Bidder in talks to buy Yukon's abandoned Minto mine but sale not guaranteed yet, report says
A potential buyer has stepped up for the Yukon's abandoned Minto mine, but a sale is still far from guaranteed.
In a recent report, receiver PricewaterhouseCoopers (PwC), which has been managing the affairs of the now-defunct Minto Metals Corp., says its sales and investment solicitation process for the mine attracted several bids, but only one was deemed potentially viable.
The firm is now negotiating a term sheet — essentially, a non-binding agreement laying out the conditions of sale — with the unnamed bidder. Once that's put together, the parties will likely then need to enter "advanced discussions" with "relevant stakeholders" before signing a definitive sale agreement.
The earliest a sale could be put before the Yukon Supreme Court for approval, according to the report, would be April.
The report also says PwC is looking at alternatives in case the sale doesn't go through, including liquidating all of Minto's assets in May.
The report attributes the delicate nature of the potential sale, as well as the fact that only one bid made it through the initial screening process, to a number of "complexities" associated with the property, located near Pelly Crossing and abandoned by Minto Metals last May.
Those complexities include uncertainty around reclamation costs for the property — the Yukon government has already started some reclamation and closure activities on-site — and the need for a buyer to prove that it can build a good relationship with Selkirk First Nation, on whose settlement land the mine sits.
The report also notes that it would likely take one to two years of additional work before the Minto mine can be restarted and "achieve commercial viability."
Company says it paid $12M+ for concentrate that didn't exist
Besides the sale, the report touches on another newly-discovered issue — Minto Metals apparently hadn't properly calibrated and maintained its scale at the mine site, and hadn't properly kept track of its copper concentrate stockpile since late 2021.
The problem was discovered by one of Minto's numerous creditors, Sumitomo Canada Limited. Sumitomo had paid Minto Metals nearly $54 million for about 11,000 dry metric tonnes of copper concentrate before Minto abandoned the mine and, early in the receivership process, also purchased an additional $2-million-worth of concentrate from the site.
Sumitomo started moving concentrate from the site to the port in Stewart, B.C., in July 2023, with the product ultimately destined for Japan. However, the report says that during that process, "it became evident that the actual volume of concentrate on site was significantly less than the amounts purchased by Sumitomo," with the company estimating an approximately 2,500-tonne shortfall worth more than $12 million.
Sumitomo is now pursuing an insurance claim for the missing amount.
In the meantime, the receiver's report says, PwC has also taken care of other matters including helping more than 220 ex-Minto employees submit their claims for outstanding wages to Service Canada. It's also worked with the Yukon government to "develop plans for the removal of chemicals and other hazardous materials" from the Minto site "to comply with certain occupational health and safety regulations."
All that work has come with a price tag — the report says PwC has spent nearly $1 million since July 2023 when it was first appointed as the receiver in the case, with a significant portion of funds going toward receiver's fees but also for things such as insurance, legal counsel, renewal of a land access permit, and a third-party appraisal of the site's buildings, infrastructure and equipment.
The firm, as of Jan. 26, was only holding $46,393 in its trust account.
