Victoria Gold is hoping to have its Eagle gold mine up and running by the end of 2014, and that could leave Yukon Energy scrambling to find a way to power it.
Right now, the territorial power grid can put out about 430 gigawatt hours, and it’s already at capacity. Eagle will need an additional 100 gigawatt hours, and a year and a half isn’t a lot of time to find it, said Janet Patterson, a spokeswoman for Yukon Energy.
As far as she knows, the plan is still to hook the mine up to the power grid and the utility is searching for possible ways to cover the additional load.
“Nobody’s told us that they aren’t connecting,” she said. “We’re still in discussions with them on it, but there’s not been any power purchase agreement signed either.”
Possible solutions include using wind generation, finding ways to conserve energy, or more likely a combination of both.
“I guess we could just do nothing and just use more diesel, but that’s not something we’re interested in doing,” Patterson said.
“We’re looking at enhancing some of our hydro abilities, but again, this takes time. We’re looking at liquefied natural gas, which would be used in place of diesel. It’s cheaper. Arguably it’s cleaner. I’ve seen reports on both sides of the fence on that,” she said.
The Yukon government has said that it is looking at other options, including having the mine generate its own power on site.
That was news to Victoria Gold’s president and CEO, John McConnell, the last time he spoke to the News.
“No, it’s still our intention to tie into the grid. We’re actually not permitted to have our own power system, so we’re working very closely with Yukon Energy Corporation to tie into the grid and have them provide power,” McConnell said in an April 11 interview.
On Wednesday in the legislature, Klondike Liberal MLA Sandy Silver pointed out the apparent contradiction, and asked how the government plans to power the new mine.
In response, Energy minister Brad Cathers questioned the accuracy of McConnell’s comments while fending off Silver’s question and insisting the government and the company are looking at alternatives.
“I would encourage the member not to assume that every story in the newspaper is always correct … As far as them hooking up to the grid, that has not been determined to be the final option yet, and there has also been discussion between Yukon Energy Corporation and Victoria Gold, as well as the Department of Energy, Mines and Resources and Victoria Gold about the possibility of Victoria Gold choosing to generate its power onsite,” Cathers said.
Neither Cathers nor Victoria Gold returned calls for comment on this story. Cabinet communications spokesman Matthew Grant repeated Cathers’s insistence that other options are being looked at.
Stephen Mills, the chair of the Yukon Environmental and Socio-Economic Assessment Board, said that when the Eagle project was assessed, it was under the assumption that the mine would tie into the territorial power grid. If that changes, Victoria Gold would have to submit a new project proposal that covers the changes. However, that would not necessarily trigger an entire reassessment of the mine, Mills said.
Patterson said that, from the utility’s perspective, at this point it’s not clear whether the mine will tie into the grid or not.
“I think that’s probably part of the discussions. I don’t think there’s been any decision made one way or the other,” she said.
But even without Eagle, the utility still needs to find ways to sate the territory’s increasing power appetite.
“If you take Victoria Gold out of the picture altogether, the demand is still growing. Lots of new buildings are electrically heated. Whistle Bend will probably be electrically heated … that’s what we’re faced with,” said Patterson.
The Eagle gold mine is located 85 kilometres northeast of Mayo. It is expected to operate for eight years, but it could operate for far longer if the company keeps proving up new deposits.
Eagle has 2.3 million ounces of probable gold reserves and is expecting to produce around 212,000 ounces per year in its first five years.
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