Exhibit 99
Hecla's Gross Profit Nearly Doubles During First Quarter,
Silver and Gold Production Cash Costs Remain Low
Business Editors
COEUR D'ALENE, Idaho--(BUSINESS WIRE)--May 4, 2004--Hecla Mining
Company (NYSE:HL) today reported net income of $6.2 million for the
first quarter of 2004, compared to net income of $6.7 million for the
first quarter of 2003. However, last year's net income was aided by a
$4 million legal settlement and a $1.1 million positive cumulative
effect of change in accounting principle. Net income for the first
quarter of this year is a direct result of an over 90% increase in
gross profit from operations compared to last year.
Improved sales, gross profit and operating income compared to the
same period last year were due to higher silver, gold, lead and zinc
prices, as well as decreased silver production cash costs and
increased gold production. Hecla's cash costs for gold production also
remain low, at an average total cash cost per ounce of $142, making it
one of the lowest-cost gold companies. As a result of these factors,
gross profit increased from $7 million in the first quarter of 2003 to
$13.4 million in the first quarter of 2004.
During the first quarter, approximately 307,000 outstanding shares
of Series B preferred stock were exchanged for approximately 2.4
million shares of common stock. As a result of these successful
exchanges, approximately 158,000 shares of preferred stock remain
outstanding. Although the transaction does not impact the balance
sheet or net income, the company is required to report a non-cash
dividend expense of approximately $10.9 million on the income
statement, which is the primary reason for a "basic and diluted loss
per common share available to common shareholders" of 4 cents per
share during the first quarter.
Hecla's President and Chief Executive Officer, Phillips S. Baker,
Jr., said, "Hecla continues to deliver low-cost gold and silver
production. Certainly, the increased precious metals prices allow us
to generate remarkable increases in gross profit, but our goal is to
remain one of the lowest-cost gold and silver producers with an eye on
growth, no matter what the prices may do. I'm very pleased with both
our operational performance and our progress in our expanded
exploration program so far this year. With the prospects and
properties we have in hand now, Hecla can grow dramatically over the
next few years while maintaining a conservative balance sheet and high
returns."
First Quarter 2004 Highlights
-- Net income of $6.2 million; 93% increase in gross profit to
$13.4 million
-- 2.1 million ounces of silver produced at an average total cash
cost of $1.43 per ounce
-- Nearly 56,000 ounces of gold produced, with more than 37,000
ounces of primary gold produced from La Camorra at an average
total cash cost of $142 per ounce
-- 43% increase in the average price of silver and 14% increase
in the realized price of gold compared to the first quarter of
2003
-- Successful exchange of preferred stock for common stock, with
accompanying $10.9 million non-cash dividend charge on the
income statement
-- $120 million of cash and short-term investments on hand, with
just $5.4 million in long-term debt
-- Increased production at La Camorra and lower cash costs at San
Sebastian and Greens Creek compared to the same period last
year
-- $2.4 million spent on exploration, with good results at Mina
Isidora and San Sebastian
-- Commencement of development on Lucky Friday's 5900 level
Operations
In the first quarter, Hecla produced 2.1 million ounces of silver
at an average total cash cost per ounce of $1.43, maintaining its
position as the lowest-cost primary silver producer. Gross profit from
silver operations more than doubled to $9.6 million in the first
quarter of 2004 compared to 2003, thanks to the dramatic increase in
silver price compared to a year ago. The company also produced 55,817
ounces of gold, with 37,547 ounces coming from Hecla's primary gold
operating unit, La Camorra, at an average total cash cost per ounce of
$142. Gross profit from La Camorra increased 37% over the same quarter
a year ago, from $2.8 million to $3.8 million in the first quarter of
this year.
Baker said, "We continue to focus on growth, with a goal of
doubling our gold production by the end of 2008. And in about 18
months, we should see an increase in silver production, as development
of the new level of the Lucky Friday makes it possible for us to
return to full production of 4 million ounces per year at that mine."
