Revett Minerals Inc. wants to be known as more than just a company that hopes to extract copper and silver from beneath a wilderness area in western Montana.


Unlike many small mining ventures, the young Spokane Valley-based company already has an operating minelocated near Troy, Mont.thats profitable. It has $26 million in the bank, posted $3.9 million in net income for the first nine months of this year, and employs 180 people, including a half-dozen at its corporate offices here. Its also eyeing other mining opportunities elsewhere in North America and beyond.


Its focus, however, for now clearly is on its efforts to develop a new underground mine that would tunnel beneath the Cabinet Mountains Wilderness at a property called Rock Creek, located near Noxon, Mont., about 50 miles southeast of Sandpoint. There, Revett is waging a battle with environmental groups that fear the proposed mine would harm grizzly bear and bull trout habitat and the water quality in the nearby Pend Oreille River. So far, Revetts plans for mitigating any ill effects of the mine are receiving government agency nods, but the war is far from over.


Meanwhile, Revett has taken its story to the communities of North Idaho and western Montana, with newspaper ads that tout the economic impact it already has in the Troy area and the 250 to 300 jobs it hopes to create at Rock Creek, as well as meetings with journalists and legislators.


Of all the mines in the world, why did this one happen to build up this life of its own in terms of public perception, asks William Orchow, Revetts president and CEO.


Orchow argues that the proposed Rock Creek mine wont disturb any surface land inside the wilderness area, and outside the wilderness will produce inert tailings and discharge water that would exceed drinkable standards. The company already has agreed to spend about $20 million to improve grizzly bear habitat in the area, including buying 2,400 acres of land that will be protected as grizzly habitat and funding three new jobs at the Montana Fish, Wildlife & Parks Department that will focus on grizzlies.


Orchow says hes convinced the company is taking the right steps to ensure that the mine wont adversely affect the environment, and, in fact, could even open up opportunities for other mining companies to pursue similar projects. Another Spokane-based company, Mines Management Inc., also has proposed mining beneath the Cabinet Mountains Wilderness, a few miles northeast of Rock Creek, at a property known as the Montanore. It also must get additional approvals before going forward.


Rock Creeks potential is significant. Though Revett wont know for sure how much mineral content is there until it has done a feasibility study, current unconfirmed estimates for the property include a possible 2.1 billion pounds of copper and 229 million troy ounces of silver. The company says that if its successful in developing the mine, it would expect to produce 52 million pounds of copper and 6 million ounces of silver annually.


At current prices of about $3 a pound for copper and $14.75 an ounce for silver, the mine would produce revenue of nearly $250 million if operating today.


Revett, however, has hurdles left ahead of it.


Environmental groups have challenged its plans in court, and are expected to continue to do so as the company works its way through the regulatory process.


So far, state and federal agencies have come down mostly in Revetts favor, and some, though not all, of the environmental appeals have been resolved. Company officials expected to hear this week whether the U.S. Forest Service would issue a 60-day notice signaling the companys authorization to go ahead with construction of an exploratory tunnel at the site.


That tunnel, or adit, would run 7,000 feet into the mountainside and would enable Revett to conduct additional drilling to determine if the estimated mineral deposits there can be counted as reserves. The next step would be a feasibility study that Revett would use to finance and plan mine development.


Revett says it hopes to begin construction of the adit next year, and a feasibility study would take at least 18 months after that begins. Current cost estimates for full development are roughly $200 million, which Revett would raise from some combination of cash on hand, profits from the Troy Mine, and perhaps bank financing or outside investments.


Troy Mine


Revett has been operating its Troy Mine, located about 15 miles south of Troy, since late 2004. Originally developed by Tucson, Ariz.-based Asarco LLC, the underground copper and silver mine was shuttered in 1993, after 12 years of operation, due to low metals prices. Revett bought the mine in 1999 and rehabilitated it in 2004, spending about $8 million.


The mine had a slow start, however, underperforming Revetts expectations, due mostly to a lack of available skilled miners and problems with some new machinery the company bought to reopen the mine. In 2006, the mine produced about 7.3 million pounds of copper and 917,000 ounces of silver, well below full-production estimates of 17 million pounds of copper and 2 million ounces of silver. After it resolved its equipment problems and fully trained its mining crew, things were looking up during the first half of this year. Silver production jumped 77 percent and copper production doubled, compared with the year-earlier period.


During the third quarter, however, tragedy struck. On July 30, a rock fall inside the mine killed a miner. The federal Mine Safety and Health Administration shut the operation down for 12 days, and some parts of the mine were closed to mining until late October. The companys third-quarter results reflected the closure, showing an about 35 percent reduction in tons of ore milled, compared with the second quarter. Revett posted a third-quarter loss despite a net gain for the first nine months of the year.


We had significant success (this year), but the accident put a halt to that, Orchow says.


Given its current reserves of about 143 million pounds of copper and 15 million ounces of silver, the mine is expected to remain open for another five or six years if no further minerals are found. Revett, however, has been doing exploratory drilling in and around the mine in hopes of identifying additional deposits. It is spending about $2 million over two years on that exploration, and Orchow says, We hope to continue to mine there into the future.


In addition to its exploration there and in the Rock Creek area, Revett also has rights to possible mineral deposits south of the Rock Creek deposit, though Orchow says the company likely wont pursue those until after it develops the Rock Creek project.


Beyond that, Orchow says the company has been looking for the past two or three years at a number of opportunities, primarily in North America but also in Central and South America to extend its mine holdings. He says Revett is most interested in mining properties that already are at a development stage or have operating mines, rather than grass roots exploration, and that it doesnt matter if they are underground or surface operations.


Revett likely would get involved in such projects either through an acquisition or merger, he says.


Still, Orchow says, the company anticipates that its major growth in the future will come through the development of Rock Creek, rather than other acquisitions or partnerships.


Both the Rock Creek property and Troy Mine are owned 100 percent by a subsidiary called Revett Silver Co., which was formed in 1999 as Sterling Mining Co. by a group that included longtime Northwest mining executives Frank Duval and Hobart Teneff. Neither of those men, who have had run-ins with federal securities regulators, has had any management connection with the company for several years.


Sterling changed its name to Revett Silver in 2004, and Revett Minerals was founded as a holding company in 2005 through an initial public offering. Revett Minerals owns 69 percent of Revett Silver, and the remainder is owned by some of the same investors who own the publicly traded Revett Minerals, Orchow says.


Revett Minerals is a Canadian company, but its headquarters offices are here. Its stock is traded on the Toronto Stock Exchange under the symbol RVM. Revett Silver is a U.S. company.


Contact Paul Read at (509) 344-1262 or via e-mail at paulr@spokanejournal.com.