Without buyer, New Brunswick fears environmental risks of Caribou mine bankruptcy

Court documents suggest Trevali Mining Corp.'s New Brunswick subsidiary could declare bankruptcy as early as Tuesday. (Alexandre Silberman/CBC - image credit)
Court documents suggest Trevali Mining Corp.'s New Brunswick subsidiary could declare bankruptcy as early as Tuesday. (Alexandre Silberman/CBC - image credit)

Court filings show the New Brunswick government fears a "chaotic" bankruptcy this week that could pose environmental risks at the Caribou mine near Bathurst after no buyer was found.

The documents suggest Trevali Mining Corp.'s New Brunswick subsidiary could declare bankruptcy as early as Tuesday, leaving no one to secure the mine and its tailings ponds.

"A sudden bankruptcy or receivership puts a steady and planned transition at risk and could result in periods where there is no one overseeing the mines in regard to both security and environment," Cory Neumann, a geological engineer with the provincial government, said in a Jan. 3 affidavit.

Neumann said that without security, there's a risk thieves could interrupt the power supply and halt treatment of acidic water at the mine.

The province has asked the Supreme Court of British Columbia, where the company filed for creditor protection in August, to extend that protection by two weeks. A judge will consider the province's application Monday in Vancouver.

The Department of Natural Resources and Energy Development wouldn't answer questions about its request, or the province's environmental liability at the mine.

Trevali
Trevali

The documents indicate the province is working with a contractor that could secure the site, take over its maintenance, and prepare a remediation plan for the mine. But the documents say it's unclear when the contractor can deploy to the mine site.

"A sudden bankruptcy or receivership on January 10, would leave [the province] scrambling to arrange security and care and maintenance contractors in line with provincial law," Neumann's affidavit states.

The province's application says in return for two additional weeks of creditor protection, the government is willing to spend $198,000 US to rent the mine's equipment for water treatment and remediation work until the end of March.

The documents reveal the province has not recently sent anyone to check compliance with environmental rules at the mine. Instead, it has relied on Trevali staff who remain on-site for now.

The document says if the company stops fulfilling its environmental obligations, the provincial Clean Environment Act requires the government to ensure the environment is protected.

Tailings ponds nearly full

The documents say that the tailing ponds at the mine are nearly full. The mine, about 50 kilometres southwest of Bathurst, produced zinc, lead and silver.

Neumann's affidavit says a portion of the site called the Restigouche mine is an open pit that fills with water that's acidic.

The water needs to be removed from the mine and treated because of its acidity, so it doesn't overflow and contaminate the surrounding environment.

"The major issue at Caribou is the obligation in regard to water treatment and the treating and pumping of water out of the mine, which is currently being done," the affidavit states.

"Without same, the mine will flood. While it may take time for mine-impacted water to overflow, such flooding still creates a risk that was not there before."

Vancouver-based Trevali and its New Brunswick subsidiary filed for creditor protection in August. Mining was halted at Caribou, which then went into care and maintenance mode.

As of mid-August, Trevali had 121 employees at Caribou and employed 165 contractors. Court filings said 100 of the company's employees were laid off, with others remaining to continue to maintain the mine.

Last fall as part of the creditor protection process a buyer was sought for the mine.

However, no interest had been shown by mid-October.

The filings outline a scramble that saw the province proposing to provide funding to continue creditor protection instead of the bankruptcy route.

However, the documents say it learned that option was rejected just before Christmas. It then filed the application seeking more time.