Victoria Gold Corp., Receivership

Victoria Gold Corp., a mining company which owns and operates the Eagle Gold Mine in Dublin Gulch, Yukon, was placed in receivership on August 14 on application by the Yukon Government.

On June 24, there was a major heap leach failure at the Eagle Gold Mine, causing approximately 2 million tons of ore material to escape the containment embankment onto the unprotected ground below. There is an extreme risk of harm to the environment as a result of a release of many harmful chemicals during and after this failure event, including cyanide.

The Yukon Government has lost confidence in the company’s management to appropriately respond to the failure event as a result of, among other things, the company’s failure to fully comply with the Yukon Government’s directions in the wake of the event and its failure to demonstrate that it has sufficient cash on hand to pay for the necessary remediation, which the Yukon Government estimates to be between $100-150 million, with approximately $40-50 million required in the next 90 days alone.

PwC is the receiver.

Counsel is Goodmans for the receiver, TGF for the Yukon Government, Bennett Jones for Victoria Gold, Fasken for the Syndicate of Secured Lenders, Stikeman Elliott for Osisko Gold Royalties, Pape Salter Teillet and Tyr for First Nation of Na-Cho Nyak Dun and Gowling WLG for Parsons, the proposed lead environmental consultant.