Record annual revenue and 2nd highest cash
flow from operations and free cash flow
Hecla Mining Company (NYSE:HL) today announced fourth quarter
and full-year 2021 financial and operating results.
ANNUAL HIGHLIGHTS
Operational
- Produced 12.9 million silver ounces and 201,327 gold ounces,
meeting production and cost guidance.
- Developed the Underhand Closed Bench (UCB) mining method at
Lucky Friday, which contributed to the 75% increase in silver
production and showed improvements in managing seismicity.
- Casa Berardi achieved record throughput and recoveries improved
by 4%, producing 134,511 gold ounces.
- Second highest reserves for both silver and gold in Company
history.
Financial
- Record sales of $807.5 million with net income of $35.1
million.
- Record Adjusted EBITDA of $278.8 million.1
- Second highest cash flow from operations of $220.3 million and
free cash flow of $111.3 million.
- Record exploration and pre-development expenditures of $47.9
million.
- Returned $20.7 million, or 19%, of free cash flow to our common
and preferred shareholders through dividends.
Environmental, Social, Governance
- Strong safety performance with an All-Injury Frequency Rate of
1.45, 40% below the U.S. average.
- Net neutral for scope 1 & 2 emissions with only 76,000
tonnes that were offset by carbon credits.
- Successfully managed the impacts of COVID-19.
"2021 was an outstanding year for Hecla as we generated record
revenues and adjusted EBITDA resulting in the second highest free
cash flow in our 130-year history,” said Phillips S. Baker Jr.,
President and CEO. “The year also positions Hecla for future
success with our exploration program delivering our highest silver
reserves in more than 20 years and the Lucky Friday’s establishment
of a new, innovative mining method that should be both safer and
more productive. This method, which we call the Underhand Closed
Bench method will allow the Lucky Friday to increase projected
production in 2022 by almost a million silver ounces over 2021,
which was a million and half more than 2020.”
Baker continued, “Since Hecla is not only the largest producer
of silver in the United States but also has the largest silver
reserve base in the U.S., our stakeholders are uniquely positioned
to benefit from the growing demand for silver in the transition to
clean energy.”
FINANCIAL OVERVIEW
In Thousands unless stated otherwise
4Q-2021
3Q-2021
2Q-2021
1Q-2021
4Q-2020
FY 2021
FY 2020
FINANCIAL AND PRODUCTION
SUMMARY
Sales
$
185,078
$
193,560
$
217,983
$
210,852
$
188,890
$
807,473
$
691,873
Cost of Sales*
$
131,837
$
158,332
$
156,052
$
143,451
$
137,978
$
589,672
$
530,773
Gross profit
$
53,241
$
35,228
$
61,931
$
67,401
$
50,912
$
217,801
$
161,100
Income (loss) applicable to common
stockholders
$
11,737
$
(1,117
)
$
2,610
$
21,313
$
2,967
$
34,543
$
(10,009
)
Basic income (loss) per common share (in
dollars)
$
0.02
$
—
$
0.05
$
0.04
$
0.01
$
0.06
$
(0.02
)
Adjusted EBITDA 1
$
58,249
$
49,414
$
84,507
$
86,610
$
57,773
$
278,780
$
230,684
Net Debt to Adjusted EBITDA1
1.1
1.7
Cash provided by operating activities
$
53,355
$
42,742
$
86,304
$
37,936
$
64,901
$
220,337
$
180,793
Capital expenditures
$
(28,838
)
$
(26,899
)
$
(31,898
)
$
(21,413
)
$
(36,634
)
$
(109,048
)
$
(91,016
)
Free Cash Flow 2
$
24,517
$
15,843
$
54,406
$
16,523
$
28,267
$
111,289
$
89,777
Silver ounces produced
3,226,927
2,676,084
3,524,783
3,459,446
3,352,336
12,887,240
13,542,957
Silver payable ounces sold
2,606,622
2,581,690
3,415,464
3,030,026
3,227,951
11,633,802
12,305,917
Gold ounces produced
47,977
42,207
59,139
52,004
49,014
201,327
208,962
Gold payable ounces sold
44,156
53,000
47,168
57,286
$
43.144
201,610
202,694
*Cost of sales is comprised of cost of sales and other direct
production costs and depreciation, depletion and amortization
referred to herein as “cost of sales”.
Consolidated silver cost of sales for 2021 were $310.9 million;
cash cost and all-in sustaining costs ("AISC") per silver ounce,
after by-product credits, for the year were $1.37 and $9.19,
respectively.3,4 The year over year decrease in cash cost and AISC
per silver ounce (each after by-product credits) was due to higher
silver production and by-product credits as well as lower treatment
charges, partially offset by higher operating costs and additional
sustaining capital.3,4 Consolidated gold cost of sales for the year
were $278.8 million, cash cost and AISC per gold ounce (each after
by-product credits), were $1,127 and $1,374, respectively.3,4 The
year over year increase in cash cost was due to higher production
costs partially offset by higher gold production with AISC also
impacted by lower sustaining capital.
Income applicable to common stockholders increased in the fourth
quarter 2021 over the third quarter due to:
- Gross profit increased by 51% due primarily to increased
production at all three operations.
- Exploration and pre-development expense decreased by $4.2
million due to third-party assays being delayed and the completion
of seasonal exploration programs in the prior quarter.
- Increase in benefit from income and mining taxes of $21.1
million due to a partial release of the deferred tax asset
valuation allowance.
- Partially offsetting these increases are realized and
unrealized losses on derivatives of $25.1 million compared to a
third quarter gain of $9.3 million.
Income applicable to common stockholders increased in 2021 over
2020 due to:
- Gross profit increased by 35% due to higher metal prices and a
full year of production at Lucky Friday.
- Lower interest expense by $7.6 million as a result of the
revolving credit facility being undrawn in 2021 and 2020 debt
refinancing expenses.
- Income tax benefits of $29.6 million, compared to the 2020
provision of $8.2 million through the use of tax loss carryforwards
and a partial release of the deferred tax asset valuation
allowance.
The above items were partially offset by:
- Increase in exploration and pre-development expense of $29.6
million.
- Combined realized and unrealized losses on derivatives and
investments of $35.8 million in 2021, compared to a loss of $11.8
million in 2020.
- Provision for closed operations and environmental matters of
$14.6 million, an increase of $10.6 million over 2020 primarily due
to a $6.5 million lawsuit settlement payment for a 1989
indemnification agreement and a $5.0 million increase for estimated
reclamation costs at two closed sites.
Cash provided by operating activities increased $39.5 million
year over year and $10.6 million in the fourth quarter compared to
the third quarter of 2021 due to increased gross margin, partially
offset by unfavorable working capital changes. The yearly increase
was also impacted by higher exploration and pre-development
spending, which declined quarter over quarter due to seasonal
variances.
Adjusted EBITDA increased $8.8 million in the fourth quarter
compared to the third quarter of 2021, and was $278.8 million for
the full-year 2021, an increase of $48.1 million over 2020, due to
higher sales margins partially offset by higher exploration and
pre-development spending.1
Fourth quarter capital expenditures totaled $28.8 million,
including $9.5 million at Greens Creek, $9.5 million at Casa
Berardi, and $9.1 million at Lucky Friday. Capital expenditures for
the year 2021 totaled $109.0 million compared to $91.0 million in
2020.
Forward Sales Contracts for Base Metals and Foreign
Currency
The Company uses financially settled forward sales contracts to
manage exposures to changes in prices of zinc and lead. At December
31, 2021, the Company had contracts covering approximately 62% of
the forecasted payable zinc production (through 2024) at an average
price of $1.29 per pound, and 49% of the forecasted payable lead
production (through 2024) at an average price of $0.99 per pound.
Effective November 1, 2021, the Company elected to apply hedge
accounting for all then open and future financially settled forward
sales contracts, which will reduce income statement volatility for
unrealized gains and losses on open positions.
The Company also enters into foreign exchange forward contracts
to buy Canadian dollars. At December 31, 2021, the Company had
hedged approximately 76% of forecasted Canadian dollar direct
production costs for 2022 at an average CAD/USD rate of 1.30, 51%
for 2023 at 1.30, 18% for 2024 at 1.31, and 5% for 2025 at 1.28.
The Company has also hedged approximately 34% of capital costs for
2022 at 1.29.
OPERATIONS OVERVIEW
Greens Creek Mine - Alaska
Dollars are in thousands except cost per
ton
4Q-2021
3Q-2021
2Q-2021
1Q-2021
4Q-2020
FY 2021
FY 2020
GREENS CREEK
Tons of ore processed
221,814
211,142
214,931
194,080
189,092
841,967
818,408
Total production cost per ton
$
174.55
$
181.60
$
171.13
$
182.61
$
195.02
$
177.30
$
179.37
Ore grade milled - Silver (oz./ton)
12.60
11.14
14.52
16.01
15.17
13.51
15.65
Ore grade milled - Gold (oz./ton)
0.07
0.07
0.08
0.09
0.07
0.08
0.08
Ore grade milled - Lead (%)
2.61
2.68
3.14
3.06
2.84
2.87
3.13
Ore grade milled - Zinc (%)
6.28
7.05
7.57
7.62
6.96
7.11
7.58
Silver produced (oz.)
2,262,635
1,837,270
2,558,447
2,584,870
2,330,664
9,243,222
10,494,726
Gold produced (oz.)
10,229
9,734
12,859
13,266
10,276
46,088
48,491
Lead produced (tons)
4,731
4,591
5,627
4,924
4,404
19,873
21,400
Zinc produced (tons)
12,457
13,227
14,610
13,354
11,956
53,648
56,814
Sales
$
87,865
$
84,806
$
113,763
$
98,409
$
95,602
$
384,843
$
327,820
Cost of sales
$
(49,252
)
$
(55,193
)
$
(55,488
)
$
(53,180
)
$
(57,252
)
$
(213,113
)
$
(210,748
)
Gross profit
$
38,613
$
29,613
$
58,275
$
45,229
$
38,350
$
171,730
$
117,072
Cash flow from operations
$
51,328
$
43,098
$
69,821
$
44,468
$
58,268
$
208,715
$
176,975
Capital expenditures
$
(9,544
)
$
(6,228
)
$
(6,339
)
$
(1,772
)
$
(7,155
)
$
(23,883
)
$
(19,685
)
Free cash flow
$
41,784
$
36,870
$
63,482
$
42,696
$
51,113
$
184,832
$
157,290
Cost of sales in 2021 increased to $213.1 million compared to
$210.7 million in 2020 due to higher mining costs, as lower
capitalized development footage resulted in an increased portion of
costs allocated to production, and higher concentrate freight
costs, as rates increased due to market conditions. Cash cost and
AISC per silver ounce (each after by-product credits) were $(0.65)
and $3.19, respectively, decreasing year over year due to higher
by-product credits and lower treatment costs. 3,4
Lucky Friday Mine - Idaho
Dollars are in thousands except cost per
ton
4Q-2021
3Q-2021
2Q-2021
1Q-2021
4Q-2020
FY 2021
FY 2020
LUCKY FRIDAY
Tons of ore processed
80,097
78,227
82,442
81,071
69,257
321,837
179,208
Total production cost per ton
$
198.83
$
190.66
$
199.48
$
181.28
$
213.82
$
191.50
$
251.49
Ore grade milled - Silver (oz./ton)
12.54
11.21
11.60
11.18
12.53
11.64
11.85
Ore grade milled - Lead (%)
8.11
7.22
7.55
7.51
7.74
7.60
7.49
Ore grade milled - Zinc (%)
3.33
3.30
3.44
3.70
3.85
3.44
3.88
Silver produced (oz.)
