Cash provided by operations 2nd highest in its
history, guidance improved
Hecla Mining Company (NYSE:HL) today announced second quarter
2021 financial and operating results.
HIGHLIGHTS**
- Sales of $218.0 million, a 31% increase with the largest source
being silver.
- Gross profit of $59.3 million, an increase of $25.2
million.
- Cash provided by operating activities was $86.3 million, with
$31.9 million of additions to properties, plant, equipment and
mineral interests, resulting in $54.4 million of quarterly free
cash flow.1
- Silver production of 3.5 million ounces, an increase of 4% over
prior year due to full production at Lucky Friday.
- Gold production of 59,139 ounces, a decrease of 1%.
- Net income applicable to common shareholders of $0.6 million,
or $0.00 per share.
- Adjusted net income applicable to common shareholders of $32.8
million, or $0.06 per share.2
- Adjusted EBITDA of $84.0 million, an increase of 31%.3
- Net debt/adjusted EBITDA (last 12 months) of 1.2x, the lowest
in 9 years since the issuance of Hecla's prior Senior Notes.4
- Near record-setting quarter in Hecla's 130-year history with
the 2nd best revenues, gross profit, cash provided by operations,
and adjusted EBITDA.
- Strong balance sheet with over $400 million of available
liquidity.
- Gold production guidance increased and silver cost guidance
reduced.
"Despite the continuing pandemic, Hecla had near record results
across a number of metrics improving on the consistent performance
of the past two years," said Phillips S. Baker, Jr., Hecla's
President and CEO. "We generated over $54 million of free cash flow
due to a combination of lower treatment charges, increasing
throughput and recoveries, and higher prices. Our American silver
mines produce more than 40% of all the silver mined in the United
States and with silver being important for the transformation to
renewable energy, electric vehicles and 5G, Hecla's growing silver
production and low costs make it well-positioned for even better
results in the future."
** All comparisons to the second quarter of 2020.
FINANCIAL OVERVIEW
Second Quarter Ended
Six Months Ended
HIGHLIGHTS
June 30, 2021
June 30, 2020
June 30, 2021
June 30, 2020
FINANCIAL DATA
Sales (000)
$
217,983
$
166,355
$
428,835
$
303,280
Gross profit (000)
$
59,260
$
34,079
$
124,072
$
45,451
Income (loss) applicable to common
shareholders (000)
$
647
$
(14,166
)
$
19,480
$
(31,489
)
Basic and diluted income (loss) per common
share (in cents)
0.1
(3.0
)
3.6
(6.0
)
Cash provided by operating activities
(000)
$
86,304
$
37,526
$
124,240
$
42,453
Net income applicable to common shareholders for the second
quarter 2021 was $0.6 million, or $0.00 per share, compared to net
loss applicable to common shareholders of $14.2 million, or $(0.03)
per share, for the same period in 2020. The improved second quarter
result compared to the previous year was mainly due to the
following items:
- Higher prices for all metals with realized silver and zinc
prices up approximately 50%.
- Silver and lead production nearly doubled at Lucky Friday.
- Greens Creek and Lucky Friday generated $42.8 million more
gross profit.
- Ramp-up costs decreased by $3.8 million due primarily to Lucky
Friday's return to full production starting in the fourth quarter
of 2020.
- Lower interest expense by $1.6 million due to reduced debt, as
no amounts were drawn on our revolving credit facility during the
second quarter of 2021.
- Income and mining tax benefits of $4.8 million compared to an
income tax provision of $0.6 million.
These improvements were partially offset by:
- Lower gross profit at Nevada Operations from a $9.4 million
non-cash adjustment of stockpiled inventory to market value.
- Higher costs at Casa Berardi driven by costs associated with
higher volumes and higher maintenance-related activities.
- Loss on metal derivatives contracts of $17.3 million ($13.3
million, non-cash and unrealized) compared to a loss of $14.0
million ($13.4 million, non-cash and unrealized) from increases in
zinc and lead prices.
- Exploration and pre-development expense increased by $8.7
million due to increased exploration at Midas, San Sebastian,
Greens Creek and Casa Berardi, and for drift development to the
Hatter Graben area in Nevada.
- General and administrative expense increased by $4.1 million
due to our higher share price increasing the value of accrued
incentive compensation and the issuance of certain shares occurring
a quarter earlier than in 2020.
- An unrealized loss on investments in other mining companies of
$0.8 million compared to a gain of $6.4 million.
Cash provided by operating activities was $86.3 million, $48.8
million higher than in the second quarter of 2020, due mainly to
the $25.2 million increase in gross profit and the positive net
impact of working capital changes.
Capital expenditures totaled $31.9 million, with $24.3 million
spent at the operations compared to $13.7 million in the second
quarter of 2020, with the increase primarily due to higher planned
expenditures at Casa Berardi of $12.2 million for the period.
Expenditures at Lucky Friday and Greens Creek were approximately
$6.0 million each. Capital expenditures also included $7.5 million
related to royalty repurchases at the Nevada Operations and Casa
Berardi during the second quarter of 2021.
Metals Prices
The average realized silver price in the second quarter was
$27.14 per ounce, 47% higher than the $18.44 in the second quarter
of 2020. The average realized gold price increased 5% to $1,825 per
ounce. Average realized lead and zinc prices increased 33% and 52%,
respectively.
Three Months Ended June 30,
Six Months Ended June 30,
2021
2020
2021
2020
Silver –
London PM Fix ($/ounce)
$
26.69
$
16.33
$
26.49
$
16.63
Realized price per ounce
$
27.14
$
18.44
$
26.45
$
16.75
Gold –
London PM Fix ($/ounce)
$
1,816
$
1,711
$
1,807
$
1,647
Realized price per ounce
$
1,825
$
1,736
$
1,795
$
1,658
Lead –
LME Final Cash Buyer ($/pound)
$
0.96
$
0.76
$
0.94
$
0.80
Realized price per pound
$
1.04
$
0.78
$
0.99
$
0.78
Zinc –
LME Final Cash Buyer ($/pound)
$
1.32
$
0.89
$
1.29
$
0.93
Realized price per pound
$
1.35
$
0.89
$
1.34
$
0.89
∗ 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 below) 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 June 30, 2021.
Pounds Under Contract (in
thousands)
Average Price per
Pound
Zinc
Lead
Zinc
Lead
Contracts on forecasted sales
2021 settlements
15,708
14,991
$1.24
$0.94
2022 settlements
66,855
50,982
$1.28
$0.96
2023 settlements
76,280
52,250
$1.29
$1.00
2024 settlements
15,046
—
$1.33
—
These contracts represent about 45% of the forecasted payable
zinc production through 2024 at an average price of $1.28 per
pound, and 35% of the forecasted payable lead production through
2023 at an average price of $0.97 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 June 30, 2021, which is roughly 75% of forecasted Canadian
dollar direct production costs for the remainder of 2021, 50% for
2022, 30% for 2023 and 20% for 2024:
Currency Under Contract (in
thousands of CAD)
Average Exchange Rate
CAD/USD
2021 settlements
61,026
$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 second quarter and six months ended June
30, 2021 and 2020:
Second Quarter Ended
Six Months Ended
June 30, 2021
June 30, 2020
June 30, 2021
June 30, 2020
PRODUCTION SUMMARY
Silver -
Ounces produced
3,524,783
3,403,781
6,984,229
6,649,250
Payable ounces sold
3,415,464
3,348,639
6,445,490
5,930,918
Gold -
Ounces produced
59,139
59,982
111,143
118,774
Payable ounces sold
47,168
51,398
104,454
108,501
Lead -
Tons produced
11,540
8,977
22,244
14,087
Payable tons sold
10,663
8,026
19,331
12,156
Zinc -
Tons produced
17,211
17,855
33,318
30,702
Payable tons sold
11,143
11,989
22,170
21,825
The following tables provide a summary of the final production,
cost of sales and other direct production costs and depletion,
depreciation and amortization (referred to herein as "cost of
sales"), cash cost, after by-product credits ("cash cost"), per
silver and gold ounce, and all-in sustaining cost, after by-product
credits ("AISC"), per silver and gold ounce for the second quarter
and six months ended June 30, 2021, with comparisons to the prior
year period:
Second Quarter Ended
Greens Creek
Lucky Friday
Casa Berardi
Nevada Operations
June 30, 2021
Silver
Gold
Silver
Gold
Silver
Gold
Silver
Gold
Silver
Production (ounces)
3,524,783
59,139
2,558,447
12,859
913,294
31,333
7,917
14,947
45,125
Increase/(decrease)
121,002
(843
)
(195,472
)
(245
)
443,757
577
2,422
156
29,137
Cost of sales (000)
$
83,390
$
75,333
$
55,488
$
—
$
27,901
$
57,340
$
—
$
17,993
$
—
Increase/(decrease)
$
10,253
$
16,194
$
(2,184
)
N/A
$
16,446
$
11,758
N/A
$
4,436
N/A
Cash cost per silver or gold ounce
5
$
0.18
$
1,254
$
(2.64
)
$
—
$
8.07
$
1,199
$
—
$
1,369
$
—
Increase/(decrease)
$
(4.79
)
$
408
$
(7.83
)
N/A
$
—
$
280
N/A
$
675
N/A
AISC per silver or gold ounce6
$
7.54
$
1,419
$
0.68
$
—
$
14.10
$
1,434
$
—
$
1,386
$
—
Increase/(decrease)
$
(1.79
)
$
442
$
(6.43
)
N/A
$
—
$
357
N/A
$
617
N/A
Six Months Ended
Greens Creek
Lucky Friday
Casa Berardi
Nevada Operations
June 30, 2021
Silver
Gold
Silver
Gold
Silver
Gold
Silver
Gold
Silver
Production (ounces)
6,984,229
111,143
5,143,317
26,125
1,777,195
67,523
18,592
17,495
45,125
Increase/(decrease)
334,979
(7,631
)
(386,309
)
748
1,211,910
10,015
7,163
(14,261
)
7,682
Cost of sales (000)
$
159,459
$
145,304
$
108,668
$
—
$
50,696
$
119,856
$
—
$
25,448
$
—
Increase/(decrease)
$
26,008
$
20,926
$
1,815
N/A
$
36,409
$
25,949
N/A
$
(5,023
)
N/A
Cash cost per silver or gold ounce
5
$
0.79
$
1,161
$
(1.65
)
$
—
$
7.85
$
1,106
$
—
$
1,371
$
—
Increase/(decrease)
$
(4.59
)
$
209
$
(7.06
)
N/A
$
—
$
25
N/A
$
655
N/A
AISC per silver or gold ounce6
$
7.38
$
1,357
$
1.14
$
—
$
14.17
$
1,347
$
—
$
1,393
$
—
Increase/(decrease)
$
(2.72
)
$
222
$
(6.37
)
N/A
$
—
$
20
N/A
$
606
N/A
Greens Creek Mine - Alaska
The Greens Creek Mine produced 2.6 million ounces of silver and
12,859 ounces of gold with the mill operating at an average of
2,362 tons per day (tpd) marking another quarter of consistently
strong performance. The decrease in silver production compared to
the second quarter of 2020 was due to planned lower grades
resulting from mine sequencing. Compared to 2020, cost of sales
decreased by $2.2 million and the per ounce silver cash cost and
AISC decreased by $7.83 and $6.43, respectively, due to higher
by-products credits resulting from higher by-product prices, lower
treatment costs from favorable changes in smelter terms and lower
production costs, driven partially by lower COVID-19 related
costs.5,6
The Company's estimated 2021 silver production of 9.5 - 10.2
million ounces is unchanged and gold production increased from 40 -
43 thousand ounces to 43 - 45 thousand ounces. The estimate for
2021 cost of sales has been updated to $222 million. Estimated cash
cost and AISC, each per silver ounce has been updated to
($1.00)-$1.00 and $3.25-$4.00, respectively, with lower costs due
to anticipated higher by-product credits.5,6
Casa Berardi Mine - Quebec
At the Casa Berardi Mine, 31,333 ounces of gold were produced
compared to 30,756 ounces in the second quarter of 2020 due to
higher mill throughput which was partially offset by lower grades.
