Mining investments herald 'a new day' for Yukon economy: analyst
John Ing says major mining companies with money to invest are looking to replenish their mineral reserves
A mining analyst says money pouring into Yukon mineral exploration projects bodes well for the territory's economy.
"It's a new day from the standpoint of exploration. It's healthy," said John Ing, chief executive officer of Maison Placements Canada Inc., an investment office in Toronto.
Barrick Gold announced earlier this week that it wants to initially invest more than $8 million in ATAC Resources's Orion project, 55 kilometres east of Keno City. The multi-phased deal could reach a total investment of more than $63 million for exploration.
That follows recent announcements from Goldcorp Inc., Newmont Mining and Agnico Eagle Mines about plans to invest in the territory.
Ing says major mining companies have reduced their costs and now have money to invest. He said they're also looking to replenish their reserves.
"With free cash flow, they are now looking at exploration or partnerships with other companies who have found gold or discovered deposits," Ing explained.
"They're trying to accelerate the program because after all, exploration is the life blood for the mining industry when their product declines with every year they produce."
The deal between Barrick and ATAC closes May 3.
A sign of what's to come
Samson Hartland, executive director of the Yukon Chamber of Mines, says it's too soon to know what might come of Barrick's investment in ATAC, since the latter is a junior mining company in the early stages of exploration of its Rackla property.
But he says it and the other investments are a positive development.
"We're going to see an increase on the side of labour needs when it comes to a number of these projects coming into fruition."
He says he isn't surprised that some of the biggest mining companies in the world are taking an interest in the territory.
"It's just a sign of what's to come now that the markets are in a healthy position."
Earlier investment from Newmont, Goldcorp
The Barrick news follows the March announcement from US-based Newmont, the world's second largest gold producer, that it has an interest in buying Goldstrike Resources, east of Mayo. Goldstrike said it had commitments from Newmont worth more than $14 million over two years.
Also in March, mining giant Goldcorp bought almost 20 per cent of the shares of Triumph Gold, a gold property west of Carmacks. Last summer, it also spent more than $500 million to acquire Kaminak's Coffee Creek gold property south of Dawson City.
In December, Agnico Eagle bought a stake in the White Gold Corporation, for $14.52 million.
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