Hecla Mining Company · NYSE:HL
Hecla Mining — Jefferies 2013 Global Industrials Conference
43 slides from Hecla Mining's conference presentation, Aug 15, 2013
Slide 1: A New Hecla
NEW HECLA HECLA PROPERTIES ORGANIC GROWTH STRONG INVESTMENT FUNDAMENTALS A New Hecla Growing Our Production, Reserves and Cash Flow Jefferies 2013 Global Industrials Conference August 15, 2013
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
Slide 3: A New Hecla: Long-Life Mines with Growing Production
HECLA MINING COMPANY A New Hecla: Long-Life Mines with Growing Production Acquired Aurizon and the Casa Berardi Gold Mine in Q2 Issued $500 M in 6 7/8% 8-year Senior Notes Now have three high-quality silver and gold producing assets Long-life(10yrs+), low-cost mines Stable, low-risk mining
Slide 4: North American Focused Asset Portfolio
HECLA MINING COMPANY North American Focused Asset Portfolio All operations in lower-risk, mining-friendly jurisdictions 4
Slide 5: Strong, Disciplined Production Growth Anticipated
HECLA MINING COMPANY Strong, Disciplined Production Growth Anticipated Silver ounces (millions) (1) Gold ounces (thousands) 15 150 Guidance range 134% 170% 125 6.4 56 2012 1 2017E 2012 2014E 2 1. Hecla’s Lucky Friday mine was closed during 2012. 5 2. Expected Casa Berardi production only.
Slide 6: Reserve Growth 2003 - 2012
HECLA MINING COMPANY Reserve Growth1 2003 - 2012 Silver ounces (millions) Gold ounces (millions)(2) 3.8 150 233% 375% 45 0.8 2003 2012 2003 2012 1. See Proven and Probable reserves data in the Appendix. 6 2. Includes Aurizon’s reserves for 2012.
Slide 7: Diversified Revenue: Silver, Gold, Lead and Zinc
HECLA MINING COMPANY Diversified Revenue: Silver, Gold, Lead and Zinc Consolidated Revenue by Metal Third Quarter Estimated Diversified revenue stream (silver, gold, lead and zinc) from 17% 11% 36% 3 mines Recently base metals prices tend 36% to be less volatile than precious metals prices Gold
Slide 8: Strong Balance Sheet
HECLA MINING COMPANY Strong Balance Sheet Cash and Cash Equivalents (millions) $296 $233 $232 $191 $169 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 8
Slide 9: Q2 2013 - Continued Strong Margins
HECLA MINING COMPANY Q2 2013 - Continued Strong Margins $40 $35.30 $35 Strong Cash Margins $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 ($5) 2008 2009
Slide 10: Q2 Cash Flow Flexibility
HECLA MINING COMPANY Q2 Cash Flow Flexibility Cash Bridge Q2 2013 (US$mm) $350 $300 $177.0 $177.6 $296.4 Largely Discretionary $81.3M $250 1 $31.5 $200 $168.6 $150 $34.5 $20.3 $10.7 $3.2 $100 $12.6 $50 $- Q2/2013 Adjusted EBITDA Capex Aurizon Exploration + Pre- Purchase of Other Cash from Aurizon Q2
Slide 11: Significant 2013 Cost Reductions
HECLA MINING COMPANY Significant 2013 Cost Reductions 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 expe
Slide 12: Senior Notes Overview
HECLA MINING COMPANY Senior Notes Overview 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 $600 Ba3/BB IAMGOL
Slide 13: Strong Portfolio of Producing Assets
HECLA MINING COMPANY Strong Portfolio of Producing Assets 13
Slide 14: Lucky Friday - Ramping Up Production
HECLA MINING COMPANY Lucky Friday - Ramping Up Production 0.34 Moz production in H1/13 Expected cost reductions and production increases Average Total Cash Cost, Net of By- Product Credits, per Silver Ounce of $40.00 1.4 Production 1.30E Moz $33.75¹ in H1/13 Total Cash Cost, Net of By-product
Slide 15: Lucky Friday - Idaho
HECLA MINING COMPANY Lucky Friday - Idaho Silver Shaft 30 Vein #4 Shaft 4050 level 4900 level Current mining from 5900 level access 5900 level 6500 level 7500 level Looking NW 15
Slide 16: Greens Creek - Strong Performance
HECLA MINING COMPANY Greens Creek - Strong Performance Silver production of 2 million Q2 vs. Q1 Production and Cost Improvements 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 Up 48% from Q2
Slide 17: Greens Creek - Deep Southwest
HECLA MINING COMPANY Greens Creek - Deep Southwest Southwest Bench Lower Southwest Deep Southwest Location View Looking North 200 South Model 500 Feet View Looking North/Northwest 17
Slide 18: Casa Berardi - Long-Life Gold Asset
HECLA MINING COMPANY Casa Berardi - Long-Life Gold Asset Acquisition completed 6/1/13 Cost reductions expected with growing gold production One month production to Hecla of 6,740 ounces of gold at Total Cash $1,400 0.6 Total Cash Cost, Net of By-product Credits, per Cost, Net of By-Product Credi
Slide 19: Casa Berardi - Drilling
