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Vol. 22, No. 33 Week of August 13, 2017
Providing coverage of Alaska and Northwest Canada's mineral industry

Mining News: 21st Century mine

Cutting edge innovation, exploration success ensuring Greens Creek future

Shane Lasley

Mining News

After nearly three decades of operation, Hecla Mining Company’s Greens Creek Mine in Southeast Alaska continues to rank among the largest and lowest cost primary silver mines on Earth.

On pace to produce between 7.5 and 8 million ounces of silver at a cost of around US$2.50/oz during 2017, Greens Creek is also the cash generating engine that powers Hecla.

“Greens Creek continues to be the dominant source of revenue,” said Hecla Mining CFO Lindsay Hall, during an Aug. 3 presentation.

Increasing zinc and lead prices, along with steady gold prices, is helping to push down silver production costs at Greens Creek this year.

“We've seen a nice increase in the zinc and lead prices, which represent about 20 percent of our revenue,” Hecla Mining President and CEO Phil Baker said.

During the first six months of 2017, Greens Creek produced 3.86 million oz silver at a cost of only US$1.26/oz after crediting the value of the 26,726 oz gold, 52.74 million pounds zinc and 18.46 million lb lead also recovered during that period.

The all-in sustaining cost – which includes in-direct costs such as depreciation, depletion and amortization – for producing an ounce of silver at Greens Creek during the first half of the year was US$6.28/oz.

Thanks to the implementation of 21st Century technologies, such as high-speed wireless and semi-autonomous mining equipment, alongside the success of traditional drilling, this Southeast Alaska mine looks like it will maintain its silver legacy for decades to come.

Cutting edge technologies

The centerpiece of the cutting edge mining technologies being implemented at Greens Creek is a high-speed wireless data transfer system that includes miles of communication cables and 70 wireless hotspots connecting the working areas of the underground mine.

Hecla said this connectivity provides real-time data on where every person and piece of equipment is located, and alerting workers when they are near each other, increasing safety and efficiency.

“This system has enabled management to make better-informed decisions based on real-time information from the underground operations,” the company penned in its annual report. “We’re also able to monitor the operating environment, reduce accidents, and ensure proper equipment performance.”

The wireless system also enables crews to operate fully remote and semi-autonomous mining equipment from the surface.

While this may sound futuristic, Hecla already has a remotely operated semi-autonomous long-haul dump loader operating during shift changes at Greens Creek.

With two shift changes a day, each taking about two hours, this avant-garde piece of equipment can add extra hours of ore hauling every day at the underground operation.

An operator sitting behind a bank of computer monitors on the surface runs the LHD on the first pass, teaching the machine where to load and dump, and then the loader repeats the process.

“The LHD has successfully been operated remotely from surface in a long-haul application, mucking by itself and hauling to an ore pass, all automatically, with the operator simply pressing the button on each cycle to continue mucking,” Larry Radford, senior vice president, operations, explained.

The company says that the autonomous LHD, which has proximity detectors that prevent it from running into other objects, is able to operate quicker without running into walls than a man-operated loader.

While the LHD is already increasing productivity by hauling ore between crews, Radford said the company is looking into other applications for the machine that could make underground mining at Greens Creek even more efficient.

“We are studying the application of the unit to drift and fill stopes, with the goal of having faces ready for the entry of the bolter at the start of the shift. Bolting is generally the bottleneck in the mine,” he added.

Hecla is also using the wireless underground connectivity to automate the ventilation system, allowing ventilation to adjust to the requirements of the people and equipment in specific areas of the mine. This customized ventilation is expected to increase energy efficiency by 11 percent.

While maybe not as exciting as a wired underground with a loader hauling ore by itself, a recently installed a Woodgrove flotation reactor in the lead bulk circuit is increasing the distribution of metals to concentrates, and the value of the concentrates.

