Chieftain touts feasibility study, ignores opposition

Conservationists dismissed Chieftain Metals Inc.'s recently-released feasibility study for its proposed underground mine near Atlin, B.C.

Conservationists dismissed Chieftain Metals Inc.‘s recently-released feasibility study for its proposed underground mine near Atlin, B.C.

It shows just how unviable the Tulsequah Chief project is, said Chris Zimmer of Rivers Without Borders this week.

The project has “robust economics,” Victor Wyprysky, company president, said in a press release last month.

The study proves the opposite, said Zimmer.

The company estimates its mine would process 2,000 tonnes of zinc, copper, lead, gold and silver ore a day. It plans to ship the ore to Skagway, Alaska. But the amount of reserves, estimated at 64.5 million tonnes, is listed as “probable.”

“That’s not a ringing endorsement for the mine here,” said Zimmer. Most mines at this stage list their reserves as proven, he said.

It would cost nearly $440 million to get the mine to production. An estimated $64 million would be needed to keep it running over its nine-year mine life. At its peak, the mine would have 267 workers, including contract staff. Chieftain hopes to have enough money to start building this spring, and to start production near the end of 2015.

With a post-tax return on investment listed at just under 15 per cent, investors don’t stand to gain a lot from the project, said Zimmer. This is based on current metal prices.

“Even their own numbers show it is barely economic and is incredibly sensitive to changes,” he said, adding that any change to the company’s “rosy assumptions” could send them into the negative.

But what the report omits is more troubling, he said.

Its section about the company’s relationship with the Taku River Tlingit First Nation, whose traditional territory the mine sits on, is “appalling,” said Zimmer.

Right now, there is a Letter of Understanding between the company and the First Nation. The company will continue to “work meaningfully” to complete a future agreement with the First Nation, the report says.

But striking such an agreement seems unlikely. In November, the First Nation formally opposed the project as currently proposed.

The First Nation says the benefits agreement offered by the company isn’t on par with similar deals across the country. The First Nation says it intends to “take all necessary steps to ensure that the Tulsequah Chief project, as currently proposed, is not developed on Taku River Tlingit Territory.”

“I think the fact that the Tlingit oppose the damn thing is a clear indicator that they’re not anywhere close to signing an impacts and benefits agreement, and that is something that could really, really hold up the project,” said Zimmer. “And I think with the growing Idle No More movement and other issues that the First Nations are bringing up, for Chieftain just to ignore the Taku River Tlingit here, I think it’s insulting. It’s arrogant, it’s a real flaw here. I can’t see how they can ignore this opposition and simply conclude that the TRT are all of sudden going to come around and sign an agreement.”

The First Nation also has concerns about how acid run-off from old mine sites would impact the salmon living in the nearby Taku River. Commercial and subsistence fisheries operate from May to October.

In June, the company shut down the water treatment plant it opened in late 2011. Costs were four times higher than originally estimated. It has not said when the plant will re-open.

Since then, the company has been in a state of non-compliance with its permit under the Environmental Management Act. The company is submitting water quality reports to the government, the B.C. Ministry of Environment confirmed this week.

The water treatment plant is only clearly mentioned once in the report, said Zimmer.

The First Nation did not respond to interview requests before deadline. And Chieftain has yet to issue a statement about the First Nation’s opposition to its project.

The company still needs to build a 128-kilometre road from the end of Warm Bay Road, south of Atlin, B.C., to the mine site. The company has all the permits it needs to build the road, the B.C. Ministry of Forests, Lands and Natural Resource Operations, said this week.

Wyprysky declined to answer any questions when reached for comment this week.

The First Nation has also expressed concerns about how the road would impact caribou in its traditional territory, and that the road would not be decommissioned.

Chieftain plans to decommission the road as part of its cleanup work, the report says. It also plans to conduct regular water testing for 10 years after the mine closes.

But even if Chieftain had local support, finding customers may be hard. There’s too much arsenic in the copper at the site to sell it to China, so the company will have to look to ship the product to India, Europe or the Far East, the study says.

“If you don’t have buyers for your product, I don’t know how you can say your mine is feasible. It just doesn’t make any sense,” said Zimmer.

Rivers Without Borders is working on a more detailed report about the feasibility study, he said.

