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BILLINGS, Mont. (AP) — Hecla Mining Co. moved Friday to acquire Revett Mining Co. in a $20 million stock deal that anticipates closing one silver and copper mine in northwestern Montana and pushing forward with the development of another.
Shareholders of Revett, which is based in Spokane Valley, Washington, still must approve the merger.
Hecla intends to continue the permitting process for Revett's Rock Creek Mine under the Cabinet Mountains Wilderness near Noxon.
The company based in Coeur d'Alene, Idaho, also plans to close and reclaim the Troy Mine southwest of Libby, which Revett put on care and maintenance in January. Revett President and CEO John Shanahan said the company was unable to maintain the Troy Mine while pursuing development of Rock Creek.
The deal is expected to close late in the second quarter of 2015.
Rock Creek holds an estimated 229 million ounces of silver and 2 billion pounds of copper, according to Revett.
As global commodities prices have fallen in recent months, silver prices declined from a high of $21.45 per ounce to just over $17 per ounce on Friday. Copper prices also fell sharply in recent months.
Companies have nevertheless continued to pursue new projects with an eye on the long term. Rock Creek has enough ore to maintain production for more than three decades or more, according to documents submitted to regulators.
Another silver and copper mine, Montanore, is proposed immediately north of Rock Creek by Mines Management Inc. of Spokane. Montanore cleared a significant hurdle this week when the Kootenai National Forest issued a long-awaited environmental study that will allow the project to proceed pending final approval.
Both Rock Creek and Montanore would go beneath the Cabinet Mountain Wilderness, a 35-mile-long range of glaciated peaks and scenic river valleys that received its name from early French explorers who thought the area's rock formations resembled cabinets.
Mary Costello with the Rock Creek Alliance, a group focused on protecting water quality in northwest Montana and northern Idaho, described the two mines as a "double-whammy" that would drain the water from surrounding creeks and threaten water quality up to 25 miles downstream at Idaho's Lake Pend Oreille.
Both projects have been pending for years. The Rock Creek mine was first proposed in the late 1980s.
"We're on our fourth company — Asarco, Sterling Mining, then Revett and now Hecla," Costello said. "But the environmental impacts have not changed, and the problems have not gone away."
The Rock Creek mine would produce 10,000 tons of ore a day at its peak and disturb almost 500 acres of surface, including 140 acres of National Forest lands, according to the Forest Service and Hecla vice president Luke Russell.
It could take eight years or longer to obtain all the necessary permits and develop the mine, which would have a workforce of about 300 people, Russell said.
In the interim, he said the closure of the Troy mine offers a chance for the company to demonstrate that it can successfully reclaim the site for other uses.
"It will give folks comfort that Rock Creek would also be successfully maintained," he said.
Approval is pending after a U.S. District Judge in 2010 found problems with the Forest Service's environmental study of the project and sent it back to the agency for reconsideration. The ruling in a lawsuit brought by Costello's group prompted anther environmental study which began in 2011.
A draft of that supplemental study is expected this summer, said Bobbie Lacklen with the Forest Service. The timing of a final decision will depend on the public response to the upcoming study, she said.
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