Fool’s Gold: Nova Scotia’s Myopic Pursuit of Metals & Minerals (Part II)

The CEO and chairman of Vancouver-based Atlantic Gold Corporation, Steven Dean, a man with a history of international coal and metal mining, was being interviewed by Andrew Bell of the Business News Network (BNN).ⁱ Dean was talking up his company’s first gold mine, named Touquoy after a French miner who worked the deposit in the late 1800s, which had just gone into production in Moose River, Nova Scotia.

The interview was held at an ideal venue for Atlantic Gold to showcase its new open-pit gold mine, the first ever in Nova Scotia: the 2018 convention of the Prospectors and Developers Association (PDAC) of Canada in Toronto, the global mining industry’s “event of choice.”

Bell expressed amazement at the low cost — $550 –- of producing an ounce of gold at the Touquoy mine. Dean told Bell the mine would produce about 90,000 ounces a year which, at current gold prices, would make it a “profitable mine” with about $90 million in “operating cash flow.” And, said Dean, Atlantic Gold planned to enter its second phase of operations by 2022, with more mines operating in the area, producing a total of 200,000 ounces a year.

Bell also noted: “You had trouble with one family. They didn’t want to sell you the land. The province had to come in in the end.”

“We did, we did,” Dean replied. “But all things were worked out, and we’re in good shape now.”

“You came up against some stubborn Scottish DNA, or something there?” said Bell with a laugh.

“People were just standing by their rights, I guess,” Dean answered.

 

Miners’ rights 

Both Dean’s statements warrant examination. To begin, not all “things” were “worked out.” There are still two ongoing cases with the Nova Scotia Utility and Review Board (UARB) between the mining company and people unhappy about losing their land to the mine.

One of the complainants is Wayne Oakley.  In its decision on his case in February 2018, the UARB noted that this was the very first time that a person’s entire property and home was expropriated in Nova Scotia.ⁱⁱ

It ordered Atlantic Gold to pay Oakley $350,750, of which $305,000 was the agreed market value of the property and $47,450 compensation for the disturbance he had suffered. ⁱⁱⁱ

Atlantic Gold didn’t accept the UARB decision; on 10 April 2018, it appealed it to the Nova Scotia Court of Appeal. ^iv

The other claimant against the mining company is Forrest Higgins. His family has owned land in and around Moose River for 120 years.

His father, the late Forrest Higgins (Senior), had begun cultivating Christmas trees on in the area in the 1940s and the business had flourished. In a book Higgins, Sr. wrote about the history of the mines, he wrote that if anyone came through Moose River asking about the possible reopening of the old gold mines, he invited them to forget about gold mining and instead look at the “green gold” the family was growing.^v

“We didn’t want our land to go out of the family and we didn’t want it destroyed,” Forrest Higgins tells me.

Our involvement [with the current mining enterprise] came when they came door to door. They wanted to buy up every piece of land in the village, and they threatened people that if they didn’t sell, the mine would still be going ahead so they should take what was offered.

Some people accepted the first offer made to them, happy to have a buyer for their homes in the shrinking village. Others held out until the Australian company, DDV Gold (now Atlantic Mining NS, a subsidiary of Atlantic Gold), upped the price.

The Higgins family, both father and son Cleve, had no intention of selling at any price.

But despite their long and proud attachment to their land, the Higgins were no match for the NDP government of Darrell Dexter and an Australian mining company. Natural Resources Minister Charlie Parker took the extremely rare step of issuing a vesting order, which gave the company the right to seize the land it wanted for the mine.

Atlantic Gold, which had emerged after a corporate restructuring as the parent company of several subsidiaries, one of which had been DDV Gold, ^vi expropriated two of the family properties in 2012. The Higgins lost about eight acres (3.3 ha), including the family’s historic homestead and a seed farm for their Christmas tree business, as well as a barn and warehouses, property on which the Higgins family had paid taxes for generations.

Forrest Higgins appealed the expropriation to the Nova Scotia Supreme Court and lost, and the Supreme Court of Canada refused to hear the case. In 2016, he went to the UARB with his complaint against Atlantic Gold. The formal hearing is scheduled for February 2019.

