Profile TWO TESTERS

William Bondar and Malcolm Clegg chuckle about it now, but the time their Whitehorse assay lab mixed up separate core samples from a customer was really no laughing matter. The samples went into a drying oven in paper bags marked with identification numbers — a normal procedure for Bondar-Clegg & Co. Ltd., one of North America’s largest assaying and testing firms. But the oven was too hot, the bags burned and the lab was left with a mass of unidentifiable samples. What Bondar and Clegg did in response has helped make their company pre-eminent in the field of geochemical analysis and assaying. Silver Anniversary

“We very quickly got on the blower and told our client what we did and took full responsibility for it,” says Bondar. That meant picking up the tab for a geologist to go back out in the field by helicopter to resample the target area. “The client couldn’t believe we had offered to do that. Taking responsibility in such situations is the best marketing approach we’ve got,” Bondar says. It has become part of Bondar-Clegg’s corporate style and one reason why the firm has survived to celebrate its 25th anniversary this year.

“We realize we are a service organization. The old, trite statement about the customer always being right is one everybody hears. But we live by that and we believe it.” Or as Clegg puts it: “the client is God.” The two partners have used that philosophy and their accumulated expertise to fashion a company with almost 600 employees, 70% of whom are in Canada, with the rest in the U.S. Revenues are expected to double between 1985 and 1988. Because it is privately held, with Bondar and Clegg holding a controlling interest between them, the firm is not obligated to reveal its total sales figures. But it is estimated that Bondar-Clegg’s labs handle about 35% of the North American assaying business — a business which Bondar figures is worth roughly $75 million per year. (In other words, Bondar-Clegg does about $26 million in sales a year from its North American operations.) On top of that, the firm operates outside of North America, either on its own or through development contracts with the United Nations and the Canadian International Development Agency (cida).

Among Bondar-Clegg’s competitors in the assaying field are: Accurassay Laboratories, Barringer Magenta, Chemex Labs, Lakefield Research, and Technical Service Laboratories.

Three years ago, the firm moved into a new head office and lab in Gloucester, Ont., just east of Ottawa. Located in an industrial park, the new facility represents a $2.2-million investment. Other Canadian branches are in Val d’Or, Ste-Foy and Noranda, Que.; Vancouver, B.C.; and Whitehorse in the Yukon. The firm’s U.S. subsidiary operates in Nevada, Colorado, Montana, South Dakota and Minnesota.

“We get a lot of samples from African, South American and European countries — virtually from all over the world,” Bondar says. With North American sales “leveling off,” Bondar sees room for growth in Third World markets, especially Africa. They are in the process of re-negotiating a disputed contract with the West African government of Gabon for a mineral exploration and geological mapping program. If the deal goes through, Bondar-Clegg and a Toronto company involved in the joint venture “are looking at a $30-million project in the initial phase.”

But not all the firm’s international projects have been completely successful. In 1972, after three years of negotiations, Bondar-Clegg and two other Canadian companies landed a $30-million contract for a mineral evaluation and geological mapping program covering 60,000 sq km in Iran. By 1975, when most of the work had been completed, the political turmoil that would topple the Shah had exploded into riots, so the company had its employees leave the country, along with their reports, maps and data.

“We left in the spring of ’75 and the Shah left in the summer of ’75,” Clegg recalls. Since then, the new Iranian government has approached Bondar- Clegg several times with an offer to evaluate the material and honor the remaining contract. But there’s a catch, says Bondar “They want us to take all those maps and reports over to Iran so they can have a look at them. We said `thanks, but no thanks.'” He adds, “we left a bit of money on the table in that one.” Fellow Students

That they would someday spurn the advances of an Ayatollah’s agents was the farthest thing from the minds of Bondar and Clegg when they started the company in 1962. The two men had met a few years earlier in Labrador, where they were engaged in summer field work as Carleton University geology students. Both became convinced there was a future in geochemical analysis and assaying. They decided to jump into what was then a budding field in Canada. With a $5,000 bank loan, they bought a 14-ft trailer left over from an Ottawa alderman’s election campaign and set up shop in southern New Brunswick. Living in tents and running a lab out of the trailer, Exploration Services (as the firm was then called) earned about $25,000 that summer working on the busy Mount Pleasant base metals property.

“I had enough money to go back to school and Malcolm had enough to get married,” Bondar recalls, laughing. “We just took off from there.” Bondar became a part-time student, taking care of business while Clegg completed a degree in Master of Business Administration at the University of Western Ontario in London, Ont. They hauled the trailer back to Ottawa and parked it in Clegg’s backyard. It served as their lab and office until 1965 when the firm was incorporated under its current name and moved into its first building.

That same year, Bondar-Clegg made its first expansionary move, buying a 40-ft trailer (a spacious 26 ft longer than the first one) and moving it onto a site in New Brunswick. Going where the action is has always been an important part of the company’s business technique. “What we are doing is tracking nature’s pollution,” says Clegg. “Mother Earth puts her stuff out all over the place. What we do is track it down.” Bondar says getting data back to customers quickly is “quite critical.” American Customers

With that in mind, the firm branched out, first in Vancouver, where Bondar had worked before, then in Whitehorse. Both operations began work for U.S. customers, enabling Bondar- Clegg to quickly corner the Alaskan market. Business from U.S. customers turned out to be critical for the company, which saw exploration work in British Columbia drop off sharply following the election of a New Democratic Party government in 1972, Bondar says. They also focused their entrepreneurial eyes on opportunities south of the border.

