Hecla Reports First Quarter 2023 Results
Second highest silver revenues in company history
COEUR D’ALENE, Idaho–(BUSINESS WIRE)–Hecla Mining Company (NYSE:HL) today announced first quarter 2023 financial and operating results.
FIRST QUARTER HIGHLIGHTS
Operational
- Produced 4.0 million ounces of silver, a 10% increase over the fourth quarter of 2022 and more than any quarter since 2016.
- Record quarterly gold production of 14,885 ounces at Greens Creek; lead production was the 2nd highest in Company’s history.
- Greens Creek achieved record quarterly throughput of 2,591 tons per day (“tpd”).
- Keno Hill development 75% complete and remains on track for third quarter mill startup.
- Achieved All-injury frequency rate (“AIFR”) of 1.13, lowest since 2012 led by Lucky Friday’s AIFR of 0.62, a safety record for the mine while at full production.
Financial
- Sales of $199.5 million with silver revenues 38% and gold revenues 35%; silver revenues were 2nd highest in Company history.
- Consolidated silver total cost of sales of $100.8 million and cash cost and AISC per silver ounce (each after by-product credits) of $2.14 and $8.96, respectively.3,4
- Cash flow from operations of $40.6 million, silver operations generated $89.5 million in cash flow from operations, and $68.6 million in free cash flow.2
- Net loss applicable to common stockholders of $3.3 million or $0.01 per share, and adjusted net income of $6.6 million or $0.01 per share.5
- Adjusted EBITDA of $61.9 million, net debt to adjusted EBITDA ratio of 1.9.1
- Strong balance sheet with $95.9 million in cash and cash equivalents, credit facility undrawn, and $240 million in available liquidity.
Environmental, Social, Governance
- Casa Berardi received Quebec’s John T. Ryan safety award for lowest reportable injury frequency rate for the second time in three years.
- Net zero in 2022 as scope 1&2 CO2 emissions offset with certified emission reduction credits.
Strategic
- ATAC Resources acquisition announced for CAD $31 million; transaction expected to close in the third quarter.
“As we continue our growth in silver production, silver revenues are now exceeding gold revenues for the second consecutive quarter,” said Phillips S. Baker Jr., President and CEO. “Greens Creek had excellent operational performance achieving record throughput and very strong silver and record gold production, and Lucky Friday exceeded 1.2 million ounces of silver production for third time out of the last four quarters.”
Baker continued, “Greens Creek and Lucky Friday generated $69 million in free cash flow with both mines exceeding $31 million. Our first priority in capital allocation of this free cash flow is investing it in our mines – particularly Keno Hill, which remains on track to produce more than 2.5 million ounces of silver this year, Casa Berardi, where we are beginning the transition to a primarily open pit operation, and Lucky Friday, where we are completing the ore bunker and service hoist.”
Baker concluded, “Hecla produced 45% of United States silver in 2022, making us the nation’s largest silver producer. With almost 17 million ounces of silver production expected in 2023 and potentially increasing to 20 million ounces by 2025, Hecla is expected to become Canada’s largest silver producer as well. Our production growth provides shareholders more exposure to silver from long-lived, low-cost mines that will help provide silver needed for solar power, the fastest growing renewable energy source.”
FINANCIAL OVERVIEW
In the following table and throughout this release, “total cost of sales” is comprised of cost of sales and other direct production costs and depreciation, depletion and amortization.
