Hecla Reports Third Quarter 2024 Results

11/06/2024

New CEO takes reins, record silver segment revenues, deleveraging continues

COEUR D'ALENE, Idaho--(BUSINESS WIRE)-- Hecla Mining Company (NYSE:HL) ("Hecla” or the “Company") today announced third quarter 2024 financial and operating results.

THIRD QUARTER HIGHLIGHTS

Operational

  • Produced 3.6 million silver ounces and 32,280 ounces of gold.
  • Keno Hill produced 0.6 million ounces of silver, with 2.1 million ounces produced in the first nine months of the year, at an average mill throughput of 314 tons per day (”tpd”).
  • Sold 98,792 pounds of payable copper at Greens Creek.
  • 2024 guidance for silver production decreased and cost guidance increased, gold production and cost guidance affirmed.

Financial

  • Revenues of $245.1 million, second highest in Company history, 45% from silver and 32% from gold.
  • Net income applicable to common stockholders of $1.6 million or $0.00 per share; adjusted net income applicable to common stockholders of $19.7 million or $0.03 per share.1
  • Reduced total debt by $50.6 million; achieved the second highest quarterly Adjusted EBITDA, improving the net leverage ratio* to 1.8.5
  • Cash provided by operating activities of $55.0 million; strong free cash flow generation at Greens Creek and Lucky Friday.2
    • Greens Creek generated $54.1 million in cash flow from operations and $46.9 million in free cash flow.2
    • Lucky Friday generated $34.4 million in cash flow from operations and $23.2 million in free cash flow (including $14.8 million in insurance receipts).2
  • Collected the remaining $14.8 million of Lucky Friday's underground insurance claim of $50 million.
  • Consolidated silver total cost of sales of $132.7 million; cash cost and all-in sustaining cost ("AISC") per silver ounce (each after by-product credits) of $4.46 and $15.29, respectively.3,4
  • Declared silver-linked quarterly dividend of $0.01 per share, reflecting a quarterly realized silver price between $25 and $30 per ounce, for a total cash dividend of $0.01375 per common share.

* Net Leverage ratio is calculated as current debt, long-term debt and finance leases less cash to 12 month trailing adjusted EBITDA.

Exploration

  • At Keno Hill, over 9,800 feet of definition drilling was completed. Drilling continues to intersect high-grade silver mineralization over significant widths and highlights the potential for high-grade silver mineralization in the district. Highlights include:
    • Bermingham Footwall Vein: 63.8 oz/ton silver, 6.7% lead, and 6.4% zinc over 10.2 feet
      • Includes: 99.6 oz/ton silver, 10.7% lead, and 9.8% zinc over 6.4 feet
  • Flame & Moth Vein 1: 71.6 oz/ton silver, 11.6% lead, and 11.2% zinc over 14.8 feet
  • At Greens Creek, over 27,000 feet of drilling was completed, focused on resource conversion and extension of mineralization. Highlights include:
    • 200 South Zone: 74.0 oz/ton silver, 0.03 oz/ton gold, 4.7% zinc, and 2.2% lead over 33.8 feet
    • Southwest Bench: 51.4 oz/ton silver, 0.52 oz/ton gold, 9.3% zinc, and 4.9% lead over 19.0 feet

"Hecla produced 3.6 million ounces of silver in the third quarter, bringing year-to-date production to 12.3 million ounces. Lucky Friday had a strong quarter as the mill achieved the second-highest throughput in its 80-year history after a record last quarter," said Cassie Boggs, Interim President and CEO. "While Greens Creek’s silver production was lower than anticipated due to five days of unplanned mill maintenance in the third quarter, our team was able to complete the maintenance quickly and complete a portion of our fourth quarter scheduled maintenance simultaneously. Strong performance from our silver operations has generated free cash flow of $170 million year-to-date, which along with opportunistic use of our ATM program, has allowed us to substantially repay outstanding borrowings on our revolving credit facility, reducing total debt by $50.6 million.”

Boggs continued, “At Keno Hill, we have already mined more than 2.5 million ounces and produced 2.1 million ounces of silver this year, putting us on track to meet our production guidance for this year. We are prioritizing building the foundation for this operation's future to operate in Yukon successfully, which includes improving safety and environmental practices and, importantly, valuing the perspectives of the Yukon Government and the First Nation of Na-Cho Nyäk Dun, both of whom have important roles in permitting our improvements to infrastructure as well as our future operations.”

New President and CEO

Ms. Boggs continued, “What we are most excited about is welcoming our new President and CEO, Rob Krcmarov, a proven leader in the mining industry. His vision and expertise will be invaluable as we continue our journey toward growth, innovation and continuous improvement."

Mr. Krcmarov added, "Hecla has a remarkable legacy of operational excellence, innovation, and a strong commitment to responsible mining and sustainable practices. I am thrilled to be a part of this team and I look forward to contributing to the Company's continued growth and success."

FINANCIAL OVERVIEW

In the following table and throughout this release, "total cost of sales" is comprised of cost of sales and other direct production costs and depreciation, depletion and amortization, and comparisons are made to the "prior quarter" which refers to the second quarter of 2024.

In Thousands unless stated otherwise

 

3Q-2024

 

 

2Q-2024

 

 

1Q-2024

 

 

4Q-2023

 

 

3Q-2023

 

 

2Q-2023

 

 

YTD-2024

 

 

YTD-2023

 

FINANCIAL AND PRODUCTION SUMMARY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

245,085

 

 

$

245,657

 

 

$

189,528

 

 

$

160,690

 

 

$

181,906

 

 

$

178,131

 

 

$

680,270

 

 

$

559,537

 

Total cost of sales

 

$

185,799

 

 

$

194,227

 

 

$

170,368

 

 

$

153,825

 

 

$

148,429

 

 

$

140,472

 

 

$

550,394

 

 

$

453,453

 

Gross profit

 

$

59,286

 

 

$

51,430

 

 

$

19,160

 

 

$

6,865

 

 

$

33,477

 

 

$

37,659

 

 

$

129,876

 

 

$

106,084

 

Net income (loss) applicable to common stockholders

 

$

1,623

 

 

$

27,732

 

 

$

(5,891

)

 

$

(43,073

)

 

$

(22,553

)

 

$

(15,832

)

 

$

23,464

 

 

$

(41,696

)

Basic income (loss) per common share (in dollars)

 

$

0.00

 

 

$

0.04

 

 

$

(0.01

)

 

$

(0.07

)

 

$

(0.04

)

 

$

(0.03

)

 

$

0.04

 

 

$

(0.07

)

Adjusted EBITDA1

 

$

88,859

 

 

$

90,895

 

 

$

71,597

 

 

$

32,907

 

 

$

46,251

 

 

$

67,740

 

 

$

251,351

 

 

$

175,894

 

Total Debt

 

$

539,804

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

616,246

 

Net Debt to Adjusted EBITDA1

 

 

1.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1.8

 

 

 

2.2

 

Cash provided by operating activities

 

$

55,009

 

 

$

78,718

 

 

$

17,080

 

 

$

884

 

 

$

10,235

 

 

$

23,777

 

 

$

150,807

 

 

$

74,615

 

Capital Expenditures

 

$

(55,699

)

 

$

(50,420

)

 

$

(47,589

)

 

$

(62,622

)

 

$

(55,354

)

 

$

(51,468

)

 

$

(153,708

)

 

$

(161,265

)

Free Cash Flow2

 

$

(690

)

 

$

28,298

 

 

$

(30,509

)

 

$

(61,738

)

 

$

(45,119

)

 

$

(27,691

)

 

$

(2,901

)

 

$

(86,650

)

Silver ounces produced

 

 

3,645,004

 

 

 

4,458,484

 

 

 

4,192,098

 

 

 

2,935,631

 

 

 

3,533,704

 

 

 

3,832,559

 

 

 

12,295,586

 

 

 

11,407,232

 

Silver payable ounces sold

 

 

3,729,782

 

 

 

3,785,285

 

 

 

3,481,884

 

 

 

2,847,591

 

 

 

3,142,227

 

 

 

3,360,694

 

 

 

10,996,951

 

 

 

10,107,415

 

Gold ounces produced

 

 

32,280

 

 

 

37,324

 

 

 

36,592

 

 

 

37,168

 

 

 

39,269

 

 

 

35,251

 

 

 

106,196

 

 

 

114,091

 

Gold payable ounces sold

 

 

31,414

 

 

 

35,276

 

 

 

32,189

 

 

 

33,230

 

 

 

36,792

 

 

 

31,961

 

 

 

98,879

 

 

 

108,372

 

Cash Costs and AISC, each after by-product credits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Silver cash costs per ounce 3

 

$

4.46

 

 

$

2.08

 

 

$

4.78

 

 

$

4.94

 

 

$

3.31

 

 

$

3.32

 

 

$

3.71

 

 

$

2.86

 

Silver AISC per ounce 4

 

$

15.29

 

 

$

12.54

 

 

$

13.10

 

 

$

17.48

 

 

$

11.39

 

 

$

11.63

 

 

$

13.57

 

 

$

10.52

 

Gold cash costs per ounce 3

 

$

1,754

 

 

$

1,701

 

 

$

1,669

 

 

$

1,702

 

 

$

1,475

 

 

$

1,658

 

 

$

1,707

 

 

$

1,635

 

Gold AISC per ounce 4

 

$

2,059

 

 

$

1,825

 

 

$

1,899

 

 

$

1,969

 

 

$

1,695

 

 

$

2,147

 

 

$

1,923

 

 

$

2,075

 

Realized Prices

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Silver, $/ounce

 

$

29.43

 

 

$

29.77

 

 

$

24.77

 

 

$

23.47

 

 

$

23.71

 

 

$

23.67

 

 

$

28.07

 

 

$

23.28

 

Gold, $/ounce

 

$

2,522

 

 

$

2,338

 

 

$

2,094

 

 

$

1,998

 

 

$

1,908

 

 

$

1,969

 

 

$

2,317

 

 

$

1,921

 

Lead, $/pound

 

$

0.93

 

 

$

1.06

 

 

$

0.97

 

 

$

1.09

 

 

$

1.07

 

 

$

0.99

 

 

$

0.99

 

 

$

1.02

 

Zinc, $/pound

 

$

1.36

 

 

$

1.51

 

 

$

1.10

 

 

$

1.39

 

 

$

1.52

 

 

$

1.13

 

 

$

1.32

 

 

$

1.34

 

Sales in the third quarter of $245.1 million were consistent with the prior quarter as lower sales volumes of silver, gold and lead, and lower realized prices for silver, zinc, lead were offset by higher sales volumes for zinc and higher realized prices for gold. The lower sales volumes stemmed from a combination of lower production and volumes sold at Lucky Friday and Casa Berardi (due to lower grades and lower mill throughput) and lower sales volumes at Keno Hill due to lower mill throughput attributable to delays in design and construction of the dry stack tailings facility ("DSTF"), including permitting delays following the heap leach failure at Victoria Gold's Eagle Gold mine. Sales of silver and zinc concentrate inventory built up at Greens Creek in the prior quarter partially offset lower sales volumes from other operations.

