COVER

AGAINST THE WALL

CLIFFORD FRAME AIMS TO STAGE ANOTHER COMERACK

JOHN DALY April 19 1993
COVER

AGAINST THE WALL

CLIFFORD FRAME AIMS TO STAGE ANOTHER COMERACK

JOHN DALY April 19 1993

AGAINST THE WALL

COVER

CLIFFORD FRAME AIMS TO STAGE ANOTHER COMERACK

JOHN DALY

Clifford Frame is accustomed to people portraying him as a villain. But if that makes him angry, he holds his temper well. Seated behind his desk in his wood-panelled office in Toronto late last month, Frame listened patiently as three Maclean’s reporters peppered him with assertions that he has heard all too often: that he is a master at coaxing money and favors out of governments, that he should have known more about conditions in the Westray coal mine before it exploded last May and that his company, Curragh Inc., is on the verge of collapse. But that morning, two weeks before Curragh filed for temporary court protection from its creditors, the burly 59-year-old executive was putting on a very brave face indeed. “Oh we’re in horrible g shape,” he admitted with a smile. But § he added, “Failure is not even part of | the equation.” In fact, that day he § had time to worry about more per| sonal concerns. “My wife said, ‘Don’t g you use a swear word,’ ” said Frame, who is renowned for his colorful vocabulary. Later, before a photo session, he scanned the sleeves of his suit jacket and said jokingly, “She told me to check for dandruff.”

However compliant Frame is at home, as a businessman, he clearly revels in his image as a tough guy, as someone who can take on mining projects that no one else will touch and succeed. In his 37-year mining career he has chalked up more successes than many of his business rivals, only to suffer spectacular defeats that might have broken less ambitious executives. But now, at an age when his contemporaries contemplate retirement, Frame is attempting to rebuild his company—and his blackened reputation—from the ashes of last year’s fatal explosion.

Last week, he sounded upbeat in a telephone interview from his farm in Uxbridge, Ont., 90 km north of Toronto, where he had been watching his son Mervyn, 9, play in a hockey tournament. He was also relishing an apology to Curragh on the front page of the Good Friday edition of The Globe and Mail for allegations contained in a March 27 story. Still, by filing for protection from his creditors, he has taken a huge gamble. In effect, he is telling Ottawa and the governments of Nova Scotia and Yukon that they must provide Curragh with more financial aid or

it will have to cease operations and eliminate over 1,100 jobs.

For Frame, it is a typically audacious move, consistent with the drive and determination that he has displayed from an early age. Born on May 28, 1933, Frame grew up in Trail, B.C., 630 km east of Vancouver. As it has been for most of this century, life in Trail was dominated by two things: the giant Comineo Ltd. silver, lead and zinc smelter, and the town’s amateur hockey team, the Trail Smoke Eaters. Frame himself has been obsessed with both mining and hockey ever since. Starting at age 16, he worked in the Comineo smelter for three straight summers. At age 18, the New York Rangers offered Frame a chance to play for one of their farm teams. But he turned down the offer and enrolled in the mining engineering program at the University of British Columbia in Vancouver instead.

Hockey: By then, Frame was already shouldering more responsibilities than any of his contemporaries. The summer after he graduated from high school, Frame married Patricia Manning, daughter of Alberta’s longserving Social Credit premier, Ernest Manning. While studying and trying to raise

two young children, Frame also played hockey for the UBC Thunderbirds and served as president of the UBC Mining Engineers Society. “He made the rest of us look rather green and callow by comparison,” recalls Ralph Sultan, a classmate of Frame’s who later became chief economist of the Royal Bank of Canada, and who is now a Vancouver investment manager and a Curragh director.

But then as now, Frame also had a wild streak. On one occasion, Frame recalls, he was part of a group of engineers upset by an article written in the university newspaper by Allan Fotheringham that questioned their masculinity. The engineers kidnapped Fotheringham from a gymnasium and chained him to the Granville clock in downtown Vancouver.

When Frame graduated in 1956, he worked for Britannia Mines in British Columbia for a year before taking a job with Denison Mines Ltd., which was then building its first uranium mine in Elliot Lake, Ont., 140 km west of Sudbury. There, the mine’s manager made Frame a shift boss and, a few months later, a mine captain in charge of 150 men. “I was probably the youngest mine captain ever in

Ontario,” says Frame with obvious pride.

Over the years, Frame gained firsthand experience of the brutal physical realities and dangers of mining. In 1959, he accepted a job as a planning engineer with Inco Ltd., the nickel producer, and moved to Thompson, Man. Over the next decade, he helped develop half a dozen mines from scratch. He also experienced a mining tragedy in the family. In 1965, Frame’s younger brother Mervyn, 28, was killed underground in a mine near Trail— crushed between two mine cars filled with ore.

Although he was shaken by his brother’s death, Frame stayed in the mining business. In 1972, he left Inco for a job in Ireland, supervising the development of a lead-zinc mine on behalf of a group of local promoters.

