Profile: Hecla Mining Company (HL)

Hecla Mining Company, incorporated in 1891, is a provider of precious and base metals to the United States economy and worldwide. The Company acquires, develops, produces, and markets silver, gold, lead and zinc. Hecla Mining Company produces lead, zinc and bulk concentrates, which it sells to custom smelters, and unrefined gold bullion bars (dore), which may be sold as dore or further refined before sale to precious metals traders. During the year ended December 31, 2008, the Company was organized and managed into three segments, which represent its operating units and exploration interests: The Greens Creek unit; The Lucky Friday unit, and The San Sebastian unit and various exploration activities in Mexico. On July 8, 2008, the Company completed the sale of El Callao Gold Mining Company and Drake-Bering Holdings B.V., its wholly owned subsidiaries, which together owned its business and operations in Venezuela. On April 16, 2008, the Company completed the acquisition of the ownership interest of the two indirect Rio Tinto, PLC subsidiaries holding a 70.3% interest in the Greens Creek mine. On November 6, 2008, the Company acquired Independence Lead Mines Company.

The Greens Creek Unit

The Greens Creek unit is a 100% owned joint venture arrangement, through its subsidiaries Hecla Alaska LLC, Hecla Greens Creek Mining Company and Hecla Juneau Mining Company. Greens Creek is located on Admiralty Island, near Juneau, Alaska. The Greens Creek orebody contains silver, zinc, gold and lead, and lies adjacent to the Admiralty Island National Monument. The Greens Creek property includes 17 lode claims and one mill site claim, in addition to property leased from the United States Forest Service. Greens Creek also has title to mineral rights on 7,500 acres of federal land adjacent to the properties. The entire project is accessed by boat and served by 13 miles of road and consists of the mine, an ore concentrating mill, a tailings impoundment area, a ship-loading facility, camp facilities and a ferry dock.

The Greens Creek deposit is a polymetallic, stratiform and massive sulfide deposit. Greens Creek is an underground mine, which produces approximately 2,100 tons of ore per day. The primary mining methods are cut and fill and longhole stoping. The ore is processed on site at a mill, which produces lead, zinc and bulk concentrates, as well as dore containing silver and gold. The dore is sold to a precious metal refiner and on the open market, and the three concentrate products are sold to a number of smelters worldwide. Concentrates are shipped from a marine terminal located on Admiralty Island about nine miles from the mine site. During the year ended December 31, 2008, ore was processed at an average rate of approximately 2,008 tons per day. During 2008, mill recovery totaled approximately 73% silver, 87% zinc, 78% lead and 64% gold.

Lucky Friday Unit

The Lucky Friday unit located in northern Idaho. Lucky Friday is, through its subsidiaries Hecla Limited and Silver Hunter Mining Company, 100%-owned.Lucky Friday unit is a deep underground silver, lead and zinc mine located in the Coeur d’Alene Mining District in northern Idaho. Lucky Friday is one-quarter mile east of Mullan, Idaho, and is adjacent to United States Interstate 90. There are two ore-bearing structures mined at the Lucky Friday unit. The orebody is located in the Revett Formation, which provides host rocks for a number of orebodies in the Coeur d’Alene Mining District. The Lucky Friday vein strikes northeasterly and dips steeply to the south with an average width of six to seven feet. Its principal ore minerals are galena and tetrahedrite with minor amounts of sphalerite and chalcopyrite. The ore occurs as a single continuous orebody in and along the Lucky Friday vein. The major part of the orebody has extended from the 1,200-foot level to and below the 6,020-foot level.

The ore produced from Lucky Friday is processed in a conventional flotation mill, which produces both a silver-lead concentrate and a zinc concentrate. In 2008, ore was processed at an average rate of approximately 875 tons per day. During 2008, mill recovery totaled approximately 93% silver, 93% lead and 83% zinc. In 2008, all silver-lead and zinc concentrate production was shipped to Teck Cominco Limited’s smelter in Trail, British Columbia, Canada.

The San Sebastian Unit

The San Sebastian unit, located in the State of Durango, Mexico, has been 100% owned by the Company through its wholly owned subsidiary, Minera Hecla, S.A. de C.V. The processing plant is located near Velardena, Durango, Mexico. Its concession holdings cover approximately 308 square miles, including the Francine vein, the Don Sergio vein and multiple outlying active exploration areas. Several intermediate sulfidation epithermal veins occur within the Saladillo Valley and include the Francine, Profesor, Middle and North vein systems. The Don Sergio, Jessica, Andrea and Antonella veins located in the Cerro Pedernalillo area, about four miles from Francine, are end member low sulfidation epithermal veins hosted by the same formation with the addition of dioritic intrusive rocks.

The Rio Grande concession holdings cover approximately five square miles and several low- to intermediate-sulfidation epithermal vein systems, including the La Soledad, Arcangeles, El Leon, Sacramento, Concepcion and San Martin vein systems, in addition to multiple outlying active exploration areas. These veins are proximal to each other and are hosted within a series of shales with interbedded fine-grained sandstones interpreted to belong to the Cretaceous Caracol Formation. The Rio Grande vein systems strike north to northwest and dips to the west and southwest. The veins range in true thickness from more than 46-feet to less than 1.5 feet, and consist of several episodes of banded quartz, silica-healed breccias and minor amounts of calcite. These veins are partially oxidized to a depth of approximately 196 vertical feet and the wall rocks contain an alteration halo of less than 33 feet next to the vein. Mineralization within these veins consists of limonite, hematite, marcasite, pyrite, argentite, and pyrargyrite and trace amounts of chalcopyrite.