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A privately owned mining company headquartered in Vancouver but owned by a Chinese parent company has been forced to seek creditor protection and is now facing fines and scrutiny from the Yukon government over a zinc-copper-gold mine that was idled in December and is now slowly flooding.
Yukon Zinc Corp. – owned by Jinduicheng Molybdenum Group Co. Ltd. – operates the Wolverine underground mine in the Yukon.
At the end of January, the company announced it was placing the mine in care and maintenance, citing a commodity price crash, and earlier this month was forced to seek creditor protection. The company is now seeking court approval for an interim financing plan.
The underground mine has been slowly flooding since it shut down, according to the Yukon Department of Energy, Mines and Resources.
“There is water collecting in the underground workings,” said Sue Thomas, communications analyst for the department.
The Yukon government has expressed concerns that security payments – deposits intended to pay for the mine’s eventual remediation upon final closure – have not been fully paid. To date, the company has missed payments totalling $2.8 million, Thomas said.
On March 24, the Yukon government announced charges against the company for failing to make its security payments, which could result in a maximum fine of $100,000.
A spokesperson for the company could not be reached for comment.
The mine produces zinc, silver, copper, lead and gold. It is less than five years old, having gone into production in 2010.
Yukon Zinc was a publicly traded Vancouver-based company until 2008, when it was sold to Jinduicheng Molybdenum Group Co.
