Hecla officially acquires Montanore

Hecla Mines this week began touring the Libby and Troy communities to discuss the next step in what Lincoln County hopes will be the next active step forward in opening the Montanore Mine. Hecla officially acquired Mines Management and the Montanore Project on Sept. 13 with approval from Mines Management shareholders.

On Monday, Hecla Vice President of External Affairs Luke Russell, along with Mines Management General Manager Doug Stiles, and Bruce and Chas Vincent of Environomics, began the tour that’s already hosted conversations about the future of Montanore with groups of elected officials, civic leaders and community members.

“We’re laying out the schedule as we see it, some of the bumps in the road that have to be overcome to get through there. We’re excited about the potential,” Russell said Monday in an editorial meeting with The Western News.

The Montanore Project is expected to produce over 100 million tons of mineral resource, Russell said, including 200 million ounces of silver and 2 billion pounds of copper.

After last week’s acquisition, Mines Management is not disappearing. Just like the Revett Mining Company, which Hecla acquired last year, Mines Management will continue to operate as an independent entity, but is now a fully owned subsidiary of Hecla. As part of the acquisition, Mines Management shareholders approved the terms that will exchange outstanding common shares of Mines Management for 0.2218 of a common Hecla share.

And while Montanore and Mines Management have new owners, the project itself is no stranger to the Libby and Troy communities. “We Support Montanore” signs can still be found in business windows throughout the Kootenai. Lincoln County claims the second-highest unemployment rate in the state and long-standing businesses have continued to close down.

While the community’s anxiety continues to build toward the mine’s official opening, Russell said the process is an important piece to the puzzle in getting to the production phase, which he currently estimates to be five or six years away.

“It’s a significant deposit and so the next step for us is to work through the final permitting,” he said. “The project-perceived Records of Decision for the Forest Service and the state of Montana came earlier this year and for those to comply with that record of decision, we need to update the plan of operations and a host of monitoring and engineering plans.”

Russell said updating the plan of operations and engineering the mine’s infrastructure could take about eight months and if all goes well, the next step, evaluation of the deposit, could be ready by next summer. The evaluation phase, Russell said, could deliver 35 direct jobs to the Montanore project at that time.

Evaluating the deposit would include extending the 14,000-foot adit by another 3,000 feet into the mineralized zone to determine how the company would mill and recover the minerals. Hecla will also look to add more environmental information to submit to federal and state agencies to show consistency with the Record of Decision on how the project should be managed.

Russell said the evaluation phase could be expected to last three years, followed by the construction phase, estimated at another three years. During the evaluation phase, most of the work would be contracted out, where Russell said Hecla contracts would encourage local hiring.

“That’s Hecla’s approach,” he said.

Headquartered in Coeur d’Alene, Idaho, the 125-year-old mining company has four operating mines around the western hemisphere, including operations near Durango, Mexico, Quebec, Canada, Mullan, Idaho and Juneau, Alaska.

Russell said Hecla’s management of the Green Creek mine in Alaska is relevant to Montanore project because it is adjacent to a wilderness area and operated with respect to environmental values. The nearby population of brown bear, the same species of bear found in the Cabinets, outnumbers that of the entire lower 48, Russell said, while salmon habitat has remained healthy.

“The lessons that we’ve learned by operating there in a sensitive environment, are the lessons that we’ll bear to the Montanore Project,” he said.

Hecla also claims a few exploration operations in other part of the United States, and now, with last week’s acquisition completed, Hecla turns its attention to northwest Montana.

Russell said most of Helca’s mines produce about 2,000 tons per day. By comparison, the Rock Creek mine could produce 10,000 tons per day, and Montanore is expected to produce between 12,000 and 20,000 tons per day.

But Russell, Stiles, Chas and Bruce aren’t naïve to the persistent litigation brought by environmental groups against resource production development. Just last week, the 92,000-acre East Reservoir logging project in the Kootenai National Forest was halted by an injunction granted while the Alliance for the Wild Rockies seeks to appeal a judge’s earlier decision to let the project move forward.

Different groups have recently brought litigation against the Montana Department of Natural Resource and Conservation, alleging that the Rock Creek Project, purchased by Hecla last year, could produce a negative affect on steams in the Cabinet Mountain Wilderness. In April, different groups also sued to oppose the Forest Service’s approval of the Montanore project, claiming the agency failed to consider environmental impacts on the area near the Cabinet Mountain Wilderness.

“In the case of Rock Creek, it’s gone through a cycle of litigation, including the Ninth Circuit,” Russell said. “The area that we see in question that could be challenged is narrowing. We think it’s a much smaller universe of things that anyone could bring that the court would take and not say ‘Hey we’ve already dealt with that.’”

Regarding the Montanore lawsuit, Russell said Mines Management has also jumped in with support in the legal arena, and will submit its own brief of support with information gathered over the past decade.

“We think we’ll win,” he said. “The Ninth Circuit came back to the agencies in the Rock Creek (lawsuit) and said you did everything right and we think that’s what they’ll do here.”

Chas Vincent noted that as Hecla moves forward through the gauntlet of litigation and permitting steps, the best course of action is to proceed with the information collected by Revett Mining and work in collaboration with all groups involved.

“Since they just got the keys to Montanore, it’s going to be that same approach of trying to get people together and see how do we build the best mine possible. When you get people to do that, you’re not going to get everyone to agree on everything, but you’ll at least have an understanding of what can happen.

“What you’re seeing with the East Reservoir Project is years and years of collaboration… and yet there’s still someone who’s going to say they prefer the no-action alternative. You’re never going to be able to fully get away from that,” Chas said.

From the Environomics standpoint, Chas and Bruce work with companies like Hecla, Revett and Mines Management to help bridge the gap between the company’s goals and the goals of the government and community. Bruce said while the community may grow frustrated with the extended timeline caused by litigation, these steps are necessary, or else the entire project could just end up back in court.

The best way to mitigate that adversarial approach by community and environmental groups, Bruce said, is to host the conversation with different forms of outreach.

“The directed outreach I believe is going to have a real product at the end in the form of less litigation and in the form of a better mine,” Bruce said.

The Montanore and Rock Creek projects could be Hecla’s biggest and most producing mines, if the projects survive the permitting process and litigation at hand and in the future. The involved groups have until January to submit their briefs of support to allow the Montanore project to proceed or go back to the drawing board.

For either project, Russell and Bruce agreed that it’s important to have a realistic idea of when the project could move forward, with production expected around six years from now. In the short term, the evaluation phase at Montanore could still be on schedule for next summer.

“The prize here is very potentially rewarding for a long time for the company and the community, but we have to be patient and persistent to get through the process, and next summer is probably best case,” Russell said. 

Reporter Seaborn Larson may be reached at 293-4124 to by email at slarson@dailyinterlake.com.