The Narwhal – Over the past 10 years, the Yukon government has collected a mere 0.3 per cent of the value of placer and quartz resources on behalf of all Yukoners, the rightful owners of those minerals. An independent panel appointed by the government to review the territory’s mining legislation found that, during this period, miners extracted minerals worth an average of $335 million per year yet only paid an average of $100,000 per year in royalties.
The two laws predominantly responsible for mining in the territory, the Placer Mining Act and the Quartz Mining Act, were established in the late 1800s during the Klondike Gold Rush era and are in serious need of modernization, according to the panel’s recent strategy report, which is based on years of public engagement and is intended to inform the Yukon government’s efforts to bring Yukon’s mineral development legislation into the 21st century. Yukon’s antiquated royalty rates for gold — set into law in 1906 — are famously low at just 37.5 cents per ounce of gold, based on a per-ounce price of $15. In today’s market, one ounce of gold is worth more than $2,300.
Over the past decade, Yukon has seen a resurgence of mining interest, especially for gold extracted through placer mining operations. According to the Yukon Geological Survey’s latest comprehensive report on placer mining, published in 2018, there are 25,219 placer claims in the territory, the highest number dating back to 1973. Through Yukon’s modern treaties, self-governing Yukon First Nations are able to receive royalties collected by the Yukon government. But because the territorial government receives such low royalties to begin with, only a “negligible amount” is actually making its way to First Nations, the panel found. The average royalty cheque received by First Nations during the past decade ranged between $6 and $24, Alatini added.
Tr’ondëk Hwëch’in First Nation, on whose territory the vast amount of Yukon’s placer mining takes place along the Indian River, reported receiving a royalties cheque from the government for $65 in 2017. That same year, placer mining along the Indian River accounted for 50 per cent of total placer gold mined in Yukon, according to the Yukon Geological Survey, amounting to more than 350,000 crude ounces of gold.
The panel recommends that “Yukon First Nations receive a fair financial and social return from mining and exploration within traditional territories by strengthening the connection between revenue flows and Indigenous interests in the land itself.” Recommendations from the panel also include allowing First Nations, under their final agreements, to charge companies directly for water use or land rental fees, instituting a statute-based template for benefit agreements with affected First Nations and requiring both impact and benefit agreements in advance of quartz mine development, construction, production and decommissioning.
Under the territorial formula financing arrangement, Yukon receives federal funding every year to pay for public services. But in order to maintain this funding arrangement, the Yukon government can only collect and keep $6 million worth in resource revenues each year.
“For every dollar above that $6 million amount, a dollar is deducted from Yukon’s [territorial formula financing] grant,” Eric Clement, director of communications with the Yukon government’s Department of Finance, told The Narwhal in an email. That $6 million ceiling may present challenges to Yukon moving forward with some of the most ambitious recommendations of the independent panel, including the creation of a heritage fund. The panel suggests Yukon look to the Northwest Territories’ arrangement with the federal government, which allows that territory to keep up to 50 per cent of its resource revenues without a specific cap. If implemented in Yukon, this arrangement would allow the territory to receive roughly $54 million in resource revenues without being forced to forego federal support, the panel found.
https://thenarwhal.ca/gold-seekers-flooding-yukon-wreaking-havoc-rivers/