The mill operated at an average of 4,117 tpd, which was 33% higher
than the prior year period. The increase in cost of sales was due
to higher throughput, mill contractor costs related to maintenance
and optimization activities, and underground maintenance costs
resulting from repairs and replacements of major components for the
production fleet. The increase in cash cost and AISC per gold ounce
for the second quarter of 2021 compared to 2020 was the result of
the higher cost of sales, with the increase in AISC also resulting
from higher sustaining capital spending.
In the 160 pit, 1.4 million tons of overburden were removed
during the quarter. Ore from that pit is expected to start being
mined and processed in Q4 2021, concurrent with the processing of
the last of the East Mine Crown Pillar pit ore.
The Company's estimated 2021 gold production has been increased
from 125 - 128 thousand ounces to 128 - 132 thousand ounces. The
estimate for 2021 cost of sales has been updated to $220 million.
Estimated cash cost and AISC, each per gold ounce has been updated
from $900-$975 and $1,185-$1,275 to $1,000-$1,125 and
$1,200-$1,325, respectively.5,6
Lucky Friday Mine - Idaho
At the Lucky Friday Mine, 0.9 million ounces of silver were
produced in the quarter, an increase of 95% compared to the second
quarter of 2020, with the mine at full production. The mill
operated at an average of 906 tpd. We continue to test and optimize
new mining methods to better manage seismicity and potentially
increase productivity.
The cost of sales for the second quarter was $27.9 million, and
the cash cost per silver ounce was $8.07. AISC was $14.10 per
silver ounce.5,6
The Company's estimated 2021 silver production of 3.4 - 3.8
million ounces is unchanged. The estimate for 2021 cost of sales
has been updated to $103 million. Estimated cash cost and AISC,
each per silver ounce, has been updated to $7.60-$8.50 and
$14.25-$16.25, respectively.5,6
Nevada Operations
At the Nevada operations, 14,947 ounces of gold and 45,125
ounces of silver were produced from processing previously
stockpiled ore, including oxide material processed at the Midas
mill and a bulk sample of refractory material processed at a
third-party roaster facility. Total cost of sales for the second
quarter was $18.0 million which included a $9.4 million write-down
in the value of stockpile inventory to net realizable value due to
lower than anticipated grades. Cash cost and AISC per gold ounce
were $1,369 and $1,386, respectively, in the second quarter of
2021.5,6 The increase over the prior year period was due primarily
to costs related to the ore stockpile inventory that was mined in
previous periods and processed in the current period.
With processing of the oxide material complete, the Fire Creek
Mine and Midas mill were placed on care and maintenance during the
quarter. In the second half of 2021, approximately 10,000 tons of
refractory material is expected to be processed as a test at a
third-party autoclave facility. The ounces from this third-party
processing are anticipated to be recognized as production at that
time. Those ounces and any remaining finished goods inventory are
expected to be sold in the second half of 2021. Pre-development for
the Hatter Graben area at Hollister and exploration at Midas are
ongoing.
EXPLORATION
Exploration expenses were $8.4 million for the second quarter,
an increase of $6.4 million compared to the second quarter of 2020
primarily due to increased activity and focus on the Green Racer
Sinter discovery at Midas and increased activity at Greens Creek,
Casa Berardi, San Sebastian, Heva-Hosco and Kinskuch. Exploration
guidance was increased to $40 million earlier in the quarter. An
update of the exploration program will be provided later in the
third quarter.
PRE-DEVELOPMENT
Pre-development spending was $2.9 million for the quarter,
compared to $0.6 million for the second quarter of 2020. The
increase over the prior year period is principally due to
development of the decline to allow drilling of the Hatter Graben,
which commenced late in the first quarter of 2021. Exploration
drilling is expected in the third quarter. Pre-development guidance
was increased to $8.5 million earlier in the quarter.
DIVIDENDS
Common
On August 4, 2021, the Board of Directors declared a quarterly
cash dividend of $0.01125 per share of common stock, consisting of
$0.00375 per share for the minimum dividend component and $0.0075
per share for the silver-linked dividend component. The common
dividend is payable on or about September 3, 2021, to shareholders
of record on August 23, 2021. The realized silver price was $27.14
in the second quarter satisfying the criteria for the silver-linked
dividend component of the Company's dividend policy.
Preferred
The Board of Directors declared a quarterly cash dividend of
$0.875 cent per share on the outstanding shares of Series B
Cumulative Convertible Preferred Stock, payable on or about October
1, 2021, to shareholders of record on September 15, 2021.
2021 ESTIMATES7
The Company has updated its guidance for annual production, cost
and expenditures as follows:
2021 Production Outlook
Silver Production
(Moz)
Gold Production
(Koz)
Silver Equivalent
(Moz)
Gold Equivalent
(Koz)
Previous
Current
Previous
Current
Previous
Current
Previous
Current
Greens Creek *
9.5-10.2
9.5-10.2
40-43
43-45
20.5-21.5
22-23
227-237
244-253.5
Lucky Friday *
3.4-3.8
3.4-3.8
N/A
N/A
6.2-6.4
6.2-6.4
67-70
67-70
Casa Berardi
N/A
N/A
125-128
128-132
11.5-11.7
11.7-12.1
125-128
128-132
Nevada Operations
N/A
N/A
20-22
20-21
1.8-2.0
1.8-1.9
20-22
20-21
Total7
12.9-14.0
12.9-14.0
185-193
191-198
40.0-41.6
41.7-43.3
439-457
459-476.5
* Equivalent ounces include Lead and Zinc production
2021 Cost Outlook
Cost of Sales
(millions)
Cash cost, after by-product
credits, per silver/gold ounce5
AISC, after by-product
credits, per produced silver/gold ounce6
Previous
Current
Previous
Current
Previous
Current
Greens Creek
$213
$222
$1.50-$2.25
($1.00)-$1.00
$6.50-$7.25
$3.25-$4.00
Lucky Friday
$91
$103
$7.75-$9.75
$7.50-$8.50
$13.75-$16.50
$14.25-$16.25
Total Silver
$304
$325
$3.25-$4.25
$1.00-$2.00
$10.75-$12.50
$9.00-$11.00
Casa Berardi
$212
$220
$900-$975
$1,000-$1,125
$1,185-$1,275
$1,200-$1,325
Nevada Operations
$41
$43
$1,300-$1,425
$1,300-$1,425
$1,385-$1,525
$1,385-$1,525
Total Gold
$253
$263
$950-$1,050
$1,050-$1,200
$1,200-$1,300
$1,250-$1,350
2021 Capital and Exploration Outlook
(millions)
Previous
Current
Capital expenditures
$110
$120
Exploration expenditures (including
Corporate Development)
$40
$40
Pre-development expenditures
$8.5
$8.5
CONFERENCE CALL, WEBCAST AND ONE-ON-ONE CALLS
A conference call and webcast will be held Thursday, August 5,
at 10:00 a.m. Eastern Time to discuss these results. We recommend
that you dial in at least 10 minutes before the call is due to
commence. You may join the conference call by dialing toll-free
1-833-350-1380 or for international dialing 1-647-689-6934. The
Participant Code is 8545015 and must be provided when dialing
in.
Hecla's live and archived webcast can be accessed below or at
www.hecla-mining.com under Investors/Events & Webcasts.
Webcast URL:
https://event.on24.com/wcc/r/3190524/9E67287A786A4FA2AC9BAFEDA3EB30E7
One-on one calls are available from 3:00 p.m. to 5:00 p.m. ET.
Hecla invites shareholders, investors, and other interested parties
to schedule a personal, 30-minute virtual meeting (video or
telephone) with a member of senior management to discuss
operations, exploration, or ESG matters. Click on the link below to
schedule a call (or copy and paste the link into your web browser).
You can select a topic once you have entered the meeting calendar.
If you are unable to book a time, either due to high demand or for
other reasons, please reach out to Russell Lawlar, Sr. Vice
President – CFO and Treasurer at rlawlar@hecla-mining.com or
208-769-4130.
One-on-One Meeting URL:
https://calendly.com/2021-august-vie
ABOUT HECLA
Founded in 1891, Hecla Mining Company (NYSE:HL) is the largest
silver producer in the United States. In addition to operating
mines in Alaska, Idaho, and Quebec, Canada, the Company owns a
number of exploration and pre-development projects in world-class
silver and gold mining districts throughout North America.
NOTES
Non-GAAP Financial Measures
Non-GAAP financial measures are intended to provide additional
information only and do not have any standard meaning prescribed by
generally accepted accounting principles in the United States
(GAAP). These measures should not be considered in isolation or as
a substitute for measures of performance prepared in accordance
with GAAP.
