The Government of the Northwest Territories is buying the largest tungsten deposit in North America.

On Thursday, GNWT announced it had made an offer to buy the mineral rights for North American Tungsten Company Limited’s Mactung property in both the Yukon and the Northwest Territories, for up to $4.5 million.

The exact price is not known yet, and is expected to be lower, the government said.

The mining company had planned to run an open-pit mine at the Mactung deposit.

The project received the green light last year from Yukon’s Environmental and Socio-economic Assessment Board.

Those plans were scrapped when the company had to seek creditor protection last June for debts totalling a little under $80 million.

The company cut back on expenses, announcing short-term lay offs of 80 people at the Cantung mine, and obtained a $3-million loan to operate the mine for another couple of months.

The Cantung mine is about 300 km northeast of Watson Lake.

The British Columbia Supreme Court appointed a monitor to work with the company on refinancing options.

They tried to sell the Cantung mine and the Mactung deposit but confidential bids filed to the court were “unacceptable,” according to GNWT.

The mine shut down about a month ago.

Now GNWT has handed the responsibility to clean up the mine site to the federal government, which permitted Cantung decades ago. The feds could also decide to keep it under care and maintenance in case they want to sell it.

“According to the Devolution Agreement, the GNWT was required to diligently pursue all reasonable means to recover debts or realize any proceeds available to it,” explained Andrew Livingstone, spokesperson for GNWT, when asked about the decision to buy the deposit.

“Environmental securities for Cantung were backed by assets at Mactung so this was an approach that met the requirements of the devolution agreement.”

The government has said it plans to sell the Mactung deposit once tungsten’s prices rise to recover the money spent.

On top of transferring the responsibility of caring for the mine to Ottawa, GNWT transferred $6.3 million of cash securities posted by North American Tungsten and $5.3 million in promissory notes.

Despite requests sent on Thursday afternoon, the federal government said it couldn’t provide any answers to the Star by noon today.

The promissory notes are tied to the Mactung deposit.

It is not known if Canada plans to close and reclaim the Cantung mine or keep it under care and maintenance.

Despite forecasts the mine would run out of proven sources of ore by now, NATC board of director member Allan Krasnick told the Star last year he was confident more tungsten could be found.

“We think there is a lot of life left in that old mine,” he said at the time from Vancouver. “We have been operating for 52 years on a one-year mine life.”

The Northwest Territories is also in the middle of a territorial election.

To buy the Mactung deposit, it had to get a special authorization from the territory’s commissioner. GNWT said MLAs would be briefed as soon as the legislative assembly reconvenes after the election.

Calls to the court-appointed monitor, Alvarez Marsal, were not returned by press time today.

Livingstone told the Star the monitor would deal with the creditors.

Of the 215 creditors NATC owes money to, 25 are Yukon companies owed a total of about $560,000.

The Mactung deposit sits along the Yukon-N.W.T. border, just inside the Yukon border and 170 km north of the Cantung Mine.

The only road leading to the Cantung Mine is in the Yukon.

Yukon government officials weren’t able to say by press time who would maintain that road now that the mine has shut down.