The spell of the Yukon (Page 1 of 3)
An insider’s account of the modern-day gold rush
By Scott Berdahl with photography by Marlin Olynyk
|Prosperity Goldfields’ employee Adam Mitchell takes a break from the rain in the camp ‘mailbox’. In the Yukon mail comes a lot bigger and usually on an airplane. (Photo: Marlin Olynyk)
The faint hum of helicopter blades
pierces broken fog and falling snow. I’m 1,330
metres up a mountainside in the central
Yukon’s Wilson Range, pacing back and forth
to mark a landing site as I wait for my ride, which
is hovering somewhere in the valley below. Visibility is
dropping fast. The pilot’s voice crackles from my handheld
radio as he hunts for my location.
“I’m in an avalanche chute,” I reply, sheltering my radio
from a burst of wind, “west of zulu … golf … oh … one.” It’s
not a great place to be, but the autumn snows aren’t too thick
yet and our rendezvous options are extremely limited.
It’s September 2010, and my father and I are 120 kilometres
from the nearest dirt road, staking claims in
a modern-day gold rush. I’ve spent the past eight hours
marking a straight line across rugged topography, blazing
axe marks in fir and spruce where my route dips below the
treeline, digging through fresh snow to stack rocks and
mark shrubs with orange flagging tape in alpine areas above.
Every 457 metres, or 1,500 feet, as per regulations,
I stop at a GPS waypoint to erect a set
of four wooden claim posts, etching my name
and the date into metal tags affixed to each.
The four posts mark corners of four adjacent
20.9-hectare claims, which give the owners
licence to explore the ground for minerals for
a full year, free from competition. And this
year, there is certainly competition.
My father is an independent prospector
who lives in Whitehorse, and we’re revisiting
an obscure gold discovery that he made in the
early 1990s. His find sat open and unclaimed for the past decade, but a recent inspection of the territorial
government’s mineral claim maps revealed fresh claims
staked by a competitor over part of the area. Today, while
staking what’s left, we see a third company’s helicopter dropping
posts near our claims, prepping the ground for its own
crews. Just barely, we’ve beat them to it.
The hum of the AStar helicopter gets louder now, growing
slowly and then quickly to a roar. But in the fog, there’s
no other sign of the machine.
“At treeline …” comes the pilot’s voice again, “… can’t
go any higher.”
Above the trees, unbroken snow cover and the enshrouding
storm create a dangerous whiteout. But I’m at treeline
too, where the last clusters of fir lend some definition to the
hillside. I listen, tuning my ears to the chopper. After
a pause, I yell into the radio — he’s too far to the west.
The roar drops back down the mountainside, adjusts,
then rises again, this time accompanied by the helicopter’s
bright landing lights cutting through the blowing snow.
I wave, then crouch to brace against the
impact of the rotor’s downwash.
For many Canadians, the Yukon still conjures images
of stampeding prospectors, pans full of gold, poems by
Robert Service and other trappings of its first major gold
rush. Following the arrival of over two short tons of
Yukon placer gold in Seattle in July 1897, tens of thousands
of fortune seekers made the journey north to the
remote Klondike Valley, and Dawson City became
the quintessential boom town: a sprawling mass of false
fronts, one-room cabins and wall tents nestled among the
hills and permafrost-stunted spruce of the Yukon wilderness.
Suddenly, and briefly, it was one of western Canada’s
Gone, however, are the days when news of a gold strike
elicits this kind of a response from the general public.
Following a series of recent gold discoveries in the Yukon,
the soft yellow metal is again at the heart of intense international
interest in the territory, but today’s rush is
a different scene. Most modern stampeders participate
from the comfort of their offices and homes by simply
buying stock in public companies that are exploring the
North. On the front lines, geoscientists and crews of
summer fieldworkers, and a few dozen independent prospectors
like my father, explore the Yukon bush with both
low- and high-tech tools. Behind the scenes, CEOs and
financiers navigate tumultuous junior mining markets,
attempting to promote their projects and secure funding
for further exploration.
“It was a bit of a perfect storm,” says Mike Burke of
the modern rush. Recently head of mineral services for the
Yukon Geological Survey, Burke is now chief geologist for
Golden Predator Corp., a prominent mineral exploration
company in the territory. A major hardrock gold discovery
south of Dawson — promoted by some as a possible source
of the Klondike goldfields — and a rare but potentially rich
style of gold mineralization found across the territory underscored
the Yukon’s mineral potential just as international
gold prices soared to an all-time high. But other factors have
channelled interest in this direction, says Burke. The Yukon’s
clear land-use policies, its mostly settled First Nations land
claims and its stable politics (compared with, say, the Congo)
have convinced both local and international investors that
it’s a relatively safe place to speculate.
