Firm severs ties with Grupo Mexico over reopened Montana Resources
Grupo Mexico is no longer a partner in Montana Resources, and the Butte mine is now the property of Montana Resources Inc. and MR Holdings, both owned by Missoula industrialist Dennis Washington.
In December, Montana Resources Inc., officially severed ties with AR Montana, a holding company of Asarco Inc., which in turn is parented by Grupo Mexico, a vast but financially troubled resource company based in Mexico City.
Greg Stricker, vice president of Montana Resources Inc., and chief operating officer for Washington Corps., said that AR Montana's interests were erased on Dec. 9, following a procedure spelled out in a partnership agreement between the two partners. MRI was the majority partner with 50.1 percent controlling interest while AR Montana held 49.9 percent.
Stricker explained that in 2000 - when the mine was mothballed due to high electricity prices - "cash calls" were put out to the partners to help the company meet its financial obligations such as salaries, the new Horseshoe Water Treatment plant and reclamation. While MRI funded its obligations, AR Montana was unable to do so and its stake in the company was reduced.
Three such events - called "dilutions" - were conducted before Dec. 9, 2003, when the last stake of AR Montana was erased.
Calls placed to Grupo Mexico by the Montana Standard seeking further comment were not returned last week.
In a new partnership, Montana Resources Inc. is still the majority owner but has 90 percent of the company with MR Holdings, a limited liability company, taking 10 percent.
Stricker, in a phone interview from his Missoula office, said the company is pleased with the new arrangement and the new partnership shows Washington's commitment to the mine.
"We know the people, we know the operation and have complete confidence in the management team. We recognize that those folks at Butte are as good or better than anybody in the world at what they do," Stricker said.
Stricker is the former president of Montana Resources.
So far, the mine's decision to reopen has been rewarded with copper prices climbing; they currently are at $1.09 a pound. Molybdenum is around $8 a pound. Some analysts have speculated that copper could possibly see prices in the $2 range.
Even with Asarco released from its Butte obligations, it still owns or has interest in other Montana properties, such as Asarco's East Helena smelting plant, the Black Pine Mine near Philipsburg, the Troy mine near Noxon, and the Mike Horse mine near Lincoln. In the case of the East Helena plant, Asarco is tardy on paying November's taxes.