Exhibit 99.1
Hecla Reports Lowest Silver Cash Cost Ever,
and Announces 200% Increase in Earnings from Operations Compared to
First Quarter Last Year
COEUR D'ALENE, Idaho--(BUSINESS WIRE)--May 2, 2007--Hecla Mining
Company (NYSE:HL) today reported net income of $8.1 million, or 7
cents per common share, on revenue of $53.1 million in the first
quarter of 2007. First quarter production was 1.6 million ounces of
silver and 36,330 ounces of gold, with all operations solidly on track
to meet production estimates for the year of 6 million ounces of
silver and 140,000 ounces of gold. The company's income from
operations for the first quarter increased more than 200% compared to
income from operations in the first quarter of 2006 of $2.5 million.
First quarter 2006 net income results of $38.4 million also included a
gain of $36.4 million attributable to the sale of investments.
Hecla Mining Company President and Chief Executive Officer,
Phillips S. Baker, Jr., said, "This is the start of another very
profitable year for Hecla. Our Lucky Friday and Greens Creek silver
mines are doing particularly well, with a combined average total cash
cost for the first quarter of negative $1.12 per ounce due in part to
robust prices for our by-product metals of zinc and lead, as well as
the high quality of our ore bodies. Of course, it is our employees who
make it all happen."
The quarter also included cash generation by operating activities
before exploration and pre-development expense of $21.4 million,
compared to $4.6 million in the same period last year. Gross profit in
the first quarter, primarily from the silver operations, was $16.4
million, compared to $11.7 million in the first quarter of 2006. Cash
and short-term investments totaled $111.3 million at March 31. Since
the end of the quarter, that total has been boosted by the receipt of
approximately $45 million from the sale of the Hollister Development
Block in April.
FIRST QUARTER 2007 HIGHLIGHTS
-- Net income of $8.1 million, or 7 cents per common share
-- 1.6 million ounces of silver produced at an average total cash
cost of $(1.12)
-- 36,330 ounces of gold produced, with 31,479 ounces mined at
the La Camorra Unit at an average total cash cost of $475
-- Sale of Hecla's interest in the Hollister Development Block
exploration project announced, with completion of the
transaction occurring in the second quarter
-- Hecla remains debt free, with significant cash and short-term
investments on hand
-- Encouraging exploration results received from the first hole
drilled upward into the Lucky Friday "gap" area
-- Pre-feasibility to study expansion potential at Lucky Friday
underway
-- Average prices for silver, gold, lead and zinc all
significantly higher than one year ago
Baker said, "In 2006, we reported the highest earnings and lowest
cash costs for silver in the history of our 116-year-old company. We
now have the potential to set another record in 2007. The price of
silver in the first quarter averaged $13.31, 37% higher than the same
period a year ago, and gold, lead and zinc also increased 17%, 45%,
and 54%, respectively, during the same period. If these metals stay on
this path and remain strong, as we expect they will, our cash and
income generating levels could be even higher than last year. Hecla's
low-risk, low-cost silver profile is where the majority of the value
of the company lies. And even though our costs for gold production at
our La Camorra Unit have risen from a year ago, our cash margin
remains healthy because of the increase in the gold price."
As a result of performance during the first quarter, Hecla is
revising its guidance on estimates for the annual average cash cost
per ounce of silver to less than $0.50 per ounce (earlier guidance
gave an estimate of less than $1 per ounce), and maintaining its
estimate for 2007 of an average gold cash cost of up to $440 per
ounce.
