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Executives

Vicki Veltkamp - VP of IR

Phil Baker - President and CEO

Ron Clayton - SVP of Operations

Jim Sabala - SVP

Mike Callahan - VP and SVP of Venezuelan Operations

Dean McDonald - VP of Exploration

Analysts

Anthony Saracino - Saracino Metals

Michael Curran - RBC

Rodney Stevens - Salman Partners

Barry Copper - CIBS

David Christie - Scotia Capital

Hecla Mining Co. (HL) Q4 2007 Earnings Call May 12, 2008 8:30 AM ET

Operator

Good day, ladies and gentlemen. And welcome to the Q1 2008 Hecla Mining Earnings Call. (Operator Instructions).

I would now like to turn the presentation over to your host for today's conference Ms. Vicki Veltkamp, Vice President of Investor and Public Relations for Hecla. Please proceed.

Vicki Veltkamp - Vice President of Investor &Public Relations

Thank you. And thanks to all of you for joining us today. I'm Vicki Veltkamp, as the operator said, and this is the Hecla first quarter conference call, 2008. Our call is being webcast live at www.hecla-mining.com, and on our website you can find today's new release.

Today's presentation will be made by Phil Baker, Hecla's President and CEO, and he is joined by Ron Clayton, our Senior Vice President of Operations; Jim Sabala, our Senior Vice President, Mike Callahan, Vice President and President of Venezuelan Operations and Dean McDonald, our Vice President of Exploration.

But before I start, we do need to let you know that any forward-looking statements made today by our Management team comes under the Private Securities Litigation Reform Act. It involves a number of risks that could cause actual results to differ from projections. In addition, to our filings with the SEC, we're allowed to disclose mineral deposits that we can economically and legally extract or produce, so investors are cautioned about our use of such terms as measured, indicated, and inferred resources. We urge you to consider those disclosures and our SEC filings. I'm happy to turn the call over to Hecla Mining Company's President and Chief Executive Officer, Phil Baker.

Phil Baker - President & Chief Executive Officer

Thanks Vicki. Let me add my welcome to Vicki. This first quarter has been a good one for Hecla. We closed the acquisition of Greens Creek. We began the earnings process on the San Juan joint-venture in southern Colorado. And we produce better earnings and cash flow despite lower production than last year.

We are also announcing a change in Senior Management, Lew Walde is departing Hecla and Jim Sabala will be taking our the CF role on the 15th. We wish Lew well after long dedicated service to Hecla. He was instrumental in turnaround that we've seen in Hecla over the last seven years. Jim, whom many of you know, has almost three decades of experience, and with the exciting things in Hecla's future, we're pleased to have him leading the financial team. Jim will give today's financial report.

A couple of things that I want to talk about, first I would note that some of estimates of earnings did not include the $3.3 million preferred dividend, that's more than $0.02 a share impact on our earnings.

The transition of Greens Creek is progressing; workforce is very enthusiastic at having Hecla, who they know well as operator. So, over the next four to six months, while we continue to get assistance from Rio, pursuant to a transition agreement, we will be focused on getting production to similar levels that you've seen in the past.

I do want to alert you to a tightening of the smelter market that will raise cost for the whole silver mining industry; Hecla is not going to be exempt from that. Since we don’t know exactly where the negotiations will end, we'll have provide an estimate of our costs, that view is adequate, if that changes materially we will let you know. Ron's going to talk more about this in a moment.

In acquiring Greens Creek, we did not maximize the long-term borrowing capacity of the company, because we do not want to hedge our base metal's exposure using mark-to-market accounting. Jim's going to talk about the options we have in talking out the bridge.

Now, there is begin a lot of news recently in Venezuela, and I guess, I would characterize it, it is continuing to make a difficult situation even tougher. Mike's going to talk more about this, but let me say that Mike and the team we have in Venezuela has done a great job over the last eight years allowing us to be the largest and the most successful gold operator in the country. If anyone can get things to work, it's going to be these guys. But regardless of the outcome of that, our Venezuelan exposure is insignificant next to our assets.

Finally, with these acquisitions that we've made, Hecla is a new company. Someone about a year ago, said to me, only half joking, that Hecla should change its name in order to get investor interest. Instead of using this kind of alchemy, we just added assets that fundamentally change us, primarily 100% of Greens Creek. This is an asset we know well and, as we put it by the Silver Institute's Silver Survey, which came out last week, it’s the world's fifth largest silver mine and the lowest cost primary silver mine. Given the size of Greens Creek, we are a new company, not a new name.

