Court approves $55M increase for Victoria Gold receivership

An Ontario judge has approved a $55-million increase to the Victoria Gold receivership budget, the first additional cash injection since firm PriceWaterhouseCoopers (PwC) took over the company's affairs following the heap leach failure at its Yukon mine.

Ontario Superior Court of Justice Judge Barbara Conway signed off on an "amended and restarted" receivership order on Dec. 9 that, among other things, increases the receiver's borrowing charge to $105 million.

Conway was the same judge who, following an application from the Yukon government, approved the receivership in August.

The government initially provided PwC with $50 million to take over environmental protection work at Victoria Gold's Eagle Gold mine after a heap leach failure in June triggered serious concerns about contamination to the surrounding land and water. 

The initial funding, which had been spent by the week of Dec. 6, was never intended to be the total amount spent on the work. The additional $55 million requested by PwC will be withdrawn from Victoria Gold's $104 million in posted security — money originally intended to cover mine closure and reclamation costs — and will cover work through the end of March.

Besides increasing the borrowing cost, the amended receivership order also permits PwC to sell up to $1 million of Victoria Gold's assets in a single transaction without needing court approval, up from $500,000.

In addition, the order authorizes PwC to appoint three new technical advisors to serve alongside its main environmental consultant on the project, and extends protection from legal action to those advisors as well as to members of the independent review board investigating the cause of the heap leach failure. 

A separate order, meanwhile, allows PwC to sell off certain "non-core" assets without requiring court permission — specifically, its shares in three other gold companies.

While the receivership file remains in Ontario for now, an endorsement document by Conway says the First Nation of Na-Cho Nyäk Dun has "reserved its rights to see a transfer" of the proceedings to the Yukon Supreme Court in February or March.