Hecla Mining Company · NYSE:HL
Hecla Mining — Q3 2022 Earnings Presentation
29 slides from Hecla Mining's earnings presentation, Nov 9, 2022
Slide 1: Third Quarter 2022 Earnings Conference Call
THIRD QUARTER 2022 Earnings Conference Call November 9, 2022 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, 2021, which could be economically and legally extracted or produced at the time of the reserve determination. Estimates of pr
Slide 4: Fastest Growing Silver Miner
FASTEST GROWING SILVER MINER Expect 17-20 Moz silver production growth in USA and Canada by 2024 Strong Production Strong Financial Operational Growth in Best Position Quarter Jurisdictions • Record throughput • Production from • $145 million in cash at Greens Creek Keno Hill in 3Q 2023 • Investing
Slide 5: Operations Review
Operations Review NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 5
Slide 6: Greens Creek: Consistent Performance
GREENS CREEK: CONSISTENT PERFORMANCE Record throughput quarter, positioned for a strong 2022 • Strong silver production, lower lead and zinc production due Record mill throughput of 2,500 tons per to lower grades day in Q3 • Deferred silver concentrate shipment to Q4 for cost effective shipping, $18
Slide 7: Lucky Friday: On Track to Be 5 Moz/yr Producer
LUCKY FRIDAY: ON TRACK TO BE 5 Moz/YR PRODUCER Setting production and throughput records, capital investments for growth • Strong silver production, prioritizing projects for increasing Two consecutive quarters of > 1 throughput and future production to 5 Moz per year Moz silver production • Deferre
Slide 8: Casa Berardi: Stable Production, Cost Focus
CASA BERARDI: STABLE PRODUCTION, COST FOCUS Continued strong production, costs guidance affirmed • Mill continues solid performance, gold production in line New throughput record of 4,856 tons per day with Q2 in September • AISC increase driven by higher exploration and planned capital spend • Produ
Slide 9: Keno Hill: Consistent and Full Production by Year End 2023
KENO HILL: CONSISTENT AND FULL PRODUCTION BY YEAR END 2023 Larger deposit - Bermingham development on plan 2022 YTD and projected by Looking southeast End of year: Development plan: Production shapes: NE Zone Arctic Zone Initial Production Area Bear Zone Bermingham Deep ~100m NYSE: HL RESPONSIBLE. S
Slide 10: Keno Hill: Flame & Moth to Supplement Bermingham
KENO HILL: FLAME & MOTH TO SUPPLEMENT BERMINGHAM Development and drilling focused on the 2 million oz upper lightning zone 2022 YTD and projected Looking northwest by End of Year: Development plan: Production shapes: Christal Zone Initial Lightning Zone Production Areas ~100m NYSE: HL RESPONSIBLE. S
Slide 11: Financial Review
Financial Review NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 11
Slide 12: Balance Sheet Strength
BALANCE SHEET STRENGTH Investing free cash flow in operations, positioned for production growth • Revenues of $146.3 million, lower over prior quarter due to deferral of silver concentrates to Q4 • Cash flow from operations ($24.3) million due to working capital changes related to deferral of revenu
Slide 13: Cost Inflation, Tight Labor Market Continues
COST INFLATION, TIGHT LABOR MARKET CONTINUES By-product credits offset impact partially, but are price dependent • Year to date, key inputs like diesel, ground support, cyanide have increased more than 15% • Labor availability remains constrained with a shortage of skilled trades • Lower by-product
Slide 14: Guidance: 2022 Production Guidance Increased
GUIDANCE: 2022 PRODUCTION GUIDANCE INCREASED Cost guidance affirmed with strong margin generation at silver operations Changes in blue Consolidated Production Outlook Silver Production Gold Production Silver Equivalent (excludes Keno Hill)* Gold Equivalent (Koz)6 (Moz) (Koz) (Moz)6 2022 Total 13.6 –
Slide 15: Interesting Number
INTERESTING NUMBER “Too many people miss the silver lining because they’re expecting gold” – Maurice Setters 200 Million Ounces • India’s SILVER Imports: January – August 2022 NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 15
Slide 16: Appendix
Appendix NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 16
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: 2022 Guidance: Production and Costs by Operation
2022 GUIDANCE: PRODUCTION AND COSTS BY OPERATION Changes in blue 2022 Production Outlook Silver Production Gold Production Silver Equivalent Gold Equivalent (Koz)6 (Moz) (Koz) (Moz)6 Greens Creek* 9.3 – 9.6 40 – 48 21.8 – 22.4 282 – 290 Lucky Friday* 4.3 – 4.5 N/A 8.6 – 8.8 112 – 114 Casa Berardi N/
Slide 19: Adjusted EBITDA Reconciliation to GAAP
ADJUSTED EBITDA RECONCILIATION TO GAAP Reconciliation of Net Income (GAAP) to Adjusted EBITDA (non-GAAP) Dollars in thousands (USD) Trailing twelve months as of September 30 Net (loss) income $ (21,021) Plus: Interest expense 42,246 Plus/(Less): Income and mining tax provision (benefit) (29,287) Plu
Slide 20: 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 21: Free Cash Flow (Non-GAAP) Reconciliation
FREE CASH FLOW (NON-GAAP) RECONCILIATON Greens Creek, Lucky Friday, and Casa Berardi Reconciliation of Cash provided by operating activities (GAAP) to Free Cash Flow (non-GAAP) in thousands YTD 2022 Greens Creek Cash provided (used) by operating activities $ 105,852 Add: Exploration 4,870 Less: Addi
Slide 22: Cash Cost and AISC Reconciliation to GAAP
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, In tho
Slide 23: Cash Cost and AISC Reconciliation to GAAP
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 24: Cash Cost and AISC Reconciliation to GAAP
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 25: Cash Cost and AISC Reconciliation to GAAP
CASH COST AND AISC RECONCILIATION TO GAAP 2022 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
Slide 26: Proven & Probable Mineral Reserves
PROVEN & PROBABLE MINERAL RESERVES(1) (On December 31, 2021 unless otherwise noted) Investors are cautioned that Reserves and Resources are as of December 31, 2021, and are dynamic during the year due to mining depletion, changing metal prices, changing costs or project NYSE: HL economics, and new d
Slide 27: Measured and Indicated Mineral Resources
MEASURED AND INDICATED MINERAL RESOURCES (On December 31, 2021 unless otherwise noted) Measured Resources (8) Silver Gold Lead Zinc Copper Silver Gold Lead Zinc Copper Asset Location Ownership Tons (000) (oz/ton) (oz/ton) % % % (000 oz) (000 oz) (Tons) (Tons) Tons (11,12) Greens Creek United States
Slide 28: Inferred Mineral Resources
INFERRED MINERAL RESOURCES (On December 31, 2021 unless otherwise noted) Inferred Resources (10) Silver Gold Lead Zinc Copper Silver Gold Lead Zinc Copper Asset Location Ownership Tons (000) (oz/ton) (oz/ton) % % % (000 oz) (000 oz) (Tons) (Tons) Tons Greens Creek (11,12) United States 100.0% 2,152
Slide 29: Mineral Resources Footnotes
MINERAL RESOURCES FOOTNOTES NYSE: HL RESPONSIBLE. SAFE. INNOVATIVE. l 29