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Vol. 22, No. 20 Week of May 14, 2017
Providing coverage of Alaska and Northwest Canada's mineral industry

Mining News: Major Yukon gold rush

Global miners pick up great gold projects across the home of the Klondike

Shane Lasley

Mining News

Sparked by the discovery of the White Gold district and fueled by investors’ appetite for mining stocks, the Yukon experienced a modern era gold rush in 2007 that included nearly C$1 billion of exploration spending over six years. This frenzied exploration turned up dozens of gold projects across the northern territory and now some of the world’s biggest gold miners are cutting deals on the best of the discoveries made.

Kinross Gold Corp. was the first of the major gold miners to make a move on these discoveries when it grabbed up White Gold, the property that sparked the Yukon gold rush, in 2009.

The real major Yukon gold rush, however, started with Goldcorp Inc.’s C$520 million buyout of Kaminak Gold Corp. in 2016. Since then, Agnico Eagle Mines Ltd., Newmont Mining Corp. and Barrick Gold Corp. have all picked up gold properties in the territory.

“Large companies are looking for a place where there is still near surface high-grade gold to be found in a geopolitically stable environment,” said Goldstrike Resources COO Bill Chornobay. “The entry into Yukon of Newmont, Barrick, Agnico, Kinross, and Goldcorp is a very strong testament to that and to their belief in the future of Yukon.”

Goldstrike for Newmont

Chornobay has first-hand experience with high-grade gold in the Yukon and the major miners looking there. In April, Goldstrike closed a C$53 million deal with Newmont on Plateau, an expansive exploration property in the Yukon known for its prolific visible gold.

For several years, Goldstrike has been discovering and expanding thee zones of high-grade gold across its 3,500-hectare (8,650 acres) Plateau property in eastern Yukon. Last year, however, was a particularly successful year for the gold explorer – resulting in the discovery of six new zones on the property.

The first such find was Bonanza, discovered about 4,000 meters away from Goldstack, one of the three primary gold zones originally found along a 50-kilometer- (31 miles) trend at Plateau South.

Initial mapping of a small outcrop at Bonanza identified the most pervasive coarse visible gold seen in bedrock at Plateau property. One grab sample collected from this 12- by 20-meter area of surface bedrock assayed at 436.4 grams per metric ton gold. Prospecting and drilling confirmed that this Bonanza gold extends well beyond the outcrop.

The 2016 exploration discovered at least five other new zones – Goldback, Goldbar, Gold Standard, Goldworks and Big Bang.

These discoveries, coupled with the zones already found across a broad expanse of this property caught Newmont’s attention.

In March, the gold major cut a deal to earn up to 75 percent stake in Plateau.

The agreement included a C$6 million private placement financing under which Newmont purchased 12.71 million Goldstrike shares at C47.4 cents each.

As a result, Newmont has the option to earn an initial 51 interest in Plateau by paying C$8 million to Goldstrike; investing C$17.4 million on exploration at Plateau; and completing an NI 43-101 resource estimate on the property.

If Newmont decides to up its ownership of Plateau to 75 percent, it must invest another C$21.4 in exploration and complete a feasibility study for Plateau by the end of 2027.

After earning 75 percent interest in Plateau, Newmont has agreed to fund all costs until it delivers a program and budget for the development of the first mine on the property. At this point, Goldstrike has a financing option under which Newmont would fund all costs relating to Plateau, including all mine development costs, and Goldstrike would pay Newmont back from 80 percent of the explorer’s share of cash flow from the mine.

“This new strategic alliance is an excellent foundation for a long term, mutually beneficial relationship, with Newmont being the advanced explorer, mine builder and producer, and Goldstrike being the project generator, prospector and grass roots explorers – a passionate team focused on discovery,” said Goldstrike President and CEO Terrance King.

Barrick nabs Carlin-style gold

Barrick Gold Corp. has also staked its claim in the Yukon, cutting a deal to earn up to a 70 percent interest in a portion of Atac Resources Ltd.’s Rackla Gold property.