Higgins laments what has happened to Moose River since the mining started. “The village no longer exists,” he says. “It’s pretty sad. Those are all short-term jobs, but the legacy will be a massive pit.” He is particularly worried about the rivers and lakes downstream from the Touquoy mine, where many millions of tonnes of toxic tailings will be stored.

“The ratio of benefit to disaster doesn’t make any sense,” says Higgins. The primary benefit, he believes, is for shareholders and for those who will get jobs for the few years that the mine is in operation.

NDP leader Gary Burrill was the MLA for the area at the time, and he spoke out against the expropriation. Although it pitted him against his own party, he maintains to this day it was the right decision. He was, and remains, concerned that the province was opening the door to open-pit gold mining without the strong, arms-length regulatory authority and mandatory full Class II environmental assessments he thinks should be required for such mines.

Burrill had been a minister in the United Church in Moose River, which was also sacrificed for the mine. “I conducted its funeral,” he says.

In addition to the removal of the entire village of Moose River, the mine displaced the provincial park and cairn that marked the spot of the 1936 Moose River rescue. Both were relocated to the entrance of the Touquoy mine, beside the Moose River Gold Mining museum.

 

Citizens’ concerns ignored

Opposition to the Touquoy mine was not limited to the Higgins family. It had begun as early as March 2007, when an Environmental Assessment for the mine, written by a consultant for DDV Gold, was submitted to the provincial government with a public review period of just two weeks.

The Eastern Shore Forest Watch Association pointed out that it was “unfathomable” that in the 21^st century, a “potential polluter gets to write his own environmental assessment,” which was akin to “putting Jesse James in charge of Via Rail.”^vii

More than 120 deeply concerned citizens and groups, as well as provincial and federal government departments responded to the environmental assessment, and there were many environmental concerns. This led the provincial government to request a “Focus Report.”

In November 2007, DDV Gold released the “Focus Report” on the project — with 329 pages and more than 800 pages of appendices – and the public review period was until Christmas Eve that year.^viii

Despite the tight deadline, there was a strong reaction from concerned citizens. The Eastern Shore Forest Watch submitted a 38-page response, highlighting a wide range of problems with the proposed mine.^ix Among them was a list of “adverse effects of mine effluent on water quality in Scraggy Lake and downstream through the Fish River and subsequently through Lake Charlotte and Ship Harbour residential, cottage and recreational areas.” It also noted that the “proposed gold mine would sprawl across a large acreage of natural habitat directly adjacent to the Ship Harbour Long Lake Candidate Wilderness Area,” and that it would compromise White Lake and Tangier Grand Lake wilderness areas.

It described gold mining as a “boom-and-bust industry with no measurable long-term benefits for the economy,” noting that during a public consultation, “a majority of residents of the Eastern Shore and Musqoudoboit Valley reported that they believe the future lies in tourism, not mining.”

The Sierra Club of Canada, Ecology Action Centre, Canadian Parks and Wilderness Society, and Elizabeth May also submitted critiques. In all, there were 230 submissions – 165 opposing the mine and only 65 supporting it.^x

Nevertheless, the Touquoy mine received ministerial environmental approval on 1 February 2008, and its Industrial Approval in 2014.

 

“Backyard Canada”

Atlantic Gold doesn’t intend to limit gold production to one mine in Nova Scotia, or “backyard Canada,” as the firm has dubbed Nova Scotia.^xi Since DDV Gold got the environmental go-ahead for Touquoy, it has shape-shifted into a complex family of Canadian and Australian subsidiaries.^xii

It has also expanded its plans from its single Touquoy gold mine to the “Moose River Consolidated Project,” a “string of pearls” in eastern Nova Scotia, which will involve three more open-pit gold mines in Beaver Dam, Fifteen Mile Stream and Cochrane Hill.^xiii

Because of the changing plans and structure, the corporation has produced many thousands of pages of technical reports, environmental assessment documents and statements, all with appendices, each adding to earlier ones produced for individual mines. It is a daunting amount of reading, even for a government specialist whose full-time job might be to analyze the company’s plans, let alone for citizens wanting to know what the company has in mind for their roads, communities, lakes and lands.

