Hecla Mining Company · NYSE:HL
Hecla Mining — Scotiabank Mining Conference 2021
27 slides from Hecla Mining's conference presentation, Dec 1, 2021
Slide 1: Scotiabank Mining Conference: United States' Leading Silver Producer
SCOTIABANK MINING CONFERENCE United States’ Leading Silver Producer December 1, 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: Why Invest in Hecla?
WHY INVEST IN HECLA? Hecla is unique to other silver miners, ETFs and physical silver Primarily U.S. based operations – the right jurisdiction for risk and ESG Purchased carbon offset credits, anticipate being Net Zero in scope 1 and scope 2 Emissions in 2021 Highest-grade silver miner in the
Slide 5: Hecla is the Leader in Metal Produced per Tonne of GHG
HECLA IS THE LEADER IN METAL PRODUCED PER TONNE OF GHG Highest-grade silver mines generate more benefit with smaller footprint AgEq Oz/Tonne GHG AuEq Oz/Tonne GHG 500 6 450 5 400 350 4 300 250 3 200 2 150 100 1 50 0 0 Hecla Coeur Pan American First Majestic* Newmont* Hecla Coeur Pan American First M
Slide 6: Comparison to Peers – Reserves and Ore Grades
COMPARISON TO PEERS – RESERVES AND ORE GRADES Hecla has highest reserve grade and third largest reserve base Reserves & Reserve Grade AgEq Reserves (mmoz) AgEq Reserve Grade (g/t) 1,297 587 1,138 441 430 376 369 354 516 511 147 130 291 158 158 133 36 103 104 83 Fresnillo Pan American Hecla Coeur For
Slide 7: Hecla Mines >40% of All Silver Produced in the USA
HECLA MINES >40% OF ALL SILVER PRODUCED IN THE USA Half of the world’s production is from Mexico, Peru and China; U.S. production is scarce 2020 U.S. Silver Production Hecla’s Share of U.S. Production (Moz) 13.5 43% 57% Hecla Other 6.5 3 Countries. Produce ~50% of World Production U.S. Produces 4% 3
Slide 8: Strong Free Cash Flow Generation
STRONG FREE CASH FLOW GENERATION Positive free cash flow generation from all mines over last five quarters Greens Creek Casa Berardi Lucky Friday* Generated $290 million in Free Cash Flow since Q2/2020 Generated $73.6 million in Free Cash Flow since Q2/2020 Generated $26.5 million in Free Cash Flow
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: 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 11: Hecla is Increasing Silver Production
HECLA IS INCREASING SILVER PRODUCTION Lucky Friday 2020 production tripled over previous year, expected to be 75% more in 2021 and 5 million ounces by 2023, 2.5 times 2020 production 30 Vein - *AgEq Grade (opt) 20 Years Past Mining < 10 10 - 20 Almost 20 - 30 6500 Level 30 - 35 1000 feet > 35 @ +35
Slide 12: Underhand Closed Bench (UCB)
UNDERHAND CLOSED BENCH (UCB) Method uses the top cut to vertically drill the next two cuts and receives the blast swell Cross Section Longitudinal Section NYSE: HL This information is confidential; it is not to be relied on by any 3rd party without prior written consent. RESPONSIBLE. SAFE. INNOVATIV
Slide 13: Hecla's 2021 Exploration
HECLA’S 2021 EXPLORATION 20 drill rigs company wide focused on expanding and discovery of resources Nevada • Drilling the new discovery at Midas • Defining targets at Aurora • Development of Hatter Graben drift for exploration drilling continues Greens Creek • Expanding and upgrading resources in th
Slide 14: Leading Dividend Policy is Improved Further
LEADING DIVIDEND POLICY IS IMPROVED FURTHER More cash returned to shareholders as dividend yield increases synchronously with silver prices • Industry’s only silver linked dividend policy that pays an annual normal dividend ($0.015 per share) plus a silver price linked dividend that commences at $20
Slide 15: Reddit Silver Squeeze Demonstrated Brand Value
REDDIT SILVER SQUEEZE DEMONSTRATED BRAND VALUE Highest performer with a small short position and continued outperformance Share Price Performance on February 1st & Share Price Performance January 29th – November 4th Shares Short as a % of Total Float* 60% 30% 28% 25.0% 26% 40% 25% 23% 21.8% 20.0% 20
Slide 16: A Very Short History on Silver Demand
A VERY SHORT HISTORY ON SILVER DEMAND Despite declining photography demand, silver industrial and investment demand has been in a secular bull market since 2000 and is stronger in 2021 and the future Five distinct periods of silver demand, three that are strengthening • Monetary by governments (2000
Slide 17: Renewable Energy Gains Momentum – Solar Projected for Largest Growth
RENEWABLE ENERGY GAINS MOMENTUM – SOLAR PROJECTED FOR THE LARGEST GROWTH Global policies are favoring renewable energy • In the U.S., renewable energy projected to double from 21% in 2020 to 42% by 2050 • Solar energy generation as a percentage of renewable energy forecast to increase 3x by 2050 fro
Slide 18: Silver – Widening Gap Between Supply & Demand
SILVER – WIDENING GAP BETWEEN SUPPLY & DEMAND Gap expected to increase with continued trend of industrial demand growth of 2.0% • 2019 saw a total supply of 1,023 Moz and total demand of 1,074 Moz • Silver’s total demand in 2030 is expected to reach ~1,147 Moz if demand stays on the last decade tren
Slide 19: Why Invest in Hecla?
WHY INVEST IN HECLA? Hecla is unique silver miner We mine: The Right metals Silver is the right metal for a renewable energy future Produce 40% of silver mined in the US In the Right jurisdictions Mines located in the right geographical addresses with low risk For investment attractivene
Slide 20: Appendix
Appendix NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 20
Slide 21: 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 price margin is a non-GAAP measure and is calculated as realized market price of silver less A
Slide 22: 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 23: 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 24: Cash Cost and AISC Reconciliation to GAAP
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 25: 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 26: 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 27: Scotiabank Mining Conference
SCOTIABANK MINING CONFERENCE United States’ Leading Silver Producer December 1, 2021 RESPONSIBLE. SAFE. INNOVATIVE. NYSE: HL
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