Hecla Mining expands Lucky Friday silver mine

Fresh from a profitable second quarter, Hecla Mining (HL-N) reports exploration success at its Lucky Friday mine in Idaho.

The company has 20 intercepts in the Gold Hunter vein, 4,000 ft. northwest of the mine’s underground workings. Each intercept encountered material grading up to 46 oz. silver per ton, with widths of up to 12 ft. The main vein has a drill-indicated resource grading 21 oz. silver — twice the minable grade and width of Lucky Friday. The extra width is expected to result in more efficient mining and less dilution.

The deposit is open at depth to the east and west. In addition, two lower-grade veins have been located in a new area.

Hecla has drifted 450 ft. along the Gold Hunter vein, and test milling indicates the material is similar to Lucky Friday’s ores. The mill should be able to produce silver at a recovery rate of 95%.

Meanwhile, in southeastern Alaska, Hecla and Kennecott have resumed operations at the Greens Creek polymetallic mine.

Low metal prices forced the closure of the mine two years ago, but the discovery of a new mineralized zone to the southeast has led to an increase in silver reserves. With a 30% stake in the operation, Hecla’s share is nearly 50 million oz. silver, in addition to 400,000 oz. gold and substantial amounts of lead and zinc.

The deposit remains open to the southwest and downdip, and an agreement with the U.S. Forest Service will allow the joint venture to explore an additional 7,500 acres around the mine.

For the second quarter, Hecla posted a net income of US$788,000 (or 2 cents per share) on revenue of US$41.2 million, compared with US$229,000 (1 cents per share) on US$43.1 million for the same period in 1995.

For the first half of this year, the company earned US$251,000 on revenue of US$84.8 million, compared with a net loss of US$4.2 million (9 cents per share) on US$80.2 million for the same period last year.

Earnings in the recent second quarter were offset by the suspension of operations at the Grouse Creek gold mine in Idaho, where production was halted for two months during construction of a larger tailings impoundment.

Operations there resumed July 15, and full production is expected in August.

The joint venture will mine the Sunbeam deposit until it is depleted in the second quarter of 1997. A decision on whether to continue operations beyond that time will be made before the end of the year.