When Maura Lendon had the opportunity to earn an advanced degree in intellectual property law, even though that’s not her primary field, she went ahead and did it, just to improve her skills. She has never been afraid of a challenge, so it’s maybe not surprising that after almost 20 years in the legal profession, she took a leap and left her position in the telecom industry to enter the world of metals and mining. Her explanation? “Someone asked me what I would think about a job in mining.”
Lendon is now the vice president and general counsel for Primero Mining Corp., and the new field has helped her expand her knowledge base to become a better corporate lawyer. In the past, she was used to working as 1 of 500 worldwide colleagues at major companies such as AT&T, but her foray into the mining industry has offered her the opportunity to build her own legal team and directly assist with the acquisitions and efficiencies of a growing company.
Primero is a Canadian precious-metals producer, but many of its operations are in Mexico, and it’s focused on acquiring and developing additional properties throughout the Americas. The company acquired the San Dimas mine in 2010 from Goldcorp, and the company has been on the upward climb ever since, setting its sights on becoming an intermediate gold producer. The San Dimas mine is in a prolific precious-metals region that has produced gold for more than a century. Additionally, three months ago, Primero purchased Cerro Resources and hopes to develop that firm’s Cerro Del Gallo project into an open-pit mine.
The Road Ahead
A look at what’s around the bend for Primero Mining Corp.
1. By the end of the first quarter of 2014, Primero will complete its expansion of the San Dimas mine, adding a third-ball mill and a tailings pump to increase capacity. The mine will go from the 1,815 tonnes per day (TPD) that it produced in 2011 to 2,150 TPD.
2. The Cerro Del Gallo mine will open in 2015, and Primero has already appointed a vice president in charge of operations at the site. The property is expected to add at least 95,000 gold equivalent ounces (on a 100 percent ownership basis) of annual production, starting in mid-2015.
3. As it continues expanding, Primero is eyeing joint ventures, acquisitions, and new development in mining-friendly jurisdictions throughout the Americas.
The value of gold is cyclical, and resources and commodities markets are down across the board. Despite the dip, though, Lendon says Primero’s projected growth numbers are in reach. “We plan for challenging economics and scrutinize every decision with a different set of assumptions,” she says.
As a low-cost producer with a strong balance sheet, the company starts from a base of strength. When gold prices drop, stock transactions become difficult, but Primero looks for opportunities to make acquisitions. “Down markets actually become important because things surface that we might not otherwise have the opportunity to evaluate,” Lendon says.
In both good and bad markets, Primero’s management team works to increase efficiencies in existing assets to bring a full return on each investment. “We look at our mines very closely to first understand how to get more out of them without additional investments,” Lendon says. With narrow vein structures, the company has started using more targeted mining techniques. Better methods, skilled workers, and proper resources bring healthier returns. A third-ball mill—a machine that grinds the ore into a fine powder—will remove bottlenecking and increase capacity at San Dimas from 2,150 to 2,500 tonnes per day.
Primero hopes to eventually produce more than 400,000 gold equivalent ounces (GEOs) each year. In 2012, the company’s mines yielded 110,000 GEOs. As of press time, it’s on track to reach 130,000 in 2013. The advanced Cerro Del Gallo mine—scheduled to open in 2015—will also substantially increase production.
Driven by her belief that a lawyer must understand her industry, Lendon often visits mine sites to examine Primero’s operations. “It makes me a better lawyer and a better executive,” she says. “When I visit a site, I can focus on strategy and better identify new ways forward.”
Lendon started in telecommunications because she wanted to work in an important and relevant industry. Today, she’s discovering how crucial mining is to our world.
“Canada is a resource-based country,” she says. “I thought telecom was important to our daily lives, and it is, but there is nothing we depend on in life that’s not touched by mining. Our homes, our clothes, our transportation, our entertainment—basically, everything we have, someone had to mine something somewhere in order for us to have it.”