Gross profit increased by 15% to $59.3 million, primarily attributable to the lower cost of sales at Keno Hill and Casa Berardi partially offset by higher cost of sales at Greens Creek due to higher volumes of metals sold.

Net income applicable to common stockholders for the quarter was $1.6 million, a $26.1 million reduction from the prior quarter, primarily because of:

  • A non-cash write down of $14.5 million, $13.9 million related to the remote vein miner. The machine was determined to be obsolete due to the success of the Underhand Closed Bench mining method at Lucky Friday and the decision by the vendor to terminate the program and exit that line of business.
  • Ramp-up and suspension costs increased by $8.1 million to $13.7 million, reflecting the lower mill throughput at Keno Hill due to delays of the DSTF described above.
  • Foreign exchange loss of $3.2 million, compared to a gain of $2.7 million in the prior quarter, due to the appreciation of the Canadian dollar against the U.S. dollar.
  • Exploration and pre-development increased by $3.9 million, due to increased activity over the summer months.
  • Income and mining tax provision increased by $2.4 million to $11.5 million reflecting higher taxable income of our US operations compared to consolidated book income.

The above items were partly offset by:

  • General and administrative costs decreased by $4.3 million primarily due to costs related to the departure of the former CEO in the prior quarter.
  • Interest expense decreased by $1.6 million reflecting a decrease in the Company's borrowing on its revolving credit facility.

Consolidated silver total cost of sales in the third quarter increased by 8% to $132.7 million, reflecting a product inventory draw down at Greens Creek. Consolidated cash costs and AISC per silver ounce, each after by-product credits, were $4.46 and $15.29 respectively and only include costs of Greens Creek and Lucky Friday for the full quarter (commercial production has not been declared at Keno Hill). The increase in cash costs was primarily due to lower silver production and by-product credits (lower production for all metals except zinc and lower realized prices for all metals except gold).3,4

Consolidated gold total cost of sales were $46.3 million, reflecting a decrease in sales at Casa Berardi. Cash costs and AISC per gold ounce, each after by-product credits, increased to $1,754 and $2,059, respectively, as lower production costs were offset by lower gold production, with AISC also impacted by higher planned capital investment in tailings construction.3,4

Adjusted EBITDA for the quarter was $88.9 million, in line with the prior quarter (which was a record).5 The net leverage ratio improved to 1.8 times from 2.3 times in the prior quarter due to a reduction in total debt of $50.6 million as the Company decreased borrowings under its revolving credit facility. Cash and cash equivalents at the end of the quarter were $22.3 million and included $13.0 million drawn on the revolving credit facility. Borrowing on the revolving credit facility decreased by $49.0 million in the quarter as the Company utilized insurance proceeds and equity issuances under the At-The-Market ("ATM") program to reduce the drawn amount. At current price levels and expected production, the Company anticipates continuing to reduce borrowings on the revolving credit facility.

Cash provided by operating activities was $55.0 million and decreased by $23.7 million from the prior quarter due to a decrease in net income adjusted for non-cash items of $13.4 million and unfavorable working capital changes of $10.3 million.

Capital investment of $55.7 million increased by $5.3 million from the prior quarter. Capital investments at the operations were as follows (i) $11.5 million at Greens Creek related to development, mill projects including replacement of tails and concentrate filter presses, definition drilling, and equipment purchases, (ii) $18.6 million at Casa Berardi, primarily related to tailings construction activities, (iii) $11.2 million at Lucky Friday primarily related to equipment purchases, pre-production drilling, and development and (iv) $14.4 million at Keno Hill, primarily related to DSTF work, equipment purchases, and capital development.

Free cash flow for the quarter was negative $0.7 million, compared to $28.3 million in the prior quarter.2 The decrease in free cash flow is primarily attributable to lower cash flow from operations and increased capital investment.

Forward Sales Contracts for Base Metals and Foreign Currency

The Company uses financially settled forward sales contracts to manage exposure to zinc and lead price changes in forecasted concentrate shipments. On September 30, 2024, the Company had contracts covering approximately 10% and 32% of the forecasted payable zinc and lead production, respectively, through 2026, at an average zinc price of $1.37 per pound and a lead price of $1.00 per pound.

The Company also manages Canadian dollar ("CAD") exposure through forward contracts. On September 30, 2024, the Company had hedged approximately 39% of forecasted Casa Berardi and Keno Hill CAD-denominated direct production costs through 2026 at an average CAD/USD rate of 1.33. The Company has also hedged approximately 15% of Casa Berardi and Keno Hill's projected CAD-denominated total capital expenditures through 2026 at 1.35.

OPERATIONS OVERVIEW

Greens Creek Mine - Alaska

Dollars are in thousands except cost per ton

 

3Q-2024

 

 

2Q-2024

 

 

1Q-2024

 

 

4Q-2023

 

 

3Q-2023

 

 

YTD-2024

 

 

YTD-2023

 

GREENS CREEK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tons of ore processed

 

 

212,863

 

 

 

225,746

 

 

 

232,188

 

 

 

220,186

 

 

 

228,978

 

 

 

670,797

 

 

 

694,610

 

Total production cost per ton

 

$

222.39

 

 

$

218.09

 

 

$

212.92

 

 

$

223.98

 

 

$

200.30

 

 

$

217.66

 

 

$

197.94

 

Ore grade milled - Silver (oz./ton)

 

 

11.2

 

 

 

12.6

 

 

 

13.3

 

 

 

12.9

 

 

 

13.1

 

 

 

12.4

 

 

 

13.4

 

Ore grade milled - Gold (oz./ton)

 

 

0.08

 

 

 

0.09

 

 

 

0.09

 

 

 

0.09

 

 

 

0.09

 

 

 

0.09

 

 

 

0.09

 

Ore grade milled - Lead (%)

 

 

2.4

 

 

 

2.5

 

 

 

2.6

 

 

 

2.8

 

 

 

2.5

 

 

 

2.5

 

 

 

2.6

 

Ore grade milled - Zinc (%)

 

 

6.6

 

 

 

6.2

 

 

 

6.3

 

 

 

6.5

 

 

 

6.5

 

 

 

6.4

 

 

 

6.3

 

Silver produced (oz.)

 

 

1,857,314

 

 

 

2,243,551

 

 

 

2,478,594

 

 

 

2,260,027

 

 

 

2,343,192

 

 

 

6,579,459

 

 

 

7,471,725

 

Gold produced (oz.)

 

 

11,746

 

 

 

14,137

 

 

 

14,588

 

 

 

14,651

 

 

 

15,010

 

 

 

40,471

 

 

 

46,245

 

Lead produced (tons)

 

 

4,165

 

 

 

4,513

 

 

 

4,834

 

 

 

4,910

 

 

 

4,740

 

 

 

13,512

 

 

 

14,668

 

Zinc produced (tons)

 

 

12,585

 

 

 

12,400

 

 

 

13,062

 

 

 

12,535

 

 

 

13,224

 

 

 

38,047

 

 

 

38,961

 

Copper produced (tons)

 

 

490

 

 

 

462

 

 

 

495

 

 

 

449

 

 

 

457

 

 

 

1,447

 

 

 

1,374

 

Sales

 

 

116,568

 

 

 

95,659

 

 

$

97,310

 

 

$

93,543

 

 

$

96,459

 

 

$

309,537

 

 

$

290,961

 

Total cost of sales

 

$

(73,597

)

 

$

(56,786

)

 

$

(69,857

)

 

$

(70,231

)

 

$

(60,322

)

 

$

(200,240

)

 

$

(189,664

)

Gross profit

 

$

42,971

 

 

$

38,873

 

 

$

27,453

 

 

$

23,312

 

 

$

36,137

 

 

$

109,297

 

 

$

101,297

 

Cash flow from operations

 

$

54,076

 

 

$

43,276

 

 

$

28,706

 

 

$

34,576

 

 

$

36,101

 

 

$

126,058

 

 

$

122,749

 

Exploration

 

$

4,325

 

 

$

2,011

 

 

$

551

 

 

$

1,324

 

 

$

4,283

 

 

$

6,887

 

 

$

6,491

 

Capital additions

 

$

(11,466

)

 

$

(11,704

)

 

$

(8,827

)

 

$

(15,996

)

 

$

(12,060

)

 

$

(31,997

)

 

$

(27,546

)

Free cash flow 2

 

$

46,935

 

 

$

33,583

 

 

$

20,430

 

 

$

19,904

 

 

$

28,324

 

 

$

100,948

 

 

$

101,694

 

Cash cost per ounce, after by-product credits 3

 

$

0.93

 

 

$

0.19

 

 

$

3.45

 

 

$

4.94

 

 

$

3.04

 

 

$

1.62

 

 

$

1.81

 

AISC per ounce, after by-product credits 4

 

$

7.04

 

 

$

5.40

 

 

$

7.16

 

 

$

12.00

 

 

$

8.18

 

 

$

6.53

 

 

$

5.67

 

Greens Creek produced 1.9 million ounces of silver, a decrease over the prior quarter, primarily due to lower grades and reduced mill throughput attributable to five days of unplanned maintenance on the Semi-Autogenous Grinding ("SAG") mill variable frequency drive (unplanned maintenance extended to two days in October). By-product metal production was lower for gold and lead due to lower mill throughput and lower grades, while zinc production was flat as higher grades offset the lower milled throughput. The mine added copper to its by-product metals as the silver concentrate now includes copper as a payable metal (copper has been produced at the mine for multiple years but previously was not a payable metal in concentrates).

Sales in the quarter were $116.6 million, a 22% increase due to higher quantities of payable metals sold (all metals) as silver and zinc concentrate inventory built up from the prior quarter was sold in the third quarter. Higher quantities of metals sold offset the lower realized prices for all metals except gold. Total cost of sales was $73.6 million, an increase of 30%, reflecting higher payable metals sold. Cash costs and AISC per silver ounce, each after by-product credits, were $0.93 and $7.04, respectively, and increased over the prior quarter as lower production costs were offset by lower silver production and lower by-product credits (lower production volumes and lower realized prices for all metals except gold).3,4

Cash flow from operations was $54.1 million, a 25% increase, primarily due to higher gross profit. Capital investments were consistent with the prior quarter. Free cash flow for the quarter was $46.9 million, an increase of 40%, attributable to higher cash flow from operations.2

Lucky Friday Mine - Idaho

Dollars are in thousands except cost per ton

 

3Q-2024

 

 

2Q-2024

 

 

1Q-2024

 

 

4Q-2023

 

 

3Q-2023

 

 

YTD-2024

 

 

YTD-2023

 

LUCKY FRIDAY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tons of ore processed

 

 

104,281

 

 

 

107,441

 

 

 

86,234

 

 

 

5,164

 

 

 

36,619

 

 

 

297,956

 

 

 

225,965

 

Total production cost per ton

 

$

260.99

 

 

$

233.99

 

 

$

233.10

 

 

$

201.42

 

 

$

191.81

 

 

$

243.18

 

 

$

223.44

 

Ore grade milled - Silver (oz./ton)

 

 

12.1

 

 

 

12.9

 

 

 

12.9

 

 

 

12.7

 

 

 

13.6

 

 

 

12.6

 

 

 

14.0

 

Ore grade milled - Lead (%)

 

 

7.9

 

 

 

8.1

 

 

 

8.2

 

 

 

8.0

 

 

 

8.6

 

 

 

8.1

 

 

 

8.9

 

Ore grade milled - Zinc (%)

 

 

3.9

 

 

 

3.6

 

 

 

3.9

 

 

 

3.5

 

 

 

3.5

 

 

 

3.8

 

 

 

4.1

 

Silver produced (oz.)

