by Stockwatch Business Reporter
Richard Angus Bruce McDonald, the promoter who found the Casa Berardi gold mine in Quebec, has died, age 73. His colleagues will remember him dearly as a capable fundraiser, an admired mentor and a kind friend. Mr. McDonald is credited with turning around a 1980s mining market that was cooling off rapidly after the gold discoveries in the Hemlo Valley. His Casa Berardi gold find sparked an area play that sent a half-dozen of his Vancouver Stock Exchange-listed juniors soaring over $10, earning him the nickname R.A. Bruce McMillions. Like many a promoter, Mr. McDonald also had a thirst for the lively life which unfolded in dozens of memorable late-night hijinx.
In the beginning
After dropping out of high-school at age 16, Mr. McDonald became a board marker at the Toronto Stock Exchange. He spent the next two decades working his way up — to clerk, then trader, then broker — under the watchful eye of Don Bainbridge, “the greatest trader of all time in those days,” said John Tognetti. He said Mr. McDonald had a difficult childhood, but he got lucky at the TSE, when Mr. Bainbridge took him under his wing, which in turn set the stage for Mr. McDonald’s subsequent years of mentorship. His teaching continued in his later years when he owned stakes in three Canadian brokerages, First Canada, Standard Securities and Thomson Kernaghan. He educated several young brokers and promoters in Vancouver, including Mr. Tognetti. “I learned more about the business by talking to him than anyone else,” he said, pointing out that Mr. McDonald knew how to combine the right deal with the right people and say exactly what it was worth. Another of Mr. McDonald’s mentees was Murray Sinclair, who like Mr. Tognetti went on to a successful career in the market. Judging from the successes of Mr. Tognetti and Mr. Sinclair, their mentor had a good eye for spotting talent.
In 1978, at age 39, Mr. McDonald moved to Vancouver to pursue a career as a promoter, having recognized that the real money was made on the development end. “You can only work so many hours as a broker; you can only write so many tickets,” he once told the local papers. He made his first million quickly on an oil and gas deal, Liberty Petroleum, as told in Fleecing the Lamb, a book about the VSE, written by David Cruise and Alison Griffiths. They said Mr. McDonald acquired 300,000 shares of the nearly dormant Liberty at eight cents ($24,000), and six months later sold them at $5 ($1.5-million). (Fleecing the Lamb, published in 1987, devotes an entire chapter to the Golden Boy, who was the “it” promoter of the time).
By the early 1980s, the market was struggling and he had suffered several losses. “It [the market] was bad,” recalled friend Doug Corrigan, “similar or maybe even worse than today.” Fortunately for Mr. McDonald, everyone was struggling along with him, including major companies, such as Inco Ltd. It had just suspended exploration on several of its properties to conserve cash. Mr. McDonald saw this as an opportunity to perhaps option its most promising property. The parties spent months discussing the option of Casa Berardi to Mr. McDonald’s Golden Knight Resources Inc.
Deal making with a major
At first, Inco was wary of the promoter’s bombastic ways, recounted Mr. Cruise and Ms. Griffiths, concerns amplified by current stories at the time. One such story took place in London’s prestigious Park Lane Hotel. There, Mr. McDonald had tried to intervene as a night manager attempted to kick out one of his stockbroker friends. The naughty broker had snuck in what the British call a tart. As the story goes, the virtuous night manager gave Mr. McDonald a sound dressing down about low Canadian morals. Mr. McDonald grabbed a can of white paint from a painter fixing the ceiling and doused the prudish manager with it. He was thrown in jail for the night, and presented with a 2,000-pound fine for misbehavior and damages, but not before sharing a laugh with the policeman who led him away.
Mr. McDonald managed to ease Inco’s worries sufficiently for it to option to his Golden Knight 40 per cent of Casa Berardi, in exchange for Golden Knight spending $3-million on exploration. During their first few months working together, Inco executives reportedly urged the promoter to ease up on his hyperbolic promoting. Fleecing the Lamb said Inco’s president, Terry Podolsky, did give Mr. McDonald his due, but no more: “Bruce is a promoter. He wouldn’t be doing his job if he weren’t tooting his horn. He brought $3-million to the party. Full stop.”