Today, the “Touquoy Gold Project” covers 1,760ha and the open pit is rapidly taking shape. It will be 600 meters long, 300 meters wide and 125 meters deep,^xiv a crater about half as long as Dartmouth’s Lake Banook, but 10 times as deep.

Using explosives and massive trucks, Atlantic Gold will extract 20,000 tonnes of rock from the earth every day, just a few tonnes shy of the weight of the Statue of Liberty. That ore will be crushed and ground to a fine powder, from which gold is recovered using gravity and then cyanide in a “carbon-in-leach” circuit. A sulphur dioxide air process will reduce cyanide in the tailings.

 

Cyanide questions

Transport Canada categorizes the sodium cyanide (solid) used by Atlantic Gold as a Class 6.1 toxic substance, a dangerous good requiring Category I packaging for transport – or the most secure form of “containment.” If transported in quantities greater than a tonne, it requires an Emergency Response Assistance Plan.

The 2007 Focus Report on the Touquoy project included an “Atlantic Gold Route Risk Assessment” from DuPont Canada.^xv It projected that for the five-year life of the mine, a volume of 1.3 million pounds (590 tonnes) of cyanide would be transported to Touquoy in 1-tonne packages of wooden boxes wrapped in polypropylene.

The cyanide would move by rail from Memphis, Tennessee to Truro, where it would be loaded into trucks operated by Brookville Transport and travel on Highway 102, “as this would be the safest road available and the one that would allow the fastest response in case there were any incidents.” The trucks would use Exit 8, and continue over Highways 224 and 227 to the Moose River Road and the mine site.

It took a letter from Barbara Markovits of the Eastern Shore Forest Watch Association to the Truro Daily News and Truro Mayor Bill Mills in January 2008 to bring this transhipment of cyanide through Truro to the attention of the town council and the public. Truro councillors were “extremely concerned” about the lack of consultation and that the Department of Environment would even consider such a plan.^xvi

Councillors voted to instruct their solicitor to seek an injunction on the cyanide transfer in their town. After this, Atlantic Gold said it had changed the plan and would not bring cyanide into Truro by train.^xvii

Ten years later, the mine has gone into operation and the transport of the cyanide — a huge amount of it — has quietly begun. According to DNR spokesperson Bruce Nunn, Touquoy is the only mine in the province that uses cyanide. Atlantic Gold uses .55 kg of cyanide for each tonne of ore milled.^xviii

According to Chrissy Matheson, a spokesperson for the Department of Environment, the Touquoy mine uses 35 tonnes of cyanide per week, which is transported in pellet form. In an email, she said it is transported “from Halifax to the site via highway 102, highway 227, highway 224, through Middle Musqoudoboit and finally Moose River Road to the Touquoy Gold Mine.”

Asked for more details on the transport of the cyanide, Matheson referred me to Transport Canada.

Transport Canada informed me that while the federal government is responsible for enforcing the regulations for the air, marine or rail transport of dangerous goods, provinces are responsible for enforcing the federal regulations for dangerous goods moving on their roads, including an Emergency Response Assistance Plan (ERAP).

Following this, I once again approached Matheson for details about the transport of the cyanide on public roads in Nova Scotia. She again responded that this was the responsibility of the federal government, and that it was “most appropriate for that agency to comment on the details you are looking for, or the company.” Atlantic Gold invited me to submit a list of questions, which included one on cyanide, but has not responded to any of my emailed questions.

Eventually, another spokesperson for the Department of Environment, Rachel Boomer, directed my questions on the monitoring of the cyanide shipments to the Department of Transport and Infrastructure Renewal. Spokesperson Marla MacInnis wrote:

Any loads of Atlantic Gold that we have checked have had an ERAP on their shipping documents. Our monitoring is done randomly at our Compliance Stations or by our mobile inspectors.

Sodium cyanide is a highly poisonous compound, deadly if ingested. Were a truck carrying it to be involved in a fire, or overturn and spill its load of pellets, an emergency response would require immediate isolation and possible evacuation of the area hundreds of meters from the site. Sodium cyanide is water-reactive, so a spill into any waterway, even a water-filled ditch, would be extremely serious.

