Message #5 From:
NewsBot Date: December 5, 2006 05:24:00 PM
MGN News Mines Management Third-Quarter Results
SPOKANE, Wash.--(BUSINESS WIRE)--Mines Management, Inc. (AMEX:MGN) (TSX:MGT) is pleased to announce
financial results and an overview of activities that took place during
the quarter ending September 30, 2006.
During the quarter, Mines Management, Inc. (“MMI”
or the “Company”)
completed Phase 1 work authorized by a minor revision to the Hard Rock
Operating Permit for the Libby Adit, which was approved July 14, 2006,
by the Montana Department of Environmental Quality ("Montana DEQ"). The
work involved re-opening the Libby Adit and initiating water
treatability analyses. The first 600 feet of the Libby Adit was
inspected and found to be in good shape, and water samples were
collected and sent for analysis. Preliminary water treatability studies
were completed.
By the end of the quarter, significant progress had been made with both
the Montana DEQ and the U.S. Forest Service on the second minor revision
to the Permit which was submitted in the second quarter of 2006.
Approval of the second revision, which was received on November 23,
2006, authorizes work to begin on dewatering and rehabilitation of the
Libby Adit advancement to the deposit and execution of the evaluation
drilling program.
Summary
In the third quarter of 2006, the Company:
Completed initial updates to the Montanore Project mining and milling
cost studies, incorporating recent changes and updates related to the
evaluation project.
Maintained strong cash and investment position with $6.5 million on
hand at September 30, 2006.
Inspected the first 600 feet of the Libby Adit.
Collected water samples from the Libby Adit and completed preliminary
bench scale testing for water treatment systems.
Continued work with state and federal agencies to provide technical
information for the environmental impact statement process.
Initiated evaluation of financing alternatives to fund the adit
rehabilitation and delineation drilling program for the Montanore
Project.
Geology
The Company is advancing structural reinterpretation and mine model
development focusing on the various mineralized beds. Three dimensional
models of the bedding have been used to re-interpolate the B1 and B
mineralized zones. In addition, interpretation of expanded mineralized
zone beyond the B1 and B zones was initiated and was integral to the
proposed evaluation drilling program submitted with the second minor
revision to the Hard Rock Operating Permit.
Financial and Operating Results
Quarter Ended September 30, 2006
The Company reported a net loss for the quarter ended September 30,
2006, of $1.4 million, or $0.11 per share, compared to $1.2 million
loss, or $0.11 per share, for the quarter ended September 30, 2005. The
$0.2 million increased expenditures for the third quarter 2006 compared
to third quarter 2005 were mainly attributable to increased activity for
the Montanore Project permitting, technical studies, and preparation for
the adit rehabilitation and evaluation drilling program, which included
administrative and legal expenses relating to the transfer of the Hard
Rock Operating Permit following the acquisition of the Noranda companies
in May 2006.
Nine Months Ended September 30, 2006
The net loss for the first three quarters of 2006 was $4.0 million, or
$0.31 per share, verses a net loss of $3.4 million, or $0.31 per share,
for the same period in 2005. The year-to-date increase through September
30, 2006, versus September 30, 2005, was $0.6 million, again
attributable to increased activity at the Montanore Project, partially
offset by warrant and option income during the first quarter of 2006.
Liquidity
For the quarter ending September 30, 2006, net cash used for operating
activities was $1.4 million, consisting largely of permitting,
engineering and site preparation expenses for the Libby Adit
rehabilitation and delineation drilling program. The net decrease in
cash on hand at the end of the second quarter 2006 was $1.7 million for
the third quarter of 2006. Year-to-date cash used in operating
activities was $3.7 million, and $0.3 million for investing activities
was offset by proceeds from sale of stock from the exercise of warrants
and stock options of $1.5 million, resulting in a net decrease in cash
of $2.5 million year to date through the third quarter 2006.
The Company anticipates spending approximately $1.5 to $2.0 million from
cash and investments on hand for the final quarter in 2006 to finalize
permitting, engineering, the preliminary draft EIS, and the reopening of
the Libby Creek adit for the Montanore Project. We believe that we have
sufficient working capital for the next 18 months of operations at
current levels. We will require additional capital to complete the
proposed evaluation drilling program.
Mines Management, Inc. is a U.S.-based mineral company focused on the
exploration and acquisition of precious and base metals mineral
deposits. The company's primary focus is on the advancement of the
Montanore Silver-Copper Project located in northwestern Montana. The
Montanore Project is currently undergoing environmental assessment as
part of the development of an Environmental Impact Statement and the
NEPA process, which are necessary to gaining permits to develop and
conduct commercial mining activities. An underground evaluation program
has been initiated as part of the development of a final, bankable
feasibility study.
This press release contains forward-looking statements regarding the
Company, within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act, including statements regarding the
anticipated timing, process and scope of the underground evaluation and
drilling activities and the anticipated completion of a bankable
feasibility study. 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 economic and political events
affecting supply of and demand for silver and copper, 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, as
amended, for the year ended December 31, 2005. Additional information is
available in the Company’s 10-Q filing with
the Securities and Exchange Commission, and at the Company’s
website at www.minesmanagement.com.
