North of 60 Mining News - The mining newspaper for Alaska and Canada's North

Yukon Territory, a mineral exploration frontrunner in Canada's North, is witnessing a significant slowdown in 2019.

As a result, growth in Yukon's economy is expected to slow this year but rebound in 2020, according to The Conference Board of Canada. In its "Territorial Outlook Economic Forecast: Summer 2019," released in June, the board said new mines coming online in 2020 will drive Yukon's growth in the near future.

Several factors, however, have converged to put the brakes on the territory's typically brisk pace of mining activity this season.

The staking of mining claims, for example, has braked sharply. From January through July, 665 claims have been staked in Yukon in 2019. That's about 12 percent of the total number of comparable claims staked in 2018. Moreover, most of the staking this season involved small claim blocks scattered in traditionally active areas, according to the Yukon Geological Survey.

Financing challenges

"This has been a difficult year for the junior mining companies to raise money," said Scott Casselman, head of YGS' Mineral Services.

"An indication of the difficulty in financing is the number of projects underway," Casselman told Mining News in mid-August.

"We have seen a decrease in exploration activity, both in terms of dollars spent and number of active projects for the past three years," he said. "The most significant decrease has been in the number of projects this year. The concern is that more exploration dollars are being focused on fewer projects and as these advanced exploration projects reach the point where they enter the mine permitting stage, there will be a significant decrease in exploration spending."

In 2018, mining companies spent C$117 million on 151 exploration projects in Yukon Territory. So far, in 2019, the territory has attracted exploration expenditures totaling C$112 million, with only 61 active projects, he said.

A core group of juniors and one major are spending the lion's share of the funds that mining companies allocated for Yukon projects in 2019, while two of the three majors – Barrick and Newmont – that invested directly in Yukon mineral exploration in 2018 have pulled out of the projects they had optioned.

Of the 61 projects active in Yukon this season, 11 are spending (more than) C$1 million (the two largest projects, Coffee and North Rackla represent 50 percent of the total); the remaining 50 are spending less than C$600,000 (and) 25 less than C$100,000, according to YGS figures.

"But as the summer has gone on and as the price of gold has gone above US$1,400 (and now above US$1,500), some of that difficulty has eased," Casselman observed. "We have seen a few companies announce late season financings that will allow them to extend their programs."

Incentives shrink

Another factor in the slowdown this year is reduced funding for the Yukon Mineral Exploration Program, down to C$1.4 million in 2019 from C$1.6 million in approved funding a year earlier. YMEP is a program on which many prospectors and small exploration companies have come to rely in the seven years since its inception in 2012.

Many of the smaller exploration programs in Yukon this season "are only going because of the support from YMEP," Casselman said.

The decrease in funding for YMEP came at the request of the Yukon Geological Survey, after consulting with the Yukon Chamber of Mines and YGS Technical Liaison Committee, Casselman said YGS requested that $200,000 of the YMEP funding be re-directed to the Geological Survey to hire a mineral assessment geologist to support work on the Beaver River Land Use Plan, which began in 2018 and the Dawson Regional Land Use Plan, which was re-started this spring.

Much of the exploration activity in 2019 is occurring in areas of the territory that have not been active in recent years. But two active areas are seeing more intense exploration activity – the Dawson Gold Fields, where Newmont Goldcorp, White Gold Corp., Klondike Gold Corp., and Luckystrike Resources are the main players; and the Western Rackla Complex, where ATAC Resources Ltd., Cantex Mine Development and Metallic Minerals Ltd. are the main players.

The Western Rackla Complex is an area that is due for updated and more detailed mapping, and the YGS has initiated two mapping projects in the region, according to Casselman.

"This work has been spurred by the Tiger gold discovery of ATAC Resources, the new discovery at the Rackla North project by Cantex Mine Development, and by the Beaver River Land Use Plan that was initiated due to the proposal by ATAC Resources to construct a road to their Tiger deposit," he explained.

A look at strategic metals

The YGS is also looking to initiate research into Yukon's potential for strategic and critical metals.

"We have been discussing this through the summer and planning to do the research in the fall," Casselman said. "We know we have excellent potential for tungsten, but we want to do some research into the other, less well-understood, but important metals that society demands."

Several exploration projects in Yukon this season have focused on areas prospective for vanadium and tin.

"There are a couple of individuals/prospectors looking at vanadium and one group looking at a tin prospect," he said. "These projects are very small at present, but very intriguing."

Development progress

The outlook for Victoria Gold Corp.'s Eagle Gold Mine is bright. After investing C$500 million since 2017 in building the 200,000-ounce-per year heap-leach operation, Victoria recently said the mine's construction is nearly complete and its first gold pour is scheduled for September. Victoria is also exploring the Raven prospect, a nearby gold target on the junior's Dublin Gulch property in central Yukon. Raven is located about 12 kilometers (7.5 miles) from the Eagle mine.

Two of Yukon's three mothballed mines, meanwhile, have reported positive developments that could lead to a resumption of production at both operations in the near future.

At Alexco Resource Corp.'s Keno Hill property, the company is working to develop another mine to produce silver from the Flame & Moth deposits and has reported encouraging exploration results at its Bermingham target. Alexco shut down the nearby Bellekeno Mine in 2013, due to low silver and base metals prices.

The Minto copper-gold mine, located northwest of Whitehorse, shut down late last fall after owner Capstone Mining Corp. failed to complete the sale of the mine to Canadian subsidiary of UK-based Pembridge Resources Ltd. This spring Pembridge agreed to pay up to US$20 million to Capstone for the mine in staged payments that hinge on the mine going back into production and the price of copper. The buyer hopes to resume production at Minto by year's end and mount new exploration to extend its current four-year mine life.

Yukon Government

At the historic Brewery Creek gold mine near Dawson, owner Golden Predator Mining Corp. is also working to resume production.

Golden Predator gave the Yukon government formal notice Aug. 25 that it is moving the mine into the production phase from temporary closure status. The notice formally advises Yukon of the commencement of development and production activities on the Brewery Creek site and has been accepted by Yukon officials.

A licensed brownfields heap leach gold mine that Viceroy Minerals Corp. operated from 1996 to 2002, Brewery Creek was put into temporary closure in 2002 following a collapse of the gold price to less than US$300 per ounce. Golden Predator commenced work on restarting the mine project in 2009.