Miners accelerate rush to explore Yukon

With metals prices riding high, Yukon Territory government officials are excited about prospects for increased exploration and development activity by mining companies in the coming season.

"We are optimistic about industry's continued interest in Yukon," said Energy, Mines and Resources Minister Archie Lang, who joined a government delegation attending the 25th annual Mineral Exploration Roundup in Vancouver the week of Jan. 27.

More than 6,000 delegates, including geologists, prospectors, junior and senior mining and mineral exploration companies took part in the event.

Yukon Territory has 2,700 known mineral occurrences on mining claims covering less than 4 percent of the territory's total area.

"The Yukon is generating a lot of interest from industry, and they are not looking at just one or two high potential areas, they are looking at the entire Yukon," Lang said.

At the roundup, Yukon officials met with Overland Resources, Northern Freegold Resources, Western Copper Corp., Full Metal Minerals Ltd. and Alexco Resource Corp. These five companies together expect to spend $70 million on advanced exploration projects in 2008, according to Yukon officials.

"The current level of activity we are seeing in Yukon's mining and mineral exploration industry reflects well on the work we have done since devolution to grow the Yukon economy and strengthen our mining industry," Lang added.

Mining activity up in 2007

Last year, exploration spending in Yukon soared to $130 million, up 62 percent from $80 million, in the hardrock mining sector. The outlay for development also climbed nearly 40 percent to $70 million from $50 million in 2006.

Most of the 2007 exploration focused on gold, which accounted for 38 percent of all spending. Yukon-Nevada Gold Corp spent most of that sum at the Ketza River property, where the company plans to begin extracting up to 140,000 ounces of gold annually from the Manto Zone later this year or in early 2009.

Other promising Yukon exploration projects include Alexco's program at the Bellekeno property in the United Keno silver belt.

In November, Alexco estimated a recoverable resource of 18.7 million ounces of silver at Bellekeno. But new results from drilling indicate the silver-lead deposit contains about 28.5 million silver equivalent ounces (357,800 metric tons at 1,394 g/t silver with 19.0 percent lead) and is complemented by a newly outlined zinc-silver deposit containing an another 9.8 million silver equivalent ounces (179,600 metric tons containing 21.3 percent zinc and 263 g/t silver). Both deposits remain open at depth and along strike, the company said Jan. 30.

Western Copper heads toward production

Western Copper achieved a major milestone in December in moving its Carmacks Copper Project to production. The Yukon Environmental and Socio-economic Assessment Board, a key agency in the territory's permitting process, endorsed Western Copper's development plan for Carmacks, subject to certain conditions and public comment.

The Vancouver, B.C.-based junior is working to develop a $150-million open-pit mine on Williams Creek, about 13 kilometers, or 8 miles, northwest of Carmacks. The mine, which has 10.6 million metric tons of proven and probable copper-gold reserves, would create 200 construction jobs and 180 mining jobs at the peak of its projected eight-year life.

The spin-off from Western Silver would use heap leaching to process ore at Carmacks. While the method is cost-effective, producing copper that is 99 percent pure, it will require the use of 25 kilograms, or about 11.3 pounds, of sulfuric acid for every metric ton of ore processed, critics say.

Members of the Little Salmon Carmacks First Nation say developing the mine could threaten vital salmon runs in the Yukon River downstream.

Western Copper hopes to win regulatory permits to begin construction this spring.

Focus on Selwyn Basin

Selwyn Resources Ltd. spent $25 million last year drilling 106 holes totaling 35,000 meters and significantly expanding mineral resources at the Selwyn Project in east-central Yukon.

In January, Selwyn reported a 78.2 percent jump in indicated mineral resources to 154.35 million metric tons, grading 5.35 percent zinc and 1.86 percent lead, containing 18.19 billion pounds zinc and 6.31 billion pounds lead. Inferred mineral resources at the project also rose 7.5 percent to 231.54 million metric tons, grading 4.54 percent zinc and 1.42 percent lead, containing 11.6 million tons zinc and 3.6 million tons lead, according to the Vancouver, B.C.-based junior.

Since acquiring the Selwyn Project in 2005, Selwyn has spent about $45 million on developing a very detailed picture of mineralization on the Howard's Pass zinc-lead district property that previous explorers overlooked.

Australia-based Overland Resources, a newcomer to the Yukon, is also interested in the under-explored Selwyn Basin.

