Hecla Mining Company · NYSE:HL

Hecla Mining — J.P. Morgan Small-Mid Cap Conference 2013

65 slides from Hecla Mining's conference presentation, Dec 11, 2013

  1. Slide 1: Top 10 Reasons to Invest in Hecla

    Top 10 Reasons to Invest in Hecla J.P. Morgan Small-Mid Cap Conference Chicago December 11, 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, production, exploration results and plans, costs, and prices or sales performance are "forward- looking statements" within the me

  3. Slide 3: Reason #10: Growing reserves and production

    Reason #10: Growing reserves and production

  4. Slide 4: Reserve Growth 2003 - 2012

    HECLA MINING COMPANY 1 Reserve Growth 2003 - 2012 Silver ounces (millions) Gold ounces (millions)2 2.2 150 233% 175% 45 0.8 2003 2012 2003 2012 1. See Proven and Probable reserves data in the Appendix. 4 2. Includes Casa Berardi’s reserves for 2012.

  5. Slide 5: North American Exploration Portfolio

    HECLA MINING COMPANY North American Exploration Portfolio All projects in lower-risk, mining-friendly jurisdictions 5

  6. Slide 6: Reason #9: All three long-life mines in low political risk jurisdictions

    Reason #9: All three, long-life mines in low political risk jurisdictions

  7. Slide 7: North American Mine Production

    HECLA MINING COMPANY North American Mine Production All operations in lower-risk, mining-friendly jurisdictions 7

  8. Slide 8: Production in Low-Risk Jurisdictions

    HECLA MINING COMPANY Production in Low-Risk Jurisdictions % Silver Production in % Gold Production in U.S. for 2011 U.S. & Canada Hecla 100% 100% 100% 26% 80% 60% 53% 44% 43% 40% By-Product Silver 20% 15% 60% Other Primary Silver Mines* 0% 14% Total Silver Production in U.S. in 2011 – 36 Moz * Prima

  9. Slide 9: Reason #8: Strong record of meeting guidance

    Reason #8: Strong record of meeting guidance

  10. Slide 10: Consistent & Predictable Performance

    HECLA MINING COMPANY Consistent & Predictable Performance Scotia’s Analysis of Silver Company Operating Performance 2010-2012 Total: 7 Total: 6 Total: 6 7 3 5 Total: 3 Total: 2 1 3 1 2 1 1 Total: 0 1 FVI HL PAAS SSRI CDE Average Gold Company 2010-2012 Production Guidance 2010-2012 Cost Guidance 1. G

  11. Slide 11: Reason #7: Settled legacy liabilities and rehabilitated flagship mine

    Reason #7: Settled legacy liabilities and rehabilitated flagship mine

  12. Slide 12: Clearing the Path Forward

    HECLA MINING COMPANY Clearing the Path Forward Settled Legacy Liabilities Rehabilitated Lucky Friday  Settled environmental liability in  Mine has operated for over 70 the Coeur d’Alene River Basin years in the Silver Valley, Idaho from mining practices ending  Mine was shut down and fully over 5

  13. Slide 13: Reason #6: Diversified revenue stream

    Reason #6: Diversified revenue stream

  14. Slide 14: Diversified Revenue: Silver, Gold, Lead and Zinc

    HECLA MINING COMPANY Diversified Revenue: Silver, Gold, Lead and Zinc  Diversified revenue stream (silver, gold, lead and zinc) from Consolidated Revenue by Metal 3 mines 3Q 2013  Policy allows hedging of 60% of the next 3 years of lead and zinc production 16% 38% 11%  Currently have ~$300 millio

  15. Slide 15: Reason #5: Strong financial position

    Reason #5: Strong financial position

  16. Slide 16: Strong Cash Position

    HECLA MINING COMPANY Strong Cash Position $600 $544 Cash & Cash Equivalents as of Q3/2013 (millions) $500 Hecla has $338M of liquidity1 $421 $400 $300 $238 $211 $200 $100 $68 $42 $25 $- Silver Standard Pan American Hecla Coeur First Majestic Fortuna Endeavour Silver Cash and Cash Equivalents Q3/2013

