TECK CORP. 74 Years of Mining

Gold is becoming increasingly important to Teck Corp. bringing the company full circle to its early history as one of Canada’s largest gold mine operators. The “new” Teck emerged in 1963, the golden anniversary of the founding in 1913 of Teck-Hughes Gold Mines, the corporate entity to which Teck Corp. traces its roots. In fact resolution of the legal dispute between Lac Minerals and International Corona Resources could give Vancouver-based Teck gold reserves of six million ounces — the third largest of any North American company.* Teck-Hughes grew out of several Ontario gold claims staked by two renowned Canadian prospectors, Sandy McIntyre, of McIntyre Porcupine fame, and James Hughes who would lend the discovery his surname. The county of Teck (named for the German Princess Mary of Teck, later Queen Mary) provided the rest. The original Teck family castle stands on a hill south of Stuttgart, Germany. The history of today’s Teck, emerging from a myriad of early mining ventures, is complex. In late 1970 the Montreal-based broker Bouchard & Co. attempted to analyse the corporation. Its report included 84 pages of tables, calculations and analyses, revealing the complexity of the Teck organization. The Bouchard report did make a key finding, however: “We feel that Teck Corp. is rapidly developing into one of the world’s major mining concerns.”

The Northern Miner Magazine, below, looks at Teck’s highlights through the decades. The Early Years

Teck-Hughes began in April, 1913, as a wildcat penny stock offering. In November of that year treasury shares sold for 18 cents with a prospectus touting a rich and promising vein which “shows free gold in large quantities and can be traced nearly across the claim.” Nipissing Mining Co. gained control, but by March, 1915, funds had run out. And while Teck-Hughes brought out $350,000 in ore, the company decided to abandon the mine. A U.S. syndicate, headed by Canadian Charles Denison, restarted the operation. Board directors and ownership would remain largely American until the 1940s. The First World War, manpower and strikes plagued the operation in the latter part of the decade but did not prevent a 50-ton mill from start-up. The Twenties

The times and the mine roared. After refinancing through a bond issue in late 1921, Teck-Hughes took off. Mill capacity was increased to 160 tons daily, new property was acquired and new high-grade reserves were found. In 1923 Teck-Hughes merged with adjoining Orr Gold Mines. And by 1928 mill capacity was 900 tons daily. The Depression Thirties

Teck-Hughes’ Kirkland Lake property hit a 1932 peak, earning $6.7 million in revenues and paying a 65 cents dividend. Mill capacity had again increased to 1,300 million tons daily. Four years of record earnings had given Teck-Hughes the funds to option, in 1932, the Read-Authier property in Bourlamaque Twp., Que. That December, Lamaque Gold Mines was formed to place the Read- Authier property into production. Within six years, Lamaque was producing $4.5 million in ore, becoming an important part of Teck-Hughes’ income. Lamaque was destined to become Quebec’s largest gold producer, producing more than $142 million during its lifetime. The Troubled Forties

The Second World War, strikes and depleting ore reserves all caused Teck- Hughes to drastically reduce the Kirkland Lake production rate to 250-300 tons per day. For the next decade, the mine’s average annual yield was $l.25 million. It was only improved milling methods and geological investigations at the end of the decade which reprieved the fading operation. In 194l the U.S. syndicate controlling Teck- Hughes appointed a majority of Canadians to the board, a foreshadowing of the Canadian control to come. The Fifties Look Forward

In 1954 Dr Norman Bell Keevil Sr discovered Temagami, the largest deposit of high grade copper in Canadian mining history. Temagami Mining Co. provided the cash flow needed to build the major mining entity Keevil envisioned. He merged Temagami with Goldfields Mining Co. to form Copperfields Mining Corp. By 1957 Teck-Hughes was one of six participants (Area, Leitch, Highland-Bell, Iso and Dome Mines were the others) in the Mattagami syndicate, which, using the new air-borne electromagnetic surveying techniques, discovered the Mattagami zinc-copper-silver orebody. In January, 1959, Copperfields purchased large blocks of Teck-Hughes, giving Keevil control of Teck-Hughes and Lamaque. The Sixties

