Casa Berardi has record low costs
Hecla Mining Company (NYSE:HL) today announced third quarter
financial and operating results.
HIGHLIGHTS
- Net loss applicable to common
shareholders of $23.3 million, or $0.05 per share on lower prices
of all four metals.
- Cost of sales and other direct
production costs and depreciation, depletion and amortization
("cost of sales") of $137.1 million.
- Gross profit of $6.6 million and
adjusted EBITDA of $40.3 million.1
- Silver production of 2.5 million ounces
at cash cost, after by-product credits, of $4.12 per ounce.2
- Gold production of 72,995 ounces, up
16%, mainly due to additional ounces from Nevada.
- Casa Berardi All In Sustaining Costs
("AISC"), after by-product credits, reduced to $896 per gold ounce,
on higher throughput and lower stripping costs.3
- Aggressive $12 million exploration
spending was highest in Company history (see exploration press
release issued November 6, 2018).
- Strong financial position: Cash and
cash equivalents of $60.9 million at September 30, 2018.
Revolving line of credit undrawn at quarter end. Credit limit
increased to $250 million on November 1, 2018.
- Estimates for annual Company-wide
silver and gold production and costs are refined.
"Our strategy is working. The EBITDA we generated despite low
metals prices is a result of the improvements we made in our mines.
A case in point is Casa Berardi, which is generating strong cash
flow, with lower costs, higher mine throughput and an extended mine
life," said Phillips S. Baker, Jr., President and CEO. "The Nevada
operations are on the same path as Casa Berardi and Greens Creek,
with the development and processes which should increase throughput
and make the mines more efficient. In the meantime, the higher
costs in Nevada are short-term and a function of electing to
produce less to avoid sterilizing newly discovered
mineralization."
"Greens Creek has been in production for about 30 years, but the
mine continues to improve with a new mine plan that significantly
increases its value. San Sebastian continues to mine the
underground oxide ores and is on the verge of collecting the
sulfide bulk sample which could supplement current production as
well as significantly extend mine life. At Lucky Friday, our
salaried employees are now focusing on production, rather than
development, to minimize the financial impact of the strike.
Finally, we don't have any large capital projects looming, and we
plan to operate at a cash neutral basis, using our $250 million
revolving line of credit sparingly to temporarily fund working
capital requirements. We do not consider it a long-term source of
borrowing," Mr. Baker added.
FINANCIAL OVERVIEW
Third Quarter Ended Nine Months Ended
HIGHLIGHTS
September 30,2018
September 30,2017
September 30,2018
September 30,2017
FINANCIAL DATA
Sales (000)
$143,649 $140,839
$430,617 $417,662 Gross profit (000)
$6,576
$42,963
$80,364 $106,139 (Loss) income applicable to common
shareholders (000)
($23,322 ) $176
($3,284
) $33 Basic and diluted (loss) income per common share
($0.05 ) $—
($0.01 ) $— (Loss) income
(000)
($23,184 ) $314
($2,870 ) $447
Cash provided by operating activities (000)
$28,192 $28,294
$75,210 $74,115
Net loss applicable to common shareholders for the third quarter
was $23.3 million, or $0.05 per share, compared to net income of
$0.2 million, or $0.00 per share, for the same period a year ago,
the result mainly due to the following items:
- Sales of $143.6 million were impacted
by lower silver and gold production at San Sebastian and Greens
Creek, offset by the addition of Nevada sales in the third quarter
2018.
- Lower realized silver and gold metals
prices, as well as lower realized base metals prices.
- Gain on base metal derivatives
contracts of $19.5 million, which was net of realized gains on
contracts monetized for cash proceeds of $32.8 million in the
quarter.
- Net foreign exchange loss of $2.2
million versus a loss of $4.9 million in the third quarter of 2017
due to a weakening of the Canadian dollar.
- Interest expense, net of amount
capitalized, of $10.1 million in the third quarter of 2018,
increased over the $9.4 million recognized in the third quarter of
2017.
- An increase of $4.6 million in
exploration and pre-development expenditures over the third quarter
of 2017, particularly focused on Nevada and San Sebastian
operations.
- Suspension-related costs of $6.5
million included Lucky Friday costs, as well as $1.1 million for
curtailment of production from the Midas Mine in Nevada, along with
$1.4 million in non-cash depreciation expense, in the third quarter
of 2018.
- Acquisition costs of $6.1 million
recorded in the third quarter 2018.
Operating cash flow was $28.2 million compared to $28.3 million
in the third quarter of 2017, and included the proceeds received by
monetizing the base metals hedges, offset by the net loss and lower
working capital changes recorded in the third quarter 2018.
Adjusted EBITDA was $40.3 million compared to $60.5 million in
the third quarter of 2017, with the decrease mainly due to lower
base metals prices, higher exploration expense due to the addition
of Hecla Nevada, and acquisition costs recorded in the third
quarter 2018.
Capital expenditures (excluding capitalized interest) totaled
$40.7 million for the third quarter 2018 compared to $25.5 million
in the third quarter of 2017, with the increase mainly due to the
addition of Hecla Nevada, capitalization of costs recorded in the
third quarter 2018 for the Remote Vein Miner (RVM) project at Lucky
Friday, and costs related to underground sulfide development at San
Sebastian, partly offset by lower capital spending at Casa Berardi.
Expenditures at the operations were $15.0 million at Hecla Nevada,
$11.0 million at Greens Creek, $8.2 million at Casa Berardi, $4.8
million at Lucky Friday and $1.6 million at San Sebastian.
Metals Prices
The average realized silver price in the third quarter 2018 was
$14.68 per ounce, 14% lower than the $17.01 price realized in the
third quarter of 2017. The average realized gold price in the third
quarter was $1,205 per ounce, 6% lower than the prior year period.
Realized lead and zinc prices decreased by 13%, and 22%
respectively, from the third quarter of 2017.
OPERATIONS OVERVIEW
Overview
The following table provides the production summary on a
consolidated basis for the third quarter and nine months ended
September 30, 2018 and 2017:
Third Quarter Ended Nine Months Ended
September 30,2018
September 30,2017
September 30,2018
September 30,2017
PRODUCTION SUMMARY
Silver - Ounces produced
2,523,691 3,323,157
7,654,118 9,500,058 Payable ounces sold
2,588,478 2,540,817
6,993,695 8,098,652 Gold - Ounces
produced
72,995 63,046
191,116 171,720 Payable ounces
sold
68,568 57,380
183,050 161,921 Lead - Tons
produced
4,238 5,370
15,387 18,426 Payable tons sold
3,986 2,936
12,599 13,612 Zinc - Tons produced
12,795 14,497
42,312 43,000 Payable tons sold
9,282 8,444
30,072 29,269
The following tables provide a summary of the final production,
cost of sales, cash cost, after by-product credits, per silver and
gold ounce, and AISC, after by-product credits, per silver and gold
ounce for the third quarter and nine months ended
September 30, 2018:
Third Quarter Ended Greens Creek
Lucky Friday San Sebastian
Casa Berardi Nevada Ops Sept 30, 2018
Silver Gold Silver
Gold Silver Silver
Gold Gold Silver
Gold Silver Production (ounces)
2,523,691 72,995 1,876,417
11,559 31,639 521,931
3,666 43,981 9,559
13,789 84,145 Increase/(decrease) over 2017 (24 )%
16 % (20 )% (8 )% (64 )% (41 )%
(42 )% — % (1 )% N/A N/A Cost of
sales & other direct production costs and depreciation,
depletion and amortization (000) $ 66,487 $
70,586 $ 52,163 N/A N/A
$ 14,325 N/A $ 51,267
N/A $ 19,319 N/A
Increase/(decrease) over 2017 37 % 43 % 24 %
N/A N/A 114 % N/A
4 % N/A N/A N/A Cash costs,
after by-prod credits, per silver or gold ounce 2,4 $ 4.12
$ 803 $ 1.92 N/A
N/A $ 12.02 N/A $
686 N/A $ 1,179 N/A
Increase/(decrease) over 2017 (754 )% 7 %
(1,380 )% N/A N/A 485 %
N/A (9 )% N/A N/A N/A
AISC, after by-prod credits,
per silver or gold ounce 3
$ 15.68 $ 1,143 $ 9.20
N/A N/A $ 16.95
N/A $ 896 N/A $ 1,932
N/A Increase/(decrease) over 2017 136 % 5 %
106 % N/A N/A 2,142 %
N/A (18 )% N/A N/A
N/A
Nine Months Ended
Greens Creek Lucky Friday San Sebastian
Casa Berardi Nevada Ops Sept 30, 2018
Silver Gold Silver
Gold Silver Silver
Gold Gold Silver
Gold Silver Production (ounces)
7,654,118 191,116 5,789,440
38,396 156,015 1,593,770
12,051 126,880 30,748
13,789 84,145 Increase/(decrease) over 2017
(19 )% 11 % (7 )% (2 )% (80 )%
(36 )% (37 )% 12 % 15 % N/A N/A
Cost of sales and other direct production costs and depreciation,
depletion and amortization (000) $ 178,784 $
171,469 $ 141,763 N/A $
5,844 $ 31,177 N/A $
152,150 N/A $ 19,319 N/A
Increase/(decrease) over 2017 3 % 24 % 1 %
N/A (60 )% 70 % N/A
10 % N/A N/A N/A
Cash costs, after by-prod credits, per
silver or gold ounce 2,4
$ 0.05 $ 802 $ (2.22 )
N/A N/A $ 8.28 N/A
$ 760 N/A $ 1,179 N/A
Increase/(decrease) over 2017 (69 )% (7 )%
(404 )% N/A N/A 356 % N/A
(11 )% N/A N/A N/A AISC,
after by-prod credits, per silver or gold ounce 3 $ 10.71
$ 1,095 $ 4.71 N/A
N/A $ 13.34 N/A $
1,004 N/A $ 1,932 N/A
Increase/(decrease) over 2017 33 % (11 )% (16
)% N/A N/A 9,629 % N/A
(18 )% N/A N/A N/A
Greens Creek Mine - Alaska
At the Greens Creek mine, 1.9 million ounces of silver and
11,559 ounces of gold were produced in the third quarter, compared
to 2.3 million ounces and 12,563 ounces, respectively, in the third
quarter of 2017. Lower silver production was expected as a result
of lower grades due to mine sequencing. The mill operated at an
average of 2,316 tons per day (tpd) in the third quarter, 3% lower
than the third quarter of 2017.
