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Hecla Mining retires remaining Greens Creek Silver Mine debt

Published: 22:43 16 Oct 2009 AEDT

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(Dorothy Kosich, Mineweb.com) Hecla Mining said Thursday that it has fully repaid the debt remaining from the company's April 2008 $750 million cash-and-stock purchase for 100% ownership of Alaska's Greens Creek mine.

The purchase price of the world's fifth largest silver mine was comprised of $700 million in cash and $50 million in Hecla common stock. At the time, Hecla received $400 million in debt financing from Scotia Capital.

The acquisition nearly doubled Hecla's silver production to 11 million ounces, and increased the company's overall silver reserves by 150% and gold reserves by nearly 140%

Hecla's final payment of $38.3 million on the Greens Creek-related debt was made from the company's available cash resources, which at the end of third quarter was over $80 million.

Meanwhile, Hecla also announced Thursday that it has entered into a three-year $60 million senior-secured revolving credit facility. Hecla said it plans to use the facility for general corporate purposes. However, Hecla does not plan to draw on the facility in the near term based on the company's current cash position and business plan. Scotia Capital and ING Capital are the lenders for the credit facility.

In a news release, Hecla President and CEO Phil Baker said, "The Greens Creek acquisition is driving Hecla's production and financial performance and should result in record annual operating cash flow, remarkable given our 100-year history. With this cash flow and the new revolving credit facility, we plan to increase exploration, capital investment programs and acquisition activities."

Greens Creek produced a total of 5.8 million ounces of silver for Hecla's account and 54,650 ounces of by-product gold in 2008, at the low average total cash cost of $3.29 per ounce of silver. Hecla has issued a guidance of 10 million to 11 million of overall company silver production this year at a cash cost of $3/oz.

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