(1) 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 income (loss) applicable to common stockholders
is a non-GAAP measurement, a reconciliation of which to net income
(loss) applicable to common stockholders, the most comparable GAAP
measure, can be found at the end of the release. Adjusted net
income (loss) is a measure used by management to evaluate the
Company's operating performance but should not be considered an
alternative to net income (loss) 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 (loss), the most comparable GAAP measure,
can be found at the end of the release. Adjusted EBITDA is a
measure used by management to evaluate the Company's operating
performance but should not be considered an alternative to net
income (loss), or cash provided by operating activities as those
terms are defined by GAAP, and does not necessarily indicate
whether cash flows will be sufficient to fund cash needs. In
addition, the Company may use it when formulating performance goals
and targets under its incentive program.
(4) Net debt to adjusted EBITDA is a non-GAAP measurement, a
reconciliation of adjusted EBITDA and net debt to the closest GAAP
measurements of net income (loss) and debt can be found at the end
of the release. It is an important measure for management to
measure relative indebtedness and the ability to service the debt
relative to its peers. It is calculated as total debt outstanding
less total cash on hand divided by adjusted EBITDA.
(5) Cash cost, after by-product credits, per silver or gold
ounce is a non-GAAP measurement, a reconciliation of which to cost
of sales and other direct production costs and depreciation,
depletion and amortization (sometimes referred to as "cost of
sales" in this release), can be found at the end of the release. It
is an important operating statistic that management utilizes to
measure each mine's operating performance. It also allows the
benchmarking of performance of each mine versus those of our
competitors. As a primary silver mining company, management also
uses 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.
(6) 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 AISC is a non-GAAP measure that provides
additional information to management, investors and analysts to
help in the understanding of the economics of our operations and
performance compared to other producers and in the investor's
visibility by better defining the total costs associated with
production. Similarly, the statistic is useful in identifying
acquisition and investment opportunities as it provides a common
tool for measuring the financial performance of other mines with
varying geologic, metallurgical and operating characteristics. In
addition, the Company may use it when formulating performance goals
and targets under its incentive program.
Other
(7) Calculations for 2021 include silver, gold, lead and zinc
production from Greens Creek, 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 Statements to Investors on Forward-Looking
Statements
This 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. When a forward-looking statement expresses or implies an
expectation or belief as to future events or results, such
expectation or belief is expressed in good faith and believed to
have a reasonable basis. However, such statements are subject to
risks, uncertainties and other factors, which could cause actual
results to differ materially from future results expressed,
projected or implied by the forward-looking statements.
Forward-looking statements often address our expected future
business and financial performance and financial condition and
often contain words such as “anticipate,” “intend,” “plan,” “will,”
“could,” “would,” “estimate,” “should,” “expect,” “believe,”
“project,” “target,” “indicative,” “preliminary,” “potential” and
similar expressions. Forward-looking statements in this news
release may include, without limitation: (i) new mining methods
being tested at Lucky Friday to better manage seismicity and
potentially increase productivity; (ii) Green Creek's estimated
2021 silver production, gold production, cost of sales, cash cost,
and AISC; (iii) Casa Berardi's estimated 2021 gold production, cost
of sales, cash cost, and AISC; (iv) Ore from the 160 pit at Casa
Berardi is expected to start being mines and processed in Q4 2001,
concurrent with the processing of the last of the East Mine Crown
Pillar pit ore; (v) Lucky Friday's estimated 2021 silver
production, cost of sales, cash cost and AISC; (vi) expectation of
the Company to process 10,000 tons of refractory ore from the
Nevada operations at a third-party facility in the second half of
the year with production and remaining finished goods inventory to
be sold at that time; and (vii) Company-wide estimates of future
production, sales, costs of sales, cash cost, after by-product
credits, AISC, after by-product credits, as well as estimated
spending on capital, exploration and pre-development for 2021. The
material factors or assumptions used to develop such
forward-looking statements or forward-looking information include
that the prices assumed in the calculation of cash cost and ASIC
will occur and the Company’s plans for development and production
will proceed as expected and will not require revision as a result
of risks or uncertainties, whether known, unknown or unanticipated,
to which the Company’s operations are subject.
Estimates or expectations of future events or results are based
upon certain assumptions, which may prove to be incorrect, which
could cause actual results to differ from forward-looking
statements. Such assumptions, include, but are not limited to: (i)
there being no significant change to current geotechnical,
metallurgical, hydrological and other physical conditions; (ii)
permitting, development, operations and expansion of the Company’s
projects being consistent with current expectations and mine plans;
(iii) political/regulatory developments in any jurisdiction in
which the Company operates being consistent with its current
expectations; (iv) the exchange rate for the USD/CAD and USD/MXN,
being approximately consistent with current levels; (v) certain
price assumptions for gold, silver, lead and zinc; (vi) prices for
key supplies being approximately consistent with current levels;
(vii) the accuracy of our current mineral reserve and mineral
resource estimates; (viii) the Company’s plans for development and
production will proceed as expected and will not require revision
as a result of risks or uncertainties, whether known, unknown or
unanticipated; (ix) counterparties performing their obligations
under hedging instruments and put option contracts; (x) sufficient
workforce is available and trained to perform assigned tasks; (xi)
weather patterns and rain/snowfall within normal seasonal ranges so
as not to impact operations; (xii) relations with interested
parties, including Native Americans, remain productive; (xiii)
economic terms can be reached with third-party mill operators who
have capacity to process our ore; (xiv) maintaining availability of
water rights; (xv) factors do not arise that reduce available cash
balances; and (xvi) there being no material increases in our
current requirements to post or maintain reclamation and
performance bonds or collateral related thereto.
In addition, material risks that could cause actual results to
differ from forward-looking statements include, but are not limited
to: (i) gold, silver and other metals price volatility; (ii)
operating risks; (iii) currency fluctuations; (iv) increased
production costs and variances in ore grade or recovery rates from
those assumed in mining plans; (v) community relations; (vi)
conflict resolution and outcome of projects or oppositions; (vii)
litigation, political, regulatory, labor and environmental risks;
(viii) exploration risks and results, including that mineral
resources are not mineral reserves, they do not have demonstrated
economic viability and there is no certainty that they can be
upgraded to mineral reserves through continued exploration; (ix)
the failure of counterparties to perform their obligations under
hedging instruments; (x) we take a material impairment charge on
our Nevada operations; (xi) we are unable to remain in compliance
with all terms of the credit agreement in order to maintain
continued access to the revolver, and (xii) we are unable to
refinance the maturing senior notes. For a more detailed discussion
of such risks and other factors, see the Company’s 2020 Form 10-K,
filed on February 18, 2021, with the Securities and Exchange
Commission (SEC), as well as the Company’s other SEC filings. The
Company does not undertake any obligation to release publicly
revisions to any “forward-looking statement,” including, without
limitation, outlook, to reflect events or circumstances after the
date of this news release or to reflect the occurrence of
unanticipated events, except as may be required under applicable
securities laws. Investors should not assume that any lack of
update to a previously issued “forward-looking statement”
constitutes a reaffirmation of that statement. Continued reliance
on “forward-looking statements” is at investors’ own risk.
HECLA MINING COMPANY
Condensed Consolidated Statements
of Operations
(dollars and shares in thousands,
except per share amounts - unaudited)
Second Quarter Ended
Six Months Ended
June 30, 2021
June 30, 2020
June 30, 2021
June 30, 2020
Sales of products
$
217,983
$
166,355
$
428,835
$
303,280
Cost of sales and other direct production
costs
110,320
92,853
207,029
178,740
Depreciation, depletion and
amortization
48,403
39,423
97,734
79,089
158,723
132,276
304,763
257,829
Gross profit
59,260
34,079
124,072
45,451
Other operating expenses:
General and administrative
11,104
6,979
19,111
15,918
Exploration
8,367
1,962
14,318
4,492
Pre-development
2,874
563
3,613
1,098
Other operating expense
3,643
1,445
7,282
2,365
Provision for closed operations and
environmental matters
1,024
1,037
4,733
1,553
Ramp-up and suspension costs
5,786
9,572
10,104
22,568
Foundation grant
—
1,970
—
1,970
32,798
23,528
59,161
49,964
Income (loss) from operations
26,462
10,551
64,911
(4,513
)
Other income (expense):
