Ring of Fire: High-Stakes Mining in a Lowlands Wilderness

Ring of Fire: High-Stakes Mining in a Lowlands Wilderness

Editor’s Note: Canadian Mining Magazine is pleased to present an excerpt from Virginia Heffernan’s new book Ring of Fire: High-Stakes Mining in a Lowlands Wilderness. If you’d like to win a copy of this book, fill in your details at http://canadianminingmagazine.com/subscribe. We’ll make the draw May 19, 2023, and will ship the book anywhere in Canada. 

Excerpted and adapted from Ring of Fire: High-Stakes Mining in a Lowlands Wildernessby Virginia Heffernan. © 2023 by Virginia Heffernan. All rights reserved. Published by ECW Press Ltd. http://www.ecwpress.com

A whoop and the clink of glasses interrupt the steady hum of lunchtime conversation at Cyrano’s restaurant on King Street East.

Toronto’s mining community, especially its hard-drinking promoters and financiers, has been meeting at Cyrano’s since 1959, shaking on deals and plotting their next exploration “play.” On this autumn day in 2007, Nemis, Harvey, and financier Robert Cudney have gathered at the circular marble-topped bar in the middle of the dining room. The trio is huddled over a new map of the James Bay Lowlands, trying to conjure a catchy name for a crescent of volcanic rock in the middle of nowhere that promises such great riches.

“Look, the belt wrapping around the central geology looks like half of a ring,” notes Cudney as he runs his index finger along the green shading on the map. He swivels his leather stool to face the others, his voice rising a notch. “And the magnetic highs are all lighting up in red. How about we call it the Ring of Fire?”

“Yes! That’s it!” cries Nemis, a Johnny Cash fan who often mimicked the singer’s signature wardrobe of all black. Hoisting his glass of red wine, he bursts into the musician’s hit song, written by Cash’s partner June Carter and Merle Kilgore but made famous by Johnny. Even though some scientists cringed at the flippancy of the Ring of Fire moniker, Richard Nemis was a promoter, not a geologist. He was smitten and he was the boss.

A few weeks after the Cyrano’s gathering, shareholders shimmied into Noront’s annual general meeting (AGM) in downtown Toronto to the tune of Carter and Cash’s “Ring of Fire” booming from loudspeakers. By the end of October 2007, Noront’s publicly traded penny stock had breached C$7 per share and Nemis was bragging about placing his next equity financing at C$10 per share.

“There have been many times when I was willing to say ‘uncle’ and quit this business,” Nemis told his adoring shareholders at the AGM party. “But when it’s all said and done you’re doing it for exactly what happened with this little company of ours.”

The room erupted in cheers. Nemis had made a lot of people extremely wealthy with his nickel-copper discovery in the James Bay Lowlands — on paper at least.

When it comes to mineral exploration, the label “promoter” can have negative connotations. Many a retail (non-professional) investor has been swindled by promoters who stake claims on ground with limited or no value — known in the business as moose pasture — and talk up the ground as if it were the next great mine. In the ensuing “pump and dump” scheme, they sell their shares, deflating the stock bubble before the trusting investor can cash in.

But promotion has a role in legitimate projects too. It’s next to impossible to raise money for such a speculative venture as exploration without creating some market excitement around a play. Some research analysts who make their living evaluating the investment quality of junior mining companies — early-stage companies mostly involved in the exploration phase of mining and responsible for most of the world’s mineral discoveries — won’t touch even the most promising projects unless company management shows a flair for enticing investors.

In this regard, Richard Nemis was a pro. He was just the person to convince both retail and institutional investors to finance the kind of high-risk/high-reward drill campaign the Ring of Fire discovery required. And his timing was good: in 2007 the internet was just emerging as a popular platform for discussion and debate in the penny stock investment community.

“Dick [Nemis] was one of the first promoters to step into the internet world and make it work,” David Graham, a former Noront vice-president, told me. “By attaching the Ring of Fire moniker to the discovery, he created a cachet in the emerging internet and investor hubs. It all came together to go viral every time the Ring of Fire was mentioned in a news release. That thing went everywhere.”

Nemis even had names for his diamond drills to go along with the Johnny Cash theme. One was Johnny and two others were Vivian and June, after Cash’s first and second wives. Large prints of the late superstars were taped to the sides of the rigs. When “Vivian” began to burn out, she was allegedly left on the side of a bush trail and used for spare parts.