SOMBA K'E/YELLOWKNIFE - While diamonds have taken a hit during the global economic slowdown, gold prices have been sitting pretty.

The price of gold stood at US $956 last week. The price of oil is down. And with mining and exploration companies spending less to keep their financial affairs in order, equipment is cheaper, creating a buyer's market for those companies that have managed to raise money and are willing to spend it.

All of which is music to the ears of David Webb, president and CEO of Tyhee Development Corp., which is developing the Yellowknife Gold Project 90 km north of Yellowknife.

"Things are just looking beautiful for us," said Webb, who added that the company has added 500,000 ounces of gold to the project's resource estimate, making for a current total of 1.847 million ounces of gold. "We're closer now than we were last year," he said.

Even though financial markets were poor, Tyhee was able to raise a total of $2.5 million this year.

More than half a million of that money is going to the company's summer exploration work, which has just begun.

"We're just mobilizing into Clan Lake right now," said Webb. "There's flights going in today. We'll be having a total of about eight people on Clan Lake and we'll have about that number of people at our main camp."

The drilling that will take place on-site will mostly serve to provide information for the company's submission of its final application for permits from the Mackenzie Valley Environmental Impact Review Board. At the request of the board, Tyhee will be drilling holes underground to determine the quality and quantity of water.

In addition, the program will also focus on determining the extent of gold at already discovered zones on the property.

"What we hope to do is find all kinds of mineralization and extensions of the existing zones," said Webb. "We're quite comfortable that will happen because we already have surface samples showing in other zones. But this program will find out how big those zones are."

As for the project's long-term timeline, provided the permitting process goes smoothly, construction of the possibly 10-year mine could begin in 2011.

"Production would start 12 to 18 months after construction starts," he said.

The Yellowknife Gold Project, which will begin as an open-pit mine before phasing underground as well, will have a mine life of at least seven years. Not even Con Mine and Giant Mine, both of which operated for far longer than seven years, had a reserve base of two million ounces.

"Webb said between 160 and 200 full-time workers will be needed to work the mine and double that number will be needed for actual construction of the mine."