Construction of Eagle Gold to start next year

Construction of what could be the territory's next hard-rock mine is set to begin early next year. John McConnell, president of Victoria Gold Corp., made the announcement at the annual Yukon Geoscience Forum this week.

Construction of what could be the territory’s next hard-rock mine is set to begin early next year.

John McConnell, president of Victoria Gold Corp., made the announcement at the annual Yukon Geoscience Forum this week. The junior mining company owns the Eagle Gold property, 50 kilometres north of Mayo.

Construction on the open-pit, valley-leach mine should take two years, he said. The company hopes to have it operating by 2015. Its goal is to produce more than 200,000 ounces of gold a year, at an average cost of less than $600 per ounce.

“This is a very robust project,” he said.

The site has 2.3 million ounces of gold in reserves. That puts the mine’s life at 10 years, but McConnell said he expects it will run for much longer. The area has 6.3 million ounces of gold, he said.

“I’m very confident that the mine will actually run for 25 to 30 years.”

The mine will create about 400 jobs in total, he said. Construction will require 600 employees, and production will require 200. These are rotating positions, he said.

Most of the work requires semi-skilled positions, like truck drivers and equipment operators, he said.

The company’s first priority is developing partnerships with the Nacho Nyak Dun First Nation, he said. The Eagle Gold mine sits on the First Nation’s traditional territory.

The company recently signed an agreement that ensures the First Nation will benefit from the mine, said McConnell.

“If we make a good profit, this mine, they’ll also enjoy part of that profit.”

Victoria Gold is also seeking to hire Yukon companies, when it can, as contractors, said McConnell.

It will cost about $400 million a year to construct the mine, and the company is “optimistic” about half of that money can be spent on northern businesses, he said.

And Victoria Gold wants to have as many of its employees live in the territory as possible. It already counts McConnell as one: he moved here in May.

“I think I’m probably the only CEO of a junior explorer in the Yukon that lives here full-time,” he said.

During operations, it will cost about $100 million a year, on average, to operate the mine. The company has been selling assets in Nevada and has about $65 to 70 million in cash or receivables.

Bank financing should be announced late this year, or early next year, said McConnell. While the feasibility study puts costs at $380 million, McConnell said he is telling potential investors the company is looking for just over $430 million.

The proposed mine has come a long way in a short time. Victoria Gold purchased the property in 2009 and began its environmental and socioeconomic review in 2010.

The permitting process in the Yukon is the best McConnell has ever experienced, he said.

The company plans to have completed its screening processes by the end of the year. It expects to have its quartz mining-licence by early next year.

Contact Meagan Gillmore at

mgillmore@yukon-news.com