Spokane Valley-based mining company Revett Minerals Inc. has reported net income of $13.5 million, or 36 cents a share, for 2011, a significant jump from the prior year, when it posted a net loss of $600,000, or 2 cents a share.

Revett attributes the big improvement to record silver and copper production at its Troy Mine in Montana, as well as to higher prices for those metals. Additionally, the company says it recently expanded its land position next to and northwest of its Rock Creek project, also in Montana.

The company says its cash flow is strong after last year's record silver production of 1.29 million ounces and copper production of 10.65 million pounds, which were 28 percent and 21 percent higher, respectively, than in 2010. Total company revenue for 2011 was $70 million, compared with $47 million during 2010.

Revett President and CEO John Shanahan says, "For 2011, we started the year with about $8 million in cash and ended it with just over $25 million in cash."

Looking ahead, he says the company expanded its land position by about 4,100 acres in mining claims for its Rock Creek project. This is in addition to the company's land position of about 7,500 acres at Rock Creek—a mix of Revett-owned property, acreage in patented claims and unpatented claims, and land set aside for grizzly bear habitat, Shanahan says.

Since late 2004, Revett has planned to develop Rock Creek as an underground copper and silver mine that would tunnel beneath the Cabinet Mountains Wilderness Area at the property that's located near Noxon, Mont., about 50 miles southeast of Sandpoint.

The Rock Creek deposit is within U.S. Fish & Wildlife Service-administered Kootenai National Forest land, and requires federal and state approvals to develop. In mitigating impact, Revett agreed to spend about $30 million to improve and set aside grizzly bear habitat.

The company received an affirmative decision last year from the 9th U.S. Circuit Court of Appeals regarding its Rock Creek project, which has been challenged by environmental groups. The court affirmed the U.S. Fish and Wildlife Service's determination that the mine wouldn't harm bull trout and grizzly bear critical habitat and didn't violate the Endangered Species Act.

Shanahan says the company still needs to complete an environmental impact statement, and pending other federal and state requirements, he hopes Revett can begin a first phase of development at Rock Creek by late spring 2013.

Last year, Revett restated its 2010 earnings under U.S. Generally Accepted Accounting Principles, updating what it had reported a year ago under Canadian GAAP, Shanahan says. For 2010 and for reports going forward, he says Revett chose to file under U.S. GAAP mainly because the company in May 2011 completed a listing of its shares on the New York Stock Exchange. Its stock also is traded on the Toronto Stock Exchange.

The adjustment meant that reported earnings a year ago that showed a net income of $4.4 million under Canadian GAAP had different expense reporting requirements under U.S. guidelines, which resulted in the posting of the net loss, he adds. Revett Minerals is a Canadian company, but its headquarters is here. Its subsidiary, Revett Silver Co., is a U.S. company.

One of the largest differences in restating under U.S. GAAP was that Revett completed about a $4 million U.S.-valued private placement with warrants in 2010 to help it accelerate exploration and further development of the Troy Mine, Shanahan says. A company's warrants offer the right to buy shares at a later date and at a set price, and under U.S. GAAP, they're considered a liability when the exercise price is denominated in a foreign currency.

"The major difference is we had warrants that were denominated in Canadian dollars, and were not considered debt and were Canadian-valued warrants," he says about the first 2010 posting. "But in U.S. (value), they had a warrant value of about $4 million, so we had warrant charges under the U.S. GAAP."