Continued free cash flow generation as Casa
Berardi achieves record quarterly throughput
Hecla Mining Company (NYSE:HL) today announced third quarter
2021 financial and operating results.
HIGHLIGHTS*
- Sales of $193.6 million, consistent with the prior year
quarter.
- Generated $42.7 million of cash provided by operating
activities with $26.9 million of additions to properties, plant,
equipment and mineral interests, resulting in $15.8 million of
quarterly free cash flow reflecting increased exploration
spend.1
- Record quarterly exploration spend of $13.7 million.
- Casa Berardi achieved record quarterly throughput of nearly
400,000 tons as the mill improvements delivered 13% higher gold
production.
- Testing at the Lucky Friday of a new drill and blast mining
method called Underhand Closed Bench (UCB) is showing good
performance in controlling seismicity and improving safety with the
potential to increase productivity.
- Strong balance sheet with $190.9 million in cash and over $420
million of available liquidity.
- Purchased carbon credits and anticipate offsetting scope 1 and
scope 2 emissions to have net zero emissions in 2021.
"Hecla’s results reflect our commitment to improve and innovate
our operations while delivering free cash flow,” said Phillips S.
Baker Jr., President & CEO. “Casa Berardi achieved record
quarterly throughput as our optimization programs in the mill
increase recovery and ounce production. At the Lucky Friday, we
continue to test our new drill and blast mining method, called
Underhand Closed Bench, that allows improved management of
seismicity which should increase safety and could possibly increase
throughput. Greens Creek continued to lead the way because of its
very low costs and despite staff shortages forcing a change in mine
sequencing."
Baker continued, "This operational performance allowed us to
enhance our silver-linked dividend for the second time this year
and return about 20% of our free cash flow to shareholders, while
having our largest exploration program in the company's history. In
addition, while Hecla already has one of the industry’s lowest
carbon footprints, we have taken the next step by investing in
carbon credits that allows us to be net zero for our 2021 scope 1
and scope 2 emissions. We will continue our focus on reducing
emissions as well as investing in credits in the future."
* All comparisons to the third quarter of 2020, unless
stated
FINANCIAL OVERVIEW
Third Quarter Ended
Nine Months Ended
HIGHLIGHTS
September 30,
2021
September 30,
2020
September 30,
2021
September 30,
2020
FINANCIAL DATA
Sales (000)
$193,560
$199,703
$622,395
$502,983
Gross profit (000)
$35,228
$58,688
$164,560
$110,188
(Loss) income applicable to common
shareholders (000)
($1,117
)
$15,142
$22,806
($12,976
)
Basic and diluted (loss) income per common
share (in cents)
(0.2
)
2.9
4.3
(2.5
)
Cash provided by operating activities
$42,742
$73,439
$166,782
$115,892
Net loss applicable to common shareholders for the third quarter
was $1.1 million, or 0.2 cent per share, compared to net income of
$15.1 million, or 2.9 cents per share, for the same period in 2020.
The lower third quarter results compared to the previous year were
mainly due to the following items:
- Lower gross profit due to lower realized silver and gold prices
and Greens Creek’s lower grades based on mine sequencing impacted
by staff shortages.
- Exploration and pre-development expense increased by $12.9
million due to increased exploration at Midas, San Sebastian,
Greens Creek, Casa Berardi and Kinskuch, and for drift development
to the Hatter Graben area in Nevada.
- An unrealized loss on investments in other mining companies of
$2.9 million compared to a gain of $4.0 million.
- $6.5 million payment in the third quarter of 2021 to settle a
lawsuit related to a 1989 agreement for indemnification of certain
environmental costs.
- Suspension costs increased by $5.4 million due to placement of
the Fire Creek mine and Midas mill on care-and-maintenance during
the second quarter of 2021.
These items were partially offset by:
- Gain on base metal derivatives contracts of $12.1 million
compared to a loss of $6.7 million in the prior year period.
- Gross profit at Lucky Friday increased by $6.9 million as a
result of the return to full production beginning in the fourth
quarter of 2020.
- Foreign exchange gain of $4.0 million versus a loss of $2.2
million in the prior year.
Capital expenditures totaled $26.9 million for the third quarter
2021 compared to $23.7 million in the third quarter of 2020, with
the increase due to the reduced utilization of lease financing for
equipment purchases and higher expenditures at Lucky Friday.
Capital expenditures at the operations were $12.4 million at Casa
Berardi, $6.2 million at Greens Creek and $7.5 million at Lucky
Friday.
Metals Prices
The average realized silver price in the third quarter was
$23.97 per ounce, 5% lower than the $25.32 in the third quarter of
2020. The average realized gold price was lower by 7%, at $1,792
per ounce. Average realized lead and zinc price increased 19% and
30%, respectively.
Three Months Ended
September 30,
Nine Months Ended
September 30,
2021
2020
2021
2020
Silver –
London PM Fix ($/ounce)
$
24.36
$
24.40
$
25.78
$
19.22
Realized price per ounce
$
23.97
$
25.32
$
25.75
$
19.72
Gold –
London PM Fix ($/ounce)
$
1,789
$
1,911
$
1,801
$
1,735
Realized price per ounce
$
1,792
$
1,929
$
1,794
$
1,745
Lead –
LME Final Cash Buyer ($/pound)
$
1.06
$
0.85
$
0.98
$
0.81
Realized price per pound
$
1.02
$
0.86
$
1.00
$
0.81
Zinc –
LME Final Cash Buyer ($/pound)
$
1.36
$
1.06
$
1.31
$
0.97
Realized price per pound
$
1.35
$
1.04
$
1.34
$
0.94
∗ 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 September 30, 2021.
