Hecla Reports Second Quarter 2021 Results

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·16-min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Cash provided by operations 2nd highest in its history, guidance improved

COEUR D'ALENE, Idaho, August 05, 2021--(BUSINESS WIRE)--Hecla Mining Company (NYSE:HL) today announced second quarter 2021 financial and operating results.

HIGHLIGHTS**

  • Sales of $218.0 million, a 31% increase with the largest source being silver.

  • Gross profit of $59.3 million, an increase of $25.2 million.

  • Cash provided by operating activities was $86.3 million, with $31.9 million of additions to properties, plant, equipment and mineral interests, resulting in $54.4 million of quarterly free cash flow.1

  • Silver production of 3.5 million ounces, an increase of 4% over prior year due to full production at Lucky Friday.

  • Gold production of 59,139 ounces, a decrease of 1%.

  • Net income applicable to common shareholders of $0.6 million, or $0.00 per share.

  • Adjusted net income applicable to common shareholders of $32.8 million, or $0.06 per share.2

  • Adjusted EBITDA of $84.0 million, an increase of 31%.3

  • Net debt/adjusted EBITDA (last 12 months) of 1.2x, the lowest in 9 years since the issuance of Hecla's prior Senior Notes.4

  • Near record-setting quarter in Hecla's 130-year history with the 2nd best revenues, gross profit, cash provided by operations, and adjusted EBITDA.

  • Strong balance sheet with over $400 million of available liquidity.

  • Gold production guidance increased and silver cost guidance reduced.

"Despite the continuing pandemic, Hecla had near record results across a number of metrics improving on the consistent performance of the past two years," said Phillips S. Baker, Jr., Hecla's President and CEO. "We generated over $54 million of free cash flow due to a combination of lower treatment charges, increasing throughput and recoveries, and higher prices. Our American silver mines produce more than 40% of all the silver mined in the United States and with silver being important for the transformation to renewable energy, electric vehicles and 5G, Hecla's growing silver production and low costs make it well-positioned for even better results in the future."

** All comparisons to the second quarter of 2020.

FINANCIAL OVERVIEW

Second Quarter Ended

Six Months Ended

HIGHLIGHTS

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

FINANCIAL DATA

Sales (000)

$

217,983

$

166,355

$

428,835

$

303,280

Gross profit (000)

$

59,260

$

34,079

$

124,072

$

45,451

Income (loss) applicable to common shareholders (000)

$

647

$

(14,166

)

$

19,480

$

(31,489

)

Basic and diluted income (loss) per common share (in cents)

0.1

(3.0

)

3.6

(6.0

)

Cash provided by operating activities (000)

$

86,304

$

37,526

$

124,240

$

42,453

Net income applicable to common shareholders for the second quarter 2021 was $0.6 million, or $0.00 per share, compared to net loss applicable to common shareholders of $14.2 million, or $(0.03) per share, for the same period in 2020. The improved second quarter result compared to the previous year was mainly due to the following items:

  • Higher prices for all metals with realized silver and zinc prices up approximately 50%.

  • Silver and lead production nearly doubled at Lucky Friday.

  • Greens Creek and Lucky Friday generated $42.8 million more gross profit.

  • Ramp-up costs decreased by $3.8 million due primarily to Lucky Friday's return to full production starting in the fourth quarter of 2020.

  • Lower interest expense by $1.6 million due to reduced debt, as no amounts were drawn on our revolving credit facility during the second quarter of 2021.

  • Income and mining tax benefits of $4.8 million compared to an income tax provision of $0.6 million.

These improvements were partially offset by:

  • Lower gross profit at Nevada Operations from a $9.4 million non-cash adjustment of stockpiled inventory to market value.

  • Higher costs at Casa Berardi driven by costs associated with higher volumes and higher maintenance-related activities.

  • Loss on metal derivatives contracts of $17.3 million ($13.3 million, non-cash and unrealized) compared to a loss of $14.0 million ($13.4 million, non-cash and unrealized) from increases in zinc and lead prices.

  • Exploration and pre-development expense increased by $8.7 million due to increased exploration at Midas, San Sebastian, Greens Creek and Casa Berardi, and for drift development to the Hatter Graben area in Nevada.

  • General and administrative expense increased by $4.1 million due to our higher share price increasing the value of accrued incentive compensation and the issuance of certain shares occurring a quarter earlier than in 2020.

  • An unrealized loss on investments in other mining companies of $0.8 million compared to a gain of $6.4 million.

Cash provided by operating activities was $86.3 million, $48.8 million higher than in the second quarter of 2020, due mainly to the $25.2 million increase in gross profit and the positive net impact of working capital changes.

Capital expenditures totaled $31.9 million, with $24.3 million spent at the operations compared to $13.7 million in the second quarter of 2020, with the increase primarily due to higher planned expenditures at Casa Berardi of $12.2 million for the period. Expenditures at Lucky Friday and Greens Creek were approximately $6.0 million each. Capital expenditures also included $7.5 million related to royalty repurchases at the Nevada Operations and Casa Berardi during the second quarter of 2021.

Metals Prices

The average realized silver price in the second quarter was $27.14 per ounce, 47% higher than the $18.44 in the second quarter of 2020. The average realized gold price increased 5% to $1,825 per ounce. Average realized lead and zinc prices increased 33% and 52%, respectively.

Three Months Ended
June 30,

Six Months Ended
June 30,

2021

2020

2021

2020

Silver –

London PM Fix ($/ounce)

$

26.69

$

16.33

$

26.49

$

16.63

Realized price per ounce

$

27.14

$

18.44

$

26.45

$

16.75

Gold –

London PM Fix ($/ounce)

$

1,816

$

1,711

$

1,807

$

1,647

Realized price per ounce

$

1,825

$

1,736

$

1,795

$

1,658

Lead –

LME Final Cash Buyer ($/pound)

$

0.96

$

0.76

$

0.94

$

0.80

Realized price per pound

$

1.04

$

0.78

$

0.99

$

0.78

Zinc –

LME Final Cash Buyer ($/pound)

$

1.32

$

0.89

$

1.29

$

0.93

Realized price per pound

$

1.35

$

0.89

$

1.34

$

0.89

∗ Realized prices are calculated by dividing gross revenues for each metal (which include the price adjustments and gains and losses on the forward contracts discussed below) by the payable quantities of each metal included in products sold during the period.

Base Metals Forward Sales Contracts

The following table summarizes the quantities of base metals committed under financially settled forward sales contracts, other than provisional hedges (which address changes in prices between shipment and settlement with customers), at June 30, 2021.

Pounds Under Contract
(in thousands)

Average Price per Pound

Zinc

Lead

Zinc

Lead

Contracts on forecasted sales

2021 settlements

15,708

14,991

$1.24

$0.94

2022 settlements

66,855

50,982

$1.28

$0.96

2023 settlements

76,280

52,250

$1.29

$1.00

2024 settlements

15,046

$1.33

These contracts represent about 45% of the forecasted payable zinc production through 2024 at an average price of $1.28 per pound, and 35% of the forecasted payable lead production through 2023 at an average price of $0.97 per pound.

