Hecla Reports Second Quarter 2022 Results
9th consecutive quarter of free cash flow generation, consolidated silver guidance affirmed
COEUR D’ALENE, Idaho–(BUSINESS WIRE)–Hecla Mining Company (NYSE:HL) today announced second quarter 2022 financial and operating results.
SECOND QUARTER HIGHLIGHTS
- Silver and gold production of 3.6 million and 45,719 ounces respectively, a 10% increase over the first quarter 2022 (“the prior quarter”)
- Sales of $191.2 million, a 3% increase over the prior quarter despite lower gold and silver prices
- Cash provided by operating activities of $40.2 million and $5.9 million in free cash flow with continued positive free cash flow generation from all three operations3
- Total cost of sales for silver of $90.9 million and cash cost and all-in sustaining cash cost (AISC) per ounce (each after by-product credits) of ($1.14) and $8.55 respectively1,2
- Net loss applicable to common shareholders of $13.7 million or $0.03 per share (basic), and adjusted net income of $20.1 million or $0.04 per share5
- Adjusted EBITDA of $70.5 million, net debt/adjusted EBITDA (last 12 months) of 1.4x 4
- $198.2 million in cash and cash equivalents with approximately $335 million in available liquidity
- Pending acquisition of Alexco Resource Corp (“Alexco”) and its high-grade silver property in Yukon; transaction expected to close in early September
- Published 2021 Sustainability report ‘Building Strong Communities Through Responsible Mining’
“All three of our mines continue to deliver strong operational and financial results with each generating positive free cash flow,” said Phillips S. Baker Jr., President & CEO. “Lucky Friday achieved record quarterly tons milled reflecting the significant strides we have made in managing seismicity and improving productivity with the Underhand Closed Bench (UCB) mining method. I strongly believe as we optimize this mining method, the Lucky Friday along with Greens Creek will further increase our position as the dominant U.S. silver producer.”
Baker continued, “While we are exposed to inflationary pressures like the rest of the industry, our silver mines have largely been able to offset inflation with by-product credits. For the second half of the year with our strong balance sheet, we plan to increase our investment in operations with the goal of further accelerating production, earnings and cash flow growth. We are looking forward to closing the Alexco acquisition, which adds a high-grade silver property in the Yukon to our best in class portfolio. This acquisition could make Hecla the largest silver producer in Canada, as well as the United States, an important and a unique characteristic of Hecla among all silver producers for decades to come.”
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 |
Q2-2022 |
Q1-2022 |
Q4-2021 |
Q3-2021 |
Q2-2021 |
YTD-2022 |
YTD-2021 |
||||||||||||||||||||
|
FINANCIAL AND OPERATIONAL HIGHLIGHTS |
|||||||||||||||||||||||||||
|
Sales |
$ |
191,242 |
|
$ |
186,499 |
|
$ |
185,078 |
|
$ |
193,560 |
|
$ |
217,983 |
|
$ |
377,741 |
|
$ |
428,835 |
|
||||||
|
Total cost of sales |
$ |
153,979 |
|
$ |
141,070 |
|
$ |
131,837 |
|
$ |
158,332 |
|
$ |
156,052 |
|
$ |
295,049 |
|
$ |
299,503 |
|
||||||
|
Gross profit |
$ |
37,263 |
|
$ |
45,429 |
|
$ |
53,241 |
|
$ |
35,228 |
|
$ |
61,931 |
|
$ |
82,692 |
|
$ |
129,332 |
|
||||||
|
(Loss) income applicable to common shareholders |
$ |
(13,661 |
) |
$ |
4,015 |
|
$ |
11,737 |
|
$ |
(1,117 |
) |
$ |
2,610 |
|
$ |
(9,646 |
) |
$ |
23,923 |
|
||||||
|
Basic (loss) income per common share (in dollars) |
$ |
(0.03 |
) |
$ |
0.01 |
|
