Mineral exploration spending in the Yukon is expected to top $300 million for 2011, making it the busiest year on record.
That’s nearly twice the previous high of $157 million in 2010, and a huge jump from a decade ago when annual exploration spending was in the single digits, according to the government’s latest economic forecast.
More than 110,000 new quartz claims were staked from January to November. That broke the previous record of 83,161 claims staked in 2010.
With nearly 250,000 claims in all – each 51 acres in size – this means that more than a tenth of the territory’s land mass has been staked.
How much mining this staking frenzy produces remains to be seen. Only a tiny fraction of exploration plays ever turn into an operating mine. It will be several years before many companies have a chance to properly poke around the properties they’ve staked.
Much of this year’s exploration has been fuelled by the meteoric rise of the price of gold. It peaked at US$1,920 per ounce in September but has since retreated to about US$1,600.
The exploration companies that spent the summer drilling and collecting soil samples are beginning to tout their finds. So far, nothing has been as significant as the discovery that started it all: Shawn Ryan’s finding of the multi-million dollar White Gold deposit, now in the hands of mining giant Kinross.
In May, Ryan was featured on the front cover of the New York Times Magazine, securing his status as a local celebrity.
The exploration boom created a windfall for helicopter companies, restaurants and hotels. At a time when much of Canada’s economy is stalling out, the Yukon’s continue to grow, with retail spending across the territory up by nearly 10 per cent since 2009.
The territory’s the only jurisdiction, other than Alberta, to see its gross domestic product grow over the past seven years – growth largely driven by mining and exploration.
Total production at the Yukon’s three operating mines is forecast to be $420 million in 2011. That’s down from $560 million originally forecast by the government, largely because of delays at Yukon Zinc’s Wolverine mine. It is still struggling to meet its production targets.
But Yukon mineral production is still way up from $260 million in 2010 and $251 million in 2009.
Capstone’s Minto mine, Alexco’s Bellekeno mine and Wolverine collectively employed between 700 and 750 people, either directly or by contract, the government says.
And the industry is expected to keep on growing over the next decade, says the Conference Board of Canada and others.
Victoria Gold is expected to be the next mine to go into production. It’s aiming to open its Eagle mine, near Mayo, by 2014.
That region was also the other hot spot for exploration in 2011. ATAC Resources is proving up its Rau gold deposit, northeast of Keno City. Its work sparked a staking rush in that area as well.
Near the Northwest Territories border, Selwyn Resources is developing its lead-zinc property. It has partnered with Chinese investors and launched advanced exploration work on the property. In the summer it says it dug a two-kilometre tunnel. It hopes to have a large, underground mine open by mid-2014.
The busiest operation in the White Gold district was Kaminak Gold. It says it spent $15 million drilling 40,000 metres on its Coffee property.
Kinross reports it also had a busy summer, drilling 15,000 metres at its White Gold property. But because the mining giant isn’t under the same pressures as mining juniors to tout findings at a single property, they’ve been keeping relatively quiet.
Golden Predator, an ambitious junior that turned heads when it cleaned out the mining recorder’s office of staking tags last winter, added to its extensive holdings. It has claimed a big, 1,500-square-kilometre swath in the Livingstone Creek area, north of Whitehorse. The company also has plans to reopen
the historic Brewery Creek gold mine near Dawson City.
Western Copper and Gold is focusing on developing its Casino project and is shooting to have a bankable feasibility study complete by the end of 2012. It says the massive, low-grade copper deposit, if developed, would employ 1,400 workers during the peak of construction and 650 workers once in operation. The mine is expected to have a 30-year life.
Similarly, North American Tungsten is looking for a partner with deep pockets to help develop its Mactung tungsten deposit near the Northwest Territories border, 250 kilometres northeast of Ross River.
The company currently operates its Cantung mine, which also straddles the Northwest Territories border, 300 kilometres north of Watson Lake. This year the company posted its first-ever profit.
South of Whitehorse, New Pacific Metals worked on the Mount Skukum property. It hopes to reactivate the gold mine. Its underground activities halted in the fall after an investigation by the Yukon Workers’ Compensation, Health and Safety Board. Its permit ran out in October and the company has now applied to renew it.
Mining and exploration also helped create some of the year’s biggest news stories in the Yukon for 2011.
Clashes between miners, First Nations and conservationists about whether the Peel Watershed should be developed became one of the defining issues of the autumn territorial election.
The NDP also called for miners to pay more royalties – demands that the re-elected Yukon Party has resisted.
And critics of free-entry staking found a new target when Arcturus Ventures staked a claim less than a kilometre from the Spruce Hill subdivision outside Whitehorse. A public flap and objections by city council prompted the company to back off plans to drill the property.
Increased mining activity has also contributed to the Yukon’s looming power pinch. And a shortage of housing and skilled workers in the territory has led to fears that if the Yukon’s mining boom continues to grow as predicted the territory may not be prepared to reap the benefits.
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