$25 Million reduction in Company-wide capital,
exploration and G&A expected for 2019
Hecla Mining Company (NYSE:HL) today announced that it is taking
action to reduce spending, consistent with its goal of operating on
a cash neutral basis, following the heavy investment made in Nevada
in the First and Second Quarters.
Highlights
- Significantly reduced planned
development investment in Nevada while production continues.
- Expectations for Company-wide capital
reduced by $12 million, exploration reduced by $9 million,
G&A and other costs reduced by $4 million for a $25 million
planned reduction in spending in 2019.
- Nevada production and cost estimates
revised for 2019.
“Hecla has a strong commitment to operate within cash flow as
demonstrated by the positive free cash flow over the past 3 years
and longer,” said Phillips S. Baker, Jr., President and CEO.
“However, the Nevada operations have not generated the cash flow we
had hoped for so we are curtailing most development and reducing
the workforce with the goal of the operation generating positive
cash flow in the second half of the year. We still see lots of
opportunities to improve costs, manage water, improve recoveries
and explore but only plan to do it within cash flow.”
Mr. Baker continued, “We expect that with the company-wide
reduction in spending Hecla will generate sufficient cash flow to
nearly eliminate the need to borrow under the revolver by year end.
If borrowing is required, we expect to be in compliance with the
covenants.”
Nevada
A review has been conducted of the Nevada operations and changes
are being made with the goal of turning it into a positive cash
flowing unit.
The new approach is to mine the currently developed ore at Fire
Creek. Mining at Midas is expected to continue through the end of
the year, but Hollister will be shut down. As a result, 25% of the
Nevada workforce is being laid off. Some surface exploration
drilling and hydrology studies are still planned to gather
information on the deposits to help make future development
programs more successful.
Third-party ore processing arrangements are also being pursued
to try and reduce the transportation and milling costs. This could
include mills that can process ore that is considered refractory.
With water discharge from Fire Creek more than double of a year
ago, work is underway to increase discharge permits and change how
the water is treated.
The Company is still committed to the exploration and definition
of Hatter Graben, which is one of the key reasons the Nevada
operations were acquired. However, the level of development
activity is being curtailed to reduce the cash consumption, and the
focus instead is expected to be on surface drilling with the goal
of gaining more information on potential expansions of the deposit
and to help plan the most efficient route to get to the deposit,
once development is restarted.
The Company is providing revised annual 2019 Nevada production
estimates of 60,000 ounces at a cost of sales of $105 million, a
cash cost, after by-product credits of $1,200 per gold ounce and an
all-in sustaining cost, after by-product credits, of $1,700 per
gold ounce.
Revolving Line of Credit
The Company has reviewed its financial projections with its
banking syndicate on the revolving line of credit and believes that
there is and should continue to be at current projections, ample
access to liquidity while the Company continues to evaluate the
best options for refinancing its May 2021 bonds.
The Company continues to view the revolving line of credit as a
short-term liquidity facility rather than a long-term source of
funding and expects the amount drawn on the facility to be
relatively steady at the end of the second and third quarters, and
then to be reduced by year end, potentially being fully repaid at
that time. The Company is working towards a goal of having a
debt/EBITDA ratio of around 3.75 by year end and around 3.0 by the
end of 2020.
Setting A Short-term Floor for Silver and Gold Prices
The Company has bought put contracts on 2.9 million ounces of
silver and 93,000 ounces of gold which set a floor to the prices
for each, locking in $14.73 per silver ounce and $1,318 per gold
ounce for the next four months. Buying a put sets a floor on the
price the Company could expect to receive but still maintains all
of the upside, other than the transaction costs. More protection
may be put in place for the rest of the year and part of next year.
This move gives the Company confidence in the prices it will
receive and reduces the risk of exceeding its revolver line of
credit covenants.
