Hecla Reports Fourth Quarter and Full-year 2021 Results
Record annual revenue and 2nd highest cash flow from operations and free cash flow
COEUR D’ALENE, Idaho–(BUSINESS WIRE)–Hecla Mining Company (NYSE:HL) today announced fourth quarter and full-year 2021 financial and operating results.
ANNUAL HIGHLIGHTS
Operational
- Produced 12.9 million silver ounces and 201,327 gold ounces, meeting production and cost guidance.
- Developed the Underhand Closed Bench (UCB) mining method at Lucky Friday, which contributed to the 75% increase in silver production and showed improvements in managing seismicity.
- Casa Berardi achieved record throughput and recoveries improved by 4%, producing 134,511 gold ounces.
- Second highest reserves for both silver and gold in Company history.
Financial
- Record sales of $807.5 million with net income of $35.1 million.
- Record Adjusted EBITDA of $278.8 million.1
- Second highest cash flow from operations of $220.3 million and free cash flow of $111.3 million.
- Record exploration and pre-development expenditures of $47.9 million.
- Returned $20.7 million, or 19%, of free cash flow to our common and preferred shareholders through dividends.
Environmental, Social, Governance
- Strong safety performance with an All-Injury Frequency Rate of 1.45, 40% below the U.S. average.
- Net neutral for scope 1 & 2 emissions with only 76,000 tonnes that were offset by carbon credits.
- Successfully managed the impacts of COVID-19.
“2021 was an outstanding year for Hecla as we generated record revenues and adjusted EBITDA resulting in the second highest free cash flow in our 130-year history,” said Phillips S. Baker Jr., President and CEO. “The year also positions Hecla for future success with our exploration program delivering our highest silver reserves in more than 20 years and the Lucky Friday’s establishment of a new, innovative mining method that should be both safer and more productive. This method, which we call the Underhand Closed Bench method will allow the Lucky Friday to increase projected production in 2022 by almost a million silver ounces over 2021, which was a million and half more than 2020.”
Baker continued, “Since Hecla is not only the largest producer of silver in the United States but also has the largest silver reserve base in the U.S., our stakeholders are uniquely positioned to benefit from the growing demand for silver in the transition to clean energy.”
FINANCIAL OVERVIEW
|
In Thousands unless stated otherwise |
4Q-2021 |
3Q-2021 |
2Q-2021 |
1Q-2021 |
4Q-2020 |
FY 2021 |
FY 2020 |
||||||||||||||
|
FINANCIAL AND PRODUCTION SUMMARY |
|||||||||||||||||||||
|
Sales |
$ |
185,078 |
|
$ |
193,560 |
|
$ |
217,983 |
|
$ |
210,852 |
|
$ |
188,890 |
|
$ |
807,473 |
|
$ |
691,873 |
|
|
Cost of Sales* |
$ |
131,837 |
|
$ |
158,332 |
|
$ |
156,052 |
|
$ |
143,451 |
|
$ |
137,978 |
|
$ |
589,672 |
|
$ |
530,773 |
|
|
Gross profit |
$ |
53,241 |
|
$ |
35,228 |
|
$ |
61,931 |
|
$ |
67,401 |
|
$ |
50,912 |
|
$ |
217,801 |
|
$ |
161,100 |
|
|
Income (loss) applicable to common stockholders |
$ |
11,737 |
|
$ |
(1,117 |
) |
$ |
2,610 |
|
$ |
21,313 |
|
$ |
2,967 |
|
$ |
34,543 |
|
$ |
(10,009 |
) |
|
Basic income (loss) per common share (in dollars) |
$ |
0.02 |
|
$ |
— |
|
$ |
0.05 |
|
$ |
0.04 |
|
$ |
0.01 |
|
$ |
0.06 |
|
$ |
(0.02 |
) |
|
Adjusted EBITDA 1 |
$ |
58,249 |
|
$ |
49,414 |
|
$ |
84,507 |
|
$ |
86,610 |
|
$ |
57,773 |
|
$ |
278,780 |
|
$ |
230,684 |
|
|
Net Debt to Adjusted EBITDA1 |
|
|
|
|
|
|
1.1 |
|
|
1.7 |
|
||||||||||
|
Cash provided by operating activities |
$ |
53,355 |
|
$ |
42,742 |
|
$ |
86,304 |
|
$ |
37,936 |
|
$ |
64,901 |
|
$ |
220,337 |
|
$ |
180,793 |
|
|
Capital expenditures |
$ |
(28,838 |
) |
$ |
(26,899 |
) |
$ |
(31,898 |
) |
$ |
(21,413 |
) |
$ |
(36,634 |
) |
$ |
(109,048 |
) |
$ |
