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Revett Minerals has a significant future with copper and silver
production from its Troy Mine and one of the largest silver deposits in North America; a
long life project that will be about 20 to 25 years of production
Development & Production
Revett Minerals Inc.
11115 East Montgomery Suite G
Spokane Valley, WA 99206
President, CEO and Director
Interview conducted by:
Lynn Fosse, Senior Editor
April 6, 2006
William Orchow - President, Chief Executive Officer and Director
Prior to joining Revett Silver as an officer in September 2003, Mr. Orchow was president
and chief executive officer of Kennecott Minerals Company, where he was responsible for
the operation and business development of all of Kennecotts mineral mines with the
exception of its Bingham Canyon mine from November 1994 to December 2002. From June 1993
to October 1994, he was president and chief executive officer of Kennecott Energy Company,
the third largest producer of domestic coal in the United States, and prior to that was
vice president of Kennecott Utah Copper Corporation. Mr. Orchow has also held senior
management and director positions with Kennecott Holdings Corporation, the parent
corporation of the aforementioned Kennecott entities. He has also been a director and
member of the executive committee of the Gold Institute, a director of the National Mining
Association and a director of the National Coal Association. Mr. Orchow is currently a
director of Little Squaw Gold Mining Company and is a member of the board of trustees of Westminster
College in Salt Lake City and a trustee and second Vice Presdient of the Northwest Mining
Association. He graduated from the College of Emporia in Emporia, Kansas with a
bachelors of science in business.
Revett Minerals is a North American copper and silver producer with a mine, and a large
development project located in northwestern Montana, USA. Our Troy Mine has reserves
totaling 16.95 million ounces of silver and 145.1 million pounds of mineable copper as at
December 31, 2005. Since acquisition, Revett had maintained the past producing (1981-1993)
Troy Mine on a care and maintenance basis. In late-2003 the company began reviewing the
feasibility of reopening Troy and in April 2004 decided to put the mine back into
production. In December 2004 we produced our first concentrates. Full production at Troy
is expected during the second quarter of 2006, with total 2006 production estimated to be
2.9 million ounces of silver and 26.2 million pounds of copper. At full capacity, the Troy
Mine is expected to average 3.2 million ounces of silver and 26.4 million pounds of copper
production per year.
The Companys Rock Creek
Project is a drilled inferred 136.6 million ton resource grading 1.67 ounces silver per
ton and 0.72% copper; containing approximately 229 million ounces of silver and over 2
billion pounds of copper. Revett received a favorable Record of Decision for the
development of the Rock Creek Mine from the U.S. Forest Service, and the Montana
Department of Environmental Quality in 2003. The first phase of development will commence
in 2006 when we will drive an evaluation adit into the ore body, with the objective of
producing a revised technical and economic feasibility study. This phase is expected to
take 2-3 years. Presuming a positive feasibility study, and the successful financing
of the capital costs, Revett intends to develop Rock Creek as an approximate 10,000 ton
per day, underground mine / conventional mineral flotation processing operation, with
estimated annual production of 6 million ounces of silver, and 52 million pounds of copper
over the life of the mine.
CEOCFO: Mr. Orchow, Revett has been a public company now for
about a year; what was the vision then and where are you now?
Mr. Orchow: We had been a private company, formed in
1999, that was seeking to finance a future project. We went public in February on the
Toronto Exchange and raised about $34.5 million Canadian. We are now waiting to start that
new project, called the Rock Creek Project. We received an unfavorable judges ruling that
sent the permitting back for reevaluation, so we are still waiting for the go-ahead to
begin that project.
CEOCFO: What is happening while you wait for the
Mr. Orchow: We have another property, an operating mine
called the Troy Mine that we restarted at the end of 2004 and last year we produced copper
and silver. We continued to do exploration, which we had talked about on our road show and
had extended the life of that mine from 3 ½ years to about 5 years of remaining life,
with additional exploration potential. This was announced about a month ago.
CEOCFO: So you will be doing additional exploration there.
Mr. Orchow: Yes, we have planned additional exploration
for this year.
CEOCFO: Tell us a little about the workings of the Troy Mine;
where it is located, how cost effective is what you are doing there now and is there is
room for improvement.
Mr. Orchow: The deposit was discovered in the early
60s and it was developed by ASARCO Incorporated in the late 1970s and started
producing in 1981. It produced from 1981 to 1993. It was shut down due to low metal
prices. It is an underground copper and silver mine. We purchased the mine in 1999 and
financed the restart of it in late 2004. We are still in the start-up phase and are at
about 60% of where we want to be producing at; with about 150 people employed there. It is
not the lowest cost mine, but in todays environment it certainly is a significant
CEOCFO: Where are your mines located?