|
In Thousands unless stated otherwise |
|
1Q-2023 |
|
|
4Q-2022 |
|
|
3Q-2022 |
|
|
2Q-2022 |
|
|
1Q-2022 |
|
|
FY 2022 |
|
||||||
|
FINANCIAL AND PRODUCTION SUMMARY |
|
|||||||||||||||||||||||
|
Sales |
|
$ |
199,500 |
|
|
$ |
194,825 |
|
|
$ |
146,339 |
|
|
$ |
191,242 |
|
|
$ |
186,499 |
|
|
$ |
718,905 |
|
|
Total cost of sales |
|
$ |
164,552 |
|
|
$ |
169,807 |
|
|
$ |
137,892 |
|
|
$ |
153,979 |
|
|
$ |
141,070 |
|
|
$ |
602,749 |
|
|
Gross profit |
|
$ |
34,948 |
|
|
$ |
25,018 |
|
|
$ |
8,447 |
|
|
$ |
37,263 |
|
|
$ |
45,429 |
|
|
$ |
116,156 |
|
|
Net income (loss) applicable to common stockholders |
|
$ |
(3,311 |
) |
|
$ |
(4,590 |
) |
|
$ |
(23,664 |
) |
|
$ |
(13,661 |
) |
|
$ |
4,015 |
|
|
$ |
(37,900 |
) |
|
Basic income (loss) per common share (in dollars) |
|
$ |
(0.01 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.03 |
) |
|
$ |
0.01 |
|
|
$ |
(0.07 |
) |
|
Adjusted EBITDA1 |
|
$ |
61,901 |
|
|
$ |
62,261 |
|
|
$ |
26,554 |
|
|
$ |
70,474 |
|
|
$ |
58,202 |
|
|
$ |
217,492 |
|
|
Net Debt to Adjusted EBITDA1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.9 |
|
|||||
|
Cash provided by operating activities |
|
$ |
40,603 |
|
|
$ |
36,120 |
|
|
$ |
(24,322 |
) |
|
$ |
40,183 |
|
|
$ |
37,909 |
|
|
$ |
89,890 |
|
|
Capital Expenditures |
|
$ |
(54,443 |
) |
|
$ |
(56,140 |
) |
|
$ |
(37,430 |
) |
|
$ |
(34,329 |
) |
|
$ |
(21,478 |
) |
|
$ |
(149,378 |
) |
|
Free Cash Flow2 |
|
$ |
(13,840 |
) |
|
$ |
(20,020 |
) |
|
$ |
(61,752 |
) |
|
$ |
5,854 |
|
|
$ |
16,431 |
|
|
$ |
(59,488 |
) |
|
Silver ounces produced |
|
|
4,041,878 |
|
|
|
3,663,433 |
|
|
|
3,549,392 |
|
|
|
3,645,454 |
|
|
|
3,324,708 |
|
|
|
14,182,987 |
|
|
Silver payable ounces sold |
|
|
3,604,494 |
|
|
|
3,756,701 |
|
|
|
2,479,724 |
|
|
|
3,387,909 |
|
|
|
2,687,261 |
|
|
|
12,311,595 |
|
|
Gold ounces produced |
|
|
39,717 |
|
|
|
43,634 |
|
|
|
44,747 |
|
|
|
45,719 |
|
|
|
41,707 |
|
|
|
175,807 |
|
|
Gold payable ounces sold |
|
|
39,473 |
|
|
|
40,097 |
|
|
|
40,443 |
|
|
|
44,225 |
|
|
|
41,053 |
|
|
|
165,818 |
|
|
Cash Costs and AISC, each after by-product credits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Silver cash costs per ounce 3 |
|
$ |
2.14 |
|
|
$ |
4.79 |
|
|
$ |
3.43 |
|
|
$ |
(1.14 |
) |
|
$ |
1.09 |
|
|
$ |
2.06 |
|
|
Silver AISC per ounce 4 |
|
$ |
8.96 |
|
|
$ |
13.98 |
|
|
$ |
12.93 |
|
|
$ |
8.08 |
|
|
$ |
7.37 |
|
|
$ |
10.66 |
|
|
Gold cash costs per ounce 3 |
|
$ |
1,775 |
|
|
$ |
1,696 |
|
|
$ |
1,349 |
|
|
$ |
1,371 |
|
|
$ |
1,516 |
|
|
$ |
1,478 |
|
|
Gold AISC per ounce 4 |
|
$ |
2,392 |
|
|
$ |
2,075 |
|
|
$ |
1,669 |
|
|
$ |
1,605 |
|
|
$ |
1,764 |
|
|
$ |
1,773 |
|
|
Realized Prices |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Silver, $/ounce |
|
$ |
22.62 |
|
|
$ |
22.03 |
|
|
$ |
18.30 |
|
|
$ |
20.68 |
|
|
$ |
24.68 |
|
|
$ |
21.53 |
|
|
Gold, $/ounce |
|
$ |
1,902 |
|
|
$ |
1,757 |
|
|
$ |
1,713 |
|
|
$ |
1,855 |
|
|
$ |
1,880 |
|
|
$ |
1,803 |
|
|
Lead, $/pound |
|
$ |
1.02 |
|
|
$ |
1.05 |
|
|
$ |
0.95 |
|
|
$ |
0.97 |
|
|
$ |
1.08 |
|
|
$ |
1.01 |
|
|
Zinc, $/pound |
|
$ |
1.39 |
|
|
$ |
1.24 |
|
|
$ |
1.23 |
|
|
$ |
1.44 |
|
|
$ |
1.79 |
|
|
$ |
1.41 |
|
Net loss applicable to common stockholders decreased to $3.3 million in the first quarter of 2023 from $4.6 million in the fourth quarter of 2022 due to:
- Increased gross profit of $9.9 million due to higher revenues arising from higher realized metals prices (except lead) and lower cost of sales.
