Canada’s Top 40 (August 01, 2007)

Any company with annual revenues of over $7.4 billion is a contender for the top spot on many lists. In the case of the largest 40 Canadian mining companies, the honour goes to Suncor Energy thanks to its oil sands income alone. The rising price of oil continues to bolster Suncor’s bottom line. Last year the company ranked eighth on our list with almost $4.0 billion in revenue from its oil sands operations.

CMJ is pleased to find Teck Cominco in second place on our Top 40 list. The juniors’ “partner of choice” accumulated revenues of $6.5 billion in 2006. With a proven track record of successful base metal, coal and gold production, Teck Cominco is expanding into the oil sands sector, a move that will further strengthen its revenue stream.

Third place belongs to Barrick Gold with revenues of $6.4 billion. That is more than double its 2005 figure thanks in part to a gold price that keeps going up. To high metal prices Barrick added the completion of the acquisition of Placer Dome last year, a move that represents perhaps $2.5 billion of the total.

The rest of the top 10 spots belong to Syncrude Canada ($6.2 billion revenue in 2006), Agrium ($4.8 billion), PotashCorp ($4.3 billion), Athabasca Oil Sands Project ($3.2 billion), Canadian Oil Sands Trust ($2.7 billion), Iron Ore Co. of Canada ($2.0 billion) and Goldcorp ($1.9 billion).

Looking at the top 10 companies, we see that they represent Canada’s major mineral products — four oil sands producers, two base metal miners (one non-ferrous, one ferrous), two gold miners, and two producers of potash. These companies do not represent all of the Canadian industry, but they do have profitable operations on Canadian soil.

The second group of 10 is headed by Fording Canadian Coal ($1.8 billion in 2006 revenue) and then Cameco ($1.8 billion). Their numbers look identical due to rounding, but Fording’s revenues are actually about $14 million more. Petro-Canada’s revenue from its oil sands mining is not far behind at $1.4 billion.

Also in the second 10 we run across companies that do not have a mine in Canada. Those companies begin with LionOre Mining ($1.3 billion) and First Quantum Minerals ($1.2 billion). Now that the takeover of LionOre by Russia’s Norilsk Nickel is nearing completion, the LionOre name will not be seen in next year’s rankings.

Last year we were saddened by the fact that the Noranda name had disappeared from CMJ‘s Top 40 list. Now both of last year’s leaders have disappeared. Falconbridge has become a wholly owned subsidiary of the Swiss miner, Xstrata, and Inco is now part of the Brazilian powerhouse, Companhia Vale do Rio Doce (CVRD). Losing Canada’s two largest mining companies to foreign control was a blow, but is only part of a merger trend that will continue as long as mining remains so profitable.

Other rankings

Looking at the value of a company’s total assets rather than revenues, we see that Barrick Gold is the largest at $24.2 billion, followed in the number two spot by Goldcorp at $20.4 billion. This ranking says something about the continuing high price of gold.

Suncor Energy ($13.7 billion of assets in 2006) and Teck Cominco ($11.4 billion) have the next largest asset bases. These numbers speak well for the price of both oil and base metals. Rounding out the 10 companies with the most assets are PotashCorp ($7.1 billion), Canadian Oil Sands Trust ($6.5 billion), Cameco ($5.1 billion), Agrium ($3.7 billion), Lundin Mining ($3.2 billion), and Petro-Canada ($2.9 billion).

If Canadian mining companies were ranked by net earnings rather than by revenues, the top spot would still go to Suncor Energy with earnings of $2.8 billion in 2006. Close on its heels is Teck Cominco ($2.4 billion). Barrick Gold ($1.7 billion) occupies third and last place among companies with multi-billion-dollar earnings. Of the 19 companies with revenues greater than $1.0 billion, only these three had earnings above that benchmark.

The next seven top earnings-generators were Canadian Oil Sands Trust ($834 million), PotashCorp ($716 million), HudBay Minerals ($564 million), Fording Canadian Coal ($498 million), LionOre Mining ($486 million), First Quantum Minerals ($470 million), and Goldcorp ($463 million). Again we are pleased to see that the most profitable mining companies are mostly those with Canadian operations.

