Another 50 Pelly Construction employees are being laid off at the Minto Mine, the mine announced this morning.

Vice-president Cindy Burnett of Capstone Mining said the company has not been able to get a full green light to carry on with the next phase of operations and begin stripping and preparing the new Minto North open-pit deposit.

While the Yukon government has indicated its approval for the company to begin stripping, the Yukon Water Board insists Capstone must first receive an amendment to its water licence or receive a new licence, she explained.

Burnett said Capstone did not want to proceed in light of the water board’s position, and the ore body in the existing open pit has now been all mined out.

“We were working with everyone involved to see if it was something we could do, just could not get there,” Burnett said. “We have chosen the most prudent course of action for the company.”

The Capstone vice-president said the company expects to have the required licences by the end of the year, which would mean going back to full operations in January with a full complement of Pelly Construction employees.

Capstone applied for a new water licence in July.

Pelly is contracted by Capstone to carry out the open pit mining operations and other heavy equipment work at the mine site.

Capstone said in its news release today it will keep 15 Pelly employees for other ongoing work requiring heavy equipment.

It also pointed out the layoffs will not affect production through 2015 because there is enough ore stockpiled and coming from the underground operations to keep the mill running.

Capstone employs approximately 180 directly.

Burnett said Capstone is still assessing whether the layoffs will affect the number of support staff needed at the mine site.

There was a layoff of 44 Pelly employees last January when production in the existing open pit was cut in half to prolong the ore body and keep Pelly working for as long as possible, hopefully until the next phase of stripping and preparing the new pit was allowed.

Burnett said the ore in the existing pit has now been depleted.

The first layoff notices were issued this morning, as there was a crew change occurring this morning, Burnett said.

Capstone applied in July for a new water licence and an amendment to its Quartz Mining Licence.

Pelly Construction vice-president Jennifer Byram said this afternoon the layoffs will be complete in the next week.

With a Pelly crew of 15 staying on, the company is assessing who will remain, she said.

Byram said it’s disappointing, but Pelly Construction and its employees knew there was an issue surrounding the required licensing.

Nonetheless, she said, Pelly only learned of Capstone’s decision this morning; that it was business as usual Tuesday.

Pelly has been assured once the licences are in place, the company will be back to work immediately with the entire 112-person workforce it was at prior to last January’s layoffs of the first 44, she said.

Byram said Pelly is not planning to remove any of its big gear from the mine site, and isn’t even thinking about it.

Capstone has been good to Pelly Construction, she emphasized.

Byram acknowledges another downside to layoffs in addition to the loss of work for employees is the risk of losing those employees to other companies.

“We know that the Yukon government and the water board have done what they could to process those (licences) fairly and without jeopardizing what those permits mean, and we were hoping a solution could happen,” she said.

The government maintains it has the sole authority under its Quartz Mining Licence to allow the Minto Mine to begin the next phase of stripping overburden from the new pit site, without the water board’s approval.

Two years ago, the Minto Mine began stripping the existing open pit with the government’s blessing, but without an amendment to its water licence.

When the water board did issue a new licence several months later in the fall of 2012, it emphasized that it was the board’s position the stripping work conducted that spring did require – but did not have – the board’s approval. The mine was in breach of its water licence when it conducted the stripping in the spring of 2012, the board said.

Burnett said this morning the board has indicated recently in writing the company needs an amendment or a new licence before it can begin the next phase of stripping.

While the water board is a government agency, the Yukon Supreme Court has ruled the board is a quasi-judicial body which operates independently under its own authority, and is not beholding to the Yukon government in any way.

Energy, Mines and Resources Minister Scott Kent released a statement at 12:30 p.m. indicating his disappointment and the disappointment of Premier Darrell Pasloski regarding the layoffs.

The government is still of the mind that the water board’s approval is not needed to begin stripping the next pit, that the work would be covered by the existing water licence and an amendment to the Quartz Mining Licence, Kent said.

He said the required amendment from his department under the mining licence is ready to go.

“Today’s announcement emphasizes the critical importance of our continuing work to harmonize mine licensing and permitting in Yukon,” said the minister. “We have made progress, but there is still important work to complete.

“Our government will continue our work with industry and the water board on the Mine Licence Improvement Initiative, aimed to better clarify roles and reduce uncertainty for companies.”