The Hemlo Court Case

I worked at the Williams Mine near Marathon Ontario from 1984 to 1991 and was lucky observe the Lac/Corona court case from the inside.  If you've ever driven Highway 17 North of Lake Superior you would have seen the Williams Headframe near the Manitouwadge turnoff.  It's still there, 40 years after David Bell first discovered gold veins in the highway rock cuts.

I won't get too deeply into the technical details of the case, but in brief, Corona sued Lac Minerals for using confidential information gained during a site visit to Corona's exploration project.  (I should note that when a junior company like Corona is looking for financing they will promote site visits where they disclose a lot of information not available to investors.)  Lac's misbehaviour was to purchase the Williams claims, adjacent to Corona's project after examining drill core and knowing that Corona was actively attempting to acquire those claims.  (Lac's behaviour was about as close to claim jumping as damn is to hell.) The case went all the way to the Supreme Court where the court decided 3/2 that Lac was in the wrong and had to return the property to Corona for the cost Lac had incurred to that point, which was about $210 million dollars.

The initial decision was handed down in 1986, on a Friday, after markets closed.  It caused pandemonium within Lac's Toronto headquarters (and at the mine) where the executive team were expecting vindication at best and loss of a portion of the mine at worst.  But it was worse than they expected..worse than their worst nightmares.  Judge Holland awarded the mine in total to Corona as compensation for Lac's misdemeanour.  Site personnel were stunned, wondering what would happen to us?  Did we still have jobs?  Would Corona show up and boot us out?  Our questions were answered by Harry Rutetzki, Lac's VP of Operations, who came to site the following Monday and met with everyone to calm the waters and provide what little information he could on the path forward in the near future.  Naturally he said Lac planned to appeal.  He offered reassurance that we would all remain in our jobs in the short term, which was reassuring for most of us who had purchased homes in Marathon and had bills to pay.  Eventually we learned that the mine would continue under Lac's management but that a trust would be set up with a  managing trio consisting of one Lac representative, one Corona and one independent to oversee and approve mine operations until the litigation was finally over.  I've forgotten who the Lac and Corona reps were but the independent person was Graham Farquarson, a highly respected mining engineer from Toronto who would eventually be involved in and expose the Bre Ex scam.  The "three wise men" as they became known to us would come to site every few months for a tour and an update, but otherwise they supported us, stayed out of local decisions and let us run the operation as best we could.

At the time of the first court decision the mine had been in production for roughly a year with ore coming from the open pit and from the "A" Zone underground.  I was responsible for "A" zone production.  The mill was processing about half its ultimate 6,000 tpd throughput with full production planned for 1988.  In the meantime a shaft was completed and off shaft development was occurring at high rates in order to begin production from the main "B" Zone orebody.  To support this we needed to spend large amounts of capital dollars for equipment and underground development.  It was up to the three wise men to approve our expenditures.  Lac had decided no further Lac treasury dollars would be spent, so we were forced to self finance from operating revenues.  Luckily the price of gold was good enough to fund the expansion but full production was delayed until late 1989.

In the interim all of the new owners wanted to visit their new property so we had plenty of visitors.  Since Teck had done the deal with Corona that Lac could have done when they first visited Corona, we saw a number of their executives.  Gordon Keevil (Teck) came with his beautiful wife.  Peter Steen, from Corona visited several times.  Peter eventually became the president of Lac shortly before it was consumed by Barrick but that was long after the court case.  Gil Leathley was manager at the Golden Giant mine but he left to work for Corona and was a frequent visitor.  Gil was a stand up guy who eventually wound up in San Francisco with Homestake.

In 1988 the Ontario Appeals Court upheld Judge Holland's original decision and we all thought the case was over.  Lac asked leave to appeal to the Supreme Court and to everyone's surprise they agreed to hear the case.  We still held out hope that Lac would prevail but the Supreme Court ruled 5/0 in Corona's favour on the issue of confidential information and 3/2 in favour of the remedy of returning the mine to Corona.  No one from Lac head office visited us to say good-bye.  Peter Allen, Lac President used the money from the court decision to buy Bond Gold, a purchase that attracted the attention of Peggy Witte, of Royal Oak, who made an offer to buy Lac.  But Barrick made a better offer, integrating Lac's operations into their own.  And Lac was no more.

By this time we knew that Teck/Corona had confidence in the mine staff and there were no plans to replace anyone except the General Manager, Paul Donaldson.  He was a long term Lac employee with retirement on his mind.  He stuck around long enough for his replacement to show up.  The replacement in the short term was Mike Lipkewich, Teck's VP of Operations.  Mike was a great guy to work with as I would learn during his months at the mine.  But he had other mines to take care of and eventually he hired Peter Rowlandson as our GM.

