Hecla Mining Company · NYSE:HL

Hecla Mining — Denver Gold Forum 2013

62 slides from Hecla Mining's conference presentation, Sep 24, 2013

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

    Denver Gold Forum Top 10 Reasons to Invest in Hecla September 24, 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, anticipated payments, litigation outcome (including settlement negotiations), production, sales of assets, exploration results an

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

    HECLA MINING COMPANY Reason #10: Growing reserves and production 3

  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: Strong, Disciplined Production Growth Anticipated

    HECLA MINING COMPANY Strong, Disciplined Production Growth Anticipated Silver ounces (millions) Gold ounces (thousands) 15 200 Anticipated Production Range 134% 257% 175 6.4 56 2012 1 2017E 2012 2014E 2 1. Hecla’s Lucky Friday mine was closed during 2012. 5 2. Consists of Casa Berardi expected long-

  6. Slide 6: North American Focused Asset Portfolio

    HECLA MINING COMPANY North American Focused Asset Portfolio All operations in lower-risk, mining-friendly jurisdictions 6

  7. Slide 7: Reason #9: Mines in low political risk jurisdictions

    HECLA MINING COMPANY Reason #9: 3 Mines in low political risk jurisdictions 7

  8. Slide 8: Quality Silver and Gold Production in Low-Risk Jurisdictions

    HECLA MINING COMPANY Quality Silver and Gold 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.

  9. Slide 9: Reason #8: A good record of meeting guidance

    HECLA MINING COMPANY Reason #8: A good record of meeting guidance 9

  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 & rehabilitated major mine

    HECLA MINING COMPANY Reason #7: Settled legacy liabilities & Rehabilitated major mine 11

  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

    HECLA MINING COMPANY Reason #6: Diversified revenue stream 13

  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 Third Quarter Estimated  Policy allows hedging of 60% of the next 3 years of lead and zinc 17% production 11% 36%  Currently h

  15. Slide 15: Reason #5: Strong Financial Position

    HECLA MINING COMPANY Reason #5: Strong Financial Position 15

  16. Slide 16: Strong Cash Position

    HECLA MINING COMPANY Strong Cash Position $600 $571 $500 Hecla has $396M of liquidity1 Cash & Equivalents as of Q2/13 (millions) $440 $400 $296 $300 $265 $239 $200 $112 $100 $79 $48 $24 $0 Silver Pan Hecla Coeur Hochschild Silvercorp First Fortuna Endeavour Standard American Majestic Silver Cash & E

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

    HECLA MINING COMPANY Hecla: Zero Debt Obligations Until 2021 Peer Comparison Date Gross Current Issuer Issued Coupon Maturity Proceeds1 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 B2/B+ Eldorardo Gold 10-Dec-12 6.125% Sr. Notes 15-Dec-20

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

    HECLA MINING COMPANY Reason #4: Strong cash flow flexibility 18

  19. Slide 19: Q2 Cash Flow Flexibility

    HECLA MINING COMPANY Q2 Cash Flow Flexibility Cash Bridge Q2 2013 (US$M) $350 $300 $177 $178 $296 Largely Discretionary $62M $250 1 One-time $200 $32 Expenses $20M $169 $150 $35 $11 $3 $13 $20 $100 $50 $- Q2/2013 Adjusted EBITDA Capex Exploration + Pre- Purchase of Other Aurizon Cash from Aurizon Q2

  20. Slide 20: 2010 - Q2 2013 Cash Flow Flexibility

    HECLA MINING COMPANY 2010 - Q2 2013 Cash Flow Flexibility Cash Bridge 2010 - Q2 2013 (US$M) $1,000 Largely Discretionary $488M $900 1 $715 $800 $700 $600 $500 One-time Expenses $328 $219 $400 $125 $178 $178 $296 $300 $35 $200 $105 $5 $100 $193 $26 $- 2010 Beginning Adjusted Capex Exploration + Divid

