Hecla Reports Second Quarter 2011 Doubling of Income

Hecla Mining Company ("Hecla”) (NYSE:HL) today announced second quarter net income of $33.3 million, or $0.12 per basic share. Second quarter silver production was 2.3 million ounces at a cash cost of $0.52 per ounce, net of by-products.¹

SECOND QUARTER 2011 HIGHLIGHTS

• Sales of $117.9 million, a 33% increase over the same period in 2010
• Net income of $33.3 million, or $0.12 per basic share
• Operating cash flow of $66.3 million, a 16% increase over the same period in 2010
• Silver production of 2.3 million ounces at a total cash cost of $0.52 per ounce, net of by-products¹
• Cash and cash equivalents of $377 million at June 30, 2011

"Hecla had solid operational and financial results year-to-date generating significant cash flow from Greens Creek and Lucky Friday to fund our capital projects and meet our environmental settlement obligations,” said Hecla’s President and Chief Executive Officer, Phillips S. Baker, Jr. "The #4 Shaft Project combined with the new pre-development initiatives at our four properties are expected to increase production by approximately 50-60% over the next 5 years.

"We continue to benefit from high silver margins even with increasing industry cost pressures. Hecla’s cost increase during the quarter is mainly attributable to higher metals prices, which was partially offset by strong by-product credits. Both Greens Creek and Lucky Friday remain among the lowest cost mines in the silver space.”

(1) Total cash cost per ounce of silver represents a non-U.S. Generally Accepted Accounting Principles (GAAP) measurement. A reconciliation of total cash cost to cost of sales and other direct production costs and depreciation, depletion and amortization (GAAP) can be found at the end of this release.

FINANCIAL OVERVIEW

Hecla reported excellent second quarter revenues and cash flow from operating activities, as a result of higher metals prices. Net income applicable to common shareholders for the second quarter were impacted by the following items:

• A $19.6 million tax provision, compared to $8.3 million in the same period in 2010, as a result of higher pre-tax income.
• A $7.8 million negative provisional price adjustment related to precious metal settlements and a short-term buildup of concentrate inventory which negatively impacted sales by approximately $6.5 million.
• A $3.8 million reduction in depreciation, depletion and amortization mainly due to lower production.
• A $0.6 million gain on base metal derivative contracts for the second quarter, compared to a $2.0 million gain for the same period in 2010. A summary of the quantities of base metals committed at June 30, 2011 is included on page 3 of this release.
• A $1.0 million increase in interest expense primarily attributable to pre-lodging interest for the Consent Decree related to the settlement of certain environmental obligations.

Hecla’s cash position at June 30, 2011 was $377 million, compared to $197 million of cash on hand at June 30, 2010.

Capital expenditures (including non-cash capital lease additions) at our operations totaled $26.4 million and $45.7 million for the second quarter and six-month period ended June 30, 2011, respectively. Lucky Friday’s expenditures for the second quarter and first half of 2011 were $14.1 million and $28.5 million, respectively, of which the majority was spent on the #4 Shaft Project. Greens Creek’s expenditures in the second quarter and first half of 2011 were $12.3 million and $17.2 million, respectively. Expected capital expenditures for 2011 have increased from $100 million to $115 million primarily from the acceleration of projects at Greens Creek.

Exploration expenditures for the second quarter and six-month period ended June 30, 2011 were $5.8 million and $9.1 million, respectively. Exploration for 2011 is expected to increase from $27 million to $32 million due to the establishment of pre-development initiatives and the expansion of exploration programs, primarily in Mexico.

Hecla expects the Consent Decree for the Coeur d’Alene River Basin Environmental litigation to be entered in the third quarter of 2011. Hecla will pay $263.4 million over a three-year period (plus $1.1 million in pre-lodging interest). The initial payment of $167 million, which includes $102 million of cash, $55.5 million of cash or Hecla stock, and approximately $9.5 million in proceeds from previously exercised series 3 warrants, will be payable 30 days after entry of the Consent Decree.

Metals Prices

Realized metals prices continued to increase significantly in 2011 compared to 2010. Realized silver prices in the second quarter of 2011 exceeded those of the same period last year by 89%, while for the first half of the year, realized prices were 102% above last year’s levels.

For the second quarter and first six months of 2011, we recorded net negative adjustments to provisional settlements of $7.8 million and $0.4 million, respectively, due largely to a decrease in precious metals prices in the time period between the shipment of concentrate and final settlement. The price adjustment related to zinc and lead contained in our concentrate shipments were offset by gains and losses on forward contracts for those metals.

