Prospector cries foul over mining handouts

The Yukon government is giving away money to millionaires. That is how Wade Carrell sees the Yukon Mining Incentive Program. The territory doles out $1.8 million in grants annually through the program to encourage mineral exploration.

The Yukon government is giving away money to millionaires.

That is how Wade Carrell sees the Yukon Mining Incentive Program.

The territory doles out $1.8 million in grants annually through the program to encourage mineral exploration. The big winners, says Carrell, are publicly traded companies and well-connected industry insiders.

“We’re giving money from the needy to the greedy,” said Carrell, a prospector for 17 years. “Why would you give money to someone who doesn’t need it?”

Officials respond that Carrell misunderstands the purpose of the program. It’s an engine for economic development, not a charity. Grants are based on merit, rather than need.

And roughly half of 2010’s pot of money was devoted to helping prospectors start grassroots programs, said Energy, Mines and Resources spokesman Jesse Devost.

Proposals are vetted by a team of three geologists. But Carrell insists these evaluations are “very subjective.”

“The scales go back and forth at someone’s whim,” he said.

There are several big beneficiaries in the list of grant recipients for 2010.

BC Gold Corp. and its spin-off, Bling Capital, netted $250,000.

Eagle Plains Resources, and its spin-off, Copper Canyon Resources, received more than $200,000.

Bernie Kreft, a legendary prospector who often works with Eagle Plains, received more than $143,000.

And Shawn Ryan, who arguably became Yukon’s most famous prospector for discovering the White Gold property, netted more than $115,000.

Carrell particularly objects to publicly traded companies receiving these handouts. He figures they’d be doing the work anyway. If they need funds, they ought to raise them privately, he said.

“These guys don’t need taxpayers’ help. And I don’t think they deserve it.”

Carrell was offered $18,500 for two grassroots programs. But this money could only be spent on lab tests, because Carrell’s proposal didn’t pass the scrutiny of the evaluation panel.

He wanted the money to hire a helicopter pilot so he could sniff around two of his new, remote properties. In the end, he says he turned the money down.

In good years, Carrell received as much as $50,000 in grants. Not anymore.

“They froze me out,” he said.

Carrell knows approximately seven other prospectors in the same situation, he said. He recently met with Yukon’s staff geologists to appeal the decision, to no avail.

“The only thing we agreed to after an hour and a half was that we needed to go for a beer.”

He accuses others of gaming the system.

Grants aren’t given out to projects with budgets that exceed $200,000. So companies split up properties to maximize their take, said Carrell.

He sees the use of spin-out companies as another shell game to get around the annual contribution limit of $150,000.

Carrell also faults a broader trend he began to notice in the late 1990s: creeping credentialism.

Professional geologists now hold sway over the industry. He’s dismissive of their “fancy reports.”

“It doesn’t matter how much metal is sticking out of the ground. They’re completely blinded by models,” said Carrell.

He worries old-style prospectors are being purged from the field.

Maybe this is simply a sign that Yukon’s mining industry is maturing. But, to Carrell, it’s a sign of rot.

He takes a dim view of junior exploration companies, which he says are loath to hire a local prospector, like himself, who lacks professional designations. He learned the trade by taking several courses with Al Doherty, a veteran geologist.

Unsurprisingly, Carrell has found himself “on the out” with juniors ever since he threatened to sue a company that he had struck an option agreement with, because the company was slow to work the claim.

“Since then, nobody will talk to me,” he said.

He’s since grown disillusioned. Carrell sees most juniors as more interested in mining stock exchanges than precious metal. He suspects many flocking to the White Gold play are just riding the hype.

Not that mining has ever been free of opportunists. Carrell offers a quotation, usually attributed to Mark Twain: “A gold mine is a hole in the ground with a liar on top.”

Those Yukoners who have enriched themselves in the field have usually learned the big lesson of the Klondike Gold Rush: they mine the miners.

Ryan, who kick-started the White Gold staking rush, isn’t just a clever, industrious prospector. He’s also a shrewd businessman. When he strikes an option agreement, it usually includes strings that require his team to be hired on as a contractor during future exploration work.

Archer Cathro, Yukon’s most venerable geoscience outfit, also earns handsome profits by conducting geophysical testing for miners. In the process, its team has spun out a slew of junior mining companies of their own.

Naturally, these companies hire Archer Cathro to do their geoscience programs.

But Carrell doesn’t want to work for someone else. “I want to be the old-style guy. My thrill is finding something new, then finding something else new,” he said. “It’s the manly dream of going forth and digging up treasure.”

He knows that publicly airing his grievances likely won’t help his cause. “But someone’s got to be the radical that’s nailed to the stick.”

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