Pounds Under Contract
(in thousands)
Average Price per
Pound
Zinc
Lead
Zinc
Lead
Contracts on forecasted sales
2021 settlements
7,771
6,779
$1.26
$0.94
2022 settlements
60,043
63,769
$1.28
$0.98
2023 settlements
76,280
70,327
$1.29
$1.00
2024 settlements
43,762
—
$1.31
—
The contracts represent about 49% of the forecasted payable zinc
production through 2024 at an average price of $1.29 per pound, and
40% of the forecasted payable lead production through 2023 at an
average price of $0.99 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 September 30, 2021, which is roughly 72% of forecasted Canadian
dollar direct production costs for the remainder of 2021, 48% for
2022, 37% for 2023, 18% for 2024 and 5% for 2025:
Currency Under
Contract
(in thousands of CAD)
Average Exchange Rate
CAD/USD
2021 settlements
29,450
$1.33
2022 settlements
94,524
$1.31
2023 settlements
75,165
$1.31
2024 settlements
37,496
$1.31
2025 settlements
9,000
$1.28
OPERATIONS OVERVIEW
Overview
The following table provides the production summary on a
consolidated basis for the third quarter and nine months ended
September 30, 2021 and 2020:
Third Quarter Ended
Nine Months Ended
September 30, 2021
September 30, 2020
September 30, 2021
September 30, 2020
PRODUCTION SUMMARY
Silver -
Ounces produced
2,676,084
3,541,371
9,660,313
10,190,621
Payable ounces sold
2,581,690
3,147,048
9,027,180
9,077,966
Gold -
Ounces produced
42,207
41,174
153,350
159,948
Payable ounces sold
53,000
51,049
157,454
159,550
Lead -
Tons produced
9,904
9,750
32,148
24,620
Payable tons sold
8,835
7,792
28,166
19,948
Zinc -
Tons produced
15,546
17,997
48,864
48,699
Payable tons sold
11,174
12,892
33,344
34,717
The following tables provide a summary of the (i) final
production; (ii) cost of sales and other direct production costs
and depreciation, depletion and amortization ("cost of sales");
(iii) cash cost, after by-product credits, per silver or gold
ounce2; and (iv) all-in sustaining costs ("AISC"), after by-product
credits, per silver or gold ounce3 for the third quarter and nine
months ended September 30, 2021, with comparisons to the prior year
periods:
Third Quarter Ended
Greens Creek
Lucky
Friday
Casa Berardi
Nevada Ops
September 30, 2021
Silver
Gold
Silver
Gold
Silver
Gold
Silver
Gold
Silver
Production (ounces)
2,676,084
42,207
1,837,270
9,734
831,532
29,722
7,012
2,751
270
Increase/(decrease)
(865,287
)
1,033
(797,166
)
(3,104
)
195,143
3,317
3,157
2,751
270
Cost of sales(000)
$78,784
$79,549
$55,193
—
$23,591
$58,164
—
$21,384
—
Increase/(decrease)
$3,219
$11,851
$7,088
—
$2,091
$6,591
—
$7,507
—
Cash costs per silver or gold ounce 2
$2.49
$1,163
$0.74
—
$6.36
$1,175
—
—
—
Increase/(decrease)
$(0.92
)
$(235
)
$(2.26
)
—
—
$(223
)
—
—
—
AISC per silver or gold ounce 3
$12.82
$1,450
$5.94
—
$16.79
$1,476
—
—
—
Increase/(decrease)
$2.30
$(404
)
$(0.64
)
—
—
$(378
)
—
—
—
Nine Months Ended
Greens Creek
Lucky
Friday
Casa Berardi
Nevada Ops
September 30, 2021
Silver
Gold
Silver
Gold
Silver
Gold
Silver
Gold
Silver
Production (ounces)
9,660,313
153,350
6,980,587
35,859
2,608,727
97,245
25,604
20,246
45,395
Increase/(decrease)
(530,308
)
(6,598
)
(1,183,475
)
(2,356
)
1,407,053
13,332
10,320
(11,510
)
7,952
Cost of sales (000)
$238,243
$219,592
$163,861
—
$74,287
$172,760
—
$46,832
—
Increase/(decrease)
$30,689
$27,516
$10,365
—
$38,500
$31,867
—
$2,484
—
Cash costs per silver or gold ounce 2
$1.26
$1,127
$(1.03
)
—
$7.37
$1,127
—
$1,124
—
Increase/(decrease)
$(3.32
)
$73
$(5.48
)
—
—
$(54
)
—
$408
—
AISC per silver or gold ounce 3
$8.88
$1,349
$2.40
—
$15.00
$1,387
—
$1,167
—
Increase/(decrease)
$(1.21
)
$50
$(4.63
)
—
—
$(106
)
—
$380
—
Greens Creek Mine - Alaska
The Greens Creek Mine produced 1.8 million ounces of silver and
9,734 ounces of gold with the mill operating at an average of 2,295
tons per day (tpd). The decrease in silver production compared to
the third quarter of 2020 was due to lower grades resulting from
mine sequencing which was primarily driven by manpower scheduling
issues as a result of COVID-19 and increased competition for labor.
With limited personnel, production came partially from more easily
accessible but lower grade areas. In the future, we anticipate
adequate staffing which will allow mining higher-grade material,
that is in deeper parts of the mine. Compared to 2020, cost of
sales decreased by $7.1 million, due to lower production costs,
driven partially by lower COVID-19 related costs. The per ounce
silver cash cost and AISC decreased by $2.26 and $5.48,
respectively, due to lower production costs as well as higher
by-products credits resulting from higher by-product prices and
lower treatment costs from favorable changes in smelter
terms.2,3
The Company's estimated 2021 silver production is lowered to 9.2
- 9.5 million ounces to reflect lower production from the third
quarter. Gold production guidance of 43 - 45 thousand ounces is
unchanged. Estimated cost of sales for 2021 are maintained at $222
million and cash cost and AISC, each per silver ounce is also
unchanged at ($1.00)-$1.00 and $3.25-$4.00, respectively.2,3
Casa Berardi Mine - Quebec
At the Casa Berardi Mine, 29,722 ounces of gold were produced
compared to 26,405 ounces in the third quarter of 2020 due to
higher mill throughput, partially offset by lower grades. The mill
operated at an average of 4,328 tpd, which was 38% higher than the
prior year period and achieved record quarterly throughput of
398,143 tons milled as the mill optimization continues to deliver
results. Mill recoveries have continued to increase due to
improvements in the grinding, gravity and CIL circuits. The
increase in cost of sales was due to higher throughput, mill
contractor maintenance costs, and underground maintenance costs
resulting from repairs and replacements of major components for the
production fleet. The decrease in cash cost and AISC per gold ounce
for the third quarter of 2021 compared to 2020 was the result of
the higher gold production, partially offset by higher production
costs, with AISC also impacted by lower sustaining capital,
partially offset by higher exploration spending.
In the 160 pit, 1.0 million tons of overburden and waste rock
was removed during the quarter. Mining and processing of 160 pit
ore is expected to commence during Q4 2021.
The Company is increasing 2021 gold production guidance to 130 -
135 thousand ounces. The estimate for 2021 cost of sales is
increased to $230 million. Estimated cash cost per gold ounce is
unchanged at $1,000-$1,125 per gold ounce as 72% of the direct
production costs are hedged at an average USD/CAD exchange rate of
1.33.2 All-in sustaining cost guidance is increased to
$1,350-$1,400 to reflect in the increased sustaining capital spend
which is currently unhedged under the Company's foreign exchange
hedging program.3
Lucky Friday Mine - Idaho
At the Lucky Friday Mine, 0.8 million ounces of silver were
produced in the quarter, an increase of 31% compared to the third
quarter of 2020, with the mine at full production. The mill
operated at an average of 850 tpd. A new mining method, with a
patent pending, called the Underhand Closed Bench (UCB), has been
in testing for the past year with the third quarter mining 87% of
tons with the method. The benefit of the method is better
management of seismicity, increasing safety and potentially
increasing production. With the success of this new drill and blast
mining method, the Remote Vein Miner (RVM), a continuous rock
cutting machine, will be tested at another property. Additionally
during the quarter, the land needed for Lucky Friday’s planned
tailings facilities was acquired.
Cost of sales for the second quarter was $23.6 million, and the
cash cost per silver ounce was $6.36. AISC was $16.79 per silver
ounce.2,3
The Company's estimated 2021 silver production of 3.4 - 3.8
million ounces is unchanged. Estimated 2021 cost of sales are $103
million and cash cost and AISC, each per silver ounce, are
unchanged at $7.60-$8.50 and $14.25-$16.25, respectively.2,3
Nevada Operations
At the Nevada operations, 2,751 ounces of gold were produced
from approximately 12,000 tons of previously stockpiled refractory
material processed at a third-party autoclave facility. Total cost
of sales for the third quarter was $21.4 million. Cash cost and
AISC per gold ounce were $1,038 and $1,167, respectively, in the
third quarter of 2021.2,3 The increase over the prior year period
was primarily due to costs associated with the previously
stockpiled material processed in the current period.
We anticipate production and sales from the remaining
approximately 2,200 tons of previously stockpiled refractory
material processed at the third-party autoclave facility will be
recognized in the fourth quarter of 2021.
Hollister’s exploration drift to access the Hatter Graben is
ongoing and drilling began in the fourth quarter while we continue
surface drilling at Midas.
EXPLORATION
In the third quarter exploration expenditures were $13.7
million, an increase of $10.3 million compared to the third quarter
of 2020, primarily due to increasing exploration activity at Midas,
Greens Creek, Casa Berardi, San Sebastian, Heva-Hosco and Kinskuch
since there were fewer limitations due to COVID. This is the
largest quarterly exploration expense in the company’s history and
about 50% more than the second quarter. For more details on Hecla’s
exploration activities please see the Exploration Update provided
on September 14th.
PRE-DEVELOPMENT
Pre-development spending was $3.4 million for the quarter,
compared to $0.8 million for the third quarter of 2020. The
increase is principally due to development of the decline at
Hollister to allow drilling of the Hatter Graben to begin in the
fourth quarter.
