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Section 1: 8-K (FORM 8-K)

hl20190213_8k.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

____________________

 

FORM 8-K

 

Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): February 14, 2019

 

HECLA MINING COMPANY
(Exact Name of Registrant as Specified in Its Charter)

 

    

Delaware 1-8491 77-0664171
(State or Other Jurisdiction (Commission File Number) (IRS Employer Identification No.)
of Incorporation)    

6500 North Mineral Drive, Suite 200

Coeur d'Alene, Idaho 83815-9408

(Address of Principal Executive Offices) (Zip Code)

 

(208) 769-4100

(Registrant's Telephone Number, Including Area Code)

N/A
(Former name or Former Address, if changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12(b))
     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 



 

 

 

 

Item 7.01. Regulation FD Disclosure.

 

On February 14, 2019, the Company issued a news release discussing certain exploration activities during the fourth quarter of 2018 and reporting reserve and resource estimates as at December 31, 2018. A copy of the Company’s news release is attached as Exhibit 99.1 to this Current Report and is incorporated herein by reference.

 

Cautionary Statements to Investors on Reserves and Resources

 

Reporting requirements in the United States for disclosure of mineral properties are governed by the SEC and included in the SEC's Securities Act Industry Guide 7, entitled “Description of Property by Issuers Engaged or to be Engaged in Significant Mining Operations” (“Guide 7”). Although the SEC has recently issued new rules rescinding Guide 7, the new rules are not binding until January 1, 2021, and at this time the Company still reports in accordance with Guide 7. However, the Company is also a “reporting issuer” under Canadian securities laws, which require estimates of mineral resources and reserves to be prepared in accordance with NI 43-101. NI 43-101 requires all disclosure of estimates of potential mineral resources and reserves to be disclosed in accordance with its requirements. Such Canadian information is being included here to satisfy the Company's “public disclosure” obligations under Regulation FD of the SEC and to provide U.S. holders with ready access to information publicly available in Canada.

 

Reporting requirements in the United States for disclosure of mineral properties under Guide 7 and the requirements in Canada under NI 43-101 standards are substantially different. The Reports contain certain estimates, not only of proven and probable reserves within the meaning of Guide 7, but also of mineral resource and mineral reserve estimates estimated in accordance with the definitional standards of the Canadian Institute of Mining, Metallurgy and Petroleum referred to in NI 43-101. Under Guide 7, the term “reserve” means that part of a mineral deposit that can be economically and legally extracted or produced at the time of the reserve determination. The term “economically,” as used in the definition of reserve, means that profitable extraction or production has been established or analytically demonstrated to be viable and justifiable under reasonable investment and market assumptions. The term “legally,” as used in the definition of reserve, does not imply that all permits needed for mining and processing have been obtained or that other legal issues have been completely resolved. However, for a reserve to exist, the Company must have a justifiable expectation, based on applicable laws and regulations, that issuance of permits or resolution of legal issues necessary for mining and processing at a particular deposit will be accomplished in the ordinary course and in a timeframe consistent with the Company’s current mine plans. The terms “measured resources”, “indicated resources,” and “inferred resources” are Canadian mining terms as defined in accordance with NI 43-101. These terms are not defined under Guide 7 and are not normally permitted to be used in reports and registration statements filed with the SEC in the United States, except where required to be disclosed by foreign law. The term “resource” does not equate to the term “reserve”. Under Guide 7, the material described in the Reports as “indicated resources” and “measured resources” would be characterized as “mineralized material” and is permitted to be disclosed in tonnage and grade only, not ounces. The category of “inferred resources” is not recognized by Guide 7. Investors are cautioned not to assume that any part or all of the mineral deposits in such categories will ever be converted into proven or probable reserves. “Resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of such a “resource” will ever be upgraded to a higher category or will ever be economically extracted. Investors are cautioned not to assume that all or any part of a “resource” exists or is economically or legally mineable. Investors are also especially cautioned that the mere fact that such resources may be referred to in ounces of silver and/or gold, rather than in tons of mineralization and grades of silver and/or gold estimated per ton, is not an indication that such material will ever result in mined ore which is processed into commercial silver or gold.

 

 

 

 

In accordance with General Instruction B.2 of Form 8-K, the information in Item 7.01 is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any of the Company’s filings or other documents filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit

Number

 

Description

     

99.1

 

News Release, dated February 14, 2019.

 

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated:      February 14, 2019

 

 

     
  Hecla Mining Company  

 

 

 

 

 

By:

/s/ David C. Sienko     

 

 

 

David C. Sienko

 

 

 

Vice President & General Counsel

 

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

ex_134866.htm

Exhibit 99.1

 

NEWS RELEASE

2019-03

 

HECLA REPORTS RECORD SILVER, GOLD AND LEAD RESERVES

 

40% increase in reserve tons: 26% more gold and 8% more silver ounces

Resources in all categories also increased

 

FOR IMMEDIATE RELEASE

February 14, 2019

 

COEUR D’ALENE, IDAHO -- Hecla Mining Company (NYSE:HL) today reported the highest silver, gold and lead reserves in its 128-year history and provided an update on its exploration programs during the fourth quarter of 2018.

 

Highlights

 

 

Reserve gains are from consistent long-term exploration programs and improved use of data.

 

Greens Creek, which generates approximately 50% of Hecla’s revenues, increased reserve tons 23%, silver ounces 19%, gold ounces 16%, zinc tons 15%, and lead tons 17%, giving a mine life from reserves alone of approximately 11 years.

 

Casa Berardi, which generates approximately 35% of Hecla’s revenues, increased reserve tons 70%, and gold ounces 28% with the expansion of Principal pit and the addition of the new West Mine Crown Pillar (WMCP) pit.

 

Reserves grew while using price assumptions of $14.50/oz silver (expected to be among the lowest in the industry), $1,200/oz gold, $1.15/lb zinc and $0.90/lb lead; all below current spot prices (Figure 1).

 

“Reserves in stable jurisdictions are a mining company’s most important asset. Hecla now has the largest reserve in its 128-year history and its largest single year increase because of exploration. The increase reflects the quality of the districts we control; our long-term, consistent strategy; and the capturing and use of all the data that long-lived mines have,” said Phillips S. Baker, Jr., President and CEO. “We have achieved this while the industry has generally seen declining reserves and we were able to use among the most conservative price assumptions in the industry because of the strong economics of these deposits.”

 

“It is particularly important that this growth comes at Greens Creek and Casa Berardi, who generate approximately 85% of our revenue and most of our operations’ free cash flow. These mines are Hecla’s best,” Mr. Baker added. “But we expect our other mines to do the same over the next few years. We are working hard at San Sebastian to extend the oxide mine life and to put the sulfides into production. We are just starting our work in Nevada, reducing the reserve to better reflect the geology, with the goal of building a solid base for consistent production.”

 

  Hecla Mining Company ● 1-800-432-5291 ● hmc-info@hecla-mining.com     1

 

 

 

 

Key Reserve and Resource Statistics (2018 compared to 2017)

 

 

Record proven and probable gold reserves of 2.85 million ounces, an increase of 26% (Figure 2).

 

Record proven and probable silver reserves of 191 million ounces, an increase of 8% (Figure 3).

 

Record proven and probable lead reserves of 774,000 tons, an increase of 5%. Proven and probable zinc reserves of 931,730 tons, an increase of 11% and the highest since 2009.

 

The silver reserve of 107.1 million ounces at Greens Creek is the highest since it was 100% acquired in 2008. Gold reserves at Casa Berardi increased approximately 28% to 1.91 million ounces, the highest since 1990.

 

Measured and indicated gold ounces increased 44% to 7.0 million ounces, a gain of 2.15 million ounces over 2017. Measured and indicated silver ounces increased 65% to a record 208 million ounces, an increase of 82 million ounces over 2017.

 

Inferred gold resources increased 96% to 3.6 million ounces and a gain of 1.8 million ounces. Inferred silver resources increased 4% to 465 million ounces and a gain of 17 million ounces.

 

Exploration

 

 

Greens Creek:

 

o

Underground drilling continues to expand high-grade, near-surface resources at the Upper Plate and East Ore zones and add to mineralized trends along the Deep 200 South, Southwest Bench and Lower Southwest zones.

 

Casa Berardi:

 

o

Underground drilling was able to upgrade and expand reserves and resources in the 118, 121, 123, 124, 125, 128 and 160 zones and confirm further potential at depth and to the east and west.

 

o

Surface drilling completed on the West Mine Crown Pillar (WMCP) extended the resource to the west. Step-out drilling of the 128-129 zones east of the proposed Principal pit and near the proposed 160 pit has defined high-grade extensions.

 

 

San Sebastian:

 

o

Drilling at the West Francine, El Toro (South) and Esperanza veins continue to define near-surface, oxide mineralization.

