Slide 1: PDAC 2019: Creating Value Through Innovative Mining
PDAC 2019 Creating Value Through Innovative Mining March 4, 2019 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: Safety First
SAFETY FIRST FIRST HARDROCK MINING COMPANY TO COMPLETE NMA CORESAFETY PROGRAM Hecla All Injury Frequency Rate (AIFR) 6 5.41 63% 5 4.57 4 Frequency Rate 3.42 3 2.76 2.00 2 1 0 2014 2015 2016 2017 2018 NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 3
Slide 4: Record Reserves/Resources
RECORD RESERVES/RESOURCES RECORD SILVER, GOLD AND LEAD RESERVES Reserves Increase Measures & Indicated Increase Resources Silver 191 Moz 8% Silver 208 Moz 65% Gold 2.8 Moz 26% Gold 7 Moz 47% Lead 773,740 Tons 5% Lead 837,880 Tons 27% Zinc 931,730 Tons 11% Zinc 771,070 Tons 73% Inferred Resources Inc
Slide 5: Silver and Gold Reserve Price Comparisons
SILVER AND GOLD RESERVE PRICE COMPARISONS COMPANY COMPARISON - HECLA AT LOW END OF KNOWN PEER RANGE NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 5
Slide 6: 2019 Outlook
2019 OUTLOOK LOWERING CASH COST AND AISC, AFTER BY-PRODUCT CREDITS, PER SILVER OUNCE NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 6
Slide 7: Greens Creek Has Generated +$1B of Free Cash Flow
GREENS CREEK HAS GENERATED +$1B OF FREE CASH FLOW SIGNIFICANT IMPROVEMENT IN PERFORMANCE SINCE HECLA BECAME OPERATOR Cumulative Net Cash Flow Greens Creek throughput has grown 15% since purchase in 2008 Hecla became operator Hecla became operator Hecla became operator • Automation drive beginning in
Slide 8: Greens Creek: Our Best Mine Is Getting Better
GREENS CREEK: OUR BEST MINE IS GETTING BETTER LONGER LIFE, MOVING REVENUE FORWARD, REDUCED DEVELOPMENT EXPECTED Definition • 15 to 20% increase in silver, gold, lead and zinc reserves from drilling and more data Exploration 4th Quarter • Improved plan has 8% higher grades over the next four years, a
Slide 9: Casa Berardi: Growing Reserves Production and Cash Flow
CASA BERARDI: GROWING RESERVES PRODUCTION AND CASH FLOW AGGRESSIVE EXPLORATION ADDS TO RESERVE AND RESOURCE BASE Casa Berardi throughput and reserves have grown 111% and 163% since purchase in 2013 Casa Berardi Longitudinal Section Reserve gain in Reserve gain in WMCP and EMCP Principal Extension He
Slide 10: Series of Open Pits at Casa Berardi
SERIES OF OPEN PITS AT CASA BERARDI WEST MINE CROWN PILLAR (WMCP) LATEST ADDITION TO THE PITS • 28% increase in gold reserves • WMCP pit is the 2nd largest and 2nd highest grade • Infilling on the WMCP and data to steepen the pit walls • Advancing underground exploration on the East portion of the m
Slide 11: Fire Creek Development Increasing
FIRE CREEK DEVELOPMENT INCREASING SETS THE STAGE FOR RESTORING THE MINE DEVELOPED STATE Fire Creek Development Advance (Feet) by Month 1400 1,237 1200 1000 799 831 800 701 618 600 441 362 394 400 307 302 288 280 200 110 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2018 Development Feet 2019
Slide 12: Appendix
APPENDIX Midas San Sebastian Lucky Friday Greens Creek Fire Creek Hollister Casa Berardi NYSE: HL
Slide 13: Endnotes
ENDNOTES 1. Silver and gold equivalent is calculated using the average market prices for the time period noted. 2. Cost of sales and other direct production costs and depreciation, depletion and amortization. 3. Cash cost, after by-product credits, per silver and gold ounce represents a non-GAAP mea
Slide 14: Greens Creek
GREENS CREEK CONSISTENT LOW-COST PRODUCTION IN A WILDERNESS AREA / NATIONAL MONUMENT Monument Q4 2017 Q4 2018 2017 2018 Silver Production (Moz) 2.1 2.2 8.4 8.0 Gold Production (Koz) 11.6 13.1 50.8 51.5 Cost of Sales2 $61.6 M $48.3 M $201.8 M $190.1 M Cash cost, after by-product $0.66/oz $1.79/oz $0.
