Strong operating results and free cash flow
generation; Lucky Friday reaches tentative agreement
For The Period Ended: September 30, 2019 For
Release: November 7, 2019
Hecla Mining Company (NYSE:HL) today announced third quarter
financial and operating results including sales of $161.5 million,
net loss applicable to shareholders of $19.7 million, or $0.04 per
share, cash provided by operating activities of $54.9 million and
silver cost of sales and other direct production costs and
depreciation, depletion and amortization ("cost of sales") of $57.3
million.
HIGHLIGHTS
- Silver production of 3.3 million ounces and gold production of
77,311 ounces.
- Adjusted net loss applicable to common shareholders of $11.8
million, or $0.02 per share.1
- Adjusted EBITDA of $69.8 million.2
- Approximately 40% lower cash cost per silver ounce and all in
sustaining cost ("AISC") per silver ounce, in each case net of
by-product credits compared to the third quarter of 2018. 3,4
- Free cash flow of $28.8 million generated.6
- Cash and cash equivalents of $33.0 million, with a draw on the
revolving line of credit of $50 million, at September 30,
2019.
- A tentative labor agreement at Lucky Friday between the Company
and the union negotiating committees which is subject to member
ratification.
- Lucky Friday Mine received the Sentinels of Safety award from
the National Mining Association (NMA) for its stellar safety record
in 2018 as well as the Pollution Prevention Champion award from the
State of Idaho.
- Reaffirmed annual estimates for production, cost and
expenditure estimates.
"The third quarter performance, including our increased adjusted
EBITDA results, demonstrates significant progress toward our twin
financial goals of having no net revolver indebtedness at year end
and refinancing our senior notes," said Phillips S. Baker, Jr.,
President and CEO. "Our net revolver debt decreased by about $26
million, all from free cash flow, and our adjusted EBITDA of $70
million is about 50% more than the first and second quarter
combined. We expect the fourth quarter adjusted EBITDA to be
similar to the third quarter."
Mr. Baker continued, "At the Lucky Friday, a tentative labor
agreement has been reached with the union's negotiating committee
and is subject to member ratification. We expect the mine ramp-up
to full production to take about a year's time, which would be good
for the workforce, shareholders and the community. Also,
congratulations to the Lucky Friday for winning the Sentinels of
Safety, the highest safety award for mining in the US, as well as
Idaho's Pollution Prevention Champion Award."
FINANCIAL OVERVIEW
Third Quarter Ended
Nine Months Ended
HIGHLIGHTS
September 30, 2019
September 30, 2018
September 30, 2019
September 30, 2018
FINANCIAL DATA
Sales (000)
$161,532
$143,649
$448,321
$430,617
Gross profit (000)
$14,880
$6,576
($1,919
)
$80,364
Loss applicable to common shareholders
(000)
($19,654
)
($23,322
)
($91,995
)
($3,284
)
Basic and diluted loss per common
share
($0.04
)
($0.05
)
($0.19
)
($0.01
)
Net loss (000)
($19,516
)
($23,184
)
($91,581
)
($2,870
)
Cash provided by operating activities
(000)
$54,896
$28,192
$63,609
$75,210
Free cash flow (000)
$28,803
($11,789
)
($33,729
)
($8,075
)
Net loss applicable to common shareholders for the third quarter
was $19.7 million, or $0.04 per share, compared to net loss of
$23.3 million, or $0.05 per share, for the same period a year ago.
The difference was mainly due to the following items:
- Sales of $161.5 million were impacted by higher silver and gold
production and higher realized silver and gold prices.
- A decrease of $7.9 million in exploration and pre-development
expenditures over the third quarter of 2018 under the Company's
austerity program.
- Acquisition costs of $6.1 million in the third quarter
2018.
- Lower suspension-related costs at Lucky Friday by $2.8 million
due to increased production.
Operating cash flow was $54.9 million compared to $28.2 million
in the third quarter of 2018, with the increase due to higher
income, adjusted for non-cash items, and lower cash outflows for
working capital changes.
Adjusted EBITDA was $69.8 million compared to $64.4 million in
the third quarter of 2018.
Capital expenditures totaled $29.0 million for the third quarter
2019 compared to $40.7 million in the third quarter of 2018, with
the decrease mainly due to reduced spending at Nevada, Greens Creek
and Lucky Friday, partially offset by increased spending at Casa
Berardi. Expenditures at the operations were $2.5 million at Hecla
Nevada, $9.0 million at Greens Creek, $13.2 million at Casa Berardi
(includes $6.3 million for expansion of tailings dam capacity),
$2.7 million at Lucky Friday, and $1.5 million at San
Sebastian.
Metals Prices
The average realized silver price in the third quarter 2019 was
$18.18 per ounce, 24% higher than the $14.68 price realized in the
third quarter of 2018. The average realized gold price in the third
quarter was $1,475 per ounce, 22% higher than the prior year
period. Realized lead and zinc prices decreased by 2% and 14%,
respectively, from the third quarter of 2018.
Metals Forward Sales Contracts
The following table summarizes the quantities of metals
committed under financially settled forward sales contracts at
September 30, 2019:
Ounces/Pounds Under Contract
(in thousands)
Average Price per
Ounce/Pound
Silver
Gold
Zinc
Lead
Silver
Gold
Zinc
Lead
Contracts on forecasted sales
Forward contracts
2019 settlements
—
—
—
4,409
—
—
—
$
0.95
2020 settlements
—
—
—
4,960
—
—
—
$
0.96
The forward contracts represent 14% of the forecasted payable
lead production for the 36-month period ended September 30, 2022 at
an average price of $0.95 per pound.
Setting A Short-term Floor for Silver and Gold Prices
The Company purchased put option contracts in an amount
approximating the expected silver and gold sales through the second
quarter of 2020, setting an expected minimum average price of
between $1,400 and $1,450 per gold ounce and between $15.00 and
$16.00 per silver ounce. Put options set a floor on the price the
Company expects to receive on substantially all of its projected
near-term production while maintaining exposure to the upside,
excluding the transaction costs. This gives the Company confidence
in the minimum prices it expects to receive.
OPERATIONS OVERVIEW
The following table provides the production summary on a
consolidated basis for the third quarter and nine months ended
September 30, 2019 and 2018:
Third Quarter Ended
Nine Months Ended
September 30, 2019
September 30, 2018
September 30, 2019
September 30, 2018
PRODUCTION SUMMARY
Silver -
Ounces produced
3,251,350
2,523,691
9,193,246
7,654,118
Payable ounces sold
2,232,691
2,588,478
7,549,360
6,993,695
Gold -
Ounces produced
77,311
72,995
198,100
191,116
Payable ounces sold
69,760
68,568
189,823
183,050
Lead -
Tons produced
6,107
4,238
17,406
15,387
Payable tons sold
3,817
3,986
12,628
12,599
Zinc -
Tons produced
15,413
12,795
42,672
42,312
Payable tons sold
7,878
9,282
27,234
30,072
On a silver or gold equivalency basis, third quarter production
equates to 12.5 million ounces of silver equivalent or 144,629
ounces of gold equivalent, and for nine months 34.6 million ounces
of silver equivalent or 401,774 ounces of gold equivalent
production.
The following tables provide a summary of the final production,
cost of sales, cash cost, after by-product credits, per silver and
gold ounce, and AISC, after by-product credits, per silver and gold
ounce for the third quarter and nine months ended September 30,
2019:
Third Quarter Ended
Greens Creek
Lucky Friday
San Sebastian
Casa Berardi
Nevada Ops
Sept 30, 2019
Silver
Gold
Silver
Gold
Silver
Silver
Gold
Gold
Silver
Gold
Silver
Production (ounces)
3,251,350
77,311
2,544,018
13,684
115,682
541,636
4,699
36,547
6,637
22,381
43,377
Increase/ (decrease) over 2018
727,659
4,316
667,601
2,125
84,043
19,705
1,033
(7,434)
(2,922)
8,592
(40,768)
Cost of sales & other direct
production costs and depreciation, depletion and amortization
(000)
$57,335
$89,317
$40,475
—
$4,018
$12,842
—
$53,006
—
$36,311
—
Increase/ (decrease) over 2018
$(9,152)
$18,731
$(11,688)
—
$4,019
$(1,483)
—
$1,739
—
$16,992
—
Cash costs, after by-prod credits, per
silver or gold ounce 3,5
$2.34
$909
$2.05
—
—
$3.70
—
$966
—
$817
—
Increase/ (decrease) over 2018
$(1.78)
$106
$0.13
—
—
$(8.32)
—
$280
—
$(362)
—
AISC, after by-prod credits, per silver or
gold ounce 4
$8.89
$1,213
$6.05
—
—
$7.21
—
$1,348
—
$992
—
Increase/ (decrease) over 2018
$(6.79)
$70
$(3.15)
—
—
$(9.74)
—
$452
—
$(940)
—
Nine Months Ended
Greens Creek
Lucky Friday
San Sebastian
Casa Berardi
Nevada Ops
Sept 30, 2019
Silver
Gold
Silver
Gold
Silver
Silver
Gold
Gold
Silver
Gold
Silver
Production (ounces)
9,193,246
198,100
7,149,035
41,269
416,456
1,446,450
11,776
99,616
21,041
45,439
160,264
Increase/ (decrease) over 2018
1,539,128
6,984
1,359,595
2,873
260,441
(147,320)
(275)
(27,264)
(9,707)
31,650
76,119
Cost of sales and other direct production
costs and depreciation, depletion and amortization (000)
$187,724
$262,516
$140,237
—
$11,149
$36,338
—
$157,239
—
$105,277
—
Increase/ (decrease) over 2018
$8,940
$91,047
$(1,526)
—
$5,305
$5,161
—
$5,089
—
$85,958
—
Cash costs, after by-prod credits, per
silver or gold ounce 3,5
$2.70
$1,089
$1.67
—
—
$7.77
—
$1,055
—
$1,165
—
Increase/ (decrease) over 2018
$2.65
$287
$3.89
—
—
$(0.51)
—
$295
—
$(14)
—
AISC, after by-prod credits, per silver or
gold ounce 4
$9.70
$1,520
$5.28
—
—
$12.14
—
$1,373
—
$1,841
—
Increase/ (decrease) over 2018
$(1.01)
$425
$0.57
—
—
$(1.20)
—
$369
—
$(91)
—
Greens Creek Mine – Alaska
At the Greens Creek mine, 2.5 million ounces of silver and
13,684 ounces of gold were produced, compared to 1.9 million ounces
and 11,559 ounces, respectively, in the third quarter of 2018.
Higher silver production was a result of higher grades due to mine
sequencing. The mill operated at an average of 2,321 tons per day
(tpd) in the third quarter, a similar throughput as the third
quarter of 2018.
The cost of sales for the third quarter was $40.5 million, and
the cash cost, after by-product credits, per silver ounce, was
$2.05, compared to $52.2 million and $1.92, respectively, for the
third quarter of 2018.3 The AISC, after by-product credits, was
$6.05 per silver ounce for the third quarter compared to $9.20 in
the third quarter of 2018.4 The per ounce silver cash costs were
higher primarily due to lower base metals prices, while AISC was
lower due to lower capital spending.
In September 2019, the Company sold and received payment for two
parcels of concentrate, but weather delayed the vessel departing
until early October. A current deferred revenue liability of $20.1
million in proceeds was recognized.
Casa Berardi Mine - Quebec
At the Casa Berardi mine, 36,547 ounces of gold were produced,
including 6,080 ounces from the East Mine Crown Pillar (EMCP) pit;
compared to 43,981 ounces in the third quarter of 2018. The
decrease is primarily due to lower ore grades and mill recovery.
Gold production increased compared to the first two quarters of the
year with a pre-crush system being used to process the stockpile
left over from the lower throughput in the first half. Higher
grades and a further increase in production are projected in the
fourth quarter. The mill operated at an average of 3,667 tpd in the
third quarter, a decrease of 5% over the third quarter of 2018.
The cost of sales was $53.0 million and the cash cost, after
by-product credits, per gold ounce was $966, compared to $51.3
million and $686, respectively, in the prior year period.3,5 The
increase in cash cost, after by-product credits, per gold ounce is
due to lower gold production. The AISC, after by-product credits,
was $1,348 per gold ounce compared to $896 in the third quarter of
2018, primarily due to the lower gold production and planned higher
capital spending which included expansion of the tailings storage
capacity.4
San Sebastian Mine - Mexico
At the San Sebastian mine, 541,636 ounces of silver and 4,699
ounces of gold were produced, compared to 521,931 ounces and 3,666
ounces, respectively, in the third quarter of 2018. The higher
silver and gold production was expected as a result of increased
throughput. The Velardeña mill operated at an average of 492 tpd,
an increase of 14% over the third quarter of 2018.
The cost of sales was $12.8 million and the cash cost, after
by-product credits, was $3.70 per silver ounce, compared to $14.3
million and $12.02, respectively, in the third quarter of 2018.3
The AISC, after by-product credits, was $7.21 per silver ounce for
the third quarter compared to $16.95 in the third quarter of 2018,
principally due to the higher silver and gold production and higher
gold prices.4
A review of sulfide ore continues through 2019, including a bulk
sample to test the capabilities of the third-party plant and the
suitability of long-hole stoping for the ore body, with results
expected early in 2020. To date, about 20,000 tons of the planned
26,000-ton sample have been mined and results from the long-hole
stoping indicate better than modeled mining recovery and lower
dilution. About 13,000 tons have been processed at a third-party
mill and results suggest that mill recoveries are generally in line
with expectations.
