Revett Mining 10-Q 2013 Q2 Quarterly report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THESECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2013.

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OF 15 (d) OF THESECURITIES EXCHANGE ACT OF 1934

 FOR THE TRANSITION PERIODFROM ___________TO__________.

REVETT MINERALS INC.
(Exact name of small business issuer in its charter)

Canada	Not Applicable
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

11115 East Montgomery, Suite G
Spokane Valley, Washington 99206
(Address of principal executive offices)

Registrant’s telephone number:(509) 921-2294

Indicate by check mark whether 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 a 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.
[X] yes[   ] no

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in rule 12b-2 of the Exchange Act. (Check One)

Large accelerated filer [   ]	Accelerated filer [X]
Non-accelerated filer [   ]	Smaller reporting company   [   ]

Indicate by check whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.
[   ] yes[X] No

At August 8, 2013, 34,596,387shares of common stock were issued and outstanding.

INDEX

PAGE

PART I – FINANCIAL INFORMATION		4
ITEM 1.	FINANCIAL STATEMENTS	4
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	22
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	31
ITEM 4.	CONTROLS AND PROCEDURES	31
PART II – OTHER INFORMATION		32
ITEM 1.	LEGAL PROCEEDINGS	32

2

Part I – Financial Information

Item 1. Financial Statements (unaudited)

Revett Minerals Inc. and Subsidiaries

Contents

Page

FINANCIAL STATEMENTS:
Consolidated balance sheets	4
Consolidated statements of operations and comprehensive income (loss)	5
Consolidated statements of cash flows	6
Consolidated statements of shareholders’ equity	7
Notes to consolidated financial statements	8-21

3

Revett Minerals Inc.
Consolidated Balance Sheets
at June 30, 2013 and December 31, 2012
(expressed in thousands of United States dollars except share and per share amounts)
(Unaudited)

		June 30, 2013			December 31, 2012
Assets
Current Assets
Cash and cash equivalents	$	8,392		$	18,986
Short-term investments		6,654			9,264
Concentrate settlement and other receivables		5			363
Inventories		4,466			4,512
Deferred income tax asset		14			432
Prepaid expenses and deposits		874			1,228
Total current assets		20,405			34,785
Property, plant, and equipment (net)		64,563			64,357
Restricted cash		6,539			6,533
Available for sale securities		530			1,432
Other long term assets		652			863
Total assets	$	92,689		$	107,970
Liabilities and shareholders’ equity
Current liabilities
Trade accounts payable	$	712		$	2,129
Payroll liabilities		663			872
Income, property and mining taxes		852			1,975
Other accrued payable		352			301
Current portion of capital lease obligations and note payable		953			991
Total current liabilities		3,532			6,268
Long term portion of capital lease obligations and note payable		829			1,289
Reclamation and remediation liability		5,836			5,598
Deferred income taxes		864			5,942
Warrant derivative liability		-			93
Total liabilities		11,061			19,190
Commitments and contingencies (note 9)
Shareholders' equity
Preferred stock, no par value, unlimited authorized, no shares issued and outstanding		-			-
Common stock, no par value unlimited authorized, 34,596,387 and 34,492,387 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively		88,211			87,727
Accumulated other comprehensive loss, net of tax		-			(538	)
Retained earnings (deficit)		(6,583	)		1,591
Total equity		81,628			88,780
Total liabilities and shareholders’ equity	$	92,689		$	107,970

See accompanying notes to unaudited interim consolidated financial statements.

4

Revett Minerals Inc.
Consolidated Statements of Operations and Comprehensive income (loss)
Three and six months ended June 30, 2013 and 2012
(expressed in thousands of United States dollars except share and per share amounts)
(unaudited)

		Three month			Three month			Six month			Six month
		period ended			period ended			period ended			period ended
		June 30, 2013			June 30, 2012			June 30, 2013			June 30, 2012
Revenues	$	-		$	13,490		$	216		$	32,653
Expenses:
Cost of sales		-			10,425			-			22,234
Troy Mine suspension related costs		3,919			-			8,339			-
Depreciation and depletion		8			666			16			1,315
Exploration and development		322			1,165			639			1,995
General & administrative:
Stock based compensation		142			2,016			333			2,032
Other		784			1,534			1,801			2,782
Accretion of reclamation and remediation liability		119			169			238			338
		5,294			15,975			11,366			30,696
Income (loss) from operations
		(5,294	)		(2,485	)		(11,150	)		1,957
Other income (expenses):
Interest expense		(60	)		(89	)		(672	)		(217	)
Interest and other income		15			102			11			213
Loss on available for sale securities		(1,114	)		(90	)		(1,376	)		(90	)
Gain on warrant derivative		21			323			63			543
Total other income (expenses)		(1,138	)		246			(1,974	)		449
Income (loss) before income taxes		(6,432	)		(2,239	)		(13,124	)		2,406
Income tax benefit (expense):
Current income tax benefit (expense)		-			(226	)		-			(331	)
Deferred income benefit (expense)		2,377			238			4,950			(581	)
Net income (loss)	$	(4,055	)	$	(2,227	)	$	(8,174	)	$	1,494
Other comprehensive income (loss)		437			(230	)		538			(478	)
Comprehensive income (loss)		(3,618	)	$	(2,457	)	$	(7,636	)	$	1,016
Net income (loss) for basic earnings per share		(4,055	)	$	(2,227	)	$	(8,174	)	$	1,494
Net income (loss) for diluted earnings per share		(4,055	)	$	(2,227	)	$	(8,174	)	$	951
Basic earnings (loss) per share	$	(0.12	)	$	(0.07	)	$	(0.24	)	$	0.04
Diluted earnings (loss) per share	$	( 0.12	)	$	(0.07	)	$	(0.24	)	$	0.03
Weighted average number of shares outstanding		34,596,387			34,183,265			34,587,785			34,156,213
Weighted average number of diluted shares outstanding		34,596,387			34,183,265			34,587,785			35,331,019

See accompanying notes to unaudited interim consolidated financial statements.

5

Revett Minerals Inc.
Consolidated Statements of Cash Flows
Six months ended June 30, 2013 and 2012
(expressed in thousands of United States dollars except share and per share amounts)
(unaudited)

		Six month			Six month
		period ended			period ended
		June 30, 2013			June 30, 2012
Cash flows from operating activities:
Net income (loss) for the period	$	(8,174	)	$	1,494
Adjustment to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		16			1,315
Deferred financing fee amortization		556			139
Accretion of reclamation and remediation liability		238			338
Loss on impairment of available for sale securities		969			-
Stock based compensation		333			2,117
Loss (gain)on disposal of fixed assets		(22	)		5
Accrued interest from reclamation trust fund		(6	)		(8	)
Amortization of prepaid insurance premium		-			52
Gain on warrant derivative		(63	)		(543	)
Deferred income tax		(4,950	)		581
Loss on sale of securities		407			90
Changes in:
Concentrate settlement and other receivable		357			1,344
Inventories		33			284
Prepaid expenses and other assets		10			(245	)
Accounts payable and accrued liabilities		(2,697	)		45
Net cash provided (used) by operating activities		(12,993	)		7,008
Cash flows from investing activities:
Purchase of plant and equipment		(222	)		(2,430	)
Proceeds from the sale of short term investments		2,610			-
Other long term assets		-			2
Proceeds from the sale of fixed assets		35			-
Proceeds from sale of available for sale securities		352			184
Purchase of short term investments		-			(80	)
Net cash provided (used) in investing activities		2,775			(2,324	)
Cash flows from financing activities:
Proceeds from the exercise of options and warrants, net		120			439
Repayment of capital leases and note payable		(496	)		(328	)
Net cash provided (used) by financing activities		(376	)		111
Net increase (decrease) in cash and cash equivalents		(10,594	)		4,795
Cash and cash equivalents, beginning of period		18,986			16,086
Cash and cash equivalents, end of period	$	8,392		$	20,881
Non cash transactions:
Common stock issued for services		-			85
Acquisition of plant and equipment under capital lease		-			1,852

See accompanying notes to unaudited interim consolidated financial statements.

