The Yukon Water Board has increased the reclamation bond required for the largest operating mine in Yukon by $3.5 million — and, according to the board chair, future increases could be tied to potential impacts of climate change. 

“There are design changes that are directly resulting from climate change,” said Piers McDonald, adding these design changes could include increasing the size of settling ponds — basins that make wastewater less turbid — or what’s required through care and maintenance, after the mine closes.

According to a recent order by the water board, financial security required for Victoria Gold’s Eagle Gold mine, located north of Mayo, is now roughly $31 million. That figure has increased from the $27.5 million previously set by the Yukon government.

The company’s president, John McConnell, wasn’t immediately available for comment.

There are two operating mines in Yukon currently — Minto and Eagle. Coffee Gold and Casino are both under review. Map: Carol Linnitt / The Narwhal

Under the Quartz Mining Act, both the Yukon government and the water board have the authority to set financial security, said Sue Thomas, a spokesperson with the Department of Energy, Mines and Resources. She said the water board can set factors to determine financial security for a water licence that doesn’t require approval from the territorial government.

“These days, climate change can be more of a factor requiring water management on site and precipitation management,” Thomas said. 

McDonald said the board found certain discrepancies in information supplied by Victoria Gold, such as costs for waste disposal and water management, which has affected the amount of security required. 

This follows an incident at the Eagle Gold mine in April, in which Victoria Gold dumped 43 million litres of untreated wastewater — equivalent to roughly 17 Olympic-sized swimming pools — into a gravel-lined sump that filters into groundwater, in order to manage the spring freshet following the highest recorded snowfall in the area since 2007. The incident, first reported by The Narwhal, contravened limits set in Victoria Gold’s water licence, but the alternative was allowing a treatment pond to overflow from the deluge. 

The event highlighted the mine’s lack of capacity to brace for the changing weather, something Victoria Gold’s president acknowledged to The Narwhal at the time. While a system for pumping excess wastewater from the treatment pond into another pond on site was underway before the incident, McConnell said, it wasn’t completed in time to manage the heavy freshet. 

“The guys were already working on setting up the pump, but we got caught with our pants down because the weather warmed up faster than we expected,” McConnell said.

McDonald, the chair of the Yukon Water Board, said the incident is on the board’s radar, adding that it’s working with inspectors to further investigate what happened. He said it isn’t reflected in the adjusted security levels, but that it could be in the future, adding that when the company submits its next reclamation and closure plan, the water board “will think that problem through.”

McDonald also couldn’t say whether, or to what extent, the increase in security is associated with the effects of climate change, such as heavier precipitation and spring freshets. However, he said those impacts are top-of-mind to those who sit on the board, which could affect decisions regarding security.

“They do want to send clear signals that the regulators are taking (climate change) seriously,” McDonald said. “On a small government like the Yukon’s, it could be quite a serious drain on resources if we don’t plan for it now.” 

“Climate change is making a difference.” 

‘There never seems to be enough money to clean the sites up’

Before mines can go into operation, companies are required to pay a reclamation bond to the Yukon government, which keeps that money in a bank, returning it as reclamation work occurs. But the amount of security that is paid by mines is somewhat of a moving target, reviewed every two years, when major mines are required to submit updated reclamation and closure plans. The idea is that as mines expand over the years, so, too, does the required financial security. But there are problems with that, said Lewis Rifkind, mining analyst with the Yukon Conservation Society.

“Two years is a very short time in mining projects,” he said. “When things go wrong, they go wrong in a big way.”  

Rifkind said reviewing securities every two years makes it difficult to ensure they’re keeping up with mines as they grow. 

And, if a mine goes bankrupt, he said, costs balloon, typically falling on the Yukon government — a result of having to cover care and maintenance costs while legal affairs are settled and reassess original closure plans, which often don’t account for adequate security levels.

“If you just look two years ahead, I worry we’re going to get into the Wolverine situation,” Rifkind said.

The beleaguered Wolverine Mine, which is estimated by the Yukon government to cost more than $35 million to clean up, saw its bankrupt owners walk away, allowing liabilities to increase in their wake, according to a study completed by PricewaterhouseCoopers Inc., which was named receiver for the mine last year. 

The cleanup of the Wolverine Mine is estimated to cost more than $35 million, after its bankrupt owners walked away. Photo: Yukon government

A recent Yukon Supreme Court decision confirmed the Yukon government will be the first recipient of dollars flowing from bankruptcy proceedings for Yukon Zinc, the company that built the mine in southeast Yukon, in order to cover clean-up and maintenance costs that now fall on the territory. 

