Hecla Mining Company · NYSE:HL
Hecla Mining — JPM Energy, Power, and Renewables Conference 2023
34 slides from Hecla Mining's conference presentation, Jun 22, 2023
Slide 1: Hecla Mining Company
HECLA MINING COMPANY United States’ Largest Silver Producer and Soon To Be Canada’s JPM Energy, Power, and Renewables Conference 2023 June 22, 2023 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) Notice Regarding Reserves and Resources Unless otherwise stated herein, the reserves stated in this release represent estimates at December 31, 2022, which could be economically and legally extracted or produced at the time of the reserve determination. Estimates of pr
Slide 4: Hecla is the Fastest Growing Established Silver Miner
HECLA IS THE FASTEST GROWING ESTABLISHED SILVER MINER 17Moz silver production in USA and Canada in 2023, 20Moz by 2025 Largest U.S. Silver Producer • Produces 45% of U.S. Silver • On track to be Canada’s largest silver producer by 2024 • Largest silver reserve base in the U.S.; largest and highest p
Slide 5: Accretive Production and Reserve Growth
ACCRETIVE PRODUCTION AND RESERVE GROWTH Production growth in tier 1 jurisdictions is accretive on a per share metric Silver Eq. Production and Reserves** Average Silver Production: 2008-2025E per Share: 2008-2022 Million oz Average Silver Eq. Reserve per share 5 0.32 0.35 5 ~1.8x Silver Eq. ~2x Prod
Slide 6: Hecla Mines 45% of All Silver Produced in the USA
HECLA MINES 45% OF ALL SILVER PRODUCED IN THE USA Half of the world’s production is from Mexico, Peru and China; U.S./Canadian production is scarce 2022 U.S. Silver Production* (Moz) Hecla’s Share of U.S. Production** 14.2 Hecla, 44% Other, 56% 6.6 3 Countries Produce ~51% of World Production U.S. P
Slide 7: Largest U.S. Reserve Base with Highest Grades
LARGEST U.S. RESERVE BASE WITH HIGHEST GRADES 3rd largest reserve base with the highest grade among peers Silver Equivalent Reserves and Reserve Grade** Silver Eq. Reserves (Moz)* Silver Eq. Grade (g/t) 1,200 * Hatched area represents US and Canadian reserves 700 1,124 635 1,099 600 Silver Equivalen
Slide 8: Low-Cost Profile Silver Assets
LOW-COST PROFILE SILVER ASSETS Greens Creek in the best 15th percentile, Lucky Friday in best 30th percentile of primary silver mines in 2022 Silver AISC Curve of Primary Silver Mines: 12 Months Ended December 31, 2022 US$/oz 70 70 60 60 50 50 Greens Creek: Lucky Friday: 40 Best 30th 40 Best 15th Pe
Slide 9: Leading Dividend Policy with Silver Linked Dividend
LEADING DIVIDEND POLICY WITH SILVER LINKED DIVIDEND More cash returned to shareholders as dividend yield increases synchronously with silver prices Industry’s only silver-linked dividend policy pays an annual normal dividend (1.5 cents per share) plus a silver price-linked dividend that starts at $2
Slide 10: Commitment to Responsible Mining
COMMITMENT TO RESPONSIBLE MINING Complementary ESG Vision and Track-Record Safety Small Environmental Footprint Large Community Benefit Net zero on emissions in 2021 Well-established safety culture Hecla Charitable Foundation and 2022* San Sebastian Mine received the Casa Berardi awarded the John 20
Slide 11: Greens Creek: Flagship Mine
GREENS CREEK: FLAGSHIP MINE Consistent performance, low costs drive robust free cash flow generation Since 1987, Greens Creek has: Reserve Life: 13 Years Mined more than Generated more than • 20 million tons, containing • $2.8 billion in cash flow from • 345Moz Silver operations • 2.8Moz Gold • $1.9
Slide 12: Greens Creek: Free Cash Flow Engine
