Greens Creek helps generate $41M cash flow for Hecla
Production at the country’s largest silver mine was down to start the year despite strong metal prices due to processing lower-grade ore, according the mine’s owner.
Idaho-based Hecla Mining Co., which owns the underground Greens Creek mine near Juneau, reported silver production of approximately 2.55 million ounces in the second quarter July 13. That was a decrease of 7 percent from a year ago.
Silver production at Greens Creek is similarly down 7 percent for the first half of the year at 5.14 million ounces, compared to 5.53 million ounces in 2020. In its report, the company attributed the decline to “lower grades resulting from mine sequencing.”
Hecla leaders earlier this year estimated total silver production of 9.5 million to 10.2 million ounces from Greens Creek in 2021. Even with the recent decline, silver output in the first half of the year from the Admiralty Island mine was still far better than comparable 2019 levels when the company produced approximately 4.6 million ounces of silver, which was an 18 percent increase over 2018, according to company records.
Secondary gold production at Greens Creek was down 2 percent in the second quarter at 12,859 ounces, but is up 3 percent for the year overall at 26,125 ounces, Hecla reported.
CEO Phil Baker said the “solid” and relatively steady silver production from what is by far the largest of the company’s five operating mines, helped Hecla generate $41 million in cash overall for the quarter, marking its fifth consecutive quarter of increasing cash reserves and said the company’s collective response to COVID-19 should help sustain the momentum.
“With the company’s U.S. vaccination rate higher than the U.S. average, including Greens Creek at a nearly 90 percent vaccination rate, and Casa Berardi (Quebec) increasing, we expect to build on these results,” Baker said in a formal statement.
After bottoming out at around $12 per ounce during the global onset of the pandemic, silver prices have rebounded to as high as $28 per ounce of late and are currently in the $26 per ounce range. Gold has recently sold in the $1,800 per ounce range after peaking at more than $2,000 per ounce roughly a year ago.
The U.S. Forest Service is also in the midst of a supplemental environmental impact statement review of Hecla’s plan to expand the tailings disposal facility at Greens Creek by about 14 acres, or 20 percent. Hecla expects the current 66-acre facility will likely be filled by about 2031, at which point the mine would have to be closed. The company submitted the plan last October.
On the exploration side of the industry, remote camps are active this summer across the state after the disrupted 2020 work season.
There are four drill rigs working at the Donlin gold site near the Kuskokwim River in Western Alaska and they are expected to drill 64 holes totaling approximately 20,100 meters this summer, according to Donlin’s co-owner Vancouver-based NovaGold. The drilling at the well-advanced prospect is aimed at further testing the continuity of the ore body and the structure of the mineralization, according to the company.
HighGold Mining Inc. is also adding to the drilling work this summer at its early-stage Johnson Tract gold prospect on the west side of Cook Inlet. According to a statement from HighGold, the company was able to raise enough money in its most recent stock sale for leaders to consider adding 4,000 meters of drilling to the initially planned 16,000-meter, $10 million program.
Back in Southeast Alaska, Constantine Resources is working towards drilling 6,000 meters of exploratory boreholes at its multi-metal Palmer project near Haines. The nearly $9 million work program is being funded by Tokyo-based Dowa Metals and Mining, which purchased up to 56 percent of the project through the funding arrangement, according to Constantine.
A small summer program is also ongoing at the Pebble camp in Southwest Alaska, where a crew of nine is continuing baseline environmental studies and data collection for engineering as well as demobilization of unneeded facilities, according to Pebble Partnership spokesman Mike Heatwole.
Pebble is currently appealing the Army Corps of Engineers Alaska District denial of its Clean Water Act wetlands fill permit last November.
Elwood Brehmer can be reached at [email protected].