The future looks good for hard rock mining in the territory, though the drop in grass roots exploration is somewhat troubling.

Geologist Scott Castleman of the Yukon Geological Survey told the audience attending the annual Yukon Geoscience Forum this morning there are several good indicators pointing toward more mines coming on line in the Yukon.

Victoria Gold’s Eagle Gold Mine is in production, and the Minto Mine recently purchased by Pembridge Resources recommenced copper production last month.

Alexco Resource Corp. is looking to get back into production with its Keno Hill silver project.

And BMC Minerals is nearing the final stage of the permitting process for its Kudz Ze Kayah project while New Mount Gold Corp. is in the permitting process with its Coffee Creek gold project.

Golden Predator Mining is advancing work to recommence production at the Brewery Creek gold mine.

Castleman explained it’s expected expenditures this year by the hard rock industry will come in at around $409.8 million.

Of that, $241 million was spent on development in preparation for production, most of which was spent by Victoria Gold on getting its Eagle mine up and running, said the head of mineral services.

Castleman noted on the concerning side was the drop in exploration dollars, and particularly the decline in grass roots exploration activity.

Of the $103 million spent – $10 million less than last year – 71 per cent was spent on three major projects like the Newmont Goldcorp Coffee Creek project, he said.

Castleman said just over 10 projects spent more than a million each but most of the exploration work, about 50 projects, spent less than half of a million, and many of those were supported by financing from the Yukon Mineral Exploration Program.

Most of the downturn in exploration is related to companies having trouble in recent years raising investment dollars from the financial markets, he said.

Castleman pointed out there were 1,869 hard rock mineral claims staked to Nov. 13 of this year, down 66 per cent from last year, representing an 18-year low. By comparison, in the recent boom years, there were approximately 130,000 claims staked in 2011.

It’s the grass roots and early exploration work that feeds the industry of tomorrow, he said.

Meanwhile, Yukon Geological Survey geologist Jeff Bond told the audience the territory’s placer mining industry enjoyed success this year, particularly with the price of gold where it was.

Total production by 160 mining operations recorded is so far sitting at 75,228 ounces, up about 5,000 over last year with a total value of $116 million, he said.

Bond said there were a number of weeks this summer where people were able to cash in at nearly Cdn. $2,000 an ounce.

While the bulk of the placer gold flowed out of the Indian River region near Dawson as usual, total production in the region fell dramatically as two major placers shifted their focus to other regions, he said.

Bond pointed out the Indian River placer mines produced 34 per cent of the total production to date, down from 54 per cent last year.

As a result, the Klondike River region, the Mayo and Clear Creek region and the west Yukon region have increased their overall percentage of total production, he explained.

Bond noted with this year’s count so far, the amount of placer gold mined in the Yukon since 1886 is siting at 17,459,000 ounces.

Placer mines along the Indian River in the Indian River watershed produced the most gold, contributing 14,000 ounces or almost 20 per cent of the overall production.

In the Klondike River watershed, production along Hunker Creek topped out at 8,000 ounces while the Sixtymile River placer mines in the west Yukon region contributed 6,900.