Dawson City has withdrawn its injunction against a local miner, but will continue to seek legal advice, Mayor Peter Jenkins said this morning.

Recently, the town filed an injunction with Yukon Supreme Court against Slinky placer mine owner Darrell Carey, who allegedly breached a zoning bylaw by developing his land without the appropriate permit.

Jenkins has announced the town will cancel the injunction after Carey was granted a permit by the Yukon Water Board.

In the injunction, the town says Carey began development activities – which included cleaning out trees and excavating pits – on the placer sites without a permit.

In April, the town served Carey a stop-work order, which he allegedly did not comply with.

Carey's placer mine operations are on the Dome Road, which is also home to a handful of residents.

Those residents have expressed concerns about the effect the mine would have on their property values as well as their safety and enjoyment of their residences.

"The major issue is the road and the safety of the road,” said Jenkins, adding that the purpose of the injunction was to stop Carey from encroaching on the side of the Dome Road.

In the injunction, the town says Carey's "excavations trespass on, pose significant hazards to and unreasonably interfere with the integrity of Dome Road.”

The town goes on to say that Carey's trespassing and presence have caused damage to Dawson, "including by preventing the Dome Road and adjoining premises from being reasonably safe for public use.”

In the Supreme Court documents, the town demands Carey not develop his claims any further until he obtains a municipal development permit.

Last fall, Carey applied to expand his placer mine, which included plans to rip up part of the Dome Road.

On Tuesday, Dawson council rejected Carey's application for such a permit. If the demands outlined in the injunction were met, therefore, Carey would effectively be unable to mine his claims.

Although the town has now dropped it legal action against Carey, it still stands by its decision to deny him the permit, Jenkins has said.

That decision came just days after the Yukon Territory Water Board granted Carey a water permit for the Slinky Mine property.

The board ruled the town does not have jurisdiction over Carey's development plans, even though the site falls within municipal limits. Instead, the board said that, in this case, territorial legislation has authority over municipal bylaws.

The board's decision allows Carey to mine within 100 metres of a residence, though the site must also include a 15-metre buffer along the Dome Road.

Council had previously sought a 60-metre buffer along the Dome Road.

This is not the first time a territorial government body has overturned a decision.

In April, the Yukon Environmental and Socio-economic Assessment Board recommended two competing projects – the Slinky Mine operations and a proposed subdivision on the Dome Road – not go ahead .

The government ignored that recommendation and gave both projects the green light, saying the government could work with both parties to achieve a desirable outcome.