Hecla Mining Company Notice of 2013 Annual Meeting and Proxy Statement      

We are asking shareholders to ratify the selection of BDO USA, LLP, as our independent registered public accountant for 2013. The table contains summary information with respect to BDO USA, LLP’s fees for services provided in 2012 and 2011.

We achieved the following business and financial results for 2012:

• Produced 6.4 million ounces of silver;
• Operating cash flow of $69 million;
• Cash and cash equivalents of $191 million at December 31, 2012;
• Year-end silver reserve levels increased for the seventh consecutive year to the highest in Company history, with silver reserves up 2% to 150 million ounces;
• Mineralized material increased by 7% to 22.4 million tons averaging 5.7 ounces of silver per ton, and other resources increased 37% to 23.4 million tons averaging 7.4 ounces of silver per ton;
• Gold mineralized material increased fourfold to 1.7 million tons averaging 0.07 ounces of gold per ton, and other resources increased 75% to 13.5 million tons averaging 0.05 ounces of gold per ton;
• Exploration programs in 2012 identified new highly prospective targets in addition to increasing resources at each of the Company’s pre-development and exploration projects;

• Completed cleaning and enhancing the Lucky Friday Silver Shaft; and
• Paid common stock dividends totaling $17.1 million, or $0.06 per share.

Our production and cash flow in 2012 came exclusively from our Greens Creek mine. This was the result of the halt in production at our Lucky Friday mine through 2012. As a result of the halt in production, most of 2012 was spent rehabilitating and enhancing the Silver Shaft and ramps and drifts throughout the mine. In addition, several other capital projects and training initiatives were undertaken at the mine in an effort to use the time during which production was halted to enhance and improve the overall mine. Production at the mine resumed in February 2013, and all mine employees have now been recalled to work and have received extensive safety training.

The following is a summary of changes in compensation and performance results and corresponding compensation plan payments for 2012, as approved by the Compensation Committee. Further details are provided in the “2012 Compensation” section of the Compensation Discussion and Analysis beginning on page 48.

• Base Salary. We adjusted base salaries following a comprehensive review by Mercer (US) Inc., our independent compensation consultant, of base salaries in our comparator group. The base salaries of the named executive officers were generally below the 25^th percentile of the peers and between the 25^th percentile and median of the survey data.
  Based on the review, the Compensation Committee recommended, and the Board of Directors approved, salary increases, placing the named executive officers at approximately the 25^th percentile.
   
• Annual Incentive Plan. Aggregate Company performance for 2012 was judged by the Compensation Committee to be 110% of target based on the measures stated on page 49.
   
• 2010-2012 Long-term Incentive Plan. Only two of the four key performance elements (e.g., resource growth, cash contribution, production growth and #4 Shaft completion) were met in 2012. The aggregate

three-year performance for resource growth was 780% of target, and the three-year performance for cash contribution was 116% of target. Due to the Lucky Friday mine being shut down in 2012, work on the #4 Shaft was suspended and therefore did not result in any payout under the matrix. The Company was unable to achieve the production growth as well because of the Lucky Friday mine shutdown, and therefore did not result in any payout under the matrix. Since only two elements were met (resource growth and cash contribution), each named executive officer was awarded $100 per unit. See “2010-2012 Performance Unit Valuation” tables on page 52.
 
• Restricted Stock Units. Awarded to our named executive officers in three equal amounts with vesting periods of one, two and three years, respectively.
   
• Performance-based Shares. Awarded performance-based shares to the Chief Executive Officer, which are based on a three-year Total Shareholder Return. See “Performance-based Shares” on page 53 for further discussion of the three-year Total Shareholder Return.

We believe that the portion of at-risk, performance-based compensation should comprise a significant portion of executive pay. Characteristics of our executive compensation program that support this philosophy include:

• At-risk Pay. Short- and long-term incentives made up 81% of 2012 total target compensation for our Chief Executive Officer, and 71% for the other named executive officers (as noted in the charts below) with long-term and equity compensation representing a significant portion of total pay.

• Long-term Compensation. Overall, approximately 57% of targeted compensation for our named executive officers is based on the long-term financial and other key performance metrics, as well as our stock price performance.
   
• Base Salary. Our named executive officers base salary is targeted for the 25^th percentile of our peers, or below average, and the only way our named executive officers can receive average (50^th percentile) or above average (75^th percentile) total compensation is through our at-risk and performance-based compensation programs (short- and long-term incentive plans, as well as equity awards).

Last year, we received an 87% vote in favor of our named executive officer compensation. This result indicates support for our executive compensation program. Nevertheless, the Compensation Committee continues to review our executive compensation structure to increase its effectiveness and further align with shareholder interests. For example, over the past year, the Compensation Committee made the following changes to our executive compensation program:

• Implemented share ownership guidelines for executive officers, including the named executive officers and directors;

• Adopted a compensation recoupment “clawback” policy;
• Revised the Company’s comparator group to improve industry representation and include companies more relevant in size;
• Reviewed the Long-term Incentive Plan structure and measures for potential adjustments in 2013. Based on the review, the Compensation Committee changed the “resource” growth performance metric to a “reserve” growth performance metric for the 2013–2015 Long-term Incentive Plan;

• Awarded restricted stock units in 2012 with a three- year vesting period, in place of a shorter vesting period or awarding stock options; and

• Added a three-year Total Shareholder Return performance-based award for the Chief Executive Officer.

Set forth below is the 2012 compensation for each named executive officer as determined under Securities and Exchange Commission (“SEC”) rules. Total compensation, as reported in the Summary Compensation Table and calculated under SEC rules, includes several items that are driven by accounting and actuarial assumptions. Accordingly, it is not necessarily reflective of the compensation our named executive officers actually realized in 2012. To supplement that disclosure we have

added the “W-2 Realized Comp.” column to the right of the table below to compare our named executive officers 2012 compensation as determined under SEC rules with W-2 income for 2012, which is the compensation our named executive officers actually received in 2012. For more information on total compensation as calculated under SEC rules, see the narrative and footnotes accompanying the Summary Compensation Table for 2012 on page 58.

This Proxy Statement and the accompanying Annual Report are available at: http://www.hecla-mining.com

This Proxy Statement is being furnished by the Board of Directors (“Board”) of Hecla Mining Company, a Delaware corporation (“we,” “our,” “us,” “Hecla,” or the “Company”), to holders of shares of Hecla’s common stock, par value $0.25 per share, in connection with the soliciting of proxies to be voted at our Annual Meeting of Shareholders to be held on Wednesday, May 15, 2013, at 2:00 p.m., Pacific Daylight Time, and any adjournment or postponement thereof (“Annual Meeting”), for the purposes set forth in the accompanying Notice of 2013 Annual Meeting of Shareholders. The Annual Meeting will be held at the Rosewood Hotel Georgia, located at 801 West Georgia Street, Vancouver, British Columbia.

If you held shares of our common stock on March 18, 2013 (the “Record Date”), you are invited to attend the Annual Meeting and vote on the proposals described in this Proxy Statement. However, you do not need to attend the Annual Meeting to vote your shares. Instead, you may complete, sign, date, and return the enclosed proxy card. You may also vote over the Internet or by telephone.

On or about April 3, 2013, we mailed to our shareholders of record as of the close of business on the Record Date, either a Notice of Internet Availability of Proxy Materials (“Notice”) containing instructions on how to access this Proxy Statement and our 2012 Annual Report (“Proxy Materials”) online, or a printed copy of these Proxy Materials.

As permitted by SEC rules, we are making these Proxy Materials available to certain shareholders electronically via the Internet. The Notice contains instructions on how to access these Proxy Materials and vote online. If you received a Notice by mail, you will not receive a printed copy of the Proxy Materials in the mail. Instead, the Notice instructs you on how to access and review all of the

important information contained in the Proxy Materials. The Notice also instructs you on how you may submit your proxy over the Internet or by telephone. If you received a Notice by mail and would like to receive a printed copy of our Proxy Materials, you should follow the instructions for requesting such materials contained in the Notice.

If you were a holder of Hecla common stock either as a “shareholder of record” or as the “beneficial owner” of shares held in street name as of the Record Date, you may vote your shares at the Annual Meeting. As of the Record Date, 285,163,224 shares of common stock were outstanding and entitled to vote at the Annual Meeting. Shares of our common stock that are held by us in our treasury are not counted as shares outstanding and will not be voted. Each shareholder has one vote for each share of common stock held as of the Record Date.

A quorum must be present in order for business to be conducted at the Annual Meeting. A quorum consists of the presence at the Annual Meeting, in person or represented by proxy, of a majority of the outstanding shares of our common stock as of the Record Date. Shares represented by proxies marked “Abstain” and “broker non-votes” are counted in determining whether a quorum is present for the transaction of business at the Annual Meeting. A “broker non-vote” occurs when a broker or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the broker or nominee does not have discretionary voting power and has not received instructions from the beneficial owner.

If, on the Record Date, your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, you are considered, with respect to those shares, the “shareholder of record.” As a shareholder of record, you may vote in person at the Annual Meeting or vote by proxy. Whether or not you plan to attend the Annual Meeting, we urge you to fill out and return the enclosed proxy card, or vote by telephone or Internet, to ensure your vote is counted.

If, on the Record Date, your shares were held in an account at a broker, bank, or other financial institution or other nominee (we will refer to those organizations

collectively as “broker”), then you are the beneficial owner of shares held in “street name” and these Proxy Materials are being forwarded to you by that broker. The broker holding your account is considered the shareholder of record for purposes of voting at the Annual Meeting. As the beneficial owner, you have the right to direct your broker on how to vote the shares in your account. As a beneficial owner, you are invited to attend the Annual Meeting. However, since you are not a shareholder of record, you may not vote your shares in person at the Annual Meeting unless you request and obtain a valid proxy from your broker giving you the legal right to vote the shares at the Annual Meeting.

THE INFORMATION SET FORTH IN THIS SECTION IS OF SIGNIFICANT IMPORTANCE TO MANY SHAREHOLDERS OF THE COMPANY, SINCE MANY SHAREHOLDERS HOLD SHARES THROUGH THEIR BROKER OR OTHER NOMINEE AND DO NOT HOLD SHARES IN THEIR OWN NAME.

Shareholders who do not hold their shares in their own name (referred to in this Proxy Statement as “beneficial shareholders” or “beneficial owner”) should note that only proxies submitted by shareholders whose names appear on the Company records as the registered holders of shares of common stock can be recognized and acted upon at our Annual Meeting. If shares of common stock are listed in an account statement provided to a shareholder by a broker, then in almost all cases those shares of common stock will not be registered in the shareholder’s name on the Company records and are most likely registered under the names of the shareholders’ broker or an agent of that broker. In the United States, the vast majority of such shares are registered under the name of Cede & Co. as

nominee for The Depository Trust Company (which acts as depository for many U.S. brokerage firms and custodian banks), and in Canada, under the name of CDS & Co. (the registration name for The Canadian Depository for Securities Limited, which acts as nominee and custodian for many Canadian brokerage firms).

Applicable regulatory policy requires brokers to seek voting instructions from beneficial shareholders in advance of shareholders’ meetings, unless a beneficial shareholder has waived the right to receive meeting materials. Every broker has its own mailing procedures and provides its own return instructions to clients, which should be carefully followed by beneficial shareholders in order to ensure that their shares of common stock are voted at our Annual Meeting. The form of proxy supplied to a beneficial shareholder by its broker (or the agent of the broker) is similar to the form of proxy provided to registered shareholders by us. However, its purpose is limited to instructing the registered shareholder (the broker or agent of the broker) how to vote on behalf of the beneficial shareholder. The majority of brokers now delegate responsibility for obtaining instructions

from clients to Broadridge Financial Solutions, Inc. (“Broadridge”) in the United States and Canada. Broadridge typically applies a special sticker to proxy forms, mails those forms to the beneficial shareholders, and the beneficial shareholders return the proxy forms to Broadridge. Broadridge then tabulates the results of all instructions received and provides appropriate instructions on the voting of shares to be represented at our Annual Meeting. A beneficial shareholder receiving a Broadridge proxy cannot use that proxy to vote shares of our common stock directly

at our Annual Meeting – the proxy must be returned to Broadridge well in advance of our Annual Meeting, in order to have the shares of common stock voted.

Alternatively, a beneficial shareholder may request in writing that his or her broker send to the beneficial shareholder a legal proxy which would enable the beneficial shareholder to attend our Annual Meeting and vote his or her shares of common stock.

