Richard Gleeson
Northern News Services

NNSL (Sep 01/99) - Giant mine is about to find a new operator, according to a report by its interim receiver.

In a report to the Ontario Supreme Court, PricewaterhouseCoopers said it anticipates a deal will be inked within the next couple of weeks.

But DIAND official David Nutter said that is too optimistic. "I would think it's going to take much of September to come to a final agreement," said Nutter.

The deal will provide for the continued operation of the mine and detail how mine reclamation responsibilities will be shared between the operator and the federal and territorial governments.

The report states the name of the winning bidder among the five who bid on Giant will remain secret -- at the request of the company -- until a deal is signed.

Asked if the company was Miramar, owner of the Con mine, Nutter said DIAND had agreed to keep the name of the company secret. Nicole Copley of Miramar's investor relations department said the company had considered Giant "an opportunity" but added she did not know if the company had formally pursued that interest and wouldn't say if she did.

Mayor Dave Lovell said whatever the company, it's good news for the city. Lovell said if a deal is struck it will keep "close to 300 good citizens who have lived here and invested in the town" in Yellowknife.

The profitability of operating the mine pales beside the money to be made on the cleanup of the arsenic stored underground at Giant.

Estimated cost of that cleanup is $250 million.

"There are literally dozens and dozens of companies out there interested in getting a piece of the action if we're looking only at the arsenic cleanup," said Nutter.

Nutter said defining the role of the unnamed company in the cleanup is part of the current negotiation.

The Treaty 11 Dogribs, earlier this year, expressed an interest in having a role in that cleanup.

According to the PricewaterhouseCoopers report, the bids came after a July 20 meeting in which the receiver and DIAND worked out an arrangement to afford prospective bidders some protection from Royal Oak's liability for the cleanup.

The terms outline the following scenario:

• DIAND and the GNWT will be granted all the assets of the mine as security for the cleanup.

• As secured creditors, DIAND and the territorial government will enter into a management agreement with a successful bidder.

• The manager would be responsible for all expenses associated with operating the mine and be responsible for all water licence obligations.

• The manager would pay a percentage of net profits (to be negotiated) to DIAND and GNWT to be applied to reclamation security.

• The manager would co-operate and assist DIAND and the GNWT in preparation of reclamation plan.

• The manager would have the right to terminate the agreement with six months notice, but would be responsible for the cost of mothballing the mine.