SOMBA K'E/YELLOWKNIFE - With gold selling at more than $1,300 an ounce, a potential gold mine is a sure thing in the eyes of investors, right?

William Dustow, a cook and medic, stands in the camp kitchen at Tyhee Development Corp.'s Yellowknife Gold Project, located 90 km north of Yellowknife. - photo courtesy of Tyhee Development Corp.

Not in the case of the Yellowknife Gold Project, says the president and CEO of Tyhee Development Corp.

Instead of riding the wave of optimism created by high gold prices, "We're riding the trough, is what we're doing," said Dave Webb.

"Although the gold price is hitting near-record highs every month it seems this year, our share price plunged to a near-record low in September."

In Webb's eyes, it's a function of where the company's gold property sits.

"If you're in the Northwest Territories, you're deemed to be a basket case. We hear this from the investors," said Webb.

"Industry knows that you cannot permit things easily in the NWT. Time is money. If you tell people, 'It's a great resource, great operating conditions, a little bit remote, but it will take you two to five years longer than anywhere else to permit,' people just go away."

Tyhee is approximately five months away from submitting its developers assessment report (DAR), which will officially trigger the Mackenzie Valley Environmental Impact Review Board's environmental assessment of the gold project.

Webb said he doesn't expect production from the Yellowknife Gold Project to start before 2013, which is why the company is hesitant to revise its DAR to include the most recently discovered gold zone on the property.

"...if we said, 'Here's another ore body; let's continue the work and include this,' we know for a fact it would start the process (again) at day one."

The gold project's preliminary feasibility study, released in July, predicted a mine life of seven and a half years, used a base case gold price of US$950 an ounce and estimated the cost to build the mine at $174 million.

Work on the bankable feasibility study has begun, albeit slowly, said Webb.

"Some of it requires expansion of resources. That's what we're doing."

Late last week, Tyhee raised $6.5 million by selling shares for 10 cents apiece. Part of that money is funding a late-year drilling program at the site, located 90 km north of Yellowknife.

Webb estimated the company will spend $4 million on additional drilling and other work related to the permitted process next year.

The Yellowknife Gold Project has 354,000 ounces of indicated gold, 34,000 ounces of which has moved up to the category of now probable reserves.

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