Gerald H. Priest: His Life and Crime Against a ‘Company of Fools’

by Jane Gaffin

An ingeniously-plotted high-grade silver ore heist in the Yukon Territory has intrigued mining people, crime aficionados, lawyers, investigators, writers and others since a lengthy 1963 trial was staged in that northern, backwater, federally-controlled jurisdiction that most Canadians still can’t find on a map — a place the author of A Rock Fell on the Moon assesses as having milked the 1898 Klondike Gold Rush history “like a menopausal cow”.

It was a masterfully-crafted madcap scheme against what was once one of the richest silver camps in the world. The architects were two highly-intelligent co-conspirators who proved, however, there is honour among thieves.

Gerald Henry Priest, along with Anthony “Poncho” Bobcik, a big, jovial Czech, refused to tattle on a third party, a mine captain, believed instrumental in pulling off the ruse but his deeds went unproven.

Adding to the further frustration of baffled police investigators, United Keno Hill Mines (UKHM) workers remained mum on all counts, too. In solidarity, they refused to squeal on one of their own.

The 671 twill sacks full of high-grade ore were supposedly hand-mined legally by the two men from their Moon mineral claims and salted with a few allowable precipitates rejected from the mill.

If, on the other hand, the pair actually committed criminal sin, then the workers’ admiration escalated a thousandfold in a “good for them” attitude.

A large percentage of workers held a direct contempt for the mining company and maybe an indirect disdain for the Toronto-based, multi-national parent corporation, Falconbridge Nickel Ltd.

Much of this scorn would not have metastasized into such hostility except for the dictatorial UKHM general manager whose ghastly managerial practices were unprecedented. He didn’t seem to like the company he managed and definitely wasn’t a people-person. Maybe, as an inept manger, he should have been held indirectly responsible for causing the ruckus and did eventually receive his comeuppance in something akin to a storybook theme of “good trumps evil”.

Until Harbour Publishing released daughter Alicia Priest’s book A Rock Fell on the Moon: Dad and the Great Yukon Silver Ore Heist (peek inside at Kindle’s sample chapters) on the 2014 Christmas list, nobody except family members and maybe a few close friends had an insight into what made Gerald Henry Priest tick.

Some people viewed United Keno Hill Mines’ chief assayer as a friend; others saw him as moody and mercurial; Judge John Parker, responsible for sentencing, noted Priest to be “a strange bird” and condemned him for harbouring a grudge against society.

None got it quite right.

Priest had it all. Yet like Robert Service’s poem The Men Who Don’t Fit In”, which suits Priest to a T, he sadly wouldn’t admit his mistakes until he was robbed by that sneaky devil called time. His self-analysis came too late to pick up the fractured pieces and make amends.

He was a clever man. He had a flair for writing, could remember lyrics to tunes, accompanying himself on a guitar, and recite Robert Service poems by heart, the reason the author has opened each of 20 chapters plus the epilogue with appropriate lines lifted from a variety of the bard’s verses.

He was a great storyteller, spinning wild fables into plausible tales that turned skeptics into believers. He and his geologist cronies convinced a court in Round One that “in geology, anything is possible”.

How could six jurors, who wouldn’t have known a sulphide from the city limits, counter the experts? Maybe a rock really did fall on his Moon mining claims millions of years ago, and Priest simply took advantage of mining Mother Nature’s gift.

As the story unfolds, the reader constantly vacillates between his guilt or innocence.

Priest and his family lived in a company-owned Panabode house, reserved for Elsa’s upper echelon. Inside, the comfortable, cozy, varnished, log-style home was rich with music, books, a cat and much-loved Belgian shepherd, Caesar.

His home was his castle where he didn’t have to exert effort to boil a kettle or wash a sock. He had a well-paying job; a beautiful, affectionate wife; and two daughters, Vona and Alicia, born 360 days apart, who revered him as only little girls can.

Or, as the author inquires, did he perhaps see things differently? “Four female dependents, an ailing wife [heart problems] who couldn’t give him the son he deserved; a religiously fanatical mother-in-law, a tedious dead-end job for a company of fools and two daughters who revered him as only little girls can?”

Most people would want to keep their family skeletons stuffed permanently inside a locked closet, not to be whispered about ever. This memoir cum thriller doesn’t masquerade the warts and blemishes but uninhibitedly rattles the bones in an effort to dig out the truth.

It was way past time for half-truths and speculations written by others to be set aside and for the author to tackle the prickly job of fully disclosing her father’s good points, which is why she loved him, as well as his misdeeds, for which she couldn’t forgive him.

His frank, candid, resilient, loving daughter, Alicia, was the only person who could pull off the thorny assignment properly, coupled with invaluable assistance from her own “rock”, husband Ben Parfitt, a writer in his own rights.

As though Papa’s story doesn’t provide enough surprises when turning every corner, the reader is bolted over with an unexpected double dose of intense family history from the maternal side of the equation.

As a girl, Maria, or Omi as her loving granddaughters addressed her, had fallen from riches to rags, having begun life in a wealthy, Russian land-owning family who lost everything, including themselves, to revolution and anarchy.

With her birth family and her only living son, Peter, imprisoned somewhere in the Gulag, she suffered a lifelong survivor complex. While guilt was somewhat assuaged by strong Mennonite convictions, in her mind she was a sinner. “In the terror time, I did what I did to stay alive,” she was quoted as saying.

