Good day ladies and gentlemen, and welcome to the First Quarter 2007 Hecla Mining Earnings Call. My name is [Fab] and I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will conduct the question-and-answer session towards the end of this conference. (Operator Instructions) I would now like to turn the presentation over to Vicki Veltkamp, Vice President of Investor Relations. Please proceed Ma'am.

Thank you all for joining us today. As the operator said I am Vicki Veltkamp with Hecla Mining Company and we are pleased to be conducting our first quarter 2007 conference call. Our call is being webcast live today at www.hecla-mining.com and on our website you can find the financial results and today's news release and in the news release we've reconciled to GAAP, the cash cost per ounce calculation. Today's presentation will be made by Phil Baker, Hecla's President and CEO and he'll be joined today by Lew Walde, our Chief Financial Officer, Mike Callahan, who's our President of Venezuelan operations, Dean McDonald, our Vice President of Explorations. And today we have Scott Hartman, our Vice President of Technical Services standing in for our Senior Vice President of Operations Ron Clayton. Ron is undergoing some surgery today, but we expect to see him back and healthier than ever in just a couple of weeks. So, following the comments from these gentlemen we'll have a question and answer period. But before we start I need to let you know that any forward-looking statements made today by our management comes under the Private Securities Litigation Reform Act. It involves a number of risks that could cause actual results to differ from projections. And in addition, in our filings with the SEC, we are allowed to disclose mineral deposits that we can economically and legally extract or produce and investors are cautioned about our use of such terms as measured, indicated, and inferred resources, and we urge you to consider those disclosures in our SEC filings. And now, I'm very happy to turn the call over to Hecla Mining Company's President and Chief Executive Officer, Phil Baker.

Thanks Vicki. I want to start off by adding my welcome to Vicki on today's conference call. We appreciate you listening to our thoughts on our earnings release. And our first thought is really the surprise to see the stock performance of today and of the last few weeks. 2006 had the best earnings and cash flow in the history of the Company and this continues with the first quarter of 2007 having the third best earnings in cash flow in the last 27 years. Unfortunately for the comparison for this quarter the best in the history of the company was the first quarter of last year on the back of an asset sale and the fact that some people who write headlines don't bother to understand what they are writing about. Anyway, these record level earnings and cash flow are after a very aggressive exploration program that's delivering and I think investors will, if you look at the fundamentals you will see a Hecla that has a base of operations, exploration and financials that is going to deliver value and growth at very low risk. So, I think the stock price will rebound to levels that we've seen recently and go significantly beyond that. Now why do I say that? Well last quarter I talked on this conference call about the fact that we have a 40 square mile land package in the Silver Valley that we were going to digitize the data from the dozens of mines to develop a 3D district model. Now I thought it would toward the end of the year before we would see any results. Well with incredibly fast work done on a 24/7 basis we now have a 3D model of the Lucky Friday, the Luck Friday extension and the Star and…

Thank you Phil. To get started our silver production totaled 1.6 million ounces in the first quarter and this was produced at a record cost of negative $1.12 per ounce. This production enabled Hecla to realize income of $8.1 million or $0.07 a share, which compares to $2.8 million or $0.02 per share in 2006 before the $35 million gain on the sale of investment. So we are very pleased with the results we have achieved in the first quarter and feel we are off to a very good start to 2007. Now the major variances between the periods are discussed in the press release, so I won't go into those details, so let me focus on a few other items that are included. First of all let's talk about something I would like to pass on as far as general knowledge for our shareholders. I think it is very important for our shareholders to understand how our revenue and profits can be impacted by concentrate shipment timing and smelter contracts. During the first quarter we produced metal that had a value that was approximately $4 million greater than what we were able to ship and recognized as revenue. With the margins contained in our production this has an impact on the timings of earnings realization. Additionally because our revenue on sales to smelters is recorded at provisional prices, the metal prices we used to report revenues or estimates. And these could change each period until the final pricing period of a smelter contract. And of course we all know that prices change daily. The prices for zinc dropped quite a bit from the end of 2006 to the end of the first quarter of 2007 and as a result we had reduced revenues from concentrate shipments made in previous…

