Largest Quarterly Exploration Program In Its History

COEUR D’ALENE, ID - Hecla Mining Company reported an update on its exploration programs during the third quarter. “With the addition of the Nevada assets, Hecla had the largest quarterly exploration program in its history,” said Phillips S. Baker, Jr., President and CEO. “While exploration expense will be less in the fourth quarter, it is not for lack of good results. All of Hecla’s programs this year had success that will justify follow-up in the future. But our focus in the fourth quarter will be at our Nevada operations and San Sebastian, Mexico as we work towards the sort of mine life that we have at Greens Creek, Alaska and Casa Berardi, Quebec.” The company had the largest quarterly exploration program in company history. There were up to 20 drills at 10 properties, 5 operating mines, all in North America.
There were two drill rigs operating underground at Fire Creek in the third quarter. The first drill rig has recently started to evaluate the upper portions of Spiral 3 along the Karen and Hui Wu structures where a number of very high-grade headings suggest the mineralization extends beyond the current resource. The second drill rig has completed four of seven holes designed to test the up-dip extent of Spiral 4 including the Joyce and 06 veins. Additional definition drilling in the Spiral 2 and Spiral 4 areas is expected to extend mine life by defining and upgrading new resources. Other high-grade mineralized areas occur between Haulage 3 and Spiral 2 and will be the focus of future drilling. Underground drift development is advancing Haulage 9 to provide an exploration drill platform by early next year. This platform will enable exploration drilling of the Spiral 9 veins with the goal of expanding them to the north and south.
Three surface exploration rigs operated at the Fire Creek Mine in the quarter with the goal of extending current high-grade, gold-bearing structures. The drills are focused on two targets including: 1) two drills at the Zeus target northwest of the mine and 2) one drill at the Far View target southeast of the mine. The first six surface holes drilled at the Zeus target have intersected a continuous structure with strong argillic alteration and mineralization typical of high-grade mineralization in this area. Recent results, including intersections of 1.67 oz/ton gold over 1.2 feet and 0.46 oz/ton gold over 12.0 feet at the margins of the basaltic dikes, confirm our positive opinion of this target. Drilling continues to extend the resource to the south and at depth. Drilling of the Guard Shack southeast of the mine encountered structures with strong argillic alteration typical of the gold-bearing structures in the area and suggests the mineralization carries further to the south. West of the Guard Shack target is a geophysical, resistivity-high target that is believed to be a linking structure between the Joyce and Titan zones and will be tested later this year.
An Induced Polarization (IP)/resistivity geophysical survey was completed to the south along the known structural corridor, in the South Notice area. The survey is designed to help refine targets scheduled to be drilled later in the year and next year. The survey identified a target which is interpreted to be either a silica cap or sinter which is often associated with gold mineralization. In addition, three north-south striking chargeability highs were identified in the South Notice target area. Anomalies like these could correspond to sulfide feeder structures where gold mineralization may be found.
Two rigs were active in the Central Hollister, East Clementine and Gwenivere areas during the third quarter. The Central Hollister programs targeted up-dip and lateral extensions of the 141, 151, and 213 veins from 5190 level and down-dip extension of the 182 vein from 5050 level. Drilling intersected wide zones of mineralized breccia and narrower, high-grade intersections included 1.0 oz/ton gold and 1.8 oz/ton silver over 5.1 feet (141 Vein) and 1.06 oz/ton gold and 8.09 oz/ton silver over 3 .9 feet (151 Vein), and this mineralization remains open up-dip. The drill program targeting the down-dip extension of the 182 Vein included intervals of 4.0 oz/ton gold and 12.1 oz/ton silver over 3.1 feet (including 7.9 oz/ton gold and 23.2 oz/ton silver over 0.9 feet). These drill intercepts strengthened the resource model in the area and confirm mineralization is open at depth.
The East Clementine program targeted the 234, 243 and 253 veins at higher elevations near the unconformity where high-grade concentrations of gold can occur. Multiple intervals of strongly oxidized breccias and veinlets were intercepted including 0.60 oz/ton gold and 0.10 oz/ton silver over 3.0 feet (243 Vein). Additional drillholes are in progress to offset a historical intercept of 1.78 oz/ton gold and 7.74 oz/ton silver over 1.6 feet (233 Vein). Assays received from the first up-dip hole of the three-hole drill program intersected 1.8 oz/ton gold and 7.5 oz/ton silver over 1.6 feet which is about 90 feet from current workings. Mineralization remains open along strike.
