Capstone Mining’s Minto mine photographed in 2015. An Ontario-based contractor has gone to court seeking a miners lien against the owner of the now-defunct Minto mine, alleging that the company owes it more than $3 million. (Courtesy of Capstone Mining)

Contractor seeks miners lien against Minto mine owner, claiming $3M in unpaid bills

Dumas Contracting Ltd. claims that Minto Explorations Ltd. owes it more than $3 million

An Ontario-based contractor has gone to court seeking a miners lien against the owner of the now-defunct Minto mine, alleging that the company owes it more than $3 million.

In a petition filed to the Yukon Supreme Court Feb. 5, Dumas Contracting Ltd. claims that Minto Explorations Ltd., a subsidy of Capstone Mining Corp., owes it a combined $3,150,025.17 before interest for a 2012 mining services agreement and five separate equipment leases.

Dumas is seeking a declaration that it has a valid miners lien — basically, ownership until Minto’s debt is dealt with — on the mine, its minerals and “all fixtures, machinery, tools, appliances and other property in or on the Mine” for the amount it says it’s owed.

Under the Yukon’s Miners Lien Act, the lien would give Dumas priority over any of Minto’s other creditors.

The case has not yet been heard in court.

The petition also names the Bank of Nova Scotia, 39539 Yukon Inc., Northwest Vaccuum Service Ltd., Finning International Inc. and Inland Kenworth as respondents, stating that all five companies have claimed security interest in the Minto mine or its associated property.

According to the petition, Dumas had an agreement with Minto, effective July 10, 2012, to provide the mine with mining services and equipment.

Under the agreement, the petition says, Minto was obligated to pay for Dumas’s services and materials, equipment provided by Dumas, expenses for Dumas employees to travel to and from the mine and “all reasonable actual costs associated with the complete or partial demobilization and remobilization of the Contractor’s forces and equipment.”

A page on Dumas’s website about the Minto mine says that it was originally hired on “to develop Minto into an underground ramp-access portal mine” and to provide “mechanical, electrical and engineering services” to the site. More recently, the website says, Dumas’s work included “development in the Minto East Zone, production drilling, loading, and blasting in the ore zone, as well as waste removal.”

Between November 2016 and June 2017, the petition continues, Dumas and Minto also entered into agreements for Minto to lease five pieces of heavy equipment, including two haulage trucks and three underground loaders. The lease rates ranged from $29,500 per month to $43,000 per month, with Minto responsible for performing maintenance and repairs during the leases and returning the equipment to Dumas in “like condition.”

The petition claims that Minto owes Dumas $455,770.05 under the mining services agreement and $2,694,255.12 for the equipment leases.

However, while Dumas has “demanded payment,” the document says, Minto has “refused or neglected” to pay all but one invoice – one under the agreement, for $5,542.66.

A chart included in the petition lists 12 other invoices, with due dates ranging from Jan. 18 to Feb. 16 and amounts ranging from $1,591.10 to $2,022,936.92, as having gone unpaid.

Dumas filed a claim of lien to the Whitehorse Mining Recorder’s Office on Jan. 21.

The petition seeks 15 different forms of relief from the court, including a declaration that Minto owes Dumas $3,150,025.17 plus pre- and post-judgement interest, a declaration that Dumas has a valid miner’s lien, an order that Dumas “shall be at liberty to join with all other miners lien claimants” and legal costs.

No responses to the petition had been filed as of Feb. 20.

The News also did not find any other petitions naming Minto as a respondent as of that date.

The Minto mine, which began production in 2007, has not been fully operational since October 2018, when Capstone announced that it was putting the mine into care and maintenance after its sale to U.K.-based company Pembridge Resources fell through.

At the time, both Capstone and Pembridge attributed the sale’s cancellation to unfavourable copper prices – Minto’s primary product. The shutdown of major operations led to the loss of about 200 jobs, with a skeleton crew of Capstone workers remaining behind to ensure the site meets environmental and legal obligations.

Contact Jackie Hong at jackie.hong@yukon-news.com

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