Talks ordered in Montana mine dispute; judge shoots down arguments from ex-governor's group

Industrials Associated Press

Settlement talks have been ordered to resolve a legal dispute in which former Montana Gov. Brian Schweitzer and others are seeking $10 million in compensation over mining claims that were condemned to make way for a major silver and copper mine.

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Attorneys representing Schweitzer and other investors in the claims requested the March 25 settlement conference. The move came after U.S. District Judge Dana Christensen issued an order last week shooting down arguments that were central to the compensation assertions.

The claims, or mining rights, were condemned for the Montanore silver and copper mine proposed by Mines Management Inc. near Libby.

Christensen said there was no merit to statements from Schweitzer's group that it owns an existing entranceway to the proposed mine.

The value of that portal, known as an adit, was used to justify the $10 million compensation figure. But the judge said the notion that compensation should be based on the replacement costs for a new portal was "fundamentally flawed."

"As the saying goes, you can't lose what you ain't never had," the judge said, quoting from a Muddy Waters song by the same name.

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Christensen also denied a $3 million deposit Schweitzer's group had requested and issued a protective order blocking the release of financial details about Mines Management and its mining proposal.

Schweitzer is a former two-term Democratic governor. He did not immediately return a telephone message seeking comment.

Mines Management's chief executive has called the case a "shakedown" of the company and said Schweitzer and his allies were trying to get compensation they don't deserve.

Mines Management attorney Mark Stermitz declined to comment on the prospects for the upcoming settlement conference to succeed. But he said the recent order from Christensen was favorable to the company "in some pretty fundamental respects," chiefly by removing the adit from consideration.

If the talks prove fruitless, an April 8 trial is planned in Missoula, where an expert commission would decide how much compensation is warranted.

Schweitzer has been named as a witness to appear before the commission. He is a director in Optima Inc., a company that was established last year to invest in the mining claims at the heart of the dispute.

The Montanore mine holds an estimated 1.7 billion pounds of copper and 230 million ounces of silver beneath an area that includes the Cabinet Mountains Wilderness, according to Mines Management.

Mines Management Inc. turned down an offer last year from Schweitzer to resolve the claims dispute outside court in exchange for cash and stock worth about $10 million.

CEO Glenn Dobbs alleges Schweitzer threatened to drive down the company's stock if it didn't give his group a favorable deal, a charge Schweitzer has denied.