Hecla Mining Co (HL) 2003 Q2 法說會逐字稿

Ladies and gentlemen, welcome to Hecla Mining Second Quarter Earnings Call. My name is Jeanne and I will be your conference coordinator. At this time, all lines are in a listen-only mode with the question-and-answer session to follow. Should you require operator assistance from the call, key star "0" on your tone dial phone and we will be happy to assist you. And for today's call, Vicki Veltkamp, please proceed.

Good morning everyone or it might be good afternoon depending on where you are, but thank you for joining us. I am Vicki Veltkamp, Vice President of Investor and Public Relations and this is the Hecla Mining Company's second quarter 2003 conference call. This call is being web cast live today and you will also be able to access a replay of it if you wish at our website at www.hecla-mining.com. And at that website, you will also be able to find the quarterly and half year financial results in today's news release. And at the end of that news release, you will find a quantitative reconciliation to GAAP of cash cost per ounce, which is now an SEC requirement. Today's presentation will be made by Phil Baker, Hecla's President and Chief Executive Officer with help from Lou Walde, our Vice President and Chief Financial Officer, Tom Fudge, Hecla's President of Venezuelan Operations, and Ron Clayton, Vice President of North American Operations, and those will be followed by a question-and-answer period. Any forward-looking statements made today by our management come under the Private Securities Litigation Reform Act of 1995. They involve a number of risks that could cause the actual results to differ from projections. And now I would like to turn this over to Hecla's President and CEO, Phil Baker.

Thanks Vicki. Good morning and good afternoon ladies and gentlemen and welcome to our conference call. This is my first conference call as CEO and I am happy to report that Art Brown is doing well in retirement, but is still very active as our Chairman. I know he is listening in. Let me put this quarter in context for you. At year ago, our press release announced our second quarter results as the best -- as having the best performance in more than a decade and it was. This year we didn't say that again because we had lowered our earnings compared to last year. However with the $2.5m more explorations expense, which provides the basis for the future of the Company. This quarter arguably is even better than a year ago. Regardless this again is one of the 10 best quarters in our 112-year history. We had an amazing amount of cash flow $8.2m for the quarter, $13m for the year, all while increasing working capital by about $6m. We had as much income excluding one-time items as any quarter in the last few decades except for a year ago. We had almost $2m more gross profit than we did a year ago. We had silver operations that generated half of our gross profit and 25% more than a year ago. And the silver costs were phenomenal at $1.58 announced due to great performance of San Sebastian, Greens Creek. Again to give you a context, this is less than half of our cost per ounce two years ago and it's significantly better than any of our competitors and it continues a trend of declining cost. Hecla's on its 9th consecutive quarter producing more than 50,000 ounces of gold and 8 out of the last 10 quarters with cost below $140 per ounce. Just 2.5 years ago, Hecla had $69m of debt. Today we have $7.6m, having paid off $5.5m just this quarter. However, with our strong cash flow we still have $113m of cash on the balance sheet and we spent $3.6m on exploration, which is more than we have spent in at least a decade and three times what we spent last year. So what an outstanding quarter this has been. What I hope you take away from this quarter is that Hecla Mining Company has the ability to operate assets that will deliver the production that we project and do it at a very low cost. We've not had the lower production estimates or raise cost projections.

And before I turn the call over to Lou and Tom and Ron, I want to provide a little overview on the exploration capital spending both of which are going very well. We are now on track to spend $12-15m on exploration, this year. As high value underground miners are objected as to grow resource base enough to make the decisions to go underground and start realizing value rather than spending money on exploration that's both risky and unnecessary. The negative to that strategy is that we don't grow resources and reserve base dramatically. The positive is that it allows us to generate exceptional returns and the Don Sergio vein at San Sebastian is an example of that strategy. Within a year of discovery, we have begun development and expect production next year. The same thing is happening in Venezuela Block B, where we are having excellent results from our drilling program, which we think will continue for a number of years; however, we are progressing on making an underground development decision on just one of the 19 exploration targets that we have in the Block. And on capital spending, it is going slightly slower than where we wanted to be, but if the development decisions are made as planned we still expect to spend another $12m in the second half of 2003 and it could be as much as $18m if everything goes well. So with that let me turn it over to Lou to talk about the financials.

