Hecla Reports First Quarter 2024 Results
Cost and production guidance affirmed
For The Period Ended: March 31, 2024
COEUR D’ALENE, Idaho–(BUSINESS WIRE)–Hecla Mining Company (NYSE:HL) today announced first quarter 2024 financial and operating results.
FIRST QUARTER HIGHLIGHTS
Operational
- Produced 4.2 million silver ounces, an increase of 43% over the fourth quarter of 2023 (“prior quarter”)
- Lucky Friday completed ramp-up to full production with 1.1 million silver ounces produced.
- Improved safety at Keno Hill – 41% improvement over the 2023 All-injury Frequency Rate (“AIFR”); increased throughput 29% over the prior quarter, produced 0.6 million ounces of silver.
- 2024 production and cost guidance reiterated.
Financial
- Sales of $189.5 million, 44% from silver and 34% from gold.
- Net loss applicable to common stockholders of $5.9 million or ($0.01) per share and adjusted net income applicable to common stockholders of $6.5 million or $0.01 per share.1
- Consolidated silver total cost of sales of $108.2 million and cash cost and all-in sustaining cost (“AISC”) per silver ounce (each after by-product credits) of $4.78 and $13.10, respectively.3,4
- Received $17.4 million in Lucky Friday fire related insurance proceeds.
Silver Nuggets*
-
Solar in 2023
- Solar’s demand for silver reached 194 million ounces, up 64% over 2022.
- 16% of global silver demand is for solar, up from 7% in 2019.
-
Indian Silver Demand
- Accounts for 19% of global silver demand and is at pre-pandemic levels.
- February 2024 silver imports set a record, while the silver price in Indian rupees set an all-time high in April.
“The first quarter reflects an inflection point with the strong performance from Greens Creek, achieving full production at the Lucky Friday, and significant improvements in safety, environment, and production from Keno Hill,” said Phillips S. Baker Jr., President and CEO. “With this strong start to the year, we are well-positioned to achieve our production and cost guidance for 2024.”
Baker continued, “Silver demand for solar has been growing at a remarkable 17% annual growth rate over the past five years and is projected to continue. In India, buyers long known as being price sensitive, are importing silver in record quantities despite higher silver prices. Solar and India represent more than 35% of world demand and continues to grow.”
Baker concluded, “Hecla is the largest U.S. silver producer and is on track to be Canada’s largest this year. With silver production growth expected up to 20 million silver ounces by 2026, Hecla is the fastest growing established silver producer and should benefit from this strong and growing 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; comparisons are made to the “prior quarter” which refers to the fourth quarter of 2023. In the ‘Operations Overview’ section, free cash flow for operations excludes hedging adjustments.2
|
In Thousands unless stated otherwise |
|
1Q-2024 |
|
|
4Q-2023 |
|
|
3Q-2023 |
|
|
2Q-2023 |
|
|
1Q-2023 |
|
|
FY 2023 |
|
||||||
|
FINANCIAL AND PRODUCTION SUMMARY |
|
|||||||||||||||||||||||
|
Sales |
|
$ |
189,528 |
|
|
$ |
160,690 |
|
|
$ |
181,906 |
|
|
$ |
178,131 |
|
|
$ |
199,500 |
|
|
$ |
720,227 |
|
|
Total cost of sales |
