Hecla Reports Fourth Quarter and Full Year 2023 Results
Second highest revenues, silver reserves and production; Expecting silver production growth
For The Period Ended: December 31, 2023
COEUR D’ALENE, Idaho–(BUSINESS WIRE)–Hecla Mining Company (NYSE:HL) (“Hecla” or the “Company”) today announced fourth quarter 2023 financial and operating results.
HIGHLIGHTS
- Silver reserves of 238 million ounces, silver production of 14.3 million ounces, and total sales of $720.2 million, all are the second highest in Company history.
- Lucky Friday restarted production on January 9th, with first insurance proceeds received in February.
- Hecla received a U.S. patent for the Underhand Closed Bench (“UCB”) mining method.
- Greens Creek achieved record throughput and generated $157.3 million in cash flow from operations and free cash flow of $121.6 million.2
- Casa Berardi began the transition to surface only mining with results exceeding expectations.
- Keno Hill began silver production in the second half of the year, focusing on improving safety and environmental performance while completing major infrastructure projects.
- Completed Technical Report Summary for Keno Hill and Casa Berardi demonstrating the value of the assets.
- All-Injury Frequency Rate (“AIFR”) of 1.45, lower than the national average, Greens Creek and Lucky Friday recorded their lowest AIFR of 0.29 and 0.66, respectively.
“Hecla reported the second largest silver reserves, largest gold resource, and second highest silver production and revenues in our history despite the Lucky Friday losing five months of production due to a fire,” said Phillips S. Baker Jr, President and CEO. “Greens Creek delivered another year of strong and consistent performance as we increased throughput. Casa Berardi exceeded our expectations for tons and cost per ton from operating our own surface fleet, and this strong performance is reflected in the updated technical report. At Keno Hill, we slowed the ramp-up of the mine due to the safety and environmental performance; however, with the silver grade over twice the grade of our other mines, it still contributed significantly to our silver production and, as the technical report shows, it will contribute even more in the future.”
Baker continued, “Because of the suspension of production at Lucky Friday due to the fire and continued investment in ramp-up at Keno Hill, we have drawn on our revolving credit facility which we expect to pay down in 2024 with all four mines in operation and anticipated receipt of approximately $50 million of insurance proceeds. With Lucky Friday back in production and Keno Hill’s continued ramp-up, we expect silver production to increase by 15-20% this year, and 30% by 2026, making Hecla one of the world’s fastest growing silver companies.”
Baker concluded, “2023 was also a significant year in the energy transition as 75% of the world’s new renewable electric power generation capacity was solar, requiring 500,000 ounces per gigawatt of new installed capacity, which equates to as much as 190 million ounces of silver in solar demand. China alone installed as much solar as the entire world did in 2022, and significant new solar facilities are now planned for the United States. As the demand for silver in solar continues to rise, Hecla, the largest silver producer in the U.S., and soon Canada, is well positioned to leverage higher expected silver prices driven by increasing demand.”
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; “prior year” refers to 2022, and “prior quarter” refers to the third quarter of 2023. In section ‘Operations Overview’, free cash flow for operations excludes hedging adjustments.2
|
In Thousands unless stated otherwise |
|
4Q-2023 |
|
|
3Q-2023 |
|
|
2Q-2023 |
|
|
1Q-2023 |
|
|
4Q-2022 |
|
|
FY-2023 |
|
|
FY-2022 |
