August 9, 2007 in Business

Lead, zinc help boost bottom line at Hecla

From Staff Reports The Spokesman-Review

Silver isn’t all that’s sparkling at local mining firms these days.

Higher prices for base metals contributed to Hecla Mining Co.’s second quarter earnings of $24.3 million — the second highest quarterly earnings on record for the 116-year-old firm, company officials said Wednesday.

Lead and zinc are byproducts of silver mining at Hecla’s properties. Lead prices rose 70 percent over the past year to trade at an average price of 90 cents per pound during the past six months. Prices keep rising, recently nearing $1.50 a pound.

To put that in perspective, officials said a 50-cent-per-pound gain in lead prices would boost Hecla’s bottom line by nearly $20 million over a year’s time.

Global economic growth has led to 20-year highs in metals prices, according to Phil Baker, Hecla’s president and chief executive officer.

Zinc prices rose nearly 30 percent to trade at $1.62 per pound during the first six months of the year. Silver was up 21 percent, at $13.33 per ounce. Gold rose 12 percent to $659 per ounce.

To take advantage of higher metals prices, Hecla’s Lucky Friday Mine in Mullan, Idaho, is working to recover more zinc through its mining operations.

Coeur d’Alene Mines Corp. also cited metals prices as a factor in the firm’s second quarter income of $11.9 million. However, lower silver production at the company’s Cerro Bayo in Chile and a 30 percent increase in mineral exploration costs contributed to a decrease in income, compared with last year’s second quarter results of $32.6 million. The 2006 results included a one-time gain of $11.2 million from the sale of the Galena Mine and related properties in Idaho’s Silver Valley.

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