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2015 vs 2016
5.8 million oz
Silver Equivalent Production*
Cash Provided by Operating Activities
Mine Life
Lucky Friday Mine
7.0 million oz
$26.4 million
$8.3 million
20+ years
Idaho, USA
Best Days Ahead. Lucky Friday produced 3.6 million ounces of silver in 2016 – the most in 16 years – due to higher mill throughput, grades, and recoveries. The #4 Shaft was completed and commissioned, which allows access to higher-grade orebodies and extends the mine life. Union workers at Lucky Friday went
on strike in March of this year; dialogue with union leadership is ongoing. The mine will be celebrating its 75th year in operation in 2017, and has an expected mine life of 20-30 years.
144.7 million oz
Reserves (Silver Equivalent)*
141.4 million oz
*Calculated using average metal prices.
Our record-breaking performance in 2016 is the result of this multi-layered strategy built around long-lived, low-cost mines. It’s something we’ve been talking about for some time now, and our outperformance speaks to the success of the strategy.
PROVEN RESULTS
Over the past several years, when the industry-wide mantra was cut costs, sell assets, and pay down debt, we said, in effect, No. Instead, we chose to invest in our business, increasing productivity and organically increasing production, so that when the cycle turned we would be ready with increased production capacity to benefit from the higher metals prices.
The benefit of this strategy was clearly seen in 2016, when we
added over $40 million in cash and short-term investments to the balance sheet.
Our plan has been, and continues to be, to keep investing and innovating. Many of the projects we’re talking about require relatively small capital expenditures that have the potential to generate double- and triple-digit returns. More important, the innovations we’re working on should make our mines safer.
INNOVATION
In all probability, most of the near-surface, high-grade ore deposits in the U.S. have already been discovered and mined, so new mines are trending toward being lower-grade and deeper, which can present additional technical challenges. New technology, much of it adapted
HL / 4
The Lucky Friday #4 Shaft, the largest capital project in Hecla’s history, was sunk to a final depth of 9,587 feet below the surface in early May and is now fully operational. The deepest shaft in the United States, it will provide access to the high-grade zone that expands with depth, increasing both production and mine life.