The Gwenivere program was designed to offset two historical surface reverse circulation (RC) intercepts including 1.3 oz/ton gold and 0.05 oz/ton silver over 10.0 feet and 1.2 oz/ton gold and 0.13 oz/ton silver over 5.0 feet. Partial assays from the first drillhole include 1.35 oz/ton gold and 0.29 oz/ton silver over 3.0 feet. This new zone of mineralization is approximately 1,500 feet from the portal and represents the discovery of a new vein that is open in all directions. Initial assays from recent underground drilling in the Gloria Vein, at the west end of the mine, returned narrow assays of over an ounce gold per ton including 1.10 oz/ton gold and 2.7 oz/ton silver over 0.5 feet. Underground drifting is being extended to the west to provide a drill platform for the western extension of this high-grade mineralization. Additional definition drilling in the Central Hollister, Gwenivere and West Gloria areas is being planned for the fourth quarter.
Surface drilling of the Rowena Vein, at the south part of the Hollister vein system, intersected strongly brecciated and oxidized veining grading 0.19 oz/ton gold over 25.0 feet including 0.30 oz/ton gold over 5.1 feet. This style of gold is more typical of the high-grade “blanket zone” which extends along the unconformity upward into the base of the volcanic rocks. Additional drilling could re-commence after all the assay results are received. The first surface holes are in progress at Hatter Graben with the intent to extend the current resource to the east and west. Drill holes at 300-foot intervals have intersected swarms with multiple veins and mineralized breccias at the anticipated distance. Assays are pending.
Surface and underground exploration drilling on the Trinity target, which is a small, high-grade deposit south of the Midas Mine, was completed in August. Intersections including 0.47 oz/ton gold and 0.60 oz/ton silver over 4.5 feet and 0.51 oz/ton gold and 26.4 oz/ton silver over 2.5 feet, are associated with silicification and banded quartz veins. This drilling suggests vein mineralization may be strongest along the edges of the Trinity Corridor and mafic dikes and appears to be open to both to the south and north. The third quarter drilling extended the strike and dip of several known high-grade ore shoots and filled in gaps of the drill spacing, which should provide the confidence necessary for an inferred resource category. The Trinity mineralization is being remodeled in the fourth quarter in advance of a new resource estimate by the end of the year
At Greens Creek, drilling in the third quarter and strong assay results from drilling in the previous quarter have upgraded and expanded the Deep 200 South, NWW, East Ore, Upper Plate and Southwest Bench zone resources. Exploration drilling focused on the Deep 200 South Zone, Gallagher Fault Block and Deep Southwest Zone.
Definition drilling of the Deep 200 South Zone confirmed three flat-lying, high-grade lenses that are folded to the west and has enabled portions of bench mineralization to be upgraded to an indicated resource category. Upper bench mineralization is observed farther west and at a lower elevation than previously modeled. Recent intersections include 41.3 oz/ton silver, 0.1 oz/ton gold, 3.2% zinc and 1.7% lead over 9.9 feet and 29.8 oz/ton silver, 0.04 oz/ton gold, 15.5% zinc and 8.1 lead over 21.9 feet. Definition drilling continued to target the southern portion of the zone, and results include 63.0 oz/ton silver, 0.02 oz/ton gold, 4.7% zinc and 2.5% lead over 33.3 feet at the upper bench and 74.1 oz/ton silver, 0.13 oz/ton gold, 4.4% zinc and 2.1% lead over 23.0 feet at the lower bench.
Near the mine portal elevation, drilling of the Upper Plate Zone suggests that there are two, flat-lying ore zones that are folded to the west. The upper band of mineralization is thicker than the resource model predicted, including 19.7 oz/ton silver, 0.04 oz/ton gold, 6.1% zinc and 3.4% lead over 7.6 feet and 13.5 oz/ton silver, 0.02 oz/ton gold, 7.8% zinc and 3.4% lead over 20.2 feet. The lower band of mineralization occurs beyond the current wireframe to the west and south and includes an intersection of 41.1 oz/ton silver, 0.05 oz/ton gold, 1.9% zinc and 1.0% lead over 3.5 feet.
