Mining and Exploration in Westernmost Canada - A Fundamental Research Corp. Analyst's Perspective
In this article, we discuss mining
potential in Westernmost Canada, which includes the province of British
Columbia and the Yukon Territory. Despite a broad perception that opening a
mine in British Columbia requires navigation through miles of red-tape and
negotiations with First Nations, the province remains a hot-bed for mineral
exploration. One influential factor is certainly the mineral potential
associated with a region that, throughout its geologic history, has continually
been situated on an active plate boundary (British Columbia ranks in the top 20
worldwide in mineral potential according to the Fraser Institute Survey of
Mining Companies 2008/2009). The Yukon Territory on the other hand, remains
largely under explored, and is benefiting from the devolution of authority from
the federal government which has allowed management over its own resources.
British Columbia
Part of the mineral potential is shown in the number of past producing mines
found throughout the province. Many of these past producing mines shut down due
to factors varying from low metal prices, to poor resource delineation. Several
companies under Fundamental Research Corp’s coverage are taking advantage of
these past producing mines where significant mineralization is known to exist.
One such company, Bralorne Gold Mines Ltd. (TSXV: BPM , RESEARCH - FRC rating and fair
value: Buy and C$1.60 (Risk 5: Highly Speculative) - as of June 12, 2008) is
following the age old adage that “gold is where you find it” in their attempt
to revive BC’s most productive mining camp at the past producing Bralorne,
Pioneer and King gold mines. Sultan Minerals Inc. (TSXV: SUL , RESEARCH - FRC rating and
fair value: Buy and C$0.26 (Risk 5: Highly Speculative) - as of October 26,
2009) is working to delineate a mineable resource of tungsten, lead, zinc and
molybdenum at the past producing Jersey/Emerald mine near Nelson, BC [see image
- Figure 1: Jersey Mine Trackless Portal, Sultan Minerals Ltd. (Source:
Fundamental Research Corp)]
The infrastructure and availability of skilled labour is another inviting
factor for the province. Companies such as Abacus Mining and Exploration Corp.
(TSXV: AME, RESEARCH - FRC rating and fair value: Buy and C$1.00 (Risk 5: Highly
Speculative) - as of August 27, 2009) and Bard Ventures Ltd. (TSXV: CBS, RESEARCH - FRC
rating and fair value: Buy and C$0.35 (Risk 5: Highly Speculative) - as of
October 13, 2009) are located within tens of kilometres - or less - of major
infrastructure such as grid power, rail and road. Abacus currently holds an NI
43-101 compliant resource of 365 million tonnes measured, and indicated,
containing 2.51 billion lbs of copper, and 2.29 million ounces of gold.
As can already be seen, an extremely wide variety of deposits can be found
throughout British Columbia ranging from the above mentioned projects, to
sediment hosted gold deposits such as Skygold Ventures Ltd’s (TSXV: SKV , RESEARCH - FRC
rating and fair value: Buy and C$0.62 (Risk 5: Highly Speculative) - as of
April 30, 2009) Spanish Mountain project, to deposits containing metals used in
high-tech applications such as Commerce Resource’s (TSXV: CCE - FRC rating and
fair value: Buy and C$2.10 (Risk 5: Highly Speculative) - as of April 25, 2008)
Blue River Tantalum-Niobium project. Another company which in on our radar, and
we feel has interesting projects in British Columbia, including a potentially
surface mineable gold deposit, is Goldcliff Resource Corporation (TSXV: GCN).
The Yukon Territory
In the Yukon, there has a been a significant spike in interest following the
2003 gold discovery at the White Gold property currently held by Underworld
Resources Inc. (TSXV: UW). The Casino project, currently being advanced by
Western Copper (TSX: WRN , RESEARCH - FRC rating and fair value: Buy and C$3.73 (Risk 5:
Highly Speculative) - as of November 24, 2009), is considered Canada’s second
largest undeveloped gold deposit with in-pit reserves of 8.0 million ounces of
gold, 4.4 billion pounds of copper, and 475 million pounds of molybdenum. What
the Yukon currently lacks in infrastructure, it is making up for with a new
geological database system, and improved permitting and social impact
procedures. The Yukon Environmental and Socio-economic Assessment Act (YESAA)
provides potential investors with a single point of contact for initiating
environmental protection studies, and 11 out of 14 First Nations in the
territory have settled land claims. Another company which we are monitoring in
the Yukon is Aldrin Resources Corporation (TSXV: ALN).
In summary, while Canada’s western provinces and territories may not be
considered first for exploration, investors should by no means take their
potential lightly as their history (both mining and geologically) indicates a
bright future.
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Vincent Weber, B.Sc. Research Associate - Mining
Vincent graduated from the University of Waterloo in the
interdisciplinary Honours Science and Business program. Vincent has a unique blend of knowledge in technology, science
and business, as well as information technology. His educational
experience also built the backbone for his knowledge in geological research
including regional deposit and structure mapping, sample interpretation
and technical report writing.
Vincent is a popular speaker at investment conferences related to his areas of focus - Mineral Projects and Small Cap companies.
Disclosure: FRC provides fee based coverage to some of the companies mentioned in
the article. For analyst research reports on the covered companies mentioned in
this article please visit: Fundamental Research.