Gain on exchange of investments
—
—
1,158
—
Unrealized (loss) gain on investments
(750
)
6,409
(4,256
)
5,431
(Loss) on derivative contracts
(17,313
)
(14,002
)
(16,840
)
(6,109
)
Net foreign exchange (loss) gain
(1,907
)
(3,205
)
(3,971
)
3,431
Other expense
(278
)
(1,326
)
(439
)
(1,749
)
Interest expense
(10,271
)
(11,829
)
(21,015
)
(28,140
)
(30,519
)
(23,953
)
(45,363
)
(27,136
)
(Loss) income before income and mining
taxes
(4,057
)
(13,402
)
19,548
(31,649
)
Income and mining tax (provision)
benefit
4,842
(626
)
208
436
Net income (loss)
785
(14,028
)
19,756
(31,213
)
Preferred stock dividends
(138
)
(138
)
(276
)
(276
)
Income (loss) applicable to common
shareholders
$
647
$
(14,166
)
$
19,480
$
(31,489
)
Basic and diluted income (loss) per common
share after preferred dividends (in cents)
0.1
(3.0
)
3.6
(6.0
)
Weighted average number of common shares
outstanding - basic
535,531
525,243
534,819
524,218
Weighted average number of common shares
outstanding - diluted
542,262
525,243
541,468
524,218
HECLA MINING COMPANY
Condensed Consolidated Statements
of Cash Flows
(dollars in thousands -
unaudited)
Second Quarter Ended
Six Months Ended
June 30, 2021
June 30, 2020
June 30, 2021
June 30, 2020
OPERATING ACTIVITIES
Net income (loss)
$
785
$
(14,028
)
$
19,756
$
(31,213
)
Non-cash elements included in net income
(loss):
Depreciation, depletion and
amortization
48,575
42,555
98,121
84,185
Write-down to stockpile inventory
6,242
—
6,431
—
Gain on sale of investments
—
—
(1,158
)
—
Unrealized loss (gain) on investments
750
(6,409
)
4,256
(5,431
)
Provision for reclamation and closure
costs
1,654
1,545
6,183
3,093
Stock compensation
2,802
1,209
3,302
2,428
Deferred income taxes
(8,594
)
(1,913
)
(8,562
)
(5,165
)
Amortization of loan origination fees and
loss on extinguishment of debt
379
484
918
2,624
Loss on derivative contracts
13,078
21,625
2,116
11,188
Foreign exchange loss (gain)
2,700
4,341
4,455
(3,725
)
Foundation grant
—
1,970
—
1,970
Other non-cash items, net
145
677
153
573
Change in assets and liabilities:
Accounts receivable
(6,768
)
(16,005
)
(9,432
)
(6,050
)
Inventories
3,788
2,022
5,719
(4,580
)
Other current and non-current assets
2,597
1,718
4,125
(924
)
Accounts payable and accrued
liabilities
18,056
(3,536
)
(6,489
)
(15,415
)
Accrued payroll and related benefits
2,644
(4,077
)
(5,351
)
5,418
Accrued taxes
(3,030
)
2,580
(999
)
3,912
Accrued reclamation and closure costs and
other non-current liabilities
501
2,768
696
(435
)
Cash provided by operating
activities
86,304
37,526
124,240
42,453
INVESTING ACTIVITIES
Additions to properties, plants, equipment
and mineral interests
(31,898
)
(10,819
)
(53,311
)
(30,689
)
Proceeds from disposition of properties,
plants and equipment
112
46
131
200
Purchases of investments
—
(637
)
—
(637
)
Net cash used in investing
activities
(31,786
)
(11,410
)
(53,180
)
(31,126
)
FINANCING ACTIVITIES
Acquisition of treasury shares
(4,525
)
(2,745
)
(4,525
)
(2,745
)
Dividends paid to common shareholders
(6,027
)
(1,318
)
(10,715
)
(2,622
)
Dividends paid to preferred
shareholders
(138
)
(138
)
(276
)
(276
)
Credit facility fees paid
—
(93
)
(82
)
(551
)
Borrowings on debt
—
—
—
679,500
Repayments of debt
—
(160,000
)
—
(666,500
)
Repayments of finance leases
(1,889
)
(1,556
)
(3,770
)
(2,840
)
Net cash (used in) provided by
financing activities
(12,579
)
(165,850
)
(19,368
)
3,966
Effect of exchange rates on cash
(195
)
(58
)
(28
)
(1,794
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
41,744
(139,792
)
51,664
13,499
Cash, cash equivalents and restricted cash
at beginning of period
140,803
216,768
130,883
63,477
Cash, cash equivalents and restricted cash
at end of period
$
182,547
$
76,976
$
182,547
$
76,976
Supplemental disclosure of cash flow
information:
Cash paid for interest
$
93
$
1,853
$
18,499
$
15,837
Cash paid for income and mining taxes
$
6,271
$
2,706
$
9,469
$
5,345
HECLA MINING COMPANY
Condensed Consolidated Balance
Sheets
(dollars and shares in thousands
- unaudited)
June 30, 2021
December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents
$
181,494
$
129,830
Accounts receivable:
Trade
41,311
27,864
Other, net
9,334
11,329
Inventories
82,962
96,544
Derivative assets
5,879
3,470
Other current assets
10,198
15,644
Total current assets
331,178
284,681
Investments
11,083
15,148
Restricted cash
1,053
1,053
Properties, plants, equipment and mineral
interests, net
2,305,359
2,345,219
Operating lease right-of-use asset
8,902
10,628
Deferred income taxes
5,090
2,912
Derivative assets
4,852
4,558
Other non-current assets
3,721
3,525
Total assets
$
2,671,238
$
2,667,724
LIABILITIES
Current liabilities:
Accounts payable and accrued
liabilities
$
62,183
$
68,516
Accrued payroll and related benefits
24,270
31,807
Accrued taxes
4,838
8,349
Finance leases
6,223
6,491
Operating leases
2,540
3,008
Other current liabilities
21,353
26,032
Accrued reclamation and closure costs
7,994
5,582
Total current liabilities
129,401
149,785
Finance leases
8,905
9,274
Operating leases
6,368
7,634
Accrued reclamation and closure costs
112,651
110,466
Long-term debt
508,611
507,242
Deferred tax liability
143,181
144,330
Pension liability
30,237
44,144
Other non-current liabilities
11,202
4,364
Total liabilities
950,556
977,239
SHAREHOLDERS’ EQUITY
Preferred stock
39
39
Common stock
136,065
134,629
Capital surplus
2,024,645
2,003,576
Accumulated deficit
(382,609
)
(391,374
)
Accumulated other comprehensive loss
(29,437
)
(32,889
)
Treasury stock
(28,021
)
(23,496
)
Total shareholders’ equity
1,720,682
1,690,485
Total liabilities and shareholders’
equity
$
2,671,238
$
2,667,724
Common shares outstanding
536,823
531,666
HECLA MINING COMPANY
Production Data
Three Months Ended
Six Months Ended
June 30, 2021
June 30, 2020
June 30, 2021
June 30, 2020
GREENS CREEK UNIT
Tons of ore milled
214,931
215,275
409,011
414,079
Total production cost per ton
$
171.13
$
171.03
$
176.58
$
178.18
Ore grade milled - Silver (oz./ton)
14.52
15.56
15.23
16.19
Ore grade milled - Gold (oz./ton)
0.081
0.084
0.085
0.084
Ore grade milled - Lead (%)
3.14
3.27
3.10
3.20
Ore grade milled - Zinc (%)
7.57
8.16
7.59
7.55
Silver produced (oz.)
2,558,447
2,753,919
5,143,317
5,529,626
Gold produced (oz.)
12,859
13,104
26,125
25,377
Lead produced (tons)
5,627
5,889
10,551
11,087
Zinc produced (tons)
14,610
16,184
27,964
28,671
Cash cost, after by-product credits, per
silver ounce 1
$
(2.64
)
$
5.19
$
(1.65
)
$
5.41
AISC, after by-product credits, per silver
ounce 1
$
0.68
$
7.11
$
1.14
$
7.51
Capital additions (in thousands)
$
6,339
$
4,501
$
11,231
$
10,011
LUCKY FRIDAY UNIT
Tons of ore milled
82,442
44,682
163,513
54,901
Total production cost per ton
$
199.48
$
—
$
188.30
—
Ore grade milled - Silver (oz./ton)
11.60
10.99
11.39
10.78
Ore grade milled - Lead (%)
7.55
7.33
7.53
7.31
Ore grade milled - Zinc (%)
3.44
4.07
3.57
4.03
Silver produced (oz.)
913,294
469,537
1,777,195
565,285
Lead produced (tons)
5,913
3,088
11,693
3,783
Zinc produced (tons)
2,601
1,671
5,354
2,031
Cash cost, after by-product credits, per
silver ounce 1
$
8.07
$
—
$
7.85
—
AISC, after by-product credits, per silver
ounce 1
$
14.10
$
—
$
14.17
$
—
Capital additions (in thousands)
$
5,731
$
4,761
$
11,643
$
9,056
CASA BERARDI UNIT
Tons of ore milled - underground
179,217
154,265
366,136
315,202
Tons of ore milled - surface pit
195,466
126,155
376,950
296,836
Tons of ore milled - total
374,683
280,420
743,086
612,038
Surface tons mined - ore and waste
2,033,403
930,117
4,024,490
2,655,091
Total production cost per ton
$
99.36
$
99.17
$
99.52
$
100.07
Ore grade milled - Gold (oz./ton) -
underground
0.148
0.163
0.162
0.135
Ore grade milled - Gold (oz./ton) -
surface pit
0.055
0.045
0.059
0.050
Ore grade milled - Gold (oz./ton) -
combined
0.100
0.130
0.110
0.115
Ore grade milled - Silver (oz./ton)
0.03
0.02
0.03
0.02
Gold produced (oz.) - underground
23,441
25,074
51,009
42,655
Gold produced (oz.) - surface pit
7,892
5,682
16,514
14,853
Gold produced (oz.) - total
31,333
30,756
67,523
57,508
Silver produced (oz.)
7,917
5,495
18,592
11,429
Cash cost, after by-product credits, per
gold ounce 1
$
1,199
$
919
$
1,106
$
1,081
AISC, after by-product credits, per gold
ounce 1
$
1,434
$
1,077
$
1,347
$
1,327
Capital additions (in thousands)
$
12,153
$
4,278
$
26,000
$
12,784
Three Months Ended
Six Months Ended
June 30, 2021
June 30, 2020
June 30, 2021
June 30, 2020
SAN SEBASTIAN
Tons of ore milled
—
21,647
—
57,123
Total production cost per ton
$
—
$
100.12
$
—
$
148.50
Ore grade milled - Silver (oz./ton)
—
7.96
—
9.63
Ore grade milled - Gold (oz./ton)
—
0.074
—
0.085
Silver produced (oz.)
—
158,842
—
505,467
Gold produced (oz.)
—
1,331
—
4,133
Cash cost, after by-product credits, per
silver ounce 1
$
—
$
1.14
$
—
$
5.09
AISC, after by-product credits, per silver
ounce 1
$
—
$
1.85
$
—
$
5.65
Capital additions (in thousands)
$
7
$
(499
)
$
7
$
304
NEVADA OPERATIONS
Tons of ore milled
38,947
10,686
55,406
27,984
Total production cost per ton
$
161.50
$
1,172.66
$
220.68
$
892.09
Ore grade milled - Gold (oz./ton)
0.41
1.519
0.343
1.232
Ore grade milled - Silver (oz./ton)
1.24
2.07
0.88
1.7
Gold produced (oz.)
14,947
14,791
17,495
31,756
Silver produced (oz.)
45,125
15,988
45,125
37,443
Cash cost, after by-product credits, per
gold ounce 1
$
1,369
$
694
$
1,371
$
716
AISC, after by-product credits, per gold
ounce 1
$
1,386
$
769
$
1,393
$
787
Capital additions (in thousands)
$
77
$
612
$
166
$
1,469
(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 (GAAP) to Cash Cost, Before
By-product Credits and Cash Cost, After By-product Credits
(non-GAAP) and All-In Sustaining Cost, Before By-product Credits
and All-In Sustaining Cost, After By-product Credits
(non-GAAP)
The tables below present reconciliations between the most
comparable GAAP measure of cost of sales and other direct
production costs and depreciation, depletion and amortization to
the non-GAAP measures of Cash Cost, Before By-product Credits, Cash
Cost, After By-product Credits, AISC, Before By-product Credits and
AISC, After By-product Credits for our operations at the Greens
Creek, Lucky Friday, San Sebastian, Casa Berardi and Nevada
Operations units for the three- and six-month periods ended June
30, 2021 and 2020.
