Market booms triggered by intensity of exploration

Mining’s current slump once again testifies to the traditional cyclical nature of this feast or famine business, depending of course on the price of metals.

But stock markets are something else. Here, booms can come quickly and at any time, mostly related to actual mineral discoveries rather than swings in metal prices.

I have no particular theory to account for the frequency of these booms, other than that they seem to relate to the intensity of exploration. From experience and observations over the past 50 years, I recall at least five mining market booms I would classify as major, with a great many “boomlets.”

The big ones that sparked heavy staking and real market excitement spanning this period would have to include Jim Boylen’s Bathurst area base metal find (Brunswick Mining & Smelting), the Blind River uranium discovery of Franc Joubin, the British Columbia porphyry copper find of H.H. “Spud” Huestis that launched the Highland Valley boom, Texas Gulf Sulphur’s fabulous massive sulphide discovery at Timmins (which I consider the grandaddy of them all), and more recently Murray Pezim’s remarkable gold find at Hemlo that quickly developed into a world class ore deposit. (Boylen, Joubin and Huestis have all been inducted into the Canadian Mining Hall of Fame).

Of course there have been many other important discoveries that instantly reflected market excitement. I especially recall the hoopla from Giant Yellowknife’s gold discovery and Pine Point’s lead-zinc development in the Northwest Territories that saw that stock soar from under $3 to over $70 (OTC), Campbell Red Lake which sparked a second Red Lake gold boom, Lake Dufault’s exciting drill hole at Noranda, the Geco base metal find at Manitouwadge, the discovery of Mattagami Lake Mines and more recently that outstanding deep copper-zinc-gold discovery of Aur Resources to name a few. But none match the excitement of an exploratory hole pulled by Texas Gulf in November 1963 in which Canadian geologist Walter Holyk played a lead role. The hole itself was camouflaged by field geologist Ken Darke and a decoy one put down (a dud, of course) to mislead any scouts who might be snooping around. The decoy hole also helped to squelch rumors, which started quickly, while the company acquired some adjoining ground.

Over 20,000 claims were staked by year end, with more than 140 junior mining companies moving into the area, making Timmins the undisputed exploration capital of Canada.

Trading on the Toronto Stock Exchange was truly hectic with 30-million-share days, something never before been seen in Canada. Day after day the ticker tape was running an hour late despite grouping of sales. One had to get up early to even get through the door of brokerage offices there. Just 31 months after discovery, the first train load of ore left that prize Kidd Creek mine for the 17-mile haul to a new 9,000-ton-per-day concentrator (since boosted to 12,000 tons). In addition to major output of both copper and zinc, this was the world’s biggest silver producer with significant outputs of cadmium, tin and lead — indeed one of the world’s richest orebodies.

Franc Joubin’s Elliot Lake uranium discovery in ’53 was an entirely different situation — low grade but immense tonnage implications — with skeptics galore. Staking was secret but on a massive scale.

However Joubin, one of the best known geologists in North America, was no promoter. So he teamed up with one of the best, the rags-to-riches Joe Hirshhorn who always had a hankering for long odds grassroots projects. They launched what became the largest uranium camp in the world, which by 1957 boasted 12 producing mines milling 34,000 tons of ore daily. Hirshhorn, who made a fortune for himself and his Preston East Dome Mines out of that big uranium play, sold his interest to Rio Tinto Zinc and became chairman and largest shareholder of Rio Algom Mines. On his death he willed 10,000 paintings and sculptures to the U.S. government which are on display in a Washington museum that bears his name.

Joubin, today still showing interest in anything related to mining, is unquestionably comfortably fixed.

Huestis’ Highland Valley copper discovery had something of the same ring. A self-made prospector who certainly didn’t lack patience and enthusiasm, he had to overcome every conceivable obstacle before his 35-year dream became reality. I well remember his storming into The Northern Miner editorial office with a packsack full of rocks in a rather futile attempt to whip up enthusiasm. The copper-molybdenite values were far lower than anything being mined at that time. But with a big assist of Japanese funding (first in Canada), his Bethlehem Copper Mines was launched. Its success led to other large low grade mines such as Lornex, Gibraltar and Endako, turning British Columbia’s Highland Valley into a world class mining camp.

Will there be more big new camps in this country? Not if we don’t go looking for them, a job that requires a lot of money.

Funding for virtually all the above discoveries was raised by promoters, now a dying breed, which the industry so badly needs.

It misses the likes of Brad Streit and Joe Hackett whose J. Bradley Streit & Co. made the biggest mine financing deals ever seen on the Toronto Stock Exchange. These included many of the companies in the fold of mine-finder Thayer Lindsley’s Ventures Ltd. (Later merged into Falconbridge Nickel). These included Opemiska Copper, Lake Dufault Mines and Giant Yellowknife Gold Mines, all highly successful operations.

Sure, there were scores of fly-by-night promoters pushing penny stocks in those heydays, but they have all but been driven out of business today. Unfortunately, so have the highly respected and highly successful ones like Randy Mills of Chibougamau fame, Pierre Beauchemin (Sullivan and East Sullivan Mines), Fred Connell (Conwest Exploration, Central Patricia, Cassiar Asbestos, United Keno Hill Mines) and Arthur White (Campbell Red Lake, New Dickenson).

With the costly hurdles being erected against the mining industry by all levels of government in this country today, especially in British Columbia and Ontario, exploration is at a very low ebb. What money is available, unfortunately, is being driven to foreign lands where it finds a warmer reception and more lucrative hunting grounds.