Hecla Mining Company · NYSE:HL
Hecla Mining — Q1 2013 Earnings Presentation
34 slides from Hecla Mining's earnings presentation, May 10, 2013
Slide 1: First Quarter 2013 Earnings Conference Call
F I R S T Q U AR TE R O V E R V I EW F I N AN C I AL R E V I EW O P E R ATI O N S R E V I EW E X P L O RATI O N & P R E - D EVE LOPME NT U P D ATE First Quarter 2013 Earnings Conference Call May 10, 2013
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, anticipated payments, litigation outcome (including settlement negotiations), production, sales of assets, exploration results an
Slide 3: Q1 2013 - Highlights
HECLA MINING COMPANY Q1 2013 - Highlights Successful restart of Lucky Friday Greens Creek produced 1.8 million ounces of silver during first quarter – 34% higher than last year’s first quarter – at a cash cost of $5.02 per ounce (1) Entered into an agreement to acquire Aurizon Mines Ltd. Exp
Slide 4: Hecla after Aurizon Acquisition
HECLA MINING COMPANY Hecla after Aurizon Acquisition • Two silver and one gold mine • Long-lived assets all with mine lives of ten years or Growth from more Quality Assets • Strong organic growth potential • Goal of silver production growth to 15.0 million ounces by 2017 • Robust free cash flow (1)
Slide 5: Senior Notes Overview
HECLA MINING COMPANY Senior Notes Overview Peer Comparison Amount Current Issuer Date Issued Coupon Maturity Raised1 Ratings 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 B2/B+ Eldorado Gold 10-Dec-12 6.125% Sr. Notes 15-Dec-20 $600 Ba3/BB IAMGOLD
Slide 6: Financial Review
HECLA MINING COMPANY Financial Review 6 Q1 2013 Conference Call
Slide 7: Q1 2013 - Total Revenue $76.5 million
HECLA MINING COMPANY Q1 2013 - Total Revenue $76.5 million Consolidated 17% 11% 53% 19% Greens Creek Silver Gold Lead Zinc Lucky Friday Based on Realized Prices Q1/2013: 18% Silver $ 28.86/oz 7% Gold $ 1,620/oz 27% 10% Zinc $ 0.93/lb 53% Lead $ 1.07/lb 67% 20% 7 Q1 2013 Conference Call
Slide 8: Q1 2013 - Realized Metals Prices
HECLA MINING COMPANY Q1 2013 - Realized Metals Prices Silver Gold ($/oz) ($/oz) $36.59 $1,751 -27% -8% $28.86 $1,620 Q1 2012 Q1 2013 Q1 2012 Q1 2013 Zinc Lead ($/lb) ($/lb) $0.95 $1.07 -2% $0.93 7% $1.00 Q1 2012 Q1 2013 Q1 2012 Q1 2013 8 Q1 2013 Conference Call
Slide 9: Q1 2013 - Continued Strong Margins
HECLA MINING COMPANY Q1 2013 - Continued Strong Margins $40 $35.30 $35 Strong Cash Margins $32.11 $28.86 $30 $22.70 $25 97% 92% 76% $20 $13.78 $/oz $15.63 106% $34.15 $29.41 $21.84 $14.40 $15 $24.16 71% 88% $10 120% $10.20 $16.59 $13.72 $5 $0 $1.91 $2.70 $4.20 ($1.46) $1.15 $7.02 ($2.81) ($5) 2007 2
Slide 10: Q1 2013 - Cash Flow
HECLA MINING COMPANY Q1 2013 - Cash Flow Cash Provided by Operating Activities (millions) $41.4 $35.2 $11.4 $2.6 ($10.2) Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 10 Q1 2013 Conference Call
Slide 11: Q1 2013 - Net Income
HECLA MINING COMPANY Q1 2013 - Net Income Net Income Basic Earnings Per Share (millions) $12.6 $11.1 $0.04 $0.04 Q1 2012 Q1 2013 Q1 2012 Q1 2013 11 Q1 2013 Conference Call
Slide 12: Strong Balance Sheet
HECLA MINING COMPANY Strong Balance Sheet Cash and Cash Equivalents (millions) $279 $233 $232 $191 $169 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 12 Q1 2013 Conference Call
Slide 13: Cash Flow Usage
HECLA MINING COMPANY Cash Flow Usage Cash Bridge Q1 2013 (US$mm) $300 $250 $171 $33.31 $25.8 $191 $200 $169 $6.5 $5.3 $4.8 $2.6 $3.7 $7.0 $150 $100 $50 $- Q1/2013 Adjusted Capex Exploration Aurizon Pre-development Dividends Purchase of Other Q1/2013 Beginning Cash EBITDA Acquisition Costs Investment
Slide 14: Operations Review
HECLA MINING COMPANY Operations Review 14 Q1 2013 Conference Call
Slide 15: Successful Restart of Lucky Friday
HECLA MINING COMPANY Successful Restart of Lucky Friday Production recommenced in February Silver production in Q1 of 120,000 ounces at cash cost of $36.55 per ounce(1) Expect production to ramp up and costs to lower through first half 2013 Expect full year production of more than 2 million
Slide 16: Upgrades to the Lucky Friday Ramp System
HECLA MINING COMPANY Upgrades to the Lucky Friday Ramp System 16 Q1 2013 Conference Call
Slide 17: Greens Creek - Silver Production up 34%
HECLA MINING COMPANY Greens Creek - Silver Production up 34% Silver production of 1.8 million ounces, up 34% from a year ago Avg. cash cost of $5.02 per ounce(1) Mining and milling costs per ton up 13% and 16%, respectively, due to generation of more power on-site Lower zinc and lead product
