Kinross CEO Tye Burt: Staking his claim, and his reputation

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Ernest Hemingway would not approve.

In the 1920s, Café de Flore and Café des Deux Magots on Paris's Left Bank were alive with great American writers: Hemingway, Gertrude Stein, Ezra Pound, Thornton Wilder. Hemingway's first books were published in Paris and it is said he wrote part of A Moveable Feast in Café de Flore, "bent over his notebook, writing slowly as if he weighed every word, cutting his sentences sharply," according to Sara Mayfield, author of Exiles in Paradise.

Some 90 years later, on a cold, grey Friday in January, Flore is full of tourists, a few smartly dressed Parisians taking a break from St.-Germain-des-Prés shopping excursions, and one wealthy Canadian businessman – Tye Winston Burt, CEO of Toronto's Kinross Gold , the world's fifth-largest gold company, with a market value of almost $19-billion.

We sit upstairs, where it is less frenetic and where Mr. Burt can speak about his three passions – Hemingway, sailing, gold – without having to raise his voice. With his close-cropped hair, trim physique and crisp light-grey suit, Mr. Burt, 53, could be a retired colonel. But today it is his love of Hemingway that has brought us to Flore.

"I have a bit of history here," he says, while ordering typical Flore fare – Welsh rarebit, a green salad and a single glass of house Chablis. "In 2000, I convinced a gang of friends to do a Hemingway pilgrimage. We toured all the Hemingway haunts that we could find – Café de Flore, the Hemingway bar at the Ritz and les Deux Magots. Then we went to Pamplona and ran with the bulls. The Sun Also Rises was our guidebook."

He did a similar trip with his son Andrew, then 17, two years ago: "We did the bull run together. I was coaching him on what to do and Andrew said 'I don't have to run faster than all those guys, I just gotta run faster than you.'"

Mr. Burt's other literary loves include Robbie Burns, Joseph Conrad, James Joyce, John Irving and George MacDonald Fraser. But a few writers from the non-fiction world have also influenced him heavily, notably Paul Collier, author of The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It.

The book explains why many African and some Asian countries, in spite of their vast commodities wealth and endless foreign-aid injections, can't break out of grinding poverty. Why does Mr. Burt care? Because Kinross's bet-the-ranch, $7.7-billion (U.S.) purchase last year of Vancouver's Red Back Mining made Kinross the biggest foreign investor in Mauritania, and is about to make it one of the Western Saharan country's biggest employers. Kinross bought Red Back largely for the potentially mammoth Tasiast gold development, whose construction phase will employ about 3,500 workers when it starts next year and whose mining phase will directly employ 2,500.

Kinross's investors may not like what he has in mind, which is to spread Tasiast's wealth beyond just the local elite and Kinross's non-African shareholders, minimize the environmental footprint and leave behind something more useful than a gigantic hole in the ground. "I want to make Mauritania an illustration of what responsible development of natural resources can do," he says.

While no boss of any mining company can claim to run a "sustainable" operation – mining by definition is destructive and metals are not renewable – Mr. Burt says his goal is to envelop the project in the company's corporate responsibility goals. In a word, that means "responsible" mining.

Kinross started the process with a bang by announcing a partnership with Montreal's École Polytechnique, the Mauritanian government and the World Bank to launch a mining school in Nouakchott, the capital. Kinross is donating $10-million to the school, which will train geologists, engineers and technicians. "Mauritania has only three million people and only one university, so this will make a big impact," he says. "The government was ecstatic about it."

When Tasiast coughs up its last ounce in about 20 years, Kinross intends to leave behind an educated work force, roads, power generation and clean water systems that can be redeployed for new industries.

Altruism does not, of course, fully explain the effort. Mr. Burt thinks corporate responsibility is an essential part of the value-creation process. Mining companies live and die on mining permits and shabby behaviour can delay or eliminate them. "There are plenty of examples where protesters have closed the gates and governments have shut down mines," he says. "When a government thinks about issuing a permit, we want the community to say, 'We want Kinross here.'"

Mr. Burt comes by his green inclinations honestly. Raised on a farm near Brooklin, Ont., north of Whitby, he is the son of a botany graduate. "My life was a biology lesson," he says. "Every time we were out in a stream fishing or on a lake sailing, there was always a discussion of the world around us that translated into a passion for the outdoors, and a view that we have to tread lightly in the world we live in."

The farm boy, however, couldn't resist the distinctly unnatural world of corporate finance and mergers and acquisitions. After graduating from Osgoode Hall Law School, he joined Burns Fry (now part of BMO Nesbitt Burns). A decade later, in 1997, he landed at Deutsche Bank as managing director of the global metals and mining group. Next came Barrick Gold, where he was head of corporate development. In 2005, he lunged at the opportunity to run his own show and took over a messy company with regulatory problems – Kinross – that had been cobbled together through a string of acquisitions.

