“You can send them to charm school, you can polish them up, but real managers are born. If you don’t have the latent talent you won’t be a good manager.” John Hansuld, whose grip on the wide-open throttle of Canamax Resources is as firm as it was at its inception in 1982, comes from the “either-you’ve-got-it-or-you-don’t” school of management. Those are his words quoted above and, if the proof is in the pudding, Hansuld doesn’t lack management savvy. Bell Creek is now an operating gold mine. The Kremzar deposit in northern Ontario and the Ketza River prospect in the Yukon should yield their inaugural dore bars this year. And two other prospects are being groomed for production decisions. In fact, the Hansuld timetable calls for gold production to reach a yearly 160,000 oz by 1990. A year ago, the company could hardly claim to be producing even an ounce of gold. There are those who would rain on Hansuld’s parade and play down his achievements. They argue that Canamax was born with the equivalent of a corporate silver spoon lodged in its mouth. Its parent, the giant U.S.-based amax, blessed the Canadian corporate child with an enviable portfolio of exploration properties — the Midway project, for example, the huge Manitoba potash find, a Hemlo property play and Bell Creek. In all, Canamax held interests in 91 properties.
“We had a running start,” Hansuld concedes. “We had the organization, competent experienced people, a bunch of properties and the name association that lent credibility to the whole concept. But we didn’t have cash flow.” And he adds that of the mines coming on-stream now, only Bell Creek came with the initial package of properties. Matheson was in the portfolio, but it was strictly a grassroots affair when the company went public. Forgotten too is the fact that it was Hansuld, as amax’s chief of mining exploration, who helped assemble that basket of prospects.
John A. Hansuld was born in Port Arthur, Ont. (now part of Thunder Bay), the son of a school inspector and a mother whose roots lay in the red soil of Prince Edward Island. (She was later to write a novel set in the province, which her son privately published after her death.) At the age of five, he moved with his family to southern Ontario, eventually settling in Galt (now Cambridge). By Grade 13, the teenager had still not decided on a career choice. He enjoyed the outdoor life, having worked summers on his uncle’s farm, but farming was ruled out and forestry lacked appeal. Rocks, however, were another matter, so after graduating from high school, he chose geology and McMaster University in Hamilton, Ont.
During Hansuld’s third year at McMaster, his father died. To finance his education, he became a head- waiter at a restaurant and sold Christmas trees and pure-bred Yorkshire hogs in his spare time. He also managed his father’s stock portfolio, spending a “goodly amount of time” at a brokerage office. Summers were spent working for mining companies, for the most part on geochemical projects.
By his fourth year, he had become intrigued by the mine-finding potential of geochemistry. In those days, geochem was a hot, new theory with few practitioners and even less of a body of knowledge from which to launch practical investigations. The practitioners themselves were geologists smitten by geochemistry’s potential, Hansuld recalls. With his B.Sc. from McMasters in hand, he opted for a master’s degree at the University of British Columbia (ubc), where he delved into in-situ leaching at the Brittania copper mines — a forerunner, he says, of the heap leaching thesis so prevalent today.
After ubc, he put theory to practice with Brinex, the exploration arm of Brinco, in Newfoundland. A year later, in 1957, Hansuld was offered a National Research Council scholarship to study the geochemistry of ore formation. He maintained the Brinex connection as a consultant and moved to Montreal to work on a doctoral thesis at McGill University.
“I got very high-powered into thermodynamics at that point,” he says. “I had my own lab and all the new- fangled equipment.”
But a life of test tubes, lab coats and learned treatises on geochemistry was not in the cards. In 1961, he was offered two jobs, one with Gunnar Gold and the other with amax. He opted for amax because it was a growing powerhouse in base metals with a decentralized management structure that offered “plenty of personal freedom.”
Working out of amax’s Denver offices as a staff geochemist first and then as manager of exploration research, Hansuld travelled the globe reviewing the company’s molybdenum and copper plays. In 1967, he returned to a permanent posting in Toronto as amax’s regional exploration manager for eastern Canada.