955,401
831,532
913,294
863,901
830,200
3,564,128
2,031,874
Lead produced (tons)
6,131
5,313
5,913
5,780
5,103
23,137
12,727
Zinc produced (tons)
2,296
2,319
2,601
2,753
2,457
9,969
6,298
Sales
$
32,938
$
29,783
$
39,645
$
29,122
$
27,928
$
131,488
$
63,025
Cost of sales
$
(23,251
)
$
(23,591
)
$
(27,901
)
$
(22,795
)
$
(20,919
)
$
(97,538
)
$
(56,706
)
Gross profit
$
9,687
$
6,192
$
11,744
$
6,327
$
7,009
$
33,950
$
6,319
Cash flow from operations
$
16,953
$
15,017
$
19,681
$
10,943
$
7,217
$
62,594
$
(870
)
Capital expenditures
$
(9,109
)
$
(9,133
)
$
(5,731
)
$
(5,912
)
$
(11,148
)
$
(29,885
)
$
(25,776
)
Free cash flow
$
7,844
$
5,884
$
13,950
$
5,031
$
(3,931
)
$
32,709
$
(26,646
)
Cost of sales in 2021 increased to $97.5 million compared to
$56.7 million in 2020 reflecting a full year of production
following the strike ending in 2020. Cash cost and AISC per silver
ounce (each after by-product credits) were $6.60 and $14.34,
respectively, decreasing year over year due to higher production
and by-product credits partially offset by higher costs. 3,4
In 2021, we tested and implemented the UCB mining method. The
UCB method is a new, productive mining method developed by Hecla in
an effort to proactively control fault-slip seismicity in deep,
high-stress, narrow-vein mining. The method uses bench drilling and
blasting methods to fragment significant vertical and lateral
extents of the vein beneath a top cut taken along the strike of the
vein and under engineered backfill. The method is accomplished
without the use of drop raises or lower mucking drives which may
result in local stress concentrations and increased exposure to
seismic events. Large blasts using up to 35,000 lbs. of pumped
emulsion and programmable electronic detonators fragment up to 350
feet of strike length to a depth of approximately 30 feet. These
large blasts proactively induce fault-slip seismicity at the time
of the blast and shortly after it. This blasted corridor is then
mined underhand for two cuts. As these cuts are mined, little to no
blasting is done to advance them. Dilution is controlled by
supporting the hanging wall and footwall as the mining progresses
through the blasted ore. The entire cycle repeats and stoping
advances downdip, under fill, and in a de-stressed zone. The method
allows for greater control of fault-slip seismic events,
significantly improving safety. In addition, a notable productivity
increase has been achieved by reducing seismic delays and utilizing
bulk mining techniques. In 2021, 86% of the tons mined were
produced through the UCB method.
Casa Berardi - Quebec
Dollars are in thousands except cost per
ton
4Q-2021
3Q-2021
2Q-2021
1Q-2021
4Q-2020
FY 2021
FY 2020
CASA BERARDI
Tons of ore processed - underground
161,355
167,435
178,908
186,919
185,335
694,617
658,271
Tons of ore processed - surface pit
225,662
230,708
195,775
181,484
197,646
833,629
625,430
Tons of ore processed - total
387,017
398,143
374,683
368,403
382,981
1,528,246
1,283,701
Surface tons mined - ore and waste
1,507,457
1,483,231
2,033,403
1,991,087
1,493,706
7,015,178
5,559,302
Total production cost per ton
$
108.82
$
86.95
$
99.36
$
99.67
$
98.33
$
98.60
$
105.71
Ore grade milled - Gold (oz./ton) -
underground
0.165
0.155
0.148
0.147
0.147
0.161
0.136
Ore grade milled - Gold (oz./ton) -
surface pit
0.072
0.037
0.055
0.048
0.052
0.056
0.051
Ore grade milled - Gold (oz./ton) -
combined
0.110
0.087
0.100
0.120
0.123
0.104
0.117
Ore grade milled - Silver (oz./ton)
0.02
0.02
0.03
0.04
0.03
0.03
0.02
Gold produced (oz.) - underground
22,910
24,170
23,441
27,569
27,261
98,090
89,521
Gold produced (oz.) - surface pit
14,356
5,552
7,892
8,621
10,319
36,421
31,971
Total Gold produced (oz.)
37,266
29,722
31,333
36,190
37,580
134,511
121,492
Total Silver produced (oz.)
7,967
7,012
7,917
10,675
8,858
33,571
24,142
Sales
$
60,054
$
56,065
$
56,122
$
72,911
$
59,493
$
245,152
$
209,224
Cost of sales
$
(57,069
)
$
(58,164
)
$
(54,669
)
$
(59,927
)
$
(53,521
)
$
(229,829
)
$
(194,414
)
Gross profit (loss)
$
2,985
$
(2,099
)
$
1,453
$
12,984
$
5,972
$
15,323
$
14,810
Cash flow from operations
$
12,153
$
21,440
$
17,495
$
32,229
$
25,696
$
83,317
$
88,066
Capital expenditures
$
(9,537
)
$
(11,488
)
$
(14,745
)
$
(13,847
)
$
(16,427
)
$
(49,617
)
$
(40,840
)
Free cash flow
$
2,616
$
9,952
$
2,750
$
18,382
$
9,269
$
33,700
$
47,226
Full-year 2021 cost of sales was $229.8 million, cash cost and
AISC per ounce, after by-product credits, were $1,125 and $1,399
respectively.3,4 Year over year decline in cash cost and AISC per
ounce was due to higher gold production in 2021; AISC per ounce was
also impacted by lower sustaining capital, partially offset by
higher exploration spending. 3,4
Nevada Operations
Dollars are in thousands except cost per
ton
4Q-2021
3Q-2021
2Q-2021
1Q-2021
4Q-2020
FY 2021
FY 2020
NEVADA OPERATIONS
Tons of ore processed
2,185
11,953
38,947
16,459
—
69,544
27,984
Total production cost per ton
$
200.72
$
374.46
$
161.50
$
360.72
$
—
$
132.64
$
892.09
Ore grade milled - Gold (oz./ton)
0.226
0.234
0.41
0.185
—
0.321
1.232
Silver produced (oz.)
924
270
45,125
—
—
46,319
37,443
Gold produced (oz.)
482
2,751
14,947
2,548
—
20,728
31,756
Cash flow from operations
$
(2,060
)
$
19,163
$
(573
)
$
855
$
1,897
$
17,385
$
13,696
Capital additions
$
(277
)
$
(29
)
$
(5,075
)
$
(89
)
$
(2,154
)
$
(5,470
)
$
(4,003
)
Free cash flow
$
(2,337
)
$
19,134
$
(5,648
)
$
766
$
(257
)
$
11,915
$
9,693
2021 production and revenue was generated from processing
previously stockpiled ore at third-party processing facilities.
Exploration activities at Midas and development of a decline to the
Hatter Graben area at Hollister are ongoing, with underground
exploration drilling of Hatter Graben commencing from available
platforms in the fourth quarter of 2021.
EXPLORATION AND PRE-DEVELOPMENT
Exploration and pre-development expenses totaled $12.9 million
for the fourth quarter and $47.9 million for the full year (a
Company record), an increase of $29.6 million compared to 2020.
For the year ended 2021, the Company reported the second highest
silver and gold reserves at 200 million ounces and 2.7 million
ounces, respectively. Silver reserves increased 6% year over year
with Greens Creek increasing reserves by 12% to 125 million ounces,
the second highest in the mine’s history since 2002. Silver and
gold inferred resources increased by 8% and 2%, respectively. A
breakdown of the Company’s reserves and resources is located in
Table A at the end of this news release.
For further details on the Company’s 2021 exploration and
pre-development program and 2022 planned expenditures as well as
reserves and resources at year-end 2021, please refer to the news
release entitled “Hecla Reports 2nd Highest Silver Reserves in
Company History” released on February 17, 2022.
2022 ESTIMATES5
The Company is providing a three-year production outlook and
estimates of costs, capital and exploration and pre-development
expenses for 2022. Cost guidance includes planned COVID-19
management costs and 5% inflation, which is being experienced
throughout the industry. The guidance below excludes any unforeseen
disruptions related to COVID-19 and its variants.
2022 Production Outlook
Silver Production
(Moz)
Gold Production (Koz)
Silver Equivalent
(Moz)
Gold Equivalent (Koz)
Greens Creek *
8.6 - 8.9
40 - 43
20.7 - 21.2
268 - 275
Lucky Friday *
4.3 - 4.6
N/A
8.9 - 9.3
116 - 120
Casa Berardi
N/A
125 - 132
9.7 - 10.2
125 - 132
2022 Total
12.9 - 13.5
165 - 175
39.3 - 40.7
509 - 527
2023 Total
13.5 - 14.5
175 - 185
40.7 - 42.5
527 - 550
2024 Total
14.5 - 15.1
185 - 195
42.5 - 43.8
550 - 567
*Equivalent ounces include lead and zinc
production
2022 Cost Outlook
Costs of Sales
(million)
Cash cost, after by-product
credits, per silver/gold ounce3
AISC, after by-product
credits, per produced silver/gold ounce4
Greens Creek
$230
$0.75 - $2.50
$6.50 - $8.50
Lucky Friday
$115
$0.75 - $2.00
$7.25 - $9.25
Total Silver
$345
$0.75 - $2.50
$9.75 - $11.75
Casa Berardi (Total Gold)
$210
$1,175 - $1,325
$1,450 - $1,600
2022 Capital and Exploration Outlook
Capital expenditures
$135 million
Exploration and Pre-development
expenditures
$45 million
DIVIDENDS
Common Stock
The Board of Directors declared a quarterly cash dividend of
$0.00625 per share of common stock, consisting of $0.00375 per
share for the minimum dividend component and $0.0025 per share for
the silver-linked component. The common stock dividend is payable
on or about March 18, 2022, to stockholders of record on March 9,
2022. The realized silver price was $23.49 in the fourth quarter
satisfying the criterion for the silver-linked component under the
Company's common stock dividend policy.
