TORONTO (miningweekly.com) – Idaho-based Hecla Mining is looking at opportunities to buy mining assets that could benefit from the company's expertise, CEO Phillips Baker said on Tuesday.

The company owns and operates the Lucky Friday silver/lead/zinc underground mine in Idaho, and last year bought Rio Tinto's controlling interest in the Greens Creek silver/zinc/gold/lead mine, in Alaska, increasing its holding in the operation to 100%.

But the firm is not limiting its search to silver assets, Baker said.

“We also think that we can bring our small-tonnage underground expertise to gold assets, and we think there are even some smaller openpit gold assets that could fit,” he said.

Hecla, which reported first-quarter financial and operating results on Tuesday, produced 2,86-million ounces of silver in the first three months of this year.

After rescheduling debt payments, improving output levels and chipping away at cash costs, the company is in a much better position than it was at year end, Baker commented.

Before financial markets froze up last year, the firm borrowed $380-million to fund its acquisition of Rio Tinto's controlling interest in the Greens Creek mine, in Alaska, last year.

But it was caught out when debt markets suddenly clammed shut, just as base metals fell sharply.

However, in January, Hecla was able to complete an equity offering for funds to repay a bridging loan, and lenders agreed to reschedule payments on the firm's term facility until next year.

The firm reduced its total debt to $113-million during the quarter, from $161-million at the end of 2008.

“We have overcome a difficult situation and the future looks good,” Baker said on a conference call.

“It's a different company.”

Hecla will attempt to renegotiate the the cost of its debt, to secure a better cost, and expects to achieve an improvement “over time”.

ONLY A MATTER OF TIME...

Silver has traded pretty consistently in a range of $12/oz and $14/oz since the start of 2009, but Baker said he expects that prices have much further to go.

“My view is its only a matter of time before the impact of all the actions being taken by governments around the world will result in an upward revaluation of silver and gold,” he said.

“When the logjam of deflation is overcome, then silver will not just maintain its value as it has been doing over the last few months, but will dramatically rise.”

Baker also expressed frustration at the “underperformance” of Hecla's share price relative to its peers.

Competitors like Coeur d'Alene Mines, First Majestic Silver and Pan American Silver own assets in countries with “very different” risk profiles to Hecla's all-US production base, and this is not being reflected in the company's share performance, he said.

“With Hecla's debt crisis behind us, the improved operating performance the high quality resource growth and the operating risk, we think our share price performance should improve, both absolutely and relative to our peers in the future.”

Hecla shares declined 1,54% on Tuesday, to $2,56 a share by 16:03 in New York.