owing to its production being suspended. As of the end of March, it was carrying $230-million in debt against only $27.7-million in cash. Earlier this month, the company said it had received notices of default from its creditors. Victoria Gold’s market value has fallen by 92 per cent since the collapse.
When asked how long the company will be able to continue to fund the cleanup effort, Ms. Haney replied that she didn’t know.
“I think we’ve all taken a look at the share price, and it’s not a very positive outlook,” she said. “However, for now, the company remains on site and paying its contractors going forward, and we are pleased to see them doing that.”
Ms. Haney also once again rebuked the company for not issuing enough information to its shareholders and the general public since the collapse occurred more than a month ago.
“It is very unfortunate they haven’t come out with public statements and engagement, and I certainly for one wish they would.”
Victoria Gold chief executive John McConnell did not respond to a request for comment.