OPERATIONS AND EXPLORATION
Lucky Friday -- The Lucky Friday silver mine in northern Idaho
produced 852,113 ounces of silver during the first quarter, at an
average total cash cost of $1.77 per ounce. Costs are dramatically
lower than the average total cash cost during the first quarter of
2006 of $5.31 per ounce of silver, as a result of approximately 75% of
all production now coming from the new 5900 level of this deep
underground mine, as well as increased by-product metals prices. The
mine is on track to produce more than 3 million ounces in 2007. The
average grade of silver was about 11 ounces per ton, approximately the
same as a year ago, but lower than the life-of-mine reserve grade as a
result of mining longer strike lengths and wider faces to take
advantage of the high base metals prices. Ore was mined at greater
widths to include stringers that give access to zinc that otherwise
would not be mined. This results in an economic benefit but
temporarily lowers the silver grade, as anticipated.
A 34% increase in silver resource at the Lucky Friday mine in
2006, to 117 million ounces, led to a positive scoping study to
increase Lucky Friday's tonnage and production. Basic engineering on
an internal shaft is beginning in the second quarter, with
construction anticipated to start in 2008. A pre-feasibility study is
underway to determine how the company can increase annual production,
extend the mine life and increase the minable resource. Completion of
the pre-feasibility study is expected next year. Assuming a positive
outcome, work would subsequently begin on a feasibility study that
could result in sinking an additional surface shaft and constructing a
new mill.
Meanwhile, underground exploration activities at Lucky Friday
continue to produce positive results. Baker said, "The Lucky Friday
mine has an unexplored gap of 2,500 feet along the structural trend
above the current mining area, and below the historic mining near the
surface. During the first quarter, we drilled one long hole up into
that gap from the 4050 level of the mine. The material this hole
intercepted is very significant and encouraging because it intersected
at least six vein zones, which showed low to intermediate grades of
silver, lead and zinc. It is very difficult to drill upward, and for
safety reasons the hole was stopped while still encountering
mineralization. The fact the mineralization is there is good news and
lends encouragement to our theory that the veins we are mining in the
Lucky Friday expansion area continue strongly in structures above, as
well as below, our current workings. Our exploration below the current
workings also continues to be successful, and I fully expect to
increase our resource this year at depth as far as 7,200 feet below
the surface, which is another 400 feet deeper than our currently
identified resource. In addition, deeper drilling indicates the
mineralization extends even further."
Greens Creek -- The Greens Creek silver/zinc/lead/gold mine in
Alaska is a joint venture with Rio Tinto. Hecla holds an approximate
30% interest in this extremely low-cost mine. Greens Creek produced
704,928 ounces of silver for Hecla's account during the first quarter,
at a negative total average cash cost of $4.62 per ounce. Silver
production was nearly 15% higher than the first quarter of 2006, along
with slightly increased production of zinc and gold. The mine is
expected to contribute about 2.8 million ounces of silver production
to Hecla in 2007. Hecla is not the only one benefiting from high
metals prices: smelter treatment charges at Greens Creek were about
16% higher than a year ago due to price participation clauses in the
smelter contracts. In addition, some revenue from the mine, expected
during the first quarter, was delayed into the second quarter due to a
weather-related delay in shipping.
At Greens Creek, an aggressive underground exploration drill
program, utilizing three drills, is focused on expanding the
high-grade 5250 zone to the north. The 5250 zone is at a higher
elevation in the mine, but adjacent to underground workings. Late this
year, these drills will move to the still-expanding West Gallagher
zone, and to the NNW and East Ore zones to better define those
existing resources. Preparations for an extensive surface exploration
and drilling program for this summer is underway and will include the
drilling of Little Sore, Upper and West Gallagher.
La Camorra -- The La Camorra Unit in Venezuela produced 31,479
ounces of gold at an average total cash cost of $475 per ounce, on
track for estimated production of 120,000 ounces of gold this year.
Increased costs at La Camorra compared to costs in the first quarter
of 2006 of $357 per ounce of gold are due primarily to fewer ounces of
gold mined. The decreased production, caused by a lower average gold
grade of 0.591 ounce of gold per ton compared to 0.701 ounce of gold
per ton during the first quarter of last year, led to higher costs per
ounce. Costs are expected to decrease later in the year, as gold
production transitions away from the older La Camorra deposit to the
new Mina Isidora deposit.
