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Gold/Mining/Energy : Hecla Mining(HL)

HL 21.55

-6.8%

12:36 PM EST

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To: saul mikaliukas who wrote (56)	5/10/1997 1:48:00 AM
From: John Swallow	of 629

Hecla followers, Here is recap of my notes from the shareholders meeting. Suffice it to say, I was the only one there in shorts. The overall feeling was one of relief over putting the write downs past them and winning the lawsuit with the Star Phoenix (20 mil.lawsuit). Hecla had to put up a $10 million bond that was released this week. There was also a general feeling of optimism about their prospects, cash costs coming down and production increasing (I took it as a "we've finally turned the corner" optimism). They talked about their past and recent losses to open up with; of which the write offs from closing down non-productive mines and reclamation were a major part as well as additional costs getting Grouse Creek, Rosebud and Lucky Friday expanded/producing. The following in no particular order; my note taking skills have lapsed somewhat. - They expect to produce 6 million oz. Silver in 97 and 150k oz. Gold in 97. At the Board meeting prior to the meeting they approved $16 million over the next 2 years for expansion of the Gold Hunter (Lucky Friday area). The Gold Hunter produced 2 million oz. Silver in 96. They drilled 60 holes on the property from the 4900' level and all of the holes had mineable ore. The main vein showed 17 oz/ton which is twice the grade previously received from the Lucky Friday. There was part that graded 46 oz/ton. The new ore zone is twice the thickness of the current ore zone at the Lucky Friday and higher grade. It is expected to be full production in 98 (Gold Hunter). - The Rosebud (gold) has a cost of $180/oz with the average .4oz/ton. A recent intercept was 80'@ .17oz/ton with 10'@ .95oz/ton. The Rosebud started further production in April. (I didn't take much notes on the gold portion). - Greens Creek in Alaska has a $2/oz cost and is expected to produce 3.5 million oz. The proven reserves are 51.8 million oz. Silver and also gold (couldn't read my writing). It is expected to have a 17 year mine life not counting the new land they just added surrounding the new discoveries in the area. An interesting part that I had not realized before was in the area of Industrial Minerals (fertilizer,etc.). It is estimated to be worth $100 million to the company (Approx. $2/share). That is the part that made me start to pay more attention to the company. Their main focus for exploration is going to be Mexico and they said that they are currently drilling on a number of Mexican sites. They were asked why their costs in the U.S. look almost as cheap as the Mexican costs and explained that in the U.S. the productivity per shift is greater and the ore bodies are higher grade. Anyway, that is it. Most of this is probably redundant. I had started to look at Hecla again and wanted to find out if they had learned a lesson from the previous write offs and high cost mine closings and I am convinced they have; at least as much as you can learn from a meeting. But from what I hear around here, the Gold Hunter ore body is larger and richer than they are letting on. Probably because they haven't tied up all of adjacent property yet. Sorry this is so long. Good Luck. John S.

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