The court-appointed receiver tasked with marketing the defunct Minto Mine has concluded that a whole-cloth sale is now unlikely. Liquidation of the mine’s assets via an auction is now the plan, according to a March 28 report by the receiver, PricewaterhouseCoopers (PwC), posted to its website prior to its presentation to the Yukon court overseeing the receivership.
The mine was abandoned by its owners in May 2023, and the Yukon government and its contractors have maintained the site since then. PwC was appointed as the receiver to try to come up with the money to pay the creditors of the mine’s previous owners by selling the mine as a whole property or liquidating its individual assets.
The Yukon Supreme Court is scheduled to hear the receiver’s report and direct next steps on April 5.
This most recent report on the receivership activities that have been going on since last summer explains that, following a trio of unsuccessful bids, the receiver no longer has confidence that a complete sale of the mine will go forward. It goes on to state that the receiver is now planning to end its Sale and Investment Solicitation Process (SISP) and move on to the liquidation of the mine’s assets.
The receiver also reports that, along with negotiating with bidders, it has begun discussions with auctioneers, resulting in two potential candidates. Other work has involved meeting regulatory obligations in advance of the spring melt and discussing the sale of equipment to other Yukon mines.
“As of the date of this report, a large number of the concerns remain outstanding and the receiver does not believe it will obtain the support of the key stakeholders and complete all of the conditions precedent to bringing a definitive agreement to this court. The receiver has exhausted all efforts and funds available to it in managing the SISP,” the report reads.
The report explains that a liquidation plan which envisions selling most of the mine’s property by the end of May is in motion. The staging of equipment in Whitehorse for the auction is planned. The report states that there has been interest in the equipment from other mining companies in and near the Yukon.
Intangible assets like mineral claims will be offered for sale separately. Assets necessary for the reclamation and closure activities the territorial government is overseeing are to be kept at the mine.
Also detailed in the report are the broad strokes of three bids for the acquisition of the mine that broke down at various stages of the process.
Bidder 1, described in the report as a B.C. company with “various mining projects across Canada and the world,” turned in a non-binding bid with a value of $26 million. Features of the bid included $1 million cash on closing of the deal and a $10 million assumption of reclamation liabilities. Problems with the bid identified in the report included the fact that the up-front cash consideration would not cover the receiver’s charge and borrowing charge. The receiver writes that, by last November, it had informed this bidder that it would not proceed with this bid.
The bid from Bidder 2, “a team of mine explorers, developers and operators with decades of experience around the world,” is also explained in the report. It was a $15.25-million bid, including $2.25 million cash up front, $5 million when commercial production resumes, $2.5 million when the first 10-million pounds of copper are sold and another when the next 10 million pounds go.
Also noted are that Selkirk First Nation (SFN) would have gotten “significant equity and governance” in the company and that the bidder would take over care and maintenance. The Yukon government would have been able to continue closure activities until the bidder was prepared to restart the mine. However, the bid did not articulate just how both parties would work together on the site.
The receiver opted not to move forward with this bid in December 2023, citing the bidder’s slow due diligence process and the payments contingent on production that were out of the receiver’s control.
Bidder 3 was a Canadian exploration company familiar with operations in the Yukon. Their bid was worth $18 million, including $5 million cash on closing, $3 million six months later and $10 million when the mine resumes production. This bid also would’ve seen SFN get 12.5 per cent of the company and four board seats.
The plan reported by the receiver was for the company to raise $16 million to undertake a drilling exploration program over two years and then bring on a mine operator partner to resume production. The receiver’s report states that stakeholders had concerns about the bidder’s financial stability and other matters, but the receiver found the benefits outweighed the concerns, and exploration of the bid continued. Discussions continued into March but ultimately have not succeeded.
The receiver states that deadlines were extended to allow for participation from all parties and every opportunity was made available to ascertain whether it was possible to return Minto to production rather than selling off its assets piecemeal.
The state of the Minto receivership came up in the Yukon legislature on April 2.
“At two separate briefings [Energy, Mines and Resources] officials informed us that the overall cost estimate for remediation is approximately $20 million over and above what is currently held in security for the mine,” said Yukon Party mines critic Scott Kent.
Kent drew attention to statements from the Yukon Liberal government’s Finance Minister Sandy Silver, who said there would be no shortfall in his budget speech.
Energy, Mines and Resources Minister John Streicker said the government’s best estimate on reclamation and closure costs is close to what was demanded in security but the bond the government actually received from Minto’s previous owners was less than that.
“So, there is a shortfall. And we are at all times doing everything we can to bring those costs down and make sure that it is not Yukoners that are left to deal with that remediation,” Streicker said.
Contact Jim Elliot at jim.elliot@yukon-news.com