Hecla Mining Company · NYSE:HL

Hecla Mining — Mineral Exploration Roundup 2014

66 slides from Hecla Mining's conference presentation, Jan 29, 2014

  1. Slide 1: Growing Production and Reserves in Mining-Friendly Jurisdictions

    NEW HECLA FINANCIAL STRENGTH HECLA PROPERTIES STRONG INVESTMENT FUNDAMENTALS Growing Production and Reserves in Mining-Friendly Jurisdictions January 2014

  2. Slide 2: Cautionary Statements

    HECLA MINING COMPANY Cautionary Statements Cautionary Note Regarding Forward Looking Statements Statements made which are not historical facts, such as strategies, plans, production, exploration results and plans, costs, and prices or sales performance are "forward- looking statements" within the me

  3. Slide 3: A New Hecla

    HECLA MINING COMPANY A New Hecla Long Life Assets, Strong Reserve Growth Low Cost, High Margins Growing Silver and Gold Production Mining-Friendly Jurisdictions 3

  4. Slide 4: North American Focused Asset Portfolio

    HECLA MINING COMPANY North American Focused Asset Portfolio All operations in lower-risk, mining-friendly jurisdictions 4

  5. Slide 5: Strong Reserve Growth 2003 - 2012

    HECLA MINING COMPANY 1 Strong Reserve Growth 2003 - 2012 Silver ounces (millions) Gold ounces (millions)2 2.2 150 233% 175% 45 0.8 2003 2012 2003 2012 1. See Proven and Probable reserves data in the Appendix. 5 2. Includes Casa Berardi’s reserves for 2012.

  6. Slide 6: Q3 2013 - Continued Strong Margins

    HECLA MINING COMPANY Q3 2013 - Continued Strong Margins $40 $35.30 $35 $32.11 Strong Cash Margins $28.86 $30 $25 $22.70 $22.22 97% 92% $20 106% $21.84 76% $16.27 $/oz $34.15 $29.41 67% $15.63 $14.40 $15 $14.82 $24.16 66% $10 88% $10.71 $10.20 71% $13.72 $5 $7.02 $7.40 $4.20 $5.56 $1.91 $2.70 $0 ($1.

  7. Slide 7: Q3 2013 - Peer Cash Cost Comparison

    HECLA MINING COMPANY Q3 2013 - Peer Cash Cost Comparison Hecla anticipates 2013 cash costs to be $6.50/oz silver1 $14.00 2 $13.32 Reported Cash Costs Q3/2013 $12.00 $11.38 $10.40 $10.00 $8.48 $8.00 $7.40 $7.51 $/oz $6.00 $5.14 $4.00 $2.00 $- Endeavour Hecla Fortuna First Pan American Coeur Silver St

  8. Slide 8: 2010 - Q3 2013 Cash Flow Flexibility

    HECLA MINING COMPANY 2010 - Q3 2013 Cash Flow Flexibility Cash Bridge 2010 - Q3 2013 (US$M) $1,200 Largely Discretionary $551M $1,000 1 $789.2 $800 $600 One-time Expenses $380.9 $219M $400 Other $133.9 Items $36.2 $63M $237.8 $177.6 $200 $104.6 $193.0 $26.4 $12.9 $50.3 $- 2010 Beginning Adjusted Cap

  9. Slide 9: Solid Cash Position

    HECLA MINING COMPANY Solid Cash Position $600 $544 Cash & Cash Equivalents as of Q3/2013 (millions) $500 Hecla has $338M of liquidity1 $421 $400 $300 $238 $211 $200 $100 $68 $42 $25 $- Silver Standard Pan American Hecla Coeur First Majestic Fortuna Endeavour Silver Cash and Cash Equivalents Q3/2013

  10. Slide 10: Diversified Revenue: Silver, Gold, Lead and Zinc

    HECLA MINING COMPANY Diversified Revenue: Silver, Gold, Lead and Zinc  Diversified revenue stream (silver, gold, lead and zinc) from Consolidated Revenue by Metal 3 mines 3Q 2013  Policy allows hedging of 60% of the next 3 years of lead and zinc production 16% 38% 11%  Currently have ~$300 millio