The cyanide for Atlantic Gold is being transported on narrow and winding 200-series roads that, in winter, are often extremely slippery.

 

More mines, more questions 

The Touquoy mine underwent a provincial Class I environmental assessment (EA), which involves just 30 days of public comment leading to a final decision by the Minister of Environment as few as 50 days after a project is registered.

It is not clear why the Touquoy project did not trigger a federal assessment by the Canadian Environmental Assessment Agency (CEAA). It met several of the criteria for such an assessment, including the fact that it exceeded daily ore production of 600 tonnes, and placed at risk adjacent fish habitat.

However, the proposed mine at Beaver Dam has triggered a federal CEAA assessment, ostensibly because it will exceed 600 tonnes per day of ore production,^xix although this was also true for Touquoy, where 20,000 tonnes of ore are being produced each day.

Because all the ore from Beaver Dam will be transported to, processed and disposed of at the Touquoy site, Atlantic Gold states that related changes at the original mine site should also receive federal approval.^xxOne of these changes involves the disposal of the tailings and ore from Beaver Dam – nearly 47 million tonnes of rock over the life of the mine – in the exhausted Touquoy pit.^xxiThe main disadvantage of filling pits with mine tailings is the significant potential for groundwater contamination below and around it.

The Beaver Dam pit itself will be 900m long, 300-450m wide, and 170m deep, nearly as long as Dartmouth’s Lake Banook and more than 14 times deeper. The project is still undergoing a federal assessment with CEAA, and Atlantic Gold aims to have it in production in 2022.

A year before that, the company plans to start another new gold mine in Fifteen Mile Stream, which will be followed later by one at Cochrane Hill.

Fifteen Mile Stream is about 95km northeast of Halifax. It is within the Liscomb Game Sanctuary, where, as Atlantic Gold notes, there are no restrictions on mineral exploration and mining.^xxii While hunting and trapping are not permitted in the game sanctuary, it is wide open not just for mining but also for clearcutting. Much of it is owned by Northern Timber (a sister company to Northern Pulp). The mine development will involve re-routing the Seloam Brook.^xxiii

At an “open house” in Sheet Harbour for the Fifteen Mile Stream project in late March 2018, environmental consultants and two Atlantic Gold executives – James Millard, manager environment and permitting, and Alastair Tiver, vice president mine development – were on hand to answer questions from the handful of people who attended the poorly publicized event.

Millard and Tiver answered some of my questions, but the next day I received an email from Millard saying that the Atlantic Gold staff had been present “in the capacity of experts providing accurate technical and process information about the Fifteen Mile Creek [sic] Project to residents who may potentially interact or be interested in the project.” They were “not official media spokespersons for the Company” and thus did “not wish to be quoted in this respect.”

This seems to defeat the whole purpose of public consultation, which is now obligatory for such projects. Further, I was advised, “If you wish to conduct media interviews with Atlantic Gold, I would be happy to put you in touch with our official media spokespersons.”

Millard requested that I put together a list of questions and send them to him, which I did on April 6. To date, and despite a reminder, I have had no answers to those questions. I also requested a tour of the mine, but was informed that the company was planning a media tour in the summer of 2018, to which Millard said he would be sure to send me an invitation.

At a second “open house” held in Sherbrooke for the Cochrane Hill mine, citizens who attended say that they and two councilors from the Municipality of the District of St. Mary’s expressed concern about the amount of water that the mine would use, and its proximity to the St. Mary’s River. They also told Atlantic Gold representatives that citizens were nervous about the company’s plan to re-route part of the Number 7 Highway and displace homes.

Posters at these events said that both projects were beginning the environmental assessment process with CEAA.

The Eastern Shore Forest Watch has officially requested that CEAA demand a new assessment for the entire consolidated project, given the changes it brings to Touquoy and the whole area. It seems unlikely this will happen; the federal Department of Environment and Climate Change has been notably unresponsive to an even more strident request from citizens and fishermen for a CEAA assessment for Northern Pulp’s plans for a new effluent treatment and disposal facility.

 

Truck traffic ahead

Another contentious issue with the three new mines involves the heavy truck traffic they will bring to public roads in eastern Nova Scotia.

