Minto Metals hasn't paid mining royalties in two years, says Yukon gov't

The Yukon government says Minto Metals, which abruptly abandoned its mine near Pelly Crossing, Yukon,in May, hasn't paid mining royalties in two years.

That would be a direct breach of Yukon mining legislation. Under the territory's Quartz Mining Act, any mine that falls within the Act's jurisdiction like Minto's former copper mine must pay an annual royalty on profits that exceed $10,000. The percentage depends on the profit, but starts at three per cent.

Minto Metals has failed to make these payments, according to a statement of claim filed to the Yukon Supreme Court by the Department of Energy, Mines and Resources (EMR) last week. The government claims the mine owes close to $2.5 million in unpaid royalties from 2021 and 2022.

The company still has until October to pay royalties for 2022 without penalty, the statement says, but the unpaid 2021 royalty has already accumulated nearly $200,000 in late penalties and interest.

In an email to CBCNews, Minto Metals president and CEO Chris Stewart said the company cannot comment at this time as it has yet to receive the government's statement of claim. The company hasn't responded to other requests to comment on its future plans or why it left the mine in the first place.

What happens when royalties go unpaid?

When mines fail to pay royalties, Yukon mining legislation offers a number of courses to ensure they're paid.

The minister of EMR can sue to recover the royalties and any additional money owed.

The department filed a claim with the court, asking for an order that Mintopay the outstanding royalties and cover the cost of legal action. The claim before the court says Minto still has thousands of tonnes of ore and minerals in storage that are subject to a lien. EMR is asking the court to order the sale of that material to help pay the outstanding balance.

The department also wants the courtto find Minto's directors liable for any remaining debt, should the company be unable to cover the royalties it owes. That shift in liability is outlined under the Quartz Mining Act.

But in an email to CBC News on Tuesday, EMR spokesperson John Thompson said the B.C. Supreme Court appointed a receiver over some of Minto's assets last week. That automatically haltsother legal proceedings.

"Yukon's claims against Minto and its directors will therefore have to be dealt with in the receivership proceedings, rather than in the Yukon action," Thompson wrote.

Minto's entire board of directors resigned shortly after the company announced it was ending operations at the copper mine on May 13. But the legislation suggests they could still be on the hook, since they were on the board when the royalties were due.

Yukon government oneof several saying Minto owes money

Since the mine closed, several parties have claimed Minto still owes them money.

Four such statements of claim, aside from the territorial government's, have been filed to the Yukon Supreme Court. Three are from contractors saying Minto hasn't paid them for services rendered. One company claims they have unpaid invoices going back to September. If those three claims are verified, Minto would owe over $7 million between them.

The Yukon Workers Safety and Compensation Board has another claim, saying Minto owes it about $600,000 for unpaid workers' compensation insurance premiums.

Employees who lost their jobs at the mine have also complained that Minto left them high and dry. Multiple former workers have told CBCNews previously that Minto isn't able to pay them severance, but they've also been unable to apply for the federal Wage Earner Protection Program since Minto hadn't applied for bankruptcy or gone into receivership at that time.

On top of all that,Minto could owe more royalties. A Yukon government official suggested the company might owe Selkirk First Nation over a million dollars in royalties. Minto pays royalties to the First Nation because the copper mine is on Class A settlement land. Selkirk First Nation has thus far declined to comment on the status of the mining royalties.