Wednesday 23rd October 2019

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Posts tagged ‘Hecla Mining Company (HL)’

Silver supply deficit fails to boost price, Silver Institute study finds

April 16th, 2018

by Greg Klein | April 16, 2018

Notwithstanding a decline in production, silver fell slightly in price and lost further ground to gold last year, according to the World Silver Survey 2018. Prepared by Thomson Reuters for the Silver Institute, the 28th annual study reported total supply of 991.6 million ounces in 2017, compared with physical demand of 1,017.6 million ounces. The 26-million-ounce deficit grew to 35.2 million ounces when ETP and exchange inventory increases were factored in.

Silver supply deficit fails to boost price, Silver Institute study finds

But at $17.05, the average price represented a 0.5% year-on-year drop. The metal ended the year at $16.87, having traded between $15.22 and $18.56 during 2017.

While recycling provided most of the remaining supply, the year’s global mine production came to 852.1 million ounces. That represented a 4.1% decline attributed largely to “supply disruptions in the Americas,” most notably Guatemala, where Tahoe Resources TSX:THO had its Escobal mining licence suspended, and the U.S., where a strike beginning in March 2017 forced Hecla Mining NYSE:HL to slash production at its Lucky Friday mine. Australia and Argentina also showed considerable declines.

Canada, ranking 14th for silver production, extracted 12.7 million ounces last year, compared with 13 million in 2016.

Meanwhile, gold has been leaving silver behind. Year-end prices for 2016 showed the yellow stuff selling for 71.4 times the price of its poorer cousin. The 2017 gold:silver ratio averaged 73.9:1, hitting 77:1 by year-end, “a high level that perhaps suggests that the market is trying to tell us something,” Thomson Reuters stated. “We suspect the high gold:silver ratio indicated that the market had been expecting another major crisis could be looming, or at the least that it was about time for equities correction, and therefore investors had been accumulating physical gold in the market.”

Another precious metal also paled in comparison with gold, which ended 2017 at an historical high of 1.4 times the price of platinum.

But investors looking at silver and platinum’s catch-up potential should consider “gold’s role as a safe haven and that some smart money has been hedging against geopolitical risks and potential correction in equities,” the study added.

At The Threshold

August 10th, 2011

Heatherdale Proves Up Alaska’s Niblack

By Ted Niles

With nearly all of Alaska’s forests now protected by federal law, its timber industry is in a state of extreme decline. The industry employed about 5,000 people in 1990. Now? Ten percent of that. So the opportunity presented by a company like Heatherdale Resources, with its Niblack copper-gold-zinc-silver project, located on Prince of Wales Island, has been of considerable interest to Alaskans. Heatherdale’s President and CEO Pat Smith reports, “In the last two weeks I’ve been around southeast Alaska, and I’ve talked to the Alaska Delegation, to the regulators, to Sealaska Native Corp and various other stakeholder groups. Everyone is extremely supportive of this project. It’s just unbelievable.”

Heatherdale—a Hunter Dickinson company—entered into a joint venture with Niblack Mineral Development on the Niblack project in 2009. Heatherdale is the project operator and has spent $10 million to earn its initial 51% of the property. “We have the ability to earn 60% by spending another $10 million on the initial $15 million,” Smith explains, “and we’re just reaching that threshold. That’ll be coming around the corner in August. We’ll have the option to increase that to 70% by bringing the project to feasibility.”

Heatherdale Proves Up Alaska's Niblack

The project is located at the southern end of the Alaska panhandle and comprises 2,600 hectares of patented land and state mineral claims. It consists of six deposits—Lookout, Trio, Mammoth, Dama, Lindsy and Niblack. Drilling has focused on Lookout and Trio. Based on drilling up to December 2010, the estimated resource for Lookout and Trio is 103 million pounds copper, 308,000 ounces gold, 207 million pounds zinc and 5.1 million ounces silver, all in the indicated category. The two deposits also contain 67 million pounds copper, 142,000 ounces gold, 126 million pounds zinc and 2.1 million ounces silver in inferred resources.

Smith remarks, “We’ve reached what we consider to be a threshold amount of mineralization at this point. It allows us to advance the engineering and economic evaluation at the deposit. We will move toward the Preliminary Economic Assessment this year. All things positive of course, we’ll take that into prefeasibility in 2012 and then move into feasibility and the initiation of project permitting in late 2012 or early 2013. That’s our objective.”

And Heatherdale will continue to build on the current resource throughout 2011. “We’ve got two rigs underground going full time,” Smith says. “One is focused on incrementally increasing the resource at Lookout and at Trio. The other drill rig is branching out and doing more exploration from underground.”

We’ve reached what we consider to be a threshold amount of mineralization at this point. It allows us to advance the engineering and economic evaluation at the deposit —Patrick Smith

July 28 Niblack project assays include 19.51 grams per tonne gold, 263 g/t silver, 1.67% copper and 3.32% zinc over 2.4 metres, 1.66 g/t gold, 31 g/t silver, 1.06% copper and 1.85% zinc over 13.7 metres (including 3.12 g/t gold, 57 g/t silver, 1.9% copper and 1.6% zinc over 5.8 metres) and 2.23 g/t gold, 40 g/t silver, 0.99% copper and 1.68% zinc over 2.4 metres. “We’ve come up with a nice zone around the Mammoth area,” Smith comments, “which is new to us and to the resource. The other area that really kind of surprised us (but this play is always surprising us) is the area between Lookout and Trio, which we didn’t connect before. We’re seeing a ballooning out, if you will, of the existing resource and a little bit of a different zone further into the hanging wall.”