The Notice containing instructions on how to access these Proxy Materials electronically cannot be used to vote your shares. The Notice does, however provide instructions on how to vote by using the Internet, telephone, or by requesting and returning a paper proxy card or voting instruction card.

If your shares are held in your name, you have the right to vote in person at the Annual Meeting. If your shares are held in a brokerage account or by another nominee, you are considered the beneficial owner of shares held in street name. Since a beneficial owner is not the shareholder of record, you may not vote these shares in person at the Annual Meeting unless you obtain a “legal proxy” from your broker or nominee that holds your shares, giving you the right to vote the shares at the Annual Meeting.

Whether you hold shares directly as a shareholder of record or beneficially in street name, you may vote without attending the Annual Meeting. You may vote by granting a proxy or, for shares held beneficially in street name, by submitting voting instructions to your broker or nominee. In most cases, you will be able to do this by using the Internet, by telephone, or by mail if you received a printed set of the Proxy Materials.

To vote by mail:

• Mark, sign and date your proxy card; and
• Return your proxy card in the enclosed postage- paid envelope.

To vote over the Internet:

• Have your proxy card or Notice available;
• Log on to the Internet and visit the website noted on your proxy card or Notice (www.proxyvote.com);
• Follow the instructions provided; and
• Do not mail your proxy card.

To vote by telephone:

• Have your proxy card available;
• Call the toll-free number listed on your proxy card (1-800-690-6903);
• Follow the recorded instructions; and
• Do not mail your proxy card.

To vote in person if you are a registered shareholder of record:

• Attend our Annual Meeting;
• Bring a valid photo identification; and
• Deliver your completed proxy card or ballot in person.

To vote in person if you hold your shares in “street name” (through a broker, financial institution or other nominee):

• Attend our Annual Meeting;
• Bring a valid photo identification; and
• Obtain from your broker, a document that allows you to vote the shares held for your benefit, attach that document to your completed proxy card or ballot and deliver it in person.

To vote your 401(k) Plan shares:

If you participate in the Hecla Mining Company Capital Accumulation Plan and hold shares of our common stock in your plan account as of the Record Date, you will receive a request for voting instructions from the plan trustee (“Vanguard”) with respect to your plan shares.

You are entitled to direct Vanguard how to vote your plan shares. If you do not provide voting instructions to Vanguard by 11:59 p.m., Eastern Daylight Time, on May 14, 2013, the Hecla shares in your plan account will be voted by Vanguard in the same proportion as the shares held by Vanguard for which voting instructions have been received from other participants in the plan.

Representatives of Broadridge will receive and tabulate proxies, act as independent Inspectors of Election, supervise the voting, decide the validity of proxies, and certify their count of all votes and ballots. Broadridge has been instructed that the vote of each shareholder must be

kept confidential and may not be disclosed (except in the event of legal proceedings or, in the event of a contested proxy solicitation, to permit the solicitation of the votes of undecided shareholders).

Under New York Stock Exchange (“NYSE”) rules, if your shares are held in “street name” and you do not indicate how you wish to vote, your broker is only permitted to exercise its discretion to vote your shares on certain “routine” matters. Proposal 1 (Election of Directors) and Proposal 2 (Approval of Executive Compensation), are not “routine” matters, whereas Proposal 3 (Ratification of Appointment of BDO USA, LLP) is a “routine” matter. Accordingly, if you do not direct your broker how to vote for a director in Proposal 1 or how to vote for Proposal 2, your broker is not permitted to exercise discretion and is not permitted to vote your shares on such matters. This is called a “broker non-vote.”

Proposal 1 - Election of Directors. For more information on director elections, see “Proposal 1 - Election of Directors” beginning on page 16. Each director will be elected by a majority of votes cast at the Annual Meeting, whether in person or by proxy. A properly executed proxy card marked “WITHHOLD” with respect to the election of directors will not be voted and will not count “FOR” the nominee or nominees for which the vote was withheld. Any shares not voted (whether by abstentions, broker non-votes or otherwise) have the same impact as a vote to withhold authority in the election of directors, and does not affect the election of directors.

You may vote “FOR” the nominees for election as directors, or you may “WITHHOLD” authority to vote for one or more of the nominees.

Proposal 2 – Approval of Named Executive Officer Compensation. For more information on approval of our executive compensation see “Proposal 2 - “Approval of Named Executive Officer Compensation” beginning on page 21. The advisory vote on executive compensation will require the affirmative vote of a majority of votes cast at the Annual Meeting, whether in person or by proxy. Abstentions or shares that are not voted are not counted as cast for this purpose. Even though your vote is advisory and therefore will not be binding on the Company, the Board’s Compensation Committee will review the voting results and take them into consideration when making future decisions regarding executive compensation.

You may vote “FOR,” “AGAINST” or “ABSTAIN” on the proposal to approve the compensation of our named executive officers.

Proposal 3 - Ratification of Appointment of BDO USA, LLP. Under the Sarbanes-Oxley Act of 2002, the Audit Committee has the sole authority to appoint the independent registered public accounting firm for the Company. However, the Board feels that it is important for

the shareholders to approve the selection of BDO USA, LLP. This proposal requires the affirmative vote of a majority of votes cast at the Annual Meeting, whether in person or by proxy. Abstentions or shares that are not voted are not counted as cast for this purpose. The appointment of our independent registered public accounting firm for calendar year 2013 is considered a “routine” matter and brokers that are not directed how to vote are permitted to vote shares held in street name for their customers on this item.

You may vote “FOR,” “AGAINST,” or “ABSTAIN” on the proposal to ratify the appointment of BDO USA, LLP, as our independent registered public accounting firm for 2013.

Discretionary voting by proxies on other matters. Aside from the election of three directors, the approval of executive compensation, and the ratification of the appointment of BDO USA, LLP, we do not know of any other proposal that may be presented at the Annual Meeting. However, if any other business is properly presented at the Annual Meeting, your proxy gives authority to Phillips S. Baker, Jr. and Michael B. White to vote on such matters at their discretion. No other proposals have been timely submitted in accordance with our Bylaws, and we are not aware of any matters other than those described in this Proxy Statement that will be acted upon at the Annual Meeting.

A “proxy” is your legal appointment of another person to vote the shares that you own in accordance with your instructions. The person you appoint to vote your shares is also called a proxy. If you designate someone as your proxy in a written document, that document also is called a proxy or a proxy card. We have designated Phillips S. Baker, Jr., our President and Chief Executive Officer, and Michael B. White, our Corporate Secretary, as proxies for the Annual Meeting.

When you sign the proxy card, you appoint Phillips S. Baker, Jr. and Michael B. White as your representatives at the Annual Meeting. As your representatives, they will vote your shares at the Annual Meeting (including any adjournment or postponement) as you have instructed them on your proxy card or, if no instruction is given, as set forth in the following paragraph. With proxy voting,

your shares will be voted whether or not you attend the Annual Meeting in person. Even if you plan to attend the Annual Meeting, it is a good idea to complete, sign and return your proxy card in advance of the Annual Meeting in case your plans change.

Properly signed and dated proxies received by us prior to or at the Annual Meeting will be voted as instructed on the proxies or, in the absence of such instruction:

If you are a shareholder of record, you may revoke your proxy and change your vote at any time before your proxy is voted at the Annual Meeting, in any of the following ways:

• By sending a written notice of revocation to our Corporate Secretary, if such notice is received prior to the vote at the Annual Meeting, at our principal executive offices:

Hecla Mining Company
Attn: Corporate Secretary
6500 N. Mineral Drive, Suite 200
Coeur d’Alene, ID 83815-9408

• By submitting a later-dated proxy to our Corporate Secretary prior to the vote at the Annual Meeting; or
• By voting in person at the Annual Meeting.

If you hold your shares in street name, you should contact your broker for information on how to revoke your voting instructions and provide new voting instructions.

If you hold your shares in the Hecla Mining Company Capital Accumulation Plan, you may revoke your previously provided voting instructions by filing with Vanguard either a written notice of revocation or a

properly executed proxy bearing a later date prior to the deadline for voting plan shares. If you hold your Hecla shares outside of the plan, you may vote those shares separately.

We will bear all costs and expenses relating to the solicitation of proxies, including the costs of preparing, assembling, printing, mailing and distributing these Proxy Materials. We have hired Broadridge to assist us in mailing these Proxy Materials. Additionally, we have retained Morrow & Co. to assist in the solicitation of votes for an estimated fee of $8,000, plus reimbursement of certain out-of-pocket expenses. Solicitations may be made personally or by mail, facsimile, telephone, or via the Internet. However, if you choose to access the Proxy

Materials over the Internet, you are responsible for any Internet access charges you may incur. Arrangements will be made with brokerage firms and other custodians, nominees and fiduciaries for forwarding solicitation materials to the beneficial owners of the shares of common stock held by such persons, and we will reimburse such brokerage firms, custodians, nominees and fiduciaries for reasonable out-of-pocket expenses incurred by them in connection with such activities.

Preliminary voting results will be announced at the Annual Meeting. We will publish final results in a Current Report on Form 8-K that we expect to file with the SEC within four business days of the Annual Meeting. After the Form 8-K is filed, you may obtain a copy by visiting the SEC’s website at www.sec.gov, visiting our website

at www.hecla-mining.com or contacting our Investor Relations Department by writing to Investor Relations Department, Hecla Mining Company, 6500 N. Mineral Dr., Suite 200, Coeur d’Alene, ID 83815 or by sending an email to hmc-info@hecla-mining.com.

Our Annual Report to Shareholders, consisting of our Form 10-K for the year ended December 31, 2012, and other information, is being made available to shareholders with this Proxy Statement. Shareholders may obtain a copy of our Annual Report for the calendar year ended December 31, 2012, without cost, by written or oral request to:

Hecla Mining Company
Attention: Jeanne DuPont
6500 N. Mineral Drive, Suite 200
Coeur d’Alene, Idaho 83815-9408
Telephone: 208-769-4100

You can also access our SEC filings, including our Annual Reports on Form 10-K, and all amendments thereto, on the SEC website at http://www.sec.gov/edgar.shtml or on our website at http://www.hecla-mining.com.

Please contact our transfer agent, at the phone number or address listed, with questions concerning stock certificates, dividend checks, transfer of ownership or other matters pertaining to your stock account.

American Stock Transfer & Trust Company
59 Maiden Lane
New York, NY 10038
800-937-5449 or 718-921-8275

Many brokerage firms, financial institutions and transfer agents have instituted “householding” procedures for beneficial owners and shareholders of record. Householding is when a single copy of our Proxy Materials is sent to a household in which two or more shareholders reside if they appear to be members of the same family. This practice is designed to reduce duplicate mailings and save significant printing and postage costs, as well as natural resources.

If you are a beneficial owner, you may have received householding information from your broker, financial institution or other nominee shareholder in the past. Please contact the shareholder of record directly if you have questions, require additional copies of our Proxy Materials, or wish to revoke your decision to household

and thereby receive multiple copies. You should also contact the shareholder of record if you wish to institute householding. These options are available to you at any time.

Shareholders of record who share an address and would like to receive a separate copy of our Proxy Materials for future annual meetings, or have questions regarding the householding process, may contact our transfer agent, American Stock Transfer & Trust Company, either by written request or by telephone at the address and telephone number listed above. By contacting American Stock Transfer & Trust Company, shareholders of record sharing an address can also request delivery of multiple copies of our Proxy Materials in the future.

If you are a shareholder of record, you may request and consent to electronic delivery of future Proxy Materials by following the instructions on your proxy card or by visiting our website at http://www.hecla-mining.com under “Investors” and selecting the “Annual Report and Proxy Material” icon and following the instructions. If your shares are held in street name, please contact your broker and ask about the availability of electronic delivery. If you select electronic delivery, we will discontinue mailing the Proxy Materials to you beginning next year and you will be sent an email message notifying you of the Internet address or addresses where you may access the Proxy Materials. Your consent to electronic delivery will remain in effect until you revoke it. If you selected electronic delivery last year, we will not mail the Proxy Materials

to you this year and you will receive an email message with the Internet address where you may access the Proxy Materials for the current year. This process is designed to expedite shareholders’ receipt of Proxy Materials, lower the cost of the Annual Meeting, and help conserve natural resources.

Shareholders may also elect to receive notice of our filings with the SEC, annual reports and news releases by email. You may sign up for this service by visiting our website at http://www.hecla-mining.com and selecting the “Email Updates” icon on our home page.

