Richard Gleeson
Northern News Services

Yellowknife (Dec 01/99) - City council has approved a proposal to keep Giant mine operating for at least another two years, but critical questions remain.

The two sweetest parts of the deal for most city councillors was that it provides for payment of property taxes by prospective mine purchaser Miramar and that it also provides the city with waterfront property at Giant.

"To me it's a question of balance," said Coun. Dave McCann. "The potential benefits of this outweigh the potential risks."

Risks involved

The risks were the focus of Monday night's debate of a proposal that would see the city pay Miramar $410,000 for its interest on a 29.4- hectare (73.4 acres) piece of land within the Giant mine lease.

Most councillors saw the land as an investment in Yellowknife's future, as a way of relieving pressure in Old Town by boaters wanting access to Great Slave Lake.

But Coun. Kevin O'Reilly said before spending taxpayers' money, council should spend more time determining exactly what it is they are buying.

"This is like buying a car or a truck without looking under the hood, and I'm appalled that council would proceed with this without doing more work," O'Reilly said.

A staff report on the agreement in principle said the federal and territorial government will "release the City of Yellowknife from any environmental liability relating to the existing state of the land..."

But O'Reilly said that does not protect the city from lawsuits from others using the land. He added the city does not know if the land is habitable. While there is a commitment from the federal and territorial governments to clean up the land, there is no proposed schedule or deadline.

To underline his point, O'Reilly provided results of tests Royal Oak did for the water board in 1995.

Surface testing revealed arsenic levels of 3,240 parts per million (ppm) and 2,000 ppm near the yacht club and the townsite respectively.

Both are within the parcel the city is considering leasing for 60 years, with the idea of developing it, or having it developed by a private company, as a waterfront park or marina.

Samples taken from 0.2 metres below the surface showed levels of 3,580 ppm at the yacht club and 3,300 ppm at the townsite.

O'Reilly said the accepted Canadian standard for arsenic content in soil is 12 ppm or less.

Council went in camera for half an hour during the meeting to discuss a legal opinion it had obtained concerning liability for any harm caused by arsenic contamination at the site.

Following the discussion, Coun. Bob Brooks proposed the city make the agreement conditional on the federal and territorial government providing security against any legal action against the city as a result of the contamination.

"During the discussion, I went back to (federal and territorial negotiators) and was told they didn't have the authority to provide indemnification," said Lovell.

Reasoning there are a few other 'outs' provided in the wording of the agreement in principle, council defeated Brooks' motion and, with O'Reilly casting the lone vote against, voted to accept the agreement in principal.

The three levels of government are sharing in the incentive package being offered to Miramar to continue operating the mine for at least the next two years.

Exploration incentives

The $410,000 price tag attached to the land the city is purchasing is not an arbitrary figure.

Dave Nutter of the Department of Indian Affairs and Northern Development said under the terms of Miramar's proposed takeover of the mine, the territorial and federal government are each contributing $410,000 in exploration funding for Miramar to spend in the Yellowknife area. The contributions are being offered on the condition that Miramar spend at least $410,000 of its own cash toward exploring the Yellowknife gold belt over the two years.