Foreign Currency Forward Purchase Contracts

The following table summarizes the Canadian dollars the Company has committed to purchase under foreign exchange forward contracts at June 30, 2021, which is roughly 75% of forecasted Canadian dollar direct production costs for the remainder of 2021, 50% for 2022, 30% for 2023 and 20% for 2024:

Currency Under Contract
(in thousands of CAD)

Average Exchange Rate
CAD/USD

2021 settlements

61,026

$1.32

2022 settlements

84,754

$1.31

2023 settlements

52,565

$1.32

2024 settlements

26,446

$1.33

OPERATIONS OVERVIEW

Overview

The following table provides the production summary on a consolidated basis for the second quarter and six months ended June 30, 2021 and 2020:

Second Quarter Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

PRODUCTION SUMMARY

Silver -

Ounces produced

3,524,783

3,403,781

6,984,229

6,649,250

Payable ounces sold

3,415,464

3,348,639

6,445,490

5,930,918

Gold -

Ounces produced

59,139

59,982

111,143

118,774

Payable ounces sold

47,168

51,398

104,454

108,501

Lead -

Tons produced

11,540

8,977

22,244

14,087

Payable tons sold

10,663

8,026

19,331

12,156

Zinc -

Tons produced

17,211

17,855

33,318

30,702

Payable tons sold

11,143

11,989

22,170

21,825

The following tables provide a summary of the final production, cost of sales and other direct production costs and depletion, depreciation and amortization (referred to herein as "cost of sales"), cash cost, after by-product credits ("cash cost"), per silver and gold ounce, and all-in sustaining cost, after by-product credits ("AISC"), per silver and gold ounce for the second quarter and six months ended June 30, 2021, with comparisons to the prior year period:

Second Quarter Ended

Greens Creek

Lucky Friday

Casa Berardi

Nevada Operations

June 30, 2021

Silver

Gold

Silver

Gold

Silver

Gold

Silver

Gold

Silver

Production (ounces)

3,524,783

59,139

2,558,447

12,859

913,294

31,333

7,917

14,947

45,125

Increase/(decrease)

121,002

(843

)

(195,472

)

(245

)

443,757

577

2,422

156

29,137

Cost of sales (000)

$

83,390

$

75,333

$

55,488

$

$

27,901

$

57,340

$

$

17,993

$

Increase/(decrease)

$

10,253

$

16,194

$

(2,184

)

N/A

$

16,446

$

11,758

N/A

$

4,436

N/A

Cash cost per silver or gold ounce 5

$

0.18

$

1,254

$

(2.64

)

$

$

8.07

$

1,199

$

$

1,369

$

Increase/(decrease)

$

(4.79

)

$

408

$

(7.83

)

N/A

$

$

280

N/A

$

675

N/A

AISC per silver or gold ounce6

$

7.54

$

1,419

$

0.68

$

$

14.10

$

1,434

$

$

1,386

$

Increase/(decrease)

$

(1.79

)

$

442

$

(6.43

)

N/A

$

$

357

N/A

$

617

N/A

Six Months Ended

Greens Creek

Lucky Friday

Casa Berardi

Nevada Operations

June 30, 2021

Silver

Gold

Silver

Gold

Silver

Gold

Silver

Gold

Silver

Production (ounces)

6,984,229

111,143

5,143,317

26,125

1,777,195

67,523

18,592

17,495

45,125

Increase/(decrease)

334,979

(7,631

)

(386,309

)

748

1,211,910

10,015

7,163

(14,261

)

7,682

Cost of sales (000)

$

159,459

$

145,304

$

108,668

$

$

50,696

$

119,856

$

$

25,448

$

Increase/(decrease)

$

26,008

$

20,926

$

1,815

N/A

$

36,409

$

25,949

N/A

$

(5,023

)

N/A

Cash cost per silver or gold ounce 5

$

0.79

$

1,161

$

(1.65

)

$

$

7.85

$

1,106

$

$

1,371

$

Increase/(decrease)

$

(4.59

)

$

209

$

(7.06

)

N/A

$

$

25

N/A

$

655

N/A

AISC per silver or gold ounce6

$

7.38

$

1,357

$

1.14

$

$

14.17

$

1,347

$

$

1,393

$

Increase/(decrease)

$

(2.72

)

$

222

$

(6.37

)

N/A

$

$

20

N/A

$

606

N/A

Greens Creek Mine - Alaska

The Greens Creek Mine produced 2.6 million ounces of silver and 12,859 ounces of gold with the mill operating at an average of 2,362 tons per day (tpd) marking another quarter of consistently strong performance. The decrease in silver production compared to the second quarter of 2020 was due to planned lower grades resulting from mine sequencing. Compared to 2020, cost of sales decreased by $2.2 million and the per ounce silver cash cost and AISC decreased by $7.83 and $6.43, respectively, due to higher by-products credits resulting from higher by-product prices, lower treatment costs from favorable changes in smelter terms and lower production costs, driven partially by lower COVID-19 related costs.5,6

The Company's estimated 2021 silver production of 9.5 - 10.2 million ounces is unchanged and gold production increased from 40 - 43 thousand ounces to 43 - 45 thousand ounces. The estimate for 2021 cost of sales has been updated to $222 million. Estimated cash cost and AISC, each per silver ounce has been updated to ($1.00)-$1.00 and $3.25-$4.00, respectively, with lower costs due to anticipated higher by-product credits.5,6

Casa Berardi Mine - Quebec

At the Casa Berardi Mine, 31,333 ounces of gold were produced compared to 30,756 ounces in the second quarter of 2020 due to higher mill throughput which was partially offset by lower grades. The mill operated at an average of 4,117 tpd, which was 33% higher than the prior year period. The increase in cost of sales was due to higher throughput, mill contractor costs related to maintenance and optimization activities, and underground maintenance costs resulting from repairs and replacements of major components for the production fleet. The increase in cash cost and AISC per gold ounce for the second quarter of 2021 compared to 2020 was the result of the higher cost of sales, with the increase in AISC also resulting from higher sustaining capital spending.

In the 160 pit, 1.4 million tons of overburden were removed during the quarter. Ore from that pit is expected to start being mined and processed in Q4 2021, concurrent with the processing of the last of the East Mine Crown Pillar pit ore.

The Company's estimated 2021 gold production has been increased from 125 - 128 thousand ounces to 128 - 132 thousand ounces. The estimate for 2021 cost of sales has been updated to $220 million. Estimated cash cost and AISC, each per gold ounce has been updated from $900-$975 and $1,185-$1,275 to $1,000-$1,125 and $1,200-$1,325, respectively.5,6

Lucky Friday Mine - Idaho

At the Lucky Friday Mine, 0.9 million ounces of silver were produced in the quarter, an increase of 95% compared to the second quarter of 2020, with the mine at full production. The mill operated at an average of 906 tpd. We continue to test and optimize new mining methods to better manage seismicity and potentially increase productivity.

The cost of sales for the second quarter was $27.9 million, and the cash cost per silver ounce was $8.07. AISC was $14.10 per silver ounce.5,6

The Company's estimated 2021 silver production of 3.4 - 3.8 million ounces is unchanged. The estimate for 2021 cost of sales has been updated to $103 million. Estimated cash cost and AISC, each per silver ounce, has been updated to $7.60-$8.50 and $14.25-$16.25, respectively.5,6

Nevada Operations

At the Nevada operations, 14,947 ounces of gold and 45,125 ounces of silver were produced from processing previously stockpiled ore, including oxide material processed at the Midas mill and a bulk sample of refractory material processed at a third-party roaster facility. Total cost of sales for the second quarter was $18.0 million which included a $9.4 million write-down in the value of stockpile inventory to net realizable value due to lower than anticipated grades. Cash cost and AISC per gold ounce were $1,369 and $1,386, respectively, in the second quarter of 2021.5,6 The increase over the prior year period was due primarily to costs related to the ore stockpile inventory that was mined in previous periods and processed in the current period.

With processing of the oxide material complete, the Fire Creek Mine and Midas mill were placed on care and maintenance during the quarter. In the second half of 2021, approximately 10,000 tons of refractory material is expected to be processed as a test at a third-party autoclave facility. The ounces from this third-party processing are anticipated to be recognized as production at that time. Those ounces and any remaining finished goods inventory are expected to be sold in the second half of 2021. Pre-development for the Hatter Graben area at Hollister and exploration at Midas are ongoing.

EXPLORATION

Exploration expenses were $8.4 million for the second quarter, an increase of $6.4 million compared to the second quarter of 2020 primarily due to increased activity and focus on the Green Racer Sinter discovery at Midas and increased activity at Greens Creek, Casa Berardi, San Sebastian, Heva-Hosco and Kinskuch. Exploration guidance was increased to $40 million earlier in the quarter. An update of the exploration program will be provided later in the third quarter.

