Yukon Supreme Court Justice Ron Veale has approved a proposal for the sale of the United Keno Hill silver mines in and around Elsa.

In a Yukon Supreme Court appearance this morning, John Sandrelli of PricewaterhouseCoopers told Veale the deal to sell the assets of the bankrupt United Keno Hill Mines Ltd. will close initially on April 14.

Final closure, however, will not come into effect until a new water licence is secured by the Elsa Reclamation and Development Corp., a new company formed by Alexco, a group of corporations and individuals familiar with the Yukon and mining in general.

The judge heard this morning that the buyer is committed to working through the Yukon Environmental and Socio-economic Assessment Act to secure the water license, and is currently in discussions with the Nacho Nyak Dun First Nation to achieve a socio-economic agreement.

Veale approved Alexco as the proposed buyer last year after PricewaterhouseCoopers, the court-appointed receiver, recommended the company from a list of nine bidders for the property.

PricewaterhouseCoopers was scheduled to hold a press conference this afternoon to provide specific details of the agreement.

General submissions in court today indicate the purchase will come into effect April 14. It will close when the water licence is secured, not later than four years from now, and hopefully much sooner, as the judge put it.

The buyer will be required to deposit $10 million to be used for reclaiming existing environmental liabilities, in addition to dedicating 1.5 per cent of smelter returns to reclamation.

Elsa Reclamation and Development Corp. will also be entering into a care and maintenance contract with the Yukon government to ensure existing liabilities like tailings ponds continue to be treated until the company is fully settled in.

Sandrelli also told the court the buyer is committed to spending $5 million in exploration work on the properties over the next two years.

He told the court the $10 million and other financial commitments toward reclamation was by far the greatest amount in any of the nine bids.

Federal lawyer John Porter told the judge it is the intent of the agreement that once the company finishes with its mine life, that ultimate reclamation will be achieved, which won't require ongoing water treatment.

It was also noted that it has been decided that local creditors who attempted to sell the property to recover some of the money will now share in the $410,000 Alexco must deposit with the court.

Initially, after PricewaterhouseCoopers took over the effort to sell the property, local creditors were cut out from any proceeds of sale.

The federal government argued, and the court agreed, that the existing $65 million in environmental liability Ottawa inherited when it declared the mine abandoned in January 2001 far exceeded any amount the United Keno Hill assets would sell for.

Therefore, Ottawa maintained, it should receive all benefits from the sale, except for $410,000 to three Ontario firms that were first in line by right of having worked on the bankruptcy file from the very start.

That $410,000 will now be split among the Ontario firms and the local creditors, with $273,000 going east and $136,000 staying in the Yukon.

Local creditors, however, were owed several million, including some $700,000 to Yukon Energy alone.

It will be up to the creditors to decide how to split the money, Veale was told.

Attempts to sell the mine failed twice in the past. Ottawa was blamed during those negotiations for insisting that any buyer would have to assume responsibilities for all environmental liabilities, from the day mining in Elsa began almost 100 years ago.

The federal government, however, was convinced to change its position when PricewaterhouseCoopers took over. It instead insisted that part of any purchase proposal would weighed in part on a commitment to help reclaiming the properties.