  11. Slide 11: Large and High Quality Silver Assets

    Silver Reserves - Moz 11 0 20 40 60 80 100 120 Pitarilla (SSRI)* 477 San Bartolome (CDE)* Greens Creek (HL) 1. Reserves capped at 120M ounces Ying (SVM) Dolores (PAA)* La Colorada (PAA) Huaron (PAA) Lucky Friday (HL) Pirquitas (SSRI)* Source: Public filings, *Open pit mines - Palmarejo is both open

  12. Slide 12: Greens Creek - Consistent Performer

    HECLA MINING COMPANY Greens Creek - Consistent Performer Overview Location Admiralty Island, Alaska Deposit Polymetallic, stratiform, massive sulfide Ownership (Since) 100% Hecla (2008) Type Underground 1 Expected Life of Mine 9 years Primary Metal Produced Silver Reserves & Resources (at December 3

  13. Slide 13: Greens Creek: World-Class Silver Mine

    HECLA MINING COMPANY Greens Creek: World-Class Silver Mine 30 Vein Spectacular Performance Over a Variety of Silver Prices $60 #4 Shaft $50 4050 level Past 26 Years1 Next 10 Years $40 Revenue: $3.0 billion 4900 level Continued strong $/oz Net Income: $1.0 billion performance expected $30 Free Cash F

  14. Slide 14: Greens Creek - Underground Exploration

    HECLA MINING COMPANY Greens Creek - Underground Exploration A Cross Section A’ East East Ore Ore Deep 200 South Block Model Deep 200 South Block Model Deep 200 South N A’ Cross section A Deep 200 South 1000 Feet 14

  15. Slide 15: Lucky Friday - Ramping Up Production

    HECLA MINING COMPANY Lucky Friday - Ramping Up Production Overview Location Mullan, Idaho Deposit Silver & base metal bearing vein structures Ownership (Since) 100% Hecla (1958) Type Underground 1 Expected Life of Mine 25 years Silver Production (oz) Silver Reserves & Resources (at December 31, 2012

  16. Slide 16: Lucky Friday - Unlocking Value at Depth

    HECLA MINING COMPANY Lucky Friday - Unlocking Value at Depth Silver Shaft 30 Vein #4 Shaft 4050 level Current mining from 4900 level 5900 level access 5900 level 6500 level 7500 level Looking NW 16 *Assuming prices of $20.00/oz silver, $0.90/lb lead, and $0.80/lb zinc

  17. Slide 17: Casa Berardi - Great New Addition

    HECLA MINING COMPANY Casa Berardi - Great New Addition Overview Location La Sarre, Quebec Deposit Archean, shear & vein hosted gold deposit Ownership (Since) 100% Hecla (June 2013) Type Underground 1 Expected Life of Mine 9 years Primary Metal Produced Gold Reserves & Resources (at December 31, 2012

  18. Slide 18: Casa Berardi - Great Exploration Potential

    HECLA MINING COMPANY Casa Berardi - Great Exploration Potential 18

  19. Slide 19: Response to Metals Price Weakness

    HECLA MINING COMPANY Response to Metals Price Weakness  Decline in precious metals prices led to review of 2013 expenses  Maintained programs with long logistical requirements or short implementation windows  Revised guidance  Capital expenditures reduced by 26% to $163 million  Exploration exp

  20. Slide 20: Silver - The Metal of This Age

    HECLA MINING COMPANY Silver - The Metal of This Age  Has the highest electrical conductivity of all the metals  80% more conductive than aluminum  50% more conductive than gold, 6% more conductive than copper  Critically important in the miniaturization of circuits as electronic items become inc

  21. Slide 21: 2014 Expectations

    HECLA MINING COMPANY 2014 Expectations Cash cost, after by-product Mine 2014E Silver 2014E Gold credits, per silver/gold ounce1 Production (Moz) Production (oz) Greens Creek 6.5 – 7.0 55,000 $6.00 Lucky Friday 3.0 n/a $9.00 Casa Berardi n/a 125,000 $900 per gold oz Company-wide 9.5 – 10.0 180,000 N/

