Yukon's Wolverine Mine shutting down due to falling resource prices
Yukon Zinc says Wolverine Mine's fate awaits financial review by Chinese owners
The Wolverine Mine, located north of Watson Lake, Yukon, is shutting down for several months — at least — because of low metal prices, according to a letter sent to suppliers by the company.
Wolverine, which produces zinc, is one of only two operating mines in the territory. The mayor of Watson Lake expects the closure to have a huge impact on the community of about 800 people.
"Suppliers in town do feed a substantial amount of resources to the mine to keep it going," says Mayor Richard Durocher. "But also the employees... I don't have exact numbers, but I anticipate it will affect between 40 to 50 people."
The Yukon Zinc Corporation, the owner of the Wolverine Mine, has not released any information to the public about the shutdown.
A letter to suppliers from the company's chairman and chief executive officer, Jingyou Lu, says low metal prices have "significantly" affected the company's revenues. He says the mine will be shut down for two to three months, but suggests it could last longer than that.
Jingyou says the operation will enter into a "care and maintenance" phase and layoffs have begun.
The mine is about 280 kilometres northeast of Whitehorse, and about 190 kilometres north of Watson Lake by road.
There's also no word from the company yet on how many people will be laid off.
Once had 300 workers
When Wolverine went into full production in March of 2013, there were more than 300 people working at the mine, but it temporarily laid off about 100 workers several months later because of low metal prices. Some of those workers were recalled in September 2013.
Jingyou says Yukon Zinc does not have enough cash on hand to continue operations given the low prices. He says it's waiting for its majority owner, a Chinese state-owned company, to complete a review of Yukon Zinc's situation.
Jingyou says it has enough money to pay all outstanding debts and promises the suppliers to have an update by Feb. 16.
News of the closure comes as the Mineral Exploration Roundup begins in Vancouver. None of the Yukon government ministers at the annual exploration conference have commented on the shutdown.
Jim Tredger, an opposition MLA representing the territorial NDP, says the closure is a blow to the Yukon and to the government's credibility.
"It's in direct contrast to the grand statements the premier is making about how wonderful our economy is and how wonderful it is for the mining community.
"The investors are definitely getting a mixed message."