  21. Slide 21: 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 13% to $178 million  Exploration exp

  22. Slide 22: Reason #3: Low cost producer with strong margins

    HECLA MINING COMPANY Reason #3: Low cost producer with strong margins 22

  23. Slide 23: Continued Strong Margins

    HECLA MINING COMPANY Continued Strong Margins $40 Current Silver $35 $35.30 Price: $23.131 $32.11 $28.86 $30 $25 $22.70 97% 92% $20 $16.27 $/oz $34.15 $29.41 $21.84 76% $15.63 106% $14.40 $15 88% $24.16 $10.71 66% $10 $10.20 71% $13.72 $5 $5.56 $4.20 $1.91 $2.70 $7.02 $0 ($1.46) $1.15 ($5) 2008 2009

  24. Slide 24: Reason #2: Newly acquired Casa Berardi

    HECLA MINING COMPANY Reason #2: Our newly acquired Casa Berardi has strong growth and cost reduction potential 24

  25. Slide 25: Casa Berardi - Increasing Gold Production

    HECLA MINING COMPANY Casa Berardi - Increasing Gold Production  Acquisition completed 6/1/13 Cost reductions expected with growing gold production  Grade and production expected to increase by Q4/13 $1,400 0.6 Total Cash Cost, Net of By-product Credits, per Costs  Shaft deepening expected to $1,2

  26. Slide 26: Casa Berardi - Good Exploration Potential

    HECLA MINING COMPANY Casa Berardi - Good Exploration Potential 26

  27. Slide 27: 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) 27 Source: Public

  28. Slide 28: Reason #1: Two extraordinary silver assets

    HECLA MINING COMPANY Reason #1: Our two extraordinary silver assets are driving Hecla’s future 28

  29. Slide 29: Greens Creek - Exceeding Expectations

    HECLA MINING COMPANY Greens Creek - Exceeding Expectations  Quarterly silver production of 2 Q2 vs. Q1 Production and Cost Improvements million ounces  2nd highest quarterly $6.00 2.1 Production tonnage in mine’s history Total Cash Cost, Net of By-product Credits, per 2.00 Moz $5.02/oz ↑11% 2.0 

  30. Slide 30: Greens Creek - Future Growth

    HECLA MINING COMPANY Greens Creek - Future Growth Southwest Bench Lower Southwest Deep Southwest Location View Looking North 200 South Model 500 Feet View Looking North/Northwest 30

  31. Slide 31: Greens Creek: World-Class Silver Mine

    HECLA MINING COMPANY Greens Creek: World-Class Silver Mine Spectacular Performance over a Variety of Silver Prices 30 Vein $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

  32. Slide 32: Lucky Friday - Ramping Up Production

    HECLA MINING COMPANY Lucky Friday - Ramping Up Production  All stopes back in operation Expected cost reductions and production increases  Expect to reach full capacity in September with costs per ounce $40.00 1.4 Production 1.30E Moz declining over H2/13 Total Cash Cost, Net of By-product Credits

  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 4900 level Current mining from 5900 level access 5900 level 6500 level 7500 level Looking NW 33 *Assuming prices of $20.00/oz silver, $0.85/lb lead, and $0.85/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: Quality Assets and Strong Performance

    HECLA MINING COMPANY Financial Strength From Quality Assets Portfolio of Three High Quality, Operating in Long-Life Cash Flow Low Political Quality Assets and Strong Performance Operations Flexibility Risk Jurisdictions Financial Strength High Multiple Secure Cash Revenue Margins Strong Investment S

  36. Slide 36: Appendix

    FS a MINING COMPANY

  37. Slide 37: Appendices Table of Contents

    HECLA MINING COMPANY Appendix Table of Contents Appendices Page 1. Management and Financial Information 38 2. Silver Landscape 47 3. Exploration 49 4. Silver Overview 57 5. Zinc Overview 61 37

  38. Slide 38: Seasoned Management Team with Significant Experience

    HECLA MINING COMPANY 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 Exploration for Co

  39. Slide 39: 2013 Guidance

    HECLA MINING COMPANY Appendix 1 2013 Guidance  Silver production of between 8 and 9 million ounces  Total Cash Cost, Net of By-Product Credits, per Silver Ounce of $5.00  Gold production from Casa Berardi of approximately 60,000 ounces in 2H 2013 at a Total Cash Cost, Net of By-Product Credits, p

  40. Slide 40: Coeur d'Alene Basin Litigation

    HECLA MINING COMPANY Appendix 1 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 1 Total Cash Cost GAAP Reconciliation Reconciliation of Total Cash Cost, Net of 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) Q2/201

