Articles

The Scramble for New Brunswick’s New Millions

A Bay Street promoter with a million dollars, a grizzled prospector, an abandoned iron mine, a “doodlebug” survey, a lucky strike — these elements touched off an explosion in the forests around Bathurst, N.B., and made trading history in the stock market

KEN JOHNSTONE April 15 1953
Articles

The Scramble for New Brunswick’s New Millions

A Bay Street promoter with a million dollars, a grizzled prospector, an abandoned iron mine, a “doodlebug” survey, a lucky strike — these elements touched off an explosion in the forests around Bathurst, N.B., and made trading history in the stock market

KEN JOHNSTONE April 15 1953

The Scramble for New Brunswick’s New Millions

A Bay Street promoter with a million dollars, a grizzled prospector, an abandoned iron mine, a “doodlebug” survey, a lucky strike — these elements touched off an explosion in the forests around Bathurst, N.B., and made trading history in the stock market

KEN JOHNSTONE

IT ALL STARTED with the appearance of the Northern Miner on the newsstands on Thursday morning, Jan. 15. Toronto’s Bay Street brokers on their way to offices which were just beginning to recover from an eight-month slump, Montreal’s St. James Street promoters, scanning a long overhung sky for a break in the mining weather, prospectors sadly inactive in I irkland Lake, Rouyn, and Val d’Or, all received their “Miners” about the same time and read them with startled interest.

NEW BRUNSWICK FIRED BY METALS FIND WITH BIG TONNAGE POSSIBILITIES ran the headline on the front page. No fewer than five news stories, an editorial and five maps were devoted to the description of what' the cautious and eminently respectable Miner evidently considered to be a major Canadian mining discovery. The find, made on the site of an old iron mine nineteen miles from Bathurst in northern New Brunswick, contained commercial deposits of zinc, lead, silver and copper, in addition to iron in impressive quantities. And the geology of the district indicated the strong possibility of other similar deposits in the area.

The news rang like a fire bell in Toronto and Montreal financial districts. By noon most of the newsboys in both cities had disposed of their entire week’s supply of the Northern Miner and the effect of the announcement was being felt both on the stock exchanges and in the offices of brokers and promoters.

Stock-exchange reaction started slowly at first, then mounted in force as the implications of the discovery became clearer and new companies moved into the picture. Within two weeks the Toronto exchange was to touch a new record high of twelve and a half million shares traded in a single day, most of the activity in penny stocks being associated with the Bathurst rush. One stock, New Larder U, moved from twenty-three cents to two dollars within a few days, and observers noted that much of the new speculative money was coming from office employees of stockbrokers and from New Brunswick. Trading posts on the exchange floor were besieged with buying orders in scenes reminiscent of the market’s palmiest days, and experienced “short” operators (brokers who specialize in selling stocks with the expectation of a drop in the market) were caught by the continuing strength of some of the more speculative issues.

The impact of the news on the market was paralleled by its impact on promoters, mining companies, engineers and prospectors. Longdistance calls from Toronto to Rouyn, Kirkland Lake, Cobalt, and Val d’Or set veteran prospectors in motion, packing their winter bush gear: sleeping bags, snowshoes, portable stoves, rubber footgear, coarse woolen socks, leather mitts, heavy bush pants, underwear, plaid flannel shirts, parkas with fur-tipped hoods.

In New Brunswick, and particularly in Bathurst, the news was received at first as too good to be true. The province has ranked hitherto as one of Canada’s poorest, almost unknown to mining and miners. It has little first-class farming land, its forest resources have been exploited almost to the limit, and its industries

—apart from pulp mills—have been mostly small.

