Hecla Completes Acquisition Of Greens Creek

COEUR D'ALENE, ID - Hecla Mining Company reported that it has completed the transaction to acquire the Rio Tinto subsidiaries that held a 70.27% interest in the Greens Creek silver mine and joint venture located near Juneau, Alaska. As a result of the transaction, Hecla subsidiaries now hold 100% of the Greens Creek joint venture, which is believed to be the fifth largest silver mine in the world in terms of annual production. Hecla has held a 29.73% interest in Greens Creek for the past two decades. On an annualized basis, by 2009 the integration of the rest of the Greens Creek mine into Hecla is expected to:¥ nearly double Hecla's silver production to about 11 million ounces annually; ¥ increase silver reserves by more than 150%; ¥ increase gold reserves by 140%; ¥ significantly increase Hecla's cash flow from operations; ¥ decrease Hecla's already-low average cash costs per ounce of silver.
Hecla's President and Chief Executive Officer Phillips S. Baker, Jr., said, "We think the Greens Creek mine and its 12-square-mile land package is an exceptional asset, with great low-cost, long-lived production, as well as tremendous upside exploration potential. This asset transforms our company and provides us a solid base for additional growth well into the future." The acquisition is accretive to Hecla on important major operating and financial metrics, including production, cash costs per ounce, cash flow and silver, gold, zinc and lead reserves. As a result, Hecla has increased its production guidance for 2008 to approximately 9 million ounces of silver. Hecla's cash costs remain among the lowest of the North American primary silver producing companies, and in 2007 the average total cash cost was negative $2.81 per ounce of silver.
Baker concluded, "As a participant in the Greens Creek joint venture for 20 years, Hecla has first-hand knowledge of its great value. Frankly, we have been trying to acquire Rio Tinto's interest for many years. I could not be more pleased with this transaction and am excited about what it means for our shareholders and for our company's future."
The company's address is 6500 N. Mineral Drive, Suite 200, Coeur d'Alene, Idaho 83815, 208.769.4100, fax: 208.769.7612, email: [email protected].