Fuel barrels

Fuel barrels left at the site of the Jericho Diamond mine. When Shear walked away last year, it left behind improperly stored waste and untreated fuel spills. (Courtesy AANDC)

There are new, but faint, signs of life at Shear Diamonds.

That’s the company that tried to re-open Nunavut's Jericho mine in 2010, before disappearing more than a year ago.

Now, after a long silence, Shear's Chief Restructuring Officer has written a letter to Nunavut regulators.

Thomas Pladsen says the company is down to one director, Manuel Rappaport. And Pladsen says his own role as CRO is to find money to re-start the mine.

But the letter also claims that Shear’s efforts to re-finance the mine have been stymied, because the federal government now has control of the Jericho site.

If so, that’s news to most. Ryan Barry, executive director of the Nunavut Impact Review Board, says the NIRB’s project certificate for the Jericho site is still assigned to Shear.

“We were a bit surprised by its understanding that Aboriginal Affairs was in control of the site, and was, in its view, responsible for all care and maintenance and monitoring responsibilities,” Barry says. “From our perspective, that's not the case, so we're looking for clarification from Aboriginal Affairs.”

The department of Aboriginal Affairs and Northern Development says it has done some monitoring at the Jericho site, and some work to make sure the environment is protected. In June, Nunavut regulators were informed that the site was in the care of the federal government’s Contaminated Sites Program.

But AANDC officials agree with the NIRB  Jericho is still Shear’s project, at least on paper.

“Shear Diamonds continues to be responsible for maintaining compliance with the terms and conditions of all authorizations and permits issued for the site,” says Allison Fleischer at AANDC’s Nunavut office, in an email. “We… will continue to inspect and take mitigation steps at the site as necessary going forward.”  

Security deposits still at issue

Also at issue is the security deposit held by AANDC and the Kitikmeot Inuit Association, on behalf of Shear Diamonds.

KIA is responsible for security for the portion of the Jericho site on Inuit Owned Land, and AANDC is responsible for the rest.

AANDC says it currently holds more than $6.6-million dollars in cash-equivalent, and $1.7 million in debentured security. But in April of this year, AANDC admitted that Shear Diamonds was $2 million short on its security deposit.

The NIRB wants to know whether AANDC or KIA have spent any of the security deposit. AANDC has not responded to CBC’s queries.

Geoffrey Clark, KIA’s Director of Land, Environment and Resources, says KIA hasn’t spent anything.

“KIA hasn’t engaged in any kind of reclamation activity at the site, so we would not have used any funds,” says Clark. “From KIA’s understanding, Shear Diamonds Corporation is in charge of the Jericho diamond mine. We’ve seen no legal information to suggest there’s been any transfer of that authority.”

When Shear walked away last year, it left behind improperly stored waste and untreated fuel spills. The company also left some contractors unpaid.

CBC's emails to Shear's CRO Thomas Pladsen, and its sole director, Manuel Rappaport, have not been answered.