Hecla Announces Highest Ever Silver, Gold and Lead Reserves

Hecla Mining Company today reported the highest silver, gold and lead reserves in its 128-year history and provided an update on its exploration programs during the fourth quarter of 2018.

Highlights

• Reserve gains are from consistent long-term exploration programs and improved use of data.
• Greens Creek, which generates approximately 50% of Hecla's revenues, increased reserve tons 23%, silver ounces 19%, gold ounces 16%, zinc tons 15%, and lead tons 17%, giving a mine life from reserves alone of approximately 11 years.
• Casa Berardi, which generates approximately 35% of Hecla's revenues, increased reserve tons 70%, and gold ounces 28% with the expansion of Principal pit and the addition of the new West Mine Crown Pillar (WMCP) pit.
• Reserves grew while using price assumptions of $14.50/oz silver (expected to be among the lowest in the industry), $1,200/oz gold, $1.15/lb zinc and $0.90/lb lead; all below current spot prices.

"Reserves in stable jurisdictions are a mining company's most important asset. Hecla now has the largest reserve in its 128-year history and its largest single year increase because of exploration. The increase reflects the quality of the districts we control; our long-term, consistent strategy; and the capturing and use of all the data that long-lived mines have," said Phillips S. Baker, Jr., President and CEO. "We have achieved this while the industry has generally seen declining reserves and we were able to use among the most conservative price assumptions in the industry because of the strong economics of these deposits."

"It is particularly important that this growth comes at Greens Creek and Casa Berardi, who generate approximately 85% of our revenue and most of our operations' free cash flow. These mines are Hecla's best," Mr. Baker added. "But we expect our other mines to do the same over the next few years. We are working hard at San Sebastian to extend the oxide mine life and to put the sulfides into production. We are just starting our work in Nevada, reducing the reserve to better reflect the geology, with the goal of building a solid base for consistent production."

Key Reserve and Resource Statistics (2018 compared to 2017)

• Record proven and probable gold reserves of 2.85 million ounces, an increase of 26% .
• Record proven and probable silver reserves of 191 million ounces, an increase of 8% .
• Record proven and probable lead reserves of 774,000 tons, an increase of 5%. Proven and probable zinc reserves of 931,730 tons, an increase of 11% and the highest since 2009.
• The silver reserve of 107.1 million ounces at Greens Creek is the highest since it was 100% acquired in 2008. Gold reserves at Casa Berardi increased approximately 28% to 1.91 million ounces, the highest since 1990.
• Measured and indicated gold ounces increased 44% to 7.0 million ounces, a gain of 2.15 million ounces over 2017. Measured and indicated silver ounces increased 65% to a record 208 million ounces, an increase of 82 million ounces over 2017.
• Inferred gold resources increased 96% to 3.6 million ounces and a gain of 1.8 million ounces. Inferred silver resources increased 4% to 465 million ounces and a gain of 17 million ounces.

Exploration

• Greens Creek:
  • Underground drilling continues to expand high-grade, near-surface resources at the Upper Plate and East Ore zones and add to mineralized trends along the Deep 200 South, Southwest Bench and Lower Southwest zones.
• Casa Berardi:
  • Underground drilling was able to upgrade and expand reserves and resources in the 118, 121, 123, 124, 125, 128 and 160 zones and confirm further potential at depth and to the east and west.
  • Surface drilling completed on the West Mine Crown Pillar (WMCP) extended the resource to the west. Step-out drilling of the 128-129 zones east of the proposed Principal pit and near the proposed 160 pit has defined high-grade extensions.
• San Sebastian:
  • Drilling at the West Francine, El Toro (South) and Esperanza veins continue to define near-surface, oxide mineralization.
• Nevada:
  • Underground drilling at Fire Creek is identifying extensions to the Vonnie, Joyce, Karen and Honey Runner high-grade veins/structures in the Spiral 2, 3 and 4 areas.
  • Underground drilling at Hollister is identifying new mineralization in the West Gloria, East Clementine and Gwenivere areas.

"The 2018 exploration program was very successful at not only our mines but at some of our exploration properties. However, for 2019 the focus will be on San Sebastian, Casa Berardi and Nevada, of which Nevada is estimated to be about half of the budget," said Mr. Baker. "We believe that after a few years of committed exploration there, we could see results similar to what was achieved in 2018."

