Western Copper continued drilling to prepare for construction next year
The past year has seen the continuation of strong mineral activity in Yukon, with exploration expenditures estimated at $100 million. The territory’s mineral potential is demonstrated by the significant results from the advanced exploration of known deposits, all of which have returned results that highlight their under-explored potential. Several new discoveries were also made, further demonstrating Yukon’s excellent mineral potential.
This past summer, there were over 150 exploration projects in Yukon. Of these, 73 had expenditures of greater than $100,000, with 22 spending more than $1 million. The rest were regional or grassroots generative projects.
Today, more than 100 years after the discovery of gold in Yukon, placer mining remains an important sector of the economy. Royalty records, which represent the minimum amount of gold production, show that over 16.6 million crude ounces (518 tonnes) of placer gold have been produced to date in Yukon. At today’s prices that would be worth more than $9.8 billion. In 2008, about 100 active placer mining operations directly employed some 350 people. Total placer gold production for 2008 is estimated to be similar to 2007 totals of 63,929 crude ounces.
Sherwood Copper Corporation’s Minto copper-gold-silver mine underwent phase 2 expansion, taking mill production to 2,400 tonnes per day. Phase 3 expansion subsequently boosted it to 3,200 tonnes per day. Additional capital expansion included the construction of a power line connecting the mine to the main Yukon power grid. This is expected to significantly reduce operating costs.
In July, Yukon Zinc was acquired by Jinduicheng Molybdenum Group Ltd. and Northwest Nonferrous International Investment Company Ltd. and is now operated as a private company. Development continued at the company’s Wolverine zinc-silver-copper-lead-gold deposit. Final development will begin in 2009, with production targeted to commence in the third quarter of 2010. The company has a Type A water license and a quartz mining licence allowing construction and operation until 2027. Completion of the all-weather tote road link to the Robert Campbell highway has greatly enhanced access to the property. Civil work consisting of site preparation for the construction camp was also completed. Western Copper Corporation’s Carmacks copper deposit is in the final stages of permitting and the company is expected to make a production decision in 2009. Geotechnical drilling and additional engineering and environmental studies continued in 2008 to prepare for construction in 2009.
Alexco Resource Corporation is conducting a major program that includes a new 650-metre decline and approximately 2,300 metres of underground rehabilitation at the historic Bellekeno silver-zinc-lead mine. To upgrade resources, 10,000 metres of underground drilling is planned to provide data for a feasibility study. The company aims to reach a production decision for Bellekeno by early 2009. Alexco has also entered a purchase agreement under which Silver Wheaton Corporation will purchase 25 per cent of the life-of-mine silver produced by Alexco from the Keno Hill silver district.
Numerous other Yukon mineral deposits were the subject of exploration, engineering and environmental studies designed to inform decision-making by companies on project developments in the next few years. These included Western Copper’s Casino copper-gold-molybdenum porphyry deposit, the Selwyn Resources’ Selwyn lead-zinc sedimentary exhalative deposit, Overland Resources’ Andrew lead-zinc deposit, Yukon Gold’s Marg copper-zinc-lead-silver-gold volcanogenic massive sulphide deposit, Yukon-Nevada Gold Corporation’s Ketza River gold deposit, North American Tungsten’s MacTung tungsten deposit and Largo Resources’ Northern Dancer tungsten-molybdenum deposit.
Yukon’s mineral regime
All 14 First Nations in Yukon have been involved in land claim negotiations. The majority, including those in Whitehorse, have settled their claims. The Yukon government is establishing government-to-government relationships with all First Nations to ensure their participation in territorial resource development. This constructive approach has ushered in a new era of economic partnerships and investment opportunity by creating certainty of land tenure for mineral explorers. The government encourages and facilitates partnerships with First Nations, industry and investors, for the benefit of all. The prime example of this relationship is the Minto mine, located on Selkirk First Nation settlement land.
The Selkirk First Nation has a cooperation agreement with Sherwood Copper. In addition to the many opportunities provided in this agreement, they also receive a 0.5 per cent net smelter royalty on production from the mine. All projects that have advanced to economic studies have engaged the First Nations whose traditional territory is affected. Several have signed memoranda of understanding or cooperation agreements. Examples include Alexco’s agreement with the Na-Cho Nyak Dun First Nation, the agreement between the Kaska First Nation and Yukon Zinc, Selwyn Resources and Yukon-Nevada Gold, and the Carcross Tagish First Nation’s agreement with True North Gems and Tagish Lake Gold.
This spurt in exploration and development activity has brought about an employment boom. Yukon has been proactive in managing the additional demand for skilled labour. The Yukon Mine Training Association offers a variety of training opportunities to help Yukoners acquire the skills needed to find lasting employment in the minerals industry. YMTA also works to help companies find the skilled workers they need to keep their projects on track.
In January 2008, the Yukon government began a review of the royalty regime and claim-staking section of the Quartz Mining Act which regulates mineral exploration in Yukon. Proposed amendments, drawn up after public and industry consultations conducted from January to May, 2008, offer a more modern approach to claim-staking and position Yukon’s royalty regime competitively with other mining jurisdictions. These amendments are expected to be debated at the Yukon Legislative Assembly this fall. Supporting regulations will be developed following their legislative approval.
Recent changes in global markets make it difficult to speculate on what 2009 has in store for exploration in Yukon. Record-setting exploration in the last few years has given Yukon investors the ability to make sound development decisions regardless of prevalent economic conditions. Yukon has captured the attention of Asia with investments in several projects by Chinese companies. As the discoveries in 2008 have shown, exploration potential in Yukon is world class. These factors will help Yukon retain its position as a prime target for mineral exploration, mine development and production in future years.