Hecla Mining Company · NYSE:HL
Hecla Mining — Gold Forum Americas 2021
27 slides from Hecla Mining's conference presentation, Sep 13, 2021
Slide 1: Gold Forum Americas: United States' Leading Silver Producer
GOLD FORUM AMERICAS United States’ Leading Silver Producer September 13, 2021 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 Statement Regarding Forward Looking Statements (Cont’d) 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
Slide 4: Why Invest in Hecla?
WHY INVEST IN HECLA? Hecla is unique to other silver miners, ETFs and physical silver Primarily U.S. based operations – the right jurisdiction for risk and ESG Will be carbon neutral this quarter Highest-grade silver miner in the world with the third largest resource base Long-lived mines wi
Slide 5: Hecla Is the Leader in Metal Produced per Ton of GHG
HECLA IS THE LEADER IN METAL PRODUCED PER TON OF GHG Highest-grade silver mines generate more benefit with smaller footprint Silver-equivalent ounces /Ton GHG Gold-equivalent ounces/Ton GHG 1.2 500 450 1.2 6 1 400 350 1 5 0.8 300 0.8 4 0.6 250 200 0.6 3 0.4 150 0.4 2 100 0.2 0.2 1 50 0 0 0 0 Hecla C
Slide 6: Comparison to Peers – Reserves and Ore Grades
COMPARISON TO PEERS – RESERVES AND ORE GRADES Hecla has highest reserve grade and third largest reserve base Reserves & Reserve Grade AgEq Reserves (mmoz) AgEq Reserve Grade (g/t) 1,297 587 1,138 441 430 376 369 354 516 511 147 130 291 158 158 133 36 103 104 83 Fresnillo Pan American Hecla Coeur For
Slide 7: Hecla Mines >40% of All Silver Produced in the USA
HECLA MINES >40% OF ALL SILVER PRODUCED IN THE USA Half of the world’s production is from Mexico, Peru and China; U.S. production is scarce 2020 U.S. Silver Production Hecla’s Share of U.S. Production (Moz) 13.5 43% 57% Hecla Other 6.5 3 Countries. Produce ~50% of World Production U.S. Produces 4% 3
Slide 8: Near-Record Second Quarter: 2nd Best on Multiple Metrics
NEAR-RECORD SECOND QUARTER: 2nd BEST ON MULTIPLE METRICS Strong prices, production and cost management led to performance; guidance improved Near-Record • Second highest Sales of $218.0 million, Gross Profit of $59.3 million, Adjusted EBITDA(1) of $84.0 million, Cash Flow from Operations of $86.3 Qu
Slide 9: Greens Creek: Consistent, Strong Performance
GREENS CREEK: CONSISTENT, STRONG PERFORMANCE Cash flow from operations of $276 million and Free Cash Flow $255 million in the last 5 quarters • Fourth highest quarterly free cash flow of $63.5 million since 2008 • Despite lower grades, lowered guidance for Cash Cost and AISC again due to higher by-p
Slide 10: Hecla's Tax Characteristics Are Not Recognized
HECLA’S TAX CHARACTERISTICS ARE NOT RECOGNIZED Tax expense and paid taxes among the lowest and a tax asset that is not on the balance sheet Current Tax Expense: Hecla & Peers 2018-2020 ($ millions) Fresnillo Pan American Silver Coeur Hecla SSR Mining First Majestic Silver Fortuna Silver (7) (8) (5)
Slide 11: Hecla Is Increasing Silver Production
HECLA IS INCREASING SILVER PRODUCTION Lucky Friday production tripled over last year, expected to be 75% more in 2021 and 5 million ounces by 2023, 2.5 times 2020 production 30 Vein - *AgEq Grade (opt) 20 Years Past Mining < 10 10 - 20 Almost 20 - 30 6500 Level 30 - 35 1000 feet > 35 @ +35 Oct. 12,
Slide 12: Hecla's 2021 Exploration
HECLA’S 2021 EXPLORATION 20 Drill rigs company wide focused on expanding and discovery of resources Nevada • Drilling the new discovery at Midas • Defining targets at Aurora • Development to Hatter Graben for exploration drilling Greens Creek • Expanding and upgrading resources in the Upper Plate, 9
Slide 13: Leading Dividend Policy Is Improved Further