Today, basically an old lumber town in t he middle of t he Chaleur Bay fishing coast, Bathurst is dominated by the sprawling sulphite-smelling mill of the Bathurst Power and Paper Company, its chief employer of labor. The town contained barely a thousand inhabitants until the late Angus McLean built his pulp mill after the First World War. This multiplied the population and added a peculiar fragrance to the atmosphere. Today a substantial proportion of the boxboard used in Canada

(employ d in cigarette cartons) as well as corrugated cardboard in quantity is made there. 'The George Eddy planing and woodworking mill is the largest in eastern Canada. The Northern Machine Works manufactures heavy construction equipment for shipment all over Canada. These three enterprises account for easily seventy-five percent of the employment supporting greater Bathurst’s twelve thousand population. 'Fliis winter, at mid-January, the unemployed figure for Gloucester County, of which Bathurst is the shiretown, stood at three thousand in a population of fifty-seven thousand.

Bathurst and New Brunswick had known of mining before, and unhappily. Hopes had been raised and dashed by such discoveries as the old iron mine, scene of the present discovery, which had been operated during both world wars when the need overcame the relatively poor quality of the iron ore. In each case the mine had closed down when the urgent need of ore ceased. Then there had been discoveries of zinc and copper, but the quantities had been disappointing; money had been raised and lost, and the mines never materialized. Manganese deposits had been discovered, only to be found too low in grade to justify mining. Oil had been discovered, but the wells weren’t major producers. Coal deposits are mined fairly extensively but the seams are thin and the coal has a high ash content.

It had been almost as a last hope that the New Brunswick government had decided three years ago to engage the geophysics division of the Geological Survey of Canada, a branch of the federal government, in making an aerial magnetometer survey of the region between Bathurst in the northeast and St. Stephen, southwest at the Maine border. Such a survey is capable of detecting rock formations which show a magnetic reaction to the instruments in the plane. Areas where these reactions are shown on the map are known as anomalies. Anomalies, when drilled, sometimes reveal iron ore. They sometimes also reveal sewer pipes.

Meanwhile, Pat Meahan, a Bathurst prospector who has been in on most of the great staking rushes of the last forty years, had been engaged by Matthew James Boylen, a Toronto mining executive, to act as a scout for a prospecting syndicate that Boylen had formed with a grubstake of a mere million dollars. This money had been raised largely in the United States, and Boylen had told his associates: “You probably won’t see a dime of this again.”

A lot of people thought, nevertheless, that Boylen’s record justified the risk. At forty-five, burly and with a thinning thatch, Jimmy Boylen already had an impressive list of discoveries to his credit. He got his first taste of prospecting at Larder Lake, Ont., when he was twelve, and he claims that he has been a prospector ever since. He followed most of the great rushes of the Twenties and Thirties—Rouyn, Red Lake, Sturgeon River, and the rest—but he didn’t get his first respectable stake until Quemont made its spectacular rise in the Forties. He had still retained the shares in Quemont which he had received for some mining claims when it was penny stock. After a rich ore body had been struck by drilling, Quemont jumped within a week from seventy-five cents to nine dollars, and is currently comfortably resting around the twenty-dollar mark, rated as “one of the big ones.” He also staked part of Eldona Mine, and did very well out of that. Boylen really moved into the mining-executive bracket when he became president of Anacon Lead Mines, then headed up United Lead and Zinc Mines, Montauban Mines, and Chibougamau Explorers. Altogether Boylen now has a controlling or substantial interest in about forty mines,, most of which he staked himself.

Boylen still manages to spend his summers in the field. Apart from the fact that prospectors get special income-tax concessions he retains a sentimental feeling for this link with his past. But, in Who’s Who in Canada, as a member of the Seigniory Club, the Engineers’ Club, the Granite Club, the Royal Canadian Yacht Club, mar-

ried, with three children and a home at 35 Kingsway Crescent in Toronto that is rated something of a showplace, he sounds more like a successful businessman.

Boylen originally appeared on the New Brunswick scene to investigate a property twenty-eight miles north of Bathurst. This had been turned up by his prospector, Pat Meahan, who also suggested that he investigate possibilities at the abandoned iron mine where there were surface traces of zinc and lead. The first venture was to result in the Keymet Mine, which is now being prepared for production on a modest ore body of zinc-lead-silver. At the same time that Meahan had mentioned the possibilities at the old iron mine, Boylen was being approached in Montreal by Eric Kippen, a Montreal broker who represented the group which still retained the iron concession. Kippen’s proposal that Boylen take over the property was supported by a map and a geological report by G. S. MacKenzie, professor at the University of New Brunswick and a summertime government geologist. MacKenzie advocated a series of drill holes in the vicinity of the old iron mine where the traces of zinc and lead had been noted.

