Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
US-based silver miner Hecla Mining (NYSE:HL) says 2011 production remains within the company’s estimates, and it expects to produce nine million ounces of silver despite a spate of mining accidents.
Two miners have died in separate incidents. In November two contractors were buried in rubble trying to dislodge a jammed rock bin. One was hospitalized and released while the other, 26-year-old Brandon Lloyd Gray, passed away. This month seven miners were pulled from Hecla Mining’s Lucky Friday mine after a collapse.
Hecla, which released a production update on Wednesday, will not repair the area where the rock burst occurred. Instead, Hecla is planning a 750-foot bypass creating a new haulage way, “. . . which will be a significant distance from where the rock burst occurred and in a previously mined area reducing the risk of future rock bursts,” said the company in a statement.
The work will shut down the mine for two months. The work is expected to be completed on February 2012.
Despite the shutdown, Hecla expects silver production in 2012 to increase to more than 9.5 million ounces.
Hecla’s stock was off 3.72% on Thursday morning to $5.43 a share.
“While 2011 has been a difficult year for Hecla and the Lucky Friday, the previous 25 years at the Lucky Friday have been characterized by an extraordinary safety record,” said Phil Baker, Hecla’s President and Chief Executive Officer.
“Looking forward, our goal, which we will relentlessly pursue, is to reestablish the same safety and operating performance decades into the future. I am happy to report that everyone who was injured on December 14 has been released from the hospital and is on the road to recovery.”
