The mining company posts record profits despite accidents

SPOKANE  (AP) - Hecla Mining Co. reported record sales and profits in 2011, despite a series of accidents that led to the deaths of two miners and injuries to others.

The Coeur d'Alene based company on Tuesday reported record revenues of $477.6 million last year, and gross profits of $265 million, largely because of high silver prices.

"It was an excellent year," Phil Baker, chief executive officer of Hecla, said in a conference call with investors on Tuesday.

The company produced 9.5 million ounces of silver, which was in line with projections despite the accidents at the Lucky Friday Mine last year, he said.

The Lucky Friday is closed for the rest of this year to make safety improvements, which will reduce the amount of silver the company is projected to produce.

Highlights of 2011 included paying $168 million to the U.S. Environmental Protection Agency as part of a settlement to clean up 100 years of mining pollution in Idaho's Silver Valley region, Hecla said.

But 2011 was clouded by the first fatalities at the Lucky Friday, one of the nation's deepest underground mines, in 25 years. The mine is located about 80 miles east of Spokane.

Miner Brandon Lloyd Gray, 26, was buried in rubble while trying to dislodge jammed rock last Nov. 17, and died two days later. On April 15, miner Larry "Pete" Marek was crushed when the ceiling of his work area collapsed.

Also, seven miners were injured in a rock burst in December.

Hecla contends the accidents were all unrelated. But they brought close scrutiny from the federal Mine Safety and Health Administration.

In January, Hecla was ordered by MSHA to remove sand and concrete material that had built up in the main elevator shaft of the Lucky Friday and was a danger to break off and hit workers. The company said the work would take up to a year, and the mine would be closed during that time.

The closure prompted Hecla to reduce its estimated silver production for 2012 from more than 9 million ounces to about 7 million ounces, all from its remaining Green's Creek mine in Alaska.

Production at the Lucky Friday is expected to resume in early 2013.

Baker said Hecla is using the closure to do $50 million worth of upgrades at the Lucky Friday which would not have been possible if the mine was operating