Hecla Reports Second Quarter 2012 Results and Major Progress on Re-Opening of the Lucky Friday Mine

Hecla Mining Company (NYSE:HL)
today announced second quarter net income applicable to common
shareholders of $2.4 million, or $0.01 per basic share, and earnings
after adjustments applicable to common shareholders of $4.4 million, or
$0.02 per basic share. Second quarter silver production was 1.4 million
ounces at a cash cost of $1.03 per ounce, net of by-products.

SECOND QUARTER 2012 HIGHLIGHTS

• 
  Rehabilitation work at Lucky Friday mine advances past the 4900 foot
  level, activating development crews preparing the mine for expected
  resumption of operations beginning in the first quarter of 2013.
  
• 
  Sales of $67.0 million.
  
• 
  Net income applicable to common shareholders of $2.4 million, or $0.01
  per basic share.
  
• 
  Earnings after adjustments applicable to common shareholders (a
  non-GAAP measure) of $4.4 million, or $0.02 per basic share.
  
• 
  Silver production of 1.4 million ounces at a total cash cost (a
  non-GAAP measure) of $1.03 per ounce, net of by-products.
  
• 
  Cash and cash equivalents of $233.0 million at June ?30, 2012.
  
• 
  Declaration of $0.0025 dividend payable September 4 to shareholders of
  record as of August 28.
  
• 
  Credit facility increased to $150.0 million from $100.0 million.
  
• 
  Underground and surface drilling has extended high-grade
  mineralization at Greens Creek (Alaska), the Star (Idaho), the Equity
  (Colorado) and San Sebastian (Mexico).
  
• 
  Company launches all-cash offer to acquire U.S. Silver Corporation for
  CDN$1.80 per common share.
  

'Hecla is delivering cash flow today and investing in growth for the
future. Despite only Greens Creek operating currently, Hecla generates
enough cash flow and has a strong enough balance sheet to invest record
amounts in capital, exploration and pre-development that we believe will
provide long-lived production - 15 plus years at Greens Creek and 30
plus years at Lucky Friday - and 50% production growth over the next
five years,' said Hecla's President and Chief Executive Officer Phillips
S. Baker, Jr.

'We are pleased to report that rehabilitation work at the Lucky Friday
Silver Shaft through the second quarter has progressed ahead of schedule
past the 4900 foot level. Access to this level materially changes the
scope of activities at the mine. Now, in addition to rehabilitating the
shaft, we expect to soon begin construction on two bypasses on the 5900
foot level which positions us to restart production in early 2013. Plus,
we can restart planning work on the #4 Shaft, which will provide 3,000
feet of deeper access to higher grade ores and the potential for 30
years of future production,' Mr. Baker added.

'At Greens Creek, second quarter silver production of 1.4 million ounces
was impacted by lower grades, but cash costs net of by-product credits
were $1.03 per ounce of silver, providing excellent operating margins.
We expect production levels at Greens Creek to increase through the
remainder of the year, as we continue our record capital investment
program there, preparing the mine for many more years of anticipated
low-cost production and reserve growth,' Mr. Baker added.

'Our record 2012 exploration and pre-development program at the four
districts we control continues to return excellent results. We expect
this pre-development program, along with our existing operations, to
help us reach our targeted goal of 15 million ounces of Company-wide
silver production by 2017. Underpinning this growth is our very strong
balance sheet, with $233.0 million in cash and no significant debt.

'Finally, our offer for U.S. Silver, an all-cash offer valued at
approximately $100 million that expires August 31, represents a good
strategic fit for Hecla. It would add another producing mine and expand
our highly prospective land package and development projects in the
world-class Silver Valley of North Idaho. The offer is conditional on
the termination of a proposed merger which is the subject of a
shareholder meeting today,' Mr. Baker added.

FINANCIAL OVERVIEW

Net income applicable to common shareholders for the second quarter was
$2.4 million, or $0.01 per share, compared to $33.2 million, or $0.12
per basic share, for the same period a year ago, and was impacted by the
following items:

• 
  Temporary suspension of mining activities at the Lucky Friday mine,
  which were suspended in January 2012, are expected to resume in the
  first quarter 2013. There were $6.5 million in suspension-related
  costs at the Lucky Friday in the second quarter, including $1.6
  million of depreciation.
  
• 
  Lower-than-expected grades at Greens Creek, as well as lower average
  silver and base metals prices compared to the same period a year ago.
  
