It took a magnifying glass to learn Steep Rock’s royalty

Promoters are a necessary part of this business of mining. There are good ones and bad — and all shades between.

One of the best had to be Joe Errington, founder and developer of Little Long Lac Gold Mines. And what a job he did. That initial stock offering, made in 1933 at 25 cents, was heavily oversubscribed. He put down a 400- ft. shaft and built a 150-ton mill for $1 million within a year. Furthermore, it turned out more than $1 million its first year (half profit) from which it paid an initial 10 cents dividend. It was a good mine, starting a whole new gold camp at Geraldton that saw seven producers.

A big name and highly regarded, promotion was always in his blood. On one of his annual visits, he came up to the engineering office where I was working. Smoking a big cigar, he was accompanied by two well- dressed New York bankers who wanted to see some of our assay plans.

“What level, Mr. Errington?” I asked.

“Oh, it doesn’t matter. Let’s see the 4th,” he casually replied to my surprise — surprise because that level had long since been mined out and backfilled, and we were mining down around the 15th at that time. It just so happened that there was a dragfold in the vein around the 4th level which made for much greater mining widths grading well above mine average (about 40 ft. grading 0.6 oz.).

Basking in his Little Long Lac-MacLeod Cockshutt success, Joe went on to promote Kenricia Gold Mines near Kenora, Ont. Again, that issue was heavily oversubscribed. Again, he built a mill in jigtime (mostly with his own money) but this one proved a bitter disappointment.

To placate disgruntled shareholders, he offered them first rights to subscribe to his most successful promotion — Steep Rock Iron Mines at $1 per share in 1939. “We recognize that we are entrusted with one of the great metal deposits of the British Empire . . . . The emergence of war makes our task a national and urgent duty,” he said enthusiastically.

Indeed the Steep Rock saga was one of the boldest engineering feats in the annals of Canadian mining. He raised $20 million to bring it into production at a rate of two million tons per year.

He died in 1942 before that operation reached its stride, turning the reins of both Little Long Lac and Steep Rock over to another great financier, General D.M. Hogarth. His son, R.M. “Dick” Hogarth, sits on the boards of half a dozen mining companies today.

The late M.S.”Pop” Fotheringham, who joined Steep Rock at the start of the project in 1938 as chief engineer and general superintendent, became president in 1950. As field engineer for The Northern Miner, I visited that operation twice a year for 15 years during its heyday.

I always ended those visits with a session with Pop, but could never pry out what royalty Caland Ore Co. (Inland Steel) was to pay Steep Rock. That was to become the company’s bread and butter. A joint press release at the time of the first royalty payment showed Fotheringham receiving the cheque. Using a strong magnifying glass, I was able to read the tonnage figure and per ton royalty on the cheque. He was absolutely flabbergasted when I phoned to congratulate him on the good deal he made, citing the exact figures. He made it abundantly clear the dire consequences if the figures were ever revealed.

Keeping that secret cemented a friendly relationship until, in reply to a query (T.N.M., Oct. 25/62) as to when Steep Rock might initiate dividends, we stated “dividends still appear to be a long way off,” pointing out the company was facing “continuing heavy capital expenditures, including a pelletizing plant.” Fotheringham was not pleased and announced an initial 20 cents dividend almost immediately. On my next trip to that operation, senior staff members suggested I not try to see “the boss.” And that stood for the next trip as well.