Having drilled off a modest resource,
The new development will be at the Don Sergio gold and silver deposit, where drilling has outlined a resource of 127,000 tonnes grading 17 grams gold and 100 grams silver per tonne. The known resource is a single mineralized shoot within the Don Sergio vein, with a strike length of about 100 metres.
Hecla will develop the zone with a decline ramp and expects to be trucking ore to its Velardena mill by the early part of 2004. Production will run over two years; the company expects 30,000-35,000 oz. in gold-equivalent production, which, given the reserve grade, implies about 30,000 oz. gold and 200,000 oz. silver annually.
Hecla is currently mining the Francine vein at San Sebastian, which produced 3.4 million oz. silver and 41,500 oz. gold from just over 150,000 tonnes of ore in 2002. Its cash operating cost, after gold credits, was US91 per oz. silver, with a total production cost (including amortization) of US$2.06 per oz.
The Don Sergio resource adds about one year of reserve life to the San Sebastian mine.
The San Sebastian property, which comprises about 250 sq. km, came as part of Hecla’s purchase of Monarch Resources in 1999. Hecla has defined 16 veins on the property, including Francine and Don Sergio.
The three vein systems in the Cerro Pedernalillo area, including Don Sergio, have a cumulative strike length of roughly 1,500 metres. Hecla plans to drill for the faulted extension of the Don Sergio zone, as well as explore other targets in the area.
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