Looking back on that time I am grateful to have been able to work for three very different companies at the same mine.  It was a great learning experience.  When Teck/Corona took over we had about $150 million in our trust account and were up to design throughput of 6,000 tpd.  The best production year I can recall was 1990 when we produced just shy of 600,000 oz of gold.  Shortly after that, in 1991 I left Williams to begin working for Lac again at another operation.

One final story about Mike Lipkewich.  William's standard policy was for gate security to do random searches on vehicles exiting the mine.  In the Lac days this meant everyone, including the manager.  One evening, shortly after assuming command Mike was stopped at the gate by security who demanded to search his vehicle.  The next morning he related the incident to senior staff.  "What were they going to do if they found something.  Report me to the manager?" he quipped.  We all chuckled when he said the search policy no longer applied to the mine manager.

My First Mining Job - Part 3

Thompson back in 1969 was a pretty wild town.  There were two hotels...The Thompson Inn and the Burntwood Inn.  Only the Thompson Inn had a bar, and it didn't matter what day of the week it was, you had to line up outside and wait til someone left before the bouncer would let you enter.  He was a huge guy with a short fuse.  If you crossed him you would almost certainly be thrown out through the main doors, using your head to open them.  I saw him do it to one poor lad.  The Burntwood had no bar but they had a licensed restaurant where we would go once a month or so.  They advertised a 72 ounce steak dinner with all the trimmings.  If you could eat it all you got it for free.  Otherwise you paid $24, which was a huge price for a meal back then.  I know several people who tried but none who got a freebie.

The nearest town to Thompson was The Pas, about 4 hours by road, so once you were in Thompson you stayed in Thompson.  Other than work there was little to do.  Some friends and I once went north about 50 miles to a place called Rat Portage.  It was an Indian reservation in the process of moving to higher ground as Manitoba Hydro built large dams and flooded their hunting and fishing territory.  We drove around for a while and then went back to Thompson.  A few years later there was a road from Thompson to Leaf Rapids, about 100 miles further north.  I worked there briefly in 1974, but that story will have to wait til later.

I mentioned before that I was hired as a labourer at a rate of $2.97/hr.  This was considerably more than I had earned in my previous job as a warehouse worker for $2.09/hr.  The prospect for a raise in the near future loomed large thanks to union negotiations for a new contract.  Additionally, there was the rule that anyone who worked in a higher job classification for 5 straight days would get that rate permanently.  The next higher rate was $3.20/hr, paid to drillers, timbermen and motormen.

The only way to get a job permanently was to bid on it, but due to our level being a new one all the high seniority employees were attracted to it.  This meant that no permanent job on my level could be filled by someone at the bottom of the seniority list, but a temporary replacement while a regular employee was away could result in a rate increase that would be effective regardless of what job one was doing.  That's what happened next.

My first week was spent cleaning ditches with a hand shovel into a 5 ton car.  During my second week the motorman went on vacation, his switchman moved up and I became the temporary switchman.  The switchman job consisted of walking in front of the train (regardless of direction of travel) and warning people to "Watch the train."  The switchman also operated the dump wheel to empty cars, using a whistle to signal the motorman.  I still have my whistle...a shiny metal one and a plastic one as a spare.  It rests in my fishing tackle box in case I get lost on a fishing trip, but I don't think I've blown it since I left Thompson.

My next rate increase came with a newly negotiated contract where my rate went up to $3.65 per hour.  It stayed there for the rest of my 8 or 9 months with INCO as I went through pretty much every job on the level, but none were permanent.  I became a spare driller in the stopes, where I learned how to run a jackleg and stoper.  Most of the time I was rockbolting but occasionally I would be drilling to load and blast.  On one occasion, after drilling our drift round I was sent for powder.  While carrying a box of stick powder across a newly filled section of the stope I slipped on the fill surface.  The case of power flew up in the air and I was certain it was going to explode when it landed.  This was the end I thought.  But nothing happened and I picked everything up and continued on my way back to the workplace.

I spent a lot of time scaling loose rock in the stope.  It was an arm tiring exercise to hold a 10 lb bar over your head and poke at cracks in the rock for hours on end.  There was technique to learn in order to avoid injury.  One of our crew was holding a bar improperly, with the tip between his legs.  When he scaled a piece of loose it fell on the other end and drove the bar downwards towards the miner's crotch, where it nipped the end of his tallywhacker!  He went to the lunchroom to report the injury, and the story I heard was that the shift boss had him take his pants off the view the injury, and just as he was examining it another miner entered the lunchroom and saw the shift boss bending over this guy's privates.  He quickly turned and exited the lunchroom, leaving the shift boss with a problem of how to explain what he was actually doing.

Being tired of working on a level with no permanent job, and already being two thirds of the way up a 1,500 man seniority list I decided to bid on a driller job at Soab.  But I didn't get the job so I decided to leave Thompson and return home to Saskatoon.   Cominco Potash, near Vanscoy was hiring.  I applied for a job underground and was accepted in early May/1971.

My First Mining Job - Part 2

The late '60's were a time of change for mining in Canada as companies began a search for higher productivity and lower costs.  Mechanization was the main change agent, but few, if any mines of the day were designed to be mechanized.  The 1,200 level of T3 was a good example of an old mining method combined with new equipment.  The mining method was timber cut and fill with primary and secondary (pillar) stopes.  The fill was sand fill cycloned from mill tails and transported underground through a series of pipes as a slurry that would drain for days after being placed in a stope.  Primary stopes were mined upwards and pillars were mined downwards.  Drilling was all done with hand held machines...jacklegs and stopers.  Blasting was done mainly with anfo loaded with small bex loaders.  Tape fuse was the most common detonator, combined with thermolite cord for hole timing.  Mucking was done with air or electric slushers into mill holes, although 1,200 level had two scooptrams...one for each end of the level.  Ground support was extensive, consisting mostly of 8 foot rockbolts with wire mesh screen.  In some areas 21 foot extension bolts were installed to hold suspected unstable ground.  Haulage was done with battery locos on the main level from mill holes to a central ore pass connected to the 1,400 level trolley system.

As mentioned above, 1,200 level had two scooptrams.  One was a Wagner ST2 and the other was an ST3.  The scooptrams were located at opposite ends of the level, and once mining had proceeded upwards past the level the scooptrams became captive to their respective stopes.  Utilization was therefore very low, but cycle productivity received a boost from the larger and faster scooptrams compared to slushers.  Scooptrams also introduced new problems, including diesel particulate to the workplace, new procedures for handling and storage of volatiles and much more time and attention spent on ventilation.  Nowadays, after 50 years mines are moving to battery power in an attempt to clean the air and reduce CO2 emissions.

INCO took employee safety very seriously, even back then.  Each mine had a safety officer who would visit levels unannounced to review how employees were working and whether infractions of the rules had occurred.  Violators were disciplined...usually with suspension or occasionally with termination.  Accidents were tracked on a large 52 week board on surface where each supervisor had an icon shaped like a horse in a race with other supervisors' horses.  A lost time would set the horse back to the start.  A medical aid would hold the horse in place for a week.

Occupational health however was not as great a priority.  Ear protection was seldom available.  Employees were aware of how noise would affect their hearing so many, including me would use rolled up tissue paper soaked in spit and jammed into our ears to protect hearing.  Several employees had begun using ear muffs but they were not common and were viewed by most miners as being a "sissy" thing to wear.  Sanitary facilities were good.  We had a two hole chemical toilet on our level.  Unfortunately it was located near the lunch room, where frequent traffic would be able to observe who was using the facility and for how long.

There was a lunchroom, located about 200 feet from the shaft station.  Everyone was required to go there at shift start, lunch time and shift end.  The supervisor used the front section as his office and line up area.  Farther back were two rows of benches where miners sat and waited their turn for instructions.  Seniority was used to determine who sat nearest the front and woe be to the man who sat in someone else's spot.  Lunchrooms also served as refuge stations for emergencies.  Stench warning tests were conducted at least annually.

Attendance was normally 5 days per week on alternating day and afternoon shifts.  Dayshift Saturday was an additional optional shift at overtime rates for anyone who decided to attend.  INCO had an interesting absentee policy...if you missed a shift without acceptable reason you were not allowed to work on Saturday.  You could miss up to 9 consecutive shifts each quarter and remain on the payroll.  If you returned after 9 missed shifts you still had a job but you could not work that Saturday.  One man on our crew, named Art was prone to taking 9 shifts to return home somewhere in Saskatchewan for R&R.  Once, upon his return the supervisor told him if he missed again within the next three months he would be given 5 days off without pay.  Art quipped that was fine with him, as he would just go home for a week, but the supervisor quipped back that he would get every WEDNESDAY off for 5 consecutive weeks.  Art lost out on that one!