'We're not out of the woods yet': Victoria Gold CEO speaks publicly for 1st time since heap leach failure

The president and CEO of Victoria Gold says there's still a lot of work to do before the heap leach failure at the company's Eagle mine site near Mayo, Yukon, is contained but the company has no intention of leaving the site.

Speaking publiclyTuesday the first time he has done so since the heap leach pad went down on June 24 John McConnell said he believes there is no longer the potential for major environmental impacts from the failure, which is believed to have released up to 300,000 cubic metres of toxic sodium cyanide solution.

McConnell said Victoria Gold's focus is on treating water at the site, and it has hired experts to investigate the cause of the failure.

McConnell's comments come afterexpertswith the First Nation ofNa-Cho Nyk Dunand government inspection reports raised the alarm about the company's efforts to contain the solution.

Last week, the Yukon government announced it was hiring its own contractors to build a berm in the area where the heap leach pad failed. The government also said it was detecting increased cyanide in the water.

In a news release Tuesday, Victoria Gold said its own water sampling has detected "trace amounts" of cyanide in Haggart Creek.

McConnell spoke to CBC's Jackie Hong about what the company is doing and what its plan for the future of the mine site is.

This interview has been edited for clarity and length.

We've heard from some Yukon officials who said it's been frustrating that Victoria Gold hasn't spoken publicly since the heap leach failure. Why are you choosing to speak now?

Well, we've been heads down, tails up, working extremely hard, and really haven't had time.

I think we're starting to get things under control at the site and have some I wouldn't say positive news, but some good news.

So it's time to get out there and talk about it. But everybody's been working extremely hard.

And is that good news contained in that update that went out this morning or is there additional good news that you can share?

No, I think that was generally good news. We're at a place where we're starting to treat water now and things are in much better control than they were two weeks ago.

One of the things we heard at the latest technical briefing from the Yukon government was Victoria Gold didn't meet deadlines to construct a safety berm. Some earlier inspection reports had also mentioned a pit was dug for water storage but was not properly lined. Why wasn't the company able to meet those orders?

Well, let's start with the berm the deflection berm, I think they're calling it.

We have some real issues from both a safety and environmental perspective with that berm.

It's very tricky to construct it and could possibly have a negative impact on our other efforts to manage and control the water, and our treatment plan. So we did not agree with putting in that berm, but we did tell the Yukon government we would co-operate as much as we could, if they were insistent on using an independent contractor to do it.

The government has said it has hired some independent contractors, so they're going to go in and build this berm, but you don't think that's what's needed on site?

I wouldn't say it's what's needed, we just feel that there are some safety and environmental concerns at this time and that we wouldn't build it.

And then going back to the pond, I think there were some references to unlined ponds that were put in it very early on to control surface water.

We have, since the order was received, built another lined pond. I'm not sure if it's finished yet. The liner was held up because of the slide on the road south of Whitehorse.

Walk me through some of the work that's been happening on site.

We've had to convert various aspects of the plant and bring in equipment.

We brought in a couple trailers of water treatment equipment from Texas. We brought in chemicals from different spots in the U.S., and the guys have done a fantastic job of retrofitting the water treatment plant and retrofitting our ADR to use as a conditioning plant ahead of the water treatment plant. So there's been a lot of work going on.

I won't go into the chemistry of it, but the guys have also done a very good job around that and understanding what needs to be done to destruct the cyanide before it goes back into the environment.

There are concerns that not enough is being done, that cyanide has already been released into the environment. What do you make of those concerns?

It's still a concern of ours. We're not out of the woods yet. I think there's been some good positive steps, but there's still a lot of work to do and a lot of water to treat. I think we've been able to collect the majority of the water. There's no doubt that there is groundwater, which is very difficult to predict what happens to it and where it goes.

There is still uncertainty, no doubt about that. We're doing everything humanly possible to prevent this from becoming a major environmental disaster.

Does that potential still exist, do you think?

I think there's still potential for minor impacts, but no longer major impacts.

And why are you confident about that?

Ah, I'm an optimist or I wouldn't be in this business.

I think we've taken all the right steps to ensure that the impact on the environment is minimal.

Very early on, folks were asking, was the situation preventable? People have pointed to a smaller slide that happened in January in a different area. Did Victoria Gold have any concerns about the stability of the heap, leading up to this?

No. And the slough that you talk about was something like 14,000 tonnes, which is not even a half a day's production. So very, very minor. I wouldn't say things like that happen all the time, but that was a very minor slough and had nothing to do with this slough or this incident.

The Yukon government has said it's too early to actually get on the heap and try and figure out what's going on. On the company's end, do you have any indication why this happened?

It's too early.

We have just completed a seismic survey on the leach pad and that'll go a long ways to informing us on the stability of the pad currently.

We've appointed a panel of experts that will be doing an investigation. That work begins in early August and we would expect at least a preliminary report from them in four to six weeks.

