An American investment manager has cautioned the Yukon to work with First Nations and other stakeholders to reduce barriers to investment in mining exploration.
Bill Lupien has been playing the stock markets since 1965. In 2005, he started a fund that invests in hard assets, and in junior mining in particular.
He travelled to the Yukon to deliver a cautionary tale about the challenges ahead at the Yukon Geoscience Forum last Saturday.
The world economy since 2008 has been rough, said Lupien in an interview this week.
“Investors have pulled back from the more speculative types of investments.”
That includes junior mining companies that don’t have a mine in production or do not have a relatively short timeline to get a mine into production.
Although a gold exploration boom has bolstered the Yukon, the disappearing investment dollars have certainly been felt over the last couple years. But the barriers to investment are solvable problems, said Lupien.
One challenge is the lack of cheap energy.
He attended this week’s presentation by David Morrison, the president of the Yukon Energy, and was surprised by his findings.
“They were pretty clear that there’s limited capacity in terms of electric energy.
“It was a little bit more stark than even I was anticipating, frankly, in that they’re running out of capacity even for what I’ll call normal use - not even counting the mining industry.”
The lack of capacity is one issue, but the fact that the Yukon’s power grid is not connected to any others is perhaps even greater.
Without knowing exactly how much energy is going to be demanded in the future, Yukon Energy cannot plan to build capacity. If it ends up with an excess of power, there’s nowhere for it to go.
“What are they going to do with it if they can’t sell it?” asked Lupien.
Mining operations require a huge amount of energy, and uncertainty in that industry brings uncertainty to Yukon Energy’s planning.
Access is another issue. With so much land and so few roads in the Yukon, getting to mineral claims can be an expensive proposition.
And year-round access poses challenges in the Yukon, which can be a deterrent for investors when compared with other jurisdictions.
“On the positive side, you have tremendous resources up there,” said Lupien. “So it needs to be developed, and it needs to be developed in a co-ordinated and thoughtful way.”
That requires collaboration between governments, First Nations and industry.
Lupien is concerned by the Kaska’s announcement that they will consider a moratorium on mineral exploration and a road blockade, he said.
“Any kind of conflict like that, in any jurisdiction, raises a red flag for capital, and people ask questions.”
And Lupien is no stranger to conflict. He has sat on boards for mining companies across the globe, including war-torn places like the Ivory Coast.
Lupien has no investments that will be affected by the outcome of the Peel plan, but it still concerns him as a background issue to what’s going on in the Yukon.
He wants to see that process done in a thoughtful way that respects the environment and First Nations.
He doesn’t want to see it end up in court. At age 71, he’s never filed a lawsuit.
“I don’t believe that’s how you solve problems. So I’d like to see people sit down. You’ve got a lot of intelligent people and there’s no reason they can’t sit down and work these things out. Legal cases drag on and the only winners are the lawyers.”
As a hunter and outdoorsman, Lupien believes in environmentally responsible development, he said.
He owns a cattle ranch in British Columbia. His home state of Idaho is rich with wilderness, and that is part of its value, he said.
“I’m optimistic for the Yukon, but I do think they’re going to have to get out in front of these issues,” said Lupien. “Otherwise, I’m going to tell you what’s going to happen. The amount of speculative money that’s going to be invested in exploration is going to go down, and go down seriously.
“It’s something that can be solved. It should be solved. And the good news is that there’s plenty of capital around. So go get the capital and get on with it.”
Contact Jacqueline Ronson at
jronson@yukon-news.com