Canada’s Top Prospector

Like any lifelong prospector, John Larche has his share of stories to tell. Like the time he stepped out of his airplane onto a frozen lake, only to break through the ice. Hanging on for his life to the ski of the plane, he knew that the plane might come through with him at any second and that that would have been the end for John Larche.

Or the time he was flying out to Manitoba from Timmins, Ont., with a couple of fellow prospectors. Swooping down below the clouds to get his bearings, the motor on his single engine craft cut out. There was only one lake in sight, and he wasn’t sure he could make it. As an alternative, he picked out a thick stand of trees in which to crash-land. “The floats just touched the treetops as we hit the lake,” he recalls. As if that wasn’t gut- wrenching enough, Larche then simply fixed what he thought was wrong with the engine and took off again, finishing his trip.

And so while the modern-day prospector has substituted an aircraft for the stereotypical mule, technology hasn’t much lessened the dangers of spending a good portion of one’s life in the bush. It’s not a life for the fainthearted; and Larche will be the first to tell you that its not a way to make easy money.

“I was in the business for almost 10 years before I made any real money,” says Larche, who has been a full-time prospector since 1955. As the new president of the Prospectors and Developers Association of Canada, he has this advice to offer: “First you have to be an optimist. And you can’t expect to make it your full-time job, at least not right off. You have to do a lot of contract work or have another job, and prospect when the timing is right. It’s hard to raise a family with no regular income. Being a prospector means learning to live with bad luck and disappointments.”

Larche, of course, doesn’t have to worry about money any more, except to manage the fortune he is in the process of acquiring through the Hemlo discoveries. That financial independence has allowed him to accept the job of top prospector in the country, a post he was forced to turn down some years ago because he couldn’t afford the time. As the new pdac president, Larche is charged with representing to the various levels of government the interests of the exploration community and with ensuring that the association maintains its powerful function as educator and social convener of the prospecting fraternity.

It’s about time a prospector held the position. In recent years, it has been the exclusive reserve of developers, promoters and geologists with home bases in Toronto. It was nearly impossible to appoint an out-of- towner because, as outgoing president Lionel Kilburn recently put it: “When you are president you don’t have much time for yourself; it’s almost a full- time job on its own.”

It has taken most of Larche’s life before he could afford the time to continuously shuttle between his Timmins home and the association’s head office in Toronto.

Born in Blind River, Ont., in 1928, Larche moved to Timmins with his family when he was eight. The move was an important lesson to Larche, since his father realized that, during hard times, the gold camps always seemed to be booming. He worked on a diamond drill rig when he was not yet 16 and, within a year, went underground at the Preston East Dome. Larche drifted from mine to mine until the mid-1950s found him at Port Radium in the Northwest Territories. Port Radium was the only uranium producer in Canada at the time, so news came quick when the big discoveries were made at Blind River — discoveries that sparked one of the biggest rushes in Canadian history and found two mining empires, namely Denison Mines and Rio Algom. But by the time Larche got there, he was too late. Most of the prospectors were pulling out.

Still, the fortunes being made by some of the prospectors in the rush were legendary; and the chance at quick riches was not lost on Larche, who had been longing for some time to work on the exploration side of the industry. He made his decision, to continue prospecting full-time. With partner Alfred Rousseau, with whom he was to stay for 20 years, he struck out into one of the most legendary of professions, only to find that serious money was hard to come by.

“We were forced to do a lot of contract work,” he recalls, noting that while it got him and his growing family by, it didn’t allow much for the luxuries in life. He eventually acquired his pilots’ license and a small aircraft to help him get around — northern highways weren’t as common then — but his first big fortune was to come right in his own back yard.

Hemlo notwithstanding, the Texasgulf base metals discovery sparked Canada’s most exciting rush since the discovery of Timmins itself. And Larche was there to cash in. The series of small ironies accompanying Larche’s staking typifies the “small- world” nature of the Canadian exploration industry. Larche and his partner brought in Don McKinnon, an acquaintance, to help out, introducing the lumberjack to the prospecting business. It was McKinnon, 15 years later, who was to team up with Larche on the Hemlo staking. They made their biggest sale of the Texasgulf rush to promoter Viola MacMillan — who had by then been president of the pdac for some 20 years and who had built it up into the professional organization it is today. That property, sold to Windfall Mines and Oils for $100,000 and 250,000 shares, became the focus of the biggest mining scandal the country had ever seen. It put MacMillan in jail and prompted a royal commission that, while cleaning up a lot of questionable practices in the exploration industry, effectively killed its entrepreneurial nature.

