Page 7 - HMC_2014AR_Cover_032615.indd
P. 7

improvement. On the technology side we have Mark Board, one of the world’s foremost geotechnical engineers. Mark was recently elected to the National Academy of Engineering, one of the highest professional distinctions accorded to an engineer. And for process improvement we have Christian Bourcier, most recently the general manager at Casa Berardi. Upon our acquisition of Casa Berardi in 2013, we found a number of practices – like maintenance, for one – that were best in class. Christian will be applying his knowledge and experience in process improvement company-wide.
The Promise of Silver
For the past couple of years, I’ve talked about silver as an indispensable element. How industry demands it, technology requires it, and emerging economies depend on it. How its amazing utility has led to an 80 percent increase in demand in just 20 years (source: World Bank, GFMS), and a dramatic increase in consumption in emerging economies worldwide. And how its growing necessity should enable Hecla to deliver value to its shareholders. If anything, I’m even more sold on the long-term potential for silver today – both in terms of its applications and in terms of the number of people using those applications. In fact, I believe that going from the current billion-ounce market to a billion-and-a-half-ounce market in the next 20 to 30 years is not out of the question.
2015
In addition to the competitive advantages that have made Hecla stronger than ever, we are also taking steps to de-risk the business.
Our planned exploration expenditures for 2015 are reduced, in part because the long lives of our high-quality assets mean that exploration for reserves and resources can be reduced in times of weak metals prices. As part of our 2015 planning process, we run scenarios at significantly lower prices than current spot prices for all our metals. If prices were to deteriorate significantly, you would see us alter our plans accordingly. At current prices, we’re very comfortable with this year’s capital spending plans, because we know the value that our capital projects can bring to Hecla, both in terms of our growing production
and EBITDA from our existing assets, as well as increasing the consistency of the performance of those assets.
And when it comes to growth over the next few years, our main initiative is the #4 Shaft at the Lucky Friday, which is proceeding on track and on budget, and is designed to give us access to richer ore at depth. We are within two years of the planned completion of this long- term project, and the higher-grade material we expect to access should be the driver of Lucky Friday’s production and Hecla’s EBITDA growth. In addition, you’ll hear us talking more about San Sebastian, which is looking like it could become a producing mine in the near term. San Sebastian is in a district that we believe will ultimately have more than 100 million silver equivalent ounces. The resource there is expanding rapidly, with the discovery of new veins in close proximity to each other that have impressive and increasing strike lengths. And the near-surface material is high-grade and could be very low-cost to access, potentially generating very good returns.
Thank You
Finally, in my almost 30 years in precious metals mining I have not worked for a company that has the characteristics that Hecla now has: long-lived, low-cost mines in some of the best places to mine in the world – Alaska, Idaho, Quebec; a strong technical knowledge of our properties’ geology and operations that is ever growing; and finally – and maybe most importantly – colleagues who care so deeply about their community, company, and fellow employees. So I thank the entire Hecla workforce, board of directors, and management team for such a strong performance in a tough environment. And, most of all, I have our shareholders to thank for your continued support.
Phillips S. Baker, Jr.
president and chief executive officer
March 27, 2015
    HL . 5





















































































   5   6   7   8   9