Infrastructure Upgrades and Government Support Could Benefit Yukon Zinc Mining

Yukon zinc mining could receive a boost thanks to government support in the form of infrastructure upgrades across the territory.

The Government of Yukon’s support of the mining industry in both policies and infrastructure improvements is helping to expedite the exploration and development of projects that hold significant economic benefits for the territory.

Yukon has attracted many major miners, including Agnico Eagle Mines (TSX:AEM,NYSE:AEM), Barrick Gold (TSX:ABX,NYSE:ABX), Newmont Mining (NYSE:NEM), Coeur Mining (NYSE:CDE) and Goldcorp, now Newmont Goldcorp (TSX:NGT,NYSE:NEM). Yukon’s underdeveloped mineral potential also holds promise for junior resource companies, several of which are now advancing some of the regions most impressive deposits.

Natural Resources Canada recently reported that exploration spending in the Yukon grew from C$168 million in 2017 to an estimated C$250 million in 2018 — the second highest exploration investment figure in the territory’s history. “We are proud that Yukon is being recognized as a top jurisdiction in Canada for exploration investment. Our government has focused on building strong relationships with Yukon First Nations to bring certainty to the mining sector, and this year’s investment by major mining companies in Yukon’s junior mining companies is very encouraging,” said Yukon Minister of Energy, Mines and Resources Ranj Pillai in a release. “2018 marks the second highest exploration expenditures in Yukon’s history, nearly doubling our share of national exploration spending in just the last two years.”

The Conference Board of Canada has predicted that in a few years Yukon will be Canada’s fastest growing economy, especially once the three most advanced proposed mines come into production: Victoria Gold’s (TSXV:VIT,OTC Pink:VITFF) Eagle mine, Newmont Goldcorp’s Coffee project and Western Gold and Copper’s (TSX:WRN,NYSEAMERICAN:WRN) Casino project.

Favorable geology

The Yukon owes its geologically diverse landscape to the North American Cordillera mountain range, which has produced myriad rock types in its more than 1 billion year history. The territory hosts established reserves of copper, gold, iron, lead, silver, tungsten and zinc in more than 80 mineral deposits, including some of the world’s largest known ore bodies. Yukon’s abundant mineral potential is well-reflected in its 2,700 known mineral occurrences as well as the fact that only 12 percent of its total land mass has been explored or developed. Two of the territory’s most important mineral regions are the White Gold district and the Selwyn basin.

The White Gold district gave rise to two famous gold rushes. Skookum Jim’s Bonanza Creek gold discovery kicked off the 1896 Klondike gold rush that put Yukon on the map and made the mining industry a pillar of its economy. Much later, Shawn Ryan’s 2007 gold discovery that led to the Golden Saddle and Coffee deposits sparked a record-setting staking rush that has brought advanced exploration techniques to the territory’s mining sector.

The Selwyn basin may be one of the largest underdeveloped lead-zinc districts, but it is home to some of the world’s most prolific SEDEX-style deposits. These type of deposits tend to be large, high grade and continuous, making them economically attractive and amenable to lower-cost bulk mining methods. To date, 17 known SEDEX deposits hosting a combined 55 million tonnes of zinc and lead have been discovered in the region. The most well-known SEDEX-style ore bodies in Selwyn are the seven deposits in the Anvil district, the Howard’s Pass deposit and the Tom and Jason deposits, which now form Fireweed Zinc’s (TSXV:FWZ) MacMillan Pass project.

Stable, pro-mining government

On top of Yukon’s remarkable mineral wealth, the mining industry is regarded as one of the most stable jurisdictions in the world owing to the excellent support of the territorial government. The Government of Yukon spends more per capita than any other Canadian jurisdiction on directly financing mining exploration. The Yukon Mineral Exploration Program, which provides capital to exploration companies, is expected to provide up to C$1.4 million in funding to exploration companies in the 2019 to 2020 fiscal year. This exploration funding is an important vector for the discovery and future development of mineral deposits in the Yukon.

The Yukon government also offers mining companies the resources they need to help build effective, long-term partnerships with First Nations sovereign governments. Yukon’s First Nations communities encourage responsible resource exploration and development through partnering with mining operations, creating new companies to service the industry and providing the mining industry with a large pool of skilled labor. Most of the First Nations’ land claims in Yukon have been settled, making permitting and consultation more straightforward and expedient compared to other jurisdictions within Canada.

Mining-focused infrastructure upgrades

One of the most critical ways the Government of Yukon has helped promote the advancement of the mining industry in the territory is through much-needed infrastructure projects.

The existing infrastructure includes the Alaska Highway, 4,800 kilometers of all-weather roads, several airports, power and telecommunications. Yukon has direct access to major distribution channels including Alberta to the southeast, which connects the territory to a primary distribution center in Western North America, and BC and Alaska to the south and west respectively, both of which connect the territory to Asian markets via primary shipping lanes.

“Often in northern projects operators have little choice but to fly in equipment at great cost and operate their entire program with helicopter support. We’ve been fortunate that the existing Canol Road allows us to bring fuel, drills, heavy equipment and other supplies to the camp cost-effectively, and that our internal road network means most of our drill holes are done without helicopter moves,” Fireweed Zinc CEO Brandon Macdonald told Investing News Network. “As the project moves towards production, having an existing road simplifies permitting for access as there is already an established right-of-way. The rest of the road network in the region is ready to facilitate the movement of concentrates to ports at Skagway and Stewart, or railhead at Fort Nelson. This gives us our choice of smelters in Asia or BC.”

In September 2017, both the Government of Canada and the Yukon government announced they would be committing C$360 million in combined funding for the Yukon Resource Gateway Project. This major road network expansion that will make mineral exploration and development in the region significantly less expensive by improving road access. The project includes upgrading approximately 650 kilometers of road and helping build or replace numerous bridges, culverts and stream crossings.

Several of the territory’s mineral projects stand to benefit from road infrastructure upgrades, including Western Copper and Gold’s Casino project, Newmont Goldcorp’s Coffee project and Fireweed Zinc’s MacMillan Pass project.

“The Yukon government has committed to improving access to the project every year that Fireweed has been operating. They have replaced bridges, with the intention to replace more, and made incremental improvements to the condition of the Canol Road,” explained Macdonald. “We are hopeful that the governments of Yukon and Canada will fund a full improvement of the Canol Road as they have done with other roads to resource projects in the region.” Macdonald said Fireweed has opted for the conservative assumption by including the cost of significant road improvements in its preliminary economic assessment for the MacMillan project. Any additional government assistance could have a positive impact on the project’s economics.

Takeaway

Geological diversity, government support and expanding infrastructure make the Yukon one of the most attractive areas for mining investment in Canada and one of the world’s top-ranking mining jurisdictions. A long-time mining mecca, the territory still has much to offer in terms of new district-scale discoveries, causing projects to advance with the potential to further unlock economic value in the region.

This INNSpired article is sponsored by Fireweed Zinc (TSXV:FWZ). This INNSpired article provides information which was sourced by the Investing News Network (INN) and approved by Fireweed Zinc in order to help investors learn more about the company. Fireweed Zinc is a client of INN. The company’s campaign fees pay for INN to create and update this INNSpired article.

This INNspired article was written according to INN editorial standards to educate investors. 

INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.

The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with Fireweed Zinc and seek advice from a qualified investment advisor.