The cost of sales for the third quarter was $52.2 million, and
the cash cost, after by-product credits, per silver ounce, was
$1.92, compared to $41.9 million and ($0.15), respectively, for the
third quarter of 2017.2 The AISC, after by-product credits, was
$9.20 per silver ounce for the third quarter compared to $4.47 in
the third quarter of 2017.3 The per ounce silver costs were higher
primarily due to lower base metals prices and the number of tons
milled.
A new 2019 mine plan should reduce the amount of development in
the next four years to access significant ore reserves at shallower
depth in proximity to old workings (East Ore). It also utilizes
existing workings, rather than developing a new ramp system, to
access these materials and brings this higher-grade ore into
production beginning in 2019, instead of near the end of the mine
life, which should increase revenues over the next few years. The
combination of exploration success over the past year and the
optimization of sequencing should enable the mine life to be
maintained or extended.
"When we acquired Greens Creek, our goal was consistency of
production at an increased throughput. Having achieved that we
moved to continuous improvements like the increased recoveries in
the mill. Now we have identified a new mine plan that improves the
mine's economics by increasing production, reducing both
development and the mining fleet while potentially extending the
mine life. The improvements we have made to this mine demonstrate
the importance of having a long mine life that allows the time to
make improvements and realize their benefits," said Mr. Phillips S.
Baker, Jr.
Casa Berardi - Quebec
At the Casa Berardi mine, 43,981 ounces of gold were produced in
the third quarter, the second highest quarterly gold production
since acquisition, including 7,614 ounces from the East Mine Crown
Pillar (EMCP) pit; compared to 44,141 ounces in the third quarter
of 2017. The steady production was primarily due to ore throughput.
The mill operated at an average of 3,846 tpd in the third quarter,
the highest rate since acquisition, and an increase of 8% over the
third quarter of 2017.
The cost of sales was $51.3 million for the third quarter and
the cash cost, after by-product credits, per gold ounce was $686,
compared to $49.3 million and $750, respectively, in the prior year
period.2,4 The decrease in cash cost, after by-product credits, per
gold ounce is due to the higher gold production. The AISC, after
by-product credits, was $896 per gold ounce for the third quarter
compared to $1,091 in the third quarter of 2017, primarily due to
lower capital spending.3
The automated 985 drift project continues to improve the
operating efficiency of the mine, with the autonomous haul truck
running better and with higher availability than originally
anticipated. The second 40-ton Sandvik autonomous haul truck is
scheduled to arrive in the fourth quarter. Operating two autonomous
trucks is expected to result in operating savings of several
million dollars a year.
"Casa Berardi was the standout mine for us this quarter. The
improvements and innovations we have made in the mine are paying
off with the declining cost profile, higher gold production and
cash flow on record throughput," said Mr. Phillips S. Baker, Jr.
"We are very proud of the cover story on Casa Berardi in CIM's
September/October issue."
San Sebastian - Mexico
At the San Sebastian mine, 521,931 ounces of silver and 3,666
ounces of gold were produced in the third quarter, compared to
880,885 ounces and 6,342 ounces, respectively, in the third quarter
of 2017. The lower silver and gold production was expected as a
result of lower grades. The mill operated at an average of 432 tpd,
an increase of 9% over the third quarter of 2017.
The cost of sales was $14.3 million for the third quarter and
the cash cost, after by-product credits, was $12.02 per silver
ounce, compared to $6.7 million and ($3.12), respectively, in the
third quarter of 2017.2 The AISC, after by-product credits, was
$16.95 per silver ounce for the third quarter compared to ($0.83)
in the third quarter of 2017, principally due to the higher costs
of mining underground versus higher-grade stockpiles and work being
conducted on the Velardeña tailings facility.3 The Company plans to
process a bulk sample by the end of the year with revenues expected
in the first quarter of 2019. If successful, this could lead to the
beginning of mining of the sulfides by late 2019.
"The upcoming bulk sample of the Hugh Zone sulfide material
could significantly increase the mine life. We plan to continue our
"capital lite" strategy here since we already have a contract with
a third-party mill and anticipate using a contract miner. With
almost no capital at risk, the returns on the investment have been
extraordinary," said Mr. Phillips S. Baker, Jr.
Nevada Operations (acquired on July 20, 2018)
For the period July 20 to September 30, 2018, 13,789 ounces of
gold were produced. The Nevada operations are focused on
development and exploration activities at Fire Creek and Hollister
at the expense of production. Little development had been
undertaken during 2018 at these properties by the former owners.
Our expectation is to increase Fire Creek throughput from 350 tons
per day to 550 tons per day by mid-2019. The development of a drift
to the Hatter Graben exploration target is underway with completion
expected late in 2019.
During the reporting period, approximately $15.0 million in
capital and $4.5 million in exploration expense was invested in
Nevada. Of the $15.0 million in capital, $7.3 million related to
the completion of the tailings facility at Midas which should
provide the necessary waste capacity for the next four years, while
$7.0 million was for development that is needed to increase Fire
Creek and Hollister mine throughput, and $0.7 million was spent on
completing the CIL circuit at the Midas Mill which is expected to
increase the recoveries of the ore being processed from
Hollister.
Notable highlights include:
- General
- Movement of personnel and equipment to
Fire Creek and Hollister is substantially complete.
- Midas
- Production at Midas is winding down
with minimal production of previously developed ore planned until
year end.
- Midas mill CIL tanks are operational,
and completion of the remaining installation work is expected in
the fourth quarter.
- New tailings storage facility is on
track for completion in 2018.
- Fire Creek
- Now fully staffed (with the addition of
the Midas crews).
- Ground conditions are improving and new
in-cycle procedures have been developed for consistent development
advance rates.
- The ramp-up in development is
proceeding with the addition of more headings.
- Installation of the shotcrete plant is
nearing completion, will be added to the development cycle to
mitigate ground issues and support rehabilitation of existing
haulage ways.
- The mining of select high-grade zones
has been moved from Q3 2018 into 2019 as the ore extended
vertically farther than expected, and development is needed for
full extraction of the ore panels.
- Hollister/Hatter Graben
- Development of the Hatter Graben is
ahead of schedule with about 10% of the footage completed.
"In the 100 days we have owned the Nevada properties we have
been in continuous change - winding down Midas, resolving the
roadbed issues at Fire Creek, advancing the development at Hatter
Graben, and completing the capital projects on the mill and
tailings facility. We expect the pace of change to continue as we
commission a new batch plant that should improve ground control,
test a road-header to improve mining in soft rock and rework the
mine plan as we gain more knowledge. However, we don't believe we
will need to make significant new financial investment to put the
mine on the same improvement path that we have seen at Greens Creek
and Casa Berardi," said Mr. Phillips S. Baker, Jr.
Lucky Friday Mine - Idaho
At the Lucky Friday mine, 31,639 ounces of silver were produced
in the third quarter, compared to 88,298 ounces in the third
quarter of 2017, with the salaried workers focused mostly on
development.
There was no cost of sales for the third quarter, as there were
no concentrate shipments during the quarter.
The Company is now focusing on limited production by salaried
staff to help minimize the financial impact of the ongoing strike.
In addition, construction of the Remote Vein Miner (RVM) continues
in Sweden. The RVM has the potential to revolutionize how the mine
operates, making it safer and more efficient. Costs related to
care-and-maintenance of the mine are reported in a separate line
item in our condensed consolidated statement of operations and are
excluded from the calculation of cost of sales, cash cost, after
by-product credits, per silver ounce and AISC, after by-product
credits, per silver ounce.
