Hecla taking “step back” in Nevada operations

Hecla taking “step back” in Nevada operations

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Hecla Mining Co. is “fully committed to Nevada but what we thought we could do, we are not able to do, so we are taking a step back, and we’re making sure we’ve thought through how to proceed with Nevada,” said Phillips Baker, president and chief executive officer.

He was speaking during the company’s earnings call in August, stating that “nothing has changed in terms of our value there,” and the company is still committed to Nevada. “The reserves, resources, the exploration potential is going to still be there.”

The company is focusing in Nevada on its Fire Creek underground mine near Crescent Valley, after suspending production at the Hollister Mine in Elko County and laying off 56 miners in June. Also, mining at the Midas Mine in Elko County only goes through the end of the current quarter, Hecla stated in the second-quarter earnings report.

The step back is until Hecla improves its finances after experiencing high costs in Nevada.

The “total headcount is 163 in Nevada right now,” Lawrence Radford, who was chief operating officer and senior vice president but is becoming chief technical officer, said in the second-quarter earnings call. “There’s a handful of miners at Midas doing some remnant mining there, but nearly all of the effort is at Fire Creek now.”

He said there have been a few temporary employees also brought into Fire Creek, because of efforts there and because of attrition.

The company said in its earnings slide show that the 25 percent reduction in its Nevada workforce announced earlier is completed.

Hecla also is seeing higher water discharge at Fire Creek, so work is underway to increase discharge permits and non-consumptive use water rights that will be needed when the mine expands to the north and south, according to the company.

Coeur d’Alene, Idaho-based Hecla at the same time is looking for toll milling possibilities for certain ores from Fire Creek and is interested in doing toll milling at Hecla’s Midas operations in northern Elko County for other companies. Inquiries also have been made for Hecla to do toll milling at its Aurora mill in Mineral County, the CEO said.

Baker said in the earnings call that “with Nevada mines not working the way we hoped, we’re reducing expenses companywide.”

Meanwhile, Hecla is still optimistic about exploration potential at the Hatter-Graben target at Hollister, where surface exploration is replacing an underground drift to explore the deposit. Dean McDonald, retiring senior vice president of exploration, said in the earnings call that surface drilling at Hatter-Graben is about to start.

In Hecla’s second-quarter earnings report, the company reported that the gross loss in Nevada was $20.2 million in the second quarter.

Hecla acquired Fire Creek, Hollister, Midas and Aurora from Klondex Mines Ltd. in July 2018.


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