Back to the Mines

Mining in Canada seems to follow a pattern of seven years of fat, seven years of lean. The great uranium boom pumped $10 billion into the Canadian economy between 1950 and 1957, then fizzled. Now, after seven fairly slender years, a new mining rush is on. Some 900 companies are drilling for metals and oil from New Brunswick to British Columbia.

The big dig has been prompted by half a dozen recent oil, gas and metal strikes, notably the spectacular copper, zinc and silver find by Texas Gulf Sulphur near Timmins. Ont. More than 1,000 prospectors have staked 8,000 claims, some as far as 65 miles from the strike site. Texas Gulf Sulphur will spend $20 million to develop its Timmins properties, and such Canadian firms as Noranda Mines, Hudson's Bay and Consolidated Mining together have raised their exploration budgets in the area by $10 million. International Nickel put 30 surveyors to work, some in helicopters, and even staked more than 40 claims to the Timmins airport--under which copper is thought to be buried.

The hunt is by no means confined to Ontario. In western Canada and the Arctic regions, Imperial Oil, Home Oil. Shell Canada, California Standard and half a dozen other firms intend to spend more than $300 million exploring for oil and gas this year.

Frenzied Trades. Mining men have always known that Canada hides a treasure of minerals. But because of high development costs, great distances from markets and erratic transportation, they have exploited that country less than the U.S. Some recent changes now make the effort and expense worthwhile. World prices of copper, lead and zinc have jumped because of political unrest in Chile and Africa. This year also, prospectors struck oil in Alberta, gas in British Columbia and nickel in Manitoba. Geologists estimate the value of the Timmins find at $1 billion, and many of them believe it ultimately will return much more.

All this has led to the most frenzied trading in mining stocks in history. Over the past two months, more than 1 billion shares in Canadian mining companies have changed hands on the Toronto Stock Exchange, and more than 14 million shares of Texas Gulf have traded on the New York Stock Exchange. Brokers figure that half a dozen mining companies have raised between $4,000,-000 and $6,000,000 by floating new shares. Some of the funds have already slipped back across the border, are being used by United Comstock Lode Lines to reopen the dormant Comstock gold mine in Nevada. Among the half dozen new millionaires at Timmins, 28-year-old Pat Giardine made a killing on both his claims and controlling interest in Bunker Hill Extension Mines -- which he had bought for a song.

Staggering Markups. Promoters have also made millions by buying prospectors' claims and selling them at staggering markups to speculators. Much of the Timmins land is owned by descendants of Boer War veterans, who were granted the mining rights in perpetuity. One promoter tracked down an heir in Buffalo, paid him $400 for his rights, sold them the next day for $30,000. There has been more claim jumping in Timmins in the last two months than in the previous 50 years.

Whatever the outcome of the searches and speculation. Canada's economy is sure to profit. The country is the world's third biggest miner, behind the U.S. and Russia. From mines and wells already operating, Canada this year expects to increase output of copper, zinc, oil and gas by 10% , potash by 50% . It will earn more than $3 billion from minerals, and Federal Mines Min ister William Benidickson predicts that output will reach $4 billion by 1970.

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