The Yukon government has revised its estimates and now says mineral exploration and development spending in the territory has declined significantly since last year.
The Department of Energy, Mines and Resources estimates that mining exploration expenditures will total just $61 million this year, down from $80 million in 2014.
Development spending is estimated at $27.5 million, down from $50 million last year.
These figures are significantly lower than the department’s earlier estimates. As recently as last week, the government was still predicting that exploration and development spending would reach $100 million and $44.5 million, respectively.
Lara Lewis, the head of minerals geology with the Yukon Geological Survey, said estimates can change abruptly when the different mining companies update their spending intentions.
She said the department revises its numbers periodically based on news releases and management discussions with the companies. But she said some numbers still haven’t been updated since the beginning of the season.
“You’re relying on (the companies) to really respond to you,” she explained.
This year, the decline in spending can largely be attributed to two companies: Selwyn Chihong and Capstone Mining.
Selwyn Chihong initially planned to spend $40 million on exploration this year, up from $32 million in 2014. But it now reports that it will spend just $8 million in 2015. That alone accounts for most of the decline.
Capstone’s Minto mine was responsible for the bulk of this year’s development spending, and it has also revised its estimates downward.
The territory’s updated estimates have been released in the wake of new numbers from Natural Resources Canada, which recently revised its mineral exploration estimate for the Yukon to $104.8 million, down from $126 million earlier this year.
The federal numbers are typically higher than the territorial figures, as Natural Resources Canada includes spending on road development and environmental baseline work.
Both federal and territorial figures are still subject to change. Lewis said the Yukon government will have final numbers in another month.
Ideally, Lewis said, she’d like to see exploration spending at about $100 or $150 million. But she said people often make the mistake of comparing current expenditures to the numbers from 2011, when exploration hit a record high of about $300 million.
“2011 was an anomalous year,” she said. “I don’t think we’ll see that again anytime soon in my lifetime.”
She added that in 2011, there were a lot of inexperienced companies building camps and drilling for deposits that weren’t really there. She said the Yukon shouldn’t be striving for that kind of activity. “We don’t want it to be like that year.”
Samson Hartland, executive director of the Yukon Chamber of Mines, said that despite the low numbers, the fact that there are a number of mining projects in the works is a reason for optimism. “It’s exciting to see that when things do turn around, we’ll be in a better position than we have been in a long time.”
Though it’s been a disappointing year for hard-rock mining, the Yukon’s placer mines have fared better. In fact, the industry’s production value of nearly $70 million is the highest it’s been since 1989, said the Yukon Geological Survey’s head of surficial geology, Jeff Bond, at the Yukon Geoscience Forum & Trade Show this week.
Bond said there are 160 active placer mining operations at any time in the territory. He explained that the banner year is partly the result of low fuel prices and the low Canadian dollar. If the Canadian and U.S. dollars were at par, he explained, this year’s production value would be closer to $52 million.
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