RESERVES AND RESOURCES

Hecla more than replaced gold production in 2018 (318,901 gold ounces contained) as reserves increased by 26% over 2017, and gold reserve prices were calculated at $1,200/oz. Silver production in 2018 (12.9 million silver ounces contained) was also more than replaced as reserves increased by 8%, despite using $14.50/oz for the reserve calculation. In the last 11 years, Hecla has not only replaced silver production but added another 200 million ounces through exploration. Both zinc and lead production were replaced and reserves increased by 11% and 5%, respectively.

Measured and indicated gold ounces increased 44% to 7.0 million ounces, a gain of 2.15 million ounces over 2017 due to increases at Greens Creek and the acquisition of the Nevada properties. Measured and indicated silver ounces increased 65% to a record 208 million ounces, an increase of 82 million ounces over 2017 due to a large increase at Greens Creek, San Sebastian and the addition of the Nevada properties. Inferred gold resources increased 96% to 3.6 million ounces and a gain of 1.8 million ounces primarily due to the acquisition of the Nevada properties. Inferred silver resources increased 4% to 465 million ounces, a gain of 17 million ounces due to increases at San Sebastian, Greens Creek, and the acquisition of Nevada properties.

Greens Creek

At Greens Creek, the 845,398 tons processed at the mill in 2018 contained 10.3 million ounces of silver, 79,087 ounces of gold, 63,116 tons of zinc, and 23,656 tons of lead. Silver, gold and base metal production was replaced, and silver, gold, zinc, and lead reserves increased by 18.7%, 15.8%, 14.9%, and 16.8%, respectively, over 2017 reserves. The current silver reserve of 107.1 million ounces is the highest since 2008, the year Hecla acquired 100% of the mine. The current gold reserve of 840k ounces is the highest since 2009. Increases in silver and gold reserves at the 200 South, Gallagher, West, 9A, and Southwest zones were partially offset by reductions of silver and gold reserves in the 5250 Zone caused by mine depletion.

Measured and indicated resources increased by 66,134,100 silver ounces (211%) and 467,700 gold ounces (181%) over 2017 with additions in the West, Southwest, 9A, and 200 South zones and losses in the Gallagher and East zones due to conversion to reserves. New drilling and remodeling of areas historically mined at higher cutoffs were responsible for the increases in Measured and indicated resources. Inferred resources increased by 3,271,900 silver ounces (10%) and decreased by 3,200 gold ounces (-1%) due to large conversions to indicated resources or reserves in the 200 South, Upper Plate and East Ore zones.

A new NI 43-101 Technical Report is expected within 45 days. The optimized mine plan accelerates access to higher-grade ore, and allows some of the highest-margin reserves to be extracted in the earlier years of the mine plan. It also utilizes more of the existing workings during the next four years which reduces the planned development investment required. In addition, the increase in reserves is expected to extend the mine life by about three years to 2030.

Casa Berardi

At Casa Berardi, the 1,375,718 tons processed at the mill contained approximately 162,744 ounces of gold, with 744,952 tons (54%) of the milled tonnage coming from underground and 630,776 tons (46%) of the milled tonnage coming from the East Mine Crown Pillar (EMCP) open pit. Gold reserves increased approximately 28% to 1.91 million ounces and reserve tonnage at Casa Berardi increased 71% to 23.7 million tons over 2017. Depletion decreased underground reserve ounces in the 104 (Lower Inter), 113, 118, 123 and 124 zones. This was offset by reserve additions in the west extension of the EMCP as well as 134 and 160 pits. Substantial reserve increases occurred in the proposed WMCP and Principal pits where some underground reserves were incorporated into an expanded pit. There was an overall reduction in underground reserves of 176,400 gold ounces and an increase of open pit reserves of 589,600 gold ounces compared to 2017.

