MR EXPLORTATION Noranda Exploration’s John Harvey

At least twice a month, Harvey would fly to the west coast to meet with Richard Hughes and Frank Lang, the promoters behind both juniors The pair insisted on a fast-track project They clung to predictions by the Aden sisters, gold gurus who generated a lot of interest back then, that gold might explode in price to $2,000 or $3,000 an ounce “We wanted to catch it (the gold price rise),” Lang said in a recent interview So the bidders, who also included Corporation Falconbridge Copper (now Minnova, a Noranda family company), LAC Minerals and Esso Minerals, had to deliver not just a good dollar for an option, but a convincing argument that production wouldn’t be years off

Noranda won because of Harvey’s persistance and, according to Harvey, company lawyer John Ivany’s unlawyerlike haste in rendering into acceptable legalese a verbal agreement reached late one night between Ivany and Harvey, on the one side, and Hughes and Lang on the other Noranda also had a wild card that no one could beat — its Geco mill in Manitouwadge, only 50 km from Hemlo, which could process gold ore in a hurry A producing gold mine of at least 910 tonnes per day had to stand on the property within two years in order for Noranda to earn a 50% interest The senior also committed to buying shares and options of the juniors and paying cash for earlier exploration (As it turned out, Geco never entered the picture: Golden Giant processes its own ore )

For Noranda, Hemlo couldn’t immediately ease its financial burden; in fact, it cost money But it was money well spent “Noranda was, psychologically, in a bad position,” Lang recalls “Everybody was down on them and suddenly this glamor thing came along and changed the psychology of the whole organization ” Hemlo represented deliverance from the gloom of a severe base metals slump and provided a useful shield against Noranda’s legion of critics A long-time industry observer agrees “Everybody was talking about Noranda going broke As the losses continued, the betting was that Alf Powis (Noranda chairman and chief executive officer) wouldn’t last another 30 days ”

Harvey feels that, at the very least, Hemlo instantly rejuvenated a moribund exploration department “When I came in 1982, we had nothing past the delineation stage * * * We weren’t seeing the completion of the (normal exploration/development) cycle And that’s where the dessert is Hemlo did that It put us right into the pre- feasibility stage ” And to Harvey, the property was a no-lose situation “The numbers we used (to evaluate the project) said at the time that even if we didn’t find more ore it would be a mine, a small one, but still enough of a mine to get our money back ” At the time, Golden Sceptre and Goliath Gold were reporting, on rather scant drilling, a 2 3-million-tonne “geologic reserve” grading 8 5 g gold per tonne Subsequent Noranda drilling demonstrated lateral and down-dip extensions, which eventually led to the current proven and probable reserve (as of January, 1989) of 18 million tonnes averaging 10 85 g gold per tonne (19 8 million tons 0 38 oz) Today, Harvey also is president of Hemlo Gold Mines, which operates the Golden Giant mine He succeeded Ivany, now president of Prime Capital Corp

For Harvey, success must be sweet He was raised during tough economic times and in trying circumstances A relative, the husband of a cousin, was to provide the key link to mining Harvey was born between the world wars on a winter’s day early in 1936 in a Toronto that was still suffering through the Depression His father, a manager of a dry cleaning establishment, and his mother separated when Harvey was five Harvey says he was an industrious, if not brilliant, student

His first glimpse at exploration came at the age of 16 when he helped Dr Stanley Ward, the distant relative, with geophysical summer fieldwork After secondary school, he hounded Ward for a full-time job with Ward’s McPhar Geophysics That position had him evaluating properties all over North America It also staked him to a university degree In 1959, Harvey graduated from the University of New Brunswick with a bachelor of science The Noranda connection began before university but only became full- time after graduation when he joined Noranda subsidiary Aunor Gold Mines as mine geologist and chief engineer

These were not glory days for gold mining or exploration Faced with a fixed price of $35 (us) per oz, most of the nation’s gold miners limped along on the crutch of government payouts through the Emergency Gold Mining Assistance Act And there was precious little in the way of exploration In the couple of years he spent in Timmins with Aunor, Harvey saw only one exploration geologist set up shop This state of affairs blunted the ambitions of the young explorationist to the point that he contemplated studying mine engineering

