After years of shutdowns and layoffs in B.C.'s forest industry, Kitimat is bracing for a major economic blow, but there is a glimmer of hope for another mill town.

More than 500 people will be out of work when the West Fraser Eurocan paper mill in Kitimat closes permanently on Sunday, and that prospect is affecting everyone in the North Coast town.

While families in Kitimat deal with their bad news, there is faint hope for some workers in Mackenzie, north of Prince George, where an Asian company is said to be considering buying and reopening a shuttered mill.

In Kitimat, West Fraser Timber Co. announced the closure in October, blaming the strong Canadian dollar, declining pulp supply and falling prices for making the operation unfeasible. The 40-year-old mill produces linerboard and kraft paper, used for cardboard boxes and packaging.

'At a stroke of a pen, West Fraser took about $350 million out of the revenue for our houses if we want to sell.'—Kitimat Mayor Joanne Monaghan

Joanne Monaghan, mayor of the town of about 9,000 people, expects thousands of other jobs will be lost as the layoffs ripple through the local economy, affecting everyone from truck drivers to teachers and store clerks.

"It's a domino effect," Monaghan told CBC News, "We extrapolated, and it's anywhere from 2,000 to 3,000 [jobs in peril]."

The mayor said the Eurocan closure has also slashed the value of homes in Kitimat and nearby communities including Terrace, Thornhill and Kitimaat Village.

"At a stroke of a pen, West Fraser took about $350 million out of the revenue for our houses if we want to sell," said Monaghan, who estimates her home lost 30 per cent of its market value with the news of the closure.

Officials in Kitimat are still holding out hope that the union may be able to buy the Eurocan mill and keep it open.

But Shawn Allan, senior pastor at the Mountainview Alliance Church where many Eurocan workers worship, says people are anxious and upset.

"There are families who have lived here their whole lives. Their friends are here, everybody they know and everything they know is here, and now that's gone," said Allan. He is urging them to plan for a better future, despite the setback.

"We need to be a community that says we will not let industry or money or the economy tell us what kind of community we're going to be," he said.

Mackenzie mill hopes rise

In Mackenzie, four mills have closed in recent years, leading to staggering job losses. But B.C.'s minister of forests, Pat Bell, says one of Asia's biggest pulp companies is showing interest in one of Mackenzie's mothballed pulp mills.

The Indonesian firm Sinar Mas, already running a Canadian mill in Saskatchewan, is considering taking over the former Pope & Talbot mill, according to Bell.

"This company certainly has the capacity to purchase this mill. They seem to have a sincere interest. We're hopeful the project will move," Bell said. "But it has been such a long and emotional ride that all of us understand there are so many hoops to jump through. The deal may or may not come to fruition."

The company is currently conducting due diligence and Bell says he'll likely know more within 45 days.

The provincial government took over the mothballed Pope & Talbot mill last winter over concerns that tanks and pipes holding toxic chemicals could freeze and rupture if the unpaid workers walked off the job. Last summer, a Chinese company showed interest in the mill, but that deal fell through.