Last year, Overland sank $12 million into its first exploration program at the Andrew Base Metal Project to evaluate a known zinc deposit in the area. The company Feb. 14 said it has contracted four diamond drilling rigs to undertake a second-phase 40,000-meter drilling program in the Andrew zinc deposit in 2008 in hopes of rapidly advancing the project toward feasibility.

First discovered in 1996, the Andrew zinc deposit was initially drilled between 2001 and 2002 by Noranda Inc. Its resource is currently estimated at 5.92 million metric tons at 5.84 percent zinc, 2.03 percent lead, 9.49 grams per metric ton silver and 14.86 g/t germanium, or 5.92 million metric tons at 9.15 percent zinc equivalent.

Overland said it also recently secured a three-year land use permit for a winter access road to the Andrew property, and road construction is scheduled to begin by March 1.

Another search for copper and gold

Northern Freegold Resources Ltd. is focused on exploring the Mountain Freegold area of Southcentral Yukon. The company's interest dates back to the 1990s when it assembled a 64-square-mile land package in the area.

The Freegold Mountain Project, located within the Tintina Gold Belt, has gold-copper porphyry style mineralization similar to that found at the Fort Knox Gold Mine and other major gold deposits in Alaska.

The Yukon property includes a number of mineralized zones that host established inferred resources totaling 700,000 ounces of gold and has more than 15 known gold occurrences.

Northern Freegold is exploring several promising deposits within the area in hopes of expanding the project's resource base and making significant new discoveries.

Miners rush to northern Yukon

Numerous other companies also have embarked on exploration programs in the Yukon. These include Underworld Resources Inc., Cash Minerals Ltd., and Fronteer Development Group.

Underworld Resources Feb. 12 said it identified multiple gold prospects during 2007 exploration on its 100 percent-owned White Gold and Black Fox projects. The two claim packages together comprise 11,850 acres and are located 95 kilometers, or 59 miles, south of Dawson City.

Last year, extensive mapping, mechanical trenching, IP geophysics and an additional 1,400 grid soil samples at both the White Gold and Black Fox properties identified a variety of styles of gold mineralization.

Vancouver, B.C.-based Underworld said it is awaiting final results from a number of samples with over-limit gold assays greater than 10 grams per metric ton. Underworld has an option to earn a 100 percent interest in the projects. Historically, significant placer gold has been mined in the area; Thistle Creek, immediately south of White Gold, has produced more than 50,000 ounces of gold since 1976.

Meanwhile, Fronteer's hunt for Olympic Dam-style iron oxide-copper-gold deposits in northern Yukon appears to be yielding favorable results. Samples from recent drilling show high-grade copper and gold mineralization.

Fronteer spent $6 million on exploration in 2007 at its Wernecke Breccias Project; a jointly held venture with Rimfire Minerals Ltd. Fronteer is operator and holds an 80 percent interest in the project.

Fronteer and Rimfire acquired Wernecke Breccias from Newmont and a subsidiary of Breakwater Resources more than two years ago. By spending $2 million on exploration in 2006, the companies gained a 100 percent interest, with Newmont retaining a 2 percent net smelter return royalty.

Fronteer isn't the only miner thinking about the widely held belief that the northern Yukon and the Olympic Dam area of Australia were part of one land mass billions of years ago.

After three years of exploring the Wernecke Uranium District in northern Yukon, Cash Minerals is aggressively advancing its Igor uranium property. The company, which is also chasing the hope of an Olympic Dam-size iron oxide copper-gold-uranium play, recently boosted its ownership stake in Igor to 75 percent and vowed to define a resource for the deposit in 2008.

Full Metal said Feb. 13 that it earmarked a portion of a $17 million to $20 million exploration budget for 2008 to complete a 10,000-meter drill program at its OG property in northern Yukon. OG, the most advanced of the company's 11,200-acre OG, UG and OD claim group, lies along the edge of the Wernecke Breccias north of Dawson City. The properties cover several zinc-silver-lead prospects and include extensive multi-element soil geochemical anomalies.

Full Metal is earning 100 percent interest in the properties from a Yukon resident by completing $3.4 million in exploration. In addition to drilling, Full Metal said it will conduct an extensive program of mapping and extend the soil geochemistry grid to fully define the extent of the multi-element anomaly. A ground-based gravity geophysical survey also will be performed.