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Seabridge Gold asks B.C. for more time to begin KSM mine construction, citing COVID-19

If granted, the extension would give the company 12 years to achieve a ‘substantial start’ on the mine, which has critics calling for a new assessment of environmental impacts

The owner of the proposed KSM mine in northwest B.C., situated atop one of the largest undeveloped gold deposits in Canada, has asked the province for an emergency two-year extension on its environmental assessment certificate, citing delays caused by COVID-19.

The mine’s owner, Toronto-based Seabridge Gold, originally received approval for the project in 2014, under an environmental assessment certificate that stated the project must be “substantially started” within five years.

In 2018, the company received a five-year extension to its environmental assessment certificate. If Seabridge’s request for an emergency extension is granted, the mine will end up having 12 years to achieve a substantial start on the mine from the time it was initially approved.

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Seabridge Gold’s senior vice president of environmental affairs, Brent Murphy, told The Narwhal it needs more time to find an experienced mining company as a business partner.

“Seabridge Gold has had interest from several companies to partner on the KSM project, however, the metals prices over the past few years have not been favourable for such an investment,” Murphy said in a written statement.

Seabridge Gold has estimated the project will cost more than $6 billion to build. It predicts the mine will generate over $30 billion GDP within the province and $20 billion in the rest of Canada over its 52-year lifespan.

The KSM mine site is located 65 kilometres north of Stewart, B.C., and 30 kilometres northeast of the B.C.-Alaska border.

If built, the gold, copper, silver and molybdenum mine will entail three open pits and two underground mines. The mining tenure covers 60,000 hectares, an area the size of 148 Stanley Parks. Once built, the mine could produce up to 130,000 tonnes of ore per day.

The mine’s proposed tailings facility is designed to store 2.3 billion tonnes of tailings. Its tallest dam will be 239 metres high, which is 18 metres taller than the Hoover Dam. The project initially required mining under an active glacier, but that glacier has now retreated.

Tailings dams B.C. chart

The Mount Polley mine had a total tailings storage volume of 44 million cubic metres. B.C.’s transboundary mines require much higher volumes of waste storage. The tailings facility at Red Chris can store up to 305 million cubic metres of mine waste. Shaft Creek has a storage volume of 588 million cubic metres and KSM a staggering 1,213 million cubic metres. Illustration: The Narwhal

B.C.’s Ministry of Environment and Climate Change Strategy told The Narwhal it is considering Seabridge Gold’s request. A spokesperson said the environmental assessment office will “initiate a review process with technical advisors (provincial, federal and local government agencies) and Indigenous nations to review the request.”

After that review, the office will submit its review to its chief executive assessment officer for a decision.

Delay must be ‘in the public interest’

The Environmental Assessment Act typically only allows certificate deadlines to be extended once, but companies are able to apply for an emergency provision under the Environmental Assessment Act for another extension.

Seabridge Gold made its request in March. In May, the acting chief executive assessment officer for B.C.’s environmental assessment office replied explaining the challenges the project faces must be “directly related to the emergency” and the delay must be “in the public interest.” He asked Seabridge to explain how the project’s inability to meet its 2024 deadline were directly related to delays to the 2020 field season and “why lost time cannot be made up in the coming four years.”

KSM mine

A helicopter traverses Salmon Glacier, the fifth largest glacier in North America, near the proposed location of the KSM mine. Photo: Garth Lenz / The Narwhal

In a response dated July 3, 2020, Seabridge Gold’s president and chief operating officer, Jay Layman, wrote “not having a JV [joint-venture] partner this year impacts our ability to initiate and ultimately complete the project feasibility study.”

In order to complete the feasibility study and begin construction, Layman said Seabridge needed a partner that could provide an additional investment between $600 million and $750 million. Seabridge Gold focuses on acquiring deposits and doing exploration, then selling them or creating a joint venture to get mines built, not building mines on its own.