PRE-DEVELOPMENT

Pre-development spending was $2.9 million for the quarter, compared to $0.6 million for the second quarter of 2020. The increase over the prior year period is principally due to development of the decline to allow drilling of the Hatter Graben, which commenced late in the first quarter of 2021. Exploration drilling is expected in the third quarter. Pre-development guidance was increased to $8.5 million earlier in the quarter.

DIVIDENDS

Common

On August 4, 2021, the Board of Directors declared a quarterly cash dividend of $0.01125 per share of common stock, consisting of $0.00375 per share for the minimum dividend component and $0.0075 per share for the silver-linked dividend component. The common dividend is payable on or about September 3, 2021, to shareholders of record on August 23, 2021. The realized silver price was $27.14 in the second quarter satisfying the criteria for the silver-linked dividend component of the Company's dividend policy.

Preferred

The Board of Directors declared a quarterly cash dividend of $0.875 cent per share on the outstanding shares of Series B Cumulative Convertible Preferred Stock, payable on or about October 1, 2021, to shareholders of record on September 15, 2021.

2021 ESTIMATES7

The Company has updated its guidance for annual production, cost and expenditures as follows:

2021 Production Outlook

Silver Production

(Moz)

Gold Production

(Koz)

Silver Equivalent

(Moz)

Gold Equivalent

(Koz)

Previous

Current

Previous

Current

Previous

Current

Previous

Current

Greens Creek *

9.5-10.2

9.5-10.2

40-43

43-45

20.5-21.5

22-23

227-237

244-253.5

Lucky Friday *

3.4-3.8

3.4-3.8

N/A

N/A

6.2-6.4

6.2-6.4

67-70

67-70

Casa Berardi

N/A

N/A

125-128

128-132

11.5-11.7

11.7-12.1

125-128

128-132

Nevada Operations

N/A

N/A

20-22

20-21

1.8-2.0

1.8-1.9

20-22

20-21

Total7

12.9-14.0

12.9-14.0

185-193

191-198

40.0-41.6

41.7-43.3

439-457

459-476.5

* Equivalent ounces include Lead and Zinc production

2021 Cost Outlook

Cost of Sales (millions)

Cash cost, after by-product credits, per silver/gold ounce5

AISC, after by-product credits, per produced silver/gold ounce6

Previous

Current

Previous

Current

...

Current

Greens Creek

$213

$222

$1.50-$2.25

($1.00)-$1.00

$6.50-$7.25

$3.25-$4.00

Lucky Friday

$91

$103

$7.75-$9.75

$7.50-$8.50

$13.75-$16.50

$14.25-$16.25

Total Silver

$304

$325

$3.25-$4.25

$1.00-$2.00

$10.75-$12.50

$9.00-$11.00

Casa Berardi

$212

$220

$900-$975

$1,000-$1,125

$1,185-$1,275

$1,200-$1,325

Nevada Operations

$41

$43

$1,300-$1,425

$1,300-$1,425

$1,385-$1,525

$1,385-$1,525

Total Gold

$253

$263

$950-$1,050

$1,050-$1,200

$1,200-$1,300

$1,250-$1,350

2021 Capital and Exploration Outlook

(millions)

Previous

Current

Capital expenditures

$110

$120

Exploration expenditures (including Corporate Development)

$40

$40

Pre-development expenditures

$8.5

$8.5

CONFERENCE CALL, WEBCAST AND ONE-ON-ONE CALLS

A conference call and webcast will be held Thursday, August 5, at 10:00 a.m. Eastern Time to discuss these results. We recommend that you dial in at least 10 minutes before the call is due to commence. You may join the conference call by dialing toll-free 1-833-350-1380 or for international dialing 1-647-689-6934. The Participant Code is 8545015 and must be provided when dialing in.

Hecla's live and archived webcast can be accessed below or at www.hecla-mining.com under Investors/Events & Webcasts.

Webcast URL: https://event.on24.com/wcc/r/3190524/9E67287A786A4FA2AC9BAFEDA3EB30E7

One-on one calls are available from 3:00 p.m. to 5:00 p.m. ET. Hecla invites shareholders, investors, and other interested parties to schedule a personal, 30-minute virtual meeting (video or telephone) with a member of senior management to discuss operations, exploration, or ESG matters. Click on the link below to schedule a call (or copy and paste the link into your web browser). You can select a topic once you have entered the meeting calendar. If you are unable to book a time, either due to high demand or for other reasons, please reach out to Russell Lawlar, Sr. Vice President – CFO and Treasurer at rlawlar@hecla-mining.com or 208-769-4130.

One-on-One Meeting URL: https://calendly.com/2021-august-vie

ABOUT HECLA

Founded in 1891, Hecla Mining Company (NYSE:HL) is the largest silver producer in the United States. In addition to operating mines in Alaska, Idaho, and Quebec, Canada, the Company owns a number of exploration and pre-development projects in world-class silver and gold mining districts throughout North America.

NOTES

Non-GAAP Financial Measures

Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by generally accepted accounting principles in the United States (GAAP). These measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

(1) Free cash flow is a non-GAAP measure calculated as cash provided by operating activities less additions to properties, plants and equipment.

(2) Adjusted net income (loss) applicable to common stockholders is a non-GAAP measurement, a reconciliation of which to net income (loss) applicable to common stockholders, the most comparable GAAP measure, can be found at the end of the release. Adjusted net income (loss) is a measure used by management to evaluate the Company's operating performance but should not be considered an alternative to net income (loss) as defined by GAAP. They exclude certain impacts which are of a nature which we believe are not reflective of our underlying performance. Management believes that adjusted net income (loss) per common share provides investors with the ability to better evaluate our underlying operating performance.

(3) Adjusted EBITDA is a non-GAAP measurement, a reconciliation of which to net income (loss), the most comparable GAAP measure, can be found at the end of the release. Adjusted EBITDA is a measure used by management to evaluate the Company's operating performance but should not be considered an alternative to net income (loss), or cash provided by operating activities as those terms are defined by GAAP, and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. In addition, the Company may use it when formulating performance goals and targets under its incentive program.

(4) Net debt to adjusted EBITDA is a non-GAAP measurement, a reconciliation of adjusted EBITDA and net debt to the closest GAAP measurements of net income (loss) and debt can be found at the end of the release. It is an important measure for management to measure relative indebtedness and the ability to service the debt relative to its peers. It is calculated as total debt outstanding less total cash on hand divided by adjusted EBITDA.

(5) Cash cost, after by-product credits, per silver or gold ounce is a non-GAAP measurement, a reconciliation of which to cost of sales and other direct production costs and depreciation, depletion and amortization (sometimes referred to as "cost of sales" in this release), can be found at the end of the release. It is an important operating statistic that management utilizes to measure each mine's operating performance. It also allows the benchmarking of performance of each mine versus those of our competitors. As a primary silver mining company, management also uses cash cost, after by-product credits, per silver ounce on an aggregate basis - aggregating the Greens Creek, Lucky Friday and San Sebastian mines - to compare performance with that of other primary silver mining companies. Gold, lead and zinc produced have been treated as by-product credits in calculating silver costs per ounce. With regard to Casa Berardi and Nevada Operations, management uses cash cost, after by-product credits, per gold ounce to compare its performance with other gold mines with a by-product credit recognized for the value of their silver production. Similarly, the statistic is useful in identifying acquisition and investment opportunities as it provides a common tool for measuring the financial performance of other mines with varying geologic, metallurgical and operating characteristics. In addition, the Company may use it when formulating performance goals and targets under its incentive program.

