MINES MANAGEMENT ANNOUNCES
2013 FIRST QUARTER RESULTS Spokane, Washington - June 3, 2013 ? MINES MANAGEMENT, INC. (NYSE-MARKET: MGN, TSX: MGT) announces financial and operating results for the first quarter, which ended March 31st, 2013. Overview First Quarter 2013 - The U.S. Forest Service (?USFS?) completed a revised aquatic Biological Assessment (?BA?) and formal consultation commenced with the U.S. Fish and Wildlife Service (?USFWS?). The USFS also submitted a draft terrestrial BA, and informal consultation with the USFWS is ongoing. These are important steps towards the issuance of a Biological Opinion by the USFWS and in the permitting process generally.
- The Company continues to work with the U.S. Army Corps of Engineers (?USACE?) on the Clean Water Act 404 permitting process. This process will continue concurrently with the Final Environmental Impact Study (?EIS?). The Company commenced discussions with the USACE concerning preliminary mitigation plan designs. A final mitigation design is required for permit approval.
- The Company entered into an agreement with the Montana Fish Wildlife and Parks to fund additional mountain goat surveys as part of the monitoring and data collection requirements required to be completed prior to initiating major construction activities for the project.
- The Company elected to extend the exploration program at its La Estrella gold-silver project in central Peru into its second year under the terms of its agreement with the owner, Estrella Gold Corp., whereby the Company may earn a 75% interest in the property.
Montanore Activities During the first quarter of 2013, the Company continued to maintain the Libby adit in a care and maintenance condition in preparation for evaluation activities and adit rehabilitation expected to recommence when the Record of Decision is received. Technical support and assistance were provided for ongoing permitting and environmental efforts. Gathering of environmental data and reporting to state and federal agencies as part of the permitting process is ongoing. Montanore Permitting and Environmental - Significant progress has been made on the Final EIS. The agencies continue to edit and re-write various resource sections in the Final EIS which are based on the Draft EIS and Supplemental Draft EIS previously issued. The USFS completed a revised aquatic BA during the first quarter of 2013 and formal consultation commenced between the two agencies. A draft terrestrial BA was submitted during the first quarter of 2013 as well. Mitigation plans for impacts to both aquatic and terrestrial wildlife were also prepared at that time. It is anticipated that the formal consultation process on the terrestrial BA will be initiated in the second quarter of 2013. The USACE has issued a preliminary jurisdictional determination which is a critical step towards a decision to issue a 404 permit. During the quarter, the Company commenced discussions with the USACE concerning preliminary mitigation plan designs. The agency provided the Company with comments and the plan is advancing towards a final mitigation design that will be required for permit approval. This review effort by the USACE is occurring concurrently with the Final EIS and Record of Decision review path. The Company continues to work on related environmental regulatory processes towards a targeted completion in 2013. During the first quarter the Company entered into an agreement with the Montana Fish Wildlife and Parks to fund additional mountain goat surveys which are currently part of their goat management plan. Helicopter surveys over the project area will meet the two years of mountain goat monitoring required prior to initiating major construction activities for the project. La Estrella Activities Geophysics - The major activity on La Estrella during the first quarter was completion of two phases of 3D-Induced Polarization/Resistivity (?IP/Res?) surveys over the entire area of prospective ground. The lateral resolution of the survey ranged from 100 to 400 meters, with depth resolution to approximately 488 meters below the surface. Results of this survey identified a large, previously unknown area of anomalous chargeability extending north and northwest from the 2012 area of interest for a distance of approximately 1,400 meters. This new target area, when combined with previously known areas of anomalous chargeability, forms a prospective zone over 2000 meters in length and up to 1100 meters in width. A strongly positive correlation between drill-indicated mineralization and moderate to high chargeability has been repeatedly demonstrated at La Estrella. Metallurgical testing - Following the decision to continue the Project into a second year, an initial round of metallurgical analyses of La Estrella mineralization was begun. A composite sample was designed based on assays from the 2012 drilling. Eighty samples were carefully selected to contain low, moderate, and strong gold-silver mineralization and form a composite sample representative of La Estrella mineralization. At the end of March, the metallurgical analysis was in the initial stages, with completion expected during the second quarter of 2013. Permitting - During the first quarter of 2013, the Company applied for a new Water-Use Permit, prepared an application for a modified Assessment of Environmental Impact, and responded to a Peruvian governmental request for information regarding the Company?s 2012 exploration program. The Company provided all required information to the appropriate offices, and the Company and its project are in good standing with the Peruvian government and its Ministry of Energy and Mines. Financial and Operating Results The Company reported a net loss of $2.1 million for the quarter ended March 31, 2013 compared to a net loss of $1.4 million for the quarter ended March 31, 2012. The increased net loss in the 2013 quarter resulted primarily from: (1) a $0.2 million increase in general and administrative expenses primarily due to the higher value of stock based compensation issued during the first quarter of 2013 compared to 2012, (2) a $0.2 