(91,016 |
) |
|
Free Cash Flow 2 |
$ |
24,517 |
|
$ |
15,843 |
|
$ |
54,406 |
|
$ |
16,523 |
|
$ |
28,267 |
|
$ |
111,289 |
|
$ |
89,777 |
|
|
Silver ounces produced |
|
3,226,927 |
|
|
2,676,084 |
|
|
3,524,783 |
|
|
3,459,446 |
|
|
3,352,336 |
|
|
12,887,240 |
|
|
13,542,957 |
|
|
Silver payable ounces sold |
|
2,606,622 |
|
|
2,581,690 |
|
|
3,415,464 |
|
|
3,030,026 |
|
|
3,227,951 |
|
|
11,633,802 |
|
|
12,305,917 |
|
|
Gold ounces produced |
|
47,977 |
|
|
42,207 |
|
|
59,139 |
|
|
52,004 |
|
|
49,014 |
|
|
201,327 |
|
|
208,962 |
|
|
Gold payable ounces sold |
|
44,156 |
|
|
53,000 |
|
|
47,168 |
|
|
57,286 |
|
$ |
43.144 |
|
|
201,610 |
|
|
202,694 |
|
*Cost of sales is comprised of cost of sales and other direct production costs and depreciation, depletion and amortization referred to herein as “cost of sales”.
Consolidated silver cost of sales for 2021 were $310.9 million; cash cost and all-in sustaining costs (“AISC”) per silver ounce, after by-product credits, for the year were $1.37 and $9.19, respectively.3,4 The year over year decrease in cash cost and AISC per silver ounce (each after by-product credits) was due to higher silver production and by-product credits as well as lower treatment charges, partially offset by higher operating costs and additional sustaining capital.3,4 Consolidated gold cost of sales for the year were $278.8 million, cash cost and AISC per gold ounce (each after by-product credits), were $1,127 and $1,374, respectively.3,4 The year over year increase in cash cost was due to higher production costs partially offset by higher gold production with AISC also impacted by lower sustaining capital.
Income applicable to common stockholders increased in the fourth quarter 2021 over the third quarter due to:
- Gross profit increased by 51% due primarily to increased production at all three operations.
- Exploration and pre-development expense decreased by $4.2 million due to third-party assays being delayed and the completion of seasonal exploration programs in the prior quarter.
- Increase in benefit from income and mining taxes of $21.1 million due to a partial release of the deferred tax asset valuation allowance.
- Partially offsetting these increases are realized and unrealized losses on derivatives of $25.1 million compared to a third quarter gain of $9.3 million.
Income applicable to common stockholders increased in 2021 over 2020 due to:
- Gross profit increased by 35% due to higher metal prices and a full year of production at Lucky Friday.
- Lower interest expense by $7.6 million as a result of the revolving credit facility being undrawn in 2021 and 2020 debt refinancing expenses.
- Income tax benefits of $29.6 million, compared to the 2020 provision of $8.2 million through the use of tax loss carryforwards and a partial release of the deferred tax asset valuation allowance.
The above items were partially offset by:
- Increase in exploration and pre-development expense of $29.6 million.
- Combined realized and unrealized losses on derivatives and investments of $35.8 million in 2021, compared to a loss of $11.8 million in 2020.
- Provision for closed operations and environmental matters of $14.6 million, an increase of $10.6 million over 2020 primarily due to a $6.5 million lawsuit settlement payment for a 1989 indemnification agreement and a $5.0 million increase for estimated reclamation costs at two closed sites.
Cash provided by operating activities increased $39.5 million year over year and $10.6 million in the fourth quarter compared to the third quarter of 2021 due to increased gross margin, partially offset by unfavorable working capital changes. The yearly increase was also impacted by higher exploration and pre-development spending, which declined quarter over quarter due to seasonal variances.
