Hecla reports record annual revenue
Hecla Mining Company (NYSE:HL) today announced fourth quarter
and full year 2020 financial and operating results.
HIGHLIGHTS
- Fourth quarter sales of $188.9 million; cash flow from
operations of $64.9 million; free cash flow $28.3 million1 net
income of $0.8 million; adjusted net income applicable to common
shareholders of $13.0 million, or $0.02 per share2; and adjusted
EBITDA of $55.8 million.3
- 2020 silver production of 13.5 million ounces, up 7% and gold
production of 208,962 ounces, down 23%, from 2019, which was
Hecla's highest annual gold production.
- 2020 sales of $691.9 million (the highest in the Company's
history); cash flow from operations of $180.8 million; free cash
flow of $89.8 million1; adjusted net income applicable to common
shareholders of $23.1 million, or $0.04 per share2; net loss of
$16.8 million; and adjusted EBITDA of $224.3 million.3
- Third highest silver and gold reserves in Company's 130-year
history despite significant interruptions to 2020 exploration
program due to COVID-19.
- Exploration discoveries at Midas, Casa Berardi, San Sebastian,
Heva Hosco, and Kinskuch expect to be further drilled in 2021.
- Net debt reduction of approximately $81 million, or 17%, from
March 31, 2020.
- Year-end cash position of $130 million, an increase of $67
million from 2019 with the credit facility undrawn.
- All-Injury Frequency Rate (AIFR) of 1.22 for 2020, lowest in
the Company's history and a reduction of 24% over 2019.
- Lucky Friday returned to full production levels in the fourth
quarter of 2020.
- Production guidance increases projected silver production over
2020 production.
"The COVID pandemic provided significant challenges to Hecla and
the mining industry; however, due to our people and the
jurisdictions we operate in, Hecla exceeded the high end of our
pre-COVID silver guidance by 1.4 million ounces," said Phillips S.
Baker, Jr., President and CEO. "We saw modest disruptions in Quebec
and Mexico; however, these did not materially impact our business.
During the year we refinanced our long-term debt now due in 2028,
and through solid free cash flow generation, added cash to the
balance sheet, reduced our net debt, and increased dividends."
Baker continued, "As we look to 2021, we see three significant
value drivers. First, with Lucky Friday running at full production,
positive results from the work at Casa Berardi, and the continued
consistency of Greens Creek, we expect to grow silver production
and generate significant free cash flow. Silver production from our
United States silver mines is expected to go from 8 million ounces
in 2018 to almost 15 million ounces by 2023, further increasing
Hecla’s position as the most significant US silver producer.”
“Second, we start the year with the 3rd highest reserves in our
history despite disruptions to our planned exploration and
definition drilling programs due to COVID‑19, and we expect reserve
growth in 2021 from a normal drilling program. Finally, Hecla’s
2021 exploration program is following up on high-grade intercepts
that have the potential to expand existing or develop new
high-quality deposits in some of the world’s best mining
jurisdictions. Examples of this are Midas’ Green Racer Sinter
target where we have made a multi-ounce gold discovery in a never
before drilled target and at San Sebastian’s El Bronco vein where
we are seeing high-grade over significant widths," Baker said.
FINANCIAL OVERVIEW
Fourth Quarter Ended
Twelve Months Ended
HIGHLIGHTS
December 31, 2020
December 31, 2019
December 31, 2020
December 31, 2019
FINANCIAL DATA (000s except per
share)
Sales
$
188,890
$
224,945
$
691,873
$
673,266
Gross profit (loss)
$
46,764
$
25,318
$
145,703
$
23,399
Income (Loss) applicable to common
stockholders
$
657
$
(8,114
)
$
(17,342
)
$
(100,109
)
Basic and diluted loss per common
share
$
—
$
(0.02
)
$
(0.03
)
$
(0.20
)
Cash provided by operating activities
$
64,901
$
57,257
$
180,793
$
120,866
Items impacting income (loss) applicable to common shareholders
for the 2020 periods compared to 2019 include the following:
- Gross profit for the fourth quarter was higher by $21.4 million
due primarily to higher metal prices, Casa Berardi's higher-grade
underground stopes and Lucky Friday's return to full
production.
- Full-year gross profit was $122.3 million higher, principally
due to lower costs and depreciation at Nevada, higher quantities of
silver, lead and zinc sold and higher realized silver and gold
prices.
- Exploration and pre-development expense was $8.5 million for
the fourth quarter and $18.3 million for 2020, compared to $3.0
million and $19.1 million, respectively, in 2019. The fourth
quarter increase was enabled by cash flow generation at our
operating mines with the increase primarily at Midas and San
Sebastian.
- Ramp-up and suspension costs for the fourth quarter of $0.8
million and $24.9 million for 2020, compared to $3.3 million and
$12.1 million, respectively, for the fourth quarter and full-year
of 2019. The full-year 2020 costs were higher primarily due to 1)
ramp-up of Lucky Friday prior to return to full production in the
fourth quarter, 2) suspension costs in Nevada, and 3) temporary
suspension costs at Casa Berardi and San Sebastian in response to
COVID-19.
- Losses on metal derivative contracts for the fourth quarter and
2020 of $9.3 million and $22.1 million, respectively, compared to
losses of $1.3 million and $4.0 million in the fourth quarter and
2019, respectively. During 2019, the Company settled in-the-money
contracts prior to their maturity date, for cash proceeds of
approximately $6.7 million, with no such early settlements in
2020.
- Foreign exchange losses of $5.8 million and $4.6 million were
recognized in the fourth quarter and 2020, respectively, compared
to losses of $1.5 million and $8.2 million, respectively, in 2019.
The losses were primarily due to changes in the Canadian dollar’s
value relative to the U.S. dollar.
- Interest expense was $10.7 million in the fourth quarter and
$49.6 million for the full year of 2020 compared to $14.7 million
and $48.4 million, respectively, for 2019. The interest expense in
2020 was primarily related to our Senior Notes.
- Income tax benefit for the fourth quarter of $1.1 million and a
small provision for the full year of 2020, compared to benefits of
$4.1 million and $24.1 million, respectively, for 2019.
Cash provided by operating activities for the fourth quarter and
2020 of $64.9 million and $180.8 million, was $7.6 million and
$59.9 million higher, respectively, compared to the prior year
periods. The increase in the fourth quarter of 2020 was primarily
due to lower spending in Nevada and higher sales. Quarterly
increase would have been higher except ore in Nevada was stockpiled
for the bulk sample. The increase for the full year of 2020 was due
to higher prices, lower Nevada spending and the Lucky Friday
ramp-up.
Adjusted EBITDA3 of $224.3 million in 2020, $51.0 million more
than 2019. The increase in 2020 was primarily due to higher sales
and lower spending in Nevada.
Fourth quarter capital expenditures totaled $40.3 million,
including $10.5 million at Greens Creek, $16.4 million at Casa
Berardi, and $11.1 million at Lucky Friday. Capital expenditures
for the year 2020 totaled $99.9 million, compared to $128.1 million
in 2019.
Metals Prices
Fourth Quarter Ended
Twelve Months Ended
December 31, 2020
December 31, 2019
December 31, 2020
December 31, 2019
AVERAGE METAL PRICES
Silver -
London PM Fix ($/oz)
$
24.39
$
17.30
$
20.51
$
16.20
Realized price per ounce
$
25.16
$
17.47
$
21.15
$
16.65
Gold -
London PM Fix ($/oz)
$
1,873
$
1,480
$
1,770
$
1,392
Realized price per ounce
$
1,803
$
1,488
$
1,757
$
1,413
Lead -
LME Cash ($/pound)
$
0.87
$
0.92
$
0.83
$
0.91
Realized price per pound
$
0.90
$
0.91
$
0.84
$
0.91
Zinc -
LME Cash ($/pound)
$
1.19
$
1.08
$
1.03
$
1.16
Realized price per pound
$
1.27
$
1.10
$
1.03
$
1.14
*Realized prices are calculated by
dividing gross revenues for each metal (which include the price
adjustments and gains and losses on the forward contracts discussed
above) by the payable quantities of each metal included in products
sold during the period.
Base Metals Forward Sales Contracts
The following table summarizes the quantities of base metals
committed under financially settled forward sales contracts, other
than provisional hedges (which address changes in prices between
shipment and settlement with customers), at December 31, 2020:
Pounds Under Contract (in
thousands)
Average Price per
Pound
Zinc
Lead
Zinc
Lead
Contracts on forecasted sales
2021 settlements
41,557
30,876
$
1.17
$
0.88
2022 settlements
18,519
—
$
1.28
$
—
The contracts represent 33% of the forecasted payable zinc
production for the next two years at an average price of $1.21 per
pound, and 39% of the forecasted payable lead production for the
next year at an average price of $0.88 per pound.
Foreign Currency Forward Purchase Contracts
The following table summarizes the Canadian dollars the Company
has committed to purchase under foreign exchange forward contracts
at December 31, 2020:
Currency Under Contract (in
thousands of CAD)
Average Exchange Rate
CAD
CAD/USD
2021 settlements
129,989
1.32
2022 settlements
84,754
1.31
2023 settlements
52,565
1.32
2024 settlements
26,446
1.33
OPERATIONS OVERVIEW
Overview
The following table provides the production summary on a
consolidated basis for the fourth quarter and twelve months ended
December 31, 2020 and 2019:
Fourth Quarter Ended
Twelve Months Ended
December 31, 2020
December 31, 2019
December 31, 2020
December 31, 2019
PRODUCTION SUMMARY
Silver -
Ounces produced
3,352,336
3,411,988
13,542,957
12,605,234
Payable ounces sold
3,227,951
3,999,013
12,305,917
11,548,373
Gold -
Ounces produced
49,014
74,773
208,962
272,873
Payable ounces sold
43,144
85,237
202,694
275,060
Lead -
Tons produced
9,507
6,804
34,127
24,210
Payable tons sold
9,160
7,118
29,108
19,746
Zinc -
Tons produced
14,413
16,185
63,112
58,857
Payable tons sold
11,632
12,147
46,349
39,381
The following tables provide a summary of the final production,
cost of sales and other direct production costs and depreciation,
depletion and amortization (referred to herein as “cost of sales”),
cash cost, after by-product credits (“cash cost”), per silver or
gold ounce, and All in Sustaining Cost, after by-product credits
(“AISC”), per silver and gold ounce, for the fourth quarter and
twelve months ended December 31, 2020:
Fourth Quarter Ended
Total
Greens Creek
Lucky Friday
San Sebastian
Casa Berardi
Nevada Ops
December 31, 2020
Silver
Gold
Silver
Gold
Silver
Silver
Gold
Gold
Silver
Gold
Silver
Production (ounces)
3,352,336
49,014
2,330,664
10,276
830,200
182,614
1,159
37,579
8,858
—
—
Increase/(decrease) over 2019
(2)%
(34)%
(15)%
(33)%
283%
(57)%
(70)%
8%
(16)%
N/A
N/A
Cost of sales (000)
$85,967
$56,159
$59,215
N/A
$20,919
$5,833
N/A
$55,706
N/A
$453
N/A
Increase/(decrease) over 2019
(6)%
(48)%
(17)%
N/A
282%
(59)%
N/A
(8)%
N/A
(99)%
N/A
Cash costs per silver or gold ounce 4
$7.38
$1,019
$7.21
N/A
$9.34
$0.65
N/A
$1,019
N/A
$—
N/A
Increase/(decrease) over 2019
$3.80
$26
$4.45
N/A
N/A
$(8.24)
N/A
$(18)
N/A
N/A
N/A
AISC per silver or gold ounce 5
$15.35
$1,330
$12.05
N/A
$18.22
$1.07
N/A
$1,330
N/A
$—
N/A
Increase/(decrease) over 2019
$4.04
$143
$4.19
N/A
N/A
$(10.71)
N/A
$52
N/A
N/A
N/A
Twelve Months Ended
Total
Greens Creek
Lucky Friday
San Sebastian
Casa Berardi
Nevada Ops
December 31, 2020
Silver
Gold
Silver
Gold
Silver
Silver
Gold
Gold
Silver
Gold
Silver
Production (ounces)
13,542,957
208,963
10,494,726
48,491
2,031,874
954,772
7,223
121,493
24,142
31,756
37,443
Increase/(decrease) over 2019
7%
(23)%
6%
(14)%
221%
(49)%
(54)%
(10)%
(23)%
N/A
N/A
Cost of sales (000)
$297,935
$248,235
$217,125
N/A
$56,706
$24,104
N/A
$203,434
N/A
$44,801
N/A
Increase/(decrease) over 2019
7%
(33)%
3%
N/A
241%
(52)%
N/A
(7)%
N/A
N/A
N/A
Cash costs per silver or gold ounce 4
$5.70
$1,045
$5.49
N/A
N/A
$4.92
N/A
$1,131
N/A
$716
N/A
Increase/(decrease) over 2019
$2.77
$(21)
$3.52
N/A
N/A
$(3.10)
N/A
$80
N/A
$(380)
N/A
AISC per silver or gold ounce 5
$11.89
$1,302
$8.57
N/A
N/A
$5.68
N/A
$1,436
N/A
$787
N/A
Increase/(decrease) over 2019
$1.76
$(109)
$2.58
N/A
N/A
$(6.42)
N/A
$82
N/A
$(740)
N/A
Greens Creek Mine - Alaska
The increase in silver production for the full year resulted
from higher grades. The mill operated at an average of 2,236 tons
per day (tpd) for the full year. Fourth quarter production was
affected by a significant weather event in December when southeast
Alaska was impacted by high winds and heavy rains that caused major
damage in the area and communities.
The higher cost of sales in 2020 were due to higher sales
volumes. The increase in per silver ounce cash costs and AISC was
primarily due to higher concentrate treatment costs and lower
by-product credits, on a per-ounce basis, with these items
partially offset by lower capital spending for AISC.
For the full year of 2020, Greens Creek generated cash provided
by operating activities of approximately $182.6 million and spent
$23.0 million on additions to properties, plants and equipment,
resulting in free cash flow of $159.6 million.1
Proven and Probable silver reserves decreased primarily due to
COVID-19 limiting drilling to one-third of the amount drilled in
2019, changes to the mine plan, and less favorable smelter terms.
