Mineral exploration expected to decline again in 2016

Early estimates from the Yukon government suggest that mineral exploration spending in the territory will decline dramatically this year.

Early estimates from the Yukon government suggest that mineral exploration spending in the territory will decline dramatically this year.

So far, the 18 largest advanced projects in the Yukon have estimated they’ll spend about $38 million on exploration in 2016. That’s down from a total of $65 million in exploration spending last year.

But Sue Thomas, spokesperson for the Department of Energy, Mines and Resources, cautioned that the $38-million estimate doesn’t include any new projects or exploration spending from smaller companies.

“There’s going to be exploration we don’t even know about,” she said.

Exploration spending has been dropping since 2014, when it totalled $80 million. And it seems that one company is responsible for much of the decline. Selwyn Chihong spent $32 million in 2014, and expected to spend about $40 million last year. But that number was revised down to $8 million by the end of the year.

Thomas said the company has put forward “almost a minimal estimate for this year.”

“We’re anticipating they might only do a million dollars worth of work this year,” she said.

Selwyn Chihong recently decided to delay development of its lead-zinc mine on the border of Yukon and the Northwest Territories by at least a year, citing low metal prices and poor economic conditions.

This year’s biggest spenders appear to be BMC Minerals, which has committed US $14 million to continue exploration and complete a pre-feasibility study at its Kudz Ze Kayah mining project, and Victoria Gold, which has announced a $3.6-million exploration program for a satellite zone near its shovel-ready Eagle Gold project.

The Yukon government’s numbers come in the wake of figures released by Natural Resources Canada, which estimates that the Yukon will see $56.4 million in exploration spending this year, down from $73.3 million in 2015.

Federal numbers are typically higher than territorial figures, as they include some additional expenditures that the Yukon government doesn’t count.

But the picture isn’t entirely bleak.

Wellgreen Platinum announced on Thursday that it has received a $10-million equity investment from billionaire investor Thomas Kaplan’s Electrum Strategic Opportunities Fund L.P.

The mining company owns a property near Burwash Landing that it hopes will produce platinum, palladium, gold, nickel and copper.

Electrum will own a 26.9 per cent equity interest in the company, or a 40.6 per cent equity interest if all warrants are exercised.

Electrum is the same hedge fund that contributed to a $22.5-million investment in Kaminak Gold Corporation last October.

“It allows us to consider additional studies we can do to advance the project,” said Wellgreen’s interim president, John Sagman.

He said the company wasn’t planning to do much exploration in 2016, but with this new financing, it may now consider a $1- to $2-million program this summer.

Sagman also said he sees Electrum as a long-term investor.

“They have the capacity to be able to finance our project as it moves through the next stages.”

Both Sagman and Thomas said this week’s Prospectors and Developers Association of Canada mining conference in Toronto was very successful. Thomas said there’s reason to believe “that this will be a better year than was originally anticipated.”

Earlier this week, Premier Darrell Pasloski sent a letter to Prime Minister Justin Trudeau, urging him to renew Canada’s mineral exploration tax credit as a way of supporting junior mining companies.

“Without juniors willing to take significant risk, there would be no mining industry in Canada,” he wrote. “And juniors can only take those risks when we create incentives, like the mineral credit.”

Before the election last year, Trudeau offered praise for the tax credit in an exchange with the Northern Miner.

He said the credit “was first introduced in 2000 by the previous Liberal government and we continue to support this important tax measure to encourage increased investment in the mining industry.”

Liberal MP Larry Bagnell also said he supported the credit during his election campaign.

Contact Maura Forrest at


Get local stories you won't find anywhere else right to your inbox.
Sign up here

Comments are closed

Just Posted

Recount planned following Carcross/Tagish First Nation’s close election for chief

Lynda Dickson received 109 votes, with runner up Danny Cresswell just five votes behind

Yukon government releases community safety plan for Whitehorse Emergency Shelter

The government is now reviewing the plan and working on creating an implementation group


Wyatt’s World for July 3, 2020

Zoning amendment approved for Black Street property

Bylaw change will allow suite to be built over existing garage despite side, rear setbacks

Yukon borders to reopen July 1, masks required at all Yukon airports

Yukon moves to Phase 2 of reopening on July 1

Vuntut Gwitchin councillor submits resignation

Vuntut Gwitchin councillor Cheryl Charlie has submitted her resignation, leaving Chief Dana… Continue reading

Ancient lake bed sediments, unusual plants are markers of the Takhini salt flats

It’s one of the Yukon’s best open geological secrets, a well-known but… Continue reading

Yukon University hires director of finance

Yukon University announced in a press release on June 29 that Sheila… Continue reading

Diamond Tooth Gerties to reopen

The Klondike Visitors Association (KVA) announced in a press release on June… Continue reading

Newly-elected Liard First Nation chief accuses YG of interfering with election

Stephen Charlie says YG’s announcement days before election endorsed previous chief

COMMENTARY: Shifting the prevailing narrative of substance use

Blood Ties Four Directions Centre Special to the News Rarely does society… Continue reading

Alexco nearing production at Keno Hill mines

Alexco Resource Corp. is entering the final phase of development at its… Continue reading

Most Read