(6) All in sustaining cost (AISC), after by-product credits, is a non-GAAP measurement, a reconciliation of which to cost of sales and other direct production costs and depreciation, depletion and amortization, the closest GAAP measurement, can be found in the end of the release. AISC, after by-product credits, includes cost of sales and other direct production costs, expenses for reclamation and exploration at the mine sites, corporate exploration related to sustaining operations, and all site sustaining capital costs. AISC, after by-product credits, is calculated net of depreciation, depletion, and amortization and by-product credits.

Current GAAP measures used in the mining industry, such as cost of goods sold, do not capture all the expenditures incurred to discover, develop and sustain silver and gold production. Management believes that AISC is a non-GAAP measure that provides additional information to management, investors and analysts to help in the understanding of the economics of our operations and performance compared to other producers and in the investor's visibility by better defining the total costs associated with production. Similarly, the statistic is useful in identifying acquisition and investment opportunities as it provides a common tool for measuring the financial performance of other mines with varying geologic, metallurgical and operating characteristics. In addition, the Company may use it when formulating performance goals and targets under its incentive program.

Other

(7) Calculations for 2021 include silver, gold, lead and zinc production from Greens Creek, San Sebastian, Casa Berardi and Nevada Operations converted using Au $1,525/oz, Ag $17/oz, Zn $1.00/lb, and Pb $0.85/lb.

Numbers may be rounded.

Cautionary Statements to Investors on Forward-Looking Statements

This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbor created by such sections and other applicable laws, including Canadian securities laws. When a forward-looking statement expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, such statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by the forward-looking statements. Forward-looking statements often address our expected future business and financial performance and financial condition and often contain words such as "anticipate," "intend," "plan," "will," "could," "would," "estimate," "should," "expect," "believe," "project," "target," "indicative," "preliminary," "potential" and similar expressions. Forward-looking statements in this news release may include, without limitation: (i) new mining methods being tested at Lucky Friday to better manage seismicity and potentially increase productivity; (ii) Green Creek's estimated 2021 silver production, gold production, cost of sales, cash cost, and AISC; (iii) Casa Berardi's estimated 2021 gold production, cost of sales, cash cost, and AISC; (iv) Ore from the 160 pit at Casa Berardi is expected to start being mines and processed in Q4 2001, concurrent with the processing of the last of the East Mine Crown Pillar pit ore; (v) Lucky Friday's estimated 2021 silver production, cost of sales, cash cost and AISC; (vi) expectation of the Company to process 10,000 tons of refractory ore from the Nevada operations at a third-party facility in the second half of the year with production and remaining finished goods inventory to be sold at that time; and (vii) Company-wide estimates of future production, sales, costs of sales, cash cost, after by-product credits, AISC, after by-product credits, as well as estimated spending on capital, exploration and pre-development for 2021. The material factors or assumptions used to develop such forward-looking statements or forward-looking information include that the prices assumed in the calculation of cash cost and ASIC will occur and the Company’s plans for development and production will proceed as expected and will not require revision as a result of risks or uncertainties, whether known, unknown or unanticipated, to which the Company’s operations are subject.

Estimates or expectations of future events or results are based upon certain assumptions, which may prove to be incorrect, which could cause actual results to differ from forward-looking statements. Such assumptions, include, but are not limited to: (i) there being no significant change to current geotechnical, metallurgical, hydrological and other physical conditions; (ii) permitting, development, operations and expansion of the Company’s projects being consistent with current expectations and mine plans; (iii) political/regulatory developments in any jurisdiction in which the Company operates being consistent with its current expectations; (iv) the exchange rate for the USD/CAD and USD/MXN, being approximately consistent with current levels; (v) certain price assumptions for gold, silver, lead and zinc; (vi) prices for key supplies being approximately consistent with current levels; (vii) the accuracy of our current mineral reserve and mineral resource estimates; (viii) the Company’s plans for development and production will proceed as expected and will not require revision as a result of risks or uncertainties, whether known, unknown or unanticipated; (ix) counterparties performing their obligations under hedging instruments and put option contracts; (x) sufficient workforce is available and trained to perform assigned tasks; (xi) weather patterns and rain/snowfall within normal seasonal ranges so as not to impact operations; (xii) relations with interested parties, including Native Americans, remain productive; (xiii) economic terms can be reached with third-party mill operators who have capacity to process our ore; (xiv) maintaining availability of water rights; (xv) factors do not arise that reduce available cash balances; and (xvi) there being no material increases in our current requirements to post or maintain reclamation and performance bonds or collateral related thereto.

In addition, material risks that could cause actual results to differ from forward-looking statements include, but are not limited to: (i) gold, silver and other metals price volatility; (ii) operating risks; (iii) currency fluctuations; (iv) increased production costs and variances in ore grade or recovery rates from those assumed in mining plans; (v) community relations; (vi) conflict resolution and outcome of projects or oppositions; (vii) litigation, political, regulatory, labor and environmental risks; (viii) exploration risks and results, including that mineral resources are not mineral reserves, they do not have demonstrated economic viability and there is no certainty that they can be upgraded to mineral reserves through continued exploration; (ix) the failure of counterparties to perform their obligations under hedging instruments; (x) we take a material impairment charge on our Nevada operations; (xi) we are unable to remain in compliance with all terms of the credit agreement in order to maintain continued access to the revolver, and (xii) we are unable to refinance the maturing senior notes. For a more detailed discussion of such risks and other factors, see the Company’s 2020 Form 10-K, filed on February 18, 2021, with the Securities and Exchange Commission (SEC), as well as the Company’s other SEC filings. The Company does not undertake any obligation to release publicly revisions to any "forward-looking statement," including, without limitation, outlook, to reflect events or circumstances after the date of this news release or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. Investors should not assume that any lack of update to a previously issued "forward-looking statement" constitutes a reaffirmation of that statement. Continued reliance on "forward-looking statements" is at investors’ own risk.

HECLA MINING COMPANY

Condensed Consolidated Statements of Operations

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

Second Quarter Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Sales of products

$

217,983

$

166,355

$

428,835

$

303,280

Cost of sales and other direct production costs

110,320

92,853

207,029

178,740

Depreciation, depletion and amortization

48,403

39,423

97,734

79,089

158,723

132,276

304,763

257,829

Gross profit

59,260

34,079

124,072

45,451

Other operating expenses:

General and administrative

11,104

6,979

19,111

15,918

Exploration

8,367

1,962

14,318

4,492

Pre-development

2,874

563

3,613

1,098

Other operating expense

3,643

1,445

7,282

2,365

Provision for closed operations and environmental matters

1,024

1,037

4,733

1,553

Ramp-up and suspension costs

5,786

9,572

10,104

22,568

Foundation grant

1,970

1,970

32,798

23,528

59,161

49,964

Income (loss) from operations

26,462

10,551

64,911

(4,513

)

Other income (expense):

Gain on exchange of investments

1,158

Unrealized (loss) gain on investments

(750

)

6,409

(4,256

)

5,431

(Loss) on derivative contracts

(17,313

)

(14,002

)

(16,840

)

(6,109

)

Net foreign exchange (loss) gain

(1,907

)

(3,205

)

(3,971

)

3,431

Other expense

(278

)

(1,326

)

(439

)

(1,749

)

Interest expense

(10,271

)

(11,829

)

(21,015

)

(28,140

)

(30,519

)

(23,953

)

(45,363

)

(27,136

)

(Loss) income before income and mining taxes

(4,057

)

(13,402

)

19,548

(31,649

)

Income and mining tax (provision) benefit

4,842

(626

)

208

436

Net income (loss)

785

(14,028

)

19,756

(31,213

)

Preferred stock dividends

(138

)

(138

)

(276

)

(276

)

Income (loss) applicable to common shareholders

$

647

$

(14,166

)

$

19,480

$

(31,489

)

Basic and diluted income (loss) per common share after preferred dividends (in cents)

0.1

(3.0

)

3.6

(6.0

)