|
|||||||
|
FINANCIAL AND PRODUCTION SUMMARY |
|
|||||||||||||||||||||||||||
|
Sales |
|
$ |
160,690 |
|
|
$ |
181,906 |
|
|
$ |
178,131 |
|
|
$ |
199,500 |
|
|
$ |
194,825 |
|
|
$ |
720,227 |
|
|
$ |
718,905 |
|
|
Total cost of sales |
|
$ |
153,825 |
|
|
$ |
148,429 |
|
|
$ |
140,472 |
|
|
$ |
164,552 |
|
|
$ |
169,807 |
|
|
$ |
607,278 |
|
|
$ |
602,749 |
|
|
Gross profit |
|
$ |
6,865 |
|
|
$ |
33,477 |
|
|
$ |
37,659 |
|
|
$ |
34,948 |
|
|
$ |
25,018 |
|
|
$ |
112,949 |
|
|
$ |
116,156 |
|
|
Net loss applicable to common stockholders |
|
$ |
(43,073 |
) |
|
$ |
(22,553 |
) |
|
$ |
(15,832 |
) |
|
$ |
(3,311 |
) |
|
$ |
(4,590 |
) |
|
$ |
(84,769 |
) |
|
$ |
(37,900 |
) |
|
Basic loss per common share (in dollars) |
|
$ |
(0.07 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.07 |
) |
|
Adjusted EBITDA1 |
|
$ |
36,661 |
|
|
$ |
46,251 |
|
|
$ |
67,740 |
|
|
$ |
61,901 |
|
|
$ |
62,261 |
|
|
$ |
212,553 |
|
|
$ |
217,492 |
|
|
Total Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
662,815 |
|
|
$ |
551,841 |
|
|||||
|
Net Debt to Adjusted EBITDA1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.6 |
|
|
|
1.9 |
|
|||||
|
Cash provided by operating activities |
|
$ |
884 |
|
|
$ |
10,235 |
|
|
$ |
23,777 |
|
|
$ |
40,603 |
|
|
$ |
36,120 |
|
|
$ |
75,499 |
|
|
$ |
89,890 |
|
|
Capital Expenditures |
|
$ |
(62,622 |
) |
|
$ |
(55,354 |
) |
|
$ |
(51,468 |
) |
|
$ |
(54,443 |
) |
|
$ |
(56,140 |
) |
|
$ |
(223,887 |
) |
|
$ |
(149,378 |
) |
|
Free Cash Flow2 |
|
$ |
(61,738 |
) |
|
$ |
(45,119 |
) |
|
$ |
(27,691 |
) |
|
$ |
(13,840 |
) |
|
$ |
(20,020 |
) |
|
$ |
(148,388 |
) |
|
$ |
(59,488 |
) |
|
Silver ounces produced |
|
|
2,935,631 |
|
|
|
3,533,704 |
|
|
|
3,832,559 |
|
|
|
4,040,969 |
|
|
|
3,663,433 |
|
|
|
14,342,863 |
|
|
|
14,182,987 |
|
|
Silver payable ounces sold |
|
|
2,847,591 |
|
|
|
3,142,227 |
|
|
|
3,360,694 |
|
|
|
3,604,494 |
|
|
|
3,756,701 |
|
|
|
12,955,006 |
|
|
|
12,311,595 |
|
|
Gold ounces produced |
|
|
37,168 |
|
|
|
39,269 |
|
|
|
35,251 |
|
|
|
39,571 |
|
|
|
43,634 |
|
|
|
151,259 |
|
|
|
175,807 |
|
|
Gold payable ounces sold |
|
|
33,230 |
|
|
|
36,792 |
|
|
|
31,961 |
|
|
|
39,619 |
|
|
|
40,097 |
|
|
|
141,602 |
|
|
|
165,818 |
|
|
Cash Costs and AISC, each after by-product credits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Silver cash costs per ounce 4 |
|
$ |
4.94 |
|
|
$ |
3.31 |
|
|
$ |
3.32 |
|
|
$ |
2.14 |
|
|
$ |
4.79 |
|
|
$ |
3.23 |
|
|
$ |
2.06 |
|
|
Silver AISC per ounce 4 |
|
$ |
17.48 |
|
|
$ |
11.39 |
|
|
$ |
11.63 |
|
|
$ |
8.96 |
|
|
$ |
13.98 |
|
|
$ |
11.76 |
|
|
$ |
10.66 |
|
|
Gold cash costs per ounce 4 |
|
$ |
1,702 |
|
|
$ |
1,475 |
|
|
$ |
1,658 |
|
|
$ |
1,775 |
|
|
$ |
1,696 |
|
|
$ |
1,652 |
|
|
$ |
1,478 |
|
|
Gold AISC per ounce 4 |
|
$ |
1,969 |
|
|
$ |
1,695 |
|
|
$ |
2,147 |
|
|
$ |
2,392 |
|
|
$ |
2,075 |
|
|
$ |
2,048 |
|
|
$ |
1,773 |
|
|
Realized Prices |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Silver, $/ounce |
|
$ |
23.47 |
|
|
$ |
23.71 |
|
|
$ |
23.67 |
|
|
$ |
22.62 |
|
|
$ |
22.03 |
|
|
$ |
23.33 |
|
|
$ |
21.53 |
|
|
Gold, $/ounce |
|
$ |
1,998 |
|
|
$ |
1,908 |
|
|
$ |
1,969 |
|
|
$ |
1,902 |
|
|
$ |
1,757 |
|
|
$ |
1,939 |
|
|
$ |
1,803 |
|
|
Lead, $/pound |
|
$ |
1.09 |
|
|
$ |
1.07 |
|
|
$ |
0.99 |
|
|
$ |
1.02 |
|
|
$ |
1.05 |
|
|
$ |
1.03 |
|
|
$ |
1.01 |
|
|
Zinc, $/pound |
|
$ |
1.39 |
|
|
$ |
1.52 |
|
|
$ |
1.13 |
|
|
$ |
1.39 |
|
|
$ |
1.24 |
|
|
$ |
1.35 |
|
|
$ |
1.41 |
|
Sales in 2023 increased to $720.2 million as higher realized prices for silver and gold offset lower gold and lead sales volumes. Gold production declined due to Casa Berardi reducing underground production as it transitions to a surface only operation by mid-2024. Lead production declined due to the temporary suspension of production at the Lucky Friday.