- Decreased general and administrative expenses of $2.3 million as a result of a higher incentive compensation accrued in the fourth quarter of 2022.
- Decreased provision for closed operations and environmental matters of $3.6 million reflecting the Troy Mine accrual recorded in the fourth quarter of 2022.
- Decreased exploration and pre-development expenses of $1.9 million reflecting lower expenditures across our portfolio.
The above items were partly offset by:
- Decreased fair value adjustments, net of $6.8 million resulting from changes in our marketable securities portfolio.
- Increased ramp-up and suspension costs of $3.8 million as a result of continued ramp-up at Keno Hill.
- Increased income and mining tax expense of $7.2 million, reflecting increased taxable income from our U.S. assets
Consolidated silver total cost of sales in the first quarter decreased by 2% to $100.8 million from the prior quarter due to lower fuel prices partially offset by higher labor costs. Cash costs and AISC per silver ounce, each after by-product credits, were $2.14 and $8.96, respectively.3,4 The decrease in cash costs per ounce was due to higher silver production, lower total cost of sales, higher by-product credits due to higher gold and lead production, and higher gold prices, with AISC further impacted by lower sustaining capital due to timing of expenditures 3,4
Consolidated total gold cost of sales decreased by 2% to $63.7 million primarily due to lower labor and consumables costs attributable to lower underground tonnage at Casa Berardi. Cash costs and AISC per gold ounce, each after by-product credits, were $1,775 and $2,392, respectively.3,4 The increase in cash costs per ounce was primarily due to lower gold production resulting from lower grades, with AISC further impacted by higher sustaining capital.
Adjusted EBITDA for the quarter was $61.9 million, in line with the prior quarter as higher gross profit and lower depreciation, depletion and amortization and general and administrative expenses in the quarter were offset by the monetization of zinc hedges in the prior quarter. The ratio of net debt (calculated as long-term debt and finance leases less cash) to adjusted EBITDA was unchanged at 1.9, with long-term debt and finance leases of $526.0 million and cash and equivalents of $95.9 million at the end of the quarter.1 The Company also issued stock under its ATM program in the first quarter for net proceeds of $11.9 million.
Cash provided by operating activities was $40.6 million, an increase of 12% over the prior quarter due to higher gross profit and favorable working capital changes partially offset by the monetization of zinc hedges in the prior quarter.
Capital expenditures, net of leases, totaled $54.4 million compared to $56.1 million in prior quarter. The decrease was due to timing related lower capital spend at Greens Creek, which was offset by higher capital spend at Casa Berardi primarily attributable to the tailings expansion, higher development, and equipment capital spend at Keno Hill as the mine prepares for mill startup in the third quarter of 2023, and higher capital spend at Lucky Friday with the service hoist and coarse ore bunker projects expected to be completed by the fourth quarter.
Free cash flow for the quarter was negative $13.8 million, compared to negative $20.0 million in the prior quarter due to higher gross profit, lower production costs, favorable working capital changes, and lower capital spending.2
Forward Sales Contracts for Base Metals and Foreign Currency
The Company uses financially settled forward sales contracts to manage exposures to zinc and lead price changes. On March 31, 2023, the Company had contracts covering approximately 29% of the forecasted payable zinc production for 2023 at an average price of $1.47 per pound, and 38% of the forecasted payable lead production (through 2025) at an average price of $0.99 per pound.