Preferred Stock
The Board of Directors elected to declare a quarterly cash
dividend of $0.875 per share of preferred stock, payable on or
about April 1, 2022, to stockholders of record on March 15,
2022.
CONFERENCE CALL AND WEBCAST
A conference call and webcast will be held Tuesday, February 22,
at 10:00 a.m. Eastern Time to discuss these results. We recommend
that you dial in at least 10 minutes before the call commencement.
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 3975176 and must be provided when dialing in.
Hecla's live and archived webcast can be accessed at
www.hecla-mining.com under Investors.
VIRTUAL INVESTOR EVENT
Hecla will be holding a Virtual Investor Event on Tuesday,
February 22, from 1:00 p.m. to 2:30 p.m. Eastern Time.
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
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/2022-february-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 properties 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
United States generally accepted accounting principles (GAAP).
These measures should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
GAAP. The non-GAAP financial measures cited in this release and
listed below are reconciled to their most comparable GAAP measure
at the end of this release.
(1) Adjusted EBITDA is a non-GAAP measurement, a reconciliation
of which to net income, the most comparable GAAP measure, can be
found at the end of the release. Adjusted EBITDA is a measure used
by management to evaluate the Company's operating performance but
should not be considered an alternative to net income, or cash
provided by operating activities as those terms are defined by
GAAP, and does not necessarily indicate whether cash flows will be
sufficient to fund cash needs. In addition, the Company may use it
when formulating performance goals and targets under its incentive
program. Net debt to adjusted EBITDA is a non-GAAP measurement, a
reconciliation of which to debt and net income (loss), the most
comparable GAAP measurements, 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.
(2) Free cash flow is a non-GAAP measure calculated as cash
provided by operating activities less additions to properties,
plants and equipment. Cash provided by operating activities for the
Greens Creek, Lucky Friday, Casa Berardi, and Nevada operating
segments excludes exploration and pre-development expense, as these
are discretionary expenditures and not a component of the mines’
operating performance.
(3) Cash cost, after by-product credits, per silver and gold
ounce is a non-GAAP measurement, a reconciliation of which to cost
of sales, and other direct production costs and depreciation,
depletion and amortization can be found at the end of the release.
It is an important operating statistic that management utilizes to
measure each mine's operating performance. It also allows the
benchmarking of performance of each mine versus those of our
competitors. As a primary silver mining company, management also
uses the statistic on an aggregate basis - aggregating the Greens
Creek and Lucky Friday 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 first nine-months of 2020, 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.
(4) All-in sustaining cost (AISC), after by-product credits, per
silver and gold ounce is a non-GAAP measurement, a reconciliation
of which to cost of sales and other direct production costs and
depreciation, depletion and amortization can be found at the end of
the release. AISC, after by-product credits, includes cost of sales
and other direct production costs, expenses for reclamation and
exploration at the mine sites, corporate exploration related to
sustaining operations, and all site sustaining capital costs. AISC,
after by-product credits, is calculated net of depreciation,
depletion, and amortization and by-product credits.
Current GAAP measures used in the mining industry, such as cost
of goods sold, do not capture all the expenditures incurred to
discover, develop and sustain silver and gold production.
Management believes that all-in sustaining costs is a non-GAAP
measure that provides additional information to management,
investors and analysts to help (i) in the understanding of the
economics of our operations and performance compared to other
producers and (ii) in the transparency by better defining the total
costs associated with production. Similarly, the statistic is
useful in identifying acquisition and investment opportunities as
it provides a common tool for measuring the financial performance
of other mines with varying geologic, metallurgical and operating
characteristics. In addition, the Company may use it when
formulating performance goals and targets under its incentive
program.
Other
(5) Expectations for 2022 include silver, gold, lead and zinc
production from Greens Creek, Lucky Friday and Casa Berardi
converted using Au $1,700/oz, Ag $22/oz, Zn $1.50/lb., and Pb
1.00$/lb. Numbers may be rounded.
Cautionary Statement Regarding Forward
Looking Statements, Including 2022 Outlook
This news release contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which are intended to be covered by the safe harbor
created by such sections and other applicable laws, including
Canadian securities laws. Words such as “may”, “will”, “should”,
“expects”, “intends”, “projects”, “believes”, “estimates”,
“targets”, “anticipates” and similar expressions are used to
identify these forward-looking statements. Such forward-looking
statements may include, without limitation: (i) new mining method
implemented at Lucky Friday should improve safety and increase
productivity; (ii) increased demand for silver due to transition to
clean energy; and; (iii) Mine-specific and Company-wide 2022
estimates of future production, sales and costs of sales, as well
as cash cost and AISC per ounce (in each case after by-product
credits) and Company-wide estimated spending on capital,
exploration and pre-development for 2022. 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. Such
assumptions, include, but are not limited to: (a) there being no
significant change to current geotechnical, metallurgical,
hydrological and other physical conditions; (b) permitting,
development, operations and expansion of the Company’s projects
being consistent with current expectations and mine plans; (c)
political/regulatory developments in any jurisdiction in which the
Company operates being consistent with its current expectations;
(d) the exchange rate for the Canadian dollar to the U.S. dollar,
being approximately consistent with current levels; (e) certain
price assumptions for gold, silver, lead and zinc; (f) prices for
key supplies being approximately consistent with current levels;
(g) the accuracy of our current mineral reserve and mineral
resource estimates; (h) there being no significant changes to our
plans for 2022 and beyond due to COVID-19 or any other public
health issue, including, but not limited to with respect to
availability of employees, vendors and equipment; and (i) the
Company’s plans for development and production will proceed as
expected and will not require revision as a result of risks or
uncertainties, whether known, unknown or unanticipated. Where the
Company expresses or implies an expectation or belief as to future
events or results, such expectation or belief is expressed in good
faith and believed to have a reasonable basis. However, such
statements are subject to risks, uncertainties and other factors,
which could cause actual results to differ materially from future
results expressed, projected or implied by the “forward-looking
statements.” Such risks include, but are not limited to gold,
silver and other metals price volatility, operating risks, currency
fluctuations, increased production costs and variances in ore grade
or recovery rates from those assumed in mining plans, community
relations, conflict resolution and outcome of projects or
oppositions, litigation, political, regulatory, labor and
environmental risks, and exploration risks and results, including
that mineral resources are not mineral reserves, they do not have
demonstrated economic viability and there is no certainty that they
can be upgraded to mineral reserves through continued exploration.
For a more detailed discussion of such risks and other factors, see
the Company’s 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, including the Company's 2021 10-K expected to be
filed on February 22, 2022. The Company does not undertake any
obligation to release publicly revisions to any “forward-looking
statement,” including, without limitation, outlook, to reflect
events or circumstances after the date of this news release, or to
reflect the occurrence of unanticipated events, except as may be
required under applicable securities laws. Investors should not
assume that any lack of update to a previously issued
“forward-looking statement” constitutes a reaffirmation of that
statement. Continued reliance on “forward-looking statements” is at
investors’ own risk.
Cautionary Statements to Investors on
Reserves and Resources
This news release uses the terms “mineral resources,” “measured
mineral resources,” “indicated mineral resources” and “inferred
mineral resources.” Mineral resources that are not mineral reserves
do not have demonstrated economic viability. You should not assume
that all or any part of measured or indicated mineral resources
will ever be converted into mineral reserves. Further, inferred
mineral resources have a great amount of uncertainty as to their
existence and as to whether they can be mined legally or
economically, and an inferred mineral resource may not be
considered when assessing the economic viability of a mining
project, and may not be converted to a mineral reserve. On October
31, 2018, the SEC adopted new mining disclosure rules (“S-K 1300”)
that is more closely aligned with current industry and global
regulatory practices and standards, including National Instrument
43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”)
which the Company complies with because the Company also is a
“reporting issuer” under Canadian securities laws. While S-K 1300
is more closely aligned with NI 43-101 than the prior SEC mining
disclosure rules, there are some differences. NI 43-101 is a rule
developed by the Canadian Securities Administrators, which
established standards for all public disclosure an issuer makes of
scientific and technical information concerning mineral projects.
Unless otherwise indicated, all resource and reserve estimates
contained in this press release have been prepared in accordance
with NI 43-101, as well as S‑K 1300.
Qualified Person (QP)
Kurt D. Allen, MSc., CPG, VP - Exploration of Hecla Mining
Company and Keith Blair, MSc., CPG, Chief Geologist of Hecla
Limited, who serve as a Qualified Person under S-K 1300 and “NI
43-101”, supervised the preparation of the scientific and technical
information concerning Hecla’s mineral projects in this news
release. Technical Report Summaries for each of the Company’s
material properties are filed as exhibits 96.1, 96.2 and 96.3 to
the Company’s Annual Report on Form 10-K for the year ended
December 31, 2021, and are available at www.sec.gov. Information
regarding data verification, surveys and investigations, quality
assurance program and quality control measures and a summary of
analytical or testing procedures for the Greens Creek Mine are
contained in a technical report titled “Technical Report for the
Greens Creek Mine” effective date December 31, 2018, and for the
Lucky Friday Mine are contained in a technical report titled
“Technical Report for the Lucky Friday Mine Shoshone County, Idaho,
USA” effective date April 2, 2014, for Casa Berardi are contained
in a technical report titled “Technical Report on the mineral
resource and mineral reserve estimate for Casa Berardi Mine,
Northwestern Quebec, Canada” effective date December 31, 2018 (the
“Casa Berardi Technical Report”), and for the San Sebastian Mine,
Mexico, are contained in a technical report prepared for Hecla
titled “Technical Report for the San Sebastian Ag-Au Property,
Durango, Mexico” effective date September 8, 2015. Also included in
these three technical reports is a description of the key
assumptions, parameters and methods used to estimate mineral
reserves and resources and a general discussion of the extent to
which the estimates may be affected by any known environmental,
permitting, legal, title, taxation, socio-political, marketing, or
other relevant factors. Information regarding data verification,
surveys and investigations, quality assurance program and quality
control measures and a summary of sample, analytical or testing
procedures for the Fire Creek Mine are contained in a technical
report prepared for Klondex Mines, dated March 31, 2018; the
Hollister Mine dated May 31, 2017, amended August 9, 2017; and the
Midas Mine dated August 31, 2014, amended April 2, 2015. Copies of
these technical reports are available under Hecla’s and Klondex’s
profiles on SEDAR at www.sedar.com. Mr. Allen and Mr. Blair
reviewed and verified information regarding drill sampling, data
verification of all digitally collected data, drill surveys and
specific gravity determinations relating to all the mines. The
review encompassed quality assurance programs and quality control
measures including analytical or testing practice, chain-of-custody
procedures, sample storage procedures and included independent
sample collection and analysis. This review found the information
and procedures meet industry standards and are adequate for Mineral
Resource and Mineral Reserve estimation and mine planning
purposes.
