Majors dominate Yukon exploration

Although the mineral exploration season in the Yukon looks slower than the industry would like, some significant projects are in the works this year.

The biggest thing we’re going to see is exploration funded by major companies rather than junior companies,” said Jesse Duke, president of the Yukon Chamber of Mines.

Duke said more money is being focused on advanced stages of exploration, and there are several smaller plays. But he thinks up to $15 million may be spent in the territory this year, which would be an improvement over the $11-million tally last year.

Brewery Creek is the exploration project that’s generating the most enthusiasm.

“We’re very excited about Brewery Creek,” said project geologist Rick Diment of Noranda Exploration.

The gold property, about 60 km from Dawson City, is a joint venture of Noranda (TSE) and Loki Gold (VSE). The latter must spend $4 million by the end of 1992 to earn a 49% interest.

Loki will likely earn its share much sooner. It spent $2.2 million in 1990 and has another $3.5 million budgeted in two phases for this year. “A production decision could be made this year,” Diment said in Whitehorse. “If we’re successful, and if we have the same success we had last year, it’s quite possible.”

Diment said the first phase starting in mid-May will be similar to work done last year stepout drilling to delineate the deposit which is still open-ended.

That work should take three months and cost $2.1 million, Diment said. It includes about 12,000 metres of reverse circulation drilling, 2,000 metres of trenching, and possibly 500 metres of diamond drilling.

If results are favorable, Diment said the second phase will proceed. Tightly spaced definition drilling will be done in August and September to establish minable reserves.

Diment said there’s a good chance that more reserves will be found this summer, especially to the east. Current preliminary reserves are slightly over 10 million tonnes grading 1.8 grams gold per tonne (11.1 million tons grading 0.052 oz. gold per ton).

About three-quarters of the reserves are oxidized, Diment said, and amenable to heap leaching.

But Diment said it’s too early to say what mining methods might be used. He noted that heap leaching hasn’t been done in the Yukon before, and that extreme temperatures must be taken into account.

Heap leaching might mean a seasonal mine, he said, while a mill could run year-round, although it’s more costly.

Brewery Creek is in an area where there weren’t any known mineral occurrences, although mineral claims existed.

There is other activity in the Dawson area, Diment said. Noranda has a few other properties, as do Placer Dome (TSE), Big Creek Resources and Arbor Resources (VSE).

One gold property near Brewery Creek that is generating some new interest is the Taurus, a gold-copper porphyry deposit similar in some respects to Mt. Milligan. The Taurus is about 150 km from Brewery Creek in Alaska near the Yukon border.

Lodestar Explorations (VSE) controls the West Taurus, which wraps around Placer Dome’s East Taurus property. Lodestar President Todd Peever said the West Taurus consists of 130 claims on 5,520 acres.

It was discovered in 1970, he said, with five different majors working on it in the next decade. Lodestar bought the West Taurus in February. Peever said financing isn’t finalized, but he hopes to start a $1-million diamond drill program by mid-May.

“It has the potential for a big play,” Peever said from Vancouver. “It’s an extremely good target.”

There are other proven reserves, but Peever said Placer Dome’s property is looking at grades around 0.35% copper. That compares with 0.22% at Mount Milligan.

“We feel we’ve got a piece of the orebody (in West Taurus),” Peever said. “Our target is much larger in the West Taurus.” Lodestar began in Whitehorse, where much of its seed capital was raised. Peever said a Canadian drilling company would likely be hired for the Taurus work.

There is some base metal activity planned in the Yukon this summer. The $2.5-million drill program planned for the Blende is among the largest projects.

“What we want to do is demonstrate we have a large resource,” said Roger Wallis, exploration vice-president with Billiton Metals Canada, the project operator.

That’s because current indications point to a low-to-medium grade deposit that would only be economic as a large open pit operation, Wallis said from Toronto.

The lead-zinc property, 60 km from Keno City in the central Yukon, is owned wholly by NDU Resources (VSE).

Billiton can earn a 50% interest by spending $4.3 million by Dec. 31. Wallis said 15 holes were drilled last year. He said the preliminary reserve estimate is 11.5 million tonnes of 3% lead, 2.2% zinc, and 70 grams (2 oz.) silver, with a strip ratio of 2-to-1 waste-to-ore.

Last year’s drilling was on only half a kilometre of the property’s 6-km strike length, Wallis said.

This summer the plan is to drill off another 2.5 km in wide spacings, he said, with two and probably three drills running 24 hours a day, seven days a week from June until September. Geochemistry and geophysics work will be done as well.

Archer Cathro & Associates sold the original claims to NDU, and they are the prime contractors.

Wallis said there are several advantages to this deposit. It’s hosted in dolomite, so acid rock drainage won’t be a problem.

There is little vegetation or wildlife, he said, the stream water is so alkaline that it doesn’t support fish.

The Blende is also near the Wind River trail built by Chevron in the 1950s, Wallis said, “so we don’t have to create new roads.”