When you're 120 years old, I suppose you're bound to have a few skeletons in your closet.

Hecla Mining (NYSE: HL) has been pulling silver from the earth since 1891. Although mining will certainly never become a low-impact endeavor, thankfully the industry's best environmental practices have come a long way over the years. Unfortunately for Hecla and its shareholders, though, some of those forgotten methods have left a rather unforgettable legacy.

Hecla delayed its fourth-quarter earnings release in order to report on the progress of ongoing efforts to settle litigation brought by the Coeur d'Alene Indian Tribe and the federal government during the 1990s. The issue stems from the practices of multiple mining companies in Idaho's Coeur d'Alene River Basin prior to 1968, when some 100 million tons of waste rock carrying harmful heavy metals was reportedly introduced into the region's river system. Coeur d'Alene Mines (NYSE: CDE), for its part, settled its own liability in this case way back in 2001. With the federal government's remediation efforts expected to carry a final price tag above $2.2 billion, Hecla seeks to settle its share of the liability for $262 million.

The resulting accrual of $193.2 million for Hecla -- beyond its previously estimated liability -- polluted Hecla's quarterly result, converting a laudable operating performance into a deeply disappointing $13.1 million net loss! Now, rather than hailing the miner's impressive cash cost of negative $0.14 per ounce of silver produced -- still trailing only Silvercorp Metals (NYSE: SVM) among the industry's lowest-cost producers -- shareholders are instead left to consider the effect of a $262 million outlay upon this company's ability to fund growth in the near to medium term.

Although seemingly much smaller in scale by comparison, a close inspection of the company's filings will reveal that Hecla may face additional environmental liabilities. For example, Burlington Northern Santa Fe, the railroad acquired by Berkshire Hathaway (NYSE: BRK-B) (NYSE: BRK-A), is seeking compensation for clean-up costs for a historical mine site on the grounds of a BNSF rail yard. Although the company claims no liability, the Environmental Protection Agency is apparently scrutinizing two additional Superfund sites in South Dakota and Colorado, where a company that Hecla acquired in 1991 had previously operated.

While it's true that Hecla's cash balance of $283.6 million (with zero debt) provides an important cushion from the impact of this and potential future liabilities, this sizable hit does present a setback to Hecla's perceived ability to capitalize on strategic growth opportunities that may present themselves. With silver reaching new heights, and prime acquisition targets such as Endeavour Silver (AMEX: EXK) and Alexco Resource (AMEX: AXU) strutting their silver stuff, Hecla essentially now enters this crucial period of the precious metals bull market with one hand tied behind its back. I remain a Hecla shareholder, though my enthusiasm has been materially diminished.