Spokane-based Mines Management Inc., which is involved in the acquisition, exploration, and development of precious- and base-mineral properties, reported a net loss of $5.6 million, or 20 cents a share, in 2011, compared with a net loss of $10.7 million, or 46 cents a share, in 2010.

In a recent press release, the company said last year's smaller net loss was a result of $5.1 million worth of reductions in project, administrative, and other costs.

The company last year completed a private-placement offering of $15.2 million worth of common stock to raise proceeds for the permitting process and exploratory stages of its Montanore mine project, located about 18 miles southwest of Libby, Mont. Largely due to the cash raised as a result of that private-placement offering, Mines Management reported its total cash position at $18.7 million as of Dec. 31, compared with $10.7 million a year earlier.

The exploration of Montanore could lead to a large silver and copper mine that could have a production life of up to 15 years, creating 350 long-term jobs, the company told the Journal late last year.

Operating expenses for the year totaled $6.9 million, and the company said that amount primarily consisted of permitting, environmental, exploration, and engineering costs associated with the Montanore project. In the prior year, it spent about $6.7 million for operating activities. It said it anticipates spending about $8.5 million on operating expenses in 2012.

The company said that through the remainder of this year, it plans to continue focusing on the exploration and drilling projects at Montanore, pending the final federal approval of required permits.

It said the $15.2 million raised last year should be sufficient to complete those two projects, but that more capital will be needed to complete an evaluation drilling program and a bankable feasibility study. The planned development activities at Montanore could be deferred if the ongoing permitting process is delayed, or if changes to commodity prices occur and thus make financing more difficult for future mine efforts, it said.

Earlier this week, Mines Management finalized an agreement with Estrella Gold Corp., based in Vancouver, British Columbia, to acquire up to 75 percent of a gold-silver project in central Peru, called the La Estrella Project.

Mines Management had signed a letter of intent with Estrella late last year regarding that project. The recently finalized agreement stipulates that Mines Management invest $5 million over four years on drilling exploration at the La Estrella project, in addition to fulfilling other terms.

La Estrella is located about 140 miles southeast of Lima, Peru, and is an advanced-stage exploration project encompassing about 6,200 acres of land in a region with a 500-year-long mining history.