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from the manufacturing, electronics, and communications industries, is already reshaping the way underground mines operate. Hecla is a leader among companies our size at adopting these new technologies to increase productivity and improve safety. Three recent innovations in particular are having a profound impact on the industry: high-speed wireless data transfer, tele-remote and autonomous equipment operation, and battery technology.
High-speed wireless data transfer is being used to improve communication, monitoring, and data collection. At our Greens Creek mine in Alaska, we’ve run fiber through most of the working areas, and have about 70 hotspots for wireless data collection. This system has enabled management to make better-informed decisions based on real-time information from the underground operations. We’re also able to monitor the operating environment, reduce accidents, and ensure proper equipment performance.
This wireless system also enables both tele-remote and autonomous equipment operation from the surface. Some examples include fully autonomous trucking, tele-remote front-end loaders and drills that can be operated in a semi-autonomous fashion, and remote-controlled
equipment like fans, pumps, rock breakers, conveyors, and shafts.
We are in the process of adopting some of these capabilities, including ventilation on demand at Greens Creek, which is expected to increase energy efficiency by 11%.
Right now at Lucky Friday we are working with an equipment manufacturer to develop a mechanical mining machine that could eliminate the need for drilling and blasting. Instead, the machine would mine the hardrock orebody by cutting the rock and installing ground support as it goes. This would significantly increase the efficiency of our operations and move our workers back from the active face. We do not know if this concept will be successful, but the potential improvements in safety and productivity are compelling.
Finally, battery-operated loaders and trucks are now available. They produce no diesel particulates, offer lower heat output (reducing the need for ventilation and refrigeration), and generate significantly lower noise levels. We’re testing purposely-designed loaders underground at Lucky Friday, and the results so far have been promising, leading me to believe that this technology will eventually replace diesel-powered equipment underground.
Preliminary Economic Assessment*
Capital Expenditures
Actual
4.5 million oz
2016 Silver Equivalent Production**
2016 Cash Provided by Operating Activities
Preliminary Economic Actual Assessment*
404% +1000% Internal Rate of Return
Actual
$5.0 million
$5.8 million
Estimate
6.8 million oz
San Sebastian Mine
$93.9 million
Durango, Mexico
Exceeding Expectations. The company’s newest silver and gold mine, San Sebastian began mining ore from high-grade surface pits in December 2015 and has generated over $92 million in cash provided by operating activities less capital expenditures in 2016. Multiple opportunities exist to extend mine life, including new discoveries from ongoing exploration programs, resource conversion, and the option of underground mining.
*The Preliminary Economic Assessment was completed in September 2015 by AMC Mining Consultants and is available on SEDAR. **Calculated using average metal prices.
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