Since 1915, the Northern Miner weekly newspaper has chronicled Canada’s globally significant mining sector.
Back in 1986, before Louis Gignac accepted the opportunity to head up a public mining company holding the crown jewels of Quebec’s government-owned Soquem, he wanted assurances that the company would be truly private and not in any way an instrument of government policy.
After securing this hands-off pledge, Gignac set out to build a gold mining company that was entrepreneurial in nature and primed for the big leagues. At the onset, Gignac made it clear that his growth plans for Cambior (TSE) would not be restricted to the Quebec projects inherited from the Soquem privatization.
“We will go wherever the opportunity arises,” Gignac told The Northern Miner at the time of Cambior’s public offering. These proved to be prophetic words. Cambior’s roots are still firmly planted in Quebec, where a number of its mines are situated. But the operating experience gained in Quebec also gave the company the expertise and the confidence to compete on an international level. Today, much of the company’s gold production comes from outside North America, and its current development and advanced exploration projects reflect an aggressive diversification into base metals.
For his role in shaping Cambior into one of Canada’s foremost mining companies and for other industry achievements, The Northern Miner has named Louis Gignac, 44, its “Mining Man of the Year” for 1994.
Gignac is also chairman of the Mining Association of Canada (MAC) and has played a role in launching the “Keep Mining in Canada” campaign, as well as the Whitehorse Mining Initiative Leadership Accord. MAC President George Miller has high praise for Gignac’s contribution: “He’s sharp, he understands what we are doing, and he provides real insight into industry issues.” Gignac has engineering degrees from Universite Laval (Quebec) and the University of Minnesota. He also obtained a doctorate in mining engineering from the University of Missouri-Rolla.
Prior to accepting the position of president of Cambior, he was a director of the Lac Dufault division and of the Ansil project of Corporation Falconbridge Copper (CFC) in Quebec. Before this, he was director of CFC’s Lac Shortt division where, among other responsibilities, he was in charge of technical and financial studies and of construction and production of this gold mine.
Gignac, therefore, brought considerable operating experience and technical expertise to Cambior, along with good business sense. But the essence of leadership is vision, and it was Gignac’s decision to pursue and develop new opportunities that helped launch Cambior into the major leagues. When Cambior began its corporate life, its Quebec assets included a 50% interest in Doyon, an open-pit gold mine near the town of Cadillac; a 50% interest in a niobium mine near Chicoutimi; and interests in 46 mineral properties (mostly gold) at various stages of exploration. Cambior also held shares in a number of junior companies.
At first, Cambior focused on its Quebec gold assets. By 1987, having completed its first full year of operations, the company was able to report a net income of $21 million based on gold production of 141,524 oz. Today, some eight years later, much of Cambior’s gold production comes from the Omai mine in Guyana, a joint venture with Golden Star Resources (TSE). In the first nine months of 1994, Cambior produced 386,820 oz., the bulk of which (some 188,097 oz.) came from Omai.
Gignac’s 1990 decision to take on this foreign project raised eyebrows at the time, which, in retrospect, proves only that he was ahead of the times. Today, companies are criticized for not having sufficient exposure to the crop of mining opportunities emerging around the world.
Omai has proved to be Cambior’s most challenging and complex project, particularly with regard to financing (which often was a problem with foreign properties). The successful plan included a 326,771-oz. gold loan, plus a mineral agreement with the state of Guyana and the acquisition of political risk insurance.
Construction was completed ahead of schedule in late 1992, within the capital budget of US$152 million established by the feasibility study. Plans are now in the works to expand the Omai mill by 50%.
In the early 1990s, Cambior launched another initiative ahead of the pack — diversification into base metals. Current development projects include the Grevet zinc and the Mobrun polymetallic deposits, both in Quebec, and the Carlotta copper play in Arizona.
Copper also features prominently among the company’s advanced exploration projects, which include La Granja in Peru, El Pachon in Argentina and La Reyna in Mexico.
All of this is not to suggest that Cambior hasn’t experienced a few growing pains. A net loss of $4.7 million was reported for the first nine months of this year, owing to a $16.7-million writedown of the Valdez Creek placer mining assets, as well as higher production costs caused by temporary operating difficulties at the Doyon and Chimo gold mines.
Over the next few years, Cambior expects to have a number of new projects in production. In the meantime, the company is keeping an active hand in exploration through wholly owned projects or joint ventures with outside parties. In addition, the company holds about 40% of Cambiex Exploration (ME) which, in turn, holds several exploration projects in northwestern Quebec.