The Direct Registration System (“DRS”) is a system that allows your shares in Hecla to be held in your name in book-entry form, without having a physical certificate issued. You retain full ownership of your shares, and you have the same rights and privileges as holders of shares held in certificate form. You may request a physical certificate at any time, although it is generally easier and more efficient to maintain your shares in non-certificated form. The benefits of DRS are:

• Provides accurate, quick and cost-efficient transfers between our transfer agent and your broker/dealer;
• Ensures secure electronic transfer of your securities;
• Reduces the risk with physical certificates being processed, including turnaround delays, mail losses and risks associated with stolen, forged or counterfeit securities;
• You will receive a periodic annual statement from our transfer agent. Unlike a physical security, if you lose the statement, it is easy to get another one; and
• It is generally safer to own your shares in book-entry form because there are no certificates to be stolen, lost or destroyed. There is also no need to rent a safe-deposit box or other safe place to keep the certificates, and you do not have to send them in the mail or insure them.

You can contact our transfer agent, American Stock Transfer & Trust Company at the address and telephone number listed above for more information on DRS.

Our transfer agent also offers expanded online services through its affiliate, AST Investor Services, an online retail investor portal. It offers shareholders the ability to consolidate positions in a single account, online access to approximately 10,000 equity issuers and comprehensive investment tools. The benefits include:

• Consolidated positions in a single account;
• Buy and sell equities;
• Dividend reinvestments; and
• Provides shareholders with online access and consolidated account management, allowing more options for diversification.

For more information on this service, contact AST Investor Services at 1-888-444-0057, or visit them on the Internet at www.astinvestor.com, or through customer service at Customerservice@astinvestor.com.

Our Bylaws establish procedures governing the eligibility of nominees for election to our Board, and the proposal of business to be considered by our shareholders at an Annual Meeting of Shareholders. For nominations or other business to be properly brought before an Annual Meeting of Shareholders by a shareholder, the shareholder must have given timely notice thereof in writing to our Corporate Secretary. To be timely, a shareholder’s notice shall be delivered to our Corporate Secretary at our principal executive offices located at 6500 N. Mineral Drive, Suite 200, Coeur d’Alene, Idaho 83815-9408, not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s Annual Meeting of Shareholders; provided, however, that in the event the date of the Annual Meeting of Shareholders is advanced by more than 30 days or delayed by more than 60 days from such anniversary date, notice by the shareholder to be timely must be delivered not earlier than the 120^th day prior to such Annual Meeting of Shareholders and not later than the close of business on the later of the 90^th day prior to such Annual Meeting of Shareholders or the 10^th day following the day on which public announcement of the date of such meeting is first made. Adjournment of a meeting shall not commence a new time period for giving shareholder’s notice as described above. Such shareholder’s notice shall set forth:

The applicable time period for timely shareholder submissions pursuant to the above provisions for the 2014 Annual Meeting of Shareholders is January 15, 2014 (the 120^th day preceding the anniversary of the 2013 Annual Meeting) to February 14, 2014 (the 90^th day preceding such anniversary).

The chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made in accordance with the procedures set forth in the Bylaws and, if any proposed nomination or business is not in compliance with the Bylaws, to declare that such defective proposal shall be disregarded. The foregoing time limits also apply in determining whether notice is timely for purposes of rules adopted by the SEC relating to the exercise of discretionary voting authority.

In addition to the foregoing section, we will comply with Rule 14a-8 under the Exchange Act with respect to any shareholder proposals that meet that rule’s requirements. We will review shareholder proposals intended to be included in our Proxy Statement for the 2014 Annual Meeting of Shareholders which are received by us at our principal executive offices located at 6500 N. Mineral Drive, Suite 200, Coeur d’Alene, Idaho 83815-9408, no

later than December 4, 2013. Such proposals must be submitted in writing and should be sent to the attention of our Corporate Secretary.

You may contact the Corporate Secretary at our principal executive offices for a copy of the relevant Bylaw provisions regarding the requirements for making shareholder proposals and nominating director candidates.

General Principles and Procedures. The Corporate Governance and Directors’ Nominating Committee uses a variety of methods for identifying and evaluating nominees for director. The committee is responsible for ensuring that the composition of the Board accurately reflects the needs of our business. In the event vacancies are anticipated, or arise, the committee considers various potential candidates for director. Candidates may come to the attention of the committee through current Board members, professional search firms, shareholders or other persons. Consideration of new director nominee candidates typically involves a series of internal discussions, review of information concerning candidates and interviews with selected candidates. The committee then determines the best qualified candidates based on the established criteria and recommends those candidates to the Board for election at the next annual meeting of shareholders.

We hold the view that the continuing service of qualified incumbents promotes stability and continuity in the boardroom, contributing to the Board’s ability to work as a collective body, while giving us the benefit of familiarity and insight into our affairs that our directors have accumulated during their tenure. Accordingly, the process for identifying nominees reflects our practice of re-nominating incumbent directors who continue to satisfy the committee’s criteria for membership on the Board, who the committee believes continue to make important contributions to the Board, and who consent to continue their service on the Board.

The committee reviews annually with the Board the composition of the Board as a whole and recommends, if necessary, measures to be taken so that the Board reflects the appropriate balance of knowledge, experience, skills, expertise and diversity required for the Board as a whole and contains at least the minimum number of independent directors required by applicable laws and regulations. Board members should possess such attributes and experience as are necessary for the Board as a whole

to contain a broad range of personal characteristics, including diversity of backgrounds, management skills, mining, accounting, finance and business experience. Directors should be able to commit the requisite time for preparation and attendance at regularly scheduled Board and committee meetings, as well as be able to participate in other matters necessary to ensure good corporate governance is practiced.

In general, and as more fully outlined in our Bylaws and Corporate Governance Guidelines, in evaluating director candidates for election to our Board, the committee will: (i) consider if the candidate satisfies the minimum qualifications for director candidates as set forth in the Corporate Governance Guidelines; (ii) consider factors that are in the best interests of the Company and its shareholders, including the knowledge, experience, integrity and judgment of each candidate; (iii) consider the contribution of each candidate to the diversity of backgrounds, experience and competencies which the Board desires to have represented, with such diversity being considered among the other desirable attributes of the Board; (iv) assess the performance of an incumbent director during the preceding term; (v) consider each candidate’s ability to devote sufficient time and effort to his or her duties as a director; (vi) consider a candidate’s independence and willingness to consider all strategic proposals; (vii) consider any other criteria established by the Board and any core competencies or technical expertise necessary to manage and direct the affairs and business of the Company, including, when applicable, to enhance the ability of committees of the Board to fulfill their duties; and (viii) determine whether there exists any special, countervailing considerations against nomination of the candidate.

The committee will consider persons recommended by shareholders as nominees for election as directors. Our Bylaws provide that any shareholder who is entitled to vote for the election of directors at a meeting called for such purpose may nominate persons for election to the Board by following the procedures set forth on page 13. Shareholders who wish to submit a proposed nominee to the committee should send written notice to the Corporate Governance and Directors’ Nominating Committee Chairman, c/o Corporate Secretary, Hecla Mining Company, 6500 N. Mineral Drive, Suite 200, Coeur d’Alene, Idaho 83815-9408, within the time period set forth on page 13. The notification should set forth all information relating to the nominee that is required to be disclosed in solicitations of proxies for elections of directors pursuant to Regulation 14A under the Exchange Act, including the nominee’s written consent to being

named in the Proxy Statement as a nominee and to serving as a director if elected; the name and address of the shareholder or beneficial owner making the nomination or on whose behalf the nomination is being made; and the class and number of shares of the Company owned beneficially and of record by such shareholder or beneficial owner. The committee will consider shareholder nominees on the same terms as nominees selected by the committee.

Regardless of how a candidate is brought to the committee, qualified candidates are subjected to one or more interviews with appropriate members of the Board. Chosen candidates are extended invitations to join the Board. If a candidate accepts, he or she is formally nominated.

Our current Bylaws require the Board to have not less than five nor more than nine members. The size of the Board may be increased or decreased within that range from time-to-time by resolution approved by the affirmative vote of a majority of the Board. The current Board is composed of seven directors.

In accordance with our Certificate of Incorporation, the Board is divided into three classes. The terms of office of the directors in each class expire at different times. There are three directors whose terms will expire at the 2013 Annual Meeting: Messrs. Ted Crumley, Charles B. Stanley, and Terry V. Rogers.

At a meeting held by the Corporate Governance and Directors’ Nominating Committee in February 2013, the committee determined that the three directors whose terms are expiring - Messrs. Crumley, Stanley and Rogers - were qualified candidates and recommended to the Board that they stand for re-election at the Annual Meeting.

Subsequently, the Board designated Messrs. Crumley, Stanley and Rogers as nominees for election as directors of the Company, each for a three-year term expiring in 2016. Each of the nominees has accepted the nomination and agreed to serve as a director if elected by the Company’s shareholders.

It is intended that the proxies solicited hereby from our shareholders that do not provide voting instructions will be voted FOR the election of Ted Crumley, Charles B. Stanley, and Terry V. Rogers. The Board knows of no reason why the nominees will be unable or unwilling to accept election. However, if any nominee becomes unable or is unwilling to accept election, the Board will either reduce the number of directors to be elected or select substitute nominees submitted by the Corporate Governance and Directors’ Nominating Committee. If substitute nominees are selected, proxies that do not provide voting instructions will be voted in favor of such nominees.

Biographical information for each of the director nominees is set forth below, including the key qualifications, experience, attributes, and skills that led our Board to the conclusion that each of the director nominees should serve as a director.

Our Board includes individuals with strong backgrounds in executive leadership and management, accounting and finance, and Company and industry knowledge, and we believe that, as a group, they work effectively together in overseeing our business. We believe that our directors hold themselves to the highest standards of integrity and that they are committed to representing the long-term best interests of our shareholders.

We are asking our shareholders to indicate their support for the compensation of our named executive officers as disclosed in this Proxy Statement. This advisory vote on executive compensation proposal gives our shareholders the opportunity to express their views on the compensation of our named executive officers. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the principles, policies and practices described in the Compensation Discussion and Analysis.

The vote is advisory and therefore not binding on Hecla, the Compensation Committee or the Board. The Board and the Compensation Committee value the opinions of the Company’s shareholders and to the extent there is any significant vote against the named executive officer compensation as disclosed in this Proxy Statement, the Compensation Committee will carefully review and consider the voting results when evaluating our executive compensation program.

The guiding principles of the Company’s compensation policies and decisions include aligning each executive’s compensation with the Company’s business strategy and the interests of our shareholders and providing incentives needed to attract, motivate and retain key executives who are important to our long-term success. Our executive compensation program, composed of base salary, short-and long-term incentives, and equity awards, is intended to align the interests of our named executive officers with the long-term interests of our shareholders.

Shareholders are urged to read the Compensation Discussion and Analysis section of this Proxy Statement, starting on page 37, which discusses how our compensation design and practices reflect our compensation philosophy. The Compensation Committee and the Board believe that our compensation design and practices are effective in implementing our guiding principles.

At the 2012 Annual Meeting, our shareholders approved the compensation of our named executive officers as disclosed in the 2012 Proxy Statement, with more than 87% of the total votes cast voting in favor. The current frequency of shareholder advisory votes on executive compensation is every year.

We are asking shareholders to approve the following resolution at the 2013 Annual Meeting:

     “RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and any related material disclosed in the Proxy Statement is hereby APPROVED.”

The Board of Directors recommends that you vote “FOR” approval of the compensation of our named executive officers.

The Audit Committee has appointed BDO USA, LLP (“BDO”), to serve as our independent registered public accounting firm for 2013, subject to ratification by our shareholders. BDO has served as our independent registered public accounting firm since 2001.

Representatives of BDO are expected to be present at the Annual Meeting with the opportunity to make statements and respond to appropriate questions from shareholders present at the meeting.

Under the Sarbanes-Oxley Act of 2002, the Audit Committee has the sole authority to appoint the independent registered public accounting firm for the Company. However, we are asking our shareholders to ratify the appointment of BDO as our independent registered public accounting firm. Although ratification is not required, the Board is submitting the appointment

of BDO to our shareholders for ratification because we value our shareholders’ views on the Company’s independent registered public accounting firm, and as a matter of good corporate practice. In the event that our shareholders fail to ratify the appointment, it will be considered as a direction to the Board and to the Audit Committee to consider the appointment of a different firm. Even if the appointment is ratified, the Audit Committee in its discretion may select a different independent registered public accounting firm at any time during the year if it determines that such change would be in the best interest of the Company and our shareholders.

