Some, "somewhat decent news"
Fiona Anderson, Vancouver Sun
Published: Friday, August 22, 2008
Shares in British Columbia junior mining company Yukon-Nevada Gold Corp. have plummeted since the company shut down both its gold mine and mill at Jerritt Canyon, Nev., this month. But both shutdowns are temporary, and unrelated to claims that the company has been emitting large quantities of mercury, the company says.
Shares of the Vancouver-based company traded as high as $1.80 in March, but dropped 36 per cent - from 85 cents to 54 cents - on Aug. 8, the day underground mining was suspended. The following week, the mill that processes the ore was shut down, and that added bad news caused shares to drop to a low of 12.5 cents before closing up slightly at 14 cents on Friday.
But the two events are unrelated, company spokesperson Nicole Sanches said in an interview. The mine was closed, and its 240 employees laid off, because it was not meeting expectations with respect to grade and tonnes of ore being mined.
The mine plan wasn't working, Sanches said.
"So instead of continually spending money on a plan that wasn't working, we decided to stop," she said. "The plan now is to figure out how to take out the more than 700,000 ounces of gold in a way that will make the company money."
But she acknowledge that could take months.
The mill, which had to lay off its 160 employees when a fan broke, could be in operation again by the first week in September. Without its own supply, the company will process ore for nearby mines, including Newmont Resources Mining Corp., and hopefully some new customers as well, Sanches said.
It's not the first time this year the mill has been shut. In March, Nevada's department of environmental protection issued a stop-work order after the company failed to comply with two earlier orders regarding mercury emission-control standards.
The State of Nevada implemented new emission standards in 2006, much to the relief of Idaho groups such as the Idaho Conservation League, which are downwind of the Nevada mines. The Conservation League has complained that emissions from Jerritt Canyon and other mines have caused contamination of fisheries in Idaho with toxic mercury, which can cause neurological damage, especially in pregnant women and children.
But Dante Pistone, public information officer with the Nevada department of environmental protection, said the Jerritt Canyon mill was allowed to reopen in early May when Yukon-Nevada demonstrated they "were doing some good work toward compliance."
"And we were pretty optimistic that they were going to fully comply," Pistone said.
Sanches said Yukon-Nevada has spent $22 million US on upgrading the mill, including its emission controls, in the most recent quarter.
Yukon-Nevada acquired the Jerritt Canyon mine from Queenstake Resources in June 2007. The company also has properties in B.C., Yukon and Arizona.
fionaanderson@vancouversun.com
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