Base Metals Forward Sales Contracts

The following table summarizes the quantities of base metals committed under financially settled forward sales contracts at June 30, 2011:

OPERATIONS OVERVIEW

Second quarter silver cash costs, net of by-product credits, was $0.52 per ounce compared to negative $1.82 per ounce in the same period in 2010. Based on current 2011 production guidance and cost estimates and assuming recent metals prices for the second half of 2011, total cash costs, net of by-product credits, are expected to be approximately $1.00 per ounce of silver for the year 2011. The following table provides the production summary on a consolidated basis which includes Greens Creek and Lucky Friday for the second quarter and six months ended June 30, 2011 and 2010:

Greens Creek

Silver production at Greens Creek was 1.5 million ounces in the second quarter of 2011 and 3.2 million ounces in the first half of 2011, compared to 1.8 million ounces and 3.4 million ounces, respectively, in the same periods in 2010. The decrease in silver production year-over-year is due to lower silver ore grade and reduced ore volume. The lower silver grades in the second quarter were expected and are due to differences in the sequencing of production according to the mine plan.

Mining and milling costs were up by 29% and 22% for the second quarter and six-month period ended June 30, 2011, respectively. The increase was driven primarily by higher power costs from generating power on-site due to lower availability of less expensive hydroelectric power, caused by the lower precipitation levels in Southeastern Alaska, and higher labor costs due primarily to higher fringe benefits costs.

Total cash cost per ounce of silver produced at Greens Creek was negative $2.70 and negative $1.64 net of by-products, for the second quarter and first half of 2011, respectively, compared to negative $4.56 and negative $5.45 for the same respective periods in 2010. The increase in total cash cost per ounce quarter-over-quarter and year-over-year is due to higher production costs, treatment costs, and mine license tax by $4.60, $4.28, and $1.12 per ounce, respectively. This is partially offset by higher by-product credits of $8.14 per ounce resulting from higher average market zinc, lead, and gold prices. The higher mine license tax and treatment costs are the result of higher metals prices.

Lucky Friday

Silver production at Lucky Friday was 0.8 million ounces in the second quarter of 2011 and 1.5 million ounces in the first half of 2011, compared to 0.8 million ounces and 1.7 million ounces, in the respective periods in 2010. The overall decrease in production year-over-year is primarily due to lower silver ore grade, which was expected.

Mining and milling costs were up by 9% for both the second quarter and six-month period ended June 30, 2011. The increase was driven primarily by increased cost of fuel, consumable underground materials, reagents, power, and maintenance supplies.

Total cash cost per ounce of silver produced at Lucky Friday was $6.46 and $5.74, net of by-product credits, for the second and first half of 2011, respectively, compared to $4.47 and $3.81, for the same respective periods in 2010. The increase in total cash cost per ounce quarter-over-quarter and year-over-year is primarily due to higher employee profit sharing, production costs, expensed site infrastructure, and treatment costs, which are partially offset by higher by-product credits resulting from higher zinc and lead prices. Higher profit sharing and treatment costs are due to higher metals prices.

CONFERENCE CALL AND WEBCAST

A conference call and webcast will be held Tuesday, August 9, at 1:00 p.m. Eastern Time to discuss these results. You may join the conference call by dialing toll-free 1-866-800-8649 or 1-617-614-2703 internationally. The participant passcode is HECLA.

Hecla’s live and archived webcast can be accessed at www.hecla-mining.com under Investors or via Thomson StreetEvents Network. Individual investors can listen to the call at www.earnings.com, Thomson's individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson Street Events (www.streetevents.com), a password-protected event management site.

ABOUT HECLA

Established in 1891, Hecla Mining Company is the largest and lowest cash cost silver producer in the U.S. The company has two operating mines and exploration properties in four world-class silver mining districts in the U.S. and Mexico.

Cautionary Statements

Statements made which are not historical facts, such as anticipated payments, litigation outcome (including settlement negotiations), production, sales of assets, exploration results and plans, costs, and prices or sales performance are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and involve a number of risks and uncertainties that could cause actual results to differ materially from those projected, anticipated, expected or implied. These risks and uncertainties include, but are not limited to, metals price volatility, volatility of metals production and costs, environmental and litigation risks, operating risks, project development risks, political risks, labor issues, ability to raise financing and exploration risks and results. Refer to the company's Form 10-K and 10-Q reports for a more detailed discussion of factors that may impact expected future results. The company undertakes no obligation and has no intention of updating forward-looking statements other than as may be required by law.

Cautionary Statements to Investors on Reserves and Resources

The United States Securities and Exchange Commission permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms on this release, such as "resource,” "other resources,” and "mineralized materials” that the SEC guidelines strictly prohibit us from including in our filings with the SEC. U.S. investors are urged to consider closely the disclosure in our Form 10-K and Form 10-Q. You can review and obtain copies of these filings from the SEC’s website at www.sec.gov.