Hecla Mining to Raise Silver Resource Base by Roughly 29 Million Ounces on Discoveries

Metals miner Hecla Mining Co. on Monday said it expects to raise its silver resource base by roughly 29 million ounces this year due to discoveries at an Idaho mine and another in Mexico.

The company said it expects to add about 25 million ounces of silver to its resource trove at its Lucky Friday mine in northern Idaho, bringing the reserve and resource base there to 115 million ounces of silver, plus lead and zinc by products. Hecla plans to double the silver resource base of its San Sebastian property in central Mexico to 8 million ounces.

A "resource" means a property has fewer drill holes than what is necessary to classify the discovery as a "reserve" and represents a lower confidence level than the reserve base. The Securities and Exchange Commission requires mining companies to report resources and reserves according to that definition, according to a Hecla spokeswoman.

"The entire resource increase is located in North America and is largely a result of new exploration programs on existing properties, as opposed to an acquisition of existing resources," said President and Chief Executive Phillips S. Baker Jr.

Silver has enjoyed a rally in 2006, along with the broader commodities market. The price of silver on the New York Mercantile Exchange has risen about 39 percent since the start of the year. The metal fell 41.5 cents to $11.88 an ounce in morning trading on the Nymex.

Hecla said it calculated the increased resources using the below-market price of 8.00 per ounce of silver.

Hecla shares fell 53 cents, or 8.8 percent, to $5.50 in midday trading on the New York Stock Exchange. The stock has moved between $2.95 and $7.09 over the past year.