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The Wallace Street Journal

The Miners' Penance

February 28, 2011

By David Bond, Editor

Wallace, Idaho " What, exactly, is the price of a miner's penance? How much must a miner pay to cover the shame of being an American miner? (Let us leave alone for a moment the question of why an American miner should be made to feel ashamed of being an American miner by the United Snakes Government.)

We have a working number and you should be sitting down for this. The United Snakes government's shame price, the price which an American miner must pay to ensure that he will not be further persecuted for producing metals that for millennia have been used as honest money, and additionally metals which enable cell-phones, Volvos and Prius cars, refrigerators, is: Seven hundred and thirty-one thousand and 667 dollars and some change " $731,666.66 to be precise. Per miner. Per Lucky Friday miner at Hecla's operations in northern Idaho. All in, $263.4 million: two-hundred sixty-three point four million dollars.

Miners, that is how much your government despises you, because you are miners. That three-fourths of a million dollars is how much your government demands in order not to start loving you but in order to quit punishing you . . . maybe.

This is the same government that pays " PAYS " farmers not to grow stuff, and pays them extra if they grow corn and sell it into the rigged ethanol market at an inflated and miner-subsidized price (50 cents a gallon) engineered to jack up the commodity price of corn and starve the Third World. This is the same government that loves to beat up on tiny countries for no other reason than to keep the R&D money flowing into its favoured contractors as so designated by those contractors' Congressidijits.

That is $263.4 million, three quarters of a million dollars, per miner, that Hecla will not be able to spend on wages, benefits, on shaft and drift development to preserve and extend the productive life of the Lucky Friday Mine, or to find and develop new ore discoveries of silver, lead and zinc in the Coeur d'Alene Mining District.

As Motley Fool's Christopher Barker noted on 28th February, this emerging settlement with the United Snakes tosses a wet blanket over what otherwise would be Hecla's most stellar performance in its 120-year history. Opines Mr Barker:

“The resulting accrual of $193.2 million for Hecla " beyond its previously estimated liability " polluted Hecla's quarterly result, converting a laudable operating performance into a deeply disappointing $13.1 million net loss! Now, rather than hailing the miner's impressive cash cost of negative $0.14 per ounce of silver produced " still trailing only Silvercorp Metals (NYSE:SVM) among the industry's lowest-cost producers " shareholders are instead left to consider the effect of a $262 million outlay upon this company's ability to fund growth in the near to medium term . . .”

“. . . Hecla essentially now enters this crucial period of the precious metals bull market with one hand tied behind its back. I remain a Hecla shareholder, though my enthusiasm has been materially diminished.”

Barker, sadly, is right. Thank-you, United Snakes and the U.S.E.P.A. So much for the EPA's claim that its beyond-absurd cleanup antics here in the Silver Valley, now scoped out for 90 years (Which need to end immediately for the sake of our precious environment!) and which amount to hauling non-toxic yard dirt from King Street here in Wallace down to its “toxic waste” dump below a flood plain 20 miles west in Cataldo, Idaho, won't interfere with “responsible” mining activities in the Coeur d'Alene Mining District.

It already has. A lot of savvy Wall Street investors read The Motley Fool. The message, and this is no fault of Barker's, is that EPA's invasive presence here scares investors away. Better to put your bets down in China, or the Congo, than in a century-old American mining company mining silver, lead and zinc in America at per-ounce silver costs rivaling anyone and everyone on the planet. So much for doing a good job, here in America. No wonder the sun is setting on the great American Experiment.

And all of this without a rationale from the EPA that 120 years of mining here have caused any human, flora or fauna harm except as claimed by the Coeur d'Alene Indian Tribe that mining might have caused cavities in the teeth of midge-flies.

And EPA as stewards of the environment? Get real. The EPA threw enough copper-dross flue dust, caught in the filters from the smokestack bag-houses, from the dismantled Bunker Hill smelter into a ditch alongside the South Fork of the Coeur d'Alene River to poison Coeur d'Alene Lake for at least a millennium, but which could and now never will supply the entire planet with a year's worth of the critical metal indium. Right into an underground spring, they tossed it, heaped some creosoted railway ties on top of it, crapped it all up and lined it with a skinny little plastic bag whose contents will quickly, likely this decade, eat right through it and leach into the river.

Before burying this toxic mess right next to a river and into an aquifer, while it was still safely contained above-ground, the EPA rejected proposals from no less a concern than Williams Petroleum to haul it off and process it into market-ready metals. Dave Williams even purchased a proprietary process from Down Under to separate the dross out into pure ingot lead, pure ingot indium, and into the necessary ingredients of the wood-preservative Cuprinol. The Chinese government offered to buy the stuff, as did Canada's Teck Cominco. Other folks, including the aforementioned Coeur d'Alene Indians, wanted it as well, as an asset they could attach during Bunker Hill then-owners Gulf Resources' bankruptcy, to assuage the Tribe's umbrage over tooth decay in midge-flies. The flue dust had value. No deal, said EPA: we'd rather poison the locals. No need to export this stuff. So instead of elemental lead, copper, arsenic and indium being returned to the world's markets for purchase, EPA decided to murder a river instead " just because they could and thus would show us where it's at.

Hecla, The New Bunker Hill Bunker Hill Mining Company, and to a lesser extent U.S. Silver Corp., stare down the barrel of this EPA gun. The sooner the American miner realizes that his enemy is neither his employer, not the people who invest in the risky fortunes of his company, but this cabal of crypto-Nazi Seattle pseudo-academics and lawyers, the sooner my country will again be free. But until Labor rises up against the destroyers of our serenity, we are slaves.