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Innovation has brought us to a tipping point in our industry, and at Hecla. Driving innovation forward is our dedication to continuous improvement initiatives and our very talented, motivated, and committed workforce. We have the right people and culture in place to be an innovation leader among our peers.
Part of our continued focus on innovation is our commitment to safety. In December, Hecla was recognized by the National Mining Association for receiving an independent certification under its CORESafety® system – the first hardrock mining company to do so. CORESafety is a voluntary mine safety and health initiative that emphasizes accident prevention using a risk-based management system. Its objective is zero fatalities and a 50% reduction in injury rate within five years of implementation. This is a significant achievement, and is only possible because of the commitment to safety exhibited at every level of our workforce, from the miners to site management and beyond.
SAN SEBASTIAN
One of the most noteworthy stories from 2016 has been the exceptional performance of our San Sebastian mine in Durango,
Mexico. This was a property that we previously mined for five years, then we spent the next 10 exploring the 180-square-mile land package – where we found a high-grade, near-surface deposit. We quickly brought the mine back into production in late 2015 with less than
$5 million of capital, with expectations at the time of an 18-month to two-year mine life and about a 400% internal rate of return (IRR).
The performance has been much better than expected. With only $2 million of capital in 2016, the mine produced 4.3 million ounces
of silver and more than 34,000 ounces of gold, and generated over
$92 million in cash provided by operating activities less capital expenditures. The cost of sales was $31.2 million for 2016 and cash cost, after by-product credits, was negative $3.35 an ounce. The IRR was more than 1,000% with a six-week payback.
New discoveries in 2016 have opened up the potential for underground mining. We are working on plans to begin this by the end of 2017 and we have the option to extend the mill agreement for a third year (2018). Mine life extension at San Sebastian is a key priority, and there is an active exploration program ongoing.
2015 vs 2016
146.0 thousand oz
Gold Production
Cash Provided by Operating Activities
Mine Life
1.3 million oz
127.9 thousand oz
$51.6 million
11 years
Gold Reserves
$64.5 million
Casa Berardi Mine
1.3 million oz
Quebec, Canada
Optimizing Operations. Casa Berardi produced 145,974 gold ounces in 2016, and the mill operated at record throughput of 2,726 tons per day (tpd). Continued mill optimization should increase peak throughput to 3,400 tpd in 2017. The East Mine Crown Pillar pit produced
its first gold in 2016 and is expected to produce about 30,000 ounces a year over its 5-6 year mine life.
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