Within a year, Golden Knight had fulfilled its $3-million exploration obligation. It had also attracted a new shareholder, Teck Corp., which grew to become Golden Knight’s largest investor. As the stock climbed, Mr. McDonald created another five companies, most of which had Golden in their names, to explore properties surrounding Casa Berardi. Pleasing area-play assays sent all five soaring over $10 in 1985. “He created a stock market when there were no opportunities for promoters and brokers, and raised millions and millions and millions,” said Mr. Corrigan, then a broker at West Coast Securities. John Gunther, of Jones Gable agreed. He also did business with Mr. McDonald in those days. “He was the largest money-raiser through those years,” said Mr. Gunther, “thanks in part to the support he had from Ned Goodman and Peter Brown.”
Noramco Mining Corp.
In 1986, Mr. McDonald began building his own mining finance house, selling all of his assets, mostly shares in his stable of juniors, to his private company, Noramco Capital, at a deemed value of $25-million. In April, 1987, he took Noramco Mining public, selling five million units at $10. It became a full-fledged miner in 1988, merging with Mr. McDonald and Gordon Keevil’s Highland-Crow Resources Ltd., then in predevelopment at the Pickle Crow property in Ontario, and Emerald Lake Resources Inc., in preproduction at Golden Rose in Ontario. Around this time, Mr. Corrigan recalls, Mr. McDonald stepped out of his Noramco elevator and was greeted by a man he did not recognize. “Hello. Do you work for us?” he asked.
“Yes,” replied the young man, “I am vice-president of human resources.”
“You have a staff?” asked a surprised Mr. McDonald.
“Yes, there are three of us, and I am the manager.”
This answer, says Mr. Corrigan, prompted his friend to march straight into his office, pick up his phone and call Peter Brown, to whom he said: “Sell my company. If it is this big, I can’t possibly manage it.”
A buyer, Battle Mountain Gold Company, arrived in April, 1988, offering Noramco $28.5-million for its 40-per-cent interest in two Ontario properties, but after two months of due diligence, it cancelled the deal.
In July, 1988, Mr. McDonald, Teck and Gordon Keevil arranged to sell 3.2 million Noramco shares (19.9 per cent of the company) to Breakwater Resources Ltd. for $21-million ($6-million in cash and 2.68 million Breakwater shares at $5.50). Teck and Mr. Keevil took cash, while Mr. McDonald took stock. In connection with the sale, he stepped down as an officer of Noramco and joined the board of Breakwater.
A year later, bad news started to arrive. The Golden Rose mine had to shut down permanently because of mining difficulties, and Pickle Crow did not have enough gold to warrant production. Noramco’s stock plunged as low as 50 cents, while Breakwater slipped to $2.50. Being the wise trader that he was, Mr. McDonald had sold his 2.68 million Breakwater shares at better prices, ranging from $4 to $6. Further, he saw Normaco’s battered price as a buying opportunity, acquiring 1.7 million shares around 50 cents. Weeks later, Breakwater bought them around 65 cents, seeing off Mr. McDonald for a second time.
Business mixed with pleasure
It is a cliche, but Mr. McDonald lived hard, worked hard and played hard, according to those who were there. Mr. Gunther of Jones Gable recalls the annual father-son fishing trip to Stewart Island Lodge near Campbell River. Every year, Mr. McDonald would invite 25 men and their sons for a weekend of camaraderie. Having a good time was top of the agenda.
In Vancouver after work, the Jolly Taxpayer pub was the meeting place of choice, and then it would be on to Hy’s restaurant or Il Giardino for dinner. The often-mentioned factoid that Mr. McDonald owned part of Il Giardino is incorrect. He did own a small part of Umberto’s cooking school, Villa D’Elia, in Italy.
When not travelling, he sometimes held elaborate parties at his five-acre estate in the Southlands area of Vancouver. The property is complete with horses and stables, which he added for his equestrian wife and daughter.
George Cross remembers what it was like to be on the receiving end of Mr. McDonald’s perhaps surprisingly empathetic ways. Mr. Cross lost his first wife to cancer in 1978. After some time had passed, Mr. McDonald introduced him to his second wife, in a typical Bruce McDonald way — by flying her in from Toronto for a first date. Mr. Cross summed up his feelings, and those of many others, for his friend: “What can I say about Bruce? How great he was and stupid he sometimes was … I have a kind spot in my heart for him.”
Mr. McDonald died March 4, 2013. He is survived by his wife Willie, his sons Mark and Ian, his daughter Morgan, his sister Debbie and his nephew Christopher. The family will host a memorial service, a celebration of life, at its Southlands home April 21.