 

Nevada:

 

o

Underground drilling at Fire Creek is identifying extensions to the Vonnie, Joyce, Karen and Honey Runner high-grade veins/structures in the Spiral 2, 3 and 4 areas.

 

o

Underground drilling at Hollister is identifying new mineralization in the West Gloria, East Clementine and Gwenivere areas.

 

“The 2018 exploration program was very successful at not only our mines but at some of our exploration properties. However, for 2019 the focus will be on San Sebastian, Casa Berardi and Nevada, of which Nevada is estimated to be about half of the budget,” said Mr. Baker. “We believe that after a few years of committed exploration there, we could see results similar to what was achieved in 2018.”

 

  Hecla Mining Company ● 1-800-432-5291 ● hmc-info@hecla-mining.com     2

 

 

 

 

RESERVES AND RESOURCES

 

Hecla more than replaced gold production in 2018 (318,901 gold ounces contained) as reserves increased by 26% over 2017, and gold reserve prices were calculated at $1,200/oz. Silver production in 2018 (12.9 million silver ounces contained) was also more than replaced as reserves increased by 8%, despite using $14.50/oz for the reserve calculation. In the last 11 years, Hecla has not only replaced silver production but added another 200 million ounces through exploration (Figure 4). Both zinc and lead production were replaced and reserves increased by 11% and 5%, respectively.

 

Measured and indicated gold ounces increased 44% to 7.0 million ounces, a gain of 2.15 million ounces over 2017 due to increases at Greens Creek and the acquisition of the Nevada properties. Measured and indicated silver ounces increased 65% to a record 208 million ounces, an increase of 82 million ounces over 2017 due to a large increase at Greens Creek, San Sebastian and the addition of the Nevada properties. Inferred gold resources increased 96% to 3.6 million ounces and a gain of 1.8 million ounces primarily due to the acquisition of the Nevada properties. Inferred silver resources increased 4% to 465 million ounces, a gain of 17 million ounces due to increases at San Sebastian, Greens Creek, and the acquisition of Nevada properties.

 

Greens Creek

 

At Greens Creek, the 845,398 tons processed at the mill in 2018 contained 10.3 million ounces of silver, 79,087 ounces of gold, 63,116 tons of zinc, and 23,656 tons of lead. Silver, gold and base metal production was replaced, and silver, gold, zinc, and lead reserves increased by 18.7%, 15.8%, 14.9%, and 16.8%, respectively, over 2017 reserves. The current silver reserve of 107.1 million ounces is the highest since 2008, the year Hecla acquired 100% of the mine. The current gold reserve of 840k ounces is the highest since 2009. Increases in silver and gold reserves at the 200 South, Gallagher, West, 9A, and Southwest zones were partially offset by reductions of silver and gold reserves in the 5250 Zone caused by mine depletion.

 

Measured and indicated resources increased by 66,134,100 silver ounces (211%) and 467,700 gold ounces (181%) over 2017 with additions in the West, Southwest, 9A, and 200 South zones and losses in the Gallagher and East zones due to conversion to reserves. New drilling and remodeling of areas historically mined at higher cutoffs were responsible for the increases in Measured and indicated resources. Inferred resources increased by 3,271,900 silver ounces (10%) and decreased by 3,200 gold ounces (-1%) due to large conversions to indicated resources or reserves in the 200 South, Upper Plate and East Ore zones.

 

A new NI 43-101 Technical Report is expected within 45 days. The optimized mine plan accelerates access to higher-grade ore, and allows some of the highest-margin reserves to be extracted in the earlier years of the mine plan. It also utilizes more of the existing workings during the next four years which reduces the planned development investment required. In addition, the increase in reserves is expected to extend the mine life by about three years to 2030.

 

Casa Berardi

 

At Casa Berardi, the 1,375,718 tons processed at the mill contained approximately 162,744 ounces of gold, with 744,952 tons (54%) of the milled tonnage coming from underground and 630,776 tons (46%) of the milled tonnage coming from the East Mine Crown Pillar (EMCP) open pit. Gold reserves increased approximately 28% to 1.91 million ounces and reserve tonnage at Casa Berardi increased 71% to 23.7 million tons over 2017. Depletion decreased underground reserve ounces in the 104 (Lower Inter), 113, 118, 123 and 124 zones. This was offset by reserve additions in the west extension of the EMCP as well as 134 and 160 pits. Substantial reserve increases occurred in the proposed WMCP and Principal pits where some underground reserves were incorporated into an expanded pit. There was an overall reduction in underground reserves of 176,400 gold ounces and an increase of open pit reserves of 589,600 gold ounces compared to 2017.

 

  Hecla Mining Company ● 1-800-432-5291 ● hmc-info@hecla-mining.com     3

 

 

 

 

Measured and indicated gold resources decreased 12% from 2017 levels as gains from underground drilling of the 119 and 123 zones and 134 and 160 open pits were offset by decreases at the 107 (South West), 108 (Inter), 111, 113, 115, 117, 118, 121, 124, and 160 underground. The largest decreases were a result of incorporation of the 107 (South West) and 160 underground to open pit reserves. Inferred gold resources decreased 9% from 2017 levels as increases at the 105, 116, 124, 134, 146, 157, and 160 (underground and open pit) zones were offset by losses to inferred resources in the 107 (South West) 108 (Inter) 118, 119, 121, 123, 148, and 160 underground and open pit zones by conversion to indicated resources. Significant losses to inferred resources in the 107 and 108 zones were due to resource upgrades and incorporation into the new WMCP pit. A new NI-43-101 Technical Report is expected within 45 days.

 

San Sebastian

 

At San Sebastian, the 156,733 tons processed at the mill contained 2.04 million ounces of silver and 14,979 ounces of gold. Reserves are currently 2.8 million ounces of silver and 22,500 ounces of gold. At the end of the year there was an ore stockpile containing 84,700 silver ounces and 1,800 ounces of gold. The total underground reserves in the Middle Vein are 2.33 million ounces silver and 11,900 ounces gold and represent 83% and 53% of the silver and gold reserves, respectively. The total open pit reserves in the North Vein are 377,600 ounces silver and 8,800 ounces gold and represent 14% and 39% of the silver and gold reserves, respectively.

 

Due to significant definition drilling, the indicated resources increased from 2017 by 67% for silver to 14.7 million ounces, 11% for gold to 114,700 ounces, 110% for zinc to 42,710 tons, 96% for lead to 30,410 tons, and 119% for copper to 19,780 tons. Indicated Resources are separated into ‘Oxide’ and ‘Polymetallic’ mineral styles; oxide is cyanide-amenable material and polymetallic is base-metal-sulfide-rich material amenable to a flotation milling process. Polymetallic resources were defined and extended at depth on the Francine and Middle Veins during 2018. Polymetallic mineralization has zinc, lead and copper and represents 54% of the silver and 17% of the Measured and indicated gold resources. The inferred resource increased from 2017 by 44% for silver to 22.9 million ounces and 50% for gold to 142,700 ounces due to new material being added along the Middle Vein and in the East Francine areas. Lead, zinc and copper decreased by 62%, 64% and 11%, respectively, as a direct result of conversion of polymetallic mineralization in the Francine Vein from inferred to indicated.

 

Open pit mining continued in 2018 in the expanded North pit to the west and at depth and an additional smaller ‘satellite pit’ to the west and mining of this pit is expected to continue into 2020. New high-grade, precious metal resources on the Professor and East Francine veins are being evaluated for underground mine design and scheduling. Possible conversion of polymetallic veins in the Francine Vein to reserves will be dependent on metallurgical testing of the bulk sample and stope optimizations. The material from the bulk sample will be used for metallurgical studies and a viability test at a nearby mill, where the processing of polymetallic sulfide ores from San Sebastian is planned.

 

  Hecla Mining Company ● 1-800-432-5291 ● hmc-info@hecla-mining.com     4

 

 

 

 

Lucky Friday

 

At Lucky Friday, the 17,309 tons processed at the mill contained approximately 186,609 ounces of silver, 673 tons of zinc and 1,131 tons of lead. Reserves are currently 81.0 million ounces of silver, 510,800 tons of lead and 225,260 tons of zinc and are essentially unchanged relative to 2017. Measured and indicated resources have increased 3% for silver to 77.4 million ounces, 3% for lead to 499,070 tons and 4% for zinc to 265,970 tons. Inferred resources remained relatively unchanged year-over-year and include 24.8 million ounces of silver, 181,180 tons of zinc and 74,340 tons of lead.

 

Fire Creek

 

At Fire Creek, the 47,573 tons processed at the mill for Hecla in 2018 contained approximately 17,993 ounces of gold and 22,482 ounces of silver. Reserves at Fire Creek are 69,300 ounces gold and 56,900 ounces of silver and are a reduction from the second quarter of 2018 primarily due to model changes that interpret the veins to be thinner (47% of reduction), mining depletion (29% of reduction), and increased costs resulting in higher cut-off grades (17% of reduction). Measured and indicated underground resources are 215,200 ounces of gold and 197,900 ounces of silver and inferred resources are 298,700 ounces of gold and 288,400 ounces of silver.

