Hecla revises ’02 forecasts

With its operations still exceeding expectations, Hecla Mining (HL-N) has once again increased its production forecast for the current year.

The Coeur d’Alene, Idaho-based silver miner now expects to have cranked out 8.2 million oz. silver and 235,000 oz. gold by the end of 2002. Attributable production in the first eight months of the year totalled 5.7 million oz. silver and 167,413 oz. gold.

The latest revision is 2.5% and 10% higher, respectively, than the last one, announced in mid-July. Total cash costs are now expected to fall to US$2.30 per oz. silver and US$140 per oz. gold, assuming prices for lead and zinc remain at current levels.

Hecla pulls its metals from the wholly owned La Camorra gold mine in Venezuela, the San Sebastian silver-gold mine in Mexico, the Lucky Friday silver-gold-lead-zinc mine in Idaho, and the 29.73%-owned Greens Creek silver-gold-zinc-lead mine in Alaska. Kennecott, a unit of Rio Tinto (RTP-N), holds the remaining stake in Greens Creek and is also the mine’s operator.

La Comorra accounts for most of Hecla’s gold production, whereas San Sebastian and Greens Creek, in roughly equal amounts, account for most of its silver. The Lucky Friday mine is expected to contribute about half as much silver as San Sebastian or Greens Creek.

In 2001, the mines contributed 7.4 million oz. silver, 197,742 oz. gold, 28,378 tons lead and 23,664 tons zinc to Hecla’s account. Total cash costs averaged US$3.52 per oz. silver and US$133 per oz. gold. Accounting and reclamation charges added US$1.52 and US$67, respectively, to the unit costs.

Meanwhile, near the San Sebastian mine, three of four exploration holes recently drilled in the Don Sergio vein returned 2 oz., 1.7 oz. and 0.36 oz. gold over 6.6-ft. horizontal widths. Although grades in the fourth hole were insignificant, the core suggests that the vein continues across a small fault.

San Sebastian exploits the Francine vein via a decline; near-surface reserves in four other veins were depleted in late 2001. The Francine vein has enough reserves to keep the 450-ton-per-day mill fed until mid-2004.

Exploration drilling continues.

By year-end, Hecla expects to have spent US$4-5 million exploring its various projects. More than US$1.7 million was spent in the first half of the year.