This decline compares to average additions of nearly 8 million
ounces per year for the past four years. Measured and Indicated
resource increased due to reclassification of reserves and Inferred
resource. Measured and Indicated Mineral Resources, inclusive of
Mineral Reserves is down only 3% from 2019.
Casa Berardi - Quebec
Annual gold production decreased by 10%, compared to 2019,
primarily due to the Government of Quebec’s COVID‑19 three-week
suspension order and the third quarter planned mill repairs. Fourth
quarter production increased 8% over the prior year period due to
more tons milled and higher grades. The mill operated at an average
of 4,129 tpd in the fourth quarter 2020 and 3,699 tpd for the
year.
Lower quarterly and annual cost of sales were due to stripping
the East Mine Crown Pillar Pit Extension (XCMP) in 2019 partially
offset by increased quantities of waste and ore extracted from the
pit and higher haulage costs due to deepening of the pit. However,
milling and administrative costs were higher due to costs for
pre-crushing of ore to allow for increased throughput, and higher
costs for mill improvements, maintenance and reagents. These
factors impacted mining and milling costs, along with lower gold
production, resulting in increased cash costs and AISC, after
by-product credits.
For the full year of 2020, Casa Berardi generated cash provided
by operating activities of approximately $68.5 million and spent
$40.9 million on additions to properties, plants and equipment,
resulting in free cash flow of $27.6 million.1
Proven and Probable gold reserves decreased approximately 10% to
1.54 million ounces. Most of the decreases were due to mining
depletion and engineering changes. The 2020 drilling program at
Casa Berardi was also impacted by COVID. Despite the drilling
delays, approximately 85 thousand ounces were added to reserve by
drilling in 2020.
Measured and Indicated gold resources increased 19% to 1.25
million ounces given exploration additions and some
reclassification from reserves given engineering changes. Measured
and Indicated Mineral Resources, inclusive of Mineral Reserves,
increased 1% over last year.
Lucky Friday Mine - Idaho
At the Lucky Friday Mine, 2.0 million and 0.8 million ounces of
silver were produced in 2020 and the fourth quarter, respectively.
Lucky Friday returned to full production in the fourth quarter.
The cost of sales for the fourth quarter was $20.9 million, and
the cash cost per silver ounce4 was $9.34. AISC5 was $18.22 per
silver ounce.
Proven and Probable reserves declined 4% due primarily to mining
depletion; the current mine plan is unchanged at 16 years (2036).
Measured and Indicated resources for silver and lead increased
5%.
San Sebastian - Mexico
At the San Sebastian Mine, 1.0 million ounces of silver and
7,223 ounces of gold were produced. For the fourth quarter, 0.2
million ounces of silver and 1,159 ounces of gold were produced.
Mining was completed in the third quarter and milling completed in
the fourth quarter of 2020. The mill operated at an average of 474
tpd for the year when in production.
The lower cost of sales and silver per ounce cash costs4 was
primarily due to lower mining costs, higher by-product, partially
offset by lower silver production, and for AISC, lower capital and
exploration spending.
For the full year of 2020, San Sebastian generated cash provided
by operating activities of approximately $14.4 million and spent
$0.6 million on additions to properties, plants and equipment,
resulting in free cash flow of $13.8 million.1
The Company continues to explore this highly prospective land
package and will evaluate further mining based on exploration
results.
Nevada Operations
During the second half of 2020, all ore mined at Nevada
Operations was stockpiled, with no ore milled and no production
reported during the period. Mining of refractory ore at Fire Creek
in areas with existing development was completed in the fourth
quarter with most of the material shipped to a third-party
processor by February 2021. The bulk test demonstrated that larger
scale, more productive mining methods could be applied successfully
to this material. Ground conditions were as good or better than
expected and water in the test area was readily managed. The bulk
test refractory ore is being processed by a third party through a
tolling agreement. While the processing is not yet complete, the
recovery information to date follows the grade-recovery curve
established through bench testing. Metal prices increased
significantly since the tolling agreement was signed, and it is no
longer attractive for the third party to displace their own feed to
toll. Discussions are underway with another processor with surplus
capacity. Fire Creek is expected to be placed on care and
maintenance in the second quarter of 2021.
SILVER AND GOLD RESERVE SUMMARY
Proven and Probable silver and gold reserves dropped 11% for the
year to 188 million ounces of silver and 2.4 million ounces of
gold. Lead and zinc reserves dropped 9% and 12% to 740 thousand
tons of lead and 886 thousand tons of zinc. Due to the Company's
focus on essential mining during implemented COVID-19 protocols,
the 2020 exploration programs were disrupted company-wide with
approximately one-third less drilling achieved at Greens Creek than
in 2019 coupled with significant third-party assay laboratory
delays.
Measured and Indicated silver ounces increased 5% to a record
228 million ounces, an increase of 10.3 million ounces over 2019
with increases due to limited drilling and reclassification of
reserve at Greens Creek and remodeling at Lucky Friday. Measured
and Indicated gold ounces decreased 37% to 3.7 million ounces, a
reduction of 2.1 million ounces, due to reclassification of
resources in Nevada and the Heva Hosco project, respectively.
Measured and Indicated base metals increased overall, with lead
increasing 5% for a total of 921 thousand tons and zinc increasing
2% at 1,132 thousand tons.
Inferred silver resources are essentially unchanged from last
year with a slight drop of 1% to 454 million ounces. Inferred gold
resources increased 12% to 5.5 million ounces due to
reclassification of higher resource classes in Nevada and the
increased Inferred resource overall at the Heva Hosco Project.
Inferred base metal resources are down slightly with a 3% change in
lead to 467.6 thousand tons and a 5% change in zinc to 425.1
thousand tons. Base metal changes are mostly due to small losses
and reclassification to higher classes at Greens Creek and
remodeling of the Hugh Zone polymetallic zone at San Sebastian.
Please refer to the reserves and resources table at the end of
this news release for a complete breakdown of the Company's
reserves and resources.
EXPLORATION AND PRE-DEVELOPMENT
Exploration
Fourth quarter exploration (including corporate development)
expenses were $8.0 million, over half of the full year expenditures
and an increase of $5.6 million compared to the fourth quarter 2019
primarily due to increased activity and focus on Midas, Casa
Berardi, and San Sebastian.
During the quarter, there were two new discoveries: Green Racer
Sinter at Midas and the 160 Zone eastern extension at Casa
Berardi.
At Midas, four core rigs intersected mineralization in five of
seven targets. At the Green Racer Sinter, a target with no previous
drilling located two miles east of the main mine, detailed surface
mapping identified an outcrop of spicular geyserite sinter with
anomalous gold. The deeper holes are encountering the same
favorable host rocks as those of the historic Midas mine where
mineralization had an average grade of 0.81 oz/ton gold and 11.3
oz/ton silver over an average width of 4.0 feet. The following
table shows the strength of mineralization in three recent holes
(the surface is at an elevation of 5,434 feet):
Drillhole
Elevation (Feet)
Drilled Width (Feet)
Gold Grade (oz/ton)
Silver Grade (oz/ton)
DMC-371
4901
1.6
1.12
16.9
DMC-374
4537
4.3
0.34
7.8
DMC-390
4088
4.5
3.26
14.3
At Casa Berardi, a new discovery was made in the 160 Zone 500
feet east of the current resource blocks and the zone open in all
directions. The discovery drillhole intersected 0.32 oz/ton gold
over 9.5 feet estimated true width including 1.16 oz/ton gold over
2.0 feet estimated true width.
San Sebastian exploration focused on the El Tigre and El Bronco
veins discovered under thick soil cover this year. So far, the
veins are strong structures that in places have over 28 feet of
true thickness, almost a mile of strike length down to 1,000 feet
below the surface and are open. The best results to date include
44.5 oz/ton silver and 0.22 oz/ton gold over 9.5 feet estimated
true width in the El Bronco vein and 16.2 oz/ton silver and 0.09
oz/ton gold over 3.5 feet estimated true width in the El Tigre
vein.
Please refer to the assay results tables at the end of this news
release for more complete drill assay highlights.
2021 Exploration Program
Exploration expenditures for 2021 are estimated to be $30
million. Greens Creek and Casa Berardi programs should each be
about 15% of the total expenditures with surface programs in
addition to their normal underground exploration.
San Sebastian should also represent 15% of the exploration
spend, building on the developing resources of the El Bronco, El
Tigre, and El Toro veins.
Nevada exploration is targeted at 25% of the total, with the
majority spent at Midas. At Hollister, exploration of the Hatter
Graben is expected to be advanced by further developing the decline
in order to test a portion of the Hatter Graben resource and
explore additional Hatter Graben veins further to the south. At
Fire Creek and Aurora, any drilling programs will occur later in
the year following further target definition.
Almost 10% of the exploration budget is targeted for Kinskuch in
an effort to expand the 2018 discoveries that established a strike
length of 2.2 miles of silver, zinc, and lead mineralization
offsetting drillhole intercepts such as 9.3 oz/ton silver, 6.5%
zinc, and 2.3% lead over 8.2 feet that is open in all directions.
The Heva Hosco program will spend about 5% of the total with the
majority of the drilling offsetting a 2018 intercept in a
high-grade quartz vein grading 0.84 oz/ton gold over 7.6 feet
(drilled length).
Pre-development - Montanore/Rock Creek
Pre-development spending was $0.6 million in the fourth quarter
and $2.4 million for the full year 2020, principally to advance the
permitting at Montanore/Rock Creek.
At Montanore, the Kootenai National Forest’s (KNF) final
Supplemental Environment Impact Study (SEIS) and Record of Decision
(ROD) are expected later in 2021. At Rock Creek, the KNF partially
approved the Plan of Operation to reflect the ROD and the Montana
Department of Environmental Quality approved modifications to the
existing Exploration License to match the ROD. Decisions on
litigation challenging decisions of the US Fish and Wildlife
Service and the KNF are expected later in the year.
2021 ESTIMATES6
2021 Production Outlook
Silver Production
(Moz)
Gold Production
(Koz)
Silver Equivalent
(Moz)
Gold Equivalent
(Koz)
Greens Creek *
9.5 - 10.2
40 - 43
20.5 - 21.5
227 - 237
Lucky Friday *
3.4 - 3.8
N/A
6.2 – 6.4
67 - 70
Casa Berardi
N/A
125 - 128
11.5 - 11.7
125 - 128
Nevada Operations
N/A
20 - 22
1.8 - 2.0
20 - 22
2021 Total
12.9 - 14.0
185 - 193
40.0 - 41.6
439 – 457
2022 Total
13.7 - 14.5
173 - 181
41.0 - 42.5
448 – 465
2023 Total
14.2 - 15.0
177 - 186
42.5 - 44.5
467 - 485
* Equivalent ounces include Lead and
Zinc production
2021 Cost Outlook
Costs of Sales
(million)
Cash cost, after
by-product credits, per silver/gold ounce4
AISC, after by-product
credits, per produced silver/gold ounce5
Greens Creek
$220
$5.75 - $6.25
$10.25 - $11.00
Lucky Friday
$91
$7.75 - $9.75
$13.75 - $16.50
Total Silver
$311
$6.25 - $7.25
$13.50 - $15.00
Casa Berardi
$176
$900 - $975
$1,185 - $1,275
Nevada Operations
$41
$1,300 - $1,425
$1,385 - $1,525
Total Gold
$217
$950 - $1,050
$1,200 - $1,300
2021 Capital and Exploration
Outlook
Capital expenditures (excluding
capitalized interest)
$110 million
Exploration expenditures (includes
Corporate Development)
$30 million
Pre-development expenditures
$4.5 million
DIVIDENDS
Common
On February 16, 2021, the Board of Directors declared a
quarterly cash dividend of $0.00875 per share of common stock,
consisting of $0.00375 per share for the minimum dividend component
and $0.005 per share for the silver-linked dividend component. The
common dividend payable on or about March 19, 2021, to stockholders
of record on March 8, 2021. The realized silver price was $25.16 in
the fourth quarter satisfying the criterion for the silver-linked
dividend component of the Company's dividend policy.
Preferred
The Board of Directors also declared a quarterly cash dividend
of $0.875 per share of preferred stock, payable on or about April
1, 2021, to stockholders of record on March 15, 2021.
INVESTOR VIRTUAL OUTREACH
Conference Call Information
A conference call and webcast will be held today, at 9:00 a.m.
Eastern Time to discuss fourth quarter and year-end 2020 financial
results. You may join the conference call by dialing toll-free
1-833-350-1380 or for international by dialing 1-647-689-6934. The
Conference ID is 7412488. Please dial-in and provide the Conference
ID number at least 10 minutes prior to the start time to join the
call and mitigate any hold times.
Hecla’s live webcast can be accessed at www.hecla-mining.com
under Investors/Events & Webcasts
(https://ir.hecla-mining.com/news-events/events-webcasts/default.aspx).
The webcast will also be archived on the site.
One-on-One Calls
Hecla will be holding a Virtual Investor Event on Friday,
February 19, from 11:30 a.m. to 1:30 p.m. Eastern Time inviting
shareholders, investors, and other interested parties to schedule a
personal, 30-minute virtual meeting (video or telephone) with a
member of senior management. Click on the link below to schedule a
call (You can also copy and paste the link into your web browser.).
If you are unable to book a time, either due to high demand or for
other reasons, please reach out to Jeanne DuPont at
jdupont@hecla-mining.com or at 208-769-4177.
- Operations call with Lauren
Roberts, SR VP and COO and senior mine management:
https://calendly.com/2020-q4-vie/operations
- Finance call with Lindsay
Hall, SR VP and CFO and Russell Lawlar, Treasurer:
https://calendly.com/2020-q4-vie/finance
- Call with Phil Baker,
President and CEO: https://calendly.com/2020-q4-vie/ceo
Planned Videocasts
Hecla will be conducting a series of videocasts commencing later
in 2021 that will provide additional information on the Company,
silver and the industry. These will be available on the Company’s
website at www.hecla-mining.com and various social media
platforms.
