HELENA – Montana Gov. Brian Schweitzer is wading into a corporate power struggle over the Drumlummon mine in Marysville, saying he prefers the current mine managers over a new team backed by the company’s Canadian board of directors.
RX Exploration shareholders are currently voting on whether to let the current mine managers, including two founding members, run the mine. The board of directors is backing a new group to run the operation.
Managers of the gold and silver mine northwest of Helena — which has a storied history dating back to the mining heyday of the late 1800s, creating millions of dollars in wealth in the area — argue they should be allowed to continue with their plan toward full development.
“We are at the stage where it is looking like it could be a commercial entity,” RX Exploration co-founder Murray Nye. “When you create something of value that is when people want to take it off you.”
The managers say at least $2 million in gold and silver have been produced since starting operations in mid-May, while about $18 million has so far been invested in exploration and startup. The mine employs 120 people and 25 more at a Phillipsburg mill.
But the of Winnipeg, Manitoba-based board of directors has lost confidence in the plan, and is turning to new managers promising the expertise necessary to turn the asset into a larger scale gold operation that will attract institutional investors and increase a stock price that has been trading around 50 cents on a Canadian exchange.
A vote by shareholders comes to a close next week.
Schweitzer told The Associated Press on Wednesday that he trusts the current managers RX Exploration to keep building on the jobs they have created in Montana.
The governor said he believes the new group wants to attractively bundle the assets and sell them to get quick profit for investors.
“I don’t have a dog in this fight, I could care less, except I want those 200 jobs in Montana,” Schweitzer said. “Despite what the new guys say, the mining operations will be curtailed.”
But the company’s chairman, John O’Donnell, said the new management group will keep investing in the mine’s development and growth.
The man designated to be president and CEO in the shuffle, Darren Blasutti, said new group will expand employment in Montana almost immediately. It hopes to use the Drumlummon mine as a platform to develop and re-open closed gold mines in Montana, and will not be reselling or repacking the company.
“We really like this asset. We think it’s a great platform asset to grow a company from,” said Blasutti. “We really think the state is opening up from a mining perspective.”
He said the company’s stock price has underperformed at a time when gold prices have skyrocketed.
“They have done a lot of things well, but at some point it is time to transition over to the next stage of the company,” Blasutti said. “We think we can take this mine to the next step, which is growing this mine — not shutting it down.”