Measured and indicated gold resources decreased 12% from 2017 levels as gains from underground drilling of the 119 and 123 zones and 134 and 160 open pits were offset by decreases at the 107 (South West), 108 (Inter), 111, 113, 115, 117, 118, 121, 124, and 160 underground. The largest decreases were a result of incorporation of the 107 (South West) and 160 underground to open pit reserves. Inferred gold resources decreased 9% from 2017 levels as increases at the 105, 116, 124, 134, 146, 157, and 160 (underground and open pit) zones were offset by losses to inferred resources in the 107 (South West) 108 (Inter) 118, 119, 121, 123, 148, and 160 underground and open pit zones by conversion to indicated resources. Significant losses to inferred resources in the 107 and 108 zones were due to resource upgrades and incorporation into the new WMCP pit. A new NI-43-101 Technical Report is expected within 45 days.

San Sebastian

At San Sebastian, the 156,733 tons processed at the mill contained 2.04 million ounces of silver and 14,979 ounces of gold. Reserves are currently 2.8 million ounces of silver and 22,500 ounces of gold. At the end of the year there was an ore stockpile containing 84,700 silver ounces and 1,800 ounces of gold. The total underground reserves in the Middle Vein are 2.33 million ounces silver and 11,900 ounces gold and represent 83% and 53% of the silver and gold reserves, respectively. The total open pit reserves in the North Vein are 377,600 ounces silver and 8,800 ounces gold and represent 14% and 39% of the silver and gold reserves, respectively.

Due to significant definition drilling, the indicated resources increased from 2017 by 67% for silver to 14.7 million ounces, 11% for gold to 114,700 ounces, 110% for zinc to 42,710 tons, 96% for lead to 30,410 tons, and 119% for copper to 19,780 tons. Indicated Resources are separated into 'Oxide' and 'Polymetallic' mineral styles; oxide is cyanide-amenable material and polymetallic is base-metal-sulfide-rich material amenable to a flotation milling process. Polymetallic resources were defined and extended at depth on the Francine and Middle Veins during 2018. Polymetallic mineralization has zinc, lead and copper and represents 54% of the silver and 17% of the Measured and indicated gold resources. The inferred resource increased from 2017 by 44% for silver to 22.9 million ounces and 50% for gold to 142,700 ounces due to new material being added along the Middle Vein and in the East Francine areas. Lead, zinc and copper decreased by 62%, 64% and 11%, respectively, as a direct result of conversion of polymetallic mineralization in the Francine Vein from inferred to indicated.

Open pit mining continued in 2018 in the expanded North pit to the west and at depth and an additional smaller 'satellite pit' to the west and mining of this pit is expected to continue into 2020. New high-grade, precious metal resources on the Professor and East Francine veins are being evaluated for underground mine design and scheduling. Possible conversion of polymetallic veins in the Francine Vein to reserves will be dependent on metallurgical testing of the bulk sample and stope optimizations. The material from the bulk sample will be used for metallurgical studies and a viability test at a nearby mill, where the processing of polymetallic sulfide ores from San Sebastian is planned.

Lucky Friday

At Lucky Friday, the 17,309 tons processed at the mill contained approximately 186,609 ounces of silver, 673 tons of zinc and 1,131 tons of lead. Reserves are currently 81.0 million ounces of silver, 510,800 tons of lead and 225,260 tons of zinc and are essentially unchanged relative to 2017. Measured and indicated resources have increased 3% for silver to 77.4 million ounces, 3% for lead to 499,070 tons and 4% for zinc to 265,970 tons. Inferred resources remained relatively unchanged year-over-year and include 24.8 million ounces of silver, 181,180 tons of zinc and 74,340 tons of lead.

Fire Creek

At Fire Creek, the 47,573 tons processed at the mill for Hecla in 2018 contained approximately 17,993 ounces of gold and 22,482 ounces of silver. Reserves at Fire Creek are 69,300 ounces gold and 56,900 ounces of silver and are a reduction from the second quarter of 2018 primarily due to model changes that interpret the veins to be thinner (47% of reduction), mining depletion (29% of reduction), and increased costs resulting in higher cut-off grades (17% of reduction). Measured and indicated underground resources are 215,200 ounces of gold and 197,900 ounces of silver and inferred resources are 298,700 ounces of gold and 288,400 ounces of silver.