$ |
0.02 |
|
$ |
— |
|
$ |
0.01 |
|
$ |
(0.02 |
) |
$ |
0.04 |
|
||||||
|
Adjusted EBITDA 4 |
$ |
70,474 |
|
$ |
58,202 |
|
$ |
58,249 |
|
$ |
49,414 |
|
$ |
84,507 |
|
$ |
128,676 |
|
$ |
170,312 |
|
||||||
|
Net Debt to Adjusted EBITDA4,* |
|
1.4 |
|
|
|
|
|
|
|
1.1 |
|
||||||||||||||||
|
Cash provided by operating activities |
$ |
40,183 |
|
$ |
37,909 |
|
$ |
53,355 |
|
$ |
42,742 |
|
$ |
86,304 |
|
$ |
78,092 |
|
$ |
124,240 |
|
||||||
|
Capital Expenditures |
$ |
(34,329 |
) |
$ |
(21,478 |
) |
$ |
(28,838 |
) |
$ |
(26,899 |
) |
$ |
(31,898 |
) |
$ |
(55,807 |
) |
$ |
(53,311 |
) |
||||||
|
Free Cash Flow 2 |
$ |
5,854 |
|
$ |
16,431 |
|
$ |
24,517 |
|
$ |
15,843 |
|
$ |
54,406 |
|
$ |
22,285 |
|
$ |
70,929 |
|
||||||
|
Production Highlights |
|||||||||||||||||||||||||||
|
Silver ounces produced |
|
3,645,454 |
|
|
3,324,708 |
|
|
3,226,927 |
|
|
2,676,084 |
|
|
3,524,783 |
|
|
6,970,162 |
|
|
6,984,229 |
|
||||||
|
Silver payable ounces sold |
|
3,387,909 |
|
|
2,687,261 |
|
|
2,606,622 |
|
|
2,581,690 |
|
|
3,415,464 |
|
|
6,075,170 |
|
|
6,445,490 |
|
||||||
|
Gold ounces produced |
|
45,719 |
|
|
41,642 |
|
|
47,977 |
|
|
42,207 |
|
|
59,139 |
|
|
87,361 |
|
|
111,143 |
|
||||||
|
Gold payable ounces sold |
|
44,225 |
|
|
41,053 |
|
|
44,156 |
|
|
53,000 |
|
|
47,168 |
|
|
85,278 |
|
|
104,454 |
|
||||||
|
Cash Costs and AISC, each after by-product credits |
|||||||||||||||||||||||||||
|
Silver cash costs per ounce |
$ |
(1.14 |
) |
$ |
1.09 |
|
$ |
1.69 |
|
$ |
2.49 |
|
$ |
0.18 |
|
$ |
(0.07 |
) |
$ |
0.79 |
|
||||||
|
Silver AISC per ounce |
$ |
8.55 |
|
$ |
7.64 |
|
$ |
10.08 |
|
$ |
12.82 |
|
$ |
7.54 |
|
$ |
8.12 |
|
$ |
7.38 |
|
||||||
|
Gold cash costs per ounce |
$ |
1,371 |
|
$ |
1,516 |
|
$ |
1,143 |
|
$ |
1,163 |
|
$ |
1,254 |
|
$ |
1,440 |
|
$ |
1,161 |
|
||||||
|
Gold AISC per ounce |
$ |
1,641 |
|
$ |
1,810 |
|
$ |
1,494 |
|
$ |
1,450 |
|
$ |
1,419 |
|
$ |
1,721 |
|
$ |
1,357 |
|
||||||
|
*Reflects trailing twelve months ending June 30,2022. Reconciliations are available at the end of the release. |
|||||||||||||||||||||||||||
Loss applicable to common shareholders for the second quarter was $13.7 million, or $(0.03) per share, compared to income of $4.0 million, or $0.01 per share, in the first quarter of 2022, and was impacted by the following factors:
- Gross profit decreased by $8.2 million primarily due to lower realized prices for all metals and higher mining costs at Greens Creek caused by increased use of contractors
- A negative fair value adjustment, net of $16.4 million, versus a gain of $6.0 million in the prior quarter, primarily due to unrealized losses on the Company’s investment portfolio of $15.7 million during the second quarter
These decreases were partially offset by:
- Higher sales volume at Greens Creek and Lucky Friday
- Lower income and mining tax provision of $0.3 million compared to $5.6 million in the prior quarter reflecting lower income from operations
- A net foreign exchange gain of $4.5 million versus a loss of $2.0 million in the prior quarter reflecting the appreciation of the U.S. dollar (“USD”) against the Canadian dollar (“CAD”) during the current quarter
- Lower exploration and pre-development expense of $1.6 million versus the prior quarter reflecting timing of expenditures across the Company’s exploration portfolio
Cash provided by operating activities of $40.2 million increased $2.3 million compared to the prior quarter, primarily due to positive working capital changes of $32.6 million reflecting the semi-annual interest payment on the outstanding long-term debt in the prior quarter.
