Yenra : Jewelry : Silver Mining : 28 Million Ounces of Silver

Silver Mine

Hecla Mining Company has made a development decision to drive a 5,500-foot drift on the 5900 level of the Lucky Friday silver mine in northern Idaho.

The development drift is expected to cost approximately $8 million, and should give Hecla access to another 28 million ounces of silver. The new development will allow the mine to double production up to 4 million ounces of silver annually. Production from the new level is expected to begin in late 2005, with anticipated cash costs of production of less than $4.50 per ounce of silver.

Hecla President and Chief Executive Officer Phillips S. Baker, Jr., says, "We are optimistic about future higher silver prices. However, it is because our people at Lucky Friday have done a great job of decreasing costs and creating a plan that makes sense economically that we are able to proceed with the development of the new level at this time. For approximately $8 million of initial capital, we'll be nearly doubling our annual production from this mine through 2011. This new development level will also give us an excellent platform for future exploration at Lucky Friday, giving us more time to enlarge the resource at a better grade of ore that can be mined even more profitably." Baker says there should be no interruption of production at the Lucky Friday with the current development schedule. With a minor capital investment, there is ample capacity in the tailings pond and in the processing mill to handle the expanded production. In addition, says Baker, "Driving the 5900 drift positions us to develop resources in the future which could give us access to more mineable ounces of silver after this current plan is completed."

A diamond drilling program was executed this year to minimize the risk associated with the deeper drive. Encouraging results included confirming the existence of the vein at the 5900 level, with a possibly increasing grade of ore. The competence of the wall rock also appears to be improving compared to current mining areas. Preproduction development, which will begin in January, will include two ventilation raises connecting the new level to the raises on the 4900 level. Excavation of ore passes and chutes, electrical cutouts, a maintenance shop and a chiller station would also be part of the preproduction development. The area where the new drift will be driven is approximately one mile north of the Lucky Friday shaft. The drift is expected to reach the vein by the summer of 2005. Historically, Hecla has already produced 20 million ounces of silver from this area since 1997, giving the company a good understanding of the vein character. Hecla has been operating the Lucky Friday mine for 45 years. During its life, the mine has produced over 127 million ounces of silver to date.

The Lucky Friday mine currently employs 94 people. When the new development drift is completed and full production is reached, the mine will increase employment by up to 50%. The Lucky Friday union, United Steelworkers Local 5114, recently approved a five and a half-year labor contract.

Hecla Mining Company mines and processes silver and gold in the United States, Venezuela and Mexico.