During the first quarter, the San Sebastian silver operation in
central Mexico produced 857,100 ounces of silver and 11,474 ounces of
gold. The significant gold by-product at San Sebastian allowed the
mine to produce silver at the extremely low cost of negative 44 cents
per ounce during the first quarter of 2004, compared to negative 7
cents per ounce in the first quarter of 2003. Mining this year is
taking place in a lower-grade area of the mine, so silver production
decreased from a year ago because the grade of silver was
approximately 25 ounces per ton during the first quarter of 2004
compared to 32 ounces per ton during the first quarter of last year.
However, with grades of 25 ounces of silver per ton and nearly
one-third of an ounce of gold per ton, San Sebastian continues to be a
very high-grade mine.
The Greens Creek mine, located near Juneau, Alaska, is a joint
venture with Kennecott Greens Creek Mining Company, a subsidiary of
Rio Tinto. Hecla holds an approximate 30% interest in the operation.
In the first quarter, Greens Creek produced 744,967 ounces of silver
and 6,743 ounces of gold for Hecla's account, at an average total cash
cost of 98 cents per ounce of silver. Increased gold, zinc and lead
prices favorably impacted Greens Creek's cash costs, as those metals
are important by-products at that mine. Greens Creek's cash costs per
ounce decreased 41% compared to the first quarter of 2003.
The Lucky Friday silver mine is located in northern Idaho, and
Hecla has been operating this mine since 1958. During the first
quarter, Lucky Friday produced 483,418 ounces of silver at an average
total cash cost of $5.44 per ounce, compared to $4.47 per ounce a year
ago. However, due to the increases in silver and lead prices, Lucky
Friday's sales and income from operations both increased significantly
compared to a year ago. The mine's costs have increased because the
access to ore continues to get further away from the 4900-level drift,
resulting in longer haulage times. The decision has also been made to
mine lower-grade material because of the increased metals prices. This
increases cash flow, but it also results in increased cash costs. Once
the development of the 5900 level is complete, Lucky Friday's cash
costs are expected to decrease to well below $5.00 per ounce of silver
because haulage lengths will decrease. In addition, the mine will be
able to ramp back up to full capacity of approximately 4 million
ounces of silver per year. Work is progressing as scheduled on the
5900-level drift, with four crews working 24 hours a day. Miners have
advanced approximately 450 feet to date on the drift, which leads from
the Lucky Friday Silver Shaft and will run approximately 5,465 feet to
the expansion area where about 28 million ounces of silver resource
have been identified. The schedule calls for completion of the drift
and commercial production from the new level by the end of 2005.
Hecla's primary gold producer is the La Camorra unit, located in
eastern Venezuela. During the first quarter of 2004, La Camorra
produced 37,547 ounces of gold at an average total cash cost of $142
per ounce. Production increased compared to the same period last year,
with slight increases in tonnage and grade. The ore grade mined in the
first quarter was 0.84 ounce of gold per ton, compared to 0.82 ounce
of gold per ton a year ago. Work continues on construction of a
2,000-foot-deep production shaft at La Camorra, where the ore is
currently hauled out of the mine via a decline ramp and trucks.
Although La Camorra is a very low-cost mine, as the mine gets deeper,
haulage times and costs increase. The production shaft will allow more
efficient removal of the ore. Completion of shaft construction is
scheduled for the end of 2004, with construction costs estimated at
$12 million.
As previously reported in a March 2004 news release, approximately
5,000 ounces of gold worth about $2 million was provisionally withheld
from export from Venezuela, pending an administrative review of export
documentation. Hecla has provided all documentation necessary to
satisfy the review and received a court order directing the release of
the gold back to the company, subject to further court proceedings. In
the meantime, La Camorra continues normal operations, and all
subsequent gold shipments have been exported out of Venezuela on
schedule.
