Ontario's Mining Industry and Its Outlook for 1932

LIEUT-COLONEL GEORGE A. DREW, President, introduced the speaker.

HON. MR. MCCREA: The economic, political and social world is still waiting for the sunrise of better and brighter days. The world of trade and commerce is sick. It is suffering from commercial anemia. Some diagnosticians say the disease is close to the pernicious stage, or, as the doctors would put it, the patient has reached the crisis--a turn for the better is anxiously awaited, a turn for the worse is dreaded. Perhaps the patient is in the condition described by the small boy who, when asked as to the condition of his aunt, said, "Well, the Doctor says if she lives until morning he will have some hope, but if she doesn't then he thinks she will die." (Laughter.)

World trade and the production and distribution of goods have been slowed down. In some sections there is plenty. In other sections there is want and starvation. Those who need cannot buy while those who would sell scanner find purchasers. There are cargoes to move, there are highways, railways and ships ready for use, there are willing and eager hands to transport and distribute goods, but railways languish for business, ships rust at anchor, and men stand idle because of the slowing down of world trade. The world is crying for money, for stabilized exchange as a medium to assist in the disarming distribution of the products of our farms, mines and forests for world markets so that the proceeds of these at fair prices may move back into the pockets of our people to enable them to do all the things that money can do-to pay debts and taxes, to maintain homes, to protect the great institutions of the country. Everybody is hoping for the stabilization of money, for its circulation, so that the tension of the economic stakes may be loosed to enable trade to revive again. Those who have given great study to world conditions have shown clearly that there is no general world over-production, and that there are great sections of the world where, if money and trade facilities were functioning normally, conditions would not exist as at present Into that general background of world setting I introduce the subject of my talk, Ontario's mining industry and its outlook for 1932.

Now I digress for a moment to state what is elementary that prosperity for the overwhelming majority of our people necessarily depends upon the value of the wealth crop we take from our basic industries, agriculture, forests and mines, each year. If crops are poor and prices low, if our goods are not moving out where the wealth comes back in exchange, we find conditions throughout Ontario just as they are today, with our farmers unable to do the things which money could do for them. It is the same with our mining industry except gold, and the same with our forest industry except ,as to the amount we are supplying for pulp and paper. Such are conditions today.

Old Mother Earth has a very capacious bosom and fortunate is the province and the country which has within its boundaries great areas of fertile land, great resources of forests and of minerals, to say nothing perhaps of the attractiveness that brings tourists and leaves that form of capital contribution with us. There are as well our fish, game and fur products.

Ontario's mining industry is one of tremendous importance to this province. I want to give you a view of that importance and the part the industry is playing in the business welfare of Ontario and of Canada. Ontario's mining industry embraces the production of metals, non-metals, structural materials and clay products. Of the metals there are gold, silver, nickel, copper, platinum, bismuth, cobalt, lead and zinc. The non-metals include actinolite, arsenic, diatomite, feldspar, fluorspar, graphite, gypsum, iron pyrites, mica, mineral waters, natural gas, peat petroleum, quartzite and quartz, silica brick, salt, talc and soapstone. The structural materials are Portland cement, hydrated lime, quicklime, sand and gravel, sandlime brick, building stone. Of our clay products we might name brick (face, common, fancy and ornamental, sewer), drain tile, structural tile, sewer pipe, pottery made from domestic clay, haydite and other products.

By the end of 1932 we hope to add to the list of our mineral production one that has been engaging world attention, and that is radium, as well as salts of uranium in concentrated form. A mine and a mill for making concentrates is being opened up at Wilberforce, in the County of Haliburton, which we hope will swing into operation within the next thirty days. We are also looking forward to the development of the new fire clays in Northern Ontario which give promise of being the base of a new industry there, particularly because of their proximity to our deposits of lignite which are being found on the new extension of the T. & N.O. Railway between Cochrane and James Bay.

Now, what is the value to Ontario of her mineral industry? Up to the end of 1931 the total production had a value of $1,844,206,564.--(Applause). Of that, the metal group produced $1,255,000,000, while others, grouped as non-metals, structural and clay products, amounted to $588,000,000. For 1931 our production of all minerals was, in value, $98,000,000, of which around $72,500,000 represented metals; $7,700,000 non-metals; $13,500,000 structural products; and $4,300,000 of clay products. The last three years, comparing the figures 'with our total mineral production in 1929, 1930, and 1931,

was, in 1929, $117,000,000; in 1930, $113,000,000; in 1931, $98,000,000.

Our estimate for 1932--of which I will speak lateris $103,000,000; so we are down in nickel, copper, silver, cobalt, platinum, lead and zinc, and in non-metals as well; but we are up in gold. The production of those metals simply reflects general world conditions.

