OPERATIONS MAN: Placer Dome’s Tony Petrina

In 1951, the MacLeod Cockshutt gold mine near Geraldton, Ont., hired the rangy, 16-year-old son of one of its miners. The boy had just graduated from high school, tops in a sparse class of only seven. He fudged the matter of his age to get past the gate at MacLeod-Cockshutt and eventually mastered the pneumatic mysteries of jacklegs and stopers. He earned enough to engineer a year’s tuition and board at Lakehead Technical Institute. After Lakehead, he became an itinerant miner travelling the northern circuit. He picked up paycheques at the Milliken uranium mine in Elliot Lake, the Steeprock mine near Thunder Bay and a few Sudbury Basin mines. At Queen’s University, he polished off the engineering degree initiated at Lakehead, graduating among the top three in his Queen’s class. Unlike his earlier academic triumph, the Queen’s accomplishment requires no qualifiers. And here’s another: at 54, he belongs to an elite class as president and chief executive officer of Placer Dome.

Anthony J. (Tony) Petrina’s ascension required practically four decades. But the tramp miner in soiled coveralls ultimately became the tailored chief executive of Canada’s leading gold producer. Last year, the company’s worldwide operations poured some 1.2 million oz of gold. Among the non-gold assets, Placer Dome, the result of a merger between Dome Mines and Placer Development, operates the world’s lowest-cost molybdenum producer (British Columbia’s Endako mine, featured in the May issue), a low-grade copper mine (Gibraltar, featured in the July issue), and one of the few silver mining companies that has successfully shrugged off persistently low silver prices, Equity Silver Mines of which Petrina is president. (Equity Silver has become increasingly aggressive in joint-venture exploration deals over the past couple of years. In 1989, it acquired half-ownership in a small Newfoundland gold play called Nugget Pond.

Placer Dome’s larger gold producers on this continent (Campbell Red Lake, Detour, Dome, Kiena, Sigma, and, in the U.S., Bald Mountain and Golden Sunlight) keep Petrina well stocked with frequent-flyer points. But he logs the hard hours flying to Placer Dome’s burgeoning Australasian empire. In Australia, the company has interests in the Big Bell and Kidston mines. In Papua New Guinea, the Misima mine is operating and the Porgera project is advancing toward production. And a Chilean project called La Coipa is being developed.

Tall (a 6-footer), broad-shouldered, with bushy eyebrows, Petrina is the “operations man” and “the mine engineer” described by the press after predecessor John Walton’s surprise resignation more than a year ago. “I feel comfortable underground,” Petrina told The Northern Miner Magazine. “But I’ve had to develop the same degree of comfort at meetings with financial analysts.” About Walton’s difficulties, Petrina dismisses a question with a curt but polite “that’s history.” He would not confirm press reports that the Placer Dome board had balked at Walton’s proposal to remake Placer Dome into a mine financing house.

Nor would Petrina name the potential takeover targets Placer Dome has examined. The company possesses the wherewithal to do a big deal. It has immense borrowing power, nearly $700 million in working capital and an active acquisitions team with which to hunt for bargains or simply the right fit. But bargains are rare, it seems. “I kid you not. We have looked at everything, some (potential acquisitions) more intensely than others. Every single company that is acquirable, we’ve analyzed.” Some, he says, were summarily rejected. Precisely which companies and why, he won’t say. “The problem is that just to go out and buy a company doesn’t necessarily do something for shareholders. So you look for something that would make your company worth more if you had it. We’re opposed to a hostile takeover.

The acquisition(s), he stresses, will be in mining. “We are a mining company,” Petrina says, as if to dispel any doubts. “We’ll mine anything, anywhere. We want to position ourselves in any commodity, be it copper, zinc or what have you. We don’t care what it is as long as it is a lower-cost producer.” No acquisition deadline has been set, and it seems Placer Dome will not be rushed. “There’s always a right time to do something,” he says vaguely. For clarification, he cites the Gibraltar mine as a model. At commissioning, Gibraltar was blessed with cyclically high copper prices, enabling Placer to pay down development costs rapidly. When metal prices inevitably dropped, Gibraltar wasn’t hobbled by exhorbitant financing charges. “Once the debt is paid off, the options for survival are so much greater,” Petrina points out. Even a 2-year delay would have meant, at best, an extended payback period and, at worst, no production at all from Gibraltar. “Mining,” he says, “is a very opportunistic business.”

And the difficulty in determining opportunities (i.e., the potential for economic development) is that no orebody can yield entirely reliable, pre-development information. Rarely can anyone foresee accurately what will happen until it actually does happen — when the ore is dressed for shipment and sampled. (Some would insist that nothing counts but smelter receipts.) “When you decide you want to build a mine, you do the feasibility study, the plant design and so on. What you’re really doing is taking a small sample of the mining material. But orebodies are seldom homogeneous. So let’s say that out of a 20-million-tonne orebody you take a 20-tonne sample. You’ve taken a millionth of an orebody with different types of ore. You take this to the lab and you extrapolate. Your chances of being 100% right are zero.” Petrina’s solution is to build a flexibile plant that can be re-configured when problems surface. Coupled with that, success requires the right people with the right stuff. To Petrina, the right people are not toadies. “The last thing I want is a bunch of yes men.” But after consensus on a given matter, “it’s important that dissent become invisible.” The right stuff, then, includes dedication to the team concept and, he adds, sound judgment, intuitive thinking and experience.

Petrina’s career got rolling at the Craigmont open pit and underground copper mine near Merritt, B.C. The plant had just undergone commissioning in 1960 when the junior mine engineer arrived. “That’s the position that every young mine engineer wants to be in — to see the mine through from zero to an operating entity.” He didn’t waste the opportunity. Eight years later, he was mine manager. Soon afterwards, he was appointed president of Craigmont and summoned to the pre-merger Vancouver head office of Placer Development. Up to then, he had spent his time in small wilderness towns like Merritt and Elliot Lake and Manitouwadge. Now the miner’s boy came in from the cold and, curiously, felt a chill. “When you’re the mine manager in a small town like Merritt, everybody knows you — you’re a semi-important person. You go to the city to work in an office and you’re a nobody,” Petrina recalls.

A nobody no longer, Petrina oversees an international workforce of 5,500 laboring on three continents, a gold reserve of 19.3 million oz (for purely idle interest, worth roughly $7.7 billion today), oil and gas interests, the operations of more than a dozen mines and several vast and some not-so-vast development projects. He began guiding Placer Dome after the merger — a friendly deal, as he describes it, but one with a human cost. By and large, the anxieties and stresses attending the merger are over for the employees. And for Petrina. “There were difficult things to do early on, but I feel comfortable now.