Gold Production Increases At Nevada Operations; Exploration Drilling Continuing

COEUR D'ALENE, ID - Hecla Mining Company reports that the Nevada Operations 22,381 ounces of gold and 43,377 ounces of silver were produced. The Fire Creek mine is located primarily in Lander County, Nevada, approximately 63 miles west of Elko, Nevada, overlooking Crescent Valley. The Project comprises private fee lands (both leased and owned) and unpatented lode mining claims. The land position includes approximately 15,420 acres of unpatented federal lode mining claims, 1,110 acres of private fee land and 230 acres of mineral leases. Overall, the Fire Creek land package is approximately 17,000 acres. The Hollister Mine (Ivanhoe Mining District) is located in Elko County, approximately 130 km (~80 mi.) northeast of the town of Winnemucca, Nevada and 29 km (~18 mi.) southeast of the Midas Mine. The Midas Property is located approximately 58 miles northeast of Winnemucca, Nevada, in Elko County and covers approximately 30,000 acres and includes owned fee lands and unpatented mining claims in addition to seven lease agreements. The Midas Property includes the underground mine, the 1,200 tons per day Merrill Crowe processing facility, related support infrastructure, and mining and milling equipment. Hecla has an approved plan of operations with the BLM for exploration activities on the property and a second plan of operations associated with the construction of five vent raises which were designed for ventilation to remote areas of the proposed expanded underground. The mill and most of the Midas infrastructure are located on private lands. Up to two drill rigs were used at Fire Creek to further evaluate the potential of areas of Spiral 2, Spiral 3 and Spiral 9 for near-term production and one surface drill rig was used to complete two exploration drill holes in the Hatter Graben at Hollister.
At Fire Creek, drilling focused on: 1) the lower extension of Spiral 2 mineralization, 2) expanding Spiral 2 resources up-dip in the Karen and Joyce zones, 3) testing the southern portion of Spiral 9 mineralization, and 4) extensions of Vein 20 in Spiral 2. High-grade intersections in the Spiral 2 area include 4.65 oz/ton gold over 2.8 feet in the Joyce Splay, 1.06 oz/ton gold over 11.8 feet on the Vonnie vein, and 2.87 oz/ton gold over 1.2 feet on the Vonnie vein. Drilling in the upper part of Spiral 2 focused on expanding the resources up-dip in the Karen and Joyce zones. Assay results include 0.57 oz/ton gold over 6.3 feet and 0.43 oz/ton gold over 7.5 feet on Vein 31 and 1.07 oz/ton gold over 1.5 feet on Vein 20. Assay results from Spiral 4 drilling targeting mineralization down-dip of the northern part of Spiral 4 encountered the best results to date in that area with 2.37 oz/ton gold over 5.4 feet.
Two surface exploration drill holes were completed at the Hatter Graben to test the eastern strike potential of the veins, where they might have been offset to the north and along strike of an historic vein intersected in drill hole H7-246 grading 1.13 oz/ton gold and 0.42 oz/ton silver over 3.4 feet. Geology of these two drill holes show that the vein intersected in historic drill hole H7-246 is not the offset extension of the Hatter Graben vein system but rather a new and possibly parallel vein system within the footwall of the Northern Boundary Fault.
At the Lucky Friday Mine 115,682 ounces of silver were produced compared to 31,639 ounces in the third quarter of 2018. The higher level of production helps defray costs associated with the strike at Lucky Friday. Lucky Friday is a deep underground silver, lead, and zinc mine located in the Coeur d’Alene Mining District in northern Idaho. The mine began operating in 1942. Thanks to the #4 Shaft project which is now complete and operational, the mine is expected to have another 20-30 years of mine life. Lucky Friday is located one mile east of Mullan, Idaho, and is adjacent to U.S. Interstate 90.
2.5 million ounces of silver and 13,684 ounces of gold were produced at the Greens Creek in Alaska, compared to 1.9 million ounces and 11,559 ounces, respectively, in the third quarter of 2018. Higher silver production was a result of higher grades due to mine sequencing. The mill operated at an average of 2,321 tons per day (tpd) in the third quarter, a similar throughput as the third quarter of 2018.
current deferred revenue liability of $20.1 million in proceeds was recognized. Drilling continues to upgrade the East, NWW, and 9A Ore zones resources. In the East Ore Zone, drill intersections targeted the central portion of the resource and confirmed mineralization. Strong assay results included 31.7 oz/ton silver, 0.35 oz/ton gold, 9.9% zinc and 4.0% lead over 10.6 feet and 114.4 oz/ton silver, 0.23 oz/ton gold, 4.9% zinc and 1.7% lead over 2.4 feet.
