Hecla Announces Increased Silver Reserves & Resources and Provides Exploration Update

Hecla Announces Increased Silver Reserves & Resources and Provides Exploration Update

Hecla Mining Company today reported silver reserves and resources as at December 31, 2010 of 142 million ounces and 248 million ounces respectively, the highest in the company’s history. Hecla is also pleased to provide an exploration update on its four large silver districts.


* Silver reserves increased slightly to 142 million ounces * Silver resources increased by 17% to 248 million ounces * Greens Creek’s 200 South continued to define high-grade resources contributing 85% of the 24 million ounces of new silver resources * Drilling at the Lucky Friday continued to define strong veining to the east and at depth resulting in an addition of over 17 million ounces of silver resources and conversion of an additional 4 million ounces of silver reserves at the mine * A new resource was defined at the Noonday project in the Silver Valley * Discovered multiple zones of gold/silver-bearing veins and breccias with ore grades at the intersection of the Amethyst and Equity veins at the San Juan Silver JV in Colorado

* In Mexico, new intersections of precious-metal veining on the Andrea vein that are in close proximity to previous mining and potentially represent a new ore shoot at the San Sebastian property.

“We exceeded our goal of replacing ounces mined in 2010 and defining additional reserves and resources,” said Phillips S. Baker, Jr., Hecla’s President and Chief Executive Officer. “We have also made tremendous progress in our exploration efforts at our four properties. We have extended the mine life at Lucky Friday, added a significant number of resources from the 200 South and East zones at Greens Creek, added a new resource at the Noonday project in the Silver Valley and defined new mineralization at both the San Juan and San Sebastian properties. As a result of last year’s drilling success, we are planning a third more exploration funds in 2011.”

Reserves & Resources

Hecla continued to have success with drilling at its operations by replacing 2010 production and adding to reserves with substantial gains in resources. Total silver reserve and resource ounces for Hecla increased to 142.1 million ounces and 248.3 million ounces, respectively, as shown in Table A at the end of the release. Both are the largest in Hecla’s history.

This increase in reserve tons and silver ounces in 2010 is due primarily to drilling to the east on the 30 vein at the Lucky Friday resulting in the conversion of resources. Lucky Friday replaced production and added 252,000 tons containing 3.8 million ounces of silver to reserves. Reserves at the Lucky Friday mine are the highest in its 69-year history. Greens Creek slightly reduced the reserves due to mining at the North West West (“NWW”), West Ore, and South West (“SW”) zones; however, drilling and re-modeling during the same period added reserves to the 5250 North, 200 South, and East Ore. Greens Creek mined 800,000 tons producing 9.8 million ounces of silver in 2010 and added 728,800 tons containing 8.6 million ounces of silver to reserves. The increased silver reserves at Lucky Friday more than offset the slight decrease in silver reserves at Greens Creek.

Drilling successes in 2010 added a significant amount of new resources. Total resources at December 31, 2010 are 248.3 million ounces of silver, 450,000 ounces of gold, 1.2 million tons of lead and 831,000 tons of zinc. This is the largest resource in the history of the company and is the fifth consecutive year resources have increased. The most significant addition to resources was at Greens Creek, where total silver resources increased by 2 million tons containing 24 million ounces with significant gains in the 200 South and East zones. The Lucky Friday added silver resources of 4 million tons containing 17 million ounces and the Noonday project in the Silver Valley added a new resource of 517,900 tons containing 1 million ounces of silver and 51,000 tons of zinc and 18,600 tons lead.

The ore reserves and resources provided in Table A are based on $16.00 per ounce of silver, $950 per ounce of gold, and $0.80 per pound of lead and zinc.


Exploration expenditures were $20 million in 2010 with $6 million for Greens Creek, $5 million for San Juan Silver Joint Venture (“JV”), $5 million for Lucky Friday/Silver Valley, and $3 million for San Sebastian.

Greens Creek

At the Greens Creek mine in Alaska, underground drilling continues to define high-grade reserves and resources with good widths in the NWW zone along two newly-defined limbs below the current workings and along strike for at least 500 feet. Drilling in the 200 South zone has defined two separate mineralized zones that are typically barite-rich and contain higher values of precious metals relative to other zones in the mine. Recent significant assays from the NWW and 200 South zones are shown in Table B at the end of the release.

Surface and underground drilling continues to define the North East (“NE”) contact which represents a continuation of the Greens Creek mine contact. The contact has been folded underneath the existing mine workings; it extends near surface at Cub Creek less than a mile northeast of the mine infrastructure, and dips below and is sub–parallel to the mine infrastructure. Recent wide-spaced drilling has defined discontinuous mineralized intervals along the contact which has a folded strike length of over 5,000 feet and down dip extension of 3,000 feet. The NE contact’s dimensions compares to the current Greens Creek deposit.

Exploration expenditures at Greens Creek in 2011 should exceed $8 million. Two drills are expected to work underground all year and the surface exploration program has three drills and a number of surface mapping and sampling crews in the spring and summer.

The underground exploration program is designed to continue to explore extensions to the 200 South, 5250, NWW, and Gallagher zones. Exploration along the NE contact will use underground and surface drills.

Lucky Friday – Silver Valley

Exploration at the Lucky Friday mine in Idaho primarily drilled three areas outside the 2009 resource boundary: testing for extension up to 400 feet to the east at various levels; at depth to the 8100 level; and from the 4050 level. To the east, the 30 vein narrows but maintains high-grade silver and base metal values. However, this same drilling has also defined good grade from 6,500 feet down to approximately 7,800 feet over mining widths in the 50, 70, 90, 110, and 120 veins. Drilling of the 30 vein below the 2009 resource boundary to 8100 level continues to intersect wide, high-grade veins in combination with good intersections of the 50, 70 and 90 veins. Drilling in the upper levels of the mine on the 4050 level intersected significant intercepts of the 5, 50, 90, and 100 veins and require follow-up drilling. Selected drilling intersections from the 4th Quarter are shown in Table C at the end of the release.