Hecla continues to contribute to the improvement of the standard
of living for the local, rural communities in the mine vicinity and
has an ongoing program to foster good relationships with the various
government ministries in Venezuela.
San Sebastian and Mexico -- Hecla holds more than 340 square miles
of contiguous concessions, called San Sebastian, in the state of
Durango in central Mexico. Several promising precious metal targets
will be drilled during the 2007 exploration season. During past
exploration, more than 15 targets have been generated on the property
for the long-term exploration effort on this extremely prospective
property located in the middle of Mexico's prolific silver belt.
Drilling continues on the St. Jude vein, where mineralized quartz
veins have been defined and show some down-plunge continuity. This
potential new resource is parallel to and within a kilometer of the
Hugh zone, where a pre-feasibility study is being completed.
Geophysical anomalies have recently been defined along trend of the
past-producing Francine veins at the Nazareno and San Angel areas.
Elsewhere on the property, drilling has identified isolated veins and
shears in a newly identified, extensive area referred to as the Silver
Anomaly, which lies southwest of the Hugh zone. Large and extensive
soil sampling has also been completed southwest of the Francine vein
in another new, promising area.
Drilling has just begun on the large regional quartz veins at the
Rio Grande property, located approximately 30 miles south of the San
Sebastian property. Rio Grande consists of a series of high-grade
veins and breccias that extend for over nine miles. Surface sampling
of the veins has confirmed high-grade silver and gold, so we are now
preparing for an extensive drill program in 2007.
ENVIRONMENTAL
In April, Hecla received notice from the US Bureau of Land
Management (BLM) that a Hecla subsidiary, Rosebud Mining Company, LLC,
had completed all the required reclamation for the Rosebud gold mine
in Nevada, which Hecla had operated for four years, until the end of
2000. The BLM gave "sincere thanks to (Hecla employees) Ms. Cindy
Moore and Mr. Rich Appling...for the excellent work they have done and
the consistent cooperation that we have received during the life of
this project. We look forward to working with The Rosebud Mining
Company LLC in the future on any mineral actions that it decides to
pursue on the public land that we manage." Hecla's Baker said, "This
is a small example of the large commitment that Hecla and its people
have given to good stewardship and environmental excellence at all our
properties. We intend to continue to demonstrate through our current
and future operations that quality mining operations and proper care
for the environment go hand in hand."
HOLLISTER SALE COMPLETED
On February 21, 2007, Hecla announced it had entered into an
agreement to sell its subsidiary, Hecla Ventures Corp., which holds
Hecla's interest in the Hollister Development Block gold exploration
project in Nevada, to its former partner in the project, a subsidiary
of Great Basin Gold, Inc. On April 19, Hecla announced the completion
of the transaction for $45 million in cash and 7,930,214 shares of
Great Basin Gold with a market value at the time of closing of $18.6
million. Hecla had spent approximately $30 million over the past two
years (most of which had been previously expensed) developing the
project toward the earn-in requirement. The company anticipates
booking a gain on the sale in the second quarter of 2007 of
approximately $63 million.
OPPORTUNITIES
With the proceeds of the Hollister sale, Hecla has a significant
amount of cash and short-term investments and remains debt free. Baker
said, "Our cash on hand and our ability to generate significantly more
cash through our operations this year puts us in an excellent position
to fully fund our aggressive exploration program and any capital
development planned for current operations. In addition, we are
considering property submissions we receive and acquisition
opportunities." Baker concluded, "Hecla's share price has outperformed
that of our silver peers, the silver exchange traded fund and the gold
indices over the past three months. We take that as a signal that the
market has recognized our undervalued position and is just now
starting to realize our future potential cash and income generating
abilities. Our upside continues with our expectation of adding
additional resources through our focused exploration program, where we
plan to spend upwards of $22 million this year. And our robust
financial position will enable us to take advantage of the right
acquisition or partnership opportunity when it arises."
