The Hunch that’ll pay off in Billions
They scoffed at Franc Joubin when he insisted Algoma was rich in uranium. But, after a secret staking rush that reads like fiction, his colossal finds are now sparking the world’s biggest uranium mines and his theories have started a stampede from coast to coast
IN MID-MAY 1953 a mysterious expedition took off from South Porcupine in northern Ontario. Its members were a dozen geologists and mining engineers, eighty prospectors and, of all people, several young lawyers. The planes carried more than fifty tents, as many geiger counters, a hundred axes and other bush gear and several tons of food.
The planes took off at irregular intervals and headed north—a touch of cloak-and-dagger designed to confuse the curious. Most of them made several flights. As soon as settled areas were left behind, they turned southwest on compass bearings that carried them two hundred and fifty miles into the Algoma country, midway between Sault Ste. Marie and Sudbury, just north of Lake Huron. Some of the parties landed on lakes within an outfielder’s throw of the CPR Soo Line and the hard-surfaced Trans-Canada highway.
But if anyone spotted low-ilying aircraft coming in from the north he paid them no heed. They might be carrying timber cruisers or a sportsman owner of a fishing camp in the back country on his first spring visit. So far as any local resident knew, all the mining people had given up on Algoma years before.
This was just the attitude the newcomers wanted to assure. Had they come in by regular channels-—over the CPR or the Trans-Canada—the area would have buzzed with rumor in twentyfour hours.
So began the fabulous Algoma staking rush, led by Franc Joubin, a scholarly bespectacled geologist of about forty, who looks as if he would be more at home on the campus than in the bush. Joubin, though never in the limelight, had been a respected consultant for many years.
What happened in Algoma has had repercussions clear around the globe. It is giving Canada—and possibly the world—its greatest uranium field and the largest mines on earth whose primary product
is the raw material of atomic energy.
Joubin’s expedition touched off the largest financing deal in the history of Canadian uranium mining and what has been called the largest single investment of British capital in any Canadian mining enterprise.
Just last month an enormous British holding company, Rio Tinto, arranged to put up $57,600,000 for Algom Uranium Mines, Ltd. The deal followed an Algom contract to deliver $206 millions’ worth of uranium to the government-owned Eldorado Mining and Refining Ltd. by 1961.
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The financing scheme brought in world financial giants, ranging from the Rothschilds to the owners of the Belgian uranium mines in the Congo.
Algoma has done much to change our theories on where to look for uranium. Previously, geologists had tended to confine their exploration to the rocks of northern Saskatchewan where Eldorado had brought in a major producer at Beaverlodge, just north of Lake Athabaska. Their theory was simple: the chances of finding new mines are likely to be best near an established winner.
Today our geological theorizing takes a new tack: uranium is where you find it. This thinking has pushed the search far afield. Strikes have been made in places as far apart as B. C. and New Brunswick, though a “strike,” of course, isn’t necessarily an assured mine. Drills are boring into the rocks near Oka, no more than twenty-five miles from downtown Montreal. There is activity near Seven Islands, the jumping-off place for the iron beds of Ungava and Labrador. Ontario’s Haliburton County, north of Belleville, has attracted some of the biggest operators in the business. An island in Lake Nipissing near North Bay and another in the Ottawa River have shared in the excitement. At a conservative estimate, a quarter of a billion dollars has gone into Canada’s search for and development of new uranium deposits since World War II.
Discovery of the fabulous Gunnar mine marked the first breakaway from the old theory. It lies in an area that most experts, including Eldorado’s, considered dead ground, though Eldorado’s Beaverlodge workings are only twenty miles away by air. Gunnar is Canada’s richest uranium mine in terms of dollar value per ton of ore—$38 average, with a total mine value of $125 millions for a property only partially explored and developed.
Now we are finding the makings of big mines throughout the country and much of the credit
goes to Joubin and his new theory. It may well lead us to replace the Belgian Congo as the world’s No. 1 source of uranium, the wonder mineral that is beginning to revolutionize man’s everyday life.
The story of the staking of Algoma—which sparked all this new activity—has a cloak-anddagger feel about it. Joubin’s prospecting parties tramped the Algoma bush for a month, following a Z-shaped geological formation. Wherever the geigers pinged, the surrounding ground was staked.
