August 2011

A new cleaner era in a historic silver district

By Correy Baldwin

The mine employs about 120 people | Photo by Richard Hartmier

Historically, Keno Hill is one of the largest silver-producing regions in Canada. The area, located 330 kilometres north of Whitehorse, Yukon, boomed in the 1920s. Between 1921 and 1988, it produced more than 217 million ounces (6,150 tonnes) of silver. By 1989, however, depressed silver prices had driven the district’s sole owner, United Keno Hill Mines, into receivership.

“United Keno Hill’s assets were basically abandoned in the late 1980s,” explains Alexco CEO Clynt Nauman. “The property fell back to the custody of the Government of Canada for environmental care and maintenance, and it stayed that way through the early 2000s.” Eventually the government put the district’s assets up for sale in 2005, and in 2006, Alexco was selected as the preferred purchaser.

The 243-square-kilometre land package includes 35 historic mine areas. One of these is the Bellekeno Mine, located two kilometres from Keno City and 15 kilometres from the old townsite of Elsa, which was the hub of activity when Keno Hill was in full operation.

Inheriting the environmental legacy

Seven decades of mining left behind a lot of infrastructure. “Keno Hill has access to all-weather roads that are government maintained,” says Nauman. “We’re on the power grid, which is of great significance to us. In some cases, we can use the underground workings that were left in place historically.”

But Alexco acquired more than the Keno Hill property and infrastructure. The purchase also came with nearly a century’s worth of environmental liability. One of the primary conditions of the sale was that Alexco clean up and reclaim the area.

Indeed, one of Alexco’s strongest assets in their bid for the property was their reputation in mine reclamation. The company was formed to both explore for precious metals and provide environmental management services.

Prior to Alexco, Nauman operated Viceroy Minerals with Brad Thrall, now Alexco’s COO. Viceroy had a focus on mine-site reclamation and water remediation, and twice won the Robert E. Leckie Award for Outstanding Mining Reclamation Practices from the Yukon government for its work at the Brewery Creek gold mine, 100 kilometres north of Keno Hill.

“We had the skill set that Canada was looking for,” says Nauman about the Keno Hill purchase. “We had reclaimed mines; we had done it in the North and had received awards for that work; and we understood how to put protection of the environment together with developing a new mine and putting it into production.”

Thrall explains the challenges. “We have a wide range of issues that we’re dealing with: water treatment from underground mine pools, the historic tailings, waste dumps, and the old townsite of Elsa, which has a number of old buildings and safety and human health hazards,” he says. “One of the challenges is not only the size of this district but the variety of technical issues to consider during the district closure planning process.”

“The biggest concern is zinc in the water,” says Thrall. A number of the historic underground mines have flooded and are releasing water into the environment. Alexco is capturing the toxic water and treating it to remove the zinc so that it is non-toxic prior to reaching the receiving environment. Water treatment facilities have been upgraded, and there are now four water treatment plants on site.

There are also the historic tailings to deal with. Old practices saw tailings in a slurry form dumped right into the environment, often with little containment. “The impact of the business, the footprint of the operation, is much less now,” says Nauman, comparing Bellekeno to earlier practices. Today, Bellekeno’s tailings are environmentally benign.

“One of the unique things about the design at Keno Hill is our environmental features,” explains Thrall. “We actually filter and dry our tailings before they’re stored in the environment in an engineered-lined facility.”

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