GREENS CREEK: FREE CASH FLOW ENGINE 2022: Record mill throughput, 9.7Moz in silver production Low-cost structure, high grades generate significant free cash flow Greens Creek throughput has grown 15% since purchase in 2008 Since 1987: Cumulative Cash Flow from Greens Creek Production and Reserves Op
Slide 13: Lucky Friday: Innovation Driven Production Growth
LUCKY FRIDAY: INNOVATION DRIVEN PRODUCTION GROWTH Recognized for innovation by Society for Mining, Metallurgy and Exploration (SME) • Record year 2022 in throughput, highest silver production in the past 20 years Reserve Life: 17 Years • Ratified 6-year contract with the Union • Underhand Closed Ben
Slide 14: Lucky Friday: Positioned for Long-Term Value
LUCKY FRIDAY: POSITIONED FOR LONG-TERM VALUE Higher grades at depth are supported by success of UCB mining method Lucky Friday: Long Section 30 Vein – *AgEq Grade (opt) < 10 10 - 20 20 - 30 30 - 35 > 35 December 31, 2021 *Ag Equivalent Values Based on metal prices of $17/oz Ag, $0.90/lb Pb, and $1.1
Slide 15: Underhand Closed Bench Mining Method
UNDERHAND CLOSED BENCH MINING METHOD Large scale blasting proactively manages seismic risk and increases throughput UCB Method Uses advanced drilling and blasting techniques to fragment the mineralized ore zone Is safer: miners work below engineered backfill and above a de-stressed zone Is more prod
Slide 16: Lucky Friday: Best Decade in 80 Year History is Ahead
LUCKY FRIDAY: BEST DECADE IN 80 YEAR HISTORY IS AHEAD UCB is contributing to productivity and safety improvements UCB method’s success and higher grades mined at depth position Lucky Friday to be a flagship asset for the next decade Lucky Friday: Silver Production by Decade* (Million oz) ~2x 50 30 2
Slide 17: Keno Hill: Largest Primary Silver Reserves in Canada
KENO HILL: LARGEST PRIMARY SILVER RESERVES IN CANADA 2023 Silver production to exceed 2.5Moz • 33% increase in silver 33% increase in reserves to nearly silver reserves 50Moz50Moz to nearly at 22.5atoz/ton 22.5 oz/ton Reserve Life: 8+ Years • Full production to 440to Full production tons 440per day
Slide 18: Keno Hill: 440 Tons Per Day by Year End 2023
KENO HILL: 440 TONS PER DAY BY YEAR END 2023 Larger deposit - Bermingham development on plan Initial Production Areas Development plan: Production shapes: Existing Development: Bear Zone Arctic Zone Looking southeast Bermingham Deep ~100m NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 18
Slide 19: Keno Hill: Flame & Moth to Supplement Bermingham
KENO HILL: FLAME & MOTH TO SUPPLEMENT BERMINGHAM Development and drilling focused on the 2Moz Upper Lightning zone Development plan: Production shapes: Existing Development: Initial Production Areas Christal Zone Lightning Zone Looking northwest ~100m NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 19
Slide 20: Casa Berardi: Investing for the Future
CASA BERARDI: INVESTING FOR THE FUTURE Period of investment as mine begins transition to open pit operation • Reserve mine life of 14 years, an additional 2.0Moz in M&I and Inferred resources Reserve Life: 14 Years • Transitioning to a full surface operation, mill performance remains strong as a res
Slide 21: The World's Growing Needs for Silver
THE WORLD’S GROWING NEEDS FOR SILVER Demand increased by almost 500Moz in two decades 23 YEAR CHANGE IN DEMAND PERIODS OF SILVER DEMAND Moz 1999 2022 % Increase Industrial 343 576 68% Five distinct periods of silver demand, three are strengthening Photography 246 28 -89% Jewelery/Silverware 260 255
Slide 22: Silver Supply Comes from Mine Production & Recycling
SILVER SUPPLY COMES FROM MINE PRODUCTION & RECYCLING Mine production accounts for more than 80% of supply 51% of mine production comes from Mexico, China and Peru Silver Supply (Millions oz) Mine Production Recycling Net Hedging Supply Net Official Sector Sales 1,012 1,000 999 1,004 1,005 1,025 958
