UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 10-K
(Mark one)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2014
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
REVETT MINING COMPANY, INC.
(Exact name of registrant as specified in its charter)
Delaware |
46-4577805 |
(State or other jurisdiction of incorporation |
(IRS Employer Identification No.) |
or organization) |
|
11115 East Montgomery, Suite G
Spokane Valley,
Washington 99206
(Address of principal executive offices)
Registrant's telephone number, including area code: (509)
921-2294
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered under Section 12(g) of the Act:
Common Stock
Title of each class
Indicate by check mark if the Registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes [ ]
No [X]
Indicate by check mark if the Registrant is not required to
file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes [
] No [X]
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No
[ ]
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrants knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
Yes [ ] No
[X]
Indicate by check mark whether the Registrant is a large
accelerated filer, an accelerated filer, or a non-accelerated filer. See
definition of accelerated filer and large accelerated filer in Rule 12b-2 of
the Exchange Act.
Small Reporting Company [X] |
Large accelerated filer [ ] |
Accelerated filer [ ] |
Non-accelerated filer [ ]
|
Indicate by check mark whether the Registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act).
Yes [
] No [X]
The aggregate market value of the voting stock held by
non-affiliates of the Registrant, computed by reference to the closing price at
which such equity was last sold on the New York Stock Exchange Market Division,
was approximately $43.1 million as of June 30, 2014, the last business day of
the registrants most recently completed second fiscal quarter.
Shares of common stock outstanding at March 30, 2015:
39,273,989.
Documents Incorporated by Reference: None
TABLE OF CONTENTS
(ii)
Explanatory Note: As used in this report,
the terms Revett Mining Company, the company, we, us and our are
sometimes used to refer to Revett Mining Company, Inc., a Delaware
corporation, and where the context so requires, its wholly-owned Montana
subsidiary, Revett Silver Company (Revett Silver), and Revett Silvers
wholly-owned Montana subsidiaries, Troy Mine, Inc., RC Resources Inc.,
Revett Exploration, Inc., and Revett Holdings, Inc. Unless otherwise
noted, all monetary denominations are in U.S. dollars.
|
Note on Forward-Looking Statements
Certain statements contained in this report (including
information incorporated by reference) are forward-looking statements and are
intended to be covered by the safe harbor provided for under Section 27A of the
Securities Act of 1933, as amended (the Securities Act), and Section 21E of
the Securities Exchange Act of 1934, as amended (the Exchange Act). These
forward-looking statements include our current expectations and projections
about future results, performance, prospects and opportunities. We have tried to
identify these forward-looking statements by using words such as may, might,
will, expect, anticipate, believe, could, intend, plan, estimate
and similar expressions.
These forward-looking statements are based on information
currently available to us and are expressed in good faith and believed to have a
reasonable basis. That being said, they are subject to a number of risks,
uncertainties and other factors that could cause our actual results,
performance, prospects or opportunities to differ materially from those
expressed in, or implied by, these forward-looking statements.
These risks, uncertainties and other factors include but are
not limited to those set forth in Item 1A Risk Factors in this report. Given
these risks and uncertainties, readers are cautioned not to place undue reliance
on our forward-looking statements. Actual results may vary, perhaps materially,
and we undertake no obligation to update our projections at any future date.
[The balance of this page has intentionally been left blank.]
3
PART I
Item 1. Business.
Overview. Revett Mining Company, Inc. (formerly
known as Revett Minerals Inc.) was incorporated in Canada in August 2004 to
acquire Revett Silver Company and undertake a public offering of its common
shares, transactions that were completed in February 2005. Revett Silver
Company, a Montana corporation, was organized in April 1999 to acquire the Troy
mine (Troy) and the Rock Creek project (Rock Creek) from ASARCO Incorporated
and Kennecott Montana Company, transactions that were completed in October 1999
and February 2000.
We changed our jurisdiction of incorporation (from Canada to
Delaware) and our name (from Revett Minerals, Inc. to Revett Mining Company,
Inc.) in February 2014. We presently conduct business through four Montana
corporations, all subsidiaries of our wholly-owned Revett Silver Company
subsidiary: Troy Mine, Inc., RC Resources, Inc., Revett Exploration, Inc. and
Revett Holdings, Inc.
As previously reported, the Company announced on March 26, 2015
that it has entered into an agreement and plan of merger with Hecla Mining
Company (Hecla) and Heclas wholly-owned subsidiary, pursuant to which, and
subject to the approval of the Companys shareholders and the satisfaction of
other conditions specified in the agreement, the Company would merge with and
into Hecla in a share exchange transaction in which the Companys stockholders
would receive 0.1622 share of Hecla common stock for each share of common stock
of the Company. The proposed transaction is described more fully in the section
of this report entitled Managements Discussion and Analysis of Financial
Condition and Results of Operations Liquidity and Capital Resources and -
Proposed Transactions, and in Note 20 Subsequent Events to our consolidated
financial statements appearing elsewhere in this report.
Our common stock is traded on the New York Stock Exchange
Market Division and on the Toronto Stock Exchange under the symbol RVM and on
the Frankfurt Stock Exchange under the symbol 37RN.
Troy is an underground silver and copper mine located in
northwestern Montana. ASARCO operated the mine from 1981 to 1993, and then
placed it on care and maintenance because of low metals prices. We restarted
mining operations in late 2004 and commenced commercial production in early
2005. We operated Troy continuously until December 2012, when operations were
suspended due to unstable ground conditions in portions of the mine. In November
2013, we commenced construction of a new access decline from the main service
adit to the North C Bed and to the undeveloped I Bed, and we successfully
reached the North C Beds and resumed limited mining and milling operations in
the fourth quarter of 2014. Despite these achievements, we were compelled to
place Troy on care and maintenance in January 2015 due to low metals prices.
This resulted in the cessation of development work to the I Beds, an orderly
shutdown of milling operations and the transition to care and maintenance
status, which were completed in February 2015. Although we took significant
steps to improve our liquidity during the first quarter of 2014, we currently do
not have sufficient cash on hand to re-start mining and milling operations or
complete development to the I Beds. If our proposed merger with Hecla is not
completed, we will necessarily have to seek additional capital or consider other
alternatives, which could include liquidating some or all of our assets in order
to fund our capital spending and debt service requirements. There is no
assurance our financing efforts will be successful under current market
conditions. Our business has been materially and adversely affected by the
decline in copper and silver prices and by the suspension of commercial mining
operations at Troy.
4
Rock Creek is a large development-stage silver and copper
deposit also located in northwestern Montana. We have been engaged in permitting
activities at Rock Creek since 1999, and expect to obtain final government
agency approvals within the next eighteen months. Once we receive all of the
required permits, we will begin an extensive evaluation program to confirm and
further define the economic and technical viability of the project.
Our principal executive office is located at 11115 East
Montgomery, Suite G, Spokane Valley, Washington 99206, and our telephone number
at that address is (509) 921-2294. Our registered office in Delaware is located
at 1209 Orange Street, Wilmington, Delaware 19801.
Troy. Troy is located in Lincoln County, Montana,
approximately fifteen miles south of the town of Troy. The mine operation
comprises 24 patented lode-mining claims, 510 unpatented lode-mining claims,
approximately 850 acres of fee land and 394 acres of patented claim lands.
Ore is extracted using a room and pillar method and is
processed on the surface using standard grinding and flotation technology. When
producing, the resulting silver/copper concentrate is sold under contract to a
third party and is shipped by rail from a load-out facility located in Libby,
Montana. Historically, the Troy concentrate typically contains between 35% and
40% copper, and between 80 to 120 ounces of silver per ton. During 2012, Troy
produced 7.6 million pounds of copper and 1.1 million ounces of silver contained
in concentrate. No concentrate was produced in 2013 and there was limited
concentrate produced in 2014. Our current estimated proven and probable reserves
at Troy comprise 16.45 million tons having an average copper grade of 0.36% and
an average silver grade of 1.04 ounces per ton based on a net smelter return cut
off of $29.99 per ton as of January 31, 2015. We operate the mine through Troy
Mine, Inc., one of our second-tier operating subsidiaries. Troy Mine, Inc. is
also the record holder of the patented and unpatented mining claims and fee
lands comprising the mine.
Once mining at Troy has ceased and required reclamation is
complete, we intend to transfer surface rights to 394 acres of patented mining
claims and approximately 500 acres of fee lands, associated with the Troy Mine,
to the Revett Foundation, an affiliated nonprofit corporation that we organized
in 2012. The Revett Foundation will oversee and administer these properties for
use as wildlife habitat and corridor linkage and other uses for public purpose.
Transfer of interests may be either through direct assignment, conservation
easements, trades, or other appropriate means.
Rock Creek. The Rock Creek project is located in
Sanders County, Montana, approximately five miles northeast of Noxon, Montana
and sixteen air miles southeast of Troy Mine. The project comprises 99 patented
lode-mining claims, 370 unpatented lode-mining claims, five tunnel site claims,
85 mill site claims and 754 acres of fee land. The patented claims lying within
the Cabinet Mountain Wilderness Area convey mineral rights only; the patented
claims lying outside the wilderness area convey both mineral and surface rights
and title. The patented claims were legally surveyed in 1983, patented in 1989,
and occupy an area of approximately 1,809 acres. We conduct our development
activities at Rock Creek through RC Resources Inc., another of our second-tier
operating subsidiaries. RC Resources Inc. is also the record holder of the
various claims and fee lands comprising the project.
Our proposed development of Rock Creek will occur in two
phases. The first phase, a two year evaluation program, will confirm and better
define the economic and technical viability of the project and reconfirm
geotechnical assumptions. This initial phase will include the construction of a
7,000 foot evaluation adit to collect additional technical information;
underground infill drilling to establish and confirm mineral resource estimates;
geotechnical design studies; bulk sampling of the mineralization for use in
metallurgical testing; and, to collect and evaluate hydrologic information. We
estimate the evaluation program will cost $25 million to $30 million. Once the
program is completed, we will commission a feasibility study and, if it is
positive, seek financing to construct a 10,000 tons per day mine and process
facility. More specific information concerning our proposed development of Rock
Creek is set forth in Item 2 of this report.
5
We cannot begin the evaluation program until we receive permits
and approvals from the various Federal and State agencies that exercise
jurisdiction over the project. Rock Creek is partially located on United States
Forest Service (the Forest Service) land within the Kootenai National Forest
and under the Cabinet Mountains Wilderness Area, and federal and state approval
is required before development can commence. In 2001, the Forest Service issued
a Final Environmental Impact Statement (Final EIS) under the National
Environmental Policy Act (NEPA). In 2003, the Forest Service and the Montana
Department of Environmental Quality (the DEQ) issued a joint administrative
decision approving our proposed plan of operations at Rock Creek (the Record of
Decision). The Record of Decision was based primarily on the findings in the
Final EIS and a companion biological opinion (the Biological Opinion) issued
by the U.S. Fish and Wildlife Service (USFWS) in 2003, pursuant to the
requirements of the Endangered Species Act (ESA). The project was challenged
by several regional and national environmental advocacy groups, culminating in a
May 2010 Montana Federal District Court decision that upheld the Biological
Opinion but remanded the Record of Decision to the Forest Service to address
several NEPA procedural deficiencies. The Federal District Court decision
upholding the Biological Opinion was affirmed by the Ninth Circuit Court of
Appeals in November 2012. The Forest Service is currently working to develop a
Supplemental EIS that will comply with the Federal District Courts decision.
We are also working to satisfy other federal and state
permitting requirements that are required for phase 1 development. These include
grizzly bear mitigation requirements, reclamation bonding, designing and
constructing a water treatment facility, and improving the road leading to the
proposed evaluation adit site.
In addition, we currently own approximately 673 acres of fee
land, located in Lincoln and Sanders Counties, that has been designated for
grizzly bear habitat mitigation lands as the Rock Creek project is developed.
This land and other current and future real estate holdings that are not
essential to our day to day mining operations either are or will be held by
Revett Holdings, Inc., a wholly-owned Montana subsidiary of Revett Silver.
The Copper and Silver Markets. Copper and silver
are internationally traded metals whose prices are determined by global economic
conditions of supply and demand.
Historical copper prices have been volatile. The following
table sets forth the average annual prices of copper on the London Metal
Exchange since 2010, as reported by the exchange. During this period, average
annual copper prices have ranged from a low of $3.11 per pound in 2014 to a high
of $4.00 per pound in 2011.
LME Average Cash Official Price (US$/Pound)
2014 |
2013 |
2012 |
2011 |
2010
|
3.11 |
3.32 |
3.61 |
4.00 |
3.42 |
Although currently depressed, we believe copper prices will be
favorable in the long term because of the continued lack of investment in
exploration and mine development during the past decade. This has resulted in
low to modest growth rates in supplies, compared to increasing consumption rates
in the developed economies of North America and Europe, and rapid
industrialization and the emergence of consumer product markets in countries
such as China and India.
6
Silver prices are also volatile, as both a precious
metal and, as an industrial commodity. The following table illustrates the
average annual London Bullion Market Association Silver Fix since 2010. These
average annual prices have ranged from a low of $19.08 per ounce in 2014 to a
high of $35.11 per ounce in 2011.
London Average Fix (US$/Ounce)
2014 |
2013 |
2012 |
2011 |
2010 |
19.08 |
23.83 |
31.15 |
35.11 |
20.16 |
Although also currently depressed, we believe silver
prices will be generally favorable in the long term because of strong demand in
the electronics industry and consistent demand from institutions that purchase
and hold silver for investment purposes.
Financial Information about Segments.
Our operations comprise a single business segment, located in the United
States. Information concerning our revenues, losses, and total assets,
liabilities and equity for the years ended December 31, 2014 and 2013 is set
forth in the consolidated financial statements that appear elsewhere in this
report.
Environmental Matters. All mining
companies doing business in the United States are subject to a variety of
federal, state and local statutes, rules and regulations designed to protect the
quality of the air and water, and threatened or endangered species in the
vicinity of its mining operations. These include permitting or pre-operating
approval requirements designed to ensure the environmental integrity of a
proposed mining facility, operating requirements designed to mitigate the
effects of discharges into the environment during mining operations, and
reclamation or post-operation requirements designed to ensure water quality and
to remediate the lands affected by mining activities once commercial operations
have ceased. These laws are administered and enforced by various federal and
state agencies operating under parallel statutes and regulations. The principal
environmental laws affecting our current and proposed operations at Troy and
Rock Creek are set forth below:
The Federal Clean Water Act and the Montana Water Quality
Act are the principal water quality laws regulating our operations at Troy
and Rock Creek. The federal act imposes limitations on water discharges into
waters of the United States, including discharges from point sources such as
mine facilities, and is administered by the U.S. Environmental Protection
Agency. The Montana act imposes similar limitations on discharges into state
waters and is administered by the DEQ.
The Endangered Species Act requires federal agencies to
ensure that any action authorized, funded or carried out by such agency is not
likely to jeopardize the continued existence of any endangered or threatened
species. ESAs definition of species includes any distinct population segment
of any vertebrate fish or wildlife that interbreeds when mature. In order to
facilitate the conservation of listed species, ESA establishes an interagency
consultation process. When a federal agency proposes an action that may affect
a listed species, which includes grizzly bears and bull trout at Rock Creek, the
Forest Service must provide a biological assessment of the effects of the
proposed action. Unless the USFWS determines that the proposed action will have
no adverse effect on listed species, it must review all of the information
provided by the action agency, as well as any other relevant information, and
prepare a Biological Opinion setting forth the effects of the proposed action.
In preparing such an opinion, the USFWS must use the best available scientific
and economic data to determine whether the proposed action is likely to
jeopardize the species, the amount and extent of any incidental taking or harm
to the species that may result from the action, and whether it should identify
any conservation measures to promote the recovery of the listed species. ESA
also provides that, once the interagency consultation process has been
initiated, neither the federal agency nor the permit or license applicant may
make any irreversible commitment of resources with respect to the proposed
agency action that would have the effect of foreclosing the formulation or
implementation of any reasonable or prudent measures to avoid jeopardizing the
listed species.
7
As previously noted in this report, the USFWS issued a
Biological Opinion in May 2003, which concluded that the proposed development of
Rock Creek would not jeopardize the recovery of grizzly bears or bull trout. The
opinion was challenged by several environmental advocacy groups on ESA grounds
in a lawsuit brought in Federal District Court in Montana, and was remanded to
the USFWS for further study. In October 2006 the USFWS issued a revised
Biological Opinion reaffirming its earlier decision. The revised opinion was
also challenged in Federal District Court. In May 2010, the District Court
issued a decision dismissing the groups ESA challenge. The litigants appealed
that dismissal to the Ninth Circuit Court of Appeals, which issued an opinion in
November 2011 affirming the District Courts decision and upholding the USFWSs
determination that the mine would entail no adverse modification to bull trout
critical habitat and would result in no jeopardy to grizzly bears. On March
17, 2015, some of the environmental advocacy groups that were parties to these
earlier proceedings filed a petition with the USFWS asking the agency to
withdraw its revised Biological Opinion, arguing that the USFWS had received new
information concerning Rock Creeks potential impact on bull trout, and that
this new information triggers an obligation for further consultation with the
Forest Service under ESA. We have not fully studied the new petition as of the
date of this report, but believe it is substantially without merit.
The Wilderness Act of 1964 created a National Wilderness
Preservation System composed of federally owned areas designated by Congress as
wilderness areas. Wilderness is generally defined in the Act as an area where
the earth and its community of life are untrammelled by man, where man himself
is a visitor who does not remain. Once included in the system, the act requires
that these areas be administered by the federal department or agency having
prior jurisdiction in the system in such a manner as to preserve their
wilderness character and leave them unimpaired for future use and enjoyment as
wilderness. The Cabinet Mountains Wilderness Area overlays Rock Creek and was
included in the National Wilderness Preservation System in 1964. The Wilderness
Act does not affect mineral claim activities conducted prior to 1983, however it
does authorize the Secretary of Agriculture (through the Forest Service) to
impose such reasonable stipulations as are necessary to protect the wilderness
character of the land for the purposes for which they are leased, permitted or
licensed. In the case of Rock Creek, these stipulations have been the part of
the focus of opposition to our development of the project.
The Clean Air Act limits the ambient air
discharge of certain materials deemed to be hazardous and establishes a federal
air quality permitting program for such discharges.
The Montana Air Quality Act imposes limitations and
permitting requirements similar to those of the Clean Air Act. Hazardous
materials are defined in both acts and in their enabling regulations to include
various metals. We hold all of the required air quality permits for our Troy
operations.
The National Environmental Policy Act and the Montana
Environmental Policy Act requires all governmental agencies to consider the
impact of major federal actions on the human environment. The state act mandates
similar considerations with respect to major state actions. Because Rock Creek
is located on federal lands, an Environmental Impact Statement (EIS) was
required to outline the environmental effects of proposed operations; and, to
address our plans to limit the effects of Rock Creeks operations. The Final EIS
for Rock Creek was issued in 2001, and the Forest Service, the lead government
agency on the project, released its Record of Decision on our proposed operating
plan in June 2003. In May 2010, a Montana Federal District Court the 2003 Record
of Decision back to the Forest Service to address NEPA deficiencies. The Forest
Service is currently working to develop a Supplemental EIS that will comply with
the Federal District Courts decision.
8
The Federal Comprehensive Environmental Response,
Compensation and Liability Act and the Montana Metal Mine Reclamation
Act (CERCLA) imposes clean-up and reclamation obligations stemming from
unlawful discharges into the environment, and establishes significant criminal
and civil penalties against those persons who are primarily responsible for such
discharges.
The Montana Metal Mine Reclamation Act (MMRA) is
similar to CERCLA in principle, but focuses principally on the cleanup and
reclamation of mining properties and unlawful discharges from mining operations.
CERCLA is jointly administered and enforced by the Environmental Protection
Agency and the DEQ. MMRA is administered and enforced by the DEQ.
The Multiple-Use Sustained Yield Act of 1960
(MUSYA) and The National Forest Management Act of
1974 direct the Secretary of the U.S. Department of Agriculture to
administer Forest Service and other federal lands in ways that promote multiple
uses of these resources (such as outdoor recreation, grazing, timber harvesting
and mining) and are protective of watersheds, fish and wildlife, and to
implement regulations that are consistent with MUSYAs objectives.
The Resource Conservation and Recovery Act was designed
and implemented to regulate the disposal of hazardous wastes. It mandates that
such wastes be treated, disposed of or stored, and requires those doing so to
obtain permits from the Environmental Protection Agency or the authorized state
regulatory authority.
Employees. We had 16 full-time employees and one
part-time employee at March 31, 2015. Eight of these employees work at Troy in
care and maintenance capacities, and the remaining eight employees work at our
corporate office or at Troy in management and administrative capacities. None of
our employees are represented by a collective bargaining unit.
Available Information. We are required to file
annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K and other information with the Securities and Exchange Commission
(SEC). We are subject to the informational requirements of the Exchange Act,
and file or furnish reports, proxy statements and other information with the
SEC. Copies of the materials we file with the SEC are available on our website
at www.revettmining.com/sec-filings as soon as reasonably practicable
after we file them with the SEC. You can also obtain copies of these materials
by visiting the SECs Public Reference Room at 100 F Street NE, Washington, D.C.
20549, by calling the SEC at 1-800-SEC-0330 or by accessing the SECs Edgar
website at www.sec.gov. The information on these websites or may be
accessed through them is not incorporated by reference in this report and should
not be considered to be a part of this report.
Item 1A. Risk Factors.
The following risk factors and other information in this report
contain forward-looking statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act. If any of the following
events or developments described below actually occur, our business, financial
condition or operating results could be materially harmed. This could cause the
market price of our common stock to decline.
Liquidity Considerations and Going Concern. The
accompanying consolidated financial statements have been prepared under the
assumption that the Company will continue as a going concern. The Company does
not have sufficient cash to fund normal operations and meet debt obligations for
the next twelve months without deferring payments on certain current liabilities
and/or raising additional funds. The Companys continued losses and lack of
capital raise substantial doubt about the Companys ability to continue as a
going concern. Although the Company has raised some additional capital in 2014,
the Company has not raised sufficient external financing to meet its obligations
and provide access to Troy mine ore reserves. Therefore, the Company entered
into an agreement and plan of merger with Hecla, the completion of which is
subject to conditions (see Note 20). Should our proposed merger with Hecla not
eventuate, we will review alternatives to source adequate financing to meet our
capital spending and debt service requirements. There is no assurance our
financing efforts will be successful under current market conditions.
9
Operations at Troy are on care and maintenance.
We operated Troy continuously until December 2012, when operations were
suspended due to unstable ground conditions in portions of the mine. In November
2013, we commenced construction of a new access decline from the main service
adit to the North C Bed and to the undeveloped I Bed. In the fourth quarter of
2014, we successfully reached the North C Beds and resumed limited mining and
milling operations. However, on January 19, 2015 we placed Troy on care and
maintenance due to low metals prices. Although we took significant steps to
improve our liquidity during the first quarter of 2014, we currently do not have
sufficient cash on hand to re-start mining and milling operations or complete
development to the I Beds. If we are not able to complete our proposed merger
with Hecla, we will necessarily have to obtain additional capital in order to
meet our capital spending and debt service requirements or consider other
alternatives, which could include a sale of all or substantially all of our
assets. There is no assurance our financing efforts will be successful under
current market conditions. Our business has been materially and adversely
affected by the decline in copper and silver prices and by the suspension of
commercial mining operations at Troy.
Copper and silver prices fluctuate markedly. Our
operations are significantly influenced by the prices of copper and silver.
Copper and silver prices fluctuate widely and are affected by numerous factors
that are beyond our control, such as the strength of the United States dollar,
global and regional industrial demand, and the political and economic conditions
of major producing countries throughout the world. During the last four years,
annual average copper prices have fluctuated from a low of $3.11 per pound in
2014 to a high of $4.00 per pound in 2011, and world average annual silver
prices have fluctuated from a low of $19.08 per ounce in 2014 to a high of
$35.11 per ounce in 2011.
There are other formidable risks to mining. We
are subject to all of the risks inherent in the mining industry, including
industrial accidents, labor disputes, environmental related issues, unusual or
unexpected geologic formations, cave-ins, surface subsidence, flooding, power
disruptions and periodic interruptions due to inclement weather. These risks
could result in damage to or destruction of our mineral properties and
production facilities, personal injury, environmental damage, delays, monetary
losses and legal liability. In addition, we are subject to competition for new
minerals properties, management and skilled miners from other mining companies,
many of which have significantly greater resources than we do. We also have no
direct control over changes in governmental regulation of mining activities, the
speculative nature of mineral exploration and development, operating hazards,
fluctuating metal prices and inflation and other economic conditions.
Legal challenges could prevent us from ever developing
Rock Creek. Our proposed development of Rock Creek has been challenged
by several regional and national conservation groups at various times since the
Forest Service issued its initial Record of Decision in 2003 approving our plan
of operation. Some of these challenges have alleged violations of a variety of
federal and state laws and regulations pertaining to our permitting activities
at Rock Creek, including the Endangered Species Act, the National Environmental
Policy Act, the 1872 Mining Law, the Federal Land Policy Management Act, the
Wilderness Act, the National Forest Management Act, the Clean Water Act, the
Clean Air Act, the Forest Service Organic Act of 1897 and the Administrative
Procedural Act. Although we have successfully addressed most all of these
challenges, we were directed by the Montana Federal District Court in May 2010 to
produce a Supplemental EIS (SEIS) to address NEPA procedural deficiencies that
were identified by the court. We cannot predict with any degree of certainty how
possible future challenges will be resolved. Rock Creek is potentially the more
significant of our two mining assets. New court challenges to the SEIS and a
revised Record of Decision may delay us from proceeding with our planned
development at Rock Creek. If we are successful in completing the SEIS and
defending any challenges, we still must comply with a number of requirements and
conditions as development progresses, failing which we could be denied the
ability to continue with our proposed activities.
10
Our reclamation liability at Troy Mine could be
substantial. Our financial obligations to reclaim, restore and close
Troy are presently covered by a $12.9 million surety bond, which includes $6.5
million in a restricted cash account. In late 2012, Montana DEQ and the U.S.
Forest Service issued a new EIS and Record of Decision pertaining to the Troy
reclamation. We do not presently know whether the revised reclamation plan will
increase our bonding costs. Laws governing the closure of mining operations in
Montana have become more stringent since Troy was first placed into production.
These factors could result in the imposition of a higher performance bond. Our
reclamation liability for Troy is not limited by the amount of the performance
bond itself; the bond serves only as security for the payment of these
obligations. We would necessarily have to pay for any substantial increase in
actual costs over and above the maximum allowed under the bond.
We presently do not have the financial resources to
complete the construction of the new decline at Troy or to develop Rock Creek.
We presently do not have sufficient funds to complete the construction
of a new decline to the North C Bed and deeper I Bed areas at Troy. We also do
not have sufficient cash to develop a mine or begin mining operations at Rock
Creek should it prove feasible to do so.
The Rock Creek mineral resources are not equivalent to
reserves. This report includes information concerning the estimated size
of our mineral resource at Rock Creek and supplemental information concerning
the extent of the remaining mineral resource at Troy. Although we believe these
mineral resources are significant, it does not mean they can be economically
mined. A mineral resource is not equivalent to proven reserves or probable
reserves under standards promulgated by the SEC, principally because of the
absence of sufficient quantifiable data. We will not be able to determine
whether Rock Creek contains a commercially mineable ore body until our
evaluation program has been completed and we have obtained a final, economic and
technical feasibility study that will include an analysis of the amount of ore
that can be economically produced under then-prevailing market conditions.
Similarly, we will not be able to determine whether the supplemental mineral
resources at Troy can be commercially mined without further exploration and
study. Stockholders are cautioned not to assume that mineral
resources will ever be converted into proven reserves or probable reserves.
Item 1B. Unresolved Staff Comments.
Not applicable. Revett Mining Company is a small reporting
company.
Item 2. Properties.
The Troy and Rock Creek Assets. Our
principal assets are Troy and Rock Creek, both located in northwestern Montana.
We acquired these assets in February 2005 through acquisition of Revett Silver,
which had earlier acquired them from ASARCO and Kennecott. We hold the Troy
assets through Troy Mine, Inc., one of our second-tier operating subsidiaries.
We hold the Rock Creek assets through RC Resources Inc., another of our
second-tier operating subsidiaries.
11
Other Mining Assets. We also hold interests in
the following additional mining assets:
|
Additional Troy Claims -- We acquired 152
unpatented claims located east and north of Troy Mine from Kennecott in
2010 through Troy Mine, Inc. These claims expanded our holdings by
approximately 3,000 acres and provided important new areas for exploration
that could potentially extend Troys mine life. |
|
|
|
The Adjacent Properties These assets comprise
three satellite zones that extend laterally from Rock Creek. We acquired
them in conjunction with our purchase of Rock Creek and hold them through
RC Resources Inc. |
|
|
|
Vermillion River and Sims Claim Groups. These
claim groups comprise approximately 1,660 acres and are located
approximately 25 miles southeast of Rock Creek. We acquired the claims in
1999 and transferred them to Revett Exploration, Inc. in 2012. The
Vermillion River claim groups prior owners conducted some limited
drilling. The Sims group is untested. |
|
|
|
The JE and Lost Girl Claims We acquired eight
unpatented claims, known as the JE claims, and staked an additional 200
unpatented claims, known as the Lost Girl claims, in 2011. All of these
claims are located northwest of Rock Creek and expand our property
position at the project by approximately 4,000 acres. We hold these claims
through RC Resources Inc. |
|
|
|
Rock Creek Mitigation Lands We acquired
approximately 673 acres of fee land that will be used primarily for
mitigation as wildlife habitat and as a grizzly bear migration corridor as
the project is developed. We hold these lands through Revett Holdings,
Inc., another of our second-tier operating subsidiaries.
|
Geology. The geology of the Troy and Rock Creek
areas is characterized by a thick sedimentary Proterozoic-age sequence comprised
of five major conformable zones or groups: the Lower Belt Group; the Ravalli
Group; the Middle Belt Group; the Carbonate Group; and the Missoula Group. The
Troy and Rock Creek deposits are found in the Ravalli Group, specifically in the
Revett Formation, a mature, clastic, metamorphosed sandstone sequence of varying
thickness lying within the group. Copper and silver sulfide mineralization
occurs in varying degrees in quartzite subunits or beds throughout the
formation. The mineralization is stratabound and disseminated, the result of
migrating metal-bearing solutions through unconsolidated porous sediments prior
to or during diagenesis; minor additional enriched mineralization also occurs as
fracture-fillings. All of the mineral-bearing beds contain lateral metal and
mineral zones that are the result of primary ore-forming processes. These beds
are depicted in the following diagram.
12
Copper is found in the Revett Formation in bornite and
chalcocite, both sulfide minerals, and most often occurs as fine-grained
disseminations with concentrations of less than six percent of the total sulfide
along fractures, veinlets and bedding planes. The main copper sulfide zones are
the chalcocite-chlorite and the bornite-calcite zones. Significant amounts of
silver are found in zones within the copper sulfides and as enriched native
silver. The thickness of these zones and their copper and silver grades are
generally quite continuous across large areas, although there are segments that
are thinner or of lower grade. Four additional concentric mineral zones that
generally have no economic value envelop the chalcocite-chlorite and
bornite-calcite zones: the chalcopyrite-ankerite zone is on the proximal side of
the ore zones; the other three mineral zones, the chalcopyrite-calcite zone, the
galena-calcite zone and pyrite-calcite zone, are sequentially located on the
distal side of the ore zones.
Physiography, Climate and Infrastructure. The
Cabinet Mountains are a rugged, 35 mile long range of glaciated peaks and
valleys that extend southeast from a point near Libby, Montana. Altitudes vary
from 2,200 feet in the valley floors to 7,700 feet at the peaks. The areas
topography is defined by the underlying rock types and structural features. The
talus slopes and hogback ridges of the area are typically comprised of the more
erosion resistant quartzite and limestone rocks.
The major land-forming features in the range were created by
the Rocky Mountain uplift approximately 60 million years ago, and were
subsequently modified by shifts in the earths crust, alpine glaciation and
alluvial deposits. The northern portions of the range, including the Troy and
Rock Creek areas, were influenced by Pleistocene-era alpine glaciers that carved
the landscape into a series of cirques and horns characterized by nearly
vertical cliffs, ledges, steep colluvial slopes and talus fields. These glaciers also scoured some lower elevation
areas and deposited a veneer of glacial deposits, silt and clay in the
low-elevation drainages averaging approximately 1,000 feet in thickness.
13
The climate of the area is characterized by a combination of
Pacific maritime and continental climates. The maritime influences are strongest
in the winter, when relatively warm, moist air from the Pacific Ocean is cooled
as it is lifted over the mountains and mixes with colder Arctic air moving
south. This results in snowfall with significant accumulations in the higher
elevations. Continental influences are more prevalent in the summer with
thundershowers during May and June, followed by hot, dry weather into
mid-September. Annual precipitation totals vary from about 30 inches along the
Clark Fork River valley to about 80 inches at the highest elevations in the
Cabinet Mountains. Temperatures in the area are moderate. During the summer
months, minimum night-time temperatures are in the 50 to 60 degrees Fahrenheit
range. Winter cold waves occur, but mild weather is more common. The long-term
annual average temperature is about 45 degrees Fahrenheit. The warmest month,
July, averages 65 degrees Fahrenheit and the coldest month, January, averages 24
degrees Fahrenheit.
The Troy Mine is located in Lincoln County, Montana which is
sparsely inhabited with several rural communities. The town of Troy is located
15 miles north of the mine and Libby, the county seat, is located approximately
32 miles northeast of the mine. The mine site is accessed by a seven mile paved
mine road which connects to Montana Highway 56, a paved all-weather road
connecting Montana Highway 200 to U.S. Highway 2. The copper-silver concentrates
from Troy Mine are trucked to a leased load out facility and rail siding in
Libby for rail shipment to a port as designated by our concentrate purchaser.
The mine is connected to a power grid managed by a local electric cooperative.
The Rock Creek project is located in Sanders County, Montana,
approximately five miles northeast of the town of Noxon. Thompson Falls, the
county seat, is located approximately 37 miles southeast of Noxon along Montana
Highway 200. High voltage electrical power, rail and highway transportation,
water and other necessary infrastructure are available within four miles of the
project site.
Development History. Development history at Troy
and Rock Creek date back to 1963, when the Bear Creek Mining Company, a
subsidiary of Kennecott Copper Corp., discovered stratabound copper and silver
mineralization in the Cabinet Mountains. Over the next two decades, extensive
exploration activity delineated both the Troy and Rock Creek deposits. The Troy
and Rock Creek deposits share many similarities in geology, geochemistry and
physiology. In 1973, ASARCO leased the Troy project from Kennecott and began
permitting and development of the Troy mine. Production commenced in August 1981
and continued until April 1993, when operations were placed on care and
maintenance due to low metal prices. The mine produced an average of
approximately 4.0 million ounces of silver and 34 million pounds of copper
during each of the twelve years ASARCO operated it.
ASARCO also acquired the Rock Creek claims from Kennecott in
1973, and thereafter commenced an exploration program comprising 121 boreholes.
According to a final exploration report prepared in 1989 using polygonal
methodology, the Rock Creek deposit contains an estimated mineral resource of
144million tons of ore having an average copper grade of 0.68% and an average
silver grade of 1.65 ounces per ton.
Troy.
The Deposit Significant mineralization occurs in a
number of distinct stratigraphic quartzite subunits or beds at Troy Mine. As
previously noted in this report, the upper, middle and lower quartzite beds are
located within the Upper Revett portion of the formation and the A, C and I Beds
14 are located in the Lower Revett portion of the formation. The
deposit measures approximately 7,500 feet by 1,800 feet and is generally flat in
the vicinity of the mine, with a shallow dip of four degrees, the equivalent of
a 7% grade.
Three styles of faults are common in the mine area:
northwest-trending faults, typified by the East Fault, having brittle-ductile
structures with common clay gouge; east-northeast to east-southeast trending
faults, typified by the Cross Fault, which are high-angle reverse faults that
separate the north and south ore bodies and have a zone with clay gouge and
breccia; and east northeast trending structures, typified by the South Fault,
which are late brittle and generally open faults with sandy infills and
generally offset the mineralized sedimentary units.
The Troy deposit has been subdivided into three separate mining
areas, the North Ore Body the South Ore Body and the East Ore Body. The bodies
are principally delineated by the Cross Fault and the East Fault, which dissect
the mineralized quartzite bends. The East Fault delineates the east boundary of
the North Ore Body and the South Ore Body. The ore bodies are defined by
assay-based determinations of economic copper and silver mineralization,
zonation and outcrop on the north, west and south.