Adjusted EBITDA increased $8.8 million in the fourth quarter compared to the third quarter of 2021, and was $278.8 million for the full-year 2021, an increase of $48.1 million over 2020, due to higher sales margins partially offset by higher exploration and pre-development spending.1
Fourth quarter capital expenditures totaled $28.8 million, including $9.5 million at Greens Creek, $9.5 million at Casa Berardi, and $9.1 million at Lucky Friday. Capital expenditures for the year 2021 totaled $109.0 million compared to $91.0 million in 2020.
Forward Sales Contracts for Base Metals and Foreign Currency
The Company uses financially settled forward sales contracts to manage exposures to changes in prices of zinc and lead. At December 31, 2021, the Company had contracts covering approximately 62% of the forecasted payable zinc production (through 2024) at an average price of $1.29 per pound, and 49% of the forecasted payable lead production (through 2024) at an average price of $0.99 per pound. Effective November 1, 2021, the Company elected to apply hedge accounting for all then open and future financially settled forward sales contracts, which will reduce income statement volatility for unrealized gains and losses on open positions.
The Company also enters into foreign exchange forward contracts to buy Canadian dollars. At December 31, 2021, the Company had hedged approximately 76% of forecasted Canadian dollar direct production costs for 2022 at an average CAD/USD rate of 1.30, 51% for 2023 at 1.30, 18% for 2024 at 1.31, and 5% for 2025 at 1.28. The Company has also hedged approximately 34% of capital costs for 2022 at 1.29.
OPERATIONS OVERVIEW
Greens Creek Mine – Alaska
|
Dollars are in thousands except cost per ton |
4Q-2021 |
3Q-2021 |
2Q-2021 |
1Q-2021 |
4Q-2020 |
FY 2021 |
FY 2020 |
||||||||||||||
|
GREENS CREEK |
|
||||||||||||||||||||
|
Tons of ore processed |
|
221,814 |
|
|
211,142 |
|
|
214,931 |
|
|
194,080 |
|
|
189,092 |
|
|
841,967 |
|
|
818,408 |
|
|
Total production cost per ton |
$ |
174.55 |
|
$ |
181.60 |
|
$ |
171.13 |
|
$ |
182.61 |
|
$ |
195.02 |
|
$ |
177.30 |
|
$ |
179.37 |
|
|
Ore grade milled – Silver (oz./ton) |
|
12.60 |
|
|
11.14 |
|
|
14.52 |
|
|
16.01 |
|
|
15.17 |
|
|
13.51 |
|
|
15.65 |
|
|
Ore grade milled – Gold (oz./ton) |
|
0.07 |
|
|
0.07 |
|
|
0.08 |
|
|
0.09 |
|
|
0.07 |
|
|
0.08 |
|
|
0.08 |
|
|
Ore grade milled – Lead (%) |
|
2.61 |
|
|
2.68 |
|
|
3.14 |
|
|
3.06 |
|
|
2.84 |
|
|
2.87 |
|
|
3.13 |
|
|
Ore grade milled – Zinc (%) |
|
6.28 |
|
|
7.05 |
|
|
7.57 |
|
|
7.62 |
|
|
6.96 |
|
|
7.11 |
|
|
7.58 |
|
|
Silver produced (oz.) |
|
2,262,635 |
|
|
1,837,270 |
|
|
2,558,447 |
|
|
2,584,870 |
|
|
2,330,664 |
|
|
9,243,222 |
|
|
10,494,726 |
|
|
Gold produced (oz.) |
|
10,229 |
|
|
9,734 |
|
|
12,859 |
|
|
13,266 |
|
|
10,276 |
|
|
46,088 |
|
|
