Some former directors and managers from Victoria Gold want to be let in from the cold. The Yukon government doesn’t seem receptive.
The former mine leadership offered some commentary on goings on at the company’s Eagle Gold Mine, which has been under the direction of a court-appointed receiver since August as cleanup from a landslide that breached the heap leach facility at the mine continues.
In an Oct. 9 letter to Premier Ranj Pillai, the former mine leadership also ask for the creation of a committee with members including Victoria Gold representatives, its creditors and others be struck to consult on and assist with remediation efforts at the mine.
That letter, signed by former Victoria Gold CEO John McConnell and nine other individuals, was provided to the News on Oct. 23. An attached letter, also sent to the News, states that they received no reply from Pillai and offers additional views on the situation.
The letter to the premier discusses actions at the mine since the start of the receivership and questions why plans and actions being undertaken by Victoria Gold in areas like slope stability and water treatment were paused or halted under the receiver. It also questions why some contractors, including the one working on water treatment upgrades under Victoria Gold, were replaced. It argues that this set remediation back or at least stalled it, on some fronts.
Also dealt with in the letters are the mining firm’s financials prior to the receivership.
In their letter to Pillai, the Victoria Gold representatives note that the government and receiver drew on statement’s made in the company’s public disclosures to argue that the company didn’t have the financial resources to complete remediation.
“All parties should plainly recognize that Victoria was required to issue such warnings to its shareholders as a responsible reporting issuer, and such statements are not evidence of Victoria's solvency. Victoria had full intentions, expertise, ability and financial resources to implement and complete the full environmental remediation at the Eagle Gold Mine,” the letter reads.
The later letter says that Victoria Gold had access to about $119 million in assets that were either liquid or with plans in place for their sale when the receivership took effect.
No mention was made of the company's debts, which were $233 million to secured creditors and $82.7 million to unsecured creditors as of late August.
“This is the same company who stated in court that they wish to apply for bankruptcy protection. So if they really had $100 million available, why would they need to apply for bankruptcy protection?” said Yukon Energy, Mines and Resources Minister John Streicker in the Yukon legislature as the letter came up for discussion on Oct. 24.
Pillai called the letter “an absolute master class in revisionist history” when speaking to reporters.
The premier also said he made repeated efforts to meet with Victoria Gold’s board and was offered a meeting with its chair.
“And my response to that was, no, I want to sit with the entire board who is responsible for this public company,” Pillai said.
He roundly criticized the lack of communication with the public from Victoria Gold’s board in the days following the landslide.
Yukon Party Leader Currie Dixon also spoke to the matter, noting that Victoria Gold didn’t suggest bankruptcy but bankruptcy protection to restructure their debt.
“That distinction aside, we have competing sets of information about the financial state of Victoria Gold, and that's an important distinction, because what we have always said is the best case scenario was that the mine, the mining company, would maintain ownership, and therefore the liability for the mine, given the state of the accident,” he said.
Asked whether it was too late for Victoria Gold to get back into the fold on the management of the mine, Dixon said it is too late for that, as after the receivership, the company exists only on paper.
On the floor of the legislature, mines critic Scott Kent of the Yukon Party asked a variety of questions including on the discrepancies in the estimates of remediation costs and liquidity put forward by the receiver and Victoria Gold.
Yukon NDP Leader Kate White spoke about the importance of ensuring that the First Nation of Na-cho Nyak Dun’s community benefit agreement continues to be fulfilled under the receivership. White also suggested that local companies are being bypassed in favour of outside contractors as remediation work continues. She asked additional questions on the state of water treatment and the detection of mercury in water downstream of the mine in recent weeks.
Streicker said a containment berm is 75-per-cent complete and 479,000 cubic metres of contaminated water are being stored on site. He added that water treatment is in the testing phase and told the legislature that he would work to bring back an estimated time of completion for it.
— With files from Dana Hatherly
Contact Jim Elliot at jim.elliot@yukon-news.com
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