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Former Skagway ore terminal operator tries to recover unpaid fees from defunct mine

Yukon government and Municipality of Skagway remain steadfast on future use of the terminal
A cruise ship sits in the port of Skagway on May 5, 2018. (Yukon News file)

As an Alaskan court tackles the issue of user fees left unpaid to the former owner of the Skagway ore terminal by a now-defunct Yukon mining firm, Skagway and the Yukon government remain steadfast about the terminal’s future.

A state-owned corporation in Alaska is taking Minto Metals and associated companies to court in Anchorage over unpaid user fees at the Skagway Ore Terminal.

The Alaska Industrial Development and Export Authority (AIDEA) filed a suit on July 31 with Capstone Mining Corp. and Sherwood Copper Corporation listed as defendants alongside Minto Metals Corporation and Minto Explorations Ltd.

Minto Metals, the operator of the Minto gold and copper mine located northwest of Whitehorse, has been placed in receivership following the abandonment of the mine and the resignation of all the company’s directors in May. Before being taken offline amid the receivership, Minto’s website described how ore concentrate would be trucked to the terminal in Skagway and then stored until a sufficient amount was on hand to ship overseas.

Court documents state that the initial user agreement for the terminal was signed in 2007 by Minto Explorations and its parent company, Sherwood Copper. Later amendments are said to have updated the agreement as the ownership structure of the mine changed over the years. AIDEA’s claim identifies Minto Metals as a “successor-in-interest” to Minto Explorations Ltd., Capstone Mining Corp, Sherwood Copper Corporation and Pembridge Resources Plc, which all had an ownership interest in the mine at some point between 2007 and the expiry of AIDEA’s lease of the ore terminal this March.

AIDEA is seeking at least US$74,445. It claims this is the unpaid balance of user fees remaining after it took back a $350,000 security deposit the ore terminal users had paid, including interest. AIDEA claims the defendants became delinquent on their obligations to pay for the user fees in late 2022 as they failed to make two consecutive quarterly payments and a final prorated sum. After seizing the security deposit, AIDEA claims it demanded payment of the balance in June but to no avail. AIDEA also wants its costs, prejudgement interest and legal fees covered.

The defendants had not filed anything in reply to the lawsuit as of the News’ deadline.

While the past users’ payment of fees for use of the terminal remains a point of contention, the Yukon government and the municipality of Skagway seem to be on the same page about the importance of the terminal in the future.

The Yukon government reached an agreement in principle with the Municipality of Skagway regarding construction plans and preferential access to the ore terminal. The principle of the deal would see the Yukon invest about C$24 million in ore terminal construction and receive the ability to designate users that would receive preferential access and fee discounts for the next 35 years.

Questions to the Yukon government’s economic development branch were met with a written reply and assurances that the government is still working towards a finalized agreement regarding the ore terminal with Skagway. According to the written statement from economic development, the next step in the negotiations with Skagway is the development of a non-binding term sheet that will outline the conditions and structure of the final agreement.

“Developments with Minto Metals do not change our view of the port investment as a generational strategic opportunity for the Yukon. With a number of mineral projects in various stages of development, securing tidewater access is as important to the territory as ever,” the statement from Economic Development reads.

The Economic Development representative wrote that maintaining port access is important for the Yukon’s mining sector as a whole but could also benefit other parts of the territory’s economy. They say this importance is not dependent on the port facilities’ use by any one company or project.

“Industry investors have told us that they see port access in Skagway as a positive factor in considering investment in Yukon mining projects. Development of export options also helps promote the Yukon’s position as a significant jurisdiction contributing to Canada’s supply chain security, green energy and critical minerals goals, and more.”

Brad Ryan, Skagway’s borough manager, echoed the Yukon government’s commitment to staying the course when it comes to the ore terminal deal.

He said the master plan was always to take down the existing ore loader and develop the site for a different method of export.

“And Minto Mine probably didn’t ever have the volume to make that happen financially,” Ryan said.

The borough manager said the focus is developing export facilities that could be used for newer or larger mines that may begin production in the future.

Ryan noted that Minto did not ship from the ore terminal after March 18, the day Skagway took over the port facilities.

-with files from Dana Hatherly

Contact Jim Elliot at

Jim Elliot

About the Author: Jim Elliot

I’m a B.C. transplant here in Whitehorse at The News telling stories about the Yukon's people, environment, and culture.
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