More Mining in Yukon

A new hard rock mine is about to start production in Yukon, the first to open in a decade. Sherwood Copper’s Minto copper-gold mine is the talk of the town because it’s the most imminent. However, if projections hold up, Minto will be the vanguard of a series of mine startups that could mark an exciting new era in Yukon mining.

Mining is important to the Yukon because it creates economic benefits not just in the core area around Whitehorse, but in smaller outlying communities,” says Claire Derome, director of strategic industries for the Yukon Department of Economic Development (YED).

Minto’s economic impact

The opening of the Minto mine marks the culmination of an increasingly active period in Yukon mining exploration, with activity growing from $8 million in 2002 to more than $80 million in 2006.

The YED estimates that construction and development of the Minto mine will expand the territory’s GDP by approximately $30 million, while contributing more than 200 jobs and roughly $15 million in wages and salaries. Over its life cycle, the mine is expected to increase the territorial GDP by approximately $450 million. These figures are especially significant in the context of the Yukon’s relatively small economy, where the population is only about 32,000 and the total GDP was just $1.25 billion in 2005.

The manager of regulatory and corporate affairs for Sherwood’s Yukon subsidiary MintoEx, Bill Dunn, says significant construction dollars have been spent with local service and supply companies, including prestripping by Pelly Construction, diesel generators purchased from Finning, and fuel from Great Northern Oil. Freight services, expediting, camp supplies and groceries have also been provided by Yukon companies.

“We’re building relationships now that will benefit both local businesses and our company as we move into operation,” adds Dunn. “We’ll get our equipment, supplies and repairs in a timely fashion and local companies will get business.”

For example, MintoEx has used Jacob’s Industries of Whitehorse to barge supplies across the Yukon River. The mining company is having its own barge built, but is also facilitating a joint venture between Jacob’s and the Selkirk First Nation to operate the barge, providing ongoing income for both.

MintoEx has also reached a Co-operation Agreement with the Selkirk First Nation (SFN), based in the nearby community of Pelly Crossing. It gives preference to SFN, its beneficiaries and other Northern Tutchone First Nations for hiring and contracting opportunities where they can provide competitive service. One outcome is that MintoEx leases its Whitehorse office space in a building owned by SFN. Another has been local hiring by both MintoEx and subcontractors.

Out of the 220 personnel who had been hired by March 2007, 92 (about 41%) were Yukoners including 20 SFN members working onsite, another 21 from other Yukon First Nations and a further 51 non-First Nation Yukoners.

“Those 20 Selkirk First Nation jobs should put more than one million dollars in direct wages into Pelly Crossing,” says Dunn. “That’s a considerable impact on a community with a population of only around 300.”

According to Dunn, the majority of job-ready people in Pelly Crossing are already working at the minesite, but the company is working to expand the pool of skilled individuals through training. Dunn is chair of the Yukon Mine Training Association, an industry and First Nation initiative that is supported and funded by both groups, along with Yukon and federal governments.

“With no mining employment in recent years, we need to rebuild our bank of skilled workers through training,” agrees Derome. “The mining sector offers relatively high salaries. If people want to take advantage of those opportunities, they’ll need the right skills.”

The YED estimates that the annual direct impact for each of the first five years of mine operation will be 175 jobs, with annual wages and salaries of $13.7 million. These figures include mining, milling, support services and transportation.

The Minto project is also a critical element in a major hydro-electric energy project being planned by Yukon Energy Corp. MintoEx has signed a power purchase agreement to provide more than $7 million toward the construction of the first stage of the Carmacks-Stewart transmission project and to pay for a spur line to the mine.

Other projects in the wings

“After Minto, we hope to see more mine startups,” says Derome. “We expect the mining sector to drive growth for the next five years, more than any other industry sector.”

According to Mike Burke, the acting head of mineral services for the Yukon Geological Survey, there are a number of promising projects.

* Yukon Zinc is working to obtain a water licence and additional capital for its Wolverine zinc/silver deposit in the Finlayson District.

* Western Copper has begun permitting and is updating a feasibility study with 2006 drill results from its Carmacks copper deposit.

* Tagish Lake Gold is re-calculating the mineral resource for its Skukum Creek gold/silver deposit. The new data will be used for a feasibility study, and permitting is expected to begin soon.

* Alexco Resources is doing a combination of reclamation and exploration of both historical and new deposits of silver, gold, lead and zinc at Keno Hill.

* YGC Resources is likely to enter the feasibility stage this year on its Ketza River gold deposit.

* Pacifica Resources is budgeting $25 million for a large exploration program this year at the Selwyn project in Howard’s Pass.

Elaine Schiman is a freelance writer based in Whitehorse, Yukon, and can be reached at 867-668-6721 or elaine@northwestel.net.

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