Hecla to develop Grouse Creek

Following an increase in estimated reserves at the Grouse Creek project in south-central Idaho, owner Hecla Mining (NYSE) is planning to bring the property into production.

Proven and probable reserves in two pits are estimated at about 15 million tons grading 0.048 oz. gold and 1.15 oz. silver per ton.

Prior to acquiring the property through a merger with CoCa Mines last year, reserves were estimated at about 9.5 million tons grading 0.058 oz. gold and 1.52 oz. silver.

The project is in the final stages of permitting and, subject to regulatory approval, is expected to be in production in late 1993 at an initial production rate of 100,000 oz. gold per year using vat-leach technology. Hecla also announced a new vein discovery at its Lucky Friday underground silver mine near Mullan, Idaho. The company recently reported the discovery of several mineralized structures below the old Gold Hunter mine about 5,000 ft. northwest of the Lucky Friday workings.

The mineralization was intersected at about 4,050 ft. below surface from a rehabilitated crosscut about 600 ft. to the east. The crosscut has been extended to the area and Hecla has drifted about 200 ft. along one vein with assays running in the range of 30 oz. silver and 2.5% lead over an average width of about six feet.

The company plans to continue to develop the vein both horizontally and vertically to delineate ore blocks.

Arthur Brown, chairman, stated that the new discovery looks extremely encouraging and could be a significant boon to the life of the Lucky Friday mine.

The Lucky Friday workings extend to over 5,000 ft. below the surface and the mine has been in almost continuous operation since the early 1940s. The mine is currently operating at a loss, mining and milling about 650 tons per day at an average grade of about 12 oz. silver, 12% lead and 3% zinc. Hecla, 100% owner of the Lucky Friday, has a 79.08% interest in net profits from the Gold Hunter property. After Hecla has recouped its cost to explore and develop the property, an 18.52% net profits royalty is payable to Independence Lead Mines and a 2.4% net profits royalty is payable to Abot Mining.