Hollister

At Hollister, the 32,286 tons processed at the mill for Hecla in 2018 contained approximately 11,779 ounces of gold and 106,056 ounces of silver. Reserves at Hollister are 7,600 ounces of gold and 82,400 ounces silver and are a reduction from the second quarter 2018 primarily due to mining depletion, but also due to removal of material because of thinner vein interpretations. Additional reserve reductions were made as a result of recent identification of fault offsets in the West Gloria area; this material may come back into the reserve once the structural geology and offset magnitudes are interpreted and drill tested. Measured and indicated resources are 181,900 ounces of gold and 770,200 ounces of silver and inferred resources are 222,700 ounces of gold and 1.7 million ounces of silver.

A breakdown of the Company's reserves and resources is set out in Table A at the end of this news release.

EXPLORATION

Exploration (including corporate development) expenses were $8.3 million, and $35.9 million for the fourth quarter and full year 2018, respectively. This represents an increase of 41% and 53% over the fourth quarter and full year 2017. These increases were primarily the result of the addition of exploration near the Nevada Operations, increased exploration at San Sebastian, Casa Berardi and Greens Creek and initial exploration at the Kinskuch project in British Columbia and the Little Baldy project in northern Idaho.

Greens Creek - Alaska

At Greens Creek, drilling in the fourth quarter and strong assay results have upgraded and expanded the Deep 200 South, East Ore, Upper Plate and Southwest Bench zone resources. Exploration drilling focused on the Deep 200 South Zone and Lower Southwest Zone. Drilling of the Deep 200 South Zone confirmed three flat-lying, high-grade lenses that are folded to the west and has enabled portions of bench mineralization to be upgraded to an indicated resource category. Recent intersections include 180.4 oz/ton silver, 0.36 oz/ton gold, 14.0% zinc and 7.2% lead over 5.3 feet and 81.5 oz/ton silver, 0.40 oz/ton gold, 1.1% zinc and 0.6 lead over 5.0 feet. Near the mine portal elevation, drilling of the Upper Plate Zone to the northwest has defined at least two flat-lying zones that are folded to the east. In combination with surface drilling earlier in the year, this resource expanded further to the west and north. Definition drilling results indicate a thickening of the upper and middle mineralization horizons toward the Southwest D Fault from the east. Recent results include 11.4 oz/ton silver, 1.04 oz/ton gold, 2.2% zinc and 1.6% lead over 14.2 feet and 34.2 oz/ton silver, 0.01 oz/ton gold, 2.5% zinc and 1.5% lead over 4.9 feet.

In the East Ore Zone, intersections from drilling at the north end, including 38.5 oz/ton silver, 0.11 oz/ton gold, 7.4% zinc and 3.5% lead over 6.1 feet and 29.5 oz/ton silver, 0.11 oz/ton gold, 3.6% zinc and 1.3% lead over 8.4 feet, confirm previously modeled resource estimates, particularly at lower and higher elevations. Drilling has expanded this northern portion of the zone deeper by over 150 feet. The focus of the first quarter in 2019 underground drilling is on the Lower Southwest, Deep 200 South, 9A, and East Ore zones. Later in 2019 additional drilling targeting of the Northwest West and Upper Plate zones is planned.

More complete drill assay highlights from Greens Creek can be found in Table B at the end of this release and a presentation showing drill intersection locations is available at the following: http://ir.hecla-mining.com/interactive/newlookandfeel/4130678/Hecla-Q4-2018-ExplorationUpdate.pdf.

Casa Berardi - Quebec

During the fourth quarter, up to six underground drills were used to refine stope designs, expand reserves and resources in the 118, 121, 123, 124, 125, and 128 zones and confirm further potential at depth and to the east and west. Up to four drills on surface completed in-fill and exploration drilling at the West Mine Crown Pillar (WMCP), the 128-129 zones east of the Principal pit and near the proposed 160 pit. The WMCP pit represents the latest in a series of existing and proposed open pits along the Casa Berardi Fault or Deformation Zone. The cross section shows where underground resources were brought into the WMCP pit.

