Judge asked to toss Schweitzer's mine claim

2014-07-11T13:32:00Z 2014-07-12T00:13:05Z Judge asked to toss Schweitzer's mine claimThe Associated Press The Associated Press
July 11, 2014 1:32 pm  • 

A Washington state mining company wants a federal judge to throw out a $10 million compensation claim from a group of investors that includes former Montana Gov. Brian Schweitzer.

Schweitzer’s group controls mining rights needed by Mines Management Inc. to access a vast copper and silver reserve beneath the Cabinet Mountains Wilderness near Libby.

Schweitzer, a Democrat who served two terms as governor, says that $10 million is fair compensation for what the mining rights, known as claims, are worth. Schweitzer and his partners bought into the claims last year after forming a company called Optima

Inc.

But in recent court filings, attorneys for Spokane-based Mines Management described the compensation figure as outrageous. They accused Schweitzer and his partners of attempting “a shakedown” of the company by promising to generate negative publicity for its proposed Montanore mine if they didn’t get their way.

The company asked U.S. District Judge Dana Christensen to reject the compensation claim.

“They filed the claim for public relations and to exert pressure on Montanore, not because they have any chance to recover even a small fraction of the $10 million,” Mines Management attorney Mark Stermitz wrote in a court brief.

Schweitzer has rejected assertions that he tried to strong-arm company executives.

Mines Management turned down a March offer from Schweitzer to resolve the claims dispute outside of court in exchange for cash and stock worth about $10 million. In April, Christensen issued a preliminary condemnation order in favor of Mines Management.

That set off a process to determine how much Optima should be compensated for its losses.

Stermitz said Friday that the two sides are still in discussions over the proper procedures for resolving the dispute.

Under state law, if they fail to come to an agreement, a three-member commission can be appointed by the judge to settle the dispute. But because it’s a federal case, Stermitz said a jury trial also is a possibility.

“Either option is available. We just haven’t pinned down which we’ll proceed under,” Stermitz said.

Mines Management has been seeking state and federal permits since 2005 for Montanore. Its reserves hold 230 million ounces of silver and 1.7 billion pounds of copper, according to the company.

A permit decision by the U.S. Forest Service and other agencies is targeted for 2015.

Other members of Optima are Bruce Ramsey, former U.S. Forest Service supervisor for the Beaverhead-Deerlodge National Forest; David Elliot, a partner with the Canadian brokerage firm Haywood Securities; mining industry veteran Frank Duval; and financial consultant Heather Ennis, according to records filed with the Montana Secretary of State and information provided by Optima.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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