Major Progress On Re-Opening The Lucky

COEUR D'ALENE, ID - Hecla Mining Company is delivering cash flow today and investing in growth for the future. Despite only Greens Creek on Admirality Island, Alaska operating currently, Hecla generates enough cash flow and has a strong enough balance sheet to invest record amounts in capital, exploration and pre-development that we believe will provide long-lived production - 15 plus years at Greens Creek and 30 plus years at Lucky Friday - and 50% production growth over the next five years," said Hecla's President and Chief Executive Officer Phillips S. Baker, Jr.

"We are pleased to report that rehabilitation work at the Lucky Friday Silver Shaft through the second quarter has progressed ahead of schedule past the 4900 foot level. Access to this level materially changes the scope of activities at the mine. Now, in addition to rehabilitating the shaft, we expect to soon begin construction on two bypasses on the 5900 foot level which positions us to restart production in early 2013. Plus, we can restart planning work on the #4 Shaft, which will provide 3,000 feet of deeper access to higher grade ores and the potential for 30 years of future production," Baker added.

"At Greens Creek, second quarter silver production of 1.4 million ounces was impacted by lower grades, but cash costs net of by-product credits were $1.03 per ounce of silver, providing excellent operating margins. We expect production levels at Greens Creek to increase through the remainder of the year, as we continue our record capital investment program there, preparing the mine for many more years of anticipated low-cost production and reserve growth," Baker added.

"Our record 2012 exploration and pre-development program at the four districts we control continues to return excellent results. We expect this pre-development program, along with our existing operations, to help us reach our targeted goal of 15 million ounces of Company-wide silver production by 2017. Underpinning this growth is our very strong balance sheet, with $233.0 million in cash and no significant debt.

Exploration expenditures for the second quarter were $7.1 million, with $2.7 million for exploration at San Juan Silver in Colorado, $1.2 million for San Sebastian in Mexico, $1.2 million at the Star mine complex, $0.7 million at Greens Creek, $0.7 million for the Silver Valley, and $0.6 million for other exploration-related activities. Expenditures in 2012 are expected to be approximately $30.0 million.

Underground drilling at Greens Creek continues to extend mineralization along trend of the Southwest Bench, Gallagher, 200 South, 5250 and 9a Zones. Drilling at the Southwest Bench has defined high-grade extensions beyond the current resources, connected isolated mineralized bodies into continuous zones, and defined a new lens of mineralization. Highlights from drilling of the Southwest Bench include intercepts of 0.39 opt gold, 14.83 opt silver, 10.5% lead and 22.4% zinc over 58.4 feet, 0.14 opt gold, 56.2 opt silver, 8.8% lead and 16.6% zinc over 42.6 feet and 0.11 opt gold, 3.9 opt silver, 6.5% lead and 38.1% zinc over 24.6 feet. Drilling of the Gallagher Zone continues to extend mineralization further to the southeast beyond the current resource boundaries. High-grade mineralization at both the 5250 and 9a Zones has been defined beyond the current resources and is open further to the south.

The focus of current drilling at Greens Creek is the 200 South Zone where in-fill drilling has confirmed and extended an upper limb that averages 25 feet of white baritic ore and a lower limb that averages 18 feet of massive base metal and baritic ore types. Drilling from two stations along the southern-most development has intersected massive base metal and white baritic ore types and is expected to extend the current 200 South resource approximately 200 feet to the south. The confirmation and expansion of the 200 South resource suggests this area of the mine has the potential to be a significant contributor to current and future LOM plans. A more extensive assay table of the Greens Creek underground drilling program can be found at the end of this news release. The surface drill program at Greens Creek started in mid-June and is expected to have three drills active until mid-October.

At the west end of the Star mine complex in the Silver Valley there are now two drills targeting high-grade, northerly and down-dip extensions to the Moffitt and North Star veins. This drilling extends the Moffitt vein approximately 400 feet down dip and approximately 600 feet along strike beyond the current resource boundaries. Surface drilling of the Noonday and Noonday Split have upgraded the current resource and defined new mineralization on the flanks of the known resource. Complete assays are provided at the end of this release.

The high-grade, gold-silver bearing breccia and veins of the 108 Trend at the Equity in Colorado average 300 feet of strike length and continue for over 600 feet down plunge. Drilling continues to define 12- to 35-foot zones of intense brecciation, silica flooding and strong alteration; however, the sulfide concentration appears to be declining at the lower limits of the trend as the host rock changes to less competent material. This high-grade zone includes intersections of 18.6 opt silver and 0.15 opt gold over 11.4 feet and 26.4 opt silver and 0.25 opt gold over 8.8 feet, but a more thorough list of assays during the second quarter is provided in the table at the end of the release.

Pre-development expenditures for the second quarter of 2012 were $3.5 million with $1.8 million at the San Juan Silver property in Colorado, $1.3 million at the Star property in Idaho and $0.4 million at the San Sebastian property in Mexico. Pre-development expenditures in 2012 are expected to total approximately $23.0 million.

At the San Juan project in Colorado on the Equity project, crews are continuing to rehabilitate underground workings, install utilities down the decline and develop additional drill stations as drilling continues to intercept high-grade mineralization on the Equity and prepares to evaluate the Amethyst vein. At the nearby Bulldog project, the design of the decline is being finalized and a contractor has been selected with beginning of decline development expected to occur in September. Commencing development of the underground workings was an important milestone for the Bulldog project. The Company now expects to invest a total of $10.6 million at the Bulldog in 2012. Plans to obtain authorizations for future underground exploration activities at the Bulldog are being developed.

In Idaho's Silver Valley at the Star project, rehabilitation of the #5 Shaft continues to where the connection to the Grouse 700 level will provide for secondary surface access. A 750-foot long drift is being driven on the Star 2000 level in order to provide a drilling platform to test the eastern extensions of the Noonday and Noonday North Split veins.

At the San Sebastian project in Mexico, options for accessing the existing mineral resources at the Hugh Zone and a new mine are being refined. A preliminary economic analysis is expected to be completed during the third quarter of this year. A work plan and drill program to outline hydrology of the Andrea area, which is located on the same property package as the Hugh Zone, has been completed and preliminary mine designs are being reviewed.

Hecla reported second quarter net income applicable to common shareholders of $2.4 million and earnings after adjustments applicable to common shareholders of $4.4 million. Second quarter silver production was 1.4 million ounces at a cash cost of $1.03 per ounce, net of by-products.

The company's address is 6500 N Mineral Dr, Suite 200, Coeur d'Alene, ID 83815-9408, 208.769.4100, fax: 208.769.7612.