The annual tour of mining camps in the Yukon sponsored by the Yukon Mining Alliance (75%) and the Government of Yukon (25%) never fails to impress, and this year's trip in mid-July was no exception. From visits to family-run placer mining camps in and around Dawson City to daily flights on Alkan Air's nine-seat Cessna Caravans headed to far-flung exploration camps and mine development projects - the 24 investors, analysts, newsletter writers and mining media on the tour were reminded again and again of just how deep the industry's veins run in the territory.
In March, the Fraser Institute ranked the Yukon ninth in the world for investment attractiveness in its annual survey of mining companies. Yet despite the storied history of the Gold Rush, and its more recent mining history, the Yukon is still very much a frontier. At the peak of the last exploration boom cycle, only 12% of the territory's landmass was staked, according to the Yukon Geological Survey, and within those claims there is still a lot of unexplored and under-explored ground.
Last year, $117 million was spent on exploration across 120 hard-rock exploration projects. Scott Casselman, a geologist and head of mineral services at the Yukon Geological Survey, expects the same spend this year across about 60 projects. Of those, roughly a dozen of the biggest ones will get more than $1 million. "The key thing is that we're relatively under-explored," Casselman tells The Northern Miner on the sidelines of a mining conference in Dawson City, "and if you put the money into exploration, especially serious money into exploration, the chance of discovery is quite good.
"We've got Alaska on one side of us, we've got British Columbia and the Northwest Territories on the other two borders," he continues. "They have a vibrant mining industry, and our geology is virtually identical to the Alaskan and B.C. side. There's no reason why we shouldn't have the same levels of activity."
The Yukon also has much more to offer than just gold and silver - with a spectrum of commodities ranging from copper, zinc-lead and nickel to platinum group elements, ruthenium, iridium and tungsten.
And while challenged by infrastructure in many areas, the Yukon Resource Gateway project proposes upgrades in two key areas of mineral potential and mining, including the Dawson Range and the Nahanni Range. The eight-year project, funded by the Government of Canada, the Government of Yukon and the mining industry, would involve 650 km of upgraded roads and the replacement of a number of bridges, culverts and stream crossings. In September 2017, Prime Minister Justin Trudeau announced a commitment by the Feds to contribute $247.4 million to the Gateway project. Once project agreements are finalized with First Nations, the Government of Yukon will contribute $112.8 million, and the mining industry up to $108.7 million.
In the meantime, maturing exploration projects look to jump to the next level. In 2018, $425 million was spent on development - most at Victoria Gold's Eagle gold mine. Others projects, like Newmont Goldcorp's Coffee, privately held BMC Minerals' Kudz Ze Kayah, Alexco Resource's Keno Hill, and Western Copper and Gold's Casino are well into the permitting stage.
The bottleneck, many companies say, are review and permit approvals from two independent regulatory bodies, the Yukon Environmental and Socio-economic Assessment Board (YESAB) and the Water Board. During a trip to Alexco's Keno Hill camp, CEO and chairman Clynt Nauman declared the company will not continue underground work until it receives a modification that brings its Bermingham deposit into its existing water licence - something it has been trying to do since late 2017. (He is hopeful Alexco will get approval for that modification in the fourth quarter.)
John McConnell, president and CEO of Victoria Gold, says it took the company five years to get its initial water licence for the Eagle project. "We're proof that you can get it done - it just takes too long, in my opinion. A process that took five years could easily have been done in two and a half, and that same process would take eight now."
One thing that might speed up the process, some critics say, would be to run the reviews of YESAB and the Water Board at the same time, but that would involve a change in legislation.
Piers McDonald, chair of the Water Board - and a former underground miner in the Yukon, who also spent 18 years as an MLA and four years as the territory's premier from 1996 to 2000 - won't comment on active licence applications, but says the Water Board is doing its best to speed up the process, while ensuring each project is reviewed appropriately. To underscore his point, he references the past-producing Faro mine, where he says clean-up costs could run to the half a billion dollar range. "The Water Board has an obligation to study, review and verify information that is provided by the applicant, and where there are gaps, it tries to fill those gaps and sometimes that does take time," he says. "Can the process be more efficient? Yes, it can and we should be pursuing that. But we also need to strike a balance and take environmental protection seriously."