48,491 |
|
|
Lead produced (tons) |
|
4,731 |
|
|
4,591 |
|
|
5,627 |
|
|
4,924 |
|
|
4,404 |
|
|
19,873 |
|
|
21,400 |
|
|
Zinc produced (tons) |
|
12,457 |
|
|
13,227 |
|
|
14,610 |
|
|
13,354 |
|
|
11,956 |
|
|
53,648 |
|
|
56,814 |
|
|
Sales |
$ |
87,865 |
|
$ |
84,806 |
|
$ |
113,763 |
|
$ |
98,409 |
|
$ |
95,602 |
|
$ |
384,843 |
|
$ |
327,820 |
|
|
Cost of sales |
$ |
(49,252 |
) |
$ |
(55,193 |
) |
$ |
(55,488 |
) |
$ |
(53,180 |
) |
$ |
(57,252 |
) |
$ |
(213,113 |
) |
$ |
(210,748 |
) |
|
Gross profit |
$ |
38,613 |
|
$ |
29,613 |
|
$ |
58,275 |
|
$ |
45,229 |
|
$ |
38,350 |
|
$ |
171,730 |
|
$ |
117,072 |
|
|
Cash flow from operations |
$ |
51,328 |
|
$ |
43,098 |
|
$ |
69,821 |
|
$ |
44,468 |
|
$ |
58,268 |
|
$ |
208,715 |
|
$ |
176,975 |
|
|
Capital expenditures |
$ |
(9,544 |
) |
$ |
(6,228 |
) |
$ |
(6,339 |
) |
$ |
(1,772 |
) |
$ |
(7,155 |
) |
$ |
(23,883 |
) |
$ |
(19,685 |
) |
|
Free cash flow |
$ |
41,784 |
|
$ |
36,870 |
|
$ |
63,482 |
|
$ |
42,696 |
|
$ |
51,113 |
|
$ |
184,832 |
|
$ |
157,290 |
|
Cost of sales in 2021 increased to $213.1 million compared to $210.7 million in 2020 due to higher mining costs, as lower capitalized development footage resulted in an increased portion of costs allocated to production, and higher concentrate freight costs, as rates increased due to market conditions. Cash cost and AISC per silver ounce (each after by-product credits) were $(0.65) and $3.19, respectively, decreasing year over year due to higher by-product credits and lower treatment costs. 3,4
Lucky Friday Mine – Idaho
|
Dollars are in thousands except cost per ton |
4Q-2021 |
3Q-2021 |
2Q-2021 |
1Q-2021 |
4Q-2020 |
FY 2021 |
FY 2020 |
||||||||||||||
|
LUCKY FRIDAY |
|||||||||||||||||||||
|
Tons of ore processed |
|
80,097 |
|
|
78,227 |
|
|
82,442 |
|
|
81,071 |
|
|
69,257 |
|
|
321,837 |
|
|
179,208 |
|
|
Total production cost per ton |
$ |
198.83 |
|
$ |
190.66 |
|
$ |
199.48 |
|
$ |
181.28 |
|
$ |
213.82 |
|
$ |
191.50 |
|
$ |
251.49 |
|
|
Ore grade milled – Silver (oz./ton) |
|
12.54 |
|
|
11.21 |
|
|
11.60 |
|
|
11.18 |
|
|
12.53 |
|
|
11.64 |
|
|
11.85 |
|
|
Ore grade milled – Lead (%) |
|
8.11 |
|
|
7.22 |
|
|
7.55 |
|
|
7.51 |
|
|
7.74 |
|
|
7.60 |
|
|
7.49 |
|
|
Ore grade milled – Zinc (%) |
|
3.33 |
|
|
3.30 |
|
|
3.44 |
|
|
3.70 |
|
|
3.85 |
|
|
3.44 |
|
|
3.88 |
|
|
Silver produced (oz.) |
|
955,401 |
|
|
831,532 |
|
|
913,294 |
|
|
863,901 |
|
|
830,200 |
|
|
3,564,128 |
|
|
2,031,874 |
|
|
Lead produced (tons) |
|
6,131 |
|
|
5,313 |
|
|
5,913 |
|
|
5,780 |
|
|
5,103 |
|
|
23,137 |
|
|
12,727 |
|
|
Zinc produced (tons) |
|
2,296 |
|
|
2,319 |
|
|
2,601 |
|
|
2,753 |
|
|
2,457 |
|
|
9,969 |
|
|
6,298 |
|
|
Sales |
$ |
32,938 |
|
$ |
29,783 |
|
$ |
39,645 |
|
$ |
29,122 |
|
$ |
27,928 |
|
$ |
131,488 |
|
$ |
63,025 |
|
|
Cost of sales |
$ |
(23,251 |
) |
$ |