The Company also manages CAD exposure through forward contracts. On March 31, 2023, the Company had hedged approximately 47% of forecasted Casa Berardi CAD direct production costs through 2026 at an average CAD/USD rate of 1.32. The Company has also hedged approximately 21% of Casa Berardi capital costs through 2026 at 1.35. At Keno Hill, 70% of the total planned spend for 2023 and 2024 is hedged at an average CAD/USD rate of 1.36.
OPERATIONS OVERVIEW
Greens Creek Mine – Alaska
|
Dollars are in thousands except cost per ton |
|
1Q-2023 |
|
|
4Q-2022 |
|
|
3Q-2022 |
|
|
2Q-2022 |
|
|
1Q-2022 |
|
|
FY 2022 |
|
||||||
|
GREENS CREEK |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Tons of ore processed |
|
|
233,167 |
|
|
|
230,225 |
|
|
|
229,975 |
|
|
|
209,558 |
|
|
|
211,687 |
|
|
|
881,445 |
|
|
Total production cost per ton |
|
$ |
198.60 |
|
|
$ |
211.29 |
|
|
$ |
185.34 |
|
|
$ |
197.84 |
|
|
$ |
192.16 |
|
|
$ |
196.73 |
|
|
Ore grade milled – Silver (oz./ton) |
|
|
14.4 |
|
|
|
13.1 |
|
|
|
13.6 |
|
|
|
14.0 |
|
|
|
13.8 |
|
|
|
13.6 |
|
|
Ore grade milled – Gold (oz./ton) |
|
|
0.08 |
|
|
|
0.08 |
|
|
|
0.07 |
|
|
|
0.08 |
|
|
|
0.07 |
|
|
|
0.08 |
|
|
Ore grade milled – Lead (%) |
|
|
2.6 |
|
|
|
2.6 |
|
|
|
2.4 |
|
|
|
3.0 |
|
|
|
2.8 |
|
|
|
2.7 |
|
|
Ore grade milled – Zinc (%) |
|
|
6.0 |
|
|
|
6.7 |
|
|
|
6.3 |
|
|
|
7.2 |
|
|
|
6.6 |
|
|
|
6.7 |
|
|
Silver produced (oz.) |
|
|
2,772,860 |
|
|
|
2,433,275 |
|
|
|
2,468,280 |
|
|
|
2,410,598 |
|
|
|
2,429,782 |
|
|
|
9,741,935 |
|
|
Gold produced (oz.) |
|
|
14,885 |
|
|
|
12,989 |
|
|
|
11,412 |
|
|
|
12,413 |
|
|
|
11,402 |
|
|
|
48,216 |
|
|
Lead produced (tons) |
|
|
5,202 |
|
|
|
4,985 |
|
|
|
4,428 |
|
|
|
5,184 |
|
|
|
4,883 |
|
|
|
19,480 |
|
|
Zinc produced (tons) |
|
|
12,482 |
|
|
|
13,842 |
|
|
|
12,580 |
|
|
|
13,396 |
|
|
|
12,494 |
|
|
|
52,312 |
|
|
Sales |
|
$ |
98,611 |
|
|
$ |
95,374 |
|
|
$ |
60,875 |
|
|
$ |
92,723 |
|
|
$ |
86,090 |
|
|
$ |
335,062 |
|
|
Total cost of sales |
|
$ |
(66,288 |
) |
|
$ |
(70,075 |
) |
|
$ |
(52,502 |
) |
|
$ |
(60,506 |
) |
|
$ |
(49,636 |
) |
|
$ |
(232,718 |
) |
|
Gross profit |
|
$ |
32,323 |
|
|
$ |
25,299 |
|
|
$ |
8,373 |
|
|
$ |
32,217 |
|
|
$ |
36,453 |
|
|
$ |
102,344 |
|
|
Cash flow from operations |
|
$ |
43,346 |
|
|
$ |
44,769 |
|
|
$ |
7,749 |
|
|
$ |
41,808 |
|
|
$ |
56,295 |
|
|
$ |
150,621 |
|
|
Exploration |
|
$ |
448 |
|
|
$ |
1,050 |
|
|
$ |
3,776 |
|
|
$ |
929 |
|
|
$ |
165 |
|
|
$ |
5,920 |
|
|
Capital additions |
|
$ |
(6,658 |
) |
|
$ |
(12,150 |
) |
|
$ |
(6,988 |
) |
|
$ |
(14,668 |
) |
|
$ |
(3,092 |
) |
|
$ |
(36,898 |
) |
|
Free cash flow 2 |
|
$ |
37,136 |
|
|
$ |
33,669 |
|
|
$ |
4,537 |
|
|
$ |
28,069 |
|
|
$ |
53,368 |
|
|
$ |
119,643 |
|
|
Cash cost per ounce, after by-product credits 3 |
|
$ |
1.16 |
|
|
$ |
4.26 |
|
|
$ |
2.65 |
|
|
$ |
(3.29 |
) |
|
$ |
(0.90 |
) |
|
$ |
0.70 |
|
|
