San Sebastian Durango, Mexico

San Sebastian is a silver and gold mine, and began mining ore in December 2015. Hecla’s concession holdings at San Sebastian are located in the middle of the prolific Mexican Silver Belt and cover approximately 42,000 hectares (162 square miles). Within this land position is the Francine Vein, Hugh Zone, Middle Vein and Don Sergio-Andrea vein systems as well as multiple prospective exploration targets.

Last year, San Sebastian produced 2.0 million ounces of silver at a cash cost, after by-product credits, per silver ounce of $9.69  (a non GAAP measure) and 14,979 ounces of gold. (1). The mill operated at an average of 395 tpd for the year. Silver production in 2018 is expected to be 2.0 million silver ounces  at a cash cost, after by-product credits of $9.00 an ounce (1) and gold production is expected to be 14,,000 ounces.

(1) Cash cost, after of by-product credits, per silver 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.

Aviso de Privacidad PDF

Map - San Sebastian

Overview & History

The East Francine, Andrea, Middle and North veins now define nearly five miles of mineralized strike length and are open along strike and at depth. In addition, near-surface portions of the East Francine, North and Middle veins contain mineralization that are suitable to open pit mining. San Sebastian contains 2.8 million ounces of proven and probable silver reserves. San Sebastian also contains 14.7 million ounces of measured and indicated silver resources and 22.9 million ounces of inferred silver resources. In addition, there are 23,000 ounces of proven and probable gold reserves and 115,000 ounces of measured and indicated gold resources as well as 143,000 ounces of inferred gold resources.

Underground mining began in January 2018. The mill lease has been extended through 2020. Capital investment is minimized by renting of a nearby, third-party mill and using contract miners.

Hecla operated the underground San Sebastian mine on this property from 2001-2005. During that time, the mine produced 545,476 tons of ore containing 177,541 ounces of gold and 11.6 million ounces of silver from the Francine Vein with an average grade of 0.32 oz/ton gold and 22.5 oz/ton silver, making it one of the highest-grade producers in Mexico. Hecla geologists have long recognized the potential for the district to host similar high-grade mineralization, and a systematic, ongoing exploration effort has been in place since Hecla took control of the district in 1999.

Mineralization in the district is structurally controlled and hosted in sedimentary rocks. Historical production from the Francine vein (2001 to 2005) was from a high-grade silver vein with significant gold mineralization. Production from the Don Sergio vein was from a near-surface, high-grade gold vein with known silver mineralization.

The Hugh Zone was discovered in 2005 and is the high-grade down dip extension of the past-producing Francine vein. The Hugh Zone in combination with recent new discoveries in the district is currently the focus of a pre-feasibility study that will analyze the potential for re-initiating production at the project.  The new study will consider operational synergies with the nearby East Francine, Middle and North veins, where numerous high-grade drill intercepts were reported from 2012 to the present.

Geology & Mining

Mineralization in the district is structurally controlled and hosted in sedimentary rocks.

The mining technique focuses on shallow, near-surface pits on the East Francine, Middle and North veins, targeting high-grade material. The pits are expected to be small, extending to a maximum of about 270 feet in depth. Near-surface material is weathered, and should be easily excavated. Drill and blast techniques are contemplated for deeper material.

The Company is using a contractor for mining operations.

Hecla has secured the use of a Merrill-Crowe processing plant near Velardeña in the State of Durango, Mexico, as announced on July 15, 2015. Under the terms of the agreement, Hecla has exclusive use of the mill for 18 months, with the potential to increase for up to another 12 months. Located within 100 miles of San Sebastian, the mill was previously used by Hecla to process ore when it mined on the property from 2001 to 2005. The mill has been updated to meet the standard Hecla uses for environmental protection and best practices in milling standards.

PEA Summary

A Preliminary Economic Assessment (PEA) of the San Sebastian project was recently completed and shows this is a robust project and a potential significant cash contributor for Hecla in 2016 and 2017. Notably, the PEA does not include results of the recent exploration and in-fill drilling programs described in the Exploration section below that have expanded the resource and improved the confidence of the resource in the open pit areas. Hecla has filed in Canada a National Instrument 43-101 technical report for the San Sebastian project entitled “Technical Report for the San Sebastian Ag-Au Property, Durango, Mexico” dated effective September 8, 2015. The report has been filed under the Company’s profile on SEDAR at, the website maintained by the Canadian Securities Administrators.

