The largest of these targets is the Llanitos zone — a 3-by-1-km zone of alteration associated with a northwesterly trending fault.
The other targets are the Cacique Central and Cacique Norte zones, which, combined, cover 1,200 ha. They are situated 15 km southeast of the Refugio gold mine of Kinross Gold, and occur along a ring of deposits around the Joabeche volcanic complex. Mineralization is hosted in andesitic and dacitic rocks, associated with veins and hydrothermal breccias.
Previous drilling encountered significant intervals of mineralization, including:
- 46 metres grading 3.5 grams gold per tonne;
- 58 metres of 1.6 grams per tonne;
- 22 metres of 4 grams per tonne; and
- 60 metres of 1.1 grams per tonne.
In the meantime, Hecla is moving forward with a feasibility study on its Noche Buena gold project in Mexico’s Sonora state. To date, the company has completed 193 drillholes and identified a resource of 315,000 oz. contained in 11.5 million tons grading 0.027 oz. gold.
Hecla expects to move much of the mineralization into the reserve category, while continuing to drill stepout and leach-pad condemnation holes. The company expects to complete the study by summer.
The company owns a 70% interest in Noche Buena, with the remainder held by Dakota Mining. Noche Buena is 40 km south of Hecla’s La Choya gold mine, which was mined out in December 1998.
Closer to home, in west-central Nevada, Hecla has picked up the Sunset gold property, where previous drilling encountered high-grade intercepts. The company has already drilled four holes at Sunset and expects to resume the program later this year.
Drilling is under way at Hecla’s 50%-owned Rosebud gold mine, also in Nevada, at the Lucky Friday silver mine in Idaho, and the 29.7%-owned Greens Creek mine in Alaska.
In 1998, Hecla produced 7.2 million oz. silver and 127,433 oz. gold. Silver production climbed 41% from the previous year as a result of an expansion program at Lucky Friday, though gold production was off 27% because of the closure of La Choya. Cash production costs remained low for Hecla, at US$183 per oz. gold.
Reserves at the end of 1998 stood at 64.6 million oz. silver and 506,750 oz. gold, compared with 68.4 million oz. silver and 613,500 oz. gold at the end of 1997.
Hecla posted a loss of US$7.5 million (or 14 cents per share) for the fourth quarter of 1998, compared with a loss of US$7 million (13 cents per share) for the corresponding period in 1997. For the year, the company incurred a loss of US$8.3 million (15 cents per share), compared with a loss of US$8.5 million (16 cents per share) in 1997.
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