EDITORIAL & OPINION — ODDS ‘N’ SODS — A good deal gone bad

During the mid-1950s, I did a lot of mining exploration work in a farming area a few miles west of Senneterre, in northwestern Quebec

However, our story starts years earlier, when a geology professor at a Montreal university told two wealthy brothers, perhaps as a joke, that a big mine in that area was waiting to be discovered. After discovering some gold showings, one of the brothers sunk two shafts and did some drifting. Nothing of importance was found and he eventually went bankrupt after turning to pig farming.

The other brother was more persistent: he kept working the area until he died. He went so far as to build a warehouse to store samples, core and equipment, and to provide an office for his future staff. He wanted to be ready when the mine was discovered.

To raise money for his endeavors, he had salesman knocking on doors in rural areas, selling stock certificates out of a suitcase. It was not exactly illegal to do so back then, but it was nonetheless frowned upon by St. James Street. There was no set price for the stock — it was a matter of “whatever you can get,” as he told his salesmen.

The brother’s determination to find a gold mine was a boon for the engineer in his employ, and for whom I was working at the time. At least once a year, he got a call from Montreal. “I have some money,” the man would say. “What do you suggest we try this time?” The engineer, who knew how to milk a cash cow, would respond: “I have a new theory. This time we’ll click.” He always had some newfangled ideas.

Once, we hired two local farmers, a father and son, to do the hard physical work. They were characters. The old man would stop all of a sudden and grab his heart. “There’s a mine right here,” he’d say. “My heart is beating faster.” With that, he would collapse on the spot. The son could tell some tall tales, as well. Both kept telling me of a certain property a few miles west of their farm. “That’s where the big one is,” they would say.

A few years later, I started to believe them. I formed a partnership with the brother for the northern portion of a big granite plug. The subsidiary of a large conglomerate was working on the southern portion. By coincidence, the consulting engineer for the project was none other than the professor who had prompted the brothers into their quest. Problem was, neither party wanted to speak to the other.

In 1959, I approached the president of the conglomerate about a deal. The meeting did not go well. The next day, the professor called me at my hotel and said they would deal only if the brother was taken out of the picture.

“He’s got a bad reputation,” said the professor. “He used to run a bucket-shop operation in Montreal, and we don’t trust him. Also, we think he can’t come up with the necessary funds.”

Nothing came of the proposed deal, since I was not prepared to handle the property alone. Later, my plan was to get both the northern and southern portions of the plug into one deal. The brother seemed agreeable.

As luck would have it, the claims covering the northern portion came open. I immediately staked the property. “Ha ha,” I thought to myself, “no more dealing with the nutty professor.”

All the reports and drill logs had been signed by a geologist who was working at a mine in Malartic. He confirmed that all the data were authentic and agreed that the property had potential. In those days, there was not much interest in what was probably a large, low-grade gold deposit. It was ideal for a quick promotion, since there were some high, though narrow, grades and some long, low grades.

After months of trying to peddle the property, I finally made what proved to be a lousy deal with a broker, a bucket-shop operator in Toronto. My ex-boss, the engineer, since he knew a lot about the local geology, was asked to write the qualifying report for the Quebec Securities Commission. He was also put in charge of the work.

To our surprise, the commission turned down our report, with the consulting geologist remarking that the property did not warrant any more work. We then submitted copies of the original reports completed by the conglomerate’s subsidiary. The deal was approved.

It turns out that the consulting geologist who rejected our application was the geologist who had written the original reports. Years earlier, he told me that the property did indeed have merit. To this day, I don’t know why he rejected the report, but he wasn’t at the commission long after that.

As for the broker, he gave me back the property after he unloaded all of his stock.

— The author, a retired prospector, resides in Pierrefonds, Que.