Mining Gets Down to Bed Rock
LESLIE ROBERTS views the aftermath of mining-stock orgy and finds a basically sound mining industry
CANADA’S great mining-stock orgy is over. The gentlemen—the ladies—who gave up their jobs because it was so simple to become rich over night by playing Oompus Consolidated and Sunken Sucker Gold have gone back to work, or are looking for it. A number of brokers languish in the common gaols, while the donations of others to the public treasuries by way of fines have helped to keep down government deficits in a lean year. Simultaneously, while crown attorneys were going through the rhetoric of the clean-up, the bottom was falling out of the world’s base metal market, bringing share values of many of the producing companies and bona fide mines-in-the-making tumbling in sympathy. Here, you might say, is as pretty a picture of pessimism running wild as the unhappiest Jeremiah in the street could conjure. But no.
Something peculiarly healthy has been left behind. True, a great many citizens of Toronto, Montreal, Cedar Crossing and Ashville Centre have gone back to work, nursing serious pecuniary hangovers. True, the minestock board rooms which not long ago throbbed to the excited cries of the bull, the bear, and the everyday
“mooch” are closed or deserted. True, the values of shares in several of the great base metal producing companies are down by sixty and seventy per cent.
But there is still a mining industry.
An End to Moon Madness
NOW that the excitement is over, the fact remains that the deposits of gold, copper, nickel and other minerals which Nature buried undei the grass roots of the North and the East and the West have not been spirited away.
The period of moon madness is ended, that is all. The cure has been painful, but it has worked.
So staunchly has Canadian mining—actual mining— withstood the metal price depression and stock-market collapse that Honorable W. A. Gordon, Minister of Mines in the present Federal Cabinet, has been prompted to say:
“It is doubtful if any country has witnessed a greater
amount of mining progress during the year just closed than has Canada. Despite increased capital invested in expansion, most of the mining companies are able to show reasonable profits. Because of this creditable performance, the Canadian mining industry has served as the principal stabilizing influence on the business structure of the country.”
The pronouncement may strike the citizen who donated his savings to pay the printing bills for the gilded prospectus of some of the more flamboyant catand-dog mining schemes as out of line with his own version of the facts. Nevertheless mining, as such, emerges from the orgy of sham and deceit which characterized the height of the gambling boom with its character and reputation intact. We have rid ourselves of much that was undesirable and undeserving of the label which identified it with honest mining. The price of that phase has to be borne in public disillusionment and in public unwillingness to buy shares in companies not yet past the prospecting and exploration stages.
Once Canadians are given an opportunity to participate in new enterprises where there is proof that the cards have not been marked, they will be willing to invest in mine making again.
Briefly, this is the panorama of Canada’s mining world today, as visits to the camps of Northern Ontario and Quebec, and conversations with leaders in the industry, reveal it:
Gold Mines Still Prosperous
CANADA’S gold mines have never been in better case than they are at this time. During the past twenty years, with slight fluctuations, the Dominion’s gold output has shown steady progress, increasing from a value slightly under $10,000,000 in 1911 to $40,000,000 in 1929, and, according to the Dominion Bureau of Statistica, to $43,199,000 in 1930. Canada has been making its way steadily upward in competition with other gold-producing countries, until at this writing the Dominion has either passed or is on the verge of passing the United States, to become second only to the South African fields among the world producers. As a result of the energy with which gold mining is being carried on and the fact that gold is not subject to the price fluctuations which govern the markets for the base metals, conditions in the gold camps, such as Kirkland Lake and Timmins, are sound and prosperous. Continued increases in production are on the cards for existing gold mines. New mines will be developed and brought into production from time to time. No class of enterprise in the Dominion is on sounder footing than is the country’s gold mining.
The operations of mining companies whose ore bodies reveal only base metals do not stand on this high plane under current conditions, thanks to former world overproduction and the subsequent crash in prices. In certain cases the only sane course has been to discontinue operations and await improvement; a condition which, on its faee, may not seem to indicate virile, robustious health, but which nevertheless enables managements to set houses in order and to prepare for the day when better prices will make profitable operation possible. Our resources in base metals have not vanished. Markets and the purchasing power of people all over the world will increase again. New uses will be developed for our metals. Then prices will move upward, and the mines which nowadays are supervised by slim caretaking staffs will begin to hum as they did in the days when Santa Claus came down the chimney every morning as soon as the share tickers began their daily clatter.
