Lucky Friday Operations Return To Normal With Upgraded Ventilation System

 

COEUR D'ALENE, ID - Hecla Mining Company reported that Lucky Friday’s third quarter silver production of 592,243. A failure of the underground booster reduced the ventilation capacity of the mine, leading to the temporary closure of a higher-grade production stope. Replacement fans are now in operation and Lucky Friday has returned to normal production. In addition, there were 16 days of downtime in the third quarter for planned hoist mechanical maintenance. The mill operated at an average of 715 tpd.

“Greens Creek continues to drive Hecla’s strong, consistent production performance,” said Phillips S. Baker, Jr., President and CEO. “We expect a considerably stronger fourth quarter, now that the ventilation system has restarted at Lucky Friday and with higher-grade material from the 123 Zone at Casa Berardi. When coupled with the startup of San Sebastian which is underway, we are optimistic about our performance going into 2016.” Greens Creek’s third quarter production of 1,992,037 ounces of silver exceeded the third quarter of 2014 by 5.3%, while gold production of 14,376 ounces was 6.3% higher. The higher silver production was a result of higher recoveries and tonnage, partially offset by slightly lower grades. The mill operated at an average of 2,233 tons per day (tpd).

Casa Berardi’s third quarter gold production of 29,259 ounces was in line with the third quarter of 2014. The mill operated at an average of 2,262 tpd.

San Sebastian’s high-grade near-surface material is projected to produce 8.1 million silver equivalent ounces with after-tax cash flow (5% discount rate) of $43 million over its mine life. The Company’s approach at San Sebastian is to minimize capital expenditures ($5.8 million) by using a mining contractor and renting capacity from a nearby mill, which should allow the project to quickly move into production despite the low-price environment.1 This approach reflects the Company’s strategy of seeking to simultaneously grow and create value while maintaining a healthy balance sheet. The mining contractor has begun stripping on the Middle Vein. The Company expects to be processing ore by year end, and to continue for 18 months, a period that may be extended with additional resources as a result of continued in-fill and exploration drilling.

Hecla’s year-end production expected to be at the high end of the previous estimate of 10.5-11.0 million ounces of silver and 185,000 ounces of gold. Gold production is now expected to be 59,000 ounces at Greens Creek and 126,000 ounces at Casa Berardi.