Hecla Mining Co. reported the highest silver reserves in its more than 130-year history and provided an update on its exploration activity. The company’s year-end 2022 silver reserves increased to more than 240 million oz with the addition of Keno Hill’s almost 50 million oz of silver.
“Hecla’s silver reserves are at an all-time high,” said Phil Baker, president, and CEO of Hecla Mining. “In the past 15 years, we have replaced the 213 million oz mined and yet have almost five times the reserves we had at the start of 2008. That is over 400 million oz of silver that we have replaced and grown. We now have a half dozen silver properties to explore, primarily in the US and Canada, the most recent addition being the 88 square mile Keno Hill project in the Yukon.”
Drill testing of new targets at the Silver King, Coral-Wigwam, and Hector-Calumet confirmed the occurrence of favorable vein structures and high-grade silver mineralization in all three areas at Keno Hill. Exploration and definition drilling at Greens Creek in Alaska defined and expanded mineralization on strike with strong assay results from the Southwest Bench, 200 South, East, West, and Upper Plate ore zones.
“Keno Hill’s 2022 exploration results are particularly remarkable with only three targets drilled that all resulted in three meaningful, high-grade discoveries,” Baker said. “This reflects the quality of the land position and the knowledge of the long-standing team who have taken their experience at Bermingham and applied it to the new targets. These initial results exceed our already high expectations for the exploration potential of the district.”
On a consolidated basis, Hecla replaced the 14 million oz of silver produced during the year and increased proven and probable reserves by 21%, or 41 million oz over 2021. The increase was primarily due to the acquisition of Keno Hill. The company’s gold production of more than 180,000 oz was not replaced and proven and probable reserves declined 6% to 2.6 million oz due to cost increases which increased the cut-off grade at Casa Berardi in Quebec. Zinc production was replaced, and reserves increased 4% to 944,000 tons. Lead production of 55,000 tons was replaced with an increase of 7% to 785,000 tons of reserves.
Reserve metal price assumptions for 2022 were $17/oz silver, $1,600/oz gold, $1.15/lb zinc, and $0.90/lb lead, unchanged from 2021.
Measured and indicated silver ounces increased 6% to 219 million oz with increases at Greens Creek and the addition of Keno Hill which offset the decrease due to conversion of material to reserves at Lucky Friday mine in Idaho. Measured and indicated gold ounces also increased 6% to 3.7 million oz due mostly to increases at Casa Berardi.
Inferred silver resources increased 3% to 504 million oz while inferred gold resources increased 1% to 5.7 million oz due to increases at Greens Creek, Casa Berardi, and the inclusion of Keno Hill.
Resource metal price assumptions for 2022 were $21/oz silver, $1700/oz gold, $1.35/lb zinc and $1.15/lb lead, and $3/lb copper, also unchanged from 2021.
At Greens Creek, 2022 production was not replaced, where silver, gold, zinc, and lead reserves decreased by 7%, 1%, 4%, and 6%, respectively, over 2021 reserves. Lower margin material and material adjacent to historically mined areas with unknown backfill conditions was removed. A study is reviewing if some of this material may be returned to reserve.
Measured and indicated silver resources at year-end 2022 were 109 million oz, a 2% increase over 2021 due to drilling and resource conversion. Inferred silver resources increased 5% from exploration drilling to a total of 29 million oz.
At the Lucky Friday, mining of 4.8 million oz of silver was replaced, and proven and probable silver reserves are unchanged from 2021 at 74.7 million oz of silver. Proven and probable lead reserves increased 3% to 468,000 tons and zinc reserves increased 10% to 200,000 tons.
Measured and indicated silver resources decreased 27% to 58 million oz; lead and zinc measured and indicated resources decreased 23% and 27%, respectively. Decreases in measured and indicated resources are due to conversion to reserves (4.9 million silver oz, 39,000 lead tons, and 28,000 zinc tons) and increased cut-off grades removing some material.
Inferred resources decreased year-over-year and include 31 million oz of silver, a decrease of 25%; 225,000 tons of lead, a decrease of 28%; and 85,000 tons of zinc, a decrease of 35%. Decreases in inferred resources is mostly due to increased costs and increased cut-off grades along the edges of the resources and at the higher elevations of the 30 Vein. Drilling of inferred resources on the 30 Vein also converted material to higher resource classes and added 3 million oz to reserves.