"Lucky Friday has the longest mine life of all our properties,
but at these silver prices and with the work rules the union
workers have clung to, even at full production the mine doesn't
generate significant free cash flow. So, we are operating to
minimize the cash consumption before we go back into production
which we expect to be primarily from the RVM," said Phillips S.
Baker, Jr.
EXPLORATION AND PRE-DEVELOPMENT
Expenditures
Exploration (including corporate development) expenses were
$12.4 million, an increase of $5.2 million compared to the third
quarter of 2017. Full year exploration (including corporate
development) expenses are expected to be $35 million, up from
$23.5 million in 2017, in part reflecting exploration at the Nevada
operations, San Sebastian, Casa Berardi and Greens Creek and
drilling at Kinskuch and Little Baldy.
A complete summary of exploration for the third quarter can be
found in the news release entitled "Hecla Reports Continued
Drilling Success in the Third Quarter" released on November 6,
2018.
"This quarter's exploration, at $12 million, is 60% more than
any quarter in the past five years primarily as a result of adding
Nevada exploration to an already substantial program. While there
are good results from all the programs, we plan to pare back future
expenditures to operate within cash flow," said Mr. Phillips S.
Baker, Jr.
PRE-DEVELOPMENT
Pre-development spending was $1.2 million for the quarter, for
permitting of Rock Creek and Montanore.
In August, the U.S. Forest Service issued its Final Record of
Decision (ROD) authorizing Phase 1, which is the exploration phase,
for Rock Creek.
At the Montanore project, the Forest Service continues to work
on a Supplemental Environmental Impact Statement (EIS), pursuant to
the 2017 Montana Federal District Court remand of the previous
Forest Service ROD. The court's decision allows the agency to
advance authorizations for the initial evaluation phase of the
project. A draft Supplemental EIS is anticipated in the first half
of 2019.
BASE METALS AND CURRENCY HEDGING
Base Metals Forward Sales Contracts
There are no forward sales contracts outstanding at this time,
other than provisional hedges (which address changes in prices
between shipment and settlement with customers).
Foreign Currency Forward Purchase Contracts
The following table summarizes the quantities of Canadian
dollars and Mexican pesos committed under financially settled
forward purchase contracts at September 30, 2018:
Currency Under Contract(in
thousands of CAD/MXN)
Average Exchange Rate CAD MXN
CAD/USD MXN/USD 2018 settlements 29,300
47,110 1.30 19.66 2019 settlements 91,200 124,320 1.31 20.28
2020 settlements 61,700 7,100 1.29 20.72 2021 settlements 36,500 —
1.28 — 2022 settlements 6,400 — 1.27 —
2018 ESTIMATES5
The Company is providing updated annual estimates as
follows:
2018 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
7.5-8.1 7.6-7.9 50-55
50-53 21.0-22.5 21.1-22.1
300-315
301-310
Lucky Friday
San Sebastian
2.0-2.5 2.0-2.2 15-17
15-16 2.9-3.7 2.9-3.3
41-52 41-47
Casa Berardi
157-162
161-165 11.0-11.5 11.3-11.7
157-162 161-165
Nevada
Operations 0.1-0.2
40-50 36-41 2.9-3.8
2.6-3.1 41-52 37-43
Total 9.5-10.6
9.7-10.3 262-284
262-275
37.8-41.5
37.9-40.2
539-581
540-565
2018 Cost Outlook
Costs of Sales (million)
Cash cost, after by-product credits,
per
silver/gold ounce2,4
AISC, after by-product credits,
per
produced silver/gold
ounce3
Original
(if revised)
Current Original
(if revised)
Current Original
(if revised)
Current Greens Creek
$ 198 $ 183 $ (0.50 )
$ (1.00 ) $ 7.00 $
6.00
Lucky Friday
San
Sebastian $ 44 $ 42
$
8.50
$ 9.50
$
12.50
$ 14.00
Total Silver
$ 242
$ 225
$ 1.50 $ 1.00
$ 12.75
$ 12.25 Casa Berardi $
185 $ 203 $ 800
$ 775 $ 1,100 $
1,050
Nevada Operations $ 68
$ 64 $ 800 $ 1,275
$ 1,100 $ 1,875
Total
Gold $ 253
$
267 $ 800
$
850 $ 1,100
$ 1,200
2018 Capital and Exploration
Outlook
Original(if revised)
Current 2018E Capital expenditures (excluding
capitalized interest) $140-$145 million
2018E Exploration expenditures (includes Corporate
Development) $34-$37 million $35-$37 million
2018E Pre-development expenditures $5 million
$4 million
2018E Research and Development expenditures
$6-$10 million $7-$9 million
DIVIDENDS
The Board of Directors declared a quarterly cash dividend of
$0.0025 per share of common stock, payable on or about December 3,
2018, to stockholders of record on November 20, 2018. The
realized silver price was $14.68 in the third quarter and therefore
did not satisfy the criteria for a larger dividend under the
Company's dividend policy.
The Board of Directors also declared the regular quarterly
dividend of $0.875 per share on the 157,816 outstanding shares of
Series B Cumulative Convertible Preferred Stock. This represents a
total amount to be paid of approximately $138,000. The cash
dividend is payable on or about January 2, 2019 to shareholders of
record on December 14, 2018.
CONFERENCE CALL AND WEBCAST
A conference call and webcast will be held Thursday, November 8,
at 10:00 a.m. Eastern Time to discuss these results. You may join
the conference call by dialing toll-free 1-855-760-8158 or for
international 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 operating
mines in Quebec, Canada and in 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.
NOTES
Non-GAAP Financial Measures
Non-GAAP financial measures are intended to provide additional
information only and do not have any standard meaning prescribed by
generally accepted accounting principles in the United States
(GAAP). These measures should not be considered in isolation or as
a substitute for measures of performance prepared in accordance
with GAAP.
(1) Adjusted EBITDA is a non-GAAP measurement, a reconciliation
of which to net income (loss), the most comparable GAAP measure,
can be found at the end of the release. Adjusted EBITDA is a
measure used by management to evaluate the Company's operating
performance but should not be considered an alternative to net
income (loss), or cash provided by operating activities as those
terms are defined by GAAP, and does not necessarily indicate
whether cash flows will be sufficient to fund cash needs. In
addition, the Company may use it when formulating performance goals
and targets under its incentive program.
(2) Cash cost, after by-product credits, per silver or gold
ounce is a non-GAAP measurement, a reconciliation of which to cost
of sales and other direct production costs and depreciation,
depletion and amortization (sometimes referred to as "cost of
sales" in this release), can be found at the end of the release. It
is an important operating statistic that management utilizes to
measure each mine's operating performance. It also allows the
benchmarking of performance of each mine versus those of our
competitors. As a primary silver mining company, management also
uses the statistic on an aggregate basis - aggregating the Greens
Creek, Lucky Friday and San Sebastian mines - to compare
performance with that of other primary silver mining companies.
With regard to Casa Berardi and the Nevada operations, management
uses cash cost, after by-product credits, per gold ounce to compare
its performance with other gold mines. Similarly, the statistic is
useful in identifying acquisition and investment opportunities as
it provides a common tool for measuring the financial performance
of other mines with varying geologic, metallurgical and operating
characteristics. In addition, the Company may use it when
formulating performance goals and targets under its incentive
program. Cash cost, after by-product credits, per silver ounce is
not presented for Lucky Friday for the third quarters of 2018 and
2017 and year to date 2018, as production was limited due to the
strike and results are not comparable to those from prior periods
and are not indicative of future operating results under full
production. The estimated fair value of the stockpile acquired at
Hollister has been removed from the cash cost, after by-product
credits calculation.
(3) All in sustaining cost (AISC), after by-product credits, is
a non-GAAP measurement, a reconciliation of which to cost of sales
and other direct production costs and depreciation, depletion and
amortization, the closest GAAP measurement, can be found in the end
of the release. AISC, after by-product credits, includes cost of
sales and other direct production costs, expenses for reclamation
and exploration at the mine sites, corporate exploration related to
sustaining operations, and all site sustaining capital costs. AISC,
after by-product credits, is calculated net of depreciation,
depletion, and amortization and by-product credits. AISC, after
by-product credits, per silver ounce is not presented for Lucky
Friday for the second quarters of 2018 and 2017 and the first half
of 2018, as production was limited due to the strike and results
are not comparable to those from prior periods and are not
indicative of future operating results under full production.
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.
Management believes that all in sustaining costs is a non-GAAP
measure that provides additional information to management,
investors and analysts to help in the understanding of the
economics of our operations and performance compared to other
producers and in the investor's visibility by better defining the
total costs associated with production. Similarly, the statistic is
useful in identifying acquisition and investment opportunities as
it provides a common tool for measuring the financial performance
of other mines with varying geologic, metallurgical and operating
characteristics. In addition, the Company may use it when
formulating performance goals and targets under its incentive
program.