Weighted average number of common shares outstanding - basic

535,531

525,243

534,819

524,218

Weighted average number of common shares outstanding - diluted

542,262

525,243

541,468

524,218

HECLA MINING COMPANY

Condensed Consolidated Statements of Cash Flows

(dollars in thousands - unaudited)

Second Quarter Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

OPERATING ACTIVITIES

Net income (loss)

$

785

$

(14,028

)

$

19,756

$

(31,213

)

Non-cash elements included in net income (loss):

Depreciation, depletion and amortization

48,575

42,555

98,121

84,185

Write-down to stockpile inventory

6,242

6,431

Gain on sale of investments

(1,158

)

Unrealized loss (gain) on investments

750

(6,409

)

4,256

(5,431

)

Provision for reclamation and closure costs

1,654

1,545

6,183

3,093

Stock compensation

2,802

1,209

3,302

2,428

Deferred income taxes

(8,594

)

(1,913

)

(8,562

)

(5,165

)

Amortization of loan origination fees and loss on extinguishment of debt

379

484

918

2,624

Loss on derivative contracts

13,078

21,625

2,116

11,188

Foreign exchange loss (gain)

2,700

4,341

4,455

(3,725

)

Foundation grant

1,970

1,970

Other non-cash items, net

145

677

153

573

Change in assets and liabilities:

Accounts receivable

(6,768

)

(16,005

)

(9,432

)

(6,050

)

Inventories

3,788

2,022

5,719

(4,580

)

Other current and non-current assets

2,597

1,718

4,125

(924

)

Accounts payable and accrued liabilities

18,056

(3,536

)

(6,489

)

(15,415

)

Accrued payroll and related benefits

2,644

(4,077

)

(5,351

)

5,418

Accrued taxes

(3,030

)

2,580

(999

)

3,912

Accrued reclamation and closure costs and other non-current liabilities

501

2,768

696

(435

)

Cash provided by operating activities

86,304

37,526

124,240

42,453

INVESTING ACTIVITIES

Additions to properties, plants, equipment and mineral interests

(31,898

)

(10,819

)

(53,311

)

(30,689

)

Proceeds from disposition of properties, plants and equipment

112

46

131

200

Purchases of investments

(637

)

(637

)

Net cash used in investing activities

(31,786

)

(11,410

)

(53,180

)

(31,126

)

FINANCING ACTIVITIES

Acquisition of treasury shares

(4,525

)

(2,745

)

(4,525

)

(2,745

)

Dividends paid to common shareholders

(6,027

)

(1,318

)

(10,715

)

(2,622

)

Dividends paid to preferred shareholders

(138

)

(138

)

(276

)

(276

)

Credit facility fees paid

(93

)

(82

)

(551

)

Borrowings on debt

679,500

Repayments of debt

(160,000

)

(666,500

)

Repayments of finance leases

(1,889

)

(1,556

)

(3,770

)

(2,840

)

Net cash (used in) provided by financing activities

(12,579

)

(165,850

)

(19,368

)

3,966

Effect of exchange rates on cash

(195

)

(58

)

(28

)

(1,794

)

Net increase (decrease) in cash, cash equivalents and restricted cash

41,744

(139,792

)

51,664

13,499

Cash, cash equivalents and restricted cash at beginning of period

140,803

216,768

130,883

63,477

Cash, cash equivalents and restricted cash at end of period

$

182,547

$

76,976

$

182,547

$

76,976

Supplemental disclosure of cash flow information:

Cash paid for interest

$

93

$

1,853

$

18,499

$

15,837

Cash paid for income and mining taxes

$

6,271

$

2,706

$

9,469

$

5,345

HECLA MINING COMPANY

Condensed Consolidated Balance Sheets

(dollars and shares in thousands - unaudited)

June 30, 2021

December 31, 2020

ASSETS

Current assets:

Cash and cash equivalents

$

181,494

$

129,830

Accounts receivable:

Trade

41,311

27,864

Other, net

9,334

11,329

Inventories

82,962

96,544

Derivative assets

5,879

3,470

Other current assets

10,198

15,644

Total current assets

331,178

284,681

Investments

11,083

15,148

Restricted cash

1,053

1,053

Properties, plants, equipment and mineral interests, net

2,305,359

2,345,219

Operating lease right-of-use asset

8,902

10,628

Deferred income taxes

5,090

2,912

Derivative assets

4,852

4,558

Other non-current assets

3,721

3,525

Total assets

$

2,671,238

$

2,667,724

LIABILITIES

Current liabilities:

Accounts payable and accrued liabilities

$

62,183

$

68,516

Accrued payroll and related benefits

24,270

31,807

Accrued taxes

4,838

8,349

Finance leases

6,223

6,491

Operating leases

2,540

3,008

Other current liabilities

21,353

26,032

Accrued reclamation and closure costs

7,994

5,582

Total current liabilities

129,401

149,785

Finance leases

8,905

9,274

Operating leases

6,368

7,634

Accrued reclamation and closure costs

112,651

110,466

Long-term debt

508,611

507,242

Deferred tax liability

143,181

144,330

Pension liability

30,237

44,144

Other non-current liabilities

11,202

4,364

Total liabilities

950,556

977,239

SHAREHOLDERS’ EQUITY

Preferred stock

39

39

Common stock

136,065

134,629

Capital surplus

2,024,645

2,003,576

Accumulated deficit

(382,609

)

(391,374

)

Accumulated other comprehensive loss

(29,437

)

(32,889

)

Treasury stock

(28,021

)

(23,496

)

Total shareholders’ equity

1,720,682

1,690,485

Total liabilities and shareholders’ equity

$

2,671,238

$

2,667,724

Common shares outstanding

536,823

531,666

HECLA MINING COMPANY

Production Data

Three Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

GREENS CREEK UNIT

Tons of ore milled

214,931

215,275

409,011

414,079

Total production cost per ton

$

171.13

$

171.03

$

176.58

$

178.18

Ore grade milled - Silver (oz./ton)

14.52

15.56

15.23

16.19

Ore grade milled - Gold (oz./ton)

0.081

0.084

0.085

0.084

Ore grade milled - Lead (%)

3.14

3.27

3.10

3.20

Ore grade milled - Zinc (%)

7.57

8.16

7.59

7.55

Silver produced (oz.)

2,558,447

2,753,919

5,143,317

5,529,626

Gold produced (oz.)

12,859

13,104

26,125

25,377

Lead produced (tons)

5,627

5,889

10,551

11,087

Zinc produced (tons)

14,610

16,184

27,964

28,671

Cash cost, after by-product credits, per silver ounce 1

$

(2.64

)

$

5.19

$

(1.65

)

$

5.41

AISC, after by-product credits, per silver ounce 1

$

0.68

$

7.11

$

1.14

$

7.51

Capital additions (in thousands)

$

6,339

$

4,501

$

11,231

$

10,011

LUCKY FRIDAY UNIT

Tons of ore milled

82,442

44,682

163,513

54,901

Total production cost per ton

$

199.48

$

$

188.30

Ore grade milled - Silver (oz./ton)

11.60

10.99

11.39

10.78

Ore grade milled - Lead (%)

7.55

7.33

7.53

7.31

Ore grade milled - Zinc (%)

3.44

4.07

3.57

4.03

Silver produced (oz.)

