Yukon Zinc pleads guilty to late security payments, gets 'lenient' sentence

Yukon Zinc said its outstanding security payments for the Wolverine Mine were paid off last month by its parent company. Yukon Zinc was fined $10,000 for missing earlier deadlines.

Troubled company owed Yukon government $2.8M for eventual Wolverine Mine clean up

Yukon Zinc's Wolverine Mine near Watson Lake was shut down in January. The company is now restructuring and hopes to eventually re-open the mine. (CBC)

Yukon Zinc has received a 'lenient' sentence from a territorial court, after its parent company agreed to pay nearly $3 million owed to the territorial government.  

The company's previous failures to pay securities had led to two charges under the Quartz Mining Act. 

Yukon Zinc appeared in territorial court Nov. 3 to plead guilty to two charges related to a failure to pay the Yukon government. 

In a joint statement of agreed facts, Yukon Zinc and the Crown said the company's debt was settled Oct 2 by its Vancouver-based parent company, JinDui Cheng Canada Resource Corporation Limited (JDC Canada). 

That company was described in court as a middle-point between Yukon Zinc and an even larger state-owned Chinese mining company which "wholly owns" the mining operation.

In court today, the repayment of securities was considered a mitigating factor in sentencing.   

Company pleads guilty to two charges

Yukon Zinc pleaded guilty to two charges related to failure to pay the Yukon government on time. However a joint statement from the company and crown prosecutors said there was "no criminal intent" in missing the payments. 

"At the end of the day, no harm was suffered by the Yukon government. The security was paid," Yukon Zinc lawyer Kevin O'Callaghan told the court.

"The system works in getting these payments paid, eventually." 

Crown lawyer Peter Sandiford said Yukon Zinc's actions did deserve a fine.

However he said there were "no profits realized from avoiding compliance" and said the Crown was satisfied that Yukon Zinc had done its best to keep the Yukon government informed of its financial status during the mine's closure.  

Sandiford said the payment from JDC meant "the crown's responsibility is fulfilled, and the public is not exposed to risk" for paying for a cleanup. 

Minimum possible fine

Justice Gary Burgess agreed with the joint statement, saying Yukon Zinc was "fortunate no harm was done to the environment" at the site, which would have required immediate finances to address. 

Burgess agreed there was "no criminal intent" on the company's part and offered the minimum possible fine — $10,000 for two charges combined with surcharges waived. 

The Justice agreed in calling the sentence "lenient."

Burgess added in his sentencing: "At the end of the day, the amount was paid."

The maximum fine under the Act would have been $200,000. 

Yukon Zinc shut down its Wolverine Mine, near Watson Lake, in January and later entered creditor protection. A restructuring plan was accepted by its creditors in September.


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