Spokane-based Mines Management Inc. claims it’s now back in good graces with the New York Stock Exchange after facing an ultimatum either to come back into compliance with exchange rules or risk being delisted.
The company on July 1 received notice from the NYSE that it was in danger of being delisted because it had failed to meet certain listing standards. Specifically, it had reported losses for the five most recent fiscal years and stockholders’ equity had fallen below acceptable levels, the NYSE said.
To generate additional cash and keep operating, Mines Management in October sold some of its assets and raised $1.25 million to continue the permitting process for its primary operation, the Montanore silver and copper mine in northwestern Montana.
The property the company sold was equipment once used for construction at the Montana mine, which has been idle since the cessation of construction and rehabilitation activities there in 2010.
Mines Management Chairman and CEO Glenn M. Dobbs says the company has been involved in ongoing disputes regarding claim ownership and rights at the site. He says the company is in the final stage of the permitting process, which he expects the U.S. Forest Service to complete next month.
As of market closing on Dec. 15, the Mines Management’s stock price was trading on the NYSE at 16 cents a share, down from more than $4 a share five years ago.
Despite challenges, Dobbs says he’s optimistic about the company’s future and adds, “I am absolutely confident this project will continue.”
Despite his optimism, Mines Management remains under a NYSE deadline to achieve compliance with its standards by the end of next year, according to regulatory documents.
The price of silver has fallen over the last five years from $49 a troy ounce to just over $14 an ounce, but Dobbs says the Montanore mine would be profitable at the present price. However, if the price of silver continues to fall, Mines Management would put Montanore on hold, he says.
Dobbs says the company is exploring three possibilities for the Montanore mine: continue to try to develop it, enter a joint venture to develop it with a “well-established” mining company, or sell it.
“Right now, we are continually looking at all three options,” Dobbs says.
If Mines Management pursues development on its own, Dobbs says the company would pay for a $30 million economic analysis of the mine that would take two years to complete. Then another three years of construction work at the mine would be necessary before it could start producing silver, he says.
Dobbs says it will cost Mines Management roughly $500 million just to start excavating the site. On average, Dobbs says it takes at least seven years from discovery to the beginning of excavation at any given site.
“Montanore is a highly desirable project,” Dobbs says. “Our objective is to continue moving the project forward in anticipation of an eventual turnaround in commodities financial markets.”
Dobbs says Montanore is an advanced-stage exploration project, containing mineralized material of about 81.5 million tons with average grades of two ounces of silver per ton and three-quarters-of-a-percent copper in two zones of the mine.
“We remain focused on completion of the final record of decision by the permitting agencies, and pursuing strategic alternatives to provide financial resources for completion of an evaluation and feasibility study there,” Dobbs says.
Mines Management is headquartered at 905 W. Riverside, in downtown Spokane.
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