Editorial: Boyd and Scherkus build Agnico-Eagle into powerhouse

No company better embodies the spirit of Canada’s plucky gold mining sector today than Toronto-based Agnico-Eagle Mines, with its technical competence, unshakeable faith in gold, independent streak, and proven ability to execute truly visionary growth.

While Agnico-Eagle’s astonishing success over the past decade is the result of a team effort, the pair who have been leading the company in the boardroom and at the mine site during this exceptional period are the co-winners of our Mining Person of the Year award for 2007: Agnico-Eagle’s vice-chairman and CEO Sean Boyd, and president and chief operating officer Eberhard (Ebe) Scherkus.

Unlike the peripatetic career paths of many in the business, both Boyd and Scherkus have spent most of their working lives at Agnico-Eagle, and have maintained an admirable humility about their lofty positions and seven-figure take-home pay packages, perhaps having been tempered by living through several gold price cycles and seeing fate dish out equal amounts of heartache and glory.

Boyd, a certified accountant, obtained a Bachelor of Commerce degree from the University of Toronto in 1981. After a stint as an accountant at Clarkson Gordon, he joined Agnico-Eagle in 1985 and worked as a comptroller until 1990. He was briefly secretary-treasurer, and then, from 1990-96, served as treasurer and chief financial officer. Boyd was vice-president and CFO from 1996 to 1998, and then president and CEO from 1998 to 2005.

In 2005, Boyd rose to his current position of vice-chairman and CEO. He joined the Agnico-Eagle board in 1998, and has served on the boards of several junior mineral explorers.

Scherkus, a professional engineer, earned a B.Sc. from McGill University. He, too, joined Agnico-Eagle in 1985, beginning as a manager of Agnico-Eagle’s LaRonde division in 1986.

Scherkus served as vice-president of operations from 1996-98, and has been chief operating officer since 1998. In 2005, he was promoted to president from executive vice-president. Scherkus also became an Agnico-Eagle director in 2005, and served in executive positions with subsidiary Contact Diamond (recently folded into Stornoway Diamond).

While its predecessor companies stretch back to the 1950s and beyond, Agnico-Eagle Mines was formed in 1972. With the late Paul Penna at the helm, the company entered the modern era in 1992 when it completed a gradual acquisition of Dumagami Mines, whose assets included the small and seemingly limited LaRonde mine in northwestern Quebec, which had begun commercial production in 1988.

However, there was the pivotal discovery in the mid-1990s at LaRonde of very large and rich gold-silver-copper-zinc mineralization at depth. This was followed by the gutsy decision during gold’s long, dark night of the late 1990s to keep sinking a single 2.25-km shaft (named Penna) that, when completed in March 2000, would be the deepest single-lift shaft in the Western hemisphere.

The Penna shaft and the significantly higher mining rates it allowed charted new territory for underground gold mining in Canada. While there were early operational problems, the revitalized LaRonde mine in time became one of the world’s lowest-cost gold mines.

As anticipated by the company’s devoted retail-investor base, LaRonde has become the foundation stone of a growing Agnico-Eagle empire, providing a gushing cash flow that has allowed the company to spread its wings in northwestern Quebec and pick up advanced gold projects in Finland, Mexico and Nunavut — all without significant dilution or the piling up of debt.

Agnico-Eagle’s acquisitions have always struck a good balance between building on the company’s strengths (i.e., a strict gold focus, fiscal prudence and operational excellence), and diversifying into new, but politically safe jurisdictions and different mining methods.

Moreover, the company’s long-standing faith in rising gold prices has made it easier to justify the tabling of takeover premiums that allow the offers to be friendly and quickly consummated, thus ensuring that Agnico-Eagle personnel can get right down to the business they do best: building great gold mines.

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