SPOKANE, WASH., November 15 /CNW/ - Mines Management, Inc. (Amex: MGN)
(TSX:MGT) (the "Company") is pleased to provide an update on activities
occurring during the third quarter of 2007.
Advancing the Montanore Silver-Copper Project continues to be the
Company's main focus. In addition to its planned advanced exploration and
delineation drilling program, the Company is continuing its permitting efforts
with federal and state agencies and its optimization review of the Project.
During the third quarter of 2007, construction and installation of a water
treatment plant was the main activity at the Montanore Project site, with
testing and commissioning of the plant scheduled for November 2007.
In the third quarter of 2007, the Company:
-- Maintained a strong cash position, with $26.3 million at September
-- Continued preparations for the advanced exploration and delineation
drilling program by:
-- commencing installation and construction of the water
treatment plant and building, which was completed as of
October 31, 2007,
-- hiring additional staff at the Project site to support
initiation of underground activities at the Libby adit,
-- receiving shipments of underground mining and surface
-- Advanced the permitting process by working closely with state and
federal agencies to provide technical and other information in support of the
preparation of the draft environmental impact statement.
During the third quarter, our progress at the Project site included the
installation of a water treatment plant and construction of the ventilation
support structure in preparation for the commencement of rehabilitation
activities in the Libby adit. The Company expects to start the dewatering and
rehabilitation of the Libby adit late in the fourth quarter of 2007, once the
final approval of the Environmental Assessment for road use is received.
Following dewatering and rehabilitation, the Company expects to advance the
adit approximately 3,000 feet toward the middle of the mineral deposit.
The Company plans an additional 10,000 feet of development drifting to
provide drill access to different portions of the deposit, construction of
drill stations, and diamond core drilling of approximately 50 holes totaling
approximately 45,000 feet. The objectives of the advanced exploration and
delineation drilling program are to:
-- Expand the known higher grade intercepts of the Montanore deposit;
-- Develop additional information about the deposit;
-- Further assess and define the mineralized zone; and
-- Provide additional geotechnical, hydrological, and other data.
The Company expects that results of the drilling program, if successful,
would provide data to support the completion of a bankable feasibility study,
allowing the Company to convert a portion of its mineralized material/resource
estimates into reserves.
The net cash expenditures for the quarter ending September 30, 2007, were
$3.4 million for the purchase of equipment and construction of the water
treatment plant and other infrastructure and $0.6 million for operating
activities. The Company believes that it has sufficient working capital for
rehabilitation of the Libby adit and commencement of the delineation drilling
Advanced Exploration and Delineation Drilling Program
During the third quarter of 2007, the Company continued preparations for
the exploration and delineation drilling activities at the Libby adit site.
The water treatment plant components were delivered during the quarter and
installation of the plant was completed October 31, 2007, with testing and
startup activities beginning on November 1, 2007. Other activities included
the delivery of major mine equipment, pump stations, power load centers and
other key equipment necessary for the delineation drilling program.
Installation of the ventilation duct work was completed for the first several
hundred feet of the adit.
Technical staff and site personnel numbers remained relatively constant
with an electrician and general laborer added to the site staffing. The
Company expects to begin rehabilitation activities at the Libby adit once the
approval of the Environmental Assessment (EA) is received from the U.S. Forest
Service (USFS) and dewatering commences. The EA is scheduled to be approved in
early December 2007.
Major equipment for the rehabilitation stage of the program is either on
site or scheduled for delivery in the fourth quarter of 2007, or early in the
first quarter of 2008. Costs for the major equipment are within budget, and it
is still anticipated that expenditures through the end of 2007 will be
approximately $6.5 million for equipment and activities related to the
preparation for commencement of the drilling program.
During the third quarter, the Company also advanced the geologic model
for the project, and it is expected that the updated model will be completed
in the fourth quarter. The Libby site engineering and geologic staff continues
to focus their efforts on optimization of the current proposed mine plan.
During the fourth quarter of 2007, the Company expects to initiate discussions
and solicit proposals from outside engineering firms on the task of updating
the current cost study to a bankable feasibility study by incorporating the
results of the delineation drilling program.
Permitting and Environmental
The Company continued work with the U.S. Forest Service and the Montana
Department of Environmental Quality in the third quarter of 2007 on the final
stages of the preliminary draft Environmental Impact Statement (EIS). It is
anticipated that the preliminary draft will be issued to the agencies for
internal review early in November. The preliminary draft EIS will be reviewed
for content and then jointly edited to produce the draft EIS which will be
submitted for public comment. The agencies' schedule indicates the completion
of the draft EIS by April 2008.
The Company also continues to work with the State of Montana to develop
the 404 permit application, which will establish allowable discharge levels,
and collect baseline environmental information to support our permit
applications. Formal permit applications will be submitted concurrently with
the submission of the draft EIS for public comment.
Financial and Operating Results
Mines Management is an exploration stage company with a large
silver-copper project, the Montanore Project, located in northwestern Montana.
