Denison’s new captain keeps to father’s course

After 35 years at the helm of Toronto-based Denison Mines, Stephen B. Roman died recently leaving his huge energy-resource empire in the hands of his daughter, Helen Roman-Barber, an unproven quantity in the resource business.

But those who know her say the new chief executive officer of Denison and Roman Corp. is made of the same stern stuff as her father.

“She has his mannerisms and character,” said Mario Debastiani, a 30-year veteran of Denison’s uranium mining wing. “She’s tough like her old man, determined and, educated,” added Stan West Mining President Stan Holmes , who worked as Denison’s chief geologist in the mid-1950s.

When Roman Barber takes up her duties as head of the oil and uranium corporation, analysts say she will need all of those qualities to guide the company back to its former stature.

While Denison increased its profits to $27.2 million in 1987 compared with $18.8 million in 1986 and pared down its long-term debt by $120 million, analysts say that after four years in the doldrums, the company isn’t out of the woods quite yet.

Going into 1988, Denison is still carrying a long-term debt load of $305 million and the oil prices on which Denison’s oil and gas sectors are so dependent, aren’t expected to perk up in the short term. Statement issued

In the days following Roman’s death, the family remained secluded at its Unionville, Ont., home, but a statement issued by Roman-Barber provides some indication of the direction the company will take.

“If the Dension of tomorrow differs in any significant way from the Denison of today, it will be because I have implemented, not departed from the long-term strategy and plans of my father,” she said.

“We are proceeding with plans to evaluate and eventually develop the Midwest uranium deposit in northern Saskatchewan and to bring the Koongarra uranium property in Australia’s Northern Territory into production.”

The eldest of seven children, the 41-year-old former University of Paris student has been groomed to succeed her father since she was named a Denison director in 1973.

Equipped with a degree in international law, Roman-Barber became executive assistant to her father in 1976 and nine years later was named vice-chairman. “She’s a very capable lady who served as a student under Roman and was guided by good people like executive vice-president Charles Parmelee and President John Fowler,” said Dean Witter mining analyst Thomas Komlos. Oil prices

She succeeds Roman at a time when Denison’s fortunes rest largely with the price of oil.

“If OPEC manages to cut back on production, the price of oil could rise from $17(US) to $18 but it may take some time to achieve that,” said Davidson Institutional oil analyst Douglas Weber.

Oil and gas accounted for 63% of Denison’s 1987 operating earnings of $102.9 million and every $1(US) increase in the price of a barrel of oil adds $6 million to profit and $7.5 million in cash flow.

Since the average price of oil sold by Denison rose 24% from 1986 levels, the company’s oil and gas revenues increased to 176 million in 1987 compared with 167 million last year. In addition to operations in Europe, the Middle East and North America, Denison has added a 10% interest in the huge Vega project (28,000 bbl per day) off the coast of Sicily to its oil portfolio.

Meanwhile, Davidson Institutional mining analyst Ernest Nutter says investors should look for changes in the company’s operating style. “In the past Denison didn’t bother with a project unless it was a certain (large) size,” said Nutter.

For example a 50% interest in the huge Quintette Coal project at Peace River, B.C., has been a major drag on the company’s bottom line. The company wrote off its entire $240,739,000 investment in the project in late 1986. Coal contracts

As a result, if an arbitration hearing involving Quintette and Japanese steel industry executives who are attempting to renege on long- term coal contracts break down, a mine closure would have no financial effect on Denison.

“They need to have one of their mega-projects swing onside,” said Nutter. The Davidson analyst believes that any near-term upside potential lies with potash prices which almost doubled this year due to an anti-trust agreement involving Canadian producers.

The price of potash currently sold to the U.S. agricultural interests currently stands at around $77(US) per ton which augurs well for the Denison-Potacan Potash Co. (a partnership owned 60% by Denison and 40% by the Potash Co. of Canada).

The partnership was able to meet its production obligations outlined in financing agreements by mining 2.75 million tons in 1987. That represents an increase of 242,000 tons above 1986 levels.

With Roman-Barber in control, Komlos doesn’t expect to see any immediate changes at Denison. But others say, Roman will be a hard act to follow. Deal maker

Regarded as a tough deal maker who ruled with an iron fist, Roman brought his first uranium mine into production only three years after the first hole was drilled at Elliott Lake, Ont.

After beginning life as a 10,000- tpd operation, the mine is still in production today. “You can never replace leadership of that stature, said John Kostuik, president of Quintette Coal.

A deeply religious Roman Catholic, Roman was able to persuade the Pope (despite a heavy schedule) to visit the Cathedral of the Transfiguration during a visit to Toronto in 1984. Roman was chairman of the building committee and main benefactor of the Unionville project.

Despite being considered persona non grata behind the iron curtain, Roman travelled to visit his parents in Czechoslovakia during the cold war period in 1959.

“After paying off an airline pilot and a number of customs officers, he escaped to the west before police could catch up with hime,” Holmes recalls. “Roman was a courageous and determined man,” said Holmes. “But his daughter will do a good job.”