Hecla will put $30M into mine in Venezuela

COEUR d’ALENE — Hecla Mining Co. will spend $30 million to develop a new gold mine in eastern Venezuela.

The Mina Isidora mine will play a strategic role in Hecla’s plans to double its low-cost gold production within five years, company CEO Phil Baker told shareholders last week. Hecla produced about 200,000 ounces of gold last year. The Mina Isidora will be ready for mining by late 2005, and it will eventually produce about 100,000 ounces of gold annually, according to company projections.

Hecla has become Venezuela’s largest gold producer and exporter. The company also operates the La Camorra mine in eastern Venezuela, which produced nearly 130,000 ounces of gold last year. The two mines will share milling facilities, which will lower operating costs, according to Baker.

Baker said the company continues to enjoy a good relationship with the Venezuelan government, though that government still is holding a $2 million gold shipment from the La Camorra mine.

The shipment was delayed in March, while the government reviewed Hecla’s compliance with the country’s export taxes and laws.

The review was part of a larger focus by the Venezuelan government on the mining industry.

Hecla met all government’s requirements, said company spokeswoman Vicki Veltkamp. However, the gold shipment continues to be held while the government settles an unrelated tax lien against Monarch Resources, the former mine operators, she said.

The case is moving through the Venezuelan courts. If the shipment is seized to settle the lien, Monarch Resources has agreed to reimburse Hecla, Veltkamp said.

The La Camorra Mine continues to operate, and Hecla hasn’t had any trouble with later gold shipments, she said.