 

Hollister

 

At Hollister, the 32,286 tons processed at the mill for Hecla in 2018 contained approximately 11,779 ounces of gold and 106,056 ounces of silver. Reserves at Hollister are 7,600 ounces of gold and 82,400 ounces silver and are a reduction from the second quarter 2018 primarily due to mining depletion, but also due to removal of material because of thinner vein interpretations.  Additional reserve reductions were made as a result of recent identification of fault offsets in the West Gloria area; this material may come back into the reserve once the structural geology and offset magnitudes are interpreted and drill tested. Measured and indicated resources are 181,900 ounces of gold and 770,200 ounces of silver and inferred resources are 222,700 ounces of gold and 1.7 million ounces of silver.

 

A breakdown of the Company’s reserves and resources is set out in Table A at the end of this news release.

 

EXPLORATION

 

Exploration (including corporate development) expenses were $8.3 million, and $35.9 million for the fourth quarter and full year 2018, respectively. This represents an increase of 41% and 53% over the fourth quarter and full year 2017. These increases were primarily the result of the addition of exploration near the Nevada Operations, increased exploration at San Sebastian, Casa Berardi and Greens Creek and initial exploration at the Kinskuch project in British Columbia and the Little Baldy project in northern Idaho.

 

  Hecla Mining Company ● 1-800-432-5291 ● hmc-info@hecla-mining.com     5

 

 

 

 

Greens Creek – Alaska

 

At Greens Creek, drilling in the fourth quarter and strong assay results have upgraded and expanded the Deep 200 South, East Ore, Upper Plate and Southwest Bench zone resources. Exploration drilling focused on the Deep 200 South Zone and Lower Southwest Zone (Figure 5). Drilling of the Deep 200 South Zone confirmed three flat-lying, high-grade lenses that are folded to the west and has enabled portions of bench mineralization to be upgraded to an indicated resource category. Recent intersections include 180.4 oz/ton silver, 0.36 oz/ton gold, 14.0% zinc and 7.2% lead over 5.3 feet and 81.5 oz/ton silver, 0.40 oz/ton gold, 1.1% zinc and 0.6 lead over 5.0 feet. Near the mine portal elevation, drilling of the Upper Plate Zone to the northwest has defined at least two flat-lying zones that are folded to the east (Figure 6). In combination with surface drilling earlier in the year, this resource expanded further to the west and north. Definition drilling results indicate a thickening of the upper and middle mineralization horizons toward the Southwest D Fault from the east. Recent results include 11.4 oz/ton silver, 1.04 oz/ton gold, 2.2% zinc and 1.6% lead over 14.2 feet and 34.2 oz/ton silver, 0.01 oz/ton gold, 2.5% zinc and 1.5% lead over 4.9 feet.

 

In the East Ore Zone, intersections from drilling at the north end, including 38.5 oz/ton silver, 0.11 oz/ton gold, 7.4% zinc and 3.5% lead over 6.1 feet and 29.5 oz/ton silver, 0.11 oz/ton gold, 3.6% zinc and 1.3% lead over 8.4 feet, confirm previously modeled resource estimates, particularly at lower and higher elevations. Drilling has expanded this northern portion of the zone deeper by over 150 feet. The focus of the first quarter in 2019 underground drilling is on the Lower Southwest, Deep 200 South, 9A, and East Ore zones. Later in 2019 additional drilling targeting of the Northwest West and Upper Plate zones is planned.

 

More complete drill assay highlights from Greens Creek can be found in Table B at the end of this release and a presentation showing drill intersection locations is available at the following: http://ir.hecla-mining.com/interactive/newlookandfeel/4130678/Hecla-Q4-2018-ExplorationUpdate.pdf.

 

Casa Berardi – Quebec

 

During the fourth quarter, up to six underground drills were used to refine stope designs, expand reserves and resources in the 118, 121, 123, 124, 125, and 128 zones and confirm further potential at depth and to the east and west (Figure 7). Up to four drills on surface completed in-fill and exploration drilling at the West Mine Crown Pillar (WMCP), the 128-129 zones east of the Principal pit and near the proposed 160 pit (Figure 7). The WMCP pit represents the latest in a series of existing and proposed open pits (Figure 8) along the Casa Berardi Fault or Deformation Zone. The cross section in Figure 9 shows where underground resources were brought into the WMCP pit.

 

At the Lower 118 Zone, drilling confirmed the continuity of multiple mineralized lenses to the west and at depth outside the current resource boundary. Recent intersections continue to expand this resource, including 0.63 oz/ton gold over 13.1 feet and 2.69 oz/ton gold over 2.6 feet. This drilling suggests the zone is open at depth below the 1200-level and to the west. Near the top of the 123 Zone (Figure 10), step-out drilling to the east show the continuity of high-grade mineralization down plunge for 400 feet from surface. Drilling from the 710-790 levels have extended gold mineralization at depth and further to the west with intersections of 0.39 oz/ton gold over 10.8 feet and 0.35 oz/ton gold over 8.9 feet. Drilling from the 970 level, at the bottom of the mine, confirmed multiple lenses and suggests these mineralized lenses plunge east at depth and remain open for exploration.

 

High in the mine, drilling has targeted the east extension of the 124 Zone that is down-plunge of the Principal pit mineralization. Drilling below the 290-level continues to show the down-dip potential of the 124 lenses to depth. Further east, drilling of the 128-129 zones is defining a high-grade, steeply-plunging series of lenses that have been defined vertically for 600 feet and may extend below the 290 level. Recent drill intersections include 0.35 oz/ton gold over 10.2 feet and 1.25 oz/ton gold over 1.6 feet.

 

  Hecla Mining Company ● 1-800-432-5291 ● hmc-info@hecla-mining.com     6

 

 

 

 

Definition drilling has commenced at the 300-level of the East Mine to refine the depth extensions of the 160 Zone below the pit shells (Figure 11). Drilling has defined broad intervals of mineralization including 0.21 oz/ton gold over 20.3 feet and 0.16 oz/ton gold over 19.9 feet. This mineralization is steeply plunging to the west and is open to depth. Drilling of the WMCP to evaluate open pit potential west of the West Shaft has upgraded the current inferred resource to reserves that are part of a newly defined open pit reserve. The recent results below show that the near-surface, mineralized structures extends both beyond the western extent of the WMCP pit.

 

In the first quarter of 2019, underground drilling is expected to expand and refine the 118 and 123 zones lower in the mine and the 124-128 zones closer to surface. Underground exploration drilling is planned to evaluate the lower extension of the 113 Zone and the 128 Zone. Surface drilling programs are planned at the western extension of the WMCP and the 128-129 zones to define and expand underground mining potential east of the Principal area along the Casa Berardi Fault.

 

More complete drill assay highlights from Casa Berardi can be found in Table B at the end of the release and a presentation showing drill intersection locations is available at the following: http://ir.hecla-mining.com/interactive/newlookandfeel/4130678/Hecla-Q4-2018-ExplorationUpdate.pdf.

 

San Sebastian - Mexico

 

During the quarter, three core drill rigs and one reverse circulation (RC) drill operated at San Sebastian. One underground drill rig completed in-fill drilling in the central and upper portions of the oxide zone along the Middle Vein. Exploration drilling with two core rigs was directed toward shallower oxide mineralization along the West Francine, Esperanza veins and the recently discovered El Toro (South) Vein (Figure 12). At the Middle Vein, in-fill drilling within the oxide zone intercepted vein intervals with similar grade and width to the previous exploration drilling results in this area. Strong drill results include 66.9 oz/ton silver and 0.22 oz/ton gold over 5.8 feet, and 42.4 oz/ton silver and 0.11 oz/ton gold over 4.7 feet. At the West Francine Vein, located about 1,000 feet west of any past drilling on the Francine Vein (Figure 12) core drilling has extended this mineralization about 400 feet along strike and a recent drill hole at the eastern end returned 9.5 oz/ton silver 0.02 oz/ton gold over 1.4 feet. Mineralization in this area is open laterally and at depth and follow-up, offset drilling is in progress.

 

The El Toro (South) Vein is located approximately halfway between the Andrea Vein resource area to the southeast and the Esperanza Vein to the northwest (Figure 12). Based on its location and orientation, this vein may represent the link between these two known veins with a total prospective strike length of over eight miles. Recent core drilling includes intersections of 9.8 oz/ton silver and 0.13 oz/ton gold over 11.8 feet,4.1 oz/ton silver and 0.13 oz/ton gold over 10.0 feet, and 6.0 oz/ton silver and 0.04 oz/ton gold over 5.4 feet (Figure 13). Exploration drilling continues at the Esperanza Vein area, about a mile and a half west of the mine area. This drilling has defined a wide vein up to 30 feet wide but initial assay results have been poor. Drilling has shifted to the northwest where there are strong geochemistry anomalies along the trend of the vein.

