Yukon’s Wellgreen platinum mining project hopes to become the first mining project in Canada powered by liquefied natural gas.
Wellgreen Platinum Inc. signed a memorandum of understanding with Ferus Natural Gas Fuels this month for the companies to work together to use LNG to power the project, located off the Alaska Highway north of Burwash Landing.
“It’s a first step towards looking at what the energy needs are for the Wellgreen project and the timing, and determining what is the best source of power, the best source of LNG,” said company president Greg Johnson in an interview last week.
“It also has the two companies working together to look at either expansion of their existing plant, or these alternate locations that could be closer to the Yukon and closer to our project.”
Ferus currently produces natural gas at a facility in Elmworth, Alberta.
But as part of this agreement, the company will look at other possible places where building a new liquefaction facility might make sense.
That could be either closer to the Yukon or in the Yukon, said Johnson.
The company has also signed an agreement with an Alaskan producer of liquefied natural gas.
That would give the project flexibility to have multiple suppliers and be able to choose to buy power in Canadian or American dollars, said Johnson.
LNG is catching on as a source of power for remote projects because it is relatively cheap compared to diesel.
The Northwest Territories Power Corporation currently ships LNG up the Dempster to its generators in Inuvik.
Here in Whitehorse, Yukon Energy is building a new LNG facility along Robert Service Way to cover Yukon’s increasing demand for peak and back-up power.
Lots of remote mining operations, too, are looking to natural gas for their power needs.
The massive proposed Casino copper mine near Carmacks hopes to build an LNG facility that would more than double the capacity of all power generation in the Yukon.
Wellgreen is currently working on its preliminary economic assessment, said Johnson.
After that, the next step will be to complete pre-feasibility and feasibility studies.
If all goes well, construction on the project could begin as early as 2017, said Johnson.
That’s the stage where power infrastructure on a large scale would be required.
“The company over the last two years has spent about $15 million drilling, engineering and doing metallurgical test work. We just released a major update on our resource estimate for the project, and that more than doubled the previous size of the resource from 2012.”
The mine, if it is built, “could be one of the largest producers of platinum/palladium in the First World,” said Johnson.
But that doesn’t mean it will be a mega-mine.
“The platinum market is a quite a bit smaller market than gold, so what might not be a really large mine for a gold mine can be a very large mine for platinum.”
The biggest demand for platinum is for catalytic converters in cars, said Johnson.
Most of the metal is produced in Russia and South Africa.
The Wellgreen site, which was mined briefly in the 1970s, is on the settlement land of the Kluane First Nation.
The First Nation has a co-operation agreement with Wellgreen that includes shares in the company, among other considerations.
“We have a really good working relationship with them, and the Kluane have been great to collaborate with as we have started to introduce our project to both the territorial regulators as well as the federal regulatory agencies,” said Johnson.
“We feel really good about going into this in terms of an approach working with the Kluane that is transparent with them and keeping them updated as the project is advancing.”
Contact Jacqueline Ronson at jronson@yukon-news.com