Hecla Reports 2010 Record Operating Cash Flow of $198 Million and Updates Basin Litigation

Hecla Mining Company ('Hecla?) (NYSE:HL)
today announced record operating cash flow of $197.8 million, net income
applicable to common shareholders of $35.4 million, or $0.14 per basic
share, and adjusted net income applicable to common shareholders of
$82.6 million¹ or $0.33 per basic share for the year. Full
year silver production was 10.6 million ounces at a total cash cost of
negative $1.46 per ounce, net of by-products.²

FULL YEAR 2010 HIGHLIGHTS - RECORD FINANCIAL RESULTS

• 
  Highest annual revenue and operating cash flow in Hecla′s 120-year
  history
  
• 
  Revenue of $418.8 million, a $106.3 million increase over 2009
  
• 
  Net income applicable to common shareholders of $35.4 million, or
  $0.14 per basic share
  
• 
  Adjusted net income applicable to common shareholders of $82.6
  million, or $0.33 per basic share
  
• 
  Operating cash flow of $197.8 million, a 66% increase over 2009
  
• 
  Silver production of 10.6 million ounces at a total cash cost of
  negative $1.46 per ounce, net of by-products
  
• 
  Silver reserves and resources increased to 142 million ounces and 248
  million ounces, respectively
  
• 
  Significant advancement with the Lucky Friday #4 Shaft Project
  
• 
  Cash and cash equivalents of $283.6 million at December 31, 2010 and
  no debt
  

FOURTH QUARTER 2010 HIGHLIGHTS

• 
  Revenue of $134.5 million, a $46.4 million increase over the same
  period in 2009
  
• 
  Net loss applicable to common shareholders of $13.1 million, or $0.05
  per basic share, after giving effect to certain significant items:
  
  
  • 
    $193.2 million accrual on the Coeur d'Alene Basin litigation
    
  • 
    $133.6 million in tax benefit
    
• 
  Adjusted net income applicable to common shareholders of $30.6
  million, or $0.12 per basic share
  
• 
  Operating cash flow of $85.8 million, a 34% increase over the same
  period in 2009
  
• 
  Silver production of 2.7 million ounces at a total cash cost of
  negative $0.14 per ounce, net of by-products
  

'The fourth quarter and year-end results were record setting in a number
of areas, reflecting increased throughput and low costs at our Greens
Creek and Lucky Friday operations, and strong metals prices,? said
Hecla′s President and Chief Executive Officer, Phillips S. Baker, Jr.
'After considering all investing and financing activities, we generated
$178.9 million in net cash flow last year. Our strong balance sheet and
growing cash flow should be sufficient to meet our financial obligations
of a potential Basin litigation settlement, as well as continuing to
fund capital projects to expand our operations and explore our large
land packages in the U.S. and Mexico.?

^{1) The adjusted income applicable to common shareholders represents
a non-U.S. Generally Accepted Accounting Principles (GAAP) measurement.
A reconciliation of net income applicable to common shareholders (GAAP)
to adjusted income can be found at the end of the release.}

^{2) 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 the release.}

FINANCIAL OVERVIEW

Hecla reported 2010 and fourth quarter record revenues and cash flow
from operating activities, surpassing the previous 120-year record set
in 2009, as a result of increased tonnage at Lucky Friday and Greens
Creek, and higher metals prices. Net income applicable to common
shareholders for the full year and net loss applicable to common
shareholders for the fourth quarter were impacted by the following three
items:

• 
  An accrual of $193.2 million in the fourth quarter 2010 due to an
  increase in Hecla Limited′s estimated liability for environmental
  obligations in Idaho′s Coeur d′Alene Basin caused by historic mining
  activity. The increased accrual is based on a potential settlement
  that includes all Basin claims in the litigation. Hecla Limited′s
  accrual now stands at $262 million (see Coeur d′Alene Basin Litigation
  below).
  
• 
  A change in net income tax benefits, as a result of higher metals
  prices, increased profitability, and the recognition of the tax effect
  of the environmental liability accrual described above.
  
• 
  A $20.8 million loss, primarily non-cash in 2010 related to long-term
  base metal hedging, which includes a loss of $9.6 million in the
  fourth quarter 2010 due to rising base-metals prices, and
  mark-to-market changes in the value of base metal derivative
  contracts. A summary of the quantities of base metals committed at
  December 31, 2010 is included at the end of this release.
  

Hecla′s cash position at December 31, 2010 was $284 million, compared to
$105 million of cash on hand at December 31, 2009.

Capital expenditures at our operations totaled $72.7 million for the
full year 2010 and $23.2 million for the fourth quarter. Full year
expenditures incurred at Lucky Friday were $54.4 million, which included
$15.8 million in the fourth quarter. The majority of the expenditures at
Lucky Friday were on the #4 Shaft Project. Full year expenditures
incurred at Greens Creek were $18.3 million, which included $7.4 million
for the fourth quarter.