 

  Hecla Mining Company ● 1-800-432-5291 ● hmc-info@hecla-mining.com     7

 

 

 

 

Drilling will continue during the first quarter to evaluate near-surface oxide mineralization at the West Francine Vein, El Toro (South) and Esperanza Vein areas. A grid pattern of vertical holes for sampling overburden and bedrock using an RC drill rig has begun to better define the geochemistry along the Esperanza to Andrea vein corridor (Figure 14).

 

More complete drill assay highlights from San Sebastian can be found in Table B at the end of this release and a presentation showing drill intersection locations is available at the following: http://ir.hecla-mining.com/interactive/newlookandfeel/4130678/Hecla-Q4-2018-ExplorationUpdate.pdf.

 

Nevada

 

Fire Creek

 

There were up to four drill rigs operating underground at Fire Creek in the fourth quarter with definition drilling focusing on upper and lower portions of Spiral 4, upper portions of Spiral 3, and up-dip of Spiral 2 mineralization (Figure 15). One drill rig is evaluating the upper portions of Spiral 3 along the Honey Runner, Karen, Hui Wu and Joyce structures and will attempt to extend mineralization along strike to the Spiral 2 sills. A narrow, high-grade intercept of 2.79 oz/ton gold over 0.7 feet is within a larger, lower-grade envelope of 0.76 oz/ton gold over 5.0 feet. Other high-grade intercepts in Spiral 3 include 0.64 oz/ton gold over 7.8 feet and 4.08 oz/ton gold over 2.0 feet (Figure 16).

 

Two drills are evaluating the upper and lower portions of Spiral 4. The drill targeting the southern up-dip extents of the Vonnie, Vein 6, Joyce, and Vein 8 has defined multiple narrow, gold-bearing structures that persist into the upper extents of the Spiral 4 area. Recent intersections include 0.22 oz/ton gold over 10.0 feet and 0.20 oz/ton gold over 3.3 feet. The sill drill completed additional definition drilling in Spiral 2 on the Joyce Vein and Vein 39 that expanded mineralization up-dip. The 2019 underground drill program at Fire Creek is designed to upgrade and expand resources at Spirals 2, 3, 4 and 9 and the Titan and North zones (Figure 17).

 

Surface exploration rigs evaluated the Zeus (Figure 18) and Far View targets for high-grade, gold-bearing structures. Intercepts along strike of the Zeus target encountered multiple structures with strong argillic clay alteration that had intercepts of 0.21 oz/ton gold over 2.0 feet and 0.18 oz/ton gold over 2.3 feet. Drilling identified a new structure to the southwest that graded 0.18 oz/ton gold over 3.4 feet. A new vein, grading 0.17 oz/ton gold over 4.5 feet was also identified to the northeast on a new structure between Zeus and the Spiral 10 veins.

 

Hollister

 

Up to three rigs were active in the West Gloria, East Clementine and Gwenivere areas during the fourth quarter. The West Gloria drilling program from the end of the 5265 Level targeted the extension of the Gloria veins to the west where previous drilling had identified veins (Figure 19). Drill results along the West Gloria structure below the level define numerous high-grade veins including 0.32 oz/ton gold and 6.1 oz/ton silver over 11.6 feet and 0.25 oz/ton gold and 10.2 oz/ton silver over 5.5 feet. Additional in-fill drilling is required to determine the continuity of these higher-grade veins. The East Clementine program (Figures 19 and 20) targeted up-dip extensions of the 233 and 243 veins to follow up on high-grade intersections near the unconformity. Three intercepts, including 1.78 oz/ton gold and 7.5 oz/ton silver over 1.7 feet, on the 233 Vein have delineated a mineable resource close to current workings on the 5190 level. Another intercept, 0.60 oz/ton gold and 0.10 oz/ton silver over 5.0 feet, extended mineralization about 150 feet to the east on the 243 Vein, close to the unconformity (Figure 21).

 

  Hecla Mining Company ● 1-800-432-5291 ● hmc-info@hecla-mining.com     8

 

 

 

 

The Gwenivere program (Figure 19) was designed to offset two historical surface reverse circulation (RC) intercepts. Initial drilling intersecting multiple structures had a significant assay interval of 1.35 oz/ton gold and 0.29 oz/ton silver over 3.5 feet. One hole was collared in Muck Bay 2 on the 5050 level and directed to the southeast. This hole intersected multiple dykes and transducers were installed to monitor the hydrology. Additional underground drilling in the Central Hollister, Gwenivere and West Gloria areas is planned to continue through the first quarter of 2019.   

 

More complete drill assay highlights from Nevada (Fire Creek and Hollister) can be found in Table B at the end of this release and a presentation showing drill intersection locations is available at the following: http://ir.hecla-mining.com/interactive/newlookandfeel/4130678/Hecla-Q4-2018-ExplorationUpdate.pdf.

 

ABOUT HECLA

 

Founded in 1891, Hecla Mining Company (NYSE:HL) is a leading low-cost U.S. silver producer with operating mines in Alaska, Idaho and Mexico, and is a growing gold producer with operating mines in Quebec, Canada and Nevada. The Company also has exploration and pre-development properties in eight world-class silver and gold mining districts in the U.S., Canada, and Mexico.

 

Cautionary Statements Regarding Forward Looking Statements

 

Statements made or information provided in this news release that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of Canadian securities laws. Words such as “may”, “will”, “should”, “expects”, “intends”, “projects”, “believes”, “estimates”, “targets”, “anticipates” and similar expressions are used to identify these forward-looking statements. The material factors or assumptions used to develop such forward-looking statements or forward-looking information include that the Company’s plans for development and production will proceed as expected and will not require revision as a result of risks or uncertainties, whether known, unknown or unanticipated, to which the Company’s operations are subject.

 

Forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those projected, anticipated, expected or implied. These risks and uncertainties include, but are not limited to, metals price volatility, volatility of metals production and costs, litigation, regulatory and environmental risks, operating risks, project development risks, political risks, labor issues, ability to raise financing and exploration risks and results. Refer to the Company's Form 10K and 10-Q reports for a more detailed discussion of risk factors that may impact expected future results. The Company undertakes no obligation and has no intention of updating forward-looking statements other than as may be required by law.

 

Cautionary Statements to Investors on Reserves and Resources

 

Reporting requirements in the United States for disclosure of mineral properties are governed by the SEC and included in the SEC's Securities Act Industry Guide 7, entitled “Description of Property by Issuers Engaged or to be Engaged in Significant Mining Operations” (Guide 7). Although the SEC has recently issued new rules rescinding Guide 7, the new rules are not binding until January 1, 2022, and at this time the Company still reports in accordance with Guide 7. However, the Company is also a “reporting issuer” under Canadian securities laws, which require estimates of mineral resources and reserves to be prepared in accordance with Canadian National Instrument 43-101 (NI 43-101). NI 43-101 requires all disclosure of estimates of potential mineral resources and reserves to be disclosed in accordance with its requirements. Such Canadian information is included herein to satisfy the Company's “public disclosure” obligations under Regulation FD of the SEC and to provide U.S. holders with ready access to information publicly available in Canada.

 

  Hecla Mining Company ● 1-800-432-5291 ● hmc-info@hecla-mining.com     9

 

 

 

 

Reporting requirements in the United States for disclosure of mineral properties under Guide 7 and the requirements in Canada under NI 43-101 standards are substantially different. This document contains a summary of certain estimates of the Company, not only of proven and probable reserves within the meaning of Guide 7, but also of mineral resource and mineral reserve estimates estimated in accordance with the definitional standards of the Canadian Institute of Mining, Metallurgy and Petroleum referred to in NI 43-101. Under Guide 7, the term "reserve" means that part of a mineral deposit that can be economically and legally extracted or produced at the time of the reserve determination. The term "economically", as used in the definition of reserve, means that profitable extraction or production has been established or analytically demonstrated to be viable and justifiable under reasonable investment and market assumptions. The term "legally", as used in the definition of reserve, does not imply that all permits needed for mining and processing have been obtained or that other legal issues have been completely resolved. However, for a reserve to exist, Hecla must have a justifiable expectation, based on applicable laws and regulations, that issuance of permits or resolution of legal issues necessary for mining and processing at a particular deposit will be accomplished in the ordinary course and in a timeframe consistent with Hecla's current mine plans. The terms “measured resources”, “indicated resources,” and “inferred resources” are Canadian mining terms as defined in accordance with NI 43-101. These terms are not defined under Guide 7 and are not normally permitted to be used in reports and registration statements filed with the SEC in the United States, except where required to be disclosed by foreign law. The term “resource” does not equate to the term “reserve”. Under Guide 7, the material described herein as “indicated resources” and “measured resources” would be characterized as “mineralized material” and is permitted to be disclosed in tonnage and grade only, not ounces. The category of “inferred resources” is not recognized by Guide 7. Investors are cautioned not to assume that any part or all of the mineral deposits in such categories will ever be converted into proven or probable reserves. “Resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of such a “resource” will ever be upgraded to a higher category or will ever be economically extracted. Investors are cautioned not to assume that all or any part of a “resource” exists or is economically or legally mineable. Investors are also especially cautioned that the mere fact that such resources may be referred to in ounces of silver and/or gold, rather than in tons of mineralization and grades of silver and/or gold estimated per ton, is not an indication that such material will ever result in mined ore which is processed into commercial silver or gold.

