It was late in the afternoon, on a typically harsh Canadian winter day, as Rob McEwen, the CEO of Goldcorp Inc., stood at the head of the boardroom table confronting a room full of senior geologists. The news he was about to deliver was not good. In fact, it was disastrous, and McEwen was having a hard time shielding his frustrations.

This is how Chapter one of Wikinomics – The Art and Science of Peer Production – began. In what is truly a remarkable story, my friend and neighbor Rob was having no luck with his geologist team finding gold on a big tract of land they owned. Taking some time out for personal development, he wound up at an MIT conference for young presidents – and the subject of Linux and the open source development movement came up. Rob thought about that for a bit, and then quickly raced back to Toronto and announced:

I’d like to take all of our geology, all the data we have that goes back to 1948, and put it into a file and share it with the world. Then we’ll ask the world to tell us where we’re going to fund the next six million ounces of gold.

As the book (under) states, the geologists were a little skeptical – but they came around, and the rest is history. The contest Rob came up with to encourage responses was a rousing success, 80% of the 110 targets identified had substantial quantities of gold (50% of which hadn’t been previously identified), a $100 Million company turned into a $9 Billion, and my neighbor’s house got a lot bigger.

Time flies – that process started about eight years ago. But fast forward to September 19 2007, and what do you see? Established mining juggernaut Barrick Gold doing a very, very similar thing – but on a very different scale. The winners of the GoldCorp challenge had the chance to get several hundred thousand dollars, while the winners of this contest are looking at $10 Million.

So why are they doing it? To quote Barrick President and CEO Gregory Wilkins, “This is a way to go out to the global scientific community to focus that intellectual horsepower. Rather than limit the problem to a very small R.& D. staff, we have turned our R.& D. group into managers of research.”

No wonder – the challenge they are posting is quite difficult, as they need to improve on a silver extraction process that recovers only 6.7% of the ore, versus 80% for gold (while causing rather large environmental issues on occasion). And as University of Toronto professor William Bawden notes:

“Silica is a pretty tough material. If you’re going to attack this, you’re going to need to pull together different groups of people who probably had nothing to do with mining before.”

It all sounds fairly familiar to anyone that’s read wikinomics, no?

What Rob did all those years ago was attack the fundamental assumption that you simply don’t give away proprietary data – in fact, in that industry, you kept it under lock and key surrounded by guard dogs and a relatively large moat. That idea was so well established, no one ever challenged it. That didn’t mean it was necessarily right – and Rob proved that.

While it’s taken some time, Barrick Gold is now doing the exact same thing on a bigger scale (see www.unlockthevalue.com). But a mining company replicating what another mining company did successfully is relatively easy –  the bigger question for us is what other industries could learn from what’s happening in the mining industry, and what other fundamental notions could, and should be challenged in the age of wikinomics.