  17. Slide 17: Hecla: Zero Debt Obligations Until 2021

    HECLA MINING COMPANY Hecla: Zero Debt Obligations Until 2021 Peer Comparison Date Gross Current 1 Issuer Issued Coupon Maturity Proceeds 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 B3/BB- Eldorado Gold 10-Dec-12 6.125% Sr. Notes 20-Dec-20

  18. Slide 18: Reason #4: Strong cash flow flexibility

    Reason #4: Strong cash flow flexibility

  19. Slide 19: 2010 - Q3 2013 Cash Flow Flexibility

    HECLA MINING COMPANY 2010 - Q3 2013 Cash Flow Flexibility Cash Bridge 2010 – Q3 2013 (US$M) $1,200 Largely Discretionary $551M $1,000 1 $789.2 $800 $600 One-time Expenses $380.9 $219M $400 Other $133.9 Items $36.2 $63M $237.8 $177.6 $200 $104.6 $193.0 $26.4 $12.9 $50.3 $- 2010 Beginning Adjusted Cap

  20. Slide 20: Response to Metals Price Weakness

    HECLA MINING COMPANY Response to Metals Price Weakness  Decline in precious metals prices led to review of 2013 expenses  Maintained programs with long logistical requirements or short implementation windows  Revised guidance  Capital expenditures reduced by 26% to $163 million  Exploration exp

  21. Slide 21: Reason #3: Low cost producer with strong margins

    Reason #3: Low cost producer with strong margins

  22. Slide 22: Q3 2013 - Continued Strong Margins

    HECLA MINING COMPANY Q3 2013 - Continued Strong Margins $40 $35.30 $35 $32.11 Strong Cash Margins $28.86 $30 $25 $22.70 $22.22 97% 92% $20 106% $21.84 76% $16.27 $/oz $34.15 $29.41 67% $15.63 $14.40 $15 $14.82 $24.16 66% $10 88% $10.71 $10.20 71% $13.72 $5 $7.02 $7.40 $4.20 $5.56 $1.91 $2.70 $0 ($1.

  23. Slide 23: Reason #2: Our newest mine brings gold growth with cost reduction potential

    Reason #2: Our newest mine brings gold growth with cost reduction potential

  24. Slide 24: Casa Berardi - Higher Q3 Production, Lower Costs

    HECLA MINING COMPANY Casa Berardi - Higher Q3 Production, Lower Costs  Q3 production of 23,406 ounces of $1,400 35 32 koz E gold, above 20,000 ounce target Cash cost, after by-product credits, per gold ounce $1,152/oz 30  Q3 cash cost, after by-product $1,200 $1,066/oz credits, per gold ounce of $

  25. Slide 25: Casa Berardi - Good Exploration Potential

    HECLA MINING COMPANY Casa Berardi - Good Exploration Potential 25

  26. Slide 26: Solid Gold Grade and Reserves

    HECLA MINING COMPANY Solid Gold Grade and Reserves Gold Reserves and Grades of Several Canadian Gold Mines 4.50 18.00 4.00 16.00 3.50 14.00 Gold Reserves - Moz 3.00 12.00 Gold Grade - g/t 2.50 10.00 2.00 8.00 1.50 6.00 1.00 4.00 0.50 2.00 - 0.00 Gold Reserves (Moz) Gold Grade (g/t) 26 Source: Public

  27. Slide 27: Reason #1: Two world-class silver assets are driving Hecla's future

    Reason #1: Two world-class silver assets are driving Hecla’s future

  28. Slide 28: Greens Creek - Consistent Performer

    HECLA MINING COMPANY Greens Creek - Consistent Performer  Q3 silver production of 1.8 $6.00/oz 2.1 million ounces 2.00 Moz Cash cost, after by-product credits, per silver ounce $5.02/oz $5.00/oz 2.0  Q3 cash cost, after by- $5.00/oz 1.9 product credits, per silver 1.80 Moz 1.80 Moz Silver Producti

  29. Slide 29: Greens Creek - Underground Exploration

    HECLA MINING COMPANY Greens Creek - Underground Exploration A Cross Section A’ East East Ore Ore Deep 200 South Block Model Deep 200 South Block Model Deep 200 South N A’ Cross section A Deep 200 South 1000 Feet 29