Mining operations in the North Ore Body and the South Ore Body
has historically been confined to the Lower and Middle Quartzite subunits, and
to a lesser extent, to the A and C Beds in the South Ore Body. Mining operations
in the East Ore Body has historically been confined to the Middle and Upper
Quartzite subunits. No economic copper and silver mineralization has been
delineated in the Upper Quartzite subunit west of the East Fault or in the Lower
Quartzite subunit east of the East Fault. Our mining operations at Troy will
likely be confined to the C Bed and the deeper I Bed for the immediate future
when we resume operations.
The following cross sectional view of Troy illustrates the
location of these ore bodies, the quartzite subunits that we have historically
mined, and the A and C and I Beds that we will mine once we complete the
construction of the decline.
Reserves and Mineral Resource Estimates. The following
tables set forth our estimates of Troys reserves and mineral resources, as of
the dates indicated. A mineral reserve is the economically mineable part of a
measured or indicated mineral resource demonstrated by at least a preliminary
feasibility study. The study must include adequate 15 information on mining, processing, metallurgical, economic and
other relevant factors that demonstrate, at the time of reporting, that economic
extraction can be justified, including dilutive materials and allowances for
losses that may occur when the material is mined. Mineral reserves are
subdivided into proven and probable classifications. Mineral resources do
not have to be demonstrated by a preliminary feasibility study and are therefore
much less certain. Mineral resources are subdivided into measured and
indicated and inferred classifications.
The Troy reserve estimates conform to SEC guidelines, Canadian
Standards on Mineral Resources and Mineral Reserves Definitions and Guidelines
(CIM Guidelines) and National Instrument 43-101 of Canadian Securities
Administrators (NI 43-101) requirements, and were calculated by Larry
Erickson, P. Eng., who is employed by us. The Troy resource estimates, also
calculated by Mr. Erickson, conform to CIM Guidelines and NI 43-101, but do not
conform to SEC guidelines. The SEC does not recognize mineral resources, only
reserves.
Investors should not assume that any portion of our mineral
resources will ever be converted into proven reserves or probable reserves.
Current Troy Ore Reserve Estimates (January 31, 2015)
|
|
|
Ag |
Cu |
|
|
|
|
|
Grade |
Grade |
Contained |
Contained |
|
|
Million |
|
|
|
|
Category |
Area |
Tons |
(opt) |
(%) |
Ag (Moz) |
Cu (Mlb) |
Proven Reserves |
North Orebody |
1.38 |
1.42 |
0.70 |
1.95 |
19.30 |
|
South Orebody |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
|
East Orebody |
0.08 |
1.26 |
0.63 |
0.09 |
0.95 |
|
Lower Revett - A Bed |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
|
Lower Revett - C
Bed |
0.09 |
1.26 |
0.48 |
0.12 |
0.88 |
|
Lower Revett - I Bed |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
Total |
Proven Reserves |
1.54 |
1.40 |
0.68 |
2.16 |
21.14 |
Probable Reserves |
North Orebody |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
|
South Orebody |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
|
East Orebody |
0.90 |
1.39 |
0.60 |
1.25 |
10.89 |
|
Lower Revett - A
Bed |
0.60 |
0.94 |
0.24 |
0.56 |
2.81 |
|
Lower Revett - C Bed |
0.28 |
1.02 |
0.34 |
0.28 |
1.89 |
|
Lower Revett - I Bed |
13.13 |
0.98 |
0.32 |
12.83 |
83.03 |
Total |
Probable Reserves |
14.91 |
1.00 |
0.33 |
14.93 |
98.62 |
Proven & Probable |
North Orebody |
1.38 |
1.42 |
0.70 |
1.95 |
19.30 |
|
South Orebody |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
|
East Orebody |
0.98 |
1.38 |
0.61 |
1.35 |
11.84 |
|
Lower Revett - A Bed |
0.60 |
0.94 |
0.24 |
0.56 |
2.81 |
|
Lower Revett - C
Bed |
0.37 |
1.08 |
0.37 |
0.40 |
2.77 |
|
Lower Revett - I Bed |
13.13 |
0.98 |
0.32 |
12.83 |
83.03 |
Total |
Proven & Probable Reserves |
16.45 |
1.04 |
0.36 |
17.10 |
119.75
|
16
The following key factors were used in determining the
foregoing reserves:
Key Factors / Parameters |
Silver |
Copper |
Other/Total |
Metal Prices (prior 5 year averages) |
$ 24.69 |
$ 3.35 |
|
NSR Cutoff (Incl. Royalty) |
|
|
$ 29.99 |
Mining Recovery |
|
|
100% |
Dilution (incl. reserve calc.) |
|
|
0% |
Metallurgical Recoveries - LOM Avg. |
86% |
85% |
|
Current Troy Ore Resource Estimates (January 31, 2015)
|
|
|
Ag |
Cu |
|
|
|
|
|
Grade |
Grade |
Contained |
Contained |
|
|
Million |
|
|
|
|
Category |
Area |
Tons |
(opt) |
(%) |
Ag (Moz) |
Cu (Mlb) |
Measured Resources |
North Orebody |
27.76 |
1.32 |
0.66 |
36.75 |
365.36 |
|
South Orebody |
17.65 |
1.40 |
0.69 |
24.77 |
242.80 |
|
East Orebody |
3.15 |
1.13 |
0.52 |
3.56 |
32.70 |
|
Lower Revett - A Bed |
0.78 |
0.84 |
0.27 |
0.65 |
4.28 |
|
Lower Revett - C
Bed |
1.36 |
1.41 |
0.60 |
1.91 |
16.25 |
|
Lower Revett - I Bed |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
Total |
Measured Resources |
50.69 |
1.33 |
0.65 |
67.65 |
661.38 |
Indicated Resources |
North Orebody |
0.54 |
0.62 |
0.33 |
0.34 |
3.53 |
|
South Orebody |
2.62 |
0.96 |
0.27 |
2.51 |
14.09 |
|
East Orebody |
2.73 |
1.34 |
0.61 |
3.66 |
33.62 |
|
Lower Revett - A
Bed |
0.39 |
0.84 |
0.27 |
0.33 |
2.14 |
|
Lower Revett - C Bed |
0.59 |
0.95 |
0.31 |
0.56 |
3.64 |
|
Lower Revett - I Bed |
18.20 |
1.00 |
0.32 |
18.19 |
115.69 |
Total |
Indicated Resources |
25.08 |
1.02 |
0.34 |
25.59 |
172.71 |
Measured/Indicated/Inferred |
North Orebody |
28.30 |
1.31 |
0.65 |
37.09 |
368.88 |
|
South Orebody |
20.28 |
1.35 |
0.63 |
27.29 |
256.89 |
|
East Orebody |
5.88 |
1.23 |
0.56 |
7.22 |
66.32 |
|
Lower Revett - A Bed |
1.17 |
0.84 |
0.27 |
0.98 |
6.42 |
|
Lower Revett - C
Bed |
1.95 |
1.27 |
0.51 |
2.47 |
19.89 |
|
Lower Revett - I Bed |
18.20 |
1.00 |
0.32 |
18.19 |
115.69 |
Total |
Measured/Indicated |
75.77 |
1.23 |
0.55 |
93.24 |
834.09 |
|
|
|
|
|
|
|
Total |
Inferred (I Bed) |
1.50 |
0.71 |
0.30 |
1.06 |
8.86 |
|
|
|
|
|
|
|
Currently in Pillars
(Incl in Meas., Ind. & Inf.) |
49.91 |
1.33 |
0.65 |
66.41 |
650.46
|
Operations. The following table sets forth information
concerning Troys production for each of the five years ended December 31, 2014.
As noted elsewhere in this report, we suspended mining operations at Troy in
December 2012 due to unstable ground conditions in the mine, and placed the mine
on care and maintenance in January 2015 due to low metals prices. Cash costs are
shown in dollars per short ton and include all direct site costs and treatment,
freight, refining and royalty costs. Cash cost per ton is a non-GAAP measure,
however we consider it to be a well understood and widely used performance
benchmark in the mining industry.
17
Troy Mine Production |
2010 |
2011 |
2012 |
2013 |
2014 |
Total |
Mill production ( tons x 1000) |
1,363 |
1,417 |
1,195 |
- |
59 |
4,034 |
Grades: Silver (opt) |
0.87 |
1.07 |
1.08 |
- |
0.56 |
1.00 |
Copper (%) |
0.40% |
0.46% |
0.38% |
- |
0.15 |
0.41% |
Recovery: Silver (%) |
85.0% |
84.9% |
86.1% |
- |
82.5% |
85.3% |
Copper (%) |
81.2% |
82.0% |
82.5% |
- |
89.5% |
82.0% |
Production: Silver ( oz x1000) |
1,008 |
1,291 |
1,206 |
- |
27 |
3,532 |
Copper (lbs x1000) |
8,794 |
10,651 |
8,564 |
- |
159 |
28,168 |
Cash cost ($/st) |
$ 24.83 |
$ 30.52 |
$ 34.59 |
- |
|
- |
Ongoing Exploration. We have been exploring beneath and
adjacent to the current workings at Troy for the past several drilling seasons.
Our primary target has been stratabound copper and silver mineralization located
in the I Bed of the lower portion of the Revett Formation, approximately 1,200
feet below the main ore body at the mine. ASARCO had initially identified
mineralization in this bed during drill programs in the 1980s but did not follow
up with subsequent drilling due to lower metals prices. We believe ore grade
mineralization exists in this and other beds within the Lower Revett Formation,
based on the results of our exploratory drilling and the understanding of the
upper quartzite units of the Formation. We completed the first phase of drilling
and re-assaying of ASARCOs existing core in 2013, and plan to continue a
confirmatory drill program once we resume commercial mining operations at Troy.
Our longer range goals are to step out from the immediate Troy Mine area to
explore for additional resources that would extend the mine life at Troy and
allow us to continue to use existing mine and processing infrastructure. We have
initially targeted promising mineralization trends lying north and east of Troy
Mine. We have expanded our claim holdings in these areas, as well as reviewing
prior geophysical and drill data.
Mine Reclamation Plan. Once we conclude mining
operations at Troy, we will be obligated to reclaim and remediate the area in
accordance with a revised reclamation plan issued by Montana DEQ and the U.S.
Forest Service in late 2012. Our current bond of $12.9 million is covered by a
surety bond and restricted cash account of $6.5million. We do not presently know
whether the revised reclamation plan will increase our bonding costs. We have
accrued a discounted liability of $4.7 million as of December 31, 2014 relating
to these obligations.
Rock Creek.
The Deposit. The Rock Creek deposit is a large
development-stage stratabound copper and silver deposit located in Sanders
County, Montana. The project comprises 99 patented lode-mining claims, 370
unpatented lode-mining claims, five tunnel site claims, 85 mill site claims and
754 acres of fee land associated with project facilities. The patented claims
lying within the Cabinet Mountain Wilderness Area convey mineral rights and
other limited surface rights; while the patented claims lying outside the
wilderness area convey both mineral and surface rights and title. The patented
claims occupy an area of approximately 1,809 acres. All of the Rock Creek mining
claims are in good standing.
The project is approximately sixteen air miles or 45 five road
miles southeast of the Troy mine. We will access the ore body through an adit
that will originate outside the Cabinet Mountain Wilderness area, near the
valley floor. The project development plan will be very similar to that used at
Troy. We expect to mine ore at the rate of 10,000 tons per day and produce an
average of 52 million pounds of copper and 6 million ounces of silver per year.
Mineral Resources. The stratigraphy in the vicinity of
Rock Creek is nearly identical to that found at Troy. Bedrock exposed in the
area consists primarily of the Revett and St. Regis Formations. In this area, Belt Supergroup rocks are gently
folded and cut by several northwest-trending faults. In the vicinity of the
deposit, two faults, the Copper Lake and Moran Faults, subdivide the deposit
into three distinct segments: the Chicago Peak, St. Paul and North Basin blocks.
The more significant portion of the Rock Creek deposit forms an oblong body
measuring at least 16,000 feet by 7,200 feet. The long axis of the copper and
silver mineralization is generally oriented in a north-south direction and
occurs between elevations of 4,300 feet and 6,000 feet above means sea level
within an anticlinal structure that plunges slightly to the northwest. As with
Troy, mineralization occurs primarily within quartzite subunits of the Lower
portion of the Revett Formation and subordinately within siltite and argillite
subunits of the lower and middle portions of the formation. The Lower portion of
the Revett Formation is locally subdivided into the same subunits as Troy,
namely the A through I Beds. (See the graph at page 8 of this report.) The bulk
of the mineralization is confined to one layer, but locally there may be up to
four vertically stacked, potentially minable layers. The copper and silver
mineralization ranges in thickness from six feet to a maximum of 235 feet near
the Copper Lake Fault. The average thickness is 27 feet.
18
Mineral Resource Estimates. The following tables set
forth our estimates of Rock Creeks and the Adjacent Properties mineral
resources as of the dates indicated. The Rock Creek estimates are based upon a
technical report dated May 7, 2004, amended as of January 27, 2005, prepared by
SRK Consulting, Toronto and Dr. Jean-Francois Couture, on behalf of SRK, the
designated qualified person, in accordance with NI 43-101. The estimates are
based upon a cut-off grade of $10.00 net smelter return per ton calculated at
$1.00 per pound for copper $ 7.00 per ounce for silver.
The Adjacent Properties estimates are a resource estimate
within the meaning of NI 43-101 and are based upon a 1984 U.S. Borax internal
report titled an Economic Analysis of the Rock Peak Project by W. McGregor
& M.D. Regan. This historical mineral resource estimate was prepared before
the adoption of NI 43-101 and uses categories other than the ones set out in NI
43-101. We consider it relevant even though no qualified person within the
meaning of NI 43-101 has done sufficient work to classify the historical
estimate as current mineral resources. We do not treat U.S. Boraxs historical
estimate as current mineral resources and will not do so unless and until we
have undertaken additional steps to validate U.S. Boraxs drilling data either
by re-assaying the prior drill core or by supplementing it with new drilling
data. Consequently, you should not rely upon U.S. Boraxs historical estimate.
As previously noted in this report, mineral resources do not
have to be demonstrated by a preliminary feasibility study and are therefore
much less certain than reserves. And although the resource estimates conform to
CIM Guidelines and NI 43-101 requirements, they do not conform to SEC
guidelines. The SEC does not recognize mineral resources, only reserves.
Investors should not assume that any portion of our mineral
resources will ever be converted into proven reserves or probable reserves.
Rock Creek Resource Estimates (2004)
|
|
|
Silver |
Copper |
Contained |
Contained |
(1) |
Area |
Tons |
Grade |
Grade |
Silver |
Copper |
Resources |
|
(M tons)(2) |
(opt) |
(%) |
(Moz) |
(Mlbs) |
Inferred |
Chicago Block
|
78.0 |
1.45 |
0.65 |
113.0 |
1,025.0 |
|
St. Paul Block |
48.0 |
2.10 |
0.92 |
101.0 |
883.0 |
|
North Basin |
10.0 |
1.50 |
0.57 |
15.0 |
114.0 |
|
Block |
|
|
|
|
|
Total Inferred |
|
136.0 |
1.67 |
0.72 |
229.0 |
2,022.0
|
19
The Adjacent Properties at Rock Creek are comprised of three
unpatented claim groups, Copper Gulch, Horizon Basin and Rock Peak, which cover
lateral extensions of the Rock Creek deposit. The prior owners of the Adjacent
Properties drilled 36 boreholes into the mineralization of these claims groups
and estimated the mineral inventory of 48 million tons grading 0.54% copper and
1.66 ounces per ton of silver in three satellite zones using a polygonal
methodology.
|
Tons |
Silver |
Copper |
Contained |
Contained |
Rock Creek Adjacent Properties |
|
Grade |
Grade |
Silver |
Copper |
|
(M tons) |
(opt) |
(%) |
(Moz) |
(Mlbs) |
Rock
Peak |
10.9 |
2.70 |
0.65% |
29.43 |
141.70 |
Horizon Basin |
4.2 |
1.80 |
0.60% |
7.56 |
50.40 |
Copper Gulch |
32.7 |
1.30 |
0.50% |
42.51 |
327.00 |
Total Adjacent Properties Inferred |
47.8 |
1.66 |
0.54% |
79.50 |
519.10
|
Permitting History and Status. As previously noted in
this report, Montana DEQ and the U.S. Forest Service jointly issued a Record of
Decision in June 2003 approving our proposed plan of operation at Rock Creek.
The Record of Decision was based on the Final EIS (FEIS) issued in 2001 and a
non-jeopardy Biological Opinion issued by the USFWS in May 2003. The FEIS
followed six years of public and inter-agency review and comment with subsequent
project development modifications and mitigations, as required under NEPA. The
Record of Decision was challenged by a number of national and regional
conservation groups, and in May 2010 both the Record of Decision and Final EIS
were remanded back to the Forest Service by the Federal District Court in
Montana for completion of a Supplemental EIS to address specified NEPA
deficiencies. All of the challenges to the Biological Opinion were dismissed by
the Federal District Court in Montana, a decision that was subsequently upheld
by the Ninth Circuit Court of Appeals in November 2011.
Project Development. We have constructed an office and
core storage building at the Rock Creek site. Once we receive all of the
necessary permits, we will install remaining infrastructure (including
improvements to the access road, power transmission and a water treatment
facility) and construct an adit approximately 7,000 feet long to gain access
into the deposit. After mineralization is reached (at approximately 3,500 feet),
we will collect data to support a full technical and economic feasibility study.
This process is expected to take approximately two years and will include both
direct development in mineralization and an infill drilling program with a view
to establishing proven and probable reserves within a portion of the ore body.
Geo-technical and hydrologic data will also be acquired and analyzed during this
phase.
Assuming the feasibility study is positive and financing is
available, we will then commence construction of the 10,000 tons per day mine
and process facility. The longest lead time item will be the development of two
parallel adits (approximately 15,500 feet) driven uphill at a 10% grade into the
deposit; one for conveyor haulage out of the mine and the other for services and
access for men and materials. Other underground construction in non-mineralized
rock (such as the installation of primary crushing facilities) will be
relatively limited since mine development for ore haulage will largely be
confined to the ore zone. The processing plant and surface infrastructure will
use conventional technology and will be based on the experience we have gained
from operating the Troy processing plant. Construction, including development of
the service and conveyor adits, is estimated to take about three years.
20
Item 3. Legal Proceedings.
We are not a party to any material pending or threatened legal
proceedings.
Item 4. Mine Safety Disclosure.
Our operations at Troy are subject to health, safety and other
standards imposed under the Federal Mine Safety and Health Act of 1977 (FMSHA)
and regulations promulgated thereunder. FMSHA is administered by MSHA.
During the year ended December 31, 2014, MSHA issued nine
citations pursuant to Section 104 of FMSHA for violations of mandatory health or
safety standards that could, in the agencys opinion, significantly and
substantially affect mine safety or present a health hazard. MSHA proposed
penalties of $8,885 for the violations.
We had no mining fatalities at Troy during the year ended
December 31, 2014. MSHA did not issue any written notices pursuant to Section
104(e) of FMSHA alleging any pattern of violations of mandatory health or safety
standards or the potential for such a pattern during the year, nor did it issue
any orders pursuant to Section 104(b). There were no imminent danger orders
issued under Section 107(a) of FMSHA during the year. As of the date of this
report, we were a party to three pending appeals before the Federal Mine Health
Safety Review Commission.
PART II
Item 5. Market for Our Common Equity and Related Stockholder
Matters.
Market Information. The following table sets
forth the low and high closing prices per share for our common stock for each
quarter of 2014 and 2013 as reported on the New York Stock Exchange/Market
Division and the Toronto Stock Exchange. The prices reflect inter-dealer prices
without regard to retail mark-ups, markdowns or commissions, and do not
necessarily reflect actual transactions.
|
|
|
2014 |
|
|
2013 |
|
|
|
|
Low |
|
|
High |
|
|
Low |
|
|
High |
|
|
First Quarter |
$ |
0.73 |
|
$ |
0.98 |
|
$ |
1.75 |
|
$ |
2.76 |
|
|
Second Quarter |
$ |
0.85 |
|
$ |
1.16 |
|
$ |
0.65 |
|
$ |
2.07 |
|
|
Third Quarter |
$ |
0.99 |
|
$ |
1.39 |
|
$ |
0.65 |
|
$ |
1.46 |
|
|
Fourth Quarter |
$ |
0.81 |
|
$ |
1.25 |
|
$ |
0.60 |
|
$ |
1.27 |
|
Stockholders. We had 58 stockholders of record as
of March 30, 2015.
Dividends. We have not declared or paid any cash
or stock dividends on our common stock since inception, and do not anticipate
declaring or paying any cash or stock dividends in the foreseeable future.
Item 6. Selected Financial Data.
The table below presents our selected historical consolidated
financial data as of and for each of the five years ended December 31, 2014,
2013, 2012, 2011 and 2010. The selected historical consolidated financial data
as of and for the year ended December 31, 2014 and 2013 is derived from our
audited consolidated financial statements, which have been audited by BDO USA,
LLP, an independent registered public accounting firm. The selected consolidated
financial data for the two 21 years ended December 31, 2012 and December 31, 2011 is derived
from our audited consolidated financial statements, which have been audited by
KPMG, LLP, and the selected historical consolidated data for the year ended
December 31, 2010 is derived from our audited consolidated financial statements,
which have been audited by KPMG LLP Canada, each an independent registered
public accounting firm. The selected historical consolidated financial data set
forth below should be read in conjunction with Managements Discussion and
Analysis of Financial Condition and Results of Operations and our audited
consolidated financial statements and related notes. Our financial statements
included in this report have been prepared in accordance with accounting
principles generally accepted in the United States. Amounts are expressed in
thousands of dollars, except share and per share amounts.
21
|
|
2014 |
|
|
2013 |
|
|
2012 |
|
|
2011 |
|
|
2010 |
|
Balance Sheet Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
$ |
7,802 |
|
$ |
13,662 |
|
$ |
34,785 |
|
$ |
35,449 |
|
$ |
16,385 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
16,288 |
|
|
65,108 |
|
|
64,357 |
|
|
57,602 |
|
|
57,444 |
|
Restricted cash |
|
6,551 |
|
|
6,542 |
|
|
6,533 |
|
|
6,519 |
|
|
6,498 |
|
Other assets |
|
733 |
|
|
1,336 |
|
|
2,295 |
|
|
3,780 |
|
|
931 |
|
Total assets |
$ |
31,374 |
|
$ |
86,648 |
|
$ |
107,970 |
|
$ |
103,350 |
|
$ |
81,258 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
$ |
6,182 |
|
$ |
3,090 |
|
$ |
6,268 |
|
$ |
7,621 |
|
$ |
5,737 |
|
Long-term debt |
|
- |
|
|
364 |
|
|
1,289 |
|
|
408 |
|
|
768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclamation liability |
|
4,769 |
|
|
4,613 |
|
|
5,598 |
|
|
7,955 |
|
|
7,946 |
|
Warrant derivative |
|
- |
|
|
- |
|
|
|
|
|
|
|
|
|
|
liability |
|
|
|
|
|
|
|
93 |
|
|
1,170 |
|
|
5,876 |
|
Deferred income taxes |
|
- |
|
|
25 |
|
|
5,942 |
|
|
3,943 |
|
|
- |
|
Temporary equity |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
676 |
|
Total
liabilities |
$ |
10,951 |
|
$ |
8,092 |
|
$ |
19,190 |
|
$ |
21,097 |
|
$ |
21,003 |
|
Stockholders' equity |
|
20,423 |
|
|
78,556 |
|
|
88,780 |
|
|
82,253 |
|
|
60,255 |
|
Total liabilities and
stockholders equity |
$ |
31,374 |
|
$ |
86,648 |
|
$ |
107,970 |
|
$ |
103,350 |
|
$ |
81,258 |
|
22
|
|
2014 |
|
|
2013 |
|
|
2012 |
|
|
2011 |
|
|
2010 |
|
|
2009 |
|
Income Statement Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
6 |
|
|
73 |
|
$ |
59,211 |
|
$ |
70,111 |
|
$ |
47,004 |
|
$ |
33,092 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
- |
|
|
- |
|
|
42,541 |
|
|
42,262 |
|
|
34,385 |
|
|
32,115 |
|
Troy Mine suspension costs
|
|
4,282 |
|
|
12,141 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Depreciation and depletion |
|
110 |
|
|
32 |
|
|
2,645 |
|
|
2,519 |
|
|
2,642 |
|
|
2,686 |
|
Exploration and development
|
|
951 |
|
|
1,379 |
|
|
3,956 |
|
|
1,752 |
|
|
702 |
|
|
343 |
|
General and administrative |
|
3,137 |
|
|
3,787 |
|
|
6,781 |
|
|
7,055 |
|
|
4,044 |
|
|
2,833 |
|
Gain on change in reclamation
liability |
|
- |
|
|
(2,276 |
) |
|
(3,032 |
) |
|
(666 |
) |
|
- |
|
|
- |
|
Impairment of mineral property, plant and
equipment |
|
54,724 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Accretion of reclamation |
|
382 |
|
|
476 |
|
|
675 |
|
|
675 |
|
|
694 |
|
|
640 |
|
Total expenses |
$ |
63,586 |
|
|
15,539 |
|
$ |
53,566 |
|
$ |
53,597 |
|
$ |
42,467 |
|
$ |
38,617 |
|
Other income (expenses): |
|
1,657 |
|
|
(1,946 |
) |
|
239 |
|
|
1,487 |
|
|
(5,118 |
) |
|
(386 |
) |
Income (loss) before income Taxes |
|
(61,923 |
) |
|
(17,412 |
) |
|
5,884 |
|
|
18,001 |
|
|
(581 |
) |
|
(5,911 |
) |
Net income (loss) for the
period |
|
(61,923 |
) |
|
(11,575 |
) |
|
4,085 |
|
|
13,496 |
|
|
(614 |
) |
|
(3,673 |
) |
Retained earnings (deficit), beginning of
period |
|
(9,984 |
) |
|
1,591 |
|
|
(2,494 |
) |
|
(14,777 |
) |
|
(14,163 |
) |
|
(10,490 |
) |
Retained earnings (deficit)
|
$ |
(71,907 |
) |
|
(9,984 |
) |
$ |
1,591 |
|
$ |
(2,494 |
) |
$ |
(14,777 |
) |
$ |
(14,163 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income (loss) per share |
$ |
(1.63 |
) |
|
(0.33 |
) |
$ |
0.12 |
|
$ |
0.36 |
|
$ |
(0.02 |
) |
$ |
(0.15 |
) |
Fully diluted income (loss)
per share |
$ |
(1.63 |
) |
|
(0.33 |
) |
$ |
0.10 |
|
$ |
0.31 |
|
$ |
(0.02 |
) |
$ |
(0.15 |
) |
Weighted average number of shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
38,095,792 |
|
|
34,592,121 |
|
|
34,315,008 |
|
|
33,803,368 |
|
|
27,928,475 |
|
|
21,260,952 |
|
Fully diluted |
|
38,095,792 |
|
|
34,592,121 |
|
|
35,316,954 |
|
|
35,257,668 |
|
|
27,928,475 |
|
|
21,260,952 |
|
Dividends paid during the
period |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
We determined that our property, plant and equipment was
impaired at December 31, 2014 due to the fact that we placed Troy on care and
maintenance and have no assurance mining operations will be resumed and recorded
impairment charge of $54.7 million. The impairment charge was based on the value
of the Hecla merger proposal discussed elsewhere in this report, and was
allocated to each property, plant and equipment asset class based on the
relative carrying value of the asset on our financial statements.
Item 7. Managements Discussion and Analysis of Financial
Condition and Results of Operation.
Explanatory Note: The following discussion of our
financial condition and results of operation should be read in conjunction with
our consolidated financial statements and notes as at December 31, 2014 and 2013
and the years ended December 31, 2014 and 2013, which are set forth elsewhere in
this report and include the accounts of Revett Mining Company. Inc. (formerly
Revett Minerals, Inc.) and its wholly-owned subsidiary Revett Silver, and the
accounts of Revett Silvers wholly owned subsidiaries, Troy Mine, Inc., RC
Resources, Inc., Revett Exploration, Inc. and Revett Holdings, Inc. These financial statements have been prepared in
accordance with United States generally accepted accounting principles.
23
Overview. Our principal mining properties are
Troy and Rock Creek. Troy is an underground silver and copper mine located in
northwestern Montana. ASARCO operated the mine from 1981 to 1993, and then
placed it on care and maintenance because of low metals prices. We resumed
mining operations in late 2004 and commenced commercial production in early
2005. We operated Troy continuously until December 2012, when operations were
suspended due to unstable ground conditions in portions of the mine. As we
discuss more fully in Items 1 and 1A of this report, we developed an alternative
route to the North C Bed area during the fourth quarter of 2014 and resumed
limited mining and milling operations, but were later compelled to put Troy on
care and maintenance due to low metals prices.
Rock Creek is a large development-stage silver and copper
property located in Sanders County, Montana, approximately five miles northeast
of Noxon. We have funded our permitting activities at Rock Creek with cash flows
from Troy and, to a lesser extent, proceeds received from sales of our common
stock.
Results of Operations.
Comparison of Years Ended December
31, 2014 and 2013. We suspended underground mining and surface milling
operations at Troy in December 2012 because of unstable and unsafe ground
conditions and consequently did not mine any ore during 2013 and only resumed
limited mining and milling operations in November 2014. A comparison of our
operating results for 2014 and 2013 is therefore not meaningful. The changes in
our financial performance over these two periods are summarized below:
Revenue: During 2013 we had one
sale of concentrate from inventory. This revenue was offset by the settlement of
invoices relating to 2012 sales. During the year ended December 31, 2013, the
LME price of copper and silver averaged $3.32 per pound and $23.83 per ounce,
respectively.
Cost of Sales: Troy
suspension-related costs for 2014 were $4.3 million. In May 2013 we laid off
approximately 50% of the mine site employees in efforts to conserve cash.
Depreciation and depletion: The
majority of the plant and equipment at Troy is depreciated using the
units-of-production method. The suspension of mining operations resulted in no
depreciation expense for Troy.
Exploration and development:
This expense includes no spending for exploration spending around Troy and $1.0
million in spending for Rock Creek. The spending in 2014 is much lower than the
$1.4 million we spent in 2013 because of our cash conservation efforts during
2014.
General and administration
costs: The decrease in the corporate administration costs during 2014 is a
result of the suspension of mining activities at Troy and our resulting efforts
to conserve cash. The chief executive officers salary and director fees were
voluntarily reduced.
Change in ARO Liability. The
change in ARO liability estimate is a result of an increase in the Troy mine
life (from 2026 to 2027), which is itself due to the delays in mining at Troy.
We recorded a slight increase in our estimated ARO liability, from $4.6 million
to $4.8 million, as at December 31, 2014.
24
Impairment. As noted in Item 6
of this report, we determined that our property, plant and equipment was
impaired at December 31, 2014 due to the fact that we placed Troy on care and
maintenance and have no assurance mining operations will be resumed. The
impairment charge of $54.7 million was based on the value of the Hecla merger
proposal discussed elsewhere in this report, and was allocated to each property,
plant and equipment asset class based on the relative carrying value of the
asset on our financial statements.
Expenses pertaining to Rock Creek totaled $1.0 million during
the year ended December 31, 2014 as compared to $1.2 million in 2013, and were
comprised of legal fees of approximately $0.2 million; consulting fees of
approximately $0.7 million; and public relations and miscellaneous expenditures,
including funding of ongoing grizzly bear mitigation, of approximately $0.3
million.
Liquidity Considerations and
Going Concern.
The accompanying consolidated financial statements have been
prepared under the assumption that the Company will continue as a going concern.
The Company does not have sufficient cash to fund normal operations and meet
debt obligations for the next twelve months without deferring payments on
certain current liabilities and/or raising additional funds. The Companys
continued losses and lack of capital raise substantial doubt about the Companys
ability to continue as a going concern. Although the Company has raised some
additional capital in 2014, the Company has not raised sufficient external
financing to meet its obligations and provide access to Troy mine ore reserves.
Therefore, the Company entered into an agreement and plan of merger with Hecla
(see Note 20). Should our proposed merger with Hecla not eventuate, we will
review alternatives to source adequate financing to meet our capital spending
and debt service requirements. There is no assurance our financing efforts will
be successful under current market conditions. Our business has been materially
and adversely affected by the decline in copper and silver prices and by the
suspension of commercial mining operations at Troy. In light of this, we have
placed all of our discretionary capital and exploration spending on hold in
order to conserve cash.
At December 31, 2014, working capital was $1.6 million,
including cash of $2.9 million. During the first quarter of 2014 we sold our
available for sale securities for cash proceeds of $1.0 million and settled an
outstanding insurance claim for damaged mine equipment and received cash
proceeds of $1.9 million. In 2014, we sold 4.6 million shares of common stock
and 2.2 million warrants for cash proceeds of $3.4 million.
Although placing the Troy Mine on care and maintenance in
January 2015 significantly reduced operating costs, the costs associated with
care and maintenance activities will continue to erode our cash and working
capital.
Capital spending in 2014 totaled $6.2 million. This spending
primary related to the construction of new, 7,500 foot decline from the main
haulage route to the North C Beds, and, eventually, to the undeveloped I Bed at
Troy.
25
Capital spending in 2013 totaled $1.1 million. This spending
primary related to the construction of new 7,500 foot decline from the main
haulage route to the North C Beds, and, eventually, to the undeveloped I Bed at
Troy.
Financing Activities.
During the year ended December 31, 2014, we issued 158,500
shares of common stock upon the exercise of outstanding stock options, resulting
in cash proceeds of $79,000. During the year, we also sold 4,499,102 shares of
common stock in a private placement and received cash proceeds of $3.3 million.
During the year ended December 31, 2013, we issued 49,000
shares of common stock upon the exercise of outstanding stock options, resulting
in cash proceeds of $0.03 million, and issued 55,000 shares of common stock upon
the exercise of outstanding warrants, resulting in cash proceeds of $0.1
million.
Off-Balance Sheet Arrangements.
Royal Gold, Inc. holds a 3% gross smelter royalty on a defined
area of production from Troy and a 1% net smelter royalty on production from
Rock Creek pursuant to the terms of an amended royalty agreement dated October
13, 2009.
Tabular Disclosure of Contractual Obligations.
The following table sets forth information as of December 31, 2014
concerning our known debt obligations, royalty obligations, capital lease
obligations and reclamation obligations.
|
|
Payments
Due by Period |
|
|
|
(expressed in thousands of dollars) |
|
Contractual Obligation |
|
Total |
|
|
< 1 Year |
|
|
1 to 3 Years |
|
|
3 to 5 Years |
|
|
> 5 Years |
|
Accrued liabilities |
$ |
1,805 |
|
$ |
1,805 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
Note
payable obligations |
$ |
4,377 |
|
$ |
4,377 |
|
|
0 |
|
$ |
0 |
|
$ |
0 |
|
Operating leases |
$ |
354 |
|
$ |
354 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
Long-term reclamation costs |
$ |
12,743 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
12,743 |
|
Total contractual obligations |
$ |
19,279 |
|
$ |
6,536 |
|
$ |
0 |
|
$ |
0 |
|
$ |
12,743 |
|
Our long term debt at December 31, 2014 consisted of note
payable obligations related to the purchase of equipment used at Troy.
Proposed Transactions. As
previously reported, we announced on March 27, 2015 that on March 26, 2015 we
have entered into an agreement and plan of merger with Hecla and Heclas
wholly-owned merger subsidiary, pursuant to which, and subject to the approval
of our shareholders and the satisfaction or waiver of other conditions specified
in the agreement, the Company would merge with and into Hecla in a share
exchange transaction in which the Companys stockholders would receive 0.1622
share of Hecla common stock for each share of common stock of the Company. The
proposed transaction is described more fully in Note 20 Subsequent Events to
our consolidated financial statements appearing elsewhere in this report.
Principal Risks and Uncertainties. As is
described elsewhere in Items 1 and 1A of this report, we suspended mining
operations at Troy in December 2012 due to unstable and unsafe ground conditions
and commenced construction of the decline in November 2013 following receipt
MSHA approval. After successfully reaching the North C Beds in the
fourth quarter of 2014 and resuming limited ore production, the Company decided
on January 20, 2015 to place the Troy Mine on care and maintenance due to low
metals prices. Development work to the I Beds ceased immediately and milling
operations continued through the end of January 2015. An orderly shutdown was
completed during the month of February 2015, with the expectation that
development and operations might resume once metals prices improved.
