Hecla acquired the Montanore project in September 2016 with the acquisition of Mines Management Inc. The Montanore project is located approximately five miles northeast of Noxon, Sanders County, Montana (about 50 miles north of the Lucky Friday mine in Idaho).
Geologically, the deposit is categorized as a stratabound sediment-hosted silver-copper deposit, and is one of three major deposits in the area, including the Troy Mine and Rock Creek deposit.
Information with respect to Inferred Mineral Resources is set forth below.
|(As of December 31, 2016 unless otherwise noted)|
|(000)||(oz/ton)||(oz/ton)||(%)||(%)||(%)||(000 oz)||(000 oz)||(Tons)||(Tons)||(Tons)|
- (footnotes)(1) Inferred resource reported at a minimum thickness of 15.0 feet; Montanore also contains 759,420 tons of copper at 0.7% within stated inferred resource tonnage. Inferred resources at Montanore adjusted given mining restrictions as defined by U.S. Forest Service – Kootenai National Forest, Montana DEQ in the December 2015 ‘Joint Final EIS, Montanore Project’ and the February 2016 U.S. Forest Service – Kootenai National Forest ‘Record of Decision, Montanore Project.’
Reporting requirements in the United States for disclosure of mineral properties are governed by the SEC and included in the SEC’s Securities Act Industry Guide 7, entitled “Description of Property by Issuers Engaged or to be Engaged in Significant Mining Operations” (Guide 7). However, the Company is also a “reporting issuer” under Canadian securities laws, which require estimates of mineral resources and reserves to be prepared in accordance with Canadian National Instrument 43-101 (NI 43-101). NI 43-101 requires all disclosure of estimates of potential mineral resources and reserves to be disclosed in accordance with its requirements. Such Canadian information is being included here to satisfy the Company’s “public disclosure” obligations under Regulation FD of the SEC and to provide U.S. holders with ready access to information publicly available in Canada.
Reporting requirements in the United States for disclosure of mineral properties under Guide 7 and the requirements in Canada under NI 43-101 standards are substantially different. This website contains a summary of certain estimates of the Company, not only of proven and probable reserves within the meaning of Guide 7, which requires the preparation of a “final” or “bankable” feasibility study demonstrating the economic feasibility of mining and processing the mineralization using the three-year historical average price for any reserve or cash flow analysis to designate reserves and that the primary environmental analysis or report be filed with the appropriate governmental authority, but also of mineral resource and mineral reserve estimates estimated in accordance with the definitional standards of the Canadian Institute of Mining, Metallurgy and Petroleum referred to in NI 43-101. The terms “measured resources”, “indicated resources,” and “inferred resources” are Canadian mining terms as defined in accordance with NI 43-101. These terms are not defined under Guide 7 and are not normally permitted to be used in reports and registration statements filed with the SEC in the United States, except where required to be disclosed by foreign law. The term “resource” does not equate to the term “reserve”. Under Guide 7, the material described herein as “indicated resources” and “measured resources” would be characterized as “mineralized material” and is permitted to be disclosed in tonnage and grade only, not ounces. The category of “inferred resources” is not recognized by Guide 7. Investors are cautioned not to assume that any part or all of the mineral deposits in such categories will ever be converted into proven or probable reserves. “Resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of such a “resource” will ever be upgraded to a higher category or will ever be economically extracted. Investors are cautioned not to assume that all or any part of a “resource” exists or is economically or legally mineable. Investors are also especially cautioned that the mere fact that such resources may be referred to in ounces of silver and/or gold, rather than in tons of mineralization and grades of silver and/or gold estimated per ton, is not an indication that such material will ever result in mined ore which is processed into commercial silver or gold.
In May 2017, the Montana Federal District Court overturned previously granted environmental approvals and remanded the Record of Decision and related documents of the US Forest Service and US Fish and Wildlife Service for further review by the agencies consistent with the Court’s opinions. In its decision, the Court advised the agencies they could issue a new Record of Decision and related documents for just the initial evaluation phase of the project, which has minimal environmental effects, or reconsider the entire project once again. It is anticipated that the next steps will be for the Forest Service to prepare a new Record of Decision and the Fish and Wildlife Service to prepare new Biological Opinions, in each case to address the deficiencies in those documents identified by the Court. Construction and operational activities are contingent upon meeting terms of the permits.