The Board recommends that shareholders vote “FOR” the ratification of the appointment of BDO USA, LLP, as our independent registered public accounting firm for 2013.

The Audit Committee consists of John H. Bowles (Chairman), Terry V. Rogers, and Charles B. Stanley. Each member of the committee satisfies the definition of “independent director” as established in the NYSE listing standards and SEC rules. In addition, each member of the committee is financially literate and the Board has determined that each member of the committee qualifies as an audit committee “financial expert” as defined by SEC rules.¹ In addition to Hecla, Mr. Bowles serves on the audit committee of two Canadian public companies. Mr. Rogers serves on the audit committee of one Canadian public company. Mr. Stanley does not serve on the audit committee of any other public companies.

The committee’s principal functions are to assist the Board in fulfilling its oversight responsibilities, and to specifically review: (i) the integrity of our financial statements; (ii) the independent auditor’s qualifications and independence;

(iii) the performance of our internal auditor and the independent auditor; and (iv) our compliance with laws and regulations, including disclosure controls and procedures. During 2012, the committee worked with management, our internal auditor and our independent auditor to address Sarbanes-Oxley Section 404 internal control requirements. The committee also appoints our independent auditor. The committee met six times in 2012.

The committee acts under a written charter as amended and restated effective January 1, 2007. You may obtain a copy of the charter in the “Company” section of http://www.hecla-mining.com under “Corporate Governance.”

The committee reviews our financial reporting process on behalf of the Board. Management has the primary responsibility for the financial statements, the reporting process and maintaining an effective system of internal control over financial reporting. Our independent auditors are engaged to audit and express opinions on the conformity of our financial statements to accounting principles generally accepted in the United States, and the effectiveness of our internal control over financial reporting.

The committee has reviewed and discussed the audited financial statements, together with the results of management’s assessment of the internal control over financial reporting, with management and the independent auditor. The committee has discussed with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61 (Communications with Audit Committees (SAS 61)), as amended and as adopted by the Public Company Accounting Oversight Board in Rule 3200T. In addition, the committee has received the written disclosures and the letter from the independent

auditors required by applicable requirements of the Public Company Accounting Oversight Board (PCAOB Ethics and Independence Rule 3526 (Communication with Audit Committees Concerning Independence) for independent auditor communications with audit committees concerning independence, and has discussed with the independent auditors the independent auditor’s independence. The committee meets with the internal auditor and independent auditor, with and without management present, to discuss the results of their examinations, their evaluations of our internal controls, and the overall quality of our financial reporting. The committee has considered whether the independent auditor’s provision of non-audit services to us is compatible with the auditor’s independence.

Based on the Audit Committee’s review and discussions noted above, it recommended to the Board that our audited financial statements be included in our Annual Report on Form 10-K for the calendar year ended December 31, 2012, for filing with the SEC.

The Audit Committee has appointed the firm of BDO USA, LLP (“BDO”) as our independent registered public accounting firm for 2013. Under the Sarbanes-Oxley Act of 2002, the committee has the sole authority to appoint the independent auditors for us. However, the Board feels that it is important for the shareholders to approve the selection of BDO. The Board is asking our shareholders to ratify and approve the selection of BDO as our independent registered public accounting firm for 2013. BDO has served as our independent auditor since 2001. Representatives of BDO are expected to be present at the Annual Meeting with the opportunity to make statements and respond to appropriate questions from shareholders present at the meeting.

Respectfully submitted by
The Audit Committee of the
Board of Directors

John H. Bowles, Chairman
Terry V. Rogers
Charles B. Stanley

The following table represents fees for professional audit services rendered by BDO for the audit of our annual financial statements for the years ended December 31, 2012 and December 31, 2011, and fees for other services rendered by BDO during those periods.

Audit Fees. Annual audit fees relate to services rendered in connection with the annual audit of our consolidated financial statements, quarterly reviews of financial statements included in our quarterly reports on Form 10-Q, fees related to the registration of securities with the SEC, as well as consultation on accounting standards or transactions.

Audit Related Fees. Audit related fees consisted principally of fees for audits of financial statements of employee benefit plans.

Tax Fees. Tax services consisted of fees for tax consultation and tax compliance services, tax planning and miscellaneous tax research.

All Other Fees. There were no other fees.

The Audit Committee considers whether the provision of these services is compatible with maintaining BDO’s independence, and has determined such services for calendar years 2012 and 2011 were compatible with such independence. All of the fees were pre-approved by the committee. All of the services described above were approved by the committee pursuant to paragraph (c)(7)(i)(B) of Rule 2-01 of Regulation S-X promulgated by the SEC, to the extent that rule was applicable during calendar years 2012 and 2011.

The Audit Committee is responsible for appointing, setting compensation and overseeing the work of the independent auditor. The committee has established a policy regarding pre-approval of all audit and non-audit services provided by the independent auditor. On an ongoing basis, management communicates specific projects and categories of services for which advance approval of the committee is requested. The committee reviews these requests and advises management if the committee approves the engagement of the independent

auditor for specific projects. On a periodic basis, management reports to the committee regarding the actual spending for such projects and services compared to the approved amounts. The committee may also delegate the ability to pre-approve audit and permitted non-audit services to a subcommittee consisting of one or more committee members, provided that any such pre-approvals are reported on at a subsequent committee meeting.

Our business, operations and affairs are managed under the direction of our Board. Members of our Board are kept informed of our business through discussions with our Chairman, our Chief Executive Officer and other officers, by reviewing materials provided to them, by

visiting our offices and operations and by participating in meetings of the Board and its committees. The Board is committed to good business practices, transparency in financial reporting and the highest quality of corporate governance.

Our corporate governance documents are available by accessing our website at http://www.hecla-mining.com under the tab entitled “Company” and then selecting the tab entitled “Corporate Governance.” These include:

• Corporate Governance Guidelines;
• Whistleblower Policy;
• Charters of the Audit, Compensation, Corporate Governance and Directors’ Nominating and Health, Safety, Environmental & Technical Committees of the Board;

• Code of Ethics for our Chief Executive Officer and Senior Financial Officers; and
• Code of Business Conduct and Ethics for Directors, Officers and Employees.

The information on our website is not incorporated by reference into this Proxy Statement.

Shareholders may also request a free copy of these documents from: Investor Relations, Hecla Mining Company, 6500 N. Mineral Drive, Suite 200, Coeur d’Alene, Idaho 83815-9408; (208) 769-4100.

We first adopted Corporate Governance Guidelines in May 2004. These Corporate Governance Guidelines were adopted by the Board to ensure that the Board is independent from management, that the Board

adequately performs its function as the overseer of management, and to help ensure that the interests of the Board and management align with the interests of our shareholders.

We believe that operating with honesty and integrity has earned trust from our shareholders, credibility within our community, and dedication from our employees. Our directors, officers and employees are required to abide by our Code of Business Conduct and Ethics to ensure that our business is conducted in a consistently legal and ethical manner. Our Code of Business Conduct and Ethics covers many topics, including conflicts of interest, confidentiality, fair dealing, protection, proper use of the Company’s assets, and compliance with laws, rules and regulations. In addition to the Code of Business Conduct and Ethics for directors, officers and employees, our Chief Executive Officer, Chief Financial Officer and Controller are also bound by a Code of Ethics for the Chief Executive Officer and Senior Financial Officers.

The Corporate Governance and Directors’ Nominating Committee has adopted procedures to receive, retain, and react to complaints received regarding possible violations of the Code of Business Conduct and Ethics, and to allow for the confidential and anonymous submission by employees of concerns regarding possible violations of the Code of Business Conduct and Ethics. Our employees may submit any concerns regarding apparent violations of the Code of Business Conduct and Ethics to their supervisor, our General Counsel, the Chairman of the Corporate Governance and Directors’ Nominating Committee, or through an anonymous telephone hotline.

The Audit Committee adopted a Whistleblower Policy, which encourages our employees to report to appropriate Company representatives, without fear of retaliation, certain accounting information relating to possible fraud. Our employees may submit any concerns regarding financial statement disclosures, accounting,

internal accounting controls or auditing matters to the Audit Committee, our General Counsel, or through an anonymous telephone hotline. The goal of this policy is to discourage illegal activity and business conduct that damages Hecla’s reputation, business interests, and our relationship with shareholders.

While the Board has not adopted a formal policy on diversity, the Company’s Corporate Governance Guidelines provide that, as a whole, the Board should include individuals with a diverse range of experience to give the Board depth and breadth in the mix of skills represented. The Board seeks to include an array of skills and experience in its overall composition rather

than requiring every director to possess the same skills, perspective, and interests. This guideline is implemented by seeking to identify candidates who bring diverse skill sets, backgrounds, and experiences, including ethnic and gender diversity, to the Board when director candidates are needed.

Our Corporate Governance Guidelines provide, among other things, that the Board will have a majority of directors who meet the criteria for independence required by the NYSE. In determining independence each year, the Corporate Governance and Directors’ Nominating Committee affirmatively determines whether directors have any “material relationship” with the Company. When assessing the “materiality” of a director’s relationship with the Company, the committee considers all relevant facts and circumstances, not merely from the director’s standpoint, but from that of the persons or organizations with which the director has an affiliation. The committee also reviews the frequency or regularity of services or transactions between the Company and directors, whether the services or transactions are being carried out at arm’s length in the ordinary course of business and whether the services or transactions are being provided substantially on the same terms to the Company as those prevailing at the time from unrelated parties for comparable services or transactions. Material relationships can include commercial, banking, industrial, consulting, legal, accounting, charitable and familial relationships. To guide its determination of whether a

director is independent, the Board has adopted the following NYSE listing standards:

A director will not be independent if:

• the director is, or has been, within the last three years, our employee, or an immediate family member² is, or has been within the last three years, our executive officer³;
• the director or an immediate family member has received during any twelve-month period within the last three years, more than $120,000 in direct compensation from us, other than director and committee fees and pension and other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service);
   

• the director is: (i) a current partner or employee of a firm that is our internal or external auditor; (ii) the director has an immediate family member who is a current partner of a firm that is our internal or external auditor and who personally works on the Company’s audit; or (iii) the director or an immediate family member was within the last three years a partner or employee of a firm that is our internal or external auditor and personally worked on our audit within that time;
• the director or an immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of our present executive officers at the same time serves or served on that company’s compensation committee; or
• the director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from us for property or services in an amount which, in any of the last three calendar years, exceeds the greater of $1 million or 2% of such other company’s consolidated gross revenues.

Pursuant to our Corporate Governance Guidelines, the committee undertook its annual review of director independence in February 2013. During this review, the committee considered transactions and relationships between each director or any member of his immediate family and Hecla and our subsidiaries and affiliates, including relationships described below and any reported on page 32 under “Certain Relationships and Related Transactions.” The committee also examined transactions and relationships between directors or their affiliates and members of our senior management or their affiliates. As provided in the Corporate Governance Guidelines, the purpose of this review was to determine whether any such relationships or transactions were inconsistent with a determination that the director is independent.

After applying the standards set forth above and as a result of review by the committee, the Board affirmatively determined that the following directors are independent of the Company and its management under the standards set forth by the NYSE:

Messrs. Stanley and Baker, both serve as members of the board of directors of QEP Resources, Inc. The committee reviewed this relationship with the Board, and the Board made the affirmative decision that this relationship did not disqualify Mr. Stanley from being independent. Neither Mr. Baker nor Mr. Stanley serve on the Compensation Committee of either Hecla or QEP Resources, Inc.

On May 29, 2012, our subsidiary Hecla MC Subsidiary, LLC (“Hecla MC”) entered into an Asset Purchase Agreement with Crown Gold Corporation (“Seller”) and one of its subsidiaries, pursuant to which Hecla MC purchased certain unpatented mining claims and mining leases and other assets comprising Seller’s Monte Cristo property in Esmeralda County, Nevada. The transaction closed in the third quarter of 2012. Dr. Anthony P. Taylor was the Executive Chairman of Crown Gold. In order to fully ensure the independence of Hecla’s board, Dr. Taylor recused himself from all Hecla board meetings at which this transaction was discussed, and did not vote on the acquisition of the project by Hecla. The remaining Board members made the affirmative decision that this relationship did not disqualify Dr. Taylor from being independent.

