It was a lucky Friday morning for employees at Hecla Mining‘s (HL-N) underground Lucky Friday silver mine in northern Idaho as the company announced its decision to proceed with a major development that will ensure the mine remains operating well into the next decade.
After more than a year of pondering and waiting for higher silver prices, Hecla has decided to spend US$8 million (almost half what was first anticipated) driving a 5,500-ft. (1.7-km) drift on the 5900 level to access an orebody containing 28 million oz. silver.
Hecla says the development should allow the mine to double its annual production rate to around 4 million oz., and give the company a better platform from which it can explore for additional silver reserves.
It should take about two years to complete the drift, with production from the new level expected to begin in late 2005. Cash costs are expected to be less than US$4.50 per oz. silver.
Hecla President and CEO Phillips Baker commented in a release that it’s “because our people at Lucky Friday have done a great job of decreasing costs and creating a plan that makes sense economically that we are able to proceed with the development of the new level at this time.”
Hecla has already produced 20 million oz. silver from this area of the mine since 1997, and the company says it already has a good understanding of the vein character.”
Lucky Friday is Hecla’s longest-running asset, having been in production for 45 years so far, producing over 127 million oz. silver to date. However, costs were high, and the company severely curtailed production levels beginning in 2001.
At Dec. 31, 2002, Lukcy Friday contained a resource of 1.08 million tons grading 13.2 oz. silver per ton, 8.5% lead and 1.7% zinc.
The mine currently employs 94 people and, when the new development drift is completed and full production is reached, Hecla expects to boost employment there by up to 50%. The Lucky Friday union, United Steelworkers Local 5114, recently approved a five and a half-year labor contract.
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