Hecla Mining Company · NYSE:HL
Hecla Mining — Q4 2021 Earnings Presentation
35 slides from Hecla Mining's earnings presentation, Feb 22, 2022
Slide 1: Fourth Quarter and Full-Year 2021 Earnings Conference Call
FOURTH QUARTER and FULL-YEAR 2021 Earnings Conference Call February 22, 2022 RESPONSIBLE. SAFE. INNOVATIVE. NYSE: HL
Slide 2: Cautionary Statements
CAUTIONARY STATEMENTS Cautionary Statement Regarding Forward Looking Statements This presentation 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
Slide 3: Cautionary Statements (cont'd)
CAUTIONARY STATEMENTS (cont’d) Cautionary Note Regarding Reserves and Resources This presentation uses the terms “mineral resources,” “measured mineral resources,” “indicated mineral resources” and “inferred mineral resources.” Mineral resources that are not mineral reserves do not have demonstrated
Slide 4: 2021: Record Revenues, 2nd Highest Silver Reserves
2021: RECORD REVENUES, 2nd HIGHEST SILVER RESERVES Silver – Metal for Largest U.S. Silver ESG Focus Record Year Green Future Producer • Silver is key to clean • Hecla produces >40% • Strong safety • Developed and green energy of U.S. silver performance, All- Underhand Closed transition • Largest sil
Slide 5: Reserves: 2021 vs. 2020
RESERVES: 2021 vs. 2020 2nd highest silver and gold reserves, mining depletion replaced by increased reserves • Greens Creek silver reserves up +12%, second highest since 2002 • Company wide measured & indicated resources declined due to conversion to reserves • Inferred resources increased 8% for s
Slide 6: Financial Review
Financial Review NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 6
Slide 7: Financial Strength and Flexibility
FINANCIAL STRENGTH AND FLEXIBILITY Solid operational performance delivers strong balance sheet • Record revenues of $807 million, +16% over 2020 • Record adjusted EBITDA of $279 million, +20% over 2020; net debt to adjusted EBITDA ratio of 1.1x, well below the 2.0x target(1) • Cash flow from operati
Slide 8: Capital and Production Costs Are Stable
CAPITAL AND PRODUCTION COSTS ARE STABLE Impact from inflation is relatively low due to low tonnage, high-grade mines • Increase in silver production not tied to any significant increase in capital • No significant increase in planned production costs in 2022 • Stable capital costs with no planned la
Slide 9: Strong Free Cash Flow Generation
STRONG FREE CASH FLOW GENERATION Positive free cash flow generation from all mines over last five quarters(2) Greens Creek Casa Berardi Lucky Friday* Generated $236 million in Free Cash Flow since Generated $43 million in Free Cash Flow since Generated $33 million in Free Cash Flow in 2021 Q4/2020 Q
Slide 10: Operations Review
Operations Review NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 10
Slide 11: Greens Creek: Another Solid Year
GREENS CREEK: ANOTHER SOLID YEAR Consistent performance, low costs drive free cash flow generation at all silver prices • Solid finish to 2021, production met guidance, costs beat guidance – 9.2 Moz silver produced • Cost of sales $216 million • Cash costs per silver oz, after by-product credits, ($
Slide 12: Lucky Friday on Track to Be 5 Moz/Yr Producer
LUCKY FRIDAY ON TRACK TO BE 5 Moz/YR PRODUCER Underhand Closed Bench (UCB) mining method expected to improve safety, tonnage and production • UCB method’s success with higher grades mined at depth position Lucky Friday to be a flagship asset for the next decade • 2022E production 1.2x 2021, 2.2x 202
Slide 13: UCB Mining Method
UCB MINING METHOD Isometric view showing two of the four UCB stopes that produce the 30 Vein • Large scale blasting proactively manages seismic risk – miners work inside the de-stressed zone. • Mining front advances down-dip, under engineered backfill. NYSE: HL This information is confidential; it i
Slide 14: UCB Mining Method
UCB MINING METHOD Same stopes, two weeks later • Dilution is controlled by bolting the ribs as mining advances along strike and down dip. • High degree of mechanization and reduced seismic delays improve productivity. NYSE: HL This information is confidential; it is not to be relied on by any 3rd pa
Slide 15: Casa Berardi: Strong Production Performance in 2021
CASA BERARDI: STRONG PRODUCTION PERFORMANCE IN 2021 Production optimization focus delivered results, 16% increase in gold reserves • Mill achieved record throughput at 4,187 tpd; Mill recoveries +4% • 2021: 134.5 Koz gold produced • Cost of sales $230 million • Cash costs per gold oz, after by-produ
Slide 16: Guidance
Guidance NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 16
Slide 17: Guidance: Growing Silver & Gold Production
GUIDANCE: GROWING SILVER & GOLD PRODUCTION High silver margins projected despite COVID-19 and inflation costs Silver Production Gold Production Silver Equivalent Consolidated Production Outlook * (Moz) (Koz) (Moz)8 Gold Equivalent (Koz)8 2022 Total 12.9 – 13.5 165 - 175 39.3 – 40.7 509 – 527 2023 To