Nevada Operations
For the Nevada Operations, 22,381 ounces of gold and 43,377
ounces of silver were produced, as compared to 13,789 ounces of
gold and 84,145 ounces of silver in the third quarter 2018. Hecla's
ownership of the operations commenced July 20, 2018.
The cost of sales was $36.3 million and the cash cost, after
by-product credits, was $817 per gold ounce, compared to $19.3
million and $1,179, respectively, in the third quarter of 2018.3,5
The AISC, after by-product credits, was $992 per gold ounce
compared to $1,932 in the third quarter of 2018, with the decrease
due to higher gold production and lower capital and exploration
spending.4 Mining was conducted on resources that have been exposed
by previous development, and increased spending is not anticipated
in the fourth quarter. Mining at Midas is expected to end in the
fourth quarter. Some surface exploration drilling and hydrology
studies have continued to provide information on the deposits to
aid future development programs.
Third-party ore processing arrangements are also being pursued
with the goal of reducing transportation and milling costs. This
could include facilities that can process ore that is considered
refractory.
Lucky Friday Mine - Idaho
At the Lucky Friday Mine, 115,682 ounces of silver were produced
by salaried workers, compared to 31,639 ounces in the third quarter
of 2018. The higher level of production helps defray costs
associated with the strike at Lucky Friday. Cost of sales was $4.0
million, with no amount reported for the third quarter of 2018 as
there were no concentrate shipments during that period.
The Remote Vein Miner (RVM) is fully fabricated, with testing at
EPIROC's test mine in Sweden underway and modifications ongoing.
Delivery to Lucky Friday is expected in 2020.
A tentative agreement has been reached between the Company and
the union negotiating committee which requires ratification by a
majority of union members. A ramp-up to full production is expected
to take about a year.
The mine earned the 2018 Sentinels of Safety award by the
National Mining Association, the highest safety honor for a mine in
the US, for the first time in its more than 60-year history of
operations by Hecla.
In addition, Lucky Friday was recently showcased by the Idaho
Department of Environmental Quality as an example of environmental
leadership for its efforts creating waste treatment facilities that
reduce the concentration of lead and zinc in the water released by
over 95% and a water recycling program that reduces the average
freshwater use by 95% in the concentrator plant.
EXPLORATION AND PRE-DEVELOPMENT
Exploration (including corporate development) expenses were $4.8
million, a decrease of $7.6 million compared to the third quarter
of 2018.
Casa Berardi - Quebec
Up to nine drills (7 underground and 2 surface) operated in the
East and West Mine areas with the goal of upgrading and expanding
resources in several promising areas and potentially extending the
underground mine production. Definition drilling was concentrated
on the 148, 152 and EMCP zones in the East Mine Area and the 119,
123 and 124 zones in the Principal Area. Exploration drilling was
focused on the western extension of the 118 Zone and the
down-plunge extensions of the 128 Zone in the Principal Mine area
as well as the down-plunge extensions of the 148 and the 152 zones
in the East Mine. Two drills on surface completed definition and
exploration drilling at the 128 Zone east of and at depth of the
Principal Pit area, below the 160 Pit to define the 157 Zone
resources, and along strike of the 160 Zone open pit.
The East Mine has a history of high-grade mine production
and given that access has been re-established in the area,
underground drilling confirmed and expanded a series of high-grade
lenses from the 148 to 160 zones. Definition and
exploration drilling results from the East Mine were previously
reported in the press release "Hecla Expands High-Grade at Casa
Berardi's East Mine" dated November 5, 2019. Results from
this drilling continue to show high grades over substantial widths.
The most successful drilling included 0.45 oz/ton gold over 16.1
feet, 0.65 oz/ton gold over 22.3 feet including 1.05 oz/ton gold
over 12.8 feet, 0.63 oz/ton gold over 26.6 feet including 1.12
oz/ton gold over 13.4 feet, 0.78 oz/ton gold over 15.2 feet and
1.03 oz/ton gold over 14.7 feet. Drilling also shows that the
high-grade mineralization on the 148-08 lens extends both to the
surface and west of the known EMCP pit lenses and includes
intersections of 0.03 oz/ton gold over 64 feet and 0.06 oz/ton gold
over 48.5 feet. Drilling continues at the East Mine and results
show high-grades and the presence of visible gold in many of the
drill holes with pending assays, and these high-grade lenses are
open at depth down-plunge. Results received to date could have a
significant positive impact on 2020 as we work to accelerate the
modeling and mine planning of these high-grade zones.
West Mine definition drilling occurred in the 119, 123,
124 zones, and the West Mine Crown Pillar (WMCP) pit. In the lower
part of the 123 Zone, in-fill and step-out drilling from the
1010 and 1030-levels to the west shows the continuity of high-grade
mineralization down-plunge for over 400 feet and indicates the
mineralization remains open to the west and to depth. Recent
intersections include 0.33 oz/ton gold over 11.9 feet and 0.35
oz/ton gold over 32.0 feet. Higher in the mine, drilling of the
119 Zone from the 550-Level continues to define the eastern
extension of the 119-01 lens south the Casa Berardi Fault. Recent
assays include 0.14 oz/ton gold over 13.8 feet which extends the
119-01 lens over 160 feet to the east. Drilling in the 124
Zone shows the upward continuity of the 124-22 lens within the
Principal Mine, with recent results including 0.37 oz/ton gold over
11.5 feet. Drilling results in the WMCP pit show that the
high-grade mineralization extends to the surface and include
intersections of 0.04 oz/ton gold over 42.6 feet and 0.03 oz/ton
gold over 25.9 feet.
West Mine exploration drilling occurred in the 113, 118, and 128
zones during the quarter. Drilling in the 113 Zone from the
1010-level ramp in the West Mine has been completed and results
indicate that there is potential for resource gains within the 113
Zone; further drilling will be required to better define these
zones, especially on the North side of the Casa Berardi Fault.
Exploration drilling in the 118 Zone, testing the connection
between the 113 Zone and the 118 Zone, shows that the 118 Zone is
open to the West with recent drill intersections including 0.13
oz/ton gold over 7.9 feet and 0.16 oz/ton gold over 13.1 feet.
Drilling in the 128 Zone began in September and is focused
on the South Domain south of the Casa Berardi Fault to test the
eastern extension of the Upper Principal area mineralization.
A selection of third quarter assay results from Casa Berardi are
listed in Table 1.
San Sebastian - Mexico
There were up to three core drills operating at San Sebastian
focused on exploration definition drilling of the El Toro and El
Toro Hanging Wall veins and definition drilling on the Middle Vein.
This drilling added new mineralization and increased confidence to
the El Toro veins, potentially adding oxide mine life to San
Sebastian.
Discovered in late-2018, the El Toro Vein area is located
approximately 1.2 miles southwest of the San Sebastian mine
operation. Follow-up exploration drilling was conducted throughout
most of 2019, and to date mineralization has been identified over
5,000 feet of strike length on the El Toro Vein and over 1,600 feet
of strike length on the El Toro Hanging Wall Vein and up to 900
feet down-dip within both veins. Drilling results at El Toro and El
Toro Hanging Wall Veins during the third quarter continued to
return good grades over significant widths including 0.32 oz/ton
gold and 33.0 oz/ton silver over 6.8 feet, 0.38 oz/ton gold and
21.2 oz/ton silver over 6.6 feet and 0.13 oz/ton gold and 8.5
oz/ton silver over 17.2 feet.
Two definition drill holes were completed in the 100 Zone of the
Middle Vein and provided information for mine stope design in
advance of mining. Results include 22.5 oz/ton silver and 0.08
oz/ton gold over 5.0 feet and 7.5 oz/ton silver and 0.13 oz/ton
gold over 3.8 feet.
A selection of third quarter assay results from the El Toro, El
Toro Hanging Wall, and Middle Veins are listed in Table 1.
Greens Creek - Alaska
At Greens Creek, drilling continues to upgrade the East, NWW,
and 9A Ore zones resources. In the East Ore Zone, drill
intersections targeted the central portion of the resource and
confirmed mineralization. Strong assay results included 31.7 oz/ton
silver, 0.35 oz/ton gold, 9.9% zinc and 4.0% lead over 10.6 feet
and 114.4 oz/ton silver, 0.23 oz/ton gold, 4.9% zinc and 1.7% lead
over 2.4 feet.
Drilling in the NWW Zone focused on testing the 600 feet
of strike length. Recent assay results returned high-grade precious
and base metal mineralization including 29.5 oz/ton silver, 0.21
oz/ton gold, 10.0% zinc and 5.7% lead over 32.2 feet and 42.8
oz/ton silver, 0.20 oz/ton gold, 30.3% zinc and 21.1% lead over 8.7
feet. Results received for the Northwest West Zone should upgrade
the lower portion of model and extended a limb of mineralization at
depth in the central portion of the zone.
Drilling in the 9A Zone targeted the northern and
southern extents of the zone. Results included 17.5 oz/ton silver,
0.16 oz/ton gold, 18.2% zinc and 4.0% lead over 7.6 feet and 13.6
oz/ton silver, 0.03 oz/ton gold, 18.5% zinc and 10.1% lead over 3.6
feet. The 9A Zone is structurally complex and multiple drill holes
intersected mineralization across several bands.
A selection of third quarter assay results from Greens Creek are
listed in Table 1.
Nevada
Up to two drill rigs were used at Fire Creek to further evaluate
the potential of areas of Spiral 2, Spiral 3 and Spiral 9 for
near-term production and one surface drill rig was used to complete
two exploration drill holes in the Hatter Graben at Hollister.
At Fire Creek, drilling focused on: 1) the lower
extension of Spiral 2 mineralization, 2) expanding Spiral 2
resources up-dip in the Karen and Joyce zones, 3) testing the
southern portion of Spiral 9 mineralization, and 4) extensions of
Vein 20 in Spiral 2. High-grade intersections in the Spiral
2 area include 4.65 oz/ton gold over 2.8 feet in the Joyce
Splay, 1.06 oz/ton gold over 11.8 feet on the Vonnie vein, and 2.87
oz/ton gold over 1.2 feet on the Vonnie vein. Drilling in the upper
part of Spiral 2 focused on expanding the resources up-dip in the
Karen and Joyce zones. Assay results include 0.57 oz/ton gold over
6.3 feet and 0.43 oz/ton gold over 7.5 feet on Vein 31 and 1.07
oz/ton gold over 1.5 feet on Vein 20. Assay results from Spiral
4 drilling targeting mineralization down-dip of the northern
part of Spiral 4 encountered the best results to date in that area
with 2.37 oz/ton gold over 5.4 feet.
Two surface exploration drill holes were completed at the
Hatter Graben to test the eastern strike potential of the
veins, where they might have been offset to the north and along
strike of an historic vein intersected in drill hole H7-246 grading
1.13 oz/ton gold and 0.42 oz/ton silver over 3.4 feet. Geology of
these two drill holes show that the vein intersected in historic
drill hole H7-246 is not the offset extension of the Hatter Graben
vein system but rather a new and possibly parallel vein system
within the footwall of the Northern Boundary Fault.
Drill hole HSC-00007 intersected two narrow vein zones. The
first interval cut a weakly banded quartz vein yielding 0.45 oz/ton
gold and 1.0 oz/ton silver over 0.7 feet. The second interval cut
two parallel banded veins containing apparent cataclastic textures
yielded 0.16 oz/ton gold and 0.8 oz/ton silver over 1.3 feet. These
intervals are interpreted as being deeper in the epithermal system
and that the higher-grade zones are likely located up-dip and/or
along strike. Assays for HSC-00008 are pending.
A selection of third quarter assay results from the Nevada
Operations are listed in Table 1.
PRE-DEVELOPMENT
Pre-development spending for permitting of Rock Creek and
Montanore was $0.9 million for the quarter.
2019 ESTIMATES7
The Company is not changing any of its annual estimates provided
in August.
2019 Production Outlook
Silver Production
(Moz)
Gold Production (Koz)
Silver Equivalent
(Moz)
Gold Equivalent
(Koz)
Greens Creek
9.0
52
27.0
278
Lucky Friday
0.5
N/A
1.3
N/A
San Sebastian
2.0
14
3.0
40
Casa Berardi
N/A
146
12.7
146
Nevada Operations
0.2
62
5.5
64
Total
11.7
274
49.5
528
2019 Cost Outlook
Costs of Sales
(million)
Cash cost, after by-product
credits, per silver/gold ounce1,4
AISC, after by-product
credits, per produced silver/gold ounce2
Greens Creek
$202
$2.25
$7.50
Lucky Friday
N/A
N/A
N/A
San Sebastian
$46
$9.00
$13.00
Total Silver
$248
$3.25
$12.50
Casa Berardi
$210
$950
$1,250
Nevada Operations
$147
$1,300
$1,600
Total Gold
$357
$1,100
$1,425
2019 Capital and Exploration Outlook
2019E Capital expenditures (excluding
capitalized interest)
$138 million
2019E Exploration expenditures
(includes Corporate Development)
$15 million
2019E Pre-development
expenditures
$2.5 million
2019E Research and Development
expenditures
$1 million
DIVIDENDS
The Board of Directors declared a quarterly cash dividend of
$0.0025 per share of common stock, payable on or about December 3,
2019, to stockholders of record on November 22, 2019. The realized
silver price was $17.98 in the third 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 on or about January 2, 2020 to shareholders of
record on December 13, 2019.
