Higher prices for precious and base metals, gemstones, coal and other minerals are luring explorers back to the Yukon Territory, and this resurgence in mining activity has government officials grappling with ways to encourage the miners to stay.

The number and variety of mining exploration projects under way this year bodes wells for the territory's future and for government's chances of re-awakening what many call a sleeping giant - Yukon's mining industry.

"Yukon is coming back," says Ivan Jacobsen, a stockbroker at Canaccord Capital in Whitehorse. "For a long time the territory was a 'no-fly zone' to mining companies. But when I first came here in 1975, there were eight mines going. The only one left is North American Tungsten, and it just started up again."

"Things are changing in the Yukon. The South is looking north," says Rob Harvey, general manager of Yukon Engineering Services Inc. "We are on the cusp of an economic explosion, one we expect to last, maybe for decades."

Mining Mecca

Mining activity in Yukon actually pre-dates the arrival of Europeans. First Nations people recovered copper nuggets from the White River area in southwestern Yukon before explorers from the Hudson Bay Co. first reported fine gold on the banks of the Pelly River about 1850. Sporadic gold discoveries ensued until 1896 when prospectors found nugget gold on Rabbit Creek (renamed Bonanza) and set off the fabled Klondike gold rush that brought thousands of treasure seekers to both Yukon and Alaska.

More than 100 years later, mining is still Yukon's bread and butter.

"We see tremendous opportunities for all of us in the Yukon," Premier Dennis Fentie told attendees at the Opportunities North 2005 conference in Whitehorse Sept. 21.

"Exploration in our oil and gas and minerals rich land is rising. This means greater revenues and the creation of new jobs ... We hope to develop sustainable and equitable industries as we go forward."

Fentie envisions his government maintaining the momentum by providing mining incentives, untangling regulatory snarls, training the labor force and using the territory's surplus hydropower to develop new mine projects.

Yukon already has settled its land claims issues with First Nations within its borders. It boasts the lowest mining taxes in Canada and a 25 percent tax credit on eligible exploration spending. The territory is close to deepwater, ice free ports in Alaska and British Columbia and is planning to expand its power grid, which currently has 20 megawatts of surplus hydropower to sell.

The government is also building and rebuilding transportation infrastructure, including a possible railroad, with the help of funding from Ottawa, and in partnership with Alaska. These projects include mining-enhancement expansion of deepwater ports at Skagway and Haines, and studying construction of an Alaska-Canada rail link as well as the much-publicized Alaska natural gas pipeline project.

Renewed rush

With demand for base and precious metals on the rise, the territory's potential for mining activity is soaring, says Jim Kenyon, Yukon's Minister of Economic Development. "We're looking for major diversification, not just one big mine but many mines," he explains. "We had one of the biggest zinc operations in the world, the Faro Mine. It went down in late 1996-early 1997. Faro was a town of 2,000, and all of sudden it was down to 150 residents and all of them on welfare. This boom and bust cycle has been our biggest challenge."

Though small potatoes in comparison with Canada's total projected 2005 mining exploration spending of $1.5 billion, exploration spending in Yukon gives territory officials reason to smile. Some 45 companies committed $32 million to undertake drilling programs in Yukon this year, of which explorers earmarked $15 million for advanced exploration in a half-dozen projects. That's a 45 percent jump from exploration spending of $22 million in 2004 and a 146 percent leap from $13 million in 2003.

New mining claims staked in Yukon also skyrocketed during the past two years, with 9,061 claims staked in 2004, or nearly triple the 3,571 claims staked the previous year. Overall, total claims in good standing have grown substantially in recent years to nearly 49,000, though they are still below the 1997 peak of about 73,000 claims.

Yukon's latest mining rush is bringing prospectors in search of much more than gold. Zinc, copper, molybdenum, silver, selenium, uranium and even coal are attracting savvy juniors. The action is also drawing a few wise majors, including Kennecott, Newmont, Northgate and Teck-Cominco.

Recent projects have uncovered surprisingly high-grade deposits across the territory in at least 84 areas, 13 of which contain substantial amounts of coal.

About 60 percent of recent investment has gone into gold plays, while 25 percent sought base metals, mainly zinc, copper and lead, and 15 percent went in search of gemstones, primarily emeralds.