But then came Kidd Creek The biggest single base metal discovery the country had seen since the Maritimes’ Brunswick find, Kidd Creek roused explorationists “With Kidd Creek, I got the bug I guess I was just destined to be an exploration geologist ” In 1964, he joined Cadesky Associates, run by promoter Lou Cadesky, the Murray Pezim of his day He stayed with Cadesky for two years, booked a one-year stint with Renzy Mines and then did something that seems, on the surface, curious — he abandoned the rock hunt for systems engineering at International Business Machines Corp (ibm) in 1966 “I went to ibm with the objective of ending up with the mines later on, working with the new computer technology ” Harvey might have been ahead of his time, but he says the ibm sojourn taught him to approach exploration far more systematically

He returned to the geologic fold in 1967 and for the next 15 years served as vice-president, exploration, for Mattagami Lake Mines, a Noranda affiliate that in 1982 merged with the major During his tenure at Mattagami, Harvey oversaw the Sturgeon Lake base metal discovery, which spawned Mattabi Lake mine, Lyon Lake and other smaller deposits along strike He also introduced a “bush bonus” to field personnel who showed exemplary efforts in the field Hemlo, however, is the showiest feather in his cap

But that find is history And explorationists are only as good as the latest find with which they are associated New sources of metal supply must be unearthed and, to Harvey, that means maintaining an unbroken exploration/development cycle — mining’s “wheel of fortune ” The cycle starts with moose pasture Properties with some promise are put through a delineation stage, where the dimensions of the potential orebody are outlined Then comes project development with definition drilling, underground work and metallurgy that might lead, with luck, to Stage 3,
the pre-feasibility work The third stage ultimately yields a go or no-go decision Before Harvey’s arrival, Noranda had erred in letting the wheel become seriously unbalanced, failing to find projects that matured into the later stages of the cycle

Says Harvey: “We’re generators of new sources of revenue for Noranda We either have to acquire or discover new mineral inventory ” But he doesn’t especially appreciate suggestions that Norex is strictly a mine- buyer and a bust at finding them “I used to get mad at comments like that,” he told The Northern Miner Magazine, “because they were true (up until Hemlo) Now, people who say that are just misinformed ” He argues that Norex can count more discoveries per dollar spent than most other major exploration firms Not all the company’s mineral discoveries (by his definition, those that show economic- grade mineralization) are currently economic, but the list includes Duck Pond in Newfoundland, Heath/Stratmat in New Brunswick, Isle Dieu near Matagami Lake in northwestern Quebec, Silidor near Rouyn/Noranda, Tundra in the Northwest Territories, and Black Pine in Idaho

Critics charge that if any exploration outfit should succeed it should be Noranda’s What other firm picks up as many as 360 grassroots projects in a year (1988), on its own spends at least $100 million on pure exploration, and fields 233 full-time and at least 200 contract personnel? All this money and manpower are mobilized on the level of a sophisticated continental guerrilla war North America is carved into four broad regions, which are further split into divisions (each with its own administrative centre), and then dissected into districts

At a glance, it seems almost too structured But according to Richard Nemis, president of Central Crude, a junior that’s dealt with Harvey over ground near Mishibishu, Ont , Hemlo Gold Mines and Noranda Exploration have successfully shed “the drag of bureacracy” normally plaguing big firms “It has now become a small company You certainly can deal with them one on one ” Of course, the majors, Noranda included, have warmed to the juniors ever since “easy dollars” became available to the small exploration firms from flow-through shares, Nemis concedes But personality still plays a big part in how the majors deal with the smaller outfits, he says

To Harvey, the key thing is creating projects “The biggest part of successful exploration are the projects generated at the district level In field personnel, we look for good project- generators Fieldwork is the most important thing Newcomers have to put that ahead of family life It’s that kind of dedication to fieldwork we look for ” (Harvey, whose first marriage collapsed, admits exploration can exact a price on the home front ) But somebody has to be in the field kick- starting the exploration/development cycle, the wheel of fortune, because ultimately, for the long-term players, it’s a numbers game Harvey calculates that every year Noranda requires about 360 grassroots plays Of those, maybe 60 will hint at economic mineralization After this “first smoke,” most of the projects will fail, however Such are the rules that nature has carved in stone

A consistent level of exploration funding year after year is also a must to maintain a balanced and full project portfolio, nature and luck notwithstanding The need for a consistent budget can be a bitter pill for corporate bean-counters to swallow, particularly when profits sour “Some people don’t like taking it because it’s costly,” says Harvey “But as bitter as it is, in mining, it is the pill that cures you ”

Nemis figures that Noranda will keep swallowing the pill as long as Harvey is running the exploration show “Can they say `no’ to the guy who brought them Hemlo?”

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