And so with that, let me turn it over to Jim.

Jim Sabala

Thank you, Phil, Hecla completed its first quarter of 2008 with significant progress being made on a number of important objectives. The company reports net income up 90%. Income applicable to common shareholders, up 51%, and cash cost per ounce, at a negative $1.42 per ounce.

On the transaction front, we closed the Greens Creek acquisition and related financing, shortly after the end of the quarter. This will yield important and substantial role in our key financial statistics for subsequent periods.

With regard to the first quarter, in particular, we reported a net income of $15.5 million, compared to $8.2 million for 2007's comparable period. Net income applicable to common holders, after the dividend payments Phil referred to, was $12.1 million or $0.10 per common share, compared to $8 million or $0.07 in 2007, first quarter.

These impressive results were achieved, in spite of a few factors that impacted the quarter negatively. First, we did not record any concentrate shipments from Greens Creek in March, due to port congestion at the smelter in Asia. As a result, revenues associated with that concentrate, which have a current market value of approximately $5 million, have been shifted to subsequent quarters.

In addition, the company continues its aggressive exploration program, with exploration expense increasing 49% to $6.1 million in 2008's first quarter.

Results were positively impacted by a tax benefit of $3.9 million, related to the expected utilization of past net operating losses. Of course, we continue to realize the benefit of strong metal prices.

Cash operating cost continue to be extremely low at a negative $1.42 for the quarter. However, gold cash cost increased to $642 per ounce, as a result of the challenging operating environment in Venezuela.

During the quarter we produced 1.3 million ounces of silver and 21,940 ounces of gold. Both of these statistics will increase, commencing in the second quarter, as a result of our taking over 100% of Greens Creek, effective on April 16, 2008.

During the first quarter we generated $11.6 million on operating cash flow, compared to $16.4 million in 2007’s first quarter.

Operating cash flow was adversely impacted at concentrate shipping issue, discussed earlier, and other normal working capital variances, which resulted in nearly $10 million built-up from inventories during the quarters. Again this will reverse in subsequent periods.

As we look forward to the second quarter of 2008, we have one transaction I need to discuss. Near the end of the quarter we sold for $26.2 million, common shares we held in Great Basin Gold. This will generate a gain of $7.6 million, which will be reported in the second quarter as a transaction settled early in the second quarter.

I would like to take this opportunity to briefly review the financial aspects of the Greens Creek transaction completed on April 16. As previously announced, the total acquisition cost was $750 million, of which $50 million was paid with 4,365,000 shares of Hecla common stock. Of the remaining $700 million, $340 million came from Hecla's treasury; $140 million was provided by a three year amortizing term-loan. $220 million was provided by a six month bridge-loan. The interest rate on the term-loan has been fixed, now, at 3.38%, including the spread, which is based on Hecla's leverage ratio and stands at 1.625%. The total interest rate on the term loan is 5%. The bridge-loan interest rate floats with LIBOR, and again, depends on our leverage ratio, which is currently at an all-in rate, including the spread of 5.8%.

Between now and October 16th we will be evaluating our alternatives to retire the bridge-loan. Options include asset sales, debt, equity and combinations of these items. Of course, minimizing shareholder delusion, related to this refinancing is our primary objective.

Finally, I would just like to state that it is indeed a pleasure to join the Management team at Hecla. It is an exciting time, given the acquisition of the remaining 70% of Greens Creek, which transforms the company to another level.

And with that, I would like to turn the presentation over to Ron Clayton, to report upon operations. Ron?

Ron Clayton

Thanks Jim. I would like to start with few comments regarding safety. Our operations continue to perform at a level well above our industry peers and the addition of Greens Creek will enhance our tradition of top safety performance.

We've been spending consistently more time and money on safety programs and regulatory compliance. Compliance with diesel particulate regulations has and will continue to be a challenge for most underground operations.

Lucky Friday and Greens Creek have been working diligently on meeting the new diesel particulate standards for more than four years and have consistently been ahead of the curve. Compliance costs are rising.

Production at Lucky Friday during the first quarter was better than planned in tons mined and processed, and metal production. Metallurgical performance continues to benefit from the investments we made during 2006 and 2007, with recoveries to payable concentrates up in all three metals. Lucky Friday is on track to meet or exceed last year's production levels.

Production at Greens Creek was below our plan for the first quarter, due to manpower shortages, a power plant generator failure; delays in getting a new ore zone into production and lower than expected ore grades.

