Private company takes on Yukon gold mine

Mining assets in the Yukon that formerly belonged to bankrupt company BYG Natural Resources have been sold to a privately held company, Saskatchewan Ltd., for $3.1 million. Ontario-based BYG's interim receiver, PricewaterhouseCoopers, announced the sale Aug. 9. The 199 claims and leases at the Mount Nansen property near Carmacks had been under the joint care of the governments of Yukon and Canada.

Saskatchewan Ltd says it intends to begin developing an exploration program for the Mount Nansen site. The Vancouver-based company holds 74,000 hectares of prospective uranium claims in the Athabasca basin, Saskatchewan.

BYG operated an open pit gold-silver mine at Mount Nansen from 1996 to 1999. As related in Yukon Supreme Court documents, BYG began to violate the terms of its water license almost immediately. BYG ceased operations in February 1999 when ordered to do so by the Canadian government for failing to follow directions to remedy its environmental problems and water license violations.

Judge Heino Lilles of the Yukon Territorial Court convicted BYG on three criminal charges for violation of its water license. He noted that the company failed to administer a simple treatment to stabilize the arsenic levels in its tailings pond; used faulty materials to build its tailing pond dam which allowed seepage to weaken the dam by erosion; improperly constructed the ditches that surrounded the tailings pond; constructed the tailings pond haphazardly and without proper plans or supervision; and failed to assign one person to ensure compliance with its water license.

Water licenses violated

"The above examples demonstrate an attitude consistent with 'raping and pillaging' the resources of the Yukon, with little consideration for the detailed conditions of the water licenses granted to BYG," Judge Lilles wrote. "Keeping in mind the dangerous and toxic materials involved - heavy metals such as copper and zinc and deadly chemicals such as arsenic and cyanide - the level of care or diligence reasonably expected from BYG greatly exceeded what the company provided."

Judge Lilles also described BYG as "inept, bumbling, amateurish and possibly negligent." He imposed the maximum fine of $100,000 on each count, and expressed the opinion that the legislation should be amended to permit the imposition of fines and imprisonment on senior officers and managers of the company. It has been estimated that the environmental cleanup costs in this case could be as high as $23 million.

Coincidentally, at almost the same time as the sale of BYG's assets was announced, in early August, the Yukon Water Board issued a water license to a company led by BYG's former president, Graham Dickson. He is now president and CEO of Vancouver-based Yukon-Nevada Gold, which wants to reopen the abandoned Ketza River gold mine near Ross River. The company will have to put up a $3 million reclamation bond for the project, and it will clean up what was left behind by the previous owners.