HECLA MINING COMPANY
Condensed Consolidated Statements
of Income (Loss)
(dollars and shares in thousands,
except per share amounts - unaudited)
Fourth Quarter Ended
Third Quarter Ended
Twelve Months Ended
December 31, 2021
September 30, 2021
December 31, 2021
December 31, 2020
Sales of products
$
185,078
$
193,560
$
807,473
$
691,873
Cost of sales and other direct production
costs
98,962
112,542
417,879
382,663
Depreciation, depletion and
amortization
32,875
45,790
171,793
148,110
Total cost of sales
131,837
158,332
589,672
530,773
Gross profit
53,241
35,228
217,801
161,100
Other operating expenses:
General and administrative
6,585
8,874
34,570
35,561
Exploration and pre-development
12,862
17,108
47,901
18,295
Other operating expense
3,375
3,344
14,240
10,854
Loss (gain) on disposition of property,
plants, equipment and mineral interests
326
(390
)
87
572
Ramp-up and suspension costs
5,998
6,910
23,012
24,911
Provision for closed operations and
reclamation
2,274
7,564
14,571
3,929
31,420
43,410
134,381
94,122
Income (loss) from operations
21,821
(8,182
)
83,420
66,978
Other (expense) income:
Fair value adjustments, net
(25,141
)
9,287
(35,792
)
(11,806
)
Foreign exchange (loss) gain, net
393
3,995
417
(4,605
)
Other net expense
(382
)
(143
)
(574
)
(2,256
)
Interest expense
(10,461
)
(10,469
)
(41,945
)
(49,569
)
(35,591
)
2,670
(77,894
)
(68,236
)
(Loss) income before income taxes
(13,770
)
(5,512
)
5,526
(1,258
)
Income and mining tax benefit
(provision)
25,645
4,533
29,569
(8,199
)
Net income (loss)
11,875
(979
)
35,095
(9,457
)
Preferred stock dividends
(138
)
(138
)
(552
)
(552
)
Income (loss) applicable to common
stockholders
$
11,737
$
(1,117
)
$
34,543
$
(10,009
)
Basic income (loss) per common share after
preferred dividends (in cents)
$
0.022
$
(0.002
)
$
0.064
$
(0.019
)
Diluted income (loss) per common share
after preferred dividends (in cents)
$
0.022
$
(0.002
)
$
0.064
$
(0.019
)
Weighted average number of common shares
outstanding basic
538,124
536,966
536,192
527,329
Weighted average number of common shares
outstanding diluted
543,134
536,966
542,176
527,329
HECLA MINING COMPANY
Condensed Consolidated Balance
Sheets
(dollars and shares in thousands
– unaudited)
December 31, 2021
December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents
$
210,010
$
129,830
Accounts receivable
44,586
39,193
Inventories
67,765
96,175
Other current assets
19,266
19,114
Total current assets
341,627
284,312
Investments
10,844
15,148
Restricted cash and investments
1,053
1,053
Properties, plants, equipment and mineral
interests, net
2,310,810
2,378,074
Operating lease right-of-use assets
12,435
10,628
Deferred tax assets
45,562
2,912
Other non-current assets
6,477
8,083
Total assets
$
2,728,808
$
2,700,210
LIABILITIES
Current liabilities:
Accounts payable and accrued
liabilities
$
68,100
$
68,516
Accrued payroll and related benefits
28,714
31,807
Accrued taxes
12,306
5,774
Finance leases
5,612
6,491
Accrued reclamation and closure costs
9,259
5,582
Operating leases
2,486
3,008
Accrued interest
14,454
14,157
Derivatives liabilities
19,353
11,737
Other current liabilities
99
138
Total current liabilities
160,383
147,210
Finance leases
7,776
9,274
Accrued reclamation and closure costs
103,972
110,466
Long-term debt
508,095
507,242
Long-term operating leases
9,950
7,634
Deferred income tax liability
149,706
156,091
Non-current pension liability
4,673
44,144
Derivatives liabilities
18,528
18
Other non-current liabilities
4,938
4,346
Total liabilities
968,021
986,425
STOCKHOLDERS’ EQUITY
Preferred stock
39
39
Common stock
136,391
134,629
Capital surplus
2,034,485
2,003,576
Accumulated deficit
(353,651
)
(368,074
)
Accumulated other comprehensive loss
(28,456
)
(32,889
)
Treasury stock
(28,021
)
(23,496
)
Total stockholders’ equity
1,760,787
1,713,785
Total liabilities and stockholders’
equity
$
2,728,808
$
2,700,210
Common shares outstanding
538,139
531,666
HECLA MINING COMPANY
Condensed Consolidated Statements
of Cash Flows
(dollars in thousands -
unaudited)
Fourth Quarter Ended
Third Quarter Ended
Twelve Months Ended
December 31, 2021
September 30, 2021
December 31, 2021
December 31, 2020
OPERATING ACTIVITIES
Net income (loss)
$
11,875
$
(979
)
$
35,095
$
(9,457
)
Non-cash elements included in net income
(loss):
Depreciation, depletion and
amortization
32,851
46,939
172,651
155,006
Loss (gain) on disposition of properties,
plants, equipment and mineral interests
326
(390
)
87
572
Provision for reclamation and closure
costs
3,693
1,638
11,514
6,189
Deferred income taxes
(30,163
)
(10,141
)
(48,049
)
(3,818
)
Stock compensation
1,308
1,472
6,082
6,458
Amortization of loan origination fees
489
488
1,895
3,666
Fair value adjustments, net
23,018
(13,192
)
15,040
(4,690
)
Foreign exchange (gain) loss
(694
)
(3,842
)
(79
)
2,680
Adjustment of inventory to net realizable
value
—
93
6,524
—
Other non-cash charges, net
681
—
681
1,794
Change in assets and liabilities:
Accounts receivable
(1,607
)
5,634
(5,405
)
(1,080
)
Inventories
(5,453
)
16,653
16,919
(13,208
)
Other current and non-current assets
(3,328
)
(2,475
)
(1,678
)
2,381
Accounts payable and accrued
liabilities
13,894
(8,200
)
(795
)
19,379
Accrued payroll and related benefits
3,099
3,522
1,270
14,445
Accrued taxes
3,727
3,729
6,457
3,561
Accrued reclamation and closure costs and
other non-current liabilities
(361
)
1,793
2,128
(3,085
)
Cash provided by operating
activities
53,355
42,742
220,337
180,793
INVESTING ACTIVITIES
Additions to properties, plants, equipment
and mineral interests
(28,838
)
(26,899
)
(109,048
)
(91,016
)
Purchase of carbon credits
(669
)
(200
)
(869
)
—
Proceeds from sale or exchange of
investments
—
1,811
1,811
—
Proceeds from disposition of properties,
plants, equipment and mineral interests
515
431
1,077
331
Purchases of investments
—
—
—
(2,216
)
Net cash used in investing
activities
(28,992
)
(24,857
)
(107,029
)
(92,901
)
FINANCING ACTIVITIES
Acquisition of treasury shares
—
—
(4,525
)
(2,745
)
Dividends paid to common and preferred
stockholders
(3,503
)
(6,178
)
(20,672
)
(9,152
)
Borrowings on debt
—
—
—
716,327
Payments on debt
—
—
—
(716,500
)
Debt issuance and loan origination fees
paid
(8
)
(26
)
(116
)
(1,356
)
Repayments of capital leases
(1,687
)
(1,828
)
(7,285
)
(5,953
)
Net cash used in financing
activities
(5,198
)
(8,032
)
(32,598
)
(19,379
)
Effect of exchange rates on cash
(59
)
(443
)
(530
)
(1,107
)
Net increase in cash, cash equivalents and
restricted cash and cash equivalents
19,106
9,410
80,180
67,406
Cash, cash equivalents and restricted cash
and cash equivalents at beginning of year
191,957
182,547
130,883
63,477
Cash, cash equivalents and restricted cash
and cash equivalents at end of year
$
211,063
$
191,957
$
211,063
$
130,883
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 and
mining taxes, depreciation, depletion, and amortization expense,
ramp-up and suspension costs, gains and losses on disposition of
properties, plants, equipment and mineral interests, foreign
exchange gains and losses, unrealized gains and losses on
derivative contracts, interest and other income, unrealized gains
on investments, provisions for environmental matters, stock-based
compensation, provisional price gains and losses, the grant of
common shares to the Hecla Charitable Foundation, adjustments of
inventory to net realizable value. Net debt is calculated as total
debt, which consists of the liability balances for our Senior
Notes, capital leases, and other notes payable, less the total of
our cash and cash equivalents and short-term investments.
Management believes that, when presented in conjunction with
comparable GAAP measures, adjusted EBITDA and net debt to LTM
adjusted EBITDA are useful to investors in evaluating our operating
performance and ability to meet our debt obligations. The following
table reconciles net loss and debt to adjusted EBITDA and net
debt:
Dollars are in thousands
4Q-2021
3Q-2021
2Q-2021
1Q-2021
4Q-2020
FY 2021
FY 2020
Net income (loss)
$
11,875
$
(979
)
$
2,748
$
21,451
$
3,105
$
35,095
$
(9,457
)
Plus: Interest expense
10,461
10,469
10,271
10,744
10,650
41,945
49,569
(Less) Plus: Income and mining taxes
(25,645
)
(4,533
)
(4,134
)
4,743
776
(29,569
)
8,199
Plus: Depreciation, depletion and
amortization
32,875
45,790
46,059
47,069
35,618
171,793
148,110
Plus: Ramp-up and suspension costs
5,998
6,910
5,786
4,318
802
23,012
24,911
Plus/(Less): Loss (gain) on disposition of
properties, plants, equipment, and mineral interests
326
(390
)
143
8
13
87
572
(Less)/Plus: Foreign exchange (gain)
loss
(393
)
(3,995
)
1,907
2,064
5,840
(417
)
4,605
Plus/(Less): Unrealized loss (gain) on
derivative contracts
25,840
(16,053
)
13,078
(10,962
)
1,095
11,903
5,578
Less: Provisional price gain
(5,648
)
(72
)
(3,077
)
(552
)
(2,722
)
(9,349
)
(8,008
)
Plus: Provision for closed operations and
environmental matters
3,693
8,088
1,654
4,529
1,551
17,964
6,189
Plus: Stock-based compensation
1,307
1,472
2,802
500
1,229
6,081
6,458
(Less)/Plus: Unrealized (gain) loss on
investments
(2,822
)
2,861
750
3,506
(861
)
4,295
(10,272
)
Foundation grant
—
—
—
—
—
—
1,970
Adjustments of inventory to net realizable
value
—
93
6,242
189
—
6,524
—
Plus/(Less): Other
382
(247
)
278
(997
)
677
(584
)
2,260
Adjusted EBITDA
$
58,249
$
49,414
$
84,507
$
86,610
$
57,773
$
278,780
$
230,684
Total debt
$
521,483
$
523,007
Less: Cash and cash equivalents
210,010
129,830
Net debt
$
311,473
$
393,177
Net debt/LTM adjusted EBITDA
(non-GAAP)
1.1
1.7
Non-GAAP Measures (Unaudited)
Reconciliation of Cost of Sales and Other Direct Production
Costs and Depreciation, Depletion and Amortization (GAAP) to Cash
Cost, Before By-product Credits and Cash Cost, After By-product
Credits (non-GAAP) and All-In Sustaining Cost, Before By-product
Credits and All-In Sustaining Cost, After By-product Credits
(non-GAAP)
The tables below present reconciliations between the most
comparable GAAP measure of cost of sales and other direct
production costs and depreciation, depletion and amortization to
the non-GAAP measures of (i) Cash Cost, Before By-product Credits,
(ii) Cash Cost, After By-product Credits, (iii) AISC, Before
By-product Credits and (iv) AISC, After By-product Credits for our
operations at Greens Creek, Lucky Friday, Casa Berardi and Nevada
Operations and for the Company for the three- and twelve-month
periods ended December 31, 2021 and 2020, and for estimated amounts
for the twelve months ended December 31, 2022.