(4) Cash cost, after by-product credits, per gold ounce is only
applicable to Casa Berardi and Nevada production. Gold produced
from Greens Creek and San Sebastian is treated as a by-product
credit against the silver cash cost.
Other
(5) Expectations for 2018 includes silver, gold, lead and zinc
production from Greens Creek, San Sebastian, Casa Berardi and
Nevada operations converted using Au $1,250/oz, Ag $16.00/oz, Zn
$1.25/lb, and Pb $1.00/lb. Lucky Friday expectations are currently
suspended as there is currently a strike. Numbers may be
rounded.
Cautionary Statements to Investors on Forward-Looking
Statements
This news release 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 to be covered by the safe harbor
created by such sections and other applicable laws, including
Canadian securities laws. Such forward-looking statements may
include, without limitation: (i) estimates of future production and
sales; (ii) the impact of the Klondex acquisition on the Company's
operations and results; (iii) expectations regarding the
development, growth potential, financial performance of the
Company’s projects; (iv) ability to complete construction of the
remote vein miner and for it to operate successfully; (v) impact of
the Lucky Friday strike on production and cash flow; (vi) ability
to generate value from innovations being introduced into the mines;
(vii) impact of metals prices on cash costs, after by-product
credits; and (viii) ability to permit and timing of Montana
projects. Estimates or expectations of future events or results are
based upon certain assumptions, which may prove to be incorrect.
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 rates for the Canadian dollar and Mexican peso to
the U.S. dollar, 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; and (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. Where the Company
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.” Such risks include, but are not limited to gold,
silver and other metals price volatility, operating risks, currency
fluctuations, increased production costs and variances in ore grade
or recovery rates from those assumed in mining plans, community
relations, conflict resolution and outcome of projects or
oppositions, litigation, political, regulatory, labor and
environmental risks, and 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.
For a more detailed discussion of such risks and other factors, see
the Company’s 2017 Form 10-K, filed on February 15, 2018, and Forms
10-Q filed on May 10, 2018 and August 9, 2018, with the Securities
and Exchange Commission (SEC), as well as the Company’s other SEC
filings. The Company does not undertake any obligation to publicly
release revisions to any “forward-looking statement,” including,
without limitation, outlook, to reflect events or circumstances
after the date of this news release, 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.
HECLA MINING COMPANY
Condensed Consolidated Statements of
(Loss) Income
(dollars and shares in thousands, except
per share amounts - unaudited)
Third Quarter Ended Nine Months Ended
September 30,
2018
September 30,
2017
September 30,
2018
September 30,
2017
Sales of products
$ 143,649 $ 140,839
$ 430,617 $ 417,662 Cost of sales and
other direct production costs
93,609 68,358
246,918
224,537 Depreciation, depletion and amortization
43,464
29,518
103,335 86,986
137,073 97,876
350,253 311,523
Gross profit
6,576 42,963
80,364
106,139 Other operating expenses: General and
administrative
10,327 9,529
27,849 29,044 Exploration
12,411 7,255
27,609 17,622 Pre-development
1,195 1,757
3,615 4,061 Research and development
1,269 1,130
5,042 2,125 Other operating expense
448 134
1,767 1,590 Gain on disposition of
properties, plants, equipment and mineral interests
(3,208
) (4,830 )
(3,374 ) (4,924 ) Provision or
closed operations and reclamation
1,852 2,940
4,534
5,044 Suspension-related costs
6,519 4,780
18,337
14,385 Acquisition costs
6,139 —
9,656
25
36,952 22,695
95,035
68,972 Income from operations
(30,376 )
20,268
(14,671 ) 37,167 Other income
(expense): Gain (loss) on derivative contracts
19,460
(11,226 )
40,271 (16,548 ) Loss on disposition of
investments
(36 ) —
(36 ) (167 )
Unrealized (loss) gain on investments
(2,207 ) (124 )
(2,461 ) (73 ) Foreign exchange (loss) gain
(2,212 ) (4,917 )
2,856 (10,258 ) Interest
income and other (expense) income
(346 ) 541
(294 ) 1,185 Interest expense, net of amount
capitalized
(10,146 ) (9,358 )
(30,019
) (28,423 )
4,513 (25,084 )
10,317
(54,284 ) (Loss) income before income taxes
(25,863
) (4,816 )
(4,354 ) (17,117 ) Income tax
benefit
2,679 5,130
1,484 17,564
Net (loss) income
(23,184 ) 314
(2,870
) 447 Preferred stock dividends
(138 ) (138 )
(414 ) (414 ) (Loss) income applicable to common
shareholders
$ (23,322 ) $ 176
$
(3,284 ) $ 33 Basic (loss) income per common
share after preferred dividends
$ (0.05 ) $ —
$ (0.01 ) $ — Diluted (loss)
income per common share after preferred dividends
$
(0.05 ) $ —
$ (0.01 ) $ —
Weighted average number of common shares outstanding - basic
452,636 398,848
417,532 396,809
Weighted average number of common shares outstanding -
diluted
452,636 401,258
417,532
400,176
HECLA MINING COMPANY
Condensed Consolidated Balance Sheets
(dollars and share in thousands -
unaudited)
September 30, 2018
December 31, 2017
ASSETS
Current assets: Cash and cash equivalents
$ 60,856 $
186,107 Short-term investments and securities
— 33,758
Accounts receivable: Trade
12,947 14,805 Other, net
26,928 17,385 Inventories
76,088 55,466 Other current
assets
21,510 13,715 Total current assets
198,329 321,236 Non-current investments
7,190 7,561
Non-current restricted cash and investments
1,010 1,032
Properties, plants, equipment and mineral interests, net
2,487,429 1,999,311 Non-current deferred income taxes
1,601 1,509 Other non-current assets and deferred charges
14,699 14,509
Total assets $
2,710,258 $ 2,345,158
LIABILITIES
Current liabilities: Accounts payable and accrued
liabilities
$ 65,755 $ 46,549 Accrued payroll and
related benefits
29,488 31,259 Accrued taxes
8,274
5,919 Current portion of capital leases
6,069 5,608 Current
portion of accrued reclamation and closure costs
6,621 6,679
Other current liabilities
16,249 16,116 Total
current liabilities
132,456 112,130 Capital leases
8,638 6,193 Accrued reclamation and closure costs
99,314 79,366 Long-term debt
534,067 502,229
Non-current deferred tax liability
164,928 124,352
Non-current pension liability
44,097 46,628 Other
non-current liabilities
4,689 12,983
Total
liabilities 988,189 883,881
SHAREHOLDERS’ EQUITY
Preferred stock
39 39 Common
stock
121,283 100,926 Capital surplus
1,872,946
1,619,816 Accumulated deficit
(223,280 ) (218,089 )
Accumulated other comprehensive loss
(28,183 )
(23,373 ) Treasury stock
(20,736 ) (18,042 )
Total
shareholders’ equity 1,722,069 1,461,277
Total liabilities and shareholders’ equity $
2,710,258 $ 2,345,158 Common shares
outstanding
479,909 399,176
HECLA MINING COMPANY
Condensed Consolidated Statements of Cash
Flows(dollars in thousands - unaudited)
Nine Months Ended
September 30,
2018
September 30,
2017
OPERATING ACTIVITIES
Net (loss)
income
$ (2,870 )
$ 447 Non-cash elements included in net (loss) income:
Depreciation, depletion and amortization
108,814 91,255 Loss
on disposition of investments
— 167 Gain on disposition of
properties, plants, equipment and mineral interests
(3,374
) (4,924 ) Unrealized loss on investments
2,461 73
Adjustment of inventory to market value
7,232 — Provision
for reclamation and closure costs
3,957 3,379 Stock
compensation
4,672 4,943 Deferred income taxes
(4,637
) (23,467 ) Amortization of loan origination fees
1,471 1,415 (Gain) loss on derivative contracts
(15,208 ) 16,718 Foreign exchange (gain) loss
(2,032 ) 10,520 Other non-cash items, net
(37
) (1 ) Change in assets and liabilities: Accounts receivable
(4,424 ) 4,903 Inventories
(18,954 )
(9,611 ) Other current and non-current assets
(5,569
) (2,685 ) Accounts payable and accrued liabilities
12,308 (7,759 ) Accrued payroll and related benefits
(4,207 ) (913 ) Accrued taxes
845 (4,469 )
Accrued reclamation and closure costs and other non-current
liabilities
(5,238 ) (5,876 )
Cash provided by
operating activities 75,210 74,115
INVESTING ACTIVITIES
Additions to properties, plants,
equipment and mineral interests
(83,285 ) (70,390 )
Acquisition of Klondex, net of cash and restricted cash acquired
(139,326 ) — Proceeds from disposition of properties,
plants and equipment
722 151 Insurance proceeds received for
damaged property
4,377 5,628 Purchases of investments
(31,971 ) (36,916 ) Maturities of short-term
investments
64,895 31,169
Net cash used in
investing activities (184,588 ) (70,358
)
FINANCING
ACTIVITIES
Proceeds from issue of
stock, net of related costs
3,085 9,610 Acquisition of
treasury shares
(2,694 ) (2,993 ) Dividends paid to
common shareholders
(3,193 ) (2,978 ) Dividends paid
to preferred shareholders
(414 ) (414 ) Debt
origination fees
(2,460 ) (476 ) Repayments of debt
(82,036 ) (470 ) Borrowings on debt
78,024 —
Payments on capital leases
(5,992 ) (5,065 )
Net
cash used in financing activities (15,680 )
(2,786 ) Effect of exchange rates on cash
(215
) 1,051 Net increase in cash, cash equivalents
and restricted cash and cash equivalents
(125,273 )
2,022 Cash, cash equivalents and restricted cash and cash
equivalents at beginning of period
187,139 171,977
Cash, cash equivalents and restricted cash and cash
equivalents at end of period
$ 61,866 $
173,999
HECLA MINING COMPANY
Production Data
Three Months Ended Nine Months
Ended
September 30,
2018
September 30,
2017
September 30,
2018
September 30,
2017
GREENS CREEK UNIT
Tons of ore milled
213,037 219,983
632,876
627,900 Mining cost per ton
$ 68.76 $
69.46
$ 69.19 $ 69.64 Milling cost per ton
$
31.97 $ 31.01
$ 32.73 $ 32.38 Ore grade milled
- Silver (oz./ton)
11.65 13.65
11.94 12.84 Ore grade
milled - Gold (oz./ton)
0.087 0.089
0.094 0.095 Ore
grade milled - Lead (%)
2.40 2.77
2.84 2.83 Ore grade
milled - Zinc (%)
6.87 7.47
7.58 7.49 Silver produced
(oz.)