Others among the base metal producers are not suffering these temporary misfortunes, however, because
of rich admixtures of gold running through their ores. In the case of the great operators, such as Noranda and International Nickel, the presence of precious metals in valuable quantity makes possible continued operations
at slightly under peak volume production, thus averting serious unemployment in communities which have grown up about the mines and the smelters, keeping the wheels of industry turning and the nation’s dollars in circulation.
That is the brief summary of current circumstances. There are, of course, other factors and other avenues, if one could explore every crosscut and drift. In the silver country about Cobalt the picture to be painted is not an optimistic one, but the causes there arise from the exhaustion of ore bodies as much as from the lowering of silver values. The Cobalt camp is on the way out, not in.
Among the nonmetallics there is asbestos, a commodity of which Canada produces the bulk of the world’s supply. Unfortunately the internal conditions of the industry have not been conducive to prosperity, even during the years of good business conditions. These are
points, however, which cannot be charged against stock markets or decline in world prices and which, therefore, have no direct association with the conditions at present prevailing in the fabric of the mining industry as a whole.
TF CANADIAN mining -*■ has suffered in any
particular quarter from the decline in metal prices on the one hand and from the aftermath of the market scandals on the other, it has been in the prospecting and exploration phases of development. When share speculations were at their height, scarcely a day passed
which did not see new companies floated with the announced purpose of exploring and bringing into production groups of mineral claims in half a hundred different sections of the country. This branch of mining work today, though not at a standstill, is greatly reduced in volume. Travelling through the fields of Northern Quebec and Ontario recently for MacLean’s, I saw scarcely a single property in the early stages of development that is being worked. In the Rouyn district Noranda is working full speed ahead, while one or two comparatively small producing mines with rich gold deposits are making great headway; though operations at the Amulet and Waite-Montgomery— copper properties—have been suspended awaiting better prices. But there are no prospectors to speak of in the bush behind Rouyn, which, two years ago, resounded to the clang of pick and the thunder of detonated explosives. In the old boom days money was poured into Rouyn like water through a spillway, but the flow has ceased. What is true of Rouyn is true of a score of camps across the North. Exploration work has been reduced to a minimum.
Here and there the large operating companies are conducting exploratory work, but the great tide of funds which poured from the pockets of an optimistic public—an amazing percentage of which failed to get within a hundred miles of any mineral property—has ceased. The bulk of such work today is being done by concerns which own and operate producing mines and which set aside sums of money each year to option and explore new discoveries.
There is a train which leaves Moreau Street Station
in Montreal every evening to wander here and there about the North country until its segments come to such various points of the compass as Cochrane on the West and Chicoutimi, in the Lake Saint John district, on the East. In the days when base metal prices were at the peak and when the mining market was on the boil there was no more colorful train in the Dominion than the Northbound 6.15 from Montreal. In its diner groups of consulting engineers from Montreal, Rouyn bound, talked with diamond drillers. Aviators returning to jumping-off places whence they would resume their flying operations into the new discovery camps ate a last “civilized” dinner for months to come. Resident managers of the highly-touted prospects in Duprat, Clericy and Montbray exchanged stories with old prospectors and asked for news of discoveries reported since they had travelled South. It was a mining man’s train. The traveller entered the North as he climbed the steps of his pullman, before its wheels whined their way out of the freight yards beyond the station.
I rode from Montreal into Rouyn on the 6.15 in
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December, sharing the Noranda sleeper with one other passenger, a machinery salesman bound for one of the power plants in the La Tuque district. To the best of my knowledge there was not a mining man of any sort on the train.
As we trundled down the branch into Rouyn, in the waning light of a winter’s afternoon, we saw the stops which used to be made at mileposts to allow passengers to disembark, and I fell to thinking of the men who would have been waiting there in the old days for mail and parcels to carry off to properties in the bush behind the railroad. But the milepost stops have Inen eut out, because there Is no one living in the country beyond the tracks, where two years ago streams of dollars from city and town investors were paying the bills of almost uncountable so-called mines-in-the-making, many of them sheer cats and dogs that were never worth the expenditure of a dollar beyond the little money required to discover that they were hopeless. The group of cabins called Cleriey, once a hive of bustle and human movement, spread itself like Goldsmith’s Deserted Village beside the right-of-way.
And so we came to journey’s end.
