Hecla’s 100% owned Casa Berardi mine, is an underground/open pit gold mine located in western Quebec, a politically stable and mining friendly region, with good geology and infrastructure. In 2020, the mine produced 121,493 ounces of gold at a cash cost, after by-product credits, per gold ounce of $1,131 (1). The mine is expected to produce 128,000 to 132,000 ounces of gold in 2021 at a cash cost, after by-product credits, of $900 – $975 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.
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 complete. This drift is expected to improve ventilation and material handling and also provide a platform for deeper exploration drilling.
The Company began producing ore from the East Mine Crown Pillar (EMCP) pit in July 2016. Located near the East mine, the capital for this shallow pit project is expected to be $39 million over 5.5 years. The project has an expected IRR of 90%.
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Casa Berardi is an underground trackless mine accessed by declines and a shaft. The mining methods are longhole transversal stoping in 10 metres or more mineralization width, and longitudinal retreat stoping in narrower ore bodies. The mineralized zones put in reserves are of varying thickness, ranging from a few tens of meters to 3 meters, which is the minimum mining width. Most of the hanging walls are sub-vertical (55° to 85°), with typically the graphitic Casa Berardi fault at the footwall. In addition, ore in being produced from the East Mine Crown Pillar (EMCP) pit located near the East mine
The mine has produced approximately 2.0 million recovered gold ounces since commencing production in 1988, including about 1.0 million recovered ounces since production recommenced in November 2006.
|(years ended December 31)|
|Cash cost per ounce of gold, after by-product credits, ($/oz) (1)||$764.00||$820.00||$800.00||$1,051.00||$1,121.00|
- (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.
Information with respect to proven and probable ore reserves, measured, and inferred resources is set forth below.
|(As of December 31, 2020 unless otherwise noted)|
|(000)||(oz/ton)||(oz/ton)||(%)||(%)||(000 oz)||(000 oz)||(Tons)||(Tons)|
|Open Pit -|
|Proven Reserves (1,2)||4,437||–||0.09||–||–||–||410||–||–|
|Probable Reserves (1,2)||9,763||–||0.08||–||–||–||744||–||–|
|Proven and Probable Reserves (1,2)||14,200||–||0.08||–||–||–||1,153||–||–|
|Proven Reserves (1,2)||1,038||-||0.15||-||-||-||158||-||-|
|Probable Reserves (1,2)||1,533||-||0.15||-||-||-||231||-||-|
|Proven and Probable Reserves (1,2)||2,571||-||0.16||-||-||-||389||-||-|
|Open Pit -|
|Measured Resources (3)||824||–||0.09||–||–||–||71||–||–|
|Indicated Resources (3)||1,621||–||0.06||–||–||–||97||–||–|
|M&I Resources (3)||2,445||–||0.07||–||–||–||168||–||–|
|Measured Resources (3)||2,231||-||0.15||-||-||-||331||-||-|
|Indicated Resources (3)||5,424||-||0.14||-||-||-||750||-||-|
|M&I Resources (3)||7,656||-||0.14||-||-||-||1,081||-||-|
|Open Pit -|
|Inferred Resources (3)||9,229||–||0.06||–||–||–||508||–||–|
|Inferred Resources (3)||2,447||-||0.18||-||-||-||445||-||-|
- (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 $1300 gold and a US$/CAN$ exchange rate of 1:1.35. Reserve diluted to an average of 18% or 23% depending on mining method. The average cut-off grades at Casa Berardi are 0.101 oz/ton gold (3.46 g/tonne) for underground mineral reserves and 0.025 oz/ton gold (0.85 g/tonne) for open pit mineral reserves.
(3) Measured, indicated and inferred resources are based on $1,500 gold and a US$/CAN$ exchange rate of 1:1.35. Underground resources are reported at a minimum mining width of 6.6 to 9.8 feet (2 m to 3 m). The average cut-off grades at Casa Berardi are 0.087 oz/ton gold (3.0 g/tonne) for underground mineral resources and 0.025 oz/ton gold (0.85 g/tonne) for open pit mineral resources.
Reporting requirements in the United States for disclosure of mineral properties as of December 31, 2020 and earlier are governed by 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). Effective January 1, 2021, the SEC has issued new rules rescinding Guide 7. Mining companies are not required to comply with the new rules until the first fiscal year beginning on or after January 1, 2021. Thus, the Company will be required to comply with the new rules when filing its Form 10-K for the fiscal year ended December 31, 2021. 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 included herein 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 compared to the new SEC rules (Item 1300 of Regulation S-K under the Securities and Exchange Act of 1934) and the requirements in Canada under NI 43-101 standards are substantially different. This document contains a summary of certain estimates of the Company, not only of Proven and Probable reserves within the meaning of Guide 7, but also of mineral resource and mineral reserve estimates estimated in accordance with the new SEC rules and definitional standards of the Canadian Institute of Mining, Metallurgy and Petroleum referred to in NI 43-101. Under Guide 7, 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. The terms “Measured resources”, “Indicated resources,” and “Inferred resources” are mining terms as defined in accordance with the new SEC rules and NI 43-101. These terms are not defined under Guide 7 and prior to January 1, 2021, were 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.
At Casa Berardi in the fourth quarter of 2020, a new discovery was made in the 160 Zone 500 feet east of the current resource blocks and the zone is open in all directions. The discovery drillhole intersected 0.32 oz/ton gold over 9.5 feet estimated true width including 1.16 oz/ton gold over 2.0 feet estimated true width.
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.