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Montanore mine project dusted off

| August 11, 2004 12:00 AM

A Spokane mining company announced plans last week to initiate the re-permitting process for the Montanore silver-copper mine located in the Cabinet Mountains.

The project was fully permitted as recently as 2002, prior to the previous operator¹s withdrawal and transfer of ownership to Mines Management Inc.

³Although the recent strength in metals prices can make any mining project more attractive, we have been especially encouraged by improved economics derived from revisions to the original mine plan,² said Glenn Dobbs, president of Mines Management.

Dobbs said the company anticipates a 20- to 24-month permitting period. The capital cost of the project is estimated at $236 million.

³With the existing Environmental Impact Statement as the basis for re-permitting, we believe the process will be significantly shorter than if we were starting from scratch,² he said.

The mine contains an estimated 260 million ounces of silver and two billion pounds of copper. The recently announced interim revised mine plan was designed to optimize the previous owner¹s plan, and envisions a mining capacity of 12,500 tons per day, producing approximately eight million ounces of silver and 64 million pounds of copper per year.

The Montana Department of Environmental Quality and the U.S. Forest Service have been helpful and encouraging as the company has explored the feasibility of moving the project forward, Dobbs said.

³We look forward to taking this outstanding mining project the next step toward production,² he said.

Mines Management completed an interim revised plan for Montanore in June. The mine was originally discovered by U.S. Borax in the 1980s and was further developed by Noranda at a cost of roughly $100 million.

Work conducted by Noranda prior to its withdrawal in 2002 included extensive engineering and feasibility studies, an improved EIS and full project permitting, as well as patenting of key mineral claims. The company also constructed a 14,000-foot evaluation adit before stopping roughly 2,000 feet short of the ore body.

The Spokane mining company opted to revisit the business venture when economic conditions improved making the capital cost substantially lower. Since Noranda¹s withdrawal from the project, silver prices have jumped from $4.50 an ounce to roughly $6.70.

³Our company¹s philosophy is to add value for shareholders at the lowest possible cost, and in redesigning the Montanore project, early indications are that we can not only develop a financially more attractive mine, but also a project significantly more friendly to the environment than that in the previously approved plan,² Dobbs said.

Mines Management will be unable to begin mining until the current permit is transferred over from Noranda or until a new permit is granted. Officials from MDEQ will examine issues surrounding mining in the area, as well as scrutinize the company¹s reclamation plan and the size of a reclamation bond needed for the project.