Thanks Phil. During the second quarter this year, Hecla continued its positive performance reporting quarterly net income of $2.5m or 2 cents per share, Hecla's second quarter net income decreased from last year when net income was total $4.8m or 6 cents per common share. Hecla's gross profit increased by $1.8m or nearly [20.3]% quarter-on-quarter. The decrease in net Income was primarily the result of - of a $2.5m increase in the exploration expenditure, which is a key component of our overall growth strategy. A $1.4 foreign exchange gain was also recognized during the second quarter of 2002. And this year, we also increased our tax provision by $700,000 over the same time last year. From a operating stand point Hecla's production and costs remained very strong. Silver production increased 5% compared to the second quarter of last year where total silver cash cost per ounce decreased from $2.09 per ounce to a record low $1.58 this year. This represents a 24% reduction in total silver cash cost per ounce compared to last year, which was princely driven by the increase in silver production from the San Sebastian mine in Mexico where production for the quarter exceeded a million ounces and nearly matched the record production levels that we encountered during the first quarter. On -- as Phil mentioned on the gold side, total gold production exceeded 50,000 ounces for the 9 straight quarters and gold costs remain low at $139 per ounce. After the impact of the undeclared and unpaid preferred dividends, income applicable to common shareholders totaled $1.9m or 2 cents per share compared to $2.7m or 4 cents in the second quarter of last year.

Taking a look at the first six months, Hecla recorded net income of $9.3m or 8 cents per share compared to net income of $5.2m or 7 cents during the first six months of 02. Again the silver production increased 11% and cash costs per ounce decreased 28%. This combined with solid gold production and low cash cost allowed Hecla's gross profit to increase a remarkable 43% during the first six months of this year compared to last year. In addition, we also recognized the $4m benefit from the Zemex litigation settlement in the first quarter and the benefit of a $1.1m adoption of an accounting principle accounting for asset returning them on obligations. Offsetting these positive factors were the increase expiration expenditure of $4m with the non-recurring foreign exchange gains and $1.4m increase in our overall income tax provision this year. Again after the recognition of preferred dividends, income to common for the first six months of 2003 totaled $8m or 7 cents per share compared to only $1.2m or 2 cents per share in the first six months of last year. Hecla's positive operating results have contributed to significant increase in cash flow from operating activities, as cash flow nearly doubled in the first six months of this year from $6.6m in '02 to $13m during the first six months. The $13m in operating cash flow represents the highest level of operating cash flow in over a decade for Hecla. As Phil also mentioned, at the end of quarter, Hecla's cash balance totaled $113m and debt has been reduced $4.5m from end of the last year to just $7.6m at June 30. Hecla's balance sheet continues to be very strong and provides solid base from which to execute the company's strategy of growing the business.

In summary, Hecla's financial and operating performance for the second quarter continues to move the company forward. We are well positioned to carry our growth strategy, our balance sheet is strong, our operations are performing well, and we are investing heavily in quality exploration activities that provide us tremendous opportunity to be successful in the future. We expect for the year we'll spend between $12-15m on exploration activities. And now to allow you to hear about some of these exciting exploration activities and to discuss our Venezuelan operations, I'll turn it over to Tom Fudge.

Thanks Lou. Well production of La Camorra was pretty much as planned during April and May. In June, we experienced some equipment and blasting issues that reduced production tonnage. But these are just part of the day to day challenges at any underground operation, and they're being managed. The [ore grade] on a quarter-to-quarter basis is down. It's not out of line with our expectations for the areas currently in production development. And on a year to date basis our grade is actually 5% above planned. Minus 426 sub-level developments on the bed sieving at La Camorra has recently accounted very high-grade ore and we have several damaged drill holes just ahead of this development. They run over -- run more than an ounce per ton of gold over two-meter width. Our planned production grade for La Camorra during the balance of 2003 is around three quarters of an ounce.