Can you tell me a little bit more about these experts and this investigation that you mentioned?

Yeah, it's a panel of three people. Two of them are experienced heap leach people and one is a hydrochemist that's been involved in investigations like this in the past.

We didn't put out their names because we didn't want people like you phoning them up and bothering them. We won't identify the individuals until at least their initial report is done.

Will Victoria Gold be making that report public?

Certainly.

And withinthat same time frame?

Yeah, assuming they're on time.

The final two lines of today's update mentioned there's no assurance the company will have financial resources to repair damage, restart production. That's been unsettling for some Yukoners and I'm sure some investors. So what is Victoria Gold's financial situation right now?

Yeah, we're fine our finances for the next four to six months, but, you know, at a certain point we'll have to do a financing, but that'll come in time.

People point to other mining projects in the Yukon that have failed and they're concerned that Victoria Gold at some point is just going to step away and the Yukon government will have to step in. Does Victoria Gold intend to leave the site?

Not in the foreseeable future. I think you're referring to Minto. And, you know, I'm still here. I'm taking your calls. I'm in the community of Mayo. I'm in Whitehorse. I'm at the mine site. So it's a very different situation.

This heap leach failure obviously wasn't supposed to happen. So how can Yukoners trust that Victoria Gold is going to do the right thing and stay on top of stuff here?

Well, I think that's part of having an independent panel do an investigation, and hopefully they get to the bottom of the incident and there are fixes that we can point to that will ensure it doesn't happen in the future.

You sound confident that this will be fixed and Victoria Gold will be able to resume operations at the site.

That would be our plan. We faced a lot of obstacles getting the mine built and this is another obstacle, but we hope to work with the First Nation and the Yukon government and investors and put the mine into production at some point.

And on the note about working with First Nations, the First Nation of Na-Cho Nyk Dun has called for a moratorium on all mine activity in their traditional territory, specifically spurred by this incident. What do you make of that? And what is your relationship with the First Nation of Na-Cho Nyk Dun right now?

There's no doubt our relationship with the NND is strained right now.

However, I have met with the leadership since the incident. I spent July 1 in Mayo. We are organizing a community meeting for later in August. And so I respect their opinions and the opinions of their experts, but, you know, I think the best thing for us to do is all work together.

Na-Cho Nyk Dun chief visits site of landslide at Victoria Gold mine

3 months ago

Duration 2:30

For the first time since the Victoria Gold heap leach failure and landslide, Na-Cho Nyk Dun Chief Dawna Hope visited the site. Hope says she's frustrated with the government's response, and sad about the long-term effects on her people's traditional territory.CORRECTION: Hope says the Northern Tutchone nations tabled a letter of intent in 2020. That letter was actually tabled in 2002.

Do you feel accountable personally or generally, or responsible for what happened here?

Absolutely. I'm the CEO. The buck stops with me.

Have you offered any apology to the First Nation, for example? What does accountability look like to you?

Well, there's the time for apologies that's a little bit in the future. But I certainly, you know, I apologize to my our employees and contractors. We're in the NND's backyard. I apologize to them.

And to Yukoners in general. Forty per cent of our workforce are Yukoners, and it just kills me to lay those people off.

There's all the employees that were laid off, but also a number of contractors who say Victoria Gold hasn't been paying the bills. Some of them have filed liens or small claims. What do you say to those folks who don't have money in their pocket?

We try and keep that to a minimum and, and the best way to ensure all of those people are completely made whole is to work with the the First Nation and the Yukon government to put the mine back in production.

Na-Cho Nyk Dun has also called for an independent investigation, something the Yukon government has endorsed. Will the company be co-operating with that investigation as well?

Absolutely.

Are you worried at all at this point?

Of course I'm worried. I sleep better at night now than I did three weeks ago or two weeks ago. But, you know, as I said again at the very beginning, we're not out of the woods yet and got a lot of work to do.

We're almost in August, and snow is gonna be falling soon. Do you expect to have at least the cleanup and the fixing done before that happens?

I would like to have the thing cleaned up, but that's not totally within our hands either. I mean, we have to work with the Yukon government to set a schedule.

The first priority for us is managing the surface water on site, getting it treated and discharged so that cyanide is no longer an issue. Then we'll worry about the cleanup.

Some experts hired by the First Nation of Na-Cho Nyk Dun have told us there's simply not enough reagent on site, or that Victoria Gold can get on site to treat all this water. It's just impossible. Is that true?

No.

Victoria Gold has all the adequate resources on site now to treat all the water that needs to be treated?

That's correct. And we'll be looking at increasing the capacity to treat as well.

And how will you be doing that?

We're looking at another type of plant that could be installed, but it'll take some time to design and construct.

Will it be done by this season or is this a more forward-looking plan?

I think the best timeline would have it operational ahead of next spring's freshet.