Chuck Eaton’s plan to reclaim magnetite from the old Whitehorse Copper tailings has hit a serious snag.
Eaton’s Eagle Industrial Minerals Corp. wants to begin mining the old iron-rich tailings for magnetite, and ship that ore south to Skagway. The plan has all the necessary environmental permits and been given a green light by the Yukon government.
But the operation hinges on shipping ore from the Skagway ore terminal to international markets, and negotiations with the Alaska Industrial Development and Export Authority, which owns the terminal, have run aground.
“If we don’t have a terminal, we don’t have a project,” Eaton said.
The existing terminal isn’t large enough to meet Eagle’s needs, Eaton said, so he has been negotiating with the export authority to expand it.
“The deal that we have been talking about for a couple of years with AIDEA, is that since ours is a fairly short-term project, we would borrow the money to build the building, and then repay part of that over the short term of our project,” Eaton said.
Eagle shouldn’t be expected to pay the full cost of the expansion, said Eaton, because the project is only slated for a five-year production run. The building will last upwards of 50 years, giving the export authority decades to make money from other mines wanting to ship from Skagway, Eaton said.
In August, the export authority announced plans for a $7.5-million expansion of the terminal, including extending the ore storage facility, building more truck loading bays and a covered stockpile area.
Under that plan, Eagle would help pay back the cost of the building with lease payments over the five-year life of the magnetite project.
At the time, AIDEA spokesman Karston Rodvik said the deal had been two years in the making, and that it just needed to be finalized.
But now the problem, Eaton said, is that suddenly AIDEA is being unreasonable in its negotiation demands.
“They have insisted not only that we pay for 100 per cent of the building, and that we pay for it in a four-year period, but to make it even worse they’ve front-end loaded the payments so that we pay two-thirds of the amount in the first two years and the other third in the next two years,” he said.
Rodvik declined to comment, other than to issue a one-line email that stated: “It is not accurate for Mr. Eaton to describe our negotiations as ‘broken down.’ We recently provided him with more information and are awaiting his response.”
Eaton thinks that AIDEA has lost sight of its job.
“They are doing this because they are so risk-averse, and we think they have lost track of their purported primary goal, which is to promote economic exports from Alaska. We think they are now just so focused on risk mitigation that they demand crazy things,” he said.
Eagle will keep trying to negotiate with AIDEA, Eaton said, but his hopes are not high.
There is one other option. Eagle Minerals could find a way to build its own facility and load ore without using the Skagway ore terminal itself. That would be more expensive, but it would give Eagle the power to charge other mines for the use of the facility into the future.
“We would build our own building and ship loader. We’d have a nice, permanent building that other potential miners like Western Copper could use. We’d be doing what AIDEA should be doing,” Eaton said.
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