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over the last three to four years. And, going back to the idea of value creation, we’re sitting on sulphide mineralization for which the economics are rapidly changing. Just as with Fresnillo, there’s much we don’t know – but there are numerous geologic signs that it’s a very good place to be.
LUCKY FRIDAY
We are disappointed that the strike by unionized workers, which has been going on since March 13 of last year, has not been resolved.
The fundamental issue at stake is a single question: “Who manages the mine?” The current bid system empowers senior miners to determine where and with whom they work. The union’s position is that the system we’ve had in place for decades doesn’t need to change. But the fact is, the mine has changed dramatically in the last five years – and it will change even more in the future as we mine at greater depths where conditions are more challenging. Today, Lucky Friday is our lowest-margin mine. We believe changes need to be made for it to be more productive and profitable. We are not aware of any hard-rock mines that still use this bid system, and it’s time for modernization to come to Lucky Friday.
Once it resumes operation, we see great potential for Lucky Friday to become a strong performer as it expands production in the higher-grade zones, not to mention with the introduction of the new Remote Vein Miner. We know that this mine can have a 30-plus year future in front of it. That’s why we’re spending the time and energy now to put it in the best position to generate strong returns going forward.
In the meantime, we continue to invest in Lucky Friday, with our salaried workers performing some development and limited production. This helps defray some of the costs resulting from the strike while helping to set the mine up for the Remote Vein Miner’s expected arrival in late 2019.
RESERVES AND RESOURCES
Like innovation, we see exploration as investing in the future of the company. It’s quite an achievement to have recorded the highest silver, gold, and lead reserves in our 127-year history – and the fifth highest zinc reserves – particularly using price assumptions that are significantly below spot and among the lowest in the industry. Our 2.3 million ounces of proven and probable gold reserves increased by 12%; our 177 million
“FOLLOWING A RECORD-BREAKING PERFORMANCE LIKE 2016 IS NEVER EASY, BUT WE DID IT – AND EXCEEDED EXPECTATIONS IN
NEARLY EVERY METRIC.”
HL | 6
Ore trucks haul some of the first ore mined underground at San Sebastian since it reopened, becoming primarily an underground mine in 2018.