HL Hecla Mining Company

Record sales and growing cash result in a stronger balance sheet

Hecla Mining Company (NYSE:HL) today announced second quarter 2016 financial and operating results.

SECOND QUARTER HIGHLIGHTS AND SIGNIFICANT ITEMS (compared to Q2 2015)

• Net income applicable to common shareholders of $24.0 million, or $0.06 per share.
• Sales of $171.3 million, up 64% on higher production, a record.
• Adjusted EBITDA of $77.8 million, up 164%.1
• Silver production of 4.2 million ounces, up 71%.
• Gold production of 62,965 ounces, up 41%.
• Cash and cash equivalents and short-term investments of $159 million, up $25 million over first quarter.
• Increased estimated 2016 (i) silver production to 15.75 million ounces (from 15.0 million) at a cash cost, after by-product credits, of $4.75 per ounce (from $5.00 per ounce) and (ii) exploration and pre-development expenditures by 27% to $19.0 million.2
• #4 Shaft at Lucky Friday reached its final depth, expected to be operational by year end.

“Hecla's industry-leading production growth of 71% for silver and 41% for gold is due to our organic growth acceleration strategy,” said Phillips S. Baker, Jr. “The result is the highest sales in our history and our second highest adjusted EBITDA. With current prices even higher than the second quarter and continued strong performance from Casa Berardi and San Sebastian, we expect even better results in the future.”

 

FINANCIAL OVERVIEW

    Second Quarter Ended   Six Months Ended HIGHLIGHTS   June 30, 2016   June 30, 2015   June 30, 2016   June 30, 2015 FINANCIAL DATA                 Sales (000) $ 171,302   $ 104,197 $ 302,319   $ 223,289 Gross profit (000) $ 58,452 $ 9,464 $ 89,274 $ 29,337 Income (loss) applicable to common shareholders (000) $ 23,978 $ (26,805 ) $ 23,222 $ (14,391 )

Basic and diluted income (loss) per common share

$ 0.06 $ (0.07 ) $ 0.06 $ (0.04 ) Net income (loss) (000) $ 24,116 $ (26,667 ) $ 23,498 $ (14,115 )

Cash provided by operating activities (000)

$ 67,390 $ 30,754 $ 86,138 $ 52,173

Net income applicable to common shareholders for the second quarter 2016 was $24.0 million, or $0.06 per share, compared to a net loss applicable to common shareholders of $26.8 million, or $0.07 per share, for the same period in 2015, the result mainly due to the following items:

• Sales were 64% higher than the second quarter 2015, mainly due to 71% increased silver production and 41% increased gold production as well as higher silver and gold prices.
• Cost of sales and other direct production costs and depreciation, depletion and amortization of $112.9 million was higher by 19% mainly due to San Sebastian being in commercial production.
• Cash cost, after by-product credits, decreased 32% per silver ounce and 28% per gold ounce from the second quarter 2015.4,5
• A $7.8 million lower provision for closed operations and environmental matters recorded in 2016, as compared to the same period in 2015.
• Income tax provision of $11.5 million for the second quarter of 2016 compared to an income tax benefit of $0.1 million for the same period in 2015 primarily due to higher net income before taxes, partially offset by a decrease in the valuation allowance on deferred tax assets in Mexico in the second quarter of 2016.

Higher production resulted in operating cash flow of $67.4 million, $36.6 million higher than the second quarter 2015.

Capital expenditures (excluding capitalized interest) at the operations totaled $42.3 million for the second quarter. Expenditures consisted of $17.2 million at Casa Berardi, $14.7 million at Greens Creek, $10.2 million at Lucky Friday, and $0.2 million at San Sebastian. The company continues to estimate 2016 capital spending will total $150 million, unchanged from previous estimates.

Metals Prices

The average realized silver price in the second quarter was $17.26 per ounce, 6% higher than the $16.32 average realized silver price in the second quarter of 2015. The average realized gold price was $1,254 per ounce, an increase of 5%, from $1,194 in the second quarter 2015. Realized lead prices of $0.79/lb were down 16%, and realized zinc prices of $0.89/lb were down 7% from the second quarter of 2015.

Base Metals Forward Sales Contracts

There is no quantity of base metals committed under financially settled forward sales contracts for forecasted future sales at June 30, 2016.

OPERATIONS OVERVIEW

Overview

The following table provides the production, cost of sales, and cash cost, after by-product credits, per silver and gold ounce summary for the second quarter and six months ended June 30, 2016 and 2015:

Second Quarter and

Six Months Ended

        Greens Creek   Lucky Friday   Casa Berardi   San Sebastian June 30, 2016       Silver   Gold   Silver   Gold   Silver   Gold   Silver   Silver   Gold Production (ounces) Q2 4,241,398 62,965 2,117,084   11,528   857,543   41,955   8,668   1,258,103   9,482   6 Mos   8,884,102     118,653     4,575,360     27,509     1,834,627     72,333     15,673     2,458,442     18,811 Increase/(decrease) over Q2 2015 Q2 71 % 41 % 14 % (16 )% 40 % 36 % 15 % N/A N/A   6 Mos   66 %   39 %   18 %   (5 )%   27 %   28 %   16 %   N/A   N/A Cost of sales and other direct production costs and depreciation, depletion and amortization Q2 $ 71,667 $ 41,183 $ 43,734 N/A $ 18,708 $ 41,183 N/A $ 9,225 N/A   6 Mos   $ 142,702     $ 70,343     $ 88,587     N/A   $ 37,212     $ 70,343     N/A   $ 16,903     N/A Cash costs, after by-product credits, per silver or gold ounce4,5 Q2 $ 3.80 $ 601 $ 5.38 N/A $ 9.94 $ 601 N/A $ (3.05 ) N/A   6 Mos   $ 3.46     $ 676     $ 4.61     N/A   $ 9.47     $ 676     N/A   $ (3.15 )   N/A                                           Second Quarter and

Six Months Ended

Greens Creek   Lucky Friday   Casa Berardi   San Sebastian June 30, 2015       Silver   Gold   Silver   Gold   Silver   Gold   Silver   Silver   Gold Production (ounces) Q2 2,477,150 44,692 1,856,125 13,753 613,474 30,939 7,551 — —   6 Mos   5,355,747     85,342     3,892,091     28,992     1,450,193     56,350     13,463     —     — Cost of sales and other direct production costs and depreciation, depletion and amortization Q2 $ 57,965 $ 36,769 $ 42,815 N/A $ 15,150 $ 36,769 N/A N/A N/A   6 Mos   $ 126,012     $ 67,940     $ 94,522     N/A   $ 31,490     $ 67,940     N/A   N/A   N/A Cash costs, after by-product credits, per silver or gold ounce4,5 Q2 $ 5.61 $ 832 $ 3.30 N/A $ 12.58 $ 832 N/A N/A N/A   6 Mos   $ 5.24     $ 896     $ 3.27     N/A   $ 10.55     $ 896     N/A   N/A   N/A

The following table provides the production summary on a consolidated basis for the second quarter and six months ended June 30, 2016 and 2015:

    Second Quarter Ended   Six Months Ended June 30, 2016   June 30, 2015   June 30, 2016   June 30, 2015 PRODUCTION SUMMARY Silver - Ounces produced 4,241,398   2,477,150 8,884,102   5,355,747 Payable ounces sold 4,141,427 1,986,407 7,937,242 4,912,942 Gold - Ounces produced 62,965 44,692 118,653 85,342 Payable ounces sold 64,609 40,237 110,869 80,032 Lead - Tons produced 10,391 9,525 21,429 19,403 Payable tons sold 9,663 7,128 18,413 15,753 Zinc - Tons produced 18,132 17,515 35,496 33,602 Payable tons sold 10,010 12,191 24,352 23,334

Greens Creek Mine - Alaska

Silver production of 2.1 million ounces increased 14% and gold production of 11,528 ounces decreased 16% over the prior year period. Increased silver production resulted from higher grades as well as slightly higher throughput. Gold production was impacted due to a one-time adjustment in the gravity circuit. The mill operated at an average of 2,235 tons per day (tpd) in the second quarter.

