Since 1915, the Northern Miner weekly newspaper has chronicled Canada’s globally significant mining sector.
The past decade has not been easy for Canada’s mining community. While many of the biggest and the best were forced to retrench in the face of soft markets, tight money and tough government restrictions, new mines were few and far between.
Throughout these tough times, however, one company consistently has bucked slow-growth trend. Over the last five years, Teck Corp, the brainchild of veteran geologist Norman Keevil has brought not one but three new mines to fruition (1975: Newfoundland Zinc: 1976: Niobec niobium and 1978: the Afton copper-gold mine and smelter).
The company will kick off the coming decade with the start up of yet another large project – it’s Highmont copper-molybdenum mine in B.C. Three more Canadian development proposals (B.C.’s Bullmoose coking coal deposit and its Schaft Creek copper-molybdenum-gold property along with Ontario’s Montcalm nickel-copper deposit) are waiting in the wings.
Teck’s oil and gas operations are expanding most recently with the $30.8 million purchase of 25% of Coseka Resources. The company also has spread its wings internationally, benefiting from its partnership with Frankfurt- based Metallgesellschaft AG, which owns just under 20% of Teck.
Spearheading this wave of expansion is executive vice-president Norman B. Keevil Jr., a credit to his father’s ambitions and The Northern Miner’s MAN OF THE YEAR.
In the 10 years that Dr. Keevil Jr. has been executive vice-president, Teck’s net worth has ballooned to more than $250 million from $30 million. “He’s a leader among the younger mining executives and an active spokesman for the industry, “says Teck chairman and former Governor General of Canada Roland Michener.
(Mr. Michener’s association with the Keevil family goes back beyond the incorporation of Norman Sr’s first formal mining venture Temagami Mining Co., now Copperfields Mining Corp. Dr. Keevil Sr. owns 28% of the Copperfields which, in turn controls Teck).
“Norman Sr. was one of the most respected professors of geophysics before he turned his skills to creative exploration,” Mr. Michener told the Northern Miner. “It’s quite natural that his son should follow in his footsteps. Norman Jr. has made great contribution to Teck’s forward planning and its acquisitions – and he has done it at a time when others thought it couldn’t be done.”
With two mergers under its belt this year, Teck has emerged as a tight, streamlined company. As corporate histories go, one might say the company could now settle comfortably into middle age. But if Dr. Keevil Jr.’s boundless energy, enthusiasm and acumen are any example, Teck has only just begun.
“We’ve got a good inventory of projects to keep us busy over the next few years, but it’s important to replace the developed inventory so we never have to scramble for the next deposit,” he told The Northern Miner in an interview after a recent trip to China as part of a B.C. government trade mission.
“There’s nothing worse for morale that sitting around looking at everybody in the office for a couple of years between projects. We like to keep busy.”
There have been few idle moments at Teck since the present company took shape in 1963 as a merger of four junior resource companies: Tech-Hughes Gold Mines, Canadian Devonian Petroleum, Lamaque Gold Mines and Howey Consolidated Mines.
“The key ingredients in building a major company are good deposits which can be developed, good people who can do this properly – and capital,” Dr. Keevil Jr. says. Capital is by no means easy to come by, particularly in this day and age, yet Teck has managed to invest some $250 million in new mine development over the past 10 years, in the process taking under its wing Area Mines, Highland Bell, Leitch Mines, Silverfields Mining Corp., Brameda Resources, the Yukon Consolidated Gold Corp. Highmont Mines and Iso Mines.
Could do it Again
Dr. Keevil Jr. readily concedes that some of today’s securities regulations make it more difficult to build a company of Teck’s stature, but he also stresses that “with the right goals and people” another Teck could be built. “We certainly could do it again – but every time another well-meaning but misguided rule is put in place, it make it tougher, “he says”.
“We funded our development without selling out to a major company in a very simple way, but one that is no longer possible under the regulations of the Ontario Securities Act. To build a pool of capital, we bought out the founding shareholders of several companies that were dormant but had good, liquid investment positions. Subsequently these were merged with Teck, expanding our capital base sufficiently.
“Under the new Act, this would not be possible. The same offer would have to be made to all shareholders, resulting in no net increase in the pool of capital and no point in the transaction. The rule has a nice motherhood sound about it… but it is another example of regulation that can smother more than it protects.”
The Keevil family – whose roots go back to England and the small village of Keevil near Bath – has been in the forefront of Canadian mining development for the last two decades. Norman Jr., who was born in Massachusetts while his father was teaching at the Massachusetts Institute of Technology, earned a B.A.Sc. in applied geology from the University of Toronto and a Ph.D. from the University of California at Berkeley.
While his brother Alan gravitated toward the oil and gas end Teck’s business (he’s currently the Calgary-based vice-president of that division), Norman Jr. concentrated on the mining side. At 41, his pivotal position in the company leaves little time for field work. But it does leave ample opportunity to pursue his penchant for developing new projects. “Getting out in the field is fun, but building companies is fun too, “he says, “I like picking out new investments, following them up and achieving opportunities.”
Strong on precious metals
Teck’s three precious metals mines (the Lamaque gold mine in Quebec, the Silverfields silver mine in Ontario and the Beaverdell silver mine in B.C.) coupled with its oil and natural gas properties in western Canada have provided a basis for solid growth since 1970 when Dr Keevil Jr. was appointed executive vice-president.
Two mergers in 1979 (one with Brameda and Yukon Consolidated another with Highmont and Iso) have paved the way for future phases of corporate development and Dr. Keevil Jr. says he sees that pattern continuing.
Prior to the field latest mergers the number of companies in the Teck stable had once again grown “higher than it ought to be in terms of investor understanding or corporate management,” he says. “Now we’ve got the thing very well streamlined, the only thing substantial outside company being Afton. By putting it all together, the current income of Teck supports the investment in the ($150 million) Highmont development and Teck in turn benefits from development tax deferments. When Highmont is producing income, the money will be used for the next development, and that, in turn will support whatever comes after it.”
Currently, the most likely bet for development after Highmont is Teck’s Bullmoose coal property but a go- ahead for Bullmoose, which carries a price tag on the $120 million to $150 million range, will depend on the outcome of Teck’s current negotiations with prospective Japanese coking coal customers, Dr. Keevil Jr. says.
The timing of Bullmoose “depends on the Japanese deciding which of the potential new Canadian coal deposits they want to support. They’re looking at which would be the most secure in meeting their target costs. We’re vying reasonably successfully for the position but it’s a seller’s market just now and negotiations are tough.”
If a Bullmoose go-ahead has to be deferred, however, Teck will hardly be left with time on its hands. Its Montcalm nickel-copper deposit near Timmins (which could cost about $40 million to develop) will stay in the ground for awhile if we go ahead with Bullmoose but it’s there as a safety valve to fall back on and keep us busy if Bullmoose doesn’t go,” Dr. Keevil Jr. says.
Also waiting to be developed is the Schaft Creek copper-molybdenum-gold deposit in northern B.C., currently clocking in at a development cost of $350 million-plus in today’s dollars.
The richness of Schaft Creek’s copper grade is “pretty dramatic,” Dr. Keevil Jr. says. Despite the high cost, the development date probably would be earlier if there were power in the are, he adds. However, hopes for a new B.C, Hydro plant near the site so far are just that – hopes.
Further down the road, 38% owned Casino Silver Mines’ copper-molybdenum property in the Yukon could be brought into production, although the prohibitive costs put that project much further in the future.
Teck has rounded out this decade on a strong note. Profit on operations for the fiscal year ended September 30 leapfrogged to $22.7 million or $2.40 a share from $4.3 million (61 cents) the previous year as benefits from production at 73% owned Afton added to corporate strength.
Much Involved In Oil
Looking ahead into the next decade, Dr. Keevil Jr. says he sees an even larger, stronger company but one based on the same structure which has proved so successful throughout the 1970s.
With the Coseka acquisition (brought from Brinco) the company’s oil and gas division will continue its expanding role and Teck’s international exposure also may increase as it takes advantage of the doors opened by its Metallgesellschaft relationship.
“Metall is a first-class shareholder,” Dr. Keevil Jr. says. “They’ve given us a broader outlook on the world markets. As a metals trading company, they’ve got people everywhere and they run across things all over the world.” Currently the two companies are looking at the possibility of establishing a syndicate for a joint Australian base metals exploration project, he adds.
Dr. Keevil Jr. himself is in increasing demand as an industry spokesman and his role on provincial government committees and study groups also expanding. At times, it has been suggested that he run for political office – but he says his heart is with the corporate world and, specifically with Teck. I’ve considered politics – but only in moments of frustration, “he says.”