With the Federal District Court's ruling setting aside the
federal agencies’ Record of Decision and related Biological Opinion
for the Rock Creek project, Hecla will provide the next steps for
both Rock Creek and Montanore by early 2022.
DIVIDENDS
Common
On September 8th, 2021, the Board of Directors added 1 cent per
share for the annual silver-linked dividend component and approved
a reduction in the minimum realized silver price threshold to $20
from $25 per ounce. On November 3, 2021, the Board of Directors
declared a quarterly cash dividend of 0.625 cent per share of
common stock, consisting of 0.375 cent per share for the minimum
dividend component and 0.75 cent per share for the silver-linked
component of our dividend policy. The common dividend is payable on
or about December 3, 2021, to shareholders of record on November
19, 2021. The realized silver price was $23.97 in the third 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
87.5 cent per share on the outstanding shares of Series B
Cumulative Convertible Preferred Stock, payable on or about January
3, 2021, to shareholders of record on December 15, 2021.
2021 ESTIMATES4
The Company has updated its guidance for annual production and
cost as follows:
2021 Production Outlook
Silver Production
(Moz)
Gold Production
(Koz)
Previous
Current
Previous
Current
Greens Creek *
9.5-10.2
9.2-9.5
43-45
43-45
Lucky Friday *
3.4-3.8
3.4-3.8
N/A
N/A
Casa Berardi
N/A
N/A
128-132
130-135
Nevada Operations
N/A
N/A
20-21
20-21
Total4
12.9-14.0
12.6-13.3
191-198
193-201
Silver equivalent production for 2021 is estimated at 42.0 –
43.5 million ounces while gold equivalent production is expected to
be 469 – 485 thousand ounces. * Equivalent ounces include Lead and
Zinc production
2021 Cost Outlook
Cost of Sales
(millions)
Cash cost, after
by-product
credits, per silver/gold
ounce2
AISC, after by-product
credits,
per produced silver/gold
ounce3
Previous
Current
Previous
Current
Previous
Current
Greens Creek
$222
$222
($1.00)-$1.00
($1.00)-$1.00
$3.25-$4.00
$3.25-$4.00
Lucky Friday
$103
$103
$7.50-$8.50
$7.50-$8.50
$14.25-$16.25
$14.25-$16.25
Total Silver
$325
$325
$1.00-$2.00
$1.00-$2.00
$9.00-$11.00
$9.00-$11.00
Casa Berardi
$220
$230
$1,000-$1,125
$1,000-$1,125
$1,200-$1,325
$1,350-$1,400
Nevada Operations
$43
$43
$1,300-$1,425
$1,300-$1,425
$1,385-$1,525
$1,385-$1,525
Total Gold
$263
$273
$1,050-$1,200
$1,050-$1,200
$1,250-$1,350
$1,300-$1,375
CONFERENCE CALL AND WEBCAST
A conference call and webcast will be held Thursday, November 4,
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 5460648 and must be provided when dialing in.
Hecla's live and archived webcast can be accessed at
www.hecla-mining.com under Investors.
One-on-One Calls
Hecla will be holding a Virtual Investor Event on Thursday,
November 4, 2021, from 11:30 a.m. to 1:30 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 ESG,
exploration, operations, or general 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-november-vie
NYSE CELEBRATORY EVENT
Hecla is celebrating 130 years and will ring the NYSE closing
bell on November 16th, 2021. Hecla will be holding a celebratory
event at the NYSE and invites shareholders, investors and other
interested parties to the event. If you would like to attend,
please contact Cheryl Turner at cturner@hecla-mining.com or
208-209-1261 by November 5th, 2021.
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) 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 silver and gold mining company, management also
uses the statistic on an aggregate basis - aggregating the Greens
Creek, Lucky Friday and San Sebastian mines - to compare
performance with that of other silver mining companies, and
aggregating Casa Berardi and the Nevada operations, to compare its
performance with other gold mining companies. Similarly, the
statistic is useful in identifying acquisition and investment
opportunities as it provides a common tool for measuring the
financial performance of other mines with varying geologic,
metallurgical and operating characteristics. In addition, the
Company may use it when formulating performance goals and targets
under its incentive program. Cash cost, after by-product credits,
per silver ounce is not presented for Lucky Friday for the third
quarters and first nine-month periods of 2020 and 2019, as
production was limited due to the strike and subsequent ramp-up and
results are not comparable to those from prior periods and are not
indicative of future operating results under full production.
(3) All-in sustaining cost (AISC), after by-product credits, is
a non-GAAP measurement, a reconciliation of which to cost of sales
and other direct production costs and depreciation, depletion and
amortization, the closest GAAP measurement, can be found in the end
of the release. AISC, after by-product credits, includes cost of
sales and other direct production costs, expenses for reclamation
and exploration at the mine sites, corporate exploration related to
sustaining operations, and all site sustaining capital costs. AISC,
after by-product credits, is calculated net of depreciation,
depletion, and amortization and by-product credits
Current GAAP measures used in the mining industry, such as cost
of goods sold, do not capture all the expenditures incurred to
discover, develop and sustain silver and gold production.
Management believes that all-in sustaining costs is a non-GAAP
measure that provides additional information to management,
investors and analysts to help in the understanding of the
economics of our operations and performance compared to other
producers and in the investor's visibility by better defining the
total costs associated with production. Similarly, the statistic is
useful in identifying acquisition and investment opportunities as
it provides a common tool for measuring the financial performance
of other mines with varying geologic, metallurgical and operating
characteristics. In addition, the Company may use it when
formulating performance goals and targets under its incentive
program.
Other
(4) Calculations for 2021 include silver, gold, lead and zinc
production from Greens Creek, San Sebastian, Casa Berardi, and
Nevada Operations converted using actual 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 method
being tested at Lucky Friday will continue to successfully control
seismicity, improve safety and potentially increase productivity;
(ii) Greens Creek’s ability to achieve adequate staffing levels in
order to mine higher-grade material, which is in deeper parts of
the mine; (iii) Greens Creek's estimated 2021 silver production,
gold production, cost of sales, cash cost and AISC; (iv) Casa
Berardi's estimated 2021 gold production, cost of sales, cash cost
and AISC; (v) Ore from the 160 pit at Casa Berardi is expected to
start being mined and processed in Q4 2021; (vi) expectation that
production and sales from the remaining approximately 2,200 tons of
previously stockpiled refractory material from the Nevada
operations processed at the third-party autoclave facility will be
recognized in the fourth quarter of 2021; (vii) Lucky Friday's
estimated 2021 silver production, cost of sales, cash cost and
AISC; and (viii) 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 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, (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 presentation, or to reflect the occurrence of
unanticipated events, except as may be required under applicable
securities laws. Investors should not assume that any lack of
update to a previously issued “forward-looking statement”
constitutes a reaffirmation of that statement. Continued reliance
on “forward-looking statements” is at investors’ own risk.