Noranda and Rouyn
rT*HE twin communities of Rouyn and Noranda offer the complete picture of the changed conditions in Northern Quebec. Noranda is not a mining camp now but an industrial community where a
modern hotel purveys rooms with bath and European plan fare, while radio programmes echo through the rotunda and guests sit about in easy-chairs behind the conventional potted palms beloved of the tavern operator. Taxis now whisk along the street en route to the station, and workmen march past with dinner pails as they go to punch time clocks in the smelter or to join their shifts underground at the Horne Mine.
A gap of open ground divorces the two towns; the one, Noranda, which lives on the production of the mine and the smelter; the other, Rouyn, which lives in the past when the boom was on, in the days of dance halls, painted ladies, professional gamblers and the assorted paraphernalia of a movie mining camp. The dance halls and the painted ladies are gone from Rouyn. There are shops now, and talkies, and a sign which urges the motorist to take a wide turn and keep to his own side of the road.
The twin towns offer the perfect exposition of circumstances in the mining world. Noranda owns one of the great mines of the country, the Horne, rich in copper and with gold running through its ores in quantities which make mining and smelting operations profitable, even during the present day of depressed copper prices. Elsewhere two smaller gold mines, Granada and Siscoe, are doing well, while in another corner of the field, production at Amulet and Waite-Ackerman-Montgomery, copper properties, has been suspended as a result of the low ebb
of the base metal price tide. Men from a hundred properties which have closed down to wait for better times, or else have abandoned ship, are to be found in Rouyn, many of them because they have not the price of transportation to other points of the mining compass.
Rouyn, town of the boomer and the prospector, has an atmosphere of half life in its streets, an air of waiting, not too hopefully, for something to happen.
Noranda, town of the miner who has rich ores to hoist to the surface, crush and smelt, is vitally and industriously alive.
Nowhere in the Dominion will you find comparison between the old circumstances of the boom and the new days of hardheaded getting down to business as it is portrayed in the twin towns at the end of the Taschereau-N oranda branch.
Noranda is one of the wonder shows of the North country. Based on the unassessable wealth of the Horne mine, a $6,000,000 smelting plant belches its smoke into the sharp Northern air above the underground workings, while down in Montreal a huge refining plant is under construction which, when completed, will add a new industry to Canada’s growing list and check the outflow to foreign lands of huge quantities of semi-processed material.
No one can tally the riches of Noranda’s mine. Among the early discoveries of the camp, Horne’s rich strike was the great factor in focussing public attention on the Rouyn district, though in early days there were vicissitudes
difficult to overcome until the true wealth of the property was seen and its promoters were able to secure finances ample for development. Since that time Noranda has never looked behind. It is true that share values went tumbling last year, in sympathy with the break of stock prices and the disappearance via the sellout route, of the mass of small investors, whose holdings are the principal bulwark of price support for any industrial security. Furthermore, Noranda’s last quarterly dividend was passed by the directors, an incident to which allusion will be made in a subsequent paragraph. But neither of these facts sheds any reflection on the value of the mine as a mine. On the contrary, new ore bodies are being discovered wherever one may turn.
New Copper Refinery
TRYING to appear inordinately wise, I asked Assistant General Manager Roscoe, as we pondered a mass of rich new ore recently added to the Horne’s riches, what letter of the alphabet had been set aside as a label for the new body of intermingled gold and copper.
“We’ve had to quit calling them by letters,” he said, “for the simple reason that we would soon have run out of any spare parts in the alphabet. So we call this ore body number twenty-one.”
I know of no better description that could be applied to the Horne. No one
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lean yet assess its value. Nature has so I disposed of her wealth on the shores of ; Lake Osisko as to give the owners of Noranda vast copper bodies to hold against the day when base metal prices will make copper worth mining for copper’s sake alone, while in other sectors of the mine other deposits have been uncovered which, because of their gold content, make mining a profitable operation under present conditions.
In an earlier paragraph reference was made to the passing of Noranda’s last dividend, and the remark made that this cannot be construed as having any bearing on the wealth of the mine and its subsidiary operations. Let me explain, in order that the reader who gauges all operations by the profits which accrue, may understand, in fairness to Noranda, that the bald statement is undisguised fact. Noranda is participating in the erection of a huge copper refinery in Montreal. Large sums have been drawn from the treasury to pay for the company’s share in its erection. All the copper being brought to the surface and smelted is being held in reserve as a nucleus of material for use when the refinery is ready to go into production, instead of being sold on the world market as a semi-perfect product. The cost of refinery erection is great. The cost of mining copper, smelting it, and holding it for the day when the refinery’s tanks will be filled is a second great charge. That cost must be borne out of capital and operations expenses. As a result Noranda today, in addition to bearing its share of construction costs of the new refinery with the other interests which have entered into the plan, is drawing heavily on its copper-gold bodies, marketing only its gold to carry operation costs, while copper is smelted and held for the opening of the refining branch on the St. Lawrence. Hence the directors, although they held in hand sufficient profits over the quarter year to pay dividend charges, felt it wise to place such monies in reserve rather than distribute them as profits.