26
As is also described elsewhere in this report, our proposed
development of Rock Creek was challenged on environmental grounds by several
regional and national environmental advocacy groups. Although we have generally
been successful in addressing most of the challenges to our operations,
including ESA claims, which were resolved in our favor in November 2011, we
cannot predict with any degree of certainty whether future challenges or
impediments will arise. Rock Creek is the more significant of our two mining
assets; continued court challenges will inevitably delay us from proceeding with
our planned development and a successful challenge could prevent us from
developing the project at all. If we are successful in defending these
challenges, we still must comply with a number of requirements and conditions as
development progresses, failing which we could be denied the ability to continue
with our proposed activities at Rock Creek. We are also subject to other
significant risks. (See the section of this report entitled Risk Factors.)
Critical Accounting Estimates. Our significant
accounting policies are presented in the notes to our consolidated financial
statements, which appear elsewhere in this report. As described in these notes,
we are required to make estimates and assumptions that affect the reported
amounts and related disclosures of assets, liabilities, revenue and expenses.
Our estimates are based on our experience and our interpretation of economic,
political, regulatory and other factors that influence our business prospects.
These estimates have a significant effect on the financial statements and actual
results may differ significantly from our estimates.
We believe the most critical estimates pertain to future metal
prices, our estimates of proven and probable reserves at Troy, the valuation of
mineral property, plant and equipment, recoverability of deferred tax assets,
and the estimate of the final reclamation and closure obligations at Troy. These
estimates required us to make assumptions that were highly uncertain at the time
the accounting estimates were made, and changes in them are reasonably likely to
occur from time to time. The major critical accounting estimates include but are
not limited to the following:
Future Metal Prices. The values of our more
significant assets and liabilities are determined principally by prevailing
metals prices and estimates. Prevailing metals prices are also a significant
determinant in the cost and carrying value of our property, plant and equipment,
inventories, future tax assets and liabilities, certain of our accounts
receivable and the fair value of hedging contracts. Metal prices have
historically been very volatile, with recent prices being near their highs for
the last decade; these prices have influenced our property, plant and equipment
carrying values and the estimates of our reserves. There is no assurance prices
will continue at these levels. Changes in metal prices may result in volatility
in the fair value of derivatives and other financial instruments, as well as
potential impairment charges on mineral property, plant and equipment and
concentrate inventories.
Embedded Financial Derivatives. Some of our
assets and liabilities may contain embedded derivatives for which no
corresponding market value may be readily determined. This includes the
estimates of future copper and silver prices in the pricing mechanism through
which we sell our copper concentrate (what we refer to as the open quotational
period). We make estimates of the fair value of these instruments using quoted
forward metal prices.
Mineral Resources and Reserves, and the Carrying Values of
Mineral Properties, Plant, and Equipment. Mineral resources
and reserves are estimated by professional geologists and engineers in
accordance with recognized industry, professional and regulatory standards.
Reserve estimates are based on future metal prices, future operating costs, mill
throughput and various technical, geological, engineering, and construction
parameters. Changes in any of these factors could cause a significant change in
the resources and reserves estimated, which, in turn, could have a material
effect on the carrying value of mineral property, plant and equipment.
27
We have completed a life of mine undiscounted cash flow
analysis of Troy based upon our most recent proven and probable ore reserves,
expected production rates and costs, and estimated revenues (which are in turn
based on estimated metal prices for copper and silver of $3.35 per pound and
$24.69 per ounce, respectively, in 2014, and $3.32 per pound and $24.69 per
ounce, respectively, for years thereafter until the end of the mine life.
However, these estimates are based on significant assumptions. While we have
analyzed external and internal data in arriving at these assumptions, and while
we believe they are reasonable, it is possible future conditions may change and
that these changes could result in different assumptions which might result in
an additional impairment of the carrying value of our mineral property, plant
and equipment.
We capitalize costs related to the acquisition of property and
mineral rights, construction of production facilities and the development of
mine infrastructure. Costs of permitting, evaluation and feasibility are
capitalized upon completion of an analysis which demonstrates the economic
viability of the mineral deposit. Drilling and related costs incurred on sites
without an existing mine and on areas outside the boundary of a known mineral
deposit that contains proven and probable reserves are accounted for as
exploration expenditures and are expensed as incurred. Drilling and related
costs incurred to define and delineate a residual minerals deposit that has not
previously been classified as a proven or probable reserve at a development
stage or production stage mine will only be capitalized when management
determines there is sufficient evidence that the expenditure will result in a
future economic benefit in the accounting period when the expenditure is made.
Diversity of practice exists among participants in the mining industry regarding
the accounting treatment of these costs. Some mining companies elect not to
capitalize drilling and related costs to convert mineral resources to reserves
at their development or productions stage properties, but, instead, treat them
as expenses.
Management evaluates whether there is sufficient geologic and
economic certainty to convert a mineral deposit into a proven or probable
reserve based upon the known geology and metallurgy, existing or planned mining
and processing facilities, and existing operating permits and environmental
programs. Prior to capitalizing such costs, management must determine whether
there is a probable future economic benefit, whether we have or can obtain the
economic benefit and control access to it, and whether the transaction or event
giving rise to the economic benefit has already occurred. Once commercial
production has commenced, these costs are amortized using the
units-of-production method based on proven and probable reserves. Production
facilities and equipment are stated at cost and are depreciated using the
straight-line or units-of-production method at rates sufficient to depreciate
the assets over their estimated useful lives, not to exceed the life of the mine
to which the assets relate. Vehicles and office equipment are stated at cost and
are depreciated using the straight-line method over estimated useful lives of
three to six years. Maintenance and repairs are charged to operations as
incurred. Betterments of a major nature are capitalized. When assets are retired
or sold, the costs and related accumulated depreciation are eliminated from the
accounts and any resulting gain or loss is reflected in the statement of
operations. The carrying value of property, plant and equipment is dependent on
the rates used for depreciation and depletion, which themselves are estimates.
Concentrate Receivables and Revenue. We sell our silver
and copper in concentrate based upon our own assays of metal content, moisture
content and the estimated dry weight of the copper-silver concentrate loaded in
rail cars. These weight and assay estimates are subject to final confirmation by
the receiving smelter and are subject to change. In addition, we record the
anticipated revenue to be received from the sale of each concentrate shipment
based upon our determination of the weight and assays of each shipment and in
accordance with the contract to which the sale relates. Preliminary payments are thus based
upon copper and silver prices that are determined prior to the date of the
provisional invoice, whereas the final price received is determined by quoted
metal prices in agreed periods subsequent to the date of the provisional
invoice. Changes in these estimates or in metal prices could result in a
significant change to the results from operations.
28
Reclamation Obligations. We have a legal obligation to
reclaim our mineral properties and have estimated the cost of these obligations
in accordance with current standards of applicable laws and regulations. These
estimates are reviewed by third party consultants and government authorities. In
arriving at these estimates, we must also estimate the timing and magnitude of
future payments for reclamation work, as well as prevailing rates of interest
during the remediation period, in order to determine its periodic accretion and
the depreciation expense. There were no material changes in our estimates of
final reclamation and remediation costs during 2014 other than inflation,
however, the end of mine life of Troy was extended in 2013, from 2020 to 2026,
and was again extended in 2014 from 2026 to 2027, which required us to change
the depreciation and accretion charges relating to our asset retirement
obligation. We cannot predict the effect of a material increase in these
estimates on our financial position.
Stock-Based Compensation Expense. We grant stock options
to employees, directors and service providers. We use the Black-Scholes option
pricing model to estimate a value for these options. This model requires
management to make estimates of the expected volatility of our common stock, the
expected term of the option to exercise, the expected future forfeiture rate,
and future interest rates. Changes in these estimates and the conditions
underlying the grants of options could cause a significant change in the
stock-based compensation expense charged in any period.
Valuation Allowances for Deferred Income Taxes. We are
required to make estimates of the valuation allowances for future income taxes.
This requires us to estimate whether we will attain certain levels of future
taxable income and thereby avail ourselves, or lose, estimated tax assets. These
estimates require us to estimate future metal prices, future operating costs and
production levels; which are themselves subject to a high degree of uncertainty.
Financial and Other Instruments. We have in the past and
may in the future, engage in hedging activities in order to protect the price of
copper and silver that we have produced or will produce in future periods. These
hedging activities are limited to less than 50% of our planned production in any
one month.
We are required by applicable accounting standards to fair
value (i.e., mark to market) the amount of the accounts receivable that has been
shipped and provisionally priced, but for which final prices have not yet been
determined. At each month end, we then adjust our revenue to account for future
prices. In order to do this, we must estimate the future prices that will
prevail when the final prices are determined. We use future contract prices in
effect as at the end of each month to estimate these prices.
Forward sales with our customer that have not been shipped are
designated as normal purchases and sales under applicable accounting standards
and are not marked to market. We had no outstanding contracts to sell copper or
silver at December 31, 2014.
Item 7A. Quantitative and Qualitative Disclosures about
Market Risk.
Our earnings and cash flow are significantly affected by
changes in the market price of copper and silver. The prices of both metals can
fluctuate widely and are influenced by numerous factors such as demand,
production levels, and world political and economic events and the strength of
the US dollar relative to other currencies. During the past eighteen years the
average annual price of copper has ranged from a low of $0.71 per pound to a
high of $4.00 per pound. Average annual silver prices over this same period have ranged from a low of
$3.95 per ounce to a high of $35.11. Should the price of copper or silver remain
depressed, mining activities at Troy may not resume and the exploration and
development of Rock Creek could be at risk.
29
A substantial portion of our cash and short-term investments
are invested in certificates of deposit or high quality government and corporate
fixed income securities, all of which are denominated in US dollars. The value
of these fixed income securities could change due to continuing uncertainties in
the financial markets. Approximately $0.8 million of our cash equivalents were
in the form of savings deposit denominated in U.S. dollars issued by a major
Canadian chartered bank at December 31, 2014.
Item 8. Financial Statements and Supplementary Data.
The consolidated balance sheet of Revett Mining Company as of
December 31, 2014 and 2013 and consolidated statements of operations and
comprehensive loss, stockholders equity and cash flows for the years ended
December 31, 2014 and 2013 included in this report have been audited by BDO USA,
LLP, Spokane, Washington, independent registered public accountants. Such
financial statements have been prepared in accordance with United States
generally accepted accounting principles.
30
Consolidated Financial Statements
(Expressed in thousands of
United States dollars)
Revett Mining Company, Inc.
Years ended December 31, 2014 and 2013
F-1
Report of Independent Registered Public Accounting Firm
Board of Directors and Shareholders
Revett Mining Company,
Inc.
Spokane Valley, WA
We have audited the accompanying consolidated balance sheets of
Revett Mining Company, Inc. (formerly Revett Minerals, Inc.) as of December 31,
2014 and 2013 and the related consolidated statements of operations and
comprehensive loss, shareholders equity, and cash flows for the years then
ended. These financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. The Company
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Companys internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial position of
Revett Mining Company, Inc. at December 31, 2014 and 2013, and the results of
its operations and its cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going concern. As
described in Note 1 to the consolidated financial statements, the Company has
suffered recurring losses from operations, and has a net capital deficiency that
raise substantial doubt about its ability to continue as a going concern.
Managements plans in regard to these matters are also described in Notes 1 and
20. The consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
/s/ BDO USA, LLP
Spokane, WA
March 27, 2015
F-2
Revett Mining Company, Inc.
Consolidated Balance
Sheets
(expressed in thousands of United States dollars except
share and per share amounts)
|
|
December 31, |
|
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
Assets |
|
Current Assets |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
2,896 |
|
$ |
7,951 |
|
Other receivables |
|
8 |
|
|
1,164 |
|
Inventories |
|
4,573 |
|
|
4,133 |
|
Prepaid expenses and deposits |
|
325 |
|
|
414 |
|
Total current assets |
|
7,802 |
|
|
13,662 |
|
Property, plant, and equipment (net) |
|
16,288 |
|
|
65,108 |
|
Restricted cash |
|
6,551 |
|
|
6,542 |
|
Available for sale securities |
|
- |
|
|
600 |
|
Other long term assets |
|
733 |
|
|
736 |
|
|
|
|
|
|
|
|
Total assets |
$ |
31,374 |
|
$ |
86,648 |
|
|
|
|
|
|
|
|
Liabilities and shareholders
equity |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Trade accounts payable |
$ |
987 |
|
$ |
954 |
|
Payroll liabilities |
|
711 |
|
|
604 |
|
Income, property and mining taxes |
|
107 |
|
|
588 |
|
Royalty payable |
|
- |
|
|
19 |
|
Current portion of capital lease obligations and
notes payable |
|
4,377 |
|
|
925 |
|
Total current liabilities |
|
6,182 |
|
|
3,090 |
|
Long-term portion of capital lease obligations and
notes payable |
|
- |
|
|
364 |
|
Reclamation liability |
|
4,769 |
|
|
4,613 |
|
Deferred income taxes |
|
- |
|
|
25 |
|
Total liabilities |
|
10,951 |
|
|
8,092 |
|
|
|
|
|
|
|
|
Commitments and contingencies (note 15) |
|
|
|
|
|
|
Shareholders equity |
|
|
|
|
|
|
|
|
Preferred stock, $0.01 par value, 25,000,000
authorized, no shares issued and outstanding |
|
- |
|
|
- |
|
|
|
|
|
|
|
|
Common stock, $0.01 par value 100,000,000
authorized, 39,273,989 and 34,596,387 shares issued and
outstanding at December 31, 2014 and 2013, respectively |
|
393 |
|
|
88,495 |
|
Additional paid in capital |
|
91,937 |
|
|
- |
|
|
|
|
|
|
|
|
Accumulated other comprehensive
income |
|
- |
|
|
45 |
|
Retained earnings (accumulated deficit) |
|
(71,907 |
) |
|
(9,984 |
) |
|
|
20,423 |
|
|
78,556 |
|
|
|
|
|
|
|
|
Total liabilities and shareholders
equity |
$ |
31,374 |
|
$ |
86,648 |
|
See accompanying notes to the consolidated financial
statements.
F-3
Revett Mining Company, Inc.
Consolidated
Statements of Operations and Comprehensive Loss
(expressed in
thousands of United States dollars except share and per share amounts)
Years Ended December 31, 2014 and 2013
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
6 |
|
$ |
73 |
|
Expenses: |
|
|
|
|
|
|
Troy Mine
suspension related costs |
|
4,282 |
|
|
12,141 |
|
Depreciation and depletion |
|
110 |
|
|
32 |
|
Exploration and
development |
|
951 |
|
|
1,379 |
|
General & administrative:
|
|
|
|
|
|
|
Stock based compensation |
|
419 |
|
|
618 |
|
Other |
|
2,718 |
|
|
3,169 |
|
Gain on change
in reclamation liability estimate |
|
- |
|
|
(2,276 |
) |
Impairment of property, plant
and equipment |
|
54,724 |
|
|
- |
|
Accretion of
reclamation liability |
|
382 |
|
|
476 |
|
|
|
63,586 |
|
|
15,539 |
|
|
|
|
|
|
|
|
Loss from operations |
|
(63,580 |
) |
|
(15,466 |
) |
|
|
|
|
|
|
|
Other income (expenses): |
|
|
|
|
|
|
Interest expense
|
|
(118 |
) |
|
(662 |
) |
Interest and other income |
|
1,346 |
|
|
29 |
|
Gain on warrant
derivatives |
|
- |
|
|
63 |
|
Gain (loss) on available for
sale securities |
|
429
|
|
|
(1,376 |
) |
Total other income (expenses) |
|
1,657 |
|
|
(1,946 |
) |
|
|
|
|
|
|
|
Net loss before income taxes
|
|
(61,923 |
) |
|
(17,412 |
) |
|
|
|
|
|
|
|
Income tax benefit |
|
|
|
|
|
|
Current income tax |
|
- |
|
|
(20 |
) |
Deferred
income tax |
|
- |
|
|
5,857 |
|
|
|
|
|
|
|
|
Net loss |
$ |
(61,923 |
) |
$ |
(11,575 |
) |
Other comprehensive income: |
|
|
|
|
|
|
Unrealized (gain) loss
on available for sale securities, net of tax |
|
(45 |
) |
|
583 |
|
|
|
|
|
|
|
|
Comprehensive loss |
$ |
(61,968 |
) |
$ |
(10,992 |
) |
|
|
|
|
|
|
|
Basic and diluted loss per
share (note 18) |
$ |
(1.63 |
) |
$ |
(0.33 |
) |
|
|
|
|
|
|
|
Weighted average number of
basic and diluted shares outstanding |
|
38,095,792 |
|
|
34,592,121 |
|
See accompanying notes to the consolidated financial
statements.
F-4
Revett Mining Company, Inc.
Consolidated
Statements of Cash Flows
(expressed in thousands of United States
dollars)
Years ended December 31, 2014 and 2013
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
Cash flows from operating
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(61,923 |
) |
$ |
(11,575 |
) |
Adjustment to reconcile net loss to net cash
used in operating activities: |
|
|
|
|
|
|
Depreciation and
depletion |
|
110 |
|
|
32 |
|
Accretion of reclamation
liability |
|
382 |
|
|
476 |
|
Deferred
financing fee amortization |
|
3 |
|
|
556 |
|
Stock based compensation |
|
419 |
|
|
618 |
|
Gain on change
in reclamation liability estimate |
|
- |
|
|
(2,276 |
) |
Gain on disposal of fixed assets
|
|
- |
|
|
(22 |
) |
Deferred income
tax benefit |
|
- |
|
|
(5,857 |
) |
Gain on warrant derivative |
|
- |
|
|
(63 |
) |
Gain on
insurance recovery for damaged equipment |
|
(785 |
) |
|
- |
|
Impairment of property, plant
and equipment |
|
54,724 |
|
|
- |
|
Accrued interest
from restricted cash |
|
(9 |
) |
|
(10 |
) |
Loss (gain) on sale of available
for sale securities |
|
(429 |
) |
|
407 |
|
Loss on
impairment of available for sale securities |
|
- |
|
|
969 |
|
Adjustment for write down of
inventory |
|
1,246 |
|
|
198 |
|
Changes in: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Concentrate
settlement receivables |
|
- |
|
|
363 |
|
Other receivables |
|
59 |
|
|
(60 |
) |
Inventories |
|
(1,686 |
) |
|
169 |
|
Prepaid expenses and deposits
|
|
114 |
|
|
436 |
|
Accounts payable
and accrued liabilities |
|
(360 |
) |
|
(3,113 |
) |
Net cash used in operating activities
|
|
(8,135 |
) |
|
(18,752 |
) |
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of short term investments
|
|
- |
|
|
9,264 |
|
Proceeds from
the sale of available for sale securities |
|
959 |
|
|
352 |
|
Proceeds from insurance recovery
|
|
1,882 |
|
|
- |
|
Proceeds from
sale of fixed assets |
|
- |
|
|
35 |
|
Purchase of plant and equipment
|
|
(6,240 |
) |
|
(1,064 |
) |
Net cash provided by (used
in) investing activities |
|
(3,399 |
) |
|
8,587 |
|
|
|
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
|
|
Proceeds from the issuance of
common stock, net |
|
3,416 |
|
|
120 |
|
Proceeds from
new debt |
|
5,000 |
|
|
- |
|
Loan fees |
|
(25 |
) |
|
- |
|
Repayment of
capital leases |
|
(1,912 |
) |
|
(990 |
) |
Net cash provided by (used in) financing
activities |
|
6,479
|
|
|
(870 |
) |
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash
equivalents |
|
(5,055 |
) |
|
(11,035 |
) |
Cash and cash equivalents,
beginning of year |
|
7,951 |
|
|
18,986 |
|
Cash and cash equivalents, end of year |
$ |
2,896 |
|
$ |
7,951 |
|
See accompanying notes to the consolidated financial
statements.
F-5
Revett Mining Company, Inc.
Consolidated
Statements of Cash Flows, continued
(expressed in thousands of
United States dollars)
Years ended December 31,
Supplementary cash flow information: |
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
Cash paid
for interest |
$ |
113 |
|
$ |
57 |
|
Cash paid for income
taxes |
|
- |
|
|
192 |
|
|
|
|
|
|
|
|
Non cash transactions: |
|
|
|
|
|
|
Other
receivable for insurance recovery on damaged equipment |
|
- |
|
|
1,097 |
|
See accompanying notes to the consolidated financial
statements.
F-6
Revett Mining Company, Inc.
Consolidated
Statements of Shareholders Equity
(expressed in thousands of
United States dollars except for number of shares)
|
|
Common Stock |
|
|
|
|
|
Accumulated |
|
|
Retained |
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
Other |
|
|
Earnings |
|
|
Total |
|
|
|
|
|
|
|
|
|
Paid in |
|
|
Comprehensive |
|
|
(Accumulated |
|
|
Shareholders |
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Income (Loss) |
|
|
Deficit) |
|
|
Equity |
|
Balance, January 1, 2013 |
|
34,492,387 |
|
$ |
87,727 |
|
|
- |
|
$ |
(538 |
) |
$ |
1,591 |
|
$ |
88,780 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue of shares for exercise of options |
|
49,000 |
|
|
25 |
|
|
|
|
|
- |
|
|
- |
|
|
25 |
|
Issue of shares for exercise of warrants |
|
55,000 |
|
|
125 |
|
|
|
|
|
- |
|
|
- |
|
|
125 |
|
Unrealized loss on marketable securities,
net of tax |
|
- |
|
|
- |
|
|
|
|
|
583 |
|
|
- |
|
|
583 |
|
Stock-based compensation on options granted |
|
- |
|
|
618 |
|
|
|
|
|
- |
|
|
- |
|
|
618 |
|
Net loss for the year |
|
- |
|
|
- |
|
|
|
|
|
- |
|
|
(11,575 |
) |
|
(11,575 |
) |
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2013 |
|
34,596,387 |
|
|
88,495 |
|
|
|
|
|
45 |
|
|
(9,984 |
) |
|
78,556 |
|
Reclassification due to change in par value of common
shares |
|
|
|
|
(88,149 |
) |
|
88,149 |
|
|
- |
|
|
- |
|
|
- |
|
Issue of shares for exercise of options |
|
158,500 |
|
|
2 |
|
|
77 |
|
|
- |
|
|
- |
|
|
79 |
|
Issue of shares |
|
4,499,102 |
|
|
45 |
|
|
3,292 |
|
|
- |
|
|
- |
|
|
3,337 |
|
Issue of shares for compensation |
|
20,000 |
|
|
- |
|
|
16 |
|
|
- |
|
|
- |
|
|
16 |
|
Reclassification of gain on sale of marketable securities,
net of tax |
|
- |
|
|
- |
|
|
- |
|
|
(45 |
) |
|
- |
|
|
(45 |
) |
Stock-based compensation on options granted |
|
- |
|
|
- |
|
|
403 |
|
|
- |
|
|
- |
|
|
403 |
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Net loss for the year |
|
- |
|
|
- |
|
|
|
|
|
- |
|
|
(61,923 |
) |
|
(61,923 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2014 |
|
39,273,989 |
|
$ |
393 |
|
$ |
91,937 |
|
$ |
- |
|
$ |
(71,907 |
) |
$ |
20,423 |
|
See accompanying notes to the consolidated financial
statements.
F-7
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Years ended December 31, 2014 and 2013
(expressed in thousands of United States dollars unless otherwise
stated)
1. Nature of operations and
Liquidity
Revett Mining Company, Inc. (Company)
(formerly known as Revett Minerals Inc.) was incorporated in Canada in August
2004 to acquire Revett Silver Company and undertake a public offering of its
common shares, transactions that were completed in February 2005. Revett Silver
Company, a Montana corporation, was organized in April 1999 to acquire the Troy
mine (Troy) and the Rock Creek project (Rock Creek) from ASARCO Incorporated
and Kennecott Montana Company, transactions that were completed in October 1999
and February 2000. Revett Mining Company changed its jurisdiction of
incorporation (from Canada to Delaware) and its name (from Revett Minerals to
Revett Mining Company) on February 18, 2014, following approval by shareholders
at a special meeting held on January 24, 2014. The Company conducts business
through four Montana corporations, all subsidiaries of its wholly-owned Revett
Silver Company subsidiary: Troy Mine, Inc., RC Resources Inc., Revett
Exploration, Inc. and Revett Holdings, Inc.
Troy is an underground silver and
copper mine located in northwestern Montana. ASARCO operated the mine from 1981
to 1993, and then placed it on care and maintenance because of low metals
prices. We restarted mining operations in late 2004 and commenced commercial
production in early 2005. We operated Troy continuously until December 2012,
when operations were suspended due to unstable ground conditions in portions of
the mine. After an unsuccessful attempt to find an alternative route to our
reserve mining areas, a decision was made to construct a new decline from the
main haulage route to the North C Beds, giving access to the A and C Beds, and
then continue to the undeveloped I Bed mining areas. After successfully reaching
the North C Beds in the fourth quarter of 2014 and resuming limited ore
production, the Company decided, due to low metal prices, to place the Troy Mine
on care and maintenance. Development work to the I Beds ceased and the
milling operations continued through the end of January 2015. An orderly
shutdown took place during the month of February 2015 with the expectation
that development and operations may resume in a more favorable metals price
environment.
Liquidity Considerations and
Going Concern
The accompanying consolidated financial statements have been prepared under the assumption that the Company will continue as a going concern. The Company does not have sufficient cash to fund normal operations and meet debt obligations for the next twelve months without deferring payments on certain current liabilities and/or raising additional funds. The Company’s continued losses and lack of capital raise substantial doubt about the Company’s ability to continue as a going concern. Although the Company has raised some additional capital in 2014 (See Note 11), the Company has not raised sufficient external financing to meet its obligations and provide access to Troy mine ore reserves. On March 26, 2015, the Company entered into an agreement and plan of merger with Hecla Mining Company (“Hecla”), pursuant to which, and subject to the approval of the Company’s shareholders and the satisfaction of other conditions specified in the agreement, the Company would merge with and into Hecla(See Note 20 – Subsequent events). If our proposed merger with Hecla is not completed, we will necessarily have to seek additional capital or consider other alternatives, which could include liquidating some or all of our assets in order to fund our debt and capital spending requirements. There is no assurance our financing efforts will be successful under current market conditions. Our business has been materially and adversely affected by the decline in copper and silver prices and by the suspension of commercial mining operations at Troy.
F-8
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Years ended December 31, 2014 and 2013
(expressed in thousands of United States dollars unless otherwise
stated)
Since the Troy mine has been placed
into care and maintenance there is no assurance that the mine will resume
production and therefore, the Company determined that there was impairment of
its property, plant and equipment as of December 31, 2014 (see Note 5).
The Companys earnings and cash flows
are subject to copper and silver price volatility. In addition, the Companys
continuing operations in the long-term and the underlying value and
recoverability of the Rock Creek property are dependent upon the existence of
economically recoverable mineral reserves, obtaining the necessary operating
permits for the Rock Creek property and future profitable production or
sufficient proceeds from the sale of the Rock Creek property.
2. Changes affecting the 2014
consolidated financial statements and future accounting changes:
In May 2014, the Financial Accounting
Standards Board (FASB) issued Accounting Standards Update No. 2014-09, Revenue
from Contracts with Customers (ASU 2014-09), which supersedes nearly all
existing revenue recognition guidance under U.S. GAAP. The core principle of ASU
2014-09 is to recognize revenues when promised goods or services are transferred
to customers in an amount that reflects the consideration to which an entity
expects to be entitled for those goods or services. ASU 2014-09 defines a five
step process to achieve this core principle and, in doing so, more judgment and
estimates may be required within the revenue recognition process than are
required under existing U.S. GAAP.
The standard is effective for annual
periods beginning after December 15, 2016, and interim periods therein, using
either of the following transition methods: (i) a full retrospective approach
reflecting the application of the standard in each prior reporting period with
the option to elect certain practical expedients, or (ii) a retrospective
approach with the cumulative effect of initially adopting ASU 2014-09 recognized
at the date of adoption (which includes additional footnote disclosures). We are
currently evaluating the impact of our pending adoption of ASU 2014-09 on our
consolidated financial statements and have not yet determined the method by
which we will adopt the standard in 2017.
In August 2014, the FASB issued ASU
2014-15, Disclosure of Uncertainties about an Entitys Ability to Continue as a
Going Concern. ASU 2014-15 introduces an explicit requirement for management to
assess and provide certain disclosures if there is substantial doubt about an
entitys ability to continue as a going concern. ASU 2014-15 is effective for
the annual period ending after December 15, 2016. Early adoption is permitted.
The Company expects to adopt this guidance when effective, and upon adoption,
will evaluate going concern based on this guidance.
3. Significant accounting policies
(a) Basis of presentation:
The consolidated financial statements
of the Company have been prepared in accordance with accounting principles
generally accepted in the United States of America (U. S. GAAP) and include
the accounts of the Companys wholly-owned subsidiary, Revett Silver, and Revett Silvers wholly owned
subsidiaries. All inter-company balances and transactions have been eliminated
on consolidation.
F-9
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Years ended December 31, 2014 and 2013
(expressed in thousands of United States dollars unless otherwise
stated)
(b) Use of estimates:
The preparation of financial statements
requires management to make estimates and assumptions about future events that
affect the amounts reported in the financial statements and accompanying notes
and the disclosure of contingent assets and liabilities at the date of the
financial statements. Significant areas requiring the use of estimates include
the recoverability of mineral property, plant, and equipment, the determination
of the reclamation, assumptions used in determining the fair value of
stock-based compensation, determination of valuation allowances for
recoverability of income tax assets, measurement of concentrate inventory,
expected economic lives and rates for depreciation, depletion, and amortization,
the fair value of certain financial instruments and the estimates of mineral
reserves and mine life. Actual results may differ from these estimates.
(c) Cash and cash equivalents:
Cash and cash equivalents consist of
funds deposited with various financial institutions in accordance with our cash
management policy and all short-term money market instruments which, on
acquisition, have an original maturity of three months or less. The Company's
cash and cash equivalents are not subject to any restrictions.
(d) Short-term investments and
available for sale securities:
The Company determines the appropriate
classification of investments at the time of purchase and re-evaluates such
determinations at each reporting date. Marketable equity securities are
categorized as available for sale and carried at fair market value with changes
recorded in accumulated other comprehensive income (loss).
Realized gains and losses on the sale
of securities are recognized on a specific identification basis. Unrealized
gains and losses are included as a component of accumulated other comprehensive
income (loss), unless an other than temporary impairment in value has occurred,
in which case such accumulated loss would be charged to current period net
income (loss). Unrealized gains and losses originally included in accumulated
other comprehensive income are reclassified to current period net income (loss)
when the sale or determination of other than temporary impairment of securities
occurs.
(e) Revenue recognition:
Revenue is recognized when persuasive
evidence of an arrangement exists, delivery has occurred and no obligations
remain, collection is reasonably assured, and price is reasonably determinable.
Copper and silver concentrates are sold under pricing arrangements where final
prices are determined by quoted metal prices in periods subsequent to the date
of sale. Revenues are recorded at the time of sale based on forward prices for
the expected date of final settlement and are re-valued at each period end.
Therefore, revenue from the sale of metals in concentrate are subject to
mark-to-market adjustments and adjustment upon final settlement of estimated
metal prices, weights, and assays. Adjustments to revenue for metal prices are
recorded monthly and other adjustments are recorded on final settlement. The
Company establishes a provision for losses on accounts receivable if it
becomes probable it will not collect all or part of the outstanding balance. The
Company has reviewed collectability of the receivable balance and concluded that
no reserve for uncollectable receivables was necessary at December 31, 2014. The
Companys receivables from its one customer have had no history of
un-collectability.
F-10
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Years ended December 31, 2014 and 2013
(expressed in thousands of United States dollars unless otherwise
stated)
(f) Stock-based compensation:
The Company has an equity incentive
plan which is described in Note 11. The Company estimates the fair value of
stock option grants using the Black-Scholes option pricing model. Compensation
costs related to stock options are included in administrative and general
expenses.
(g) Loss per share:
Basic loss per common share is
calculated using the weighted average number of common shares issued and
outstanding during the year. Diluted loss per common share is calculated using
the treasury stock method, which assumes that the proceeds to be received on
exercise of outstanding stock options and warrants are used to repurchase shares
of the Company at the average market price of the common shares for the year.
Stock options and warrants are included in the calculation of diluted earnings
per common share only if earnings are positive and to the extent the market
price of the common shares exceeds the exercise price of the stock options and
warrants.
(h) Foreign currency translation:
The Companys functional currency for
all subsidiaries is the United States dollar. Transactions and account balances
originally stated in currencies other than the United States dollar have been
translated into United States dollars as follows:
|
|
Revenue and expense items at the
rate of exchange in effect on the dates they occur. |
|
|
Non-monetary assets and liabilities at historical
exchange rates, unless such items are carried at market, in which case
they are translated at the exchange rate in effect on the balance sheet
date. |
|
|
Monetary assets and liabilities
at the exchange rate in effect at the balance sheet date.
|
Transaction gains and losses are
recorded in the statement of operations in the period in which they occur.
(i) Inventories:
Material and supplies are valued at the
lower of average cost or market. Stockpiled ore and work-in-process inventory
are valued at the lower of the average production cost or net realizable value
after an allowance for additional processing costs. Finished goods inventory,
which consists of copper and silver concentrate available for sale, is valued at
the lower of the average production cost or net realizable value. Production
costs include the cost of raw materials, direct labor, mine site overhead
expenses, and depreciation and depletion of mineral property, plant, and
equipment.
F-11
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Years ended December 31, 2014 and 2013
(expressed in thousands of United States dollars unless otherwise
stated)
(j) Mineral property, plant and
equipment:
Exploration costs are expensed as
incurred. Costs related to the acquisition of property and mineral rights,
construction of production facilities, and the development of mine
infrastructure are capitalized. Costs of permitting, evaluation, and feasibility
are only capitalized upon completion of an analysis which demonstrates the
economic viability of the mineral deposit. Specifically, drilling and related
costs incurred on sites without an existing mine and on areas outside the
boundary of a known mineral deposit that contains proven and probable reserves
are exploration expenditures and are expensed as incurred. Drilling and related
costs incurred to define and delineate a residual mineral deposit that has not
previously been classified as a proven or probable reserve at a development
stage or production stage mine will only be capitalized when management
determines there is sufficient evidence that the expenditure will result in a
future economic benefit to the Company when the expenditure is made.
Management evaluates whether or not
there is sufficient geologic and economic certainty of being able to convert a
mineral deposit into a proven or probable reserve at a development stage
property, based upon the known geology and metallurgy, existing or planned
mining and processing facilities, and existing operating permits and
environmental programs. Costs are only capitalized when the following conditions
have been met: (i) there is a probable future economic benefit to the
Company; (ii) the Company has or can obtain the economic benefit and
control access to it; and (iii) the transaction or event giving rise to
the economic benefit has already occurred. Once commercial production has
commenced, these costs are amortized using the units-of-production method based
on proven and probable reserves. Production facilities and equipment are stated
at cost and are depreciated using the units-of-production method at rates
sufficient to depreciate the assets over their estimated useful lives, not to
exceed the life of the mine to which the assets relate. Vehicles and office
equipment are stated at cost and are depreciated using the straight-line method
over estimated useful lives of three to six years. Maintenance and repairs are
charged to operations as incurred.
(k) Impairment of long-lived assets:
The Company reviews and evaluates its
long-lived assets for impairment when events or changes in circumstances
indicate that the related carrying amounts may not be recoverable.
Recoverability of assets to be held and used is measured by a comparison of the
carrying amount of an asset to its estimated undiscounted future cash flows
expected to be generated by the asset. If the carrying amount exceeds the
estimated undiscounted cash flows, an impairment loss is recognized based on the
difference between the estimated fair value of the asset and its carrying value.
Managements estimates are subject to
risks and uncertainties of changes affecting the recoverability of the Companys
investment in its mineral property, plant, equipment, and mine development.
Management's estimates of these factors are based on expected future conditions.
Nonetheless, it is reasonably possible that in the near term, changes that would
adversely affect management's estimate of net cash flows expected to be
generated from its properties could occur. At December 31, 2014 the Company
determined that an impairment write down of the long-lived assets was required
(See Note 5).
