Canadian Mining Journal

Feature

Forty of our Finest

Reports have been read. Numbers crunched. Comparisons made. Now our annual look at Canada’s Top 40 mining companies is ready.


Reports have been read. Numbers crunched. Comparisons made. Now our annual look at Canada’s Top 40 mining companies is ready.

The name of the top revenue generator is no surprise: Agrium ($15.3 billion). Second place this year goes to Barrick Gold ($14.2 billion). These companies have been trading the top two spots for the past few years. Last year their positions were reversed, having revenues of $10.6 billion and $10.9 billion, respectively.

Even though it has stalled on either side of the $1,600-mark, the strong price of gold lifted two other gold producers to the top of the list. Goldcorp was No.6 with $5.3 billion, and Kinross Gold was No.7 with revenues of $3.9 billion. The three gold producers near the top are also copper producers. They stand to benefit should the price of either metal strengthen. Likewise, the No.9 miner First Quantum Minerals ($2.6 billion). Although primarily a copper producer, First Quantum also has a significant by-product income from gold.

Two Canadian bitumen producers are to be found near the top. Suncor Energy’s oil sands business brought in revenues of $12.2 billion last year, landing the company in the No.3 slot. Canadian Oil Sands Trust had revenues of $3.9 billion, primarily from the Syncrude project. That put COST in the No.8 position. Suncor and COST have held those relative positions since 2007.

The No.4 revenue generating miner in 2011 was Teck Resources with its $11.5 billion. The integrated miner has coal and base metal mines throughout the Americas. It also benefits significantly from a number of by-products including indium that is used in flat display screens that are becoming ubiquitous in our homes and public places.

Following Teck, at No.5 is Potash Corporation of Saskatchewan, the world’s largest potash producer with revenue of $8.6 billion. The excellent result for PotashCorp is due in part to the need to fertilize the world’s food crops but also to the company’s extensive global marketing efforts.

Rounding out the top 10 is uranium producer Cameco. The company generated $2.4 billion in revenues, despite fears for reduced uranium demand by the power industry. Fears were raised following the earthquake that hit Japan in March 2011 and severely damaged one of that country’s large nuclear power stations. Supporters of the industry point out that unlike coal-fired generating stations, nuclear power plants produce no greenhouse gases that are contributing to global warming.

Elsewhere in our Top 40, readers will recognize a number of familiar miners. There are gold producers, No.13 Agnico-Eagle Mines ($1.8 billion), No.17 Centerra ($1.1 billion) and No. 18 Eldorado Gold ($1.1 billion), No.26 High River Gold ($574 million), and more. New to the list this year is Osisko Mining at No.36 with $263 million thanks to its recently opened Canadian Malartic gold mine in Quebec. Another new name is No.30 AuRico Gold with $398 million). The AuRico name is new but it includes the assets of two companies it took over in 2011 – Northgate Minerals and Gammon Gold.

Mergers and acquisitions have removed other familiar names from the Top 40. Barrick swallowed Equinox, thereby giving Barrick significant copper assets. Breakwater Resources was taken over by Nystar of Switzerland, and Grande Cache Coal by Winsway of Hong Kong.

KGHM International snapped up Quadra FNX, itself a combination of two Top 40 companies in 2009. KGHM is owned by a Polish company, but it is included in this year’s list at No.16 with revenues of $1.2 billion by virtue of the fact that it meets two of the three criteria to be considered a Canadian miner. It is domiciled in this country and has producing mines in Canada.

Look for other Top 40 companies that are base metal producers. Sherritt International ($2.0 billion) comes in at No.12, Inmet Mining ($979 million) is No.19, HudBay Minerals ($891 million) is No.20, Lundin Mining ($775 million) is No. 22, Thompson Creek Metals ($662 million), is No.24, and Capstone Mining ($349 million) is No. 32. Capstone is a relative newcomer to the Canadian mining scene having opened the Minto copper mine in the Yukon in 2007. The project has done nothing but expand ever since.

The Top 40 includes several of Canada’s diamond producers, although the financial information from them is less complete than from publically traded companies. BHP Billiton, operator of the Ekati mine in the Northwest Territories, holds down the No.15 spot with revenues of $1.5 billion. Harry Winston, 40% owner of the Diavik mine comes in at No.25 with $617 million. The remaining 60% of the Diavik mine belongs to Rio Tinto plc, that has its head office in London, UK. No.27 De Beers Canada ($566 million) is the operator of the Victor diamond mine in Ontario and the Snap Lake mine in the Northwest Territories as well as the advanced Gaucho Kué project 90 km away from Snap Lake.

