Falling zinc, silver prices prompt cutbacks at Yukon Zinc

With mining exploration in the Yukon Territory already suffering, the announcement Yukon Zinc was cutting production and its workforce was even more troubling for Yukon mining.

Author: Dorothy Kosich
Posted: Friday , 28 Jun 2013

RENO (Mineweb) -

Yukon Zinc announced Thursday that it will cut Wolverine Mine production by 40% and reduce the workforce by 30% to reduce costs.

Workforce and expense reductions will also be made at Yukon Zinc’s Vancouver head office. The staff that will be impacted include both Yukon Zinc and its underground mine contractor.

One-third of filled positions are affected and open jobs will not be filled. Travel expenses and capital investment have been cut across the organization, the company said in a news release.

“The difficult decision to reduce production and lay off valued Yukon Zinc employees was made after an exhaustive review of our entire organization, and with the greatest reluctance,” said Yukon Zinc CEO Jingyou Lu. “With current market conditions, these actions were necessary to responsibly stabilize our finances and put Yukon Zinc on a realistic path forward.”

Milling will be performed in two week periods at the Wolverine mine with two weeks of maintenance to conserve power. During operating weeks, the mill will operate beyond its full design capacity rate of 1,700 per day.

Underground mining will consist of a single shift daily to support production levels with half the existing manpower. Administrative and technical staff will be reassigned to different duties in order to retain critical staff for increased operation levels when zinc and silver prices increase.

The company said it will review the economics in 90 days and determine whether to resume full production.

Michael Koikw, executive director of the Yukon Chamber of Mines, told CBC News that the situation could get worse for mining in the territory, especially over the short term. Gold prices spiraled to a three-year low earlier this week, which Koikw said affected everyone from large operating mines in the Yukon to small placer miners

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