Court appoints receiver to take over Victoria Gold, granting Yukon gov't's request

The Ontario Superior Court of Justice has granted the Yukon government's request to appoint a receiver to take over mining company Victoria Gold and its assets, including the beleaguered Eagle gold mine near Mayo.

In a statement Wednesday afternoon, Yukon Minister of Justice and Attorney General Tracy-Anne McPhee said the company had "failed to comply with several formal directions" from the Yukon government. 

"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," McPhee said. 

The court order appoints PricewaterhouseCoopers Inc. as the receiver to manage Victoria Gold's former assets, under the direction of the Yukon government. It will be responsible for on-site mitigation work at the Eagle mine. 

That agency has been named the court-appointed receiver for other defunct Yukon mines in the past, including the Minto and Wolverine mines.

CBC has reached out to Victoria Gold CEO John McConnell for comment.

The court decision comes a month and a half after the failure of the heap leach pad at Eagle mine, which shut down mining activity there, and which led to cyanide leaking into and contaminating nearby waterways. The company has been facing significant financial difficulty in the wake of that event.

McPhee said the money the Yukon government has spent so far on dealing with the Eagle mine failure will be "recovered from the assets of Victoria Gold Corp."

"Following the company's failure to fulfil inspectors' directions, our government has ended reliance on Victoria Gold Corp. to take the appropriate actions in response to the heap leach failure," she stated.

In an interview with CBC News, McPhee said the government was concerned after Victoria Gold withdrew its consent to allow government contractors to go on site to do work. 

"This action at this time is focused on having the environmental mitigation work done," McPhee said.

"Unfortunately we've had to take this step to do that. We are confident in achieving the court order today that this is the right step and the right process."

McPhee said the receivership is effective immediately. 

Berm not built around heap leach, minister says 

McPhee also said the berm the Yukon government requested the mining company build around the heap leach slide was never built. 

The Yukon government's application for receivership, which Victoria Gold vowed earlier Wednesday to oppose, is one of two applications that were announced this week.

During a briefing Wednesday morning, the First Nation of Na-Cho Nyäk Dun also announced it had asked for a Yukon judge to appoint a receiver.

Chief Dawna Hope said the First Nation believes receivership is "the only way we can ensure the steps necessary to mitigate this disaster are being taken."

She said while the First Nation supports the Yukon government's own application, it believes the case should be dealt with in the Yukon.

"Decisions regarding our traditional lands should not be made thousands of kilometres away from our lands and home," she said.

CBC has reached out to Na-Cho Nyäk Dun for comment.

A Vancouver-based law firm has also filed a proposed securities class-action lawsuit against Victoria Gold, according to The Canadian Press, alleging the company made misleading statements regarding the safety and environmental practices at the mine, particularly concerning its heap leach facility. 

None of the allegations have been proven in court and the company has yet to file a defence. 

Fighting to stay in charge

Earlier Wednesday morning, Victoria Gold said it would oppose the Yukon government's attempt to appoint a receiver over the company and its property.

The company said it was served with the government's court application after the market closed on Aug. 13.

"The company intends to respond to oppose the application," the news release stated.

It did not address Na-Cho Nyäk Dun's application.

CBC News previously reported that more than $43.3 million-worth of miner's liens were registered against Victoria Gold between June 24 and July 31, which suggested the company's unpaid bills were quickly adding up. A contractor can file a miner's lien if they haven't been paid for work or supplies provided at a mine site, which can give them priority over some other creditors.  

Prior to that, the company warned that due to financial difficulties it might not have the money to remediate the impacts of its heap leach failure. Following that, the First Nation of Na-Cho Nyäk Dun said it had "lost confidence" in Victoria Gold's leadership and the Yukon government announced it was stepping in to deal with safety management at the mine.