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Phillips S. Baker
President and CEO
Hecla Mining

20 September 2022

What is the role that the silver industry is playing as part of the energy transition and the vision you have for Hecla in the present context?

Silver is absolutely crucial for the green transition. Solar energy is a foundational renewable source, and a technology of which silver is the key component. The positive shift in demand has been mirrored in our production, which has risen by 30% since 2018 and I am expecting a further 30-50% growth over the next five years. Despite being the oldest, Hecla is also the fastest growing silver producer in North America, and we are proud to witness this age in which our metal is helping drive a critical industry forward. 

Solar has surpassed the 1 TW mark in 2022, how is this mirrored in your operations, adjacent to your other industries?

The silver market has also reached a milestone, surpassing the 1 billion ounce mark, and to put that into perspective, around 12% goes into PV panels. And try as they might, the industry cannot find a substitute for silver, there is simply nothing else that matches the efficiency or the lifespan.

 

The US Department of Energy estimates that the solar market will be almost 50% of renewable electricity generation by 2050 and based on this projection, photovoltaics will need roughly half a billion ounces of silver per year by 2050, which will be tough to satisfy from the mining side.

 

The good news is that we have plenty of silver stock above ground in the form of bars, coins and other materials, and silver is recyclable, though of course this will drive the price significantly up. 

Congratulations on the recent Alexco acquisition - how will this, coupled with the planned production start at Keno Hill in 2023 complement your current footprint?

We literally just signed on Alexco earlier today, which is a huge milestone, especially as we had been looking at this asset since 2007. The acquisition allows us to fully capitalize the property, who were bootstrapping in an effort to start production this very year but struggling to get there financially. Our plan is to invest for roughly a year to transform the mine into a consistent producer of silver, outputting anywhere between 3-5 million ounces per year and making it the largest silver mine in Canada. This means that Hecla, which now produces 40% of the US’ silver, will take up the same market share in Canada as well. Looking at the rest of the world, 50% of global silver comes out of Mexico, Peru, and China, which do not benefit from the same socio-political stability of North America. 

How are you handling challenges surrounding skilled labor shortages?

We just celebrated a family that has had one member employed with us consistently for the past 100 years. This is one individual case that exemplifies a pattern of generational employment throughout the company. I mean, we certainly have to compete for skilled talent, it is not easy to come by, however we foster a loyal culture and are lucky to have mines located in favorable locations where people like to live. Occasionally we also fly people in when we need the extra hand. 

Have you noticed a palpable change in investor perception and demand regarding ESG in recent years and what is Hecla’s own stance?

One thing we saw for certain is the dawning realization of the importance of metals when it comes to ESG and the overall transition, from silver and copper to all the metals used in the production of batteries. Investors realized that this is a historic time, rivaled only by the rise of photography in the 1990’s when Kodak’s Brownie camera (which used silver for the film) changed the world. A third of all silver demand in 1999 was from the photo industry. Since then, the digital era called for silver thanks to its ability to transfer electrons as the world’s most conductive metal. All modern devices we use contain at least a small amount of silver. And now we have renewable energy, which is a game changer for the silver business, and just getting started.

As far as our own footprint is concerned, at Hecla we generated 77,000 of carbon emissions in 2021 which we offset, so we are in fact carbon neutral in scope 1 and 2 emissions. The amount of tons that we move in a year is less than one gold or other mining companies move in a day. 

What are the core milestones you wish Hecla Mining to reach over the course of the next five years?

The plan is to fully integrate Alexco, but also continue improving our ongoing operations, slightly increasing production in some of our mines. Likewise, we have developed a new mining method called Underhand Closed Bench (UCB) for our oldest, 80 year old mine called Lucky Friday, which we are in the process of patenting. It makes mining safer, as well as 50% more productive, from 800 to 1,200 tons a day. It is an extremely exciting time for us, and we are at the ready to support the energy transition. 

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