Cash Cost, After By-product Credits, per Ounce is a measure
developed by precious metals companies (including the Silver
Institute) in an effort to provide a uniform standard for
comparison purposes. There can be no assurance, however, that these
non-GAAP measures as we report them are the same as those reported
by other mining companies.
Cash Cost, After By-product Credits, per Ounce is an important
operating statistic that we utilize to measure each mine's
operating performance. We also utilize AISC, After By-product
Credits, per Ounce as a measure of our operation's net cash flow
after costs for exploration, pre-development, reclamation, and
sustaining capital. This is similar to the Cash Cost, After
By-product Credits, per Ounce non-GAAP measure we report, but also
includes on-site exploration, reclamation, and sustaining capital
costs. Current GAAP measures used in the mining industry, such as
cost of goods sold, do not capture all the expenditures incurred to
discover, develop and sustain silver and gold production. Cash
Cost, After By-product Credits, per Ounce and AISC, After
By-product Credits, per Ounce also allow us to benchmark the
performance of each of our operations versus those of our
competitors. As a primary silver and gold mining company, we also
use these statistics on an aggregate basis. We aggregate Greens
Creek and Lucky Friday to compare our performance with that of
other primary silver mining companies and aggregate Casa Berardi
and Nevada Operations to compare our performance with that of other
primary gold mining companies. Similarly, these statistics are
useful in identifying acquisition and investment opportunities as
they provide a common tool for measuring the financial performance
of other mines with varying geologic, metallurgical and operating
characteristics.
Cash Cost, Before By-product Credits and AISC, Before By-product
Credits include all direct and indirect operating cash costs
related directly to the physical activities of producing metals,
including mining, processing and other plant costs, third-party
refining expense, on-site general and administrative costs,
royalties and mining production taxes. AISC, Before By-product
Credits for each operation also includes on-site exploration,
reclamation, and sustaining capital costs. AISC, Before By-product
Credits for our consolidated silver properties also includes
corporate costs for general and administrative expense, exploration
and sustaining capital projects. By-product credits include
revenues earned from all metals other than the primary metal
produced at each operation. As depicted in the tables below,
by-product credits comprise an essential element of our silver unit
cost structure, distinguishing our silver operations due to the
polymetallic nature of their orebodies.
In addition to the uses described above, Cash Cost, After
By-product Credits, per Ounce and AISC, After By-product Credits,
per Ounce provide management and investors an indication of
operating cash flow, after consideration of the average price,
received from production. We also use these measurements for the
comparative monitoring of performance of our mining operations
period-to-period from a cash flow perspective. However,
comparability of Cash Cost, After By-product Credits, per Silver
Ounce and AISC, After By-product Credits, per Silver Ounce for 2021
to 2020 is impacted by, among other factors, (i) the return to full
production at Lucky Friday in the fourth quarter of 2020 and (ii)
suspension of production at San Sebastian in the fourth quarter of
2020 and discontinuation of San Sebastian being reported as an
operating segment in 2021.
The Casa Berardi and Nevada Operations sections below report
Cash Cost, After By-product Credits, per Gold Ounce and AISC, After
By-product Credits, per Gold Ounce for the production of gold,
their primary product, and by-product revenues earned from silver,
which is a by-product at Casa Berardi and Nevada Operations. Only
costs and ounces produced relating to operations 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 Casa Berardi and Nevada
Operations 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 and Lucky Friday, our combined silver properties. Similarly,
the silver produced at our other two operations is not included as
a by-product credit when calculating the similar gold metrics for
Casa Berardi.
In thousands (except per ounce
amounts)
Three Months Ended December 31,
2021
Three Months Ended September 30,
2021
Twelve Months Ended December 31,
2021
Twelve Months Ended December 31,
2020
Greens Creek
Lucky Friday(2)
Corporate(3)
Total Silver
Greens Creek
Lucky Friday
Corporate(3)
Total Silver
Greens Creek
Lucky Friday(2)
Corporate and other(3)
Total Silver
Greens Creek
Lucky Friday(2)
Corporate and other(3)
Total Silver
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
49,252
$
23,251
$
152
$
72,655
$
55,193
$
23,591
$
—
$
78,784
$
213,113
$
97,538
$
247
$
310,898
$
210,748
$
56,706
$
24,104
$
291,558
Depreciation, depletion and
amortization
(6,300
)
(6,518
)
(152
)
(12,970
)
(13,097
)
(6,590
)
—
(19,687
)
(48,710
)
(26,846
)
(152
)
(75,708
)
(49,692
)
(11,473
)
(3,548
)
(64,713
)
Treatment costs
8,655
3,636
—
12,291
7,979
3,427
—
11,406
36,099
16,723
—
52,822
77,122
4,590
287
81,999
Change in product inventory
236
1,351
—
1,587
(122
)
(68
)
—
(190
)
80
(406
)
—
(326
)
(3,144
)
2,340
(2,357
)
(3,161
)
Reclamation and other costs (5)
(1,689
)
(199
)
—
(1,888
)
(786
)
(281
)
—
(1,067
)
(3,466
)
(1,039
)
(95
)
(4,600
)
(1,608
)
(274
)
(1,198
)
(3,080
)
Cash costs excluded
—
—
—
—
—
—
—
—
—
—
—
—
—
(31,442
)
—
(31,442
)
Cash Cost, Before By-product Credits
(1)
50,154
21,521
—
71,675
49,167
20,079
—
69,246
197,116
85,970
—
283,086
233,426
20,447
17,288
271,161
Reclamation and other costs
847
264
—
1,111
848
264
—
1,112
3,390
1,056
—
4,446
3,154
222
418
3,794
Exploration
696
—
867
1,563
2,472
—
474
2,946
4,591
—
2,226
6,817
354
—
1,788
2,142
Sustaining capital
10,123
7,413
172
17,708
6,228
8,406
—
14,634
27,582
26,517
210
54,309
28,797
7,154
337
36,288
General and administrative (5)
—
—
6,585
6,585
—
—
8,874
8,874
—
—
34,570
34,570
—
—
33,759
33,759
AISC, Before By-product Credits (1)
61,820
29,198
7,624
98,642
58,715
28,749
9,348
96,812
232,679
113,543
37,006
383,228
265,731
27,823
53,590
347,144
By-product credits:
Zinc
(25,643
)
(5,022
)
—
(30,665
)
(25,295
)
(4,611
)
—
(29,906
)
(100,214
)
(19,479
)
—
(119,693
)
(79,413
)
(4,273
)
—
(83,686
)
Gold
(15,712
)
—
—
(15,712
)
(14,864
)
—
—
(14,864
)
(72,011
)
—
—
(72,011
)
(74,615
)
—
(12,586
)
(87,201
)
Lead
(7,657
)
(12,204
)
—
(19,861
)
(7,640
)
(10,188
)
—
(17,828
)
(30,922
)
(42,966
)
—
(73,888
)
(28,193
)
(8,421
)
—
(36,614
)
Total By-product credits
(49,012
)
(17,226
)
—
(66,238
)
(47,799
)
(14,799
)
—
(62,598
)
(203,147
)
(62,445
)
—
(265,592
)
(182,221
)
(12,694
)
(12,586
)
(207,501
)
Cash Cost, After By-product Credits
$
1,142
$
4,295
$
—
$
5,437
$
1,368
$
5,280
$
—
$
6,648
$
(6,031
)
$
23,525
$
—
$
17,494
$
51,205
$
7,753
$
4,702
$
63,660
AISC, After By-product Credits
$
12,808
$
11,972
$
7,624
$
32,404
$
10,916
$
13,950
$
9,348
$
34,214
$
29,532
$
51,098
$
37,006
$
117,636
$
83,510
$
15,129
$
41,004
$
139,643
Divided by ounces produced
2,262
955
3,217
1,837
832
2,669
9,243
3,564
12,807
10,495
830
955
12,280
Cash Cost, Before By-product Credits, per
Silver Ounce
$
22.18
$
22.54
$
22.28
$
26.76
$
24.14
$
25.93
$
21.33
$
24.12
$
22.11
$
22.24
$
24.63
$
22.08
By-product credits per ounce
(21.68
)
(18.04
)
(20.59
)
(26.02
)
(17.79
)
(23.44
)
(21.98
)
(17.52
)
(20.74
)
(17.36
)
(15.29
)
(16.90
)
Cash Cost, After By-product Credits, per
Silver Ounce
$
0.50
$
4.50
$
1.69
$
0.74
$
6.35
$
2.49
$
(0.65
)
$
6.60
$
1.37
$
4.88
$
9.34
$
5.18
AISC, Before By-product Credits, per
Silver Ounce
$
27.34
$
30.58
$
30.67
$
31.96
$
34.58
$
36.26
$
25.17
$
31.86
$
29.93
$
25.33
$
33.51
$
28.27
By-product credits per ounce
(21.68
)
(18.04
)
(20.59
)
(26.02
)
(17.79
)
(23.44
)
(21.98
)
(17.52
)
(20.74
)
(17.36
)
(15.29
)
(16.90
)
AISC, After By-product Credits, per Silver
Ounce
$
5.66
$
12.54
$
10.08
$
5.94
$
16.79
$
12.82
$
3.19
$
14.34
$
9.19
$
7.97
$
18.22
$
11.37
In thousands (except per ounce amounts)
Three Months Ended December 31,
2021
Three Months Ended September 30,
2021
Twelve Months Ended December 31,
2021
Twelve Months Ended December 31,
2020
Casa Berardi
Nevada Operations(4))
Total Gold
Casa Berardi
Nevada Operations(4)
