Troy mine reports ‘06 gain

TROY, Mont. – The Troy Mine, reopened in 2004 with the idea of generating enough money for environmental reclamation at the site, reported a 2006 profit.

“I’ll be honest with you, Troy can make a lot of money at these metals prices,” said Scott Brundson, chief financial officer at Revett Minerals Inc., majority owner of mine operator Genesis Inc.

This week, Brundson released Revett’s 2006 financial results, showing a pretax net income at Troy Mine of $4.3 million on revenues of more than $31 million. After expenses and income taxes, Revett saw a net loss of $1.7 million, or 3 cents per share.

Revett owns a two-thirds share in Genesis and must subtract the one-third share of the profit held by private investors. Revett also must subtract taxes and interest on debt. That explains how Troy Mine posted a $4.3 million profit, while major owner Revett saw a $1.7 million loss.

“It was a very good year,” Brundson said, noting the mine lost $2 million in 2005. “This is the first year Troy made a profit and generated cash.”

Strong metals prices have company officials expecting a more lucrative future for the mine.

“I think everybody’s going to make a lot more than was anticipated,” Brundson said.

Silver is selling at $13 an ounce, compared to $7 when the mine opened. Copper has risen from $1.40 a pound to $3.22.

“That’s gigantic,” Brundson said. “Copper, next to nickel, has probably been the best performer of all the metals.”

During 2006, the Troy operation sold 6.5 million pounds of copper and 824,049 ounces of silver, pulled from 945,000 tons of ore.

Brundson said high metals prices have allowed miners at Troy to go after lower-grade ore, saving the higher-grade seams for times when prices might not be so favorable. That has increased the anticipated life of the mine from just a couple of years to perhaps six or more.

“The higher metal prices have really been the driver of the extension of the Troy Mine’s life,” Brundson said.

The mine employs 171 people at average annual compensation, including benefits, of $47,000, Brundson said.

Revett bought the Troy site in 1999. It had been shuttered in 1993 amid low metals prices, after operating uninterrupted for more than a decade.