Exploration expenditures for the fourth quarter and full year 2010 were
$5.4 million and $21.6 million, respectively. As detailed in the
exploration news release issued on February 24th, 2011, Hecla achieved
the highest level of silver reserves and resources in its history with
142 million ounces and 248 million ounces, respectively. Updated
reserves and resources at December 31, 2010 also include gold reserves
and resources of 757,000 ounces and 450,700 ounces, respectively; lead
reserves and resources of 556,200 tons and 1.2 million tons,
respectively; and zinc reserves and resources of 859,000 tons and
831,900 tons, respectively.

Coeur d′Alene Basin Litigation

The negotiators representing Hecla, the United States, the Coeur d′Alene
Indian Tribe, and the State of Idaho with respect to the Coeur d′Alene
Basin environmental litigation and related claims have reached an
understanding on proposed financial terms to be incorporated into a
comprehensive settlement that would contain additional terms yet to be
negotiated.

'Determining the financial terms of any settlement of this longstanding
litigation is an important step forward in finally resolving this
dispute,? said Mr. Baker. 'While the cost is significant, we believe the
terms are consistent with both our current plans and adding
opportunities that will allow Hecla to grow further. We hope a final
settlement can be achieved by the end of the second quarter.?

On February 18, 2011, the Idaho Federal District Court issued an Order
giving the parties to the litigation until April 15, 2011 to inform the
Court of the status of settlement negotiations. During this time period,
the negotiators will work towards finalizing and agreeing to the
settlement terms, followed by a recommendation for approval to their
respective parties. If the parties are able to complete terms of
settlement, it is expected that a Consent Decree would be lodged,
followed by a public comment period of 30 days and a period for
responses to those public comments. The Consent Decree would also
require approval by the Idaho Federal District Court. If the Consent
Decree is entered, Hecla would make the following payments:

• 
  $102 million of cash and $55.5 million of cash or stock 30 days after
  entry of the Consent Decree
  
• 
  $25 million of cash 30 days after the first anniversary of entry of
  the Consent Decree
  
• 
  $15 million of cash 30 days after the second anniversary of entry of
  the Consent Decree
  
• 
  $65.9 million by August 2014, as quarterly payments of the proceeds
  from the exercise of any outstanding Series 1 and Series 3 warrants
  (which have an exercise price of between $2.45 and $2.50 per share)
  during the quarter, with the balance of the $65.9 million due in
  August 2014 (regardless of the amount of warrants that have been
  exercised)
  

While the negotiators have reached an understanding on proposed
financial terms, no party has agreed to any of these terms as final, nor
has any party represented that any of these terms are final or agreed
to. There can be no assurance that a final settlement will be reached.

Metals Prices

Realized metals prices increased significantly in 2010 compared to 2009.
In the fourth quarter and full year, realized metals prices exceeded
market prices primarily because of provisional price gains of $9.6
million in the fourth quarter and $16.6 million for the year due largely
to increased precious metals prices in the time period between the
shipment of concentrate and final settlement.

OPERATIONS OVERVIEW

In spite of higher mine and mill throughput at both Greens Creek and
Lucky Friday, silver production decreased slightly in 2010 due to lower
silver ore grades at both operations, which was anticipated. However,
production of lead and zinc, which are important by-products, increased
to record levels in 2010 due to higher grades and ore volumes. Fourth
quarter silver production was higher compared to a year ago mainly due
to higher milled tonnage.

The key drivers for the reduction in total cash cost per ounce of silver
year-over-year are higher metals prices and increased production of
gold, lead and zinc. The increase in the fourth quarter total cash cost
per ounce of silver, in comparison to the same period in 2009, is due to
lower zinc and lead grades resulting in lower by-product credits.

Greens Creek

Full year silver production at Greens Creek was 7.2 million ounces,
which included 1.9 million ounces in the fourth quarter, in comparison
to 7.5 million ounces and 1.5 million ounces, respectively, in the same
periods in 2009. The decrease in silver production year-over-year is due
to lower silver ore grade. The lower silver grade, along with the higher
zinc and lead ore grades, were expected and are due to differences in
the sequencing of production according to the mine plan. The increase in
silver production in the fourth quarter over the same period in 2009 is
attributable to higher silver, gold, lead and zinc grades and
recoveries, and increased mill throughput. The Company is working to
optimize mill capacity at Greens Creek and has successfully increased
throughput by approximately 10% since 2008 to 2200 tons per day, and
will work towards increasing throughput to 2250 tons per day in 2011.

Total cash cost at Greens Creek for the full year was negative $3.90 per
ounce, net of by-products and was negative $1.93 per ounce for the
fourth quarter, net of by-product credits, compared to $0.35 and
negative $4.85 per ounce, respectively, for the same periods in 2009.
The increase in total cash cost in the fourth quarter over the same
period in 2009 is due in part to lower by-product credits. The total
decrease in cash cost per ounce of silver produced year-over-year was
primarily due to increased by-product production credits, partially
offset by higher treatment and freight costs, production costs, and
production taxes. The higher treatment and freight costs in 2010 are due
to increased price participation charges by smelters.