God only knows what sins she committed to survive and it’s best not to probe. Many Ukrainians refrained from discussing this awful past, although some did loosen their aging tongues so the next generation would have an inkling about Holodomor.

Josef Stalin’s man-made famine exterminated unknown millions through deliberate starvation in the 1930s. When the Soviet’s army confiscated the crops, not leaving a grain, much less a percentage of the harvest for the villagers’ winter food supply, residents resorted to eating cats, dogs, exhumed horses, leaves from trees, then each other.

Survivors were fortunate if they came through the terror with their memories blocked and sanity in tact.

An excerpt from a eulogy Alicia wrote in the Globe and Mail when her mother, who survived two husbands, died in 2011 hints at Helen’s tough-fiber: “If life is an obstacle course, Helen Young was a gazelle. Spirited, elegant and beautiful, she had a fragility and charm that masked her determination to clear one hurdle after another.”

Lolya, or Helen, was born November 24, 1924, in what was at the time southern Russia and is now the Ukraine. She was the second child and only daughter of Maria Reger and Abraham Friesen. Her younger brother Alexander died of diphtheria at 18 months.

Her family moved away from their large extended Mennonite clan in the Ukraine to Ebental, a small village in the foothills of the Caucasus Mountains. As a Mennonite, her mother tongue and heritage were German, the enemy of Stalin’s USSR, where their religious freedom was no longer tolerated.

In 1930, Helen’s mother, Maria, learned that her parents, sisters and brothers had been loaded in cattle cars and shipped to Siberia, two children dying along the way. The Soviet regime became their immediate enemy. Under a psychopathic Stalin, the Caucasus region was no safer than the Ukraine had been.

Three years later, Helen’s father collapsed and died at age 35, having learned his name was on Stalin’s personal list of who would live or die after rounded up and brought before his secret police for interrogation.

Within two years, Helen’s mother married another Mennonite, Heinrich Werle, a university-trained agronomist responsible for ensuring the late August harvest of the area’s wheat crop. The “progressive” state forbade the use of horses which were “replaced” with non-existent combines.

Caught in a life-and-death conundrum, Werle ordered farmers to hitch up the horses and bring in the harvest. The act was truly part of the Harvest of Sorrow. The crop secured, Werle was banished to a northeastern hard labour camp.

In 1940, Helen, of high school age, and her mother, Maria, moved to still a larger town, Stepnoye.

Helen’s older brother Peter, now 17, had stayed behind in Ebental to care for the family’s small house and few animals. The following year, he too was arrested and instantly disappeared to the Gulag, along with other relatives who were assumed to have all perished in that inhumane, Stalin-devised hellhole.

In 1941, the Nazis marched into the Caucasus. Due to their common language and common hatred, Maria saw them as liberators. When the Russian army launched its massive counter offensives in the winter of 1943-44, Helen and Maria were forced to escape by foot, horse-drawn cart and cattle car along with the Germans.

Nineteen-year-old Helen and her mother arrived in German-occupied Poland, ultimately making their way to Germany where they were greeted with mass terror as buildings were reduced to rubble by Allied bombs. Helen secured a respected job as a Russian-German translator for Kommission 28, a division of the German Reich.

In the fall of 1948, a Canadian Mennonite family put up $500 to sponsor the hard-working mother-daughter duo to resettle in Matsqui, British Columbia, where Abraham and Helene Rempel, who remained life-long friends, gave them a home and a community. After paying off their ship and train fares labouring in the fields, they were free to venture out on their own.

After crossing two continents and the Atlantic Ocean, Helen felt rejuvenated. What better way to cement her new self to her new nation where she finally felt safe than to marry a real Canadian?

Before marrying Gerald Priest, she had turned down a United Nations collection of suitors: a Russian, Pole, Italian, three Germans and an American as well as a dedicated Mennonite whose plans to work overseas as a missionary was not for her.

Neither was the Yukon’s jerkwater mining town of Elsa, where she sparkled like a jewel in a junkheap. “A cardinal in a town of sparrows”, as the author describes her exotic mother who loved the city life that suffocated her bush-minded husband.

She stitched her own chic wardrobe with help from a nimble-fingered mother and dressed the two girls in matching ensembles. She never owned a pair of jeans in this mining town of boardwalks, bladed lanes and unpaved roads, covered in either snow, ice, mud, dust, dirt or gravel, depending on the season.

I didn’t want A Rock Fell on the Moon to end. The writing style is crisp, fast-flowing and humourous, the sentences often loaded with fresh, witty similes and metaphors.

With pages nearly exhausted, I didn’t believe space remained to run headlong into any more jolting surprises around the next corner. While only a fool tries to out-judge a judge, the reader should never try to outguess how Alicia Priest would choose to present her true “whodunit”.

At this point, Gerald Priest didn’t have two plugged silver pesos to jangle together in his jean pocket. But he had chutzpah.

His blood boiled every time he thought about American Smelting and Refining Company (ASARCO) in Helena, Montana, smelting his shipment of ore and sending the fat cheque for $125,322.17 to United Keno Hill Mines before the courts had determined who owned the ore and where the ore had originated.

This irrepressible guy took another jab at justice. His family, unravelling at the seams, was oblivious to his international escapades in which he convinced his new Stateside lawyer to take his civil case on contingency.

Priest provided a plausible explanation to Nelson Christensen, a young lawyer working for a large, prestigious Seattle firm. He had delivered a shipment of raw ore to ASARCO in June, 1963, he explained, then two years later he had been convicted of theft. Since the worth of the ore skyrocketed in Priest’s mind with each retelling, he pegged the value of ore this time at $200,000.

Long before he had been found guilty, he said, the smelter processed the disputed ore and cut UKHM a big cheque. “That’s violation of the contract I had with ASARCO, isn’t it?” Priest asked of Christensen.

“It was an audacious gambit but one that Dad’s new lawyer in Seattle felt was worth pursuing,” writes the author.

In 1967, notice was served on ASARCO that Gerald H. Priest was suing the smelter for breach of contract. Seattle lawyer Christensen argued that the smelter had breached the terms of the contract prior to Priest’s criminal conviction by smelting the ore before Canadian courts issued any ruling.

The filing of the claim against ASARCO set off a nuclear explosion at UKHM. Before ASARCO had paid UKHM, the smelter had required the company to agree that if Priest and/or his partner, Anthony Bobcik, or Bobcik’s company, Alpine Gold and Silver, or anybody else came out of the woodwork to recover funds from the smelter, UKHM would have to reimburse the smelter.

That problem was between the mining company and the smelter and had nothing to do with Priest, who sat back smirking. Revenge is sweet, even when served up cold.

If Priest earned nothing else from his current gamble for a cash settlement, he at least had the satisfaction of watching the Big Boys squirming.

This surprise aftermath that the author unloads at the eleventh hour is a long-obscured segment in the saga of the Moon claims. And, despite what Priest did, the reader wants to applaud this scenario that holds a bit of ironic twist against the Goliathan companies UKHM, ASARCO as well as the judiciary in Canada, who, as political bedfellows, had been beating up on a poor little David.

In fact, earlier in chronological events, the Yukon judiciary’s face turned red with rage — or more to the point, Judge Parker’s — due to a couple of other overlooked glitches: “It’s not what you know, but who you know” that counts and “Never underestimate the power of a woman” who just might be working on the “outside” in favour of securing the release of her husband who’s been helplessly incarcerated like a fly in a jar on the “inside”.

The author’s interesting website can be visited at www.aliciapriest.com where more can be learned about this courageous woman’s date with her “ultimate deadline”, ALS, better known as Lou Gehrig’s disease.

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.

 

Dismantling Industrial Civilization is on the Agenda

 

by Jane Gaffin

From the 1976  forewarning files…

Over the years, the United Nations Agenda 21’s insidious, ever-expanding tentacles have reached out globally in every direction to surreptitiously encapsulate every facet of people’s lives while they weren’t paying attention.

Agenda 21 — which simply means a blueprint as to how a New World Order will dictate how society will live and behave in the 21st Century — didn’t get a serious toehold on its radical scheme until its 1992 environmental conference in Rio de Janeiro where the ultimate plan of action was concocted to take humanity backwards into another Dark Age.

To save planet earth from destruction meant the elimination of all human activity, plus, as a little sidebar, the pogrom called for the extinguishment of middle-class society and the extermination of at least three-quarters of the world population.

One of the initial steps to successful implementation was the dismantling of industrial civilization and, in Marxist fashion, relieving individuals and corporations of their right to own property — whether that be an expansive farm, a plot of land for a house, or mining claims — and the withdrawal of all leases and licenses to government-controlled lands for grazing cattle, big-game guiding, placer and hard rock mining, and any other private enterprises.

Below is a prophetic article, Who Gets the Blame? Hit by Strikes Yukon Economy Suffers, that appeared September 30, 1976 as the lead in the Toronto-based Northern Miner, the Bible of the worldwide mining industry. It demonstrates in spades the enormous international ramifications and ripple effect of how society suffers the backlash when governments and a few power-hungry individuals start toying with industrial civilization “for fun”.

At the relevant time, the Yukon was blindsided with a severe blow said to be a protest to the Anti-Inflation Board.

The Anti-Inflation Act was a contentious parliamentary act passed in 1975 by Prime Minister Pierre Trudeau’s Liberal government in Ottawa supposedly as a measure to slow down inflation that was blamed on an out-of-control increase in commodity prices and wages government and companies were paying to employees.

The unpopular law was met with an angry counterblast from virtually every sector of society. The populace is just now beginning to comprehend what is really in store for the future.

No ordinary person could fathom what evilness invisible global elitists were plotting behind closed doors 38 years ago. By now, there is no doubt. And the draconian fallout from Agenda 21 is not going to be pretty as it continues coiling conspiratorially around us everyday like a big sneaky snake stalking its unsuspecting prey.

_______

What a mess!

Worried Yukoners tough-sledded through the summer when labor disputes crippled the $228 million mining industry, the Yukon’s No. 1 support.

Now the 22,000 residents face an uncertain winter under guidance of a new commissioner, an anemic economy dropping faster than the mercury in the thermometer at $100,000 per day, and the provincehood issue crescendoing.

Things got hot in the summer. Simultaneously, United Steelworkers (USW) closed three of the Yukon’s four operating mines, plus the Cassiar Asbestos mine in Northern British Columbia, near the Yukon border.

