Mining Explorers 2016: Goldcorp grabs Coffee project
Half-billion-dollar buyout of Kaminak signals turnaround in mining markets
Last updated 2/3/2018 at 7:15pm
Like a gong proclaiming the end of the long and arduous bear market for North of 60 mining explorers, the May 12 news that Goldcorp Inc. would buy Kaminak Gold Corp. for roughly C$500 million reverberated from Yukon Territory throughout the North.
While the rich lure of developing a mine at Kaminak's robust Coffee gold project lured Goldcorp to the Yukon, it was the exploration potential and the ability to permit and build a mine that convinced the producer to expand into the territory.
"Coffee is located within a politically stable jurisdiction and provides us with an opportunity to add high-quality ounces to our development pipeline at low all‐in sustaining costs," Goldcorp President and CEO David Garofalo said at the time.
Even before Goldcorp made its move, Yukon was considered one of the best places on the planet to seek and develop a mine.
In the latest Fraser Institute Survey of Mining Companies, global mining executives ranked the westernmost Canadian territory as the 12th-best jurisdiction in the world when both mineral endowment and mining policies are considered.
The Yukon Mineral Exploration Program, an ongoing territory funded incentives program aimed at encouraging more investment in mineral exploration across the Yukon, is contributing to both sides of the equation.
Paying individuals up to C$25,000 and corporations up to C$40,000, this year YMEP awarded up to C$1.4 million to 80 prospectors and exploration companies with early stage mineral exploration projects in the Yukon.
It was this program that allowed iconic prospector Shawn Ryan to fund the prospecting that led to the discovery of Coffee and a number of other deposits and prospects in the White Gold district – an investment that is paying off through the development of a major mine in the territory.
If Goldcorp is successful in its planned expansion and development of Coffee, Yukon's reputation is expected to grow in the coming years.
Validating White Gold
After Goldcorp's move, a number of resident junior exploration companies reminded current and would-be investors of their own land positions and work programs in the gold-rich swath of central Yukon where Coffee is located.
Independence Gold Corp. has particularly strong bragging rights. Not only does this exploration company own a property right next door to Coffee, the junior also gained nearly C$2 million in exploration funds from Goldcorp. As a result of this flow-through financing, Goldcorp now owns 19.9 percent of its neighbor in the region known as the White Gold District.
"We view this investment as a validation of our exploration results as well as positive encouragement for the White Gold District in the Yukon," said Independence Gold President and CEO Randy Turner.
Independence used the cash to explore an array of Yukon gold projects, which includes Boulevard, immediately southwest of Coffee; Rosebute, another White Gold property about 60 kilometers (35 miles) to the north; and Moosehorn, a property blanketing a rich placer gold area next to the Yukon-Alaska border.
With rising gold prices and interest in the White Gold District, Nevada Zinc Corp. is allocating additional resources to VIP, a large gold property situated immediately west of Boulevard.
"While our focus project continues to be our highly prospective Lone Mountain Zinc Project in Nevada, we are extremely encouraged to see the recent entrance by Goldcorp into the Coffee Creek area of Yukon," said Nevada Zinc President and CEO Bruce Durham.
Tucked in a corner between the 48-kilometer- (30 miles) long Coffee property to the north and Western Copper and Gold Corp.'s Casino copper-gold project to the east, Cariboo Rose Resources Ltd.'s Canadian Creek property shows attributes similar to both. In 2016, the company completed a trenching program over a large soil anomaly that has gold traits similar to those found at Coffee.
Drilling at Canadian Creek in the 1990s cut long sections of low-grade gold, including 55 meters averaging 0.72 g/t gold. More recent drilling cut three meters of 3.46 g/t gold.
The most recent program, completed by Cariboo Rose in 2011, consisted of extensive soil geochemical and magnetometer surveying with 5,589 soil samples collected, excavator trenching, and select induced polarization surveying.
Across the Yukon River and about 14 kilometers (nine miles) northeast of Coffee, Stakeholder Gold Corp. has nabbed the expertise of renowned prospector Shawn Ryan to investigate two promising gold prospects on its Ballarat property.
Thanks to a combination of savvy prospecting, quality soil sampling and modern geophysics, Ryan is responsible for the discovery of Coffee and a number of White Gold deposit and prospects.
"It's fun; it's a good game," the self-taught prospector told Mining News during a 2009 interview at his cabin on the outskirts of Dawson City. "What I try to do is use intuition and prove it with science."