Total Gold
Casa Berardi
Nevada Operations(4)
Total Gold
Casa Berardi(6)
Nevada Operations(4)
Total Gold
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
57,069
$
2,113
$
59,182
$
58,164
$
21,384
$
79,548
$
229,829
$
48,945
$
278,774
$
194,414
$
44,801
$
239,215
Depreciation, depletion and
amortization
(19,585
)
(320
)
(19,905
)
(19,968
)
(6,135
)
(26,103
)
(80,744
)
(15,341
)
(96,085
)
(60,552
)
(22,845
)
(83,397
)
Treatment costs
423
—
423
475
1
476
1,513
1,731
3,244
2,591
45
2,636
Change in product inventory
4,839
(956
)
3,883
(3,369
)
(12,389
)
(15,758
)
2,439
(10,907
)
(8,468
)
2,226
15,869
18,095
Reclamation and other costs (5)
(208
)
1
(207
)
(210
)
—
(210
)
(841
)
300
(541
)
(773
)
(978
)
(1,751
)
Exclusion of Nevada Operations costs
—
—
—
—
—
—
—
—
—
—
(13,511
)
(13,511
)
Cash Cost, Before By-product Credits
(1)
42,538
838
43,376
35,092
2,861
37,953
152,196
24,728
176,924
137,906
23,381
161,287
Reclamation and other costs
209
327
536
209
327
536
841
1,008
1,849
386
654
1,040
Exploration
1,775
—
1,775
1,541
—
1,541
5,326
—
5,326
2,231
—
2,231
Sustaining capital
10,459
316
10,775
7,208
29
7,237
30,643
511
31,154
34,431
1,600
36,031
AISC, Before By-product Credits (1)
54,981
1,481
56,462
44,050
3,217
47,267
189,006
26,247
215,253
174,954
25,635
200,589
By-product credits:
Silver
(183
)
(21
)
(204
)
(169
)
(6
)
(175
)
(839
)
(1,152
)
(1,991
)
(499
)
(635
)
(1,134
)
Total By-product credits
(183
)
(21
)
(204
)
(169
)
(6
)
(175
)
(839
)
(1,152
)
(1,991
)
(499
)
(635
)
(1,134
)
Cash Cost, After By-product Credits
$
42,355
$
817
$
43,172
$
34,923
$
2,855
$
37,778
$
151,357
$
23,576
$
174,933
$
137,407
$
22,746
$
160,153
AISC, After By-product Credits
$
54,798
$
1,460
$
56,258
$
43,881
$
3,211
$
47,092
$
188,167
$
25,095
$
213,262
$
174,455
$
25,000
$
199,455
Divided by gold ounces produced
37
—
37
30
3
33
135
21
156
121
32
153
Cash Cost, Before By-product Credits, per
Gold Ounce
$
1,142
$
1,737
$
1,148
$
1,181
$
1,040
$
1,168
$
1,131
$
1,193
$
1,140
$
1,135
$
736
$
1,052
By-product credits per ounce
(5
)
(44
)
(5
)
(6
)
(2
)
(5
)
(6
)
(56
)
(13
)
(4
)
(20
)
(7
)
Cash Cost, After By-product Credits, per
Gold Ounce
$
1,137
$
1,693
$
1,143
$
1,175
$
1,038
$
1,163
$
1,125
$
1,137
$
1,127
$
1,131
$
716
$
1,045
AISC, Before By-product Credits, per Gold
Ounce
$
1,475
$
3,073
$
1,499
$
1,482
$
1,169
$
1,455
$
1,405
$
1,267
$
1,387
$
1,440
$
807
$
1,309
By-product credits per ounce
(5
)
(44
)
(5
)
(6
)
(2
)
(5
)
(6
)
(56
)
(13
)
(4
)
(20
)
(7
)
AISC, After By-product Credits, per Gold
Ounce
$
1,470
$
3,029
$
1,494
$
1,476
$
1,167
$
1,450
$
1,399
$
1,211
$
1,374
$
1,436
$
787
$
1,302
In thousands (except per ounce amounts)
Three Months Ended December 31,
2021
Three Months Ended September 30,
2021
Twelve Months Ended December 31,
2021
Twelve Months Ended December 31,
2020
Total Silver
Total Gold
Total
Total Silver
Total Gold
Total
Total Silver
Total Gold
Total
Total Silver
Total Gold
Total
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
72,655
$
59,182
$
131,837
$
78,784
$
79,548
$
158,332
$
310,898
$
278,774
$
589,672
$
291,558
$
239,215
$
530,773
Depreciation, depletion and
amortization
(12,970
)
(19,905
)
(32,875
)
(19,687
)
(26,103
)
(45,790
)
(75,708
)
(96,085
)
(171,793
)
(64,713
)
(83,397
)
(148,110
)
Treatment costs
12,291
423
12,714
11,406
476
11,882
52,822
3,244
56,066
81,999
2,636
84,635
Change in product inventory
1,587
3,883
5,470
(190
)
(15,758
)
(15,948
)
(326
)
(8,468
)
(8,794
)
(3,161
)
18,095
14,934
Reclamation and other costs
(1,888
)
(207
)
(2,095
)
(1,067
)
(210
)
(1,277
)
(4,600
)
(541
)
(5,141
)
(3,080
)
(1,751
)
(4,831
)
Cash costs excluded
—
—
—
—
—
—
—
—
—
(31,442
)
(13,511
)
(44,953
)
Cash Cost, Before By-product Credits
(1)
71,675
43,376
115,051
69,246
37,953
107,199
283,086
176,924
460,010
271,161
161,287
432,448
Reclamation and other costs
1,111
536
1,647
1,112
536
1,648
4,446
1,849
6,295
3,794
1,040
4,834
Exploration
1,563
1,775
3,338
2,946
1,541
4,487
6,817
5,326
12,143
2,142
2,231
4,373
Sustaining capital
17,708
10,775
28,483
14,634
7,237
21,871
54,309
31,154
85,463
36,288
36,031
72,319
General and administrative
6,585
—
6,585
8,874
8,874
34,570
—
34,570
33,759
—
33,759
AISC, Before By-product Credits (1)
98,642
56,462
155,104
96,812
47,267
144,079
383,228
215,253
598,481
347,144
200,589
547,733
By-product credits:
Zinc
(30,665
)
—
(30,665
)
(29,906
)
—
(29,906
)
(119,693
)
—
(119,693
)
(83,686
)
—
(83,686
)
Gold
(15,712
)
—
(15,712
)
(14,864
)
—
(14,864
)
(72,011
)
—
(72,011
)
(87,201
)
—
(87,201
)
Lead
(19,861
)
—
(19,861
)
(17,828
)
—
(17,828
)
(73,888
)
—
(73,888
)
(36,614
)
—
(36,614
)
Silver
—
(204
)
(204
)
(175
)
(175
)
—
(1,991
)
(1,991
)
—
(1,134
)
(1,134
)
Total By-product credits
(66,238
)
(204
)
(66,442
)
(62,598
)
(175
)
(62,773
)
(265,592
)
(1,991
)
(267,583
)
(207,501
)
(1,134
)
(208,635
)
Cash Cost, After By-product Credits
$
5,437
$
43,172
$
48,609
$
6,648
$
37,778
$
44,426
$
17,494
$
174,933
$
192,427
$
63,660
$
160,153
$
223,813
AISC, After By-product Credits
$
32,404
$
56,258
$
88,662
$
34,214
$
47,092
$
81,306
$
117,636
$
213,262
$
330,898
$
139,643
$
199,455
$
339,098
Divided by ounces produced
3,217
37
2,669
33
12,807
156
12,280
153
Cash Cost, Before By-product Credits, per
Ounce
$
22.28
$
1,148
$
25.93
$
1,168
$
22.11
$
1,140
$
22.08
$
1,052
By-product credits per ounce
(20.59
)
(5
)
(23.44
)
(5
)
(20.74
)
(13
)
(16.90
)
(7
)
Cash Cost, After By-product Credits, per
Ounce
$
1.69
$
1,143
$
2.49
$
1,163
$
1.37
$
1,127
$
5.18
$
1,045
AISC, Before By-product Credits, per
Ounce
$
30.67
$
1,499
$
36.26
$
1,455
$
29.93
$
1,387
$
28.27
$
1,309
By-product credits per ounce
(20.59
)
(5
)
(23.44
)
(5
)
(20.74
)
(13
)
(16.90
)
(7
)
AISC, After By-product Credits, per
Ounce
$
10.08
$
1,494
$
12.82
$
1,450
$
9.19
$
1,374
$
11.37
$
1,302
In thousands (except per ounce amounts)
Estimate for Twelve Months Ended
December 31, 2022
Greens Creek
Lucky Friday
Corporate(3)
Total Silver
Casa Berardi
Total Gold
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
230,000
$
115,000
$
345,000
$
210,000
$
210,000
Depreciation, depletion and
amortization
(47,900
)
(39,150
)
(87,050
)
(58,250
)
(58,250
)
Treatment costs
34,750
15,650
50,400
500
500
Change in product inventory
(1,500
)
(1,500
)
(3,000
)
1,300
1,300
Reclamation and other costs
500
1,300
1,800
1,200
1,200
Cash Cost, Before By-product Credits
(1)
215,850
91,300
307,150
154,750
154,750
Reclamation and other costs
3,400
1,000
4,400
900
900
Exploration
4,900
—
3,000
7,900
5,300
5,300
Sustaining capital
40,200
28,900
69,100
30,700
30,700
General and administrative
—
—
38,000
38,000
—
—
AISC, Before By-product Credits (1)
264,350
121,200
41,000
426,550
191,650
191,650
By-product credits:
Zinc
(111,640
)
(29,360
)
(141,000
)
—
—
Gold
(66,100
)
—
(66,100
)
—
—
Lead
(29,601
)
(58,375
)
(87,976
)
—
—
Silver
—
—
—
(730
)
(730
)
Total By-product credits
(207,341
)
(87,735
)
—
(295,076
)
(730
)
(730
)
Cash Cost, After By-product Credits
$
8,509
$
3,565
$
—
$
12,074
$
154,020
$
154,020
AISC, After By-product Credits
$
57,009
$
33,465
$
41,000
$
131,474
$
190,920
$
190,920
Divided by silver ounces produced
8,750
4,450
13,200
128.5
128.5
Cash Cost, Before By-product Credits, per
Silver Ounce
$
24.67
$
20.52
$
23.27
$
1,204
$
1,204
By-product credits per silver ounce
(23.70
)
(19.72
)
(22.35
)
(6
)
(6
)
Cash Cost, After By-product Credits, per
Silver Ounce
$
0.97
$
0.80
$
0.92
$
1,198
$
1,198
AISC, Before By-product Credits, per
Silver Ounce
$
30.21
$
27.24
$
32.31
$
1,491
$
1,491
By-product credits per silver ounce
(23.70
)
(19.72
)
(22.35
)
(6
)
(6
)
AISC, After By-product Credits, per Silver
Ounce
$
6.51
$
7.52
$
9.96
$
1,485
$
1,485
(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, non-discretionary on-site general
and administrative costs, royalties and mining production taxes,
before by-product revenues earned from all metals other than the
primary metal produced at each operation. 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 approximately
$8.0 million in 2020, which includes $6.3 million in non-cash
depreciation expense has 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)
Twelve months ended December 31, 2021 and
2020 include results for San Sebastian, which was an operating
segment prior to 2021. AISC, Before By-product Credits for our
consolidated silver properties includes non-discretionary corporate
costs for general and administrative expense, exploration and
sustaining capital.
