Bonanza for Yukon mining exploration as spending doubles

Exploration spending in the Yukon has more than doubled over last year, according to the Yukon Geological Survey.

The exploration season is at its mid-point, and observers say 2017 is shaping up to be the busiest year for the industry since 2011.

Scott Casselman,head of mineral services with the Yukon Geological Survey (YGS), says strong base metal prices, combined with significant interest from major gold companies, has spurred activity this year.

"What we've seen this year is a noticeable uptick in the amount of investment in mineral exploration in the territory," he said.

"We're probably looking at about double what it was last year. We're looking at almost $100 million in exploration expenditures and I think the number was about $20 million in development expenditures, for a total of $120 million this year.

"That compares to $57 million in 2016."

Casselman says major gold mining companies have partnered with junior companies, and that got the ballrolling.

"When something like that occurs, of course, others take note, their ears perk up. So we've seen a number of other companies come in on the heels of the major mining companies."

Casselman says all the indicators point to the interest continuing into the 2018 exploration season, with the price of zinc climbing steadily. He says copper prices are also rising.

"With the amount of money being invested this year, I would expect that we're going to hear some good news when the season rolls down and companies start announcing their results. And if we do get good news, then that could prod companies to loosen their wallets a little bit more for next year."

Strongest activity since 2011

The executive director of the Yukon Chamber of Mines, SamsonHartland,agrees.

"The talk on the street was that [the industry] had not experienced these levels of activity since 2011, so it's been a very busy summer."

Hartland is delighted to see the flurry of activity after a slump of several years.

"We're doing better than our neighbours and we're doing better than projected by Natural Resources Canada, and our membership is busy and very happy," he said.

"Five of the top 10gold producers in the world set up shop in the Yukon in the last 12 months alone. Yukon is definitely seen as a very, very attractive jurisdiction, given its stability, its governance, its advanced relations with the Indigenous populations, it's a great place to be right now and I think a number of the majors know it."

Hartland says the jump in activity has brought back geologists, prospectors and others in the exploration field who were forced to leave the Yukon because there was no work.

He adds the approach of the Yukon government has also helped,pointing to the Memorandum of Understanding on miningsigned between Yukon First Nations and the governmentat the mineral roundup early in 2017.

"The government's role in this is sending the signal out to the investor communityat large that Yukon is open for business, and does have positive relationships with its First Nations' governmentsin keeping certain issues out of the courtroom and instead around the boardroom... that [does] play a big role in creating that certainty, that the jurisdiction so direly needed."

First Nations had filed a lawsuit against the federal government in the fall of 2016 over Bill S-6, which amended the Yukon Environmental and Socio-Economic Assessment Act. The federal government is in the process of amending S-6 to remove four offending clauses.

Casselman agrees that smooth legal waters affect the investment climate.

"Investment dollars like to go into regimes that are stable, so the fact that that issue is not before the courts, does make the Yukon appear more stable and attractive in that sense."

Kevin Brewer,a consulting exploration geologist based in Whitehorse, saysYukon has an abundance of high grade deposits that have been on the radar for decades now.

"A lot of these things have been sitting on the shelf for a long time and they're starting to come off the shelf, around the world. But the Yukon has a lot of these good resources that people are now taking a re-examination of in these improving market conditons."

He says the Yukon is one of the top places in the world when it comes to exploration potential.

"Yukon is in the top five, if not first or second. You have certain belts of rock that have a potential to host gold or a base metal deposit. And they've been very under-explored, It still has terrains that have see very little exploration attention in the past, and are starting to get some of that attention by some of the larger companies."

Brewer says in contrast to the Yukon, places like Chile and Argentina are no longer as appealing as they once were.