AISC per ounce, after by-product credits 4 |
|
$ |
3.82 |
|
|
$ |
8.61 |
|
|
$ |
7.07 |
|
|
$ |
3.10 |
|
|
$ |
1.83 |
|
|
$ |
5.17 |
|
Greens Creek produced 2.8 million ounces of silver in the first quarter, an increase of 14% over the prior quarter due to higher throughput and grades. Gold production for the quarter was 14,885 ounces, a record in the mine’s history and a 15% increase over the prior quarter. The mine achieved yet another quarterly throughput record of 2,591 tpd.
First quarter sales were $98.6 million and increased 3% over the prior quarter due to higher metal production except for zinc, which declined due to mine sequencing, and higher realized prices for silver, gold, and zinc. Total cost of sales for the quarter were $66.3 million, a decline of 5% over the prior quarter due to both lower fuel prices and fuel consumption as hydro power availability increased during the quarter, partially offset by higher labor costs. Cash costs and AISC per silver ounce, each after by-product credits, were $1.16 and $3.82 and decreased over the prior quarter due to higher silver production, lower production costs, and higher gold by-product credits (attributable to higher gold realized price and production). AISC was also favorably impacted by lower capital spend in the quarter due to timing.3,4
Cash flow from operations was $43.3 million and decreased slightly over the prior quarter due to unfavorable working capital changes primarily related to an increase in accounts receivables. Free cash flow for the quarter was $37.1 million, an increase of 10% over the prior quarter due to the timing of capital spend.2
Lucky Friday Mine – Idaho
|
Dollars are in thousands except cost per ton |
|
1Q-2023 |
|
|
4Q-2022 |
|
|
3Q-2022 |
|
|
2Q-2022 |
|
|
1Q-2022 |
|
|
FY 2022 |
|
||||||
|
LUCKY FRIDAY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Tons of ore processed |
|
|
95,303 |
|
|
|
90,935 |
|
|
|
90,749 |
|
|
|
97,497 |
|
|
|
77,725 |
|
|
|
356,907 |
|
|
Total production cost per ton |
|
$ |
210.72 |
|
|
$ |
232.73 |
|
|
$ |
207.10 |
|
|
$ |
211.45 |
|
|
$ |
247.17 |
|
|
$ |
223.55 |
|
|
Ore grade milled – Silver (oz./ton) |
|
|
13.8 |
|
|
|
14.0 |
|
|
|
12.5 |
|
|
|
13.2 |
|
|
|
12.0 |
|
|
|
13.0 |
|
|
Ore grade milled – Lead (%) |
|
|
8.8 |
|
|
|
9.1 |
|
|
|
8.5 |
|
|
|
8.8 |
|
|
|
8.2 |
|
|
|
8.7 |
|
|
Ore grade milled – Zinc (%) |
|
|
4.1 |
|
|
|
4.1 |
|
|
|
4.2 |
|
|
|
3.9 |
|
|
|
3.6 |
|
|
|
3.9 |
|
|
Silver produced (oz.) |
|
|
1,262,464 |
|
|
|
1,224,199 |
|
|
|
1,074,230 |
|
|
|
1,226,477 |
|
|
|
887,858 |
|
|
|
4,412,764 |
|
|
Lead produced (tons) |
|
|
8,034 |
|
|
|
7,934 |
|
|
|
7,172 |
|
|
|
8,147 |
|
|
|
5,980 |
|
|
|
29,233 |
|
|
Zinc produced (tons) |
|
|
3,313 |
|
|
|
3,335 |
|
|
|
3,279 |
|
|
|
3,370 |
|
|
|
2,452 |
|
|
|
12,436 |
|
|
Sales |
|
$ |
49,110 |
|
|
$ |
45,434 |
|
|
$ |
28,460 |
|
|
$ |
35,880 |
|
|
$ |
38,040 |
|
|
$ |
147,814 |
