Hecla gets permits for Grouse Creek

Federal and state environmental permits for development and production at Grouse Creek were recently received by owner Hecla Mining (NYSE).

Permitting for the operation, in south-central Idaho, was delayed by design improvements implemented earlier this year which required amended permits. Bill Booth, spokesman for the company, said the changes primarily involved doubling the milling capacity to 6,000 from 3,000 tons per day. As a result of the changes, construction at Grouse Creek was effectively delayed a year since full-scale construction cannot begin until next year. Booth explains that the site’s 7,300-ft. elevation and the onset of winter preclude starting construction until next spring.

Subject to acceptable financing arrangements, full-scale construction will begin in 1993 with completion anticipated for late 1994 or early 1995. Capital cost of the project is estimated at US$73 million and Booth said Hecla is now reviewing a number of alternatives for financing. Proven and probable reserves in two pits are estimated at 15 million tons grading 0.048 oz. gold and 1.15 oz. silver per ton at an overall strip ratio of about 3.7-to-1.

The Sunbeam pit, which will be mined initially, contains an estimated 6.5 million tons grading 0.053 oz. gold and 0.4 oz. silver while the Grouse pit reserves are estimated at about 8.5 million tons grading 0.044 oz. gold and 1.72 oz. silver.

The higher-grade Sunbeam pit will produce about 100,000 oz. gold and 400,000 oz. silver annually in the first three years, with output dropping to 70,000 oz. gold and 2.5 million oz. silver in later years as the Grouse pit comes on line.

Cash operating costs over the life of the mine are expected to be about US$200 per oz. including credits based on a silver price of US$4.50 per oz. Hecla reports that recent drilling about half a mile south of the Sunbeam deposit returned a 90-ft. intersection grading 0.056 oz. gold and 21.8 oz. silver including a 10-ft. section grading 0.37 oz. gold and 166.7 oz. silver.