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Yukon Quest: True North Gems' Search for Coloured Gemstones
Canadian Diamonds, Summer 2004
Wengzynowski scans the ground around him. He finds more pieces of the mysterious, glassy rock. Slowly he becomes more and more certain. “Wow!” he says to himself “I think this is emerald!” Soon the helicopter comes to get Wengzynowski. He’s excited to come back and find more of the green rock. But by the next day the Pelly Mountains are covered in snow, marking the end of the exploration season.
So instead Wengzynowski calls his old professor, Lee Groat, at the University of British Columbia. The two met initially in Groat’s first foray into teaching a mineralogy class at the university, in the fall of 1989. They quickly became buddies based on their common interests: playing hockey, and exploring the geology of Yukon. Wengzynowski sends some of his green rocks to Groat, who examines them and comes up with an answer that sets Wengzynowski’s heart racing. The glassy rock is in fact emerald. It’s the first the green gemstone has ever been found in Yukon.
The 1998 discovery is welcome news in theYukon, where the economy is slow due to a decline in base metal mining. It’s also big news for Wengzynowski, a sixth generation Yukoner, who’s worked for the geological consultants Archer, Cathro & Associates Ltd. since he was a teenager. The discovery of emeralds is his biggest find to date and makes headlines around the world. And, finally, it is big news for a couple of friends who form a company, True North Gems, with the vision of becoming Canada’s largest producer of coloured gemstones. Wengzynowski’s emerald discovery is to be their first step.
When Wengzynowski found emerald in Yukon, he was exploring for Expatriate resources. But when he went to them with his gemstones, the company decided they’d rather keep their focus on the pursuit of base metals. That opened the door for Andrew Lee Smith, a former vice president of Canadian gold company Aurizon Mines Ltd., and his friend Bernard Gaboury, a gem stone cutter based in Nanaimo, B.C. In 2001, Smith (note—lee is his middle name) and Gaboury formed True North Gems when they entered into an option agreement with Expatriate for Wengzynowski’s Regal Ridge emerald site.
Most gem companies are private—many are family owned operations passed down through generations. But Smith decided to take his Vancouver-based company on a different route to raise money for exploration: he went public. True North Gems began trading on the TSX Venture Exchange on November 25, 2002. However, the company wasn’t content to have Canada’s only known stash of potentially commercially valuable emeralds in its hands: soon their assets would include a variety of gemstones that would make kings and queens jealous, including the mysterious blue beryl.
Right off the top, Smith ran into obstacles that had never been encountered before in Canada. He had difficulties putting together the IPO for True North Gems because emeralds weren’t defined in Canada’s tax laws. After several weeks of discussions with the Canada Revenue Agency and Natural Resources Canada, a definition was added to the regulations specifically for the emeralds at Regal Ridge.
True North Gems also had problems getting their experts recognized by the British Columbia Securities Commission, which regulates the trade of securities in the province. Even though True North Gems’ consultant William Rohtert is a gem stone expert and member of various international gemstone organizations, these groups were not recognized by the Commission and Rohtert had to apply for a special exemption to be able to author the company’s technical reports.
In 2002, True North spent its first full field season at Regal Ridge, which is located in a remote section of the Pelly Mountains, far from the road system. They used helicopter support while taking samples and processing them on site. “In our second full field season in 2003, we spent at least half our time and half our budget expanding the infrastructure,” says Smith. “We put in access roads and an airstrip. The camp was made up of just a couple of tents, so we built a temporary plywood structure that can house 30 people. In August, we started working underground, taking out and processing material.”
The company doesn’t want to sell rough gems—they plan to sell the emeralds themselves as a wholesaler or retailer. True North Gems has been sending samples of the emeralds to cutting factories around the world to test the results. They took some to a cutting facility in Nanaimo owned by Gaboury, who left True North but is still friends with his old business partner Smith. But True North Gems was disappointed with the results.
“So far, the material from Regal Ridge is all from close to the surface, from a weathered zone in an arctic environment,” says Smith. “The crystals tend to be fragile and frost-shattered. The Nanaimo experiments showed that this is not appropriate way to cut these stones at this time.”
Smith says True North received its first successful polishing test results from China, where both the polished stones and the pricing were better, and he’s still looking at other overseas operations. And after the 2004 and 2005 field seasons, Smith says he’ll be ready to make a decision about the future of Regal Ridge as a commercially viable mine.
In 2003, True North Gems contracted Archer Cathro to search for more gemstones in the Yukon. Wengzynowski, discoverer of True North’s emeralds, used Archer Cathro’s private Vancouver database to generate a list of potential sites. Of course, to call it a database is a bit of a stretch. Self after shelf of binders with scrawled notes made by employees on their various excursions to the North is hardly user-friendly. So Wengzynowski sat down, and after 500 hours of searching through binders came across a note from Doug Eaton, the current secretary-treasurer of Archer Cathro, about a strange blue mineral he’d found while searching for base metal and uranium in 1976. At the time, Eaton was only 100 kilometres northwest of True North’s Regal Ridge site.