2019 Production Outlook
Silver Production(Moz)
Gold Production(Koz)
Silver Equivalent(Moz)
Gold Equivalent(Koz)
Original
(if revised)
Current Original
(if revised)
Current Original
(if revised)
Current Original
(if revised)
Current Greens Creek 7.7
7.7 50 50
24.0 24.0 305 305
Lucky Friday 0.2 0.2
N/A N/A 0.2 0.2
N/A N/A
San Sebastian
2.0 2.0 14 14
3.0 3.0 40
40
Casa Berardi N/A N/A
150 150 11.7 11.7
150 150
Nevada Operations
0.1 0.2 76 60
6.1 4.9 77
63
Total8 10.0 10.1
290 274 45.0
43.8 572 558
2019 Cost Outlook
Costs of Sales (million)
Cash cost, after by-product
credits, per silver/gold ounce2,4
AISC, after by-product credits,
perproduced silver/gold ounce3
Original
(if revised)
Current Original
(if revised)
Current
Original
(if revised)
Current Greens Creek $202
$202 $0 $0
$5.50 $5.50
Lucky Friday N/A
N/A N/A N/A
N/A N/A
San Sebastian $41
$41 $9.00 $9.00
$12.00 $12.00
Total Silver $243
$243 $1.10 $1.10
$11.00 $11.00
Casa Berardi
$210 $210 $850
$850 $1,150 $1,150
Nevada
Operations $90 $105
$900
$1,200 $1,325 $1,700
Total Gold8 $300 $315
$875 $950 $1,250
$1,325
2019 Capital and Exploration Outlook
Original
(if revised)
Current
2019E Capital expenditures (excluding capitalized interest)
$150 million $138 million
2019E
Exploration expenditures (includes Corporate Development)
$25 million $16 million
2019E
Pre-development expenditures $2.5 million
$2.5 million
2019E Research and Development
expenditures $3.5 million $1
million
CONFERENCE CALL AND WEBCAST
A conference call and webcast will be held today, June 6, at
12:30 p.m. Eastern Time to discuss the information included in this
news release. You may join the conference call by dialing toll-free
1-855-760-8158 or for international by dialing 1-720-634-2922. The
participant passcode is HECLA. Hecla's live and archived webcast
can be accessed at www.hecla-mining.com under Investors or via
Thomson StreetEvents Network.
ABOUT HECLA
Founded in 1891, Hecla Mining Company (NYSE:HL) is a leading
low-cost U.S. silver producer with operating mines in Alaska, Idaho
and Mexico, and is a growing gold producer with an operating mines
in Quebec and Nevada. The Company also has exploration and
pre-development properties in eight world-class silver and gold
mining districts in the U.S., Canada, and Mexico.
Cautionary Statements Regarding Forward Looking
Statements
This release contains and the telephone conference call
referenced herein will contain “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 to be covered by the safe harbor
created by such sections and other applicable laws, including
Canadian securities laws. Where a forward-looking statement
expresses or implies an expectation or belief as to future events
or results, such expectation or belief is expressed in good faith
and believed to have a reasonable basis. However, such statements
are subject to risks, uncertainties and other factors, which could
cause actual results to differ materially from future results
expressed, projected or implied by the forward-looking statements.
Forward-looking statements often address our expected future
business and financial performance and financial condition; and
often contain words such as “anticipate,” “intend,” “plan,” “will,”
“could,” “would,” “estimate,” “should,” “expect,” “believe,”
“target,” “indicative,” “preliminary,” “potential” and similar
expressions. Forward-looking statements in this news release may
include, without limitation: (i) achieving the goal of operating on
a cash neutral basis; (ii) 2019 company-wide capital, exploration,
general and administrative (G&A) and other costs planned to be
reduced by $25 million over the remainder of the year in an effort
to improve cash flow; (iii) the goal of the Nevada operations
generating positive cashflow in the second half of 2019; (iv)
improving costs and recoveries at the Nevada operations; (v)
company-wide reduction in spending expected to generate sufficient
cash flow to nearly eliminate the need to borrow under the
revolving credit facility (“Revolver”) by year end; (vi) any
borrowings under the Revolver in 2019 are expected to be in
compliance with Revolver covenants; (vii) continuing access to the
Revolver; (viii) surface exploration drilling and hydrology studies
at Fire Creek are still planned to gather information on the
deposits to help future development programs be more successful;
(ix) mining at Midas is also expected through 2019; (x) the ability
to negotiate and enter into third-party ore processing/milling
agreements; (xi) the ability to manage water issues at Fire Creek
through obtaining increased permitted discharges and to change how
water is treated; (xii) that surface drilling at Hatter Grabben
will provide more information on potential expansions of the
deposit and to help plan the most efficient development route to
get to the deposit; (xiii) revised annual 2019 Nevada production
estimates of 60,000 ounces at a cost of sales of $105 million, a
cash cost, after by-product credits of $1,200 per gold ounce and an
all-in sustaining cost, after by-product credits, of $1,700 per
gold ounce; (xiv) the ability to refinance the Company’s bonds due
in May 2021; (xv) expectation of the amount drawn on the Revolver
to be relatively steady at the end of the second and third
quarters, and then to be reduced by year end, potentially being
fully repaid at that time; (xvi) the Company is working towards a
goal of having a debt/EBITDA ratio of around 3.75 by year end and
around 3.0 by the end of 2020; (xvii) that the put contracts
entered into will (a) establish firm prices the Company will
receive for its gold and silver production that is the subject of