Cash Cost, After By-product Credits, per Ounce and AISC, After
By-product Credits, per Ounce are measures developed by precious
metals companies (including the Silver Institute and the World Gold
Council) 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. AISC, After By-product Credits, per Ounce is
an important operating statistic that we utilize as a measures of
our mines' net cash flow after costs for exploration,
pre-development, reclamation, and sustaining capital. Current GAAP
measures used in the mining industry, such as cost of goods sold,
do not capture all the expenditures incurred to discover, develop
and sustain silver and gold production. Cash Cost, After By-product
Credits, per Ounce and AISC, After By-product Credits, per Ounce
also allow us to benchmark the performance of each of our mines
versus those of our competitors. As a silver and gold mining
company, we also use these statistics on an aggregate basis -
aggregating the Greens Creek, Lucky Friday and San Sebastian mines
- to compare our performance with that of other silver mining
companies, and aggregating Casa Berardi and Nevada Operations for
comparison to other gold mining companies. Similarly, these
statistics are useful in identifying acquisition and investment
opportunities as they provide a common tool for measuring the
financial performance of other mines with varying geologic,
metallurgical and operating characteristics.
Cash Cost, Before By-product Credits and AISC, Before By-product
Credits include all direct and indirect operating cash costs
related directly to the physical activities of producing metals,
including mining, processing and other plant costs, third-party
refining expense, on-site general and administrative costs,
royalties and mining production taxes. AISC, Before By-product
Credits for each mine also includes on-site exploration,
reclamation, and sustaining capital costs. AISC, Before By-product
Credits for our consolidated silver properties also includes
corporate costs for general and administrative expense,
reclamation, exploration, and pre-development. By-product credits
include revenues earned from all metals other than the primary
metal produced at each unit. As depicted in the tables below,
by-product credits comprise an essential element of our silver unit
cost structure, distinguishing our silver operations due to the
polymetallic nature of their orebodies. Cash Cost, After By-product
Credits, per Ounce and AISC, After By-product Credits, per Ounce
provide management and investors an indication of operating cash
flow, after consideration of the average price, received from
production. We also use these measurements for the comparative
monitoring of performance of our mining operations period-to-period
from a cash flow perspective.
The Casa Berardi, Nevada Operations and combined gold properties
information below reports Cash Cost, After By-product Credits, per
Gold Ounce and AISC, After By-product Credits, per Gold Ounce for
the production of gold, its 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 gold metrics for Casa Berardi and Nevada
Operations.
In thousands (except per ounce
amounts)
Three Months Ended June 30,
2021
Greens Creek
Lucky Friday(2)
San Sebastian(3)
Corporate(4)
Total Silver
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
55,488
27,901
$
1
$
83,390
Depreciation, depletion and
amortization
(14,492
)
(7,402
)
—
(21,894
)
Treatment costs
8,924
4,686
—
13,610
Change in product inventory
(435
)
(1,596
)
—
(2,031
)
Reclamation and other costs
(672
)
(325
)
(1
)
(998
)
Cash Cost, Before By-product Credits
(1)
48,813
23,264
—
72,077
Reclamation and other costs
847
264
—
1,111
Sustaining exploration
1,300
—
—
450
1,750
Sustaining capital
6,339
5,244
—
—
11,583
General and administrative
—
—
—
11,104
11,104
AISC, Before By-product Credits (1)
57,299
28,772
—
97,625
By-product credits:
Zinc
(26,510
)
(5,093
)
—
(31,603
)
Gold
(20,438
)
—
—
(20,438
)
Lead
(8,605
)
(10,799
)
$
—
(19,404
)
Total By-product credits
(55,553
)
(15,892
)
—
(71,445
)
Cash Cost, After By-product Credits
$
(6,740
)
$
7,372
$
—
$
632
AISC, After By-product Credits
$
1,746
$
12,880
$
—
$
26,180
Divided by ounces produced
2,558
913
—
3,471
Cash Cost, Before By-product Credits, per
Ounce
$
19.08
$
25.49
$
—
$
20.76
By-product credits per ounce
(21.72
)
(17.42
)
—
(20.58
)
Cash Cost, After By-product Credits, per
Ounce
$
(2.64
)
$
8.07
$
—
$
0.18
AISC, Before By-product Credits, per
Ounce
$
22.40
$
31.52
$
—
$
28.12
By-product credits per ounce
(21.72
)
(17.42
)
—
(20.58
)
AISC, After By-product Credits, per
Ounce
$
0.68
$
14.10
$
—
$
7.54
In thousands (except per ounce amounts)
Three months ended June 30,
2021
Casa Berardi
Nevada Operations (5)
Total Gold
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
57,340
$
17,993
$
75,333
Depreciation, depletion and
amortization
(20,910
)
(5,599
)
(26,509
)
Treatment costs
535
1,719
2,254
Change in product inventory
1,015
12,583
13,598
Reclamation and other costs
(215
)
(218
)
(433
)
Exclusion of Nevada Operations costs
—
(4,914
)
(4,914
)
Cash Cost, Before By-product Credits
(1)
37,765
21,564
59,329
Reclamation and other costs
215
218
433
Sustaining exploration
1,103
—
1,103
Sustaining capital
6,064
44
6,108
AISC, Before By-product Credits (1)
45,147
21,826
66,973
By-product credits:
Silver
(209
)
(1,103
)
(1,312
)
Total By-product credits
(209
)
(1,103
)
(1,312
)
Cash Cost, After By-product Credits
$
37,556
$
20,461
$
58,017
AISC, After By-product Credits
$
44,938
$
20,723
$
65,661
Divided by ounces produced
31
15
46
Cash Cost, Before By-product Credits, per
Ounce
$
1,206
$
1,443
$
1,282
By-product credits per ounce
(7
)
(74
)
(28
)
Cash Cost, After By-product Credits, per
Ounce
$
1,199
$
1,369
$
1,254
AISC, Before By-product Credits, per
Ounce
$
1,441
$
1,460
$
1,447
By-product credits per ounce
(7
)
(74
)
(28
)
AISC, After By-product Credits, per
Ounce
$
1,434
$
1,386
$
1,419
In thousands (except per ounce amounts)
Three months ended June 30,
2021
Total Silver
Total Gold
Total
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
83,390
$
75,333
$
158,723
Depreciation, depletion and
amortization
(21,894
)
(26,509
)
(48,403
)
Treatment costs
13,610
2,254
15,864
Change in product inventory
(2,031
)
13,598
11,567
Reclamation and other costs
(998
)
(433
)
(1,431
)
Exclusion of Nevada Operations costs
—
(4,914
)
(4,914
)
Cash Cost, Before By-product Credits
(1)
72,077
59,329
131,406
Reclamation and other costs
1,111
433
1,544
Sustaining exploration
1,750
1,103
2,853
Sustaining capital
11,583
6,108
17,691
General and administrative
11,104
—
11,104
AISC, Before By-product Credits (1)
97,625
66,973
164,598
By-product credits:
Zinc
(31,603
)
—
(31,603
)
Gold
(20,438
)
—
(20,438
)
Lead
(19,404
)
—
(19,404
)
Silver
—
(1,312
)
(1,312
)
Total By-product credits
(71,445
)
(1,312
)
(72,757
)
Cash Cost, After By-product Credits
$
632
$
58,017
$
58,649
AISC, After By-product Credits
$
26,180
$
65,661
$
91,841
Divided by ounces produced
3,471
46
Cash Cost, Before By-product Credits, per
Ounce
$
20.76
$
1,282
By-product credits per ounce
(20.58
)
(28
)
Cash Cost, After By-product Credits, per
Ounce
$
0.18
$
1,254
AISC, Before By-product Credits, per
Ounce
$
28.12
$
1,447
By-product credits per ounce
(20.58
)
(28
)
AISC, After By-product Credits, per
Ounce
$
7.54
$
1,419
In thousands (except per ounce amounts)
Three Months Ended June 30,
2020
Greens Creek
Lucky Friday(2)
San Sebastian
Corporate(4)
Total Silver
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
57,672
$
11,455
$
4,010
$
73,137
Depreciation, depletion and
amortization
(12,988
)
(1,894
)
(895
)
(15,777
)
Treatment costs
20,016
3,032
47
23,095
Change in product inventory
(4,020
)
(118
)
(398
)
(4,536
)
Reclamation and other costs
93
—
(296
)
(203
)
Exclusion of Lucky Friday cash cost
—
(12,475
)
—
(12,475
)
Cash Cost, Before By-product Credits
(1)
60,773
—
2,468
63,241
Reclamation and other costs
789
—
114
903
Sustaining exploration
—
—
—
314
314
Sustaining capital
4,501
—
(1
)
—
4,500
General and administrative
6,979
6,979
AISC, Before By-product Credits (1)
66,063
—
2,581
75,937
By-product credits:
Zinc
(19,913
)
—
—
(19,913
)
Gold
(19,427
)
—
(2,287
)
(21,714
)
Lead
(7,133
)
—
—
(7,133
)
Total By-product credits
(46,473
)
—
(2,287
)
(48,760
)
Cash Cost, After By-product Credits
$
14,300
$
—
$
181
$
14,481
AISC, After By-product Credits
$
19,590
$
—
$
294
$
27,177
Divided by ounces produced
2,754
—
158
2,912
Cash Cost, Before By-product Credits, per
Ounce
$
22.06
$
—
$
15.61
$
21.71
By-product credits per ounce
(16.87
)
—
(14.47
)
(16.74
)
Cash Cost, After By-product Credits, per
Ounce
$
5.19
$
—
$
1.14
$
4.97
AISC, Before By-product Credits, per
Ounce
$
23.98
$
—
$
16.32
$
26.07
By-product credits per ounce
