Victoria Gold (TSXV: VGCX) has announced that the threat of major contamination from its Eagle mine in the Yukon has passed. CEO and president John McConnell confirmed the company’s financial stability in an interview with the CBC, following a June 24 landslide that halted production and threatened local waterways.
Landslide and Immediate Response
The landslide involved millions of tonnes of cyanide-laced ore, which stopped production and posed a significant environmental risk. McConnell apologized to employees, residents of Yukon, and the Na-Cho Nyäk Dun First Nation for the incident. He acknowledged the company’s responsibility in the situation but expressed disagreement with some of the territorial government’s responses, particularly the construction of a berm by contractors, citing potential environmental and safety concerns. Nevertheless, Victoria Gold is cooperating with the government’s efforts to address the issue.
The company’s first printed statement since July 12 indicated that “trace amounts” of cyanide have been found in a local creek. To prevent containment ponds from being overwhelmed, the company proposes returning some of the contaminated water to the heap leach pad. Victoria Gold emphasized that a modest irrigation strategy is a safe water management plan. This approach allows the company to enhance its water treatment and discharge capacity while avoiding the direct release of untreated water into the environment.
Financial Stability and Environmental Measures
Despite the landslide, Victoria Gold remains financially sound for the next four to six months. However, McConnell noted that the company might need financing afterward due to existing debt payments of C$232.5 million as of March 31. Shares in the company dropped 2.6% to C$0.565 on Wednesday morning, reflecting an 85% decline in value since the accident.
The landslide caused approximately 280,000 cubic meters of cyanide-containing solution to spill down a steep embankment, contaminating a local creek. The company has detected minor amounts of weak acid dissociable (WAD) cyanide in seven out of 134 samples collected as of July 23. The concentrations ranged from 5.2 to 9.3 parts per billion, which is within federal guidelines for drinking water but above the company’s water use license limit of 5 parts per billion.\
Ongoing Investigations and Future Plans
Victoria Gold has conducted a seismic survey to assess the heap leach pad’s embankment integrity and has increased its geotechnical monitoring. No significant material movement has been detected on the pad since the accident. The company is constructing lined containment ponds and has boosted water treatment capacity on site, despite delays caused by road closures south of Whitehorse. Equipment and chemicals for water treatment have been sourced from Texas and other locations.
McConnell stated that it is too early to determine the exact cause of the landslide. A three-person panel of experts, including two with experience in heap leaches and one hydrochemist, has been appointed to investigate. Their names will remain confidential until a report is released in four to six weeks.
The local First Nation has called for a moratorium on all mining in its traditional territory, reflecting broader environmental and social concerns. Victoria Gold’s response and cooperation with local authorities will be critical in managing the aftermath and ensuring the safety and sustainability of its operations.
Source: Mining.com
