The Yukon government is seeking a court-appointed receiver to take over control of the troubled Wolverine Mine owned by the Yukon Zinc Corp.

The government announced Thursday morning it filed the petition with the Yukon Supreme Court on Wednesday afternoon. The matter is scheduled to be heard Aug. 1.

The government has been on the site since last fall assisting with the water treatment, alongside a skeleton crew of Yukon Zinc employees who are looking after care and maintenance of the site.

“This action is to move forward on several outstanding issues with the mine’s owner,” says the government’s announcement.

“These issues include financial security owed and non-compliance related to water management at the mine site.”

The Wolverine Mine has been in a state of demise and uncertainty since Yukon Zinc suspended operations in January 2015.

Subsequent bankruptcy proceedings saw many Yukon companies and companies from Outside receive pennies for every dollar they were owed, though Yukon Zinc retained ownership of the asset.

The most recent assessment indicates the required security deposit to cover the cost of reclamation sits at $35.5 million but Yukon Zinc has posted $9.1 million.

Communication officer Brigitte Parker of the Department of Energy, Mines and Resources (EMR) explained Thursday the government has drawn down $1.4 million of the security to assist with ongoing work at the site.

The petition filed Wednesday states Yukon Zinc has been found repeatedly to be in non-compliance with its water licence over the years since it suspended operations.

It was fined $20,000 in 2016 on two charges of being in breach of its water licence and two charges of failing to comply with directions from the government inspector. It was fined a further $78,000 in April 2018.

The petition says Yukon Zinc has been warned several times over the years about non-compliance issues.

Of the $1.4 million in security seized by the government, $635,758 had been expended by July 15, its says.

The petition points out Yukon Zinc informed the government last summer of the potential sale of the mine to Phoenix Global Investments, which might lead to the recommencement of mining operations.

The government was informed last month the deal fell through, and that Jinduicheng Canada Resources Corp., Yukon Zinc’s Chinese-owned parent company, would resume ownership, says the petition.

The government argues it needs to take control to bring order to the uncertainty at the site, and enable open and transparent dialogue with Yukon Zinc’s employees, its creditors and the Kaska Nation.

It argues it needs control to facilitate, if necessary, the marketing and sale of the mine.

The government argues that Yukon Zinc’s declining ability to look after the mine site necessitates the appointment of a receiver.

A receiver is needed to prevent escalation of environmental concerns before the remaining security runs out and the burden of looking after the mine falls to Yukon taxpayers, says the petition.

EMR Minister Ranj Pillai explained this morning the priority is to stabilize the mine site.

The next steps will be determined in consultation with the receiver if the Supreme Court agrees to appoint one, he told the Star.

Pillai explained the sale of the assets is very much a real possibility to ensure Yukoners are not left on the hook.

The total environmental liability at the Wolverine Mine right now is $35.5 million, or the estimated cost of reclamation, he said.

If the assets are sold and the required $35.5 million is recovered, Pillaid said, it would then be up to the new owner to determine the future of the mine.

The remaining security in place will be enough to the cover costs of looking after the site for a number of years going forward, he said.

Pillai said Yukon Zinc has said they have a couple of parties interested in buying the mine.

“I am going to recover our money,” he said from Quebec City, where he was meeting with fellow agriculture ministers from across the country.

“For me, it is about Yukon’s reputation as a destination for investment and also for environmental stewardship.”

The Wolverine Mine was approved and permitted by the Yukon government after the authority for lands and resources was transferred from Ottawa to the territory on April 1, 2003.

Yukon government officials have been directing untreated water coming out of the mine portal to the tailings pond. Current efforts are focused on establishing a temporary system to treat the water from the portal.

There are also plans to build a water treatment plant later this season to begin treating water in the tailings pond, Parker explained.

She said the cost of a new treatment plant is not known, as the contract has not yet been tendered.

Alex Wu, the manager of corporate communications with Yukon Zinc, indicated by email Thursday the company will not comment on the government’s decision to seek a court-appointed receiver.

The government’s Thursday announcement said it’s seeking a receiver to “safeguard the public interest as well as ensure ongoing environmental protection at the Wolverine Mine.”

If appointed, the receiver would assume care and control of the Yukon Zinc Corp., says the announcement.

“The appointed receiver, with the Government of Yukon, would also take over ongoing care and maintenance operations at the Wolverine Mine site.”

The announcement notes Yukon Zinc, the Ross River Dena Council and the Liard First Nation have been notified of the petition to the court.