COVER

OUT IN THE COLD

HOPES FOR A REVIVAL ARE FADING IN THE YUKON

HAL QUINN April 19 1993
COVER

OUT IN THE COLD

HOPES FOR A REVIVAL ARE FADING IN THE YUKON

HAL QUINN April 19 1993

OUT IN THE COLD

COVER

HOPES FOR A REVIVAL ARE FADING IN THE YUKON

HAL QUINN

The smoke from dozens of cigarettes forms a shifting cloud over the heads of the patrons of the coffee shop in the Faro Hotel. It is mid-morning on a weekday, yet the dozen tables are all taken. Curragh Inc., the main employer in the Yukon town of Faro—

200 km northeast of Whitehorse—is locked in negotiations with the territorial government over the company’s request for guarantees on a $29-million bank loan to keep its lead and zinc mining and milling operation going. On April 2 in Toronto,

Curragh’s chairman and chief executive officer,

Clifford Frame, announced a two-month shutdown of the Faro mill and mines as well as his other Yukon ore mine at Watson Lake, about 350 km southeast of Whitehorse and roughly the same distance northwest of Curragh’s undeveloped B.C. mine, Stronsay. That means that the 850 people in town who worked for Curragh have their mornings, and afternoons, free.

Kerry Tschritter captured the mood in the coffee shop and much of the town’s population of 1,800. The 33-year-old president of the Faro Local 1051 of the United Steelworkers of America, which had 352 members working for Curragh, said: “That Clifford Frame just doesn’t give two damns about us. He sucked millions out of this place and then shuts it down. For months they’ve been shifting deck chairs on the Titanic, and now everybody’s abandoning ship.”

Faroites, as they proudly call themselves, have had a love-hate relationship with Frame ever since the maverick mining executive bought the Faro mines and mill in 1985 from Cyprus Anvil Mining Corp., a division of Dome Petroleum. At the time, Faro was a virtual ghost town; Cyprus Anvil

had shut down in 1982 because of a cost squeeze. Frame swung the Faro deal—$50 million cash and the assumption of $15 million in liabilities—with a series of loans and cash infusions from other resource companies. But true to a pattern that he would follow later in the Westray coal mine project in Nova Scotia, Frame also convinced the Yukon and federal governments to chip in $3 million from the joint Yukon-Canada Economic Development Agency, $5 million from the sale of company housing in Faro to the Yukon government and guarantees for most of a $15-million bank loan. Frame, through his company Curragh, paid back the governments ahead of schedule. But now, mineral prices are degi pressed again, and once 2j again Frame and Faro need government help.

I At a table at the back of B the coffee shop, Effy Croft, S 42, accepts the waitress’s

offer of another refill of her cup, lights another cigarette and, like almost everyone else in town, wonders aloud what lies ahead. Sk years ago, Croft pulled up in front of the hotel in a rented U-Haul truck with her three children and two dogs after a six-day drive from Kamloops, B.C., to join boyfriend Len Derosier, who had found a job at the mill. She immediately fell in love with thf town and never wants to leave. Brushing aside a curl—she dyed her hair burgundy last month “just for the heck of it”—Croft said: “If worse comes to worst, we’ll go on welfare. One way or another, the government is going to risk the $29 million on the loan, or in welfare to us. Faro will not go down again.”

Loan: Left to the people in Faro, the decision is straightforward and simple. For the Yukon government in Whitehorse, however, there are complications. In the aftermath of the Westray disaster, the federal government will not get involved again. But soon after last October’s territorial election, Curragh asked the minority Yukon Party government to guarantee—insure—the proposed new bank loan in addition to a $5-mil-

lion loan granted last April by the previous NDP administration. The funds would be used to strip away another 100 m of rock and earth—the pit is already 300 m deep—to expose the Grum ore deposit.

That site is eight kilometres southeast of the played out Faro pit—which sustained the mill for the past six years—and could feed the mill for about eight years. Curragh is the Yukon’s largest private-sector employer in a territorial population of just over 31,000 residents. And the Curragh operation at Faro and the Sä Dena Hes mine at Watson Lake, which employed just over 140 people, represents fully 18 per cent of the Yukon’s economy. “We’re a big player in the Yukon economy,” said John Hogg, 48, the vicepresident and general manager of the Faro mines and mill. “This is a good operation. It has achieved its productivity and costs targets.

It’s not something nebulous. If we get the loan guarantees, we’ll be a good operation again—and we can sustain it.”

Crazy: From the perspective of his Whitehorse office, Yukon Government Leader John Ostashek expressed his concern.