|
$ |
170,368 |
|
|
$ |
153,825 |
|
|
$ |
148,429 |
|
|
$ |
140,472 |
|
|
$ |
164,552 |
|
|
$ |
607,278 |
|
|
Gross profit |
|
$ |
19,160 |
|
|
$ |
6,865 |
|
|
$ |
33,477 |
|
|
$ |
37,659 |
|
|
$ |
34,948 |
|
|
$ |
112,949 |
|
|
Net loss applicable to common stockholders |
|
$ |
(5,891 |
) |
|
$ |
(43,073 |
) |
|
$ |
(22,553 |
) |
|
$ |
(15,832 |
) |
|
$ |
(3,311 |
) |
|
$ |
(84,769 |
) |
|
Basic income (loss) per common share (in dollars) |
|
$ |
(0.01 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.14 |
) |
|
Adjusted EBITDA1 |
|
$ |
72,968 |
|
|
$ |
32,907 |
|
|
$ |
46,251 |
|
|
$ |
67,740 |
|
|
$ |
61,901 |
|
|
$ |
208,799 |
|
|
Total Debt |
|
$ |
671,092 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
662,815 |
|
||||
|
Net Debt to Adjusted EBITDA1 |
|
|
2.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.7 |
|
||||
|
Cash provided by operating activities |
|
$ |
17,080 |
|
|
$ |
884 |
|
|
$ |
10,235 |
|
|
$ |
23,777 |
|
|
$ |
40,603 |
|
|
$ |
75,499 |
|
|
Capital Expenditures |
|
$ |
(47,589 |
) |
|
$ |
(62,622 |
) |
|
$ |
(55,354 |
) |
|
$ |
(51,468 |
) |
|
$ |
(54,443 |
) |
|
$ |
(223,887 |
) |
|
Free Cash Flow2 |
|
$ |
(30,509 |
) |
|
$ |
(61,738 |
) |
|
$ |
(45,119 |
) |
|
$ |
(27,691 |
) |
|
$ |
(13,840 |
) |
|
$ |
(148,388 |
) |
|
Silver ounces produced |
|
|
4,192,098 |
|
|
|
2,935,631 |
|
|
|
3,533,704 |
|
|
|
3,832,559 |
|
|
|
4,040,969 |
|
|
|
14,342,863 |
|
|
Silver payable ounces sold |
|
|
3,481,884 |
|
|
|
2,847,591 |
|
|
|
3,142,227 |
|
|
|
3,360,694 |
|
|
|
3,604,494 |
|
|
|
12,955,006 |
|
|
Gold ounces produced |
|
|
36,592 |
|
|
|
37,168 |
|
|
|
39,269 |
|
|
|
35,251 |
|
|
|
39,571 |
|
|
|
151,259 |
|
|
Gold payable ounces sold |
|
|
32,189 |
|
|
|
33,230 |
|
|
|
36,792 |
|
|
|
31,961 |
|
|
|
39,619 |
|
|
|
141,602 |
|
|
Cash Costs and AISC, each after by-product credits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Silver cash costs per ounce 3 |
|
$ |
4.78 |
|
|
$ |
4.94 |
|
|
$ |
3.31 |
|
|
$ |
3.32 |
|
|
$ |
2.14 |
|
|
$ |
3.23 |
|
|
Silver AISC per ounce 4 |
|
$ |
13.10 |
|
|
$ |
17.48 |
|
|
$ |
11.39 |
|
|
$ |
11.63 |
|
|
$ |
8.96 |
|
|
$ |
11.76 |
|
|
Gold cash costs per ounce 3 |
|
$ |
1,669 |
|
|
$ |
1,702 |
|
|
$ |
1,475 |
|
|
$ |
1,658 |
|
|
$ |
1,775 |
|
|
$ |
1,652 |
|
|
Gold AISC per ounce 4 |
|
$ |
1,899 |
|
|
$ |
1,969 |
|
|
$ |
1,695 |
|
|
$ |
2,147 |
|
|
$ |
2,392 |
|
|
$ |
2,048 |
|
|
Realized Prices |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Silver, $/ounce |
|
$ |
24.77 |
|
|
$ |
23.47 |
|
|
$ |
23.71 |
|
|
$ |
23.67 |
|
|
$ |
22.62 |
|
|
$ |
23.33 |
|
|
Gold, $/ounce |
|
$ |
2,094 |
|
|
$ |
1,998 |
|
|
$ |
1,908 |
|
|
$ |
1,969 |
|
|
$ |
1,902 |
|
|
$ |
1,939 |
|
|
Lead, $/pound |
|
$ |
0.97 |
|
|
$ |
1.09 |
|
|
$ |
1.07 |
|
|
$ |
0.99 |
|
|
$ |
1.02 |
|
|
$ |
1.03 |
|
|
Zinc, $/pound |
|
$ |
1.10 |
|
|
$ |
1.39 |
|
|
$ |
1.52 |
|
|
$ |
1.13 |
|
|
$ |
1.39 |
|
|
$ |
1.35 |
|
Sales in the first quarter of 2024 increased by 18% to $189.5 million from the prior quarter due to higher sales volumes of all metals produced except gold and higher realized prices for silver and gold, partially offset by lower realized lead and zinc prices. The higher sales volumes are because of resuming production at Lucky Friday.