(23,591 |
) |
$ |
(27,901 |
) |
$ |
(22,795 |
) |
$ |
(20,919 |
) |
$ |
(97,538 |
) |
$ |
(56,706 |
) |
|
Gross profit |
$ |
9,687 |
|
$ |
6,192 |
|
$ |
11,744 |
|
$ |
6,327 |
|
$ |
7,009 |
|
$ |
33,950 |
|
$ |
6,319 |
|
|
Cash flow from operations |
$ |
16,953 |
|
$ |
15,017 |
|
$ |
19,681 |
|
$ |
10,943 |
|
$ |
7,217 |
|
$ |
62,594 |
|
$ |
(870 |
) |
|
Capital expenditures |
$ |
(9,109 |
) |
$ |
(9,133 |
) |
$ |
(5,731 |
) |
$ |
(5,912 |
) |
$ |
(11,148 |
) |
$ |
(29,885 |
) |
$ |
(25,776 |
) |
|
Free cash flow |
$ |
7,844 |
|
$ |
5,884 |
|
$ |
13,950 |
|
$ |
5,031 |
|
$ |
(3,931 |
) |
$ |
32,709 |
|
$ |
(26,646 |
) |
Cost of sales in 2021 increased to $97.5 million compared to $56.7 million in 2020 reflecting a full year of production following the strike ending in 2020. Cash cost and AISC per silver ounce (each after by-product credits) were $6.60 and $14.34, respectively, decreasing year over year due to higher production and by-product credits partially offset by higher costs. 3,4
In 2021, we tested and implemented the UCB mining method. The UCB method is a new, productive mining method developed by Hecla in an effort to proactively control fault-slip seismicity in deep, high-stress, narrow-vein mining. The method uses bench drilling and blasting methods to fragment significant vertical and lateral extents of the vein beneath a top cut taken along the strike of the vein and under engineered backfill. The method is accomplished without the use of drop raises or lower mucking drives which may result in local stress concentrations and increased exposure to seismic events. Large blasts using up to 35,000 lbs. of pumped emulsion and programmable electronic detonators fragment up to 350 feet of strike length to a depth of approximately 30 feet. These large blasts proactively induce fault-slip seismicity at the time of the blast and shortly after it. This blasted corridor is then mined underhand for two cuts. As these cuts are mined, little to no blasting is done to advance them. Dilution is controlled by supporting the hanging wall and footwall as the mining progresses through the blasted ore. The entire cycle repeats and stoping advances downdip, under fill, and in a de-stressed zone. The method allows for greater control of fault-slip seismic events, significantly improving safety. In addition, a notable productivity increase has been achieved by reducing seismic delays and utilizing bulk mining techniques. In 2021, 86% of the tons mined were produced through the UCB method.
Casa Berardi – Quebec
|
Dollars are in thousands except cost per ton |
4Q-2021 |
3Q-2021 |
2Q-2021 |
1Q-2021 |
4Q-2020 |
FY 2021 |
FY 2020 |
||||||||||||||
|
CASA BERARDI |
|
|
|
|
|
|
|
||||||||||||||
|
Tons of ore processed – underground |
|
161,355 |
|
|
167,435 |
|
|
178,908 |
|
|
186,919 |
|
|
185,335 |
|
|