ABOUT HECLA
Founded in 1891, Hecla Mining Company (NYSE:HL) is a leading
low-cost U.S. silver producer with operating mines in Alaska and
Idaho and is a growing gold producer with an operating mine Quebec,
Canada. 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, and an exploration office and
investments in early-stage silver exploration projects in
Canada.
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
United States generally accepted accounting principles (GAAP).
These measures should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
GAAP. The non-GAAP financial measures cited in this release and
listed below are reconciled to their most comparable GAAP measure
at the end of this release.
(1) Free cash flow is a non-GAAP measure calculated as cash
provided by operating activities less additions to properties,
plants and equipment.
(2) Adjusted net (loss) income applicable to common shareholders
is a non-GAAP measurement, a reconciliation of which to net (loss)
income applicable to common stockholders, the most comparable GAAP
measure, can be found at the end of the release. Adjusted net
(loss) income is a measure used by management to evaluate the
Company’s operating performance but should not be considered an
alternative to net (loss) income as defined by GAAP. They exclude
certain impacts which are of a nature which we believe are not
reflective of our underlying performance. Management believes that
adjusted net income (loss) per common share provides investors with
the ability to better evaluate our underlying operating
performance.
(3) Adjusted EBITDA is a non-GAAP measurement, a reconciliation
of which to net income, 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, 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.
(4) Cash cost, after by-product credits, per silver and 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 cash cost, after by-product credits, per silver ounce 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. Gold, lead and zinc produced have
been treated as by-product credits in calculating silver costs per
ounce. With regard to Casa Berardi and Nevada Operations,
management uses cash cost, after by-product credits, per gold ounce
to compare its performance with other gold mines with a by-product
credit recognized for the value of their silver 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.
(5) 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.
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 (i) in the understanding of the
economics of our operations and performance compared to other
producers and (ii) in the transparency 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.
Other
(6) Expectations for 2021 include silver, gold, lead and zinc
production from Greens Creek, Lucky Friday, San Sebastian, Casa
Berardi, and Nevada Operations converted using Au $1,525/oz, Ag
$17/oz, Zn $1.00/lb, and Pb $0.85/lb. Numbers may be rounded.
Cautionary Statement Regarding Forward
Looking Statements, Including 2021 Outlook
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 full-year 2021, 2022
and 2023 silver and gold production, 2021 cost of sales, cash
costs, after by-product credits, AISC, after by-product credits as
well as estimated spending on capital, exploration, and
pre-development (which assumes metal prices of gold at $1,650/oz,
Ag $18/oz, Zn $0.95/lb, Pb $0.85/lb; USD/CAD assumed to be $0.77,
USD/MXN assumed to be $0.05; (ii) the Company’s mineral reserves
and resources; (iii) exploration discoveries at Midas, Casa
Berardi, San Sebastian, Heva Hosco, Kinskuch and other exploration
targets expect to be further drilled in 2021; (iv) expectation to
grow silver production and generate significant free cash flow
generation in 2021; (v) expectation reserves will grow in 2021 from
a normal drilling program; (vi) Fire Creek is expected to be placed
on care and maintenance in the second quarter of 2021; (vii)
location and allocation of exploration expenditures; (viii)
Montanore SEIS and ROD are expected later in 2021; (ix) decisions
on litigation challenges decisions at Rock Creek are expected in
2020; (x) production from our United States silver mines is
expected to go from 8 million ounces in 2018 to almost 15 million
ounces by 2023; and (xi) the Company expects to continue
exploration at San Sebastian.
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: (a) there being no
significant change to current geotechnical, metallurgical,
hydrological and other physical conditions; (b) permitting,
development, operations and expansion of the Company’s projects
being consistent with current expectations and mine plans; (c)
political/regulatory developments in any jurisdiction in which the
Company operates being consistent with its current expectations;
(d) the exchange rate for the Canadian dollar to the U.S. dollar,
being approximately consistent with current levels; (e) certain
price assumptions for gold, silver, lead and zinc; (f) prices for
key supplies being approximately consistent with current levels;
(g) the accuracy of our current mineral reserve and mineral
resource estimates; and (h) 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 2019
Form 10-K, filed on February 10, 2020, with the Securities and
Exchange Commission (SEC), as well as the Company’s other SEC
filings, including the Company's 2020 10-K expected to be filed on
February 18, 2021. 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 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.
Cautionary Statements to Investors on Reserves and
Resources
Reporting requirements in the United States for disclosure of
mineral properties as of December 31, 2020 and earlier are governed
by the SEC's Securities Act Industry Guide 7, entitled “Description
of Property by Issuers Engaged or to be Engaged in Significant
Mining Operations” (Guide 7). Effective January 1, 2021, the SEC
has issued new rules rescinding Guide 7. Mining companies are not
required to comply with the new rules until the first fiscal year
beginning on or after January 1, 2021. Thus, the Company will be
required to comply with the new rules when filing its Form 10-K for
the fiscal year ended December 31, 2021. The Company is also a
“reporting issuer” under Canadian securities laws, which require
estimates of mineral resources and reserves to be prepared in
accordance with Canadian National Instrument 43-101 (NI 43-101). NI
43-101 requires all disclosure of estimates of potential mineral
resources and reserves to be disclosed in accordance with its
requirements. Such Canadian information is included herein to
satisfy the Company's “public disclosure” obligations under
Regulation FD of the SEC and to provide U.S. holders with ready
access to information publicly available in Canada.
Reporting requirements in the United States for disclosure of
mineral properties under Guide 7 compared to the new SEC rules
(Item 1300 of Regulation S-K under the Securities and Exchange Act
of 1934) and the requirements in Canada under NI 43-101 standards
are substantially different. This document contains a summary of
certain estimates of the Company, not only of Proven and Probable
reserves within the meaning of Guide 7, but also of mineral
resource and mineral reserve estimates estimated in accordance with
the new SEC rules and definitional standards of the Canadian
Institute of Mining, Metallurgy and Petroleum referred to in NI
43-101. Under Guide 7, the term "reserve" means that part of a
mineral deposit that can be economically and legally extracted or
produced at the time of the reserve determination. The term
"economically", as used in the definition of reserve, means that
profitable extraction or production has been established or
analytically demonstrated to be viable and justifiable under
reasonable investment and market assumptions. The term "legally",
as used in the definition of reserve, does not imply that all
permits needed for mining and processing have been obtained or that
other legal issues have been completely resolved. However, for a
reserve to exist, Hecla must have a justifiable expectation, based
on applicable laws and regulations, that issuance of permits or
resolution of legal issues necessary for mining and processing at a
particular deposit will be accomplished in the ordinary course and
in a timeframe consistent with Hecla's current mine plans. The
terms “Measured resources”, “Indicated resources,” and “Inferred
resources” are mining terms as defined in accordance with the new
SEC rules and NI 43-101. These terms are not defined under Guide 7
and prior to January 1, 2021, were not normally permitted to be
used in reports and registration statements filed with the SEC in
the United States, except where required to be disclosed by foreign
law. The term “resource” does not equate to the term “reserve”.
Under Guide 7, the material described herein as “Indicated
resources” and “Measured resources” would be characterized as
“mineralized material” and is permitted to be disclosed in tonnage
and grade only, not ounces. The category of “inferred resources” is
not recognized by Guide 7. Investors are cautioned not to assume
that any part or all of the mineral deposits in such categories
will ever be converted into Proven or Probable reserves.
“Resources” have a great amount of uncertainty as to their
existence, and great uncertainty as to their economic and legal
feasibility. It cannot be assumed that all or any part of such a
“resource” will ever be upgraded to a higher category or will ever
be economically extracted. Investors are cautioned not to assume
that all or any part of a “resource” exists or is economically or
legally mineable. Investors are also especially cautioned that the
mere fact that such resources may be referred to in ounces of
silver and/or gold, rather than in tons of mineralization and
grades of silver and/or gold estimated per ton, is not an
indication that such material will ever result in mined ore which
is processed into commercial silver or gold.
Qualified Person (QP) Pursuant to
Canadian National Instrument 43-101
Kurt D. Allen, MSc., CPG, Director - Exploration of Hecla
Limited and Keith Blair, MSc., CPG, Chief Geologist of Hecla
Limited, who serve as a Qualified Person under National Instrument
43-101("NI 43-101"), supervised the preparation of the scientific
and technical information concerning Hecla’s mineral projects in
this news release, including with respect to the newly acquired
Nevada projects. Information regarding data verification, surveys
and investigations, quality assurance program and quality control
measures and a summary of analytical or testing procedures for the
Greens Creek Mine are contained in a technical report titled
“Technical Report for the Greens Creek Mine” effective date
December 31, 2018, and for the Lucky Friday Mine are contained in a
technical report titled “Technical Report for the Lucky Friday Mine
Shoshone County, Idaho, USA” effective date April 2, 2014, for Casa
Berardi are contained in a technical report titled "Technical
Report on the mineral resource and mineral reserve estimate for
Casa Berardi Mine, Northwestern Quebec, Canada" effective date
December 31, 2018 (the "Casa Berardi Technical Report"), and for
the San Sebastian Mine, Mexico, are contained in a technical report
prepared for Hecla titled “Technical Report for the San Sebastian
Ag-Au Property, Durango, Mexico” effective date September 8, 2015 .
Also included in these four technical reports is a description of
the key assumptions, parameters and methods used to estimate
mineral reserves and resources and a general discussion of the
extent to which the estimates may be affected by any known
environmental, permitting, legal, title, taxation, socio-political,
marketing, or other relevant factors. Information regarding data
verification, surveys and investigations, quality assurance program
and quality control measures and a summary of sample, analytical or
testing procedures for the Fire Creek Mine are contained in a
technical report prepared for Klondex Mines, dated March 31, 2018;
the Hollister Mine dated May 31, 2017, amended August 9, 2017; and
the Midas Mine dated August 31, 2014, amended April 2, 2015. Copies
of these technical reports are available under Hecla's and
Klondex's profiles on SEDAR at www.sedar.com. Mr. Allen and Mr.
Blair reviewed and verified information regarding drill sampling,
data verification of all digitally collected data, drill surveys
and specific gravity determinations relating to all the mines. The
review encompassed quality assurance programs and quality control
measures including analytical or testing practice, chain-of-custody
procedures, sample storage procedures and included independent
sample collection and analysis. This review found the information
and procedures meet industry standards and are adequate for Mineral
Resource and Mineral Reserve estimation and mine planning
purposes.
