Thanks for your thoughts Whateverr but before you convince everyone that VGCX management are the villians here and the Water Board the saints in all this you really should get all your facts straight. I've done extensive due diligence on this matter and am only sharing some of this so readers on this forum get the facts and can draw their own conslusions. Here's a copy of the Petition filed by VGCX lawyers with all the facts and details from a VGCX perspective.
I'll post the Mineral Resources Branch's 7 page letter to VGCX with their final decision so you and others can see that VGCX has been working closely and diligently with the Mineral Resouces Branch on this issue and seem to have no issue working with VGCX management.
S.C. No. __________
SUPREME COURT OF YUKON
Between
VICTORIA GOLD (YUKON) CORP.
Petitioner
and
YUKON WATER BOARD
Respondent
PETITION
THIS IS THE PETITION OF:
Victoria Gold (Yukon) Corp.
505 Lambert Street
Whitehorse, Yukon
Y1A 1Z8
ON NOTICE TO:
Yukon Water Board
106-419 Range Road
Whitehorse, Yukon
Y1A 3V1
Yukon Government 2134 2nd Avenue Whitehorse, Yukon Y1A 5H6
First Nation of the Nacho Nyak Dun Box 220 Mayo, Yukon Y0B 1M0
Yukon Conservation Society 302 Hawkins Street Whitehorse, Yukon Y1A 1X6
Let all persons whose interests may be affected by the order sought TAKE NOTICE that the petitioner applies to court for the relief set out in this petition.
APPEARANCE REQUIRED
IF YOU WISH TO BE NOTIFIED of any further proceedings, YOU MUST GIVE NOTICE of your intention by filing an APPEARANCE in Form 9 in this court within the time for appearance and YOU MUST ALSO DELIVER a copy of the Appearance to the petitioner’s address for delivery, which is set out in this petition.
YOU OR YOUR LAWYER may file the APPEARANCE. You may obtain an APPEARANCE form at the registry.
IF YOU FAIL to file the Appearance within the proper time for appearance, the petitioner may continue this application without further notice to you.
TIME FOR APPEARANCE
Where this Petition is served on a person in Yukon, the time for appearance by that person is 7 days from the service (not including the day of service).
Where this Petition is served on a person outside Yukon, the time for appearance by that person after service is 21 days in the case of a person residing anywhere within Canada, 28 days in the case of a person residing in the United States of America, and 42 days in the case of a person residing elsewhere.
TIME FOR RESPONSE
IF YOU WISH TO RESPOND to the Petition, you must, on or before 8 days from the end of the time for appearance provided for above,
(a) deliver to the petitioner
(i) 2 copies of a Response in Form 11, and
(ii) 2 copies of each affidavit on which you intend to rely at the hearing, and
(b) deliver to every other party of record
(i) one copy of a Response in Form 11, and
(ii) one copy of each affidavit on which you intend to rely at the hearing.
(1)
The address of the registry is:
The Law Courts
2134 Second Avenue
Whitehorse, Yukon
Y1A 5H6
Telephone: (867) 667-5937
Fax: (867) 393-6212
(2)
The petitioner’s ADDRESS FOR DELIVERY is:
Lamarche, Lang & Barrett
505 Lambert Street
Whitehorse, Yukon Territory
Y1A 1Z8
Email address: mlang@llblaw.ca
Telephone: 867.456.3309
(3)
The name and office address of the petitioner’s lawyer is:
Iris Legal
2100-1055 West Georgia Street
Vancouver, BC
V6E 3P3
Attention: Jana McLean
And:
Lamarche, Lang & Barrett
505 Lambert Street
Whitehorse, Yukon Territory
Y1A 1Z8
Attention: Meagan Lang
[remainder of page left intentionally blank]
PETITION
The Petitioner applies for an order that:
1. Victoria Gold (Yukon) Corp. (“Victoria Gold”) be granted leave to appeal the order of the Yukon Water Board (“Water Board”) dated June 17, 2022 (“Order”) ordering that it furnish security in the amount of $104,903,628 on the following grounds:
a. The Water Board erred in law by breaching procedural fairness, including by:
i. failing to provide Victoria Gold with adequate notice of the case it had to meet, including notice of the relevant issues and evidence which was before the Board;
ii. failing to disclose the information on which the Water Board relied in making its decision; and
iii. failing to provide Victoria Gold a reasonable opportunity to submit evidence, in particular regarding information requested by the Water Board.