F-12
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Years ended December 31, 2014 and 2013
(expressed in thousands of United States dollars unless otherwise
stated)
(l) Reclamation and remediation:
The Company's mining and exploration
activities are subject to various laws and regulations governing the protection
of the environment. The Company recognizes the fair value of future reclamation
and remediation as a liability in the period in which it incurs a legal
obligation associated with the retirement of a tangible long-lived asset that
results from the acquisition, construction, development, and/or normal use of
the asset, if a reasonable estimate of fair value can be made. The liability is
measured initially at fair value and the resulting cost capitalized into the
carrying value of the related assets. In subsequent periods, the liability is
adjusted for accretion of the discount and any change in the amount or timing of
the underlying cash flows. The asset retirement cost capitalized to the related
asset is depreciated over the remaining life of the asset.
It is reasonably possible that the
ultimate cost of remediation and reclamation could change in the future due to
uncertainties associated with defining the nature and extent of environmental
contamination, the application of laws and regulations by regulatory authorities
and changes in remediation technology. The Company continually reviews its
accrued liabilities as evidence becomes available indicating that its
remediation and reclamation obligations may have changed. Any such increases in
costs could materially impact the future amounts charged to operations for
reclamation and remediation obligations and are accounted for as a change in
estimate.
(m) Income taxes:
The Company recognizes provision for
income taxes based on the asset and liability method. The Company recognizes
deferred income tax assets and liabilities and the expected income tax
consequences of events that have been recognized in its financial statements.
Deferred income tax assets and liabilities are determined based on the temporary
differences between the financial statement carrying amounts and the tax basis
of assets and liabilities using enacted tax rates in effect in the periods in
which the temporary differences are expected to reverse. The effect on deferred
income tax assets and liabilities of a change in tax rates is recognized in
operations in the period that includes the date of enactment. The Company
records a valuation allowance against any portion of those deferred income tax
assets that management believes will not be realized.
(n) Hedging instruments:
The Company may utilize derivative
financial instruments to reduce cash flow risk relating to copper and silver
sales.
The Company recognizes derivative
financial instruments on a mark-to-market basis with changes in fair value
recognized in revenues for the period. Contracts designated as held for normal
purchase and sale are not accounted for as derivatives and the effect of these
contracts are accounted for only in the period of settlement.
(o) Other comprehensive income:
Other Comprehensive income (loss)
includes all changes in equity from non-owner sources. All the activity in other
comprehensive income (loss) relates to gains and losses on available for sale
securities.
F-13
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Years ended December 31, 2014 and 2013
(expressed in thousands of United States dollars unless otherwise
stated)
4. Inventory
The major components of the Companys
inventory accounts are as follows as of December 31:
|
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
Concentrate inventory |
$ |
1,248 |
|
$ |
530 |
|
|
Material and supplies |
|
3,325
|
|
|
3,603
|
|
|
|
$ |
4,573 |
|
$ |
4,133 |
|
The Company recognized a loss of $1.2
million and $0.2 million, respectively, during the years ended December 31, 2014
and 2013 due to the decline in market value of concentrate inventory.
5. Mineral Property, Plant,
Equipment, and Mine Development
The major components of the Companys
mineral property, plant, and equipment accounts as of December 31 are as
follows:
|
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
Troy: |
|
|
|
|
|
|
|
Mineral reserves and
development costs |
$ |
2,460 |
|
$ |
18,322 |
|
|
Plant and equipment |
|
2,320 |
|
|
13,931 |
|
|
Construction in progress |
|
1,595 |
|
|
808 |
|
|
Buildings and structures |
|
910
|
|
|
5,613
|
|
|
|
|
7,285 |
|
|
38,674 |
|
|
Rock Creek: |
|
|
|
|
|
|
|
Mineral properties |
|
8,022 |
|
|
34,976 |
|
|
|
|
|
|
|
|
|
|
Other, corporate |
|
953 |
|
|
4,330 |
|
|
Other, mineral properties |
|
28
|
|
|
118
|
|
|
|
|
16,288 |
|
|
78,098 |
|
|
Accumulated depreciation and depletion: |
|
|
|
|
|
|
|
Troy property acquisition and
development costs |
|
- |
|
|
(7,332 |
) |
|
Troy plant and equipment |
|
- |
|
|
(3,861 |
) |
|
Troy buildings and structures
|
|
- |
|
|
(1,630 |
) |
|
|
|
- |
|
|
(12,823 |
) |
|
Other corporate assets |
|
- |
|
|
(167 |
) |
|
|
|
- |
|
|
(12,990 |
) |
|
|
$ |
16,288 |
|
$ |
65,108 |
|
Due to the Troy mine being placed on
care and maintenance and with no assurance that the mine will resume production,
the Company determined that there was an impairment of property, plant and
equipment as of December 31, 2014. The estimated fair value of the long-lived
assets was determined using a market approach based on an accepted offer to sell
the Company for $20.4 million (See Note 20 Subsequent events). The impairment
charge of $54.7 million was allocated to each long-lived asset
class on a relative carrying value basis as per Accounting Standards
Codification (ASC) 360-10. This impairment has resulted in a new cost basis
for the property plant and equipment and future depreciation will be based on
this carrying value.
F-14
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Years ended December 31, 2014 and 2013
(expressed in thousands of United States dollars unless otherwise
stated)
During the first ten months of 2014 and
all of 2013, there was no depreciation and depletion expense associated with the
Troy operations because there was no production. In late 2014 the Company
resumed limited mill production resulting in some depreciation in 2014. The net
book value of assets under capital leases at December 31, 2014 and 2013 was nil
and $2.1 million, respectively. During the years ended December 31, 2014 and
2013, the Company capitalized labor, supplies, and construction costs relating
to the development of the I-Bed section of the Troy Mine.
During 2013, certain equipment at the
Troy Mine with a net book value of $1.1 million was damaged and deemed unusable.
Included in Other Receivables at December 31, 2013 is $1.1 million which is the
minimum amount expected to be recovered from our insurance carriers. The Company
received $1.9 million in 2014 from the insurance carriers.
Included in other corporate assets is
Revett Holdings Inc., a wholly owned subsidiary of Revett Silver Company,
mitigation lands with a carrying value of $0.8 million ($3.6 million less
impairment adjustment of $2.8 million). This land and other land not essential
to our mining operations are designated as grizzly bear habitat mitigation land.
The property costs for Rock Creek will be amortized when the property is placed
into production, or written off if Rock Creek cannot be developed.
6. Available for sale
securities
Available for sale securities are
comprised of publically traded common stocks which have been valued using quoted
market prices in active markets. The following table summarizes the Companys
available for sale securities at December 31:
|
|
2013 |
|
|
|
|
|
Cost |
$ |
1,499 |
|
Impairment charge |
|
(969 |
) |
Unrealized gain |
|
70 |
|
Fair value |
$ |
600 |
|
During the year ended December 31,
2014, the Company sold all of its available for sale equity securities for
approximately $1.0 million, and recognized a gain of $0.4 million. During the
year ended December 31, 2013, the Company sold a portion of its available for
sale equity securities for gross proceeds of approximately $0.4 million and
recognized a loss of $0.4 million. In addition, the Company recognized an
impairment charge of $1.0 million during the 2013.
7. Warrant derivative liability
Some of the Companys issued and
outstanding common share purchase warrants had exercise prices denominated in a
foreign currency (Canadian dollar). These warrants were required to be treated
as a derivative liability as the amount of cash the Company was to receive on
exercise of the warrants varied depending on the
exchange rate. These warrants were classified as a derivative liability and
recognized at fair value. Changes in the fair value of these warrants were
recognized in earnings until the warrants were exercised or expired. The Company
recognized a gain of $63 thousand from the change in fair value of the warrants
for the year ended December 31, 2013.
F-15
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Years ended December 31, 2014 and 2013
(expressed in thousands of United States dollars unless otherwise
stated)
During the year ended December 31,
2013, warrant holders exercised 55,000 warrants for proceeds to the Company of
$0.1 million. In conjunction with this exercise, the fair value of these
warrants on the date of the exercise of $0.1 million was reclassified to common
stock. The remainder of the unexercised warrants expired on August 24, 2013.
The following table presents the
reconciliation of the fair value of the warrants for the year ended December 31,
2013:
|
|
2013 |
|
|
|
|
|
Balance, beginning of year |
$ |
93 |
|
Gain on warrant derivatives |
|
(63 |
) |
Warrants exercised |
|
(30 |
) |
Balance, end of year |
$ |
- |
|
8. Restricted cash and other assets
On March 29, 2005, the Company
purchased from a North American insurance company an environmental risk transfer
program (the ERTP). The total spending for the ERTP was $8.4 million. Of this
$8.4 million paid, $6.5 million was deposited in an interest-bearing account
with the insurer (the Commutation Account). The Commutation Account principal
plus interest earned are reserved exclusively to pay the Company's existing
reclamation and mine closure liabilities at Troy. If the costs of reclaiming
Troy are less than the value of the Commutation Account at that time, the
Company will be entitled to a refund of the amount of the trust fund not
expended. If the reclamation costs exceed the value of the Commutation Account,
the insurance company will fund the excess up to a maximum limit of $16.8
million of total expenditures (including the amount funded by the Commutation
Account). The policy expires in 2020 and the Company has not recorded a
receivable related to the ERTP since it is not probable that any amounts will be
realized from the insurance company (other than the amount in the Commutation
Account) prior to the expiration of the policy. At December 31, 2014 and 2013,
the Commutation Account balance was $6.5 million.
The remaining $1.9 million paid
comprises premiums paid to the insurer and Montana state taxes on the ERTP
transaction. This remaining amount is being amortized over the life of the Troy
Mine on a units-of-production basis. At December 31, 2014, the balance for the
prepaid insurance was $0.7 million, which is included in long term assets.
F-16
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Years ended December 31, 2014 and 2013
(expressed in thousands of United States dollars unless otherwise
stated)
9. Debt and capital lease
obligations
At December 31, 2014 and 2013, the
balance of the Companys long-term debt and capital lease obligations were as
follows:
|
|
|
2014 |
|
|
2013 |
|
|
Capital leases and note
payable |
$ |
4,377 |
|
$ |
1,289 |
|
|
Less current portion |
|
(4,377 |
) |
|
(925 |
) |
|
Long term portion |
$ |
- |
|
$ |
364 |
|
(a) Capital leases and note
payable:
The Company entered into a new note
payable in August 2014. The amount borrowed was $5 million with a 30 month term
and a 6.25% interest rate. Monthly principal and interest payments are $0.2
million ($2.2 million annually). The note is collateralized by certain equipment
at the Troy Mine. The Company used a portion of the proceeds to pay off the two
remaining capital leases which principal balances were approximately $0.4
million. The total balance is recorded as current since the Company does not
anticipate being able to pay the amounts due in 2015 and therefore, will be in
default on the note.
(b) Revolving credit facility:
On December 10, 2011, the Company
entered into a revolving credit agreement with Societe Generale. No funds were
drawn under the facility. In August 2014, the Company and Societe Generale
mutually agreed to terminate this credit agreement. During the three months
ended March 31, 2013, the Company expensed the remaining unamortized deferred
loan fee balance of $0.6 million, which is included in interest expense.
10. Reclamation and remediation
liability
The Companys mining properties are
subject to various federal and state laws and regulations governing the
protection of the environment. These laws and regulations are continually
changing and are generally becoming more restrictive. The Company believes its
operations are in compliance with all applicable laws and regulations.
The Company has recorded a reclamation
liability for the estimated costs of reclaiming Troy. The Montana Department of
Environmental Quality (DEQ) looks to the Company as primary obligor of the
reclamation liabilities, and required the Company to post a reclamation bond in
the amount of $12.9 million. The Company has purchased an environmental risk
transfer program which will fund the expected reclamation and remediation
liability at Troy and also provides cash collateral of $6.5 million as security
to the DEQ for the required reclamation bond (Note 8).
F-17
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Years ended December 31, 2014 and 2013
(expressed in thousands of United States dollars unless otherwise
stated)
Changes in the reclamation liability
for the years ended December 31, 2014 and 2013 are as follows:
|
|
|
2014
|
|
|
2013
|
|
|
Reclamation and remediation
liability, beginning of year |
$ |
4,613 |
|
$ |
5,598 |
|
|
Reduction in present value of liability due
to mine life extension and change in estimated costs, net |
|
(226 |
) |
|
(1,461 |
) |
|
Accretion expense |
|
382 |
|
|
476 |
|
|
Reclamation and remediation liability, end of
year |
$ |
4,769 |
|
$ |
4,613 |
|
In 2013, the estimated end of the
operating life of Troy was extended from 2020 to 2026, as a result, the increase
in mineral reserves resulted in an overall decrease of the reclamation and
remediation liability for 2013. In 2014, the estimated end of the operating life
of Troy was extended from 2026 to 2027. The total undiscounted amount, without
consideration of inflation, of the estimated future expenditures required to
settle the environmental remediation obligation at December 31, 2014 was $8.5
million. The environmental remediation expenditures are expected to start
beginning in 2028. Without consideration of inflation, the Company discounted
the obligation using the historical discount rate at the time the reclamation
liability was established of 8.5%. The incremental increase in the liability as
a result of additional inflation cost due to increase in mine life was added as
new layers in 2014 and 2013, and discounted at the Companys current
credit-adjusted risk-free rate of 7.25% for both layers, respectively. Other
assumptions used by management to determine the carrying amount of the asset
retirement obligation are: labor costs based on current market place wages
required to hire contractors to carry out reclamation activities; market risk
premium for unforeseeable circumstances; and the rate of inflation, over the
expected years to settlement.
11. Share Capital
Common stock:
During the first quarter 2014, the
Company shareholders approved a change of jurisdiction of incorporation from
Canada to the United States (the Domestication). As a result, the Company
became Revett Mining Company, Inc., a Delaware corporation. As a result of this
change, a par value of $0.01 was established for shares of common stock which
previously had no par value. The Company has one class of $0.01 par value common
stock of which 100,000,000 are authorized for issue. The holders of common stock
are entitled to receive dividends without restriction when and if declared by
the board of directors. Holders of the Companys common stock are not entitled
to preemptive rights to acquire additional shares of common stock and do not
have cumulative voting rights.
During the year ended December 31,
2014, the Company issued 158,500 common shares on exercise of stock options for
cash proceeds of $79 thousand, issued 4,499,102 common shares on sale of common
shares through a private placement for cash proceeds of $3.3 million and issued
20,000 common shares for compensation with a fair value of $16 thousand.
During the year ended December 31,
2013, the Company issued 49,000 common shares on exercise of stock options for
cash proceeds of $0.03 million, and issued 55,000 common shares on exercise of
warrants for cash proceeds of $0.1 million.
F-18
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Years ended December 31, 2014 and 2013
(expressed in thousands of United States dollars unless otherwise
stated)
Preferred Stock:
The Company is authorized to issue an
unlimited number of no par preferred stock. The Companys Board of Directors is
authorized to create any series and, in connection with the creation of each
series, to fix by resolution the number of shares of each series, and the
designations, powers, preferences, and rights; including liquidation, dividends,
conversion and voting rights, as they may determine. At December 31, 2014 and
2013, no preferred stock was issued or outstanding.
Stock options:
The Company has an Equity Incentive
Plan (the Plan), the purpose of which is to enable the Company to attract and
retain employees and to provide a means of compensating those employees,
directors, officers and other individuals or entities integral to the Company's
success. The Plan is administered by the Companys Board of Directors.
The Plan requires the Company to
reserve and have available for issue, 6,500,000 common shares, less that number
of common shares reserved for issuance pursuant to stock options granted. The
aggregate number of common shares that may be issued to any holder or awarded to
any grantee under the Plan may not exceed 5% of the outstanding common shares.
Vesting of options is at the discretion of the Board at the time the options are
granted.
The Plan authorizes the Company to
reserve and have available for issue 1,930,039 shares of common stock as of
December 31, 2014 and 3,076,500 options are issued and outstanding. As of
December 31, 2014, the intrinsic value of options outstanding and exercisable
was $ nil. As of December 31, 2014 and 2013, there was no unrecognized
compensation cost related to unvested stock options.
As of December 31, 2014, the following
stock options were outstanding:
Options |
|
Options |
|
|
Exercise |
|
Expiration |
Granted |
|
Exercisable |
|
|
Price |
|
Date |
|
|
|
|
|
|
|
|
183,000 |
|
183,000 |
|
|
2.15 |
|
March 30, 2015
|
10,000 |
|
10,000 |
|
|
1.17 |
|
September 6, 2015 |
7,500 |
|
7,500 |
|
|
2.16 |
|
September 22,
2015 |
6,500 |
|
6,500 |
|
|
4.98 |
|
September 22, 2015 |
7,000 |
|
7,000 |
|
|
4.18 |
|
September 22,
2015 |
25,000 |
|
25,000 |
|
|
0.79 |
|
September 22, 2015 |
20,000 |
|
20,000 |
|
|
2.50 |
|
November 1, 2015
|
2,500 |
|
2,500 |
|
|
5.93 |
|
September 6, 2016 |
20,000 |
|
20,000 |
|
|
1.17 |
|
September 6, 2016
|
470,500 |
|
470,500 |
|
|
4.98 |
|
March 21, 2016 |
15,000 |
|
15,000 |
|
|
1.26 |
|
August 26, 2016
|
60,000 |
|
60,000 |
|
|
0.79 |
|
March 29, 2017 |
596,500 |
|
596,500 |
|
|
4.18 |
|
April 1, 2017
|
F-19
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Years ended December 31, 2014 and 2013
(expressed in thousands of United States dollars unless otherwise
stated)
20,000 |
|
20,000 |
|
|
|
3.77 |
|
May 3, 2017
|
610,500 |
|
610,500 |
|
|
|
2.16 |
|
March 21, 2018 |
957,500 |
|
957,500 |
|
|
|
0.79 |
|
March 29, 2019
|
30,000 |
|
30,000 |
|
|
|
0.77 |
|
May 29, 2019 |
20,000 |
|
20,000 |
|
|
|
1.00 |
|
August 19, 2019
|
15,000 |
|
15,000 |
|
|
|
1.20
|
|
August 19, 2019 |
3,076,500 |
|
3,076,500 |
|
|
$ |
2.50 |
|
|
The summary of stock options granted
and outstanding is as follows:
|
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
Weighted |
|
|
|
|
|
Weighted |
|
|
|
|
|
|
|
average |
|
|
|
|
|
average |
|
|
|
|
Number |
|
|
exercise |
|
|
Number |
|
|
exercise |
|
|
|
|
of
shares |
|
|
price |
|
|
of
shares |
|
|
price |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding, beginning of year |
|
2,511,500 |
|
$ |
3.28 |
|
|
2,452,000 |
|
$ |
3.86 |
|
|
Granted |
|
1,155,000 |
|
|
0.80 |
|
|
1,124,500 |
|
|
2.13 |
|
|
Cancelled or forfeited |
|
(431,500 |
) |
|
3.23 |
|
|
(1,016,000 |
) |
|
3.54 |
|
|
Exercised |
|
(158,500 |
) |
|
0.50 |
|
|
(49,000 |
) |
|
0.52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding, end
of year |
|
3,076,500 |
|
$ |
2.50 |
|
|
2,511,500 |
|
$ |
3.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options exercisable |
|
3,076,500 |
|
$ |
2.50 |
|
|
2,511,500 |
|
$ |
3.28 |
|
The weighted average fair value of
options granted during the years ended December 31, 2014 and 2013 was $0.35 and
$0.46 per share, respectively. The fair value of stock options granted was
estimated using the Black-Scholes option pricing model with the following
weighted average assumptions:
|
(i) |
Risk-free interest rate: 0.24% to 0.68% (2013 0.33% to
0.97%). |
|
|
|
|
(ii) |
Expected life: 1.5 2.5 years (2013 2.0 3.0
years). |
|
|
|
|
(iii) |
Volatility: 69% - 87% (2013 52% - 60%). |
|
|
|
|
(iv) |
Expected dividends nil. |
The Company has utilized the simplified
method to determine the expected term assumption in the fair value calculation
for stock options granted during the years ended December 31, 2014 and 2013. The
mid-point between the vesting date and the maximum contractual expiration date
is used as the expected term under this method.
Total stock-based compensation
recognized during the years ended December 31, 2014 and 2013 was $0.4 million
and $0.6 million, respectively. During 2014 and 2013, a total of $0.2 million
and $0.4 million stock option compensation was attributable to the Troy Mine
employees and is included in the amounts reported in general and administrative
expense.
F-20
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Years ended December 31, 2014 and 2013
(expressed in thousands of United States dollars unless otherwise
stated)
Stock Purchase Warrants:
There were no stock purchase warrants
outstanding at December 31, 2013. During the year ended December 31, 2014, the
Company issued 2,249,549 stock purchase warrants for the purchase of common
shares of Revett Mining Company, Inc. These warrants have an exercise price of
$1.00 and expire in March 2016.
No warrants were exercised or expired
during the year ended December 31, 2014. For the year ended December 31, 2013,
no warrants were issued, 55,000 warrants were exercised and 1,108,438 warrants
expired.
12. Income taxes
The Companys income tax benefit for
the years ending December 31 is as follows:
|
|
2014
|
|
|
2013
|
|
Federal: |
|
|
|
|
|
|
Current |
$ |
- |
|
$ |
20 |
|
Deferred |
|
- |
|
|
(5,250 |
) |
Total
Federal |
|
- |
|
|
(5,230 |
) |
|
|
|
|
|
|
|
State: |
|
|
|
|
|
|
Current |
|
- |
|
|
- |
|
Deferred |
|
- |
|
|
(607 |
) |
Total income tax benefit |
$ |
- |
|
$ |
(5,837 |
)
|
Domestic and foreign components of loss
from operations before income taxes for the years ended December 31, are as
follows:
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
Domestic |
$ |
(61,835 |
) |
$ |
(17,200 |
) |
Foreign |
|
(88 |
) |
|
(212 |
) |
Total |
$ |
(61,923 |
) |
$ |
(17,412 |
)
|
The annual tax benefit is different
from the amount that would be provided by applying the statutory federal income
tax rate to the pre-tax loss. The reasons for the differences are as follows:
F-21
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Years ended December 31, 2014 and 2013
(expressed in thousands of United States dollars unless otherwise
stated)
|
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax at statutory rate |
$ |
(21,673 |
) |
|
(35.0% |
) |
$ |
(6,094 |
) |
|
(35.0% |
) |
|
Effect of state taxes |
|
(2,505 |
) |
|
(4.0 |
)% |
|
(791 |
) |
|
(4.4% |
) |
|
Effect of foreign taxes |
|
- |
|
|
- |
|
|
25 |
|
|
0.1% |
|
|
Forfeiture of Canadian tax attributes |
|
2,787 |
|
|
4.5% |
|
|
- |
|
|
- |
|
|
Change in valuation allowance |
|
20,878 |
|
|
33.7% |
|
|
3,350 |
|
|
19.2% |
|
|
Percentage depletion |
|
- |
|
|
- |
|
|
(2,503 |
) |
|
(14.4% |
) |
|
Stock based compensation |
|
140 |
|
|
0.2% |
|
|
179 |
|
|
1.0% |
|
|
Other |
|
373 |
|
|
0.6% |
|
|
(3 |
) |
|
- |
|
|
Income tax benefit |
|
- |
|
|
0.0% |
|
$ |
(5,837 |
) |
|
(33.5% |
) |
The significant components of the
Companys deferred income tax assets and liabilities at December 31, 2014 and
2013 are as follows:
|
|
|
2014
|
|
|
2013
|
|
|
Deferred income tax assets:
|
|
|
|
|
|
|
|
Reclamation
and remediation |
$ |
1,865 |
|
$ |
1,803 |
|
|
Net operating losses: |
|
|
|
|
|
|
|
United States |
|
20,722 |
|
|
16,826 |
|
|
Canada |
|
- |
|
|
2,764 |
|
|
Mineral
property, plant and equipment |
|
3,026 |
|
|
- |
|
|
Other assets |
|
1,330 |
|
|
2,015 |
|
|
|
|
26,943 |
|
|
23,408 |
|
|
Valuation allowance |
|
(26,943 |
) |
|
(6,065 |
) |
|
Deferred income tax assets |
|
- |
|
|
17,343 |
|
|
|
|
|
|
|
|
|
|
Deferred income tax liabilities: |
|
|
|
|
|
|
|
Mineral property, plant, and equipment |
|
- |
|
|
(17,343 |
) |
|
Investments
|
|
- |
|
|
(25 |
) |
|
Net deferred income tax
liability |
$ |
- |
|
$ |
(25 |
) |
|
|
|
|
|
|
|
|
|
Current deferred tax asset
(liability) |
$ |
- |
|
$ |
- |
|
|
Long term deferred tax asset (liability) |
|
- |
|
|
(25 |
) |
|
Net deferred income tax
liability |
$ |
- |
|
$ |
(25 |
)
|
As of December 31, 2014 and 2013,
management of the Company used the guidelines contained in ASC 740 and evaluated
the positive and negative evidence available to determine whether a valuation
allowance against the deferred tax assets should be established. Management has
determined that the Companys negative evidence of a cumulative loss position
after significant permanent differences and the lack of future taxable income
based on current conditions regarding the Troy mine outweighed the positive
evidence. Management believes that it is more likely than not the deferred tax
assets will not be recovered. Therefore a valuation allowance equal to 100% of
the net deferred tax assets has been recorded.
At December 31, 2014 and 2013, the
Company has United States net operating loss carry forwards of approximately
$53.9 million and $43.8 million, respectively, that expire at various dates between 2024 and 2034. Montana
State net operating losses of approximately $41.9 million and $34.4 million,
respectively, expire at various dates between 2015 and 2021.
F-22
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Years ended December 31, 2014 and 2013
(expressed in thousands of United States dollars unless otherwise
stated)
The Company has a net capital loss
carry forward of approximately $0.1 million and $1.4 million that expires in
2017 and 2018, respectively, and $0.6 million of AMT credits that do not expire.
During the year ended December 31,
2014, the Company exited Canada (see Note 1). Approximately $10.6 million of
Canadian net operating loss carry forwards from 2013 were forfeited at that
time.
The Company has no unrecognized tax
benefits as of December 31, 2014 or 2013, and there was no change in
unrecognized tax benefits during the current year. The Company has not provided
for any interest or penalties associated with any uncertain tax positions. If
interest and penalties were to be assessed, the Companys policy is to charge
interest to interest expense, and penalties to other operating expense. It is
not anticipated that there will be any significant changes to unrecognized
benefits within the next 12 months. Currently tax years 2012-2014 remain open
for examination by the United States taxing authorities. Net operating losses
prior to 2012 could be adjusted during an examination of open years.
13. Comprehensive income
The components of other comprehensive
income for the years ended December 31, are as follows:
|
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) on
available for sale securities before tax |
$ |
359 |
|
$ |
(479 |
) |
|
|
|
|
|
|
|
|
|
Deferred tax benefit
(expense) |
|
- |
|
|
168 |
|
|
Unrealized gain (loss) on available for sale
securities, net of tax |
|
359 |
|
|
(311 |
) |
|
|
|
|
|
|
|
|
|
Reclassification of net (gain) loss on sale included
in net loss |
|
(429 |
) |
|
1,376 |
|
|
Deferred tax provision |
|
25 |
|
|
(482 |
) |
|
Unrealized (gain) loss on available for sale
securities, net of tax |
$ |
(45) |
|
$ |
583 |
|
14. Derivative instruments
Concentrate Sales Contracts
The Company enters into concentrate
sales contracts with third-party buyer. The contracts, in general, provide for a
provisional payment based upon provisional assays and quoted metal prices and
the provisionally priced sales contain an embedded derivative that is required
to be separated from the host contract for accounting purposes. The host
contract is the receivable from the sale of concentrates at the forward price at
the time of sale. The embedded derivative, which is the final settlement based on a future
price, does not qualify for hedge accounting. These embedded derivatives are
recorded in Concentrate settlement and other receivables on the consolidated
balance sheet and are adjusted to fair value through earnings each period until
the date of final settlement.
F-23
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Years ended December 31, 2014 and 2013
(expressed in thousands of United States dollars unless otherwise
stated)
Warrant Derivative Liabilities
Some of the Companys issued and
outstanding common share purchase warrants have exercise prices denominated in a
foreign currency (Canadian dollar). These warrants are required to be treated as
a derivative liability as the amount of cash the Company will receive on
exercise of the warrants will vary depending on the exchange rate. These
warrants are classified as a derivative liability and recognized at fair value.
See discussion of the warrant derivative liabilities in Note 7.
The following represent changes in fair
value gains on derivative instruments during the year ended December 31, 2013:
|
|
2013 |
|
|
|
|
|
Revenue |
$ |
628 |
|
Gain on warrant derivative |
|
63 |
|
15. Commitments and Contingencies
Litigation
As at December 31, 2014, there are no
legal proceedings outstanding for either the Company or any of its subsidiaries.
Operating Leases
The Company has entered into a number
of operating leases relating to equipment used in the production and
transportation of the copper concentrate produced at Troy. All such leases
expire in 2015 and many may be renewed annually. Total operating lease expense
recognized for the years ended December 31, 2014 and 2013 was $0.4 million and
$0.4 million, respectively. The obligations in 2015 under the terms of these
leases are $0.4 million.
Royalty
There is a 3% gross smelter return
payable to Royal Gold over the life of the Troy Mine commencing with production
on and after July 1, 2010. There is also a 1% net smelter return payable to
Royal Gold over the life of the Rock Creek Mine commencing when commercial
production is achieved.
F-24
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Years ended December 31, 2014 and 2013
(expressed in thousands of United States dollars unless otherwise
stated)
Retirement Plan
The Company maintains a discretionary
defined contribution plan, which is available to all employees after completion
of one month of service. The Company may, at its discretion, match an employees
contribution up to 5% of the employees compensation. The Company can also
choose to make additional contributions. The Companys contributions were
approximately $0.2 million in 2014 and $0.2 million in 2013.
16. Fair Value of Financial
Instruments
The carrying values of cash and cash
equivalents, accounts receivable, available for sale securities, restricted
cash, and accounts payable and accrued liabilities approximate fair value due to
their short time to maturity or ability to immediately convert them to cash in
the normal course. The carrying value of concentrate settlement payable or
receivable is marked to market each month using quoted forward prices as of the
last trading day of each month, and accordingly are recognized at fair value.
The carrying values of capital lease and notes payable obligations approximate
fair market values as they are based on market rates of interest.
The Company classifies financial
instruments recognized at fair value in accordance with a fair value hierarchy
that prioritizes the inputs to valuation techniques used to measure fair value.
The three levels of the fair value hierarchy are described below:
|
Level 1 |
Unadjusted quoted prices in active markets that are
accessible at the measurement date for identical, unrestricted assets or
liabilities; |
|
|
|
|
Level 2 |
Quoted prices in markets that are not active, or inputs
that are observable, either directly or indirectly, for substantially the
full term of the asset or liability; and |
|
|
|
|
Level 3 |
Prices or valuation techniques that require inputs that
are both significant to the fair value measurement and unobservable
(supported by little or no market activity). |
The following table sets forth the
Companys financial assets and liabilities measured at fair value on a recurring
basis by level within the fair value hierarchy. Assets and liabilities are
classified in their entirety based on the lowest level of input that is
significant to the fair value measurement.
|
Fair Value Measurement on a Recurring
Basis |
|
|
|
|
Fair
value at December 31, 2014 |
|
|
|
|
Total |
|
|
Level
1 |
|
|
Level
2 |
|
|
Level
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
2,896 |
|
$ |
2,89 |
|
$ |
- |
|
$ |
- |
|
|
|
|
Fair value at December 31, 2013 |
|
|
|
|
Total |
|
|
Level
1 |
|
|
Level
2 |
|
|
Level
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
7,951 |
|
$ |
7,951 |
|
$ |
- |
|
$ |
- |
|
|
Available for sale securities |
|
600 |
|
|
600 |
|
|
- |
|
|
- |
|
F-25
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Years ended December 31, 2014 and 2013
(expressed in thousands of United States dollars unless otherwise
stated)
The Companys cash and cash equivalent
instruments are classified within Level 1 of the fair value hierarchy because
they are valued using quoted market prices.
The Companys available for sale
securities are valued using quoted market prices, and accordingly, are included
in Level 1.
The Companys concentrate receivable,
which includes provisionally priced sales, are valued using pricing models and
the Company generally uses similar models to value similar instruments. Where
possible, the Company verifies the values produced by its pricing models to
market prices. Valuation models require a variety of inputs, including
contractual terms, market prices, and correlations of such inputs. Such
instruments are typically classified within Level 2 of the fair value hierarchy.
At December 31, 2014, the Company
recorded an impairment loss on its property and equipment based upon its
estimated fair value as follows:
Fair Value Measurement on a Nonrecurring Basis |
|
|
|
December 31, 2014 |
|
|
|
|
|
|
|
|
|
Impairment Loss |
|
|
|
|
|
|
Level 3 |
|
|
Recognized |
|
|
|
|
Property and Equipment |
$ |
16,288 |
|
$ |
54,724 |
|
|
|
|
The net carrying value of property and
equipment was $71.0 million prior to the impairment loss. The estimated fair
value at December 31, 2014 was determined using the market approach which was
based upon an accepted offer to sell the Company (See Note 20 Subsequent
events). The key variable utilized was the price per share included in the
accepted offer. Because the fair value was based on unobservable inputs, the
valuation is classified within Level 3 of the fair value hierarchy.
17. Segment Information
The Company considers itself to operate
in a single segment being copper and silver mining and related activities
including exploration, development, mining, and processing. All revenues earned
and mineral, property, plant and equipment are located in the United States. For
all periods presented, all revenues and concentrate settlements receivable are
from one customer pursuant to a concentrate sales agreement.
18. Loss Per Common Share
Options and warrants to purchase
5,326,049 and 2,511,500 shares of the Companys common stock were excluded from
the computation of diluted earnings per share for the year ended December 31,
2014 and 2013, respectively, because they were anti-dilutive.
F-26
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Years ended December 31, 2014 and 2013
(expressed in thousands of United States dollars unless otherwise
stated)
19. Related Party Transactions
Trafiguara AG has a contract to
purchase the silver and copper concentrates produced at Troy. Trafigura Beheer
B.V., which is affiliated with Trafigura AG, is the beneficial owner of more
than five percent of our outstanding common shares, and is therefore a related
party. Trafigura AG did not pay us anything during the years ended December 31,
2014 and 2013, owing to the fact that we produced no concentrate at Troy during
the period.
20. Subsequent Events
On March 26, 2015, the Company entered into an agreement and plan of merger with Hecla, pursuant to which, and subject to approval of the Company’s shareholders and the satisfaction of other conditions specified in the agreement, the Company would merge with and into Hecla in a share exchange transaction in which the Company’s stockholders would receive 0.1622 share of Hecla common stock for each share of common stock of the Company. Total consideration of $0.52 per share is payable in shares of Hecla’s common stock using an exchange ratio of 0.1622 shares for every share of the Company. The total fair value of this offer is approximately $20.4 million. This offer to merge is not complete and is subject to the Company’s shareholders approval, which may or may not happen until mid-2015.
F-27
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
There were no changes in or disagreements with the registrants
accountants on accounting and financial disclosure during the year.
Item 9A. Controls and Procedures.
Management is responsible for adopting internal controls and
procedures that assure our financial position and results of operation are
fairly presented in our consolidated financial statements. Management also is
responsible for establishing and maintaining disclosure controls and procedures
that assure appropriate disclosure of material information concerning us and our
consolidated subsidiaries.
Disclosure Controls and Procedures. Our
disclosure controls and procedures are designed to ensure that information we
are required to disclose in our periodic reports and other information filed
under the Exchange Act is recorded, processed, summarized and reported within
the time periods prescribed by the SECs rules. These include controls and
procedures designed to ensure that all such information is accumulated and
promptly communicated to our management, including our chief executive officer
and our chief financial officer (who is also our principal accounting officer),
so that they can make timely disclosure decisions.
We have evaluated the effectiveness of the design and operation
of our disclosure controls and procedures as required by Rules 13(a)-15(e) and
15(d)-15(e) of the Exchange Act. This evaluation was performed under the
supervision and with the participation of our management, including our chief
executive officer and our chief financial officer, both of whom concluded that
such controls and procedures were effective as of December 31, 2014. Based upon
this evaluation, our chief executive officer and chief financial officer
concluded that, as at December 31, 2014, our disclosure controls and procedures
effectively ensured that information required to be disclosed by us in the
reports we file under the Exchange Act is being gathered, reported, processed,
summarized and reported within the time periods specified in the SECs rules and
forms, and is communicated to management, including our chief executive officer
and the chief financial officer, in a manner that affords them the opportunity
to make timely disclosure decisions.