No matter which way we look at the numbers, some names rise to the top of the rankings — Suncor, Teck Cominco, Barrick Gold, Goldcorp, PotashCorp, Agrium, Cameco, Lundin Mining. These are unquestionably the largest Canadian mining companies and all are players on the international stage.

Now that we know oil sands income supports the biggest revenue-maker in Canadian mining, let’s take a look at the five top miners in that sector. Suncor, as mentioned, had the most revenue ($7.4 billion), and Syncrude Canada was second ($6.2 billion). They are the grandfathers of Canadian oil sands mining, but the most recent entrant, the Athabasca Oil Sands Project, had revenue of $3.2 billion. The AOSP is owned 60% by Shell Canada, 20% by Chevron Canada, and 20% by Western Oil Sands (a publicly traded Canadian company that counted its share of AOSP revenues at $984 million).

Also among the top five oil sands miners is Canadian Oil Sands Trust, with fourth-place revenues of $2.7 billion from ownership in the Syncrude operation.

Canada’s list of five largest base metals miners begins with Teck Cominco ($6.5 billion). Iron Ore Co. of Canada is second ($2.0 billion). The next three big base metals miners all have revenues over $1.0 billion — LionOre Mining ($1.3 billion), First Quantum Minerals ($1.2 billion) and HudBay Minerals ($1.2 billion).

Not quite making the top five but with over $1 billion in revenue were Sherritt International ($1.1 billion) and Inmet Mining ($1.1 billion). The rounded figures look the same, but there is a $24-million difference in Sherritt’s favour.

Barrick Gold is ranked third overall, having revenues of $6.4 billion. It is far-and-away Canada’s largest gold producer, with shares in three Canadian gold mines and over two dozen other projects in North America, Latin America, Asia, Australia and Africa. Goldcorp is second at $1.9 billion, but that number will grow as it counts revenues from the Placer Dome assets it bought from Barrick last year after that company took over Placer Dome.

The other large Canadian gold producers are Kinross Gold ($1.0 billion), Agnico-Eagle Mines ($579 million) and Centerra Gold ($413 million).

So there you have it — a list of Canada’s Top 40 mining companies from Suncor to North American Palladium. Despite losing some of Canada’s iconic mining names, this country still has much to be proud of. Peruse the table on page 19 to see if your company made it this year. And before you complain, read the section titled “CMJ’s Top 40 Criteria” to learn how we make our selections.

CMJ’s Top 40 Criteria

Picking only 40 of the 2,000 to 2,500 Canadian companies engaged in the exploration, mining and processing of minerals seems at first a daunting task. So we at CMJ use a few selection criteria.

* A company must be registered in Canada, and preferably domiciled in this country.

* A company must mine something somewhere or have a significant equity in at least one producer. Companies without commercial production are not considered.

* The financial numbers are taken from annual reports, year-end financial statements and other public information.

* Numbers that are reported in U.S. dollars have been converted to Canadian dollars at a rate of US$1.00 equals Cdn$1.134, the average exchange rate calculated by the Bank of Canada for 2006 calendar year.

