Using Carcross as a transfer point to switch ore loads from truck to train makes a lot of sense, says the man proposing to reprocess tailings at the old Whitehorse Copper Mine.

And a $24,500 analysis commissioned by the Yukon's Department of Economic Development supports his theory.

Chuck Eaton of Eagle Industrial Metals said in an interview this week there would be several benefits to using the rail line from Carcross to tidewater at Skagway.

It would remove his 30 trucks a day from that 105-kilometre stretch of highway through some mountainous terrain to the port city, reducing the traffic congestion during the summertime RV season and lessening the risk of accidents, he pointed out.

He said hauling the two million tonnes of iron ore he expects to recover from the tailings over the next five years is a perfect way for the White Pass and Yukon Route to test the feasibility of getting back into the freight business, with little risk.

And the analysis agrees.

The track has already been brought up to standard for daily tourist traffic in the summer, and from what he understands, little would be required to make it freight-worthy, he explained.

Eaton said it's an opportunity to demonstrate the financial feasibility of the Carcross-Skagway link. That could entice other ore haulers to consider the same option, creating more revenue for everybody and removing more trucks from that section of highway, he said.

The Minto Mine, for instance, could become interested, and there are other mining projects on the drawing board which are looking to Skagway as the obvious link to overseas markets, he said.

Furthermore, Eaton said, proving the feasibility of the Carcross-Skagway haul may open the door for White Pass to look closer at restoring the line to Whitehorse, and maybe even beyond if some bigger mining proposals go forward.

Service between the two cities ended in 1982 after the Faro-lead zinc mine, which had used the train to carry concentrates to Skagway, began a four-year shutdown.

"I think it makes sense, a lot of sense for everybody,” Eaton said. "I know for sure the railroad seems to be interested, the Yukon government seems to be interested and I'm interested.”

It would be most beneficial to have a decision soon, he added. He is in discussions with two trucking companies to provide the ore haul during the eight or nine months of operations every year, for the next five or six years beginning in 2013.

Having a decision on the rail option would influence what type of gear the trucking company would require, said Eaton, who was meeting today with representatives from White Pass.

The proposal to reprocess 10 million tonnes of tailings at the Whitehorse Copper site and remove an estimated 1.9 million tonnes of iron ore is currently under review by the Yukon Environmental and Socio-economic Assessment Board (YESAB). A recommendation out of the board's Whitehorse office is

expected any day.

Once the iron ore is removed, the intent is to lay the remaining tailings back down in a somewhat more stable way so the 68-hectare former mine site, closed in 1982, would be more useable for industrial lots than it is now.

Eaton said Eagle Industrial is expecting to file its application for a Type A water licence this week.

If the company is able to secure the licence by the end of the year, reprocessing the tailings is expected to begin next spring, he said.

As the self-described owner and janitor of Eagle Industrial who's put up almost $1 million advancing the proposal, Eaton said raising the $5 million or $6 million to get the operation up and running is not an issue.

The company has already leased the land from the Yukon government, and Eaton said he's not expecting red flags coming out of YESAB.

Reprocessing the tailings is not a complicated operation and does not require an elaborate set-up, he told 40-plus people who attended a public open house this week.

In an interview afterward, Eaton said Eagle Industrial is currently talking with the trucking companies about using a heavy hauler with side-dumping capabilities, similar to the trucks the Minto Mine is using to move its concentrate to Skagway.

If the rail option comes about in time, he said, the company would switch its view to a container-style of load so that the container could be loaded onto flatbed rail cars in Carcross.

In the cost benefit analysis prepared for the Yukon government and published in March, the evidence indicates an ore haul from Carcross to Skagway is financially viable.

Furthermore, it indicates the benefit of reinstating the entire ore haul to Whitehorse would have even greater returns, though the analysis does not include the cost of track restoration between Whitehorse and Carcross.

"This report demonstrates that rail operating costs offer a substantial savings below truck costs,” says the 22-page analysis by a Whitehorse consulting firm.

Trucking the magnetite iron-ore from the Whitehorse Copper site 24-7 for up to nine months a year, would cost $21.12 per tonne, the analysis concludes.

The analysis says the cost of trucking the material to Carcross, along with the additional handling cost to transfer it to rail, would be $16.91 per tonne, representing a saving of $4.21 per tonne or 20 per cent.

Moving the ore from Whitehorse, without the cost of track restoration figured in, would be $9.79 a tonne, a savings of $11.33 or 54 per cent over trucking.

The cost of track restoration is not included in the analysis, nor is the added benefit of reducing highway traffic for safety and maintenance purposes, as well as the added environmental benefits through reduced CO2 emissions.

Transport by rail, said Eaton, is a huge benefit.

There may be an opportunity for some sort of private-public investment to encourage more rail use, given the benefits are widespread and not limited to one party, he suggested.

The four scenarios discussed include a single train set running at night opposite to the tourist schedule.

Another plan envisions two sets of cars, one being unloaded in the morning in Skagway, the other being loaded in the evening at Carcross, with the same variables applied to a link from Skagway all the way through to Whitehorse.

Above all, says the report, it is fundamentally important the freight haul does not displace a single hair on the company's successful tourist train activity – and it doesn't.

The analysis said White Pass could purchase the required stock of rail cars with little or nor risk, given the resale of rail cars after five years.

The 375,000 tonnes per year that Eagle Industries is proposing to move by rail amount to 75 per cent of the volume of ore being moved from Whitehorse to Skagway before the 1982 Faro mine shutdown, the analysis points out.

It also notes the opportunity for some arrangement whereby the savings realized by Eagle Industries could be shared with White Pass.

"It is generally agreed that WPYR has capacity to reintegrate freight with passenger operations and that there are viable options for which current financial success is not at risk,” says the analysis.

It also points out its findings encompass the results of meetings with senior representatives from all private sector parties: Eagle Industrial, White Pass and trucking companies.