“Look at the federal government’s and Nova Scotia’s millions in Westray,” said the 56-year-old former outfitter, six months into in his first political job. “Governments get into some crazy things, and we’re hoping that we’re not one of those governments. We are not a venture capital bank and we don’t want them back in a few years for money to strip the Dy deposit [an ore body near Grum], If the company can survive in the long term, then the loan guarantee is a good investment. Otherwise, it’s not.”

In an effort to protect such an investment, Ostashek’s government applied 14 conditions to the loan guarantees that it agreed to grant Curragh on March 4, including the reopening of the Sä Dene Hes mine, for which the government has supplied $1 million in roads and employee training. The conditions are still being negotiated in Toronto, with the brokerage firm Burns Fry representing the Yukon. Saying that the “ball is in Curragh’s court,” Ostashek conceded: “If Curragh goes down, there is going to be a real economic downturn in the territory. We’re faced with that.”

Without the mine, Faroites face a future as harsh and unforgiving as the surrounding landscape. After the last big closure in 1982, most people left. But things have changed over the past decade.

As he steers his four-wheel-drive pickup truck across the steel bridge spanning the Pelly River and up towards the plateau on which the town sits, Faro mayor Bob Gault

points through the star bursts and jagged cracks in the windshield—courtesy of rocks spit up from the roads by other pickup trucks—at a firebreak cut into the scrub pine below the tree line in the snow-covered Anvil Mountains behind the town. “A year after the town was first built in 1968, the whole thing burned to the ground.” said Gault, 55, his voice as gravelly as the road. “That’s when they cut the break.” The town has escaped fire ever since then, but like mining towns across the country, Faro people share a fatalism never far below the surface. They say that the day a mine opens, it is one day closer to closing. The difference

this time is that, unlike 1982, not everyone wants to leave.

Gault explains that isolated places like Faro provide one of the few remaining outposts of true freedom. Gault was born in Ottawa, served with the RCMP, sold real estate, has been a justice of the peace, and owned and ran a restaurant in Craven, Sask., before heading to Faro. “I basically came up here as a garbageman in 1977,” he says,“and by 1987,1 was mayor. And they wonder why you go to the Yukon? Well, I have every intention of staying here.”

Fantasy: Croft, whose often outrageous “Dear Effy” column appears in the Faro Raven monthly newspaper, agrees. “Faro is a fantasy that we’re living. There’s nobody to bug you up here—you can be a pioneer and do your own thing. If you don’t conform to society, it doesn’t really matter.” She says that she is staying.

In any case, Faroites see few opportunities elsewhere. “The problem is that people here are specialized,” explained mechanic John Gagnon, 46, a native of Danville, Que., who moved to Faro in 1990. “Only about 15 per cent of us are in trades. Most of the people, heavy equipment operators who work the pits, they have to go to another mine. And we know from the recession that jobs in the mines just aren’t there.” Dean Rucks, a 27year-old heavy equipment operator from Lanigan, Sask., said that he has a job to go to, but added: “There’s not much out there. We may say what we want about how closeknit the community is, but if you’re out of work for six or seven months, you’re not going to be able to stay. A long closure will just devastate this town. It will go from 1,800 people to 500 just like that.”

The stress on individuals and families is already showing. Between fielding phone calls as a member of the mine’s Employees’ Family Assistance Program in an office of the Steelworkers building on the edge of Faro, Toronto native Sharon Bach acknowledges the realities of the mining life. “We know that mines shut down every day,” said Bach, 41, who before the temporary layoffs earned $19.48 an hour servicing the mine’s heavy equipment. Her husband, Ken, worked as a millwright. They have worked at Curragh for the past five years, renting a three-bedroom house in town for $500 a month, and spending up to $200 a month on heating oil when the winter night air becomes an adversary at -50° Celsius. “If the mine shuts down for good, we can deal with that, we can go forward,” said Bach. “But m right now, people’s lives have just 8 been put on hold. We’re going y nowhere, while decisions are bem ing made without a human touch.” Spring has come to much of Canada, but in Faro, snow has been on the ground since the end of last August, and thick layers persist. Outside the coffee shop, in the hotel parking lot only a few puddles glisten in the early April sunshine, and the events of last week have hit the town like an Arctic cold front. “Faro was the cash cow,” said Tschritter with a sigh, his union local presidency weighing more heavily each day. “Frame expanded outside the Yukon, and it didn’t work out. Lead and zinc prices are down, the company’s broke. All of a sudden, it’s all caved in. But the ore’s here, we’ve got the skilled people. We made it work before, and we can make it work again.” But for now, for Tschritter and his fellow Faroites, there is nothing to do but have another coffee, light another cigarette, hope and wait.

HAL QUINN in Faro

Curragh, Northwest

NORTHWEST

TERRITORIES

Stronsay Project

!*r

Dawson Creek

O

Quintette Mine