Minto submits new proposal to address $20M gap in reclamation funds

Minto Metals (TSXV: MNTO) has submitted a proposal to the Yukon government with respect to furnishing the $21 million increase in security costs required for the Minto mine site through a “progressive approach.” The Yukon government and Selkirk First Nation, on whose territory the mine is located, are currently reviewing the proposal for its adequacy in addressing the security gap.

In January 2022, the Yukon government determined that the security for the company’s flagship copper-gold mine should be increased to $104 million from $72 million. Until Minto is able to furnish the increased security, the mine would be placed under restricted operating conditions related to water management activities on site.

The security was later reduced to $93 million due to reclamation work already completed onsite as well as the removal of security for two new mining areas that have not been started yet. According to the Yukon’s Department of Energy, Mines and Resources, Minto has already paid $73 million of its security deposit to the government.

The deadline to furnish the remaining $20 million was Sept. 1. Failure to meet this deadline or obtain an extension could result in Minto falling out of compliance with its quartz mining licence.

“At the beginning of 2022, Minto committed to investing $8 million dollars in improvements to the mine water management system at the Minto mine. Year to date we have spent over $5 million including upgrades to our water treatment plant, the installation of a new microfiltration plant, and the purchase of evaporation units, all to support improved environmental stewardship,” Chris Stewart, president and CEO of Minto Metals, said in an Aug. 23 news release.

On Aug. 31, Minto submitted a proposal to the Yukon government outlining how it would address the security gap at the mine site, and as part of the proposal, it subsequently made a $1 million cash payment on the Sept. 1 deadline date.

In response to the proposal, Minto received a letter from government stating that the cash payment demonstrated Minto Metals’ attentiveness to the requirement and represents “a positive step in closing the security gap to address site reclamation and closure.”

The Yukon government said in its letter that “the concept of payment of outstanding security within a schedule is an acceptable approach.” As a result, the government has agreed to extend and amend the restricted operating conditions related to the quartz mining licence, which have been in place since Apr. 5, so that Minto operations can continue uninterrupted. Once the revised security is furnished in full, the conditions will be completely removed.

“It remains in Yukon’s best interest for Minto Metals to remain on site reducing site liabilities and maximizing water management and treatment capabilities,” the government explained in its letter.

Commenting on the letter and the company’s proposal, Stewart thanked the government for its support and acknowledgement of the work the company has been doing to reduce site liabilities and improve water management. “We are pleased to be able to continue to operate our mine while we work together, taking a tri-partite approach to finalizing an agreement that satisfies both Yukon government’s and (Selkirk First Nation)’s concerns.”

Stewart added that the last few months have been challenging for the company, with excess water on the mine site shutting down its milling operations for four weeks. After the Yukon received over 150% of its usual snowfall last winter, the melting snowpack caused water inflows that exceeded the mine’s discharge capacities, raising storage pond water levels.

The Minto mine has been in operation since 2007, producing approximately 500 million lb. of copper to date. The property is located west of the Yukon River, approximately 250 km north of Whitehorse.