1,876,417 2,344,315
5,789,440 6,205,659 Gold
produced (oz.)
11,559 12,563
38,396 39,289 Lead
produced (tons)
4,026 4,851
14,352 14,080 Zinc
produced (tons)
12,695 14,325
41,673 40,697 Cash
cost, after by-product credits, per silver ounce (1)
$
1.92 $ (0.15 )
$ (2.22 ) $ 0.73 AISC,
after by-product credits, per silver ounce (1)
$ 9.20
$ 4.47
$ 4.71 $ 5.60 Capital additions (in thousands)
$ 11,029
$ 8,206
$ 34,694
$ 24,891
LUCKY FRIDAY
UNIT
Tons of ore milled
3,006 7,302
16,012 64,371 Mining cost per ton
$ — $ 150.89
$ 87.79 $ 112.60 Milling cost per ton
$
— $ 13.15
$ 14.26 $ 22.93 Ore grade milled -
Silver (oz./ton)
11.41 12.87
11.06 12.45 Ore grade
milled - Lead (%)
8.06 7.68
7.21 7.12 Ore grade
milled - Zinc (%)
3.64 3.21
4.28 3.90 Silver produced
(oz.)
31,639 88,298
156,015 769,080 Lead produced
(tons)
212 518
1,035 4,346 Zinc produced (tons)
100 172
639 2,303 Cash cost, after by-product
credits, per silver ounce (1)
N/A $ 11.60
N/A $ 6.58
AISC, after by-product credits, per silver ounce (1)
N/A $
13.37
N/A $ 12.21 Capital additions (in thousands)
$ 4,840 $
208
$ 6,889
$ 5,000
SAN SEBASTIAN
Tons
of ore milled
39,739 36,482
111,916 111,623 Mining
cost per ton
$ 171.87 $ 35.69
$ 157.21
$ 38.70 Milling cost per ton
$ 65.98 $ 69.42
$
66.16 $ 66.64 Ore grade milled - Silver (oz./ton)
14.16 25.48
15.36 23.71 Ore grade milled - Gold
(oz./ton)
0.108 0.184
0.12 0.183 Silver produced
(oz.)
521,931 880,885
1,593,770 2,498,638 Gold
produced (oz.)
3,666 6,342
12,051 19,222 Cash cost,
after by-product credits, per silver ounce (1)
$
12.02 $ (3.12 )
$ 8.28 $ (3.23 ) AISC, after
by-product credits, per silver ounce (1)
$ 16.95 $
(0.83 )
$ 13.34 $ (0.14 ) Capital additions (in
thousands)
$ 1,582
$ 3,350
$
3,692 $ 7,480
CASA
BERARDI UNIT
Tons of ore milled - underground
181,285 206,209
556,991 606,201 Tons of ore milled -
surface pit
172,555 119,936
495,335 343,745 Tons of
ore milled - total
353,840 326,145
1,052,326 949,946
Surface tons mined - ore and waste
1,492,041 2,010,524
5,129,646 6,427,067 Mining cost per ton of ore - underground
$ 104.31 $ 98.96
$ 102.56 $ 98.71
Mining cost per ton of ore - combined
$ 65.97 $ 82.95
$ 72.15 $ 81.95 Mining cost per ton of ore and waste
- surface tons mined
$ 4.10 $ 3.42
$
3.66 $ 2.84 Milling cost per ton
$ 15.05 $
16.19
$ 15.91 $ 16.28 Ore grade milled - Gold
(oz./ton) - underground
0.229 0.193
0.204 0.167 Ore
grade milled - Gold (oz./ton) - surface pit
0.050 0.084
0.064 0.086 Ore grade milled - Gold (oz./ton) - combined
0.140 0.153
0.138 0.137 Ore grade milled - Silver
(oz./ton)
0.03 0.03
0.03 0.03 Gold produced (oz.) -
underground
36,367 35,192
99,632 87,622 Gold produced
(oz.) - surface pit
7,614 8,949
27,248 25,587 Gold
produced (oz.) - total
43,981 44,141
126,880 113,209
Cash cost, after by-product credits, per gold ounce (1)
$
686 $ 750
$ 760 $ 858 AISC, after by-product
credits, per gold ounce (1)
$ 896 $ 1,091
$
1,004 $ 1,226 Capital additions (in thousands)
$ 8,244 $ 13,775
$ 27,120
$ 38,249
Nevada Operations
Tons of ore milled
55,899 N/A
55,899 N/A
Mining cost per ton
$ 186.12 N/A
$
186.12 N/A Milling cost per ton
$ 70.39 N/A
$ 70.39 N/A Ore grade milled - Gold (oz./ton)
0.288 N/A
0.288 N/A Silver produced (oz.)
84,145 N/A
84,145 N/A Gold produced (oz.)
13,789 N/A
13,789 N/A Cash cost, after by-product
credits, per silver ounce (1)
$ 1,179 N/A
$
1,179 N/A AISC, after by-product credits, per silver ounce
(1)
$ 1,932 N/A
$ 1,932 N/A Capital
additions (in thousands)
$
14,998 N/A
$ 14,998 N/A
(1) Cash cost, after by-product
credits, per ounce and AISC, after by-product credits. per ounce
represent non-U.S. Generally Accepted Accounting Principles (GAAP)
measurements. A reconciliation of cost of sales and other direct
production costs and depreciation, depletion and amortization
(GAAP) to cash cost, after by-product credits can be found in the
cash cost per ounce reconciliation section of this news release.
Gold, lead and zinc produced have been treated as by-product
credits in calculating silver costs per ounce. The primary metal
produced at Casa Berardi is gold, with a by-product credit for the
value of silver production.
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 tables below present 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 Cash Cost, Before By-product Credits, Cash
Cost, After By-product Credits, AISC, Before By-product Credits and
AISC, After By-product Credits for our operations at the Greens
Creek, Lucky Friday, San Sebastian, Casa Berardi and Nevada
Operations units for the three- and nine-month periods ended
September 30, 2018 and 2017, and for estimated results for the
full year ended December 31, 2018.
Cash Cost, After By-product Credits, per Ounce is an important
operating statistic that we utilize to measure each mine's
operating performance. AISC, After By-product Credits, per Ounce is
an important operating statistic that we utilize as a measure of
our mines' net cash flow after costs for exploration,
pre-development, reclamation, and sustaining capital. 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 silver and gold mining
company, we also use these statistics on an aggregate basis -
aggregating the Greens Creek, Lucky Friday and San Sebastian mines,
to compare our performance with that of other primary silver mining
companies and aggregating Casa Berardi and Nevada Operations for
comparison with other 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,
reclamation, exploration, and pre-development. 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. 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. 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 our reporting of these non-GAAP measures are the same
as those reported by other mining companies.
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 are 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.
