Yukon's Wolverine Mine shutting down due to falling resource prices

The Wolverine Mine, located north of Watson Lake, Yukon, is shutting down for several months at leastbecause 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 Lakeexpects the closureto 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 to50 people."

TheYukon Zinc Corporation, the owner of theWolverine 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 themine will be shut down for two to three months, but suggests it could last longer than that.

"Depending on market conditions and funding availability, we may elect to re-start operations after the temporary shutdown," the letter reads.

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 kilometresnorth 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 laidoff about 100 workers several months later because of low metal prices.Some of those workers were recalled in September2013.

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 beginsin Vancouver. None of the Yukon government ministers at the annual exploration conference have commented on the shutdown.

JimTredger,an opposition MLA representing the territorial NDP, says the closure isa 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."