Hecla Mining lands private placement

Denver — Hecla Mining (HL-N) has completed a US$5.5-million private placement, using money from its pension plan.

The pension plan has assets of more than US$55 million, surpassing its projected obligations by US$18 million.

In the transaction, the pension plan received 5.7 million shares of common stock. The shares are restricted from trading for one year. An independent fiduciary consultant deemed the private placement appropriate.

The transaction shores up Hecla’s balance sheet, providing cash for the future.

Meanwhile, the company continues to cut costs. In July, it announced it would reduce operations at the Lucky Friday silver mine, which has been mining in northern Idaho since 1942. The underground mine expects to produce 3.5 million oz. for the year, down from expectations of 4.5 million oz. Production in 2002 should fall to 1.2 million oz. Employment at the mine will drop to 42, down from 189 people.

Meanwhile, Hecla has reached a settlement with the federal government and the state of Idaho concerning damages and cleanup costs around operations in the Silver Valley of northern Idaho, and around smaller gold operations in the central part of the state.

Under the settlement, Hecla agreed to payments and clean-up obligations of US$5 million in the first two years, increasing to US$6 million over the next eight, plus further commitments of US$4 million per year over the following 20 years.