Yukon mining industry looks to increased activity

Cautious optimism about an upturn in mineral exploration this year after the 1989 slowdown might best describe the feelings of the Yukon mining industry. Mine industry representatives predict between $25 million and $30 million will be spent this year in the territory, up from $18 million last year but still a far cry from the record $50 million spent in 1988. “Anything’s going to be better than last year,” said Al Doherty, president of the Yukon Chamber of Mines.

Doherty said higher gold prices are helping, and many companies have a better idea on where they can raise money this year.

Doherty, also a geologist with Aurum Geological Consultants, said while junior mining companies should raise some funds, he expects them to have problems.

He said there is still investor resistance to the juniors. But because many juniors were slow last year, Doherty said they’ll have property commitments coming up, which may produce some activity. Another geologist, Mike Phillips, said he thinks the ability to raise money is affected now by fears of a general economic slowdown. He works for Archer Cathro & Associates (1981) Ltd.

Trevor Bremner, a geologist with the federal government in Whitehorse, noted that six large companies, including Curragh Resources, funded most of Yukon exploration last year and predicted a repeat.

“That’s the really big stuff — lots of big dollars and instant payoff . . . whereas some of the others are more longer-term stuff,” he said.

Bremner added Curragh has been able to cash in on the boom in base metal prices to develop other deposits. He still thinks base metal prices are “reasonable” despite their recent decline.

Curragh remains the largest player in the Yukon mining scene. The owner-operator of the Faro lead-zinc mine is developing several deposits to sustain production into the 21st century.

In 1990, the first new production will come from an underground mine beneath the southeast corner of the Faro open pit and from an open pit on the 6-million-tonne Vangorda deposit.

Curragh is stripping overburden from the 25-million-tonne Grum deposit, to build a 14-km haul road from the new pits to the Faro mill.

At the 21-million-tonne Dy deposit, Curragh plans detailed underground drilling to further define the orebody.

Curragh is also aggressively trying to bring the Mt. Hundere deposit, with existing reserves of 5.2 million tonnes, grading 18.5% combined lead-zinc-silver, into production by 1991.

The project, a joint venture with Hillsborough Resources (TSE), is near Watson Lake. About $2 million will be spent there this year, Doherty said.

Curragh hopes to apply to the Yukon Territory Water Board this spring for a water licence at Mt. Hundere. The company has also approached the territorial government about upgrading the Tagish Road to allow ore trucks to travel along it to the Port of Skagway, Alaska.

Placer Dome (TSE) set up a Whitehorse office last year. Placer Dome is the operator in a joint venture in the Wheaton River Valley with Skukum Gold (VSE), and will contract the latter’s services for the first year.

Doherty said the Wheaton River area, south of Whitehorse, now has a higher profile and more credibility because of Placer Dome’s arrival. Doherty said juniors such as Ranger Pacific Minerals Ltd. are working on share issues based on Wheaton properties.

While Skukum Gold had hoped to bring a mine into production soon at the site, Placer Dome project geologist Glenn Shevchenko said it could be an exploration project at least for the next four years.

“We’re looking at a much more systematic approach,” he said. The work will include putting grids in the areas of interest, mapping this and bringing it up to the drilling stage.

Shevchenko said the current Yukon project is only the beginning for Placer Dome. The company plans property examinations and acquisitions in both gold and base metals.

“We’re looking at a long-term commitment here,” he said.

About $1 million in exploration has been approved on the Hyland Gold joint venture near Watson Lake, Doherty said. It’s a joint venture of Adrian Resources (ASE), NDU Resources (VSE) and Silverquest Resources (VSE).

NDU, the project operator, plans a 19,500-ft. drill program. Potential reserves are 6.8 million tonnes grading 2.05 gram gold per tonne.

All-North Resources’ (VSE) Wellgreen nickel-copper-platinum deposit in the Kluane region will see about $200,000 in metallurgical and wildlife studies this year, Phillips said.

Phillips said the company still needs to raise $3-5 million for a feasibility study. Probable and possible reserves are 50 million tonnes grading 0.36% nickel and 0.35% copper.

Phillips said All-North hopes to do diamond drilling this summer on the nearby Canalask nickel deposit, which has possible reserves of 500,000 tonnes grading 1.5% nickel.

He said $1-1.5 million is budgeted for drilling at NDU’s Blende lead-zinc-silver deposit in the central Yukon Territory.

Archer Cathro is shopping for funds for the Marg, a polymetallic massive sulphide deposit. The Marg, owned by NDU and Cameco, was optioned by Noranda (TSE) until last August.

Phillips said $750,000 is targeted for the Williams Creek copper deposit in the central Yukon, owned by Archer Cathro, with options to Western Copper Holdings and Thermal Exploration.

Preliminary reserves there are 7.9 million tonnes grading 1.13% copper. A 1.5-million tonne bulk sample was taken last fall and Western Copper is doing metallurgical surveys on it.

B.Y.G. Natural Resources is trying to raise funds for its Mt. Nansen gold deposit, Doherty said. The company released a feasibility study last year.

While Geddes Resources’ (TSE) Windy Craggy polymetallic deposit is in the northwest corner of British Columbia, workers fly in from Whitehorse and there are other economic spinoffs. Geddes plans at least $10 million in exploration this year, President Gerald Harper said.

Public hearings will be held this spring in Whitehorse and other communities, based on Geddes’ stage 1 environmental submission to the British Columbia government on its proposed copper mine.

Bremner said Cominco (TSE) has renewed its option for another year on the Tom lead-zinc-silver deposit in the MacMillan Press.

Canamax Resources (TSE), owner-operator of the Ketza River gold mine, is doing infill drilling and metallurgy on its one million tonnes of sulphide reserves, Bremner said.

The Yukon government has combined the Prospectors Assistance and Exploration Incentives programs into one new program with a $700,000 budget, a $500,000 cut over 1989-90.

But mining development officer Rod Hill said individual prospectors now qualify for a maximum of $10,000 a season, up from $5,500.

Hill said there’s a new category that allows prospectors and junior mining companies to continue to do work on new discoveries. Approved expenses (50%) are reimbursed to a maximum of $20,000.

Exploration companies still may apply for reimbursements on 25% of expenditures to a maximum of $50,000 a year. Hill said the limit for any one applicant has increased from $100,000 to $200,000.

Dave Downing, another mine development officer, said companies that “grub-stake” a prospector can now recover 75% of costs on approved programs.

Doherty said there is a lack of grassroots exploration in the territory, and that the government changes will help alleviate the problem.