Hecla Mining Company · NYSE:HL

Hecla Mining — Shareholder Meeting (May 2013)

55 slides from Hecla Mining's shareholder meeting presentation, May 15, 2013

  1. Slide 1: Annual Meeting of Shareholders

    HECLA KEY EVENTS S TR ATE G Y RESULTS Annual Meeting of Shareholders May 15, 2013

  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, anticipated payments, litigation outcome (including settlement negotiations), production, sales of assets, exploration results an

  3. Slide 3: Key Events in Hecla's History

    HECLA MINING COMPANY Key Events in Hecla’s History 3 2013 Annual Meeting of Shareholders

  4. Slide 4: Hecla's #2 Certificate: 1891

    HECLA MINING COMPANY Hecla's #2 Certificate: 1891 4 2013 Annual Meeting of Shareholders

  5. Slide 5: Hecla & Star Morning Mine: 1920s

    HECLA MINING COMPANY Hecla & Star Morning Mine: 1920s 5 2013 Annual Meeting of Shareholders

  6. Slide 6: Lucky Friday Mine (1947) Acquired in 1958

    HECLA MINING COMPANY Lucky Friday Mine (1947) Acquired in 1958 6 2013 Annual Meeting of Shareholders

  7. Slide 7: Construction of Silver Shaft: 1980-1983

    HECLA MINING COMPANY Construction of Silver Shaft: 1980-1983 7 2013 Annual Meeting of Shareholders

  8. Slide 8: Construction of Silver Shaft: 1980-1983

    HECLA MINING COMPANY Construction of Silver Shaft: 1980-1983 8 2013 Annual Meeting of Shareholders

  9. Slide 9: Acquisition of 30% of Greens Creek: 1987

    HECLA MINING COMPANY Acquisition of 30% of Greens Creek: 1987 9 2013 Annual Meeting of Shareholders

  10. Slide 10: Acquisition of Venezuelan & Mexican Assets: 1999

    HECLA MINING COMPANY Acquisition of Venezuelan & Mexican Assets: 1999 La Camorra Mine 10 2013 Annual Meeting of Shareholders

  11. Slide 11: Our Strategy Since 2000

    HECLA MINING COMPANY Our Strategy Since 2000 11 2013 Annual Meeting of Shareholders

  12. Slide 12: 1. Increase the Known Reserves and Resources and Production at the Lucky Friday

    HECLA MINING COMPANY 1. Increase the Known Reserves and Resources and Production at the Lucky Friday 12 2013 Annual Meeting of Shareholders

  13. Slide 13: Lucky Friday: 2003 Expansion Area Long Section

    HECLA MINING COMPANY Lucky Friday: 2003 3000 El Lucky Friday Workings Expansion Area 2000 El 1200 Level Long Section Looking 1000 El Silver Shaft North 3050 Level Sea Level Expansion Area 4050 Level - 675 El - 1000 El 4900 Level Mined Area - 2000 El Planned Total Resources 5900 Level 13 2013 Annual

  14. Slide 14: Lucky Friday Expansion Potential: 2007

    HECLA MINING COMPANY Lucky Friday Expansion Potential: 2007 4900 Level 5900 Level 14 2013 Annual Meeting of Shareholders

  15. Slide 15: Looking Forward

    HECLA MINING COMPANY Looking Forward Silver Shaft 30 Vein #4 Shaft 4050 level 4900 level Current mining from 5900 level access 5900 level 6500 level 7500 level Looking NW 15 2013 Annual Meeting of Shareholders

  16. Slide 16: Pro-forma Reserve Growth 2003-2012

    HECLA MINING COMPANY Pro-forma Reserve Growth 2003-2012 Silver ounces (millions) Gold ounces (millions)(1) 3.8 150 233% 375% 45 0.8 2003 2012 2003 2012 1. Includes Aurizon’s reserves for 2012. 16 2013 Annual Meeting of Shareholders

  17. Slide 17: 2. Acquired Greens Creek and Consolidate into Mining-Friendly Jurisdictions

    HECLA MINING COMPANY 2. Acquired Greens Creek and Consolidate into Mining-Friendly Jurisdictions 17 2013 Annual Meeting of Shareholders

  18. Slide 18: Transforming Transactions

    HECLA MINING COMPANY Transforming Transactions  On April 16, 2008, Hecla completed the acquisition of 70.3% of the Greens Creek joint venture, increasing our ownership interest to 100%  Funded with $700 million in cash and approximately $50 million in common stock  Gives Hecla control of 100% of