Capital expenditures totaled $34.3 million, an increase of $12.9 million over the prior quarter with increased planned expenditures at Greens Creek of $14.7 million, Lucky Friday of $11.5 million, and Casa Berardi of $8.1 million. Free cash flow for the quarter was $5.9 million, a decrease of $10.6 million over the prior quarter primarily due to higher capital expenditures.
Cash costs and AISC (each after by-product credits) for silver were $(1.14) and $8.55 per ounce respectively. Cash costs declined by $2.23 per ounce over the prior quarter due to higher by-product credits at Greens Creek and higher silver production at the Lucky Friday as well as Greens Creek. AISC increased by $0.91 over the prior quarter, as a result of increased sustaining capital spend at both Greens Creek and Lucky Friday, partially offset by increased production at the Lucky Friday.
Gold cash cost per ounce and AISC declined by $145 and $169, respectively, attributable to higher gold production during the second quarter.
The Company is seeing the impact of inflationary pressures and labor constraints at all its operations. By-product credits continue to help offset the inflationary pressures for the silver segment due to strong by-product production and prices. At the Casa Berardi mine, while AISC per gold ounce after by-product credits declined over the prior quarter, the mine continues to see 15-20% overall increases in costs, notably impacting fuel, steel, reagents, and other consumables that have a greater impact on this mine because it handles the largest volume of ore and waste among the three operations. While Casa Berardi is focused on increasing underground ore feed to the mill, the mill is kept full with ore sourced from the surface, which exposes the mine to further inflationary pressures due to relatively higher volume of material moved.
Inflation is also impacting capital projects, particularly at the Lucky Friday where multiple projects are underway to support the production growth.
At the time of guidance issuance earlier this year, inflation expectations were 5%, which have been surpassed in the first half of the year. The Company expects these inflationary pressures to continue in the second half of the year at similar levels seen in the first half of the year and has revised gold cost guidance for Casa Berardi. The Company has also revised the consolidated capital expenditure guidance to reflect sustained inflationary pressures and to account for supply chain uncertainties that might delay equipment delivery schedules to 2023.
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 June 30, 2022, the Company had contracts covering approximately 65% of the forecasted payable zinc production (through 2025) at an average price of $1.32 per pound, and 49% of the forecasted payable lead production (through 2024) at an average price of $0.99 per pound.
The Company manages CAD exposure through forward contracts. At June 30, 2022, the Company had hedged approximately 43% of forecasted CAD direct production costs through 2025 at an average CAD/USD rate of 1.30. The Company has also hedged approximately 32% of capital costs for 2022 at 1.29.
