North

Federal government has spent more than $32M on defunct northern mine since 2015

The Northwest Territories government is still in the slow process of attempting to dispose of a mining property it bought four-and-a-half years ago. The government paid $2.5 million for the Mactung exploration project after owner North American Tungsten went bankrupt.

Sale of mining property purchased by N.W.T. plodding ahead, RFP expected by end of summer

The Mactung property is located about eight kilometres northwest of MacMillan Pass, along the Yukon and N.W.T. border. (North American Tungsten)

The Northwest Territories government is still in the slow process of attempting to dispose of a mining property it bought four-and-a-half years ago.

The government paid $4.5 million for the Mactung exploration project, according to the Department of Industry, Tourism and Investment (ITI), the lead territorial agency in the effort to find a buyer. The government bought the project after owner North American Tungsten Corporation Ltd. (NATCL) went bankrupt and left taxpayers to cover most of the cost of cleaning it up.

On its website, NATCL says it would take $400 million to turn the Mactung tungsten deposit into an operating mine. The company says the mine would pay for itself in less than three years and have a life of at least 11 years.

The same bankruptcy also left taxpayers responsible for cleaning up NATCL's Cantung mine, located 160 km south of Mactung, near the N.W.T. and Yukon border. The federal government has responsibility for Cantung.

The federal and territorial governments are attempting to sell Mactung and Cantung as a package. Meanwhile, they've been paying to keep both properties in compliance with their water licences. The federal government is also covering the cost of disposing of NATCL's assets. The burdens are far from equal.

Since it purchased Mactung in 2015, the territorial government has spent just under $208,000 on the property, according to ITI. The federal government has spent $32.4 million during the same period, according to the last report of the bankruptcy monitor overseeing the disposal of NATCL's assets.

No sale until end of summer

According to that report, a short list of interested bidders has been identified through a qualifying process that closed last September.

Neither the monitor nor ITI, which is overseeing the sale on behalf of the N.W.T. government, would identify which companies, or even how many, were shortlisted. They say it will take until the end of the summer to prepare a request for proposals that will be issued to the qualified companies.

"We have, and will continue to engage interested indigenous governments and organizations in the Yukon and N.W.T. to guide our RFP [request for proposal] objectives and evaluation criteria," said ITI communications official Drew Williams in an emailed response to a request for an interview with the department.

How will the proceeds of any deal be split between the two levels of government?

"These types of details will be determined by the proposals received under the current RFP process," responded the department in another email.

Williams said any deal will require approval by the N.W.T. cabinet.

Last month the Mackenzie Valley Land and Water Board granted an extension to the land use permit Cantung is operating under for the maximum two years. It now runs until March 1, 2022.

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