Atlantic Gold plans to truck all the extracted ore from Beaver Dam to Touquoy for processing. This means 20 trucks – each carrying 31 tonnes and travelling at 70km an hour – each making nine trips a day, 350 days of the year. The company says the trucks will be on the roads for 12 or 16 hours daily. ^xxiv That works out to 23-32 trucks per hour, or a truck passing every two or three minutes.

Originally, the company planned a route that included 15.4km of private logging roads and 16.4km of public roads. However, as this would have taken the trucks past the Beaver Lake Reserve and residences belonging to it, CEAA requested an alternate route.^xxv Atlantic Gold has now proposed using 23.4km of private road and 11.3km of the public Mooseland Road.

In addition to the ore moving from Beaver Dam to Touquoy, Atlantic Gold also plans to transport ore from the proposed mine at Fifteen Mile Stream to the mine at Moose River for gold extraction. The ore to be transported will be “concentrated” and 95% of the ore extracted at Fifteen Mile Stream will stay behind as waste rock.

This second route involves 52km of public highway, including 17km on Highway 374, 4km of Highway 7, 31km on Highway 224, and then 11.9km on the Mooseland Road.^xxvi Trucks will make 11 return trips every day.

A third plan is in place for the concentrated ore from the proposed Cochrane Hill mine, which will be hauled some 140km to Touquoy for processing.^xxvii The Cochrane Hill ore will be transported in 38-tonne payload trucks, which will ply about 123km of public roads. This includes about 80km on Highway 7, three kilometers of which are to be “realigned.” While the mine is operating between 2022 and 2027, the moving of ore from Cochrane Hill will involve 10 or as many as 20 trucks a day, until 10:00 or 11:00 each night.

Nova Scotia promotes the Eastern Shore Region to tourists as “an outdoor enthusiast’s paradise” and Highway 7 as a scenic “Marine Drive.”^xxviii Putting aside the increased risk of traffic fatalities on these public roads with the heavy truck traffic, and the effect it might have on tourism and human well-being in eastern Nova Scotia, there is also the question of what this will cost in added wear and tear on roads and bridges.

Atlantic Gold isn’t the only company with big plans for big mines on the Eastern shore. Another company, Anaconda Mining, is looking to open an open-pit and underground gold mine at Goldboro, about 185km from Halifax. Resource Capital Gold Corp is already operating an underground gold mine at Dufferin, and looking to develop two more at Tangier and Forest Hill. Another company, Coronet Metals, has taken over 3,888 mineral claims covering 68,000ha in the “gold belt” in eastern Nova Scotia, giving it “control” over “approximately 242 kilometers of gold-prospective” slopes.

So the gold rush is just beginning.

 

What’s in it for NS?

There is no sign that the government intends to do “true-cost accounting” of the Atlantic Gold project that would take into account the real costs that would be shouldered by taxpayers, as requested by the Eastern Shore Forest Watch.

Even before the Touquoy mine went into production, there were calls for the government to repair the Moose River Road that led to the site, which was said to be in such bad shape that it might delay the gold mine development.

That any of the problems with the road might have been caused or exacerbated by the transport of heavy machinery and equipment to the mine site seems not to have been taken into consideration by Councilor Steve Streatch or the vice president of projects at Atlantic Gold. Rather, they called on the government to repair or remake the road.

It costs the people of Nova Scotia an estimated $300,000 to repave a single kilometer of highway, and between $500,000 and $700,000 to upgrade a kilometer of trunk highway. It doesn’t take a road engineer to figure out that the heavy truck traffic that Atlantic Gold is proposing for more than 100 kilometers of public roads — Mooseland Road, Highway 224 and Trunk 7 — could cause damage over the next nine years that could cost tens of millions of dollars to repair.

On the revenue side, however, it is impossible to calculate what the province will actually receive from the mines in royalty payments. In Nova Scotia, like most jurisdictions in Canada where the mining industry is so influential and so heavily influences policies, the government receives a 1% royalty of the “net value” received by the gold producer. This allows corporations to deduct the capital expenses of expanding mining operations and the operating costs of gold production, and pay no royalties until they declare a profit.

