The Northern Miner 1987 “Mining Person of the Year” Clifford Hugh Frame

Since 1915, the Northern Miner weekly newspaper has chronicled Canada’s globally significant mining sector.

People of the Yukon are used to putting out fires. Forest fires race through its countryside every summer and miners are often called on to help extinguish them.

In 1970 one such fire swept through Faro, a small mining town built a year earlier in the Pelly River Valley. It burned down half the town before being brought under control.

That town was built by Cyprus Anvil Mining Corp., a company controlled by Dome Petroleum of Calgary, to house some 720 employees of the big 15,000-ton-per-day open-pit lead-zinc mine nearby.

When zinc price took a tumble in ’82, Dome’s debt problems forced Cyprus Anvil to walk away from the mine. That move set off a series of fiery operational problems that would take a skilled mine operator years to put out: entire 170-ton haulage trucks loaded with ore were abandoned undumped, on the haulage ways; the mill was simply turned off, clogging pipelines and filling sumps; there was even 1 ½ ft of water in the mine’s warehouse and a couple of hundred feet of it in the huge pit three years after being abandoned.

This, it turns out, was a perfect situation for a 49-year-old mining engineer who thrives on tackling challenges – Clifford Hugh Frame, our 11th annual Mining Man of the Year. He assembled a group of 454 employees who have successfully extinguished those operational fires. Now they are fine-tuning the big operation.

With the help of an unidentified group of investors from Dallas, Texas, Frame cut a deal in November, 1985 to purchase the Faro mine from Dome Petroleum. That deal included restructuring Anvil’s $110-million debt, reducing it to about $40 million. At the same time the federal government agreed to guarantee a $15- million loan, which the mine has since paid off from cash flow.

Since late 1985, Frame’s new company, which he called Curragh Resources after a horse-breeding town southwest of Dublin in his native Ireland, has miraculously cut costs nearly in half (by 46% to $41.25(C) per tonne of concentrate) and almost doubled concentrate production (530,00 tonnes per year) – all with just half as many people as Cyprus Anvil employed six years ago.

The old mine administration office building, separate from the mill and repair shops, stands vacant and cold today as a museum of the Cyprus Anvil years. It symbolizes the excesses of that previous operation.

Frame, the only person to receive the Mining Man of the Year twice, brought a different and a very practical approach to the mining, deserving much credit for the turnaround. His approach was picked up from 30 years of practical mining experience.

During the pioneering years of the Thompson Nickel Belt, Frame worked as a mine planning engineer with Inco Ltd. and worked in Indonesia with that company as vice-president of operations. And on the three separate stints he worked for Denison Mines at Elliot Lake, – as mine captain in 1957, assistant manager in 1966, executive vice-president and then chief operating officer and director in 1982-85.

Were it not for the depth of Canadian Mining experience Frame brought to the Faro mine, there would not 4,000 truckloads of concentrate pounding the 1,100-km road from Faro to tidewater at Skagway, Alaska, every year. In a 12-month period, they carry some 530,000 tonnes of lead and zinc concentrates, about 3% of world production, on the first leg of the long journey to their markets in Asia, Europe and Australia – enough to net the company about $400 million at today’s prices.

Frame brought a let’s-sit-down-and-put-our-heads-together approach to putting out the fires at Faro. The mine re-started in June, 1986 and now has a $20 million line of credit and is winding up a very profitable year.

Faro’s re-opening came at time when other Canadian zinc producers were complaining bitterly that it would further exacerbate an over-supply problem on world markets.

In a November 1985, editorial, even The Northern Miner was skeptical that the mine could make a buck without massive government subsides:

“Inasmuch as this particular operation lies within the riding of (then) Deputy Prime Minister Erik Nielsen, and in view of the recent pork-barrelling performances of the Mulroney government, we would tend to bet it (the Faro mine) will continue at any cost, come hell or high water.”

The self-congratulations of the mine personnel had sounded rather hokey until The Northern Miner visited the operation last October and saw just what they had accomplished. Compared to the performance of Cyprus Anvil, the Frame team has orchestrated a turnaround so amazing we’ve selected it as the mining story of 1987. It is a feat worthy of the industry’s recognition and congratulations.

It is even more remarkable contrasted to Frame’s tarnished reputation as a mining man following the costly troubles that were encountered surrounding and following the opening of the $2.7-billion Quintette coal mine in north-eastern British Columbia in 1984. In 1982 we named Frame, along with Robert Hallbauer, then the vice-president of Teck Corp., our mining men-of-the-year for their individual roles in that mega-mine-development.

But a real furor ensued when start-up problems at that mine extended well beyond the normal de-bugging period. Frame, as president of Quintette’s 50% owner and manager, Dennison Mines was caught in the middle. He was eventually fired by Denison Chairman Stephen Roman. But many people in the industry thought he was unfairly singled out as a scapegoat for collective mistakes.

Dennison eventually wrote off its entire investment in Quintette in February, 1985. This year, the mine remained in the news as the Japanese clients who contracted in 1981, to buy coal from the mine threatened to cancel those contracts.

But Frame, now 54, has had to prove he was not altogether-to-blame for the design  problems and some of the dubious decisions made at Quintette. And he has done that by turning Faro around a full 180 degrees.

Moves into Pamour

It was probably his ability to carry that out so rapidly that attracted the attention of Robert Needham, the 58-year-old executive chairman of acquisition-oriented Giant Resources of Australia, a diversified company 51% held by Ariadne Australia.

Then early in 1987 Noranda sold its 51% interest in Pamour Inc. to a group of Australian investors who eventually sold it to Ariadne. Meanwhile Falconbridge sold its interest in Giant Yellowknife Mines to Giant Resources.

So Needham wanted Frame to become president of Pamour. But instead, when Frame went to Australia to meet Needham, he came away as chairman and chief executive officer of three Pamour subsidiaries: Giant Yellowknife Mines, ERG Resources and Pamorex Minerals Inc., not to mention president and CEO of Pamour itself.

Giant Resources, on the other hand, picked up a 40% interest in Curragh, buying out the original Dallas investors who got the ball rolling to begin with. That deal netted Curragh about $7 million.

While Needham’s main claim to fame was Placer Development’s Kidston mine in Australia, which was developed while he was vice-president of Placer’s Australian operations, Frame’s may very well prove to be the successful turn-around of the Faro mine and the Timmins division of Giant Yellowknife – long considered to be a high-cost operation.

As the top man at Parmour, Frame is taking on another significant challenge. Pamour is in a state of complete transformation. With annual gold production of about 200,000 oz, the Pamour group is expected to double that in the next two years.

The mining industry laughed when Giant Yellowknife bought a 50.2% interest in Pamour at $10 a share. But now with Frame at the helm, shareholders are in a different frame of mind. And so they should be. For an indication of the direction in which he is taking that company is its recent acquisition of shares of Dickenson Mines and a key block of Kam-Kotia Mines which virtually controls that company.

We see this as a very astute move, for it involves a major stake in the prolific Arthur W. White gold mines at Red Lake. Readers may recall that just over a year ago, following an underground visit to that operation, The Northern Miner head-lined what it called “a dramatic mine turnaround”, describing in some detail an exciting rich new deep ore development that could eventually match the old mine, suggesting that it could add another 40 years to Dickenson’s Red Lake life. The Frame-Pamour team is already seeking representation on the Dickenson board. Down the line, we wouldn’t be all surprised to see it in firm control of that prize company, with Frame as its top executive.

In July 1987 Frame and his associates tried to scuttle the merger of Dome Mines, Campbell Red Lake and Placer Development, another major mining story in 1987. Pamour made an offer to Dome Petroleum for a control block of Dome Mines. But Dome Pete turned the offer down. The subsequent merger created Placer Dome, the largest gold producer outside of South Africa. But with Cliff Frame at the helm of an aggressive, up-and-coming group of companies, Pamour may not be that far distant. Indeed 1988 may well prove to be as interesting as 1987.