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Eagle Gold Mine cleanup may cost $150 million: YG

The cost of cleaning up the environmental damage left behind by the Eagle Gold Mine disaster could soar as high as $150 million, according to Yukon government officials.

That’s the first estimate the public has heard regarding the enormous price of handling the devastation caused by the June 24 heap leach pad collapse and landslide at the mine site north of Mayo. It was owned by the Victoria Gold Corp. before the government forced it into receivership last week via an Ontario court order.

The figures were provided this morning by Lauren Haney, the deputy minister of Energy, Mines and Resources (EMR), at a technical media briefing the government held in Whitehorse.

Government officials continue to emphasize they are focused on remediation work at the site, rather than recouping the cost to the public, at this time.

EMR Minister John Streicker stressed that is the immediate goal, rather than considering the sale of Victoria Gold assets to help pay for the work.

The cost to the government is already substantial. Haney said it has provided PricewaterhouseCoppers, the receiver for Victoria Gold, with $15 million to “front” the most urgent work needed at the site.

“Our purpose is remediation,” Haney stressed. “We’re looking at remediation rather than closure.”

There is no timeline as to how long the cleanup will take.

Haney could not provide an immediate answer as to how much the government has already spent on the disaster. It has said in the past that Victoria Gold failed to do some of the initial remediation work it had been asked to perform.

Neither Haney nor Streicker could readily explain why there was no announcement that the receiver had fired Victoria Gold president John McConnell over the Discovery Day weekend.

“We don’t comment on business decisions,” Streicker said.

It’s likely the government will give the receiver up to $50 million over the next few months or weeks.

“This is a critical point in our response to the mine failure,” Streicker said. “Our plan is to support the receiver.”

Streicker also noted the government is limited in what it can comment on because the receivership is still in the appeal period. It seems unlikely any appeal will be filed, as Victoria Gold’s board of directors resigned last week.

As well, Streicker reaffirmed the government’s interest in establishing an independent review body to investigate the disaster. Members could be named next week, he said.

“The government believes this is the most direct path” to pinpointing the cause of the landslide and collapse at the mine, Streicker said.

The government, via PricewaterhouseCoopers, has also begun to drill five groundwater wells to monitor the contamination.

Additionally, Pelly Construction Ltd. of Whitehorse has been hired to finally build a safety berm around the mine site – something which had been ordered approximately a month ago.

Pelly Construction has filed a lien against Victoria Gold for more than $9 million. The company faces more than $40 million in liens.

Additional water storage ponds are also on tap for the site, as there is not enough storage currently, according to Erin Dowd, one of the government’s mining specialists working on the disaster.

A diversion pipe has been constructed around Haggart Creek, just downstream of the mine, where 68 fish were found dead on Aug. 2 after a release of wastewater from the site.

The creek bed is now dry, according to officials, in that area.

T.S Giilck

T.S. Giilck, News Reporter, has more than 30 years experience as a reporter, including work for the Whitehorse Star and CKRW Whitehorse radio.

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