The first surface drillholes southwest of the Upper Plate Zone resource are also defining two mineralized limbs of a fold that are present over 200 feet from the current resource and remain open to the south, north, and west. Much of the mineralization is proximal to the mine contact, but mineralized zones are also present within the argillites. The mineralized zones vary from 4 to 11 feet in thickness and transition from white carbonate ore to massive base metal ore and mineralized argillite. Assays for these intervals include 6.7 oz/ton silver, 0.1 oz/ton gold, 7.6% zinc and 1.8% lead over 9.9 feet and higher-grade intervals of 15.7 oz/ton silver, 0.2 oz/ton gold, 12.4% zinc and 3.9% lead over 7.6 feet and 8.4 oz/ton silver, 0.2 oz/ton gold, 13.4% zinc and 3.7% lead over 3.4 feet. The surface drill program is complete for the year as final assay results should be received in the next few weeks. Drilling from surface in the third quarter could expand this resource further to the west and north creating a substantial resource that may be in-fill drilled from underground and incorporated into future Life of Mines (LOMs).
In the East Ore Zone intersections from drilling at the north end, including 29.9 oz/ton silver, 0.28 oz/ton gold, 19.7% zinc and 10.3% lead over 3.5 feet and 39.7 oz/ton silver, 0.39 oz/ton gold, 7.2% zinc and 3.0% lead over 5.0 feet, confirm previously modeled resource estimates, and are particularly strong at lower and higher elevations. Drilling has also expanded this northern portion of the zone at depth by over 100 feet. Drilling of targeted gaps between modeled ore zones intersected mineralization that compares well in thickness and location to existing trends. Assay results of the Southwest Zone, including 29.1 oz/ton, 0.01 oz/ton gold, 9.0% zinc and 3.6% lead over 10.8 feet, confirmed and expanded the resource to the west and north. Definition drilling of the NWW and 9A zones upgraded the resource model and extended mineralization of the NWW further east to increase the resource. Exploration drilling targeting the Deep Southwest intersected mineralization 150 feet south of previous drill intercepts including 34.9 oz/ton, 0.1 oz/ton gold, 8.0% zinc and 3.7% lead over 13.9 feet. The focus of the fourth quarter underground drilling is on the Deep 200 South, East Ore and Upper Plate zones throughout 2018 with additional drilling targeting the Northwest West and 9A zones.
Surface drilling has identified the western extension of the 200 South Bench mineralization from 700 to 900 feet west of the current resource. Assays from the first five holes defined 3- to 10-foot intervals of semi-massive sulfide that grade up to 12% zinc and 3% lead with silver grades up to 1.5 ounces. This zone includes intersections of 0.2 oz/ton silver, 12.1% zinc and 0.5% lead over 3.2 feet and 0.4 oz/ton silver, 7.1% zinc and 1.0% lead over 13.1 feet. This may represent part of a bench syncline that is over 1,000 feet by 750 feet in area and could add considerably to future resources.
Higher up in these surface holes, mineralization was intersected at the mine contact and west of the Gallagher Fault. Drill intersections of this mineralization include 1.1 oz/ton silver, 17.2% zinc and 3.5% lead over 3.4 feet. This is the first-time mineralization has been intersected west of the Gallagher Fault this far north (1,800 feet north of the Gallagher Zone mineralization), potentially opening up a large area for prospective exploration.
At Casa Berardi during the third quarter, up to six underground drills were used to refine stope designs, expand reserves and resources in the 118, 121, 123, 124 and 125 zones, and confirm further potential at depth and to the east and west. Up to four drills on surface completed in-fill and exploration drilling at the West Mine Crown Pillar (WMCP), Principal, 134 and 160 zones to potentially expand the proposed Principal Pit, and provide the basis for an initial pit design of the WMCP. Resource modeling and pit optimization studies are completed and confirm the extension of the current East Mine Crown Pillar (EMCP) pit to the west. Deeper drilling has also identified high-grade zones that extend from the proposed 134, 160 and Principal pits into the underground.
At the Lower 118 Zone, drilling confirmed the continuity of multiple mineralized lenses to the west and at depth outside the current resource boundary. Recent intersections continue to expand this resource, including 0.24 oz/ton gold over 25.8 feet and 0.20 oz/ton gold over 25.3 feet. An additional drill is planned to move to the west end of the 990-drift to evaluate the down-plunge to the west of the 118 Zone. Drilling of the Lower 118 Zone, at the bottom of the mine, has confirmed continuity of resources and shown mineralization is open at depth.