geHECLA MINING COMPANY
Condensed Consolidated Statements
of Income (Loss)
(dollars and shares in thousands,
except per share amounts - unaudited)
Fourth Quarter Ended
Twelve Months Ended
December 31, 2020
December 31, 2019
December 31, 2020
December 31, 2019
Sales of products
$
188,890
$
224,945
$
691,873
$
673,266
Cost of sales and other direct production
costs
104,323
139,147
389,040
450,349
Depreciation, depletion and
amortization
37,803
60,480
157,130
199,518
Total cost of sales
142,126
199,627
546,170
649,867
Gross profit
46,764
25,318
145,703
23,399
Other operating expenses:
General and administrative
7,930
8,977
35,561
35,832
Exploration
7,954
2,363
15,853
15,919
Pre-development
585
615
2,442
3,150
Research and development
—
(79
)
—
535
Other operating expense
3,013
1,362
8,864
3,043
Loss (gain) on disposition of property,
plants, equipment and mineral interests
13
(23
)
572
4,643
Ramp-up and suspension costs
802
3,285
24,911
12,051
Acquisition costs
7
52
20
645
Foundation grant
—
—
1,970
—
Provision for closed operations and
reclamation
1,122
1,161
3,929
4,690
21,426
17,713
94,122
80,508
Income (loss) from operations
25,338
7,605
51,581
(57,109
)
Other income (expense):
Loss on derivative contracts
(9,299
)
(1,252
)
(22,074
)
(3,971
)
(Loss) gain on disposition of
investments
—
(4
)
—
923
Unrealized gain (loss) on investments
858
(1,230
)
10,268
(2,389
)
Net foreign exchange loss
(5,840
)
(1,495
)
(4,605
)
(8,236
)
Other net expense
(674
)
(1,022
)
(2,256
)
(4,429
)
Interest expense
(10,650
)
(14,670
)
(49,569
)
(48,447
)
(25,605
)
(19,673
)
(68,236
)
(66,549
)
Loss before income taxes
(267
)
(12,068
)
(16,655
)
(123,658
)
Income tax benefit (provision)
1,062
4,092
(135
)
24,101
Net income (loss)
795
(7,976
)
(16,790
)
(99,557
)
Preferred stock dividends
(138
)
(138
)
(552
)
(552
)
Income (loss) applicable to common
stockholders
$
657
$
(8,114
)
$
(17,342
)
$
(100,109
)
Basic loss per common share after
preferred dividends
$
—
$
(0.02
)
$
(0.03
)
$
(0.20
)
Diluted loss per common share after
preferred dividends
$
—
$
(0.02
)
$
(0.03
)
$
(0.20
)
Weighted average number of common shares
outstanding basic
530,998
502,902
527,329
490,449
Weighted average number of common shares
outstanding diluted
537,166
502,902
527,329
490,449
HECLA MINING COMPANY
Condensed Consolidated Balance
Sheets
(dollars and shares in thousands
- unaudited)
December 31, 2020
December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents
$
129,830
$
62,452
Accounts receivable
39,193
38,421
Inventories
96,544
66,213
Other current assets
19,114
12,038
Total current assets
284,681
179,124
Investments
15,148
6,207
Restricted cash and investments
1,053
1,025
Properties, plants, equipment and mineral
interests, net
2,345,219
2,423,698
Operating lease right-of-use assets
10,628
16,381
Deferred income tax asset
2,912
3,537
Other non-current assets
8,083
7,336
Total assets
$
2,667,724
$
2,637,308
LIABILITIES
Current liabilities:
Accounts payable and accrued
liabilities
$
68,516
$
57,716
Accrued payroll and related benefits
31,807
26,916
Accrued taxes
8,349
4,776
Finance leases
6,491
5,429
Accrued reclamation and closure costs
5,582
4,581
Operating leases
3,008
5,580
Accrued interest
14,157
5,804
Current derivatives liabilities
11,737
6,170
Other current liabilities
138
2
Total current liabilities
149,785
116,974
Finance leases
9,274
7,214
Accrued reclamation and closure costs
110,466
103,793
Long-term debt
507,242
504,729
Operating leases
7,634
10,818
Deferred income tax liability
132,475
138,282
Pension liability
44,144
56,219
Other non-current liabilities
4,364
6,856
Total liabilities
965,384
944,855
STOCKHOLDERS’ EQUITY
Preferred stock
39
39
Common stock
134,629
132,292
Capital surplus
2,003,576
1,973,700
Accumulated deficit
(379,519
)
(353,331
)
Accumulated other comprehensive loss,
net
(32,889
)
(37,310
)
Treasury stock
(23,496
)
(22,967
)
Total stockholders’ equity
1,702,340
1,692,423
Total liabilities and stockholders’
equity
$
2,667,724
$
2,687,308
Common shares outstanding
531,666
522,896
HECLA MINING COMPANY
Condensed Consolidated Statements
of Cash Flows
(dollars in thousands -
unaudited)
Fourth Quarter Ended
Twelve Months Ended
December 31, 2020
December 31, 2019
December 31, 2020
December 31, 2019
OPERATING ACTIVITIES
Net income (loss)
$
795
$
(7,976
)
$
(16,790
)
$
(99,557
)
Non-cash elements included in net income
(loss):
Depreciation, depletion and
amortization
37,115
61,435
164,026
204,475
Loss (gain) on disposition of
investments
—
4
—
(923
)
Unrealized (gain) loss on investments
(858
)
1,227
(10,268
)
2,386
Loss (gain) on disposition of properties,
plants, equipment and mineral interests
13
(23
)
572
4,643
Provision for reclamation and closure
costs
1,551
1,616
6,189
6,914
Deferred income taxes
885
(6,771
)
(5,505
)
(33,387
)
Stock compensation
1,229
910
6,458
5,668
Amortization of loan origination fees
600
718
3,666
2,637
Loss (gain) on derivative contracts
1,095
(211
)
5,578
5,613
Foreign exchange loss (gain)
5,490
1,762
2,680
8,025
Adjustment of inventory to market
value
—
—
—
1,399
Fee on prepayment of debt with shares of
common stock
—
2,855
—
2,855
Foundation grant
—
—
1,970
—
Other non-cash charges, net
(176
)
45
(176
)
45
Change in assets and liabilities:
Accounts receivable
2,661
(724
)
(1,080
)
(10,939
)
Inventories
(118
)
22,647
(13,208
)
16,146
Other current and non-current assets
(4,367
)
705
2,381
15,618
Accounts payable and accrued
liabilities
21,141
(29,971
)
19,379
(24,355
)
Accrued payroll and related benefits
3,128
4,720
14,445
9,226
Accrued taxes
285
2,578
3,561
(3,155
)
Accrued reclamation and closure costs and
other non-current liabilities
(5,568
)
1,711
(3,085
)
7,532
Cash provided by operating
activities
64,901
57,257
180,793
120,866
INVESTING ACTIVITIES
Additions to properties, plants, equipment
and mineral interests
(36,634
)
(24,083
)
(91,016
)
(121,421
)
Proceeds from sale of investments
—
—
—
1,760
Proceeds from disposition of properties,
plants and equipment
26
97
331
183
Purchases of investments
(555
)
—
(2,216
)
(389
)
Net cash used in investing
activities
(37,163
)
(23,986
)
(92,901
)
(119,867
)
FINANCING ACTIVITIES
Acquisition of treasury shares
—
8
(2,745
)
(2,231
)
Proceeds from issuance of common stock and
warrants, net of related expense
—
49,019
—
49,019
Dividends paid to common stockholders
(4,649
)
(1,259
)
(8,600
)
(4,914
)
Dividends paid to preferred
stockholders
(138
)
(138
)
(552
)
(552
)
Borrowings on debt
9,220
34,500
716,327
279,500
Payments on debt
—
(84,500
)
(716,500
)
(279,500
)
Debt issuance and loan origination fees
paid
(69
)
(389
)
(1,356
)
(976
)
Repayments of capital leases
(1,707
)
(1,673
)
(5,953
)
(7,157
)
Net cash provided by (used in)
financing activities
2,657
(4,432
)
(19,379
)
33,189
Effect of exchange rates on cash
766
618
(1,107
)
875
Net increase in cash, cash equivalents and
restricted cash and cash equivalents
31,161
29,457
67,406
35,063
Cash, cash equivalents and restricted cash
and cash equivalents at beginning of year
99,722
34,020
63,477
28,414
Cash, cash equivalents and restricted cash
and cash equivalents at end of year
$
130,883
$
63,477
$
130,883
$
63,477
HECLA MINING COMPANY
Production Data
Fourth Quarter Ended
Twelve Months Ended
December 31, 2020
December 31, 2019
December 31, 2020
December 31, 2019
GREENS CREEK UNIT
Tons of ore processed
189,092
216,324
818,408
846,076
Total production cost per ton
$
195.02
$
185.29
$
179.37
$
174.28
Ore grade milled - Silver (oz./ton)
15.17
15.69
15.65
14.64
Ore grade milled - Gold (oz./ton)
0.07
0.10
0.08
0.10
Ore grade milled - Lead (%)
2.84
3.07
3.13
2.92
Ore grade milled - Zinc (%)
6.96
7.88
7.58
7.43
Silver produced (oz.)
2,330,664
2,741,090
10,494,726
9,890,125
Gold produced (oz.)
10,276
15,356
48,491
56,625
Lead produced (tons)
4,404
5,444
21,400
20,112
Zinc produced (tons)
11,956
15,475
56,814
56,805
Cash cost per silver ounce (1)
$
7.21
$
2.76
$
5.49
$
1.97
AISC per silver ounce (1)
$
12.05
$
7.86
$
8.57
$
5.99
Capital additions (in thousands)
$
10,521
$
12,886
$
28,797
$
35,829
LUCKY FRIDAY UNIT
Tons of ore processed
69,257
16,337
179,208
57,091
Total production cost per ton
$
213.82
$
—
$
251.49
$
—
Ore grade milled - Silver (oz./ton)
12.53
14.02
11.85
11.83
Ore grade milled - Lead (%)
7.74
9.01
7.49
7.86
Ore grade milled - Zinc (%)
3.85
5.11
3.88
4.25
Silver produced (oz.)
830,200
216,488
2,031,874
632,944
Lead produced (tons)
5,103
1,360
12,727
4,098
Zinc produced (tons)
2,457
710
6,298
2,052
Cash cost per silver ounce (1)
$
9.34
N/A
N/A
N/A
AISC per silver ounce (1)
$
18.22
N/A
N/A
N/A
Capital additions (in thousands)
$
11,146
$
3,043
$
25,749
$
8,989
CASA BERARDI UNIT
Tons of ore processed - underground
185,335
201,937
658,271
784,568
Tons of ore processed - surface pit
197,646
161,430
625,430
593,497
Tons of ore processed - total
382,981
363,367
1,283,701
1,378,065
Surface tons mined - ore and waste
1,493,706
1,797,105
5,559,302
9,329,268
Total production cost per ton
$
98.33
$
97.77
$
105.71
$
101.13
Ore grade milled - Gold (oz./ton) -
underground
0.147
0.164
0.136
0.168
Ore grade milled - Gold (oz./ton) -
surface pit
0.052
0.064
0.051
0.055
Ore grade milled - Gold (oz./ton) -
combined
0.123
0.119
0.117
0.120
Ore grade milled - Silver (oz./ton)
0.04
0.02
0.03
Gold produced (oz.) - underground
27,262
26,506
89,521
106,821
Gold produced (oz.) - surface pit
10,319
8,287
31,971
27,588
Gold produced (oz.) - total
37,580
34,793
121,492
134,409
Silver produced (oz.) - total
8,858
10,499
24,142
31,540
Cash cost per gold ounce (1)
$
1,019
$
1,037
$
1,131
$
1,051
AISC per gold ounce (1)
$
1,330
$
1,278
$
1,436
$
1,354
Capital additions (in thousands)
$
16,440
$
7,699
$
40,853
$
36,059
SAN SEBASTIAN UNIT
Tons of ore processed
27,643
39,137
131,859
174,713
Total Production cost per ton
$
76.42
$
201.09
$
120.32
$
192.42
Ore grade milled - Silver (oz./ton)
7.30
11.80
7.94
11.78
Ore grade milled - Gold (oz./ton)
0.054
0.115
0.067
0.106
Silver produced (oz.)
182,614
422,434
954,772
1,868,884
Gold produced (oz.)
1,159
3,897
7,223
15,673
Cash cost per silver ounce (1)
$
0.65
$
8.89
$
4.92
$
8.02
AISC per silver ounce (1)
$
1.07
$
11.78
$
5.68
$
12.10
Capital additions (in thousands)
$
—
$
(458
)
$
537
$
5,035
NEVADA OPERATION
Tons of ore processed
—
46,661
27,984
210,397
Total production cost per ton
$
—
$
406.59
$
892.09
$
332.06
Ore grade milled - Gold (oz./ton)
—
0.502
1.232
0.361
Silver produced (oz.)
—
21,477
37,443
181,741
Gold produced (oz.)
—
20,727
31,756
66,166
Cash cost per silver ounce (1)
$
—
$
946
$
716
$
1,096
AISC per silver ounce (1)
$
—
$
1,024
$
787
$
1,527
Capital additions (in thousands)
$
2,154
$
608
$
4,003
$
42,184
(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 and Nevada Operations 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 (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
three- and twelve-month periods ended December 31, 2020 and 2019,
and for estimated amounts for the twelve months ended December 31,
2021.
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)
Three Months Ended December 31,
2020
Greens Creek
Lucky Friday(3)
San Sebastian(4)
Corporate(5)
Total Silver
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
59,215
$
20,919
$
5,833
$
85,967
Depreciation, depletion and
amortization
(12,540
)
(6,321
)
(399
)
(19,260
)
Treatment costs
18,605
4,590
55
23,250
Change in product inventory
(4,893
)
1,533
(3,038
)
(6,398
)
Reclamation and other costs (1)
(1,130
)
(274
)
(148
)
(1,552
)
Cash costs excluded
—
—
—
—
Cash Cost, Before By-product Credits
(2)
59,257
20,447
2,303
82,007
Reclamation and other costs
789
222
76
1,087
Exploration
(20
)
—
—
426
406
Sustaining capital
10,521
7,154
—
—
17,675
General and administrative
7,496
7,496
AISC, Before By-product Credits (2)
70,547
27,823
2,379
108,671
By-product credits:
Zinc
(19,702
)
(4,273
)
(23,975
)
Gold
(16,765
)
(2,184
)
(18,949
)
Lead
(5,985
)
(8,421
)
(14,406
)
Total By-product credits
(42,452
)
(12,694
)
(2,184
)
(57,330
)
Cash Cost, After By-product Credits
$
16,805
$
7,753
$
119
$
24,677
AISC, After By-product Credits
$
28,095
$
15,129
$
195
$
51,341
Divided by ounces produced
2,331
830
183
3,344
Cash Cost, Before By-product Credits, per
Silver Ounce
$
25.43
$
24.63
$
12.58
$
24.52
By-product credits per ounce
(18.22
)
(15.29
)
(11.93
)
(17.14
)
Cash Cost, After By-product Credits, per
Silver Ounce
$
7.21
$
9.34
$
0.65
$
7.38
AISC, Before By-product Credits, per
Silver Ounce
$
30.27
$
33.52
$
13.00
$
32.49
By-product credits per ounce
(18.22
)
(15.29
)
(11.93
)
(17.14
)
AISC, After By-product Credits, per Silver
Ounce
$
12.05
$
18.22
$
1.07
$
15.35
In thousands (except per ounce amounts)
Three Months Ended December 31,
2020
Casa Berardi (6)
Nevada Operations(7)
Total Gold
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
55,706
$
453
$
56,159
Depreciation, depletion and
amortization
(18,423)
(120)
(18,543)
Treatment costs
898
—
898
Change in product inventory
474
15
489
Reclamation and other costs (1)
(135)
—
(135)
Exclusion of Nevada Operations costs
—
(348)
(348)
Cash Cost, Before By-product Credits
(2)
38,520
—
38,520
Reclamation and other costs
99
—
99
Exploration
738
—
738
Sustaining capital
10,829
—
10,829
AISC, Before By-product Credits (2)
50,186
—
50,186
By-product credits:
Silver
(214)
—
(214)
Total By-product credits
(214)
—
(214)
Cash Cost, After By-product Credits
$
38,306
$
—
$
38,306
AISC, After By-product Credits
$
49,972
$
—
$
49,972
Divided by gold ounces produced
38
—
38
Cash Cost, Before By-product Credits, per
Gold Ounce
$
1,025
$
—
$
1,025
By-product credits per ounce
(6)
—
(6)
Cash Cost, After By-product Credits, per
Gold Ounce
