Canada’s Top 40 (August 01, 2004)

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If you think the headline above looks familiar, you are correct. It is the same as the one we used a year ago to introduce CMJ‘s yearly report ranking the Top 40 Canadian mining companies. Sometimes it seems that the rankings are the same, too.

Noranda Inc. is again on top, maintaining its dominance by virtue of over $6.5 billion in revenue. It is followed by Newmont Mining Corp. ($4.5 billion), Agrium Inc. ($3.7 billion) and Inco Ltd. ($3.6 billion). This is the same order as a year ago. Moving up the list substantially is Potash Corp. of Saskatchewan, which is No.5 with $3.5 billion, compared to No.11 a year ago.

If we were to rank companies by assets, Inco would be No.1 at over $12.6 billion. But right behind it would be Noranda ($11.6 billion) and Newmont ($11.1 billion). Looking at the list this way provides a little variation, but not much.

The companies that top our list are big and have what it takes to stay that way. Their assets and operations are spread around the world, and they sell their minerals in the global marketplace. They have active R&D programs which keep them at the top of the technological curve. Their management teams are responsive to change and mindful of what matters to their stakeholders, whether they are investors, employees or members of the communities in which they operate.

The next group of six also generated multi-billion-dollar revenues: Syncrude ($3.3 billion) and Suncor ($3.1 billion) from their oil sands operations; copper producer Falconbridge Ltd. ($2.9 billion); Barrick Gold Corp. ($2.85 billion); Placer Dome Inc. ($2.5 billion); and Teck Cominco Ltd. ($2.4 billion).

That is a lot of billions to be tossing around–nearly 40 of them. The top 11 companies had revenues totalling about $38.8 billion. The revenues of the remaining 29 companies on the list add up to roughly one-quarter of that. This includes companies that produce almost all the minerals mined in this country–gold, base metals, palladium, coal, uranium, and diamonds.

Gold producers come in all sizes. Behind Barrick and Placer Dome are No.15 Kinross Gold Corp. ($819 million), No.17 Goldcorp Inc., No.18 Aur Resources Inc., No. 21 Cambior Inc., No. 26 Agnico-Eagle Mines Ltd., No.29 High River Gold Mines Ltd., No.31, Richmont Mines Inc., No.33 Miramar Mining Corp., No.34 River Gold Mines Ltd., No.36 Claude Resources Inc., and No.38 Campbell Resources Inc. ($22 million). And while we are thinking about precious metals, we must mention this continent’s only primary palladium producer, North American Palladium Ltd., which we rank No.25 with revenues of $191 million.

Base metal miners in the middle and lower portion of our list, are likewise of many sizes. Beginning with No.19 Inmet Mining Corp. ($820 million), the list includes No.23 Breakwater Resources Ltd., No.24 Northgate Minerals Corp. (notice the name change), No.27 Dynatec Corp., No.30 Novicourt Inc., No.32 Imperial Metals Corp., No.35 North American Tungsten Corp. (which has been forced to seek creditor protection), and No.39 Louvem Mines Inc. ($14 million).

Coal, uranium and oil sands–the energy minerals–are as well represented as any other mineral. Coal mining includes No.12 Fording Inc. ($990 million), No.14 Sherritt International Corp., No.16 Luscar Energy Partnership, and last but not least No.40 Hillsborough Resources Ltd. ($13.5 million). No.13 Cameco Corp. ($827 million) is our largest uranium producer, followed by No.22 Cogema Resources Inc. and No.37 Denison Mines Inc. And the oil sands sector is made up mostly of huge oil and gas companies, but No.20 Western Oil Sands Inc. ($281 million) is carving out a niche for itself as purely a mining and bitumen producer.

No list of producing Canadian mines would be complete without newcomer No.28 Aber Diamond Corp. ($134 million). Kudos to Aber for its share of the Diavik mine, Canada’s second commercial diamond producer.

Try as I might, I couldn’t quite squeeze Kirkland Lake Gold Inc. onto the list. It has recently reopened the Macassa gold mine and had revenues of $11.7 million last year. Other nearly-made-its were Mazarin Inc. ($4.6 million) and Asbestos Corp. Ltd. ($1.4 million).

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HOW THE LIST IS COMPILED

Each year we publish our Top 40 rankings we get letters from readers asking why such-and-such a company was not on the list. Keep the following points in mind, and it may clear up any confusion.

First we look at a list of companies that own operating mines in Canada. Our selections sometimes hold 100% of a property and act as operator or other times only hold an equity position. We determine whether a company is “Canadian” by checking whether it is traded on one ore more Canadian stock exchange. We rely on the Canadian Depository for Securities and the SEDAR website at www.sedar.com. SEDAR is also the source of most of the annual reports and financial statements used to provide the numbers. In the case of a private company, we search the Internet for its website and financial reports. In certain cases it has been necessary to present figures from third party sources.

Please note that when a company reports results in US dollars, we have converted the figures to Canadian dollars using the Bank of Canada’s annual average exchange rate. For 2003 numbers, the rate was 1.4015 and for 2002 figures, the rate was 1.5704. Therefore, all numbers in the table at expressed in Canadian currency.

THOSE WITHOUT CANADIAN MINES

One major consideration in ranking Canada’s Top 40 mining companies is that they have operating mines or at least an equity interest in an operating mine in this country. The companies in the following table are Canadian by definition of their listings on Canadian stock exchanges, but they have no operating mines in this country. And many of these companies have been in the news lately for various reasons: Wheaton River Minerals and IamGold for their almost-merger; Golden Star Resources for its role in the aforementioned non-merger; Ivanhoe Mines for its ambitious plans in Mongolia; and Crystallex International for its gold mine in Venezuela.

At least these offshore miners bear watching because they could easily join the ranks of the Top 40 should they become interested in a mine in Canada.