the contracts and (b) lessen the risk of the Company breaching
certain financial covenants under the Revolver; (xviii) 2019
production outlook at our individual mines and the Company as a
whole; (xix) 2019 cost outlook for the individual units and the
Company as a whole; and (xx) 2019 capital and exploration outlook
at the individual units and the Company as a whole. Forward-looking
statements in the telephone conference call related to this release
may include, without limitation: (1) we expect our assets to
operate on a cash positive basis; (2) cash consumption is expected
to be significantly lower and our future activities have a higher
chance of success; (3) the limited development we plan at Fire
Creek, we expect to mine all of the developed ore available for
near-term production, primarily off of spiral 2 by early 2020; (4)
of the expected production of 60,000 ounces of gold for the year in
Nevada, 12,000 are expected in Q2 and 38,000 in the second half of
the year; (5) We anticipate costs in Q2 will be about the same as
Q1, but should improve in the second half of the year; (6) Over the
second half we believe we will generate about $7 million of free
cash flow in Nevada at current prices using this strategy; (7) We
think the Nevada assets can be profitable over the long-term; (8)
There is a lot of resources and mineralization and it is relatively
high grade but the current cost per ton and development costs are
too high. So we are going to be focused on the goals we started
with, which was to improve the processes, lower the cutoff grade to
move known resources into reserves, to improve the rate of
development so we can have enough working faces and identify the
ore so we can process it with better recoveries. We are approaching
it on a slower pace so we have better control over the spend; (9)
When we get to the end of mining primarily off spiral 2 in 2020 as
we expect, we will see where we go from there. If the things we are
working on come together then we would then mine off spirals 4 and
3. We will also look at how we can do enough development to drill
the highest priority targets like Hatter Grabben; (10) While we
will assess whether we have a triggering event to determine
impairment at the end of the second quarter, I don’t currently
anticipate that the potential impairment would be large; (11) We
think we can improve the operations and results of Fire Creek; (12)
First, our expectation was that Nevada would be about 18% of our
2019 revenues. We now think it will be 14%; (13) We expect
exploration spending in Nevada for 2019 to be $3 million split
almost equally between Fire Creek and Hatter Grabben; (14) The
capital expenditure reductions are primarily in Nevada but we
expect there will also be a little less at each of the operations;
(15) While we have cut back we still have room to reduce costs more
if necessary; (16) The $25 million reduction in expenditures should
help us in our goal to operate on close to a cash-neutral basis
during this time of relatively weak prices; (17) We have talked
about our ability to pull levers to throttle back our activities if
needed, and we are taking specific actions to do just that. This
should help us with our line of credit covenants; (18) A financial
step we have taken is buying puts on about 93k ounces of gold at
$1318 and 2.9 million ounces of silver at $14.73 to assure Hecla’s
revenue stream for the next four months; (19) Buying a put gives us
a floor on the price we can expect, but we still maintain all of
the upside, other than the transaction cost, so from an investor
perspective we are lowering risk and still giving exposure to the
upside, which we believe could be significant. Think of it as
insurance; (20) We are considering putting more protection in place
for the rest of the year and part of next year; (21) The lenders
have reviewed our plans, and I believe they will modify the
revolver to assure Hecla’s access to the capital we might need in
current and projected price environments; (22) We expect our
financial position to improve particularly in Q4; (23) We will
continue to draw down and repay the revolver to fund working
capital expenses, but when we look forward at our expected
cashflow, we expect borrowings at the end of Q2 and Q3 to be about
the same; (24) I think many of you have heard me say that when I
came to Hecla 18 years ago that I was struck by the financial
flexibility the company had to manage cash generation. I expect
that we will see that flexibility over the next 18 months; (25) We
think that Hecla can be cash-flow positive over the second half of
2019 and possibly generate as much as $50 million of free cash flow
in 2020 at current prices; (26) We believe that cash generation can
quickly change our debt to EBITDA ratios as commonly calculated;
(27) We hope over the second half of the year to demonstrate
Hecla’s cashflow generation potential, which we believe will help
with the potential refinance of our bonds; (28) However, if the
bond market doesn’t have enough appetite to place all the bonds or
if the coupon is too expensive when we decide to refinance then
Hecla would have a number of potential options; (29) The point is
that with the quality of our assets and the jurisdictions they are
in we believe we have a number of viable options in addition to the
bond market that could materially change how much we need to refi
in the bond market and at what price; and (30) We believe the
Nevada issues are short term and the steps we are taking combined
with the quality of our assets should maintain and improve the
balance sheet.
