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By Steve Sutherlin
For Mining News 

Yukon exploration spending up 141 percent

Minerals advisory board says sustained investment needed for sustainable mining industry; spending hits C$53 million in 2005


Last updated 6/25/2006 at Noon

Mining exploration spending in the Yukon Territories during 2005 was estimated at C$53 million, up 141 percent over the previous year, according the Yukon Minerals Advisory Board annual report issued June 1.

The report said that was a significant improvement over prior years, but it represents just four percent of the total exploration investment in Canada in 2005, which was $1.3 billion. The lion's share went to Ontario, British Columbia, Quebec, Saskatchewan and Nunavut.

Must continue at 2005 levels

The report said it is essential that annual spending continues at 2005 levels to create a sustainable mining industry in the province.

"It is an amount which should be viewed as the minimum sustained annual exploration investment required to ensure over time, competitive discovery rates and ultimately, development of a sustainable industry," the report said. "That such mineral wealth exists in the Yukon is not in dispute, it is merely a question of creating a business environment that enables and encourages increased exploration investment as well as responsible development of new discoveries."

Approximately 70 percent of 2005 Yukon exploration expenditures were invested in exploration for base metals, 20 percent for precious metals and the remainder on gemstones and coal.

More than 80,000 meters of drilling were completed in the Yukon in 2005, with 69 exploration and development projects underway, directly employing 450 people.

Permitting issues

The report said despite some progress, the Yukon government needs to improve its exploration and mine-related permitting processes.

"It would appear that Yukon government needs to revisit matters related to integration of the new Yukon Environmental and Socioeconomic Assessment Act into the regulatory authorization processes which are directly under the control of the Yukon government," the report said. "The effect has been to burden the industry with permitting timelines and complexities which effectively double the time periods previously required to obtain simple authorizations. The process for more complex authorizations remains as yet, untested."

The uncertainty and delay, especially in a jurisdiction with abbreviated field seasons, potentially places the Yukon in an uncompetitive position relative to other jurisdictions in Canada, the report said.

"Notwithstanding these problems and assuming the Yukon acts quickly to reverse the dysfunctional aspects of its response to the new permitting regime, the Yukon will remain an increasingly attractive place to do business, will attract increasing investment, and will enjoy continued measured advancement of several mining projects hoping to meet initial production targets as early as 2007," the report said.

Port, power needed

Looking forward, the report said, the Yukon will need a deepwater port with facilities capable of handling ore concentrates to get products to Asia, particularly China.

"The Yukon continues to lack unfettered access to a deep water port capable of meeting the requirements of a developing mining industry although the board recognizes that the

rail and port studies due for release in June 2006 will be important in bringing the issue to public attention," the report said.

In other infrastructure issues, the report praised the Yukon's modern highway system, but it called for "forward thinking and planning for electrical needs as active exploration projects transition to mine development and production."

The report also called for the development of training programs for local residents, particularly those of First Nations, to locally reap the benefits of mining employment opportunities.

New placer framework

The report recommended that the Yukon continue to assist in the timely and full implementation of a new Placer regime, described as a new, integrated framework to manage Yukon placer mining that was developed in cooperation by three levels of government.

The regime is a result of an agreement between the Yukon, the First Nations, and the Canadian governments in May 2003 to develop a protocol that would "recognize the importance of a sustainable placer industry to the Yukon and the importance of conservation of fish and fish habitat supporting fisheries."


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