Louisville, Kentucky — Hecla Mining's silver production rose 15% in the first quarter of 2019, led by its flagship Greens Creek mine in Alaska, while gold output was up 4%, the company said Friday.
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Register NowEven the company's strikebound Lucky Friday silver, lead and zinc underground mine in Mullan, Idaho, managed to grow output by 74%, as the company placed more emphasis on production with salaried rather than union personnel.
Hecla produced 2.9 million oz of silver and 60,021 oz of gold in Q1, compared with 2.5 million oz of silver and 57,808 oz of gold a year ago.
Mike Westerlund, vice president of investor relations for the Coeur d' Alene, Idaho-based company, told S&P Global Platts in an interview that Greens Creek continues to be the big story for the company.
The mine turned out 2.2 million oz of silver and 14,328 oz of gold in the January-March period. Higher silver and gold production over last year were attributed mainly to higher ore grades as well as increased recoveries, partially offset by lower mill throughput.
Westerlund said Greens Creek is Hecla's "best mine by a mile," accounting for 50% of the company's revenue and in excess of 50% of its cash flow.
"It will generate even more cash in the next few years," he said.
Lucky Friday has been hit by a strike by about 200 United Steelworkers union members since March 13, 2017.
For the first year or so after the strike, Lucky Friday had little production.
But in Q1, the mine turned out 173,627 oz of silver, or 74% more than its output of 99,780 oz in the first quarter of 2018.
That was by design, Westerlund said. "We have 70 salaried staff at Lucky Friday, and we have to have them work on production. We're trying to reduce the cash burn" as there is no indication the strike will end anytime soon.
Later this year or in early 2020, Hecla expects to receive shipment from overseas of a $13 million low-vein miner that is supposed to eliminate the need for blasting thousands of feet below ground.
The machine also could eliminate as many as 25 union jobs, Westerland said, if it is able to operate about 50% of the time.
-- Bob Matyi, newsdesk@spglobal.com
-- Edited by Derek Sands, newsdesk@spglobal.com