Hecla Mining Company, headquartered in Coeur d'Alene, Idaho,
mines, processes and explores for silver and gold in the United
States, Venezuela and Mexico. A 116-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, and 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 and costs,
exploration risks and results, political risks, project development
risks, labor issues 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," "reserve," and "inferred
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)
First Quarter Ended
----------------------------
HIGHLIGHTS Mar. 31, 2007 Mar. 31, 2006
FINANCIAL DATA
Sales:
Silver operations (1) $ 33,100 $ 24,215
Gold operations 20,045 15,575
------------- -------------
Total sales $ 53,145 $ 39,790
Gross Profit:
Silver operations (1) $ 16,018 $ 9,986
Gold operations 404 1,747
------------- -------------
Total gross profit $ 16,422 $ 11,733
Net income $ 8,143 $ 38,394
Income applicable to common shareholders $ 8,005 $ 38,256
Basic income per common share $ 0.07 $ 0.32
Net cash provided by operating activities
before exploration and pre-development
expenses (2) $ 21,379 $ 4,579
PRODUCTION SUMMARY - TOTALS
Silver - Ounces 1,557,041 1,240,886
Gold - Ounces 36,330 42,419
Lead - Tons 6,301 5,209
Zinc - Tons 6,647 5,569
Average cost per ounce of silver
produced(1):
Cash operating costs ($/oz.) (1.51) 1.80
Total cash costs ($/oz.) (3) (1.12) 2.05
Total production costs ($/oz.) 0.88 4.19
Average cost per ounce of gold
produced(4):
Cash operating costs ($/oz.) 455 348
Total cash costs ($/oz.) (3) 475 357
Total production costs ($/oz.) 631 508
AVERAGE METAL PRICES
Silver - London Fix ($/oz.) 13.31 9.69
Gold - London Final ($/oz.) 650 554
Lead - LME Cash ($/pound) 0.81 0.56
Zinc - LME Cash ($/pound) 1.57 1.02
(1) Includes zinc, lead and gold produced at silver properties, which
are treated as by-product credits in the calculation of silver costs
per ounce.
(2) Net cash provided by operating activities before exploration and
pre-development expenses represents a non-U.S. generally accepted
accounting principle (GAAP) measurement. The following table presents
a reconciliation between cash flow provided by (used in) operating
activities to non-GAAP net cash provided by operating activities
before exploration and pre-development expenses for the quarters
ended March 31, 2007 and 2006:
Cash flow provided by (used in)
operating activities $ 16,365 $ (303)
Add exploration 4,063 3,388
Add pre-development expenses 951 1,494
------------- -------------
Net cash provided by operating
activities before exploration and
pre-development expenses $ 21,379 $ 4,579
============= =============
(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 (1) on the cash costs per ounce reconciliation
section.
(4) Includes revenue from gold produced from third-party mining
operations located near the La Camorra mine and Mina Isidora, which
is treated as a by-product credit and included in the calculation of
gold costs per ounce.
