Photo by Whitehorse Star
Major mine is changing hands, minister says
It’s looking like the Yukon Zinc Corp. has sold the Wolverine Mine, the legislature has been told.
It’s looking like the Yukon Zinc Corp. has sold the Wolverine Mine, the legislature has been told.
“As of today, it looks like there’s a new owner who wants to restart and open the mine,” Energy, Mines and Resources Minister Ranj Pillai told the house during committee of the whole discussions last Thursday.
“There was a negotiation that was ongoing for the last number of weeks. That has now subsided with that particular group.”
Pillai said his department did support the process.
The “new ownership group” was in discussions with the Yukon Water Board as early as last Thursday morning, the minister told the legislature.
Alex Wu of Yukon Zinc’s corporate communication office indicated by email this morning the privately owned Chinese company will not be commenting on the sale at this time.
“Yukon Zinc is working towards closing of an agreement and the process is expected to take at least a few weeks,” Wu wrote. “We would not be announcing publicly on the outcome of the transaction at this time and will only do so when it’s finalized.”
The Wolverine Mine has been in temporary closure since January 2015, when its financial woes boiled over and the company announced it was shutting down production.
The suspension of production at the mine, southeast of Ross River, resulted in the layoffs of approximately 200 people.
In the following months, it went through bankruptcy protection in which many Yukon companies and companies from outside the territory received 11.5 cents for every dollar they were owed.
Records put before the bankruptcy court showed Yukon Zinc had lost well over $100 million in each of the three years it was in production.
A year ago this month, the company announced its intentions to seek new investment to restart production, as well as the transition of Yukon Zinc to a publicly traded company over the next five years.
It had spent the previous six months working with a well-known Canadian firm to update its resource estimate to stock market standards, as well as its preliminary economic assessment, it said at the time.
Yukon Zinc is currently in contravention of its Quartz Mining Licence, Bob Holmes, the director of the government’s mineral resources branch, told the Star this morning.
Holmes said the company has not posted the additional $25 million to bring its security deposit into compliance.
It’s also in contravention of the condition that it install hydraulic bulk heads at two locations in the mine to prevent untreated water from escaping, he explained.
Holmes said the level of water in the tailings pond is also above what’s permitted in its licence.
As well, the company has failed to install additional water treatment facilities as required.
The compliance, monitoring and inspection division is currently in discussion with the Department of Justice regarding the issues of non-compliance, Holmes said.
It was also noted in the legislature last Thursday that the Yukon government is planning to take $6.5 million out of the $10.5 million Yukon Zinc has posted in security to purchase additional water treatment capabilities.
Premier Sandy Silver told the legislature “urgent works are underway to treat water from the underground mine and to discharge it into the Go Creek.”
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Comments (12)
Up 10 Down 3
grrr on Oct 19, 2018 at 3:01 pm
Does the 1/2 cent on the dollar Yukon gets in royalties sound right for all the destruction that is done?
Up 20 Down 6
ProScience Greenie on Oct 18, 2018 at 1:26 pm
You can't build solar panels and wind farms without hard rock metal mines.
Up 22 Down 3
Bandit on Oct 18, 2018 at 1:25 pm
@Robert Scott
I agree on many points you make (especially our seasonal Greenpeace members).
I do support mining, I have lived here for many years and have depended on mining directly and indirectly to make a living, with that being said I don't agree with the way some of the mining companies leave a mess for us to deal with, but I would put that on the YTG (yes I said YTG) for letting it happen and not intervening beforehand.
@ Iloveparks
If it wasn't for mining, you wouldn't have a Prius - never mind the batteries to put in it. I think the quote is "Before it is yours it is mined".
Up 13 Down 6
Ilove Parks on Oct 18, 2018 at 2:10 am
The batteries in my Prius have lithium and cobalt in them so mining has to be good?
Up 7 Down 14
Ilove Parks on Oct 18, 2018 at 2:08 am
Mining is the answer but the question posed is very sad.
