Yukon Zinc accused of concealing $4.4M in San Francisco bank

Yukon Zinc, operatorof the territory's now-closed Wolverine Mine, appearto have deliberately concealed $4.4 million dollars in a San Francisco bank account, according to documents presented in British ColumbiaSupreme Court June 25.

The Chinese-backed companyhas been under court orderedcreditor protection since closing theWolverine Mine, located north ofWatson Lake,in January.

Professional services networkPricewaterhouseCoopers, amonitor appointed by the court,conducted theinvestigation that revealed the concealed money,saythe $4.4 million was held in a 'suspense' account, and comes from a prepaid sale of zinc concentrates that was never completed to Shaanix Zinc, a Chinesecompany.

PricewaterhouseCoopers say"the company appears to have deliberately concealedfrom the monitorthe existence of the funds, and its efforts to return the money toShaanixZinc," according to submissions make to the court.

Senior management of Yukon Zinc directed corporate staff onApril 14notto advise the monitor,as it would "cause much trouble,"according to the court documents.

The money has since been transferred to the company's account at the Bank of Montrealin Vancouver.

Creditor protection extended again

Meanwhile, the BC Supreme Court has again extended Yukon Zinc's creditor protection untilAugust 14to allow the company to continue work on its restructuring plan.

A court order also allows the company to pay a one-time bonus of $90,000 to the 11 workers currently onsite at the Wolverine Mine.The workers are performing necessary care and maintenance and the bonus is expected to help with temporary retention of the employees.

Yukon Zinc owes more than $646 million to hundreds of creditors. Most of that debtabout $600millionis claimed by its parent company, JinDui Cheng Canada Resource Corporation Limited, which has itshead office in Vancouver.