A Glimpse at the Whitehorse Copperbelt: A Compilation

https://janegaffin.files.wordpress.com/2014/10/whitehorse-copperbelters.pdf

by Jane Gaffin

The Whitehorse Copperbelt and the companies that explored and mined the 17- to 18-mile-long crescent-shaped strip of ground west of the Yukon’s capital city have been noted for several unique features over the years.

First, Yukoners can claim fame to the existence of a rare mineral identified as valleriite, or vallerite, in their own backyard. The occurrence of the brassy-coloured sulphide mineral of iron and copper is so unusual as to be found only in about seven locations in the world. One of those places is the Whitehorse Copperbelt.

While locals can boast of the copperbelt hosting an anomalous mineral, it actually was not a welcome sight for metallurgists. Valleriite, graphitic in texture, played hell with ore-treatment techniques used in the milling process until the minor mineral mysteriously dissipated in the ore mined at depth.

Additionally, Whitehorse Copper Mines, a marginally-profitable company reconstituted from New Imperial Mines in 1972, had to be a trend-setter in its approach to keeping the purchase and maintenance costs of heavy underground machinery to a minimum.

The company, operating close to the bone on three-year ore reserves, instituted innovative applications for tackling cost problems while simultaneously looking at future diversification and expansion plans in an effort to keep 200 employees working when sufficient blocks of mineable ore reserves were depleted.

As mechanical parts became more scarce, and the waiting time for delivery of mine machinery lengthened, the adroit Whitehorse Copper employees put their minds together to instigate imaginative master plans.

General Manager Vic Jutronich liked to brag up his happy workforce rowing in the same direction as well as bringing special attention to a newfangled contraption created at the property. The hydrastatic Clark Mobile, an underground service vehicle, was a legacy of Clark Van Steinburg, the mechanical shop superintendent who invented and designed the brainchild.

Van Steinburg staunchly believed heavy equipment should never break down or wear out if well-maintained. He bought traded-in machinery, worked hard for more than 10,000 hours, that most other industrial complexes would shun as fatigued junk.

Not Van Steinburg, a mechanical wizard. Sharing his sentiments was a long-term steady staff of 26 mechanics, welders and machinists, like Jack Monet and John Millar, shop foreman Roy Watson, and drill doctors Jim Graham and Ray Osborne. They viewed the “worthless junk” as prizes.

The crew salvaged parts and pieces and built and rebuilt their own workhorses. On-site equipment designing and construction proved itself to be low-maintenance cost and outlasted some factory-built equipment.

Jim Graham, in charge of the drill shop where underground drills and pumps were repaired, and machinist Jack Monet put on their thinking caps and conjured up a money-saving suggestion that rewarded them with $1,700 each through the Suggestion Awards incentive program for an ingenious rock- breaker proposal.

The modifications saved the company $34,000 a year. The appreciative and economically-minded company granted 10 percent of what was saved within a calendar year to the employees who came up with the cost-saver.

If the employee’s idea went one step further and made money for the company, then the inventor received a certain percentage of those earnings. A money-reward system was a strong incentive for guys to keep their minds open and pencils sharp.

After rebuilding such mechanisms as diesel engines, power-shift transmissions and differentials, the mine could operate machinery such as 5-yard, front-end loader Scooptrams almost continuously without maintenance worries.

Van Steinburg and his converted-minded staff, in their contention that there’s a way to build heavy-equipment machinery that doesn’t break down, went about tenaciously fulfilling Van Steinburg’s theory in the completely-equipped, 15,000-square-foot workshop.

In the event that Whitehorse Copper exhausted known ore reserves within three years, manager Jutronich contended there was no reason for the Whitehorse Copper facility to crumble and perish. He promoted the structure as solidly established to shift gears and transform into a mine-related business. (He also promoted seeding the rich, mineral-laced tailings ponds for conversion into a community golf course.)

His far-reaching strategy was for the company to stay in business and keep jobs in the Yukon by concentrating on building and repairing mining equipment for other companies and farming out five-star underground miners to work in other locales.