6

Revett Minerals Inc.
Consolidated Statements of Shareholders’ Equity
Six months ended June 30, 2013 and year ended December 31, 2012
(expressed in thousands of United States dollars except share and per share amounts)
(unaudited)

					Accumulated
					other
					Comprehensive
	Common Shares				Income
								Retained
								earnings
	Shares		Amount		(Loss)			(deficit)			Total
Balance, December 31, 2011	34,119,216	$	84,587	$	160		$	(2,494	)	$	82,253
Issue of shares for services	20,335		85		-			-			85
Issue of shares for exercise of options	72,000		108		-			-			108
Issue of shares for exercise of warrants	280,836		915		-			-			915
Unrealized loss on marketable securities, net of tax	-		-		(698	)		-			(698	)
Stock-based compensation on options Granted	-		2,032		-			-			2,032
Net income for the period	-		-		-			4,085			4,085
Balance, December 31, 2012	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		126		-			-			126
Reclassification of loss on marketable securities included in net income	-		-		538			-			538
Stock-based compensation on options granted	-		333		-			-			333
Net loss for the period	-		-		-			(8,174	)		(8,174	)
Balance, June 30, 2013	34,596,387	$	88,211	$	-		$	(6,583	)	$	81,628

See accompanying notes to unaudited interim consolidated financial statements

7

Revett Minerals Inc.
Notes to Consolidated Financial Statements
Three and six months ended June 30, 2013 and 2012
(expressed in thousands of United States dollars unless otherwise stated)
(unaudited)

1. Basis of Presentation:

In the opinion of management, the accompanying unaudited interim consolidated balance sheets and consolidated statements of operations and comprehensive income (loss), cash flows, and shareholders’ equity contain all adjustments, consisting of normal recurring items, necessary to present fairly, in all material respects, the financial position of Revett Minerals Inc. (“Revett Minerals” or the “Company”) as of June 30, 2013, and the results of its operations and its cash flows for the three and six month periods ended June 30, 2013 and 2012. The operating and financial results for Revett Minerals for the three and six months ended June 30, 2013 are not necessarily indicative of the results that may be expected for the year ended December 31, 2013.

These unaudited interim financial statements have been prepared by management in accordance with generally accepted accounting principles used in the United States of America (U.S. GAAP) and are presented in U.S. dollars. These unaudited interim consolidated financial statements do not include all note disclosures required by U.S. GAAP on an annual basis, and therefore should be read in conjunction with the annual audited consolidated financial statements for the year ended December 31, 2012 filed with the appropriate securities regulatory authorities.

The Company’s liquidity position is directly related to the level of concentrate production, the cost of this production and the provisional and final prices received for the copper and silver in concentrate that is sold. In mid-December 2012, the Company suspended underground mining and milling operations at Troy because of unstable and unsafe ground conditions in the mine. In May 2013, due to the unexpected discovery of ground fall and structural damage along the Lower Quartzite “A Drive”, the Company has focused its efforts to re-establish access to the Lower Quartzite haulage route through the “D Drive”, approximately 300 feet east of the “A Drive”. If the “D Drive” is not successful in re-establishing access to the Lower Quartzite haulage route, which would enable operations to recommence in the fourth quarter 2013, the Company would have to undertake alternative development plans that would require capital in excess of current working capital.

The Company continues to have preliminary discussions with interested parties in obtaining additional capital, however, no assurance can be given that these efforts will prove to be successful. Given current market conditions, the Company may experience difficulties in raising sufficient external financing to meet its obligations and provide access to Troy mine ore reserves. Because of the Company’s need to conserve cash, all discretionary capital spending and exploration spending has been placed on hold.

2. Changes affecting consolidated financial statements and future accounting changes:

Accounting principles:

(a) Future accounting changes

There were no new pronouncements issued by the FASB that are expected to materially impact the Company’s consolidated financial statements for future periods.

8

Revett Minerals Inc.
Notes to Consolidated Financial Statements
Three and six months ended June 30, 2013 and 2012
(expressed in thousands of United States dollars unless otherwise stated)
(unaudited)

3. Inventory

The major components of the Company’s inventory accounts are as follows:

		June 30, 2013		December 31, 2012
Concentrate inventory	$	791	$	733
Material and supplies		3,675		3,779
	$	4,466	$	4,512

The concentrate inventory was written down to net realizable value at June 30, 2013. The write down was $0.2 million.

4. Property, Plant and Equipment

The major components of the Company’s mineral property, plant, and equipment accounts are as follows:

		June 30, 2013			December 31, 2012
Troy:
Property acquisition and development costs	$	17,506		$	17,506
Plant and equipment		17,887			18,387
Buildings and structures		5,677			5,553
		41,070			41,446
Rock Creek:
Property acquisition costs		34,976			34,976
Other, corporate		4,330			4,330
Other, mineral properties		118			118
		80,494			80,870
Accumulated depreciation and depletion:
Troy Property acquisition and development costs		(7,332	)		(7,332	)
Troy plant and equipment		(6,819	)		(7,416	)
Troy buildings and structures		(1,630	)		(1,630	)
		(15,781	)		(16,378	)
Other corporate assets		(150	)		(135	)
		(15,931	)		(16,513	)
	$	64,563		$	64,357

The net book value of assets under capital leases at June 30, 2013 and December 31, 2012 was $2.1 million and $2.1 million, respectively. At June 30, 2013, there is $0.4 million of construction in progress included in the Troy buildings and structures which are not subject to depreciation until these assets are placed into service.

9

Revett Minerals Inc.
Notes to Consolidated Financial Statements
Three and six months ended June 30, 2013 and 2012
(expressed in thousands of United States dollars unless otherwise stated)
(unaudited)

Included in other corporate assets is Revett Holdings Inc., a wholly owned subsidiary of Revett Silver Company, which owns undeveloped real estate lands with a carrying value of $3.6 million. These lands are intended to be gifted, or otherwise transferred to the U.S. Forest Service or the State of Montana for mitigation requirements, as the Rock Creek evaluation program and mine development proceeds. The property costs for Rock Creek will be amortized when the property is placed into production, or written off if it is determined that Rock Creek cannot be developed.