In 1960 Kirkland Minerals, a property adjoining the Teck-Hughes gold mine, was acquired. This extended further Kirkland Lake’s operating life. A year later Teck-Hughes gained control of Consolidated Howey Gold Mines and Howey purchased controlling interest in Canadian Devonian Petroleum, the company responsible for discovering the Steelman Field in Saskatchewan in 1954. (Teck’s oil and gas division would stem from this acquisition.) In 1963 Teck Corp. was born through the merger of Devonian and Lamaque. Howey folded the same year with assets distributed to shareholders. The Seventies: the Afton Era

In 1971 Teck merged with Leitch, Highland-Bell, Area and Silverfields. A year later the corporation sold 60% of its Mattagami interest, using the funds (and a bank loan) to acquire an interest in Afton Mines and increase investment in Iso Mines and Brameda Resources. Iso and Teck held 50% of Afton’s shares. By the mid-70s two new mines had been developed: the $18-million Newfoundland Zinc Mines (63.4% held by Teck) and the $18-million niobium mine developed by Niobec Inc. (the Quebec Crown corporation Soquem held 50%, Copperfields 25% and Teck 25%). The mid-70s marked Teck’s entry into large-scale development with the announcement of the $80-million Afton co pper mine and smelter in British Columbia. In 1976 Teck increased to 50% its equity in Niobec, eliminating its interlocking holdings in Copperfields. The German mining and metallurgical company Metallgesellschaft acquired a 10% interest in Teck. By 1978 Afton was up and operating. Teck, along with Brameda Resources, bought a major interest in Yukon Consolidated Gold Corp which owned 21% of Lornex Mining Corp. The Eighties Edge

The boom of the ’70s turned into a recession which saw metal prices tumble. Teck entered the ’80s negotiating Bullmoose (it announced the $280- million project in 1981), establishing coal reserves in Burnt River, acquiring a 25% interest in Coseka Resources for $35.8 million and placing into production the $150-million Highmont mine. In 1981 interest rates soared and Teck began reducing debt. Its Coseka Resources interest was sold for $85 million. A 20% interest in Highmont was transferred to Metallgesellschaft for $22 million. By 1982 Teck had reduced its debt, but market prices caused the company to announce its first loss in 60 years. Teck continued divesting — selling several petroleum properties, a 10% interest in Bullmoose to Nissho-Iwai of Japan and 39% of Bullmoose to Lornex Mining Corp. Also, a 30% interest in Highmont was sold. In other developments, construction of Bullmoose begins — a component of the $2.5-billion coal, rail and port development in northeastern British Columbia. In 1983 Teck merged with Copperfields, acquiring a 60% interest of the Granville placer gold mine in the Yukon. A year later, the $275-million Bullmoose was brought into production $37 million below budget. In addition construction began on the $90-million David Bell gold mine at Hemlo, and mim Holdings of Australia became a significant shareholder of Teck. By mid-year the returns of cost-cutting were realized, with improved earnings. The same year, the Bell mine poured its first gold, Afton hit better grade, and Bullmoose was providing revenue. By 1986 Teck had the second highest earnings in its history. It launched a successful consortium which acquired controlling interest of Cominco, a company with significant orebodies and the largest zinc refinery in the world, at Trail, B.C. *In March, 1986, the Supreme Court of Ontario ordered Lac Minerals to give its $700-million Page- Williams gold mine at Hemlo, Ont., to International Corona Resources, a company whose confidential information Lac allegedly misused to obtain the patented claims on which the mine is located. Corona and Teck, which are already 50-50 joint venture partners on the David Bell gold mine at Hemlo, have also agreed to share equally any Hemlo interests. Lac launched an appeal of the Supreme court’s decision which was heard in late 1986. Should the Ontario Court of Appeal uphold the trial judge’s decision, Corona and Teck will share the Page-Williams mine.