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79% of our current proven and probable ore reserve tonnages, while the remaining 21% of our reserves are contained in various intermediate veins having lower silver grades than 30-vein. While the veins share many characteristics with the Lucky Friday vein, the Gold Hunter area possesses some mineralogical and rock mechanics differences that make it more favorable to mine at this time. On November 6, 2008, we, through Silver Hunter, completed the acquisition of substantially all of the assets of Independence Lead Mines Company, which held an interest in the Gold Hunter property. The acquisition included all future interests or royalty obligations to Independence and the mining claims pertaining to the operating agreement with Hecla Limited that was assigned to Silver Hunter. 

 The principal mining method at the Lucky Friday unit is ramp access, cut and fill. This method utilizes rubber-tired equipment to access the veins through ramps developed outside of the ore body. Once a cut is taken along the strike of the vein, it is backfilled with cemented tailings and the next cut is accessed, either above or below, from the ramp system. 

 Ore at the Lucky Friday is processed using a conventional lead/zinc flotation flow sheet, with process control guided by a real-time on-line analyzer. Run of mine ore is crushed in a conventional three stage crushing plant consisting of a primary jaw crusher, and a secondary crushing circuit, and tertiary cone crushing stage. Crushed ore is ground in a ball mill, and the ground slurry reports to the lead flotation circuit. The lead circuit tailings report to the zinc flotation circuit. Lead and zinc concentrates are thickened and filtered, and final concentrate products are shipped to smelters for final processing. Current processing capacity of the Lucky Friday facility is approximately 1,000 tons per day. As discussed further below, production at Lucky Friday was temporarily suspended during 2012. In 2011, ore was processed at an average rate of approximately 905 tons per day. During 2011, mill recovery totaled approximately 93% silver, 93% lead and 87% zinc. All silver-lead and zinc concentrate production during 2011 was shipped to Teck Cominco Limited’s smelter in Trail, British Columbia, Canada. 

 Underground exploration activities were suspended at the Lucky Friday unit during 2012 as rehabilitation of the Silver Shaft was completed (discussed below). During 2012 all the reserves models were converted from 2D to 3D to allow better representation of the ore zones and allow improved mining stope designs. In-fill drilling in 2013 from 6800 to 7300 Levels is expected to allow for the potential addition of reserves in the western portion of the mine. Exploration drilling has shown the pervasive continuity of mineralization at depth and encouraging results confirmed expansion to the east. In 2013, drilling is expected to evaluate areas to the east from 6400 to 7200 Levels. Surface exploration in the Silver Valley, near the Lucky Friday mine, focused in the Star-Morning area but also evaluated the Noonday, Moffitt, You Like and Tamarack veins. Additional surface exploration drilling is planned for 2013. 

Based on current estimates of reserves, mineralized material, and other resources, the currently expected mine life at the Lucky Friday is approximately 26 years. Information with respect to the Lucky Friday unit’s production, average cost per ounce of silver produced and proven and probable ore reserves for the past three years is set forth in the table below. 

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