Yellowknife residents have voted against a city bid to harness geothermal heat from a former gold mine.

Voters were asked in a referendum if they supported the City of Yellowknife borrowing up to $49 million for the Con Mine project — a district energy system that would distribute heat from the old underground mine to offices, apartments, schools and other buildings downtown.

After polls closed at 7 p.m. MT on Monday, 35 per cent of eligible residents who cast ballots over nine hours voted 1,362-997 against the loan, according to the city's website.

Con Mine produced five million ounces of gold from 1938 to 2003. Reports have found the mine's high temperatures, which exceed 30 C, and its location directly below the city would make it a prime source of geothermal energy.

The city had sought public permission to borrow the money to finance its capital investment in the project. Officials had said if residents voted against the loan, the city might have to abandon the plan altogether.

The federal government is offering Yellowknife a $14-million grant under its Clean Energy Fund for the Con Mine project.

Subject of debate

The referendum has generated much debate in the past few weeks, with some residents expressing concern that the project may not be economically viable.

Others joined a "Yes We Con" campaign in support of the geothermal plan, which they argued could provide a clean and affordable source of energy.

"Apart from who falls on what side of the issue, it's been fantastic to see the amount that the community has been engaged in this issue," Coun. Mark Heyck told CBC News.

"I've never seen this much … discussion generated by one issue before."

Mayor Gordon Van Tighem had said the loan would also be used as leverage to negotiate with private investors and ensure the city has a say in consumers' rates.

At least three major utility companies have expressed interest in the geothermal project, according to Van Tighem.