  22. Slide 22: Appendix

    NEW HECLA FINANCIAL STRENGTH HECLA PROPERTIES STRONG INVESTMENT FUNDAMENTALS Appendix

  23. Slide 23: Appendix Table of Contents

    HECLA MINING COMPANY Appendix Table of Contents Appendices Page 1. Management 24 2. Financial Information 25 3. Reserves and Resources Tables 34 4. Silver Landscape 37 5. Exploration 42 6. Silver and Gold Overview 53 7. Zinc Overview 65 23

  24. Slide 24: Seasoned Management Team with Significant Experience

    HECLA MINING COMPANY Appendix 1 Seasoned Management Team with Significant Experience Phillips S. Baker, Jr., has 26 years of Dr. Dean W.A. McDonald, is a geologist with mining experience. He was previously over 30+ years experience. He was VP and CFO of Battle Mountain Gold previously VP of Explorat

  25. Slide 25: Total Cash Cost GAAP Reconciliation

    HECLA MINING COMPANY Appendix 2 Total Cash Cost GAAP Reconciliation Reconciliation of cash cost, after by-product credits, per silver ounce to Generally Accepted Accounting Principles (GAAP) for Greens Creek & Lucky Friday (dollars and ounces in thousands, except per ounce - unaudited) Q3/2013 Q2/20

  26. Slide 26: Total Cash Cost GAAP Reconciliation

    HECLA MINING COMPANY Appendix 2 Total Cash Cost GAAP Reconciliation 1. Includes 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 and marketing expense, on-site genera

  27. Slide 27: Total Cash Cost GAAP Reconciliation

    HECLA MINING COMPANY Appendix 2 Total Cash Cost GAAP Reconciliation 1. Includes 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 and marketing expense, on-site genera

  28. Slide 28: Cash Cost Reconciliation to GAAP - Casa Berardi

    HECLA MINING COMPANY Appendix 2 Cash Cost Reconciliation to GAAP - Casa Berardi Reconciliation of Cash Costs per Ounce to Generally Accepted Accounting Principles (GAAP) (dollars and ounces in thousands, except per ounce - unaudited) Q1/2013 2012 2011 2010 2009 2008 2007 2006 (1) Cash Operating Cost

  29. Slide 29: Total Cash Cost GAAP Reconciliation

    HECLA MINING COMPANY Appendix 2 Total Cash Cost GAAP Reconciliation Reconciliation of cash cost, after by-product credits, per gold ounce after to Generally Accepted Accounting Principles (GAAP) for Casa Berardi (dollars and ounces in thousands, except per ounce - unaudited)(2) 2013 Q4/13 Q3/13 (1)

  30. Slide 30: Hecla Adjusted EBITDA Reconciliation

    HECLA MINING COMPANY Appendix 2 Hecla Adjusted EBITDA Reconciliation Reconciliation of Adjusted EBITDA (non-GAAP) to Net Income (GAAP) Three Months Ended September 30, 2013 2012 Net Income $ (8,458) $ (885) Plus: Interest expense, net of amount capitalized 7,348 591 Plus/(Less): Income taxes (2,542)

  31. Slide 31: Cash Margins at Casa Berardi

    HECLA MINING COMPANY Appendix 2 Cash Margins at Casa Berardi $1,800 $1,658 $1,621 $1,578 $1,600 $1,400 $1,335 $1,145 $1,200 $809 20% $962 $269 50% 58% $915 $1,041 $1,000 66% $/oz $847 $696 $604 $800 $625 53% $514 $600 $448 53% 56% $365 52% $317 51% $400 $1,066 $541 $812 $331 $696 $200 $537 $308 $401

  32. Slide 32: Hecla: Zero Debt Obligations Until 2021

    HECLA MINING COMPANY Appendix 2 Hecla: Zero Debt Obligations Until 2021 Peer Comparison Date Gross Current 1 Issuer Issued Coupon Maturity Proceeds Rating Hecla 12-Apr-13 6.875% Sr. Notes 1-May-21 $500 B2/B Coeur 24-Jan-13 7.875% Sr. Notes 1-Feb-21 $300 B3/BB- Eldorado Gold 10-Dec-12 6.125% Sr. Note

