A satellite image shows Victoria Gold’s Eagle Gold Mine in the Yukon Territory after a landslide. Four million tonnes of cyanide-laced rocks collapsed June 24 at an outdoor heap-leach processing facility.Supplied
The Yukon government is contemplating seizing control of Victoria Gold Corp.’s VGCX-T Eagle mine site, as doubts grow about the company’s ability to prevent further environmental damage after a catastrophic heap-leach failure last month.
Four million tonnes of cyanide-laced rocks collapsed June 24 at an outdoor heap-leach processing facility at the gold mine in central Yukon. Two million tonnes of material breached the company’s containment zone and elevated levels of cyanide were later found in a water body adjacent to the mine.
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.
Over the past few weeks, Whitehorse-based Victoria Gold has been attempting to store and treat all of the contaminated water at the mine site. However, Yukon government officials said Thursday the company is running out of space in storage ponds and currently isn’t able to treat all of the effluent.
As a temporary measure, Victoria Gold is pumping contaminated water from the ponds to the heap-leach facility as it builds more storage capacity. Officials were unable to guarantee that the company can construct enough storage space, and acknowledged that its water treatment facility isn’t designed to handle the extreme level of contaminants in the water.
Lauren Haney, Yukon’s Deputy Minister of Energy, Mines and Resources, at a news conference on Thursday, said that while the territorial government is still working closely with Victoria Gold and issuing directives on how best to manage contaminated water and prevent another landslide, it may be forced to take matters into its own hands.
“The Yukon government is contemplating and is ready to step in and take action to complement or supplement what’s already being done on site,” she said.
When asked if the government might seize entire control of the site, she replied, “We of course are contemplating the possibility. We are looking at all the scenarios right now.”
Yukon water regulator said Victoria Gold mine ‘flouted’ licence, saved millions, long before spill
Victoria Gold on July 12 raised doubts about its ability to fund the remediation of the site. Earlier, the company said it received notices of default from creditors. As of the end of March, the company had $27.7-million in cash versus $230-million in debt.
Since the accident occurred, Victoria Gold has given out only sparse amounts of information and has mostly left it to the Yukon government to communicate the various steps the company has taken. Ms. Hainey on Thursday rebuked Victoria Gold for not disclosing enough to the market about the situation.
“It is very unfortunate and frankly unhelpful that the company has been so silent in general, and specifically around the actions that they’re taking at site,” she said.
Victoria Gold chief executive officer John McConnell did not respond to a request for comment.
Yukon is holding $103.7-million that it received from Victoria Gold that could be put toward the cleanup effort. The funds were originally supposed to be used to reclaim and rehabilitate the site in the event the company didn’t have the financial wherewithal to do so.
Heap leaching involves stacking mined ore into outdoor piles and then sprinkling it with water laced with cyanide. The solution causes gold to leach from the ore into a lined pond. The mixture is then pumped to an enclosed facility, where the precious metal is collected
Heap-leach pads must be monitored continuously to make sure the rock piles are stable and the cyanide solution is effectively percolating through the ore.
While rare, heap-leach accidents can be devastating. Earlier this year, nine workers at a gold mine operated by Canadian company SSR Mining Inc. SSRM-T died after a heap-leach failure in Turkey.
Barrick Gold Corp. ABX-T in 2017 experienced a cyanide leak after a pipe rupture at a heap-leach facility at its Veladero mine in Argentina. Barrick was able to prevent the leak from escaping a containment zone.