Western Copper bets on Casino

Western Copper Corporation will pour $5 million into proving up its Casino property this year. If a mine is ever built at the massive, low-grade copper deposit found 300 kilometres northwest of Whitehorse, the economic reverberations would be huge.

Western Copper Corporation will pour $5 million into proving up its Casino property this year.

If a mine is ever built at the massive, low-grade copper deposit found 300 kilometres northwest of Whitehorse, the economic reverberations would be huge.

The property is believed to contain close to 2 million tonnes of copper, along with deposits of gold and molybdenum.

Construction of an open-pit mine would cost $2.1 billion and require an influx of Outside labour into the territory, creating a peak of 1,400 jobs.

Once in production, the mine would create as many as 650 jobs. And provided that metal prices remain strong, those jobs could last a long time. The mine is expected to have a 30-year lifespan.

When the Conference Board of Canada released an economic forecast for the Yukon in January, it said Casino could provide “huge upside potential” to already rosy growth projections for the territory.

“To put this in perspective, in 2008 only 380 people were employed in mining in Yukon,” the report states.

Currently, Minto is the only operating hardrock mine in the territory. That’s expected to change this year, with both Yukon Zinc Corporation’s Wolverine project and Alexco Resource’s Bellekeno mine poised to begin production.

But, the Conference Board notes, “even after Wolverine reaches production levels in 2011, there will still be fewer than 650 people working in Yukon’s mining industry.

“The Casino project would obviously provide a significant boost to construction and mining output, and that would have spillover effects throughout the entire economy. Furthermore, it is unlikely that the labour requirements during the construction phase could be met solely by the territory’s current labour force. As such, migration … would be temporarily higher than currently forecast.”

That’s all assuming Casino opens. And that could be assuming a lot.

Whoever builds Casino will need deep pockets. That’s something that Western Copper, a Vancouver-based mining junior with $11.8 million in cash, doesn’t have.

This means that the company will either have to find a partner that does have deep pockets, or, as more frequently happens in these situations, a major mining company will buy them out.

But that’s not the immediate concern of Paul West-Sells, Western Copper’s chief operating officer. Right now he’s focussed on firming up the project’s resources.

Drilling is already underway at the project’s camp, which will employ a peak of 50 workers this summer. The company hopes to drill another 15,000 metres of core samples this season, building on 11,000 metres drilled last season.

Another $5 million will be spent on producing an updated pre-feasibility study. The company hopes to submit a project proposal to Yukon’s regulators by early 2011.

This work should help sell Casino to investors. But West-Sells will also have to sell the project to the public. Here, he faces an obstacle that could be called the heap-leach heebie-jeebies.

Western Copper’s other Yukon project, near Carmacks, recently had a rough ride through hearings of the Yukon Water Board because of the controversial method it proposes to separate copper from rock.

Rather than build a costly mill, the company wants to stack massive piles of rock and then douse the mounds with sulphuric acid. Conservationists and First Nations worry this could result in chemical spills harmful to spawning salmon and other wildlife.

And it just so happens the company also plans to use a heap-leach during the first few years of production at Casino.

But West-Sells says these plans ought to be less controversial. That’s because the company only plans to use a heap-leach to separate gold from rock at Casino, rather than copper.

Gold heap-leaches use cyanide, rather than sulphuric acid, to separate metal from rock.

“It’s more similar to Brewery Creek,” he said, referring to a mine near Dawson City that operated from 1997 to 2001, using a gold heap-leach. “It’s basically an identical process.”

There’s also the question of what happens to Western Copper, and Casino, if the Carmacks project fails to clear Yukon’s regulatory system. West-Sells says one project is not dependent on the other, but it will doubtless be easier for Western Copper to raise money if it has one operating mine, rather than one project stuck in the mud.

A mine as big as Casino would require far more electricity than Yukon’s already-stretched power grid could provide. It’s expected to need a whopping 100 megawatts. By comparison, Yukon Energy’s total generating capacity is 124 megawatts.

So Casino is expected to run on liquified natural gas. That’s a change from earlier plans to power the mine with coal gasification.

Concentrate would be hauled from the mine to Skagway’s port. An access road would connect the mine to Freegold Road, which in turn connects to the Klondike Highway near Carmacks.

Earlier plans proposed to put an access road near Burwash Landing to allow a trucking route to Haines, Alaska.

If all goes smoothly, the company envisions construction starting in 2013 and production in 2015.

Western Copper plans to hold community meetings this summer and autumn in Whitehorse, Carmacks, Pelly Crossing and Dawson City.

Contact John Thompson at