  33. Slide 33: Clearing the Path Forward

    HECLA MINING COMPANY Appendix 2 Clearing the Path Forward Settled Legacy Liabilities Rehabilitated Lucky Friday  Settled environmental liability in  Mine has operated for over 70 the Coeur d’Alene River Basin years in the Silver Valley, Idaho from mining practices ending  Mine was shut down and f

  34. Slide 34: Reserves & Resources Update

    HECLA MINING COMPANY Appendix 3 Reserves & Resources Update (on Dec. 31, 2012 unless otherwise noted) Proven Reserves Tons Silver Gold Lead Zinc Silver Gold Lead Zinc Asset Location Ownership (000) (oz/ton) (oz/ton) % % (000 oz) (000 oz) Tons Tons Greens Creek (a) United States 100.0% 12 9.3 0.10 2.

  35. Slide 35: Reserves & Resources Update

    HECLA MINING COMPANY Appendix 3 Reserves & Resources Update (on Dec. 31, 2012 unless otherwise noted) Measured Resources Tons Silver Gold Lead Zinc Silver Gold Lead Zinc Asset Location Ownership (000) (oz/ton) (oz/ton) % % (000 oz) (000 oz) (Tons) (Tons) Greens Creek (2)(a) United States 100.0% -- -

  36. Slide 36: Reserves & Resources Update

    HECLA MINING COMPANY Appendix 3 Reserves & Resources Update (on Dec. 31, 2012 unless otherwise noted) Inferred Resources Tons Silver Gold Lead Zinc Silver Gold Lead Zinc Asset Location Ownership (000) (oz/ton) (oz/ton) % % (000 oz) (000 oz) (Tons) (Tons) Greens Creek (9)(a) United States 100.0% 3,78

  37. Slide 37: Greens Creek - Among the Highest Grade Silver Deposits

    HECLA MINING COMPANY Appendix 4 Greens Creek - Among the Highest Grade Silver Deposits 37 Source: MEG, BMO Capital Markets (09/09/13)

  38. Slide 38: Higher Silver Reserve Grade Among Peers

    HECLA MINING COMPANY Appendix 4 Higher Silver Reserve Grade Among Peers 38 Source: Company Filings, BMO Capital Markets (11/18/13)

  39. Slide 39: High Grade Long-Life Mines

    HECLA MINING COMPANY Appendix 4 High Grade Long-Life Mines 39 Source: Company Filings, BMO Capital Markets (11/18/13)

  40. Slide 40: Top Largest Silver Deposits

    HECLA MINING COMPANY Appendix 4 Top 25 Largest Silver Deposits Most deposits face political risk / large capital requirements 25 Largest Silver Deposits 1,400 Developed deposits (6 bn oz) 1,200 Undeveloped deposits (10 bn oz) 1,000 Silver ounces (mm) 800 600 400 200 0 Source: Intierra and public fil

  41. Slide 41: Consistent & Predictable Performance

    HECLA MINING COMPANY Appendix 4 Consistent & Predictable Performance Scotia’s Analysis of Silver Company Operating Performance 2010-2012 Total: 7 Total: 6 Total: 6 7 3 5 Total: 3 Total: 2 1 3 1 2 1 1 Total: 0 1 FVI HL PAAS SSRI CDE Average Gold Company 2010-2012 Production Guidance 2010-2012 Cost Gu

  42. Slide 42: Organic Growth - Greens Creek (Alaska)

    HECLA MINING COMPANY Appendix 5 Organic Growth - Greens Creek (Alaska)  Very large and under-explored 27- square-mile land position  Over 30 miles of unexplored mine contact (red-trace) with multiple targets  Surface exploration only resumed East Ridge in 1999 due to establishment of Lil’ Sore No

  43. Slide 43: Exploration - Greens Creek (Alaska)

    HECLA MINING COMPANY Appendix 5 Exploration - Greens Creek (Alaska) Underground Exploration Targets Looking NE East Ore extension SW Bench 5250 South Resource Extension Gallagher 200 South Resource extensions 43

