The territorial government can proceed with its application in Yukon Supreme Court to seek a court-appointed receiver to take control of the troubled Wolverine Mine.

The mine is owned by the Yukon Zinc Corp.

Justice Suzanne Duncan of the Yukon Supreme Court issued the ruling this morning on a procedural question that arose a day before the receivership application was to be heard Aug. 1.

Today’s ruling allows the Yukon government to continue with its application to have a receiver appointed for the mine, which has been in temporary closure since January 2015.

No date had been set yet for a new hearing as of this morning.

Prior to the scheduled Aug. 1 hearing, Yukon Zinc filed a notice of intention in the Supreme Court of British Columbia to have a trustee appointed under the Bankruptcy and Insolvency Act.

The notice of intention requires that all other court proceedings related to the matter be put on hold for up to six months, though there can be exceptions under the right circumstances, Duncan explained in her 18-page decision.

Given the deteriorating state of the Wolverine Mine site and the risk that Yukon taxpayers could be on the hook if things go further south, Duncan ruled, the Yukon government can proceed with its application in Whitehorse.

The Yukon government is seeking the appointment of a receiver so that it can take control of the mine site and the $9 million Yukon Zinc has posted for security, under the supervision of the receiver.

The government has already seized $1.44 million of the security, of which $635,758 has been spent providing priority care and maintenance determined by government inspectors.

In its application to the Yukon Supreme Court, the government notes there is substantial work to be done to stabilize the site, including the construction of a new water treatment plant.

It asserts that Yukon Zinc is failing to live up to the obligations set out in its Quartz Mining Licence and its water licence while in temporary closure, despite several requests from government inspectors.

Yukon Zinc is also short $25 million on the required reclamation security and has not made any attempts to provide the full amount, despite repeated requests, the government points out in its application.

The government notes that it will use the posted security to stabilize the mine site, and could ultimately pursue the sale of the mine to recover the full amount of the security owed.

It’s planning to spend $6 million of the posted security this fiscal year and in the 2020-21 fiscal year, according to information before the court.

In her decision, Duncan noted how Yukon Zinc had indicated a sale of the Wolverine Mine was imminent. But she also noted that twice before, Yukon Zinc indicated the sale of the mine was near, but neither time did it materialize.

Yukon Zinc, a Chinese-owned company, suspended operations in January 2015.

It filed for bankruptcy and settled with creditors in the Yukon and outside the territory, many of whom received pennies on the dollar.

But the company retained ownership of and responsibility for the Wolverine Mine.