Ryan has put that same intuition and focus into GroundTruth Exploration Inc., an innovative exploration company that is planning and executing the exploration at Ballarat.
This year's work at Ballarat includes refining previously identified drill targets at the Northwest zone and gaining a better understanding of the Eastern zone, a gold anomalous area that is particularly intriguing to Ryan.
GroundTruth is applying a number of new exploration technologies it has developed to the work at Ballarat and at other exploration projects in the White Gold District.
"We are going to use science and technology; and this will help us move ahead in this ... whole new era in the Dawson-White Gold District," Ryan said.
During an initial phase of 2016 exploration at Ballarat, GroundTruth further detailed both zones with soil sampling; bedrock interface sampling using the GT Probe, a track-mounted rig that is quicker and less expensive than trenching; geophysics; and detailed topographical imagery with a drone.
Encouraged by what the program identified in the Eastern zone, an area that lies near a proposed road to access the Coffee Gold project, a second phase of geophysical and GT Probe surveying was completed there.
Ballarat is located immediately southwest of Kinross Gold Corp.'s White Gold project, the site of the Ryan discovery that sparked an exploration rush to the district.
At the end of 2015, Kinross reported 9.8 million metric tons of indicated resources at White Gold averaging 2.67 g/t (840,000 ounces) gold, and 2.17 million metric tons of inferred resources at 1.79 g/t (125,000) ounces gold. This resource has remained unchanged in recent years.
In August, Arcus Development Group Inc. gained full ownership of four White Gold properties – Dan Man, Touleary, Green Gulch and Shamrock – previously held under a joint venture with ATAC Resources Ltd.
Home of the Klondike
Some 20 million oz. of placer gold has been recovered from the streams around Dawson City, yet a significant hard-rock source of this alluvial aurum has yet to be revealed. The aptly named Klondike Gold Corp. continues to seek this elusive lode.
This year, the company carried out a C$750,000 program that included around 50 shallow holes targeting quartz vein arrays with visible gold or significant gold values that outcrop from its Dominion and Lone Star properties that lie above the gold-rich streams in the Klondike.
In August, the company cut a deal to acquire an additional 223 square kilometers (55,000 acres) Klondike area mining claims from Gimlex Enterprises Ltd., a privately owned Dawson-area business that has been placer mining in the area since 1984.
"This acquisition consolidates ownership of the Klondike district into one contiguous district-spanning claim group for the first time," said Klondike Gold President and CEO Peter Tallman.
In addition to a large and prospective land package, the purchase included 24 years of exploration data on the property. Additionally, former Gimlex President Tara Christie joined the Klondike Gold board of directors.
"The opportunity to draw upon their multigenerational experience in the Klondike district will be a strategic asset to help guide the next phases of exploration," Tallman said.
Klondike said a comprehensive work program will be designed once the exploration data has been merged and compiled.
About 55 kilometers (34 miles) east of Dawson City, Golden Predator Mining Corp. is revisiting its plans to resume mining at Brewery Creek, a past-producing heap leach operation where more than 278,000 oz. of gold was produced from seven near-surface oxide deposits between 1996 and 2002.
A roughly 1,600-meter drill program completed this year focused at three pits –Golden, Lucky and Kokanee – where historical data indicates significant oxide gold mineralization remains unmined.
This drilling focused primarily on collecting metallurgical and engineering data needed to update and complete a mine design for permitting.
A preliminary economic assessment completed in 2014 details a heap-leach operation at Brewery Creek that would recover 372,000 ounces of gold over nine years. This plan includes mining 10.2 million metric tons of open pit material with an average grade of 1.35 g/t gold and reprocessing of 4.1 million metric tons of material from the old heap leach pad averaging 0.77 g/t.
While Dawson City is legendary for its placer gold, it is rich lodes of high-grade silver that put Keno City to the east on the map.
Alexco Resource Corp. plans to continue to build on this tradition with the resumption of mining at its Keno Hill Silver property, a 233.5-square-kilometer (57,700 acres) land package that blankets more than 35 historical mine sites.
The company began commercial production at the Bellekeno mine on the property in 2011 but temporarily suspended operations in 2013 due to low silver prices.
While mining has idled, the company has not.