Slide 15: Casa Berardi
CASA BERARDI MAKING A GOOD MINE GREAT Q4 2017 Q4 2018 2017 2018 Gold Production (Koz) 43.4 35.9 156.7 162.7 Cost of Sales1 $46.4 M $47.3 M $184.7 M $199.4 M Cash cost, after by-product $719/oz $940/oz $820/oz $800/oz credits, per gold oz2 AISC, after by-product $1,039/oz $1,348/oz $1,174/oz $1,080/o
Slide 16: Nevada Operations
NEVADA OPERATIONS MINES AND MILL TO OPERATE AS A COHESIVE UNIT, EMPHASIS ON CASH FLOW Q4/2018 2018* Gold Production (Koz) 19.1 32.9 Silver Production (Koz) 88.2 172.3 Cost of Sales2 $27.7 M $47.0 M Midas (high cost, short life) being Cash cost, after by-product $1,251/oz $1,221/oz put on care and ma
Slide 17: San Sebastian
SAN SEBASTIAN JUST-IN-TIME MINING; LOOKING TO MAKE IT A LONG-TERM MINE Q4 2017 Q4 2018 2017 2018 Silver Production (Moz) 0.759 0.443 3.3 2.0 Gold Production (Koz) 6.0 3.0 25.2 15.0 Cost of Sales1 $5.3 M $10.6 M $23.7 M $41.8 M Cash cost, after by-product $(3.80)/oz $14.78/oz $(3.36)/oz $9.69/oz cred
Slide 18: Lucky Friday
LUCKY FRIDAY POSITIONING FOR GROWTH AND LONGEVITY Q4 2017 Q4 2018 2017 2018 Silver Production (Koz) 69.6 13.0 838.7 169 Cost of Sales2 $0.6 M $3.9 M $15.1 M $9.8 M Cash cost, after by-product $(2.65)/oz N/A $5.81/oz N/A credits, per silver oz2 AISC, after by-product $15.57/oz N/A $12.48/oz N/A credi
Slide 19: Ramp-Up Nevada Exploration in 2019
RAMP-UP NEVADA EXPLORATION IN 2019 EMPHASIS ON UPGRADING RESOURCE TO RESERES; NEW RESOUCES ANTICIPATED 2018 Activities: 2019 Plan: • Reorganized and prioritized exploration assets. • 5 drills operating at Fire Creek. Over 54,000 • Limited drilling of Fire Creek, Midas and Hollister due feet of defin
Slide 20: Rock Creek & Montanore
ROCK CREEK & MONTANORE FINAL STAGES OF PERMITTING, EXPECTING TO ADVANCE IN 2018 Mine overview Rock Creek Site Overview • Montanore, a silver-copper mine located in Libby, Montana, was acquired from Mines Management in 2016 • Rock Creek, a silver-copper mine located in Noxon, Montana, was acquired fr
Slide 21: Why Invest in Hecla?
WHY INVEST IN HECLA? IMPROVING THE FUNDAMENTALS INCREASES VALUE Key Value Drivers Improvements In 2018/19 Jurisdiction Added Nevada Reserve Quality Growing reserves at industry low price assumptions Mine Life Mine life at our most important mines are long and getting longer Social License Injuries a
Slide 22: Innovating Across North American Focused Assets
INNOVATING ACROSS NORTH AMERICAN FOCUSED ASSETS OPERATIONS IN LOW-RISK & MINING-FRIENDLY JURISDICTIONS NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 22
Slide 23: Cash Cost and AISC Reconciliation to GAAP: 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 24: Cash Cost and AISC Reconciliation to GAAP: 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 25: Cash Cost and AISC Reconciliation to GAAP: Nevada Operations
CASH COST AND AISC RECONCILIATION TO GAAP NEVADA OPERATIONS 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, Be
Slide 26: Cash Cost and AISC Reconciliation to GAAP: San Sebastian
CASH COST AND AISC RECONCILIATION TO GAAP SAN SEBASTIAN 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 to GAAP: 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 28: Adjusted EBITDA Reconciliation to GAAP
ADUSTED EBITDA RECONCILLIATION TO GAAP Reconciliation of Net Income (Loss) (GAAP) to Adjusted EBITDA (non-GAAP) Dollars in thousands (USD) Twelve Months Ended 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18 Net income (loss) $ (86,968) $ 69,547 $ (28,520) $ (26,563) Plus: Interest expense, net of amount cap
Slide 29: Operations Free Cash Flow Reconciliation
OPERATIONS FREE CASH FLOW RECONCILIATION Greens Creek Free Cash Flow Reconciliation Casa Berardi Free Cash Flow Reconciliation (in thousands) (in thousands) 1 2018 1987-2018 2018 Gross Profit $ 10,938 Gross profit $ 75,288 $ 1,408,990 Non cash elements in gross profit: Non-cash elements in gross pro
Slide 30: Cash Cost and AISC Reconciliation: 2018 Estimates Silver Operations
CASH COST AND AISC RECONCILIATION TO GAAP 2018 ESTIMATES – SILVER OPERATIONS 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 Sus
Slide 31: Cash Cost and AISC Reconciliation: 2019 Estimates Gold Operations
CASH COST AND AISC RECONCILIATION TO GAAP 2019 ESTIMATES – GOLD OPERATIONS 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 Susta
Slide 32: Proven & Probable Mineral Reserves
PROVEN & PROBABLE MINERAL RESERVES (on Dec. 31, 2018 unless otherwise noted) NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 32
Slide 33: Measured and Indicated Mineral Resources
MEASURED AND INDICATED MINERAL RESOURCES (on Dec. 31, 2018 unless otherwise noted) Measured and Indicated Resources – 12/31/18 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 (6) 3
Slide 34: Inferred Mineral Resources
INFERRED MINERAL RESOURCES (on Dec. 31, 2018 unless otherwise noted) Inferred 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 (6) 2,470 14.6 0.09 3.0 7.3 - 35,982 219 74,410 181,400 - Lucky
Slide 35: Inferred Mineral Resources: Notes
INFERRED MINERAL RESOURCES (on Dec. 31, 2018 unless otherwise noted) Note: All estimates are in-situ except for the proven reserves at Greens Creek and San Sebastian which are in surface stockpiles. Resources are exclusive of reserves. (6) Mineral resources are based on $1350 gold, $21 silver, $1.10
Slide 36: 2008 – 2018 Reserve Table
2008 – 2018 RESERVE TABLE Silver Gold Gold Silver Gold Gold 2008 Proven Reserves Tons (oz/ton) (oz/ton) Silver (ounces) (ounces) 2014 Proven Reserves Tons (oz/ton) (oz/ton) Silver (ounces) (ounces) Greens Creek - - - - - Greens Creek 4,700 15.70 0.100 74,000 5,000 Lucky Friday 1,270,000 12.40 - 15,8