(4)
Production was suspended at the Hollister
mine in the third quarter of 2019 and at the Midas mine and Aurora
mill in late 2019, and at the Midas mill and Fire Creek mine in
mid-2021. Suspension-related costs at Nevada Operations totaling
$20.8 million for 2021 and $13.5 million for 2020 are reported in a
separate line item on our consolidated statements of operations and
excluded from the calculations of cost of sales and other direct
production costs and depreciation, depletion and amortization and
Cash Cost and AISC, After By-product Credits, per Gold Ounce.
During the second half of 2020, all ore mined at Nevada Operations
was stockpiled, with no ore milled and no production reported
during the period. As a result, costs incurred at Nevada Operations
during the second half of 2020 were excluded from the calculations
of Cash Cost and AISC, After By-product Credits, per Gold
Ounce.
(5)
Excludes the discretionary portion of
general and administrative costs for Greens Creek, Casa Berardi,
Lucky Friday and corporate of $0.6 million, $0.4 million, $0.1
million and $1.8 million, respectively, for 2020.
(6)
In late March 2020, the Government of
Quebec ordered the mining industry to reduce to minimum operations
as part of the fight against COVID-19, causing us to suspend our
Casa Berardi operations from March 24 until April 15, when mining
operations resumed, resulting in reduced mill throughput.
Suspension-related costs totaling $1.6 million for 2020 are
reported in a separate line item on our consolidated statements of
operations and excluded from the calculations of cost of sales and
other direct production costs and depreciation, depletion and
amortization and Cash Cost and AISC, After By-product Credits, per
Gold Ounce.
Table A
Mineral Reserves –
12/31/2021(1)
Proven Reserves(1)
Asset Tons (000)
Silver (oz/ton)
Gold (oz/ton)
Lead %
Zinc %
Copper %
Silver (000 oz)
Gold (000 oz)
Lead (Tons)
Zinc (Tons)
Copper (Tons)
Greens Creek (2,3)
2
9.6
0.08
1.7
4.5
-
18
0.1
30
80
-
Lucky Friday (2,4)
4,691
13.9
-
8.4
3.4
-
65,313
-
395,290
159,360
-
Casa Berardi Open Pit (2,5)
4,763
-
0.10
-
-
-
-
453
-
-
-
Casa Berardi Underground (2,5)
923
-
0.16
-
-
-
-
143
-
-
-
Total
10,378
65,331
596
395,320
159,440
-
Probable Reserves(6)
Asset
Tons (000)
Silver (oz/ton)
Gold (oz/ton)
Lead %
Zinc %
Copper %
Silver (000 oz)
Gold (000 oz)
Lead (Tons)
Zinc (Tons)
Copper (Tons)
Greens Creek (2,3)
11,074
11.3
0.09
2.5
6.6
-
125,201
946
282,220
725,830
-
Lucky Friday (2,4)
765
12.3
-
7.5
2.8
-
9,386
-
57,160
21,650
-
Casa Berardi Open Pit (2,5)
13,371
-
0.07
-
-
-
-
928
-
-
-
Casa Berardi Underground (2,5)
1,695
-
0.15
-
-
-
-
259
-
-
-
Total
26,905
134,587
2,133
339,380
747,480
-
Proven and Probable
Reserves
Asset
Tons (000)
Silver (oz/ton)
Gold (oz/ton)
Lead %
Zinc %
Copper %
Silver (000 oz)
Gold (000 oz)
Lead (Tons)
Zinc (Tons)
Copper (Tons)
Greens Creek (2,3)
11,076
11.3
0.09
2.5
6.6
-
125,219
946
282,250
725,920
-
Lucky Friday (2,4)
5,456
13.7
-
8.3
3.3
-
74,699
-
452,440
181,020
-
Casa Berardi Open Pit (2,5)
18,134
-
0.08
-
-
-
-
1,381
-
-
-
Casa Berardi Underground (2,5)
2,618
-
0.15
-
-
-
-
403
-
-
-
Total
37,283
199,918
2,730
734,690
906,940
-
(1)
The term “reserve” means an estimate of
tonnage and grade or quality of indicated and measured resources
that, in the opinion of the qualified person, can be the basis of
an economically viable project. More specifically, it is an
economically mineable part of a measured or indicated mineral
resource, which includes diluting materials and allowances for
losses that may occur when the material is mined or extracted. The
term “proven reserves’ means the economically mineable part of a
measured mineral resource and can only result from conversion of a
measured mineral resource. Reserves are reported in accordance with
Section 1300 of Regulation S-K of the Securities Act of 1933, as
amended and NI 43-101. See footnotes 7 and 8 below.
(2)
Mineral reserves are based on $17/oz
silver, $1600/oz gold, $0.90/lb lead, $1.15/lb zinc, unless
otherwise stated.
(3)
The reserve NSR cut-off grades for Greens
Creek are $215/ton for all zones at Greens Creek except the
Gallagher Zone at $220/ton; metallurgical recoveries (actual 2021):
81.26% silver, 72.34% gold, 82.29% lead, 89.58% zinc
(4)
The reserve NSR cut-off grades for Lucky
Friday are $216.19 for the 30 Vein and $230.98 for the Intermediate
Veins; metallurgical recoveries (actual 2021): 95.18% silver,
94.62% lead, 89.97% zinc
(5)
The average reserve cut-off grades at Casa
Berardi are 0.101 oz/ton gold (3.47 g/tonne) for underground and
0.037 oz/ton (1.27 g/tonne) for open pit. Metallurgical recovery
(actual 2021): 84.82% gold; US$/CAN$ exchange rate: 1:1.275.
(6)
The term “probable reserves” means the
economically mineable part of an indicated and, in some cases, a
measured mineral resource. See footnotes 8 and 9 below.
Totals may not represent the sum of parts due to rounding
Mineral Resources –
12/31/2021(7)
Measured Resources(8)
Asset
Tons (000)
Silver (oz/ton)
Gold (oz/ton)
Lead %
Zinc %
Copper %
Silver (000 oz)
Gold (000 oz)
Lead (Tons)
Zinc (Tons)
Copper (Tons)
Greens Creek (11,12)
-
-
-
-
-
-
-
-
-
-
-
Lucky Friday (11,13)
8,652
7.6
-
4.9
2.5
-
65,752
-
425,100
213,480
-
Casa Berardi Open Pit (11,14)
96
-
0.04
-
-
-
-
4
-
-
-
Casa Berardi Underground (11,14)
2,272
-
0.15
-
-
-
-
351
-
-
-
San Sebastian - Oxide (15)
-
-
-
-
-
-
-
-
-
-
-
San Sebastian - Sulfide (15)
-
-
-
-
-
-
-
-
-
-
-
Fire Creek (16,17)
20
0.7
0.50
-
-
-
14
10
-
-
-
Hollister (16,18)
18
4.9
0.59
-
-
-
87
10
-
-
-
Midas (16,19)
2
7.6
0.68
-
-
-
14
1
-
-
-
Heva (20)
-
-
-
-
-
-
-
-
-
-
-
Hosco (20)
-
-
-
-
-
-
-
-
-
-
-
Star (21)
-
-
-
-
-
-
-
-
-
-
-
Total
11,060
65,867
377
425,100
213,480
-
Indicated Resources(9)
Asset
Tons (000)
Silver (oz/ton)
Gold (oz/ton)
Lead %
Zinc %
Copper %
Silver (000 oz)
Gold (000 oz)
Lead (Tons)
Zinc (Tons)
Copper (Tons)
Greens Creek (11,12)
8,355
12.8
0.10
3.0
8.4
-
106,670
836
250,040
701,520
-
Lucky Friday (11,13)
1,841
7.6
-
5.1
2.4
-
14,010
-
93,140
44,120
-
Casa Berardi Open Pit (11,14)
420
-
0.03
-
-
-
-
14
-
-
-
Casa Berardi Underground (11,14)
4,976
-
0.14
-
-
-
-
685
-
-
-
San Sebastian - Oxide (15)
1,453
6.5
0.09
-
-
-
9,430
135
-
-
-
San Sebastian - Sulfide (15)
1,187
5.5
0.01
1.9
2.9
1.2
6,579
16
22,420
34,100
14,650
Fire Creek (16,17)
113
1.0
0.45
-
-
-
114
51
-
-
-
Hollister (16,18)
70
1.9
0.58
-
-
-
130
40
-
-
-
Midas (16,19)
76
5.7
0.42
-
-
-
430
32
-
-
-
Heva (20)
1,266
-
0.06
-
-
-
-
76
-
-
-
Hosco (20)
29,287
-
0.04
-
-
-
-
1,201
-
-
-
Star (21)
1,126
2.9
-
6.2
7.4
-
3,301
-
69,900
83,410
-
Total
50,168
140,663
3,088
435,500
863,150
14,650
Measured & Indicated
Resources
Asset
Tons (000)
Silver (oz/ton)
Gold (oz/ton)
Lead %
Zinc %
Copper %
Silver (000 oz)
Gold (000 oz)
Lead (Tons)
Zinc (Tons)
Copper (Tons)
Greens Creek (11,12)
8,355
12.8
0.10
3.0
8.4
-
106,670
836
250,040
701,520
-
Lucky Friday (11,13)
10,493
7.6
-
4.9
2.5
-
79,762
-
518,240
257,600
-
Casa Berardi Open Pit (11,14)
516
-
0.03
-
-
-
-
18
-
-
-
Casa Berardi Underground (11,14)
7,248
-
0.14
-
-
-
-
1,036
-
-
-
San Sebastian - Oxide (15)
1,453
6.5
0.09
-
-
-
9,430
135
-
-
-
San Sebastian - Sulfide (15)
1,187
5.5
0.01
1.9
2.9
1.2
6,579
16
22,420
34,100
14,650
Fire Creek (16,17)
134
1.0
0.46
-
-
-
128
61
-
-
-
Hollister (16,18)
88
2.5
0.58
-
-
-
217
51
-
-
-
Midas (16,19)
78
5.7
0.43
-
-
-
444
33
-
-
-
Heva (20)
1,266
-
0.06
-
-
-
-
76
-
-
-
Hosco (20)
29,287
-
0.04
-
-
-
-
1,201
-
-
-
Star (21)
1,126
2.9
-
6.2
7.4
-
3,301
-
69,900
83,410
-
Total
61,229
206,530
3,464
860,600
1,076,630
14,650
Inferred Resources(10)
Asset Tons (000)
Silver (oz/ton)
Gold (oz/ton)
Lead %
Zinc %
Copper %
Silver (000 oz)
Gold (000 oz)
Lead (Tons)
Zinc (Tons)
Copper (Tons)
Greens Creek (11,12)
2,152
12.8
0.08
2.8
6.8
-
27,508
164
60,140
146,020
-
Lucky Friday (11,13)
5,377
7.8
-
5.8
2.4
-
41,872
-
311,850
129,600
-
Casa Berardi Open Pit (11,14)
7,886
-
0.05
-
-
-
-
383
-
-
-
Casa Berardi Underground 11,14)
2,239
-
0.18
-
-
-
-
408
-
-
-
San Sebastian - Oxide (15)
3,490
6.4
0.05
-
-
-
22,353
182
-
-
-
San Sebastian - Sulfide (15)
385
4.2
0.01
1.6
2.3
0.9
1,606
5
6,070
8,830
3,330
Fire Creek (16,17)
765
0.5
0.51
-
-
-
394
392
-
-
-
Fire Creek - Open Pit (22)
74,584
0.1
0.03
-
-
-
5,232
2,178
-
-
-
Hollister (18,18)
642
3.0
0.42
-
-
-
1,916
273
-
-
-
Midas (16,19)
1,232
6.3
0.50
-
-
-
7,723
615
-
-
-
Heva (20)
2,787
-
0.08
-
-
-
-
216
-
-
-
Hosco (20)
17,726
-
0.04
-
-
-
-
663
-
-
-
Star (21)
3,157
2.9
-
5.6
5.5
-
9,432
-
178,670
174,450
-
San Juan Silver (23)
3,594
11.3
0.01
1.4
1.1
-
40,716
36
51,750
40,800
Monte Cristo (24)
913
0.3
0.14
-
-
-
271
131
-
-
-
Rock Creek (25)
100,086
1.5
-
-
-
0.7
148,736
-
-
-
658,680
Montanore (26)
112,185
1.6
-
-
-
0.7
183,346
-
-
-
759,420
Total
339,200
491,103
5,644
608,480
499,700
1,421,430
Note: All estimates are in-situ except for the proven reserves
at Greens Creek which are in surface stockpiles. Mineral resources
are exclusive of reserves.