This year, Alexco completed a roughly 14,000-meter surface drill program to expand upon high-grade silver at its Bermingham deposit, where one 2015 hole cut 4.98 meters (true width) averaging 7,462 g/t silver.
This exploration and preliminary development work being carried out at the future Flame & Moth Mine is positioning Alexco for resumed operations on higher silver prices.
"Clearly, we are encouraged by the continued strength of the silver markets and, pending results of our Bermingham drilling program we will be well-positioned to consider redevelopment options at Keno Hill," explained Alexco President and CEO Clynt Nauman.
About 30 kilometers (19 miles) northwest of Keno, Victoria Gold Corp. is closing in on the development of a mine at the Eagle Gold deposit on its Dublin Gulch property.
A feasibility study completed in 2012 envisions an open-pit mine and valley heap leach operation at Eagle Gold that would produce 192,000 ounces of gold annually for roughly nine years, based on probable reserves of 92 million metric tons averaging 0.78 grams per metric ton (2.3 million oz.) gold.
While this project is shovel ready, including all of the major permits needed for development, Victoria is continuing to seek new sources of gold to expand the project.
This year, the company completed an extensive two-phase drill program at Olive-Shamrock, a pair of adjacent deposits about 2,500 meters northeast of Eagle Gold. The company said these deposits have the potential to enrich Eagle project economics through the addition of higher-grade ore, increased flexibility in mine planning and lowering capital intensity from shared infrastructure.
Reserves calculated for the Olive portion of these deposits have been incorporated into an updated feasibility study for Eagle Gold project.
Completed in September, this study envisions a 33,700-metric-tons-per-day mine encompassing two open pits, Eagle and Olive, producing 190,000 ounces of gold annually over 10 years of mine life.
A second phase of delineation drilling at Olive-Shamrock began in August.
About 70 kilometers (45 miles) northeast of Dublin Gulch, ATAC Resources Ltd. is considering a small but high-grade mine at Tiger, a deposit located at the western end of the company's roughly 185-kilometer- (115 miles) long Rackla Gold property.
An updated preliminary economic assessment published in May estimates a seasonal hybrid heap-leach and agitated tank carbon-in-leach plant processing oxide ore from Tiger would produce roughly 302,300 oz. of gold over a six-year mine life from ore averaging 3.81 g/t gold.
Atac has applied for permits to build a 69-kilometer (43 miles) tote road to the Rau Trend and Tiger gold deposit.
"The future development of the Tiger deposit would bring critical infrastructure, including tote road access, to the Rackla Gold project," said Atac President and CEO Graham Downs.
Atac's 2016 exploration included additional soil sampling, trench and mapping coverage at Airstrip, a 10-square-kilometer (2,500 acres) gold anomaly located about 3,500 meters south of Tiger.
In addition to work around Tiger, Atac continues to explore the Nadaleen trend, a 30-kilometer- (20 miles) long subset of Rackla where the first Carlin-style gold was discovered in the Yukon. Drilling in this region of the Rackla property targeted Orion, a zone discovered in 2015.
Downs described the 47.2 meters averaging 3.79 g/t gold encountered in the Orion discovery hole as "the most significant drill intersection to date within the 18-square-kilometer Anubis cluster of targets."
In addition to Anubis, Atac has defined five zones of Carlin-type gold mineralization – Conrad, Osiris, Sunrise, Isis and Isis East – and more than 40 geochemical anomalies along the Nadaleen trend.
Cantex Mine Development Corp. carried out a small talus sampling program at North Rackla, an early-stage gold project immediately north of Rackla.
About 75 kilometers south of the Rackla property, Goldstrike Resources Ltd. continues to explore Plateau South, a property that is gaining fame for the multiple zones of abundant visible gold that has been found there.
Bonanza, the latest such zone, was discovered while prospecting and mapping an area about 4,000 meters from Goldstack, one of the three primary gold zones along a 25-kilometer- (16 miles) trend at Plateau South.
Initial mapping of a 20-meter outcrop at the Bonanza zone has identified two distinct sets of veining containing coarse visible gold spanning the entire breadth of exposed quartz veins.
"The discovery of this new gold rich zone has significantly expanded the known extent of this new district-scale gold system," said Goldstrike Director Trevor Bremner.
The first hole of the 2016 drill program at Plateau, PSGS-16-01, cut 45.5 meters averaging 6.05 grams-per-metric-ton gold in the Goldstack zone. The company said this hole contains the most abundant visible gold seen in drill core to date on the property.
