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Montanore project moving forward

| November 4, 2004 11:00 PM

By Roger Morris Western News Publisher

There¹s a new kid on the block and they expect to be here for possibly 30-40 years having a sizeable economic impact on the community.

Officials from Mines Management Inc., owners of the proposed Montanore silver and copper project met with community members Wednesday night, following a luncheon with local elected officials. The Spokane-based company acquired the former Noranda proposal in August 2002 and has begun the process of re-permitting the project 15 miles south of Libby just outside Cabinet Mountain Wilderness.

³We wanted to the give the community an explanation of what is being proposed,² said Glenn Dobbs, president and CEO of the company. ³Unfortunately I¹m not at the point of hiring right now,² he said. ³It (permitting process) could take as little as a year and long as 2-3 years.²

Beginning with this meeting, Mines Management will become a more familiar face in the community, Dobbs continued.

Company officials anticipate providing work for 200 to 250 people in the early phases of the mine with a payroll of $10 million. The operations could expand to extract more ore per day and employ 425 to 450 people with a payroll of $25 million annually.

³Looking at $10 million in salary at baseline operations with a multiplier effect it will create $40 million to $70 million in economic impact to this community,² Dobbs said. ³You will definitely see an impact in this community.²

Estimated life of the project ranges from 15 years to 30-45 years, he said.

³It¹s conceivable that your children could graduate from high school and work their entire productive lives on this project and retire from this company,² he said.

The company has started working with the Montana Department of Environmental Quality, the U.S. Forest Service and the U.S. Fish & Wildlife Service. All of those agencies have said the project begins at about 50 percent in the permitting project because Noranda was fully permitted and ready to start when it pulled the plug and shut down the project because of metal prices in late 1994.

³We were assured it is permitable,² Dobbs said. We were assured that we weren¹t starting over and that we would be starting at least 50 percent down the track.²

Eric Klepfer, vice president of operations, clarified the company¹s position in the permitting process.

³I don¹t want anyone to think we¹re halfway through the process,² he said. ³They will be initiating a full NEPA process toward an EIS (environmental impact statement). The one thing we¹re at in this process is that a lot of that legwork has been done already.²

Klepfer said the Forest Service said it will look like a new EIS for the project but it will be a compilation of the past document and its supplements as well as updates for changes that have occurred in the last nine years as well as changes Mines Management may requests in the Noranda plan.

Dobbs said his company has discussed with permitting agencies moving forward with a preferred alternative plan from 1992.

³It made sense technically to us,² he said.

Noranda had completed 14,000 feet of tunneling (an adit) beneath the Cabinet Mountains toward the silver and copper deposit. That adit begins where Libby Creek exits the Cabinets. It is estimated to be 2,000 feet short of the deposit.

Once construction of the mine begins, two parallel tunnels will be dug beginning at the mouth of nearby Ramsey Creek. The tailings will be piled between Cherry Creek and Bear Creek to the north.

The construction phase could employ300 to 350 people.

Dobbs admitted the Mines Management, a small company, is subject to the same economic pressures that Noranda faced with metal prices.

³For a number of reasons we believe they will remain high for sometime to come,² Dobbs said.

³We will not initiate construction until we complete our financing,² Dobbs continued. ³My expectation is after we capitalize the project, we will operate it at an unprofitable level for a couple of years.²

Other variables include a change in the political landscape over a period of time. As a result Dobbs would like to see local support for the project, especially toward officials in Helena.

He anticipates Mines Management developing and operating the project through their subsidiary New High Silver, which will be relocated from Washington to Montana and renamed.

³We¹re a small company at this time,² Dobbs said. ³This project could become very attractive to other companies. They could make an offer that is very attractive to Mines Management stockholders and take over.²

Or they could become operating partners, Dobbs said.