Hecla grows reserves, exploration budget

Hecla Mining Company Feb. 7 reported the highest silver, gold and lead reserves in the Idaho-based miner's 127-year history, as well as the highest zinc reserve in the last five years. The company went into 2018 with 2.3 million ounces of gold in reserves, a 12 percent increase from the beginning of 2017; 177 million oz of silver, an increase of 3 percent; 737,290 tons of zinc, an 8 percent increase; and 840,870 tons of zinc, a 15 percent increase in reserves.

"It is a remarkable achievement for a 127-year-old company to have record reserves for three of the four metals it produces, particularly using price assumptions significantly below spot and among the lowest in the industry" said Hecla President and CEO Phillips Baker, Jr.

In fact, despite the increase in metals prices over the past year, Hecla used the same price assumptions for reserves as last year - $14.50/oz for silver, $1,200/oz for gold, $1.05/lb for zinc and 90 cents/lb for lead.

This means that the company simply added more metals to its reserves through drilling than it mined in 2017.

"We believe that our investment in exploration is a key step towards generating real value for shareholders. As we grow our reserves and increase our already long mine lives, we can improve productivity by increasing throughput or lowering costs so the mines can generate returns regardless of the metals price," said Baker.

At Greens Creek, the mill processed 839,589 tons containing 10.8 million oz of silver, 78,245 oz of gold, 60,858 tons of zinc and 22,870 tons of lead during 2017. Despite this solid production, the reserves of all four metals increased.

Going into 2018, Greens Creek had 7.55 million tons of proven and probable reserves averaging 11.9 oz/t (90.22 million oz) silver, 0.1 oz/t (725,000 oz) gold, 8.1 percent (614,840 tons) zinc and 3 percent (225,050 tons) lead.

The mill at Hecla's Casa Berardi Mine in Quebec processed 1.3 million tons of ore containing 180,373 oz gold. The proven and probable reserve tonnage at Casa Berardi increased 34 percent to 13.87 million tons and the gold in these reserves increased roughly 14 percent to 1.49 million oz.

At San Sebastian, the mill processed 144,197 tons of ore containing 3.45 million oz of silver and 26,676 oz of gold. Proven and probable gold reserves at this mine in Mexico was 43,000 oz going into 2018, a 17 percent increase over the past year, silver reserves at San Sebastian, however, dropped 1 percent to 5.52 million oz.

The Lucky Friday Mine in Idaho processed 70,718 tons of ore last year containing 875,488 oz of silver. Proven and probable silver reserves at Lucky Friday increased 4 percent to 81.26 million oz, zinc reserves increased by 47 percent to 226,030 tons and lead reserves increased by 10 percent to 512,240 tons.

Hecla plans to invest between $30 and $37 million on exploration in 2018, a significant increase over the $23.5 million spent last year.

"Our exploration budget is increasing again this year, because we have more exploration opportunities at our operating properties and beyond than any time in my tenure at Hecla," said Baker.

–SHANE LASLEY