An investment banker at heart, Mr. Burt embarked on another round of acquisitions that would drive the company into the high-growth, though risky, gold hot spots in Russia and Latin America (the company has no mines in Canada). In 2007, he bought Bema Gold for $3.1-billion; a year later Aurelian Resources was snapped up for $1.2-billion.

Along the way, Kinross became Canada's biggest corporate player in Russia, where its capital spending has reached $2.7-billion. In a speech in October, Russian Prime Minister Vladimir Putin cited Kinross as a model of successful foreign investment in his country.

The big move came in 2010. The Red Back purchase was a huge gamble not just because of its size and the location of its biggest project – Mauritania – but because many investors were skeptical about its potential. They thought the price tag was way too rich given the scant information about Tasiast's gold reserves. Institutional Shareholder Services triggered a low-grade panic among Kinross executives when it urged its clients, who owned about 10 per cent of Kinross's shares, to reject the deal.

Kinross nonetheless got its prize and Mr. Burt has not retreated from the "just trust me" message as the company gathers more information about Tasiast's potential. At last count, the mine had "measured and indicated" resources of 9.3 million ounces. Kinross is poking holes into the ground at Tasiast to prove that the true number is much bigger.

The rumour in the industry is that the reserve number could easily land in the 20- to 40-million-ounce range. Mr. Burt won't comment, other than to say "Some estimates have been conservative. Tasiast is one of the great ore bodies in the world."

While shareholder anxiety builds about Tasiast's true size – the shares have underperformed the market in the past year – Mr. Burt is deepening both his personal and corporate responsibility pledges. His alma mater, Ontario's University of Guelph , is the object of his charitable affections. His family foundation recently donated $1-million (Canadian) to the school to fund a series of first-year lectures on service to the community and Kinross gave $1-million to fund a Guelph chair in environmental governance.

At the end of our lunch at the Cafe de Flore, our conversation turns to sailing. Mr. Burt owns a remarkable bit of Canadian seafaring history. At Expo 67 in Montreal, the hit of the Maritimes Pavilion was the on-site construction by boat designer David Stevens of a 50-foot mahogany schooner called Atlantica. As a young boy, Mr. Burt was there to see it. Thirty-three years later, while killing some time in Halifax, "I spotted a little sign by the waterfront that said 'Schooner for sale.' It was Atlantica, in ill repair. I bought it on the spot, restored it and we've been sailing and racing it ever since."

Today Atlantica is the queen of Mahone Bay, N.S. Mr. Burt says he has no retirement plans, but I can already imagine what he'll be doing when he gives up the helm at Kinross – reading Hemingway in the helm of Atlantica, undoubtedly pleased it is powered by the wind, and not unsustainable hydrocarbons.

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THE CURRICULUM VITAE

BEGINNINGS

• Born in 1957 in Toronto, raised on a farm near Brooklin, Ont.
• Educated at University of Guelph (history) and Osgoode Hall Law School.

HOME LIFE

• Lives in Toronto and has a holiday home in Mahone Bay, N.S.
• Married to Janet MacDuff, who owns a golf course and restaurant in Muskoka.
• Three children: Andrew, 19, Annie, 17 and Mary, 12

SPORTS AND OTHER PASSIONS

• Owner of Atlantica, a 50-foot mahogany racing schooner, moored in Mahone Bay
• Loves to ski; favourite spot: Sun Peaks, in central British Columbia
• Fly fishing

• Self-described “voracious reader,” whose favourite authors include Ernest Hemingway, Robbie Burns and Joseph Conrad
   

CAREER

• Began Bay Street career in 1986 at Burns Fry in Toronto
• Became head of Deutsche Bank’s metals and mining group in 1997
• Head of corporate development at Barrick Gold in 2002
• Named chief executive officer of Kinross Gold in 2005

OTHER INTERESTS

• Vice-chairman of University of Guelph and head of Guelph’s $200-million BetterPlanet Project
   

IN HIS OWN WORDS

On corporate responsibility:

"If that makes us a little bit more expensive, so be it. I'm convinced that, long term, it's in the best interests of the company to do it."

On retirement, or lack thereof:

"I think I have lots of fight left in me. I don't plan to go anywhere until we deliver on the Red Back promise. The market was skeptical, but I firmly believe we're going to deliver."

On rumours that a merger with Russia's Polyus Gold might happen one day:

"Interesting, but it's not where we're focused. We have spectacular set of assets to develop, so we're quite happy where we're sitting today."