Idaho-based Hecla Mining (HL-N) has announced that it plans to lay off 147 workers and cut production at its Lucky Friday silver mine in northern Idaho, due to low silver and lead prices.
The company will decrease the number of workers at the mine from 189 to 42 by January 2002. Job placement services and severance pay will be offered to the affected employees.
Production at the mine will be scaled back by October. It will total about 3.5 million oz. silver by the year’s end. The mine was originally slated to crank out 4.5 million oz. this year.
Production will be slashed by another 1.2 million oz. next year. Assuming no further deterioration of metal prices, it should remain at that level for about two years.
The working faces on the Lucky Friday Main vein and in the Gold Hunter vein expansion area will continue to operate. However, there will be no primary development into new areas and secondary development will be limited to two working faces in the expansion area.
“We’ve been operating Lucky Friday for over 40 years and today it has more identified resources than at any time in its history,” says Arthur Brown, Hecla’s CEO. “We have shut it down in the past because of low silver prices and I’m anticipating that this venerable mine will once again see full activity when the price cycle changes.”
In 2000, Lucky Friday produced 5 million oz. silver, up from 4.4 million oz. in the previous year, though total cash costs were US$5.02 per oz. silver at a time when the price of the metal was below US$4.50 per oz.
Hecla shares were off US2 at US$1.13 on the New York Stock Exchange in late afternoon trading on Wednesday. They trade in a 52-week range of between US$1.70 and US50.
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