Coal producers, however, are absent from the Top 40. Coal income contributes to the revenues of Teck and Sherritt, but how much is not clear. Smaller coal producers are just that – small, too small to make the Top 40.

No matter how great the revenues of Canada’s Top 40 mining companies – from No.1 Agrium at $15.4 billion to No.40 Taseko Mines at $252 million – those revenues are still far behind the world’s Big 5 miners. BHP Billiton hauled in $67.9 billion, Rio Tinto garnered $60.5 million, and Vale reaped $60.4 billion. Rounding out the short list are Xstrata at $33.9 billion and Anglo American at $30.6 billion. How much is that? (Hint: over $250 billion.)

Determining who is ‘biggest” can be done several ways. Some in the press go by market capitalization, others by net income. We at CMJ continue to rank our Top 40 by the previous year’s gross revenues. It is a handy yardstick, especially as we have used it for many years, making comparisons to older lists easy.

Other ways of measuring “big” might be by net earnings or assets. We have provided that information in short tables for some of the Top 40 companies. It is interesting to note how many of the top 10 revenue generating companies also rank near the top of the earnings and assets lists.

A look at how revenues, earnings and assets changed year-over-year is also worth considering. These lists, too, have their share of top 10 placeholders, but they also highlight some of the smaller Top 40 that are growing their businesses.

Another way to benchmark success is to compare the size of a company’s assets to the amount of revenue they generate. That information is new this year, expressed as a percentage, revenue over assets. Agrium’s number, 117.7%, stands out. If everyone could make more money than the value of what they own, more shareholders would be rich. Perhaps it is so large as to be meaningless, but those are the numbers we had to work with.

There were other companies that managed to generate revenues that represent a large percentage of their assets: Nevsun Resources (70.8%), BHP Billiton Canada (69.6%), Centerra Gold (65.8%) and Aurizon Mines (62.2%). Even No.40 Taseko Mines had revenues equal to 25.3% of its assets. AuRico and Osisko tied for last place with 12.7%.

Whether such statistics are an adequate measure of value, we are not certain. But we wanted to toss them out and perhaps generate some comments. Ambitious readers are welcome to measure earnings against revenues and earnings against assets using the Top 40 table. Perhaps one of those would be our readers’ preferred measure of value. Let us know.

Meanwhile, congratulations to all the companies that made our Top 40 list!

Who is eligible for the Top 40?

Determining a list of Canada’s Top 40 mining companies takes time and research. We examine financial statements, annual reports and other public information for almost 100 separate companies.

We keep in mind that eligible companies must meet two of the following three criteria:

    < li>Companies that are traded on a Canadian stock exchange.
  • Companies that are domiciled in Canada.
  • Companies that own or have a significant equity interest in a producing mine in Canada. Companies with a project in the advanced development stage may also be considered.

For example, a company with its head office in Toronto and its stock trading on the TSX or TSX-V would meets the above criteria even if all it producing mines are offshore. Companies with foreign head offices and that do not trade on a Canadian exchange, will not make the Top 40 list even it they have substantial mining assets in this country.

Numbers that were reported in U.S. dollars have been converted to millions of Canadian dollars at a rate of US$1.00 equals C$1.02, the average exchange rate calculated by the Bank of Canada for the 2011 calendar year.

We make every effort to include all eligible companies. If you believe your enterprise should be listed among the Top 40, please write to the author at MScales@CanadianMiningJournal.com.

Canada’s Top 40 by Gross Revenue (millions of Canadian dollars )