 

 

1,184,819

 

 

 

1,308,155

 

 

 

1,061,065

 

 

 

61,575

 

 

 

475,414

 

 

 

3,554,039

 

 

 

3,024,544

 

Lead produced (tons)

 

 

7,662

 

 

 

8,229

 

 

 

6,689

 

 

 

372

 

 

 

2,957

 

 

 

22,580

 

 

 

19,171

 

Zinc produced (tons)

 

 

3,528

 

 

 

3,320

 

 

 

2,851

 

 

 

134

 

 

 

1,159

 

 

 

9,699

 

 

 

7,810

 

Sales

 

$

51,072

 

 

$

59,071

 

 

$

35,340

 

 

$

3,117

 

 

$

21,409

 

 

$

145,483

 

 

$

113,167

 

Total cost of sales

 

$

(39,286

)

 

$

(37,523

)

 

$

(27,519

)

 

$

(3,117

)

 

$

(14,344

)

 

$

(104,328

)

 

$

(81,068

)

Gross profit

 

$

11,786

 

 

$

21,548

 

 

$

7,821

 

 

$

 

 

$

7,065

 

 

$

41,155

 

 

$

32,099

 

Cash flow from operations

 

$

34,374

 

 

$

44,546

 

 

$

27,112

 

 

$

(7,982

)

 

$

515

 

 

$

106,032

 

 

$

65,540

 

Capital additions

 

$

(11,178

)

 

$

(10,818

)

 

$

(14,988

)

 

$

(18,819

)

 

$

(15,494

)

 

$

(36,984

)

 

$

(46,518

)

Free cash flow 2

 

$

23,196

 

 

$

33,728

 

 

$

12,124

 

 

$

(26,801

)

 

$

(14,979

)

 

$

69,048

 

 

$

19,022

 

Cash cost per ounce, after by-product credits 3

 

$

9.98

 

 

$

5.32

 

 

$

8.85

 

 

N/A

 

 

$

4.74

 

 

$

7.86

 

 

$

5.51

 

AISC per ounce, after by-product credits 4

 

$

19.40

 

 

$

12.74

 

 

$

17.36

 

 

N/A

 

 

$

10.63

 

 

$

16.26

 

 

$

12.21

 

Lucky Friday produced 1.2 million ounces of silver, 9% lower than the prior quarter, due to 6% lower milled grades and 3% lower throughput. Mill throughput averaged 1,133 tpd, the second highest in the mine's history after a record in the prior quarter.

Sales in the third quarter were $51.1 million, 14% lower due to lower volumes of metals sold and lower realized prices. Total cost of sales increased to $39.3 million, primarily due to higher production costs attributable to higher underground mobile equipment maintenance costs and higher contractor costs. Key mill projects, including installation of new cyclones, were completed during the quarter, contributing to lower mill throughput. Cash costs and AISC per silver ounce, each after by-product credits, were $9.98 and $19.40 respectively and were higher due to higher production costs and lower by-product credits (lower production and realized prices), and lower silver production.3,4

Cash flow from operations was $34.4 million and decreased over the prior quarter due to lower gross margins realized and lower insurance proceeds of $14.8 million (prior quarter included $17.8 million in insurance proceeds). With $14.8 million in insurance proceeds received during the quarter, the Company has completed the claim after reaching the underground insurance sublimit of $50 million.

Capital investment for the quarter was $11.2 million, consistent with the prior quarter. Free cash flow for the quarter was $23.2 million, lower compared to the prior quarter primarily due to lower gross margins.2

Keno Hill - Yukon Territory

Dollars are in thousands except cost per ton

 

3Q-2024

 

 

2Q-2024

 

 

1Q-2024

 

 

4Q-2023

 

 

3Q-2023

 

 

YTD-2024

 

 

YTD-2023

 

KENO HILL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tons of ore processed

 

 

24,027

 

 

 

36,977

 

 

 

25,165

 

 

 

19,651

 

 

 

24,616

 

 

 

86,169

 

 

 

36,680

 

Ore grade milled - Silver (oz./ton)

 

 

25.7

 

 

 

25.1

 

 

 

26.3

 

 

 

31.7

 

 

 

33.0

 

 

 

25.6

 

 

 

28.2

 

Ore grade milled - Lead (%)

 

 

3.0

 

 

 

2.4

 

 

 

2.4

 

 

 

2.6

 

 

 

2.4

 

 

 

2.6

 

 

 

2.1

 

Ore grade milled - Zinc (%)

 

 

2.4

 

 

 

1.4

 

 

 

1.3

 

 

 

1.6

 

 

 

2.5

 

 

 

1.7

 

 

 

3.1

 

Silver produced (oz.)

 

 

597,293

 

 

 

900,440

 

 

 

646,312

 

 

 

608,301

 

 

 

710,012

 

 

 

2,144,045

 

 

 

894,276

 

Lead produced (tons)

 

 

670

 

 

 

845

 

 

 

576

 

 

 

481

 

 

 

327

 

 

 

2,091

 

 

 

744

 

Zinc produced (tons)

 

 

492

 

 

 

471

 

 

 

298

 

 

 

396

 

 

 

252

 

 

 

1,261

 

 

 

943

 

Sales

 

$

19,809

 

 

$

28,950

 

 

$

10,847

 

 

$

17,936

 

 

$

16,001

 

 

$

59,606

 

 

$

17,582

 

Total cost of sales

 

$

(19,809

)

 

$

(28,950

)

 

$

(10,847

)

 

$

(17,936

)

 

$

(16,001

)

 

$

(59,606

)

 

$

(17,582

)

Gross profit

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

Cash flow from operations*

 

$

(6,811

)

 

$

(465

)

 

$

(8,720

)

 

$

(1,188

)

 

$

(6,200

)

 

$

(15,996

)

 

$

(25,424

)

Exploration

 

$

2,664

 

 

$

2,019

 

 

$

498

 

 

$

1,548

 

 

$

1,653

 

 

$

5,181

 

 

$

3,129

 

Capital additions

 

$

(14,406

)

 

$

(14,533

)

 

$

(10,346

)

 

$

(12,549

)

 

$

(11,498

)

 

$

(39,285

)

 

$

(32,123

)

Free cash flow 2*

 

$

(18,553

)

 

$

(12,979

)

 

$

(18,568

)

 

$

(12,189

)

 

$

(16,045

)

 

$

(50,100

)

 

$

(54,418

)

*Revised for 2Q-2024, 1Q-2024 and 4Q-2023'

Keno Hill produced 597,293 ounces of silver at an average grade of 25.7 ounces per ton. Mined throughput averaged 343 tpd, milled tonnage averaged 261 tpd during the quarter, and 314 tpd during the nine months ended September 30, 2024. Lower mill throughput during the quarter was attributable to the delays in receiving an authorization for construction and a permit modification for the DSTF as the Yukon Government ("YG") and the First Nation of Na-Cho Nyäk Dun ("FNNND") initially focused on the Victoria Gold's Eagle Mine heap leach pad failure that occurred in June and not on permitting matters (Keno Hill does not utilize heap leach processing). Mill operations resumed on October 26, after receiving the authorization and modification and completing related design and construction work on the DSTF. The mine has produced 2.1 million ounces of silver for the nine months ended September 2024 and had an ore stockpile inventory of approximately 0.46 million silver ounces as of October 26, when the mill resumed processing.

Sales during the quarter were $19.8 million and declined over the prior quarter due to lower production and volumes sold. Total expenditures on production costs (excluding depreciation) were $25.0 million and include $10.0 million classified as ramp-up costs on the consolidated statement of operations. Capital investments during the quarter were $14.4 million. Due to the delays in permits, construction of the cemented tails batch plant, a critical infrastructure project, is now expected to be completed in the second quarter of 2025. The project is expected to facilitate the change in mining method at the Bermingham deposit to underhand mining, which should improve safety and productivity. Conversion to underhand mining is expected in the first half of 2026.

Following the Eagle Mine heap leach pad incident, the FNNND expressed strong positions on mining activities within their Traditional Territory, where Keno Hill is located, including a call to halt mining production. The Company values the perspectives of the YG and FNNND and is committed to sustainable and responsible mining that governments and local communities support. Further, in 2025, the Company's environmental remediation services group (which performs environmental remediation work in Yukon on behalf of the Canadian government) is also expected to increase construction activities, adding incremental demand on Keno Hill's infrastructure and resources. As a result of these stakeholder matters, the Company expects 2025 production to remain similar to 2024 and we expect to use this opportunity to advance permitting, invest in improving safety, environmental practices, and infrastructure, and prioritize stakeholder engagement. In 2026, after implementing these priorities, the Company expects production to increase beyond 2024 levels.

Casa Berardi - Quebec

Dollars are in thousands except cost per ton

 

3Q-2024

 

 

2Q-2024

 

 

1Q-2024

 

 

4Q-2023

 

 

3Q-2023

 

 

YTD-2024

 

 

YTD-2023

 

CASA BERARDI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tons of ore processed - underground

 

 

101,308

 

 

 

118,485

 

 

 

123,123

 

 

 

104,002

 

 

 

112,544

 

 

 

342,916

 

 

 

316,913

 

Tons of ore processed - surface pit

 

 

268,291

 

 

 

248,494

 

 

 

258,503

 

 

 

251,009

 

 

 

231,075

 

 

 

775,288

 

 

 

774,564

 

Tons of ore processed - total

 

 

369,599

 

 

 

366,979

 

 

 

381,626

 

 

 

355,011

 

 

 

343,619

 

 

 

1,118,204

 

 

 

1,091,477

 

Surface tons mined - ore and waste

 

 

5,603,101

 

 

 

4,064,091

 

 

 

3,639,297

 

 

 

4,639,770

 

 

 

3,574,391

 

 

 

13,306,489

 

 

 

8,172,580

 

Total production cost per ton

 

$

97.82

 

 

$

107.84

 

 

$

96.53

 

 

$

108.20

 

 

$

103.75

 

 

$

100.67

 

 

$

103.63

 

Ore grade milled - Gold (oz./ton) - underground

 

 

0.11

 

 

 

0.14

 

 

 

0.14

 

 

 

0.12

 

 

 

0.13

 

 

 

0.13

 

 

 

0.13

 

Ore grade milled - Gold (oz./ton) - surface pit

 

 

0.05

 

 

 

0.04

 

 

 

0.04

 

 

 

0.06

 

 

 

0.06

 

 

 

0.04

 

 

 

0.05

 

Ore grade milled - Gold (oz./ton) - combined

 