Drilling of stacked, high-grade lenses of the 123 Zone is defining the connection of multiple mineralized lenses for over 1,900 feet of strike length and over 3,600 feet down-dip below the 1070 level. Near the top of the 123 Zone, step-out drilling to the east on the 430 level intersected 0.70 oz/ton gold over 15.3 feet and 0.50 oz/ton gold over 4.9 feet and has shown continuity with high-grade mineralization intersected with drilling from surface. Drilling from the 970 level confirmed multiple lenses that are expected to add to current mining reserves to the east. Recent drill results from this area include 0.37 oz/ton gold over 11.0 feet and 0.30 oz/ton gold over 8.2 feet. Drilling below the western extension of the current 123 Zone resource intersected in this area include 0.40 oz/ton gold over 63.7 feet and 0.25 oz/ton gold over 37.3 feet, and suggest these mineralized lenses plunge west at depth and remain open for exploration.
High in the mine, drilling has targeted the east extension of the 124 Zone that is down-plunge of the Principal pit mineralization. Recent intersections just north of the Casa Berardi Fault include 0.16 oz/ton gold over 41.6 feet and 0.22 oz/ton gold over 9.2 feet. Future drilling below the 290 level should define this trend further to depth. The exploration of the 125 Zone from the 810 level focus drilling towards the north and targeting splays of the Casa Berardi Fault to extend the 118 Zone to the east. Initial results are favorable, and recent intersections include 0.34 oz/ton gold over 6.2 feet and 0.10 oz/ton gold over 10.5 feet, which confirm the model of multi-stacked lenses along the Casa strike and open the exploration east of the Principal Mine. Definition drilling has commenced at the 300 level of the East Mine to refine the depth extensions from surface of the 160 Zone. In the last quarter, a second drill is planned for the 485 level to define the high-grade plunge of the 148 Zone of the East Mine.
During the third quarter exploration drilling on surface targeted the west extension of the East Mine to investigate the underground potential of the 146 and 148 lenses and East Mine Crown Pillar (EMCP) open pit. Drills intersections in this area including 0.16 oz/ton over 14.4 feet suggest that the 146 to 160 zone area is open over 1,600 feet west and 900 feet down dip of the known resources. Drilling of the West Mine Crown Pillar (WMCP) to evaluate open pit potential west of the West Shaft continues to intercept strong mineralized structures near surface. A recent intersection of 0.10 oz/ton gold over 90.0 feet includes an interval of 0.13 oz/ton gold over 34.4 feet. The WMCP resource modeling is in progress and drilling results should be included in the end of year 2018 reserves.
For the remainder of 2018, underground drilling is expected to expand and refine the 118 and 123 zones lower in the mine and the 124-128 zones closer to surface. Drilling of the 160 Zone from underground has begun with the goal of refining and expanding a series of broad, high-grade veins in the newly-accessible East Mine. Surface drilling programs are planned at the 128-129 zones (Principal area), to define and expand underground mining potential east of the Principal area along the Casa Berardi Fault.
During the quarter, three core drill rigs and one reverse circulation (RC) drill operated at San Sebastian. Two drills completed in-fill drilling in the central portion of the polymetallic zone along the Francine Vein. Exploration core drilling was directed toward shallower oxide mineralization along the West and East Francine vein areas, the recently discovered South Vein, and drilling re-started at the Esperanza Vein target area.
At the Francine Vein, in-fill drilling within the polymetallic zone intercepted intervals of semi-massive sulfide with similar grade and width to the previous exploration drilling results in this area. Strong drill results include 19.0 oz/ton silver, 4.8% copper, 16.0% lead, and 13.5% zinc over 4.5 feet and 7.3 oz/ton silver, 1.8% copper, 3.5% lead, and 5.7% zinc over 7.4 feet. An updated Mineral Resource model has been completed for the polymetallic zone of the Francine Vein and the in-fill drilling program significantly increased the quantity of indicated resource material. The model will be used to determine reserves, mine design and scheduling. A ramp is now being driven toward this area and a bulk sample is scheduled to be taken beginning in the fourth quarter of 2018. The material from the bulk sample will be used for metallurgical studies and a viability test of the nearby Excellon Mill, where the processing of sulfide ores from San Sebastian is planned.