OPERATIONS OVERVIEW
Greens Creek Mine – Alaska
|
Dollars are in thousands except cost per ton |
Q2-2022 |
Q1-2022 |
Q4-2021 |
Q3-2021 |
Q2-2021 |
YTD-2022 |
YTD-2021 |
||||||||||||||||||||
|
GREENS CREEK |
|||||||||||||||||||||||||||
|
Tons of ore processed |
|
209,558 |
|
|
211,687 |
|
|
221,814 |
|
|
211,142 |
|
|
214,931 |
|
|
421,245 |
|
|
409,011 |
|
||||||
|
Total production cost per ton |
$ |
197.84 |
|
$ |
192.16 |
|
$ |
174.55 |
|
$ |
181.60 |
|
$ |
171.13 |
|
$ |
194.98 |
|
$ |
176.58 |
|
||||||
|
Ore grade milled – Silver (oz./ton) |
|
14.0 |
|
|
13.8 |
|
|
12.6 |
|
|
11.1 |
|
|
14.5 |
|
|
13.9 |
|
|
15.2 |
|
||||||
|
Ore grade milled – Gold (oz./ton) |
|
0.08 |
|
|
0.07 |
|
|
0.07 |
|
|
0.07 |
|
|
0.08 |
|
|
0.08 |
|
|
0.09 |
|
||||||
|
Ore grade milled – Lead (%) |
|
3.0 |
|
|
2.8 |
|
|
2.6 |
|
|
2.7 |
|
|
3.1 |
|
|
2.9 |
|
|
3.1 |
|
||||||
|
Ore grade milled – Zinc (%) |
|
7.2 |
|
|
6.6 |
|
|
6.3 |
|
|
7.1 |
|
|
7.6 |
|
|
6.9 |
|
|
7.6 |
|
||||||
|
Silver produced (oz.) |
|
2,410,598 |
|
|
2,429,782 |
|
|
2,262,635 |
|
|
1,837,270 |
|
|
2,558,447 |
|
|
4,840,380 |
|
|
5,143,317 |
|
||||||
|
Gold produced (oz.) |
|
12,413 |
|
|
11,402 |
|
|
10,229 |
|
|
9,734 |
|
|
12,859 |
|
|
23,815 |
|
|
26,125 |
|
||||||
|
Lead produced (tons) |
|
5,184 |
|
|
4,883 |
|
|
4,731 |
|
|
4,591 |
|
|
5,627 |
|
|
10,067 |
|
|
10,551 |
|
||||||
|
Zinc produced (tons) |
|
13,396 |
|
|
12,494 |
|
|
12,457 |
|
|
13,227 |
|
|
14,610 |
|
|
25,890 |
|
|
27,964 |
|
||||||
|
Sales |
$ |
92,723 |
|
$ |
86,090 |
|
$ |
87,865 |
|
$ |
84,806 |
|
$ |
113,763 |
|
$ |
178,813 |
|
$ |
212,172 |
|
||||||
|
Total cost of sales |
$ |
(60,506 |
) |
$ |
(49,637 |
) |
$ |
(49,251 |
) |
$ |
(55,193 |
) |
$ |
(55,488 |
) |
$ |
(110,143 |
) |
$ |
(108,668 |
) |
||||||
|
Gross profit |
$ |
32,217 |
|
$ |
36,453 |
|
$ |
38,614 |
|
$ |
29,613 |
|
$ |
58,275 |
|
$ |
68,670 |
|
$ |
103,504 |
|
||||||
|
Cash flow from operations |
$ |
41,808 |
|
$ |
56,295 |
|
$ |
50,632 |
|
$ |
40,626 |
|
$ |
68,521 |
|
$ |
98,103 |
|
$ |
112,866 |
|
||||||
|
Exploration |
$ |
929 |
|
$ |
165 |
|
$ |
696 |
|
$ |
2,472 |
|
$ |
1,300 |
|
$ |
1,094 |
|
$ |
1,423 |
|
||||||
|
Capital additions |
$ |
(14,668 |
) |
$ |
(3,092 |
) |
$ |
(9,544 |
) |
$ |
(6,228 |
) |
$ |
(6,339 |
) |
$ |
(17,760 |
) |
$ |
(8,111 |
) |
||||||
|
Free cash flow 2 |
$ |
28,069 |
|
$ |
53,368 |
|
$ |
41,784 |
|
$ |
36,870 |
|
$ |
63,482 |
|
$ |
81,437 |
|
$ |
106,178 |
|
||||||
|
Cash cost per ounce, after by-product credits |
$ |
(3.29 |
) |
$ |
(0.90 |
) |
$ |
0.50 |
|
$ |
0.74 |
|
$ |
(2.64 |
) |
$ |
(2.09 |
) |
$ |
(1.65 |
) |
||||||
|
AISC per ounce, after by-product credits |
$ |
3.48 |
|
$ |
1.90 |
|
$ |
5.66 |
|
$ |
5.94 |
|
$ |
0.68 |
|
$ |
2.69 |
|
$ |
1.14 |
|
||||||
Total cost of sales for the second quarter 2022 was $60.5 million compared to $49.6 million in the prior quarter. Cash cost and AISC per silver ounce (each after by-product credits) were $(3.29) and $3.48, respectively. Cash cost per silver ounce decreased by $2.39 over the prior quarter due to higher by-product credits and additional silver production which was due to increasing mined grades which more than offset higher costs primarily driven by the use of contractors. AISC per silver ounce increased by $1.58 compared to the prior quarter due to planned increased capital spending for the capital projects and additional definition and development drilling.1,2 The decline in cash flow from operations is primarily due to lower metals prices and increased costs due to inflation
