The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Exploration spending in B.C., Yukon and Alaska tops C$1B in 2011; strong mineral prices help push mine production above C$12.7B
British Columbia, Yukon Territory and Alaska - the headliners of the Association for Mining Exploration British Columbia's annual Mineral Exploration Roundup - tallied more than C$1 billion of mineral exploration spending and some C$12.7 billion in mine production in 2011.
"We are going to talk in the next three sessions about the wrinkly parts of western North America - B.C., Yukon and Alaska. The geological phenomena that has created these mountain chains that we have in our province and to the north have given us such a wealth of mineral potential," said Bruce Madu, director at the Mineral Development Office of the B.C. Ministry of Energy and Mines.
While British Columbia remains the mining and exploration powerhouse of these three jurisdictions that cover the northwestern extent of the North American Cordillera, the Yukon Territory once again showed the most impressive growth in both mine production and mineral exploration spending. Alaska too, touted year-on-year growth and maintained its number two position among these Pacific Northwest neighbors.
Expansion in B.C.
Madu said that mine production in British Columbia is currently estimated to total C$8.6 billion, with coal making up about 68 percent of that value.
"British Columbia is the second-largest exporter of seaborne coal in the world," said the mineral development director.
He said several of the province's 10 producing coal mines are anticipating expanding their output to meet growing global demand for metallurgical coal.
Copper, molybdenum, gold, silver, zinc, industrial minerals and aggregate were the other significant minerals produced in the province in 2011.
Madu told Roundup attendees that expansion is the theme at most of British Columbia's metal mines, with more than C$1.2 billion currently being spent on upgrades.
Teck Resources Ltd. is investing C$475 million to expand the mill at its Highland Valley copper mine in southern British Columbia. The current mill, according to Madu, is running at its 120,000-metric-ton-per-day capacity.
Taseko Mines Ltd. is also planning major upgrades at its 75 percent-owned Gibraltar copper-molybdenum mine.
"Taseko Mines and its partners are actually doubling their production again. They just upgraded to a 55,000 ton per day concentrator - they are putting another one in. They saw their resource increase by 80 percent this year, and this is on its way to being the second-largest open-pit mine in Canada.
Taseko and partner Cariboo Copper Corp. plan to complete the C$235 million upgrade by the end of 2012.
Thompson Creek Metals (75 percent) and partner Sojitz Corp. (25 percent) have recently finished major upgrades at the Endako molybdenum mine northwest of Prince George, B.C. Thompson Creek Feb. 7 reported that the new mill, which costs upward of C$630 million, had reached commercial production.
Imperial Metals Corp.'s Mt. Polley copper-gold mine and 50 percent-owned Huckleberry Mine also are being improved.
Mandu said that the B.C. government anticipates at least eight new mine openings and nine mine expansions by the end of 2015.
"This could expand B.C.'s mineral mine production value by more than C$1.6 billion per year; add more than 1,800 new jobs; and sustaining an 5,000 existing mining jobs," B.C. Minister of Energy and Mines Rich Coleman said during his welcoming remarks at the 2012 Roundup.
To support this growth, Coleman said the provincial government has extended the mining flow-through tax credit through 2013 and lengthened the mining tax allowance through 2015.
"The allowance provides an equivalent of 133.3 percent deduction of capital costs from mines to start or expand their production before Jan. 1, 2016," he urged.
A year ago, during his address at the Roundup, then B.C. Minister of State for Mining Randy Hawes set a lofty goal of C$500 million for 2011 mineral exploration spending in British Columbia. While falling short of Hawes' target, it proved to be a banner year for exploration in the province.
"The preliminary estimate, today by the B.C. Geological Survey, indicates mineral exploration rose to over C$460 million in 2011 - which is more than 35 percent over the 2010 estimates in British Columbia. To put that in perspective; in the year 2000 the investment in mineral exploration in British Columbia was C$20 million," said Coleman.
The mining minister told a Roundup audience that ongoing mining and exploration success in British Columbia is dependent upon building strong working relationships with the province's First Nations.
"Without that we will not be successful; without that we will not be able to achieve the goals that are necessary; so respectful relationships with First Nations are very important to the future of British Columbia," he said.
Exploration in Yukon
Though the Yukon Territory is enjoying increased production from its new generation of mines, the frenzied pace of exploration continues to dominate the industry's attention there.
"The exploration expenditures are way up - we tallied about C$300 million," Lee Pigage, acting Head of Mineral Services at the Yukon Geological Survey told Roundup delegates.
This nearly doubled the C$160 million spent in 2010 and more than tripled the C$90 million of exploration spending in territory during 2009.
Pigage said gold was the primary metal being sought in the Yukon during 2011, making up about 69 percent, or more than C$200 million, of the exploration spending for the year. Zinc-lead, copper and silver - at about a combined 30 percent - accounted for the bulk of the remaining exploration expenditures.
The acting head of the geological survey said the number of claims staked in the Yukon reached new records in 2011. With more than 114,000 new claims staked in the territory last year, the total claims in good standing is now around 280,000.
