Mining Explorers 2012: Exploration rush slows in 2012
Juniors battled to advance projects, survive dismal capital markets
Last updated 11/11/2012 at Noon
While the frenzy of activity that engulfed the Yukon Territory in 2011 did not re-emerge this season, scores of players, from upstart juniors to global mining firms mounted impressive mineral exploration campaigns throughout the territory.
Gold was the primary metal sought in the Yukon in 2012, but some explorers chased silver, copper, zinc-lead, iron and other minerals.
Based on the spending plans of mining companies in March, Natural Resources Canada projected C$285 million planned spending across the Yukon, a decrease of 7.6 percent from the record C$306.6 million in exploration expenditures reported for 2011.
By contrast, NRCan projected a 17.6 percent increase in mineral exploration spending in 2012 to C$124 million in Northwest Territories and a 13.3 percent increase to C$568.6 million in comparable outlays in Nunavut in 2012.
While the decrease in mineral exploration spending for 2012 is relatively minor in actual dollars invested, the difference is much more marked in the number of juniors who carried out exploration programs this year, according to some observers who said drilling equipment was stacked like cordwood alongside the roads in the Dawson City area this field season.
One reason the depth of the downturn is not reflected in investment is that a number of explorers with more advanced projects in the Yukon actually increased their spending levels in 2012.
Patrick Sack, an economic geologist at the Yukon Geological Survey, said companies at only 20 mineral projects this spring reported plans to spend more than C$1 million on exploration in 2012. That compares with at least twice that number that conducted exploration campaigns in 2011 with C$1 million or greater budgets.
Among initiatives to encourage mining activity, the Government of Yukon again funded its successful Yukon Mining Incentives Program for 2011-2012, committing C$570,000 and attracting 33 successful applicants ranging from individuals doing grassroots prospecting to active juniors conducting focused regional exploration and target evaluations.
Operators of two of the three operating mines in the Yukon - Capstone Mining Corp. and Alexco Resource Corp. - conducted significant exploration programs in 2012, as did several advanced exploration projects, including Victoria Gold Corp. at the Eagle Gold project north of Mayo; Golden Predator Corp. at its Brewery Creek gold project near Dawson; and Prophecy Platinum Corp. at the Wellgreen nickel-copper-PGM project in southwestern Yukon.
Unrelentingly tight financial markets, however, forced many companies to cancel, postpone or defer plans to follow up on 2011 exploration.
"It was a rough market in 2012. The company put out a release reporting strong (gold) intercepts and one of the new targets at Dublin Gulch, and its stock hit a 52-week low," Victoria Gold President and CEO John McConnell told Mining News in August.
Some companies sold or divested their Yukon properties, focusing their attention elsewhere, while others dropped some of their claims.
A number of explorers also terminated options to explore Yukon properties.
Among companies that did not return to their Yukon projects in 2012: Overland Resources Ltd. deferred work on its Yukon Base Metal Project; Mill City Gold Corp. terminated its option on the Mount Hinton gold-silver property; Constantine Metal Resources Ltd. and Carlin Gold Corp. attempted unsuccessfully to sell its joint venture at the Tut gold property to Urban Select; Argus Metals Corp. signed a letter of intent in September with Banyan Coast Capital Corp. for the sale of the Hyland Gold project located 68 kilometers (42 miles) northeast of Watson Lake; and Endurance Gold Corp., which had identified two new nickel-copper soil anomalies on its Bandito nickel-copper-rare earth element project in 2011, focused in 2012 on its Alaska projects.
Endurance has outlined a 1,800-meter-long syenite-hosted REE-niobium-tantalum anomaly on the property.
Largo Resources Ltd., a junior that returned to its Northern Dancer tungsten-molybdenum property in southern Yukon after a multiyear absence with an exploration program in 2011, focused exclusively on its vanadium project in Brazil in 2012.