Goldstrike's 2016 exploration at Plateau is part of a planned five-year program that is slated to include up to 20,000 meters of drilling in 200 holes and up to 100 trenches.
Along the Cantung Mine Road in southeastern Yukon Territory, Golden Predator is defining a high-grade gold deposit on its 3 Aces project and is seeking other similar deposits across the 225-square-kilometer (55,600 acres) property.
The company got an early start to this work by collecting a 750-ton bulk sample from the Sleeping Giant zone at 3 Aces in February and March.
Concentrates from processing of 87.8 dry tons of the bulk sample material resulted in the pouring of a doré bar containing 81.4 oz. of gold and 7.77 oz. of silver.
In August the company kicked off a C$4 million second phase of exploration that included: soil sampling; structural mapping; geophysics; trenching; exploration drilling; additional bulk sampling; and installation of a bridge that connects Sleeping Giant to the Cantung road.
In addition to lowering costs with road access to the high-grade gold property, this work is designed to further outline the extent of the known mineralization while seeking other high-grade gold veins at 3 Aces.
Closing a C$1.2 million financing and naming a new CEO in August, Banyan Gold Corp. has resumed exploration at its Hyland gold property, situated about 130 kilometers (80 miles) south of 3 Aces.
"We are pleased with the strong market response to fill our financing in time for Banyan to execute the 2016 field program at the Hyland project," explained Tara Christie, Banyan's new president and CEO.
While this far eastern section of the Yukon has its fair share of gold, the Selwyn basin in this region is better known for its zinc potential.
About 100 kilometers (60 miles) northwest of 3 Aces, Selwyn Chihong Mining Ltd., has slowed it plans for developing a world-class zinc mine at its Selwyn project.
The China-based company was previously targeting 2021 for the start of production, but early in 2016 said it is postponing these plans by at least a year.
The company attributed the delay to lower-than-expected zinc prices.
If put into operation at the scale anticipated, the mine proposed for Selwyn is expected to produce roughly 912,000 metric tons of zinc concentrate and 219,000 metric tons of lead concentrate per year.
South of White Gold
In southwestern Yukon, Rockhaven Resources Ltd. completed 8,422 of drilling aimed at areas that could expand and upgrade resources considered in a recent preliminary economic assessment for its Klaza gold-silver property.
The PEA envisions a 1,500-metric-ton-per-day flotation-pressure oxidation-leach process plant producing 630,000 oz. gold, 11.4 million oz. silver, 52.46 million pounds zinc and 51.23 million lbs. lead over a 14-year mine life.
Strategic Metals Ltd. investigated OOO, a silver-gold property about 50 kilometers (30 miles) northwest of Klaza.
Chip sample results from one hand dug trench at OOO retuned 570 g/t silver, 2.76 percent lead, 0.08 g/t gold over 6.4 meters; and 106 g/t silver, 0.84 percent lead and 0.03 g/t gold over 9.6 meters. Rock samples collected by prospectors elsewhere on the property have returned up to 6.54 g/t gold.
Strategic also drilled three properties in southwestern Yukon – Hartless Joe, a gold-silver property located 25 kilometers (16 miles) northeast of Whitehorse, Mars property, located 80 kilometers (50 miles) north of Hartless Joe; and Hopper, a gold-rich skarn target about mid-way between Whitehorse and Klaza.
Wellgreen Platinum Ltd. continues work aimed at optimizing its namesake project just south of the Alaska Highway.
An updated preliminary economic assessment prepared for the Wellgreen project in 2015 outlines plans to start off with a 25,000-metric-tons-per-day operation for the first five years and then scaling up to a 50,000/tpd operation for another 20 years.
This mine is anticipated to average 89,518 ounces of platinum; 103,471 oz. palladium; 15,890 oz. gold; 73.1 million pounds nickel; 55.3 million lb. copper; and 3.4 million lb. cobalt annually for the first 16 years of operation.
This summer the company completed a 2,500-meter drill program targeting areas with the potential to add to the overall resource at Wellgreen; upgrade inferred resources; expand a starter pit considered in the PEA; and test continuity of high-grade zones previously encountered.
"The metallurgical test work initiated earlier this year and the 2016 field program will continue to de-risk the project in order to efficiently realize the full potential of this unique asset," explained Wellgreen President and CEO Diane Garrett.