In thousands (except per ounce amounts) Three
Months Ended September 30, 2018
Greens
Creek
Lucky
Friday(2)
San
Sebastian
Corporate(3) Total Silver
Cost of sales and other direct production costs and depreciation,
depletion and amortization $ 52,163 (1 ) $ 14,325 $ 66,487
Depreciation, depletion and amortization (12,428 ) — (1,795 )
(14,223 ) Treatment costs 8,267 134 205 8,606 Change in product
inventory (4,480 ) — (1,549 ) (6,029 ) Reclamation and other costs
(965 ) 103 (458 ) (1,320 ) Exclusion of Lucky Friday costs —
(236 ) — (236 )
Cash Cost, Before By-product
Credits(1)
42,557 — 10,728 53,285 Reclamation and other costs 849 — 105 954
Exploration 1,771 — 1,982 473 4,226 Sustaining capital 11,029 — 486
704 12,219 General and administrative 10,327
10,327
AISC, Before By-product Credits(1)
56,206 — 13,301 81,011 By-product credits: Zinc (20,674 ) — (20,674
) Gold (12,229 ) — (4,450 ) (16,679 ) Lead (6,041 ) —
(6,041 ) Total By-product credits (38,944 ) — (4,450 )
(43,394 ) Cash Cost, After By-product Credits $ 3,613 $ —
$ 6,278 $ 9,891 AISC, After By-product Credits
$ 17,262 $ — $ 8,851 $ 37,617 Divided
by ounces produced 1,876 — 522 2,398 Cash Cost, Before By-product
Credits, per Ounce $ 22.67 N/A $ 20.55 $ 22.22 By-product credits
per ounce (20.75 ) N/A (8.53 ) (18.10 ) Cash Cost, After By-product
Credits, per Ounce $ 1.92 N/A $ 12.02 $ 4.12
AISC, Before By-product Credits, per Ounce $ 29.95 N/A $ 25.48 $
33.78 By-product credits per ounce (20.75 ) N/A (8.53 ) (18.10 )
AISC, After By-product Credits, per Ounce $ 9.20 N/A $ 16.95
$ 15.68 In thousands (except per ounce
amounts) Three Months Ended September 30, 2018
Casa Berardi
Nevada Ops(4)
Total Gold Cost of sales and other direct
production costs and depreciation, depletion and amortization $
51,267 $ 19,319 $ 70,586 Depreciation, depletion and amortization
(20,054 ) (9,187 ) (29,241 ) Treatment costs 535 42 577 Change in
product inventory (1,303 ) 7,311 6,008 Reclamation and other costs
(140 ) — (140 )
Cash Cost, Before By-product
Credits(1)
30,305 17,485 47,790 Reclamation and other costs 138 — 138
Exploration 854 3,322 4,176 Sustaining capital 8,244 7,061 15,305
General and administrative — — —
AISC, Before By-product Credits(1)
39,541 27,868 67,409 By-product credits: Silver (142 ) (1,232 )
(1,374 ) Total By-product credits (142 ) (1,232 ) (1,374 ) Cash
Cost, After By-product Credits $ 30,163 $ 16,253 $
46,416 AISC, After By-product Credits $ 39,399 $
26,636 $ 66,035 Divided by ounces produced 44 14 58
Cash Cost, Before By-product Credits, per Ounce $ 689 $ 1,268 $ 827
By-product credits per ounce (3 ) (89 ) (24 ) Cash Cost, After
By-product Credits, per Ounce $ 686 $ 1,179 $ 803
AISC, Before By-product Credits, per Ounce $ 899 $ 2,021 $
1,167 By-product credits per ounce (3 ) (89 ) (24 ) AISC, After
By-product Credits, per Ounce $ 896 $ 1,932 $ 1,143
In thousands (except per ounce amounts)
Three Months Ended September 30, 2018 Total Silver
Total Gold Total Cost of
sales and other direct production costs and depreciation, depletion
and amortization $ 66,487 $ 70,586 $ 137,073 Depreciation,
depletion and amortization (14,223 ) (29,241 ) (43,464 ) Treatment
costs 8,606 577 9,183 Change in product inventory (6,029 ) 6,008
(21 ) Reclamation and other costs (1,320 ) (140 ) (1,460 )
Exclusion of Lucky Friday costs (236 ) (236 )
Cash Cost, Before By-product
Credits(1)
53,285 47,790 101,075 Reclamation and other costs 954 138 1,092
Exploration 4,226 4,176 8,402 Sustaining capital 12,219 15,305
27,524 General and administrative 10,327 — 10,327
AISC, Before By-product Credits(1)
81,011 67,409 148,420 By-product credits: Zinc (20,674 ) (20,674 )
Gold (16,679 ) (16,679 ) Lead (6,041 ) (6,041 ) Silver
(1,374 ) (1,374 ) Total By-product credits (43,394 ) (1,374 )
(44,768 ) Cash Cost, After By-product Credits $ 9,891 $
46,416 $ 56,307 AISC, After By-product Credits $
37,617 $ 66,035 $ 103,652 Divided by ounces
produced 2,398 58 Cash Cost, Before By-product Credits, per Ounce $
22.22 $ 827 By-product credits per ounce (18.10 ) (24 ) Cash Cost,
After By-product Credits, per Ounce $ 4.12 $ 803
AISC, Before By-product Credits, per Ounce $ 33.78 $ 1,167
By-product credits per ounce (18.10 ) (24 ) AISC, After By-product
Credits, per Ounce $ 15.68 $ 1,143 In
thousands (except per ounce amounts) Nine
Months Ended September 30, 2018
Greens
Creek
Lucky
Friday(2)
San
Sebastian
Corporate(3) Total Silver
Cost of sales and other direct production costs and depreciation,
depletion and amortization $ 141,763 $ 5,844 $ 31,177 $ 178,784
Depreciation, depletion and amortization (34,880 ) (803 ) (3,586 )
(39,269 ) Treatment costs 29,136 761 627 30,524 Change in product
inventory 995 (2,182 ) 1,858 671 Reclamation and other costs (2,323
) — (1,374 ) (3,697 ) Exclusion of Lucky Friday costs —
(3,620 ) — (3,620 )
Cash Cost, Before By-product
Credits(1)
134,691 — 28,702 163,393 Reclamation and other costs 2,548 — 314
2,862 Exploration 2,909 — 6,628 1,351 10,888 Sustaining capital
34,694 — 1,119 1,338 37,151 General and administrative
27,849 27,849
AISC, Before By-product Credits(1)
174,842 — 36,763 242,143 By-product credits: Zinc (80,308 ) —
(80,308 ) Gold (43,237 ) (15,505 ) (58,742 ) Lead (24,037 ) —
(24,037 ) Total By-product credits (147,582 ) —
(15,505 ) (163,087 ) Cash Cost, After By-product Credits $
(12,891 ) $ — $ 13,197 $ 306 AISC, After
By-product Credits $ 27,260 $ — $ 21,258 $
79,056 Divided by ounces produced 5,789 — 1,594 7,383 Cash
Cost, Before By-product Credits, per Ounce $ 23.27 N/A $ 18.01 $
22.14 By-product credits per ounce (25.49 ) N/A (9.73 )
(22.09 ) Cash Cost, After By-product Credits, per Ounce $ (2.22 )
N/A $ 8.28 $ 0.05 AISC, Before By-product
Credits, per Ounce $ 30.20 N/A $ 23.07 $ 32.80 By-product credits
per ounce (25.49 ) N/A (9.73 ) (22.09 ) AISC, After
By-product Credits, per Ounce $ 4.71 N/A $ 13.34
$ 10.71 In thousands (except per ounce
amounts) Nine Months Ended September 30, 2018
Casa Berardi
Nevada Ops(4)
Total Gold Cost of sales and other direct
production costs and depreciation, depletion and amortization $
152,150 $ 19,319 $ 171,469 Depreciation, depletion and amortization
(54,879 ) (9,187 ) (64,066 ) Treatment costs 1,628 42 1,670 Change
in product inventory (1,482 ) 7,311 5,829 Reclamation and other
costs (421 ) — (421 )
Cash Cost, Before By-product
Credits(1)
96,996 17,485 114,481 Reclamation and other costs 421 — 421
Exploration 3,374 3,322 6,696 Sustaining capital 27,120 7,061
34,181 General and administrative — — —
AISC, Before By-product Credits(1)
127,911 27,868 155,779 By-product credits: Silver (491 ) (1,232 )
(1,723 ) Total By-product credits (491 ) (1,232 ) (1,723 ) Cash
Cost, After By-product Credits $ 96,505 $ 16,253 $
112,758 AISC, After By-product Credits $ 127,420 $
26,636 $ 154,056 Divided by ounces produced 127 14
141 Cash Cost, Before By-product Credits, per Ounce $ 764 $ 1,268 $
814 By-product credits per ounce (4 ) (89 ) (12 ) Cash Cost, After
By-product Credits, per Ounce $ 760 $ 1,179 $ 802
AISC, Before By-product Credits, per Ounce $ 1,008 $ 2,021 $
1,107 By-product credits per ounce (4 ) (89 ) (12 ) AISC, After
By-product Credits, per Ounce $ 1,004 $ 1,932 $ 1,095
In thousands (except per ounce amounts)