HECLA MINING COMPANY Casa Berardi - Drilling 19
Slide 20: Silver Reserves and Grades of the Largest Primary Silver Mines
Silver Reserves - Moz 0 20 40 60 80 100 120 San SanCristobal Cristobal(SMM)* (50%)* Pitarilla (SSRI)* San Bartolome (CDE)* Greens Creek (HL) Pirquitas (SSRI)* Ying (SVM) Huaron (PAA) Lucky Friday (HL) Palmarejo (CDE)* Rochester (CDE)* 20 Source: Public filings, *Open pit mines - Palmarejo is both op
Slide 21: 2013 Guidance
HECLA MINING COMPANY 2013 Guidance 21
Slide 22: 2013 Guidance
HECLA MINING COMPANY 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, per Gold O
Slide 23: Precious Metals Fundamentals Remain Strong
HECLA MINING COMPANY Precious Metals Fundamentals Remain Strong 23
Slide 24: Silver - The Metal of This Age
HECLA MINING COMPANY Silver - The Metal of This Age Has the highest electrical conductivity of all the metals 80% more conductive than aluminum 50% more conductive than gold, 6% more conductive than copper Critically important in the miniaturization of circuits as electronic items become inc
Slide 25: Silver Consumption per Capita
HECLA MINING COMPANY Silver Consumption per Capita Increasing Silver Consumption Per Person in China and India 0.80 0.80 Japan 0.70 0.70 South Korea 0.60 0.60 Silver Ounce Per Capita Silver Ounce Per Capita 0.50 0.50 United Japan 0.40 0.40 States Germany 0.30 0.30 United 0.20 States 0.20 Germany Sou
Slide 26: Strong Investment Fundamentals
HECLA MINING COMPANY Strong Investment Fundamentals Portfolio of Three High Quality, Operating in Long-Life Low Political Free Cash Flow Operations Risk Jurisdictions Strong Cash Flow Generation Low Risk, Stable Operations 1 7 2 High Secure Multiple Cash Revenue Margins 6 Strong Investment 3 Streams
Slide 27: Appendix
NEW HECLA HECLA PROPERTIES ORGANIC GROWTH STRONG INVESTMENT FUNDAMENTALS Appendix
Slide 28: 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
Slide 29: Reserves & Resources Update
HECLA MINING COMPANY Reserves & Resources Update (on Dec. 31, 2012 unless otherwise noted) Proven Reserves Tons Silver Gold Lead Zinc Silver Gold Lead Zinc Asset Location Ownership (000) (oz/ton) (oz/ton) % % (000 oz) (000 oz) Tons Tons Greens Creek (a) United States 100.0% 12 9.3 0.10 2.7 7.8 112 1
Slide 30: Reserves & Resources Update
HECLA MINING COMPANY Reserves & Resources Update (on Dec. 31, 2012 unless otherwise noted) Measured Resources Tons Silver Gold Lead Zinc Silver Gold Lead Zinc Asset Location Ownership (000) (oz/ton) (oz/ton) % % (000 oz) (000 oz) (Tons) (Tons) Greens Creek (2)(a) United States 100.0% -- -- -- -- --
Slide 31: Reserves & Resources Update
HECLA MINING COMPANY Reserves & Resources Update (on Dec. 31, 2012 unless otherwise noted) Inferred Resources Tons Silver Gold Lead Zinc Silver Gold Lead Zinc Asset Location Ownership (000) (oz/ton) (oz/ton) % % (000 oz) (000 oz) (Tons) (Tons) Greens Creek (9)(a) United States 100.0% 3,785 11.4 0.10
Slide 32: Total Cash Cost GAAP Reconciliation
HECLA MINING COMPANY 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) Q2/2013 Q1/2013 2
Slide 33: Total Cash Cost GAAP Reconciliation
HECLA MINING COMPANY 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 Months Ende
Slide 34: Total Cash Cost GAAP Reconciliation
HECLA MINING COMPANY 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-product credi
Slide 35: Adjusted Earnings Reconciliation
HECLA MINING COMPANY 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 shareholders
Slide 36: Hecla Adjusted EBITDA Reconciliation
HECLA MINING COMPANY 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): Income taxes (6,
Slide 37: Silver Space
HECLA MINING COMPANY Silver Space 37 Source: MEG, BMO Capital Markets (06/17/13)
Slide 38: Silver Space
HECLA MINING COMPANY Silver Space 38 Source: Company Filings, BMO Capital Markets (06/17/13)
Slide 39: Silver Space
HECLA MINING COMPANY Silver Space 39 Source: Company Filings, BMO Capital Markets (06/17/13)
Slide 40: Exploration and Pre-Development
HECLA MINING COMPANY Exploration and Pre-Development 40
Slide 41: San Sebastian (Mexico) - Middle Vein
HECLA MINING COMPANY San Sebastian (Mexico) - Middle Vein Pre-2011 October 2012 July 2013 41
Slide 42: Organic Growth - San Juan Silver (Colorado)
HECLA MINING COMPANY 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 Mile Bul
Slide 43: New Quebec Gold Assets
HECLA MINING COMPANY 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 with future
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