Labor disputes disrupted operations at Whitehorse Copper, United Keno Hill Mines (UKHM) at Elsa, and Cyprus Anvil Mining at Faro.

As temperatures dipped into September, United Keno finally reached a settlement with the union. The miners are getting back to work and production is up to 40 per cent of normal, but the agreement has yet to be ratified by the Anti-Inflation Board. At Cyprus Anvil, no thaw is in sight and the mine is still shut down, while Whitehorse Copper workers are back on the job earning a base hourly wage of $6.10.

The only mine uninterrupted by labor problems was Clinton Creek Mine, northwest of Dawson City, eight miles from the Alaska border.

The Clinton employees are Canadian Mine Workers, their negotiations concerned with severance pay and move-out allowances.

Owned by Cassiar Asbestos, Clinton has been exhausted of commercial-grade fibres, and a permanent closure is expected early next year.

In mid-September, the Cassiar subsidiary of Territorial Supply, an International Harvester franchise in Whitehorse, closed after 25 years of service. The Transport Division is continuing to haul fibre from Clinton to railhead at Whitehorse.

THE COMPLEX ISSUE

The Cyprus Anvil lead-zinc mine, the Yukon’s largest mine, is directly responsible for half the Yukon’s economy. When the 10,000-ton-per-day operation is immobilized, two-thirds of the territory is paralyzed.

Major strikes have erupted there three times this year, and helped start the economy on its roller-coaster path nine months ago.

In late July, the 400 United Steelworkers members entered their latest strike, ostensibly a protest against the Anti-Inflation Board’s substantial roll back in their wage and benefit contract from 36 to a 9 per cent increase in the first year.

The union insisted it wasn’t a strike against the company, therefore Cyprus Anvil tried to avert the work stoppage by offering to join the union in an organized approach to the Anti-Inflation Board about the revision decision.

A local news analyst, Don Sawatsky, reported an ebullient spirit in Faro, with campers packed before the union opted to strike. He said they just didn’t realize the seriousness of that decision.

The new contract, retroactive to October of last year, was for an hourly base rate of $7.

Not only did the strike decision drastically hamper the Yukon, but Faro activities can be felt many places. Skagway, Alaska is the port-of-call where ships load ore concentrates destined to customers in Japan and European countries.

While 1,500 residents from the Yukon’s second-largest community are fishing, a lot of people are sitting around in wide-eyed amazement wondering where the concentrates went.

Ironically, Faro, constructed in 1969, hasn’t been inked onto many maps. But the little town sure packs a wallop.

Presently, Yukoners have lost track of who’s mad at whom, what the strike’s all about. This week the Canadian Labor Relations Board handed down its decision that a new agreement would have to be negotiated meeting the requirements of the Anti-Inflation Act. Thus, the obscure and complex issues are still unresolved.

Cyprus Anvil is the biggest customer for the Northern Canada Power Commission (NCPC). With the mine down, NCPC reported a loss of $200 thousand a month. The federally-owned utility company by an Act of Parliament can’t operate in the red, and requires consumers to pick up any deficits.

Yukoners fear they’re cradling another price hike in their palms. Within the last year, NCPC has raised wholesale power rates by 80 per cent to defray a $30 million override for the new 30-megawatt Aishihik power project, 80 miles northwest of Whitehorse.

Since the rate-increase protest launched by Yukoners in January, James Smith has stepped down from his 10-year service as Commissioner and turned full attention to chairmanship of NCPC.

Mr. Smith said that he’s keeping the federal people apprised of the current situation in the north, and is hopeful of a realistic solution to the problem.

He doesn’t want the federal government coming back to the Yukon this time with an excuse of “not knowing what was happening.”

The Yukon could sell stock in its northern winters. The price always promises to double. Gas pumps glared with the third petroleum increase within 13 months, gas retailing for $1.05 a gallon in Whitehorse. Outlying areas are looking at 50 cents tacked onto that. Heating fuels went as high as 64.2 cents a gallon.

It’s like gold,” a Gulf wholesale representative said, “except going the opposite direction!

The economic pressures are high, and many people from the work force of 10,000 envisage a jobless winter. Some, not taking any chances, planted “For Sale” signs in their front lawns. Even school enrollment was down by nearly 200.

And marginal-profit companies are getting more uptight by the minute about the constant increases in overhead, and wages being pushed to the hilt. They’re waiting for the inevitable — the twain to meet and drive small businesses into oblivion.

The $20 million mineral exploration industry was quiet this field season. Inactivity was blamed partially on crews having to curtail work at minesites that were embroiled in labor disputes. Another speculation for the slow-down is that large companies have been given encouragements to return to British Columbia under the Social Credit government, and companies want to search for minerals where they get the most for their shopping dollars.

This field season consisted mainly of regional follow-ups, with relatively few grassroots projects initiated in the Yukon. And helicopter operators, diamond drillers and expediters were all feeling the pinch. One helicopter pilot reported a mere 10 revenue hours flown by June 21. Normally, by that time, the exploration people would be queued up for aircraft service.

The largest Yukon transportation firm had only a skeleton fleet of diesels trickling the gravel network of roads. White Pass and Yukon Route laid off 90 per cent of the 133 drivers, and a total lay off of 287 employees.

Five men were rehired to service at Whitehorse Copper and Cassiar Asbestos when the two mines returned to work in late summer; however, it’s expected to take time to regain full mining operations.