Further to the east beyond the San Ricardo Fault, new zones of vein-hosted, oxide mineralization have been defined by drilling along the East Francine Vein (EFV). Drilling continues to intersect narrow, but high-grade mineralization including intersections of 15.6 oz/ton silver and 0.01 oz/ton gold over 4.8 feet and 9.6 oz/ton silver and 0.07 oz/ton gold over 9.3 feet. Mineralization in this area is defined over 1,200 feet along strike and 800 feet down-dip and this new zone could represent an important new source of oxide mineralization. When incorporating the newly-defined mineralization in East Francine, the total strike length of continuous mineralization along the Francine Vein exceeds 8,000 feet and can be traced to a depth of over 2,000 feet.
At the West Francine Vein, in an area located about 1,000 feet west of any past drilling on the Francine Vein, core drilling followed up on a high-grade Reverse Circulation (RC) intersection of 23.7 oz/ton silver and 0.02 oz/ton gold over 6.6 feet. The first few drill core intercepts at the West Francine are narrow, but high-grade including 57.6 oz/ton silver and 0.02 oz/ton gold over 2.1 feet. Mineralization in this area is open laterally and at depth. Follow-up, offset drilling is in progress.
Exploration drilling began at the Esperanza Vein area, located approximately one and a half miles west of the mine area, that is highly prospective but has not been core drilled since 2003. The Esperanza Vein was cut two times in the third quarter and both intercepts are wide (10.0 to 15.0 feet), contain strong oxide material and appear to be moderately mineralized and gold-dominant. Assays are pending for these intercepts and additional drilling is currently in progress in this area.
Reconnaissance RC drilling recently discovered a new blind vein under soil cover in the Saladillo Valley. This structure, referred to as the South Vein is located approximately 1.2 miles southwest of the San Sebastian mine area. The first three RC intercepts from this vein returned 12.6 oz/ton silver and 0.08 oz/ton gold over 9.3 feet, 6.0 oz/ton silver and 0.03 oz/ton gold over 9.4 feet, and 5.6 oz/ton silver, 0.04 oz/ton gold over 9.4 feet. This vein is located directly below a geochemical anomaly defined by Rotary Air Blast (“RAB”) drilling. Other similar untested RAB anomalies occur in the area.
The South Vein is located approximately halfway between the Andrea Vein resource area to the southeast and the Esperanza Vein to the northwest. Based on its location and orientation, this vein may represent the link between these two known veins with a prospective strike length of over four miles. Mineralization in this area is open laterally and follow-up core drilling program in this area is programmed for the fourth quarter. Drilling for the remainder of the year will continue to focus on expanding resources and evaluate near-surface oxide mineralization at the West Francine Vein, South Vein, and Esperanza Vein areas.
Also, drilling at Little Baldy in northern Idaho was completed in August. The holes intersected narrow 0.5 to 3.0 feet wide, but strongly mineralized veins with sulfides and trace visible gold. Significant drill assays include 0.39 oz/ton gold over 0.8 feet, 0.21 oz/ton gold over 1.2 feet and 0.30 oz/ton gold over 1.1 feet. At Republic, Washington the 4-hole Lone Pine/Blacktail drilling program was completed and significant thicknesses of low-grade, bulk-tonnage gold mineralization with several high-grade intersections include 0.57 oz/ton gold over 6.1 feet, 0.21 oz/ton gold over 4.2 feet, and 2.1 oz/ton gold over 0.7 feet. Modeling is underway to assess whether the high-grade intervals are extensions of veins mined historically or whether they represent previously unidentified veins. At the Kinskuch project in northern B.C. the drilling program has just completed and defined silver-enriched, base metal mineralization in the Illiance Valley for over a strike-length of 3.0 miles. High-grade zones appear to have continuity and may represent two parallel mineralized structures or two limbs of a folded body. The last of the assays are coming in and geologic modeling in the Leapfrog program will feed into a preliminary resource model.
Hecla Mining Company is a leading low-cost U.S. silver producer with operating mines in Alaska, Idaho and Mexico, and is a growing gold producer with operating mines in Quebec, Canada and Nevada. The Company also has exploration and pre-development properties in eight world-class silver and gold mining districts in the U.S., Canada, and Mexico.
The company’s address is 6500 North Mineral Drive, Suite 200, Coeur d’Alene, ID 83815, 208.769.4100, fax: 208.769.7612, email: [email protected].