Casa Berardi La Sarre, Quebec

Hecla’s 100% owned Casa Berardi mine, is an underground gold mine located in western Quebec, a politically stable and mining friendly region, with good geology and infrastructure. In 2017, the mine produced 156,653 ounces of gold at a cash cost, after by-product credits, per gold ounce of $820 (1). The mill throughput rate averaged 3,551 tons per day. The mine is expected to produce 155,000 to 160,000 ounces of gold in 2018 at a cash cost, after by-product credits, of $800 per ounce (1).

(1) Cash cost, after by-product credits, per gold ounce represents a non-GAAP measurement, a reconciliation of which to cost of sales and other direct production costs and depreciation, depletion and amortization (GAAP) can be found in the legal page of this website.

Map - Casa Berardi
Overview & History

The Casa Berardi mine is situated 95 kilometres north of La Sarre, Quebec and straddles a 37 kilometre section of the Casa Berardi fault.

The Casa Berardi gold deposits are located along a five kilometre east-west mineralized corridor. They include the East and West mines, and the Principal Zones. The Casa Berardi gold deposits can be classified as an Archean sedimentary-hosted lode gold deposit. The gold mineralization is superimposed on a continuous graphitic mudrock unit corresponding to the Casa Berardi Fault plane. Gold occurs mainly south of the Casa Berardi Fault, and occasionally on both sides of the fault.

The West Mine shaft deepening project, which included construction of loading pockets and other related infrastructure, was completed in the fourth quarter of 2014, and is improving mine operations by providing additional access to the 118 and 123 zones for transporting ore and waste from underground. Excavation of the 985 drift (previously referred to as 1010) from the deepened shaft is underway. This drift is expected to improve ventilation and material handling and also provide a platform for deeper exploration drilling.

The Company is now producing ore from the East Mine Crown Pillar (EMCP) pit. Located near the East mine, the capital for this shallow pit project is expected to be $39 million over 5.5 years. The project has an expected IRR of 90%, contributed 8,547 ounces in 2016, and is expected to produce about 30,000 ounces of gold starting in 2017 and until the end of the project.

Production

Casa Berardi is an underground trackless mine accessed by declines and a shaft, which produced approximately 2,100 tonnes of ore per day in 2015. The mining methods are longhole transversal stoping in 10 metres or more mineralization width, and longitudinal retreat stoping in narrower ore bodies. The mineralized zones put in reserves are of varying thickness, ranging from a few tens of meters to 3 meters, which is the minimum mining width. Most of the hanging walls are sub-vertical (55° to 85°), with typically the graphitic Casa Berardi fault at the footwall. Throughput is expected to increase to 2,900 tonnes per day with the EMCP.

The mine has produced approximately 1.9 million recovered gold ounces since commencing production in 1988, including about 931,244 recovered ounces since production recommenced in November 2006.

(years ended December 31)
2014 2015 2016 2017
Silver (ounces) 25,014 29,639 33,641 36,566
Gold (ounces) 128,244 127,891 145,975 156,653
Cash cost per ounce of gold, after by-product credits, ($/oz) (1) $826.35 $772.00 $764.00 $820.00
 
(footnotes)
(1) Cash cost, after by-product credits, per silver or gold ounce is a non-GAAP measurement. A reconciliation of cash cost, after by-product credits, per silver or gold ounce to cost of sales and other direct production costs and depreciation, depletion and amortization (GAAP) can be found in the legal page of this website.

Year-End Production PDF

Reserves & Resources

Information with respect to proven and probable ore reserves, measured, and inferred resources is set forth below.

(As of December 31, 2017 unless otherwise noted)
 Tons Silver Gold Lead Zinc Silver Gold Lead Zinc
(000) (oz/ton) (oz/ton) (%) (%) (000 oz) (000 oz) (Tons) (Tons)
Proven Reserves (1,2) 2,458 0.13 312
Probable Reserves (1,2) 11,413 0.10 1,181
Proven and Probable Reserves (1,2) 13,871 0.11 1,494
Measured Resources (3) 2,210 0.17 319
Indicated Resources (3) 11,037 0.10 1,055
M&I Resources (3) 13,246 0.10 1,373
Inferred Resources (3) 6,980 0.10 717
 
(footnotes)
Note: All estimates are in-situ. Resources are exclusive of reserves. Totals may not represent the sum of parts due to rounding.