Exploration
Hecla spent about $2.4 million on exploration in the first quarter
of the year, and is projecting to spend approximately $12 million to
$15 million on exploration in 2004. Progress on the Mina Isidora
deposit in Venezuela is especially promising, and earlier in the year,
Hecla reported a proven and probable reserve there of 327,000 ounces
of gold. A decision on developing the deposit is expected in the near
future. An ongoing deep directional drilling program at Hecla's La
Camorra mine has also been successful, with one hole intersecting ore
grade material at a depth of 3,300 feet, more than 1,300 feet below
the current mining area. The deposit now appears to be continuing at
depth in a more easterly direction, and several holes drilled into
that area show ore grade material as well. In addition, several
drilling programs are planned on Hecla's very prospective land
position surrounding the La Camorra mine and on the Block B
concessions, where Mina Isidora is located.
About $1.2 million was spent in the first quarter on exploration
surrounding the San Sebastian mine in central Mexico. Geologists
remain convinced of the long-term potential on the 190-square-mile
property position, which is located on trend with some of the oldest
and richest silver mines in the world. An aeromagnetic survey and a
geologic characterization study have now been completed on the entire
concession. Thousands of soil samples were collected during the
quarter, and geochemical results have been received on about half of
the samples. Anomalies in gold and silver have been identified to the
west, north and east of the Francine vein. Five exploration drill
holes were completed during the quarter testing for a second, separate
and lower mineral band below the currently identified reserve and
resource area. Visual indications are encouraging; however, assays are
pending and the program is in its very early stages.
Baker said, "The exploration results we're beginning to get are
very exciting and we're moving forward as quickly as we can. It takes
time to identify and explore targets and eventually develop them into
a mine, but we believe that by having our land positions located in
these world-class mining districts, we'll be very successful long-term
with these programs. We expect to be exploring and mining for a long
time to come in these districts."
At the Hollister Development Block gold exploration project in
northern Nevada, Hecla reported in the first quarter that it received
notification of approval of the federal permits needed from the Bureau
of Land Management (BLM), subject to a public comment period. The
project is an earn-in to a joint venture with Great Basin Gold. The
BLM has also reviewed the bonding calculations and is expected to
complete the bond adjudication process soon. Once an acceptable
interim arrangement for property access and work authorization is
reached (with a land transfer expected in the future), Hecla can begin
site preparation work, with commencement of actual underground
exploration ramp construction expected this summer.
Hecla Mining Company, headquartered in Coeur d'Alene, Idaho, mines
and processes silver and gold in the United States, Venezuela and
Mexico. A 113-year-old company, Hecla has long been well known in the
mining world and financial markets as a quality silver and gold
producer. Hecla's common and preferred shares are traded on the New
York Stock Exchange under the symbols HL and HL-PrB.
Statements made which are not historical facts, such as
anticipated payments, litigation outcome, production, sales of assets,
exploration results and plans, costs, prices or sales performance are
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, and involve a number of
risks and uncertainties that could cause actual results to differ
materially from those projected, anticipated, expected or implied.
These risks and uncertainties include, but are not limited to, metals
price volatility, volatility of metals production, exploration risks
and results, project development risks and ability to raise financing.
Refer to the company's Form 10-Q and 10-K reports for a more detailed
discussion of factors that may impact expected future results. The
company undertakes no obligation and has no intention of updating
forward-looking statements.
Cautionary Note to Investors -- The United States Securities and
Exchange Commission permits mining companies, in their filings with
the SEC, to disclose only those mineral deposits that a company can
economically and legally extract or produce. We use certain terms in
this news release, such as "resource," that the SEC guidelines
strictly prohibit us from including in our filing with the SEC. U.S.
investors are urged to consider closely the disclosure in our Form
10-K. You can review and obtain copies of these filings from the SEC's
website at http://www.sec.gov/edgar.shtml.