To the lay mind of this examiner into conditions in the mining industry, such a plan has the earmarks of erudition and wisdom. It is a symbol of present-day conditions in Canada’s mineral industries, for these are the days of cold-blooded sanity. Mining has come down to bed rock.
Between journeys underground and visits to smelter and mill, I sat in the office of General Manager Ernest Hibbert and discussed with that practical gentleman conditions in the industry and in Canada as a whole, drawing from him corroboration of the words already spoken by Canada’s Minister of Mines, coupled with an optimistic examination of the future and its portents.
“These are hard days for our basic industries,” Hibbert said. “Agriculture and the forest products are going to have their troubles for some time to come, according to the newspapers and the experts. But that won’t apply to copper if we tackle our problems the right way and get around to making the finished product here in Canada, instead of shipping it abroad in half-finished form.
“Anybody who has any faith in this country’s future realizes that new industries are bound to come as our water power development goes ahead. Hence we are living in a country where a man can build for the future, not just for today. The job that has to be done in Canada is to provide facilities which will stop the flow of raw materials out of the country, so that our metals, for instance, will be carried to the finished stage in Canada and its finished products manufactured here. The cheap power and cheap transportation facilities of such regions as the
St. Lawrence shores will enable us to meet outside competitors on a peculiarly favorable basis in the world market. Then the country will come into its own.”
Relics of the Boom
'V\/HAT clearer picture can any Can-
** adian ask?
The reflection of this man Hibbert’s personality is found at Noranda in the orderly procedure and hard work which typify the mine, the mill and the smelter. Nothing sloppy or untidy can be seen above ground or below. Everywhere the life of the job marches in parade-ground fashion. Labor-saving, distance-saving and time-saving devices abound. Ore comes up to the surface. It is crushed and sent to the mill if it is of a certain class, or to the smelter if other qualities abound. Gravity, granted of the gods to mankind to aid him in his modern labors, is put to work so that surface operations begin at the peak and end at ground level. Hibbert even catches the dust from the smelter smokestack to throw its profits into the company’s bank account and build up new surpluses and profits.
Subsequently I talked with Noranda’s general manager about the boom days of Rouyn and the great era of speculation and gambling which marked the camp in the days of its youth. And this is what he said:
“Wherever there is mining activity there is always an atmosphere of enthusiasm and romance. It seems, too, that there is always a certain type of human being waiting to take advantage of mining excitement to put something over on the public. It isn’t up to me to talk about scandals and convictions, but I can’t help thinking that it is too bad the public had to be stripped of its cash before the business was checked.
“There isn’t anything the matter with speculation. That is the backbone of mine making, because you can’t make a mine unless you take a chance. But there is a great deal wrong with p-omotions in which the organizers skim all the gravy and hold out on the property. The man who is willing to take chances with his money deserves a break from the house.”
In that last sentence are words to match our best established proverbs.
The woods about Rouyn abound in derelicts which were never even mines-inthe-making but merely snappily promoted cats and dogs backed by pretty literature and strong sales talks over the telephones of Montreal and Toronto. The camp has come in with one wonder mine and five or six smaller pioperties of value. But in the hinterland you will find a hundred others which diew on the public purse for great sums, but which are North country cadavers today. Some of them were honest promotions which died from lack of minerals at depth or lack of funds. Others—a great many others—were simply stock flotations which played at mining as a side line because the promoter in his swagger office “outside” must make a show for his shareholders.
Hence you have the two towns, Noranda and Rouyn; the one a pulsing, industrialized community drawing on the riches of the earth and moving them forward to the finished product stages, the other the city of a hundred despairs, waiting for its luck to turn.
Rouyn’s luck will revive. New discoveries will be made in the future, but the days of the boomer and the sucker hunter are gone, for some time to come at least.
And so to Kirkland Lake.
Editor’s Note: In his next article Mr. Roberts will describe conditions in the mining fields of Northern Ontario.