Hecla experiences reversal

Disappointed with drill results, Hecla Mining (NYSE) has dropped its option on the Fortuna project in Mexico’s Sonora state.

The company had the right to earn a 60% interest in the silver-gold project from War Eagle Mining (VSE) by spending US$5 million.

Based on limited drilling, War Eagle had estimated the project’s geological potential at more than 17 million tons grading 21.5 oz. silver and 0.093 oz. gold per ton within three separate zones.

Hecla planned to confirm and expand War Eagle’s projections, but an initial drill program by the major could not confirm the previously reported silver values.

Prior to Hecla’s dropping the property, War Eagle agreed to twin five of its old holes, three of which returned encouraging results, including: 20 ft. grading 2.02 oz. silver and 0.38 oz. gold per ton in hole 51; 10 ft. grading 1.85 oz. silver and 0.16 oz. gold in hole 54; and 20 ft. grading 6.65 oz. silver and 0.15 oz. gold in hole 55.

All of War Eagle’s drilling has been reverse-circulation.

Results from Hecla’s drilling, which included both diamond and reverse-circulation, have not been released.

Timothy Brock, president of War Eagle, says the variation in assay results may be related to the intersection of fracture-controlled remnant supergene ore zones above the water table.

He does not believe there was any problem with down-hole contamination related to the reverse-circulation drilling.

War Eagle plans to begin a US$300,000 reverse-circulation program in November to test the known mineralized zones below the water table.

Results from the original and corresponding twin drilling are listed in the table below.

HoleHoleIntervalWidthSilverGoldZone

Orig.Twin(ft.)(ft.)(oz./ton)(oz./ton)

12260-3509036.100.10South

51100-120202.020.38

27150-29014018.200.047Central

52weakly mineralized

28370-4003032.200.073Northwest

53weakly mineralized

29200-2202020.950.065Northwest

5430-40101.850.16

30130-180507.420.44Northwest

5590-110206.650.15