  19. Slide 19: Silver Reserves and Grades of Primary Silver Mines

    19 Silver Reserves - Moz 100 120 0 20 40 60 80 San and underground. SanCristobal Cristobal(SMM)* (50%)* Pitarilla (SSRI)* San Bartolome (CDE)* Greens Creek (HL) Pirquitas (SSRI)* Ying (SVM) Public filings, *Open pit mines – Palmarejo is both open pit Huaron (PAA) Lucky Friday (HL) High Quality Asset

  20. Slide 20: Greens Creek - Silver Production up 34%

    HECLA MINING COMPANY Greens Creek - Silver Production up 34%  Produced approx. 200 million ounces of silver and 1.5 million ounces of gold since startup in 1989  6.4 million ounces of silver production in 2012, with steady production increases during course of the year  Q1 silver production of 1.

  21. Slide 21: 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 21 2013 Annual Meeting of Shareholders

  22. Slide 22: Lower Political Risk Revenue Sources

    HECLA MINING COMPANY Lower Political Risk Revenue Sources 2001 Revenue 2011 Pro-forma Revenue¹ Mexico 9% United Canada States 33% 42% United Venezuela States 49% 67% 1. Includes Aurizon assets 22 2013 Annual Meeting of Shareholders

  23. Slide 23: Multiple Revenue Streams Base Metals Hedging

    HECLA MINING COMPANY Multiple Revenue Streams Base Metals Hedging Hecla Standalone Pro Forma Proven and Probable Reserves(1)  Policy is to hedge up to 60% of the next three years’ production of lead and zinc  Locking in revenue to cover costs 2011 Revenue by Metals  Currently, base metals hedgin

  24. Slide 24: 3. A U.S. Company with a Significant Management Presence in Canada

    HECLA MINING COMPANY 3. A U.S. Company with a Significant Management Presence in Canada 24 2013 Annual Meeting of Shareholders

  25. Slide 25: We're in Vancouver!

    HECLA MINING COMPANY We’re in Vancouver!  Vancouver - an international center of mining excellence  Silver industry “headquarters”  Co-head office in Vancouver  Nearly half of senior management here  2012/13 equity investments in Canadian junior exploration companies  Dolly Varden Silver Corpo

  26. Slide 26: 4. Settled the 20 Year Basin Litigation

    HECLA MINING COMPANY 4. Settled the 20 Year Basin Litigation 26 2013 Annual Meeting of Shareholders

  27. Slide 27: Coeur d'Alene Basin Litigation Settlement

    HECLA MINING COMPANY Coeur d’Alene Basin Litigation Settlement  Related to mining conducted pre-1950’s that did not violate any laws  20 years of litigation ended in 2011 when court approved Consent Decree  $4.4 billion claim was settled for $264 million ($159 million net of $105 million income t

  28. Slide 28: 5. Emphasize Large Prospective Land Packages

    HECLA MINING COMPANY 5. Emphasize Large Prospective Land Packages 28 2013 Annual Meeting of Shareholders

  29. Slide 29: North American Focused Asset Portfolio

    HECLA MINING COMPANY North American Focused Asset Portfolio All Operations in Mining-Friendly Jurisdictions 29 2013 Annual Meeting of Shareholders

  30. Slide 30: Organic Growth - San Sebastian (Mexico)

    HECLA MINING COMPANY Organic Growth - San Sebastian (Mexico)  185-square-mile land Middle Vein package Hugh Zone  Potential extensions to both Middle Vein and Hugh Zone structures 1 Km Andrea Vein  Andrea Vein remains open along strike and at depth 30 2013 Annual Meeting of Shareholders

  31. Slide 31: Reserve and Resource Growth - Middle Vein (Mexico)

    HECLA MINING COMPANY Reserve and Resource Growth - Middle Vein (Mexico) Longitudinal of Middle Vein  Middle Vein at San Sebastian defined over 3,000 feet along strike, from surface to over 1,000 feet in depth  New inferred resource of 8.8 million silver ounces and 45,000 ounces gold appears open a

  32. Slide 32: 6. Continue Hecla's 100 Year Focus on Silver

    HECLA MINING COMPANY 6. Continue Hecla’s 100 Year Focus on Silver 32 2013 Annual Meeting of Shareholders

  33. Slide 33: 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

  34. Slide 34: Silver Consumption per Capita

    HECLA MINING COMPANY Silver Consumption per Capita 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 States 0.20 Germany Sou