Some companies spent 2012 working on creative strategies to advance their Yukon properties. AM Gold Inc., for example, recently entered into an option and joint venture agreement at its Pinaya copper-gold property in Peru, partly to free up capital and assets to advance the company's Red Mountain property northwest of Mayo. In March, the company released an NI 43-101-compliant inferred resource estimate for Red Mountain of 127 million metric tons grading 0.48 grams per metric ton gold for about 1.95 million ounces of contained gold using a cut-off grade of 0.3 g/t gold.
Most of the recent gold exploration across the Yukon can be divided roughly into four areas: the Selwyn basin gold district in central and east Yukon; the Dawson Range-White Gold area of western Yukon; southwestern Yukon; and southcentral Yukon.
The Selwyn basin gold district extends from east of Tombstone Park down to northeast of Watson Lake in a broadly curvilinear trend. Exploration in this area, initially driven by ATAC Resources Ltd.'s discovery of Carlin-style gold mineralization at its Rackla gold project north of Mayo has fanned out across the region. Extensive staking in Selwyn basin in 2011 laid the framework for numerous ongoing programs of low impact exploration consisting of geological mapping, prospecting, soil sampling and trenching over broad areas.
A score of companies staked upwards of 30,000 claims in 2010 and 2011 to cover potential Carlin-style targets, drawing on clues provided by the Geological Survey of Canada's Regional Geochemical Database which identified prospective areas for Carlin-type occurrences with elevated values for gold-arsenic-antimony-mercury in stream sediment samples.
Companies that returned to pursue Carlin-style gold in 2012 include Strategic Metals Ltd. at its prospective Midas Touch project which adjoins the south side of the Rackla gold project; Colorado Resources Ltd. at the Oro Property near MacMillan Pass; Goldstrike Resources Ltd. at its 14 claim blocks in the Selwyn basin; Expedition Mining at the Joy and Mt. Mervyn projects; and Cantex Mine Development at the Car and Lin claim groups east and southeast of Rackla.
In September Cantex said it has collected samples with highly anomalous in gold and key pathfinder elements for Carlin-style mineralization on its 30,000-square-kilometer (11,580 square miles) regional exploration program. Cantex has now staked eight claim blocks totaling 1,380 claims covering the anomalous samples.
Strategic Metals also optioned the Scarlet East Property from Rackla Metals Ltd. Strategic can earn a 60 percent interest in the project by completing at least 1,000 meters of drilling in 2012 and incurring C$5 million in exploration expenditures by year's end 2016.
Other companies who resumed exploration at projects in central Yukon in 2012 include Ryan Gold Corp at its Ida Oro Project; Great Bear Resources, Monster Mining Corp.
In southeast Yukon, Northern Tiger Resources advanced exploration at the 3Ace gold property and its adjacent Sprogge property with a program budgeted at C$3 million of 3,000 meters of drilling along with channel and chip sampling. The junior did not, however, pursue 2011 exploration at its Sonora Gulch property in central Yukon where it has identified extensive porphyry copper-gold mineralization.
Several other companies that explored properties in southeastern Yukon for orogenic gold in 2011, returned in 2012 with everything from mapping and sampling to substantial drilling programs. Among them: Aben Resources at its Justin project; Bearing Resources on its Jay-VM-VF claims; Commander Resources on its Glenmorangie property; and Ryan Gold at its Cantung project. Commander, for example, said it would collect in-fill geochemical data within the Camp and Hidden Valley zones on Glenmorangie, which were identified as anomalous, and to continue geological mapping of the area.
Silver and other metals
With Alexco's Keno Hill properties which include the Bellekeno Mine being the notable exception, most of the explorers pursuing silver projects in east-central Yukon put their programs on hold or carried out modest mapping and sampling programs in 2012. Among them: Habanero Resources reported a one-year extension on its option to acquire the Mt. Haldane silver property, which adjoins Alexco's Keno Hill silver claims to the east; and Silver Predator Corp., which cut significant silver-zinc mineralization on the Plata property with drilling in 2011, restricted its activities to mapping and sampling in 2012. The company optioned Plata from Rockhaven Resources Ltd. in 2011.
