One week after PricewaterhouseCoopers took over Victoria Gold (TSXV: VGCX), the cleanup effort at its former Eagle mine is focused on groundwater monitoring, while plans are coming together for an independent investigation of the accident.
Erin Dowd, the territory’s mine licensing manager, told reporters in a briefing on Friday that PwC and mining environmental management services firm Parsons are installing five groundwater monitoring wells at the site.
“One of our primary focuses is getting a better understanding of groundwater and capturing that water, if necessary,” she said. “We’re also looking at where water storage ponds can be constructed, and lining up the necessary resources to do that.”
The report on the remediation effort’s progress comes two months less a day since Victoria halted operations at Eagle after a failure in its heap leach pad caused a landslide releasing millions of tonnes of ore and cyanide-containing solution. The Yukon government wasn’t satisfied with Victoria’s ability to follow cleanup directives and appointed PwC the company’s receiver.
Just days later, the Victoria board resigned and PwC dismissed CEO John McConnell from his position. Yukon said it didn’t intend to drive the company out of business and believes mining could eventually restart at the site.
Victoria and PwC haven’t responded to requests for comment since the accident.
Assessing groundwater
Dowd said the five groundwater wells are being set up by contractor CoreGeo in locations at a safe distance from the slide, which remains unstable.
Those wells are of particular importance because they’ll help determine the full extent of possible groundwater contamination, Lauren Haney, deputy minister for Yukon’s Department of Energy, Mines and Resources (EMR), said.
Representatives from Parsons, the First Nation of Na-Cho Nyak Dun (FNNND) and the Yukon government have also met to ensure proper water treatment methods are in place. Eagle sits on the traditional territory of the FNNND, which called for an inquiry into the accident and a pause to mining activities on its territory. Premier Ranj Pillai has said the government isn’t prepared to halt mining but could pause some mining activities.
Other ongoing remediation tasks this week and next include Pelly Construction building a protective berm and access road, and exploring safe locations for additional storage of contaminated water, Dowd said.
Key $90M remediation
That work is regarded as critical over the next 80 to 90 days before temperatures drop in Yukon. The work is covered under a $50 million payment by Yukon to PwC, with the larger cleanup effort estimated to cost $100 million to $150 million, according to court documents related to the receivership.
Haney said the government hasn’t drawn on the $104 million surety bond that it holds with Victoria for remediation, though the option is still there.
“That estimate of around $104 million and the security that we hold for the project was based on the conditions and liability of the site prior to the failure event.”
A timeline for remediation isn’t yet known, Dowd said.
Yukon owes contractors about $300,000 for remediation work at Eagle, the government told The Northern Miner last week. Haney said she didn’t yet have updated figures.
Independent review
Terms of reference for the independent probe into the accident have been finalized and sent to the FNNND for their review and feedback, EMR minister John Streicker said.
“The aim of the review will be to get to the heart of what happened at Victoria Gold’s mine site on June 24, to prevent it from occurring again, and to use these insights to improve our regulatory and licensing practices,” he said.
Potential board members have been identified and their names are expected to be announced next week.
Streicker noted that he and the other officials in the briefing were limited in what they could speak about due to a legislated appeal period in the court’s receivership process. A spokesperson told The Northern Miner by email the 10-day period lasts until next week.
“We recognize and respect the need for due diligence while this legal process unfolds, and we look forward to sharing more information with Yukoners once the appeal period has passed,” he said.
Victoria’s financial status
Victoria has made no public statements about the company’s activities or financial status since its most recent news release about the receivership on Aug. 14.
Haney said that PwC must report information regularly to the court including Victoria’s financial situation.
In a rare interview with media since the accident, McConnell told CBC last month the company was sound financially for at least four to six months, but would likely need financing after that. The company held $232.5 million in debt as of March 31, according to its first-quarter financials.
Asked if Yukon was considering working with PwC to bring back Eagle at a future date, Haney said the focus now is only on remediation that doesn’t preclude a restart of the mine.
The $232.5 million in debt is owed to a set of secured creditors, including Bank of Montreal (as administrative agent), Canadian Imperial Bank of Commerce, Desjardins and National Bank of Canada; as well as Caterpillar Financial Service according to a document published by PwC on Monday.
Another $82.7 million is owed to more than 400 unsecured creditors, mostly contractors.
The value of Eagle’s assets, including the property, plant and equipment, inventory and exploration assets was about $824.7 million, as of June 30.
Cyanide levels falling
The most recent testing of waterways near the mine shows cyanide levels are falling, Tyler Williams, a water resources scientist with the environment department said.
Results showed increases of cyanide levels through mid-July when they stabilized around the aquatic life guidelines, then spiked during a period when treated water was released from the site. But after extending a pipe that now diverts water from Dublin Gulch to Haggart Creek, the cyanide concentrations are going down to very low and even non-detectable levels, according to the most recent results from Aug. 15.
“I want to stress that while we are seeing decreased levels of cyanide in most in our most recent results, this is still a dynamic situation that always has potential to change,” Williams said.
Cleaning the cyanide is not an issue a circuit has been designed by an engineering company in Vancouver just need to give them the okay to move ahead and all dangers of cyanide can be cleaned up before winter settles in. Delaying this issue can be of a concern.