In Quebec, the Casa Berardi mine produced 36,547 ounces of gold, including 6,080 ounces from the East Mine Crown Pillar (EMCP) pit; compared to 43,981 ounces in the third quarter of 2018. The decrease is primarily due to lower ore grades and mill recovery. Gold production increased compared to the first two quarters of the year with a pre-crush system being used to process the stockpile left over from the lower throughput in the first half. Higher grades and a further increase in production are projected in the fourth quarter. The mill operated at an average of 3,667 tpd in the third quarter, a decrease of 5% over the third quarter of 2018. Up to nine drills (7 underground and 2 surface) operated in the East and West Mine areas with the goal of upgrading and expanding resources in several promising areas and potentially extending the underground mine production. The East Mine has a history of high-grade mine production and given that access has been re-established in the area, underground drilling confirmed and expanded a series of high-grade lenses from the 148 to 160 zones. Definition and exploration drilling results from the East Mine were previously reported in the press release "Hecla Expands High-Grade at Casa Berardi's East Mine" dated November 5, 2019. Results from this drilling continue to show high grades over substantial widths. The most successful drilling included 0.45 oz/ton gold over 16.1 feet, 0.65 oz/ton gold over 22.3 feet including 1.05 oz/ton gold over 12.8 feet, 0.63 oz/ton gold over 26.6 feet including 1.12 oz/ton gold over 13.4 feet, 0.78 oz/ton gold over 15.2 feet and 1.03 oz/ton gold over 14.7 feet. Drilling also shows that the high-grade mineralization on the 148-08 lens extends both to the surface and west of the known EMCP pit lenses and includes intersections of 0.03 oz/ton gold over 64 feet and 0.06 oz/ton gold over 48.5 feet. Drilling continues at the East Mine and results show high-grades and the presence of visible gold in many of the drill holes with pending assays, and these high-grade lenses are open at depth down-plunge. Results received to date could have a significant positive impact on 2020 as we work to accelerate the modeling and mine planning of these high-grade zones. West Mine definition drilling occurred in the 119, 123, 124 zones, and the West Mine Crown Pillar (WMCP) pit. In the lower part of the 123 Zone, in-fill and step-out drilling from the 1010 and 1030-levels to the west shows the continuity of high-grade mineralization down-plunge for over 400 feet and indicates the mineralization remains open to the west and to depth. Recent intersections include 0.33 oz/ton gold over 11.9 feet and 0.35 oz/ton gold over 32.0 feet. Higher in the mine, drilling of the 119 Zone from the 550-Level continues to define the eastern extension of the 119-01 lens south the Casa Berardi Fault. Recent assays include 0.14 oz/ton gold over 13.8 feet which extends the 119-01 lens over 160 feet to the east. Drilling in the 124 Zone shows the upward continuity of the 124-22 lens within the Principal Mine, with recent results including 0.37 oz/ton gold over 11.5 feet. Drilling results in the WMCP pit show that the high-grade mineralization extends to the surface and include intersections of 0.04 oz/ton gold over 42.6 feet and 0.03 oz/ton gold over 25.9 feet.
The San Sebastian Mine in Mexico produced 541,636 ounces of silver and 4,699 ounces of gold compared to 521,931 ounces and 3,666 ounces, respectively, in the third quarter of 2018. The higher silver and gold production was expected as a result of increased throughput. The Velardeña mill operated at an average of 492 tpd, an increase of 14% over the third quarter of 2018. A review of sulfide ore continues through 2019, 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 early in 2020. To date, about 20,000 tons of the planned 26,000-ton sample have been mined and results from the long-hole stoping indicate better than modeled mining recovery and lower dilution. About 13,000 tons have been processed at a third-party mill and results suggest that mill recoveries are generally in line with expectations. There were up to three core drills operating at San Sebastian focused on exploration definition drilling of the El Toro and El Toro Hanging Wall veins and definition drilling on the Middle Vein. This drilling added new mineralization and increased confidence to the El Toro veins, potentially adding oxide mine life to San Sebastian.
"The third quarter performance, including our increased adjusted EBITDA results, demonstrates significant progress toward our twin financial goals of having no net revolver indebtedness at year end and refinancing our senior notes," said Phillips S. Baker, Jr., President and CEO. "Our net revolver debt decreased by about $26 million, all from free cash flow, and our adjusted EBITDA of $70 million is about 50% more than the first and second quarter combined. We expect the fourth quarter adjusted EBITDA to be similar to the third quarter. At the Lucky Friday, a tentative labor agreement has been reached with the union's negotiating committee and is subject to member ratification. We expect the mine ramp-up to full production to take about a year's time, which would be good for the workforce, shareholders and the community. Also, congratulations to the Lucky Friday for winning the Sentinels of Safety, the highest safety award for mining in the US, as well as Idaho's Pollution Prevention Champion Award."
The company’s address is 6500 North Mineral Drive, Suite 200, Coeur d’Alene, ID 83815, 208.769.4100,