He said the company had been expecting a proposal from prospective partners in March that was called off because of COVID-19.

Layman went on to say COVID-19 has disrupted markets and depressed the copper market, and that their financial advisors expected markets not to stabilize until 18 to 24 months after the end of the pandemic. He also said field work and permitting have slowed down, and delayed federal regulatory approvals to impact fish habitat.

He said Seabridge has met 26 of the 41 conditions in its environmental assessment certificate to date.

Science fiction or resource extraction? The strange tale of one of the largest mines ever proposed in B.C.

KSM’s environmental analysis ‘dated,’ expert says

David Chambers, founder and president of the Centre for Science in Public Participation, has 40 years of experience in mineral exploration and development. He said the KSM mine is proposed in a very difficult area with unpredictable weather and lots of water that needs to be diverted.

With a five-year extension already granted for the mine, Chambers said “its environmental analysis is quite dated.” In addition, since receiving its certificate, Seabridge Gold did more exploration and found more minerals than initially proposed.

“I would like to see another environmental analysis, rather than a permit extension,” he said.

But he added he doesn’t find Seabridge Gold’s request “unreasonable” considering the impacts of COVID-19 on government and industry.

Seabridge Gold may be taking a long time to find a partner because KSM mine “isn’t a sure bet,” Chambers said, and the $6 billion expense and challenging topography make it harder for a company to “justify that kind of investment.”

Greg Knox, executive director of SkeenaWild Conservation Trust, said he finds COVID-19 to be “a poor excuse” for a further extension.

“They’ve had five years since their permit. They received another five years and we’re only a year into that extension and they’re already asking for additional time,” he said.

KSM mine

Rugged peaks and glaciers near the proposed KSM mine. The KSM mine project is composed of four mineral deposits, the Kerr, Sulphurets, Mitchell and Iron Cap. The view north in this image shows the proposed location of the Sulphurets open pit mine and future waste rock dump. Photo: Garth Lenz / The Narwhal

It wouldn’t be the first time a controversial B.C. development has lost its environmental assessment certificate due to failing to start work on the project. Jumbo Glacier Resort received its certificate in 2004, was given an extra five years to substantially start the project by 2014, and still hadn’t met the conditions of the certificate by that year. The Minister of Environment at the time deemed the certificate invalid. The company launched an appeal, but the B.C. Court of Appeal upheld the decision last year.

Knox said he’d also like to see the mine reviewed under the new provincial Environmental Assessment Act and the new federal Impact Assessment Act.

If Seabridge Gold is not able to achieve a substantial start by 2024, “it should be required to undergo a new environmental assessment,” he said.

“Regulations change, mining practices change and the public should be provided a new opportunity to ensure this project is built in the best possible manner that minimizes risks.”

People in B.C. and Alaska are concerned about contamination and harm to fish habitat. Mining will take place in the Mitchell and Sulphurets watersheds, which drain into the transboundary Unuk River. Seabridge has countered this criticism by pointing out water will be taken away from the mine site via a 23-kilometre pipeline and treated at the tailings management facility. That facility will be located in the Teigen and Treaty watersheds, which drain into the salmon-bearing Bell-Irving and Nass Rivers.

Seabridge Gold has also said it’s exceeded the environmental requirements of its certificate by focusing on smaller open pits, converting to electric equipment instead of diesel and working to improve water treatment.

However, Chris Sergeant, a research scientist at the University of Montana who studies Alaskan salmon populations, said the proposed mine may still impact water quality in the Unuk River.

“Water that contacts the mine on the Unuk River side will drain directly into a water storage reservoir,” Sergeant said. “This water would receive treatment before discharge into the Unuk watershed.”

But there isn’t currently a proven method for sufficient removal of selenium — which has been shown to negatively impact fish populations — and mine operations are expected to increase selenium levels in the water, Sergeant said.

Article updated at 10:40 a.m. PST on Aug. 20, 2020, to add comment from Chris Sergeant.

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