Hecla Mining Reports A Record Loss For 1995

Hecla Mining Co. Thursday closed the books on its worst year, caused mostly by the write-down of the company’s investment in what was expected to be its most promising gold mine.

Though Hecla showed an improvement in the fourth quarter of 1995 over the same quarter last year, it lost more money for a single year than ever before, said Vicki Veltkamp, manager of corporate communications. In 1978, Hecla lost about $97 million after writing off an investment in a copper project, she said.

For the fourth quarter of 1995, Hecla lost $786,000, or two cents a share, compared with a loss of $22.5 million, or 47 cents a share in 1994. But during the fourth quarter of 1994, Hecla took an $18 million charge for reclamation and asset write-downs.

That pales to the charge Hecla took against earnings in the third quarter of 1995. The company removed from its books the $97 million carrying value of its prized Grouse Creek mine after engineers found there was far less gold in the central Idaho mine than they had thought.

With $4.8 million in additional charges, Hecla lost more than $104 million in the third quarter. All told, Hecla posted a $109.8 million loss for 1995, or $2.28 a share. That compares with a 1994 loss of $32.7 million, or 74 cents a share.

Bright spots in 1995 included:

The Lucky Friday silver mine showed a 27 percent gain in production. The Mullan mine produced about 1.7 million ounces of silver. Higher lead and zinc prices helped Hecla’s silver division turn a small profit for the year.

The sale of Hecla’s Apex cobalt processing facility in the third quarter and some gains on stock investments cut 1995 losses by $7.2 million.

In January of this year, Hecla completed a stock offering that earned the company $22 million. That money will go toward expanding the Lucky Friday mine and will pay for investments at the Greens Creek mine in Alaska.

Hecla owns about a third of the Greens Creek project, a large silver and gold mine that could produce 3 million ounces of silver and 20,000 ounces of gold for Hecla starting in early 1997. The company expects to invest about $20 million in Greens Creek this year.

The company has yet to decide the fate of Grouse Creek, where mining continues at a reduced pace. Hecla geologists are re-evaluating the ore body there and will come to a decision this spring about whether or not to continue mining at the site near Challis, Idaho.

Hecla may also look to bring its Rosebud gold mine in Nevada into production when and if the company can find the money to do it, said Art Brown, Hecla’s chairman, president and chief operating officer.

Hecla has lost money every year this decade except for 1990.

, DataTimes