Mr. Orchow: These properties are located in United
States in Northwest Montana. The Rock Creek deposit is located about 20 miles by air from
the Troy Mine, is very similar geologically and is about twice the size of the original
Troy deposit. The difference between Rock Creek and Troy is that Rock Creek has been in
permitting for about 15 years and the environmental community has brought a number of
challenges to it. There are three main areas of challenges; the first is that it is in an
eco system for the recovery of grizzly bears. The second is that there is a water
discharge and the third is that the deposit lies under a wilderness area. Those issues
have been studied for over 15 years; they have been looked at every-which-way and
concluded by the permitting Agencies that there will be no detriment to the
CEOCFO: What do you need from the courts to move forward?
Mr. Orchow: After 15 years and in the permitting
process, the lead agency, the U.S. Forest Service, issued us a record of decision for our
operating plan. That was administratively appealed by the environmental groups and denied,
so their next effort was to go into court. The one thing the court ruled against us on was
a biological opinion, prepared by the U.S. Fish and Wildlife Service concerning grizzly
bears. That opinion was a non-jeopardy opinion, saying that there would be no jeopardy to
the continued existence of the species from the mine operation. The judge was concerned
that they didnt consider the current size of the existing population properly; so he
remanded it back to the Fish and Wildlife to do additional work. The service has drafted a
new biological opinion that is being reviewed right now and it should be issued shortly.
It is my sense from speaking with the agencies that the new opinion will also be a
non-jeopardy opinion, when it is reissued.
CEOCFO: What would you say to those who wonder if it will
Mr. Orchow: From my point of view it is not if, it is
when it will happen. Ive been in the mining business for about 35 years and
Ive been involved in other permitting issues that have taken over 20 years. There
are two things that we need to remember; First is that these are extremely benign deposits
to the environment. Second, the world needs these commodities. Given that, these are the
sort of deposits that you want to mine. The Rock Creek deposit is very similar to the Troy
and it has a 25 years history. It has operated it for 12 years and it sat for 12
years and there has been no detriment to the environment. We have collected water samples,
aquatic sampling and air sampling and there has been no issues.
CEOCFO: It would be fair to say that although the process at
Rock Creek is long, the start-up will come and you know how to deal with the issues.
Mr. Orchow: Correct!
CEOCFO: Are you looking at other properties in Montana or in
Mr. Orchow: Once we went public and became a known
company, a number of opportunities have been brought to us. Weve looked at many of
them and some of them were very far away, even in the Philippines and Australia. Our
feeling is that what we would like is something that is similar to what we do, which is
copper or silver, and somewhere in our geographic area and time zone. Therefore,
weve studied a number of opportunities and we are considering a few now. If we find
the right fit we are not adverse to going ahead and making a deal for another property or
CEOCFO: Why do you like copper and silver?
Mr. Orchow: When I started in this business, I actually
started in copper, so I understand it and it is one of the basic commodities of a growing
global economy. Today, copper is really in demand; fueled by the growth in China and India
and we cant live without it. They have cycles, long cycles and I think that we are
at the beginning of a long cycle for copper.
CEOCFO: Please tell us about the current financial picture of
Mr. Orchow: We have accomplished two things. We had a
separate financing for the start-up of our Troy Mine. That was a royalty based financing
from a company named Royal Gold, Inc. (NASDAQ: RGLD). We then financed the first phase of
the Rock Creek project through our IPO. Although we have not been able to start the
project, we still have the funds for that from the IPO. Therefore, we are sitting with
about $11-12 million cash after funding a reclamation trust of $6.5 million for Troy. We
have also been spending on engineering and mitigation for Rock Creek. We are generating
cash at Troy and increasing production every month as we ramp-up to where we want to be.
So we are in a good solid position.
CEOCFO: Is reaching investors a focus for you?
Mr. Orchow: We are making an effort at that. As I said,
we are a Toronto based company, but weve gone to investment shows and visited
shareholders. As a matter of fact, Im setting up a trip right now to Toronto to
visit shareholders and potential investors.
CEOCFO: In closing, why should potential investors be
interested in Revett Minerals and what should they realize that may not jump off the page
at first glance?
Mr. Orchow: We serve a need and we have a deposit that
is one of the largest undeveloped silver deposits in North America. It is a long life
project. It will be about 20 to 25 years of production once we begin producing and will be
environmentally benign. Therefore, there is a significant future. What we do we do well
and we have opportunities for growth.
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