Hecla Mining Company is a U.S.-based mining company primarily engaged in the discovery, acquisition, development, and production of precious and base metals, including silver, gold, lead, and zinc.
In spite of silver’s solid industrial fundamentals, its price has not mirrored gold’s recent surge. When will that change?
Well, in terms of market economics, silver has been in deficit for three years and we expect that to continue. The demand for silver in technology and industrial applications, most notably solar, is growing, and new technologies are looking to use more and more silver. This growing demand, coupled with supply not keeping pace, will likely cause silver prices to rise in the future. While I cannot predict exactly when this will happen, I believe this increased demand will eventually lead to silver outpacing gold in terms of the gold-silver ratio.
We see the next three to five years as a great time for silver due to the expanding deficit. Primary silver is becoming harder to find globally, and the development of new sources is challenging due to lengthy permitting processes and other regulatory hurdles. As demand continues to grow faster than supply, we expect the market dynamics to favor a rise in silver prices.
Hecla Mining currently produces about 45% of US silver and aims for similar market presence in Canada with the company’s new Keno Hill mine. Could you tell us more about that mine and its timelines?
Our Keno Hill property is located in a historic silver district in Canada, known for some of the highest silver grades in the country. We acquired the property in 2022 and have been ramping up production while addressing safety and environmental issues to ensure long-term consistent performance. Our recent production report shows that the mine performed better in the second quarter than in the first, and we hope this trend continues.
Our focus has been on establishing the right safety and environmental practices at Keno Hill, and building a deeper relationship with the First Nation of Na-Cho Nyäk Dun, the First Nations group on whose traditional territory the mine partly sits. While I cannot provide an exact timeline for reaching full production, we are steadily working towards this goal, knowing that our current investments will support consistent future operations.
What were the setbacks that you faced at Keno Hill? How did you overcome them?
There have been incidents related to water management and ground stability at Keno Hill. The previous owner often faced cash constraints, preventing necessary infrastructure investments. We are now addressing these issues, focusing particularly on water treatment and ensuring ground stability to create a sustainable operation.
We are committed to stopping past issues and ensuring our environmental management systems are fully in place. Our goal is to operate in compliance with all laws and standards, as well as Hecla's own high standards, to maintain our commitment to environmental sustainability.
Could you briefly tell us about your other operating mines?
We have three other operating mines. Our flagship mine is on Admiralty Island in Alaska, a national monument with more bears than people. It has a small environmental footprint and is the world's 11th largest silver mine with significant reserves of 105 million ounces. The mine produces significant cash flow, with 88% of its power coming from 100% hydroelectric grid, making it a model of sustainable operation.
Then there is Lucky Friday, our oldest mine, operating for 80 years in Idaho's Silver Valley, where Hecla started 133 years ago. We have extended its life and increased production through innovative mining techniques like the underhand closed bench method, a patented mining method which enhances miner safety by managing seismicity. Lastly, our gold mine in Quebec, Canada, Casa Berardi, adds scale and diversity. It is transitioning from underground to an open pit, which requires significant investment to ensure a long-term future.
Hecla is also the third largest producer of lead and zinc in the US. How do you manage such diversity of assets? Do you engage in streaming agreements?
We do not currently have any streaming agreements and have not needed that source of financing in the past. We produce concentrate that includes lead, zinc, gold, and silver, managing production based on customer demand, but we prioritize silver production.
In the past, Hecla Mining has expressed interest in expanding to Latin America. Is this an ongoing plan?
The change in leadership that occurred this year has allowed us to reset and rethink our strategy. One of Hecla's strengths is our mines are in the safe jurisdictions of the US and Canada, which is a significant competitive advantage. Because it is getting harder to expand our reserves in these jurisdictions due to scarcity and our large existing production, we might consider looking farther afield in the future.
For now, we are focusing on maximizing the potential of our US and Canadian assets, investing in their development for long-term sustainability. While we will not rule out future expansion beyond these jurisdictions, our current focus is on our existing operations to ensure we get the most out of them.
Having taken over the company very recently, what is the number one challenge that you hope to resolve?
The biggest challenge for Hecla, and indeed for the entire industry, is staffing. We have an aging workforce of skilled workers, from underground miners to executives, who are retiring, and finding young people to take their place is quite challenging. This issue is widespread across the industry, not just at Hecla.
To address this, we need to connect with young people interested in the energy transition and renewable energy. They need to understand that mining is integral to these fields. We have numerous programs with universities in the United States that offer mining education, scholarships, and mentorship opportunities. I teach a class at the University of Denver College of Law on negotiating natural resource agreements, and it is evident that many students interested in environmental and renewable energy law also need to understand mining law and water law.
This is the decade of mining, as it is crucial for the energy transition. Governments, civil society, and the environmental community recognize that mining is necessary and can be done responsibly and sustainably.
What are your key priorities as an interim CEO for Hecla for the next couple of years?
Hecla has been around for 133 years, and this is not the first leadership transition we have experienced. My goal during this interim period is to provide a chance for us to reflect, reset, and think about our direction. I am not planning any major changes because the next CEO will have their own strategy, but this period allows us to refine our current practices and enhance efficiency.
We aim to develop deeper relationships with indigenous communities and our workforce, ensuring everyone feels heard. I have encouraged open communication, inviting anyone to share their thoughts and ideas with me. This approach has been well-received.