The following is a summary of the high-level life of mine economic assumptions of surface mining operations, as outlined in the PEA. (1) (2)

Unit Value
Total Projected Mill Feed tons 273,352
Mill Throughput tons per day 440
Gold Grade oz/ton 0.14
Silver Grade oz/ton 23.9
Gold Recovery % 90.8%
Silver Recovery % 85.5%
Gold Produced (recovered) ounces 35,959
Silver Produced (recovered) ounces 5,585,098
Silver Equivalent Production ounces 8,138,740
Capital (mining and milling) $ million 5.8
Cash cost, after by-product credits, per silver ounce (3) $/ounce 5.49
Total After Tax Cash Flow (5% discount) $ million 43.0
IRR % 404


(1) The PEA is preliminary in nature, and is based on a mineral resource estimate that includes inferred mineral resources (approximately 10% of projected production) that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
(2) Results in this table assume $1,103/oz gold and $15.53/oz silver prices and a 12.5 Peso/Dollar exchange rate.
(3) Cash cost, after by-product credits, per silver ounce represents a non-GAAP measurement, and the most comparable GAAP measures are cost of sales and other direct production costs and depreciation, depletion and amortization.


(year ended December 31)
2015 2016 2017  2018
Silver (ounces) 81,677 4,294,123 3,257,738 2,037,072
Gold (ounces) 870 34,042 25,177 14,979
Cash cost per silver ounce, after by-product credits, ($/oz) (1) $6.71 $(3.35) $(3.36) $9.69
(historical, years ended December 31)
2001 2002 2003 2004 2005
Silver (ounces) 950,002 3,432,394 4,085,038 2,042,173 717,860
Gold (ounces) 15,983 41,510 47,721 33,563 17,160
(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, 2018 unless otherwise noted)
 Tons Silver Gold Lead Zinc Silver Gold Lead Zinc Copper
(000) (oz/ton) (oz/ton) (%) (%) (000 oz) (000 oz) (Tons) (Tons) (Tons)
Proven Reserves (1.2) 22 3.9 0.08 - - 85 2 - - -
Probable Reserves (1,2) 206 13.1 0.10 - - 2,705 21 - - -
Proven and Probable Reserves 228 12.3 0.10 - - 2,790 23 - - -
Measured Resources (3,4)
Indicated Resources (3,4) 2,243 6.5 0.05 14,690 115 30,410 42,710 19,780
M&I Resources 2,243 6.5 0.05 14,690 115 30,410 42,710 19,780
Inferred Resources (3,5) 3,487 6.6 0.04 22,948 143 12,110 17,440 8,890
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, $14.50 silver, $0.90 lead, $1.15 zinc, unless otherwise stated.
(3) Mineral resources are based on $1,350 gold, $21 silver, $1.10 lead, $1.20 zinc and $3.00 copper, unless otherwise stated.
(4) Indicated resources reported at a minimum mining width of 5.9 feet (1.8 m) for Hugh Zone, Middle Vein,  North Vein, and  East Francine Vein and 4.9 feet (1.5 m) for Andrea Vein.
San Sebastian lead, zinc and copper grades are for 1,224,900 tons of indicated resource within the Middle Vein and the Hugh Zone of the Francine Vein.
(5) Inferred resources reported at a minimum mining width of 5.9 feet (1.8 m) for Hugh Zone, Middle Vein, North Vein, and East Francine Vein and 4.9 feet (1.5 m) for Andrea Vein.
San Sebastian lead, zinc and copper grades are for 702,600 tons of inferred resource within the Middle Vein and the Hugh Zone of the Francine Vein.

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.

2018 Reserves & Resources PDF


In 2004, mineralization was discovered approximately 150 meters (480 feet) below the previously mined portion of the Francine vein. This deeper zone, known as the Hugh Zone has not been mined and has a polymetallic (Ag-Au-Cu-Pb-Zn) resource of 488,030 tons containing approximately 3.4 million silver ounces, 12,500 gold ounces, 18,900 tons zinc, 14,538 tons of lead and 8,817 tons of copper of indicated resources and 1.2 million tons containing approximately 6.4 million ounces of silver ounces, 6,000 ounces gold, 31,900 tons zinc, 22,433 tons of lead and 18,790 tons of copper of inferred resource. Scoping work continues to optimize mining the Hugh Zone in conjunction with newly discovered resources in the district.

The newly discovered East Francine Vein is the faulted extension of the past-producing, high-grade Francine Vein. This vein has currently been traced for over 1,300 feet along strike and to 650 feet of depth and primarily consists of supergene and oxide mineralization. Drilling of systematic near-surface step-out holes to the southeast of the San Ricardo Fault was conducted during the first quarter. In-fill drilling of a shallow gap between the previous drilling and drilling on the periphery has expanded the area of near-surface, supergene enrichment. Recent deeper drilling east of the San Ricardo Fault has also intersected some strong mineralization that is in close proximity to the past underground workings of the San Sebastian mine. Drill intersections include 1.54 oz/ton gold and 288.6 oz/ton silver over 10.5 feet, 0.30 oz/ton gold and 17.3 oz/ton silver over 13.4 feet, and 0.56 oz/ton gold and 9.8 oz/ton silver over 5.2 feet.