Lucky Friday Mine – Idaho
|
Dollars are in thousands except cost per ton |
Q2-2022 |
Q1-2022 |
Q4-2021 |
Q3-2021 |
Q2-2021 |
YTD-2022 |
YTD-2021 |
||||||||||||||||||||
|
LUCKY FRIDAY |
|||||||||||||||||||||||||||
|
Tons of ore processed |
|
97,497 |
|
|
77,725 |
|
|
80,097 |
|
|
78,227 |
|
|
82,442 |
|
|
175,222 |
|
|
163,513 |
|
||||||
|
Total production cost per ton |
$ |
211.45 |
|
$ |
247.17 |
|
$ |
198.83 |
|
$ |
190.66 |
|
$ |
199.48 |
|
$ |
227.30 |
|
$ |
188.30 |
|
||||||
|
Ore grade milled – Silver (oz./ton) |
|
13.2 |
|
|
12.0 |
|
|
12.5 |
|
|
11.2 |
|
|
11.6 |
|
|
12.7 |
|
|
11.4 |
|
||||||
|
Ore grade milled – Lead (%) |
|
8.8 |
|
|
8.2 |
|
|
8.1 |
|
|
7.2 |
|
|
7.6 |
|
|
8.5 |
|
|
7.5 |
|
||||||
|
Ore grade milled – Zinc (%) |
|
3.9 |
|
|
3.6 |
|
|
3.3 |
|
|
3.3 |
|
|
3.4 |
|
|
3.8 |
|
|
3.6 |
|
||||||
|
Silver produced (oz.) |
|
1,226,477 |
|
|
887,858 |
|
|
955,401 |
|
|
831,532 |
|
|
913,294 |
|
|
2,114,335 |
|
|
1,777,195 |
|
||||||
|
Lead produced (tons) |
|
8,147 |
|
|
5,980 |
|
|
6,131 |
|
|
5,313 |
|
|
5,913 |
|
|
14,127 |
|
|
11,693 |
|
||||||
|
Zinc produced (tons) |
|
3,370 |
|
|
2,452 |
|
|
2,296 |
|
|
2,319 |
|
|
2,601 |
|
|
5,822 |
|
|
5,354 |
|
||||||
|
Sales |
$ |
35,880 |
|
$ |
38,040 |
|
$ |
32,938 |
|
$ |
29,783 |
|
$ |
39,645 |
|
$ |
73,920 |
|
|
68,767 |
|
||||||
|
Total cost of sales |
$ |
(30,348 |
) |
$ |
(29,265 |
) |
$ |
(23,252 |
) |
$ |
(23,591 |
) |
$ |
(27,901 |
) |
$ |
(59,613 |
) |
$ |
(50,696 |
) |
||||||
|
Gross profit |
$ |
5,532 |
|
$ |
8,776 |
|
$ |
9,686 |
|
$ |
6,192 |
|
$ |
11,744 |
|
$ |
14,307 |
|
$ |
18,071 |
|
||||||
|
Cash flow from operations |
$ |
21,861 |
|
$ |
11,765 |
|
$ |
16,953 |
|
$ |
15,017 |
|
$ |
19,681 |
|
$ |
33,626 |
|
$ |
30,624 |
|
||||||
|
Capital additions |
$ |
(11,501 |
) |
$ |
(9,652 |
) |
$ |
(9,109 |
) |
$ |
(9,133 |
) |
$ |
(5,731 |
) |
$ |
(21,153 |
) |
|
(11,643 |
) |
||||||
|
Free cash flow 2 |
$ |
10,360 |
|
$ |
2,113 |
|
$ |
7,844 |
|
$ |
5,884 |
|
$ |
13,950 |
|
$ |
12,473 |
|
$ |
18,981 |
|
||||||
|
Cash cost per silver ounce, after by-product credits |
$ |
3.07 |
|
$ |
6.57 |
|
$ |
4.50 |
|
$ |
6.35 |
|
$ |
8.07 |
|
$ |
4.54 |
|
$ |
7.85 |
|
||||||
|
AISC per silver ounce, after by-product credits |
$ |
9.91 |
|
$ |
13.15 |
|
$ |
12.54 |
|
$ |
16.79 |
|
$ |
14.10 |
|
$ |
11.27 |
|
$ |
14.17 |
|
||||||
Lucky Friday produced 1.2 million ounces of silver during the second quarter, a 38% increase over the prior quarter due to higher production resulting from higher throughput due to the UCB mining method and a 9% increase in grade. The throughput rate and the mined tons in the quarter are the highest in the mine’s 80-year history. The UCB method mined 91% of tons in the second quarter compared to 82% of tons in the second quarter of 2021.