For instance, engines could be rebuilt for Cantung (Canada Tungsten) on the Yukon-Northwest Territories border. It would preclude the inconvenience of the mine wasting extra time and expense sending key overhaul jobs to major cities. Those jobs could stay in the Yukon. He had a crackerjack staff capable of undertaking those specialty tasks.

And, for sure, Whitehorse Copper could contract out experienced crews to other underground operations. If Whitehorse Copper owner Hudson Bay Mining had a job at its MacMillan Pass Mactung (tungsten) deposit that would, for instance, cost $2 million, Whitehorse Copper’s personnel could be contracted for half the price, a proposal that maybe jolted Jutronich’s Hudson Bay boss.

Unless new reserves were found, though, ore reserves outlined to last Whitehorse Copper roughly three years were finite. That indisputable fact meant the mine would come to a screeching halt. The manager knew it and the 200 employees knew it. But did anybody else know it? Or care?

In view of the looming dilemma, Jutronich reflected on what the company should do. Just shut up shop and sell assets and pay shareholders back? Or diversify and expand? Jutronich knew what he wanted to do but he didn’t have the sympathetic ear of immediate superiors who may have rejected his ingenious ideas as borderline lunatic fringe.

Yet, at the relevant time, Bobo LaRocque, a veteran underground miner, was teaching underground mining classes for the Yukon government’s Vocational and Technical Training School at a replica site tunneled into rock on nearby Grey Mountain that tapered off into low hills like a plucked eyebrow. Over half the total 252 graduates trained by the jovial Frenchman became experienced miners employed throughout the Yukon and Canada.

Another unexpected phenomenon happened in 1976. The 1971 Mining Safety Ordinance for the Yukon that stated no female could work underground was amended by the Yukon Legislative Assembly. It was proclaimed as law by Commissioner James Smith to allow women to work underground in the territory.

None of the Yukon’s three underground mines of the day — United Keno Hill Mines at Elsa; Carmacks Coal, owned by Cyprus Anvil Mining for producing fuel for the drying of lead-zinc concentrates at Faro; and Whitehorse Copper Mines — anticipated a flood of female applicants for the hard-labor jobs.

Whitehorse Copper Mines, seven road miles south of town, had one enthusiast, mine expeditor Trudy Vanderburg. The woman who actually broke ground as the Yukon’s first — and only — female underground miner was Janeane MacGillivray.

The Yukon’s Mining Safety Ordinance was designed to protect women and children from unfair working conditions existing in mining operations. Since politicians felt those conditions no longer existed in the Yukon, the bill was passed to show no discrimination in the practice of hiring male and female personnel in the mines.

The original bill was based on an age-old superstition that had prevented women from even visiting an underground site based on miners’ beliefs they would bring a cave-in, fire, ore depletion or other calamity to the tunnel.

A Glimpse at the Whitehorse Copperbelt is a compilation of historic materials, newspaper articles, personal interviews and photographs covering a period from 1898, when the copper mines were discovered, to 1982 when Whitehorse Copper Mines closed due to inevitable ore exhaustion.

The 350-page document mentions 33 old Crown Grants. Important mining claims like the Pueblo are detailed and their owners profiled.

From William P. Grainger and John McIntyre, who met tragic deaths, the historical account moves on with the invaluable help of copperbelt aficionado Dick McKenna to more pioneers such as James Whitney, Katherine Ryan, H.E. Porter, Tommy Kerruish, Robert Lowe, Sam McGee, and Captain John Irving.

One major historic copperbelt event was the tragic Pueblo cave-in on March 21, 1917. Of the nine miners trapped, only three were rescued.

Well-known underground miner, Ed Andre, and his colleagues paid tribute to the permanently entombed men by listing their names on a bronze plaque they anchored to a granite boulder at the minesite. On September 18, 2001, 84 years after the fact, they staged a ceremony that finally gave the miners a dignified burial service.

In the long term, the Little Chief deposit proved to be the jewel in the copperbelt’s Crown where mining was forced to go underground into the deep ore.

Whitehorse Copper Mines’ predecessor, New Imperial Mines, had used the open-pit method to excavated its series of mines. General Manager Ross Kenway and Chief Geologist Bob Hilker presented their glowing reports to an annual meeting of the Canadian Institute of Mining and Metallurgy in Vancouver, April, 1968. Kenway discussed large-scale mining of small open pits in the Yukon while Hilker stuck to outlining the geology of the Little Chief ore deposit.

