At the height of the Klondike gold rush in 1898, it was mostly back-breaking work that led prospectors to the Yukon gold fields.
Grainy photos in a Canadian Broadcasting Corp. (CBC) documentary neatly sum up the challenge, showing hundreds of equipment laden-prospectors climbing the Chilkoot Pass en route to the gold discoveries around Dawson City.
Against a backdrop of deep snow, they look like ants crawling up a mountain.
Over a century later, early stage gold exploration still involves a high degree of muscle power.
But modern day prospectors can now rely on high tech tools, including helicopters and X-ray fluorescence (XRF) to help pinpoint areas where the gold might be hidden.
All of that technology is being deployed in what is already the largest gold staking rush that the Yukon has seen since the infamous Klondike days.
Yukon Chamber of Mines President Claire Derome said roughly 80 companies are gearing up for large exploration programs this year, a move that will push exploration spending in the territory to $260 million in 2011. “We have never seen numbers like this before,’’ Derome said.
Much of the action is centred on the White Gold district, in the Black Hills Creek area about 400 kilometres northwest of Whitehorse and 70 kilometres south of Dawson City.
Exploration crews have been drawn to the region by the work of Shawn Ryan, the Canadian prospector who went looking for the bedrock source of the placer (riverbed) gold deposits that have sustained the Yukon mining industry since the Klondike rush. Ryan thought it must have come from a local source.
His methodical soil sampling techniques subsequently led to the discovery of a geophysical anomaly in 2004 that he later optioned to Underworld Resources, a company that was swallowed in March 2010 by Kinross Gold Corp. (TSX: T.K, Stock Forum) in a $138 million deal.
Andrian Fleming, an Australian geologist and co-founder of Underworld is now trying to repeat that success on an adjacent property that is being explored by his new company Smash Minerals Corp. (TSX: V.SSH, Stock Forum).
When Stockhouse visited Smash’s Whiskey property camp site this week, Fleming had just unveiled plans to raise another $10 million from a private placement of common and flow through shares, priced at $1.05 and $1.20 respectively.
That money will be added to the $6.4 million that the company raised when it went public in April, on the back of in IPO of eight million shares, priced at 80 cents.
On Thursday, the stock was trading at $1.17 in a 52-week range of $1.39 and 9 cents, giving the company a market cap of $20 million, based on 17 million shares outstanding.
Mindful of the cost ($4.3 million for exploration this summer) and the short exploration season (May to mid-September), Smash is racing against the clock to outline targets in time to begin drilling in August.
The junior is working to achieve that goal by collecting thousands of soil samples from around the Whiskey property, which covers 846 square kilometers and 4,177 claims. Those samples are being analyzed in XRF machines on site before they are sent out for further analysis to assay labs in Vancouver.
The hope is that soil samples contain pathfinder elements such as molybdenum, tungsten, arsenic and antimony that were evident in Underworld’s Golden Saddle discovery and another nearby find known as the Coffee Gold project, which is being explored by Kaminak Gold Corp. (TSX: V.KAM, Stock Forum).
(Gold mineralization at Golden Saddle is hosted by metamorphosed felsic intrusive units, as well as felsic and mafic metavolcanic rocks, and is associated with quartz veins, stockworks and breccias zones as well as pyrite disseminations).
“We know that at Golden Saddle and at Coffee, in addition to the gold mineralization, there were elevated levels of those elements in the rock above the deposit and in concentrations that were readily detectable by this XRF technology,” said Fleming.
“Somewhere within this enormous area, there might be an accumulation of mineralization, a gold deposit,’’ he said. “If it is there, it is probably only going to be 300 or 400 metres across. We don’t know the shape of it. But that’s how big it will be.”
However, as of June 29, the date on which this article was written, Fleming was unable to say for sure that he would be in a position to start drilling this year.
Having collected about 7,000 samples already, Smash hopes to have 17,000 samples in the bag by the time the current season is over. “Drilling would be in addition to that,’’ he said.
For the sake of comparison, it is worth considering that by the time that Underworld was sold to Kinross, Underworld had completed 27,000 metres of drilling, spent $16 million on exploration, and hit pay dirt on the fourth drill hole.
However, it should also be noted that Ryan had done much more soil sampling work before optioning Golden Saddle to Underworld, Fleming said.
Following a tour of the 30-man camp, Stockhouse took a helicopter ride out to where crews are trench sampling in the northeastern part of the Whiskey property, one of three priorities areas that geologists have been able to establish so far. (Those priority areas have been selected because of the geological similarities to Golden Saddle).
From there we flew over some of the six placer gold mines which are located on the Whiskey property. The largest in the area is owned by Stuart Schmidt, a fifth generation placer gold miner).
“We are looking for the hard rock source of that placer mining,’’ Fleming said.
From the front row of the helicopter, it was obvious that Kaminak is working hard to define a resource on its Coffee project. As we flew over the property, we could see three core drills and one reverse circulation drill rig. Also scattered across the ground were bags of rock chips.
“They are blasting that system with the objective of getting to the point later this summer where they will be able to compile all the data and make a resource estimate,’’ said Fleming.
“My gut feeling is that that resource is likely to be two million or more ounces,’’ he said.
From the vantage point of a helicopter seat it was also clear that Kinross has done a lot more drilling to the south and west and north of the Golden Saddle discovery, following up on drilling that Underworld completed in 2008 and 2009.
“We don’t know what the results are. But the fact that there were numerous holes (to the south, west and north of Golden Saddle) would suggest to me that that drilling has been successful in defining extensions to what we had defined in 2008 and 2009, which was 1.5 million ounces,’’ Fleming said.
As Kinross and Kaminak continue their work, the Yukon gold rush shows no signs of slowing down, a government official said. Between the end of February and end of May 2011 another 47,812 were added to the territory’s inventory of active claims bringing the total to a record 220,000, according to the Yukon Geological Survey in Whitehorse.
“A lot of companies, both large and small are adding ground to existing claims,’’ said Lee Pigage, the acting head of mineral services with the Yukon Geological Survey (YGS). “It gives you insurance that you will be in a good position if something major is discovered on your property.
Much of the new staking activity is occurring in the central Yukon, about 55 kilometres northeast of Keno City where Atac Resources Ltd. (TSX: V.ATC, Stock Forum) has identified about a dozen gold and silver targets.
At last count, the YGS said roughly 18 companies are expected to be drilling gold targets this year. Names that have been added to the list in recent weeks include Radius Gold Inc. (TSX: V.RDU, Stock Forum) and Olympic Resources Ltd. (TSX: V.OLA.P, Stock Forum).
Smash is exploring the Whiskey property under an option agreement with Shawn Ryan. Under the deal, Ryan retains a 2% net smelter royalty on the property and is entitled to receive 2.5 million shares of Splash. In return the junior has committed to spending $2.35 million on exploration.