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Hecla becomes major player in the Yukon

Mining Explorers 2023 - January 18, 2024

Following the acquisition of Alexco Resource Corp. at the end of 2022, Hecla Mining Company has continued to expand its portfolio of gold and silver properties in Canada's Yukon.

With the Keno Hill Silver District mine project that came with the buyout of Alexco, Hecla's silver reserves soared to above 240 million ounces of silver, the highest in the company's 132-year history.

"Hecla's silver reserves are at an all-time high," said Hecla Mining CEO Phillips Baker, Jr.

This boost in reserves builds on a long tradition of Hecla's exploration team finding enough ore at its operations to more than replace the reserves that have been mined each year.

"In the past 15 years, we have replaced the 213 million ounces mined and yet have almost five times the reserves we had at the start of 2008," the Hecla CEO added. "That is over 400 million ounces of silver that we have replaced and grown."

While silver reserves at its Greens Creek and Lucky Shot mines in the United States were down slightly from 2022, the buyout of Alexco's Keno Hill silver project in Canada more than made up for that deficit by adding roughly 50 million oz of silver to the company's reserves.

As a result, the Idaho-based mining company climbed to 240.9 million oz of silver, 2.56 million oz of gold, 944,020 tons of zinc, and 784,940 tons of lead in 36.83 million tons of reserves at its four operations in the U.S. and Canada.

"Hecla has the largest silver reserve in the United States, the highest grade and largest primary silver reserve in Canada, the best silver exploration potential in both countries, and we produce 40% of all the silver mined in the United States and expect to produce the same percentage of Canada's production next year," said Baker. "With silver's importance in the energy transition to renewables, Hecla is well positioned long into the future."

As Hecla endeavored to ready its new Keno Hill project for commercial production, it made another move in the Yukon, and one a little uncharacteristic for the top U.S. silver producer – the buyout of ATAC Resources Ltd.'s precious metals enriched Rackla and Connaught gold properties.

Buys primary gold properties

After weeks of deliberation between companies, Hecla and ATAC finalized the acquisition of ATAC's Rackla and Connaught properties for C$31 million (US$22.6 million).

Located approximately 53 kilometers (33 miles) northeast of Keno City, Rackla is a massive 170,000-hectare (420,000 acres) district-scale land package divided into two separate projects, Nadaleen and Rau.

Home to the first Carlin-style gold discovered in the Yukon, Nadaleen is home to the Osiris deposit, which hosts 5.53 million metric tons of indicated resource averaging 4.12 grams per metric ton (732,000 oz) gold and 9.36 million metric tons of inferred resource averaging 3.47 g/t (1.04 million oz) gold.

On the east side of Nadaleen, Rau also accommodates a wealth of deposits and targets, with the most advanced being Tiger, which hosts 4.56 million metric tons of measured and indicated resource averaging 3.19 g/t (464,000 oz) gold.

Despite these sizable resources, ATAC was unable to economically advance these deposits beyond the exploration stage.

Rock samples collected from Connaught, an earlier staged but road-accessible property about 65 kilometers (40 miles) west of Dawson City, have returned grades as high as 4,050 g/t silver, 10.9 g/t gold, 7.2% zinc, and 1.98% copper

"With the ATAC acquisition, we continue to execute our strategy of acquiring large land packages with significant exploration potential in favorable mining jurisdictions," said Baker. "The Rackla and Connaught properties in the Yukon are a massive land package of over 700 square miles (1,830 square kilometers), almost half the size of Rhode Island, with identified gold, silver, and base metal mineralization."

After more than a decade of exploring Rackla and navigating setbacks that would have put lesser explorers under, ATAC Resources persevered to see its efforts carried forward by the largest silver producer in the U.S.

As an added bonus, Hecla invested C$2 million (US$1.5 million) for a 19.9% stake in Cascadia Minerals, a new exploration company created to spin four of ATAC's former copper projects into.

"I am very excited to begin a new chapter of discovery with Cascadia," said Cascadia Minerals President and CEO Graham Downs. "With backing from Hecla as a strategic investor, and a strong and experienced management team, we are ready to hit the ground running with a robust exploration program for 2023."

