Hecla Reports Second Quarter 2011 Doubling of Income 

COEUR D'ALENE, ID - Hecla Mining Company reported second quarter net income of $33.3 million. Second quarter silver production was 2.3 million ounces at a cash cost of $0.52 per ounce, net of by-products.

Hecla had solid operational and financial results year-to-date generating significant cash flow from Greens Creek and Lucky Friday to fund our capital projects and meet our environmental settlement obligations, said Hecla's President and Chief Executive Officer, Phillips S. Baker, Jr. The #4 Shaft Project combined with the new pre-development initiatives at our four properties are expected to increase production by approximately 50-60% over the next 5 years.

We continue to benefit from high silver margins even with increasing industry cost pressures. Hecla's cost increase during the quarter is mainly attributable to higher metals prices, which was partially offset by strong by-product credits. Both Greens Creek and Lucky Friday remain among the lowest cost mines in the silver space.

Hecla's cash position at June 30, 2011 was $377 million, compared to $197 million of cash on hand at June 30, 2010.

Baker said, Capital expenditures (including non-cash capital lease additions) at our operations totaled $26.4 million and $45.7 million for the second quarter and six-month period ended June 30, 2011, respectively. Lucky Friday's expenditures for the second quarter and first half of 2011 were $14.1 million and $28.5 million, respectively, of which the majority was spent on the #4 Shaft Project. Greens Creek's expenditures in the second quarter and first half of 2011 were $12.3 million and $17.2 million, respectively. Expected capital expenditures for 2011 have increased from $100 million to $115 million primarily from the acceleration of projects at Greens Creek.

Exploration expenditures for the second quarter and six-month period ended June 30, 2011 were $5.8 million and $9.1 million, respectively. Exploration for 2011 is expected to increase from $27 million to $32million due to the establishment of pre-development initiatives and the expansion of exploration programs, primarily in Mexico.

Hecla expects the Consent Decree for the Coeur d'Alene River Basin Environmental litigation to be entered in the third quarter of 2011. Hecla will pay $263.4 million over a three-year period (plus $1.1 million in pre-lodging interest). The initial payment of $167 million, which includes $102 million of cash, $55.5 million of cash or Hecla stock, and approximately $9.5 million in proceeds from previously exercised series 3 warrants, will be payable 30 days after entry of the Consent Decree.

Second quarter silver cash costs, net of by-product credits, was $0.52 per ounce compared to negative $1.82 per ounce in the same period in 2010. Based on current 2011 production guidance and cost estimates and assuming recent metals prices for the second half of 2011, total cash costs, net of by-product credits, are expected to be approximately $1.00 per ounce of silver for the year 2011.

Silver production at Greens Creek in Alaska was 1.5 million ounces in the second quarter of 2011 and 3.2 million ounces in the first half of 2011, compared to 1.8 million ounces and 3.4 million ounces, respectively, in the same periods in 2010. The decrease in silver production year-over-year is due to lower silver ore grade and reduced ore volume. The lower silver grades in the second quarter were expected and are due to differences in the sequencing of production according to the mine plan.

Mining and milling costs were up by 29% and 22% for the second quarter and six-month period ended June 30, 2011, respectively. The increase was driven primarily by higher power costs from generating power on-site due to lower availability of less expensive hydroelectric power, caused by the lower precipitation levels in Southeastern Alaska, and higher labor costs due primarily to higher fringe benefits costs.

Total cash cost per ounce of silver produced at Greens Creek was negative $2.70 and negative $1.64 net of by-products, for the second quarter and first half of 2011, respectively, compared to negative $4.56 and negative $5.45 for the same respective periods in 2010. The increase in total cash cost per ounce quarter-over-quarter and year-over-year is due to higher production costs, treatment costs, and mine license tax by $4.60, $4.28, and $1.12 per ounce, respectively. This is partially offset by higher by-product credits of $8.14 per ounce resulting from higher average market zinc, lead, and gold prices. The higher mine license tax and treatment costs are the result of higher metals prices.

Silver production at Lucky Friday located in Shoshone County, Idaho was 0.8 million ounces in the second quarter of 2011 and 1.5 million ounces in the first half of 2011, compared to 0.8 million ounces and 1.7 million ounces, in the respective periods in 2010. The overall decrease in production year-over-year is primarily due to lower silver ore grade, which was expected.

Mining and milling costs were up by 9% for both the second quarter and six-month period ended June 30, 2011. The increase was driven primarily by increased cost of fuel, consumable underground materials, reagents, power, and maintenance supplies. Total cash cost per ounce of silver produced at Lucky Friday was $6.46 and $5.74, net of by-product credits, for the second and first half of 2011, respectively, compared to $4.47 and $3.81, for the same respective periods in 2010. The increase in total cash cost per ounce quarter-over-quarter and year-over-year is primarily due to higher employee profit sharing, production costs, expensed site infrastructure, and treatment costs, which are partially offset by higher by-product credits resulting from higher zinc and lead prices. Higher profit sharing and treatment costs are due to higher metals prices. The company's address is 6500 N. Mineral Drive, Suite 200, Coeur d'Alene, ID 83815, 208.769.4100, fax: 208.769.7612, email: [email protected].