Companies walked away from N.W.T.'s Tundra mine with gov't consent

Two companies hired by the federal government to clean up a contaminated gold mine northeast of Yellowknife have walked away from the project, with the government's consent.

In 2010, the government awarded a $43-million contract for remediating the Tundra mine site to two companies owned by the Tlicho Investment Corporation: Aboriginal Engineering and Tlicho Engineering and Environmental Services. The contract was expected to last until 2015.

Aboriginal Affairs and Northern Development Canada now says it was advised by the companies last August that they would be "unable to complete" the contract, which was subsequently terminated "by mutual consent" last month.

Questions about how much the companies were ultimately paid, and how much clean-up work remains to be done, have not been answered yet by the department.

The Tundra site, which last produced gold in the 1980s before being abandoned by its owners, has been placed under care and maintenance until "the remaining closure activities can be completed," the department says.

Loss of $13 million on project

Both the president and the CEO of the Tlicho Investment Corporation refused to comment.

In its last annual report, the corporation conceded that its involvement in the Tundra remediation project has had "a dramatic negative financial impact" on the corporation.

Of Tlicho Engineering and Environmental Services, the corporation wrote, "The company has shown a profit in the first three years of the contract but, in hindsight, there was no profit and the company, as a consequence, is recognizing a loss in excess of $13 million."  

In December, Tlicho Grand Chief Eddie Erasmus announced the corporation's entire board of directors would be replaced as part of a review to improve the corporation's "governance and operations."

Inspector 'disappointed' with state of site

Following a May 13 inspection of the site, Tim Morton, a resource management officer with Aboriginal Affairs, wrote that he was "disappointed with the state of the Tundra camp" and that he "strongly recommends that a site presence be established immediately."

Morton identified a number of issues, among them: unreported fuel spills; leaky frost fighters, water pumps and generators; a drum of gasoline that was left unsealed; multiple opened drums and jerry cans inside the hazardous waste storage area; and a large sheen on the water within the storage area  

In late April, Public Works and Government Services Canada awarded a care and maintenance contract for Tundra to a joint venture between Nahanni Construction and Delta Engineering.

The latter company is managed by Robert Johnson, a former general manager for Aboriginal Engineering who once oversaw the Tundra clean-up project.

Johnson refused to comment.

Aboriginal Affairs says it expects Nahanni/Delta to set up camp at the site by June 1.