Hecla Mining Company · NYSE:HL
Hecla Mining — Q3 2023 Earnings Presentation
40 slides from Hecla Mining's earnings presentation, Nov 7, 2023
Slide 1: Third Quarter 2023 Conference Call
Largest U.S. silver producer, soon-to-be largest Canadian silver producer THIRD QUARTER 2023 Conference Call RESPONSIBLE. SAFE. INNOVATIVE.
Slide 2: Cautionary Statements
HECLA MINING COMPANY NYSE: HL CAUTIONARY STATEMENTS THIRD QUARTER 2023 Cautionary Statement Regarding Forward-Looking Statements unanticipated events, except as may be required under applicable securities laws. Investors should not assume that any lack of update to a previously issued “forward-looki
Slide 3: 5 Year Recap: Value Creation Through Quality Assets
5 YEAR RECAP: VALUE CREATION THROUGH QUALITY ASSETS WITH HECLA MINING COMPANY NYSE: HL RICH MINERAL ENDOWMENTS THIRD QUARTER 2023 2018 – 2022 Summary: Solid foundation of high-quality silver assets with long reserve lives +79% +88% Solar could account +37% +31% +27% +21% for 33% of total U.S. 2018 –
Slide 4: Third Quarter Highlights
HECLA MINING COMPANY NYSE: HL THIRD QUARTER HIGHLIGHTS THIRD QUARTER 2023 Operational Highlights Lucky Friday on track to begin production early 2024 Keno Hill ramping-up, laser focus on safety Strong operational performance from Greens Creek and Casa Berardi Consolidated silver cost guidanc
Slide 5: Financial Review
FINANCIAL REVIEW RESPONSIBLE. SAFE. INNOVATIVE. 5
Slide 6: Committed to a Strong Balance Sheet
HECLA MINING COMPANY NYSE: HL COMMITTED TO A STRONG BALANCE SHEET THIRD QUARTER 2023 Financial flexibility and leverage ratio of <2x are top priorities YTD 2023, Revenues By Metal Net Debt to Adjusted EBITDA Cash and Liquidity YTD 2023: Free cash flow from silver Net debt to Adjusted EBITDA ratio hi
Slide 7: Silver Margins Are Best in the Industry
HECLA MINING COMPANY NYSE: HL SILVER MARGINS ARE BEST IN THE INDUSTRY THIRD QUARTER 2023 Strong Silver Margins Free Cash Flow: Greens Creek, Lucky Friday ($/silver ounce) ($ million) AISC (4) Realized Price Margin (4) Realized Silver Price (3) Free Cash Flow (2) $25.24 2020 – Q1-Q3/2023: $23.28 $21.
Slide 8: Operational Review
OPERATIONAL REVIEW RESPONSIBLE. SAFE. INNOVATIVE. 8
Slide 9: Greens Creek: A World Class Mine
HECLA MINING COMPANY NYSE: HL GREENS CREEK: A WORLD CLASS MINE GREENS CREEK THIRD QUARTER 2023 Poised for a strong year, driven by solid, consistent operational performance On track to achieve 2,600 tons per day throughput by Q4/2023 YTD Cash flow from operations $122.7M, Free Cash Flow: $101.7M
Slide 10: Casa Berardi: Executing on Surface Transition Plan
HECLA MINING COMPANY NYSE: HL CASA BERARDI: EXECUTING ON SURFACE TRANSITION PLAN CASA THIRD BERARDI QUARTER 2023 Improved operational and cost performance in Q3 Q3 Gold production of 24.3Koz, YTD: 67.8Koz Cash cost guidance lowered to reflect capitalization of certain tailings construction costs
