United Keno Hill MinesWe should have some news soon:
"SRK has been retained to prepare a NI 43-101 compliant resource (silver-lead-zinc-gold) report for the Bellekeno mine using Alexco's 2006 drilling and historical United Keno Hill Mines drilling & sampling. The report is anticipated to be completed in Q2 of this year."
Here is a good history of a United Keno Hill:
United Keno Hills Mine What was mined at United Keno Hill?
Silver, lead and zinc have been mined at Keno Hill since the early 1900s. The Keno Hill camp was considered to be Canada's second largest producer of silver. From 1914 to 1989, approximately 6.8 million kg (218 million ounces) of silver was produced from over 34 mine sites.
Where is the mine located?
The United Keno Hill property is located near the community of Keno, 85 km northeast of Mayo and 452 km north of Whitehorse, Yukon. Many old mining operations are spread over an area 26 km long by 8 km wide located on three mountains (Keno, Sourdough, and Galena Hills). The property is located within the Nacho Nyak Dun First Nation traditional territory.
When did the mine operate?
United Keno Hills MineFrom 1914 to 1989, there was near continuous mining and milling at the Keno Hill property. In 1989, the last mining operator, United Keno Hill Mines Ltd. (UKHM) closed and the property was placed under care and maintenance. An attempt to re-open the mine in 1996 was unsuccessful and UKHM became insolvent in 2000.
How is the site currently managed?
In June 2003, after two failed attempts by creditors to sell the assets, the Yukon government took over interim care and maintenance of the mine site, in the absence of an owner.
The Government of Yukon, through the Assessment and Abandoned Mines Branch of the Department of Energy, Mines and Resources is responsible for maintaining the environmental management of the site on a day to day basis. This is managed through private contractors.
In April 2004, at the request of Indian & Northern Affairs and the Yukon government, the Supreme Court of the Yukon Territory appointed PricewaterhouseCoopers Inc. (PwC) as the interim receiver for UKHM under the Bankruptcy & Insolvency Act.
PricewaterhouseCoopers Inc. as interim receiver has the power to:
* take possession and control, of mine assets to preserve and protect them;
* manage or carry on the businesses and affairs of United Keno Hill Mines Limited and UKH Minerals Limited with respect to the assets;
* apply for the issue or renewal of any leases, claims, permits, licenses, or approvals that may be required; and
* to market any or all of the assets.
Why and how was the mine sold?
When it closed, the UKHM site had ore reserves remaining in the ground and excellent potential for the discovery of more ore. To support the return of this mine site to the private sector, the federal government agreed to limit the liability of the purchaser. The existing historical liability would remain with the federal government. Without this indemnity the property would have no positive financial value to a new purchaser.
Through a court approved marketing plan, PricewaterhouseCoopers in conjunction with the governments of Yukon and Canada launched a sales process for the assets of the mine. In January 2005, PwC targeted over 400 mining companies with information packages outlining the mine assets. By mid April 2005, nine companies submitted formal proposals to purchase the mine.
United Keno Hills MineAfter an extensive evaluation process ending in July 2005, Alexco Resource Corp. (Alexco) was chosen as the preferred purchaser and entered into detailed negotiations with PwC, Yukon, and Canada to work out the details of the deal. The Supreme Court of the Yukon approved the sale of the mine to Alexco in April 2006.
The actual sale is a two phased process. Upon court approval in April 2006 known as "Initial Closing" Alexco was granted access to the site for purposes of exploration and undertaking the day to day care and maintenance under contract with the Government of Yukon. Once Alexco has obtained a water licence for the site, a process that could take up to three years, final conveyance of assets to Alexco will take place; this date is known as "Final Closing". At this point Alexco will become responsible for ensuring the site remains in compliance with the terms and conditions of the water licence.
What is the current condition of the United Keno Hill mine site?
