A pair of court orders are an important new step in the bankruptcy and cleanup of the Wolverine Mine that had been operated by the now defunct Yukon Zinc Corporation.
Following the orders issued by Yukon Supreme Court Chief Justice Suzanne Duncan on Nov. 1, a new contractor will handle the maintenance of the disused mine. Actions taken and fees charged by the company handling the receivership of the mine were also approved by the court. Court documents state that both orders requested by the Yukon government were unopposed.
Court proceedings began after Yukon Zinc began to experience financial difficulties amid falling metal prices in 2014. Their mine, located approximately 250 kilometres northeast of Whitehorse, was put into care and maintenance the following year because the company did not have enough funds to keep mining. The mothballed mine’s condition deteriorated and in 2017 the underground portions of the mine flooded. Contaminated water from the tunnels was pumped into the mine’s tailings pond filling it up with no way of treating the water available.
The Yukon government took over work at treating the water and the pursued bankruptcy and receivership proceedings against Yukon Zinc soon after with tens of millions of dollars owed to the government alone. The Yukon Supreme Court granted a receivership order in 2019 putting PricewaterhouseCoopers in charge of maintenance activities at the mine and efforts to sell the mine and pay Yukon Zinc’s creditors.
By the time the receiver’s lawyers were reporting to the court in late 2021 it was clear that efforts to find a buyer for the mine had failed. Some undeveloped claims were successfully sold to a Vancouver-based company.
The Yukon government contracted Boreal Engineering Ltd., a Yukon firm that court documents say has a close business relationship with the development corporation of the Ross River Dena Council, in whose traditional territory the mine is located.
With the local contractor in place, PricewaterhouseCoopers’ role will be scaled back to administration and settling with Yukon Zinc’s major creditors.
As of Nov. 23, the mine’s mill, camp facilities with room for more than 200 people and other movable infrastructure like its assay lab and truck shop were all being advertised for sale.
Court documents state that the receiver will complete some transitional work including the removal of two tailings treatment barges from the tailings pond this month before Boreal’s full takeover.
The court order sets out the duties that will be expected of Boreal including the control of water on the site, ongoing water monitoring and treatment and the maintenance of the roads and air strip that allow access to the disused mine.
In her reasons for granting the orders that were made public on Nov. 16, Duncan calls the transition of care and maintenance to Boreal a significant step in the life of the mine. She adds that the involvement of the Ross River Dena Council through its development corporation is a positive outcome and that many workers who had been employed by the receiver will assist in the transition ensuring the care and maintenance work continues appropriately.
The court heard that the next step will be the development of a final closure plan for the mine.
-With files from Lawrie Crawford
Contact Jim Elliot at jim.elliot@yukon-news.com