 

0.06

 

 

 

0.07

 

 

 

0.07

 

 

 

0.07

 

 

 

0.07

 

 

 

0.07

 

 

 

0.07

 

Gold produced (oz.) - underground

 

 

9,913

 

 

 

13,719

 

 

 

13,707

 

 

 

11,206

 

 

 

12,416

 

 

 

37,339

 

 

 

34,430

 

Gold produced (oz.) - surface pit

 

 

10,621

 

 

 

9,468

 

 

 

8,297

 

 

 

11,311

 

 

 

11,843

 

 

 

28,386

 

 

 

33,416

 

Gold produced (oz.) - total

 

 

20,534

 

 

 

23,187

 

 

 

22,004

 

 

 

22,517

 

 

 

24,259

 

 

 

65,725

 

 

 

67,846

 

Silver produced (oz.) - total

 

 

5,578

 

 

 

6,338

 

 

 

6,127

 

 

 

5,730

 

 

 

5,084

 

 

 

18,043

 

 

 

16,685

 

Sales

 

$

50,308

 

 

$

58,623

 

 

$

41,584

 

 

$

42,822

 

 

$

46,912

 

 

$

150,515

 

 

$

134,856

 

Total cost of sales

 

$

(46,280

)

 

$

(67,340

)

 

$

(58,260

)

 

$

(58,945

)

 

$

(56,822

)

 

$

(171,880

)

 

$

(162,396

)

Gross profit (loss)

 

$

4,028

 

 

$

(8,717

)

 

$

(16,676

)

 

$

(16,123

)

 

$

(9,910

)

 

$

(21,365

)

 

$

(27,540

)

Cash flow from operations

 

$

15,305

 

 

$

17,816

 

 

$

3,186

 

 

$

3,136

 

 

$

7,877

 

 

$

36,307

 

 

$

(955

)

Exploration

 

$

 

 

$

315

 

 

$

685

 

 

$

635

 

 

$

1,482

 

 

$

1,000

 

 

$

3,643

 

Capital additions

 

$

(18,606

)

 

$

(12,376

)

 

$

(13,316

)

 

$

(15,929

)

 

$

(16,225

)

 

$

(44,298

)

 

$

(54,127

)

Free cash flow 2

 

$

(3,301

)

 

$

5,755

 

 

$

(9,445

)

 

$

(12,158

)

 

$

(6,866

)

 

$

(6,991

)

 

$

(51,439

)

Cash cost per ounce, after by-product credits 3

 

$

1,754

 

 

$

1,701

 

 

$

1,669

 

 

$

1,702

 

 

$

1,475

 

 

$

1,707

 

 

$

1,635

 

AISC per ounce, after by-product credits 4

 

$

2,059

 

 

$

1,825

 

 

$

1,899

 

 

$

1,969

 

 

$

1,695

 

 

$

1,923

 

 

$

2,075

 

Casa Berardi produced 20,534 ounces of gold in the quarter, 11% less than the prior quarter due to lower underground grades. The mill operated at an average of 4,017 tpd during the quarter.

Sales were $50.3 million, a decrease of 14% over the prior quarter due to lower gold production and sales volumes were partially offset by higher realized gold price. Total cost of sales were $46.3 million, a decrease of 31% attributable to lower sales volumes and lower production costs. Cash costs and AISC per gold ounce, each after by-product credits, increased to $1,754 and $2,059, respectively, as lower gold production was partially offset by lower production costs, with AISC also impacted by higher planned capital investment on construction of tailings.3,4

Cash flow from operations was $15.3 million, lower than the prior quarter primarily due to less gold ounces sold. Capital investments for the quarter totaled $18.6 million ($6.1 million in sustaining and $12.5 million in growth). Free cash flow for the quarter was negative $3.3 million, a decrease over the prior quarter attributable to lower cash flow from operations and higher planned capital investments.2

Casa Berardi is transitioning from a combined underground and surface operation to a surface only operation, which will require significant permitting and development activities. As a part of this transition, along with mining the 160 open pit, only the higher margin stopes of the west underground mine will be mined until they are exhausted, which is expected to occur in mid-2025. Casa Berardi is expected to produce gold from the 160 pit until 2027, and is expected to have a production gap commencing in 2027 and continuing until 2032 or later. During this time, the focus is expected to be on investing in infrastructure and equipment, permitting and de-watering and stripping two expected new open pits, Principal and West Mine Crown Pillar. Upon conclusion of the hiatus and related permitting and construction, the Company expects the mine to generate significant free cash flow at current gold prices. Given the expected hiatus in future production, the uncertainty surrounding permitting and timing of construction of the new open pits, and the Company’s newly hired President and CEO, the Company is evaluating the mine's fit into its overall strategy and is evaluating other potential strategic alternatives.

EXPLORATION AND PRE-DEVELOPMENT

Exploration and pre-development expenses totaled $10.6 million for the quarter. Exploration activities during the quarter primarily focused on underground definition and exploration drilling at Greens Creek and Keno Hill.

Keno Hill

Underground drilling during the third quarter continued to intersect high-grade silver mineralization over significant widths and highlights the potential for high-grade silver mineralization in the district. Underground definition drilling continued to be focused on extending mineralization and resource conversion in the high-grade Bermingham Bear Zone veins (Bear, Footwall, and Main Vein zones) and in the Flame & Moth veins. During the quarter, two underground drills completed over 9,800 feet of definition drilling.

Drilling in the Bermingham Mine Footwall vein has intersected significant silver mineralization over significant width in a portion of the Footwall vein where mineralization was modeled to be low-grade. Results from this drilling will increase the modeled grade in the western portion of the vein over 200 feet of strike length and 100 feet of dip length, and mineralization is open down dip for expansion. Drilling in the Flame and Moth Mine Vein 1 has also intersected significant silver mineralization over significant widths in a portion of Vein 1 where mineralization had previously not been modeled. These results will increase the modeled grade in the central portion of the vein over 230 feet of strike length and 100 feet of dip length. This mineralization remains open to the west for expansion.

Three surface drills were also active on the property testing multiple targets including the Bermingham Deep, Bermingham Townsite, Elsa17-Dixie, Silver Spoon, and Inca target areas that have potential for additional large high-grade silver deposits. Over 23,700 feet of surface exploration drilling in 10 drillholes were completed during the quarter. Wide spaced surface drilling in the Bermingham Deep target has demonstrated the presence of high-grade mineralization in the vicinity of an emergent highly prospective vein intersection target with additional drilling planned to confirm this vein intersection is controlling metal distribution and to expand drilling along plunge. In the Bermingham Townsite target, surface drilling has defined a zone of narrow high-grade mineralization located within 100 meters of the currently planned development and is open at depth along plunge for expansion.

Assay highlights include (reported widths are estimates of true width):

  • Footwall Vein: 63.8 oz/ton silver, 6.7% lead, and 6.4% zinc over 10.2 feet
    • Includes: 99.6 oz/ton silver, 10.7% lead, and 9.8% zinc over 6.4 feet
  • Footwall Vein: 15.6 oz/ton silver, 3.0% lead, and 0.3% zinc over 27.7 feet
    • Includes: 52.1 oz/ton silver, 11.1% lead, and 0.4% zinc over 5.5 feet
  • Flame & Moth Vein 1: 71.6 oz/ton silver, 11.6% lead, and 11.2% zinc over 14.8 feet
  • Flame & Moth Vein 1: 50.3 oz/ton silver, 2.1% lead, and 10.7% zinc over 16.1 feet
    • Includes: 55.4 oz/ton silver, 2.1% lead, and 11.3% zinc over 13.9 feet

Greens Creek

At Greens Creek, three underground drills completed over 27,000 feet of drilling focused on resource conversion and exploration to extend mineralization of known resources. Drilling was focused in the 9a, 200 South, 5250, West, Gallagher, and Upper Plate areas. In addition, two helicopter supported surface exploration drills completed over 8,000 feet of drilling expanding Upper Plate Zone mineralization 250 feet to the west of current resources and drill testing the Mammoth, Gallagher West, East Ore Offset, and Lower Zinc Creek targets.

Assay highlights include (reported widths are estimates of true width):

  • Upper Plate: 22.2 oz/ton silver, 0.02 oz/ton gold, 1.4% zinc, and 0.7% lead over 11.6 feet
  • 200 South Zone: 74.0 oz/ton silver, 0.03 oz/ton gold, 4.7% zinc, and 2.2% lead over 33.8 feet
  • Southwest Bench: 51.4 oz/ton silver, 0.52 oz/ton gold, 9.3% zinc, and 4.9% lead over 19.0 feet
  • West Zone: 30.0 oz/ton silver, 0.45 oz/ton gold, 20.0% zinc, and 7.5% lead over 11.3 feet

Detailed complete drill assay highlights can be found in Table A at the end of the release.

DIVIDENDS

Common Stock

The Board of Directors declared a quarterly cash dividend of $0.01375 per share of common stock, consisting of $0.00375 per share for the minimum dividend component and $0.01 per share for the silver-linked component. The common stock dividend is payable on or about December 4, 2024, to stockholders of record on November 21, 2024. The quarter realized silver price was $29.43, satisfying the criterion for the Company’s common stock silver-linked dividend policy component for silver price threshold of $25 per ounce.

Preferred Stock

The Board of Directors declared a quarterly cash dividend of $0.875 per share of preferred stock, payable on or about January 3, 2025, to stockholders of record on December 16, 2024.

2024 GUIDANCE 6

The Company is revising it's 2024 silver production and cost guidance and affirming its capital guidance. As the Company's new CEO, Mr. Rob Krcmarov, begins his role, and in light of the Company's ongoing review of operations at Keno Hill and Casa Berardi, the Company is not providing any guidance beyond 2024, and expects to provide 2025 guidance along with its 2024 year-end release in February 2025.

2024 Production Outlook

The Company is lowering silver production guidance for Lucky Friday and Greens Creek (attributable to the unplanned mill maintenance). Production guidance for Casa Berardi and Keno Hill is affirmed.

 

 

Silver Production (Moz)

Gold Production (Koz)

Silver Equivalent (Moz)

Gold Equivalent (Koz)

 

 

Previous

Current

Previous

Current

Previous

Current

Previous

Current

2024 Greens Creek *

 

8.8 - 9.2

8.6 - 9.0

46 - 51

46 - 51

21.0 - 21.5

19.5 - 20.5

235 - 245

226 - 236

2024 Lucky Friday *

 

5.0 - 5.3

4.7 - 5.0

N/A

N/A

9.5 - 10.0

8.8 - 9.1

110 - 115

100 - 105

2024 Casa Berardi

 

N/A

N/A

80 - 87

80 - 87

6.9 - 7.5

6.9 - 7.5

80 - 87

80 - 87

2024 Keno Hill*

 

2.7 - 3.0

2.7 - 3.0

N/A

N/A

3.0 - 3.5

3.0 - 3.5

36 - 40

36 - 40

 

 

 

 

 

 

 

 

 

 

2024 Total

 

16.5 - 17.5

16.0 - 17.0

126 - 138

126 - 138

40.4 - 42.5

38.2 - 40.6

461 - 487

442 - 468

*Equivalent ounces include lead and zinc production

2024 Cost Outlook

At Greens Creek, guidance for cash costs and AISC per silver ounce, each after by-product credits, has decreased to reflect higher by-product credits due to strong realized prices. At Lucky Friday, guidance for cash costs and AISC per silver ounce, each after by-product credits, has increased to reflect higher production costs and lower expected silver production.