Rank Compnay 2011
Year End
Type 2011 Revenue 2011 Net Earnings (loss) 2011 Assets 2010 Revenue 2010 Net Earnings (loss) 2010 Assets
1 Agrium Dec 31 KCl 15,300 1,360 12,995 10,625 705 12,750
2 Barrick Gold Dec 31 Au-Cu 14,155 4,435 48,346 10,880 3,543 34,256
3 Suncor Energy Dec 31 Bitumen 12,233 5,100 44,217 5,309 3,709 39,382
4 Teck Resources Dec 31 Zn 11,524 2,768 34,219 9,223 1,936 29,055
5 Potash Corp. of Saskatchewan Dec 31 KCl 8,619 3,047 15,376 6,467 1,755 12,701
6 Goldcorp Dec 31 Au 5,303 1,860 29,051 3,697 2,021 27,335
7 Kinross Gold Dec 31 Au-Cu 3,900 -1,991 16,327 2,977 1,192 17,599
8 Canadian Oil Sands Trust Dec 31 Bitumen 3,875 1,144 8,620 3,154 1,189 7,132
9 First Quantum Minerals Dec 31 Cu-Au 2,556 648 5,240 2,367 371 4,903
10 Cameco Dec 31 U 2,384 439 7,801 2,124 507 7,203
11 Yamana Gold Dec 31 Au 2,149 542 10,652 1,670 461 10,205
12 Sherritt International Dec 31 Ni-Cu 1,978 197 6,498 1,671 145 6,068
13 Agnico-Eagle Mines Dec 31 Au 1,802 -563 4,979 1,407 328 5,440
14 IamGold Dec 31 Au 1,619 834 4,302 1,085 277 2,918
15 BHPBilliton Canada (Ekati) Jun 30 Dia 1,500 581 2,145 n/a n/a n/a
16 KGHM Internatiopnal Dec 31 Cu-Ni-PGM 1,166 264 3,507 947 79 2,729
17 Centerra Gold Dec 31 Au 1,099 367 1,670 841 318 1,385
18 Eldorado Gold Dec 31 Au 1,087 343 3,960 782 235 3,644
19 Inmet Mining Dec 31 Cu-Zn 979 348 3,810 779 390 3,030
20 HudBay Minerals Dec 31 Cu-Zn 891 -164 2,449 781 21 2,084
21 Pan American
Silver
Dec 31 Ag 846 350 1,931 640 16 1,720
22 Lundin Mining Dec 31 Cu-Zn-Pb-Ni 775 182 3,821 840 303 3,784
23 New Gold Dec 31 Au 688 177 3,176 624 47 2,402
24 Thompson Creek Metals Dec 31 Mo 662 121 2,961 588 161 2,293
25 Harry Winston Dec 31 Dia 617 27 1,600 408 -76 1,479
26 High River Gold Dec 31 Au 574 191 1,008 441 124 812
27 De Beers Canada Dec 31 Diamond 566     461    
28 Nevsun Resources Dec 31 Au-BMet 542 246 766 n/a -18 352
29 Uranium One Dec 31 U 524 87 3,267 323 -152 2,914
30 AuRico Gold Dec 31 Au 398 175 3,139 235 -134 900
31 Semafo Dec 31 Au 392 122 716 319 102 585
32 Capstone Mining Dec 31 Cu-Au 349 59 1,404 298 74 620
33 Dundee Precious Metals Dec 31 Au 338 72 928 202 20 817
34 China Gold Dec 31 Au-BMet 308 81 1,727 132 27 1,638
35 Mirabela Nickel Dec 31 Ni 301 -50 1,005 209 -47 1,108
36 Osisko Mining Dec 31 Au 263 18 2,069 nil -18 1,959
37 Aurizon Mines Dec 31 Au 260 44 418 179 17 337
38 Mercator Minerals Dec 31 Cu-Mo 260 91 606 181 -137 418
39 Imperial Metals Dec 31 Cu-Au 253 49 486 246 38 442
40 Taseko Mines Dec 31 Mo 252 27 995 278 149 722
                   

The Runners-up (C$ millions)

Rank Compnay 2011
Year End
Type 2011 Revenue 2011 Net Earnings (loss) 2011 Assets 2010 Revenue 2010 Net Earnings (loss) 2010 Assets
41 First Majestic Silver Dec 31 Ag 243 103 438 117 35 255
42 Iberian Minerals Dec 31 Cu 242 172 694 225 -109 745
43 Alamos Gold Dec 31 Au 225 59 592 187 62 500
44 Teranga Gold Dec 31 Au 185 -16 517 n/a n/a n/a
45 Ivanhoe Mines Dec 31 Cu 177 -564 6,069 79 -210 3,184
46 South Gobi Resoruces Dec 31 Coal 177 57 910 79 -115 950
47 Great Basin Gold Dec 31 Au 170 -18 850 100 27 755
48 North American Palladium Dec 31 Pd-Au 170 -65 416 107 -29 348
49 Pacific Coal Resources Dec 31 Coal 166 -53 375 76 2 256
50 Amerigo Resoruces Dec 31 Cu-Mo 164 9 203 152 5 235
                   

Top Revenue Gainers (C$ millions)

     
Rank Compnay Type 2011 Revenue 2010 Revenue   Revenue Change 2011/2010       
34 China Gold Au-BMet 308 132   +133.3%      
3 Suncor Energy Bitumen 12,233 5,309   +130.4%      
30 AuRico Gold Au 398 235   +69.4%      
32 Dundee Precious Metals Au 338 202   +67.3%      
25 Harry Winston Dia 617 408   +51.2%      
14 IamGold Au 1,619 1,085   +49.2%      
37 Aurizon Mines Au 260 179   +45.3%      
1 Agrium KCl 15,300 10,625   +44.0%      
35 Mirabela Nickel Ni-Cu 301 209   +44.0%      
38 Mercator Minerals Cu-Mo 260 181   +43.6%      
6 Goldcorp Au 5,303 3,697   +43.4%      
18 Eldorado Gold Au 1,087 782   +39.0%      
5 Potash Corp. of Saskatchewan KCl 8,619 6,467   +33.3%      
21 Pan American Silver Ag 846 640   +32.2%      
7 Kinross Gold Au-Cu 3,900 2,977   +31.0%      
                   

