Hecla Reports First Quarter 2022 Results
8th consecutive quarter of free cash flow generation
The Period Ended: March 31, 2022
For Release: May 10, 2022
COEUR D’ALENE, Idaho–(BUSINESS WIRE)–Hecla Mining Company (NYSE:HL) (Hecla or the Company) today announced first quarter 2022 financial and operating results.
FIRST QUARTER HIGHLIGHTS
Operational
- Silver production of 3.3 million ounces, a 3% increase over fourth quarter 2021.
- The Company’s silver mines reported total cost of sales of $78.9 million and cash cost and AISC per silver ounce (each after by-product credits) of $1.09 and $7.64 respectively.1,2
Financial
- Sales of $186.5 million, a slight increase over fourth quarter 2021.
- Cash provided by operating activities of $37.9 million and $16.4 million of quarterly free cash flow after semi-annual interest payment of $18.5 million on outstanding long-term debt.3
- Income applicable to common shareholders of $4.0 million, or $0.01 per share (basic).
- Returned 21% of free cash flow to our common and preferred shareholders through dividends.
- Credit ratings upgraded to B1 and B+ by Moody’s and S&P, respectively.
“All of our mines generated positive free cash flow despite inflationary cost pressures, slow supply chains, and some COVID-19 related labor challenges,” said Phillips S. Baker Jr., President and CEO. “Hecla, the largest silver producer in the U.S., is also the country’s third largest zinc miner, and by-products contributed to the silver mines’ strong performance and help offset inflationary pressure. Over the last eight quarters, we have generated $434 million in cash flow from operations and this quarter marked our eighth consecutive quarter of free cash flow, with $232 million generated over that period. This strong, consistent performance has strengthened our balance sheet and led to credit rating upgrades.”
Baker continued, “With strong grades and our innovative mining method at the Lucky Friday, we expect the mine’s quarterly silver production for the rest of the year to exceed one million ounces contributing to our increasing silver production profile. Growing U.S. silver production is particularly rewarding as demand for silver to generate green energy is growing and the need for domestically sourced metals is being understood because of the pandemic and the Ukrainian war.”
FINANCIAL OVERVIEW
“Total cost of sales” as used in this release is comprised of cost of sales and other direct production costs and depreciation, depletion and amortization.
|
In Thousands unless stated otherwise |
Q1-2022 |
4Q-2021 |
3Q-2021 |
2Q-2021 |
1Q-2021 |
FY 2021 |
||||||||||||||||||
|
FINANCIAL AND PRODUCTION HIGHLIGHTS |
||||||||||||||||||||||||
|
Sales |
$ |
186,499 |
|
$ |
185,078 |
|
$ |
193,560 |
|
$ |
217,983 |
|
$ |
210,852 |
|
$ |
807,473 |
|
||||||
|
Total cost of sales |
$ |
141,070 |
|
$ |
131,837 |
|
$ |
158,332 |
|
$ |
156,052 |
|
$ |
143,451 |
|
$ |
589,672 |
|
||||||
|
Gross profit |
$ |
45,429 |
|
$ |
53,241 |
|
$ |
35,228 |
|
$ |
61,931 |
|
$ |
67,401 |
|
$ |
217,801 |
|
||||||
|
Income (loss) applicable to common shareholders |
$ |
4,015 |
|
$ |
11,737 |
|
$ |
(1,117 |
) |
$ |
2,610 |
|
$ |
21,313 |
|
$ |
34,543 |
|
||||||
|
Basic income (loss) per common share (in dollars) |
$ |
0.01 |
|
$ |
0.02 |
|
$ |
— |
|
$ |
0.05 |
|
$ |
0.04 |
|
$ |
0.06 |
|
||||||
|
Adjusted EBITDA 4 |
$ |
58,199 |
|
$ |
58,249 |
|
$ |
49,414 |
|
$ |
84,507 |
|
$ |
86,610 |
|
$ |
278,780 |
|
||||||
|
Net Debt to Adjusted EBITDA4,* |
|
1.2 |
|
|
|
|
|
|
1.1 |
|
||||||||||||||
|
Cash provided by operating activities |
$ |
37,909 |
|
$ |
53,355 |
|
$ |
42,742 |
|
$ |
86,304 |
|
$ |
37,936 |
|
$ |
220,337 |
|
||||||
|
Capital Expenditures |
$ |
(21,478 |
) |
$ |
(28,838 |
) |
$ |
(26,899 |
) |
$ |
(31,898 |
) |
$ |
(21,413 |
) |
$ |
(109,048 |
) |
||||||
|
Free Cash Flow 2 |
$ |
16,431 |
|
$ |
24,517 |
|
$ |
15,843 |
|
$ |
54,406 |
|
$ |
16,523 |
|
$ |
111,289 |
|
||||||
|
Silver ounces produced |
