Mining News: News Nuggets: Hecla posts 10th consecutive year of record reserves

Hecla Mining Company Feb. 16 reported 175 million ounces of silver in proven and probable reserves, marking the 10th straight year that exploration has resulted in record reserves for the company. The 1 percent annual increase in silver reserves comes despite the fact that prices used to calculate the reserves were lowered to US$14.50 per ounce silver, down from $17.25/oz. used the year before. The company’s measured and indicated silver resources decreased by 2 percent to 161 million oz.; and inferred silver resources increased by 147 percent with the acquisition of Revett Mining Company and its Rock Creek project in Montana. Hecla’s proven and probable gold reserves are essentially unchanged at 2.1 million oz. and measured and indicated gold resources decreased by only 1 percent. A US$1,100/oz. gold price was used to calculate reserves, down from the US$1,225 used last year. “Our mines continue to demonstrate their position amongst the highest quality silver mines in the world, adding silver reserves for the 10th consecutive year using one of the lowest price assumptions in the industry and after replacing the 11.6 million ounces of silver production,” said Hecla President and CEO Phillips Baker, Jr. “The strength of our mineral resources, particularly at Greens Creek, and the historically high conversion rate at all the mines, give us confidence that we can continue to add reserves in the coming years.” Greens Creek milled 814,397 short tons of ore containing nearly 11 million oz. of silver and 90,398 oz. of gold in 2015. The mine’s gold and silver reserves dropped 8 percent due to mining depletion and the significantly lower silver reserve prices relative to 2014 prices. Hecla points out that though infilling drilling was completed, the resource/reserve model for the NWW zone was not updated in time for 2015 year-end reporting. This zone includes 800,200 silver oz. and 13,000 gold oz. in the indicated category, and 18.5 million silver oz. and 91,700 gold oz. in the inferred category. The drilling results suggest a high proportion of this resource should convert to reserves. The NWW zone update should be completed during the first quarter of 2016 and is anticipated at minimum to replace in 2016 the current reserve deficit from 2015. Large inferred resources in the Deep 200 South (9.6 million silver oz. and 76,500 gold oz.) and East Ore (11.4 million silver oz. and 106,000 gold oz.) are targeted for infill drilling in 2016 and large portions are expected to be converted to reserves in 2016.

- Shane Lasley