According to Jamie Kneen of MiningWatch Canada, corporations may be paying themselves very well, but paying no royalties for the minerals they are extracting because of all the expenses they can deduct before royalties are paid to governments.

By contrast, partner corporations that share in the ownership of Atlantic Gold’s mining properties are paid 3%“net smelter” royalties (NSR), which means royalties are paid to partners on the actual value of the gold produced at a mine.^xxix

As for taxes, posters at the open-house sessions for the proposed Fifteen Mile Stream and Cochrane Hill mines said the estimated combined federal and provincial taxes the mining operations would pay in their four and five years of operation would be $90.2 million and $62.5 million, respectively.

Gold is a finite resource. Whatever minerals are mined in the province should benefit not just Nova Scotians today, but also their descendants. If the royalties are low or negligible, and the taxes hardly cover the costs of road repairs let alone the environmental liabilities of the mines, then can we at least expect the jobs created to help balance the equation?

In 2015, when the consolidated project included the Touquoy and Beaver Dam mines, it was estimated that in Year 3 of operation, Atlantic Gold would employ 72 people (both departmental and hourly labour) and in Year 6, that number would be 128.^xxx

When two more mines were added to the project, numbers changed.

In an email, Tom Ellard, Atlantic Gold’s VP business integration & people, told me that in March 2018 the Touquoy mine had 240 full-time employees who lived in the “surrounding communities.” He estimated “a headcount of over 150 full-time jobs at each site after construction,” and “hundreds of workers” at each site during construction. He did not respond to follow-up questions about where exactly all the employees came from, and if they were unionized, so I have not been able to verify any of these claims.

In the BNN interview three weeks earlier, Atlantic Gold’s CEO Steven Dean said that Touquoy currently employed “just over 200.” In the consolidated project’s second phase with additional mines, there would be up to 350 jobs. Asked if skilled miners at Touquoy were making “well over $100,000 a year,” Dean replied, “Not that much, but still a good base salary.” He also said the workforce was commuting from Halifax and Dartmouth.

 

After the goldrush

It seems unlikely that with these numbers and the short life spans of the mines, they can rejuvenate or build communities in rural Nova Scotia. In nine years, the last mine at Cochrane Hill will be closed.^xxxi

So far, only Touquoy has a reclamation plan. The Department of Environment refused to provide a copy, saying it could be obtained though a Freedom of Information request.^xxxii  

In its own documents, Atlantic Gold says it will remove all buildings and facilities, and that everything else on the mining site — the open pit, plant site, waste rock storage facility and tailings management facilities — “will be contoured to blend with the natural landscape and re-vegetated. The tailings and polishing pond areas will be developed partially into wetlands.”^xxxiii

An effluent treatment facility will “reduce arsenic to acceptable levels in the aged tailings water discharging from the tailings impoundment.”^xxxiv The treated effluent will then be sent to a “polishing pond” where the arsenic will be collected for “either onside or offsite disposal.” The “clarified effluent” will eventually be released into the “engineered wetland” that will drain into nearby Scraggy Lake.

Atlantic Gold is to provide a bond of $10.4 million in surety to the government for the reclamation process, paid in stages according to the level of disturbance of the landscape. As of 22 April 2018, the province held $5.53 million of this in security.

But the tailings and waste left from the mines can cause damage for centuries after the gold and jobs are gone.

Barbara Markovits of Eastern Shore Forest Watch worries that the Eastern Shore, which has already suffered from intensive clearcutting, will become “a sacrifice zone” if gold mining proceeds according to industry plans that seem to be heavily supported by government.

“Gold mines can and do close without warning and without sufficient clean-up,” she tells me. “Even if mines reach their three- to five-year projected lifetime, the Eastern Shore will be hosting many derelict industrial sites with buried toxic waste.”

She adds, “The valuable fresh clean water will be contaminated with mining waste and the mining companies will be long gone.”

 

Joan Baxter is a Nova Scotian journalist and award-winning author, who has researched and written extensively about extractive industries in several countries in Africa, where she lived and worked for three decades. Her latest book, The Mill – Fifty Years of Pulp and Protest, recently won the Atlantic Book Award for Scholarly Writing.

 

 

 

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