The cost of sales was $43.7 million, and the cash cost, after by-product credits, per silver ounce of $5.38 increased from $3.30 in the second quarter 2015.2 The increase was due to lower by-product credits as a result of lower reported gold production, partially offset by higher silver production.

The estimated 2016 silver production is increased to 8.3 million ounces and gold production is slightly higher at 53,000 ounces.

Lucky Friday Mine - Idaho

Silver production of 857,543 ounces was 40% higher than the second quarter of 2015 due to higher grades in the current period and ventilation repairs made in the prior year period. The mill operated at an average of 745 tpd in the second quarter.

The cost of sales was $18.7 million, and the cash cost, after by-product credits, per silver ounce of $9.94, decreased from $12.58 per ounce in the second quarter of 2015.2 This decrease was principally due to higher silver production as a result of mining higher-grade material.

The excavation of the #4 Shaft from the 4,400 level to the 8,600 level is complete and should be operational by year end. Once operational, work will begin on the lateral development necessary to provide access to higher-grade material.

The estimated 2016 silver production remains at 3.1 million ounces.

Casa Berardi - Quebec

Gold production of 41,955 ounces was 36% higher than the second quarter of 2015 due to higher gold grades. The mill operated at an average of 2,398 tpd in the second quarter.

The cost of sales was $41.2 million, and the cash cost, after by-product credits, per gold ounce of $601, decreased from $832 in the second quarter of 2015 due to higher gold production.2

The estimated 2016 gold production is increased to 145,000 ounces (surface and underground).

Development of the East Mine Crown Pillar (EMCP) pit continues, and the vein has been exposed closer to surface than expected. Processing of EMCP ore began on July 22, 2016, and the pit is expected to add 5,000 ounces of gold production in 2016.

San Sebastian - Mexico

Silver production was 1,258,103 ounces at a cost of sales of $9.2 million, or cash cost, after by-product credits, of negative $3.05 per ounce in the second full quarter of production since reopening.2 The strong cash cost, after by-product credit, performance was due to the production of 9,482 ounces of gold, which is used as a by-product credit. At quarter-end there were approximately 161,000 silver ounces in inventory, down from 320,000 ounces in the first quarter. The mill operated at an average of 411 tpd in the second quarter.

Should resource conversion be successful, the Company has an option to process ore at the Velardeña mill until the end of 2018.

The estimated 2016 silver production is increased to 4.35 million ounces and gold production to be 35,000 ounces.

EXPLORATION AND PRE-DEVELOPMENT

Expenditures

Exploration and pre-development expenses were $3.4 million and $0.5 million, respectively, decreases of about $1.2 million and $1.1 million compared to the second quarter 2015 as a result of reduced discretionary spending in exploration and pre-development expenses. Estimated full year exploration and pre-development expenses have increased by $4 million to $19 million.

The Company’s exploration efforts are focused on discovering high-grade deposits near its existing operations, particularly at San Sebastian, where the results are encouraging. As a result of consistent exploration success over the last ten years across all projects, the level of reserves have shown a remarkable resilience despite changes in commodity prices; production has been replaced and reserves have grown steadily. A summary of this activity in the quarter is provided below.

San Sebastian - Mexico

Exploration activities at San Sebastian are focused on defining extensions to the current open pits and identifying new resources that could prolong high-margin precious metals production. Shallow drilling up to 200 feet west of the Middle Vein pit cut vein extensions that graded 26.7 oz/ton silver and 0.26 oz/ton gold over 4.3 feet and 9.3 oz/ton silver and 0.12 oz/ton gold over 9.8 feet. Drill intersections of similar veins up to 125 feet east of the pit graded 2.7 oz/ton silver and 0.48 oz/ton gold over 1.8 feet. These intersections in combination with past drilling show intervals of good, near-surface mineralization in the Middle Vein beyond the current open pit and may represent an opportunity to expand the pit.

In addition, shallow drilling of the Middle Vein approximately 1,200 to 2,000 feet west from the current Middle Vein pit included an intersection of 9.7 oz/ton silver and 0.05 oz/ton gold over 7.2 feet of oxide mineralization. Deeper drilling in this area has returned some spectacular results including 65.1 oz/ton silver and 0.68 oz/ton gold over 7.8 feet and 57.7 oz/ton silver and 0.28 oz/ton gold over 6.1 feet. This mostly horizontal zone is dominantly oxide with some supergene mineralization that varies in depth from 200 to 500 feet from surface. This new area now defines over 850 feet of continuous vein mineralization that is located at potentially open pit mining or shallow underground depths.

Drilling also continues on a new target area referred to as the West Francine Vein that is about 3,000 feet west of previous mining at the Francine Vein. Drilling has defined a continuous vein with over 1,600 feet of strike length that varies in thickness from 2 to 16-feet wide and the vein is open in all directions. Recent drill holes intersected mineralized zones at a depth of 50 to 250 feet from surface and include 13.4 oz/ton silver and 0.05 oz/ton gold over 3.5 feet. Step-out drilling continues to the east and at depth where mineralization appears stronger. Most of the additional 2016 exploration spending at San Sebastian is expected to follow up on these results on the Middle and West Francine veins.

Drilling commenced in June in areas directly to the east and southeast of the East Francine pit on possible extensions of the East Francine Vein. These targets are based on results from the RAB (rotary air blast) drilling program and surface trenching from last year. Preliminary drilling has intersected quartz veins and breccias and assays are pending for these holes. Further drilling of a 6 to 12-foot wide vein/breccia zone that can be traced for 800 feet by trenching is currently planned for the third quarter.

Casa Berardi - Quebec

During the second quarter, drilling at Casa Berardi focused on targets both underground, - the 118, 121, 123 and Lower Inter zones, and on or near surface (i.e. open pitable) - the 124 and 134 zones. Up to six drills have been operating underground and two on surface.

Drilling of the upper 118 Zone from the 490 level down to the 570 level defines multiple shear zones that extend for over 1,000 feet down-plunge and include a series of continuous mineralized intervals of over 0.4 oz/ton gold with good mining widths. This zone continues to plunge to the west at depth and recent intercepts include 0.44 oz/ton gold over 26.6 feet. Drilling of the 121 Zone, which is about 400 feet west and a continuation of the high-grade 123 Zone, has returned 0.56 oz/ton gold over 8.9 feet and has been identified for over 800 feet along strike and about 700 feet up dip. Drilling of the 123 Zone from the 490 and 870 levels continue to intercept high-grade mineralization, including 0.53 oz/ton gold over 16.1 feet along eastern vein extensions. Deeper drilling shows that the stacked lenses of the 123 Zone define an almost constant down-plunge mineralization for over 3,500 vertical feet from surface and many of the lenses have strike lengths up to 600 feet. Recent drilling shows these lenses are open along strike to the east and at depth. The close proximity of these new lenses to mine infrastructure should enable near-term production.

At the west end of the mine drilling has started on the Lower Inter off the 300 and 360 levels. Drilling from the 300 level has successfully defined the up dip extension of the Lower Inter Zone, including an intersection of 0.95 oz/ton gold over 17.4 feet. Deeper drilling off the 360 level has intersected a new, broad mineralized zone just south of the Casa Berardi Fault referred to as the 104 Zone and two new mineralized lenses north of the fault. Initial drill results define a broad, 102 foot-wide zone of 0.05 oz/ton gold including 0.29 oz/ton gold over 3.3 feet and 0.16 oz/ton gold over 3.2 feet.

Surface and underground drilling of the 124 Zone below and to both the west and east of the Principal area has defined a near-surface, 15 to 60-foot thick, quartz-bearing zone with over 2,000 feet of strike length. Within this wide mineralized zone are high-grade lenses that have continuity up to 300 feet of strike length. Recent drilling of the 124 Zone included intersections of 0.70 oz/ton gold over 20.3 feet and 0.41 oz/ton gold over 24.9 feet. Further refinement of this near-surface target with drilling may outline a resource suitable for open pit mining.