b. The Water Board erred in law by determining the amount of security based on no evidence, irrelevant evidence, or evidence not on the record or disclosed to Victoria Gold;
c. The Water Board erred in law by failing to provide sufficient reasons, including failing to provide reasons explaining how it calculated the amount of security ordered and identifying the findings of fact and evidence on which those calculations are based; and
d. The Water Board exceeded its jurisdiction by ordering more security than permitted by s. 11(1) of the Water Regulation, OIC 2003/058.
2. The Order be stayed pending appeal.
3. Costs.
The petitioner will rely on the Waters Act, SY 2003, c. 19, the Water Regulation, OIC 2003/058, the Quartz Mining Act, SY 2003, c. 14, the Security Regulation, OIC 2007/77, and Rule 10 of the Yukon Supreme Court Rules.
The affidavit of Hugh Coyle made July 29, 2022 will be relied on at the hearing, copies of which will be served.
The facts upon which this Petition is based are as follows:
1. The facts upon which Victoria Gold relies are fully set out in the affidavit of Hugh Coyle, made July 29, 2022 (“Coyle Affidavit”). A summary of those facts is set out below:
Background
2. Victoria Gold owns and operates the Eagle Gold Mine in central Yukon. The Eagle Gold Mine has been assessed and approved under the Yukon Environmental and Socio-economic Assessment Act and holds a quartz mining licence, pursuant to the Quartz Mining Act, and a water use licence, pursuant to the Waters Act.
3. Under its quartz licence, Victoria Gold is required to furnish and maintain security with the Minister of Energy, Mines and Resources (“EMR”), to be reviewed at least once every two years. The original amount of security imposed was $6,829,529. Victoria Gold is also required to submit an updated reclamation and closure plan (“RCP”) to EMR every two years, which impacts the security estimate.
4. Under its water licence, Victoria Gold is also required to furnish and maintain security. In 2015, the Water Board issued Victoria Gold’s water licence, requiring security of $9,263,000, inclusive of any amount secured under the Quartz Mining Act. Victoria Gold is also required to submit an updated RCP under the terms of its water licence.
2018 RCP and Security Decisions
5. In June 2018, Victoria Gold submitted its 2018 RCP to the Water Board with a security estimate of $21,565,135. In October 2018, Victoria Gold submitted an updated RCP (with security estimate) to both regulators.
6. In June 2019, the Yukon Government – Mineral Resources Branch (“YG-MRB”) approved the 2018 RCP. An interim security amount using Victoria Gold’s estimate was also determined at that time by YG-MRB.
7. In December 2019, YG-MRB required posting of security in the amount of $27,406,539. YG-MRB reached its security decision in relation to the 2018 RCP based on two rounds of review of the security estimate with Victoria Gold whereby YG-MRB provided their initial third-party assessment, Victoria Gold responded, YG-MRB’s expert replied, and ultimately Victoria Gold responded with an estimate of $27,406,539 — which YG-MRB accepted and ordered.
8. In November 2019, the Water Board advised Victoria Gold that it had begun its review of the 2018 RCP and the associated security estimate. The Water Board initiated a process for the review of the 2018 RCP which included
information requests from the Water Board, an opportunity for intervenor comments, and responses from Victoria Gold.