Investing in Dolly Varden Silver

Hecla also strengthened its foothold in Northern BC with a C$10 million (US$7.2 million) in Dolly Varden Silver Corp., which is exploring the precious metals rich Kitsault Valley project at the southern tip of the Golden Triangle.

Hecla, which has long held a stake in Dolly Varden, has agreed to acquire 15.38 million shares of the company at C65 cents each. As a result, Hecla will own a 15.7% interest in Dolly Varden, a significant increase from its prior 10.6% interest.

"Hecla is the world's fastest growing established silver producer, the largest in the US and soon to be in Canada. We celebrate Hecla agreeing to increase their stake in Dolly from 10% to 15% and want to extend our gratitude for their financial and technical support of the company and the project," said Dolly Varden Silver CEO Shawn Khunkhun.

Located about 40 kilometers (25 miles) southeast of Stewart, BC, the 63-square-mile (163 square kilometers) Kitsault Valley project is an amalgamation of Dolly Varden's namesake property and the adjacent Homestake Ridge gold-silver property acquired from Fury Gold Mines Ltd.

Four deposits associated with past producing mines at Dolly Varden – Torbrit, Dolly Varden, Wolf, and North Star – host 3.42 million metric tons of indicated resource averaging 299.8 grams per metric ton (32.93 million oz) silver; plus 1.29 million metric tons of inferred resource averaging 277 g/t (11.45 million oz) silver.

About 5.5 kilometers (3.5 miles) northwest of the Dolly Varden deposits, three deposits at Homestake Ridge host 736,000 metric tons of indicated resource averaging 7.02 g/t (165,993 oz) gold and 74.8 g/t (1.8 million oz) silver; plus 5.55 million metric tons of inferred resource averaging 4.58 g/t (816,719 oz) gold and 100 g/t (17.8 million oz) silver.

In addition to being a major shareholder of Dolly Varden and a supporter of its Kitsault Valley exploration, Hecla has its own silver and gold-enriched project in the area.

Lying alongside the Kitsault Valley project, Hecla's 230-square-mile (596 square kilometers) property hosts potential for the discovery of epithermal silver-gold, gold-rich porphyry, and volcanogenic massive sulfide deposits.

While Hecla has not talked much publicly about its exploration at Kinskuch, the company has previously reported that it has traced silver-enriched, base metal mineralization in the Illiance Valley at Kinskuch for over three miles (4.8 kilometers). Three holes drilled at Kinskuch in 2011 cut significant silver mineralization, including a 2.8-meter interval averaging 318 g/t silver, 0.40 g/t gold, 6.5% zinc, and 2.2% lead.

Hecla said exploration at Kinskuch will focus on advancing multiple target areas on the property through detailed mapping, sampling, geophysics, and drilling.

Strong silver output

The Greens Creek Mine in Southeast Alaska is the workhorse of Hecla's producing assets, accounting for 65% of the company's silver and 27% of the company's gold production.

The roughly 10 million oz produced each year at Greens Creek, coupled with 3 million oz form its Lucky Shot project in Idaho, Hecla is the largest silver producer in the U.S.

Once Keno Hill is up and running at full capacity, Hecla will also be the largest silver producer in Canada.

Going into 2023, Keno Hill hosts 2.2 million tons of proven and probable reserves averaging 22.5 oz/t (49.7 million oz) silver, 0.01 oz/t (13,000 oz) gold, 2.2% (49,320 tons) zinc, and 2.4% (52,520 tons) lead.

This is a 33% increase over the reserves identified at the time of Hecla's acquisition of Alexco.

The ramp-up to commercial production began during the second quarter, with the Yukon mine contributing 184,264 oz of silver during the period. This continued through the third quarter, with the mill processing an average of 258 tons of ore per day at an average grade of 33 oz (1,025 grams) of silver per ton.

Hecla says the tonnage mined at Keno Hill was constrained while underground infrastructure and ore headings were being developed.

Mill tonnage was also limited by the capacity of a temporary crusher.

Hecla spent the closing months of 2023 readying for the final push to ramp up mill output to 440 tons per day with the goal of being the largest silver producer in Canada by the end of 2024.


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