694,617 |
|
|
658,271 |
|
|
Tons of ore processed – surface pit |
|
225,662 |
|
|
230,708 |
|
|
195,775 |
|
|
181,484 |
|
|
197,646 |
|
|
833,629 |
|
|
625,430 |
|
|
Tons of ore processed – total |
|
387,017 |
|
|
398,143 |
|
|
374,683 |
|
|
368,403 |
|
|
382,981 |
|
|
1,528,246 |
|
|
1,283,701 |
|
|
Surface tons mined – ore and waste |
|
1,507,457 |
|
|
1,483,231 |
|
|
2,033,403 |
|
|
1,991,087 |
|
|
1,493,706 |
|
|
7,015,178 |
|
|
5,559,302 |
|
|
Total production cost per ton |
$ |
108.82 |
|
$ |
86.95 |
|
$ |
99.36 |
|
$ |
99.67 |
|
$ |
98.33 |
|
$ |
98.60 |
|
$ |
105.71 |
|
|
Ore grade milled – Gold (oz./ton) – underground |
|
0.165 |
|
|
0.155 |
|
|
0.148 |
|
|
0.147 |
|
|
0.147 |
|
|
0.161 |
|
|
0.136 |
|
|
Ore grade milled – Gold (oz./ton) – surface pit |
|
0.072 |
|
|
0.037 |
|
|
0.055 |
|
|
0.048 |
|
|
0.052 |
|
|
0.056 |
|
|
0.051 |
|
|
Ore grade milled – Gold (oz./ton) – combined |
|
0.110 |
|
|
0.087 |
|
|
0.100 |
|
|
0.120 |
|
|
0.123 |
|
|
0.104 |
|
|
0.117 |
|
|
Ore grade milled – Silver (oz./ton) |
|
0.02 |
|
|
0.02 |
|
|
0.03 |
|
|
0.04 |
|
|
0.03 |
|
|
0.03 |
|
|
0.02 |
|
|
Gold produced (oz.) – underground |
|
22,910 |
|
|
24,170 |
|
|
23,441 |
|
|
27,569 |
|
|
27,261 |
|
|
98,090 |
|
|
89,521 |
|
|
Gold produced (oz.) – surface pit |
|
14,356 |
|
|
5,552 |
|
|
7,892 |
|
|
8,621 |
|
|
10,319 |
|
|
36,421 |
|
|
31,971 |
|
|
Total Gold produced (oz.) |
|
37,266 |
|
|
29,722 |
|
|
31,333 |
|
|
36,190 |
|
|
37,580 |
|
|
134,511 |
|
|
121,492 |
|
|
Total Silver produced (oz.) |
|
7,967 |
|
|
7,012 |
|
|
7,917 |
|
|
10,675 |
|
|
8,858 |
|
|
33,571 |
|
|
24,142 |
|
|
Sales |
$ |
60,054 |
|
$ |
56,065 |
|
$ |
56,122 |
|
$ |
72,911 |
|
$ |
59,493 |
|
$ |
245,152 |
|
$ |
209,224 |
|
|
Cost of sales |
$ |
(57,069 |
) |
$ |
(58,164 |
) |
$ |
(54,669 |
) |
$ |
(59,927 |
) |
$ |
(53,521 |
) |
$ |
(229,829 |
) |
$ |
(194,414 |
) |
|
Gross profit (loss) |
$ |
2,985 |
|
$ |
(2,099 |
) |
$ |
1,453 |
|
$ |
12,984 |
|
$ |
5,972 |
|
$ |
15,323 |
|
$ |
14,810 |
|
|
Cash flow from operations |
$ |
12,153 |
|
$ |
21,440 |
|
$ |
17,495 |
|
$ |
32,229 |
|
$ |
25,696 |
|
$ |
83,317 |
|
$ |
88,066 |
|
|
Capital expenditures |
$ |
(9,537 |
) |
$ |
(11,488 |
) |
$ |
(14,745 |
) |
$ |
(13,847 |
) |
$ |
(16,427 |
) |
$ |
(49,617 |
) |
$ |
(40,840 |
) |
|
Free cash flow |
$ |
2,616 |
|
$ |
9,952 |
|
$ |
2,750 |
|
$ |
18,382 |
|
$ |
9,269 |
|
$ |
33,700 |
|
$ |
47,226 |
|
Full-year 2021 cost of sales was $229.8 million, cash cost and AISC per ounce, after by-product credits, were $1,125 and $1,399 respectively.3,4 Year over year decline in cash cost and AISC per ounce was due to higher gold production in 2021; AISC per ounce was also impacted by lower sustaining capital, partially offset by higher exploration spending. 3,4
Nevada Operations
|
Dollars are in thousands except cost per ton |
4Q-2021 |
