Hecla Mining Company · NYSE:HL
Hecla Mining — Q3 2021 Earnings Presentation
34 slides from Hecla Mining's earnings presentation, Nov 4, 2021
Slide 1: Third Quarter 2021 Earnings Conference Call
THIRD QUARTER 2021 Earnings Conference Call November 4, 2021 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) Cautionary Statement Regarding Forward Looking Statements (Cont’d) In addition, material risks that could cause actual results to differ from forward-looking statements include, but are not limited to: (i) gold, silver and other metals price volatility; (ii) operating
Slide 4: Third Quarter Highlights
THIRD QUARTER HIGHLIGHTS Strong operational and financial performance, record quarterly exploration spend Financial Highlights • Quarterly Sales of $193.6 million, Cash Flow from Operations of $42.5 million, Free Cash Flow of $15.6 million(1) • Strong Balance Sheet, $190.9 million in cash, $420 mill
Slide 5: Financial Review
Financial Review NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 5
Slide 6: Q3 Production and Cost Highlights
Q3 PRODUCTION AND COST HIGHLIGHTS Hecla produces >40% of U.S. silver, #1 silver and #3 lead and zinc producer in the U.S Silver Production: 3.5 Moz Cost of Sales(5): $78.8 M Cash Cost, after by-product credits(3): $2.49/oz 15% AISC, after by-product credits(4): $12.82oz 30% Realized Price: $23.97/oz
Slide 7: Financial Strength and Flexibility
FINANCIAL STRENGTH AND FLEXIBILITY Increasing cash balance through consistent free cash flow generation Cash Balance Net Debt/Adjusted EBITDA(6) Available liquidity of approx. $420 million(*) Maintained 1.2x leverage ratio, lowest since Sr. ($ millions) Notes issued in 2013 190.9 2.5 181.5 2.0x 139.
Slide 8: Operations Review
Operations Review NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 8
Slide 9: Greens Creek: Positioned for Strong Q4
GREENS CREEK: POSITIONED FOR STRONG Q4 Cash flow from operations of $317 million and Free Cash Flow $290 million in the last 6 quarters • Production impacted by mine sequencing driven primarily by manpower issues • Cost guidance maintained, silver production guidance lowered to 9.2 – 9.5 Moz to refl
Slide 10: Lucky Friday: Continues to Deliver Strong Results
LUCKY FRIDAY: CONTINUES TO DELIVER STRONG RESULTS New mining method expected to enhance long-term value • On track to achieve production and cost guidance • New mining method (patent pending) showing improvements in controlling seismicity and improving safety • Generated YTD cash flow from operation
Slide 11: Casa Berardi: Cost Focus Continues, Production Remains Strong
CASA BERARDI: COST FOCUS CONTINUES, PRODUCTION REMAINS STRONG • Record quarterly throughput, consistent mill availability of approximately 90% and increased mill recoveries • Cost increase due to higher throughput, maintenance and reagent costs at the mill and underground repairs • Production guidan
Slide 12: Guidance
Guidance NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 12
Slide 13: Guidance: Higher Gold Production
GUIDANCE: HIGHER GOLD PRODUCTION Growing cash flow from increasing silver production and higher prices Consolidated Production Outlook * Silver Production (Moz) Gold Production (Koz) Silver Equivalent (Moz)7 Gold Equivalent (Koz)7 2021 Total 12.6 – 13.3 193 - 201 42.0 – 43.5 469 – 485 2022 Total 13.
Slide 14: Third Quarter 2021 Earnings Conference Call
THIRD QUARTER 2021 Earnings Conference Call November 4, 2021 RESPONSIBLE. SAFE. INNOVATIVE. NYSE: HL
Slide 15: Appendix
Appendix NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 15
Slide 16: Endnotes
ENDNOTES 1. Free cash flow is a non-GAAP measure and is calculated as cash flow from operations less additions to property, plant and equipment. Reconciliation to GAAP is shown in the appendix. 2. Realized silver margin is a non-GAAP measure and is calculated as realized market price of silver less
Slide 17: ESG: Small Footprint, Large Benefit
ESG: SMALL FOOTPRINT, LARGE BENEFIT Environment, Community and Safety are three pillars of our ESG program Small Environment Safety Large Community Benefit Footprint • Well-established safety culture • Expected Net zero emissions in 2021* • Support >2,300 families • Casa Berardi awarded the John T.