LEADING DIVIDEND POLICY IS IMPROVED FURTHER More cash returned to shareholders as dividend yield increases synchronously with silver prices • Industry’s only silver linked dividend policy that pays an annual normal dividend ($0.015 per share) plus a silver price linked dividend that commences at $20
Slide 14: Reddit Silver Squeeze Demonstrated Brand Value
REDDIT SILVER SQUEEZE DEMONSTRATED BRAND VALUE Highest performer with a small short position and continued outperformance Share Price Performance on February 1st & Share Price Performance January 29th – September 3rd Shares Short as a % of Total Float* 65% 30% 28% 25.0% 26% 45% 25% 23% 21.8% 20.0% 2
Slide 15: A Very Short History on Silver Demand
A VERY SHORT HISTORY ON SILVER DEMAND Despite declining photography demand, silver industrial and investment demand has been in a secular bull market since 2000 and is stronger in 2021 and the future Five distinct periods of silver demand, three that are strengthening • Monetary by governments (2000
Slide 16: Renewable Energy Gains Momentum – Solar Projected for the Largest Growth
RENEWABLE ENERGY GAINS MOMENTUM – SOLAR PROJECTED FOR THE LARGEST GROWTH Global policies are favoring renewable energy • In the U.S., renewable energy projected to double from 21% in 2020 to 42% by 2050 • Solar energy generation as a percentage of renewable energy forecast to increase 3x by 2050 fro
Slide 17: Silver – Widening Gap Between Supply & Demand
SILVER – WIDENING GAP BETWEEN SUPPLY & DEMAND Gap expected to increase with continued trend of industrial demand growth of 2.0% • 2019 saw a total supply of 1,023 Moz and total demand of 1,074 Moz • Silver’s total demand in 2030 is expected to reach ~1,147 Moz if demand stays on the last decade tren
Slide 18: Why Invest in Hecla? We Mine
WHY INVEST IN HECLA? Hecla is unique silver miner We mine: The Right metals Silver is the right metal for a renewable energy future Produce 40% of silver mined in the US In the Right jurisdictions Mines located in the right geographical addresses with low risk For investment attractivene
Slide 19: Appendix
Appendix NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 19
Slide 20: Endnotes
ENDNOTES 1. Adjusted EBITDA is a non-GAAP measurement, a reconciliation of which to net income, the most comparable GAAP measure, can be found in the Appendix. Adjusted EBITDA is a measure used by management to evaluate the Company's operating performance but should not be considered an alternative
Slide 21: Free Cash Flow (Non-GAAP) Reconciliation
FREE CASH FLOW (NON-GAAP) RECONCILIATON Reconciliation of Cash provided by operating activities (GAAP) to Free Cash Flow (non-GAAP) Three Months Ended Q2 2021 Q1 2021 Q4 2020 Q3 2020 Q2 2020 Cash Flow from Operations $ 86,304 $ 37,936 $ 64,901 $ 73,439 $ 37,526 Less: Additions to properties, plants,
Slide 22: Free Cash Flow (Non-GAAP) Reconciliation
FREE CASH FLOW (NON-GAAP) RECONCILIATON Reconciliation of Cash provided by operating activities (GAAP) to Free Cash Flow (non-GAAP) Three Months Ended Dollars are in thousands Q2 2021 Q1 2021 Q4 2020 Q3 2020 Q2 2020 Greens Creek Cash provided (used) by operating activities 68,521 44,345 58,288 67,14
Slide 23: 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) Twelve Months Ended Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Net (loss) income $ (58,705) $ (25,561) $ (16,790) $ 19,366 $ 34,179 Plus: Interest e
Slide 24: Cash Cost and AISC Reconciliation to GAAP
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-pro
Slide 25: Cash Cost and AISC Reconciliation to GAAP
CASH COST AND AISC RECONCILIATION TO GAAP Total Silver and 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
Slide 26: Cash Cost and AISC Reconciliation to GAAP
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 27: Gold Forum Americas: United States' Leading Silver Producer
GOLD FORUM AMERICAS United States’ Leading Silver Producer September 2021 RESPONSIBLE. SAFE. INNOVATIVE. NYSE: HL