9. In December 2019, Victoria Gold responded to the Water Board’s information requests and submitted an updated security estimate, which increased security to $24,358,892. As part of its submission, Victoria Gold provided detailed worksheets in Excel format for the Water Board’s consideration.
10. In January 2020, YG-MRB wrote to the Water Board, encouraging it to defer its security determination until October 2020, when Victoria Gold would be submitting an updated RCP under both its quartz and water licences. In that letter, YG-MRB indicated that it suggested such a deferral because:
a. YG had sufficient security to address liability in the near-term; and
b. the deferral of the security review would provide an opportunity for YG and the Water Board to coordinate a timely review of the RCP in October 2020.
11. Nonetheless, in August 2020, the Water Board ordered that Victoria Gold post security of $30,780,939 based on its review of the 2018 RCP.
12. Days after the Water Board’s order and decision were issued, Hugh Coyle, Vice President – Environment of Victoria Gold, contacted the Water Board Secretariat to request an Excel version of its summary of 2-year peak liability costs, which would have provided Victoria Gold with the inputs and calculations used to obtain the security amount, and to therefore understand how the Water Board made its decision. Mr. Coyle was told that the Water Board does not “normally share the worksheets” but that its Secretariat would look into it. Mr. Coyle did not receive a further response.
2020 RCP – Pilot Project
13. In October 2020, Victoria Gold submitted its 2020 RCP to the Water Board and YG-MRB, including updated financial security calculations in detailed tables. Victoria Gold’s updated 2-year peak liability closure cost estimate was $29,329,429.
14. In December 2020, YG-MRB and the Water Board agreed to a pilot project framework to coordinate their reviews of the 2020 RCP and their security determinations.
15. In January 2021, the Water Board informed Victoria Gold of the pilot project framework that would involve the Water Board and YG-MRB conducting a coordinated agency review of the 2020 RCP, including the following process:
a. comments from parties on the 2020 RCP;
b. receipt of interventions/public comments;
c. an opportunity for Victoria Gold to respond to the interventions/ public comments; and
d. the Water Board’s determination of whether or not to approve the 2020 RCP and associated security estimate, with associated orders.
Review of 2020 RCP and Security Estimate
16. In April 2021, the Water Board and YG-MRB provided information requests to Victoria Gold. On August 2, 2021, the Water Board and YG-MRB requested a response to their information requests by August 30, 2021.
17. On August 30 and November 5, 2021, Victoria Gold provided responses to the information requests, including an updated estimate of closure costs with a 2-year peak liability estimate of $54,850,451.
18. By letter dated December 7, 2021, the Water Board and YG-MRB asked to meet with Victoria Gold on two specific dates (December 22, 2021 or January 4, 2022) to discuss the security issue, although no specific details were provided.
19. Mr. Coyle advised the Water Board Secretariat and YG-MRB on December 10, 2022 that he needed to know the scope of their questions in order to prepare and be in a position to speak to a date for the meeting.
20. On December 17, 2021, the Water Board and YG-MRB issued a further letter to Victoria Gold, identifying for the first time the topics they proposed to discuss with Victoria Gold. The topics identified by the Water Board required the input of Victoria Gold’s external experts, its internal operational team, or both, which could not be gathered in the time afforded to the company by the regulators. The Christmas holiday period made it difficult for Victoria Gold to access the resources (internal and external experts) necessary to respond on the timelines imposed by the Water Board. On December 30, 2021, Mr. Coyle emailed YG-MRB staff and the Water Board Secretariat, indicating that Victoria Gold was unable to meet on such short notice, but that it would continue its due diligence on the discussion points with its staff and consultants and that it expected to be able to give its view by the end of January on the needed timeline to adequately respond. Mr. Coyle also asked the regulators to inform him if the additional information Victoria Gold developed during this time would be of assistance in their review.
21. The Water Board had not previously conducted itself in a manner that led Victoria Gold to believe it considered the security issue urgent. To the
contrary, the process had been unfolding over a number of years and Mr. Coyle thought it was reasonable to request time to prepare and consult Victoria Gold’s experts.
