Jittery investors slow Yukon’s mineral exploration

It was a challenging year for the Yukon's mineral exploration industry. At least that's what Lee Pigage, the head of mineral services for the Yukon Geological Survey, is telling attendees at the annual Mineral Exploration Roundup Conference.

It was a challenging year for the Yukon’s mineral exploration industry.

At least that’s what Lee Pigage, the head of mineral services for the Yukon Geological Survey, is telling attendees at the annual Mineral Exploration Roundup Conference this week in Vancouver.

“There was still a very decent amount of expenditure (in 2012) but it was about half of what 2011 was,” he said.

With more than $300 million in expenditures, 2011 was a record-breaking year for the Yukon.

Last year only saw $146 million in expenditures, which is still good, but a lot less than the $400 million that Natural Resources Canada projected.

Slumping equity markets played the biggest role in the slowdown, said Pigage.

“Its challenging in a number of ways, but what we keep hearing is that investors are very skittish right now and are not willing to do risky investments, and exploration would have to be considered a risky investment,” he said.

Hosted by the Association for Mineral Exploration British Columbia, Roundup is the second-largest mining conference in Canada.

Its focus is more on geology than the larger investment and trade show put on by the The Prospectors and Developers Association of Canada, which will be hitting Toronto in March.

Roundup also lavishes attention on western Canada, including the Yukon.

On Monday there were a lot of Yukon-focused activities going on, including a presentation by Pigage that gave a rundown of the state of the territory’s mineral exploration industry and geology.

For the rest of the week Pigage will man an information booth to answer questions about the Yukon from some of the 7,000 industry players that are attending this year’s conference.

Although mining expenditures were down last year, the Yukon was hardly a bad news story.

“What is good is that there’s been this boom, but now some of the companies are starting to release estimated resources, so there’s actual numbers that can be used to generate interest in their proprieties,” said Pigage.

Just last month, Kaminak Gold Corporation announced an inferred resource of more than 3 million ounces of gold at its Coffee Gold project near Dawson City.

“Which is pretty good,” said Pigage. “I wouldn’t sneeze at it.”

Although the number of claims staked was down last year, the Yukon was still breaking records.

There were 254,896 mineral claims in good standing as of November 2012. That’s the most there have ever been.

However, Pigage expects that number to drop down over the next year, but that’s still not bad news either, he said.

“The interest was so high in 2011 that companies were staking first and would then go and see what they found. They would stake it just on speculation because they didn’t have the time to run a summer program to evaluate what they were interested in,” said Pigage. “Companies have got a lot of the good ground and now they’re just evaluating what they have and as the exploration boom cycle goes on you’re going to see companies consolidating their claims a bit.”

It was also a good year for the Yukon’s placer miners, although a cold spring and floods in June made for a slow start to the season.

Even still, 2012 still saw a 10 per cent increase in production with 51,679 crude ounces for the year.

While that is still below the 10-year average of 60,000 crude ounces, high gold prices – US$1,649 per ounce – meant 2012 was the sixth highest year in terms of value in the last three decades.

There are also three active hard rock mines in the territory and several more projects going through environmental review process.

Just this week, the Yukon government granted approval for an expansion of Alexco’s Keno Hill operation.

All that means there is a lot of interest in the Yukon at this year’s conference, but there always is said, Pigage.

“We, in terms of looking at the entire world, are a favourable site for exploration in mining industry, he said. “We don’t have kidnappings and we have a stable democratic government.”

The Yukon also has transparent and modern environmental legislation and, thanks to the Yukon Geological Survey, a good base of information on the territory’s geology, said Pigage.

And then there’s the mystique of the Klondike.

“There’s always been this question of where the mother lode is,” said Pigage. “Interestingly enough our research that we’ve done on this says that the mother lode is locally sourced.”

That’s at odds with speculation that Shawn Ryan’s recent discoveries in the White Gold district may have uncovered the Klondike’s mother lode.

Instead, “the mother lode would have come from the area right around Bonanza Creek or Hunker Creek,” said Pigage. “It’s still out there somewhere.

“Essentially, we’re discovering new mother lodes. It’s very exciting for the prospectors.”

Contact Josh Kerr at

joshk@yukon-news.com