One of the world’s largest gold producers has agreed to invest up to $53 million to explore Goldstrike Resources’ Plateau project east of Mayo.
Newmont Mining has struck a deal with Goldstrike to invest an initial $6 million to fund a 2017 exploration program on the Plateau property.
Newmont may subsequently choose to invest another $25.5 million by 2021, which would give the company a 51 per cent ownership stake in the Plateau property.
If Newmont decides to develop a mine on the site, its stake could increase to 80 per cent with an additional $21.5 million in exploration spending by the end of 2027.
Jeff Stuart, who’s managing investor relations for Goldstrike, said it’s very significant that a company like Newmont has taken an interest in the Plateau property.
“They don’t work in the Yukon and they haven’t really done anything like this in a long time,” he said.
Newmont Mining used to own the Hope Bay gold mine in Nunavut, and still has a stake in the project. But this is the company’s first foray into the Yukon.
“The Yukon is a stable mining jurisdiction, so it’s attractive to us on many fronts,” said Newmont spokesperson Omar Jabara.
He said many global mining companies are looking for opportunities in friendlier, more stable jurisdictions, including Canada.
Last month, the Fraser Institute released its 2016 annual survey of mining companies, which ranked Yukon as the 15th-most attractive place in the world to do mining, down from 12th spot in 2015.
Saskatchewan and Manitoba were ranked the two best spots in the world to mine, based on the institute’s investment attractiveness index.
Newmont’s announcement follows other major mining investments in the Yukon in the last year. Last May, Goldcorp announced plans to buy Kaminak Gold Corp. and its Coffee site near Dawson City.
In December, Agnico Eagle Mines announced a $14.5-million investment in Yukon’s White Gold district.
And last month, Victoria Gold Corp. announced nearly $300 million in financing from French multinational bank BNP Paribas.
Stuart said Newmont’s decision is a good sign for the territory’s mining industry.
“There’s money at the door,” he said. “It’s just a question of who’s going to be next to the dance.”
In a statement released March 7, interim Yukon Party leader Stacey Hassard said the agreement is “another sign of optimism in our territory and hopefully a good sign of things to come.”
In more positive news for the industry, Natural Resources Canada is projecting that the Yukon will see $94.1 million in mineral exploration spending this year, up from $87.9 million in 2016 and $92.2 million in 2015.
This week, the federal government also announced it will extend the mineral exploration tax credit for another year. The tax credit is intended to help junior mining companies attract investors.
Contact Maura Forrest at email@example.com