WALLACE – The closed Lucky Friday Mine will begin rehiring workers in July and should return to a full workforce by the end of the year, said Phil Baker, Hecla Mining Co.’s chief executive officer.
More than 110 of the Lucky Friday’s 250 workers lost their jobs when federal inspectors closed the mine’s main shaft in January following a series of accidents at the underground silver mine.
Mine officials expect to hire a couple dozen workers back initially, with hiring picking up speed as Hecla regains access to parts of the Lucky Friday, Baker said. About 40 percent of the 6,100-foot-deep Silver Shaft has been cleaned and repaired. The Mullan, Idaho, mine is expected to restart silver production early next year after the work is complete.
Progress at the Lucky Friday figured prominently in Baker’s annual address to Hecla’s shareholders, which took place Thursday morning at the Wallace Elks Lodge. Hecla’s stock price has plunged by 29 percent since the mine closed, leading to two shareholder lawsuits against the company. Hecla lowered its estimated 2012 silver output from more than 9 million ounces to 7 million as a result of the Lucky Friday’s closure. All of this year’s production will come from Hecla’s Greens Creek Mine in Alaska.
Baker said the company is poised to rebound from the troubles at the Lucky Friday, which included two fatal accidents last year.
“That has hit Hecla very hard,” Baker said of the fatalities. “We’re determined to make sure that never happens again.”
The accidents were the first fatalities at the Lucky Friday in 25 years. Larry “Pete” Marek was killed April 15, 2011, in a rockfall at the mine. Federal officials said safety lapses contributed to his death. Brandon Gray died Nov. 19 from injuries suffered when his safety harness failed and he was pulled into a bin of crushed rock.
Hecla will spend about $40 million in capital improvements this year at the Lucky Friday, which Baker said has at least another 30 years of silver production left.
“We think it’s a spectacular asset with a long history,” he said. “It’s worth the investment.”
Baker said he thinks many of the laid-off workers will return to the Lucky Friday Mine, where many of them have years of seniority accrued. Hecla has continued to pay health insurance for workers during the layoffs.
With silver prices at record highs, top miners at the Lucky Friday were earning six-figure incomes with wages and production bonuses.
A $200 million expansion project at the Lucky Friday will resume when the mine reopens, Baker said, which will bring back an additional 120 contract workers.
Hecla also is exploring the possibility of reopening the historic Star Morning Mine in Burke Canyon, which would increase the company’s production and workforce in the Silver Valley. Baker said that Hecla will know more of the Star Morning’s prospects after it finishes two studies this fall.
About 85 people attended Hecla’s annual meeting. Members of the media were not allowed to attend shareholders’ question-and-answer session with Baker.
Baker said shareholder questions revolved around how to boost Hecla’s stock price. Shares were trading at $4.50 on Thursday afternoon.
“We think it will perform with the Lucky Friday going back into production,” he said.