Best of the Week
Most Popular
1. Ray Dalio: This Debt Cycle Will End Soon - John_Mauldin
2.Stock Market Dow Plunge Following Fake US - China Trade War Truce - Nadeem_Walayat
3.UK House Prices 2019 No Deal BrExit 30% Crash Warning! - Nadeem_Walayat
4.What the Oil Short-sellers and OPEC Don’t Know about Peak Shale - Andrew_Butter
5.Stock Market Crashed While the Yield Curve Inverted - Troy_Bombardia
6.More Late-cycle Signs for the Stock Market and What’s Next - Troy_Bombardia
7.US Economy Will Deteriorate Over Next Half Year. What this Means for Stocks - Troy_Bombardia
8.TICK TOCK, Counting Down to the Next Recession - James_Quinn
9.How Theresa May Put Britain on the Path Towards BrExit Civil War - Nadeem_Walayat
10.This Is the End of Trump’s Economic Sugar High - Patrick_Watson
Last 7 days
UK House Prices Momentum Forecast 2019 - 18th Dec 18
Will US Government Shutdown Cause The Stock Market To Crash? - 18th Dec 18
The Coming Financial Storm - 18th Dec 18
Jeff Gundlach thinks that a Stocks Bear Market has started. Is he Right? - 18th Dec 18
Gold’s Not An Investment – You Won’t Get Rich - 17th Dec 18
Stock Market At Medium-Term Lows, Which Direction is Next? - 17th Dec 18
This Stock Will Drive America’s 5G Buildout - 17th Dec 18
Stock Market Turn In The Tide - Have a Happy Bear Market! - 17th Dec 18
How A NASA Scientist Could Trigger The Next Cannabis Boom - 17th Dec 18
iShares Russell 2000 IWM Leading Stock Market Decline - 17th Dec 18
Where is the Dow Stock Market Santa Rally? - 17th Dec 18
With Weaker Climate Consensus, Expect Elevated Climate Change - 16th Dec 18
SMIGGLE Advent Calendar 2018 UK Contents - What You Get Look Inside Review - 16th Dec 18
Is there a Lump of Coal in Santa's Stock Market Bag? - 16th Dec 18
This Market Will Drive Gold in 2019… - 16th Dec 18
Gerald Celente:Central Banks Can’t Stop a 2019 Debt Disaster - 16th Dec 18
Gold Stocks Triple Breakout - 15th Dec 18
The stock market fails to rally each day. What’s next for stocks - 14th Dec 18
How Low Could the S&P 500 Go? - 14th Dec 18
An Industrial to Stock Trade: Is Boeing a BUY Here? - 14th Dec 18
Will the Arrest of Huawei Executive Derail Trade War Truce? - 14th Dec 18
Trump vs the Fed: Who Wins? - 13th Dec 18
Expect Gold & Silver to Pullback Before the Next Move Higher - 13th Dec 18
Dollar Index Trends, USDJPY Setting Up - 13th Dec 18
While The Stocks Bulls Fiddle With The 'Fundamentals,' Rome Burns - 13th Dec 18
The Historic Role of Silver - 13th Dec 18
Natural Gas Price Setup for a Big Move Lower - 13th Dec 18
How to Get 20% Off Morrisons Weekly Supermarket Shopping - 13th Dec 18
Gold Price Analysis: Closer To A Significant Monetary Event - 13th Dec 18
Where is the Stock Market Santa Claus Rally? - 12th Dec 18
Politics and Economics in Times of Crisis - 12th Dec 18
Owning Precious Metals in an IRA - 12th Dec 18
Ways to Improve the Value of Your Home - 12th Dec 18
Theresa May No Confidence Vote, Next Tory Leader Betting Market Analysis and Forecasts - 12th Dec 18
Gold & Global Financial Crisis Redux - 12th Dec 18
Wow Your Neighbours With the Best Christmas Projector Lights for Holidays 2018! - 12th Dec 18
Stock Market Topping Formation as Risks Rise Around the World - 11th Dec 18
The Amazing Story of Gold to Gold Stocks Ratios - 11th Dec 18
Stock Market Medium term Bullish, But Long Term Risk:Reward is Bearish - 11th Dec 18
Is a Deleveraging Event about to Unfold in the Stock Market? - 11th Dec 18
Making Money through Property Investment - 11th Dec 18
Brexit: What Will it Mean for Exchange Rates? - 11th Dec 18
United States Facing Climate Change Severe Water Stress - 10th Dec 18
Waiting for Gold Price to Erupt - 10th Dec 18
Stock Market Key Support Being Re-Tested - 10th Dec 18
May BrExit Deal Tory MP Votes Forecast, Betting Market Analysis - 10th Dec 18
Listen to What Gold is Telling You - 10th Dec 18
The Stock Market’s Long Term Outlook is Changing - 10th Dec 18
Palladium Shortages Expose Broken Futures Markets for Precious Metals - 9th Dec 18
Is an Inverted Yield Curve Bullish for Gold? - 9th Dec 18

