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By Shane Lasley
Mining News 

Yukon mining stays strong in recession

Territory and First Nations leaders: Mining plays important role in Yukon; vigilance needed to remain globally competitive

 

Last updated 12/20/2009 at Noon



WHITEHORSE - Since the Klondike Gold Rush when tens of thousands of fortune-seekers stampeded to this northern land looking for gold, the mining industry has been the backbone of Yukon Territory's economy, Yukon government leaders said during their opening remarks at the 37th annual Yukon Geoscience Forum Nov. 23.

"Mining, of course, is the cornerstone of the Yukon economy," said Yukon Premier Dennis Fentie. "The mineral industry has provided many opportunities for Yukoners historically, and those opportunities continue today."

Ed Schultz, executive director of the Council of Yukon First Nations, share similar sentiments.

"In the Yukon context, we have to look at what we have. I wish we had diamonds, but we don't. If you find any, let us know," Schultz said. "I wish we had oil; I wish we had lots of natural gas; we don't have all those things. What we do have is plenty of potential as well as known reserves or deposits of base metals and precious metals."

Recession misses Yukon

Fentie told more than 400 forum participants that he was happy to report that, while news of a global economic crisis reached the territory, the recession itself seemed to stop short of crossing the Yukon border.

"In the last two years, mining investment in the Yukon has exceeded C$350 million despite the economic downturn," he said.

Yukon Geological Survey Senior Geologist Mike Burke said 2009 exploration spending in the Yukon far exceeded the C$30 million he was expecting early in the year.

"We had some great discoveries last year, and when they came out of the gate this year, they continued with some spectacular drill results and so the exploration dollars kept climbing. Right now, I am estimating about US$90 million, but there is still work going on, so that could climb up a little bit more," Burke said.

Adding in around C$160 million of development spending, mining investment in the Yukon is expected to top US$250 million for 2009, a year that was expected to be stifled by the recession.

"We heard about a recession," Burke joked.

Yukon grubstake pays off

Understanding the importance of the mineral industry to the territory, the Yukon government worked diligently to promote mining. These efforts played a key role in keeping exploration spending up during the financial meltdown.

The discovery of the White Gold property, which triggered a claim staking rush in 2009, resulted from the territorial government's Yukon Mining Incentive Program.

The program is a modern day grubstake of sorts. Through the program, the government provides between C$15,000 and C$50,000 per year to prospectors who locate, explore and develop Yukon mineral projects to an advanced exploration stage.

"The key thing is we try to fund projects with lower-level budgets," Burke explained to Mining News. "We want to keep the pipeline of new discoveries coming and advance early-stage projects so that they can get to that advanced project stage. That's what has paid off with these new discoveries."

For example, prospector Shaw Ryan, co-owner of Ryanwood Exploration Inc., used mining incentives to help finance his work when he made the initial discovery of the White Gold prospect in 2003.

To encourage prospectors to continue to seek out Yukon's mineral wealth during the financial crisis, the Yukon government boosted the incentives program's budget by C$1.1 million in 2009. The government-funded grubstake totaled C$1.8 million as a result of the one-time increase.

"For 2009, a total of 106 mineral exploration projects were approved through this program," Fentie said.

Communicating the Yukon advantage

Though the Yukon has become a preferred jurisdiction to seek mineral wealth, The Yukon premier said the territory must continue to be vigilant in order to remain globally competitive.

"We, in the Yukon, have become a favorite place for mineral investment. While this reputation has helped us through the past year, we must still recognize that we are in a global competitive situation for investment," he said. "We do have a bit of an advantage here in the Yukon. We need to continue to communicate the Yukon advantage."

To this end, the territory launched a new Yukon mineral industry Web site, http://www.miningyukon.com. This mining and exploration portal is designed to allow users to find everything from current geological data on Yukon mineral deposits to regulatory approval process information.

"Though legendary for gold mining, Canada's Yukon also boasts a wealth of world-class mineral deposits just waiting to be discovered. Coupled with well-developed infrastructure, competitive royalty regimes, and plenty of mining incentive programs, mining and exploration opportunities in Yukon have never been greater," the newly launched Web portal boasts.

This new Web site is a joint initiative between the Yukon Departments of Economic Development and Energy, Mines and Resources. The innovative Internet portal is designed to complement existing Web-based information sources.

The territorial government believes the improved access to information will sharpen the focus of mining promotion in Yukon and consolidate a wealth of data to build awareness of opportunities for investment in Yukon's resource sector.

First Nations seek partnerships

One of the messages that can be found on the Yukon government's new mineral Web site is that 11 of the 14 Yukon First Nations have finalized their land claims and have their final and self-government agreements in effect. This puts the Yukon at the forefront of land claim negotiations in Canada.

"The Yukon is blessed with many things, and one of the things we are blessed with is one of the most advanced First Nations systems of government anywhere in the country, and for that matter, in the world," Schultz said.

The Council of Yukon First Nations executive pointed out that, though the 14 years since the Yukon First Nations settled their land claims seems like a long time, it is a relatively short time in terms of establishing a government. He reminded the crowd that the governments of the Yukon and Canada, which have been around much longer, are still evolving.

"For those who may be hardened critics of the treaty process I would like to lend for your ears the fact that we are still in the process of implementing local community governments with the ability to have powers equivalent to the federal Crown over all of their resources that they retain on their settlement land," Schultz said. "We have to realize these are relatively small communities trying to undertake humungous tasks."

He emphasized that many of the Yukon First Nations invested a good deal of their settlement money into funds 14 years ago, and those funds are going to mature soon. He said the wealthy groups are going to be looking for partners.

"I know that a lot of the relationship historically between the mining community and First Nations has had a great deal of strain. I think it has lessened over the last decade or so, and I think it is going to continue to grow and evolve into a much better partnership. We are certainly looking for partnerships with practitioners of mining who are responsible, diligent and who are prepared to make investments in our local communities and our local people," Schultz said.

Breaking the cycle

The executive director said the Yukon, with its mineral wealth and established infrastructure is in an ideal situation to provide the metal needs of the growing Asian markets.

"We have a rail-link between our capital city and a deep-sea port on the doorstep of the fastest growing economies in the world on the Pacific Rim, who are starving for the base metals that you are now exploring for and developing," he said.

Schultz's vision for the Yukon goes beyond just extracting the territory's resource to be sold on the global market. He said the Yukon should be processing its raw material to gain the added value and help stabilize the local economy.

"We need to finally get away, as a territory, from the boom and bust cycle of our economy. We have become experts at exporting raw materials. It is time for us to mature up, to look at what the potential is for doing value-added activities to all this raw material that we share," he said.

Schultz and Fentie, who began their speeches with a similar message, also had related closing remarks.

I think the Yukon is really at an exciting time despite what is happening around the world economically," the First Nations leader said.

Said Fentie: "While uncertainty in the global markets continues to create challenges for your industry, there remains a positive place in Canada and in the world to look to for investments, projects and possibilities."

 

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