However, $98,000,000 of new wealth is a very substantial contribution to the business life of Ontario. That amount is strikingly illustrated if we compare it with the field crop production of Ontario and other provinces in Canada. The report made by the Bureau of Statistics at Ottawa, issued within the last few weeks, showed that Ontario field crops last year had a value of $124,500,000, which was some $26,5000,000 over our $98,000,000. Alberta, the next largest in field production, had crops worth $97,249,000; thus Ontario's mineral production last year was three-quarters of a million greater than the geld crop production in Alberta. Quebec had $72,801,000 field crop, which was surpassed by Ontario's mining industry by $25,750,000. Our mining returns surpassed Saskatchewan's field crop by $32,000,000; surpassed Manitoba's field crops by $63,000,000; British Columbia's by $85,500,000; New Brunswick by $87,500,000; Nova Scotia by $88,000,000, and Prince Edward Island by $91,000,000. Thus our mineral production shows a very favorable contrast with agriculture in other provinces as to size and importance.

Now, it is upon our metal mines that the chief interest is usually fixed, and of those two branches stand outthe great nickel mines of the Sudbury area and the great gold mines of Porcupine, Kirkland Lake and other outlying districts in this Province. One could take hours to discuss these branches without exhausting the subject; but let it suffice to say of the nickel industry that this giant enterprise, outstanding in the mineral world, with great mineral reserves, large and modem equipment, smelters, refineries and fabricating plants, is slowed down because of world trade conditions.

In 1930 it had a total capital investment in plant, machinery, tools-but not including mineral deposits-of practically $95,000,000. Its plants in Ontario can produce 140,000,000 pounds of refined nickel and 240,000,000 pounds of refined copper per annum. It is now running at 25 or 30 per cent capacity, employing at present 3,350 men, and producing 90 per cent of the world's nickel consumption. Its research department is working at all times, under all conditions, to find new uses for these metals so as to increase the production of new products. Its ore tonnage production for 1931 is down 15 per cent. Its production of copper is also down. There are great ore reserves there indicating a very long life, and the nickel industry stands ready, fit and efficient, to swing into wider business action as soon as trade conditions improve.

In addition, adjacent to the property, the great chemical plants and acid plants stand ready to serve the world markets; while out to the cast of Sudbury is also the Falconbridge nickel plant which is playing a part in production, but like all others it is affected by general world conditions.

The other great branch of the industry is gold. I suppose many of you will remember the lines of Tom Hood: Gold, gold, gold, gold,

Heavy to get and light to hold;

Spurned by the young, but hugged by the old To the very verge of the churchyard's mould, Gold, gold, gold, gold.

Ontario's gold mines since 1900 have played a very important part. Their production in 1901 was nil; ten years later, in 1911, there was some $42,000 worth of gold produced. Ten years later, 1921, that had risen to $14,500,000; while in 1931, last year, the total production reached $43,000,000. (Applause.) In these years of general depression we have played an outstanding part in stabilizing business in this country and in helping Canada to ride the storm. To the end of 1931 the total gold production in Ontario was in excess of $394,000,000.

From the great Porcupine camp there came of that total $285,044,739, and from the younger camp, Kirkland Lake, $101,338,000. For 1931, Porcupine produced between nineteen and twenty million dollars, while Kirkland Lake grabbed the major role with a production in excess of Porcupine, its total being $21,789,767.

There are fifteen producing mines in the Province of Ontario, six of them at Porcupine, six at Kirkland Lake, and three in what might be called Northwestern Ontario, including the Howey at Red Lake, the Minto and Parkhill north of Sault Ste. Marie.

Our production of $43,000,000 last year was up twenty per cent above 1930, and this production was four-fifths of the total production of Canada. For 1931 the tonnage averaged 14,285 tons daily, with an average grade of $8.50. These mills ground out, in value, $120,000 a day, or $3,600,000 a month, and $43,000,000 for the twelve months, showing an excess of $7,000,000 for 1931 over $36,000,000 in 1930.

The gold industry employed, in 1930, 6,624 men; in 1931, 8,216-an increase of 25 per cent. Wages of the gold industry in 1931 were $13,000,000, while mining equipment and supplies required an expenditure of another $13,000,000. This increase, both in production and men employed, helped to maintain the high peak employment which this industry has been furnishing. The peak of all men engaged in the entire mining industry was in 1929, when 18,994 men were employed; in 1931 the men employed were 18,267, or a total depression of employment of three per cent in the mining industry.

