Editorial Respect for Placer, Dome, Campbell

Almost since its incorporation way back in 1912, the Dome mine at Timmins has been dubbed the Big Dome. But we venture to say that its founders, who certainly did not lack foresight and guts, could hardly conceive just how big their company was to become.

We refer, of course, to last week’s startling announcement of the proposed marriage of Dome, Campbell Red Lake and Placer Development into a single multi-billion dollar, multi-national corporation that would almost overnight become the biggest gold producer in the western world, not to mention its very substantial output of silver, copper, molybdenum, oil and gas, etcetera.

This new yet-to-be-named company, we are sure, will command immediate worldwide respect, thanks to the past performances and successes of all three. Also, it will have immense borrowing power — the engine that drives big corporations ever bigger, suggesting that still further growth likely lies ahead.

The announcement was immediately received with enthusiasm in the marketplace, which saw the shares of all three participants advance sharply — a healthy sign indeed. Even the senior analysts, a group that all too frequently shows only minimal sympathy toward any mining venture preferring a wait-and-see attitude (Hemlo being a classic case) seemed to applaud.

Fact is, this new company opens a whole new ball game for investors, particularly foreign investors. And it comes at the very time that gold is becoming a growing part of most portfolios of the big institutional investors. By and large European investors like Canada, but they also like liquidity — companies with large enough market capitalization to enable investors from far away to move in or out of their investments with comparative ease. These we have in few numbers, especially gold mines.

For anyone who likes gold (and who doesn’t these days), these three companies make a great mix. The Dome mine itself is probably good for at least another fifty years. And the Campbell, which we have long considered one of the richest and best all round gold mines in this country, won’t be too far behind. Both, of course, are domestic underground operations — a business they know backwards. Placer, on the other hand, has demonstrated its strong and highly successful experience in open pit mining and on a worldwide basis. Right now it has big new open pit gold projects at an advance stage of development in both Papua, New Guinea and Australia.

Yes, the mining industry in this country is unquestionably undergoing change. It’s growing up. And that’s the way it should be. Right now the accent is on precious metals, which sees an exploration boom of near record intensity under way. We already have something like two dozen new gold producers shaping. And there will be more. Most of these are relatively small. But small mines sometimes become large ones. We have room for both. Too, the merger of the above three companies into one could cause more interest to be shown for other smaller gold mines.