|
|
Total cost of sales |
|
$ |
(34,534 |
) |
|
$ |
(32,819 |
) |
|
$ |
(24,166 |
) |
|
$ |
(30,348 |
) |
|
$ |
(29,265 |
) |
|
$ |
(116,598 |
) |
|
Gross profit |
|
$ |
14,576 |
|
|
$ |
12,615 |
|
|
$ |
4,294 |
|
|
$ |
5,532 |
|
|
$ |
8,775 |
|
|
$ |
31,216 |
|
|
Cash flow from operations |
|
$ |
46,132 |
|
|
$ |
(7,437 |
) |
|
$ |
11,624 |
|
|
$ |
21,861 |
|
|
$ |
11,765 |
|
|
$ |
37,813 |
|
|
Capital additions |
|
$ |
(14,707 |
) |
|
$ |
(13,714 |
) |
|
$ |
(16,125 |
) |
|
$ |
(11,501 |
) |
|
$ |
(9,652 |
) |
|
$ |
(50,992 |
) |
|
Free cash flow 2 |
|
$ |
31,425 |
|
|
$ |
(21,151 |
) |
|
$ |
(4,501 |
) |
|
$ |
10,360 |
|
|
$ |
2,113 |
|
|
$ |
(13,179 |
) |
|
Cash cost per ounce, after by-product credits 3 |
|
$ |
4.30 |
|
|
$ |
5.82 |
|
|
$ |
5.23 |
|
|
$ |
3.07 |
|
|
$ |
6.57 |
|
|
$ |
5.06 |
|
|
AISC per ounce, after by-product credits 4 |
|
$ |
10.69 |
|
|
$ |
12.88 |
|
|
$ |
15.98 |
|
|
$ |
9.91 |
|
|
$ |
13.15 |
|
|
$ |
12.86 |
|
Lucky Friday produced 1.3 million ounces of silver, an increase of 3% over the prior quarter attributable to higher throughput.
Sales in the first quarter were $49.1 million, an increase of 8% over the prior quarter due to higher silver and lead production and higher realized prices. Total cost of sales were $34.5 million, an increase of 5% over the prior quarter due to increased sales volumes and higher labor costs, including higher profit sharing with the miners due to increased profitability. Cash costs and AISC per silver ounce, each after by-product credits, were $4.30 and $10.69 respectively and decreased over the prior quarter due to higher production and higher by-product credits. Lower sustaining capital spend for the quarter impacted AISC favorably.3,4
Cash flow from operations was $46.1 million, higher than that of full year 2022, and an increase of $53.6 million over the prior quarter due to favorable working capital changes, which also included the receipt of $6.7 million related to a deferred silver concentrate shipment in the fourth quarter. Capital expenditures, net of leases, were $14.7 million, as the Company continues to invest in key projects including the service hoist and coarse ore bunker, increased development, and pre-production drilling to achieve the annual throughput goal of 425,000 tons in the fourth quarter of 2023. Free cash flow was $31.4 million, an increase of $52.6 million over the prior quarter primarily due to the increase in cash flow from operations.2
Casa Berardi – Quebec
|
Dollars are in thousands except cost per ton |
|
1Q-2023 |
|
|
4Q-2022 |
|
|
3Q-2022 |
|
|
2Q-2022 |
|
|
1Q-2022 |
|
|
FY 2022 |
|
||||||
|
CASA BERARDI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Tons of ore processed – underground |
|
|
110,245 |
|
|
|
160,150 |
|
|
|
162,215 |
|
|
|
176,576 |
|
|
|
161,609 |
|
|
|
660,550 |
|
|
Tons of ore processed – surface pit |
|
|
318,913 |
|
|
|
250,883 |