Kirkland Lake is now the banner gold production camp of Northern Ontario, and gold is now classed as Canada's most valuable mineral product, surpassing in value coal, which had been leading for many years. Canada's gold production for 1931 was $55,391,000, while her coal production was $41,320,000--a difference of some $14,000,000. This industry, as you will see, is one of the bright spots in Ontario business life, and has contributed materially to the welfare of the province and in maintaining business during this last couple of years.

Now, what is the outlook for 1932? After going into the whole picture carefully, sizing up the likelihoods in all directions, we are able to say that it looks brighter in all branches for 1932. (Applause.) The metals, other than gold, have been on a reaction in world trade, and we are hoping there will be a bigger demand for other metals than in the past year; we cannot conceive how production can go down very much lower. We estimate that in 1932 Ontario will produce at least $50,000,000 in gold, or an increase again of $7,000,000 for the ensuing year. This is based on the mine performances for the past quarter, and also because some new producers will come into play during 1932. We expect one in the Porcupine district; one in the extension of the Kirkland Lake belt; the Ashley Mining Corporation at Bannockburn; while we also expect in the Thunder Bay area to see the Moss Mine in production before the year is over. But even assuming that these three do not come in, we would still figure a production slightly over $SQ000,000 for the year.

Our output of non-metals in 1931 was $7,700,000; we expect 1932 will see that up to $8,000,000. We expect a slight decrease in our structural materials; we figure these at $10,000,000 for 1932 as against $13,500,000 for 1931. Clay products will rank about the same as last year.

When talking of gold production, it is interesting to get the world outlook, to gather all the statistics as to world gold production which we regard as reliable. Gold production in 1932 is expected to show an excess of $7,000,000 to $10,000,000 over 1931. The expectations for 1933 look like a world decline; and the same for 1934 and 1935, and on down to 1940, where it is expected the production will fall to $370,000,000 as against $410,000,000 for 1932.

There are possible factors which may off-set that decline. One of the interesting features, particularly in these days when gold is hailed as the great king metal, is that with the growth and extension of world business there comes the inevitable necessity for new metallic money to take care of that increase. just as a man with a capital of $100,000 invested in business reaches a place where he needs more capital, and just as our great HydroElectric Power development must figure on an additional supply each year to take care of present load and new demands, so the great business world must figure on an additional supply of gold to back our currencies as metallic money to take care of a growing world business. The problems facing all those who are endeavoring to straighten out the great money question today is this one of sufficiency of gold, and whether, lacking a sufficiency, consideration should not be given to using the oldtime consort of gold--silver--to play a greater part in world money than it has played in recent years.

New mines and low-grade ore, with improved mining methods, may bring about an increase in gold production. We look confidently to see in Ontario, as the years go by, new mines and new production from great low-grade operations to substantially increase Ontario's gold production. Our prospects in that regard are excellent In the great preCambrian area there are vast sections that have never been prospected; there are great areas which will be combed again, and undoubtedly there will be found new gold mines. In addition to that factor, we may assume that there will be a new source of gold production in our low-grade ore bodies, because of the large tonnage handled and because of improved mining methods. Let me tell you just what 1 mean by those lowgrade deposits. Our gold mines in Ontario today may be said to be high-grade deposits, and our prospectors have been looking for the sort of deposit that runs from $7 to $10 and upwards in gold value per ton. When the Homer mine was opened up in the Northwestern section, where there were great widths, and large bodies could be handled, it was found that the costs of the ordinary mine, running all the way from. $4 to $6 perton for mining and milling, could be reduced to $2.70 per ton, allowing for taxes and depreciation. Therefore our ore bodies running from $3 to $4 will be highly prized deposits, and our prospectors will go back over the ground which they combed before, and look for those lower-grade deposits which were passed up as useless. All mining men believe that these lowgrade ores can he handled and they are watching with interest these great deposits over the province of Quebec in the township of Beattie, where the Nipissing and Ventures have been giving some attention to development along that line. There are 3,000,000 to 4,000,000 tons of ore there worth $3.50 a ton. There are additional millions of tons of ore there at $3.00 per ton. Whether they can be made to pay depends upon the extent of tonnage procured, the fairness of prices and taxation, and the cheapness of power, so keeping the cost down to the place where the operation can be made profitable.

The whole question is one of intense interest. One looks at the great Alaska-juneau Mine, where millions of tons of ore worth a dollar per ton in gold coin are being raised, milled and handled for something less than 70 cents a ton. That means, however, that they are handling per day 8,000 tons or 9,000 tons. It means that the cost of power is around $9.00 or $10.00 where they have it developed. It means the digging into a great mountain where ore rises above and is brought down by gravity and milled, and where every facility is established for cheap milling. These operations show the possibilities of low-grade ore in this province and other parts for the production of gold in a bigger way than most people anticipate when worked on a really large scale.

