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Guest Post: Yukon Fever - Today’s Hottest Area Play
Submitted by Andrey Dashkov, Casey Research
Yukon Fever: Today’s Hottest Area Play
Building on the spectacular early takeover of Underworld Resources by gold major Kinross this June, recent discoveries in the Yukon Territory have made this large region of frozen tundra the hottest area play in the junior resource sector today.
Economy
The Yukon is Canada’s smallest sub-economy, with a GDP of only C$1.4 billion. It may be small, but mining is a traditional and essential part of the Yukon economy, and it’s also its fastest-growing segment: from 2003 to 2008, the mining industry expanded at a 10.5% average annual rate, far exceeding the 3.1% growth of all industries.
A lot of this growth came in 2008 (latest available data), after the successful launch of Capstone Mining’s Minto copper mine, and new discoveries in the area started attracting a lot of investment money to this underexplored but highly prospective region. Mining grew by a whopping 56.3% in that year.
Minerals
The Yukon is well endowed with a number of mineral resources, including lead, zinc, silver, gold, tungsten, and copper. As of 2009, it had 84 mineral deposits with established reserves and resources, and 2,700 known mineral occurrences.
Much of this natural wealth, however, is spread across areas with little exploration history. Aware of mining’s economic importance, the Yukon government is offering various financial incentives to continue drawing investment capital and exploration effort to the region. These incentives, combined with a stable business climate, were quite successful in making the Yukon one of the world’s best places to explore.
A survey of metal mining and exploration companies operating around the world, conducted annually by the Fraser Institute, places the Yukon 4th among 51 jurisdictions on its Policy Potential Index (PPI). We have used this mining survey extensively when reviewing other jurisdictions. The chart below shows how the Yukon compares to the rest of Canada:
We wouldn’t have ranked Newfoundland and Labrador above Ontario, but nevertheless, this ranking paints a very positive picture: mining companies can take advantage of the territory’s rich mineral potential with relatively little risk. Some 70 mining companies, as of June 2010, already are.
Since 2005, exploration activities in the Yukon were on a steady uptrend, following the lead of such major mining jurisdictions as Ontario and Quebec, as shown in the next chart. (Exploration seems to be dropping back in BC, but that’s a tale for another day.)
But can we really say that another exploration boom is underway in
the Yukon? Yes. Historical data shows that the amount of exploration
there has been extremely high in recent years, dwarfing even the
pre-Bre-X boom of the mid-1990s, as you can see in the next chart.
Exploration expenditures, the key to unlocking the Yukon’s hidden treasures, slowed to C$90 million in 2009 from C$110 million in 2008 following that year’s infamous market collapse, but 2010 looks to be a turnaround year. Exploration spending is forecast to match the 2007 record of C$140 million.
There are many players in this field, with ATAC Resources (V.ATC) and Kaminak Resources (V.KAM) being among the most notable. The stock charts of both of these companies went nearly vertical last summer. It’s interesting to note that most of current gold production in the Yukon comes from placer mining. In 2009, the ten operating Yukon placer mines produced 54,478 ounces of gold, up 3.4% from 52,709 ounces in 2008. The value of this production was US$42.4 million. The next largest source is Minto, which produced 29,000 ounces of gold in 2009.
So what?
Yukon is not just a “good” or “favorable” jurisdiction – it is one of the world’s best. It has a very stable political climate, with a demonstrably pro-mining government. Other variables, like good roads and energy infrastructure, add to its positive attributes. And the place has a lot of room for exploration. The prospects are wide open.
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They have more REE's than China. Time to bring them out!
That's very interesting. Examples?
Rare earths aren't rare, per se. The reason China has a monopoly on production at the moment is because they were employing environmental shortcuts (resulting in degradation) that made their operations more economical, but no one else was willing to employ similar measures. Now with China deciding to restrict supply those other sites become viable again.
Here's a great quote, “Any missiles, any aircraft, or anti-cruise missiles - they’re all dependent on rare earths.”
The thing to remember with Yukon is LONG winters. So don't expect drilling results for the next few months!
http://psychonews.site90.net
Exposing the Oligarchy, one Psycho at a time.
I understand the basics of REEs, and hold 10K shares of a REE company in Greenland. I just didn't know anyone had a REE mining operation in the yukon, or had done substantial exploration with viable discoveries.
Drill baby
PMs going vert, again in Asia, not only on a weak dollar, buyers are emerging.
Yes, Jimi, they sure are.
Looks like the BoS think the "correction" is over.
Blythe and her monkeys will fight like hell to contain things but it certainly looks like the worst has passed.