(1) The term “reserve” means that part of a mineral deposit that can be economically and legally extracted or produced at the time of the reserve determination. The term “economically,” as used in the definition of reserve, means that profitable extraction or production has been established or analytically demonstrated to be viable and justifiable under reasonable investment and market assumptions. The term “legally,” as used in the definition of reserve, does not imply that all permits needed for mining and processing have been obtained or that other legal issues have been completely resolved. However, for a reserve to exist, Hecla must have a justifiable expectation, based on applicable laws and regulations, that issuance of permits or resolution of legal issues necessary for mining and processing at a particular deposit will be accomplished in the ordinary course and in a timeframe consistent with Hecla’s current mine plans.
(2) Mineral reserves are based on $1,200 gold and a US$/CAN$ exchange rate of 1:1.37. Reserve diluted to an average of 34.7% to minimum width of 9.8 feet (3 m).
Reserves at Casa Berardi were determined by Jonathan Archambault-Giroux, P. Geo., Que., Real Parent, P.Geo. Que., Sylvain Picard, P. Eng., Que. and Alain Quenneville, P. Eng., Que. unless otherwise stated.
Open pit mineral reserves of the Principal Mine were estimated in February 2011 by BBA Inc. based on $950 gold and a US$/CAN$ exchange rate of 1:1. Reserve diluted to 10%.
     Technical Report on the Pre-Feasibility Study for the Casa Berardi Principal Zone Open-Pit Project, La Sarre, Quebec, February 2011
     Prepared by:  Patrice Live, Eng. – BBA Inc.; Amanda Fitch, Jr. Eng. – BBA Inc.; Andre Allaire, Eng., M. Eng., Ph.D. – BBA
Open pit mineral resources of the 160 and 134 Zones were estimated in January 2018 by Hecla Quebec and Mine Development Associates based on $1,225 gold and a US$/CAN$ exchange rate of 1:3.
     Hecla Mining, Casa Berardi 160 and 134 Zones, Open Pit Mining Study – 2017
January 12, 2018, by Mine Development Associates, Thomas L. Dyer, P.E.
(3) Measured, indicated and inferred resources are based on $1350 gold and a US$/CAN$ exchange rate of 1:1.37.  Underground resources are reported at a minimum mining width of 6.6 to 9.8 feet (2 m to 3 m).
Resources at Casa Berardi were determined by Jonathan Archambault-Giroux, P. Geo., Que., Real Parent, P.Geo. Que., Sylvain Picard, P. Eng., Que. and Alain Quenneville, P. Eng., Que. unless otherwise stated.
Open pit mineral resources of the Principal Mine were estimated in February 2011 by BBA Inc. based on $950 gold and a US$/CAN$ exchange rate of 1:1.
      Technical Report on the Pre-Feasibility Study for the Casa Berardi Principal Zone Open-Pit Project, La Sarre, Quebec, February 2011
Prepared by:  Patrice Live, Eng. – BBA Inc.; Amanda Fitch, Jr. Eng. – BBA Inc.; Andre Allaire, Eng., M. Eng., Ph.D. – BBA

Reporting requirements in the United States for disclosure of mineral properties are governed by the SEC and included in the SEC’s Securities Act Industry Guide 7, entitled “Description of Property by Issuers Engaged or to be Engaged in Significant Mining Operations” (Guide 7). However, the Company is also a “reporting issuer” under Canadian securities laws, which require estimates of mineral resources and reserves to be prepared in accordance with Canadian National Instrument 43-101 (NI 43-101). NI 43-101 requires all disclosure of estimates of potential mineral resources and reserves to be disclosed in accordance with its requirements. Such Canadian information is being included here to satisfy the Company’s “public disclosure” obligations under Regulation FD of the SEC and to provide U.S. holders with ready access to information publicly available in Canada.

Reporting requirements in the United States for disclosure of mineral properties under Guide 7 and the requirements in Canada under NI 43-101 standards are substantially different. This website contains a summary of certain estimates of the Company, not only of proven and probable reserves within the meaning of Guide 7, which requires the preparation of a “final” or “bankable” feasibility study demonstrating the economic feasibility of mining and processing the mineralization using the three-year historical average price for any reserve or cash flow analysis to designate reserves and that the primary environmental analysis or report be filed with the appropriate governmental authority, but also of mineral resource and mineral reserve estimates estimated in accordance with the definitional standards of the Canadian Institute of Mining, Metallurgy and Petroleum referred to in NI 43-101. The terms “measured resources”, “indicated resources,” and “inferred resources” are Canadian mining terms as defined in accordance with NI 43-101. These terms are not defined under Guide 7 and are not normally permitted to be used in reports and registration statements filed with the SEC in the United States, except where required to be disclosed by foreign law. The term “resource” does not equate to the term “reserve”. Under Guide 7, the material described herein as “indicated resources” and “measured resources” would be characterized as “mineralized material” and is permitted to be disclosed in tonnage and grade only, not ounces. The category of “inferred resources” is not recognized by Guide 7. Investors are cautioned not to assume that any part or all of the mineral deposits in such categories will ever be converted into proven or probable reserves. “Resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of such a “resource” will ever be upgraded to a higher category or will ever be economically extracted. Investors are cautioned not to assume that all or any part of a “resource” exists or is economically or legally mineable. Investors are also especially cautioned that the mere fact that such resources may be referred to in ounces of silver and/or gold, rather than in tons of mineralization and grades of silver and/or gold estimated per ton, is not an indication that such material will ever result in mined ore which is processed into commercial silver or gold.