Each evening the stakers sat down with the lawyers they’d brought along and assigned to their principals the claims staked that day. This was a timesaving wrinkle that no one had thought of before. It eliminated days of legal paper work back in Toronto after the job in the bush finished.
They Touched off a Stampede
In four weeks, more than sixteen hundred mining claims were staked, some within half a mile of the highway and railroad, the most remote no more than twenty-five miles to the north. Yet nobody in the towns and villages of Algoma, nor in the mining fraternity “outside,” tumbled to what was afoot.
On the morning of July 11 the lawyers appeared at recording offices in various parts of Ontario as widely separated as Sudbury, Sault Ste. Marie, Timmins and Toronto. The bundles of papers they dropped on the mining recorders’ desks jammed the works as they had never been jammed before. One government official posted a sign urging anybody with claims to record to stuff his papers through the mail slot—he’d look after them later. The news touched off a chain reaction that topped such famous stampedes as Rouyn in the 1920s. By the end of August more than eight thousand claims had been staked in Algoma by people who hadn’t been in on the original expedition.
The Algoma story goes back to the turn of the century when prospectors first combed the country for base and precious metals, and it ran in fits and starts for forty years. None of them found anything of commercial value, but they left clues behind that were invaluable in the subsequent search for uranium. It was study of these clues, coupled to some brilliant deduction by Joubin, that produced the theory from which may well come the world’s greatest uranium field. In terms of tonnage, though not in ore grade, Algoma will have the greatest uranium mines on earth.
Joubin had been fussing around the region for years. “I kept blowing hot and cold, like a guy who can’t quite make up his mind to ask a girl to marry him,” he says. He read government reports. He studied geological maps. He tried repeatedly to persuade some of the biggest operators in North America to finance a thorough examination of the district. Always no dice.
He geigered the country north of Lake Huron. But when surface samples were studied they contained only feeble symptoms of radioactivity. Other geologists suggested he had been in contact with worthless material, probably thorium, but certainly not with uranium. Joubin deduced otherwise.
He believed the wear and tear of time had leached off the surface radioactivity and that if he could get down below the outcrops he would find the ore. That meant diamond drills and money —and Joubin didn’t have enough of the latter to pay for the former. Nonetheless he took a small party into the bush in May 1952 and staked thirty-six claims. Then, blowing cold again, he did nothing about Algoma for almost a year.
Joubin finally made up his mind during a business visit to England early in 1953. There he met colleagues with long experience on South Africa’s Rand, including Dr. C. F. Davidson, chief geologist of the Atomic Energy Division of Her
Canada’s uranium development brought millions from world financial giants
Majesty’s Geological Survey. From these talks he became intrigued by the similarity of the South African conglomerate to what he had seen north of Lake Huron. He studied samples in the British Museum. He returned to Canada determined to get the answers in Algoma, win or lose.
First he needed money, then drills. He got the money from Joseph Hirshhorn, a backer of long shots who had already backed him in developing the Rix, now a modest but successful producer in the Beaverlodge field. The old established mining companies still wanted no part of the deal. Their geologists scoffed at the notion of finding uranium in the Sudbury-Soo area. One of the nation’s biggest mining corpoi'ations, for example, had sent an exploration party into the field two or three years earlier. When its leader sent home for geigers they were refused on the ground that the instruments would distract the party from its original purpose—to look for gold and base metals.
But Hirshhorn was ready to bet thirty thousand dollars and Joubin headed north to drill his claims.
The first hole was started on April 6, 1953. The core was shipped to an assay office in Vancouver a few days later. Core followed core until fifteen had gone to the coast. But no reports came back. In exasperation Joubin finally phoned and was told that fire had wrecked the assayers’ laboratory. The cores were safe however, and if he could wait a few days he’d have all the answers in one packet. Joubin waited and “chewed my nails right down to the quick.”
On May 5 the morning mail brought a bulky package with the analyses of all Joubin’s drill cores. Every hole had clicked. Overnight Joubin and
Hirshhorn had become potential mine owners.
By noon they had decided on their staking bee to tie up the best ground in the district, the first operation of its scope in Canada of which there is any record. Speed was vital. Secrets have a way of going adrift in the world of mine finding. Certainly if they had moved men and equipment into the country from the highway the jig would have been up in a day. Their plan would cost a barrel of money and it must be raised posthaste.