In Came the Doodlebugs

Boylen agreed to take over the concession after promising to carry out a drilling program. His chief engineer, R. J. (Bob) Isaacs, and his associate, W. C. Ringsleben, neither of whom was overenthusiastic about the project, recommended an electrical survey be carried out as a further guide to drilling. There is great dispute between geologists and mining engineers on the merits of magnetometer and electrical surveys (old-timers call them all “doodlebugs” and claim that no major ore bodies have ever been located by their use), but it is generally agreed that while a magnetometer will reveal the presence of concentrations of magnetic minerals, such as iron, the electrical survey goes a step further by distinguishing massive sulphide deposits, often found in association with magnetic materials (as was the case here). It is the sulphide rocks which are most likely to contain commercial concentrations of base metals such as copper and zinc. However, the presence of sulphide rock is no guarantee that these sought-after metals co-exist with it, and drilling predicated by electrical surveys has often revealed nothing.

Boylen, in accordance with his agreement, began exploration of the property by the more thorough drilling method without waiting for the electrical survey. Eleven holes were put into the ground in the vicinity of the iron ore. All they revealed was more iron ore. At this point Boylen’s associates became restive: Nearly a hundred thousand dollars had been spent with no trace found underground of the zinclead mineralization which had been hinted at the surface.

Boylen was worried himself as, eventually, they went ahead with the electrical survey. Lines were cut through the heavy bush and the survey was made. It revealed an area which began about a thousand yards away from the main iron body and the instruments reacted strongly. The twelfth hole was spotted to intersect this new area. That fateful drill hole barely intersected the body but the oore came to the surface with the long-sought-after sulphide ore. Then, as successive holes were drilled over the area and greater and greater intersections of sulphides were made, the analysis came back from the assay office—the ore contained rich commercial quantities of zinc, lead and silver. Later holes were to reveal copper in commercial quantities. It dawned on Boylen and his associates that they had made a major mining find.

John C. Udd, one of Boylen’s closest associates, told me: “I had tried to

persuade him to give up. It looked to me as though we were just pouring money down a drain. All the rest of us felt the same way. But Boylen persisted. That is why the major credit for the find belongs to him.”

Boylen worked quickly, for he knew he could not hold the news back very long. In addition to the long powerful magnetic anomaly alongside which the ore body had been found, he staked another big anomaly to the east, reasoning that sulphides might be found in association with it also. Finally, when he had staked close to nine hundred claims, he gave thenews to the Northern Miner, and the rush was on. Meanwhile, with a crew of sixty men in the field he continued feverishly staking until his total reached the neighborhood of two thousand claims. Then, as big and important companies rushed on the scene, he did a landoffice business, turning over groups of claims for amounts ranging between twenty-five thousand and a hundred thousand dollars, nearly always retaining a fifteen-percent interest.

In this way he was able to assure that such solid groups as N. A. Timmins, New Jersey Zinc, Conwest Exploration, Leadridge Mining and Anacon Lead were well-placed on what became known as “Main Street.” At the same time he reserved excellent locations for companies in which he had a substantial financial interest, and arranged financing deals that would enable them to explore their holdings more thoroughly. Some of these were new companies, like Maritime Mining Corporation and Bathurst Mining Corporation, each with a half million in the treasury. Others, like Fab Metals and Nubar Mines were more or less dormant Boylen companies, which got a new lease of life in the deal. Fab Metals obtained three hundred thousand dollars and Nubar Mines, one hundred thousand. An early Boylen love, New Larder U Island Mines, gained the big anomaly to the east, together with nine hundred thousand dollars in the treasury and underwriting to the tune of five millions. It was these already incorporated companies which were the object of the first flush of market speculation. New Larder, which could have been bought at nine cents not long before the discovery, skyrocketed in a week to two dollars.

