The town council in Dawson City, Yukon, has called a special meeting for Friday to discuss whether mining should be allowed in the middle of residential developments.

The debate has surfaced after Whitehorse gold placer miner Darrell Carey applied to renew his licences to mine claims he has on the Midnight Sun Dome.

But people living in that area say Carey's plans — and the potenial for more interest in placer mining on existing claims — would disrupt their neighbourhood, especially if the Dome Road is reconfigured to make way for more mining.

"It's not really conducive to having a mining operation using it. The people in the community really do use the Dome Road, not only to get up to their homes on the Dome, but it's also a recreation area," resident Glenda Bolt told CBC News.

"It's just a big safety issue with dust, vibration, rock runoff."

This week, the Yukon Environmental and Socio-Economic Assessment Board has recommended against allowing more residential lots to be developed in the Dome area because it would interfere with existing mining claims.

The Yukon government had wanted to create 14 new lots on top of several existing claims, but the board said doing so would be unfair to the owners of those claims.

The issue of mining operations within Dawson City's boundaries has existed for years, but only flared up now that gold prices are rising and old claims have suddenly become attractive, resident Shirley Pennell said.

"Well, it's been smouldering for a number of years, and everybody just said 'Well, it's not troubling us right now so we won't worry about it.' But now it's caught on fire and this fire has become a blaze," Pennell said.

Pennell said various levels of government should have dealt with the issue years ago.

Carey's wife, Michelle, told CBC News that her husband's mining plans in Dawson City have been blown out of proportion.

Carey's application is simply to renew work he has been doing for more than a decade, his wife said, adding that he would need to get approvals from the town if his operations were about to disrupt residents.