By Katharine Sandiford -- For 100 years, prospectors have searched for but never found the beast that produced the Klondike’s placer gold. But a discovery upstream from the golden creeks has ignited a staking rush and could help one prospector strike it rich.

In the mostly treeless, low-profile hills around the confluence of the Yukon and White Rivers, a flurry of helicopters, drill rigs, earth-moving machines, canvas-tent camps and ATCO trailers is settling on the ground. In a place that, not long ago, was mostly left to the moose and the moose hunters – and a few placer miners – hundreds of people are now scurrying around with tools, backpacks and satellite phones. At least 29 junior mining companies have recently flooded the area, staking 7,900 claims within a 65-kilometre radius.

In the far distance, at the edge of the activity, Shawn Ryan hikes up a ridge. He looks just like many of the men who wandered these hills 100 years ago during the original Klondike gold rush, in his leather boots, thick denims, and backpack. But he’s a modern-day, Dawson-based prospector, and is largely responsible for the activity. For the last 12 years, he and his wife, Cathy Wood, and their crew have been “beating the bush,” he says, methodically collecting the evidence that may prove they’ve struck pay dirt. “For over 100 years, nobody’s seen the beast that produced all the Klondike gold rush placer,” says Ryan. “This here is our first visual on it. And if they open a mine, I’m cashed up for life.”

It’s been a crazy year for a gold play that is now intensely followed internationally. What started with Ryan’s small-scale prospecting really took off in 2007 when Underworld Resources bought his pitch and began some detailed drilling. Underworld’s 2008 and 2009 drilling programs came back with 3.92 grams per tonne across 38 metres – mining speak for a lot of gold. Other companies came storming in, staking what they could, as close as they could, to Underworld’s Golden Saddle property. Dubbed the White Gold district, many feel it’s the dawning of a new era of gold mining around Dawson City, as deposits are unearthed one-by-one. But there are sceptics, too, who chalk the hype up to Klondike romanticism or a classic mining pump-and-dump, where miners shamelessly promote a property and then cash out. The sceptics anticipate the play to fade in a couple of years, after day-traders have had their fill, the price of gold has dropped, and the companies have scattered. But however it plays out, one thing’s for sure: Right now, all eyes are back on the Klondike.

There’s a huge enigma behind the Yukon’s golden history: Nobody has ever found the source of all the nuggets placer miners found during the original gold rush in the late 1890s. Over 13 million ounces of placer nuggets have been recovered from Klondike streams and riverbeds over the last century, and it must come from an ore body upstream. But despite the best efforts of many a miner, nobody has found the motherlode.

Placer miners have worked the White Gold area over the years, too, panning and running gravel through sluice box hydraulics, some meeting with moderate success. In the last two decades, prospectors started poking around looking for signs there might be something deeper in the rock. In the late 1990s, after the claims of mining goliath Teck Cominco in the area lapsed, Ryan took an interest. With all of Teck’s exploration reports now public, Ryan accessed years of free, high-quality data. He pieced this information together with his own findings and the studies and maps provided to him by the territorial and federal geological surveys. “There was a pattern emerging,” says Ryan. “We could see something was going on.” With funding from the Yukon Mining Incentive Program and with counsel from Mike Burke and other geologists at the Yukon Geological Survey, Ryan continued his program of fieldwork for another decade. “We have stamina,” says Ryan. “We believed there had to be something out here.” He found some rock and soil samples that indicated gold deposits underfoot. He even followed an ancient account from one of famed-surveyor William Ogilvie’s 1890 journals that led him to a huge quartz vein that ran out of the mouth of the White River.

“Most people who come here, junior companies, have a two-year shelf-life,” says Ryan, “but we live here. We plug away. It took 12 years, but all you do is get better, get more information, get all the pieces to one big puzzle.” Ryan is tall, handsome, his face tanned a dark brown from the relentless sun of the Klondike summer. He wears tough workpants, a fleece jacket, a baseball cap, and sturdy hiking boots, appearing as comfortable in the bush as he would be in his own living room. He’s quick to smile, to joke around. “It’s kind of like sasquatch tracks,” he says, grinning. “We knew the beast was out here. But we finally found it.” Scouring the bush comes naturally to him. He moved North to pick morel mushrooms 15 years ago, and after a few years switched to the potentially lucrative career of prospecting.