913,294

469,537

1,777,195

565,285

Lead produced (tons)

5,913

3,088

11,693

3,783

Zinc produced (tons)

2,601

1,671

5,354

2,031

Cash cost, after by-product credits, per silver ounce 1

$

8.07

$

$

7.85

AISC, after by-product credits, per silver ounce 1

$

14.10

$

$

14.17

$

Capital additions (in thousands)

$

5,731

$

4,761

$

11,643

$

9,056

CASA BERARDI UNIT

Tons of ore milled - underground

179,217

154,265

366,136

315,202

Tons of ore milled - surface pit

195,466

126,155

376,950

296,836

Tons of ore milled - total

374,683

280,420

743,086

612,038

Surface tons mined - ore and waste

2,033,403

930,117

4,024,490

2,655,091

Total production cost per ton

$

99.36

$

99.17

$

99.52

$

100.07

Ore grade milled - Gold (oz./ton) - underground

0.148

0.163

0.162

0.135

Ore grade milled - Gold (oz./ton) - surface pit

0.055

0.045

0.059

0.050

Ore grade milled - Gold (oz./ton) - combined

0.100

0.130

0.110

0.115

Ore grade milled - Silver (oz./ton)

0.03

0.02

0.03

0.02

Gold produced (oz.) - underground

23,441

25,074

51,009

42,655

Gold produced (oz.) - surface pit

7,892

5,682

16,514

14,853

Gold produced (oz.) - total

31,333

30,756

67,523

57,508

Silver produced (oz.)

7,917

5,495

18,592

11,429

Cash cost, after by-product credits, per gold ounce 1

$

1,199

$

919

$

1,106

$

1,081

AISC, after by-product credits, per gold ounce 1

$

1,434

$

1,077

$

1,347

$

1,327

Capital additions (in thousands)

$

12,153

$

4,278

$

26,000

$

12,784

Three Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

SAN SEBASTIAN

Tons of ore milled

21,647

57,123

Total production cost per ton

$

$

100.12

$

$

148.50

Ore grade milled - Silver (oz./ton)

7.96

9.63

Ore grade milled - Gold (oz./ton)

0.074

0.085

Silver produced (oz.)

158,842

505,467

Gold produced (oz.)

1,331

4,133

Cash cost, after by-product credits, per silver ounce 1

$

$

1.14

$

$

5.09

AISC, after by-product credits, per silver ounce 1

$

$

1.85

$

$

5.65

Capital additions (in thousands)

$

7

$

(499

)

$

7

$

304

NEVADA OPERATIONS

Tons of ore milled

38,947

10,686

55,406

27,984

Total production cost per ton

$

161.50

$

1,172.66

$

220.68

$

892.09

Ore grade milled - Gold (oz./ton)

0.41

1.519

0.343

1.232

Ore grade milled - Silver (oz./ton)

1.24

2.07

0.88

1.7

Gold produced (oz.)

14,947

14,791

17,495

31,756

Silver produced (oz.)

45,125

15,988

45,125

37,443

Cash cost, after by-product credits, per gold ounce 1

$

1,369

$

694

$

1,371

$

716

AISC, after by-product credits, per gold ounce 1

$

1,386

$

769

$

1,393

$

787

Capital additions (in thousands)

$

77

$

612

$

166

$

1,469

(1) Cash cost, after by-product credits, per ounce and AISC, after by-product credits. per ounce represent non-U.S. Generally Accepted Accounting Principles (GAAP) measurements. A reconciliation of cost of sales and other direct production costs and depreciation, depletion and amortization (GAAP) to cash cost, after by-product credits can be found in the cash cost per ounce reconciliation section of this news release. Gold, lead and zinc produced have been treated as by-product credits in calculating silver costs per ounce. The primary metal produced at Casa Berardi and Nevada Operations is gold, with a by-product credit for the value of silver production.

Non-GAAP Measures

(Unaudited)

Reconciliation of Cost of Sales (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP)

The tables below present reconciliations between the most comparable GAAP measure of cost of sales and other direct production costs and depreciation, depletion and amortization to the non-GAAP measures of Cash Cost, Before By-product Credits, Cash Cost, After By-product Credits, AISC, Before By-product Credits and AISC, After By-product Credits for our operations at the Greens Creek, Lucky Friday, San Sebastian, Casa Berardi and Nevada Operations units for the three- and six-month periods ended June 30, 2021 and 2020.

Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce are measures developed by precious metals companies (including the Silver Institute and the World Gold Council) in an effort to provide a uniform standard for comparison purposes. There can be no assurance, however, that these non-GAAP measures as we report them are the same as those reported by other mining companies.

Cash Cost, After By-product Credits, per Ounce is an important operating statistic that we utilize to measure each mine's operating performance. AISC, After By-product Credits, per Ounce is an important operating statistic that we utilize as a measures of our mines' net cash flow after costs for exploration, pre-development, reclamation, and sustaining capital. Current GAAP measures used in the mining industry, such as cost of goods sold, do not capture all the expenditures incurred to discover, develop and sustain silver and gold production. Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce also allow us to benchmark the performance of each of our mines versus those of our competitors. As a silver and gold mining company, we also use these statistics on an aggregate basis - aggregating the Greens Creek, Lucky Friday and San Sebastian mines - to compare our performance with that of other silver mining companies, and aggregating Casa Berardi and Nevada Operations for comparison to other gold mining companies. Similarly, these statistics are useful in identifying acquisition and investment opportunities as they provide a common tool for measuring the financial performance of other mines with varying geologic, metallurgical and operating characteristics.

Cash Cost, Before By-product Credits and AISC, Before By-product Credits include all direct and indirect operating cash costs related directly to the physical activities of producing metals, including mining, processing and other plant costs, third-party refining expense, on-site general and administrative costs, royalties and mining production taxes. AISC, Before By-product Credits for each mine also includes on-site exploration, reclamation, and sustaining capital costs. AISC, Before By-product Credits for our consolidated silver properties also includes corporate costs for general and administrative expense, reclamation, exploration, and pre-development. By-product credits include revenues earned from all metals other than the primary metal produced at each unit. As depicted in the tables below, by-product credits comprise an essential element of our silver unit cost structure, distinguishing our silver operations due to the polymetallic nature of their orebodies. Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce provide management and investors an indication of operating cash flow, after consideration of the average price, received from production. We also use these measurements for the comparative monitoring of performance of our mining operations period-to-period from a cash flow perspective.

The Casa Berardi, Nevada Operations and combined gold properties information below reports Cash Cost, After By-product Credits, per Gold Ounce and AISC, After By-product Credits, per Gold Ounce for the production of gold, its primary product, and by-product revenues earned from silver, which is a by-product at Casa Berardi and Nevada Operations. Only costs and ounces produced relating to units with the same primary product are combined to represent Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce. Thus, the gold produced at our Casa Berardi and Nevada Operations units is not included as a by-product credit when calculating Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for the total of Greens Creek, Lucky Friday and San Sebastian, our combined silver properties. Similarly, the silver produced at our other three units is not included as a by-product credit when calculating the gold metrics for Casa Berardi and Nevada Operations.

In thousands (except per ounce amounts)

Three Months Ended June 30, 2021

Greens Creek

Lucky Friday(2)

San
Sebastian(3)

Corporate(4)

Total Silver

Cost of sales and other direct production costs and depreciation, depletion and amortization

$

55,488

27,901

$

1

$

83,390

Depreciation, depletion and amortization

(14,492

)

(7,402

)

(21,894

)

Treatment costs

8,924

4,686

13,610

Change in product inventory

(435

)

(1,596

)

(2,031

)

Reclamation and other costs

(672

)

(325

)

(1

)

(998

)

Cash Cost, Before By-product Credits (1)

48,813

23,264

72,077

Reclamation and other costs

847

264

1,111

Sustaining exploration

1,300

450

1,750

Sustaining capital

6,339

5,244

11,583

General and administrative

11,104

11,104

AISC, Before By-product Credits (1)

57,299

28,772

97,625

By-product credits:

Zinc

(26,510

)

(5,093

)

(31,603

)

Gold

(20,438

)

(20,438

)

Lead

(8,605

)

(10,799

)

$

(19,404

)

Total By-product credits

(55,553

)

(15,892

)

(71,445

)

Cash Cost, After By-product Credits

$

(6,740

)