The transition to Hecla operations has gone relatively, smoothly, but operations during the first quarter are somewhat hampered by distractions related to preparation for the sale. We expect to overcome these issues over the next couple of quarters and get production back on track.

The rent supply costs have negatively impacted operating costs at all of our operations. Diesel fuel is a major culprit, increasing by over $1 a gallon in less than six months. Lucky Friday and Greens Creek utilized diesel equipment fleets, underground, for ore production and mine development. Greens Creek generates all of its power with diesel generators. Freight cost for suppliers, brought into the mines, and concentrate ship from each operation have risen shortly.

In spite of these rising costs Greens Creek and Lucky Friday were able to deliver better financial performance than the same quarter in 2007. Cash operating costs at Lucky Friday were 45% lower than the same quarter in 2007, as a result of higher metals prices and higher zinc production. Greens Creek cash cost were 10% lower as a result of higher metals prices.

Lead and zinc concentrate markets have softened rapidly in the last few months. Rising concentrate supply, and tax, and price controls on precious metals and concentrates is lowering the demand in China, coupled with the devalued dollar, have driven this market change. This will have an impact on most of the silver miners selling into the lead and zinc concentrate markets. Annual negotiations between miners and smelters are in progress.

Based on recent settlements in these markets, we expect smelting and refining costs to increase significantly. As a result of this, and a higher energy costs, we provided guidance of higher cash cost per ounce in the press release. We expect this estimate to be adequate, as Phil mentioned, and hope to improve on it.

Nevertheless, our silver cash costs remain among the lowest in the industry. We've been less impacted by rising costs than many others.

We continue to invest in the future of all of our operations. Greens Creek and Lucky Friday each have sizeable capital programs targeted at sustaining low cost production, as well as, improving efficiency and cap capacity utilization.

Major projects of both operations, include additional tailings storage capacity, major mine development projects, equipment replacements in the mine and the process in plants, as well as the expansion feasibility study and the 4 shaft project at Lucky Friday.

We expect each of these projects to provide additional long-life, and low cost production, as well as opportunity to improve financial performance.

With that, I'll turn it over to Dean McDonald, who will give us an update on our exploration programs. Dean?

Dean McDonald

Thank you, Ron. It's been a successful first quarter in exploration, with drilling programs at five of our properties. This is the beginning of one of the most aggressive exploration programs in our history, and will result in steadily increasing resources at our mines, and opportunities for new resources within our large land packages.

Although, the turnaround of essay results is slow in just about every jurisdiction, we have been able to advance all of the projects in a systematic and cost effective way. In the Silver Valley of Idaho we continued to refine the 3D exploration modeling of the numerous producing and past-producing mines.

In the past quarter there has been a dramatic ramping up of activities. These include a major surface directional drilling program on the gap zone, to evaluate the potential for additional silver resources in the 2,500 foot area, above where resources are currently defined at the Lucky Friday.

3D modeling of the path, producing Star Morning complex just west of the Lucky Friday is been completed. Historic resources have been defined and projections of mineralization trends, in both the main structure and subsidiary mineralized displays will provide a number of drill targets for surface and underground drilling. Drill targets have been defined at the Vindicator property, about a mile east of the Lucky Friday.

All of the geological and exploration data on 11 square miles of the Magnuson exclusivity land package near the Hecla properties has been complied and the 3D model of the past-producing Golconda mine completed. Some potential resources at the Golconda have been identified and drill targets are been developed from surface.

At the Lucky Friday mine exploration and definition drilling below the 5900 level is showing that the limits of the 90, 110 30 and the portions of the 20 vein are extending further to the east than previously anticipated.

This deposit keeps blossoming out, extending the strike length to over 2200 feet below the 5900 level. Drilling, targeting the 30 vein was completed beyond the western and eastern limits of the current resource from the 6300 to the 6700 levels. This drilling has upgraded the confidence levels of portions of the 30 vein resources, and has likely added new resources on some of the intermediate veins.

We continue to be impressed with the exploration potential at the San Sebastian property in Mexico. During the first quarter, 166 square miles, was added to increase our property position to 511 square miles. This concession was added to capture the Northwest extensions of the Cerro Blanco vein system, as defined by satellite astro imagery. A discovery of a northwest trending zone of quartz vein float, containing multi ounce silver.

And an extensive soil sampling program at San Sebastian, defined a new kilometer long northwest trending gold anomaly, north of La Joya and El Gato. At [Panescota] an impressive silver arsenic anomaly, including silver values up to 15 grams per ton is located northeast of La Roca and indicates there are many new areas yet to explore in this extensive property.