White Pass ship and train schedules slackened. Ships sail the west coast from Vancouver to Skagway, Alaska with commodities destined the 110-miles farther to Whitehorse by White Pass narrow-gauge rail.

The Chamber of Commerce has been beating the bushes for answers to the economic strife. Local entrepreneurs reported a 15 per cent reduction in business, and blamed the decrease in their profits on the labor situation in the mining industry.

However, tourism was also down considerably this summer.

The Chamber president said, “We’re at a loss as to what to do. It’s a delicate situation. Hopefully, the unions and managements can get started on some meaningful dialogue.”

It’s virtually impossible to estimate accurately a figure of revenue loss in the territory, especially through taxes lost in unpaid wages and the congealment of cash flow to the retail market. However, one of the largest sources of income to the territory is through fuel taxes. A half million has been lost from the trucks that are being mothballed and aren’t bringing in the 16 cents per gallon road tax.

Regardless of when industry resumes full-speed-ahead productivity, it’s predicted to take two years to wash away the stickiness after being in the jam jar.

Merv Miller said, “Even when the economy rolls again, there’ll be a long-term impact for both government and industry.” The assistant commissioner said he thinks labor and management must reach the common denominator goal — earning money. But returning to work still squabbling with each other won’t solve anything, he remarked.

“Mines shouldn’t take all the blame,” Mr. Miller continued. “The economy peaked in July last year and has been on a plateau since that time.”

He said, “There’s little we can do now, except wait.

The territorial government is waiting to the tune of $150 thousand per month direct revenue losses.

Dr. Jack Hibbard, a member of the Yukon’s legislative assembly (MLA), said, “The Yukon can’t withstand the pressure of the work stoppage any longer. If legislation is the route, let’s take it.

But he’s apprehensive that legislation will further alienate labor, management and the Anti-Inflation Board.

He suggested that Commissioner Art Pearson make representation to the federal government, unions and mine managements. The Commissioner will be sitting in on negotiations as a non-partisan observer to obtain original information, instead of the second-hand knowledge that has been prevalent in the past.

Dr. Pearson was appointed Commissioner by the Liberal government and succeeded James Smith in July.

UNION CONTEST

Faro union members said they’d quit if forced back to work by legislation, and threatened that the Yukon wouldn’t be able to hire tradesmen under the current rates.

Cassiar’s getting more an hour than we are,” complained one United Steelworker member at Faro. Cassiar went back to work with a base wage of $7.30 an hour.

In March, at a United Steelworkers mining conference in Whitehorse, a personal contest developed between two local presidents.

Bob Yorke and Stu McCall, the meeting chairman, had a succinct discussion over which union local would get the highest contract in the shortest negotiating time.

Mr. Yorke, USW local president at Cassiar, said, “Cassiar’s not worried about matching Faro. We’re going to do it in less than nine months. We’ll do it in two months.”

He asked that all unions stick together to ensure good contracts for all mines.

At Faro for six years, Mr. McCall, who’s recently resigned as local president, turns the Yukon’s economy on and off like a faucet. The Englishman, also an elected member of the Yukon’s legislative assembly, was a machinist in the paper trade before coming to Canada.

“I don’t like mining,” he said. His plans are to stay until the mine’s finished to be sure that development is done properly.

“The mining industry is immature,” he commented. “It takes risks, gambles, and is financially greedy. That makes it difficult to fight inflation in the North, because of that greed from top to bottom.”

Mr. McCall said that the company had intended to shut the mine down for the winter anyway — strike or not.

But spokesman for Cyprus Anvil, Barry Redfern, refuted the accusations. “We want to get the mine fully operational as soon as possible.”

FINALE

Bob Hilker questioned the righteousness of 400 Steelworkers taking on the Anti-Inflation Board. The consulting geologist said, “It’s fishy!”

Mr. Hilker, with his Whitehorse firm, R.G. Hilker, Ltd., is vice-chairman of the local chapter of the CIM (Canadian Institute of Mining and Metallurgy).

“Labor is getting too expensive,” he remarked. “It’s going to put Canada’s minerals out of the market.”

He said, “There’s no way the Yukoners can continue to pay revenue losses for a multi-million dollar industry. The Yukon needs legislation with teeth in it.”

He thinks provincehood may be the answer.

The undaunted Erik Nielsen, the Yukon’s Member of Parliament, continues tabling resolutions for Yukon provincial status in Parliament. This session will be no exception to the rule for Mr. Nielsen’s endeavors. As usual, resolutions aren’t expected to pass.

MLA Fred Berger said that the Yukon can raise only 80 per cent of the gross revenue needed to run the territory. Mr. Berger, leader of the Yukon’s NDP (New Democratic Party), said, “Provincial status is the wrong issue. It’s responsible government we want, the running of our day-to-day affairs.”

Commissioner Pearson is sympathetic to the concept of self-government for the Yukon. In November, the new commissioner will sit for the first time with the 12 elected members when the Yukon legislative assembly reconvenes.

Stay tune, as they say! The whole Yukon issue may be the survival of the fittest!

– 30 –

 

Last One to Leave: Turn Off the Lights

By JANE GAFFIN

*******

(This excerpt focuses on Jim McFaull’s last duty as United Keno Hill’s acting exploration manager and is from a 23-article historic series that glimpses the life and times of United Keno Hill Mines and its people, published in the Whitehorse Star between August 6, 2004 and January 7, 2005.

