Hecla Mining Co. recently reported the results from another successful year of exploration, achieving record silver reserves despite the use of reduced metals prices for the calculation and net of 2014 silver production.
Proven and probable silver reserves totaled 173 million oz, the highest level in company history, increasing for the ninth consecutive year. Measured and indicated silver resources increased by 10.3%, and inferred resources increased by 2.5%. Proven and probable gold reserves fell by 1.5% to 2.1 million oz. Measured and indicated gold resources were unchanged, and inferred gold resources increased 7.2%. Proven and probable gold reserves were calculated using $17.25/oz for silver, $1,225/oz for gold, $0.95/lb for lead and $0.90/lb for zinc.
At San Sebastian, Mexico, total silver equivalent indicated resources increased 46% and inferred resources increased 18%. High-grade, near surface resources have been identified. Exploration and pre-development expenditures in 2015 are projected to be a combined $18 million, $1 million less than 2014 levels.
“It is a testament to the quality of our projects that we added silver reserves for the ninth consecutive year using one of the lowest price assumptions in the industry and after producing 11.1 million oz of silver,” said Phillips S. Baker, Jr., Hecla’s president and CEO. “The growth in our measured and indicated resources gives us confidence that we can continue to add reserves in the future. Of particular note is the 46% increase in indicated resources at San Sebastian, especially the presence of high-grade material near surface.” Hecla replaced mined silver and added additional reserves and silver resources (measured, indicated and inferred) this year.
After replacing 2014 production at Greens Creek, both silver and gold reserves increased in spite of using reduced metals prices for the calculation. This replacement of precious metal reserves at Greens Creek has been a trend that has continued for the last 11 years. The primary addition came from the net conversion of 575,500 tons of resource material to reserve, mostly in the Deep 200 South, 200 South and Northwest West (NWW) zones. The gold grade of these tons is 70% higher than last year’s reserves, and the silver grade is almost 40% higher. Measured and indicated resources decreased at Greens Creek by 3.5% to 9.1 million oz of silver due to the conversion of some of that resource to reserve at Deep 200 South and 200 South. Inferred resources increased by 48% to 47 million oz of silver, mostly from the NWW, 200 South and East Ore zones.
At Lucky Friday, there was a 2.1% increase in proven and probable silver reserves to 78.9 million oz this year at 1.3 oz/ton higher average silver grade and 0.8% higher lead grade. The total measured and indicated resources increased 7.7% to 125 million silver oz, and inferred resources decreased 25% to 41.2 million silver oz. Reserve additions are due to conversion of resources that are in the life-of-mine model and incorporate material from intermediate veins that provide “shadow” stopes for extraction of the 30 Vein.
At Casa Berardi, there was a loss of 4.1% in the proven and probable reserve to 1.34 million gold oz. Mining losses in the 113 and 124 zones were partially offset by reserve additions in the 118, 123 and the East Mine Crown Pillar open pit. Estimates of measured and indicated resources decreased by 5% to 1.35 million gold oz, and inferred resources increased by 0.5% to 604,100 gold oz.
At San Sebastian, the East Francine Vein has an inaugural silver equivalent indicated resource of 4.5 million oz at an average grade of 0.22 oz/ton gold and 64.1 oz/ton silver and an inferred resource of 2.6 million silver equivalent oz at an average grade of 0.20 oz/ton gold and 18.5 oz/ton silver. All of this resource is within 100 m of surface. The North Vein has an inaugural silver equivalent indicated resource of 4.9 million oz at an average grade of 0.10 oz/ton gold and 4.5 oz/ton silver and inferred resource of 1.2 million silver equivalent oz at an average grade of 0.09 oz/ton gold and 4.2 oz/ton silver. All of this resource is within 150 m of the surface. The Middle Vein has a new silver equivalent indicated resource of 13.9 million silver equivalent oz at an average grade of 0.06 oz/ton gold and 13.1 oz/ton silver and inferred resource of 0.5 million oz at an average grade of 0.01 oz/ton gold and 6.2 oz/ton silver, an increase of 13% in indicated resource oz and a nearly five-fold increase in inferred resource oz over December 31, 2013, levels. Most of this resource is within 250 m of surface.