By midafternoon they wei*e locked in a hotel suite with W. H. Bouck, a Toronto lawyer who is president of Preston East Dome, a dividendearning gold mine in the Porcupine that had a considerable kitty waiting for a promising exploration deal. By nightfall Preston was in as a partner and organization of the expedition was under way.
The results have been no less remarkable than some of the goings-on that preceded them. The original Joubin claims are now the Pronto mine, scheduled to mill a thousand tons of rock daily before the year is out, with a target of fifteen hundred after the plant has been run in. Its total output has been sold under firm contract until 1962 to Eldorado, the government’s chosen instrument for buying all the uranium Canada can produce.
Pronto’s reserves are classified information but it can be revealed that tonnage is reckoned in the millions and the grade is “commercial.” At Quirke and Elliott Lakes in the north and centre of the field, a Preston subsidiary, Algom Uranium, has developed two huge ore bodies that run to millions of tons. Each property will mill at least three thousand tons a day in its own concentration plant and one or the other will be the world’s greatest
uranium operation. (South Africa has larger mills but, on the Rand, uranium is a byproduct.)
The price tag for putting these two into operation may run to more than fifty millions but its sponsors expect to pay it off in six years of production. Other groups of claims staked during the expedition have been farmed out to such mining companies as Mclntyre-Porcupine and New Jersey Zinc. Still others have been optioned or sold to new companies. The staking bee has paid off a thousandfold in less than two years. Algoma may well come up with a half dozen major producers. Its discoveries have spurred the search from coast to coast.
When the search reached the settled areas of eastern Canada soiqe strange and hilarious incidents occurred. When, for example, a diamonddrilling company encountered strong geiger signals on an island in Lake Nipissing, off North Bay, Ont., pandemonium reigned in town. Townsfolk who didn’t have mining licenses rushed out to buy them and staked the business district and outlying residential areas. Business slowed to a crawl. One citizen decided that the most favorable area in which to find radioactive minerals must be on the far side of the city from his residence. He drove across town and sank claim stakes around the house and lawns of a friend who was away. On returning home, he found a party of stakers busy in his own back yard.
But the prize staking jumble occurred at Oka —where Trappist monks make the well-known cheese—shortly after the Molybdenum Corporation of America took down some important geiger readings last year. What
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happened came close to civil war.
Local residents, particularly the farmers, held strongly to the view that they owned their own meadows and that anyone invading them and driving claim stakes was trespassing. Stakes driven during the daylight hours were yanked out after dark. Dogs were set on busy prospectors. More than one farmer’s shotgun was loaded with buckshot or coarse salt. Appeals were made to the curé, to the mayor and to the notary, who could only tell his glowering visitors they didn’t own mining rights, but only held title to the surface and topsoil. The only happy man in the district was the j owner of a local roadhouse, where roisj tering Montrealers could take geiger I readings between drinks or while gliding around “the only radioactive dance floor in the world.”
But the most dismayed and disgruntled people in the area were the Trappist brothers in their monastery. Early in the rush a veteran Catholic mining man called on the superior’s secretary with an offer to stake the church’s property and turn the claims over to the order. Otherwise, he claimed, the black Protestants would be driving corner posts in the truck garden any day now. The good abbé was sceptical. Surely nobody would trespass on a cloistered brotherhood. The visitor continued to urge that he be allowed to stake right now. The abbé demurred. He would speak to the superior, however, and see what could be done. There the matter rested.
News for Ribbon Clerks
But the tempo of a staking rush and of a monastic life are poles apart. While the secretary waited for a favox'able opportunity to bxâng the problem to higher attention, the heathen swarmed over the monastery fence. To the brothers’ amazement, their buildings, gardens and fields were completely staked in one morning. Some time later the Quebec government exhumed a hoary statute that everyone had forgotten and banned further staking in the counties ax'ound Oka. But by then the damage had been done.
Such goings-on are not unrelated to the fact that uranium is a brand-new business. Until 1947 only the government could mine it. So no prospector looked for it and private geologists didn’t bother to study it. The gold and base-metal expert had to read and acquire field experience to gain knowledge of the techniques of finding and developing deposits.