ATAC Resources followed up its 2011 discovery of the Ocelot silver-lead-zinc zone with geophysical surveys over the entire Ocelot area. The Ocelot discovery hole cut 63.44 meters of 73.81 g/t silver, 2.44 percent lead and 8.18 percent zinc.
Manson Creek Resources returned to its Tell property located immediately south of Atac's Rau claim block, where seven natural spring gossan zones have been identified that returned anomalous zinc (up to 27,500 parts per million), nickel (over 1,000 ppm), arsenic (over 1,100 ppm) and silver (up to 800 parts per billion) in 2011. With an induced polarization ground geophysical survey of the 2,200-hectare (5,432 acres) property, the explorer identified a potentially sulfide bearing anomalous area that strengthened its conviction that the seven gossans are significant.
To the east, the Selwyn-Chihong joint venture formed between Selwyn Resources Ltd. and Canada Chihong Mining continued to advance its extensive Selwyn zinc-lead Sedex property at Howards Pass with an ongoing drilling program. The property is located 75 kilometers (46.5 miles) southeast of MacMillan Pass and straddles the Yukon-Northwest Territories border. In September, the JV completed an updated NI 43-101-compliant mineral resource estimate, including drill results from exploration drilling on the Don deposit in April that increased the project's indicated resources by 2.60 percent and inferred resources by 4.84 percent.
Hudbay Minerals Inc. and Newmont Mining Corp. also returned to Yukon projects in 2012, Hudbay to explore its Tom and Jason Sedex deposits at MacMillan Pass and Newmont to continue reconnaissance with spur and ridge sampling on its Carlin-Style gold prospects to the west.
The Dawson Range-White Gold area of western Yukon continued to attract many explorers that carried out extensive claim staking, soil sampling, trenching and drilling. Exploration mainly targeted the White Gold-style mineralization which can be broadly defined as structurally-hosted gold. Work by Kaminak Gold Corp. at the Coffee property and Kinross Gold Corp.'s White Gold property has shown the gold to be very fine-grained, occurring in steeply dipping, brecciated and oxidized structures. Only two NI 43-101-compliant resource estimates have been completed for this area, but several properties, including Coffee, are expected to complete resource estimates in 2012.
Other companies active in the region in 2011 include Stina Resources Ltd. at its Dime property located 67 kilometers (41.5 miles) southwest of Dawson City which followed up with additional exploration in 2012; Independence Gold Corp., formerly Silver Quest Resources Ltd., on its Boulevard property which adjoins the western margin of Kaminak's Coffee property, Pacific Ridge Exploration Ltd. at its Mariposa property where it continued drilling in 2012; Smash Minerals, which did not return to explore its Whiskey property this season; and Ethos Capital Corp., which mounted an aggressive 2012 drilling program at its Betty, Wolf and Bridget properties; and Radius Gold Inc. at its Sixty Mile property located about 75 kilometers (46.5 miles) due west of Dawson, adjacent to the Yukon/Alaska border.
Independence Gold returned to the region in 2012 with exploration focused on its YCS Property, which is adjacent to the Coffee Property to the west and contiguous to and north of Boulevard. In September, the company reported discovery of a new 700-meter-long gold-in-soil anomaly at YCS with assay values up to 4.53 g/t gold, which it intended to follow up with a trenching program.
Farther south and southeast, Taku Gold Corp. at its Aussie-Melba, Bishop, Burnham, Dan, Sulphur, Montana, Rosebute and Wounded Moose properties in the Dawson City area; Arcus Development Group Inc. at its Dan Man property; Rockhaven Resources, Ltd. at its Klaza property; Ansell Capital Corp. at its Charlotte and adjoining Discovery Creek properties; Comstock Metals Ltd. at its QV gold project; Castillian Resources Corp. on its Canadian Creek property; Independence Gold at its Prospector Mountain property located 90 kilometers (56 miles) northeast of Carmacks; Northern Freegold Resources Ltd. at its Freegold Mountain property; Dawson Gold Corp. at its Toro property.
