SOMBA K'E/YELLOWKNIFE - The companies behind two gold exploration projects near Yellowknife plan on significantly increasing their spending this winter thanks to the rising price of gold.

Val Pratico, chief geologist with Tyhee Development Corp., stands on the west side of a trench on the company's Yellowknife gold property, located 90 km north of the city. Buoyed by the strong price of gold, the company plans to spend more than five times its summer budget on a winter drilling campaign beginning in mid-January. - photo courtesy of Tyhee Development Corp.

Gold hit a record high of $1,201 an ounce last week; on Tuesday, it closed at $1,147 an ounce - all of which is music to the ears of Tyhee Development Corp. and Viking Gold Exploration Inc., which are developing gold projects 90 km north and 75 km northeast of Yellowknife, respectively.

"It's great that it's moving up," said David Webb, president and CEO of Tyhee. "The good new is it interests investors in us."

Tyhee recently revised its resource estimate for its Yellowknife gold project to 2.2 million ounces of gold from a previous estimate of 1.85 million ounces.

Now the company plans on spending fives times more on a "huge" winter diamond drilling campaign than it did this past summer, when it conducted $500,000 worth of drilling, said Webb.

Webb pegged the cost at $2.5 million and said the project will create work for about 12 people, most of them from Yellowknife.

"And that's just the winter," he said, hinting that next summer's drilling program may be even bigger.

Included in the cost of this winter's program is around $200,000 for a winter road going 50 km from the Prosperous Lake turnoff on the Ingraham Trail to the Clan Lake portion of the gold project.

"This year is a good example of where we only talked to the Yellowknife band initially (about building the road)," said Webb, referring to the Deton' Cho Corporation.

The results of the drilling, set to begin in mid-January, will go toward extending the project's eventual mine life, currently set at seven years, according to the project's preliminary assessment from July 2008.

Tyhee is now working on the pre-feasibility study for the $150 million mine, due for release within the next six months, said Webb.

Tyhee isn't the only company riding the wave of high gold prices.

Viking Gold, which acquired the Narrow Lake gold property - a very early-stage exploration project - in 2004, also plans to increase its spending this winter.

Last summer, the company spent $500,000 confirming that a portion of another company's gold project actually extends onto Narrow Lake.

Viking will double its investment to begin confirming the resource on this new find.

"We're in the process of raising it right now," said Robert Ginn, Viking president and CEO. "I'm just working up about a $1 million budget."

Drilling at the project - which has no resource estimate to report yet - is set to begin in late January.

"What we need to do now is ... measure the resource," said Ginn. "We're hoping that we'll have enough from this current planned drilling program. Maybe the world will take noticed and say, 'My Golly, things are pretty active up there.'"