Sandfire America scores legal win for Montana copper project

Sandfire Resources America (TSXV: SFR) soared on Tuesday following a positive ruling by the Montana Supreme Court which reversed a district court decision […]
Site of Black Butte project in Montana. Credit: Sandfire Resources America

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Sandfire Resources America (TSXV: SFR) soared on Tuesday following a positive ruling by the Montana Supreme Court which reversed a district court decision and reinstated the permit for the company's flagship Black Butte copper project.

For years, the Black Butte project has divided opinions amongst local communities because of its close proximity to Smith River, one of the state’s most popular recreational rivers. The proposed mine is located on private land some 27 km north of the town of White Sulphur Springs in central Montana.

In June 2020, a lawsuit was brought forward by local conservation groups against Tintina Montana -- Sandfire's subsidiary -- as well as the Montana Department of Environmental Quality (MT DEQ) for certain violations against the state's environmental and mining laws. Specifically, it argued that state officials did not thoroughly study the environmental harm that could result from the mine.

After hearing the plaintiff's arguments, a district court judge issued a decision in April 2022 to invalidate Black Butte's copper mining permit, though Tintina was allowed to complete the project's Phase I construction while it pursues an appeal of the order.

In June 2023, the Supreme Court heard oral arguments on the case, and subsequently granted the company’s request for summary judgement to allow complete construction of its underground copper mine in Montana. Intervenors in support of Tintina and MT DEQ in the suit include Meagher County, Broadwater County and the Montana Department of Justice.

On Tuesday, Tintina won on all counts in the Supreme Court with a 5-2 decision, upholding the 2020 decision of the MT DEQ to allow copper mining at Black Butte, which, according to a 2020 feasibility study, will be underpinned by the large Johnny Lee deposit that is expected to produce 23,000 tonnes of copper a year during an eight-year life.

"The fact is, ours is the most reviewed and examined proposed project in the history of Montana mining. The Court record stands at over 90,000 pages of testimony, information, and analysis," said Lincoln Greenidge, CEO of Sandfire America, in a press release Tuesday.

"Today’s victory in the Montana Supreme Court is a validation of the thoughtful and deliberate efforts of the Sandfire America team to design a world-class, environmentally safe mining project from the beginning," he stated.

"Over a decade ago, we set out to design a state of the art, environmentally protective underground mining project, and this decision is proof we’ve been successful,” added senior VP Jerry Zieg.

The company now has all the permits necessary to proceed with the Black Butte project. Stipulated agreements regarding water rights granted through the Montana Department of Natural Resources and Conservation (MT DNRC) for the project have been finalized, Sandfire said.

Separately, there is an ongoing challenge to the Montana Constitution’s definition of the “beneficial use of water” related to Black Butte's water use permit. The company noted that this case does not currently affect its water rights package. The challenge was appealed by objectors after losing a district court decision and will be heard by Montana Supreme Court on March 29, 2024.

Shares of Sandfire America surged 75% to a new 52-week high of $0.14 by 12:15 p.m. ET on the Supreme Court win for its copper project. The company has a market capitalization of $143.3 million.

THIS ARTICLE WAS ORIGINALLY POSTED ON MINING.COM

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