Canadian Yukon Energy, Victoria Gold Sign Early Power Deal

Yukon Energy Corp. may soon have another major customer on board, as Victoria Gold Corp. has expressed interest in buying hydroelectricity for its proposed mine near Mayo, Yukon.

According to a letter of intent signed by both companies on Monday, Victoria Gold will have to pay for a transmission line from Yukon Energy’s hydroelectric grid to its Eagle Gold property, located 85 kilometres northeast of Mayo.

The letter of intent sets up talks between Yukon Energy and Victoria Gold for a power purchase agreement.

Victoria Gold says it still needs to secure environmental approvals for its mining project, but it’s aiming to start construction in 2013.

Should a power purchase agreement be finalized, Yukon Energy president David Morrison said the Eagle Gold mine’s needs will exceed the utility’s available capacity, even after the Mayo B dam expansion is complete.

“The size of the load at Victoria Gold will be much greater than the available power from Mayo B once it comes online,” Morrison told CBC News.

“There’s no doubt about the fact that if we’re not going to burn diesel, we’re going to have to get additional capacity on the system by the time Victoria Gold comes into production.”

Morrison said industrial rates, charged for mines like the Eagle Gold property, will have to be negotiated. Those rates would then need approval from the Yukon Utilities Board, he said.

Last year, Yukon Energy signed a power purchase agreement with Alexco Resource Corp. to supply hydroelectricity to the Bellekeno silver mine near Keno City.

CBC News

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