At Keno Hill, guidance for expenditures on production costs, excluding depreciation, are unchanged and are expected to be $25-$27 million per quarter for the remainder of 2024. Casa Berardi's cash costs and AISC, each after by-product credits, are unchanged.

 

 

Costs of Sales (million)

 

Cash cost, after by-product credits, per silver/gold ounce3

 

AISC, after by-product credits, per produced silver/gold ounce4

 

 

Previous

Current

 

Previous

Current

 

Previous

Current

Greens Creek

 

252

265

 

$2.25 - $3.00

$1.50 - $2.00

 

$8.25 - $9.00

$7.50 - $8.00

Lucky Friday

 

135

140

 

$4.25 - $5.25

$6.00 - $6.50

 

$12.75 - $14.00

$14.50 - $15.00

Total Silver

 

387

405

 

$3.00 - $3.75

$3.00 - $3.75

 

$13.00 - $14.50

$13.50 - $14.50

Casa Berardi

 

215

215

 

$1,500 - $1,700

$1,500 - $1,700

 

$1,750 - $1,975

$1,750 - $1,975

2024 Capital and Exploration Guidance

The Company is affirming capital and exploration expense guidance.

(millions)

 

Total

Sustaining

Growth

2024 Total Capital expenditures

 

$196 - $218

$113 - $124

$83 - $94

Greens Creek

 

$50 - $55

$47 - $50

$3 - $5

Lucky Friday

 

$45 - $50

$42 - $45

$3 - $5

Keno Hill

 

$45 - $50

$10 - $12

$35 - $38

Casa Berardi

 

$56 - $63

$14 - $17

$42 - $46

2024 Exploration

 

$25

 

 

2024 Pre-Development

 

$6.5

 

 

CONFERENCE CALL AND WEBCAST

A conference call and webcast will be held on Thursday, November 7, 2024, at 10:00 a.m. Eastern Time to discuss these results. The Company recommends that the participants dial in at least 10 minutes before the call commencement. You may join the conference call by dialing toll-free 1-800-715-9871 or for international callers dial 1-646-307-1963. The Conference ID is 4812168 and must be provided when dialing in. Hecla's live and archived webcast can be accessed at https://events.q4inc.com/attendee/838635175 or www.hecla.com under Investors.

VIRTUAL INVESTOR EVENT

Hecla will be holding a Virtual Investor Event on Thursday, November 7, from 12:00 p.m. to 1:30 p.m. Eastern Time.

Hecla invites shareholders, investors, and other interested parties to schedule a personal, 30-minute virtual meeting (video or telephone) with a member of senior management to discuss Financial, Exploration, Operations, ESG or general matters. Click on the link below to schedule a call (or copy and paste the link into your web browser). You can select a topic once you have entered the meeting calendar. If you are unable to book a time, either due to high demand or for other reasons, please reach out to Anvita M. Patil, Vice President, Investor Relations and Treasurer at hmc-info@hecla.com or 208-769-4100.

One-on-One meeting URL: https://calendly.com/2024-nov-vie

ABOUT HECLA

Founded in 1891, Hecla Mining Company (NYSE: HL) is the largest silver producer in the United States. In addition to operating mines in Alaska, Idaho, and Quebec, Canada, the Company is developing a mine in the Yukon, Canada, and owns a number of exploration and pre-development projects in world-class silver and gold mining districts throughout North America.

NOTES

Non-GAAP Financial Measures

Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by United States generally accepted accounting principles ("GAAP"). These measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The non-GAAP financial measures cited in this release and listed below are reconciled to their most comparable GAAP measure at the end of this release.

(1) Adjusted net income (loss) applicable to common stockholders is a non-GAAP measurement, a reconciliation of which to net income (loss) applicable to common stockholders, the most comparable GAAP measure, can be found at the end of the release. Adjusted net income (loss) applicable to common stockholders is a measure used by management to evaluate the Company's operating performance but should not be considered an alternative to net income (loss) applicable to common stockholders as defined by GAAP. They exclude certain impacts which are of a nature which we believe are not reflective of our underlying performance. Management believes that adjusted net income (loss) applicable to common stockholders per common share provides investors with the ability to better evaluate our underlying operating performance.

(2) Free cash flow is a non-GAAP measure calculated as cash provided by operating activities less capital expenditures. Cash provided by operating activities for the Greens Creek, Lucky Friday, Keno Hill, and Casa Berardi operating segments excludes exploration and pre-development expense, as it is a discretionary expenditure and not a component of the mines’ operating performance. Capital expenditures refers to Additions to properties, plants and equipment from the Consolidated Statements of Cash Flows, net of finance leases.

(3) Cash cost, after by-product credits, per silver and gold ounce is a non-GAAP measurement, a reconciliation of total cost of sales, can be found at the end of the release. It is an important operating statistic that management utilizes to measure each mine's operating performance. It also allows the benchmarking of performance of each mine versus those of our competitors. As a primary silver mining company, management also uses the statistic on an aggregate basis - aggregating the Greens Creek and Lucky Friday mines to compare performance with that of other silver mining companies. Similarly, the statistic is useful in identifying acquisition and investment opportunities as it provides a common tool for measuring the financial performance of other mines with varying geologic, metallurgical and operating characteristics. In addition, the Company may use it when formulating performance goals and targets under its incentive program.

(4) All-in sustaining cost (AISC), after by-product credits, is a non-GAAP measurement, a reconciliation of which to total cost of sales, the closest GAAP measurement, can be found in the end of the release. AISC, after by-product credits, includes total cost of sales and other direct production costs, expenses for reclamation at the mine sites and all site sustaining capital costs. AISC, after by-product credits, is calculated net of depreciation, depletion, and amortization and by-product credits. Prior year presentation has been adjusted to conform with current year presentation.

(5) Adjusted EBITDA is a non-GAAP measurement, a reconciliation of which to net loss, the most comparable GAAP measure, can be found at the end of the release. Adjusted EBITDA is a measure used by management to evaluate the Company's operating performance but should not be considered an alternative to net loss, or cash provided by operating activities as those terms are defined by GAAP, and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. In addition, the Company may use it when formulating performance goals and targets under its incentive program. Net debt to adjusted EBITDA is a non-GAAP measurement, a reconciliation of which to debt and net income (loss), the most comparable GAAP measurements, can be found at the end of the release. It is an important measure for management to measure relative indebtedness and the ability to service the debt relative to its peers. It is calculated as total debt outstanding less total cash on hand divided by adjusted EBITDA.

(6) Expectations for 2024 include silver, gold, lead, and zinc production from Greens Creek, Lucky Friday, Keno Hill, and Casa Berardi converted using gold $1,950/oz, silver $22.50/oz, zinc $1.20/lb, and lead $0.95/lb. Numbers are rounded.

Current GAAP measures used in the mining industry, such as total cost of goods sold, do not capture all the expenditures incurred to discover, develop and sustain silver and gold production. Management believes that AISC is a non-GAAP measure that provides additional information to management, investors and analysts to help (i) in the understanding of the economics of our operations and performance compared to other producers and (ii) in the transparency by better defining the total costs associated with production. Similarly, the statistic is useful in identifying acquisition and investment opportunities as it provides a common tool for measuring the financial performance of other mines with varying geologic, metallurgical and operating characteristics. In addition, the Company may use it when formulating performance goals and targets under its incentive program.

Cautionary Statement Regarding Forward Looking Statements, Including 2024 Outlook

This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbor created by such sections and other applicable laws, including Canadian securities laws. Words such as “may”, “will”, “should”, “expects”, “intends”, “projects”, “believes”, “estimates”, “targets”, “anticipates” and similar expressions are used to identify these forward-looking statements. Such forward-looking statements may include, without limitation: (i) at current price levels and expected production, the Company anticipates continuing to reduce borrowings on its credit facility; (ii) At Keno Hill, construction of cemented tails batch plant project is expected to 1) be completed in the second quarter of 2025, 2) improve safety and productivity at the Bermingham deposit, and 3) facilitate the change of mining method to underhand mining by the first half of 2026; (iii) also at Keno Hill, the Company expects 2025 production to remain similar to 2024 and to advance permitting and invest in improving safety, environmental practices, and infrastructure, and prioritizing stakeholder engagement in 2025, and that production is expected to increase beyond 2024 levels in 2026; (iv) Casa Berardi is expected to 1) continue underground production through mid-2025, 2) produce gold from the 160 pit until 2027, and 3) have a production gap commencing in 2027 to 2032 or later. During this time, the focus is expected to be on investing in infrastructure and equipment, permitting and de-watering and stripping two expected new open pits, Principal and West Mine Crown Pillar. Upon conclusion of the hiatus and related permitting and construction, the Company expects the mine to generate significant free cash flow, particularly at current gold prices; (v) projected total cost of sales, as well as cash cost and AISC per ounce (in each case after by-product credits) for Greens Creek, Lucky Friday, and Casa Berardi individually and for silver overall for 2024; (vi) Company-wide and mine-specific estimated spending on capital, exploration and predevelopment for 2024; and (vii) Company-wide and mine-specific estimated silver, gold, silver-equivalent and gold-equivalent ounces of production for 2024. The material factors or assumptions used to develop such forward-looking statements or forward-looking information include that the Company’s plans for development and production will proceed as expected and will not require revision as a result of risks or uncertainties, whether known, unknown or unanticipated, to which the Company’s operations are subject.

Estimates or expectations of future events or results are based upon certain assumptions, which may prove to be incorrect, which could cause actual results to differ from forward-looking statements. Such assumptions, include, but are not limited to: (i) there being no significant change to current geotechnical, metallurgical, hydrological and other physical conditions; (ii) permitting, development, operations and expansion of the Company’s projects being consistent with current expectations and mine plans; (iii) political/regulatory developments in any jurisdiction in which the Company operates being consistent with its current expectations; (iv) the exchange rate for the USD/CAD being approximately consistent with current levels; (v) certain price assumptions for gold, silver, lead and zinc; (vi) prices for key supplies being approximately consistent with current levels; (vii) the accuracy of our current mineral reserve and mineral resource estimates; (viii) there being no significant changes to the availability of employees, vendors and equipment; (ix) the Company’s plans for development and production will proceed as expected and will not require revision as a result of risks or uncertainties, whether known, unknown or unanticipated; (x) counterparties performing their obligations under hedging instruments and put option contracts; (xi) sufficient workforce is available and trained to perform assigned tasks; (xii) weather patterns and rain/snowfall within normal seasonal ranges so as not to impact operations; (xiii) relations with interested parties, including First Nations and Native Americans, remain productive; (xiv) maintaining availability of water rights; (xv) factors do not arise that reduce available cash balances; and (xvi) there being no material increases in our current requirements to post or maintain reclamation and performance bonds or collateral related thereto.

