Hecla Mining 3Q Silver Output Dips But Production On Target For Upper End Of Guidance
Tuesday October 20, 2015 09:02
(Kitco News) - Hecla Mining Co. (NYSE: HL) said Tuesday that silver production dipped in the third quarter but gold output was up, with “strong, consistent” silver output at the Greens Creek Mine in Alaska but lower production at Lucky Friday in Idaho due to lower grades and mechanical issues that have been resolved.
Hecla, the largest primary silver producer in the U.S., in July increased its guidance for 2015 silver production to between 10.5 million and 11.0 million ounces from 10.5 million ounces previously. On Tuesday, the company said it looks for year-end production to be at the high end of its current guidance, plus 185,000 ounces of gold. Gold production is now expected to be 59,000 ounces at Greens Creek and 126,000 ounces at Casa Berardi.
Third-quarter silver production was 2,591,546 ounces, down 9.7% from the same quarter a year ago. Gold output was up 2.7% to 43,635 ounces, Hecla reported. Zinc output rose 7.1% year-on-year to 17,435 tons, while lead production fell 14% to 9,123 tons.
Meanwhile, the company said a production decision was made at the San Sebastian project in Mexico and stripping on the Middle Vein has begun.
“Greens Creek continues to drive Hecla’s strong, consistent production performance,” said Phillips S. Baker, Jr., Hecla’s president and chief executive officer. “We expect a considerably stronger fourth quarter, now that the ventilation system has restarted at Lucky Friday and with higher-grade material from the 123 Zone at Casa Berardi. When coupled with the start-up of San Sebastian, which is under way, we are optimistic about our performance going into 2016.”
Greens Creek’s third-quarter production of 1,992,037 ounces of silver exceeded the third quarter of 2014 by 5.3%, while gold production of 14,376 ounces was 6.3% higher. The higher silver production at the Alaskan mine was a result of higher recoveries and tonnage, partially offset by slightly lower grades, Hecla said.
Lucky Friday’s silver production of 592,243 ounces was 39% lower than the third quarter of 2014 due to lower tonnage and grade, Hecla said. A failure of the underground booster reduced the ventilation capacity, leading to the temporary closure of a higher-grade production stope. Replacement fans are now in operation and Lucky Friday has returned to normal production, Hecla said. In addition, there were 16 days of downtime in the third quarter for planned hoist mechanical maintenance.
In Quebec, Casa Berardi’s gold production of 29,259 ounces during the July-September period was in line with the third quarter of 2014.
Meanwhile, in Mexico, San Sebastian’s high-grade near-surface material is projected to produce 8.1 million silver-equivalent ounces with after-tax cash flow of $43 million over its mine life, Hecla said. The company said it aims to minimize capital expenditures by using a mining contractor and renting capacity from a nearby mill, which should allow the project to quickly move into production despite the low-price environment.
A mining contractor has begun stripping on the Middle Vein. Hecla said it to be processing ore by year end and to continue for 18 months, a period that may be extended with additional resources as a result of continued in-fill and exploration drilling.
By Allen Sykora of Kitco News; firstname.lastname@example.org