 

Qualified Person (QP) Pursuant to Canadian National Instrument 43-101

 

Dean McDonald, PhD. P.Geo., Senior Vice President - Exploration of Hecla Mining Company, who serves as a Qualified Person under National Instrument 43-101, supervised the preparation of the scientific and technical information concerning Hecla’s mineral projects in this news release, including with respect to the newly acquired Nevada projects. Information regarding data verification, surveys and investigations, quality assurance program and quality control measures and a summary of sample, analytical or testing procedures for the Greens Creek Mine are contained in a technical report prepared for Hecla titled “Technical Report for the Greens Creek Mine, Juneau, Alaska, USA” effective date March 28, 2013, and for the Lucky Friday Mine are contained in a technical report prepared for Hecla titled “Technical Report on the Lucky Friday Mine Shoshone County, Idaho, USA” effective date April 2, 2014, for the Casa Berardi Mine are contained in a technical report prepared for Hecla titled "Technical Report on the Mineral Resource and Mineral Reserve Estimate for the Casa Berardi Mine, Northwestern Quebec, Canada" effective date March 31, 2014 (the "Casa Berardi Technical Report"), and for the San Sebastian Mine are contained in a technical report prepared for Hecla titled "Technical Report for the San Sebastian Ag-Au Property, Durango, Mexico" effective date September 8, 2015. Also included in these four technical reports is a description of the key assumptions, parameters and methods used to estimate mineral reserves and resources and a general discussion of the extent to which the estimates may be affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant factors. Information regarding data verification, surveys and investigations, quality assurance program and quality control measures and a summary of sample, analytical or testing procedures for the Fire Creek Mine are contained in a technical report prepared for Klondex Mines titled “Technical Report for the Fire Creek Project, Lander County, Nevada, dated March 31, 2018; the Hollister Mine dated May 31, 2017, amended August 9, 2017; and the Midas Mine dated August 31, 2014, amended April 2, 2015. Copies of these technical reports are available under Hecla's and Klondex’s profiles on SEDAR at www.sedar.com.

 

  Hecla Mining Company ● 1-800-432-5291 ● hmc-info@hecla-mining.com     10

 

 

 

 

Dr. McDonald reviewed and verified information regarding drill sampling, data verification of all digitally-collected data, drill surveys and specific gravity determinations relating to the Casa Berardi mine. The review encompassed quality assurance programs and quality control measures including analytical or testing practice, chain-of-custody procedures, sample storage procedures and included independent sample collection and analysis. This review found the information and procedures meet industry standards and are adequate for Mineral Resource and Mineral Reserve estimation and mine planning purposes.

 

For further information, please contact:

 

Mike Westerlund

Vice President - Investor Relations

800-HECLA91 (800-432-5291)

Investor Relations               

Email: hmc-info@hecla-mining.com

Website: http://www.hecla-mining.com

 

  Hecla Mining Company ● 1-800-432-5291 ● hmc-info@hecla-mining.com     11

 

 

 

Table A: Reserves and Resources – 12/31/18(1)

 

Proven Reserves

 
 

Tons

 

Silver

 

Gold

 

Lead

 

Zinc

 

Copper

 

Silver

 

Gold

 

Lead

 

Zinc

 

Copper

 

Asset

(000)  

(oz/ton)

 

(oz/ton)

 

%

 

%

 

%

 

(000 oz)

 

(000 oz)

 

Tons

 

Tons

 

Tons

 

Greens Creek (2)

  6     13.8     0.10     2.8     7.0     -     86     1     180     440     -  

Lucky Friday (2)

  4,230     15.4     -     9.6     4.1     -     65,234     -     406,080     174,630     -  

Casa Berardi (3)

  6,790     -     0.08     -     -     -     -     563     -     -     -  

San Sebastian (2)

  22     3.9     0.08     -     -     -     85     2     -     -     -  

Fire Creek (2,4)

  24     1.1     1.21     -     -     -     27     29     -     -     -  

Hollister (2,5)

  2     7.0     0.73     -     -     -     17     2     -     -     -  

Total             

  11,074                                   65,448     596     406,260     175,070     -  

 

Probable Reserves

 
 

Tons

 

Silver

 

Gold

 

Lead

 

Zinc

 

Copper

 

Silver

 

Gold

 

Lead

 

Zinc

 

Copper

 

Asset

 (000)  

(oz/ton)

 

(oz/ton)

 

%

 

%

 

%

 

(000 oz)

 

(000 oz)

 

(Tons)

 

(Tons)

 

Tons

 

Greens Creek (2)

  9,270     11.5     0.09     2.8     7.6     -     106,972     840     262,760     706,040     -  

Lucky Friday (2)

  1,387     11.4     -     7.6     3.7     -     15,815     -     104,720     50,640     -  

Casa Berardi (3)

  16,954     -     0.08     -     -     -     -     1,343     -     -     -  

San Sebastian (2)

  206     13.1     0.10     -     -     -     2,705     21     -     -     -  

Fire Creek (2,4)

  91     0.3     0.44     -     -     -     30     40     -     -     -  

Hollister (2,5)

  9     7.2     0.65     -     -     -     66     6     -     -     -  

Total              

  27,917                                   125,588     2,250     367,480     756,680     -  

 

Proven and Probable Reserves

 
 

Tons

 

Silver

 

Gold

 

Lead

 

Zinc

 

Copper

 

Silver

 

Gold

 

Lead

 

Zinc

 

Copper

 

Asset

(000)  

(oz/ton)

 

(oz/ton)

 

%

 

%

 

%

 

(000 oz)

 

(000 oz)

 

(Tons)

 

(Tons)

 

Tons

 

Greens Creek (2)

  9,277     11.5     0.09     2.8     7.6     -     107,058     840     262,940     706,470     -  

Lucky Friday (2)

  5,617     14.4     -     9.1     4.0     -     81,049     -     510,800     225,260     -  

Casa Berardi (3)

  23,743     -     0.08     -     -     -     -     1,907     -     -     -  

San Sebastian (2)

  228     12.3     0.10     -     -     -     2,790     23     -     -     -  

Fire Creek (2,4)

  115     0.5     0.60     -     -     -     57     69     -     -     -  

Hollister (2,5)

  11     7.2     0.67     -     -     -     82     8     -     -     -  

Total             

  38,991                                   191,036     2,846     773,740     931,730     -  

 

(1) The term “reserve” means that part of a mineral deposit that can be economically and legally extracted or produced at the time of the reserve determination. The term “economically,” as used in the definition of reserve, means that profitable extraction or production has been established or analytically demonstrated to be viable and justifiable under reasonable investment and market assumptions. The term “legally,” as used in the definition of reserve, does not imply that all permits needed for mining and processing have been obtained or that other legal issues have been completely resolved. However, for a reserve to exist, Hecla must have a justifiable expectation, based on applicable laws and regulations, that issuance of permits or resolution of legal issues necessary for mining and processing at a particular deposit will be accomplished in the ordinary course and in a timeframe consistent with Hecla’s current mine plans.

(2) Mineral reserves are based on $1200 gold, $14.50 silver, $0.90 lead, $1.15 zinc, unless otherwise stated.

(3) Mineral reserves are based on $1200 gold and a US$/CAN$ exchange rate of 1:1.33 Reserve diluted to an average of 34.7% to minimum width of 9.8 feet (3 m)

 Reserves at Casa Berardi were determined by Jonathan Archambault-Giroux, P. Geo., Que., Real Parent, P.Geo. Que., and Alain Quenneville, P. Eng., Que. unless otherwise stated.

 Open pit mineral reserves of the Principal Mine were estimated in September 2018 by Hecla Quebec and Mine Development Associates based on $1225 gold and a US$/CAN$ exchange rate of 1:3.

Hecla Mining Company, Principal Deposit Open Pit Mining Study - 2018

September 1, 2018, by Mine Development Associates, Thomas L. Dyer, P.E.

 Open pit mineral reserves of the 160 and 134 Zones were estimated in January 2018 by Hecla Quebec and Mine Development Associates based on $1225 gold and a US$/CAN$ exchange rate of 1.3.

Hecla Mining, Casa Berardi 160 and 134 Zones, Open Pit Mining Study - 2017

January 12, 2018, by Mine Development Associates, Thomas L. Dyer, P.E.