In addition, material risks that could cause actual results to differ from forward-looking statements include but are not limited to: (i) gold, silver and other metals price volatility; (ii) operating risks; (iii) currency fluctuations; (iv) increased production costs and variances in ore grade or recovery rates from those assumed in mining plans; (v) community relations; and (vi) litigation, political, regulatory, labor and environmental risks. For a more detailed discussion of such risks and other factors, see the Company's 2023 Form 10-K filed on February 15, 2024, Form 10-Q filed on August 7, 2024 and Form 10-Q expected to be filed on November 7, 2024, for a more detailed discussion of factors that may impact expected future results. The Company undertakes no obligation and has no intention of updating forward-looking statements other than as may be required by law.

Qualified Person (QP)

Kurt D. Allen, MSc., CPG, VP - Exploration of Hecla Mining Company and Keith Blair, MSc., CPG, Chief Geologist of Hecla Limited, who serve as a Qualified Person under S-K 1300 and NI 43-101, supervised the preparation of the scientific and technical information concerning Hecla’s mineral projects in this news release. Technical Report Summaries for each of the Company’s Greens Creek, Lucky Friday, Casa Berardi and Keno Hill properties are filed as exhibits 96.1 - 96.4 respectively, to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and are available at www.sec.gov. Information regarding data verification, surveys and investigations, quality assurance program and quality control measures and a summary of analytical or testing procedures for (i) the Greens Creek Mine are contained in its Technical Report Summary and in a NI 43-101 technical report titled “Technical Report for the Greens Creek Mine” effective date December 31, 2018, (ii) the Lucky Friday Mine are contained in its Technical Report Summary and in its technical report titled “Technical Report for the Lucky Friday Mine Shoshone County, Idaho, USA” effective date April 2, 2014, (iii) Casa Berardi are contained in its Technical Report Summary and in its NI 43-101 technical report titled “Technical Report on the Casa Berardi Mine, Northwestern Quebec, Canada” effective date December 31, 2023 and (iv) Keno Hill are contained in its Technical Report Summary and in its NI 43-101 technical report titled “Technical Report on the Keno Hill Mine, Yukon, Canada” effective date December 31, 2023. Also included in each technical report is a description of the key assumptions, parameters and methods used to estimate mineral reserves and resources and a general discussion of the extent to which the estimates may be affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant factors. Mr. Allen and Mr. Blair reviewed and verified information regarding drill sampling, data verification of all digitally collected data, drill surveys and specific gravity determinations relating to all the mines. The review encompassed quality assurance programs and quality control measures including analytical or testing practice, chain-of-custody procedures, sample storage procedures and included independent sample collection and analysis. This review found the information and procedures meet industry standards and are adequate for Mineral Resource and Mineral Reserve estimation and mine planning purposes.

HECLA MINING COMPANY

Condensed Consolidated Statements of Income (Loss)

(dollars and shares in thousands, except per share amounts - unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,
2024

 

 

June 30,
2024

 

 

September 30,
2024

 

 

September 30,
2023

 

Sales

 

$

245,085

 

 

$

245,657

 

 

$

680,270

 

 

$

559,537

 

Cost of sales and other direct production costs

 

 

144,855

 

 

 

140,464

 

 

 

406,780

 

 

 

345,516

 

Depreciation, depletion and amortization

 

 

40,944

 

 

 

53,763

 

 

 

143,614

 

 

 

107,937

 

Total cost of sales

 

 

185,799

 

 

 

194,227

 

 

 

550,394

 

 

 

453,453

 

Gross profit

 

 

59,286

 

 

 

51,430

 

 

 

129,876

 

 

 

106,084

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

10,401

 

 

 

14,740

 

 

 

36,357

 

 

 

30,449

 

Exploration and pre-development

 

 

10,553

 

 

 

6,682

 

 

 

21,577

 

 

 

25,546

 

Ramp-up and suspension costs

 

 

13,679

 

 

 

5,538

 

 

 

33,740

 

 

 

48,684

 

Write down of property, plant and equipment

 

 

14,464

 

 

 

 

 

 

14,464

 

 

 

 

Provision for closed operations and environmental matters

 

 

1,542

 

 

 

1,153

 

 

 

3,681

 

 

 

6,411

 

Other operating income

 

 

(13,828

)

 

 

(17,283

)

 

 

(48,082

)

 

 

(2,729

)

 

 

 

36,811

 

 

 

10,830

 

 

 

61,737

 

 

 

108,361

 

Income (loss) from operations

 

 

22,475

 

 

 

40,600

 

 

 

68,139

 

 

 

(2,277

)

Other expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(10,901

)

 

 

(12,505

)

 

 

(36,050

)

 

 

(31,186

)

Fair value adjustments, net

 

 

3,654

 

 

 

5,002

 

 

 

6,804

 

 

 

(5,774

)

Foreign exchange (loss) gain

 

 

(3,246

)

 

 

2,673

 

 

 

3,409

 

 

 

434

 

Other income

 

 

1,229

 

 

 

1,180

 

 

 

3,921

 

 

 

4,425

 

 

 

 

(9,264

)

 

 

(3,650

)

 

 

(21,916

)

 

 

(32,101

)

Income (loss) before income and mining taxes

 

 

13,211

 

 

 

36,950

 

 

 

46,223

 

 

 

(34,378

)

Income and mining tax provision

 

 

(11,450

)

 

 

(9,080

)

 

 

(22,345

)

 

 

(6,904

)

Net income (loss)

 

 

1,761

 

 

 

27,870

 

 

 

23,878

 

 

 

(41,282

)

Preferred stock dividends

 

 

(138

)

 

 

(138

)

 

 

(414

)

 

 

(414

)

Net income (loss) applicable to common stockholders

 

$

1,623

 

 

$

27,732

 

 

$

23,464

 

 

$

(41,696

)

Basic income (loss) per common share after preferred dividends (in cents)

 

$

0.00

 

 

$

0.04

 

 

$

0.04

 

 

$

(0.07

)

Diluted income (loss) per common share after preferred dividends (in cents)

 

$

0.00

 

 

$

0.04

 

 

$

0.04

 

 

$

(0.07

)

Weighted average number of common shares outstanding basic

 

 

621,921

 

 

 

617,106

 

 

 

618,419

 

 

 

604,028

 

Weighted average number of common shares outstanding diluted

 

 

625,739

 

 

 

622,206

 

 

 

621,792

 

 

 

604,028

 

 

HECLA MINING COMPANY

Condensed Consolidated Statements of Cash Flows

(dollars in thousands - unaudited)

 

 

 

Quarter Ended

 

 

Nine Months Ended

 

 

 

September 30,
2024

 

 

June 30,
2024

 

 

September 30,
2024

 

 

September 30,
2023

 

OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

1,761

 

 

$

27,870

 

 

$

23,878

 

 

$

(41,282

)

Non-cash elements included in net income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

44,118

 

 

 

53,921

 

 

 

149,265

 

 

 

111,705

 

Inventory adjustments

 

 

178

 

 

 

2,225

 

 

 

10,074

 

 

 

16,332

 

Fair value adjustments, net

 

 

(3,654

)

 

 

(5,002

)

 

 

(6,804

)

 

 

5,774

 

Provision for reclamation and closure costs

 

 

1,822

 

 

 

1,760

 

 

 

5,428

 

 

 

7,805

 

Stock-based compensation

 

 

2,255

 

 

 

2,982

 

 

 

6,401

 

 

 

5,122

 

Deferred income taxes

 

 

8,573

 

 

 

6,104

 

 

 

14,261

 

 

 

795

 

Net foreign exchange (gain) loss

 

 

3,246

 

 

 

(2,673

)

 

 

(3,409

)

 

 

(434

)

Write down of property, plant and equipment

 

 

14,464

 

 

 

 

 

 

14,464

 

 

 

 

Other non-cash items, net

 

 

341

 

 

 

(715

)

 

 

145

 

 

 

1,624

 

Change in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(7,085

)

 

 

750

 

 

 

(24,199

)

 

 

25,020

 

Inventories

 

 

3,498

 

 

 

(12,127

)

 

 

(27,375

)

 

 

(24,339

)

Other current and non-current assets

 

 

(7,989

)

 

 

3,104

 

 

 

353

 

 

 

(15,045

)

Accounts payable, accrued and other current liabilities

 

 

(4,690

)

 

 

6,518

 

 

 

(6,991

)

 

 

(2,389

)

Accrued payroll and related benefits

 

 

2,772

 

 

 

(1,678

)

 

 

6,592

 

 

 

(11,244

)

Accrued taxes

 

 

2,085

 

 

 

(3,101

)

 

 

1,069

 

 

 

(1,008

)

Accrued reclamation and closure costs and other non-current liabilities

 

 

(6,686

)

 

 

(1,220

)

 

 

(12,345

)

 

 

(3,821

)

Net cash provided by operating activities

 

 

55,009

 

 

 

78,718

 

 

 

150,807

 

 

 

74,615

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

Additions to property, plant and mine development

 

 

(55,699

)

 

 

(50,420

)

 

 

(153,708

)

 

 

(161,265

)

Proceeds from disposition of assets

 

 

199

 

 

 

1,227

 

 

 

1,473

 

 

 

160

 

Purchases of investments

 

 

 

 

 

(73

)

 

 

(73

)

 

 

(1,753

)

Net cash used in investing activities

 

 

(55,500

)

 

 

(49,266

)

 

 

(152,308

)

 

 

(162,858

)

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from sale of common stock, net

 

 

57,265

 

 

 

 

 

 

58,368

 

 

 

25,888

 

Acquisition of treasury shares

 

 

 

 

 

 

 

 

(1,197

)

 

 

(2,036

)

Borrowing of debt

 

 

83,000

 

 

 

40,000

 

 

 

150,000

 

 

 

119,000

 

Repayment of debt

 

 

(132,000

)

 

 

(118,000

)

 

 

(265,000

)

 

 

(39,000

)

Dividends paid to common and preferred stockholders

 

 

(8,697

)

 

 

(4,000

)

 

 

(16,691

)

 

 

(11,755

)

Repayments of finance leases

 

 

(2,336

)

 

 

(2,472

)

 

 

(7,841

)

 

 

(7,990

)

Net cash (used in) provided by financing activities

 

 

(2,768

)

 

 

(84,472

)

 

 

(82,361

)

 

 

84,107

 

Effect of exchange rates on cash

 

 

960

 

 

 

(556

)

 

 

(220

)

 

 

77

 

Net (decrease) increase in cash, cash equivalents and restricted cash and cash equivalents

 

 

(2,299

)

 

 

(55,576

)

 

 

(84,082

)

 

 

(4,059

)

Cash, cash equivalents and restricted cash and cash equivalents at beginning of period

 

 

25,756

 

 

 

81,332

 

 

 

107,539

 

 

 

105,907

 

Cash, cash equivalents and restricted cash and cash equivalents at end of period

 

$

23,457

 

 

$

25,756

 

 

$

23,457

 

