Dec '06/Jan '07


Yukon mining development and exploration overview

By Mike Burke and Steve Traynor, Yukon Geological Survey

Exploration expenditures in Yukon are estimated at $75 million making this the fourth consecutive year that exploration activity in the territory has increased. Mine development at Sherwood Copper’s Minto copper-gold-silver mine began in 2006, with production from the deposit scheduled for the second quarter of 2007. Mine development expenditures by Sherwood Copper are estimated to be in the range of $50 million by year’s end. Several other projects are conducting feasibility or pre-feasibility studies. Exploration directed at a wide range of base metals, precious metals, uranium, coal, and coloured gemstones was undertaken this past exploration season. Placer gold mining has continued to be a steady contributor to the Yukon economy, with production levels expected to be similar to the 70,322 crude ounces that were produced in 2005.

Numerous projects in Yukon were in the advanced stage, each with expenditures of well over one million dollars. The largest exploration program is on the Selwyn zinc-lead project of Pacifica Resources where 10 diamond drills were operating on the project, producing over 40 kilometres of drill core that has intersected significant additional mineralization in the known deposit areas, and has led to the discovery of six new mineralized zones. Drilling has focused on near surface targets that can be exploited by open pit mining methods, and at deeper high-grade targets as demonstrated by the 31.47% Zn + Pb over a 3.90 metre intersection in hole XYC-141. The large amount of data that is being generated will be used to expand the National Instrument 43-101- compliant indicated resource of 33.5 million tonnes of 5.5% zinc, 2.1% lead, and an inferred resource of 112.9 million tonnes of 5.4% zinc and 2.1% lead.

The Minto copper-gold-silver mine hosts a NI 43- 101-compliant measured and indicated resource of 9.06 million tonnes @ 1.78% copper, 0.62 g/t gold, and 7.3 g/t silver. Exploration in the vicinity of the Minto deposit has resulted in the discovery of a significant new area of mineralization that will substantially increase the current mine life. The new zone is interpreted to be an extension of the existing deposit, which is incised by a creek valley.

The Carmacks copper deposit of Western Copper Corporation is being drilled to provide data to update a previous feasibility study with a non-NI 43- 101-compliant resource of 13.3 million tonnes grading 0.97% copper, and in support of ongoing permitting and a development decision which is expected by the second quarter of 2007.Carmacks bears many similarities to the Minto copper deposit. Western Copper is doing the feasibility on the upper oxidized portion of the deposit while conducting additional exploration for additional oxide and sulphide resources on the property.

Alexco Resource Corporation was selected in 2005 as the preferred purchaser of the Keno Hill sil- ver-lead-zinc properties, which have produced over 200 million ounces of silver historically. Alexco has been methodically compiling and digitizing a huge amount of archived data that exists for the silver district, using the new database and 3D modelling as an aid to ongoing exploration.

Initial results from the Silver King Mine confirmed the high-grade nature of the Keno Hill deposits and their potential to extend to depth, as demonstrated by hole K06-009 which intersected 1.04 metres grading 2,470 g/t Ag (72 opt Ag) and 24.1 g/t Au at a depth of 130 metres.

The past producing Ketza River gold mine continued to be explored year round by YGC Resources who are expanding the known sulphide resources on the property with approximately 30 kilometres of drilling in 2006. Historically, the property produced approximately 100,000 ounces of gold in the late 1980s from oxide resources. Current exploration has been directed towards sulphide replacement deposits on the property, which host a NI 43-101- compliant resource in the measured category of 1,410,000 tonnes @ 3.54 g/t gold, indicated 7,130,000 tonnes @ 2.60 g/t gold, and inferred 14,580,000 tonnes @ 2.25 g/t gold. The Ketza project is on schedule to produce a pre-feasibility study for late 2006.

The Skukum Creek gold-silver deposit of Tagish Lake Gold Corp is being explored year round from underground access into the deposit. The current exploration work continues to produce results that will add to the current NI 43-101-compliant resource of measured plus indicated: 1,120,000 tonnes grading 8.0 g/t gold and 153.1 g/t silver (using a 5g/t Au) plus an inferred resource of 370,000 tonnes grading 8.56 g/t gold and 54 g/t silver. In addition to the exploration, metallurgical testwork has resulted in a significant increase in silver recoveries from 50 to 70 per cent with potential to further increase these recoveries.

Tagish Lake is nearing the completion of their feasibility study with a production target of mid-2008.

The Red Mountain molybdenum project of Tintina Mines has a historical resource calculated by Amoco Canada of 187.3 million tonnes @ 0.167% MoS2,which equates to 0.10% Mo.Tintina Mines conducted environmental studies, geological work, diamond drilling, and road maintenance on the project, in support of their pre-feasibility study.

North American Tungsten conducted extensive environmental baseline studies in support of mine permit applications at the MacTung deposit. MacTung hosts a historical resource in all categories of 30 million tonnes grading 0.94% WO3.

At least 40 other projects in Yukon were subjected to diamond drilling. A complete exploration summary will be available in the new year on the Yukon Geological Survey website . The website provides access to Yukon publications, geological data and spatial data available through the Map Gallery interactive map server.

The prospecting community and grassroots exploration programs continued to be strong with support from the Yukon Mining Incentives Program. The overall increase in mine development and all phases of mineral exploration bodes well for the future of the Yukon mining industry.

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