BRED IN THE BONE: Appropriately, LAC’s chief of operations was

Decentralized control and mine managers who are fully responsible for each of their mines. Thats the philosophy of LAC Minerals, a million-ounce producer with an empire in both the Americas overseen operationally by Gerry Gauthier, Senior Vice President, North American Operations.

Gauthier has been closely associated with the gold mining industry in one way or another all his life. Born on the “Golden Mile” of Kirkland Lake, he knew from the earliest of days that the reverberation of underground blasting, which rippled through his home, marked the end of shift at Kirkland Lake’s line of mines and the arrival home of Gauthier senior. Gauthier senior, now a lively 75 year old, was a miner for most of his working life.

Mining runs in the Gauthier blood. Not just any kind of mining but gold mining, where there is still an art in robbing the earth of its metal. For despite all the revolutionary changes in mining technology there is something extra needed to make a successful gold mine. A special mix of experience and judgment and what cannot go by any name other than intuition.

As the chief operations man, Gauthier encourages and cultivates the growth of these vital requisites, and mine managers of LAC’s nine operations in North America really do manage and direct the operations entrusted to their care. Trust and confidence are placed in the man on the spot rather than on the organization in far-off Toronto.

SUCCESS IN GOLD MINING REQUIRES EXPERIENCE JUDGEMENT AND INTUITION

Graduating from Queen’s in 1971, Gauthier, now 45, has spent more than 20 years exclusively in the mining industry, the last 12 with LAC. He became manager of Bousquet No. 1, bringing that mine into production in 1979. He was then appointed manager to repeat the process at LAC’s Page-Williams mine (now the Williams mine of International Corona and Teck Corp.). Gauthier put the necessary staff together, and got to work on the feasibility study for a 6,000-ton-per-day underground and open pit operation. He is justifiably pleased that the mine has developed in very much the way it was envisaged and within the original budget. The mine came into production in late 1985 and is one of Canadas lower cost operations.

Bringing new mines into production can be extremely frustrating. A considerable amount of pressure is brought to bear. The company is in a rush to complete construction and there is a host of governmental regulations to be complied with. The opportunities for friction to develop between company and government officials are legion. Gauthier has gone through the mine making process in both Quebec and Ontario, and was asked if there were any real differences in dealing with the two governments: “No, there was nothing that could be pointed to. In general terms there appears to be a recognition by the Quebec government that mining is an important element of the economy and that its growth should be encouraged. These sentiments are perhaps less accented in Ontario but so far as the actual regulations are concerned, and the manner in which they are implemented, I would say there is little to choose between them.”

The environment is another area of governmental involvement and a major one. To Gauthier, both the mineral and forestry industries paid little attention to the environment in the past, “the result is that both industries have seen their chickens come home to roost.” Mining companies of an earlier era delivered tailings slurry to the nearest lake or rudimentary dam and that was that. Now, corrective measures have come down on the industry with a vengeance. (At the same time, there is a general perception in the industry that the pendulum has swung too far in favor of environmentalists.)

LAC is now discharging a final effluent that is well within permitted tolerances from many of its dams. The cause for concern is that some environmentalists are pushing for zero levels of discharge. “If this should come about, the situation will be absurd. Already, some of our discharge is purer than the natural water of the area.”

For Gauthier, the toughest problems are those he can do nothing to influence: metal prices, currency exchange rates, inflation and, the latest hurdle, increasing hydro costs. Improvements in productivity stimulated by new technology and further improved by having the right people in the right places, are undercut if not wiped out by these factors.

It is no surprise that a VP who is a mining engineer by training and a gold miner by instinct should find his greatest challenge (and satisfaction) through overseeing LAC’s operations. Fitting together a tailored mining system and a motivated work crew is Gauthier’s long coat and no better tested than at Doyon. This is the 250,000-oz. producer owned in a 50/50 arrangement by LAC and Cambior Inc. and managed by LAC.

At Doyon, there are several orebodies with varying characteristics. Some are narrow with strong walls, others are wide with weak walls and there are segments of orebodies ranging between the two. These conditions require a series of mining methods and an uncommon flexibility in the operators. With Gauthier, flexibility and initiative are cultivated — brain storming is the mode and Doyon’s efficiency the result.

A current example is the soon-to-be trial of a roadheader in one of Doyon’s softer orebodies. This will entail not only the application of the machine itself, but the introduction of a complete mining system including belt conveyors and systemized rock support. To cap it all, it will be in the undercut-and-fill mode.

It is very probably this manner of tackling operating problems, as well as an intimate familiarity with Doyon’s several mining systems, that recommended Daniel Vanin to manage the El Indio mine in Chile. Vanin was Doyon’s mine manager until April, 1991. Already, El Indio is one of LAC’s larger gold producers. In a few years it could well be at the top of the list.

LAC is not exclusively a gold miner. In the 1950s and ’60s it operated the Willroy mine for copper and zinc in the Manitouwadge area next to Noranda’s Geco operation. And LAC would have been quite pleased in the 1970s to have found base metals in the Doyon area north of the Cadillac Break. In fact, base metal mineralization was anticipated when exploration first got under way. Bousquet No. 2 is within that area, and, in geological terms, this orebody is a massive sulphide deposit carrying 0.71% copper. It could only be considered a copper deposit with tongue planted firmly in cheek. Its claim to fame is accessory gold to the tune of 0.25 oz. per ton — some copper deposit.

ALL POTENTIALLY LONG LIFE AND POTENTIALLY PROFITABLE OREBODIES ARE TARGETS FOR LAC

LAC, however got exactly what it wanted when it acquired the Toqui mine in Chile, a 1,300-ton-per-day underground mine. The product is zinc. The acquisition was made long before LAC became interested in Bond, which also ran an operation in Chile. This underscores the reality that all potentially long life and potentially profitable orebodies are targets for LAC — gold yes, but not necessarily gold.

In terms of the next orebody to be found, Gauthier’s geographical preferences for “where next?” were drawn with a broad brush. Considering all the modifiers — availability of technical skills, infrastructure, taxation, disposition of regulatory bodies and potential for developing major ore reserves — he nominated Chile and Nevada sharing top place, and in Canada, Quebec second, and Ontario third.

Nevada has established itself as a major gold producer, with Chile well on its way. Quebec, even today, is still in its growth stage. It has a skilled workforce, and technical expertise is not only available but of the highest order. Nor is the government antagonistic.

Anywhere specific in Quebec? – “Yes, we’re already there, Val d’Or to Noranda. There are a good many mines to come out of that country yet.”