HECLA MINING COMPANY
Condensed Consolidated Statements
of Operations
(dollars and shares in thousands,
except per share amounts - unaudited)
Third Quarter Ended
Nine Months Ended
September 30,
2021
September 30,
2020
September 30,
2021
September 30,
2020
Sales of products
$
193,560
$
199,703
$
622,395
$
502,983
Cost of sales and other direct production
costs
112,542
103,025
318,917
280,303
Depreciation, depletion and
amortization
45,790
37,990
138,918
112,492
158,332
141,015
457,835
392,795
Gross profit
35,228
58,688
164,560
110,188
Other operating expenses:
General and administrative
8,874
11,713
27,985
27,631
Exploration
13,675
3,407
27,993
7,899
Pre-development
3,433
759
7,046
1,857
Other operating expense
3,344
3,499
10,626
5,864
Provision or closed operations and
environmental matters
7,564
1,254
12,297
2,807
Ramp-up and suspension costs
6,910
1,541
17,014
24,109
Foundation grant
—
—
—
1,970
43,800
22,173
102,961
72,137
(Loss) income from operations
(8,572
)
36,515
61,599
38,051
Other income (expense):
Gain on exchange of investments
—
—
1,158
—
Unrealized (loss) gain on investments
(2,861
)
3,979
(7,117
)
9,410
Gain (loss) on derivative contracts
12,148
(6,666
)
(4,692
)
(12,775
)
Net foreign exchange gain (loss)
3,995
(2,196
)
24
1,235
Other expense
247
(392
)
(192
)
(2,141
)
Interest expense
(10,469
)
(10,779
)
(31,484
)
(38,919
)
3,060
(16,054
)
(42,303
)
(52,600
)
(Loss) income before income and mining
taxes
(5,512
)
20,461
19,296
(14,549
)
Income and mining tax benefit
(provision)
4,533
(5,151
)
3,924
(7,423
)
Net (loss) income
(979
)
15,280
23,220
(21,972
)
Preferred stock dividends
(138
)
(138
)
(414
)
(414
)
(Loss) income applicable to common
shareholders
$
(1,117
)
$
15,142
$
22,806
$
(22,386
)
Basic (loss) income per common share after
preferred dividends (in cents)
(0.2
)
2.9
4.3
(2.5
)
Diluted (loss) income per common share
after preferred dividends
(0.2
)
2.8
4.2
(2.5
)
Weighted average number of common shares
outstanding - basic
536,966
529,838
535,542
526,098
Weighted average number of common shares
outstanding - diluted
536,966
535,788
541,769
526,098
HECLA MINING COMPANY
Condensed Consolidated Statements
of Cash Flows
(dollars in thousands -
unaudited)
Third Quarter Ended
Nine Months Ended
September 30,
2021
September 30,
2020
September 30,
2021
September 30,
2020
OPERATING ACTIVITIES
Net (loss) income
$
(979
)
$
15,280
$
23,220
$
(12,562
)
Non-cash elements included in net (loss)
income:
Depreciation, depletion and
amortization
46,939
40,478
139,800
120,076
Gain on exchange of investments
—
—
(1,158
)
—
Unrealized loss (gain) on investments
2,861
(3,979
)
7,117
(9,410
)
Write-down to stockpile inventory
93
—
6,524
—
Provision for reclamation and closure
costs
1,638
1,545
7,821
4,638
Stock compensation
1,472
2,801
4,774
5,229
Deferred income taxes
(10,141
)
(6290
)
(17,886
)
(4,578
)
Amortization of loan origination fees and
loss on extinguishment of debt
488
442
1,406
3,066
(Gain) loss on derivative contracts
(16,053
)
(6,705
)
(13,937
)
4,483
Foreign exchange (gain) loss
(3,842
)
915
615
(2,810
)
Foundation grant
—
—
—
1,970
Other non-cash items, net
—
—
—
—
Change in assets and liabilities:
Accounts receivable
5,634
2,309
(3,798
)
(3,741
)
Inventories
16,653
(8,510
)
22,372
(13,090
)
Other current and non-current assets
(2,475
)
7,672
1,650
6,748
Accounts payable and accrued
liabilities
(8,200
)
13,653
(14,689
)
(1,762
)
Accrued payroll and related benefits
3,522
5,899
(1,829
)
11,317
Accrued taxes
3,729
(636
)
2,730
3,276
Accrued reclamation and closure costs and
other non-current liabilities
1,793
2,918
2,489
2,483
Cash provided by operating
activities
42,742
73,439
166,982
115,892
INVESTING ACTIVITIES
Additions to properties, plants, equipment
and mineral interests
(26,899
)
(23,693
)
(80,210
)
(54,382
)
Proceeds from disposition of properties,
plants and equipment
431
105
562
305
Purchase of carbon credits
(200
)
—
(200
)
—
Purchases of investments
—
(1,024
)
—
(1,661
)
Net cash used in investing
activities
(24,857
)
(24,612
)
(78,037
)
(55,738
)
FINANCING ACTIVITIES
Acquisition of treasury shares
—
—
(4,525
)
(2,745
)
Dividends paid to common shareholders
(6,040
)
(1,329
)
(16,755
)
(3,951
)
Dividends paid to preferred
shareholders
(138
)
(138
)
(414
)
(414
)
Credit facility fees paid
(26
)
(736
)
(108
)
(1,287
)
Borrowings on debt
—
27,607
—
707,107
Repayments of debt
—
(50,000
)
—
(716,500
)
Payments on finance leases
(1,828
)
(1,406
)
(5,598
)
(4,246
)
Net cash used in financing
activities
(8,032
)
(26,002
)
(27,400
)
(22,036
)
Effect of exchange rates on cash
(443
)
(79
)
(471
)
(1,873
)
Net increase in cash, cash equivalents and
restricted cash and cash equivalents
9,410
22,746
61,074
36,245
Cash, cash equivalents and restricted cash
and cash equivalents at beginning of period
182,547
76,976
130,883
63,477
Cash, cash equivalents and restricted cash
and cash equivalents at end of period
$
191,957
$
99,722
$
191,957
$
99,722
HECLA MINING COMPANY
Condensed Consolidated Balance
Sheets
(dollars and share in thousands -
unaudited)
September 30, 2021
December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents
$
190,904
$
129,830
Accounts receivable:
Trade
32,821
27,864
Taxes
Other, net
10,152
11,329
Inventories
58,439
96,175
Derivative assets
5,220
3,470
Other current assets
12,744
15,644
Total current assets
310,280
284,312
Investments
8,030
15,148
Restricted cash
1,053
1,053
Properties, plants, equipment and mineral
interests, net
2,331,018
2,378,074
Operating lease right-of-use assets
8,201
10,628
Deferred income taxes
5,576
2,912
Derivative assets
6,748
4,558
Other non-current assets
3,511
3,525
Total assets
$
2,674,417
$
2,700,210
LIABILITIES
Current liabilities:
Accounts payable and accrued
liabilities
$
62,571
$
68,516
Accrued payroll and related benefits
26,493
31,807
Accrued taxes
8,557
5,774
Finance leases
5,637
6,491
Operating leases
2,385
3,008
Other current liabilities
103
138
Accrued reclamation and closure costs
11,036
5,582
Accrued interest
5,221
14,157
Derivatives liabilities
4,179
11,737
Total current liabilities
126,182
147,210
Finance leases
8,540
9,274
Operating leases
5,820
7,634
Accrued reclamation and closure costs
108,670
110,466
Long-term debt
507,712
507,242
Deferred tax liability
142,750
156,091
Pension liability
26,229
44,144
Derivatives liabilities
752
18
Other non-current liabilities
4,787
4,346
Total liabilities
931,442
986,425
SHAREHOLDERS’ EQUITY
Preferred stock
39
39
Common stock
136,350
134,629
Capital surplus
2,032,334
2,003,576
Accumulated deficit
(362,023
)
(368,074
)
Accumulated other comprehensive loss
(35,704
)
(32,889
)
Treasury stock
(28,021
)
(23,496
)
Total shareholders’ equity
1,742,975
1,713,785
Total liabilities and shareholders’
equity
$
2,674,417
$
2,700,210
Common shares outstanding
537,977
531,666
HECLA MINING COMPANY
Production Data
Three Months Ended
Nine Months Ended
September 30,
2021
September 30,
2020
September 30,
2021
September 30,
2020
GREENS CREEK UNIT
Tons of ore milled
211,142
215,237
620,153
629,316
Total production cost per ton
Ore grade milled - Silver (oz./ton)
11.14
15.04
13.84
15.79
Ore grade milled - Gold (oz./ton)
0.068
0.084
0.079
0.084
Ore grade milled - Lead (%)
2.68
%
3.26
%
2.96
%
3.22
%
Ore grade milled - Zinc (%)
7.05
%
8.17
%
7.41
%
7.76
%
Silver produced (oz.)
1,837,270
2,634,436
6,980,587
8,164,062
Gold produced (oz.)