$

7,372

$

$

632

AISC, After By-product Credits

$

1,746

$

12,880

$

$

26,180

Divided by ounces produced

2,558

913

3,471

Cash Cost, Before By-product Credits, per Ounce

$

19.08

$

25.49

$

$

20.76

By-product credits per ounce

(21.72

)

(17.42

)

(20.58

)

Cash Cost, After By-product Credits, per Ounce

$

(2.64

)

$

8.07

$

$

0.18

AISC, Before By-product Credits, per Ounce

$

22.40

$

31.52

$

$

28.12

By-product credits per ounce

(21.72

)

(17.42

)

(20.58

)

AISC, After By-product Credits, per Ounce

$

0.68

$

14.10

$

$

7.54

In thousands (except per ounce amounts)

Three months ended June 30, 2021

Casa Berardi

Nevada Operations (5)

Total Gold

Cost of sales and other direct production costs and depreciation, depletion and amortization

$

57,340

$

17,993

$

75,333

Depreciation, depletion and amortization

(20,910

)

(5,599

)

(26,509

)

Treatment costs

535

1,719

2,254

Change in product inventory

1,015

12,583

13,598

Reclamation and other costs

(215

)

(218

)

(433

)

Exclusion of Nevada Operations costs

(4,914

)

(4,914

)

Cash Cost, Before By-product Credits (1)

37,765

21,564

59,329

Reclamation and other costs

215

218

433

Sustaining exploration

1,103

1,103

Sustaining capital

6,064

44

6,108

AISC, Before By-product Credits (1)

45,147

21,826

66,973

By-product credits:

Silver

(209

)

(1,103

)

(1,312

)

Total By-product credits

(209

)

(1,103

)

(1,312

)

Cash Cost, After By-product Credits

$

37,556

$

20,461

$

58,017

AISC, After By-product Credits

$

44,938

$

20,723

$

65,661

Divided by ounces produced

31

15

46

Cash Cost, Before By-product Credits, per Ounce

$

1,206

$

1,443

$

1,282

By-product credits per ounce

(7

)

(74

)

(28

)

Cash Cost, After By-product Credits, per Ounce

$

1,199

$

1,369

$

1,254

AISC, Before By-product Credits, per Ounce

$

1,441

$

1,460

$

1,447

By-product credits per ounce

(7

)

(74

)

(28

)

AISC, After By-product Credits, per Ounce

$

1,434

$

1,386

$

1,419

In thousands (except per ounce amounts)

Three months ended June 30, 2021

Total Silver

Total Gold

Total

Cost of sales and other direct production costs and depreciation, depletion and amortization

$

83,390

$

75,333

$

158,723

Depreciation, depletion and amortization

(21,894

)

(26,509

)

(48,403

)

Treatment costs

13,610

2,254

15,864

Change in product inventory

(2,031

)

13,598

11,567

Reclamation and other costs

(998

)

(433

)

(1,431

)

Exclusion of Nevada Operations costs

(4,914

)

(4,914

)

Cash Cost, Before By-product Credits (1)

72,077

59,329

131,406

Reclamation and other costs

1,111

433

1,544

Sustaining exploration

1,750

1,103

2,853

Sustaining capital

11,583

6,108

17,691

General and administrative

11,104

11,104

AISC, Before By-product Credits (1)

97,625

66,973

164,598

By-product credits:

Zinc

(31,603

)

(31,603

)

Gold

(20,438

)

(20,438

)

Lead

(19,404

)

(19,404

)

Silver

(1,312

)

(1,312

)

Total By-product credits

(71,445

)

(1,312

)

(72,757

)

Cash Cost, After By-product Credits

$

632

$

58,017

$

58,649

AISC, After By-product Credits

$

26,180

$

65,661

$

91,841

Divided by ounces produced

3,471

46

Cash Cost, Before By-product Credits, per Ounce

$

20.76

$

1,282

By-product credits per ounce

(20.58

)

(28

)

Cash Cost, After By-product Credits, per Ounce

$

0.18

$

1,254

AISC, Before By-product Credits, per Ounce

$

28.12

$

1,447

By-product credits per ounce

(20.58

)

(28

)

AISC, After By-product Credits, per Ounce

$

7.54

$

1,419

In thousands (except per ounce amounts)

Three Months Ended June 30, 2020

Greens Creek

Lucky
Friday(2)

San Sebastian

Corporate(4)

Total Silver

Cost of sales and other direct production costs and depreciation, depletion and amortization

$

57,672

$

11,455

$

4,010

$

73,137

Depreciation, depletion and amortization

(12,988

)

(1,894

)

(895

)

(15,777

)

Treatment costs

20,016

3,032

47

23,095

Change in product inventory

(4,020

)

(118

)

(398

)

(4,536

)

Reclamation and other costs

93

(296

)

(203

)

Exclusion of Lucky Friday cash cost

(12,475

)

(12,475

)

Cash Cost, Before By-product Credits (1)

60,773

2,468

63,241

Reclamation and other costs

789

114

903

Sustaining exploration

314

314

Sustaining capital

4,501

(1

)

4,500

General and administrative

6,979

6,979

AISC, Before By-product Credits (1)

66,063

2,581

75,937

By-product credits:

Zinc

(19,913

)

(19,913

)

Gold

(19,427

)

(2,287

)

(21,714

)

Lead

(7,133

)

(7,133

)

Total By-product credits

(46,473

)

(2,287

)

(48,760

)

Cash Cost, After By-product Credits

$

14,300

$

$

181

$

14,481

AISC, After By-product Credits

$

19,590

$

$

294

$

27,177

Divided by ounces produced

2,754

158

2,912

Cash Cost, Before By-product Credits, per Ounce

$

22.06

$

$

15.61

$

21.71

By-product credits per ounce

(16.87

)

(14.47

)

(16.74

)

Cash Cost, After By-product Credits, per Ounce

$

5.19

$

$

1.14

$

4.97

AISC, Before By-product Credits, per Ounce

$

23.98

$

$

16.32

$

26.07

By-product credits per ounce

(16.87

)

(14.47

)

(16.74

)

AISC, After By-product Credits, per Ounce

$

7.11

$

$

1.85

$

9.33

In thousands (except per ounce amounts)

Three Months Ended June 30, 2020

Casa Berardi (6)

Nevada Operations (5)

Total Gold

Cost of sales and other direct production costs and depreciation, depletion and amortization

$

45,582

$

13,557

$

59,139

Depreciation, depletion and amortization

(17,281

)

(6,365

)

(23,646

)

Treatment costs

558

19

577

Change in product inventory

(400

)

3,669

3,269

Reclamation and other costs

(92

)

(328

)

(420

)

Cash Cost, Before By-product Credits (1)

28,367

10,552

38,919

Reclamation and other costs

94

327

421

Sustaining exploration

467

467

Sustaining capital

4,278

774

5,052

AISC, Before By-product Credits (1)

33,206

11,653

44,859

By-product credits:

Silver

(92

)

(282

)

(374

)

Total By-product credits

(92

)

(282

)

(374

)

Cash Cost, After By-product Credits

$

28,275

$

10,270

$

38,545

AISC, After By-product Credits

$

33,114

$

11,371

$

44,485

Divided by ounces produced

31

15

46

Cash Cost, Before By-product Credits, per Ounce

$

922

$

713

$

854

By-product credits per ounce

(3

)

(19

)

(8

)

Cash Cost, After By-product Credits, per Ounce

$

919

$

694

$

846

AISC, Before By-product Credits, per Ounce

$

1,080

$

788

$

985

By-product credits per ounce

(3

)

(19

)

(8

)

AISC, After By-product Credits, per Ounce

$

1,077

$

769

$

977

In thousands (except per ounce amounts)

Three Months Ended June 30, 2020

Total Silver

Total Gold

Total

Cost of sales and other direct production costs and depreciation, depletion and amortization

$

73,137

$

59,139

$

132,276

Depreciation, depletion and amortization

(15,777

)

(23,646

)

(39,423

)

