Victoria Gold receiver asks Yukon gov’t for another cash injection, raising total cost to $220M | CBC News

The cost of the Victoria Gold receivership — started after a catastrophic heap leach failure at the company’s Eagle Gold mine in central Yukon last year — is set to more than double again.

Firm PriceWaterhouseCoopers (PwC), which has been managing Victoria Gold’s affairs since August, is seeking court approval to increase the maximum borrowing charge to $220 million, up from $105 million. 

In a report this week, PwC said that the current cash is expected to run out by mid to late April, with site operations, program management and emergency work costing far more than initially estimated. It also said it has extensive work planned into the fall, including dealing with millions of litres of contaminated water, draining and stabilizing the heap leach and putting Victoria Gold’s property, including the mine, up for sale. 

The Yukon government has been lending PwC the receivership money and is prepared to provide the $115 million top-up, according to the report.

The Ontario court that’s been overseeing the receivership is set to hear the increase request April 1. 

If approved, it would be the second time the receivership cost has more than doubled. A judge gave the greenlight to the first increase last December, after PwC requested that the borrowing charge be raised from the original $50 million. 

Yukon officials initially estimated the cost of remediating the Eagle Gold mine to be between $100 million to $150 million. 

In its report, PwC said that estimate was prepared with “limited visibility and limited information” regarding conditions on-site following the heap leach failure on June 24. An estimated four million tonnes of ore being treated with cyanide solution slid off the heap that day. About half that material spilled out of a containment area, triggering serious environmental contamination concerns.

While Victoria Gold was initially in charge of the response, the Yukon government applied to have the company placed in receivership less than two months later, arguing that the company was not acting fast enough to protect the environment.

Site team preparing for spring thaw

In the report, PwC said that the mine’s water treatment plant was originally designed to only treat “suspended solids and organic material” in melt and rainwater but has since been modified to treat cyanide. 

A settling pond meant to remove copper from water — used to treat the cyanide — is also functional. 

The site team, the report said, is now actively preparing for the spring thaw, which is expected to bring millions more litres of water to the site. Crews have set up a series of diversions, ditches, sumps, pumps and pipes, with the goal of preventing as much meltwater as possible from mixing with contaminated water.  

The report describes the work planned for April 1 to Sept. 30 as “Phase 3,” with a slate of activities both on and off-site expected to cost upwards of $132 million. Water management on-site will remain a high priority, with another storage pond currently being built and the possibility of more on the way. 

While the transfer of water between ponds will continue, along with water treatment and discharge, plans for Phase 3 include stopping a practice that Victoria Gold implemented shortly after the heap leach failed — recirculating contaminated water and solution back onto the heap. 

The heap and an in-heap pond, according to the report, will then be drained, a process that’s expected to take one to two months as the facility is estimated to contain between 180,000 and 200,000 cubic metres of cyanide fluid. PwC will then re-slope the heap’s upper surfaces to increase stability.

Contractors, along with the Yukon government and First Nation of Na-Cho Nyäk Dun (FNNND), are also expected to continue environmental monitoring both on and around the site, with efforts to be heightened during the spring melt.

There are currently 68 surface and groundwater-monitoring locations at the mine being used to track the movement of contaminants. Studies on fish in nearby waterways are also expected to resume in the summer. 

PwC to start sales process this summer

Separately, the report said PwC will seek court approval no later than June 30 to start the sales process for Victoria Gold’s property, including the mine. 

While the receivership has largely been funded by money from the Yukon government, PwC noted in the report that it has also been able to generate cash by selling some of Victoria Gold’s assets, including hundreds of gold and silver coins and furniture from the company’s Vancouver office. 

Discussions are also underway, the report said, “to develop a plan to monetize gold and certain other precious metals held within the waste materials” at the mine. 

On business dealings, PwC said it’s hired 23 contractors since becoming receiver, nine of which are headquartered in the territory and two of which are owned by FNNND citizens. Several Victoria Gold contractors have also remained employed on-site. 

The report said the firm is in discussions with the Na-Cho Nyäk Dun Development Corporation to create an agreement that would see FNNND “receive income based on a proportion of contractor spend” to help make up for the income that the corporation received via individually-negotiated revenue-share agreements with contractors prior to the receivership.

PwC said it continues to regularly meet with officials from the First Nation, the territorial government and federal agencies.