$
1,019
$
—
$
1,019
AISC, Before By-product Credits, per Gold
Ounce
$
1,335
$
—
$
1,336
By-product credits per ounce
(6)
—
(6)
AISC, After By-product Credits, per Gold
Ounce
$
1,330
$
—
$
1,330
In thousands (except per ounce amounts)
Three Months Ended December 31,
2020
Total Silver
Total Gold
Total
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
85,967
$
56,159
$
142,126
Depreciation, depletion and
amortization
(19,260
)
(18,543
)
(37,803
)
Treatment costs
23,250
898
24,148
Change in product inventory
(6,398
)
489
(5,909
)
Reclamation and other costs (1)
(1,552
)
(135
)
(1,687
)
Exclusion of Nevada Operations costs
—
(348
)
(348
)
Cash Cost, Before By-product Credits
(2)
82,007
38,520
120,527
Reclamation and other costs
1,087
99
1,186
Exploration
406
738
1,144
Sustaining capital
17,675
10,829
28,504
General and administrative
7,496
—
7,496
AISC, Before By-product Credits (2)
108,671
50,186
158,857
By-product credits:
Zinc
(23,975
)
—
(23,975
)
Gold
(18,949
)
—
(18,949
)
Lead
(14,406
)
—
(14,406
)
Silver
(214
)
(214
)
Total By-product credits
(57,330
)
(214
)
(57,544
)
Cash Cost, After By-product Credits
$
24,677
$
38,306
$
62,983
AISC, After By-product Credits
$
51,341
$
49,972
$
101,313
Divided by ounces produced
3,344
38
Cash Cost, Before By-product Credits, per
Ounce
$
24.52
$
1,025
By-product credits per ounce
(17.14
)
(6
)
Cash Cost, After By-product Credits, per
Ounce
$
7.38
$
1,019
AISC, Before By-product Credits, per
Ounce
$
32.49
$
1,336
By-product credits per ounce
(17.14
)
(6
)
AISC, After By-product Credits, per
Ounce
$
15.35
$
1,330
In thousands (except per ounce amounts)
Three Months Ended December 31,
2019
Greens Creek
Lucky Friday(3)
San Sebastian
Corporate(5)
Total Silver
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
71,481
$
5,472
$
14,171
$
91,124
Depreciation, depletion and
amortization
(15,359)
(284)
(2,838)
(18,481)
Treatment costs
14,168
1,050
328
15,546
Change in product inventory
(10,323)
308
(1,575)
(11,590)
Reclamation and other costs
(1,083)
—
(558)
(1,641)
Exclusion of Lucky Friday costs
—
(6,546)
—
(6,646)
Cash Cost, Before By-product Credits
(2)
58,884
—
9,528
68,412
Reclamation and other costs
737
—
123
860
Exploration
357
—
215
227
799
Sustaining capital
12,886
—
884
35
13,805
General and administrative
8,977
8,977
AISC, Before By-product Credits (2)
72,864
—
10,750
92,853
By-product credits:
Zinc
(23,478)
—
(23,478)
Gold
(20,006)
(5,767)
(25,773)
Lead
(7,825)
—
(7,825)
Total By-product credits
(51,309)
—
(5,767)
(57,076)
Cash Cost, After By-product Credits
$
7,575
$
—
$
3,761
$
11,336
AISC, After By-product Credits
$
21,555
$
—
$
4,983
$
35,777
Divided by silver ounces produced
2,741
—
423
3,164
Cash Cost, Before By-product Credits, per
Silver Ounce
$
21.49
$
—
$
22.52
$
21.62
By-product credits per Silver ounce
(18.73)
—
(13.63)
(18.04)
Cash Cost, After By-product Credits, per
Silver Ounce
$
2.76
$
—
$
8.89
$
3.58
AISC, Before By-product Credits, per
Silver Ounce
$
26.59
$
—
$
25.41
$
29.35
By-product credits per Silver ounce
(18.73)
—
(13.63)
(18.04)
AISC, After By-product Credits, per Silver
Ounce
$
7.86
$
—
$
11.78
$
11.31
In thousands (except per ounce amounts)
Three Months Ended December 31,
2019
Casa Berardi
Nevada Operations
Total Gold
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
60,444
$
48,059
$
108,503
Depreciation, depletion and
amortization
(20,154)
(21,845)
(41,999)
Treatment costs
447
39
486
Change in product inventory
(4,343)
(5,896)
(10,239)
Reclamation and other costs
(130)
(378)
(508)
Cash Cost, Before By-product Credits
(2)
36,264
19,979
56,243
Reclamation and other costs
129
378
507
Exploration
560
285
845
Sustaining capital
7,699
946
8,645
AISC, Before By-product Credits (2)
44,652
21,588
66,240
By-product credits:
Silver
(180)
(371)
(551)
Total By-product credits
(180)
(371)
(551)
Cash Cost, After By-product Credits
$
36,084
$
19,608
$
55,692
AISC, After By-product Credits
$
44,472
$
21,217
$
65,689
Divided by gold ounces produced
35
21
56
Cash Cost, Before By-product Credits, per
Gold Ounce
$
1,042
$
964
$
1,003
By-product credits per Gold Ounce
(5)
(18)
(10)
Cash Cost, After By-product Credits, per
Gold Ounce
$
1,037
$
946
$
993
AISC, Before By-product Credits, per Gold
Ounce
$
1,283
$
1,042
$
1,197
By-product credits per Gold Ounce
(5)
(18)
(10)
AISC, After By-product Credits, per Gold
Ounce
$
1,278
$
1,024
$
1,187
In thousands (except per ounce amounts)
Three Months Ended December 31,
2019
Total Silver
Total Gold
Total
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
91,124
108,503
$
199,627
Depreciation, depletion and
amortization
(18,481
)
(41,999
)
(60,480
)
Treatment costs
15,546
486
16,032
Change in product inventory
(11,590
)
(10,239
)
(21,829
)
Reclamation and other costs
(1,641
)
(508
)
(2,149
)
Exclusion of Lucky Friday costs
(6,546
)
(6,546
)
Cash Cost, Before By-product Credits
(2)
68,412
56,243
124,655
Reclamation and other costs
860
507
1,367
Exploration
799
845
1,644
Sustaining capital
13,805
8,645
22,450
General and administrative
8,977
—
8,977
AISC, Before By-product Credits (2)
92,853
66,240
159,093
By-product credits:
Zinc
(23,478
)
—
(23,478
)
Gold
(25,773
)
—
(25,773
)
Lead
(7,825
)
—
(7,825
)
Silver
(551
)
(551
)
Total By-product credits
(57,076
)
(551
)
(57,627
)
Cash Cost, After By-product Credits
$
11,336
$
55,692
$
67,028
AISC, After By-product Credits
$
35,777
$
65,689
$
101,466
Divided by ounces produced
3,164
56
Cash Cost, Before By-product Credits, per
Ounce
$
21.62
$
1,003
By-product credits per ounce
(18.04
)
(10
)
Cash Cost, After By-product Credits, per
Ounce
$
3.58
$
993
AISC, Before By-product Credits, per
Ounce
$
29.35
$
1,197
By-product credits per ounce
(18.04
)
(10
)
AISC, After By-product Credits, per
Ounce
$
11.31
$
1,187
In thousands (except per ounce amounts)
Twelve Months Ended December 31,
2020
Greens Creek
Lucky Friday(3)
San
Sebastian(4)
Corporate(5)
Total Silver
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
217,125
$
56,706
$
24,104
$
297,935
Depreciation, depletion and
amortization
(49,692)
(11,473)
(3,548)
(64,713)
Treatment costs
77,122
4,590
287
81,999
Change in product inventory
(3,144)
2,340
(2,357)
(3,161)
Reclamation and other costs (1)
(1,608)
(274)
(1,198)
(3,080)
Exclusion of Lucky Friday costs
—
(31,442)
—
(31,442)
Cash Cost, Before By-product Credits
(2)
239,803
20,447
17,288
277,538
Reclamation and other costs
3,154
222
418
3,794
Exploration
354
—
—
1,788
2,142
Sustaining capital
28,797
7,154
299
38
36,288
General and administrative
33,759
33,759
AISC, Before By-product Credits (2)
272,108
27,823
18,005
353,521
By-product credits:
Zinc
(79,413)
(4,273)
(83,686)
Gold
(74,615)
—
(12,586)
(87,201)
Lead
(28,193)
(8,421)
(36,614)
Total By-product credits
(182,221)
(12,694)
(12,586)
(207,501)
Cash Cost, After By-product Credits
$
57,582
$
7,753
$
4,702
$
70,037
AISC, After By-product Credits
$
89,887
$
15,129
$
5,419
$
146,020
Divided by silver ounces produced
10,495
830
955
12,280
Cash Cost, Before By-product Credits, per
Silver Ounce
$
22.85
$
24.63
$
18.10
$
22.60
By-product credits per Silver ounce
(17.36)
(15.29)
(13.18)
(16.90)
Cash Cost, After By-product Credits, per
Silver Ounce
$
5.49
$
9.34
$
4.92
$
5.70
AISC, Before By-product Credits, per
Silver Ounce
$
25.93
$
33.51
$
18.86
$
28.79
By-product credits per Silver ounce
(17.36)
(15.29)
(13.18)
(16.90)
AISC, After By-product Credits, per Silver
Ounce
$
8.57
$
18.22
$
5.68
$
11.89
In thousands (except per ounce amounts)
Twelve Months Ended December 31,
2020
Casa Berardi (6)
Nevada Operations (7)
Total Gold
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
203,434
$
44,801
$
248,235
Depreciation, depletion and
amortization
(69,572
)
(22,845
)
(92,417
)
Treatment costs
2,591
45
2,636
Change in product inventory
2,226
15,869
18,095
Reclamation and other costs (1)
(773
)
(978
)
(1,751
)
Exclusion of Nevada Operations costs
—
(13,511
)
(13,511
)
Cash Cost, Before By-product Credits
(1)
137,906
23,381
161,287
Reclamation and other costs
386
654
1,040
Exploration
2,231
—
2,231
Sustaining capital
34,431
1,600
36,031
AISC, Before By-product Credits (2)
174,954
25,635
200,589
By-product credits:
Silver
(499
)
(635
)
(1,134
)
Total By-product credits
(499
)
(635
)
(1,134
)
Cash Cost, After By-product Credits
$
137,407
$
22,746
$
160,153
AISC, After By-product Credits
$
174,455
$
25,000
$
199,455
Divided by gold ounces produced
121
32
153
Cash Cost, Before By-product Credits, per
Gold Ounce
$
1,135
$
736
$
1,052
By-product credits per Gold ounce
(4
)
(20
)
(7
)
Cash Cost, After By-product Credits, per
Gold Ounce
$
1,131
$
716
$
1,045
AISC, Before By-product Credits, per Gold
Ounce
$
1,440
$
807
$
1,309
By-product credits per Gold ounce
(4
)
(20
)
(7
)
AISC, After By-product Credits, per Gold
Ounce
$
1,436
$
787
$
1,302
In thousands (except per ounce amounts)
Twelve Months Ended December 31,
2020
Total Silver
Total Gold
Total
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
297,935
$
248,235
$
546,170
Depreciation, depletion and
amortization
(64,713)
(92,417)
(157,130)
Treatment costs
81,999
2,636
84,635
Change in product inventory
(3,161)
18,095
14,934
Reclamation and other costs (1)
(3,080)
(1,751)
(4,831)
Cash costs excluded
(31,442)
(13,511)
(44,953)
Cash Cost, Before By-product Credits
(2)
277,538
161,287
438,825
Reclamation and other costs
3,794
1,040
4,834
Exploration
2,142
2,231
4,373
Sustaining capital
36,288
36,031
72,319
General and administrative
33,759
—
33,759
AISC, Before By-product Credits (2)
353,521
200,589
554,110
By-product credits:
Zinc
(83,686)
(83,686)
Gold
(87,201)
(87,201)
Lead
(36,614)
(36,614)
Silver
(1,134)
(1,134)
Total By-product credits
(207,501)
(1,134)
(208,635)
Cash Cost, After By-product Credits
$
70,037
$
160,153
$
230,190
AISC, After By-product Credits
$
146,020
$
199,455
$
345,475
Divided by ounces produced
12,280
153
Cash Cost, Before By-product Credits, per
Ounce
$
22.60
$
1,052
By-product credits per ounce
(16.90)
(7)
Cash Cost, After By-product Credits, per
Ounce
$
5.70
$
1,045
AISC, Before By-product Credits, per
Ounce
$
28.79
$
1,309
By-product credits per ounce
(16.90)
(7)
AISC, After By-product Credits, per
Ounce
$
11.89
$
1,302
In thousands (except per ounce amounts)
Twelve Months Ended December 31,
2019
Greens Creek
Lucky Friday(3)
San Sebastian
Corporate(5)
Total Silver
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
211,719
$
16,621
$
50,509
$
278,849
Depreciation, depletion and
amortization
(47,587
)
(1,175
)
(9,772
)
(58,534
)
Treatment costs
48,487
2,884
760
52,131
Change in product inventory
(1,155
)
1,016
(2,953
)
(3,092
)
Reclamation and other costs
(2,523
)
—
(1,588
)
(4,111
)
Exclusion of Lucky Friday costs
—
(19,346
)
(19,346
)
Cash Cost, Before By-product Credits
(2)
208,941
—
36,956
245,897
Reclamation and other costs
2,949
—
492
3,441
Exploration
982
—
4,667
1,332
6,981
Sustaining capital
35,829
—
2,461
108
38,398
General and administrative
35,832
35,832
AISC, Before By-product Credits (2)
248,701
—
44,576
330,549
By-product credits:
Zinc
(91,435
)
(91,435
)
Gold
(69,391
)
(21,960
)
(91,351
)
Lead
(28,589
)
(28,589
)
Total By-product credits
(189,415
)
—
(21,960
)
(211,375
)
Cash Cost, After By-product Credits
$
19,526
$
—
$
14,996
$
34,522
AISC, After By-product Credits
$
59,286
$
—
$
22,616
$
119,174
Divided by silver ounces produced
9,890
—
1,869
11,759
Cash Cost, Before By-product Credits, per
Silver Ounce
$
21.12
$
—
$
19.77
$
20.91
By-product credits per silver ounce
(19.15
)
—
(11.75
)
(17.98
)
Cash Cost, After By-product Credits, per
Silver Ounce
$
1.97
$
—
$
8.02
$
2.93
AISC, Before By-product Credits, per
Silver Ounce
$
25.14
$
—
$
23.85
$
28.11
By-product credits per silver ounce
(19.15
)
—
(11.75
)
(17.98
)
AISC, After By-product Credits, per Silver
Ounce
$
5.99
$
—
$
12.10
$
10.13
In thousands (except per ounce amounts)
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
$
217,682
$
153,336
$
371,018
Depreciation, depletion and
amortization
(73,960
)
(67,024
)
(140,984
)
Treatment costs
1,876
158
2, 034
Change in product inventory
(3,371
)
(9,008
)
(12,379
Reclamation and other costs
(515
)
(2,019
)
(2,534
)
Cash Cost, Before By-product Credits
(2)
141,712
75,443
217,155
Reclamation and other costs
515
1,512
2,027
Exploration
3,450
2,333
5,783
Sustaining capital
36,825
24,652
61,477
AISC, Before By-product Credits (2)
182,502
103,940
286,442
By-product credits:
Silver
(508
)
(2,922
)
(3,430
)
Total By-product credits
(508
)
(2,922
)
(3,430
)
Cash Cost, After By-product Credits
$
141,204
$
72,521
$
213,725
AISC, After By-product Credits
$
181,994
$
101,018
$
283,012
Divided by gold ounces produced
134
66
200
Cash Cost, Before By-product Credits, per
Gold Ounce
$
1,055
$
1,140
$
1,083
By-product credits per gold ounce
(4
)
(44
)
(17
)
Cash Cost, After By-product Credits, per
Gold Ounce
$
1,051
$
1,096
$
1,066
AISC, Before By-product Credits, per Gold
Ounce
$
1,358
$
1,571
$
1,428
By-product credits per ounce
(4
)
(44
)
(17
)
AISC, After By-product Credits, per Gold
Ounce
$
1,354
$
1,527
$
1,411
In thousands (except per ounce amounts)
Twelve Months Ended December 31,
2019
Total Silver
Total Gold
Total
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
278,849
$
371,018
$
649,867
Depreciation, depletion and
amortization
(58,534
)
(140,984
)
(199,518
)
Treatment costs
52,131
2,034
54,165
Change in product inventory
(3,092
)
(12,379
)
(15,471
)
Reclamation and other costs
(4,111
)
(2,534
)
(6,645
)
Exclusion of Lucky Friday costs
(19,346
)
(19,346
)
Cash Cost, Before By-product Credits
(2)
245,897
217,155
463,052
Reclamation and other costs
3,441
2,027
5,468
Exploration
6,981
5,783
12,764
