Sale of abandoned, contaminated mine site in Yukon gets go-ahead

A polluted mine site that was abandoned two decades ago and once called "an embarrassment to Canada" by a Yukon Supreme Court judge, may have a new owner to clean it up.

The federal government announced Monday that Alexco/JDS Group has been approved by the Yukon Supreme Court to purchase the Mount Nansen site near Carmacks, Yukon, and remediate the site within 10 years. 

The purchase price has not been made public.

The federal government would oversee and pay for the cleanup work, but Alexco/JDS will do the job and then own the site. It's a similar arrangement to what the company has at Yukon's Keno Hill district. 

"That's where the, I guess where the concept, if you will, probably originally came from — was the success of the Keno Hill agreement that we have in place with Canada," said Brad Thrall, president of the Alexco Environmental Group.

Alexco now has an active exploration program at Keno Hill, but Thrall said it's too soon to say what will come of Mount Nansen.

"We will own the claims, and we'll have all the rights of exploration. We don't have any exploration plans at this time, but again ... we are essentially purchasing the claims," he said.

3 years to find buyer

The sale process for the Mount Nansen site began three years ago, when a Yukon Supreme Court judge approved a plan to clean up the site that's 60 kilometres west of Carmacks. The plan called for the federal government to pay for the cleanup, but the mine site's court-appointed receiver, PricewaterhouseCoopers Inc., had to find qualified bidders who might agree to purchase the property and do the job.

The gold and silver mine was abandoned in 1999 after the owner, Toronto firm B.Y.G. Natural Resources, was charged with numerous environmental violations. Five years later, B.Y.G. went bankrupt and the federal government assumed responsibility for the site. 

In his 2016 written decision approving the clean-up plan, Yukon Supreme Court Justice Ron Veale lambasted BYG for an "unscrupulous history of ... operational mismanagement" that left a big toxic mess for government to deal with.

"It is an embarrassment to Canada, Yukon and the responsible mining community," Veale wrote.

Required tasks identified in 2016 include de-watering the Mount Nansen pit in preparation to accept 354,000 cubic metres of waste rock and more than 300,000 cubic metres of tailings and contaminated soil, then sealing the pit with a permanent liner.

First Nation to benefit

According to the federal government, the sale to Alexco/JDS Group will ensure the clean-up benefits Yukoners and First Nations. 

The sale agreement requires Alexco/JDS to provide employment, training, and other benefits to the Little Salmon/Carmacks First Nation, the Village of Carmacks and Yukoners. Thrall says the First Nation will be an active partner.

"We do have a benefits agreement that we have now in place, between AEG [Alexco Enviromental Group], JDS and Little Salmon/Carmacks First Nation. So you know, their participation and support is going to be key to making this a success," Thrall said.

Ed Schultz, deputy chief of the First Nation, says dealing with potentially toxic tailings at the site has been a priority for his community.

"This is something that I know that the Little Salmon/Carmacks First Nations citizens and many of the Yukon residents within this area have been asking for, for well over a decade — nearly 20 years," Schultz said.

There are still some hurdles before the sale is finalized and work can begin, including transferring the care and maintenance water licence for the site to its new owner. Alexco must also submit a plan to the Yukon Environmental and Socio-economic Assessment Board.

"It's going to take at least two or three years to go through the permitting process. So it's going to be several years before we actually start the clean-up work," Thrall said.