(16.87
)
—
(14.47
)
(16.74
)
AISC, After By-product Credits, per
Ounce
$
7.11
$
—
$
1.85
$
9.33
In thousands (except per ounce amounts)
Three Months Ended June 30,
2020
Casa Berardi (6)
Nevada Operations (5)
Total Gold
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
45,582
$
13,557
$
59,139
Depreciation, depletion and
amortization
(17,281
)
(6,365
)
(23,646
)
Treatment costs
558
19
577
Change in product inventory
(400
)
3,669
3,269
Reclamation and other costs
(92
)
(328
)
(420
)
Cash Cost, Before By-product Credits
(1)
28,367
10,552
38,919
Reclamation and other costs
94
327
421
Sustaining exploration
467
—
467
Sustaining capital
4,278
774
5,052
AISC, Before By-product Credits (1)
33,206
11,653
44,859
By-product credits:
Silver
(92
)
(282
)
(374
)
Total By-product credits
(92
)
(282
)
(374
)
Cash Cost, After By-product Credits
$
28,275
$
10,270
$
38,545
AISC, After By-product Credits
$
33,114
$
11,371
$
44,485
Divided by ounces produced
31
15
46
Cash Cost, Before By-product Credits, per
Ounce
$
922
$
713
$
854
By-product credits per ounce
(3
)
(19
)
(8
)
Cash Cost, After By-product Credits, per
Ounce
$
919
$
694
$
846
AISC, Before By-product Credits, per
Ounce
$
1,080
$
788
$
985
By-product credits per ounce
(3
)
(19
)
(8
)
AISC, After By-product Credits, per
Ounce
$
1,077
$
769
$
977
In thousands (except per ounce amounts)
Three Months Ended June 30,
2020
Total Silver
Total Gold
Total
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
73,137
$
59,139
$
132,276
Depreciation, depletion and
amortization
(15,777
)
(23,646
)
(39,423
)
Treatment costs
23,095
577
23,672
Change in product inventory
(4,536
)
3,269
(1,267
)
Reclamation and other costs
(203
)
(420
)
(623
)
Exclusion of Lucky Friday cash cost
(12,475
)
—
(12,475
)
Cash Cost, Before By-product Credits
(1)
63,241
38,919
102,160
Reclamation and other costs
903
421
1,324
Sustaining exploration
314
467
781
Sustaining capital
4,500
5,052
9,552
General and administrative
6,979
—
6,979
AISC, Before By-product Credits (1)
75,937
44,859
120,796
By-product credits:
Zinc
(19,913
)
—
(19,913
)
Gold
(21,714
)
—
(21,714
)
Lead
(7,133
)
—
(7,133
)
Silver
(374
)
(374
)
Total By-product credits
(48,760
)
(374
)
(49,134
)
Cash Cost, After By-product Credits
$
14,481
$
38,545
$
53,026
AISC, After By-product Credits
$
27,177
$
44,485
$
71,662
Divided by ounces produced
2,912
46
Cash Cost, Before By-product Credits, per
Ounce
$
21.71
$
854
By-product credits per ounce
(16.74
)
(8
)
Cash Cost, After By-product Credits, per
Ounce
$
4.97
$
846
AISC, Before By-product Credits, per
Ounce
$
26.07
$
985
By-product credits per ounce
(16.74
)
(8
)
AISC, After By-product Credits, per
Ounce
$
9.33
$
977
In thousands (except per ounce amounts)
Six Months Ended June 30,
2021
Greens Creek
Lucky Friday(2)
San Sebastian(3)
Corporate(4)
Total Silver
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
108,668
$
50,696
$
95
$
159,459
Depreciation, depletion and
amortization
(29,313
)
(13,738
)
—
(43,051
)
Treatment costs
19,465
9,664
—
29,129
Change in product inventory
(34
)
(1,689
)
—
(1,723
)
Reclamation and other costs
(932
)
(559
)
(95
)
(1,586
)
Cash Cost, Before By-product Credits
(1)
97,854
44,374
—
142,228
Reclamation and other costs
1,695
528
2,223
Sustaining exploration
1,423
—
—
885
2,308
Sustaining capital
11,231
10,698
—
21,929
General and administrative
—
—
—
19,111
19,111
AISC, Before By-product Credits (1)
112,203
55,600
—
187,799
By-product credits:
Zinc
(49,277
)
(9,846
)
—
(59,123
)
Gold
(41,434
)
—
—
(41,434
)
Lead
(15,625
)
(20,574
)
—
(36,199
)
Total By-product credits
(106,336
)
(30,420
)
—
(136,756
)
Cash Cost, After By-product Credits
$
(8,482
)
$
13,954
$
—
$
5,472
AISC, After By-product Credits
$
5,867
$
25,180
$
—
$
51,043
Divided by ounces produced
5,143
1,777
6,920
Cash Cost, Before By-product Credits, per
Ounce
$
19.03
$
24.97
$
—
$
20.55
By-product credits per ounce
(20.68
)
(17.12
)
—
(19.76
)
Cash Cost, After By-product Credits, per
Ounce
$
(1.65
)
$
7.85
$
—
$
0.79
AISC, Before By-product Credits, per
Ounce
$
21.82
$
31.29
$
—
$
27.14
By-product credits per ounce
(20.68
)
(17.12
)
—
(19.76
)
AISC, After By-product Credits, per
Ounce
$
1.14
$
14.17
$
—
$
7.38
In thousands (except per ounce amounts)
Six Months Ended June 30,
2021
Casa Berardi
Nevada Operations (5)
Total Gold
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
119,856
$
25,448
$
145,304
Depreciation, depletion and
amortization
(46,451
)
(8,232
)
(54,683
)
Treatment costs
1,249
1,730
2,979
Change in product inventory
968
11,499
12,467
Reclamation and other costs
(423
)
(245
)
(668
)
Exclusion of Nevada Operations costs
—
(5,103
)
(5,103
)
Cash Cost, Before By-product Credits
(1)
75,199
25,097
100,296
Reclamation and other costs
423
245
668
Sustaining exploration
2,010
—
2,010
Sustaining capital
13,822
133
13,955
AISC, Before By-product Credits (1)
91,454
25,475
116,929
By-product credits:
Silver
(487
)
(1,103
)
(1,590
)
Total By-product credits
(487
)
(1,103
)
(1,590
)
Cash Cost, After By-product Credits
$
74,712
$
23,994
$
98,706
AISC, After By-product Credits
$
90,967
$
24,372
$
115,339
Divided by ounces produced
68
17
85
Cash Cost, Before By-product Credits, per
Ounce
$
1,113
$
1,434
$
1,180
By-product credits per ounce
(7
)
(63
)
(19
)
Cash Cost, After By-product Credits, per
Ounce
$
1,106
$
1,371
$
1,161
AISC, Before By-product Credits, per
Ounce
$
1,354
$
1,456
$
1,376
By-product credits per ounce
(7
)
(63
)
(19
)
AISC, After By-product Credits, per
Ounce
$
1,347
$
1,393
$
1,357
In thousands (except per ounce amounts)
Six Months Ended June 30,
2021
Total Silver
Total Gold
Total
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
159,459
$
145,304
$
304,763
Depreciation, depletion and
amortization
(43,051
)
(54,683
)
(97,734
)
Treatment costs
29,129
2,979
32,108
Change in product inventory
(1,723
)
12,467
10,744
Reclamation and other costs
(1,586
)
(668
)
(2,254
)
Exclusion of Nevada Operations costs
—
(5,103
)
(5,103
)
Cash Cost, Before By-product Credits
(1)
142,228
100,296
242,524
Reclamation and other costs
2,223
668
2,891
Sustaining exploration
2,308
2,010
4,318
Sustaining capital
21,929
13,955
35,884
General and administrative
19,111
—
19,111
AISC, Before By-product Credits (1)
187,799
116,929
304,728
By-product credits:
Zinc
(59,123
)
—
(59,123
)
Gold
(41,434
)
—
(41,434
)
Lead
(36,199
)
—
(36,199
)
Silver
(1,590
)
(1,590
)
Total By-product credits
(136,756
)
(1,590
)
(138,346
)
Cash Cost, After By-product Credits
$
5,472
$
98,706
$
104,178
AISC, After By-product Credits
$
51,043
$
115,339
$
166,382
Divided by ounces produced
6,920
85
Cash Cost, Before By-product Credits, per
Ounce
$
20.55
$
1,180
By-product credits per ounce
(19.76
)
(19
)
Cash Cost, After By-product Credits, per
Ounce
$
0.79
$
1,161
AISC, Before By-product Credits, per
Ounce
$
27.14
$
1,376
By-product credits per ounce
(19.76
)
(19
)
AISC, After By-product Credits, per
Ounce
$
7.38
$
1,357
In thousands (except per ounce amounts)
Six Months Ended June 30,
2020
Greens Creek
Lucky Friday(2)
San Sebastian
Corporate(4)
Total Silver
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
106,853
$
14,287
$
12,311
$
133,451
Depreciation, depletion and
amortization
(25,417
)
(2,196
)
(2,368
)
(29,981
)
Treatment costs
35,842
3,464
151
39,457
Change in product inventory
(1,150
)
796
(145
)
(499
)
Reclamation and other costs
413
—
(658
)
(245
)
Exclusion of Lucky Friday cash cost
—
(16,351
)
—
(16,351
)
Cash Cost, Before By-product Credits
(1)
116,541
—
9,291
125,832
Reclamation and other costs
1,577
—
228
1,805
Sustaining exploration
4
—
—
664
668
Sustaining capital
10,011
—
55
—
10,066
General and administrative
—
—
—
15,918
15,918
AISC, Before By-product Credits (1)
128,133
—
9,574
154,289
By-product credits:
Zinc
(35,939
)
—
—
(35,939
)
Gold
(36,624
)
(6,716
)
(43,340
)
Lead
(14,059
)
—
—
(14,059
)
Total By-product credits
(86,622
)
—
(6,716
)
(93,338
)
Cash Cost, After By-product Credits
$
29,919
$
—
$
2,575
$
32,494
AISC, After By-product Credits
$
41,511
$
—
$
2,858
$
60,951
Divided by ounces produced
5,530
—
505
6,035
Cash Cost, Before By-product Credits, per
Ounce
$
21.07
$
—
$
18.39
$
20.85
By-product credits per ounce
(15.66
)
—
(13.30
)
(15.47
)
Cash Cost, After By-product Credits, per
Ounce
$
5.41
$
—
$
5.09
$
5.38
AISC, Before By-product Credits, per
Ounce
$
23.17
$
—
$
18.95
$
25.57
By-product credits per ounce
(15.66
)
—
(13.30
)
(15.47
)
AISC, After By-product Credits, per
Ounce
$
7.51
$
—
$
5.65
$
10.10
In thousands (except per ounce amounts)
Six Months Ended June 30,
2020
Casa Berardi (6)
Nevada Operations (5)
Total Gold
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
93,907
$
30,471
$
124,378
Depreciation, depletion and
amortization
(33,678
)
(15,430
)
(49,108
)