5.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 Company’s available for sale securities at:

		June 30,			December 31,
		2013			2012
Cost	$	1,499		$	2,259
Other than temporary impairment charge		(969	)		-
Unrealized loss		-			(827	)
Fair value	$	530		$	1,432

During the three and six months ended June 30, 2013, the Company sold a portion of its available for sale equity securities for gross proceeds of approximately $0.1 million and $0.4 million, respectively, and recognized a loss of $0.1 million and $0.4 million, respectively, and in 2012 the Company sold a portion of its available for sale equity securities for gross proceeds of approximately $0.2 million and recognized a loss of $0.1 million. In addition, the Company recognized an other than temporary impairment charge of $1.0 million during the three months ended June 30, 2013.

6. Long-term debt

(a) Capital leases and note payable:

At June 30, 2013 and December 31, 2012, the balance of the Company’s note payable and capital lease obligations were as follows:

		June 30,			Dec. 31,
		2013			2012
Capital leases and note payable	$	1,782		$	2,280
Less current portion		(953	)		(991	)
	$	829		$	1,289

10

Revett Minerals Inc.
Notes to Consolidated Financial Statements
Three and six months ended June 30, 2013 and 2012
(expressed in thousands of United States dollars unless otherwise stated)
(unaudited)

The Company has a number of capital leases and a note payable for mining equipment for use at Troy. Scheduled minimum capital lease and note payable principle repayments at June 30, 2013 are as follows:

		Capital		Note
		Leases		Payable		Total
July 1, 2013 to June 30, 2014	$	676	$	293
July 1, 2014 to June 30, 2015		510		305
July 1, 2015 to June 30, 2016		-		51
		1,186		649
Less amount representing interest (at rates ranging from 1.6% to 4.1%)		53
Total present value of net minimum capital lease and note payable payment		1,133		649		1,782
Less current portion		661		292		953
	$	472	$	357	$	829

(b) Revolving credit facility:

On December 10, 2011, the Company entered into a revolving credit agreement with Societe Generale for a $20.0 million credit facility which was subject to interest at the London Interbank Offered Rate (“LIBOR”) plus 350 basis points for an initial three year term. On February 28, 2013, primarily based upon the suspension of mining operations at the Troy Mine, the Company and Societe Generale agreed to suspend the facility for an initial six month period.

Revett Silver Company is the designated borrower under the facility. Revett Minerals Inc. and its subsidiaries Troy Mine Inc. and RC Resources Inc. are the guarantors of the facility. Draws under the facility may be in the form of revolving credit loans or letters of credit. The facility is collateralized by first priority liens and security interests in the properties and assets comprising the Troy Mine Inc. and RC Resources Inc. and by Revett Minerals Inc.’s pledge of the outstanding common stock of Revett Silver Company. This agreement is subject to financial covenants regarding consolidated fixed charge coverage ratio, consolidated current ratio and consolidated tangible net worth. No funds had been drawn under the facility and no silver or copper price hedging was in place as of June 30, 2013.

The Company paid a commitment fee and other transaction costs of $0.9 million in 2011. During the quarter ended March 31, 2013, the Company expensed the remaining unamortized deferred loan fee balance of $0.6 million, which is included in interest expense, because there is no assurance that this credit facility will be renewed.

7. Derivatives

Warrant Derivative Liabilities:

Some of the Company’s issued and outstanding common share purchase warrants have exercise prices denominated in a foreign currency (Canadian dollars). 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 derivate liability and recognized at fair value. Changes in the fair value of these warrants are recognized in earnings until such time as the warrants are exercised or expire.

11

Revett Minerals Inc.
Notes to Consolidated Financial Statements
Three and six months ended June 30, 2013 and 2012
(expressed in thousands of United States dollars unless otherwise stated)
(unaudited)

The following table presents the reconciliation of the fair value of the warrants:

		For the three			For the three			For the six			For the six
		months ended			months ended			months ended			months ended
		June 30, 2013			June 30, 2012			June 30, 2013			June 30, 2012
Balance, beginning of period	$	21		$	950		$	93		$	1,170
Gain on derivatives		(21	)		(323	)		(63	)		(543	)
Value of warrants exercised		-			(412	)		(30	)		(412	)
Balance, end of period	$	-		$	215		$	-		$	215

These common share purchase warrants do not trade in an active securities market, and as such, the Company estimated the fair value of these warrants using the Black-Scholes option pricing model using the following assumptions at June 30, 2013: weighted average risk-free interest rate 0.03%, weighted average volatility 105.18%, expected dividend yield – nil, and weighted average expected life (in years) 0.12 and at June 30, 2012: weighted average risk-free interest rate 0.21%, weighted average volatility 55.63%, expected dividend yield – nil, and weighted average expected life (in years) 1.2. The fair value estimate is classified as level 2 in the fair value hierarchy.

8. Share Capital

(a) Common Stock

The Company has one class of no par value common stock of which an unlimited number of shares 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 Company’s common stock are not entitled to preemptive rights to acquire additional shares of common stock and do not have cumulative voting rights.

During the six months ended June 30, 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 the exercise of warrants for cash proceeds of $0.1 million.

(b) Preferred Stock

The Company is authorized to issue an unlimited number of no par preferred stock. The Company’s 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 June 30, 2013, no preferred stock was issued or outstanding.

12

Revett Minerals Inc.
Notes to Consolidated Financial Statements
Three and six months ended June 30, 2013 and 2012
(expressed in thousands of United States dollars unless otherwise stated)
(unaudited)

(c) Stock options

The Company’s Equity Incentive Plan authorizes the Company to reserve and have available for issue, 6,500,000 shares of common stock. There were 1,094,500 stock options granted during the six months ended June 30, 2013 with an exercise price of $2.16, expiring on March 21, 2018. The Company used the Black-Scholes option pricing model with a risk-free interest rate of 0.33%, volatility of 52.16% and an expected life of the options of 30 months to estimate the fair values of the options. The weighted average fair value per share was $0.69 for a total value of $0.8 million. These stock options vest 25% at the end of each quarter in 2013. As at June 30, 2013 and 2012, there was $0.3 million and $0, respectively, of unrecognized compensation costs relating to unvested stock options that will be recognized within the next six months.

During the three and six months ended June 30, 2013, 135,000 options were cancelled or expired and 49,000 options were exercised. During the quarter ended June 30, 2013, vesting provisions of 237,750 options granted in the first quarter of 2013 were accelerated. As of June 30, 2013 and 2012, the intrinsic value of options outstanding and exercisable was $0.03 million and $1.0 million, respectively.

Total stock-based compensation recognized during the three and six months ended June 30, 2013 was $0.1 million and $0.2 million, respectively. Total stock based compensation recognized during the three and six months ended June 30, 2012 was $2.0 million and $2.0 million, respectively.

During the three and six months ended June 30, 2013, a total of $0.1 million and $0.3 million stock option compensation (2012 - $0.0 million and $1.4 million, respectively) was attributable to the Troy Mine employees and is included in the amounts reported in general and administrative expense.