Ryan Gold Corp., which boasts White Gold prospector Shawn Ryan as its president, launched an aggressive C$12 million to C$15 million exploration program for 2012 that canvassed some 80 properties across the breadth of the Yukon. The work included following up on property-scale mapping, trenching and soil sampling in 2011 at its Fifty Mile project located about 75 kilometers (46.5 miles) west of Dawson City, along with early stage exploration as a number of other properties in western and southwestern Yukon.
"I call 2012 the mineral inventory year because we have so many teams out exploring," said Ryan Gold Chief Geologist Andy Randell. "We're hitting everything this year to determine what's good and what we want to pursue. We're trying to develop a pipeline of projects."
Mining companies continued to pursue prospects in southwest Yukon in 2012 where more than 12,000 claims were staked in 2011. The surge of interest in this corner of the territory was spurred by work carried out by Yukon Geological Survey geologists, led by Steve Israel, that draws parallels between the geological setting and mineralization potential of the Coast Belt in this area and the Juneau Gold Belt in Southeast Alaska. Epithermal and porphyry-style mineralization potential is also believed to be high in the region. Companies active in the area include Ryan Gold on 17 gold properties within the Kluane Range.
The porphyry and orogenic gold potential of the region attracted several companies in 2011, including Bonaparte Resources Inc. to its porphyry copper-gold Hopper property.
Solomon Resources Ltd. focused in 2011 on its Seamus, Jenn and Tyke claim blocks within a 60 kilometer-long orthogneiss unit adjacent to the Kluane Schist and the highly productive Ruby Range placer gold district and staked the Rosie, Nis, Sek, Outpost and Pacer claims.
In June, Solomon Resources reported that, due to adverse market conditions, it abandoned an option to acquire a 51 percent interest in the 10 Mile Creek project and intended to focus in the short term on its 100 percent-owned Yukon projects.
Driven Capital Corp. carried out a seven-hole, 1,327-meter drill program in 2012 on the White River property where it has optioned a 60 percent interest from Tarsis Resources Ltd. White River is located 30 kilometers (19 miles) southeast of Beaver Creek, Yukon and covers an area of hydrothermal alteration and mineralization with potential for both porphyry copper-gold and epithermal gold-silver mineralization.
Hampered by poor drill recovery due to significant fracturing, strong surface oxidation/weathering and the presence of clay-rich gouge, Driven still reported moderately elevated gold values were identified in all holes with assays ranging from 0.42 to 2.78 g/t gold over intervals ranging from 0.76 to 1.47 meters.
Southcentral Yukon projects in 2011 ranged from staking in the Livingstone area through to submittal of a Yukon Environmental and Socioeconomic Assessment Board application by Yukon-Nevada Gold Corp. for the re-opening of the Ketza River Mine. In 2012, New Pacific Metals Corp. also worked to advance its Tagish Lake Gold Project where the past-producing Mount Skukum mine is located south of Whitehorse, while Gold World Resources followed up on a sampling and trenching program at its Mount Anderson gold-silver property next door.
Eagle Industrial Minerals continued its quest in 2012 to mine magnetite from historic tailings in the Whitehorse Copper Belt.
There are an estimated 10.4 million metric tons of tailings containing 18-20 percent magnetite from open pit and underground operations.
Eagle has completed a land lease with the Yukon government and has completed the Yukon Environmental and Socio-economic Assessment Board portion of the permitting process, with the water license portion pending.
Eagle said the project currently expects to begin producing magnetite in in the second quarter of 2013.
The magnetite will be shipped as iron ore to Far East steel makers through the existing ore terminal in Skagway, Alaska.