Slide 23: Silver Mine Supply Dependent on Other Metals
SILVER MINE SUPPLY DEPENDENT ON OTHER METALS Over half of supply is a by-product of copper, lead and zinc mines Primary Silver Gold Copper Lead/Zinc 29% 29% 30% 32% 33% 31% 31% 30% 21% 23% 23% 23% 23% 26% 25% 26% 17% 15% 15% 15% 16% 16% 15% 16% 32% 32% 31% 29% 28% 27% 28% 28% 2015 2016 2017 2018 201
Slide 24: Solar Energy is Expected to Grow
SOLAR ENERGY IS EXPECTED TO GROW 1 GW of solar capacity requires half a million ounces of silver Solar could account for 33% of total U.S. energy generation by 2050 U.S. Electricity Generation by Fuel: 2000 - 2050 gigawatt 2022 history projections Over the next 28 years need ~750 Moz 6,000 just for
Slide 25: Silver's Photovoltaic (PV) Demand is Growing
SILVER’S PHOTOVOLTAIC (PV) DEMAND IS GROWING Compounded growth rate of >14% from 2013 to 2024F PV Installations (Gigawatts) and Silver Loadings*,** Silver used in PVs, 2013 - 2024F** PV Installations Ag Loading Million oz PV Installations Silver Loading 200 195 Gigawatts Index 2013 = 100 450 100 180
Slide 26: 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 27: Hecla Mining Company
HECLA MINING COMPANY United States’ Largest Silver Producer and Soon To Be Canada’s JPM Energy, Power, and Renewables Conference 2023 June 22nd , 2023 RESPONSIBLE. SAFE. INNOVATIVE. NYSE: HL
Slide 28: Proven & Probable Mineral Reserves
PROVEN & PROBABLE MINERAL RESERVES(1) (On December 31, 2022 unless otherwise noted) Proven Reserves (1) Silver Gold Lead Zinc Silver Gold Lead Zinc Asset Location Ownership Tons (000) (oz/ton) (oz/ton) % % (000 oz) (000 oz) Tons Tons Greens Creek (2,3) United States 100.0% 7 16.1 0.07 2.3 5.4 108 0.
Slide 29: Measured and Indicated Mineral Resources (1/2)
MEASURED AND INDICATED MINERAL RESOURCES (1/2) (On December 31, 2022 unless otherwise noted) Measured Resources (9) 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 (12,13) United
Slide 30: Measured and Indicated Mineral Resources (2/2)
MEASURED AND INDICATED MINERAL RESOURCES (2/2) (On December 31, 2022 unless otherwise noted) Measured & Indicated Resources 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 (12,13
Slide 31: Inferred Mineral Resources
INFERRED MINERAL RESOURCES (On December 31, 2022 unless otherwise noted) Inferred Resources (11) 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) (12,13) Greens Creek United States 100.0% 2,38
Slide 32: Mineral Resources Footnotes
MINERAL RESOURCES FOOTNOTES Note: All estimates are in-situ except for the proven reserves at Greens Creek which are in surface stockpiles. Mineral resources are exclusive of reserves. 8. The term "mineral resources" means a concentration or occurrence of material of economic interest in or on the E
Slide 33: Mineral Resources Footnotes
MINERAL RESOURCES FOOTNOTES 15. The average resource cut-off grades at Casa Berardi are 0.11 oz/ton gold for underground and 0.034 oz/ton gold for open pit; metallurgical recovery (actual 2022): 87% for gold; US$/CAN$ exchange rate: 1:1.3. 16. The resource NSR cut-off value at Keno Hill is $129.10/t
Slide 34: Mineral Resources Footnotes
MINERAL RESOURCES FOOTNOTES 24. Inferred open-pit resources for Fire Creek calculated November 30, 2017 using gold and silver recoveries of 65% and 30% for oxide material and 60% and 25% for mixed oxide-sulfide material. Indicated Resources reclassified as Inferred in 2019. Open pit resources are ca
Hecla Mining Company — JPM Energy, Power, and Renewables Conference 2023 on 6ix