Keno Chronicles can be viewed at: http://www.yukonprospectors.ca/Keno.html)

Jim McFaull’s analysis of The Yukon Quartz Mining Act and Its Regulatory Regime’s Impact on The Free Entry System of Mining Law, February 2000 is available at:
https://janegaffin.files.wordpress.com/2013/02/jims-report-pdf.pdf

*******

Keno, the venerable old gentleman mine, refuses to die a natural death as long as a probable hundred million ounces of silver keep its heart beating. Yet, the federal government is bent on subjecting the mine to euthanasia.

I believe the mine deserves a dignified burial.

In a series of articles being published in the Star each Friday, I’m saying last rites and farewell to a great mine that served as the Yukon’s lifeblood off and on for more than 80 years. Here’s part 9. (Whitehorse Star, October 1, 2004.)
*******
After the crash of ’82, everybody lost their jobs.

United Keno Hill’s exploration geologist, Jim McFaull, spent the winter driving a scoop tram for an underground placer operation in the Sixtymile country near Dawson City.

Dennis Prince came to Whitehorse from Ontario to fill the head position left vacant when Dutch Van Tassell resigned from United Keno Hill Exploration.

Prince’s alma mater was Newfoundland’s Memorial University, where he had first studied geography, then geology. The 35-year-old Falconbridge geologist was widely recognized as one of Canada’s most vocal mining advocates.

To his thinking, “balance” didn’t mean one group could achieve its goals by seizing everything from another group. Yet government was wantonly demonizing mining while it was down for the economic count.

Career and contract bureaucrats were starting the slow-motion process of dismantling industry piece-by-piece that would turn small communities into ghost towns.

It was getting hard to find a corporate giant or a junior company that would show spunk and spine and would stand up and argue with the government. Single-file, the mainstays pulled up stakes and left the Yukon: Falconbridge, Noranda, Kennecott.

Prince was the last of the Yukon lot speaking out against the illegal tampering with the mining act, insane regulations and bureaucratic abundance and interference.

During his five-year stay, Prince worked tirelessly with the Yukon Chamber of Mines, as had and did other United Keno Hill geologists.

Despite a nine-month labour strike at United Keno Hill, coupled with low metal prices that had forced closure of all the Yukon’s major mines plus the White Pass and Yukon Route railway in 1982, the Elsa mines resumed operations in the fall of 1983.

McFaull was called back to the mine, this time as the senior geologist in charge of the exploration department. The company had some fairly phenomenal budgets to expend due to flow-through shares. A hundred-percent expenses, plus an additional 33-1/2 per cent to sweeten the pot, were tax incentives filtering through to individual shareholders.

The tax deductions inspired companies to explore and develop mineral deposits into producing mines that would generate revenues.

McFaull already had the Galkeno Open Pit to his credit. Six more of the many targets he had previously prospected, developed and drilled went to production.

Millions of ounces of additional ore were produced from the new Silver King Underground, Ruby Offset, Hector 3 & 4 Vein Open Pit, Flame & Moth Open Pit, Black Cap Open Pit and Bellekeno Underground.

The two best properties were the Silver King and Bellekeno, which were not exhausted of material before the company went into a tailspin in 1989.

Silver prices continually slid while taxes continually rose. To avoid another premature shut down, UKHM’s president and board of directors took a 25-percent reduction in pay before asking the employees to follow suit.

Their survival technique was reminiscent of Treadwell Yukon in the early 1930s. Livingstone Wernecke was desperate to keep his men eating during the Depression Years. The miners, knowing the company’s abysmal financial situation, had accepted a dollar-a-day pay cut to keep their jobs to the bitter end.

When silver took another drastic dip in 1986, UKHM wages were tied in with the price fluctuations. By the summer of 1989, workers were back on full salaries for nine months. However, their pay was based on the 1986 scale.

It was a long drought.

McFaull’s last full-tilt paycheque was from 1981, when he was the underground mine geologist at Venus. At least he had an enjoyable, worthwhile job, and the company had some good budgets to work with, McFaull noted in a 1993 interview.

“We got a lot of work done and had a fair bit of success due to the flow-through share program.”

Then, 3 1/2 years of bunkhouse living took their toll. McFaull transferred back to the Whitehorse office in the spring of 1987. For the next three years, he managed the Dawson Lode project.

United Keno Hill staked roughly 1,200 quartz (hardrock) claims overtop Klondike placer workings. Finding the source of Klondike placer gold didn’t meet with any luck for the several companies working on a similar concept.

While McFaull was chasing the Mother Lode, United Keno Hill employees learned of Dennis Prince’s intention to return to Ontario. (As a note of memoriam, Prince died suddenly of a massive stroke on Jan. 4, 1999, at age 52 in Toronto.)

The post was bequeathed to Ken Watson in 1988. He and his wife, Pat, were part of United Keno Hill’s best and brightest. The academics had carried out many seasons of reconnaissance field work as a husband-wife team.

Dutch Van Tassell would send out husband-wife crews; two-women crews; two-men crews. But he circumvented the possibility of creating human problems by not putting two-person, mixed-gender crews into an intimate situation. Anyone who didn’t like the boss’ old-fashioned moral ethics could apply elsewhere.