CONFERENCE CALL AND WEBCAST
A conference call and webcast will be held Thursday, November 7,
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,
Idaho, and Mexico and is a growing gold producer with operating
mines in Quebec, Canada and in Nevada. The Company also has
exploration and pre-development properties in eight world-class
silver and gold mining districts in the U.S., Canada and
Mexico.
NOTES
Non-GAAP Financial Measures
Non-GAAP financial measures are intended to provide additional
information only and do not have any standard meaning prescribed by
generally accepted accounting principles in the United States
(GAAP). These measures should not be considered in isolation or as
a substitute for measures of performance prepared in accordance
with GAAP.
(1) Adjusted net income (loss) applicable to common stockholders
is a non-GAAP measurement, a reconciliation of which to net income
(loss) applicable to common stockholders, the most comparable GAAP
measure, can be found at the end of the release. Adjusted net
income (loss) is a measure used by management to evaluate the
Company's operating performance but should not be considered an
alternative to net income (loss), 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.
(2) 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.
(3) Cash cost, after by-product credits, per silver or gold
ounce is a non-GAAP measurement, a reconciliation of which to cost
of sales and other direct production costs and depreciation,
depletion and amortization (sometimes referred to as "cost of
sales" in this release), can be found at the end of the release. It
is an important operating statistic that management utilizes to
measure each mine's operating performance. It also allows the
benchmarking of performance of each mine versus those of our
competitors. As a primary silver mining company, management also
uses the statistic on an aggregate basis - aggregating the Greens
Creek, Lucky Friday and San Sebastian mines - to compare
performance with that of other primary silver mining companies.
With regard to Casa Berardi and the Nevada operations, management
uses cash cost, after by-product credits, per gold ounce to compare
its performance with other gold mines. Similarly, the statistic is
useful in identifying acquisition and investment opportunities as
it provides a common tool for measuring the financial performance
of other mines with varying geologic, metallurgical and operating
characteristics. In addition, the Company may use it when
formulating performance goals and targets under its incentive
program. Cash cost, after by-product credits, per silver ounce is
not presented for Lucky Friday for the third quarters and year to
date of 2019 and 2018, as production was limited due to the strike
and results are not comparable to those from prior periods and are
not indicative of future operating results under full production.
The estimated fair value of the stockpile acquired at Hollister has
been removed from the cash cost, after by-product credits
calculation.
(4) All in sustaining cost (AISC), after by-product credits, is
a non-GAAP measurement, a reconciliation of which to cost of sales
and other direct production costs and depreciation, depletion and
amortization, the closest GAAP measurement, can be found in the end
of the release. AISC, after by-product credits, includes cost of
sales and other direct production costs, expenses for reclamation
and exploration at the mine sites, corporate exploration related to
sustaining operations, and all site sustaining capital costs. AISC,
after by-product credits, is calculated net of depreciation,
depletion, and amortization and by-product credits. AISC, after
by-product credits, per silver ounce is not presented for Lucky
Friday for the third quarters and first nine months of 2019 and
2018, as production was limited due to the strike and results are
not comparable to those from prior periods and are not indicative
of future operating results under full production.
Current GAAP measures used in the mining industry, such as cost
of goods sold, do not capture all the expenditures incurred to
discover, develop and sustain silver and gold production.
Management believes that all in sustaining costs is a non-GAAP
measure that provides additional information to management,
investors and analysts to help in the understanding of the
economics of our operations and performance compared to other
producers and in the investor's visibility by better defining the
total costs associated with production. Similarly, the statistic is
useful in identifying acquisition and investment opportunities as
it provides a common tool for measuring the financial performance
of other mines with varying geologic, metallurgical and operating
characteristics. In addition, the Company may use it when
formulating performance goals and targets under its incentive
program.
(5) Cash cost, after by-product credits, per gold ounce is only
applicable to Casa Berardi and Nevada production. Gold produced
from Greens Creek and San Sebastian is treated as a by-product
credit against the silver cash cost.
(6) Free cash flow is a non-GAAP measure used to evaluate our
operating performance and is calculated as cash provided by
operating activities (GAAP), less additions to properties, plants,
equipment and mineral interests (GAAP). The calculation of free
cash flow using these GAAP measures can be found at the end of the
release.
Other
(7) Expectations for 2019 includes silver, gold, lead and zinc
production from Greens Creek, San Sebastian, Casa Berardi, Nevada
Operations and Lucky Friday converted using Au $1,400/oz, Ag
$16.00/oz, Zn $1.10/lb, and Pb $0.90/lb.
Numbers may be rounded.
Cautionary Statements to Investors on Forward-Looking
Statements
This release contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
which are intended to be covered by the safe harbor created by such
sections and other applicable laws, including Canadian securities
laws. When a forward-looking statement expresses or implies an
expectation or belief as to future events or results, such
expectation or belief is expressed in good faith and believed to
have a reasonable basis. However, such statements are subject to
risks, uncertainties and other factors, which could cause actual
results to differ materially from future results expressed,
projected or implied by the forward-looking statements.
Forward-looking statements often address our expected future
business and financial performance and financial condition and
often contain words such as “anticipate,” “intend,” “plan,” “will,”
“could,” “would,” “estimate,” “should,” “expect,” “believe,”
“project,” “target,” “indicative,” “preliminary,” “potential” and
similar expressions. Forward-looking statements in this news
release may include, without limitation: (i) estimates of full-year
2019 silver and gold production, cost of sales, cash costs, after
by-product credits, AISC, after by-product credits and cash flows
as well as estimated spending on capital, exploration,
pre-development and research and development; (ii) setting minimum
expected prices on the Company’s projected silver and gold
production through the second quarter of 2020(iii) the ability to
have no net revolver indebtedness by year end(iv) impact of metals
prices on costs and cash flows; (v) estimated adjusted EBITDA in
the fourth quarter of 2019 being similar to the third quarter; (vi)
ability to refinance senior notes before the end of the second
quarter of 2020; (vii) exploration results from the East Mine at
Casa Berardi mine could have significant impact on 2020 results;
(viiii) ability to reduce trucking and processing costs in Nevada
by securing third party milling agreements for refractory and
non-refractory ore, (ix) ability to complete testing the RVM and
deliver it to Lucky Friday in 2020, (x) ability to have the
tentative labor agreement at Lucky Friday ratified by the union;
(xi) ability to ramp up Lucky Friday to full production in about a
year, and (xii) ability of the El Toro vein to extend the oxide
mine life and the successful completion of the bulk sample test at
San Sebastian. The material factors or assumptions used to develop
such forward-looking statements or forward-looking information
include that the Company’s plans for development and production
will proceed as expected and will not require revision as a result
of risks or uncertainties, whether known, unknown or unanticipated,
to which the Company’s operations are subject.
Estimates or expectations of future events or results are based
upon certain assumptions, which may prove to be incorrect, which
could cause actual results to differ from forward-looking
statements. Such assumptions, include, but are not limited to: (i)
there being no significant change to current geotechnical,
metallurgical, hydrological and other physical conditions; (ii)
permitting, development, operations and expansion of the Company’s
projects being consistent with current expectations and mine plans;
(iii) political/regulatory developments in any jurisdiction in
which the Company operates being consistent with its current
expectations; (iv) the exchange rate for the USD/CAD and USD/MXN,
being approximately consistent with current levels; (v) certain
price assumptions for gold, silver, lead and zinc; (vi) prices for
key supplies being approximately consistent with current levels;
(vii) the accuracy of our current mineral reserve and mineral
resource estimates; (viii) the Company’s plans for development and
production will proceed as expected and will not require revision
as a result of risks or uncertainties, whether known, unknown or
unanticipated; (ix) counterparties performing their obligations
under hedging instruments and put option contracts; (x) sufficient
workforce is available and trained to perform assigned tasks; (xi)
weather patterns and rain/snowfall within normal seasonal ranges so
as not to impact operations; (xii) relations with interested
parties, including Native Americans, remain productive; (xiii)
economic terms can be reached with third-party mill operators who
have capacity to process our ore; (xiv) maintaining availability of
water rights; (xv) factors do not arise that reduce available cash
balances; (xvi) there being no material increases in our current
requirements to post or maintain reclamation and performance bonds
or collateral related thereto, and (xvii) the Company's plans for
refinancing its high yield notes proceeding as expected.
In addition, material risks that could cause actual results to
differ from forward-looking statements include, but are not limited
to: (i) gold, silver and other metals price volatility; (ii)
operating risks; (iii) currency fluctuations; (iv) increased
production costs and variances in ore grade or recovery rates from
those assumed in mining plans; (v) community relations; (vi)
conflict resolution and outcome of projects or oppositions; (vii)
litigation, political, regulatory, labor and environmental risks;
(viii) exploration risks and results, including that mineral
resources are not mineral reserves, they do not have demonstrated
economic viability and there is no certainty that they can be
upgraded to mineral reserves through continued exploration; (ix)
the failure of counterparties to perform their obligations under
hedging instruments, including put option contracts; (x) our plans
for improvements at our Nevada operations, including at Fire Creek,
are not successful; (xi) our estimates for the third and fourth
quarter results are inaccurate; (xii) we take a material impairment
charge on our Nevada operations; (xiii) we are unable to remain in
compliance with all terms of the credit agreement in order to
maintain continued access to the revolver, and (xiv) we are unable
to refinance the maturing senior notes. For a more detailed
discussion of such risks and other factors, see the Company’s 2018
Form 10-K, filed on February 22, 2019, and Form 10-Q filed on each
of May 9, and August 7, 2019 with the Securities and Exchange
Commission (SEC), as well as the Company’s other SEC filings. The
Company does not undertake any obligation to release publicly
revisions to any “forward-looking statement,” including, without
limitation, outlook, to reflect events or circumstances after the
date of this presentation, or to reflect the occurrence of
unanticipated events, except as may be required under applicable
securities laws. Investors should not assume that any lack of
update to a previously issued “forward-looking statement”
constitutes a reaffirmation of that statement. Continued reliance
on “forward-looking statements” is at investors’ own risk.
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). Although the SEC has recently issued new
rules rescinding Guide 7, the new rules are not binding until
January 1, 2021, and at this time the Company still reports in
accordance with 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 included herein to satisfy the Company's
“public disclosure” obligations under Regulation FD of the SEC and
to provide U.S. holders with ready access to information publicly
available in Canada.
Reporting requirements in the United States for disclosure of
mineral properties under Guide 7 and the requirements in Canada
under NI 43-101 standards are substantially different. This
document contains a summary of certain estimates of the Company,
not only of proven and probable reserves within the meaning of
Guide 7, but also of mineral resource and mineral reserve estimates
estimated in accordance with the definitional standards of the
Canadian Institute of Mining, Metallurgy and Petroleum referred to
in NI 43-101. Under Guide 7, the term "reserve" means that part of
a mineral deposit that can be economically and legally extracted or
produced at the time of the reserve determination. The term
"economically", as used in the definition of reserve, means that
profitable extraction or production has been established or
analytically demonstrated to be viable and justifiable under
reasonable investment and market assumptions. The term "legally",
as used in the definition of reserve, does not imply that all
permits needed for mining and processing have been obtained or that
other legal issues have been completely resolved. However, for a
reserve to exist, Hecla must have a justifiable expectation, based
on applicable laws and regulations, that issuance of permits or
resolution of legal issues necessary for mining and processing at a
particular deposit will be accomplished in the ordinary course and
in a timeframe consistent with Hecla's current mine plans. The
terms “measured resources”, “indicated resources,” and “inferred
resources” are 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. The term “resource” does
not equate to the term “reserve”. Under Guide 7, the material
described herein as “indicated resources” and “measured resources”
would be characterized as “mineralized material” and is permitted
to be disclosed in tonnage and grade only, not ounces. The category
of “inferred resources” is not recognized by Guide 7. Investors are
cautioned not to assume that any part or all of the mineral
deposits in such categories will ever be converted into proven or
probable reserves. “Resources” have a great amount of uncertainty
as to their existence, and great uncertainty as to their economic
and legal feasibility. It cannot be assumed that all or any part of
such a “resource” will ever be upgraded to a higher category or
will ever be economically extracted. Investors are cautioned not to
assume that all or any part of a “resource” exists or is
economically or legally mineable. Investors are also especially
cautioned that the mere fact that such resources may be referred to
in ounces of silver and/or gold, rather than in tons of
mineralization and grades of silver and/or gold estimated per ton,
is not an indication that such material will ever result in mined
ore which is processed into commercial silver or gold.