  35. Slide 35: 7. Focus on Reducing Risks and Continuous Improvement on Safety

    HECLA MINING COMPANY 7. Focus on Reducing Risks and Continuous Improvement on Safety 35 2013 Annual Meeting of Shareholders

  36. Slide 36: Portfolio of High Quality, Long-Life Assets

    HECLA MINING COMPANY Portfolio of High Quality, Long-Life Assets Greens Creek Lucky Friday Casa Berardi Location Alaska Idaho Quebec Ownership 100% 100% 100% Primary Metal Ag Ag Au Primary Metal Grade (oz/t) 12.1 13.4 0.2 Proven and Probable Reserves (mm oz) Au Eq. 3.6 -- 1.5 Ag Eq. 213 92 87 Mine L

  37. Slide 37: Upgrades to the Lucky Friday Ramp System

    HECLA MINING COMPANY Upgrades to the Lucky Friday Ramp System 37 2013 Annual Meeting of Shareholders

  38. Slide 38: Hecla Safety Performance

    HECLA MINING COMPANY Hecla Safety Performance 6 5.3 5  Greens Creek and Lucky 5 Friday both have good 4.1 safety records 4 4.4  Pre-2011 Lucky Friday 3.2 3.5 had 0 fatalities in 25 2.7 2.6 2.7 3 years  After fatalities and 2 temporary Lucky Friday 1.5 1.6 2.1 shutdown, redoubled our 1.8 safety ef

  39. Slide 39: 8. Acquire Aurizon and Issue Eight Year Bonds

    HECLA MINING COMPANY 8. Acquire Aurizon and Issue Eight Year Bonds 39 2013 Annual Meeting of Shareholders

  40. Slide 40: Casa Berardi - Long-Life Gold Asset

    HECLA MINING COMPANY Casa Berardi - Long-Life Gold Asset  Aurizon projects 2013 production of 125,000 to 130,000 ounces  Potential to increase processing capacity to 2,400 tpd  High conversion (~65%) of resources to reserves and Highlights consistent replacement of mined Location Western Quebec r

  41. Slide 41: Senior Notes Overview

    HECLA MINING COMPANY Senior Notes Overview Peer Comparison Date Gross Current Issuer Issued Coupon Maturity Proceeds1 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 B2/B+ Eldorardo Gold 10-Dec-12 6.125% Sr. Notes 15-Dec-20 $600 Ba3/BB IAMGOL

  42. Slide 42: New Quebec Gold Assets

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

  43. Slide 43: Silver Peer Relative Price Performance

    HECLA MINING COMPANY Silver Peer Relative Price Performance 1-Year 3-Year 80% 150% 60% 100% 40% 20% 50% 0% -20% 0% -40% -50% -60% -80% -100% Apr-10 Oct-10 Feb-11 Apr-11 Oct-11 Feb-12 Apr-12 Oct-12 Feb-13 Apr-13 Aug-10 Dec-10 Aug-11 Dec-11 Aug-12 Dec-12 Jun-10 Jun-11 Jun-12 43 2013 Annual Meeting of

  44. Slide 44: Results of the Strategy

    HECLA MINING COMPANY Results of the Strategy 44 2013 Annual Meeting of Shareholders

  45. Slide 45: 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 45 2013 Annual Meeting of Shareholders

  46. Slide 46: Continued Strong Margins

    HECLA MINING COMPANY 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 2008 2009 2

  47. Slide 47: Strong Cash Margins at Casa Berardi

    HECLA MINING COMPANY Strong Cash Margins at Casa Berardi $1,800 $1,658 $1,578 $1,600 $962 $1,041 $1,400 $1,145 $1,200 58% $604 66% $1,000 $915 $/oz $847 53% $800 $696 $514 $625 $448 56% $600 53% $696 $365 $317 52% 51% $541 $537 $400 $399 $401 $308 $331 $200 $0 2006 2007 2008 2009 2010 2011 2012 Cash

  48. Slide 48: Cash Flow Usage: Flexibility

    HECLA MINING COMPANY Cash Flow Usage: Flexibility 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 Cos

  49. Slide 49: 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

  50. Slide 50: Appendix

    HECLA KEY EVENTS S TR ATE G Y RESULTS Appendix

  51. Slide 51: 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

  52. Slide 52: 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 $ (

  53. Slide 53: 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

  54. Slide 54: 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

  55. Slide 55: 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

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