In total, the Rackla property blankets a gold prospective area that stretches for some 114 miles (185 kilometers across the Yukon.

In recent years, Atac has subdivided this massive land package into two projects – Rau, an area at the western end of the property that includes the Tiger gold deposit, and Nadaleen, an area that includes the Orion deposit and a number of other Carlin-style gold discoveries made in the eastern half of Rackla.

It is a section of the Carlin-style gold that Barrick is interested in. To accommodate this interest, Atac has divided Rackla into three separate projects – Rau, which encompasses 255 square miles (660 square kilometers) at the western end of Rackla; Osiris, a 117-square-mile (302 square-kilometers property at the eastern end of Rackla that hosts the Osiris, Conrad, Ibis, and Sunrise discoveries; and Orion, a 301-square-mile (780 square kilometers) section in the middle that hosts the Orion, Anubis, and eight other early stage Carlin-type gold prospects.

To earn an initial 60 percent interest in Orion, the central project, Barrick must spend C$35 million on exploration at the project over the next five years.

Upon spending this initial earn-in, the companies will form a joint venture and Barrick can earn another 10 percent interest in Orion by investing an additional C$20 million before the end of 2026.

“Atac's generative exploration skills and Barrick's knowledge and experience in Carlin-style systems will be a great combination to unlock the full potential of this district," said Rob Krcmarov, executive vice president, exploration and growth, Barrick.

To further stake its claim to this gold-rich section of the Yukon, Barrick paid C$8.34 million to buy 16.68 million Atac shares, giving the major a 19.9 percent interest in the Yukon-focused explorer.

Atac plans to apply the money raised with the financing that closed on May 4 towards a planned C$10 million exploration program on the Rau and Osiris projects in 2017.

“With over 15,000 meters of drilling planned, we anticipate making significant progress in evaluating known gold zones as well as continuing exploration work across our large district-sized land package,” said Atac President and CEO Graham Downs.

Coffee gold by 2021

In the meantime, Goldcorp, the company that sparked the major Yukon gold rush, continues to make progress on advancing towards a major mine development at the Coffee project in the White Gold District..

Prior to being bought out by Goldcorp, Kaminak published a feasibility study that details an open-pit, heap-leach gold operation at Coffee producing 184,000 oz of gold annually over a 10-year mine life at all-in sustaining costs of US$550/oz.

This mine plan is based on 63.7 million metric tons of indicated resources averaging 1.45 g/t (2.97 million oz) gold and 52.4 million metric tons of inferred resources averaging 1.31 g/t (2.1 million oz) gold.

“With the acquisition of Kaminak and its Coffee project, Goldcorp has inherited a very prospective land package with over 60,000 hectares (150,000 acres) that demonstrates potential for near mine discoveries with mineralization remaining open along strike and at depth and the potential for the discovery of a major new mineral system,” Goldcorp President and CEO David Garofalo said at the time of the acquisition.

Over the ensuing year, the major has been busy exploring that potential, including roughly US$15 million of work last year and an initial phase of 2017 drilling that kicked off in March.

This year’s drilling is focused on the Supremo T8-9 and Arabica targets.

Supremo T8-9 is located about 200 meters east of the planned Supremo open-pit mine. Highlights from 17 holes drilled during the first quarter include: 10.66 meters of 1.88 g/t gold from a depth of 51.82 meters; and 15.24 meters of 1.38 g/t gold from 59.44 meters.

Results from Arabica, which is located about 1,500 meters east of the planned Supremo pit, have yet to be released.

While exploring the property, Goldcorp is making headway on the permitting needed to build the mine.

Officially launching the permitting process with the submission of an environmental socioeconomic assessment application for Coffee, Goldcorp is targeting commercial production at its Yukon gold property by 2021.

For the Yukon, this could be the first in a series of mines resulting from this major gold rush to the home of the Klondike.

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