Surface drilling further east of the Principal area is testing the shallow 124 and 134 zones along the Casa Berardi Fault. Drilling in this area within 500 feet of surface has defined a 150 to 300-foot thick mineralized shear zone with vein-bearing zones from 5 to 20-foot thick. Recent intersections of the 134 Zone include 0.09 oz/ton gold over 49.2 feet. Successful drilling on surface continues to define new resources and additional 2016 spending will be focused on expanding the near-surface resources that should sustain open pit mine production at Casa Berardi in the coming years.

Greens Creek - Alaska

At Greens Creek, definition drilling is refining the resources of the 9A and NWW zones for conversion to reserves. Recent definition drilling of the 9A Zone confirmed continuity of the mineralization and refined the geometry of a mostly vertical eastern limb of mineralization. Drill intersections include 20.4 oz/ton silver, 0.09 oz/ton gold, 16.2% zinc, and 5.2% lead over 17.5 feet and 15.1 oz/ton silver, 0.08 oz/ton gold, 11.2% zinc, and 4.1% lead over 15.6 feet. Drilling of the northern most targets of the NWW Zone defined mineralization of similar overall geometry of the resource model but thinner and slightly lesser extents in places. Recent drill intersections include 76.4 oz/ton silver, 0.17 oz/ton gold, 19.9% zinc, and 4.4% lead over 10.2 feet and 56.1 oz/ton silver, 0.13 oz/ton gold, 3.3% zinc, and 0.8% lead over 10.2 feet. Revised resource models for the 5250, 9A, West Wall, NWW and Deep 200 South zones are expected by the end of the year.

Exploration drilling has tested the down plunge projection of the 5250 trend of mineralization and attempted to locate the upper shear which defines the upper limit to mineralization at Greens Creek. This drilling is showing semi-continuous mineralization along the 5250 and Deep 200 South trends in the southern part of the mine that require additional drilling to refine new resources.

More complete drill assay highlights from San Sebastian, Casa Berardi, and Greens Creek can be found in Table A at the end of the release.

Other Properties

Summer fieldwork on the Opinaca-Wildcat project near Goldcorp’s Eleonore Mine in northern Quebec is underway and will include prospecting of numerous electromagnetic (EM) anomalies lying on the Opinaca property. So far, the fieldwork revealed three new mineralized zones directly east of the Eleonore Mine and two further south along the Claude structure that is directly east of the Cheechoo discovery by Sirios Resources. At the Rock Creek project in Montana, validation and check assay work includes the integration of data for revised resource models and future exploration programs.

2016 ESTIMATES

For the full year 2016, the Company increased its production estimates at Greens Creek, San Sebastian and Casa Berardi and lowered its estimate for total cash cost, after by-product credits, per silver ounce and increased its estimate for exploration expenditures. The Company currently estimates:

Mine   2016E Silver

Production (Moz)6

  Prior

2016E Silver

Production (Moz)6

  2016E Gold

Production (oz)

  Prior

2016E Gold

Production (oz)

  Cash cost, after by-product credits, per silver/gold ounce3   Prior cash cost, after by-product credits, per silver/gold ounce3 Greens Creek   8.30   8.1   53,000   52,000   $5.00/silver oz   $5.00/silver oz Lucky Friday 3.10 3.1 $9.00/silver oz $9.00/silver oz San Sebastian 4.35 3.8 35,000 20,000 $1.00/silver oz $1.00/silver oz Casa Berardi 145,000 135,000 $700/gold oz $700/gold oz Total 15.75 15.0 233,000 207,000 $4.75/silver oz $5.00/silver oz AgEq Production7: 44.0 41.0 AuEq Production7: 576,000 540,500  

2016E capital expenditures (excluding capitalized interest)

  $150 million 2016E pre-development and exploration expenditures   $19 million [prior $15 million]

DIVIDENDS

The Board of Directors declared a quarterly cash dividend of $0.0025 per share of common stock, payable on or about August 31, 2016, to stockholders of record on August 23, 2016. The realized silver price was $17.26 in the second quarter and therefore did not satisfy the criteria for a larger dividend under the Company's dividend policy.

The Board of Directors also declared the regular quarterly dividend of $0.875 per share on the 157,816 outstanding shares of Series B Cumulative Convertible Preferred Stock. This represents a total amount to be paid of approximately $138,000. The cash dividend is payable October 3, 2016, to shareholders of record on September 15, 2016.

CONFERENCE CALL AND WEBCAST

A conference call and webcast will be held Thursday, August 4, at 10:00 a.m. Eastern Time to discuss these results. You may join the conference call by dialing toll-free 1-855-760-8158 or for international dialing 1-720-634-2922. The participant passcode is HECLA. Hecla's live and archived webcast can be accessed at www.hecla-mining.com under Investors or via Thomson StreetEvents Network.

ABOUT HECLA

Founded in 1891, Hecla Mining Company (NYSE:HL) is a leading low-cost U.S. silver producer with operating mines in Alaska and Idaho, and is a growing gold producer with an operating mine in Quebec, Canada. The Company also has exploration and pre-development properties in six world-class silver and gold mining districts in the U.S., Canada and Mexico, and an exploration office and investments in early-stage silver exploration projects in Canada.

NOTES

(1) Adjusted EBITDA is a non-GAAP measurement, a reconciliation of which to net income (loss), the most comparable GAAP measure, can be found at the end of the release.

(2) Cash cost, after by-product credits, per silver and gold ounce represents a non-GAAP measurement. The most comparable GAAP measure is cost of sales and other direct production costs and depreciation, depletion and amortization, and is sometimes referred to as "cost of sales" in this release.

(3) The estimates of future cash cost, after by-product credits, per silver ounce or gold ounce (non-GAAP) are made applying management’s judgment and experience to forecasted metals and prices, inventory changes, performance year to date and expectations for the remainder of the year. It is not calculated from the GAAP measure of costs of sales, which is not available, and therefore providing a reconciliation to it requires an unreasonable effort.

(4) Cash cost, after by-product credits, per silver and gold ounce represents a non-GAAP measurement, a reconciliation of which to cost of sales and other direct production costs and depreciation, depletion and amortization, the most comparable GAAP measures, can be found at the end of the release.

(5) Cash cost, after by-product credits, per gold ounce is only applicable to Casa Berardi production. Gold produced from Greens Creek is treated as a by-product credit against the silver cash cost.

(6) 2016E refers to the Company's estimates for 2016.

(7) All metal equivalent production of 44 million silver oz or 576,000 gold oz includes silver, gold, lead and zinc production from Lucky Friday, Greens Creek, San Sebastian and Casa Berardi converted using the following metal price assumptions: Au $1,150/oz, Ag $15/oz, Zn $0.75/lb, Pb $0.80/lb; USD/CAD assumed at 0.75, USD/MXN at $0.06.

Cautionary Statements to Investors on Forward-Looking Statements

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. Such forward-looking statements may include, without limitation: (i) estimates of future production and sales; (ii) estimates of future costs and cash cost, after by-product credits per ounce of silver/gold; (iii) guidance for 2016 for silver and gold production, cash cost, after by-product credits, capital expenditures and pre-development and exploration expenditures (which assumes metal prices of gold at $1,150/oz, silver at $15/oz, zinc at $0.75/lb, lead at $0.80/lb and USD/CAD assumed at $0.75), USD/MXN at $0.06; (iv) expectations regarding the development, growth and exploration potential of the Company’s projects; (v) expectations of growth; (vi) the ability to convert resources to reserves at Greens Creek; (vii) expectations of #4 Shaft being operational by year end and total estimated cost of the project, and (viii) possible strike extensions of veins at the San Sebastian project, the ability to extend the mine life. 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: (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 Canadian dollar to the U.S. dollar, 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; and (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. 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 2015 Form 10-K, filed on February 23, 2016 with the Securities and Exchange Commission (SEC), as well as the Company’s other SEC filings. The Company does not undertake any obligation to release publicly revisions to any “forward-looking statement,” including, without limitation, outlook, to reflect events or circumstances after the date of this news release, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. Investors should not assume that any lack of update to a previously issued “forward-looking statement” constitutes a reaffirmation of that statement. Continued reliance on “forward-looking statements” is at investors’ own risk.