Nine Months Ended September 30, 2018 Total Silver
Total Gold Total Cost of
sales and other direct production costs and depreciation, depletion
and amortization $ 178,784 $ 171,469 $ 350,253 Depreciation,
depletion and amortization (39,269 ) (64,066 ) (103,335 ) Treatment
costs 30,524 1,670 32,194 Change in product inventory 671 5,829
6,500 Reclamation and other costs (3,697 ) (421 ) (4,118 )
Exclusion of Lucky Friday costs (3,620 ) — (3,620 )
Cash Cost, Before By-product
Credits(1)
163,393 114,481 277,874 Reclamation and other costs 2,862 421 3,283
Exploration 10,888 6,696 17,584 Sustaining capital 37,151 34,181
71,332 General and administrative 27,849 — 27,849
AISC, Before By-product Credits(1)
242,143 155,779 397,922 By-product credits: Zinc (80,308 ) (80,308
) Gold (58,742 ) (58,742 ) Lead (24,037 ) (24,037 ) Silver
(1,723 ) (1,723 )
Total By-product credits
(163,087 ) (1,723 ) (164,810 ) Cash Cost, After By-product Credits
$ 306 $ 112,758 $ 113,064 AISC, After
By-product Credits $ 79,056 $ 154,056 $ 233,112
Divided by ounces produced 7,383 141 Cash Cost, Before
By-product Credits, per Ounce $ 22.14 $ 814 By-product credits per
ounce (22.09 ) (12 ) Cash Cost, After By-product Credits, per Ounce
$ 0.05 $ 802 AISC, Before By-product Credits, per
Ounce $ 32.80 $ 1,107 By-product credits per ounce (22.09 ) (12 )
AISC, After By-product Credits, per Ounce $ 10.71 $ 1,095
In thousands (except per ounce amounts)
Three Months Ended September 30, 2017
Greens
Creek
Lucky
Friday(2)
San
Sebastian
Corporate(3) Total Silver
Cost of sales and other direct production costs and depreciation,
depletion and amortization $ 41,927 $ — $ 6,680 $ 48,607
Depreciation, depletion and amortization (12,607 ) — (641 ) (13,248
) Treatment costs 12,067 440 422 12,929 Change in product inventory
7,675 1,960 (627 ) 9,008 Reclamation and other costs (394 ) 18
(494 ) (870 )
Cash Cost, Before By-product
Credits(1)
48,668 2,418 5,340 56,426 Reclamation and other costs 666 38 117
821 Exploration 1,944 (2 ) 1,495 477 3,914 Sustaining capital 8,210
119 402 1,105 9,836 General and administrative
9,529 9,529
AISC, Before By-product Credits(1)
59,488 2,573 7,354 80,526 By-product credits: Zinc (27,046 ) (293 )
(27,339 ) Gold (13,907 ) — (8,088 ) (21,995 ) Lead (8,067 ) (1,102
) (9,169 ) Total By-product credits (49,020 ) (1,395 )
(8,088 ) (58,503 ) Cash Cost, After By-product Credits $ (352 ) $
1,023 $ (2,748 ) $ (2,077 ) AISC, After By-product Credits $
10,468 $ 1,178 $ (734 ) $ 22,023 Divided by
ounces produced 2,344 88 880 3,312 Cash Cost, Before By-product
Credits, per Ounce $ 20.75 $ 27.44 $ 6.07 $ 17.03 By-product
credits per ounce (20.90 ) (15.84 ) (9.19 ) (17.66 ) Cash Cost,
After By-product Credits, per Ounce $ (0.15 ) $ 11.60 $
(3.12 ) $ (0.63 ) AISC, Before By-product Credits, per Ounce $
25.37 $ 29.21 $ 8.36 $ 24.31 By-product credits per ounce (20.90 )
(15.84 ) (9.19 ) (17.66 ) AISC, After By-product Credits, per Ounce
$ 4.47 $ 13.37 $ (0.83 ) $ 6.65
In thousands (except per ounce amounts) Three
Months Ended September 30, 2017 Casa Berardi
Nevada Ops(4)
Total Gold Cost of sales and other direct
production costs and depreciation, depletion and amortization $
49,269 N/A $ 49,269 Depreciation, depletion and amortization
(16,270 ) N/A (16,270 ) Treatment costs 682 N/A 682 Change in
product inventory (288 ) N/A (288 ) Reclamation and other costs
(124 ) N/A (124 )
Cash Cost, Before By-product
Credits(1)
33,269 — 33,269 Reclamation and other costs 123 N/A 123 Exploration
1,161 N/A 1,161 Sustaining capital 13,775 N/A 13,775 General and
administrative — N/A —
AISC, Before By-product Credits(1)
48,328 — 48,328 By-product credits: Silver (161 ) N/A (161 )
Total By-product credits (161 ) N/A (161 ) Cash Cost, After
By-product Credits $ 33,108 N/A $ 33,108 AISC,
After By-product Credits $ 48,167 N/A $ 48,167
Divided by ounces produced 44 N/A 44 Cash Cost, Before By-product
Credits, per Ounce $ 754 N/A $ 754 By-product credits per ounce (4
) N/A (4 ) Cash Cost, After By-product Credits, per Ounce $
750 N/A $ 750 AISC, Before By-product Credits,
per Ounce $ 1,095 N/A $ 1,095 By-product credits per ounce (4 ) N/A
(4 ) AISC, After By-product Credits, per Ounce $ 1,091
N/A $ 1,091 In thousands (except
per ounce amounts) Nine Months Ended September
30, 2017
Greens
Creek
Lucky
Friday(2)
San
Sebastian
Corporate(3) Total Silver
Cost of sales and other direct production costs and depreciation,
depletion and amortization $ 140,241 $ 14,542 $ 18,377 $ 173,160
Depreciation, depletion and amortization (39,442 ) (2,433 ) (2,036
) (43,911 ) Treatment costs 37,621 4,257 906 42,784 Change in
product inventory 5,398 1,811 (192 ) 7,017 Reclamation and other
costs (1,474 ) (163 ) (1,089 ) (2,726 )
Cash Cost, Before By-product
Credits(1)
142,344 18,014 15,966 176,324 Reclamation and other costs 1,999 217
351 2,567 Exploration 3,339 (1 ) 4,984 1,307 9,629 Sustaining
capital 24,895 4,109 2,379 2,275 33,658 General and administrative
29,044 29,044
AISC, Before By-product Credits(1)
172,577 22,339 23,680 251,222 By-product credits: Zinc (72,472 )
(4,353 ) (76,825 ) Gold (42,675 ) (24,032 ) (66,707 ) Lead (22,696
) (8,599 ) (31,295 )
Total By-product credits
(137,843 ) (12,952 ) (24,032 ) (174,827 ) Cash Cost, After
By-product Credits $ 4,501 $ 5,062 $ (8,066 ) $ 1,497
AISC, After By-product Credits $ 34,734 $ 9,387
$ (352 ) $ 76,395 Divided by ounces produced 6,206
769 2,498 9,473 Cash Cost, Before By-product Credits, per Ounce $
22.94 $ 23.42 $ 6.39 $ 18.62 By-product credits per ounce (22.21 )
(16.84 ) (9.62 ) (18.46 ) Cash Cost, After By-product Credits, per
Ounce $ 0.73 $ 6.58 $ (3.23 ) $ 0.16 AISC,
Before By-product Credits, per Ounce $ 27.81 $ 29.05 $ 9.48 $ 26.52
By-product credits per ounce (22.21 ) (16.84 ) (9.62 ) (18.46 )
AISC, After By-product Credits, per Ounce $ 5.60 $ 12.21
$ (0.14 ) $ 8.06 In thousands (except
per ounce amounts) Nine Months Ended September
30, 2017 Casa Berardi (Gold)
Nevada Ops(4)
Total Gold Cost of sales and other direct
production costs and depreciation, depletion and amortization $
138,363 N/A $ 138,363 Depreciation, depletion and amortization
(43,075 ) N/A (43,075 ) Treatment costs 1,774 N/A 1,774 Change in
product inventory 881 N/A 881 Reclamation and other costs (354 )
N/A (354 )
Cash Cost, Before By-product
Credits(1)
97,589 — 97,589 Reclamation and other costs 353 N/A 353 Exploration
3,029 N/A 3,029 Sustaining capital 38,245 N/A 38,245 General and
administrative N/A
AISC, Before By-product Credits(1)
139,216 — 139,216 By-product credits: Silver (450 ) N/A (450
) Total By-product credits (450 ) N/A (450 ) Cash Cost,
After By-product Credits $ 97,139 N/A $ 97,139
AISC, After By-product Credits $ 138,766 N/A $
138,766 Divided by ounces produced 113 N/A 113 Cash Cost,
Before By-product Credits, per Ounce $ 862 N/A $ 862 By-product
credits per ounce (4 ) N/A (4 ) Cash Cost, After By-product
Credits, per Ounce $ 858 N/A $ 858 AISC,
Before By-product Credits, per Ounce $ 1,230 N/A $ 1,230 By-product
credits per ounce (4 ) N/A (4 ) AISC, After By-product
Credits, per Ounce $ 1,226 N/A $ 1,226
In thousands (except per ounce amounts)
Estimate for the Twelve Months Ended December 31, 2018
Greens
Creek
Lucky
Friday(2)
San
Sebastian
Corporate(3)
Total
Silver
Casa
Berardi
(Gold)