The Company continues to expense all of its expenditures and has no revenues
from mining operations. Financial results of operations include primarily
interest income, general and administrative expenses, permitting, project
advancement and engineering expenses.
Quarter Ended September 30, 2007
The Company reported a net loss for the quarter ended September 30, 2007
of $1.7 million, or $0.09 per share, compared to a net loss of $1.4 million,
or $0.11 per share, for the quarter ended September 30, 2006. The $0.3 million
increase in net loss was attributed to a $0.3 million increase in the third
quarter of 2007 in legal, accounting, financing, and administrative expenses
related to increased investor relations activities in support of the Montanore
Project, and a $0.2 million increase in employee compensation as a result of
salary increases and the addition of thirteen new employees, offset by a $0.3
million increase in interest income received in the third quarter of 2007
compared to the third quarter of 2006 from earnings on the $32.1 million net
proceeds of the Company's public offering in April 2007. Overall Project
spending also increased in the third quarter of 2007 compared to the third
quarter of 2006 as a result of increased permitting activities and site
preparation for the delineation drilling program.
Nine Months Ended September 30, 2007
The Company reported a net loss for the nine months ended September 30,
2007 of $5.1 million or $0.30 per share compared to a net loss of $4.0
million, or $0.31 per share, for the nine months ended September 30, 2006. The
$1.1 million increase in net loss for the nine months ended September 30,
2007, compared to the nine months ended September 30, 2006, is largely
attributable to a $0.3 million increase in legal, accounting and
administrative expenses related to the increased cost of implementing
additional Sarbanes-Oxley internal control procedures and investor relations
activities related to the public offering completed in April 2007, increased
compensation expense of $0.5 million, a net $0.3 million increase in all other
activities and a $0.3 million increase in stock option expense due to new
hires and repricing of options in accordance with Company policy. These
increased expenditures of $1.6 million were offset by an increase of $0.5
million in interest income for the first nine months of 2007 from earnings on
the proceeds of the Company's public offering in April 2007.
During the quarter ended September 30, 2007, the net cash used for
operating activities was $0.5 million, which consisted largely of permitting
and administrative expenses associated with increased activities at the
Montanore Project. The net cash used in investing activities during the
quarter was $3.4 million for procurement of equipment and construction in
progress. For the nine months ended September 30, 2007, the net cash from
financing activities was $31.6 million, consisting of proceeds from the public
offering completed in April 2007. The net cash on hand at the end of the first
nine months of 2007 was $26.3 million, compared to $2.1 million at end of the
first nine months of 2006.
The Company anticipates spending approximately $6.5 million from cash and
investments on hand during the final quarter of 2007 for activities and
equipment purchases related to the advanced exploration and delineation
drilling program and repermitting efforts at the Montanore Project. The
Company believes that it has sufficient working capital for rehabilitation of
the Libby adit and commencement of the delineation drilling program which will
take place over the next two years. In order to complete the planned program,
the Company expects that it will require approximately $10 million in
Subsequent to the end of the third quarter, the Company completed a $10
million private placement of its common stock on November 5, 2007. The
proceeds of that transaction are expected to be used for working capital and
general corporate purposes, including advancement of the Montanore Project and
Forward Looking Statements
Some information contained in or incorporated by reference into this
report may contain forward looking statements. These statements include
comments regarding further exploration and evaluation of the Montanore
Project, including planned rehabilitation and extension of the Libby Adit,
drilling activities, feasibility determination, engineering studies,
environmental and permitting requirements, process and timing, financing
needs, planned expenditures in 2007 and 2008, potential completion of a
bankable feasibility study, and the use of proceeds received from the
Company's recent private placement transaction and the markets for silver and
copper. The use of any of the words "development", "anticipate", "continues",
"estimate", "expect", "may", "project", "should", "believe", and similar
expressions are intended to identify uncertainties. The Company believes the
expectations reflected in those forward looking statements are reasonable.
However, the Company cannot assure that the expectations will prove to be
correct. Actual results could differ materially from those anticipated in
these forward looking statements as a result of the factors set forth below
and other factors set forth and incorporated by reference into this report:
Worldwide economic and political events affecting the supply of and demand for
silver and copper; volatility in the market price for silver and copper;
financial market conditions and the availability of financing on acceptable
terms; uncertainties associated with developing new mines; variations in ore
grade and other characteristics affecting mining, crushing, milling and
smelting and mineral recoveries; geological, technical, permitting, mining and
processing problems; the availability, terms, conditions and timing of
required governmental permits and approvals, and potential opposition to the
majority of permits; uncertainty regarding future changes in applicable law or
implementation of existing law; the availability of experienced employees; the
factors discussed under "Risk Factors" in our Form 10-K, as amended, for the
period ending December 31, 2006.
For further information:
For further information: Mines Management, Inc. Vice President Corporate
Development and Investor Relations Douglas Dobbs, 509-838-6050 Fax:
509-838-0486 Email: firstname.lastname@example.org Website: www.minesmanagement.com