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The mining newspaper for Alaska and Canada's North
Hecla increases silver and gold guidance for SE Alaska mine North of 60 Mining News – October 11, 2022
The Green Creek Mine in Alaska produced 2.5 million ounces of silver and 11,412 oz of gold during the third quarter.
Core from high-grade silver mineralization cut during 2018 drilling carried out by Alexco Resource at Hecla's newly acquired Keno Hill Mine in the Yukon.
With the Greens Creek Mine in Alaska exceeding expectations, along with continued strong output from the Lucky Friday silver mine in Idaho and Casa Berardi gold mine in Quebec, Hecla Mining Company has raised its outlook for the production of both silver and gold during 2022.
"Hecla reported another strong quarter of operational performance from all three mines as Greens Creek achieved record throughput for the quarter, Lucky Friday's quarterly production continued to exceed 1 million ounces and the mine has already produced around 90% of last year's annual production, and Casa Berardi delivered consistent production with the mill continuing the record throughput rates," said Hecla Mining Company President and CEO Phillips Baker, Jr.
Hecla went into 2022 expecting to produce 12.9 to 13.5 million oz of silver and 165,000 to 175,000 oz of gold at all three mines this year. After evaluating where it stands at the end of the third quarter, the Idaho-based miner upped its 2022 guidance to 13.6 to 14.1 million oz of silver and 169,000 to 180,000 oz of gold.
"Our production growth makes Hecla the fastest growing established silver producer, further increasing our leadership as the largest silver producer in the U.S. with the potential to be Canada's largest silver producer as well," Baker continued.
The potential to be the largest silver producer in Canada came with Hecla's acquisition of Alexco Resource Corp. and that company's Keno Hill Silver District project in the Yukon.
While production at Lucky Friday and Casa Berardi have been strong this year, Greens Creek is the one operation in Hecla's portfolio that is outpacing the company's guidance for 2022.
With the mill running at a record 2,500-metric-ton-per-day throughput average, Greens creek produced 2.5 million ounces of silver and 11,412 oz of gold during the third quarter. With another strong quarter, this underground operation near Alaska's capital city of Juneau has produced 7 million oz of silver and 35,860 oz of gold through the first nine months of 2022, putting it on pace to come in above the 8.6 to 8.9 million oz of silver and 40,000 to 43,000 oz of gold.
After looking at where the operation sits going into the final stretch of 2022, Hecla has raised the 2022 production outlook for Greens Creek to 9.3 to 9.6 million oz of silver, about 8% higher than the original guidance, and 44,000 to 48,000 oz of gold, about 10% higher than estimates at the beginning of the year.
Considering that Greens Creek currently accounts for nearly 70% of Hecla's silver production and 35% of the company's gold production, this increased output is adding a nice boost the Idaho miner's overall precious metals production for the year.
Zinc and lead grades at the Southeast Alaska operation, however, declined 13% and 19%, respectively, due to mine sequencing and heading availability.
These lower base metal feed grades resulted in the decision to defer a shipment of silver concentrates from Greens Creek until this month to ensure adequate concentrate volumes for cost-effective shipping.
Combined, Greens Creek and Lucky Friday produced 15,589 tons of zinc, down 5% from the 16,766 tons produced in the second quarter, and 11,601 tons of lead, a drop of roughly 13% from 13,331 tons produced in during the prior three-month period. While Hecla does not report these base metals per operation, Greens Creek tends to be more enriched with zinc and Lucky Friday is weighted more toward lead.
Hecla's iconic Lucky Friday Mine in Idaho produced 1.1 million oz of silver during the third quarter, slightly less than 1.2 million oz produced during the previous quarter.
Decreased production was due to lower milled grades and mined tons as new equipment is commissioned and projects are prioritized for increasing future throughput.
The mill operated at an average throughput rate of 986 tons per day during the third quarter, which puts Lucky Friday on track for a record volume of ore processed during 2022.
Having produced 3.2 million oz of silver through the first nine months of this year, Hecla expects Lucky Friday to achieve its guidance of 4.3 to 4.6 million oz silver for 2022.
The achievement of this production forecast would mean three straight quarters of higher than 1 million oz of silver, which bodes well for even higher output during 2023.
Hecla's Casa Berardi Mine in Quebec produced 33,335 oz of gold during the third quarter, almost exactly matching the output during the second quarter.
The consistent gold output is despite a roughly 4% drop in mill throughput – 4,239 tpd during the third quarter compared to 4,413 in the second.
So far this year, Casa Berardi has produced 96,881 oz of gold, which is consistent with production through the first nine months of 2021. The Quebec mine remains on pace to 125,000 to 132,000 oz of gold this year.
In addition to all its current mines running at or above expectations, Hecla is making progress on readying its new Keno Hill silver mine for production.
According to a calculation completed for Alexco prior to the Hecla acquisition, Keno Hill hosts 1.44 million metric tons of probable reserves averaging 804 grams per metric ton (37.19 million ounces) silver, 3.84% (122 million pounds) zinc, and 2.64% (84 million lb) lead in four deposits – Bellekeno, Lucky Queen, Flame & Moth, and Bermingham.
At the end of 2020, Alexco began to ramp up to commercial production at Keno Hill, but COVID-related staffing issues slowed the restart of operations in the historic district and in June of this year the company announced that it was shutting down the mill in order to focus on underground development and to ensure the availability of ore.
Hecla, which finalized its buyout of Alexco in September, is picking up where Alexco left off.
In its quarterly production report, Hecla said that 20% of total planned preproduction development is complete and the operation remains on track for the ramp up to commercial production next year.
"Over the coming months Hecla plans to invest in development, infrastructure, and equipment so there are adequate mining faces and good working conditions to bring Keno Hill to full and consistent production by the end of 2023," Baker said in September.
Further details of the Alexco acquisition can be read at Hecla Mining finalizes Alexco acquisition in the September 7, 2022 edition of North of 60 Mining News.
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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