Sustaining capital
38,398
61,477
99,875
General and administrative
36,832
—
35,832
AISC, Before By-product Credits (2)
330,549
286,442
616,991
By-product credits:
Zinc
(91,435
)
(91,435
)
Gold
(91,351
)
(91,351
)
Lead
(28,589
)
(28,589
)
Silver
(3,430
)
(3,430
)
Total By-product credits
(211,375
)
(3,430
)
(214,805
)
Cash Cost, After By-product Credits
$
34,522
$
213,725
$
248,247
AISC, After By-product Credits
$
119,174
$
283,012
$
402,186
Divided by ounces produced
11,759
200
Cash Cost, Before By-product Credits, per
Ounce
$
20,91
$
1,083
By-product credits per ounce
(17.98
)
(17
)
Cash Cost, After By-product Credits, per
Ounce
$
2.93
$
1,066
AISC, Before By-product Credits, per
Ounce
$
28.11
$
1,428
By-product credits per ounce
(17.98
)
(17
)
AISC, After By-product Credits, per
Ounce
$
10.13
$
1,411
In thousands (except per ounce amounts)
Estimate for Twelve Months Ended
December 31, 2021
Greens Creek
Lucky Friday
San Sebastian
Corporate(5)
Total Silver
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
220,000
$
90,400
$
—
$
310,400
Depreciation, depletion and
amortization
(46,000
)
(26,000
)
—
(72,000
)
Treatment costs
49,000
17,100
—
66,100
Change in product inventory
(5,700
)
—
—
(5,700
)
Reclamation and other costs
1,500
1,000
—
2,500
Cash Cost, Before By-product Credits
(2)
218,800
82,500
—
301,300
Reclamation and other costs
3,400
500
—
3,900
Exploration
4,000
—
—
4,000
Sustaining capital
38,000
22,000
—
60,000
General and administrative
—
—
32,000
32,000
AISC, Before By-product Credits (2)
264,200
105,000
—
401,200
By-product credits:
Zinc
(70,000
)
(14,500
)
—
(84,500
)
Gold
(62,000
)
—
—
(62,000
)
Lead
(28,000
)
(38,900
)
(66,900
)
Total By-product credits
(160,000
)
(53,400
)
—
(213,400
)
Cash Cost, After By-product Credits
$
58,800
$
29,100
$
—
$
87,900
AISC, After By-product Credits
$
104,200
$
51,600
$
—
$
187,800
Divided by silver ounces produced
9,850
3,600
—
13,450
Cash Cost, Before By-product Credits, per
Silver Ounce
$
22.21
$
22.92
$
—
$
22.40
By-product credits per silver ounce
(16.24
)
(14.83
)
—
(15.87
)
Cash Cost, After By-product Credits, per
Silver Ounce
$
5.97
$
8.09
$
—
$
6.53
AISC, Before By-product Credits, per
Silver Ounce
$
26.82
$
29.17
$
—
$
29.83
By-product credits per silver ounce
(16.24
)
(14.83
)
—
(15.87
)
AISC, After By-product Credits, per Silver
Ounce
$
10.58
$
14.34
$
—
$
13.96
In thousands (except per ounce amounts)
Estimate for Twelve Months Ended
December 31, 2021
Casa Berardi
Nevada Operations
Total Gold
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
175,900
$
41,000
$
216,900
Depreciation, depletion and
amortization
(61,000
)
(5,600
)
(66,600
)
Treatment costs
400
4,600
5,000
Change in product inventory
600
(11,600
)
(11,000
)
Reclamation and other costs
300
500
800
Cash Cost, Before By-product Credits
(2)
116,200
28,900
145,100
Reclamation and other costs
500
100
600
Exploration
3,800
—
3,800
Sustaining capital
31,500
2,000
33,500
AISC, Before By-product Credits (2)
152,000
31,000
183,000
By-product credits:
Silver
(600
)
(550
)
(1,150
)
Total By-product credits
(600
)
(550
)
(1,150
)
Cash Cost, After By-product Credits
$
115,600
$
28,350
$
143,950
AISC, After By-product Credits
$
151,400
$
30,450
$
181,850
Divided by gold ounces produced
127
21
148
Cash Cost, Before By-product Credits, per
Gold Ounce
$
919
$
1,376
$
984
By-product credits per gold ounce
(5
)
(26
)
(8
)
Cash Cost, After By-product Credits, per
Gold Ounce
$
914
$
1,350
$
976
AISC, Before By-product Credits, per Gold
Ounce
$
1,202
$
1,476
$
1,241
By-product credits per gold ounce
(5
)
(26
)
(8
)
AISC, After By-product Credits, per Gold
Ounce
$
1,197
$
1,450
$
1,233
In thousands (except per ounce amounts)
Estimate for Twelve Months Ended
December 31, 2021
Total Silver
Total Gold
Total
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
310,400
$
216,900
$
527,300
Depreciation, depletion and
amortization
(72,000
)
(66,600
)
(138,600
)
Treatment costs
66,100
5,000
71,100
Change in product inventory
(5,700
)
(11,000
)
(16,700
)
Reclamation and other costs
2,500
800
3,300
Cash Cost, Before By-product Credits
(2)
301,300
145,100
446,400
Reclamation and other costs
3,900
600
4,500
Exploration
4,000
3,800
7,800
Sustaining capital
60,000
33,500
93,500
General and administrative
32,000
—
32,000
AISC, Before By-product Credits(2)
401,200
183,000
584,200
By-product credits:
Zinc
(84,500
)
—
(84,500
)
Gold
(62,000
)
—
(62,000
)
Lead
(66,900
)
—
(66,900
)
Silver
(1,150
)
(1,150
)
Total By-product credits
(213,400
)
(1,150
)
(214,550
)
Cash Cost, After By-product Credits
$
87,900
$
143,950
$
231,850
AISC, After By-product Credits
$
187,800
$
181,850
$
369,650
Divided by ounces produced
13,450
148
Cash Cost, Before By-product Credits, per
Ounce
$
22.40
$
984
By-product credits per ounce
(15.87
)
(8
)
Cash Cost, After By-product Credits, per
Ounce
$
6.53
$
976
AISC, Before By-product Credits, per
Ounce
$
29.83
$
1,241
By-product credits per ounce
(15.87
)
(8
)
AISC, After By-product Credits, per
Ounce
$
13.96
$
1,233
(1)
Excludes the discretionary portion of
general and administrative costs for Greens Creek, Casa Berardi,
Lucky Friday and corporate of $0.6 million, $0.4 million, $0.1
million, and $1.8 million, respectively, for 2020.
(2)
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, non-discretionary 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.
(3)
The unionized employees at Lucky Friday
were on strike from March 2017 until January 2020, and production
at Lucky Friday had been limited from the start of the strike until
the ramp-up was substantially completed in the fourth quarter of
2020. Costs related to ramp-up activities totaling approximately
$8.0 million in 2020 and suspension-related costs totaling
approximately $12.1 million during the strike in 2019 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.
(4)
In early April 2020, the Government of
Mexico issued an order to the mining industry to reduce operations
to a minimum level until April 30 in response to COVID-19, and the
order was subsequently extended until May 30. Our operations at San
Sebastian were suspended during that time. Suspension-related costs
totaling $1.8 million for 2020 are reported in a separate line item
on our consolidated statements of operations and excluded from the
calculations of cost of sales and other direct production costs and
depreciation, depletion and amortization, mining and milling cost
per ton, and Cash Cost and AISC, After By-product Credits, per Gold
Ounce.
(5)
AISC, Before By-product Credits for our
consolidated silver properties includes non-discretionary corporate
costs for general and administrative expense, exploration and
sustaining capital.
(6)
In late March 2020, the Government of
Quebec ordered the mining industry to reduce to minimum operations
as part of the fight against COVID-19, causing us to suspend our
Casa Berardi operations from March 24 until April 15, when mining
operations resumed, resulting in reduced mill throughput.
Suspension-related costs totaling $1.6 million for 2020 are
reported in a separate line item on our consolidated statements of
operations and excluded from the calculations of cost of sales and
other direct production costs and depreciation, depletion and
amortization and Cash Cost and AISC, After By-product Credits, per
Gold Ounce.
(7)
Production was suspended at the Hollister
mine in the third quarter of 2019 and at the Midas mine and Aurora
mill in late 2019. Suspension-related costs at Hollister, Midas and
Aurora totaling $13.5 million for 2020 are reported in a separate
line item on our consolidated statements of operations and excluded
from the calculations of cost of sales and other direct production
costs and depreciation, depletion and amortization and Cash Cost
and AISC, After By-product Credits, per Gold Ounce. During the
second half of 2020, all ore mined at Nevada Operations was
stockpiled, with no ore milled and no production reported during
the period. As a result, costs incurred at Nevada Operations during
the second half of 2020 were excluded from the calculations of Cash
Cost and AISC, After By-product Credits, per Gold Ounce.
Reconciliation of Net Income (Loss) Applicable to Common
Shareholders (GAAP) to Adjusted Net Income (Loss) Applicable to
Common Shareholders (non-GAAP)
This release refers to a non-GAAP measure of adjusted net income
(loss) applicable to common stockholders and adjusted net income
(loss) per share, which are indicators of our performance. They
exclude certain impacts which are of a nature which we believe are
not reflective of our underlying performance. Management believes
that adjusted net income (loss) per common share provides investors
with the ability to better evaluate our underlying operating
performance.
Dollars in thousands (except per share
amounts)
Three Months Ended December
31,
Twelve Months Ended December
31,
2020
2019
2020
2019
Net income (loss) applicable to common
stockholders (GAAP)
$
657
$
(8,114
)
$
(17,342
)
$
(100,109
)
Adjusting items:
Loss on derivatives contracts
9,299
1,252
22,074
3,971
Provisional price gain
(2,722
)
(855
)
(8,008
)
(597
)
Ramp-up and suspension costs
802
3,285
24,911
12,051
Environmental accruals
—
—
—
472
Foreign exchange loss
5,840
1,495
4,605
8,236
Acquisition costs
7
52
20
645
Unrealized (gain) loss on investments
(858
)
1,230
(10,268
)
2,389
Loss on prepayment of debt with shares
—
2,855
—
2,855
Foundation grant
—
—
1,970
—
Additional interest associated with early
repayment of long-term debt
—
—
2,902
—
Loss on extinguishment of debt
—
—
1,666
—
Loss (gain) on disposition of properties,
plants, equipment and mineral interests
13
(23
)
572
4,643
Adjusted net income (loss) applicable to
common stockholders
$
13,038
$
(1,177
)
$
23,102
$
(65,444
)
Weighted average shares - basic
530,998
502,902
527,329
490,449
Weighted average shares - diluted
537,166
502,902
527,329
490,449
Basic adjusted net income (loss) per
common share
$
0.02
$
—
$
0.04
$
(0.13
)
Diluted adjusted net income (loss) per
common share
$
0.02
$
—
$
0.04
$
(0.13
)
Reconciliation of Net Income (Loss) (GAAP) and Debt (GAAP) to
Adjusted EBITDA (non-GAAP) and Net Debt (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, and net debt to adjusted EBITDA for the last 12 months
(or "LTM adjusted EBITDA"), which is a measure of our ability to
service our debt. Adjusted EBITDA is calculated as net income
(loss) before the following items: interest expense, income tax
provision, depreciation, depletion, and amortization expense,
acquisition costs, interest and other income (expense), foreign
exchange gains and losses, gains and losses on derivative
contracts, unrealized gains on investments, provisions for
environmental matters, stock-based compensation, and provisional
price gains and losses. Net debt is calculated as total debt, which
consists of the liability balances for our Senior Notes, capital
leases, and other notes payable, less the total of our cash and
cash equivalents and short-term investments. Management believes
that, when presented in conjunction with comparable GAAP measures,
adjusted EBITDA and net debt to LTM adjusted EBITDA are useful to
investors in evaluating our operating performance and ability to
meet our debt obligations. The following table reconciles net loss
and debt to adjusted EBITDA and net debt:
Dollars are in thousands
Three Months Ended
Twelve Months Ended
December 31, 2020
December 31, 2019
December 31, 2020
December 31, 2019
Net income (loss)
$
795
$
(7,976
)
$
(16,790
)
$
(99,557
)
Plus: Interest expense
10,650
14,670
49,569
48,447
Plus (Less): Income taxes
(1,062
)
(4,092
)
135
(24,101
)
Plus: Depreciation, depletion and
amortization
37,803
60,480
157,130
199,518
Plus: Acquisition costs
7
52
20
645
Plus: Suspension-related costs
802
3,285
24,911
12,051
Less: Deferred revenue net of production
costs
—
(10,912
)
—
—
(Less)/Plus: (Gain) loss on disposition of
properties, plants, equipment, and mineral interests
13
(23
)
572
4,643
Plus/(Less): Foreign exchange (gain)
loss
5,840
1,495
4,605
8,236
Plus/(Less): Unrealized loss (gain) on
derivative contracts
1,095
(211
)
5,578
5,613
(Less)/Plus: Provisional price (gain)
loss
(2,722
)
(855
)
(8,008
)
(597
)
Plus: Provision for closed operations and
environmental matters
1,551
1,616
6,189
6,914
Plus: Stock-based compensation
1,229
910
6,458
5,668
Plus: Unrealized loss on investments
(858
)
1,230
(10,268
)
2,389
Foundation grant
—
—
1,970
—
Plus/(Less): Other
674
1,026
2,256
3,506
Adjusted EBITDA
$
55,817
$
60,695
$
224,327
$
173,375
Total debt
$
523,007
$
517,372
Less: Cash and cash equivalents
129,830
62,452
Net debt
$
393,177
$
454,920
Net debt/LTM adjusted EBITDA
(non-GAAP)
1.8
2.6
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 and a
one-time item for settlement of an insurance policy for reclamation
of the Troy Mine. 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:
Hecla Consolidated
Greens Creek
Casa Berardi
Nevada Operations
San
Sebastian
Lucky Friday 1
Dollars are in thousands
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2020
2019
2020
2019
Twelve Months Ended December
31, 2020
Cash provided (used) by operating
activities 2
$
64,901
$
57,257
$
180,793
$
120,866
$
182,633
$
68,460
$
7,240
$
14,357
$
4,799
Less: Additions to properties, plants
equipment and mineral interests
(36,634
)
(24,083
)
(91,016
)
(121,421
)
(23,051
)
(40,854
)
(4,003
)
(538
)
(25,749
)
Free cash flow
$
28,267
$
33,174
$
89,777
$
(555
)
$
159,582
$
27,606
$
3,237
$
13,819
$
(20,950
)
1Cash used by operating activities for Lucky
Friday includes $1.7 million for ramp-up costs incurred.
