The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Miner splits drilling activity between reserve expansion and new mining area to northeast
After spending $750 million to buy out Rio Tinto's 70.27 percent interest in the Greens Creek Mine in April 2008 and then watching base metal prices plummet, Hecla Mining Co. chose to be prudent in its 2009 exploration of the zinc-rich silver mine.
Though restrained, the Idaho-based silver miner's US$3.4 million exploration budget for Greens Creek continued the tradition of replenishing the reserves currently being mined as well as drilling a contact zone that could become a whole new Greens Creek.
The company estimates that roughly one-third of the drilling relates to adding a near-term reserves-resource at the Southeast Alaska mine and the rest is going toward longer-term exploration.
Hecla Mining President and CEO Phillips S. Baker, Jr. said, "At the start of production 20 years ago, we had reserves of 2.9 million tons, and since that time we've mined more than 10 million tons of ore and today have an additional 8 million tons in reserves. The potential for discovery is exceptional."
Reserve expansion
The in-mine, underground drill program at Greens Creek is designed to continue replacing as well as adding to the ore reserves. Baker told investors in July that the exploration group at Greens Creek is most excited about the drilling at Southwest Ore zone, designed to in fill drill the lower contact of this zone.
This underground drill program has defined multiple folds and repeated mineral contacts with good intercepted widths that support the company's view that bulk mining methods may be used in this zone.
During the second half of the year, in-mine drilling at Greens Creek is targeting the Northwest-West zone.
Underground development in the south portion of the deposit will provide a working platform for drilling the Deep 200 South and the southern extension of 5250 deposit, two other zones that Hecla is excited to investigate.
"On top of that $3.4 million (of exploration), we are also doing designation drilling, which is really transition from exploration where you have found mineralization to actually drilling off a resource that you can build a mine plan around," Hecla Vice President of Exploration Dean McDonald explained.
New Greens Creek?
The silver miner is hoping an area to the northeast of the current mine infrastructure will expand the existing mineralization in that direction or even create a new mining area at Greens Creek.
McDonald explained that this prospective area, known as the Northeast contact, is related to the same sequence of rocks as the ore bodies currently being mined.
"The indications are that this mine contact that we identified northeast of the current workings, we're seeing that horizon with some mineralization tracing towards the main ore bodies. And so the underground drilling to the south will hopefully provide us the information that will link existing mineralization to this newly identified horizon. The drilling to the north is really attempting to find out if we're looking at a brand new mining center," Baker told investors in July.
This year, the company is drilling the contact zone from the surface in the north and from underground to the south.
The first hole of the surface program was drilled near the 920 Portal, and a second hole was added about 800 feet, or 240 meters to the north. Hecla said drilling has now traced the Northeast contact about 2,000 feet, or 600 meters along strike, and it is tracing back toward known mineralization at the mine.
"Recent work has detailed more than 25 miles of mineralized contact. The Northeast contact work is just the start of a methodical approach to fully evaluate Greens Creek's mineral potential, which should result in new discoveries," Baker said.
Looking elsewhere
Drilling at Hecla's Lucky Friday silver mine in Idaho continues to refine and expand the high-grade central and eastern 7,100-to 7,500-level areas, and deeper exploration drilling is defining mineralization down to the 8,000 level.
The company's preliminary evaluation indicates that silver grades are increasing at depth. Resource estimates incorporating drilling for the past year through to June are being completed, with revised reserves expected at the end of 2009.
With silver and base metal prices on the rise in 2009, Hecla said in September that it increased its total 2009 exploration budget by about 40 percent, to US$9.5 million.
In addition to Greens Creek and Lucky Friday, the silver miner is drilling the deep Vindicator silver-based metal vein target east of Lucky Friday and the Bulldog vein at the San Juan joint venture in Colorado. The company said drilling should start at the San Sebastian property in Mexico in the fourth quarter.
By early October, nine drill rigs were turning at Hecla projects in Alaska, Colorado, Idaho and Mexico.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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