Rifkind said this example illustrates that if a company can’t put forward full security for the mine’s life, it raises questions about whether a project should go ahead at all.

“If we’re really concerned about the environment, we should be asking for too much up front,” he said. “Our experience in the Yukon is there never seems to be enough money to clean the sites up. By the Yukon government holding the money, there’s an incentive for the company to do the closure and reclamation because they get the money back, whereas if you pay too little, what’s the incentive? You just declare bankruptcy and walk away.”

Yukon government and water board considering future climate change impacts on mines

The Yukon Water Board, to its credit, Rifkind said, is asking tough questions during public hearings for mines that pertain to long-term effects related to climate change.

“They tend to ask a lot of questions about precipitation and how we’re designing for storms and things like that, but, also, we’re seeing it in the security calculations,” he said. “Of course, in the North, water is one of the things that climate change is going to create a lot of, whether it’s rain, extra snowmelt, [thawing] permafrost — it’s very H2O oriented.”

“The mining companies tend to think 10 or 20 years ahead. The water board is often thinking 100 years ahead.”

The Department of Energy, Mines and Resources is also currently leading a project, in partnership with First Nations and the water board, to mitigate future impacts of climate change on mine sites, such as the overflow Victoria Gold experienced in April.

“The project will develop a document to guide how mines can prepare for climate change and how they continually assess whether the climate is affecting critical infrastructure on the mine site,” Thomas said. 

The document should be completed by March 2021, according to Thomas.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

During a span of nine days in April, a Yukon mine dumped thousands of cubic metres of untreated wastewater into a gravel-lined sump that filters into groundwater and could leach into a nearby creek, according to a company report.  

Victoria Gold’s Eagle Gold Mine north of Mayo — the largest gold mine in Yukon history — discharged roughly 43 million litres (about 17 Olympic-sized swimming pools) of  contaminated water, as a result of increased runoff from snowmelt threatening to overflow one of the ponds used to collect mine wastewater, according to the report. 

The discharged water hadn’t been used as part of gold processing, but could have come into contact with the open-pit mine’s infrastructure, such as roads and waste dumps, for instance.

Due to the lack of capacity at the wastewater pond, the company had to funnel the excess water into a sump — a pit where water percolates through gravel lining and absorbs into the ground. The sump was used previously for excess runoff water during the mine’s construction.

“They basically took the water and pumped it straight into the sump without treatment,” said Lewis Rifkind, a mining analyst with the Yukon Conservation Society. If the company didn’t proactively divert the water, Rifkind said the problem could have been worse — the banks of the pond could have eroded, leading to even more water spilling over and flowing into a nearby creek. 

“The mining company dealt with the situation as best they could,” Rifkind said. “However, to do that, they had to put contaminated water into the groundwater system.”

Arsenic levels nearly four times allowable limit on one day

The suspended solids in the wastewater, which carry silt and plant matter, are the top concern for the company, according to the report. Using the sump was a means of settling sediment-laden water by filtering through the gravel and ground, which collects that sediment.

Chemical contaminants, such as arsenic, aren’t as easy to filter out. Arsenic is a highly toxic naturally occurring chemical that’s found in significant quantities in gold deposits. 

There are two operating mines in Yukon currently — Minto and Eagle. Coffee Gold and Casino are both under review. Map: Carol Linnitt / The Narwhal

Between April 20 and 28, as the wastewater was pumped into the sump, Victoria Gold’s discharge report shows that arsenic exceeded a limit of 0.053 milligrams per litre on three different days. On April 27, for instance, arsenic levels were more than four times the allowable concentration.

According to the World Health Organization, “long-term exposure to arsenic from drinking water and food can cause cancer and skin lesions.”

 It can also affect fish, Rifkind said. 

“Though we’re not talking about it yet, it can start entering the food chain,” he said.

Iron was also present in the discharged water. It only exceeded allowable limits of 6.4 milligrams per litre on April 27 at 6.95 milligrams per litre. 

Samples taken from the sump water and an inlet of the pond on April 21 were used to test the lethality on rainbow trout and a small plankton-like crustacean. Both were largely unaffected but longer term test results are pending, the report says.

Extent of environmental impacts still unknown

With gravity’s pull, the contaminated water may still be inching closer to Haggart Creek.

Contractors for Victoria Gold monitored the sump and creek water during the nine days of wastewater discharge. 

“We do not believe any water actually reached the creek,” John McConnell, president and CEO of Victoria Gold, told The Narwhal. “Monitoring suggests no acute impact to aquatic life downstream.”

He added that the company will continue to monitor whether there are downstream impacts in the future.