31
Internal Controls over Financial
Reporting. Management is responsible for establishing and
maintaining adequate internal control over financial reporting as defined in
Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control
over financial reporting is designed to provide reasonable assurance concerning
both the reliability of our financial reporting and the preparation of our
financial statements in accordance with generally accepted accounting
principles. This control includes policies and procedures that obligate us to
maintain reasonably detailed records that accurately and fairly reflect our
transactions and the disposition of our assets, provide assurance that our
transactions are properly recorded, ensure that our receipts and expenditures
are authorized by management and, where applicable, our board directors, and
prevent or allow us to timely detect material unauthorized acquisitions, uses or
dispositions of our assets.
We have evaluated the effectiveness of our internal control
over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) of the
Exchange Act using the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission in Internal Control Integrated
Framework (1992). This evaluation was performed under the supervision and
with the participation of our management, including our chief executive officer
and our chief financial officer, both of whom concluded that our internal
control over financial reporting was effective as of December 31, 2014. Our
evaluation of the effectiveness of our internal control over financial reporting
in future periods may differ due to changing conditions or non-compliance with
the policies and procedures we have established.
Changes in Internal Control over Financial Reporting.
There have been no changes in our internal control over financial
reporting during the most recent fiscal quarter that have materially affected,
or are reasonably likely to affect, its internal control over financial
reporting.
Item 9B. Other Information.
Any information that was required to be disclosed by us on Form
8-K during the fourth quarter of the year ended December 31, 2014 has been
disclosed.
Item 10. Directors, Executive Officers and Corporate
Governance.
Directors and Executive Officers.
The names, ages, business experience (for at least the past five
years) and positions of our directors and executive officers are set out below.
Our board is currently comprised of five members, all of whom serve until the
next annual meeting of stockholders or until their successors are elected or
appointed. The board of directors appoints the executive officers annually.
Director or Executive
Officer |
Age |
Position
|
John G. Shanahan (1)
(5) |
55 |
President, Chief
Executive Officer and Director |
Kenneth S. Eickerman |
57 |
Chief Financial Officer |
Douglas Miller |
61 |
Vice-President of
Operations |
Monique Hayes |
49 |
Corporate Secretary |
Douglas Stiles |
41 |
Vice President of
Planning |
Timothy R. Lindsey (1) (2) (3) (5)
|
62 |
Chairman of the Board of
Directors |
32
Albert F. Appleton (1)
(2) (4) |
70 |
Director |
Larry M. Okada (2) (3) (4) |
65 |
Director |
John B. McCombe (3)
(4) (5) |
54 |
Director
|
(1) |
Member of the Environmental Committee of the board of
directors |
(2) |
Member of the Compensation Committee of the board of
directors |
(3) |
Member of the Audit Committee of the board of
directors |
(4) |
Member of the Governance and Nominating Committee of the
board of directors |
(5) |
Member of the Safety Committee of the board of
directors |
Biographies of Corporate Directors and Executive
Officers.
John G. Shanahan. Mr. Shanahan was appointed
President and Chief Executive Officer in October 2008. Prior to becoming CEO, he
was the chairman of the board of directors, from 2005 until April 2009. Mr.
Shanahans background is in commodity price risk management. He has held senior
management positions with Barclays Capital, Rothschild Inc., Pasminco Ltd, and
Australian Mining and Smelting. Mr. Shanahan holds a bachelor of commerce degree
from the University of Melbourne (Australia), a graduate diploma in Systems
Analysis and Design from the Royal Melbourne Institute of Technology
(Australia), and an MBA degree from the Columbia School of Business.
Kenneth S. Eickerman. Mr. Eickerman was appointed
Chief Financial Officer in December 2008. Prior to joining Revett Silver as an
officer in April 2005, Mr. Eickerman was Controller of Mustang Line Contractors,
Inc. (from May 2002 to March 2005), and Controller and Treasurer of Apollo Gold,
Inc. (from February 1999 to May 2002). Before that, he worked in various finance
capacities for Pegasus Gold, Inc. Mr. Eickerman graduated from Washington State
University and is a certified public accountant licensed in the State of
Washington.
Douglas Miller. Mr. Miller was appointed Vice
President of Operations in October 2012 and is responsible for overseeing
operations at Troy and development plans at Rock Creek. He joined us in 2004.
Mr. Miller graduated from Montana Tech with a degree in Mining Engineering in
1978 and has over thirty years of experience in operating producing mines, most
recently at ASARCOs Northwest Mining Department (which operated the Galena,
Coeur, and Troy mines) and in its Eastern Mining Department (as the manager of
five zinc mines in Tennessee).
Monique Hayes. Ms. Hayes was appointed Corporate
Secretary in December 2010. She has ten years of investor relations, corporate
governance and regulatory filing experience in the mining industry and over ten
years of general advertising, communications and brand management experience.
Prior to joining Revett Silver in March 2009, Ms. Hayes was employed by Sterling
Mining, WhiteRunkle Advertising and Studio Interactive, where she held
management and leadership roles in investor relations, corporate communications,
administration and human resources.
Douglas Stiles. Mr. Stiles was appointed Vice President
Planning in August 2014. He has extensive U.S. and international environmental
regulatory experience and managed his own technical services firm immediately
before joining Revett. Mr. Stiles was the Corporate Environmental Engineering
Manager of Coeur Mining from 2012 to 2013, and served in a number of leadership
roles including Assistant General Manager and Environmental Manager for Quadra
FNX Minings Carlota Copper Mine from 2008 to 2011. He has also held senior
roles in management and engineering for Veriforce (from 2006 to 2008), TransCanada
(from 2001 to 2006) and Hecla Mining Company (from 1997 to 2001). Mr. Stiles
holds a bachelor of science degree in environmental engineering from Montana
Tech and is a Registered Professional Engineer (P.E.) in Washington.
33
Timothy R. Lindsey. Mr. Lindsey has over thirty-five
years of technical and executive leadership in energy and mineral exploration,
production and business development in the U.S., Canada, Africa, Europe, Latin
America, the CIS and Asia-Pacific. Early in his career he worked as an
exploration geologist on several base-metal projects including both the Troy and
Rock Creek deposits. From 1975 until 2003, Mr. Lindsey held various senior
management positions with Marathon Oil in both U.S. and International
exploration and production. He was employed by The Houston Exploration Company
from 2003 to 2005 as Senior Vice President. From March 2005 to the present, Mr.
Lindsey has been a Principal of Lindsey Energy and Natural Resources, an
independent consulting firm specializing in energy and mining industry issues.
He has served on both public and private company boards and currently serves
(since 2006) as a director for Daybreak Oil and Gas. Mr. Lindsey received a
Bachelor of Science in geology from Eastern Washington University and completed
graduate studies in economic geology at the University of Montana. He also
completed the Advanced Executive Program at Northwestern University and is a
member of several professional associations. Mr. Lindsey was appointed a
Director and Chairman of the Board in April 2009, and is currently Chairman of
the Compensation Committee.
On October 15, 2010, Canadian Sahara Energy Inc., with whom Mr.
Lindsey was affiliated as an officer and a director, filed a Notice of Intention
to File a Proposal under the Bankruptcy and Insolvency Act (Canada). An action
to stay legal proceedings in another court involving title to a disputed oil and
gas asset located in North Africa, not because was unable to pay funds to any
creditors with whom it did business. The company expects to emerge with a
certification of full performance once a reorganization proposal is made and
accepted by the Canadian courts.
Albert F. Appleton. Mr. Appleton been an international
environmental and public finance consultant since 2005, and is also an Associate
Adjunct Professor at the Cooper Union in New York City, teaching environmental
sustainability, and a Senior Fellow at the Cooper Union Institute for
sustainable design. From 1994 to 2005, he was a Senior Fellow of Infrastructure
at the New York City Regional Plan Association, and from 1990 to 1993 was
Commissioner of the New York City Department of Environmental Protection and
Director of the New York City Water and Sewer System, where he was noted for his
innovations in watershed protection, water conservation and water resource
management and finance. Mr. Appleton is a graduate of Gonzaga University
(Spokane, Washington) and Yale Law School. He has been a Director since June
2010 and is Chairman of the Environmental Committee.
Larry M. Okada. Mr. Okada is a Chartered Accountant in
British Columbia and Alberta, and a Certified Public Accountant in Washington
State, and has extensive public finance and accounting experience with Deloitte
& Touche, Staley Okada & Partners, and PricewaterhouseCoopers LLP. Mr.
Okada is currently a member of the Institute of Chartered Accountants of British
Columbia, Alberta and Canada and a member of the Washington State CPA Society.
He has been a Director since January 2010 and is Chairman of the Audit Committee
and the Governance and Nominating Committee.
John B. McCombe. Mr. McCombe has over 25 years of
operating experience in North American and international mining and mineral
processing operations. Mr. McCombe was, until November 2012, the Chief Operating
Officer of Dalradian Resources Inc. Prior to that, he held a senior position at
IAMGOLD Corporation. From 1983 to 1995 he held various mine and mill supervisory
positions at Dickinson Mines (now Goldcorp) Red Lake operation, and from 1995
to 2005 he was responsible for global operations at Breakwater Resources. Mr.
McCombe graduated from Queens University in 1983 with a Bachelor of Science in
Mining Engineering and is a Registered Professional Engineer and a member of the Canadian
Institute of Mining and Metallurgy. He has been Director since November 2010 and
is Chairman of the Safety Committee.
34
Corporate Governance Practices and Policies.
Our corporate governance practices and policies are
administered by a board of directors (the Board) and by committees of the
Board appointed to oversee specific aspects of our management and operations,
pursuant to written charters and policies adopted by the board and such
committees.
Independence of the Board. Our Board is comprised of
five directors, four of whom are independent based on the definition of
independence under section 803A of the NYSE MKT Company Guide. The independent
directors are Timothy R. Lindsey, Larry Okada, Albert F. Appleton and John B.
McCombe. The non-independent director is John G. Shanahan, who also serves as
our president and chief executive officer. The independent directors meet
outside the presence of management and Mr. Shanahan prior to or during most
regularly scheduled meetings of the board. During the year ended December 31,
2014, the Board met four times and the independent members of the Board met
separately three times.
The following directors are also directors of other reporting
issuers:
Name |
Issuer |
Timothy R. Lindsey |
Daybreak Oil and Gas,
Inc. (DBRM.OB) |
Larry M. Okada |
|
|
Eurasian Minerals,
Inc. (TSX) |
|
Forum Uranium Corp. (TSXV) |
|
Rokmaster Resources
Corp. (TSXV) |
Board Meetings. The Board is headed by a chairman, a
position that is currently held by Mr. Lindsey. The following table sets forth
the attendance record of each director for all Board meetings held since the
beginning of our fiscal year ended December 31, 2014:
Name |
Number of Board
Meetings Attended |
Timothy R. Lindsey |
4 out of 4 |
Larry Okada |
4 out of 4 |
Albert F. Appleton |
4 out of 4 |
John G. Shanahan |
4 out of 4 |
John B. McCombe |
4 out of 4
|
The Board does not have a policy concerning director attendance
at our annual stockholder meetings. Two directors were present at our 2013
annual meeting held in June of 2014.
Board Charter. The Board has adopted a charter that
among other things defines the role of the board as overseeing, directly and
through its committees, our business and affairs, which are conducted through
our officers and employees under the direction of the chief executive officer.
The charter mandates that the Board act in the best interests of the Company and
its stockholders at all times. The Board discharges its responsibilities
directly and through five standing committees: the Compensation Committee; the
Audit Committee; the Corporate Governance and Nominating Committee; the
Environmental Committee; and the Safety Committee.
35
The Board has reviewed and approved the mandate, structure and
composition of each of these committees. The Board has also reviewed its
leadership structure, including the fact that it has an independent chairman,
and has concluded that it is appropriate. One of the functions of the Board is
to assess the major risks facing the Company, and to review and monitor the
manner in which those risks are managed.
Position Descriptions. The Board has adopted a position
description for the chairman of the Board and the chair of each standing
committee of the Board. The chairman of the Board is responsible for chairing
all meetings of directors, managing the board and enhancing its effectiveness,
acting as a liaison between the Board and management to promote a professional
and constructive culture and, at the request of the Board, representing the
Company to community groups, governmental agencies, the stockholders and other
external stakeholders. The chairs of the Audit Committee, the Compensation
Committee, the Environmental Committee, the Safety Committee and the Corporate
Governance and Nominating Committee are responsible for overseeing the discharge
of the duties specified in each committees charter.
The Board has also adopted a position description for the chief
executive officer, whose primary role is to effectively and efficiently manage
the company, meet the Boards priorities, goals and objectives, and do so with a
view toward the best interests of the Company and its stockholders.
Orientation of New Directors and Continuing Education.
New directors are given a comprehensive orientation package when they are first
elected or appointed to the Board. From time to time, corporate officers and
legal, financial and other experts are invited to attend board meetings to
describe matters in their areas of expertise. In addition, the directors visit
each of the Companys material properties upon their election or appointment,
and periodically thereafter. Under the Boards charter, management is
responsible for providing an orientation and education program for new
directors. Part of the mandate of the Corporate Governance and Nominating
Committee is to confirm that procedures are in place to orient new directors to
the Company and to their responsibilities and duties as directors, and to
provide the directors with appropriate continuing education opportunities.
Ethical Business Conduct. We are committed to fostering
and maintaining a culture of high ethical standards and compliance, and have
adopted a code of business conduct and ethics for its directors, officers and
employees. Our code can be found on our website at www.revettmining.com.
Each of our directors, officers and employees is required to review and
understand the code and acknowledge that they will comply with it. We have has
also adopted a disclosure and insider trading policy and a whistle blower
policy.
Directors who are a party to, or are a director or an officer
of a person which is a party to, a material contract or material transaction or
a proposed material contract or proposed material transaction are required to
disclose the nature and extent of their interest and not to vote on any
resolution to approve the contract or transaction. In addition, in certain
cases, an independent committee of the board may be formed to deliberate on such
matters in the absence of the interested party.
Composition of Committees of the Board. The following
table sets forth information as of the date of this report concerning the
composition of our committees of the board of directors and the number of
committee meetings held during the year ended December 31, 2014:
36
|
|
|
|
|
Corporate |
|
|
|
|
|
Governance |
|
|
|
|
|
and |
|
Audit |
Compensation |
Safety |
Environmental |
Nominating |
Director |
Committee |
Committee |
Committee |
Committee |
Committee |
John G. Shanahan |
|
|
X |
X |
|
Timothy R. Lindsey |
X |
Chair |
X |
X |
|
Albert F. Appleton |
|
X |
|
Chair |
X |
Larry M. Okada |
Chair |
X |
|
|
Chair |
John B. McCombe |
X |
|
Chair |
|
X |
2014
Meetings |
4 |
1 |
4 |
4 |
1 |
Audit Committee.
Composition and Responsibilities. The Audit Committee is
comprised of three or more members of the Board who are independent and operates
pursuant to a charter adopted by the Board. The charter generally authorizes the
committee to assist the board in overseeing our financial reporting, financial
control, risk management and stockholder communications. The Audit Committee is
responsible for:
|
recommending the independent auditors for appointment or
re-appointment by stockholders and reviewing the appropriateness and
reasonableness of the proposed audit fees; |
|
|
|
overseeing the work of the independent auditors,
including the resolution of disagreements between management and the
independent auditors concerning financial reporting; |
|
|
|
obtaining timely reports from the independent auditors
describing, among other things, critical accounting policies and practices
and alternative treatments of information that were discussed with
management; |
|
|
|
reviewing and, if appropriate, recommending board of
director approval of our annual audited financial statements, quarterly
interim unaudited financial statements, management discussion and
analysis, earnings news releases and any other audited or unaudited
financial information contained in public disclosure documents, prior to
their filing or dissemination; |
|
|
|
reviewing and approving our hiring policies as they
affect current or former partners or employees of our independent auditors
or former independent auditors; |
|
|
|
confirming that the independent auditors have submitted a
formal statement relating to the objectivity and independence of the
independent auditors; |
|
|
|
overseeing any related party transactions; and |
|
|
|
performing such other activities as are consistent with
the Audit Committees charter and governing law that the committee or the
Board deem necessary or appropriate. |
37
In fulfilling these responsibilities, the Audit Committee is
authorized to conduct any investigation appropriate to its responsibilities and
in doing so may request the attendance of our independent auditors, our officers
or our counsel. The committee has unrestricted access to our books and records,
and is authorized to retain special legal, accounting or other consultants or
experts to assist it. The committee is further empowered to review and assess
the adequacy of its mandate annually and submit any proposed revisions to the
board of directors for approval.
Members of the Audit Committee are required to meet all
applicable regulatory and listing requirements and must be independent within
the meaning of Exchange Act Rule 10A-3. Members of the committee must also meet
financial literacy requirements, and at least one member must be an audit
committee financial expert within the meaning of the Item 401 of Regulation S-K
of the Exchange Act.
The Audit Committee meets no less often than quarterly. A
minimum of two and at least 50% of the members of the committee present either
in person or by telephone constitute a quorum for the conduct of committee
business. Whenever a vacancy occurs, the remaining members may exercise all of
their powers and responsibilities of the committee so long as a quorum of the
committee members remains in office. Matters voted upon by the committee are
decided by a majority of votes cast at the meeting. The committee may also take
action in lieu of a meeting with the unanimous written consent of all the
members. All decisions or recommendations of the committee require Board
approval prior to implementation. The committee is required to keep a written
record of its meetings, which are submitted to the Board.
Current Members. The Audit Committee is presently
comprised of Mr. Okada, Mr. Lindsey and Mr. McCombe, with Mr. Okada serving as
chairman. Mr. Okada is an audit committee financial expert within the meaning
of Regulation S-K, Item 407(d)(5) During the year ended December 31, 2014, the
committee met four times. Each committee member was present at each such
meeting. The Audit Committees charter can be found on our website.
Pre-Approval Policy. The Audit Committee has adopted a
policy requiring pre-approval of all audit, audit-related and non-audit services
that are to be performed by our independent auditors. The policy also specifies
those services that may not be provided by our independent auditors, including
services prohibited by law. Committee pre-approval can be either general or
specific. The chair of the Audit Committee has authority to grant specific
approval in instances where the fees involved do not exceed $50,000.
Audit Committee Report.
The Board has adopted a charter for the Audit Committee that
sets out the committees mandate, organization, powers and responsibilities. The
Audit Committee charter complies with Rule 10A-3 of the Exchange Act and the
requirements of the NYSE MKT.
The Audit Committee has certain oversight responsibilities with
respect to the companys audited financial statements, including those included
in this report. In exercising these responsibilities, the Audit Committee
reviewed the 2014 financial statements with management and our independent
auditors. It also reviewed the accounting principles, practices and judgments
that support the presentation of such financial statements, and the adequacy and
clarity of the notes to the financial statements.
Since the commencement of the companys most recently completed
fiscal year, the Board has not failed to adopt a recommendation of the Audit
Committee to nominate or compensate an independent auditor. The Audit Committee
has adopted specific policies and procedures for the engagement of non-audit
services.
38
The Audit Committee reviewed the independence and performance
of the independent auditors who are responsible for expressing an opinion on the
conformity of our audited financial statements with generally accepted
accounting principles in the United States, and such other matters as required
to be communicated by the independent auditors in accordance with Statement on
Auditing Standards 61 -- Communication with Audit Committees.
The Audit Committee also met with the independent auditors to
discuss their audit plans, scope and timing on a regular basis, with or without
management present. The Audit Committee has received the written disclosures and
the letter from the independent auditors required by the Public Company
Accounting Oversight Board concerning the auditors independence.
In reliance on the reviews and discussions referred to above,
the Audit Committee recommended to the Board that the audited financial
statements be included in this report for the year ended December 31, 2014. The
Board concurred with the committees recommendation.
Submitted by the members of the Audit Committee Larry
Okada (Chairman) Timothy R. Lindsey John B. McCombe
Compensation Committee.
Composition and Responsibilities. The purpose of the
Compensation Committee is to assist the Board in overseeing compensation matters
and issues. The committees mandate specifies that it is responsible for:
|
overseeing the development and administration
of competitive policies, including policies dealing with compensation and
benefits, in order to attract and retain employees of the highest
standards; |
|
|
|
reviewing the results of the evaluation of the
performance of other senior officers by the chief executive officer and in
consultation with the chief executive officer making recommendations to
the Board concerning compensation arrangements for individual senior
officers and directors; |
|
|
|
conducting and reporting to the Board regarding
an annual performance review of the chief executive officer, including a
review of the corporate goals and objectives relevant to the compensation
of the chief executive officer, an evaluation of the performance of the
chief executive officer in light of those goals and objectives and
determination of the chief executive officers compensation based on this
evaluation; |
|
|
|
reviewing and making recommendations to the
Board concerning our equity incentive plans, and reviewing allocations of
benefits under the plan; |
|
|
|
adopting a compensation philosophy for senior
officers, and administering a compensation program in accordance with the
philosophy; and |
|
|
|
periodically reviewing our management
succession program. |
The Compensation Committee meets at least annually to consider
and makes recommendations to the Board . Typically, our chief executive officer
makes recommendations to the committee concerning individual salary levels,
incentive bonuses and other forms of compensation for all of the executive officers other than
himself; these recommendations are then reviewed and submitted to the full Board
for approval. The Compensation Committee makes its own determination concerning
the chief executive officers compensation. It also annually reviews the
adequacy of director compensation. In general the Compensation Committee strives
to ensure that our directors and executive officers are being compensated at
competitive levels, that their compensation reflects our performance, and that
it is aligned with the interests of our stockholders. In carrying out its
mandate, the Compensation Committee is authorized to hire independent counsel
and such other advisors as it deems necessary. The Compensation Committee also
prepares an annual report regarding executive compensation.
39
Current Members. The Compensation Committee is presently
comprised of Mr. Lindsey, Mr. Appleton and Mr. Okada, with Mr. Lindsey serving
as chairman. The committee met one time during the year ended December 31, 2014.
Each committee member was present at each such meeting. The Compensation
Committees charter can be found on our website.
Compensation Committee Interlocks and Insider
Participation. None of our executive officers served as a member of the
compensation committee (or other board committee performing equivalent functions
or, in the absence of any such committee, the entire board) or as a director of
another entity having an executive officer or officers who served on our
Compensation Committee during the year ended December 31, 2014. Further, none of
our executive officers served as a member of the compensation committee (or
other board committee performing equivalent functions or, in the absence of any
such committee, the entire board) of another entity having an executive officer
who served as one of our directors during the year.
The Compensation Committee did not retain any outside
consultants or advisors during the year ended December 31, 2014.
Corporate Governance and Nominating Committee.
Composition and Responsibilities. Our Corporate
Governance and Nominating Committee is comprised of three or more members of the
Board. The primary functions of the committee are to assess the effectiveness of
the board as a whole, the committees of the Board and its individual members,
periodically review and assess our governance practices, review and assess the
qualifications of nominees to the Board and orient new directors. During the
year ended December 31, 2014, the chairman of the Board evaluated director
performance either by interviewing each director or by having each director
complete and submit a written questionnaire.
The Corporate Governance and Nominating Committee is
responsible for establishing the qualifications and skills necessary for members
of the Board (as well as the skills and competencies the Board needs as a whole)
and procedures for identifying possible nominees who meet these criteria. In
discharging these responsibilities, the Corporate Governance and Nominating
Committee considers diversity, age, skills and such other factors as it deems
appropriate. That said, the committee has not adopted a formal diversity policy;
it only evaluates these factors, and others, without weighting them or giving
them any relative priority. The Corporate Governance and Nominating Committee
considers each individual candidate within the context of the current perceived
needs of the board as a whole.
In the case of incumbent directors, the Corporate Governance
and Nominating Committee reviews their overall service, including the number of
meetings they attended, their level of participation, the quality of their
performance, and any relationships or transactions that might impair their
independence. In the case of new director candidates (which includes director
candidates recommended by our stockholders pursuant to our bylaws), the
Corporate Governance and Nominating Committee would also consider, among other things,
whether the nominee is independent within the meaning of applicable rules,
regulations and listing standards.
40
Neither the Corporate Governance and Nominating Committee nor
the Board paid any fees to any third party to assist in the process of
identifying or evaluating director candidates during the year ended December 31,
2014.
Current Members. The Corporate Governance and Nominating
Committee is presently comprised of Mr. Appleton, Mr. Okada and Mr. McCombe,
with Mr. Okada serving as chairman. The committee met one times during the year
ended December 31, 2014. Each committee member was present at each such meeting.
The Corporate Governance and Nominating Committees charter can be found on our
website.
Environmental Committee.
Composition and Responsibilities. The Environmental
Committee assists the board in overseeing environmental stewardship and is
comprised of three directors, one of whom is designated by the Board to serve as
chair. Its specific responsibilities are to:
|
establish and recommend environmental goals,
policies and programs; |
|
|
|
make inquiries of management concerning our
compliance with applicable environmental laws, rules, regulations and
standards; |
|
|
|
receive reports concerning our compliance with
environmental policies and programs, establish plans to correct any
compliance deficiencies, and report the status of such matters to the
board of directors; |
|
|
|
periodically review the following items with
management: our policies regarding environmental risk assessment and
management; those environmental exposures that pose major financial risk
to us, and the steps management has taken or proposes to take in order to
monitor and control such exposures; the effect of relevant environmental
regulatory initiatives and trends; and material environmental claims,
demands and legal proceedings that have been asserted against us or are
threatened; |
|
|
|
review our environmental record of performance
and any proposed actions based on our record of performance with
management; and |
|
|
|
apprise the Audit Committee of significant
changes in financial risk exposures or potential disclosure issues arising
from or relating to environmental matters. |
Current Members. The Environmental Committee is
presently comprised of Mr. Shanahan, Mr. Appleton and Mr. Lindsey, with Mr.
Appleton serving as chairman. The committee met four times during the year ended
December 31, 2014. Each committee member was present at each such meeting.
Safety Committee.
Composition and Responsibilities. The Safety Committee
assists the Board in overseeing occupational safety issues and is comprised of
three directors, one of whom is designated by the Board to serve as chair. Its
specific responsibilities are to:
41
|
establish and recommend safety goals, policies and
programs; |
|
|
|
make inquiries of management concerning our compliance
with applicable safety laws, rules, regulations and standards; |
|
|
|
receive reports concerning our compliance with safety
policies and programs, establish plans to correct and compliance
deficiencies, and report the status of such matters to the Board;
|
|
|
|
periodically review the following items with management:
our policies regarding safety- related risk assessment and management;
those safety-related exposures that pose major financial risk to us, and
the steps management has taken or proposes to take in order to monitor and
control such exposures; the effect of relevant safety regulatory
initiatives and trends; and material safety-related claims, demands and
legal proceedings that have been asserted against us or are threatened;
|
|
|
|
review our record of performance on safety matters and
any proposed actions based on our record of performance with management;
and |
|
|
|
apprise the Audit Committee of significant changes in
financial risk exposures or potential disclosure issues arising from or
relating to safety matters. |
Current Members. The Safety Committee is presently
comprised of Mr. Shanahan, Mr. McCombe and Mr. Lindsey, with Mr. McCombe serving
as chairman. The committee met four times during the year ended December 31,
2014. Each committee member was present at each such meeting.
Communications to the Board.
Stockholders may communicate directly with the Board or any
director by writing to the Board or a director in care of the corporate
secretary at Revett Mining Company, Inc., 11115 East Montgomery, Suite G,
Spokane Valley, Washington 99206 or by faxing their written communication to the
corporate secretary at (509) 891-8901. Stockholders may also communicate to the
Board or any director by calling the corporate secretary at (509) 921-2294. The
corporate secretary will review any communication before forwarding it to the
Board or the director, as the case may be.
42
Item 11. Executive Compensation.
Summary Compensation Table. The following table
summarizes the compensation for the fiscal years ended December 31, 2014, 2013
and 2012 of our principal executive officer, principal financial officer and our
three other executive officers as of December 31, 2014.
|
|
|
|
Option |
All Other |
|
Name and |
|
Salary |
Bonus(1) |
Awards(2) |
Compensation |
Total |
Principal Position |
Year |
($) |
($) |
($) |
($) |
($) |
John G. Shanahan President and Chief
Executive Officer(3)
|
2014 2013 2012 |
264,000 308,000 322,500 |
- - 87,000 |
34,400 27,920 90,345 |
- - - |
298,400 355,920 499,845
|
Kenneth S. Eickerman(3) Treasurer
and Chief Financial Officer
|
2104 2013 2012 |
140,400 140,400 139,500 |
- - 12,000 |
12,040 13,960 36,138 |
- - - |
152,440 154,360 187,638
|
Douglas Miller(3) Vice President
of Operations
|
2014 2013 2012 |
160,000 160,000 153,331 |
- - 41,500 |
31,410 20,940 45,173 |
- - - |
191,410 180,940 240,004
|
Monique Hayes(3) Secretary
|
2014 2013 2012 |
88,000 88,000 86,625 |
- - 22,000 |
12,040 13,960 36,138 |
- - - |
100,040 101,960 144,763
|
Douglas Stiles |
2014 |
67,917 |
- |
9,705 |
- |
77,622 |
Carson Rife (3)(4)(5) Vice
President and Chief Operating Officer
|
2014 2013 2012 |
- - 223,655 |
- - 51,500 |
- - 54,207 |
- - - |
- - 329,362 |
|
(1) |
Bonuses for the year ended December 31, 2011 relate to
performance during that year but were awarded in April 2012. |
|
|
(2) |
Options awards were valued using the Black-Scholes option
pricing model. For a discussion of the assumptions used in valuing such
option awards, see Note 11 to our consolidated financial statements for
the year ended December 31, 2013 included in this report. There were no
forfeitures of option awards for the years shown. |
|
|
(3) |
Reflects salary compensation paid to each of the named
individuals during the periods reported. See Employment Agreements with
Executive Officers for information concerning the named individuals base
salaries for the year ended December 31, 2013. Mr. Shanahans compensation
also reflects a voluntary temporary salary reduction of 20% beginning in
Q4 |
|
|
(4) |
Mr. Rife resigned from the company on April 30,
2012. |
Grants of Plan-Based Awards. The following table
sets forth information concerning equity incentive plan awards that were granted
to our principal executive officer, principal financial officer and our two
other executive officers during the year ended December 31, 2014. None of the
persons depicted in the table received stock awards or non-equity incentive plan
awards during the year. None of such incentive plan awards are contingent on the
achievement of performance goals.
Grants of Plan-Based Awards |
|
|
Estimated
Future Payouts under |
Other |
|
Grant |
|
|
Equity
Incentive Plan Awards |
Option |
Exercise |
Date |
|
|
Threshold |
Target |
Maximum |
Awards |
Price |
Value |
Name |
Grant Date |
(#) |
(#) |
(#) |
(#) |
($) |
($) |
John G. Shanahan |
3/31/2014 |
- |
n/a |
n/a |
100,000 |
0.79 |
31,410 |
Kenneth S. Eickerman |
3/31/2014 |
- |
n/a |
n/a |
35,000 |
0.79 |
12,040 |
Monique Hayes |
3/31/2014 |
- |
n/a |
n/a |
35,000 |
0.79 |
12,040 |
Douglas Stiles |
5/30/2014 |
- |
n/a |
n/a |
30,000 |
0.77 |
9,705 |
Douglas Miller |
3/31/2014 |
- |
n/a |
n/a |
45,000 |
0.79 |
31,410
|
Outstanding Equity Awards at Fiscal Year-End. The
following table sets forth information concerning the outstanding equity awards
at December 31, 2014 held by our principal executive officer, principal
financial officer and our three other executive officers:
43
Outstanding Equity Awards at Fiscal Year-End |
|
Equity Incentive Plan Awards: |
|
|
|
|
Number of
Securities |
Number
of |
|
|
|
|
|
Securities |
|
|
|
Underlying |
|
Underlying |
|
|
|
Unexercised Options |
|
Unexercised |
Average |
Option |
|
Exercisable |
Un-exercisable |
Unearned Options |
Exercise Price |
Expiration |
Name |
(#) |
(#) |
(#) |
($) |
Dates |
John G. Shanahan |
260,000 |
0 |
0 |
2.45 |
2015-2019 |
Kenneth S. Eickerman |
105,000 |
0 |
0 |
2.62 |
2015-2019 |
Monique Hayes |
95,000 |
0 |
0 |
2.67 |
2016-2019 |
Douglas Stiles |
30,000 |
0 |
0 |
0.77 |
2019 |
Douglas Miller |
151,000 |
0 |
0 |
2.96 |
2015-2019
|
Options Exercised in Last Fiscal Year. Our chief
executive officer and the chairman of our Board each exercised stock options to
purchase 55,000 shares of common stock during the year ended December 31, 2014.
Securities Currently Authorized for Issuance under Equity
Incentive Plans. The following table sets forth information as of
December 31, 2014 concerning securities authorized for issuance pursuant to our
equity compensation plans.
|
|
|
|
|
Number of securities
remaining |
Number of securities to be |
|
available for future
issuance |
issued upon exercise of |
Weighted average
exercise |
under equity
compensation plans |
outstanding options, warrants
|
price of outstanding
options, |
(excluding securities reflected |
and rights |
warrants and rights
|
in column (a))
|
|
|
|
(a) |
(b) |
(c) |
|
|
|
3,076,500 |
$2.50 |
1,930,039
|
Employment Agreements with Executive Officers.
Each of our executive officers has entered into an employment agreement
with our Revett Silver Company first-tier subsidiary. Each agreement is for a
term of three years and is renewable annually thereafter, and each provides for
the payment of salary and medical and other fringe benefits, the award of stock
options, and severance payments in the event the executive officers employment
is terminated without cause, upon the occurrence of a change in control event,
or other than for good reason. A change in control event occurs under the
agreements when a person or entity beneficially acquires 25 percent or more of
voting securities, or when, in a contested election of directors, the persons
who were directors immediately prior to the election contest cease to constitute
a majority of the board of directors. Good reason is defined in each agreement
to mean a material change in the executive officers duties and
responsibilities, a reduction in his or her salary or medical and other fringe
benefits or, following a change in control, our failure to enter into a
reasonably satisfactory replacement employment agreement with the executive
officer.
Our employment agreement with Mr. Shanahan is dated January 1,
2010 and was amended on January 30, 2015. It provides for an annual base salary
of $330,000, subject to periodic adjustments. If Mr. Shanahans employment is
terminated without cause, or, if he is terminated following a change of control
event or other than for good reason, he is entitled to 18 months of salary and
twelve months of benefits. Mr. Shanahan may terminate the agreement unilaterally
upon 5 days notice. On November 15, 2013, Mr. Shanahan agreed to temporarily
reduce his annual base salary to $264,000.
44
Our employment agreement with Mr. Eickerman is dated May 30,
2007 and was amended on January 16, 2010 and again on January 30, 2015. It
provides for a current base salary of $140,400, subject to periodic adjustment.
If Mr. Eickermans employment is terminated without cause, or if he is
terminated following a change of control event or other than for good reason, he
is entitled to 18 months of salary and twelve months of benefits. Mr. Eickerman
may terminate the agreement unilaterally upon 5 days notice.
Our employment agreement with Mr. Miller is dated April 1,
2004, and was amended on September 1, 2009, October 1, 2012 and January 30,
2015. It provides for a current base salary of $160,000, subject to periodic
adjustment. If Mr. Millers employment is terminated without cause, or if he is
terminated following a change of control event or other than for good reason, he
is entitled to 18 months of salary and twelve months of benefits. Mr. Miller may
terminate the agreement unilaterally upon five days notice.
Our employment agreement with Ms. Hayes is dated December 1,
2010 and was amended on January 30, 2015. It provides for a current base salary
of $88,000, subject to periodic adjustment. If Ms. Hayess employment is
terminated without cause, or if she is terminated following a change of control
event or other than for good reason, she is entitled to 18 months of salary and
twelve months of benefits. Ms. Hayes may terminate the agreement unilaterally
upon five days notice.
Our employment agreement with Mr. Stiles is dated May 30. 2014
and was amended on January 30, 2015. It provides for a current base salary of
$125,000, subject to periodic adjustment. If Mr. Stiles employment is
terminated without cause, or if he is terminated following a change of control
event or other than for good reason, he is entitled to 18 months of salary and
twelve months of benefits. Mr. Stiles may terminate the agreement unilaterally
upon five days notice.
Compensation of Directors. The following table
sets forth information concerning the compensation of our directors for the
fiscal year ended December 31, 2014. Mr. Shanahan was also an executive officer
during the year.
