Hecla Mining Has Highest Levels Of Reserves In Its 127 Year History
COEUR D'ALENE, ID - Hecla Mining Company reported the highest levels of silver, gold and lead reserves in its 127-year history, as well as the highest zinc reserve in the last five years.Greens Creek increased gold reserves 8% and zinc 7% with silver and lead slightly up. Casa Berardi surface drilling increased reserves almost 250,000 ounces from two new proposed pits, part of a 14% increase in reserves. San Sebastian’s gold reserves increased 17% while maintaining silver reserves of more than 5 million ounces. Exploration in 2018 is projected to be between $30 and $37 million, up from $23.5 million in 2017, reflecting the continued growth in targets at Hecla’s properties.
“It is a remarkable achievement for a 127-year-old company to have record reserves for three of the four metals it produces, particularly using price assumptions significantly below spot and among the lowest in the industry. It speaks to the quality of our properties and the expertise of our people. We believe that our investment in exploration is a key step towards generating real value for shareholders. As we grow our reserves and increase our already long mine lives, we can improve productivity by increasing throughput or lowering costs so the mines can generate returns regardless of the metals price,” said Phillips S. Baker, Jr., President and CEO. “In addition to reserve growth, we are increasing the San Sebastian polymetallic resource which is quickly becoming an important part of the future of this mine. Our exploration budget is increasing again this year, because we have more exploration opportunities at our operating properties and beyond than any time in my tenure at Hecla.”
Hecla replaced all silver mine production in 2017 (15.2 million silver ounces contained) and increased reserves by 3%. Gold production was also replaced (282,414 gold ounces contained) as reserves increased by 13%. Both zinc and lead production were replaced and reserves increased by 15% and 8%, respectively.
In Alaska at Greens Creek Mine, the 839,589 tons processed at the mill contained 10.8 million ounces of silver, 78,245 ounces of gold, 60,858 tons of zinc and 22,870 tons of lead. Silver, gold and base metal production was replaced and silver, gold, zinc, and lead reserves increased by 2%, 8%, 7% and 4%, respectively. Increases in silver and gold reserves at the East, West, Southwest and NWW zones were partially offset by reductions of silver and gold reserves in the 5250, 200 South and 9A zones caused by production. Measured and indicated resources increased by 11,976,100 silver ounces (62%) and 104,500 gold ounces (68%) over 2016 with additions in the East, 200 South, NWW and Upper Plate zones and minor losses at the Southwest and Gallagher zones. Inferred resources decreased by 7,542,200 silver ounces (-19%) and 63,200 gold ounces (-22%) due to large conversions to indicated resources or reserves in the 200 South and East zones.
The Lucky Friday Mine in Idaho, the 70,718 tons processed at the mill contained 875,488 ounces of silver. Silver, zinc and lead production was replaced and reserves increased by 4%, 47% and 10%, respectively. Lucky Friday consists of the main 30 Vein and a series of intermediate veins. Several costs, such as the former silver and hourly bonus and new base wages, which were previously accounted for in “other costs,” are now being included in the production costs per ton when determining the cutoff grade for reserves and resources. The 30 Vein represents 75% of the silver, 76% of the lead and 66% of the zinc of the total reserve. The 30 Vein reserve was extended to depth where a portion of the resource was drilled to indicated category, and reserves were increased in the area where the 30 and 40 veins merge to create a wide, high-grade zone that has higher zinc content. Due to the increased production costs, the cutoff grade increased significantly causing measured and indicated resources of silver, lead and zinc to decrease by 44%, 46% and 47%, respectively, as large segments of the intermediate veins are no longer above cutoff. There was also a decline in inferred resources as silver, lead and zinc decreased by 28%, 28% and 14%, respectively.
At the Casa Berardi Mine in Canada, the 1,296,228 tons processed at the mill contained 180,373 ounces of gold, with 805,062 tons (62%) of the milled tonnage coming from underground and 491,166 tons (38%) of the milled tonnage coming from the EMCP open pit. Reserve tonnage at Casa Berardi increased 34% and contained gold increased approximately 14% to 1.49 million ounces. Underground production from the 118, 123 and 124 (Principal) zones was offset by reserve additions in those zones and new reserves defined in the East Mine underground. There was an overall reduction in underground reserves of 21,600 gold ounces. Open pit production from the EMCP was more than offset by reserve gains at the 134 and 160 zone open pits for a gain of 205,700 gold ounces. Measured and indicated gold resources decreased 6% with increases at the 124 (Principal underground), 134 (Out of pit), SW (107), 118, and 123 zones that were countered by losses at the East Mine underground and in the 160 and 134 zones as this material was converted into reserves. Inferred resources were added at Casa Berardi with a 14% increase in contained gold ounces due to increases at the 160 (underground), SW (107), 134 (Out of Pit), and 119 zones. There were losses to inferred resources as resources were upgraded to indicated category in the 134 Pit, Principal underground and 118 zones.
The San Sebastian Mine in Mexico, the 144,197 tons processed at the mill contained 3.45 million ounces of silver and 26,676 ounces of gold. Gold and silver production was replaced and gold reserves increased by 6,100 ounces (17%) and silver decreased by 80,000 ounces (1%). Open pit mining ceased by the end of the year and production has shifted to underground mining along the Middle Vein. At the end of the year there was an ore stockpile containing 711,700 silver ounces and 5,800 ounces of gold. Indicated mineral resources include 8,795,900 silver ounces and 103,000 gold ounces which are an increase of 6% for silver and a decrease of 10% for gold as there was a conversion to underground mineral reserves at the Middle Vein. Inferred resources increased 4% for silver and 7% for gold but a substantial portion of the Hugh Zone that was recently drilled was not included in the inferred resource but is expected this year.
An important development at San Sebastian is the identification and expansion of polymetallic mineralization in both the Francine Vein (Hugh Zone) and the West Middle Vein. The current “polymetallic” or “sulfide” indicated resource is 531,900 tons containing 3.7 million silver ounces, 15,800 ounces of gold, 15,520 tons of lead, 20,350 tons of zinc and 9,020 tons of copper. In addition, there is an inferred resource of 1.3 million tons containing 6.7 million ounces of silver, 7,800 ounces of gold, 23,660 tons of lead, 33,770 tons of zinc and 19,520 tons of copper. In the last half of 2017, drilling defined significant east and west extensions of the Hugh Zone resource and a new discovery of polymetallic mineralization at the west end of the Middle Vein. Current resources include some of the polymetallic mineralization drilled in the Middle Vein but does not yet include the 300-foot east and west extensions of strong mineralization beyond the current Hugh Zone resource boundaries.
Established in 1891, Hecla is headquartered in Coeur d’Alene, Idaho, and has a sister office in Vancouver, BC. Heck’s philosophy is to operate mines safely by promoting a deeply-rooted value-based culture, leveraging mining skills developed over the company’s long history, and by innovating new practices.
The company’s address is 6500 North Mineral Drive, Suite 200, Coeur d’Alene, ID 83815, 208.769.4100, fax: 208.769.7612.