As of June 30, 2013, the following stock options were outstanding:

Options	Options		Exercise		Expiration
Granted	Exercisable		Price		Date
10,000	10,000		2.50		November 1, 2013
35,000	35,000		4.30		December 13, 2013
687,000	687,000		3.40		December 31, 2013
10,000	10,000		4.45		February 25, 2014
34,500	34,500		0.52	CDN	March 31, 2014
10,000	10,000		4.18		April 15, 2014
10,000	10,000		0.45	CDN	April 27, 2014
85,500	85,500		3.55		May 31, 2014
110,000	110,000		0.45		September 10, 2014
15,000	15,000		1.05		November 2, 2014
30,000	30,000		1.65		December 30, 2014
204,000	204,000		2.15		March 15, 2015
20,000	20,000		2.50		November 1, 2015
592,000	592,000		4.98		March 21, 2016
2,500	2,500		5.93		April 8, 2016
744,500	744,500		4.18		April 1, 2017
20,000	20,000		3.77		May 3, 2017
742,500	341,250		2.16		March 21, 2018
3,362,500	2,991,250	$	3.50

13

Revett Minerals Inc.
Notes to Consolidated Financial Statements
Three and six months ended June 30, 2013 and 2012
(expressed in thousands of United States dollars unless otherwise stated)
(unaudited)

(d) Stock Purchase Warrants

The following stock purchase warrants were outstanding at June 30, 2013 for the purchase of common shares of Revett Minerals:

Number	Exercise price	Expiration
37,011	CDN $ 1.75	August 24, 2013
1,071,427	US $ 1.81	August 24, 2013
1,108,438

No warrants were exercised or expired during the three months ended June 30, 2013. During the six months ended June 30, 2013, there were 55,000 warrants exercised and no warrants expired. During the three and six months ended June 30, 2012, there were 244,836 warrants exercised and no warrants expired.

9. Commitments and Contingenciesa) Reclamation

The following table shows the changes in the reclamation liability for the periods indicated.

		Six months ended		Six months ended
		June 30, 2013		June 30, 2012
Reclamation and remediation liability beginning of period	$	5,598	$	7,955
Accretion expense, year to date		238		338
Ending balance	$	5,836	$	8,293

b) Rock Creek Development

Rock Creek is a development-stage silver and copper deposit located in Sanders County, Montana, approximately five miles northeast of Noxon, Montana and sixteen air miles southeast of Troy. The project comprises 99 patented lode-mining claims, 370 unpatented lode- mining claims, five tunnel site claims, 85 mill site claims and approximately 754 acres of fee land. The patented claims lying within the Cabinet Mountain Wilderness Area convey mineral rights only; the claims lying outside the wilderness area convey both mineral and surface rights. The patented claims were legally surveyed in 1983, patented in 1989, and occupy an area of approximately 1,809 acres.

14

Revett Minerals Inc.
Notes to Consolidated Financial Statements
Three and six months ended June 30, 2013 and 2012
(expressed in thousands of United States dollars unless otherwise stated)
(unaudited)

Development activities at Rock Creek are conducted through RC Resources Inc., a wholly-owned Montana subsidiary of Revett Silver Company. RC Resources Inc. is also the record holder of the patented and unpatented mining claims comprising the project, as well as certain fee lands in the immediate area.

Our proposed development of Rock Creek will occur in several phases. The first phase is a two year evaluation program, estimated to cost between $25 million to $30 million, to define the economic and technical viability of the project. The evaluation program will include the development of an evaluation adit to collect additional technical information on the deposit, perform additional infill drilling to establish and confirm reserve and resource estimates, and conduct geotechnical design studies and bulk sampling of the mineralization for use in metallurgical testing. The evaluation program is subject to receipt of permits and approvals from the various federal and state agencies having jurisdiction over the project. The Company will also be required to satisfy grizzly bear mitigation and reclamation bonding requirements, design and construct a water treatment facility, and upgrade and improve the road leading to the proposed evaluation adit site.

The Rock Creek deposit is partially located on United States Forest Service (the “Forest Service”) land, within the Kootenai National Forest, and under the Cabinet Mountains Wilderness Area. Consequently, we must comply with a variety of federal and state laws and regulations in order to explore and develop it. In 2001, the Forest Service issued the Final Environmental Impact Statement (“Final EIS”) under theNational 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 the Rock Creek Project (the “Record of Decision”). The Record of Decision was based primarily on the findings in the Final EIS and a companion Biological Opinion issued by the U.S. Fish and Wildlife Service (“USFWS”) in 2003 pursuant to the requirements of theEndangered Species Act (“ESA”).

The Record of Decision was challenged by a number of national and regional conservation groups. In May 2010 both the Record of Decision and Final EIS were remanded back to the Forest Service by the federal district court for completion of a supplemental EIS to address specified NEPA deficiencies. All challenges to the Biological Opinion were dismissed by the federal district court, a decision that was subsequently upheld by the Ninth Circuit Court of Appeals in November 2011. The Company is currently working with the Forest Service to develop a Supplemental EIS to comply with the Federal District Court’s NEPA opinion in May 2010.

Although the Company believes that it will ultimately receive environmental and operating permits, it is possible that successful challenges could delay or prevent the Company from developing the Rock Creek project which could result in the write-down of the carrying value related to the Rock Creek property.

15

Revett Minerals Inc.
Notes to Consolidated Financial Statements
Three and six months ended June 30, 2013 and 2012
(expressed in thousands of United States dollars unless otherwise stated)
(unaudited)

c) Other Properties.

We also own two unpatented claim groups in nearby areas of Sanders County, the Vermillion River and the Sims Creek properties, which comprise approximately 1,660 acres and are located approximately 25 miles southeast of Rock Creek. Limited drilling was conducted by the previous owner of the Vermillion River claim group. The Sims group is untested. These claims are held by Revett Exploration, Inc., a wholly-owned Montana subsidiary of Revett Silver Company.

In addition, we currently own approximately 673 acres of fee land that will be used primarily for mitigation as the Rock Creek project is developed. This land and other current and future holdings that are not essential to our day-to-day mining operations are or will be held by Revett Holdings, Inc., a wholly-owned Montana subsidiary of Revett Silver Company. Certain of these lands may later be selected for management under the Revett Foundation according to a best-use philosophy.

10. Derivative instruments

Concentrate Sales Contracts

The Company enters into concentrate sales contracts with a 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.

Fixed Forward Contracts

At December 31, 2012, the Company had forward contracts to sell 0.7 million pounds of copper at an average price of $4.00 per pound which matured in February 2013. All contracts were with the Company’s customer and were designated as normal purchase and sale contracts. Accordingly, the effects of these contracts were accounted for in the period they were settled. There are no forward contracts outstanding at June 30, 2013.

Warrant Derivative Liabilities

Some of the Company’s 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 on the consolidated balance sheets and recognized at fair value. See discussion of the warrant derivative liabilities in note 7.

16

Revett Minerals Inc.
Notes to Consolidated Financial Statements
Three and six months ended June 30, 2013 and 2012
(expressed in thousands of United States dollars unless otherwise stated)
(unaudited)

The following summarizes classification of the fair value of the derivative instruments as of June 30, 2013 and December 31, 2012:

		June 30,		December
		2013		31, 2012
Concentrate settlement and other receivables	$	-	$	(628	)
Warrant derivative liabilities		-		(93	)

The following represent mark-to-market gains on derivative instruments during the six months June 30, 2013 and 2012:

		For the		For the
		three		three		For the six		For the six
		months		months		months		months
		ended		ended		ended		ended
		June 30,		June 30,		June 30,		June 30,
		2013		2012		2013		2012
Revenue	$	-	$	34	$	628	$	465
Gain on warrant derivatives		21		323		63		543

11. Fair Value of Financial Instruments

At June 30, 2013, the Company did not have any forward contracts to sell silver or copper.