Qualified Person (QP) Pursuant to
Canadian National Instrument 43-101
Kurt D. Allen, MSc., CPG, Director - Exploration of Hecla
Limited and Keith Blair, MSc., CPG, Chief Geologist of Hecla
Limited, who serve as a Qualified Person under National Instrument
43-101("NI 43-101"), supervised the preparation of the scientific
and technical information concerning Hecla’s mineral projects in
this news release, including with respect to the newly acquired
Nevada projects. Information regarding data verification, surveys
and investigations, quality assurance program and quality control
measures and a summary of analytical or testing procedures for the
Greens Creek Mine are contained in a technical report titled
“Technical Report for the Greens Creek Mine” effective date
December 31, 2018, and for the Lucky Friday Mine are contained in a
technical report titled “Technical Report for the Lucky Friday Mine
Shoshone County, Idaho, USA” effective date April 2, 2014, for Casa
Berardi are contained in a technical report titled "Technical
Report on the mineral resource and mineral reserve estimate for
Casa Berardi Mine, Northwestern Quebec, Canada" effective date
December 31, 2018 (the "Casa Berardi Technical Report"), and for
the San Sebastian Mine, Mexico, are contained in a technical report
prepared for Hecla titled “Technical Report for the San Sebastian
Ag-Au Property, Durango, Mexico” effective date September 8, 2015 .
Also included in these four technical reports is a description of
the key assumptions, parameters and methods used to estimate
mineral reserves and resources and a general discussion of the
extent to which the estimates may be affected by any known
environmental, permitting, legal, title, taxation, socio-political,
marketing or other relevant factors. Information regarding data
verification, surveys and investigations, quality assurance program
and quality control measures and a summary of sample, analytical or
testing procedures for the Fire Creek Mine are contained in a
technical report prepared for Klondex Mines, dated March 31, 2018;
the Hollister Mine dated May 31, 2017, amended August 9, 2017; and
the Midas Mine dated August 31, 2014, amended April 2, 2015. Copies
of these technical reports are available under Hecla's and
Klondex's profiles on SEDAR at www.sedar.com. Mr. Allen and Mr.
Blair reviewed and verified information regarding drill sampling,
data verification of all digitally-collected data, drill surveys
and specific gravity determinations relating to all the mines. The
review encompassed quality assurance programs and quality control
measures including analytical or testing practice, chain-of-custody
procedures, sample storage procedures and included independent
sample collection and analysis. This review found the information
and procedures meet industry standards and are adequate for Mineral
Resource and Mineral Reserve estimation and mine planning
purposes.
HECLA MINING COMPANY
Condensed Consolidated Statements
of Loss
(dollars and shares in thousands,
except per share amounts - unaudited)
Third Quarter Ended
Nine Months Ended
September 30, 2019
September 30, 2018
September 30, 2019
September 30, 2018
Sales of products
$
161,532
$
143,649
$
448,321
$
430,617
Cost of sales and other direct production
costs
95,878
93,609
311,202
246,918
Depreciation, depletion and
amortization
50,774
43,464
139,038
103,335
146,652
137,073
450,240
350,253
Gross profit
14,880
6,576
(1,919
)
80,364
Other operating expenses:
General and administrative
7,978
10,327
26,855
27,849
Exploration
4,808
12,411
13,556
27,609
Pre-development
881
1,195
2,535
3,615
Research and development
53
1,269
614
5,042
Other operating expense
437
448
1,681
1,767
Gain on disposition of properties, plants,
equipment and mineral interests
24
(3,208
)
4,666
(3,374
)
Provision or closed operations and
reclamation
1,907
1,852
3,529
4,534
Suspension-related costs
3,722
6,519
8,766
18,337
Acquisition costs
183
6,139
593
9,656
19,993
36,952
62,795
95,035
Income from operations
(5,113
)
(30,376
)
(64,714
)
(14,671
)
Other income (expense):
(Loss) gain on derivative contracts
(4,718
)
19,460
(2,719
)
40,271
Gain (loss) on disposition of
investments
927
(36
)
927
(36
)
Unrealized (loss) gain on investments
(126
)
(2,207
)
(1,159
)
(2,461
)
Foreign exchange gain (loss)
773
(2,212
)
(6,741
)
2,856
Other expense
(1,096
)
(346
)
(3,407
)
(294
)
Interest expense
(11,777
)
(10,146
)
(33,777
)
(30,019
)
(16,017
)
4,513
(46,876
)
10,317
Loss before income taxes
(21,130
)
(25,863
)
(111,590
)
(4,354
)
Income tax benefit
1,614
2,679
20,009
1,484
Net loss
(19,516
)
(23,184
)
(91,581
)
(2,870
)
Preferred stock dividends
(138
)
(138
)
(414
)
(414
)
Loss applicable to common shareholders
$
(19,654
)
$
(23,322
)
$
(91,995
)
$
(3,284
)
Basic loss per common share after
preferred dividends
$
(0.04
)
$
(0.05
)
$
(0.19
)
$
(0.01
)
Diluted loss per common share after
preferred dividends
$
(0.04
)
$
(0.05
)
$
(0.19
)
$
(0.01
)
Weighted average number of common shares
outstanding - basic
489,971
452,636
486,298
417,532
Weighted average number of common shares
outstanding - diluted
489,971
452,636
486,298
417,532
HECLA MINING COMPANY
Condensed Consolidated Balance
Sheet
(dollars and share in thousands -
unaudited)
September 30, 2019
December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents
$
32,995
$
27,389
Accounts receivable:
Trade
6,222
4,184
Taxes
22,902
14,191
Other, net
8,056
7,443
Inventories
98,251
87,533
Prepaid taxes
100
12,231
Other current assets
10,400
11,179
Total current assets
178,926
164,150
Non-current investments
7,349
6,583
Non-current restricted cash and
investments
1,025
1,025
Properties, plants, equipment and mineral
interests, net
2,455,511
2,520,004
Operating lease right-of-use assets
17,313
—
Non-current deferred income taxes
3,701
1,987
Other non-current assets and deferred
charges
9,353
10,195
Total assets
$
2,673,178
$
2,703,944
LIABILITIES
Current liabilities:
Accounts payable and accrued
liabilities
$
57,860
$
77,861
Accrued payroll and related benefits
23,147
30,034
Accrued taxes
2,160
7,727
Current portion of finance leases
5,704
5,264
Current portion of operating leases
5,864
—
Current portion of accrued reclamation and
closure costs
7,457
3,410
Accrued interest
15,039
5,961
Deferred revenue
20,084
—
Other current liabilities
8,528
5,937
Total current liabilities
145,843
136,194
Finance leases
8,569
7,871
Operating leases
11,466
—
Accrued reclamation and closure costs
103,821
104,979
Long-term debt
584,618
532,799
Non-current deferred tax liability
143,442
173,537
Non-current pension liability
50,662
47,711
Other non-current liabilities
8,113
9,890
Total liabilities
1,056,534
1,012,981
SHAREHOLDERS’ EQUITY
Preferred stock
39
39
Common stock
124,133
121,956
Capital surplus
1,897,363
1,880,481
Accumulated deficit
(343,958
)
(248,308
)
Accumulated other comprehensive loss
(37,958
)
(42,469
)
Treasury stock
(22,975
)
(20,736
)
Total shareholders’ equity
1,616,644
1,690,963
Total liabilities and shareholders’
equity
$
2,673,178
$
2,703,944
Common shares outstanding
490,251
482,604
HECLA MINING COMPANY
Condensed Consolidated Statements
of Cash Flows
(dollars in thousands -
unaudited)
Nine Months Ended
September 30, 2019
September 30, 2018
OPERATING ACTIVITIES
Net loss
$
(91,581
)
$
(2,870
)
Non-cash elements included in net
loss:
Depreciation, depletion and
amortization
143,040
108,814
Loss on disposition of investments
(927
)
—
Loss (gain) on disposition of properties,
plants, equipment and mineral interests
4,666
(3,374
)
Unrealized loss on investments
1,159
2,461
Adjustment of inventory to market
value
1,399
7,232
Provision for reclamation and closure
costs
5,298
3,957
Stock compensation
4,758
4,672
Deferred income taxes
(26,616
)
(4,637
)
Amortization of loan origination fees
1,919
1,471
Loss (gain) loss on derivative
contracts
5,824
(15,208
)
Foreign exchange loss (gain)
6,263
(2,032
)
Other non-cash items, net
—
(37
)
Change in assets and liabilities:
Accounts receivable
(10,215
)
(4,424
)
Inventories
(6,501
)
(18,954
)
Other current and non-current assets
14,913
(5,569
)
Accounts payable and accrued
liabilities
5,616
12,308
Accrued payroll and related benefits
4,506
(4,207
)
Accrued taxes
(5,733
)
845
Accrued reclamation and closure costs and
other non-current liabilities
5,821
(5,238
)
Cash provided by operating
activities
63,609
75,210
INVESTING ACTIVITIES
Additions to properties, plants, equipment
and mineral interests
(97,338
)
(83,285
)
Acquisition of Klondex, net of cash and
restricted cash acquired
—
(139,326
)
Proceeds from sale of investments
1,760
—
Proceeds from disposition of properties,
plants and equipment
86
722
Insurance proceeds received for damaged
property
—
4,377
Purchases of investments
(389
)
(31,971
)
Maturities of short-term investments
—
64,895
Net cash used in investing
activities
(95,881
)
(184,588
)
FINANCING ACTIVITIES
Proceeds from issue of stock, net of
related costs
—
3,085
Acquisition of treasury shares
(2,239
)
(2,694
)
Dividends paid to common shareholders
(3,655
)
(3,193
)
Dividends paid to preferred
shareholders
(414
)
(414
)
Debt origination fees
(587
)
(2,460
)
Repayments of debt
(195,000
)
(82,036
)
Borrowings on debt
245,000
78,024
Payments on capital leases
(5,484
)
(5,992
)
Net cash provided by (used in)
financing activities
37,621
(15,680
)
Effect of exchange rates on cash
257
(215
)
Net increase in cash, cash equivalents and
restricted cash and cash equivalents
5,606
(125,273
)
Cash, cash equivalents and restricted cash
and cash equivalents at beginning of period
28,414
187,139
Cash, cash equivalents and restricted cash
and cash equivalents at end of period
$
34,020
$
61,866
HECLA MINING COMPANY
Production Data
Three Months Ended
Nine Months Ended
September 30, 2019
September 30, 2018
September 30, 2019
September 30, 2018
GREENS CREEK UNIT
Tons of ore milled
213,557
213,037
629,752
632,876
Mining cost per ton
$
81.16
$
68.76
$
80.15
$
69.19
Milling cost per ton
$
36.67
$
31.97
$
35.89
$
32.73
Ore grade milled - Silver (oz./ton)
15.01
11.65
14.28
11.94
Ore grade milled - Gold (oz./ton)
0.095
0.087
0.095
0.094
Ore grade milled - Lead (%)
3.00
%
2.40
%
2.86
%
2.84
%
Ore grade milled - Zinc (%)
7.70
%
6.87
%
7.28
%
7.58
%
Silver produced (oz.)
2,544,018
1,876,417
7,149,035
5,789,440
Gold produced (oz.)
13,684
11,559
41,269
38,396
Lead produced (tons)
5,258
4,026
14,668
14,352
Zinc produced (tons)
15,073
12,695
41,330
41,673
Cash cost, after by-product credits, per
silver ounce (1)
$
2.05
$
1.92
$
1.67
$
(2.22
)
AISC, after by-product credits, per silver
ounce (1)
$
6.05
$
9.20
$
5.28
$
4.71
Capital additions (in thousands)
$
8,966
$
11,029
$
22,943
$
34,694
LUCKY FRIDAY UNIT
Tons of ore milled
13,254
3,006
40,754
16,012
Ore grade milled - Silver (oz./ton)
9.33
11.41
10.95
11.06
Ore grade milled - Lead (%)
7.01
%
8.06
%
7.40
%
7.21
%
Ore grade milled - Zinc (%)
3.13
%
3.64
%
3.91
%
4.28
%
Silver produced (oz.)
115,682
31,639
416,456
156,015
Lead produced (tons)
849
212
2,738
1,035
Zinc produced (tons)
340
100
1,342
639
Capital additions (in thousands)
$
2,739
$
4,840
$
5,946
$
6,889
SAN SEBASTIAN
Tons of ore milled
45,232
39,739
135,576
111,916
Mining cost per ton
$
102.94
$
171.87
$
112.17
$
157.21
Milling cost per ton
$
62.85
$
65.98
$
62.16
$
66.16
Ore grade milled - Silver (oz./ton)
13.36
14.16
11.78
15.36
Ore grade milled - Gold (oz./ton)
0.122
0.108
0.103
0.12
Silver produced (oz.)
541,636
521,931
1,446,450
1,593,770
Gold produced (oz.)