Hecla Mining Company news releases can be accessed on the Internet
at: http://www.hecla-mining.com
HECLA MINING COMPANY
(dollars in thousands, except per share, per ounce and per pound
amounts - unaudited)
HIGHLIGHTS First Quarter Ended
----------------------
FINANCIAL DATA Mar. 31, Mar. 31,
2004 2003
---------- ----------
Sales of products $ 36,650 $ 26,441
Gross profit 13,409 6,955
Income from operations 6,857 6,502
Net income 6,180 6,735
Basic and diluted income (loss) per common
share (1) (0.04) 0.06
Cash flow provided by operating activities 4,909 4,750
SALES OF PRODUCTS
Silver operations (2) $ 24,967 $ 16,924
Gold operations 11,755 8,976
Other (72) 541
Total sales $ 36,650 $ 26,441
---------- ----------
GROSS PROFIT
Silver operations (2) $ 9,647 $ 4,160
Gold operations 3,834 2,789
Other (72) 6
---------- ----------
Total gross profit $ 13,409 $ 6,955
PRODUCTION SUMMARY - TOTALS
Silver - Ounces 2,085,485 2,398,199
Gold - Ounces 55,817 53,412
Lead - Tons 4,560 5,627
Zinc - Tons 6,072 6,685
Average cost per ounce of silver produced (2):
Cash operating costs ($/oz.) 1.19 1.58
Total cash costs ($/oz.) (3) 1.43 1.67
Total production costs ($/oz.) 2.93 2.83
Average cost per ounce of gold produced:
Cash operating costs ($/oz.) 142 137
Total cash costs ($/oz.) (3) 142 137
Total production costs ($/oz.) 234 206
AVERAGE METAL PRICES
Silver - Handy & Harman ($/oz.) 6.71 4.69
Gold - Realized ($/oz.) 379 333
Gold - London Final ($/oz.) 408 352
Lead - LME Cash (cents/pound) 38.3 20.8
Zinc - LME Cash (cents/pound) 48.5 35.7
(1) For the quarters ended March 31, 2004 and 2003, respectively,
preferred stock dividends of $11.2 million and $0.7 million were
not declared. The preferred dividends are not included in the
determination of net income; however, they are included in
determining income (loss) applicable to common shareholders and
earnings (loss) per share. Including the effects of preferred
stock dividends, loss applicable to common shareholders totaled
$5.0 million for the three months ended March 31, 2004, as
compared to income applicable to common shareholders of $6.1
million during the same period in 2003.
(2) Includes gold produced at silver operations, which is treated as a
by-product credit in calculating silver costs per ounce.
(3) Total cash costs per ounce of silver and gold represent non-U.S.
Generally Accepted Accounting Principles (GAAP) measurements. A
reconciliation of total cash costs to cost of sales and other
direct production costs (GAAP) can be found in the cash costs per
ounce reconciliation section of this news release. For additional
information, see Note (2) on the cash costs per ounce
reconciliation section.
HECLA MINING COMPANY
Consolidated Statements of Operations
(dollars and shares in thousands,
except per share amounts - unaudited)
First Quarter Ended
------------------
Mar. 31, Mar. 31,
2004 2003
-------- --------
Continuing operations:
Sales of products $ 36,650 $ 26,441
-------- --------
Cost of sales and other direct production costs 16,848 14,583
Depreciation, depletion and amortization 6,393 4,903
-------- --------
23,241 19,486
-------- --------
Gross profit 13,409 6,955
-------- --------
Other operating expenses:
General and administrative 1,779 2,039
Exploration 2,414 1,782
Pre-development expense 296 351
Depreciation and amortization 75 29
Other operating expense (income) 1,210 (3,828)
Provision for closed operations and
environmental matters 778 80
-------- --------
6,552 453
-------- --------
Income from operations 6,857 6,502
-------- --------
Interest income (expense):
Interest income 387 279
Interest expense (198) (359)
-------- --------
189 (80)
-------- --------
Income from operations, before income taxes and
cumulative effect of change in accounting
principle 7,046 6,422
Income tax provision (866) (759)
-------- --------
Income from operations before cumulative effect
of change in accounting principle 6,180 5,663
Cumulative effect of change in accounting
principle, net of income tax - - 1,072
-------- --------
Net income $ 6,180 $ 6,735
======== ========
Basic and diluted income (loss) per common share:
Income (loss) from operations after preferred
stock dividends $ (0.04) $ 0.05
Cumulative effect of change in accounting
principle - - 0.01
-------- --------
Basic and diluted income (loss) per common share
(1) $ (0.04) $ 0.06
======== ========
Basic weighted average number of common shares
outstanding 117,318 109,320
======== ========
Diluted weighted average number of common shares
outstanding 117,318 110,209
======== ========
(1) For the quarters ended March 31, 2004 and 2003, respectively,
preferred stock dividends of $11.2 million and $0.7 million were not
declared. The preferred dividends are not included in the
determination of net income; however, they are included in
determining income (loss) applicable to common shareholders and
earnings (loss) per share. Including the effects of preferred stock
dividends, loss applicable to common shareholders totaled $5.0
million for the three months ended March 31, 2004, as compared to
income applicable to common shareholders of $6.1 million during the
same period in 2003.
