re:news
Feature Story
Date: June 16, 2006
Canada’s Yukon Territory Looks Ripe For A Discovery In 2006
By Our Canadian Correspondent
Steeped in a long history of mineral exploration that dates back to the famous Klondike gold rush of 1896, Canada’s Yukon Territory had fallen on hard times over the last decade as low commodity prices and high exploration costs took its toll on the hearty explorers. Today however, the economic climate has changed and a bevy of junior explorers lead by Strategic Metals, Fronteer Development, Cash Minerals and YGC Resources are aiming to put the Yukon back on the global exploration map.
For those looking to diversify the speculative risk of exploration, the company with the most fingers in the most Yukon commodity pies is Vancouver-based Strategic Metals. The junior is a project generator that uses its geological brain power to acquire prospective ground on the cheap and then farm it out to another company willing to spend the high risk drill dollars. Strategic currently has 13 of its properties optioned to other companies and most of these projects will be drill tested this summer.
On the tungsten-molybdenum front, Largo Resources picked up the option to earn a 70 per cent interest in Strategic’s Logtung property, which hosts the largest porphyry tungsten deposit in the world with a resource estimate tabled by Amex in the 1980s pegged at 162 million tonnes grading 0.13%W03 and 0.052% MoS2. Largo must spend C$5 million over three years and issue 4 million shares to Strategic. Largo immediately renamed the property Northern Dancer property and has the drill turning in an effort to outline higher-grade core.
On the uranium front, the Yukon could well end up being the radioactive sleeper of the year as several well respected companies look to hit the uranium equivalent of the motherlode this summer. For its part, Strategic Metals gets its uranium exposure through its 5.35 million shares in Twenty-Seven Capital that was received via a spin out of the company’s uranium assets. Here, Cash Minerals has the option to acquire up to 75 per cent in one or more of eight uranium prospects in the Yukon. These prospects include four iron oxide copper gold targets and an attractive unconformity-related uranium target, all of which are located in the Wernecke Mountain region of north-east Yukon. Cash aims to spend C$4.5 million drilling some 8,500 metres at the Igor and Lumina properties. Surface samples at Lumina yielded from 1.44% to 7.67% U3O8 and last year a drill hole into Igor returned 74.44 metres grading 0.069 U308 and 1.88% copper. Very nice indeed. In addition, the partners will complete another 1,000 metres of drilling at the Pedlar uranium property in western Yukon.
On Twenty-Seven’s Pike uranium property in the Wernecke Mountains, fellow junior Signet Minerals can earn a 50 per cent stake by spending C$1 million and making annual option payments of C$25,000 over three years. Signet can then earn another 25 per cent interest by paying C$500,000 and completing a bankable feasibility study. At Twenty-Seven’s Murphy uranium property, Signet can take 100 per cent by paying C$2 million over eight years. Signet is run by ex-Cameco guru Kieran Downes, so his presence in the Wernecke region certainly brings some credibility to theories that the Lumina prospect of Cash Minerals and Twenty-Seven may be unconformity related.
Strategic, which holds a number of royalty interests including one on the Wolverine base metal deposit as well as nearly 8.5 million shares in other junior resource companies, also has a number of promising silver, gold and base metal projects options out, several of which will be seeing the drill bit this summer.
Staying with the Wernecke Mountains but moving to new players, Mark O’Dea led Fronteer Development and well respected project generator, Rimfire Minerals teamed up to acquire Newmont Exploration’s proprietary data covering a 2,000-square-kilometre region of the Wernecke Breccias. Fronteer has recently signed a contract with Bell Geospace to fly 7,819 line kilometers of airborne gravity over the district beginning in early July. Once the gravity data is combined with the existing airborne magnetic and radiometric data it will immediately focus the exploration efforts of a three-month ground program commencing in mid-June.
For its part, International KRL Resources has already launched a 15,000 metre drill program on its NOR iron oxide-copper-gold project in the Yukon’s far north and Stan Bharti aims to have two drill rigs turning on the Mike Lake gold property 80 kilometers east northeast of Dawson City any day now. With last year’s results ringing in at 7.67 g/t gold over 18.43 metres and 12.42 g/t gold over 7.58 metres, results from Mike Lake will be watch closely, as will results for the large NOR anomaly.
On the more advanced gold side, YGC Resources has the drill rigs turning on the Ketza River gold property near Ross River. The latest resource tally came in at 8.5 million tonnes grading 2.8 g/t gold in the measured and indicated resources along with 14.6 million tonnes averaging 2.2 g/t gold in the inferred section.
Moving towards development, Sherwood Copper is expecting the bankable feasibility study for its wholly-owned high-grade Minto copper-gold deposit to be completed this month. The project hosts 340 million pounds of copper, 155,000 oz of gold and 2.0 million oz of silver in measured and indicated resources. The results of this feasibility study should prove more encouraging than the one recently tabled for the Wolverine zinc-copper-lead-silver-gold mine project some 135 kilometers southeast of Ross River. Here Yukon Zinc concluded that Wolverine could produce zinc for life-of-mine cash costs of $0.18 per lb., net of byproduct credits, under a "base case" mining scenario that incorporates metal prices below current levels. But after taking into account capital costs, the reserve base, lack of infrastructure, and various royalties, among other things, the project economics are significantly less robust. Undeterred, Yukon Zinc is moving forward with an eye on an underground mine that could produce 33,342 tonnes zinc, 3,577 tonnes copper, 3,399 tonnes lead, 3.8 million oz. silver and 16,043 oz. gold annually in zinc, copper and lead concentrates during its first three years of operation. On the energy side of the equation, while the uranium assets will take center stage this summer, Cash Minerals is also looking to advance the Division Mountain coal project.
So there you have it, just a few of the exploration and development plays just getting underway in what is turning into the most active exploration season in the Yukon in over 30 years. Clearly, based on the amount of exploration dollars being spent in search of gold, silver, lead, zinc, tungsten, molybdenum and uranium, a new discovery could well be in the offing and perhaps then the Yukon will start to get the exploration respect its long history deserves.
Companies featured in this Story
Rimfire Minerals Corp (TSX.V-RFM)
Cash Minerals (TSX.V-CHX)