Company wants to mine in Butte

2012-08-09T00:00:00Z Company wants to mine in ButteBy Nick Gevock of The Montana Standard Montana Standard
August 09, 2012 12:00 am  • 

An Arizona mining company is proposing underground mining for silver and zinc in Butte that its president says would bring 200 jobs and generate $100 million in annual revenue.

Roy Shipes, president of International Silver, Inc. based in Tucson, Ariz., told Butte-Silver Bow commissioners Wednesday that his company plans to mine 3,000 tons of ore per day when it’s up and running. The mine would use existing mine yards including the Anselmo, Kelley and Mountain Con in an operation that Shipes said could last for decades.

“We think there are reserves here for many, many years,” he said. “We’re looking at $100 million in investment here.”

Shipes is asking the county to consider leasing both the surface and mineral rights on hundreds of acres of land to bolster the operation. He said for several years his company has been buying land and mineral rights in Butte and doing analysis to determine whether it can be mined profitably.

He told commissioners the company has enough land and mineral rights to mine up to 1,000 tons of ore per day. The county leases would allow the company to get to 3,000 tons per day.

The company would use the Kelley mine yard as its main industrial site where the trucks and large equipment would be based, said Harrison Matson, chief geologist. He said the plan calls for using the Mountain Con for miners to get into and out of the mines, while the Anselmo would be used to vent the shafts. A processing plant would be built on land the company owns west of Big Butte with the ore hauled over there.

Matson said the company needs the county leases to reach its full potential.

“Because of the widespread nature of the ore bodies we’re pretty well hamstrung as to what we can do without county ground,” he said.

But he added that International Silver will be careful not to tear up any of the areas that have been reclaimed. Matson said the mine could generate significant taxes for the county while providing up to 350 jobs during the construction phase and 200 jobs throughout mining. That could last up to 20 years or longer.

“We could make this a long-term mining project that would put Butte back into business in the underground mining business,” Matson said.

Matson also added the mine would have minimal impacts in town because it will be entirely done underground. The company will stay above the water level and use water from the mine shafts for its operations.

International Silver would take over the maintenance for the mine shafts, Matson said.

Commissioners voted 10-0 to prepare a developer’s packet for the county properties in question. Several said they are fully supportive of the potential project and the jobs and tax revenue it could bring to Butte.

“This is a really exciting opportunity for Butte,” Commissioner Chairman Dave Palmer said.

But several commissioners, while optimistic, said they wanted to proceed with caution. They said Butte has suffered the impacts of mining and while the project could bring needed jobs, there could be some negatives as well and the project needs a careful review.

“I’m not some crazy environmentalist who wants to stop all mining,” Commissioner Dan Foley said. “We all need jobs, but we also need to be aware of the negative impacts of mining.”

But Shipes said with careful engineering the mine can be crafted to have minimal impacts on neighborhoods and the environment. He said they will use water from underground for the processing and when that’s done it must be heavily treated to clean it up.

“Mining today is not what mining was 50 years ago,” he said. “The federal government and state government regulate mining very strictly now.”

Shipes said they plan to hire eight to 10 engineers immediately to begin mapping underground in Butte, and establish an office in Butte. If everything moves forward construction of the processing plant could begin next year and mining could commence in about two and a half years.

He added they will bring some key staff members, but the company plans to mostly hire both engineers and other workers from Butte.


About the company

The following profile of International Silver is posted on marketwatch.com:

The International Silver, Inc. is a mineral exploration and development company that searches for mineral deposits of precious metals.

It is engaged in the acquisition, exploration, and development of silver properties in the United States. The company owns the Pan American Silver Mine, Prince Mine and Caselton Concentrator collectively known as the Pioche Mines Project, an exploration stage silver, gold, lead, zinc and manganese project near Lincoln County, Nev. The area is about 200 miles north of Las Vegas.

It also has the Calico Silver Project in San Bernardino County, Calif.

The company was formerly known as Western States Engineering and Construction, Inc. and changed its name to International Silver, Inc. on June 16, 2006.

International Silver was founded by John A. McKinney and Harold Roy Shipes on Sept. 4, 1992, and is headquartered in Tucson, Ariz.

— Reporter Nick Gevock may be reached at nick.gevock@mtstandard.com

Copyright 2015 Montana Standard. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(22) Comments

  1. miner
    Report Abuse
    miner - August 13, 2012 2:30 pm
    One problem...Butte has a rich ore deposit and not a lot else. Why not mine it? What industry do you propose that Butte move towards as it moves away from mining?

    Who cares what Montana Resources (not from Missoula) thinks?

    The workings that would be mined are ABOVE the water table. They are not flooded, nor are they particularly toxic.

    If you want to loan them 100 million dollars, go ahead. Nobody is saying that "we" should do so.
  2. juanajob
    Report Abuse
    juanajob - August 13, 2012 12:54 pm
    scuba miners? is that even possible?