As described in our press release we continue to have drilling success at La Roca in the northeastern part of the San Sebastian property and that Rio Grande, which is 50 kilometers south of San Sebastian and consists of a series of high grade Fresnillo-style epithermal veins that extend for over 15 kilometers.

Underground exploration drilling in the Gallagher zone at Greens Creek has extended the mineralization, with four promising intersections that range up to 25 feet in thickness and suggest resource additions are possible. Other definition drilling has added strike length to the 52-50 north extension. And good intervals of mineralization have been defined in the uppermost northwest zone.

Surface drilling is planned later in May to follow-up last year's intersection of mineralized mine contact rocks, northeast of the current mine workings. This target particularly excites us, as it could open up an entirely new area of perspective ground in close proximity to the underground infrastructure.

Drilling at the Isidora mine in Venezuela has identified high-grade gold shears below the current mine infrastructure. The first hole is proposed to extend in the length a zone of mineralization encountered below the S vein essay have been completed.

The newest exploration and acquisition, and one we can wait to get started on is the San Juan Silver Mining joint-venture that represents the consolidation of the Creede, Colorado mining district in to a 25 square mile land package. Drilling plans are being fine tuned and work has commenced on both the state and forest service permits, with initial drilling in late spring likely to commenced on privately own ground.

We believe this land package, with it's over 30 miles of projected vein structures, will provide many opportunities to increase the resource and return the Creede mining district to its former glory.

Although Hecla continues to expand on its property holdings in Mexico and the Silver Valley, we are currently developing the mineral deposit database for the Southeastern Alaska, Northwestern and British Columbia area in order to take advantage of exploration and acquisition opportunities from our base at Greens Creek. We also continue to evaluate exploration and corporate development opportunities to enhance our broadening activities.

With that I will pass the microphone to Mike Callahan, who will talk about Venezuela.

Mike Callahan

Thanks Dean. There are some exciting things going on there in the exploration. Production in the first quarter of La Camorra was just over 17,000 ounces. The grade at Mina Isidora continues to be very high, ranging just under an ounce per ton. However, productivity was hampered by labor disruption, equipment availability and transpiration issues between the mine and the plant.

Although our Venezuelan operations contribute a much smaller percentage of our gross profit than they used to, we are very focused on improving our performance. I'm sure most of you have read about the challenges the mining industry is facing in Venezuela in recent months. The government has taken an aggressive position towards nationalization and not granting permits for new projects, and has taken a proactive in resolving the disputes between workers and companies, generally favoring the workers. In fact, we're currently facing a work stoppage cause by three workers, who were terminated by the labor inspector for conducting activities against the company.

These work stoppages are extremely common throughout the country, occurring on a daily basis. The increased frequency in part is due to the fact that the government has instructed the National Guard now to interfere in disputes between workers or communities and private companies. So, there is very little deterrent to engage in such conduct by these folks.

Much of the activity is related to the fact that there are upcoming elections in November for governors and mayors. After losing much of its support in the recent referendum to modify the constitution, President Chavez is focused on regaining support for his party. As far as MIBAM policy towards mining, we really don't know where it's heading. There's been talk about modifying the mining for quite some time now. And over the past two years, we've seen several versions of proposed legislation, yet nothing has happened. One of the challenges that the ministers overseeing the mining industry have changed by the every 11 months, so by the time they begin to really understand the issues, they move on or are replaced.

The consistent theme throughout all of the proposals that we've seen is been the desire to take back concessions that have been idle for many years, and to clean up the environmental damage caused by artesian mining. We view both of these as very positive and we support of these efforts. As far as the recent action against other mining projects in Venezuela, they really don’t affect us directly, as we have all of our permits to mine and process our material.

Gold price in the first quarter averaged $927 an ounce, and our operating cost was $642. Generated cash margin of about $285, which was above the price of gold than we acquired the operations, and entered into Venezuela. Even with the disruptions that we have experienced we generated over $3 million of gross profit from our Venezuelan operations in the first quarter.

Venezuela continues to be a challenging environment to operate; we have seen many challenges over the past nine years. As Phil mentioned, we are very fortunate to have a great team of people. They have been able to work through all of them, I certainly don’t know what curve balls will be thrown out as going forward, but we certainly are going to attempt to manage them in the same we have done in the past. I expect to continue to generate cash flow out of these assets.

And Phil with that I will turn it over to you for closing comments.