Total cost of sales for the second quarter 2022 was $30.3 million, an increase of $1.1 million over the prior quarter due to increased use of consumables to support higher mining volumes and higher contractor costs resulting from manpower shortages. Cash cost and AISC per silver ounce (each after by-product credits) were $3.07 and $9.91, respectively, and decreased over the prior quarter due to higher production, the reasons outlined above, and higher by-product credits1,2
Casa Berardi Mine – Quebec
|
Dollars are in thousands except cost per ton |
Q2-2022 |
Q1-2022 |
Q4-2021 |
Q3-2021 |
Q2-2021 |
YTD-2022 |
YTD-2021 |
||||||||||||||||||||
|
CASA BERARDI |
|||||||||||||||||||||||||||
|
Tons of ore processed – underground |
|
176,576 |
|
|
161,609 |
|
|
161,355 |
|
|
167,435 |
|
|
178,908 |
|
|
338,185 |
|
|
365,827 |
|
||||||
|
Tons of ore processed – surface pit |
|
225,042 |
|
|
224,541 |
|
|
225,662 |
|
|
230,708 |
|
|
195,775 |
|
|
449,586 |
|
|
377,259 |
|
||||||
|
Tons of ore processed – total |
|
401,618 |
|
|
386,150 |
|
|
387,017 |
|
|
398,143 |
|
|
374,683 |
|
|
787,771 |
|
|
743,086 |
|
||||||
|
Surface tons mined – ore and waste |
|
2,149,412 |
|
|
1,892,339 |
|
|
1,507,457 |
|
|
1,483,231 |
|
|
2,033,403 |
|
|
4,041,751 |
|
|
4,024,490 |
|
||||||
|
Total production cost per ton |
$ |
113.07 |
|
$ |
117.96 |
|
$ |
108.82 |
|
$ |
86.95 |
|
$ |
99.36 |
|
|
115.46 |
|
$ |
99.52 |
|
||||||
|
Ore grade milled – Gold (oz./ton) – underground |
|
0.19 |
|
|
0.14 |
|
|
0.17 |
|
|
0.16 |
|
|
0.15 |
|
|
0.17 |
|
|
0.16 |
|
||||||
|
Ore grade milled – Gold (oz./ton) – surface pit |
|
0.05 |
|
|
0.05 |
|
|
0.07 |
|
|
0.04 |
|
|
0.06 |
|
|
0.05 |
|
|
0.06 |
|
||||||
|
Ore grade milled – Gold (oz./ton) – combined |
|
0.10 |
|
|
0.09 |
|
|
0.11 |
|
|
0.09 |
|
|
0.10 |
|
|
0.09 |
|
|
0.11 |
|
||||||
|
Gold produced (oz.) – underground |
|
22,866 |
|
|
19,374 |
|
|
22,910 |
|
|
24,170 |
|
|
23,441 |
|
|
42,240 |
|
|
51,010 |
|
||||||
|
Gold produced (oz.) – surface pit |
|
10,440 |
|
|
10,866 |
|
|
14,356 |
|
|
5,552 |
|
|
7,892 |
|
|
21,306 |
|
|
16,513 |
|
||||||
|
Gold produced (oz.) – total |
|
33,306 |
|
|
30,240 |
|
|
37,266 |
|
|
29,722 |
|
|
31,333 |
|
|
63,546 |
|
|
67,523 |
|
||||||
|
Silver produced (oz.) – total |
|
8,379 |
|
|
7,068 |
|
|
7,967 |
|
|
7,012 |
|
|
7,917 |
|
|
15,447 |
|
|
18,592 |
|
||||||
|
Sales |
$ |
62,639 |
|
$ |
62,101 |
|
$ |
60,054 |
|
$ |
56,065 |
|
$ |
56,122 |
|
$ |
124,740 |
|
$ |
129,033 |
|
||||||
|
Total cost of sales |
$ |
(61,870 |
) |
$ |
(62,168 |
) |
$ |
(57,069 |
) |
$ |
(58,164 |
) |
$ |
(54,669 |
) |
$ |
(124,038 |
) |
$ |
(114,596 |
) |
||||||
|
Gross profit/(loss) |
$ |
769 |
|
$ |
(67 |
) |
$ |
2,985 |
|
$ |
(2,099 |
) |
$ |
1,453 |
|
|
702 |
|
$ |
14,437 |
|
||||||
|