Slide 11: Lucky Friday: Production Re-start Early 2024
HECLA MINING COMPANY NYSE: HL LUCKY FRIDAY: PRODUCTION RE-START EARLY 2024 LUCKY FRIDAY THIRD QUARTER 2023 Mitigation plans on schedule Production suspended due to the fire in the secondary escapeway (#2 shaft) Fire extinguished in early September, mitigation work in progress Developing a new
Slide 12: Mitigation Plans for Secondary Egress
HECLA MINING COMPANY NYSE: HL MITIGATION PLANS FOR SECONDARY EGRESS LUCKY FRIDAY THIRD QUARTER 2023 Vent Bypass Raise Escape Raise and Ramp Escape Raise 290 feet 4050 Alimak Ventilation Raise 850 feet Ramp – 1,600 feet 12
Slide 13: Keno Hill: Largest Primary Silver Reserves in Canada
HECLA MINING COMPANY NYSE: HL KENO HILL: LARGEST PRIMARY SILVER RESERVES IN CANADA KENO HILL2023 THIRD QUARTER Focusing on safety while ramping-up production Produced 0.7Moz silver in Q3, average grade of 33 ounce per ton, YTD - 0.9Moz Mill reconciliations for tonnage and grade are favorable to
Slide 14: Progress on Critical Projects
HECLA MINING COMPANY NYSE: HL PROGRESS ON CRITICAL PROJECTS KENO HILL2023 THIRD QUARTER Critical projects to support commercial production and increase ore headings completed in November Secondary Crushing Circuit Modifications Shotcrete Plant 14
Slide 15: Exploration Drilling Confirms Significant Potential
HECLA MINING COMPANY NYSE: HL EXPLORATION DRILLING CONFIRMS SIGNIFICANT POTENTIAL KENO HILL2023 THIRD QUARTER Longitudinal section of the Longitudinal section of the Bermingham mineralization Bear Vein looking SE Footwall Vein looking SE extending to the northeast and down dip High-grade mineraliz
Slide 16: Guidance – Silver Production Growth
HECLA MINING COMPANY NYSE: HL GUIDANCE – SILVER PRODUCTION GROWTH THIRD QUARTER 2023 Gold Production Silver Production (Moz) Silver Equivalent (Moz) Gold Equivalent (Koz) (Koz) Previous Current Current Previous Current Previous Current Consolidated 2023 Total 14.5 - 15.5 14.4 – 14.8 140.0 – 160.0 36
Slide 17: Solar Predicted to Grow by 9% per Year
HECLA MINING COMPANY NYSE: HL SOLAR PREDICTED TO GROW BY 9% PER YEAR THIRD QUARTER 2023 A GW of solar required almost 0.5Moz of silver 2022 2030* Solar installed (GW) 269 +9%/year 498 140 249 Silver used in solar +109Moz Moz Moz 1.75x % of World silver demand 12% 21% Source: World Energy Outlook, 20
Slide 18: Appendix: End Notes and GAAP Reconciliations
APPENDIX End Notes and GAAP reconciliations RESPONSIBLE. SAFE. INNOVATIVE. 18
Slide 19: End Notes
HECLA MINING COMPANY NYSE: HL END NOTES THIRD QUARTER 2023 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
Slide 20: Guidance – Production and Costs by Operation
HECLA MINING COMPANY NYSE: HL GUIDANCE – PRODUCTION AND COSTS BY OPERATION THIRD QUARTER 2023 Silver Production (Moz) Gold Production (Koz) Silver Equivalent (Moz)6 Gold Equivalent (Koz)6 Previous Current Previous Current Previous Current Previous Current 2023 Production 2023 Greens Creek * 9.0 - 9.
