Hecla Mining Anticipates Silver Output Surge with Decline in Gold Production for 2024
Hecla Mining has set the stage for a significant uptick in silver production, projecting outputs between 16.5 million and 17.5 million ounces, driven by heightened activities at its Keno Hill site. This forecast underscores the company's strategic focus on silver, even as it anticipates a dip in gold production for the coming year.
A detailed analysis of the Keno Hill site reveals an 11-year reserve mine life, with an anticipated life of mine silver production totaling 53 million ounces, at an impressive average grade of 26.6 ounces per ton. The site is expected to hit a five-year average silver production of 4.4 million ounces, with throughput projected to escalate to 600 tonnes per day by 2028. The financial outlook for Keno Hill is robust, with an after-tax NPV (5%) estimated at $305 million, based on a silver price assumption of $22 per ounce.
In 2024, Keno Hill is on track to produce between 2.7 million and 3.0 million ounces of silver as it gears up production levels. Quarterly production costs, excluding depreciation, are forecasted to be between $15 million and $17 million. Hecla Mining plans to release guidance on cash costs and AISC per silver ounce, accounting for by-product credits, once Keno Hill achieves commercial production status within the year.
The company's consolidated silver production is poised for a growth spurt to 16.5-17.5 million ounces in 2024, with expectations to surge by 30% to 18.0-20.0 million ounces by 2026. However, the Greens Creek site is anticipated to see a reduction in silver production in 2024 due to lower mined grades, a result of mine sequencing. This adjustment is also expected to impact gold output negatively while increasing zinc production. Lucky Friday's silver production is estimated at 5.0-5.3 million ounces, with full production ramp-up completion expected in the first quarter. Keno Hill's contribution to silver production is forecasted at 2.7-3.0 million ounces as it increases production throughout the year.
Conversely, Hecla Mining's consolidated gold production is projected to fall to 121-133 thousand ounces in 2024, mainly attributed to the transition of Casa Berardi to a surface-only operation.