Phil Baker

Vicki, should we take questions now?

Vicki Veltkamp

Yes. Heather would you please give the instructions for the question and answer portion of the call.

Question-and-Answer Session

Operator

Sure, thank you. (Operator Instructions) And your first question comes from the line of Anthony Saracino of Saracino Metals. Please proceed.

Anthony Saracino - Saracino Metals

Good morning everyone.

Phil Baker

Hey Good morning. I am glad that you are able to get on the call.

Anthony Saracino - Saracino Metals

Yes, thank you. I am too. At Lucky Friday can you give us some idea of when the engineering report for construction of the number 4 shaft might be completed and also when the pre-feasibility study on the viability of expanding production might be completed?

Phil Baker

We are turning on both of those, we are anticipating by year-end to that work done. So, in all likelihood we will come out with our earnings release at the end of the year.

Anthony Saracino - Saracino Metals

Alright, and also Lucky Friday you mentioned that the doing definition drilling as much as 800 feet below the 5900 level, could you give us some further ideas of what you are finding down there with regard to the continuity of grades and widths? I guess Ron is that you or Dean would be the better person to answer that.

Ron Clayton

Why don’t you start Dean and I'll follow-up.

Dean McDonald

What we are finding Anthony is that the 30 vein which is the primary producer continues to have as good or better widths and grade as we go to depth. The other thing that we are finding is that, it appears from early drilling that the strike length of the 30 vein is also increasing. But at the same time we are also seeing the evidence of an expansion, that 110 vein, good intersections in the 20 veins. So, the number of veins that we've referred to in the past as intermediate veins are also showing some good strength at depth. Ron, did you want to add to that?

Ron Clayton

I'll just add just a touch here. We actually have intercepts down as low as above 7900 on the 30 veins. So, its early extensive in depth and the grades and continuity on the 30 vein appear to be, maybe even a little bit better on a limited amount of drilling. And to kind of follow-up a little bit on what Dean said about the intermediate veins, one thing that appears to be happening at depth is that there seems to be, maybe a few lapse of them, but they have better continuity along strike, maybe a little wider and little better grades. That's kind of just another way of saying what Dean said.

In addition, we are getting ore grade intercepts and widths, out, beyond the east end of the strike length that we've been mining. Not too far below the 5900. So that's all real good news.

Anthony Saracino - Saracino Metals

Yes, it certainly is. Okay. Well, thank you very much.

Operator

And your next question comes from line of Michael Curran with RBC. Please proceed.

Michael Curran - RBC

Hi, guys, I think you said it at the beginning, but I didn’t catch, how many shares did you have to Rio Tinto for the $50 million.

Phil Baker

It's little over 4 million shares, 4.3 million share.

Michael Curran - RBC

4.3. Okay. That's great, thanks a lot.

Operator

And your next question comes from the line of Rodney Stevens with Salman Partners. Please proceed.

Rodney Stevens - Salman Partners

Hello, everyone. Just a quick question, Phil I guess given the recent events going on in Venezuela, has recent events there changed your view in anyway of the investing further in the country?

Phil Baker

Well, no, our view has stayed the same, which has been we've not really put any new dollars in the country for a number of years, because we generate adequate cash flow to do what need to do down there. So, that hasn't changed. Suffice to say that we are not looking to change that to where we are putting new dollars there.

Rodney Stevens - Salman Partners

Okay.

Phil Baker

Thanks Rodney.

Operator

(Operator Instructions) And your next question comes from line of Barry Copper with CIBS. Please proceed.

Barry Copper - CIBS

Good day. Just wondering your cost on a per ounce basis, looks pretty reasonable. However, your costs on a per ton basis have gone up fairly significant over the last little while. Just wondering what you're doing to stem that trend and are indeed are that a trend that we should expect to continue?

Phil Baker

I'm not sure, I would necessarily say that it’s a trend, Barry, that will continue, but we certainly don't see it reversing. In other words, sort of levels that you see on a cost per ton basis, I think, you can expect to see those going forward. And if we see higher oil prices and diesel fuel, I think you can expect it to see go up as a result of that. Ron, do would you want to add to that?

