Gold And Silver Production At Greens Creek Continues To Exceed Expectations

COEUR D'ALENE, ID - Phillips S. Baker, Jr., Hecla’s President and CEO of Hecla Mining Company said, “Because of Greens Creek’s exceptional performance, Hecla’s first quarter was largely as expected, financially.” said Phillips S. Baker, Jr., Hecla’s President and CEO. “Greens Creek exceeded expectations for both gold and silver production due to higher grades and recoveries. Casa Berardi and our Nevada operations both produced less cash flow than expected.

Casa Berardi’s gold production was lower in part due to lower grades, which were expected, and also due to the lower mill throughput resulting from some temporary issues in the mill that have now been addressed, and we expect results to improve over the rest of the year. While Nevada operations had better development advance rates, the operating metrics including cost, grade and negative cash flow, were unacceptable. We are reviewing our Nevada operations to determine the best path forward and expect the results of this review in the second quarter. In the meantime, we are suspending our annual Nevada estimates for production and cost. We are maintaining our annual estimates for capital and exploration spending to maintain our liquidity and balance sheet.”

At the Greens Creek mine in Alaska, 2.2 million ounces of silver and 14,328 ounces of gold were produced, compared to 1.9 million ounces and 13,118 ounces, respectively, in the first quarter of 2018. The increase was the result of higher silver and gold grades and recoveries, partially offset by reduced ore throughput. The mill operated at an average of 2,298 tons per day (tpd) in the first quarter compared to 2,349 the first quarter of 2018.

In Quebec, the Casa Berardi mine produced 31,799 ounces of gold, including 6,535 ounces from the East Mine Crown Pillar (EMCP) pit, compared to 40,177 ounces in the first quarter of 2018. The decrease was expected due to lower grades and to lower mill throughput and recovery as a result of adjustments to mill components to accommodate a higher throughput and the requirement for a new carbon in leach (CIL) drivetrain, which is being installed in early May. The shortfall in production in the first quarter is expected to be made up over the remainder of the year. The mill operated at an average of 3,664 tpd in the first quarter, a decrease of 5% compared to the first quarter of 2018.

San Sebastian Mine in Mexico produced 441,079 ounces of silver and 3,530 ounces of gold in the first quarter, compared to 512,192 silver ounces and 4,513 gold ounces in the prior year period. The decreases were due to lower grades, as expected, upon transitioning to increased throughput coming from underground mine material, versus higher-grade open pit. The mill operated at an average of 494 tpd in the first quarter, a 29% increase over the first quarter of 2018. A review of the sulfide ore continues, including a bulk sample to test the capabilities of the third-party plant and the suitability of long-hole stoping for the ore body, with results expected by the fourth quarter of 2019.

Hecla’s Nevada operations produced 10,364 ounces of gold and 67,438 ounces of silver. Advance rate increased 27% from the fourth quarter of 2018 but milled tons declined 30%. Capital investment increased from the fourth quarter by $4 million to $21.8 million. Of that amount, $15.8 million was for development at Fire Creek and Hollister, including $4.2 million for the Hatter Graben decline.

The Company is demobilizing the mining contractor, mining some previously-developed remnant stopes at Midas and considering other alternatives to reduce the cash spend and improve the cash flow at the Nevada operations. Some of the possible alternatives include third party processing, reducing development, and changing grade control procedures. Pending the outcome of the review, the annual production and cost estimates for Nevada are being suspended.

Silver production of 173,627 ounces increased 74% over the prior year period at the Lucky Friday Mine in Idaho. This is mainly due to a shift in focus from development to production by the salaried staff. The higher level of production is helping to defray more costs associated with the strike at Lucky Friday than originally anticipated. The mine recently celebrated two years of operations without a Restricted Work Duty Injury (RWDI) or Lost Time Injury (LTI).

The company also reported that in Sweden, the construction of the Remote Vein Miner (RVM) continues, and delivery is expected in the first half of 2020.

The company’s address is 6500 North Mineral Drive, Suite 200, Coeur d’Alene, ID 83815-9408, (208) 769-4100, www.hecla-mining.com.