Four projects account for half of Yukon exploration spending

About $14 million is being spent on mineral exploration in the Yukon this season, according to a mid-season forecast by the Yukon Chamber of Mines.

“It’s another very quiet year,” said Rob McIntyre, the chamber’s managing director, who compiled the figures.

“This is like the third or fourth fairly flat year in the Yukon in a row.” Work on four properties accounts for $7.7 million, he said, including $3 million for drilling and geophysics on the Brewery Creek gold project, a joint venture of Noranda (TSE) and Loki Gold (VSE).

On the Blende lead-zinc-silver property, NDU Resources (VSE) and Billiton Metals Canada have budgeted $2.5 million for drilling and geophysics. Archer Cathro & Associates (1981) Ltd. is performing the field management. Other large projects include $1-million worth of drilling on the Tom lead-zinc-silver deposit of Cominco (TSE). Total Energold (TSE) and Mitsui and Co. Canada Ltd. plan to spend $1.2 million on drilling, geophysics and geochemistry at Clear Lake, another base metal deposit.

McIntyre said there is a definite trend back to base metal exploration and away from gold, although junior exploration companies still find it easier to raise money for gold deposits, which are “sexier,” need less infrastructure for mining and can be more profitable on a small scale.

“Close to 70% of the exploration effort is being directed toward base metals, especially lead and zinc, and 30% is directed toward gold properties,” he said.

At the Nucleus property, Big Creek Resources (VSE) has budgeted $350,000 to drill for copper and gold. It plans to spend the same amount at the Carpenter Ridge lead-zinc-silver showing.

Western Copper Holdings Ltd. and Thermal Exploration (ASE) estimate they will spend $450,000 on trenching and drilling at Williams Creek, another copper-gold showing.

Major gold producer Placer Dome (TSE) has targeted $275,000 for property evaluation, reconnaissance and data evaluation at various properties. Cominco has another $1.1 million set aside for target development on various properties, while Noranda plans to spend $1.2 million at areas other than Brewery Creek.

This year marks the first time the Yukon Chamber of Mines has made such a concerted effort to gather statistics, something that’s possible since it has a full-time managing director.

McIntyre said between $11 million and $14 million was spent last year on Yukon exploration, depending on which figures are used. The $14 million estimate this year could change, he cautioned: “There’s no established system of the smaller companies reporting to anyone here what they spent.” McIntyre said the chamber wants to see $30-50 million going into Yukon exploration annually. That has happened before — five years ago the total was $48 million, and $30 million was spent four years ago.

McIntyre cited low world metal prices, a quiet exploration scene across Canada and continuing problems raising capital on the Vancouver Stock Exchange for the situation. Some companies which release good results aren’t even seeing movement in their share prices, he said.

Dave Huston, manager of Caron Diamond Drilling Ltd. in Whitehorse, agreed that business is slow. He said he usually has 40 people working at this time of the year, and has had up to 125. Currently, 15-20 people are employed. “It looks like it’s going to wrap up here by the end of the month (August),” Huston said.

Caron is drilling on three projects: the Blende, a Mount Freegold gold showing and for Wheaton River Minerals (TSE).

McIntyre said other drilling companies, air charter businesses and consultants are also suffering. He said he’d like to see a project such as Brewery Creek, backed by a major like Noranda, turn into a mine and garner the attention of the North American mining industry.

McIntyre said he doesn’t believe rumors that Curragh Resources (TSE) may shut down its lead-zinc mine at Faro, although zinc prices have dropped further since Curragh reported a $16-million loss in its last quarter, and Faro workers recently negotiated a new contract.

Curragh is only making a marginal profit at Faro, he said, but the company did open a lead-zinc mine, with Hillsborough Resources (TSE), near the Yukon town of Watson Lake this summer. McIntyre said he thinks Curragh has a longer-term commitment to the territory and can withstand some losses.