The carrying values of cash and cash equivalents, accounts receivable, 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 are marked to market each month using quoted forward prices as at the last trading day of each month, and accordingly are recognized at fair value. The carrying values of capital lease 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).

17

Revett Minerals Inc.
Notes to Consolidated Financial Statements
Three and six months ended June 30, 2013 and 2012
(expressed in thousands of United States dollars unless otherwise stated)
(unaudited)

The following table sets forth the Company’s 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 at June 30, 2013
		Total			Level 1		Level 2			Level 3
Cash and cash equivalents	$	8,392		$	8,392	$	-		$	-
Short term investments		6,654			6,654		-			-
Available for sale securities		530			530		-			-
		Fair value at December 31, 2012
		Total			Level 1		Level 2			Level 3
Cash and cash equivalents	$	18,986		$	18,986	$	-		$	-
Short term investments		9,264			9,264		-			-
Available for sale securities		1,432			1,432		-			-
Concentrate receivable embedded derivative		(628	)		-		(628	)		-
Warrant derivatives liability		(93	)		-		(93	)		-

The Company’s cash and cash equivalent instruments are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices.

The Company’s short-term investments are available for liquidity needs and are classified as trading and recorded at market value. The short-term investments are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices.

The Company’s available for sale securities are valued using quoted market prices, and accordingly, are included in Level 1.

The Company’s concentrate receivable embedded derivative, 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.

The warrant derivative liability is valued using an option pricing model, which requires a variety of inputs. Such instruments are typically included in Level 2.

18

Revett Minerals Inc.
Notes to Consolidated Financial Statements
Three and six months ended June 30, 2013 and 2012
(expressed in thousands of United States dollars unless otherwise stated)
(unaudited)

12. Income Taxes

The following table summarizes the components of the Company’s income tax provision (benefit) for the three and six months ended June 30, 2013 and 2012:

		Three months			Three month			Six months			Six months
		ended			ended			ended			ended
		June 30, 2013			June 30, 2012			June 30, 2013			June 30, 2012
Federal:
Current	$	-		$	226		$	-		$	331
Deferred		(2,128	)		(214	)		(4,432	)		520
Total		(2,128	)		12			(4,432	)		851
State:
Current		-			-			-			-
Deferred		(249	)		(24	)		(518	)		61
Total	$	(2,377	)	$	(12	)	$	(4,950	)	$	912

The income tax expenses for the three and six months ended June 30, 2013 and 2012 varies from the statutory rate primarily because of depletion, change in valuation allowance for net deferred tax assets and the Company’s foreign operations. The Company has US net operating loss carryforward which expire at various dates between 2024 and 2029, Montana State net operating losses that expire at various dates between 2015 and 2016, and Canadian net operating losses expire a various dates between 2014 and 2031. At December 31, 2012 the Company has United States net operating loss carry forwards of approximately $18.0 million, Montana State net operating losses of approximately $10.0 million, and Canadian net operating losses of approximately $10.4 million.

19

Revett Minerals Inc.
Notes to Consolidated Financial Statements
Three and six months ended June 30, 2013 and 2012
(expressed in thousands of United States dollars unless otherwise stated)
(unaudited)

13. Earnings Per Common Share

The following table reconciles weighted average common shares used in the computations of basic and diluted earnings (loss) per share for the three and six months ended June 30, 2013, and 2012 (thousands, except per-share amounts).

		Three months			Three months			Six months			Six months
		ended June 30,			ended June 30,			ended June			ended June
		2013			2012			30, 2013			30, 2012
Numerator
Net income (loss)	$	(4,055	)	$	(2,227	)	$	(8,174	)	$	1,494
Gain on warrant derivative associated with dilutive warrants		-			-			-			(543	)
Net income (loss) for diluted earnings per share	$	(4,055	)	$	(2,227	)	$	(8,174	)	$	951
Denominator
Basic weighted average common shares		34,596,387			34,183,265			34,587,785			34,156,213
Dilutive stock options and warrants		-			-			-			1,174,806
Diluted weighted average common shares		34,596,387			34,183,265			34,587,785			35,331,019
Basic income (loss) per share	$	(0.12	)	$	(0.07	)	$	(0.24	)	$	0.04
Diluted income (loss) per share	$	(0.12	)	$	(0.07	)	$	(0.24	)	$	0.03

For the six month periods ended June 30, 2012, the gain on warrant derivative associated with dilutive warrants is an adjustment to net income for diluted earnings per share purposes because the gain would not have been recognized had the warrants been converted at the beginning of the period.

Options and warrants to purchase 4,470,938 shares of our common stock were excluded from the computation of diluted earnings per share for the three and six month periods ended June 30, 2013. The exercise price of these options and warrants exceeded the average price of our stock during the period and were anti-dilutive.

Options and warrants to purchase 3,850,438 and 2,076,000 shares of common stock were excluded from the computation of diluted earnings per share for the three and six month periods ended June 30, 2012, respectively. The exercise price of these options and warrants exceeded the average price of our stock during the period and were anti-dilutive.

20

Revett Minerals Inc.
Notes to Consolidated Financial Statements
Three and six months ended June 30, 2013 and 2012
(expressed in thousands of United States dollars unless otherwise stated)
(unaudited)

14. Comprehensive income

The components of other comprehensive income are as follows:

		Three			Three			Six			Six
		months			months			months			months
		ended			ended			ended			ended
		June			June			June			June
		30,			30,			30,			30,
		2013			2012			2013			2012
Unrealized loss on available for sale securities before tax	$	(442	)	$	(446	)	$	(550	)	$	(828	)
Deferred tax effect		156			156			194			290
Unrealized loss on available for sale securities, net of tax		(286	)		(290	)		(356	)		(538	)
Reclassification of loss on securities included in net income (loss)		1,114			90			1,376			90
Related deferred tax effect		(391	)		(30	)		(482	)		(30	)
	$	437		$	(230	)	$	538		$	(478	)

21

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations as at August 8, 2013

This Management’s Discussion and Analysis (“MD&A”) of the financial results of Revett Minerals Inc. (“Revett Minerals” or the “Company”) for the three and six month periods ended June 30, 2013 should be read in conjunction with the unaudited interim financial statements and notes for the three and six months ended June 30, 2013 which form part of this report. In addition, this MD&A and related financial statements should be read in conjunction with the 2012 audited consolidated financial statements, the related Management’s Discussion and Analysis, and the Form 10-K filed in Canada on SEDAR or on file in the United States with the Securities and Exchange Commission (“SEC”) or on EDGAR. These financial statements are expressed in United States dollars, unless otherwise stated, and they are prepared in accordance with United States generally accepted accounting principles (“GAAP”).

These unaudited interim consolidated financial statements have been prepared by management in accordance with generally accepted accounting principles used in the United States of America (U.S. GAAP) and are presented in U.S. dollars.

