Lucky Friday returned to normal operations on
October 1 with upgraded ventilation system
Hecla Mining Company (NYSE:HL) today announced preliminary
production results¹ for the third quarter 2015.
HIGHLIGHTS
- Silver production of 2,591,546
ounces.
- Gold production of 43,635 ounces.
- Silver equivalent production of 8.7
million ounces.2
- Zinc production of 17,435 tons and lead
production of 9,123 tons.
- Production decision made at San
Sebastian project in Mexico and stripping on the Middle Vein has
begun.
- 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.
“Greens Creek continues to drive Hecla’s strong, consistent
production performance,” said Phillips S. Baker, Jr., Hecla’s
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.”
(1) See cautionary statement regarding preliminary statements at
the end of this release.
(2) Silver equivalent calculations based on the following
prices: $17.25 for Ag, $1,225 for Au, $0.90 for Pb, and $1.00 for
Zn.
Greens Creek
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).
Lucky Friday
Lucky Friday’s third quarter silver production of 592,243 ounces
was 39% lower than the third quarter of 2014 due to lower tonnage
and grade. 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.
Casa Berardi
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
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.
Production Results
Third Quarter Ended Nine Months
Ended
September 30,
2015
September 30,
2014
September 30,
2015
September 30,
2014
PRODUCTION
Increase
(Decrease)
Increase
(Decrease)
Silver 2,591,546 oz. 2,869,722 oz.
(9.7)% 7,947,293 oz. 7,877,410 oz.
0.9%
Gold 43,635 oz. 42,501 oz.
2.7% 128,977
oz. 132,323 oz.
(2.5)% Lead 9,123 tons
10,604 tons
(14)% 28,526 tons 30,468 tons
(6.4)% Zinc 17,435 tons 16,276 tons
7.1% 51,037 tons 50,750 tons
0.6% Greens
Creek (Silver) 1,992,037 oz. 1,890,929 oz.
5.3%
5,884,128 oz. 5,367,249 oz.
9.6% Greens Creek
(Gold) 14,376 oz. 13,524 oz.
6.3% 43,368
oz. 43,464 oz.
(0.2)% Lucky Friday (Silver)
592,243 oz. 972,994 oz.
(39)% 2,042,436 oz.
2,493,385 oz.
(18)% Casa Berardi (Gold) 29,259
oz. 28,977 oz.
1.0% 85,609 oz. 88,859 oz.
(3.7)%
(1) The production, capital and cash flow estimates are derived
from the preliminary economic assessment (PEA) that is underway.
The PEA is preliminary in nature, and is based on a mineral
resource estimate that includes inferred mineral resources
(approximately 10% of projected production) that are considered too
speculative geologically to have the economic considerations
applied to them that would enable them to be categorized as mineral
reserves, and there is no certainty that the PEA will be realized.
Mineral resources that are not mineral reserves do not have
demonstrated economic viability. Results quoted assume $1,103/oz
gold and $15.53/oz silver prices and a 12.5 Peso/Dollar exchange
rate. The PEA is expected to be completed by the end of October and
the Company does not expect any changes in the PEA to materially
affect the potential viability of the project.
Hecla expects to report third quarter financial results on
November 4, 2015.
About Hecla
Hecla Mining Company (NYSE:HL) is a leading low-cost U.S. silver
producer with operating mines in Alaska and Idaho, and is a gold
producer with an operating mine in Quebec, Canada. The Company also
has exploration and pre-development properties in six world-class
silver and gold mining districts in the U.S., Canada, and Mexico,
and an exploration office and investments in early-stage silver
exploration projects in Canada.
Cautionary Statements Regarding Preliminary Results
All measures of the Company's third quarter 2015 operational
results are preliminary and reflect the Company’s expected third
quarter 2015 results as of the date of this news release. Actual
reported third quarter results are subject to management's final
review as well as review by the Company's independent registered
public accounting firm and may vary significantly from those
expectations because of a number of factors, including, without
limitation, additional or revised information and changes in
accounting standards or policies or in how those standards are
applied.
Cautionary Statements Regarding Forward Looking
Statements
Statements made or information provided in this news release
that are not historical facts are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995 and "forward-looking information" within the meaning of
Canadian securities laws. Words such as “may”, “will”, “should”,
“expects”, “intends”, “projects”, “believes”, “estimates”,
“targets”, “anticipates” and similar expressions are used to
identify these forward-looking statements. Such forward-looking
statements or forward-looking information include statements or
information regarding estimates of annual and third quarter of 2015
silver production on a consolidated basis and at each of the Greens
Creek and Lucky Friday mines, annual and third quarter of 2015 gold
production at Casa Berardi and results of the PEA for San
Sebastian. The material factors or assumptions used to develop such
forward-looking statements or forward-looking information include
that the Company’s plans for development and production will
proceed as expected and will not require revision as a result of
risks or uncertainties, whether known, unknown or unanticipated, to
which the Company’s operations are subject.