“The commissioning has gone well, and we expect to benefit in the form of increasing revenues in the second half of the year, particularly in the fourth quarter, with the goal of driving the metals to the bulk concentrate for which there are better smelter terms,” Radford said.

With the success of this first unit, the VP of operations said the company is considering adding similar flotation reactors to both lead and zinc circuits.

Exploring Greens Creek’s future

Considering the ongoing exploration success, Hecla will be getting returns from its innovative improvements at Greens Creek well into the 21st Century.

“Drilling at Greens Creek is upgrading resources to reserves, confirming our understanding of the mineralized trends and discovering new mineralization,” Baker summarized.

Going into 2017, Greens Creek had 7.6 million tons of proven and probable reserves averaging 11.7 ounces per ton (88.9 million oz) silver; 0.09 oz/t (673,000 oz) gold; 7.6 percent (576,130 tons) zinc; and 2.9 percent (217,280 tons) lead.

This is enough ore to last the mine roughly a decade and is nearly identical to the reserves going into 2016, meaning exploration is continuing to add as much ore as is being mined at Greens Creek.

The mine also hosts 19.3 million oz silver and 154,000 oz of gold in measured and indicated resource; and 40.2 million oz of silver and 285,000 oz of gold in inferred resource.

With roughly 80 percent of the resources historically being converted to reserves at Greens Creek, extending the mine beyond 2030 seems probable.

This year, definition drilling is aiming to convert resources in the East Ore, 9A, West and Southwest Bench zones to reserves.

Located near the mine portal, the 9A and East Ore and West zones are compelling target for building reserves.

East Ore hosts 510,100 oz silver and 5,500 oz gold in indicated resource; and 12.6 million oz silver and 112,000 oz gold in the inferred category.

Hecla said the 2017 drilling at East Ore compares favorably to previously modeled resource estimates at higher elevations, which has the potential to expand the resource.

Highlighted East Ore intercepts include 33.8 oz/ton silver, 0.11 oz/ton gold, 3.2 percent zinc and 1 percent lead over 11.9 feet; and 29.7 oz/ton silver, 0.07 oz/ton gold, 1.8 percent zinc, and 1 percent lead over 5.4 feet.

Highlights from drilling at 9A, a narrower zone adjacent to and southwest of East, include 52.1 oz/ton silver, 0.03 oz/ton gold, 10.5 percent zinc and 5.3 percent lead over 21.7 feet; 60.5 oz/ton silver, 0.02 oz/ton gold, 15.1 percent zinc and 7.3 percent lead over 14 feet; and 27.5 oz/ton silver, 0.03 oz/ton gold, 15.8 percent zinc, and 7.9 percent lead over 8.2 feet.

Additionally, drilling indicates a high-grade expansion of the West zone, where one hole cut 643.5 oz/ton silver, 1.8 oz/ton gold, 14.9 percent zinc, and 7.8 percent lead over 4.8 feet; and another cut 31.7 oz/ton silver, 0.21 oz/ton gold, 13.6 percent zinc, and 6.5 percent lead over 4.6 feet.

Hecla said these resources are immediately available to existing ramps.

Drilling at Deep Southwest identified mineralization that extends north of previous mining in the zone and down to the upper limb of the NWW. One hole cut 47.2 oz/ton silver, 0.22 oz/ton gold, 4.3 percent zinc, and 2 percent lead over 7.9 feet.

In addition to underground drilling, Hecla is carrying out a planned 21,000-foot surface exploration program at Greens Creek in 2017.

This program, which got underway in June, is targeting the Gallagher, East Ore and 5250 zones from surface.

One of the first holes of the 2017 surface program cut a mineralized zone up to 100-feet thick the flat-lying Klaus Shear more than 1,500 feet west of ore zones at Greens Creek, indicating extensions of the known mineralization.

With more than 30 miles of horizon where mineralization has been identified and projected along the surface of the 23-square-mile land package, there are ample opportunities to discover resources and delineate reserves that will extend Greens Creek even further into the 21st Century.



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