Keno:Full / commercial production within two quarters* " We expect to be here for decades to come."
* " ....277 tons per day, and this is all from the Birmingham deposit, about 30% more than last quarter "
* "....we're confident we're going to hit our production numbers, reach commercial and full production, probably before year-end "
* " There's also other drilling targets outside of Birmingham to see if we have cracked the code for how this system is in place. "
Q1 Transcript:
" And I'm struck by a comment that Brian Erickson, who's longtime Greens Creek leader. Some of you probably have met him on tours of Greens Creek. And he's now -- well, in June start overseeing but Green Street and Keno Hill and he rattled off a list of things not legally required, but that we need to do in order to meet Hecla standards. Now it's kind of -- like Greens Creek, it's going to be a long process. I mean we're still improving our standards at Greens Creek, a 37-year-old mine. But the geology at Keno and our culture warrants it. So for the next year or so, our focus is on better monitoring, getting more fulsome hydrologic studies, and making the water treatment plant upgrades. And design improvements are also being made operationally to make the mine more predictable and efficient, which makes it safer and more productive.
There are a number of things, but the biggest is the cemented tails batch plant, which is going to allow underhand mining at Birmingham. And whenever you have the challenging ground conditions like we have at Keno, nothing could make it safer or more productive than having miners mining under a constructed back. That's the underhand method allows you to do. This plant is going to be finished by year-end, and full conversion underhand mining will happen by the end of next year. So we're at 277 tons per day, and this is all from the Birmingham deposit, about 30% more than last quarter. We still have too much variability in how much we mine and mill each day, but it's getting a lot better, and we're seeing even more consistency in April and into May.
At the start of my comments on Keno, I said we're learning. And what immediately comes to mind is that, particularly in the shoulder seasons, in order to manage the clay from Birmingham, we need the hard rock from Mammoth deposit to make the crusher run better. So despite Mammoth being lower grade, and when I say lower grade, I think it's like 24 ounces per ton, so it's not super low grade, a portion of our feed is going to come from it in order to make crushing better. And you'll start to see that in the next few months. With 600,000 ounces that we've done this quarter, we're confident we're going to hit our production numbers, reach commercial and full production, probably before year-end, but only if we're making the mine safer and more environmentally compliant.
Now let me go to why Keno's life, we think, is going to be longer than the current 11-year mine life, and it's the exploration results we're seeing. So if you go to slide 14, last quarter I highlighted high-grade intercepts at Birmingham, including one which was 54 ounces per ton over 39.5 feet, as well as an intercept which was 1,000 feet deeper than any previous drilling, and it provided the evidence that high-grade silver mineralization can be hosted within the full depth of the 3,000-foot favorable basal quartzite host rock unit. Now, we've continued drilling, and the results we shared today are just as exciting, where there were two additional intercepts in the footwall vein, one of which was 55.4 ounces per ton over nearly 41 feet, and the second was 51.2 ounces per ton over almost 40 feet.
These are multiples of the sort of widths of what we normally see. These holes are near-existing infrastructure, and they exceed our model's expectations. We also have two surface exploration drills that we've just started targeting the 3,000-foot strike length and 2,000-foot dip length on the Birmingham vein system to test that deeper basal quartzite host. There's also other drilling targets outside of Birmingham to see if we have cracked the code for how this system is in place. We expect to be here for decades to come." Phil Baker Pres./CEO Hecla Mining