9,734
12,838
35,859
38,215
Lead produced (tons)
4,591
5,909
15,142
16,996
Zinc produced (tons)
13,227
16,187
41,191
44,858
Cash cost, after by-product credits, per
silver ounce (1)
$
0.74
$
3.00
$
(1.03)
$
4.45
AISC, after by-product credits, per silver
ounce (1)
$
5.94
$
6.58
$
2.40
$
7.03
Capital additions (in thousands)
$
6,228
$
8,265
$
17,459
$
18,276
LUCKY FRIDAY UNIT
Tons of ore milled
78,227
55,050
241,740
109,951
Total production cost per ton
Ore grade milled - Silver (oz./ton)
11.21
12.10
11.34
11.43
Ore grade milled - Lead (%)
7.22
%
7.35
%
7.43
%
7.33
%
Ore grade milled - Zinc (%)
3.3
%
3.76
%
3.48
%
3.89
%
Silver produced (oz.)
831,532
636,389
2,608,727
1,201,674
Lead produced (tons)
5,313
3,841
17,006
7,624
Zinc produced (tons)
2,319
1,810
7,673
3,841
Cash cost, after by-product credits, per
silver ounce (1)
$
6.36
$
—
$
7.37
$
—
AISC, after by-product credits, per silver
ounce (1)
$
16.79
—
$
15.00
—
Capital additions (in thousands)
$
7,534
$
5,547
$
19,177
$
14,603
CASA BERARDI UNIT
Tons of ore milled - underground
157,734
157,734
472,936
472,936
Tons of ore milled - surface pit
130,948
130,948
427,784
427,784
Tons of ore milled - total
398,143
288,682
1,141,229
900,720
Surface tons mined - ore and waste
1,410,505
1,410,505
4,065,596
4,065,596
Total production cost per ton
Ore grade milled - Gold (oz./ton) -
underground
0.124
0.124
0.132
0.132
Ore grade milled - Gold (oz./ton) -
surface pit
0.052
0.052
0.051
0.051
Ore grade milled - Gold (oz./ton) -
combined
0.087
0.114
0.102
0.114
Ore grade milled - Silver (oz./ton)
0.02
0.02
0.02
0.02
Gold produced (oz.) - underground
19,605
19,605
62,260
62,260
Gold produced (oz.) - surface pit
6,800
6,800
21,652
21,652
Gold produced (oz.) - total
29,722
26,405
97,245
83,913
Cash cost, after by-product credits, per
gold ounce (1)
$
1,175
$
1,398
$
1,127
$
1,181
AISC, after by-product credits, per gold
ounce (1)
$
1,476
$
1,855
$
1,387
$
1,493
Capital additions (in thousands)
$
12,377
$
11,629
$
38,377
$
24,413
SAN SEBASTIAN
Tons of ore milled
—
47,093
—
104,216
Total production cost per ton
Ore grade milled - Silver (oz./ton)
—
6.27
—
8.11
Ore grade milled - Gold (oz./ton)
—
0.052
—
0.07
Silver produced (oz.)
—
266,691
—
772,158
Gold produced (oz.)
—
1,931
—
6,064
Cash cost, after by-product credits, per
silver ounce (1)
—
$
7.53
—
$
5.93
AISC, after by-product credits, per silver
ounce (1)
—
$
8.87
—
$
6.76
Capital additions (in thousands)
$
3
$
233
$
10
$
537
Nevada Operations
Tons of ore milled
11,953
—
67,359
27,984
Total production cost per ton
Ore grade milled - Gold (oz./ton)
0.234
—
0.324
1.232
Ore grade milled - Silver (oz./ton)
Gold produced (oz.)
2,751
—
20,246
31,756
Silver produced (oz.)
270
—
45,395
37,443
Cash cost, after by-product credits, per
gold ounce (1)
$
1,038
$
—
$
1,124
$
716
AISC, after by-product credits, per gold
ounce (1)
$
1,167
—
$
1,167
$
787
Capital additions (in thousands)
$
29
$
380
$
195
$
1,849
(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 is gold, with a by-product credit for the value of
silver production.
Non-GAAP Measures (Unaudited)
Reconciliation of Cost of Sales and Other Direct Production
Costs and Depreciation, Depletion and Amortization (GAAP) to Cash
Cost, Before By-product Credits and Cash Cost, After By-product
Credits (non-GAAP) and All-In Sustaining Cost, Before By-product
Credits and All-In Sustaining Cost, After By-product Credits
(non-GAAP)
The tables below present reconciliations between the most
comparable GAAP measure of cost of sales and other direct
production costs and depreciation, depletion and amortization to
the non-GAAP measures of Cash Cost, Before By-product Credits, Cash
Cost, After By-product Credits, AISC, Before By-product Credits and
AISC, After By-product Credits for our operations at the Greens
Creek, Lucky Friday, San Sebastian, Casa Berardi and Nevada
Operations units for the three- and nine-month periods ended
September 30, 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 measure of
our mines' net cash flow after costs for exploration,
pre-development, reclamation, and sustaining capital. Current GAAP
measures used in the mining industry, such as cost of goods sold,
do not capture all the expenditures incurred to discover, develop
and sustain silver and gold production. Cash Cost, After By-product
Credits, per Ounce and AISC, After By-product Credits, per Ounce
also allow us to benchmark the performance of each of our mines
versus those of our competitors. As a silver and gold mining
company, we also use these statistics on an aggregate basis -
aggregating the Greens Creek, Lucky Friday and San Sebastian mines,
to compare our performance with that of other primary silver mining
companies and aggregating Casa Berardi and Nevada Operations for
comparison with other gold mining companies. Similarly, these
statistics are useful in identifying acquisition and investment
opportunities as they provide a common tool for measuring the
financial performance of other mines with varying geologic,
metallurgical and operating characteristics.