3Q-2021 |
2Q-2021 |
1Q-2021 |
4Q-2020 |
FY 2021 |
FY 2020 |
||||||||||||||
|
NEVADA OPERATIONS |
|
|
|
|
|
|
|
||||||||||||||
|
Tons of ore processed |
|
2,185 |
|
|
11,953 |
|
|
38,947 |
|
|
16,459 |
|
|
— |
|
|
69,544 |
|
|
27,984 |
|
|
Total production cost per ton |
$ |
200.72 |
|
$ |
374.46 |
|
$ |
161.50 |
|
$ |
360.72 |
|
$ |
— |
|
$ |
132.64 |
|
$ |
892.09 |
|
|
Ore grade milled – Gold (oz./ton) |
|
0.226 |
|
|
0.234 |
|
|
0.41 |
|
|
0.185 |
|
|
— |
|
|
0.321 |
|
|
1.232 |
|
|
Silver produced (oz.) |
|
924 |
|
|
270 |
|
|
45,125 |
|
|
— |
|
|
— |
|
|
46,319 |
|
|
37,443 |
|
|
Gold produced (oz.) |
|
482 |
|
|
2,751 |
|
|
14,947 |
|
|
2,548 |
|
|
— |
|
|
20,728 |
|
|
31,756 |
|
|
Cash flow from operations |
$ |
(2,060 |
) |
$ |
19,163 |
|
$ |
(573 |
) |
$ |
855 |
|
$ |
1,897 |
|
$ |
17,385 |
|
$ |
13,696 |
|
|
Capital additions |
$ |
(277 |
) |
$ |
(29 |
) |
$ |
(5,075 |
) |
$ |
(89 |
) |
$ |
(2,154 |
) |
$ |
(5,470 |
) |
$ |
(4,003 |
) |
|
Free cash flow |
$ |
(2,337 |
) |
$ |
19,134 |
|
$ |
(5,648 |
) |
$ |
766 |
|
$ |
(257 |
) |
$ |
11,915 |
|
$ |
9,693 |
|
2021 production and revenue was generated from processing previously stockpiled ore at third-party processing facilities. Exploration activities at Midas and development of a decline to the Hatter Graben area at Hollister are ongoing, with underground exploration drilling of Hatter Graben commencing from available platforms in the fourth quarter of 2021.
EXPLORATION AND PRE-DEVELOPMENT
Exploration and pre-development expenses totaled $12.9 million for the fourth quarter and $47.9 million for the full year (a Company record), an increase of $29.6 million compared to 2020.
For the year ended 2021, the Company reported the second highest silver and gold reserves at 200 million ounces and 2.7 million ounces, respectively. Silver reserves increased 6% year over year with Greens Creek increasing reserves by 12% to 125 million ounces, the second highest in the mine’s history since 2002. Silver and gold inferred resources increased by 8% and 2%, respectively. A breakdown of the Company’s reserves and resources is located in Table A at the end of this news release.
For further details on the Company’s 2021 exploration and pre-development program and 2022 planned expenditures as well as reserves and resources at year-end 2021, please refer to the news release entitled “Hecla Reports 2nd Highest Silver Reserves in Company History” released on February 17, 2022.
2022 ESTIMATES5
The Company is providing a three-year production outlook and estimates of costs, capital and exploration and pre-development expenses for 2022. Cost guidance includes planned COVID-19 management costs and 5% inflation, which is being experienced throughout the industry. The guidance below excludes any unforeseen disruptions related to COVID-19 and its variants.
