June 20, 2008 in Idaho

Firm sells Venezuelan gold mine

By The Spokesman-Review
 

Hecla Mining Co. is selling its Venezuelan gold properties for $25 million.

The Coeur d’Alene firm’s decision to sell was prompted by rising costs at its Venezuelan mines, as well as investors’ concerns about President Hugo Chavez’s leftist government.

“Recently, the market’s view of Venezuela has been one of political uncertainty,” said Vicki Veltkamp, Hecla’s spokeswoman. “We have operated very successfully down there since 1999… (But) people worry about Venezuela, which isn’t necessarily good in the marketplace.”

Rusoro Mining Ltd. of Vancouver, B.C., will buy the properties for $20 million in cash and 4.3 million in shares. Hecla expects to record a $10 million to $12 million pre-tax loss on the sale, which is subject to regulatory approval.

The Venezuelan gold mines were important to Hecla’s bottom line in the early 2000s when the company struggled through a period of depressed metals prices, CEO Phil Baker said in a press release. But with revenue from the company’s domestic silver operations growing, Venezuelan operations accounted for just 3 percent of Hecla’s gross profits last year.


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