Yukon Zinc Corp. has laid off about half of the underground miners at the Wolverine mine.
The move comes in response to sharply falling prices for silver and zinc.
“After a thorough review of the market conditions and the company’s operation itself, we think this position is very responsible to the community, to the business and to the employees as well,” said Crystal Zhang, a spokesperson for the company.
Zinc has dropped from a high of about 87 US cents per pound earlier this month down to about 82 cents today.
Silver has dropped from around $22.50 per ounce to $18.50 in the same timeframe.
About 100 jobs have been lost in the Yukon, said Zhang.
The mine will continue to operate with a single shift per day, as opposed to the usual two.
Production will decrease by about 40 per cent.
The mill will run in two-week on, two-week off shifts.
Yukon Zinc will re-evaluate its financial position in 90 days, and if metal prices have rebounded, may resume full production at that time, said Zhang.
Victoria Gold Corp. has also announced layoffs in recent days.
Gold prices dropped from around $1,400 to around $1,200 per ounce this month.
The company took “a good general look at everything, and where we thought we could cut something, we’ve done that,” said president John McConnell.
About eight people were laid off, and two executives have voluntarily stepped down, he said.
None of the jobs were located in the Yukon, said McConnell.
The company’s Eagle gold mine is fully permitted, but construction has been delayed to at least 2014 because financing has yet to be secured.
But Victoria Gold remains in a good financial position, said McConnell.
It has recently received a $10 million payment for the 2012 sale of its Cove McCoy property.
The company currently has $33 million banked. It needs $430 million to build the Eagle mine.
“We could start building tomorrow,” said McConnell. “The problem is financing in the current environment. It is very difficult. It was difficult, and then we had a couple of hundred dollar per ounce drops in the price of gold, which makes it even more difficult.”
The company plans to spend about $10 million preparing the site this season, in anticipation of full construction beginning in 2014.
“Everything is still on track. We’re moving ahead and we’re leaving no stone unturned in terms of trying to find financing for the mine. We’re in discussions with numerous banks and numerous other mining companies. We recently returned from China, there’s lots of interest from there. So we will get it done.”
Mines Minister Brad Cathers has expressed concern at the recent downturn in mineral prices.
“Any time that we see any company make a reduction in its workforce that results in any Yukoners being laid off, that’s certainly something we’re concerned about and not happy to see.”
But he is confident that this is a short-term blip that will turn around, he said.
“We do see this as a situation where clearly those commodities are undervalued at this time, so we do expect that this overcorrection will be rectified and that the markets will rebound to a more accurate valuation of mineral and metal commodities.”
Contact Jacqueline Ronson at
jronson@yukon-news.com