2Cash provided (used) by operating activities
for the operating segments and on a consolidated basis includes
exploration expense, which is a discretionary expenditure. Cash
provided by operating activities for the twelve months ended
December 31, 2020 includes exploration expense of $0.4 million for
Greens Creek, $2.9 million for Casa Berardi, $6.5 million for
Nevada Operations, $3.5 million for San Sebastian, and $2.6 million
for Corporate activities.
Reserves - 12/31/20(1)
Proven Reserves
Tons
Silver
Gold
Lead
Zinc
Copper
Silver
Gold
Lead
Zinc
Copper
Asset
(000)
(oz/ton)
(oz/ton)
%
%
%
(000 oz)
(000 oz)
Tons
Tons
Tons
Greens Creek (2)
3
21.8
0.10
3.7
7.8
-
70
0.3
120
250
-
Lucky Friday (2)
4,393
14.2
-
8.8
4.1
-
62,290
-
386,210
180,060
-
Casa Berardi Open Pit (3)
4,437
-
0.09
-
-
-
-
410
-
-
-
Casa Berardi Underground (3)
1,038
-
0.15
-
-
-
-
158
-
-
-
Fire Creek (2,4)
62
0.4
0.48
-
-
-
28
30
-
-
-
Total
9,933
62,388
598
386,330
180,310
-
Probable Reserves
Tons
Silver
Gold
Lead
Zinc
Copper
Silver
Gold
Lead
Zinc
Copper
Asset
(000)
(oz/ton)
(oz/ton)
%
%
%
(000 oz)
(000 oz)
(Tons)
(Tons)
Tons
Greens Creek (2)
8,975
12.4
0.09
2.8
7.3
-
111,333
827
254,840
652,170
-
Lucky Friday (2)
1,372
10.7
-
7.2
3.9
-
14,702
-
99,170
53,190
-
Casa Berardi Open Pit (3)
9,763
-
0.08
-
-
-
-
744
-
-
-
Casa Berardi Underground (3)
1,533
-
0.15
-
-
-
-
231
-
-
-
Fire Creek (2,4)
1
0.9
0.71
-
-
-
1
1
-
-
-
Total
21,643
126,036
1,802
354,010
705,360
-
Proven and Probable
Reserves
Tons
Silver
Gold
Lead
Zinc
Copper
Silver
Gold
Lead
Zinc
Copper
Asset
(000)
(oz/ton)
(oz/ton)
%
%
%
(000 oz)
(000 oz)
(Tons)
(Tons)
Tons
Greens Creek (2)
8,978
12.4
0.09
2.8
7.3
-
111,404
828
254,960
652,420
-
Lucky Friday (2)
5,764
13.4
-
8.4
4.0
-
76,992
-
485,380
233,250
-
Casa Berardi Open Pit (3)
14,200
-
0.08
-
-
-
-
1,153
-
-
-
Casa Berardi Underground (3)
2,571
-
0.16
-
-
-
-
389
-
-
-
Fire Creek (2,4)
63
0.5
0.48
-
-
-
29
31
-
-
-
Total
31,576
188,424
2,400
740,340
885,670
-
(1)
The term “reserve” means that part of a
mineral deposit that can be economically and legally extracted or
produced at the time of the reserve determination. The term
“economically,” as used in the definition of reserve, means that
profitable extraction or production has been established or
analytically demonstrated to be viable and justifiable under
reasonable investment and market assumptions. The term “legally,”
as used in the definition of reserve, does not imply that all
permits needed for mining and processing have been obtained or that
other legal issues have been completely resolved. However, for a
reserve to exist, Hecla must have a justifiable expectation, based
on applicable laws and regulations, that issuance of permits or
resolution of legal issues necessary for mining and processing at a
particular deposit will be accomplished in the ordinary course and
in a timeframe consistent with Hecla’s current mine plans.
(2)
Mineral reserves are based on $1300 gold,
$16.00 silver, $0.90 lead, $1.15 zinc, unless otherwise stated. The
NSR cut-off grades are $205/ton for Greens Creek, $216.19 for the
30 Vein and $230.98 for the Intermediate Veins at Lucky Friday.
(3)
Mineral reserves are based on $1300 gold
and a US$/CAN$ exchange rate of 1:1.35. Reserve diluted to an
average of 18% or 23% depending on mining method. The average
cut-off grades at Casa Berardi are 0.101 oz/ton gold (3.46 g/tonne)
for underground mineral reserves and 0.025 oz/ton gold (0.85
g/tonne) for open pit mineral reserves.
(4)
Fire Creek mineral reserves are based on a
cut-off grade of 0.482 gold equivalent oz/ton and incremental
cut-off grade of 0.106 gold equivalent oz/ton. Unplanned dilution
of 10% to 17% included depending on mining method.
* Totals may not represent the sum of parts due to rounding
Mineral Resources -
12/31/2020
Measured Resources
Tons
Silver
Gold
Lead
Zinc
Copper
Silver
Gold
Lead
Zinc
Copper
Asset
(000)
(oz/ton)
(oz/ton)
%
%
%
(000 oz)
(000 oz)
(Tons)
(Tons)
Tons
Greens Creek (5)
297
12.9
0.11
3.1
10.3
-
3,837
33
9,310
30,500
-
Lucky Friday (5,6)
9,007
7.6
-
4.8
2.4
-
68,543
-
30,950
218,740
-
Casa Berardi Open Pit (7)
824
-
0.09
-
-
-
-
71
-
-
-
Casa Berardi Underground (7)
2,231
-
0.15
-
-
-
-
331
-
-
-
San Sebastian (5,8)
-
-
-
-
-
-
-
-
-
-
-
Fire Creek (5,9)
20
0.7
0.50
-
-
-
14
10
-
-
-
Hollister (5,10)
18
4.9
0.59
-
-
-
87
10
-
-
-
Midas (5,11)
2
7.6
0.68
-
-
-
14
1
-
-
-
Heva (12)
-
-
-
-
-
-
-
-
-
-
-
Hosco (12)
-
-
-
-
-
-
-
-
-
-
-
Rio Grande Silver (13)
-
-
-
-
-
-
-
-
-
-
-
Star (14)
-
-
-
-
-
-
-
-
-
-
-
Total
12,399
72,495
456
440,260
249,240
-
Indicated Resources
Tons
Silver
Gold
Lead
Zinc
Copper
Silver
Gold
Lead
Zinc
Copper
Asset
(000)
(oz/ton)
(oz/ton)
%
%
%
(000 oz)
(000 oz)
(Tons)
(Tons)
Tons
Greens Creek (5)
8,599
12.9
0.10
3.0
8.2
-
110,844
848
256,790
708,520
-
Lucky Friday (5,6)
2,275
7.8
-
5.3
2.2
-
17,844
-
120,390
50,970
-
Casa Berardi Open Pit (7)
1,621
-
0.06
-
-
-
-
97
-
-
-
Casa Berardi Underground (7)
5,424
-
0.14
-
-
-
-
750
-
-
-
San Sebastian (5,8)
2,541
5.9
0.06
1.9
2.9
1.2
14,985
149
22,420
34,100
14,650
Fire Creek (5,9)
114
1.0
0.45
-
-
-
114
51
-
-
-
Fire Creek - Open Pit (13)
-
-
-
-
-
-
-
-
-
-
-
Hollister (5,10)
70
1.9
0.58
-
-
-
130
40
-
-
-
Midas (5,11)
76
5.7
0.42
-
-
-
430
32
-
-
-
Heva (12)
1,266
-
0.06
-
-
-
-
76
-
-
-
Hosco (12)
29,287
-
0.04
-
-
-
-
1,202
-
-
-
Rio Grande Silver (13)
516
14.8
-
2.1
1.1
-
7,620
-
10,760
5,820
-
Star (14)
1,126
2.9
-
6.2
7.4
-
3,301
-
69,900
83,410
-
Total
52,913
155,266
3,245
480,260
882,820
14,650
Measured & Indicated
Resources
Tons
Silver
Gold
Lead
Zinc
Copper
Silver
Gold
Lead
Zinc
Copper
Asset
(000)
(oz/ton)
(oz/ton)
%
%
%
(000 oz)
(000 oz)
(Tons)
(Tons)
Tons
Greens Creek (5)
8,895
12.9
0.10
3.0
8.3
-
114,681
881
266,110
739,020
-
Lucky Friday (5,6)
11,282
7.7
-
4.9
2.4
-
86,386
-
551,340
269,710
-
Casa Berardi Open Pit (7)
2,445
-
0.07
-
-
-
-
168
-
-
-
Casa Berardi Underground (7)
7,656
-
0.14
-
-
-
-
1,081
-
-
-
San Sebastian (5,8)
2,541
5.9
0.06
1.9
2.9
1.2
14,985
149
22,420
34,100
14,650
Fire Creek (5,9)
134
1.0
0.46
-
-
-
128
61
-
-
-
Fire Creek - Open Pit (13)
-
-
-
-
-
-
-
-
-
-
-
Hollister (5,10)
88
2.5
0.58
-
-
-
217
51
-
-
-
Midas (5,11)
78
5.7
0.43
-
-
-
444
33
-
-
-
Heva (12)
1,266
-
0.06
-
-
-
-
76
-
-
-
Hosco (12)
29,287
-
0.04
-
-
-
-
1,202
-
-
-
Rio Grande Silver (13)
516
14.8
-
2.1
1.1
-
7,620
-
10,760
5,820
-
Star (14)
1,126
2.9
-
6.2
7.4
-
3,301
-
69,900
83,410
-
Total
65,312
227,760
3,701
920,530
1,132,060
14,650
Inferred Resources
Tons
Silver
Gold
Lead
Zinc
Copper
Silver
Gold
Lead
Zinc
Copper
Asset
(000)
(oz/ton)
(oz/ton)
%
%
%
(000 oz)
(000 oz)
(Tons)
(Tons)
Tons
Greens Creek (5)
1,767
13.2
0.08
2.8
7.0
-
23,370
145
49,670
123,480
-
Lucky Friday (5,6)
3,069
8.3
-
6.3
2.7
-
25,359
-
192,200
83,350
-
Casa Berardi Open Pit (7)
9,229
-
0.06
-
-
-
-
508
-
-
-
Casa Berardi Underground (7)
2,447
-
0.18
-
-
-
-
445
-
-
-
San Sebastian (5,15)
2,923
5.9
0.05
1.6
2.3
0.9
17,188
133
6,070
8,830
3,330
Fire Creek (5,9)
765
0.5
0.51
-
-
-
394
392
-
-
-
Fire Creek - Open Pit (16)
74,584
0.1
0.03
-
-
-
5,232
2,178
-
-
-
Hollister (5,10)
642
3.0
0.42
-
-
-
1,916
273
-
-
-
Midas (5,11)
1,057
5.0
0.40
-
-
-
5,280
424
-
-
-
Heva (12)
2,787
-
0.08
-
-
-
-
216
-
-
-
Hosco (12)
17,726
-
0.04
-
-
-
-
663
-
-
-
Rio Grande Silver (17)
3,078
10.7
0.01
1.3
1.1
-
33,097
36
40,990
34,980
-
Star (14)
3,157
2.9
-
5.6
5.5
-
9,432
-
178,670
174,450
-
Monte Cristo (18)
913
0.3
0.14
-
-
-
271
131
-
-
-
Rock Creek (19)
100,086
1.5
-
-
-
0.7
148,736
-
-
-
658,680
Montanore (20)
112,185
1.6
-
-
-
0.7
183,346
-
-
-
759,420
Total
336,416
453,621
5,543
467,600
425,090
1,421,430
Note: All estimates are in-situ except for the proven
reserves at Greens Creek and Fire Creek which are in surface
stockpiles. Resources are exclusive of reserves.
(5)
Mineral resources are based on
$1500 gold, $21 silver, $1.15 lead, $1.35 zinc and $3.00 copper,
unless otherwise stated. Cut-off grades are as above unless
otherwise stated.
(6)
Measured and Indicated resources
from Gold Hunter and Lucky Friday vein systems are diluted and
factored for expected mining recovery using NSR cut-off grades of
$170.18 for the 30 Vein, $184.97 for the Intermediate Veins and
$207.15 for the Lucky Friday Vein.