Gross profit in 2023 was $112.9 million, a decrease of 3% over the prior year. The decrease is attributable to (i) lower gross profit at Casa Berardi due to lower sales volumes and accelerated depreciation, depletion, and amortization based on the shorter underground mine life, and (ii) only seven months of production at Lucky Friday partially offset by higher gross profit realized at Greens Creek.
Net loss applicable to common stockholders for the year was $84.8 million, an increase over the prior year primarily related to:
- Ramp-up and suspension costs increased by $52.1 million, reflecting the impact of the Lucky Friday suspension, and the ramp-up of production at Keno Hill.
- A foreign exchange loss of $3.8 million, compared to a gain of $7.2 million in the prior year, reflecting the impact of the U.S. dollar appreciation on Canadian dollar denominated monetary assets and liabilities.
- An income tax provision of $1.2 million, compared to a benefit of $7.6 million due to an increase in the valuation allowance for losses incurred by Keno Hill during the year.
The above items were partly offset by:
- A decrease in exploration and pre-development expense of $13.5 million due to lower spend at Casa Berardi, Mexico, and Nevada sites, partially offset by higher spend at Greens Creek and Keno Hill.
- Fair value adjustments, net, changed from a loss to a gain, increasing by $7.6 million, reflecting unrealized gains on our marketable securities portfolio and de-designated hedging contracts.
- Other operating income of $1.4 million, compared to other operating expense of $6.3 million, reflecting the receipt of $5.9 million from an insurance settlement (unrelated to Lucky Friday).
Consolidated silver total cost of sales in 2023 was $379.6 million and increased by 9% from the prior year, primarily due to the temporary suspension of production at Lucky Friday during the year offset by higher labor and maintenance costs at Greens Creek. Cash costs and AISC per silver ounce, each after by-product credits, were $3.23 and $11.76, respectively, and increased over the prior year primarily due to lower by-product credits (primarily lower lead and zinc production and lower realized prices for zinc) and lower silver production.3,4
Consolidated gold total cost of sales decreased by 10% to $227.7 million primarily due to lower production costs at Casa Berardi as the underground East Mine ceased production given the strategic change announced in August to transition to a surface only operation with underground operations expected to be completed in mid-2024. Cash costs and AISC per gold ounce, each after by-product credits, were $1,652 and $2,048, respectively and increased over the prior year as lower gold production offset lower production costs and sustaining capital investment.3,4
Adjusted EBITDA for the year was $212.6 million, in line with the prior year. The ratio of net debt to adjusted EBITDA increased to 2.6 due to higher net debt attributable to draws on the credit facility and the use of cash reflecting the Company’s investment in Keno Hill’s development, and the temporary suspension of operations at the Lucky Friday.1 Cash and cash equivalents at the end of the fourth quarter were $106.4 million and included $128 million drawn on the revolving credit facility.
Cash provided by operating activities was $75.5 million and decreased by $14.4 million from the prior year primarily due to higher ramp-up and suspension costs and unfavorable working capital changes.
Capital expenditures, net of finance leases, were $223.9 million in 2023, compared to $149.4 million in 2022. The increase was due to (i) higher capital investment at Casa Berardi, primarily for tailings construction activities and mobile equipment purchases for the open pit operations, (ii) mine development and infrastructure projects at Keno Hill, (iii) restart plans to establish an alternative secondary escapeway as a result of the fire and completion of the service hoist and the coarse ore bunker at Lucky Friday and (iv) other sustaining capital projects at Greens Creek.