It was there that he met his second wife, Catherine. Although Frame is of Scottish descent—Westray and his lead-zinc property in British Columbia, Stronsay, are named for islands in the Orkneys, the Scottish home of his mother’s ancestors— he calls himself a “sympathetic Irishman.” His company’s name, Curragh, is variously translated from the Gaelic as “marshy wasteland” and as coracle, the ancient Irish boat.

It is also the name of Ireland’s most famous racecourse, as Frame, who owns race horses, points out.

Heir: In 1975, Frame returned to Canada, to Denison Mines and to what looked like a very promising future. Company chairman Stephen Roman appointed Frame as executive vicepresident, in effect making frame his heir-apparent. By then, the Slovakianborn Roman was already a legend in the Canadian mining industry. As a stock promoter in the early 1950s, he acquired control of several uraniumrich properties in Northern Ontario.

Over the next two decades, Roman, who died in 1988, negotiated hugely profitable uranium contracts with both Ottawa and the Ontario government.

Frame took over as president of Denison in 1982. But he had little time to savor his success. He had already plunged the company into a massive government-backed megaproject that preceded his downfall: the Quintette coal mine in northeastern British Columbia. Denison invested $300 million in the huge open-pit mine, a group of 56 banks invested $700 million and the B.C. and federal government spent over $1 billion on roads, railways and other facilities to support it. The mine opened in 1982, and in an era of high energy prices, it looked promising. Indeed, Frame was selected Mining Man of the Year for 1982 by The Northern Miner weekly newspaper.

But coal prices began plummeting in 1983, and Denison had failed to negotiate a minimum price for the coal with its Japanese customers. Denison and the banks lost their investments. Roman and Frame split up in March, 1985. But, ever the promoter, Frame

defends Quintette to this day. “It’s been a tremendous thing for British Columbia,” he told Maclean’s, noting that rival Teck Corp. still operates a small coal mine on the site.

In any event, Frame did not dwell on his dismissal. As he told an interviewer somewhat graphically at the time, “I didn’t want to sit on the beach and pick my nose.” Two months after he left Denison, Frame formed Curragh with a group of investors that included several of his UBC classmates. The company quickly acquired control of the dor-

mant Faro zinc mine in the Yukon and the undeveloped lead and zinc deposit in northern British Columbia. In 1986, Frame reopened Faro, transforming Curragh almost overnight into one of the world’s largest lead and zinc producers. The following year, he became the first person to win the Mining Man of the Year award a second time.

To Frame, the reopening of the Yukon mine showed that he can come back from a defeat. “I started with zero in 1985 and opened one of the largest mines in the world,” he said. But he gets more defensive when discussing the role of governments in his comeback. Altogether, Curragh has received more than $3 million in cash from

Ottawa and the Yukon government and $20 million in indirect aid for its mines in the territory. Similarly, the federal and Nova Scotia governments have poured $94 million into Westray. Frame is unapologetic about the government funding. To him, it is a fact of economic life in Canada, the only way to stimulate activity in depressed regions. Said Frame: “How else can a junior mining company in this country get venture capital?” Frame also gets a little testy when discussing his political connections. One of his closest friends for the past 15 years has been Robert Coates, the former Nova Scotia MP, cabinet minister and Progressive Conservative party president who, as a lobbyist, laid much of the bureaucratic groundwork for Westray. But Frame is adamant that he exerted no undue influence in Ottawa. “I never did a hard sell,” he said. “I went in one day and told them what it would take to do it, do it or else.”

Letter: With some justification, Frame also dismisses the widespread misconception that he is a personal friend of Prime Minister Brian Mulroney. Frame has a 1988 letter from Mulroney hanging on his office wall that congratulates him on winning his second Mining Man of the Year Award. Mulroney praises Frame’s “leadership, energy and entrepreneurial spirit.” However, the two men have only met personally at a cocktail party in the early 1980s and at the memorial service for the 26 Westray miners killed last May.

But while Frame says that he only did what he had to do to get mining projects that governments wanted up and running, he also made some extremely lucrative personal financial arrangements with Curragh. However, much of his compensation % has been in the form of company £ stock. Last week, Curragh’s common shares, which traded as high as ° $10.63 each in 1990, closed at 25 cents on the Toronto Stock Exchange. But for the moment at least, Frame still lives in comfort. He commutes to Curragh’s offices every day from his 247-acre farm, where he lives with Catherine and Mervyn. Frame also has six older children from his first marriage. He keeps a photograph of Mervyn, with hockey star Wayne Gretzky, near his desk in his office. “He’s the one who keeps me young,” said Frame.

In his spare time, Frame helps tend to a herd of about 200 Black Angus cattle on his farm. “There’s no way I can retire. But if I do get out of the mining business some day, I’d like to have something to do,” Frame said. Even though he is trying desperately to postpone that day—and taking a fair amount of abuse while doing so—it may be approaching faster than he would like.

JOHN DALY