New Brunswick takes control of Caribou mine as owner goes into receivership

The New Brunswick government has assumed responsibility for the Caribou zinc mine and two other associated mines near Bathurst after the financial collapse of Trevali Mining Corp.

Trevali filed for creditor protection in August. Its New Brunswick division, which owns the Caribou, Restigouche and Halfmile mine sites, went into receivership Wednesday morning.

A report filed in British Columbia court Wednesday says the court-appointed monitor overseeing the creditor protection process for Trevali is exploring assigning Trevali N.B. into bankruptcy.

Receivership resulted in the termination of the company's remaining employees who had been overseeing care and maintaining the Caribou site since Trevali halted mining last summer.

"Although the mine sites are not operational at this time, all environmental rules and regulations continue to apply and some activities must continue," Nick Brown, a spokesperson for the Department of Natural Resources and Energy Development, said in an emailed statement.

"Private contractors will be hired to maintain essential site operations with the majority of their work being water treatment and ongoing monitoring."

Chaleur Shotcrete Inc. and Stantec are the primary contractors, the province said Thursday.

Brown said ongoing water treatment is required at the Caribou and Restigouche mine sites because water that contacts rock at the locations becomes acidic, something that poses environmental risks if untreated.

Earlier this month, the department's deputy minister told MLAs that the department roughly estimated water treatment would cost the province about $1 million annually unless a buyer can be found for the mine.

While the province hopes another company will take over the site, there was no interest last fall when a buyer was sought.

Brown said the province would be "happy to meet with interested parties and facilitate discussions" to take over the mine.

The receivership process is when a company's assets are liquidated to help pay its secured creditors.

In the case of Trevali N.B., receivership does not include the mine property, mineral claims, mining leases, or property leases owned or held by the company.

Earlier this year, the province agreed to rent Trevali N.B. equipment at the mine site until mid-March.

Court filings indicate it was preparing an initial reclamation plan for the mine site, a process that would see the site cleaned up and infrastructure removed.

While Trevali had provided the government millions in cash and bonds to be used for cleanup after the end of mining, it only was supposed to cover one third of the total cost.

That's because in 2013, shortly after Trevali bought the mine, it reached an agreement with the province for the New Brunswick government to cover two-thirds of the cleanup costs. The agreement was heralded by then-energy and mines minister Craig Leonard who said it would bring jobs to the Bathurst region.

Deputy minister Tom MacFarlane told MLAs earlier this month that the province's two-thirds share was an estimated $42 million.

On Tuesday, New Brunswick sent a letter to Trevali N.B. warning no modification, abandonment, or demolition activities can take place at the mine without authorization of the Department of Environment and Local Government.