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 161,000 to 165,000 ounces of gold in 2018 at a cash cost, after by-product credits, of $775 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.

2017 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 third quarter of 2018, up to six underground drills were used to refine stope designs, expand reserves and resources in the 118, 121, 123, 124 and 125 zones, and confirm further potential at depth and to the east and west.  Up to four drills on surface completed in-fill and exploration drilling at the West Mine Crown Pillar (WMCP), Principal, 134 and 160 zones to potentially expand the proposed Principal Pit, and provide the basis for an initial pit design of the WMCP.  Resource modeling and pit optimization studies are completed and confirm the extension of the current East Mine Crown Pillar (EMCP) pit to the west.  Deeper drilling has also identified high-grade zones that extend from the proposed 134, 160 and Principal pits into the underground.

At the Lower 118 Zone, drilling confirmed the continuity of multiple mineralized lenses to the west and at depth outside the current resource boundary. Recent intersections continue to expand this resource, including 0.24 oz/ton gold over 25.8 feet and 0.20 oz/ton gold over 25.3 feet.  An additional drill is planned to move to the west end of the 990-drift to evaluate the down-plunge to the west of the 118 Zone.  Drilling of the Lower 118 Zone, at the bottom of the mine, has confirmed continuity of resources and shown mineralization is open at depth.

In the third quarter of 2018, drilling of stacked, high-grade lenses of the 123 Zone is defining the connection of multiple mineralized lenses for over 1,900 feet of strike length and over 3,600 feet down-dip below the 1070 level.  Near the top of the 123 Zone, step-out drilling to the east on the 430 level intersected 0.70 oz/ton gold over 15.3 feet and 0.50 oz/ton gold over 4.9 feet and has shown continuity with high-grade mineralization intersected with drilling from surface.  Drilling from the 970 level confirmed multiple lenses that are expected to add to current mining reserves to the east. Recent drill results from this area include 0.37 oz/ton gold over 11.0 feet and 0.30 oz/ton gold over 8.2 feet.  Drilling below the the western extension of the current 123 Zone resource intersected in this area include 0.40 oz/ton gold over 63.7 feet and 0.25 oz/ton gold over 37.3 feet, and suggest these mineralized lenses plunge west at depth and remain open for exploration.

High in the mine, drilling during the third quarter has targeted the east extension of the 124 Zone that is down-plunge of the Principal pit mineralization.  Recent intersections just north of the Casa Berardi Fault include 0.16 oz/ton gold over 41.6 feet and 0.22 oz/ton gold over 9.2 feet.  Future drilling below the 290 level should define this trend further to depth.  The exploration of the 125 Zone from the 810 level focus drilling towards the north and targeting splays of the Casa Berardi Fault to extend the 118 Zone to the east. Initial results are favorable, and recent intersections include 0.34 oz/ton gold over 6.2 feet and 0.10 oz/ton gold over 10.5 feet, which confirm the model of multi-stacked lenses along the Casa strike and open the exploration east of the Principal Mine.

In the third quarter of 2018, definition drilling has commenced at the 300 level of the East Mine to refine the depth extensions from surface of the 160 Zone.  In the last quarter, a second drill is planned for the 485 level to define the high-grade plunge of the 148 Zone of the East Mine.

During the third quarter exploration drilling on surface targeted the west extension of the East Mine to investigate the underground potential of the 146 and 148 lenses and East Mine Crown Pillar (EMCP) open pit.  Drills intersections in this area including 0.16 oz/ton over 14.4 feet suggest that the 146 to 160 zone area is open over 1,600 feet west and 900 feet down dip of the known resources.  Drilling of the West Mine Crown Pillar (WMCP) to evaluate open pit potential west of the West Shaft continues to intercept strong mineralized structures near surface.  A recent intersection of 0.10 oz/ton gold over 90.0 feet includes an interval of 0.13 oz/ton gold over 34.4 feet.  The WMCP resource modeling is in progress and drilling results should be included in the end of year 2018 reserves.

For the remainder of 2018, underground drilling is expected to expand and refine the 118 and 123 zones lower in the mine and the 124-128 zones closer to surface.  Drilling of the 160 Zone from underground has begun with the goal of refining and expanding a series of broad, high-grade veins in the newly-accessible East Mine.  Surface drilling programs are planned at the 128-129 zones (Principal area), to define and expand underground mining potential east of the Principal area along the Casa Berardi Fault.

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)