  30. Slide 30: Greens Creek: World-Class Silver Mine

    HECLA MINING COMPANY Greens Creek: World-Class Silver Mine 30 Vein Spectacular Performance over a Variety of Silver Prices $60 #4 Shaft $50 4050 level Past 26 Years1 Next 10 Years $40 Revenue: $3.0 billion 4900 level Continued strong $/oz Net Income: $1.0 billion performance expected $30 Free Cash F

  31. Slide 31: Lucky Friday Ramping Up Production

    HECLA MINING COMPANY Lucky Friday Ramping Up Production 0.90 $40.00  Silver production of 479,188 $36.55/oz ounces in Q3, up 121% over Q2 Cash cost, after by-product credits, per silver ounce 0.80 0.77E Moz $35.00  Cash cost, after by-product 0.70 $32.19/oz credits, per silver ounce of $30.00 Silv

  32. Slide 32: Lucky Friday at Historical Production Rate

    HECLA MINING COMPANY Lucky Friday at Historical Production Rate Daily Milled Tons 1,200 900 Tons Per Day 600 October Average: 996 tons per day 300 0 Historical full production rate 32

  33. Slide 33: Lucky Friday - Unlocking Value at Depth

    HECLA MINING COMPANY Lucky Friday - Unlocking Value at Depth Silver Shaft 30 Vein #4 Shaft 4050 level Current mining from 4900 level 5900 level access 5900 level 6500 level 7500 level Looking NW 33 *Assuming prices of $20.00/oz silver, $0.90/lb lead, and $0.80/lb zinc

  34. Slide 34: Large and High Quality Silver Assets

    HECLA MINING COMPANY Large and High Quality Silver Assets Silver Reserves and Grades of the Largest Primary Silver Mines Silver Grade Reserves 100 477 406 308 109 5 11 500 Silver Reserves – Moz1 90 450 80 400 Silver Grade - g/t 70 350 60 300 50 250 40 200 30 150 20 100 10 50 0 0 San Bartolome (CDE)*

  35. Slide 35: Financial Strength and Value Creation

    HECLA MINING COMPANY Financial Strength and Value Creation Portfolio of Three High Quality, Operating in Long-Life Cash Flow Low Political Operations Flexibility Risk Jurisdictions Financial Strength Value Creation High Multiple Secure Cash Revenue Margins Strong Investment Streams Fundamentals Grow

  36. Slide 36: Appendix

    Appendix FS a MINING COMPANY

  37. Slide 37: Appendix Table of Contents

    HECLA MINING COMPANY Appendix Table of Contents Appendices Page 1. 2013 Expectations 38 2. Management and Financial Information 39 3. Silver and Gold Landscape 47 4. Exploration 49 5. Silver Overview 57 6. Zinc Overview 61 7. Reserves and Resources 63 37

  38. Slide 38: 2013 Expectations

    HECLA MINING COMPANY Appendix 1 2013 Expectations  Silver production to be at the high end of previously communicated guidance of 8 to 9 million ounces  Greens Creek at approximately 7 million ounces  Lucky Friday at approximately 1.6 million ounces  Total Cash cost, after by-product credits, pe

  39. Slide 39: Seasoned Management Team with Significant Experience

    HECLA MINING COMPANY Appendix 2 Seasoned Management Team with Significant Experience Phillips S. Baker, Jr., has 15+ years of Dr. Dean W.A. McDonald, is a geologist with mining experience. He was previously over 30+ years experience. He was VP and CFO of Battle Mountain Gold previously VP of Explora

  40. Slide 40: Coeur d'Alene Basin Litigation

    HECLA MINING COMPANY Appendix 2 Coeur d’Alene Basin Litigation  Court approved consent decree for the Coeur d’Alene River Basin environmental litigation on September 8, 2011  Settled Hecla Limited’s historic environmental liability in the Basin and the remaining obligations in the Box  Hecla expe

  41. Slide 41: Total Cash Cost GAAP Reconciliation

    HECLA MINING COMPANY Appendix 2 Total Cash Cost GAAP Reconciliation Reconciliation of cash cost, after by-product credits, per silver ounce to Generally Accepted Accounting Principles (GAAP) for Greens Creek & Lucky Friday (dollars and ounces in thousands, except per ounce - unaudited) Q3/2013 Q2/20

