With the stroke of a corporate pen, Australia’s St Barbara Ltd intends to shed its troubled gold mines and mine properties — including those in Nova Scotia operated by its subsidiary Atlantic Mining Nova Scotia — by handing them off to a new junior mining company it will create.
The new company will be called Phoenician Metals, and it will inherit what St Barbara calls its “non-core assets.”
These include its gold mine in Papua New Guinea and its Atlantic Mining Nova Scotia operations in Nova Scotia, including the Touquoy open pit gold mine in Moose River, three more proposed mines on the Eastern Shore, numerous properties it is already selling off, and many thousands of exploration claims.
St Barbara itself plans to merge with another Australian company, Genesis Minerals, to create Hoover House, and focus on gold mining projects in the Leonora district of western Australia.
The new junior, Phoenician Metals, will be “dedicated to extracting value” from the non-core assets, says St Barbara.
For that to happen St Barbara – or Phoenician — will have to take care of a lot of unfinished business in Nova Scotia.
The owner of the Moose River gold mine will have to abide by an agreement with Nova Scotia Environment and Climate Change (NSECC) to remove 2.65 million tonnes of waste rock it has trucked into the Touquoy pit for temporary storage.
The owner of what are now St Barbara-owned mine properties and proposals will also have to continue trying to get several approvals from provincial and federal regulators.
Those approvals have so far eluded St Barbara — and before that Atlantic Gold which the Australian company acquired in 2019 — because it has either failed to provide the information required or changed its proposals in mid-assessment.
We’ll get to those and the outstanding environmental obligations in Nova Scotia that St Barbara will bequeath to the new junior miner, Phoenician Metals.
Related: New environment minister requires further review for Atlantic Gold’s expansion plan
First a quick review of what St Barbara says it now intends to do with its gold mine and mining projects in the province.
Big shake-up in Australia, big changes in NS
The St Barbara announcement of the merger on December 12, 2022 came with a list of big changes to its Nova Scotia operations.
Related: A big shake-up at St Barbara will have big reverberations in Nova Scotia
St Barbara will “pause” the joint provincial and federal impact assessment of its proposed mine at Beaver Dam, “to provide additional time for further consultations with First Nation groups, Department of Fisheries and Ocean, and other affected community groups.” Despite years of consultation, Millbrook First Nation, has steadfastly and repeatedly said it opposes the Beaver Dam mine.
Without the Beaver Dam mine in operation, St Barbara says there will be no ore to process in Touquoy when the company finishes processing stockpiled material there. So in December 2024 the Touquoy mine will “enter a period of care and maintenance.”
However, St Barbara says it will “press ahead” with permitting for its Fifteen Mile Stream project. When it has finished processing stockpiled ore at the Touquoy mine in 2024, it will look at “repurposing” the mill there for use at the Fifteen Mile Stream mine, which it aims to start constructing in 2026.
St Barbara also says it will “advance” the proposed (and hotly contested) Cochrane Hill mine “to create an eastern production hub,” although it’s not even six months since the company allowed its impact assessment for that project to lapse.
St Barbara says the merger and the shifting of its Nova Scotia “non-core assets” is in its shareholders’ interest.
But what does all this corporate shape-shifting and changing plans mean for Nova Scotia and the company’s environmental obligations?
Nova Scotian mines
This is by no means the first time ownership of the Moose River mine project has changed hands or the plans have mutated. When the Progressive Conservative government of Nova Scotia approved the Touquoy gold mine in February 2008, it was proposed by DDV Gold, a subsidiary of the Australian company, Atlantic Gold NL.
Shortly after the province issued the industrial approval for the Touquoy in 2012, Atlantic Gold started talking about three more mines in eastern Nova Scotia, calling this the “Moose River Consolidated Project.”
The idea was to sequence the mines, so that when the Moose River pit was exhausted, mining would already have begun at Beaver Dam, and the crushed ore from there would be trucked more than 30 kilometres to Moose River for processing, to be followed by Fifteen Mile Stream from which ore would be trucked more than 50 kilometres over public roads.
Last to start would be Cochrane Hill, which would involve an overland trip of more than 140 kilometres, much of it on Highway 7, and also the re-routing of three kilometres of that important highway.
Atlantic Gold called this its “string of pearls.”
Something about this outlandish plan to turn a large part of eastern Nova Scotia, with its precious watersheds and rivers that provide crucial habitat for threatened Wild Atlantic salmon, into an extended gold mine property must have appealed to Australia’s St Barbara.
A year and a half after Atlantic Gold produced its first bar of gold at the Touquoy mine in Moose River in November 2017, St Barbara bought the company for $722 million, and rearranged the corporate deck chairs once more.
Atlantic Gold — which had had some bad publicity following the violent arrest of a senior citizen at one of its information sessions, as well as pleading guilty to a raft of environmental charges laid by the Nova Scotia government — all but disappeared from public view, replaced by Atlantic Mining Nova Scotia, another St Barbara subsidiary that officially operates the mine.