Cash Cost, Before By-product Credits and AISC, Before By-product
Credits include all direct and indirect operating cash costs
related directly to the physical activities of producing metals,
including mining, processing and other plant costs, third-party
refining expense, on-site general and administrative costs,
royalties and mining production taxes. AISC, Before By-product
Credits for each mine also includes on-site exploration,
reclamation, and sustaining capital costs. AISC, Before By-product
Credits for our consolidated silver properties also includes
corporate costs for general and administrative expense and
sustaining exploration and capital costs. 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 September 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
$
55,193
$
23,591
$
—
$
78,784
Depreciation, depletion and
amortization
(13,097
)
(6,590
)
—
(19,687
)
Treatment costs
7,979
3,427
—
11,406
Change in product inventory
(122
)
(68
)
—
(190
)
Reclamation and other costs
(786
)
(281
)
—
(1,067
)
Cash Cost, Before By-product Credits
(1)
49,167
20,079
—
69,246
Reclamation and other costs
848
264
—
1,112
Exploration
2,472
—
—
474
2,946
Sustaining capital
6,228
8,406
—
—
14,634
General and administrative
8,874
8,874
AISC, Before By-product Credits (1)
58,715
28,749
—
96,812
By-product credits:
Zinc
(25,295
)
(4,611
)
—
(29,906
)
Gold
(14,864
)
—
—
(14,864
)
Lead
(7,640
)
(10,188
)
—
(17,828
)
Total By-product credits
(47,799
)
(14,799
)
—
(62,598
)
Cash Cost, After By-product Credits
$
1,368
$
5,280
$
—
$
6,648
AISC, After By-product Credits
$
10,916
$
13,950
$
—
$
34,214
Divided by silver ounces produced
1,837
832
—
2,669
Cash Cost, Before By-product Credits, per
Ounce
$
26.76
$
24.14
$
—
$
25.93
By-product credits per ounce
(26.02
)
$
(17.79
)
—
(23.44
)
Cash Cost, After By-product Credits, per
Ounce
$
0.74
$
6.35
$
—
$
2.49
AISC, Before By-product Credits, per
Ounce
$
31.96
$
34.58
$
—
$
36.26
By-product credits per ounce
(26.02
)
$
(17.79
)
—
(23.44
)
AISC, After By-product Credits, per
Ounce
$
5.94
16.79
$
—
$
12.82
In thousands (except per ounce amounts)
Three Months Ended September 30,
2021
Casa Berardi(5)
Nevada Operations(6)
Total Gold
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
58,164
$
21,384
$
79,548
Depreciation, depletion and
amortization
(19,968
)
(6,135
)
(26,103
)
Treatment costs
475
1
476
Change in product inventory
(3,369
)
(12,389
)
(15,758
)
Reclamation and other costs
(210
)
—
(210
)
Cash Cost, Before By-product Credits
(1)
35,092
2,861
37,953
Reclamation and other costs
209
327
536
Exploration
1,541
—
1,541
Sustaining capital
7,208
29
7,237
AISC, Before By-product Credits (1)
44,050
3,217
47,267
By-product credits:
Silver
(169
)
(6
)
(175
)
Total By-product credits
(169
)
(6
)
(175
)
Cash Cost, After By-product Credits
$
34,923
$
2,855
$
37,778
AISC, After By-product Credits
$
43,881
$
3,211
$
47,092
Divided by gold ounces produced
30
3
33
Cash Cost, Before By-product Credits, per
Ounce
$
1,181
$
1,040
$
1,168
By-product credits per ounce
(6
)
(2.18
)
(5
)
Cash Cost, After By-product Credits, per
Ounce
$
1,175
$
1,038
$
1,163
AISC, Before By-product Credits, per
Ounce
$
1,482
$
1,484
$
1,455
By-product credits per ounce
(6
)
(2
)
(5
)
AISC, After By-product Credits, per
Ounce
$
1,476
$
1,482
$
1,450
In thousands (except per ounce amounts)
Three Months Ended September 30,
2021
Total Silver
Total Gold
Total
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
78,784
$
79,548
$
158,332
Depreciation, depletion and
amortization
(19,687
)
(26,103
)
(45,790
)
Treatment costs
11,406
476
11,882
Change in product inventory
(190
)
(15,758
)
(15,948
)
Reclamation and other costs
(1,067
)
(210
)
(1,277
)
Cash Cost, Before By-product Credits
(1)
69,246
37,953
107,199
Reclamation and other costs
1,112
536
1,648
Exploration
2,946
1,541
4,487
Sustaining capital
14,634
7,237
21,871
General and administrative
8,874
—
8,874
AISC, Before By-product Credits (1)
96,812
47,267
144,079
By-product credits:
Zinc
(29,906
)
—
(29,906
)
Gold
(14,864
)
—
(14,864
)
Lead
(17,828
)
—
(17,828
)
Silver
(175
)
(175
)
Total By-product credits
(62,598
)
(175
)
(62,773
)
Cash Cost, After By-product Credits
$
6,648
$
37,778
$
44,426
AISC, After By-product Credits
$
34,214
$
47,092
$
81,306
Divided by ounces produced
2,669
33
Cash Cost, Before By-product Credits, per
Ounce
$
25.93
$
1,168
By-product credits per ounce
(23.44
)
(5
)
Cash Cost, After By-product Credits, per
Ounce
$
2.49
$
1,163
AISC, Before By-product Credits, per
Ounce
$
36.26
$
1,455
By-product credits per ounce
(23.44
)
(5
)
AISC, After By-product Credits, per
Ounce
$
12.82
$
1,450
In thousands (except per ounce amounts)
Three Months Ended September 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
$
48,105
$
21,500
$
5,960
$
75,565
Depreciation, depletion and
amortization
(11,735
)
(2,956
)
(781
)
(15,472
)
Treatment costs
22,675
4,038
81
26,794
Change in product inventory
2,899
11
826
3,736
Reclamation and other costs
(891
)
—
(392
)
(1,283
)
Exclusion of Lucky Friday costs
—
(22,593
)
(22,593
)
Cash Cost, Before By-product Credits
(1)
61,053
—
5,694
66,747
Reclamation and other costs
788
—
114
902
Exploration
370
—
—
429
799
Sustaining capital
8,265
—
244
38
8,547
General and administrative
10,345
10,345
AISC, Before By-product Credits (2)
70,476
—
6,052
87,340
By-product credits:
Zinc
(23,772
)
—
—
(23,772
)
Gold
(21,226
)
—
(3,686
)
(24,912
)
Lead
(8,149
)
—
—
(8,149
)
Total By-product credits
(53,147
)
—
(3,686
)
(56,833
)
Cash Cost, After By-product Credits
$
7,906
$
—
$
2,008
$
9,914
AISC, After By-product Credits
$
17,329
$
—
$
2,366
$
30,507
Divided by ounces produced
2,634
267
2,901
Cash Cost, Before By-product Credits, per
Ounce
$
23.18
$
—
$
21.33
$
23.00
By-product credits per ounce
(20.18
)
—
(13.81
)
(19.59
)
Cash Cost, After By-product Credits, per
Ounce
$
3.00
$
—
$
7.52
$
3.41
AISC, Before By-product Credits, per
Ounce
$
26.76
$
—
$
22.68
$
30.11
By-product credits per ounce
(20.18
)
—
(13.81
)
(19.59
)
AISC, After By-product Credits, per
Ounce
$
6.58
$
—
$
8.87
$
10.52
In thousands (except per ounce amounts)
Three Months Ended September 30,
2020
Casa Berardi
Nevada Operations
Total Gold
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
51,573
$
13,877
$
65,450
Depreciation, depletion and
amortization
(15,223
)
(7,295
)
(22,518
)
Treatment costs
562
—
562
Change in product inventory
543
6,920
7,463
Reclamation and other costs
(449
)
(324
)
(773
)
Cash Cost, Before By-product Credits
(1)
37,006
—
37,006
Reclamation and other costs
97
—
97
Exploration
335
—
335
Sustaining capital
11,629
—
11,629
AISC, Before By-product Credits (1)
49,067
—
49,067
By-product credits:
Silver
(93
)
—
(93
)
Total By-product credits
(93
)
—
(93
)
Cash Cost, After By-product Credits
$
36,913
$
—
$
36,913
AISC, After By-product Credits
$
48,974
$
—
$
48,974
Divided by ounces produced
26
—
26
Cash Cost, Before By-product Credits, per
Ounce
$
1,402
$
—
$
1,402
By-product credits per ounce
(4
)
—
(4
)
Cash Cost, After By-product Credits, per
Ounce
$
1,398
$
—
$
1,398
AISC, Before By-product Credits, per
Ounce
$
1,859
$
—
$
1,859
By-product credits per ounce
(4
)
—
(4
)
AISC, After By-product Credits, per
