Seized gold shipment returned to Hecla

A $2 million gold shipment seized by Venezuelan government officials in March has been returned to Hecla Mining Co., the company reported Tuesday.

“While it took some patience, we were successful in getting the gold back,” Hecla CEO Phil Baker told analysts during a conference call.

The gold was returned July 21. The 5,000-ounce shipment had been held at Venezuela’s central bank while the government reviewed the Coeur d’Alene-based company’s compliance with export taxes and laws. The audit was part of a national focus on the country’s gold industry, according to Hecla spokeswoman Vicki Veltkamp.

Venezuela, best known for oil production, is also rich in gold. Much of the country’s gold is hand-mined by itinerant miners. Hecla, which operates the La Camorra mine in eastern Venezuela, is the country’s largest gold exporter.

“They were trying to stop these small miners from exporting the gold without going through proper channels,” Veltkamp said. “We’ve always done it properly, but once we got caught in the web, it took longer to resolve than we expected.”

Hecla had no trouble getting other gold shipments out of the country during the audit, she said.

In related news, the company reported second quarter earnings of $2.7 million, or 2 cents per share Tuesday, compared with earnings of $2.5 million, or 2 cents per share, for the second quarter of 2003.

Hecla, which also operates mines in the U.S. and Mexico, has been very successful in Venezuela, despite high inflation and political unrest in the country, Veltkamp said.

Gold from the low-cost La Camorra Mine has been a pivotal part of the company’s return to profitability in recent years. Hecla plans to spend $30 million open a second mine gold mine in Venezuela by 2006.

The La Camorra Mine is located in a remote area. Strikes and political rallies at the capital city of Caracas haven’t affected its operations, Veltkamp said. The outcome of an Aug. 15 recall election of President Hugo Chavez isn’t likely to affect Hecla’s business dealings either, she added.

“We are politically neutral,” she said. “We think if another administration comes in, we’ll work equally well with them.”