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HELENA, Mont. (AP) — Hecla Mining Co. has reached a nearly $30 million deal to acquire Mines Management Inc., the owner of the Montanore Mine in northwestern Montana, company officials announced Tuesday.
In the proposed merger, each outstanding common share of Spokane-based Mines Management will be exchanged for 0.2218 of a common share of Hecla Mining, which is based in Coeur d'Alene, Idaho. Mines Management shareholders still must approve the deal.
"The Montanore Project has been significantly advanced by Mines Management and, with the issuance of the final Environmental Impact Statement and Records of Decision early this year, now is the time to pass it on the Hecla to further advance the project and put it into production," said Glenn Dobbs, CEO and Chairman of Mines Management.
Hecla owns the Rock Creek Mine, also under Montana's Cabinet Mountains Wilderness, and about 10 miles away from Montanore. Hecla also owns the Lucky Friday Mine in Idaho, which is about 50 miles from Montanore.
"Hecla is the logical company to move the Montanore forward, with its close proximity to Rock Creek, as well as its similar geology and scale," Phillips S. Baker Jr., Hecla's president and CEO, said in a statement.
The U.S. Forest Service has given its conditional approval to the Montanore Mine, but the mine still needs a water pollution permit from the Montana Department of Environmental Quality. DEQ Director Tom Livers has said mine officials need to show the mine won't degrade five nearby creeks and the East Fork of the Bull River. The mine also needs a permit from the U.S. Army Corps of Engineers.
Last month, environmental groups filed a lawsuit arguing the Forest Service ignored studies that found the Montanore Mine could drain groundwater supplies in the area, damaging the habitat of federally protected bull trout.
Mines Management estimates the Montanore deposit contains 230 million ounces of silver and 2 billion pounds of copper. The mine would disturb more than 1,500 acres and remove up to 120 million tons of ore. Its entrance would be just outside the wilderness area — a rugged, remote landscape and one of a handful of areas in the United States where the government is seeking to restore grizzly bear populations.
Hecla Mining (HL) shares were down about 19 cents to $4.05 Tuesday morning, while Mines Management (MGN) shares were up 23 cents to 87 cents a share.
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