ESTIMATED SUPERFUND LIABILITY AS A BALANCE SHEET LINE ITEM?

It has been reported that Hecla mining will pay in the neighborhood of $262 million to settle its share for an operable unit of the Bunker Hill Mining and Chemical site in Idaho. In December 2010, Hecla reported their stockholder equity as $962.25 million. Materiality is defined by the Financial Accounting Standards Board as 4% of stockholder equity which translates in Hecla’s case to approximately $38.5 million. This superfund liability is clearly a material impact on earnings and needs to be reported somewhere in their financial statements. Even after this liability has been paid, Hecla is still not out of the woods for Superfund liability. Doing a word search for Hecla in EFIS’s Superfund Information Service (SIS) resulted in the finding that Hecla is a responsible party to the following sites: Torch Lake, California Gulch, CSMRI, Petrochem Plant, Cyprus Tohono Mine, Coeur D’Alene Union Pacific RR/Trails and the Ross Electric/Coal Creek. Further research is required to determine if the listed sites have been removed or delisted from EPA’s National Priorities List (NPL). Additional research for the previously listed sites will be required regarding allocated volumetric information to determine if Hecla has other financial liability. [Allocated volumetric percentage x (EPA’s remedial actions cost estimate) minus funds already reimbursed]. Also, was Hecla offered de minimis status (one time payer, typically disposing low volume/low toxicity of waste at a particular site). In any case, Hecla will probably be required to pay a lot more to resolve their allocated share of Superfund liability. Accountants do not like estimates. Our recent economic downturn was mostly due to off-sheet balance expenses. Guess what?.....Superfund estimated liability is an off balance sheet item. Stockholders have the right to know how much!