“Those were the heady days of nickel,” Hansuld recalls. “Everybody was chasing nickel.” The Toronto office spent between $10 million and $15 million a year on mineral exploration, largely base metals.
All the while, Hansuld rose through the amax ranks. He was appointed chief of Canadian exploration in 1973 and by 1978 was senior vice-president of amax Exploration. The history of Canamax, however, begins three years earlier when Hansuld and the Canadian unit’s business manager, James Spalding, suggested amax spin off a piece of the Canadian exploration firm to thwart any problems posed by the Canadian government’s Foreign Investment Review Agency.
The parent didn’t respond until much later when, during the recession of 1981/82, it started losing gobs of money and couldn’t find the level of exploration that its Canadian arm was requesting.. By that time, Hansuld had already committed to paper a proposal for a free-standing Canadian entity. He tried to entice institutional investors with the proposal. But in the depths of a wrenching recession, who could blame the cautious Bay Streeters for turning thumbs down on a company that was knee-deep in what, for all they could see, was moose pasture? It was rather straightforward — no cash flow, no financing. Fortunately, at the time Hansuld was peddling the Canamax idea to institutions, he was also handling his deceased father-in-law’s personal finances. Tax shelters were a big part of the task and, wading through murbs (multiple-unit residential buildings), movie deals and oil funds, Hansuld became intrigued with a flow-through offering by Newmac Oil & Gas. He wondered whether the same type of share offering could sell in the mining industry? The idea was put to the amax board in Greenwich, Conn., in September, 1982, winning almost immediate approval. Back in Toronto, Hansuld laid it all out to four major brokerage firms. Richardson Greenshields warmed to the idea and so Canada’s first major flow- through mine financing made its debut — a $29-million deal comprising flow-through shares and ordinary common shares.
The issue was a success. Initially, an approximate $20-million offering, it grew to $29 million as investors clamored for shares. Says Hansuld: “We probably could have got $35 million,” but amax had finally to put a cap on the deal. The money bought Kremzar and Ketza River, gave the fledgling firm a fistful of cash, and earned Hansuld a reputation as Canadian mining’s father of flow-through.
That initial offering, however, had a second, now almost-forgotten, element — the Midway project. Midway was a joint effort between Canamax and Regional Resources. At the time, the rich silver/zinc/lead property looked fantastic. An added element of glamor was the participation of the Hunt family of Texas through its company, Procan Development. About 80% of the early holes that were collared bit into rich material, “and visions of sugar plums started forming in people’s minds,” Hansuld recalls. Soon after the financing had closed, however, fill-in drilling turned out to be disappointing. The operator on the property was Regional Resources. For Canamax, the failure of Midway meant little. Hansuld steered the company almost exclusively into gold because it was imperative that this new stand-alone company generate cash flow as fast as possible.
Today, Canamax is on the brink of ris
ing into the upper echelons of Canada’s gold producers, its driving force a determined, often-impatient man of 56, a self-described dealmaker whose visits to the company’s exploration camps have been limited to no more than two days. “I’ll start running the camp,” he says. He thinks, though, that he’s beginning to “mellow.”
“I’ll go into a meeting and just sit there. But what I can’t stand is going in to a meeting when the main issue isn’t even put on the table and dealt with.” He says that as a manager he’ll let his people run their own show. But when the results aren’t there, he’ll step in.
Terry Flanagan, a Canamax director and president of Muscocho Explorations, says Hansuld “isn’t what you’d call a laid-back sort of guy. John’s very straightforward. He wants to go and get a mine going.” However, he said the Canamax president is also a team-player and a thoughtful manager who has established a generous stock purchase plan for senior and even very junior salaried employees.
Publicly, Hansuld has seldom minced words about his ambitious plans for Canamax. Early in 1985, he stated that within two years “we expect to be an operating mining company, and one that’s approaching financial self-sufficiency.” A year later, the company boldly set out its timetable — to develop one new mine every year over a five-year period.
“I wasn’t trying to be brassy,” Hansuld says of such pronouncements. “I believed what we were saying. People have doubted me, but I’ll do it. We’ll be right on or ahead of schedule by September of this year.”
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