Hecla Mining Company · NYSE:HL
Hecla Mining — BofA Securities Global Metals, Mining and Steel Conference 2021
24 slides from Hecla Mining's conference presentation, May 20, 2021
Slide 1: Company Overview: United States' Leading Silver Producer
COMPANY OVERVIEW United States’ Leading Silver Producer May 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: Hecla: Unique Precious Metals Miner
Hecla: Unique Precious Metals Miner NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 4
Slide 5: 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 Two of the largest and highest-grade silver mines in the world Silver dominates reserves and cash flow Long-lived mines with decades
Slide 6: 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 7: Hecla Mines a Third of All Silver Produced in the USA
HECLA MINES A THIRD 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 34.0% 66.0% Hecla Other 6.5 3 Countries . Produce 50% of World Production U.S. Produ
Slide 8: High-Grade Silver Mines of Size Are Scarce
HIGH-GRADE SILVER MINES OF SIZE ARE SCARCE Hecla’s world’s second and seventh largest silver mines have the highest silver equivalent grade 400 AgEq* AgEq Grade 40 (Moz) (opt) 350 35 300 30 250 25 200 20 150 15 100 10 50 5 0 0 Cannington Greens Creek Fresnillo Saucito Rochester Ying Lucky Friday La
Slide 9: 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 10: 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 At $25/oz realized price, an implied dividend yield of 7.4% of silver price $9.0 17.5% 20.00% $8.0 15.4% 18.00% $7.0 16.00% 12.6% 14.00% $6.0 12.00% $5.0 9.0% 7
Slide 11: Solid First Quarter 2021: Highlights
SOLID FIRST QUARTER 2021: HIGHLIGHTS Strong operational performance from steady production, low costs and high margins • Record Adjusted EBITDA(1) of $86.1 million, Cash Gross Margin(2) of Record Quarter $114.1 million, second highest Sales of $210.9 million Strong Operating • Solid production, Lowe
Slide 12: 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 13: Appendix
Appendix NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 13
Slide 14: 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 15: 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) 3 Months Ended Dollars are in thousands 31-Mar-21 31-Dec-20 30-Sep-20 30-Jun-20 31-Mar-20 31-Dec-19 30-Sep-19 Greens Creek Cash provided (used) by operating activities
Slide 16: 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) in thousands 30-Jun-20 30-Sep-20 31-Dec-20 31-Mar-21 Cash Flow from Operations $ 37,526 $ 73,439 $ 64,901 $ 37,936 Less: Additions to properties, plants, equipment and
Slide 17: Cash Gross Margin (Non-GAAP) Reconciliation
CASH GROSS MARGIN (NON-GAAP) RECONCILIATION Reconciliation of Gross Profit (GAAP) to Cash Gross Margin (non-GAAP) in thousands (except per ounce amounts) 31-Mar-21 Sales of products $ 210,852 Cost of sales and other direct production costs 96,709 Depreciation, depletion and amortization 49,331 Gross
Slide 18: Adjusted EBITDA Reconciliation to GAAP
ADJUSTED EBITDA RECONCILIATION TO GAAP Reconciliation of Net Income (Loss) (GAAP) and Debt (GAAP) to Adjusted EBITDA (non-GAAP) in thousands (except per ounce amounts) 30-Jun-20 30-Sep-20 31-Dec-20 31-Mar-21 Net income (loss) $ (58,705) $ (25,561) $ (16,790) $ 19,366 Plus: Interest expense 54,587 53
Slide 19: Proven & Probable Mineral Reserves
PROVEN & PROBABLE MINERAL RESERVES(1) (On December 31, 2020 unless otherwise noted) Proven Reserves Tons Silver Gold Lead Zinc Copper Silver Gold Lead Zinc Copper Asset (000) (oz/ton) (oz/ton) % % % (000 oz) (000 oz) Tons Tons Tons Greens Creek (2) 3 21.8 0.10 3.7 7.8 - 70 0.3 120 250 - Lucky Friday
Slide 20: Measured and Indicated Mineral Resources
MEASURED AND INDICATED MINERAL RESOURCES (On December 31, 2020 unless otherwise noted) Measured Resources Tons Silver Gold Lead Zinc Copper Silver Gold Lead Zinc Copper Asset (000) (oz/ton) (oz/ton) % % % (000 oz) (000 oz) (Tons) (Tons) Tons Greens Creek (5) 297 12.9 0.11 3.1 10.3 - 3,837 33 9,310 3
Slide 21: Inferred Mineral Resources
INFERRED MINERAL RESOURCES (On December 31, 2020 unless otherwise noted) Inferred Resources Tons Silver Gold Lead Zinc Copper Silver Gold Lead Zinc Copper (000 Asset (000) (oz/ton) (oz/ton) % % % (000 oz) (Tons) (Tons) Tons oz) Greens Creek (5) 1,767 13.2 0.08 2.8 7.0 - 23,370 145 49,670 123,480 - L
Slide 22: Mineral Resources (Notes)
MINERAL RESOURCES (NOTES) (On December 31, 2020 unless otherwise noted) Note: All estimates are in-situ except for the proven reserves at Greens Creek and Fire Creek which are in surface stockpiles. Resources are exclusive of reserves. (5) Mineral resources are based on $1500 gold, $21 silver, $1.15
Slide 23: 2009 – 2019 Reserve Table
2009 – 2019 RESERVE TABLE Silver Gold Silver Gold Silver Gold Silver Gold 2009 Proven Reserves Tons (oz/ton) (oz/ton) (ounces) (ounces) 2016 Proven Reserves Tons (oz/ton) (oz/ton) (ounces) (ounces) Greens Creek - - - - - Greens Creek 9,000 15.50 0.090 140,000 1,000 Lucky Friday 1,358,200 12.30 - 16,
Slide 24: Company Overview: End
COMPANY OVERVIEW END May 2021 RESPONSIBLE. SAFE. INNOVATIVE. NYSE: HL
Hecla Mining Company — BofA Securities Global Metals, Mining and Steel Conference 2021 on 6ix