Free cash flow for the year was negative $148.4 million, compared to negative $59.5 million in the prior year, with the decrease primarily due to higher capital expenditures.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 in forecasted concentrate shipments. On December 31, 2023, the Company had contracts covering approximately 50% of the forecasted payable lead production from 2024 – 2025 at an average price of $0.98 per pound.
The Company also manages Canadian dollar (“CAD”) exposure through forward contracts. At December 31, 2023, the Company had hedged approximately 60% of forecasted Casa Berardi and Keno Hill CAD denominated direct production costs through 2026 at an average CAD/USD rate of 1.32. The Company has also hedged approximately 26% of Casa Berardi and Keno Hill CAD denominated total capital expenditures through 2026 at 1.35.
OPERATIONS OVERVIEW
Greens Creek Mine – Alaska
|
Dollars are in thousands except cost per ton |
|
4Q-2023 |
|
|
3Q-2023 |
|
|
2Q-2023 |
|
|
1Q-2023 |
|
|
4Q-2022 |
|
|
FY-2023 |
|
|
FY-2022 |
|
|||||||
|
GREENS CREEK |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Tons of ore processed |
|
|
220,186 |
|
|
|
228,978 |
|
|
|
232,465 |
|
|
|
233,167 |
|
|
|
230,225 |
|
|
|
914,796 |
|
|
|
881,445 |
|
|
Total production cost per ton |
|
$ |
223.98 |
|
|
$ |
200.30 |
|
|
$ |
194.94 |
|
|
$ |
198.60 |
|
|
$ |
211.29 |
|
|
$ |
204.20 |
|
|
$ |
196.73 |
|
|
Ore grade milled – Silver (oz./ton) |
|
|
12.9 |
|
|
|
13.1 |
|
|
|
12.8 |
|
|
|
14.4 |
|
|
|
13.1 |
|
|
|
13.3 |
|
|
|
13.6 |
|
|
Ore grade milled – Gold (oz./ton) |
|
|
0.09 |
|
|
|
0.09 |
|
|
|
0.10 |
|
|
|
0.08 |
|
|
|
0.08 |
|
|
|
0.09 |
|
|
|
0.08 |
|
|
Ore grade milled – Lead (%) |
|
|
2.8 |
|
|
|
2.5 |
|
|
|
2.5 |
|
|
|
2.6 |
|
|
|
2.6 |
|
|
|
2.6 |
|
|
|
2.7 |
|
|
Ore grade milled – Zinc (%) |
|
|
6.5 |
|
|
|
6.5 |
|
|
|
6.5 |
|
|
|
6.0 |
|
|
|
6.7 |
|
|
|
6.4 |
|
|
|
6.7 |
|
|
Silver produced (oz.) |
|
|
2,260,027 |
|
|
|
2,343,192 |
|
|
|
2,355,674 |
|
|
|
2,772,859 |
|
|
|
2,433,275 |
|
|
|
9,731,752 |
|
|
|
9,741,935 |
|
|
Gold produced (oz.) |
|
|
14,651 |
|
|
|
15,010 |
|
|
|
16,351 |
|
|
|
14,884 |
|
|
|
12,989 |
|
|
|
60,896 |
|
|
|
48,216 |
|
|
Lead produced (tons) |
|
|
4,910 |
|
|
|
4,740 |
|
|
|
4,726 |
|
|
|
5,202 |
|
|
|
4,985 |
|
|
|
19,578 |
|
|
|
19,480 |
|
|
Zinc produced (tons) |
|
|
12,535 |
|
|
|
13,224 |
|
|
|
13,255 |
|
|
|
12,482 |
|
|
|
13,842 |
|
|
|
51,496 |
|
|
|
52,312 |
|
|
Sales |
|
$ |
93,543 |
|
|
$ |
96,459 |
|
|
$ |
95,891 |
|
|
$ |
98,611 |
|
|
$ |
95,374 |
|
|
$ |
384,504 |
|
|
$ |
335,062 |
|
|
Total cost of sales |
|
$ |
(70,231 |
) |
|
$ |
(60,322 |
) |
|
$ |
(63,054 |
) |
|
$ |
(66,288 |
) |
|
$ |
(70,075 |
) |
|
$ |
(259,895 |
) |
|
$ |
(232,718 |
) |
|
Gross profit |
|
$ |
23,312 |
|
|
$ |
36,137 |
|
|
$ |
32,837 |