  42. Slide 42: Total Cash Cost GAAP Reconciliation

    HECLA MINING COMPANY Appendix 2 Total Cash Cost GAAP Reconciliation Reconciliation of cash cost, after by-product credits, per silver ounce to Generally Accepted Accounting Principles (GAAP) for Greens Creek & Lucky Friday (dollars and ounces in thousands, except per ounce - unaudited) Three Months

  43. Slide 43: Cash Cost Reconciliation to GAAP - Casa Berardi

    HECLA MINING COMPANY Appendix 2 Cash Cost Reconciliation to GAAP - Casa Berardi 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 2006 (1) Cash Operating Cost

  44. Slide 44: Total Cash Cost GAAP Reconciliation

    HECLA MINING COMPANY Appendix 2 Total Cash Cost GAAP Reconciliation Reconciliation of cash cost, after by-product credits, per gold ounce to Generally Accepted Accounting Principles (GAAP) for Casa Berardi (dollars and ounces in thousands, except per ounce - unaudited) Q3/2013 June 2013 (1) Cash cos

  45. Slide 45: Hecla Adjusted EBITDA Reconciliation

    HECLA MINING COMPANY Appendix 2 Hecla Adjusted EBITDA Reconciliation Reconciliation of Adjusted EBITDA (non-GAAP) to Net Income (GAAP) Three Months Ended September 30, 2013 2012 Net Income $ (8,458) $ (885) Plus: Interest expense, net of amount capitalized 7,348 591 Plus/(Less): Income taxes (2,542)

  46. Slide 46: Cash Margins at Casa Berardi

    HECLA MINING COMPANY Appendix 2 Cash Margins at Casa Berardi $1,800 $1,658 $1,621 $1,578 $1,600 $1,400 $1,335 $1,145 $1,200 $809 20% $962 $269 50% 58% $915 $1,041 $1,000 66% $/oz $847 $696 $604 $800 $625 53% $514 $600 $448 53% 56% $365 52% $317 51% $400 $1,066 $541 $812 $331 $696 $200 $537 $308 $401

  47. Slide 47: Higher Silver Reserve Grade Among Peers

    HECLA MINING COMPANY Appendix 3 Higher Silver Reserve Grade Among Peers 47 Source: Company Filings, BMO Capital Markets (11/18/13)

  48. Slide 48: High Grade Long-Life Mines

    HECLA MINING COMPANY Appendix 3 High Grade Long-Life Mines 48 Source: Company Filings, BMO Capital Markets (11/18/13)

  49. Slide 49: Exploration - Greens Creek (Alaska)

    HECLA MINING COMPANY Appendix 4 Exploration - Greens Creek (Alaska) Underground Exploration Targets Looking NE East Ore extension SW Bench 5250 South Resource Extension Gallagher 200 South Resource extensions 49

  50. Slide 50: Greens Creek - Surface Exploration (Killer Creek)

    HECLA MINING COMPANY Appendix 4 Greens Creek - Surface Exploration (Killer Creek) 50

  51. Slide 51: Lucky Friday & Silver Valley - Exploration

    HECLA MINING COMPANY Appendix 4 Lucky Friday & Silver Valley - Exploration 51

  52. Slide 52: New Quebec Gold Assets

    HECLA MINING COMPANY Appendix 4 New Quebec Gold Assets  Gold producer and exploration portfolio in western Quebec  Heva and Hosco West extension  Large in-pit gold resource at Hosco  Additional gold resources at Heva and Hosco West Extension  Attractive exploration potential  Growth potential

  53. Slide 53: Pre-Development Properties

    HECLA MINING COMPANY Appendix 4 Pre-Development Properties San Juan Silver San Sebastian Heva Hosco 53

  54. Slide 54: Organic Growth - San Sebastian (Mexico)

    HECLA MINING COMPANY Appendix 4 Organic Growth - San Sebastian (Mexico)  185-square-mile land package  Potential extensions to both Middle Vein and Hugh Zone structures  Andrea Vein remains open along strike and at depth 54

  55. Slide 55: Organic Growth - San Juan Silver (Colorado)

    HECLA MINING COMPANY Appendix 4 Organic Growth - San Juan Silver (Colorado)  Includes historic Bulldog mine: produced 25 million ounces of silver before closing in 1985  7.6 million ounces of silver Indicated Resources  33.1 million ounces of silver Inferred Resources • Bulldog decline has broken