Thanks Lew, and good day. Our first quarter operating performance at the Lucky Friday was right on track to meet our 2007 projection. One other thing we are quite proud of is that our operating costs per ton are very similar, if not lower than most underground mines. This is in spite of the fact that our production comes from much greater depths and horizontal distance from our main infrastructure than most underground operations. This is not new, but it's been a trademark for our performance for many years and a real credit to our people at the mine. They are truly some of the best in the business. During the first quarter, we continue to mine some areas of the mine wider in order to extract additional zinc that we would not otherwise mine. This strategy continues to provide enhanced short-term and long-term economics, even though our results in lower silver grades and delayed silver production in the current period. We will continue to employee this strategy so long as zinc prices provide us with this opportunity. But, we are constantly monitoring this to make sure we are enhancing the economic performance of the operation. We have three very important projects going forward at a brisk pace this year. Mill upgrade project is designed to improve our zinc recovery and improve overall mill performance. This project includes additional zinc flotation equipment and online analysis and is scheduled for completion this fall. We have started the engineering and design work for the new number four shaft, which will provide us access to the [orbit] low to 6,200 level and to depths of our current drilling, which extends to nearly the 8,000 level. We expect this engineering to be complete in mid 2008 and construction is likely to begin in 2008.…

Thanks Scott. And just a brief follow up to discuss comments. We're really excited about the performance of the La Camorra unit as we transition to almost all of out production coming form Mina Isidora. This is something we've been working towards for the past three years. Now we can focus even more attention on the rest of our two land packages to extend the life of the unit. On a cost reduction front as Scott mentioned, we're really focused on reducing the work force. It has been and will continue to be challenging as there is a fire increase in the country. However, we have been able to reduce the work force by about 250 workers so far and we look forward to reducing it by another 150 over the remainder of the year. On the political side, President Chavez continues to talk about moving forward with his socialist agenda. And no one, even Chavez, is really clear what form this will take. Chavez has recently stated and he is not sure what 21st century socialism will look like in Venezuela, but it's going to be the people of Venezuela who'll decide what form it will take. The reason I mentioned this is because the one thing, it is very clear. The companies that are going to be operating in Venezuela will need to have a program that provide social support to the work force and programs for the community. And the advantage the Hecla has is that we have already a large social program and a big community support program in place and we've had one for many years. In fact, Hecla's community relations program is the largest of any private gold mining company in the country. The support that we provide to the communities where we operate…

Thank you, Mike. Exploration has become an important component in the growth of the Hecla Mining Company. Recent discoveries and the resource expansion at Lucky Friday, Hugh Zone and Green's Creek have been the catalyst for pre-feasibility studies on new production, mine expansion and future mine development as Scott has described. It’s hard to fall off the achievement of a 35% increase in the silver reserves at the Lucky Friday, recorded last year. The drilling in the first quarter suggests outstanding resource expansion potential in the Lucky Friday in the near future. As Phil mentioned the first drill hole collared on the 4050 level was drilled upward into a 2,500 foot gap area along the structure between the current mine workings of the Lucky Friday extension and the bottom of the stored mine workings new surface. This hole entered a broad alteration and structural zone that contained multiple intervals of silver based metal mineralization. These multiple zones varied in width from four to eight feet and contained grades up to 7.3 ounces per ton silver and 14% combined lead and zinc. Unfortunately the hole was abandoned within this mineralized zone before it intersected the main target as it reached the full capacity of the drill. Now why is this intersection important? When we projected 30 vein, which is the dominant vein in the Lucky Friday extension. This drill hole has not gone far enough to intersect it. The drill hole also deviated to the east and only intersected the fringe of our straight length projection of the vein. I am very confident that we will have significantly better intersections of silver and base metals as we've refined our drill targeting. With that in mind we are currently reviewing alternative drill platform locations to fully evaluate this outstanding target. The options…

Yeah, I think Vicki we're ready for questions.

All right, that concludes our prepared remarks. Operator, would you give the instructions for the question and answer period please?

(Operator Instructions) And your first quarter is from the line of Anthony Sorrentino with Sorrentino Metal. Please proceed.

Hello everyone.

Hi, Anthony.

What is your philosophy concerning the hedging of base metals prices?