|
|
|
227,726 |
|
|
|
225,042 |
|
|
|
224,541 |
|
|
|
928,189 |
|
|
Tons of ore processed – total |
|
|
429,158 |
|
|
|
411,033 |
|
|
|
389,941 |
|
|
|
401,618 |
|
|
|
386,150 |
|
|
|
1,588,739 |
|
|
Surface tons mined – ore and waste |
|
|
2,136,993 |
|
|
|
2,657,638 |
|
|
|
2,822,906 |
|
|
|
2,149,412 |
|
|
|
1,892,339 |
|
|
|
9,522,295 |
|
|
Total production cost per ton |
|
$ |
107.95 |
|
|
$ |
125.75 |
|
|
$ |
114.52 |
|
|
$ |
113.07 |
|
|
$ |
117.96 |
|
|
$ |
117.89 |
|
|
Ore grade milled – Gold (oz./ton) – underground |
|
|
0.13 |
|
|
|
0.15 |
|
|
|
0.15 |
|
|
|
0.19 |
|
|
|
0.14 |
|
|
|
0.16 |
|
|
Ore grade milled – Gold (oz./ton) – surface pit |
|
|
0.05 |
|
|
|
0.05 |
|
|
|
0.06 |
|
|
|
0.05 |
|
|
|
0.05 |
|
|
|
0.05 |
|
|
Ore grade milled – Gold (oz./ton) – combined |
|
|
0.07 |
|
|
|
0.09 |
|
|
|
0.10 |
|
|
|
0.10 |
|
|
|
0.09 |
|
|
|
0.09 |
|
|
Gold produced (oz.) – underground |
|
|
11,788 |
|
|
|
20,365 |
|
|
|
22,181 |
|
|
|
22,866 |
|
|
|
19,374 |
|
|
|
84,786 |
|
|
Gold produced (oz.) – surface pit |
|
|
12,898 |
|
|
|
10,344 |
|
|
|
11,154 |
|
|
|
10,440 |
|
|
|
10,866 |
|
|
|
42,804 |
|
|
Gold produced (oz.) – total |
|
|
24,686 |
|
|
|
30,709 |
|
|
|
33,335 |
|
|
|
33,306 |
|
|
|
30,240 |
|
|
|
127,590 |
|
|
Silver produced (oz.) – total |
|
|
6,554 |
|
|
|
5,960 |
|
|
|
6,882 |
|
|
|
8,379 |
|
|
|
7,068 |
|
|
|
28,289 |
|
|
Sales |
|
$ |
50,998 |
|
|
$ |
53,458 |
|
|
$ |
56,939 |
|
|
$ |
62,639 |
|
|
$ |
62,101 |
|
|
$ |
235,136 |
|
|
Total cost of sales |
|
$ |
(62,998 |
) |
|
$ |
(65,328 |
) |
|
$ |
(59,532 |
) |
|
$ |
(61,870 |
) |
|
$ |
(62,168 |
) |
|
$ |
(248,898 |
) |
|
Gross profit (loss) |
|
$ |
(12,000 |
) |
|
$ |
(11,870 |
) |
|
$ |
(2,593 |
) |
|
$ |
769 |
|
|
$ |
(67 |
) |
|
$ |
(13,762 |
) |
|
Cash flow from operations |
|
$ |
(684 |
) |
|
$ |
10,188 |
|
|
$ |
8,721 |
|
|
$ |
7,417 |
|
|
$ |
8,089 |
|
|
$ |
34,415 |
|
|
Exploration |
|
$ |
1,054 |
|
|
$ |
1,637 |
|
|
$ |
2,624 |
|
|
$ |
1,341 |
|
|
$ |
2,635 |
|
|
$ |
8,237 |
|
|
Capital additions |
|
$ |
(17,086 |
) |
|
$ |
(12,995 |
) |
|
$ |
(10,771 |
) |
|
$ |
(8,093 |
) |
|
$ |
(7,808 |
) |
|
$ |
(39,667 |
) |
|
Free cash flow 2 |
|
$ |
(16,716 |
) |
|
$ |
(1,170 |
) |
|
$ |
574 |
|
|
$ |
665 |
|
|
$ |
2,916 |
|
|
$ |
2,985 |
|
|
Cash cost per ounce, after by-product credits 3 |
|
$ |
1,775 |
|
|
$ |
1,696 |
|
|
$ |
1,349 |
|
|
$ |
1,371 |
|
|
$ |
1,516 |
|
|
$ |
1,478 |
|
|
AISC per ounce, after by-product credits 4 |
|
$ |
2,392 |
|
|
$ |
2,075 |
|
|
$ |
1,669 |
|
|
$ |
1,605 |
|
|
$ |
1,764 |
|
|
$ |
1,773 |
|
Casa Berardi produced 24,686 ounces of gold in the first quarter, a decrease of 20% over the prior quarter due to a 22% decline in overall gold grades primarily attributable to lower underground grades, partially offset by a 4% increase in mill recoveries. The mill continued to perform well, achieving a record quarterly throughput of 4,768 tpd.