Qualified Person (QP) Pursuant to Canadian National Instrument 43-101

Dean McDonald, PhD. P.Geo., Senior Vice President - Exploration of Hecla Mining Company, who serves as a Qualified Person under National Instrument 43-101("NI 43-101"), supervised the preparation of the scientific and technical information concerning Hecla’s mineral projects in this news release. 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 Greens Creek Mine are contained in a technical report prepared for Hecla and Aurizon Mines Ltd. titled “Technical Report for the Greens Creek Mine, Juneau, Alaska, USA” effective date March 28, 2013, and for the Lucky Friday Mine are contained in a technical report prepared for Hecla titled “Technical Report on the Lucky Friday Mine Shoshone County, Idaho, USA” effective date April 2, 2014, and for the Casa Berardi Mine are contained in a technical report prepared for Hecla titled "Technical Report on the Mineral Resource and Mineral Reserve Estimate for the Casa Berardi Mine, Northwestern Quebec, Canada" effective date March 31, 2014 (the "Casa Berardi Technical Report")and for the San Sebastian Mine are contained in a technical report prepared for Hecla titled “Technical Report for the San Sebastian Ag-Au Property, Durango, Mexico" effective date September 8, 2015. Also included in these four technical reports is a description of the key assumptions, parameters and methods used to estimate mineral reserves and resources and a general discussion of the extent to which the estimates may be affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant factors. Copies of these technical reports are available under Hecla's profile on SEDAR at www.sedar.com.

Cautionary Statements to Investors on Reserves and Resources

Reporting requirements in the United States for disclosure of mineral properties are governed by the SEC and included in the SEC's Securities Act Industry Guide 7, entitled “Description of Property by Issuers Engaged or to be Engaged in Significant Mining Operations” (“Guide 7”). However, the Company is also a "reporting issuer" under Canadian securities laws, which require estimates of mineral resources and reserves to be prepared in accordance with Canadian National Instrument 43-101 (“NI 43-101”). NI 43-101 requires all disclosure of estimates of potential mineral resources and reserves to be disclosed in accordance with its requirements. Such Canadian information is being included here to satisfy the Company's “public disclosure” obligations under Regulation FD of the SEC and to provide U.S. holders with ready access to information publicly available in Canada.

Reporting requirements in the United States for disclosure of mineral properties under Guide 7 and the requirements in Canada under NI 43-101 standards are substantially different. This document contains a summary of certain estimates of the Company, not only of proven and probable reserves within the meaning of Guide 7, which requires the preparation of a “final” or “bankable” feasibility study demonstrating the economic feasibility of mining and processing the mineralization using the three-year historical average price for any reserve or cash flow analysis to designate reserves and that the primary environmental analysis or report be filed with the appropriate governmental authority, but also of mineral resource and mineral reserve estimates estimated in accordance with the definitional standards of the Canadian Institute of Mining, Metallurgy and Petroleum referred to in NI 43-101. The terms “measured resources”, "indicated resources," and "inferred resources" are Canadian mining terms as defined in accordance with NI 43-101. These terms are not defined under Guide 7 and are not normally permitted to be used in reports and registration statements filed with the SEC in the United States, except where required to be disclosed by foreign law. Investors are cautioned not to assume that any part or all of the mineral deposits in such categories will ever be converted into proven or probable reserves. “Resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of such a "resource” will ever be upgraded to a higher category or will ever be economically extracted. Investors are cautioned not to assume that all or any part of a "resource” exists or is economically or legally mineable. Investors are also especially cautioned that the mere fact that such resources may be referred to in ounces of silver and/or gold, rather than in tons of mineralization and grades of silver and/or gold estimated per ton, is not an indication that such material will ever result in mined ore which is processed into commercial silver or gold.

HECLA MINING COMPANY

Condensed Consolidated Statements of Income (Loss)

(dollars and shares in thousands, except per share amounts - unaudited)

    Second Quarter Ended   Six Months Ended June 30, 2016   June 30, 2015 June 30, 2016   June 30, 2015 Sales of products $ 171,302   $ 104,197   $ 302,319   $ 223,289   Cost of sales and other direct production costs 82,953 67,567 157,273 141,532 Depreciation, depletion and amortization 29,897   27,166   55,772   52,420   112,850   94,733   213,045   193,952   Gross profit 58,452   9,464   89,274   29,337     Other operating expenses: General and administrative 10,359 8,296 20,573 17,016 Exploration 3,362 4,592 6,312 9,208 Pre-development 521 1,618 925 2,138 Other operating expense 622 766 1,262 1,394 Provision for closed operations and environmental matters 1,576 9,335 2,617 9,802 Acquisition costs 402   2,147   402   2,147   16,842   26,754   32,091   41,705   Income (loss) from operations 41,610   (17,290 ) 57,183   (12,368 ) Other income (expense): Loss on disposition of investments — (166 ) — (166 ) Unrealized gain (loss) on investments 1,150 (117 ) 439 (2,960 ) Gain (loss) on derivative contracts (6 ) (887 ) (6 ) 4,905 Interest and other income 113 35 201 73 Net foreign exchange gain (loss) (1,885 ) (1,833 ) (10,088 ) 10,441 Interest expense, net of amount capitalized (5,370 ) (6,541 ) (11,081 ) (12,733 ) (5,998 ) (9,509 ) (20,535 ) (440 ) Income (loss) before income taxes 35,612 (26,799 ) 36,648 (12,808 ) Income tax benefit (provision) (11,496 ) 132   (13,150 ) (1,307 ) Net income (loss) 24,116 (26,667 ) 23,498 (14,115 ) Preferred stock dividends (138 ) (138 ) (276 ) (276 ) Income (loss) applicable to common shareholders $ 23,978   $ (26,805 ) $ 23,222   $ (14,391 ) Basic and diluted income (loss) per common share after preferred dividends $ 0.06   $ (0.07 ) $ 0.06   $ (0.04 ) Weighted average number of common shares outstanding - basic and diluted 383,790   371,295   381,389   370,042     HECLA MINING COMPANY

Condensed Consolidated Balance Sheets

(dollars and shares in thousands - unaudited)

      June 30, 2016   December 31, 2015 ASSETS         Current assets:     Cash and cash equivalents $ 143,613 $ 155,209 Short-term investments and securities 15,070 — Accounts receivable: Trade 25,667 13,490 Other, net 45,094 27,859 Inventories 51,406 45,542 Current deferred income taxes 18,386 17,980 Current restricted cash 3,900 — Other current assets 7,999   9,453   Total current assets 311,135 269,533 Non-current investments 4,453 1,515 Non-current restricted cash and investments 999 999 Properties, plants, equipment and mineral interests, net 1,926,158 1,896,811 Non-current deferred income taxes 24,427 36,589 Reclamation insurance asset — 13,695 Other non-current assets and deferred charges 3,638   2,783   Total assets $ 2,270,810   $ 2,221,925             LIABILITIES         Current liabilities: Accounts payable and accrued liabilities $ 57,702 $ 51,277 Accrued payroll and related benefits 23,712 27,563 Accrued taxes 4,344 8,915 Current portion of capital leases 7,761 8,735 Current portion of debt 1,852 2,721 Other current liabilities 10,290 6,884 Current portion of accrued reclamation and closure costs 24,127   20,989   Total current liabilities 129,788 127,084 Capital leases 7,316 8,841 Accrued reclamation and closure costs 73,019 74,549 Long-term debt 500,354 500,199 Non-current deferred tax liability 127,413 119,623 Non-current pension liability 47,880 46,513 Other non-current liabilities 5,362   6,190   Total liabilities 891,132   882,999             SHAREHOLDERS’ EQUITY         Preferred stock 39 39 Common stock 97,207 95,219 Capital surplus 1,538,148 1,519,598 Accumulated deficit (211,258 ) (232,565 ) Accumulated other comprehensive loss (30,327 ) (32,631 ) Treasury stock (14,131 ) (10,734 ) Total shareholders’ equity 1,379,678   1,338,926   Total liabilities and shareholders’ equity $ 2,270,810   $ 2,221,925   Common shares outstanding 385,067   378,113     HECLA MINING COMPANY

