Mining Explorers 2017: Majors fill funding void North of 60
Goldcorp Inc.’s half-a-billion-dollar purchase of Kaminak Gold Corp. and the Coffee Gold project in Yukon Territory in 2016 marked a major shift for North of 60 mining explorers.
Junior mining explorers typically look to the investment community for the venture capital needed to discover rich deposits of minerals. In turn, major mining companies come along and buy the mineral-rich project or the company that discovered it, typically providing a handsome return for the junior and its investors.
While this model held true for Kaminak and Coffee, a different trend is emerging as the catalyst for future minerals exploration across Alaska and Canada’s North.
In the new model, the typical venture capitalists – many of which got burned twice by wild fluctuations in the price of junior mining stocks in 2008 and 2011 – are showing reluctance to buy into the sector. In their stead, global mining companies are investing heavily in and teaming up with junior explorers across the North.
Since its purchase of Kaminak, Goldcorp has invested heavily in junior exploration companies with gold exploration projects across Canada’s North. This includes a C$35 million strategic investment in Auryn Resources Ltd., exploring gold properties in Nunavut and British Columbia, and a C$4.4 million investment in Colorado Resources, a company primarily focused on gold exploration in B.C.’s Golden Triangle. Goldcorp also grabbed a 19.9 percent equity position in Independence Gold Corp. and Triumph Gold Corp., two Yukon-focused exploration juniors.
Three other gold-producing majors followed Goldcorp to Yukon – Barrick Gold Corp., Newmont Mining Corp. and Agnico Eagle Mines Ltd.
Barrick paid C$8.34 million to buy a 19.9 percent interest in Atac Resources Ltd. and is investing up to another C$55 to explore some of the Carlin-type gold that junior discovered in east-central Yukon.
In a similar deal, Newmont bought an equity position in Goldstrike Resources and is investing C$38.8 million on exploring Plateau, a property where the junior has identified multiple zones rich in visible gold.
Agnico Eagle invested C$15 million to own a 19.9 percent stake in White Gold Corp., a new Yukon-focused gold explorer founded by legendary prospector Shawn Ryan.
Kinross, which already had a foothold in Yukon through its acquisition of White Gold and other properties, traded that land position to White Gold Corp. for a 19.9 percent position in the junior.
In Alaska, Kinross is investing US$5 million to earn up to a 70 percent interest in Millrock Resources Inc.’s Liberty Bell gold project south of Fairbanks.
The gold major, which owns the Fort Knox Mine near Fairbanks, has indicated that it is shopping “for new opportunities in the region, particularly those in close proximity to infrastructure.”
The biggest major move North of 60 was a US$150 million deal that South32, a BHP spin-off that operates eight mines south of the Equator, cut with Trilogy Metals Inc. to earn a 50 percent interest in that junior’s Upper Kobuk Mineral Projects in Alaska.
If the deals are fully exercised, these major investments together would result in more than US$300 million of exploration spending in Alaska and Canada’s North in the coming years.
If 2017 is any indicator, this type of collaboration between savvy exploration juniors and global miners looking north to replenish reserves will be a major driver for mineral exploration and mine development across Alaska and northern Canada for years to come.
From the major moves to the junior discoveries, North of 60 Mining News will be here to keep you informed on the companies discovering the future of Alaska and Canada’s North.
Thank you, and I hope you enjoy this ninth edition of our annual Mining Explorers magazine.
- Shane Lasley, publisher, North of 60 Mining News