4,699
3,666
11,776
12,051
Cash cost, after by-product credits, per
silver ounce (1)
$
3.70
$
12.02
$
7.77
$
8.28
AISC, after by-product credits, per silver
ounce (1)
$
7.21
$
16.95
$
12.14
$
13.34
Capital additions (in thousands)
$
1,513
$
1,582
$
5,493
$
3,692
CASA BERARDI UNIT
Tons of ore milled - underground
193,130
181,285
582,631
556,991
Tons of ore milled - surface pit
144,221
172,555
432,067
495,335
Tons of ore milled - total
337,351
353,840
1,014,698
1,052,326
Surface tons mined - ore and waste
3,509,638
1,492,041
7,532,163
5,129,646
Mining cost per ton of ore -
underground
$
98.29
$
104.31
$
99.53
$
102.56
Mining cost per ton of ore - combined
$
80.67
$
65.97
$
80.97
$
72.15
Mining cost per ton of ore and waste -
surface tons mined
$
2.35
$
4.10
$
3.21
$
3.66
Milling cost per ton
$
18.39
$
15.05
$
17.50
$
15.91
Ore grade milled - Gold (oz./ton) -
underground
0.186
0.229
0.170
0.204
Ore grade milled - Gold (oz./ton) -
surface pit
0.050
0.050
0.052
0.064
Ore grade milled - Gold (oz./ton) -
combined
0.128
0.140
0.120
0.138
Ore grade milled - Silver (oz./ton)
0.02
0.03
0.03
0.03
Gold produced (oz.) - underground
30,467
36,367
80,315
99,632
Gold produced (oz.) - surface pit
6,080
7,614
19,301
27,248
Gold produced (oz.) - total
36,547
43,981
99,616
126,880
Cash cost, after by-product credits, per
gold ounce (1)
$
966
$
686
$
1,055
$
760
AISC, after by-product credits, per gold
ounce (1)
$
1,348
$
896
$
1,373
$
1,004
Capital additions (in thousands)
$
13,239
$
8,244
$
28,360
$
27,120
Nevada Operations
Tons of ore milled
63,954
55,899
163,736
55,899
Mining cost per ton
$
149.16
$
186.12
$
158.25
$
186.12
Milling cost per ton
$
67.66
$
70.39
$
81.73
$
70.39
Ore grade milled - Gold (oz./ton)
0.389
0.288
0.320
0.288
Silver produced (oz.)
43,377
84,145
160,264
84,145
Gold produced (oz.)
22,381
13,789
45,439
13,789
Cash cost, after by-product credits, per
silver ounce(1)
$
817
$
1,179
$
1,165
$
1,179
AISC, after by-product credits, per silver
ounce(1)
$
992
$
1,932
$
1,841
$
1,932
Capital additions (in thousands)
$
2,502
$
14,998
$
41,576
$
14,998
(1) Cash cost, after by-product credits,
per ounce and AISC, after by-product credits. per ounce represent
non-U.S. Generally Accepted Accounting Principles (GAAP)
measurements. A reconciliation of cost of sales and other direct
production costs and depreciation, depletion and amortization
(GAAP) to cash cost, after by-product credits can be found in the
cash cost per ounce reconciliation section of this news release.
Gold, lead and zinc produced have been treated as by-product
credits in calculating silver costs per ounce. The primary metal
produced at Casa Berardi is gold, with a by-product credit for the
value of silver production.
Non-GAAP Measures (Unaudited)
Reconciliation of Cost of Sales and Other Direct Production
Costs and Depreciation, Depletion and Amortization (GAAP) to Cash
Cost, Before By-product Credits and Cash Cost, After By-product
Credits (non-GAAP) and All-In Sustaining Cost, Before By-product
Credits and All-In Sustaining Cost, After By-product Credits
(non-GAAP)
The tables below present reconciliations between the most
comparable GAAP measure of cost of sales and other direct
production costs and depreciation, depletion and amortization to
the non-GAAP measures of Cash Cost, Before By-product Credits, Cash
Cost, After By-product Credits, AISC, Before By-product Credits and
AISC, After By-product Credits for our operations at the Greens
Creek, Lucky Friday, San Sebastian, Casa Berardi and Nevada
Operations units for the three- and nine-month periods ended
September 30, 2019 and 2018.
Cash Cost, After By-product Credits, per Ounce is an important
operating statistic that we utilize to measure each mine's
operating performance. AISC, After By-product Credits, per Ounce is
an important operating statistic that we utilize as a measure of
our mines' net cash flow after costs for exploration,
pre-development, reclamation, and sustaining capital. Current GAAP
measures used in the mining industry, such as cost of goods sold,
do not capture all the expenditures incurred to discover, develop
and sustain silver and gold production. Cash Cost, After By-product
Credits, per Ounce and AISC, After By-product Credits, per Ounce
also allow us to benchmark the performance of each of our mines
versus those of our competitors. As a silver and gold mining
company, we also use these statistics on an aggregate basis -
aggregating the Greens Creek, Lucky Friday and San Sebastian mines,
to compare our performance with that of other primary silver mining
companies and aggregating Casa Berardi and Nevada Operations for
comparison with other gold mining companies. Similarly, these
statistics are useful in identifying acquisition and investment
opportunities as they provide a common tool for measuring the
financial performance of other mines with varying geologic,
metallurgical and operating characteristics.
Cash Cost, Before By-product Credits and AISC, Before By-product
Credits include all direct and indirect operating cash costs
related directly to the physical activities of producing metals,
including mining, processing and other plant costs, third-party
refining expense, on-site general and administrative costs,
royalties and mining production taxes. AISC, Before By-product
Credits for each mine also includes on-site exploration,
reclamation, and sustaining capital costs. AISC, Before By-product
Credits for our consolidated silver properties also includes
corporate costs for general and administrative expense,
reclamation, exploration, and pre-development. By-product credits
include revenues earned from all metals other than the primary
metal produced at each unit. As depicted in the tables below,
by-product credits comprise an essential element of our silver unit
cost structure, distinguishing our silver operations due to the
polymetallic nature of their orebodies. Cash Cost, After By-product
Credits, per Ounce and AISC, After By-product Credits, per Ounce
provide management and investors an indication of operating cash
flow, after consideration of the average price, received from
production. We also use these measurements for the comparative
monitoring of performance of our mining operations period-to-period
from a cash flow perspective. 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 our reporting of these non-GAAP measures are the same
as those reported by other mining companies.
The Casa Berardi and Nevada Operations sections below report
Cash Cost, After By-product Credits, per Gold Ounce and AISC, After
By-product Credits, per Gold Ounce for the production of gold,
their primary product, and by-product revenues earned from silver,
which is a by-product at Casa Berardi and Nevada Operations. Only
costs and ounces produced relating to units with the same primary
product are combined to represent Cash Cost, After By-product
Credits, per Ounce and AISC, After By-product Credits, per Ounce.
Thus, the gold produced at our Casa Berardi and Nevada Operations
units are not included as a by-product credit when calculating Cash
Cost, After By-product Credits, per Silver Ounce and AISC, After
By-product Credits, per Silver Ounce for the total of Greens Creek,
Lucky Friday and San Sebastian, our combined silver properties.
In thousands (except per ounce
amounts)
Three Months Ended September 30,
2019
Greens Creek
Lucky Friday(2)
San Sebastian
Corporate(3)
Total Silver
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
40,475
4,018
$
12,842
$
57,335
Depreciation, depletion and
amortization
(9,008
)
(300
)
(3,326
)
(12,634
)
Treatment costs
13,003
500
63
13,566
Change in product inventory
8,456
(134
)
(335
)
7,987
Reclamation and other costs
(92
)
—
(294
)
(386
)
Exclusion of Lucky Friday costs
—
(4,084
)
—
(4,084
)
Cash Cost, Before By-product Credits
(1)
52,834
—
8,950
61,784
Reclamation and other costs
737
—
123
860
Exploration
465
—
1,252
167
1,884
Sustaining capital
8,966
—
528
—
9,494
General and administrative
7,978
7,978
AISC, Before By-product Credits (1)
63,002
—
10,853
82,000
By-product credits:
Zinc
(22,452
)
—
(22,452
)
Gold
(17,517
)
—
(6,946
)
(24,463
)
Lead
(7,649
)
—
(7,649
)
Total By-product credits
(47,618
)
—
(6,946
)
(54,564
)
Cash Cost, After By-product Credits
$
5,216
$
—
$
2,004
$
7,220
AISC, After By-product Credits
$
15,384
$
—
$
3,907
$
27,436
Divided by silver ounces produced
2,544
—
541
3,085
Cash Cost, Before By-product Credits, per
Silver Ounce
$
20.77
$
—
$
16.54
$
20.03
By-product credits per ounce
(18.72
)
—
(12.84
)
(17.69
)
Cash Cost, After By-product Credits, per
Silver Ounce
$
2.05
$
—
$
3.70
$
2.34
AISC, Before By-product Credits, per
Silver Ounce
$
24.77
$
—
$
20.05
$
26.58
By-product credits per ounce
(18.72
)
—
(12.84
)
(17.69
)
AISC, After By-product Credits, per Silver
Ounce
$
6.05
$
—
$
7.21
$
8.89
In thousands (except per ounce
amounts)
Three Months Ended September 30,
2019
Casa Berardi
Nevada Operations (4)
Total Gold
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
53,006
$
36,311
$
89,317
Depreciation, depletion and
amortization
(19,090
)
(19,050
)
(38,140
)
Treatment costs
561
45
606
Change in product inventory
1,070
2,118
3,188
Reclamation and other costs
(129
)
(377
)
(506
)
Cash Cost, Before By-product Credits
(1)
35,418
19,047
54,465
Reclamation and other costs
130
378
508
Exploration
603
1,232
1,835
Sustaining capital
13,237
2,305
15,542
AISC, Before By-product Credits (1)
49,388
22,962
72,350
By-product credits:
Silver
(111
)
(755
)
(866
)
Total By-product credits
(111
)
(755
)
(866
)
Cash Cost, After By-product Credits
$
35,307
$
18,292
$
53,599
AISC, After By-product Credits
$
49,277
$
22,207
$
71,484
Divided by gold ounces produced
37
22
59
Cash Cost, Before By-product Credits, per
Gold Ounce
$
969
$
851
$
924
By-product credits per ounce
(3
)
(34
)
(15
)
Cash Cost, After By-product Credits, per
Gold Ounce
$
966
$
817
$
909
AISC, Before By-product Credits, per Gold
Ounce
$
1,351
$
1,026
$
1,228
By-product credits per ounce
(3
)
(34
)
(15
)
AISC, After By-product Credits, per Gold
Ounce
$
1,348
$
992
$
1,213
In thousands (except per ounce
amounts)
Three Months Ended September 30,
2019
Total Silver
Total Gold
Total
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
57,335
89,317
$
146,652
Depreciation, depletion and
amortization
(12,634
)
(38,140
)
(50,774
)
Treatment costs
13,566
606
14,172
Change in product inventory
7,987
3,188
11,175
Reclamation and other costs
(386
)
(506
)
(892
)
Exclusion of Lucky Friday costs
(4,084
)
—
(4,084
)
Cash Cost, Before By-product Credits
(1)
61,784
54,465
116,249
Reclamation and other costs
860
508
1,368
Exploration
1,884
1,835
3,719
Sustaining capital
9,494
15,542
25,036
General and administrative
7,978
—
7,978
AISC, Before By-product Credits (1)
82,000
72,350
154,350
By-product credits:
Zinc
(22,452
)
—
(22,452
)
Gold
(24,463
)
—
(24,463
)
Lead
(7,649
)
—
(7,649
)
Silver
(866
)
(866
)
Total By-product credits
(54,564
)
(866
)
(55,430
)
Cash Cost, After By-product Credits
$
7,220
$
53,599
$
60,819
AISC, After By-product Credits
$
27,436
$
71,484
$
98,920
Divided by ounces produced
3,085
59
Cash Cost, Before By-product Credits, per
Ounce
$
20.03
$
924
By-product credits per ounce
(17.69
)
(15
)
Cash Cost, After By-product Credits, per
Ounce
$
2.34
$
909
AISC, Before By-product Credits, per
Ounce
$
26.58
$
1,228
By-product credits per ounce
(17.69
)
(15
)
AISC, After By-product Credits, per
Ounce
$
8.89
$
1,213
In thousands (except per ounce
amounts)
Three Months Ended September 30,
2018
Greens Creek
Lucky Friday(2)
San Sebastian
Corporate(3)
Total Silver
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
52,163
$
(1
)
$
14,325
$
66,487
Depreciation, depletion and
amortization
(12,428
)
—
(1,795
)
(14,223
)
Treatment costs
8,267
134
205
8,606
Change in product inventory
(4,480
)
—
(1,549
)
(6,029
)
Reclamation and other costs
(965
)
103
(458
)
(1,320
)
Exclusion of Lucky Friday costs
—
(236
)
(236
)
Cash Cost, Before By-product Credits
(1)
42,557
—
10,728
53,285
Reclamation and other costs
849
—
105
954
Exploration
1,771
—
1,982
473
4,226
Sustaining capital
11,029
—
486
704
12,219
General and administrative
10,327
10,327
AISC, Before By-product Credits (1)
56,206
—
13,301
81,011
By-product credits:
Zinc
(20,674
)
—
(20,674
)
Gold
(12,229
)
—