Contamination in the creek likely won’t show up on tests for quite a while, Rifkind said, and it’s unclear how quickly the contaminated water is travelling through the ground right now. “We’re going to have to watch this over the next couple of months, maybe even years to see if we’re going to see a spike in arsenic and things like that,” he said.

‘We’re going to have to start designing for extreme weather events’

This year, the Eagle Gold Mine site saw the highest recorded snowfall amount since 2007, 45 per cent more than the previous highest record, the report showed. Along with warmer than average temperatures, this meant a deluge for the mine to deal with, McConnell said.

While the effluent released at the sump saw the mine breach the limits of its water use licence, McConnell said that was a choice they had to make as the pond edged towards dangerously over-capacity. 

“We weighed contravening our licence or doing what’s best for the environment,” he said. “We decided to do what’s best for the environment.”

Eagle Gold mine. Photo: Bighouseproductions.ca

Rifkind said while the company made the right move, this event has presented a major blind spot. 

“It raises the question, how the hell could they not have anticipated this?” he said.

The issue has laid bare a design flaw, Rifkind said — the pond is too small to accommodate increasing rates of precipitation, which could intensify with climate change.

“If we’re serious about protecting groundwater, if we’re serious about protecting the environment, we’re going to have to start rethinking how these mines are laid out and we have to recognize that our current models and understanding of snowmelt, of rainfall and general impacts of climate change are woefully inadequate,” he said. “This will be the poster for this issue. We’re going to have to start designing for extreme weather events. It’s in the mining industry’s best interest to start considering these issues very seriously.”

Rifkind wants the wastewater pond to be expanded. He said using the sump as a natural filtration system for excess water presents its own set of challenges. 

“We shouldn’t rely on that because what happens is the soil and gravel underneath start to get saturated with contaminates, so over time the ability of the ground to absorb contaminants wears out,” he said.

A system for pumping excess wastewater into another pond on site was underway before the incident, McConnell said.

“The guys were already working on setting up the pump, but we got caught with our pants down because the weather warmed up faster than we expected.”

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

WHITEHORSE, Yukon — Despite restrictions set in place to curb physical contact among Yukoners during the COVID-19 pandemic, the territory’s two producing mines continue to plug along, stirring concern among nearby First Nations.

White River First Nation called on Yukon Premier Sandy Silver to stop mining activity in the territory this week. White River lands director Janet VanderMeer told The Narwhal that resources should be geared toward the health and safety of citizens, not the extractive industry.

Her concern is that keeping Minto Mine, located roughly 240 kilometres northwest of Whitehorse, and others running will bring in more workers from outside the territory, increasing the risk of locals coming into contact with the virus. That’s why all exploration and staking in the First Nation’s traditional territory should stop, VanderMeer said.

“Shut it down, let’s move on and that’s it,” she said. “Reassess in 30 days.”

In a written statement, John Brim, CEO of Minto Management Ltd., said the copper-gold mine continues to operate in step with COVID-19 orders. He declined to be interviewed.

The Yukon government released guidelines for work camps earlier this week, instituting a mandatory 14-day self-isolation period for those who leave Yukon and intend to return to a site. Other measures include ensuring food is handled safely, practising social distancing and limiting contact with co-workers.

“We have to take the word of the company,” VanderMeer said. “We have to trust them, that they will incorporate these guidelines into what they do. The reality on the ground is a lot different than a damn piece of paper. I don’t trust them.”

She added that the First Nation wasn’t consulted on the guidelines.

“It’s one of the red flags,” she said, noting she has yet to hear back from the Yukon government since sending a letter urging a pause on mining to the premier on Monday.

‘You don’t turn the lights off and leave’

Ranj Pillai, minister of the Department of Energy, Mines and Resources, said during a news conference on Wednesday that mining can’t simply shut down.

“You don’t turn the lights off and leave an operation of that size,” Pillai said. “There is still an obligation to have people on the ground.”

The Minto and Eagle Gold mines both have on-site camps for workers. John McConnell, president and CEO of Victoria Gold, told The Narwhal that roughly 190 people are currently at Eagle Gold, the largest mine in the territory. This, he added, hasn’t changed since operations began. Minto Management Ltd. did not respond to questions about the size of its workforce.

On March 25, the First Nation of Na-cho Nyak Dun sent a public letter to the premier, calling on the government to put mines into care and maintenance until the pandemic blows over.

“We are also asking for a temporary halt to prospectors coming to and staking our lands,” Chief Simon Mervyn wrote in the letter. “Economic imperatives cannot be placed above the health and safety of our people.”

