Hecla Mining Company · NYSE:HL
Hecla Mining — Q4 2012 Earnings Presentation
33 slides from Hecla Mining's earnings presentation, Feb 25, 2013
Slide 1: Fourth Quarter & Year-End 2012 Earnings Conference Call
FOURTH QUARTER & FINANCIAL REVIEW OPERATIONS REVIEW EXPLORATION & YEAR END 2012 OVERVIEW PRE-DEVELOPMENT UPDATE Fourth Quarter & Year-End 2012 Earnings Conference Call February 25, 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: Lucky Friday Resumes Production
HECLA MINING COMPANY Lucky Friday Resumes Production 6100 foot Silver Shaft rehabilitation complete First concentrates produced in February Production expected to ramp up through 1st half of 2013 Full workforce recalled for full production, extensive training Ground support upgraded for ov
Slide 4: Q4 and 2012 Highlights
HECLA MINING COMPANY Q4 and 2012 Highlights Full-year silver production 6.4 million ounces Average cash cost of $2.70 per ounce of silver Q4 silver production of 2.1 million ounces, up 31% from Q3 and up 50% from Q2 as Greens Creek continued to ramp up production Operating cash flow of $69 m
Slide 5: Q4/2012 Financial Review
HECLA MINING COMPANY Q4/2012 Financial Review 5 Q4 2012 Conference Call
Slide 6: 58% Growth in Silver Production from Q1/12
HECLA MINING COMPANY 58% Growth in Silver Production from Q1/12 Greens Creek Silver Production 2.1 1.6 1.4 1.3 Million oz. Q1/2012 Q2/2012 Q3/2012 Q4/2012 6 Q4 2012 Conference Call
Slide 7: Low Cash Costs - 2012 Margin of $29.41 Per Ounce
HECLA MINING COMPANY Low Cash Costs - 2012 Margin of $29.41 Per Ounce $40 $36.59 $35.30 $35.00 $35 Strong Cash Margins $32.11 $29.20 $30 $27.05 $34.35 97% $25 $22.70 $34.15 94% 90% 92% 96% 88% $20 106% $31.48 $/oz $15.63 $29.41 $14.40 $24.16 $25.75 $15 $26.02 88% $10 71% $13.72 $10.20 $5 $4.20 $2.24
Slide 8: 2012 - Cash Flow
HECLA MINING COMPANY 2012 - Cash Flow Cash Provided by Operating Activities (millions) $237.91 $197.8 $168.0 $119.2 $94.02 $65.0 $25.0 $69.0 $14.8 $69.9 2007 2008 2009 2010 2011 2012 Actual Pro-forma 1. Operating cash flow for 2011 was $69.9 million after environmental litigation settlement payment
Slide 9: Q4/2012 Financial Highlights
HECLA MINING COMPANY Q4/2012 Financial Highlights Fourth Quarter Twelve Months Ended Ended December 31, December 31, HIGHLIGHTS 2012 2012 FINANCIAL DATA (000s) Sales $ 81,100 $ 321,143 Gross profit $ 34,037 $ 143,516 Income applicable to common shareholders $ 605 $ 14,402 Basic income per common sha
Slide 10: $0.12 Per Share Adjusted Earnings in 2012
HECLA MINING COMPANY $0.12 Per Share Adjusted Earnings in 2012 $10.5 million of non-cash mark to market valuation adjustment (base metals hedging) $25.3 million in suspension-related activities expensed at Lucky Friday, including $6.3 million in DDA Record exploration and pre-development expen
Slide 11: 2012 - Realized Metals Prices
HECLA MINING COMPANY 2012 - Realized Metals Prices Silver Gold ($/oz) ($/oz) $35.30 $1,592 $1,687 $32.11 -9% 6% 2011 2012 2011 2012 Zinc Lead ($/lb) ($/lb) $1.00 $1.05 $0.90 $0.96 -10% -9% 2011 2012 2011 2012 11 Q4 2012 Conference Call
Slide 12: Strong Balance Sheet
HECLA MINING COMPANY Strong Balance Sheet Cash and Cash Equivalents (millions) $279 $266 $233 $232 $191 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 12 Q4 2012 Conference Call
Slide 13: Operations Review
HECLA MINING COMPANY Operations Review 13 Q4 2012 Conference Call
Slide 14: Lucky Friday (Idaho) Resumes Production
HECLA MINING COMPANY Lucky Friday (Idaho) Resumes Production Silver production expected to ramp up to over 2 million ounces for full-year 2013 Expected 2013 full year cash costs of $11 per ounce of silver All employees needed to reach full production have been recalled – extensive safety train
Slide 15: Strong 2012 Performance at Greens Creek (Alaska)
HECLA MINING COMPANY Strong 2012 Performance at Greens Creek (Alaska) 6.4 million ounces of silver production in 2012 - operating cash cost of $2.70 per ounce Q4 production of 2.1 million ounces at average cash cost of $3.45 per ounce 2nd half 2012 production up 37% over 1st half Over 6 mill
Slide 16: Exploration and Pre-Development Update
HECLA MINING COMPANY Exploration and Pre-Development Update 16 Q4 2012 Conference Call
Slide 17: Silver Reserve and Resource Growth 2003 - 2012
HECLA MINING COMPANY Silver Reserve and Resource Growth 2003 - 2012 Proven & Probable Reserves +230% Mineralized Material +274% 172 Other Resources +179% 150 127 62 45 34 Silver Ounces (millions) 2003 2012 Other Resources Mineralized Material Proven & Probable Reserves 17
Slide 18: Reserve and Resource Growth - Middle Vein