HECLA MINING COMPANY
Consolidated Statements of Operations
(dollars and shares in thousands, except per share amounts -
unaudited)
First Quarter Ended
----------------------------
Mar. 31, 2007 Mar. 31, 2006
------------- -------------
Sales of products $ 53,145 $ 39,790
------------- -------------
Cost of sales and other direct production
costs 28,886 19,910
Depreciation, depletion and amortization 7,837 8,147
------------- -------------
36,723 28,057
------------- -------------
Gross profit 16,422 11,733
------------- -------------
Other operating expenses:
General and administrative 3,185 3,100
Exploration 4,063 3,388
Pre-development expenses 951 1,494
Depreciation and amortization 179 309
Other operating expenses (166) 240
Provision for closed operations and
environmental matters 653 715
------------- -------------
8,865 9,246
------------- -------------
Income from operations 7,557 2,487
------------- -------------
Other income (expense):
Gain on sale of investments - - 36,422
Interest and other income 1,449 607
Interest expense (74) (127)
------------- -------------
1,375 36,902
------------- -------------
Income from operations, before income
taxes 8,932 39,389
Income tax provision (789) (995)
------------- -------------
Net income 8,143 38,394
Preferred stock dividends (138) (138)
------------- -------------
Income applicable to common shareholders $ 8,005 $ 38,256
============= =============
Basic and diluted income per common share $ 0.07 $ 0.32
============= =============
Basic weighted average number of common
shares outstanding 119,951 118,756
Diluted weighted average number of common
shares outstanding 120,526 119,288
HECLA MINING COMPANY
Consolidated Balance Sheets
(dollars and shares in thousands - unaudited)
Mar. 31, 2007 Dec. 31, 2006
ASSETS
Current assets:
Cash and cash equivalents $ 85,534 $ 75,878
Short-term investments and securities
held for sale 25,805 25,455
Accounts and notes receivable 23,076 26,647
Inventories 21,029 22,305
Deferred taxes 11,822 11,822
Other current assets 4,737 3,454
------------- -------------
Total current assets 172,003 165,561
Investments 7,344 6,213
Restricted cash and investments 21,872 21,286
Properties, plants and equipment, net 118,953 125,986
Other noncurrent assets 25,547 27,223
------------- -------------
Total assets $ 345,719 $ 346,269
============= =============
LIABILITIES
Current liabilities:
Accounts payable and accrued expenses $ 20,607 $ 24,238
Accrued payroll and related benefits 13,205 15,036
Accrued taxes 6,412 5,678
Current portion of accrued reclamation
and closure costs 7,269 7,365
------------- -------------
Total current liabilities 47,493 52,317
Accrued reclamation and closure costs 57,991 58,539
Other noncurrent liabilities 11,051 10,685
------------- -------------
Total liabilities 116,535 121,541
------------- -------------
SHAREHOLDERS' EQUITY
Preferred stock 39 39
Common stock 30,063 29,957
Capital surplus 516,327 513,785
Accumulated deficit (319,517) (327,522)
Accumulated other comprehensive income 2,703 8,900
Treasury stock (431) (431)
------------- -------------
Total shareholders' equity 229,184 224,728
------------- -------------
Total liabilities and shareholders'
equity $ 345,719 $ 346,269
============= =============
Common shares outstanding at end of
period 120,195 119,771
============= =============
HECLA MINING COMPANY
Consolidated Statements of Cash Flows
(dollars in thousands - unaudited)
First Quarter Ended
----------------------------
Mar. 31, 2007 Mar. 31, 2006
OPERATING ACTIVITIES
Net income $ 8,143 $ 38,394