Nevada
Ops(4)
Total Gold Cost of sales and other direct production
costs and depreciation, depletion and amortization $ 183,000 $
42,000 $ 225,000 $ 203,000 $ 64,000 $ 267,000 Depreciation,
depletion and amortization (44,000 ) (5,000 ) (49,000 ) (72,000 )
(14,000 ) (86,000 ) Treatment costs 38,000 1,000 39,000 2,000 —
2,000 Change in product inventory 4,000 2,000 6,000 (2,000 ) —
(2,000 ) Reclamation and other costs (1,000 ) (1,000
) (1,000 ) — (1,000 )
Cash Cost, Before By-product
Credits(1)
181,000 39,000 220,000 130,000 50,000 180,000 Reclamation and other
costs 3,000 1,000 4,000 — — — Exploration 3,000 7,000 2,500 12,500
5,000 7,000 12,000 Sustaining capital 52,000 3,000 2,000 57,000
43,000 16,000 59,000 General and administrative
35,000 35,000
AISC, Before By-product Credits(1)
239,000 50,000 328,500 178,000 73,000 251,000 By-product credits:
(193,000 ) (20,000 ) (213,000 ) (600 ) (3,500 ) (4,100 ) Cash Cost,
After By-product Credits $ (12,000 ) $ 19,000 $ 7,000
$ 129,400 $ 46,500 $ 175,900 AISC,
After By-product Credits $ 46,000 $ 30,000 $
115,500 $ 177,400 $ 69,500 $ 246,900
Divided by ounces produced 7,641 2,038 9,679 165 37 202 Cash Cost,
Before By-product Credits, per Ounce $ 23.69 $ 19.14 $ 22.73 $ 788
$ 1,351 $ 891 By-product credits per ounce (25.26 ) (9.81 )
(22.01 ) (4 ) (95 ) (20 ) Cash Cost, After By-product Credits, per
Ounce $ (1.57 ) $ 9.33 $ 0.72 $ 784 $
1,256 $ 871 AISC, Before By-product Credits, per
Ounce $ 31.28 $ 24.53 $ 33.94 $ 1,079 $ 1,973 $ 1,243 By-product
credits per ounce (25.26 ) (9.81 ) (22.01 ) (4 ) (95 ) (20 )
AISC, After By-product Credits, per Ounce $ 6.02 $
14.72 $ 11.93 $ 1,075 $ 1,878 $ 1,223
In thousands (except per ounce amounts)
Original Estimate for Twelve Months Ended December
31, 2018
Greens
Creek
Lucky
Friday(2)
San
Sebastian
Corporate(3)
Total
Silver
Casa
Berardi
(Gold)
Nevada
Ops(4)
Total Gold Cost of sales and other direct production
costs and depreciation, depletion and amortization $ 198,000 $
44,000 $ 242,000 $ 185,000 $ 68,000 $ 253,000 Depreciation,
depletion and amortization (50,000 ) (6,000 ) (56,000 ) (58,000 )
(16,000 ) (74,000 ) Treatment costs 44,000 550 44,550 400 — 400
Change in product inventory — (1,000 ) (1,000 ) — (14,000 ) (14,000
) Reclamation and other costs (2,900 ) (500 ) (3,400 ) (800
) — (800 )
Cash Cost, Before By-product
Credits(1)
189,100 37,050 226,150 126,600 38,000 164,600 Reclamation and other
costs 2,500 240 2,740 450 — 450 Exploration 3,500 4,800 2,500
10,800 5,000 5,000 10,000 Sustaining capital 51,000 3,700 2,000
56,700 45,000 18,000 63,000 General and administrative
35,000 35,000 —
AISC, Before By-product Credits(1)
246,100 45,790 331,390 177,050 61,000 238,050 By-product credits
(193,000 ) (18,000 ) (211,000 ) (800 ) (3,000 ) (3,800 )
Cash Cost, After By-product Credits $ (3,900 ) $ 19,050
$ 15,150 $ 125,800 $ 35,000 $ 160,800
AISC, After By-product Credits $ 53,100 $
27,790 $ 120,390 $ 176,250 $ 58,000 $
234,250 Divided by ounces produced 7,800 2,250 10,050 160 50
210 Cash Cost, Before By-product Credits, per Ounce $ 24.24 $ 16.47
$ 22.50 $ 791 $ 760.00 $ 783.81 By-product credits per ounce (24.74
) (8.00 ) (21.00 ) (5 ) (60 ) (18 ) Cash Cost, After
By-product Credits, per Ounce $ (0.50 ) $ 8.47 $ 1.50
$ 786 $ 700 $ 766 AISC, Before
By-product Credits, per Ounce $ 31.55 $ 20.35 $ 32.97 $ 1,107 $
1,220.00 $ 1,133.57 By-product credits per ounce (24.74 )
(8.00 ) (21.00 ) (5 ) (60 ) (18 ) AISC, After By-product Credits,
per Ounce $ 6.81 $ 12.35 $ 11.97 $
1,102 $ 1,160 $ 1,116 (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 the first nine months of 2017, costs related
to suspension of full production totaling approximately $11.1
million, along with $3.3 million 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. (4) Nevada operations
acquired on July 20, 2018.
Reconciliation of Net (Loss) Income (GAAP) to Adjusted EBITDA
(non-GAAP)
This release refers to the non-GAAP measures of adjusted
earnings before interest, taxes, depreciation and amortization
("Adjusted EBITDA"), which is a measure of our operating
performance. Adjusted EBITDA is calculated as net (loss) income
before the following items: interest expense, income tax provision,
depreciation, depletion, and amortization expense, exploration
expense, pre-development expense, acquisition costs, foreign
exchange gains and losses, gains and losses on derivative
contracts, Lucky Friday suspension-related costs, provisional price
gains and losses, stock-based compensation, unrealized gains on
investments, provisions for closed operations, and interest and
other income (expense). Management believes that, when presented in
conjunction with comparable GAAP measures, Adjusted EBITDA is
useful to investors in evaluating our operating performance. The
following table reconciles net (loss) income to Adjusted
EBITDA:
Dollars are in thousands
Three Months Ended Nine Months
Ended
Sept 30,
2018
Sept 30,
2017
Sept 30,
2018
Sept 30,
2017
Net (loss) income
$ (23,184 ) $ 314
$
(2,870 ) $ 447 Plus: Interest expense, net of amount
capitalized
10,146 9,358
30,019 28,423 Plus/(Less):
Income taxes
(2,679 ) (5,130 )
(1,484 )
(17,564 ) Plus: Depreciation, depletion and amortization
43,464 29,518
103,335 86,986 Plus: Exploration
expense
12,411 7,255
27,609 17,622 Plus:
Pre-development expense
1,195 1,757
3,615 4,061 Plus:
Acquisition costs
6,139 —
9,656 25 Plus: Lucky Friday
suspension-related costs
6,519 4,780
18,337 14,385
Less: Gain on disposition of properties, plants, equipment and
mineral interests
(3,208 ) (4,830 )
(3,374
) (4,924 ) Plus: Stock-based compensation
2,232 1,347
4,636 4,951 Plus: Provision for closed operations and
environmental matters
1,317 1,680
3,957 3,379
Plus/(Less): Foreign exchange loss (gain)
2,212 4,917
(2,856 ) 10,258 Plus/(Less): Losses (gains) on
derivative contracts
(19,460 ) 11,226
(40,271
) 16,548 (Less)/Plus: Provisional price losses/(gains)
640 (1,244 )
3,272 (564 ) Plus/(Less): Unrealized
(gains)/loss on investments
— —
— — (Less)/Plus:
Other
2,589 (417 )
2,791 (945 )
Adjusted EBITDA
$ 40,333 $ 60,531
$
156,372 $ 163,088
Reconciliation of Cash Provided by Operating Activities
(GAAP) to Free Cash Flow (non-GAAP)
This release refers to a non-GAAP measure of free cash flow,
calculated as cash provided by operating activities, less additions
to properties, plants, equipment and mineral interests. Management
believes that, when presented in conjunction with comparable GAAP
measures, free cash flow is useful to investors in evaluating our
operating performance. The following table reconciles cash provided
by operating activities to free cash flow:
Dollars are in thousands
Three Months Ended Nine Months
Ended
Sept 30,
2018
Sept 30,
2017
Sept 30,
2018
Sept 30,
2017
Cash provided by operating activities
$ 28,192 $
28,294
$ 75,210 $ 74,115 Less: Additions to
properties, plants equipment and mineral interests
(39,981
) (24,426 )
(83,285 ) (70,390 )
Free cash flow
$ (11,789 ) $
3,868
$ (8,075 ) $ 3,725
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181108005303/en/
Hecla Mining CompanyMike Westerlund, 800-HECLA91
(800-432-5291)Vice President - Investor
Relationshmc-info@hecla-mining.comwww.hecla-mining.com
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