Peel mining claims almost worthless: report

A report on the 8,400 quartz mining claims in the Peel watershed concludes they are “practically worthless.”

The report, written by MiningWatch Canada’s Ramsey Hart for the Yukon Conservation Society, is based on information from financial records of the Peel’s publically-traded companies.

It found almost all the expenditures by these companies since 2005 have been written off, said a Conservation Society news release.

Of the $168 million the public companies spent on acquisition and exploration of their Peel claims, only $5.7 million has not been written off, said the release.

The report looked at the significance of these write-offs as well as the status and potential market value of the Peel claims.

“In their financial statements most exploration companies list their property acquisition and exploration expenses as assets,” said Hart in the release.

“This is done on the assumption that mineral rights and information gained for the property are of equal value to the cost of obtaining them.

“Typically companies carry a property as an asset until it becomes clear it has little potential, at which point it is written off. Companies write off their expenses when they recognize that there is no viable deposit and/or they do not intend to proceed with additional work on the property.”

The write-offs don’t seem to be linked to the Peel planning process, but rather to a downturn in mineral prices and a weaker global economy, he said.

Three companies with substantial holdings in the Peel – Cash Minerals/Pitchblack Resources, Mega Uranium and Zinccorp Resources – didn’t mention the Peel plan in their year-end filings, said Hart.

Mining companies listed on the Toronto Stock Exchange and its Venture Exchange are required by law to disclose materially important information to their shareholders through public filings, he said.

“They are required to disclose any factors that could affect up to 10 per cent of the value of the company,” he said.

“The fact that these companies did not mention the Peel planning process in their filings indicates that the planning process has not significantly affected their value.”

The report shows the Yukon government should stop using potential claim compensation as a reason to reject the final recommended land use plan, said YCS executive director Karen Baltgailis in the release.

“The companies’ own records show that they [the claims] are practically worthless,” she said.

“If these claims weren’t being renewed for free by the Yukon government during the staking moratorium in the Peel, they would almost certainly have long since lapsed.”

Click here to read the full report.

Click here to listen to a CBC Yukon radio interview about the report.