Gold mine spill shines light on practice of avoiding environmental assessment – by Nelson Bennett (Business Vancouver – August 11, 2015)

Pollution on a remote northern B.C. island only discovered after whistleblower reported improper practices

A small gold mine on an uninhabited island on B.C.’s north coast has some big problems. Just seven months after its Tel mine was declared to be in commercial production, Banks Island Gold Ltd. (TSX-V:BOZ) has been forced to shut it down, putting 100 people out of work and leaving investors with shares that fell more than 70% in value over the course of one week.

There is some question whether the mine can reopen, as the company had been struggling with a $14 million deficit before the mine was shut down and says it will need to seek “immediate financing” in order to restart.

The mine was ordered shut down for unauthorized discharges of effluent from its mine site that resulted from flooding. An inspection by the Ministry of Energy and Mines also found a number of permit violations, including the processing of ore from an unpermitted mine site.

The company is facing potential legal action from the Gitxaala Nation, which says the Banks Island Gold mine is an example of project splitting and scoping – a tactic used to get industrial projects approved without having to go through a rigorous Environmental Assessment Office (EAO) review.

“They basically made this mining outfit just big enough so that it didn’t require a full [environmental assessment],” Gitxaala Chief Clarence Innis told Business in Vancouver.

“In my experience, in this industry, this is a classic move,” said James Witzke, environmental assessment manager for the Gitxaala Nation. “You call it project splitting.”

Banks Island Gold has one operating mine on Banks Island – the Tel mine – and three other potential mine sites: the Bob, Kim and Discovery, where it has been conducting bulk sampling (the mining of ore to test for mineralization).

Unlike most mines in B.C., the company does not store mine waste in a tailings pond. It puts the processed ore back underground, although Al Hoffman, chief inspector of mines, said it wasn’t being done properly.

The company was found to be trucking tailings that were supposed to go underground at the Tel mine and trucking it to the Bob site, where it was dumped into a “glory hole” – a depression created when the workings from an old underground mine break through the surface.

Heavy rain and a failed sump pump resulted in flooding that spilled a “relatively small” amount of water and tailings into local waterways on June 25.

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