2022 Production Outlook
|
|
Silver Production |
Gold Production |
Silver Equivalent |
Gold Equivalent |
|
Greens Creek * |
8.6 – 8.9 |
40 – 43 |
20.7 – 21.2 |
268 – 275 |
|
Lucky Friday * |
4.3 – 4.6 |
N/A |
8.9 – 9.3 |
116 – 120 |
|
Casa Berardi |
N/A |
125 – 132 |
9.7 – 10.2 |
125 – 132 |
|
2022 Total |
12.9 – 13.5 |
165 – 175 |
39.3 – 40.7 |
509 – 527 |
|
2023 Total |
13.5 – 14.5 |
175 – 185 |
40.7 – 42.5 |
527 – 550 |
|
2024 Total |
14.5 – 15.1 |
185 – 195 |
42.5 – 43.8 |
550 – 567 |
|
*Equivalent ounces include lead and zinc production |
||||
2022 Cost Outlook
|
|
Costs of Sales |
Cash cost, after by-product |
AISC, after by-product |
|
Greens Creek |
$230 |
$0.75 – $2.50 |
$6.50 – $8.50 |
|
Lucky Friday |
$115 |
$0.75 – $2.00 |
$7.25 – $9.25 |
|
Total Silver |
$345 |
$0.75 – $2.50 |
$9.75 – $11.75 |
|
Casa Berardi (Total Gold) |
$210 |
$1,175 – $1,325 |
$1,450 – $1,600 |
2022 Capital and Exploration Outlook
|
Capital expenditures |
$135 million |
|
Exploration and Pre-development expenditures |
$45 million |
DIVIDENDS
Common Stock
The Board of Directors declared a quarterly cash dividend of $0.00625 per share of common stock, consisting of $0.00375 per share for the minimum dividend component and $0.0025 per share for the silver-linked component. The common stock dividend is payable on or about March 18, 2022, to stockholders of record on March 9, 2022. The realized silver price was $23.49 in the fourth quarter satisfying the criterion for the silver-linked component under the Company’s common stock dividend policy.
Preferred Stock
The Board of Directors elected to declare a quarterly cash dividend of $0.875 per share of preferred stock, payable on or about April 1, 2022, to stockholders of record on March 15, 2022.
CONFERENCE CALL AND WEBCAST
A conference call and webcast will be held Tuesday, February 22, at 10:00 a.m. Eastern Time to discuss these results. We recommend that you dial in at least 10 minutes before the call commencement. You may join the conference call by dialing toll-free 1-833-350-1380 or for international dialing 1-647-689-6934. The Participant Code is 3975176 and must be provided when dialing in. Hecla’s live and archived webcast can be accessed at www.hecla-mining.com under Investors.
VIRTUAL INVESTOR EVENT
Hecla will be holding a Virtual Investor Event on Tuesday, February 22, from 1:00 p.m. to 2:30 p.m. Eastern Time.
Hecla invites shareholders, investors, and other interested parties to schedule a personal, 30-minute virtual meeting (video or telephone) with a member of senior management to discuss Exploration, Operations, or general matters. Click on the link below to schedule a call (or copy and paste the link into your web browser.). You can select a topic once you have entered the meeting calendar. If you are unable to book a time, either due to high demand or for other reasons, please reach out to Russell Lawlar, Sr. Vice President – CFO and Treasurer at [email protected] or 208-769-4130.
One-on-One meeting URL: https://calendly.com/2022-february-vie
ABOUT HECLA
Founded in 1891, Hecla Mining Company (NYSE:HL) is the largest silver producer in the United States. In addition to operating mines in Alaska, Idaho, and Quebec, Canada, the Company owns a number of exploration and pre-development properties in world-class silver and gold mining districts throughout North America.
NOTES
Non-GAAP Financial Measures
Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by United States generally accepted accounting principles (GAAP). These measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The non-GAAP financial measures cited in this release and listed below are reconciled to their most comparable GAAP measure at the end of this release.
(1) Adjusted EBITDA is a non-GAAP measurement, a reconciliation of which to net income, the most comparable GAAP measure, can be found at the end of the release. Adjusted EBITDA is a measure used by management to evaluate the Company’s operating performance but should not be considered an alternative to net income, or cash provided by operating activities as those terms are defined by GAAP, and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. In addition, the Company may use it when formulating performance goals and targets under its incentive program. Net debt to adjusted EBITDA is a non-GAAP measurement, a reconciliation of which to debt and net income (loss), the most comparable GAAP measurements, can be found at the end of the release. It is an important measure for management to measure relative indebtedness and the ability to service the debt relative to its peers. It is calculated as total debt outstanding less total cash on hand divided by adjusted EBITDA.
(2) Free cash flow is a non-GAAP measure calculated as cash provided by operating activities less additions to properties, plants and equipment.
Contacts
Russell Lawlar
Senior Vice President – CFO and Treasurer
Jeanne DuPont
Senior Communication Coordinator
800-HECLA91 (800-432-5291)
Investor Relations
Email: [email protected]
Website: http://www.hecla-mining.com
