Hecla Reports Strong Production and Cash Generation
September 20 2020 - 9:00AM
Business Wire
Increases 2020 Production Estimates, Repays
Revolving Credit Facility
Hecla Mining Company (NYSE:HL) today announced preliminary
production results, anticipated cash position at the end of the
third quarter, repayment of the revolving credit facility and
increased production estimates for the year.¹
HIGHLIGHTS
- Estimated silver production between 3.2 million and 3.4 million
ounces
- Estimated gold production between 41,000 and 43,000
ounces.
- Revolving credit facility repaid in full during the
quarter.
- Cash and Cash Equivalent position anticipated to exceed $90
million.
“We are very pleased with third quarter operational performance
particularly as the mines continue safe practices to manage
COVID-19,” said Phillips S. Baker, Jr., President and CEO. “Lucky
Friday’s ramp up is as planned so this year’s production should
double last year and is set up to potentially double again next
year. The higher-than-expected silver grades at Greens Creek have
driven silver production higher for the quarter and the annual
estimate. Gold production was lower at Casa during the quarter
where continued major planned maintenance activities in the mill
reduced the processing days.”
Baker continued, “Our strong production for the quarter is
expected to translate into robust cash flows in excess of $20
million even after repaying our revolver in full and the interest
payments on the bonds. We are close to realizing our financial goal
of having in excess of $100 million of cash and cash equivalents on
the balance sheet. Finally, if our realized silver price is above
$25 for September, we expect the silver-linked dividend to be paid
pursuant to our enhanced dividend policy.”
Performance Comparison and Updated
Outlook
Silver (Moz)
Gold (Koz)
Greens Creek
Lucky Friday
San Sebastian
Total
Greens Creek
Casa Berardi
Nevada
San Sebastian
Total
Estimated First 9 months 2020
8.0
1.1
0.8
9.9
37
86
32
6
161
2020 Outlook
8.9-9.3
1.4-1.8
0.6-0.8
10.9-1198
46-48
119-124
24-29
6-7
195-208
2020 Updated Outlook
10-10.3
1.6-1.8
0.8-0.9
12.4-13.0
47-48
114-124
32
6
199-210
(1) See cautionary statement regarding
estimated results and forward-looking statements at the end of this
release.
Greens Creek’s estimated nine months production has increased
due to higher silver grades. The fourth quarter assumes planned
grades. Lucky Friday is ramping up as expected so the lower end of
the production range has been raised. San Sebastian mining is
expected to be completed in the third quarter with processing
concluding in the fourth quarter. Casa Berardi’s nine-month
estimated production is low because of major planned mill
maintenance activities but production in the fourth quarter should
increase due to expected high-grade underground production from the
East Mine. Nevada exceeded expectations as the developed stopes
were mined out. For the remainder of the year, ore is being
stockpiled for third-party processing expected in the fourth
quarter. Gold production might not be realized until first quarter
of 2021. Hecla’s per ounce cost estimates are unchanged at this
time.
In September, the Company repaid $50 million on its revolving
credit facility and has no remaining balance outstanding. During
the third quarter, the Company received three of the four
installments of C$12.5 million (US$9.2 million) each of
Investissement Quebec’s C$50 million (US$36.8 million) senior
secured note proceeds. The fourth installment is expected to be
received in the fourth quarter. The Company’s cash and cash
equivalents as of September 30, 2020, are estimated to exceed $90
million with the increase in cash for the third quarter expected to
exceed $60 million.
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 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 Estimated Results
In this news release we include certain estimated preliminary
third quarter 2020 operating and financial results, including
metals production and cash position. Each of these amounts is
preliminary and reflects only the Company’s estimated third quarter
2020 results as of the date of this news release, based on
information available as of September 20, 2020, and should not be
regarded as a representation by the Company as to its actual
results for such quarter. Actual reported third quarter 2020
results are subject to the Company’s financial closing procedures,
completion of the financial statements, and management’s final
review as well as review by the Company’s independent registered
public accounting firm and may vary significantly from the
preliminary estimates due to a number of factors, including,
without limitation, additional or revised information, changes in
accounting standards or policies or in how those standards are
applied, and certain risks the Company faces, including, but not
limited to those described under the heading “Risk Factors” in the
Company’s Annual Report on Form 10-K for the year ended December
31, 2019 and in the Company’s Quarterly Report on Form 10-Q for the
quarter ended March 31, 2020. You are cautioned not to place undue
reliance on these preliminary estimates of our third quarter 2020
operating and financial results.
Cautionary Statements Regarding Forward Looking
Statements
Statements made or information provided in this news release
that are not historical facts are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995 and "forward-looking information" within the meaning of
Canadian securities laws. Words such as “may”, “will”, “should”,
“expects”, “intends”, “projects”, “believes”, “estimates”,
“targets”, “anticipates” and similar expressions are used to
identify these forward-looking statements. Forward-looking
statements in this news release may include, without limitations,
(i) estimates of silver production for the third quarter of 2020 on
a consolidated basis and at each of the Greens Creek, Lucky Friday,
San Sebastian, and Nevada Operations mines; (ii) estimates of gold
production for the third quarter of 2020 on a consolidated basis
and at each of Casa Berardi, Greens Creek and Nevada operations;
(iii) estimates of lead and zinc production for the third quarter
of 2020; (iv) quarter-end cash and cash-equivalent position which
is dependent on the Company receiving cash receipts from sales of
metals at its operations prior to September 30, which is expected,
and zero balance on the revolving credit facility; (v) Lucky Friday
expected to increase production and 2020’s total production
expected to be twice that of 2019, and 2020 could also
significantly increase; (vi) production from bulk sample in Nevada
expected in fourth quarter; (vii) expected increased production at
Casa Berardi due to expected high-grade production; (viii) cash
flow generation for the quarter is expected to be in excess of $30
million which is dependent on the Company receiving cash receipts
from sales of metals at its operations prior to September 30, which
is expected; and (ix) expected payment of the silver-linked
dividend in the event the Company’s realized silver price per ounce
for the third quarter is above $25. The material factors or
assumptions used to develop such forward-looking statements or
forward-looking information include that 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, to which the Company’s operations
are subject.
Forward-looking statements involve a number of risks and
uncertainties that could cause actual results to differ materially
from those projected, anticipated, expected, or implied. These
risks and uncertainties include, but are not limited to, metals
price volatility, volatility of metals production and costs,
litigation, regulatory and environmental risks, operating risks,
project development risks, political risks, labor issues, ability
to raise financing and exploration risks and results. Refer to the
Company's Form 10-K and 10-Q reports for a more detailed discussion
of factors that may impact expected future results. The Company
undertakes no obligation and has no intention of updating
forward-looking statements other than as may be required by
law.
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version on businesswire.com: https://www.businesswire.com/news/home/20200920005050/en/
Russell Lawlar Treasurer
Jeanne DuPont Corporate Communications Coordinator
800-HECLA91 (800-432-5291) Investor Relations Email:
hmc-info@hecla-mining.com Website: www.hecla-mining.com
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