Director Compensation |
|
|
|
All Other |
|
|
Fees |
Option
Awards(1) |
Compensation |
Total |
Name |
($) |
($) |
($) |
($) |
John G. Shanahan |
0 |
0 |
0 |
0 |
John B. McCombe |
35,280 |
17,200 |
0 |
52,480 |
Albert F. Appleton |
36,000 |
17,200 |
0 |
53,200 |
Timothy R. Lindsey |
146,000 |
25,800 |
0 |
171,800 |
Larry M. Okada |
47,880 |
17,200 |
0 |
65,080
|
____________________
Notes:
(1) |
Options awards were valued using the Black-Scholes option
pricing model. For a discussion of the assumptions used in valuing such
option awards, see Note 11 to our consolidated financial statements for
the year ended December 31, 2014 included in this
report. |
We modified our director compensation effective April 1, 2012.
We now pay each director other than Mr. Shanahan an annual retainer of $25,000,
and pay the chairman of the board of directors an annual retainer of $150,000.
In addition, we also pay a $15,000 retainer to the chairs of the Audit Committee
and the Environmental Committee, a $10,000 retainer to the chair of the Safety
Committee and a $7,500 retainer to the chairs of the Compensation Committee and
Corporate Governance and Nominating Committee.
During 2013 and 2014, the Board elected to waive the meeting
fees, the chairmans retainer was reduced by 20% to $120,000 and all other Board
members retainers were reduced by 10%. We reimburse the directors for travel
expenses incurred in connection with their attendance at board and committee
meetings.
45
Stock Option Plans.
We maintain an equity incentive plan (the Plan) that provides
for the issuance of stock options, stock appreciation rights and shares of
common stock in satisfaction of amounts owing for services. The Plan was adopted
by our stockholders on June 19, 2007, was amended on June 16, 2009 and again on
June 21, 2011, and is administered by the Compensation Committee and by the
board of directors. The material provisions of the Plan and other relevant
information are as follows:
|
Our directors, executive officers, employees and
consultants, including those of our subsidiaries, are eligible to
participate in the Plan. |
|
|
|
A maximum of 6,500,000 shares of common stock,
representing approximately 17% of our issued and outstanding shares as of
the date of this report, are available for issuance under the Plan.
|
|
|
|
Options for the purchase of a total of 3,076,500 shares
of common stock, representing approximately 8% of our issued and
outstanding shares as of the date of this report, have been granted and
are outstanding under the Plan. |
|
|
|
The maximum number of shares that may be granted to any
one individual under the Plan, together with any shares reserved for
issuance to such individual under any other stock option plan or
arrangement, may not exceed 5% of our outstanding shares. In addition, the
maximum number of shares of common stock that may be granted to insiders
under all share compensation arrangements may not exceed 10% of our issued
and outstanding shares, and the maximum number of shares issued to
insiders within a one year period under all share compensation
arrangements may not exceed 10% of our issued and outstand shares.
|
|
|
|
The purchase price or exercise price of a share of common
stock reserved for issuance pursuant to options granted under the Plan is
determined by the board of directors, taking into account the applicable
rules of the exchanges on which the stock is listed for trading. In no
event can the price be less than the closing price of our common stock on
the trading date immediately preceding the date of grant. |
|
|
|
We may grant a stock appreciation right under the Plan at
the time an option is granted, or any time during the term of an option.
Upon exercise of a stock appreciation right, the related option is
cancelled to the extent it is unexercised, and the holder is entitled to
receive payment of an amount equal to the difference between the then
current market price and the exercise price. Payment of the appreciated
value of the common stock may be made in in cash, in common stock or a
combination thereof, in the discretion of the Compensation Committee and
the board of directors. When an option is exercised, any related stock
appreciation right is cancelled. We had not granted any stock appreciation
rights as of the date of this report. |
|
|
|
Options vest at such times as the Compensation Committee
or the Board determine at the time of grant, provided that, subsequent to
the time of grant, the Compensation Committee or the Board may in their
discretion permit an optionee to exercise any or all unvested options.
|
|
|
|
No option can have a term of more than ten years from the
date of grant. |
|
|
|
Each option must specify the effect of termination of
employment on the holders right to exercise the option. With respect to
those options that have been granted as of the date of this report, the
termination of an optionees employment for cause or his or her
resignation for other than good reason terminates any unexercised options
he or she may hold. If an optionee's employment is terminated for reasons
other than for cause or because of death or disability, or if an optionee
resigns for good reason, then the unexercised options generally may be
exercised for a period of one year following termination, but in no event
after the expiration date of the option, subject to the discretion of the
Board to amend such provisions provided such amendment is not detrimental
to the holder. |
46
|
Options granted pursuant to the Plan are non-assignable
otherwise than by will or the laws of descent and distribution.
|
Subject to the provisions below, our Board may at any time
amend, suspend or terminate the Plan or any portion thereof, or awards or grants
made thereunder, provided that no change that would impair the rights of the
grantee or optionee may be made to any previously made award or grant without
the consent of the affected optionee or grantee. Without limiting the generality
of the foregoing, the Board may make the following types of amendments to the
Plan or awards or grants made thereunder without stockholder approval:
|
amendments of a ministerial nature including amendments
to cure an ambiguity, error or omission in the Plan, or to correct or
supplement any provision of the Plan that is inconsistent with any other
provision of the Plan; |
|
|
|
amendments necessary to comply with the provisions of
applicable law; |
|
|
|
amendments concerning administration of the Plan;
|
|
|
|
amendments relating to the vesting provisions of the Plan
or any option; |
|
|
|
amendment of the early termination provisions of the Plan
or any option, whether or not such option is held by an insider, provided
such amendment does not entail an extension beyond the original expiration
date; |
|
|
|
any amendment to the termination provisions of the Plan
or any option, other than an amendment extending the term of an option,
provided any such amendment does not entail an extension of the expiration
date of such option; |
|
|
|
the addition or modification of any form of financial
assistance by the company; |
|
|
|
the addition or modification of a cashless exercise
feature, payable in cash or in common stock, whether or not there is a
full deduction of the number of underlying shares from the Plan reserve;
and |
|
|
|
any other amendments that may be implemented without
stockholder approval under applicable law. |
Stockholder approval is required for the following types of
amendments to the Plan or awards or grants made thereunder:
|
any increase in the number of common shares issuable
under the Plan, including an increase to a fixed maximum number of shares
of common stock or a change from a fixed maximum number shares to a fixed
maximum percentage; |
|
|
|
any amendment which reduces the exercise price of an
option or a cancellation and grants the option at a lower price less than
three months after the related cancellation; |
47
|
any amendment extending the term of an option
beyond its original expiration date; |
|
|
|
any amendment broadening any limits imposed on
non-employee director participation under the Plan; |
|
|
|
any amendment concerning the transferability or
assignability of awards or options under the Plan, other than for normal
estate settlement purposes; and |
|
|
|
other amendments required to be approved by
stockholders under applicable law. |
Compensation Committee Report. The Compensation
Committee has reviewed and discussed the Compensation Discussion and Analysis
set forth in this report. Based upon review of the discussion herein, the
Compensation Committee recommended to the Board that the Compensation Discussion
and Analysis be included in this report.
Respectfully submitted, members of the Compensation
Committee
Timothy R. Lindsey (Chairman)
Albert F. Appleton
Larry
Okada
Compensation Discussion and Analysis.
Compensation Philosophy and Policies. Our executive
compensation program is designed to attract and retain the best possible
executive talent and to provide an economic framework to compensate executives
and senior management to meet our business goals and objectives. Base
compensation is comprised of salary and an annual stock option award. Incentive,
or bonus compensation, is based upon overall corporate performance for the
previous financial year and adjusted for specific individual performance.
Incentive compensation is issued as either cash or stock, or a combination of
both.
The key elements to executive base compensation is an annual
base salary along with an annual stock option award. The level of overall base
compensation is predicated on the position held, the executive officers
experience, and the market for executive talent. Executive officers and senior
management are eligible to receive bonus compensation in the form of cash or
stock. Bonus compensation is reviewed by the Compensation Committee at the end
of each financial year and is based primarily on the following criteria and
individuals overall performance:
Criteria |
Relative |
|
Importance |
|
|
Safety
Performance |
40% |
Production/Resource Management
|
20% |
Cash
Flow/Profitability |
20% |
Share Price/Market Performance
|
20% |
Our chief executive officer
typically makes recommendations to the Compensation Committee concerning
individual annual base salary levels and incentive bonuses, which are then
reviewed and submitted to the full board of directors for approval. The
Compensation Committee makes its own recommendation concerning the chief
executive officers compensation. The Board has traditionally maintained base
compensation at levels roughly in line with those of other companies within our
industry peer group.
48
The Compensation Committee and the Board did not award cash
bonuses during the year ended December 31, 2014.
Compensation of the Principal Executive Officer. Mr.
Shanahans annual base salary has been temporarily reduced and is currently
$264,000. During the year ended December 31, 2014, Mr. Shanahan was awarded
100,000 stock options with an exercise price of $0.79 per share. These stock
options vested on March 31, 2014, expire on March 31, 2019 and had a
BlackScholes fair value of $34,400 at the time they were issued. Mr. Shanahan
did not receive a bonus for 2014.
Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters.
Equity Compensation Plan Information. The
following table sets forth certain information concerning options that have been
granted pursuant to the Plan as of December 31, 2014.
Revett Mining Company, Inc. Incentive Stock
Option Plans |
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
|
|
|
average exercise
|
|
|
Number of shares
|
|
|
|
|
|
|
price of |
|
|
remaining available
for |
|
|
|
Number of Shares to
be |
|
|
outstanding |
|
|
issuance under the
plan |
|
|
|
issued upon exercise
|
|
|
options, |
|
|
at year end |
|
Revett Mining Company, Inc.
Incentive Plan (approved by stockholders) |
|
3,076,500 |
|
$ |
2.50 |
|
|
1,930,039 |
|
This table does not include 2,249,349 stock purchase warrants
at $1.00 strike price issued to investors and outstanding at December 31, 2014.
Security Ownership of Certain Beneficial Owners.
The following table sets forth as of March 30, 2015 the names and
address of, and number of shares beneficially owned by persons other than our
directors and executive officers who are known to us to own more than five
percent (5%) of our outstanding shares of common stock. At such date, 39,273,989
common shares were outstanding. An additional 3,076,500 shares were issuable at
such date pursuant to presently exercisable options and an additional 2,249,549
shares were issuable pursuant to presently exercisable warrants.
|
|
|
|
|
|
|
|
Amount and Nature of
|
|
|
|
|
|
|
|
|
|
Ownership (all direct
|
|
Name of Beneficial Owner |
|
|
|
|
|
|
|
unless otherwise
noted) |
|
Address of Owner |
|
Percent |
|
|
Class of Security
|
|
|
of Class |
|
|
|
|
|
|
|
|
|
|
|
Silver Wheaton Corp. 666
Burrard Street, Suite 3400 Vancouver, British Columbia V6C 2X8 |
|
13.5% |
|
|
common stock
|
|
|
5,285,979 |
|
|
|
|
|
|
|
|
|
|
|
Trafigura Beheer B.V. Van
Heuven Goedhartlaan 937 P.O. Box 74135 1070 BC Amsterdam, The Netherlands
|
|
10.6% |
|
|
common stock
|
|
|
4,147,435
(1) |
|
(1) Consists of 3,987,179 shares of common
stock and presently exercisable warrants to purchase 160,256 shares.
49
Security Ownership of Management. The following
table sets forth as of March 30, 2015 the names of, and number of shares of our
outstanding common stock beneficially owned by our directors and executive
officers, and the number of shares owned by our directors and officers as a
group.
|
|
Amount and Nature
of |
|
|
|
Beneficial
Ownership |
|
|
|
(all direct unless
otherwise |
|
Name of Director
or Officer |
Class of
Security |
noted) |
Percent of Class |
|
|
|
|
John G.
Shanahan |
common stock |
908,789
(1) |
2.3% |
Kenneth S. Eickerman |
common stock |
117,278 (2) |
less than 1% |
Douglas Stiles
|
common stock |
30,000 (9) |
less than 1%
|
Douglas Miller |
common stock |
157,666 (3) |
less than 1% |
Monique Hayes
|
common stock |
96,000
(4) |
less than 1%
|
Timothy R. Lindsey |
common stock |
1,562,709 (5) |
4.0% |
Albert F.
Appleton |
common stock |
203,393
(6) |
less than 1%
|
Larry M. Okada |
common stock |
211,004 (7) |
less than 1% |
John B. McCombe
|
common stock |
201,004
(8) |
less than 1%
|
All directors and officers |
|
|
|
as a group (8
persons) |
common stock |
3,532,843
(10) |
9.0%
|
(1) |
Consists of 584,687 shares of common stock,
presently exercisable options to purchase 260,000 shares and presently
exercisable warrants to purchase 64,102 shares. |
(2) |
Consists of 12,278 shares of common stock and
presently exercisable options to purchase 105,000 shares. |
(3) |
Consists of 6,666 shares of common stock and
presently exercisable options to purchase 151,000 shares. |
(4) |
Consists of 1,000 shares of common stock and
presently exercisable options to purchase 95,000 shares. |
[Footnotes are continued on the following
page.] |
(5) |
Consists of 1,167,453 shares of common stock,
presently exercisable options to purchase 235,000 shares and presently
exercisable warrants to purchase 160,256 shares. |
(6) |
Consists of 23,393 shares of common stock and
presently exercisable options to purchase 180,000 shares. |
(7) |
Consists of 1,004 shares of common stock and
presently exercisable options to purchase 210,000 shares. |
(8) |
Consists of 1,004 shares of common stock and
presently exercisable options to purchase 200,000 shares. |
(9) |
Consists of presently exercisable options to
purchase 30,000 shares |
(10) |
See notes (1) through (8), above.
|
Changes in Control. Apart from our proposed
merger transaction with Hecla described elsewhere in this report, we do not know
of any arrangement that would result in a change in control of the Company.
50
Item 13. Certain Relationships and Related
Transactions, and Director Independence.
Related Party Transactions. Trafiguara AG has a
contract to purchase the silver and copper concentrates produced at Troy.
Trafigura Beheer B.V., which is affiliated with Trafigura AG, is the beneficial
owner of more than five percent of our outstanding common shares, and is
therefore a related party. Trafigura AG paid us $52 million for these
concentrates during the twelve months ended December 31, 2012; it did not pay us
anything during the comparable period in 2013 and 2014, owing to the fact that
we produced no concentrate at Troy during the period. We believe the terms and
conditions of our contract with Trafigura AG are neither more favorable nor less
favorable than the terms and conditions we could have obtained from unrelated
concentrate purchasers.
Item 14. Principal Accounting Fees and Services.
Audit Fees. During the fiscal year ended December
31, 2014 and 2013, BDO USA, LLP (BDO), Spokane, Washington, our independent
registered accounting firm, billed us $192,000 and $164,000, respectively, for
professional services for the audit of our consolidated financial statements.
Audit-Related Fees. During the fiscal years ended
December 31, 2014 and 2013, BDO did not perform or bill us for any other audit
related services.
Tax Fees. During the fiscal years ended December
31, 2014 and 2013, BDO did not perform or bill us for any tax compliance, tax
advice or tax planning services.
All Other Fees. During the fiscal years ended
December 31, 2014 and 2013, BDO did not perform or bill us for any other
services.
51
PART IV
Item 15. Exhibits and Financial Statement Schedules.
Financial Statements. The consolidated financial
statements are included in elsewhere in this report.
Exhibits. The following exhibits are filed as
part of this report or included herein by reference to previous filings:
Exhibit No. |
Exhibit
|
|
|
2.1 |
Agreement and Plan of Reorganization dated February 2,
2005, and the exhibits thereto, by and between Revett Silver Company and
Revett Minerals Inc. Previously filed as Exhibit 2.1 to the registrants
registration statement on Form 10 dated July 20, 2007. |
|
|
2.2 |
Form of Special Resolution approved by the registrants
stockholders at a special meeting of stockholders on January 24, 2014.
Previously filed as Exhibit 2.2 to the registrants registration statement
on Form S-4 dated November, 2013. |
|
|
2.3 |
Certificate of Corporate Domestication as filed with the
Secretary of State of Delaware. Previously filed as Exhibit 2.3 on Form 10
K dated March 27, 2014. |
|
|
3.1 |
Articles of Incorporation of Revett Minerals Inc.
Previously filed as Exhibit 3.1 to the registrants registration statement
on Form 10 dated July 20, 2007. |
|
|
3.2 |
Bylaws of Revett Minerals Inc. Previously filed as
Exhibit 3.2 to the registrants registration statement on Form 10 dated
July 20, 2007. |
|
|
3.3 |
Certificate of Incorporation of Revett Mining Company,
Inc. as filed with the Secretary of State of Delaware. Previously filed as
Exhibit 3.3 on Form 10 K dated March 27, 2014. |
|
|
3.4 |
Bylaws of Revett Mining Company, Inc. Previously filed as
Exhibit 3.4 to the registrants registration statement on Form S-4 dated
November 2013. |
|
|
4.1 |
Amended and Restated Rights Agreement between Revett
Minerals Inc. and Computershare Investor Services Inc. dated April 15,
2013. Previously filed as Exhibit 99.1 to the registrants Current Report
on Form 8-K dated April 17, 2013. Also filed as Appendix B to Revett
Minerals Inc.s proxy statement on Schedule 14A dated April 29, 2013.
|
|
|
10.1 |
Asset Purchase and Sale Agreement dated February 21,
2000, as amended, by and among Kennecott Montana Company, Sterling Mining
Company (now Revett Silver) and Genesis Inc. Previously filed as Exhibit
10.1 to Revett Minerals Inc.s Annual Report on Form 10-K dated March 29,
2013. |
|
|
10.2 |
Agreement dated October 13, 2004 by and between Revett
Silver Company and Royal Gold, Inc. Previously filed as Exhibit 10.2 to
Revett Minerals Inc.s registration statement on Form 10 dated July 20,
2007. |
52
10.3 |
Production Payment Agreement dated October 13, 2004, by
and between Genesis Inc. (now Troy Mine, Inc.) and Royal Gold, Inc.
Previously filed as Exhibit 10.3 to Revett Minerals Inc.s registration
statement on Form 10 dated July 20, 2007. |
|
|
10.4 |
Revett Minerals Inc. Amended and Restated Equity
Incentive Plan dated June 21, 2011. Previously filed as Exhibit 10.4 to
Revett Minerals Inc.s annual report on Form 10-K dated March 29, 2013.
|
|
|
10.5 |
Employment Agreement dated February 1, 2004 by and
between Carson Rife and the registrant. Previously filed as Exhibit 10.7
to Amendment No. 1 to the registrants registration statement on Form 10
dated September 21, 2007. |
|
|
10.6 |
Employment Agreement dated January 1, 2010 by and between
John Shanahan and Revett Silver Company. Previously filed as an exhibit to
Revett Minerals Inc.s Current Report on Form 8-K dated January 22, 2010.
|
|
|
10.7 |
Employment Agreement dated January 16, 2010 by and
between Kenneth Eickerman and Revett Silver Company. Previously filed as
an exhibit to Revett Minerals Inc.s Current Report on Form 8-K dated
January 22, 2010. |
|
|
10.8 |
Employment Agreement dated December 1, 2010 by and
between Monique Hayes and Revett Silver Company. Previously filed as
Exhibit 10.8 on Form 10 K dated March 27, 2014. |
|
|
10.9 |
Credit Agreement dated December 8, 2011 by and among
Revett Minerals Inc., Revett Silver Company, Troy Mine Inc., RC Resources,
Inc. and Societe Generale, in its capacity as administrative agent and
letter of credit issuer. Previously filed as Exhibit No. 16.3 to Revett
Minerals Inc.s Current Report on Form 8-K dated December 12, 2011.
|
|
|
10.10 |
Amendment No. 1, dated August 7, 2012, to Credit
Agreement dated December 8, 2011 by and among Revett Minerals Inc., Revett
Silver Company, Troy Mine Inc., RC Resources, Inc. and Societe Generale,
in its capacity as administrative agent and letter of credit issuer.
Previously filed as Exhibit 10.13 to Revett Minerals Inc.s Annual Report
on Form 10-K dated March 29, 2013. |
|
|
10.11 |
Amendment No. 2 and Guarantor Joinder, dated December 13,
2012 to Credit Agreement dated December 8, 2011 by and among Revett
Minerals Inc., Revett Silver Company, Troy Mine Inc., RC Resources, Inc.
and Societe Generale, in its capacity as administrative agent and letter
of credit issuer. Previously filed as Exhibit 10.14 to Revett Minerals
Inc.s Annual Report on Form 10-K dated March 29, 2013. |
|
|
10.12 |
Amendment No. 3 and Guarantor Joinder, dated February 28,
2013 to Credit Agreement dated December 8, 2011 by and among Revett
Minerals Inc., Revett Silver Company, Troy Mine Inc., RC Resources, Inc.
and Societe Generale, in its capacity as administrative agent and letter
of credit issuer. Previously filed as Exhibit 10.15 to Revett Minerals
Inc.s Annual Report on Form 10-K dated March 29, 2013. |
|
|
10.13 |
Employment Agreement dated April 1, 2004 by and between Douglas Miller and Revett Silver Company. Filed herewith. |
53
10.14 |
Employment Agreement dated May 30, 2014 by and between Douglas Stiles and Revett Silver Company. Filed herewith. |
|
|
10.15 |
Loan Agreement dated August 26, 2014 by and between CAT Financial, Inc. and Troy Mine Inc. Filed herewith. |
|
|
10.16 |
Amendment to Employment Agreement dated January 30, 2015 by and between John Shanahan and Revett Silver Company. Filed herewith. |
|
|
10.17 |
Amendment to Employment Agreement dated January 30, 2015 by and between Kenneth Eickerman and Revett Silver Company. Filed herewith. |
|
|
10.18 |
Amendment to Employment Agreement dated January 30, 2015 by and between Douglas Miller and Revett Silver Company. Filed herewith. |
|
|
10.19 |
Amendment to Employment Agreement dated January 30, 2015 by and between Monique Hayes and Revett Silver Company. Filed herewith. |
|
|
10.20 |
Amendment to Employment Agreement dated January 30, 2015 by and between Douglas Stiles and Revett Silver Company. Filed herewith. |
|
|
10.21 |
Agreement and Plan of Merger, dated March 26, 2015 by and
among Revett Mining Company, Inc., Hecla Mining Company and RHL Holdings,
Inc. Previously filed as Exhibit 2.1 to Revett Mining Companys Current
Report on Form 8-K dated March 26, 2015. |
|
|
14.1 |
Code of ethics. Previously filed as Exhibit 14.1 on Form
10 K dated March 27, 2014. |
|
|
21.1 |
Subsidiaries of the registrant. Previously filed as
Exhibit 21.1 to Revett Minerals Inc.s registration statement on Form 10
dated July 20, 2007 and filed in amended form (to reflect the formation of
Revett Exploration, Inc. and Revett Holdings, Inc. during the year ended
December 31, 2012) as Exhibit 21.1 to Revett Minerals Inc.s Annual Report
on Form 10-K dated March 29, 2013. |
|
|
23.1 |
Consent of BDO USA, LLP. Filed herewith. |
|
|
31.1 |
Certification of the registrants principal executive officer. Filed herewith. |
|
|
31.2 |
Certification of the registrants principal financial officer. Filed herewith. |
|
|
32.1 |
Certification of the registrants principal executive officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002. Filed herewith. |
|
|
32.2 |
Certification of the registrants principal financial officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002. Filed herewith. |
54
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
|
Revett Minerals Inc. |
|
|
Date: March 30, 2015 |
/s/ John G. Shanahan
|
|
|
|
John G. Shanahan, its president
and |
|
principal executive officer
|
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
Date: March 30, 2015 |
/s/ Kenneth S. Eickerman |
|
|
|
Kenneth S. Eickerman, its treasurer and |
|
principal accounting officer
|
55
Exhibit 10.13
EMPLOYMENT AGREEMENT
THIS AGREEMENT, is made effective the 1st day of
October, 2012 between REVETT SILVER COMPANY, a Montana Corporation with
its principal office in Spokane, Washington, herein referred to as the
"Corporation", and Douglas P. Miller of Troy, Montana, herein referred to as the
"Employee."
In consideration of the mutual covenants and benefits as herein
set forth, the parties hereto agree as follows:
SECTION ONE
EMPLOYMENT
The Corporation hereby employs the Employee as Vice President
of Operations and the Employee hereby accepts such employment and agrees to
devote all of his efforts for the benefit of the Corporation and to faithfully,
industriously, and to the best of his ability, experience and talents, perform
all of his required and assigned duties. Employee shall perform his duties
subject to the general supervision and pursuant to the orders, advice and
direction of the President and CEO of Revett Silver Company, Inc.
SECTION TWO TERM OF
EMPLOYMENT
The term of employment under the Agreement shall be for a
period of three years commencing October 1, 2012, and ending midnight October 1,
2015, but shall continue from year-to-year thereafter unless terminated as
hereinafter provided.
SECTION THREE
COMPENSATION
The Corporation shall pay Employee, and the Employee shall
accept from the Corporation, compensation at the minimum combined rate of U.S.
$160,000 per year prorated and payable monthly or on such other basis as the
parties may hereafter agree. Such minimum compensation may be adjusted for merit
or other raises as from time to time may be determined by the Committee of the
Board thereof having such authority. Employee shall be entitled to vacation
periods in line with the policies of the Corporation applicable to exempt
employees, provided, however, that the Employee Shall be entitled to a minimum
paid vacation of four (4) weeks in any calendar year. If the Employee fails to use all vacation days in any calendar
year, Employee shall be permitted to carry over those vacation days into the
next two calendar years.
1
SECTION FOUR
OTHER BENEFITS
In addition to the compensation as provided in the previous
Section Three hereof, the Corporation shall at its expense provide for Employee
the following additional benefits:
1. |
Participation in all of the Corporation's benefits, now
or hereafter in effect, including medical, dental, vision, 40lK plan,
retirement plan, disability plan, bonuses, Equity Incentive Plan and any
and all other plans that may be made available to employees. |
|
|
2. |
Payment of dues in professional associations as may be
required to maintain his membership in those associations and the
privilege of attending appropriate seminars, conferences and education
programs as may be necessary. |
|
|
3. |
Reimbursement for all expenses incurred in connection
with the performance of services to the Corporation, including
entertainment and travel and other expenses incident to the duties
undertaken hereunder; provided, however, that such expenses shall be
reasonable and necessary and that Employee shall submit bills and vouchers
supporting all requests for reimbursements in accordance with the
Corporation's policies. |
SECTION FIVE
TERMINATION
The Agreement will terminate or may be terminated by any one of
the following reasons:
1. |
Voluntarily and without cause, subject to Sections Two
and Six, upon at least one (1) months prior written notice of termination
by Corporation to the Employee or by the Employee to the Corporation;
or |
|
|
2. |
By the Corporation for cause as hereinafter defined in
Section Ten; or |
|
|
3. |
Upon the Death or Disability of Employee. |
|
|
4. |
Upon a Change of Control. |
|
|
5. |
Upon Retirement. |
2
SECTION SIX
SEVERANCE COMPENSATION
1. |
Termination by Employee or by Corporation With
Cause |
If Employee voluntarily terminates his
employment under the Agreement pursuant to Section Five (1) or if the employment
of the Employee is terminated by the Corporation for cause, then all
compensation and benefits as heretofore provided in Sections Three and Four
shall terminate immediately upon the effective date of termination and no
special severance compensation will be paid.
2. |
Termination by Corporation Without
Cause |
If the Corporation terminates the
Agreement for any reason except for cause as defined in Section Ten then upon
the termination of the Employee's employment under the Agreement, the
Corporation shall pay an amount equal to eighteen months (18) of salary. The
amount shall be paid in one lump sum on the date the Employee's services
terminate. All employee benefits provided to the Employee shall be continued as
if the Employee was still an employee of the Corporation, for a period of one
(1) year from the date of termination or replacement of equal or better benefits
from a new employer. In the event Employee has existing stock options, they will
be honored in accordance with the terms of said options.
3. |
Termination by Death or
Disability |
If Employee dies before his employment
hereunder or is otherwise terminated, the Corporation shall immediately pay to
his beneficiary (to be named in writing by the Employee on signing of the
Agreement and confirmed if changed by him at any subsequent time, in writing,
addressed to the secretary of the Corporation) an amount of compensation equal
to twelve (12) months' salary. If no named beneficiary survives him, the entire
amount due him shall be paid to his estate. Said compensation shall be in
addition to that payable from any insurance coverage providing for compensation
upon Death or Disability. If Employee becomes disabled, he shall be entitled to
receive an amount of compensation equal to twelve (12) month's salary.
"Disability" in the Agreement means a condition of physical or mental illness
causing one to be totally incapable of performing full- time duties for a period
longer than six months.
4. |
Termination Following Change of
Control |
|
(a) |
For purposes of the Agreement a Change in Control shall
be deemed to have occurred if (A) any individual partnership, firm,
entity, corporation, association, trust, unincorporated organization or
other entity, or any syndicate or group deemed to be a person under
Section 14(d) (2) of the Exchange Act, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 of the General Rules and Regulations
under the Exchange Act), directly or indirectly, of securities of the
Corporation representing 25% or more of the combined voting power of the
Corporation's then outstanding securities entitled to vote in the election
of directors of the Corporation; or (B) as a result of or in connection
with a contested election of directors, the persons who were directors of
the Corporation before such election shall cease to constitute a majority
of the Board. |
3
|
(b) |
Irrespective of any other provisions in the Agreement
regarding termination, if any of the events described above constituting a
Change in Control shall have occurred and upon the subsequent termination
of Employee's employment during the term of the Agreement, unless such
termination is because of Employee's Death, Disability or by the
Corporation for cause or by Employee for other than "Good Reason,"
Employee shall be entitled to and will receive no later than the fifth
(5th) day following the date of termination a lump sum severance payment
in an amount equal to three year's salary. In addition, all benefits then
applicable to Employee shall be continued for a period of twelve (12)
months. |
|
|
|
|
(c) |
Employee shall be entitled to terminate his employment
for Good Reason. For purposes of the Agreement, "Good Reason" means,
without Employee's express written consent, any of the
following: |
(i) the
assignment to Employee of any duties inconsistent with Employee's position, or
Employee's removal from such position, or a substantial alteration in the nature
or status of Employee's responsibilities from those in effect immediately prior
to the Change in Control;
(ii) a
reduction by the Corporation in Employee's annual base salary as in effect on
the date hereof or as the same may be increased from time to time or a failure
by the Corporation to increase Employee's salary at a rate commensurate with
that of other key executives of the Corporation;
(iii) the failure by the
Corporation to continue to provide Employee with benefits at least as favorable
to those enjoyed by Employee under any of the Corporation's life insurance,
medical, health and accident, disability, deferred compensation, pension, if
any, or savings plans in which Employee was participating at the time of the
Change in Control, the taking of any action by the Corporation which would
directly or indirectly materially reduce any of such benefits or deprive
Employee of any material fringe benefit enjoyed by Employee at the time of the
Change in Control, or the failure by the Corporation to provide Employee with
the number of paid vacation days to which Employee is entitled on the basis of
years of service with the Corporation in accordance with the Corporation's
normal vacation policy in effect at the time of the Change in Control;
4
(iv) the failure of the Corporation to
obtain a satisfactory agreement from any successor to assume and agree to
perform the Agreement or if the business of the Corporation for which Employee's
services are principally performed is sold at any time after a Change in
Control, the purchaser of such business fails to agree to provide Employee with
the same or a comparable position, duties, salary and benefits as provided to
Employee by the Corporation immediately prior to the Change in Control;
SECTION SEVEN NON-
TRANSFERABILITY
This is a personal agreement. No Employee's rights, benefits or
interests hereunder may be subject to sale, anticipation, alienation,
assignment, encumbrance, charge, pledge, hypothecation, transfer, or set-off in
respect of any claim, debt or obligation or to execution, attachment, levy or
similar process, or assignment by operation of law. Any attempt, voluntary or
involuntary, to effect any such action shall be null and void and of no effect.
SECTION EIGHT
CHOICE OF LAW
It is the intention of the parties hereto that the Agreement
and the performance hereunder and all suits and special proceedings hereunder he
construed in accordance with and under and pursuant to the laws of the State of
Montana, and that in any action, special proceeding or other proceeding that may
be brought arising out of, in connection with, or by reason of the Agreement,
the laws of the State of Montana, shall be applicable and shall govern to the
exclusion of the law of any other forum, without regard to the jurisdiction in
which any action or special proceeding may be instituted.
SECTION NINE
BINDING EFFECT
The Agreement shall be binding upon and shall inure to the
benefit of the Corporation and to its successors or assigns and to Employee and
his personal representative, heirs, executors and administrators.
5
SECTION TEN
DEFINITION OF CAUSE
Cause to terminate the Employee's employment shall mean (a) the
willful and continued failure by the Employee to substantially perform her
duties, after demand for substantial performance as delivered by the Corporation
that specifically identifies the manner in which the Corporation believes the
Employee has not substantially performed his duties, or (b) the willful engaging
by the Employee of misconduct which is materially injurious to the Corporation,
monetarily or otherwise, or (c) the willful violation by the Employee of the
provisions of the Employment Agreement.
Notwithstanding the foregoing, the Employee shall not be deemed
to have been terminated for cause unless there shall have been delivered to the
Employee a copy of a notice of termination from the Corporation after reasonable
written notice to the Employee and an opportunity for the Employee, together
with counsel for the Employee, to be heard before the Board of Directors of the
Corporation, accompanied by a resolution duly adopted by the Directors of the
Corporation then in office, who find that in the good faith opinion of such
directors, the Employee was guilty of conduct set forth above and shall set
forth in particular detail the facts and circumstances claimed to provide a
basis for termination of employment under the provisions so indicated.
SECTION ELEVEN
DIRECTORSHIPS
The Employee shall be entitled to accept a position as a
director of other corporations, whether such corporations are engaged in the
mining industry or not provided any such directorship is first approved by the
Corporation, such approval not to be unreasonably withheld.
SECTION TWELVE
CONFIDENTIALITY
Employee agrees that except as required for the performance of
his duties, obligations and responsibilities hereunder, he will not at any time
during the term of the Agreement or thereafter divulge to any person, firm or
corporation any Confidential Information received by him during the course of
her employment and all such Confidential Information shall be kept confidential
and deemed the property of the Corporation. For the purpose of the provision,
Confidential Information means information known to the Employee as a
consequence of her employment by the Corporation and not generally known in the
industry in which the Corporation is engaged or otherwise available to third
parties from sources unrelated to or controlled by the Corporation.
6
IN WITNESS WHEREOF, the parties have executed the Agreement at
Spokane Washington, effective on the day and year first above written.
EMPLOYEE
Name: Douglas P. Miller
7
Exhibit 10.14
EMPLOYMENT AGREEMENT
THIS AGREEMENT, is made effective the 1st day of August,
2014 between REVETT SILVER COMPANY, a Montana Corporation with its
principal office in Spokane, Washington, herein referred to as the
"Corporation", and Douglas Stiles of Liberty Lake, Washington, herein referred
to as the "Employee."
In consideration of the mutual covenants and benefits as herein
set forth, the parties hereto agree as follows:
SECTION ONE
EMPLOYMENT
The Corporation hereby employs the Employee as Vice President
of Planning and the Employee hereby accepts such employment and agrees to devote
all of his efforts for the benefit of the Corporation and to faithfully,
industriously, and to the best of his ability, experience and talents, perform
all of his required and assigned duties. Employee shall perform his duties
subject to the general supervision and pursuant to the orders, advice and
direction of the President and CEO of Revett Silver Company, Inc.
SECTION TWO TERM OF
EMPLOYMENT
The term of employment under the Agreement shall be for a
period of three years commencing August 1, 2014, and ending midnight July 31st,
2017, but shall continue from year-to-year thereafter unless terminated as
hereinafter provided.
SECTION THREE
COMPENSATION
The Corporation shall pay Employee, and the Employee shall
accept from the Corporation, compensation at the minimum combined rate of U.S.
$125,000 per year prorated and payable monthly or on such other basis as the
parties may hereafter agree. Such minimum compensation may be adjusted for merit
or other raises as from time to time may be determined by the Committee of the
Board thereof having such authority. Employee shall be entitled to vacation
periods in line with the policies of the Corporation applicable to exempt
employees, provided, however, that the Employee shall be entitled to a minimum
paid vacation of four (4) weeks in any calendar year. If the Employee fails to
use all vacation days in any calendar year, Employee shall be permitted to carry
over those vacation days into the next two calendar years.