During New Imperial’s tenure on the copperbelt, Armand Arsenault provided much of the extensive diamond drilling contracts.

When New Imperial morphed into Whitehorse Copper, Tony Caron of E.Caron Diamond Drilling was the prominent fixture on the belt where Andy Hureau served as the long-term exploration geologist and Dave Tenney as chief geologist. Both were “carry overs” from New Imperial days.

Whitehorse Copperbelters Part VIII portrays personality sketches of Pete Versluce, Harry Versluce and Chuck Gibbons, the prospectors who optioned the Little Chief and other claims to the mining companies; Paul White, a land surveyor who helped locate some old turn-of-the-century Crown Grant staking posts for New Imperial brass; Bob Hilker, New Imperial’s chief geologist; Dave Tenney, Whitehorse Copper’s chief geologist; Andy Hureau, Whitehorse Copper’s exploration geologist; and veteran underground miners Erich Stoll and Ed Andre, author of Heroes of Darkness, a little book commemorating underground miners.

And, of course, the picture wouldn’t be complete without showing off the governments’ true colours. The muscle-flexing city diligently counter-opposed the miners by appealing to the feds to declare a staking moratorium. Ultimately, the territorial government persecuted and the city prosecuted prospector Rob Hamel over his copperbelt War Eagle property, nicknamed the “dump claims”.

And, then, came the upbeat reunion of more than 200 nostalgists who reunited in the summer of 1995 to bid their final adieus to what most attendees heralded as “the best place I ever worked; if Whitehorse Copper were still going, I’d probably still be working there”.

See the whole miscellany of stories at Whitehorse Copperbelters.

 

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Mining Study Cuts to the Core

by Jane Gaffin

This article, a relic dredged from the scrapbooks in March, 2013, focuses on the late Jim McFaull and his invaluable report on mining law, land issues and property rights; it was originally published in the Yukon News, March 20, 2000, prior to the April 1, 2003 devolution date transferring authority of the quartz mining, placer mining and other land acts from the federal government to the Yukon territorial government. McFaull’s unabridged report can be viewed at: https://janegaffin.files.wordpress.com/2013/02/jims-report-pdf.pdf

“When you push somebody far enough, they will stand up and fight. If they don’t fight for their rights, then they are done for. They are slaves.”
– Jim McFaull (1952 to 2012) –

*******

Private property ownership is the cornerstone of any free society. The land issues the late Jim McFaull held insightfully under study and discussion for many years help serve as more examples of how the United Nations’ Agenda 21 is working stealthily under the radar in tandem with federal, provincial, state and community governments to transfer all privately-owned property into public domain that will ultimately be placed under control of a one-world government. Ironically, McFaull faced much opposition from his mining colleagues who don’t know or care that they have rights and are not going to fight for them. They just want to work under a “fashionable” Agenda 21 phrase:”Go along to get along”. JG

*******

A blizzard of conflicting legislation and regulations blanketing this territory has eroded the miner’s rights to enter, locate, prospect and mine a claim, says a study released on February 28, 2000.

Report on the Yukon Quartz Mining Act and its Regulatory Regime’s Impact on the Free Entry System of Mining Law delivers what the title promises. Author Jim McFaull has tackled the complex legal issue head-on. But the 50-page document is far from dry stuff.

McFaull is an accomplished writer and communicator. He has stitched the story together with simple language and an easy style so the layman can comprehend the text.

A miner is granted certain rights to enter Crown land for the purpose of locating mining claims. This allows him to seize title to the land on which he is authorized to prospect and mine.

When the miner stakes his claims he goes to the appropriate federal mining recorder office in Whitehorse, Mayo, Dawson City or Watson Lake to file an Application for Claim.

The federal government is the only agency with authority to issue the miner a Grant of Title. Mineral rights belong to Her Majesty, the Queen, until the ground is staked as mineral claims.

At that point, mineral titles are divested from the Crown and vested to the miner.