 

$

101,848

 

 

HECLA MINING COMPANY

Condensed Consolidated Balance Sheets

(dollars and shares in thousands - unaudited)

 

 

 

September 30, 2024

 

 

December 31, 2023

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

22,273

 

 

$

106,374

 

Accounts receivable

 

 

56,936

 

 

 

33,116

 

Inventories

 

 

104,528

 

 

 

93,647

 

Other current assets

 

 

22,230

 

 

 

27,125

 

Total current assets

 

 

205,967

 

 

 

260,262

 

Investments

 

 

42,019

 

 

 

33,724

 

Restricted cash and cash equivalents

 

 

1,184

 

 

 

1,165

 

Property, plant and mine development, net

 

 

2,665,342

 

 

 

2,666,250

 

Operating lease right-of-use assets

 

 

5,173

 

 

 

8,349

 

Other non-current assets

 

 

36,026

 

 

 

41,354

 

Total assets

 

$

2,955,711

 

 

$

3,011,104

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable and other current accrued liabilities

 

$

129,946

 

 

$

123,643

 

Finance leases

 

 

7,299

 

 

 

9,752

 

Accrued reclamation and closure costs

 

 

10,261

 

 

 

9,660

 

Accrued interest

 

 

5,192

 

 

 

14,405

 

Current debt

 

 

35,874

 

 

 

 

Total current liabilities

 

 

188,572

 

 

 

157,460

 

Accrued reclamation and closure costs

 

 

108,329

 

 

 

110,797

 

Long-term debt including finance leases

 

 

496,631

 

 

 

653,063

 

Deferred tax liabilities

 

 

111,331

 

 

 

104,835

 

Other non-current liabilities

 

 

12,566

 

 

 

16,845

 

Total liabilities

 

 

917,429

 

 

 

1,043,000

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Preferred stock

 

 

39

 

 

 

39

 

Common stock

 

 

159,185

 

 

 

156,076

 

Capital surplus

 

 

2,413,546

 

 

 

2,343,747

 

Accumulated deficit

 

 

(496,674

)

 

 

(503,861

)

Accumulated other comprehensive (loss) income, net

 

 

(2,883

)

 

 

5,837

 

Treasury stock

 

 

(34,931

)

 

 

(33,734

)

Total stockholders’ equity

 

 

2,038,282

 

 

 

1,968,104

 

Total liabilities and stockholders’ equity

 

$

2,955,711

 

 

$

3,011,104

 

Non-GAAP Measures

(Unaudited)

Reconciliation of Total Cost of Sales to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP)

The tables below present reconciliations between the most comparable GAAP measure of total cost of sales to the non-GAAP measures of (i) Cash Cost, Before By-product Credits, (ii) Cash Cost, After By-product Credits, (iii) AISC, Before By-product Credits and (iv) AISC, After By-product Credits for our operations and for the Company for the three months ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023 and the nine months ended September 30, 2024 and 2023.

Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce are measures developed by precious metals companies (including the Silver Institute and the World Gold Council) in an effort to provide a uniform standard for comparison purposes. There can be no assurance, however, that these non-GAAP measures as we report them are the same as those reported by other mining companies.

Cash Cost, After By-product Credits, per Ounce is an important operating statistic that we utilize to measure each mine's operating performance. We use AISC, After By-product Credits, per Ounce as a measure of our mines' net cash flow after costs for reclamation and sustaining capital. This is similar to the Cash Cost, After By-product Credits, per Ounce non-GAAP measure we report, but also includes reclamation and sustaining capital costs. Current GAAP measures used in the mining industry, such as cost of goods sold, do not capture all the expenditures incurred to discover, develop and sustain silver and gold production. Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce also allow us to benchmark the performance of each of our mines versus those of our competitors. As a silver and gold mining company, we also use these statistics on an aggregate basis - aggregating the Greens Creek and Lucky Friday mines to compare our performance with that of other silver mining companies. Similarly, these statistics are useful in identifying acquisition and investment opportunities as they provide a common tool for measuring the financial performance of other mines with varying geologic, metallurgical and operating characteristics.

Cash Cost, Before By-product Credits and AISC, Before By-product Credits include all direct and indirect operating cash costs related directly to the physical activities of producing metals, including mining, processing and other plant costs, third-party refining expense, on-site general and administrative costs, royalties and mining production taxes. AISC, Before By-product Credits for each mine also includes reclamation and sustaining capital costs. AISC, Before By-product Credits for our consolidated silver properties also includes corporate costs for general and administrative expense and sustaining capital costs. By-product credits include revenues earned from all metals other than the primary metal produced at each unit. As depicted in the tables below, by-product credits comprise an essential element of our silver unit cost structure, distinguishing our silver operations due to the polymetallic nature of their orebodies.

In addition to the uses described above, Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce provide management and investors an indication of operating cash flow, after consideration of the average price, received from production. We also use these measurements for the comparative monitoring of performance of our mining operations period-to-period from a cash flow perspective.

The Casa Berardi information below reports Cash Cost, After By-product Credits, per Gold Ounce and AISC, After By-product Credits, per Gold Ounce for the production of gold, their primary product, and by-product revenues earned from silver, which is a by-product at Casa Berardi. Only costs and ounces produced relating to units with the same primary product are combined to represent Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce. Thus, the gold produced at our Casa Berardi unit is not included as a by-product credit when calculating Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for the total of Greens Creek and Lucky Friday, our combined silver properties. Similarly, the silver produced at our other two units is not included as a by-product credit when calculating the gold metrics for Casa Berardi. We have not disclosed cost per ounce statistics for the Keno Hill operation as it is in the production ramp-up phase and has not met our definition of commercial production. Determination of when those criteria have been met requires the use of judgment, and our definition of commercial production may differ from that of other mining companies.

In thousands (except per ounce amounts)

 

Three Months Ended September 30, 2024

 

Three Months Ended June 30, 2024

 

Nine Months Ended September 30, 2024

 

Nine Months Ended September 30, 2023

 

 

Greens
Creek

 

Lucky
Friday

 

Keno
Hill (4)

 

Corporate
and
other(3)

 

Total
Silver

 

Greens
Creek

 

Lucky
Friday

 

Keno
Hill (4)

 

Corporate
and
other(3)

 

Total
Silver

 

Greens
Creek

 

Lucky
Friday(2)

 

Keno
Hill (4)

 

Corporate
and
other(3)

 

Total
Silver

 

Greens
Creek

 

Lucky
Friday(2)

 

Keno
Hill (4)

 

Corporate
and
other(3)

 

Total
Silver

Total cost of sales

 

$73,597

 

$39,286

 

$19,809

 

 

$132,692

 

$56,786

 

$37,523

 

$28,950

 

$—

 

$123,259

 

$200,240

 

$104,328

 

$59,606

 

$—

 

$364,174

 

$189,664

 

$81,068

 

$17,582

 

$—

 

$288,314

Depreciation, depletion and amortization

 

(13,948)

 

(10,681)

 

(4,218)

 

 

(28,847)

 

(11,316)

 

(10,708)

 

(4,729)

 

 

(26,753)

 

(39,707)

 

(29,300)

 

(12,549)

 

 

(81,556)

 

(38,557)

 

(23,741)

 

(2,209)

 

 

(64,507)

Treatment costs

 

5,962

 

3,650

 

 

 

9,612

 

6,069

 

2,746

 

 

 

8,815

 

21,755

 

9,619

 

-

 

 

31,374

 

31,114

 

10,832

 

1,146

 

 

43,092

Change in product inventory

 

(8,125)

 

106

 

 

 

(8,019)

 

7,296

 

(115)

 

 

 

7,181

 

(3,025)

 

602

 

 

 

(2,423)

 

(2,479)

 

(3,313)

 

 

 

(5,792)

Reclamation and other costs

 

(1,825)

 

(241)

 

 

 

(2,066)

 

(882)

 

(311)

 

 

 

(1,193)

 

(3,362)

 

(654)

 

 

 

(4,016)

 

(214)

 

(826)

 

 

 

(1,040)

Exclusion of Lucky Friday cash costs (5)

 

 

 

 

 

 

 

 

 

 

 

 

(3,634)

 

 

 

(3,634)

 

 

(20)

 

 

 

(20)

Exclusion of Keno Hill cash costs (4)

 

 

 

(15,591)

 

 

(15,591)

 

 

 

(24,221)

 

 

(24,221)

 

 

 

(47,057)

 

 

(47,057)

 

 

 

(16,519)

 

 

(16,519)

Cash Cost, Before By-product Credits (1)

 

55,661

 

32,120

 

 

 

87,781

 

57,953

 

29,135

 

 

 

87,088

 

175,901

 

80,961

 

 

 

256,862

 

179,528

 

64,000

 

 

 

243,528

Reclamation and other costs

 

786

 

303

 

 

 

1,089

 

785

 

183

 

 

 

968

 

2,356

 

708

 

 

 

3,064

 

2,166

 

671

 

 

 

2,837

Sustaining capital

 

10,558

 

10,862

 

 

42

 

21,462

 

10,911

 

9,517

 

 

1,035

 

21,463

 

29,885

 

32,430

 

 

1,143

 

63,458

 

26,686

 

24,251

 

 

831

 

51,768

Exclusion of Lucky Friday sustaining costs (5)

 

 

 

 

 

 

 

 

 

 

 

 

(5,396)

 

 

 

(5,396)

 

 

(4,934)

 

 

 

(4,934)

General and administrative

 

 

 

 

10,401

 

10,401

 

 

 

 

14,740

 

14,740

 

 

 

 

36,357

 

36,357

 

 

 

 

30,449

 

30,449

AISC, Before By-product Credits (1)

 

67,005

 

43,285

 

 

10,443

 

120,733

 

69,649

 

38,835

 

 

15,775

 

124,259

 

208,142

 

108,703

 

 

37,500

 

354,345

 

208,380

 

83,988

 

 

31,280

 

323,648

By-product credits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Zinc

 

(22,126)

 

(7,046)

 

 

 

(29,172)

 

(21,873)

 

(6,706)

 

 

 

(28,579)

 

(64,205)

 

(18,537)

 

 

 

(82,742)

 

(64,955)

 

(14,284)

 

 

 

(79,239)

Gold

 

(25,430)

 

 

 

 

(25,430)

 

(28,844)

 

 

 

 

(28,844)

 

(80,826)

 

 

 

 

(80,826)

 

(79,089)

 

 

 

 

(79,089)

Lead

 

(5,970)

 

(13,245)

 

 

 

(19,215)

 

(6,818)

 

(15,466)

 

 

 

(22,284)

 

(19,769)

 

(40,432)

 

 

 

(60,201)

 

(22,002)

 

(33,953)

 

 

 

(55,955)

Copper

 

(409)

 

 

 

 

(409)

 

 

 

 

 

 

(409)

 

 

 

 

(409)

 

 

 

 

 

 

 

 

 

 

Exclusion of Lucky Friday byproduct credits (5)

 

 

 

 

 

 

 

 

 

 

 

 

3,943

 

 

 

3,943

 

 

676

 

 

 