 Open pit mineral reserves of the West Mine Crown Pillar were estimated in January 2019 by Hecla Quebec and Mine Development Associates based on $1225 gold and a US$/CAN$ exchange rate of 1.3.

Hecla Mining Company, West Mine Crown Pillar Deposit, Open Pit Mining Study - 2018

January 10, 2019, by Mine Development Associates, Thomas L. Dyer, P.E.

Open pit mineral reserves of the East Mine Crown Pillar Expansion were estimated in August 2018 by Hecla Quebec and Mine Development Associates based on $1225 gold and a US$/CAN$ exchange rate of 1.3.

Hecla Mining Company, East Mine Crown Pillar Expansion, Open Pit Mining Study - 2018

August 22, 2018, by Mine Development Associates, Thomas L. Dyer, P.E.

(4) Recoveries at Fire Creek for gold and silver are 94% and 92%. Cutoff grade of 0.339 Au Equivalent oz/ton and incremental cutoff grade of 0.11 Au Equivalent oz/ton. Unplanned dilution of 10% to 17% included depending on mining method.

(5) Recoveries at Hollister for gold and silver are 87% and 80%. Cutoff grade of 0.396 Au Equivalent oz/ton and incremental cutoff grade of 0.07 Au Equivalent oz/ton. Unplanned dilution of 10% to 17% and 5% mining loss included.

 

  Hecla Mining Company ● 1-800-432-5291 ● hmc-info@hecla-mining.com     12
 

 

 

Measured Resources

 
 

Tons

 

Silver

 

Gold

 

Lead

 

Zinc

 

Copper

 

Silver

 

Gold

 

Lead

 

Zinc

 

Copper

 

Asset

(000)

 

(oz/ton)

 

(oz/ton)

 

%

 

%

 

%

 

(000 oz)

 

(000 oz)

 

(Tons)

 

(Tons)

 

Tons

 

Greens Creek (6)

  339     9.5     0.11     2.6     9.4     -     3,233     36     8,800     31,700     -  

Lucky Friday (6,7)

  7,587     7.6     -     4.9     2.7     -     57,314     -     370,240     204,490     -  

Casa Berardi (8)

  1,952     -     0.15     -     -     -     -     299     -     -     -  

San Sebastian (6,9)

  -     -     -     -     -     -     -     -     -     -     -  

Fire Creek (6,10)

  64     0.7     0.92     -     -     -     47     58     -     -     -  

Hollister (6,11)

  104     4.0     0.92     -     -     -     420     96     -     -     -  

Midas (6,12)

  183     6.7     0.45     -     -     -     1,235     82     -     -     -  

Heva (14)

  5,480     -     0.06     -     -     -     -     304     -     -     -  

Hosco (14)

  33,070     -     0.04     -     -     -     -     1,296     -     -     -  

Rio Grande Silver (15)

  -     -     -     -     -     -     -     -     -     -        

Star (16)

  -     -     -     -     -     -     -     -     -     -     -  

Total

  48,778                                   62,249     2,172     379,040     236,190     -  

 

Indicated Resources

 
 

Tons

 

Silver

 

Gold

 

Lead

 

Zinc

 

Copper

 

Silver

 

Gold

 

Lead

 

Zinc

 

Copper

 

Asset

(000)

 

(oz/ton)

 

(oz/ton)

 

%

 

%

 

%

 

(000 oz)

 

(000 oz)

 

(Tons)

 

(Tons)

 

Tons

 

Greens Creek (6)

  7,128     13.2     0.10     3.1     8.1     -     94,197     690     218,950     577,650     -  

Lucky Friday (6,7)

  2,498     8.0     -     5.2     2.5     -     20,049     -     128,830     61,480     -  

Casa Berardi (8)

  10,797     -     0.08     -     -     -     -     906     -     -     -  

San Sebastian (6,9)

  2,243     6.5     0.05     2.5     3.5     1.6     14,690     115     30,410     42,710     19,780  

Fire Creek (6,10)

  307     0.5     0.54     -     -     -     158     164     -     -     -  

Fire Creek - Open Pit (13)

  42,877     0.1     0.03     -     -     -     2,350     1,093     -     -        

Hollister (6,11)

  135     2.6     0.64     -     -     -     350     86     -     -     -  

Midas (6,12)

  722     4.5     0.37     -     -     -     3,228     267     -     -     -  

Heva (14)

  5,570     -     0.07     -     -     -     -     369     -     -     -  

Hosco (14)

  31,620     -     0.04     -     -     -     -     1,151     -     -     -  

Rio Grande Silver (15)

  516     14.8     -     2.1     1.1     -     7,620     -     10,760     5,820     -  

Star (16)

  1,126     2.9     -     6.2     7.4     -     3,301     -     69,900     83,410     -  

Total

  105,538                                   145,944     4,841     458,850     771,070     19,780  

 

Measured & Indicated Resources

 
 

Tons

 

Silver

 

Gold

 

Lead

 

Zinc

 

Copper

 

Silver

 

Gold

 

Lead

 

Zinc

 

Copper

 

Asset

(000)  

(oz/ton)

 

(oz/ton)

 

%

 

%

 

%

 

(000 oz)

 

(000 oz)

 

(Tons)

 

(Tons)

 

Tons

 

Greens Creek (6)

  7,467     13.0     0.10     3.1     8.2     -     97,430     726     227,740     609,350     -  

Lucky Friday (6,7)

  10,084     7.7     -     4.9     2.6     -     77,363     --     499,070     265,970     -  

Casa Berardi (8)

  12,749     -     0.09     -     -     -     -     1,205     -     -     -  

San Sebastian (6,9)

  2,243     6.5     0.05     2.5     3.5     1.6     14,690     115     30,410     42,710     19,780  

Fire Creek (6,10)

  371     0.6     0.60     -     -     -     205     222     -     -        

Fire Creek - Open Pit (13)

  42,877     0.1     0.03     -     -     -     2,350     1,093     -     -     -  

Hollister (6,11)

  239     3.2     0.76     -     -     -     770     182     -     -     -  

Midas (6,12)

  905     4.9     0.39     -     -     -     4,463     349     -     -     -  

Heva (14)

  11,050     -     0.06     -     -     -     -     672     -     -     -  

Hosco (14)

  64,690     -     0.04     -     -     -     -     2,447     -     -     -  

Rio Grande Silver (15)

  516     14.8     -     2.1     1.1     -     7,620     -     10,760     5,820     -  

Star (16)

  1,126     2.9     -     6.2     7.4     -     3,301     -     69,900     83,410        

Total

  154,316                                   208,193     7,012     837,880     1,007,260     19,780  

 

  Hecla Mining Company ● 1-800-432-5291 ● hmc-info@hecla-mining.com     13
 

 

 

Inferred Resources

 
 

Tons

 

Silver

 

Gold

 

Lead

 

Zinc

 

Copper

 

Silver

 

Gold

 

Lead

 

Zinc

 

Copper

 

Asset

(000)  

(oz/ton)

 

(oz/ton)

 

%

 

%

 

%

 

(000 oz)

 

(000 oz)

 

(Tons)

 

(Tons)

 

Tons

 

Greens Creek (6)

  2,470     14.6     0.09     3.0     7.3     -     35,982     219     74,410     181,400     -  

Lucky Friday (6,7)

  2,861     8.7     -     6.3     2.6     -     24,809     -     181,180     74,430     -  

Casa Berardi (8)

  6,222     -     0.10     -     -     -     -     652     -     -     -  

San Sebastian (6,17)

  3,487     6.6     0.04     1.7     2.5     1.3     22,948     143     12,110     17,440     8,890  

Fire Creek (6,10)

  565     0.5     0.53     -     -     -     288     299     -     -     -  

Fire Creek - Open Pit (13)

  31,707     0.1     0.03     -     -     -     2,882     1,085     -     -     -  

Hollister (6,11,18)

  550     3.1     0.40     -     -     -     1,716     223     -     -     -  

Midas (6,12)

  573     3.0     0.34     -     -     -     1,723     198     -     -     -  

Heva (14)

  4,210     -     0.08     -     -     -     -     350     -     -     -  

Hosco (14)

  7,650     -     0.04     -     -     -     -     314     -     -     -  

Rio Grande Silver (19)

  3,078     10.7     0.01     1.3     1.1     -     33,097     36     40,990     34,980     -  

Star (16)

  3,157     2.9     -     5.6     5.5     -     9,432     -     178,670     174,450     -  

Monte Cristo (20)

  913     0.3     0.14     -     -     -     271     131     -     -     -  

Rock Creek (21)

  100,086     1.5     -     -     -     0.7     148,736     -     -     -     658,680  

Montanore (22)

  112,185     1.6     -     -     -     0.7     183,346     -     -     -     759,420  

Total

  279,714                                   465,229     3,648     487,360     482,700     1,426,990  

 

Note: All estimates are in-situ except for the proven reserves at Greens Creek and San Sebastian which are in surface stockpiles. Resources are exclusive of reserves.

