The Yukon government’s bid to have the troubled Wolverine mine put into receivership was temporarily put on hold Aug. 1 after the mine’s owner filed for last-minute protection in order to restructure its affairs.
The Yukon government had filed a petition to the Yukon Supreme Court in July seeking for the now-defunct mine, owned by the Yukon Zinc Corporation and located approximately halfway between Ross River and Watson Lake, to be put into receivership after its repeated failure to post its full security and address environmental concerns on-site.
The petition had been set to be heard the morning of Aug. 1.
However, Yukon Zinc lawyer Kibben Jackson told the court that the company had filed a notice of intention to make a proposal under the Bankruptcy and Insolvency Act the afternoon of July 31.
According to the website of PwC Canada, a company specializing in financial services, the filing of such a notice by a company triggers an automatic 30-day stay on any proceedings being faced by the company, allowing it to restructure its affairs.
Jackson said the notice had been filed in Vancouver, and that Yukon government lawyers should go down there to formally apply for a lifting of the stay if they wanted to proceed with the petition.
Yukon Zinc is also in the process of setting up a sale of the mine, Jackson said, and had secured cash to handle its affairs until at least September — $200,000 had been deposited into its bank account that morning, he claimed, and it had also secured a loan of an additional $500,000.
Jackson questioned why the Yukon government had even bothered to show up to court, knowing that an automatic stay would have been triggered.
Yukon government lawyer John Porter, however, described the the cash as just a “drop in the bucket,” noting that Yukon Zinc still owed more than $25 million on its security.
“It’s like putting a band-aid on an open chest wound,” he said, adding that the company, so far, had been paying its four staff members remaining on-site to do the “bare minimum on a shoestring budget” — namely, road repair and “keeping the lights on,” while the Yukon government footed the bill for all remedial work.
He accused the company of “sitting on its hands” until the last minute to file its notice, despite knowing weeks in advance of the Yukon government’s intention to pursue legal action.
Porter suggested that Justice Suzanne Duncan, who was presiding over the proceedings, had the authority to lift the stay and should do so, because while the Yukon government had not yet used the security Yukon Zinc has provided thus far, the financial situation was “eroding” as more work is done.
Duncan was expected to give her interim decision at 3 p.m. Aug. 2. However, she ended up deferring her decision to a later date.
Contact Jackie Hong at email@example.com