This may be news to those who believe that a ribbon clerk with a geiger counter has just as much chance to stumble on the makings of a new mine as has an experienced prospector. But the fact is that no tyro has struck it rich in Canada. The closest anybody has come was when Johnny Nesbitt discovered radioactive outcrops close to Eldorado’s Beaverlodge several years ago. Nesbitt wasn’t really a novice, however. Lie was a bush pilot flying for Eldorado, to whom the ping of a geiger was no novelty. Besides, his strike still isn’t a producing mine.
One reason the search in Canada is not for the uninitiated is that we are looking for big ore bodies, not for rich little pockets that can be mined with two shovels and a wheelbarrow, as on the Colorado plateau in the United States. At the end of 1953 there were six hundred and twenty-five such
“mines” in the U. S., no more than fifteen of which had ore reserves in exceas of one hundred thousand tons. Charlie Steen’s highly touted Utex is the biggest thing found so far in the U. S. Its reserves are rated at six hundred thousand tons, or less than two years’ mill feed for a plant like Pronto’s. In Canada two governmentowned mines, at Beaverlodge and Great Bear Lake, and one small non-government operation, Hirshhorn’s and Joubin’s Rix, in Beaverlodge (it would be “big” in Colorado), are producing more uranium a year than the six hundred
and twenty-five south of the border.
We are now in undisputed possession of second place in the world uranium race and are creeping up on the Belgian Congo. When Gunnar and Pronto start producing uranium concentrates later this year and Preston’s two Algoma giants join them in 1956, Canadian uranium production will soar.
What’s more, our risk-capital ventures are being brought along without the government subsidies that know few bounds in the U. S. In Canada a corporation must find its own property, raise its own money, develop its
ground, build its surface plant and block out enough ore to guarantee long life before the government will even talk to it. If and when all these items add up to a mine, the owners are offered a firm contract for as much uranium as they can produce.
When the current Canadian boom levels out, we shall probably have from twelve to fifteen producers, nearly all of them large industries. Individually, each will have cost millions before a wheel turns in its mill. For example, it cost the government $25 millions to develop Beaverlodge, without counting
the four-year search that located it. The cost of putting Gunnar into production is reflected by a debenture issue of $19J^ millions, following the earlier sale of common stock. Pronto’s pre-production expenditures will be in excess of $7 millions. Preston’s two Algoma mines will have spent at least $40 millions before they deliver any uranium concentrate to Eldorado.
So we shall have spent a round one hundred million dollars to bring in five uranium mines since World War II. (The Rix was much less costly than the others, since it delivers raw ore to the nearby Beaverlodge mill.) At least as much has been spent on others now in various stages of development, a number of them promising prospects. More millions have been poured into properties that didn’t make the grade and have been abandoned for lack of uranium ore in commercial quantity and quality. We have indeed come a long way in a short time.
Much nonsense has been written about the most serious mineral search in Canadian history. We have had at least one staking rush that was almost spurious, in that it was organized for staking seven hundred and fifty-seven square miles in Saskatchewan abandoned by eaxdier stakers mainly because it was no good. Tall tales have been told about the “Polish princess” who turned prospector and about “pretty housewives” who have gone north to make a killing.
But don’t shy away from all px'ospectstage uranium developments. There must be grassroots exploration and promoters to raise money from the public to finance it. Otherwise, in five years, the industry would be static. But when a citizen buys into a company offering shares at low prices to raise enough money to drill its claims, he had better realize he is buying a lottery ticket. If the thing were an assured mine, the quotation would be in dollars, not dimes. Moreover, if his long shot folds, it doesn’t necessarily mean he has been trimmed but only that the uranium wasn’t there in sufficient quantity to make a profitable mine.
Was Eldorado’s Face Red?
It has been written that all Canada’s major uranium discoveries have stemmed from miracles. Yes and no. The really miraculous aspect of the first strike at Great Bear Lake in 1930 was that Gilbert LaBine, the discoverer, was one of a very small group of men in Canada who could recognize pitchblende.
If the discovery of the second government-owned mine at Beaverlodge was a miracle, it was a calculated one. Beaverlodge resulted from an intensive search for new deposits that began in 1943 and continued for almost four years before a strike was made. The hunt was based at the Eldorado mine at Great Bear just twenty miles south of the Arctic Circle. But that was for security reasons. Had it been based at Edmonton, the comings and goings of Eldorado’s fleet of aircraft would have attracted too much public attention; in the war years anything connected with uranium was as classified as a field marshal’s battle strategy.