Treatment costs
1,132
45
1,177
Change in product inventory
1,208
8,949
10,157
Reclamation and other costs
(189
)
(654
)
(843
)
Cash Cost, Before By-product Credits
(1)
62,380
23,381
85,761
Reclamation and other costs
190
654
844
Sustaining exploration
1,158
—
1,158
Sustaining capital
12,784
1,600
14,384
AISC, Before By-product Credits (1)
76,512
25,635
102,147
By-product credits:
Silver
(192
)
(635
)
(827
)
Total By-product credits
(192
)
(635
)
(827
)
Cash Cost, After By-product Credits
$
62,188
$
22,746
$
84,934
AISC, After By-product Credits
$
76,320
$
25,000
$
101,320
Divided by ounces produced
58
32
90
Cash Cost, Before By-product Credits, per
Ounce
$
1,084
$
736
$
961
By-product credits per ounce
(3
)
(20
)
(9
)
Cash Cost, After By-product Credits, per
Ounce
$
1,081
$
716
$
952
AISC, Before By-product Credits, per
Ounce
$
1,330
$
807
$
1,144
By-product credits per ounce
(3
)
(20
)
(9
)
AISC, After By-product Credits, per
Ounce
$
1,327
$
787
$
1,135
In thousands (except per ounce amounts)
Six Months Ended June 30,
2020
Total Silver
Total Gold
Total
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
133,451
$
124,378
$
257,829
Depreciation, depletion and
amortization
(29,981
)
(49,108
)
(79,089
)
Treatment costs
39,457
1,177
40,634
Change in product inventory
(499
)
10,157
9,658
Reclamation and other costs
(245
)
(843
)
(1,088
)
Exclusion of Lucky Friday cash cost
(16,351
)
—
(16,351
)
Cash Cost, Before By-product Credits
(1)
125,832
85,761
211,593
Reclamation and other costs
1,805
844
2,649
Sustaining exploration
668
1,158
1,826
Sustaining capital
10,066
14,384
24,450
General and administrative
15,918
—
15,918
AISC, Before By-product Credits (1)
154,289
102,147
256,436
By-product credits:
Zinc
(35,939
)
—
(35,939
)
Gold
(43,340
)
—
(43,340
)
Lead
(14,059
)
—
(14,059
)
Silver
(827
)
(827
)
Total By-product credits
(93,338
)
(827
)
(94,165
)
Cash Cost, After By-product Credits
$
32,494
$
84,934
$
117,428
AISC, After By-product Credits
$
60,951
$
101,320
$
162,271
Divided by ounces produced
6,035
90
Cash Cost, Before By-product Credits, per
Ounce
$
20.85
$
961
By-product credits per ounce
(15.47
)
$
(9
)
Cash Cost, After By-product Credits, per
Ounce
$
5.38
$
952
AISC, Before By-product Credits, per
Ounce
$
25.57
$
1,144
By-product credits per ounce
(15.47
)
$
(9
)
AISC, After By-product Credits, per
Ounce
$
10.10
$
1,135
In thousands (except per ounce amounts)
Previous Estimate for Twelve
Months Ended December 31, 2021
Greens Creek
Lucky Friday
San Sebastian
Corporate(4)
Total Silver
Total cost of sales
$
213,000
$
90,400
$
—
$
303,400
Depreciation, depletion and
amortization
(55,000
)
(26,000
)
—
(81,000
)
Treatment costs
38,000
17,100
—
55,100
Change in product inventory
4,000
—
—
4,000
Reclamation and other costs
4,500
1,000
—
5,500
Cash Cost, Before By-product Credits
(1)
204,500
82,500
—
287,000
Reclamation and other costs
4,500
500
—
5,000
Exploration
4,000
—
—
4,000
Sustaining capital
36,000
22,000
—
58,000
General and administrative
—
—
—
34,500
34,500
AISC, Before By-product Credits (1)
249,000
105,000
—
388,500
By-product credits:
Zinc
(86,000
)
(14,500
)
—
(100,500
)
Gold
(70,000
)
—
—
(70,000
)
Lead
(28,000
)
(38,900
)
—
(66,900
)
Total By-product credits
(184,000
)
(53,400
)
—
(237,400
)
Cash Cost, After By-product Credits
$
20,500
$
29,100
$
—
$
49,600
AISC, After By-product Credits
$
65,000
$
51,600
$
—
$
151,100
Divided by silver ounces produced
9,850
3,600
—
13,450
Cash Cost, Before By-product Credits, per
Silver Ounce
$
20.76
$
22.92
$
—
$
21.34
By-product credits per silver ounce
(18.68
)
(14.83
)
—
(17.65
)
Cash Cost, After By-product Credits, per
Silver Ounce
$
2.08
$
8.09
$
—
$
3.69
AISC, Before By-product Credits, per
Silver Ounce
$
25.28
$
29.17
$
—
$
28.88
By-product credits per silver ounce
(18.68
)
(14.83
)
—
(17.65
)
AISC, After By-product Credits, per Silver
Ounce
$
6.60
$
14.34
$
—
$
11.23
In thousands (except per ounce amounts)
Previous Estimate for Twelve
Months Ended December 31, 2021
Casa Berardi
Nevada Operations
Total Gold
Total cost of sales
$
212,000
$
41,000
$
253,000
Depreciation, depletion and
amortization
(87,500
)
(5,600
)
(93,100
)
Treatment costs
400
4,600
5,000
Change in product inventory
(9,000
)
(11,600
)
(20,600
)
Reclamation and other costs
300
500
800
Cash Cost, Before By-product Credits
(1)
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 (1)
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
$
1,201
$
1,476
$
1,241
By-product credits per gold ounce
(5
)
(26
)
(8
)
AISC, After By-product Credits, per Gold
Ounce
$
1,196
$
1,450
$
1,233
In thousands (except per ounce amounts)
Previous Estimate for Twelve
Months Ended December 31, 2021
Total Silver
Total Gold
Total
Total cost of sales
$
303,400
$
253,000
$
556,400
Depreciation, depletion and
amortization
(81,000
)
(93,100
)
(174,100
)
Treatment costs
55,100
5,000
60,100
Change in product inventory
4,000
(20,600
)
(16,600
)
Reclamation and other costs
5,500
800
6,300
Cash Cost, Before By-product Credits
(1)
287,000
145,100
432,100
Reclamation and other costs
5,000
600
5,600
Exploration
4,000
3,800
7,800
Sustaining capital
58,000
33,500
91,500
General and administrative
34,500
—
34,500
AISC, Before By-product Credits (1)
388,500
183,000
571,500
By-product credits:
Zinc
(100,500
)
—
(100,500
)
Gold
(70,000
)
—
(70,000
)
Lead
(66,900
)
—
(66,900
)
Silver
(1,150
)
(1,150
)
Total By-product credits
(237,400
)
(1,150
)
(238,550
)
Cash Cost, After By-product Credits
$
49,600
$
143,950
$
193,550
AISC, After By-product Credits
$
151,100
$
181,850
$
332,950
Divided by ounces produced
13,450
148
Cash Cost, Before By-product Credits, per
Ounce
$
21.34
$
984
By-product credits per ounce
(17.65
)
(8
)
Cash Cost, After By-product Credits, per
Ounce
$
3.69
$
976
AISC, Before By-product Credits, per
Ounce
$
28.88
$
1,241
By-product credits per ounce
(17.65
)
(8
)
AISC, After By-product Credits, per
Ounce
$
11.23
$
1,233
In thousands (except per ounce amounts)
Current Estimate for Twelve
Months Ended December 31, 2021
Greens Creek
Lucky Friday
San Sebastian
Corporate(4)
Total Silver
Total cost of sales
$
222,000
$
102,500
$
—
$
324,500
Depreciation, depletion and
amortization
(59,200
)
(27,400
)
—
(86,600
)
Treatment costs
37,500
14,500
—
52,000
Change in product inventory
(3,700
)
(1,250
)
—
(4,950
)
Reclamation and other costs
1,500
1,500
—
3,000
Cash Cost, Before By-product Credits
(1)
198,100
89,850
—
287,950
Reclamation and other costs
3,400
1,000
—
4,400
Exploration
4,300
—
—
1,732
6,032
Sustaining capital
35,000
26,500
—
61,500
General and administrative
—
—
—
38,700
38,700
AISC, Before By-product Credits (1)
240,800
117,350
—
398,582
By-product credits:
Zinc
(98,000
)
(17,000
)
—
(115,000
)
Gold
(75,100
)
—
—
(75,100
)
Lead
(31,000
)
(43,000
)
—
(74,000
)
Total By-product credits
(204,100
)
(60,000
)
—
(264,100
)
Cash Cost, After By-product Credits
$
(6,000
)
$
29,850
$
—
$
23,850
AISC, After By-product Credits
$
36,700
$
57,350
$
—
$
134,482
Divided by silver ounces produced
9,850
3,600
—
13,450
Cash Cost, Before By-product Credits, per
Silver Ounce
$
20.11
$
24.96
$
—
$
21.41
By-product credits per silver ounce
(20.72
)
(16.67
)
—
(19.64
)
Cash Cost, After By-product Credits, per
Silver Ounce
$
(0.61
)
$
8.29
$
—
$
1.77
AISC, Before By-product Credits, per
Silver Ounce
$
24.45
$
32.60
$
—
$
29.63
By-product credits per silver ounce
(20.72
)
(16.67
)
—
(19.64
)
AISC, After By-product Credits, per Silver
Ounce
$
3.73
$
15.93
$
—
$
10.00
In thousands (except per ounce amounts)
Current Estimate for Twelve
Months Ended December 31, 2021
Casa Berardi
Nevada Operations
Total Gold
Total cost of sales
$
220,000
$
42,600
$
262,600
Depreciation, depletion and
amortization
(81,000
)
(14,500
)
(95,500
)
Treatment costs
500
5,000
5,500
Change in product inventory
(3,800
)
(4,650
)
(8,450
)
Reclamation and other costs
850
675
1,525
Cash Cost, Before By-product Credits
(1)
136,550
29,125
165,675
Reclamation and other costs
700
300
1,000
Exploration
4,000
—
4,000
Sustaining capital
26,000
125
26,125
AISC, Before By-product Credits (1)
167,250
29,550
196,800
By-product credits:
Silver
(875
)
(1,125
)
(2,000
)
Total By-product credits
(875
)
(1,125
)
(2,000
)
Cash Cost, After By-product Credits
$
135,675
$
28,000
$
163,675
AISC, After By-product Credits
$
166,375
$
28,425
$
194,800
Divided by gold ounces produced
130
21
151
Cash Cost, Before By-product Credits, per
Gold Ounce
$
1,050
$
1,421
$
1,101
By-product credits per gold ounce
(7
)
(55
)
(13
)
Cash Cost, After By-product Credits, per
Gold Ounce
$
1,043
$
1,366
$
1,088
AISC, Before By-product Credits, per Gold
Ounce
$
1,287
$
1,441
$
1,308
By-product credits per gold ounce
(7
)
(55
)
(13
)
AISC, After By-product Credits, per Gold
Ounce
$
1,280
$
1,386
$
1,295