Noncash elements included in net income
(loss):
Depreciation, depletion and
amortization 8,016 8,456
Gain on sale of investments - - (36,422)
Gain on disposition of properties,
plants and equipment (29) (22)
Gain on sale of royalty interests - - (341)
Provision for reclamation and closure
costs 85 98
Provision for inventory obsolescence (30) 820
Stock compensation 227 271
Change in assets and liabilities:
Accounts and notes receivable 3,571 (7,059)
Inventories 1,048 (3,373)
Other current and noncurrent assets 393 (2,098)
Accounts payable and accrued expenses (3,630) (352)
Accrued payroll and related benefits (1,831) 456
Accrued taxes 734 976
Accrued reclamation and closure costs
and other noncurrent liabilities (332) (107)
------------- -------------
Net cash provided by (used in) operating
activities 16,365 (303)
------------- -------------
INVESTING ACTIVITIES
Additions to properties, plants and
equipment (7,875) (7,885)
Proceeds from sale of investments - - 57,423
Purchase of equity securities (181) - -
Purchase of short-term investments (13,750) (20,200)
Maturities of short-term investments 13,400 8,200
Decrease (Increase) in restricted
investments (586) (236)
------------- -------------
Net cash provided by (used in) investing
activities (8,992) 37,302
------------- -------------
FINANCING ACTIVITIES
Common stock issued under stock option
plans 2,421 846
Dividends paid to preferred shareholders (138) (138)
Other financing activities - - 81
Borrowings on debt - - 4,060
Repayments of debt - - (6,000)
------------- -------------
Net cash provided by (used in) financing
activities 2,283 (1,151)
------------- -------------
Net increase in cash and cash equivalents 9,656 35,848
Cash and cash equivalents at beginning of
period 75,878 6,308
------------- -------------
Cash and cash equivalents at end of
period $ 85,534 $ 42,156
============= =============
HECLA MINING COMPANY
Production Data
First Quarter Ended
----------------------------
Mar. 31, 2007 Mar. 31, 2006
LUCKY FRIDAY UNIT
Tons of ore processed 84,848 63,724
Mining cost per ton $ 51.34 $ 51.13
Milling cost per ton $ 10.66 $ 11.38
Ore grade milled - Silver (oz./ton) 10.95 11.01
Silver produced (oz.) 852,113 626,792
Lead produced (tons) 4,746 3,594
Zinc produced (tons) 2,045 1,032
Average cost of silver produced (1):
Cash operating costs $ 1.51 $ 5.30
Total cash costs (2) $ 1.77 $ 5.31
Total production costs $ 2.88 $ 6.39
Capital additions (in thousands) $ 2,936 $ 2,101
GREENS CREEK UNIT (Reflects Hecla's 29.73% share)
Tons of ore milled 54,354 51,888
Mining cost per ton $ 36.56 $ 34.52
Milling cost per ton $ 26.62 $ 23.79
Ore grade milled - Silver (oz./ton) 16.38 15.53
Silver produced (oz.) 704,928 614,094
Gold produced (oz.) 4,852 4,728
Lead produced (tons) 1,555 1,615
Zinc produced (tons) 4,602 4,537
Average cost per ounce of silver
produced(1):
Cash operating costs $ (5.15) $ (1.78)
Total cash costs (2) $ (4.62) $ (1.28)
Total production costs $ (1.54) $ 1.95
Capital additions (in thousands) $ 1,911 $ 1,987
LA CAMORRA UNIT
Tons of ore processed 60,630 54,547
Mining cost per ton $ 147.84 $ 123.24
Milling cost per ton $ 23.99 $ 16.59
Ore grade milled - Gold (oz./ton) 0.591 0.701
Gold produced (oz.) 31,479 37,620
Average cost per ounce of gold produced:
Cash operating costs $ 455 $ 348
Total cash costs (2) $ 475 $ 357
Total production costs $ 631 $ 508
Capital additions (in thousands) $ 2,862 $ 3,705
(1) Gold, lead and zinc produced have been treated as a by-product
credit in calculating silver costs per ounce.
(2) 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.