Ron Clayton

What I would add is this, I agree, 100% with Phil, but we're doing some things like, and we've been doing this for last couple of years, anything we can do to increase efficiencies or recoveries, for example, the things that we have done in the Lucky Friday mill to get the recoveries of all the metals up, it helps on revenue side, at similar cost. Equipment replacement, so that we're getting clear burning, more fuel efficient equipment where we can, trying to maximize the utilization of capacity, by putting in the additional ventilation and getting ventilation stuff at the Lucky Friday in the right spot. Which we just concluded, in that project, in this quarter. It helps with the compliance cost, but it also helps with being able to maximize the utilization of our milling capacity. To been sure that we are getting the best mix of metals into the mill, that generate the highest margins for us. Those are the types of things that we are doing to try to keep the cost down and the revenue up and maximize the margin.

Phil Baker

And, Barry, just one more thing about the cost. We are in the middle of negotiations for smelter terms. And as Ron said in his remarks, we would expect to see costs go up as a result of that.

Barry Cooper - CIBC World Markets

Right. I guess, I was just looking for instances at Lucky Friday mining cost per ton were up 13% quarter over quarter, so what would have been the biggest impact of that?

Phil Baker

Well, I will let Ron answer, but two things that stand out is certainly diesel fuel and then labor cost, including we have a profit sharing plan, including that with our workforce. Ron?

Ron Clayton

In addition, to the diesel fuel and the profit share been up, because the profits were up there. We also have increasing steel cost. We're using awful lot of steel in our ground support, there. We also, are seeing some increase in cement cost for backfill. Then the other thing that's really hit is freight cost, well, both supplies coming in and concentrates going out.

Phil Baker

And I think, we also had an increase in insurance costs for workers comp.

Barry Cooper - CIBC World Markets

Right. So a lot of that's going to continue into Q2, I suspect, given the trends that we're seeing with fuel and steel and what not.

Phil Baker

That's right, I wouldn't necessarily think that it's going to be 10% to 15% sort of increase this quarter-on-quarter, every quarter, but certainly the levels that you're seeing today is, we're not going to see this decline

Barry Cooper - CIBC World Markets

Right. Okay. And then the difference in the milling cost that La Camorra, is that primarily related to the trucking, because that's gone up like 45% quarter-over-quarter?

Phil Baker

It's trucking and it is also just utilization at the mill itself.

Barry Cooper - CIBC World Markets

What's the tonnage, that being down, you mean?

Phil Baker

Yes. Mike anything else.

Mike Callahan

No, just recall that in the past we were processing material from both operations, now we are just mining materials from Mina Isidora. So its lower tonnage, higher grade material, so the cost per ton is up.

Operator

(Operator instructions). And your next question comes from the line of David Christie with Scotia Captial. Please proceed.

David Christie - Scotia Capital

Good morning, guys. Just more on Barry's comments there. Do you have any guidance on what you think cost per ton will be these year at the three operations? The cost per ounce is with lot of backward calculation. I would like to know what you're thinking on a cost per ton basis?

Phil Baker

I'm looking at our plan, I don't have it broken down on the sheets. I have here between mining and milling.

David Christie - Scotia Capital

If you have the total, that's fine, between the two.

Phil Baker

Ron or Jim, do you guys have that?

Ron Clayton

Do you have that Jim?

Jim Sabala

I have it per ounce.

Ron Clayton

My recollection is that the numbers for Lucky Friday and Greens Creek are pretty similar to what we had in the first quarter going forward.

David Christie - Scotia Capital

Okay. So, that’s what you budgeted for the year?

Ron Clayton

Right.

David Christie - Scotia Capital

Okay. And on the smelter treatment terms you are negotiating what kind of percentage increase do you think you are going to end up having, do you have any idea?

Ron Clayton

We're in the middle of negotiations right now. Sorry Phil, I jumped in there. We're in the middle of negotiations right now and I'm very reluctant to say much about that.

David Christie - Scotia Capital

Okay. The principle smelters are China and Japan?

Phil Baker

Korea, Canada, Mexico, Japan, so we have few that we deal with.

David Christie - Scotia Capital

Okay. Thanks guys.

Phil Baker

Thank you.

Operator

As there are no further questions in the queue at this time, I would like to turn the call back over to Vicki Veltkamp for closing remarks.

Phil Baker

Thank you, operator. I appreciate everyone being on the call. As we started the call we think this was a good quarter for us, and not just for the operating results, but for getting Greens Creek transaction negotiated with Rio. And then push early in the second quarter to closing of it. So, thanks everyone for joining us on the call. And if you have any questions feel free to call Vicki or myself.

Vicki Veltkamp

And that concludes our call today for the Hecla first quarter 2008 conference call. If you do have further questions as Phil said, feel free to give me a call and my number is 208-769-4144. Have a great day everyone.

Operator

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a great day.

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