Mr. Baker is our President and Chief Executive Officer. As such, he cannot be deemed independent under the NYSE listing standards.

Directors are expected to immediately inform the Board of any material change in their circumstances or relationships that may impact their independence.

Currently, the positions of Chief Executive Officer and Chairman of the Board are held by separate persons. The Board believes this structure is optimal for the Company at this time because it allows the Chief Executive Officer to focus on leading the Company’s business and operations, and the Chairman to serve as a sounding board and advisor to the Chief Executive Officer and to lead the activities of the Board. The Board has also determined that having a non-management

director serve as Chairman of the Board is in the best interest of shareholders. This structure ensures a greater role for the independent directors in the oversight of the Company and it enhances the Board’s independence and, we believe, senior management’s accountability to the Board. Mr. Crumley is our Chairman of the Board and lead independent director. He chairs meetings of the Board, as well as the executive sessions with independent members of the Board. His duties include chairing annual

meetings of shareholders, overseeing the preparation of agendas for Board meetings, preparing for executive sessions of the Board and providing feedback to the Chief Executive Officer, staying current on developments to determine when it may be appropriate to alert the Board to significant pending developments, serving as a liaison between independent directors and the Chief Executive Officer with respect to sensitive issues, and other matters. Executive sessions of non-management directors are included on the agenda for every regularly scheduled Board and committee meeting and during 2012,

executive sessions were held at each regularly scheduled Board meeting. The executive sessions are chaired by the Chairman of the Board. Our non-management directors meet in executive sessions without management present, unless the non-management directors request their attendance.

For the foregoing reasons we have determined that our leadership structure is appropriate in the context of our specific circumstances.

Each year the Board conducts a self-evaluation of its performance and effectiveness. As part of this process, each director completes an evaluation form on specific aspects of the Board’s role, organization and meetings. The collective comments are then presented by the chairman of the Corporate Governance and Directors’ Nominating

Committee to the whole Board. As part of the evaluation, the Board assesses the progress in the areas targeted for improvement a year earlier, and develops actions to take to enhance the Board’s effectiveness over the next year. Additionally, each committee conducts an annual self-evaluation of its performance through a similar process.

The Compensation Committee of the Board, the Chief Executive Officer, and the Director of Human Resources maintain an ongoing focus on executive development and succession planning to prepare the Company for future events. In addition to preparing for the Chief Executive Officer’s succession, the succession planning process includes all executive officer positions. A comprehensive

review of executive talent determines participants’ readiness to take on additional leadership roles and identifies developmental and coaching opportunities needed to prepare them for greater responsibilities. The Chief Executive Officer and Director of Human Resources make a formal succession planning presentation to the Board annually.

Our management is responsible for identifying and reviewing risks facing the Company, including, without limitation, strategic, operational, financial and regulatory risks, and meets regularly as part of such responsibility to review and discuss the Company’s risk exposure. The Board does not have a standing risk management committee, but rather administers this oversight function directly through the Board as a whole, as well as through various standing committees of the Board that address risks inherent in their respective areas of oversight. In particular, the Board is responsible for monitoring and assessing strategic risk exposure. The Board and its committees periodically receive risk management updates through business reports from management provided at meetings of the Board or its committees throughout the year. Following consideration of the information provided by management, the Board provides feedback and

makes recommendations, as needed, to help minimize the Company’s risk exposure. We also believe that our leadership structure and the use of executive sessions as described above aids the Board in risk oversight.

The Audit Committee is responsible for considering and discussing major financial risk exposures and the steps management has taken to monitor and control these exposures. The committee regularly reviews and monitors compliance with securities and financial regulations, in addition to overseeing the audit work performed on behalf of the Company in the area of internal audit for compliance with the Sarbanes-Oxley Act. The committee meets at least quarterly to review the major financial risk exposures in connection with various matters, including the filing of quarterly reports with the SEC.

The Directors’ Nominating and Corporate Governance Committee monitors the effectiveness of the Company’s corporate governance guidelines.

The Compensation Committee assesses and monitors whether any of the Company’s compensation policies and programs have the potential to encourage excessive risk-taking.

To the extent any risks identified by each standing committee of the Board are material or otherwise merit

discussion by the whole Board, the respective committee chairman will raise risks at the next scheduled meeting of the Board.

For the foregoing reasons, we have determined that our risk oversight is appropriate in the context of our specific circumstances, risk management efforts, and the Board’s administration of its oversight function.

Shareholders or other interested parties wishing to communicate with the Chairman or with the independent directors as a group may do so by delivering or mailing the communication in writing to: Chairman of the Board, c/o Corporate Secretary, Hecla Mining Company, 6500 N. Mineral Drive, Suite 200, Coeur d’Alene, Idaho 83815-9408. Concerns relating to accounting, internal controls or auditing matters are immediately brought to the attention of our internal auditor and handled in

accordance with procedures established by the Audit Committee with respect to such matters. From time-to-time, the Board may change the process in which shareholders may communicate with the Board or its members. Please refer to our website at http://www.hecla-mining.com under the tab entitled “Company” and then select the tab entitled “Corporate Governance” for any changes in this process.

In an effort to more closely align the Company’s non-management directors’ financial interests with those of the shareholders, the Board has established stock ownership guidelines for non-management directors. Under these guidelines, the Company’s non-management directors are expected to own common stock valued at a minimum of three times their annual cash retainer. Non-management directors are expected to meet or exceed these guidelines within five years of joining the Board. As of the end of 2012, each non-management director’s stock ownership met these guidelines.

Similarly, the Company has established stock ownership guidelines for the Company’s senior management. The guidelines for the Chief Executive Officer are six times

base salary. The guidelines for all other executive officers are two times base salary. The members of senior management subject to these guidelines are expected to meet or exceed these guidelines within five years of entering their respective positions. Unvested shares of restricted stock, restricted stock units and shares held directly are considered owned for purposes of the guidelines. Stock ownership does not include unexercised stock options. As of the end of 2012, the Chief Executive Officer’s stock ownership significantly exceeded the six times-base-salary multiple and the other named executive officers met their guidelines of two times-base-salary multiple.

It is our policy that all directors are expected, absent compelling circumstances, to prepare for, attend and participate in all Board and applicable committee meetings, and each annual meeting of shareholders. Our Board met ten times in calendar year 2012, of which four

were regularly scheduled meetings. Each member of the Board attended all Board meetings and Board committees of which he was a member in calendar year 2012. All members of the Board attended last year’s Annual Meeting of Shareholders, which was held in May 2012.

The Board has five standing committees: Audit; Compensation; Corporate Governance and Directors’ Nominating; Health, Safety, Environmental & Technical; and Executive. Information regarding these committees is provided below. With the exception of the Executive Committee, all remaining committees are composed entirely of independent directors. The charters of the Audit, Compensation, Corporate Governance and Directors’ Nominating, and Health, Safety, Environmental and Technical Committees are available on the Company’s website at http://www.hecla-mining.com under “Company” and then select “Corporate Governance.” You may also obtain copies of these charters by contacting the Company’s Investor Relations Department.

Executive Committee. The Executive Committee is empowered with the same authority as the Board in the management of our business, except for certain matters enumerated in our Bylaws or Delaware law, which are specifically reserved to the whole Board.

Audit Committee. The functions of the Audit Committee are described under the heading “Audit Committee Report” beginning on page 22. Each member of the committee satisfies the definition of “independent director” as established in the NYSE listing standards and SEC rules. In addition, each member of the committee is financially literate and the Board has determined that each member of the committee qualifies as an audit committee “financial expert” as defined by SEC rules.

Compensation Committee. Each member of the Compensation Committee is independent within the meaning of the listing standards of the NYSE. The committee’s principal functions are to: (i) recommend compensation levels and programs for the Chief Executive Officer to the independent members of the Board; (ii) recommend compensation levels and programs for all other executive officers to the full Board; and (iii) administer our stock-based plans.

The committee’s objective is to set executive compensation at levels which: (i) are fair and reasonable to the shareholders; (ii) link executive compensation to long-term and short-term interests of the shareholders; and (iii) are sufficient to attract, motivate, and retain outstanding individuals for executive positions. The executive officers’ compensation is linked to the interests of the shareholders by making a significant part of each executive officer’s potential compensation depend on the Company’s performance and the officer’s own performance. The retention of executive officers is encouraged by making a portion of the compensation package in the form of awards, which either increase in value, or only have value if the executive officer remains with the Company for specified periods of time.

Additional information on the committee’s processes and procedures for consideration of executive compensation are addressed in the “Compensation Discussion and Analysis” beginning on page 37.

Corporate Governance and Directors’ Nominating Committee. All members of the Corporate Governance and Directors’ Nominating Committee are independent within the meaning of the listing standards of the NYSE. The committee’s principal functions are to: (i) consider matters of corporate governance; (ii) periodically review our Corporate Governance Guidelines and corporate governance procedures to ensure compliance with the federal securities laws and NYSE regulations; (iii) review any director candidates, including those nominated or recommended by shareholders; (iv) identify individuals qualified to become directors consistent with criteria approved by the Board; (v) recommend to the Board the director nominees for the next annual meeting of shareholders, any special meeting of shareholders, or to fill any vacancy on the Board; (vi) review the appropriateness of the size of the Board relative to its various responsibilities; and (vii) recommend committee assignments and committee chairpersons for the standing committees for consideration by the Board.

Health, Safety, Environmental & Technical Committee. The principal functions of the Health, Safety, Environmental & Technical Committee are to review and monitor: (i) health, safety and environmental policies; (ii) the implementation and effectiveness of compliance systems; (iii) the effectiveness of health, safety and environmental policies, systems and monitoring processes; (iv) audit results and updates from management with respect to health, safety and environmental performance; (v) emerging health, safety and environmental trends in legislation and proposed regulations affecting the Company; and (vi) review the technical activities of the Company. The committee also makes recommendations to the Board concerning the advisability of proceeding with the exploration, development, acquisition or divestiture of mineral properties and/or operations.

We review all relationships and transactions with related persons to determine whether such persons have a direct or indirect material interest. Transactions with related persons are those that involve our directors, executive officers, director nominees, greater than 5% shareholders, immediate family members of these persons, or entities in which one of these persons has a direct or indirect material interest. Transactions that are reviewed as related party transactions by us are transactions that involve amounts that would exceed $120,000 (the current threshold required to be disclosed in the Proxy Statement under SEC regulations) and certain other similar transactions. Pursuant to our Code of Business Conduct and Ethics, employees and directors have a duty to report any potential conflicts of interest to the appropriate level of management or to the Corporate Governance and Directors’ Nominating Committee. We evaluate these reports along with responses to our annual director and officer questionnaires for any indication of possible related party transactions. Our legal staff is primarily responsible for the development and implementation of processes and controls to obtain information from the directors and executive officers with respect to related party transactions. If a transaction is deemed by us to be a related party transaction, the information regarding the transaction is discussed with the Board. As required under the SEC rules, transactions that are determined to be directly or indirectly material to Hecla or a related party are disclosed in our Proxy Statement.

On May 29, 2012, our subsidiary Hecla MC Subsidiary, LLC (“Hecla MC”) entered into an Asset Purchase Agreement with Crown Gold Corporation (“Seller”) and one of its subsidiaries, pursuant to which Hecla MC purchased certain unpatented mining claims and mining leases and other assets comprising Seller’s Monte Cristo property in Esmeralda County, Nevada, for $4,500,000 in cash, plus a potential additional purchase price payment of $1,000,000 if certain conditions were met. The purchase of the assets was subject to a number of conditions, including Seller obtaining shareholder and regulatory approvals, and satisfactory completion of Hecla MC’s due diligence. The transaction closed in the third quarter of 2012.

Dr. Anthony P. Taylor, a director of Hecla, was the Executive Chairman of the Seller. As a result, Hecla’s Board carefully considered this transaction before concluding that it represented a good opportunity to acquire a precious metals exploration project in Nevada. In addition, in order to fully ensure the independence of Hecla’s Board, Dr. Taylor recused himself from all Hecla Board meetings at which this transaction was discussed, and did not vote on the acquisition of the project by Hecla.