|
|
$ |
32,323 |
|
|
$ |
25,299 |
|
|
$ |
124,609 |
|
|
$ |
102,344 |
|
|
Cash flow from operations |
|
$ |
34,576 |
|
|
$ |
36,101 |
|
|
$ |
43,302 |
|
|
$ |
43,346 |
|
|
$ |
44,769 |
|
|
$ |
157,325 |
|
|
$ |
150,621 |
|
|
Exploration |
|
$ |
1,324 |
|
|
$ |
4,283 |
|
|
$ |
1,760 |
|
|
$ |
448 |
|
|
$ |
1,050 |
|
|
$ |
7,815 |
|
|
$ |
5,920 |
|
|
Capital additions |
|
$ |
(15,996 |
) |
|
$ |
(12,060 |
) |
|
$ |
(8,828 |
) |
|
$ |
(6,658 |
) |
|
$ |
(12,150 |
) |
|
$ |
(43,542 |
) |
|
$ |
(36,898 |
) |
|
Free cash flow 2 |
|
$ |
19,904 |
|
|
$ |
28,324 |
|
|
$ |
36,234 |
|
|
$ |
37,136 |
|
|
$ |
33,669 |
|
|
$ |
121,598 |
|
|
$ |
119,643 |
|
|
Cash cost per ounce, after by-product credits 3 |
|
$ |
4.94 |
|
|
$ |
3.04 |
|
|
$ |
1.33 |
|
|
$ |
1.16 |
|
|
$ |
4.26 |
|
|
$ |
2.53 |
|
|
$ |
0.70 |
|
|
AISC per ounce, after by-product credits 4 |
|
$ |
12.00 |
|
|
$ |
8.18 |
|
|
$ |
5.34 |
|
|
$ |
3.82 |
|
|
$ |
8.61 |
|
|
$ |
7.14 |
|
|
$ |
5.17 |
|
Greens Creek produced 9.7 million ounces of silver in 2023, in line with the prior year. Gold production increased 26% to 60,896 ounces due to higher throughput and grades. Lead production was consistent with the prior year while zinc production declined 2% due to lower grades. The mine achieved record throughput, which has increased 25% since the Company became the operator in 2008.
Sales in the fourth quarter were $93.5 million, a decrease of 3% over the prior quarter, as higher realized gold prices and higher silver and lead sales volumes were offset by lower gold and zinc sales volumes and lower realized silver prices. Total cost of sales was $70.2 million, an increase of 16% over the prior quarter primarily due to higher production costs attributable to higher labor costs, increased fuel usage following three significant weather events that resulted in twelve days of lost production during the fourth quarter, and higher maintenance costs. Cash costs and AISC per silver ounce, each after by-product credits, were $4.94 and $12.00 and increased over the prior quarter primarily due to lower base metal by-product credits (primarily zinc due to lower production), higher production costs and lower silver production. Increased AISC per silver ounce after by-product credits was attributable to higher sustaining capital investment of $15.2 million ($11.3 million in the prior quarter) due to the timing of equipment purchases and surface projects.3,4 Cash flow from operations was $34.6 million, in line with the prior quarter. Capital investment was $16.0 million during the quarter, an increase of $3.9 million over the prior quarter due to the timing of equipment purchases and planned construction projects. Free cash flow for the quarter was $19.9 million, a decrease over the prior quarter due to higher capital investment.
