North of 60 Mining News - The mining newspaper for Alaska and Canada's North

Despite COVID-19 restrictions and protocols changing how it must conduct its business, even temporarily shutting down operations at its Casa Berardi Mine in Quebec and San Sebastian Mine in Mexico, Hecla Mining Company now expects to produce more gold and silver than it forecast at the onset of 2020.

Based on production through the first three quarters, the Idaho-based miner now expects to produce nearly 13 million ounce of silver and 210,000 oz of gold this year, up from the 11.8 million oz of silver and 208,000 oz of gold that marked the upper end of the company's forecast at the beginning of the year.

"We are very pleased with third quarter operational performance particularly as the mines continue safe practices to manage COVID-19," said Hecla Mining President and CEO Phillips Baker Jr.

Much of this better-than-expected precious metals production, especially silver, is due to the sterling performance of Hecla's Greens Creek Mine in Southeast Alaska.

According to an estimate published by Hecla on Sept. 20, 10 days before the end of the third quarter, Greens Creek is expected to produce 2.5 million oz of silver during the quarter.

Adding in the 5.5 million oz produced during the first half of the year, Greens Creek will have produced 8 million oz of silver over the first nine months of 2020, which is roughly 80% of the company's total production over that period.

The company attributes this high silver output to strong silver grades being mined at the underground operation. Hecla now expects that Greens Creek will produce more than 10 million oz of silver this year, which is about 1 million oz more than originally forecast.

"The higher-than-expected silver grades at Greens Creek have driven silver production higher for the quarter and the annual estimate," said Baker.

The Southeast Alaska mine has also produced around 37,000 oz of gold so far this year and is expected to produce another 10,000 oz during the fourth quarter.

Hecla's primary gold producer, however, is Casa Berardi. Despite being shut down for about a month due to COVID-19, this Quebec operation is expected to produce 114,000 to 124,000 oz of gold this year.

With small contributions from Nevada Operations and San Sebastian, Hecla expects to produce 199,000 to 210,000 oz of gold this year, which is a slight uptick from the 195,000 to 208,000 oz projected before the COVID-19 pandemic.

The strong mine production and precious metals prices is bolstering Hecla's treasury and allowing the company to repay its loans quicker than expected.

Hecla Mining Company

Due to COVID-19 mandates, Hecla's Casa Berardi gold mine in Quebec was shut down for about a month.

In September, the company paid back US$50 million on its revolving credit facility and has no remaining balance outstanding.

The company also received three C$12.5 million (US$9.2 million) installments of senior note payments from Investissement Quebec. The fourth such installment, for a total of C$50 million (US$36.8 million), is expected to be received in the fourth quarter.

With a US$60 million infusion during the third quarter, Hecla's cash and cash equivalents as of Sept. 30 are estimated to exceed US$90 million.

"Our strong production for the quarter is expected to translate into robust cash flows in excess of US$20 million even after repaying our revolver in full and the interest payments on the bonds. We are close to realizing our financial goal of having in excess of $100 million of cash and cash equivalents on the balance sheet," said Baker.

Author Bio

Shane Lasley, Publisher

Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.

• Email: [email protected]
• Phone: (907) 726-1095
• https://www.linkedin.com/in/shane-lasley-ab073b12/