The same weak minerals market that shuttered Lincoln County’s only operating copper and silver mine earlier this year is also proving troublesome for a company hoping to open a new mine south of Libby.
Despite historically low copper and silver prices, Mines Management CEO Glenn Dobbs says his company is forging ahead with permitting and the final evaluation of the Montanore Mine south of Libby.
Earlier this year, the U.S. Forest Service announced that the proposed mine would be in compliance with all federal regulations, clearing the way for a final record of decision later this year. Once the decision is issued, the Montana Department of Environmental Quality will simultaneously issue state permits. Dobbs said once all of the paperwork is in hand, Mines Management would be ready to hire up to 30 miners to begin the mine evaluation and feasibility study, which would take up to two years. An adit was built toward the Montanore deposit – billed as one of the largest untapped sources of copper and silver in the world – in the late 1980s, but it has sat unused since the 1990s when a previous company abandoned the project.
While Dobbs is optimistic about obtaining federal and state, he expressed frustration with the minerals market, calling it “the worst I’ve seen in 35 years.” On Nov. 23, copper prices slipped to a six-year low at about $2 a pound. Silver was trending at about $14 an ounce. Dobbs said those low prices make a copper and silver mine less attractive to potential investors.
“It’s concerning to us because we’ve worked diligently to maintain momentum at the Montanore project and we really want to keep that up,” he said.
Dobbs outlined three different possibilities to get the project funded, including a silver streaming agreement, a royalty agreement and a joint venture. The first two involve investors funding the project upfront and then getting a percentage of the profits or the ore from the mine later on. A joint venture agreement would require another mine operator to join Mines Management in the development and mining of the project.
Dobbs said his company is exploring all its options and that he is meeting with potential investors. He added that if mineral prices rise once the feasibility study is completed in two years, it would give his company an advantage over the competition.
“When these prices turn around we’ll be prepared to start building the mine, which would give us a leg up at that point,” he said. “Commodity prices will go back up, they will, they always do”
Mining officials say the Montanore Mine could produce 7 million ounces of sliver and 60 million pounds of copper annually and employ about 350 people.
The Troy Mine, Lincoln County’s only operating mine, was closed earlier this year as mineral prices continued to drop, in part due to an economic slowdown in Asia. Its new owner, Hecla Mining, is permanently closing the mine, once owned by Revett Mining Company.