Seems like you only come out when your trades are green, Mr. Ferguson.
Inquiring minds want to know...
Untrue and unfair. I've been pretty busy posting more detailed stuff over on my blog:
www.tfmetalsreport.blogspot.com
yeayyyyy! the General Motors had a GREAT pop! (Sorry about that...is it San Francisco? Never heard of 'em....
Euro troubles have PM's tearing off like a raped ape tonight
Dollar getting killed (after being set up) just in time for GM. Who would of thought?
Repeat after me:
I, __________________________, SWEAR THAT I WILL NEVER BUY A GM PRODUCT.
The stupid Euro diks, as soon as the NEWS turns, they dump and run.
They are as ignorant as Americans.
Uh, hello.........
Your problems are Pandemic,( as ours are,unless we build ovens and get rid of 150 million people over 50), they are not going away,prepare accordingly and insure your rears.
Buy and hold.
First word of GOOD news,and its back to Bidness as Usual.
...and friggin' cold.
Come on, step right up. Casey Research, world leading specialists in the shallow intellectual drilling
Just so every one is aware the Casey's receive stock options for companies they write up. Some of which will prove to be in the Yukon, if this post meets demographics. It can be made into a monster, if we all pull together as a team.
By the way, which one's Pink?
There are strange things done in the midnight sun
By the men who moil for gold;
The Arctic trails have their secret tales
That would make your blood run cold;
Yes and I'd like to fuck Sarah Palin, too, but that doesn't mean the EPA's ever going to allow it.
Junk me?
Junk you!!!
I don't tolerate vulgar very well, turd.
vaudville perhaps.
Turd !!!
And I who thought the movie Canadian Bacon was just fiction... Seems that fat bastard Moore (looks a bit like Jabba da hut) might get it right on that one. Obama: "Dear americans. Today is a sad day in the history of our nation. Our close neighbour and former ally Canada has stripped us of the right of miner... *cough, I mean bacon. The pillar of the traditional american obes.. *cough-cough.. breakfast. As of 08:00 we are officially at war with Canada!"
Just so we are clear, That would never happen. See up here in Canada, Leo, me, my brother Bud, and my other brother Bud, my sister Bud, and a herd of udder Canadians would dutifully kick your GI JANE asses.
In military circles - the American military is scared shitless of us. I remember in some war games about 20 years ago, we sent the girlie men home crying like bitchez.
Don't believe hollywood the only tough guys are up here in Canada eh. This isn't a place for girls, real men with back bacon need only apply.
next eh
quite the throbbing hard one there. perhaps you should go get that taken care of.
Apart from that annoying detail that all our branches of service combined are 30000 strong. That's about one soldier for every 250m of border with the US.
A little global warming could open up an Arctic land rush.
Just like a little QE2 could get everyone back to work?
Reminds me of a bumper sticker I saw (on the back of an HVAC service truck) a few years ago:
FIGHT GLOBAL WARMING
Buy a Bigger Air Conditioner
According to my The Gold Rushes by Robin May, 1977, the Yukon has been worked over well since around 1880.
I'd say the easy pickings have been.
The Yukon is Beautiful country with some fantastic rivers. Hate to see more destruction up there...for a little shiny metal. Mining Bitchess
The only rare earth the Chinese are interested in hoarding is GOLD. As a store of value, the Chinese diaspora in SE Asia buys chintzy machine-made gold jewelry for its purity. They also covet Imperial green jade (found only in Burma) and dZi beads.
Shameles promotion. Stick to the dirt.
Looks like the FED is scrambling to buy all the tungsten they can produce.
Why would that be... :)
If it weren't for tungsten, we'd have no gold at all.
+100
This article completely ignores the lack of infrastructure in the Yukon. While, yes, the Yukon is certainly open for business, the reason there has not been more mineral development there is that there is very little in the way of infrastructure. So although building small mines (like Minto) or doing geochemical work and drilling are straightforward, they are limited seasonally (most of them are having to wind down drilling about now until the spring), and building a mine without roads, power, etc. is a huge challenge.
Of course at $1400 gold and $4.00 copper it certainly is more compelling :)
There is so!
2 mules, my two sisters, and a goat named Charlie
Canada I kinda like Holla up in Copperhead Row. You best be not going up d'ere.
The Yukon, The Bronx, but why not The Brooklyn, or The Nebraska?
Careful of how you rate Newfoundland. The government wants jobs in return for the minerals you discovered. If you find a mine there, they will make you build a smelter to process them. That's what happened at Voisey Bay.