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Back from the Brink
Three years after almost shutting down, Revett Minerals’ Troy Mine profits soar
Deep below the Cabinet Mountains a piece of mining equipment works in the Troy Mine. - Photo courtesy of Jim Van Gundy/Revett Minerals
TROY – Deep beneath the Cabinet Mountains, Austin Wilson sat in total darkness. In the distance, a massive haul truck roared, growing noisier by the moment. Soon, two headlights pierced the black, slowly brightening the damp mine shaft.

This scene plays out dozens of times a day, as massive trucks haul out the core of Mount Vernon, all searching for copper and silver, which have become a lifeline for Lincoln County. On the brink of closure just three years ago, Revett Minerals CEO and President John Shanahan now says the Troy Mine has a bright future. Earlier this year, the mine announced that 2011 was the best year in the company’s history, processing 1.4 million tons of ore and making almost $30 million in net cash. Late last month, first quarter results showed that net cash made, before capital expenditures, was $7.5 million. That’s a 135 percent increase over the first quarter in 2011.

“It’s been an amazing turnaround,” Shanahan said, “because a lot of companies closed down and never came back.”

Revett Minerals’ Troy Mine almost met the same fate in 2008, when copper and silver prices plummeted to record lows. Shanahan, who became CEO of the Spokane Valley, Wash.-based company that same year, said conventional wisdom told him to shut down the operation. In fact, the company issued a Worker Adjustment and Retraining Notification to its almost 200 employees at the mine, sending a message that if business didn’t turn around within three months, officials would pull the plug.

“By the end of the year we were in a world of hurt and every month we stayed open we were bleeding money,” Shanahan said.

But after meeting with the miners in Troy, Shanahan said his employees’ determination and loyalty trumped conventional wisdom. The Australian-born CEO decided that the mine operation – first used between 1981 and 1993, and reopened by Revett in 2005 – could reduce costs and survive. Employees, including management, took pay cuts, but still entered 2009 under a cloud of uncertainty.

It was an unsettling time for everyone at the mine, including Wilson, who had taken a job there in 2005 so he could return home to Trout Creek, where he was born and raised. "I always wanted to come back," he said. "I grew up here and I just love it here."

In the seven years since, Wilson has performed all sorts of jobs within the mine and is currently the safety and health supervisor. He is one of about 190 people employed at the mine, which extracts rock from the core of Mount Vernon, just south of Troy.

Far below the surface, a series of tunnels and roads wind through the earth, almost forming a beehive. Each tunnel leads to areas that are being mined or have been mined, which resemble rocky, desert canyons – sort of like Utah’s Zion National Park, except in perpetual darkness. In this darkness, haul trucks buzz through tunnels carrying chunks of rock blasted from the earth. From the trucks, the rock is dumped into a crusher and then transported out on a conveyor belt. Outside the mine, it moves into another crusher and ball mill, where it’s made into a fine sand-like material. It’s then soaked in water and, with the help of magnets, the copper and silver is extracted. The concentrate is then loaded into trucks and taken to Libby, where it’s loaded onto rail cars. Currently, the Troy Mine produces up to 4,000 tons of ore every day.

The job comes with risks. In 2007, a miner was killed when part of the roof collapsed. Wilson said the event affected everyone on site, but also served as a reminder of the dangers of the industry.
"We’re a close-knit group of guys up here," Wilson said. "We all know each other and we’re all locals, so it’s upsetting."

Since the accident, Shanahan said safety at the mine has improved and at the end of March 2012, employees had worked 400 days since the last lost-time accident.
"My wife understands that it’s a high-risk industry," Wilson said, "but she also knows I have a better chance of getting hurt on my drive to work."

Wilson drives an hour each way to the mine every day. He leaves for work well before dawn, and often doesn’t return home until 7 p.m. But there are few good jobs in the area and starting pay at the mine is $23 an hour. Shanahan said the company paid more than $14 million in local wages in 2011.

As one of the county’s biggest private employers, the Troy Mine is crucial for the local economy, Lincoln County Commissioner Ron Downey said, especially with the logging industry taking a hit in recent years.

"We need the jobs and the country needs the minerals," he said. "I’d say (the mine) is absolutely essential for our economy."

Revett could become an even bigger part of the local economy if it moves forward with plans to mine near Rock Creek, a proposal that is opposed by environmental groups. Located near Noxon in Sanders County, the Rock Creek operation would be considerably larger than Troy’s (Shanahan said it could produce 10,000 tons of ore every day). Among those opposing the development is the Clark Fork Coalition, which says the mine could pollute the nearby Clark Fork River. The group has also criticized the fact the mine would extend beneath designated wilderness areas.

Small metal disks – or “chips” – hang on hooks at the Troy Mine showing who is on the surface and who is underground. Lido Vizzutti/Flathead Beacon


Revett is working with the U.S. Forest Service to line up the appropriate environmental statements. Shanahan argues the mine would have little negative impact on the area ecosystem. If approved, he said it would take up to five years to fully develop and construct the mine before ore could be extracted.

The Troy Mine currently has seven years worth of reserves, Shanahan said, but continued exploration in different layers of rock could, and most likely will, reveal more copper and silver that can be economically mined. He said it’s possible the Troy Mine could remain open for another 20 years.

Since almost shutting down, production has continued to increase and Shanahan said as long as prices stay above 2008 levels, the mine will remain open. During the first three months of this year, the mine has produced 331,523 tons of ore, compared to 291,690 tons last year during the same period. The company is projected to produce 1.4 million ounces of silver and 11.5 million pounds of copper this year alone.

Shanahan attributes the record production to his employees, most of whom are locals who he said have the skills the mine needs.

"We hire locally because we understand that they’ll be here for the long haul," he said. "They are talented and loyal. They’ll get you through the good times and the bad times."
 
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