Condensed Consolidated Statements of Cash Flows

(dollars in thousands - unaudited)

    Six Months Ended     June 30, 2016   June 30, 2015 OPERATING ACTIVITIES         Net income (loss) $ 23,498   $ (14,115 ) Non-cash elements included in net income (loss): Depreciation, depletion and amortization 56,968 52,966 Unrealized (gain)/loss on investments (439 ) 3,043 Loss (gain) on disposition of properties, plants, equipment and mineral interests (311 ) 190 Provision for reclamation and closure costs 2,005 10,256 Stock compensation 3,467 2,261 Deferred income taxes 10,652 (705 ) Amortization of loan origination fees 926 910 Loss (gain) on derivative contracts 5,419 7,812 Foreign exchange gain 9,721 (9,672 ) Other non-cash charges, net 17 25 Change in assets and liabilities: Accounts receivable (15,910 ) 2,469 Inventories (5,802 ) (3,417 ) Other current and non-current assets 268 (3,904 ) Accounts payable and accrued liabilities (3,820 ) (4,210 ) Accrued payroll and related benefits 3,135 803 Accrued taxes (4,591 ) (1,938 ) Accrued reclamation and closure costs and other non-current liabilities 935     9,399   Cash provided by operating activities 86,138     52,173             INVESTING ACTIVITIES         Additions to properties, plants, equipment and mineral interests (76,960 ) (58,272 ) Acquisition of Revett, net of cash acquired — (809 ) Proceeds from sale of investments — — Proceeds from disposition of properties, plants and equipment 317 153 Purchases of investments (16,088 ) (947 ) Changes in restricted cash and investment balances (3,900 ) — Maturities of investments 840     —   Net cash used in investing activities (95,791 )   (59,875 )           FINANCING ACTIVITIES         Proceeds from issue of stock, net of related costs 8,121 — Acquisition of treasury shares (3,384 ) (941 ) Dividends paid to common shareholders (1,914 ) (1,850 ) Dividends paid to preferred shareholders (276 ) (276 ) Credit availability and debt issuance fees paid (83 ) (123 ) Repayments of debt (1,339 ) — Repayments of capital leases (4,356 )   (4,940 ) Net cash used in financing activities (3,231 )   (8,130 ) Effect of exchange rates on cash 1,288 (2,259 ) Net decrease in cash and cash equivalents (11,596 ) (18,091 ) Cash and cash equivalents at beginning of period 155,209     209,665   Cash and cash equivalents at end of period $ 143,613     $ 191,574     HECLA MINING COMPANY

Metal Prices

      Three Months Ended   Six Months Ended   June 30, 2016   June 30, 2015   June 30, 2016   June 30, 2015 AVERAGE METAL PRICES               Silver - London PM Fix ($/oz) $ 16.78   $ 16.41   $ 15.81   $ 16.56 Realized price per ounce $ 17.26 $ 16.32 $ 16.15 $ 16.83 Gold - London PM Fix ($/oz) $ 1,259 $ 1,193 $ 1,220 $ 1,206 Realized price per ounce $ 1,254 $ 1,194 $ 1,226 $ 1,208 Lead - LME Cash ($/pound) $ 0.78 $ 0.88 $ 0.79 $ 0.85 Realized price per pound $ 0.79 $ 0.94 $ 0.79 $ 0.89 Zinc - LME Cash ($/pound) $ 0.87 $ 1.00 $ 0.82 $ 0.97 Realized price per pound $ 0.89 $ 0.96 $ 0.83 $ 0.95  

Production Data

    Three Months Ended   Six Months Ended     June 30, 2016   June 30, 2015   June 30, 2016   June 30, 2015 GREENS CREEK UNIT                 Tons of ore milled 203,388   199,694   408,356   395,163 Mining cost per ton $ 71.01 $ 73.60 $ 68.98 $ 73.64 Milling cost per ton $ 30.67 $ 30.31 $ 30.83 $ 29.53 Ore grade milled - Silver (oz./ton) 13.25 12.33 14.22 13.05 Ore grade milled - Gold (oz./ton) 0.088 0.106 0.098 0.112 Ore grade milled - Lead (%) 3.20 3.36 3.12 3.31 Ore grade milled - Zinc (%) 8.70 8.93 8.42 8.64 Silver produced (oz.) 2,117,084 1,856,125 4,575,360 3,892,091 Gold produced (oz.) 11,528 13,753 27,509 28,992 Lead produced (tons) 5,346 5,393 10,433 10,323 Zinc produced (tons) 15,575 15,462 30,186 29,382 Total cash cost, net of by-product credits, per silver ounce (1) $ 5.38 $ 3.30 $ 4.61 $ 3.27 Capital additions (in thousands)   $ 14,661     $ 12,056   $ 21,037     $ 18,400 LUCKY FRIDAY UNIT                 Tons of ore processed 67,829 72,059 141,850 146,304 Mining cost per ton $ 100.77 $ 99.14 $ 99.34 $

91.80

Milling cost per ton $ 24.97 $ 20.53 $ 24.13 $ 20.40 Ore grade milled - Silver (oz./ton) 13.09 8.98 13.39 10.38 Ore grade milled - Lead (%) 7.76 6.10 8.07 6.56 Ore grade milled - Zinc (%) 4.02 3.10 4.00 3.14 Silver produced (oz.) 857,543 613,474 1,834,627 1,450,193 Lead produced (tons) 5,045 4,132 10,996 9,080 Zinc produced (tons) 2,557 2,053 5,310 4,220 Total cash cost, net of by-product credits, per silver ounce (1) $ 9.94 $ 12.58 $ 9.47 10.55 Capital additions (in thousands) $ 10,227 $ 11,352 $ 22,493 $ 25,060   Three Months Ended   Six Months Ended     June 30, 2016   June 30, 2015   June 30, 2016   June 30, 2015 CASA BERARDI UNIT                 Tons of ore processed 218.226 219,002 435,188 407,097 Mining cost per ton $ 91.56 $ 95.88 $ 89.55 $ 100.33 Milling cost per ton $ 19.82 $ 18.95 $ 19.36 $ 20.33 Ore grade milled - Gold (oz./ton) 0.217 0.165 0.19 0.16 Ore grade milled - Silver (oz./ton) 0.04 0.04 0.04 0.04 Gold produced (oz.) 41,955 30,939 72,333 56,350 Total cash cost, net of by-product credits, per gold ounce (1) $ 601 $ 832 $ 676 $ 896 Capital additions (in thousands)   $ 17,171     $ 8,601   $ 32,782     $ 16,198 SAN SEBASTIAN                 Tons of ore processed 37,400 — 68,558 — Mining cost per ton $ 91.89 $ — $ 97.27 $ — Milling cost per ton $ 69.35 $ — $ 69.48 $ — Ore grade milled - Silver (oz./ton) 35.83 — 38.3 — Ore grade milled - Gold (oz./ton) 0.269 — 0.294 — Silver produced (oz.) 1,258,103 — 2,458,442 — Gold produced (oz.) 9,482 — 18,811 — Total cash cost, net of by-product credits, per silver ounce (1) $ (3.05 ) $ — $ (3.15 ) $ — Capital additions (in thousands) $ 203   $ —   $ 693   $ —

(1) Cash cost, after by-product credits, per ounce represents a non-U.S. Generally Accepted Accounting Principles (GAAP) measurement. 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 is gold, with a by-product credit for the value of silver production.

Non-GAAP Measures(Unaudited)

Reconciliation of Generally Accepted Accounting Principles (GAAP) measure to Cash Cost, Before By-product Credits, per Ounce and Cash Cost, After By-product Credits, per Ounce

This release contains references to a non-GAAP measure of cash cost, before by-product credits, per ounce and cash cost, after by-product credits, per ounce. Cash cost, before by-product credits, per ounce and cash cost, after by-product credits, per ounce represent non-U.S. Generally Accepted Accounting Principles (GAAP) measurements that the Company believes provide management and investors an indication of net cash flow. Management also uses this measurement for the comparative monitoring of performance of mining operations period-to-period from a cash flow perspective. Cash cost, before by-product credits, per ounce and Cash cost, after by-product credits, per ounce are measures developed by gold companies and used by silver companies in an effort to provide a comparable standard; however, there can be no assurance that our reporting of these non-GAAP measures is similar to those reported by other mining companies. Cost of sales and other direct production costs and depreciation, depletion and amortization are the most comparable financial measures calculated in accordance with GAAP to cash cost, before by-product credits cash cost, after by-product credits.