(7)
The term "mineral resources" means a
concentration or occurrence of material of economic interest in or
on the Earth's crust in such form, grade or quality, and quantity
that there are reasonable prospects for economic extraction. A
mineral resource is a reasonable estimate of mineralization, taking
into account relevant factors such as cut-off grade, likely mining
dimensions, location or continuity, that, with the assumed and
justifiable technical and economic conditions, is likely to, in
whole or in part, become economically extractable. It is not merely
an inventory of all mineralization drilled or sampled. Resources
are reported in accordance with Section 1300 of Regulation S-K of
the Securities Act of 1933, as amended and NI 43-101.
(8)
The term "measured resources" means that
part of a mineral resource for which quantity and grade or quality
are estimated on the basis of conclusive geological evidence and
sampling. The level of geological certainty associated with a
measured mineral resource is sufficient to allow a qualified person
to apply modifying factors, as defined in this section, in
sufficient detail to support detailed mine planning and final
evaluation of the economic viability of the deposit Because a
measured mineral resource has a higher level of confidence than the
level of confidence of either an indicated mineral resource or an
inferred mineral resource, a measured mineral resource may be
converted to a proven mineral reserve or to a probable mineral
reserve.
(9)
The term "indicated resources" means that
part of a mineral resource for which quantity and grade or quality
are estimated on the basis of adequate geological evidence and
sampling. The level of geological certainty associated with an
indicated mineral resource is sufficient to allow a qualified
person to apply modifying factors in sufficient detail to support
mine planning and evaluation of the economic viability of the
deposit. Because an indicated mineral resource has a lower level of
confidence than the level of confidence of a measured mineral
resource, an indicated mineral resource may only be converted to a
probable mineral reserve.
(10)
The term "inferred resources" means that
part of a mineral resource for which quantity and grade or quality
are estimated on the basis of limited geological evidence and
sampling. The level of geological uncertainty associated with an
inferred mineral resource is too high to apply relevant technical
and economic factors likely to influence the prospects of economic
extraction in a manner useful for evaluation of economic viability.
Because an inferred mineral resource has the lowest level of
geological confidence of all mineral resources, which prevents the
application of the modifying factors in a manner useful for
evaluation of economic viability, an inferred mineral resource may
not be considered when assessing the economic viability of a mining
project and may not be converted to a mineral reserve.
(11)
Mineral resources are based on $1700/oz
gold, $21/oz silver, $1.15/lb lead, $1.35/lb zinc and $3.00/lb
copper, unless otherwise stated.
(12)
The resource NSR cut-off grades for Greens
Creek are $215/ton for all zones at Greens Creek except the
Gallagher Zone at $220/ton; metallurgical recoveries (actual 2021):
81.26% silver, 72.34% gold, 82.29% lead, 89.58% zinc.
(13)
The resource NSR cut-off grades for Lucky
Friday are $170.18 for the 30 Vein, $184.97 for the Intermediate
Veins and $207.15 for the Lucky Friday Vein; metallurgical
recoveries (actual 2021): 95.18% silver, 94.62% lead, 89.97%
zinc.
(14)
The average resource cut-off grades at
Casa Berardi are 0.089 oz/ton gold (3.06 g/tonne) for underground
and 0.036 oz/ton (1.22 g/tonne) for open pit; metallurgical
recovery (actual 2021): 84.82% gold; US$/CAN$ exchange rate:
1:1.275.
(15)
Indicated resources for most zones at San
Sebastian based on $1500/oz gold, $21/oz silver, $1.15/lb lead,
$1.35/lb zinc and $3.00/lb copper using a cut-off grade of
$90.72/ton ($100/tonne); $1700/oz gold used for Toro, Bronco, and
Tigre zones. Metallurgical recoveries based on grade dependent
recovery curves: recoveries at the mean resource grade average 89%
silver and 84% gold for oxide material and 85% silver, 83% gold,
81% lead, 86% zinc, and 83% for copper for sulfide material.
Resources reported at a minimum mining width of 8.2 feet (2.5m) for
Middle Vein, North Vein, and East Francine, 6.5ft (1.98m) for El
Toro, El Bronco, and El Tigre, and 4.9 feet (1.5 m) for Hugh Zone
and Andrea.
(16)
Mineral resources for Fire Creek,
Hollister and Midas are reported using $1500/oz gold and $21/oz
silver prices, unless otherwise noted. A minimum mining width is
defined as four feet or the vein true thickness plus two feet,
whichever is greater.
(17)
Fire Creek mineral resources are reported
at a gold equivalent cut-off grade of 0.283 oz/ton. Metallurgical
recoveries: 90% gold, 70% silver.
(18)
Hollister mineral resources, including the
Hatter Graben are reported at a gold equivalent cut-off grade of
0.238 oz/ton. Metallurgical recoveries: 88% gold, 66% silver
(19)
Midas mineral resources are reported at a
gold equivalent cut-off grade of 0.237 oz/ton. Metallurgical
recoveries: 90% gold, 70% silver. A gold-equivalent cut-off grade
of 0.1 oz/ton and a gold price of $1700/oz used for Sinter Zone
with resources undiluted.
(20)
Measured, indicated and inferred resources
at Heva and Hosco are based on $1,500/oz gold. Resources are
without dilution or material loss at a gold cut-off grade of 0.01
oz/ton (0.33 g/tonne) for open pit and 0.088 oz/ton (3.0 g/tonne)
for underground.
Metallurgical recovery: Heva: 95% gold,
Hosco: 87.7% gold.
(21)
Indicated and Inferred resources at the
Star property are reported using $21 silver, $0.95 lead, $1.10
lead, a minimum mining width of 4.3 feet and a cut-off grade of
$100/ton; Metallurgical recovery: 93.38% silver, 93.33% lead,
86.96% zinc.
(22)
Inferred open-pit resources for Fire Creek
calculated November 30, 2017, using gold and silver recoveries of
65% and 30% for oxide material and 60% and 25% for mixed
oxide-sulfide material. Indicated Resources reclassified as
Inferred in 2019.
Open pit resources are calculated at $1400
gold and $19.83 silver and cut-off grade of 0.01 Au Equivalent
oz/ton and is inclusive of 10% mining dilution and 5% ore loss.
Open pit mineral resources exclusive of underground mineral
resources.
(23)
Inferred resources reported at a minimum
mining width of 6.0 feet for Bulldog and a cut-off grade of 6.0
equivalent oz/ton silver and 5.0 feet for Equity and North Amethyst
vein at a cut-off grade of $50/ton and $100/ton; based on $1400 Au,
$26.5 Ag, $0.85 Pb, and $0.85 Zn.
Metallurgical recoveries based on grade
dependent recovery curves: recoveries at the mean resource grade
average 88% silver and 74% lead for the Bulldog and a constant 85%
gold and 85% silver for North Amethyst and Equity.
(24)
Inferred resource at Monte Cristo reported
at a minimum mining width of 5.0 feet; resources based on $1400 Au,
$26.5 Ag using a 0.06 oz/ton gold cut-off grade. Metallurgical
recovery: 90% gold, 90% silver.
(25)
Inferred resource at Rock Creek reported
at a minimum thickness of 15 feet and a cut-off grade of $24.50/ton
NSR; Metallurgical recoveries: 88% silver, 92% copper.
Resources adjusted based on mining
restrictions as defined by U.S. Forest Service, Kootenai National
Forest in the June 2003 'Record of Decision, Rock Creek
Project'.
(26)
Inferred resource at Montanore reported at
a minimum thickness of 15 feet and a cut-off grade of $24.50/ton
NSR; Metallurgical recoveries: 88% silver, 92% copper.
Resources adjusted based on mining
restrictions as defined by U.S. Forest Service, Kootenai National
Forest, Montana DEQ in December 2015 'Joint Final EIS, Montanore
Project' and the February 2016 U.S Forest Service - Kootenai
National Forest 'Record of Decision, Montanore Project'.
Totals may not represent the sum of parts due to rounding
Category: Earnings
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