HECLA MINING COMPANY
Consolidated Balance Sheets
(dollars and shares in thousands - unaudited)
Mar. 31, Dec. 31,
2004 2003
ASSETS --------- ---------
Current assets:
Cash and cash equivalents $ 94,431 $ 105,387
Short-term investments 25,455 18,003
Accounts and notes receivable 19,591 16,318
Inventories 18,092 16,936
Deferred income taxes 1,605 1,427
Other current assets 5,335 3,174
--------- ---------
Total current assets 164,509 161,245
Investments 1,281 722
Restricted cash and investments 9,766 6,447
Properties, plants and equipment, net 95,582 95,315
Deferred income taxes -- 896
Other noncurrent assets 13,874 13,570
--------- ---------
Total assets $ 285,012 $ 278,195
========= =========
LIABILITIES
Current liabilities:
Accounts payable and accrued expenses $ 11,942 $ 13,847
Accrued payroll and related benefits 6,772 7,307
Current portion of debt 3,257 2,332
Accrued taxes 2,754 3,193
Current portion of accrued reclamation and
closure costs 7,800 7,400
--------- ---------
Total current liabilities 32,525 34,079
Long-term debt 2,098 2,341
Accrued reclamation and closure costs 62,676 63,232
Other noncurrent liabilities 7,121 7,114
--------- ---------
Total liabilities 104,420 106,766
--------- ---------
SHAREHOLDERS' EQUITY
Preferred stock 39 116
Common stock 29,554 28,886
Capital surplus 507,030 504,858
Accumulated deficit (355,380) (361,560)
Accumulated other comprehensive loss (533) (753)
Treasury stock (118) (118)
--------- ---------
Total shareholders' equity 180,592 171,429
--------- ---------
Total liabilities and shareholders' equity $ 285,012 $ 278,195
========= =========
Common shares outstanding at end of period 118,258 115,535
========= =========
HECLA MINING COMPANY
Consolidated Statements of Cash Flows
(dollars in thousands - unaudited)
First Quarter Ended
-------------------
Mar. 31, Mar. 31,
2004 2003
OPERATING ACTIVITIES -------- --------
Net income $ 6,180 $ 6,735
Noncash elements included in net income:
Depreciation, depletion and amortization 6,468 4,932
Cumulative effect of change in accounting
principle - - (1,072)
Gain on disposition of properties, plants and
equipment (24) (209)
Provision for reclamation and closure costs 568 234
Deferred incomes taxes 718 675
Stock compensation 767 - -
Change in assets and liabilities:
Accounts and notes receivable (3,273) 264
Inventories (1,156) (917)
Other current and noncurrent assets (2,465) (415)
Accounts payable and accrued expenses (1,405) (2,476)
Accrued payroll and related benefits (344) (2,535)
Accrued taxes (439) (276)
Accrued reclamation and closure costs and other
noncurrent liabilities (686) (190)
-------- --------
Net cash provided by operating activities 4,909 4,750
-------- --------
INVESTING ACTIVITIES
Purchase of short-term investments (12,752) - -
Maturities of short-term investments 5,300 - -
Additions to properties, plants and equipment (6,796) (2,027)
Proceeds from disposition of properties, plants
and equipment 55 325
Increase in restricted investments (3,666) (1,377)
-------- --------
Net cash used by investing activities (17,859) (3,079)
-------- --------
