Hecla Mining Co. is buying a large silver-copper deposit in northwest Montana that for decades has drawn the interest of speculators but whose wilderness location has led to development controversies.
The acquisition of Mines Management Inc. would put the Montanore project in the hands of Hecla, which operates the Lucky Friday mine in Mullan, Idaho, and just last year purchased the Rock Creek silver-copper deposit, also in northwest Montana.
Mines Management’s shareholders would receive Hecla stock valued at about $30 million in the deal announced Tuesday. The sale requires shareholder approval and is expected to be finalized in the fall, according to a company officials.
Montanore and Rock Creek are described as some of the largest undeveloped silver and copper deposits in North America. Mining the ore bodies will require tunneling underneath the Cabinet Mountains Wilderness, which is home to federally protected grizzly bears and bull trout.
Hecla’s control of both projects is a hopeful sign for local residents who want the mines and the jobs they would bring to an economically depressed corner of the state, said Doug Roll, mayor of Libby, Montana.
Among the previous owners, “there was always a little competition over who would get their project permitted,” Roll said. “There was concern that the federal government would only allow one of the mining projects to go forward.”
Hecla – a much larger operator, with deep pockets and a 125-year history of underground mining – will “bring a little more clout” to getting the mines through complicated permitting and into production, he said.
The Montanore deposit is south of Libby, about 10 miles from Hecla’s Rock Creek project.
“Hecla is the logical company to move Montanore forward, with its close proximity to Rock Creek as well as its similar geology and scale,” said Phil Baker, Hecla’s president and chief executive, in a news release.
The deposits are separated by a geologic fault, which would make it difficult to develop them as a single operation. Hecla plans to develop two mines with entrances on opposite sides of the wilderness, said Luke Russell, Hecla’s vice president of external affairs.
Company officials estimate that it will take another decade to put the Rock Creek Mine into production and about 10 to 15 years before mining would start at the Montanore project.
Spokane-based Mines Management made strides last year by completing a decadeslong environmental study required by the federal government. However, company officials announced in April that they were looking at a possible sale of Montanore amid ongoing financial difficulties.
“Now is the time to pass (Montanore) on to Hecla to further advance the project and put it into production,” said Glenn Dobbs, Mines Management’s chairman and chief executive.
The Montanore deposit contains about 200 million ounces of silver and about 2 billion pounds of copper, according to Mines Management. The ore body would support about 20 years worth of mining, Russell said.
Developing the mine would disturb about 1,500 acres of land on the outskirts of the Cabinet Mountains Wilderness. After the 1964 wilderness designation, mining claims were allowed in the area for another 20 years.
The U.S. Forest Service has given its conditional approval to the Montanore Mine, but the project still needs a water pollution permit from the Montana Department of Environmental Quality. DEQ Director Tom Livers has said company 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 that the Forest Service ignored studies that found the Montanore Mine could drain groundwater supplies in the area, damaging bull trout habitat.
Environmental groups have fought both projects for years, arguing against heavy industrial activity at the edge of the wilderness.
“We’re looking at a small wilderness with two major mine proposals” said Mary Crowe Costello, outreach director for Save Our Cabinets. “We’re going to keep fighting them, because its not an appropriate place for mining.”
The Cabinet-Yaak ecosystem on the Montana-Idaho border is one of six areas in the continental United States where biologists are seeking to restore grizzly populations.
The U.S. Fish and Wildlife Service determined that the mine could lead to the loss of one federally protected grizzly bear. But it said required mitigation – including the purchase of 5,000 acres of grizzly habitat at risk for development – would make up for the loss. The agency said bull trout populations could suffer losses in streams close to the mine site, but not enough to threaten the species’ overall survival.
Russell said Hecla’s experiencein environmentally sensitive areas will be an asset. The company’s Greens Creek Mine on a remote Alaska island is home to grizzlies and salmon streams.
The Associated Press contributed to this report.
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