November 6, 2012 in Business

Hecla recalls workers to resume Lucky Friday mining

By The Spokesman-Review
 

Hecla Mining Co. said today it expects to resume mining at the Lucky Friday Mine in the first quarter of 2013 and anticipates producing more than 2 million ounces of silver there next year.

The update came today as the Coeur d’Alene-based company reported a loss in the third quarter, missing the forecast of analysts.

Shares of Hecla’s stock were down 35 cents, or 5 percent, to $5.98 in mid-day trading.

The Mine Safety and Health Administration ordered the Mullan, Idaho, mine closed for extensive repairs following a November 2011 accident that fatally injured miner Brandon Gray, 26. His death followed a series of accidents, including an April 2011 cave-in that killed Larry “Pete” Marek, 53.

More than 110 of the mine’s 250 workers lost their jobs as a result of the shutdown.

Cleanup and repair of the 6,100-foot-deep Silver Shaft advanced on schedule in the past three months and should be finished by the end of the year, Hecla reported today its quarterly earnings statement.

“Work crews have completed the Silver Shaft rehabilitation work to approximately the 5,700 (foot) level, which is 400 feet from the shaft bottom,” President and CEO Phillips S. Baker, Jr. stated.

Also, at the 5,900-foot level, a bypass is being built around an area impacted by a rock burst in December 2011, the company said.

Hecla said it has recalled all employees necessary to reach full production again at the Lucky Friday Mine. The workers have received safety training, including new techniques in risk assessment and accident prevention designed to improve safe work practices, Hecla said.

In addition, Hecla is preparing to resume work early next year on the No. 4 Shaft project. The company has spent $90 million so far on the estimated $200 million project, which is planned to access extensions to reserves, resources and additional exploration targets. The No. 4 Shaft is expected to be completed in early 2016.

Hecla reported a third-quarter net loss of $885,000 and earnings after adjustments of $3.2 million, or 1 cent per basic share. Hecla’s net income was $55.9 million, or 19 cents per share, in the third quarter of 2011.

Revenue fell 32 percent to $81.9 million from the same quarter a year ago.

Third-quarter silver production was up 19 percent from the previous quarter, to 1.6 million ounces, at a cash cost of $3.52 per ounce. Operating cash flow for the quarter was $35.2 million.

Care-and-maintenance costs at the Lucky Friday Mine totaled $6.1 million for the third quarter, including depreciation of $1.5 million.

Hecla also operates the Greens Creek mine in Alaska and has exploration properties in four silver mining districts in the U.S. and Mexico.


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