The Yukon government will spend $12 million looking after the abandoned Wolverine Mine site this year, says Energy, Mines and Resources (EMR) Minister John Streicker.

He delivered a ministerial statement to the legislature Tuesday to provide an update on the status of the mine site, which has been in receivership for almost seven years.

“Since 2018, the Government of Yukon has spent $24 million on care and maintenance, water treatment, administrative costs of the receiver, and legal fees,” Streicker told the legislature.

“About $10.5 million of that spending was recovered from financial security posted by Yukon Zinc Corporation,” the minister said.

“We expect to spend approximately $12 million in the 2022-23 fiscal year on ongoing care and maintenance and water treatment, urgent works to address higher-risk areas at the site, remediation planning, and administrative costs of the receiver as they transition from their role.”

The Chinese-owned Yukon Zinc Corp. filed for bankruptcy in 2015 after almost four years in production – during which time it lost $196 million.

At the time of bankruptcy, Yukon Zinc owed approximately $650 million, of which $600 million was owed to Jinduicheng Canada Resources, the parent company.

Some 300 workers were laid off and lengthy bankruptcy procedures saw those companies owed money receive just 11 cents on the dollar.

The security deposit of $10.5 million has been used up. The Yukon government is responsible for care and maintenance and the cost of closing and remediating the mine site, as it approved and permitted the mine.

Receiver PricewaterhouseCoopers filed its eighth report to the court in January.

The receiver concluded the mine’s sale is unlikely, and the best course of action was to terminate the sale process and transition the ownership to the Yukon government. It’s expected the transfer of ownership will occur this fall.

“With respect to Wolverine, we will continue to address the problems left behind and clean up the site,” Streicker told the legislature.

“In the words of the site manager, ‘it’s time to put this to bed.’”

EMR communication analyst John Thompson said this morning they’ve hired an engineering consultant to review and update the closure and remediation plan developed by Yukon Zinc.

When that work will be completed is unknown at this point, as is an updated estimated cost of reclaiming the mine site, Thompson said.

In his address to the house, the minister did lay some of the responsibility for the Wolverine mine situation on the former Yukon Party government – which permitted the mine.

Mining and exploration, he said, is the backbone of the Yukon’s economy. It was largely the reason behind why the territory was only one of two jurisdictions in Canada that saw growth in their gross domestic product in 2020, he said.

“Unfortunately, the Yukon Party government and Wolverine have given us a textbook example of what not to do in mining,” Streicker said.

“The Yukon Party allowed Yukon Zinc to fall millions of dollars behind on security payments. Quoting the former minister, ‘... when it comes to the Wolverine mine, we chose not to shut down the mine...’

“Indeed, they let it continue to operate for months while no payments were made.”

Streicker noted it isn’t just taxpayers left holding the bag. Plenty of Yukon businesses were owed money, and many of those companies received only 11 cents on the dollar, thanks to the mismanagement, he noted.

NDP Leader Kate White expressed concern and disappointment regarding the state of affairs around the Wolverine Mine.

Yukoners know all too well the costs of poorly regulated mines like the Faro and Mount Nansen mines, she told the house.

She said the public was promised a new way of mining that would be done sustainably to the benefit of Yukoners and businesses.

“With modern mining and regulatory regimes, economic and environmental disasters were supposed to be a thing of the past, yet here we are with Wolverine, a mine that failed to pay its full securities, a mine that ignored its obligations in the mine closure plan, and a government of the day that failed in its responsibilities,” she said of the former Yukon Party-led regime.

White noted the Wolverine Mine was permitted by the Yukon after the responsibility for mine and exploration was transferred from the federal government on April 1, 2003.

Therefore, she noted, the cost of care and maintenance and closure of the mine site falls to Yukoners.

“So, what has the Yukon government learned from this experience?” she asked.