|
3,324,708 |
|
|
3,226,927 |
|
|
2,676,084 |
|
|
3,524,783 |
|
|
3,459,446 |
|
|
12,887,240 |
|
||||||
|
Silver payable ounces sold |
|
2,687,261 |
|
|
2,606,622 |
|
|
2,581,690 |
|
|
3,415,464 |
|
|
3,030,026 |
|
|
11,633,802 |
|
||||||
|
Gold ounces produced |
|
41,642 |
|
|
47,977 |
|
|
42,207 |
|
|
59,139 |
|
|
52,004 |
|
|
201,327 |
|
||||||
|
Gold payable ounces sold |
|
41,053 |
|
|
44,156 |
|
|
53,000 |
|
|
47,168 |
|
|
57,286 |
|
|
201,610 |
|
||||||
|
*Reflects trailing twelve months ending March 31, 2022. Reconciliations are available at the end of the release. |
||||||||||||||||||||||||
Income applicable to common shareholders for the first quarter was $4.0 million, or $0.01 per share, compared to $11.7 million, or $0.02 per share, in the fourth quarter of 2021 (“the prior quarter”), and was impacted by the following factors:
- Gross profit decreased by $7.8 million due primarily to higher mining costs at Casa Berardi resulting from inflationary pressures and increased used of contractors.
- An income tax provision of $5.6 million for U.S. and foreign jurisdiction income and mining taxes impacted by non-recognition of net operating losses in Nevada compared to a benefit of $25.6 million in the prior quarter primarily due to the release of the valuation allowance on the Hecla U.S. group deferred tax assets.
- A net foreign exchange loss of $2.0 million versus a net gain of $0.4 million in the prior quarter primarily due to strengthening of the Canadian dollar against the U.S. dollar.
- Higher general and administrative expense by $1.7 million due to higher incentive compensation accruals.
These decreases were partially offset by:
- Net gains from fair value adjustments of $6.0 million versus net losses of $25.1 million in the prior quarter primarily due to unrealized losses on base metal derivatives contracts incurred prior to their designation as hedges for accounting purposes effective November 1, 2021.
- Provision for closed operations and environmental matters decreased by $1.4 million reflecting an accrual for increased costs at the legacy Troy mine in the prior quarter.
Cash provided by operating activities of $37.9 million decreased $15.4 million compared to the prior quarter, primarily due to negative working capital changes of $17.8 million mostly due to interest payments on the outstanding long-term debt.
Capital expenditures totaled $21.5 million, $7.3 million less than the prior quarter due to lower spending at Greens Creek and Casa Berardi, which spent $3.1 and $7.8 million respectively this quarter while Lucky Friday spent $9.7 million.
The impact of inflationary pressures, supply chain challenges, and manpower constraints due to various factors, including COVID-19, impacted each operation differently. Overall, the Company’s silver assets operated as planned with Greens Creek outperforming due to higher grades while Lucky Friday saw some production impact due to delays in equipment delivery. Although all operations were impacted by inflation, AISC for consolidated silver assets declined over the prior quarter as higher by-product credits and higher silver production more than offset the inflationary cost pressures. Casa Berardi saw the largest impact because it mines the greatest volume of material (approximately 8 times that of Greens Creek annually) and processes the largest volume of ore (approximately 1.8 times that of Greens Creek), therefore increases in the cost of fuel, steel, reagents, and other consumables have a greater impact on the mine. Casa Berardi was also constrained by the lack of available manpower due to competition for skilled workers in the Abitibi. The Company is monitoring and attempting to proactively mitigate the impact that inflation, supply chain delays, and lack of available manpower has on production and per ounce costs, and if current by-product credits continue, believes that it can successfully navigate these challenges.
