At no time in the history of British Columbia was there anything even close in size and scale as what would occur in Observatory Inlet of Northern BC.  The year was 1979.   U.S.-based mining conglomerate Phelps Dodge needed a town built and they needed it built overnight.  They had calculated there were 109 million tons of an obscure but ubiquitous metal called molybdenum lying beneath the old growth forest in the remote BC fiord.  More importantly, the people who ran the company figured that the time was right to haul it out of the ground and mill it.

This area of BC had been a treasure chest of minerals for some time.  Silver, lead, zinc, and copper had been mined at the end of the inlet for close to a century at the boom town of Alice Arm.  But in 1979 it was the molybdenum (also known as "molly") that everyone wanted.  The metal was used in alloys to provide hardness and corrosion resistance.  In fact, molly was so hard it was commonly used in the nose cones of rockets in the arms race.  The existence of molly in the area was old news.  In fact, between 1967 and 1972, a total of 10 million tons had already been mined. However, mining had stopped in the early seventies when prices softened.  But by the end of the decade prices were going back up on news that many of the known molybdenum deposits in Alaska, British Columbia and the western United States were depleted.

Thus, in 1979, the folks at Phelps Dodge figured the time was right to go into full blown production.  However, there was a big logistical problem in opening up the mine; there were no workers.  In fact, the only living things in the area were silver foxes and grizzly bears.  Kitsault laid at the end of Observatory Inlet in a remote unpopulated region of BC tucked behind the Alaska Panhandle.

In the late sixties, the last time the mine operated, workers commuted by boat from the little town of Alice Arm that lay just a couple of kilometres across the fiord.  But this time there would be a major mining boom involving hundreds of workers.

Almost everyone had moved out of Alice Arm, which by the eighties had become a decaying and forgotten ghost town, so the notion was to bring in workers from the south.  What was needed was an instant town, so plans were hastily drawn to build Kitsault.  It was a construction project on a scale that had never been seen in Northern British Columbia.  The site selected for the town was a broad, fairly level table of land of several hundred acres with a mixed boreal forest of deciduous and evergreen trees.

The site was perfect because it was elevated and dry with a broad south-western exposure.  This would not only give the homes sun exposure for most of the day but almost every neighborhood had a clear vista of the stunning azure green fiord.  The architects and engineers were told to design an environment identical to what a worker would expect in Southern Canada 800 kilometres away.  The idea was not only to house the workers but also to create a complete social economic environment for their families.

There was to be more than 100 single-family homes and duplexes, seven apartment buildings with a total of 202 suites.  Because they would not be able to build homes fast enough, there were plans for permanent foundations that could be used for mobile homes.  There was a modern hospital and a shopping centre, restaurants, banks, a theatre and a post office.  All the services were underground, including cablevision and phone lines.  There was a state-of-the-art sewage treatment plant and the cleanest running water in the province.  For entertainment, there was a pub, a pool, a library and two recreation centres with jacuzzis, saunas and a theatre.

In 1978 the building boom began.  Ships arrived with building supplies into Kitsault’s deep water fiord.  A road was hastily built through the mountains to link Terrace from 3½ hours away.  Engineers and construction workers poured in from all over North America, drawn by high-paying construction jobs.  Everything was needed at the same time; foundations were laid while the sewers and underground services were installed.  Finally, in 1980, just as the paint was drying on fresh drywall, the first families started to move in.

Life had begun in this pristine Shangri-La nestled in the mountain inlet.  Families settled into the single-family homes and singles moved into the apartments.  The Knight & Day restaurant opened up and people started to open up accounts at the Royal Bank.  The school opened its doors and the kids made giant cardboard cutouts depicting swimmers clad in goggles and fins to be hung from the ceiling of the swimming pool.  Somebody even started a ledger to record each load of popcorn that was popped in the recreation centre.

Unfortunately for the company and its workers, as the people began to settle into their new lives, something far more sinister was happening a thousand miles to the south.  Prices collapsed under the pressures of the 1982 recession and there was the arrival of molybdenum by-product production from copper mines.

The same radical shifts in molybdenum supply and demand that had sent prices soaring were now causing prices to crash.  The Kitsault dream was over and the mine was suddenly closed down just 18 months after it opened.  People were out of work, and convoys of moving vans began to work their way in from Terrace.  The brand new shiny town where people had just moved in full of hope and excitement was a ghost town and the big gates at the entrance to the town were padlocked.

Nobody knows for sure what the cost of the town was.  Some say $50 million in 1980 dollars, or about $50,000 dollars a month to house a worker and his family in 1980.  Estimates to replace the town in today’s costs run as high as $250 million.  For almost a quarter of a century, the town has laid empty behind these locked gates, shut off from the rest of the world as if it was in a giant time capsule.  During this period, the owners of the mine took an "out of sight, out of mind" approach.  No one was allowed in, especially the media, and Kitsault became the town that time forgot.

There are 2.4 kilometres of waterfront teaming with fish and crab, and along the manicured boulevards apple trees hang low with fruit that no one has ever picked.  The town is surrounded by snow-capped mountains that have never been skied and there are eight glacier-fed streams that support salmon within a 20-minute walk of the town centre.  There is a town dock that juts out into the fiord.  Today, the only inhabitants are a caretaker, who looks after cutting the lawns, a family of foxes and the occasional grizzly bear that wanders in to scavenge fallen fruit.  Up the valley under a lush green old growth forest still lies 110 million tons of molybdenum.

In 2005, the town was put up for sale.  It was bought by a single investor and the new company, Kitsault Resorts Limited, was formed.  What happens to the town will be the ongoing work of a dedicated team of business people and environmentalists who will work in conjunction with government and aboriginal interests to preserve the rich heritage of this unique chapter in Canadian history.

Click here to learn about the area's original inhabitants.

Click here for first person accounts from former residents.

Top of Page