Failing to do so, he continued, “stands to have serious and irreparable consequences.”

“It also constitutes a potential breach of our guaranteed rights to life, security and other legal rights under the Charter of Rights and Freedoms as well as our section 35 rights to protect our people and our way of life.”

Mervyn declined further comment to The Narwhal.

His letter doesn’t specifically mention the nearby Eagle Gold Mine, which is located in central Yukon near Mayo.

Pillai told reporters he heard Mervyn’s request “loud and clear,” noting a resolution was recently passed by the First Nation regarding the issue.

“They’ve been communicating with people who mine in that region and they’ve been sharing that information saying that’s their position,” he said.

“I can say that my colleagues that are here with us in cabinet are moving very quickly and we’re probably going to hear about some measures very soon. I think that’s going to lead to some more comfort around ensuring we keep people safe.”

Pillai said exploration activity hasn’t been suspended.

In a message to miners, he said: “Get your materials, get your supplies, go to where you need to work away from people and understand that all of our communities are at a heightened alert right now because of this.”

The Eagle Gold Mine, located in central Yukon, is the biggest mine in the territory and is currently home to about 190 workers. Photo: Bighouseproductions.ca

Work crews at Eagle Gold Mine staying for longer periods

McConnell said Victoria Gold has implemented measures of its own. The objective is twofold, he said — providing job security while preventing the spread of the virus.

Rather than the typical two-week rotations, for instance, crews have been asked to stay for four.

“The crew there now has volunteered to stay there for eight weeks,” McConnell said.

People are being screened for the virus when coming to and from the site, he continued. Commercial flights aren’t being used anymore between Whitehorse and Mayo. The company has decided to use charter planes instead. Workers take a company bus to get to the site.

“There’s no contact in Mayo,” McConnell said.

In terms of Mervyn’s letter, McConnell said he understands his concerns.

“They want to make sure that no one in their community gets COVID,” he said. “I talk to the chief quite regularly. I have absolutely no problem with asking exploration companies to refrain from staking until we’ve stopped emergency measures.”

Six cases of COVID-19 in Yukon

On Wednesday, Dr. Brendan Hanley, Yukon’s chief medical officer of health, confirmed the sixth case of COVID-19 in Yukon. He said those who tested positive for the virus are all located in Whitehorse. Three people have fully recovered, he added.

The first case of COVID-19 in Yukon was announced on March 22. The following day, Pillai said Minto had 30 employees fly into the territory to start work at the mine, noting that his department informed the mine of Hanley’s order.

“Some of those individuals went home and other individuals have been in isolation since that point in time,” he said.

“Anybody coming into the territory, no matter what their field of work, has that obligation to ensure they’re healthy people. That’s something we’ve shared with that industry and that’s something we’ll share with all industries.”

“We’re not differentiating between Victoria Gold, a prospector or somebody building a house.”

On Thursday, the Yukon government rolled out further emergency measures to brace for further impacts. Orders provided by Hanley are now enforceable under the Civil Emergency Measures Act. Self-isolating upon entering the territory, for instance, is now law, meaning there could be jail time of up to six months, fines or both for those who fail to do so. Travellers are now required to fill out a travel declaration at the border and airport. There are soon to be enforcement officers posted at entry points.

Dr. Brendan Hanley, Yukon’s chief medical officer, on April 1, as he announced the sixth COVID-19 case in the territory. Photo: Julien Gignac / The Narwhal

Mining deemed essential service

Mining was also deemed an essential service on Thursday.

“Mining, along with other manufacturing and resource sectors such as agriculture and forestry, has been defined as essential to manage the reliable operation of infrastructure essential for the health, safety and economic well-being of Yukoners,” Jesse Devost, a spokesperson with the Department of Energy, Mines and Resources, said in a written statement to The Narwhal.

“Mining operations are businesses that ensure global continuity of supply of mining and mineral materials and products. Yukon is part of the global supply chain.”

Asked by reporters how these measures affect the mining industry, Tracy-Anne McPhee, Minister of Justice, said during an announcement that workers are required to self-isolate away from a mine site or camp.

When it comes to White River First Nation, Pillai said it has asserted territory overlapping with four other First Nations. He said he hasn’t heard from these other governments regarding putting an end to mining activity, adding that the company has paid out miners from Little Salmon/Carmacks and Selkirk First Nations and sent them home.

VanderMeer said First Nations are starting to work together in a bid to put pressure on the government to halt mining operations. She declined to elaborate on which First Nations are involved.

“I do know one of the best things is for us to stay operating, if we can, and contribute to the ongoing economy of the Yukon.”

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.