Well, Anthony we have a hedging policy that starts with the view that we add value to shareholders two ways. First, by developing new mines and deposits and putting things in the production, second by giving investors exposures to the metals prices. So, to the extent that we need to hedge to do the former, to develop new mines, then we'll do that and if we do we will hedge the base metals first. At this point we have the financial capacity to do everything that we are envisioning without hedging. So until that changes you won't see us put hedged positions of any size in place. We might do some small sort of inter-quarter of things, but nothing on a significant basis.

All right, fine. And at Lucky Friday how would you decide which companies are being considered to engineer and sink the internal shaft?

We've got a team of people that are working on that as we speak. And there's going to be a lot of factors that come in to play, the people that we are able to get, the time that they are able to devote to this and the costs. We have identified [G Scott] probably half dozen potential firms that could do this work and we are in the process of evaluating and how to proceed with them.

Okay and one final question, would you give a breakdown of the at least $22 million that you've planned to spend of exploration by location?

Sure, it is. Well, we have roughly $9 million of that, that we've not yet allocated to the locations and guys help me out, go ahead Dean.

Sure. The key areas for exploration we've allotted approved budget of over $5million for Mexico, we're looking at with the Silver Valley spending about $600,000 and that's really the preemptive 3D modeling GIS. With Venezuela we are looking at just under $3 million and with Green's Creek probably our component is about $1.5 million. But as Phil mentioned there is $9 million that's at this point unallocated. And depending on success of projects or the acquisitions of new projects we'll move money where the success is.

Yeah, if you go and just to add to that there's another roughly $4 million that's being spent in Mexico. I think that's probably covered just about everything may be the Lucky Friday another $1.5 million or so at this point. Again with that $9 million it's going to be allocated to the projects that have the best success and the best outlook. And Anthony, there is always the possibility that we might exceed that $22 million. We of course will, keep the market informed before you come to that conclusion that we are justified in spending more than that.

Okay. It sounds good. Thank you very much and congratulations on a good quarter.

Thanks, Anthony.

(Operator Instructions). Your next question is from the line of David Bond with Platts Metals Week. Please proceed.

Hi, David.

Good morning, everybody. Great quarter and I don't blame you for being a little bit [stark riders] this morning, I didn't get that either. Actually I think the previous caller asked what I was curious about the, you've apparently allocated little bit more of the exploration budget since your presentation in Zurich. Can you give an estimate for thinking this new number for shaft at Lucky Friday?

Order of magnitude $20 million to maybe even as much as $30 million.

Okay. That should cover me. Thanks.

Thank you.

Your next question is from the line of Terence Ortslan with TSO & Associates.

Thanks.

Hi, Terry.

How are you, guys? Thank you very much for the presentation again as usual. Just on Venezuela itself. I think that's great overview in preamble from what's happening in Venezuela in terms of the socialist issues and the ongoing parameters of the politics, but let's go back to the mining business in terms of one of the major deposits so yet to be permitted to which constantly to be in the forefront of news, Crystallex you think as the permit conditionally or not? How would that change your view, number one on Venezuela and two how do you think it's going to change your valuation in Venezuela?

Well, first I guess I'd say that permit being received by Crystallex and I'll let Mike jump in, in a moment. And that changes our view of Venezuela. We actually have a pretty positive view of Venezuela and we've carried the time we've been there, it's been tough, but it's tough operating a mining company anywhere in the world. And we wouldn't characterize it as being any harder there. By having said that, the market seems to just look at the headlines and not focusing on what actually happens. Are you able to make money or are you able to take the money out. And we are able to do both of those things. So we think that a change in perception of Venezuela will have a big impact on our valuation, because we don’t think the market gives us much value at all. Mike you want to add to that.

I think Phil is right. I think the only comment is that I just agree with Phil that if you just look at the headline, the advantage we have is that we have the ability to sit in and talk with the government and find out exactly what they are thinking. So we don't have to rely on some of the sensationalism that's out there and especially a lot of its political banner and co. So I think.

So many other headlines are for local consumption really is that fair, Mike.

Really is in and I agree. So it doesn't really change our strategy and our view of Venezuela we are positive on it now and I think that it would only help the markets perception more than ours.

Well, if you are in the long-term and long time in the mining business. The problems are opportunities and obviously this may turnout to be an opportunity after all.

Well, that's right. And we think this is going to be ultimately be a change in the mining law. Right, Mike.