  42. Slide 42: Total Cash Cost GAAP Reconciliation

    HECLA MINING COMPANY Appendix 1 Total Cash Cost GAAP Reconciliation Reconciliation of Total Cash Cost, Net of 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

  43. Slide 43: Total Cash Cost GAAP Reconciliation

    HECLA MINING COMPANY Appendix 1 Total Cash Cost GAAP Reconciliation Reconciliation of Cash Costs per Ounce to Generally Accepted Accounting Principles (GAAP) for Casa Berardi (dollars and ounces in thousands, except per ounce - unaudited) June 30, 2013 2012 (1) Cash operating costs $ 7,804 $ - By-pr

  44. Slide 44: Hecla Adjusted EBITDA Reconciliation

    HECLA MINING COMPANY Appendix 1 Hecla Adjusted EBITDA Reconciliation Reconciliation of Adjusted EBITDA to Generally Accepted Accounting Principles (GAAP) 2010 2011 2012 Q1/2013 Q2/2013 Net Income $ 48,983 $ 151,164 $ 14,954 $ 11,094 $ (24,858) Plus: Interest expense 2,211 2,875 2,427 704 6,454 Plus:

  45. Slide 45: Adjusted Earnings Reconciliation

    HECLA MINING COMPANY Appendix 1 Adjusted Earnings Reconciliation Reconciliation of Net Income Applicable to Common Shareholders (GAAP) to Earnings Before Adjustments (dollars and ounces in thousands, except per ounce - unaudited) Three Months Ended June 30 2013 2012 Net income applicable to common s

  46. Slide 46: Hecla Adjusted EBITDA Reconciliation

    HECLA MINING COMPANY Appendix 1 Hecla Adjusted EBITDA Reconciliation Reconciliation of Adjusted EBITDA to Generally Accepted Accounting Principles (GAAP) Three Months Ended June 30, 2013 2012 Net Income $ (24,858) $ 2,524 Plus: Interest expense, net of amount capitalized 6,454 505 Plus/(Less): Incom

  47. Slide 47: Higher Silver Reserve Grade Among Peers

    HECLA MINING COMPANY Appendix 2 Higher Silver Reserve Grade Among Peers 47 Source: Company Filings, BMO Capital Markets (09/09/13)

  48. Slide 48: High Grade Long-Life Mines

    HECLA MINING COMPANY Appendix 2 High Grade Long-Life Mines 48 Source: Company Filings, BMO Capital Markets (09/09/13)

  49. Slide 49: New Quebec Gold Assets

    HECLA MINING COMPANY Appendix 3 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

  50. Slide 50: Exploration - Greens Creek (Alaska)

    HECLA MINING COMPANY Appendix 3 Exploration - Greens Creek (Alaska) Underground Exploration Targets Looking NE East Ore extension SW Bench 5250 South Resource Extension Gallagher 200 South Resource extensions 50

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

    HECLA MINING COMPANY Appendix 3 Lucky Friday & Silver Valley - Exploration 51

  52. Slide 52: Organic Growth - Star Pre-Development (Idaho)

    HECLA MINING COMPANY Appendix 3 Organic Growth - Star Pre-Development (Idaho) Longitudinal Section Looking North Water level - Water level #4 Shaft behind Lucky Friday expansion area 52

  53. Slide 53: Organic Growth - San Sebastian (Mexico)

    HECLA MINING COMPANY Appendix 3 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 53

  54. Slide 54: San Sebastian (Mexico) - Middle Vein

    HECLA MINING COMPANY Appendix 3 San Sebastian (Mexico) - Middle Vein Pre-2011 October 2012 July 2013 54

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

    HECLA MINING COMPANY Appendix 3 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  2013 Activities: 21 Square

  56. Slide 56: Delivering Growth - San Juan Silver (Colorado)

    HECLA MINING COMPANY Appendix 3 Delivering Growth - San Juan Silver (Colorado) Advance of the Bulldog Decline Shotcrete Application • Bulldog underground infrastructure now advanced over 2,000 feet • Completion expected in Q4 2013 56

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

    HECLA MINING COMPANY Appendix 4 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 4 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 4 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 4 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 5 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 5 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

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