In December 2007, upon Board approval, we created the Hecla Charitable Foundation (the “Foundation”). We have made and intend to continue to make charitable contributions to the Foundation, which in turn has provided and intends to continue to provide grants to other organizations for charitable and educational purposes. Phillips S. Baker, Jr., serves as the president and as a director of the Foundation. James A. Sabala serves as vice president and as Chairman, and Dr. Dean W.A. McDonald serves as a director of the Foundation. In December 2007, our Board committed to make a contribution of 550,000 shares of our common stock to the Foundation. Since 2007, the Foundation has sold 279,860 shares of the Company. Cash contributions totaling $2.0 million and $1.5 million were made by the Company to the Foundation during 2011 and 2010, respectively. The funds from the sale of the shares and the additional cash were put into various investment accounts. The Foundation is currently operating in a self-sufficient manner. The Company gave no additional funds to the Foundation during 2012. The Foundation currently holds 270,140 shares of our common stock as of December 31, 2012. The value of those shares based on the closing price of our common stock on the NYSE on December 31, 2012 ($5.83), was $1,574,916. In 2012, the Foundation made $208,936 in donations.

In 2012, we did not make any contributions to any charitable organization in which a director served as an executive officer, which exceeded the greater of $1 million or 2% of the charitable organization’s consolidated gross revenues.

The following table shows the number and percentage of the shares of common stock beneficially owned by each current director, director nominee and current executive officer of Hecla, and by all current directors and executive officers as a group, as of March 18, 2013. On that date, all of such persons together beneficially owned an aggregate of less than one percent of the

outstanding shares of our common stock. Except as otherwise indicated, the directors, nominees and officers have sole voting and investment power with respect to the shares listed, including shares which the individual has the right to acquire by exercising stock options but has not done so.

To our knowledge, as of March 18, 2013, the only “beneficial owners” (as such term is defined in Rule 13d-3 under the Exchange Act) of more than 5% of our common stock entitled to vote at the Annual Meeting are shown in the table below:

Section 16(a) of the Exchange Act requires our directors, executive officers and holders of more than 10% of our common stock to file with the SEC reports regarding their ownership and changes in their ownership of our stock. These persons are required by the SEC to furnish us with copies of all Section 16(a) forms they file.

Based solely on our review of copies of such forms, or written representations from certain reporting persons that no such forms were required, we believe that during the calendar year ended December 31, 2012, all filing requirements applicable to our officers, directors and greater than 10% owners of our common stock were complied with.

The members of the Compensation Committee are set forth in the “Compensation Committee Report.” There are no members of the Compensation Committee who were officers or employees of Hecla or any of our subsidiaries

during the fiscal year, formerly were officers of Hecla or any of our subsidiaries, or had any relationship otherwise requiring disclosure under the proxy rules promulgated by the SEC or the NYSE.

The Compensation Committee (the “committee”) of the Board is responsible for recommending to the Board the form and amount of compensation for our non-management directors. The compensation program is designed to provide pay that is competitive with directors in the Company’s peer group, which is described on page 45 of the Compensation Discussion and Analysis in this Proxy Statement. It consists of a combination of cash retainers and equity awards. The committee periodically

engages its compensation consultant to review compensation of the Company’s Board compared to the Company’s comparator group. The following discussion of compensation applies only to our non-management directors, and does not apply to Mr. Baker who, as an employee of the Company, is compensated as an executive officer and does not receive additional compensation for his service as a director.

As a result of its periodic review of Board compensation, in 2012, the committee:

• Increased the retainer for the Chairman from $50,000 to $75,000 to align with market data and the role and responsibilities of the Chairman.
• Increased the annual retainer to non-management

directors from $48,000 to $66,000. No committee fees were changed in 2012.
• Increased the equity award under the 2010 Stock Incentive Plan from $24,000 to $46,000.
• Adopted stock ownership guidelines for directors to emphasize the importance of long-term alignment with shareholders.

Each non-management director receives an annual cash retainer for his service on the Board, service as Chairman, and on Board committees. For service on Board committees: (i) each non-management member of the Audit and Compensation Committees receives an annual fee of $12,000; (ii) each non-management member of the Executive, Corporate Governance and Directors’ Nominating, and Health Safety, Environmental and Technical Committees receives an annual fee of $8,000; (iii) the committee chairman for each of the Audit and Compensation Committees receives an additional annual fee of $8,000; and (iv) the committee chairman for

each of the Health, Safety, Environmental and Technical and Corporate Governance and Directors’ Nominating Committees receives an additional annual fee of $4,000.

All of the above annual fees are paid in quarterly installments. No other attendance fees are paid to the non-management directors. The non-management directors do not receive stock options, non-equity incentive plan compensation, or any other compensation, except as described below.

In March 1995, we adopted the Hecla Mining Company Stock Plan for Nonemployee Directors, which became effective following shareholder approval on May 5, 1995. The plan was amended July 18, 2002, February 25, 2004, May 6, 2005, December 10, 2007, and May 24, 2012. The plan terminates July 17, 2017, and is subject to termination by the Board at any time. Pursuant to the plan, on May 30 of each year, each non-management director is credited with a number of shares determined by dividing $24,000 by the average closing price for Hecla’s common stock on the NYSE for the prior calendar year. Non-management directors joining the Board after May 30 of any year are credited with a pro rata number of shares based upon the date they join the Board. These shares are held in a grantor trust, the assets of which are subject to the claims of our creditors, until delivered under the terms of the plan. Delivery of the shares from the trust occurs upon the earliest of: (i) death or disability; (ii) retirement from the Board; (iii) a cessation of the director’s service for any other reason; (iv) a change-in-control of the Company (as defined in the plan); or (v) at the election of the director at any time, provided,

however, that shares must be held in the trust for at least two years prior to delivery. Subject to certain restrictions, directors may elect delivery of the shares on such date or in annual installments thereafter over 5, 10 or 15 years. The maximum number of shares of common stock, which may be credited pursuant to the plan, is 1,000,000. As of December 31, 2012, there were 622,685 ungranted shares remaining in the plan.

In February 2010, we adopted the 2010 Stock Incentive Plan for executive officers, employees, directors, and certain consultants, which was approved by shareholders in June 2010, and became effective on August 25, 2010. Pursuant to the 2010 Stock Incentive Plan, directors may be awarded grants of stock options, restricted stock units, restricted stock, or stock. In June 2012, the Compensation Committee recommended that the Board award $46,000 of additional stock to the directors as part of their compensation. The Board approved the additional award, and each of the directors received 9,914 additional shares under the 2010 Stock Incentive Plan in June 2012.

Under the Board’s stock ownership guidelines, each non-management director is required to own shares of common stock (which includes shares held under the Hecla Mining Company Stock Plan for Nonemployee Directors) valued at three times their annual cash retainer

and must comply with the guidelines within five years of joining the Board. As of December 31, 2012, each non-management director is in compliance with the stock ownership guidelines.

The Company covers directors under its overall director and officer liability insurance policies, as well as reimbursing them for travel, lodging, and meal expenses incurred in connection with their attendance at Board and committee meetings, meetings of shareholders, and for traveling to visit our operations. Directors are eligible, on the same basis as Company employees, to participate in the Company’s matching gift program, pursuant to which the Company matches contributions made to qualifying

nonprofit organizations. The aggregate annual limit per participant is $5,000. Beyond these items, no other cash compensation was paid to any non-management director.

As described more fully above, the following chart summarizes the annual cash and equity compensation for our non-management directors during 2012.

As of December 31, 2012, the total amount of shares held in trust pursuant to the terms of the Stock Plan for Nonemployee Directors, by each of the above-named directors was: Mr. Crumley, 55,055 shares; Mr. Bowles, 28,939 shares; Mr. Nethercutt, 30,354 shares; Mr. Rogers, 24,102 shares; Mr. Stanley, 24,102 shares; and Dr. Taylor, 48,516 shares.

Additional information regarding shares held by the non-management directors is included in the “Security Ownership of Certain Beneficial Owners and Management” table on page 33.

This Compensation Discussion and Analysis (“CD&A”) describes the principles and decisions underlying our executive compensation program for 2012. It also provides information regarding the manner and context in which compensation was awarded to and earned by our named executive officers.

The named executive officers (“NEOs”) who will be discussed throughout this CD&A and in the compensation tables are:

2012 Business Highlights

We achieved the following business and financial results for 2012:

• Produced 6.4 million ounces of silver;
• Operating cash flow of $69 million;
• Cash and cash equivalents of $191 million at December 31, 2012;
• Year-end silver reserve levels increased for the seventh consecutive year to the highest in Company history, with silver reserves up 2% to 150 million ounces;
• Mineralized material increased by 7% to 22.4 million tons averaging 5.7 ounces of silver per ton, and other resources increased 37% to 23.4 million tons averaging 7.4 ounces of silver per ton;
• Gold mineralized material increased fourfold to 1.7 million tons averaging 0.07 ounces of gold per ton, and other resources increased 75% to 13.5 million tons averaging 0.05 ounces of gold per ton;
• Exploration programs in 2012 identified new highly prospective targets in addition to increasing resources at each of the Company’s pre-development and exploration projects;
• Completed cleaning and enhancing the Lucky Friday Silver Shaft; and
• Paid common stock dividends totaling $17.1 million, or $0.06 per share.

Our production and cash flow in 2012 came exclusively from our Greens Creek mine. This was the result of the halt in production at our Lucky Friday mine through 2012. As a result of the halt in production, most of 2012 was spent rehabilitating and enhancing the Silver Shaft and ramps and drifts throughout the mine. In addition, several other capital projects and training initiatives were undertaken at the mine in an effort to use the time during which production was halted to enhance and improve the overall mine. Production at the mine resumed in February 2013, and all mine employees have now been recalled to work and have received extensive safety training.

Summary of Our Executive
Compensation Program for 2012

Our executive compensation program – composed of base salary, short- and long-term incentives, and equity awards – is intended to align the interests of our NEOs with the long-term interests of our shareholders. The program accomplishes this by rewarding performance that is designed, over time, to result in an increase in the value of our shareholders’ investment in Hecla. We believe that the proportion of at-risk, performance-based compensation should comprise a significant portion of executive pay. Characteristics of our program that support this philosophy include:

• At-risk Pay. Short- and long-term incentives made up 81% of 2012 total target compensation for our Chief Executive Officer (“CEO”), and 71% for the other NEOs (as noted in the charts below) with long-term and equity compensation representing a significant portion of total pay.
   
• Long-term Compensation. Overall, approximately 57% of targeted compensation for our NEOs is based on the long-term financial and other key performance metrics, as well as stock price performance of Hecla.
   
• Base Salary. Our NEOs base salary is targeted for the 25^th percentile of our peers, or below average, and the only way our NEOs can receive average (50^th percentile) or above average (75^th percentile) total compensation is through our at-risk and performance-based compensation programs (short- and long-term incentive plans, as well as equity awards).

Although strongly weighted towards performance, the design of our program is intended to mitigate excessive risk taking by executives. We believe the mix and structure of compensation as described in this CD&A strike an appropriate balance to promote sustained performance without motivating or rewarding excessive risk.

In 2012, the operations prioritized mine maintenance and regulatory compliance over production at Greens Creek, and also sought to take advantage of the halt in production at the Lucky Friday mine to upgrade

the operation and prepare for a strong start-up and sustainable operational improvements. Enhancements to safety and health were achieved both at the Lucky Friday mine and corporate-wide with the advancement

of the Core Safety Program and several other initiatives. The Silver Shaft rehabilitation and enhancement plan was achieved safely and effectively; employee and community support programs met critical objectives; and the Lucky Friday mine was well-positioned for start-up in early 2013. The #4 Shaft project was restarted in September 2012, well ahead of the April 2013 projection date. Significant success was achieved in filling vital roles in professional, managerial and technical ranks, adding substantial expertise in geotechnical and project engineering, safety and health, operations and exploration, and accomplishments in succession planning in general also occurred. In government and community relations, significant gains were made in improving relationships with government and regulatory officials, especially in Alaska, as well as with mining associations such as National Mining Association, Alaska Producers Association, Idaho Mining Association and Northwest Mining Association.

In addition, the Company also accomplished many qualitative goals under the AIP that enabled Hecla to help ensure regulatory compliance, improve operations, and enhanced organizational and professional competency. Considerable improvement was achieved in all areas of safety and health, including the hiring of several additional health and safety professionals, implementation of improved safety systems and procedures, advanced training and education of management and personnel at all levels, and a substantial decrease in injury rates. Hecla increased its land position, successfully resolved a Delaware derivative lawsuit and other lawsuits, and significantly advanced the pre-development projects in Mexico, Colorado and Idaho.

