Yukon’s mineral industry – looking back and moving ahead

By IM Staff
Published: Wednesday, 24 February 2016

Low metal prices are keeping a lid on exploration, but as the Yukon Government’s Department of Energy, Mines and Resources explains, the territory is using the downtime to improve the industry’s regulatory framework, ready for a turnaround.

While exploration and development activity in Yukon is currently at a low ebb, the territory’s government is using the opportunity to improve the regulatory regime in anticipation of the next up-cycle. 

In particular, the government is developing its Mine Licensing Improvement Initiative. This initiative has brought together the Yukon Water Board, Yukon Environmental and Socio-economic Assessment Board and numerous government departments to establish ways to better coordinate the regulatory process. The main goal of the initiative is to reduce overlap and duplication during the mine licencing process. When complete, this initiative will provide more certainty for companies that do business in Yukon.

The government of Yukon also recognises that a successful minerals industry is dependent on high quality geoscientific information. Through the Yukon Geological Survey, government is supporting the industry by generating and compiling geological data to form a foundation that allows for better decision making by industry. Bedrock mapping is a key component of this: projects underway last year included mapping in the Hyland map sheet in southeast Yukon, Aishihik Lake area in southwest Yukon and the Lake LaBerge and Tay River areas in central Yukon. Other projects included a metallogenic study of the mineralising potential of Jurassic-age plutons, geochemical reanalysis of regional stream sediment samples for more than 25 1:250K map sheets and the first ever jointly funded airborne geophysical survey in partnership with the Kluane First Nation over its traditional territory in southwest Yukon. 

In addition, Yukon is making energy and infrastructure investments to serve the mining industry when there is an upturn in markets, by making the territory’s geology more accessible and economically viable.

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Atac Resources’ Rackla gold project in central Yukon is one of only a handful in the territory that has maintained significant exploration activity during the mining sector slump.  (Source: Mining.com) 

Exploration in Yukon

Junior exploration companies working in Yukon continue to brace themselves in unfriendly equity markets. The 2015 season experienced modest exploration activity, as companies sought to preserve capital. 

Of the 85 hard rock exploration projects in Yukon in 2015, just 16 of these included drill programmes and only 11 projects spent more than one million dollars. Exploration spending decreased from $80m in 2014 to $65m in 2015. The largest exploration programmes, in terms of estimated expenditures, continue to find success despite the economic headwinds. 

Examples of these include Kaminak Gold Corp. on the Coffee gold project, Selwyn-Chihong Mining Ltd’s zinc-lead Selwyn project, Rockhaven Resources Ltd’s polymetallic Klaza project, Atac Resources’ Rackla gold project and UK-based BMC Minerals’ Kudz Ze Kayah base metals project. Across Yukon, almost 60% of exploration programmes were exploring for gold, while the remainder explored for lead, zinc, copper, nickel, silver, platinum group metals or jade.

The territory currently has one operating hard rock mine, Capstone Mining Corp.’s Minto copper-gold-silver mine. Capstone maintained full production in 2015 at Minto, producing 16,515 tonnes copper, 16,114 oz gold and 170,493 oz silver. Unfortunately, declining copper prices have forced the company to consider long-term closure options for when the project’s Minto North deposit is mined out. 

Aside from metals operations, Yukon has also seen some exploration of non-metallic industrial minerals in the past, although the current slump in mineral prices has seen little done to further these in the last few years. Examples include the Bandito rare earths-niobium, nickel copper project in southeast Yukon, which was acquired by Endurance Gold Corp. in 2013 and the True Blue rare earths-niobium property in the territory’s central south, which was being explored by True North Gems Inc. up until 2010.

The territory also has an intermittent history of barite (barytes) mining, and in 2014, Silver Range Resources Ltd released a study outlining the economic viability of producing barite as an additional product of zinc and lead mining at its Mel project in southern Yukon.

Various Yukon government studies from the early 2000s likewise indicate that that there is a "reasonable chance" of discovering economic deposits of various industrial minerals in Yukon, including clay minerals, feldspars, fluorspar, garnet, graphite, gypsum, limestone, magnesite, mica, olivine, silca, quartz, talc, minerals sands, wollastonite, zeolite and zircon.

As things stand, however, the territory’s established metals mining industry is biding its time. A handful of companies with advanced projects in Yukon are preserving capital and waiting for markets to recover before undertaking development activities. In the interim, a few of these companies have undertaken exploration programmes to continue to expand their resources.

Levels of funding for the fully-subscribed Yukon Mineral Exploration Program (YMEP) remained at Canadian dollar (C$) 1.4m ($1.01m*) last year. The funds were used to offset exploration costs at 15 placer and 47 hard rock exploration projects. Claim staking continued to be at a diminished level in 2015. Only 2,190 claims were staked, although the number of claims in good standing remains high, at 195,280 claims, partly due to assessment relief administered in temporarily withdrawn areas and a double assessment credit government initiative for work done in 2015.

*Conversion made February 2016