Slide 21: GAAP Reconciliations
GAAP RECONCILIATIONS RESPONSIBLE. SAFE. INNOVATIVE. 21
Slide 22: Adjusted EBITDA Reconciliation to GAAP
HECLA MINING COMPANY NYSE: HL ADJUSTED EBITDA RECONCILIATION TO GAAP THIRD QUARTER 2023 Reconciliation of Net Loss (GAAP) to Adjusted EBITDA (non-GAAP) Last Twelve Months Q3 2023 Q2 2023 Dollars in thousands (USD) Net loss $ (45,734) $ (46,845) Interest expense 42,194 42,358 Income and mining tax ex
Slide 23: Cash Cost and AISC Reconciliation to GAAP
HECLA MINING COMPANY NYSE: HL CASH COST AND AISC RECONCILIATION TO GAAP THIRD QUARTER 2023 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 Sustain
Slide 24: Cash Cost and AISC Reconciliation to GAAP: Greens Creek
HECLA MINING COMPANY NYSE: HL CASH COST AND AISC RECONCILIATION TO GAAP THIRD QUARTER 2023 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 S
Slide 25: Cash Cost and AISC Reconciliation to GAAP: Lucky Friday
HECLA MINING COMPANY NYSE: HL CASH COST AND AISC RECONCILIATION TO GAAP THIRD QUARTER 2023 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 S
Slide 26: Cash Cost and AISC Reconciliation to GAAP: Keno Hill
HECLA MINING COMPANY NYSE: HL CASH COST AND AISC RECONCILIATION TO GAAP THIRD QUARTER 2023 Keno Hill 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 Sust
Slide 27: Cash Cost and AISC Reconciliation to GAAP: Casa Berardi
HECLA MINING COMPANY NYSE: HL CASH COST AND AISC RECONCILIATION TO GAAP THIRD QUARTER 2023 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 S
Slide 28: Cash Cost and AISC Reconciliation: 2023 Silver and Gold Estimates
HECLA MINING COMPANY NYSE: HL CASH COST AND AISC RECONCILIATION TO GAAP THIRD QUARTER 2023 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-pro
Slide 29: Free Cash Flow (Non-GAAP) Reconciliation
HECLA MINING COMPANY NYSE: HL FREE CASH FLOW (NON-GAAP) RECONCILIATION THIRD QUARTER 2023 Reconciliation of cash provided by operating activities (GAAP) to Free Cash Flow (non-GAAP) for Greens Creek, Lucky Friday and Casa Berardi 2018 to 2022 Total Greens Creek Lucky Friday Casa Berardi in millions
Slide 30: Free Cash Flow (Non-GAAP) Reconciliation
HECLA MINING COMPANY NYSE: HL FREE CASH FLOW (NON-GAAP) RECONCILIATION THIRD QUARTER 2023 Greens Creek reconciliation of cash provided by operating activities (GAAP) to free cash flow (non-GAAP) TOTAL YTD 2023 2022 2021 2020 in millions Cash provided by operating activities 660 123 151 209 177 Addit
Slide 31: Mineral Reserves and Resources
MINERAL RESERVES AND RESOURCES RESPONSIBLE. SAFE. INNOVATIVE. 31
Slide 32: Proven & Probable Mineral Reserves (1/2)
HECLA MINING COMPANY NYSE: HL PROVEN & PROBABLE MINERAL RESERVES (1/2) THIRD QUARTER 2023 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
Slide 33: Proven & Probable Mineral Reserves (2/2)
HECLA MINING COMPANY NYSE: HL PROVEN & PROBABLE MINERAL RESERVES (2/2) THIRD QUARTER 2023 Proven & Probable Reserves 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% 10,675 10
Slide 34: Measured & Indicated Mineral Resources (1/3)
HECLA MINING COMPANY NYSE: HL MEASURED & INDICATED MINERAL RESOURCES (1/3) THIRD QUARTER 2023 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) Unite
Slide 35: Measured & Indicated Mineral Resources (2/3)
HECLA MINING COMPANY NYSE: HL MEASURED & INDICATED MINERAL RESOURCES (2/3) THIRD QUARTER 2023 Indicated Resources (10) 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) Uni
Slide 36: Measured & Indicated Mineral Resources (3/3)
HECLA MINING COMPANY NYSE: HL MEASURED & INDICATED MINERAL RESOURCES (3/3) THIRD QUARTER 2023 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 (12,1
Slide 37: Inferred Mineral Resources
HECLA MINING COMPANY NYSE: HL INFERRED MINERAL RESOURCES THIRD QUARTER 2023 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
Slide 38: Mineral Reserves and Resources Footnotes
HECLA MINING COMPANY NYSE: HL MINERAL RESERVES AND RESOURCES FOOTNOTES THIRD QUARTER 2023 Net debt 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. 1. The term “reserve” means an estimate of t
Slide 39: Mineral Reserves and Resources Footnotes
HECLA MINING COMPANY NYSE: HL MINERAL RESERVES AND RESOURCES FOOTNOTES THIRD QUARTER 2023 17. Indicated resources for most zones at San Sebastian based on $1,500/oz gold, $21/oz silver, $1.15/lb lead, $1.35/lb zinc and $3.00/lb copper using a cut-off grade of $90.72/ton ($100/tonne); $1,700/oz gold
Slide 40: Thank You
THANK YOU RESPONSIBLE. SAFE. INNOVATIVE.