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 March 31, 2022, the Company had contracts covering approximately 60% of the forecasted payable zinc production (through 2024) at an average price of $1.30 per pound, and 50% of the forecasted payable lead production (through 2024) at an average price of $0.99 per pound.
The Company manages Canadian dollar (CAD) exposure through forward contracts. At March 31, 2022, the Company had hedged approximately 35% of forecasted CAD direct production costs through 2025 at an average CAD/USD rate of 1.30. The Company has also hedged approximately 27% of capital costs for 2022 at 1.29.
OPERATIONS OVERVIEW
Greens Creek Mine – Alaska
|
Dollars are in thousands except cost per ton |
1Q-2022 |
4Q-2021 |
3Q-2021 |
2Q-2021 |
1Q-2021 |
FY 2021 |
||||||||||||||||||
|
GREENS CREEK |
||||||||||||||||||||||||
|
Tons of ore processed |
|
211,687 |
|
|
221,814 |
|
|
211,142 |
|
|
214,931 |
|
|
194,080 |
|
|
841,967 |
|
||||||
|
Total production cost per ton |
$ |
192.16 |
|
$ |
174.55 |
|
$ |
181.60 |
|
$ |
171.13 |
|
$ |
182.61 |
|
$ |
177.30 |
|
||||||
|
Ore grade milled – Silver (oz./ton) |
|
13.84 |
|
|
12.60 |
|
|
11.14 |
|
|
14.52 |
|
|
16.01 |
|
|
13.51 |
|
||||||
|
Ore grade milled – Gold (oz./ton) |
|
0.07 |
|
|
0.07 |
|
|
0.07 |
|
|
0.08 |
|
|
0.09 |
|
|
0.08 |
|
||||||
|
Ore grade milled – Lead (%) |
|
2.76 |
|
|
2.61 |
|
|
2.68 |
|
|
3.14 |
|
|
3.06 |
|
|
2.87 |
|
||||||
|
Ore grade milled – Zinc (%) |
|
6.56 |
|
|
6.28 |
|
|
7.05 |
|
|
7.57 |
|
|
7.62 |
|
|
7.11 |
|
||||||
|
Silver produced (oz.) |
|
2,429,782 |
|
|
2,262,635 |
|
|
1,837,270 |
|
|
2,558,447 |
|
|
2,584,870 |
|
|
9,243,222 |
|
||||||
|
Gold produced (oz.) |
|
11,402 |
|
|
10,229 |
|
|
9,734 |
|
|
12,859 |
|
|
13,266 |
|
|
46,088 |
|
||||||
|
Lead produced (tons) |
|
4,883 |
|
|
4,731 |
|
|
4,591 |
|
|
5,627 |
|
|
4,924 |
|
|
19,873 |
|
||||||
|
Zinc produced (tons) |
|
12,494 |
|
|
12,457 |
|
|
13,227 |
|
|
14,610 |
|
|
13,354 |
|
|
53,648 |
|
||||||
|
Sales |
$ |
86,090 |
|
$ |
87,865 |
|
$ |
84,806 |
|
$ |
113,763 |
|
$ |
98,409 |
|
$ |
384,843 |
|
||||||
|
Total cost of sales |
$ |
(49,638 |
) |
$ |
(49,251 |
) |
$ |
(55,193 |
) |
$ |
(55,488 |
) |
$ |
(53,181 |
) |
$ |
(213,113 |
) |
||||||
|
Gross profit |
$ |
36,452 |
|
$ |
38,614 |
|
$ |
29,613 |
|
$ |
58,275 |
|
$ |
45,228 |
|
$ |
171,730 |
|
||||||
|
Cash flow from operations |
$ |
56,295 |
|
$ |
50,632 |
|
$ |
40,626 |
|
$ |
68,521 |
|
$ |
44,345 |
|
$ |
204,124 |
|
||||||
|
Exploration |
$ |
165 |
|
$ |
696 |
|
$ |
2,472 |
|
$ |
1,300 |
|
$ |
123 |
|
$ |
4,591 |
|
||||||
|
Capital additions |
$ |
(3,092 |
) |
$ |
(9,544 |
) |
$ |
(6,228 |
) |
$ |
(6,339 |
) |
$ |
(1,772 |
) |
$ |
(23,883 |
|||||||
|
Free cash flow 2 |
$ |
53,368 |
|
$ |
41,784 |
|
$ |
36,870 |
|
$ |
63,482 |
|
$ |
42,696 |
|
$ |
184,832 |
|
||||||