During the second quarter we were very busy with several exploration and mine development projects in Venezuela. At La Camorra, we completed a core drilling program of structural geology study that led us to the decision to commit $2m over the next 12 months to explore the down-depth potential as deep as 1 km below the surface. We'll be using state of the art directional drilling technology to the projections occurred and potential [ore] issues with the opportunity to extend the La Camorra mine life an additional 5 years. We also have advanced our [Camorra] mine development project through resource, geo-technical, and hydrologic evaluation. We're in the process of integrating all the available information into our mine plan and economic model. Free feasibility study will be available in the fourth quarter. This -- excuse me -- this project is only five miles from the current La Camorra operation and will benefit significantly from shared infrastructure. Additionally, our Block B exploration and mine development projects made significant advances in the second quarter. We are able to significantly extend the size of the research envelope that are in-fill drilling with the intention of advancing a significant part of this resource to reserve status by the end of the year. In the mean time, we are so encouraged by the results today. We have started to fast track mining construction planning with a goal of starting mine development as soon as the fourth quarter this year. Also in Block B, we have completed the initial evaluation of 19 additional exploration targets. We have committed to surface drilling at two of those targets during the third and fourth quarters. All in all we are thrilled with our progress during the nine months since we signed the lease and [Block B] last October.

Now we'll talk about our Mexican and U.S. operations. I am going to turn it over to Ron Clayton.

Thanks Tom. The Greens Creek mine in Alaska continued to perform well during the quarter and the combined improvements are commendable for material operation. [Mill] throughput increased to 2,132-tons per day. Silver grades improved by an ounce per ton compared to the first quarter and higher productivities achieved in the [Longwill] stoves are contributing to lower cash cost. Capital projects at Greens Creek were focused on maintaining current recovery levels while increase [mill] throughput.

Following completion of 1,000-foot exploration [draft], drilling commenced targeting additional ore bodies down depth on the Greens Creek trend and West of the Gallagher falls. Surface exploration mapping and drilling began during the quarter targeting the [inaudible] contact, which hosts the Greens Creek ore bodies. At the Lucky Friday mine in North Idaho, cash cost per silver ounce improved over the first six months of last year as a result of lower dilution and suspending production from a lower grade stove. Mining costs were higher during the first half of this year compared to last year due to increased expense development in mining higher costs but higher-grade stoves. Exploration drilling at the Lucky Friday focused on deep gold under targets. Preliminary results indicate that the resources will extend approximately 200 feet below the previous block model, a grade similar to those currently being mined. That will extend it to a depth 800 feet below the current mining level.

Permitting activities at the Hollister project in Nevada progressed as expected. The OM is currently preparing the environmental assessment for the project. Assuming no significant impacts are identified during remainder of the NEPA process, a decision record could be issued before the end of the year. We met applications required by the Nevada division of environmental protection and they are on track for timely approval. We hope to begin drifting by the end of the year.

Finally, let me talk about our low cost San Sebastian mine in Mexico. The conversion to owner mining was completed successfully during the second quarter at schedule and under budget. Cost per silver ounce was a phenomenal 20 cents per ounce during the second quarter and 7 cents per ounce for the first six months of the year. Silver and gold rates were both higher in the second quarter as a result of gaining access to and mining higher-grade areas. Lower dilution is one of the improvements resulting from the conversion to owner mining, and is also contributing to the lower cash cost.

Development of the Don Sergio vein began during the second quarter. Underground development and surfacing for infrastructure construction are ahead of schedule and under budget. Production is expected to begin in first quarter of next year. We continued to be very focused on and excited about the exploration potential in [Floridian] Valley. Exploration drilling and structural analysis in geo-chemical work continued on targets at Cerro Pedernalillo; [Francine], Esperanza, and the North [Idaho]. With that I will turn back to Phil.

Thanks a lot Ron. And you know what I hope you are able to see about Hecla is the we are an operating company that can deliver low-cost production and that we're very well positioned with the exploration program we had to deliver growth and returns simultaneously. We think that we have a very unique position in the industry and we look forward to answering you questions. Vicki.

Operator, with that we'd like to go to the question-and-answer period.

If you have a question, key star then "1" on your [tone now] phone. If your question has been answered or you want to withdraw your question, key star "2." Again, star "1" for questions. Please hold for your first question. And your first question come from Anthony Sorrentino (ph.) of Sorrentino Metals. Please proceed.

Hello every one. When the Don Sergio vein comes into production in early 2004, will this have the potential to increase the production from San Sebastian in 2004 compared to 2003 or will that just help to maintain production levels at the current rate?

I will turn that to Ron.

It pretty much maintains the current production level. The gold production goes up a little, but there's less silver in the Don Sergio.

Okay. Then in Venezuela what -- that the Canaima mine if -- if development has begun late this year, how long would it take to bring the mine into production?

We are looking at about this time, this is Tom Fudge. We are looking at about 12-15 months lead time to start production from the development areas, there and of course that would ramp up over another six month period.

