Penalties to Ascot Resources Ltd. were dropped six-fold from an initial $325K
Penalties to Ascot Resources Ltd. were dropped six-fold from an initial $325K
A B.C. mining company has been penalized more than $54,000 after it failed to prevent contaminated wastewater from discharging into the environment.
The penalties, levied to Ascot Resources Ltd. (TSX:AOT) under the B.C. government’s Environmental Management Act, outline several permit breaches at the company’s Premier Gold Project near the B.C.-Alaska border.
In her final determination, director of the Environmental Management Act Gwenda Laughland said the contraventions violated a “fundamental pillar of the regulatory regime” and were severe enough to be categorized as “major” contraventions.
Ascot took over operation of the mine 25 kilometres north of Stewart, B.C., in 2018, about two decades after it had been sent into care and maintenance.
As part of its permit to re-open gold and silver mining operations, the publicly traded company was required to upgrade a treatment plant that could handle any wastewater from a historic tailings dam and its renewed operations.
But in June 2022, construction on the treatment plant — alongside several wastewater monitoring stations — was halted after the company lost financing.
Company says high levels of contaminants were there for years
Starting in late 2022, testing found water contaminated with cadmium, copper and zinc at levels that exceeded the mine’s permit. Of the 14 breaches, five were found to exceed the permit limit by more than 660 per cent.
Each of the metals can be toxic to aquatic and human health, with chronically toxic levels of zinc capable of killing fish by destroying their gill tissues or triggering deadly levels of stress.
On April 29, 2024, the ministry issued an initial assessment of more than $325,000 in combined environmental penalties.
The initial assessment also included alleged breaches against the company for releasing toxic water from a tailings dam 14 times in June 2022.
Mine tailings are drowned in water to keep them from reacting. When they are exposed, they react with air, acidify and can leach metals into surrounding environments.
In submissions, Ascot defended its track record. During the construction delays, it claimed the old wastewater treatment plant was still operational, and that the water that was released into the environment was “well within historical ranges.”
Ascot said such high penalties were unreasonable for an old mine that had been releasing contaminated water at the same levels for years before it took over operations.
The company said it was “being penalized multiple times for essentially the same non-compliance” beyond its control. It asked for the penalties to be completely removed or substantially reduced.
A spokesperson for the company declined to comment.
Penalties dropped six-fold from initial $350K
Ascot has faced significant financial problems in recent years after acquiring the Premier mine and several other nearby deposits, including the recently fast-tracked Red Mountain project.
Ascot first poured gold at its Premier mineral project in April 2024. But since then it has not generated enough revenue to offset what ended up being lower grades of ore from one of its operational mines.
By September 2024, the company’s ore production had fallen behind schedule, prompting Ascot to suspend operations so it could catch up with mine development.
Today, Ascot owes tens of millions of dollars to creditors, including $8 million that is more than 90 days past due — a situation the company recently described as “serious financial difficulty.”
In her ruling, director Laughland said the company’s financing difficulties do not absolve them from meeting its permit requirements. But it is “context worth considering,” she acknowledged.
In her final determination, Laughland consolidated the recurring penalties connected to the wastewater plant and lack of monitoring. That led to a steep six-fold reduction in penalties to the company — to $54,000 from an initial $325,000.
Part of that reduction came after the company said it had completed work on the new wastewater plant in February 2024. Laughland said there was enough evidence that it had returned to compliance.
She cancelled the penalties connected to the tailings pond and significantly dropped the penalties initially levied against the company for economic benefit it derived from its failures.
Penalty system ‘not deterring behaviour’
Across B.C., an estimated 200 mine sites are currently contaminating or could pollute their surrounding environment, according to Nikki Skuce, co-chair of B.C. Mining Law Reform.
In 2022, a report commissioned by Skuce’s organization found nearly half of the province’s existing mine sites with tailings storage facilities are likely to have high, very high or extreme consequences in the event of dam failure.
Among sites currently inactive or undergoing maintenance, 46 per cent were found to have the potential to cause loss of human life, environmental fallout, or significant economic damage. For currently operational or proposed tailings dams, that potential jumped to 83 per cent, found the report.
In 2014, B.C.’s Mount Polley tailings dam failed, pouring over 24 million cubic metres of toxic sludge into the surrounding waterways in North America’s biggest such failure on record.
Short of a major event like that, Skuce said the Ascot case raises questions over how effective B.C.’s regulatory regime is at dissuading polluters.
“It raises concerns about the penalty system we have — the ability to negotiate and reduce fines because of economic reasons — isn’t OK,” said Skuce.
“They’re already low as it is and they’re not deterring behaviour.”