Smith compares Niblack to Hecla Mining’s Greens Creek Mine near Juneau—which produced 7.5 million ounces of silver, 67,278 ounces gold, 70,379 tons zinc and 22,254 tons lead in 2009. As to when production might begin at Niblack, he acknowledges that in environmentally-sensitive Alaska, “The permitting end of it is the unknown in terms of a time frame. But we would anticipate 18 months to two years for that. So, optimistically, 2015 or so for production.”

Smith concludes, “I’ve spent probably 17 years of my 30-some years in Alaska with Rio Tinto, Kennecott Exploration and so forth. I enjoy working there. The jobs in southeast Alaska’s timber industry have been devastated over the last 10 years, so they understand the year-round jobs that come with mining at Greens Creek, and [Coeur d'Alene's] new Kensington Mine up near Juneau. We would have a large impact in the Ketchikan area and on Prince of Wales Island.”

Heatherdale has also begun drilling its Delta project in east-central Alaska, which it acquired in February. Delta has an inferred mineral resource estimate of 15.4 million tonnes grading 0.60% copper, 1.7% lead, 3.8% zinc, 62 g/t silver and 1.7 g/t gold.

Heatherdale has 69.1 million shares trading at $0.74 for a market cap of $51.1 million.

Shine On, Crescent Mine

January 20th, 2011

United Mining Group is Set for Silver Production in Idaho Next Year

By Ted Niles

Silver production in Idaho’s Silver Valley is about to resume. United Mining Group inked a milling deal January 11 with New Jersey Mining Company. “NJMC have an existing mill and the expertise,” President Greg Stewart explains, “but the milling capacity was smaller than what we needed. So we went to them and basically reached an agreement for a commitment where, in exchange for expanding the mill, we would get the milling capacity plus an ownership position in the mill.”

The $2.3-million expansion of milling capacity for UMG’s revitalized Crescent Mine will be extensive—enough to handle 360 tonnes of ore daily. Which means that this will be no mere boutique operation. This is entirely fitting, given the Silver Valley’s fabled past. Situated in the Coeur d’Alene Mountains—now a popular tourist destination—Valley mining goes back to the 1880s. It is the second-largest silver producer in history, with over a billion ounces. The Crescent Mine, which produced 25 million ounces, lies between two other, hugely prolific properties—the Sunshine and Bunker Hill Mines, which produced 489 million ounces combined.

United Mining Group is Set for Silver Production in Idaho Next Year

Director and geologist Larry Dick told in September, “The Crescent Mine has never undergone the exploration intensity that the other ones have… We’ve only scratched the surface of the amount of silver that is actually present.”

It is a common belief among geologists that as much remains of the resource in Silver Valley as has already been extracted. This hypothesis is being acted upon only now because of near-$30-an-ounce silver. Back in the 1990s, when the price fell to as low as $4, mining in the Valley became moribund. But this is a story as old as mining itself. “The whole industry,” President Greg Stewart told the Wall Street Journal December 26, “is like feast or famine.” To which he adds, “But we believe the silver market will remain strong for years to come.”

Other companies that agree include Hecla Mining, US Silver and, most important, billionaire Thomas Kaplan`s Silver Opportunity Partners, which last year bought the Sunshine Mine and its indicated and inferred silver resources of 31.2 million ounces and 231.5 ounces, respectively, for $24 million.

UMG began as Stewart Contracting, an environmental remediation company. So how did it come to play with the big boys by earning an 80% interest in Crescent from SNS Silver? Stewart explained to us in August, “Initially, SNS purchased the Crescent Mine, and they hired us to do rehab on the existing buildings there. Then we started work on underground rehabilitation. SNS spent around $12 million drilling out a reserve. That money had already been spent, so that was money we wouldn’t need to spend to find the reserve.”

We’ve only scratched the surface of the amount of silver that is actually present – Larry Dick

Crescent’s reserve is a NI 43-101 resource estimate of 6.1 million ounces of silver indicated, consisting of 324,000 tons grading 18.7 ounces per ton, and 4.1 million ounces inferred, consisting of 211,000 tons grading 19.5 ounces per ton.

That resource will likely grow. UMG announced December 14 the purchase of 236 hectares contiguous with its land holdings at Crescent—increasing them by roughly 265%—providing the company with considerable future exploration potential. It also closed an $8-million private placement January 7.

Meanwhile, work continues on the mine itself. “We’re putting a new decline into the ore body,” Stewart reports, referring to the Countess Portal. “We’re also doing rehab in the lower sections of the mine, with the eventual goal of connecting those two parts and establishing our secondary escape and access. We’re getting ready to start doing the tie-in between the two points.” And UMG is doing the preparatory work for bulk sampling, which Stewart says “should begin sometime early this year.”

What else does UMG have in store for 2011? According to Stewart, “Our plan is just to continue to develop the project’s infrastructure. Get everything ready. Our goal is to get into production for first quarter 2012.”