Hecla Mining Company · NYSE:HL
Hecla Mining — FY2022 Earnings Presentation
33 slides from Hecla Mining's earnings presentation, Feb 15, 2023
Slide 1: Hecla Mining Company Fourth Quarter and Full Year 2022 Conference Call
HECLA MINING COMPANY FOURTH QUARTER and FULL YEAR 2022 Conference Call February 15, 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 Largest US silver reserves, Largest and highest grade primary silver reserves in Canada Silver Reserves: 2008-2022 Average Silver Production: 2008-2025E Million oz Million oz 18.0 ~5x Reserve Growth ~2x Production Growth 12.5 9.2 52 132 140 142 148 150 170 17
Slide 5: Financial Review
Financial Review NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 5
Slide 6: 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 – 2022, Greens Creek, Lucky Friday* and Casa Berardi have generated: • $833 million in cash flow from operations • $570 million in free cash flow Free Cash Flow*: Greens Creek, Lucky Fr
Slide 7: Committed to a Strong Balance Sheet
COMMITTED TO A STRONG BALANCE SHEET Investing free cash flow in operations, positioned for production growth 2022: Free cash flow from three Net debt to adjusted EBITDA of Cash and equivalents of $105 operations is $109 million(2) 1.9, in line with our target of 2.0(1) million, liquidity in excess o
Slide 8: Operations Review
Operations Review NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 8
Slide 9: Greens Creek: Another Exceptional Year
GREENS CREEK: ANOTHER EXCEPTIONAL YEAR Consistent performance, low costs drive robust free cash flow generation • Record throughput year with 2,415 tons per day (tpd), 2,500 in Q4/2022 Reserve Life: 13 Years • Cash costs and AISC increased in the quarter due to higher mill costs, higher treatment an
Slide 10: Lucky Friday: 2022 Record Operational Year
LUCKY FRIDAY: 2022 RECORD OPERATIONAL YEAR Recognized for innovation by SME • Record year in throughput, highest silver production in the past 20 years Reserve Life: 17 Years • Ratified 6-year contract with the Union • Lower AISC in the quarter due to higher production, by-product credits that offse
Slide 11: Casa Berardi: Record Throughput
CASA BERARDI: RECORD THROUGHPUT Strong production in 2022, Increase to cut-off grades to reduce marginal underground ounces • Record year in throughput, underground grade remained challenging Reserve Life: 14 Years • Higher AISC in the quarter due to higher production costs, higher capital and lower
Slide 12: Keno Hill: Largest Primary Silver Reserves in Canada
KENO HILL: LARGEST PRIMARY SILVER RESERVES IN CANADA 2023 Silver production to exceed 2.5 Moz • Silver reserves increased 33% to nearly 50 Moz at 22.5 opt Reserve Life: 8+ Years • Reserve life of >8 years • Full production to 440 tons per day by year-end • Key capital projects underway: • Camp expan
Slide 13: Keno Hill – 2022 Exploration Success at 3 Targets
KENO HILL – 2022 EXPLORATION SUCCESS AT 3 TARGETS Initial exploration drilling confirms significant exploration potential within large district Plan Map Showing the Location of 3 Exploration Targets Coral Wigwam Longitudinal Section Looking NW 101.5 oz/ton silver over 7.3 feet Including: 2,522.1 oz/
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: 2022: Tipping Point in Energy Transition to Renewables
2022: TIPPING POINT IN ENERGY TRANSITION TO RENEWABLES Balance is shifting to investment in renewables from fossils US$ 1.1 Trillion Investment Investment in Energy in fossils transition 2022 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: GAAP Reconciliations
GAAP RECONCILIATIONS NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 18
Slide 19: 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 20: Adjusted EBITDA Reconciliation to GAAP
ADJUSTED EBITDA RECONCILIATION TO GAAP Reconciliation of Net Income (GAAP) to Adjusted EBITDA (non-GAAP) Dollars in thousands (USD) FY 2021 FY 2022 Net (loss) income 35,095 $ (37,348) Plus: Interest expense 41,945 42,793 Plus/(Less): Income and mining tax provision (benefit) (29,569) (7,566) Plus: D
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) in thousands FY 2020 FY 2021 FY 2022 Greens Creek Cash provided (used) by operating activities $ 176,975 $ 208,715 $ 150,62
Slide 23: Cash Cost and AISC Reconciliation to GAAP
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
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
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 to GAAP
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) (12,13) Greens Creek 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