FOR IMMEDIATE RELEASE
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RELEASE 08-04
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MINES MANAGEMENT ANNOUNCES 1ST QUARTER
RESULTS
Spokane,
Washington � May 27, 2008 -- Mines Management, Inc. (AMEX: MGN, TSX: MGT)
("the Company") is pleased to announce operational and
financial results for the quarter ending March 31, 2008.
Advancing the Montanore Silver-Copper Project
continues to be the Company�s main focus. In addition to its planned
advanced exploration and delineation drilling program, the Company is
continuing its repermitting efforts with federal and state agencies and
its optimization review of the Project.
Overview
In the first quarter of 2008, the Company:
- Received
notice from Montana Department of Environmental Quality (DEQ)
confirming that Hard Rock operating Permit 150, originally issued in
1993, was transferred to the Company with the acquisition of Noranda
Mineral Corporation in 2006.
- Hired
Mr. John Thompson, Vice President/General Manager for the Montanore
Project, effective January 1, 2008.
- Selected
Small Mine Development of Boise, Idaho (SMD) as contractor to manage
activities related to rehabilitation and advancement of the Libby
adit and drill station development.
- Maintained
a strong cash and cash equivalents position of more than $32.3 million
as of December 31, 2007.
The Company has initiated
its planned two-year advanced exploration and delineation drilling
program at the Montanore Project. During the first quarter of 2008, the
Company continued to make preparations for the commencement of drifting
and delineation drilling, including commissioning of the water treatment
plant and preliminary work on the rehabilitation of the Libby adit. Full
scale dewatering and rehabilitation are expected to begin upon completion
of the environment assessment covering the Company�s proposed road use
during the program by the U.S. Forest Service.
When dewatering and
rehabilitation is complete, the Company plans to advance the adit
approximately 3,000 feet toward the center of the deposit, then complete
an additional 10,000 feet of development drifting to provide drill access
to different portions of the deposit, construct drill stations, and
complete diamond core drilling of approximately 50 holes totaling
approximately 45,000 feet.
The objectives of the advanced
exploration and delineation drilling program are to:
- Expand
the known higher grade intercepts of the Montanore deposit;
- Commenced
the advanced underground exploration program at the Montanore Site
by completing construction of a water treatment plant and dry
storage facility in November 2007.
- Further
assess and define the mineralized zone; and
- Provide additional geotechnical, hydrological,
and
Results
of the drilling program, if successful, are expected to provide data to
support the completion of a bankable feasibility study.
The
net cash expenditures for the quarter ending March 31, 2008 were $0.9
million for the purchase of equipment and commissioning of the water
treatment plant and other site infrastructure and $2.5 million for
operating activities. The Company believes that it has sufficient working
capital for rehabilitation of the Libby adit and commencement of drifting
and delineation drilling.
Advanced
Exploration and Delineation Drilling Program
In
the first quarter of 2008, the Montanore Project continued to make
progress on several fronts. Construction work at the site included
commissioning of the water treatment plant and construction of an outside
storage facility. Minor modifications were made during the testing and
initial start up of the water treatment plant, which included the
addition of a pH control system and miscellaneous adjustments to various
programmable control systems. Additional work on the water treatment
system included the design of the underground sumps and the rehabilitation
of approximately 100 ft. of adit immediately beyond the steel sets. A
contract for the design and engineering study of a nitrate removal system
to be added to the water treatment plant was awarded in the first
quarter.
Additional
work directly related to the rehabilitation included an initial ground
control and support evaluation of the existing ground conditions by an
outside ground support consultant. A request for quotation was prepared
and sent out to several mining contractors for the rehabilitation work.
Bids were received back and evaluated with an award in March 2008 for the
work to Small Mine Development of Boise, Idaho. Work was also initiated
on the layout and design of the delineation drilling program.
The
commissioning and start-up of the Sandvik roof bolting machine and the
Getman scaler have been completed with both machines functioning
satisfactorily. Equipment received during the first quarter included an
underground lube/service truck and a scissor lift platform truck.
