Yukon’s economy will rebound, conference board report predicts

The Conference Board of Canada has forecast a recovery in Yukon's mining industry in 2014. The board released its fall territorial outlook this week. While Yukon's gross domestic product will grow by a measly 0.

The Conference Board of Canada has forecast a recovery in Yukon’s mining industry in 2014.

The board released its fall territorial outlook this week.

While Yukon’s gross domestic product will grow by a measly 0.6 per cent this year, growth will leap to 5.7 per cent in 2014, the report predicts.

SDLqBusiness conditions in Canada’s northern territories have changed over the past two years,” wrote the authors of the report. “A once-thriving mining sector is now re-evaluating development and exploration plans as commodity prices and difficulty in obtaining financing pose challenges to the development of new mines.

“Although there are never complete guarantees that a mining project will proceed, favourable long-term global demand conditions for metals suggest that the potential for mining in Canada is bright over the next decade, particularly in the North.”

The report’s prediction is less optimistic than the Yukon government’s own economic analysts have forecast. Earlier this month the territory released its economic outlook, predicting 8.8 per cent growth in 2014.

Still, the conference board’s rosy forecast depends on several mining projects going forward under ambitious timelines.

The estimate counts on two new mines beginning construction next year.

Victoria Gold’s Eagle Gold mine has all of its permits in place, but needs to raise $430 million in capital before construction can begin.

Construction was previously predicted to begin in 2013, but the company pushed back to 2014 because of poor market conditions for financing.

The board’s report also assumes that construction will begin on Copper North’s Carmacks mine next year.

“Copper North is now awaiting Yukon Environmental and Socio-Economic Assessment Board (YESAB) approval and its water use licence, which is expected by early 2014,” according to the report. “Construction is scheduled to start in 2014, and mining operations are scheduled to start in 2016.”

But Copper North has not yet submitted a proposal to YESAB, and regulatory approval for a hard-rock mine typically takes at least two years.

The report also indicates that Eagle Industrial Minerals will begin producing magnetite from tailings at the former Whitehorse Copper mine in 2014. But that project has been stalled because of difficulty reaching an agreement with Alaska’s export authority to ship the ore out of Skagway.

Unless a solution is reached, that project could be derailed completely.

Earlier this year, the Conference Board of Canada predicted that mineral production in Yukon would grow in 2013, resulting in 6.3 per cent GDP growth.

Contact Jacqueline Ronson at jronson@yukon-news.com