Ryan optioned 16,900 hectares to Underworld in 2007 and, along with their geologists, continued to work on the property, trenching and sampling, eventually finding a gold belt at least nine kilometres long. “That’s when the big companies come in, plug away and start pumping in the millions,” he says.
Kaminak Gold, ATAC Resources, SMD Strategic Metals, Ashburton Resources and many others flooded the area as soon as Underworld’s drill results became public. Gold prices remained strong despite the global recession. Some, like Cariboo Rose Resources, were lucky in that they held claims in the district before the rush. To date, Underworld is the only company to drill, anticipating a total of 23,000 metres from over 100 holes by the end of its 2009 season. “We’ll have a first pass by early December,” says Rob McLeod, Underworld’s vice-president of exploration. “We’ll have a preliminary estimate as to how much gold is in the ground and what grade and if we have enough to build a mine.” His optimistic estimate gives five or six years before a mine is built, once challenges of energy and transportation are resolved. Energy, he says, is in short supply in the Yukon right now and gold mining requires lots of it. And although a labyrinth of exploration roads lead from Dawson to the district, significant road upgrades, plus a ferry crossing over the Stewart River, are all projected.
For the most part, though, McLeod says exploration has been seamless. “Coupled with good gold prices, continuity of the mineralization and some preliminary metallurgy shows we’re getting close to the economic threshold.” Underworld was one of the few companies able to raise funds during the market crash last fall, aiding its progress.

The White Gold discovery has been the most thrilling event in McLeod’s career. He and others in the company are giddy. “It’s pretty fun to be part of history,” he says. “We’re obviously quite a small company but now we’re speaking with pretty much every major mining company in the world about this discovery.” It’s due in part to the call of the Klondike, the chance they’ve hit the source of gold rush placer. “Really, it doesn’t matter,” he says of the geotechnical debate surrounding this. “The discovery is great whether or not it’s the source.”
But Lara Lewis, a geologist with the Yukon Geological Survey, thinks it does matter. The source of the Klondike’s gold has been a hot topic in the mining community since the gold rush began.

But she’s taking the scientific approach. “They don’t know exactly what this is yet,” she says, referring to Underworld’s discovery. “They know they’ve got veins but they don’t know how extensive it is. It’s going to take a lot of drilling before we can say.”

Sue Craig, a director at the Yukon Chamber of Mines and president of Northern Freegold Resources, loves the free marketing that Klondike history gives to the White Gold play. Northern Freegold’s property lies a few hundred kilometres from the new district, but both are in the Tintina mining belt, a 200-kilometre wide, 1,200-kilometre long arc extending from northern British Colombia to central Alaska. “Anywhere in the world you go, people know about the Klondike,” she says. “The whole play is great for the Yukon. The Underworld folks have drawn good results, drawing lots of people to the area, and a lot more attention to the Yukon.” The Chamber of Mines is busy accommodating these new companies, sharing information on regulations, suppliers and contractors, plus stories and advice. “You can tell all the people you want that the Yukon’s a great place to work,” she explains. “But now they are coming and seeing it for themselves. The word is out.”

The flurry of activity is also bringing a wave of concern about environmental damage. The land in this area has already been well worked over, but recent trenching and drilling – and the possibility of a mine – brings new urgency. Lewis Rifkind, mining coordinator at the Yukon Conservation Society, wishes regional land use planning were completed before the staking rush took off. With proper planning, he says, you wouldn’t see pell-mell road building and camp construction. “Hopefully the plan will be complete before they build a mine,” he says. “It can recommend where a road could go to minimize negative impact.” He’s sceptical much will come of it. “We’ve seen this before: areas that get heavily staked and worked over and nothing ever becomes of them. If they really did find the motherlode that provided all the placer gold in Dawson, well, good luck to them, but we’re going to see a lot of environmental damage in the meantime.”
There will be a slight pause in the activity this winter. After Underworld makes its latest drilling announcements, things should settle down. “The biggest problem we’re going to have is running out of summer,” says McLeod. “We could operate in the winter if we had water, but most of the creeks in the area freeze to the bottom in the winter.”

Shawn Ryan’s work on the property has also slowed since drilling began. In fact, he’s moved on. He and his newly expanded crew of nearly two dozen are already looking for the next big thing. “I come from Timmins, Ontario, where there are 25 mines in one area,” he says. “As a prospector, I assume there is more around here.” Convinced there are two or three more mega-deposits a few ridges and valleys over, Ryan trudges into the wilderness.

But with options in 60 to 70 per cent of the White Gold claims, he’s feeling confident his hard work will soon pay off. “The reality is this has proved that we have pretty well a billion dollars of ore on one claim,” he says. “If this turns into a deposit and I actually got a royalty, that’s big.”