The East Francine Vein has an inaugural silver equivalent indicated resource of 4.5 million ounces at an average grade of 0.22 oz/ton gold and 64.1 oz/ton silver and inferred resource of 2.6 million ounces at an average grade of 0.20 oz/ton gold and 18.5 oz/ton silver. All of this resource is within 100 meters of surface.

In 2012, re-examination of near mine exploration potential in the district led to the discovery of new mineralization within the Middle Vein, located approximately 250 meters north of the Francine Vein.

The Middle Vein has been traced for nearly 6,500 feet along strike and to a depth of over 1,000 feet. Recent drilling of the Middle Vein is defining a new zone of near-surface mineralization to the southeast of the San Ricardo Fault. Drill results in the first quarter include 0.29 oz/ton gold and 6.7 oz/ton silver over 8.9 feet, and 0.21 oz/ton gold and 7.6 oz/ton silver over 7.8 feet.

The Middle Vein has a new silver equivalent indicated resource of 13.9 million ounces at an average grade of 0.06 oz/ton gold and 13.1 oz/ton silver and inferred resource of 0.5 million ounces at an average grade of 0.01 oz/ton gold and 6.2 oz/ton silver, an increase of 13% in indicated material and a nearly 5-fold increase in inferred material over 12/31/13 levels. Most of this resource is within 250 meters of surface and portions of this may be suitable for open pit mining.

The North Vein has a mineralized trend that extends over 3,450 feet along strike and 650 feet to depth and remains open along strike in both directions and at depth. Recent intersections of the North Vein east of the San Ricardo Fault include 0.40 oz/ton gold and 4.2 oz/ton silver over 7.8 feet, 0.02 oz/ton gold and 18.3 oz/ton silver over 6.4 feet and 0.10 oz/ton gold and 18.4 oz/ton silver over 3.6 feet. The North Vein has an inaugural silver equivalent indicated resource of 4.9 million ounces at an average grade of 0.10 oz/ton gold and 4.5 oz/ton silver and inferred resource of 1.2 million ounces at an average grade of 0.09 oz/ton gold and 4.2 oz/ton silver. All of this resource is within 150 meters of surface.

The Andrea Vein is a silver and gold-rich resource located about six kilometers south of the East Francine Vein. Drilling in 2011-2012 at the Andrea Vein more than tripled the strike length of this structure to over 2.4 kilometers (1.5 miles) and defined two higher-grade gold and silver zones within this vein, including the shallower northwest zone and the deeper southeast zone. The gold dominant northwest zone outcrops at surface, is oxidized for the first 75 meters, and can be traced for 800 meters. The veins range from 0.5 to 4.5 meters in width with grades ranging from 0.5 to 4.5 grams per ton gold and 20.4 to 378.4 grams per ton silver. The Andrea Vein resource calculated in 2013 has 3.0 million tons containing 8.0 million ounces of silver and 158,000 ounces of gold of inferred resources.

Further out from the mine area, a program of Rotary Air Blast (RAB) drilling in conjunction with conventional trenching was executed in order to evaluate a large highly prospective soil covered area to the northwest and southeast of the mine area. RAB drilling has intersected precious metal-rich vein material within a mile along trend both to the northwest and southeast Middle Veins of the main veins. Several gold and silver anomalies were also generated from this program and a potential blind epithermal vein system was discovered under thick soil cover in this area. This area along with a number of other highly prospective exploration targets within Hecla’s large land package is still in the early stage evaluation.

Due to significant drilling success over the past four years, near-surface, high-grade zones of the East Francine, Middle and North veins are being open pit mined. In the fourth quarter, four drills were active, and with recent drilling success nearly six miles of mineralized strike length has been defined. New high-grade reserves have been defined in the West Middle Vein and preparations have begun on the development of underground mining. As San Sebastian moves toward underground mine production, exploration activities in the fourth quarter were focused on defining new underground mineable resources.

In 2018 at San Sebastian, the 156,733 tons processed at the mill contained 2.04 million ounces of silver and 14,979 ounces of gold.  Reserves are currently 2.8 million ounces of silver and 22,500 ounces of gold.  At the end of the year there was an ore stockpile containing 84,700 silver ounces and 1,800 ounces of gold.  The total underground reserves in the Middle Vein are 2.33 million ounces silver and 11,900 ounces gold and represent 83% and 53% of the silver and gold reserves, respectively. The total open pit reserves in the North Vein are 377,600 ounces silver and 8,800 ounces gold and represent 14% and 39% of the silver and gold reserves, respectively.