• 
  Exploration and pre-development expense increased to $10.6 million in
  the second quarter from $5.8 million in the same period in 2011, for
  exploration work at Greens Creek, the Company's extensive land package
  at San Sebastian in Durango, Mexico, at the San Juan Silver project in
  Colorado, and the Star mine complex in North Idaho's Silver Valley
  near the Lucky Friday mine. Pre-development projects and engineering
  studies were advanced in Mexico, Colorado and the Silver Valley.
  
• 
  A $6.2 million gain on base metal derivative contracts for the second
  quarter, compared to a $0.6 million gain for the same period in 2011.
  A summary of the quantities of base metals committed at June 30, 2012
  is included on page 4 of this release.
  
• 
  A $0.7 million tax provision compared to $19.6 million in the same
  period in 2011, as a result of higher pre-tax income in 2011. Our
  effective income tax rate is approximately 35% in 2012 compared to 33%
  in the same period in 2011.
  
• 
  Losses of $2.4 million on provisional price adjustments compared to
  losses of $7.6 ?million in the same period of 2011.
  

During the quarter, operating cash flow was $(10.2) million, which was
the result of normal variations in timing in the shipping of metal
concentrate from the Greens Creek mine. Consequently, approximately
$24.0 million of cash flow attributable to second-quarter sales was
deferred into early in the third quarter.

Capital expenditures (including non-cash capital lease additions) at the
operations totaled $26.4 million for the second quarter. Expenditures at
the Lucky Friday were $11.0 ?million and $15.3 million at Greens Creek.
Full-year capital expenditures are expected to be $130.0 million in
2012, primarily due to projects at Greens Creek.

Pre-development expenditures totaled $3.5 million in the second quarter.
Pre-development expenditures in 2012 are expected to be approximately
$23.0 million and include infrastructure at the Star mine complex in the
Silver Valley, the San Juan Silver property in Creede, Colorado, and the
San Sebastian property in Mexico.

Exploration expenditures for the second quarter of 2012 were $7.1
million. Exploration expenditures for 2012 are expected to be
approximately $30.0 million.

Credit Facility

On August 2, 2012, we increased our revolving credit facility from
$100.0 million to $150.0 million, with the amended agreement extending
three years from signing. The LIBOR margin increased from 2.75% - 3.50%
under the current facility to 3.00% - 3.75% under the amended facility,
and the base margin rate increased from 1.75% - 2.50% to 2.00% - 2.75%.
Financial covenants, anticipated use of borrowings, and other terms and
conditions remain unchanged from the facility that was previously in
place.

Metals Prices

Average realized silver prices in the second quarter were $27.05 per
ounce, compared with average realized prices in the second quarter of
2011 of $35.80 per ounce.

Overall second quarter realized metals prices were lower than those in
the first quarter 2012, resulting from negative adjustments to
provisional settlements of $2.4 million compared to net negative price
adjustments to provisional settlements of $7.6 million in the second
quarter of 2011. The adjustment to provisional settlements is largely
due to a decrease in prices in the time period between the shipment of
concentrate and the final settlement. The provisional price adjustment
related to zinc and lead contained in our concentrate shipments was
largely offset by net gains on forward contracts of $0.9 million in the
second quarter 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, 2012:

OPERATIONS OVERVIEW

Second quarter silver cash cost was $1.03 per ounce, net of by-products,
compared to $0.52 per ounce in the same period in 2011. The following
table provides the production summary on a consolidated basis for the
second quarter and six months ended June ?30, 2012 and 2011:

Greens Creek mine - Alaska

Silver production at Greens Creek was 1.4 million ounces in the second
quarter of 2012, compared to 1.5 million ounces in the same period in
2011. Second quarter silver cash cost was $1.03 per ounce, net of
by-products, compared to $0.52 per ounce in the same period in 2011, due
in part to lower grades as well as lower average silver and base metals
prices. Mining costs per ton were up by 23% and milling costs per ton
were down by 12% in the second quarter compared to the same period in
2011. The higher mining costs were due primarily to increased use of
contract miners, while the lower milling costs resulted from improved
mill throughput.

Ground control maintenance continued into the second quarter. During the
quarter, crews returned to normal production and normal mining cycle,
and production rates are expected to increase through the remainder of
this year. Grades were lower during the second quarter, due to normal
mine sequencing. Ore grade is expected to increase throughout the rest
of the year.

Greens Creek is expected to produce greater than six million ounces of
silver in 2012.