As depicted in the Greens Creek, Lucky Friday, and San Sebastian Unit tables below, by-product credits comprise an essential element of our silver unit cost structure. By-product credits constitute an important competitive distinction for our silver operations due to the polymetallic nature of their orebodies. By-product credits included in our presentation of cash cost, after by-product credits, per silver ounce include:

In thousands (except per ounce amounts)   Total, Greens Creek, Lucky Friday and San Sebastian Three Months EndedJune 30,   Six Months EndedJune 30, 2016   2015 2016   2015 By-product value, all silver properties:     Zinc $ 22,618 $ 25,224 $ 41,435 $ 46,914 Gold 23,794 13,487 51,250 28,995 Lead 14,165 14,472 29,222 28,365 Total by-product credits $ 60,577 $ 53,183 $ 121,907 $ 104,274   By-product credits per silver ounce, all silver properties Zinc $ 5.34 $ 10.22 $ 4.67 $ 8.78 Gold 5.62 5.46 5.78 5.43 Lead 3.35 5.86 3.30 5.31 Total by-product credits $ 14.31 $ 21.54 $ 13.75 $ 19.52

By-product credits included in our presentation of Cash Cost, After By-product Credits, per Gold Ounce for our Casa Berardi Unit include:

In thousands (except per ounce amounts)   Casa Berardi Unit Three Months EndedJune 30,   Six Months EndedJune 30, 2016   2015 2016   2015 Silver by-product value $ 144   $ 123 $ 247   $ 220 Silver by-product credits per gold ounce $ 3.41 $ 3.96 $ 3.41 $ 3.90

The following tables calculates cash cost, before by-product credits, per Silver ounce and cash cost, after by-product credits, per Silver ounce (in thousands, except ounce and per ounce amounts):

In thousands (except per ounce amounts)   Total, Greens Creek, Lucky Friday and San Sebastian Three Months EndedJune 30,   Six Months EndedJune 30, 2016   2015 2016   2015 Cost of sales and other direct production costs and depreciation, depletion and amortization (GAAP) $ 71,667 $ 57,965 $ 142,702 $ 126,012 Depreciation, depletion and amortization (16,300 ) (16,451 ) (33,674 ) (33,063 ) Treatment costs 20,527 19,305 41,912 39,226 Change in product inventory 2,122 6,119 4,081 401 Reclamation and other costs (1,369 ) 96   (2,395 ) (296 ) Cash Cost, Before By-product Credits (1) 76,647 67,034 152,626 132,280 By-product credits (60,577 ) (53,183 ) (121,907 ) (104,273 ) Cash Cost, After By-product Credits $ 16,070   $ 13,851   $ 30,719   $ 28,007   Divided by silver ounces produced 4,233 2,469 8,868 5,342 Cash Cost, Before By-product Credits, per Silver Ounce $ 18.11 $ 27.15 $ 17.21 $ 24.76 By-product credits per Silver Ounce $ (14.31 ) $ (21.54 ) $ (13.75 ) $ (19.52 ) Cash Cost, After By-product Credits, per Silver Ounce $ 3.80   $ 5.61   $ 3.46   $ 5.24     In thousands (except per ounce amounts) Greens Creek Unit Three Months EndedJune 30,   Six Months EndedJune 30, 2016   2015 2016   2015 Cost of sales and other direct production costs and depreciation, depletion and amortization (GAAP) $ 43,734 $ 42,815 $ 88,587 $ 94,522 Depreciation, depletion and amortization (12,413 ) (13,775 ) (26,014 ) (27,521 ) Treatment costs 15,317 15,639 30,955 30,872 Change in product inventory 2,684 4,775 4,324 (919 ) Reclamation and other costs (169 ) 86   (566 ) (301 ) Cash Cost, Before by-Product Credits (1) 49,153 49,540 97,286 96,653 By-product credits (37,773 ) (43,409 ) (76,181 ) (83,940 ) Cash Cost, After By-product Credits $ 11,380   $ 6,131   $ 21,105   $ 12,713   Divided by silver ounces produced 2,117 1,856 4,575 3,892 Cash Cost, Before By-product Credits, per Silver Ounce $ 23.22 $ 26.69 $ 21.26 $ 24.84 By-product credits per Silver Ounce $ (17.84 ) $ (23.39 ) $ (16.65 ) $ (21.57 ) Cash Cost, After By-product Credits, per Silver Ounce $ 5.38   $ 3.30   $ 4.61   $ 3.27     In thousands (except per ounce amounts) Lucky Friday Unit Three Months EndedJune 30,   Six Months EndedJune 30, 2016   2015 2016   2015 Cost of sales and other direct production costs and depreciation, depletion and amortization (GAAP) $ 18,708 $ 15,150 $ 37,212 $ 31,490 Depreciation, depletion and amortization (2,825 ) (2,676 ) (5,829 ) (5,542 ) Treatment costs 4,778 3,666 10,112 8,354 Change in product inventory (1,035 ) 1,344 (1,056 ) 1,320 Reclamation and other costs (221 ) 10   (386 ) 5   Cash Cost, Before By-product Credits (1) 19,405 17,494 40,053 35,627 By-product credits (10,880 ) (9,774 ) (22,686 ) (20,333 ) Cash Cost, After By-product Credits $ 8,525   $ 7,720   $ 17,367   $ 15,294   Divided by silver ounces produced 858 613 1,835 1,450 Cash Cost, Before By-product Credits, per Silver Ounce $ 22.63 $ 28.51 $ 21.84 $ 24.57 By-product credits per silver ounce $ (12.69 ) $ (15.93 ) $ (12.37 ) $ (14.02 ) Cash Cost, After By-product Credits, per Silver Ounce $ 9.94   $ 12.58   $ 9.47   $ 10.55     In thousands (except per ounce amounts) San Sebastian Unit Three Months EndedJune 30,   Six Months EndedJune 30,

2016

  2015

2016

  2015 Cost of sales and other direct production costs and depreciation, depletion and amortization (GAAP) $ 9,225 $ — $ 16,903 $ — Depreciation, depletion and amortization (1,062 ) — (1,831 ) — Treatment costs 432 — 845 — Change in product inventory 473 — 813 — Reclamation and other costs (979 ) — (1,443 ) — Cash Cost, Before By-product Credits (1) 8,089 $ — 15,287 $ — By-product credits (11,924 ) — (23,040 ) — Cash Cost, After By-product Credits $ (3,835 ) — $ (7,753 ) — Divided by silver ounces produced 1,258 — 2,458 — Cash Cost, Before By-product Credits, per Silver Ounce $ 6.43 $ — $ 6.22 $ — By-product credits per silver ounce $ (9.48 ) $ —   $ (9.37 ) $ — Cash Cost, After By-product Credits, per Silver Ounce $ (3.05 ) $ —   $ (3.15 ) $ —

The following table calculates cash cost, before by-product credits, per gold ounce and cash cost, after by-product credits, per Gold ounce (in thousands, except ounce and per ounce amounts):