 

(6) Mineral resources are based on $1350 gold, $21 silver, $1.10 lead, $1.20 zinc and $3.00 copper, unless otherwise stated.

(7) Measured and indicated resources from Gold Hunter and Lucky Friday vein systems are diluted and factored for expected mining recovery.

(8) Measured, indicated and inferred resources are based on $1,350 gold and a US$/CAN$ exchange rate of 1:1.33 Underground resources are reported at a minimum mining width of 6.6 to 9.8 feet (2 m to 3 m)

    Resources at Casa Berardi were determined by Jonathan Archambault-Giroux, P. Geo., Que., Real Parent, P.Geo. Que., and Alain Quenneville, P. Eng., Que. unless otherwise stated.

(9) Indicated resources reported at a minimum mining width of 5.9 feet (1.8 m) for Hugh Zone, Middle Vein, North Vein, and East Francine Vein and 4.9 feet (1.5 m) for Andrea Vein San Sebastian lead, zinc and copper grades are for 1,224,900 tons of indicated resource within the Middle Vein and the Hugh Zone of the Francine Vein.

(10) Recoveries at Fire Creek for gold and silver are 94% and 92%. Au equivalent cutoff grade of 0.297 oz/ton. The minimum mining width is defined as four feet or the vein true thickness plus two feet, whichever is greater.

(11) Recoveries at Hollister for gold and silver are 87% and 80%. Au equivalent cutoff grade of 0.352 oz/ton. The minimum mining width is defined as four feet or the vein true thickness plus two feet, whichever is greater.

(12) Recoveries at Midas for gold and silver are 93% and 88% Au equivalent cutoff grade of 0.217 oz/ton. The minimum mining width is defined as four feet or the vein true thickness plus two feet, whichever is greater.

(13) Indicated and inferred open-pit resources for Fire Creek were calculated November 30, 2017 using recoveries for gold and silver of 65% and 30% for oxide material and 60% and 25% for mixed oxide-sulfide material.

     Open pit resources are calculated at $1400 gold and $19.83 silver and cut-off grade of 0.01 Au Equivalent oz/ton and is inclusive of 10% mining dilution and 5% ore loss. Open pit mineral resources exclusive of underground mineral resources.

       NI43-101 Technical Report for the Fire Creek Project, Lander County, Nevada; Effective Date March 31, 2018; prepared by Practical Mining LLC, Mark Odell, P.E. for Hecla Mining Company, June28, 2018

(14) Measured, indicated and inferred resources were estimated in by Goldminds Geoservices Inc. with effective date 12-July-2013, and are based on $1,300 gold and a US$/CAN$ exchange rate of 1:1.

     The resources are in-situ without dilution and material loss.

       NI43-101 Technical Report, Mineral Resource Update, Heva-Hosco Gold Projects, Rouyn-Noranda, Quebec, Hecla Quebec, December 2013

       Prepared by: Claude Duplessis, Eng. Project Manager - GoldMinds Geoservices Inc.; Maxime Dupéré, P.Geo - SGS Canada Inc. (Geostat)

(15) Indicated resources reported at a minimum mining width of 6.0 feet for Bulldog; resources based on $26.5 Ag, $0.85 Pb, and $0.85 Zn

(16) Indicated and Inferred resources reported using $21 silver, $0.95 lead, $1.10 lead minimum mining width of 4.3 feet.

(17) Inferred resources reported at a minimum mining width of 5.9 feet (1.8 m) for Hugh Zone, Middle Vein, North Vein, and East Francine Vein and 4.9 feet (1.5 m) for Andrea Vein San Sebastian lead, zinc and copper grades are for 702,600 tons of inferred resource within the Middle Vein and the Hugh Zone of the Francine Vein.

(18) Inferred resources for the Hatter Project at the Hollister Mine calculated using recoveries for gold and silver of 82.7% and 71.8% and an Au equivalent cutoff grade of 0.27 oz/ton

(19) Inferred resources reported at a minimum mining width of 6.0 feet for Bulldog, 5.0 feet for Equity & North Amethyst veins; resources based on $1400 Au, $26.5 Ag, $0.85 Pb, and $0.85 Zn.

(20) Inferred resource reported at a minimum mining width of 5.0 feet; resources based on $1400 Au, $26.5 Ag.

(21) Inferred resource at Rock Creek reported at a minimum thickness of 15 feet and adjusted given mining restrictions as defined by U.S. Forest Service, Kootenai National Forest in the June 2003 'Record of Decision, Rock Creek Project'.

(22) Inferred resource at Montanore reported at a minimum thickness of 15 feet and adjusted given mining restrictions defined by U.S. Forest Service, Kootenai National Forest, Montana DEQ in December 2015 'Joint Final EIS, Montanore Project' and the February 2016 U.S Forest Service - Kootenai National Forest 'Record of Decision, Montanore Project'.

 

  Hecla Mining Company ● 1-800-432-5291 ● hmc-info@hecla-mining.com     14
 

 

 

Table B – Assay Results – Q4 2018

 

Greens Creek (Alaska)

 

Zone

Drill Hole

Number

Drillhole

Azm/Dip

Sample

From

Sample

To

True

Width

(feet)

Silver

(oz/ton)

Gold

(oz/ton)

Zinc

(%)

Lead

(%)

Depth From

Mine Portal

(feet)

Deep 200 South

GC5004

243/-72

189.5

198.4

8.8

10.7

0.02

6.9

3.7

-1466

 

GC5004

243/-72

219.0

237.0

17.8

43.8

0.03

4.4

1.8

-1494

 

GC5004

243/-72

260.0

276.0

15.4

58.1

0.01

2.6

1.1

-1529

 

GC5004

243/-72

340.0

341.5

1.4

12.1

0.17

9.1

4.7

-1579

 

GC5004

243/-72

440.0

441.0

0.8

30.7

0.02

0.7

0.3

-1699

 

GC5004

243/-72

663.5

665.0

1.4

22.3

0.05

0.4

0.3

-1914

 

GC5007

243/-86

206.5

212.7

5.7

19.2

0.05

3.2

1.6

-1487

 

GC5007

243/-86

225.0

229.0

4.0

14.7

0.01

2.0

0.4

-1504

 

GC5007

243/-86

371.8

373.3

1.3

18.9

0.02

0.4

0.2

-1651

 

GC5013

263/-65

195.7

198.0

2.2

26.8

0.02

1.7

0.7

-1457

 

GC5013

263/-65

200.5

207.0

6.3

50.8

0.04

3.2

1.6

-1462

 

GC5013

263/-65

211.7

213.7

2.0

12.1

0.01

8.8

4.5

-1471

 

GC5013

263/-65

257.0

260.0

2.8

72.0

0.02

6.8

4.4

-1512

 

GC5018

243/-55

281.0

283.5

1.9

21.7

0.01

9.8

5.0

-1509

 

GC5018

243/-55

606.5

610.5

4.0

20.3

0.20

0.8

0.4

-1773

 

GC5022

243/-47

415.0

416.0

0.8

68.6

0.26

1.6

0.8

-1583

 

GC5022

243/-47

449.5

455.0

5.3

180.4

0.36

14.0

7.2

-1609

 

GC5030

63/-74

598.5

601.0

1.6

13.6

0.04

3.5

3.0

-1859

 

GC5030

63/-74

657.0

664.0

6.9

18.2

0.08

4.2

2.2

-1916

 

GC5044

243/-73

179.0

190.5

11.0

24.0

0.01

1.5

0.8

-1453

 

GC5044

273/-73

235.0

238.0

3.0

16.7

0.03

1.7

0.6

-1505

 

GC5044

273/-74

671.5

695.7

24.0

28.8

0.11

2.2

1.2

-1782

 

GC5044

243/-74

720.0

725.0

4.5

16.0

0.26

0.7

0.6

-1922

 

GC5047

243/-63

193.5

208.0

12.7

24.8

0.00

2.3

1.1

-1453

 

GC5047

243/-63

222.5

235.0

12.3

31.2

0.01

0.7

0.3

-1479

 

GC5047

243/-63

366.0

394.0

22.5

64.4

0.02

5.0

2.4

-1605

 

GC5059

63/-87

479.0

482.0

3.0

18.7

0.04

0.3

0.1

-1761

 

GC5073

243/-83

479.6

484.6

5.0

81.5

0.40

1.1

0.6

-1759

 

GC5073

243/-83

663.0

678.0

14.9

14.6

0.10

0.7

0.3

-1939

 

GC5076

243/-73

522.0

524.5

2.1

17.5

0.03

7.3

3.8

-1782

 

GC5076

243/-73

684.0

715.0

29.9

44.6

0.18

2.5

1.2

-1937

 

GC5079

243/-62

210.0

218.0

7.8

36.1

0.02

5.7

2.6

-1470

 

