Jay Armitage Photography
Case Study #5: Keno Hill Silver District
Keno Hill Silver District is in central Yukon. The district once had 42 mines all in production at the same time. The town of Mayo, 400 km northeast of Whitehorse, had its beginnings during this mining boom. Right up to the 1950s sternwheelers travelled up the Stewart River to Mayo to load the ore Ore: the naturally-occurring material (rock) from which minerals are extracted through breaking down and processing. extracted from Keno Hill.
The last of the Keno Hill mines shut down in 1989. The government of Canada declared them abandoned and put the district’s assets up for sale in 2005. In December 2007, with the approval of the Yukon government, all the assets were sold to Alexco Resources CorporationCorporation: the most common form of business organization. It pursues set objectives and is empowered with legal rights usually only reserved for individuals, such as to sue and be sued, own property, hire employees, or loan and borrow money.. It is a mining juniorJunior Company: a mining company that has no mining operations. It must rely almost entirely on the capitalCapital: cash, property, equipment, services, and contracts or leases. markets to finance its exploration activities. that specializes in exploring for silver and other precious metalsMetals: one of more than a 100 basic earth elements, grouped under minerals. Includes iron, lead, zinc, and copper. and reclamation. The purchase transferred to Alexco ownership of 14,980 hectares (about 35 by 16 km) of mining leases, quartz claims, and crownCrown: the Crown refers to the sovereign or to the power and authority of the monarchy. In Canada, the powers and authority of the sovereign have been delegated to the Governor General of Canada. grants. The area includes 35 historic mines (with silver now estimated to exceed 1 million tonnes). Acid drainageAcid Drainage: water pollution that results when sulphur-bearing minerals associated with coal are exposed to air and water and form sulphuric acid and ferrous sulphate. The ferrous sulphate can further react to form ferric hydroxide (“yellowboy”), a yellow-orange iron precipitate found in streams and rivers polluted by acid mine drainage. from the mines has created a serious environmental hazard. A condition of the sale was that Alexco clean up the area.
The purchase also won Alexco the right to explore the properties for possible future production. An assessment in July 2008 indicated that one deposit in the district, Bellekeno East, might be particularly rich. The assessment projected for Bellekeno an average annual production over five years of 3.3 million ounces of silver, 30.1 million pounds of lead, and 24.5 million pounds of zinc.1
Bellekeno lies within the traditional territory of the First Nation of NaCho Nyäk Dun (NND), population 472 and close to Keno City, which has a largely non-Aboriginal population of 18. (The mine is not located within NND’s 1830 square miles of settlement lands, however.) Most NND members live in Mayo.
In 2007 and 2008, Alexco and NND entered into a number of agreements concerning Bellekeno as well as Alexco’s other activities in Keno Hill. In 2009 Alexco concluded a silver purchase agreement with Silver Wheaton Corporation. The money from that agreement enabled Alexco to start advanced explorationAdvanced Exploration: excavating an exploration shaft or other entry way; construction of an access road to the mine site; diversion or damming of a watercourse to permit bulk samplingBulk Sampling: taking samples in arbitrary, irregular units rather than discrete units of uniform size for analysis.; or other types of work that usually occur once significant mineralization is discovered. and bulk samplingBulk Sampling: taking samples in arbitrary, irregular units rather than discrete units of uniform size for analysis. at Bellekeno. If these results confirm Bellekeno’s viability, and if the mine gets the necessary approvals and permitsPermits: legally-binding permissions that govern activities that may occur during exploration or mine operation, like quarrying, use or impact on water, building of transmission lines, etc., Alexco expects to start production there in 2010. The mine will have a life of approximately five years.
In 2007 and 2008, Alexco and NND entered into a number of agreements concerning Bellekeno as well as Alexco’s other activities in Keno Hill. In 2009 Alexco concluded a silver purchase agreement with Silver Wheaton Corporation. The money from that agreement enabled Alexco to start advanced exploration and bulk sampling at Bellekeno. If these results confirm Bellekeno’s viability, and if the mine gets the necessary approvals and permits, Alexco expects to start production there in 2010. The mine will have a life of approximately five years.