The miner–or the beneficiaries to whom claims can be bequeathed–retain the title in perpetuity, as long as the claims are in good standing.

Claims lapse only if the required assessment work is not filed or payment in lieu of assessment is not made by a specified date. The only time the title to the property reverts back to the Crown is when a claim lapses.

This process was designed for a definite purpose. The Crown wants to provide incentives to the private sector–or free miner–to locate mineral claims that can be developed into a profitable mine.

Without personal incentives, free men won’t mine. The Queen is not going to dirty her hands digging a hole.

Therefore, the Crown would be forced to use soldiers, criminal convicts or slaves to extract the wealth from the ground, as did the kings of Babylon and the pharaohs of Egypt during the first great civilizations.

The Soviets and Nazis killed over 30 million slaves who labored in European and Siberian mining operations during the last century.

Yet the Canadian government has chosen to introduce a revocable licensing system that is a disincentive to free miners of the Yukon.

The system parallels one implemented in Australia that sparked the Ballarat Rebellion of 1854. The Australian miners were at the mercy of the corrupt constabulary who did the inspections. Bribery, extortion and even the murder of miners became commonplace.

Since no legal rights were attached to the license or claims, the disgruntled miners demanded the Crown implement a form of claim ownership that would grant them rights and legal security.

The British government abolished the miner’s license and created the Victoria Mining Act of 1855 that granted miners hard rights.

“This was the first modern free-entry law in the British Empire,” writes McFaull.

Parliament replaced the hated miner’s license with a legally secure tenure for the mining claim as a form of property.

In 1924, the venerable Dawson City lawyer George Black was elected member of Parliament of Canada specifically to rewrite the quartz mining act. See
http://www.yukonprospectors.ca/Black,%20George.pdf

“It contained such strong legal security of tenure that there were virtually no further problems with bureaucratic interference with claims until the 1990s,” advises McFaull.

Until recently, the act held the honors as the least-amended mining legislation in Canada because Yukoners insisted on a statute rather than regulations.

Now the free-entry system of mining law in the Yukon appears to have undergone an almost total overthrow.

In spite of the guarantees entrenched in the Yukon Quartz Mining Act, as well as the Yukon Placer Mining Act, exploration work is now being prohibited.

Licenses are being withheld; access to land denied; claims refused granting or renewal on arbitrary bureaucratic authority.

Even producing mines have been driven out of business or are under threat of shutdown as a result of punitive regulation.

McFaull would relish a judicial review to determine the legality of overthrowing the free-entry system in this fashion.

Can a public servant legally refuse a miner his rights?

Some of the actions under question are interference with vested rights; violation of the principles of legality; and regulatory taking of real property without compensation.

The regulations have been enacted so the miner is “prohibited” from mining without a license. And a miner can be charged with severe legal penalties that include fines up to $100,000 a day.

“This flies in the face of the fact that the miner is still in possession of his original statutory free-entry miner’s rights,” challenges McFaull.

What happened to the rights that authorize the miner to enter, locate, prospect and mine on a freehold estate in fee simple with legal security of tenure?

How can the miner’s rights of free entry–which are supposed to be near absolute, irrevocable and protected by law–be withheld by the use of a revocable license? he wonders.

In a detailed section headed “The Lease v Licence Questions”, he explains why the two systems are not compatible much less interchangeable.

The subject of property law evolves into Mining Leases as “Chattel Interests”, The Claim as a Freehold Estate and Title to the Claim. He provides detailed accounts about how the miners’ rights have been affected by such contradictory federal legislation as the Territorial Land Act, Yukon Waters Act, Mining Land-Use Regulations and the proposed Development Assessment Process.

He also examines prohibition of Entry by Order-in-Council, Surface Rights Leases, Devolution and Yukon Protected Areas Strategy, which is a territorial initiative.

“The consequences of this attack on the free-entry system in the Yukon have been severe, and are likely to worsen,” he warns.

The mining industry has suffered a catastrophic collapse in the last five years with major repercussions to the Yukon economy.

Just in the last 18 months, the population base has shrunk by over 10 percent. The exploration industry is down by 90 percent.

The only operating quartz mine is the one near Dawson City. The future of Brewery Creek gold mine is uncertain.