“Vancouver was generating more and more work from the U.S. and the market was not being pursued by our Canadian competition,” he adds. “We saw the U.S. market as a long-term growth area and if we were going to serve it, we had to set up labs there.” And so they did, opening up their first facility in Denver, Colo., in 1978 and growing into four other states in carefully planned stages. In 1981, they diversified, establishing an instrument division in Ottawa to manufacture X-ray analysers. The computer-based systems were designed to monitor milling operations and allow refiners to improve on recovery rates and cut costs.

The Bondar-Clegg system was cheaper and outperformed the competing technology from Outokompu Oy, a large Finnish company which has become a world-leader in the field. But what Bondar and Clegg could not have foreseen was the recession, which hit with full force in 1982. “It really clobbered operating mines, especially base metal producers,” says Bondar. “It wasn’t a question of developing new mines; they were shutting down existing ones. So the market for our equipment just disappeared overnight.” They sold systems in Spain and Israel and to some Canadian producers, but the market had disappeared. The assets and technology were sold off in 1984. “We had a helluva good product but the timing killed us and we couldn’t stop the bleeding,” Bondar adds. The company lost $1 million before it was all
over.

Besides having dealt a mortal blow to their instrument division, the recession cut into Bondar-Clegg’s regular assaying and analysis business. With exploration work slowing to a trickle, the firm had to compete for a piece of a smaller pie, which has meant no price increases for the past three years. But with the modest economic recovery, business has picked up. For the past three months, the assay furnaces have been burning around the clock as the Ottawa lab works 24 hours a day, seven days a week. Business is Jumping

“Right now, we don’t have time to chase down new work,” Bondar says. “We’re swamped.” He expects a 10% jump in business next year along with a 10% price increase. The company has been spending about $1 million annually since 1981 in capital investments but is taking a cautious approach to any major expansion.

Both men are convinced that the metals market in North America is unlikely to grow significantly. “We think the market as it exists today is pretty mature, and in North America there isn’t a lot of room for much additional growth,” says Bondar. Clegg says the market is expanding now, “but in a couple of years that bubble could burst.” They say any further reduction in the flow-through share tax credit would kill the industry. “We’re dealing with a one-commodity market now and that’s precious metals,” says Bondar. Free trade with the U.S., if it becomes a reality, will have little effect on their business because data and samples currently flow unimpeded across the Canada-U.S. border.

As a result, the firm has already begun diversifying into related testing services in the environmental and agricultural fields. They hope to do more and more work in the area of water analysis, waste site studies and air-sampling. The firm is in the midst of one contract, worth $300,000 a year over three years, to measure contaminants in high-volume air-filters for the Ontario Ministry of the Environment. For the federal government, Bondar- Clegg has analysed mercury levels in fish, pcbs (polychlorinated biphenyls) in lake-bottom sediment and arsenic in human hair.

Bondar says environmental testing had a brief flowering in the early 1960s but died out because government enforcement measures were too weak. “Now the legislation is in place, the laws have teeth, and it is a growth industry. It could probably equal our mining-generated sales in as few as five years.” Agricultural work could take the form of soil-testing to help farmers make better use of fertilizers.

Along with diversification, the firm is pursuing mineral-related work in the Third World. “The growth has to be there because that’s where the chief producers are going to be and, as they build up and modernize the cities, that’s where the consumption will be. They are not going to go to fibre-optic technology right off the bat; they are going to have hard-wired telephone systems and that means they need copper,” Bondar says.

Managing a business as partners appears to come easily to the two men, whose friendship stretches back almost 30 years. When they first started, Clegg ran the administrative side while Bondar was responsible for the technical operations. Today Bondar takes care of marketing and day-to- day operations while Clegg handles financial controls and management and new business. However, Clegg says they learned long ago that one person had to have the final say. “Bill is the final decision-maker and we abide by that. We’ll sit and talk about it, and argue and fight on occasion, but Bill ultimately makes the final decision. You’ll always get a consolidated front out of this firm.” Different Personalities

United front or not, what has made the firm hum along is the fact that the partners are totally different personalities. Says Bondar: “I’m abrupt, impatient, impetuous. Malcolm sits back and counters some of that. But we agree on what the philosophy should be and what direction it should be taking.” The two men socialize together because they share the same group of friends, but both have families and separate pursuits.

Bondar, who will be 50 in February, lives in Gloucester, near the office, with his wife and son. His two daughters will both be getting married soon. He likes to downhill ski, wind-surf, fish and spend time at the cottage. Once a year, he returns to his hometown of Timmins to hunt with old friends. Clegg is equally active. He skis alpine slopes and cross-country, sails the Caribbean, and golfs. He married for the second time two years ago and has two sons from his first marriage. He lives in the Gatineau Hills, across the Ottawa River from the nation’s capitol. The two men have similar answers when asked what challenges them. For Clegg, it is finding new opportunities for the company. Bondar is driven by the same desire for company growth while maintaining the respect the firm has earned for its “technical capabilities and professional integrity.”

And while the company may find new success in other fields, it will never abandon its roots. Says Bondar: “We will always have a strong base in the mining industry. It’s what will have financed our growth in other areas and, quite frankly, that’s where my heart is.” William Hardy is a freelance writer based in Ottawa.