Late in the afternoon of July 10, Jim Gallagher answered the phone call that no mining executive ever wants to receive.
Pascal Goulet, a 38-year-old husband and father of two, had been killed while operating an LHD loader underground at Lac des Iles Mine.
“I was in Toronto, and you almost know the words are coming before you hear it,” said Gallagher, speaking at a Sudbury meeting of the Canadian Institute of Mining, Metallurgy and Petroleum. “In my 30-plus years, there have been fatalities at mines I’ve been associated with, but it’s the first time I’ve been in that management line of authority on a fatality.”
Shaken by the news, Gallagher, COO at North American Palladium, the mine’s parent company, arrived late that night at the mine, where police were already on site. Over the next few days, as Ministry of Labour investigators arrived and began the task of piecing together evidence, Gallagher and the management team met with Goulet’s wife, two daughters and extended family.
They were consumed with knowing whether Goulet had made an error in judgment while on the job, Gallagher said. Goulet had always promised his wife and children he would work safely so he could return home to them at the end of the day.
“Those are powerful words when you’re looking at the widow and you’re sitting beside the two girls,” said Gallagher, his voice breaking. “Those words will rattle around in my brain for the rest of my life and they’re going to influence decisions I make.”
More than four months later, answers about what happened that day to result in the loss of life remain elusive. Goulet was mucking at the mine’s 825 level when he was visited by his safety coordinator in the morning. At 2 p.m., when the coordinator came back for an update, Goulet was out of the vehicle and had been struck by a piece of muck.
What is clear is that Lac des Iles, located about a 90-minute drive north of Thunder Bay, lacks a stringent culture of safety, said general manager Hugh MacIsaac.
In 2013, the mine had 47 reportable accidents, and this year, has had four lost-time accidents and 16 medical aid accidents. Many of the incidents aren’t serious, but accidents that, in other operations, would not result in lost time, MacIsaac noted.
“Safety is not of value, inherent in the behaviours that we’ve seen at site,” MacIsaac said. “We’ve struggled.”
Management has had audits done, visited other mines to see their procedures, weighed the merits of different safety programs, and conducted closeout investigations to figure out what has led to the behaviour, MacIsaac said.
The entire senior management team has been replaced; Gallagher was hired earlier in 2013, and MacIsaac followed a short time later. Only two people have been there longer than a year.
For a company that received a John T. Ryan Trophy for safety in 2011, it’s been a hard fall from grace, but its dismal safety record was reflective of further problems at the company.
Beset by poor management, overspending and a high turnover rate, phase one of the project’s development was well over budget and almost two years behind schedule in 2013. Brookfield Asset Management was brought in to rescue NAP, which was in danger of going out of business on more than one occasion, Gallagher said.
“We certainly were overextended; we weren’t paying our bills on time,” said Gallagher. “It really boils down to project management: there was none.”
NAP is now working to get back on track. At its peak in 2004, Lac des Iles produced 300,000 ounces of palladium. Its guidance for 2014 is 175,000 ounces. The company is also processing a surface stockpile from its open-pit days.
“It wasn’t economical then, but it is economical now, and we actually blend it with the underground ore,” MacIsaac said.
The real prize is the hanging footwall of the Offset Zone, and the company will spend $10 million this year to define the ore body at depth, MacIsaac said.
On the list of projects for 2015, NAP plans to change its stope design to improve productivity, streamline the material-handling process and improve the reliability of its fleet. Cementation has been engaged to sink a shaft to the 1,400 mark.
“There’s a huge opportunity at depth, we’ve just got to get that drilling done and basically extend the life of the mine,” MacIsaac said. “Currently it’s sitting around 2019, but there’s no reason it can’t be extended out to 2030.”
Gallagher is confident in the viability of the deposit and the project, calling it one of the best out there, especially in light of the socioeconomic challenges plaguing palladium producers in Russia and South Africa.
“We’re definitely in the right metal at the right time,” he said. “We’ve got a great ore body. It should be simple to mine; it should be fun to mine. But we’ve got some baggage, we’re behind the eight ball in a number of areas and we’re trying to play catch up.”
NAP is aiming to have a preliminary economic assessment completed by the first quarter of 2015, followed by a pre-feasibility study for the third quarter.