Kennecott Canada, the last corporate exploration office of a major mining company, closed its doors in early January (2000).

Furthermore, brokerage houses and the mining investment community worldwide have blacklisted this jurisdiction, writes McFaull, whose report urges discontinuation of the discretionary systems of revocable permits and licenses.

Economic survival hinges on the miner’s rights being reinstated under the free-entry system as exist in the Yukon Quartz Mining Act.

Otherwise, this place is doomed, offers McFaull, who earned a geology degree from the University of British Columbia in 1974.

The experienced exploration geologist discovered seven new mines that produced four million ounces of silver before United Keno Hill Mines closed in 1989. He is a Fellow of the Geological Association of Canada and a long-standing director and a past president of both the Yukon Chamber of Mines and the Yukon Prospectors’ Association.

*******
Jim McFaull, an exploration geologist and prospector, died suddenly on April 14, 2012 at age 59. One of his legacies is an archives of timeless, “I-told-you-so” interviews and articles dealing with mining laws and Canadian property rights which attest to his intellect and foresight.

Mystery of the Mother Lode

by Jane Gaffin

When this article about the late Jim McFaull was originally published in the Whitehorse Star on February 4, 2005, there were no hardrock mines in production and gold had just stumbled through the psychological barrier of $400.00 U.S. per ounce; when this historic relic was resurrected from the scrapbooks on March 7, 2013, there were at least three producing hardrock mines and gold was trading roughly at $1,577.00 U.S. per ounce.

The PDF version of McFaull’s short biography Geologist’s Life Full of Ups and Downs can be viewed at

https://janegaffin.files.wordpress.com/2013/02/jim-mcfaull.pdf

Jim McFaull’s Report titled The Yukon Quartz Mining Act and Its Regulatory Regime’s Impact on The Free Entry System of Mining Law can be found at

https://janegaffin.files.wordpress.com/2013/02/jims-report-pdf.pdf

*******

Usually, the best place to look for gold is where gold is known to be. The Yukon is such a place.

And local exploration geologist Jim McFaull’s unwavering faith in the remarkable noble metal was rewarded recently in the form of an option agreement with Vancouver-based Dasher Exploration Ltd.
(http://www.newworldresource.com/s/NewsReleases.asp?ReportID=111521&_Title=Dasher-to-Commence-Exploration-in-the-Klondike)

McFaull’s educated geological sleuthing may be the ticket to solving the riddle of where all Klondike gold originated.

The Whitehorse resident has always contended that gold will some day become an extremely valuable commodity. That is why he conducts all his independent work in gold properties.

He sees the world on the brink of serious financial difficulties and some currency collapses. Only those governments solidly backing their currencies with gold will come out winners.

Gold’s most attractive feature is its virtual indestructibility, which is more than can be said for paper money.

As well, the precious yellow metal is sought for increased usage in dentistry, medicine, jewellery, electronics, communication and the space industries. It’s been a long drought waiting for the tide to turn.

Now it’s the seller’s market again as the price of gold cleared the psychological $400 U.S. barrier. It wobbled between $410 U.S. to $450 U.S. per ounce over the past year and is expected to strengthen.

But the price hike is a double-edged sword. It carries economic ramifications. Gold is linked to inflation. When people lose confidence in the eroding value of paper money, they turn with trust to gold which is one factor driving up the price.

The negative side of the equation is offset with positives. The buoyancy bodes well for the sector of mineral explorers who work in gold. And exploration companies are looking North to satisfy their investment appetites with good gold projects, so they can raise capital on the stock market while the public is in an investing mood.

McFaull was in the right place at the right time doing the right thing. He may have hit the proverbial Mother Lode in more ways than one.

The recently-inked venture has great potential for a big pay off for a minimal amount of risk.

Dasher Exploration agreed to earn its interest in McFaull’s Hunker Creek property by paying him $300,000 in cash over a period of three years, stated a January 27 news release.

Additionally, the company must spend an aggregate of $3 million on the property and issue 700,000 common shares to McFaull.