Sales in 2023 were $384.5 million, an increase of 15% compared to the prior year as higher realized precious metals prices and higher gold volumes were partially offset by lower silver and zinc sales volumes. Total cost of sales increased 12% to $259.9 million due to higher labor costs, higher consumable volumes to support record throughput in 2023, and related higher mill and equipment maintenance costs. Cash costs and AISC per silver ounce (each after by-product credits) were $2.53 and $7.14, respectively, higher than the prior year due to the abovementioned reasons.3,4 The increase in AISC was also impacted by higher planned sustaining capital investments during the year. Cash flow from operations for the year was $157.3 million and increased 4% over the prior year. Free cash flow generation for the year was $121.6 million and increased 2% over the prior year as higher sales were partially offset by higher costs and capital investment. 2
Lucky Friday Mine – Idaho
|
Dollars are in thousands except cost per ton |
|
4Q-2023 |
|
|
3Q-2023 |
|
|
2Q-2023 |
|
|
1Q-2023 |
|
|
4Q-2022 |
|
|
FY-2023 |
|
|
FY-2022 |
|
|||||||
|
LUCKY FRIDAY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Tons of ore processed |
|
|
5,164 |
|
|
|
36,619 |
|
|
|
94,043 |
|
|
|
95,303 |
|
|
|
90,935 |
|
|
|
231,129 |
|
|
|
356,907 |
|
|
Total production cost per ton |
|
$ |
201.42 |
|
|
$ |
191.81 |
|
|
$ |
248.65 |
|
|
$ |
210.72 |
|
|
$ |
232.73 |
|
|
$ |
218.45 |
|
|
$ |
223.55 |
|
|
Ore grade milled – Silver (oz./ton) |
|
|
12.7 |
|
|
|
13.6 |
|
|
|
14.3 |
|
|
|
13.8 |
|
|
|
14.0 |
|
|
|
14.0 |
|
|
|
13.0 |
|
|
Ore grade milled – Lead (%) |
|
|
8.0 |
|
|
|
8.6 |
|
|
|
9.1 |
|
|
|
8.8 |
|
|
|
9.1 |
|
|
|
8.9 |
|
|
|
8.7 |
|
|
Ore grade milled – Zinc (%) |
|
|
3.5 |
|
|
|
3.5 |
|
|
|
4.2 |
|
|
|
4.1 |
|
|
|
4.1 |
|
|
|
4.1 |
|
|
|
3.9 |
|
|
Silver produced (oz.) |
|
|
61,575 |
|
|
|
475,414 |
|
|
|
1,286,666 |
|
|
|
1,262,464 |
|
|
|
1,224,199 |
|
|
|
3,086,119 |
|
|
|
4,412,764 |
|
|
Lead produced (tons) |
|
|
372 |
|
|
|
2,957 |
|
|
|
8,180 |
|
|
|
8,034 |
|
|
|
7,934 |
|
|
|
19,543 |
|
|
|
29,233 |
|
|
Zinc produced (tons) |
|
|
134 |
|
|
|
1,159 |
|
|
|
3,338 |
|
|
|
3,313 |
|
|
|
3,335 |
|
|
|
7,944 |
|
|
|
12,436 |
|
|
Sales |
|
$ |
3,117 |
|
|
$ |
21,409 |
|
|
$ |
42,648 |
|
|
$ |
49,110 |
|
|
$ |
45,434 |
|
|
$ |
116,284 |
|
|
$ |
147,814 |
|
|
Total cost of sales |
|
$ |
(3,117 |
) |
|
$ |
(14,344 |
) |
|
$ |
(32,190 |
) |
|
$ |
(34,534 |
) |
|
$ |
(32,819 |
) |
|
$ |
(84,185 |
) |
|
$ |
(116,598 |
) |
|
Gross profit |
|
$ |
— |
|
|
$ |
7,065 |
|
|
$ |
10,458 |
|
|
$ |
14,576 |
|
|
$ |
12,615 |
|
|
$ |
32,099 |
|
|
$ |
31,216 |
|
|
Cash flow from operations |
|
$ |
(7,982 |
) |
|
$ |
515 |
|
|
$ |
18,893 |
|
|
$ |
46,132 |
|
|
$ |
(7,437 |
) |
|
$ |
57,558 |
|
|
$ |
37,813 |
|
|
Capital additions |
|
$ |
(18,819 |
) |
|
$ |
(15,494 |
) |
|
$ |
(16,317 |
) |
|
$ |
(14,707 |
) |
|
$ |
(13,714 |
) |
|
$ |
(65,337 |
) |
|
$ |
(50,992 |
) |
|
Free cash flow 2 |
|
$ |
(26,801 |
) |
|
$ |
(14,979 |
) |
|
$ |
2,576 |
|
|
$ |
31,425 |
|
|
$ |
(21,151 |
) |
|
$ |
(7,779 |
) |
|
$ |
(13,179 |
) |
|
Cash cost per ounce, after by-product credits 3 |
|
N/A |
|
|
$ |
4.74 |
|
|
$ |
6.96 |
|
|
$ |
4.30 |
|
|
$ |
5.82 |
|
|
$ |
5.51 |
|
|
$ |
5.06 |
|
|
|
AISC per ounce, after by-product credits 4 |
|
N/A |
|
|
$ |
10.63 |
|
|
$ |
14.24 |
|
|
$ |
10.69 |
|
|
$ |
12.88 |
|
|
$ |
12.21 |
|
|
$ |
12.86 |
|
|
Lucky Friday produced 3.1 million ounces of silver for the year, a decrease of 30% over the prior year due to the suspension of production beginning in August through the end of the year due to a fire in the secondary escapeway (#2 shaft).
