February 2010

Building bridges between Canada and Mexico

Farallon’s CEO is recognized for establishing and leading the Mexico Mining Task Force with commitment and vision

By D. Zlotnikov


Dick Whittington at Farallon’s Campo Morado property

Just as a successful mining operation relies on sound engineering, a successful mining industry depends on strong relationships. Dick Whittington, president and CEO of Farallon Mining, has a talent for both. His company’s G-9 underground mine at Campo Morado went into operation last spring. In December, Whittington’s work as the founding chairman of the Mexico Mining Task Force —  a group representing 34 Canadian explorers and producers operating in Mexico — earned him the recognition of the Canadian government. On a state visit to Mexico, Michaëlle Jean, Governor General of Canada, presented Whittington with a medallion to acknowledge his contribution to Canada-Mexico relations, through his commitment to the task force and his leadership in representing Canadian mining interests in Mexico.

The Mining Task Force, Whittington says, was formed four years ago out of a need for a common voice. “What had gone unnoticed until I formed this task force was how strong a position and what a competitive advantage Canadian mining companies have around the world, and especially in Mexico.”

The group’s members have a market capitalization of $50 billion. Whittington notes that this total includes the multinational giant Goldcorp, but points out that even without Goldcorp, the remaining 33 companies account for $20 billion of capital. Putting the figure in perspective, he points out that “the largest Mexican mining company, Grupo Mexico, has a market capitalization of $17 billion. The second- largest is Industrias Peñoles, at $9 billion.”

Whittington explains that while working in other countries, he had seen the benefits of having “a strong, coordinated commercial presence that is allied with the Canadian embassies and whatever chambers of commerce exist.”

What he saw in Mexico was that “the Canadian companies had voices, but they were sporadic and individual, and generally didn’t register with the Mexican authorities because they were perceived as little interests. But what we realized, that others didn’t, is that if you put 20 small companies together, it becomes a huge presence collectively in the mining industry of Mexico.”

The task force has also served as a knowledge exchange, through which Canadian companies have access to the collective wisdom and experience of their peers. The flow of information is simplified in the other direction as well. If the Mexican government or mining ministry have an issue they wish to discuss, they can now simply contact the task force and have the information disseminated to all its members.

Looking to the future, Whittington hopes to see the organization grow to include more members, but emphasizes that the future path will be determined by the members’ needs. “I think this award is a recognition of the strong relationship between the Canadian mining industry and Mexico,” he says.

Mexican and Canadian interests are aligned as far as the mining industry is concerned, Whittington explains. While Canada is happy to encourage the growth and international expansion of its mining sector, and Mexico — still suffering from the effects of the credit crisis — welcomes foreign direct investment. Whittington’s hope is that the task force will facilitate the entry of more Canadian firms into the Mexican mining circle.

“I think Canada has a competitive advantage in terms of being able to raise capital, bring expertise and put together a corporate structure that encourages operators to take a little more risk, so that mines can be developed and the industry can grow in Mexico,” says Whittington.

Farallon’s involvement in Mexico stretches back 14 years, during which time the company had conducted extensive exploration activities at its Campo Morado property. Whittington joined the company in 2004. Following the June 2005 discovery of a sizeable deposit, Whittington says, Farallon has rapidly moved to complete and bring online its G-9 underground polymetallic mine, which began commercial production in April 2009.

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