Owners of B.C.'s Tulsequah Chief mine site pushed into receivership

The Tulsequah Chief mine in northwestern B.C. looks set to languish for years to come, after its owner Toronto-based Chieftain Metals Corp. collapsed under a $27 million debt.

It's the second company in less than a decade to attempt to revive the historic mine, and fail.

In August,Chieftain's primary lenderapplied to the Ontario Supreme Court to have a receiver appointed to take over the troubled company. Grant Thornton LLP was named receiver last week.

According to court documents, Chieftain tried but failed to find enough investors to develop the site.

Chieftain's departureraises questions about the possiblecleanup of the site. It's been leaching acidic dischargeinto theTakuRiver system for years.

"At this point, two companies have gone bankrupt," said Chris Zimmer of the environmental group Rivers Without Borders.

"It's not really a viable mine anymore at this point, so the question is, who's going toend up with it and what are they going todo with it?"

No water treatment on site

The base metal mine, about 100kilometressouth ofAtlin, B.C.,originally operated from 1951 to 1957.It hadbeen idle for more than half a century when Chieftain bought the site in 2010 afterthe previous owner,RedfernResources Inc., wentintobankruptcyprotection.

Chieftain assumed liability for the site with the purchase. One of the first things the company did wasbuild and start operatinga water treatment plant to deal with leftover tailings.

Thattreatment plant operated for less than a yearbefore Chieftain decided it was too expensive.According to B.C. government documents, theplant had not been workingproperly.

Since 2012, there has been no water treatment at the site.

Anenvironmental inspection by the B.C governmentlast year found that Chieftain was not in compliance with provincial permits. Inspectors also highlighted concerns about ongoing acidic discharge into the Tulsequah River, a tributary of the Taku River.

'It certainly doesn't look good'

"We get that it's a serious situation, both for B.C. but also for our friends in Alaska," said Bill Bennett, B.C.'s minister of energy and mines.

The Taku River flows into Alaska.

"We want toget some up-to-date information on what is actually going into the water. I've been to the site myself, and it certainly doesn't look good.There's rusty-coloured water coming off a hill, into the river," he said.

Bennett said staff with his ministry will now go to the site to determine what's needed to complete an ecological risk assessment.

Zimmersaid hethinks it's time to just clean up the site, and give up any hope that a mine could reopen.

"It's a relatively small mine with a short life and it's really basically sucked up a lot of timeand energy and angstfar more than it's worth," he said.

"Ithink at this point the best thing to do is close this thing down, put it to bed, and really end what has been a black eye for B.C.,to a lot of people here in Alaska."