Okay. Thank you very much.

Thank you.

And our next question comes from Mike Curran of Merrill Lynch. Please proceed.

Hi Phil.

How do you do.

Just two questions. First I guess the silver price is picking up here. There -- what other longer term plans for Lucky Friday, which I guess is producing a round cash cost, and I guess you have some [cap order] -- give life longer -- I was wondering what you're thinking there. And secondly I guess of Block B as, noticing your resource grade is about -- you got 430,000 tons grading 0.62, so lower grade and -- you mining right now in La Camorra and you have to truck it, so, I was wondering what kind of economics you'll be looking at for cost as mostly you're thinking pretty closely about that?

Sure. Mike, let me answer the Lucky Friday first. We were continuing to work on plans to develop the next level of the Lucky Friday and the overall cost of that -- over essentially its life is going to be about $15m. And we are thinking in a lot of ways to how to correct [that net to] try to put this in position to develop that at a lower silver price. We haven't reached a decision on that. But it is garnering a lot of attention by a number of people in the organization. We are very confident that at some point the Lucky Friday will be able to go back in to full production. I couldn't tell you when though and we have a lot more work to do.

On Block B -- on the grade, you know, we are certainly focused on what the cost would be. You know, I guess, I and Tom will let you add to this, but I think what will happen is, we are continuing our drilling, we are continuing our mine planning -- is a great, it will end up being whatever it is as a result of that work. The -- our cost of adding an additional, if you will, stope to the work that we are doing at the Main and the Betzy is not going to be as much as developing brand new operation some place or as much as La Camorra was initially. So, the cost of trucking the ore is roughly $7-8 a ton, that's about right.

Yes.

So, we think the Block B is going to be very economic, on the order of the economics that we are seeing on the Main and the Betzy. Tom, do you want to add to that.

Well, certainly our price or our cost per ounce might be a little higher than it has been running at La Camorra. And of course a big part of this is [inaudible] studies between capital and operating cost and truck transportation in Venezuela is relatively cheap compared to some other places in the world. And, we think we can take advantage of that plus we are looking for the synergies, although these two operations are a fair ways apart, there are going to some shared infrastructure, shared organizational opportunities that will create --.

That is right.

-- economies will scale for us.

But, you know, I think it is fair to say that we would not expect the cost structure greater than $200 an ounce, Tom.

Certainly not.

So, it is something certainly less than that, Mike, and potential to be substantially less.

Okay, I guess, this is going back to Lucky Friday; you mentioned $15m. I noticed the resource to Lucky Friday is like about 65m ounces, will that be $15m developed all of that or a certain percentage of that?

I would say roughly 40m ounces.

All right.

Yeah, Ron is confirming that. So, $15m gets us 40m ounces.

I guess here the $6 silver.

Well, I don't -- hopefully it's not even that much, but, yeah, absolutely.

Okay. Thank you.

Thanks Mike.

And our next question comes from George Topping with Sprott Securities. Please proceed.

Hello everyone.

Hi, George.

Hi. So, can you tell me in Venezuela we are seeing the cost per ton -- on mines dropped quite sharply than the Venezuelan currency as well as lower development activity. Can you give us an idea as which is going to catch up? What's [inaudible] can we see an increase in what kind of budget do you have there on the cost per ton mine for Venezuela.

Tom, do you want to take that.

Well, we would -- we did our budgeting at an exchange rate of 1600 to 1 and -- so currently we are enjoying some exchange rate benefits there and that's reflected in lower cost return as note it. The cost we are anticipating if the exchange rate goes back to more of a 1600 to 1. The costs we are anticipating are similar to what we have experienced before may be slightly higher because as the mine progresses deeper the operating costs do increase.

Its probably the bigger factors that's continuing to go deeper in the mine.

Yes.

But, in any case I think we are very safe and continuing to think this is $150 per ounce operation. And we are enjoying the benefit of seeing our costs below that, but -- we still all of our projections still had that -- that sort of cost range.

Yeah and when we talk about the cost increasing with depth, you know, on a comparative basis, we are talking a couple of bucks per ton, we are not -- big increases.

And what is-- the grade was well below the reserve trade during the quarter and that's certainly temporary, but can you give us an idea of when it will come back up to reserve grade?

Well, as I said, second half of this year we are looking at about three quarters an ounce and maybe slightly higher than that and then next year we are going to see a period of time where all increase from that reserve grades. About beginning of the year reserve grade was 9 tons of an ounce, so we are going to be approaching that next year.