The note captured Wengzynowski’s attention. He went to Eaton and asked about the 27-year-old find. Coincidentally, there sitting on a windowsill in Eaton’s house all these years, was a small sample of the blue rock. Wengzynowski brought the blue rock to his former professor and friend, Groat, at the University of British Columbia. Groat sampled the rock and determined it was a type of beryl, the family of transparent rocks that includes emerald and aquamarine, although it wasn’t clear just what type of beryl the rock was. Wengzynowski wasn’t sure what he had, but he thought it might be important. “We staked the property preemptively for True North gems based on what we found in the database, before someone else could,” he says. “Everyone knew we were looking, and many people were hoping to jump on the bandwagon.”
In the summer of 2003, Wengzynowski headed up to Yukon to investigate over 100 sites, including five that were already staked for True North. Groat, intrigued by what he’d seen in his lab, decided to follow his former student up and spent part of his sabbatical searching the Pelly Mountains. On July 13, while Groat was working alone, he found some fine blue needles in a rock that looked like aquamarine. “I got pineapple!” Groat exclaimed into a two-way radio he held. Wary of others prospectors overhearing their conversations, the two had come up with a code system for their finds. Pineapple meant they’d found beryl. “We had arranged to contact each other on our radios every two hours,” Groat recalls. “I found the beryl at 12:05pm, so I had to wait almost two hours. I was dying to talk to someone!”
“I’d never seen beryl that was so deep blue, so gorgeous,” Wengzynowski recalls. “We knew it was unique, but we didn’t know just how unique it was. We brought it to William Rohtert, the gemmologist who was acting as a consultant to True North in Whitehorse. We started getting excited when we saw this gemmologist getting all excited.”
“It was like nothing else I’d ever seen in all the world,” remembers Rohtert, who was hired as True North Gems’ Chief Operating Officer in March 2004. “It was like finding a new type of flower. It was beautiful.”
Although not unheard of, blue beryl is extremely rare. It’s been found in Pakistan, California and Brazil. But the beryl from Yukon appears to be the darkest blue that’s ever been found. Plus, some earlier types of the rock lost their blue when exposed to light, while True North’s retains its rich colour. Appropriately, the company named the new blue beryl property True Blue.
The increase of activity in Canadian coloured gemstone industry is good news for people like Duncan Parker, president of Canadian Gemmological Association. “Traditionally,” he says, “the gemstone industry in Canada has dealt almost exclusively with imported items. Normally, gemstones in Canada are found by single individuals who spend their summers finding a handful of specimens. It’s not an economic viability, but more of a gemmological curiosity. But now we’ve found diamonds, emeralds and blue beryl, and there are companies discovering sapphire in the Maritimes, in Newfoundland, in British Columbia. It’s very exciting that we are going to be producing domestic gem materials.”
Parker expects the interest in Canadian gemstones to keep growing. “The more people who find something, the more people will be out there looking,” he says. “A lot of geology students are saying ‘I know what I’m doing this summer. I’m going to the Rockies or somewhere where I have a good chance of finding something. I’m looking for the mother load of emeralds or topaz or whatever.”
In Yukon, government economist Scott Milton says the territory is very keen to see the Regal Ridge and True Blue properties develop into commercially producing mines. “The economy in Yukon in the last six to seven years has lagged behind the country as a whole because of the decline of base metal mining. We are very reliant on base metals, which are subject to large price swings, leading to corresponding boom and bust cycles in our economy. We would love to diversify our economy more to smooth out the highs and lows and create a more stable situation.”
Milton says Yukon is already seeing an upswing in gems exploration activities, and he would welcome secondary activities like cutting and processing of gemstones – if Regal Ridge and True Blue develop into productive mines.
While the odds of Regal Ridge moving ahead look good, True North Gems Chief Operating Officer William Rohtert says it’s still too early to talk about True Blue moving into being an active mine. “We’re in earliest stages right now,” he says. “We’ve found some beautiful specimens, but we have no inventory yet of gem grade stones, which would be required for women’s jewelry. We’re going back this season to look for bigger and better goods.”
As for Regal Ridge, Rohtert says: “The emeralds at the site are abundant, they’re widespread and they certainly are gem quality. We’ll make some decisions at the end of this season, but I have a feeling this will be our last year in the bush league.”
Although an emerald mine would bring economic spin-offs to Yukon, everyone agrees it would have a much smaller impact than the Northwest Territories’ diamond mines. Emerald operations tend to be much smaller, employ less people and have a shorter mine life. However, Rohtert says some parallels can be made with the Canadian diamond rush.
“We’re following the same footpath as Chuck Fipke and the Canadian diamond industry,” he explains. “Because of the high cost of exploration in north, nobody has looked for these things before. Now we are able to operate in Arctic better and cheaper.”
And Rohtert says when he gets to marketing the emeralds and blue beryl, he’ll use the template created by the Canadian diamond industry. “They will be a certified and branded Canadian product, just like the diamonds. We’ll use the same image –these gems are clean and conflict free. Commercial emerald buyers would much rather go to Vancouver to buy emeralds than the other countries which produce them, like Columbia, Afghanistan and Pakistan.”
But don’t expect True North Gems to be content with building their future on only one emerald and one blue beryl property. After all, an industry isn’t built on the back on only one or two finds. So True North has acquired another emerald site near Dryden, Ontario, and is actively exploring two Baffin Island properties to find sapphires in Nunavut. And in April the company went international, acquiring the Fiskenaesset Ruby Property in Greenland. “As time goes on, the more easily accessible deposits in southern countries are being exhausted,” Rohtert explains. That’s why True North Gems is positioning itself to be at the head of Canada’s next big gemstone rush.