On April 16, 2008, we completed the acquisition of all of the equity of two Rio Tinto subsidiaries holding a 70.3% interest in the Greens Creek mine. The acquisition gives our various subsidiaries control of 100% of the Greens Creek mine. Greens Creek produced a total of 5.8 million ounces of silver for Hecla's account and 54,650 ounces of by-product gold in 2008, at the low average total cash cost of $3.29 per ounce of silver. The average ore grade was 13.69 ounces of silver per ton.
For 2007 and 2006, prior to our acquisition of the remaining 70.3% interest in Greens Creek, Kennecott Greens Creek Mining Company’s geology and engineering staff computed the estimated ore reserves, and provided the weighted average metals prices used in the reserve estimates, for the Greens Creek unit, with our technical support. We reviewed the geologic interpretation and reserve methodology, but the reserve compilations for those periods were not independently confirmed by us in their entirety. Information with respect to production, average costs per ounce of silver produced and proven and probable ore reserves is set forth in the following table, and represents our 100% ownership of Greens Creek after April 16, 2008, and our previous 29.7% ownership prior to that date.
Year Ended December 31, | Production | 2008 | 2007 | 2006 | |
| Ore milled (tons) | 598,931 | 217,691 | 217,676 | |
| Silver (ounces) | 5,829,253 | 2,570,701 | 2,636,083 | |
| Gold (ounces) | 54,650 | 20,218 | 18,713 | |
| Zinc (tons) | 52,055 | 18,612 | 17,670 | |
| Lead (tons) | 16,630 | 6,252 | 6,242 | |
| Average Cost per Ounce of Silver Produced (1) |
2008 | 2007 | 2006 | |
| Total cash costs | 3.29 | ($5.27) | ($3.47) | |
| Total production costs | 8.52 | ($1.93) | ($0.30) | |
| Proven & Probable Ore Reserves (2,3,4,5,6,7) |
2008 | 2007 | 2006 | |
| Total tons | 8,064,700 | 2,513,700 | 2,282,574 | |
| Silver (ounces per ton) | 13.7 | 13.7 | 14.4 | |
| Gold (ounces per ton) | 0.11 | 0.11 | 0.11 | |
| Zinc (percent) | 10.5 | 10.2 | 10.4 | |
| Lead (percent) | 3.8 | 3.8 | 4 | |
| Contained silver (ounces) | 110,583,200 | 34,497,800 | 32,913,002 | |
| Contained gold | 870,100 | 270,000 | 257,101 | |
| Contained zinc (tons) | 850,700 | 255,900 | 237,187 | |
| Contained lead (tons) | 308,700 | 95,300 | 90,919 |
(1) Includes by-product credits from gold, lead and zinc production. Cash costs per ounce of silver represent measurements that are not in accordance with GAAP that management uses to monitor and evaluate the performance of our mining operations. We believe cash costs per ounce of silver provide an indicator of profitability and efficiency at each location and on a consolidated basis, as well as providing a meaningful basis to compare our results to those of other mining companies and other mining operating properties.
(2) Estimates of proven and probable ore reserves for the Greens Creek unit as of December 2008, 2007 and 2006 are derived from successive generations of reserve and feasibility analyses for different areas of the mine each using a separate assessment of metals prices. The weighted average prices used for 2007 and 2006 reserve estimates were determined by the Kennecott Greens Creek Mining Company, then an indirect subsidiary of Rio Tinto, plc, and differ from the prices used by us, for example, in making such calculations for our Lucky Friday unit for those years. The average prices used for the Greens Creek unit were:
| 2008 | 2007 | 2006 | |
| Silver | $12.25 | $8.00 | $6.00 |
| Gold | $650 | $529 | $446 |
| Lead | $0.80 | $0.27 | $0.27 |
| Zinc | $0.80 | $0.58 | $0.47 |
(3) Ore reserves represent in-place material, diluted and adjusted for expected mining recovery. Mill recoveries of ore reserve grades differ by ore zones and are expected to average 74% for silver, 68% for gold, 77% for zinc and 73% for lead.
(4) The changes in reserves in 2008 versus 2007 and 2006 are due to the our acquisition of the remaining 70.3% of Greens Creek, along with the addition of new drill data and increases in forecasted precious metals prices, partially offset by depletion due to production. The changes in reserves in 2007 versus 2006 are due to the addition of new drill data and increases in forecasted precious metals prices, which have resulted in the addition of new reserves based on updated estimates for certain orebodies, partially offset by depletion due to production.
(5) We only report probable reserves at the Greens Creek unit, which are based on average drill spacing of 50 to 100 feet. Proven reserves typically require that mining samples are partly the basis of the ore grade estimates used, while probable reserve grade estimates can be based entirely on drilling results. Cutoff grade assumptions vary by orebody and are developed based on reserve prices, anticipated mill recoveries and smelter payables and cash operating costs. Cutoff grades range from $97 per ton net smelter return to $107 per ton net smelter return.
(6) Reflects our 29.7% ownership interest until April 16, 2008, and our 100% ownership thereafter.
(7) An independent review by AMEC E&C, Inc. was completed in 2008 for the 2007 reserve models for the 5250N and Northwest West zones.