Mines Management Inc.
AMEX : MGN

May 31, 2005 20:24 ET

Mines Management Reports First Quarter 2005 Results

SPOKANE, Wash--(CCNMatthews - May 31, 2005) -

Mines Management Inc. (AMEX:MGN) announces financial results for the first quarter, and updates to the company's operations.

The company reported a net loss for the first quarter ending March 31, 2005, of $1,147,770, or $0.11 per share versus a loss of $1,561,804, or $0.17 per share for the prior year quarter ending March 31, 2004. The decrease in net loss for 2005 of $414,034 was due to a decrease in non-cash stock option expense of $667,126, a decrease in fees and licenses of $58,307, and increase in interest income of $40,991, offset by increases in administrative expenses of $243,767; salaries of $84,257; office rent and expense of $12,860, and other miscellaneous expenses of $11,506. Administrative expenses increased as a result of heightened investor relations activities and higher salary expense due to the addition of two employees, the Chief Financial Officer and the Vice President of Operations.

In the first quarter of 2005, the Company worked to advance the Montanore Project. The re-permitting process was initiated with state and federal agencies. Mines Management submitted the Hard Rock Operating Permit and Proposed Plan of Operations for the Montanore Project to the U.S. Forest Service and Montana Department of Environmental Quality, and is currently responding to the initial comment letter received from the agencies.

During the quarter, McIntosh Engineering was engaged to conduct underground mine planning, optimization and trade off studies. McIntosh will coordinate with Hatch Ltd. toward completing a final feasibility study prior to year end. Mine Development Associates was engaged to complete a reserve review and reports that conform to S.E.C. standards and to Canadian National Instrument 43-101 standards.

The Company's President and CEO, Glenn M. Dobbs, stated, "The company's higher level of spending for 2005 is reflective of the increased activity level on the Montanore Project. This is an exciting time for the Company as serious steps are being taken to advance the project toward ultimate production. The re-permitting process is moving forward, and we were gratified to receive support from the Governor of Montana, as well as the community leaders from Lincoln County and Libby. The recent completion of a Memorandum of Agreement (MOA) was a major step forward as it provides us with a solid understanding that the permitting agencies can assist us in completing this process in a reasonable time period."

Dobbs went on to say, "Operationally, the feasibility work will better identify the optimal approach for mining at the Montanore to enable us to proceed with financing and construction decisions."

At the end of the first quarter, the Company had approximately $6.0 million in cash and investments. Expenditures are expected to increase in 2005 due to re-permitting and feasibility work.

For 2005, the Company plans to focus on advancement of the Montanore Project with a strong emphasis on the re-permitting process, feasibility study, reserve review and development of an underground definition drilling plan.

Mines Management, Inc. is a U.S.-based mineral development company focused on the exploration and development of silver dominant deposits. The company's primary project is the Montanore Silver-Copper Project located in northwestern Montana.

This press release contains forward-looking statements regarding the Company, within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, including statements regarding the completion of permitting process for the Montanore Silver-Copper Project in a reasonable time period, the work to be performed by McIntosh Engineering, Hatch Ltd. and Mine Development Associates, the results of the feasibility work, expected increases in expenditures in 2005, and the support for the Montanore Project of the Governor of Montana and Lincoln County and Libby community leaders. These statements are based on assumptions that the Company believes are reasonable but that are subject to uncertainties and business risks. Actual results relating to any and all of these subjects may differ materially from those presented. Factors that could cause results to differ materially include fluctuations in silver and copper prices, negative results of environmental studies, problems or delays in or objections to the permitting process, the proximity of the Project to the Cabinet Wilderness Area, failure or delay of third parties to provide services, changes in the attitude of state and local officials toward the Montanore Project and other factors discussed in the Company's periodic filings with the Securities and Exchange Commission, including its annual report on Form 10-KSB, as amended, for the year ended December 31, 2004.

Further information about Mines Management, Inc. can be reviewed on the website for the Securities and Exchange Commission at http://www.sec.gov or on the company's website at http://www.minesmanagement.com.

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