Gold miners eye explorers on Canada's Yukon trail

Wed Nov 16, 2011 1:12pm EST
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By Bhaswati Mukhopadhyay

(Reuters) - As winter draws in across Canada's northern Yukon territory, big mining companies are prospecting for bargains among the army of junior explorers staking claims in what's shaping up as the region's second big gold rush.

With other gold-producing parts of the world exhausting their reserves, the Yukon may have the potential to richly reward both prospectors and investors as fears of a lasting global financial crisis drive bullion prices higher and higher.

Sub-Arctic Yukon, which neighbors the northern U.S. state of Alaska and is almost the size of Spain, sits on some of the biggest gold-bearing zones in the world.

That has attracted exploration companies in a frenzy reminiscent of the Klondike Gold Rush of the 1890s, when thousands of prospectors flocked to the territory. Some experts reckon that recent discoveries have so far barely scratched the surface of the region's potential.

Bigger, cash-rich mining companies in turn are scouting for opportunities, particularly among smaller operators with exploration permits.

"There's a lot of interest up in the Yukon and a lot of money is being spent there," said Chuck Jeannes, chief executive of Goldcorp Inc, Canada's second-biggest gold miner by market value.

"There are interesting early-stage discoveries being made. Certainly, it's something we keep our eyes on."

The trigger that has rekindled wide interest in the Yukon is the White Gold project, acquired last year by Kinross Gold for $139 million. The former owner, Underworld Resources, had reported gold grades higher than anything found in the region in the past decade.   Continued...