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Mines Management Inc. Reports 2014 Financial Results and Montanore Permitting Update

Spokane, Washington - April 7, 2015 - MINES MANAGEMENT, INC. (NYSE-MARKET: "MGN", TSX: "MGT") announces financial and operating results for the fiscal year ending December 31, 2014, and subsequent progress on the permitting process for the Montanore Project.


  • The U.S. Fish and Wildlife Service issued a final Biological Opinion for terrestrial and aquatic endangered species on March 31, 2014, indicating the Montanore Project poses no jeopardy to endangered or threatened species in the area around the project.

  • Mines Management, Inc. completed a financing in July of 2014 which yielded gross proceeds of $4.0 million (net proceeds of $3.5 million after deducting placement agent and investor fees and expenses and other offering expenses). The Company sold 4,000 units consisting of one share of the Company`s Series B 6% convertible preferred stock plus a warrant to purchase approximately 636 shares of the Company`s common stock at a stated value of $1,000 per unit. The warrants have an exercise price of $1.0816 per share and expire on November 30, 2018.

  • The U.S. Forest Service ("USFS") and the Montana Department of Environmental Quality continued to develop the Final Environmental Impact Statement ("FEIS") during 2014 and issued the preliminary FEIS during the third quarter of 2014. On April 1, 2015, the USFS provided legal notice to the public announcing the availability of the FEIS and draft Record of Decision. This notice initiated an objection and resolution process believed to be the final phase of the National Environmental Protection Act permitting process.

  • The Company continued to work with the U.S. Army Corps of Engineers on the Clean Water Act 404 permitting process. This process will continue concurrently with work on the FEIS and is required prior to the beginning of construction of the tailings impoundment dam. The Company completed a compensatory mitigation plan for aquatic resources affected by the proposed tailings impoundment which was accepted by the U.S. Army Corps of Engineers as complete during 2014 with the final permit determination expected after the FEIS is issued.

Financial and Operating Results

We reported a net loss for the year ended December 31, 2014 of $6.5 million or $0.22 per share compared to a loss of $7.4 million or $0.25 per share for the year ended December 31, 2013. The following table summarizes expenses and other income by category and year:




Montanore Project Expense





Estrella Project Expense





Administrative Expense










Non Cash Stock Based Compensation Expense





Other Income





Montanore Project Expense includes exploration, fees, filing and licenses, and technical services, including environmental, engineering and permitting expense. Montanore Project Expense decreased by $0.2 million during 2014 compared to 2013 primarily because of the reduction in fees paid to the contractor working on the Environmental Impact Study ("EIS") as well as a reduction in the baseline studies associated with the EIS.
There was a $0.4 million reduction in Estrella Project Expenses during 2014 because the project was terminated during January 2014.

Administrative Expense, which includes general overhead and office expense, legal, accounting, compensation, rent, taxes, and investor relations expense, did not materially change during 2014 compared to 2013. However, the following factors included within administrative expenses did change: (i) a decrease in investor and public relations expenditures of $0.1 million, (ii) a decrease in salaries of $0.3 million as a result of having fewer employees during 2014, offset by (iii) an increase of $0.4 million in legal, accounting, and consulting fees primarily associated with an ongoing litigation matter.

Depreciation decreased by $0.1 million during 2014 as a result of equipment reaching the end of its depreciable life and limited acquisitions of property and equipment during the past few years.

Non-Cash Stock Based Compensation Expense (which is included in general and administrative and technical services expenses in our statement of operations) decreased by $0.1 million during 2014 because the number of options granted and the fair value of options granted during 2014 was less than those granted during 2013.

Other Income of $0.1 million in 2014 consisted of a gain from the sale of the Company`s interest in an oil and gas lease during the year.

Liquidity and Capital Resources

As of December 31, 2014, our aggregate cash, short term investments, and long term investments totaled $3.9 million compared to $5.7 million at December 31, 2013. The net cash used in operating activities during 2014 was $5.6 million compared with $6.1 million utilized in operating activities in 2013. Operating activities for both years consisted primarily of permitting, environmental, exploration, and engineering expenses for the Montanore Project, general and administrative expenses, and legal, accounting, and consulting expenses. Net cash flows provided by financing activities included proceeds of $3.5 million from the sale of preferred stock and $0.2 million in proceeds from stock options exercised during 2014 compared to $0 in 2013. Net cash provided by investing activities during 2014 was primarily from certificates of deposit reaching maturity in the amount of $1.6 million. Net cash provided by investing activities during 2013 was an insignificant amount. The net decrease in cash and cash equivalents for the year ending December 31, 2014 was $0.3 million.

