Features | From Pivot Magazine

How one CEO built a thriving and sustainable mining operation

Sean Boyd follows a simple guiding principle: treat the land and its people with respect

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Meadowbank, Agnico Eagle's open-pit goldmine near Baker Lake, NunavutMeadowbank, Agnico Eagle’s open-pit gold mine near Baker Lake, Nunavut (Photograph courtesy of Agnico Eagle)

This is the first table I ever sat at when I came to work here,” says Sean Boyd, laying a hand on a modest, honey-coloured six-seater, the kind you might find in a grandparent’s dining room. When Boyd, a 61-year-old FCPA and long-time CEO of Agnico Eagle Mines Ltd., first arrived at the company as a young external auditor in 1983, the table was big enough to seat the firm’s entire head office staff. “This was their boardroom table back then, and I would lay out my binders on it.”

Boyd’s sentimental attachment to this piece of office furniture is noteworthy not for what it says about his taste in interior decoration, but for what it reveals about his corporate philosophy and, in particular, his relentless focus on long-term thinking. During Boyd’s 22 years as boss, Toronto-based Agnico Eagle has grown from an obscure one-mine operation to a global leader in both size and reputation. The company now has nine mines in Canada and elsewhere, more than 11,000 employees and contractors, and a market cap of roughly $19 billion. It poured approximately 1.78 million ounces of gold last year and expects to hit two million ounces this year, making it the biggest gold producer in Canada and fourth largest in the world. 

Perhaps even more remarkable, Agnico Eagle has become a global mining titan while commanding an enviable reputation for being a prudent and responsible operator with an outsized regard for the environment and its own social obligations. MSCI—a service that ranks firms’ commitment to environmental, social and governance (ESG) issues—gives Agnico Eagle an AA rating, the highest awarded in the precious metals sector, for its stellar performance on health and safety, labour relations and renewable resources. (Competitors Barrick Gold Corp. and Newmont Corp. have BBB and A ratings, respectively.) And in a recent Globe and Mail investment screen using information from the global financial markets data provider Refinitiv, Agnico Eagle was the only Canadian mining firm to rank in the top five worldwide for cutting back fresh water usage, a key environmental variable in the mining industry. “There are lots of mining companies in Canada that care about the environment and their communities,” says Brendan Marshall, vice-president of economic and northern affairs at the Mining Association of Canada. “But Agnico Eagle’s corporate philosophy is among the best of the best. If I lived beside a mine, they’re the ones I’d want to be running that mine.” Agnico Eagle earned its sterling reputation by prioritizing sustainability and long-term thinking decades before they became buzzwords. The company, Boyd points out proudly, hasn’t changed its mission statement in 25 years. “Yes, you have to make money,” he declares firmly. “But our goal is not just to create long-term value for our shareholders. It’s also to be a great place to work and to make a big contribution to the communities in which we operate. It’s all about building trust.”

Now Boyd faces his biggest challenge yet: bringing Canada’s remote northern territories into the 21st century with resource development done the Agnico Eagle way. Despite the many challenges of working up north—high costs and low temperatures among the most obvious—the firm has quickly become a leader in high Arctic mining. Its mines in Nunavut employ almost 2,400 workers and contractors, making it the biggest private-sector employer in the territory. This year, it expects to account for a stunning 25 per cent of Nunavut’s total GDP. By developing northern mining in a responsible fashion, Boyd hopes to not only grow his own company, but also permanently alter the reputation of his entire industry. It’s a big job. But like that old table, Boyd is in it for the long haul.

Boyd at Agnico Eagle’s head office in downtown Toronto (Photograph by Jake Sherman)

For anyone steeped in this country’s political history, Boyd’s grand northern strategy is not entirely novel. In 1958, John Diefenbaker electrified the nation with his “Northern Vision” that would deliver “a new soul for Canada.” He vowed to “develop Arctic routes to . . . those vast hidden resources” of Canada’s North and create jobs by the hundreds of thousands. It proved a powerful message, as voters handed Diefenbaker the largest majority in Canadian electoral history. Unfortunately, that vision eventually faltered due to a lack of infrastructure and discouraging geological results. Six decades later, it’s back. And this time it depends on a new vision of northern prosperity championed by Boyd.

In person, Boyd is as generous and approachable as Agnico Eagle has proven to be within the broader mining community. A Scarborough, Ont., native and graduate of the University of Toronto, he supported himself as a university student working as an armed guard for an armoured car company delivering cash and, presciently, gold.

Boyd was first exposed to the mining industry in 1981, when Clarkson Gordon sent the young auditor to work at Canadian mining giant Noranda. A fortuitous assignment to Agnico Eagle came two years later; within another two years, he was hired as the firm’s comptroller, later rising to CFO. As Agnico Eagle was one of the first Canadian public companies to be listed on Nasdaq, Boyd found himself thrown into a myriad of different tasks, such as fulfilling U.S. filing requirements, meeting with research analysts and bankers, and dealing with mergers and acquisitions. “I wouldn’t have gotten that experience anywhere else,” he says. In 1998, despite having no background in geology, he became CEO. Boyd touts the respectful corporate culture established by his predecessor, former CEO Paul Penna, as a major factor in his longevity, as well as that of his staff. “We don’t have a lot of turnover. People tend to spend their entire careers here because it is a great place to work.”