Lucky Friday

Full year silver production at Lucky Friday was 3.4 million ounces and
819,317 ounces in the fourth quarter, compared to 3.5 million ounces and
865,595 ounces, in the respective periods in 2009. The overall decrease
in production year-over-year and quarter-over-quarter is primarily due
to lower silver ore grade, which was expected. The operation achieved
record lead and zinc production in 2010 with 21,619 tons and 9,286 tons,
respectively, which included 5,356 tons and 2,214 tons, respectively, in
the fourth quarter.

Total cash cost at Lucky Friday for the full year was $3.76 per ounce,
net of by-product credits and $4.06 per ounce in the fourth quarter, net
of by-product credits, in comparison to $5.21 and $3.10 per ounce,
respectively, for the same periods in 2009. The decrease in total cash
cost per ounce year-over-year is due to higher by-product credits
resulting from higher lead and zinc prices, partially offset by higher
employee profit sharing, production costs, expensed site infrastructure,
and treatment and freight costs. The increase in total cash cost per
ounce over the fourth quarter in 2009 is attributable to lower silver
grades.

Michael Dexter, until recently the Lucky Friday General Manager, retired
after 25 years with Hecla. 'We are grateful for Mike′s valuable
contribution and leadership over more than two decades,? said Mr. Baker.
'Not only has Lucky Friday been operating for 69 years, but with the
current proposed development of the #4 Shaft, the mine is expected to
produce beyond 2030. This would not have been possible without the hard
work and dedication of Mike and his team. We wish him all the best in
his retirement and look forward to working with him as our community
relations representative in the Silver Valley. We would also like to
congratulate John Jordan, who will be taking the helm as General
Manager, and guiding Lucky Friday to continued success. John was
previously the Mine Superintendent at Lucky Friday and has 30 years
experience in the mining industry.?

#4 Shaft Project

The #4 Shaft Project at Lucky Friday is progressing well and Hecla
believes that the project could increase Lucky Friday′s annual silver
production by approximately 60% from current levels and extend the mine
life beyond 2030. Total estimated capital expenditures are expected to
be approximately $200 million, for an internal shaft descending from the
4900 level to the 8800 level, with expected completion in 2014. As of
December 31, 2010, approximately $50 million in total capital
expenditures has been spent since inception of the proposed project,
which includes $37.7 million spent in 2010. Capital expenditures for the
#4 Shaft Project in 2011 are expected to be approximately $45 million.
Final approval of the total project by Hecla′s board of directors could
come as early as mid-2011.

In the fourth quarter, basic engineering work for a centralized
refrigeration system was completed. The scope of work for the project
was revised to include additional shaft depth from the 7800 level to the
8800 level. As of December 31, 2010, off-shaft development and shaft
development have advanced a total of 5,359 feet and 78 feet,
respectively. Construction of the hoist is proceeding with all major
mechanical components installed and operational.

2011 GUIDANCE

Hecla expects silver production in 2011 to range between 9 and 10
million ounces. Silver production is expected to be slightly lower in
2011 compared to 2010, due to lower silver grades, along with higher
zinc and lead ore grades, which are all linked to mine sequencing at
Greens Creek and Lucky Friday. Silver production is expected to increase
in 2012 as grades increase at both properties. Total cash cost is
forecast to be approximately zero dollars per ounce of silver produced,
net of by-product credits, at current metals prices ($1,350 per ounce of
gold, and $1.05 per pound of lead and zinc).

Capital expenditures in 2011 are expected to be approximately $100
million. Hecla expects to spend approximately $27 million in exploration
in 2011.

Mr. Baker said, 'One of our key areas of focus in 2011 will be to work
towards enhancing our production pipeline through our aggressive
exploration program in the four districts we dominate, and to bring new
assets into the company via mergers and acquisitions. In addition to the
development of the #4 Shaft Project at our Lucky Friday operation, which
is expected to provide production growth beyond 2015, we are working
towards increasing near-term and future production.?

DIVIDEND ON SERIES B PREFERRED STOCK

Hecla's board of directors has elected to declare the regular quarterly
dividend of $0.875 per share on the outstanding Series B Cumulative
Convertible Preferred Stock, on a total of 157,816 shares outstanding.
This represents a total amount to be paid of approximately $138,000. The
cash dividend is payable April 1, 2011, to shareholders of record on
March 15, 2011.

CONFERENCE CALL AND WEBCAST

A conference call and webcast will be held Friday, February 25, at 10
a.m. Eastern Time to discuss these results. You may join the conference
call by dialing toll-free 1-800-299-8538 or 1-617-786-2902
internationally. The participant passcode is HECLA.

Hecla′s live and archived webcast can be accessed at www.hecla-mining.com
under Investor Relations 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, 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
10Q. You can review and obtain copies of these filings from the SEC′s
website at www.sec.gov.