Slide 18: Appendix
Appendix NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 18
Slide 19: Endnotes
ENDNOTES 1. Net debt to adjusted EBITDA is a non-GAAP measurement, a reconciliation of adjusted EBITDA and net debt to the closest GAAP measurements of net income (loss) and debt can be found in the appendix. It is an important measure for management to measure relative indebtedness and the ability
Slide 20: ESG: Small Footprint, Large Benefit
ESG: SMALL FOOTPRINT, LARGE BENEFIT Environment, Community and Safety are three pillars of our ESG program Small Environment Safety Large Community Benefit Footprint • Well-established safety culture • Expected to be net neutral on • Support >2,300 families • Casa Berardi awarded the John T. Ryan em
Slide 21: Adjusted EBITDA Reconciliation to GAAP
ADJUSTED EBITDA RECONCILIATION TO GAAP Reconciliation of Net Income (Loss) (GAAP) and Debt (GAAP) to Adjusted EBITDA (non-GAAP) Dollars in thousands (USD) FY 2020 FY 2021 Net (loss) income $ (9,457) $ 35,095 Plus: Interest expense 49,569 41,945 Plus/(Less): Income and mining taxes 8,199 (29,569) Plu
Slide 22: Cash Cost and AISC Reconciliation to GAAP - Silver
CASH COST AND AISC RECONCILIATION TO GAAP Silver Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By- product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Costs, Before By-pr
Slide 23: Cash Cost and AISC Reconciliation to GAAP - Gold
CASH COST AND AISC RECONCILIATION TO GAAP Gold Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By- product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Costs, Before By-prod
Slide 24: Free Cash Flow (Non-GAAP) Reconciliation
FREE CASH FLOW (NON-GAAP) RECONCILIATON Greens Creek, Casa Berardi and Lucky Friday Reconciliation of Cash provided by operating activities (GAAP) to Free Cash Flow (non-GAAP) Three Months Ended in thousands Q4 2021 Q3 2021 Q2 2021 Q1 2021 Q4 2020 Greens Creek Cash provided (used) by operating activ
Slide 25: Free Cash Flow (Non-GAAP) Reconciliation - Consolidated
FREE CASH FLOW (NON-GAAP) RECONCILIATON Consolidated Reconciliation of Cash provided by operating activities (GAAP) to Free Cash Flow (non-GAAP) in thousands Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Cash provided by operating activities $ 64,901 $ 37,936 $ 86,304 $ 42,742 $ 53,355 Less: Capital expen
Slide 26: Free Cash Flow (Non-GAAP) Reconciliation
FREE CASH FLOW (NON-GAAP) RECONCILIATON Greens Creek and Casa Berardi Reconciliation of Cash provided by operating activities (GAAP) to Free Cash Flow (non-GAAP) 2021 2020 2019 Greens Creek Casa Berardi Greens Creek Casa Berardi Greens Creek Casa Berardi Cash provided by operating activities $ 204,1
Slide 27: Cash Cost and AISC Reconciliation to GAAP - Greens Creek
CASH COST AND AISC RECONCILIATION TO GAAP Greens Creek Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Costs, Before
Slide 28: Cash Cost and AISC Reconciliation to GAAP - Lucky Friday
CASH COST AND AISC RECONCILIATION TO GAAP Lucky Friday Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Costs, Before
Slide 29: Cash Cost and AISC Reconciliation to GAAP - Casa Berardi
CASH COST AND AISC RECONCILIATION TO GAAP Casa Berardi Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Costs, Before
Slide 30: Cash Cost and AISC Reconciliation: 2022 Estimates
CASH COST AND AISC RECONCILIATION TO GAAP 2022 silver and gold estimates Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustain
Slide 31: 2022 Guidance: Production and Costs
2022 GUIDANCE: PRODUCTION AND COSTS 2022 Production Outlook Silver Production Gold Production Silver Equivalent Gold Equivalent (Koz)6 (Moz) (Koz) (Moz)6 Greens Creek* 8.6 – 8.9 40 – 43 20.7 – 21.2 268 – 275 Lucky Friday* 4.3 – 4.6 N/A 8.9 – 9.3 116 – 120 Casa Berardi N/A 125 - 132 9.7 – 10.2 125 -
Slide 32: Proven & Probable Mineral Reserves
PROVEN & PROBABLE MINERAL RESERVES(1) (On December 31, 2021 unless otherwise noted) Investors are cautioned that Reserves and Resources are as of December 31, 2021, and are dynamic during the year due to mining depletion, changing metal prices, changing costs or project NYSE: HL economics, and new d
Slide 33: Measured and Indicated Mineral Resources
MEASURED AND INDICATED MINERAL RESOURCES (On December 31, 2021 unless otherwise noted) Measured Resources (8) Silver Gold Lead Zinc Copper Silver Gold Lead Zinc Copper Asset Location Ownership Tons (000) (oz/ton) (oz/ton) % % % (000 oz) (000 oz) (Tons) (Tons) Tons Greens Creek (11,12) United States
Slide 34: Inferred Mineral Resources
INFERRED MINERAL RESOURCES (On December 31, 2021 unless otherwise noted) Inferred Resources (10) Silver Gold Lead Zinc Copper Silver Gold Lead Zinc Copper Asset Location Ownership Tons (000) (oz/ton) (oz/ton) % % % (000 oz) (000 oz) (Tons) (Tons) Tons Greens Creek (11,12) United States 100.0% 2,152
Slide 35: Mineral Resources Footnotes
MINERAL RESOURCES FOOTNOTES NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 35