The justice system. An endless fount of interest. On March 29th, 2010, a federal judge rejected the U.S. Forest Service’s approval of a mining operation on the edge of the Cabinet Mountains Wilderness Area in Montana. That project was the Rock Creek mine owned by Revett Minerals.

The court ruled that the Forest Service violated the National Environmental Policy Act and the Forest Service Organic Act in approving the Rock Creek Mine, which would have bored under the Cabinet Mountain Wilderness Area and into the midst of popular recreational areas and key habitat for bull trout, grizzly bears and other environmentally sensitive wildlife species.

In response to the ruling, Jim Costello of the Rock Creek Alliance said, “We’ve said all along that this mine simply cannot be built without contaminating the region’s waters and pushing the Cabinet’s fragile bull trout and grizzly bear population in Rock Creek to extinction. It’s time for the government to stop this merry-go-round and start working to protect our region’s waters, trout and bears.”

The groups that challenged the U.S. Forest Service’s permit for the Rock Creek mine include: Rock Creek Alliance, Cabinet Resource Group, Clark Fork Coalition, Earthworks, Sierra Club, Trout Unlimited, Idaho Council of Trout Unlimited, Pacific Rivers Council, Alliance for the Wild Rockies, Natural Resources Defence Council, Montana Wilderness Association, and Great Old Broads for Wilderness. These groups were represented by lawyers from Earthjustice and the Western Mining Action Project. A long list and considerable opposition. But the U.S. Forest Service continues its claim that the General Mining Law of 1872 leaves them no other choice but to permit the mine.

At the time of the judicial set-back Revett’s management team defended their plans, saying mitigation measures taken by the company would actually improve trout and bear habitat. John Shanahan, Revett Minerals President & CEO reiterated his conviction that the mine could “be an environmentally responsible operation,” adding that “we don’t want to do it any other way.”

MiningFeeds.com connected with Mr. Shanahan for an exclusive interview to determine the status of the Rock Creek mine and to discuss the company’s operations at the company’s Troy mine which is currently in production.

John, Revett Minerals has been involved in legal proceedings concerning the proposed Rock Creek Mine. Could you please provide us with an overview of what the company has been through and where you’re at with the current proceedings?

The process has indeed been long and complicated since our Record of Decision (final permits) was granted in 2003. The groups that are opposed to the project like to make it sound as if the project has been scrapped – but I assure you it is very much alive. If they would have accepted the Federal Courts decision and not appealed to the appellant court, we would have amended the environmental impact statement with the procedural/administrative changes requested by the judge at the time and would be gearing up to start development.

For the most part, we have successfully defended the validity of the Rock Creek project through the Forest Service appeals process, through the Federal Court system, and now as a defendant in the appellant court. We expect a ruling from the 9^th Circuit Court of Appeals, hopefully sometime mid next year. Given how many times we have successfully defended the project, and with the strong support of Federal agencies such as the Forest Service and Fish & Wildlife, we are definitely coming to the end of the road.

Rock Creek is a significant asset, could you tell us about the project: the resource estimate and exploration potential?

Rock Creek is one of North America’s largest undeveloped silver projects as far as we can tell. We have an inferred resource estimate of 229 million ounces of silver and just over 2 billion pounds of copper. Historic resource estimates for adjacent claims that we also control take us up to 300 million ounces of silver and 2.5 billion pounds copper.

Further exploration potential exists throughout the entire Revett Formation, but at this stage we have enough resources in front of us at the Troy mine and Rock Creek to keep us busy for some time.

Revett has been operating the Troy mine for a number of years, could you tell us a little bit about the mine, it’s life, the anticipated production this year and the strategic benefits associated with the project?

The Troy mine, which is an underground room and pillar operation, lies around 15 air miles to the northwest of Rock Creek. We employ 192 people and are looking to produce around 1.3 million ounces of silver and 11 million pounds of copper in concentrate this year. Troy has the same deposit characteristics as Rock Creek and is probably the cleanest, least environmentally impacting mines in North America. Everything we do at Troy, from production experience to an environmental baseline is transportable to Rock Creek. We currently have a 7 year mine life, but recent exploration successes could see that extend well beyond 10 – 15 years.

The Troy mine is generating nice cash flow at the moment which enables us to continue to do our permitting and exploration work in the region. We are an important tax base in the community and receive great support from the state and counties in which we operate.

In 2008 during the economic downturn you were considering closing the Troy mine. What steps did you take to ensure the mine would continue to operate and did you hedge any of your production when metal prices recovered?

2008 and early 2009 was a very tough time for us. But looking back, it was a time period that defined what this company is all about. Employees and management came together, voluntarily took pay cuts, and worked on ways to reduce costs and increase efficiencies. We emerged a stronger and more focused company, every employee is a shareholder through our employee option program and there is a great sense of community in what we do.

We have hedged approximately 25% of our 2011 silver production at $19 an ounce and around 50% of 2011 copper at $3.55 per pound. This covers around 75% of our direct operating costs. We did this in mid 2010 when the economy wasn’t looking as strong as it is today, we wanted to make sure we weren’t in for a repeat of 2008, but also, we realize that Troy is our “bridge to Rock Creek” and so being in position to weather another potential economic downturn was very important. Looking back, we are ecstatic to see metal prices where they are today and we still get to share in the majority of these strong prices.

Let’s assume a positive outcome for Rock Creek, what would be the lead up to putting the project into production and how many ounces of silver and pounds of copper might be produced annually?

Rock Creek is to be developed in two phases. Phase 1 is an evaluation audit which will take around 2.5 years and will lead to a full bankable feasibility study. Phase 2 is the construction of the mine and will take a further 2.5 to 3 years to complete. Total development costs will be around $300 million. We expect to produce around 6 million ounces of silver and 50 million pounds of copper per year over the 25 plus years of mine life. Given our experience at the Troy mine, our confidence level is very high on available resources at Rock Creek and our ability to operate efficiently.

It’s important to note the strong and unwavering support we get from the federal agencies, state and local government. They know the Troy mine and know that Rock Creek can and will be developed to the highest standards. The “doomsday” scenarios painted by groups like the Rock Creek Alliance that are in opposition to the project are, in my opinion, unwarranted. People want responsible development and jobs, and we have proven that we can do both.

This interview appeared in 10 Most Interesting Silver Stocks – Part 2 – CLICK HERE – for the article.