Hecla Mining to acquire Mines Management

Hecla Mining Co. has announced a nearly $30 million agreement to purchase Mines Management Inc., and with it the Montanore Mine in Lincoln County. The agreement is pending Mines Management shareholder approval and other financial conditions.

In the proposed merger, each common share of Mines Management will be exchanged for .2218 of a common share of Hecla. Based upon the 10-day Volume Weighted Average Price, the exchange rate is a 41 percent premium for Mines Management stockholders.

Lincoln County Commissioner Greg Larson praised the acquisition.

“I was very pleased to hear that Hecla Mining Company has entered into an agreement to purchase Mines management Inc., and the Montanore Mine project,” Larson said. “As commissioners, we have followed the progress of both Montanore and Rock Creek mines very closely. We are very fortunate to have Hecla Mining in Lincoln County. Hecla is a 125 year old experienced mining company with a commitment to environmental protection and they are a local, Idaho-based company headquartered in Coeur d’Alene. Montanore and Rock Creek are both world class mineral deposits and I believe the social and economic impacts of the mines will benefit Lincoln County more long term by them being under the same ownership. I believe the social impacts will be lessened and the economic benefits will continue much longer as each mine is projecting 25-plus years of life and that should result in a sustained long term positive economic future for Lincoln County. This is very positive news for Lincoln County.”

Montana Sen. Chas Vincent expressed similar sentiment.

“Hecla’s acquisition of the Montanore project is great news for everyone in northwest Montana,” he said. “With 125 years of experience and know-how, Hecla brings a wealth of knowledge and technical ability to our region. Hecla’s Greens Creek Mine in Alaska is a great example of this mining experience being applied, and why it should be important to us here on the Kootenai. Greens Creek is partially within a national monument, and it also borders a wilderness area. The mine has been successfully operated for almost two decades in a manner that is applauded by both state and federal regulators, as well as the citizens in the communities they are a part of.”

Hecla Mining also owns the proposed Rock Creek Mine in Sanders County, roughly 10 miles as the crow flies from Montanore. The company also owns and operates the Lucky Friday Mine in Idaho, roughly 50 miles south of Rock Creek, and the Greens Creek Mine in Alaska. Greens Creek is located on Admiralty Island and inside a National Monument, which company officials say gives them a unique perspective and ability to operate safely in environmentally sensitive areas.

Hecla’s experience in managing projects in environmentally-sensitive areas was touted by company president and chief executive officer Phillips S. Baker, Jr.

“Hecla is the logical company to move Montanore forward, with its close proximity to Rock Creek, as well as its similar geology and scale,” he wrote in a May 24 press release. “We have considerable experience operating Greens Creek in a National Monument which will, combined with our financial strength and commitment to the community and environment, help Montanore reach its full potential.”

Hecla vice president of external affairs Luke Russell said the company intends to proceed with all possible haste on the permitting and exploration of both mines. The evaluation phase of Montanore, he said, is a two-to-three-year project which will bring an estimated 80 to 90 full-time jobs to Lincoln County. 

“Like we did with Rock Creek, we’re going to update the analysis,” he said. “But the evaluation should result in 80 to 90 jobs for a two to three year period.”

Russell said that while the mines are close in proximity, there are enough difficulties posed by geology and geography to require the mines be operated separately. The decision on how the mines will be operated, either simultaneously or consecutively, will be based upon the information obtained during the evaluation work.

Russell said the evaluation phase of Montanore could begin in as little as 18 months. The mine still requires a wetland mitigation permit, or 404, from the Army Corps of Engineers and an updated water discharge permit from the Montana Department of Environmental Quality, neither of which Russell said he anticipates being a problem.

What could pose a problem for the mine, however, is ongoing litigation. In addition to the usual suits filed by environmental groups, Montanore has been involved in ongoing litigation with other parties over financial and property issues. Russell said Hecla would be making every effort to work with those parties in an attempt to resolve those matters outside of court and thereby expedite the approval process for the project.