Mactung comes in at $2.6 milion
Final cost for deposit comes in below initial $4.5-million estimate from GNWT
April Hudson
Northern News Services
Monday, March 7, 2016
DEH CHO
The territorial government's purchase of the Mactung tungsten deposit has come in at a final cost of $2.6 million, according to Lands Minister Robert C. McLeod.
That number was revealed in the legislative assembly on Feb. 25.
The GNWT initially agreed to acquire the deposit for a maximum of $4.5 million, according to a Nov. 19 news release detailing the sale of the site. Cabinet had passed an emergency spending measure to approve the acquisiton, which happened just days before the territorial election. The reason, according to a territorial press release at the time, was because the government was "required to move at the pace of proceedings in B.C. Supreme Court." This is where North American Tungsten, the owner of the deposit and recently abandoned Cantung Mine, is going through the process of declaring bankruptcy.
"In the beginning ... when it became apparent that the Mactung property was going to be put up for sale, the assessment at the time was that it (was) going to cost approximately $4.5 million to secure that property," said Mike Aumond, deputy minister of finance and secretary to the financial management board.
Aumond said the final $2.6 million included all costs associated with the purchase of the property. The $1.9-million difference between the final and estimated costs will go back to the government.
The territorial government agreed to put up the offer for the deposit as a condition for the federal government to accept responsibility for remediation of Cantung Mine.
Cantung was abandoned in Nov. 26. The Mackenzie Valley Land and Water Board had required a $30 million surety against the mine's water licence but had accepted Mactung in lieu.
"Under the devolution agreement, the GNWT is required to make best efforts to maximize the value of the Mactung property, if Canada was going to accept (responsibility for) Cantung (mine)," he said.
According to the GNWT, Cantung did not receive any acceptable bids.
"Part of the decision-making process that was undertaken by the GNWT at the time was either to accept Cantung and all its liabilities, or to purchase Mactung," said Aumond.
Once the tungsten market rebounds, he added, the GNWT may be able to sell Mactung for more money than it paid.
During an interview with News/North on Feb. 29, Nahendeh MLA Shane Thompson credited the government for "doing its job" and "taking the heat" for its decision to purchase Mactung, a mineral rich deposit which has not yet been mined.
"I'm not a big fan of us having to pay for (Mactung), but if we didn't then the federal government would hold us accountable," he said.
"Sometimes, cabinet has to make decisions right away."
By taking over the site, Thompson said the government can ensure the NWT isn't landed with the responsibility of cleaning up tailings ponds.
"It's in our backyard. (Dehcho First Nations) had concerns with it, people in my riding have concerns with it. We don't want to have a mine at the end of the day like Giant Mine," he said, referencing a site that in 2013 had clean-up costs estimated at $903 million.
In the legislative assembly, Giant Mine was also held up as a warning for the government's involvement with Cantung Mine, which the GNWT still holds a surface lease for, despite the federal government assuming responsibility for remediating the site.
Frame Lake MLA Kevin O'Reilly reminded minister McLeod that the GNWT held the surface lease for Giant Mine, which resulted in liability due to a lack of financial security.
McLeod confirmed there is no financial security associated with the surface lease at Cantung, which was issued by the federal government before devolution happened.
"Much like Giant Mine, Canada has accepted the responsibility to remediate this site as far as the liabilities go," McLeod said.
He added he would have the Department of Lands identify some of those liabilities associated with the site.
