First Quarter Highlights

The U.S. Forest Service and the Montana Department of Environmental Quality ("DEQ") issued the draft Environmental Impact Statement ("EIS") for the public comment period which ends on June 27, 2009. On May 15, 2009, the government agencies extended the public comment period by 30 days from its original expiration date of May 28, 2009.

Small Mine Development (SMD), the Company's underground mine contractor, continued the excavation of two sumps and placed them into service as part of the adit dewatering system to clarify water before sending it to the water treatment plant.

The Company maintained a strong cash and investment position at March31, 2009, with $17.9 million of unrestricted cash, availability under its line of credit, and unrestricted certificates of deposit.

The Company implemented a program to reduce expenditures and conserve cash during the current metal price downturn.

The net cash expenditures for the quarter ended March31, 2009 was $2.1 million for operating and investing activities. Management has reviewed near term spending forecast and implemented a plan to diligently conserve cash where prudent. The Company believes that it has sufficient working capital to complete the rehabilitation of the Libby adit and commencement of delineation drilling.

Advanced Exploration and Delineation Drilling Program

Libby operations in the first quarter of 2009 included continued operations on the Montanore site water treatment system, construction of dewatering sumps, completion of the design work of the nitrate removal system and continued planning for the rehabilitation of the 14,000 foot Libby adit.

Small Mine Development, our adit rehabilitation contractor, is currently re-bolting and scaling the entry of the adit. At of the end of March2009, it has advanced in excess of 5000 feet. Advance rates are expected to increase as Small Mine Development gains familiarity with our equipment and develops a systematic approach to the work. Thus far, the ground conditions appear to be as expected. Original projections had required that welded wire mesh be installed on the ribs down approximately 5 ft. from the sill. After the first quarter advance, it now appears that this may not be necessary throughout the adit.

Engineering for the nitrate removal addition to the water treatment system is complete, but construction is on hold pending receipt of the EIS and Record of Decision (ROD). Construction of the nitrate system is scheduled to start and be completed prior to beginning to drive the final section of the adit to reach the ore body and install drill stations. The current schedule is to begin construction of the concrete chambers in the early fall of 2009 or late April/early Mayof 2010 based on timing of receipt of the ROD following completion of the final EIS.

Engineering and geology work continues using existing information. Geology confirmation mapping is beginning with the advance of the rehabilitation down the decline. Currently, a system is being developed to evaluate the water producing areas as they are encountered.

Permitting and Environmental

In the first quarter of 2009, the U.S.