Note 4 - Environmental and Reclamation Activities

12 Months Ended

Dec. 31, 2014

Environmental And Reclamation Activities [Abstract]

Environmental And Reclamation Activities [Text Block]

Note 4: Environmental and Reclamation Activities

The liabilities accrued for our reclamation and closure costs at December 31, 2014 and 2013, were as follows (in thousands):

	2014			2013
Operating properties:
Greens Creek	$	39,237		$	34,530
Lucky Friday		1,069			919
Casa Berardi		6,233			7,795
Non-operating properties:
Coeur d’Alene Basin		—			55,499
Johnny M		5,830			303
Republic		1,389			3,023
All other sites		3,492			3,122
Total		57,250			105,191
Reclamation and closure costs, current		(1,631	)		(58,425	)
Reclamation and closure costs, long-term	$	55,619		$	46,766

The activity in our accrued reclamation and closure cost liability for the years ended December 31, 2014, 2013 and 2012, was as follows (in thousands):

Balance at January 1, 2012	$	153,811
Accruals for estimated costs		4,325
Revision of estimated cash flows due to changes in reclamation plans		(3,738	)
Payment of reclamation obligations		(41,183	)
Balance at December 31, 2012		113,215
Accruals for estimated costs		2,250
Liability addition due to acquisition of the Casa Berardi unit		7,998
Payment of reclamation obligations		(18,272	)
Balance at December 31, 2013		105,191
Accruals for estimated costs		9,952
Revision of estimated cash flows due to changes in reclamation plans		675
Payment of reclamation obligations		(58,568	)
Balance at December 31, 2014	$	57,250

On September 8, 2011, a Consent Decree (the “Consent Decree”) settling environmental litigation and related claims involving Hecla Limited pertaining to historic releases of mining wastes in the Coeur d'Alene Basin was approved and entered by the U.S. District Court in Idaho. The Consent Decree resolved all existing claims of the Plaintiffs against Hecla Limited and its affiliates under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”) (and certain other statutes) for past response costs, future environmental remediation costs, and natural resource damages related to historic releases of mining wastes in the Coeur d'Alene River Basin. The Consent Decree also resolved all remaining obligations of Hecla Limited under the 1994 Consent Decree relating to the “Box,” a rectangular 21-square-mile site located near Kellogg, Idaho within the Bunker Hill Superfund site. The Consent Decree contains comprehensive terms of settlement, including financial terms which required that Hecla Limited pay, in the aggregate, $264.4 million to the Plaintiffs over approximately three years following the settlement. Payments of approximately $168 million, $25 million, and $15 million (and related interest) were made in October 2011, 2012, and 2013, respectively, pursuant to the terms of the Consent Decree. In addition, a payment of approximately $14.1 million in proceeds from warrants exercised during the second quarter of 2014 was made in July 2014. Finally, a payment of approximately $41.3 million, consisting primarily of proceeds from the exercise of the remaining outstanding warrants, was made in August 2014, which satisfied Hecla Limited's remaining payment obligations under the Consent Decree.

Asset Retirement Obligations

Below is a reconciliation as of December 31, 2014 and 2013 (in thousands) of the asset retirement obligations ("ARO") relating to our operating properties, which are included in our total accrued reclamation and closure costs of $57.3 million and $105.2 million, respectively, discussed above. The estimated reclamation and abandonment costs were discounted using credit adjusted, risk-free interest rates ranging from 6% to 8% from the time we incurred the obligation to the time we expect to pay the retirement obligation.

	2014			2013
Balance January 1	$	43,244		$	34,325
Changes in obligations due to changes in reclamation plans		675			—
Addition due to acquisition of the Casa Berardi unit		—			7,998
Accretion expense		3,089			1,958
Payment of reclamation obligations		(469	)		(1,037	)
Balance at December 31	$	46,539		$	43,244

In the fourth quarter of 2012, we updated our ARO at Greens Creek to reflect a preliminary revised reclamation and closure plan having estimated undiscounted costs of approximately $73.9 million, an increase from the $53.4 million in the previous plan. In late 2013, a Record of Decision was completed for proposed expansion of tailings capacity. In addition, in early 2014 we were engaged in negotiations with the U.S. Forest Service and state agencies on their proposed revisions to our previously-submitted reclamation and closure plan. In 2014, we updated our ARO at Greens Creek to reflect a revised reclamation and closure plan having estimated undiscounted costs of approximately $96.7 million, an increase from the $73.9 million in the previous plan, which was primarily the result of a new requirement to include perpetual water treatment in the closure plan. This resulted in an increase to the ARO asset and liability of $2.2 million after discounting the estimated costs to present value. As part of the revised closure plan, we increased our reclamation bonding from $30 million to approximately $68.9 million in 2014.