Ounce
$
1,855
$
—
$
1,855
In thousands (except per ounce amounts)
Three Months Ended September 30,
2020
Total Silver
Total Gold
Total
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
75,565
$
65,450
$
141,015
Depreciation, depletion and
amortization
(15,472
)
(22,518
)
(37,990
)
Treatment costs
26,794
562
27,356
Change in product inventory
3,736
7,463
11,199
Reclamation and other costs
(1,283
)
(773
)
(2,056
)
Exclusion of Lucky Friday cash costs
(22,593
)
(22,593
)
Cash Cost, Before By-product Credits
(1)
66,747
37,006
116,931
Reclamation and other costs
902
97
999
Sustaining exploration
799
335
1,134
Sustaining capital
8,547
11,629
20,176
General and administrative
10,345
—
10,345
AISC, Before By-product Credits (1)
87,340
49,067
149,585
By-product credits:
Zinc
(23,772
)
—
(23,772
)
Gold
(24,912
)
—
(24,912
)
Lead
(8,149
)
—
(8,149
)
Silver
(93
)
(93
)
Total By-product credits
(56,833
)
(93
)
(56,926
)
Cash Cost, After By-product Credits
$
9,914
$
36,913
$
60,005
AISC, After By-product Credits
$
30,507
$
48,974
$
92,659
Divided by ounces produced
2,901
26
Cash Cost, Before By-product Credits, per
Ounce
$
23.00
$
1,402
By-product credits per ounce
(19.59
)
(4
)
Cash Cost, After By-product Credits, per
Ounce
$
3.41
$
1,398
AISC, Before By-product Credits, per
Ounce
$
30.11
$
1,859
By-product credits per ounce
(19.59
)
(4
)
AISC, After By-product Credits, per
Ounce
$
10.52
$
1,855
In thousands (except per ounce amounts)
Nine Months Ended September 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
$
163,861
$
74,287
$
95
$
238,243
Depreciation, depletion and
amortization
(42,410
)
(20,328
)
—
(62,738
)
Treatment costs
27,444
13,087
—
40,531
Change in product inventory
(156
)
(1,757
)
—
(1,913
)
Reclamation and other costs
(1,777
)
(840
)
(95
)
(2,712
)
Cash Cost, Before By-product Credits
(1)
146,962
64,449
—
211,411
Reclamation and other costs
2,543
792
—
3,335
Sustaining exploration
3,895
—
—
1,359
5,254
Sustaining capital
17,459
19,104
—
—
36,563
General and administrative
27,985
27,985
AISC, Before By-product Credits (1)
170,859
84,345
—
284,548
By-product credits:
Zinc
(74,571
)
(14,457
)
—
(89,028
)
Gold
(56,299
)
—
—
(56,299
)
Lead
(23,265
)
(30,762
)
—
(54,027
)
Total By-product credits
(154,135
)
(45,219
)
—
(199,354
)
Cash Cost, After By-product Credits
$
(7,173
)
$
19,230
$
—
$
12,057
AISC, After By-product Credits
$
16,724
$
39,126
$
—
$
85,194
Divided by silver ounces produced
6,981
2,609
—
9,590
Cash Cost, Before By-product Credits, per
Silver Ounce
$
21.05
$
24.70
$
—
$
22.05
By-product credits per ounce
(22.08
)
(17.33
)
—
(20.79
)
Cash Cost, After By-product Credits, per
Silver Ounce
$
(1.03
)
$
7.37
$
—
$
1.26
AISC, Before By-product Credits, per
Silver Ounce
$
24.48
$
32.33
$
—
$
29.67
By-product credits per ounce
(22.08
)
(17.33
)
—
(20.79
)
AISC, After By-product Credits, per Silver
Ounce
$
2.40
$
15.00
$
—
$
8.88
In thousands (except per ounce amounts)
Nine Months Ended September 30,
2021
Casa Berardi(5)
Nevada Operations(6)
Total Gold
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
172,760
$
46,832
$
219,592
Depreciation, depletion and
amortization
(61,159
)
(15,021
)
(76,180
)
Treatment costs
1,723
1,731
3,454
Change in product inventory
(2,401
)
(9,951
)
(12,352
)
Reclamation and other costs
(632
)
299
(333
)
Cash Cost, Before By-product Credits
(1)
110,291
23,890
134,181
Reclamation and other costs
632
681
1,313
Sustaining exploration
3,551
—
3,551
Sustaining capital
21,030
195
21,225
AISC, Before By-product Credits (1)
135,504
24,766
160,270
By-product credits:
Silver
(656
)
(1,131
)
(1,787
)
Total By-product credits
(656
)
(1,131
)
(1,787
)
Cash Cost, After By-product Credits
$
109,635
$
22,759
$
132,394
AISC, After By-product Credits
$
134,848
$
23,635
$
158,483
Divided by gold ounces produced
97
20
117
Cash Cost, Before By-product Credits, per
Gold Ounce
$
1,134
$
1,180
$
1,142
By-product credits per ounce
(7
)
(56
)
(15
)
Cash Cost, After By-product Credits, per
Gold Ounce
$
1,127
$
1,124
$
1,127
AISC, Before By-product Credits, per Gold
Ounce
$
1,394
$
1,223
$
1,364
By-product credits per ounce
(7
)
(56
)
(15
)
AISC, After By-product Credits, per Gold
Ounce
$
1,387
$
1,167
$
1,349
In thousands (except per ounce amounts)
Nine Months Ended September 30,
2021
Total Silver
Total Gold
Total
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
238,243
$
219,592
$
457,835
Depreciation, depletion and
amortization
(62,738
)
(76,180
)
(138,918
)
Treatment costs
40,531
3,454
43,985
Change in product inventory
(1,913
)
(12,352
)
(14,265
)
Reclamation and other costs
(2,712
)
(333
)
(3,045
)
Cash Cost, Before By-product Credits
(1)
211,411
134,181
345,592
Reclamation and other costs
3,335
1,313
4,648
Sustaining exploration
5,254
3,551
8,805
Sustaining capital
36,563
21,225
57,788
General and administrative
27,985
—
27,985
AISC, Before By-product Credits (1)
284,548
160,270
444,818
By-product credits:
Zinc
(89,028
)
—
(89,028
)
Gold
(56,299
)
—
(56,299
)
Lead
(54,027
)
—
(54,027
)
Silver
(1,787
)
(1,787
)
Total By-product credits
(199,354
)
(1,787
)
(201,141
)
Cash Cost, After By-product Credits
$
12,057
$
132,394
$
144,451
AISC, After By-product Credits
$
85,194
$
158,483
$
243,677
Divided by ounces produced
9,590
117
Cash Cost, Before By-product Credits, per
Ounce
$
22.05
$
1,142
By-product credits per ounce
(20.79
)
(15
)
Cash Cost, After By-product Credits, per
Ounce
$
1.26
$
1,127
AISC, Before By-product Credits, per
Ounce
$
29.67
$
1,364
By-product credits per ounce
(20.79
)
(15
)
AISC, After By-product Credits, per
Ounce
$
8.88
$
1,349
In thousands (except per ounce amounts)
Nine Months Ended September 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
$
153,496
$
35,787
$
18,271
$
207,854
Depreciation, depletion and
amortization
(37,152
)
(5,152
)
(3,149
)
(45,453
)
Treatment costs
58,517
7,502
232
66,251
Change in product inventory
1,749
807
681
3,237
Reclamation and other costs
(478
)
—
(1,050
)
(1,528
)
Exclusion of Lucky Friday cash costs
—
(38,944
)
(38,944
)
Cash Cost, Before By-product Credits
(1)
176,132
—
14,985
191,417
Reclamation and other costs
2,365
—
342
2,707
Sustaining exploration
374
—
—
1,362
1,736
Sustaining capital
18,276
—
299
38
18,613
General and administrative
26,263
26,263
AISC, Before By-product Credits (1)
197,147
—
15,626
240,736
By-product credits:
Zinc
(59,711
)
—
—
(59,711
)
Gold
(57,850
)
—
(10,402
)
(68,252
)
Lead
(22,208
)
—
—
(22,208
)
Total By-product credits
(139,769
)
—
(10,402
)
(150,171
)
Cash Cost, After By-product Credits
$
36,363
$
—
$
4,583
$
41,246
AISC, After By-product Credits
$
57,378
$
—
$
5,224
$
90,565
Divided by ounces produced
8,164
—
772
8,936
Cash Cost, Before By-product Credits, per
Ounce
$
21.57
$
—
$
19.41
$
21.39
By-product credits per ounce
(17.12
)
—
(13.47
)
(16.81
)
Cash Cost, After By-product Credits, per
Ounce
$
4.45
$
—
$
5.94
$
4.58
AISC, Before By-product Credits, per
Ounce
$
24.15
$
—
$
20.23
$
26.90
By-product credits per ounce
(17.12
)
—
(13.47
)
(16.81
)
AISC, After By-product Credits, per
Ounce
$
7.03
$
—
$
6.76
$
10.09
In thousands (except per ounce amounts)
Nine Months Ended September 30,
2020
Casa Berardi
Nevada Operations
Total Gold
