Hecla Mining Company · NYSE:HL
Hecla Mining — Q1 2023 Earnings Presentation
33 slides from Hecla Mining's earnings presentation, May 10, 2023
Slide 1: Hecla Mining Company First Quarter 2023 Conference Call
HECLA MINING COMPANY FIRST QUARTER 2023 Conference Call May 10, 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: Fastest Growing Established Silver Miner
FASTEST GROWING ESTABLISHED SILVER MINER 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 Average Silver Eq. Production per shar
Slide 5: First Quarter Highlights
FIRST QUARTER HIGHLIGHTS Strong, safe operational performance drives free cash flow generation at silver operations Record Operational Quarter • Record throughput achieved at Greens Creek, record quarterly gold production • 4th consecutive quarter of >1Moz silver production at Lucky Friday • Keno on
Slide 6: Financial Review
Financial Review NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 6
Slide 7: Silver Margins Are Best in the Industry
SILVER MARGINS ARE BEST IN THE INDUSTRY Strong free cash flow generation deployed in production growth • From 2020 – Q1/2023, Greens Creek, Lucky Friday* and Casa Berardi have generated: • $922 million in cash flow from operations • $623 million in free cash flow2 Free Cash Flow*: Greens Creek, Luck
Slide 8: Committed to a Strong Balance Sheet
COMMITTED TO A STRONG BALANCE SHEET Silver revenues are now the largest source Q1/2023: Free cash flow from Net debt to adjusted EBITDA of Cash and equivalents of $96 three operations is $52 million(2) 1.9, below our target of 2.0(1) during million, liquidity ~ of $240 million this investment period
Slide 9: Operations Review
Operations Review NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 9
Slide 10: Greens Creek: Consistent Strong Performance
GREENS CREEK: CONSISTENT STRONG PERFORMANCE A record-breaking throughput quarter, poised for a robust 2023 • Record throughput with 2,591 tpd in Q1, Target throughput of 2,600 tpd by Q4/2023. Record Throughput in Q1 • Cash costs and AISC decreased in the quarter due to lower fuel prices and consumpt
Slide 11: Lucky Friday: Innovation Driven Production Growth
LUCKY FRIDAY: INNOVATION DRIVEN PRODUCTION GROWTH Positioned for a strong year with solid free cash flow generation • Safety record with All-Injury Frequency Rate of 0.62*. 4th Consecutive Quarter • On track to achieve annual throughput of 425,000 tons in Q4/2023, Service Hoist and of >1 Moz Coarse
Slide 12: Keno Hill: Largest Primary Silver Reserves in Canada
KENO HILL: LARGEST PRIMARY SILVER RESERVES IN CANADA 2023 Silver production to exceed 2.5Moz, Up to 4Moz in 2024 • 75% of planned development complete, mill startup in Q3/2023. Reserve Life: 8+ Years • Initial mill feed from ore currently being stockpiled. • Q1/2023 capital spend of $17.1 million. •
Slide 13: Casa Berardi: Investing for the Future
CASA BERARDI: INVESTING FOR THE FUTURE Period of investment as mine begins transition to full open pit operation • Lower Q1/2023 production due to lower underground tonnage and grades. Reserve Life: 14 Years • Lower production costs in Q1/2023 over Q4/2022 due to lower underground tonnage; AISC per
Slide 14: Guidance – 18% Production Increase in 2023 to ~17Moz
GUIDANCE – 18% PRODUCTION INCREASE IN 2023 TO ~17Moz Strong margins and free cash flow generation at silver operations Silver Production (Moz) Gold Production (Koz) Silver Equivalent (Moz)6 Gold Equivalent (Koz)6 2023 Total 16.0 – 17.5 160 - 170 41.5 – 44.0 505 – 535 Consolidated 2024 Total 17.5 – 1
Slide 15: H.R. 1
H.R. 1 NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 15
Slide 16: 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 17: Appendix
APPENDIX NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 17
Slide 18: 2023 Guidance: Production and Costs by Operation
2023 GUIDANCE: PRODUCTION AND COSTS BY OPERATION Silver Production (Moz) Gold Production (Koz) Silver Equivalent (Moz)6 Gold Equivalent (Koz)6 Greens Creek* 9.0 – 9.5 50 – 55 21.0 – 22.0 255 – 265 2023 Production Lucky Friday* 4.5 – 5.0 N/A 8.5 – 9.0 105 – 110 Outlook Keno Hill 2.5 – 3.0 N/A 2.5 – 3
Slide 19: GAAP Reconciliations
GAAP RECONCILIATIONS NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 19
Slide 20: Adjusted EBITDA Reconciliation to GAAP
ADJUSTED EBITDA RECONCILIATION TO GAAP Reconciliation of Net Income (GAAP) to Adjusted EBITDA (non-GAAP) Trailing Twelve Months Dollars in thousands (USD) Q4 2022 Q1 2023 Net (loss) income $ (37,348) $ (44,674) Plus: Interest expense 42,793 42,552 Plus/(Less): Income and mining tax provision (benefi
Slide 21: Cash Cost and AISC Reconciliation to GAAP
CASH COST AND AISC RECONCILIATION TO GAAP Silver Total Cost of Sales (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Costs, Before By-product Credits, per Ounce and All-In Sustaining Costs, After By-product Credits, per Ounce (n
Slide 22: Free Cash Flow (Non-GAAP) Reconciliation
FREE CASH FLOW (NON-GAAP) RECONCILIATON Greens Creek, Lucky Friday, and Casa Berardi Reconciliation of Cash provided by operating activities (GAAP) to Free Cash Flow (non-GAAP) Three Months Ended in thousands Q1 2023 Greens Creek Cash provided (used) by operating activities $ 43,346 Add: Exploration
Slide 23: Cash Cost and AISC Reconciliation to GAAP: Greens Creek
CASH COST AND AISC RECONCILIATION TO GAAP Greens Creek Total Cost of Sales (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Costs, Before By-product Credits, per Ounce and All-In Sustaining Costs, After By-product Credits, per Ou
Slide 24: Cash Cost and AISC Reconciliation to GAAP: Lucky Friday
CASH COST AND AISC RECONCILIATION TO GAAP Lucky Friday Total Cost of Sales (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Costs, Before By-product Credits, per Ounce and All-In Sustaining Costs, After By-product Credits, per Ou
Slide 25: Cash Cost and AISC Reconciliation to GAAP: Casa Berardi
CASH COST AND AISC RECONCILIATION TO GAAP Casa Berardi Total Cost of Sales (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Costs, Before By-product Credits, per Ounce and All-In Sustaining Costs, After By-product Credits, per Ou
Slide 26: Cash Cost and AISC Reconciliation: 2023 Estimates
CASH COST AND AISC RECONCILIATION TO GAAP 2023 silver and gold estimates Reconciliation of Total Cost of Sales (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non- GAAP) and All-In Sustaining Costs, Before By-product Credits, per Ounce and All-In Sustaining Co
Slide 27: 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 28: 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 29: 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 30: 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) Greens Creek (12,13) United States 100.0% 2,38
Slide 31: 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 32: 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 33: 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