Permitting
and Environmental
In
the first quarter of 2008, the Company continued to work with the federal
and state agencies reviewing the preliminary draft environmental impact
statement (PDEIS). Included in this review is the development of
monitoring plans and mitigation for the Project to address potential
impact on surface and ground water, grizzly bear, bull trout, and other
natural resources. Management expects that a draft EIS will be issued to
the public for comment this summer.
An
updated Plan of Operations was submitted to the Montana DEQ in February
2008 and, upon request from the DEQ, the Company withdrew its 2004 permit
application. The DEQ will consider the updated plan as a formal request
to revise the existing permit and its approval of the proposed revisions
is pending the completion of the EIS in coordination with the USFS.
Commencement
of dewatering and rehabilitation of the Libby adit are pending approval
by the U.S. Forest Service (USFS) of an environmental assessment
regarding the Company�s proposed road use during that process. The EA was
requested by the USFS in mid-2007 and submitted for review in August
2007.
Financial
and Operating Results
Mines
Management is an exploration stage company with a large silver-copper
project, the Montanore Project, located in northwestern Montana. The
Company continues to expense all of its expenditures with the exception
of equipment and infrastructure which are capitalized. The Company has no
revenues from mining operations. Financial results of operations include
primarily interest income, general and administrative expenses,
permitting, project advancement and engineering expenses.
Quarter
Ended March 31, 2008
The
Company reported a net loss for the quarter ended March 31, 2008 of $1.8
million, or $0.08 per share, compared to a net loss of $1.8 million, or
$0.14 per share, for the quarter ended March 31, 2007. There were
increases in operating expenses of approximately $50,000, principally in
administrative expenditures, compensation, environmental expenses,
equipment rental and depreciation, during the first quarter of 2008
compared to the first quarter of 2007. These increases resulted from
additional investor relation activities in 2008 and the addition of
employees, equipment, and infrastructure to support the Company�s
advanced exploration and delineation drilling program. Permitting costs
decreased by approximately $0.5 million during the first quarter of 2008
compared to the first quarter of 2007 because there were substantial
expenditures during 2007 related to the assessment and design of the
water treatment system.
Liquidity
During
the quarter ended March 31, 2008, the net cash used for operating
activities was $2.5 million, which consisted largely of permitting and
administrative expenses associated with increased activities at the
Montanore Project site. The net cash used in investing activities during
the quarter was $0.9 million for procurement of equipment and
construction in progress.
The
Company anticipates spending approximately $15.6 million from cash and
investments on hand during the final three quarters of 2008 for activities
and equipment purchases related to the advanced exploration and
delineation drilling program and repermitting efforts at the Montanore
Project. The Company believes that it has sufficient working capital for
rehabilitation of the Libby adit and commencement of delineation
drilling.
Mines
Management, Inc., is a U.S. based mineral exploration company in the
business of acquisition, exploration and development of precious and base
metals minerals deposits. Currently, the Company is focused on advancement
of the Montanore Silver-Copper Project located in northwestern Montana.
The Montanore Project is currently undergoing an advanced stage
exploration and evaluation program and re-permitting process.
This
press release contains forward-looking statements regarding the Company,
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, including statements regarding further exploration and
evaluation of the Montanore Project, including planned rehabilitation and
extension of the Libby adit, drilling activities, feasibility
determination, engineering studies, environmental and permitting
requirements, process and timing, and financing needs; the markets for
silver and copper, planned expenditures in 2008 and 2009; and potential
completion of a bankable feasibility study. The use of any of the words
"anticipate," "estimate," "expect,"
"may," "project," "should," "believe,"
and similar expressions are intended to identify uncertainties. These
statements are based on assumptions that the Company believes are
reasonable but that are subject to uncertainties and business risks.
Actual results relating to any and all of these subjects may differ
materially from those presented. Factors that could cause results to
differ materially include fluctuations in silver and copper prices,
negative results of environmental studies, problems or delays in or
objections to the permitting process, the proximity of the Project to the
Cabinet Wilderness Area, failure or delay of third parties to provide
services, changes in the attitude of state and local officials toward the
Montanore Project and other factors discussed in the Company's periodic
filings with the Securities and Exchange Commission, including its annual
report on Form 10-K for the year ended December 31, 2007.
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