Yukon Zinc argues for stay in receivership case as it lines up buyer
Yukon gov't lawyer says $700K for care and maintenance 'like using a Band-Aid on an open chest wound'
The Yukon government's petition to have the company that owns the mothballed Wolverine mine put into receivership is on hold while a judge decides whether to grant a stay in the case.
The government's petition was supposed to be argued in Yukon Supreme Court Thursday. But before that hearing could start, Yukon Zinc's lawyer Kibben Jackson issued an objection seeking a stay in the case.
Jackson said Yukon Zinc on Wednesday filed something called a notice of intention to file a proposal, which would grant the company creditor protection under a trustee while it tries to find a buyer. Under the Bankruptcy and Insolvency Act, he argued, that would trigger an automatic stay of the receivership proceedings.
Justice Suzanne Duncan originally said she'd have a ruling on the objection Friday. On Friday, she said she needed more time to stay the question of whether the trustee must be notified of the proceedings.
The mine is located in eastern Yukon, roughly halfway between Faro and Watson Lake. Jackson said the company has two employees on site performing care and maintenance, and has lined up $700,000 to cover the cost of that work for the next month.
'An open chest wound'
John Porter, the Yukon government's lawyer, said that figure pales in comparison to the $35 million in securities it says Yukon Zinc is responsible for. The government says more than $25 million of that remains outstanding.
"It's like putting a Band-Aid on an open chest wound," Porter said.
The government wants to have Yukon Zinc put into receivership so it can liquidate the company's assets, cover the cost of environmental protection, and eventually sell the property.
Porter said the government is acting now because water levels at the mine's tailing pond are rising. The underground section of the mine has flooded with contaminated water that is coming out of the mine portal, although none has escaped the mine site, government lawyers said.
"They [Yukon Zinc] are doing the minimum they can get away with doing so they can do it on a shoestring budget," Porter said.
Jackson said the government doesn't need receivership to enforce environmental regulations at the site.
"The Yukon government should have stood down," he said.