  3. juanajob
    Report Abuse
    juanajob - August 13, 2012 12:48 pm
    weeze moving back for the big money jobs ! way too go Butte!

  4. DrivebyGravy
    Report Abuse
    DrivebyGravy - August 13, 2012 8:55 am
    what does the real mining company from missoula think about all this??? they employ alot here in butte!
    is it possibly to mine flooeded toxic underground mines that have been abandoned for decades?

    we do need to move AWAY from mining and quit being called the "north korea of montana". we absolutely shouldnt loan these guys One Hundred Million dollars.

  5. miner
    Report Abuse
    miner - August 11, 2012 9:44 am
    Written by a person who does not believe in the free market, obviously. It is called investing and risk capital, in case you have never heard of it. Feel free to not take any IOUs at your business, by the way.
  6. miner
    Report Abuse
    miner - August 11, 2012 9:41 am
    So the city of Butte has the expertise to "apply some established methodologies used in reputable mining circles to this proposed venture and see if it passes the stink test"? Please, they can't even plow snow off of the streets, much less analyze a potential mining operation. Besides, the finances of a private company are not their business.
  7. miner
    Report Abuse
    miner - August 11, 2012 9:23 am
    Sure, low-wage retail jobs are what Butte needs, not high-paying mining jobs. Don't you think that if Costco or Target wanted to be in Butte, they already would be? We can't just "bring them in". Unless you mean giving them those evil tax credits, which any potential mining operation would probably also ask for.

    Please explain how a small underground mining operation will ruin the water, the land, cause homes to sink, and cause everyone in Butte to die of cancer.
  8. Karlamaria
    Report Abuse
    Karlamaria - August 10, 2012 4:38 pm
    this will ruin Butte, and the beauty surrounding it. say no to more mining here, did we not learn from what the anaconda did to Anaconda, Butte and surrounding area. our water would be ruined, our land would be ruined, and our homes will sink more from all this mining. say no!!!!!!!!!
  9. Karlamaria
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    Karlamaria - August 10, 2012 4:35 pm
    Seriously ??? more mining?? do we need the rest of Butte to fall through all the mine shafts and sink holes there already is? we do not need more damages to Butte, we have let the anaconda company steal our Columbia gardens, and all the beauty around Butte.Jobs? you want jobs, bring in a Costco, a target anything more then what we have. I have to travel out to get good deals now days. jobs would be plentiful if you opened a Costco here. but the commissioners of this town are not in Buttes best interest , and slam down any good opportunities that come our way .NO MORE MINING, WE WILL ALL DIE OF CANCER FROM ALL THIS . AS IT IS NOW BUTTE HAS THE HIGHEST RATE OF THYROID PROBLEMS AND CANCER !!! its time to get rid of those lazy council members, and get new blood who wants Butte to live on and grow and not die from mining .
  10. McQueen boy
    Report Abuse
    McQueen boy - August 10, 2012 10:53 am
    This so much looks like the sequel to "Destination Montana".
  11. DrivebyGravy
    Report Abuse
    DrivebyGravy - August 10, 2012 10:17 am
    canola, german windmills, the illusion continues!
    should we loan them the hundred million dollars?
  12. Comparadun2
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    Comparadun2 - August 10, 2012 1:50 am
    Pie-in-the-sky. Sadly, with our local government, they are likely to latch onto this, bending over backwards in the hope that this is, finally, that "one big thing" that will have us all eating Rainbow Stew and drinking Bubble Up. I've lost count how many times we've been down this road before. Remember that windmill plant "We are coming to Butte."

    Interested readers may want to consult other media outlets, other than the Montana Standard as well, about the company making this proposal. For example station KXLF reported:

    “The company's 10-Q filing reported a net worth of negative $450,000. (…) In the first three months of the year, International Silver reported a loss of nearly $436,000. (…) In recent financial report, Bloomberg Business week said the following of International Silver;
    "Year over year, International Silver, Inc. has seen revenues fall from $63,700 to $7,900. This along with an increase in SGA costs has led to a reduction in the bottom line from a loss of $478,800 to an even larger loss of $1.3 million.”

    With a financial statment like that, if you were bankers, would you loan these people the money to get this going?