Total cost of sales for the first quarter 2022 was $49.6 million compared to $49.3 million in the prior quarter. Cash cost and AISC per silver ounce (each after by-product credits) were $(0.90) and $1.90, respectively, decreasing over prior quarter due to higher by-product credits and higher silver production due to higher mined grades. 1,2
Lucky Friday Mine – Idaho
|
Dollars are in thousands except cost per ton |
1Q-2022 |
4Q-2021 |
3Q-2021 |
2Q-2021 |
1Q-2021 |
FY 2021 |
||||||||||||||||||
|
LUCKY FRIDAY |
|
|
|
|
|
|
||||||||||||||||||
|
Tons of ore processed |
|
77,725 |
|
|
80,097 |
|
|
78,227 |
|
|
82,442 |
|
|
81,071 |
|
|
321,837 |
|
||||||
|
Total production cost per ton |
$ |
247.17 |
|
$ |
198.83 |
|
$ |
190.66 |
|
$ |
199.48 |
|
$ |
190.54 |
|
$ |
191.50 |
|
||||||
|
Ore grade milled – Silver (oz./ton) |
|
12.04 |
|
|
12.54 |
|
|
11.21 |
|
|
11.60 |
|
|
11.18 |
|
|
11.64 |
|
||||||
|
Ore grade milled – Lead (%) |
|
8.16 |
|
|
8.11 |
|
|
7.22 |
|
|
7.55 |
|
|
7.51 |
|
|
7.60 |
|
||||||
|
Ore grade milled – Zinc (%) |
|
3.61 |
|
|
3.33 |
|
|
3.30 |
|
|
3.44 |
|
|
3.70 |
|
|
3.44 |
|
||||||
|
Silver produced (oz.) |
|
887,858 |
|
|
955,401 |
|
|
831,532 |
|
|
913,294 |
|
|
863,901 |
|
|
3,564,128 |
|
||||||
|
Lead produced (tons) |
|
5,980 |
|
|
6,131 |
|
|
5,313 |
|
|
5,913 |
|
|
5,780 |
|
|
23,137 |
|
||||||
|
Zinc produced (tons) |
|
2,452 |
|
|
2,296 |
|
|
2,319 |
|
|
2,601 |
|
|
2,753 |
|
|
9,969 |
|
||||||
|
Sales |
$ |
38,040 |
|
$ |
32,938 |
|
$ |
29,783 |
|
$ |
39,645 |
|
$ |
29,122 |
|
$ |
131,488 |
|
||||||
|
Total cost of sales |
$ |
(29,264 |
) |
$ |
(23,252 |
) |
$ |
(23,591 |
) |
$ |
(27,901 |
) |
$ |
(22,794 |
) |
$ |
(97,538 |
) |
||||||
|
Gross profit |
$ |
8,776 |
|
$ |
9,686 |
|
$ |
6,192 |
|
$ |
11,744 |
|
$ |
6,328 |
|
$ |
33,950 |
|
||||||
|
Cash flow from operations |
$ |
11,765 |
|
$ |
16,953 |
|
$ |
15,017 |
|
$ |
19,681 |
|
$ |
10,943 |
|
$ |
62,594 |
|
||||||
|
Capital additions |
$ |
(9,652 |
) |
$ |
(9,109 |
) |
$ |
(9,133 |
) |
$ |
(5,731 |
) |
$ |
(5,912 |
) |
$ |
(29,885 |
) |
||||||
|
Free cash flow 2 |
$ |
2,113 |
|
$ |
7,844 |
|
$ |
5,884 |
|
$ |
13,950 |
|
$ |
5,031 |
|
$ |
32,709 |
|
||||||
Total cost of sales for the first quarter 2022 was $29.3 million, an increase of $6.0 million over the prior quarter due to increased use of contractors resulting from manpower shortages, and higher maintenance costs related to underground mobile equipment. Cash cost and AISC per silver ounce (each after by-product credits) were $6.57 and $13.15, respectively, and increased over prior quarter due to higher total cost of sales and lower production.1,2
Casa Berardi Mine – Quebec
|
Dollars are in thousands except cost per ton |
1Q-2022 |
4Q-2021 |
3Q-2021 |
2Q-2021 |
1Q-2021 |
FY 2021 |
||||||||||||||||||
|
CASA BERARDI |
|
|
|
|
|
|
||||||||||||||||||
|
Tons of ore processed – underground |
|