Estimates or expectations of future events or results are based
upon certain assumptions, which may prove to be incorrect, which
could cause actual results to differ from forward-looking
statements. Such assumptions, include, but are not limited to: (i)
there being no significant change to current geotechnical,
metallurgical, hydrological and other physical conditions; (ii)
permitting, development, operations and expansion of the Company’s
projects being consistent with current expectations and mine plans;
(iii) political/regulatory developments in any jurisdiction in
which the Company operates being consistent with its current
expectations; (iv) the exchange rate for the USD/CAD and USD/MXN,
being approximately consistent with current levels; (v) certain
price assumptions for gold, silver, lead and zinc; (vi) prices for
key supplies being approximately consistent with current levels;
(vii) the accuracy of our current mineral reserve and mineral
resource estimates; (viii) the Company’s plans for development and
production will proceed as expected and will not require revision
as a result of risks or uncertainties, whether known, unknown or
unanticipated (ix) counterparties performing their obligations
under hedging instruments; (x) sufficient workforce is available
and trained to perform assigned tasks; (xi) weather patterns and
rain/snowfall within normal seasonal ranges so as not to impact
operations; (xii) relations with interested parties, including
Native Americans, remain productive; (xiii) economic terms can be
reached with third-party mill operators who have capacity to
process our ore; (xiv) availability of a waiver or forbearance from
the syndicate of lenders if required; (xv) there is no significant
negative developments in the high yield bond market which impact
the ability to finance notes when they mature; (xvi) maintaining
availability of water rights; (xvii) factors do not arise that
reduce available cash balances; and (xviii) sources of financing
will be available to us and on terms acceptable to us.
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 risks; (iii) currency fluctuations; (iv) increased
production costs and variances in ore grade or recovery rates from
those assumed in mining plans; (v) community relations; (vi)
conflict resolution and outcome of projects or oppositions; (vii)
litigation, political, regulatory, labor and environmental risks;
(viii) exploration risks and results, including that mineral
resources are not mineral reserves, they do not have demonstrated
economic viability and there is no certainty that they can be
upgraded to mineral reserves through continued exploration; (ix)
the failure of counterparties to perform their obligations under
hedging instruments; (x) our plans for improvements at our Nevada
operations, including at Fire Creek, are not successful; (xi) we
are unable to obtain covenant relief from the lenders under our
revolving line of credit; (xii) we are unable to refinance our
outstanding bonds due in May 2021; (xiii) our estimates full year
performance at our Nevada operations are inaccurate; (xiv) we are
forced to take a material impairment charge on our Nevada
operations; (xv) litigation claims against us or our management
relating to the Klondex acquisition cause us to incur significant
costs or a material judgment is awarded against us; and (xvi) we
are unable to obtain required financing at all or on terms
acceptable to us. For a more detailed discussion of such risks and
other factors, see the Company’s 2018 Form 10-K, filed on February
22, 2019, and Form 10-Q filed on May 9, 2019 with the Securities
and Exchange Commission (SEC), as well as the Company’s other SEC
filings. The Company does not undertake any obligation to release
publicly revisions to any “forward-looking statement,” including,
without limitation, outlook, to reflect events or circumstances
after the date of this presentation, or to reflect the occurrence
of unanticipated events, except as may be required under applicable
securities laws. Investors should not assume that any lack of
update to a previously issued “forward-looking statement”
constitutes a reaffirmation of that statement. Continued reliance
on “forward-looking statements” is at investors’ own risk.
Non-GAAP Measures(Unaudited)
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 Cost, Before By-product
Credits and All-In Sustaining Cost, After By-product Credits
(non-GAAP)
The table below presents reconciliations between the most
comparable GAAP measure of cost of sales and other direct
production costs and depreciation, depletion and amortization to
the non-GAAP measures of (i) Cash Cost, Before By-product Credits,
(ii) Cash Cost, After By-product Credits, (iii) AISC, Before
By-product Credits and (iv) AISC, After By-product Credits for our
operations at the Greens Creek, Lucky Friday, San Sebastian, Casa
Berardi and Nevada Operations units and for the Company for the
estimated amounts for the twelve months ended December 31,
2019.
