The Yukon’s exploration boom may be slowing, but it’s got a long way to go before it busts, says Mike Kokiw, the executive director for the Yukon Chamber of Mines.
But while the sun is shining on the territory’s economy, the rest of the world is in the shade.
With the international economy sputtering, junior mining companies, which make up the bulk of the Yukon’s industry, are having a hard time finding financing, said Kokiw.
“There’s just not a lot of cash out there,” he said. “A lot of the equity markets have just been hit really, really bad.
“If (exploration companies) didn’t have their money around February or March they probably didn’t get the cash secured for the year.”
In 2011 the chamber was projecting $250 million in exploration for this year. Those projections have now been dialed back to just $200 million.
But there’s no need to worry, said Kokiw.
That $200 million is still double the Yukon’s 10-year-average.
“If we go back, even four years ago, we were looking at about $46 to $50 million as normal,” he said. “Our downturn is better than most people’s booms, which is kind of nice.”
And production is going strong.
With three active hardrock mines in the territory, production is worth about $600 million.
That’s five times the amount it was only a few years ago, said Kokiw.
And it’s those companies that are going to be the big spenders in exploration this year, he said. That’s both because their operations give them the cash flow to do that kind of expensive work, and because they’re going to be looking at extending the life of the mines they already have.
“You have to remember too, most of the staking that goes on doesn’t necessarily mean that they’re looking to put a mine in there,” said Kokiw.
Much is done simply to assess the land, he said.
“We have very little baseline data across the Yukon,” said Kokiw. “We don’t really know what’s in the ground.”
And there is an upside to the slowdown.
It gives the territory a chance to shore up its infrastructure, which is what keeps the economy moving, he said.
“A lot of the reasons why we haven’t seen this kind of boom in the past is because we just haven’t had access to a lot of the infrastructure we have now,” said Kokiw.
Although things have been relatively slow recently, the chamber is predicting a gainful next few years.
“A lot of the new methods that we’re using now are so much more environmentally friendly and much cheaper, so a lot of the projects, that perhaps weren’t able to go forward in the past, are now going to be possible because of those new technologies, and the way we do business here in the Yukon,” said Kokiw. “We’re getting quite a name for ourselves.”
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