Metallic Minerals (V.MMG) has a press release out today announcing an option agreement to acquire 36.4 square kilometres (“km2”) of mining rights along the Australia Creek drainage, a tributary to the Indian River, in the Klondike gold district near Dawson City, Yukon. In the same release Metallic announces that it has entered into a production royalty agreement for 2.4 kilometers of that property which will give Metallic a 12% royalty on gold produced.
This is an interesting departure from the Yukon tradition where hardrock and placer people seem to live in different worlds. Assuming that there is gold to be found in the Australia Creek claims, Metallic has devised a way to create a revenue stream from its land holdings without building a mine. Greg Johnson is quoted in the release as saying, “we see an opportunity to build a portfolio of production royalties from our holdings in the Klondike region, starting with this first one on Lower Australia Creek, and to increase the number of production royalties on the remaining large land position with additional experienced alluvial operators over time.”
It does not hurt that Bill Harris and his wife Susan Craig – respectively, Director and VP, Government and Community Relations of Metallic – are experienced and well respected placer miners. Local knowledge is critical when creating a new vehicle for extracting alluvial gold.