Cash Cost, After By-product Credits, per Ounce is a measure
developed by precious metals companies (including the Silver
Institute) in an effort to provide a uniform standard for
comparison purposes. There can be no assurance, however, that these
non-GAAP measures as we report them are the same as those reported
by other mining companies.
Cash Cost, After By-product Credits, per Ounce is an important
operating statistic that we utilize to measure each mine's
operating performance. We have recently started reporting AISC,
After By-product Credits, per Ounce which we use as a measure of
our mines' net cash flow after costs for exploration,
pre-development, reclamation, and sustaining capital. This is
similar to the Cash Cost, After By-product Credits, per Ounce
non-GAAP measure we report, but also includes on-site exploration,
reclamation, and sustaining capital costs. Current GAAP measures
used in the mining industry, such as cost of goods sold, do not
capture all the expenditures incurred to discover, develop and
sustain silver and gold production. Cash Cost, After By-product
Credits, per Ounce and AISC, After By-product Credits, per Ounce
also allow us to benchmark the performance of each of our mines
versus those of our competitors. As a primary silver and gold
mining company, we also use these statistics on an aggregate basis.
We aggregate the Greens Creek, Lucky Friday and San Sebastian mines
to compare our performance with that of other primary silver mining
companies and aggregate the Casa Berardi and Nevada Operations
units to compare our performance with that of other primary gold
mining companies. Similarly, these statistics are useful in
identifying acquisition and investment opportunities as they
provide a common tool for measuring the financial performance of
other mines with varying geologic, metallurgical and operating
characteristics.
Cash Cost, Before By-product Credits and AISC, Before By-product
Credits include all direct and indirect operating cash costs
related directly to the physical activities of producing metals,
including mining, processing and other plant costs, third-party
refining expense, on-site general and administrative costs,
royalties and mining production taxes. AISC, Before By-product
Credits for each mine also includes on-site exploration,
reclamation, and sustaining capital costs. AISC, Before By-product
Credits for our consolidated silver properties also includes
corporate costs for general and administrative expense, exploration
and sustaining capital projects. By-product credits include
revenues earned from all metals other than the primary metal
produced at each unit. As depicted in the tables below, by-product
credits comprise an essential element of our silver unit cost
structure, distinguishing our silver operations due to the
polymetallic nature of their orebodies.
In addition to the uses described above, Cash Cost, After
By-product Credits, per Ounce and AISC, After By-product Credits,
per Ounce provide management and investors an indication of
operating cash flow, after consideration of the average price,
received from production. We also use these measurements for the
comparative monitoring of performance of our mining operations
period-to-period from a cash flow perspective.
The Casa Berardi and Nevada Operations sections below report
Cash Cost, After By-product Credits, per Gold Ounce and AISC, After
By-product Credits, per Gold Ounce for the production of gold,
their primary product, and by-product revenues earned from silver,
which is a by-product at Casa Berardi and Nevada Operations. Only
costs and ounces produced relating to units with the same primary
product are combined to represent Cash Cost, After By-product
Credits, per Ounce and AISC, After By-product Credits, per Ounce.
Thus, the gold produced at our Casa Berardi and Nevada Operations
units is not included as a by-product credit when calculating Cash
Cost, After By-product Credits, per Silver Ounce and AISC, After
By-product Credits, per Silver Ounce for the total of Greens Creek,
Lucky Friday and San Sebastian, our combined silver properties.
Similarly, the silver produced at our other three units is not
included as a by-product credit when calculating the similar gold
metrics for Casa Berardi.