million increase in technical services associated with the exploration of the Estrella Project, and (3) a $0.3 million decrease in other income primarily from the change in the fair market value of warrant derivatives which expired in April of 2012. Liquidity During the three months ended March 31, 2013, the net cash used for operating activities was approximately $1.6 million, which is $0.2 million more than the same period during the prior year primarily due to expenditures related to the Estrella Project. This reduced our cash and cash equivalents and certificates of deposit from $11.8 at December 31, 2012 to approximately $10.2 million at March 31, 2013. We have continued to limit activity levels, including capital expenditures, until the timing for the receipt of the Record of Decision for the Montanore Project becomes clearer. We anticipate expenditures of approximately $4.8 million for the final three quarters of 2013, which we expect to consist of approximately $1.5 million each quarter for general and administrative expenses, permitting, engineering, and geologic studies for the permitting for the Montanore Project and $0.3 million on exploration support including permit renewals and resource modeling at La Estrella. We expect to fund these expenditures from cash on hand. We expect to require external financing before mid 2014 in order to continue our business. We expect that the timing and amount of additional external financing will be affected by the anticipated timing of the Record of Decision and planned drilling program for Montanore and by exploration results and additional exploration plans, if any, for the La Estrella project. Michael G. Rasmussen, PhD, Vice President of Exploration for Mines Management, Inc., is a Qualified Person for the purposes of National Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators, and has approved the technical information contained in this news release. About Mines Management Mines Management, Inc. is engaged in the business of acquiring and exploring, and if exploration is successful, developing mineral properties containing precious and base metals. The Company's primary focus is on the advancement of the Montanore silver-copper project located in northwestern Montana. The Montanore is an advanced stage exploration project containing a Canadian NI 43-101 measured resource of 4.03 million tons of material grading 1.85 ounces per ton ("opt") silver and 0.74% copper, an indicated resource of 77.5 million tons grading 2.05 opt silver and 0.75% copper, and an inferred resource of 35.1 million tons grading 1.85 opt silver and 0.71% copper, and is currently undergoing the process to obtain permitting approval. Additional information is available at Mines Management's website: www.minesmanagement.com. Cautionary Note to U.S. Investors concerning estimates of Measured, Indicated and Inferred Mineral Resources: This press release uses the terms "Measured Mineral Resource?, ?Indicated Mineral Resource?, and "Inferred Mineral Resource." We advise U.S. investors that while those terms are recognized and required by Canadian NI 43-101, the Securities and Exchange Commission does not recognize them. U.S. investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into mineral reserves. Inferred Mineral Resources have a greater amount of uncertainty as to their existence and as to their economic and legal feasibility. In accordance with Canadian rules, estimates of Inferred Mineral Resources cannot form the basis of feasibility or other economic studies.. U.S. investors are cautioned not to assume that part or all of the Inferred Mineral Resources exists, or is economically or legally mineable. The SEC normally only permits issuers to report mineralization that does not constitute 'reserves' by SEC standards as "in place" tonnage and grade without reference to unit measures. Accordingly, the information contained in this press release may not be comparable to similar information made public by U..S. companies that are not subject to NI 43-101. Statements Regarding Forward-Looking Information: Some statements contained in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other applicable U.S. and Canadian securities laws. Investors are cautioned that forward-looking statements are inherently uncertain and involve risks and uncertainties that could cause actual results to differ materially, including comments regarding anticipated permitting and engineering activities and geologic studies, planned exploration expenditures and activities at the La Estrella exploration property in Peru, interpretation of the exploration results at La Estrella , financing needs including the financing to continue the Company?s business after 2013 and the effect of the timing of Montanore permits and exploration plans for La Estrella on the amount of financing required, and the sufficiency of cash on hand to complete certain planned activities for 2013. Actual results may differ materially from those presented. Factors that could cause results to differ materially include delays in and increases in the cost of permitting at Montanore, delays in and the increase of the cost of exploration at La Estrella, changes in interpretation of geological information, political unrest or delays in obtaining community agreements or permitting in Peru in connection with planned exploration activities, world economic conditions or fluctuations in silver, gold and copper prices, and inability to obtain external funding on acceptable terms or at all. Mines Management, Inc. assumes no obligation to update this information. There can be no assurance that future developments affecting Mines Management, Inc. will be those anticipated by management. Please refer to the discussion of risk factors in the Company's Form 10-K for the year ended December 31, 2012, as amended. FOR MORE INFORMATION:
Douglas Dobbs
President, Mines Management, Inc.
905 West Riverside Ave - Suite 311
Spokane, WA 99201
Phone: 509-838-6050
Fax: 509-838-0486
Email: info@minesmanagement.com
Web: www.minesmanagement..com
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