In thousands (except per ounce amounts)   Casa Berardi Unit Three Months EndedJune 30,   Six Months EndedJune 30, 2016   2015 2016   2015 Cost of sales and other direct production costs and depreciation, depletion and amortization (GAAP) $ 41,183 $ 36,769 $ 70,343 $ 67,940 Depreciation, depletion and amortization (13,597 ) (10,714 ) (22,098 ) (19,357 ) Treatment costs 238 144 409 297 Change in product inventory (2,366 ) (206 ) 752 2,066 Reclamation and other costs (116 ) (117 ) (228 ) (235 ) Cash Cost, Before By-product Credits (1) 25,342 25,876 49,178 50,711 By-product credits (144 ) (123 ) (247 ) (220 ) Cash Cost, After by-product credits $ 25,198   $ 25,753   $ 48,931   $ 50,491   Divided by gold ounces produced 41,955 30,939 72,333 56,350 Cash Cost, Before By-product Credits, per Gold Ounce $ 604.01 $ 836.36 $ 679.38 $ 899.93 By-product credits per gold ounce $ (3.41 ) $ (3.96 ) $ (3.41 ) $ (3.90 ) Cash Cost, After By-product Credits, per Gold Ounce $ 600.60   $ 832.40   $ 675.97   $ 896.03     In thousands Total, All Locations Three Months EndedJune 30,   Six Months EndedJune 30, 2016   2015 2016   2015   Cost of sales and other direct production costs and depreciation, depletion and amortization (GAAP) $ 112,851 $ 94,733 $ 213,045 $ 193,952 Depreciation, depletion and amortization (29,897 ) (27,166 ) (55,772 ) (52,420 ) Treatment costs 20,765 19,449 42,321 39,523 By-product credits (60,721 ) (53,306 ) (122,154 ) (104,493 ) Change in product inventory (244 ) 5,913 4,833 2,467 Reclamation and other costs (1,486 ) (19 )   (2,623 )   (531 ) Cash Cost, After By-product Credits $ 41,268   $ 39,604     $ 79,650     $ 78,498  

(1) Includes 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 and marketing expense, on-site general and administrative costs, royalties and mining production taxes, before by-product revenues earned from all metals other than the primary metal produced at each unit.

Reconciliation of Net Loss Applicable to Common Shareholders (GAAP) to Adjusted Net Income (Loss) Applicable to Common Stockholders

This release refers to a non-GAAP measure of adjusted net income (loss) applicable to common stockholders and adjusted net income (loss) per share, which are indicators of our performance. They exclude certain impacts which are of a nature which we believe are not reflective of our underlying performance. Management believes that adjusted net income (loss) per common share provides investors with the ability to better evaluate our underlying operating performance.

Dollars are in thousands (except per share amounts)   Three Months Ended June 30,   Six Months Ended June 30, 2016   2015   2016   2015 Net income (loss) applicable to common shareholders (GAAP) $ 23,978   $ (26,805 )   $ 23,222   $ (14,391 ) Adjusting items: Losses (gains) on derivatives contracts 6 887 6 (4,905 ) Provisional price (gains) losses (1,011 ) 601 (1,517 ) (1,524 ) Environmental accruals 662 8,700 662 8,700 Foreign exchange loss (gain) 1,885 1,833 10,088 (10,441 ) Acquisition costs 402 2,147 402 2,147 Income tax effect of above adjustments (24 ) (4,934 ) 179   (1,767 ) Adjusted net income (loss) applicable to common shareholders $ 25,898   $ (17,571 ) $ 33,042   $ (22,181 ) Weighted average shares - basic 383,790 371,295 381,389 370,042 Weighted average shares - diluted 387,512 371,295 384,685 370,042 Basic adjusted net income (loss) per common share $ 0.07 $ (0.05 ) $ 0.09 $ (0.06 ) Diluted adjusted net income (loss) per common share $ 0.07 $ (0.05 ) $ 0.09 $ (0.06 )

Reconciliation of Net Loss (GAAP) to Adjusted EBITDA

This release refers to a non-GAAP measure of adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), which is a measure of our operating performance. Adjusted EBITDA is calculated as net income before the following items: interest expense, income tax provision, depreciation, depletion, and amortization expense, exploration expense, pre-development expense, Aurizon acquisition costs, Lucky Friday suspension-related costs, interest and other income (expense), foreign exchange gains and losses, gains and losses on derivative contracts, unrealized gains on investments, provisions for environmental matters, stock-based compensation, and provisional price gains and losses . Management believes that, when presented in conjunction with comparable GAAP measures, Adjusted EBITDA is useful to investors in evaluating our operating performance. The following table reconciles net loss to Adjusted EBITDA:

Dollars are in thousands   Three Months Ended   Six Months Ended June 30, 2016   June 30, 2015   June 30, 2016   June 30, 2015 Net income (loss) $ 24,116   $ (26,667 )   $ 23,498   $ (14,115 ) Plus: Interest expense, net of amount capitalized 5,370 6,541 11,081 12,733 Plus/(Less): Income taxes 11,496 (132 ) 13,150 1,307 Plus: Depreciation, depletion and amortization 29,897 27,166 55,772 52,420 Plus: Exploration expense 3,362 4,592 6,312 9,208 Plus: Pre-development expense 521 1,618 925 2,138 Foreign exchange loss (gain) 1,885 1,833 10,088 (10,441 ) Plus: Acquisition costs 402 2,147 402 2,147 Plus: Stock-based compensation 2,042 1,201 3,214 2,261 Plus/(Less): Losses (gains) on derivative contracts 6 887 6 (4,905 ) Plus: Provisional price (gain) loss (1,011 ) 601 (1,517 ) (1,524 ) Plus: Provision for closed operations and environmental matters 1,006 9,478 2,005 10,256 Other (1,263 ) 248   (640 ) 3,053   Adjusted EBITDA $ 77,829   $ 29,513   $ 124,296   $ 64,538     Table A - Assay Results - Q2 2016 San Sebastian (Mexico)   Zone   Drill Hole Number   Sample From (ft)   Sample To (ft)   Width (feet)   True Width (feet)   Gold (oz/ton)   Silver (oz/ton) West Francine Vein   SS-1040   337.80   342.30   4.5   3.5   0.05   13.37 West Francine Vein   SS-1049   411.6   418.0   6.4   4.9   0.11   0.31 Middle Vein   SS-1054   58.5   60.8   2.3   2.2   0.02   7.54 Middle Vein   SS-1062   159.0   167.1   8.1   7.2   0.05   9.74 Middle Vein   SS-1064   128.0   133.5   5.6   5.5   0.19   2.96 Middle Vein   SS-1071   114.6   115.4   0.8   1.8   0.48   2.65 Middle Vein   SS-1077   58.1   62.2   4.1   4.1   0.22   2.70 Middle Vein   SS-1085   46.1   55.9   9.8   9.8   0.12   9.33 Middle Vein   SS-1088   35.5   39.8   4.3   4.3   0.26   26.69 Middle Vein   SS-1091   60.7   62.8   2.1   2.1   0.02   3.62 Middle Vein   SS-1103   459.70   468.2   8.5   7.8   0.68   65.05 Middle Vein   SS-1114   441.79   448.4   6.6   6.1   0.28   57.70  

Casa Berardi (Quebec)

  Zone   Drill Hole Number   Drill Hole Section   Drill Hole Azm/Dip   Sample From   Sample To   True Width (feet)   Gold

(oz/ton)

