Victoria Gold's Eagle gold mine site in Yukon, on July 3. The cost to clean up the contamination and remediate the site has been pegged at up to $150-million by the Yukon government and projected to last into next year.HO/The Canadian Press
Efforts to clean up a massive cyanide spill at the Eagle gold mine in the Yukon have faltered after the receivership of Victoria Gold Corp., potentially posing new threats for the environment, a former top engineer at the company says.
Four million tonnes of cyanide-laced rocks collapsed at the company’s outdoor gold-processing facility in late June, causing massive damage to mine infrastructure and contamination. About two million tonnes of contaminated materials broke through the company’s containment zone and spilled into the local environment, killing fish and raising concerns about groundwater pollution.
In the weeks after the disaster, the Yukon government issued numerous directives to Toronto-based Victoria Gold to address the spill, including building additional water storage sites for contaminated water, treating the effluent and an order to build a containment berm aimed at protecting the site in the event of a new rock collapse.
An Ontario judge determined last month that Victoria Gold didn’t have sufficient funding and wasn’t moving with enough urgency to address the Yukon government’s directives, so the company was put into receivership. While some legacy Victoria Gold employees remain at the Eagle mine, the cleanup is now being overseen by receiver PricewaterhouseCoopers Inc., with Parsons Inc. serving as the lead environmental consultant, and the Yukon government providing the funding.
Nicolas Harvey, former manager of engineering and projects at Victoria Gold, who left the company after it was placed in receivership, said in an interview that instead of environmental remediation work speeding up after the receivership, progress has instead slowed dramatically.
“The government’s initial emphasis on urgency and environmental concerns seems to have faded, replaced by delays and inconsistencies,” he wrote in an e-mail sent to The Globe and Mail. “This is in stark contrast to the stringent and unrealistic demands imposed on the company and which were the basis for the receivership application.”
Mr. Harvey points to several examples. Before the company was put into receivership, he said the Yukon government had demanded Victoria Gold build a massive, lined pond to store tainted water and gave the company a five-day deadline, as well as giving it just four days to put in place unattainable water treatment goals.
“In contrast, the receiver takes a month to complete a much smaller pond, and a new water treatment contractor, ousting the existing contractor, gets weeks to ‘get up to speed,’” he said.
Mr. Harvey said that the company under receivership has been unable to effectively treat massive amounts of contaminated water. The two legacy storage ponds are nearing capacity, he said, citing as evidence conversations with multiple existing employees. With wet weather expected in October, the chances of the ponds overflowing appear high, he said.
“Unless you start treating it, it’s going to overflow.”
Before the receivership, the Yukon government had also demanded the company build a $15-million safety berm within a tight window. Former Victoria Gold chief executive John McConnell told The Globe last month that the company didn’t proceed with the berm construction because the design and engineering behind it weren’t sound.
Mr. Harvey reviewed the berm plans the Yukon government had in mind and concluded they were amateurish.
“They sent over a design, which was just like a 3-D shape with no thought put into to it, and they’re like, ‘Hey, build this.’”
After the company went into receivership, the Yukon government said that plans for the berm construction were proceeding, but a month later it remains unfinished.
“This isn’t just about missed deadlines; it’s about a blatant double standard and changing goalposts,” said Mr. Harvey.
The Globe sent a detailed account of various allegations made by Mr. Harvey to the Yukon government for comment. In an e-mail to The Globe, John Thompson, a spokesperson for the government, did not address the specific allegations, but said that “protecting the environment and ensuring the safety of Yukoners” remains its top priority.
Mr. Thompson added that, since receivership, progress has been made on directives previously issued by the government to Victoria Gold, and that the government’s compliance, monitoring and inspections branch is conducting regular inspections at the mine.
Anuja Kale-Agarwal, national communications director with PwC, in an e-mail to The Globe, said the firm doesn’t comment publicly on active receivership proceedings.
Eagle is located about 375 kilometres north of Whitehorse and 85 kilometres north of the village of Mayo, on the traditional territory of the First Nation of Na-Cho Nyak Dun.
The cost to clean up the contamination and remediate the site has been pegged at up to $150-million by the Yukon government and projected to last into next year. Yukon government officials have said they expect to fund the cleanup in part by from $103.7-million in surety bonds the company previously deposited with the territorial government.
Victoria Gold collapsed owing US$173-million to secured creditors, including a syndicate of Canadian banks, and a further $82.7-million to unsecured creditors, according to PwC. The company held only $24-million in cash as of the end of June. The book value of the company’s assets, which includes the mine itself, associated infrastructure and inventory, was estimated at $824-million.