According to a new report, Victoria Gold Corp. “flouted” the conditions of its water licence at least two years before the disastrous June 24 landslide and spill of cyanide solution at its Eagle Mine.

That was what the former head of the Yukon Water Board had to say during a court hearing, The Canadian Press reported Tuesday.

Roger Lockwood, then-director of the board, told a court in 2022 that Victoria Gold “flouted” conditions of its licence, saving millions of dollars by allegedly failing to re-contour slopes at the mine, about 500 kilometres north of Whitehorse.

During the case, Lockwood estimated the company “saved more than $4 million through non-compliance with the conditions of the water licence,” a Yukon Supreme Court ruling says.

After the June 24 environmental calamity, Victoria Gold suspended operations as it assessed the damage to the heap leach pad. 

The Yukon government has estimated that the ore slide allowed 300 million litres of cyanide solution to escape containment from the heap leach pad, which uses the chemical to extract gold from ore.

Victoria Gold said last week it’s co-operating with technical experts hired by the Yukon government and the First Nation of Nacho Nyak Dun as they investigate the cause of the disaster.

The company also said last Friday it’s uncertain if it will ever resume production, or if it has the money to repair damage and fix the environmental impact of the slide and chemical escape.

It’s not known whether the contouring work Lockwood referred to had any bearing on the ore slide and solution spill. The company and the government have said it was followed by a single detection of elevated cyanide levels in a creek downstream from the site.

In September 2022, Victoria Gold was granted a stay until a judicial review of the security order was completed.

That review remains unresolved, but earlier this year, the government increased the security deposit it required from Victoria Gold to $104 million, in line with what the water board had previously wanted.

In a July 2022 memo to Yukon officials about the mine’s cyanide management plans, engineer Mark Smith said there were four reported spills between July 2020 and July 2021. Three of them occurred in fewer than four months, including a “relatively large” spill of 30,000 litres. 

John Thompson, a spokesman for the Yukon Department of Energy, Mines and Resources, said in an email that “concerns raised during the case about the company’s closure plans referred to earlier plans that have since been updated.

“The current closure plan was approved in 2024 and meets our regulatory requirements,” Thompson said. “It’s too early for us to say what caused the heap leach failure.” 

Speaking to The Yukon Star this morning from Halifax, Premier Ranj Pillai provided a few comments on the latest developments at the mine.

He acknowledged he understands the seriousness and implications of Victoria Gold saying it may lack the means to continue operating the site. Right now, he added, the government is fixated on trying to determine what happened and in mitigating the environmental damage.

“I do think the report said more than that, though,” Pillai added.

The government has planned another technical briefing on the situation for Thursday.