Some of the statements in this MD&A are forward looking statements that are subject to risk factors set out in the cautionary note contained in this MD&A.

Overview and Important Factors Influencing Results for the Six Months Ended June 30, 2013

As at August 8, 2013, the Company owns a 100% interest in Revett Silver Company (“Revett Silver”), which in turn owns 100% of Troy Mine Inc., RC Resources Inc., Revett Exploration Inc. and Revett Holdings Inc. (Both Revett Exploration Inc. and Revett Holdings Inc. were created in 2012.) Rock Creek is a development stage silver and copper property located in northwest Montana. Troy is an operating silver and copper mine also located in northwest Montana.

In mid-December 2012, the Company suspended underground mining and milling operations at Troy because of unstable and unsafe ground conditions in the mine. The Company has installed seismic monitoring devices (geophones) and is working with Mine Safety and Health Administration (“MSHA”) to inspect the mine and develop alternate travel and haulage routes that bypass the affected areas. Current underground operations include development activities which are designed to re-establish access to the recent producing areas of the ore body. The life-of-mine, based on reported reserves, is estimated to be 8 years. If our current efforts to re-establish access to our main mining areas is successful, the Company believes that it may be able to resume operations in the fourth quarter of 2013. However, if our current efforts are not successful in re-establishing access to the Lower Quartzite haulage route, the Company would have to undertake alternative development plans which may require capital of approximately $12 to $15 million, which is in excess of current working capital position.

Overall Performance

As at June 30, 2013 the Company has cash and short-term investments on hand of $15.0 million. Due to the suspension of mining operations during the first half of 2013 we were unable to generate production revenues, which resulted in a net loss. For the six month period ended June 30, 2013, the Company reported a net loss after taxes of $8.2 million or $0.24 a share compared to net income after taxes of $1.5 million or $0.04 per share for the six months ended June 30, 2012.

22

Results of Operations for the Six Months Ended June 30, 2013 compared to the same period in 2012.

Operating Results:

The table below illustrates certain key operating statistics for Troy for the three months ended June 30, 2013, with a comparison to the same three month period in 2012.

	Three Months Ended June 30,	Three Months Ended June 30,
	2013	2012
Tons milled	-	317,487
Tons milled per day	-	3,567
Copper grade (%)	-	0.37
Silver grade (opt)	-	1.02
Copper recovery (%)	-	83.13
Silver recovery (%)	-	86.26
Copper produced (lbs)	-	1,936,207
Silver produced (ozs)	-	278,387

In mid-December 2012, we suspended underground mining operations at Troy because of unstable and unsafe ground conditions in the mine. We have since installed seismic monitoring devices (geophones) and are working with MSHA to inspect the mine and develop alternate travel and haulage routes that bypass the affected areas. Because of this, we did not mine or process any ore in the first half of 2013.

During the first half of 2013 the Troy Mine developed plans to access certain unaffected areas in the mine and have submitted these plans to MSHA for approval. These plans include new haulage access, dewatering, ventilation and placement of electrical utilities. In addition to underground activities, preventive maintenance and repairs of related mining and milling equipment has continued in preparation to resume operations. The current plan, if executed, is to resume mining activities in the fourth quarter of 2013.

Financial Results:

a)	Revenue:There was no invoicing for concentrate sales during the second quarter of 2013 due to the suspension of mining and milling activities described above. During the quarter ended June 30, 2012, the LME price of copper and silver averaged $3.57 per pound and $29.42 per ounce, respectively. Metal sales during the first quarter of 2012 were 1.8 million pounds of copper and 260,458 ounces of silver.
b)	Cost of Sales:The Troy Mine suspension related costs associated with the second quarter 2013 was $3.9 million, a decrease of 62% when compared to the second quarter of 2012. The 2013 spending reflects the efforts to design a plan to resume mining operations and the construction of an alternative adit to access the mine.
c)	Depreciation and depletion:For the second quarter of 2013, these non-cash charges are significantly lower than the second quarter of 2012. The majority of the plant and equipment at Troy is depreciated using the units-of-production method and the effect of the suspension of mining operations resulted in no depreciation expense for the Troy Mine.

23

d)	Exploration and development:This expense includes $0.02 million for exploration spending around the Troy Mine and $0.3 million spending for Rock Creek. The spending in 2013 is much lower than 2012 ($1.2 million) due to efforts to conserve cash during the second quarter of 2013.
e)	General and administration costs:The decrease in the corporate administration costs during the second quarter of 2013 is a result of efforts to conserve cash due to suspension of mining activities at the Troy Mine. Executive officer’s salary and Board of Director fees have been voluntarily reduced during the second quarter.
f)	Net loss:The net loss for the second quarter 2013 reflects the suspension of mining activities at the Troy Mine.

The table below illustrates certain key operating statistics for Troy for the six months ended June 30, 2013, with a comparison to the same six month period in 2012.

	Six Months Ended June 30,	Six Months Ended June 30,
	2013	2012
Tons milled	-	649,009
Tons milled per day	-	3,626
Copper grade (%)	-	0.38
Silver grade (opt)	-	1.07
Copper recovery (%)	-	84.4
Silver recovery (%)	-	86.76
Copper produced (lbs)	-	4,185,318
Silver produced (ozs)	-	602,762

Financial Results:

a)	Revenue:There was no invoicing for concentrate sales during the first half of 2013 due to the suspension of mining activities described above. During the quarter ended June 30, 2012, the LME price of copper and silver averaged $3.57 per pound and $29.42 per ounce, respectively. Metal sales during the first quarter of 2012 were 1.8 million pounds of copper and 260,458 ounces of silver.
b)	Cost of Sales:The Troy Mine suspension related costs associated with the first half 2013 was $8.3 million, a decrease of 62% when compared to the first half of 2012. The 2013 spending reflects the efforts to design a plan and construct an adit to resume mining operations while 2012 spending reflects regular mine operations.
c)	Depreciation and depletion:For the half of 2013, these non-cash charges are significantly lower than the first quarter of 2012. The majority of the plant and equipment at Troy is depreciated using the units-of-production method and the effect of the suspension of mining operations resulted in no depreciation expense for the Troy Mine.
d)	Exploration and development:This expense includes $0.07 million for exploration spending around the Troy Mine and $0.6 million spending for Rock Creek for the first half of 2013. The spending in 2013 is lower than 2012 ($1.4 million) due to a temporary decreased emphasis on exploration around the Troy Mine and the lower spending related to completing the Supplemental Environmental Impact Statement for Rock Creek.

24

e)	General and administration costs:The decrease in the corporate administration costs during the first half of 2013 is a result of efforts to conserve cash due to suspension of mining activities at the Troy Mine.
f)	Net loss:The net loss for the first quarter 2013 reflects the suspension of mining activities at the Troy Mine along with the non-cash write off of deferred loan fees ($0.6 million) and the write down of the available for sale securities ($1.0 million).