FINANCING ACTIVITIES
Common stock issued under stock option plans 1,312 41
Issuance of Common stock, net of offering costs - - 91,287
Borrowings on debt 2,396 1,350
Repayments on debt (1,714) (337)
-------- --------
Net cash provided by financing activities 1,994 92,341
-------- --------
Net increase (decrease) in cash and cash
equivalents (10,956) 94,012
Cash and cash equivalents at beginning of period 105,387 19,542
-------- --------
Cash and cash equivalents at end of period $ 94,431 $113,554
======== ========
HECLA MINING COMPANY
Production Data
First Quarter Ended
---------------------
Mar. 31, Mar. 31,
2004 2003
LA CAMORRA UNIT -------- ---------
Tons of ore processed 44,967 44,767
Days of operation 82 80
Mining cost per ton $ 35.18 $ 36.87
Milling cost per ton $ 11.79 $ 13.61
Ore grade milled - Gold (oz./ton) 0.842 0.824
Gold produced (oz.) 37,547 34,944
Average cost per ounce of gold produced:
Cash operating costs per ounce $ 142 $ 137
Total cash costs per ounce (1) $ 142 $ 137
Total production costs per ounce $ 234 $ 206
Capital additions $ 4,969 $ 819
SAN SEBASTIAN UNIT
Tons of ore processed 39,768 32,600
Days of operation 76 75
Mining cost per ton $ 40.66 $ 33.57
Milling cost per ton $ 32.46 $ 37.89
Ore grade milled - Silver (oz./ton) 24.89 32.45
Ore grade milled - Gold (oz./ton) 0.318 0.389
Silver produced (oz.) 857,100 1,022,087
Gold produced (oz.) 11,474 11,554
Average cost per ounce of silver produced (2):
Cash operating costs per ounce $ (0.72) $ (0.27)
Total cash costs per ounce (1) $ (0.44) $ (0.07)
Total production costs per ounce $ 1.11 $ 0.67
Capital additions $ 33 $ 875
GREENS CREEK UNIT (Reflects Hecla's 29.73% share)
Tons of ore milled 59,755 56,161
Days of operation 91 90
Mining cost per ton $ 27.91 $ 27.67
Milling cost per ton $ 17.21 $ 16.30
Ore grade milled - Silver (oz./ton) 16.69 17.62
Silver produced (oz.) 744,967 740,660
Gold produced (oz.) 6,743 6,848
Lead produced (tons) 1,725 1,987
Zinc produced (tons) 5,437 6,082
Average cost per ounce of silver produced (2):
Cash operating costs per ounce $ 0.64 $ 1.67
Total cash costs per ounce (1) $ 0.98 $ 1.67
Total production costs per ounce $ 3.39 $ 4.39
Capital additions $ 964 $ 276
LUCKY FRIDAY UNIT
Tons of ore processed 39,097 42,312
Days of operation 91 90
Mining cost per ton $ 56.01 $ 44.61
Milling cost per ton $ 6.64 $ 6.33
Ore grade milled - Silver (oz./ton) 13.33 15.92
Silver produced (oz.) 483,418 635,452
Lead produced (tons) 2,835 3,640
Zinc produced (tons) 635 603
Average cost of silver produced (2):
Cash operating costs per ounce $ 5.41 $ 4.47
Total cash costs per ounce (1) $ 5.44 $ 4.47
Total production costs per ounce $ 5.46 $ 4.48
Capital additions $ 606 - -
(1) Total cash costs per ounce of silver and gold represent non-U.S.
Generally Accepted Accounting Principles (GAAP) measurements. A
reconciliation of total cash costs to cost of sales and other
direct production costs (GAAP) can be found in the cash costs per
ounce reconciliation section of this news release.
(2) Gold produced is treated as a by-product credit in calculating
silver costs per ounce.
