Yukon Mining Alliance Site Visit Review
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
I have just returned from the annual Yukon Mining Alliance (YMA) Investment & Media Tour with a deeper understanding of the geologic history in the westernmost of Canada's three federal territories. Each year the YMA invites a select group of both industry professionals and resource investors on a 6-day whirlwind tour of numerous mine site camps throughout the region. The schedule and logistics of the tour are meticulously planned by Executive Director Anne Turner, who’s staff does a magnificent job of keeping things running smoothly and on-time.
This year, the YMA partnered with The Yukon Geological Survey (YGS), who provided each member of our tour with iPad’s containing the entire known geological history of the region. While flying overhead in a 10-seat caravan prop plane, guests were able to systematically track the geologic information with an uploaded GPS on the iPad. The continuously updated maps include age dating and were originally drawn up in the 1930’s. After being uploaded into the YGS database in 2006, it took the agency ten years to re-build the maps and next year they are planning to include geochemistry updates.
We were also joined by YGS Director Carolyn Relf and Head of Bedrock Geology, Maurice Colpron, who were sharing their vast geologic and historic knowledge of the region via linked headsets as we flew over innumerable mine sites. The YGS website contains links to these detailed geological maps, which are invaluable to all the mineral exploration firms in the region and have been instrumental in making numerous discoveries in Yukon.
Sandwiched in between the excursion is The Yukon Investment Conference, which takes place in the historic Klondike Gold Rush town of Dawson City. This year, the meeting was attended by all seventeen YMA company members, where management and tour participants scheduled 1 on 1 meetings at company booths. The day’s festivities began with a speech by Hon. Ranj Pillai, who is the Minister of Energy, Mines and Resources & Economic Development in Yukon. During the speech, Pillai reiterated the government’s commitment to building strong, collaborative, relationships with First Nations based on respect and committing to achieve real results. He also emphasized that government continues to focus on streamlining the environmental and mining permit process along with more spending on infrastructure through the C$360M Yukon Resource Gateway Project and the C$10M Dawson City Airport upgrade.
One of the most impressive sites we flew over was the Victoria Gold Corp. (VIT.V), fully financed and permitted Eagle Gold Project. The developer is spending roughly C$1M per day this year building what will eventually become Yukon’s largest operating gold mine. The Eagle Gold Project is scheduled to begin commercial production in Q4 2019 and will produce 200,000 ounces of gold annually at an operation cost of approximately $550 per ounce. The project is located 85km north of Mayo, whose economy has significantly benefited from the ongoing construction of the mine.
I was also treated to a birds-eye view of the earlier stage exploration firm ATAC Resources Ltd. (ATC.V) Rackla Gold Project, which is comprised of three projects: the 100% owned Carlin-type gold Osiris Project, the 100% owned Rau Project and the Orion Project, which is subject to an earn-in agreement valued at a potential C$55 million with Barrick Gold Corporation. The company recently released an NI 43-101 Inferred Mineral Resource on the Osiris Project of 1,685,000 oz gold at an average grade of 4.23 g/t and has announced a fully funded 20,000M diamond drill program, including 10,000M at the Carlin-type Orion Project funded by Barrick Gold Corp. under an exploration partnership.
The most historically interesting mining ventures in Yukon are controlled by early stage explorer Klondike Gold Corp. (KG.V). As we flew over the company’s 2,780 contiguous claim land package, totaling 55 km in the heart of the 1898 Klondike Gold Rush region near Dawson City, we witnessed miles of placer mining operations both past and present. In the southeast corner of the Klondike Mining District the company owns the McKinnon Creek placer mine featured on the Discovery Channel program Gold Rush. When our plane landed in Dawson, CEO Peter Tallman greeted guests at the airport and whisked us away on a tour of the company’s Lone Star property, located just 20 minutes from Dawson. The Lone Star Project has been focusing on exploration at the headwaters of Eldorado and Bonanza Creeks, where the Klondike gold was first discovered in 1896 and Mr. Tallman has discovered the hard rock source at Lone Star. The Klondike District property is located 120 kilometers north of Goldcorp’s Coffee gold deposit. Work to date suggests the structural setting at Coffee is comparable to Klondike District mineralization and the company has budgeted a fully funded C$2.5M drill program this season with plans to drill 50-70 holes on three of its projects.
An early stage development story I was not very familiar with before the trip is that of Rockhaven Resources (RK.V). After being treated to a very detailed presentation by CEO Matt Turner on the first day of the tour, the Company’s 100% owned and road accessible Klaza gold-silver project looks very promising. A few days before the excursion began, Rockhaven released a 907,000 oz gold eq Indicated grading 4.8 g/t gold and 98 g/t silver and 725,000 oz gold eq Inferred grading 2.8 g/t gold and 76 g/t silver resource on the deposit which remains open in all directions. This season, the company plans to continue exploration drilling of near surface mineralized zones that parallel the mineral resources, including high-grade structures identified by the 2017 program. However, the treasury will need to be topped up soon and after speaking with Mr. Turner, he informed me the company is currently exploring financing options. Partner Coeur Mining, who contributed C$2.7M to the 2017 finance, is expected to maintain its 9.9% position in Rockhaven.
Although the territory is remote, with a harsh climate and little infrastructure, all 14 First Nations in the region and Yukon government are pro-mining and becoming more in sync with the mining industry. For every dollar spent on mineral exploration, 85 cents of impact (GDP) is captured in Yukon and for mine site construction every dollar spent in Yukon results in about 55 cents in impact (GDP).
The Yukon territory is open for business.
Full disclosure: I have purchased shares of both ATAC Resources and Klondike Gold in the open market last year. I have also recommended them to my subscribers.