The committee felt prioritization of mine maintenance and regulatory compliance and other initiatives resulted in overall company performance of 110% of target (out of

a possible range of 0-200%). By exercising its discretion to measure the Company’s performance at 110% rather than a greater percentage in a year in which so many corporate performance goals were met or exceeded, the committee demonstrated that discretion, along with more formulaic elements, is an important part of our compensation program, in particular with respect to the AIP. See “2012 AIP – Analysis and Decision” on page 49 for more information on the AIP payouts.

As indicated in the table on page 39, the Company exceeded two of the four targets set under the LTIP. In May 2010, the committee approved four performance measures and weights for the 2010-2012 LTIP, which included resource growth, cash flow generation, production growth and #4 Shaft progress. Performance in the first two criteria was at the maximum while performance in the other two criteria was below the minimum because of the Lucky Friday shutdown. Resource growth (target was 351 million silver equivalent ounces) and cash contribution (target was $329 million), with each contributing half of the payout. Under the LTIP, the maximum payouts are $200 per unit awarded if 115% of the target for resource growth is achieved (paying $50 per unit); 115% of the target for cash contribution is achieved (paying $50 per unit); 115% of the target for production growth is achieved (paying $50 per unit); and if the #4 Shaft was 80% complete at the end of 2012 (paying $50 per unit). During the 2010-2012 period, the resource growth target was achieved at 780% (positioning Hecla with the largest resource base in its history), and the cash contribution target was achieved at 116% of target. This means that LTIP awards to our NEOs were $100 per unit, and that was the value paid. See “2010-2012 LTIP – Analysis and Decision” on page 51 for more information on the LTIP payouts.

Last year, we received an 87% vote in favor of our NEO compensation (“Say-on-Pay”). This result indicates support for our executive compensation program. Nevertheless, the committee continues to review our executive compensation structure to increase its effectiveness and further align with shareholder interests. For example, over the past year, the committee made the following changes to our executive compensation program:

• Implemented share ownership guidelines for executive officers, including the NEOs, and directors;
• Adopted a compensation recoupment “clawback” policy;

• Revised the Company’s comparator group to improve industry representation and include companies more relevant in size;
• Reviewed the LTIP structure and measures for potential adjustments in 2013. Based on the review, the committee changed the “resource” growth performance metric to a “reserve” growth performance metric for the 2013-2015 LTIP;
• Awarded restricted stock units in 2012 with a three- year vesting period, in place of a shorter vesting period or awarding stock options; and
• Added a three-year Total Shareholder Return performance-based award for the CEO.

The following is a summary of changes in compensation and performance results and corresponding compensation plan payments for 2012, as approved by the committee (further details are provided in the “2012 Compensation” section of this CD&A beginning on page 48):

• Base Salary. We adjusted base salaries following a comprehensive review by Mercer (US) Inc., our independent compensation consultant, of base salaries in our comparator group. The base salaries of the NEOs were generally below the 25^th percentile of the peers and between the 25^th percentile and median of the survey data (PricewaterhouseCoopers Mining Industry Salary Survey, Mercer U.S. Premium Executive Remuneration Suite (general industry) and Towers Watson Survey Report on Top Management Compensation (general industry)). Based on the review, the committee recommended, and the Board approved, salary increases placing the NEOs at approximately the 25^th percentile.
   
• Annual Incentive Plan (AIP). Aggregate Company performance for 2012 was judged by the committee to be 110% of target based on the measures stated on page 49.

• 2010-2012 Long-term Incentive Plan. Only two of the four key performance elements (e.g., resource growth, cash contribution, production growth and #4 Shaft completion) were met in 2012. The aggregate three-year performance for resource growth was 780% of target, and the three-year performance for cash contribution was 116% of target. Due to the Lucky Friday mine being shutdown in 2012, work on the #4 Shaft was suspended and therefore did not result in any payout under the matrix. The Company was unable to achieve the production growth as well because of the Lucky Friday mine shutdown, and therefore did not result in any payout under the matrix. Since only two elements were met (resource growth and cash contribution), each named executive officer was awarded $100 per unit. See “2010-2012 Performance Unit Valuation” tables on page 52.
   
• Restricted Stock Units. Awarded to NEOs in three equal amounts with vesting periods of one, two and three years, respectively.
   
• Performance-based Shares. Awarded performance-based shares to the CEO, which are based on a three-year Total Shareholder Return. See “Performance-based Shares” on page 53 for further discussion of the three-year Total Shareholder Return.

Our stock price is heavily influenced by silver, gold, lead and zinc prices, which fluctuate widely and are primarily driven by economic, political and regulatory factors that are difficult to predict and outside of the Company’s control. Since our stock price is significantly influenced by these external factors, it is a challenge for us to develop performance-based measures that allow our executives to influence our stock price. As a result, our compensation program is designed to focus management’s efforts in areas where they have the most influence on driving long-term business performance (e.g., production, costs, and resource growth) over more cyclical measures of performance that are more directly influenced by metals prices.

In addition, precious metals companies such as Hecla create shareholder value by finding, developing and mining ore. Oftentimes, this demands that these companies make substantial and sustained investments in exploration and pre-development, at the expense of current earnings. Because of the prominence of earnings in assessing the perceived value of a company, this is an additional challenge to developing an executive compensation program for a precious metals company.

Despite these challenges, we have designed an executive compensation program that utilizes a comprehensive performance-based compensation structure, ensuring an appropriate balance of operational and financial incentives based on:

• Short- and long-term performance of the Company;
• Individual performance of our executive management;
• Internal and external performance comparisons; and
• Formulaic and discretionary programs.

Our executive compensation program has not eliminated the effects of fluctuations in the price of metals on executive pay. To the contrary, to align our executives’ interests with those of shareholders, a substantial portion of total compensation is in equity in which value is realized over a number of years, both in terms of vesting schedules and any future increases in the value of our stock.

We believe the approach to managing executive compensation in the commodities industry described above aligns the incentive structure we desire with business performance elements that which, taken together, support Hecla’s goal of providing long-term performance gains for our shareholders.

Our compensation program is designed to attract, motivate, reward and retain the management talent needed to achieve our corporate objectives, and thereby increase shareholder value in a highly competitive industry. It is our policy to provide incentives to the Company’s senior management to achieve both short- and long-term goals in the form of at-risk compensation, which provides a significant portion of our executives’ total compensation. In fact, our executive compensation program is designed to have more pay-at-risk than the comparator group over time, such that increased performance generally leads to an increased level of compensation compared to the comparator group (and vice versa). We believe that such a policy, which directly aligns the financial interests of management with the financial interests of our shareholders, provides the proper incentives to attract, motivate, reward and retain high quality management. See “Oversight and Determination of the Executive Compensation Program – Market Positioning” on page 46 for more information about our approach to executive compensation in the precious metals mining industry.

To meet these compensation objectives, the committee is guided by the following principles that express the committee’s view that compensation at Hecla should be:

• Performance-based – to reward company-wide results in addition to recognizing individual performance, focusing on objectives that are directly under the control of executives;
• Long-term focused – long-term incentive compensation linked to long-term shareholder value should comprise the most significant compensation opportunity for our senior executives;
• Market-competitive – compared to mining industry

• Aligned with shareholders – provide a significant portion of incentive compensation to executives in the form of equity-based awards. Award values fluctuate based on share value thus aligning officer and shareholder interests.

Our executive compensation program has remained substantially the same for several years. We believe that our four main components of compensation – base salary, annual incentive awards, long-term incentive awards, and equity grants – together help us to achieve these objectives. We do not provide any material perquisites to our NEOs. The committee viewed the favorable vote (87%) last year by our shareholders for our executive compensation as further validation of the Company’s approach. Nevertheless, because compensation is a dynamic concept, and the market in which we compete can change, sometimes rapidly, elements of our NEO compensation program have changed since last year as described in this Proxy Statement, including under “Key Compensation Committee Actions Following Say-on-Pay Vote” on page 40.

We operate in a competitive and challenging industry. Over the past several years, the worldwide mining boom has significantly increased the demand for executives with mining-related skills and experience in the mining industry. In addition, the talent supply in the mining industry is very tight, particularly in the United States. As a result, having a compensation strategy that supports our business strategy is critical to our success.

Role of the Compensation Committee. The committee, consisting of George R. Nethercutt, Jr., Ted Crumley, Dr. Anthony P. Taylor and Terry V. Rogers, has primary responsibility for executive compensation decisions. Our CEO’s compensation is approved by the independent members of the Board based on recommendations of the committee. The committee carries out its responsibilities under a charter approved by the Board. The committee receives information from Mercer (US) Inc., its independent executive compensation consultant. The committee uses this information in making decisions and conducting its annual review of the Company’s executive compensation program.

The Chairman of the Board, with input of the committee Chairman, also leads an annual analysis by the independent directors of our CEO’s performance. The independent directors discuss the results of the evaluation during an executive session, without the CEO present, and the Board determines the CEO’s annual compensation.

The committee has a rolling agenda. Its heaviest workload occurs during the first half of the year, as decisions are made with respect to short- and long-term incentives earned for the prior year’s performance and the design, target-setting and levels of compensation to be reflected in the current year’s short- and long-term incentive plans. The committee also reviews and approves this CD&A. During the second quarter, the committee reviews materials relating to comparator group composition, competitive pay analysis and other information which forms the foundation for decisions on base salary and equity awards.

Role of Management. The committee considers input from the CEO in making determinations regarding our executive compensation program and the individual compensation of each executive officer (other than himself). As part of our annual review process, the CEO reviews the performance of each member of the executive team (other than himself), and their contribution to the overall performance of the Company. Approximately mid-year, the CEO presents recommendations to the committee regarding base salary adjustments, target annual incentive awards, stock-based grants, and long-term performance unit grants, based on a thorough analysis of relevant market compensation data comparing Hecla with an applicable comparator group within the mining industry. The CEO and senior management also make recommendations to the committee regarding our annual and long-term quantitative goals and annual qualitative goals for the executive officers (other than the CEO), as well as recommendations regarding the participation in our stock-based compensation plans and amendments to the plans, as necessary.

The committee reviews these recommendations and exercises its discretion in modifying any of the recommendations before making its recommendations to the Board.

Role of Compensation Consultant. The committee has the authority to directly retain the services of independent consultants and other experts to assist in fulfilling its responsibilities. The committee engaged the services of Mercer (US) Inc., a wholly owned subsidiary of Marsh & McLennan Companies, Inc. (“Mercer”), to review and provide recommendations concerning all of the components of the Company’s executive compensation program. Mercer performs executive compensation services solely on behalf of the committee, is engaged by and reports directly to the committee, meets separately with the committee with no members of management present, and consults with the committee chairman between meetings. As described on page 45 under “Comparator Group,” Mercer assists the committee in defining the appropriate market of the Company’s peer companies for executive compensation and practices, and in benchmarking our executive and director pay against the peer group each year. Mercer also assists the committee in benchmarking our director compensation program and practices against those of our peers.

In compliance with the SEC and NYSE requirements regarding the independence of compensation consultants, Mercer provided the committee with a letter addressing each of the following six independence related factors:

• Other services provided to us by Mercer;
• Fees paid by us to Mercer as a percentage of Mercer’s total revenue;
• Policies and procedures maintained by Mercer that are designed to prevent a conflict of interest;
• Any business or personal relationships between the individual representatives of Mercer who advised the committee and any member of the committee;
• Any shares of Company common stock owned by the individual representatives; and
• Any business or personal relationships between our executive officers and Mercer or the individual representatives.

Their responses affirm the independence of Mercer and the partners, consultants, and employees who service the committee on executive pay and governance issues.

In June 2012, Mercer performed a competitive analysis and presented its findings and recommendations to the committee. The competitive analysis provided detailed comparative data for each executive position and assessed each component of pay, including base salary, annual and long-term incentives and total target compensation, as well as the mix of compensation between these pay elements. We compared this information to our executives’ compensation by similarity of position. The committee also reviewed the Company performance and carefully evaluated each executive’s performance during the year against established goals, leadership qualities, operational performance, business responsibilities, career with the Company, current compensation arrangements and long-term potential.

The committee has established procedures that it considers adequate to ensure that Mercer’s advice to the committee remains objective and is not influenced by Hecla’s management. These procedures include: a direct reporting relationship between the Mercer consultant and the committee; a provision in the committee’s engagement letter with Mercer specifying the information and recommendations that can and cannot be shared with management; an annual update to the committee on Mercer’s financial relationship with Hecla, including a summary of the work performed for Hecla during the preceding 12 months; and written assurances from Mercer that within the Mercer organization, the Mercer consultant who performs services for Hecla has a reporting relationship determined separately from Mercer’s other lines of business and from its other work for Hecla.

