At a recent conference in Whitehorse, the Conference Board of Canada foresees 5.7% real GDP growth in 2014. The Yukon Government is even more bullish suggesting over 8% real GDP growth in 2014 in an economic outlook it published.
The Conference Board hangs its hat on two new mines that are expected to be under construction next year—Victoria Gold and Copper North. In addition, Eagle Industrial Minerals will begin processing the tailings from the former Whitehorse Copper site. Government capital construction on the new F.H. Collins Secondary School will ensure that construction workers are busy in 2014.
The Yukon economic outlook report published by the Yukon Government predicts improving copper prices and cites the average forecast to be $3.35/lb. For gold it suggests a price of $1,247/oz. The report notes that the development plans of Victoria Gold Corporation’s Eagle Gold project have been hampered by weak equity markets.
Commodity prices have been under downward pressure for the past 2 years.
The forecasts of 5.7 to 8.8% real GDP growth are possible but not probable. Copper is facing a supply surplus which undermines the economics of Copper North. Not clear Victoria Gold will raise its $440M in a hard market. Silver could easily languish at the low $20 range. My guess would be for 3% real GDP growth for Yukon—better than Canada but not great compared to recent years.