Slide 18: Our ESG Commitment Is: Continuous Improvement
OUR ESG COMMITMENT IS: CONTINUOUS IMPROVEMENT Continuing decades of strong performance Health & Safety • AIFR of 1.63, approximately 73% reduction over the last nine years • 2020 ended with AIFR of 1.22 • Industry leading COVID-19 response • Vaccination rates higher than the U.S. average • “Take It
Slide 19: Our ESG Commitment Is: Continuous Improvement
OUR ESG COMMITMENT IS: CONTINUOUS IMPROVEMENT Continuing decades of strong performance Social • Signed Collaboration Agreement with Pikogan First Nation at Casa Berardi Mine • Initiated a buy local voucher program in partnership with community chambers of commerce to support local vendors during the
Slide 20: Free Cash Flow (Non-GAAP) Reconciliation
FREE CASH FLOW (NON-GAAP) RECONCILIATON Reconciliation of Cash provided by operating activities (GAAP) to Free Cash Flow (non-GAAP) in thousands Three Months Ended Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Cash Flow from Operations $ 54,900 $ 57,300 $ 4,927 $ 37,526 $ 7
Slide 21: Free Cash Flow (Non-GAAP) Reconciliation
FREE CASH FLOW (NON-GAAP) RECONCILIATON Reconciliation of Cash provided by operating activities (GAAP) to Free Cash Flow (non-GAAP) Three Months Ended Dollars are in thousands Q3 2021 Q2 2021 Q1 2021 Q4 2020 Q3 2020 Q2 2020 Greens Creek Cash provided (used) by operating activities 40,626 68,521 44,3
Slide 22: Adjusted EBITDA Reconciliation to GAAP
ADJUSTED EBITDA RECONCILIATION TO GAAP Reconciliation of Net Income (Loss) (GAAP) and Debt (GAAP) to Adjusted EBITDA (non-GAAP) Dollars in thousands (USD) Twelve Months Ended 30-Jun-20 30-Sep-20 31-Dec-20 31-Mar-21 30-Jun-21 30-Sep-21 Net (loss) income $ (58,705) $ (25,561) $ (16,790) $ 19,366 $ 34,
Slide 23: Cash Cost and AISC Reconciliation to GAAP: Silver
CASH COST AND AISC RECONCILIATION TO GAAP Silver Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (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 24: Cash Cost and AISC Reconciliation to GAAP: Gold
CASH COST AND AISC RECONCILIATION TO GAAP Gold Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Costs, Before By-produ
Slide 25: Cash Cost and AISC Reconciliation: Greens Creek
CASH COST AND AISC RECONCILIATION TO GAAP Greens Creek Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Costs, Before
Slide 26: Cash Cost and AISC Reconciliation: Lucky Friday
CASH COST AND AISC RECONCILIATION TO GAAP Lucky Friday Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Costs, Before
Slide 27: Cash Cost and AISC Reconciliation: Casa Berardi
CASH COST AND AISC RECONCILIATION TO GAAP Casa Berardi Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Costs, Before
Slide 28: Cash Cost and AISC Reconciliation: 2021 Silver Estimates
CASH COST AND AISC RECONCILIATION TO GAAP 2021 Silver Estimates Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Costs
Slide 29: Cash Cost and AISC Reconciliation: 2021 Gold Estimates
CASH COST AND AISC RECONCILIATION TO GAAP 2021 Gold Estimates Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Costs,
Slide 30: 2021 Guidance: Production and Costs
2021 GUIDANCE: PRODUCTION AND COSTS NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 30
Slide 31: Proven & Probable Mineral Reserves
PROVEN & PROBABLE MINERAL RESERVES(1) (On December 31, 2020 unless otherwise noted) Proven Reserves Tons Silver Gold Lead Zinc Copper Silver Gold Lead Zinc Copper Asset (000) (oz/ton) (oz/ton) % % % (000 oz) (000 oz) Tons Tons Tons Greens Creek (2) 3 21.8 0.10 3.7 7.8 - 70 0.3 120 250 - Lucky Friday
Slide 32: Measured and Indicated Mineral Resources
MEASURED AND INDICATED MINERAL RESOURCES (On December 31, 2020 unless otherwise noted) Measured Resources Tons Silver Gold Lead Zinc Copper Silver Gold Lead Zinc Copper Asset (000) (oz/ton) (oz/ton) % % % (000 oz) (000 oz) (Tons) (Tons) Tons Greens Creek (5) 297 12.9 0.11 3.1 10.3 - 3,837 33 9,310 3
Slide 33: Inferred Mineral Resources
INFERRED MINERAL RESOURCES (On December 31, 2020 unless otherwise noted) Inferred Resources Tons Silver Gold Lead Zinc Copper Silver Gold Lead Zinc Copper (000 Asset (000) (oz/ton) (oz/ton) % % % (000 oz) (Tons) (Tons) Tons oz) Greens Creek (5) 1,767 13.2 0.08 2.8 7.0 - 23,370 145 49,670 123,480 - L
Slide 34: Mineral Resources (Notes)
MINERAL RESOURCES (NOTES) (On December 31, 2020 unless otherwise noted) Note: All estimates are in-situ except for the proven reserves at Greens Creek and Fire Creek which are in surface stockpiles. Resources are exclusive of reserves. (5) Mineral resources are based on $1500 gold, $21 silver, $1.15