161,609 |
|
|
161,355 |
|
|
167,435 |
|
|
178,908 |
|
|
186,919 |
|
|
694,617 |
|
||||||
|
Tons of ore processed – surface pit |
|
224,541 |
|
|
225,662 |
|
|
230,708 |
|
|
195,775 |
|
|
181,484 |
|
|
833,629 |
|
||||||
|
Tons of ore processed – total |
|
386,150 |
|
|
387,017 |
|
|
398,143 |
|
|
374,683 |
|
|
368,403 |
|
|
1,528,246 |
|
||||||
|
Surface tons mined – ore and waste |
|
1,586,118 |
|
|
1,507,457 |
|
|
1,483,231 |
|
|
2,033,403 |
|
|
1,991,087 |
|
|
7,015,178 |
|
||||||
|
Total production cost per ton |
$ |
117.96 |
|
$ |
108.82 |
|
$ |
86.95 |
|
$ |
99.36 |
|
$ |
99.67 |
|
$ |
98.60 |
|
||||||
|
Ore grade milled – Gold (oz./ton) – underground |
|
0.141 |
|
|
0.165 |
|
|
0.155 |
|
|
0.148 |
|
|
0.147 |
|
|
0.161 |
|
||||||
|
Ore grade milled – Gold (oz./ton) – surface pit |
|
0.054 |
|
|
0.072 |
|
|
0.037 |
|
|
0.055 |
|
|
0.048 |
|
|
0.056 |
|
||||||
|
Ore grade milled – Gold (oz./ton) – combined |
|
0.091 |
|
|
0.110 |
|
|
0.087 |
|
|
0.100 |
|
|
0.120 |
|
|
0.104 |
|
||||||
|
Ore grade milled – Silver (oz./ton) |
|
0.02 |
|
|
0.02 |
|
|
0.02 |
|
|
0.03 |
|
|
0.04 |
|
|
0.03 |
|
||||||
|
Gold produced (oz.) – underground |
|
19,374 |
|
|
22,910 |
|
|
24,170 |
|
|
23,441 |
|
|
27,569 |
|
|
98,090 |
|
||||||
|
Gold produced (oz.) – surface pit |
|
10,866 |
|
|
14,356 |
|
|
5,552 |
|
|
7,892 |
|
|
8,621 |
|
|
36,421 |
|
||||||
|
Gold produced (oz.) – total |
|
30,240 |
|
|
37,266 |
|
|
29,722 |
|
|
31,333 |
|
|
36,190 |
|
|
134,511 |
|
||||||
|
Silver produced (oz.) – total |
|
7,068 |
|
|
7,967 |
|
|
7,012 |
|
|
7,917 |
|
|
10,675 |
|
|
33,571 |
|
||||||
|
Sales |
$ |
62,101 |
|
$ |
60,054 |
|
$ |
56,065 |
|
$ |
56,122 |
|
$ |
72,911 |
|
$ |
245,152 |
|
||||||
|
Total cost of sales |
$ |
(62,168 |
) |
$ |
(57,069 |
) |
$ |
(58,164 |
) |
$ |
(54,669 |
) |
$ |
(59,927 |
) |
$ |
(229,829 |
) |
||||||
|
Gross profit/(loss) |
$ |
(67 |
) |
$ |
2,985 |
|
$ |
(2,099 |
) |
$ |
1,453 |
|
$ |
12,984 |
|
$ |
15,323 |
|
||||||
|
Cash flow from operations |
$ |
8,089 |
|
$ |
10,029 |
|
$ |
17,058 |
|
$ |
15,756 |
|
$ |
30,948 |
|
$ |
73,791 |
|
||||||
|
Exploration |
$ |
2,635 |
|
$ |
2,124 |
|
$ |
4,382 |
|
$ |
1,739 |
|
$ |
1,281 |
|
$ |
9,526 |
|
||||||
|
Capital additions |
$ |
(7,808 |
) |
$ |
(9,537 |
) |
$ |
(11,488 |
) |
$ |
(14,745 |
) |
$ |
(13,847 |
) |
$ |
(49,617 |
) |
||||||
|
Free cash flow 2 |
$ |
2,916 |
|
$ |
2,616 |
|
$ |
9,952 |
|
$ |
2,750 |
|
$ |
18,382 |
|
$ |
33,700 |
|
||||||
Casa Berardi produced 30,240 ounces of gold compared to 37,266 ounces in the prior quarter. This represents a decrease of 19% due to lower grades milled as more material was sourced from the 160 pit. The mill continued to perform well, operating at an average of 4,291 tons per day (“tpd”) in the first quarter of 2022 compared to 4,207 tpd over prior quarter with availability exceeding 90% in both periods.