A typical year in the past decade would see fewer than
10,000 claims staked in the Yukon, whereas more
than 190,000 claims were registered in 2010 and 2011,
peaking at 10.8 percent of the territory’s total surface area
under mineral claim — roughly the same percentage as its
national and territorial parks. In 2011, more than 100
junior mining companies collectively spent over $300 million
exploring the territory for gold and other minerals.
“The discoveries really kicked it off,” says Burke.
“Elsewhere, people are looking under cover. Here, we
proved there’s still low-hanging fruit.”
If this avalanche of excitement in the Yukon can
be traced back to a single person, it would likely be Shawn
Ryan. At first glance, Ryan is what you might expect in
a modern prospector: a little unkempt and very optimistic.
But his enthusiasm is contagious.
For years a mushroom picker based out of a tin shack in
the Klondike Valley, Ryan was intrigued by the region’s
rich placer gold, pulled as nuggets and dust from alluvial
gravels over the past century. Buried somewhere in the surrounding
hills, he reasoned, must lay the hardrock source
of the Klondike goldfields. So in 1997, with a family on the
way, he took to prospecting.
Ryan is now president of Ryan Gold, a publicly traded
junior mining company that explores his prospects across
the territory, while his wife and business partner, Cathy
Wood, tends to their various mineral service companies,
their helicopter and, soon, their drill. “He has great ideas,”
she says. “Guess who gets to run them.”
Borrowing strategies from junior mining companies,
Ryan began soil sampling, a low-impact exploration technique
that requires only a few grams of soil, extracted with
a soil auger, for geochemical analysis. While many smalltime
prospectors might have coasted on moderate, early
successes, Ryan reinvested his profits into hiring crews and
expanding his operations, finding innovative ways to explore.
“There was no real eureka moment,” says Ryan, who
likens each soil sample his crews take to a brush stroke on
a painting. A single sample might show a high concentration
of gold, or a lack thereof, but only at a single site. With large
grids, however, pictures and patterns start to appear, in gold
and in other elements, clues to the nature of the underlying
bedrock. Using GIS mapping software to process the results,
Ryan paints colourful maps to portray his data.
On one property in particular — “White Gold,” near the
confluence of the White and Yukon rivers — the soil results
were impressive. With each additional survey, Ryan’s picture
grew, until brightly coloured zones of anomalous gold
in soils spanned an eight-by-four-kilometre area. Through
Wood’s promotional efforts, Ryan’s data found their way
to geologist Adrian Fleming.
Although he had been in the exploration business
for 35 years, in places such as New Guinea, South America,
Africa and the Arctic, Fleming had never seen a geochemical
dataset as promising as Ryan’s White Gold project — anywhere.
“This is just incredible,” he told a colleague. “We’ve
got to have this thing!” Fleming had recently started
a company, Underworld Resources, in hopes of exploring
Australia and New Zealand for minerals, but seeing Ryan’s
data, he jumped on the opportunity to come north.
“Underworld Resources was a dream run,” says Fleming
when we meet at his office in downtown Vancouver. Just
three summer exploration seasons after signing a deal with
Ryan and Wood, through sampling, trenching and drilling
of the anomaly, the company outlined a resource of over 1.5 million ounces of gold, two dozen times more than the
first payload of Klondike gold carried to Seattle in 1897.
Again, news of the Klondike spread, this time as speculation
that its hardrock source had been found. The discovery
caught the attention of the Toronto-based Kinross Gold
Corporation, which bought Underworld Resources, and
the new deposit, for a cool $137 million.
“It all happened very quickly,” says Fleming. “I doubt I’ll
have the good fortune to duplicate that again in my career.”
He’s almost certainly right. The junior mining market is
a rarity among industries, in that most of its companies have
no product. Like Underworld, a junior company identifies
a promising prospect, often buying discoveries directly from
independent prospectors like my father or Ryan, then goes to the stock market to raise money. It spends that money
exploring the prospect. Nothing comes out the other end,
save for a bit of new data on a small patch of the Earth’s
crust. As might be expected from the business model, a huge
majority of these companies fail.