According to Frank Holmes writing for Kitco, the Atlantic Gold acquisition was undertaken on the advice of Deutsche Bank investment advisors, and it was a “value-destroying transaction.”
This probably helps explain the latest shake-up, and St Barbara’s decision to offload its “non-core assets” in Nova Scotia onto a junior mining company.
That junior will be responsible for the “care and maintenance” of Touquoy, while having no other gold mines in production in Nova Scotia until at least 2026, when the company plans to start construction on the Fifteen Mile Stream mine.
But even that schedule assumes approval will come quickly from the Impact Assessment Agency of Canada.
It’s not obvious it will.
Regulator calls out St Barbara
The list of critical comments and information requirements that the Mi’kmaq Rights Initiative, local non-governmental organizations and three federal government departments submitted to IAAC on the Fifteen Mile Stream project fills 75 pages.
In its 2021 Environmental Impact Statement, Atlantic Mining proposed a single open pit for its Fifteen Mile Stream project.
A year later, it had added three more open pits, changed the layout of access roads, stockpiles, and work areas for the proposed mine, more than doubled the length of the diversion of Seloam Brook from 800 to 1900 metres, and suggested there could be a tailings management facility added to the mine.
In a June 2022 letter to IAAC, Atlantic Mining Nova Scotia’s Sara Wallace called these changes to the Fifteen Mile Stream project “minor.”
In a December 6 letter to Atlantic Mining Nova Scotia, IAAC called Wallace out on this claim by describing the changes as “substantial.”
Just a week before the merger was announced in December, the Impact Assessment Agency of Canada informed Atlantic Mining Nova Scotia it expects the company to submit a new environmental impact statement as well as responding to other information requirements.
St Barbara spokesperson Sarah Brannen tells the Examiner the company will submit the next round of information this year. “We will provide more information to the public ahead of its submission,” she adds.
In other words, the impact assessment process for the Fifteen Mile Stream mine is far from over.
Changes at the Touquoy mine also under assessment
But that’s not the only regulatory hurdle Atlantic Mining Nova Scotia, or Phoenician Metals, faces.
In July 2021, Atlantic Mining submitted a proposal to Nova Scotia Environment and Climate Change for modifications to its Touquoy gold mine, even as it neared the end of its life.
In September that year NSECC Minister Tim Halman told the company the information it provided was “insufficient,” and he detailed what more was required.
In March 2022, St Barbara submitted an “addendum” to NSECC, ostensibly with the missing information.
Two months later, Halman once again wrote to Atlantic Mining saying it had not provided the information he requested nearly a year earlier.
The Examiner asked St Barbara if it would continue the environmental assessment of the proposed modifications of the Touquoy mine, given the decision to pause the Beaver Dam project assessment and possibly move the processing mill to Fifteen Mile Stream. Brannen’s reply:
The Environmental Assessment (EA) for modifications to the Touquoy Mine is still moving ahead and will be submitted to the provincial government shortly. The elements of this EA are a requirement to continue production at Touquoy for the next two years and will allow us to continue contributing to the economic development of communities in the Eastern Shore.
Brannen did not reply to questions about when and how the waste rock would be removed from the Touquoy pit, which NSECC says has to happen in January 2023.
Environmental issues at the Touquoy mine
In July 2022, NSECC quietly approved a raising of the height of the Touquoy tailings facility, after St Barbara threatened it would suspend the mine if that approval weren’t granted.
An aerial photo taken in November 2022 by Raymond Plourde of the Ecology Action Centre shows an excavator atop the retaining embankment of the tailings management facility, close to a seepage pond full of discoloured liquid.
The Examiner asked St Barbara’s Sarah Brannen and NSECC what the excavator was doing on the berm, whether it was raising the tailings facility embankment or doing repairs on it.
Brannen did not reply to that question.
Nova Scotia Environment and Climate Change declined to answer, saying it could not comment on an “unauthenticated photo.”
The Examiner sent the photo and questions about it to Dr. Steven H. Emerman, owner of Malach Consulting, a mining consulting firm based in Utah in the United States, and one of the authors of Safety First: Guidelines for Responsible Mine Tailings Management.
Emerman’s reply:
I would assume that the yellow earthmover is doing some sort of repair work. Removing tailings from the tailings dam in order to make the tailings dam higher would not be a recommended practice because it would make the tailings dam even steeper. I am confused as to why the mining company would not answer this question.
Heavy metal concerns
The Examiner also asked Emerman for his analysis of reports of exceedances of heavy metals at some water monitoring sites at the Touqouy mine detailed in its industrial approval.
Specifically, we asked Emerman for his take on data from pages 7-19 and tables 7.12 and 7.13 of the registration document Atlantic Mining submitted to NSECC as part of its proposed modifications at the mine, which show increased presence of heavy metals.