Top Earners (C$ millions)

         
Rank Compnay Type 2011 Net Earnings (loss) 2010 Net Earnings (loss)          
3 Suncor Energy Bitumen 5,100 3,709          
2 Barrick Gold Au-Cu 4,435 3,543          
5 Potash Corp. of Saskatchewan KCl 3,047 1,755          
4 Teck Resources Zn 2,768 1,936          
6 Goldcorp Au 1,860 2,021          
1 Agrium KCl 1,360 705          
8 Canadian Oil Sands Trust Bitumen 1,144 1,189          
14 IamGold Au 834 277          
9 First Quantum Minerals Cu-Au 648 371          
15 BHPBilliton Canada (Ekati) Dia 581 n/a          
11 Yamana Gold Au 542 461          
10 Cameco U 439 507          
17 Centerra Gold Au 367 318          
21 Pan American Silver Ag 350 16          
19 Inmet Mining Cu-Zn 348 390          
                   

Top Earnings Gainers (C$ millions)

     
Rank Compnay Type 2011 Net Earnings (loss) 2010 Net Earnings (loss)   Earnings Change 2011/2010      
21 Pan American Silver Ag 350 16   +2,087.5%      
23 New Gold Au 177 47   +276.6%      
33 Dundee Precious Metals Au 72 20   +260.0%      
16 KGHM Internatiopnal Cu-Ni-PGM 264 79   +234.2%      
14 IamGold Au 834 277   +201.0%      
34 China Gold Au-BMet 81 27   +200.%      
1 Agrium KCl 1,360 705   +92.2%      
6 Goldcorp Au 1,860 2,021   +92.0%      
9 First Quantum Minerals Cu-Au 648 371   +74.7%      
5 Potash Corp. of Saskatchewan KCl 3,047 1,755   73.6%      
37 Aurizon Mines Au 44 17   +58.5%      
26 High River Gold Au 191 124   +54.0%      
4 Teck Resources Zn 2,768 1,936   +50.0%      
18 Eldorado Gold Au 343 235   +40.6%      
3 Suncor Energy Bitumen 5,100 3,709   +37.5%      
                   

Top Asset Holders (C$ millions)

         
Rank Compnay Type 2011 Assets 2010 Assets          
2 Barrick Gold Au-Cu 48,346 34,256          
3 Suncor Energy Bitumen 44,217 39,382          
4 Teck Resources Zn 34,219 29,055          
6 Goldcorp Au 29,051 27,335          
7 Kinross Gold Au-Cu 16,327 17,599          
5 Potash Corp. of Saskatchewan KCl 15,376 12,701          
1 Agrium KCl 12,995 12,750          
11 Yamana Gold Au 10,652 10,205          
8 Canadian Oil Sands Trust Bitumen 8,620 7,132          
10 Cameco U 7,801 7,203          
12 Sherritt International Ni-Cu 6,498 6,068          
9 First Quantum Minerals Cu-Au 5,240 4,903          
13 Agnico-Eagle Mines Au 4,979 5,440          
14 IamGold Au 4,302 2,918          
18 Eldorado Gold Au 3,960 3,644          
                   

Revenue as a Per Cent of Assets (C$millions)

       
Rank Compnay Type 2011 Revenue 2011 Assets Revenue to Assets        
1 Agrium KCl 15,300 12,995 117.7%        
28 Nevsun Resources Au-BMet 542 766 70.8%        
15 BHPBilliton Canada (Ekati) Dia 1,500 2,145 69.9%        
17 Centerra Gold Au 1,099 1,670 65.8%        
37 Aurizon Mines Au 260 418 62.2%        
26 High River Gold Au 574 1,008 56.9%        
5 Potash Corp. of Saskatchewan KCl 8,619 15,376 56.1%        
31 Semafo Au 392 716 54.7%        
39 Imperial Metals Cu-Au 253 486 52.1%        
9 First Quantum Minerals Cu-Au 2,556 5,240 48.8%        
21 Pan American Silver Ag 846 1,931 43.8%        
38 Mercator Minerals Cu-Mo 260 606 42.9%        
25 Harry Winston Dia 617 1,600 38.6%        
14 IamGold Au 1,619 4,302 37.6%        
20 HudBay Minerals Cu-Zn 891 2,449 36.4%