Spokane Journal of Business

Lucky Friday, Golden Chest production to increase

Tentative agreement with striking miners could be significant

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Hecla Mining Co. has announced this week it’s committed to bringing the Lucky Friday mine, near Mullan back to full production in 2020, despite a vote by members of United Steelworkers Local 5114 to reject a contract agreement that would have ended a 2 1/2-year strike there.

The Lucky Friday mine has been operated by salaried employees during much of the strike, and Coeur d’Alene-based Hecla says in a statement issued Monday that it plans to increase the hiring of hourly employees and contractors. The company had earlier said full production would require a workforce of over 200.

Hecla recently reported a net loss of $19.7 million in the third quarter ended Sept. 30.

Phillips S. Baker said in the earnings statement, however, that its Q3 earnings before interest, taxes, depreciation, and amortization demonstrate “significant progress toward our twin financial goals of having no net revolver indebtedness at year-end and refinancing our senior notes.”

Baker said the Q3 EBITDA of $70 million exceeds that of the first and second quarters combined, and he anticipates a similar EBITDA for the fourth quarter.

John Swallow, president and CEO of Coeur d’Alene-based New Jersey Mining Co., says, “All trends are going in the right direction. Costs are going down and revenue is going up.”

Looking to 2020 and beyond, Swallow asserts, “I think we’re going to grow revenue and production. We want to explore further the land package up by Murray. It could become one of the best gold districts in the West.”

The company currently employs up to 25 people directly at its Golden Chest operations near Murray, Idaho, most of whom have prior mining experience in the Silver Valley.

“They’re a frugal bunch,” he says. “We can ramp up and grow production without adding hardly any more people.”

New Jersey Mining reported record revenue from gold sales totaling $1.9 million, and $4.5 million for the respective three- and nine-month periods ended Sept. 30, compared to $1 million and $2.6 million for the respective year-earlier periods.

The company had net income of $165,200 for the third quarter, compared with a net loss of $588,300 in the year-earlier period.

The market price for gold as of Dec. 10 was $1,466.72 per troy ounce, up from $1,244.22 a year earlier, but down from the 2019 peak of $1,551.40 on Sept. 4. The market price for silver as of Dec. 10 was $16.75 per troy ounce, up from $14.53 a year earlier but below the 2019 peak of $19.57 on Sept. 4. 

Mike McLean
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Deputy Editor Mike McLean has worked his entire journalism career in the Inland Northwest. Mike, who also lives to reel in fish and crank up music, has worked for the Journal since 2006.

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