The Yukon government is already plowing through the Minto mine’s security fund to make sure the site stays environmentally sound and ready for potential reclamation – while also trying to keep it viable for continued operation as PricewaterhouseCoopers (PwC) tries to find a buyer.

Almost $6 million has been spent so far, and the government has inked contracts for $20.5 million more worth of work.

“We’ve stepped in to keep things moving,” said Karen Furlong, project manager for Boreal Engineering, which has an $11.6-million contract to oversee reclamation efforts through next May at the site.

“By keeping things moving, I mean water treatment, I mean any kind of environmental monitoring, supporting people for all of that, road maintenance, that type of thing.”

The money is to come out of a $75.2-million security fund Minto Metals had paid into before shutting the mine down.

The government is putting up the money at first while it works out the details on accessing the fund, according to Energy, Mines and Resources Minister John Streicker.

Minto was a copper-producing mine about 240 kilometres northwest of Whitehorse until owner Minto Metals suddenly closed and abandoned the site in mid-May.

This left dozens of contractors and Minto employees – as well as the local First Nation and the Yukon government – heading to court to try to recoup money they say is still owed to them.

Some of these debts were settled in the B.C. Supreme Court in July, in a decision which also allowed for PwC to be appointed as a receiver to sell off the mine and its assets.

PwC documents show over $66 million in claims of debt are still outstanding, with some amounts yet to be determined, such as what may be owed to ex-employees.

The security money cannot be used to settle these debts and it is still unknown if it will even be enough to cover the cost of cleanup at the site, should the mine not sell.

At the time of the mine’s closure, Minto Metals still owed $18 million to the security fund as the government had assessed reclamation costs at about $93 million.

“Initial indications are fairly good that the security that we have is around the amount that we need,” Streicker said in an interview.

He does acknowledge it could be close.

“There is some uncertainty in that,” he said. “I don’t want to be so definitive as to say we know the number exactly, but in terms of the ballpark, that is pretty close.”

Lewis Rifkind of the Yukon Conservation Society painted a bleaker picture of whether the money would be enough to cover reclamation.

“That literally is the million-dollar question,” he said. “I suspect it won’t be.”

PwC has now listed the mine for sale on their website and outlined the process involved.

They will be accepting initial non-binding bids until Oct. 6, with the expected date for court approval of a successful bid on Jan. 26 of next year.

Bids will be evaluated for factors such as sale price, the bidder’s financial strength and mining expertise, the impact on former Minto employees, and whether the bidder buys the whole site or leaves some in receivership.

Both PwC sales documents and Streicker say it is also important how any buyer plans to work with the local Selkirk First Nation, as the mine is on Class A settlement land.

Streicker is headed to Japan today to meet with a few companies in the copper business – including Sumitono, which was a primary buyer from Minto Metals, and Mitsubishi, which owns a stake in the proposed Casino mine project – but he says it is not necessarily a sales trip for the Minto mine.

“I don’t know that we would be talking about the situation at Minto specifically, I think it’s more in general terms about working with the Yukon as a potential copper supplier,” he said.

Whether a bidder steps in to buy the site, Streicker says the government is not taking chances.

“We’re not making assumptions about whether there is a successful re-sale of the mine or not,” he said.

“Our position is that the security was collected in order to make sure the site was reclaimed and closed well, and that is the steps that we should be taking.”

Reclamation efforts began as soon as the mine site shut down in May with the sudden announcement of its closure and abandonment by parent company Minto Metals.

Initial efforts were focused on maintaining the water treatment facilities during spring snow-melt.

The government decided to use a contractor that had worked at the mine and was familiar with the site, doling out several million dollars to stop contaminated water overflowing the tailing ponds.

“Because we’ve had good success early in terms of how we treated water right away, that changes that risk profile over time,” Streicker said.

“That’s very typical that you would have some initial costs to make sure things are good and safe and moving in the right direction.”

Boreal Engineering has since been brought in to keep the site ready to be re-opened, or to be fully wound down, depending on guidance from the government.

“We’re taking our instruction from Yukon government at this point,” Furlong said.

“Status quo is where we’re at in terms of keeping things moving.”

Boreal is a local Yukon-based engineering company that works in several closed mine sites, including the defunct Ketza River and Wolverine mines.

Besides maintaining water treatment and sewage systems, Boreal is also working to remove equipment from the underground areas of the mine, which may or may not continue to be used in the event of a sale.

This is part of the delicate balance between preparing for closure and keeping the essential services at the mine running.

“Of course, we try to do that in a way that should support if there is a future buyer coming into play,” Streicker said.

If there is a purchaser, he said, number one will be making sure the environment is protected and money for future environmental protection doesn’t come out of taxpayers’ dollars.

The big question is whether underground operations are going to continue in the same place and the same way as before. If some of the old underground areas are unwanted by a new buyer, then the current security fund would continue to pay for their closure.

Streicker said there was likely not much copper ore left in the area they were mining when the mine was abandoned.

“It might be that they move back into a phase where they are proving out the other areas of deposit,” he said. “That’s at the discretion of that buyer.”

The buyer would then have the security fund adjusted to take into account their actual operations.

Rifkind cast doubt on PwC being able to find a buyer for the entire mine site considering the financial calculus involved.

He speculated buyers may come in to buy bits and pieces of the mine and equipment, perhaps taking just the claims themselves or just the plant and equipment.

He also noted that some of this equipment may depreciate in value as a sale is worked out, and that some of the valuation for the ore may not take into account the cost to get that ore out of the ground.

This all starts to look like a difficult financial puzzle. PwC values the mine and its assets at $76 million.

They also show in documents that the creditors are seeking $66 million in debts to be repaid, with potentially more to come if money owed to ex-employees is included.

Add this to the $26.4 million in security money already spent and the extra $18 million Minto Metals had owed the government when they closed the mine.

It is not to say that a buyer would necessarily have to pay the same security amount, or that the sale would have to reach an amount where PwC could pay off those debts in full, but Streicker did say the Yukon government wants a sale that supports these creditors as much as possible.

“Financially, it’s starting to look pretty messy,” Rifkind said.

“We also might be headed to a point where nobody wants to buy the site.”