The main environmental issue at UKHM is metal laden water coming out of old adits in a number of locations. The key element of concern is zinc, which is present at significantly higher concentrations than any other metal. The main aquatic habitats that have been impacted by the mine activities are Christal Lake, Christal Creek, Flat Creek and the South McQueston River, immediately downstream of the confluence of Christal and Flat Creeks. The majority of the contamination originates from adits of Silver King, No Cash 500, Galkeno 300, Galkeno 900, and Bellekeno mines sites, and the Elsa Mill Tailings. Active water treatment using lime is presently carried out at five locations: Galkeno 900, Galkeno 300, Bellekeno 600, Silver King and on a seasonal basis from the valley tailings ponds.
United Keno Hills MineAnother concern is the potential instability of tailings dams. The tailings dams are built on permafrost using inadequate construction methods and were classified at "marginally stable" in 1996. These dams require annual inspection and maintenance.
In 2005 all PCB containing transformers and other PCB containing electrical gear, as well as a large amount of hazardous chemicals were removed from the site for destruction at certified disposal facilities outside the territory.
There are 26 sites with safety issues including unfenced shafts, open holes due to collapse of underground workings, unlocked portal entrances, old open buildings, and adits.
What is the plan to clean up the site?
Under the sales agreement with Alexco, the company and governments will be responsible for developing a closure plan for the site. This process is expected to commence in the fall of 2006 and could take two to three years before the plan is completed.
How are Yukoners benefiting?
Fuel, electricity, propane, generators and other miscellaneous supplies, parts and equipment are purchased/leased from local companies. Alexco is utilizing local Nacho Nyak Dun First Nation citizens and other residents of the Mayo-Keno area to the extent possible for care and maintenance activities.
History of United Keno Hill
1885 Prospectors entered area looking for placer gold.
1903 First recorded discovery of silver-lead on Galena Hill.
1913 Mining commences.
1919 Silver vein discovered on Keno Hill led to staking rush in the area.
1921 Treadwell Yukon Company Ltd. began shipping hand-cobbed ore.
1924 TYC constructed 110 tonnes per day mill at town site of Werneke on Keno Hill.
1933 Wernecke Mill relocated to Elsa on Galena Hill.
1936 136 tonnes per day Elsa Mill put into operation.
1945 Conwest Exploration Company Ltd. and Frobisher Exploration Co. Ltd. acquired all former TYC interest and formed Keno Hill Mining Company Ltd..
1948 Company reorganized as United Keno Hill Mines Ltd..
1951 Elsa Mill capacity expanded to 450 tonnes per day.
1962 Falconbridge Ltd. acquired control of UKHM.
1989 Production suspended due to falling silver prices, high production costs and inability to meet production targets and mine closed.
1990 BLM Mines Inc. purchased 44.8 per cent interest in UKHM.
1991 Rosmith Investments and Stephen Powell each acquired 50% of the issued and outstanding common shares of BLM.
1996 UKHM issued a Class A water license, however production did not start.
1996 Yukon Supreme Court ordered that the mine assets and property be sold.
2000 UKHM applied for creditor protection.
2001 AMT Canada Inc. agreed to purchase the Elsa property and assets for $3.6 million and proposed to reprocess the tailings.
Feb. 2003 Terms of purchase agreement with AMT not met and court ordered AMT to be divested of its mining claims and assets at Elsa. Nevada Pacific Gold announced intention to purchase the property from a group of secured creditors subject to completion of due diligence.
May 2003 Nevada Pacific elected not to complete the purchase of the Keno Hill assets.
June 2003 Yukon government took over interim care and maintenance of the mine site in absence of an owner.
June 2004 PricewaterhouseCoopers appointed Interim Receiver.
January 2005 Mine sales process initiated.
July 2005 Alexco Resource Corp. selected as the preferred purchaser.
April 2006 Yukon courts approve sale to Alexco.
June 2006 Alexco takes over site care and maintenance under contract to Government of Yukon.