Hecla Mining Company · NYSE:HL
Hecla Mining — Merger or Acquisition (March 2013)
25 slides from Hecla Mining's merger presentation, Mar 4, 2013
Slide 1: Building a Leading Diversified Precious Metals Company: Hecla's Agreement to Acquire Aurizon Mines
D E AL H I G H L I GH TS AU R I Z O N O V E R V IEW I N V E S TME NT R ATI O N AL E NEXT STEPS Building a Leading Diversified Precious Metals Company: Hecla’s Agreement to Acquire Aurizon Mines March 4, 2013
Slide 2: Cautionary Statements
HECLA MINING COMPANY Cautionary Statements Cautionary Statements Statements made which are not historical facts, such as anticipated payments, litigation outcome, production, sales of assets, exploration results and plans, prospects and opportunities including reserves, resources, and mineralization
Slide 3: Cautionary Statements
HECLA MINING COMPANY Cautionary Statements Additional Information and Where to Find It This material relates to Hecla’s proposed acquisition (the “Transaction”) of Aurizon. Shares of Hecla’s common stock (the “Hecla Shares”) issued in connection with the proposed Transaction may be registered pursua
Slide 4: Creation of a Leading Precious Metal Company
HECLA MINING COMPANY Creation of a Leading Precious Metal Company 3 silver and gold mines with expansion potential Growth Long-life, low cost operations 1 Growing portfolio of pre-development and exploration projects Complementary operating culture of underground mining Significant reserve
Slide 5: Transaction Overview
HECLA MINING COMPANY Transaction Overview C$4.75 per share based on the closing price of Hecla’s shares on March 1, 2013 Represents a 12% premium to the implied value of Aurizon shares under the Alamos Gold offer1 as of March 1, 2013 9% premium based on Aurizon’s closing share price on the TSX
Slide 6: Benefits of the Transaction
HECLA MINING COMPANY Benefits of the Transaction Hecla Shareholders Aurizon Shareholders Addition of a third producing high-grade Represents a Superior offer to the asset in the Americas unsolicited Alamos bid Increases exposure to gold and diversifies Greater value certainty with significan
Slide 7: Creation of a Low-Cost Precious Metal Producer
HECLA MINING COMPANY Creation of a Low-Cost Precious Metal Producer Pro-Forma Total Enterprise Value1,2,3 C$588 M US$1,196 M C$1,833 M 2012 Silver Production (Moz) n/a 6.4 6.4 2012 Gold Production (Koz) 136.8 55.5 192.3 2012 Silver Cash Costs/oz4 n/a US$2.705 US$2.70 2012 Gold Cash Costs/oz6 US$7015
Slide 8: North American Focused Asset Portfolio
HECLA MINING COMPANY North American Focused Asset Portfolio The combined company will have assets in 3 of the top 6 mining-friendly jurisdictions 2012 Rankings of Countries for Mining Investment Rank Country 1 Australia 57 2 Canada 52 3 Chile 51 Casa Berardi 4 Brazil 45 Quebec 5 Mexico 43 Greens Cre
Slide 9: Overview of Aurizon Mines
HECLA MINING COMPANY Overview of Aurizon Mines Gold producer in western Quebec Casa Berardi – producing gold since 2006 1.461 Moz Proven + Probable Reserves Produced 136,848 oz gold in 2012 Growth potential with future open pit development and shaft deepening at Casa Berardi Significant
Slide 10: Casa Berardi - Operational Overview
HECLA MINING COMPANY Casa Berardi - Operational Overview Produced 688,000 oz gold at 7.1 g/t from 1988 to 1997 Gold production of 937,100 oz at 7.8 g/t gold since the re-start of operations in 2006 Potential to increase processing capacity to 2,400 tpd High conversion (~65%) of resources to
Slide 11: Investment Rationale
HECLA MINING COMPANY Investment Rationale Adds immediate projected gold production of 125,000 to 130,000 ounces in 2013E1 Growth Secondary gold project has reserves of 1.7 Moz of gold Anticipated to be accretive to NAV and cash flow Accretive Anticipated to be accretive to gold reserves and
Slide 12: Enhanced Growth Potential and Precious Metal Exposure
HECLA MINING COMPANY Enhanced Growth Potential and Precious Metal Exposure Hecla Production Aurizon Production Shaft deepening & 15.0 open pit development 136,848 Silver - Moz Gold Oz 6.4 2012 2017E 2012 Potential growth opportunities ~2014+ 12
Slide 13: Combined Company Asset Overview