1
SECTION FOUR
OTHER
BENEFITS
In addition to the compensation as provided in the previous
Section Three hereof, the Corporation shall at its expense provide for Employee
the following additional benefits:
1. |
Participation in all of the Corporation's benefits, now
or hereafter in effect, including medical, dental, vision, 401K plan,
retirement plan, disability plan, bonuses, Equity Incentive Plan and any
and all other plans that may be made available to employees. |
|
|
2. |
Payment of dues in professional associations as may be
required to maintain his membership in those associations and the
privilege of attending appropriate seminars, conferences and education
programs as may be necessary. |
|
|
3. |
Reimbursement for all expenses incurred in connection
with the performance of services to the Corporation, including
entertainment and travel and other expenses incident to the duties
undertaken hereunder; provided, however, that such expenses shall be
reasonable and necessary and that Employee shall submit bills and vouchers
supporting all requests for reimbursements in accordance with the
Corporation's policies. |
SECTION FIVE
TERMINATION
The Agreement will terminate or may be terminated by any one of
the following reasons:
1. |
Voluntarily and without cause, subject to Sections Two
and Six, upon at least one (1) months prior written notice of
termination by Corporation to the Employee or by the Employee to the
Corporation; or |
|
|
2. |
By the Corporation for cause as hereinafter defined in
Section Ten; or |
|
|
3. |
Upon the Death or Disability of Employee. |
|
|
4. |
Upon a Change of Control. |
|
|
5. |
Upon Retirement. |
2
SECTION SIX
SEVERANCE COMPENSATION
1. |
Termination by Employee or by Corporation With
Cause |
If Employee voluntarily terminates his
employment under the Agreement pursuant to Section Five (1) or if the employment
of the Employee is terminated by the Corporation for cause, then all
compensation and benefits as heretofore provided in Sections Three and Four
shall terminate immediately upon the effective date of termination and no
special severance compensation will be paid.
2. |
Termination by Corporation Without
Cause |
If the Corporation terminates the
Agreement for any reason except for cause as defined in Section Ten then upon
the termination of the Employee's employment under the Agreement, the
Corporation shall pay an amount equal to eighteen months (18) of salary. The
amount shall be paid in one lump sum on the date the Employee's services
terminate. All employee benefits provided to the Employee shall be continued as
if the Employee was still an employee of the Corporation, for a period of one
(1) year from the date of termination or replacement of equal or better benefits
from a new employer. In the event Employee has existing stock options, they will
be honored in accordance with the terms of said options.
3. |
Termination by Death or
Disability |
If Employee dies before his employment
hereunder or is otherwise terminated, the Corporation shall immediately pay to
his beneficiary (to be named in writing by the Employee on signing of the
Agreement and confirmed if changed by him at any subsequent time, in writing,
addressed to the secretary of the Corporation) an amount of compensation equal
to twelve (12) months' salary. Ifno named beneficiary survives him, the entire
amount due him shall be paid to his estate. Said compensation shall be in
addition to that payable from any insurance coverage providing for compensation
upon Death or Disability. If Employee becomes disabled, he shall be entitled to
receive an amount of compensation equal to twelve (12) month's salary.
"Disability" in the Agreement means a condition of physical or mental illness
causing one to be totally incapable of performing full- time duties for a period
longer than six months.
4. |
Termination Following Change of
Control |
|
(a) |
For purposes of the Agreement a Change in Control shall
be deemed to have occurred if (A) any individual partnership, firm,
entity, corporation, association, trust, unincorporated organization or
other entity, or any syndicate or group deemed to be a person under
Section 14(d) (2) of the Exchange Act, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 of the General Rules and Regulations
under the Exchange Act), directly or indirectly, of securities of Revett
Mining Company, Inc. representing 25% or more of the combined voting power
of Revett Mining Company, Inc.'s then outstanding securities entitled to
vote in the election of directors of Revett Mining Company, Inc.; or (B)
as a result of or in connection with a contested election of directors,
the persons who were directors of Revett Mining Company, Inc. before such
election shall cease to constitute a majority of such board.
|
3
|
(b) |
Irrespective of any other provisions in the Agreement
regarding termination, if any of the events described above constituting a
Change in Control shall have occurred and upon the subsequent termination
of Employee's employment during the term of the Agreement, unless such
termination is because of Employee's Death, Disability or by the
Corporation for cause or by Employee for other than "Good Reason,"
Employee shall be entitled to and will receive no later than the fifth
(5th) day following the date of termination a lump sum severance payment
in an amount equal to three year's salary. In addition, all benefits then
applicable to Employee shall be continued for a period of twelve (12)
months. |
|
|
|
|
(c) |
Employee shall be entitled to terminate his employment
for Good Reason. For purposes of the Agreement, "Good Reason" means,
without Employee's express written consent, any of the
following: |
(i) the
assignment to Employee of any duties inconsistent with Employee's position, or
Employee's removal from such position, or a substantial alteration in the nature
or status of Employee's responsibilities from those in effect immediately prior
to the Change in Control;
(ii) a reduction by
the Corporation in Employee's annual base salary as in effect on the date hereof
or as the same may be increased from time to time or a failure by the
Corporation to increase Employee's salary at a rate commensurate with that of
other key executives of the Corporation;
(iii) the
failure by the Corporation to continue to provide Employee with benefits at
least as favorable to those enjoyed by Employee under any of the Corporation's
life insurance, medical, health and accident, disability, deferred compensation,
pension, if any, or savings plans in which Employee was participating at the
time of the Change in Control, the taking of any action by the Corporation which
would directly or indirectly materially reduce any of such benefits or deprive
Employee of any material fringe benefit enjoyed by Employee at the time of the
Change in Control, or the failure by the Corporation to provide Employee with
the number of paid vacation days to which Employee is entitled on the basis of
years of service with the Corporation in accordance with the Corporation's normal vacation policy in
effect at the time of the Change in Control;
4
(iv) the failure of the Corporation to obtain
a satisfactory agreement from any successor to assume and agree to perform the
Agreement or if the business of the Corporation for which Employee's services
are principally performed is sold at any time after a Change in Control, the
purchaser of such business fails to agree to provide Employee with the same or a
comparable position, duties, salary and benefits as provided to Employee by the
Corporation immediately prior to the Change in Control;
SECTION SEVEN NON-
TRANSFERABILITY
This is a personal agreement. No Employee's rights, benefits or
interests hereunder may be subject to sale, anticipation, alienation,
assignment, encumbrance, charge, pledge, hypothecation, transfer, or set-off in
respect of any claim, debt or obligation or to execution, attachment, levy or
similar process, or assignment by operation of law. Any attempt, voluntary or
involuntary, to effect any such action shall be null and void and of no effect.
SECTION EIGHT
CHOICE OF LAW
It is the intention of the parties hereto that the Agreement
and the performance hereunder and all suits and special proceedings hereunder be
construed in accordance with and under and pursuant to the laws of the State of
Montana, and that in any action, special proceeding or other proceeding that may
be brought arising out of, in connection with, or by reason of the Agreement,
the laws of the State of Montana, shall be applicable and shall govern to the
exclusion of the law of any other forum, without regard to the jurisdiction in
which any action or special proceeding may be instituted.
SECTION NINE
BINDING EFFECT
The Agreement shall be binding upon and shall inure to the benefit
of the Corporation and to its successors or assigns and to Employee and his
personal representative, heirs, executors and administrators.
5
SECTION TEN
DEFINITION OF CAUSE
Cause to terminate the Employee's employment shall mean (a) the
willful and continued failure by the Employee to substantially perform his
duties, after demand for substantial performance as delivered by the Corporation
that specifically identifies the manner in which the Corporation believes the
Employee has not substantially performed his duties, or (b) the willful engaging
by the Employee of misconduct which is materially injurious to the Corporation,
monetarily or otherwise, or (c) the willful violation by the Employee of the
provisions of the Employment Agreement.
Notwithstanding the foregoing, the Employee shall not be deemed
to have been terminated for cause unless there shall have been delivered to the
Employee a copy of a notice of termination from the Corporation after reasonable
written notice to the Employee and an opportunity for the Employee, together
with counsel for the Employee, to be heard before the Board of Directors of the
Corporation, accompanied by a resolution duly adopted by the Directors of the
Corporation then in office, who find that in the good faith opinion of such
directors, the Employee was guilty of conduct set forth above and shall set
forth in particular detail the facts and circumstances claimed to provide a
basis for termination of employment under the provisions so indicated.
SECTION ELEVEN
DIRECTORSHIPS
The Employee shall be entitled to accept a position as a
director of other corporations, whether such corporations are engaged in the
mining industry or not provided any such directorship is first approved by the
Corporation, such approval not to be unreasonably withheld.
SECTION TWELVE
CONFIDENTIALITY
Employee agrees that except as required for the performance of
his duties, obligations and responsibilities hereunder, he will not at any time
during the term of the Agreement or thereafter divulge to any person, firm or
corporation any Confidential Information received by him during the course of
his employment and all such Confidential Information shall be kept confidential
and deemed the property of the Corporation. For the purpose of the provision,
Confidential Information means information known to the Employee as a
consequence of his employment by the Corporation and not generally known in the
industry in which the Corporation is engaged or otherwise available to third
parties from sources unrelated to or controlled by the Corporation.
6
IN WITNESS WHEREOF, the parties have executed the
Agreement at Spokane Washington, effective on the day and year first above
written.
EMPLOYEE By:
Name: Douglas Stiles __________________
7
Exhibit 10.15
Master Loan and Security Agreement
THIS MASTER LOAN AND SECURITY AGREEMENT (as amended,
supplemented or otherwise modified from time to time, this "Agreement"), dated
as of August 24, 2014 Is between CATERPILLAR FINANCIAL
SERVICES CORPORATION (together with its successors and assigns, if any,"Secured
Party") and the debtor identified on the signature page hereto ("Debtor").
1. |
Grant of Security Interest; Description of
Collateral. |
Debtor grants to Secured Party a security interest in the
property described in the Schedule of Indebtedness and Collateral, now or
hereafter executed by Debtor and accepted by Secured Party (individually, a
"Schedule" and collectively, the "Schedules"), along with all present and future
attachments and accessories thereto and replacements and proceeds thereof, as
well as any equipment now owned or hereafter acquired. inventory, and other
property described in and subject to any and all contracts Debtor has entered
outstanding with Secured Party which secures the performance of the Debtor
thereunder, together with all the cash and non-cash proceeds of the foregoing
and Including amounts payable under any Insurance policy. all hereinafter
referred to collectively as "Collateral." Each Schedule shall be serially
numbered. Unless and only to the extent otherwise expressly provided in a
Schedule, no Schedule shall replace any previous Schedule but shall be
supplementary to all previous Schedules.
2. |
What Obligations the Collateral
Secures. |
Each item of Collateral shall secure not only the
specific amount which Debtor promises to pay In each Schedule, but also all
other present and future indebtedness or obligations of Debtor to Secured Party
of every kind and nature whatsoever whether joint or several. direct or
indirect, absolute or contingent, secured or unsecured, 'Or matured or unmatured
under this or any other present or future agreement {collectively, the foregoing
is referred to as the "Indebtedness") until such Indebtedness Is paid in full
and otherwise satisfied by Debtor. Secured Party shall retain their security
interest in the Collateralas security for Debtor's performance under any
contract notwithstanding the payment in full or other complete performance by
Debtor.
3. |
Promise to Pay; Late Charges and Other
Fees. |
Debtor promises to pay Secured Party the amounts set forth on
each Schedule at the rate and upon such terms as provided therein. Except as
otherwise provided herein, in the applicable Schedule or by applicable law, the
Debtor shall have no right to prepay the Indebtedness described in any Schedule.
Debtor's obligations under each Schedule (i) shall be non-cancelable, absolute
and unconditional under all circumstances for the entire term thereof, (ii)
shall be unaffected t>y the loss or destruction of any Collateral. and
(Iii) shall not be subject to any abatement, deferment, reduction, set-off,
counterclaim, recoupment, or defense for any reason whatsoever. Any
payment not made when due shall, at the option of Secured Party, bear late
charges thereon calculated at the rate of 1 }S% per month. Debtor shall be
responsible for and pay to Secured Party a returned check fee, not to exceed the
maximum permitted by law, which fee will be equal to the sum of (i) the actual
bank charges Incurred by Secured Party plus (II) all other actual costs and
expenses incurred by Secured Party. The returned check fee is payable upon
demand as Indebtedness secured by the Collateral under this Agreement. It is the
intention of Secured Party to comply with all applicable usury laws and
accordingly,it is agreed that notwithstanding anything to the contrary contained
herein or in any Schedule, in no event shall any provision hereof or therein
require or permit Interest in excess of the maximum amount permitted by
applicable law. If necessary to give effect to these provisions, Secured
Party will, at its option, in accordance with applicable law. either
refund any amount to Debtor in excess of that allowed by applicable law, or
credit such excess amount against the unpaid principal balance under the
applicable Schedule. Unless otherwise provided herein, all amounts received
under a Schedule will be applied, first. to accrued late charges, fees and other
costs and expenses due and owing, second, to accrued interest and, third. to
unpaidprincipal.
4. |
Debtor's Warranties and
Representations. |
Debtor warrants and represents:
(a) |
that Debtor shall use the Collateral for business or
commercial purposes (other than agricultural) only and not for personal,
family or household purposes; |
|
|
(b) |
that except for the security interest granted hereby, the
Collateral is free from and will be kept free from all liens, claims,
security interests and encumbrances: |
|
|
|
|
(c) |
that no financing statement covering the Collateral is on
file in favor of anyone other than Secured Party, but if such other
financing |
|
statement Is on file, it will be terminated or
subordinated; |
|
|
(d) |
that Debtor has full authority to enter this agreement
and in so doing it is not violating s charter or by-laws, any law or
regulation or agreement with third parties, and it has taken all such
action as may be necessary or appropriate to make this Agreement binding
upon it; and |
|
|
(e) |
that Debtor's exact legal name and organizational
identification number are as set forth below at the signature lines and
Debtor is, and will remain. validly existing and in good standing under
the laws of the state of its formation (as specified at the signature
fines hereof). Debtor has, and will maintain, its chief executive office
at the location specified below at the signature lines,and Is, and will
remain, duly qualified and licensed in every Jurisdiction wherever
necessary to carry on its business and operations, including the
jurisdiction(s) where the Collateral is or is to be located.
|
1
Debtor agrees:
(a) |
that all information supplied and statements made by
Debtor In any financial, credit or accounting statement or application for
credit prior to. contemporaneously with or subsequent to the execution of
this Agreement are and shall be true, correct, valid and genuine and that
all financial statements delivered to Secured Party ere prepared in
accordance with generally accepted accounting principles, and since the
date of the most recent financial statement, there has been no material
adverse change In Debtor's financial condition; |
|
|
(b) |
to pay promptly all taxes, assessments, license fees land
other public or private charges when levied or assessed against the
Collateral of this Agreement, and this obligation shalt survive the
termination of this Agreement: |
|
|
(c) |
that if a certificate of title be required or permitted
by law, Debtor shall obtain such certificate with respect to the
Collateral. showing the security interest of Secured Party thereon and in
any event do everything necessary or expedient to preserve or perfect the
security interest of Secured Party; |
|
|
(d) |
that Debtor shall maintain all of the Collateralin good
operating order and repair, normal wear and tear excepted, use and
maintain the Collateral only in compliance with manufacturer's
recommendations and all applicable or laws, and not part with
possession of any of the Collateral (except to Secured Party or for
maintenance and repair),or remove any the Collateral from the continental
United States; |
|
|
(e) |
that Secured Party may enter upon Debtor's premises or
wherever the Collateralmay be located at any reasonable tlme to inspect
the Collateral and Debtor's books and records pertaining to the
Collateral, and Debtor shall assist Secured Party in making such
inspection; |
|
|
(f} |
that the security interest granted by Debtor to Secured
Party shall continue effective irrespective of any retaking or redelivery
of any Collateral and irrespective of the payment of the amount described
in any Schedule so long as there are any obligations of any kind,
Including obligations under guaranties or assignments, owed by Debtor to
Secured Party; |
|
|
(g) |
that. regardless of the manner of affixation, the
Collateral shall remain personal property and not become part of the real
estate. Debtor agrees to keep the Collateral at the location set forth in
the applicable Schedule, and will notify Secured Party promptly In writing
of any change in the location of the Collateral. Notwithstanding anything
to the contrary in the preceding sentence. the Debtor may keep any
Collateral consisting of motor vehicles or rolling stock at any location
in the continental United States provided that Secured Party's security
interest in such Collateral is marked on the certificate of title thereof,
end, upon Secured Party's request, Debtor delivers to Secured Party a
written report disclosing the location of such motor vehicles or
rolling stock (including the address of any temporary or permanent garage
tor each such motor vehicles or rolling stock and |
|
|
(h) |
that Debtor is and will remain in full compliance with
all laws and regulations applicable to it including, without limitation,
(I) ensuring that no person Who owns a controlling Interest in or
otherwise controls Del1tor is or shall be (Y) listed on the Specially
Designated Nationals and Blocked Person List maintained by the Office of
Foreign Assets Control ("OFAC"), Department of the Treasury, and/or any
other similar lists maintained by OFAC pursuant to any authorizing statute
Executive Order or regulation or (Z) a person designated under Section
1(b), (c) or (d.) of Executive Order No. 13224 (September 23, 2001), any
related enabling legislation or any other similar Executive Orders, and
(lij compliance with all applicable Bank Secrecy Act f'BSA") laws,
regulations and government guidance on BSA compliance and on the
prevention and detection of money laundering violations.
|
6. |
Insurance and Risk of Loss. |
AU risk of loss, damage to or
destruction of the Collateral shall at all times be on Debtor. Debtor shall
maintain comprehensive public liability Insurance in an amount reasonably
acceptable to the Secured Party. Debtor will also maintain at Debtor's expense
insurance against all risks of loss or physical damage to the Collateral for the
full insurable value thereof tor the life of this Agreement plus breach of
warranty insurance and such other Insurance thereon In amounts and against such
risks as Secured Party may specify, and shallpromptly deliver each policy to
Secured Party with a stand11rd long-form mortgagee endorsement attached thereto
showing loss payable to Secured Party; and providing Secured Party with not less
than 30 days written notice of cancellation; each such policy shall be in form,
terms and amount and with Insurance carriers satisfactory to Secured Party;
Secured Party's acceptance of policies in lesser amounts or risks shall not be a
waiver of Debtor's foregoing obligations. As to Secured Party's interest in such
'Policy, no act or omission of Debtor or any of its officers, agents, employees
or representatives shall affect the obligations of the insured to pay the full
amount of any loss.
Debtor hereby assigns to Secured Party
any monies which may become payable under any such policy of Insurance and
Irrevocably constitutes and appoints Secured Party as Debtor's attorney in fact
(a) to hold each original insurance policy, {b) to make, settle and adjust
claims under each policy of insurance, (c) to make claims for any monies which
may become payable under such and other Insurance on the Collateral Including
returned or unearned premiums, and (d) to endorse Debtor's name on any check,
draft or other Instrument received In payment of claims or returned or unearned
premiums under each policy and to apply the funds to the payment of the
Indebtedness; provided, however,Secured Party is under no obligation to do any,
of the foregoing.
Should Debtor fail to furnish such
Insurance policies to Secured Party, or to maintain such policies in full force,
or to pay any premium in whole or In part relating thereto, then Secured Party,
without waiving or releasing any default or obligation by Debtor, may (but shall
be under no obligation to) obtain and maintain insurance and pay the premium
therefor On behalf of Debtor and Include the premium ln the Indebtedness under
this Agreement. The full amount of any such premium paid by Secured Party
shall be payable by Debtor upon demand, and failure to pay same shall constitute
an event of default under this Agreement
2
7. |
Events of Default; Acceleration. |
The following are events of default under this Agreement and
any such default shall also be deemed a-default under all other contracts Debtor
may have with Secured Party which will allow Secured Party to take such action
under this Paragraph and under Paragraph 8 as it deems necessary:
{e) |
any of the Indebtedness is not paid promptly when due ;
|
|
|
(b) |
Debtor breaches any warranty or provision hereof,or of
any note or of any other Instrument or agreement delivered by Debtor to
Secured Party In connection with this or any other transaction; |
|
|
(C) |
Debtor dies, becomes insolvent or ceases to do business
as a going concern; |
|
|
(d) |
Debtor has provided Secured Party with misleading
information regarding itsfinancialcondition; |
|
|
{e) |
any of the Collateral is lost or destroyed and such
Collateral is not Insured, with Secured Party's Interest properly noted in
the applicable insurance policies,as further describedIn Paragraph 6
hereof; |
|
|
(f) |
a complaint in bankruptcy or for arrangement or
reorganization or for relief under any insolvency law is filed by or
against Debtor or Debtor admits its inability to pay its debts as they
mature: |
|
|
(g) |
property of Debtor is attached or a receiver Is appointed
for Debtor; |
|
|
(h) |
whenever Secured Party in good faith believes the
prospect of payment or performance is impaired or in good faith believes
the Collateral is insecure; |
|
|
(i) |
any guarantor, surety or endorser for Debtor dies or
defaults in any obligation or liability to Secured Party or any guaranty
obtained In connection with this transaction is terminated or breached; or
|
|
|
0> |
there Is a dissolution, termination of existence, merger,
consolidation or change in controlling ownership or Debtor or any
guarantor. |
If Debtor shall be in default hereunder, the Indebtedness
shall,if Secured Party shall so elect, become immediately due and payable. After
acceleration:
(I) |
the unpaid principalbalance of the Indebtedness
describedin any Schedule in which interest has been precomputed shall beat
Interest at the rate of 18% per annum (of, if less, the maximum rate
permitted by law) until paid infull;and |
|
|
(ii} |
the unpaid principal balance of the
Indebtedness described in any Schedule in which interest has not been
precomputed shall bear Interest at the same rate as before acceleration
until paid in full. |
8. |
Secured Party's Remedies After Default; Consent to E n t
e r Premises. |
Upon Debtor's default and at any time thereafter, Secured Party
shall have all the rights and remedies of a secured party under the Uniform
Commercial Code and any other applicable laws, including any rights accorded to
Secured Party under any outstanding contract with Debtor whether or not such
rights and remedies are specifically set forth in such contract as well as the
right to any deficiency remaining after disposition of the Collateral for which
Debtor hereby agrees to remain fully liable. Debtor agrees that Secured Party,
by itself or its agent, may without notice to any person and without judicial
process of any kind, enter into any premises or upon any land owned, leased or
otherwise under the real or apparent control of Debtor or any agent of Debtor
where the Collateral may be or where Secured Party believes the Collateral may
be, and disassemble, render unusable and/or repossess all or any Item of the
Collateral, disconnecting and separating all Collateral from many other property
and using all force necessary. Debtor expressly waives all further rights to the
Collateral after default and all claims for Injuries suffered through or loss
caused by such entering and/or repossession. Secured Party may require Debtor to
assemble the Collateral and return it to Secured Party at a place to be
designatedby Secured Party that Is reasonably convenient to both parties.
Secured Party may sell or lease the Collateral at a time and
location of its choosing provided that the Secured Party acts in good faith and
in a commerclally reasonable manner. Secured Party will give Debtor reasonable
notice of the time and place of any public sale of the Collateral or of the lime
after which any private sale or any other Intended disposition of the
Collateralis to be made. Unless otherwise provided by law, the requirement of
reasonable notice shall be met If such notice Is mailed, postage prepaid, to the
address of Debtor shown herein at least ten days before the time of the sale or
disposition. Expenses of retaking, holding, preparing for sale, selling and the
like shall include reasonable attorneys' fees (at least 15% of the outstanding
principal balance if not prohibited by law) and other legalexpenses. Debtor
understands that Secured Party's rights are cumulative and not alternative.
Secured Party shall have the right to any proceeds of sale, lease or other
disposition of the Collateral. if any. and shall have the right to apply same in
the following order of priorities: (i) to pay all of Secured Party's costs,
charges and expenses incurred in enforcing its lights under this Agreement or in
taking, removing, holding, repairing, refurbishing, selling, leasing or
otherwise disposing of the Collateral; then, (il) to pay any and all late fees,
other such charges due hereunder, any and all Interest due hereunder and any
amounts owing pursuant to any indemnity claims;then (iii) to pay all principal
due hereunder; then (iv) to pay ell other amounts due and owing to Secured Party
under any other instruments, agreements, notes or other documents executed or
delivered in connection with this Agreement or any Schedule; then (v) any
surplus shall be refunded to Debtor. Debtor shall pay any deficiency In (1),
(II), (iii) and (iv) immediately upondemand.
Secured Party may in its sole discretion waive a default, 'or
cure, at Debtor's expense.a default. Any such waiver in a particular instance or
of a particular default shall not be a waiver of other defaults or the same kind
of default at another time.
3
(a) Debtor shall, upon request of
Secured Party, furnish to Secured Party such further information, execute and
deliver to Secured Party such documents and instruments (Including, without
limitation, Uniform Commercial Code financing statements) and shall do such
other acts and things as SecuredParty may at any time reasonably request
relating to the perfection or protection of the security Interest created by1his
Agreement or for the purpose of carrying out the intent of this Agreement.
Without limiting the foregoing, Debtor shall cooperate and do all acts deemed
necessary or advisable by Secured Party to continue in Secured Party a perfected
first security interest in the Collateral,and shall obtain and furnish to
Secured Party any subordinations, releases, landlord waivers, lessor waivers,
mortgagee waivers, or control agreements, and similar documents as may be from
time to time requested by, and In form and substance satisfactory to Secured
Party.
(b) Debtor authorizes Secured
Party to file a financing statement and amendments thereto describing the
Collateral and c o n t a i n i n g any other information required by the
applicable Uniform Commercial Code. Debtor Irrevocably grants to Secured Party
the power to sign Debtor"s name and generally to act on behalf of Debtor to
execute and file applications for title, transfers of title, financing
statements, notices of lien and other documents pertaining to any or all of the
Collateral; this power is coupled with Secured Party's interest in the
Collateral. Debtor shall, if any certificate of title be required or permitted
by law for any of the Collateral, obtain and promptly deliver to Secured Party
such certificate showing the lien of this Agreement with respect to the
Collateral. Debtor ratifies its prior authorization for Secured Party to file
financing statements and amendments 'thereto describing the Collateral and
containing any other Information required by the Uniform CommercialCode if filed
prior to the date hereof.
(c) Debtor shall indemnify and
save on a net after-tax basis Secured Party and its affiliates and an of Secured
Party's and such affiliates' respective directors, shareholders, officers,
employees, agents, predecessors, attorneys-in-fact, lawyers, successors and
assigns (each an "lndemnllee'1, harmless from and against all claims. costs,
expenses (including legal fees),demands, suits,damages and liabilities of any
kind and nature whatsoever, including without limitation personal injury, death
and property damage claims arising in tort or otherwise, under any legaltheory
including but not limited to strict liability (including claims involving or
alleging environmental damage, criminal acts, hijacking, acts of terrorism or
similar acts, product liability or strict or absolute liability in tort, latent
and other defects (whether or not discoverable), or for patent, trademark ( or
copyright infringement collectively, "Ciaims'1. that may be Imposed on, Incurred
by or asserted against any Indemnitee whether or not such Indemnitee
shall also be indemnified as to any such Claim by any other person in any way
relating to, arising out o f o r In connection with (i) this Agreement and the
Schedules and related documents, including, without l i m i tation, the
execution. delivery, breach (including any Event of Default), enforcement,
performance or administration thereof and (ii) the Collateral, including,
without limitation, the perfection, maintenance, protection or realization upon
the Collateral or any other security for the Indebtedness. and the manufacture,
inspection, construction, purchase, acceptance, rejection, ownership,
management, pooling, interchange, chartering, titling or re-titling, delivery,
lease, sublease, possession. use, operation, maintenance, condition,
registration or re-registration, sale, removal, repossession, storage or other
disposition of the Collateralor any part thereof or any accident In Connection
therewith. Notwithstanding the foregoing, Debtor shall not be required to
indemnify an Indemnitee for any Claim caused solely and directly by the
gross negligence or willful mlsconduct of such Indemnitee.
10. Assignment. This Agreement, any Schedule and any other
agreement, Instrument or document executed In connection therewith may be
assigned, In whole or in part. by Secured Party without notice to Debtor, and
Debtor hereby waives and agrees not to assert against any such assignee, or
assignee's assigns, any defense, set-off, recoupment, claim or
counterclaim Which Debtor has or rnay at any time have against Secured Party for
any reason whatsoever, Debtor agrees that If Debtor receives written notice of
an assignment from Secured Party, Debtor will pay all amounts payable in
connection with the Schedule that ls the subject of such assignment (including
any other agreement, instrument or document executed in connection therewith) to
such assignee or as Instructed by Secured Party. Debtor also agrees to confirm
in writing receipt of the notice of assignment as may be requested by Secured
Party or assignee. Debtor shall not sell, assign, pledge or otherwise transfer
or in any way dispose of any of its rights or obligations owing hereunder or
under any Schedule, or enter into any lease or rental of the Collateral, without
Secured Party's prior written consent. Any purported sale, assignment,pledge,
other transfer, disposal, rental or lease by Debtor made without Secured Party's
prior written consent shallbe null and void and shall be an event or default
hereunder.
(a) Debtor shall notify Secured
Party (i) at least thirty (30) days' prior to any change in the name of Debtor,
(ii) at least sixty (60) days' prior to any change In the state of its
incorporation, organization or registration, (iii) at least thirty (30)
days'prior to any relocation of its chief executive offices, (iv) at least
thirty (30) days prior to any permanent or indefinite relocation of any of the
Collateral from the location(s) specified In its applicable Schedule, (v)
Immediately upon any of the Collateral being lost. stolen, missing, destroyed,
materially damaged or worn out, or (vi) immediately upon Debtor becoming aware
of any lien, claim or encumbrance attaching to or being made against any
of the Collateral
4
(b) Debtor will deliver to
Secured Party Debtors complete financial statements, certified by a recognized
firm of certified public accountants, within ninety (90) days of the close of
each fiscal year of Debtor. If Secured Party requests, Debtor Will deliver to
Secured Party copies of Debtors quarterly financial reports certified by
Debtor's chief financial officer, within ninety (90) days after the close of
each of Debtor's fiscal quarters. Debtor will deliver to Secured Party copies of
all Forms 10-K and 10-Q,if any, within 30 days after the dates on which they are
filed with the Securities and Exchange Commission.
12. Notices. All notices to be given In connection with this
Agreement shall be In writing, shall be addressed to the parties at their
respective addresses set forth in this Agreement (unless and until a different
address may be specified in a written notice to the other party), and may be
delivered or furnished by electronic communication (Including e mail and
Internet or Intranet websltes) to an address designated by the recipient for
receipt of such notices and shall ,be deemed given (I) on the date of receipt if
delivered in hand, by electronic communication or by facsimile transmission, (IQ
on the next business day after being sent by express mall, and (Iii} on the
fourth business day after being sent by regular, registered or certified mail.
As used herein, the term "business day'' shall mean and Include any day
other than Saturdays, Sundays, or other days on which commercial banks In
Florida are required or authorized to be closed.
This Agreement shall continue in fullforce and effect untilall
of the Indebtedness has been indefeasibly paid in full to Secured Party or its
assignee. The surrender, upon payment or otherwise, of any Schedule or any of
the other agreements, instruments or documents evidencing any of the
Indebtedness shall not affect the right of Secured Party to retain the
Collateral for such other Indebtedness as may then exist or as it may be
reasonably contemplated will exist ln the future. This Agreement shall
automatically be reinstated if Secured Party is ever required to return or
restore the payment of all or any portion of the Indebtedness (all as though
such payment had never been made).
No modification or change In this Agreement. The
Schedules or any related Instrument, agreement, note or other document shall
bind Secured Party unless in writing signed by Secured Party. No oral agreement
shallbe binding.
Debtor waives all exemptions, Secured Party may correct patent
errors herein and fill in such blanks as serial numbers, date or first payment,
and the like. Any provisions hereof contrary to, prohibited by or invalid under
applicable laws or regulations shall be inapplicable and deemed omitted here
from,but shall not invalidate the remaining provisions hereof.
This Agreement. each Schedule and each transaction arising
therefrom shall be governed by and construed in accordance with the laws of the
State of Tennessee. Any proceedings concerning this Agreement shall be brought
In any court, state or federal ,sitting in Davidson County, Tennessee. Debtor
and Secured Party each hereby waive any right to a trial by jury In any action
or proceeding with respect to, in connection with, or arising out of this
Agreement, or any note or document delivered pursuant to this Agreement.
Debtor acknowledges receipt of a true copy and waives
acceptance hereof.
If Debtor is a corporation, this Agreement is executed pursuant
to authority of its Board of Directors. Except where the context
otherwise required,"Debtor' and "Secured Party" include the heirs, executors or
administrators. successors or assigns of those parties: nothing herein shall
authorize Debtor to assign this Agreement or Its rights In and to the
Collateral. If more than one Debtor executes this Agreement, their obligations
under this Agreement s hall be joint and several.
This Agreement is not an agreement or commitment by Secured
Party to Debtor to enter into any Schedules, or if Secured Party does enter into
one or more Schedules, to enter into any additional Schedules. This Agreement
and each Schedule shall become effective only upon Secured Party's execution
thereof.
This Agreement and any amendments, waivers, consents or
11upplements hereto in connection herewith may be executed In any number
or counterparts and by different parties h9reto In separate counterparts, all of
which taken together shall constitute one and the same instrument.; signature
pages may be detached from multiple separate counterparts and attached to a
single counterpart so that all signature pages are physically attached to th9
same document. Delivery of an executed signature page of this Agreement or any
delivery contemplated hereby by facsimile or electronic transmission shallbe as
effective as delivery of a manually executed counterpart thereof.
THIS WRITTEN AGREEMENT REPRESENTS THE FINAl. AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
5
Debtor: |
Secured Party: |
|
|
Troy Mine Inc. |
|
|
CATERPILLAR FINANCIAL SERVICES CORPORATION
|
By: |
|
Title: |
By: ________________________ |
Highway 56 South Mine Road |
|
|
Tttle: _______________________ |
Troy, MT 59935 |
|
|
2120 WestEnd Ave. |
|
|
|
Nashville, TN 37203 |
6
Caterpillar Financial Services Corporation
2120 West End
Ave.
Nashville, TN 37203 Gentlemen:
You are irrevocably instructed to disburse the proceeds of your
loan to us, evidenced by our Security Agreement of even date.as follows:
PAYEES NAMES AND ADDRESSES |
|
AMOUNT |
|
|
|
|
|
Troy Mine, Inc. |
$ |
4,643,259.28 |
|
|
|
|
|
Caterpillar Financial
Services Corporation (Payoff of K# 001 0620025--000) |
$ |
264,800.16 |
|
|
|
|
|
Caterpillar Financial
Services Corporation (Payoff of K# 001 0618325-000) |
$ |
91,940,56 |
|
|
|
TOTAL PROCEEDS |
$5,000,000.00 |
Very Truly Yours, |
|
|
|
|
|
|
|
|
|
|
|
Troy Mine luc. |
|
|
|
|
|
|
|
By:Ken Eickerman |
Title: CFO |
|
|
|
|
|
|
7
Debtor promises to pay Secured Party the total sum
$5.413.776.60 which represents principal and interest precomputed over
the term hereof, payable ___ Payment shall be made at the address of Secured
Party shown on the Master Security Agreement or such other place as Secured
Party may designate from time to time,
See Special Provisions instructions below:
A prepayment premium will be assessed if this loan is paid in
full or in part prior to maturity as stated below:
|
First Contract Year- |
2% prepayment fee |
|
Second Contract Year- |
1% prepayment fee |
|
Last Six Months- |
Oo/o prepayment fee |
Secured Party:
8
Schedule No.__________
Schedule of Indebtedness and
Collateral
To Master Security Agreement dated August 20,
2014,between the undersigned Secured Party and Debtor.
This Schedule of Indebtedness and Collateral incorporates the
terms and conditions of the above--referenced Master Security Agreement.
This is Originally Executed Copy No. 1of 1 originally executed
copies. Only transfer of possession by Secured Party Originally Executed Copy
No. 1 shall be effective for purposes of perfecting an interest in this Schedule
by possession.
The equipment listed on this Schedule will be located at:
Highway 56 South
Mine Road, Troy, MT 59935 |
Address |
Debtor grants to Secured Party a security Interest in the
property described below, along with all present and future attachments and
accessories thereto and replacements and proceeds thereof, including amounts
payable under any insurance policy, all hereinafter referred to collectively as
"Collateral."
