BILLINGS — A group including former Montana Gov. Brian Schweitzer is not entitled to any compensation after its mining claims were taken to make way for a proposed silver and copper mine, according to an expert commission appointed by a federal judge.
Schweitzer and other investors have sought up to $10 million in compensation after mining claims they own were condemned under a court order for the proposed Montanore silver mine near Libby.
A tunnel for the mine passes through the claims held by Schweitzer’s group, Optima, Inc.
The three-member commission said Optima did not show that its mining claims, or rights, had been worth anything prior to the condemnation. The commission sided with developer Mines Management, Inc. of Spokane, Washington, in a report filed Wednesday.
The findings must be accepted by U.S. District Judge Dana L. Christensen, who appointed the commission to investigate the compensation dispute and has final say over the case.
Schweitzer is a former two-term Democratic governor who became chairman of Montana’s largest mining company, Billings-based Stillwater Mining, soon after leaving office in 2013. Stillwater is not involved in the Montanore claims.
Optima paid at least $700,000 to acquire its stake in the claims from owner Arnold Bakie. The deal called for future payments to Bakie of $50,000 per year up to a total of $1.1 million, according to court documents.
Schweitzer said in a Thursday interview that despite the commission’s findings, the claims held by Optima have value and their condemnation will prevent the group from pursuing a mine of its own.
“The point needs to be made very clear, it’s Arnold Bakie, plus Optima, that have been the defendants,” Schweitzer said. “We didn’t sue anybody. We were trying to develop a mining claim and an out-of-state corporation sued to take those rights away.”
Optima has 21 days to object to the commission’s findings.
A separate lawsuit is pending in state court over the Optima claims.
During the condemnation proceedings, Optima argued its claims were worth as much as $10 million under state and federal laws that require compensation for mining rights that are condemned.
Christensen had previously cast serious doubt on the alleged value, saying there was no merit to Optima’s argument that it had an ownership interest in the tunnel that passes through its claims.
Following a three-day trial last month, the commissioners said Optima could not show its claims had any value in part because there was no proof they had significant minerals to be mined.
The commission also rejected arguments that the claims had been worth $1.1 million before they were taken, based on the sales agreement between Optima and Bakie.
Other members of Optima include Bruce Ramsey, a former U.S. Forest Service supervisor for the Beaverhead-Deerlodge National Forest and mining industry veteran Frank Duval.
In 2014, Mines Management executives turned down an offer from Schweitzer to resolve the claims dispute outside court in exchange for cash and stock worth about $10 million. CEO Glenn Dobbs has alleged Schweitzer threatened to drive down the company’s stock if it didn’t give his group a favorable deal, a charge Schweitzer has denied.
Dobbs said he was pleased with the commission findings.
“Clearly this Optima group — Schweitzer, Duval, Bakie — set out to try to obstruct the development of the Montanore mine with the intent of gaining money and ownership in the company,” he said. “The commission saw through this.”
The Montanore mine holds an estimated 1.7 billion pounds of copper and 230 million ounces of silver beneath an area that includes the Cabinet Mountains Wilderness, according to Mines Management.
The project received preliminary approval in March from the U.S. Forest Service.