Greens Creek silver output up; Constantine investigates gold
The owners of a Southeast silver mine again reported production growth last spring despite the pandemic and an explorer in the region believes it is honing in on the source of historic placer gold deposits.
Hecla Mining Co. produced 381,000 more ounces of silver at the Greens Creek underground mine near Juneau in the second quarter from a year ago — a 17 percent increase to 2.7 million ounces. For the year, silver production at Greens Creek is up more than 920,000 ounces, or nearly 20 percent, from the first half of 2019 to 5.5 million ounces total, according to the company’s quarterly earnings and operational report.
Gold production at Greens Creek was down 8 percent, however, to 25,300 ounces in the first half of the year.
The improved production at Greens Creek helped Idaho-based Hecla increase its overall sales revenue by 24 percent to $166.4 million in the second quarter. Hecla’s Alaska mine accounted for 51 percent of the company’s revenue in the quarter. The company also has precious metal mines in the Lower 48, Canada and Mexico.
While Hecla still absorbed a net loss of $14 million despite the production growth, CEO Phillips Baker emphasized that the company produces roughly a third of all the silver mined in the U.S. and the second quarter production totals were the best since 2016.
“I am extremely proud of our workforce’s adaptability and commitment in this challenging time, which positions Hecla well to improve cash flow generation in this higher silver and gold price environment,” Baker said.
Hecla generated $27 million in free cash flow during the quarter.
The company has leased a hotel in Juneau where incoming workers are quarantined for seven days before traveling to the Admiralty Island mine for three weeks of work, according to a monthly investor presentation.
With the long-term upward trajectory of production at Greens Creek — Hecla has increased annual ore throughput at the mine 15 percent since purchasing it in 2008 — the company also increased silver reserves by 22 percent at the property last year and expects to operate Greens Creek with strong production into the 2030s, according to the presentation.
To the north of Greens Creek on the mainland, Constantine Metals reported Aug. 13 that the company had identified prospects with “high-grade gold sampling results” at its Porcupine Creek property north of Haines.
The prospects, dubbed Golden Eagle and McKinley Creek Falls, are located up a valley from historical placer operations. Historical mineral sampling by the U.S. Bureau of Mines produced samples with mineralization of up to 531 grams per ton of gold, according to Constantine.
Company President Garfield MacVeigh said the high-grade occurrences have received little investigation for their potential, particularly given geological similarities with other known gold deposits in the region.
“We look forward to evaluating these previously untested areas of prospective high-grade mineralization,” MacVeigh said.
Earlier this year Constantine scaled back the summer exploration program at its nearby Palmer copper prospect from initial plans to limit the risk of spreading COVID-19. The McKinley Creek area, which is 100 percent owned by Constantine, is about five miles east of the much more advanced Palmer deposit.
The company spun off the rest of its gold-focused program into HighGold Mining Inc. last year. HighGold is conducting 15,000-meter drilling program at the Johnson Tract prospect within Lake Clark National Park and Preserve.
Elwood Brehmer can be reached at [email protected].