New Money Pays Off

Chinese investors are known for focussing on positive results, and that’s exactly what they did when they bought Yukon Zinc in 2008 and, together with the existing team, turned the Greenfield base metal Wolverine project from advanced exploration to completing commissioning in two years.

That’s a remarkable achievement in itself and when you consider the mine’s location-280 km northeast of Whitehorse, Yukon and more than 5000 km from where the Jinduicheng Molybdenum Group Co Ltd and Northwest Non Ferrous International Investment Group (JDC/NWII) were based in China-the project becomes even more interesting.

Unlike many mine projects that take years, sometimes decades, to bring into production, the Wolverine Mine serves as a perfect example of teamwork and how two groups (Yukon Zinc (YZC) and JDC/NWII) can come together, even though they are from two very distant and distinct cultures, separated by language, and thousands of kilometres of ocean, and transform a remote site into a working mine in such a short time.

The Wolverine Mine, now one of Yukon’s three producing mines (“Minto” and “Keno Hill” are the others), is in the territory’s Finlayson District, a well known volcanic massive sulphide area known to host numerous copper-lead-zinc-silver-gold deposits.

While there’s no question the Wolverine Mine holds great promise for the region, the question is how did the China-based companies hear about it and, moreover, what convinced them to buy a property so far from their homeland?

Jing You Lu, Chief Executive Officer of Yukon Zinc, explained that YZC and its Wolverine property first got noticed on a trade mission that the Yukon Government had organized to attract external investment as a means to the region’s economic development.

The Yukon Government was promoting mining resources to Chinese companies at a China Mining Conference and YZC was looking for financing at the same time, and companies were looking for an opportunity for international growth when the two met at the Conference and both sides expressed interest and talks began.

 Subsequent conversations and numerous trips between China and Yukon Zinc’s Vancouver office, as well as the Wolverine site in Yukon, eventually led to an agreement that would see JDC/NWII purchase the company and mine outright, and from that moment in mid-2008 it’s been full speed ahead toward production.

Asked what JDC/NWII brought to the table other than financial resources, Raymond Mah, Chief Operating Officer, said “Each owner had proven expertise, one as a large Chinese mining company (JDC) and the other as a large exploration company (NWII). “YZC added to the existing diversity of JDC, which includes exploration, mining, processing, technology development and manufacturing,” stated Mr. Lu.

“The vision of YZC was to grow, and the management and new owners were mutually aligned to focus on the development of Wolverine and the growth in North America,” said Mah. The company bridged a cultural gap by establishing common core values and created a business model that includes a North American mine development approach combined with a longer-term Asian mine operating culture.

The word “growth” is the underlying message both in terms of Chinese investment into Canada and the Wolverine Mine itself and there’s no question that it’s happening at this Yukon site.

As mentioned earlier, the Wolverine project has gone from a Greenfield base metal site to a producer, and the mine is on track to consistently provide high quality ore concentrate to local and international markets. Securing financial support from JDC/NWII for Wolverine was important, but probably most important of all was receiving the necessary approvals from authorities in the People’s Republic of China who monitor where offshore investments are made. YZC is seen as a model for other Chinese investments in the resource sector, so its development and success observed closely.”

Since Chinese authorities approved the JDC/NWII purchase of YZC, three additional Chinese companies (along with one from Canada) have come forward and invested in the company, so it looks like the international owners like the progress and opportunity for growth they see in North America.