Higher gold prices boost placer mining, exploration

Miners are generally an optimistic bunch, but figures presented at the Yukon Geoscience Forum Monday may add some weight to the idea that brighter days are ahead for the territory’s mining industry.

Miners are generally an optimistic bunch, but figures presented at the Yukon Geoscience Forum Monday may add some weight to the idea that brighter days are ahead for the territory’s mining industry.

In fact, 2016 has already been a strong year for placer miners, said Jeff Bond, head surficial geologist with the Yukon Geological Survey.

An early thaw, coupled with strong gold prices, a favourable exchange rate and steady fuel prices helped produce some of the best placer mining figures in a decade, Bond told delegates at a technical presentation in Whitehorse.

“All those things combined have really stabilized the industry in the territory, I would say, and in fact we’re seeing some growth in a lot of districts, so there’s some good news there,” he said.

Yukon placer mining operations pulled more than 65,600 ounces of gold out of the ground this year to date, worth more than $90 million, according to figures presented by Bond. Those are the best results for the industry since 2007 and 2016 marks the third consecutive years of placer mining growth.

“That will likely go over 70,000 ounces this year which is a really strong number,” Bond said.

Nearly half of that production — 49 per cent — came out of the Indian River drainage area south of Dawson, where production has more than doubled since 2010 to nearly 32,000 ounces.

Other major placer producing areas were the Klondike River — 17 per cent of production — and the Lower Stewart River — 14 per cent. All told, there were 170 operating placer mines in Yukon this year, plus another 22 exploration projects, Bond said.

“Placer mining is doing really well in the territory and hopefully this trajectory continues in the next few years,” he said.

On the hard rock mining side, “one of the more significant occurrences this year” was Goldcorp’s $520 million buyout of Kaminak Gold and its Coffee project near Dawson, said Scott Casselman, economic geologist with the Yukon Geological Survey.

That deal, combined with the political uncertainty created by the U.K.’s Brexit vote to leave the European Union, which is good for gold prices, helped exploration figures come in around $20 million higher than expected, Casselman said.

Exploration work will amount to around $61 million this year, while development will come in at around $22 million. Two-thirds of the exploration spending was for gold, he said.

“In early May it was not looking like it was going to be a banner year,” Casselman said, but an increase in gold prices turned that around. “Companies were able to raise financing through the summer and [that] changed things very dramatically. We saw a late-season surge from a lot of companies.”

However it isn’t all good news. Even though figures this year were stronger than expected, exploration and development spending in Yukon have declined for three straight years and are both roughly a quarter of their 2011 peaks of $300 million for exploration and $150 million for development.

Contact Chris Windeyer at editor@yukon-news.com.

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