Chuck Eaton says his proposal to reclaim tailings at the former Whitehorse Copper Mine is sound any way you look at it.

From financial, environmental and land use perspectives, the project is a winner, the owner of Eagle Industrial Metals told a small gathering at the Mount Sima Ski Chalet Tuesday night.

Eaton said even if he only recycled the tailings to remove the magnetite, an iron ore, and put them back where they came from, the company would be able to improve drainage bya re-contouring of the area and re-vegetating.

His preference, however, is to place them in the Little Chief Pit, the open pit which supplied the mine's ore for its first five years until the operation moved underground in 1972.

Relocating the tailings, Eaton said during his presentation, would result in 69 hectares – 170 acres – being returned to a somewhat natural state.

The California businessman pointed out the main tailings pond of 50 hectares is currently zoned for industrial use, but isn't useable for much.

Two smaller areas of tailings currently occupy adjoining valleys which could be returned to green space, he said.

Eaton said he is currently spending "several hundred thousand dollars” to explore the different reclamation options with the intention of finalizing a project proposal for submission to the Yukon Environmental Socio-economic Assessment Board in the next month or two.

"The big question is where else can we put those tailings so that the area that was covered up originally can be useful again?”

Examining the options, he said, has been the company's focus for the last couple of months, and will continue to be for the next couple of months.

Eaton said coming up with the $6 million or $7 million in capital required for the project is not an issue for his company.

Nor does he need a mining licence because it's not a mine, and he has already entered into a lease for the land with the Yukon government.

The Whitehorse Copper Mine closed in 1982. Over the next decade, the federal government finally approved the reclamation of the site and allowed the mining company to eventually walk away.

Eagle Industrial Metals is hoping to begin its re-processing initiative in 2012, he said. The project would take six or seven years, with operations going six or seven months a year when there's no snow.

Eaton explained there are approximately 9.7 million tons of tailings at the Whitehorse Copper site, two million tons of it magnetite.

The intent is to remove the iron ore product, truck it to Skagway and then ship it overseas to smelters in Asia, most likely China, he said.

The tailings, he emphasized, are currently in a stable, non-toxic state, and processing them to remove the magnetic material will not change that.

Eaton said under his basic reclamation plan – to process the tailings and put them back in the existing locations – there is no requirement for any government financing.

But there was some discussion at Tuesday morning's business meeting hosted by the Whitehorse Chamber of Commerce regarding the possibility of government involvement if there are incremental costs associated with a more advanced project, he said.

Chamber president Rick Karp said this morning the business community is excited about the proposal and its potential.

The natural gas pipeline people are very interested about the possibility of restoring 50 hectares of industrial property to a useable state, he said.

Karp said while the Whitehorse Copper project is not able on its own to support reviving the railway between Skagway and Whitehorse, it does add to the equation when taken with other mining initiatives going forward in the Yukon. And that gives rise to huge promise for the tourism industry, he said.

"We have been meeting with him for the last couple of weeks and we are very pleased with the project,” Karp said.

"This is a site of approximately 170 acres that really is a blot on Whitehorse.

"You can even see it when you fly in,” he said. "We think it is sound and it is going to clean up that area.

"There is no problem with the tailings right now in terms of being toxic, but it does not look good and you can't use it.”

Eaton said there are issues of dust in the summer months when the tailings dry out and the wind starts to blow.

There are also some safety issues at a couple of sites where the underground workings have caved in which could be filled in with the tailings, he said.

Eaton told the gathering his company is currently involved in projects in Alaska, Vancouver Island, Utah and New Mexico.

He is not concerned about any major threat to the world price for iron ore that may compromise the project.

In any case, it was pointed out, Eagle Industrial Metals would be required to put up the standard reclamation bond to ensure there's enough money in the kitty at any point in the project to return the area to an acceptable condition.

Eaton said in addition to exploring different reclamation options, the company is examining other issues such as how to address additional truck traffic.

Under the general proposal, Eaton explained, Eagle Industrial is planning on a full-time seasonal staff of 20 to 25 at the mine site.

The existing tailings would be mixed with water and turned into a slurry which would be pumped over large magnets to remove the magnetite, a magnetic mineral, he said.

Approximately 1,500 tons a day would be shipped to Skagway at a rate of about 30 truck loads per day.