Hecla's main accomplishment for years has been surviving in north Idaho's mineral-rich Silver Valley.
Hecla Mining Chief Executive Phil Baker concedes that it’s not hard for a company to do well when the price for its major product — silver, in Hecla’s case — has jumped more than 29 percent since the beginning of 2007.
But to really stand above the competition, Baker said, you have to do more than gratefully accept high market prices.
“The thing about Hecla, and it’s a factor of having been around for 100 years, is the quality of the assets that we have,” he said. “We have high-quality ore bodies, which are operated by people who are experts. That enabled us to survive some hard times, and now it’s enabling us to outperform in the good times.”
For years, surviving was Hecla’s main accomplishment. Long associated with north Idaho’s mineral-rich Silver Valley, Hecla and other silver miners were sent into a deep tailspin by the collapse of the silver bubble in the early 1980s; heavy costs for cleaning up decades of environmental damage in the valley sent more than one operator into bankruptcy.
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By the late 1990s, Hecla’s only profit center was its industrial-minerals business, which mined clay and kaolin for porcelain and other ceramics. Hecla had to sell that business to survive, spokeswoman Vicki Veltkamp recalled.
“We chose to remain a precious-metals company,” she said, “because we had faith that metal prices were going to turn around.”
Gold was the first metal to do so, starting in 2002, and because Hecla had picked up a company whose properties included a Venezuelan gold mine, it was able to take advantage of the renewed demand for gold. The original site was mined out a few years ago, but a nearby site produced 87,490 ounces of gold last year.
However, Hecla has shifted much of its attention back to silver, demand for which has soared for use in consumer electronics and other industrial processes. Between them, Hecla’s two biggest mines — the Lucky Friday in Idaho and the Greens Creek in Alaska — produced 5.6 million ounces of silver last year, along with 26.6 million tons of zinc and 24.5 million tons of lead.
The nature of the mining business is to always be looking for new places to dig, and Hecla is using its newfound prosperity to solidify and expand its portfolio of properties. Earlier this year, Hecla closed a deal for the 70.3 percent of the Greens Creek mine it didn’t already own; a pending deal will give it ownership of a mine adjacent to the Lucky Friday. Hecla also is exploring property it owns in Mexico, and has a deal for a joint venture for a silver property in Colorado.
In February 2007, Hecla opened up what it calls a second head office in Vancouver, B.C., to bring the company closer to the junior mining companies that do much of the initial work of identifying promising mining properties.
Scores of juniors have offices in the Lower Mainland, Baker said: “You can’t walk down the street without seeing a colleague — or a competitor, however you choose to look at it.”