Slide 18: Exploration and Pre-Development Update
HECLA MINING COMPANY Exploration and Pre-Development Update 18 Q1 2013 Conference Call
Slide 19: Greens Creek - 200 South
HECLA MINING COMPANY Greens Creek - 200 South 200 South Reserve Model Upper Limb 200 South Bench Location View Looking North Lower Limb 200 South Vertical Limb 500 Feet View Looking East 19 Q1 2013 Conference Call
Slide 20: Greens Creek - Deep Southwest
HECLA MINING COMPANY Greens Creek - Deep Southwest Southwest Bench Lower Southwest Deep Southwest Location View Looking North 200 South Model 500 Feet View Looking North/Northwest 20 Q1 2013 Conference Call
Slide 21: San Sebastian (Mexico) - Middle Vein
HECLA MINING COMPANY San Sebastian (Mexico) - Middle Vein 21 Q1 2013 Conference Call
Slide 22: San Sebastian - Middle Vein and Hugh Zone
HECLA MINING COMPANY San Sebastian - Middle Vein and Hugh Zone 500 Feet Middle Vein Middle Vein Access Ramp Hugh Zone Access Ramp Existing excavations Middle Vein 500 Feet Plan View Hugh Zone Existing excavations Hugh Zone Middle Vein Access Ramp Access Ramp Hugh Zone Cross Section - looking East 22
Slide 23: San Juan Silver (Colorado) - Bulldog Decline
HECLA MINING COMPANY San Juan Silver (Colorado) - Bulldog Decline 23 Q1 2013 Conference Call
Slide 24: A New Hecla
HECLA MINING COMPANY A New Hecla 24 Q1 2013 Conference Call
Slide 25: North American Focused Asset Portfolio
HECLA MINING COMPANY North American Focused Asset Portfolio All operations in mining-friendly jurisdictions 25 Q1 2013 Conference Call
Slide 26: Strong Investment Fundamentals
HECLA MINING COMPANY Strong Investment Fundamentals Portfolio of Three High Quality, Operating in Long-Life Low Political Free Cash Flow Operations Risk Jurisdictions Strong Cash Flow Generation Low Risk, Stable Operations 1 7 2 High Secure Multiple Cash Revenue Margins 6 Growth and Strong Credit 3
Slide 27: Appendix
F I R S T Q U AR TE R O V E R V I EW F I N AN C I AL R E V I EW O P E R ATI O N S R E V I EW E X P L O RATI O N & P R E - D EVE LOPME NT U P D ATE Appendix
Slide 28: Q1 2013 - Exploration Program
HECLA MINING COMPANY Q1 2013 - Exploration Program The first quarter 2013 exploration program focused on: Continued expansion of mineralization along the 5250 and 200 South trends at Greens Creek with the delineation of the newly discovered Deep Southwest zone. At Greens Creek definition drillin
Slide 29: Q1 2013 - Pre-Development Programs
HECLA MINING COMPANY Q1 2013 - Pre-Development Programs The first quarter 2013 pre-development programs were focused on: Metallurgical testing of the Middle vein and Hugh zone ores at San Sebastian to determine the characteristics and appropriate processing methods and mill design. Hydrology stu
Slide 30: Reserves & Resources Update (on Dec. 31, 2012)
HECLA MINING COMPANY Reserves & Resources Update (on Dec. 31, 2012) Silver Gold Lead Zinc Silver Gold Lead Zinc Tons (Oz/ton) (Oz/ton) (%) (%) (Ounces) (Ounces) (Tons) (Tons) Proven and Probable Reserves Proven Ore Reserves Lucky Friday, USA 2,206,600 12.1 — 7.4 2.7 26,778,900 — 163,350 58,560 Green
Slide 31: Total Cash Cost GAAP Reconciliation
HECLA MINING COMPANY Total Cash Cost GAAP Reconciliation 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 (1) Total cash costs $ 13,346 $ 17,262 $ 10,934 $ (
Slide 32: Total Cash Cost GAAP Reconciliation
HECLA MINING COMPANY Total Cash Cost GAAP Reconciliation Reconciliation of Cash Costs per Ounce to Generally Accepted Accounting Principles (GAAP) (dollars and ounces in thousands, except per ounce - unaudited) Q1/13 Q1/12 1 Total cash costs $ 13,346 $ 2,976 Divided by silver ounces produced 1,901 1
Slide 33: Adjusted Earnings Reconciliation
HECLA MINING COMPANY Adjusted Earnings Reconciliation Reconciliation of Net Income Applicable to Common Shareholders (GAAP) to (dollars and ounces in thousands, except per ounce - unaudited) Three Months Ended March 31 2013 2012 Net income applicable to common shareholders (GAAP) $ 10,956 $ 12,434 A
Slide 34: Hecla Adjusted EBITDA Reconciliation
HECLA MINING COMPANY Hecla Adjusted EBITDA Reconciliation Reconciliation of Adjusted EBITDA to Generally Accepted Accounting Principles (GAAP) Three Months Ended March 31, 2013 2012 Net Income $ 11,094 $ 12,572 Plus: Interest expense 704 467 Plus: Income taxes 7,415 7,315 Plus: Depreciation, depleti