Revett eyes potential shutdown of Troy Mine
by Brent Shrum, Kootenai Valley Record
December 17, 2008
Revett Silver Co. announced Friday that it may be shutting down production at its Troy Mine in 60 days if metal prices remain at currently depressed levels.
Revett issued notice to approximately 180 employees under the Worker Adjustment and Retraining Notification, or WARN, Act. The company plans to continue operations until early February and continue thereafter as long as operations are profitable.
"The company is extremely disappointed in having to take such action given that the mine is currently operating at the best production levels it has experienced since commercial operations resumed in 2005," said Revett interim president and chief executive officer John Shanahan. "However, the prices for copper and silver continue to deteriorate making production in this environment uneconomic. We continue to believe in the future at Troy given its existing reserve base and our expectation that copper and silver prices will return to higher levels."
Since mid-year, metals prices had declined almost 50 percent, said Revett vice president of operations Carson Rife.
"It’s a big, abrupt, sudden drop," Rife said.
In an effort to reduce costs and keep the mine open, the company recently decided on an across the board pay cut of 10 percent for employees at Troy and 20 percent for those at the Spokane corporate office. Revett is doing everything it can to cut production costs to keep operations profitable, Rife said. Fuel costs have gone down significantly, and negotiations are under way to reduce costs for supplies such as steel and explosives, he said.
"We’re hoping to get our cost of production down low enough that we can continue to operate beyond the 60-day notice period, but that remains to be seen," Rife said.
The Troy Mine was operated by Asarco from 1981 until 1993 and acquired by Revett in 1999. Production resumed in December 2004, and projections call for about six more years of production if prices recover, Rife said. If prices remain too depressed for profitable operations, the mine would be placed on "care and maintenance" with a reduced crew of 10 to 15 workers, Rife said.
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Editor’s Note: See the December 16, 2008 edition of the Kootenai Valley Record for the printed version of this story. The Kootenai Valley Record publishes once a week, now on Tuesday, in Libby, Montana. They are a locally owned community newspaper, located at 403 Mineral Avenue in Libby. For in-county and out-of-county subscription information, call 406-293-2424, or e-mail kvrecord@gmail.com.
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