At the Lower 118 Zone, drilling confirmed the continuity of multiple mineralized lenses to the west and at depth outside the current resource boundary. Recent intersections continue to expand this resource, including 0.63 oz/ton gold over 13.1 feet and 2.69 oz/ton gold over 2.6 feet. This drilling suggests the zone is open at depth below the 1200-level and to the west. Near the top of the 123 Zone, step-out drilling to the east show the continuity of high-grade mineralization down plunge for 400 feet from surface. Drilling from the 710-790 levels have extended gold mineralization at depth and further to the west with intersections of 0.39 oz/ton gold over 10.8 feet and 0.35 oz/ton gold over 8.9 feet. Drilling from the 970 level, at the bottom of the mine, confirmed multiple lenses and suggests these mineralized lenses plunge east at depth and remain open for exploration.

High in the mine, drilling has targeted the east extension of the 124 Zone that is down-plunge of the Principal pit mineralization. Drilling below the 290-level continues to show the down-dip potential of the 124 lenses to depth. Further east, drilling of the 128-129 zones is defining a high-grade, steeply-plunging series of lenses that have been defined vertically for 600 feet and may extend below the 290 level. Recent drill intersections include 0.35 oz/ton gold over 10.2 feet and 1.25 oz/ton gold over 1.6 feet.

Definition drilling has commenced at the 300-level of the East Mine to refine the depth extensions of the 160 Zone below the pit shells. Drilling has defined broad intervals of mineralization including 0.21 oz/ton gold over 20.3 feet and 0.16 oz/ton gold over 19.9 feet. This mineralization is steeply plunging to the west and is open to depth. Drilling of the WMCP to evaluate open pit potential west of the West Shaft has upgraded the current inferred resource to reserves that are part of a newly defined open pit reserve. The recent results below show that the near-surface, mineralized structures extends both beyond the western extent of the WMCP pit.

In the first quarter of 2019, underground drilling is expected to expand and refine the 118 and 123 zones lower in the mine and the 124-128 zones closer to surface. Underground exploration drilling is planned to evaluate the lower extension of the 113 Zone and the 128 Zone. Surface drilling programs are planned at the western extension of the WMCP and the 128-129 zones to define and expand underground mining potential east of the Principal area along the Casa Berardi Fault.

More complete drill assay highlights from Casa Berardi can be found in Table B at the end of the release and a presentation showing drill intersection locations is available at the following: http://ir.hecla-mining.com/interactive/newlookandfeel/4130678/Hecla-Q4-2018-ExplorationUpdate.pdf.

San Sebastian - Mexico

During the quarter, three core drill rigs and one reverse circulation (RC) drill operated at San Sebastian. One underground drill rig completed in-fill drilling in the central and upper portions of the oxide zone along the Middle Vein. Exploration drilling with two core rigs was directed toward shallower oxide mineralization along the West Francine, Esperanza veins and the recently discovered El Toro (South) Vein. At the Middle Vein, in-fill drilling within the oxide zone intercepted vein intervals with similar grade and width to the previous exploration drilling results in this area. Strong drill results include 66.9 oz/ton silver and 0.22 oz/ton gold over 5.8 feet, and 42.4 oz/ton silver and 0.11 oz/ton gold over 4.7 feet. At the West Francine Vein, located about 1,000 feet west of any past drilling on the Francine Vein core drilling has extended this mineralization about 400 feet along strike and a recent drill hole at the eastern end returned 9.5 oz/ton silver 0.02 oz/ton gold over 1.4 feet. Mineralization in this area is open laterally and at depth and follow-up, offset drilling is in progress.

The El Toro (South) Vein is located approximately halfway between the Andrea Vein resource area to the southeast and the Esperanza Vein to the northwest. Based on its location and orientation, this vein may represent the link between these two known veins with a total prospective strike length of over eight miles. Recent core drilling includes intersections of 9.8 oz/ton silver and 0.13 oz/ton gold over 11.8 feet,4.1 oz/ton silver and 0.13 oz/ton gold over 10.0 feet, and 6.0 oz/ton silver and 0.04 oz/ton gold over 5.4 feet. Exploration drilling continues at the Esperanza Vein area, about a mile and a half west of the mine area. This drilling has defined a wide vein up to 30 feet wide but initial assay results have been poor. Drilling has shifted to the northwest where there are strong geochemistry anomalies along the trend of the vein.

Drilling will continue during the first quarter to evaluate near-surface oxide mineralization at the West Francine Vein, El Toro (South) and Esperanza Vein areas. A grid pattern of vertical holes for sampling overburden and bedrock using an RC drill rig has begun to better define the geochemistry along the Esperanza to Andrea vein corridor.

