Silver shines on Elsa mines
by Adam Killick - News Reporter
United Keno Hill is one step closer to re-opening its silver mines at Elsa.
They closed in 1989, thanks to low silver prices and nine straight years of losses.
But now, thanks to a proposed joint venture agreement with Toronto-based Dynatec
Corp., the company is getting ready to operate the mines north of Mayo by the end of
this year.
It owns several properties around Elsa and Keno City.
Under the agreement, Dynatec will provide or arrange for $11 million in working
capital to restart commercial production at the mines.
That's about half the amount United Keno needs, said Penny Lipsett, a spokesperson
for Dynatec.
It will also help United Keno Hill secure the rest of the pre-production capital,
she said.
In return, Dynatec will get stock options and will buy $1.5 million in common shares,
which amounts to less than 10 per cent ownership.
It will also operate the mines, said Lipsett.
She expects many of the 100 or so people hired to work at the mines to be locals.
Dynatec just finished working the Shebandowan mine near Thunder Bay, Ontario, so
some of the equipment and workers will come from there, she said.
United Keno Hill secured its water licence and other regulatory approvals last fall
and in January.
The joint-venture agreement still has to be negotiated and has to pass muster with the
Ontario Securities Commission.
But she's confident the deal will go through.
"You don't make the kind of announcement we're doing if you're second-guessing," she
said.
Yukon Chamber of Mines director Dave Austin was pleased with the news.
"Anything that will open up a mine here is good," he said, adding he's sure Dynatec will
offer work to local mining contractors.
The Elsa properties were once considered the richest and most productive silver camps
in North America.
Between 1945 and 1989, they produced 150 million ounces of silver, as well as 490
million pounds of lead and 330 million pounds of zinc.
United Keno Hill has been back on the site exploring since 1994.
When operating, the mines are expected to produce up to five million ounces of silver
per year.
Silver has been the sole performing metal of late. It's currently trading at
$5.41U.S. an ounce.
Compared to gold and base metals, it's doing well, but is still a far cry from 1980's
$50-plus prices.
The silver deposits in the area were discovered in 1903.
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