(4,450
)
(16,679
)
Lead
(6,041
)
—
(6,041
)
Total By-product credits
(38,944
)
—
(4,450
)
(43,394
)
Cash Cost, After By-product Credits
$
3,613
$
—
$
6,278
$
9,891
AISC, After By-product Credits
$
17,262
$
—
$
8,851
$
37,617
Divided by ounces produced
1,876
522
2,398
Cash Cost, Before By-product Credits, per
Ounce
$
22.67
$
20.55
$
22.22
By-product credits per ounce
(20.75
)
(8.53
)
(18.10
)
Cash Cost, After By-product Credits, per
Ounce
$
1.92
$
—
$
12.02
$
4.12
AISC, Before By-product Credits, per
Ounce
$
29.95
$
25.48
$
33.78
By-product credits per ounce
(20.75
)
(8.53
)
(18.10
)
AISC, After By-product Credits, per
Ounce
$
9.20
$
—
$
16.95
$
15.68
In thousands (except per ounce
amounts)
Three Months Ended September 30,
2018
Casa Berardi
Nevada Operations (4)
Total Gold
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
51,267
$
19,319
$
70,586
Depreciation, depletion and
amortization
(20,054
)
(9,187
)
(29,241
)
Treatment costs
535
42
577
Change in product inventory
(1,303
)
7,311
6,008
Reclamation and other costs
(140
)
—
(140
)
Cash Cost, Before By-product Credits
(1)
30,305
17,485
47,790
Reclamation and other costs
138
—
138
Exploration
854
3,322
4,176
Sustaining capital
8,244
7,061
15,305
AISC, Before By-product Credits (1)
39,541
27,868
67,409
By-product credits:
Silver
(142
)
(1,232
)
(1,374
)
Total By-product credits
(142
)
(1,232
)
(1,374
)
Cash Cost, After By-product Credits
$
30,163
$
16,253
$
46,416
AISC, After By-product Credits
$
39,399
$
26,636
$
66,035
Divided by ounces produced
44
14
58
Cash Cost, Before By-product Credits, per
Ounce
$
689
$
1,268
$
827
By-product credits per ounce
(3
)
(89
)
(24
)
Cash Cost, After By-product Credits, per
Ounce
$
686
$
1,179
$
803
AISC, Before By-product Credits, per
Ounce
$
899
$
2,021
$
1,167
By-product credits per ounce
(3
)
(89
)
(24
)
AISC, After By-product Credits, per
Ounce
$
896
$
1,932
$
1,143
In thousands (except per ounce
amounts)
Three Months Ended September 30,
2018
Total Silver
Total Gold
Total
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
66,487
70,586
$
137,073
Depreciation, depletion and
amortization
(14,223
)
(29,241
)
(43,464
)
Treatment costs
8,606
577
9,183
Change in product inventory
(6,029
)
6,008
(21
)
Reclamation and other costs
(1,320
)
(140
)
(1,460
)
Exclusion of Lucky Friday costs
(236
)
(236
)
Cash Cost, Before By-product Credits
(1)
53,285
47,790
101,075
Reclamation and other costs
954
138
1,092
Exploration
4,226
4,176
8,402
Sustaining capital
12,219
15,305
27,524
General and administrative
10,327
—
10,327
AISC, Before By-product Credits (1)
81,011
67,409
148,420
By-product credits:
Zinc
(20,674
)
—
(20,674
)
Gold
(16,679
)
—
(16,679
)
Lead
(6,041
)
—
(6,041
)
Silver
(1,374
)
(1,374
)
Total By-product credits
(43,394
)
(1,374
)
(44,768
)
Cash Cost, After By-product Credits
$
9,891
$
46,416
$
56,307
AISC, After By-product Credits
$
37,617
$
66,035
$
103,652
Divided by ounces produced
2,398
58
Cash Cost, Before By-product Credits, per
Ounce
$
22.22
$
827
By-product credits per ounce
(18.10
)
(24
)
Cash Cost, After By-product Credits, per
Ounce
$
4.12
$
803
AISC, Before By-product Credits, per
Ounce
$
33.78
$
1,167
By-product credits per ounce
(18.10
)
(24
)
AISC, After By-product Credits, per
Ounce
$
15.68
$
1,143
In thousands (except per ounce
amounts)
Nine Months Ended September 30,
2019
Greens Creek
Lucky Friday(2)
San Sebastian
Corporate(3)
Total Silver
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
140,237
$
11,149
$
36,338
$
187,724
Depreciation, depletion and
amortization
(32,228
)
(891
)
(6,934
)
(40,053
)
Treatment costs
34,319
1,834
432
36,585
Change in product inventory
9,168
708
(1,378
)
8,498
Reclamation and other costs
(1,439
)
—
(1,030
)
(2,469
)
Exclusion of Lucky Friday costs
—
(12,800
)
—
(12,800
)
Cash Cost, Before By-product Credits
(1)
150,057
—
27,428
177,485
Reclamation and other costs
2,212
—
369
2,581
Exploration
625
—
4,452
1,105
6,182
Sustaining capital
22,943
—
1,496
73
24,512
General and administrative
26,855
26,855
AISC, Before By-product Credits (1)
175,837
—
33,745
237,615
By-product credits:
Zinc
(67,957
)
—
(67,957
)
Gold
(49,385
)
(16,193
)
(65,578
)
Lead
(20,764
)
—
(20,764
)
Total By-product credits
(138,106
)
—
(16,193
)
(154,299
)
Cash Cost, After By-product Credits
$
11,951
$
—
$
11,235
$
23,186
AISC, After By-product Credits
$
37,731
$
—
$
17,552
$
83,316
Divided by silver ounces produced
7,149
—
1,446
8,595
Cash Cost, Before By-product Credits, per
Silver Ounce
$
20.99
$
—
$
18.97
$
20.65
By-product credits per ounce
(19.32
)
—
(11.20
)
(17.95
)
Cash Cost, After By-product Credits, per
Silver Ounce
$
1.67
$
—
$
7.77
$
2.70
AISC, Before By-product Credits, per
Silver Ounce
$
24.60
$
—
$
23.34
$
27.65
By-product credits per ounce
(19.32
)
—
(11.20
)
(17.95
)
AISC, After By-product Credits, per Silver
Ounce
$
5.28
$
—
$
12.14
$
9.70
In thousands (except per ounce
amounts)
Nine Months Ended September 30,
2019
Casa Berardi
Nevada Operations (4)
Total Gold
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
157,239
$
105,277
$
262,516
Depreciation, depletion and
amortization
(53,806
)
(45,179
)
(98,985
)
Treatment costs
1,429
119
1,548
Change in product inventory
971
(3,097
)
(2,126
)
Reclamation and other costs
(385
)
(1,641
)
(2,026
)
Cash Cost, Before By-product Credits
(1)
105,448
55,479
160,927
Reclamation and other costs
386
1,134
1,520
Exploration
2,890
2,048
4,938
Sustaining capital
28,360
27,565
55,925
AISC, Before By-product Credits (1)
137,084
86,226
223,310
By-product credits:
Silver
(328
)
(2,551
)
(2,879
)
Total By-product credits
(328
)
(2,551
)
(2,879
)
Cash Cost, After By-product Credits
$
105,120
$
52,928
$
158,048
AISC, After By-product Credits
$
136,756
$
83,675
$
220,431
Divided by gold ounces produced
100
45
145
Cash Cost, Before By-product Credits, per
Gold Ounce
$
1,058
$
1,221
$
1,109
By-product credits per ounce
(3
)
(56
)
(20
)
Cash Cost, After By-product Credits, per
Gold Ounce
$
1,055
$
1,165
$
1,089
AISC, Before By-product Credits, per Gold
Ounce
$
1,376
$
1,897
$
1,540
By-product credits per ounce
(3
)
(56
)
(20
)
AISC, After By-product Credits, per Gold
Ounce
$
1,373
$
1,841
$
1,520
In thousands (except per ounce
amounts)
Nine Months Ended September 30,
2019
Total Silver
Total Gold
Total
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
187,724
262,516
$
450,240
Depreciation, depletion and
amortization
(40,053
)
(98,985
)
(139,038
)
Treatment costs
36,585
1,548
38,133
Change in product inventory
8,498
(2,126
)
6,372
Reclamation and other costs
(2,469
)
(2,026
)
(4,495
)
Exclusion of Lucky Friday costs
(12,800
)
—
(12,800
)
Cash Cost, Before By-product Credits
(1)
177,485
160,927
338,412
Reclamation and other costs
2,581
1,520
4,101
Exploration
6,182
4,938
11,120
Sustaining capital
24,512
55,925
80,437
General and administrative
26,855
—
26,855
AISC, Before By-product Credits (1)
237,615
223,310
460,925
By-product credits:
Zinc
(67,957
)
—
(67,957
)
Gold
(65,578
)
—
(65,578
)
Lead
(20,764
)
—
(20,764
)
Silver
(2,879
)
(2,879
)
Total By-product credits
(154,299
)
(2,879
)
(157,178
)
Cash Cost, After By-product Credits
$
23,186
$
158,048
$
181,234
AISC, After By-product Credits
$
83,316
$
220,431
$
303,747
Divided by ounces produced
8,595
145
Cash Cost, Before By-product Credits, per
Ounce
$
20.65
$
1,109
By-product credits per ounce
(17.95
)
(20
)
Cash Cost, After By-product Credits, per
Ounce
$
2.70
$
1,089
AISC, Before By-product Credits, per
Ounce
$
27.65
$
1,540
By-product credits per ounce
(17.95
)
(20
)
AISC, After By-product Credits, per
Ounce
$
9.70
$
1,520
In thousands (except per ounce
amounts)
Nine Months Ended September 30,
2018
Greens Creek
Lucky Friday(2)
San Sebastian
Corporate(3)
Total Silver
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
141,763
$
5,844
$
31,177
$
178,784
Depreciation, depletion and
amortization
(34,880
)
(803
)
(3,586
)
(39,269
)
Treatment costs
29,136
761
627
30,524
Change in product inventory
995
(2,182
)
1,858
671
Reclamation and other costs
(2,323
)
—
(1,374
)
(3,697
)
Exclusion of Lucky Friday costs
—
(3,620
)
(3,620
)
Cash Cost, Before By-product Credits
(1)
134,691
—
28,702
163,393
Reclamation and other costs
2,548
—
314
2,862
Exploration
2,909
—
6,628
1,351
10,888
Sustaining capital
34,694
—
1,119
1,338
37,151
General and administrative
27,849
27,849
AISC, Before By-product Credits (1)
174,842
—
36,763
242,143
By-product credits:
Zinc
(80,308
)
—
(80,308
)
Gold
(43,237
)
—
(15,505
)
(58,742
)
Lead
(24,037
)
—
(24,037
)
Total By-product credits
(147,582
)
—
(15,505
)
(163,087
)
Cash Cost, After By-product Credits
$
(12,891
)
$
—
$
13,197
$
306
AISC, After By-product Credits
$
27,260
$
—
$
21,258
$
79,056
Divided by ounces produced
5,789
—
1,594
7,383
Cash Cost, Before By-product Credits, per
Ounce
$
23.27
$
—
$
18.01
$
22.14
By-product credits per ounce
(25.49
)
—
(9.73
)
(22.09
)
Cash Cost, After By-product Credits, per
Ounce
$
(2.22
)
$
—
$
8.28
$
0.05
AISC, Before By-product Credits, per
Ounce
$
30.20
$
23.07
$
32.80
By-product credits per ounce
(25.49
)
(9.73
)
(22.09
)
AISC, After By-product Credits, per
Ounce
$
4.71
$
—
$
13.34
$
10.71
In thousands (except per ounce
amounts)
Nine Months Ended September 30,
2018
Casa Berardi
Nevada Operations (4)
Total Gold
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
152,150
$
19,319
$
171,469
Depreciation, depletion and
amortization
(54,879
)
(9,187
)
(64,066
)
Treatment costs
1,628
42
1,670
Change in product inventory
(1,482
)
7,311
5,829
Reclamation and other costs
(421
)
—
(421
)
Cash Cost, Before By-product Credits
(1)
96,996
17,485
114,481
Reclamation and other costs
421
—
421
Exploration
3,374
3,322
6,696
Sustaining capital
27,120
7,061
34,181
AISC, Before By-product Credits (1)
127,911
27,868
155,779
By-product credits:
Silver
(491
)
(1,232
)
(1,723
)
Total By-product credits
(491
)
(1,232
)
(1,723
)
Cash Cost, After By-product Credits
$
96,505
$
16,253
$
112,758
AISC, After By-product Credits
$
127,420
$
26,636
$
154,056
Divided by ounces produced
127
14
141
Cash Cost, Before By-product Credits, per
Ounce
$
764
$
1,268
$
814
By-product credits per ounce
(4
)
(89
)
(12
)
Cash Cost, After By-product Credits, per
Ounce
$
760
$
1,179
$
802
AISC, Before By-product Credits, per
Ounce
$
1,008
$
2,021
$
1,107
By-product credits per ounce
(4
)
(89
)
(12
)
AISC, After By-product Credits, per
Ounce
$
1,004
$
1,932
$
1,095
In thousands (except per ounce
amounts)
Nine Months Ended September 30,
2018
Total Silver
Total Gold
Total
Cost of sales and other direct production
costs and depreciation, depletion and amortization
$
178,784
171,469
$
350,253
Depreciation, depletion and
amortization
(39,269
)
(64,066
)
(103,335
)
Treatment costs
30,524
1,670
32,194
Change in product inventory
671
5,829
6,500
Reclamation and other costs
(3,697
)
(421
)
(4,118
)
Exclusion of Lucky Friday costs
(3,620
)
—
(3,620
)
Cash Cost, Before By-product Credits
(1)
163,393
114,481
277,874
Reclamation and other costs
2,862
421
3,283
Exploration
10,888
6,696
17,584
Sustaining capital
37,151
34,181
71,332
General and administrative
27,849
—
27,849
AISC, Before By-product Credits (1)
242,143
155,779
397,922
By-product credits:
Zinc
(80,308
)
—
(80,308
)
Gold
(58,742
)
—
(58,742
)
Lead
(24,037
)
—
(24,037
)
Silver
(1,723
)
(1,723
)
Total By-product credits
(163,087
)
(1,723
)
(164,810
)
Cash Cost, After By-product Credits
$
306
$
112,758
$
113,064
AISC, After By-product Credits
$
79,056
$
154,056
$
233,112
Divided by ounces produced
7,383
141
Cash Cost, Before By-product Credits, per
Ounce
$
22.14
$
814
By-product credits per ounce
(22.09
)
(12
)
Cash Cost, After By-product Credits, per
Ounce
$
0.05
$
802
AISC, Before By-product Credits, per
Ounce
$
32.80
$
1,107
By-product credits per ounce
(22.09
)
(12
)
AISC, After By-product Credits, per
Ounce
$
10.71
$
1,095
(1)
Includes all direct and indirect operating
costs related to the physical activities of producing metals,
including mining, processing and other plant costs, third-party
refining and marketing expense, on-site general and administrative
costs, royalties and mining production taxes, before by-product
revenues earned from all metals other than the primary metal
produced at each unit. AISC, Before By-product Credits also
includes on-site exploration, reclamation, and sustaining capital
costs.