Total cost of sales for the first quarter 2022 was $62.2 million compared to $57.1 million in the prior quarter. The increase in total cost of sales was primarily due to inflationary cost pressures related to steel, reagents, fuel for mobile equipment, other consumables, and increased contractor costs across the operation due to a lack of manpower availability. Cash cost and AISC per gold ounce (each after by-product credits) increased by $379 per ounce and $340 per ounce over the prior quarter to $1,516 and $1,810, respectively, with the increase primarily driven by higher total cost of sales. 1,2
EXPLORATION AND PRE-DEVELOPMENT
Exploration and pre-development expenses totaled $12.8 million for the first quarter 2022. Exploration activities primarily focused on targets at Casa Berardi, Greens Creek, Nevada Operations, and San Sebastian.
Exploration highlights
- Drilling from Casa Berardi’s ten drills continues to expand and upgrade resources while the first regional exploration sonic drilling identified alteration and geochemical vectors to guide exploration to mineralization undercover.
- Greens Creek drilling continued with 3 drills to upgrade and expand resources in four of the nine zones.
- Drilling at San Sebastian’s La Roca target identified large new quartz carbonate vein systems up to 51.7 feet in true width.
At Casa Berardi, seven underground and three surface core drills focused on resource conversion and exploration drilling to upgrade and expand resources in the West, Principal, and East mine areas. Drilling in the West Mine targeted the eastern edge of the 113 Zone to define continuity and expand mineralization to the east and targeted the 118 Zone to define and expand mineralization in the 14 and 15 lenses up and down plunge and to the east. Highlights from this drilling include intercepts grading 0.55 oz/ton gold over 23.0 feet and 0.43 oz/ton gold over 12.1 feet, expanding and upgrading high-grade mineralization in the 113 Zone.
Drilling in the Principal Mine targeted the lower part of the 123 Zone and the extensions to the 124 and 134 zones. In the 123 Zone, drilling confirmed the eastern plunge of mineralization hosted within a chert and massive sulfide horizon crosscut by quartz veins where additional drilling is planned. Surface drilling targeting the area between the 124 and 134 zones focused on expanding and connecting mineralization between these two zones which could have a positive impact on future mining in the proposed Principal and 134 open pits. Highlights from this drilling include 0.05 oz/ton gold over 86.6 feet and 0.08 oz/ton gold over 31.4 feet.
Drilling in the East Mine targeted upgrading and expanding mineralization in the 146 and 148 zones. Results from the 146 Zone drilling indicate the original 146-09 lens is expanding into multiple stacked mineralized lenses characterized by pyrite and pyrrhotite bands within the sedimentary rocks located 300 feet south of the Casa Berardi Fault. Highlight assay results from the 146 Zone drilling contain 0.18 oz/ton gold over 11.5 feet which includes 0.70 oz/ton silver over 3.0 feet.
Sonic drilling at Casa Berardi began in January with one drill focused on testing three areas in the East, Central, and West blocks of our property package. The focus of this drilling is to test historical gold till overburden anomalies and core into the bedrock for gold and lithogeochemical analysis in addition to mapping alteration. Results to date indicate that sonic drilling is a very useful tool to identify vectors to mineralization under cover.