HEDGED POSITIONS
As of March 31, 2004
Gold: 35,794 ounces hedged @ average price of $288
HECLA MINING COMPANY
Reconciliation of Cash Costs per Ounce to Generally Accepted
Accounting Principles (GAAP)
(dollars and ounces in thousands, except per ounce - unaudited)
First Quarter Ended
Mar. 31, 2004 Mar. 31, 2003
LA CAMORRA UNIT (1) ------------ ------------
Total cash costs $ 5,377 $ 4,785
Divided by ounces produced 38 35
------------ ------------
Total cash cost per ounce produced (2) $ 142 $ 137
============ ============
Reconciliation to GAAP:
Total cash costs $ 5,377 $ 4,785
Treatment & freight costs (459) (347)
Change in product inventory (402) (659)
Reclamation & other costs (31) 52
------------ ------------
Costs of sales and other direct
production costs (GAAP) $ 4,485 $ 3,831
============ ============
SAN SEBASTIAN UNIT
Total cash costs $ (376) $ (72)
Divided by ounces produced 857 1,022
------------ ------------
Total cash cost per ounce produced (2) $ (0.44) $ (0.07)
============ ============
Reconciliation to GAAP:
Total cash costs $ (376) $ (72)
Treatment & freight costs (462) (510)
By-product credits 4,685 4,062
Reclamation & other costs 75 152
Change in product inventory (628) 18
------------ ------------
Costs of sales and other direct
production costs (GAAP) $ 3,294 $ 3,650
============ ============
GREENS CREEK UNIT (Reflects Hecla's 29.73% share)
Total cash costs $ 729 $ 1,237
Divided by ounces produced 745 741
------------ ------------
Total cash cost per ounce produced (2) $ 0.98 $ 1.67
============ ============
Reconciliation to GAAP:
Total cash costs $ 729 $ 1,237
Treatment & freight costs (3,069) (2,989)
By-product credits 6,711 5,514
Reclamation & other costs 89 72
Change in product inventory 932 (293)
------------ ------------
Costs of sales and other direct
production costs (GAAP) $ 5,392 $ 3,541
============ ============
LUCKY FRIDAY UNIT
Total cash costs $ 2,629 $ 2,840
Divided by ounces produced 483 635
------------ ------------
Total cash cost per ounce produced (2) $ 5.44 $ 4.47
============ ============
Reconciliation to GAAP:
Total cash costs $ 2,629 $ 2,840
Treatment & freight costs (1,164) (1,155)
By-product credits 2,112 1,315
Reclamation & other costs 11 9
Change in product inventory 89 25
------------ ------------
Costs of sales and other direct
production costs (GAAP) $ 3,677 $ 3,034
============ ============
COMBINED SILVER PROPERTIES (3)
Total cash costs $ 2,982 $ 4,005
Divided by ounces produced 2,085 2,398
------------ ------------
Total cash cost per ounce produced (2) $ 1.43 $ 1.67
============ ============
Reconciliation to GAAP:
Total cash costs $ 2,982 $ 4,005
Treatment & freight costs (4,695) (4,654)
By-product credits 13,508 10,891
Reclamation & other costs 175 224
Change in product inventory 393 (249)
------------ ------------
Costs of sales and other direct
production costs (GAAP) $ 12,363 $ 10,217
============ ============
(1) Costs per ounce of gold are based on the gold produced by the
Venezuela segment only.
(2) Cash costs per ounce of silver or gold represent non-U.S.
generally accepted accounting principles (GAAP) measurements that
management uses to monitor and evaluate the performance of its
mining operations. We believe cash costs per ounce of silver or
gold provide an indicator of profitability at each location and on
a consolidated total, as well as a meaningful basis for which to
compare other mining companies and other mining operating
properties.
(3) Costs per ounce of silver are based on production from both the
Mexico and United States segments. The United States segment
includes both the Greens Creek unit and the Lucky Friday unit.
CONTACT: Hecla Mining Company
Vicki Veltkamp, 208/769-4100
Fax 208/769-7612