The economic predicament bleakened. Watson served about a year as exploration manager, then he and his wife went to Ontario, too.

McFaull assumed the role of acting exploration manager in November 1989, around the time full curtains came down on the Elsa mines.

The only people with mine jobs were the watchman and a skeleton maintenance crew. The laid-off employees did not receive proper severance packages because of an agreement concluded between the labour union and the company.

Evidently, a new exploration budget was expected to come through like clockwork in the spring. Everybody expected to go back to work. It never happened.

Federal finance minister Michael Wilson cancelled the flow-through program that was the motor driving exploration companies to find and develop mineral properties into revenue generating mines.

As soon as United Keno Hill Exploration lost its funding, the acting manager, geologists, draftsman, expediter were laid off the next day.

Silver prices had dropped below the profitable $8 U.S. per ounce mark. The closure resembled the tough experiences of Livingstone Wernecke, who creatively kept Treadwell Yukon afloat up to 1941.

The company had succumbed to bankruptcy due to a bad marketing position, ore exhaustion and insufficient working capital. Treadwell president Phil Bradley and his board were negligent because they were tired of mining in the central Yukon.

McFaull, like Wernecke, had gleaned an encyclopedic knowledge about geology at the mines and in the field. He had been groomed for his managerial role for years. His name was freshly inked into the Canadian Mines Handbook as exploration manager along with Chris Cowan, UKHM’s president and CEO, and the names of the Toronto board members.

“I never got to do anything as the manager except shut the place down,” explained McFaull. Saying good-bye to more than 14 years with the company, he turned off the lights and locked the door.

Soon, the Sudbury, Ontario-based Bharti Laamanen Mining Inc., an engineering and contracting firm servicing the mining industry, struck a deal with Falconbridge Ltd.

Stan Bharti was familiar with the company. For a number of years, he was employed as an underground ventilation engineer for Falconbridge. Besides, their home turf of Sudbury was big Falconbridge territory.

Somewhere along the line, Falconbridge Nickel and Falconbridge Copper merged into Falconbridge Ltd.

Falconbridge, the owner of United Keno Hill Mines, was owned 50 per cent by each Noranda and Trelleborg AB, a Swedish industrial company. Both companies had acquired Falconbridge’s outstanding shares in October, 1989.

A multinational interested in daily millfeeds of tens of thousands of tons would not be enraptured with a 500-ton operation in the Yukon, any more than was Phil Bradley and his Treadwell board.

Noranda conceivably told Falconbridge to dump United Keno Hill Mines. The deal floated was a private transaction not subject to making an offer to all shareholders.

A June 1990, press release, bearing a New York dateline, implied Falconbridge would pay to off-load the assets.

If there was any Swedish money involved, as rumoured, than it may have come from the Trelleborg interest, although doubtful.

BLM Mines Inc., a Toronto-based unit of Bharti Laamanen Mining, agreed to acquire the 44.9 per cent of United Keno Hill Mines’ common shares held by Falconbridge.

In return, Falconbridge agreed to provide up to $2.4 million for the United Keno Hill operations over 30 months in exchange for royalty interest in United Keno’s properties. It would retain a minority ownership of the DEF copper deposit, 80 kilometres northwest of Carmacks in the Dawson Range. However, Bharti Laamanen only lasted about six months in the Yukon.

There was another snag. The DEF deposit, found on Dutch Van Tassell’s watch in 1971, had been funded by United Keno Hill Mines, Falconbridge Nickel and Canadian Superior Exploration.

The other 60 per cent of the eight-million-ton copper silver-gold deposit was called Minto. It was owned by the Silver Standard/ASARCO syndicate.

American Smelting and Refining Company (ASARCO) had Keno Hill connections dating back to the 1920s through the Guggenheims of New York.

The Guggies had formed the original Keno Hill Mining Company, a spin off from the Yukon Gold Company’s dredging operations in the Klondike.

The financial gurus would have to untangle the complexities in the boardroom.

Around July 1990, Jim McFaull handed over the keys to Stan Bharti and Risto Laamanen of Sudbury.

*******
Jane Gaffin is author of Cashing In, a history of the Yukon’s hardrock mining industry, 1898 to 1977.

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.

Bypassing the Legislative Process is Deadly to Democracy

by Jane Gaffin

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(“Bypassing the Legislative Process is Deadly to Democracy” was originally published in the Whitehorse Star, May 12, 2004)

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Democracy can be described as a government run directly or indirectly by the people who live under it.

Paul Johnson summed up true democracy in “The Enemies of Society” to mean “the ability to remove a government without violence, to punish political failure or misjudgment by votes alone…”

Yet the electorate has no voting power because the names of senior bureaucrats are not on the ballots. The voters can only place a mark beside names of politicians who depend on the hired help to carry on the government but without the political will to reinstate the democratic principles and social order.

To quote my own eBook, “Justice Served Up Yukonslavia Style” (view on this site) is the worst form of government except for all the others, as Sir Winston Churchill would have told the politically illiterate.

“A segment of the Canadian population, who call themselves ‘social democrats’, whine mindlessly that ‘democracy isn’t working’.

“How would they know? Democracy hasn’t been in vogue in this country for nigh on 35 years, or since Herr Trudeau started dismantling it from 1968 onward.