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

Canada’s Top 40 by
revenue

Thousands of Canadian dollars

			2006			2005
Company	Year end	Revenue	Net earnings(loss)	Assets	Revenue	Net earnings(loss)	Assets
Suncor Energy1	Dec 31, 06	7,407,000	2,824,000	13,692,000	3,965,000	976,000	11,648,000
Teck Cominco	Dec 31, 06	6,539,000	2,431,000	11,447,000	4,415,000	1,345,000	8,809,000
Barrick Gold	Dec 31, 06	6,391,224	1,707,804	24,236,982	2,664,900	454,734	7,781,508
Syncrude Canada2	Dec 31, 06	6,223,800	n/a	n/a	4,430,000	n/a	n/a
Agrium	Dec 31, 06	4,754,862	37,422	3,702,510	3,735,396	320,922	3,158,190
PotashCorp	Dec 31, 06	4,271,438	716,461	7,050,078	4,352,725	615,649	6,075,859
Athabasca Oil Sands Project3	Dec 31, 06	3,150,000	n/a	n/a	2,950,000	n/a	n/a
Canadian Oil Sands Trust	Dec 31, 06	2,692,000	834,000	6,532,000	2,019,000	831,000	5,925,000
Iron Ore Co. of Canada4	Dec 31, 06	2,030,382	280,120	1,257,900	1,842,992	285,914	871,267
Goldcorp	Dec 31, 06	1,939,140	463,012	20,373,331	1,016,518	323,984	4,610,844
Fording Canadian Coal	Dec 31, 06	1,845,300	497,900	1,073,800	1,874,800	834,200	1,182,600
Cameco	Dec 31, 06	1,831,690	375,715	5,140,429	1,312,655	215,469	4,772,775
Petro-Canada1	Dec 31, 06	1,414,000	245,000	2,885,000	1,413,000	115,000	2,623,000
LionOre Mining	Dec 31, 06	1,266,047	486,014	1,951,201	587,794	(86,653)	1,213,888
First Quantum Minerals	Dec 31, 06	1,241,144	469,935	1,978,176	504,192	173,296	846,543
HudBay Minerals	Dec 31, 06	1,129,003	563,991	1,318,515	652,028	85,218	728,753
Sherritt International	Dec 31, 06	1,114,400	245,600	2,553,500	1,020,500	124,300	2,790,500
Inmet Mining	Dec 31, 06	1,087,869	420,653	1,532,940	708,725	142,035	927,872
Kinross Gold	Dec 31, 06	1,026,950	188,017	2,328,669	822,717	(244,944)	1,925,645
Western Oil Sands	Dec 31, 06	983,560	63,370	1,794,159	910,330	149,449	1,590,520
Aur Resources	Dec 31, 06	837,212	333,076	1,302,076	506,836	161,342	851,559
Aber Diamond	Jan 31, 07	633,671	118,241	1,460,494	572,933	92,141	1,183,457
Agnico-Eagle Mines	Dec 31, 06	578,960	182,956	1,725,367	279,343	41,951	1,106,862
Royal Utilities Income Fund	Dec 31, 06	477,362	29,055	1,322,884	439,237	(20,564)	1,571,043
Northgate Minerals	Dec 31, 06	466,429	121,045	584,726	291,780	44,858	350,413
Quadra Mining	Dec 31, 06	445,953	16,367	380,985	258,818	(15,222)	284,228
Breakwater Resources	Dec 31, 06	425,233	156,530	509,293	312,965	14,023	342,626
Centerra Gold	Dec 31, 06	413,366	68,720	900,676	383,953	48,120	793,003
IamGold	Dec 31, 06	343,993	82,193	2,584,019	147,164	23,240	531,829
Pan American Silver	Dec 31, 06	289,677	66,006	771,114	138,803	(32,375)	410,826
Lundin Mining5	Dec 31, 06	277,111	173,444	3,208,766	46,907	33,978	458,205
Rio Narcea Gold Mines	Dec 31, 06	255,937	80,209	439,834	119,637	(47,770)	282,613
Imperial Metals	Dec 31, 06	211,447	82,007	214,096	71,077	21,569	135,434
Dynatec	Dec 31, 06	211,363	17,139	398,333	187,272	28,625	380,500
Yamana Gold	Dec 31, 06	191,880	(79,565)	2,473,472	52,207	(4,662)	531,218
Silver Wheaton	Dec 31, 06	179,785	96,639	751,721	80,395	28,680	301,815
Blue Pearl Mining6	Dec 31, 06	171,056	(23,415)	1,061,134	nil	(4,664)	9,522
FNX Mining	Dec 31, 06	169,945	68,680	830,580	84,602	4,597	736,384
Taseko Mines	Sept 30, 06	161,900	32,916	297,461	87,638	23,290	190,997
North American Palladium	Dec 31, 06	159,200	(34,109)	265,157	92,606	(53,611)	238,357

1. Oil sands only.

2. Estimated from revenue per barrel and total production figures.

3. Estimated from Western Oil Sands’ 20% interest in the project.

4. Estimated from Rio Tinto’s 58.7% share.

5. Unaudited.

6. Name changed to Thompson Creek Metals Co.

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