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Victoria Gold goes to court seeking appeal of increased security payment

Amount held by government for reclamation and cleanup set to increase by more than $74 million
The access road to Victoria Gold as viewed from the Silver Trail Highway in 2021. (Lawrie Crawford/Yukon News)

Victoria Gold Corporation has gone to court looking for relief from the Yukon Water Board’s imposition of an increased financial security amount required to allow further operation of the company’s Eagle Gold Mine.

The water board increased the security deposit required for Victoria Gold’s mine by more than $74 million — up to $104.9 million from $30.7 million. The company was given until Sept. 15 to pay up.

The Eagle Gold Mine is an open-pit heap leach operation, meaning that it uses a cyanide solution to extract gold from ore. The mine, located north of Mayo, poured its first gold in 2019 and has been in full-scale production since 2020.

The Yukon government holds security deposits as part of their permitting process for mines in order to cover the costs of site closure and cleanup should the company fold, go bankrupt or otherwise abandon the project.

In a petition filed with the Yukon Supreme Court on Aug. 1, Victoria Gold asks for leave to appeal the order from the water board requiring the increased security payment.

The petition claims the water board breached procedural fairness in its decision by giving Victoria Gold adequate notice about the board’s case for a larger financial security, failing to disclose the information it relied upon in making its decision and failing to provide Victoria Gold an opportunity to submit evidence. It also claims that the evidence the water board used in determining the security was either irrelevant, not on the record or not disclosed to the company.

Victoria Gold is seeking the staying of the order increasing their security amount pending appeal and also wants their costs covered.

Filed alongside the petition is an affidavit from Hugh Coyle, Vice President — Environment for Victoria Gold, who handles the company’s licensing submissions to the Yukon Water Board. Coyle’s affidavit outlines the history of Victoria Gold’s quartz mine and water licensing as well as the company’s 2018 update to its reclamation and closure plan for the Eagle Mine and the subsequent review of its security amount.

The affidavit says the water board declined approval of the reclamation plan in June and ordered the security increase to $104,903,628 which came as a surprise to him and the mining company. Coyle states that it’s difficult for him to understand how the security was calculated and why it was deemed necessary.

Commenting on some of the concerns from the water board, each of which carries a security amount increase in the millions of dollars, Coyle says the company does not understand what the water board based their decisions on, was not advised of the issues in advance or was not given an opportunity to offer their comment or clarify.

The affidavit details three reasons the water board gave for not approving the reclamation and closure plan: That it did not provide for biological detoxification in the heap leech pad at the mine, that it did not provide for the costs of re-contouring slopes and that it didn’t have a plan for the reclamation of snow disposal areas. Coyle states that all of these could be remedied with minor updates.

Coyle’s affidavit says that posting the security required by the waterboard would likely cost the company $1.2 million per year in carrying expenses.

The court file did not contain a response from the Yukon Water Board as of Aug. 4.

— With files from Lawrie Crawford

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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