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Mike Burke is the head of mineral services with the Yukon Geological Survey. Few, if any, know the Yukon better than Mike. He says that the geology of a "frontier district" like the Yukon requires time to be fully understood before such an area can be properly drilled. Mike steadfastly believes in the mineral potential of the Yukon, and credits much of the gold-play excitement to prospector Sean Ryan, who diligently collected soil samples all over the Yukon for years before letting the mining industry in on his secrets. In this exclusive interview with The Gold Report, Mike tells us some of Sean Ryan's secrets and provides an update on some of the most promising projects in the Yukon's White Gold Camp.
The Gold Report: It's a treat to interview someone with such extensive knowledge of the Yukon, probably the hottest gold area play anywhere. Mike, you have been working with the Yukon government since 1990. These days, one company will spend more exploring for gold in one season in the Yukon than did all the juniors combined just a few years ago. Did you think you'd ever see such a remarkable gold rush?
Mike Burke: Yes, I did, actually. I think I've proven over the years that I'm a great believer in the mineral potential of the Yukon. In 1983, as a student, I worked for Canamax Resources, which was looking for gold and tungsten in the Yukon. When I graduated in 1987, Canamax opened up the Ketza River mine. I worked there as a mine geologist through development, production and closure. We mined out the oxide portion of the Ketza River deposits, but there are substantial sulfide reserves there, as well as a ton of exploration potential. Yukon-Nevada Gold Corp. (TSX:YNG) has been working there in the last few years, but Ketza River is far from reaching its full potential. We're now seeing exploration success there.
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A number of placer gold districts in the Yukon have produced a substantial amount of gold from creeks. I'm pretty sure it didn't fall from the sky. There hasn't been a discovery of a substantial gold deposit in those areas except for Victoria Gold Corp.'s (TSX.V:VIT) Dublin Gulch, in the Mayo Mining District. Dublin Gulch is a 2.5 million-ounce (Moz.) gold deposit, but in the Klondike or Livingston Creek or other placer mining areas there's no substantial multi-million ounce gold deposit. That's always been a mystery. There hasn't been much modern exploration in these areas, but we're seeing it now. Companies are using new technology to augment old techniques like soil geochemistry. When I worked as a student, we'd go out and get our 50 soil samples a day and come back and plot by hand where they were on a field map. In the fall, we would take that information to draftsmen in the Vancouver office who would draft a master set of maps with the locations and assay data. Now GPS is used to collect that data in the field so locations with assay data can be plotted instantly when the assay data is received, sometimes while still in the field. I knew that once we started seeing money spent in the right areas, hidden gold deposits would be discovered. And we've definitely seen a couple in the last few years.
TGR: Would this rush be taking place without a $1,300 or $1,400 gold price?
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MB: It certainly helps. But it just might be taking place anyway, because of people like Sean Ryan. He was working when the gold price was a lot less than $1,400. He was using the techniques we just talked about to develop some impressive soil anomalies on some of these properties, especially in the White Gold area.
TGR: He used a hand auger to go deeper into the soil than just the surface. Is that a more effective method of soil sampling?
MB: People used that method years ago, but Sean was just a little more scientific about it. With a hand auger, it's possible to get a much better response from the soil, and when the samples are collected from deeper soil, it reduces the likelihood that gold will come from somewhere else. Sean really emphasized that you have to take quality samples. In some cases, you might only get one chance to take a sample over a mineral deposit, and if you do a cruddy job, you might just miss a deposit. When he discovered GIS and MapInfo and the ability to integrate and process large amounts of data, a "monster" was born. He had an integrated geological database at his fingertips. Sean used old tools and modern tools and used them as a prospector would, which is rare.
TGR: Sean Ryan was recently named the Prospectors and Developers Association of Canada's (PDAC) Prospector of the Year after he took the information he learned from those soil samples and physically staked a number of properties. One of those properties was the White Gold Property, where Underworld Resources had discovered a mineralized gold system before being bought by Kinross Gold Corp. (TSX:K; NYSE:KGC) last winter. What do you know about those soil anomalies?
MB: Sean had been slowly building up his database of soil sample results for a number of years. In 2006, Underworld looked at the soil data and was overwhelmed at the size and the quality of the soil anomaly. Underworld did some trenching and got some good results. It didn't take them long to hit the anomaly in drilling.
TGR: How much do you estimate was spent in exploration in the Yukon in 2010?
MB: It's over $150 million. We don't have an exact number yet, but it's definitely a record-setting year for exploration up here.
TGR: What was that number in 2009?
MB: Ninety million, but what's important is that we're seeing $150 million in mine development. That's a point that I've tried to make in the talks to investment guys and analysts. You can spend $150 million on exploration, but if you're not in the right jurisdiction to turn those exploration dollars into development dollars and a producing mine, then you're throwing your money out the window. This year, we're going to have three operating mines. That's a critical part of the equation.