The result was that only a couple of major discoveries were made in the ensuing decade — half of them in Ontario and none of them by junior companies. Those commission recommendations, combined with the onerous tax reforms of 1972, made the 15-year period a difficult one for prospectors like Larche. Still, he stuck with it, becoming a director of the pdac and, later, president of the Porcupine Branch, a post he has now held for 14 years. He also spent several years on the Ontario government’s Advisory Committee for the Revision of the Mining Act.

Having been through it all before, Larche realized that the bad times for the prospector couldn’t last forever. He was right. What he didn’t realize was that he was going to be one of those responsible for bringing the exploration industry back to its current prominence.

Actual prospecting for base metals has had neither the attraction nor the rewards which gold has presented. And so, until a bull market for gold was to come along, there was little chance that the lot of the prospector would improve. That came in the late 1970s when the gold price erupted to record levels, prompting every prospector worth his salt to hightail it into the bush and re-stake his favorite showing. But that alone wasn’t enough to revitalize the prospecting business.

A discovery was needed for that to occur, and when Larche and MacKinnon teamed up to stake the Hemlo discoveries, they provided the catalyst for just that. Best of all, two out of the three mines that have since been put into production were discovered by junior exploration companies, and the soaring stock prices whipped the Vancouver Stock Exchange into a frenzy that had not been seen in Canada since the Texasgulf rush. Larche made his own windfall after the discovery, receiving two million shares of the new Hemlo Gold Mines as well as hanging on to a 1.5% net smelter return on the more than 180,000 oz gold per year that will be produced from the David Bell mine, owned by Teck Corp and International Corona Resources.

It was the discovery of Hemlo, at least in part, that opened enough eyes in government to bring in the flow- through financing provisions that have made the exploration industry one of the healthiest of all sectors in Canada. And so it is with some irony that Larche, in his new position, finds that convincing the federal government to retain its flow-through mechanism is one of
the most serious tasks he has to face.

While there is a general consensus in both the government and private sector that flow-through won’t be thrown out as part of Finance Minister Michael Wilson’s much-talked- about tax reforms, there has been enough whispering on the street to cause some serious concern.

“I have to be worried when I hear that the finance minister is preaching tax reform,” says Larche. “I remember the 1972 tax reform legislation that had such a devastating effect on exploration when it all but wiped out the incentives to prospectors and investors. Very little was discovered in the next 10 years. In the last four years, this government has created incentives to encourage the raising of risk capital which has been directly responsible for healthy exploration and many orebodies coming on stream for production.”

If flow-through is kept intact after the planned tax reforms, it will be, in no small part, due to the efforts of the pdac and its outgoing president, Lionel Kilburn. Spending a considerable amount of time lobbying the Finance Dept. and Energy, Mines and Resources, Kilburn and other pdac representatives were able to convince the government to extend the expenditure period until the end of February. He has also made sure that Ottawa knows the value of flow-through to the economy.

“We feel reasonably confident that the government will not seriously alter this system (of flow-through). We do expect some modifications. We know that the ministry is not comfortable with certain parts of it. But we would like them to change those rather than drop flow-through altogether.”

Larche points out that there is current concern that numerous jobs will be lost in the lumber industry due to the recent deal between Canada and the U.S. “Many of those jobs will be lost in communities where the exploration service industry can pick up some of the slack.”

If lobbying is the pdac’s most important function, the annual general meeting is probably its most widely appreciated. The largest mining convention in the country, this is when all the prospectors and developers and geologists and stockbrokers get together to toast in advance all those future Hemlos. Despite the boozy, smoky atmosphere that persists in the evenings, prospectors get a chance to show off some of their wares to the companies. No self-respecting prospector can afford to miss it.

“No matter how bad off I was, I always made it to the convention,” says Larche, who couldn’t even afford to stay at the Royal York Hotel for the first few years he attended. “It has always been a terrific opportunity to sell both your prospects and your self. You don’t actually do much business there, but you meet people socially and can call them up later. I’ve always gained back the cost of attending the convention, and things haven’t changed much in that regard. That is the biggest single thing the convention can boast, other than being one helluva good party.”

And for all those prospectors who dream of making the big score, what is it really like?

“I still try to get out in the bush when I can,” says Larche, who has a Lincoln but prefers to drive his Ford van. “I find there is a lot more paperwork to do and not as much time to prospect. It may sound funny, but it has not been easy for me to move into a life of luxury. Yachts aren’t my cup of tea. I’m not the type to sit on a beach. Really, I’d rather be doing what I have done for most of my life.