Mining sidestepped recession, delegates told

The Yukon’s mining industry heard about the worldwide recession, but it really didn’t feel it,

The Yukon’s mining industry heard about the worldwide recession, but it really didn’t feel it, government geologist Mike Burke said this morning in his address to the 37th Yukon Geoscience Forum in Whitehorse.

Burke said mineral exploration was strong, as was the investment of development dollars to prepare for production, particularly by the Yukon Zinc Corp. at its Wolverine Mine project southeast of Ross River.

The value of placer gold production is also on track to hit a 20-year high, placer geologist William LeBarge told conference participants.

Burke said that with the success in exploration at the Minto Mine, and with the Wolverine Mine heading toward production next year, as well as another couple of operating mines on the horizon, including the Bellekeno project in Keno City, the future is looking strong in the
territory’s mining industry.

“The future for Minto, especially with these types of exploration results, is quite spectacular,” said the head of mineral services for the Yukon Geological Survey.

“Right now, our estimate for exploration is $90 million, and there is still work going on, so that could climb up a little bit more,” he said.

“Development dollars are going through the roof, mostly with Yukon Zinc’s Wolvernine Mine.”

Records indicate exploration expenditures peaked in 2007 at a record $140 million, but fell to $110 million last year.

Industry watchdogs last winter were predicting another significant drop in spending this year as the recession gutted the stock market and slammed the door on available financing.

The $90 million to date, however, is still the third-highest in recent history.

Burke said 47 per cent of exploration money was spent looking for gold, 23 per cent for silver and 30 per cent for base metals.

The Minto Mine drilled 31 kilometres of new holes, and hit two new ore bodies, both with high values of copper and gold, he pointed out.

Overall, Burke added, the amount of drilling is down though more exploration dollars are being spent on analyzing drill results and environmental engineering work to advance the projects.

He pointed to the White Gold district, where Underworld Resources is leading the exploration rush with 90 holes drilled – the most active for claim staking.

Investment in development, Burke said, hit $165 million, up from approximately $10 million last year, pushed primarily by the Wolverine project and the Bellekeno development.

Production by the Yukon’s placer industry, LeBarge told forum participants, was sitting at 53,128 ounces as of today, representing a value of $46.6 million.

LeBarge, however, suggested there is still a significant portion of gold unreported, and suspects this year’s final tally could hit 65,000 ounces, representing a value of $57 million, the highest since 1989.

“There were 131 operating mines, which is up quite a bit from the last couple of years, and that corresponds to about 310 active water licences,” he said.

LeBarge pointed out the number of operating mines was up by 23 because of the price of gold and stable fuel prices.

Of the 131 operating mines, 96 were in the Dawson district, 23 were in the Whitehorse south district and 12 were in the Mayo area, he pointed out.

LeBarge said the Dawson district has accounted for 86 per cent of placer production to date.

Placer miners working the Indian River and Dominion Creek, and their tributaries, have so far reported 14,935 ounces, or 28 per cent of the total do date, records show.

Production on the Klondike, Bonanza and Hunker waterways was at 13,228 ounces, accounting for 25 per cent of production.

At the end of the scale, production in the Kluane area has hit 1,636 ounces, representing three per cent of the total.

Production in the Livingston area northeast of Whitehorse was a paltry 16.6 ounces, mostly because of exhausted reserves, LeBarge said.

The placer geologist also noted the number of placer claims being staked is falling despite the rising price of gold, and he suspects it’s related to the increasing cost of reaching new and more remote areas that have yet to be staked.

“There’s more gold out there,” he said. “It’s just not as accessible.”

Records indicate 320 kilometres of new placer claims were staked this year, down slightly from last year.

Back in 1980, when the price of gold was bouncing around $600 US, 3,600 kilometres of new ground was staked.

LeBarge, however, suspects with growing interest in remote hard rock properties like Underworld’s White Gold district, access will become more accessible and new areas will be staked.