Yukon Energy and Victoria Gold Sign Power Purchase Agreement

Yukon Energy and Victoria Gold have signed an agreement for the supply of grid power to Victoria Gold’s Eagle Gold Mine near Mayo. The agreement was signed on November 10th and submitted to the Yukon Utilities Board (YUB) for review the same day (last Friday).

The signing of this Power Purchase Agreement (PPA) is a key step towards the connection of the mine to our grid. However Victoria Gold must complete a final round of financing to move on to the next phase of construction next spring.

If the Utilities Board approves the PPA, power sales to Eagle Mine would contribute $100 million or more in additional revenues to Yukon Energy over the expected ten-year mine life. This new revenue will benefit all electrical consumers in the territory, and will result in a one- to two-percent reduction in rates for other electricity customers.

The agreement commits Victoria Gold to covering the full costs of connecting to Yukon Energy’s main line. As well, the mine will pay most of the costs of a new substation, it will cover YEC’s expenses to negotiate the PPA, and it will pay the costs to make system improvements that will benefit all on-grid Yukon communities. The value of Victoria Gold’s investment in the substation, system improvements, and Yukon Energy’s costs totals more than $11 million.

The mine will connect initially to the existing Stewart to Keno City transmission line, which can meet the majority of Victoria Gold’s power needs for the first one-to-two years of its operation. However, the existing line is at end of life and must be replaced as soon as possible. Yukon Energy is continuing to work with the Yukon Development Corporation and the Yukon government to secure funding for a new transmission line.

The First Nation of Na-Cho Nyak Dun (NND) has indicated its support for both the Eagle Gold Mine and an upgrade to the Stewart to Keno City transmission line. Yukon Energy is working with NND to reach a project agreement for the prospective line.

The Eagle Gold Mine expects to go into production in by mid-2019. Its load requirements would be highest during the summer months, when we have surplus renewable energy. The mine’s operations would slow down in December, January, and February when its requirements for electricity would drop to about half of its summer needs.

If Victoria Gold is connected to the grid, Yukon Energy will meet their load with a mix of hydro and thermal resources (most of the thermal will be LNG). The amount of thermal will reduce once more new renewable generation can be added to the system. This emphasizes the need to proceed with renewable projects identified in our 2016 Resource Plan. However a grid connection saves up to 53,000 tonnes per year of greenhouse gas emissions when compared to the mine self-generating using diesel.  

A copy of the full application submitted to the YUB can be found at the bottom of this page.