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
140,893
$
44,348
$
185,241
Depreciation, depletion and
amortization
(44,314
)
(22,725
)
(67,039
)
Treatment costs
1,693
45
1,738
Change in product inventory
1,751
15,869
17,620
Reclamation and other costs
(637
)
(978
)
(1,615
)
Cash Cost, Before By-product Credits
(1)
99,386
23,381
122,767
Reclamation and other costs
287
654
941
Sustaining exploration
1,493
—
1,493
Sustaining capital
24,413
1,600
26,013
AISC, Before By-product Credits (1)
125,579
25,635
151,214
By-product credits:
Silver
(285
)
(635
)
(920
)
Total By-product credits
(285
)
(635
)
(920
)
Cash Cost, After By-product Credits
$
99,101
$
22,746
$
121,847
AISC, After By-product Credits
$
125,294
$
25,000
$
150,294
Divided by ounces produced
84
32
116
Cash Cost, Before By-product Credits, per
Ounce
$
1,184
$
736
$
1,061
By-product credits per ounce
(3
)
(20
)
(8
)
Cash Cost, After By-product Credits, per
Ounce
$
1,181
$
716
$
1,053
AISC, Before By-product Credits, per
Ounce
$
1,496
$
807
$
1,307
By-product credits per ounce
(3
)
(20
)
(8
)
AISC, After By-product Credits, per
Ounce
$
1,493
$
787
$
1,299
In thousands (except per ounce amounts)
Nine Months Ended September 30,
2020
Total Silver
Total Gold
Total
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
207,854
$
185,241
$
393,095
Depreciation, depletion and
amortization
(45,453
)
(67,039
)
(112,492
)
Treatment costs
66,251
1,738
67,989
Change in product inventory
3,237
17,620
20,857
Reclamation and other costs
(1,528
)
(1,615
)
(3,143
)
Exclusion of Lucky Friday cash costs
(38,944
)
—
(38,944
)
Cash Cost, Before By-product Credits
(1)
191,417
122,767
327,362
Reclamation and other costs
2,707
941
3,648
Sustaining exploration
1,736
1,493
3,229
Sustaining capital
18,613
26,013
44,626
General and administrative
26,263
—
26,263
AISC, Before By-product Credits (1)
240,736
151,214
405,128
By-product credits:
Zinc
(59,711
)
—
(59,711
)
Gold
(68,252
)
—
(68,252
)
Lead
(22,208
)
—
(22,208
)
Silver
(920
)
(920
)
Total By-product credits
(150,171
)
(920
)
(151,091
)
Cash Cost, After By-product Credits
$
41,246
$
121,847
$
176,271
AISC, After By-product Credits
$
90,565
$
150,294
$
254,037
Divided by ounces produced
8,936
116
Cash Cost, Before By-product Credits, per
Ounce
$
21.39
$
1,061
By-product credits per ounce
(16.81
)
(8
)
Cash Cost, After By-product Credits, per
Ounce
$
4.58
$
1,053
AISC, Before By-product Credits, per
Ounce
$
26.90
$
1,307
By-product credits per ounce
(16.81
)
(8
)
AISC, After By-product Credits, per
Ounce
$
10.09
$
1,299
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
(Unchanged from Previous
Estimate)
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
$
230,400
$
42,600
$
273,000
Depreciation, depletion and
amortization
(81,500
)
(14,500
)
(96,000
)
Treatment costs
500
5,000
1,700
Change in product inventory
(8,200
)
(4,650
)
(14,750
)
Reclamation and other costs
550
675
1,174
Cash Cost, Before By-product Credits
(1)
141,700
29,125
165,125
Reclamation and other costs
700
300
1,275
Exploration
4,400
—
4,400
Sustaining capital
31,300
125
31,485
AISC, Before By-product Credits (1)
178,100
29,550
202,285
By-product credits:
Silver
(840
)
(1,125
)
(2,040
)
Total By-product credits
(840
)
(1,125
)
(2,040
)
Cash Cost, After By-product Credits
$
140,860
$
28,000
$
163,085
AISC, After By-product Credits
$
177,260
$
28,425
$
200,245
Divided by gold ounces produced
133
21
153
Cash Cost, Before By-product Credits, per
Gold Ounce
$
1,069
$
1,421
$
1,076
By-product credits per gold ounce
(6
)
(55
)
(13
)
Cash Cost, After By-product Credits, per
Gold Ounce
$
1,063
$
1,366
$
1,066
AISC, Before By-product Credits, per Gold
Ounce
$
1,344
$
1,441
$
1,322
By-product credits per gold ounce
(7
)
(55
)
(13
)
AISC, After By-product Credits, per Gold
Ounce
$
1,338
$
1,386
$
1,309
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
$
273,000
$
597,500
Depreciation, depletion and
amortization
(86,600
)
(96,000
)
(182,600
)
Treatment costs
52,000
1,700
53,700
Change in product inventory
(4,950
)
(14,750
)
(19,700
)
Reclamation and other costs
3,000
1,175
4,175
Cash Cost, Before By-product Credits
(1)
287,950
165,125
453,075
Reclamation and other costs
4,400
1,275
5,675
Exploration
6,032
4,400
10,432
Sustaining capital
61,500
31,485
92,985
General and administrative
38,700
—
38,700
AISC, Before By-product Credits (1)
398,582
202,285
600,867
By-product credits:
Zinc
(115,000
)
—
(115,000
)
Gold
(75,100
)
—
(75,100
)
Lead
(74,000
)
—
(74,000
)
Silver
(2,040
)
(2,040
)
Total By-product credits
(264,100
)
(2,040
)
(266,140
)
Cash Cost, After By-product Credits
$
23,850
$
163,085
$
186,935
AISC, After By-product Credits
$
134,482
$
202,285
$
334,727
Divided by ounces produced
13,450
153
Cash Cost, Before By-product Credits, per
Ounce
$
21.41
$
1,076
By-product credits per ounce
(19.64
)
(13
)
Cash Cost, After By-product Credits, per
Ounce
$
1.77
$
1,066
AISC, Before By-product Credits, per
Ounce
$
29.63
$
1,322
By-product credits per ounce
(19.64
)
(13
)
AISC, After By-product Credits, per
Ounce
$
10.00
$
1,309
(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 and royalties, 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 was 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 $5.4 million, along
with $6.3 million in non-cash depreciation expense, in the first
nine months 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
$2.0 million for the first nine months 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)
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 reduced mill throughput. Suspension-related costs totaling $1.6
million for the first nine months 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, Cash
Cost, Before By-product Credits, Cash Cost, After By-product
Credits, AISC, Before By-product Credits, and AISC, After
By-product Credits.
(6)
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 $15.0
million and $9.6 million for the first nine months of 2021 and
2020, respectively, 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.
Reconciliation of Cash Provided by Operating Activities
(GAAP) to Free Cash Flow (non-GAAP)
This release refers to a non-GAAP measure of free cash flow,
calculated as cash provided by operating activities, less additions
to properties, plants, equipment and mineral interests. Management
believes that, when presented in conjunction with comparable GAAP
measures, free cash flow is useful to investors in evaluating our
operating performance. The following table reconciles cash provided
by operating activities to free cash flow:
Dollars are in thousands
Three Months Ended
Nine Months Ended
Sept 30,
2021
Sept 30,
2020
Sept 30,
2021
Sept 30,
2020
Cash provided by operating activities
$
42,742
$
73,439
$
166,982
$
115,892
Less: Additions to properties, plants
equipment and mineral interests
(26,899
)
(23,693
)
(80,210
)
(54,382
)
Free cash flow
$
15,843
$
49,746
$
86,772
$
61,510
Category: Earnings
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211104005392/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
Hecla Mining (NYSE:HL)
Historical Stock Chart
From Jun 2024 to Jul 2024
Hecla Mining (NYSE:HL)
Historical Stock Chart
From Jul 2023 to Jul 2024