The main company was Brunswick Mining and Smelting Corporation, and Boylen proceeded slowly with it. A small offering of two hundred thousand shares was made on a subscription basis to the public, and it was oversubscribed five times at ten dollars a share. Boylen had to send back eight million dollars’ worth of buying orders. “It hurt,” he admitted. “But with two millions in the treasury we have ample funds to explore the ore body completely and to draw up our plans for production.”

The big rush hit Bathurst the week end of Jan. 17. Only two groups had been able to penetrate the fog of mystery with which Boylen had surrounded his operations for the previous four months. Allen Jeckell, Toronto mining engineer, had beaten the gun on behalf of the P. Harrison, Noranda, interests; and New Jersey Zinc Company had men staking in the bush when the vanguard of the first wave of prospectors engulfed Bathurst.

Then came Harry Isaacs, a softspoken prospector who sells mining equipment in off seasons. His brother, Bob Isaacs, Boylen’s chief engineer, had dropped not a single family hint in all that time, but Harry was able to make the mine site his headquarters as he organized staking crews on his own behalf and on the behalf of Boylen. Bill Plexman, twenty years a prospector at thirty-seven, came in from Montreal with his brother, the tall, spare and fabulous Tony, who scorns traditional prospector’s procedure and often travels the bush with only a pocketful of raisins and a bottle of pop to sustain him because he begrudges the time lost making tea. They came to stake for themselves and for a Toronto syndicate.

Hard-driving Henri Phillipon from Noranda, whose axe can clear a path through the densest bush as though by magic, arrived to stake for himself, as did the ascetic-looking Gus Kellar, whose knowledge of rock structure equals that of the best-schooled mining engineer, and diminutive Tony Fayolle, whose deceptive bush shuffle can walk the legs off men twenty years his junior. They had formed their own prospecting syndicate.

The efficient McDonough brothers arrived on behalf of Madsen Red Lake Mines and other companies of Joe McDonough. They decided that best staking prospects were to the west of the main show. Rapidly they assembled staking crews and, equipped with jeep and snowmobile loaded with camping equipment, disappeared into the snow-clad spruce. Red-faced broadshouldered Scotty MacLeod, representing MacLeod - Cockshutt Mines and Murdock-Mosher, staked to the south with his crews; Boylen’s staking had been lighter there. Father-and-son teams, the Kyles, appearing on behalf of O’Leary Malartic Mines, and the Sweets from Val d’Or, staking in their own behalf, were quickly in and out of Bathurst, bound for the staking areas.

Sleeping Bags in the Lobby

White - haired and slow - speaking George MacMillan, co-founder of the Prospectors and Developers Association, whose Violamac Mines has made him and his wife millionaires, came into town. His wife, Viola, one of the few women in the mining business, is current president of the Prospectors and Developers Association and George likes to hide behind her driving personality. But he couldn’t resist the lure of another big rush, and soon he was deep in deals with returning prospectors who had staked ground that he liked.

Bathurst’s three chief hotels were soon overflowing; first the Gloucester, then the Carleton, and finally the Royal. Prospectors clumped in, sleeping bags, snowshoes and duffel bags over their shoulders, stayed a day or so getting maps, licenses and grub, then headed into the bush as other newly arriving prospectors took over their rooms. Big blustering Harper Kent was not unhappy over this. He owns the three leading hotels, the rambling department store where most of the prospectors went for outfitting, and several other businesses.

But for most of the people of Bathurst the boom was something not quite to be believed. For some there was temporary employment as about two hundred prospectors engaged roughly the same number of axe-men to foi'm staking crews. They were happy to receive wages ranging from six to ten dollars a day. But the rush did not alter the unemployment figure substantially. A few taxi drivers reaped a harvest, charging as much as twenty-five dollars a day to drive prospectors to the bush in the morning and pick them up at night. But

most natives seemed to share the scepticism of the barber who told one prospector: “Ah, it’s all a slick trick

by some Toronto stockbroker.”