The mine restarted production on January 9, 2024 and is expected to ramp-up to full production in the first quarter of 2024. The work executed to resume production was completed on schedule and within cost expectations (approximately $12 million). This work involved developing a new secondary egress consisting of a ramp of 1,600 feet and a 290-foot vertical escapeway. The Company has property and business interruption insurance, with an applicable underground sublimit coverage of $50 million, which is expected to cover a majority of the expenses and business interruption (net of the deductibles). The first insurance payment has been received and the Company expects to receive remaining insurance payments through the year.
Sales in 2023 were $116.3 million, a decrease of 21% over the prior year due to lower production and sales volumes. Gross profit in 2023 was $32.1 million, an increase of 3% over 2022, due to higher realized silver and lead prices and higher production prior to the suspension of production. Cash flow from operations for the year was $57.6 million, an increase of 52% over the prior year due to favorable working capital changes, which included a $31 million reduction in accounts receivable. Capital investment, net of leases, for the year was $65.3 million, compared to $50.9 million in the prior year with the increase attributable to production restart work to reestablish the secondary egress, construction of the coarse ore bunker, which allows a stockpile of ore to be stored on surface, and the service hoist project. Free cash flow was negative $7.8 million due to increased capital investment for the year that offset higher cash flow from operations.2
Casa Berardi – Quebec
|
Dollars are in thousands except cost per ton |
|
4Q-2023 |
|
|
3Q-2023 |
|
|
2Q-2023 |
|
|
1Q-2023 |
|
|
4Q-2022 |
|
|
FY-2023 |
|
|
FY-2022 |
|
|||||||
|
CASA BERARDI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Tons of ore processed – underground |
|
|
104,002 |
|
|
|
112,544 |
|
|
|
94,124 |
|
|
|
110,245 |
|
|
|
160,150 |
|
|
|
420,915 |
|
|
|
660,550 |
|
|
Tons of ore processed – open pit |
|
|
251,009 |
|
|
|
231,075 |
|
|
|
224,580 |
|
|
|
318,909 |
|
|
|
250,883 |
|
|
|
1,025,573 |
|
|
|
928,189 |
|
|
Tons of ore processed – total |
|
|
355,011 |
|
|
|
343,619 |
|
|
|
318,704 |
|
|
|
429,154 |
|
|
|
411,033 |
|
|
|
1,446,488 |
|
|
|
1,588,739 |
|
|
Surface tons mined – ore and waste |
|
|
4,639,770 |
|
|
|
3,574,391 |
|
|
|
2,461,196 |
|
|
|
2,136,993 |
|
|
|
2,657,638 |
|
|
|
12,812,350 |
|
|
|
9,522,295 |
|
|
Total production cost per ton |
|
$ |
108.20 |
|
|
$ |
103.75 |
|
|
$ |
97.69 |
|
|
$ |
107.95 |
|
|
$ |
125.75 |
|
|
$ |
104.75 |
|
|
$ |
117.89 |
|
|
Ore grade milled – Gold (oz./ton) – underground |
|
|
0.11 |
|
|
|
0.13 |
|
|
|
0.14 |
|
|
|
0.13 |
|
|
|
0.15 |
|
|
|
0.11 |
|
|
|
0.16 |
|
|
Ore grade milled – Gold (oz./ton) – open pit |
|
|
0.05 |
|
|
|
0.06 |
|
|
|
0.04 |
|
|
|
0.05 |
|
|
|
0.05 |
|
|
|
0.04 |
|
|
|
0.05 |
|
|
Ore grade milled – Gold (oz./ton) – combined |
|
|
0.07 |
|
|
|
0.08 |
|
|
|
0.07 |
|
|
|
0.07 |
|
|
|
0.09 |
|
|
|
0.07 |
|
|
|
0.09 |
|
|
Gold produced (oz.) – underground |
|
|
11,206 |
|
|
|
12,416 |
|
|
|
10,226 |
|
|
|
11,788 |
|
|
|
