Editorial Hemlo case sets a high standard

The sheer size of the settlement — total ownership of the Williams gold mine at Hemlo, Ont., valued conservatively at between one and two billion dollars — the time required to settle the dispute and the involvement of the highest court in the land has intimidated the industry into thinking that only more lawyers can possibly protect one’s rights.

In fact, the decision emphatically states the very opposite. Certainly the large mining companies that tend to believe in their omnipotence will be humbled by the Supreme Court’s refusal to soften the blow to LAC Minerals. The court said the mine would have been Corona’s if LAC had not violated its position of trust: the only remedy was to hand the mine over to Corona. If LAC had been allowed to merely pay certain damages, the message would have been that violating that position of trust, while not quite on the up-and-up, could still prove to be quite profitable. For the smaller mining companies, and even for the explorationists in the field doing deals on behalf of larger companies, the message from the courts should be a relief. Yes, it’s still as important as ever to retain your receipts and cancelled cheques, to keep notes of meetings and conversations and a diary of daily work reports. But essentially, the court has said that fair dealings and common sense are enough to protect you.

The story of the Williams mine (Corona has chosen to drop the “Page” in Page-Williams) has been extraordinary from Day One. Not only had Mother Nature placed an inordinate amount of gold in that particular spot, but it was placed in such a way that makes mining it a relatively simple and straightforward matter.

Then there’s the story of the staking by prospectors John Larche and Donald McKinnon who split their multi-million- dollar interests in the Hemlo area on the basis of a handshake after meeting in the bush in the winter of 1979-80.

Even the mine development was remarkable for its speed (although not put into production as quickly as its next-door neighbor, the Golden Giant mine) and size — capable of hoisting 8,000 tons per day and likely to produce well over 600,000 oz of gold annually when it’s running on all cylinders.

But for all that, and after all the truckloads of court transcripts and evidence are put on the shelf, what the decision comes down to is a question of ethics in commercial dealings and what weight those ethics carry in a court of law.

To be sure, Corona and its management were not naive newcomers to the world of mining and high finance. Nor should LAC be seen as a company bent on cheating its partners. But LAC did bend the rules in this case, and that cost it dearly. It took confidential information from Corona, then turned around and used that information to acquire the Williams property from under Corona’s nose.

Many in the mining industry, concerned about the image the lawsuit projects for mining, are relieved the issue is settled. They would like to see the glare of public scrutiny pass on to other matters, preferably those in some other industry.

But the mining industry can take pride in this decision. The industry has consistently been at the forefront of major changes that society has demanded from the world of commerce. It is precisely because mining meets these challenges head on, before other business sectors even contemplate them, that the industry suffers from an image of being the worst offender.

For example, the mining industry had to tackle the issue of maintaining commercial viability while improving standards to protect the environment long before other industries felt the need to do so. It is meeting that challenge and, in doing so, is setting an example that will make it easier for other industries to follow.

Similarly in health and safety, the mining industry has developed into one of the safest enterprises in the country while other sectors have barely progressed past the standards of the nineteenth century.

The way the mining industry confronted the need to improve productivity in the 1980s is a model for other sectors, and other industries must shudder to think how they would compete in a truly global marketplace the way the mining industry must compete every day.

It is entirely fitting that this court decision, setting a higher standard of moral behavior in the world of commerce, should stem from developments in the mining industry. Once again, mining is blazing a trail, making the way easier for others to follow.

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