Due to significant definition drilling, the indicated resources increased from 2017 by 67% for silver to 14.7 million ounces, 11% for gold to 114,700 ounces, 110% for zinc to 42,710 tons, 96% for lead to 30,410 tons, and 119% for copper to 19,780 tons.  Indicated Resources are separated into ‘Oxide’ and ‘Polymetallic’ mineral styles; oxide is cyanide-amenable material and polymetallic is base-metal-sulfide-rich material amenable to a flotation milling process.  Polymetallic resources were defined and extended at depth on the Francine and Middle Veins during 2018.  Polymetallic mineralization has zinc, lead and copper and represents 54% of the silver and 17% of the Measured and indicated  gold resources.  The inferred resource increased from 2017 by 44% for silver to 22.9 million ounces and 50% for gold to 142,700 ounces due to new material being added along the Middle Vein and in the East Francine areas.  Lead, zinc and copper decreased by 62%, 64% and 11%, respectively, as a direct result of conversion of polymetallic mineralization in the Francine Vein from inferred to indicated.

Open pit mining continued in 2018 in the expanded North pit to the west and at depth and an additional smaller ‘satellite pit’ to the west and mining of this pit is expected to continue into 2020.  New high-grade, precious metal resources on the Professor and East Francine veins are being evaluated for underground mine design and scheduling. Possible conversion of polymetallic veins in the Francine Vein to reserves will be dependent on metallurgical testing of the bulk sample and stope optimizations. The material from the bulk sample will be used for metallurgical studies and a viability test at a nearby mill, where the processing of polymetallic sulfide ores from San Sebastian is planned.

During the fourth quarter of 2018, three core drill rigs and one reverse circulation (RC) drill operated at San Sebastian.  One underground drill rig completed in-fill drilling in the central and upper portions of the oxide zone along the Middle Vein.  Exploration drilling with two core rigs was directed toward shallower oxide mineralization along the West Francine, Esperanza veins and the recently discovered El Toro (South) Vein.  At the Middle Vein, in-fill drilling within the oxide zone intercepted vein intervals with similar grade and width to the previous exploration drilling results in this area.  Strong drill results include 66.9 oz/ton silver and 0.22 oz/ton gold over 5.8 feet, and 42.4 oz/ton silver and 0.11 oz/ton gold over 4.7 feet.  At the West Francine Vein, located about 1,000 feet west of any past drilling on the Francine Vein core drilling has extended this mineralization about 400 feet along strike and a recent drill hole at the eastern end returned 9.5 oz/ton silver 0.02 oz/ton gold over 1.4 feet.  Mineralization in this area is open laterally and at depth and follow-up, offset drilling is in progress.

The El Toro (South) Vein is located approximately halfway between the Andrea Vein resource area to the southeast and the Esperanza Vein to the northwest.  Based on its location and orientation, this vein may represent the link between these two known veins with a total prospective strike length of over eight miles.  Recent core drilling includes intersections of 9.8 oz/ton silver and 0.13 oz/ton gold over 11.8 feet,4.1 oz/ton silver and 0.13 oz/ton gold over 10.0 feet, and 6.0 oz/ton silver and 0.04 oz/ton gold over 5.4 feet. Exploration drilling  continues at the Esperanza Vein area, about a mile and a half west of the mine area.  This drilling has defined a wide vein up to 30 feet wide but initial assay results have been poor.  Drilling has shifted to the northwest where there are strong geochemistry anomalies along the trend of the vein.

Drilling will continue during the first quarter of 2019 to evaluate near-surface oxide mineralization at the West Francine Vein, El Toro (South) and Esperanza Vein areas. A grid pattern of vertical holes for sampling overburden and bedrock using an RC drill rig has begun to better define the geochemistry along the Esperanza to Andrea vein corridor.

Future Plans

Underground mining began in early 2018.

Hecla has entered into a toll milling agreement with Excellon Resources Inc. in which sulfide ore from San Sebastian would be trucked 26 miles to Excellon’s Miguel Auza flotation mill facility, in Zacatecas for processing. Excellon will provide 440 tons per day of milling capacity to Hecla and, in due course, the mill will be upgraded to include a copper flotation circuit. The mine will take a bulk sample in the fourth quarter of 2018 and if it is positive, mining sulfide ore could begin in 2019. San Sebastian sulfides have the potential for five years of mine life and considerable upside with the recent exploration discoveries.

125 Years of Mining (Spanish)