Hecla Mining Co., of Coeur dAlene, boosted its gold production by a third last year and significantly lowered its cash costs of producing both gold and silver.


The company, which has operating mines in the U.S., Mexico, and Venezuela, also says that it now has more excellent exploration prospects than (at) any time in its recent history.


Heclas situation bodes well for our companys future, even if metals prices remain depressed, CEO Arthur Brown said in a recent report on the companys 2001 production and current reserves. Any upturn in the precious metals price will be an additional bonus, he said.


Hecla produced nearly 195,000 troy ounces of gold in 2001, a 33 percent increase over the previous year. Much of that gold came from the companys La Camorra gold mine, in Venezuela, which increased gold production by 64 percent last year compared with 2000.


Companywide, Heclas average total cash cost of producing gold fell 37 percent, to $133 an ounce, which the company says is a very low average in the industry. Production costs are expected to rise this year to about $150 per ounce, based on Heclas expectation that the ore it processes this year will be of slightly lower grade.


Meanwhile, Heclas silver production fell 7 percent last year, to 7.4 million troy ounces, due mostly to cutbacks in production at its Lucky Friday mine, in Mullan, Idaho, Hecla says in the report. The Lucky Friday now operates at about one-third of its previous production levels and is expected to produce about 1.5 million ounces of silver this year. Companywide, Heclas cash cost to produce silver was $3.52 per ounce last year, down 50 cents from the previous year.


Hecla estimates that its operating mines hold more than 1 million ounces of gold and gold-equivalent reserves, and 88 million ounces of silver reserves. Its proven and probable gold reserves grew 5 percent last year. Proven and probable silver reserves now include 8.6 million ounces from one vein at the San Sebastian mine in central Mexico that werent included in reserves a year ago. Silver reserves at Heclas Lucky Friday and Greens Creek mines, however, were lowered at the end of the year because prevailing low silver prices make it uneconomic to recover some of the metal.


There is good potential to increase these resources in 2002 through Heclas planned exploration program, the company says in its report.


Exploration expenses should total between $4 million and $5 million this year, compared with $2.2 million in 2001, the report says.


Also recently, the company posted a fourth-quarter 2001 net loss of $3.2 million, or 4 cents a share, compared with a net loss of $56.3 million, or 84 cents a share, in the year-earlier quarter. For all of 2001, Hecla reported net income of $2.3 million, or 3 cents a share, compared with a net loss of $84 million, or $1.26 a share, in 2000.