Gross profit increased to $19.2 million, an increase of 179%, with Lucky Friday back in operation.
Net loss applicable to common stockholders for the quarter was $5.9 million, a $37.2 million improvement, primarily due to:
- Receipt of $17.4 million of Lucky Friday insurance proceeds included in other operating income.
- Ramp-up and suspension costs decreased by $13.0 million to $14.5 million, with Lucky Friday’s restart.
- A foreign exchange gain of $4.0 million, compared to a loss of $4.2 million, reflecting the impact of the U.S. dollar (“USD”) appreciation on Canadian dollar-denominated monetary assets and liabilities.
The above items were partly offset by:
- Fair value adjustments, net, declined due to unrealized losses on both our derivative contracts not designated as accounting hedges, and marketable equity securities portfolio.
- An income and mining tax provision compared to a benefit.
Consolidated silver total cost of sales in the first quarter increased by 19% to $108.2 million, due to the restart at Lucky Friday. Consolidated cash costs and AISC per silver ounce, each after by-product credits, were $4.78 and $13.10, respectively, and include costs of Greens Creek for the full quarter and those of Lucky Friday for February and March. The decrease in cash costs per ounce was due to higher silver production, higher by-product credits (attributable to the restart at Lucky Friday) partially offset by higher production costs. Consolidated AISC per silver ounce decreased due to lower sustaining capital spending at Greens Creek and Lucky Friday. 3,4
Consolidated gold total cost of sales was $58.3 million, and consistent with the prior quarter. Cash costs and AISC per gold ounce, each after by-product credits, were $1,669 and $1,899, respectively.3,4 The decrease in cash costs per ounce was attributable to lower labor costs partially offset by lower gold production at Casa Berardi, with AISC also impacted by lower sustaining capital spend.
Adjusted EBITDA for the quarter increased by 122% to $73.0 million primarily due to higher gross profit attributable to the production restart at Lucky Friday, and receipt of $17.4 million of Lucky Friday insurance proceeds.5 The Net Leverage Ratio, calculated as the ratio of net debt (calculated as long-term debt and finance leases less cash) to Adjusted EBITDA remained consistent at 2.7 due to higher net debt.5 Cash and cash equivalents at the end of the first quarter were $80.2 million and included $140 million drawn on the revolving credit facility. Borrowing on the revolving credit facility increased in the first quarter due to the working capital required by the Lucky Friday restart, ongoing ramp-up at Keno Hill, and the semi-annual interest payments on the Company’s senior unsecured notes. The Company expects the Net Leverage Ratio to return to the Company’s target of less than 2.0 in the next twelve months as Lucky Friday working capital returns to normal levels and the Company receives additional insurance proceeds.5
Cash provided by operating activities was $17.1 million and increased by $16.2 million primarily due to the resumption of full production at Lucky Friday, and the receipt of insurance proceeds, partially offset by unfavorable working capital changes.
Capital expenditures, decreased by 24% to $47.6 million, compared to $62.6 million with the decrease related to timing and completion of the majority of the rehabilitation and mitigation work related to the fire at the Lucky Friday in 2023. Capital investment of $8.8 million at Greens Creek was related to development, equipment purchases and surface projects. Capital investment at the other operations was as follows: (i) $13.3 million at Casa Berardi, primarily related to tailings construction activities, (ii) $15.0 million at Lucky Friday primarily attributable to development, and (iii) $10.3 million at Keno Hill, primarily related to underground development and mobile equipment purchases.
Free cash flow for the quarter was negative $30.5 million, compared to negative $61.7 million.2 The improvement in free cash flow was attributable to the Lucky Friday resuming operations, receipt of $17.4 million of Lucky Friday insurance proceeds and lower capital spend.