(7)
Measured, Indicated, and Inferred
resources are based on $1,500 gold and a US$/CAN$ exchange rate of
1:1.35. Underground resources are reported at a minimum mining
width of 6.6 to 9.8 feet (2 m to 3 m). The average cut-off grades
at Casa Berardi are 0.087 oz/ton gold (3.0 g/tonne) for underground
mineral resources and 0.025 oz/ton gold (0.85 g/tonne) for open pit
mineral resources.
(8)
Indicated resources reported at a
minimum mining width of 5.9 feet (1.8 m) for Hugh Zone, Middle
Vein, North Vein, and East Francine Vein and 4.9 feet (1.5 m) for
Andrea Vein using a cut-off grade of $90.72/ton ($100/tonne).
San Sebastian lead, zinc, and
copper grades are for 1,187,000 tons of Indicated resource within
the Middle Vein and the Hugh Zone of the Francine Vein.
(9)
Fire Creek mineral resources are
reported at a gold equivalent cut-off grade of 0.283 oz/ton. The
minimum mining width is defined as four feet or the vein true
thickness plus two feet, whichever is greater.
(10)
Hollister mineral resources,
including the Hatter Graben are reported at a gold equivalent
cut-off grade of 0.238 oz/ton. The minimum mining width is defined
as four feet or the vein true thickness plus two feet, whichever is
greater.
(11)
Midas mineral resources are
reported at a gold equivalent cut-off grade of 0.237 oz/ton. The
minimum mining width is defined as four feet or the vein true
thickness plus two feet, whichever is greater.
(12)
Measured, Indicated, and Inferred
resources are based on $1,500 gold. The resources are in-situ
without external dilution and material loss at a cut-off grade of
0.01 oz/ton gold (0.33 g/tonne) for open pit and 0.088 oz/ton gold
(3.0 g/tonne) for underground.
(13)
Indicated resources reported at a
minimum mining width of 6.0 feet for Bulldog; resources based on
$26.5 Ag, $0.85 Pb, and $0.85 Zn and a cut-off grade of 6.0 silver
equivalent oz/ton.
(14)
Indicated and Inferred resources
reported using $21 silver, $0.95 lead, $1.10 lead minimum mining
width of 4.3 feet and a cut-off grade of $100/ton.
(15)
Inferred resources reported at a
minimum mining width of 5.9 feet (1.8 m) for Hugh Zone, Middle
Vein, North Vein, and East Francine Vein and 4.9 feet (1.5 m) for
Andrea Vein using a cut-off grade of $90.72/ton ($100/tonne).
San Sebastian lead, zinc, and
copper grades are for 385,000 tons of Inferred resource within the
Middle Vein and the Hugh Zone of the Francine Vein.
(16)
Inferred open-pit resources for
Fire Creek calculated November 30, 2017 using gold and silver
recoveries of 65% and 30% for oxide material and 60% and 25% for
mixed oxide-sulfide material. Indicated Resources reclassified as
Inferred for 2019.
Open pit resources are calculated
at $1400 gold and $19.83 silver and cut-off grade of 0.01 Au
Equivalent oz/ton and is inclusive of 10% mining dilution and 5%
ore loss. Open pit mineral resources exclusive of underground
mineral resources.
NI43-101 Technical Report for the
Fire Creek Project, Lander County, Nevada; Effective Date March 31,
2018; prepared by Practical Mining LLC, Mark Odell, P.E. for Hecla
Mining Company, June 28, 2018.
(17)
Inferred resources reported at a
minimum mining width of 6.0 feet for Bulldog and a cut-off grade of
6.0 equivalent oz/ton silver and 5.0 feet for Equity and North
Amethyst vein at a cut-off grade of $50/ton and $100/ton; based on
$1400 Au, $26.5 Ag, $0.85 Pb, and $0.85 Zn.
(18)
Inferred resource reported at a
minimum mining width of 5.0 feet; resources based on $1400 Au,
$26.5 Ag using a 0.06 oz/ton gold cut-off grade.
(19)
Inferred resource at Rock Creek
reported at a minimum thickness of 15 feet and a cut-off grade of
$24.50/ton NSR and adjusted given mining restrictions as defined by
U.S. Forest Service, Kootenai National Forest in the June 2003
'Record of Decision, Rock Creek Project'.
(20)
Inferred resource at Montanore
reported at a minimum thickness of 15 feet and a cut-off grade of
$24.50/ton NSR and adjusted given mining restrictions defined by
U.S. Forest Service, Kootenai National Forest, Montana DEQ in
December 2015 'Joint Final EIS, Montanore Project'.
* Totals may not represent the sum of parts due to rounding
Assay Results - Q4
2020
Midas (Nevada)
Zone
Drill Hole Number
Drill Hole Azm/Dip
Sample From (feet)
Sample To (feet)
Drilled Width (feet)
Gold (oz/ton)
Silver (oz/ton)
Depth From Surface
(feet)
Elko Prince
DMC-00380
44/-41
431.6
432.6
1.0
0.15
2.8
-283
Elko Prince
DMC-00384
61/-40
443.5
444.5
1.0
0.13
24.3
-285
Elko Prince
DMC-00386
71/-49
178.0
188.1
10.1
0.09
1.5
-138
Elko Prince
DMC-00386
71/-49
533.6
535.0
1.4
0.03
4.6
-403
North Block
DMC-00372
260/-42
865.2
866.4
1.2
0.06
12.0
-579
North Block
DMC-00375
224/-57
1005.0
1007.0
2.0
0.10
61.3
-844
Green Racer Sinter
DMC-00371
249/-45
735.0
736.6
1.6
1.12
16.9
-520
Green Racer Sinter
DMC-00374
242/-59
1051.0
1055.3
4.3
0.34
7.8
-903
Green Racer Sinter
DMC-00387
260/-45
858.0
859.0
1.0
0.21
20.7
-607
Green Racer Sinter
DMC-00389
245/-53
894.0
894.8
0.8
0.05
4.2
-714
Green Racer Sinter
DMC-00389
245/-53
895.3
897.0
1.7
0.06
1.5
-716
Green Racer Sinter
DMC-00390
250/-50
1662.0
1666.5
4.5
3.26
14.3
-1273
Green Racer Sinter
Including
1662.0
1663.0
1.0
1.38
16.7
-1273
Green Racer Sinter
Including
1663.9
1664.9
1.0
10.68
37.3
-1273
Green Racer Sinter
Including
1665.7
1666.5
0.8
3.16
4.0
-1273
Southern Cross
DMC-00373
69/-46
598.5
603.7
5.2
0.05
0.2
-432
Southern Cross
DMC-00373
69/-46
1104.0
1108.0
4.0
0.09
0.1
-796
SV1
DMC-00377
215/-48
1189.0
1197.7
8.7
0.10
8.2
-887
SV1
Including
1189.0
1190.7
1.7
0.09
22.4
-884
SV1
Including
1190.7
1193.3
2.6
0.15
11.9
-886
SV1
DMC-00377
215/-48
1237.7
1240.0
2.3
0.11
1.0
-921
Casa Berardi (Quebec)
Zone
Drill Hole Number
Drill Hole
Section
Drill Hole Azm/Dip
Sample From (feet)
Sample To (feet)
True Width (feet)
Gold (oz/ton)
Depth From Mine Surface
(feet)
UG Upper Principal 123 Zone
CBP-0920
12360
191/0
52.8
64.6
10.5
0.12
-1431
123
CBP-0921
12360
191/-35
46.2
91.5
25.4
0.21
-1475
123
CBP-0923
12375
175/50
59.0
74.5
12.9
0.10
-1377
123
Including
175/50
67.7
69.7
1.6
0.69
-1377
123
CBP-0925
12375
175/-24
60.4
89.2
26.2
0.19
-1464
123
Including
175/-24
85.3
87.9
2.3
0.75
-1469
123
CBP-0926
12360
214/37
33.8
51.5
11.8
0.12
-1403
123
Including
214/37
48.9
51.5
2.2
0.70
-1398
123
CBP-0930
12255
203/-6
231.2
246.0
13.1
0.10
-1782
UG Lower Principal 123 Zone
CBP-0880
12330
332/-63
551.0
556.0
3.8
0.12
-3973
123
CBP-0881
12335
1/-56
319.8
361.1
38.4
0.16
-3773
123
Including
1/-56
354.2
359.2
4.0
0.27
-3786
123
CBP-0881
12335
1/-56
433.0
447.7
13.2
0.13
-3851
123
CBP-0881
12335
1/-56
459.2
468.1
4.5
0.21
-3869
123
CBP-0882
1230
314/-60
353.9
418.2
27.6
0.23
-3822
123
Including
314/-60
403.4
418.2
6.6
0.56
-3839
123
CBP-0883
1230
325/-75
445.4
541.2
25.6
0.17
-3925
123
Including
325/-75
472.3
474.0
0.7
0.55
-3851
123
Including
325/-75
485.4
492.0
1.6
0.36
-3966
UG Upper Principal 128 Zone
CBP-0875
12800
188/7
361.8
371.3
9.2
0.11
-1536
128
Including
188/7
369.3
371.3
1.8
0.36
-1464
128
CBP-0875
12800
188/7
457.9
459.9
1.8
0.43
-1523
128
CBP-0876
12800
188/19
353.3
363.1
9.5
0.32
-1465
128
Including
188/19
358.5
363.1
4.1
0.69
-1464
128
CBP-0877
12780
188/30
386.4
401.8
9.8
0.15
-1394
128
CBP-0903
12810
191/-4
372.6
388.0
14.8
0.20
-1590
128
Including
191/-4
372.6
378.2
4.9
0.53
-1590
128
CBP-0908
12750
200/-30
506.1
528.1
18.4
0.10
-1819
128
Including
200/-30
506.1
508.4
1.6
0.54
-1815
UG East Mine 148 Zone
CBE-0225
14745
346/-53
1304.1
1325.1
15.1
0.10
-2498
148
Including
346/-53
1322.5
1325.1
2.0
0.30
-2498
148
CBE-0226
14765
352/-62
1503.9
1520.3
10.8
0.17
-2766
148
Including
352/-62
1506.8
1514.0
4.8
0.33
-2764
148
CBE-0227
14790
358/-58
1466.8
1519.3
36.1
0.16
-2709
148
CBE-0228
14835
4/-56
1583.3
1595.4
11.2
0.07
-2739
148
Including
4/-56
1587.8
1589.8
1.5
0.32
-2739
Surface East Mine 159 Zone
CBS-20-012
16000
170/-55
479.0
516.6
24.6
0.34
-406
159
Including
170/-55
495.3
500.2
3.0
0.93
-412
159
CBS-20-013
16100
185/-45
710.1
749.8
28.9
0.10
-490
159
Including
185/-45
713.4
728.2
11.8
0.18
-485
159
CBS-20-013
16100
185/-45
764.9
803.9
30.2
0.10
-523
159
Including
185/-45
764.9
772.4
5.9
0.35
-514
Zone
Drill Hole Number
Drill Hole Section
Drill Hole Azm/Dip
Sample From (feet)
Sample To (feet)
True Width (feet)
Gold (oz/ton)
Depth From Mine Surface
(feet)
Surface East Mine 160 Zone
CBS-20-011
16260
30/-51.3
1393.5
1408.8
9.5
0.32
-1135
160
Including
30/-51.3
1401.9
1405.0
2.0
1.16
-1137
160
CBF-160-113
15959
360/-50
720.6
752.8
20.2
0.13
-552
160
CBF-160-113
15959
360/-50
806.9
902.3
61.3
0.09
-632
160
Including
360/-50
841.3
868.4
17.4
0.14
-632
160
CBF-160-114
15855
360/-47
872.5
1085.7
154.2
0.10
-535
160
Including
360/-47
872.5
915.1
30.8
0.15
-535
160
Including
360/-47
1020.1
1070.6
36.1
0.19
-535
160
CBF-160-114
15855
360/-47
703.6
723.2
13.8
0.05
-535
160
CBF-160-119
15960
360/-47
265.9
276.8
11.2
0.10
-209
San Sebastian (Mexico)
Zone
Drill Hole Number
Drill Hole Azm/Dip
Sample From (feet)
Sample To
(feet)
True Width (feet)
Silver (oz/ton)
Gold (oz/ton)
Depth From Surface
(feet)
EL BRONCO VEIN
SS-2053
35/-50
552.7
565.9
11.1
1.8
0.02
-410
EL BRONCO VEIN
SS-2058
35/-45
121.8
122.9
1.0
8.3
0.35
-81
EL BRONCO VEIN
SS-2059
35/-45
511.8
514.4
2.3
1.3
0.01
-348
EL BRONCO VEIN
SS-2069
35/-60
641.8
655.4
9.6
3.1
0.06
-545
EL BRONCO VEIN
SS-2072
35/-60
581.6
593.1
7.4
1.8
0.01
-493
EL BRONCO VEIN
SS-2074
35/-60
719.3
725.0
3.9
2.8
0.04
-607
EL BRONCO VEIN
SS-2082
35/-60
1056.8
1070.1
9.6
44.5
0.22
-899
EL TIGRE VEIN
SS-2047
45/-43
828.8
835.6
6.6
0.9
0.03
-546
EL TIGRE VEIN
SS-2050
45/-69
1058.2
1069.5
8.6
1.5
0.01
-987
EL TIGRE VEIN
SS-2062
68/-45
1015.1
1027.1
11.0
0.8
0.00
-690
EL TIGRE VEIN
SS-2071
45/-60
1069.3
1079.7
9.3
1.1
0.00
-905
EL TIGRE VEIN
SS-2073
45/-60
1108.2
1132.3
19.2
1.5
0.01
-954
EL TIGRE VEIN
SS-2075
45/-62
1133.1
1144.3
8.0
7.0
0.05
-985
EL TIGRE VEIN
SS-2078
72/-59
1163.9
1192.4
21.5
4.0
0.02
-961
EL TIGRE VEIN
SS-2080
55/-60
1508.5
1525.7
14.8
1.1
0.01
-1225
Category: Earnings
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Russell Lawlar Treasurer
Jeanne DuPont Senior Communication Coordinator
800-HECLA91 (800-432-5291) Investor Relations Email:
hmc-info@hecla-mining.com Website: www.hecla-mining.com
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