The Yukon government has taken over the care and maintenance of the Ketza River Mine.

Robert Thomson of the Department of Energy, Mines and Resources said Veris Gold Corp. stopped funding the care and maintenance duties at the end of the day on April 10.

Money for the work will come from the $1.9 million remaining in the security deposit seized by the Yukon government last year for other reasons, said Thomson, the manager of mine monitoring and inspections.

Thomson said the long-term outlook for the mine site south of Ross River is now a matter to be sorted out in discussions with the federal government, which approved the project back in the 1980s.

While the site has not officially been declared abandoned, for all intents and purposes, the government is proceeding as though it has been abandoned and it’s only a matter of a short while before it is declared abandoned officially, he said.

Under the Devolution Transfer Agreement between the Yukon and Ottawa, the federal government is responsible for covering the cost of looking after abandoned mine sites originally permitted by Ottawa.

There are several in the Yukon. The Faro mine site is the most expensive. This year alone, $34.3 million has been budgeted to look after the site and move the property toward complete closure.

Thomson said he’s not sure how much it will cost to provide care and maintenance at the Ketza River site.

Recent court documents associated with the financially strapped Veris Gold estimate the monthly cost at $150,000, though Thomson expects the Yukon government will be able to do it for less than that.

Most of the crew employed by Veris Gold to care for the site has been retained by the Yukon government, he said. There is value, he added, in keeping the same staff because they know the site and the equipment.

Thomson said government officials became aware in March that Veris Gold was planning to walk away from its Ketza River asset.

Last June, Veris Gold sought and received court protection against creditors while it began a restructuring process.

In court documents filed with the B.C. Supreme Court last month, Veris Gold announced its intention to abandon the Ketza River mine because it could no longer afford to look after it while it continued to restructure its other mining interests.

The documents indicate while one party was entertaining a bid for the property, the bid never materialized, and there’s been little interest on the open market overall.

The Ketza River open pit gold project went into production in the late 1980s but has not operated as a mine since 1990.

The Devolution Transfer Agreement provided for the transfer of authority over lands and resources from the federal government to the Yukon government on April 1, 2003.

Any environmental liabilities associated with mines permitted by the federal government remains the financial responsibility of the federal government.

Any new liabilities associated with work approved by the Yukon government after the transfer of authority is the financial responsibility of the Yukon government.

Thomson said some work at the Ketza River mine was permitted by the Yukon government, though the company has already completed a significant amount of reclamation associated with that work.

The Yukon government holds a separate security bond of $800,000 against that work, and the $800,000 will be more than enough to address any outstanding reclamation requirements, he said.

Thomson said there are a couple of options set out in the Devolution Transfer Agreement when it comes to managing abandoned mine sites, though that is a matter for the Department of Justice to work out with Ottawa.

For now, the care and maintenance crew will be guided by the instructions of the mining inspector who’s overseeing the site and ensuring the arsenic treatment plant required for water treatment is maintained, along with other requirements, he said.

The Yukon government was forced to seize Veris Gold’s primary reclamation bond of $3.1 million last year to complete upgrades it felt was necessary to ensure the tailings ponds did not overflow, and to capture seepage from the ponds.

Thomson said there are currently no other requirements for capital investments at the site.

Caring for the site will essentially involve operating and maintaining the equipment that’s already in place, he said.