The Northern Miner’s 2005 “Mining Person of the Year” – Virginia Gold Mines’ Andre Gaumond

Since 1915, the Northern Miner weekly newspaper has chronicled Canada’s globally significant mining sector.

Intense. Passionate. Tenacious. Shrewd. Visionary. These are the words that come to mind when describing The Northern Miner’s Mining Person of the Year: Andre Gaumond, president and CEO of junior explorer Virginia Gold Mines.

Gaumond is a graduate geological engineer from Laval University in Quebec City and holds a master’s degree in economic geology from Montreal’s Ecole Polytechnique.

Early in his mining career, from 1987 to 1990, Gaumond worked as a mining analyst for several financial institutions, including Pemberton Securities and Midland Walwyn.

He then joined Corpomin Management as a technical and financial consultant, where he held management positions in various mineral exploration companies.

In 1993, Gaumond reorganized Virginia Gold Mines, assumed the title of president, and moved its head office to Quebec City — not a mining centre, but a picturesque city, ideal for his young family.

Carefully nurturing Virginia’s small six-figure budget, Gaumond at first travelled the world looking for mineral opportunities, but soon became convinced that focusing on the virgin greenstone belts in his own backyard in Quebec was the best strategy for his fledgling company. Not only was there great geology, but the provincial government was strongly supportive of mineral exploration and treaties had been settled with the native communities.

In particular, Gaumond recognized that the previous decades’ monumental efforts by the Quebec government to build and maintain the massive hydroelectric installations in the James Bay region had provided a once-in-history opportunity for mineral explorers to easily reach formerly difficult-to-access areas.

(Today, mineral explorers based in the town of Radisson in Quebec’s remote James Bay region can stay at hotels, choose between restaurants, travel on paved roads year-round, land planes on paved airstrips, and tap into cheap, abundant electricity.)

Virginia’s first success came in the mid-1990s with the discovery of La Grande Sud, a small high-grade gold deposit found close to one of Hydro-Quebec’s service roads.

For that, Gaumond received the Quebec Prospector of the Year award in 1996-97, on behalf of Virginia. He followed that up with the Resource Award from the Geological Order of Quebec in 2001.

One of Gaumond’s distinguishing characteristics as Virginia president has been his careful shepherding of the company’s treasury: he’s built it up when the market was hot, and has been slow to draw it down, even in the darkest moments of the gold bust in the late 1990s.

Gaumond raised $15 million for Virginia at the height of the last gold boom in 1996, added $3 million to the treasury in 1998, and then it wasn’t until 2003 that Gaumond tapped into the equity markets again in a big way, raising another $8 million.

This spring, on the heels of Virginia’s spectacular Eleonore gold discovery, Gaumond raised another $16 million, bringing Virginia’s working capital to a healthy $31 million, with no debt.

Even in the years the company shied away from the capital markets, Virginia has shown its class by consistently maintaining an excellent investor and corporate relations program, in both French and English.

In another major strategy to mitigate risk, Gaumond has been able to forge partnerships for Virginia in a variety of commodity plays with heavyweights BHP Billiton, Noranda, Placer Dome, Soquem and Teck Cominco, as well as the juniors Cree Gold Exploration, Globestar Mining, Matamec Exploration, Miramar Mining and Osisko Exploration.

Unusually, though, Virginia has tended to retain operatorship in all these joint ventures in an effort to build up the company’s intellectual and operational expertise.

And in the past fifteen months, there has been the final vindication that Gaumond’s long-term strategy for Virginia was exactly the right one: the discovery of the wholly owned, multimillion-ounce Eleonore gold deposit, situated in Quebec’s Opanica reservoir area, some 320 km north of the town of Matagami.

Under the supervision of Paul Archer, Virginia’s long-time vice-president of exploration, company geologists discovered the metasediment-hosted Eleonore deposit in September 2004, after following up enticing gold and silver showings upcovered by reconnaissance work carried out in June 2001.

So far, exploration drilling has found three parallel zones — Roberto, mid-Roberto and Roberto-Est — with Roberto having been delineated over a strike length of 1.9 km and to a depth of 900 metres. This zone remains open in all directions, and new gold-bearing zones are being found near it.

Gold mineralization at Eleonore is simple, high-grade and remarkably consistent over great distances. In short, these are the “quality ounces” that every gold miner in the world is looking for.

Many observers not only describe Eleonore as the best gold deposit found in Quebec in ages, but as the best gold discovery made in Canada since Hemlo in 1980.

With no official resource yet calculated, analysts’ early estimates peg Eleonore’s resources at around 3 million ounces of gold, with the potential for an easy doubling or tripling of that figure with more drilling.

Gaumond and Virginia’s year was topped off in early December with a friendly offer from Goldcorp to acquire the Eleonore project for about US$420 million in shares.

It’s a deal full of subtleties, but the gist of it is that Goldcorp will acquire all of Virginia’s shares and then redistribute the junior’s non-Eleonore assets, including the $31-million treasury, into a new junior exploration company run by Gaumond and his existing Virginia team. The spin off company will also hold a production royalty on Eleonore.

While no rival bid for Virginia has emerged as of presstime, the story’s by no means over at Eleonore, as many are expecting a good, old-fashioned area play to emerge in the district.

And armed with $31 million in cash and a decade’s worth of hard-won experience in the area, don’t be surprised if Andre Gaumond and his old Virginia team aren’t finished yet either!

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