ShareholDer letter Dear Fellow ShareholDer “Industry demands it, technology requires it, emerging  economies depend on it. Silver has value. and hecla has a  history of generating – and delivering – that value.” Considering the challenges in front of us just over a year ago, 2012 proved to be yet another remarkable  year for Hecla — a year of accomplishments that built the confidence to continue to declare dividends; to  spend record amounts on exploration, pre-development, and capital programs; and to build a base for  production growth. That growth is expected to come from the restart of the Lucky Friday mine, advancement  of our pre-development projects, investing in companies, and potentially acquiring new mines. Our team at Greens Creek improved silver production quarter over quarter and provided 100 percent of the  company’s cash flow in 2012. Even with the Lucky Friday down last year, Hecla remained the largest primary  silver producer in the U.S. — further evidence that our strategy of buying high-quality, long-lived, low-cost  assets has paid off. Our investment at Greens Creek in 2012 was the largest capital investment in our history. We put money  toward improving production costs and made enhancements and expansions to the infrastructure that are  expected to extend the mine’s life. And our drilling results there are some of the best we’ve seen in the 12  years that I’ve been with Hecla.  At the Lucky Friday, we not only completed rehabilitation work on the Silver Shaft and on other parts of  the mine, but also chose to make a number of improvements to our procedures, approaches, and oversight  while the mine was down, including the development and implementation of new safety initiatives. With the  restart of the Lucky Friday in February 2013 came the resumption of work on the $200 million #4 Shaft project,  designed to access higher-grade ores at deeper levels. It’s the single largest capital project in Hecla’s history.  We’re already two years into the project, which is expected to help elevate annual production levels from three  to five million ounces of silver in the next four years, giving Lucky Friday the potential to operate for decades  to come.  In addition to our operating properties, we saw further advancement of our pre-development projects in  Colorado (San Juan Silver) and Mexico (San Sebastian). At San Juan Silver, we have begun construction of a  decline that will, by year end, allow us to access the ore body for drilling, metallurgical testing, and the  gathering of environmental data. At San Sebastian, the discovery of the Middle Vein mineralization, along  with further definition of the Andrea vein mineralization, is a very exciting development that substantially  improves the project. The progress we are making is encouraging, in that we believe that one or both could  move into production within five years. Hecla believes this is a good time to acquire assets. We bought interests in three Canadian-based silver/ gold resource exploration companies: Dolly Varden Silver Corporation, Canamex Resources Corp., and Brixton  Metals Corporation. We purchased the Monte Cristo gold property in Nevada. And, as of this writing, we have  an agreement with Aurizon Mines to acquire that company, with its flagship Casa Berardi mine in Quebec. Our proposed acquisition of Aurizon comes as the result of discussions with the company that started back  in 2006. We were not successful at that time, but we maintained interest and contact, so that when Aurizon  was faced with a hostile takeover, they called us to enter into a friendly transaction. We believe Aurizon’s  operating mine has some of the same characteristics as the Lucky Friday and Greens Creek: underground, long  mine life, large land package with exploration potential, a mining-friendly jurisdiction, and excellent miners  and operators. We hope this transaction closes before our annual meeting in May. [HL] 1 Phillips S. Baker, Jr. president and chief executive officer