Hecla Mining Co.'s Senior V.P. and CFO Jim Sabala thought the Lucky Friday silver mine closure, ordered by the U.S. Mine Safety and Health Administration, was going to be a "simple issue."

However, "it was clear they were going to stand their ground," he said.

Sabala spoke at the Very Independent Research Metals and Mining Conference in Boston on Tuesday to provide updates about the company's growth, finances and future plans.

Crews currently are working on cleaning the mine's primary access Silver Shaft, as mandated by MSHA, which started about a month ago.

The first few hundred feet of the shaft was cleaned by crews using a suspended man basket, but the rest will be done using a gantry. It's been installed in the shaft and will be operational around April 15.

Sabala said, "The bottom line is we're doing the work and we expect it to be concluded near the end of the year ... it's painful, no doubt about it, but the reserve and resources aren't going anywhere."

The closure is the result of a special emphasis inspection conducted by MSHA, following three serious accidents last year.

Hecla expects 90 percent of the Mullan mine's workforce to return after the closure, Sabala said. The mine will be better than it ever was when it's reopened.

Also, the company expects annual production at the mine to return to 3.5 million ounces immediately upon the restart of operations early next year, and expects production to increase to about 5 million ounces by 2017 with the No. 4 shaft project.

Despite delays due to the closure, Sabala remains optimistic.

The Lucky Friday has been in operation since 1942, he said.

"We've had a very strong period of silver prices after years and years in the doldrums around $5," he said. There's been a 765-percent increase in silver prices during the last 20 years, and a 700-percent increase in 10 years.

"Why is that? The reason is silver is the metal of this age," he said.

Silver has high electrical conductivity and is increasingly important in new uses today, primarily in electronics. Also, it has superior thermal activity, doesn't overheat and has high reflectivity.

Technology-driven demand has increased 70 percent in 20 years.

"Silver is now deemed money," he said. Projections show that during the next 20 years, the silver market will nearly double.

And that's good news for Hecla - the company is the nation's largest silver producer.

"We expect to spend a record amount in exploration and pre-development in 2012," he said. Exploration refers to the drilling of ground and indication of reserves. Pre-development includes installing infrastructure.

The company expects to spend $39 million this year - $28 million in exploration and $11 million pre-development.

For exploration, that includes $7 million at Greens Creek, in Alaska, $6 million in the Silver Valley, $8.5 million at San Juan Silver, in Colorado, and $3 million at San Sebastian, in Mexico. Pre-development will cost $3 million at the Star mine, $6 million at San Juan, and $2 million at San Sebastian.

There is an additional $3.5 million in generative exploration and potential for added pre-development at San Juan as needed.

Sabala said the Star currently has the lowest amount of reserves at around 3 million ounces, but since it's adjacent to the Lucky Friday, the two can share common infrastructure. The Star has all permits in place and of all Hecla properties, it'll take the least amount of time to access and mine. Hecla will release a preliminary economic analysis late this quarter or early in the next one.