Collateral Description
(See Schedule A)
9
Schedule A
To Schedule No. to Master Security Agreement, dated August 20,
2014 between Caterpillar Financial Services Corporation, as Secured Party, and,
TROY MINE INC., as Debtor.
One (1)2007 Tamrock Ranger BOO Bench
Drill,SN:107T1358·1
One (1) 2006 Tamrock Sandvik Axara 7-240C Jumbo
Drill,SN: 10609683·1
One (1) 2005 Atlas Copco Rocket Boomer 282 Jumbo, SN:
AV005A159
One (1) 1980 Tamrock Maxlmatic Roofbolter,SN: J-31
One (1)
2006 Tamrock Robolt 7 Roofbolter,SN: 107811256·1
One (1) 2010 Cat 928Hz
WheelLoader, SN: CXK00806
One (1) 2008 Cat 9380
IIWheelLoader,SN:RTB02402
One (1) 2005 Cat 980011 WheelLoader, SN: AWH02209
One (1) 2003 Cat 9800 Loader,SN: AXG00629
One (1)2009 Cat980 H
loader,SN: JMS05163
One (1) 2011Cat 980 K Loader, SN: W7K00661
One (1)2004
Atlas Copco MT5010 Haul Truck, SN: AV005X018
One (1}2012 Cat AD55B
HaulTruck, SN: JNW00255
One (1} 1986 Wagner MT-436·30 Water Truck, SN:
DB030P269
One (1)2007 Cat Elphonstone Haul Truck AD55,SN: DNW00589
One
(1)2009 Cat Haul Truck AD55B, SN: JNW00116
One (1) 1975 Cat 07G Tractor,SN:
92V00144
One (1)2011 Case TR270 Skid Steer (Tracked),SN: NBM438736
One
(1)1995 Cat 143H VHP Motor Grader,SN: 1AL0051
One (1)1998 Silver Wheels
Mod.25441HC Spray Truck, VIN:1HTGBADR2WH52790
One (1)2008 Oldenburg Service
Truck CXM200,SN: 201667
One (1)2008 Oldenburg CXM300 UG Truck,SN: 08·T1
One (1)Getman BOODJC Powder Truck, SN: J·30
One (1)Getman B·500
Shotcrete Truck, SN:5071
One (1) 1985 Ford F700 Lube Truck,VIN:
1FDXK74NIFVA32163
One (1}2004 Cat TH460B Telehandler, SN: SLF01014
One
(1) 2005 Terex TH844C Telehandler,SN: THOBOSB-6857
One (1)1998 Frelghtllner
FL70 2000 Gallon Water Truck, VIN: 1FUWHJAASWH970896
One (1) 2008 Sandvik
DE130 Core Drill, SN: 783
One (1)2011 Sandvik DE140 Core Drill, SN: 1609
One (1)2011Ford F350XLT,VIN: 1FT8W3BT6BEC16239
One (1)2012 Ford
F250XLT,VIN: 1FT7W2BT4CE12255
One (1)201Z Ford F350XL, VIN: 1FT8W3BT1CEA21909
One (1}2012 Ford F350XL, VIN: 1FT8W3BT3CEA40235
One (1)1980 Getman A-84
Lube Truck,SN: 4938
One (1)1984 Getman BSOO Electrician Truck,SN: 4996
One (1) 1981Getman A64 Flatbed Boom Truck, SN: 5078
One (1) 1980 Symons
7' Shorthead Cone Crusher,SN: 7905
One (1) 1980 Symons 7' Shorthead Cone
Crusher, SN: 7904
One (1) 1980 Symons 7' Shorthead Cone Crusher, SN: 7903
One (1)1980 KVS 151/2' x 18 1/2' Ball Mill,SN: 1234-P-80
One (1)1980 KVS
151/2' x 18 1/2' Ball Mill, SN:1235-P-80
One (1) 1980 KVS 10' x 12' Regrind
Ball Mill, SN: 1219-P-80
One (1) 2014 Fastway BPL4 Portable Batch Plant,SN:
8·1013537-4
10
Exhibit 10.16
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement (the "Amendment") is
made and entered into effective as of February 1, 2015 (the "Effective Date"),
by and between Revett Silver Company, a Montana corporation (hereinafter
referred to as the "Corporation") and John Shanahan (hereinafter referred
to as "Employee").
RECITALS:
A. WHEREAS, the Corporation and
Employee arc parties to that certain employment agreement dated January 1, 2010
(the "Employment Agreement"); and
B. WHEREAS, the Corporation and
Employee desire to modify certain provisions of the Employment Agreement in an
effort to ensure the Corporation's continued operations and enable it to take
advantage of any offer the Corporation might receive to sell all or
substantially all of its assets or merge or consolidate (or facilitate its
parent corporation, Revett Minerals Inc., in merging or consolidating) with or
into another business entity; and
C. WHEREAS the Corporation and Employee
each reasonably believe such modifications are reasonable and necessary, and
unless consented to and approved as provided in this Amendment, could impede or
impair the Corporation's ability to operate and thereby deprive the Employee of
some or all of the economic benefits of the Agreement.
AGREEMENT:
NOW THEREFORE, in consideration of the respective covenants and
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Corporation and
Employee covenant and agree as follows:
1. |
Amendments to Employment
Agreement. |
1.1 Section Three -Compensation.
The first sentence of Section Three of the Agreement is deleted and amended to
read in its entirety as follows:
"The Corporation shall pay Employee,
and Employee shall accept from the Corporation, compensation at the rate of
$330,000.00 per year, prorated and payable monthly or on such other basis as the
Corporation and Employee may hereafter agree in writing!'
1.2 Section Three -Compensation.
The last two sentences of Section Three of the Agreement are deleted and amended
to read in their entirety its entirety as follows:
"Employee shall be entitled to
vacation periods that are commensurate with the policies of the Corporation that
are applicable to exempt employees; provided, however, that Employee shall be
entitle to a minimum paid vacation of four
weeks in each calendar year during which Employee is employed by the
Corporation. If Employee falls to use all of his or her vacation days in a
calendar year, such unused vacation days shall automatically deemed to have been
forfeited by Employee, and the Corporation shall have no obligation to pay or
otherwise compensate Employee for the same."
AMENDMENT TO EMPLOYMENT AGREEMENT.I
1.3 Section
Five -Termination. Subsection (1) of Section Five is deleted and amended to read
in its entirety as follows:
"Voluntarily and without cause,
subject to Sections Two and Six, upon not less than five (5) calendar days'
prior written notice by the Corporation to the Employee or by the Employee to
the Corporation; or"
1.4 Section
Six-Severance Compensation. Subsection 4(b) of Section Six is deleted and
amended to read in its entirety as follows:
"If any of the events described above
constituting a Change in Control shall have occurred and such Change of Control
shall have resulted in a termination of Employee's employment, or if Employee
terminates his employment for Good Reason (as defined in subsection 4(c) of this
Section Six), then, in either case, the Corporation shall pay Employee a
severance benefit in an amount equal to eighteen months of Employee's salary
calculated immediately prior to Such termination. Such severance benefit shall
be paid in one lump sum within thirty (30) days of termination or at such other
date that the Corporation and Employee shall agree, it being understood and
agreed that, if the Corporation and Employee agree that such severance benefit
shall be paid in installments, the Corporation shall have no obligation to pay
Employee interest on any unpaid amount. In addition to the severance benefit,
the Corporation shall continue to pay Employee any other employment-related
benefits to which Employee is entitled, as if he or she continued to be an
employee of the Corporation, for a period of one (1) year following termination
or until such time (which in no event shall exceed one year from such
termination) as Employee receives comparable benefits from a new employer. In
the event Employee has existing stock options, they shall be honored in
accordance with their terms. The severance and other benefits afforded Employee
by this subsection shall not apply despite the occurrence of a Change in Control
if Employee's employment by the Corporation is terminated because of Employee's
death or Disability (as defined in subsection 3 of this Section Six) or if
Employee's employment is terminated by the Corporation For Cause (as defined in
Section Ten).
I.5
Arbitration. A new section (Section Thirteen) reading in its
entirety is hereby added to the Agreement:
"SECTION TIIIRTEEN ARBITRATION. Any
dispute regarding the interpretation of this Agreement or the performance by the
Corporation or Employee of their respective obligations shall be submitted to
and determined by the decision of a single arbitrator, being either a retired
judge or a retired attorney with a minimum often years of experience in
negotiating and documenting employment agreements such as that contemplated by
this Agreement, who shall be selected by mutual agreement of the Corporation and
Employee, and shall be independent of the parties. The arbitration shall be
conducted in Spokane, Washington, in accordance with the arbitration rules set
forth in RCW 7.04A, and the arbitrator shall reach and render a decision in
writing (which shall state the reasons for his or her decision), which shall be
entirely on the basis of the substantive law governing this Agreement. To the
extent practical, decisions of the arbitrator shall be rendered no more than 30
calendar days following commencement of proceedings with respect thereto. Any
decision made by the arbitrator (either prior to or after the expiration of such
30 calendar day period) shall be final, binding and conclusive on the parties to
this Agreement, and each party to the arbitration shall be entitled to enforce
such decision to the fullest extent permitted by law and entered in any court of
competent jurisdiction. The fees and expenses of the arbitrator and the
reasonable fees and expenses of legal counsel and consultants of the
parties shall be paid by the Corporation.
AMENDMENT TO EMPLOYMENT AGREEMENT .. 2
1l}r
This Amendment may be executed in one or more counterparts, all
of which shall constitute a single agreement.
DATED asof the 30th day of January 2015, but
effective as of the Effective Date.
THE CORPORATION: |
Revett Silver |
|
Company, a |
|
Montana |
|
corporation |
Exhibit 10.17
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement (the "Amendment") is
made and entered into effective as of February 1, 2015 (the "Effective Date"),
by and between Revett Silver Company, a Montana corporation (hereinafter
referred to as the "Corporation") and Kenneth S. Eickerman (hereafter referred
to as Employee).
RECITALS:
A. WHEREAS, the Corporation
and Employee are parties to that certain employment agreement dated April 1,
2009 (the "Employment Agreement"); and 1
B. WHEREAS, the Corporation and
Employee desire to modify certain provisions of the Employment Agreement in an
effort to ensure the Corporation's continued operations and enable it to take
advantage of any offer the Corporation might receive to sell all or
substantially all of its assets or merge or consolidate (or facilitate its
parent corporation, Revett Minerals Inc., in merging or consolidating) with or
into another business entity; and
C. WHEREAS the Corporation and Employee
each reasonably believe such modifications are reasonable and necessary, and
unless consented to and approved as provided in this Amendment, could impede or
impair the Corporation's ability to operate and thereby deprive the Employee of
some or all of the economic benefits of the Agreement.
AGREEMENT:
NOW THEREFORE, in consideration of the respective covenants and
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Corporation and
Employee covenant and agree as follows:
1. |
Amendments to Employment
Agreement. |
1.1 Section
Three -Compensation. The first sentence of Section Three of the Agreement is
deleted and amended to read in its entirety as follows:
"The Corporation shall pay Employee,
and Employee shall accept from the Corporation, compensation at the rate of
$140,400.00 per year, prorated and payable monthly or on such other basis as the
Corporation and Employee may hereafter agree in writing."
1.2 Section
Three -Compensation. The last two sentences of Section Three of the Agreement
are deleted and amended to read in their entirety its entirety as follows:
"Employee shall be entitled to
vacation periods that are commensurate with the policies of the Corporation that
are applicable to exempt employees; provided, however, that Employee shall be
entitle to a minimum paid vacation of F o u r ( 4 ) weeks in each calendar year
during which Employee is employed by the Corporation. If Employee fails to use
all of his or her vacation days in a calendar year, such unused vacation days
shall automatically deemed to have been forfeited by Employee, and the
Corporation shall have no obligation to pay or otherwise compensate Employee for
the same."
AMENDMENT TO EMPLOYMENT AGREEMENT- 1
1.3 Section
Five-Termination. Subsection (1) of Section Five is deleted and amended to
read in its entirety as follows:
"Voluntarily and without cause,
subject to Sections Two and Six, upon not less than five (5) calendar days'
prior written notice by the Corporation to the Employee or by the Employee to
the Corporation; or"
1.4 Section
Six -Severance Compensation. Subsection 4(b) of Section Six is deleted and
amended to read in its entirety as follows:
"If any of the events described above
constituting a Change in Control shall have occurred and such Change of Control
shall have resulted in a termination of Employee's employment, or if Employee
terminates his employment for Good Reason (as defined in subsection 4(c) of this
Section Six), then, in either case, the Corporationel' shall pay
Employee a severance benefit in an amount equal to eighteen (18) months of
Employee's salary calculated immediately prior to such termination. Such
severance benefit shall be paid in one lump sum within thirty (30) days of
termination or at such other date that the Corporation and Employee shall agree,
it being understood and agreed that, if the Corporation and Employee agree that
such severance benefit shall be paid in installments, the Corporation shall have
no obligation to pay Employee interest on any unpaid amount. In addition to the
severance benefit, the Corporation shall continue to pay Employee any other
employment-related benefits to which Employee is entitled, as if he or she
continued to be an employee of the Corporation, for a period of one (1) year
following termination or until such time (which in no event shall exceed one
year from such termination) as Employee receives comparable benefits from a new
employer. In the event Employee has existing stock options, they shall be
honored in accordance with their terms. The severance and other benefits
afforded Employee by this subsection shall not apply despite the occurrence of a
Change in Control if Employee's employment by the Corporation is terminated
because of Employee's death or Disability (as defined in subsection 3 of this
Section Six) or if Employee's employment is terminated by the Corporation For
Cause (as defined in Section Ten).
1.5
Arbitration. A new section (Section Thirteen) reading in its entirety is
hereby added to the Agreement:
"SECTION THIRTEEN- ARBITRATION. Any
dispute regarding the interpretation of this Agreement or the performance by the
Corporation or Employee of their respective obligations shall be submitted to
and determined by the decision of a single arbitrator, being either a retired
judge or a retired attorney with a minimum of ten years of experience in
negotiating and documenting employment agreements such as that contemplated by
this Agreement, who shall be selected by mutual agreement of the Corporation and
Employee, and shall be independent of the parties. The arbitration shall be
conducted in Spokane, Washington, in accordance with the arbitration rules set
forth in RCW 7.04A, and the arbitrator shall reach and render a decision in
writing (which shall state the reasons for his or her decision), which shall be
entirely on the basis of the substantive law governing this Agreement. To the
extent practical, decisions of the arbitrator shall be rendered no more than 30
calendar days following commencement of proceedings with respect thereto. Any
decision made by the arbitrator (either prior to or after the expiration of such
30 calendar day period) shall be final, binding and conclusive on the parties to
this Agreement, and each party to the arbitration shall be entitled to enforce
such decision to the fullest extent permitted by law and entered in any
court of competent jurisdiction. The fees and expenses of the arbitrator and the
reasonable fees and expenses of legal counsel and consultants of the parties
shall be paid by the Corporation.
AMENDMENT TO EMPLOYMENT AGREEMENT- 2
This Amendment may be executed in one or more counterparts, all
of which shall constitute a single agreement.
DATED as of the30 day of January 2015, but effective as of the
Effective Date. THE CORPORATION:
AMENDMENT TO EMPLOYMENT AGREEMENT- 3
Exhibit 10.18
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement (the "Amendment") is
made and entered into effective as of February 1, 2015 (the "Effective Date"),
by and between Revert Silver Company, a Montana corporation (hereinafter
referred to as the "Corporation") and Douglas P. Miller (hereinafter referred to
as "Employee").
RECITALS:
A. WHEREAS, the Corporation and
Employee are parties to that certain employment agreement dated October 1, 2012
(the "Employment Agreement"); and
B. WHEREAS, the Corporation and
Employee desire to modify certain provisions of the Employment Agreement in an
effort to ensure the Corporation's continued operations and enable it to take
advantage of any offer the Corporation might receive to sell all or
substantially all of its assets or merge or consolidate (or facilitate its
parent corporation, Revert Minerals Inc., in merging or consolidating) with or
into another business entity; and
C. WHEREAS the Corporation and Employee
each reasonably believe such modifications are reasonable and necessary, and
unless consented to and approved as provided in this Amendment, could impede or
impair the Corporation's ability to operate and thereby deprive the Employee of
some or all of the economic benefits of the Agreement.
AGREEMENT:
NOW THEREFORE, in consideration of the respective covenants and
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby ackowledged, the Corporation and
Employee covenant and agree as follows:
1. |
Amendments to Employment
Agreement. |
1.1 Section
Three -Compensation. The first sentence of Section Three of the Agreement is
deleted and amended to read in its entirety as follows:
"The Corporation shall pay Employee,
and Employee shall accept from the Corporation, compensation at the rate of
$160,000 per year, prorated and payable monthly or on such other basis as the
Corporation and Employee may hereafter agree in writing."
1.2 Section
Three- Compensation. The last two sentences of Section Three of the Agreement
are deleted and amended to read in their entirety its entirety as follows:
AMENDMENT TO EMPLOYMENT AGREEMENT- 4
"Employee shall be entitled to
vacation periods that are commensurate with the policies of the Corporation that
are applicable to exempt employees; provided,
However, that Employee shall be
entitle to a minimum paid vacation of four weeks in each calendar year during
which Employee is employed by the Corporation. If Employee fails to use all of
his or her vacation days in a calendar year, such unused vacation days shall
automatically deemed to have been forfeited by Employee, and the Corporation
shall have no obligation to pay or otherwise compensate Employee for the same."
1.3 Section Five-Termination.
Subsection (1) of Section Five is deleted and amended to read in its entirety as
follows: Voluntarily and without cause, subject to Sections Two and Six, upon
not less the five calendar days prior written notice by the Corporation to the
Employee or by the Employee to the Corporation; or
1.4 Section Six-Severance
Compensation. Subsection 4(b) of Section Six is deleted and amended to read
in its entirety as follows:
"If any of the events described above
constituting a Change in Control shall have occurred and such Change of Control
shall have resulted in a termination of Employee's employment, or if Employee
terminates his employment for Good Reason (as defined in subsection 4(c) of this
Section Six), then, in either case, the Corporation shall pay Employee a
severance benefit in an amount equal to eighteen months of Employee's salary at
the compensation rate set forth in Section 1.1 of this Amendment or any h1gher
compensation rate that may hereafter be agreed to in writing by the Corporation
and Employee. Such severance benefit shall be paid in one lump sum within thirty
(30) days of termination or at such other date that the Corporation and Employee
shall agree, it being understood and agreed that, if the Corporation and
Employee agree that such severance benefit shall be paid in installments, the
Corporation shall have no obligation to pay Employee interest on any unpaid
amount. In addition to the severance benefit, the Corporation shall continue to
pay Employee any other employment-related benefits to which Employee is
entitled, as if he or she continued to be an employee of the Corporation, for a
period of one (1) year following termination or until such time (which in no
event shall exceed one year from such termination) as Employee receives
comparable benefits from a new employer. In the event Employee has existing
stock options, they shall be honored in accordance with their terms. The
severance and other benefits afforded Employee by this subsection shall not
apply despite the occurrence of a Change in Control if Employee's employment by
the Corporation is terminated because of Employee's death or Disability (as
defined in subsection 3 of this Section Six) or if Employee's employment is
terminated by the Corporation For Cause (as defined in Section Ten).
1.5 Arbitration. A new section
(Section Thirteen) reading in its entirety is hereby added to the Agreement:
AMENDMENT TO EMPLOYMENT AGREEMENT- 5
"SECTION THIRTEEN- ARBITRATION. Any
dispute regarding the interpretation of this Agreement or the performance by the
Corporation or Employee of their respective obligations shall be submitted to
and determined by the decision of a single arbitrator, being either a retired
judge or a retired attorney with a minimum of ten years of experience in
negotiating and documenting employment agreements such as that contemplated by
this Agreement, who shall be selected by mutual agreement of the Corporation and
Employee, and shall be independent of the parties. The arbitration shall be
conducted in Helena, Montana, in accordance with the arbitration rules set forth
in RCW 7.04A (Montana equivalent), and the arbitrator shall reach and render a
decision in writing (which shall state the reasons for his or her decision),
which shall be entirely on the basis of the substantive law governing this
Agreement. To the extent practical, decisions of the arbitrator shall be
rendered no more than 30 calendar days following commencement of proceedings
with respect thereto. Any decision made by the arbitrator (either prior to or
after the expiration of such 30 calendar day period) shall be final, binding and
conclusive on the parties to this Agreement, and each party to the arbitration
shall be entitled to enforce such decision to the fullest extent permitted by
law and entered in any court of competent jurisdiction. The fees and expenses of
the arbitrator and the reasonable fees and expenses of legal counsel and
consultants of the parties shall be paid by the Corporation."
This Amendment may be executed in one or more counterparts, all
of which shall constitute a single agreement.
DATED as of the 11 day of February 2015, but effective
as of the Effective Date.
AMENDMENT TO EMPLOYMENT AGREEMENT- 1
Exhibit 10.19
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement (the "Amendment") is
made and entered into effective as of February 1, 2015 (the "Effective Date"),
by and between Revett Silver Company, a Montana corporation (hereinafter
referred to as the "Corporation") and Monique Hayes (hereinafter referrred to
!bye, as "Employee").
RECITALS:
A. WHEREAS, the Corporation
and Employee are parties to that certain employment agreement dated December 1,
2010 (the "Employment Agreement"); and
B. WHEREAS, the Corporation and
Employee desire to modify certain provisions of the Employment Agreement in an
effort to ensure the Corporation's continued operations and enable it to take
advantage of any offer the Corporation might receive to sell all or
substantially all of its assets or merge or consolidate (or facilitate its
parent corporation, Revett Minerals Inc., in merging or consolidating) with or
into another business entity; and
C. WHEREAS the Corporation and Employee
each reasonably believe such modifications are reasonable and necessary, and
unless consented to and approved as provided in this Amendment, could impede or
impair the Corporation's ability to operate and thereby deprive the Employee of
some or all of the economic benefits of the Agreement.
AGREEMENT:
NOW THEREFORE, in consideration of the respective covenants and
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Corporation and
Employee covenant and agree as follows:
1. |
Amendments to Employment
Agreement. |
1.1 Section
Three - Compensation. The first sentence of Section Three of the Agreement
is deleted and amended to read in its entirety as follows:
"The Corporation shall pay Employee,
and Employee shall accept from the Corporation, compensation at the rate of
$88,000 per year, prorated and payable monthly or on such other basis as the
Corporation and Employee may hereafter agree in writing."
1.2 Section
Three - Compensation. The last two sentences of Section Three of the Agreement
are deleted and amended to read in their entirety its entirety as follows:
AMENDMENT TO EMPLOYMENT AGREEMENT- 2
"Employee shall be entitled to
vacation periods that are commensurate with the policies of the Corporation that
are applicable to exempt employees; provided, however, that Employee shall be
entitle to a minimum paid vacation of four weeks in each calendar year during
which Employee is employed by the Corporation. If Employee fails to use all of
his or her vacation days in a calendar year, such unused vacation days shall
automatically deemed to have been forfeited by Employee, and the Corporation
shall have no obligation to pay or otherwise compensate Employee for the same."
1.3 Section
Five-Termination. Subsection (1) of Section Five is deleted and amended to
read in its entirety as follows:
"Voluntarily and without cause,
subject to Sections Two and Six, upon not less than five (5) calendar days'
prior written notice by the Corporation to the Employee or by the Employee to
the Corporation; or"
1.4 Section
Six -Severance Compensation. Subsection 4(b) of Section Six is deleted and
amended to read in its entirety as follows:
"If any of the events described above
constituting a Change in Control shall have occurred and such Change of Control
shall have resulted in a termination of Employee's employment, or if Employee
terminates his employment for Good Reason (as defined in subsection 4(c) of this
Section Six), then, in either case, the Corporation shall pay Employee a
severance benefit in an amount equal to eighteen months of Employee's salary
calculated immediately prior to such termination. Such severance benefit shall
be paid in one lump sum within thirty (30) days of termination or at such other
date that the Corporation and Employee shall agree, it being understood and
agreed that, if the Corporation and Employee agree that such severance benefit
shall be paid in installments, the Corporation shall have no obligation to pay
Employee interest on any unpaid amount. In addition to the severance benefit,
the Corporation shall continue to pay Employee any other employment-related
benefits to which Employee is entitled, as if he or she continued to be an
employee of the Corporation, for a period of one (1) year following termination
or until such time (which in no event shall exceed one year from such
termination) as Employee receives comparable benefits from a new employer. In
the event Employee has existing stock options, they shall be honored in
accordance with their terms. The severance and other benefits afforded Employee
by this subsection shall not apply despite the occurrence of a Change in Control
if Employee's employment by the Corporation is terminated because of Employee's
death or Disability (as defined in subsection 3 of this Section Six) or if
Employee's employment is terminated by the Corporation For Cause (as defined in
Section Ten).
1.5
Arbitration. A new section (Section Thirteen) reading in its entirety is
hereby added to the Agreement:
AMENDMENT TO EMPLOYMENT AGREEMENT- 3
"SECTION THIRTEEN- ARBITRATION. Any
dispute regarding the interpretation of this Agreement or the performance by the
Corporation or Employee of their respective obligations shall be submitted to
and determined by the decision of a single arbitrator, being either a retired
judge or a retired attorney with a minimum of ten years of experience in
negotiating and documenting employment agreements such as that contemplated by
this Agreement, who shall be selected by mutual agreement of the Corporation and
Employee, and shall be independent of the parties. The arbitration shall be
conducted in Spokane, Washington, in accordance with the arbitration rules set
forth in RCW 7.04A, and the arbitrator shall reach and render a decision in
writing (which shall state the reasons for his or her decision), which shall be
entirely on the basis of the substantive law governing this Agreement. To the
extent practical, decisions of the arbitrator shall be rendered no more than 30
calendar days following commencement of proceedings with respect thereto. Any
decision made by the arbitrator (either prior to or after the expiration of such
30 calendar day period) shall be final, binding and conclusive on the parties to
this Agreement, and each party to the arbitration shall be entitled to enforce
such decision to the fullest extent permitted by law and entered in any court of
competent jurisdiction.
The fees and expenses of the
arbitrator and the reasonable fees and expenses of legal counsel and
consultants of the parties shall be paid by the Corporation.
This Amendment may be executed in one or more counterparts, all
of which shall constitute a single agreement.
DATED as of the 30 day if January 2015, but effective as of the
Effective Date.
THE CORPORATION:
AMENDMENT TO EMPLOYMENT AGREEMENT- 4
Exhibit 10.20
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement (the "Amendment") is
made and entered into effective as of February 1, 2015 (the "Effective
Date"), by and between Revett Silver Company, a Montana corporation (hereinafter
referred to as the "Corporation") and Douglas Stiles (hereinafter referred to as
"Employee").
RECITALS:
A. WHEREAS, the Corporation and Employee are parties
to that certain employment agreement dated August 1, 2014(the "Employment
Agreement"); and
B. WHEREAS, the Corporation and Employee desire to modify
certain provisions of the Employment Agreement in an effort to ensure the
Corporation's continued operations and enable it to take advantage of any offer
the Corporation might receive to sell all or substantially all of its assets or
merge or consolidate (or facilitate its parent corporation, Revett Minerals
Inc., in merging or consolidating) with or into another business entity; and
C. WHEREAS the Corporation and Employee each reasonably believe
such modifications are reasonable and necessary, and unless consented to and
approved as provided in this Amendment, could impede or impair the Corporation's
ability to operate and thereby deprive the Employee of some or all of the
economic benefits of the Agreement.
AGREEMENT:
NOW THEREFORE, in consideration of the respective covenants and
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Corporation and
Employee covenant and agree as follows:
1. |
Amendments to Employment
Agreement. |
1.1 Section
Three -Compensation. The first sentence of Section Three of the Agreement is
deleted and amended to read in its entirety as follows:
"The Corporation shall pay Employee,
and Employee shall accept from the Corporation, compensation at the rate of
$125,000 per year, prorated and payable monthly or on such other basis as
the Corporation and Employee may hereafter agree in writing."
1.2 Section
Three -Compensation. The last two sentences of Section Three of the
Agreement are deleted and amended to read in their entirety its entirety as
follows:
"Employee shall be entitled to
vacation periods that are commensurate with the policies of the Corporation that
are applicable to exempt employees; provided, however, that Employee shall be
entitle to a minimum paid vacation of Four weeks in each calendar year during
which Employee is employed by the Corporation. If Employee fails to use all of
his or her vacation days in a calendar year, such unused vacation days shall
automatically deemed to have been forfeited by Employee, and the Corporation
shall have no obligation to pay or otherwise compensate Employee for the same."
AMENDMENT TO EMPLOYMENT AGREEMENT- 5
1.3 Section
Five-Termination. Subsection (1) of Section Five is deleted and amended to
read in its entirety as follows:
"Voluntarily and without cause,
subject to Sections Two and Six, upon not less than five (5) calendar days'
prior written notice by the Corporation to the Employee or by the Employee to
the Corporation; or"
1.4 Section
Six -Severance Compensation. Subsection 4(b) of Section Six is deleted and
amended to read in its entirety as follows:
"If any of the events described above
constituting a Change in Control shall have occurred and such Change of Control
shall have resulted in a termination of Employee's employment, or if Employee
terminates his employment for Good Reason (as defined in subsection 4(c) of this
Section Six), then, in either case, the Corporation shall pay Employee a
severance benefit in an amount equal to eighteen months of Employee's salary
calculated immediately prior to such termination. Such severance benefit shall
be paid in one lump sum within thirty (30) days of termination or at such other
date that the Corporation and Employee shall agree, it being understood and
agreed that, if the Corporation and Employee agree that such severance benefit
shall be paid in installments, the Corporation shall have no obligation to pay
Employee interest on any unpaid amount. In addition to the severance benefit,
the Corporation shall continue to pay Employee any other employment-related
benefits to which Employee is entitled, as if he or she continued to be an
employee of the Corporation, for a period of one (1) year following termination
or until such time (which in no event shall exceed one year from such
termination) as Employee receives comparable benefits from a new employer. In
the event Employee has existing stock options, they shall be honored in
accordance with their terms. The severance and other benefits afforded Employee
by this subsection shall not apply despite the occurrence of a Change in Control
if Employee's employment by the Corporation is terminated because of Employee's
death or Disability (as defined in subsection 3 of this Section Six) or if
Employee's employment is terminated by the Corporation For Cause (as defined in
Section Ten).
1.5
Arbitration. A new section (Section Thirteen) reading in its entirety is hereby
added to the Agreement:
"SECTION THIRTEEN- ARBITRATION. Any
dispute regarding the interpretation of this Agreement or the performance by the
Corporation or Employee of their respective obligations shall be submitted to
and determined by the decision of a single arbitrator, being either a retired
judge or a retired attorney with a minimum of ten years of experience in
negotiating and documenting employment agreements such as that contemplated by
this Agreement, who shall be selected by mutual agreement of the Corporation and
Employee, and shall be independent of the parties. The arbitration shall be
conducted in Spokane, Washington, in accordance with the arbitration rules set
forth in RCW 7.04A, and the arbitrator shall reach and render a decision in
writing (which shall state the reasons for his or her decision), which shall be
entirely on the basis of the substantive law governing this Agreement. To the
extent practical, decisions of the arbitrator shall be rendered no more than 30
calendar days following commencement of proceedings with respect thereto. Any
decision made by the arbitrator (either prior to or after the expiration of such
30 calendar day period) shall be final, binding and conclusive on the parties to
this Agreement, and each party to the arbitration shall be entitled to enforce
such decision to the fullest extent permitted by law and entered in any court of
competent jurisdiction. The fees and expenses of the arbitrator and the
reasonable fees and expenses of legal counsel and consultants of the parties
shall be paid by the Corporation.
AMENDMENT TO EMPLOYMENT AGREEMENT- 6
This Amendment may be executed in one or more counterparts, all
of which shall constitute a single agreement.
DATED as of the 30 day of January 2015, but effective as of the
Effective Date.
Exhibit 23.1
Consent of Independent Registered Public Accounting
Firm
Revett Mining Company, Inc.
Spokane Valley, WA
We hereby consent to the incorporation by reference in the
Registration Statement on Form S-8 (No. 333-163225) of Revett Mining Company,
Inc. of our report dated March 27, 2015, relating to the consolidated financial
statements, which appears in this Form 10-K. Our report contains an explanatory
paragraph regarding the Companys ability to continue as a going concern.
/s/ BDO USA, LLP
Spokane, WA
March 27, 2015
Exhibit 31.1
Certification of Registrants Principal Executive Officer
I, John G. Shanahan, certify that:
1. I have reviewed this Annual Report
on Form 10-K of Revett Mining Company (the registrant).
2. Based on my knowledge, this report
does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the period covered by this report.
3. Based on my knowledge, the financial
statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this
report.
4. The registrants other certifying officer
and I are responsible for establishing and maintaining disclosure controls and
procedures as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and internal control over financial reporting as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
(a) designed such
disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) designed such
internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally
accepted accounting principles;
(c) evaluated the
effectiveness of the registrants disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
(d) disclosed in
this report any change in the registrants internal control over financial
reporting that occurred during the registrants most recent fiscal quarter (the
registrants fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the
registrants internal control over financial reporting;
5 The registrants other certifying officer
and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrants auditors and the audit committee
of the registrants board of directors (or persons performing the equivalent
functions):
(a) all significant
deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect
the registrant ability to record, process, summarize and report financial
information; and
(b) any fraud,
whether or not material, that involved management or other employees who have a
significant role in the registrants internal control over financial reporting.
/s/ John G. Shanahan |
Date: March 30, 2015 |
|
|
John G. Shanahan |
|
Chief Executive Officer |
|
Exhibit 31.2
Certification of Registrants Principal Financial Officer
I, Kenneth S. Eickerman, certify that:
1. I have reviewed this Annual Report on
Form 10-K of Revett Mining Company the registrant).
2. Based on my knowledge, this report does
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this report.
3. Based on my knowledge, the financial
statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this
report.
4. The registrants other certifying officer
and I are responsible for establishing and maintaining disclosure controls and
procedures as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and internal control over financial reporting as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
(a) designed such
disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) designed such
internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally
accepted accounting principles;
(c) evaluated the
effectiveness of the registrants disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
(d) disclosed in
this report any change in the registrants internal control over financial
reporting that occurred during the registrants most recent fiscal quarter (the
registrants fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the
registrants internal control over financial reporting;
5. The registrants other certifying officer
and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrants auditors and the audit committee
of the registrants board of directors (or persons performing the equivalent
functions):
(a) all significant
deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect
the registrant ability to record, process, summarize and report financial
information; and
(b) any fraud,
whether or not material, that involved management or other employees who have a
significant role in the registrants internal control over financial reporting.
/s/ Kenneth S. Eickerman |
Date: March 30, 2015 |
|
|
Kenneth S. Eickerman |
|
Chief Financial Officer |
|
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Revett Minerals Inc.
(the Company) on Form 10-K for the period ended December 31, 2014, as filed
with the Securities and Exchange Commission on the date hereof (the Report),
each of the undersigned hereby certifies, pursuant to 18 U.S.C. § 1350, as
adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the
requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and
(2) The information contained in the Report
fairly presents, in all material respects, the financial condition and result of
operations of the Company.
/s/ John Shanahan
John Shanahan
President and Chief Executive Officer
Date: March 30, 2015
A signed original of this written statement required by Section
906 has been provided to Revett Mining Company, Inc. and will be retained by
Revett Mining Company, Inc. and furnished to the Securities and Exchange
Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Revett Minerals Inc.
(the Company) on Form 10-K for the period ended December 31, 2014, as filed
with the Securities and Exchange Commission on the date hereof (the Report),
each of the undersigned hereby certifies, pursuant to 18 U.S.C. § 1350, as
adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the
requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and
(2) The information contained in the Report
fairly presents, in all material respects, the financial condition and result of
operations of the Company.
/s/ Kenneth S. Eickerman
Kenneth S. Eickerman
Chief Financial Officer
Date:
March 30, 2015
A signed original of this written statement required by Section
906 has been provided to Revett Mining Company, Inc. and will be retained by
Revett Mining Company, Inc. and furnished to the Securities and Exchange
Commission or its staff upon request.
Revett Mining Company, Inc. (AMEX:RVM)
Historical Stock Chart
From Sep 2024 to Oct 2024
Revett Mining Company, Inc. (AMEX:RVM)
Historical Stock Chart
From Oct 2023 to Oct 2024