In 2010, Hecla’s drilling of the Noonday veins, located two miles northwest of Lucky Friday and near the past-producing Star mine, has defined a new resource. The Noonday project is targeting the continuation of mineralization on the Noonday North Split and Noonday veins, above stopes that were last mined in the late 1980’s. Drilling has intersected two veins with high-grade intersections of zinc, silver and lead that are open along strike. Eight of the ten drill holes intersected multiple veins of high-grade zinc, lead, and silver mineralization with the best intercepts shown in Table C at the end of the release.

The 2010 surface drilling was successful in defining a 5,000-foot structural zone, potentially corresponding to the You Like/30 vein trend between the Star Mine and the Lucky Friday Expansion Area. Alteration and vein mineralization is better developed near the western end where there is transition into more favorable host rocks. The wide-spaced drilling on this trend has confirmed the presence of a significant mineralized structure with localized high-grade intervals. Selected intersections along this trend are shown in Table C.

The exploration budget for Lucky Friday/Silver Valley in 2011 is approximately $5 million and includes efforts to expand resources from the 4050 level and initial deeper drilling to the west past the Silver Fault; expanding the Noonday resources along strike; evaluating a number of other vein structures near the past-producing Star Mine; and drilling the Butte/Coeur d’Alene target to the east of the Lucky Friday.

San Juan Silver JV

The San Juan Silver JV (Hecla has a 70% interest), with partners Emerald Mining and Leasing, LLC and Golden 8 Mining LLC, located in Creede, Colorado received approval of its Environmental Assessment and 5-Year Plan of Operation in mid-2010, enabling expansion of exploration on three vein systems: Bulldog, Amethyst and Equity. Drilling continued to successfully define mineralization along the Bulldog and Amethyst trends. Further to the north, drilling uncovered multiple zones of gold/silver-bearing veins and breccias where the Amethyst and Equity vein structures intersect. Drilling identified a 300-foot wide zone of intense hydrothermal alteration containing veins and breccias that have significant precious and base metal-bearing intervals along the north-trending Amethyst vein where it intersects the east-west trending Equity structure.

The Amethyst drilling targeted the structure 2,500 feet north of the historic underground workings and encountered both west and east vein strands. The West Strand of the Amethyst is the best developed and contains up to 0.2 ounces per ton gold, 3.8 ounces per ton silver and 4.3% lead over 9.5 feet. The most significant high-grade intercepts occur at the intersection of the Amethyst and Equity trends and are tabulated with the Bulldog vein in Table D at the end of the release.

The 2011 exploration budget for the San Juan Silver JV is approximately $5 million and includes drilling of at least three structures, with particular emphasis on the newly-defined mineralization at the intersection of the Amethyst and Equity.

San Sebastian, Mexico

The Pedernalillo area in the southwest portion of the San Sebastian property is host to the past-producing Don Sergio and Andrea veins in addition to the nearby, newly discovered gold and silver-bearing Pedernalillo vein. This vein may be an offset portion of the Andrea vein. More significant, recent drilling of the Andrea vein includes a potential ore shoot parallel to the Don Sergio vein which was mined by Hecla in 2003 and 2004. Initial 3-D and economic modeling indicate that remnant Don Sergio mineralization and newly-intersected Andrea veins, along with the newly-discovered Pedernalillo veins, represent a new target due to their close proximity. Selected drill intersections of the Andrea vein are shown in Table E. Hecla has designated a budget of $3 million for the 2011 exploration program with drilling in the Andrea-Pedernalillo and Cerro Santiago areas.


Hecla’s exploration strategy in 2011 is largely focused on drill-testing targets on its district-sized land positions surrounding existing operations or re-emerging historic mining districts. With up to 12 drills operating and 250 thousand feet of underground and surface drilling, we are continuing systematic exploration. As evidence of such, we’re increasing our exploration budget to approximately $27 million in 2011, including exploration at our Lucky Friday and Greens Creek operations.


Established in 1891, Hecla Mining Company is the largest and lowest cash cost silver producer in the U.S. The company has two operating mines and exploration properties in four world-class silver mining districts in the U.S. and Mexico.

Cautionary Statements

Statements made which are not historical facts, such as anticipated payments, litigation outcome, production, sales of assets, exploration results and plans, costs, and prices or sales performance are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and involve a number of risks and uncertainties that could cause actual results to differ materially from those projected, anticipated, expected or implied. These risks and uncertainties include, but are not limited to, metals price volatility, volatility of metals production and costs, environmental and litigation risks, operating risks, project development risks, political risks, labor issues, ability to raise financing and exploration risks and results. Refer to the company’s Form 10-K and 10-Q reports for a more detailed discussion of factors that may impact expected future results. The company undertakes no obligation and has no intention of updating forward-looking statements other than as may be required by law.

Cautionary Statements to Investors on Reserves and Resources

The United States Securities and Exchange Commission permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms on this release, such as “resource,” “other resources,” and “mineralized materials” that the SEC guidelines strictly prohibit us from including in our filings with the SEC. U.S. investors are urged to consider closely the disclosure in our Form 10-K and Form 10Q. You can review and obtain copies of these filings from the SEC’s website at www.sec.gov.

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