Going for gold
Town of Lynn Lake grabs gold for taxes

Doug Ashbury
Northern News Services

Yellowknife (Dec 10/99) - Hand over the gold or face a load of lead!

Well, likely it wasn't put quite that way, but a gold grab in the community of Lynn Lake in Northern Manitoba is being likened to something out of the wild west.

Turns out the town of Lynn Lake took the gold to cover $2 million in taxes it claims Black Hawk Mining Inc. owes.

So the town of Lynn Lake went to the courts, got a warrant, set up a road block, complete with a police escort, stopped a truck full of Black Hawk Mining's gold and seized gold bars weighing 2,400 ounces bound for Standard Bank London.

The bars, according to media reports, are now locked away in a downtown Lynn Lake bank.

So what about Yellowknife, owed about $16 million in tax from Royal Oak?

A local lawyer, not knowing the status of Black Hawk Mining, surmised that the Lynn Lake mining company must still be operating and certainly is not in receivership like Giant.

With Giant in receivership, the city "wouldn't get a warrant" from the courts, she said. Royal Oak's been in receivership since spring. Under the receivership, all Royal Oak's assets are frozen.

Mayor David Lovell said there's no way Yk can pull a Lynn Lake.

In Manitoba, "the company that owes the money, is still operating the mine," he said.

So though the City of Yellowknife can't follow Lynn Lake's lead, it still poses the question -- why didn't the city think of this 10 months ago when Giant's tax bill was, well, giant?

Lovell said even if the city were to have contemplated -- which it did not -- pulling a Lynn Lake, the window of opportunity would have been only a few months.

In February, Royal Oak's situation didn't seem so extreme -- Royal Oak went into tax arrears Jan. 1 owing the city about $750,000.

"We were all waiting for Kemess (what was to be Royal Oak's flagship gold copper mine in British Columbia) go online."

And what about the Canadian Autoworkers Local, seeking severance from the defunct Royal Oak?

CAW Local 2304 plant chair Steve Petersen said the union had, at one time, considered putting a miners' lean on the Giant property. But, he adds, lawyers for the local opted to "pursue other avenues."

Petersen, who noted he certainly was not serious, said, recently, the idea did occur to him. It was during the last brick pouring ceremony two weeks ago.

There were eight gold bars on display.

Come to think of it, the mayor was there too, he could have picked them up then. With each bar worth about $250,000, six would have fit just about the bill.

As for Black Hawk Mining's response to the Lynn Lake lift, not surprisingly the company is asking a court to set aside the seizure.

Black Hawk called the town's move "precipitous" and "unilateral" and an "affront to due legal process."

The company says under a townsite agreement before the courts, it is not subject to further taxes.