Yukon-Nevada responds to Jerritt Canyon closure: CEO says severance pay will be honored
By DOUG McMURDO - Associate Editor
Saturday, August 16, 2008 12:29 AM PDT
ELKO - The mystery surrounding the closure of Yukon-Nevada's Jerritt Canyon Mine in northern Elko County continues, though a dim ray of light has been shed by the company's chief executive.
“I'm not allowed to talk,” said Graham Dickson, president and CEO of the Vancouver, British Columbia-based company, when contacted by the Free Press Friday afternoon.
Dickson, citing disclosure rules and board of directors bylaws, said he could not address specifics of Thursday's full closure and the 400 layoffs that have occurred since Aug. 8, but he denied what he called “rumors” regarding severance pay and continued health benefits for impacted workers.
He said employees will receive 60 days severance pay, but not in a lump sum. Rather, they will be paid every two weeks over the next eight weeks. “The purpose of no lump sums was to ensure an orderly payout,” he said. “By law we're not required to pay a lump sum all at once.”
As for health benefits, which by federal law must be offered to any employee who wants them to continue up to three months following a layoff - and providing the employee pays his or her deductible - Dickson said, “As far as I know they still have health insurance.”
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However, in the first statement released by the company in a week issued Friday evening, neither health coverage nor severance pay in any form is guaranteed due to a lack of cash flow.
“The company is working hard to fulfill its statutory obligations to its employees, such as continuing health coverage and the payment of all suppliers,” said the unsigned statement. “To address the liquidity problem at the Jerritt Canyon operation, the company is now focused on refinancing to ensure obligations are met and to move forward to regain positive cash flow.”
The company reportedly lost a primary investor in June and Yukon-Nevada admits it faces difficulty attracting investors. “There can be no assurance that the financing or cash generating alternative chosen by the company will be available on acceptable terms, or at all,” according to the company.
There are signs that worst-case scenario has already begun.
Some of the 400 impacted workers told the Free Press they were unable to cash their final paychecks Friday after bankers advised them company accounts had been frozen or there was uncertainty they would clear.
Newmont Mining Corp. placed a lien on one of Yukon-Nevada's accounts.“We have exercised our rights on an account specific to our contractual agreement with Yukon-Nevada,” said Mary Korpi, director of External Relations at Newmont.
However, Korpi made it clear the lien did not impact any account other than what was established for toll milling Yukon-Nevada performed for Newmont. “Yukon-Nevada Gold Corp. is responsible for payroll,” said Korpi of the payroll account issue. “We had nothing to do with that.”
The company in its statement said toll milling contracts would resume, but no timeline was given.
Meanwhile, Newmont and Barrick Gold of North America have become an employment refuge for former Jerritt Canyon workers, but it could take more than three weeks for them to start work.
With no severance pay, many will likely fall behind on mortgage and vehicle payments and putting food on the table could prove difficult. The Department of Employment, Training and Rehabilitation said it would not grant unemployment claims because the company was supposed to provide the 60-day severance package.
The uncertainty over health insurance is another stressor, particularly for those with medical needs. One employee with nearly 25 years at the mine has been on medical leave for three months and was scheduled to undergo critical surgery in a couple of weeks. Without insurance, he said it would cost him at minimum $100,000 out of pocket for the operation, which he described as lifesaving.
And then there are those who were unable to cash their final paycheck. Bill Bernhardt, a mill maintenance worker at Jerritt Canyon for six years, said his check went through because it was direct deposit, but those who were handed a paycheck to cash were not able to do so.
Employees do not intend to sit idle, specifically in regards to severance pay. Attorney Robert Salyer of the Elko law firm Wilson Barrows & Salyer told the Free Press many Jerritt Canyon workers have initiated phone contact with the firm and some have been counseled.
“We're formulating a game plan,” said Salyer. “The focus of our research will be the 60-day severance package. Obviously I can't talk about (potential) litigation, but we'll do everything we can for them.”
Regarding the deserted mine site, Carol Raulston of the National Mining Association said Nevada was one of the most proactively regulated states when it comes to oversight of the hardrock mining industry.
She said both the state Department of Conservation and Natural Resources and the federal Mine Safety and Health Administration were on site and would remain there for as long as necessary monitoring tailings, ponds and other environmentally sensitive areas of the mine.
“The main thing is the state of Nevada has a number of tools that perhaps other states don't have from an environmental perspective,” said Raulston. “There is the Interim Funds Management (program) that gives the state authority to manage operations into closure.”
On Thursday, Conservation and Natural Resources Director Allen Biaggi told the Free Press Yukon-Nevada, as part of its permitting, deposited $44.5 million to ensure reclamation and remediation would be paid for in the event of a mine abandonment.
In addition to contacting Dickson on his cell phone, the Free Press attempted to contact key managers at the former Queenstake property for comment. General Manager Chip Todd was not immediately available. The voicemail of Chief Financial Officer Chris Oxner, who resigned effective Friday, could not be accessed, and administrator Dave Drips abruptly hung up the phone when the Free Press contacted him at his Utah home.
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Same old song and dance: More housing needed
hardrock wrote on Aug 18, 2008 9:39 AM:
Zero production for three months!
While all this was going on, we kept hearing "dont worry, we have the money" over and over again. It got to the point where the inside joke was that the Smith mine was going to be the prettyest little mine in Nevada they ever shut down. I guess we never really thought it truly would go that far.
Now thier running and hiding. That coward Dave Drips didnt even have the courage to tell people they were laid off. Instead, they sent thier sacrificial lamb Sam Ash to do the dirty work(as they did the last time they layed off).We are lucky to live in an area with jobs available, but that hardly takes the sting out of being shafted.
I believe the bottom line is were all lucky to finally be rid of that place. I cant think of anyone who was truly happy working there. We will recover every single penny that is legaly ours, I can personally promise that. "