“But is it any wonder democracy is ailing? Public-ignorance surveys have revealed that three-quarters of Canadians are so oblivious to politics as to not know what the terms ‘left’ and ‘right’ denote. Is it any wonder that the average election is nothing more than a crap shoot?”

One feature of democracy that I always appreciated–and miss the most–was the emotion and exhaustive debates in Parliament where each political party, each elected member, was afforded the freedom to express his/her opinions on legislative bills that effect every Canadian’s life.

But the Liberals axed this segment of democracy. They introduced a method that gives the government license to close debate prematurely and call a vote, especially handy on contentious, ill-conceived matters like the non-Charter-proofed firearms and anti-terrorist bills.

Regardless of what the constituents want from their elected Liberal representatives, the prime minister dictates that Liberal members will cast a party-line vote, or stay away when the vote is called.

Otherwise, the dissident members will lose committee privileges and be relieved of their keys to the caucus washroom.

The prime minister rules the three branches of government–Parliament, Senate and Supreme Court of Canada–with an iron fist analogous to the force with which Josef Stalin ruled the Politburo in the former Soviet Union.

Dictating the outcome of the legislative process is not a democracy.

But it gets worse as it gets closer to home. Now, the Liberal government has actually circumvented the entire parliamentary process and given government rogues, hidden in the bowels of the Parliament building, the unfettered mandate to rewrite statutory acts.

A number of those illicit, ill-conceived acts dealt off to the territory has put the Yukon government in a very awkward position.

On April 1, 2003, Ottawa off-loaded management responsibilities of its Northern Affairs program to the Yukon government.

Inherent in the transactions was the promise to “mirror” appropriate federal legislation into new Yukon government legislation. Any necessary changes would be minimal, we were told.

For instance, the legal names of the acts had to be altered slightly to reflect territorial responsibilities.

The text would replace the Minister of the Department of Indian Affairs and Northern Development (DIAND) with Commissioner of the Executive Council to denote territorial authority.

The statutory acts effected were the Yukon Quartz Mining Act, Yukon Placer Mining Act, Yukon Territorial Lands Act and the Yukon Waters Act.

Another act, presently hot on the front burner, is the Yukon Environmental and Socio-economic Assessment Act (YESAA, pronounced “yes, suh”), formerly known as DAP (Development Assessment Process). It was supposed to “mirror” the federal mess called the Canadian Environmental Assessment Act that only a Stalin administrator could have loved.

Any time promises are delivered from federal bureaucretins, who wouldn’t know anything about integrity and democracy if it bit ’em on the butt, Yukoners may as well expect the worst.

Sure ’nuff! None of the legislation was “mirrored”.

Last month, I stumbled across that fact when obtaining copies of the revised territorial legislation to send to a friend in B.C.

I thought it would be a simple task to sift through the fresh “mirrored” acts and flag the troublesome parts that were giving mining folks heartburn.

Wrong. The miners have held onto their statutory rights to enter the land to locate, prospect and mine on the mineral claims. But after section 12, I got mired in the muck.

I had difficulty locating the sections that were supposed to be identical to the previous federal act. Text had been inserted; text had been deleted; text had been rewritten; text had been massaged to the extent of changing the section numbers and the meaning of the act.

The first thing my untrained eye noted was “Commissioner of the Executive Council” was not defined up front in the legal definitions section; neither was “Minister”.

In the previous federal act, “Minister” was defined as “Minister of DIAND” and was supposed to be removed. Or did “Minister” now mean the territorial minister of Energy, Mines and Resources? Or are we still dealing with the federal minister? I don’t know and neither did anybody else.

And why do the titles “Commissioner” and “Minister” sometimes appear in the same sentence?

The section under “Exceptions”–the places miners aren’t supposed to set foot to locate claims–had been re-positioned and re-numbered. The adjective “national” had been deleted from in front of the word “park”.

Cute. That slight change means about half to three-quarters of this territory has been alienated from mining interests. The word “park” now includes territorial park, city park, parking lot, preserve, reserve, wetlands, dry lands, wildlife corridor, hiking trails, special management areas, special unmanaged areas, and whatever.

I scouted for somebody who had seen this new mining act. I checked around the chamber of mines, asked bureaucrats, politicians and their assistants. Nobody had seen, much less read, this document, which presumably was released a year ago April. Worst, nobody seemed to care.

One bureaucrat advised that a condition placed on these four new acts devolved to the territory was they couldn’t be cracked open for changes in the legislature for five years.

Who needs a legislature? Ottawa didn’t bother with the legislative process when monkey-wrenching these statutory acts. I want a Yukon Supreme Court judge!

The Yukon Supreme Court is “supposed” to be the only judicial body designated to adjudicate matters over Crown land and federal acts from which the territorial act flows.

From where I sit, the Yukon government has two choices.

Send a “certainty” message to the mining industry and kill the economy once and for all by blanketing the whole territory with a staking moratorium.

Or, the Yukon government could initiate a judicial review of these four acts in an effort to find out exactly what kind of a dog’s breakfast the Liberals vomited in Yukoners’ laps this time.

This is scary stuff, to think Ottawa has been so successful dismantling democracy without people’s knowledge or permission, and nobody even winced.

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See Jim McFaull’s analysis of The Yukon Quartz Mining Act and Its Regulatory Regime’s Impact on The Free Entry System of Mining Law, February 2000.

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