Banks Island Gold halts Yellow Giant mine operations
Company initially ignored province’s order to stop after pollution spill, permit violations
Banks Island Gold said this week it has suspended operations at its Yellow Giant gold-silver mine in northwest B.C.
The company announced Tuesday the small underground mine 110 kilometres south of Prince Rupert will be put into “care and maintenance” mode until permitting and regulatory issues at the project are resolved and it has sufficient working capital to re-start operations.
It’s the first time the company has publicly acknowledged the mine has been shut down, as it was ordered by the B.C. government last month.
At the same time, the company released its latest financial results and issued a warning that because of the shutdown order and a stop-pollution order, resulting production delays, its capital deficiency and uncertainty of the timing of resolving permitting, it needs immediate financing.
“Inability to do so at terms acceptable to the company and in a timely manner would cast significant doubt on the company’s ability to continue as a going concern,” Banks Island Gold said in the written statement.
Banks Island Gold president Benjamin Mossman could not be reached for comment Wednesday.
For the three months ending May 31, Banks Island Gold had a loss of $1.69 million on revenues of $4.81 million.
The company’s current liabilities of loans and other money it owes far outstrip its current assets of cash and money it is owed: $11.2 million to $2.1 million.
Its stock price continued to fall, hitting three cents Wednesday, and is down more than 60 per cent since news of its shutdown order broke. The Vancouver-based company had been ordered to shut down the mine on July 15 by the B.C. Ministry of Energy and Mines over pollution releases and for running ore from exploration projects through the mine’s plant, a violation of its permit.
Initially, the company had ignored the order, saying in a July 28 statement that it was not shut down and was continuing to produce gold and silver concentrate from ore.
Last week, Mossman and its board of directors were warned by B.C. chief mines inspector Al Hoffman to obey the order. Hoffman said provincial inspectors would visit the mine early this week to ensure compliance.
B.C. Mines Ministry officials said Wednesday the site visit had not taken place yet.
The province and NDP mining critic Norm Macdonald were alerted to problems at the mine by a whistleblower who sent pictures of the pollution releases at the mine, which included the release of tailings and sedimentladen water into creeks, wetlands and forests.