August 2009

Going for gold

Agnico-Eagle’s Kittilä gold mine in Finland is drawing admiring attention from all quarters

By M. Paduada

Control room at the mill

High up in the Arctic region of northern Europe, a Canadian company is building what could become the continent’s largest gold mine. From the terrain and the weather to people’s proclivities, common bonds are uniting the company with its hosts. Together, they are learning as much about one another as about mining under the midnight sun.

Nestled among hills, marshes, lakes and rivers, a new gold mine has opened in Finland and a lot of people are talking about it. The mine is situated in the Central Lapland Greenstone Belt, and geologists are discussing its similarities to the Abitibi. Its Arctic location has mining engineers deliberating about how to deal with frigid winters and months of 24-hour daylight and 24-hour darkness. The refractory nature of the ore has metallurgists conferring about the mill flowsheet and optimizing recovery. The tight credit markets have analysts wondering how it got funded. Still others are speaking about the production schedule, reserve conversion, safety, language, the environment, Finnish political views and innumerable other topics. But when Agnico-Eagle brought all of these people together at the official opening of their Kittilä mine, the one topic that everyone was talking about was the people.

The power of people

People — specific individuals and local Finnish residents — played key roles in the story of the Kittilä mine. The mine is built on the Suurikuusikko gold deposit, the largest in northern Europe. It was discovered by geologists from the Geological Survey of Finland in 1986. Riddarhyttan Resources’ founders Jaan Kaber and Sven Norfeldt, seeing the potential for a gold mine, acquired the deposits from the Finnish government in 1998. Riddarhyttan’s board and chairman, Pertti Voutilainen, soon realized that they needed to bring in a mining company that had the skills and funding to make it happen.

The support from people in the community really encouraged Agnico-Eagle to make a commitment, explained Agnico-Eagle CEO and vice-chairman Sean Boyd. “One of the people we first met early on was Seppo Maula [mayor of the municipality of Kittilä], and his enthusiasm was infectious,” said Boyd. “Without Seppo and without the support of the local community, the local government and the government of Finland, this wouldn’t have happened.”

Reciprocally, Agnico-Eagle’s own culture helped it find favour among the Finnish people. Dmitry Kushnir, manager of investor relations, who started at Agnico-Eagle in January 2009, noted of its corporate culture: “The way employees are treated makes for a great working environment. I see how the senior management deals with people, how open they are with investors and anybody who is interested. They provide so much transparency. People realize this is something they can put their names and their confidence behind.” Nearly everyone at the official opening who was not from Agnico-Eagle appreciated the company’s palpable attitude, confidence and pride.

Making a connection with the local community was crucial to the decision to expand to Finland, according to Agnico-Eagle chairman James Nasso. That connection was easy to find, given the obvious similarities between Finnish and Canadian culture. Nasso recalled Senior Canadian Trade Commissioner Stephen Chase remarking of Finland: “It’s just like being home.”

“Truly, that’s the way we all feel here,” Nasso said. “From the landscape to the people, Finland resembles us in many ways. We first look for places where we would feel at home. Then, if we get the right geology and the opportunities to build mines, we want to be there for many decades.”

The connection made, it took a dedicated effort from Agnico-Eagle employees to get Kittilä started. Eberhard Scherkus, president and COO, and Alain Blackburn, senior vice-president, exploration, led many site visits to direct drilling and assess potential. Perrti Voutilainen, who became an independent director of Agnico-Eagle in 2005, and Ingmar Haga, who was appointed Agnico-Eagle’s vice-president, Europe, in 2006, had brought and continue to bring first-hand insight of the Finnish mining industry. David Garofalo, Agnico-Eagle’s CFO and senior vice-president, finance, secured financing for the company’s ambitious expansion, a feat that contributed to his being named Canada’s CFO of the Year for 2009.

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