Contact Meagan Gillmore at

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Whitehorse and Carcross will be among seven northern communities to have unlimited internet options beginning Dec. 1. (Yukon News file)
Unlimited internet for some available Dec. 1

Whitehorse and Carcross will be among seven northern communities to have unlimited… Continue reading

Willow Brewster, a paramedic helping in the COVID-19 drive-thru testing centre, holds a swab used for the COVID-19 test moments before conducting a test with it on Nov. 24. (Crystal Schick/Yukon News)
An inside look at the COVID-19 drive-thru testing centre

As the active COVID-19 case count grew last week, so too did… Continue reading

Conservation officers search for a black bear in the Riverdale area in Whitehorse on Sept. 17. The Department of Environment intends to purchase 20 semi-automatic AR-10 rifles, despite the inclusion of the weapons in a recently released ban introduced by the federal government, for peace officers, such as conservation officers. (Crystal Schick/Yukon News file)
Environment Minister defends purchase of AR-10 rifles for conservation officers

The federal list of banned firearms includes an exception for peace officers

Yukonomist Keith Halliday
Yukonomist: The K-shaped economic recovery and what Yukoners can do about it

It looks like COVID-19 will play the role of Grinch this holiday… Continue reading

Black Press Media and BraveFace have come together to support children facing life-threatening conditions. Net proceeds from these washable, reusable, three-layer masks go to Make-A-Wish Foundation BC & Yukon.
Put on a BraveFace: Help make children’s wishes come true

Black Press Media, BraveFace host mask fundraiser for Make-A-Wish Foundation

Colin McDowell, the director of land management for the Yukon government, pulls lottery tickets at random during a Whistle Bend property lottery in Whitehorse on Sept. 9, 2019. A large amount of lots are becoming available via lottery in Whistle Bend as the neighbourhood enters phase five of development. (Crystal Schick/Yukon News file)
Lottery for more than 250 new Whistle Bend lots planned for January 2021

Eight commercial lots are being tendered in additional to residential plots

The Government of Yukon Main Administration Building in Whitehorse on Aug. 21. The Canada Border Services Agency announced Nov. 26 that they have laid charges against six people, including one Government of Yukon employee, connected to immigration fraud that involved forged Yukon government documents. (Crystal Schick/Yukon News file)
Charges laid in immigration fraud scheme, warrant out for former Yukon government employee

Permanent residency applications were submitted with fake Yukon government documents

Whitehorse City Hall. (Joel Krahn/Yukon News file)
City hall, briefly

A look at decisions made by Whitehorse city council this week

Karen Wenkebach has been appointed as a judge for the Yukon Supreme Court. (Yukon News file)
New justice appointed

Karen Wenckebach has been appointed as a judge for the Supreme Court… Continue reading

Catherine Constable, the city’s manager of legislative services, speaks at a council and senior management (CASM) meeting about CASM policy in Whitehorse on June 13, 2019. Constable highlighted research showing many municipalities require a lengthy notice period before a delegate can be added to the agenda of a council meeting. Under the current Whitehorse procedures bylaw, residents wanting to register as delegates are asked to do so by 11 a.m. on the Friday ahead of the council meeting. (Crystal Schick/Yukon News file)
Changes continue to be contemplated for procedures bylaw

Registration deadline may be altered for delegates

Cody Pederson of the CA Storm walks around LJ’s Sabres player Clay Plume during the ‘A’ division final of the 2019 Yukon Native Hockey Tournament. The 2021 Yukon Native Hockey Tournament, scheduled for March 25 to 28 in Whitehorse next year, was officially cancelled on Nov. 24 in a press release from organizers. (John Hopkins-Hill/Yukon News file)
2021 Yukon Native Hockey Tournament cancelled

The 2021 Yukon Native Hockey Tournament, scheduled for March 25 to 28… Continue reading

Lev Dolgachov/123rf
The Yukon’s Information and Privacy Commissioner stressed the need to safeguard personal information while shopping this holiday season in a press release on Nov. 24.
Information and Privacy Commissioner issues reminder about shopping

The Yukon’s Information and Privacy Commissioner Diane McLeod-McKay stressed the need to… Continue reading

Most Read