Market Oracle FREE Newsletter

How You Could Make £2,850 Per Month

The Yukon Metals and Mining Boom: Today’s Hottest Investment Play

Commodities / Metals & Mining Nov 17, 2010 - 03:14 PM GMT

By: Casey_Research

Commodities

Best Financial Markets Analysis ArticleAndrey Dashkov, Editor, Casey’s International Speculator writes: Building on the spectacular early takeover of Underworld Resources by gold major Kinross this June, recent discoveries in the Yukon Territory have made this large region of frozen tundra the hottest area play in the junior resource sector today.


Economy

The Yukon is Canada's smallest sub-economy, with a GDP of only C$1.4 billion. It may be small, but mining is a traditional and essential part of the Yukon economy, and it's also its fastest-growing segment: from 2003 to 2008, the mining industry expanded at a 10.5% average annual rate, far exceeding the 3.1% growth of all industries.

A lot of this growth came in 2008 (latest available data), after the successful launch of Capstone Mining's Minto copper mine, and new discoveries in the area started attracting a lot of investment money to this underexplored but highly prospective region. Mining grew by a whopping 56.3% in that year.

Chart 1 - Real GDP Growth by Industry, 2003-2008

Minerals

The Yukon is well endowed with a number of mineral resources, including lead, zinc, silver, gold, tungsten, and copper. As of 2009, it had 84 mineral deposits with established reserves and resources, and 2,700 known mineral occurrences.

Much of this natural wealth, however, is spread across areas with little exploration history. Aware of mining's economic importance, the Yukon government is offering various financial incentives to continue drawing investment capital and exploration effort to the region. These incentives, combined with a stable business climate, were quite successful in making the Yukon one of the world's best places to explore.

A survey of metal mining and exploration companies operating around the world, conducted annually by the Fraser Institute, places the Yukon 4th among 51 jurisdictions on its Policy Potential Index (PPI). We have used this mining survey extensively when reviewing other jurisdictions. The chart below shows how the Yukon compares to the rest of Canada:

Chart 2 - World's Top Mining Jurisdictions

We wouldn't have ranked Newfoundland and Labrador above Ontario, but nevertheless, this ranking paints a very positive picture: mining companies can take advantage of the territory's rich mineral potential with relatively little risk. Some 70 mining companies, as of June 2010, already are.

Since 2005, exploration activities in the Yukon were on a steady uptrend, following the lead of such major mining jurisdictions as Ontario and Quebec, as shown in the next chart. (Exploration seems to be dropping back in BC, but that's a tale for another day.)

Chart 3 - Exploration and Deposit Appraisal Expenditures

But can we really say that another exploration boom is underway in the Yukon? Yes. Historical data shows that the amount of exploration there has been extremely high in recent years, dwarfing even the pre-Bre-X boom of the mid-1990s, as you can see in the next chart.

Chart 4 - Real GDP Growth by Industry, 2003-2008

Exploration expenditures, the key to unlocking the Yukon's hidden treasures, slowed to C$90 million in 2009 from C$110 million in 2008 following that year's infamous market collapse, but 2010 looks to be a turnaround year. Exploration spending is forecast to match the 2007 record of C$140 million.

There are many players in this field, with ATAC Resources (V.ATC) and Kaminak Resources (V.KAM) being among the most notable. The stock charts of both of these companies went nearly vertical last summer. It's interesting to note that most of current gold production in the Yukon comes from placer mining. In 2009, the ten operating Yukon placer mines produced 54,478 ounces of gold, up 3.4% from 52,709 ounces in 2008. The value of this production was US$42.4 million. The next largest source is Minto, which produced 29,000 ounces of gold in 2009.

So what?

Yukon is not just a "good" or "favorable" jurisdiction - it is one of the world's best. It has a very stable political climate, with a demonstrably pro-mining government. Other variables, like good roads and energy infrastructure, add to its positive attributes. And the place has a lot of room for exploration. The prospects are wide open.

The big question is: who will have the next big gold discovery? There are many candidates, including two companies in our Casey’s International Speculator portfolio that are poised to gain big. Discover the editors’ secret of separating the wheat from the chaff, in our FREE report “The 8 Ps of Resource Stock Evaluation.” Click here to read it now.

© 2010 Copyright Casey Research - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules