This column was originally published in the Fall, 1996 issue of Highgrader Magazine which is committed to serve the interests of northerners by bringing the issues, concerns and culture of the north to the world through the writings and art of award-winning journalists as well as talented freelance artists, writers and photographers.
On November 8, 1963, a young Canadian geologist named Ken Darke set up a diamond drill 16 miles north of the Town of Timmins. The hole was logged as Kidd 55-1 and when the core came up there was a foot of solid copper in it. On July 16, 1996, Frank Pickard, then 62, president and CEO of Falconbridge Ltd. told a gathering of Timmins civic and political leaders he hoped Kidd Creek Mine would be here “thirty years from now. I won’t be here, but the mine could be.”
In between these two dates is the story of a unique orebody, one so rich it staggers the imagination.
Kidd Creek Mine has been in production since 1966. It has processed 106.5 million tones grading 6.55% zinc, 2.31% copper, .24% lead and 94 grams silver per tonne. In addition, there is an estimated 32.2 million tones of ore in the proven, probable and possible reserves for a grand total of 138.7 million tones of base metals. By comparison, the 1994 copper-nickel-cobalt discovery at Voisey’s Bay in Labrador is presently estimated to contain just over 100 million tonnes.
The Kidd Creek Mine literally saved the town and improved the lot of every miners in the area.
The story began in 1909 when Texas Gulf Sulphur Company Ltd., was created to mine sulphur in the southwestern United States. Texas Gulf grew into a major sulphur producer but by the 1950s faced hard times and declining reserves. It decided to look elsewhere for sulphides and Canada was targeted. The program appeared to be a failure and had been sharply reduced when Darke was sent to Timmins in early 1963 to supervise a drilling program. The main target was a large anomaly in Kidd Township. An anomaly is material in the ground that gives off an unexpected reading when geophysical instruments are passed over it. The readings from this anomaly were so strong that airplanes hired by mining companies in the area used it to set their instruments before flying off to do surveys.
For many years an old trapper had lived in a shack on the site and proclaimed that there was “treasure” beneath it. But apparently no one thought the anomaly was worth exploring. That is, until Darke came along.
On the night of November 9, 1963, the drill foreman Rene Gervais brought Darke part of the core, and after examining it, the young geologist knew they were onto something big.
The company faced a dilemma. They needed to don more drilling in the area to prove that the first drill hadn’t just hit a fluke band of copper but they had to keep the find secret until they could acquire the land around it. Texas Gulf had made one of the biggest mining discoveries in history on land they didn’t own; they merely had an option on the 160 acre property (four mining claims).
In fact there were three major owners with whom to contend, as well as numerous small pieces of property to acquire and Crown land to be staked. In the months that followed, Texas Gulf managed to sew up 60,000 acres by staking and buying property.
Darke confined the drilling crew to the site for weeks and the drill core was shipped to the U.S. The crew needed food and other supplies, and speculation began to grow as to what was going on in Kidd Township. Eventually, prospectors and other companies began to tie up the ground near the find and in the adjoining townships. There is nothing as fast as the rumour grapevine in mining circles. The Northern Miner, the bible of North American mining journals, got wind of the story and managed to put together enough that the company agreed to talk. The story was written on April 13, 1964 and carried in the edition of April 16. On the same day, Texas Gulf made a formal announcement in New York. The news sparked one of the biggest and wildest mining rushes in Canadian history.
That the find was made in the area where gold had been found as early as 1906, where three giants of Canadian gold mining, the Dome, Hollinger and McIntyre were still in production and where more than 50 gold mines had been born and died just added colour and excitement to events.
There were huge areas that couldn’t be staked because they were held by mining companies, individual prospectors and Boer war veterans. But every square inch of open ground in eight 36-square mile townships was staked or bought (sometimes flipped several times for ever higher amounts).
Soon every diamond drill rig in Canada and the northern U.S. was punching holes into the ground.
Meanwhile, Texas Gulf was up to its armpits in legal trouble. The U.S. Securities and Exchange Commission (SEC) took exception to the publicly-traded company keeping a major discovery under wraps for over five months. The company and 13 of its officers, directors and employees were charged in 1964 by the SEC, mostly for insider trading.
The owners of the key claims who had sold to the company were in court because they felt they had been deceived as to the true value of their land. Some shareholders who sold between November 9, 1963 and April 16, 1964 sued over lost profit.
Before the staking spree broke out, Ken Darke had managed t stake all the open ground he thought the company needed and, as far as he was concerned, there was nothing of value on the land he passed up. History was to prove him right. Today, 33 years later, no one has found another major base metal orebody in the Timmins area.
At the time of the rush, penny stocks soared into dollars at the mere announcement that companies had acquired ground near Kidd Creek (often 15 to 20 miles away). Millions of dollars were bet on the theory that the orebody was a “splash” and that another, or even several deposits were waiting to be found. They never were.
A study done by the Geological Survey of Canada, the Ontario Geological Survey and Falconbridge was released in 1995, proving that the orebody was a “tear”, self-contained and geologically speaking isolated.
While all this was going on, Texas Gulf was selecting a site for a concentrator 17 miles east of the find, building a highway from Timmins through the muskeg to the discovery, and constructing a railroad between the mine and the metallurgical site. On November 16, 1966, the first ton of ore went through the new concentrator.
The orebody was so unusual, yielding as it did copper, zinc, lead, silver, cadmium and tin with sulphuric acid and indium as by-products, that people from all over the world came to study it. Nothing like Kidd Creek has been fund anywhere else but the hunt continues.
Despite the wealth and reserves, Kidd Creek has had four owners. Texas Gulf (by then Texasgulf Inc.) sold out in 1981 to National Elf of France. It immediately sold the Canadian mineral property to the Canada Development Corporation (controlled by the federal government) and in 1986, Falconbridge acquired it.
When Texas Gulf decided in 1964 to set a wage structure, it ignored the relatively low wages paid in the gold industry. It looked at the base metal sector and made its employees the highest paid in Timmins. The company chose to put all employees on salary (ignoring the bonus system used to push production in gold mines) and stuck to its policy created 55 years earlier in Texas of having no layoffs.
The area gold mines found themselves fighting with Texas Gulf to retain their best miners, in fact their best employees, as everyone from secretaries to lab technicians wanted to join the newcomer. The gold mines were unionized but Texas Gulf wasn’t. The latter’s benefit and wage package was constantly upgraded to keep it number one. The gold mines had to work hard to keep up. In a few years, the gold miners were making money they had only dreamed about. Today, the average miner in Timmins makes over $50,000 annually and Kidd Creek miners are closing in on $60,000.
Every orebody has to die
The projected date for the exhaustion of the Kidd Creek Mine orebody was 2004 but earlier this year it was pushed back to 2007. The math is simple: the mine processes 3.3 million tonnes of ore annually and there are reserves of 32.2 million tones.
In February, Kidd Creek was split into two business units and ordered to sink or swim on their own. The Kidd Creek Division of Falconbridge Ltd. became the Kidd Mining Division and the Kidd Metallurgical Division. Each has its own vice-president and general manager. No doubt Falconbridge is looking to the day when the mine closes and the world-class metallurgical facilities continues as a custom mineral feed business.
What with securities’ regulatory bodies watching every word and action by a publicly traded company, officials are careful when they talk about the future. They have good reason to be careful because they don’t know how deep the orebody goes.
As mining division head Allen Hayward says: “The Kidd mine has 11 years of production remaining based on present proven and probable ore reserves down to the 68 (6800 foot) level.”
He also says: “It is now known that the Kidd orebody extends down below the 68 level with mineralization being intersected by drill holes as deep as 9,500 ft. by mining below the 68 level. This will depend on three key issues:
1. Finding enough proven and probable ore reserves to support a mining operation of between one million and two million tones a year;
2. Designing an operating environment which provides for continued health and safety of Kidd mine employees;
3. Demonstrating that mining the mineralization at hese depths is a viable economic proposition.”
He concludes by saying: “The future of the Kidd Mining Division beyond 2007 is nt assured but looks full of promise.”
Kid’s workforce in Timmins hit a high of 3,044 in 1982. Today the mine employs just under 1,800. If the mine does close the Met site would employ less than 1,000.
Kidd is the largest taxpayer and employer in the City of Timmins which has 47,000 residents. Metal production at Kidd was $674.1 million in 1996. The operating profit was $120 million.