Boyd considers his accounting background to be a crucial factor in Agnico Eagle’s long-term success. “We have a lot of CPAs here, and that’s a good thing,” he says. “Generally, accountants are a conservative bunch. So I say ‘no’ a lot.” This steely resolve has allowed Agnico Eagle to weather the booms and busts that make the gold sector such an unpredictable, personality-driven business. The firm distinguishes itself by aiming for boring, year-over-year stability—it does not sell its gold on the forward market, has resisted entering risky locales and aims for consistent financial performance in exploration and capital expenditures. “This is a cyclical business with a lot of volatility,” says Boyd. “You need to be able to step back and think strategically in a disciplined and long-term way.”

“The biggest and most exciting opportunities right now are in the Canadian North”

Boyd’s unwavering dedication to long-term thinking is on full display with Agnico Eagle’s 2014 decision to buy half of the prodigious Canadian Malartic gold mine in northern Quebec from Osisko Mining Corp. The Malartic mine produces more gold than any other in Canada, with annual production estimated to be 700,000 ounces for 2020. (Yamana Gold, the mine’s other half-owner, accounts for 50 per cent of that volume.) It’s also one of the world’s most unusual mines, with the town of Malartic perched nearly on top of it. Such close proximity between residents and ore created plenty of friction with the previous owner.

“This is the largest open-pit gold mine in Canada and the closest house is less than 200 metres from the pit edge,” says Ugo Lapointe, national program coordinator for the non-profit watchdog MiningWatch Canada. “The dust, noise and blast tremors experienced by residents represented a huge challenge.” During Osisko’s ownership, Lapointe notes, dust and noise violations numbered in the thousands; in 2016, MiningWatch Canada supported Malartic locals who launched a class action lawsuit against the mine.

Having inherited another firm’s problems, Boyd immediately set about fixing the underlying issues. “We took the Agnico Eagle approach of being open and transparent,” he explains. “So first we needed to eliminate the infractions.” His firm put in place new protocols to keep the noise and dust down. Then came lengthy negotiations over fair compensation for those past problems. A deal was reached late last year, and the lawsuit was abandoned; together, Agnico Eagle and Yamana Gold paid an undisclosed settlement amount, plus an additional $10.9 million to local residents.

“Agnico Eagle is one of the best companies in terms of environmental and social performance,” says Lapointe. “Compared with Osisko, Agnico Eagle is like night and day.” Given MiningWatch’s pointed critiques of many other companies, this is high praise. In fact, Lapointe goes out of his way to note that when he attends environmental conferences or roundtables, he almost always runs into Agnico Eagle representatives. “They definitely push their staff to be on top of best practices, as compared to other companies, and even some government regulators, who don’t show up as often.”

Of course, a mining company’s reputation rests not just on the mines it currently operates, but also on what happens after it leaves. Agnico Eagle incorporates full environmental remediation expenses as part of its all-in gold cost; it spent US$14 million on reclamation in 2018 and lists future liabilities of US$386 million (projected out to 2067) on its books. Additionally, the firm still operates in Cobalt, Ont.—the site of its first mining operation back when it was focused on silver (element symbol Ag) and nickel (Ni) rather than gold—despite the fact that Agnico Eagle shut that mine over 30 years ago. “We’re still there,” says Boyd, “and we’re still spending money on reclamation of land where we haven’t poured an ounce of silver since 1988.” Five years ago, Agnico Eagle gave Cobalt a gift of $1 million to refurbish its theatre, library and museums in recognition of its historic ties to the company. “We could have left a long time ago, but we haven’t.”

MiningInside Meliadine, an Agnico Eagle mine near Rankin Inlet (Photograph courtesy of Agnico Eagle)

Boyd likes to say that mining is a tough business. And mining in Canada’s North is tougher than almost any other place on Earth, thanks to -45°C temperatures (before wind chill), lack of infrastructure and sky-high transportation expenses. According to the Mining Association of Canada, the cost of doing business in the North is between two and two and half times higher than in southern climes—a major obstacle to opening up the North to future development.

High costs are a barrier, but not an insurmountable one. In 2010, Agnico Eagle opened the Meadowbank gold mine near Baker Lake, which has since poured more than three million ounces. Last year, Amaruq, a satellite operation about 60 kilometres away, and Meliadine, an underground mine near Rankin Inlet on Hudson Bay, also became active. In the last two and a half years, Agnico Eagle has spent US$1.2 billion building the Amaruq and Meliadine mines and the infrastructure required to access them, including port improvements and, since 2008, more than 200 kilometres of roads—making the firm the biggest road builder in the territory.

