As gold mining winds down at N.S. mine, environmentalists worry about what comes next

Environmentalists are raising concerns about the future of Nova Scotia's only operating gold mine.

Gold from the open pit at the Touquoy mine in Moose River, N.S., has already been exhausted, so active mining stopped at the end of January. The mine's owners, Australian company St Barbara, say they are now turning their attention to processing stockpiles, which are lower grade ore and less profitable.

The company expects to finish processing remaining stockpiles by the end of 2024, at which time St Barbara will place the mine in care and maintenance mode — meaning water treatment and monitoring would continue but other operations would cease.

That prospect has raised red flags for the Ecology Action Centre's Karen McKendry.

She says care and maintenance mode is a sort of limbo between being active and closed. Once a company officially closes a mine, it is subject to a plethora of regulations that govern cleanup and require the company to pay for reclamation. If a mine remains in care and maintenance mode indefinitely, reclamation isn't required until closure.

"So it just makes this sort of purgatory where Nova Scotians have a contaminated site that never quite gets cleaned up," McKendry says. "Worst-case scenario, like we saw in New Brunswick, the company splits town and Nova Scotians … get left holding the bag for the liability and the cleanup."

She's referring to the recent financial collapse of Trevali Mining Corp., which owns the Caribou zinc mine, among others, in New Brunswick.

Last week, the New Brunswick government was forced to assume responsibility for the Caribou mine when the company went into receivership. Trevali filed for creditor protection last August, and the Caribou mine was placed in care and maintenance.

"It looked like foreshadowing of Nova Scotia — you have a mine that's no longer profitable to companies, so they go into this limbo where they don't have to pay out the cleanup and they can run off," McKendry said. "When I saw that, I was like, oh my God, this is a teaser trailer for what's going to happen in Nova Scotia."

McKendry says she'd like to see provincial regulations require mines in care and maintenance to either reopen or close after a certain period of time.

A spokesperson for the Natural Resources Department said mine sites generally go on care and maintenance due to changing market conditions, and owners must follow conditions set out in an agreement. The department monitors care and maintenance activities.

Currently, there are five mines on care and maintenance in the province, including two gypsum mines in Hants County that have been in that state since 2011. One base-metal mine in Gays River, owned by EDM Resources, has been in care and maintenance since 2013 but plans to restart operations this year.

Company plans to restructure

Adding to McKendry's worries is the fact that St Barbara is in the process of restructuring and plans to create a new, smaller company called Phoenician Metals that would own and operate St Barbara's properties in Nova Scotia.

McKendry says that's a typical strategy when a company's assets are not performing well or are at risk. The new company, which has fewer financial resources, can declare bankruptcy without significantly affecting the bigger company.

"I think someone, you know, looking strategically and thinking, well, if things don't line up for us to mine anymore in Nova Scotia, we'll just leave," she said.

Recent financial documents from St Barbara note that cash flow at the Touquoy mine has been affected by the switch to processing stockpiles as well as the investment required to raise the height of the tailings pond wall. A recent failure in one of the walls caused by rainfall during post-tropical storm Fiona also required repair.

If the restructuring is approved, St Barbara will merge with another company, Genesis, to form Hoover House. Hoover House would retain a 20 per cent interest in Phoenician Metals, while St Barbara stakeholders would own the other 80 per cent.

The plan must be approved by stakeholders and the courts in Australia, and is expected to be implemented in May.

In a statement, a spokesperson for St Barbara said the company has long-term plans in the province and is "focused on our commitments to growing sustainably and respecting the environment."

Kenny Cameron said the province holds a $41.2-million reclamation bond from the company.

"We look forward to meeting all regulated requirements and fully support the government's requirement for the placement of a reclamation bond as security for the province and provincial taxpayers," said Cameron.

Other proposals in the works

The future of the Touquoy mine is also tied up with St Barbara's other plans in Nova Scotia.

The company has proposed three more gold mines in the province — Fifteen Mile Stream, Cochrane Hill and Beaver Dam. All three proposals call for the Touquoy mine's facilities to be used to process gold from the sites.

In the financial documents, the company says it plans to prioritize the Fifteen Mile Stream project, with a goal of developing it in 2026. That proposal would see a 400-hectare open-pit mine, as well as three other open pits, developed in the Liscomb Game Sanctuary, about 95 kilometres northeast of Halifax. The company has until August 2025 to complete the environmental studies required as part of the federal environmental assessment process.

The Beaver Dam proposal is under the same deadline of August 2025 for further studies, but St Barbara has paused the permitting process for Beaver Dam to allow for further discussions with First Nations, community groups and government. The Beaver Dam mine would be located in Marinette, 18 kilometres northwest of Sheet Harbour. It would cover 243 hectares and consist of an open pit, waste-rock storage, settling ponds and water treatment facilities.

The environmental assessment process for the Cochrane Hill proposal was terminated by the federal agency last August when the company failed to submit the required studies by the deadline. At the time, the company said it still plans to pursue the project, but is considering making changes to the proposal.

That project, which has met with significant opposition, would see an open-pit gold mine created near Melrose, about 13 kilometres north of Sherbrooke. 

The Touquoy mine began commercial gold production in March 2018 and was expected to last for at least five years.

It generated $7.9 million in royalties for the province between 2017 and December 2022.

In January, the company reduced the number of jobs in its Atlantic operations from 292 to 182, including 44 layoffs. Ten employees were offered other jobs, and 56 other positions were already vacant.