Montanore suffers setback in lawsuit

The Montanore mining project has hit another snag, perhaps delaying it further on its path to permitting.

Judge James B. Wheelis granted several motions in the case of Mines Management v. Libby Creek Ventures on March 12, affirming the defendants’ superior claims to unpatented mining claims on Libby Creek.

Montanore Minerals CEO and President Glenn Dobbs said Wheelis’ ruling was an unexpected burr in Montanore’s saddle. 

“Needless to say, we are disappointed,” Dobbs said. “I can say we don’t consider the decision to be a show-stopper by any means.”

Dobbs said the mining company still had legal options available, even though the motions for summary judgment went against Montanore. He declined to elaborate.

The case dates back to September 1984, when Ralph Bakie and Dan Reid, now deceased, discovered gold and quartz on some of the claims on Libby Creek. Montanore purchased the property and constructed a mine adit that crossed into the claims in 1989. In 2002, Montanore terminated the lease and returned the easement to the grantors, Big John Mining Company and Rodan, Inc. (now Libby Creek Ventures).

The defendants claim that they have restaked these unpatented claims producing valuable minerals. The plaintiff, Montanore, said the defendants exploring and mining its claims would be cause for actionable trespass.

Frank Wall, a defendant in the case, said there is much more to come in this case.

“There are no ramifications today,” Wall said. “But there are potential ramifications down the line. This case, in my opinion, sets precedent.”

The unpatented claims filed on Libby Creek, according to the General Mining Act of 1872, need very little to still be considered active claims.

The legislation gives the claimant rights to explore and mine on a staked claim without an official deed, as long as the claim is worked every year. At least $100 worth of labor or improvements must be put into the claim every year - clearly a more potent requirement in 1872 than today. Failure to meet these guidelines would free up the claim for anyone to reclaim.

That is where much of the Libby Creek case comes to a head. When did work stop on the unpatented claims? Does that conflict with Montanore’s previously abandoned patented claims?

Wheelis clearly thought it needed a closer look, and he approved motions stating the defendants’ claims supersede those of Montanore’s.

David Armstrong, head of mining engineering at Montana Tech, was surprised by the judgment, although he admitted he did not know the details of the case.

“In the mining industry, we typically don’t let things go that far,” he said. “If there is any doubt as to ownership, you don’t do it.”

Montanore, seeking punitive damages from the defendants, filed the current complaint in 2007. The mining company wanted payment for defamation, slander and punitive damages for those statements.

The motion suing for damages was denied by Wheelis.

Amy Guth, attorney for the defendants, was not available for comment. Eric Klepfer, Montanore’s environmental consultant, deferred comments to Dobbs.