The hunt fanned out into every mineralized part of the Northwest Territories. Finally it spilled into northern Saskatchewan in 1946 when two Eldorado men, Einar Nelson and Phil St. Louis, found the huge ore body that is the core of the Beaverlodge workings.
Algoma was a miracle in the sense that it bore out Franc Joubin’s unorthodox theories. Gunnar was another in respect to LaBine’s beliefs. It has
been said that Eldorado’s face was very red indeed when Al Zeemel found the Gunnar, years after LaBine’s strike. Nonsense. The government wanted risk capital to seek and develop deposits and was giving the venture operator every kind of encouragement short of financing in the hope that he would find new mines.
The real problem was to decide what price to pay for uranium to encourage capital to go looking for it. At first the government offered a figure slightly in excess of three dollars for a pound of concentrate containing ten percent U-308—that is uranium oxide. It wasn’t enough. The price was increased until a figure of $7.25 was set. Even this would not justify heavy investment in low-grade ore bodies, so Ottawa established a price-by-cost arrangement under which such discoveries as those in Algoma can be mined at a reasonable profit.
Can Colorado Keep Going?
What will happen when present government contracts terminate in 1962? Nobody knows. But an intelligent guess suggests that our supplies of uranium will remain under strict government control for many years to come. Moreover, the government has an obligation to the venture operator because, indirectly at least, it brought him into the business.
Today’s conditions, of course, cannot be permanent. The day will come when military effort will slacken and countries will be satisfied with the size of their weapon stockpiles. Then, common sense indicates, the North American uranium picture will look something like this:
Canada will be the source of most of the continent’s raw or partially refined material. The United States, which has spent billions on plant, will be the major processor. Even now uranium for our own use is shipped to the U. S. for the final refining process and the United States sells back to Canada the rods that activate our piles at Chalk River.
And what about all those holes in the Colorado plateau, so few of which could be mined on a competitive basis with Canadian uranium mines? Already the Atomic Energy Commission in Washington has announced that present U. S. uranium deposits will be exhausted by 1962. It is urging Congress to encourage more prospectors by extending the uranium purchase limit beyond its present expiry date in 1962. Jess Johnson, who heads up the AEC s raw materials division, predicts that the present boom—or demand for uranium —will last for at least twenty to thirty years, and that any setbacks in search and development of deposits will be very temporary.
Will the U. S. government go along with this idea or will it withdraw its support entirely and thus shut down all but a few mines below the border? This is anybody’s guess. But there are signs already of agitation in Washington to abandon subsidies and buy uranium in the cheapest market. If this agitation works, Canada will be in an even more enviable position than now.
By then, according to Dr. John Convey, head of the Technical Branch of the federal Department of Mines and Resources, Canada may well have gone out ahead of the Belgian Congo in uranium production. If not, we shall at least have secured the raw material of atomic energy for our continent for all the foreseeable future. Because of our geographical situation, low mining costs, the uncomplicated metallurgy of our deposits and—as in the case of Algoma—their easy accessibility, our
only competitor in a free uranium market could be the Belgian-owned mines. Such experts as W. J. Bennett, president of Eldorado, Gilbert. LaBine and Franc Joubin predict that even Congo competition could be overcome with ease.
Scientists and many big industrialists believe that the atomic revolution is here now. The future defies the imagination. John Jay Hopkins, president of General Dynamics, and head man of Canadair, says: “I foresee that the atomic revolution will transform not only power, travel, transport and com-
munications, but will revolutionize our economics, our social customs, our medicine, our finances, our politics and our biology.”
Canada is about to construct its first pilot plant for the manufacture of electricity from atomic energy and will undoubtedly go on from there to major projects operated by utilities corporations or by the provincial hydro commissions.
Even after the turbines are installed at Barnhart Island as part of the St. Lawrence Seaway project, Ontario will be facing a power shortage great
enough to threaten its industrial expansion. And the ultimate answer lies in the atom. Scientists at. Chalk River and in the National Research Council in Ottawa are working full time on the development of “peaceable” uses of the new energy.
We have tremendous resources of uranium, one pound of which (as the U-235 isotope) contains the power latent in 1,300 tons of coal, 360,000 gallons of gasoline, or 2,500,000 kilowatt hours of electricity. No matter what, the atomic revolution portends, Canada is sitting in a ringside seat, if