LUCKY FRIDAY MINE

Hecla Mining Company provided an update on the #4 Shaft Project at its Lucky Friday mine in Mullan, Idaho, USA, which the company believes could increase the mine's annual silver production by approximately 50% from current levels and extend the mine life beyond 2030. Total estimated capital expenditures for the #4 Shaft project could range from $150 and $200 million, for an internal shaft descending from the 4900 level to the 7800 level. Engineering is underway to determine the feasibility of constructing the shaft to an ultimate depth of 8800 feet.

The Lucky Strike mine produced about 740,000 ounces of silver in the third quarter at an average total cash cost of $6.06 per ounce. The increases in cash costsper ounce of silver for the third quarter and nine-month period compared to last year are attributable primarily to decreased by-product credits because of the lower prices of zinc and lead, and higher energy and steel costs.

Lucky Friday produced more than 665,000 ounces of silver at an average cash cost of $6.93 per ounce, after by-product credits. Increased cash costs per ounce in the second quarter of 2008 compared to the second quarter of 2007 can be almost equally attributed to increases in smelter treatment and freight charges, as well as mining and milling costs. The increases in smelter costs and consumables are the same items that are impacting mines worldwide. The lower silver ore grade compared to a year ago is due to the nature of the ore body and methods being used to optimize the economics of the mine. Mining longer strike lengths has allowed Lucky Friday to take advantage of the high metals prices and the mill’s ability to recover more zinc due to recent upgrades. Ore has been mined at greater widths to include stringers that provide access to silver, lead and zinc that otherwise would not be mined, but generate a positive margin at current prices. This results in an economic benefit and allows Lucky Friday to temporarily mine a grade of ore that is lower than life-of-mine reserve grade, delaying some production of metals included in the reserves to later periods.