In thousands (except per ounce amounts) Estimate for
Twelve Months Ended December 31, 2019
GreensCreek
LuckyFriday(2)
SanSebastian
Corporate(3)
TotalSilver
Cost of sales and other direct production costs and depreciation,
depletion and amortization $ 202,000 $ 41,000 $ 243,000
Depreciation, depletion and amortization (45,000 ) (4,000 ) (49,000
) Treatment costs 38,000 1,000 39,000 Change in product inventory
(1,000 ) — (1,000 ) Reclamation and other costs (1,000 )
(1,000 ) (2,000 ) Cash Cost, Before By-product Credits (1) 193,000
37,000 230,000 Reclamation and other costs 1,000 1,000 2,000
Exploration 2,000 3,500 5,500 Sustaining capital 42,000 1,500
43,500 General and administrative — — 40,000
40,000 AISC, Before By-product Credits (1) 238,000 43,000
321,000 By-product credits:
Zinc
(109,000 ) (109,000 ) Gold (55,000 ) (19,000 ) (74,000 ) Lead
(34,000 ) (34,000 ) Total By-product credits (198,000
) (19,000 ) (217,000 ) Cash Cost, After By-product Credits $
(5,000 ) $ 18,000 $ 13,000 AISC, After
By-product Credits $ 40,000 $ 24,000 $ 104,000
Divided by ounces produced 7,700 2,000 9,700 Cash Cost,
Before By-product Credits, per Silver Ounce $ 25.06 $ 18.50 $ 23.71
By-product credits per ounce (25.71 ) (9.50 ) (22.37 ) Cash
Cost, After By-product Credits, per Silver Ounce $ (0.65 ) $
9.00 $ 1.34 AISC, Before By-product Credits, per
Silver Ounce $ 30.91 $ 21.50 $ 33.09 By-product credits per ounce
(25.71 ) (9.50 ) (22.37 ) AISC, After By-product Credits,
per Silver Ounce $ 5.20 $ 12.00
$ 10.72 In thousands (except per ounce amounts)
Estimate for Twelve Months Ended December 31, 2019
Casa Berardi Nevada Operations Total
Gold Cost of sales and other direct production costs and
depreciation, depletion and amortization $ 210,000 $ 105,000 $
315,000 Depreciation, depletion and amortization (80,000 ) (25,000
) (105,000 ) Treatment costs — — — Change in product inventory
(2,000 ) (1,000 ) (3,000 ) Reclamation and other costs 1,000
(2,800 ) (1,800 ) Cash Cost, Before By-product Credits (1) 129,000
76,200 205,200 Reclamation and other costs 1,000 850 1,850
Exploration 4,000 5,000 9,000 Sustaining capital 43,000
24,000 67,000 AISC, Before By-product Credits (1)
177,000 106,050 283,050 By-product credits: — Silver (2,000 )
(4,000 ) (6,000 ) Total By-product credits (2,000 ) (4,000 ) (6,000
) Cash Cost, After By-product Credits $ 127,000 $ 72,200
$ 199,200 AISC, After By-product Credits $ 175,000
$ 102,050 $ 277,050 Divided by gold ounces
produced 150 60 210 Cash Cost, Before By-product Credits, per Gold
Ounce $ 860 $ 1,279 $ 977 By-product credits per ounce (13 ) (67 )
(29 ) Cash Cost, After By-product Credits, per Gold Ounce $ 847
$ 1,203 $ 949 AISC, Before By-product Credits,
per Gold Ounce $ 1,180 $ 1,768 $ 1,348 By-product credits per ounce
(13 ) (67 ) (29 ) AISC, After By-product Credits, per Gold Ounce $
1,167 $ 1,701 $ 1,319
(1) Includes all direct and indirect operating costs related to
the physical activities of producing metals, including mining,
processing and other plant costs, third-party refining and
marketing expense, on-site general and administrative costs,
royalties and mining production taxes, before by-product revenues
earned from all metals other than the primary metal produced at
each unit. AISC, Before By-product Credits also includes on-site
exploration, reclamation, and sustaining capital costs.
(2) The unionized employees at Lucky Friday have been on strike
since March 13, 2017, and production at Lucky Friday has been
limited since that time. For 2018 and 2017, costs related to
suspension of full production totaling approximately $17.4 million
and $17.1 million, respectively, along with $5.2 million and $4.2
million, respectively, in non-cash depreciation expense for that
period, have been excluded from the calculations of cost of sales
and other direct production costs and depreciation, depletion and
amortization, Cash Cost, Before By-product Credits, Cash Cost,
After By-product Credits, AISC, Before By-product Credits, and
AISC, After By-product Credits.
(3) AISC, Before By-product Credits for our consolidated silver
properties includes corporate costs for general and administrative
expense, exploration and sustaining capital.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190606005285/en/
Mike WesterlundVice President, Investor Relations800-HECLA91
(800-432-5291)Investor RelationsEmail:
hmc-info@hecla-mining.comWebsite: www.hecla-mining.com
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