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Victoria Gold Shares Drop After Landslide at Eagle Mine
Jun. 26, 2024 09:25AM PST
The collapse of the heap leach pad at Victoria Gold's Eagle mine in Yukon has raised environmental and regulatory concerns, as well as questions about the future of mining in the region.
A. Michael Brown / Shutterstock
Victoria Gold (TSXV:VGCX,OTC Pink:VITFF) is facing scrutiny after the collapse of its Eagle mine's heap leach pad.
The failure, which occurred on Monday (June 24), has led to the indefinite suspension of operations at the gold-producing asset, which is located in Canada's Yukon and employs up to 500 workers during peak production periods.
Victoria Gold reported that the heap leach pad, which is used to extract gold from ore using a cyanide solution, experienced a failure resulting in infrastructure damage and a material slide beyond containment measures.
No injuries were reported among site personnel at Eagle.
Victoria Gold is investigating the cause of the incident and is working closely with regulatory authorities to mitigate any environmental impact, focusing on securing the affected area and preventing further damage.
Heap leach pad collapse raises questions about Yukon mining
The heap leach pad failure at Eagle has elicited concerns from the community and local government, and questions have been raised about how the incident could impact the future of mining within the territory.
"'Catastrophic' would probably be, from what I'm hearing, would probably be a good way to describe it," said Mayor Trevor Ellis of Mayo, Yukon, in an interview with CBC on Tuesday (June 25).
Environmental concerns regarding the heap leaching process, which involves percolating a cyanide solution through ore to extract gold, have also come to the fore in the wake of this week's accident. If containment measures fail, such chemicals can potentially impact water sources and ecosystems in the vicinity.
As it stands, the future of the Eagle mine, which is a cornerstone of Yukon's mining industry, is up in the air.
Ellis, who was involved in initial planning discussions for the property's development, expressed concerns that a prolonged shutdown could jeopardize the mine's long-term viability.
Politicians have also weighed in on the issue, with Yukon NDP leader Kate White calling it an "appalling and deeply concerning." White, who is the NDP's mines critic, pointed to previous mining projects in Yukon that have faced environmental challenges after operations ceased, cautioning against repeating history with the Eagle mine.
The Yukon government, meanwhile, faces mounting pressure to ensure robust regulatory oversight and environmental protection measures in the aftermath of the incident. The heap leach pad failure has reignited debates over the sustainability and safety of mining practices in the region, exemplified by the abandoned Faro, Wolverine and Minto mines — all of which are currently under government receivership.
Financially, the impact has been substantial for Victoria Gold, with the company's share price plummeting approximately 80 percent in the days following the accident at Eagle.
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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
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