  56. Slide 56: Organic Growth - Star Pre-Development (Idaho)

    HECLA MINING COMPANY Appendix 4 Organic Growth - Star Pre-Development (Idaho) Longitudinal Section Looking North Water level - Water level #4 Shaft behind Lucky Friday expansion area 56

  57. Slide 57: Mine Production is Key to Silver Supply

    HECLA MINING COMPANY Appendix 5 Mine Production is Key to Silver Supply 1200 Producer Hedging 1992 – 2012 Silver Production (mm oz) Implied Net Disinvestment Increase 1000 Net Government Sales 70% 800 Old Silver Scrap 600 400 60% Mine Production 200 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 200

  58. Slide 58: Top Producing Countries (10 years)

    HECLA MINING COMPANY Appendix 5 Top 5 Producing Countries (10 years)  Mining produced a total of 597.2 mm oz of silver globally in 2003 and nearly 787.0 mm oz in 2012.  Mexico became the largest single country producer in 2010 and produced 162.2 mm oz in 2012. 5% 7% 14% 21% 38% 43% 16% 14% 10% 7%

  59. Slide 59: Increasing Share of Modern Demand

    HECLA MINING COMPANY Appendix 5 Increasing Share of Modern Demand  Modern demand increased from 260 mm oz in 1992 to 465 mm oz in 2012, an increase of 80%, and an annualized increase of 3.0% 5% 16% 36% 46% 30% 9% Modern Modern 23% 29% 6% 1992 2012 Modern Investment Jewelry & Photography Coins & Med

  60. Slide 60: Modern Silver Demand Increases with Increasing Income

    HECLA MINING COMPANY Appendix 5 Modern Silver Demand Increases with Increasing Income 30% 2010 Silver Consumption per Capita 1.4 India World Average Income 25% per Capita Distribution of Population 1.2 China 20% 1.0 0.8 (oz) 15% 0.6 10% Brazil, United Russia States 0.4 5% 0.2 0% 0.0 $50000+ $0 $2,00

  61. Slide 61: Zinc Supply - Mining

    HECLA MINING COMPANY Appendix 6 Zinc Supply - Mining  Forecasted mine production vs. forecasted market demand  Demand is expected to exceed mine production around 2018 Major Mine Shutdowns Annual Mine Capacity (MT) Perseverance 115K Brunswick 240K Century 510K Lisheen 175K Source: Wood Mackenzie J

  62. Slide 62: Zinc Supply - US Production

    HECLA MINING COMPANY Appendix 6 Zinc Supply - US Production  Greens Creek is the 3rd largest zinc producer in the US % of USA Zinc Production 2012 Comparison of 2012 Zinc Production 140 Doe Run 4.00% 122 Gordonsville 120 Zinc Production (thousands tonnes) 6.62% Greens 100 Creek 80 8.04% 80 58 60 Ea

  63. Slide 63: Reserves & Resources Update

    HECLA MINING COMPANY Appendix 7 Reserves & Resources Update (on Dec. 31, 2012 unless otherwise noted) Proven Reserves Tons Silver Gold Lead Zinc Silver Gold Lead Zinc Asset Location Ownership (000) (oz/ton) (oz/ton) % % (000 oz) (000 oz) Tons Tons Greens Creek (a) United States 100.0% 12 9.3 0.10 2.

  64. Slide 64: Reserves & Resources Update

    HECLA MINING COMPANY Appendix 7 Reserves & Resources Update (on Dec. 31, 2012 unless otherwise noted) Measured Resources Tons Silver Gold Lead Zinc Silver Gold Lead Zinc Asset Location Ownership (000) (oz/ton) (oz/ton) % % (000 oz) (000 oz) (Tons) (Tons) Greens Creek (2)(a) United States 100.0% -- -

  65. Slide 65: Reserves & Resources Update

    HECLA MINING COMPANY Appendix 7 Reserves & Resources Update (on Dec. 31, 2012 unless otherwise noted) Inferred Resources Tons Silver Gold Lead Zinc Silver Gold Lead Zinc Asset Location Ownership (000) (oz/ton) (oz/ton) % % (000 oz) (000 oz) (Tons) (Tons) Greens Creek (9)(a) United States 100.0% 3,78

Hecla Mining Company — J.P. Morgan Small-Mid Cap Conference 2013 on 6ix