In thousands (except per ounce amounts)
Current Estimate for Twelve
Months Ended December 31, 2021
Total Silver
Total Gold
Total
Total cost of sales
$
324,500
$
262,600
$
587,100
Depreciation, depletion and
amortization
(86,600
)
(95,500
)
(182,100
)
Treatment costs
52,000
5,500
57,500
Change in product inventory
(4,950
)
(8,450
)
(13,400
)
Reclamation and other costs
3,000
1,525
4,525
Cash Cost, Before By-product Credits
(1)
287,950
165,675
453,625
Reclamation and other costs
4,400
1,000
5,400
Exploration
6,032
4,000
10,032
Sustaining capital
61,500
26,125
87,625
General and administrative
38,700
—
38,700
AISC, Before By-product Credits (1)
398,582
196,800
595,382
By-product credits:
Zinc
(115,000
)
—
(117,600
)
Gold
(75,100
)
—
(75,100
)
Lead
(74,000
)
—
(77,800
)
Silver
(2,000
)
(2,000
)
Total By-product credits
(264,100
)
(2,000
)
(272,500
)
Cash Cost, After By-product Credits
$
23,850
$
163,675
$
181,125
AISC, After By-product Credits
$
134,482
$
194,800
$
322,882
Divided by ounces produced
13,450
151
Cash Cost, Before By-product Credits, per
Ounce
$
21.41
$
1,101
By-product credits per ounce
(19.64
)
(13
)
Cash Cost, After By-product Credits, per
Ounce
$
1.77
$
1,088
AISC, Before By-product Credits, per
Ounce
$
29.63
$
1,308
By-product credits per ounce
(19.64
)
(13
)
AISC, After By-product Credits, per
Ounce
$
10.00
$
1,295
(1)
Includes all direct and indirect operating
costs related to the physical activities of producing metals,
including mining, processing and other plant costs, third-party
refining and marketing expense, on-site general and administrative
costs, royalties and mining production taxes, before by-product
revenues earned from all metals other than the primary metal
produced at each unit. AISC, Before By-product Credits also
includes on-site exploration, reclamation, and sustaining capital
costs.
(2)
The unionized employees at Lucky Friday
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 $9.2 million,
along with $4.1 million in non-cash depreciation expense in the
first half of 2020, have been excluded from the calculations of
cost of sales and other direct production costs and depreciation,
depletion and amortization, Cash Cost, Before By-product Credits,
Cash Cost, After By-product Credits, AISC, Before By-product
Credits, and AISC, After By-product Credits.
(3)
Mining at San Sebastian was completed in
the third quarter of 2020, and milling was completed in the fourth
quarter of 2020. Suspension-related costs at San Sebastian totaling
$1.4 million for the first half of 2021 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, Cash Cost,
Before By-product Credits, Cash Cost, After By-product Credits,
AISC, Before By-product Credits, and AISC, After By-product
Credits.
(4)
AISC, Before By-product Credits for our
consolidated silver properties includes corporate costs for general
and administrative expense, exploration and sustaining capital.
(5)
Production was suspended at the Hollister
and Midas mines and Aurora mill in the latter part of 2019.
Suspension-related costs at Nevada Operations totaling $5.2 million
and $2.7 million for the second quarter of 2021 and 2021,
respectively, ($8.8 million and $6.7 million for the first halves
of 2021 and 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, Cash Cost, Before
By-product Credits, Cash Cost, After By-product Credits, AISC,
Before By-product Credits, and AISC, After By-product Credits.
.
(6)
In late March 2020, the Government of
Quebec ordered the mining industry to reduce to minimum operations
as part of the fight against the COVID-19 virus, causing us to
suspend our Casa Berardi operations from approximately March 24
until April 15, when limited mining operations resumed, resulting
in the reduced mill throughput. Suspension-related costs totaling
$1.6 million for the first half of 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.
Reconciliation of Net Income (Loss) Applicable to Common
Shareholders (GAAP) to Adjusted Net Income (Loss) Applicable to
Common Stockholders (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 are in thousands (except per share
amounts)
Three Months Ended June 30,
Six Months Ended June 30,
2021
2020
2021
2020
Net income (loss) applicable to common
shareholders (GAAP)
$
647
$
(14,166
)
$
19,480
$
(31,489
)
Adjusting items:
Loss on derivatives contracts
17,313
14,002
16,840
6,109
Provisional price (gains)
(3,077
)
(6,986
)
(3,629
)
(9,597
)
Environmental accruals
—
—
2,882
—
Foreign exchange loss (gain)
1,907
3,205
3,971
(3,431
)
Ramp-up and suspension costs
5,786
9,572
10,104
22,568
Acquisition costs
—
6
—
11
Unrealized (gain) loss on investments
750
(6,409
)
4,256
(5,431
)
Foundation grant
—
1,970
—
1,970
Loss on disposition of properties, plants,
equipment and mineral interests
143
677
152
573
Write-down to stockpile inventory
9,379
—
9,577
—
Additional interest associated with early
repayment of long-term debt
—
—
—
2,902
Loss on extinguishment of debt
—
—
—
1,666
Adjusted net income (loss) applicable to
common shareholders
$
32,848
$
1,871
$
63,633
$
(14,149
)
Weighted average shares - basic
535,531
525,243
534,819
524,218
Weighted average shares - diluted
542,262
525,243
541,468
524,218
Basic adjusted net income (loss) per
common share (in cents)
6.1
0.4
11.9
(2.7
)
Diluted adjusted net income (loss) per
common share (in cents)
6.1
0.4
11.8
(2.7
)
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, foreign exchange gains and losses, gains and
losses on derivative contracts, ramp-up and suspension costs,
provisional price gains and losses, stock-based compensation,
unrealized losses and gains on investments, provisions for closed
operations, Foundation grant expense and interest and other income
(expense). Net debt is calculated as total debt, which consists of
the liability balances for our Senior Notes, revolving credit
facility and finance leases, less the total of our cash and cash
equivalents. 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 June 30,
Six Months Ended June 30,
Twelve Months Ended June 30,
2021
2020
2021
2020
2021
2020
Net income (loss)
$
785
$
(14,028)
$
19,756
$
(31,213)
$
34,179
$
(58,705)
Plus: Interest expense
10,271
11,829
21,015
28,140
42,444
54,587
Plus/(Less): Income taxes
(4,842)
626
(208)
(436)
363
(6,142)
Plus: Depreciation, depletion and
amortization
48,403
39,423
97,734
79,089
175,775
190,343
Plus/(Less): Foreign exchange loss
(gain)
1,907
3,205
3,971
(3,431)
12,007
(2,709)
Plus: Ramp-up and suspension costs
5,786
9,572
10,104
22,568
12,447
29,575
Plus: Losses on disposition of properties,
plants, equipment and mineral interests
143
677
152
573
151
574
Plus: Acquisition costs
—
6
—
11
9
246
Plus: Stock-based compensation
2,802
1,210
3,302
2,428
7,332
4,544
Plus/(Less): Losses (gains) on derivative
contracts
13,078
21,625
2,116
11,188
(3,494)
19,203
Plus/Less: Provisional price (gain)
loss
(3,077)
(6,986)
(3,629)
(9,597)
(2,040)
(10,894)
Plus: Provision for closed operations and
environmental matters
1,654
1,545
6,183
3,093
9,279
6,798
Plus/(Less): Unrealized (gain) loss on
investments
750
(6,409)
4,256
(5,431)
(581)
(4,075)
Gain on exchange of investments
—
—
(1,158)
—
(1,158)
Write-down to stockpile inventory
6,242
—
6,431
—
6,431
—
Foundation grant
—
1,970
—
1,970
—
1,970
Other
135
(28)
287
1,176
1,367
2,371
Adjusted EBITDA
$
84,037
$
64,237
$
170,312
$
100,128
$
294,511
$
227,686
Total debt
$
523,739
$
531,054
Less: Cash and cash equivalents
$
(181,494)
$
(75,923)
Net debt
$
342,245
$
455,131
Net debt/LTM adjusted EBITDA
(non-GAAP)
1.2
2.0
Reconciliation of Cash Provided by Operating Activities
(GAAP) to Free Cash Flow (non-GAAP)
This release refers to a non-GAAP measure of free cash flow,
calculated as cash provided by operating activities, less additions
to properties, plants, equipment and mineral interests. Management
believes that, when presented in conjunction with comparable GAAP
measures, free cash flow is useful to investors in evaluating our
operating performance. The following table reconciles cash provided
by operating activities to free cash flow:
Dollars are in thousands
Three Months Ended June 30,
Six Months Ended June 30,
2021
2020
2021
2020
Cash provided by operating activities
$
86,304
$
37,526
$
124,240
$
42,453
Less: Additions to properties, plants
equipment and mineral interests
(31,898
)
(10,819
)
(53,311
)
(30,689
)
Free cash flow
$
54,406
$
26,707
$
70,929
$
11,764
Category: Earnings
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210805005305/en/
Russell Lawlar Senior Vice President - CFO and Treasurer
Jeanne DuPont Senior Communications Coordinator
800-HECLA91 (800-432-5291) Investor Relations Email:
hmc-info@hecla-mining.com Website: www.hecla-mining.com
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