The Yukon government has been successful in removing Victoria Gold Corp. from managing the operations of the Eagle Gold Mine north of Mayo.

On Tuesday, the government had applied for the appointment of a receiver to take over the company’s operations. A hearing was held Wednesday in Toronto (the company is headquartered in Ontario).

The court has appointed PricewaterhouseCoopers Inc. as the receiver, which will control all of the assets of Victoria Gold.

A lengthy statement followed the news of the decision, extensively quoting Justice Minister Tracy-Anne McPhee.

“The Government of Yukon has lost confidence in the management team of Victoria Gold Corporation to take the human health and safety and environmental consequences of the June 24, 2024, heap leach facility failure seriously or to respond with the urgency the situation demands,” she said.

The application was filed under federal bankruptcy regulations, she added.

“Immediate action is required to respond to the heap leach failure and its consequences for the land, water, people and wildlife in the Traditional Territory of the First Nation of Nacho Nyak Dun,” the minister said.

“The Government of Yukon is concerned that Victoria Gold Corp. does not possess the capacity itself and has failed to carry out the work that is required. The company has failed to comply with several formal directions issued by the Government of Yukon that require specific measures to be undertaken to address human health and safety and environmental risks and impacts.”

Given the complexity of the work required at the mine site, McPhee added, the government and PricewaterhouseCoopers have engaged Parsons Inc. to  serve as lead environmental consultant to advise PricewaterhouseCoopers in its role including complying with the government’s directions.

The government has provided funding to PricewaterhouseCoopers to undertake the mitigation work. 

That money will constitute a debt owed to the government, which is to be recovered from the company’s assets.

“As receiver, PricewaterhouseCoopers will administer repayment of this debt, which will be prioritized as compared to other debts owed by Victoria Gold Corp. in accordance with the court order and with the priority given to the costs required for the environmental protection as provided for in the Bankruptcy and Insolvency Act,” McPhee said.

All trading of Victoria Gold on the stock markets was halted Tuesday.

McPhee explained the government’s rationale in seeking the receivership.

“Following the company’s failure to fulfill inspectors’ directions, our government has ended reliance on Victoria Gold Corp. to take the appropriate actions in response to the heap leach failure. This legal action provides a pathway for the required costs of mitigation to be recovered from the assets of the company responsible for the damage to the environment,” she said.

“In addition, it provides a clear and public format for all affected parties to register their concerns and interests and to bring them forward in a court-supervised process. We will continue to use the legal mechanisms at our disposal to hold Victoria Gold responsible for the cost of this work and for the protection of human health and safety and the environment.”

The First Nation of Na-Cho Nyäk Dun, meanwhile, plans to keep pursuing its own application to have Victoria Gold placed inreceivership. A spokesperson said the First Nation has no plans to drop its application, which was filed Wednesday.

NDP Leader Kate White said the party is “relieved to see Yukon Liberals finally taking this disaster seriously and moving to take over operations from Victoria Gold. We hope that this move will allow for swift action to prevent further contamination, and that the government will work closely with Na-Cho Nyäk Dun on remediation going forward.”

The Yukon Party issued a scathing statement late this morning.

“It appears the Liberal government’s management of the Eagle Mine accident has resulted in the worst possible outcome for Yukoners, Yukon businesses, and taxpayers,” said the official Opposition.

“It also provides no certainty that any environmental concerns will be better addressed.”

The party is asking Premier Ranj Pillai to “immediately recall the Yukon Legislative Assembly for a special sitting so that government officials and others can appear as witnesses in committee of the whole to explain their decision to take over the mine.”

MLAs would normally reconvene in October.

“The Yukon Party official Opposition believes the best possible outcome was for the company to retain control of the site, complete and pay for the environmental clean-up, and develop a plan to bring the mine back into production,” the party said.

“In our view, this is the best option to ensure Yukoners can go back to work, that Yukon businesses will get paid, and that Yukon taxpayers will not be on the hook for the environmental cleanup.

“The government’s decision to put the company and its assets in receivership, while the company indicated it would still work to address the accident, appears to be unprecedented in Canada,” the official Opposition added.

“The Liberal decision places the liability for the site entirely on taxpayers, and increases the risk creditors and contractors will not receive value for their outstanding accounts.”

The Yukon Chamber of Mines, meanwhile, said it “continues to monitor the rapidly evolving Eagle mine situation with great interest.

“Our members are concerned about the implications of receivership and the timing of its implementation. We have requested a formal briefing from the Yukon government to better understand the process that led to the receivership, and next steps for all parties involved.”

Chamber spokesperson Jonas Smith added “we continue to call for a comprehensive independent investigation into the heap leach incident to begin as soon as possible to understand its cause, to learn from it, prevent future occurrences and ensure confidence in the Yukon’s mining regulatory regime going forward.”