Company envisions a producing mine by 2015
The Eagle Gold Mine project proposed by the Victoria Gold Corp. should be permitted to proceed at Dublin Gulch northeast of Mayo, YESAB is recommending.
Photo by Whitehorse Star
John McConnell
The Eagle Gold Mine project proposed by the Victoria Gold Corp. should be permitted to proceed at Dublin Gulch northeast of Mayo, YESAB is recommending.
The recommendation was released Tuesday, a little more than two years after the company filed its application for an assessment by the executive committee of the Yukon Environmental and Socio-economic Assessment Board.
Under legislation, the Yukon government has 30 days to review the recommendation and make a decision whether to issue a Quartz Mining Licence.
Victoria Gold, however, is already planning for site preparation this spring, company vice-president John McConnell explained this morning.
“We are gearing up right now,” he said. The target, he added, is still to be in production by the summer of 2015.
McConnell pointed out Victoria Gold has put out a request for proposals for the large earth-moving contract required for the open-pit operation.
“A number of contractors are visiting the site this week, and I would hope to have their proposals by the end of February,” McConnell said.
It’s a mix of different companies which are looking at the job, from locals like Pelly Construction to larger national contractors like the Ledcor Group, he said.
A joint venture company involving the Nacho Nyak Dun Development Corp. and a company out of Yellowknife are also visiting the site, he added.
McConnell said he expects to bring in some heavy equipment next month ahead of the spring thaw and begin moving dirt in May.
The company, he said, is already permitted to do a lot of work that does not require its Quartz Mining Licence, though he does not expect any issue with the licence.
McConnell said the assessment board’s recommendation is quite favourable, so Victoria Gold doesn’t see any problems with either the mining licence or water licence.
“Our team did a good job, and YESAB did a good job as well,” he said. “It is a very thorough environmental assessment.”
The Eagle Gold project currently calls for a 10-year mine life, using a cyanide heap leach process to remove the gold from the ore.
Employment during construction is expected to peak next year at between 150 to 200 people on site on any given time, McConnell said.
During production, he added, it’s estimated there will be 400 on the payroll, with 250 at the site on any given day.
Victoria Gold has already signed off on a benefits agreement with the First Nation of Nacho Nyak Dun.
YESAB’s assessment produced 123 recommendations dealing mostly with the protection of the environment, safety procedures around the use of cyanide, emergency response planning and the requirement for the closure and reclamation of the site.
But the 336-page document also addressed concerns about the potential impact on the community of Mayo and its 450 residents, additional highway traffic along the Silver Trail and the heavier demand on the electrical grid.
“I appreciated the quality of work prepared by the proponent and their consultants, the involvement of the Nacho Nyak Dun, the community of Mayo, and our cyanide and water consultants,” Ken McKinnon, a member of the assessment board’s executive committee, said in a statement accompanying Tuesday’s recommendation.
“It is a fine example of how the assessment process should work.”
McConnell said the company is in discussions with the banks to raise the required $430 million in capital financing.
The banks have already had an independent engineering company confirm Victoria Gold’s feasibility study.
“Now we have a bankable feasibility study,” McConnell said.
“We are working with the banks now in terms of discussing debt financing, and we would hope to be in a position to make an announcement in the second quarter of this year.”
The vice-president acknowledged it’s a tough time to raise financing for mining projects, though he said a mentor of his once told him good projects will always secure financing.
“This is a good project,” he said.
McConnell said he expects employment at the site will top out at between 100 and 150 workers this summer.
“Next year will be our big year,” he said. “We will be a little slow getting started this year.
“But next year will be the big year when we start pouring concrete, putting in the foundations and bringing in the crushers and that sort of thing.”
Yukonertoo
Feb 21, 2013 at 6:41 am
Congrats to Eagle Gold. Given that OUR electrical generation capacity is finite, and it appears that Eagle wants to use our power, we must ensure that the shareholders of Yukon Energy profit from the supply of our power. At the very least, Yukon Energy should charge twice the residential rate for the power they sell to Eagle and other mining projects. It is about time that Yukon Energy look after its shareholders. Mr. Morrison, the CEO of Yukon Energy, is reported to have insisted that we must supply power to this and other mines. If that is the case, Yukoners deserve to have their power consumption subsidized by miners rather than the current subsidization of mining corporations by residential customers.