HECLA MINING COMPANY Reserve and Resource Growth - Middle Vein Longitudinal of Middle Vein Middle Vein at San Sebastian defined over 3,000 feet along strike, from surface to over 1,000 feet in depth New other resources of 8.8 million silver ounces and 45,000 ounces gold appears open along strike
Slide 19: Delivering Growth - San Sebastian (Mexico)
HECLA MINING COMPANY Delivering Growth - San Sebastian (Mexico) Plan View of San Sebastian Pre-development Area Middle Vein Hugh Zone 1 Km Andrea Vein 19 Q4 2012 Conference Call
Slide 20: Delivering Growth - San Juan Silver (Colorado)
HECLA MINING COMPANY Delivering Growth - San Juan Silver (Colorado) Advance of the Bulldog Decline Shotcrete Application Bulldog underground infrastructure now advanced over 800 feet Completion expected in 4th Quarter 20 Q4 2012 Conference Call
Slide 21: Sustained 2013 Exploration/Pre-Development Program
HECLA MINING COMPANY Sustained 2013 Exploration/Pre-Development Program $51.5 million of exploration and pre-development budget $27.1 million exploration $24.4 million pre-development Greens Creek (Alaska) ~$6.6 million exploration Silver Valley (Idaho) ~$6.3 million exploration San
Slide 22: 2013 Guidance
HECLA MINING COMPANY 2013 Guidance 22 Q4 2012 Conference Call
Slide 23: 25% Silver Production Growth Expected in 2013
HECLA MINING COMPANY 25% Silver Production Growth Expected in 2013 Expected 2013 full-year silver production of 8-9 million ounces 25% increase over 2012 levels Lucky Friday expected to ramp up to 2 million ounces for 2013 Expected consolidated 2013 cash costs of approximately $5.00 per ounc
Slide 24: Investments and Acquisitions
HECLA MINING COMPANY Investments and Acquisitions Dolly Varden Silver Corporation Canamex Resource Corporation Brixton Metals Corporation Total Investment - $8.3 million 24 Q4 2012 Conference Call
Slide 25: Appendix
FOURTH QUARTER & FINANCIAL REVIEW OPERATIONS REVIEW EXPLORATION & YEAR END 2012 OVERVIEW PRE-DEVELOPMENT UPDATE Appendix
Slide 26: 2012 Reserve/Resource Highlights
HECLA MINING COMPANY 2012 Reserve/Resource Highlights Highlights of 2012 Reserve/Resources report: For the seventh consecutive year silver reserves and resources increased to 150 million ounces (reserves), 127 million ounces (mineralized material) and 172 million ounces (other resources), respecti
Slide 27: 2012 Exploration Program Highlights
HECLA MINING COMPANY 2012 Exploration Program Highlights Highlights of 2012 exploration program consist of: At Greens Creek, the 200 South zone contains a resource of 24 million ounces of silver and 247,000 ounces of gold. Over the next two years, in-fill drilling is anticipated to convert many of
Slide 28: 2013 - Exploration Programs
HECLA MINING COMPANY 2013 - Exploration Programs Highlights of 2013 exploration programs consist of: At Greens Creek, underground drilling expects to convert resources to reserves and define extensions to the 200 South, Southwest Bench and NNW. Surface drilling at Killer Creek may define a new min
Slide 29: 2013 - Pre-Development Programs
HECLA MINING COMPANY 2013 - Pre-Development Programs Pre-development programs consist of: San Sebastian: Further scoping studies are in progress to determine the production viability, rate and sequencing of mining the three areas and are expected to be completed in the third quarter. A ramp is b
Slide 30: Reserves & Resources Update (on Dec. 31, 2012)
HECLA MINING COMPANY Reserves & Resources Update (on Dec. 31, 2012) Silver Gold Lead Zinc Silver Gold Lead Zinc Mine Tons (Oz/ton) (Oz/ton) (%) (%) (Ounces) (Ounces) (Tons) (Tons) Proven and Probable Reserves Proven Ore Reserves Lucky Friday, USA 2,206,600 12.1 — 7.4 2.7 26,778,900 — 163,350 58,560
Slide 31: 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) (dollars and ounces in thousands, except per ounce - unaudited) 2012 Q4/2012 Q3/12 Q2/12 Q1/12 2011 2010 2009 2008 (1) Total cash costs $ 17,262 $ 7,175
Slide 32: Total Cash Cost GAAP Reconciliation
HECLA MINING COMPANY Total Cash Cost GAAP Reconciliation Q4/12 Q4/11 2012 2011 1 Total cash costs $ 7,175 $ 5,677 $ 17,262 $ 10,934 Divided by silver ounces produced 2,081 2,490 6,394 9,483 Total cash cost per ounce produced $ 3.45 $ 2.28 $ 2.70 $ 1.15 Reconciliation to GAAP Total cash costs $ 7,175
Slide 33: Adjusted Earnings GAAP Reconciliation
HECLA MINING COMPANY Adjusted Earnings GAAP Reconciliation Reconciliation of Net Income Applicable to Common Shareholders (GAAP) to Earnings After Adjustments(1) (dollars and ounces in thousands, except per share amounts - unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2