Yukon government says it didn't intend to shut down Victoria Gold

The Yukon's justice minister says it was not the government's intention to shut down Victoria Gold when it put the mining company into receivership earlier this week. 

Speaking at a technical briefing Friday morning, Minister Tracy-Anne McPhee said the government does not want to put the company out of business. 

"This is not the end of the company from our point of view," McPhee said. 

"We were very careful to make sure there was a process for a path forward."

The briefing came days after the mining company was put into receivership by the Yukon government following a successful court application. Tensions between the company and the Yukon government have grown in recent weeks since the failure of the Eagle mine's heap leach pad on June 24.

John McConnell, Victoria Gold's CEO, told CBC Thursday that Victoria Gold is "done" and its entire board had quit following the receivership. 

Yukon gives another update on Victoria Gold heap leach failure

4 months ago

Duration 45:58

The government of the Yukon holds a briefing on the heap leach facility failure at Victoria Gold's Eagle mine.

McPhee said that was "their decision and they were not directed to resign by the receiver or the Yukon government." 

She also said the mining company had asked the judge for an adjournment because it intended to file for insolvency under the Companies' Creditors Arrangement Act. The judge ultimately decided the receivership application should go forward. 

McPhee said the government's goal won't be to close the Eagle gold mine or sell off Victoria Gold's assets, but rather to get the mine back to the state it was in before the failure.

Lauren Haney, the deputy minister of Energy, Mines and Resources, said work to clean up the Eagle mine site needs to move fast. 

"This is the critical time between now and freeze-up," Haney said. "There is tremendous amount of work to be done on the site."

Cyanide levels lower following discharge 

Tyler Williams, a water resource scientist with the Yukon government, also presented the latest testing results from waterways near the mine site. 

Test results from July 31 to Aug. 2 saw a sharp increase of cyanide from various locations in Haggart Creek  — exceeding guidelines for aquatic life — when the company discharged water into the creek. 

At a briefing last week, government officials and scientists said Victoria Gold personnel discovered at least 68 dead Arctic grayling and slimy sculpin in Haggart Creek on Aug. 2.

Between Aug. 3 and Aug. 8, cyanide levels have returned to what was seen before the discharge event, Williams said. 

"Cyanide was the primary contaminant that we saw in Haggart Creek during the discharge," Williams said. 

Those findings contradict what Victoria Gold CEO John McConnell told CBC earlier this week — that hard water or chlorine may have killed the fish, rather than cyanide. 

Cameron Sinclair, a senior fisheries biologist with the territorial government, said there was "no indication" that water hardness caused the death of the fish.