Mining's iron lady has her mettle tested
Thursday, March 19, 1998
By Susan Bourette
The Globe and Mail
Peggy Witte, the union-busting, scrappy, renegade boss of Royal
Oak Mines Inc. , is facing one of the most vexing challenges of her
career -- one that some industry watchers believe could topple her
from her throne as the queen of Canadian mining.
Not since the 44-year-old American turned the Canadian mining
industry on its ear with her relentless $2.4-billion play for Lac Minerals
Ltd. -- which she eventually lost -- has the founder of Royal Oak
found herself in such a difficult spot.
Today, the stakes are much higher: The company she erected by
acquiring assets that no one else wanted is facing a serious cash crunch
and may not survive, industry watchers say.
The Kirkland, Wash.-based company announced yesterday that it
must find $85-million for its Kemess gold and copper mine in northern
B.C. over the next 30 days or bring it to a temporary halt.
But Ms. Witte maintained her composure. In a conference call
yesterday morning, she worked to allay fears, telling analysts and
reporters that Royal Oak was close to finding the capital injection it
needs.
It's vintage Witte.
She has been described as obdurate and confrontational. And she's
known for her resilience.
"This is survival. I'm not in business to be screwed over," she once
said, staring down a town after reopening the strikebound Giant
Yellowknife mine, where only seven days earlier an underground blast
had killed nine miners.
"Miss Piggy," some have shouted at her. Others have said her
management style makes "Peter Pocklington look like Bambi."
But she has her supporters. If anybody can turn things around for
Royal Oak, it's Ms. Witte, says William Sheridan, a Royal Oak
director and long-time friend.
Ms. Witte's management style will eventually pull the company through
its current woes, he says.
"She has a very effective management style that gets the company
through a crisis. Although the criticism might be made that other
executives aren't given enough scope in decision making. But it gets
things done."
It was her relentless attitude that won Ms. Witte the respect of the
movers and shakers in mining and financial circles. It also won her the
title of Mining Man of the Year in 1991, an honour bestowed on her
by the Northern Miner newsletter.
She was born in Fallon, Nev., in 1953 and grew up on a grain and
cattle farm. She earned a BSc. in inorganic chemistry and a Master's in
metallurgical engineering from the Mackay School of Mines.
In 1983, she resolved to set up her own mining research company,
and opened up shop in a low-rent industrial mall in Mississauga.
But it didn't satisfy her entrepreneurial streak. In the late eighties, she
founded Royal Oak Mines.
In the early years, she built Royal Oak by snapping up assets that had
been snubbed by other industry players.
"She's a real buccaneer," said one industry analyst who didn't want to
be identified.
"She boldly goes into areas that other people would probably avoid.
She went in and picked up a lot of assets which nobody wanted. She
really shook the trees. She's a tough operator."
Still, he says, she's made a number of blunders in recent years. In
hindsight, a number of the acquisitions -- especially those such as
Hope Brook in Newfoundland, and Colomac in the Northwest
Territories -- haven't paid off.
While it was difficult to predict the collapse of gold and copper prices,
which have helped push the company into its current mess, Ms. Witte
has taken too many chances, he says.
"Peggy Witte has taken on the difficult assets and tried to make them
work and has generally failed. This is just another case of that
happening," the analyst said.
"She isn't gone yet," added another industry watcher who requested
anonymity.
"There's a chance that she'll still pull it off. It looks pretty tough though.
If I were a betting man, I'd bet she's not going to make it." |
