Hecla Mining Company · NYSE:HL
Hecla Mining — Q2 2023 Earnings Presentation
27 slides from Hecla Mining's earnings presentation, Aug 9, 2023
Slide 1: Hecla Mining Company Second Quarter 2023 Conference Call
HECLA MINING COMPANY SECOND QUARTER 2023 Conference Call August 9, 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: 5-Year Report: Growing Production, Free Cash Flow
5-YEAR REPORT: GROWING PRODUCTION, FREE CASH FLOW Silver focused growth in tier 1 jurisdictions 2018 – 2022, 5 YEAR SUMMARY +79% +31% +37% +40% +27% +21% 2022 – 2025* 2018 – 2022 $767 Absolute Relative** million Revenues Silver Reserves*** Silver Production Share Performance Free Cash Flow - Greens
Slide 5: Second Quarter Highlights
SECOND QUARTER HIGHLIGHTS Strong, safe operational performance drives free cash flow generation at silver operations Strong Operational Quarter, Stellar Safety Performance • 3rd highest silver production over a six-month period • 1.3 Moz silver production from Lucky Friday, highest since Q1/2020 • K
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 – H1/2023, Greens Creek and Lucky Friday have generated: • > $780 million in cash flow from operations, > $560 million in free cash flow2 Free Cash Flow: Greens Creek, Lucky Friday, ($
Slide 8: Committed to a Strong Balance Sheet
COMMITTED TO A STRONG BALANCE SHEET Leverage ratio expected to be <2.0x in H2/2023 H1/2023: Free cash flow from Net debt to adjusted EBITDA of Cash and cash equivalents of silver operations* is $107 million(2) 2.1, expected to decline to < 2.0x $106.8 million, liquidity ~ of $219 in H2/2023 million
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 Robust free cash flow generation, Poised for a strong 2023 • Target throughput of 2,600 tpd by Q4/2023 2,600 tpd by Q4/2023 • Production costs declined over Q1/2023 due to lower fuel prices. Higher cash costs and AISC per ounce due to lower zinc by-product
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 0.52 Highest quarterly • Lower sales due to $3 million silver concentrate inventory buildup; higher production costs due to production
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 • Restarted mill in Q2/2023, silver production of 184 Koz Reserve Life: 8+ Years • Average mined grades 29 opt; milled grades lower (17 opt) due to lower grade stockpile • H1/2023 capital
Slide 13: Keno Hill: Progress
KENO HILL: PROGRESS Recent project photos – high grade at Bear vein, secondary crusher upgrades Bermingham Bear Vein – 1110 Level Mill – Crushing Circuit Upgrade 161.8 oz/ton Silver Over 4 meters (13 feet) NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 13
Slide 14: Casa Berardi: Transitioning to Open Pit
CASA BERARDI: TRANSITIONING TO OPEN PIT Pivoting to long-term value, free cash flow generation over the next four years • Strategic pivot to transition to full open pit operations by mid-2024 Reserve Life: 14 Years • Closing underground operations in a phased process, East Mine closed in July 2023,
Slide 15: Guidance – Strong Silver Production Growth
GUIDANCE – STRONG SILVER PRODUCTION GROWTH Strong margins and free cash flow generation at silver operations Silver Production (Moz) Gold Production (Koz) Silver Equivalent (Moz) Gold Equivalent (Koz) Previous Current Previous Current Previous Current Consolidated 2023 Total 16.0 – 17.5 160 – 170 14
Slide 16: Silver in Photovoltaic Technologies
SILVER IN PHOTOVOLTAIC TECHNOLOGIES Higher silver usage technologies are expected to increase market share New solar cell manufacturing projects expected 80% to use TOPCon or HJT starting in 2023* Increase in silver content of TOPCon/HJT 30%, 122% technology compared to PERC technology, PERC is the
Slide 17: 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 18: Appendix
APPENDIX 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 Previous Current Previous Current Previous Current 2023 Greens Creek * 2023 Production 9.0 - 9.5 50 - 55 55 - 65 21.0 - 22.0 21.5 - 22.5 255 - 265 255 - 270
Slide 20: GAAP Reconciliations
GAAP RECONCILIATIONS NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 20
Slide 21: Adjusted EBITDA Reconciliation to GAAP
ADJUSTED EBITDA RECONCILIATION TO GAAP Reconciliation of Net Income (GAAP) to Adjusted EBITDA (non-GAAP) Last Twelve Months Q1/2023 Q2/2023 Net (loss) income $ (44,674) $ (46,845) Plus: Interest expense 42,552 42,358 Plus/(Less): Income and mining tax provision (benefit) (9,955) (5,047) Plus: Deprec
Slide 22: 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 23: Free Cash Flow (Non-GAAP) Reconciliation
FREE CASH FLOW (NON-GAAP) RECONCILIATON 2018-2022 Reconciliation of Cash provided by operating activities (GAAP) to Free Cash Flow (non-GAAP) Greens Creek, Lucky Friday, Casa Berardi in millions 2018-2022 Cash provided (used) by operating activities $ 1,224 Add: Exploration 28 Less: Additions to pro
Slide 24: 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 25: 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 26: 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 27: Cash Cost and AISC Reconciliation: 2023 Silver and Gold 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