The White Gold District in the Dawson Range and the Rackla Gold Belt in the Selwyn Basin were the two high-profile exploration areas in 2011. Similarities drawn between the geology of the prolific Juneau Gold Belt of Southeast Alaska and that found in the Ruby Range also drew explorers to southwestern Yukon.
While gold is dominating the surge of exploration in the Yukon, it is not a primary metal at any of the territory's three operating mines.
In 2011 the value of mineral production at Capstone Mining Corp.'s high-grade Minto copper-gold-silver mine, Alexco Resource Corp.'s Bellekeno silver-lead-zinc mine and Yukon Zinc Corp.'s Wolverine silver-rich volcano massive sulfide mine totaled nearly C$500 million. With all three mines running at full capacity, annual production is expect to top C$1 billion per year by 2013.
"Notice that none of them have gold as a primary commodity, we hope that will change in the future," Pigage observed.
Victoria Gold Corp. is leading the charge to make that hope a reality. The company anticipates receiving permits to begin constructing a heap leach operation at its Eagle Gold deposit sometime in 2012 and hopes to begin production by 2014. A feasibility study released by Victoria on Feb. 23 anticipates the mine to average 192,000 ounces of gold per year.
Pigage said North American Tungsten Corporation Ltd. is also advancing permitting on its MacTung Project in eastern Yukon. If its permits are approved, N.A. Tungsten plans to build a 2,000-metric-ton-per-day operation to mine some 33 million metric tons of ore averaging 0.88 percent tungsten trioxide.
Western Copper and Gold Corp. is finishing up a feasibility study for its Casino project and hopes to submit permit applications for the giant copper-gold-molybdenum deposit to Yukon regulators by the end of 2012.
Yukon Territory Premier Darrell Pasloski hosted a Jan. 23 reception held in conjunction with the 2012 Roundup. During the downtown Vancouver gala, the newly elected leader highlighted the successes of the territory's mineral exploration and mining industry in 2011.
"It's been a great year, and I think a lot more is going to happen. We have three successful mines; we had a record 114,587 claims staked in 2011, very impressive; and over C$300 million in exploration," Paslowski summarized. "We have got (the) Eagle Gold and MacTung projects well into the permitting process; and a recent announcement by Western Copper and Gold to begin a bankable feasibility study is also great news."
Pigage said mine development expenditures in the Yukon totaled about C$47 million in 2011, bringing overall mining and exploration expenditures in the territory up to about C$850 million for the year.
Golden future in Alaska
Alaska, located at the northwest extent of the North American Cordillera, did not experience as strong year-on-year gains as its Canadian neighbors, but the Far North state's mineral industry posted an impressive US$4.1 billion in overall value for 2011 nonetheless.
Alaska Division of Geological and Geophysical Surveys Senior Geologist Dave Szumigala told the Roundup crowd that 2011 mineral production in the state is expected to top US$3.62 billion, breaking the US$3.37 million record set in 2007.
Strong metals prices, solid operating performances from the state's six operating mines and the additional gold produced at Fire River Gold Corp.'s Nixon Fork Mine all helped push mineral production to the new high.
At 665,000 tons, zinc accounted for about 40 percent of Alaska's mineral production value in 2011, followed by gold at 860,000 ounces. At least 12.8 million ounces of silver, 148,000 tons of lead and 2 million tons of coal were also mined in the state last year.
"We are really a zinc-producing jurisdiction largely from Red Dog," the Szumigala explained.
Running neck-and-neck with the Yukon Territory, an estimated US$300 million was spent on exploration in 2011. This is about a 10 percent increase over the US$264 million spent the previous year and accounts for about one-third of the total funds spent on mineral exploration in the United States.
Szumigala said porphyry copper-gold systems accounted for 40 percent of the 2011 exploration spending in Alaska, making them the top deposits being sought after. Intrusion-related gold systems came in second at 30 percent. Gold quartz vein deposits, polymetallic volcanogenic massive sulfide, platinum group metal-enriched ultramafic-hosted, rare earth element, diamond, coal and placer gold deposits rounded out the list.
"The largest exploration project in the state is Pebble, as it has been for the past four or five years," the state geologist said. "They haven't updated their resource, but it is arguably the world's largest porphyry resource - over 80 billion pounds of copper, over 100 million ounces of gold."
The Pebble Partnership's 2011 budget of US$91 million included some 14,000 meters of drilling but was primarily focused on preparing the enormous project for permitting.
Development spending in Alaska dropped to about US$175 million in 2011, compared to an average of US$375 million over the previous five years.
This number is expected to increase in the coming years as Alaska's world-class exploration projects transition to development.
Barrick Gold Corp. and NovaGold Resources Inc. have said they plan to begin permitting the 40-million-ounce Donlin Gold project later in 2012 and the Pebble Partnership has indicated they will file permit applications the following year. International Tower Hill Mines Ltd. also plans to begin permitting of its 20-million-ounce Livengood gold project sometime in 2013.
"In the past decade, things have really been booming in the State of Alaska," touted Szumigala. "We do have a golden future."
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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