As showing what can be done, let me point out that 15 mines in Ontario today are grinding some 14,285 tons, and producing $43,000,000, or $120,000 within the day. On those low-grade lines, a mine producing 5,000 tons a day at $3.50 will produce $17,500 a day in gold, and seven or eight of those will double the present gold production of Ontario or of Canada. So that the outlook is one which is not only intriguing, but which mining men have reason to pin their faith to as being entirely practical and within the limits of probability.

Ontario has a Government which has always taken a very keen interest in this mining development. It has realized the importance of this as a basic industry for Ontario, and so we endeavour to afford to that mining world every opportunity and assistance to go on increasing production and turning latent, useless wealth, stored up in the hills, into new wealth for the stimulation of the streams of trade.

Our department each year has its geological surveys. Last year we sent out 11 or 12 parties with a geologist at the head of each party, who goes into the outlying sections, who works with our prospectors, reads the riddles of the rocks, and comes back with reports that are published with maps, and thus provides very substantial assistance to our prospectors in the search for gold. Our prospectors, as a group, are perhaps the best in Canada. For the last twenty years those men have been receiving a very practical education, not only by following their vocation in the field, but also by attending the classes and lectures which the Department of Mines provides for them throughout the winter months in the different mining sections of the province. A geologist will go for one or two weeks and teach those men the rudiments of geology and chemistry, rock-spotting, and assisting them generally to pursue their endeavours more intelligently. These men deserve the backing and support of men of Ontario who are not obliged to risk a dollar in finding mines. (Applause.) Those men know their job, and they have been in the van of discoveries in every province, in Manitoba and Quebec.

There are other places in Canada than Ontario where gold is likely to be found, but this province is in first place, and we should determine that it shall maintain that banner place. (Hear, Hear!) If our mining industry is to maintain our present production and increase it, it is absolutely necessary to open up new areas and to find new mines and necessary that men of vision and courage should risk some of their wealth-which has indirectly reached them through these very men- in staking them. I ask you men, both in this room and beyond, on the confines of the air, to take an interest in this search for wealth.

I know that perhaps many will say, "Yes, we have invested money, and we have been stung," so to speak. Well, our gold mines alone have produced almost $350,000,000 and the faith of those who stuck to them has been rewarded. Of course you must hold out a plum in prospect so that the interest may he stimulated, that others shall search and find-because it is just as true in the material as in the spiritual world--"Seek and ye shall find; knock and it shall be opened unto you." (Applause.)

We look forward to a bigger, brighter and a better year. Already younger men and newer areas are appearing on the horizon. The Ashley, in Bannockburn, gives promise of heralding a new camp in that area. From all accounts we have been able to get, Ashley may be pronounced a mine, even as a small one at this time; but others also started in a small way. There are new areas in other sections. Up in northwest of Sudbury, west of Cochrane, at Three Duck Lake, at Swayze, at Little Long Lake, up in the MacKenzie Island section, up north of Port Arthur and in other areas, there are gold finds throughout the province of Ontario from Quebec to the Manitoba boundary, which give promise of success and of increased production.

Sitting at this head table with me today are some of the members of the staff of our Department of Mines. There is Thomas W. Gibson, veteran Deputy Minister of Mines. (Applause.) There is Tom Sutherland, who is Acting Deputy. (Applause.) There is G. R. Mickle, the Mine Assessor. (Applause.) There is Mr. Burrows, the Chief Geologist; while down in the room are Messrs. Young and Rogers, our statisticians, Mr. McNeill of the Assay Department, Mr. Sinclair, our Chief Mine Inspector, and I think judge Godson is here. (Applause.) These are the men behind the scenes who administer the laws of the province of Ontario, and. no more loyal, faithful and competent group on the Government administration for this province exists. (Applause.) They are ready, as 1 am, to serve and work for those who are interested in mining and its possibilities. As we look out upon 1932, knowing the courage, capacity and enterprise of our prospecting and mining men, knowing the assistance which is standing behind them on the part of the Government knowing something of Northern Ontario and its possibilities; I have greater optimism and enthusiasm for mining development in Ontario at the beginning of 1932 than ever before. (Applause.) That faith is built upon past performances, present indications, and the great mining personnel; and in taking leave of you today I only wish to add-play your part in solidifying this great interest; first, perhaps, from a selfish standpoint, but secondly, because it is a contribution to the very life-blood of Ontario's business and one that will lead Ontario to even greater heights than it has hitherto reached. (Loud Applause.)

THE PRESIDENT thanked the speaker for his informing address.