Lucky Friday may get a boost
Higher silver prices are breathing new life into the 60-year-old Lucky Friday Mine.
On Wednesday, officials at Hecla Mining Co. said they were considering a $150 million to $200 million capital outlay at the mine in Mullan, Idaho, which could boost its silver production by 70 percent.
“Not that long ago, the Lucky Friday was considered a tired, little old mine,” said Ron Clayton, Hecla’s senior vice president of operations.
But with silver trading at $14 per ounce, Hecla officials are taking a second look at the Lucky Friday’s potential. The underground mine will produce about 3.5 million ounces of silver this year, at costs of about $4 per ounce. With a new mill and two new shafts — one at the surface and one underground to access deeper ore bodies — the mine could produce up to 6 million ounces of silver per year, officials said. This spring, the company will start a preliminary economic study of the possibilities.
About 210 employees work at the Lucky Friday, which is one of Shoshone County’s largest private employers. The capital investments could extend the mine’s operating life, and create more high-paying jobs in the area.
The average wage for a mining job in Shoshone County is more than $40,000, according to state figures. Lucky Friday workers could also finish the year with $30,000 each in bonuses, based on a profit-sharing plan at the mine and hourly increases tied to higher silver prices.
The Lucky Friday’s last major upgrade occurred in 1982, noted Phil Baker, Hecla’s president and chief executive officer. In recent years, the mine has operated in a “depression” mode, he said.
When silver prices dropped below $5 per ounce, Hecla hit a point where it was losing nearly $1 on every ounce of silver mined. In 2001, Hecla’s board of directors opted to defer spending at the Lucky Friday, scale back production and lay off two-thirds of the workers.
That was the Lucky Friday’s low point. Its fortunes started to rise again in late 2003, when increased worker productivity and rising silver prices convinced Hecla’s board to approve $8.5 million needed to reach a deposit with an estimated 28 million ounces of silver.
The modest investment paid off handsomely, positioning Hecla to cash in on rapidly rising silver prices, Baker said. Now, even higher silver prices are prompting Hecla officials to think about additional unexplored areas of the Lucky Friday, plus the potential for new mines in the 40 square miles that the company owns in Idaho’s Silver Valley.
“One of the best places to find silver is in a silver district,” said Vicki Veltkamp, Hecla’s spokeswoman.
If the results of the Lucky Friday’s preliminary economic study are encouraging, Hecla will follow up with a more detailed study in 2008. One of the proposals is to drill deeper. The Lucky Friday is already one of the deepest hard rock mines in the United States, extending more than a mile below the earth’s surface.
But, “we know the vein extends deeper,” Veltkamp said.
Some of the financing for a Lucky Friday expansion and further exploration could come from the sale of a Nevada gold property. Hecla plans to sell its stake in the Hollister Development Block to partner Great Basin Gold Inc. for $45 million in cash and $15 million in Great Basin’s stock, officials said.