Treatment costs

23,095

577

23,672

Change in product inventory

(4,536

)

3,269

(1,267

)

Reclamation and other costs

(203

)

(420

)

(623

)

Exclusion of Lucky Friday cash cost

(12,475

)

(12,475

)

Cash Cost, Before By-product Credits (1)

63,241

38,919

102,160

Reclamation and other costs

903

421

1,324

Sustaining exploration

314

467

781

Sustaining capital

4,500

5,052

9,552

General and administrative

6,979

6,979

AISC, Before By-product Credits (1)

75,937

44,859

120,796

By-product credits:

Zinc

(19,913

)

(19,913

)

Gold

(21,714

)

(21,714

)

Lead

(7,133

)

(7,133

)

Silver

(374

)

(374

)

Total By-product credits

(48,760

)

(374

)

(49,134

)

Cash Cost, After By-product Credits

$

14,481

$

38,545

$

53,026

AISC, After By-product Credits

$

27,177

$

44,485

$

71,662

Divided by ounces produced

2,912

46

Cash Cost, Before By-product Credits, per Ounce

$

21.71

$

854

By-product credits per ounce

(16.74

)

(8

)

Cash Cost, After By-product Credits, per Ounce

$

4.97

$

846

AISC, Before By-product Credits, per Ounce

$

26.07

$

985

By-product credits per ounce

(16.74

)

(8

)

AISC, After By-product Credits, per Ounce

$

9.33

$

977

In thousands (except per ounce amounts)

Six Months Ended June 30, 2021

Greens Creek

Lucky Friday(2)

San Sebastian(3)

Corporate(4)

Total Silver

Cost of sales and other direct production costs and depreciation, depletion and amortization

$

108,668

$

50,696

$

95

$

159,459

Depreciation, depletion and amortization

(29,313

)

(13,738

)

(43,051

)

Treatment costs

19,465

9,664

29,129

Change in product inventory

(34

)

(1,689

)

(1,723

)

Reclamation and other costs

(932

)

(559

)

(95

)

(1,586

)

Cash Cost, Before By-product Credits (1)

97,854

44,374

142,228

Reclamation and other costs

1,695

528

2,223

Sustaining exploration

1,423

885

2,308

Sustaining capital

11,231

10,698

21,929

General and administrative

19,111

19,111

AISC, Before By-product Credits (1)

112,203

55,600

187,799

By-product credits:

Zinc

(49,277

)

(9,846

)

(59,123

)

Gold

(41,434

)

(41,434

)

Lead

(15,625

)

(20,574

)

(36,199

)

Total By-product credits

(106,336

)

(30,420

)

(136,756

)

Cash Cost, After By-product Credits

$

(8,482

)

$

13,954

$

$

5,472

AISC, After By-product Credits

$

5,867

$

25,180

$

$

51,043

Divided by ounces produced

5,143

1,777

6,920

Cash Cost, Before By-product Credits, per Ounce

$

19.03

$

24.97

$

$

20.55

By-product credits per ounce

(20.68

)

(17.12

)

(19.76

)

Cash Cost, After By-product Credits, per Ounce

$

(1.65

)

$

7.85

$

$

0.79

AISC, Before By-product Credits, per Ounce

$

21.82

$

31.29

$

$

27.14

By-product credits per ounce

(20.68

)

(17.12

)

(19.76

)

AISC, After By-product Credits, per Ounce

$

1.14

$

14.17

$

$

7.38

In thousands (except per ounce amounts)

Six Months Ended June 30, 2021

Casa Berardi

Nevada Operations (5)

Total Gold

Cost of sales and other direct production costs and depreciation, depletion and amortization

$

119,856

$

25,448

$

145,304

Depreciation, depletion and amortization

(46,451

)

(8,232

)

(54,683

)

Treatment costs

1,249

1,730

2,979

Change in product inventory

968

11,499

12,467

Reclamation and other costs

(423

)

(245

)

(668

)

Exclusion of Nevada Operations costs

(5,103

)

(5,103

)

Cash Cost, Before By-product Credits (1)

75,199

25,097

100,296

Reclamation and other costs

423

245

668

Sustaining exploration

2,010

2,010

Sustaining capital

13,822

133

13,955

AISC, Before By-product Credits (1)

91,454

25,475

116,929

By-product credits:

Silver

(487

)

(1,103

)

(1,590

)

Total By-product credits

(487

)

(1,103

)

(1,590

)

Cash Cost, After By-product Credits

$

74,712

$

23,994

$

98,706

AISC, After By-product Credits

$

90,967

$

24,372

$

115,339

Divided by ounces produced

68

17

85

Cash Cost, Before By-product Credits, per Ounce

$

1,113

$

1,434

$

1,180

By-product credits per ounce

(7

)

(63

)

(19

)

Cash Cost, After By-product Credits, per Ounce

$

1,106

$

1,371

$

1,161

AISC, Before By-product Credits, per Ounce

$

1,354

$

1,456

$

1,376

By-product credits per ounce

(7

)

(63

)

(19

)

AISC, After By-product Credits, per Ounce

$

1,347

$

1,393

$

1,357

In thousands (except per ounce amounts)

Six Months Ended June 30, 2021

Total Silver

Total Gold

Total

Cost of sales and other direct production costs and depreciation, depletion and amortization

$

159,459

$

145,304

$

304,763

Depreciation, depletion and amortization

(43,051

)

(54,683

)

(97,734

)

Treatment costs

29,129

2,979

32,108

Change in product inventory

(1,723

)

12,467

10,744

Reclamation and other costs

(1,586

)

(668

)

(2,254

)

Exclusion of Nevada Operations costs

(5,103

)

(5,103

)

Cash Cost, Before By-product Credits (1)

142,228

100,296

242,524

Reclamation and other costs

2,223

668

2,891

Sustaining exploration

2,308

2,010

4,318

Sustaining capital

21,929

13,955

35,884

General and administrative

19,111

19,111

AISC, Before By-product Credits (1)

187,799

116,929

304,728

By-product credits:

Zinc

(59,123

)

(59,123

)

Gold

(41,434

)

(41,434

)

Lead

(36,199

)

(36,199

)

Silver

(1,590

)

(1,590

)

Total By-product credits

(136,756

)

(1,590

)

(138,346

)

Cash Cost, After By-product Credits

$

5,472

$

98,706

$

104,178

AISC, After By-product Credits

$

51,043

$

115,339

$

166,382

Divided by ounces produced

6,920

85

Cash Cost, Before By-product Credits, per Ounce

$

20.55

$

1,180

By-product credits per ounce

(19.76

)

(19

)

Cash Cost, After By-product Credits, per Ounce

$

0.79

$

1,161

AISC, Before By-product Credits, per Ounce

$

27.14

$

1,376

By-product credits per ounce

(19.76

)

(19

)

AISC, After By-product Credits, per Ounce

$

7.38

$

1,357

In thousands (except per ounce amounts)

Six Months Ended June 30, 2020

Greens Creek

Lucky Friday(2)

San Sebastian

Corporate(4)

Total Silver

Cost of sales and other direct production costs and depreciation, depletion and amortization

$

106,853

$

14,287

$

12,311

$

133,451

Depreciation, depletion and amortization

(25,417

)

(2,196

)

(2,368

)

(29,981

)

Treatment costs

35,842

3,464

151

39,457

Change in product inventory

(1,150

)

796

(145

)

(499

)

Reclamation and other costs

413

(658

)

(245

)

Exclusion of Lucky Friday cash cost

(16,351

)

(16,351

)

Cash Cost, Before By-product Credits (1)

116,541

9,291

125,832

Reclamation and other costs

1,577

228

1,805

Sustaining exploration

4

664

668

Sustaining capital

10,011

55

10,066

General and administrative

15,918

15,918

AISC, Before By-product Credits (1)

128,133

9,574

154,289

By-product credits:

Zinc

(35,939

)