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Nobody wants the Wolverine mine. Now the Yukon government’s on the hook

Irreponsible mining project lands on Yukon government and Yukon taxpayers
Yukon Zinc has kept Yukon government lawyers busy and Yukon’s Supreme Court heard that no one wants the mine site. (Lawrie Crawford/Yukon News)

Yukon Zinc was back in court on Jan. 12, where lawyers admitted that there are no prospective buyers for a mine that was once a Yukon success story.

It’s a far cry from the glory years, circa 2006, when the Yukon government still bragged about selling mineral resource properties to Chinese companies and Yukon ministers travelled across the Pacific Ocean with mining CEOs, met with foreign ambassadors, and wined and dined Chinese mining interests.

In 2009, the National Post reported that Yukon had become an unlikely leader in soliciting Chinese investment in Canadian mining projects. The story touted Harlan Meade, a frequent travelling companion of Jim Kenyon (the former minister of Economic Development) on trips to China, as being the guy who could get deals done.

As CEO and president of Yukon Zinc, Meade sold Yukon Zinc Corp. to two Chinese firms in 2008 for close to $100 million. A year later, Mead was CEO and president of Selwyn Resources and formulated a joint venture with a Chinese state-owned company that was to invest $100 million in Selwyn’s properties on the NWT-Yukon border.

The Post’s story claims that the sale of Yukon Zinc “marked the first time China took outright ownership of a resource project on Canadian soil.”

And even though it was all smiles in the beginning, and even though the company was awarded two consecutive Robert E. Leckie Awards for Responsible and Innovative Mining practices in 2011 and 2012, the story of Yukon Zinc is not proving a happy one for the Yukon government.

Back in court

On Jan. 12, Yukon Zinc was again before Chief Justice Suzanne Duncan of the Yukon Supreme Court for the eighth report from the receiver, PriceWaterhouse Coopers (PwC).

The mine has been in receivership with PwC since Sept. 2019. In 2015, Yukon Zinc paid only 11 cents on the dollar to almost 300 creditors (50 were Yukon companies) on total a debt of $236 million. This, as well as leaving a flooded mine and a 24 metre high dam with a safety risk classification rated as “very high.”

PwC was in court to report on several matters for the period from Sept. 13, 2021 to Dec. 31, 2021 – activities and accounts; approval of legal fees amounting to $1.5 million for the same period; approval of a small sale transaction of nearby claims; and to terminate the Sale and Investment Solicitation Plan for the remainder of Yukon Zinc’s assets. They also requested a sealing order for a supplemental report containing bid-related materials.

In court, PwC’s lawyer said, “I don’t think this ever becomes an asset that is easy to market.”

PwC has given it their best shot, and a bill for $13.5 million so far.

The receiver’s report listed the problem areas that caused prospective purchasers to withdraw from the bidding process.

Existing licenses could not be reinstated, and purchasers would have to pursue full water licensing which would take years; assets on site were owned by other parties and could involve long-term litigation; the mine is currently flooded and the structural integrity of the mine is in question; there are no recent exploration assessments to help ascertain mineral values and the uncertainty of sharing future care and maintenance activities and costs with the Yukon government would continue for years.

The receiver concluded that the “best course of action is to terminate the [Sale and Investment Solicitation Plan] and transition the mine to [the Yukon government] who will manage the care and maintenance in the long term.”

The receiver also sought an order to seal the supplementary report containing information about the bidding process from the public eye. Justice Duncan was not so sure about the lawyer’s equation of public interest being the same as commercial interest, and asked the lawyers about redacting sections instead.

There was considerable discussion in the court on this issue and the Justice reserved her decision for a few weeks.

Duncan also asked about the future intentions of the Yukon government. Government lawyers indicated that there was no intention to move into a new sales process in the near term since they could not realistically expect a different outcome.

Their lawyer admitted that “I think it’s clear that care and maintenance is on the front burner.”

The court also heard about the sale of claims that were part of a joint venture with Almaden Minerals of Vancouver, who is now purchasing them in full, plus a few more. They are slightly south of the mine site, and there appeared to be few concerns regarding the sale in the courtroom on Wednesday.

The Yukon government supported the ending of the sale agreement with PwC, but confirmed that the transfer back to the government would not take place until the summer water treatment season has finished. The receiver indicated in their seventh report that they were working with contractors to design and install new water treatment systems for the 2022 season.

“I think we recognize the reality that the best shots have been taken right now. So, it seems appropriate at this point to bring the current process to an end,” said the Yukon’s counsel.

On Jan. 13, the Department of Energy, Mines and Resources deferred any official comments or questions, as the matter is before the courts.

— With files from Graeme McElheran, Julien Gignac, Jackie Hong, Tristin Hopper and Keith Halliday

Contact Lawrie Crawford at