Yukon Mine Collapse and Implications

When I arrived in the Yukon there were two operating mines.

There was only one when I left.

Victoria Gold’s (TSX: VGCX)(OTC: VITFF) Eagle Gold Mine endured a rock slide and leach pad failure on June 24, two days after I visited. Thankfully, no one was hurt.

It was the only operating heap leach mine in the Yukon. Operations are now suspended and “there has been some damage to infrastructure and a portion of the failure has left containment.” We don’t know much more than that.

I learned about the event some time after breakfast while at the Yukon Mining Investment Conference on the 24th, while the stock was still trading. Word travels fast in those parts. It was then halted just after 11am PT, and when it resumed some 85% of its value had disappeared.

Five hundred people are now out of work. Early analyst estimates are citing C$75-$100 million in clean-up costs. The suits will now do the math on Victoria’s future given its debt obligations and lost inventory.

Buy Energy Stocks Now

Oil is marching higher and it’s time to buy oil and gas stocks.

Nick has new oil stock guidance in the June issue of Foundational Profits.

You can get it here.

Banyan Gold (TSX-V: BYN)(OTC: BYAGF) owns the AurMac property near the Eagle Mine. And there are several other regional development and exploration projects owned and operated by public corporations.

Yukon Mineral Exploration Development Mining Activity map.jpg

The mine failure has implications for the entire region in terms of lost trust, delayed timelines, rigorous requirements, and altered exit plans.

Will heap leach operations even be allowed in the area any more? Will they take an additional year — or two, or more — to permit? Will they cost more because of new engineering requirements? Those are questions shareholders of Western Copper & Gold (TSX: WRN)(NYSE: WRN) are likely asking. It hopes to permit the very large Casino copper-gold project with a heap leach plan. Its shares are off 7% since the rock slide.

Casino project.jpg

(View of Casino project from the air.)

And what about Banyan, who many thought would be a takeout target for Victoria, given the close relationship of its geography and executives? That is clearly no longer an option — not in any reasonable timeframe, at least.

There are many other considerations as well, including that Victoria owns a royalty on some of Banyan’s ground and holds a significant amount of Banyan shares. Will Victoria sell those shares given the new financial position in which it finds itself?

The Only Investing Advantage You Need

Getting in early is the best way to get ahead.

That’s why Nick Hodge built Hodge Family Office, an investment newsletter that looks at early-stage opportunities across all market sectors.

He’s been writing it for over a decade and has had big wins in sectors like biotech, cleantech, batteries, and 3D printing.

The model speculative portfolio is built with a goal of generating 200% to 500% returns within two to five years.

Nick's repeated success has caused thousands of investors to try and get an advantage by seeking his insights.

Here’s how you can join them.

Will Banyan have no choice but to pursue a milling scenario rather than the heap leach option that is currently on the board? If it has to mill and has no other option, does that make it a cheap acquisition target for Hecla, which operates the only other active mine in the region at Keno Hill underground?

Lots of questions remain unanswered.

Editor’s Note: What you just read was an excerpt of the weekly Hodge Family Office premium speculative investment advisory column. It has been published every Thursday for over 15 years, and chronicles how I’m viewing the markets as well as what I’m doing with my speculative capital. You can learn more here. 

Call it like you see it,

Nick Hodge

Nick Hodge
Publisher, Resource Stock Digest