Summarized Financial Results by Quarter

	2011	2011	2012	2012	2012	2012	2013	2013
	3Q	4Q	1Q	2Q	3Q	4Q	1Q	2Q
Cu Production (million lbs)	3.3	2.4	2.2	1.9	2.4	1.0	-	-
Ag Production (000’s ozs)	403	300	292	278	348	161	-	-
Total Sales (millions)	$16.7	$21.9	$19.2	$13.5	$19.4	$7.2	$0.2	$0.0
Cash Flow from Operations before changes in working capital (1) (millions)	$8.3	$9.1	$7.5	$3.5	$7.5	$(0.2)	$(4.7)	$(3.9)
Net Income (loss) (millions)	$2.9	$5.6	$3.7	$(2.2)	$4.4	$(1.8)	($4.1)	($4.1)
EPS- Basic	$0.08	$0.17	$0.11	$(0.7)	$0.13	$(0.05)	$(0.12)	$(0.12)
EPS- Fully diluted	$0.07	$0.16	$0.10	$(0.7)	$0.12	$(0.05)	$(0.12)	$(0.12)
Cash and Cash Equivalents & Short term Investments (millions)	$19.9	$25.2	$28.7	$30.0	$32.6	$28.3	$21.0	$15.0
Total Assets ending (millions)	$96.7	$103.4	$109.9	$108.6	$115.6	$108.0	$100.2	$92.7
Total liabilities (millions)	$20.3	$21.1	$24.1	$22.4	$24.7	$19.2	$15.1	$11.1
Total Equity (millions)	$76.4	$82.3	$85.8	$86.2	$90.9	$88.8	$85.1	$81.7

(1) This is a non-GAAP measurement. These amounts reflect the net cash flow from the Troy Mine before capital spending, equipment payments and changes in working capital.

25

Mine Safety Disclosures

Our operations at the Troy Mine 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 the Mine Safety and Health Administration (“MSHA”).

During the three months ended June 30, 2013 MSHA issued one citation pursuant to Section 104 of FMSHA for violations of mandatory health or safety standards that could, in the agency’s opinion, significantly and substantially contribute to mine safety or health hazard. MSHA proposed penalties are not known for the violations.

There were no mining fatalities at the Troy Mine during the three months ended June 30, 2013, nor did MSHA issue written notice pursuant to Section 104(e) of FMSHA during the period alleging any pattern of violations of mandatory health or safety standards or the potential for such a pattern. MSHA did not deem the cited violations to be flagrant within the meaning of Section 110(b)(2) of FMSHA. There was no imminent danger orders were issued under Section 107(a) of FMSHA during the quarter.

We are a party to ten pending appeals before the Federal Mine Health Safety Review Commission challenging MSHA’s assessment of proposed penalties against us, seven actions are contests of proposed penalties and three are pre-penalty Notices of Contest. The following table sets forth relevant information concerning the statutory basis for these violations:

Mine Name Mine ID

Section 104 S&S Citations

Section 104(b) Orders

Section 104(d) Citations and Orders

Section 110(b)(2) Violations

Section 107(a) Orders

Total Dollar Value of MSHA Assessme nts Proposed

Total Number of Mining Related Fatalities

Received Notice of Pattern of Violation s Under Section 104(e)

Received Notice of Potential to Have Pattern Under Section 104(e)

Legal Actions Pending as of Last Day of the Period

Legal Actions Initiated During Period

Legal Actions Resolved During Period

Troy Mine, Inc. 24- 01467

1

0

0

0

0

$4001.0

0

No

No

10

3

1

Financing Activities

During the first six months of 2013, the Company did not enter into any new capital lease agreements. The table below represents our fixed, non-cancelable contractual obligations and commitments as of June 30, 2013:

				Current		1 to 3	3 to 5		5 years or
Contractual obligation		Total		portion		years	years		more
Capital lease obligations	$	1,782	$	953	$	829	-		-
Long term reclamation Costs		10,750		-		-	-		10,750
Total contractualobligations	$	12,532	$	953	$	829	-	$	10,750

26

Revett Silver has also entered into a number of operating leases relating to the production and transportation of the copper concentrate produced at Troy. All such leases expire in 2013 and many may be renewed annually. The obligations in 2013 under the terms of these leases are $0.4 million.

Liquidity and Capital Resources

The Company’s liquidity position is directly related to the level of concentrate production, cost of this production and the provisional and final prices received for the copper and silver in the concentrate that is sold. At June 30, 2013, working capital was $16.9 million, including cash and short-term investments of $15.0 million. At June 30, 2013, concentrate receivable and other receivables was $0.005 million compared to $0.4 million at December 31, 2012 and copper concentrate inventory was $0.8 million compared to $0.7 million at December 31, 2012.

Declines in copper and silver prices along with delays in recommencement of production may erode the Company’s cash and working capital position. The Company continues to have discussions with interested parties in possibly obtaining capital, however, no assurance can be given that these efforts will prove to be successful. Given current market conditions, the Company may experience difficulties in raising sufficient external financing to meet its obligations and provide access to Troy mine ore reserves. Because of the Company’s need to conserve cash, nearly all discretionary capital spending and exploration spending has been placed on hold.

Off Balance Sheet Arrangements

Royal Gold, Inc. holds a 3% gross smelter royalty on a defined area of production from Troy Mine and a 1% net smelter royalty on production from Rock Creek pursuant to the terms of an amended royalty agreement dated October 13, 2009.

Related Party Transactions

Trafigura AG is the sole purchaser of the silver and copper concentrate we produce at Troy. It is also the beneficial owner of more than five percent of our outstanding common shares, and is therefore a related party. During the three months ended June 30, 2013 and 2012, Trafigura AG paid us $0.0 million and $13.5 million for our concentrate, respectively. We believe the terms and conditions of these sales are neither more favorable nor less favorable to us than the terms and conditions we could have obtained from concentrate purchasers who are not also related parties.

Proposed Transactions

There were no proposed transactions during the first six months of 2012.

Principal Risks and Uncertainties

Revett Minerals is a speculative investment, for many reasons, and the following risk factors should be carefully considered in evaluating it. In addition, this report contains forward-looking statements that involve known and unknown risks and uncertainties. These forward-looking statements include statements of our plans, objectives, expectations and intentions. Actual results could differ from those discussed in the forward-looking statements as a result of certain factors, including those set forth below. You should carefully consider the risks and uncertainties described below and the other information in this report before investing.

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Operations at Troy are currently suspended. In mid-December 2012, we suspended underground mining operations at Troy because of unstable and unsafe ground conditions in the mine. We have installed seismic monitoring devices (geophones) and are working with MSHA to inspect the mine and develop alternate travel and haulage routes that bypass the affected areas. If our current efforts to re-establish access to our main mining areas are successful, the Company believes that it may be able to resume operations in the fourth quarter of 2013. If we are not able to resume operations, we will necessarily have to consider other alternatives. This could have a material and adverse effect on our business and financial condition.

Copper and silver prices fluctuate markedly. Our operations are significantly influenced by the price 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. Since 1990, world average copper prices have fluctuated from a low of $0.71 per pound in 2002 to a high of $4.00 per pound in 2011, and world average annual silver prices have fluctuated from a low of $3.95 per ounce in 1992 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 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 subsequent to the Forest Service’s initial issuance of a Record of Decision approving our plan of operation in 2003. 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 generally successfully addressed these challenges, we were directed by a Federal District Court in May 2010 to produce a Supplemental EIS to address NEPA procedural deficiencies 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 Supplemental EIS and Record of Decision may delay us from proceeding with our planned development at Rock Creek. If we are successful in completing the supplemental EIS 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 at Rock Creek.