Total cost of sales were $63.0 million, a decrease of 4% over the prior quarter primarily due to planned lower underground tonnage which resulted in lower underground labor, contractor, and consumables costs, partially offset by higher open pit tons. Cash costs and AISC per ounce, each after by-product credits, were $1,775 and $2,392, respectively, and increased over the prior quarter primarily due to lower gold production, with AISC also impacted by higher capital spend.3,4
Cash flow from operations for the quarter was negative $0.7 million, a decrease of $10.9 million due to lower production and unfavorable working capital changes. Free cash flow for the quarter was negative $16.7 million, a decrease of $15.5 million over the prior quarter due to lower cash flow from operations and higher planned capital spend. 2
Expected gold production remains weighted towards the second half of 2023. Cash costs and AISC, each after by-product credits, per gold ounce, are also expected to trend lower in the second half of the year.
Underground grade at the mine has declined by approximately 30% since 2018 in accordance with the mine plan. Smaller stopes and higher relative development have contributed to cost increases, which have been further exacerbated by inflationary pressures over the past year. The Company remains focused on underground exploration, but the mine is beginning the transition from an underground to an open pit operation. The F160 pit acts as a bridge between mining at the underground mines and mining higher grade open pit material, which is in the permitting pipeline. The higher grade open pit ore has reserve grades approximately 70% higher than the F160 pit. The mine is undergoing a period of transition and investment over the next few years and remains a key operation in the Company’s portfolio.
Keno Hill – Yukon Territory
At Keno Hill, ramp-up and development activities continued through the first quarter as the mine remains on track to commence production in the third quarter. As of the end of April, approximately 75% of the development required for production was complete. Capital spending for the first quarter was $17.1 million and included mine development, equipment purchases, and critical infrastructure projects including plant – reconfiguring the secondary crushing circuit and installing underground infrastructure. The workforce is about 290 people, in line with the plan. Ore from Flame & Moth and Bermingham deposit is being stockpiled. 2023 silver production is expected to exceed 2.5 million ounces with full throughput achieved by the end of the year.
EXPLORATION AND PRE-DEVELOPMENT
Exploration and pre-development expenses totaled $4.9 million for the first quarter of 2023. Exploration and definition drilling activities primarily focused on targets at Casa Berardi, Greens Creek, and Keno Hill. In addition to drilling activities, surface, and underground targets were advanced through ongoing 3D detailed geological modeling at San Sebastian, Republic, and all our operating properties. At San Sebastian, geophysical surveys are ongoing and are planned to begin at Republic during the second quarter.
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 9, 2023, to stockholders of record on May 22, 2023. The first quarter realized silver price was $22.62, satisfying the criterion for the Company’s common stock silver-linked dividend policy component.
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 3, 2023, to stockholders of record on June 15, 2023.
CONFERENCE CALL AND WEBCAST
A conference call and webcast will be held Wednesday, May 10, 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 1-888-330-2391 or for international dialing 1-240-789-2702. The Conference ID is 4812168 and must be provided when dialing in. Hecla’s live and archived webcast can be accessed at https://events.q4inc.com/attendee/379963057 or at www.hecla.com under News & Media.
VIRTUAL INVESTOR EVENT
Hecla will be holding a Virtual Investor Event on Wednesday, May 10, from 12:00 p.
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: http://www.hecla-mining.com
