Sep. 9, 2009 (Business Wire) -- Hecla Mining Company (NYSE:HL) is pleased to announce improved operating performance, increased exploration spending and an update on the development plans for the Lucky Friday mine.
Hecla’s operations continue to show marked improvement as a result of previously implemented plans which focused on lowering cash costs through cost-cutting and optimization programs. Increased production volumes, improved grade control measures and greater availability of hydroelectric power at the Green Creek mine have led to lower operating costs in 2009 compared with 2008. Prices for by-product base metals have also rebounded sharply since early June which helps to reduce operating costs at both the Greens Creek and Lucky Friday mines.
As a result of these programs and improved business conditions, Hecla is revising anticipated full year 2009 silver production to 10.5 to 11 million ounces from 10 to 11 million ounces. The estimate of cash cost per ounce of silver has been reduced by a third to less than $3.00 per ounce of silver from the previously announced estimate of $4.50 per ounce.
Hecla Mining Company President and Chief Executive Officer Phillips S. Baker, Jr., said, “If prices for metals remain at their current levels we should generate substantially more operating cash flow this year than anytime in Hecla’s hundred year history. Second quarter cash flow was $20 million and, importantly, compares favorably with our competitors who produced more silver but at higher operating costs thereby providing less operating margin.”
Baker continued, “Our people have done an excellent job of managing the operations. At Greens Creek we lowered operating costs by increasing throughput while the ore grade at the Lucky Friday mine has improved approximately 10% as a result of grade control measures. In addition, we have also benefited from higher by-product metal prices. I am excited that we have announced a second reduction in our cost guidance and I am confident that we should have full-year cash costs below $3.00 per ounce. These are important achievements and I believe that the location of our mines in the U.S., Hecla’s leverage to a rising silver price and the cash flow generation that we are seeing today makes Hecla an attractive investment.”
EXPLORATION
As part of Hecla’s commitment to grow its production and reserves in its four district-controlling land packages, Hecla has expanded planned exploration expenditures almost 40% to $9.5 million for the year with $7 million being spent in the second half of 2009.
Surface drilling is already underway on the Northeast Contact target at the Greens Creek mine, on the Vindicator property east of the Lucky Friday mine and on the Bulldog vein which is part of the San Juan joint venture in Colorado where Hecla owns a 70% interest.