Only one local group really moved fast enough to stake choice ground. Headed by John Ferris, of Bathurst Power and Paper, they took advantage of the Christmas holiday to go out and stake thirty-four claims immediately north of New Larder U Island Mines, and then sold these claims to Porcupine Peninsular Gold Mines for a handsome profit. But most other local stakers were slow to move, and when they did move they knew neither how to choose good locations nor how to stake with the speed and skill of the veteran prospectors.

While cultivated land and incorporated townsites are protected from staking by. the provincial mining laws; in all other cases the mineral rights do not go with ownership of the surface land. So a farmer came into the Bathurst recording office one day and bought a staking license for ten dollars. “Now nobody can stake my woodlot,” he announced with satisfaction. He was mystified and angry when he was informed that he still had to go out and set up posts, pace off the distances, and blaze lines according to the law. Then he would have to register his claims and pay another dollar per claim for each that he had staked and wished to register. Finally, he would have to undertake exploration work or restake his claims the following year if he wished to keep them in good standing.

Then there was the woman who took out a license for ten claims and returned a few days later to have her claims registered; she learned that there had been a mix-up in the license numbers and that she would have to retrace her steps to alter the license numbers listed on some forty posts. “It’s all a bubble, anyway,” she declared with conviction, abandoning the venture on the spot.

The essence of fast staking is to get located on the map and then, oriented by a compass, to pace off the ten claims allowed on each license. Stakers usually work in teams; one man handles the compass and the other blazes the line with an axe. Each claim is 1,320 feet square, or an average of four hundred and fifty paces in each direction. At each corner a post is erected, or often the nearest tree is topped and squared off. Then the license number, the claim number, the name of the staker and the person for whom he is staking, the post number and the time and date are marked on each post. Each claim has four posts. A good team of stakers can worm their way through the bush in a reasonably straight line and never deviate more than a hundred feet from their objective. Usually they “block out” the outside lines of a group of ten claims and then return later to cut them up claim by claim, “cutting the lines.” In this manner, ten claims can be staked in two days by expert stakers, even in the New Brunswick woods, which many prospectors declared to be the worst they had ever encountered.

One group of prospectors told of meeting two old men with a rope which had been cut exactly sixty-six feet (one chain) in length. Using the rope, they were carefully marking off and computing their distance as they went. “I figure they might get one claim finished in about a week at that rate,” an experienced prospector said.

Another prospector came across a group of six would-be stakers in a violent argument. Two of their number had compasses. One compass was a ship’s compass, contained in a paper bag. The other was a big awkward box compass, which customarily has a wire attachment on the needle {jointing south as the needle points north. Half of the party held to the ship's compass which pointed unmistakably north. The other half contended that the wire in the box compass was pointing north, and that was in exactly the opposite direction. “1 didn't stay to find out how they settled it,” the prospector chuckled. “I think they’re still there.”

In spite of all the inevitable confusion of neophyte staking, the recording office at Bathurst reported no serious disputes after a month of hectic staking, and no mistakes that could not be ironed out. By that time more than a million acres of land, representing about twenty-five thousand claims, stretching from north of Bathurst to St. Stephen on the Maine border had been staked, and about two hundred stakers were still active. Most of the staking has been around the magnetic anomalies revealed by the government’s aerial survey.

Surface prospecting in the ordinary sense will have to wait until summer. Meanwhile, many of the prospectors who entered the rush on their own initiative have been selling their claims to Toronto and Montreal brokers and promoters. Companies like Brunswick Mining and Smelting and New Larder U Island Mines are continuing with drilling programs. Most of the other companies will probably conduct electrical surveys hoping to turn up sulphide zones before they embark on drilling programs. At least a dozen of these companies have already indicated firm plans, and others will try to raise funds for drilling by sale of stock. Only months, and more probably years, of financing and drilling will finally separate the good ones from the inevitable duds. If it’s certain that millions will be’made, it’s equally certain as in any mining rush -that millions will be lost.