  Depth From Mine Surface (feet) 118-06   CBP-0530-314   12281 E   16/-37   262.5   288.7   20.3   0.29   -1934.5 118-06   CBP-0530-313   12221 E   324/-24   221.5   252.0   26.6   0.44   -1863.0 118-63   CBP-0530-320   12350 E   154/28   421.9   426.5   3.9   0.20   -1590.7 Lower-Inter Upper (118-64)   CBP-0530-319   12339 E   154/15   226.4   249.3   21.3   0.16   -1652.2 121   CBP-0790-114   12145 E   141/3   54.1   101.7   20.0   0.23   -2522.9 121   CBP-0790-115   12139 E   141/36   36.7   80.1   39.0   0.22   -2489.6 121   CBP-0790-117   12154 E   141/-19   126.0   147.6   21.7   0.24   -2572.1 121   CBP-0790-116   12132 E   143/75   37.1   45.9   8.9   0.56   -2478.6 121   CBP-0790-118   12129 E   141/90   43.0   65.6   22.6   0.23   -2460.5 123-02   CBP-0870-053   12330 E   172/-1   226.0   232.6   6.6   0.27   -2850.8 123-03   CBP-0870-054   12324 E   172/9   110.2   123.7   12.8   0.21   -2829.4 123-03   CBP-0870-055   12269 E   198/-25   54.1   74.5   18.0   0.19   -2878.4 123-04   CBP-0870-054   12327 E   172/9   228.0   244.4   16.1   0.53   -2808.3 123-04   CBP-0870-052   12329 E   172/-12   249.3   258.5   8.9   0.92   -2894.2 123-05   CBP-0490-014   12494 E   180/-6   183.1   217.5   30.5   0.22   -1619.6 123-05   CBP-0490-015   12495 E   180/8   167.3   199.1   29.2   0.17   -1574.3 123-05   CBP-0490-012   12480 E   180/2   149.3   200.1   50.2   0.31   -1591.9 123-05   CBP-0490-011   12481 E   180/-11   169.6   191.9   22.3   0.22   -1632.5 123-05   CBP-0490-013   12481 E   180/18   146.0   184.4   37.1   0.25   -1549.5 123-05   CBP-0490-041   12480 E   181/33   144.4   190.3   42.3   0.24   -1507.2 124-13   CBP-0210-019   12649 E   204/12   383.9   404.2   15.1   0.97   -572.2 124-13   CBP-0210-020   12678 E   189/6   364.2   384.5   20.3   0.70   -608.7 124-22   CBP-0530-318   12352 E   154/40   527.6   553.1   24.9   0.41   -1391.1 124-22   CBP-0250-085   12466 E   23/5   120.7   125.3   4.3   1.02   -800.4 124-22   CBP-0250-086   12468 E   24/51   190.0   194.2   3.0   1.03   -663.1 124-30   CBP-0290-281   12779 E   168/-7   225.4   231.0   5.2   0.49   -947.7 124-30   CBP-0290-295   12734 E   180/-21   380.6   394.7   13.5   0.20   -1061.0 124-30   CBP-0290-283   12717 E   180/-17   311.7   329.7   17.4   0.21   -1005.6 124-85   CBP-0330-028   12515 E   134/-38   262.8   274.3   7.9   0.31   -1198.6 104   CBW-1086   10380 E   325/-75   1031.8   1133.9   102.0   0.05   -2831.4 104   CBW-1085   10381 E   325/-64   766.7   805.0   33.5   0.04   -1870.1 LOWER INTER   CBW-0300-042   10737 E   0/-37   564.3   574.1   9.8   0.94   -1313.1 LOWER INTER   CBW-0300-039   10775 E   358/-45   564.6   587.9   21.7   1.27   -1383.0 LOWER INTER   CBW-0300-044   10751 E   360/-38   565.0   587.3   17.4   0.95   -1349.2 LOWER INTER   CBW-1085   10381 E   325/-64   629.9   639.8   9.5   0.10   -1731.6 134 (Surface)   CBS-16-676   10069 E   360/-50   311.7   354.3   31.5   0.06   26996.2 134 (Surface)   CBS-16-674   10112 E   360/-46   137.8   189.0   45.3   0.03   27146.0 134 (Surface)   CBS-16-671   10136 E   360/-54   626.3   651.6   22.1   0.18   27518.1 134 (Surface)   CBS-16-676   10053 E   360/-50   221.1   284.4   49.2   0.09   26996.6 134 (Surface)   CBS-16-675   10097 E   360/-48   433.1   471.1   36.1   0.02   27146.0 134 (Surface)   CBS-16-675   10109 E   360/-48   473.8   541.3   49.2   0.04   27145.9 134 (Surface)   CBS-16-671   10120 E   360/-54   538.1   595.5   47.6   0.05   27516.1  

Greens Creek (Alaska)

  Zone   Drill Hole Number   Drillhole Azm/Dip   Sample From   Sample To   True Width (feet)   Silver

(oz/ton)

  Gold (oz/ton)   Zinc (%)   Lead (%)   Depth From Mine Portal (feet) 9A Exploration   GC4267   063/32   432.20   479.00   17.5   20.43   0.09   16.24   5.21   185             482.50   488.00   2.1   14.09   0.06   13.57   5.90   198     GC4273   081/29   501.00   508.00   2.5   17.79   0.01   13.24   4.38   183             513.00   516.00   1.7   12.39   0.02   22.64   9.20   189             519.00   525.50   2.4   24.08   0.02   37.77   10.00   192             535.70   540.00   1.1   11.01   0.01   8.96   3.68   201             559.00   563.70   3.4   16.10   0.01   6.24   2.28   213 9A Definition   GC4297   071/27   462.00   465.50   2.0   15.68   0.04   7.76   2.71   154     GC4302   071/32   455.20   459.00   3.3   10.54   0.05   18.01   3.76   183     GC4305   071/37   511.50   531.70   15.6   15.14   0.08   11.04   4.11   253     GC4317   063/26   374.50   383.50   7.9   10.60   0.03   13.22   7.21   109             409.20   418.00   8.2   16.12   0.03   10.61   3.06   124     GC4320   063/18   420.00   425.00   4.3   12.96   0.00   3.01   1.55   71     GC4323   063/24   338.80   346.50   2.5   16.80   0.02   12.99   6.91   78             371.10   376.80   2.5   15.46   0.03   4.86   2.19   90 East Definition   GC4323   063/24   788.20   818.20   7.5   35.20   0.41   7.77   2.82   243             828.20   830.30   1.0   136.91   0.14   13.29   4.30   255     GC4328   063/18   806.60   813.00   2.6   12.13   0.05   8.42   2.42   195             818.00   823.00   1.6   13.86   0.01   5.57   0.76   200 D200S Definition   GC4269   063/-86   610.50   612.50   1.7   12.89   0.22   0.56   0.23   -1893             618.00   628.00   8.3   21.06   0.18   1.84   0.89   -1900             733.90   748.30   5.9   29.99   0.90   12.03   6.04   -2012     GC4271   063/-77   339.50   344.00   4.0   10.70   0.08   0.55   0.30   -1607     GC4272   063/-69   430.80   433.70   2.9   12.81   0.09   1.23   0.64   -1680             575.50   587.00   8.9   20.17   0.04   3.03   1.54   -1821     GC4279   243/-84   253.90   256.10   2.2   18.41   0.05   1.54   0.89   -1527     GC4286   243/-51   200.90   203.90   3.0   38.40   0.05   3.31   1.73   -1431             324.00   337.60   10.1   23.66   0.03   2.76   1.29   -1528     GC4303   063/-71   378.30   393.30   7.9   20.61   0.02   1.22   0.53   -1636             402.30   405.80   3.2   21.98   0.01   2.55   1.28   -1654     GC4306   063/-63   470.00   472.30   2.3   15.47   0.03   9.78   6.30   -1693     GC4311   243/-46   205.60   208.20   2.5   27.05   0.04   0.49   0.30   -1422     GC4316   243/-69   264.80   269.00   4.0   35.59   0.06   0.60   0.28   -1523 LNWW Definition   GC4280   063/-62   518.80   521.80   3.0   20.72   0.20   3.61   0.73   -635     GC4281   063/-32   502.00   508.60   6.5   8.23   0.14   9.59   3.21   -448     GC4285   063/-34   586.00  

592.50

  6.3   4.92   0.05   17.63   2.45   -527     GC4287   063/-50   574.20   577.10   2.8   6.23   0.02   18.82   3.37   -622     GC4304   063/-32   622.80   639.70   16.8   5.69   0.10   24.01   5.20   -554     GC4321   063/-50   343.00   347.20   4.1   5.75   0.04   12.61   4.58   -429             352.30   361.00   8.5   8.68   0.04   4.85   2.23   -438     GC4322   063/-72   465.70   469.80   3.9   5.76   0.04   14.95   2.51   -608     GC4324   063/-40   381.80   384.10   2.3   21.41   0.06   4.52   2.43   -416             388.60   390.60   2.0   10.09   0.26   4.01   2.01   -421     GC4326   040/-64   346.00   356.70   10.2   76.40   0.17   19.90   4.38   -465     GC4327   021/-74   332.00   346.60   14.5   56.07   0.13   3.29   0.81   -469

View source version on businesswire.com: http://www.businesswire.com/news/home/20160804005371/en/

Hecla Mining CompanyVice President – Investor RelationsMike Westerlund, 800-HECLA91 (800-432-5291)hmc-info@hecla-mining.comhttp://www.hecla-mining.com