But that's one of the reasons, George, this year was a lower production year than what we had last year, you know, we knew we were going to run into lower grade material.

Alright, and just secondly on the fund of Block B, we realized because of the fairly small amount of money on a capital to bring that on, you are going to be able to [sign] on start from La Camorra free cash flow or are you going to invest external funds?

We'll -- we are certainly with all of the activities we have in Venezuela, we are certainly be putting more money into the country, and you know, we are investigating, we in fact had a meeting with an organization that would provide [political] risk cover -- it was actually a outlaw favor with international finance corporation. You know, we had the potential to bring in other parties to try to layoff some risk there, but you know frankly we've had a good experience in the country; we like the geologic potential of the country. We think we are going to be there a long time to come.

Can you give us an idea of how much money will be invested?

Well, I mean order of magnitude over, sort of a four-year timeframe, I would say easily $60m over four years, and it could be certainly more than that based on some of the opportunities that we see.

Good. Thank you.

And our next question comes from Dan Pink (ph.) of [InSight] Capital. Please proceed.

Hello?

Yes, hello.

We can hear you now Dan.

Great sorry about that. I just wanted to say I mean obviously the stock's been doing really well, I mean you are in multi-year high, [probably] certainly on the back of strong silver prices. Clearly, you are doing the right thing by kind of paying down some of the debt, just wondering why you haven't taken care of the preferred, I mean it would seem to be cleaning that--javascript:void() cleaning up the capital structure would really be the right thing to do here. It certainly be accretive to common shareholders, you know your neighbor just [core] to [inaudible] also just up you know they recently announced there going to be cleaning up their capital structure and the stock has been doing really well. So again I don't understand why you haven't taken up the preferred in particular?

I guess two comments; one, last year we did do an exchange offer for the preferred and two-thirds of the shares came in, and so we have taken action. And then secondly, Dan when we look at our capital requirements going forward, and we look at the returns that we can generate on those investments that seems like that's the place where we should be putting our funds and so that's the direction that we are going in at this stage.

Again, I mean, I hear you but clearly it would seem that what you would really want to do is simplify the capital structure, take advantage of what's now strong silver prices and turn the strong stock price to -- like the guys at [core] have done to really clean things up a little bit and I think kind of make sure that the shareholders -- that the common shareholders fully benefit from the company's operations you know you have and just kind of clean up the capital structure and I think that would be that's perceived by the market and certainly would the benefits reflect in the stock price.

Will certainly keep those thoughts in mind Dan.

Thank you.

Again ladies and gentlemen, if you would like to ask the question, please key star then "1" on your touchtone phone. And your next question comes from Mike Jalonen of Merrill Lynch. Please proceed.

Just I guess the big picture question Phil to put you on the spot. Just if you guys in gold and the silver and lot of cash on the balance sheet which is being pointed out few times in this call, just wondering you have internal targets but obviously sure you got your eye out on the big picture too for potential acquisitions, you made some good ones in the past. I guess was wondering if you are looking and what area you like to focus in and or [whether you] want to stay both gold and in silver, or you want to become more gold just whatever you are thinking?

Yes, we do have people that are focusing their attention on acquisitions and with the reorganization that we have at, Michael will focus even more of his attention on that on going forward. We do want to continue to be both a gold and silver producer, we are very much focused on trying to grow both sides of the business. We are also, Mike trying to utilize -- we think a unique set of skills that we have as a low volume, high value underground miner, and so we are focusing on those things, and in terms of where we are looking, our first priority is in the jurisdictions that we are already in trying to build on our infrastructure costs that we have but we are also looking at other things in the Western Hemisphere first and occasionally there is things outside of this hemisphere that we are taking some time to look at, but the majority of the things are in this, sort of, 5 or 6 time zones.

Alright. If I see your developed projects are apparently more gold oriented, so I guess you would soon be going that way right at the moment?

Well that's what we have in hand, but I am very hopeful that we are going to figure out some ways to take the Lucky Friday back up to full production at some point in the future and when we do that that will double its production; may be even a little more than double. So, we do see some potential for some growth there and we are looking for other things. Now I will say I think that there is more gold opportunities out there than there are silver opportunities of quality assets because we do want to continue to be a low cost producer. So we are not going to just pick up silver assets [willy-nilly] that don't have a good cost profile.