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 March 31, 2024, 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. On March 31, 2024, the Company had hedged approximately 59% 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 |
|
1Q-2024 |
|
|
4Q-2023 |
|
|
|
3Q-2023 |
|
|
|
2Q-2023 |
|
|
|
1Q-2023 |
|
|
FY 2023 |
|
|||||||||
|
GREENS CREEK |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Tons of ore processed |
|
|
232,188 |
|
|
|
220,186 |
|
|
|
|
228,978 |
|
|
|
|
232,465 |
|
|
|
|
233,167 |
|
|
|
914,796 |
|
|||
|
Total production cost per ton |
|
$ |
212.92 |
|
|
$ |
223.98 |
|
|
|
$ |
200.30 |
|
|
|
$ |
194.94 |
|
|
|
$ |
198.60 |
|
|
$ |
204.20 |
|
|||
|
Ore grade milled – Silver (oz./ton) |
|
|
13.3 |
|
|
|
12.9 |
|
|
|
|
13.1 |
|
|
|
|
12.8 |
|
|
|
|
14.4 |
|
|
|
13.3 |
|
|||
|
Ore grade milled – Gold (oz./ton) |
|
|
0.09 |
|
|
|
0.09 |
|
|
|
|
0.09 |
|
|
|
|
0.10 |
|
|
|
|
0.08 |
|
|
|
0.09 |
|
|||
|
Ore grade milled – Lead (%) |
|
|
2.6 |
|
|
|
2.8 |
|
|
|
|
2.5 |
|
|
|
|
2.5 |
|
|
|
|
2.6 |
|
|
|
2.6 |
|
|||
|
Ore grade milled – Zinc (%) |
|
|
6.3 |
|
|
|
6.5 |
|
|
|
|
6.5 |
|
|
|
|
6.5 |
|
|
|
|
6.0 |
|
|
|
6.4 |
|
|||
|
Silver produced (oz.) |
|
|
2,478,594 |
|
|
|
2,260,027 |
|
|
|
|
2,343,192 |
|
|
|
|
2,355,674 |
|
|
|
|
2,772,859 |
|
|
|
9,731,752 |
|
|||
|
Gold produced (oz.) |
|
|
14,588 |
|
|
|
14,651 |
|
|
|
|
15,010 |
|
|
|
|
16,351 |
|
|
|
|
14,884 |
|
|
|
60,896 |
|
|||
|
Lead produced (tons) |
|
|
4,834 |
|
|
|
4,910 |
|
|
|
|
4,740 |
|
|
|
|
4,726 |
|
|
|
|
5,202 |
|
|
|
19,578 |
|
|||
|
Zinc produced (tons) |
|
|
13,062 |
|
|
|
12,535 |
|
|
|
|
13,224 |
|
|
|
|
13,255 |
|
|
|
|
12,482 |
|
|
|
51,496 |
|
|||
|
Sales |
|
$ |
97,310 |
|
|
$ |
93,543 |
|
|
|
$ |
96,459 |
|
|
|
$ |
95,891 |
|
|
|
$ |
98,611 |
|
|
$ |
384,504 |
|
|||
|
Total cost of sales |
|
$ |
(69,857 |
) |
|
$ |
(70,231 |
) |
|
|
$ |
(60,322 |
) |
|
|
$ |
(63,054 |
) |
|
|
$ |
(66,288 |
) |
|
$ |
(259,895 |
) |
|||
|
Gross profit |
|
$ |
27,453 |
|
|
$ |
23,312 |
|
|
|
|
$ |
36,137 |
|
|
|
|
$ |
32,837 |
|
|
|
|
$ |
32,323 |
|
|
$ |
124,609 |
|
|
Cash flow from operations |
|
$ |
28,706 |
|
|
$ |
34,576 |
|
|
|
$ |
36,101 |
|
|
|
$ |
43,302 |
|
|
|
$ |
43,346 |
|
|
$ |
157,325 |
|
|||
|
Exploration |
|
$ |
551 |
|
|
$ |
1,324 |
|
|
|
$ |
4,283 |
|
|
|
$ |
1,760 |
|
|
|
$ |
448 |
|
|
$ |
7,815 |
|
|||
|
Capital additions |
|
$ |
(8,827 |
) |
|
$ |
(15,996 |
) |
|
|
$ |
(12,060 |
) |
|
|
$ |
(8,828 |
) |
|
|
$ |
(6,658 |
) |
|
$ |
(43,542 |
) |
|||
|
Free cash flow 2 |
|
$ |
20,430 |
|
|
$ |
19,904 |
|
|
|
$ |
28,324 |
|
|
|
$ |
36,234 |
|
|
|
$ |
37,136 |
|
|
$ |
121,598 |
|
|||
|
Cash cost per ounce, after by-product credits 3 |
|
$ |
3.45 |
|
|
$ |
4.94 |
|
|
|
$ |
3.04 |
|
|
|
$ |
1.33 |
|
|
|
$ |
1.16 |
|
|
$ |
2.53 |
|
|||
|
AISC per ounce, after by-product credits 4 |
|
$ |
7.16 |
|
|
$ |
12.00 |
|
|
|
$ |
8.18 |
|
|
|
$ |
5.34 |
|
|
|
$ |
3.82 |
|
|
$ |
7.14 |
|
|||
Greens Creek produced 2.5 million ounces of silver during the quarter, an increase of 10%, while throughput for the quarter averaged 2,552 tons per day (“tpd”). Gold and lead production were consistent with the prior quarter, while zinc production increased 4%.