2016 Reserves & Resources PDF

Exploration

In 2017 at Casa Berardi, the 1,296,228 tons processed at the mill contained 180,373 ounces of gold, with 805,062 tons (62%) of the milled tonnage coming from underground and 491,166 tons (38%) of the milled tonnage coming from the EMCP open pit.  Reserve tonnage at Casa Berardi increased 34% and contained gold increased approximately 14% to 1.49 million ounces.  Underground production from the 118, 123 and 124 (Principal) zones was offset by reserve additions in those zones and new reserves defined in the East Mine underground. There was an overall reduction in underground reserves of 21,600 gold ounces.  Open pit production from the EMCP was more than offset by reserve gains at the 134 and 160 zone open pits for a gain of 205,700 gold ounces.  Measured and indicated gold resources decreased 6% with increases at the 124 (Principal underground), 134 (Out of pit), SW (107), 118, and 123 zones that were countered by losses at the East Mine underground and in the 160 and 134 zones as this material was converted into reserves.  Inferred resources were added at Casa Berardi with a 14% increase in contained gold ounces due to increases at the 160 (underground), SW (107), 134 (Out of Pit), and 119 zones.  There were losses to inferred resources as resources were upgraded to indicated category in the 134 Pit, Principal underground and 118 zones.

During the fourth quarter, six underground drills were used to refine stope designs, expand reserves and resources in the 118, 123, and 124 zones and confirm further potential at depth, to the west and in some cases to the east.  Up to four drills on surface completed in-fill and exploration drilling that could expand the proposed Principal Pit and the current EMCP pit and discover new mineralization that could lead to pits in the west part of the mine.

At the Lower 118 Zone, drilling has confirmed the continuity of multiple mineralized lenses that extend over 1,600 feet down-plunge and remain open to depth and to the east and west of the current resources.  Drilling near the bottom of the mine returned 0.90 oz/ton gold over 21.9 feet and 0.38 oz/ton gold over 37.8 feet and suggests there is good potential to extent high-grade resources to the west and to depth near the Casa Berardi Fault and below the current mine infrastructure.

Drilling of stacked, high-grade lenses of the 123 Zone is defining the connection of multiple mineralized lenses for over 1,600 feet of strike length and over 3,000 feet down-dip below the 1010 level.  Drilling on the western extreme of the lower 123 Zone intersected 0.32 oz/ton gold over 37.1 feet, confirming the continuation of multiple lenses. Also, to the east there was an intersection grading 0.22 oz/ton gold over 24.0 feet. Drilling below the mine infrastructure intersected 0.41 oz/ton gold over 10.7 feet and 0.35 oz/ton gold over 11.5 feet. Drilling of the lower 123 Zone at the bottom of the mine confirmed vein continuity and shows that it is open at depth and to the east and west of the current resources.

Intersections from drilling on the upper part of the 124 Zone include 0.91 oz/ton gold over 4.6 feet and 0.42 oz/ton gold over 17.7 feet, suggesting mineralization continues down from surface and is open at depth and to the west. Drilling in this area has also confirmed the high-grade nature of the crown pillar below the proposed Principal Pit.

Surface and shallow underground drilling have identified extensions of potential pits that are being evaluated for production. Drilling along the northeast extension of the proposed Principal Pit area confirmed 1,200 feet of continuity to the northeast and includes an intersection of 0.11 oz/ton gold over 7.2 feet.  Drilling targeting the shallow eastern extension of the 124 Zone intersected strong mineralization including 0.14 oz/ton gold over 9.7 feet. Underground drilling of this target is planned to evaluate deeper extensions of the high-grade shoots. Drilling on the west extension of the current EMCP pit has returned 0.09 oz/ton gold over 27.8 feet and 0.07 oz/ton gold over 50.7 feet to define an extension over 700 feet to the west of the current pit outline.

Drilling of the West Mine Surface Pillar within 800 feet of surface to the west of the west shaft intersected a broad mineralized zone of 0.04 oz/ton gold over 78.7 feet that contains an interval of 0.12 oz/ton gold over 13.8 feet.  In-fill drilling in 2018 may convert a large portion of those resources to indicated category with the eventual incorporation into the life of mine plan.

Aggressive surface drilling programs are planned through 2018 at the 124 Zone (Principal area), 146/EMCP, West Mine Surface Pillar and South West zones to define a possible series of open pits along the Casa Berardi Fault.  Underground drilling is expected to continue to expand and refine the lower 118, 121 and 123 zones lower in the mine.

Future Plans

The Company began producing gold from the first surface pit in 2016. Once the EMCP is exhausted, it is expected that the Principal pit will begin operating to maintain the 2,900 tonnes per day throughput.

125 Years of Mining (French)