22. However, in response, on January 17, 2022, the Water Board wrote to Victoria Gold and confirmed that, since Victoria Gold could not meet on the two proposed dates, the Water Board was “moving forward with the information we currently have.” The Water Board did not further engage directly with Victoria Gold on the question of security, and Mr. Coyle understood from the Water Board’s January 17 letter that it would not accept the requested information at a later date.
23. Between February and March 2022, the Water Board provided the public with an opportunity to comment and Victoria Gold to respond to those comments. Victoria Gold’s responses included a revised estimate of 2-year peak liability of $60,713,751.
24. In the course of this process, the Water Board engaged an external expert, Cord Hamilton, who developed a separate security cost model for their internal use. Victoria Gold was never provided a copy of any cost model developed by the Water Board or its consultants, despite requesting that copies be provided.
Water Board Decision on Security
25. On June 17, 2022, the Water Board released its order and decision, in which it declined to approve the 2020 RCP and ordered provision of security of $104,903,628, inclusive of any security required under the Quartz Mining Act.
26. Again, Mr. Coyle subsequently asked the Water Board Secretariat to produce a copy of its internal worksheet so that Victoria Gold could better understand its analysis. The Water Board indicated it would consider this request and respond by June 27, 2022 but to date has not provided the requested information. The Water Board has also not shared its worksheet calculations with YG-MRB, despite a request that it do so.
27. In some cases, the Water Board’s decision is not based on evidence put before the Board. In other cases, the Water Board appears to take issue with evidence that has been unchanged for eight years, through two licence hearings, a technical pre-hearing conference, and multiple reviews of the site’s RCP. In multiple instances, the Water Board has taken issue with matters without having raised them with Victoria Gold in advance. Matters previously raised by the Water Board and YG-MRB in their December 17, 2021 letter resulted in significant security increases, despite Victoria Gold not having had an opportunity to provide further evidence on those topics, as the regulators had first proposed. There are multiple instances of
security increases, each of over one million dollars, that suffer from these deficiencies, as further set out in the Coyle Affidavit.
28.In addition, without access to the Water Board’s worksheets and any other information or evidence relied on by the Board but not disclosed to Victoria Gold, Victoria Gold cannot understand all of the Water Board’s reasons for increasing security by such a significant degree and cannot reconcile all of the increases with Victoria Gold’s own security estimate and the evidence put before the Water Board.
29.Similarly, the Water Board provided three reasons for not approving the 2020 RCP, all three of which Victoria Gold could have remedied with minor updates had it been given notice of the Water Board’s concerns during the regulatory process.
YG-MRB Decision on Security
30.On June 27, 2022, YG-MRB issued its decision on the issue of security, requiring the company to post $68,662,300. This contrasts with the Water Board’s conclusion, from the same joint process, that $104,903,628 was appropriate security. Victoria Gold estimates that the cost of maintaining the additional security imposed by the Water Board is $400,000 to $500,000 annually, at a total cost of approximately $1.2 million.
31.In advance of issuing its decision, and by contrast with the Water Board, YG-MRB provided Victoria Gold with a memorandum by YG-MRB’s external expert Grit Engineering dated February 24, 2022 and a draft of its security decision (including an Excel spreadsheet that included line items and calculations) and afforded Victoria Gold an opportunity to comment, which resulted in some adjustments to the security imposed by YG-MRB.
The petitioner estimates that the application will take 1 day.
Dated: July 29, 2022 __________________________
Jana McLean, Lawyer for the Petitioner
NOTICE OF CASE MANAGEMENT CONFERENCE
TAKE NOTICE that this matter is exempt from the requirement to hold a case management conference pursuant to Practice Direction Civil-10 because the Petitioner is represented by a lawyer.
Dated: July 29, 2022 __________________________
Jana McLean, Lawyer for the Petitioner