Goldcorp Inc.’s proposed purchase of Kaminak Gold Corp. and its Coffee gold property is good for the territory, says the president of the Yukon Chamber of Mines.

Mike Burke said this morning he thinks one of the world’s largest gold producers is looking to invest $520 million to buy Kaminak so it can bring the Coffee property into production.

“I do not think they are buying it to sit on it,” he told the Star. “I do not see why they would.”

Burke said it’s quite typical for major mining companies like Goldcorp to purchase the interests of a junior company like Kaminak once the junior has proven a resource.

“And that is what they got with Kaminak,” he said.

Located on the west side of the Yukon River, the Coffee property lies 130 kilometres south of Dawson City.

The purchase arrangement still has to be approved by 66 2/3 per cent of Kaminak shareholders. The vote is scheduled to take place no later than July 14.

The arrangement was announced Thursday morning.

Since then, Kaminak shares have jumped in price from just under $2 a share to $2.52 by mid-morning today. Goldcorp shares were trading for $23.40 this morning.

Kaminak announced last week it will be spending $29 million on the Coffee project.

Most of the money will be spent preparing the project for the permitting stage, though there’s also $5 million for continued exploration and $6.2 million for engineering and pre-development work.

Company vice-president Tony Reda explained Thursday Kaminak is continuing on with its schedule of planned expenditures and will continue to do so until the purchase is finalized, if it is finalized.

In the announcement last week, Kaminak re-affirmed its goal of beginning construction in 2018 with production at the open pit operation commencing toward the end of 2019.

Goldcorp vice-president Brent Bergeron said Thursday from the company’s head office in Vancouver his company liked what it saw in the Coffee project. He said he doesn’t think Goldcorp would stray too far from Kaminak’s vision for the project.

Kaminak released a feasibility study in January indicating the Coffee proposal is favourable and economically viable.

Burke said the proposed purchase comes as there appears to be a upward shift in commodity prices, gold included.

“So companies like Goldcorp are looking for good assets.”

Burke said the Coffee project is not a complicated project.

It’s proposing to use standard and acceptable technology to recover the gold, the same process used by the Brewery Creek gold mine when it was in production in the late 1990s and early 2000s, he pointed out.

He said it’s rare to have a major mining company operating a mine in the territory.

“This is a world leader as far as gold mining goes, so to have a Goldcorp coming into the Yukon is very significant,” he said.

He said it adds credibility to the Yukon and its potential for gold mining.

Twenty million ounces of gold have come from the creeks and the placer mining industry over the years, but there’s always been a question of where all the other gold is, he said.

Brewery Creek, said Burke, was a rare example of a successful hardrock mine targeting gold.

The chamber president said there will be the naysayers regarding the Coffee project.

But to have this project go forward would be great for the Yukon, he insisted.

“For me, mining brought me to the Yukon, and I have been able to live here and raise a family here and have a relatively good life,” he said.

“So I kind of look forward for other people doing that.”