In 2015, we plan to continue to focus on planning for our evaluation and delineation drilling program at the Montanore Project pending the final permitting approvals. We anticipate expenditures in 2015 of approximately $5.3 million, consisting of $0.8 million in each quarter for ongoing operating and general administrative expenses, and $0.5 million in each quarter for permitting, engineering and geologic studies to finalize our permitting of the Montanore Project during 2015. We do not currently have enough cash on hand to fund ongoing environmental, engineering, permitting and general administrative expenses through 2015. Additional financing will be required to continue operations as a going concern and to complete the evaluation drilling program and a bankable feasibility study. If we are not successful in raising additional financing, we expect to reduce our activities and our expenditures in 2015 to amounts lower than those described above. If we are successful in raising sufficient additional financing, in addition to the activities described above and providing we receive regulatory approvals, we may engage in additional activities related to the advancement of the Project in preparation for the evaluation phase. See the opinion of our independent registered public accounting firm in our audited financial statements as of and for the year ended December 31, 2014.

About Mines Management

Mines Management, Inc. is engaged in the business of acquiring and exploring, and if exploration is successful, developing mineral properties containing precious and base metals. The Company`s primary focus is on the advancement of the Montanore silver-copper project located in northwestern Montana. The Montanore is an advanced stage exploration project, which contains mineralized material of approximately 81.5 million tons with average grades of 2.04 ounces silver per ton and 0.74% copper.

Cautionary Note to U.S. Investors concerning estimates of Measured and Inferred Mineral Resources: This press release uses the terms "Measured Mineral Resource", "Indicated Mineral Resource", and "Inferred Mineral Resource." We advise U.S. investors that while those terms are recognized and required by Canadian NI 43-101, the Securities and Exchange Commission does not recognize them. U.S. investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into mineral reserves. Inferred Mineral Resources have a greater amount of uncertainty as to their existence and as to their economic and legal feasibility. In accordance with Canadian rules, estimates of Inferred Mineral Resources cannot form the basis of feasibility or other economic studies. U.S. investors are cautioned not to assume that part or all of the Inferred Mineral Resources exists, or is economically or legally mineable. The SEC normally only permits issuers to report mineralization that does not constitute `reserves` by SEC standards as "in place" tonnage and grade without reference to unit measures. Accordingly, the information contained in this press release may not be comparable to similar information made public by U.S. companies that are not subject to NI 43-101.

Statements Regarding Forward-Looking Information: Some statements contained in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other applicable U.S. and Canadian securities laws including comments regarding anticipated issuance of the final Record of Decision, Environmental Impact Statement and Clean Water Act 404 permit and the timing thereof; activities and expenditures planned for 2015 including continued work on permitting, engineering and geologic studies to finalize the permitting process; mineral resources; plans to continue as a going concern and complete an evaluation program and bankable feasibility study if financing can be raised; and the effects on our planned activities of whether we are successful in raising additional financing. Investors are cautioned that forward looking statements are inherently uncertain and involve risks and uncertainties that could cause actual results to differ materially from those presented. Factors that could cause results to differ materially include delays in and increases in the cost of completing work related to the Record of Decision, final Environmental Impact Statement and 404 permit, whether external financing for the Company`s business can be obtained on acceptable terms or at all; continued disputes regarding claim ownership and rights in the Montanore Project area, changes in interpretation of geological information, whether additional permitting may be required at Montanore in the future; the results of delineation drilling and feasibility studies; continued decreases and future fluctuations in silver, gold and copper prices; and world economic conditions. Mines Management, Inc. assumes no obligation to update this information. There can be no assurance that future developments affecting Mines Management, Inc. will be those anticipated by management. Please refer to the discussion of risk factors in the Company`s Form 10-K for the year ended December 31, 2014.

For more information, contact:
Douglas D. Dobbs, President
Mines Management, Inc.
905 West Riverside Avenue - Suite 311
Spokane, WA 99201
Phone: 509-838-6050
Fax: 509-838-0486
Email: info@minesmanagement.com
Web: www.minesmanagement.com

This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.

The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Mines Management Inc. via GlobeNewswire