Forward-looking statements 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, litigation,
regulatory and environmental 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.
Qualified Person (QP) Pursuant to Canadian National
Instrument 43-101
Dean McDonald, PhD. P.Geo., Senior Vice President - Exploration
of Hecla Mining Company, who serves as a Qualified Person under
National Instrument 43-101, supervised the preparation of the
scientific and technical information concerning Hecla’s mineral
projects in this news release. Information regarding data
verification, surveys and investigations, quality assurance program
and quality control measures and a summary of sample, analytical or
testing procedures for the Greens Creek Mine are contained in a
technical report prepared for Hecla and Aurizon Mines Ltd. titled
“Technical Report for the Greens Creek Mine, Juneau, Alaska, USA”
effective date March 28, 2013, and for the Lucky Friday Mine are
contained in a technical report prepared for Hecla titled
“Technical Report on the Lucky Friday Mine Shoshone County, Idaho,
USA” effective date April 2, 2014, and for the Casa Berardi Mine
are contained in a technical report prepared for Hecla titled
"Technical Report on the Mineral Resource and Mineral Reserve
Estimate for the Casa Berardi Mine, Northwestern Quebec, Canada"
effective date March 31, 2014 (the "Casa Berardi Technical
Report"). Also included in these three technical reports is a
description of the key assumptions, parameters and methods used to
estimate mineral reserves and resources and a general discussion of
the extent to which the estimates may be affected by any known
environmental, permitting, legal, title, taxation, socio-political,
marketing or other relevant factors. Copies of these technical
reports are available under Hecla's profile on SEDAR at
www.sedar.com.
Cautionary Statements to Investors on Reserves and
Resources
Reporting requirements in the United States for disclosure of
mineral properties are governed by the SEC and included in the
SEC's Securities Act Industry Guide 7, entitled “Description of
Property by Issuers Engaged or to be Engaged in Significant Mining
Operations” (“Guide 7”). However, the Company is also a "reporting
issuer" under Canadian securities laws, which require estimates of
mineral resources and reserves to be prepared in accordance with
Canadian National Instrument 43-101 (“NI 43-101”). NI 43-101
requires all disclosure of estimates of potential mineral resources
and reserves to be disclosed in accordance with its requirements.
Such Canadian information is being included here to satisfy the
Company's “public disclosure” obligations under Regulation FD of
the SEC and to provide U.S. holders with ready access to
information publicly available in Canada.
Reporting requirements in the United States for disclosure of
mineral properties under Guide 7 and the requirements in Canada
under NI 43-101 standards are substantially different. This
document contains a summary of certain estimates of the Company,
not only of proven and probable reserves within the meaning of
Guide 7, which requires the preparation of a “final” or “bankable”
feasibility study demonstrating the economic feasibility of mining
and processing the mineralization using the three-year historical
average price for any reserve or cash flow analysis to designate
reserves and that the primary environmental analysis or report be
filed with the appropriate governmental authority, but also of
mineral resource and mineral reserve estimates estimated in
accordance with the definitional standards of the Canadian
Institute of Mining, Metallurgy and Petroleum referred to in NI
43-101. The terms “measured resources”, "indicated resources," and
"inferred resources" are Canadian mining terms as defined in
accordance with NI 43-101. These terms are not defined under Guide
7 and are not normally permitted to be used in reports and
registration statements filed with the SEC in the United States,
except where required to be disclosed by foreign law.
Investors are cautioned not to assume that any part or all of the
mineral deposits in such categories will ever be converted into
proven or probable reserves. “Resources” have a great amount of
uncertainty as to their existence, and great uncertainty as to
their economic and legal feasibility. It cannot be assumed that all
or any part of such a "resource” will ever be upgraded to a higher
category or will ever be economically extracted. Investors are
cautioned not to assume that all or any part of a "resource” exists
or is economically or legally mineable. Investors are also
especially cautioned that the mere fact that such resources may be
referred to in ounces of silver and/or gold, rather than in tons of
mineralization and grades of silver and/or gold estimated per ton,
is not an indication that such material will ever result in mined
ore which is processed into commercial silver or gold.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151020005577/en/
Hecla Mining CompanyVice President - Investor RelationsMike
Westerlund, 800-HECLA91
(800-432-5291)hmc-info@hecla-mining.comwww.hecla-mining.com
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