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Libby mine claims bought

by Ryan Murray
| July 26, 2013 11:37 AM

In the Wild West, poker was played with silver dollars, but in modern-day Lincoln County, it’s apparently being played with silver mines.

The Montanore mine project near Libby faces what could be its largest obstacle yet after a mysterious company bought four controversial claims on top of the Libby Creek adit. That site is a critical access to possibly 230 million ounces of silver and nearly 2 billion pounds of copper.

Optima Inc., a private company founded June 14, bought the four remaining claims that have been slowing down the permitting process for Mines Management Corp. 

Previously, District Judge James B. Wheelis of Libby upheld the settlements of seven of nine claimants on top of the adit. 

Arnold Bakie and Walter Lindsey of Idaho were the two holdouts. 

Bakie, whose claims reached back to 1984, when his uncle staked out areas on Libby Creek after discovering quartz and gold, wanted to be rid of the claims.

“I had an opportunity to make a buck so I did her,” he said. “I don’t know what [Optima’s] intentions are. You should ask them.”

That, however, is easier said than done.

Optima has no Web presence, no centralized phone number and no public business infrastructure yet. Heather Ennis, a public contact for the company, was using her last employer, Midas Gold, Inc., as her contact information. Ennis said Optima had designs on the property on Libby Creek.

“We have some future plans to do some exploratory drilling in the decline,” she said. “We don’t plan to sit on it.”

Ennis’ involvement suggests that the new land transfers could be part of a long-running rivalry. She is a former Revett Minerals, Inc., employee and her father, Frank Duval, founded Revett, the silver and copper mining company in Troy. It is a local competitor of Mines Management and the two Spokane-based companies have squared off several times during the years. 

Duval said there is currently no connection between himself, Optima or Revett, but he implied that he has at least some information on Optima’s goal in Lincoln County.

“At this time I’m not in a position to say what it is,” Duval said. “I hesitate to say if I’m involved [with Optima] or not. The principals don’t want a lot of attention.”

Duval’s involvement with Lincoln County mining extends back at least to the 1990s. He was part of a joint venture with Noranda (the owner of the Libby Creek adit before Mines Management) on the Montanore project in the mid-1990s when he was squeezed out for not providing matching funds. He then founded Revett as a private company in 1999 and left when it went public in the mid-2000s.

Glen Dobbs, the chief executive officer of Mines Management, said the shadowy nature of Optima Inc. was a sign for possible alarm.

“I suspect this will be clearer in time,” Dobbs said. “There is no information associated with this company. That is indicative of someone with something to hide.”

John Shanahan, president and chief executive officer of Revett, said firmly that Duval is not in cahoots with his company and that he has no idea what Optima’s intentions are. 

“We have no thoughts on [the land sale] because it doesn’t impact us,” Shanahan said. “[Duval] may have some share holdings in Revett, but he is not one of our major shareholders.”

Dobbs isn’t convinced. 

He was surprised by the land sales and saw the sign of something malevolent toward his company.

“We are not surprised by the sale of the claims,” Dobbs said. “We have tried to work with Bakie and his group for several years. We had patented claims which they staked over.”

Bakie said Mines Management was given many opportunities to buy the remaining claims. He said the claim owners were willing to sell at fair-market value, but Dobbs never made any realistic offers. 

“Glen Dobbs has fought us for seven years. And when we went to the table, he offered peanuts,” Bakie said. “The day before we sold the claims, my attorney talked to their attorney and said there was an opportunity to jump back in and make a bid. He told them they would have to bid before a certain date. But Dobbs didn’t respond until after the fact, when it was too late.”

Frank Wall, a Mines Management shareholder, explained Thursday that it was legitimate to stake a lode claim over a placer patent and, that with no mineral rights on the Libby Creek lode patents. Libby Creek Ventures was within its rights in 1984 to stake over the 1909 lode patents, which lost mineral rights due to a tax sale in the 1940s, Wall said after a conversation with Bakie.

“Mines Management and Newhi, Inc., ‘staked over all of (Libby Creek Ventures) claims and not the other way around as alleged by Glenn Dobbs,” Wall alleged.

Wall, since before being sued by MMI in 2007, said Dobbs has not been playing on a level playing field and (Dobbs) shouldn’t be surprised that Bakie and Lindsey sold their claims, saying Dobbs made offers far below their values.

 “Dobbs is arrogant, and he’s got a big ego,” said Wall, a North Idaho engineer who has been an avid proponent of the development and production of mineral resources in Lincoln County since its inception.  

Wall is concerned about Dobbs getting a Record of Decision and selling out to foreigners of an Asian government that does not respect the citizens of Northwest Montana’s interests.

 Wall contends Dobbs led the Forest Service to believe he owned the Libby Creek Ventures’ claims and the adit so he could move forward with the permitting and fundraising process.

 “Dobbs spent so much shareholder money pumping water out of the adit, and he didn’t have the permits,” Wall said. “There’s a lot of history here. But there’s always room for equitable negotiations.”

Wall has his own stake in the future of the mine. 

Bakie founded Libby Creek Ventures on the dissolution of Big John Mining Co. shortly after Noranda Minerals abandoned the Montanore project in July 2002 to protect the claims of those on the adit.

According to Mines Management’s website, the “Montanore project hosts one of the world’s largest silver-copper deposits containing in-situ mineralization estimated at more than 230 million ounces of silver and nearly 2 billion pounds of copper.” 

The stakes therefore are huge for whoever can bring the mine to fruition.

Ennis’ connections to Midas Gold, Inc., added one more level of mystery to the story, but the chief executive officer and president of Midas, Stephen P. Quin, said the Vancouver, British Columbia, mining company has no plans of moving into Lincoln County.  

“We have no role, no involvement here,” Quin said. “She (Ennis) is currently employed with us, but she is moving on. She should not have used our contact information.” 

The U.S. Forest Service is assisting the Montanore project with its environmental impact statement, but declined to say much regarding recent developments.

“Right now there is ongoing litigation involving the Libby Creek Adit that the Forest Service is really not involved in since it is between an individual and Mines Management,” Kootenai Forest Public Affairs Officer Willie Sykes wrote in an email. “The Forest Service does not comment on private litigation.”

Dobbs said he has a pretty good idea what’s going to happen.

“We believe the Optima group intends to disrupt work in the adit in an effort to delay development of the Montanore project,” he said. “We believe there is clearly a linking between Duval and Revett Minerals with the ultimate intent to take over Mines Management.”

Shanahan reiterated that he had no connection with Duval, but did speculate that delaying Montanore was indeed Optima’s intent.

Revett’s Troy Mine, which has been closed since the last quarter of 2012, was hemorrhaging money until layoffs this spring. The company’s Rock Creek Project in Sanders County has been hit with multiple lawsuits over its record of decision and potential environmental impact and seems no closer than Montanore to approval.

There’s no doubt that the mineral rights in this corner of Northwest Montana are worth potentially millions of dollars, and whoever works through the tangle of environmental, legal and financial obstacles first may well hold the upper hand. 

In essence, it’s become a high-stakes poker game, with Optima now seen as the wild card.

(Western News Publisher Matt Bunk contributed to this report.)