Hecla Reports Increase In Silver And Gold Production

COEUR D'ALENE, ID - Hecla Mining Company reported a 12% increase in second quarter silver production to 2.5 million ounces compared to a year ago due to the fully operational Lucky Friday silver mine. In addition, gold production increased 96% to 43,554 ounces as a result of the Casa Berardi gold mine in Quebec, which was acquired on June 1, 2013.

"In the second quarter our stronger revenue and cash flow from operations were driven by production growth, particularly gold, and higher realized metal prices, especially zinc," said Phillips S. Baker Jr., Hecla's President and CEO. "Lucky Friday continues to perform, delivering its highest silver production in 10 quarters. At Greens Creek, the consistent production profile and very low cash cost, after by-product credits, is the cornerstone for our cash generation. Casa Berardi operations are becoming more consistent, and we have begun implementing improvements which are expected to improve the mine's economics by $140 million over its life. The strong performance of our three mines, in an environment of rising metals prices, has enabled us to end the quarter with $222 million of cash. With the stronger zinc and lead prices, we now expect annual silver cash cost, after by-product credits to be about $5 per ounce, among the lowest in the industry."

Silver production at Greens Creek in Alaska was 1.7 million ounces in the second quarter 2014 at a cash cost, after by-product credits, per silver ounce of $3.52? compared to 2.0 million ounces at $2.71 in the second quarter 2013. The mill operated at an average of 2,210 tons per day (tpd) during the second quarter 2014.

The per ounce cost was beneficially impacted by lower energy costs and negatively impacted by lower silver production levels. Power costs were lower due to the availability of hydroelectric power, which is expected to continue through the third quarter. Mining costs per ton increased by 12% due to lower production and higher labor costs and milling costs per ton decreased 6% due to lower energy costs in the second quarter compared to the same period in 2013. Although silver production was lower, it was within the expected range.

In the second quarter, Lucky Friday in Idaho produced 820,786 ounces of silver at a cash cost, after by-product credits, per silver ounce of $9.10,compared to 217,096 ounces at $32.19 per ounce in the second quarter of 2013. The reduction in cash cost, after by-product credits, per silver ounce was principally due to higher production and higher base metals prices. The mill operated at an average of 883 tpd for the quarter.

#4 Shaft, a key growth project, has been excavated approximately 2,500 feet to below the 7300 level. The project is more than 68% complete and is expected to be finished in the third quarter of 2016. The total estimated completion cost of #4 Shaft is expected to be approximately $215 million, with $148 million having been spent through the second quarter of 2014. As of June 30, 2014, the #4 Shaft team has worked 956 days without a lost-time accident.

The Casa Berardi mine in Quebec, acquired on June 1, 2013, produced 28,623 ounces of gold in the second quarter at a cash cost, after by-product credits, per gold ounce of $952.? For the 13-month period ending June 30, 2014 under Hecla ownership, the mine produced 122,414 ounces of gold at a cash cost, after by-product credits, per gold ounce of 934.Mill throughput averaged 2,335 tpd during the second quarter of 2014.

Advanced engineering work is underway in an effort to increase metallurgical recoveries, better control dilution, and reduce the development necessary to maintain production. Beginning in 2015, these initiatives should positively affect mine economics by approximately $140 million over the life of mine.

The excavation portion of the West Mine Shaft deepening is now complete. Significant progress was also made during the quarter on construction of the shaft station, loading pocket and transfer raises. The enhanced shaft is expected to lower operating costs in future years as the mining horizon deepens and to provide a platform for deeper exploration.