It seems like a bear’s age since Newmont Mining pulled a 1,040-ft hole averaging 0.495 oz gold per ton on its Post deposit in Nevada, but it’s really been less than a year. It’s been a year that would just as soon be forgotten in the stock markets of the nation, but it has certainly been an eventful year.
That Newmont drill hole, an explosive rate of growth in gold production from “the Silver State” and American Barrick’s 10-million-ounce increase of in situ gold reserves largely due to its Goldstrike deposit are probably enough to tag 1988 as the year that Nevada came into its own. Newmont’s been churning out gold from the Carlin area of the state for more than 20 years, but only this year did the true significance of the area begin to be realized. Now Carlin is seen as a potential rival to South Africa for gold output.
It wasn’t all good news in the industry, however. A number of mines fell short of expectations leaving their owners poorer but probably wiser. Tartan Lake, Ketza River, Golden Rose and Mount Skukum come to mind, but there were others. Rio Algom managed to buy back the East Kemptville tin mine in Nova Scotia from the very bank that had repossessed it from Rio when it looked like the mine was going to be a money loser.
Canada’s mining industry also lost some individuals who had made enormous contributions. Stephen Roman, Murdoch Mosher, Percy Finlay and Thomas Crandell were among those who died in 1988. Having enriched us during their lives, their absence leaves the industry much diminished.
Several developments in 1988 were welcomed by the industry. The mandate given the federal government of Brian Mulroney to proceed with the free trade agreement was greeted with a collective sigh of relief from the mining industry. With little to gain but much to lose, mining companies were reassured when Canada’s voters endorsed the export oriented premise of the agreement.
For the junior companies there was also good news. While the federal government refused to maintain the Mineral Exploration Depletion Allowance, a tax measure that made the existing flow-through financing mechanism so popular, it did keep flow- through alive by offering a system of grants as compensation. The new program takes effect in 1989, so how successful it will be has yet to be determined.
Most encouraging in 1988 was probably the healthy prices for base metals. Copper, nickel and zinc prices all performed much better in 1988 than anyone expected. Gold has hung in above the $400(US) level virtually all year. Only platinum closed the year on a down note thanks to the Ford Motor Company’s announcement that it has found a replacement for platinum in automobiles’ catalytic convertors.
The nickel price coincided with two significant events related to that commodity. Falconbridge began sinking a shaft at its Lindsley project in the Sudbury, Ont., area where drilling had indicated a significant nickel-platinum deposit and Hudson Bay Mining & Smelting opened the Namew Lake nickel mine in Manitoba, the first underground nickel mine to open in more than a decade.
This was also the year when diamonds and tailings dumps were big news. A De Beers subsidiary’s work in Saskatchewan exploring for diamonds led to a staking rush while Eastmaque Gold Mines became the first in Canada to put a mine tailings reclamation project into commercial production.
In the world of gold, the lawsuit that never seems to end between LAC Minerals and Corona Corp. over the Page-Williams mine at Hemlo made it to the Supreme Court of Canada. When that court makes its decision — and no one knows when that will be — the decision will be final.
The year saw some significant corporate manoeuverings, too. Falconbridge managed to buy the 25% control block of its own shares held by Placer Dome for $960 million only to watch as Noranda bought 20% of Falconbridge on the open market. Inco managed to have its “poison pill” approved by shareholders although the courts have not had the last word on that.
And finally, in exploration, the Iskut River area of northwestern British Columbia and the Mishibishu Lake area in Ontario were the exploration hot spots in 1988.
What surprises are ahead for 1989? Only time will tell.
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