Silver price puts squeeze on Hecla’s Lucky Friday

Pocked with old mining workings, Idaho’s “Silver Valley,” officially known as the Coeur d’Alene mining district, has produced more than US$4 billion in metals over the past century.

As the name would imply, the principal metal of interest is silver and the Lucky Friday mine has produced its fair share in its 48-year history. By the end of 1990, silver production over the mine’s life totalled over 92 million oz.

The mine, owned by Hecla Mining (NYSE), is near Mullen, Idaho.

With silver skulking at the US$4 level, many of the mines in the area have closed down while those remaining have been tightening belts in a struggle not only for profitability, but their very survival.

The Lucky Friday did shut down for a 14-month period in 1986 as a result of low silver prices but reopened in mid-1987. At the time of the shutdown, silver had bottomed out at the US$5.25 level, significantly higher than that seen at present.

Proven and probable reserves at the Lucky Friday at the end of 1990 were reported as 528,000 tons grading 14.5 oz. silver per ton, 13.4% lead and 2.7% zinc.

Mineralization occurs in an S-shaped, near-vertical vein bound at either end of its 1,500-ft. strike length by control faults. The Main vein splits at its southwest end into a second parallel vein in the footwall. The overall width of the vein averages about 6-7 ft.

Discovered in the late 1800s, the vein was essentially uneconomic for the first 1,400 ft. of depth and as a result, the property changed hands numerous times as owners were unable to meet property tax payments.

Current reserves at the mine extend to about 5,900 ft. below surface, with mining taking place down to 5,300 ft.

In conjunction with the reopening of the mine in 1987, Hecla began implementing a new mining method both as a cost-saving method and in an attempt to reduce rock burst problems. Rock bursts can wreak havoc, and with mining operations at more than 5,000 ft. below surface, the danger is a real problem.

A rock burst occurs when wall rocks shear in catastrophic failure along bedding plains and are thrust into mined-out areas. In 1990, one large burst registered 4.2 on the Richter scale.

Unique to North America, the mining method at the Lucky Friday mine is termed the LFUL, or the Lucky Friday Underhand Longwall method. The conventional cut-and-fill method used in previous operations developed each stope on 200-ft. levels, raised on the vein, and then mined from the lower level upwards with the sand fill following below. In comparison, the underhand method mines from the top, down, with the sand fill above the workings.

The conventional cut-and-fill method creates a progressively shrinking pillar of ore above the stope as it is mined up toward the level above. In theory, stresses from the surrounding rock tend to be concentrated in this pillar giving way to rock burst problems. In the underhand method, no pillars are created since there is always virgin material below the workings.

A ramp is used to reach the vein below the overhand cut-and-fill workings. The vein is mined in five stopes, each about 500 ft. in strike.

The stopes are reached by crosscuts from the ramp at 80-ft. vertical intervals. Prior to reaching the stope, each crosscut splits into two, one ramping up at 20%, while the other ramps down at 20%. The upper ramp is aimed to meet the bottom of the sand fill from the last cut of the mining operations on the level above.

A 10-ft. lift is taken in the stope; it’s backfilled with cemented sand, and the crosscut ramp is dropped to take the next 10-ft. cut below that sand fill.

Once four cuts are taken, the lower crosscut is used to ramp up to meet the bottom of the stope and the process is repeated with a further four cuts of 10-ft. each for a total of 80 ft. for the level. The bottom of this stope is then reached from an identical crosscut system 80 ft. below.

The new method allows for the use of rubber tired equipment. One-yard LHDs are used to move muck from the stope to the crosscut where it will be loaded into 16-ton haul trucks by a 2-yd. LHD. The truck then hauls the ore to the nearest ore pass for transfer to the shaft and hoisting to surface.

The shaft is 18 ft. in diameter, concrete lined and is developed to 6,200 ft.

The new mining method does away with the track haulage used in mining operations above, as well as the use of slushers in the stopes.

The mill uses conventional crushing and grinding followed by two flotation circuits to produce a lead and a zinc concentrate. Silver reports to the lead concentrate.

During 1990, Lucky Friday mined and milled 147,700 tons of ore with an average recovered grade of 12.8 oz. silver per ton, 11.7% lead, and 2.2% zinc. Production totalled 1.89 million oz. silver, 17,300 tons of lead and 3,300 tons of zinc. Average cash cost per ounce of silver produced was US$4.50 for 1990 with all-in costs totalling US$6.50 per oz.

With costs expected to remain at 1990 levels, Hecla is left hoping silver prices will improve.