According to Emerman:
The tables would be much more meaningful if there were some information about the magnitudes of the exceedances. The authors are not in any way making it easy to compare water quality upstream and downstream of the mine or before and after mine development.
Emerman then reformatted the tables to make the data easier to understand.
“Concerns are the increases in arsenic, cobalt and selenium at [sampling point] SW-15, and the increases in arsenic and mercury at [sampling point] SW-20,” Emerman writes.
Arsenic, cobalt and mercury are heavy metals that can pose a variety of health risks, while human exposure to high levels of selenium can cause neurological problems.
A map on p 69 (Appendix C) of St Barbara’s industrial approval for the Touquoy mine shows that monitoring point SW-20, where Emerman’s revamped table shows significant increases in arsenic and mercury, is in a wetland and on a small stream that runs very close to the seepage pond with discoloured liquid that appears in the aerial photo taken by Raymond Plourde in November.
Asked if the proximity of this small stream to the seepage pond could have anything to do with the increase in levels of arsenic and mercury in the SW-20 monitoring point, Emerson replies, “The simple answer is yes.”
Questions sent to St Barbara’s Sarah Brannen about the exceedances have yet to be answered.
The same map and Industrial Approval show that monitoring point SW-15, where there was an increase in arsenic, cobalt and selenium, is in a wetland at the end of an unnamed tributary to Scraggy Lake south of the polishing pond. Scraggy Lake is where the effluent from the polishing pond goes.
These exceedances at SW-15 have not gone unnoticed by the provincial regulator.
In August 2022, when NSECC last updated the industrial approval for the Touquoy mine, it instructed Atlantic Mining to “implement measures to address” them.
Emerman explains that there is a connection between the use of cyanide in gold processing and the appearance of arsenic, mercury and selenium in seepage from tailings ponds.
“If arsenic, mercury or selenium are present in the gold ore,” he writes, “I would expect them to be extracted by the use of cyanide and, thus, to be present in the tailings pond, unless there is a circuit for removing these elements prior to shipping the barren cyanide solution to the tailings pond.”
Emerman notes that neither St Barbara nor Atlantic Gold are signatories to the International Cyanide Management Code, a voluntary certification for companies that manufacture, transport or use cyanide for gold or silver production, to help them improve safe management of the dangerous chemical and reduce risks “to human health and the environment.”
“That is very disturbing,” Emerman says.
Tailings are forever
Another piece of unfinished business for the new owner of St Barbara’s Nova Scotia operations is the requirement, laid out in the 2008 environmental approval for the Touquoy mine and repeated in each amendment of its industrial approval, that the company – then DDV Gold and soon to be Phoenician Metals – produce a plan for acquiring conservation land in the vicinity of the Touquoy mine within a year of the amendment of the industrial approval, and if it fails to do so, post half a million dollars in security with the province.
St Barbara says Touquoy will go into “care and maintenance” in 2024. Asked what that would entail and how many people would be employed at the site, Brannen replies:
We are working on the specifics of that now. More information will be available in the months ahead and we will be happy to answer questions on this when we have more information.
The August 2022 industrial approval stipulates that the company provide NSEEC with an “updated reclamation plan (and updated reclamation security) that includes the cost to reclaim the raise of the tailings management facility” by February 28, 2023, and a final mine and reclamation plan by May 30, 2023, “or within six months after continuous unplanned suspension of production.”
Once the mine is closed permanently and reclaimed, the mine owner (whoever that will be by then) must monitor and report on it for at least three years.
Of course, tailings facilities don’t just go away after three years.
According to the authors of the May 2022 report with guidelines for responsible mine tailing management, one of whom is Steven Emerman:
Tailings facilities must be monitored, inspected, maintained and reviewed in perpetuity, or until there are no credible (physically possible) failure modes. Without perpetual oversight, the failure of a tailings dam is inevitable. Given that operating companies will not exist long enough to accomplish perpetual monitoring, inspection, maintenance and review, the operating companies’ ability to eventually eliminate all credible failure modes must be a key consideration during the permitting process.
Nova Scotia currently holds a security of $41.2 million for reclamation of the Touquoy mine.
For what that’s worth.
What a disaster this has turned into. Unfortunately, it was foreseeable and no one cared enough to think twice.
I wish I could say any of this surprises me. The simple fact is that NS’s relatively small and under-resourced department of environment is not up to the job of regulating such a large mining project when its owners are bound and determined not to do the right things, and politicians don’t have the stomach to shut it down as soon as compliance becomes an issue. It’s Boat Harbour all over again.
Thank you for another excellent article. I hope somebody in government is taking notes as they read. ‘Emerman notes that neither St Barbara nor Atlantic Gold are signatories to the International Cyanide Management Code…’ Really? And they are allowed to open gold mines in our province? Isn’t the most basic task of any government to protect the health and safety of its citizens?
Great work here Ms. Baxter! You have identified many concerns here which Nova Scotians should be very concerned over. I say no more new large open pit mines until these issues are addressed.