FDI in Yukon’s Mining Sector

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What qualities do foreign investors consider when investing in a mining region like Yukon?  

When we first came to Canada as a group of professionals, we were looking for a jurisdiction that had the following characteristics: number one, we were looking for geology. First and foremost, if the geology is wrong, nothing else can make up for it. Secondly, we were, as a result of the geology, attracted to Western Canada, but we were looking for a stable jurisdiction. 

“First and foremost, if the geology is wrong, nothing else can make up for it.” 

Geopolitically, we needed to be in a place that was not rife with corruption and that had good laws, a history of mining where people understood mining, permitting and regulatory regimes that are easy to understand, straightforward, and simple, and where we believe that we could achieve outcomes. We ended up deciding that Western Canada was a good place geologically. We came to Yukon and decided to spend some time here speaking to government officials. We spoke to the average person on the street. We went to the local pub. We talked to the people in the bar. We went to some of the local communities such as the First Nations communities. We spoke to the chief and counsel in Ross River, for example. We talked to them about mining. We had to satisfy ourselves that this was a place that we wanted to be in. Yukon seemed to tick all the boxes, and so here we are. 

We also looked at infrastructure, and Canada has good infrastructure. We spent two weeks looking at ports, highways, roads, and how to get from point A to point B. We had to consider things such as projects where we had to bring materials in or where we would be taking concentrate out. We may have to cross the border. All these sorts of issues are really important, and Canada ticked a lot of boxes on it.  

I remember we sat down with Yukon’s government representatives before we even had a project or decided that we were going to come to Yukon and talked about the infrastructure. The Yukon people were quite apologetic about the infrastructure. We actually quite liked it. I’ve developed a lot of mines in places that are perhaps not as cold as Yukon, but are equally challenging from their own perspective in terms of having no infrastructure whatsoever. There would be a three days drive to get somewhere. Whereas, with Yukon, you are a five-hour drive from the capital. Yukon has fantastic infrastructure on a real basis, although perhaps the locals do not appreciate that. 

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How receptive has the Yukon mining ecosystem been to you and other foreign investors?  

Yukon has been very good. We are lucky that we are in a part of the world where mining is well understood. Mining has been happening in Yukon for 120 years. Yukoners understand mining. They understand the long-term benefits that mining brings and that it can transform a community. Interestingly enough, there is not a lot of hard rock mining in Yukon, but that is starting to change. There are now three hard rock mines in Yukon, and when we first arrived, there was one. That’s a big positive for Yukon. We spoke at length with local communities before we even made the decision to buy the project. We spoke to a local chief and council more than once and the local people in the community. There was a fundamental understanding of what mining is about and what mining companies bring. The big thing for us was that we felt that the people of Yukon were generally receptive to the idea of mining. That is a very big part. Nobody wants to be operating a business in a community where the people do not want that business. 

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What government programs have you taken advantage of and what additional supports do you think would increase Yukon’s competitiveness as a foreign investment destination?  

Yukon, like many mining jurisdictions, does have a number of support programs for exploration and investment in exploration, as well as how to build the knowledge base of the territory.   

Successive governments in Yukon have done quite well in making sure that there is a baseline of data available for people that might want to explore in Yukon. That’s a program that has been on for generations and good jurisdictions have those programs. 

“Successive governments in Yukon have done quite well in making sure that there is a baseline of data available for people that might want to explore in Yukon.” 

I would like to highlight that there are many programs run by the Yukon government, but the single biggest advantage of Yukon, one that we have seen across all political parties in Yukon, is the ability and the willingness of government to sit down and discuss your project and what you want to do with the project, to understand what it is you are talking about. That is not the case everywhere you go, especially in places that are less familiar with mining. You walk in and talk to people about what you want to do and they do not understand. In Yukon, when you walk in to talk to somebody, they understand, and that is the single biggest thing they have going for them. 

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What is the availability and competitiveness of skilled talent in Yukon?  

We bought the Kudz Ze Kayah Polymetallic Project in January 2015. When we bought it, the first thing we did was we employed a crew of people, mostly geologists and people in the geology field, to go to the project and re-log about 50 kilometres worth of exploration core that had been generated over the previous 20 years. In parallel with that, we completed about another 30,000 meters of drilling over a period of time. We employed a crew—as good of a crew as we would get anywhere, of geologists and geoscientists to do that work. The majority of people that we employed came from Yukon. And so I would have to say that was quite good in relation to the quality of the technical people that we could employ in the territory. 

“We were quite impressed with the level of competency of the people we employed from local communities, and we’ve only seen it improve over the six years that we’ve been here.” 

But then, we also employed a lot of people from the local community of Ross River and a little further afield in Whitehorse and Watson Lake. We were quite impressed with the level of competency of the people we employed from local communities, and we’ve only seen it improve over the six years that we’ve been here. In 2019, we sourced about 80% of our people and contracted companies from local Yukoners and First Nations groups. That was not because we were doing favours. That was because those groups and people were competent, experienced, and were capable of delivering the right results at the right standard, in the right time and at the right cost. We’ve been very happy with the level of competence and service that we have got from Yukon businesses.  

In answer to your question, we were very pleased when we bought the project and had our first year. We were very pleased with the level of expertise residing in the Yukon when we build this mine and we will have all those people that we have put through training programs, assisted, worked with, and supported. They will have taken the opportunity to take advantage of that support, and when we put those people on the project to work, I’m very confident that we will be very impressed. We will have a project that is mainly Yukon-run and First Nations-staffed.  

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What is the impact of FDI on local communities in Yukon? 

Foreign direct investment can be positive or negative, depending on how the investment is intended and how the investor behaves. Investment has to come from somewhere, and the money around the world comes from the same financial bucket. Ultimately, what you are looking for in a foreign investor is someone who brings something to the party, and it cannot just be money. Sure, it needs to be capital, but it needs to be the right attitude. What you are looking for out of a foreign investor is someone that leaves behind something that is better than what they found originally, whether that be capacity, infrastructure, education, a body of wealth, or increased opportunity. It does not really matter as long as the investor brings something to the party that is not just money and leaves more than it takes. That has always been our attitude. We wanted to leave a long-term legacy.  The Kudz Ze Kayah project is going to generate around 600 to 700 million dollars in direct taxes and royalties to Canada, Yukon, and local First Nations. That’s not including the indirect benefits, such as the long-term infrastructure improvements and educational benefits for a whole generation of locals for cross industry skill sets. 

“What you are looking for out of a foreign investor is someone that leaves behind something that’s better than what they found originally, whether that be capacity, infrastructure, education, a body of wealth, or increased opportunity.” 

You need to be looking at those and at the whole picture, not just at the money that might be poured into it by a foreign investor, because all you will be getting is money, and that is not good enough. As an investor, you need to know that you’re going to leave behind a legacy that you can be proud of. You are going to make another investment in some other place in the world, and you need to stand on your reputation and you are only as good as your last mistake. If you walk into a community and you say, “Here we are and this is who we are,” the first question they are going to ask is, “What did you do before?” Whatever you did before is going to be like a sheet of pure snow—every step you take will show. As an investor, you want to leave behind a legacy that is positive, and as someone looking for investment, you need to see that they are bringing something positive for the long-term.