    “Maybe folks should consider why these vast, long known reserves have not been exploited previously -- oh yes, there was that failed fiasco of New Butte Mining or Montana Mining Properties, or whatever multitude of names the outfit went by to keep from paying their bills”

    Yep, both good points. As the old saying goes, don’t bet the money for the baby’s new shoes on this newest “one big thing”.
  13. maxsmom
    Report Abuse
    maxsmom - August 10, 2012 1:04 am
    I think this is such great news for Butte, we need more decent paying jobs here,
  14. bob
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    bob - August 09, 2012 11:23 pm
    It would be great if possible. Mining is not my area of expertise and I have no opinion on the possibilities. It does however seem a bit pie-in-the sky to me.
  15. cj
    Report Abuse
    cj - August 09, 2012 9:47 pm
    Has anyone thoroughly checked out this company to find out if it's technologically sound and financially viable? Have they given the Council a list of the local properties and rights they've acquired? or do they have only cheap options, dependent on their striking a deal with B-SB? In short, how solid or speculative is this proposal? And, as asked below, what do they know that nobody else has figured out until now?

    Second concern: even if this turns out to be a responsible and desirable operation, does B-SB have enough legal firepower to negotiate leases that really protect the publicly owned mining assets and the community? This is not just an issue of getting an adequate return. It also involves public health and environmental responsibilities and potential liabilities; obligations to pay several kinds of taxes; fair labor practices, including some assurances of local hiring; requirements that the leases not be sold or encumbered in ways that undermine B-SB's ability to hold the operator responsible; and other important points.
  16. Buckminster
    Report Abuse
    Buckminster - August 09, 2012 8:26 pm
    Many questions, not enough answers, but this is extremely preliminary, considering what the state and feds require for permitting and the length of time involved in development--if it goes forward. Commodity prices could do anything. Silver has fallen substantially from a year ago. Interesting food for thought.
  17. geno
    Report Abuse
    geno - August 09, 2012 8:11 pm
    It's hard to believe that in these times there are still sharks of this kind that are still trying to find suckers that would invest in something like this. All they need is $100 mil, grants from the county, places where they can leave their mess, and locals that will accept their IOUs. My god is there no sanity!
  18. Docwaters
    Report Abuse
    Docwaters - August 09, 2012 8:10 pm
    The KXLF 5:30pm news program investigated the company and found in it's last financial report it was $400k in the hole.
  19. GlenHorn50
    Report Abuse
    GlenHorn50 - August 09, 2012 7:38 pm
    Wayyyyy Back the ACM did the study for taking the five hundred feet off the top of the copper ore body which is much of uptown Butte almost to the M..... It planned to completly inundate all of Browns Gulch to rid its self of the tailings. It would have taken a complete new concentrator and the relocation of all of uptown Butte. Another issue was waste rock which would have taken the other greater part of town since the operations which would continue would eventually become like what we see now, only on a scale twenty times greater also once copper was eventually mined too. All said and done those days were a lot more tolerant of and towards mining's approach. It didn't pen out then and doesn't for sure right now with ALL what the EPA and this era's governmental perspectives are. Besides even if it were to come to be, present Butte would have ZERO potable water. The two operations concentrators would consume More than we HAVE available. NEW BUTTE would have actually have its physical Location as a spot on the east side of the divide.....South of Feely and as far south as buildable Melrose ! But what the heck , they could always buy the pile of zinc which collectively comprised all of the samples which represented every mine, and vein . BSB has been pressuring for its removal half way to rocker along the old concrete highway LOL ! Good luck !
  20. drigulch
    Report Abuse
    drigulch - August 09, 2012 6:11 pm
    There are some difficult processing issues that make the recovery of both silver and zinc in much of the Butte ore a questionable economic prospect. Maybe folks should consider why these vast, long known reserves have not been exploited previously -- oh yes, there was that failed fiasco of New Butte Mining or Montana Mining Properties, or whatever multitude of names the outfit went by to keep from paying their bills. This link to some litigation lists a few of their aliases.

    http://caselaw.findlaw.com/mt-supreme-court/1328465.html

    Its a very rough row to hoe making money in an underground mining operation under the best of circumstances, considering the commodities in question here, the problems with extracting them, and the proposed rate of extraction this proposal looks doomed to bankruptcy. When you have to pay the cost of mining engineers like that brother of the Bozeman Gal who was bemoaning Jon Tester's oppressive thumb on the extractive industry, when you have to pay the capital outlay for the plant and equipment, miners, mill workers, power bills, and the whole smear it does not look as if a small underground Silver and Zinc mine like this is even plausible.

    Before our loco/local government runs us into another costly lobster trap, it would behoove them to apply some established methodologies used in reputable mining circles to this proposed venture and see if it passes the stink test. There are matrixes employed by the big boys to see if a mine appears as if it can pay back the initial investment, make a profit operating, and cover the environmental and other liabilities into the future or if we will end up with another mess for the taxpayers to pick up so delinquent mining engineers and geologists can play till the gig is up. Let us just pray they do not hire the same consultants they use to examine the city water system.
  21. Docwaters
    Report Abuse
    Docwaters - August 09, 2012 4:05 pm
    I will believe it when I see it.
  22. BSB BS
    Report Abuse
    BSB BS - August 09, 2012 1:41 pm
    How is there no comments on this?

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