Base metals the key as Yukon exploration spending rises 33%

Mineral exploration spending in the territory rose to $16 million this year from $12 million in 1990.

Dennis Ouellette, a geologist with the Whitehorse office of the federal Department of Northern Affairs, told delegates to the 19th annual Yukon Geoscience Forum that grassroots gold exploration is healthy, but that the number of grassroots base metal programs dropped in 1991.

About 53% of spending went to base metals, he said, and 42% to precious metals. He said three-quarters of spending by majors on advanced projects involved diamond drilling.

With major companies seeking targets for drilling and junior exploration companies unable to raise enough money to bring properties to this level of development, Ouellette said it’s inevitable the Yukon will see further drops in mineral spending once inflation is taken into account — and ultimately a decline in mineral development.

The current focus on advanced properties is the culmination of 30 years of hard work, said Jesse Duke, president of the Yukon Chamber of Mines. “Today, there is no attention paid to the next generation of mineral discoveries,” he told delegates.

Duke said three things must be addressed in the Yukon: public and government attitudes toward the mining industry; completion of legislative changes so that regulations are fair to all Yukoners, including the mining sector; and the creation of an economic climate conducive to investment. “It is lean out there,” independent prospector Jim McFaull said in an interview. “The money’s going to South America and I don’t think it’s coming back for the foreseeable future.”

McFaull works his own claims in the Dawson and Mayo areas. He said it is tough when majors such as Noranda cut back across Canada.

Meanwhile, prospects of greater interaction with Yukon native people are on the horizon for the industry.

Ed Schultz, director of lands and resources with the Council for Yukon Indians (CYI), told the forum that a joint advisory committee with members from the aboriginal community and the mining industry has been struck and should start meeting in January.

“There is definitely a need for more co-operation,” Schultz said. “I’m glad to see we’re starting to see a better rapport between the mining industry and First Nations.”

Schultz pointed to the Laird Indian band’s involvement in the new Sa Dena Hes lead-zinc mine near Watson Lake, a partnership between Curragh Resources (TSE) and Hillsborough Resources (TSE). This high-grade mine has a projected life of 8-10 years.

Schultz said CYI hopes to assemble information kits on each First Nation, including which land areas are most sensitive to them. The kits would be available to the mining industry.

He added that industry goals and activities, including efforts to be environmentally responsible, can be better communicated to native people. Work remains on the Yukon native land claim but four First Nations have reached tentative agreements and CYI hopes to ratify the overall agreement by March, 1992.

The number of placer claims rose slightly compared with 1990, but royalties paid on gold produced are down by about 15% from this time last year, Ouellette said.

Production to the end of October this year was 109,308 crude ounces. Last year’s production was 132,658 crude ounces. Ouellette noted that November and December aren’t big producing months.

While the number of quartz claims in good standing in the Yukon is down this year, Ouellette said there was a flurry of staking activity in late summer in the Mayo area.

He said Amax Gold (TSE) staked about 1,000 claims around Dublin Gulch, historically a placer creek which also produced scheelite.

Amax followed up with an extensive trenching and drilling program of 2,500 metres in 16 holes, Ouellette said. The target is a large-tonnage, low-grade gold porphyry system similar to the Fort Knox deposit near Fairbanks, Alaska, he said.

The 12,000-metre drill program at the Blende lead-zinc property northeast of Mayo, financed by Billiton Metals Canada and NDU Resources (VSE), was the largest for base metals, Ouellette said.

He predicted the work will significantly increase last year’s published reserves of 11.4 million tonnes grading 2.2% lead, 3% zinc and 50 grams per tonne of silver.

At the Clear Lake lead-zinc deposit northeast of Faro, Mitsui Kizoku Resources Canada and Total Energold (TSE) funded 4,500 metres of drilling in 19 holes.

Ouellette said Cominco (TSE) continued to exercise its option on the Tom in the MacMillan Pass, drilling on the east zone and other near-surface targets. Total reserves in the east and west zones, calculated by Hudson Bay Mining and Smelting (TSE), are reported to be more than nine million tonnes grading 7.5% lead, 6.2% zinc and 69.4 grams silver.

Cominco also continued exploration on its wholly owned Nidd property, 20 km west of the Tom, and conducted other exploration in the Watson Lake area, Ouellette said.

Also in MacMillan Pass, Phelps Dodge Corp. of Canada drilled 2,555 metres in six holes on the Jason lead-zinc deposit, he said.

On another lead-zinc showing, Carpenter Ridge, west of the Blende, Big Creek Resources (VSE) drilled 610 metres in five holes.

Ouellette said results from this season’s trenching returned several intersections, including five metres of 9.5% combined lead and zinc, and 9.3 metres of 4.5% lead-zinc.

Brewery Creek, a joint venture of Loki Gold (VSE), Hemlo Gold Mines (TSE) and Noranda Exploration, was by far the largest gold exploration program, Ouellette said.

Aurchem Exploration worked on its Goulter gold property on Mount Nansen northwest of Carmacks, and Ouellette said there is the potential for a large-tonnage, low-grade deposit.

In the Dawson area, he said Arbor Resources (ME) continued exploration work, particularly around Gay Gulch.

Noranda also explored the Itsi, an interesting gold property northeast of Ross River, Ouellette said, completing 427 metres of drilling and extensive trenching with a helicopter-transported Kubota backhoe.

Western Copper Holdings (VSE) and Thermal Exploration (ASE) reportedly increased grade and tonnage at the Williams Creek oxide copper deposit northwest of Carmacks, he said, with a 55-hole, 3,890-metre drill program. Previously published reserves from the main zone are 9.7 million tonnes grading 1.02% copper.