Yes.

And we think a change in the mining law actually will open up some opportunities for us to do things that we wanted to do even a couple of years ago. But because of title issues as a result of the application of the existing mining law we had to back away from acquiring land packages because we couldn't be assured of the title. We think the change in the mining law will change that and give us the opportunity to do things that we haven't been able to do.

Talking about another opportunity in the neighboring country, let's say Ecuador. Do you see that the same possibility may exist for you, that the uncertainty today may eventually become. Exploration results from a lot of the properties in Ecuador seem to be quite prolific?

Yeah I guess what I would say Terry is that we are contemplating where to go to plan our flag from an exploration operating corporate development standpoint, because we have two places that we are very geographically focused in a portion of Mexico and the Silver Valley and so we are looking for some place else. As we've been prioritizing those potential places Ecuador is not at the top of the list and I think primarily, because it doesn't have the silver assets some of the other places that we are looking at. But we certainly would not rule it out as a potential place its just not we are just not there yet in terms of our evaluation process.

Okay one last question is there any change of destination for Greens Creek product in 2007?

Change of destination. [Lew] in terms of smelters there is not really any we had a change a couple of years ago as we changed the product and tried to reduce the amount of bulk concentrates, but I don't think any.

Typically they have some frame contracts or multi year contracts or multi-year contracts. And I am not aware of any changes that occurring this year, Scott.

No, I think it's, they deal with several smelters and in general the list remains similar.

But the thing smelter but the terms area a little bit different, obviously give…

Surely, terms are improving. And in our evaluation and our budgeting for this year, we have not assumed any improvement.

Okay.

So, I am we view there to be the opportunity, the potential for even better economic results in what we've budgeted and what we are projecting in the market. But, we'll have to see, if there is, where they come out.

Yes. And as far as your answer, has any of those terms change as of yet, the answer would be no. But those contracts, once that they negotiator, they get finalized over the course of next few months, May, July – second and third quarter.

Okay. Thank you guys, Thank you.

Thanks a lot, Jerry.

(Operator Instructions) I am sorry. Do you have another question from the line of Rodney Stevens and with Salomon Partners.

Hello, everyone.

Hi, Rodney.

Hi. Just a quick question, so you may have gone over this before but just clear. Can you just go over what sort of your acquisition criteria would be if you are looking at another assets. What your focus would be?

You know, we have three sort of programs. One is the geographic base program which is a portion of Mexico and the Silver Valley. We are very much focused on things that are in those places. Secondly is a Gold Acquisition Program that ties into our expertise as an underground narrow vein mine. We are looking for assets and companies that have those narrow-vein underground mining operations that we think we can add value to and vice-e-versa. And then thirdly would be silver assets, and by the way, on the Gold assets we are limiting ourselves to North America and Australia to geographically jurisdictions that are considered to be politically secure. And then thirdly is silver assets that we are looking for that are above a 100 million ounces silver equivalent, and we are considering those assets really anywhere in the world. So, its three separate programs and we are quite active in evaluating opportunities that fit into each one of them.

Okay. And just in Mexico, there are a number of junior producers producing under our couple million ounces per year? I mean is there a certain threshold at production you would only be interested in or are these potential candidates as well?

Well, yeah, when we look at those types of assets, the current production is interesting in we certainly evaluate that, but what's more interesting is their land package and the exploration potential that they have and the growth in the reserve resource base. And so we are evaluating things that we think can grow in terms of the reserve resource base.

Okay. Great, thank you very much.

Thanks Rodney.

We have a follow-up from the line of David.

Hi guys, just back for another quick one. Care to name any companies you're looking at in Kinsley?

David, we look at all companies in Kinsley.

Okay. That's a politically correct answer. I have one other question and that's for Terry Ortslan if he is planning to get married in Puerto Ordaz this summer?

I have no idea.

Okay, thank you

There are no further questions at this time. I would now like to turn the call back over to Vicki Veltkamp for closing remarks.

Well, thank you all for joining us today for the Hecla Mining Company first quarter 2007 conference call. If you have any additional questions, you can call me, Vicki Veltkamp. My number is 208-769-4144. That concludes our call today and have a good day.

Thank you for your participation in today's conference. This concludes the presentation. You may disconnect. Have a wonderful day.