The Dasher deal centers on the company acquiring a 100-percent interest in McFaull’s 20 quartz (hardrock) mineral claims located in the historic Klondike mining district near Dawson City. A confidentiality clause prevents either party from disclosing details for the moment about the geologist’s theory that he has discovered the original source for all Klondike gold.

Of the 13 million ounces of Yukon placer gold produced over the last 107 years, the majority came from Klondike workings. Up until now, hardrock prospecting in the Klondike mining district failed to locate the source.

Placer mining generally means extracting gold from creeks as opposed to quartz mining that requires drilling and blasting to remove metals from rock. McFaull, who has only worked the Hunker claims since July, 2002, has been investigating the gold source for about 20 years.

His geological, geophysical and geochemical bets are based on careful study. His theory supports a target model he developed while researching possible bedrock models for the source of Klondike gold, Dasher reported.

His curiosity dates back to the Dawson Lode project he initiated in 1986 and managed three years for United Keno Hill Explorations until 1989. https://janegaffin.files.wordpress.com/2013/02/jim-mcfaull.pdf

The objective was to find the source of Klondike placer gold on the 1,200 quartz claims staked by UKHM overtop Klondike placer workings. But he wasn’t given much chance to test his findings.

A slump in the metal market and the federal government’s cancellation of flow-through tax-incentive program put the hammer to his employer.

Like the captain of any ship, McFaull was last to bail. As acting exploration manager, he had the frustration of switching off the lights after everybody left the Black Street office in 1990.

During his 14-year tenure with UKHM, the talented young geologist set what must have been a record before celebrating his 35th birthday. Statistics indicate that only one in every 50,000 prospects makes a mine. He found seven; all went to production.

Collectively, the Galkeno Open Pit, new Silver King Underground, Ruby Offset, Hector 3 & 4 Vein Open Pit, Flame & Moth Open Pit, Black Cap Open Pit and Bellekeno Underground produced four million ounces of silver.

When the parent, Falconbridge Ltd. of Toronto, put its United Keno Hill Mines’ Elsa assets on the auction block, along with its Yukon exploration properties, including the Dawson Lode claims, McFaull went freelancing. (See Last One to Leave: Turn Off the Lights, Star, 10/1/04, this site or http://www.yukonprospectors.ca/pdf/Keno%2009.pdf)

In 1991, he researched and staked the Aurex claim block in the Mayo mining district. The Aurex claims abutted United Keno Hill Mines’ camp. Instead of the traditional UKHM silver, the Aurex geology favored gold.

Two years later and a whack of dollars shorter, McFaull dreaded the idea of having to market his wares in Vancouver, knocking on doors and talking to promoters–if he could get a foot inside the door.

Prospectors survive on serendipity.

While McFaull was looking for a financial angel, Yukon Revenue, a local company, was scouting for an investment property. They fortuitously crossed paths and cut a deal.

Yukon Revenue tied on 75 claims and carried out a large drill program. The work resulted in some good numbers. “It was exciting to see the visible gold coming from three holes,” McFaull enthused.

While others took care of the Aurex property, McFaull concentrated on other business. By the summer of 2002, he had zeroed in on Hunker Creek, where the tributary flows into the Klondike River, near the Dawson City airport.

Accessibility is a logistical cost-saving measure that further renders the property appealing.

After revisiting his concepts about finding the source of Klondike gold that had tugged at his imagination for years, McFaull had to find a company with financial ability to drill it.

Dasher Exploration was keen. It was an appropriate setting for the two parties to close their deal during the major annual Round-Up mining conference in Vancouver the end of January.

McFaull, who earned his BSc in geology from the University of British Columbia in 1974, is past-president and long-time active member of the Yukon Prospectors’ Association and the Yukon Chamber of Mines.

His invaluable research paper, titled “Report on the Yukon Quartz Mining Act and Its Regulatory Regime’s Impact on the Free Entry System of Mining Law”, was released in February, 2000.
https://janegaffin.files.wordpress.com/2013/02/jims-report-pdf.pdf

The 50-page document tackles the complex legal issues and discusses the disincentives the government posed when introducing a discretionary licencing system to mining. (See Mining Study Cuts to the Core on this site.)

His predictions about what would be the ultimate fate of the mining industry and the Yukon’s meal ticket have been proven correct in increments. Presently, there are no producing hardrock mines in the territory when a half a dozen should be operating full-tilt.

It was not accidental, but truly fitting, that he tagged his gold claims the “Last Chance”.

If he is on the trail to the source of the Klondike gold system, his foresight has a good chance to save the Yukon mining industry from collapse, single-handedly.

It has the potential to either spark a stampede or at least a staking flurry.

*******

Andrew James (Jim) McFaull was born in Regina, Saskatchewan on December 14, 1952 and died suddenly at the age of 59 in his home in Whitehorse, Yukon on April 14, 2012. A big farewell send-off was held at the High Country Inn on April 20, 2012.

Geologist’s Life Full of Ups and Downs

by Jane Gaffin

This article about the late Jim McFaull was originally published in The Yukon News, September 10, 1993; the PDF version is available at

https://janegaffin.files.wordpress.com/2013/02/jim-mcfaull.pdf

Jim McFaull’s Report titled The Yukon Quartz Mining Act and Its Regulatory Regime’s Impact on The Free Entry System of Mining Law can be found at

https://janegaffin.files.wordpress.com/2013/02/jims-report-pdf.pdf

********

When Jim McFaull was ready to graduate from a Winnipeg high school in 1970, he did not know what geology was. A friend explained that geology was running around in the bush, looking at rocks.

“That sounds interesting,” McFaull mused. “Maybe I’ll check it out.”

Before he celebrated his 35th birthday, he had set a record by finding a string of mines. All seven went into production.

The Galkeno Open Pit, new Silver King Underground, Ruby Offset, Hector 3 & 4 Vein Open Pit, Flame & Moth Open Pit, Black Cap Open Pit and Bellekeno Underground had produced four million ounces of silver when United Keno Hill Mines closed in 1989.

The young geologist’s accomplishment was a spectacular feat. Statistics indicate that only one in every 50,000 prospects makes a mine.

McFaull’s career started as a summer field student, working for mining companies in the British Columbia bush.

The summer of his graduation from the University of British Columbia in 1974, Amoco Canada’s mineral division sent him into northeastern Yukon to look for zinc. To reach the Bonnet Plume, the crew went through Mayo.

Trans North’s Beaver aircraft flew up the McQuesten Valley. The pilot pointed out United Keno Hill Mines’ Elsa operation.

McFaull looked out the window in disbelief. “Who in their right mind would ever want to live there?”

The next year he was hired by the company in Whitehorse. Three years from his first flight over Elsa, he joined the 350 residents in the remote mining community.

The junior geologist found his first mine, the Galkeno Open Pit, a vein-type silver deposit on Galena Hill’s northeast slope that faces Keno City.

After two-and-a-half years of bunkhouse living, he needed some freedom and fresh air.

He and three friends formed Aurex prospecting syndicate. The 1980 adventure took them 70 kilometres northeast of Keno Hill into the Patterson Range. When rain turned to snow, they were forced to come out of the bush.

United Keno asked McFaull to take a job as underground mine geologist at Venus, an historic gold-silver property near Carcross. By the time it was ready for production a year later, the precious-metal market crashed.

McFaull went back to the field to do follow-up prospecting around the company’s DEF Minto property, northwest of Carmacks. It was supposed to be the Yukon’s next mine. It too had to be shelved as mineral inventory.

The whole industry collapsed in 1982. Yukon mines and the railroad closed; and McFaull and a lot of other people lost their homes.

To survive, he drove a scoop tram for an underground placer mine in the Sixtymile country near Dawson.

By early 1983, the Elsa mines reopened. McFaull returned as senior geologist in charge of the exploration department.

During that three-and-a-half-year stint, six of the many targets he pinpointed, prospected and drilled went into production.

Then silver prices continued to drop and taxes kept increasing.

UKHM’s president, directors and employees took a 25-per-cent reduction in income so the mine could continue to operate.

When silver prices took another drastic dip by 1986, wages were tied in with the fluctuation. By the summer of 1989, UKHM workers were back on full salary for nine months. But their pay was based on the 1986 scale.

At least the company had some good budgets to work with, McFaull noted. “We got a lot of work done and had a fair bit of success due to the flow-through share program.”

Then he transferred to the Whitehorse office to manage the Dawson Lode Project.

The objective was to find the source of Klondike placer gold on the 1,200 quartz claims. “We didn’t have too much luck.”

McFaull was the acting exploration manager when the big shock came in the spring of 1990.

Federal Finance Minister Michael Wilson had cancelled the flow-through program. It was a tax-deduction incentive for exploration companies to find and develop mineral properties. Then silver prices dropped below the profitable $8 U.S. per ounce mark. And Falconbridge sold its UKHM assets.

“We all lost our jobs. Again. For the last time.”

For years, McFaull had been groomed for his managerial role. It turned out to be tougher than he imagined. He had the frustration of having to switch off the lights after everybody else was gone.

“Since then I have been freelancing. I haven’t had a full-tilt paycheque since 1981 when I worked at Venus. It’s been a long drought,” he said.

“United Keno is a good property. There’s probably a 100 million ounces of silver in there. That’s half a billion dollars at today’s silver price. Somebody will mine it, eventually. That property is a long way from abandoned.

“I think the world is looking at some serious financial difficulties. There are going to be some currency collapses very shortly.

“I think precious metals will go up. It’s just a matter of when. We can only keep propping up the Canadian dollar so long until the time comes when it can’t be done any more.

“At that point there has to be a day of reckoning. I think gold is going to become an extremely valuable commodity, which is why I am doing all the work I can in gold property.”

One of his projects started in 1991. He had returned from Russia, where he had looked at geology and career opportunities. Then he dug into his Riverdale home for what looked to be a long, harsh Yukon winter.

He meticulously researched an old silver property, formulated a geological theory and confidently gambled on his hunch. While the ground was still blanketed with four feet of April snow, he hired a crew to stake 75 claims.

“That was a real gamble. I had never set foot on the place. It cost a lot of money to have it staked.”

Although the Aurex claim block is adjacent to UKHM’s camp, the geology is favorable for gold rather than for silver veins.

When the snow melted in early June, McFaull and his malemute companion, Tasha, went prospecting.

The tiny white specks on the air photos were actually old bulldozer trenches, he said. They had been dug by the previous owner, a cantankerous oldtimer who had died about 1988.

Jack Hawthorne’s heirs had let the 50-year-old claims lapse about six months before Aurex staked them.

“For Hawthorne to hold them that long has to tell you something.”

While cracking rust-stained rocks, the distinctive odor of sulphur and arsenic was puffing up like clouds, he said.

“It was just the type mineralization I was looking for. But there is no outcrop. I would have been doomed if it hadn’t been for Hawthorne digging those holes in the first place.”

McFaull hurried into Whitehorse with a few sackfuls of rock samples. The laboratory assays showed good gold results. Then he hurried back to the property and worked until snowfall.

“At that point I got depressed again. Everybody had deserted this country for South America.”

And he dreaded the idea of having to try to market his property in Vancouver, knocking on doors and talking to promoters.

But prospectors live on serendipity.

While Jim was looking for a financial angel, Yukon Revenue, a local company, was looking for an investment property. They ran into each other.

“We cut a deal,” he said.

During the 1993 season, Yukon Revenue’s $130,000 program included tying on another 75 claims and carrying out 10,000 feet of percussion drilling. The work resulted in some good numbers.

“It was nice to pull the visible gold from three holes. I was just working on a geological theory. It was sort of a wildcat program that is paying off very nicely, so far.”

After 23 years and a bunch of successes to his credit, Jim McFaull has learned what geology is all about. And his high school friend was right: It’s running around in the bush, looking at rocks.

(Over the years, Jim McFaull was president of the Yukon Prospectors’ Association; director of the Yukon Chamber of Mines; a Fellow of the Geological Association of Canada; and a director of Yukon Revenue.)

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Arthur James (Jim) McFaull was born in Regina, Saskatchewan on December 14, 1952 and died suddenly at the age of 59 in his home in Whitehorse, Yukon on April 14, 2012. A big farewell send-off was held at the High Country Inn on April 20, 2012.