Pelly Construction Ltd. is preparing to mobilize operators and equipment to begin the construction of Victoria Gold’s Eagle Gold Project north of Mayo.

Victoria Gold president John McConnell said Wednesday they’ve entered into a primary construction contract with the Whitehorse heavy equipment company.

“We start moving dirt next week,” McConnell told the Star.

Cobalt Construction, another Whitehorse-based heavy equipment company, will also be doing some work, he said.

While there’s still a final piece of Cdn. $40 million in financing to put in place to finance the initial construction, McConnell said, the company has $60 million in the bank with which it intends to advance the project.

The company announced July 31 it has secured a letter of commitment from an international banking group – BNP Paribus – allowing it to borrow up to US $220 million.

But it doesn’t want to tap into that until the initial $100 million on construction has been spent, McConnell explained.

He said the US $220 million will be used to carry the project through to production after the initial construction is complete.

“Our goal is to begin pouring gold in 2019,” he said.

An updated feasibility study released last September indicates the mine life is currently estimated at 10 years, with a total production cost of US $844 an ounce. Gold was trading this morning at $1,284.

Estimates released by the company previously put the annual production at about 200,000 ounces per year.

The operation calls for two open pits with the gold recovered using the standard cyanide heap leaching process.

McConnell said they’ve also contracted the development corporation owned by the First Nation of Na-Cho Nyak Dun to provide camp catering services.

The intent is to expand the camp capacity from 200 to 300 people.

Currently, said the company president and CEO, there are about 100 workers in camp. Most are associated with the ongoing $12-million exploration program.

When the first phase of construction is in full swing, there will be about 300 people on site at the peak, McConnell said.

Once in operation, he added, there will be approximately 400 employees working rotational shifts with about 200 at the mine site on a given day.

Pelly Construction has begun advertising for equipment operators for the Eagle Gold Project and for a first-line supervisor to oversee the construction work.

Pelly vice-president Jennifer Byram told the Star this morning the initial work of clearing the site and removing topsoil over the first few months will require a modest crew of about 30.

They will move into the next phase after Christmas as they begin the construction of the huge heap leach pads and associated ponds.

At that point, they’ll need a substantially larger workforce of about 125, she said.

Byram visited the mine site Wednesday.

“We will be busy for the next 18 months except for a short break at Christmas and the cold weather,” she said.

From the very first meeting Pelly had with Victoria Gold, Byram said, the mining company emphasized the importance it places on hiring Yukoners.

Once the site is ready, Victoria Gold intends to run its own open pit mining crew.

Nevertheless, there is sure to be opportunities for Pelly employees after the site preparation is complete, she suggested.

The Eagle Gold project is located in Dublin Gulch, situated 85 kilometres northeast of Mayo.

It has been fully permitted since December 2015, when it received its water licence.

The company submitted its project proposal to the Yukon Environmental and Socio-economic Assessment Board in December 2010.

In April 2013, the Yukon government accepted the board’s recommendation that the project be approved.

Victoria Gold has billed its Eagle Gold Project as the Yukon’s next gold mine for some time.

The company has consistently underlined that it was shovel-ready, with all required permits in hand.

In a report released last week, the Conference Board of Canada forecast a slight contraction of 0.7 per cent in the territory’s economy this year.

But it also predicted annual average growth of 6.6 per cent in each of the next three years. The board cited the Eagle Gold Project as one of the engines pushing the growth.

Victoria Gold is planning to power the mine by tying into the electrical grid with a connection to the transmission line running between Mayo and Keno City.