Engineering firm alleges Yukon's Minto Mine owes $1M, asks court to order receivership, sale of property

An engineering firm is asking for the company that owns the Minto Mine in central Yukon to be put into receivership, alleging it hasn't paid for more than $1 million of water-treatment-related work.

Linkan Engineering Canada ULC filed a petition against Minto Metals Corp. to the Yukon Supreme Court on Dec. 2. 

The petition is seeking, among other things, declarations from the court that Minto owes $1,040,520.19 to Linkan including interest as of Sept. 30, that Linkan has a valid miner's lien against Minto's assets including mining claims and all "minerals, ores and concentrates" produced at the mine since Nov. 1, 2021, and that Linkan has priority over other creditors. 

The petition also asks for court orders appointing a receiver or receiver manager — essentially, a third party that takes over management of a company's finances, assets and operations to pay off debts — for Minto, and putting the mine, land and equipment up for sale. 

Minto has not yet filed a reply. Responding to a request for comment from CBC News, Minto president and CEO Chris Stewart wrote in an email that he couldn't "really comment on particulars" as the matter is before the court. 

"I can tell you that we dispute Linkan's claim and will vigorously defend our position in court," Stewart wrote. "There is a lot more facts relevant to this disagreement than Linkan has put forth in their lien filing and this will all come out in due course."

Linkan's petition lists 14 other companies as respondents, all of which also have a financial stake in Minto. 

The Yukon government, meanwhile, has put itself forward as an interested third party in the proceedings, though Department of Energy, Mines and Resources spokesperson John Thompson, in an email, declined to comment on the matter.

17 outstanding invoices, Linkan alleges

According to the petition, Linkan and Minto entered agreements in November and December of last year that saw Linkan provide services including on-site water quality testing and the construction and operation of a water storage pond and other engineering support at the mine site. 

Linkan alleges it sent monthly invoices to Minto for the work, but that as of Oct. 3, 17 invoices were outstanding, amounting to $1,016,822.89 including GST for work, services and materials plus $23,697.30 in interest.

"To date, Minto has refused or neglected to pay the amounts claimed herein which have been invoiced by Linkan pursuant to the provisions of the Contract," the petition claims. 

Linkan wants to be paid the alleged outstanding amount, plus 1.5 per cent in monthly interest.

The company, in October, also registered a claim of lien in the Whitehorse mining recorder's office.

The Minto Mine has been in production since 2019, after about a year in care-and-maintenance mode during which it was sold by the Capstone Mining Corporation to Pembridge Resources. Minto Metals Corp. emerged as its own entity following a series of mergers and deals, with Pembridge, according to its website, holding an 11.2 per cent "economic interest" in the company.

A press release from Minto in November boasted that its year-to-date revenue was 32.5 per cent higher compared to the same period last year — $120.6 million compared to $91 million — and that the mine was also producing and selling more copper. 

However, the company ran into issues earlier this year when the Yukon government in January increased the mine's financial security — the estimated cost to clean up and remediate the site should the mine shut down —  from $72 million, which Minto had already furnished, to $104 million. 

Minto wasn't able to put forward the additional cash by the April 5 deadline and was placed under restricted operating conditions related to water storage and treatment meant to reduce environmental risks on-site. 

The Yukon government lowered the financial security figure to $93.2 million in August after Minto completed some remediation work at the mine. The company also made two $1-million payments toward its security in 2022, bringing the total held by the government to $74.1 million.

Thompson, the Department of Energy, Mines and Resources spokesperson, said Minto will remain under restricted conditions until it pays the full security amount. He also wrote that the government has been working with Minto "to develop a payment plan" and that the company must provide regular progress reports to the Yukon government and Selkirk First Nation, on whose traditional territory the mine operates. 

Besides Linkan, Thompson also confirmed another company had registered a miner's lien against Minto in the past year — Brad Pattison Contracting, which is not named in Linkan's petition.