At Greens Creek, three underground core drills focused on resource conversion in the Southwest Bench, West, East, and 200 South ore zones and exploration in the East and Gallagher Fault Block zones. All assay results from the last of the 2021 drilling programs in the 9A and 200 South ore zones have been received confirming and expanding mineralization in both zones. Highlights from the 9A drilling include intercepts containing 18.3 oz/ton silver, 0.05 oz/ton gold, 2.8% zinc, and 1.6% lead over 20.7 feet and 7.4 oz/ton silver, 0.02 oz/ton gold, 6.8% zinc, and 3.0% lead over 41.5 feet. Drilling in the 200 South Zone targeted expanding and upgrading resources in the southern portions of the zone and highlights include intercepts containing 40.4 oz/ton silver, 0.43 oz/ton gold, 12.4% zinc and 4.7% lead over 5.7 feet and 25.1 oz/ton silver, 0.42 oz/ton gold, 4.2% zinc, and 2.0% lead over 10.5 feet.
At Nevada operations, drilling with three drill rigs at Midas has been focused on drill testing the prospectivity of the Racer structure within the East Graben Corridor along 1.7 miles of strike length at a drill hole spacing of approximately 1,000 feet and initial drill testing of the Vapor Trail structure.
At Hollister, exploration drilling continued in January and February from the second drill station of the Hatter Graben decline completing exploration drill hole HUC-112. In February, development drifting at the Hatter Graben exploration area encountered high water inflows which eventually halted development. As a result of this inflow, exploration drilling was suspended while water management options are being evaluated. Two exploration drill holes have been completed targeting multiple zones of narrow banded quartz veins and veinlets south of the existing resource. Recent assay results from these initial two drill holes show multiple narrow vein zones with intercepts including 0.10 oz/ton gold and 17.6 oz/ton silver over 0.6 feet estimated true thickness and 0.10 oz/ton gold and 3.1 oz/ton silver over 1.5 feet estimated true thickness.
Exploration at San Sebastian continues to advance drill testing multiple targets within the district in addition to expanding our SVRC (short vertical reverse circulation) drilling in areas under cover. Near the San Sebastian Mine Area, core drilling targeted the deeper portions of the past producing veins for silver dominant polymetallic mineralization. Recent assay results from this area include 4.9 oz/ton silver, 2.0% copper, 2.5% lead, 5.3% zinc over 1.6 feet from the West Francine Vein. Drilling at La Roca, interpreted to be an area where an entire epithermal vein system is preserved, discovered several large vein zones up to 51.7 feet true thickness, with anomalous silver with samples grading up to 10.5 oz/ton silver. These early drilling results are helping to define the orientations of the targeted vein structures and drilling now is focused on testing the favorable depth of mineralization, which is believed to be deeper than the current levels tested.
More complete drill assay highlights can be found in Table A at the end of the release.
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 June 10, 2022, to stockholders of record on May 25, 2022. The realized silver price was $24.68 per ounce in the first 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 July 1, 2022, to stockholders of record on June 15, 2022.
CONFERENCE CALL AND WEBCAST
A conference call and webcast will be held Tuesday, May 10, at 10:00 a.m. Eastern Time to discuss these results. You may join the conference call by dialing toll-free 1-833-350-1380 or for international dialing 1-647-689-6934. The Conference ID is 1659347. Please dial-in and provide the Conference ID number at least 10 minutes prior to the start time to join the call and mitigate any hold times. Hecla’s live and archived webcast can be accessed at www.hecla-mining.com under Investors/Events & Webcasts.
VIRTUAL INVESTOR EVENT
Hecla will be holding a Virtual Investor Event on Tuesday, May 10, from 11:00 a.m. to 12:30 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 Operations, Exploration, 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 Anvita M. Patil, Vice President – Investor Relations and Treasurer at [email protected] or 208-769-4117.
One-on-One meeting URL: https://calendly.com/2022-may-vie
ABOUT HECLA
Founded in 1891, Hecla is the largest silver producer in the United States. In addition to operating mines in Alaska and 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.
Contacts
Anvita M. Patil
Vice President, Investor Relations and Treasurer
Jeanne DuPont
Senior Communication Coordinator
800-HECLA91 (800-432-5291)
Investor Relations
Email: [email protected]
Website: www.hecla-mining.com