  44. Slide 44: Greens Creek - Surface Exploration

    HECLA MINING COMPANY Appendix 5 Greens Creek - Surface Exploration 44

  45. Slide 45: Greens Creek - Post Deposition

    HECLA MINING COMPANY Appendix 5 Greens Creek - Post Deposition 45

  46. Slide 46: Greens Creek - Surface Exploration (Killer Creek)

    HECLA MINING COMPANY Appendix 5 Greens Creek - Surface Exploration (Killer Creek) 46

  47. Slide 47: Lucky Friday & Silver Valley - Exploration

    HECLA MINING COMPANY Appendix 5 Lucky Friday & Silver Valley - Exploration 47

  48. Slide 48: Lucky Friday - #4 Shaft

    HECLA MINING COMPANY Appendix 5 Lucky Friday - #4 Shaft  #4 Shaft project is engineered to access higher grade ore zones and to take Lucky Friday silver production to 5 million ounces per year in 2017  #4 Shaft construction resumed in Q1/13  Currently at the 5900 level, work on the first of three

  49. Slide 49: Organic Growth - Star Pre-Development (Idaho)

    HECLA MINING COMPANY Appendix 5 Organic Growth - Star Pre-Development (Idaho) Longitudinal Section Looking North Water level - Water level #4 Shaft behind Lucky Friday expansion area 49

  50. Slide 50: Organic Growth - San Sebastian (Mexico)

    HECLA MINING COMPANY Appendix 5 Organic Growth - San Sebastian (Mexico)  185-square-mile land package  Potential extensions to both Middle Vein and Hugh Zone structures  Andrea Vein remains open along strike and at depth 50

  51. Slide 51: Organic Growth - San Juan Silver (Colorado)

    HECLA MINING COMPANY Appendix 5 Organic Growth - San Juan Silver (Colorado)  Includes historic Bulldog mine: produced 25 million ounces of silver before closing in 1985  7.6 million ounces of silver Indicated Resources  33.1 million ounces of silver Inferred Resources • Bulldog decline has broken

  52. Slide 52: New Quebec Gold Assets

    HECLA MINING COMPANY Appendix 5 New Quebec Gold Assets  Gold producer and exploration portfolio in western Quebec  Heva and Hosco West extension  Large in-pit gold resource at Hosco  Additional gold resources at Heva and Hosco West Extension  Attractive exploration potential  Growth potential

  53. Slide 53: Properties of Silver

    HECLA MINING COMPANY Appendix 6 Properties of Silver 53 Source – Clear Science 2010

  54. Slide 54: Mine Production is Key to Silver Supply

    HECLA MINING COMPANY Appendix 6 Mine Production is Key to Silver Supply 1200 Producer Hedging 1992 – 2012 Silver Production (mm oz) Implied Net Disinvestment Increase 1000 Net Government Sales 70% 800 Old Silver Scrap 600 400 60% Mine Production 200 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 200

  55. Slide 55: Top Producing Countries (10 years)

    HECLA MINING COMPANY Appendix 6 Top 5 Producing Countries (10 years)  Mining produced a total of 597.2 mm oz of silver globally in 2003 and nearly 787.0 mm oz in 2012.  Mexico became the largest single country producer in 2010 and produced 162.2 mm oz in 2012. 5% 7% 14% 21% 38% 43% 16% 14% 10% 7%

  56. Slide 56: Top Mines Silver Production

    HECLA MINING COMPANY Appendix 6 Top 15 Mines Produced 152 mm oz 35 2012 Silver Production 30 Silver Production (mm oz) 25 20 15 10 5 0 56 Source: The Silver Institute: World Silver Survey 2012, GFMS, Hecla

  57. Slide 57: Increasing Share of Modern Demand

    HECLA MINING COMPANY Appendix 6 Increasing Share of Modern Demand  Modern demand increased from 260 mm oz in 1992 to 465 mm oz in 2012, an increase of 80%, and an annualized increase of 3.0% 5% 16% 36% 46% 30% 9% Modern Modern 23% 29% 6% 1992 2012 Modern Investment Jewelry & Photography Coins & Med

