Golden Predator is pushing to get its Brewery Creek mine site into full operation by 2014.
Fresh from a corporate restructuring, armed with a $35-million loan and boasting a new gold discovery at Brewery Creek, CEO Bill Sheriff said the company’s focus for the coming year is on turning potential into profit.
“Right now, it’s all hands on deck to get Brewery Creek into production to benefit not only our company, obviously, but also the Tr’ondek Hwech’in First Nation and the Yukon people with tax revenues. The answer to everyone’s problem is production,” Sheriff said.
Last year was one of the worst investment markets he has seen in 30 years, said Sheriff. Exploration was down across the territory in 2012, in part because companies are having such a hard time convincing investors to take a risk.
“The investors back east cut back the exploration spending considerably. All exploration companies are dependent on selling stock for financing, with the exception of Alexco and Capstone, which are in production and have (their own) revenue. The rest of us are at the mercy of the markets,” Sheriff said.
And right now, with the Yukon government fighting with First Nations on a number of development fronts, including the Peel watershed in the north and Kaska territory in the southeast, many investors are wary of plunking down money.
“Those issues will get dealt with, and the Yukon is still one of the best places on earth to be, but investors are impatient. They want things slightly quicker than instantly, and the mining business is not a place for instant gratification,” he said.
Golden Predator trimmed its own exploration operations last year by almost two thirds. This year Sheriff said there won’t be any exploration at all unless the investment market changes dramatically.
Instead, Golden Predator will focus its efforts on making its own money, rather than asking investors for theirs.
The company wants to get the ball rolling soon. It plans to file amendments to its quartz-mining licence - which would allow more development at Brewery Creek - in the next few weeks, and hopes to begin construction at the site sometime this year. Full production is expected to begin by 2014.
Brewery Creek sits about 55 kilometres east of Dawson. It was run as an open-pit gold mine by Viceroy Minerals Corp. from 1996 to 2002, when it closed because of falling gold prices.
But, Sheriff said, it was never put into full closure because the intent was always to reopen when gold prices allowed. The site still maintains many of the permits needed to resume full operation, meaning that Golden Predator doesn’t have to wade through as many applications before it starts construction again.
Under Viceroy, the site produced more than 280,000 ounces of gold. Since Golden Predator started sniffing around the property, it has discovered around 414,000 ounces of oxidized gold deposits, but that number could be much higher, especially since the company is still making new finds.
Sheriff is especially excited about the new Lone Star Zone discovery, an area of “significant mineralization” in the southeastern corner of the Brewery Creek property.
They will be shifting the focus away from their other locations like Grew, Cache and Clear Creeks, keeping Brewery as the top priority.
The extra $35 million won’t hurt. The loan, arranged through mine-finance group Red Kite, was used to finalize the purchase of Brewery Creek from Alexco Resource Corp., and will also help with construction costs as the project moves towards production, Sheriff said.
It’s too early to guess at the number of jobs that could be created or the potential lifespan of the mine, because the company is still completing studies needed to apply to the Yukon Environmental and Socio-Economic Assessment Board, said Sheriff. Similar mines in the Yukon have created between 80 and 100 jobs. Golden Predator’s socio-economic accord with the Tr’ondek Hwech’in First Nation means that many of the jobs created would go to locals in the community and around Dawson.
They’ve also brought some new blood onboard. Timothy Leybold is the company’s new chief financial officer, bringing 20 years of experience as a CFO for Gold Canyon mining in Reno, Nevada.
And Jeff Cary, who has worked with Golden Predator for the past few years, got a bump up to vice-president of exploration.
“I’ve known Jeff for 30-some years now. Having him up here in the Yukon certainly gives us proven ore-finding abilities. He’s been up here working with us for the past two or three years, and we decided to advance him in recognition of his abilities and his commitment to the project,” Sheriff said.
Contact Jesse Winter at
jessew@yukon-news.com