Alexco Resource Corp plans exporation ...
Aggressive’ exploration planned for UKHM site
By Chuck Tobin
A company run by executives familiar with the Yukon has been given the nod to purchase the assets of the bankrupt United Keno Hill Mines Ltd., it was announced Friday.
Court-appointed receiver PricewaterhouseCoopers Inc. said it has selected Alexco Resource Corp. from a list of nine bidders.
Alexco is a private company controlled by NovaGold Resources Inc., Quest Capital Corp. and ALM Group ULC. Its president is Clynton Nauman, formerly of Viceroy Mining Corp., the company that operated the Brewery Creek gold mine.
“There was a desire to see the mine brought back into production so we selected a group that has good potential to do that,” PricewaterhouseCoopers spokesman David Egan said Friday. “And they also have a lot of capability at doing reclamation work.”
Egan explained the court-approved timetable set out for the sale of the assets provides for a further 120 days from this point to finalize the agreement. There are essentially 30 days for Alexco to finalize its examination of the financial feasibility arrangements, and then three months to reach an agreement with the Yukon and federal governments regarding management of the environmental liabilities on site, he explained.
Nauman said this morning from Vancouver that Alexco plans an aggressive exploration program over the next three years to find an ore body which would justify bringing the Keno Hill district back into production.
“Obviously that is a top priority for us,” he said. “And we see every indication in Keno Hill that we should be able to define a new resource there. I think there is about three years of exploration to do, but we are going to be quite aggressive on the exploration side.”
Nauman emphasized NovaGold is among the top exploration companies in North America.
Alexco needs time to study existing exploration results and maps, and to digitize them in preparation to dovetail with a modern approach to an exploration program, he said.
As it is now, said Nauman, it does not appear that known resources are sufficient on their own to justify a restart of production.
It is the company’s intention to begin exploration drilling next year, he said.
Once a cornerstone in the Yukon’s economy, United Keno Hill closed in 1989, amid slumping silver prices. While the mine sites and water treatment systems remained under a care and maintenance program through the years, the federal government stepped in to take over management of the assets when it declared United Keno Hill Mines Ltd. had abandoned the site in January 2001.
Two notable attempts to sell the assets failed in recent years. The potential buyers said they could not reach an agreement with Ottawa because Ottawa insisted that any buyer would have to assume responsibility for all environmental liabilities associated with the property, going back more than half of a century.
In a deal brokered last year by PricewaterhouseCoopers and the federal government, Ottawa agreed to release the condition that potential buyers had to assume responsibility for all environmental liabilities. Instead, it agreed to sell the assets on the condition the bid process include a requirement for companies to indicate willingness to participate in reclamation work.
Under the proposed sale, the winning company would have to pay $410,000 to clear up outstanding liens held by Toronto firms that provided legal and accounting services provided during the bankruptcy proceedings.
All other creditors, including a number of local companies and Yukon Energy – which itself was owed $680,000 – would be out of luck, under the marketing plan submitted a year ago to the Yukon Supreme Court.
In its assessment of the value, PricewaterhouseCoopers said the estimated environmental clean-up cost of $65 million was greater than the assets of known ore resources of some $50 million.
As the licensing body responsible prior to the April 1, 2003 transfer of federal authority over mining to the Yukon government, Ottawa must cover all expenses to care for and maintain the United Keno assets – particularly the water treatment systems at $100,000 or so a month.
The PricewaterhouseCoopers spokesman said it has not yet been decided what details about the purchase will be released eventually, though it’s certain the key conditions will have to be laid out for the court for it to approve when the time comes this fall.
What Alexco brought forward for its commitment to reclamation is not something that can be released at this point, he said.
Nor is PricewaterhouseCoopers releasing the names of the other nine bidders.
Egan did say seven of the eight other bidders were from North America with one overseas expression of interest but none of the bids came from major mining companies like INCO.
Nonetheless, Egan emphasized, the quality of bids was high, with four of five companies submitting proposals aimed at restarting production.
“It was a fairly comprehensive assessment in terms of not only what they were prepared to do in terms of reclamation costs; what was there ability to develop the site in terms of reclamation and mining,” Egan said.
He said the proposals were not just extensive, but also realistic with regards to managing environmental liabilities and getting the properties back into production.
“What made the difference for Alexco, I think, was the completeness of their bid. They seem to address to everyone of the key areas very well and they had a very strong team.”
whitehorsestar.com
and gets water use license rights
REASONS FOR DECISION - APPLICATION QZ03-062
ALEXCO RESOURCES CORP.
AMENDMENT 7 TO WATER USE LICENCE QZ96-007
The Yukon Water Board (“the board”) has concluded deliberations pertaining to water use
application QZ03-062 and has agreed to issue amendment #7 to water use licence QZ96-007,
which is a type A licence for quartz mining undertaking near Dawson City, Yukon
yukonwaterboard.ca. |