More complete drill assay highlights from San Sebastian can be found in Table B at the end of this release and a presentation showing drill intersection locations is available at the following: http://ir.hecla-mining.com/interactive/newlookandfeel/4130678/Hecla-Q4-2018-ExplorationUpdate.pdf.

Nevada

Fire Creek

There were up to four drill rigs operating underground at Fire Creek in the fourth quarter with definition drilling focusing on upper and lower portions of Spiral 4, upper portions of Spiral 3, and up-dip of Spiral 2 mineralization. One drill rig is evaluating the upper portions of Spiral 3 along the Honey Runner, Karen, Hui Wu and Joyce structures and will attempt to extend mineralization along strike to the Spiral 2 sills. A narrow, high-grade intercept of 2.79 oz/ton gold over 0.7 feet is within a larger, lower-grade envelope of 0.76 oz/ton gold over 5.0 feet. Other high-grade intercepts in Spiral 3 include 0.64 oz/ton gold over 7.8 feet and 4.08 oz/ton gold over 2.0 feet.

Two drills are evaluating the upper and lower portions of Spiral 4. The drill targeting the southern up-dip extents of the Vonnie, Vein 6, Joyce, and Vein 8 has defined multiple narrow, gold-bearing structures that persist into the upper extents of the Spiral 4 area. Recent intersections include 0.22 oz/ton gold over 10.0 feet and 0.20 oz/ton gold over 3.3 feet. The sill drill completed additional definition drilling in Spiral 2 on the Joyce Vein and Vein 39 that expanded mineralization up-dip. The 2019 underground drill program at Fire Creek is designed to upgrade and expand resources at Spirals 2, 3, 4 and 9 and the Titan and North zones.

Surface exploration rigs evaluated the Zeus and Far View targets for high-grade, gold-bearing structures. Intercepts along strike of the Zeus target encountered multiple structures with strong argillic clay alteration that had intercepts of 0.21 oz/ton gold over 2.0 feet and 0.18 oz/ton gold over 2.3 feet. Drilling identified a new structure to the southwest that graded 0.18 oz/ton gold over 3.4 feet. A new vein, grading 0.17 oz/ton gold over 4.5 feet was also identified to the northeast on a new structure between Zeus and the Spiral 10 veins.

Hollister

Up to three rigs were active in the West Gloria, East Clementine and Gwenivere areas during the fourth quarter. The West Gloria drilling program from the end of the 5265 Level targeted the extension of the Gloria veins to the west where previous drilling had identified veins. Drill results along the West Gloria structure below the level define numerous high-grade veins including 0.32 oz/ton gold and 6.1 oz/ton silver over 11.6 feet and 0.25 oz/ton gold and 10.2 oz/ton silver over 5.5 feet. Additional in-fill drilling is required to determine the continuity of these higher-grade veins. The East Clementine program targeted up-dip extensions of the 233 and 243 veins to follow up on high-grade intersections near the unconformity. Three intercepts, including 1.78 oz/ton gold and 7.5 oz/ton silver over 1.7 feet, on the 233 Vein have delineated a mineable resource close to current workings on the 5190 level. Another intercept, 0.60 oz/ton gold and 0.10 oz/ton silver over 5.0 feet, extended mineralization about 150 feet to the east on the 243 Vein, close to the unconformity.

The Gwenivere program was designed to offset two historical surface reverse circulation (RC) intercepts. Initial drilling intersecting multiple structures had a significant assay interval of 1.35 oz/ton gold and 0.29 oz/ton silver over 3.5 feet. One hole was collared in Muck Bay 2 on the 5050 level and directed to the southeast. This hole intersected multiple dykes and transducers were installed to monitor the hydrology. Additional underground drilling in the Central Hollister, Gwenivere and West Gloria areas is planned to continue through the first quarter of 2019.

More complete drill assay highlights from Nevada (Fire Creek and Hollister) can be found in Table B at the end of this release and a presentation showing drill intersection locations is available at the following: http://ir.hecla-mining.com/interactive/newlookandfeel/4130678/Hecla-Q4-2018-ExplorationUpdate.pdf.