PwC to sell disaster-hit Eagle gold mine in Yukon

[Redator]

One year after the Eagle mine in Canada’s Yukon Territory suffered a catastrophic landslide, the company overseeing Victoria Gold’s former site is looking to sell the mine as the cleanup effort proceeds.

PricewaterhouseCoopers, which became the receiver for the company and mine last August, announced in mid-June it was preparing to sell the mine and its related assets.

“I don’t want to say we’re out of the woods yet but it’s moving in the right direction,” Yukon Mines Minister John Streicker told The Northern Miner in mid-June. “We’re seeing cyanide, mercury, other contaminants on a downward trajectory. We were deeply concerned about…spring melt and luckily it did not overwhelm the system. We have groundwater being pumped, intercepted and treated.”

On June 24 last year, the collapsed heap leach pile unleashed millions of tonnes of ore and at least 280,000 cubic metres of cyanide-containing solution beyond containment. It triggered Victoria Gold’s receivership six weeks later. In just a year, PwC has had to boost storage, speed up water treatment and secure new financing. 

Eagle for sale  

In a June 16 report, PwC stated that it would seek court approval to sell Eagle, and that it retained BMO Nesbitt Burns as PwC’s financial adviser in the sale. PwC didn’t specify the price it would seek, though a PwC report from last year estimated the total value of Eagle’s assets at C$824.7 million ($600m).

The Yukon government wouldn’t necessarily have input into who buys Eagle, Streicker said.

“We want a company that’s going to have the financial wherewithal to deal with the situation and take the time to get it right,” he said. “We want a company that’s going to work with the First Nation of Na-Cho Nyäk Dun and make sure that they’re feeling on solid ground.”

The Northern Miner has requested further comment from PwC.

Defraying costs

In early June, PwC announced that it had restarted the adsorption, desorption and recovery (ADR) plant at Eagle to limit impacts on the water treatment plant and recover gold to help offset funding requirements for the site’s remediation. The ADR would function in a closed system and its operation isn’t considered mining, it wouldn’t contaminate water at Eagle, and no cyanide would be added, PwC said.

Crews at the site assayed some samples and discovered it was worthwhile to process ore in the ADR, Streicker said.

“[The receiver] said that they felt that their estimates were very conservative. They had based it on an earlier price of gold, which was much lower, [and] there will be more value there from what was originally projected.”

Court approves $74m borrowing to fund Yukon Eagle mine cleanup

The gold recovery wasn’t conducted earlier on because the cleanup was focused on water management, storage and treatment, Streicker said. He didn’t know how much gold has been recovered or to whom it has been sold.

The ADR restart was anticipated by the government, Streicker said, to help costs from rising higher. In April, the Yukon government topped-up its lending agreement with PwC, adding C$115 million through Sept. 30. The increase brought to C$220 million the amount Yukon has authorized to PwC, after C$105 million was approved last year.

Rock slide remains 

Streicker acknowledged challenges remain at the site. Of the 4 million tonnes of landslide rock, about half left containment and remains in the Dublin Gulch area at Eagle, below the heap leach pad.

“That will have to go somewhere at some point, or, maybe [they’ll] just wash it. But you have to decide first whether the heap is safe or stable,” he said. “I don’t think we have that timeline in hand yet, because some of that depends on what you do with the heap, and what you do with the heap depends on the safety of it, which depends on what was the cause of the slide.”

Expert panel report 

Much of that hinges on the conclusions of the three-member expert panel tasked last September with investigating the cause of the accident. The report, due in July, may also comment on charges against Victoria Gold.

Streicker said the panel’s findings on the accident “will cause some serious reflection.”

“Mining is critical and…it’s critically important that we get it right from an environmental perspective, from how mining affects our communities, from relationships with First Nation governments, it just is so important that we not have this type of risk.”