While Boyd is prepared to accept high costs and hard work if the payoff is there, the one factor he has studiously avoided throughout his career is political risk. While other gold miners set up shop in dangerous or hostile locales such as West Africa or the Pacific, Agnico Eagle’s mine sites in Canada, Mexico and Finland have been carefully chosen for their guarantee of legislative support and popular acceptance. “We only want to go where we’re wanted,” Boyd explains. “The geological opportunity is what attracted us to Nunavut, but it was the warm reception that convinced us to stay.” When Nunavut was created in 1999, 18 per cent of the territory was set aside for Inuit ownership—land that was specially selected for its geological potential. This, as Boyd repeatedly points out, means the Indigenous people of Nunavut are direct and willing participants in resource development on their land. And they’re keen to have Agnico Eagle as partner.

“Mining is extremely important to Nunavut,” says Jimi Onalik, associate deputy minister of economic development and transportation in the territorial government. “Mining represents one of the few opportunities people have for employment, so this is really exciting for us.” Bringing well-paying mining jobs to Nunavut along with the infrastructure and education those jobs require is seen as the best way for its people to become full participants in the modern Canadian economy.

“The geological opportunity is what attracted us to Nunavut, but the warm reception is what convinced us to stay”

Nearly a quarter of the jobs at Agnico Eagle’s mines in the territory are staffed by Nunavummiut workers, most of whom started at entry-level positions. To boost Inuit prospects for advancement, Agnico Eagle runs several education programs, including a pre-employment readiness program for first-time workers, as well as a career path program for its own adult employees seeking promotion; both were recently acknowledged by the Conference Board of Canada as industry-leading best practices. The firm also conducts week-long workshops in local high schools, raising awareness of career opportunities in skilled trades such as welding, carpentry and mechanics. In addition, Boyd has pledged an unprecedented $5 million toward the creation of an Arctic university in Iqaluit, even though, as Onalik notes, such a thing is unlikely to have any immediate impact on the firm’s labour needs. “More than any company I can imagine, they are investing in basic education,” says Onalik. “It is really obvious with Agnico Eagle that they view their presence in Nunavut as long-term—they talk about 10- to 15-year training plans, and that’s very different from past experiences that Nunavut has had with other mining companies.”

But Boyd is counting on Ottawa to do what Agnico Eagle can’t. While he has no beef with a carbon tax, he points out there’s no alternative to diesel-generated power in the already-pricey North. Instead, Boyd is pushing the federal government to come up with innovative energy solutions for the Arctic, such as wind farms in Nunavut and a hydro corridor from Churchill, Man. They’re the sort of frontier-opening projects that Diefenbaker—or railway builder Sir John A. Macdonald before him—would have backed. Boyd has also called on Ottawa to tackle other major social policy challenges in Nunavut, such as access to housing, medical care and nutritious food. He may be the biggest employer in the region, but, he says, “We can’t do everything.”

As for Agnico Eagle’s dominant presence in the territorial economy, Onalik seems unconcerned. “Another company might try to use that sort of influence to force things through,” he says. “But Agnico is not abusing that influence. We have faith that they will make their best efforts to include local people as much as possible and to minimize the environmental impacts. We’re extremely lucky to have such a willing and receptive partner.”

Collage of various mining imagesScenes from the opening of Agnico Eagle’s Meliadine mine (Photographs courtesy of Agnico Eagle)

Despite Agnico Eagle’s pristine corporate standing, Boyd is the first to admit that mining has a PR problem. Many people consider “sustainable mining” an oxymoron—the entire industry, after all, depends on taking things out of the ground and not replacing them. “Our industry tends to be back on its heels because a lot of negative stories come out about mining,” he says. “We as an industry aren’t doing a good job talking about all the benefits of resource development.”

The mere presence of former Canadian mining heavyweights such as Alcan, Noranda and Falconbridge used to provide incontrovertible evidence of the sector’s importance to economic growth and rising living standards. In their absence, Boyd is now stepping into that leadership vacuum. He can reel off a long list of contributions that Agnico Eagle has made in Canada and around the world creating jobs, paying taxes and building infrastructure. “After 35 years at Agnico Eagle, what really sticks with me are the benefits that come to communities when we open up new mines,” he says. The company launched a social media campaign called #WeMakeMiningWork, part of Boyd’s strategy to communicate these benefits directly to the public. And with an eye to policy-makers, Boyd delivered a major speech this past November to the Canadian Club, calling for a national commitment to open the Arctic to resource development. “There is an obligation for us to make the case that resource development should play an important part of this country’s future,” he says. “And the biggest and most exciting opportunities right now are in the Canadian North.”

Still, Boyd knows that the best way to bolster the mining industry’s reputation isn’t by talking about it himself; it’s by doing business the Agnico Eagle way and letting others—industry representatives, government partners, Indigenous people and even vocal mining critics—do the talking for him. By building large, complicated resource development projects in ways that satisfy its obligations to the environment, local communities and Indigenous people, Agnico Eagle is proving that “sustainable mining” is indeed possible. “We’ve got the winning strategy,” he says. He’s also got a very old table. Expect both to be around for a long time to come.

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