FYI - THE PLACER DOME CLUB - $1bn of shareholder funds has been handed-out, between former colleagues
This is an article about the Campbell mine in Canada and how a small group of mine managers rose up the ranks of the industry.
It is also about relationships and how over $1bn of shareholder funds has been handed-out, between former colleagues
   
   
Campbell was one of Canada's largest gold mines. It was owned by Placer Dome, a highly-acquisitive gold miner,
which was bought out itself by Barrick Gold in 2006. Placer Dome's executives fought against the deal and
the breakup that followed. Barrick's hedging book, they argued, was a huge liability, and its
Pascua Lama project in the Andes faced massive risks.
Both claims later proved correct. But Barrick's aggressive founding chairman Peter Munk muscled the deal
through, Placer Dome's Canadian assets were sold off to Goldcorp and Campbell was absorbed into its
Red Lake operations.
Many of Placer Dome's insiders left. Its head of exploration in Canada, Robert Pease, founded a new
company, Terrane Metals, which snapped up Placer Dome's Mount Milligan deposit in British Columbia.
He took several colleagues with him, including Campbell's senior geologist, its chief geologist and mining
engineer Wes Carson.
Other mine managers from Campbell disbanded and shot up
the ranks. Campbell's business manager Jacques Perron is now CEO of Thompson Creek. Campbell's
general manager Michael Winship is CEO of Rubicon Minerals. And Campbell's former mine superintendent
Bill Shand is Rubicon's head of operations.
Ghana-focused Golden Star has also drafted in several former Placer Dome insiders, including chairman
Tim Baker, one of Placer Dome's senior managers in Chile, and technical director Martin Raffield, another
former superintendent at the Campbell mine. Tony Jensen and William Hayes, who were senior managers
at Placer Dome for 18 years, have meanwhile risen to the top of gold royalty group Royal Gold, as CEO and
chairman.
In the 10 years since Placer Dome was broken-up, the raft of companies now led by its former insiders have
dealt almost exclusively with one another, shuffling assets, staff and shareholder money in a closed loop of
deals.
Thompson Creek bought Terrane and its Mount Milligan
deposit in 2010 for C$650m; Royal Gold has pumped $782m into Thompson Creek, plus $75m into Rubicon
and up to $170m into Golden Star; Wes Carson jumped from Terrane to Thompson Creek and was
promoted to mine manager; Tony Jensen has joined the board of Golden Star, and Golden Star's former
chairman has joined the board of Royal Gold.
The loop offers a new insight into Royal Gold's most baffling and least profitable deals: Rubicon's Phoenix
project was suspended in November only five months after its first gold pour; construction costs at Mount
Milligan have risen from C$915m to C$1.5bn and counting, whilst Golden Star recently amended the terms
of its agreement with Royal Gold, landing an extra $15m to $20m.
Mining, like any industry, is built on relationships. But with operators including Teck, Glencore
and Anglo American all currently queuing up for financing deals over multi-decade mines,
shareholders might ask why Royal Gold is pumping money into smaller companies, all run by
former insiders at Placer Dome.
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