What industry pays well and then falters and leaves a mess? But then it rises again and pays very well for government funded cleanups. Ohh, you must mean mining and it has to be good because my coffee pot and car comes from mines.
Up 29 Down 9
Robert Scott on Oct 17, 2018 at 4:08 pm
Late fall and all the tree hugging granola crunchers are finished hiking, biking and paddling and are all ganging up on mining again. Welcome back, we missed you. It's been relatively enjoyable while you were out tearing up the Yukon. I see you are as negative as ever about mining. Unfortunately, your narrow view of resource extraction hunkers back to an era when the federal government controlled our land. All past mining problems can and should be attributed to the federal government.
The Wolverine mine is the first casualty directly attributed to Yukon Governments. I don't like the fact that this occurred nor that we are likely on the hook for this clean up. It's unfortunate that our government failed to do its job correctly. However, we need to hold their feet to the fire to ensure it doesn't happen again.
We do need mining in our future for jobs and revenue! And we need to do better makeup insure they pay sufficient money in advance to pay for damage and bankruptcies. The problem is all you folks want to do is stop any and all mining development. Very short sighted on your part. The provinces subsidizes to the tune of $1 billion plus a year. How long do you think this can or should go on? Many Yukoners rely on mining for work including direct employees and many small businesses and their employees. So, it is safe to say we all need jobs to survive. We can't all work for government or be teachers, lawyers or retailers etc. Miners are pretty much the only ones creating new wealth in the Yukon. Everyone either gets payed through taxpayers or are paid by recycling money. Hopefully you will learn to take your blinders off and see the broader view. That resource extraction is a necessary piece of the Yukon economy.
Up 10 Down 6
YT on Oct 17, 2018 at 3:07 pm
So YG is taking 6.5 out of the 10.5 million security to deal with tailings pond levels "above what’s permitted in its licence."
The premier has confirmed this is "urgent", so what happens when the next crisis happens and we only have $4 million left in the security?
Rhetorical question; we know what will happen...
Wonder what's going to happen at Minto/Capstone?
Up 18 Down 4
Binjster on Oct 17, 2018 at 2:33 pm
Obviously a failure in the tailings pond is not desirable. Seems to me the regulation thereof ought to include not only an independent, qualified board to monitor and step in if necessary but a bond to cover it until decommissioned.
As for mining the people who are "agin it" need to show me that their lifestyle uses no electricity and only wood and stone cut with wood and stone tools... also no clothing except cotton, wool and furs...
Up 17 Down 20
Northern Knight on Oct 17, 2018 at 11:25 am
What a joke. They lose $100 million a year for 3 years. And they do not meet the clean water standards. And the government (YTG or Federal) will end up paying for the cleanup.
Typical. I get so sick of people saying 'mining is the answer in the Yukon'. Heard all that nonsense with Faro, and how many millions is it going to cost to clean up that mess.
Yes, mining is the answer. But the question it answers is: what industry causes the most environmental damage and costs the most long term?
Up 19 Down 9
George Balmer on Oct 17, 2018 at 8:08 am
Keno, Faro, Minto, Wolverine....it doesn't matter who, the death cycle of a mine is always the same; After the main deposits are depleted a series of new owners each with promises of better management and more effecient production, while assets are plundered and Governments milked.
Up 19 Down 10
Oldtime on Oct 16, 2018 at 6:42 pm
This pattern of opertation is getting old.
Old company goes broke, screws everybody over, fails to meet enviromental and water regulations.
Fins a new buyer. New buyer approaches the government with cap in hand. Promises of doing everything right. Asks for concessions on current infractions.
Government gives them the world. 5 years later, bam the cycle repears itself.
How many times did we see this scenario at Faro over the last 50 years?
New government new suckers.
Hang on to your hat!
Up 15 Down 7
YukonMax on Oct 16, 2018 at 3:55 pm
Here we go again. A few days after Minto's closing announcement... Has the service industry swallowed the last pill yet...whole? In real life, you buy something that is already working and showing profits in the books.
I'm not buying. But I hope some people in the industry will get jobs and see some paydays before it goes belly up again. Every little bit counts here and there.