676

Total By-product credits

 

(53,935)

 

(20,291)

 

 

 

(74,226)

 

(57,535)

 

(22,172)

 

 

 

(79,707)

 

(165,209)

 

(55,026)

 

 

 

(220,235)

 

(166,046)

 

(47,561)

 

 

 

(213,607)

Cash Cost, After By-product Credits

 

$1,726

 

$11,829

 

$—

 

$—

 

$13,555

 

$418

 

$6,963

 

$—

 

$—

 

$7,381

 

$10,692

 

$25,935

 

$—

 

$—

 

$36,627

 

$13,482

 

$16,439

 

$—

 

$—

 

$29,921

AISC, After By-product Credits

 

$13,070

 

$22,994

 

$—

 

$10,443

 

$46,507

 

$12,114

 

$16,663

 

$—

 

$15,775

 

$44,552

 

$42,933

 

$53,677

 

$—

 

$37,500

 

$134,110

 

$42,334

 

$36,427

 

$—

 

$31,280

 

$110,041

Ounces produced

 

1,857

 

1,185

 

 

 

 

 

3,042

 

2,244

 

1,308

 

 

 

 

 

3,552

 

6,579

 

3,554

 

 

 

 

 

10,133

 

7,472

 

3,025

 

 

 

 

 

10,497

Exclusion of Lucky Friday ounces produced (5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(253)

 

 

 

 

 

(253)

 

 

(41)

 

 

 

 

 

(41)

Divided by ounces produced

 

1,857

 

1,185

 

 

 

 

 

3,042

 

2,244

 

1,308

 

 

 

 

 

3,552

 

6,579

 

3,301

 

 

 

 

 

9,880

 

7,472

 

2,984

 

 

 

 

 

10,456

Cash Cost, Before By-product Credits, per Silver Ounce

 

$29.97

 

$27.11

 

 

 

 

 

$28.86

 

$25.83

 

$22.27

 

 

 

 

 

$24.52

 

$26.73

 

$24.53

 

 

 

 

 

$26.00

 

$24.03

 

$21.45

 

 

 

 

 

$23.29

By-product credits per ounce

 

(29.04)

 

(17.13)

 

 

 

 

 

(24.40)

 

(25.64)

 

(16.95)

 

 

 

 

 

(22.44)

 

(25.11)

 

(16.67)

 

 

 

 

 

(22.29)

 

(22.22)

 

(15.94)

 

 

 

 

 

(20.43)

Cash Cost, After By-product Credits, per Silver Ounce

 

$0.93

 

$9.98

 

 

 

 

 

$4.46

 

$0.19

 

$5.32

 

 

 

 

 

$2.08

 

$1.62

 

$7.86

 

 

 

 

 

$3.71

 

$1.81

 

$5.51

 

 

 

 

 

$2.86

AISC, Before By-product Credits, per Silver Ounce

 

$36.08

 

$36.53

 

 

 

 

 

$39.69

 

$31.04

 

$29.69

 

 

 

 

 

$34.98

 

$31.64

 

$32.93

 

 

 

 

 

$35.86

 

$27.89

 

$28.15

 

 

 

 

 

$30.95

By-product credits per ounce

 

(29.04)

 

(17.13)

 

 

 

 

 

(24.40)

 

(25.64)

 

(16.95)

 

 

 

 

 

(22.44)

 

(25.11)

 

(16.67)

 

 

 

 

 

(22.29)

 

(22.22)

 

(15.94)

 

 

 

 

 

(20.43)

AISC, After By-product Credits, per Silver Ounce

 

$7.04

 

$19.40

 

 

 

 

 

$15.29

 

$5.40

 

$12.74

 

 

 

 

 

$12.54

 

$6.53

 

$16.26

 

 

 

 

 

$13.57

 

$5.67

 

$12.21

 

 

 

 

 

$10.52

 

In thousands (except per ounce amounts)

 

Three Months Ended September 30, 2024

 

 

Three Months Ended June 30, 2024

 

 

Nine Months Ended
September 30, 2024

 

 

Nine Months Ended
September 30, 2023

 

 

 

Casa
Berardi

 

 

Other (3)

 

 

Total
Gold and
Other

 

 

Casa
Berardi

 

 

Other (3)

 

 

Total
Gold and
Other

 

 

Casa
Berardi

 

 

 

Other (3)

 

 

Total
Gold and
Other

 

 

Casa
Berardi

 

 

Other (3)

 

 

Total
Gold and
Other

 

Total cost of sales

 

$

46,280

 

 

$

6,827

 

 

$

53,107

 

 

$

67,340

 

 

$

3,628

 

 

$

70,968

 

 

$

171,880

 

 

 

$

14,340

 

 

$

186,220

 

 

$

162,396

 

 

$

2,743

 

 

$

165,139

 

Depreciation, depletion and amortization

 

 

(12,097

)

 

 

 

 

 

(12,097

)

 

 

(27,010

)

 

 

 

 

 

(27,010

)

 

 

(62,058

)

 

 

 

 

 

 

(62,058

)

 

 

(43,288

)

 

 

(142

)

 

 

(43,430

)

Treatment costs

 

 

36

 

 

 

 

 

 

36

 

 

 

52

 

 

 

 

 

 

52

 

 

 

112

 

 

 

 

 

 

 

112

 

 

 

1,072

 

 

 

 

 

 

1,072

 

Change in product inventory

 

 

2,176

 

 

 

 

 

 

2,176

 

 

 

(550

)

 

 

 

 

 

(550

)

 

 

3,365

 

 

 

 

 

 

 

3,365

 

 

 

(5,345

)

 

 

 

 

 

(5,345

)

Reclamation and other costs

 

 

(207

)

 

 

 

 

 

(207

)

 

 

(206

)

 

 

 

 

 

(206

)

 

 

(622

)

 

 

 

 

 

 

(622

)

 

 

(655

)

 

 

 

 

 

(655

)

Exclusion of Other costs (6)

 

 

 

 

 

(6,827

)

 

 

(6,827

)

 

 

 

 

 

(3,628

)

 

 

(3,628

)

 

 

 

 

 

 

(14,340

)

 

 

(14,340

)

 

 

(2,851

)

 

 

(2,601

)

 

 

(5,452

)

Cash Cost, Before By-product Credits (1)

 

 

36,188

 

 

 

 

 

 

36,188

 

 

 

39,626

 

 

 

 

 

 

39,626

 

 

 

112,677

 

 

 

 

 

 

 

112,677

 

 

 

111,329

 

 

 

 

 

 

111,329

 

Reclamation and other costs

 

 

207

 

 

 

 

 

 

207

 

 

 

206

 

 

 

 

 

 

206

 

 

 

622

 

 

 

 

 

 

 

622

 

 

 

655

 

 

 

 

 

 

655

 

Sustaining capital

 

 

6,054

 

 

 

 

 

 

6,054

 

 

 

2,667

 

 

 

 

 

 

2,667

 

 

 

13,582

 

 

 

 

 

 

 

13,582

 

 

 

29,175

 

 

 

 

 

 

29,175

 

AISC, Before By-product Credits (1)

 

 

42,449

 

 

 

 

 

 

42,449

 

 

 

42,499

 

 

 

 

 

 

42,499

 

 

 

126,881

 

 

 

 

 

 

 

126,881

 

 

 

141,159

 

 

 

 

 

 

141,159

 

By-product credits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Silver

 

 

(163

)

 

 

 

 

 

(163

)

 

 

(183

)

 

 

 

 

 

(183

)

 

 

(489

)

 

 

 

 

 

 

(489

)

 

 

(390

)

 

 

 

 

 

(390

)

Total By-product credits

 

 

(163

)

 

 

 

 

 

(163

)

 

 

(183

)

 

 

 

 

 

(183

)

 

 

(489

)

 

 

 

 

 

 

(489

)

 

 

(390

)

 

 

 

 

 

(390

)

Cash Cost, After By-product Credits

 

$

36,025

 

 

$

 

 

$

36,025

 

 

$

39,443

 

 

$

 

 

$

39,443

 

 

$

112,188

 

 

 

$

 

 

$

112,188

 

 

$

110,939

 

 

$

 

 

$

110,939

 

AISC, After By-product Credits

 

$

42,286

 

 

$

 

 

$

42,286

 

 

$

42,316

 

 

$

 

 

$

42,316

 

 

$

126,392

 

 

 

$

 

 

$

126,392

 

 

$

140,769

 

 

$

 

 

$

140,769

 

Divided by gold ounces produced

 

 

21

 

 

 

 

 

 

21

 

 

 

23

 

 

 

 

 

 

23

 

 

 

66

 

 

 

 

 

 

 

66

 

 

 

68

 

 

 

 

 

 

68

 

Cash Cost, Before By-product Credits, per Gold Ounce

 

$

1,762

 

 

$

 

 

$

1,762

 

 

$

1,709

 

 

$

 

 

$

1,709

 

 

$

1,714

 

 

 

$

 

 

$

1,714

 

 

$

1,641

 

 

$

 

 

$

1,641

 

By-product credits per ounce

 

 

(8

)

 

 

 

 

 

(8

)

 

 

(8

)

 

 

 

 

 

(8

)

 

 

(7

)

 

 

 

 

 

 

(7

)

 

 

(6

)

 

 

 

 

 

(6

)

Cash Cost, After By-product Credits, per Gold Ounce

 

$

1,754

 

 

$

 

 

$

1,754

 

 

$

1,701

 

 

$

 

 

$

1,701

 

 

$

1,707

 

 

 

$

 

 

$

1,707

 

 

$

1,635

 

 

$

 

 

$

1,635

 

AISC, Before By-product Credits, per Gold Ounce

 

$

2,067

 

 

$

 

 

$

2,067

 

 

$

1,833

 

 

$

 

 

$

1,833

 

 

$

1,930

 

 

 

$

 

 

$

1,930

 

 

$

2,081

 

 

$

 

 

$

2,081

 

By-product credits per ounce

 

 

(8

)

 

 

 

 

 

(8

)

 

 

(8

)

 

 

 

 

 

(8

)

 

 

(7

)

 

 

 

 

 

 

(7

)

 

 

(6

)

 

 

 

 

 

(6

)

AISC, After By-product Credits, per Gold Ounce

 

$

2,059

 

 

$

 

 

$

2,059

 

 

$

1,825

 

 

$

 

 

$

1,825

 

 

$

1,923

 

 

 

$

 

 

$

1,923

 

 

$

2,075

 

 

$

 

 

$

2,075

 

 

In thousands (except per ounce amounts)

 

Three Months Ended September 30, 2024

 

 

Three Months Ended June 30, 2024

 

 

Nine Months Ended September 30, 2024

 

 

Nine Months Ended September 30, 2023

 

 

 

Total
Silver

 

 

Total
Gold and
Other

 

 

Total

 

 

Total
Silver

 

 

Total
Gold and
Other

 

 

Total

 

 

Total
Silver

 

 

Total
Gold and
Other

 

 

Total

 

 

Total
Silver

 

 

Total
Gold and
Other

 

 

Total

 

Total cost of sales

 

$

132,692