20,365 |
|
|
|
45,636 |
|
|
|
84,786 |
|
|
Gold produced (oz.) – open pit |
|
|
11,311 |
|
|
|
11,843 |
|
|
|
8,675 |
|
|
|
12,898 |
|
|
|
10,344 |
|
|
|
44,727 |
|
|
|
42,804 |
|
|
Gold produced (oz.) – total |
|
|
22,517 |
|
|
|
24,259 |
|
|
|
18,901 |
|
|
|
24,686 |
|
|
|
30,709 |
|
|
|
90,363 |
|
|
|
127,590 |
|
|
Silver produced (oz.) – total |
|
|
5,730 |
|
|
|
5,084 |
|
|
|
5,956 |
|
|
|
5,645 |
|
|
|
5,960 |
|
|
|
22,415 |
|
|
|
28,289 |
|
|
Sales |
|
$ |
42,822 |
|
|
$ |
46,912 |
|
|
$ |
36,946 |
|
|
$ |
50,998 |
|
|
$ |
53,458 |
|
|
$ |
177,678 |
|
|
$ |
235,136 |
|
|
Total cost of sales |
|
$ |
(58,945 |
) |
|
$ |
(56,822 |
) |
|
$ |
(42,576 |
) |
|
$ |
(62,998 |
) |
|
$ |
(65,328 |
) |
|
$ |
(221,341 |
) |
|
$ |
(248,898 |
) |
|
Gross (loss) profit |
|
$ |
(16,123 |
) |
|
$ |
(9,910 |
) |
|
$ |
(5,630 |
) |
|
$ |
(12,000 |
) |
|
$ |
(11,870 |
) |
|
$ |
(43,663 |
) |
|
$ |
(13,762 |
) |
|
Cash flow from (used in) operations |
|
$ |
3,136 |
|
|
$ |
7,877 |
|
|
$ |
(8,148 |
) |
|
$ |
(684 |
) |
|
$ |
10,188 |
|
|
$ |
2,181 |
|
|
$ |
34,415 |
|
|
Exploration |
|
$ |
635 |
|
|
$ |
1,482 |
|
|
$ |
1,107 |
|
|
$ |
1,054 |
|
|
$ |
1,637 |
|
|
$ |
4,278 |
|
|
$ |
8,237 |
|
|
Capital additions |
|
$ |
(15,929 |
) |
|
$ |
(16,225 |
) |
|
$ |
(20,816 |
) |
|
$ |
(17,086 |
) |
|
$ |
(12,995 |
) |
|
$ |
(70,056 |
) |
|
$ |
(39,667 |
) |
|
Free cash flow 2 |
|
$ |
(12,158 |
) |
|
$ |
(6,866 |
) |
|
$ |
(27,857 |
) |
|
$ |
(16,716 |
) |
|
$ |
(1,170 |
) |
|
$ |
(63,597 |
) |
|
$ |
2,985 |
|
|
Cash cost per ounce, after by-product credits 3 |
|
$ |
1,702 |
|
|
$ |
1,475 |
|
|
$ |
1,658 |
|
|
$ |
1,775 |
|
|
$ |
1,696 |
|
|
$ |
1,652 |
|
|
$ |
1,478 |
|
|
AISC per ounce, after by-product credits 4 |
|
$ |
1,969 |
|
|
$ |
1,695 |
|
|
$ |
2,147 |
|
|
$ |
2,392 |
|
|
$ |
2,075 |
|
|
$ |
2,048 |
|
|
$ |
1,773 |
|
Casa Berardi produced 90,363 ounces of gold in 2023, a decrease of 29% over the prior year due to wildfire-related closures in June and lower underground tonnage mined, reflecting the decision to halt underground mining in the East Mine as part of the strategic change announced in August to transition to a surface operation by mid-2024. Open pit tons moved during the year set a record as the first phase of the in-house equipment fleet was commissioned.
Sales in the fourth quarter were $42.8 million, a 9% decrease over the prior quarter due to lower gold sales volumes. Total cost of sales was $58.9 million, an increase of 4% over the prior quarter, attributable to higher production costs and an increase in non-cash depreciation, depletion, and amortization expense due to amortizing the underground mine assets over a shorter useful life as the mine transitions to a surface only operation. Cash costs and AISC per gold ounce, each after by-product credits, were $1,702 and $1,969, respectively, and increased over the prior quarter due to higher production costs attributable to higher ore and waste tons mined and milled during the quarter and lower gold production.3,4 Cash flow from operations was $3.1 million and decreased over the prior quarter due to lower sales and higher costs. Capital investment for the quarter was $15.
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.com