GC5079

243/-62

231.0

233.5

1.5

15.3

0.05

0.3

0.2

-1488

 

GC5079

243/-62

271.5

286.5

13.1

13.4

0.04

5.8

2.7

-1525

 

GC5079

243/-62

294.0

298.4

4.4

13.3

0.01

4.3

1.9

-1544

 

GC5079

243/-63

317.5

319.5

1.7

22.0

0.01

0.4

0.2

-1566

 

GC5083

243/-53

583.0

588.0

3.8

16.2

0.02

0.4

0.2

-1753

Upper Plate

GC5048

241/26

611.5

616.0

1.5

14.8

0.09

2.2

1.2

266

 

GC5054

239/37

263.5

267.4

2.7

19.1

0.01

4.7

5.3

161

 

  Hecla Mining Company ● 1-800-432-5291 ● hmc-info@hecla-mining.com     15
 

 

 

Zone

Drill Hole

Number

Drillhole

Azm/Dip

Sample

From

Sample

To

True

Width

(feet)

Silver

(oz/ton)

Gold

(oz/ton)

Zinc

(%)

Lead

(%)

Depth From

Mine Portal

(feet)

 

GC5054

239/37

363.5

365.0

1.1

18.0

0.02

10.2

6.1

221

 

GC5054

239/37

389.5

390.5

0.8

15.2

0.01

12.1

4.7

237

 

GC5057

235/56

199.0

204.0

4.9

34.2

0.01

2.5

1.5

166

 

GC5057

235/56

321.6

322.7

0.9

18.0

0.02

24.2

11.1

266

 

GC5060

230/70

195.0

202.5

7.4

39.8

0.01

5.9

4.0

188

 

GC5060

230/70

284.5

293.5

8.6

13.6

0.01

7.1

3.6

270

 

GC5062

222/51

199.9

204.3

3.7

20.5

0.00

2.1

0.9

156

 

GC5062

222/51

316.0

328.0

11.4

21.4

0.05

2.6

0.9

242

 

GC5066

91/78

204.0

208.0

4.0

12.1

0.02

4.6

2.4

207

 

GC5066

91/78

240.5

243.5

3.0

13.5

0.02

12.3

9.8

243

 

GC5088

252/60

153.0

171.5

14.2

11.4

1.04

2.2

1.6

134

 

GC5088

252/60

290.5

297.0

6.0

18.9

0.02

14.1

7.0

252

 

GC5093

248/41

238.0

243.0

2.4

23.2

0.01

2.5

1.1

152

 

GC5093

248/41

364.0

368.0

2.9

24.5

0.02

14.7

5.2

232

 

GC5093

248/41

381.0

382.0

0.8

16.1

0.01

5.8

2.5

243

 

GC5095

247/35

243.5

244.5

0.6

35.5

0.03

10.1

4.5

138

 

GC5099

246/28

286.5

290.0

1.9

29.5

0.13

8.4

3.4

133

East Ore

GC5009

59/-6

350.5

353.5

2.4

29.2

0.22

3.1

0.3

600

 

GC5012

56/-41

268.0

269.0

1.0

18.7

0.10

11.9

5.0

457

 

GC5012

56/-41

289.0

294.5

5.3

24.1

0.42

5.3

1.5

444

 

GC5017

68/3

370.0

371.8

1.5

11.1

0.29

25.9

8.6

647

 

GC5024

243/-47

306.0

310.0

4.0

41.4

0.09

4.0

1.6

493

 

GC5027

71/-49

303.5

305.0

1.5

19.6

0.08

18.4

4.3

403

 

GC5028

81/-71

314.5

315.5

1.0

12.5

0.05

35.0

9.4

333

 

GC5029

76/-1

368.5

369.5

0.8

13.9

0.12

6.7

3.4

631

 

GC5032

91/-31

331.0

332.0

0.9

77.8

0.30

16.2

6.1

336

 

GC5034

82/0

396.2

400.0

3.7

99.7

0.28

4.4

1.6

636

 

GC5035

82/-14

368.0

374.7

6.6

11.1

0.18

18.0

6.0

542

 

GC5053

46/-1

353.0

356.3

3.0

22.0

0.16

6.2

3.1

618

 

GC5056

46/-10

343.0

344.3

1.3

15.2

0.16

10.5

6.7

569

 

GC5058

39/13

400.0

407.0

6.1

38.5

0.11

7.4

3.5

704

 

GC5061

39/4

366.2

369.2

2.6

26.0

0.14

2.7

1.4

641

 

GC5072

79/11

418.0

422.5

4.1

13.4

0.41

18.4

3.5

710

 

GC5074

35/14

403.0

412.0

8.0

20.6

0.08

2.0

1.1

719

 

GC5075

51/17

410.4

418.0

6.4

11.3

0.36

31.4

19.8

736

 

GC5084

48/20

443.0

449.3

5.6

30.1

0.20

17.6

9.8

772

 

GC5089

36/-6

354.0

355.0

1.0

37.3

0.28

11.3

5.4

593

 

GC5090

36/-6

367.5

372.0

4.3

28.7

0.22

5.8

2.7

648

 

GC5094

247/35

308.0

313.0

4.8

28.6

0.26

9.9

4.6

533

 

GC5096

51/-31

296.0

304.5

8.4

29.5

0.11

3.6

1.3

486

 

GC5100

27/-26

280.5

285.5

4.6

18.2

0.32

2.4

1.1

507

 

  Hecla Mining Company ● 1-800-432-5291 ● hmc-info@hecla-mining.com     16
 

 

 

Casa Berardi (Quebec)

 

Zone

Drill Hole

Number

Drill Hole

Section

Drill Hole

Azm/Dip

Sample

From

Sample

To

True

Width

(feet)

Gold

(oz/ton)

Depth From

Mine Surface

(feet)

Lower 123 - 710-790 Area

CBP-0750-017

12107

270/16

108.0

111.0

8.5

0.12

2402

123

CBP-0750-017

12099

270/16

115.5

118.5

8.5

0.29

2396

123

CBP-0750-017

12094

270/16

120.8

124.6

10.8

0.39

2392

123

CBP-0750-018

12180

260/-18

35.7

36.0

0.8

0.41

2523

123

CBP-0750-018

12129

260/-18

90.0

90.7

1.8

0.27

2580

123

CBP-0750-020

12139

246/-15

81.0

87.0

8.9

0.35

2553

Lower 123 - 970-1010 Area

CBP-0970-037

12500

182/21

171.5

174.5

7.1

0.12

3104

123

CBP-0970-038

12511

183/9

203.0

204.6

3.7

0.16

3217

123

CBP-0970-041

12532

179/-6

226.8

228.4

3.3

0.18

3299

123

CBP-0970-043

12463

172/43

152.6

160.9

22.5

0.18

3141

Upper Principal 124

CBP-0766

12785

180/-19

70.8

73.5

8.5

0.10

1007

East Mine 160 - 210-270 Area

CBE-0122

15892

22/27

231.0

235.6

7.9

0.12

703

160

CBE-0122

15896

22/27

243.2

245.0

2.7

0.20

687

160

CBE-0122

15901

22/27

254.2

258.5

6.6

0.12

677

160

CBE-0122

15907

22/27

267.0

271.5

6.8

0.11

666

160

CBE-0122

15923

22/27

308.0

311.4

8.5

0.13

633

160

CBE-0123

15856

22/19

209.7

213.0

8.1

0.31

793

160

CBE-0123

15891

22/19

215.2

223.5

19.9

0.16

785

160

CBE-0124

15827

3/10

187.5

196.2

26.2

0.10

882

160

CBE-0124

15834

3/10

220.5

223.7

9.2

0.12

870

160

CBE-0124

15836

3/10

231.0

232.5

4.3

0.14

867

160

CBE-0124

15840

3/10

249.0

252.0

8.6

0.13

861

160

CBE-0124

15848

3/10

285.0

288.0

8.5

0.12

851

160

CBE-0125

15747

340/18

183.3

187.0

10.6

0.09

809

160

CBE-0125

15723

340/18

286.5

287.7

20.3

0.21

731

160

CBE-0127

15708

327/10

207.0

208.0

3.1

0.14

873

160

CBE-0127

15703

327/10

222.9

223.7

2.5

0.15

867

WMCP Pit

CBF-105-017

11149

180/-61

221.4

242.0

33.1

0.03

664

105-111

CBF-105-018

11052

360/-47

146.3

161.8

37.7

0.02

366

105-111

CBF-105-019

11055

180/-60

159.0

174.7

23.9

0.03

489

105-111

CBF-105-019

11056

180/-60

181.5

188.4

9.8

0.12

542

105-111

CBF-105-020

11054

180/-56

137.0

183.0

80.0

0.05

450

105-111

CBF-105-022

11159

180/-45

128.2

132.0

9.2

0.03

311

105-111

CBF-105-022

11158

180/-45

165.0

168.0

7.2

0.04

394