By JOSEPH QUESNEL
For Rob McEwen, when it comes to running a billion-dollar company, ideas are more important than where one comes from.
McEwen’s investment background is an asset, not a liability, in the company he has transformed in just under a decade. McEwen acquired Goldcorp Inc. as a holding company and transformed it into one of the wealthiest mining companies worldwide. McEwen knows something about strategy.
The CEO of Toronto-based Goldcorp Inc. did not come into the mining business with any prior experience in the mining industry. This, he says, has not handicapped him.
“My father had me charting stocks when I was 10 years old and my first investment was when I was 12 years old,” McEwen says.
Starting out in the brokerage business and flirting with corporate finance, McEwen seemed destined for a career in investment, like his father.
“I grew up in the investment industry. I didn’t come with a lot of knowledge of this industry. I ask a lot of questions that might make me sound naïve. I find asking a lot of questions allows you to find alternatives or unique ways of doing things.”
Finding alternatives and pushing the envelope is precisely what Goldcorp has been doing over the past couple of years. McEwen says he thrives on challenging the norms of the industry.
One of the ways he challenged them was with the Goldcorp Challenge. The challenge was unveiled in March 2000 at a mining industry meeting.
McEwen opened up gold exploration to the public through the Internet, something unheard of in the world of mining. Having taken over an
underperforming mine at Red Lake in northwestern Ontario, McEwen needed a break. The global mining market was in recession and the operating costs at the mine were quite high. At a seminar at Massechusets Insitute of Technology, McEwen was exposed to advances in computer technology and came to believe that some of that technology could be harnessed to find gold, and that he could get other people to do it for him.
McEwen refused to believe that the higher grade ore present in greater abundance in the mine next to his was all there was. So, he took a chance. He posted all the company’s geologic data sets about the Red Lake area onto the Internet and dared the world’s best geologists and prospectors to find out where the rich deposits were. In an industry known for secrecy, this strategy was unprecedented.
“What we were doing was putting ourselves out in the open,” McEwen recalls.
Exposing the company for all, particularly competitors, to see, was a daring move. But, according to McEwen, it was a highly calculated move to
build confidence in the company. The public was still reeling from the shock of a Canadian mining scandal that affected the entire industry.
“A lot of people were very nervous about everybody’s methodology or the idea of a company having a ‘special’ ore body after the whole Bre-X affair,” he says.
The fact that the company has drilled successfully at four of the top five winner’s sites, and that the Red Lake mine is now the world’s most lucrative gold mine is hard evidence that McEwen’s gamble paid off in the long run.
The move also allowed McEwen to hear from many of the world’s best mining experts that Goldcorp was moving in the right direction.
“What this did was give us a whole wealth of third-party validation of our methodology,” McEwen says.
More recently, McEwen has been attempting to improve upon the work Goldcorp has been doing at their Red Lake site by tearing down an old mine and building a new one. The key difference with the new mine is technology. Opting for the best, McEwen chose to wire the new mine with fiber optics. He has been data testing to have wireless communications underground.
Goldcorp has also been working with MD Robotics, the company that makes the well-known Canadarm used aboard space shuttles, in bringing ways to automate their underground operations. The company has also developed a virtual reality laboratory that is used to accelerate exploration and operation. In conjunction with Laurentian University, Goldcorp has built a satellite facility than can link with Sudbury and allow geologists to answer exploration questions.
Despite some naysayers, McEwen believes there is a future in the mineral business.
“I believe there will be many more mineral findings. Our government should be taking a much more active role in investing in natural resources.”
In McEwen’s viewpoint, the government should not be neglecting resource-rich Northern Ontario, in particular.
“The government seems to forget about Northern Ontario. We pay a lot of taxes out here.”
“If they don’t do that, maybe Northern Ontario should separate,” he says, half-seriously. “They might get a better tax rate for that. We should take a lesson from Quebec.”
Mining, however, is only half of what McEwen does. He is also known for his generous philanthropy. According to McEwen, he has donated about $13.5 million of his own money over the past two years. From donating to York University to helping create a centre for regenerative medicine,
McEwen has been active in the community. But, he saves his most important contributions for where his mining operations are located, especially Red Lake.
McEwen personally gave $250,000 to help establish a cultural centre there and donated $1 million to a local hospital.
“I wanted to give back to the community,” he says.
“Goldcorp has grown a lot and we’ve gone through many challenges. Our shareholders have done very well, myself included. I have great affinity for Red Lake. I wanted to give something back that would improve the well-being of the community. I thought health care, education and culture are all very important.”
His motivation, he says, is to improve the health-care system and ensure that it is available for the baby-boomer generation.
In the meantime, however, he plans on telling the story of how an insurance man turned an ailing mine into the richest gold mine in the world, one new idea at a time.
“You should go out and tell your story, especially when it’s a good story,” McEwen says.