Lucky Friday mine - Idaho

At the Lucky Friday mine, work crews have completed rehabilitation work
on the Silver Shaft past the 4900 level, an important milestone because
development crews will soon be preparing the mine for resumption of
operations, which is targeted for the first quarter of 2013. A total of
20 additional miners were rehired and will return to work in August,
adding to the 75 ?hourly employees already working at the mine. The
resumption of development work, including construction of a bypass drift
on the 5900 foot level, is part of a plan that has been submitted to
MSHA.

Throughout the second quarter, work through the 4900 foot level included
removal of cementitious material along the main shaft, installation of a
new power cable, and additional work which is expected to improve the
shaft's functionality and possibly improve its hoisting capacity. Work
along the entire 6,100 foot Silver Shaft is expected to be completed by
December 2012.

Reaching the 4900 foot level has also enabled work to resume on the
restart of the #4 Shaft planning. To date, $90.0 million has been spent
on the $206.0 million project, which is planned to access extensions to
reserves, resources and additional exploration targets. The project is
expected to be completed in early 2016.

Care-and-maintenance costs incurred at the Lucky Friday totaled $6.5
million for the second quarter of 2012, including depreciation of $1.6
million.

Exploration

Exploration expenditures for the second quarter were $7.1 million, with
$2.7 million for exploration at San Juan Silver in Colorado, $1.2
million for San Sebastian in Mexico, $1.2 million at the Star mine
complex, $0.7 million at Greens Creek, $0.7 million for the Silver
Valley, and $0.6 million for other exploration-related activities.
Expenditures in 2012 are expected to be approximately $30.0 million.

Underground drilling at Greens Creek continues to extend
mineralization along trend of the Southwest Bench, Gallagher, 200 South,
5250 and 9a Zones. Drilling at the Southwest Bench has defined
high-grade extensions beyond the current resources, connected isolated
mineralized bodies into continuous zones, and defined a new lens of
mineralization. Highlights from drilling of the Southwest Bench include
intercepts of 0.39 opt gold, 14.83 opt silver, 10.5% lead and 22.4% zinc
over 58.4 feet, 0.14 opt gold, 56.2 opt silver, 8.8% lead and 16.6% zinc
over 42.6 feet and 0.11 opt gold, 3.9 opt silver, 6.5% lead and 38.1%
zinc over 24.6 feet. Drilling of the Gallagher Zone continues to extend
mineralization further to the southeast beyond the current resource
boundaries. High-grade mineralization at both the 5250 and 9a Zones has
been defined beyond the current resources and is open further to the
south.

The focus of current drilling at Greens Creek is the 200 South
Zone where in-fill drilling has confirmed and extended an upper limb
that averages 25 feet of white baritic ore and a lower limb that
averages 18 feet of massive base metal and baritic ore types. Drilling
from two stations along the southern-most development has intersected
massive base metal and white baritic ore types and is expected to extend
the current 200 South resource approximately 200 feet to the south. The
confirmation and expansion of the 200 South resource suggests this area
of the mine has the potential to be a significant contributor to current
and future LOM plans. A more extensive assay table of the Greens Creek
underground drilling program can be found at the end of this news
release. The surface drill program at Greens Creek started in mid-June
and is expected to have three drills active until mid-October.

At the west end of the Star mine complex in the Silver Valley
there are now two drills targeting high-grade, northerly and down-dip
extensions to the Moffitt and North Star veins. This drilling extends
the Moffitt vein approximately 400 feet down dip and approximately 600
feet along strike beyond the current resource boundaries. Surface
drilling of the Noonday and Noonday Split have upgraded the current
resource and defined new mineralization on the flanks of the known
resource. Complete assays are provided at the end of this release.

The high-grade, gold-silver bearing breccia and veins of the 108 Trend
at the Equity in Colorado average 300 feet of strike length and
continue for over 600 feet down plunge. Drilling continues to define 12-
to 35-foot zones of intense brecciation, silica flooding and strong
alteration; however, the sulfide concentration appears to be declining
at the lower limits of the trend as the host rock changes to less
competent material. This high-grade zone includes intersections of 18.6
opt silver and 0.15 opt gold over 11.4 ?feet and 26.4 ?opt silver and 0.25
opt gold over 8.8 feet, but a more thorough list of assays during the
second quarter is provided in the table at the end of the release.