Cash flow from operations |
$ |
7,417 |
|
$ |
8,089 |
|
$ |
10,029 |
|
$ |
17,058 |
|
$ |
15,756 |
|
$ |
15,506 |
|
$ |
30,948 |
|
||||||
|
Exploration |
$ |
1,341 |
|
$ |
2,635 |
|
$ |
2,124 |
|
$ |
4,382 |
|
$ |
1,739 |
|
$ |
3,976 |
|
$ |
3,020 |
|
||||||
|
Capital additions |
$ |
(8,093 |
) |
$ |
(7,808 |
) |
$ |
(9,537 |
) |
$ |
(11,488 |
) |
$ |
(12,153 |
) |
$ |
(15,901 |
) |
$ |
(26,000 |
) |
||||||
|
Free cash flow 2 |
$ |
665 |
|
$ |
2,916 |
|
$ |
2,616 |
|
$ |
9,952 |
|
$ |
5,342 |
|
$ |
3,581 |
|
$ |
7,968 |
|
||||||
|
Cash Cost per gold ounce, after by-product credits |
$ |
1,371 |
|
$ |
1,516 |
|
$ |
1,137 |
|
$ |
1,175 |
|
$ |
1,199 |
|
$ |
1,440 |
|
$ |
1,106 |
|
||||||
|
AISC per gold ounce, after by-product credits |
$ |
1,641 |
|
$ |
1,810 |
|
$ |
1,470 |
|
$ |
1,476 |
|
$ |
1,434 |
|
$ |
1,721 |
|
$ |
1,347 |
|
||||||
Casa Berardi produced 33,306 ounces of gold compared to 30,240 ounces in the prior quarter, an increase of 10% due to higher grades milled as more material was sourced from the underground mine. The mill continued to perform well, operating at an average of 4,413 tons per day (“tpd”) in the second quarter of 2022 compared to 4,291 tpd over prior quarter.
Total cost of sales for the second quarter 2022 was $61.9 million compared to $62.2 million in the prior quarter. Cash cost and AISC per gold ounce decreased by $145 per ounce and $169 per ounce over the prior quarter to $1,371 and $1,641, respectively, with the decrease primarily driven by higher production. 1,2
EXPLORATION AND PRE-DEVELOPMENT UPDATE
Exploration and Pre-development expenditures were $11.2 million for the quarter with the focus on both surface and underground drilling at Greens Creek, underground drilling at Casa Berardi and the re-initiation of exploration at the large land packages at Republic, Washington; Creede, Colorado and Aurora, Nevada. Programs continued at San Sebastian and Midas with permitting for water removal at Hollister advancing.
Greens Creek
At Greens Creek, three underground core drills focused on resource conversion in the Southwest Bench, 200 South, East, and West ore zones and exploration in the East and Gallagher Fault Block zones while two helicopter supported core drills started drilling extensions to the Upper Plate Zone from surface late in the Quarter. Assay results received during the 2nd quarter for drilling in the Southwest Bench, 200 South, East, West, and 9A areas are confirming and expanding all mineral zones.
Southwest Bench drilling during the quarter targeted inferred resource areas along a strike length of 400 feet with the goal of upgrading and expanding resources. Highlights from this drilling includes 42.7 oz/ton silver, 0.09 oz/ton gold, 18.8% zinc and 8.9% lead over 7.4 feet.
