Lucky Friday Mine Second Straight Quarter Exceeding 1 Million Ounces Of Silver
COEUR D'ALENE, ID - “Hecla Mining Company reported another quarter of solid operational performance as Greens Creek Mine, in Alaska, achieved its best ever throughput, and in Idaho the Lucky Friday Mine production exceeded 1 million ounces for the second consecutive quarter,” said Phillips S. Baker Jr., President & CEO. “Free cash flow generation was lower for the quarter due to deferral of the sale of about a million ounces of silver and other metals, increased capital investment in our mines, and Alexco acquisition costs. All operations are free cash flow positive year to date and reflect the strong margins at our silver operations despite lower prices and an inflationary environment. Hecla is the United States’ largest silver miner, producing about 40% of all the silver mined. With Keno Hill's pre-production development on plan, we should become Canada's largest silver miner in the next few years.”
The Lucky Friday Mine produced 1.1 million ounces of silver during the third quarter. The third quarter marked two consecutive quarters of throughput exceeding 90,000 tons and silver production exceeding 1 million ounces. 2,000 dry metric tonnes of silver concentrate was inventoried to be shipped to a new customer in the fourth quarter. Costs associated with the deferral of this concentrate shipment were in inventory in the third quarter, and impact on revenues and cash flow for the fourth quarter is expected to be approximately $6.0 million. Total cost of sales was $24.2 million.
The Greens Creek Mine produced 2.5 million ounces of silver and the mill achieved record mill throughput of 2,500 tons per day. Lead and zinc production for the quarter declined 15% and 6% respectively due to lower grades which led to the deferral of a silver concentrate shipment into the fourth quarter to ensure adequate volumes for cost effective shipping.
At Greens Creek, drilling has focused on resource expansion and conversion which have yielded positive results. Three underground core drills are focused on resource conversion in the 200 South and East ore zones and on exploration in the East, 5250, 200 South, and Gallagher Fault Block zones. Additionally, two helicopter supported core drills are focused on drilling extensions to the Upper Plate Zone near the mine and the Lil’Sore target area approximately 3 miles northwest of the mine. These positive results continue to confirm and expand mineral zones. Significant assay intercepts for different zones are: Southwest Bench: 74.3 oz/ton silver, 0.52 oz/ton gold, 5.7% zinc and 2.9% lead over 10.5 feet and 25.7 oz/ton silver, 0.15 oz/ton gold, 6.4% zinc, and 3.1% lead over 20.1 feet; 200 South: 18.5 oz/ton silver, 0.02 oz/ton gold, 2.6% zinc, and 1.1% lead over 44.7 feet; East Zone: 51.6 oz/ton silver, 0.05 oz/ton gold, 0.1% zinc, and 0.0% lead over 11.1 feet and 227.8 oz/ton silver, 2.84 oz/ton gold, 4.2% zinc, and 0.4% lead over 2.9 feet; and West Zone: 37.0 oz/ton silver, 0.26 oz/ton gold, 18.3% zinc, and 9.5% lead over 47.2 feet and 55.2 oz/ton silver, 0.16 oz/ton gold, 16.5% zinc, and 8.9% lead over 31.2 feet.
Casa Berardi Mine, in Quebec produced 33,335 ounces of gold compared to 33,306 ounces in the prior quarter. The mill continues to perform well and operated at an average quarterly throughput of 4,239 tons per day (tpd) with a new record set in September as monthly production throughput reached 4,856 tpd, beating the last monthly record in May 2022 of 4,533 tpd. Total cost of sales for the third quarter 2022 was $59.5 million.
Up to seven underground core drills and one surface core drill at Casa Berardi were focused on definition and exploration drilling in multiple zones and target areas and one surface core drill was focused on condemnation drilling. Drilling targeted the 113, 118, 119 and Lower Inter zones. In the 113 Zone, two drill rigs are testing offsets and depth extensions of multiple 113 lenses. In the 118 Zone, drilling has been focused on defining continuity and expanding mineralization in the 118-14, and 118-15 lenses up and down plunge and to the east. Most of the 118 drilling has been showing good vertical continuity of mineralization. The drilling targeting the 119-02 lens show that the structure remains open at depth while closing to the east. Highlights include: 113: 0.56 oz/ton gold over 9.5 feet, including 1.61 oz/ton gold over 2.6 feet; 118: 0.20 oz/ton gold over 8.2 feet; and 119: 0.16 oz/t gold over 14.8 feet.
The Keno Hill Mine, in the Yukon Territory, focused on development and drilling of the Bermingham and Flame & Moth deposits to bring the mine into full and consistent production by the end of 2023. To date 30% of total planned pre-production development is complete, and the Company expects to complete approximately 50% of the development by the end of the fourth quarter. Fourth quarter capital spending is forecast at $10-$12 million for development, infill drilling, and equipment purchases. Since the acquisition, Keno Hill is seeing its lowest turnover in the mine's recent history and is expected to achieve the hiring rate for production. Hecla is implementing its Health and Safety Management System and Environmental Management System in the fourth quarter.
Exploration drilling on the underexplored Coral Wigwam target area has discovered high-grade silver mineralization. Assay results to date include 101.5 oz/ton silver over 7.3 feet estimated true width.
In Nevada, Aurora exploration drilling has confirmed wide and high-grade vein mineralization along the Martinez-Juniata-Chesco mineral trend. This mineralization continues to be open for expansion along strike and dip. Some significant intercepts are Martinez Zone: 0.40 oz/ton gold and 1.8 oz/t silver over 31.1 feet estimated true width, which includes 1.26 oz/ton gold and 4.4 oz/t silver over 6.7 feet estimated true width; Juniata Zone: 0.43 oz/ton gold and 1.9 oz/ton silver over 14.9 feet estimated true width, which includes 0.76 oz/ton gold, 3.5 oz/ton silver over 8.0 feet estimated true width; and Chesco Zone: 0.73 oz/ton gold and 7.7 oz/ton silver over 12.2 feet estimated true width.
Exploration drilling identified high-grade vein mineralization at both the Lone Pine-Blacktail and Tom Thumb target areas in Republic, Washington. Wide zones of lower grade, potentially bulk mineable, material surround some of the high-grade vein intercepts at Lone Pine-Blacktail. Drilling also discovered an offset segment of the Tom Thumb Vein 850 feet across the Mud Lake Fault into the basin.