(2)
The unionized employees at Lucky Friday
have been on strike since March 13, 2017, and production at Lucky
Friday has been limited since that time. For the first nine
months of 2019, costs related to suspension of full production
totaling approximately $5.7 million, along with $3.1 million in
non-cash depreciation expense for that period, have been excluded
from the calculations of cost of sales and other direct production
costs and depreciation, depletion and amortization, Cash Cost,
Before By-product Credits, Cash Cost, After By-product Credits,
AISC, Before By-product Credits, and AISC, After By-product
Credits.
(3)
AISC, Before By-product Credits for our
consolidated silver properties includes corporate costs for general
and administrative expense, exploration and sustaining capital.
(4)
Nevada operations acquired on July 20,
2018.
Reconciliation of Net Loss Income Applicable to Common
Shareholders (GAAP) to Adjusted Net Loss Applicable to Common
Stockholders (non-GAAP)
This release refers to a non-GAAP measure of adjusted net loss
applicable to common stockholders and adjusted net 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 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 September
30,
Nine Months Ended September
30,
2019
2018
2019
2018
Net loss applicable to common shareholders
(GAAP)
$
(19,654
)
$
(23,322
)
$
(91,995
)
$
(3,284
)
Adjusting items:
Loss (gain) on derivatives contracts
4,718
(19,460
)
2,719
(40,271
)
Environmental accruals
472
—
472
—
Foreign exchange (gain) loss
(773
)
2,212
6,741
(2,856
)
Provisional price (gains) losses
(619
)
640
81
3,272
Suspension-related costs
3,722
6,519
8,766
18,337
Acquisition costs
183
6,139
593
9,656
Loss (gain) on disposition or impairment
of properties, plants, equipment and mineral interests
24
(3,208
)
4,666
(3,374
)
Unrealized loss on investments
126
2,207
1,159
2,461
Adjusted net loss applicable to common
shareholders
$
(11,801
)
$
(28,273
)
$
(66,798
)
$
(16,059
)
Weighted average shares - basic
489,971
452,636
486,298
417,532
Weighted average shares - diluted
489,971
452,636
486,298
417,532
Basic adjusted net loss per common
share
$
(0.02
)
$
(0.06
)
$
(0.14
)
$
(0.04
)
Diluted adjusted net loss per common
share
$
(0.02
)
$
(0.06
)
$
(0.14
)
$
(0.04
)
Reconciliation of Net 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 twelve
months (or “LTM adjusted EBITDA”), which is a measure of our
ability to service our debt. Adjusted EBITDA is calculated as net
loss before the following items: interest expense, income tax
provision, depreciation, depletion, and amortization expense,
acquisition costs, foreign exchange gains and losses, unrealized
gains and losses on derivative contracts, Lucky Friday
suspension-related costs, provisional price gains and losses,
stock-based compensation, unrealized gains on investments,
provisions for closed operations, and interest and other income
(expense). Net debt is calculated as total debt, which consists of
the liability balances for our Senior Notes, RQ Notes, revolving
credit facility, finance leases, and other notes payable, less our
cash and cash equivalents. Management believes that, when presented
in conjunction with comparable GAAP measures, Adjusted EBITDA and
net debt to LTM adjusted EBITDA are useful to investors in
evaluating our operating performance and ability to meet our debt
obligations. The following table reconciles net loss and debt to
Adjusted EBITDA and net debt:
Dollars are in thousands
Three Months Ended
Nine Months Ended
Twelve Months Ended
Sept 30, 2019
Sept 30, 2018
Sept 30, 2019
Sept 30, 2018
Sept 30, 2019
Sept 30, 2018
Net loss
$
(19,516
)
$
(23,184
)
$
(91,581
)
$
(2,870
)
$
(115,274
)
$
(31,837
)
Plus: Interest expense
11,777
10,146
33,777
30,019
44,702
39,608
Plus/(Less): Income taxes
(1,614
)
(2,679
)
(20,009
)
(1,484
)
(25,226
)
37,043
Plus: Depreciation, depletion and
amortization
50,774
43,464
139,038
103,335
169,747
136,948
Plus: Acquisition costs
183
6,139
593
9,656
982
9,656
Plus: Lucky Friday suspension-related
costs
3,722
6,519
8,766
18,337
11,122
25,253
Plus: Deferred revenue net of production
costs
10,912
—
10,912
—
10,912
—
Less: Loss (gain) on disposition of
properties, plants, equipment and mineral interests
24
(3,208
)
4,666
(3,374
)
5,247
(4,492
)
Plus: Stock-based compensation
1,206
2,232
4,758
4,636
6,364
6,016
Plus: Provision for closed operations and
environmental matters
2,089
1,317
5,298
3,957
7,431
5,086
Plus/(Less): Foreign exchange (gain)
loss
(773
)
2,212
6,741
(2,856
)
(713
)
(3,434
)
Plus/(Less): Unrealized losses (gains) on
derivative contracts
11,326
18,253
8,924
(7,955
)
8,943
(4,109
)
(Less)/Plus: Provisional price (gains)
losses
(619
)
640
81
3,272
612
3,094
(Less)/Plus: Other
295
2,589
3,639
2,791
4,605
2,457
Adjusted EBITDA
$
69,786
$
64,440
$
115,603
$
157,464
$
129,454
$
221,289
Total debt
$
598,891
$
548,774
Less: Cash and cash equivalents
$
(32,995
)
$
(60,856
)
Net debt
$
565,896
$
487,918
Net debt/LTM adjusted EBITDA
(non-GAAP)
4.4
2.2
Reconciliation of Cash Provided by Operating Activities
(GAAP) to Free Cash Flow (non-GAAP)
This release refers to a non-GAAP measure of free cash flow,
calculated as cash provided by operating activities, less additions
to properties, plants, equipment and mineral interests. Management
believes that, when presented in conjunction with comparable GAAP
measures, free cash flow is useful to investors in evaluating our
operating performance. The following table reconciles cash provided
by operating activities to free cash flow:
Dollars are in thousands
Three Months Ended
Nine Months Ended
Sept 30, 2019
Sept 30, 2018
Sept 30, 2019
Sept 30, 2018
Cash provided by operating activities
$
54,896
$
28,192
$
63,609
$
75,210
Less: Additions to properties, plants
equipment and mineral interests
(26,093
)
(39,981
)
(97,338
)
(83,285
)
Free cash flow
$
28,803
$
(11,789
)
$
(33,729
)
$
(8,075
)
Table 1 - Assay
Results
Casa Berardi (Quebec)
Zone
Drill Hole Number
Drill Hole Section
Drill Hole Azm/Dip
Sample From (feet)
Sample To (feet)
True Width (feet)
Gold (oz/ton)
Depth From Mine Surface
(feet)
Surface West Mine 105 Area
CBF-105-039
10704
360/-65
472.3
629.8
42.6
0.04
525
105
CBF-105-040
10545
360/-68
460.5
526.4
25.9
0.03
482
105
CBF-105-041
10525
360/-45
324.7
340.8
11.8
0.06
259
105
CBF-105-042
10420
360/-48
329.3
342.1
8.2
0.12
273
105
including
331.0
334.6
2.3
0.25
271
105
CBF-105-042
10418
360/-48
472.3
478.9
4.6
0.17
374
105
CBF-105-042
10418
360/-48
511.7
521.5
7.2
0.15
403
Underground Principal Mine 119
Area
CBP-0780
11895
200/42
265.7
280.4
13.8
0.14
1548
123
CBP-0808
12253
183/1
246.0
284.7
32.0
0.35
3328
123
CBP-0808
12250
183/1
334.6
359.2
24.3
0.14
3322
123
CBP-0844
12275
189/-16
270.6
300.1
28.6
0.10
1838
123
CBP-0845
12265
199/29
310.3
324.7
11.9
0.33
1622
Upper 124 Area
PTR-1704
12365
48/40
152.5
177.8
13.8
0.15
456
124
including
175.2
177.8
2.0
0.76
447
124
PTR-1705
12422
360/49
98.4
113.2
11.5
0.37
467
124
including
103.3
108.2
3.3
0.60
467
East Mine 148 Area level
485-525
CBE-0171
14750
343/-34
1072.6
1090.6
16.1
0.45
2162
148
including
1084.4
1090.6
4.9
0.87
2165
148
CBE-0172
14773
346/-33
1036.2
1062.7
22.3
0.65
2120
148
including
1044.7
1059.8
12.8
1.05
2121
148
CBE-0173
14769
346/-39
1118.5
1151.3
26.6
0.63
2257
148
including
1130.9
1148.0
13.4
1.12
2260
148
CBE-0174
14815
355/-33
1044.4
1071.9
24.3
0.38
2107
148
including
1044.4
1048.0
3.0
0.67
2102
148
including
1065.7
1069.0
3.0
1.06
2112
148
CBE-0175
14814
355/-37
1087.6
1116.8
23.6
0.18
2188
148
CBE-0176
14817
355/-29
1021.7
1056.2
30.2
0.16
2074
148
including
1048.0
1052.9
4.6
0.47
2079
148
CBE-0177
14755
340/-24
993.8
1011.9
15.2
0.78
2008
148
CBE-0178
14758
340/-29
1016.8
1034.5
14.7
1.03
2061
148
CBE-0495-002
14880
304/-14
1425.9
1468.9
8.5
0.11
1729
148
Including
1442.0
1451.7
2.0
0.41
1729
148
CBE-0525-006
14817
36/24
204.5
263.6
13.1
0.14
1687
148
Including
247.5
263.6
3.3
0.34
1685
148
CBE-0525-009
14835
360/-44.5
136.7
177.6
9.8
0.19
1750
148
Including
145.3
161.4
3.6
0.41
1749
148
CBE-0187
14820
358/-27
3395.1
3443.6
13.1
0.18
2062
148
Including
3422.0
3432.8
2.6
0.37
2063
Surface East Mine 148 Area
CBF-148-076
14534
360/-46
157.4
250.9
64.0
0.03
121
148
including
226.3
236.2
7.2
0.14
175
148
CBF-148-079
14580
20/-53
216.5
236.2
10.8
0.06
192
148
including
216.5
221.4
2.6
0.21
186
148
CBF-148-080
14597
33/-48
246.0
314.9
48.5
0.06
214
148
including
290.3
305.0
8.5
0.15
226
Explo Underground East Mine
148
CBE-0179
14745
334/-22
993.8
1012.5
15.7
0.30
2002
148
including