Glittering gold

Gold exploration continues to focus on intrusion-related deposits, mainly related to mid-Cretaceous plutons in the Tombstone Gold Belt portion of the Tintina Gold Province, according to government geologists. Though this belt of gold occurrences as a whole is perceived to be at an advanced stage of exploration, the reality is quite the opposite, they say. Only six properties have received more than 5,000 meters of drilling.

Some of the more advanced gold projects include Brewery Creek mine and the Red Mountain project where exploration began in the early 1990s. StrataGold Corp. recently acquired the Dublin Gulch deposit and the Clear Creek property, two advanced properties within the belt that have numerous high-quality exploration targets and potential for resource expansion.

Others have expanded the search for gold in Yukon, looking for various deposit types, such as gold-rich porphyry targets in the Stewart River area south of Dawson and in the Dawson Range Mineral Belt; orogenic gold veins in the White River and surrounding areas and in the Klondike; and epithermal gold-silver mineralization at the Grew Creek deposit near Ross River.

Meanwhile, placer mining remains a vibrant part of the mining sector. More than 16.5 million ounces, or 513 tonnes, of placer gold have been produced to date in Yukon - at today's prices that would be worth more than $7 billion.

In 2004, about 500 people worked at 163 small, mostly family-run, placer mines mostly in the Dawson Mining District and together, produced 101,108 crude ounces of gold, or nearly double the sector's output of 50,888 ounces the previous year.

An upsurge of placer exploration last year stemmed largely from Boulder Mining Corp.'s exploration of a prospect in the Indian River areas south of Dawson City. A total of 795 placer claims in three zones were staked on a 21-kilometer stretch of Indian River and cover 8,300 hectares.

Massive metals

Base-metal exploration also mounted a significant comeback in 2004. The Finlayson Lake Volcanogenic Massive Sulphide District was the focus of renewed exploration after a lull of several years. The largest program in the district was conducted on the Wolverine deposit by Expatriate Resources, which since has changed its name to Yukon Zinc Corp. The company, which is eyeing first production in late 2007, controls more than 725 square kilometers in the Finlayson District, including favorable host rocks for VMS deposits in Kudz Ze Kayah and Thunderstruck (the newest discovery).

"After Kudz Ze Kayah was discovered in 1994, we knew there would be others," Yukon government geologist Michael Burke told Mining News after a visit to Yukon Zinc's Wolverine deposit. "These types of deposits don't occur in isolation. So we went from zero understanding to a very good understanding of the area in a decade."

The first pass of exploration in the mid-1990s discovered four significant massive sulphide deposits, including Wolverine and Kudz Ze Kayah, totaling more than 20 million tonnes.

Burke said VMS deposits like them typically occur within a 20-kilometer-diameter area, and the Finlayson District is now believed to contain about 100 million tonnes of the mineral-rich ore.

"The deposits are bigger and the grades are better than average, but the real big day will be if a big discovery is found here. It's a very youthful district so far," Burke added.

Exploration for colored gemstones, mainly emeralds, is ongoing. True North Gems is conducting bulk sampling, core drilling and prospecting on the Tsa da Glisza project, in the Finlayson Lake District. Several other companies also have joined the hunt for gemstones.

Farther north, explorers are excited about a sedimentary exhalative deposit in the Selwyn Basin, which also extends westward into Alaska and hosts the giant Red Dog mine near Kotzebue. Located in the world-class zinc-lead-silver Howard's Pass District, the SEDEX deposit is believed to contain a resource of 55 billion pounds of zinc and 20 billion pounds of lead. Yukon geologists say it likely ranks as the largest mineral deposit of its type in the world.

Explorers have drilled less than half of Howard Pass' favorable strata, suggesting its resource inventory will grow with more drilling, according to Pacific Resources Ltd., a company currently exploring the district. Published estimates indicate the district's total resource could range up to 1 billion tonnes.

This year, exploration has extended later into the autumn than ever before, Burke says. "One, two, three, four drilling programs are still going on, and Cash Minerals just started a late-season drilling program on one of its uranium targets," Burke told Mining News Oct. 17.