Northern News Services

Yellowknife (Sep 20/02) - Junk and equipment lie in piles around the site where Ptarmigan and Tom once processed thousands of ounces of gold.

The Ptarmigan Mine headframe, a familiar landmark on the Ingraham trail, stands over a great mess of junk and equipment that litters the site. - Nathan VanderKlippe/NNSL photo

Now, five years after production was halted, the site has the air of being suddenly abandoned: doors swing open and shut in the breeze and an office wall calendar is still open to June, 1997. A refrigerator and office chairs sit empty in one of the bunkhouses.

The company that owns the mines, Elkhorn Mining Co., is virtually broke and has not renewed either its water licence, sub-surface lease or two of its surface leases.

The site, located 20-kilometres Northeast of Yellowknife on the Ingraham Trail, could also be a safety hazard. The head frame on the Ptarmigan shaft has never been capped, although its outside doors are nailed shut. At the mine site, located about 20 kilometres outside of Yellowknife, the two mine's portals are leaking water from flooded underground chambers and stretches of road are tainted with hydrocarbon pollutants.

Studies have shown that revegetation needs to be done at the site and the tailings pond may need to be capped. The Mackenzie Valley Land and Water Board has recommended geotechnical work on a dam on the tailings pond.

An estimate done in 1997 predicted clean-up costs will run to $350,000.

"You're in a situation much like Giant Mine or Colomac," said Melody McLeod, chair of the Mackenzie Valley Land and Water Board.

Making matters worse, the federal government has let $245,000 in security deposits expire.

Before 2001, Elkhorn had posted a $275,000 security deposit. The company's most recent water licence, issued in 1999 for abandonment and reclamation, required a $350,000 deposit.

Of the existing deposit, $30,000 was in Canada Savings Bonds. That money has since been used to land farm an area affected by a fuel spill.

The rest of the deposit -- $245,000 -- has disappeared. It was posted as irrevocable letters of credit, but the last of those had run out without being renewed by June, 2001.

The security money wasn't used while it was available because DIAND was still counting on Elkhorn to clean up the site, said David Milburn, manager of water resources for the federal department.

But no specific orders were made to clean up the site using those dollars, despite the fact that banks gave notice of expiry on the letters of credit and the company gave repeated warnings that it was low on cash.

"The company does not have the cash to satisfy this requirement (to complete its required security deposit)," wrote company representative Rob Trenaman to the Mackenzie Valley Land and Water Board in a letter dated April 18, 2000.

DIAND's Ron Breadmore noted in a May 30, 2000, telephone log that the company is "likely close to default."

Elkhorn was supposed to remit a plan for abandonment and reclamation of the site to the water board by Jan. 1, 2000. The plan does not exist.

Deep in debt

Elkhorn, or Treminco as the company was called while the two mines were active, lost control of the mine's assets in 2001, when the territorial sheriff's office seized all of the surface buildings -- including the headframe, bunkhouses and office space.

Both the territorial and federal governments have liens against the land. Elkhorn owes the Workers' Compensation Board $15,000 and the GNWT almost $150,000 in property taxes.

The company is in dire financial straits. It stopped mining when gold prices dropped in 1997.

Even before then, production had dropped precipitously. In its last year of production, said Trenaman, the two mines only produced 3,000 ounces of gold.

In total, Treminco mined about 75,000 ounces of gold from the Ptarmigan mine, and just over 15,000 ounces from the Tom shaft. The mines were active from the mid-80s to the mid-90s.

Once mining finished, the company was so poor that Vern Emary, the caretaker of the site from November, 1997 to April, 2000, was not paid his $500 monthly fee during his last year looking after the mine.

Emary said he talked about buying the mine for $1, and was told the offer could be seriously considered.

Elkhorn lost most of its money after it invested heavily in high-tech companies two months before the Internet bubble burst.

Who is responsible?

With the company broke and its leases quickly falling away, one important question remains: what should be done with the land?

To draft some kind of response, the federal and territorial governments have formed a joint committee to divvy up responsibilities -- and financial liability -- for cleaning up the Ptarmigan and Tom mines. The committee meets for the first time this fall.

Kevin O'Reilly, research director for the Canadian Arctic Resources Committee, said the fact that taxpayers may have to pick up the bill to clean up Ptarmigan and Tom is further evidence of a toothless federal mine site reclamation policy.

That policy, introduced this summer, does not give the land and water board any legal authority to enforce security deposits.

"Here we have another example of a mine that's basically a public liability," he said.