HECLA MINING COMPANY Combined Company Asset Overview Casa Berardi Greens Creek Lucky Friday Quebec Alaska Idaho 2013E Mine Production Silver Moz n/a ~6.5 ~2 Gold Koz ~125 ~50 0 Silver Equivalent1 ~6.3 ~9 ~2 Gold Equivalent1 ~125 ~180 ~40 2013E Cash Costs Silver Cash Costs/oz2 n/a US$3.25 US$11.00 Mi
Slide 14: Creating a Leading Precious Metals Company
HECLA MINING COMPANY Creating a Leading Precious Metals Company Hecla Aurizon Pro-forma Lucky Greens Casa Casa Greens Friday Creek Berardi Berardi Creek 40% 60% 100% 27% 44% + = Lucky Friday 29% ~ Operating NAV = $1.6 bn ~ Operating NAV = $0.6 bn ~ Operating NAV = $2.2 bn 2013E Hecla Revenues 2013E
Slide 15: Significant Silver & Gold Production
HECLA MINING COMPANY Significant Silver & Gold Production 2012 Gold Production – Peer Group 226,491 192,344 164,340 136,848 112,300 55,496 38,687 20,699 Coeur d'Alene Hecla Hochschild Aurizon Pan American Hecla Endeavour Fortuna Pro-forma 15
Slide 16: Significant Silver & Gold Production
HECLA MINING COMPANY Significant Silver & Gold Production 2012 Silver Equivalent Production1 – Peer Group Silver Equivalent - Moz 19.0 3.02 30.7 29.3 27.7 12.2 3.02 16.0 9.2 8.6 8.5 6.8 6.4 5.0 Pan Coeur Hochschild Hecla Hecla Silver First Aurizon Endeavour Fortuna American d'Alene Pro-forma Standar
Slide 17: Creation of a Leading Precious Metal Company
HECLA MINING COMPANY Creation of a Leading Precious Metal Company Combined company will have an enterprise value of approximately C$1.8 bn 3 low cost, long-life gold and silver mines Projects in mining friendly jurisdictions 150 million ounces of proven and probable silver reserves and 2.21
Slide 18: Appendix
D E AL H I G H L I GH TS AU R I Z O N O V E R V IEW I N V E S TME NT R ATI O N AL E NEXT STEPS Appendix
Slide 19: Enhanced Growth Potential
HECLA MINING COMPANY Enhanced Growth Potential Hecla Production Pro-forma Silver Equivalent Production1 +Shaft sinking +Joanna 15.0 +Exploration ~6.4 Silver Eq. Moz Silver Moz 6.4 6.8 ~8.5 6.4 6.4 2012 2017E Hecla 2012 2012 Potential growth opportunities ~2014+ 19 1. “Silver Equivalent” includes gol
Slide 20: Attractive Financing
HECLA MINING COMPANY Attractive Financing The Transaction will be fully financed and will not require the approval of Hecla shareholders Hecla has received a commitment from The Bank of Nova Scotia for a US$500 million financing Financing includes: A US$200 million amortizing term loan facil
Slide 21: North American Focus
HECLA MINING COMPANY North American Focus Two long-lived silver mines 150 million ounces of high-grade silver reserves Largest U.S. silver producer 2nd largest zinc 3rd largest lead Lucky Friday mine has resumed production – Expected 2 million ounces of silver production in 2013 Total
Slide 22: Greens Creek (Alaska) - 6.4 million ounces in 2012
HECLA MINING COMPANY Greens Creek (Alaska) - 6.4 million ounces in 2012 One of the largest and lowest cost primary silver mines in the world Expected full-year 2013 production of over 6 million silver ounces Large and under-explored 27- square-mile land position – further reserve development i
Slide 23: Re-Opened and Renewed Lucky Friday (Idaho)
HECLA MINING COMPANY Re-Opened and Renewed Lucky Friday (Idaho) Operations and production resumed in Q1/13 $29.8 million rehabilitation of 6100 foot Silver Shaft – MSHA clearance to resume production in portions of the mine $26.2 million in other capital projects invested during 2012 Expecte
Slide 24: Hecla - Cash Cost Reconciliation
HECLA MINING COMPANY Hecla - Cash Cost Reconciliation Reconciliation of Cash Costs per Ounce to Generally Accepted Accounting Principles (GAAP) (dollars and ounces in thousands, except per ounce - unaudited) 2012 1 Total cash costs $ 17,262 Divided by silver ounces produced 6,394 Total cash cost per
Slide 25: Aurizon - Cash Cost Reconciliation
HECLA MINING COMPANY Aurizon - Cash Cost Reconciliation Reconciliation of Cash Costs per Ounce to Generally Accepted Accounting Principles (GAAP) (dollars and ounces in thousands, except per ounce - unaudited) 9 Months 2012 2011 2010 Total cash costs, US$ $ 70,667 $ 88,739 $ 75,713 Divided by gold o
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