But the pervading mood is one of optimism. Even Bathurst itself is recovering from its initial shock and scepticism and is preparing to deal with tue problems and benefits that a largescale mining development will undoubtedly bring to the town. Lumbering, nevertheless, has long been the economic basis of the town’s existence and there is a strong determination not to let the bird in hand suffer for those that seem to be in the bush.

The new mining projects will require considerable manpower, and there was some fear that there might be strong competition for workers. But, according to P. L. Chiasson, manager of the Unemployment Insurance Commission office at Bathurst, a large portion of Gloucester County’s labor force customarily leaves the province each spring seeking employment in Ontario, Quebec, and even in Newfoundland, returning home in early winter. He felt there would be no immediate manpower problem.

Bathurst is a quiet town and some of its people worry that hell-raising miners will disturb the peace. The occasional prospector, returning from a two-week staking session in the bush, gives vent f.o his high spirits in traditional style in the hotel and on the main street. But most of the prospectors agree that for ripsnorting wing-dings the Bathurst rush is a very tame affair, “ft’s a nice place, by gosh,” says Henri Phillipon. “Nobody feels like kicking up.”

The townfolk are more than curious to learn what the mine development has in store for them. When it was mooted that a civic reception should be given to the prominent mining executives who were involved in the new development, one local wag re-

marked: “We’re going to spend a thousand dollars to find out what that fellow Boylen intends to do with us.”

When I called on Boylen in his Bay Street office in Toronto both he and Isaacs, his chief engineer, seemed still a bit dazed by the discovery and by the public reaction to its announcement. Boylen was busy on three different phones apologizing to people who hadn’t received their allotments of stock. At this point the market had reached its highest frenzy. Porcupine Peninsular Mines had traded three million shares in a single day.

What does all this mean to the people of New Brunswick? As far as the stock-market phase is concerned, those who have taken part, in the big flurry stand the same chance as any other speculators; if the mines on which they have gambled fail to prove up when they are properly explored in the coming months they will probably lose their money. But so far as the discovery and exploration of Brunswick Mining and Smelting Corporation is et ncerned there seems no doubt at, this stage that, in the words of the Financial Post’s Gordon Grant, “A major mining project is now seen assured.”

Some Castles in the Air

Neither Isaacs nor Boylen is prepared to translate the strike into exact figures. It will take at least six months (jf further study and exploration, t hey say, before they can outline concrete plans. Only when they have an approximate idea of the total available tonnage can they determine the size of the operation; they claim they already know that they can mill five thousand tons a day for twenty years. How many people may find employment through the mine? Their own guess ranges from three thousand to five thousand.

But what about smelting? Eastern Canada has long stood in need of a zinc smelter. Today the concentrates of other zinc mines are shipped as far away as Belgium for smelting. The huge new tonnages uncovered at Bathurst make it likely that a smelter will be built somewhere in eastern Canada. It must be located close to a source of cheap power. Both Boylen and Isaacs feel that it may be po: sible to harness the huge coal deposits of Nova Scotia to steam power and plan a smelter near Bathurst. They intend to explore that possibility.

If a smelter is built in the area the sulphur will have to be recovered from the fumes to avoid damaging New Brunswick’s valuable forests. When this was done at Trail, B.C., the resulting sulphuric acid was combined with phosphates from the United States to develop a huge fertilizer business. New Brunswick’s Saint John County contains some of the continent’s largest deposits of limestone. At one time a six-million-dollar fertilizer project was planned to use these deposits, but the project fell through for lack of a cheap source of sulphuric acid. New Brunswick and Prince Edward Island are a large and ready market for fertilizer; eighty thousand acres of potato land demand a ton of fertilizer per year per acre.

Enticing castles can be built in the air, but only careful study will tell how solid they’ll be a year from now. Meanwhile Bathurst has formed an Industrial Committee to deal with immediate and long-range developments. But when Jimmy Boylen urges sceptical old E. G. Eddy, lumber baron and unofficial prime minister of Bathurst, to get busy and build apartments for the anticipated influx of miners, Eddy dryly replies: “You

build them. I’ll sell you the lumber.” *