200 South drilling targeted the southern portion of the zone along a strike length of 600 feet and along with assay results received during the quarter, the 200 South drilling confirms the expansion of the deep bench up and down dip 50 feet, and down plunge 100 feet, from previous ore grade intercepts. Intercepts characteristic of this portion of the 200 South zone include 83.2 oz/ton Ag, 0.12 oz/ton Au, 3.1 % Zn, and 1.7% Pb over 7.2 feet. Assays received also confirm the expansion of the middle bench 100 feet down plunge from previous ore grade intercepts and includes 15.8 oz/ton Ag, 0.03 oz/ton Au, 1.5% Zn, and 0.6% Pb over 21.3 feet.
Drilling in the central portion of the East Zone focused on infilling areas between existing ore intercepts along the mine contact over a strike length of 850 feet. While limited assay results have been received so far, intercepts are typically narrow and can contain high-grade mineralization such as hole GC5716 with 429.0 oz/ton silver, 1.38 oz/ton gold, 6.4% zinc, and 1.7% lead over 1.0 foot.
Drilling at the West Zone targeted 400 feet of mine contact strike to upgrade and expand known mineralization. Assay highlights from this drilling include intercepts containing 50.4 oz/ton silver, 0.30 oz/ton gold, 14.4% zinc, and 7.6% lead over 57.1 feet. Assays results were received from 9A Zone drilling completed during the first quarter. Highlights from this drilling include 55.3 oz/ton silver, 1.3 oz/ton gold, 16.9% zinc, and 9.1% lead over 14.3 feet.
More complete drill assay highlights can be found in Table A at the end of the release.
Casa Berardi
At Casa Berardi, up to seven underground core drills and one surface core drill were focused on definition and exploration drilling in multiple zones and targets in the West Mine, Principal Mine, and East Mine areas. In addition to drilling in the mining lease, one surface Sonic drill completed the initial drill testing of three small, select historical gold till anomalies in the West, Central, and East Blocks of our large Casa Berardi property package which covers 23 miles of strike length along the Casa Berardi Break.
Drilling in the West Mine targeted the 118 zone where drilling has been focused on defining continuity and expanding mineralization in the 118-06,14, and 15 lenses up and down plunge and to the east. Highlights from this drilling includes an intercept grading 0.45 oz/ton gold over 14.1 feet which is located down plunge from the 118-06 lens showing that mineralization extends at least 360 feet below the current model and follow up exploration drilling is being planned to further test this zone at depth.
Drilling in the Principal Mine targeted the 119, Lower 123, and extensions of the 124 and 134 zones. In the 119 Zone, drilling is focused on defining the controls of mineralization in the 119-02 lens with recent intercepts including 0.14 oz/ton gold over 6.2 feet. Drilling at depth and to the west of the Lower 123 Zone intersected 0.17 oz/ton gold over 21.0 feet expanding mineralization 100 feet to the east of the modeled 123-02 lens. 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 0.10 oz/ton gold over 48.9 feet and 0.07 oz/ton gold over 71.1 feet.
Exploration drilling in the East Mine targeted expanding mineralization in the 148 zone. Assay results have been received for one drillhole which extends high-grade mineralization an additional 85 feet to the east of the 148-01 lens. This drillhole grades 0.27 oz/ton gold over 24.6 feet and includes a narrower and higher-grade section grading 2.81 oz/ton gold over 1.6 feet. This drillhole intercept opens the area at depth and to the east for expansion.
More complete drill assay highlights can be found in Table A at the end of the release.
San Sebastian
Exploration at San Sebastian advanced drill testing multiple targets within the district in addition to completing our Short Vertical Reverse Circulation (SVRC) drilling in areas under cover between the San Sebastian Mine and La Roca target areas.
Republic
Surface exploration is underway at our Republic District, which has had very limited exploration since we ceased underground mining operations in 1994. So far this year, we have completed a geophysical survey, detailed surface mapping and sampling, and one core drill is on site testing the Lone Pine-Blacktail and Tom Thumb target areas.
Contacts
Anvita M. Patil
Vice President, Investor Relations and Treasurer
Cheryl Turner
Communications Coordinator
800-HECLA91 (800-432-5291)
Investor Relations
Email: [email protected]
Website: www.hecla-mining.com
