Hecla Mining Co. President and CEO Phillips S. Baker, Jr. said, ‘Hecla is a different company today than any time in the past. We are seeing the effect of owning all of Greens Creek for a full year with record production of silver, lead and zinc. This higher production combined with metals prices allowed Hecla to generate more operating cash than any time in our history. And we ended the year with almost US$105 million in cash and no debt. The future looks bright as we replaced mined material and increased silver reserves to 140 million ounces. This increase over last year’s record reserve comes from almost doubling silver reserves at the Lucky Friday mine as the grade increases at depth. With our increased production, low-cost structure at long-lived mines, we expect Hecla to generate significant cash flow that can be deployed to continue reserve and production growth.”

Hecla reported net income of US$67.8 million, or US24 cents per share in 2009, compared with a net loss of US$66.6 million, or US57 cents per share in 2008. Including dividends to holders of its preferred shares, Hecla reported net income of US$54.2 million in 2009, compared to a loss of US$80.2 million in 2008. Record cash flow of $115 million was generated from operating activities in 2009.

In the fourth quarter of 2009, Hecla repaid the remaining balance on the term loan used to acquire the remaining 70.3 percent interest in the Greens Creek mine in April 2008. The repayment of US$38.3 million was made from cash on hand. Hecla also entered into a three-year, US$60 million senior-secured credit facility; the facility is fully available as no draws have been made to debt.

Hecla said it produced a record 10.9 million ounces of silver in 2009 at a cash cost of US$1.91 per ounce, after by-product credits. This compares to 8.7 million ounces of silver production in 2008 at a cash cost of US$4.20 per ounce. The 26 percent increase in silver production is the result of improved productivity at both operations and higher silver grades at the Lucky Friday mine compared to the previous year. Hecla increased its ownership in the Greens Creek mine from 29.7 percent to 100 percent in April 2008.

Cash costs for silver steadily improved during the year from US$4.67 per ounce in the first quarter of 2009 to negative US$2.00 per ounce in the fourth quarter of 2009. The decrease in cash costs during the year is attributed to increased production, improved prices for by-product credits and lower prices for some consumables. Hecla believes it continues to be one of the lowest-cost primary silver producers in the world.

By-product metal production totaled 67,278 ounces of gold, 80,995 tons of zinc and 44,263 tons of lead in 2009 compared to 54,650 ounces of gold, 61,441 tons of zinc and 35,023 tons of lead in 2008. Production of zinc and lead in 2009 achieved new records for Hecla. By-product metal production for gold, zinc and lead increased 23 percent, 32 percent and 26 percent, respectively in 2009 compared to production results in 2008.

At the Greens Creek mine in Alaska, Hecla produced 7.5 million ounces of silver in 2009, at an average total cash cost per ounce of US35 cents, compared to pro-forma production of 7.1 million ounces of silver at an average total cash cost per ounce of US$3.29 in 2008. Hecla's share of silver production from the Greens Creek mine in 2008 was 5.8 million ounces, reflecting its 29.7 percent ownership interest through April 16, 2008. The decrease in cash costs in 2009 compared to 2008 is the result of increased throughput, increased availability and use of hydroelectric power and lower prices for some consumable products, primarily diesel fuel. In 2009, the mine also produced 67,278 ounces of gold, 70,379 tons of zinc and 22,253 tons of lead.

Milled tonnage averaged 2,167 tons per day, or 8 percent higher than production in 2008. Optimizing production volume and continued success synchronizing production, back-fill and development activities helped to achieve goals in each area leading to increased production and reduced unit operating costs. Unit operating costs for mining and milling in 2009 were US$65.55 per ton, or 18 percent lower than unit costs in 2008.

“Our Greens Creek team did a superb job to increase mine and mill throughput which is a key to lowering unit costs and maximizing the potential of the mine. But the increase was not at the expense of the future as backfill and development also exceeded 2008 levels. Throughput in 2009 increased almost 10 percent compared with 2008 and is a major step in our efforts to increase annual throughput another 7 percent over the next three years,” Baker said,

During 2009, US$17.5 million was capitalized for underground development and purchases of new mobile equipment at the Greens Creek mine and for other non-cash additions.

At the Lucky Friday mine in northern Idaho the company produced 3.5 million ounces of silver in 2009, a 23 percent increase over 2008 production of 2.9 million ounces. Average total cash costs in 2009 were US$5.21 per ounce after by-product credits, or 14 percent lower than average total cash costs of US$6.06 per ounce in 2008. The Lucky Friday mine production reached an all-time high of 346,395 tons or 952 tons per day, an improvement of 9 percent compared with 2008. In addition, the operation set new monthly and quarterly records for tons processed while metal recoveries of all three metals and concentrate quality improved. The mine also produced 22,010 tons of lead and 10,616 tons of zinc in 2009, which compares with production of 18,393 tons of lead and 9,386 tons of zinc in 2008.

Hecla spent US$9.3 million on exploration in 2009. Hecla controls large land positions in Alaska, Colorado, Idaho and Mexico. Drill programs were completed in each of these areas with emphasis on Greens Creek in Alaska and Lucky Friday in Idaho.

Hecla completed about 39,000 feet, or 11,900 meters, of underground in-fill and exploration drilling in 2009. The drilling tested the peripheries of known zones including the 5250, Deep 200 South and the NWW-South in the mine resulting in a replacement of tons mined during 2009. Hecla continues to be encouraged with the NE contact, a relatively new target area that is located adjacent to mine infrastructure. Five exploration holes, including three from surface drilled through the targeted contact horizon encountering disseminated and stringer mineralization in highly altered rocks with local intervals of low grade silver mineralization. The last drill hole in the program intersected massive and semi-massive pyrite mineralization over a 20-foot interval and suggests proximity to a new massive sulfide body.

Hecla is forecasting 10 million to 11 million ounces of silver production in 2010. At current prices for by-product credits, Hecla expects full-year production cash costs to be in a range of US$1.90-US$2.25 per ounce of silver. In 2010, capital costs are expected to be between US$50 million-US$60 million and exploration expenditures are currently expected to be around US$18 million. The company said these estimates may be adjusted as programs develop.