Creditors in the Montana Tunnels bankruptcy case and an agent from the U.S. Trustee met with Montana Tunnels Inc CEO Patrick Imeson on Jan. 17 to discuss the reasons behind the company's filing and its path forward. Throughout the meeting, Imeson maintained his stance that the mine would reopen -- once financing was secured -- and hinted that the company was close to achieving such a goal.
Imeson estimated that the reopening of the mine was only six to 12 months away. During the conference, Imeson told Brett Cahoon, a U.S. Trustee agent that – if it takes longer than 12 months for the mine to reopen – then it probably won’t open.
Before reopening the mine, Imeson said that the company is seeking financing for a pit expansion project, which would remove tons of waste rock over a period of eight months and expose 8-10 years worth of ore. The project is currently expected to cost $65 million, and Imeson estimated another $35 million in (re)start-up costs. The mine could reopen without the expansion project, Imeson added.
While an expansion project would be an ideal addition for the mine, Tunnels must pay the remainder of the $36.5 million operating permit bond to the Department of Environmental Quality for the reclamation of the site after mining wraps up, according to DEQ Public Policy Director Rebecca Harbage. Montana Tunnels must also relocate a portion of Clancy Creek away from the mine pit.
After making a series of payments towards the bond in 2021 and 2022, Montana Tunnels still owes $16.2 million. During the meeting of the creditors, Imeson said he had received a commitment from an investor to pay the remainder of the bond if Montana Tunnels could back it with 75% in collateral.
If the mine reopens, Imeson said the company would bring in approximately $200,000 to $300,000 in monthly net revenue.
Currently, the mine has budgeted $700,000 over the next eight months for care and maintenance of the site, Iseman said. Montana Tunnels is receiving this funding as a loan from Montana Goldfields Inc.
During the meeting of creditors, Imeson mentioned that approximately $2.9 million in mining equipment, real property and the Diamond Hill Mine would be added to the company’s list of assets. The real property includes a warehouse, mill building, administrative building and an assay lab on the mine’s main property.
Imeson explained that the Diamond Hill Mine in Broadwater County was not originally listed as an asset because they believed it was owned by another parent company, but found differently.
When questioned why Montana Tunnels chose to file bankruptcy, Imeson cited the DEQ bond as the main reason.
“We felt like we were in a position of jeopardy,” Imeson said, explaining that the company had not met the DEQ’s bond payment deadline in November. “We felt like we were at risk of losing those assets.”
A representative for the DEQ said he had “lots” of questions for Imeson, but Imeson had another meeting to attend. The conversation was continued on Jan. 24, after the press deadline.
Imeson said that other bankruptcy proceedings will take place on Jan. 31.
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