Jim Middlemiss. Financial Post · Feb. 29, 2008 | Last Updated: Feb. 29, 2008 9:00 AM ET

John Sibley has spent most of his legal career working for different law firms engaged in securities and commercial work related to the mining sector.

He moved in-house and took on the job of vice-president, general counsel and secretary at Uranium One Inc. a Vancouver-based miner with offices in far-flung places such as Australia, South Africa and Kazakhstan.

Despite the miner’s global operations, when it came to lining up outside counsel, Mr. Sibley didn’t need to look further than his own backyard and the Canadian law firm Fasken Martineau DuMoulin, which has operations across Canada and in London and Johannesburg. “It seemed natural to get them to work for us because we are configured ideally for their platform,” Mr. Sibley says.

John S.M. Turner, leader of Fasken’s mining group, says there are more than 30 lawyers across the firm dedicated to serving mineral companies, covering everything from joint ventures to financings and mergers and acquisitions. “It’s proved to be a very good practice for us.”

Mr. Sibley is not alone in his choice of counsel. Mining companies from around the world are calling on Canadian firms to handle their growing empires. Canadian law firms can be found on everything from giant mergers and acquisitions involving the Alcans and Rio Tintos of the world, to working for growing and acquisitive mid-market companies and junior miners hoping to hit the mother lode.

When it comes to mining law, Mr. Sibley says Canadians are “number one. I think they are the best in the business.”

Take Steve Vaughan, a former geologist with a masters degree in mineral exploration who practices law at Heenan Blaikie in Toronto. Mr. Vaughan, 70, says he’s a bit of an oddity in the legal world, since most lawyers don’t share his technical background. However, it has served him well. He’s been involved in infrastructure projects in more than 60 countries. “It’s what kind of gives me an edge.”

Indeed, law firms such as Faskens, Stikeman Elliott; Cassels Brock & Blackwell; Lang Michener; Heenan Blaikie; Blake Cassels & Graydon; McCarthy Tétrault; Gowling Henderson & Lafleur; Miller Thomson, among others, have lawyers that are well known in the mining community for their talents.

In an economic cycle where commodity prices are growing, and firms are increasingly turning to the Canadian capital markets to fund their growth, it spells opportunity for local law firms and they are taking advantage of it.

“It’s a cyclical sector,” says Jeff Lloyd, a securities lawyer at Blakes. Commodity prices have soared and that’s made it a busy time for mining lawyers adds Mr. Lloyd, whose firm has about 30 people working on such transactions at any given time.

High commodity prices, however, are a double-edge sword. While they encourage exploration and make it easier to raise money, they also prompt governments to demand higher royalties.

Fasken’s John Turner says governments from the Democratic Republic of Congo to Bolivia are demanding that existing royalty leases be renegotiated. “They’re not satisfied with the commercial terms any more.”

He says miners are “realistic about that to some degree and have a little flexibility — when governments move unilaterally it causes big problems. They lose sight that over the long term, it’s very bad [for investment].”

Jeffery Snow, managing director of the mining practice at McMillan Binch Mendelsohn in Toronto, said there’s a “real bandwagon effect, where developing countries think mining firms are earning too much money.”

Developing countries want a larger piece of the action, and he says they have the leverage to get it because, unlike manufacturers, mining companies are prisoners of geography. “Companies can’t move their ore bodies. When Nike sets up an operation it can move out pretty darn quick. Once you find an ore body, you’re stuck.”

Nonetheless, such fears haven’t appeared to hamper activity. Mark Bennett, co-chair of the 20-person mining group at Cassels Brock & Blackwell, said business “hasn’t let up, despite what’s happening overall in the credit markets. It’s as busy as ever in terms of level of activity.” The strong gold prices are counterbalancing a low U.S. dollar and miners have the ability to “access both the equity and debt markets if they need to advance acquisitions and projects,” he says, noting that his firm recently acted for Goldcorp in its secondary offering of Silver Wheaton shares.

Peter McArthur, a corporate-commercial lawyer with Miller Thomson’s natural resources practice in Vancouver, says last year was “an incredibly busy year. I don’t think that will be repeated. I think we are going to see bigger discounts and smaller financings over the course of this year till we work out of the ABCP situation.”

However, Canadian lawyers should still do well given that the Toronto Stock Exchange is known for its mining activity, Mr. Vaughan says. More than 50% of the world’s mining debt and equity financing has a Toronto connection. “Toronto is the mining finance capital of the world.”

Mr. Turner says mining companies are attracted to Toronto’s stock exchange because it has greater liquidity than rivals such as the Australia Stock Exchange. Also, mining companies listed here tend to have higher valuations.

Mr. Vaughan explains that since the Bre-X gold mining scandal of the 1990s, exchange rules related to mining companies were tightened, making them more attractive from an investor’s point of view.

But with that concentration of companies comes challenges. Consolidation has decimated the ranks of Canada’s senior mining companies, Mr. Snow says. That’s not a bad thing, he adds. “Big-cap mining has dried up significantly, creating a huge vacuum in the market for the little guys to expand.”

While big mining deals such as BHP Billiton’s hostile bid for Rio Tinto captures headlines, Jay Kellerman, head of the global mining group at Stikeman Elliott, says that “where you want to be is in the mid-market. Those are the guys that are wheeling and dealing. The big companies have their own legal departments and it’s a different game.”

He says the large London firms, which can boast of 2,000 or more lawyers, are not the firms doing the mining deals on exchanges like London’s AIM. It’s the smaller legal shops. “We can compete and we do compete. We take business from big law firms everywhere because we know this business.”

Mr. Lloyd adds that the size of a mining company can be deceptive. He says that Equinox Minerals Limited raised $15-million in its IPO, which was handled by his firm. Today, it’s a $3-billion venture. “Today’s junior issuers are often tomorrow’s mid-tier and senior issuers.”