  58. Slide 58: Silver Consumption per Capita Increases

    HECLA MINING COMPANY Appendix 6 Silver Consumption per Capita Increases Increasing Silver Consumption Per Person in China and India 0.80 0.80 Japan 0.70 0.70 South Korea 0.60 0.60 Silver Ounce Per Capita Silver Ounce Per Capita 0.50 0.50 United Japan 0.40 0.40 States Germany 0.30 0.30 United 0.20 St

  59. Slide 59: Gold: Physical vs. Financial

    HECLA MINING COMPANY Appendix 6 Gold: Physical vs. Financial EAST vs. WEST 1,200 2,500 1,000 Net Imports (China) 2,000 Gold Tonnes 800 600 1,500 400 1,000 200 Gold ETF Holdings 500 - Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 2009 2010 2011 2012 2013 Source: Bloomberg, 2013 data until 11/30/2013 Sour

  60. Slide 60: Solid Gold Grade and Reserves

    HECLA MINING COMPANY Appendix 6 Solid Gold Grade and Reserves Gold Reserves and Grades of Several Canadian Gold Mines 4.50 18.00 4.00 16.00 3.50 14.00 Gold Reserves - Moz 3.00 12.00 Gold Grade - g/t 2.50 10.00 2.00 8.00 1.50 6.00 1.00 4.00 0.50 2.00 - 0.00 Gold Reserves (Moz) Gold Grade (g/t) 60 Sou

  61. Slide 61: Gold Fundamentals

    HECLA MINING COMPANY Appendix 6 Gold Fundamentals 2,000 Q1 - Q3 2012 Q1 - Q3 2013 1,500 Gold Tonnes 1,000 500 - (500) (1,000) Jewelry Technology Physical bar Official coin Medals ETF's & similar Central bank net demand products purchases  Jewelry consumption: Up 20% in the first nine months of 2013

  62. Slide 62: Silver Fundamentals - 2013E vs. 2012

    HECLA MINING COMPANY Appendix 6 Silver Fundamentals - 2013E vs. 2012 700 80 2012 2013E 70 600 Silver - Million oz 500 60 50 400 40 300 30 200 High/Low: 67/32 20 100 Average: 53 10 Current: 62 - Gold/Silver Ratio Jewelry & Modern Coins & ETFs Other Photographic 0 Silverware Medals Investment 3-Jan-11

  63. Slide 63: Silver is a Lifestyle Metal

    HECLA MINING COMPANY Appendix 6 Silver is a Lifestyle Metal Shanghai, China 1990 2010  Silver is not an infrastructure material such as cement, steel, copper; its use is further downstream and is partly tied to discretionary spending  We expect Chinese modern demand to increase to approximately 12

  64. Slide 64: Modern Silver Demand Increases with Increasing Income

    HECLA MINING COMPANY Appendix 6 Modern Silver Demand Increases with Increasing Income 30% 2010 Silver Consumption per Capita 1.4 India World Average Income 25% per Capita Distribution of Population 1.2 China 20% 1.0 0.8 (oz) 15% 0.6 10% Brazil, United Russia States 0.4 5% 0.2 0% 0.0 $50000+ $0 $2,00

  65. Slide 65: Zinc Supply - Mining

    HECLA MINING COMPANY Appendix 7 Zinc Supply - Mining  Forecasted mine production vs. forecasted market demand  Demand is expected to exceed mine production around 2018 Major Mine Shutdowns Annual Mine Capacity (MT) Perseverance 115K Brunswick 240K Century 510K Lisheen 175K Source: Wood Mackenzie J

  66. Slide 66: Zinc Supply - US Production

    HECLA MINING COMPANY Appendix 7 Zinc Supply - US Production  Greens Creek is the 3rd largest zinc producer in the US % of USA Zinc Production 2012 Comparison of 2012 Zinc Production 140 Doe Run 4.00% 122 Gordonsville 120 Zinc Production (thousands tonnes) 6.62% Greens 100 Creek 80 8.04% 80 58 60 Ea

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