Greens Creek | Admiralty Island, Alaska
Hecla’s 100%-owned and operated Greens Creek mine in southeast Alaska is one of the largest and lowest-cost primary silver mines in the world, last year producing 6.4 million ounces of silver at a cash cost, after of by-product credits, per silver ounce of $2.70 (a non GAAP measure)(1). Production in 2013 is expected to be approximately 7 million ounces of silver.
In the third quarter of 2013, the US Forest Service issued a Record of Decision (ROD) on the planned expansion of the Greens Creek Tailings Facility. The ROD supports construction of a facility that provides storage capacity that is sufficient for the current mine life. The ROD is in an appeal period through the remainder of the year. Assuming the appeal process is completed favorably, the ROD should be implemented and required permits are expected to be obtained in 2014.
In 2012, Greens Creek had record capital expenditure since the opening of the mine, a total of $62.2 million, which was focused on underground mine development, definition drilling, mining fleet replacement, tailings dam expansion, and the construction of expanded and upgraded camp facilities, all of which set us up for improved operations with a longer life.
For the coming year, the capital expenditures budget is projected to be about $72.0 million, with a focus on mine rehabilitation around the historic East Ore Zone, continued mine development, as well as the purchase of new equipment.
The mine holds current proven and probable silver reserves of 94.5 million ounces, 718,400 ounces of proven and probable gold reserves, as well as 767,410 tons of lead and 702,300 tons of zinc in proven and probable reserves.
There are an additional 2.6 million ounces of silver indicated resource and 43.0 million ounces of silver inferred resources. Indicated gold resources measure 53,500 million ounces and inferred gold resources measure 379,200 ounces.
Drilling efforts over the past ten years have replaced production and added new reserves and resources. Exploration efforts are ongoing along the trend of numerous orebodies underground and aggressively exploring the highly prospective 27-square-mile land package on surface. Underground drilling efforts this year are looking to convert resources to reserves and define extensions to the 200 South, Southwest Bench and NNW. Surface drilling at Killer Creek may define a new mineralizing center at Greens Creek.
(1) Cash cost, after of by-product credits, per silver ounce is a non-GAAP measurement. A reconciliation of total cash cost 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.