Spokane-based Mines Management Inc., which is involved in the acquisition, exploration and development of precious-and base-mineral properties, recently reported a first-quarter net loss of $1.5 million, improved somewhat from a loss of $2.1 million during the same period during 2013.

Doug Dobbs, Mines Management president, says the change in net loss was primarily the result of reduced operating expenses, including a decrease in general and administrative expenses, reduced payroll with two fewer employees in 2014, and a decrease in expenditures due to the closure of Estrella Gold Corp.  

In 2012, Mines Management executed an exploration earn-in agreement with Estrella Gold Corp., for an option to acquire 75 percent of the La Estrella gold and silver exploration property in the central area of Peru. The company terminated that project in January of this year to conserve cash. 

The company currently employs 11 people full time, six in its Spokane offices at 905 W. Riverside and another five full-time consultants in Libby, Mont.

The company has no revenues from mining operations, says Dobbs, and it has been involved in ongoing disputes regarding claim ownership and rights in the Montanore mining project near Libby, Montana, where it still hopes to open a silver and copper mine.

The company has been seeking state and federal permits since 2005, for access to complete a 14,000-foot tunnel to the silver and copper which could produce 6 million ounces of silver and 50 million pounds of copper every year worth $8 billion, Dobbs says. If and when the mine is up and running, Dobbs says it could employ 350 people.

Approval by several regulatory agencies is required for access, including a final Environmental Impact Statement (EIS) by the U. S. Forest Service. The U.S. Fish and Wildlife Service issued a final opinion in April, saying the Montanore project poses no jeopardy to endangered or threatened species, Dobbs says.

Legal challenges on the Montanore project include claims by Optima Inc., a small group of investors that includes former Montana Gov. Brian Schweitzer, seeking about $10 million in compensation from the company. Optima say in legal documents it controls mineral rights on underground parcels that are required by Mines Management to access the Montanore mine. Optima couldn’t be reached for comment. 

A federal judge issued a preliminary condemnation order in April,, which gives Mines Management the right to access the reserves through Optima’s claims. The remaining question is whether and how much Mines Management must pay Optima for access. 

Mines Management says it expects expenditures of about $4.2 million for the final three quarters of 2014, primarily for general and administrative expenses, permitting, environmental, engineering, and geologic studies for the Montanore project.

Dobbs says the company doesn’t have enough cash to fund ongoing operating expenses beyond 2014.

“We’re not producing revenue at this stage,” Dobbs says. “And this is the only mine we own.”

Mines Management says in a press release that it might seek external financing.