“The fourth quarter and year-end results were record setting in a number of areas, reflecting increased throughput and low costs at our Greens Creek and Lucky Friday operations, and strong metals prices,” said Hecla’s President and Chief Executive Officer, Phillips S. Baker, Jr.

In spite of higher mine and mill throughput at both Greens Creek and Lucky Friday, silver production decreased slightly in 2010 due to lower silver ore grades at both operations, which was anticipated. However, production of lead and zinc, which are important by-products, increased to record levels in 2010 due to higher grades and ore volumes. Fourth quarter silver production was higher compared to a year ago mainly due to higher milled tonnage.

Full-year silver production at Greens Creek was 7.2 million ounces, which included 1.9 million ounces in the fourth quarter, in comparison to 7.5 million ounces and 1.5 million ounces, respectively, in the same periods in 2009. Lower silver grades, along with the higher zinc and lead ore grades, were expected at the Southeast Alaska mine and are due to differences in the sequencing of production according to the mine plan. The increase in silver production in the fourth quarter over the same period in 2009 is attributable to higher silver, gold, lead and zinc grades and recoveries, and increased mill throughput. The company said it is working to optimize mill capacity at Greens Creek and has successfully increased throughput by about 10 percent since 2008 to 2,200 tons per day, and will work towards increasing throughput to 2,250 tons per day in 2011.

Total cash cost at Greens Creek for the full year was negative US$3.90 per ounce, and was negative US$1.93 per ounce for the fourth quarter, net of by-product credits, compared to US35 cents and negative US$4.85 per ounce, respectively, for the same periods in 2009. The increase in total cash cost in the fourth quarter over the same period in 2009 is due in part to lower by-product credits. The total decrease in cash cost per ounce of silver produced year-over-year was primarily due to increased by-product production credits, partially offset by higher treatment and freight costs, production costs, and production taxes. The higher treatment and freight costs in 2010 are due to increased price participation charges by smelters.

Full-year silver production at Lucky Friday was 3.4 million ounces and 819,317 ounces in the fourth quarter, compared to 3.5 million ounces and 865,595 ounces, in the respective periods in 2009. The overall decrease in production year-over-year and quarter-over-quarter is primarily due to an expected lower silver ore grade. The operation achieved record lead and zinc production in 2010 with 21,619 tons and 9,286 tons, respectively, which included 5,356 tons and 2,214 tons, respectively, in the fourth quarter.

Total cash cost at Lucky Friday for the full year was US$3.76 per ounce, net of by-product credits and US$4.06 per ounce in the fourth quarter, net of by-product credits, in comparison to US$5.21 and US$3.10 per ounce, respectively, for the same periods in 2009.

Hecla’s realized metals prices increased significantly in 2010. The average realized price for silver in 2010 was US$22.70 an ounce, a jump of 45 percent over the US$15.63 realized the year earlier. The company averaged US$1,225 per ounce of gold last year, a 26 percent increase over the US$973 realized in 2009. Hecla received an average of US96 cents per pound of zinc in 2010, up nearly 7 percent from the US90 cents realized in 2009. Similarly, Hecla averaged US98 cents per pound of lead in 201, a rise of 11 percent over the US88 cents averaged the previous year.

Hecla expects silver production in 2011 to range between 9 and 10 million ounces, slightly lower than 2010. Total cash cost is forecast to be about zero dollars per ounce of silver produced, after by-product credits, at current metals prices (US$1,350 per ounce of gold, and US$1.05 per pound of lead and zinc). The company said silver production is expected to increase in 2012 as grades increase at Greens Creek and Lucky Friday.

Capital expenditures in 2011 are expected to be about US$100 million, compared to US$72.7 million in 2010. Hecla expects to spend around US$27 million in exploration in 2011.

Full-year capital expenditures incurred at Lucky Friday were US$54.4 million, the majority of which were on the No. 4 Shaft Project. Full year expenditures incurred at Greens Creek were US$18.3 million.

Hecla’s exploration expenditures for the fourth quarter and full year 2010 were US$5.4 million and US$21.6 million, respectively. The company reports that it achieved the highest level of silver reserves and resources in its history with 142 million ounces and 248 million ounces, respectively. Updated reserves and resources at Dec. 31 also include gold reserves and resources of 757,000 ounces and 450,700 ounces, respectively; lead reserves and resources of 556,200 tons and 1.2 million tons, respectively; and zinc reserves and resources of 859,000 tons and 831,900 tons, respectively.

Baker said, “One of our key areas of focus in 2011 will be to work towards enhancing our production pipeline through our aggressive exploration program in the four districts we dominate, and to bring new assets into the company via mergers and acquisitions. In addition to the development of the No. 4 Shaft Project at our Lucky Friday operation, which is expected to provide production growth beyond 2015, we are working towards increasing near-term and future production.”

“After considering all investing and financing activities, we generated $178.9 million in net cash flow last year. Our strong balance sheet and growing cash flow should be sufficient to meet our financial obligations of a potential Basin litigation settlement, as well as continuing to fund capital projects to expand our operations and explore our large land packages in the U.S. and Mexico.”

Additionally, Hecla said its negotiators, along with mediators for the United States, the Coeur d’Alene Indian Tribe, and the State of Idaho with respect to the Coeur d’Alene Basin environmental litigation and related claims have reached an understanding on proposed financial terms to be incorporated into a comprehensive settlement that would contain additional terms yet to be negotiated.

On Feb. 18 the Idaho Federal District Court issued an order giving the parties to the litigation until April 15 to inform the court of the status of settlement negotiations. During this time period, the negotiators will work towards finalizing and agreeing to the settlement terms. If the parties are able to complete terms of settlement, it is expected that a consent decree would be lodged, followed by a public comment period of 30 days and a period for responses to those public comments. The consent decree would also require approval by the Idaho Federal District Court. If the consent decree is entered, Hecla would make the following payments:

• US$102 million of cash and US $55.5 million of cash or stock 30 days after entry of the consent decree;

• US$25 million of cash 30 days after the first anniversary of entry of the consent decree;

• US$15 million of cash 30 days after the second anniversary of entry of the consent decree;

• US$65.9 million by August 2014, as quarterly payments of the proceeds from the exercise of any outstanding Series 1 and Series 3 warrants (which have an exercise price of between US$2.45 and US$2.50 per share) during the quarter, with the balance of the US$65.9 million due in August 2014 (regardless of the amount of warrants that have been exercised).

“Determining the financial terms of any settlement of this longstanding litigation is an important step forward in finally resolving this dispute,” Baker said. “While the cost is significant, we believe the terms are consistent with both our current plans and adding opportunities that will allow Hecla to grow further. We hope a final settlement can be achieved by the end of the second quarter.”