Yukon Zinc Corporation, the company that owns the troubled Wolverine mine, has been put into receivership.
Yukon Supreme Court Justice Suzanne Duncan approved an order putting PricewaterhouseCoopers Inc. in charge of the company’s affairs Sept. 13 following a short hearing in Whitehorse.
Under the order, PricewaterhouseCoopers Inc. will be allowed to, among other things, “take possession of and exercise control” over the Wolverine mine, carry out care and maintenance activities, manage legal proceedings and debts, and sell, transfer or lease assets as required.
The order is the result of a petition the Yukon government filed back in July, in which it requested Yukon Zinc be put into receivership due to “increasing uncertainty about Yukon Zinc’s ability to manage the site.”
Among the issues are repeated failures to maintain environmental standards at the mine, located about halfway between Ross River and Watson Lake, and Yukon Zinc having put forward less than a third of the $35,540,000 in security required for the operation.
The Yukon government has been on-site undertaking environmental mitigation and reclamation efforts, seizing $1.44 million of the furnished $10,588,966 in security to fund the work.
Actual mining at Wolverine has been on hold since 2015, when unfavourable metal prices caused Yukon Zinc to put the mine into care and maintenance.
Yukon government lawyer John Porter told Duncan Sept. 13 that there had been “behind the scenes” discussions with Yukon Zinc since the matter was last in court, and, in late August, the company appeared to have secured an interim financing agreement with a lender.
Under an order approved by the British Columbia Supreme Court, Yukon Zinc was authorized to borrow up to $3 million from the lender, Century Acquisitions Inc., which would have allowed it to maintain operations.
The lender, in turn, was scheduled to directly transfer two pots of cash to the Yukon government — $350,000 by Aug. 30, and $268,000 by Sept. 6.
For reasons unknown, however, those payments never materialized.
Lawyer Kibben Jackson, who had previously represented Yukon Zinc but appeared in court Sept. 13 on behalf of Yukon Zinc’s proposal trustee, Alvarez and Marsal, confirmed that share sale had also fallen through.
At this stage, Porter said, it’s “imperative to take action,” although he stressed that the Yukon government is already on site, and there is no “environmental emergency.”
Lawyer Laurie Henderson, also representing the Yukon government, told Duncan that a temporary water treatment plant has been installed on-site, with crews doing water sampling and testing.
She said the Yukon government is hoping to begin discharging some water “with the next few weeks” before freeze-up.
At this point, Henderson said, the government has no plans to fund a permanent treatment plant, which would cost approximately $10 million.
The $1.44 million the Yukon government seized for for remedial work is “pretty much all gone,” she added, with the majority of the money going towards purchasing, transporting and setting up the temporary treatment plant.
Porter noted that at this stage, Yukon Zinc is not bankrupt, and the Yukon government just wants the receiver to deal with site issues. He also said the Yukon government is not seeking to “leap-frog” over other creditors.
Contact Jackie Hong at email@example.com