HECLA MINING COMPANY
Reconciliation of Cash Costs per Ounce to Generally Accepted
Accounting Principles (GAAP)(1)
(dollars and ounces in thousands, except per ounce - unaudited)
First Quarter Ended
----------------------------
Mar. 31, 2007 Mar. 31, 2006
GOLD OPERATIONS
Total cash costs $ 14,710 $ 13,209
Divided by gold ounces produced 31 37
------------- -------------
Total cash cost per ounce produced $ 475 $ 357
============= =============
Reconciliation to GAAP (2):
Total cash costs $ 14,710 $ 13,209
Depreciation 4,770 5,531
Treatment & freight costs (1,377) (1,594)
By-product credits 477 410
Change in product inventory 705 (3,711)
Reduction in labor costs 331 - -
Reclamation, severance and other costs 25 (16)
------------- -------------
Costs of sales and other direct
production costs and depreciation,
depletion and amortization (GAAP) $ 19,641 $ 13,829
============= =============
SILVER OPERATIONS
Total cash costs $ (1,749) $ 2,540
Divided by silver ounces produced 1,557 1,241
------------- -------------
Total cash cost per ounce produced $ (1.12) $ 2.05
============= =============
Reconciliation to GAAP:
Total cash costs $ (1,749) $ 2,540
Depreciation, depletion and
amortization 3,067 2,616
Treatment & freight costs (8,461) (6,953)
By-product credits 24,832 15,327
Change in product inventory (652) 653
Reclamation, severance and other costs 45 45
------------- -------------
Costs of sales and other direct
production costs and depreciation,
depletion and amortization (GAAP) $ 17,082 $ 14,228
============= =============
GREENS CREEK UNIT (Reflects Hecla's 29.73% share)
Total cash costs $ (3,258) $ (788)
Divided by silver ounces produced 705 614
------------- -------------
Total cash cost per ounce produced $ (4.62) $ (1.28)
============= =============
Reconciliation to GAAP:
Total cash costs $ (3,258) $ (788)
Depreciation, depletion and
amortization 2,131 1,943
Treatment & freight costs (5,036) (4,342)
By-product credits 14,200 10,326
Change in product inventory (173) (217)
Reclamation, severance and other costs 39 42
------------- -------------
Costs of sales and other direct
production costs and depreciation,
depletion and amortization (GAAP) $ 7,903 $ 6,964
============= =============
LUCKY FRIDAY UNIT
Total cash costs $ 1,509 $ 3,328
Divided by silver ounces produced (3) 852 627
------------- -------------
Total cash cost per ounce produced $ 1.77 $ 5.31
============= =============
Reconciliation to GAAP:
Total cash costs $ 1,509 $ 3,328
Depreciation, depletion and
amortization 936 673
Treatment & freight costs (3,425) (2,611)
By-product credits 10,632 5,001
Change in product inventory (479) (36)
Reclamation and other costs 6 3
------------- -------------
Costs of sales and other direct
production costs and depreciation,
depletion and amortization (GAAP) $ 9,179 $ 6,358
============= =============
RECONCILIATION TO GAAP, ALL OPERATIONS
Total cash costs $ 12,961 $ 15,749
Depreciation, depletion and
amortization 7,837 8,147
Treatment & freight costs (9,838) (8,547)
By-product credits 25,309 15,737
Reduction in labor costs (3) 331 - -
Change in product inventory 53 (3,058)
Reclamation and other costs 70 29
------------- -------------
Costs of sales and other direct
production costs and depreciation,
depletion and amortization (GAAP) $ 36,723 $ 28,057
============= =============
(1) Cash costs per ounce of silver or gold represent non-U.S.
generally accepted accounting principles (GAAP) measurements that the
company believes provide management and investors an indication of
net cash flow, after consideration of the realized price received for
production sold. Management also uses this measurement for the
comparative monitoring of performance of mining operations period-to-
period from a cash flow perspective. "Total cash cost per ounce" is a
measure developed by gold companies in an effort to provide a
comparable standard; however, there can be no assurance that our
reporting of this non-GAAP measure is similar to that reported by
other mining companies. Cost of sales and other direct production
costs and depreciation, depletion and amortization are the most
comparable financial measures calculated in accordance with GAAP to
total cash costs.
(2) Costs per ounce of gold are based on the gold produced by the La
Camorra mine and our Block B concessions only. During the quarters
ended March 31, 2007 and 2006, gold produced from third-party mining
operations located near the La Camorra mine and Block B concessions
was treated as a by-product credit and included in the calculation of
gold costs per ounce.
(3) Incentives have been offered at the La Camorra mine for voluntary
reduction of the workforce. During the quarter ended March 31, 2007,
these costs of sales and other direct production costs of $0.3
million were not included in the determination of total cash costs
for gold operations.
CONTACT: Hecla Mining Company
Vicki Veltkamp, 208/769-4128
vice president - investor and public relations