Hecla to resume full silver output in Idaho after three-year strike

Pittsburgh — Hecla Mining anticipates a ramp-up to full production levels at its Lucky Friday silver mine in Idaho as United Steelworkers union members are expected to return to work after the ratification of a collective bargaining agreement ended a nearly three-year strike, the company said Tuesday.

The ratification of the labor deal reverses a vote held in December in which union workers opted not to ratify a tentative agreement reached by USW and Hecla negotiating committees. At the time, Hecla CEO Phillips Baker said the company would accelerate the hiring of contractors to reach full production by the end of 2020.

"We are pleased that the union has ratified the collective bargaining agreement at Lucky Friday and are expected to return to work," Baker said in a statement Tuesday. "While this has been a challenging time for the mine and the local community, we believe the return of the workforce will help it reach full production by year-end 2020 and help the Silver Valley community."

STRIKE STARTED IN 2017

Nearly 200 union workers at Lucky Friday went on strike in March 2017 amid accusations of unfair labor practices.

Lucky Friday silver production fell 77% to 838,657 oz in 2017 compared with 2016 output. Silver output at the mine again dropped 80% year on year to 169,040 oz in 2018 as limited production was carried out by a smaller salaried staff.

Annual silver production at Lucky Friday rose to 625,432 oz in 2019 as Hecla employed contractors at the mine. This total was down drastically from a 2016 production total of 3.6 million oz before the strike.

Hecla anticipates restaffing at the silver-lead-zinc mine to take place in stages, with a ramp-up to full production by the end of 2020.

RECORD HECLA GOLD PRODUCTION

Hecla said Tuesday its 2019 silver production rose 22% year on year, while gold output increased 4% in the same comparison, marking the highest annual gold production in the company's history.

Hecla produced 12.6 million oz of silver in 2019, up from a 10.4 million oz silver output in 2018, according to the statement. Fourth-quarter silver output rose 25% year on year to 3.4 million oz. The company's 2019 gold output reached 272,873 oz, up from 262,103 in 2018, and its Q4 gold production increased to 74,773 oz, a 5% increase from Q4 2018.

The Idaho-based miner's production was largely supported by increases at its Greens Creek mine in southeast Alaska, where 2019 annual silver output surged 24% and annual gold output increased 10% compared with last year's production.

"2019 marked a year of higher metal production and in the second half of the year, strong cash flow generation and an improved balance sheet," Baker said. "While gold and silver prices have increased, Greens Creek's record silver production combined with the most gold production in Hecla's history were the primary reasons for the cash flow strength."

Hecla's 2019 lead production increased 20% to 24,184 mt and zinc output fell 5% to 58,860 mt, compared with 2018 output.

In its 2019 third-quarter results, the company reported a net loss of $91.6 million in the nine-month period ending September 30.