In Mexico, step-out holes to the southeast continue to intersect
a dominant vein that could extend the Andrea resource to almost 2.0 km
in strike length. Recent intersections include 3.4 g/t gold and
391.2 ?g/t silver over 1.34 ?meters (0.1 opt gold and 11.4 opt silver over
5.0 feet) and 4.8 g/t gold and 156.0 g/t silver over 2.5 meters (0.14
opt gold and 4.6 opt silver over 8.2 feet), but a complete list is
provided in the table at the end of this release.

Pre-Development

Pre-development expenditures for the second quarter of 2012 were $3.5
million with $1.8 million at the San Juan Silver property in
Colorado, $1.3 million at the Star property in Idaho and $0.4
million at the San Sebastian property in Mexico.
Pre-development expenditures in 2012 are expected to total approximately
$23.0 million.

At the San Juan project in Colorado on the Equity project,
crews are continuing to rehabilitate underground workings, install
utilities down the decline and develop additional drill stations as
drilling continues to intercept high-grade mineralization on the Equity
and prepares to evaluate the Amethyst vein. At the nearby Bulldog project,
the design of the decline is being finalized and a contractor has been
selected with beginning of decline development expected to occur in
September. Commencing development of the underground workings was an
important milestone for the Bulldog project. The Company now expects to
invest a total of $10.6 million at the Bulldog in 2012. Plans to obtain
authorizations for future underground exploration activities at the
Bulldog are being developed.

In Idaho's Silver Valley at the Star project,
rehabilitation of the #5 Shaft continues to where the connection to the
Grouse 700 level will provide for secondary surface access. A 750-foot
long drift is being driven on the Star 2000 level in order to
provide a drilling platform to test the eastern extensions of the
Noonday and Noonday North Split veins.

At the San Sebastian project in Mexico, options for accessing the
existing mineral resources at the Hugh Zone and a new mine are being
refined. A preliminary economic analysis is expected to be completed
during the third quarter of this year. A work plan and drill program to
outline hydrology of the Andrea area, which is located on the
same property package as the Hugh Zone, has been completed and
preliminary mine designs are being reviewed.

Overview of Hecla's Offer for U.S. Silver Corporation

• 
  All-cash offer of CDN$1.80 for each U.S. Silver common share provides
  significant, immediate and certain value and liquidity to U.S. Silver
  common shareholders.
  
• 
  Premium of over 23% over the closing price of U.S. Silver common
  shares on July 24, 2012 and a premium of 30% over the U.S. Silver
  20-day volume weighted average common share price as at July 24, 2012,
  on the TSX.
  
• 
  Offer for each common share also represents a premium of 28% to the
  imputed offer price of CDN$1.41 under the proposed merger with RX Gold
  & Silver, as at July 24, 2012.
  
• 
  Simultaneous and inter-conditional offers to acquire each outstanding
  common share as well as each U.S. Silver purchase warrant for
  CDN$0.205 (its 'in the money? amount).
  
• 
  Offers not subject to financing; Hecla has sufficient cash on hand to
  complete the offers.
  
• 
  Hecla Offer conditional upon the RX proposal not proceeding or such
  transaction otherwise terminating.
  

CONFERENCE CALL AND WEBCAST

A conference call and webcast will be held Tuesday, August 7, at 10:30
a.m. Eastern Time to discuss these results. You may join the conference
call by dialing toll-free 1-866-383-7989 or 1-617-597-5328
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.

ABOUT HECLA

Hecla Mining Company is among the largest and lowest cash cost silver
producers in the U.S. The company has two operating mines, as well as
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. Words
such as 'may,? 'will,? 'should,? 'expects,? 'intends,? 'projects,?
'believes,? 'estimates,? 'targets,? 'anticipates? and similar
expressions are used to identify these forward-looking statements.
Forward-looking statements 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, litigation, regulatory and
environmental 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.

Non-GAAP Measures

(Unaudited)

This release contains references to a non-GAAP measure of cash costs per
ounce. Cash costs per ounce of silver represent non-U.S. Generally
Accepted Accounting Principles (GAAP) measurements that the Company
believes provide management and investors an indication of net cash
flow. Management also uses this measurement for the comparative
monitoring of performance of mining operations period-to-period from a
cash flow perspective. 'Total cash cost per ounce' is a measure
developed by gold companies and used by silver companies in an effort to
provide a comparable standard; however, there can be no assurance that
our reporting of this non-GAAP measure is similar to that reported by
other mining companies. Cost of sales and other direct production costs
and depreciation, depletion and amortization was the most comparable
financial measures calculated in accordance with GAAP to total cash
costs.

The following table calculates cash cost per ounce: