The convergence of government commitment, improved market conditions and increased industry collaboration usher in an era of reconciliation for B.C. miners.
Image courtesy of Skeena
At the Association of Mineral Exploration’s (AME) Roundup 2019 conference, Premier John Horgan emphasized the British Columbia government’s commitment to its mining industry. Horgan vowed to make the Mining Flow-Through Share Tax Credit and the B.C. Mining Exploration Tax Credit permanent, and also outlined plans to invest C$2 million in developing a road map for innovation and expanding the BC Regional Mining Alliance (BCRMA).
The focus of industry players on reconciliation and collaboration led to the creation of the BCRMA, a partnership between the provincial government, the Tahltan central government, the Nisga’a Lisims government, the AME, Dolly Varden Silver Corp., Skeena Resources Ltd. and GT Gold Corp. The target is to develop a culture of support amongst all actors from permitting to mine closure.
The BCRMA represents industry players in the Golden Triangle, a region in Northwest B.C. that has a 150-year mining history. Rich in gold, silver, zinc, copper, lead and molybdenum, the area covers nearly 25% of the province. With strong road connectivity, three new run-of-river hydroelectric facilities and the completion of the Northwest Transmission Line, which provides miners access to the power grid rather than relying on diesel, the industry is strongly positioned for development. “Projects that were generally diesel-powered now have a chance to plug into US$0.04-kWh electricity. The far north will get serious amounts of snow, but the flip side is that we have a very supportive government, and local communities understand mining. The Tahltan and the Nisga’a, who are south of us, are dream partners in terms of their understanding of mining,” said Walter Coles, president and CEO of Skeena Resources.
The intent is to ensure that companies not only take from the land, but also share and give back to communities. B.C. is working on its image in order to convey that the province is open for business and able to support mining companies wanting to move into production. It hopes to increase transparency and public confidence while advancing reconciliation with indigenous groups. “Perception plays a key role in attracting investment, so building on the successes of the BCRMA will help address any concerns directly,” explained Edie Thome, president and CEO of AME.
Lengthy permitting processes have certainly dissuaded some from entering B.C., but these efforts ensure that communities benefit. “We must also remember that this province is the largest employer of indigenous peoples, and they play a paramount role in developing the mining industry in B.C.,” said Bryan Cox, president and CEO of the Mining Association of B.C. (MABC).
Only a select few of B.C.’s indigenous groups have established treaties with the government. Chad Day, president of the Tahltan nation, is trying to modify the online staking program that the government administers for companies wanting to enter their land: “Through this system people from all over the world are allowed to stake claims in our territory. We receive notifications of the permits and can then provide feedback or concerns,” said Day.
Their goal is to develop a land use plan with the government where some areas are open for business and others are not. The determining factors will be assessing whether mining negatively impacts species, water and the environment, and preserves culturally significant areas.
In 2017, BC saw its first increase in exploration spending since 2012, reaching C$246 million, compared with C$205 million in 2016. About C$37 million of that increase was in gold exploration, an interesting statistic considering the province’s strength in copper resources. One of the gold-focused juniors to have continued extensive exploration is Aben Resources, having drilled 45 holes between 2017 and 2018 at its flagship Forrest Kerr property. Jim Pettit, president and CEO, elaborated on Aben’s exploration results: “The first hole of 2018 blew the market away: we ended up with four separate distinct high-grade zones from our first hole alone. We hit 10 m of 38 gr/mt and, within that, we had a section of 6 m of 62 g/mt, which was spectacular.”
Boom times on the horizon for Yukon mining
In November 2018, the Conference Board of Canada released a territorial outlook economic forecast that points to Yukon having the fastest growing economy in Canada in the next few years, anchored by three new mines moving into production: Western Copper and Gold’s Casino project in 2025, Goldcorp’s Coffee project in 2021, and Victoria Gold Corp’s Eagle Mine, which expects its first gold pour in September 2019.
The Eagle Mine will be the largest gold mine in Yukon history, and to tackle the impending HR challenge, Victoria Gold Corp has developed a program to retain talent, in collaboration with the government’s apprenticeship programs: “There are many Yukoners who have left to work in other provinces because they could not find a job locally. We are starting a campaign to attract and recruit Yukoners across Canada, and give them an opportunity to come back home to work,” revealed John McConnell, Victoria Gold Corp’s director, president and CEO.
Western Copper and Gold Corporation’s Casino project is currently in the permitting phase, but when in operation will initially produce over 100,000 mt/y of copper and 400,000 oz/y of gold, with an Internal Rate of Return (IRR) of over 20%, and a Net Present Value (NPV) of close to C$2 billion at today’s commodity prices, according to Paul West-Sells, Western’s president and CEO. “The Casino project’s revenue distribution will be approximately 50% from copper, 40% from gold and 10% from molybdenum. Finding such a large amount of gold in a single deposit, approximately 18 million oz including the reserve and inferred resource, is quite rare,” he added.