The total amount of fees for executive compensation consulting services Mercer provided to the committee in 2012 was $78,385.

During 2012, Mercer or its affiliates provided Hecla with other consulting services not related to executive compensation. The total amount of fees for these additional consulting services in 2012 was $126,406. The decision to engage Mercer or its affiliates for these additional consulting services was made by management and neither the committee nor the Board approved these other services.

Comparator Group. In making compensation decisions, the committee considers the compensation of our CEO and the other NEOs relative to the compensation paid to similarly situated executives at companies we consider to be our peers. Mercer worked closely with the committee to develop a comparator group by screening public companies in our general industry (exploration and development of mineral properties and mining, processing and sale of silver and gold) and on the basis of comparable size, annual revenue and market capitalization.

The committee established our current comparator group of companies in June 2012. With the assistance of Mercer, the committee reviews the composition of the comparator group annually to ensure that companies remain relevant for comparative purposes. The 2012 comparator group used was comprised of the following companies:

In 2012, the committee did not make any deliberate changes to the peer group companies. However, two changes occurred in the peer group: Gammon Gold changed its name to AuRico Gold in June 2011, and AuRico Gold acquired Northgate Minerals in October 2011.

We believe these companies are appropriate comparators because they are in the same industry as Hecla, compete with Hecla for executive talent, have executives in positions similar to ours, and are considered by the committee to be in an acceptable revenue range compared to Hecla.

Market Positioning. For the NEOs as a group, the committee’s policy is to target base salaries to the 25^th percentile of the competitive market. Annual cash compensation (i.e., base salaries plus annual performance-based cash incentives) is targeted at the 50^th percentile (median) of the competitive market. The total compensation opportunity (including salary, annual incentive and long-term incentive pay, restricted stock units and stock options) is targeted at the 75^th percentile of the competitive market. Total compensation can exceed

the 75^th percentile if performance is assessed at better than target. This means that we provide below-market base salaries but above-market incentive pay, equity grants and total compensation. The committee has established this market positioning policy for total compensation because it wants to attract the type of executive who is motivated by a compensation program that emphasizes performance-based pay to a greater extent than the market.

The committee does not believe our compensation policies and practices create risks that are reasonably likely to have a material adverse effect on the Company. In 2012, with the assistance of Mercer, the committee assessed the Company’s compensation arrangements to determine if the programs’ provisions and operations create undesired or unintentional risk of a material nature. The committee’s determination is based on its assessment of the balance of potential risk to potential reward. Although the committee reviewed all compensation programs, it focused on the programs with variability of payout, and the ability of a participant to directly affect payout, as well as the controls on participant action and payout. Base salary and performance-based compensation are generally uniform in design and operation throughout the Company and with all levels of salaried employees. The Company’s compensation policies and practices are centrally designed and administered for base salary and annual incentive compensation, and are based on similar

performance criteria for each salaried employee. Long-term incentive and equity compensation are applicable to specific employees in executive and managerial positions as approved by the Board, with the same performance criteria applied for all eligible participants.

Based on the foregoing, we believe that our compensation policies and practices do not create inappropriate or unintended significant risk to the Company as a whole. We also believe that our incentive compensation arrangements provide incentives that: do not encourage risk-taking beyond the Company’s ability to effectively identify and manage significant risks; are comparable with effective internal controls and risk management practices of the Company; and are supported by the oversight and administration of the Compensation Committee with regard to executive compensation programs.

Mix of Compensation Components. We use the compensation components described in the table above because we believe they provide an appropriate mix of guaranteed compensation and at-risk compensation (annual performance-based incentives and long-term performance-based equity and non-equity incentives) that promotes short- and long-term performance and produces appropriate rewards. With this mix, we provide executives with an adequate base salary while motivating them to focus on the business criteria that will produce a targeted level of performance for the Company and its shareholders, and provide the executives with the opportunity to earn additional compensation through short- and long-term incentives.

We consider all pay elements and their impact on each executive’s target compensation when making determinations regarding the amount of each element. Our decisions regarding the pay mix also reflect our belief that long-term incentives provide an important motivational and retention aspect to the executive’s overall compensation package.

Finally, the compensation provided to these executives carries an at-risk element as a substantial portion of this component is comprised of time-based restricted stock units that carry risks of forfeiture and market price decline, as well as the long-term performance plan units that carry the risk of the Company not achieving its three-year period goals under the Long-term Incentive Plan.

While the amount of compensation differs among our NEOs, the compensation policies and factors affecting the amounts, as considered by the committee, are generally the same for each of our NEOs, including our CEO. In this section, we discuss the committee’s considerations with respect to each element of compensation paid in 2012.

Base Salary. Base salaries are provided to NEOs as part of a compensation package designed to recruit and retain experienced and high caliber executives in the highly competitive talent market in which we compete. Based on the market positioning policy described above, the committee manages base salaries to the 25^th percentile of the competitive market for the NEOs as a group. An individual NEO’s base salary may be set above or below the market 25^th percentile for that particular position, depending on the committee’s subjective assessment of the individual NEO’s experience, recent performance and expected future contribution, retention concerns,

and the recommendation of the Company’s CEO (other than for himself). The committee does not use any type of quantitative formula to determine the base salary level of any of the NEOs. The committee reviews NEO salaries at least annually as part of its overall competitive market assessment, as described above. Typically, the committee makes annual salary adjustments in the middle of each year for the 12-month period from July 1 to June 30.

Base Salary – Analysis and Decision. In June 2012, the committee reviewed a market analysis prepared by Mercer. The market analysis indicated that the base salary of each of our NEOs was below the 25^th percentile of the peer group and between the 25^th percentile and median of the survey data. Based on these findings, the committee increased base salary levels to be competitive with the intended market positioning. The current base salary for each NEO from July 1, 2012, through June 30, 2013, was increased as follows:

Annual Incentive Plan (“AIP”). The market analysis prepared by Mercer in June 2012, indicated that annual incentives were generally between the median and 75^th percentile of peers and at or above 75^th percentile of the survey data.

A short-term incentive opportunity is provided through our AIP which is the annual incentive component of our executive compensation program. Consistent with Hecla’s pay-for-performance philosophy, substantially all salaried employees, including our NEOs, are eligible to participate in the AIP. In December of the prior year, or February of the current year, the committee recommends to the Board a company-wide, short-term incentive pool that is available for payment to salaried employees, including the NEOs, the payment of which is based on Company performance during the upcoming year. If the Company’s performance is at target, then the target incentive is expected to be paid.

Performance Measures and Weights. Each year, the committee determines the company-wide goals for the AIP, based on its assessment of our most critical objectives for the upcoming year. For 2012, Company performance

for AIP purposes was measured based on new safety initiatives, cleanup of the Silver Shaft, and restart of the Lucky Friday mine, as well as a number of additional qualitative goals that can be grouped into broad categories such as operations, expanding exploration, departmental, resolution of legal issues, transition and succession planning issues, environmental performance, and personnel and corporate development initiatives.

In addition to Company measures, specific individual objectives are developed for each NEO (quantitative and qualitative objectives related to safety, health and environment, operations, financial, growth, production development, exploration, legal, investor relations, human capital development, and government and community relations). The specific objectives for each NEO are chosen to reflect each NEO’s individual responsibilities. While most of the objectives are subjective in nature, to the extent possible, objective and quantifiable targets are set in order to improve accountability for results.

Performance Target Setting. Our management develops proposed targets for each Company performance measure based on a variety of factors, including historical

corporate performance, internal budgets, forecasts and growth targets, market expectations and strategic objectives. The committee reviews the targets and adjusts them, as it deems appropriate, before recommending approval to the Board. The committee believes that linking annual incentive awards to pre-established goals creates a performance-based compensation strategy consistent with shareholder interests. The committee also believes that incentive compensation targets should be established to drive real and sustainable improvements in operating performance and the strategic position of the Company.

Target Opportunities. Each NEO has a target award opportunity expressed as a percentage of base salary, along with minimum and maximum award levels. The target award opportunities are determined based on market assessments and the committee’s market positioning policy, the individual NEO’s organization level, scope of responsibility and ability to impact Hecla’s overall performance, and internal equity among the NEOs. Actual awards are paid after the end of each annual performance period and can range from 0% to 200% of the target awards, based on the committee’s assessment of our actual performance and the individual NEO’s goals. Having an award maximum cap reduces the likelihood of windfalls to executives and encourages financial discipline. It is also competitive with typical comparator group practice.

For 2012, target AIP award opportunities for the NEOs were as follows:

Earned Awards. Following the end of the year, the committee reviews the Company’s actual performance and determines the extent of achievement based on actual results. However, the committee does not assign specific weights to any of the measures, nor does the committee make use of pre-established threshold-to-target and target-to-maximum performance ranges for each measure. Rather, instead of employing strict quantitative formulas, the committee reviews performance and exercises its qualitative judgment in assessing overall Company performance compared to target. From this review the committee determines the annual incentive pool available for award.

In addition, following the end of the year, the CEO and our management review the performance of the NEOs on their individual goals and determine the level of

achievement compared to target for each NEO. Most of the individual goals are subjective in nature, and require the exercise of discretion and judgment to assess performance attainment. The committee reviews these performance assessments and exercises its qualitative judgment to modify any of the assessments prior to making its recommendations to the Board regarding actual AIP payments to the NEOs.

2012 AIP – Analysis and Decision. In February 2012, the committee approved the AIP goals, which included:

• Operating, administrative and capital expenditure performance;
• Financial flexibility;
• Operating improvements;
• Resource growth;
• Clean-up work of the silver Shaft at the Lucky Friday mine;
• Improvement projects at the Lucky Friday mine;
• Hecla’s safety and health program policy and practice enhancements;
• Pre-development project advancement activities
• Succession and development
• Extension of mine life; and
• Investor relations activities.

The committee approved goals in these areas because they represent areas of emphasis in 2012.

On a quarterly basis, the committee reviewed the performance versus the AIP goals. During the course of the year, the committee saw management, in a changing regulatory environment, adjust priorities to assure regulatory compliance and ongoing production and rehabilitation activities. These adjustments resulted in lower than targeted operational and administrative performance, but avoided potential larger performance risks.

The positive performance at our Greens Creek mine and precious metals prices allowed us to achieve the milestones discussed above in spite of the halt in production at the Lucky Friday mine during all of 2012, which resulted in decreased production of silver, lead, and zinc.

Despite the halt in production at the Lucky Friday mine in 2012, Hecla still achieved high levels of performance in many areas at this mine. To get the Lucky Friday mine back into production, we removed built-up cementitious material from the Silver Shaft, the primary access way from surface at the Lucky Friday mine. In addition, we removed unused utilities, constructed a water ring to prevent ice from forming in the winter, installed a metal brattice, repaired the shaft steel, and installed a new

power and fiber optic cable, all of which should improve the shaft’s functionality and possibly improve the shaft’s hoisting capacity. Once the shaft clean-up was completed down to the 4900 level, work commenced on a haulage way bypassing the area at the 5900 level impacted by a December 2011 rock burst and on rehabilitation of other mine workings. Work on the Silver Shaft and 5900 haulage way was completed in the first quarter of 2013.

Also in 2012, we

• Generated positive cash flows from operations of $69.0 million;
• Committed a record level of capital expenditures (including non-cash lease additions) of approximately $129.9 million, including $62.2 million at Greens Creek and $56.0 million at Lucky Friday;
• Increased overall proven and probable silver reserves at December 31, 2012, compared to 2011;
• Continued our investment in other mining properties and companies through several investments and acquisitions;

• Increased our exploration and pre-development spending during the year by 58% and 130% compared to 2011 and 2010, respectively, drilling targets at each of our four land packages in Alaska, Idaho, Colorado, and Mexico, and advancing pre-development projects at the historic Equity and Bulldog mines in Creede, Colorado, the Star mine in Idaho’s Silver Valley, and the San Sebastian mine in Mexico;
• Paid common stock dividends totaling $17.1 million, or $0.06 per share; and
• Achieved the above milestones utilizing cash flows generated from operations with no external financing required, while maintaining a cash balance of $191.0 million and substantially no debt as of December 31, 2012.

Based on the assessment by the committee on the Company’s overall performance on the combination of all measures under the AIP, the committee determined Company performance to be at 110% of target (out of a possible range of 0-200%).