Our reclamation liability at Troy Mine could be substantial. Our financial obligations with respect to the reclamation, restoration and closure of Troy are presently covered by a $12.9 million surety bond which includes $6.5 million in a restricted cash account. In late 2012, DEQ and the Forest Service issued a new EIS and Record of Decision pertaining to the Troy Mine reclamation.

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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 at Troy Mine 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 develop Rock Creek. We may not have sufficient cash to allow us 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. Since no ore has been produced from Rock Creek, these estimates are preliminary in nature. This report also includes information concerning mineral resources at Troy Mine. Although we believe these amounts are significant, it does not mean the mineral resource can be economically mined. A mineral resource is not equivalent to a commercially mineable ore body or “proven reserves” or “probable reserves” under standards promulgated by the U. S. Securities and Exchange Commission (“SEC”), principally because they are less certain and not necessarily amenable to economic development. 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. United States investors are cautioned that the terms “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources” are not recognized by the SEC. The estimation of mineral resources involves greater uncertainty as to their existence and economic feasibility than the estimation of proven and probable reserves. United States investors are cautioned not to assume that mineral resources will ever be converted into reserves.

Future accounting changes

There were no new pronouncements issued by the FASB that may materially impact the Company’s consolidated financial statements for future periods.

Financial Instruments, Hedging Activities and Other Instruments

The largest market risk the Company is exposed to is changes in the prices of copper and silver will have a significant effect on revenue, cash flow and the value of concentrate receivables or payables because a significant portion of the Company’s sales are subject to a future pricing mechanism and changes in metal prices will change both revenue and the value of concentrate receivables or payables. The Company does have a hedging policy which permits the Company to fix the sales price of copper and silver in concentrate to be produced in the future or for which concentrate has been sold and for which final settlement has not occurred.

For financial statement purposes, the Company records at fair value the amount of silver and copper in concentrate sold to its customer for which final prices have not yet been determined. At each month-end, the Company adjusts its revenue to account for expected future prices and the corresponding expected future revenue and cash flow. In order to do this, the Company must make estimates of the future prices expected to prevail when final settlement occurs. The Company uses published forward prices for the period of expected settlement to estimate these expected prices.

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As at June 30, 2013, the Company had no contracts outstanding to sell silver or copper.

Forward Looking Statements

Cautionary “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. With the exception of historical matters, the matters discussed in this report are forward- looking statements that involve risk and uncertainties that could cause actual results to differ materially from projections or estimates contained herein. The words “believe”, “estimate”, “anticipate’, “expect”, and “project” and similar expressions are included to identify forward-looking statements. Such forward looking-statements include statements regarding future production levels and operating costs at the Troy mine, future levels of capital expenditures at both Troy and Rock Creek, the reserve and resource estimates at both Troy and Rock Creek, the adequacy of the financial resources and funds to cover operating and exploration costs at Troy and the cost of exploration at Rock Creek, the timing of certain litigation activities which have delayed exploration activities at Rock Creek, the adequacy of third party financing to complete certain corporate development activities, and the expectation that the Troy mine will be able to generate positive cash flow in future periods. Factors that could cause actual results to differ materially from these forward looking statements include, among others:

• changes in copper and silver prices;
• the operating performance of the Troy mine;
• geological conditions at the Troy mine;
• the need for copper concentrate by copper smelters and the costs associated with selling such concentrate to the smelters;
• the ability of the Company to complete exploration activities at the Rock Creek project;
• activities of certain environmental groups opposed to the Company’s activities in the United States;
• changes in the planned Rock Creek project parameters;
• changes in estimates of the reserves and resources at all the properties owned or controlled by the Company;
• economic and market conditions;
• future financial needs and the Company’s ability to secure such financing under reasonable terms and conditions;
• changes in federal or state legislation and regulations governing our operations and projects;
• risks of future unknown lawsuits respecting future planned activities on our projects or past activities by the Company.

As well as other factors described elsewhere in our annual Form 10-K and the various regulatory filings with United States and Canadian and provincial regulatory bodies which are available in Canada at www.sedar.com or in the United States on EDGAR. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. Most of these factors are beyond our ability to predict or control. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward looking statements. We disclaim any obligation to update any forward-looking statement made here-in except as required by law. Readers are cautioned not to put undue reliance on forward looking statements.

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Item 3. 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. 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 $4.48 per pound. Average annual silver prices over this same period have ranged from a low of $3.95 per ounce to a high of $41.96. Should the price of copper or silver decline substantially, the value of Troy and Rock Creek could fall dramatically and the future operation of Troy and the future exploration and development at Rock Creek could both be at risk.

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. With the uncertainty in the financial markets the value of these fixed income securities could change. Approximately $2.5 million of our short term investments are in the form of certificates of deposit issued by a major Canadian chartered bank and are denominated in US dollars.

Item 4. Controls and Procedures

Management is responsible for adopting internal control that gives it and the board of directors reasonable assurance that the Company’s consolidated financial statements present fairly its financial position and results of operations. Management also is responsible for establishing and maintaining disclosure controls and procedures that provide assurance that material information concerning the Company, including its consolidated subsidiaries, is appropriately disclosed.

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 theSecurities Exchange Act of 1934 (the Exchange Act) is recorded, processed, summarized and reported within the time periods prescribed by the SEC’s rules. They include, without limitation, controls and procedures designed to ensure that such information is accumulated and promptly communicated to our management, including our chief executive officer and our chief financial officer and other principal accounting officers, so such persons can make timely decisions regarding disclosure.

We 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) under theExchange 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 June 30, 2013. Based upon this evaluation, our chief executive officer and chief financial officer concluded that the design and operation of the Company’s disclosure controls and procedures were effective as at June 30, 2013 to ensure that information required to be disclosed by us in reports that we file under theExchange Act, is gathered, reported, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and is accumulated and communicated to management, including the chief executive officer and the chief financial officer, to allow timely decisions regarding required disclosure as specified under U.S. and Canadian securities laws.

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Changes in Internal Control over Financial Reporting. There have been no changes in the Company’s 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.

PART II: Other Information

Legal proceedings

There has been no material changes with regards to Legal proceedings which are reported in the December 31, 2012 Form 10-K.

Item #2: Unregistered sales of equity securities and Use of proceeds

Not Applicable

Item #3: Defaults Upon Senior Securities

Not Applicable

Item #4: Mine Safety Disclosures

Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in the MD&A section of this quarterly report.

Item #5: Other Information

Not Applicable

Item #6: Exhibits

(a) Exhibits:

31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C., 1350 (Section 906 of the Sarbanes-Oxley Act
32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C., 1350 (Section 906 of the Sarbanes-Oxley Act

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SIGNATURES

Pursuant to the requirements 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: August 8, 2013	By:/s/John Shanahan
	John Shanahan
	President and Chief Executive Officer
Date: August 8, 2013	By:/s/ Ken Eickerman
	Ken Eickerman
	Chief Financial Officer

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