Shawn Ryan received PDAC’s Prospector of the Year award in 2010 and appeared on the cover of the New York Times Magazine in May 2011, dubbed “the king of a new Yukon gold rush” after his prospecting led to the discovery of Goldcorp's Coffee project. Now serving as White Gold Corp.'s CTO, Ryan is bullish about the district-scale potential of White Gold’s 439,000 hectare land package: “[In 2018] our proprietary exploration strategy produced four brand new gold discoveries - Vertigo with 23.44 g/mt Au over 24.38m, Ryan’s Showing with 20.64 g/mt Au over 6.09m, GS West with 2.97 g/mt Au over 10.0m and Betty with 1.08 g/mt Au over 50.29m.”
White Gold’s CEO, David D’Onofrio, went on to outline how the company’s flagship Golden Saddle deposit had expanded in the last two years: “In 2017, we added approximately 300,000 oz to the existing 1 million oz, and in 2018 another 200,000 oz were added to the resource,” he said.
Copper tumbled into a bear market in the second half of 2018, as the U.S.-China trade dispute, a strong U.S. dollar, and increased supply from Chile and Peru saw the price of the base metal fall from US$3.30/lb in June to US$2.60 in December. However, the medium to long-term outlook for copper is more promising, with BHP Billiton estimating that the build-out of the electric car market will add 5% to global copper demand, requiring US$25 billion in new copper supply investment. Doug Ramsey, president and CEO of Copper North Mining, has focused on transforming Copper North’s flagship Carmacks project in the Yukon, to make it economically attractive regardless of the commodity cycle: “We have reengineered our metallurgical process, specifically bringing the precious metals within the Carmacks resource into the economic model,” he explained, continuing: “This decreases the cash cost of copper production from C$1.67/lb as a copper-only heap leach project to C$1.08/lb as a copper-gold-silver project after precious metal credits.”
Another Vancouver-based junior active in the Yukon is Alexco Resources, currently focusing on the expansion of its Bermingham silver deposit at Keno Hill, which has increased reserves significantly, from approximately 23 million oz of silver, to over 40 million oz of silver today, according to Clynton Nauman, Alexco’s chairman and CEO. Alexco aims to establish production towards the end of 2019, market conditions considered, and Nauman praised the mining-friendly environment in the Yukon, benefitting from 11 of the 14 First Nations in the territory having final and self-government agreements: “This context gives insurance that there is jurisdictional safety and that companies can move their projects from exploration to production,” he said.
This sentiment was echoed by Brandon Macdonald, CEO and director of Fireweed Zinc, one of the new players to enter the Yukon junior community: “A key benefit of working in Yukon is that the mining community has the attention of senior members of the government and the Council of Yukon First Nations,” stated Macdonald.
Fireweed Zinc was created in 2016 following the signing of an agreement with Hudbay Minerals to acquire the Tom and Jason projects. Since Fireweed’s IPO in mid-2017, the company raised an additional C$12.5 million and grown the project size from 55 square km to 540 square km through deals with Newmont and Teck.
District-scale opportunities in the Northwest Territories and Nunavut
Canada’s three federal territories sit to the north of its 10 provinces and are much less inhabited than their southerly neighbors, each with populations below 50,000. Due to their remote location, they also have underexplored mineral potential, with short exploration seasons and expensive logistics limiting historical resource development. However, favorable geology and the availability of substantial land claims are increasingly attracting the attention of a mining community in need of district-scale discoveries.
Northwest Territories (NWT) is home to TerraX Minerals’ flagship Yellowknife City Gold project, a 783 square km property located on the Yellowknife Greenstone Belt, covering 67km of strike length on the southern and northern extensions of the shear system, which hosted the prolific high-grade Con and Giant gold mines. Working in collaboration with the Geological Survey of the NWT and the Giant Mine Remediation Project, TerraX managed to recover 16,000 m of historical drill core. After sorting through and recovering the material, TerraX identified that the core came from holes that were drilled on three of its four targets that had been identified for expanding the deposit. “To find 16,000 m of core in a market where capital raising is difficult is an extraordinary advantage,” stated David Suda, TerraX Minerals’ president and CEO. “This enables us to advance our project at very low cost,” he added.
To the west of NWT sits Nunavut, the current focus of Blue Star Gold Corp., which rebranded from WPC Resources in January 2019. The name Blue Star is taken from the official flag of Nunavut, representing the company's dedication and focus on Canada's north. Through its subsidiary, Inukshuk Exploration Inc., Blue Star owns the 8,015 hectare Hood River gold property located contiguous to the Ulu mining lease. Blue Star also has an option for the right to acquire the entire Ulu property, subject to the approval of the Kitikmeot Inuit Association (KIA).
Stephen Wilkinson, Blue Star’s president, CEO and director, elaborated on the resource potential he sees for the project: “The Ulu deposit has a resource of 600,000 oz measurement and indicated, and 250,000 oz inferred at a grade of 7.8 g/mt, down to a depth of 400 m,” he said, concluding: “Our aim is to increase this resource to a minimum resource to a minimum of 2 million oz within the Ulu property and Hood River.”