Yukon’s Gold Mine Accident: Jobs At Risk

Updated Wednesday June 26, 2024

Victoria Gold‘s apparent Eagle Gold Mine heap-leach pad failure in Yukon will leave 500 direct employees of the company without jobs.

The human side of this mine accident dwarfs the investment losses thus far of Victoria Gold shareholders VCGX, and those of other Yukon miners/explorers developers, nearly all of them suffering from stock market declines this week. *

Yukon has several working hard-rock mines, a number of quartz mines and numerous mom-pop placer operations. See Yukon mines map.

I have been to Eagle three times with 14-year CEO John McConnell and his team. I was there for the second gold pour in September 2019.

Eagle’s gold ounces produced and sold to the Royal Mint of Canada were on an upswing at the nearly 5-year-old mine. Overview here please.

Trading in the shares VITFF VGCX in Toronto and the U.S. was halted Monday and resumed Tuesday. VGCX shares fell 78% to $1.40 CAD, about $1.10 USD a share, to a $68 million USD market value. Presently: 0.95 cents USD

The Victoria Gold miners were targeting 200,000 ounces a year; in 2023, the mine notched 163,000 ounces produced and sold. See statement.

Heap-leach mining is a risky prospect in any setting. Eagle, situated across steep terrain, is in Dublin Gulch some 70 or so kilometers from the town of Mayo.

Here is a straightforward summary of economic impact, lay of the land at Eagle, and the questions raised by heap-leach mining: https://www.cbc.ca/news/canada/north/yukon-eagle-gold-mine-heap-leach-failure-mayo-mayor-1.7245433

The heap leach at Eagle, like most heap leaches, uses a cyanide solution to “distill” and dissolve gold-laden ore. Victoria Gold materials indicate 1 million metric tons of ore travel through the leaching pads each month.

Miners speculate that Yukon government will lengthen environmental reviews and oversight in the wake of the accident.

“We did not need another heap leach to go valley surfing. The gold equity premium already has been crushed since the 2004 peak.” — Tim Wood, executive director, independent membership organization Denver Gold Group

A technical look at what happened at Eagle: https://eos.org/thelandslideblog/eagle-gold-mine-1.

“This is just bad for everyone in this (Yukon) jurisdiction,” Jasmine Sangria, a spokeswoman for Yukon explorer-developer Banyan Gold, told me THIS WEEK. “John (McConnell) and the Victoria team are family to us.”

Victoria Gold owns about 10% of Banyan Gold BYN BYAGF. CEO Tara Christie, a geologist, is the wife of John McConnell, who is a mining engineer.

Feedback & Context

As Western Copper WRN at Casino, a gold and copper project in Yukon, prepares its environmental submissions to government, Paul West-Sells as CEO installed “big company” engineering measures to review Casino’s tailings and heap pad facilities; and hired a geotechnical firm to design the project’s facilities.

WRN also:

— Joined MAC Engineering, which “makes us adhere to a tough set of engineering guidelines;”

— Established an Independent Engineering Review Panel (IERP) to review the heap and tailings structures during design, construction and operation.

Several miners I know, including Bill Sheriff above, said they were buying Victoria Gold shares at the sharply lower prices. See also Banyan Gold BYN activity below.

One miner and active investor said (direct quote):

“If the mine can restart in short order this stock is a buy. If the regulators delay the start that could put the company to zero because of the $200 million loan. I have placed my bet that John McConnell will get this thing running again, and in 2-3 years this stock will be back to pre-crash levels $7 CAD range.”

* Shares of Fireweed Metals FWZ and Snowline Gold SGD appear to have the most staying power among Yukon titles and against broader metals market selling this week.

Previous coverage and background:

Victoria Gold: A report of a landslide at VGCX’s Eagle Gold Mine in Yukon is confirmed. See Victoria Gold’s confirmation of what it calls “a heap leach pad incident.”

Operations at the mine “are temporarily suspended.” No one was injured.

Second-hand observations said crushers and conveyors might have been buried.

Victoria Gold confirmed there was “damage to infrastructure.” See release please.

Banyan’s AurMac gold project is some 60 kilometers from the Eagle Gold Mine. Aside from Victoria Gold’s 10 percent ownership of Banyan shares, “there is no connection to what is happening at Eagle but for the human one,” Jasmine said from Dawson City, Yukon.

We here at home own 22,000 shares of Banyan, and I purchased more this week; BYN shares fell 18% Tuesday after a 15% drop Monday.

We here at home pray for the families of all Yukon miners.

— Thom Calandra