1005.6
1012.5
5.2
0.79
2005
148
CBE-0180
14785
349/-30
1018.4
1036.5
13.8
0.22
2065
148
including
1018.4
1026.0
5.6
0.44
2063
148
CBE-0181
14785
349/-36
998.8
1011.9
9.8
0.11
2126
148
including
1000.4
1005.6
3.9
0.23
2125
148
CBE-0181
14783
349/-36
1061.4
1096.8
28.9
0.14
2163
148
including
1079.1
1092.2
9.8
0.23
2167
Explo Underground West Mine
113
CBW-1148
11436
200/-35
417.5
427.1
5.6
0.15
3479
113
CBW-1149
11453
200/-16
167.3
176.1
8.5
0.13
3304
113
CBW-1149
11439
200/-16
331.6
342.4
10.5
0.11
3340
113
CBW-1149
11436
200/-16
369.3
373.9
4.3
0.26
3346
113
CBW-1149
11432
200/-16
416.6
417.9
1.2
0.13
3354
Explo Underground Lower 118
CBP-0818
11690
0/-15
194.2
196.8
7.9
0.13
3384
118
CBP-0818
11691
0/-15
664.9
678.6
13.1
0.16
3391
118
including
664.9
669.1
3.6
0.48
3390
118
CBP-0818
11695
0/-15
795.4
800.3
4.8
0.14
3417
Surface East Mine 152 Area
CBS-19-923
15313
153/-55
478.9
482.2
2.3
0.21
392
Explo Surface East Mine 160
Area
CBF-160-087
15955
360/-59
681.9
757.7
64.0
0.08
625
160
including
681.9
703.6
18.0
0.21
602
160
CBF-160-089
15942
2/-65
669.1
744.6
32.8
0.08
651
160
including
688.8
713.1
11.2
0.15
646
160
CBF-160-091
15944
360/-78
531.4
701.9
42.6
0.04
616
160
including
531.4
539.6
1.6
0.22
538
San Sebastian (Mexico)
Zone
Drill Hole Number
Sample From (ft)
Sample To (ft)
Width (feet)
True Width (feet)
Gold (oz/ton)
Silver (oz/ton)
Depth From Mine Surface
(feet)
Explo El Toro Vein
SS-1827
156.7
170.6
13.8
13.2
0.10
8.1
95
El Toro Vein
SS-1840
209.9
219.0
9.1
7.6
0.12
8.1
163
El Toro Vein
SS-1841
297.9
306.2
8.3
6.9
0.16
14.6
240
El Toro Vein
SS-1842
388.3
411.1
22.8
17.2
0.13
8.5
325
El Toro Vein
SS-1843
214.4
222.4
8.0
6.6
0.38
21.2
168
El Toro Vein
SS-1844
303.3
310.2
6.9
5.5
0.13
9.5
245
El Toro Vein
SS-1845
392.9
413.2
20.3
16.4
0.11
10.0
328
El Toro Vein
SS-1846
505.9
509.1
3.2
2.3
0.29
15.5
420
El Toro Vein
SS-1849
132.0
146.6
14.7
14.3
0.08
4.3
78
El Toro Vein
SS-1850
112.4
115.3
2.9
2.8
0.12
16.4
62
El Toro Vein
SS-1852
194.0
198.9
4.9
3.7
0.14
16.6
151
El Toro Vein
SS-1853
277.9
287.1
9.2
6.6
0.07
9.4
225
El Toro Vein
SS-1854
348.1
350.5
2.3
1.8
0.13
10.0
286
El Toro Vein
SS-1855
446.0
454.6
8.6
6.4
0.12
15.4
374
El Toro Vein
SS-1856
417.0
423.7
6.7
5.2
0.06
6.0
345
El Toro Vein
SS-1857
505.8
513.2
7.4
5.8
0.12
19.0
422
El Toro Vein
SS-1859
170.3
176.1
5.8
4.8
0.04
8.1
135
El Toro Vein
SS-1860
300.6
305.0
4.5
3.7
0.05
4.9
247
El Toro Vein
SS-1863
394.1
402.9
8.8
6.8
0.32
33.0
329
El Toro Vein
SS-1866
80.8
88.6
7.8
7.2
0.08
6.6
44
El Toro Vein
SS-1867
171.9
179.2
7.3
5.4
0.09
6.8
137
El Toro HW Vein
SS-1828
129.0
135.7
6.8
6.5
0.05
5.1
82
Middle Vein
SS-MV-100-071
258.1
263.5
5.4
5.0
0.08
22.5
553
Middle Vein
SS-MV-100-072
213.8
217.8
4.0
3.8
0.13
7.5
545
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)
Northwest West Definition
GC5259
63/-36
154.4
182.3
27.7
11.7
0.06
6.6
3.7
-826
GC5266
63/-22
179.0
187.8
7.6
16.9
0.03
17.9
9.5
-783
GC5270
63/-39
163.5
165.0
1.5
28.6
0.08
22.7
11.1
-820
GC5274
63/-2
248.5
258.0
5.8
21.2
0.04
5.8
3.3
-721
GC5274
63/-2
269.0
279.0
5.7
20.8
0.05
11.0
5.8
-721
GC5274
63/-2
310.6
332.6
18.0
13.3
0.04
4.8
3.0
-720
GC5274
63/-2
471.8
473.5
1.3
9.0
0.11
9.4
4.2
-717
GC5277
63/-1
333.0
366.5
32.2
29.5
0.21
10.0
5.7
-704
GC5278
63/4
309.0
313.0
2.1
10.0
0.03
5.1
2.6
-698
GC5278
63/4
330.0
339.5
6.4
33.6
0.05
11.7
6.3
-697
GC5278
63/4
351.5
356.5
3.5
12.3
0.18
2.0
1.0
-691
GC5278
63/4
504.4
507.0
2.5
20.2
0.32
11.7
5.8
-690
GC5280
63/2
340.2
367.1
26.6
18.5
0.14
9.0
5.4
-708
GC5280
63/2
484.7
491.9
6.4
8.3
0.06
7.2
3.3
-710
GC5285
63/-1
335.0
338.0
2.6
22.2
0.36
1.0
0.5
-709
GC5285
63/-1
353.0
355.7
2.2
27.7
0.08
10.2
5.2
-708
GC5285
63/-1
541.1
543.0
1.4
21.7
0.03
12.0
8.9
-695
GC5288
63/32
444.4
446.0
1.6
10.4
0.01
12.9
4.0
-487
GC5288
63/32
452.0
453.0
1.0
8.4
0.01
10.9
3.7
-483
GC5288
63/32
528.0
545.0
10.0
7.2
0.05
9.3
3.2
-441
GC5292
63/40
345.8
347.0
1.1
11.4
0.01
9.2
3.1
-483
GC5293
63/-5
314.1
343.2
24.7
15.6
0.10
8.3
4.6
-736
GC5294
63/-20
239.0
252.0
8.7
42.8
0.20
30.3
21.1
-798
East Definition
GC5264
63/-30
325.9
330.4
4.3
16.7
0.20
16.5
4.0
485
GC5264
63/-30
345.5
347.2
1.7
14.5
0.17
24.2
11.0
482
GC5265
63/-46
286.7
302.4
15.6
6.7
0.13
9.9
2.3
424
GC5268
63/-65
328.9
333.7
4.5
38.3
0.26
10.6
2.1
337
GC5272
63/-55
342.3
345.5
2.1
72.1
0.23
5.1
2.9
196
GC5276
63/-77
458.0
469.3
10.6
31.7
0.35
9.9
4.0
367
GC5290
63/-50
338.5
341.0
2.4
114.4
0.23
4.9
1.7
399
GC5291
63/-73
414.0
423.0
8.0
17.2
0.30
12.4
4.6
251
GC5308
63/-71
314.5
317.0
2.3
16.1
0.15
9.3
1.8
342
GC5308
63/-71
322.0
323.0
1.0
12.8
0.03
19.0
4.3
337
GC5308
63/-71
325.5
326.5
1.0
17.0
0.08
9.0
3.8
333
GC5318
63/-5
405.3
406.3
1.0
7.4
0.16
11.9
4.5
605
GC5318
63/-5
408.5
409.5
1.0
7.3
0.08
13.5
4.6
605
GC5319
63/4
431.0
432.0
0.9
18.9
0.55
15.4
7.1
678
GC5320
63/-34
322.6
325.0
2.4
8.6
0.14
10.8
5.2
467
GC5323
63/-44
294.5
298.5
3.9
6.9
0.21
29.4
6.7
432
9A Definition
GC5299
243/-2
235.7
239.5
3.6
13.6
0.03
18.5
10.1
-390
GC5300
61/29
268.0
269.7
1.5
2.4
0.04
21.5
9.1
-176
GC5304
254/-2
286.0
292.0
1.1
13.8
0.03
21.6
11.6
-391
GC5313
78/-6
281.0
293.0
7.6
17.5
0.16
18.2
4.0
-347
GC5315
84/-6
423.0
424.0
0.9
21.5
0.14
23.4
4.1
-370
GC5302
49/33
295.0
303.0
7.1
29.2
0.11
1.0
0.2
-159
Fire Creek (Nevada)
Zone
Drill Hole Number
Drill Hole Azm/Dip
Sample From (feet)
Sample To (feet)
Width (feet)
True Width (feet)
Gold (oz/ton)
Silver (oz/ton)
Depth From Mine Portal (feet)
Spiral 2
FCU-1120
45/9
167.7
168.9
1.2
1.1
0.32
0.3
-663
Spiral 2
FCU-1123
94/10
123.3
135.4
12.1
11.8
1.06
0.4
-663
Spiral 2
FCU-1134
65/0
0.0
3.0
3.0
2.9
0.51
0.3
-626
Spiral 2
FCU-1134
65/0
25.0
29.0
4.0
3.9
0.21
0.3
-626
Spiral 2
FCU-1135
115/25
5.0
6.2
1.2
0.8
0.64
0.9
-626
Spiral 2
FCU-1136
75/0
1.9
2.9
1.0
1.0
0.29
0.3
-628
Spiral 2
FCU-1138
75/0
12.5
13.8
1.3
1.2
2.87
2.9
-626
Spiral 2
FCU-1167
53/0
10.7
29.2
18.5
13.6
0.23
0.3
-726
Spiral 2
including
27.1
29.2
2.1
1.5
1.02
0.3
-726
Spiral 2
FCU-1167
53/0
63.7
64.7
1.0
0.8
0.73
0.3
-726
Spiral 2
FCU-1169
20/20
5.0
8.3
3.3
2.8
4.65
2.1
-723
Spiral 2
FCU-1169
20/20
20.0
26.5
6.5
6.0
0.18
0.3
-716
Spiral 2
FCU-1169
20/20
28.2
43.2
15.0
13.5
1.64
1.0
-714
Spiral 2
FCU-1169
20/20
45.8
50.0
4.2
3.1
0.18
0.3
-709
Spiral 2
FCU-1157A
45/0
125.4
126.7
1.3
1.1
0.70
0.3
-71
Spiral 2
FCU-1158
45/-25
54.6
56.7
2.1
1.6
0.10
1.5
-95
Spiral 2
FCU-1160
100/0
31.8
32.5
0.7
0.6
1.50
0.9
-71
Spiral 2
FCU-1162
74/-24
6.3
9.4
3.1
unknown
0.15
0.3
154
Spiral 2
FCU-1163
90/-27
182.9
197.4
14.5
7.5
0.43
0.4
71
Spiral 2
FCU-1163
90/-27
253.4
255.4
2.0
1.5
1.07
0.7
42
Spiral 2
FCU-1163
90/-27
283.0
286.7
3.7
2.5
0.28
0.3
28
Spiral 2
FCU-1165
68/-20
123.5
125.0
1.5
unknown
0.59
0.3
110
Spiral 2
FCU-1171
42/-16
243.0
249.9
6.9
6.3
0.57
0.4
84
Spiral 2
including
245.0
246.0
1.0
0.9
3.00
1.2
84
Spiral 3
FCU-1149
235/-15
40.0
46.0
6.0
5.1
1.68
0.7
-508
Spiral 3
including
40.0
44.0
4.0
3.4
2.45
0.9
-508
Spiral 3
FCU-1153
225/35
84.9
87.6
2.7
unknown
0.24
0.5
-449
Spiral 3
FCU-1153
225/35
167.1
167.7
0.6
0.3
0.63
0.8
-402
Spiral 3
FCU-1154
252/0
49.4
54.2
4.8
4.6
4.29
2.5
-498
Spiral 3
including
49.4
51.6
2.2
2.1
8.49
4.5
-498
Spiral 3
including
53.6
54.2
0.6
0.6
1.43
1.1
-498
Spiral 3
FCU-1155
280/25
6.2
8.2
2.0
unknown
0.32
0.2
-495
Spiral 3
FCU-1155
280/25
60.7
62.9
2.2
unknown
4.57
3.4
-472
Spiral 3
FCU-1149
235/-15
40.0
46.0
6.0
5.1
1.68
0.7
-508
Spiral 3
including
40.0
44.0
4.0
3.4
2.45
0.9
-508
Spiral 3
FCU-1150
235/20
62.3
63.7
1.4
unknown
0.39
0.3
-475
Spiral 3
FCU-1151
257/0
38.6
42.0
3.4
0.3
0.36
0.6
-457
Spiral 4
FCU-1118
84/-16
356.7
358.0
1.3
1.1
0.27
0.3
-610
Spiral 4
FCU-1118
84/-16
371.0
374.0
3.0
unknown
0.20
0.3
-610
Spiral 4
FCU-1118
84/-16
432.6
438.6
6.0
5.4
2.37
1.4
-631
Spiral 4
including
432.6
433.5
0.9
0.8
13.72
7.6
-631
Spiral 9
FCU-1142
290/-45
329.0
333.5
4.5
3.8
0.13
0.3
-185
Spiral 9
FCU-1148
308/-38
445.3
453.7
8.4
7.2
0.19
0.4
-228
Spiral 9
FCU-1148
308/-38
684.8
691.8
7.0
6.1
0.41
0.6
-375
Hollister (Nevada)
Zone
Drill Hole Number
Drill Hole Azm/Dip
Sample From (feet)
Sample To (feet)
Width (feet)
True Width (feet)
Gold (oz/ton)
Silver (oz/ton)
Depth From Mine Surface
(feet)
Hatter Footwall
HUC-00007
324/-49
2273.0
2273.7
0.7
0.5
0.45
1.0
-1980
Hatter Footwall
HUC-00007
and
2336.6
2337.9
1.3
1.0
0.16
0.8
-2021
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191107005355/en/
For further information, please contact: Mike Westerlund Vice
President - Investor Relations 800-HECLA91 (800-432-5291) Email:
hmc-info@hecla-mining.com Website: www.hecla-mining.com
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