BRITISH COLUMBIA

Mount Polley Mine Investigation Extends To Imperial Metals Office

02/04/2015 04:00 EST | Updated 04/06/2015 05:59 EDT
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VANCOUVER - The B.C. Conservation Service has searched two offices of the company that owns the Mount Polley mine as part of an investigation into a tailings pond spill that gushed millions of cubic metres of wastewater into streams and rivers.

Imperial Metals Corp. (TSX:III) is being investigated by several agencies for possible violations of the Fisheries Act and the Environmental Management Act.

Insp. Chris Doyle of the conservation service said the company's office at the mine in B.C.'s central Interior and its Vancouver headquarters were searched Tuesday after warrants were served.

He said a major investigation is underway. Evidence gathered will be presented to provincial and federal prosecutors, who would determine whether to approve any charges.

Environment Canada, the Department of Fisheries and Oceans and the RCMP are assisting in the investigation.

"I can't really go into any particulars," Doyle said of his agency's probe. "We don't want to jeopardize the investigation or any subsequent core proceedings."

He could not say which specific areas of the acts that Imperial Metals is suspected of violating.

The maximum penalty under the Environmental Management Act is a $1 million fine or up to six months jail time. Under the Fisheries Act, the maximum penalty is a $500,000 fine or up to two years imprisonment.

The share price of Imperial Metals tumbled Wednesday to $8.72, down from yesterday's closing price of $9.23.

Steve Robertson, Imperial's vice-president of corporate affairs, said the company is co-operating with authorities and the warrants are a normal part of the investigation.

"The timing was a surprise but we of course know that in large investigations like the one that's going on into what happened at Mount Polley, warrants of that type are common," he said.

He said the fact that the investigation is moving forward is a positive step, as the company hopes it helps to dispel "rumours" and "conjecture" swirling around the dam's collapse.

An independent report released last week blamed poor dam design for the collapse at the open pit gold and copper mine. The report said that building the mine's tailings site on a sloped glacial lake failed to account for drainage and erosion.

"I think that what happens, just as it did with the report that came out last Friday, they did a thorough investigation and came up with the result that there was a single cause of the failure and that was a design flaw," said Robertson.

"I think that as we move forward with these other investigations, eventually we'll get to the real story and the real truth.... Stakeholders, industry and the company will have a lot of comfort knowing that there's some finality and we can get this behind us and then move forward."

The spill on Aug. 4 last year released 24 million cubic metres of wastewater into a series of salmon-bearing waterways, raising concerns about the potential impact on humans and putting the entire mining industry under scrutiny.

The mine has been closed since the spill, but Robertson said the company has applied for a temporary plan that would allow it to deposit tailings into one of its pits, avoiding the tailings storage facility.

He said the provincial government is processing its applications, while Imperial Metals consults with regulators, First Nations and other stakeholders.

"We're expecting this will move forward and we'll get into a public consultation period and we're hoping to have a restart sometime in the second quarter," said Robertson.

Re-opening the mine would allow the company to retain its large workforce and provide much-needed cash flow to cover the substantial cleanup costs, he said.

Imperial Metals started operations at its new Red Chris mine in northern B.C. this week. The province has issued an interim permit to begin processing copper and gold ore at the mine, but it will have to apply for a full permit at a later date.

Environment Canada issued an emailed statement that said it could not comment on an ongoing investigation, but that the federal government takes environmental protection very seriously.

"We expect companies to operate in a responsible manner that protects the environment. Spills are unacceptable," the agency said.

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