Exploring Canada's north sets 'higher bar' for discovery – Yukon exploration CEO

➤ Exploration in remote areas demands aggressive drilling to quickly determine deposit quality before too much capital is invested.

➤ The junior exploration model, leaning on retail and institutional investors for funds, has "collapsed" but major miners are starting to focus more on exploration amid a decline in discovery rates and lackluster asset options in the market.

➤ First Nations consultations are increasingly important to advancing mining projects.

Snowline Gold CEO Scott Berdahl. Source: Scott Berdahl

Snowline Gold Corp. CEO Scott Berdahl has been at the center of investor and mining media attention since the discovery of a gold-rich deposit at the Rogue project in the Yukon that has fired up the company's stock price. Recent drilling of the Valley target at Rogue hit as much as 282.9 meters grading 2.3 grams per tonne of gold, which is an eye-catching intersection for the type of near-surface deposit Snowline is hoping to develop.

S&P Global Commodity Insights spoke with Berdahl about what it takes to explore in remote areas of the North, get permits for mines in Canada and reverse declining discovery rates in the exploration sector. This transcript was edited for clarity and length.

How do you manage two key challenges in exploring Canada's north, a remote region lacking infrastructure and a place where exploration work usually requires consultation with First Nations?

It certainly sets the bar higher for the kind of deposit you need to find. This is always at the forefront of our minds exploring up here. But the remoteness also allows us to walk into a place like this and find opportunities like Valley. We have the higher bar in mind as we explore these targets, and it's part of the reason we've drilled Valley aggressively right away. It's important to find out if something is big, quickly, or to determine if it isn't big, quickly.

On social license, we have been working with First Nations where we can, basically trying to build as strong a relationship as possible. It's too early for an impact benefits agreement, but we have partnered with a development corporation on a few initiatives. We just put in a 27-kW solar array that powers the majority of our fly-in exploration camp that we lease from the Na-Cho Nyäk Dun First Nation development corporation. We'll share our data with them, and they're hoping that with positive results they'll be able to duplicate this and start leasing solar systems to multiple companies on multiple projects.

Has early engagement with First Nations become more important in recent decades?

Yes, certainly this has become a much more critical piece of the puzzle over the past 20 years. We've seen Canada and [some provinces] advance policies related to the United Nations Declaration on the Rights of Indigenous Peoples, which shows just how important engagement and communication are in developing projects. We've also been in the Yukon a long time. I was born and raised here and it's important to do things the right way, regardless of current sentiments and trends.

As governments and other stakeholders weigh the costs and benefits of mines, taking into account economic, social and environmental impacts, has it become more challenging to permit mines up north?

I think it has. Even looking at the mines that came online recently in Canada, not just in the Yukon, I don't know that you could permit new ones on a similar timescale. In cases, that's rightfully so. You do see a lot of mines that are permitted, even in recent memory, that have not been bonded properly or shut down properly. Most companies are trying to do things right. But there are mining projects, due to negligence, or just unfortunate circumstances, or companies not having their head in the right place, that people can point to and say, "This is a disaster." That's really unfortunate. The increase in permitting difficulty is partly related to that. That said, the Yukon is still a very attractive place in terms of being able to get a project over the permitting line.

Diesel has typically been used to run camp power at remote exploration sites up north. Can you tell me about your experience shifting to solar?

The economics of it actually makes sense for us in terms of lease payments, stacking up against what we'd pay for landed diesel on-site [flown in by helicopter]. And then there's some nice externalities, like trying to reduce our carbon footprint. And a nice secondary benefit, which we didn't necessarily anticipate, is not having to run a noisy diesel generator. You're out in this beautiful setting and it's just quiet. People actually said, half-joking, that once the solar array went online they had to be very careful about what they said in their tents because suddenly everyone can hear what they're saying.

Looking at broader exploration trends, how do you see industry reversing a multidecade decline in discovery rates for many metals?

Over the long term, I think that trend is going to continue. The Valleys of the world, where you can just walk up and find something sticking out of the ground, are becoming fewer and fewer. But in the shorter term, the declining trend comes down to underinvestment in junior exploration. And I think the junior exploration model has kind of collapsed since 2013. It's not really operating the same way that it did in the 1990s and early 2000s, when there was more investor excitement and discoveries driving junior exploration. And I think we're seeing a trend where major miners are starting to pick up the exploration yoke again, realizing the exploration market that used to feed them is kind of dead. Majors are recognizing they do have to invest in juniors if they want the ecosystem to continue. If good teams were given the chance to explore with good resources, I think we would be seeing some slackening in that decline.

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