It almost seems there is more competition for silver assets with your sister companies out there who acquire everything under the sun?

Well I mean, certainly there is a lot of competition for these big silver assets that may be will never get produced in at least my estimation, I'm not sure that there are a lot of guys [inaudible] that are looking at some of the other silver assets that are out there. But in general I think you're right, I think there's just a dearth of silver assets to acquire because there hadn't been a lot of money spent on silver exploration in the past. Not surprisingly given the price it's been on, I mean even today at $5 plus. It's not a terribly exciting silver price compared to what you hope it could get to.

Okay. Thank you.

Thanks Mike.

And the next question comes from Andrew French (ph.) of Sun Valley Gold; please proceed.

Hello everyone. Could you just outline the capital expenditures you've mentioned for the next 6 months, you have 12-$80m, possibly scheduled. Where is that being applied please?

I would say roughly half of the capital expenditures will be in Venezuela, but you know, this is going to be dependant upon some development decisions, help me out Lou where the others coming.

Yes, we certainly are sustaining capital at Greens Creek, small amount of San Sebastian also some expenditures for development activities on the down [inaudible] and equipment procurement with the balance really being in Venezuela, at the La Camorra mine, some potential work going on the Block B area and then the small amount of capital at the Hollister project, principally for equipment acquisitions there in Nevada.

I mean order of magnitude half Venezuela and--?

It's slightly more than half, maybe 60% would be Venezuela with the number of potentially -- you know, if we get towards the higher range of the 18m in the second half more of that incremental portion is in Venezuela at Block B.

You know, what drives, how much we spend are some development decisions that we have to make and we are expecting those decisions to happen shortly on some things and certainly, you know, when you think about Block B you think about [Canaima], Hollister development block, all of those things, and the shaft at La Camorra, all of those things, we think will be under way either a decision having been made or ground broken by the end of the year.

Right. Thank you. And just on Venezuela, I guess on a, sort of, just a hypothetical big picture basis, what sort of production levels are you looking to maintain or build up to there, with your various projects?

Well Andrew, we have said that our goal is to double our gold production in the next 5 years and certainly the [alliance] -- a big portion of that doubling comes from Venezuela, I -- we would expect it to double it there and maybe even do a little better than that.

Okay. And so where -- so what's milling capacity you are looking -- will be trying to identify?

Tom do you want to--?

Well currently the configuration of La Camorra mill allows us to handle about 600 metric tons a day, and we have engineering studies underway; we have done preliminary engineering, we are doing very detailed engineering right now on expanding the capacity of La Camorra mill to something in the 1200-1500 ton range and some of that depends on the feed that you have from the mill.

Right. So your huge capacity be -- are you bringing in ore from [Canaima] in Block B in addition to your La Camorra mine?

Yeah the incremental cost of expanding a mill is as low as one third of the cost per breaking new ground for [results].

Okay I'm just to recap back on where you stand on your various environmental and legal issues, any updates there? And what sort of expenditures can you expect from the reclamation issues?

Yeah there really are no updates; nothing has happened. We stand ready anytime for decision with respect to litigation that we've had. We've also as we put in the past have asked for a modification of work that we do in an area that's known as the box. And that a decision on that could happen at any time where we are asking for relief actual reduction and how much we would expend and even more that sort of elimination of the expenditures. But I mean the big picture is we are going to spend $7m on environmental matters into the foreseeable future. And so when you are modeling us we just would suggest that you keep that in mind.

Per annum?

Yes

Okay and just I guess pulling on a little bit from Mike Jalonen's question that at one time your partner at Greens Creek was looking to sell, has there been any further development there or is it the re-kindling of interest by [inaudible] that to sell.

Well, that is probably a better question to ask them. I will say that we have rights with respect to some of their interest. So if they are interested in selling, that something that we would have to decide whether we would want to buy or not. But it is -- you know, what we think it is a well run asset, which has served us quite well and we expect to be involved with Greens Creek for a long time to come with or without them.

All right. That's all my questions. Thank you.

Thanks Andrew.

Again I would like to remind you, it is star "1" to ask a question. There seem to be no questions at this time.

All right, thank you everyone. This has been the Hecla Mining Company second quarter 2003 conference call. Have a good day. Good-bye.

Ladies and gentlemen, thank you for your participation in today's conference. You may now disconnect.