When the Eagle gold mine achieves commercial production in the second quarter of this year, it will not only be Canada’s newest gold mine but the largest in Yukon history.
And with gold trading at its highest price in about seven years, the official start comes at an opportune time for Toronto-based Victoria Gold Corp. (TSX: VGCX), Eagle’s 100% owner and operator.
At about US$1,575 an ounce, the price of gold has increased by about 20% since Victoria Gold kicked off construction of the mine in the spring of 2018. Gold has risen by about 50% since the work began on further exploring and developing the project in 2009.
“You’ve got to have some luck in this business,” says John McConnell, Victoria Gold’s president and CEO since 2010.
McConnell says the company was also strategic about when it started building the project.
“We were keen to start construction in 2018 because there was a real lull in the construction business in Canada,” he says. “We knew there were bargains on equipment. We knew we’d be getting the A-teams for contractors, so productivity would be higher, and that worked out extremely well.”
McConnell says the company finished the $500 million project on budget and ahead of schedule — “and that was because of the timing.”
Annual gold production at Eagle, located approximately 375 km north of Whitehorse, is estimated at 210,000 ounces of gold per year at average all-in sustaining costs (AISCs) of less than US$800 per ounce. The reserve is 3.3 million ounces of gold and the mine life is 11 years.
Victoria Gold financed the project with financial backing from Orion Mine Finance and Osisko Gold Royalties (TSX: OR; NYSE: OR), and CAT Financial.
McConnell says Eagle was also made possible thanks to support from the community, including the local First Nation of Nacho Nyak Dun. The Eagle gold mine is located on the First Nation’s Traditional Territory, which covers 162,456 sq. km of land, in the Yukon and Northwest Territories.
In 2011, Victoria Gold signed a comprehensive co-operation and benefits agreement (CBA) with the First Nation of Nacho Nyak Dun, which set out support for mine development and ongoing exploration at Victoria’s Dublin Gulch property, where the Eagle gold mine is located.
“The First Nation community has been great to work with. They are very progressive-minded and now they are seeing the rewards of both employment and business opportunities from the mine,” says McConnell, who has more than 35 years of mining experience, mostly spent in Canada’s north. “One of the keys for us is always to maximize the benefit to the First Nation and then to the greater Yukon. We’ve been very successful with that.”
In full operation, the mine will employ 350 to 400 people, about 25% of whom will come from First Nations communities.
During the construction of the Eagle mine, McConnell says about $200 million in spending went to Yukon-based companies, or about 40%. More than 50% of the construction workers were from Yukon and about half of mine employees today are from the Territory. About 25% of staff, from engineers to mechanics and catering staff, are women, he says.
The mine, which poured its first gold in September 2019, will produce doré from a conventional open-pit operation with a three-stage crushing plant, in-valley heap leach and gold recovery plant.
“The mine has year-round road access to the site, and a fully operational 300-person all-season camp on site, is connected to Yukon Energy Corp’s (YEC) power grid and utilizes Air North scheduled flights between Whitehorse and Mayo,” McConnell says.
He says Eagle is poised to provide opportunities for its various stakeholders and become the latest mining success story in Canada’s North.
— The preceding Joint-Venture Article is PROMOTED CONTENT sponsored by Victoria Gold Corp. and produced in cooperation with The Northern Miner. Visit www.vitgoldcorp.com for more information.