Sales in the quarter were $97.3 million, a 4% increase due to higher quantities of metals sold (silver, gold, and zinc), and higher realized prices for silver and gold, partially offset by lower realized lead and zinc prices. Total cost of sales was $69.9 million, consistent with the prior quarter. Cash costs and AISC per silver ounce, each after by-product credits, were $3.45 and $7.16, respectively, and decreased due to higher by-product credits (higher zinc production and higher realized prices for gold), higher silver production, and lower treatment charges. Lower AISC per silver ounce after by-product credits was also attributable to lower sustaining capital spend of $8.4 million ($15.2 million in prior quarter) due to timing of equipment purchases and lower capital development.3,4
Cash flow from operations was $28.7 million, a decrease of $5.9 million, primarily due to unfavorable working capital changes related to higher accounts receivables. Free cash flow for the quarter was $20.4 million, a slight increase as unfavorable working capital changes were offset by lower capital spend during the quarter.
Lucky Friday Mine – Idaho
|
Dollars are in thousands except cost per ton |
|
1Q-2024 |
|
|
4Q-2023 |
|
|
|
3Q-2023 |
|
|
|
2Q-2023 |
|
|
|
1Q-2023 |
|
|
|
FY 2023 |
|
||||||||||
|
LUCKY FRIDAY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Tons of ore processed |
|
|
86,234 |
|
|
|
5,164 |
|
|
|
|
36,619 |
|
|
|
|
94,043 |
|
|
|
|
95,303 |
|
|
|
|
231,129 |
|
||||
|
Total production cost per ton |
|
$ |
233.10 |
|
|
$ |
201.42 |
|
|
|
$ |
191.81 |
|
|
|
$ |
248.65 |
|
|
|
$ |
210.72 |
|
|
|
$ |
218.45 |
|
||||
|
Ore grade milled – Silver (oz./ton) |
|
|
12.9 |
|
|
|
12.7 |
|
|
|
|
13.6 |
|
|
|
|
14.3 |
|
|
|
|
13.8 |
|
|
|
|
14.0 |
|
||||
|
Ore grade milled – Lead (%) |
|
|
8.2 |
|
|
|
8.0 |
|
|
|
|
8.6 |
|
|
|
|
9.1 |
|
|
|
|
8.8 |
|
|
|
|
8.9 |
|
||||
|
Ore grade milled – Zinc (%) |
|
|
3.9 |
|
|
|
3.5 |
|
|
|
|
3.5 |
|
|
|
|
4.2 |
|
|
|
|
4.1 |
|
|
|
|
4.1 |
|
||||
|
Silver produced (oz.) |
|
|
1,061,065 |
|
|
|
61,575 |
|
|
|
|
475,414 |
|
|
|
|
1,286,666 |
|
|
|
|
1,262,464 |
|
|
|
|
3,086,119 |
|
||||
|
Lead produced (tons) |
|
|
6,689 |
|
|
|
372 |
|
|
|
|
2,957 |
|
|
|
|
8,180 |
|
|
|
|
8,034 |
|
|
|
|
19,543 |
|
||||
|
Zinc produced (tons) |
|
|
2,851 |
|
|
|
134 |
|
|
|
|
1,159 |
|
|
|
|
3,338 |
|
|
|
|
3,313 |
|
|
|
|
7,944 |
|
||||
|
Sales |
|
$ |
35,340 |
|
|
$ |
3,117 |
|
|
|
$ |
21,409 |
|
|
|
$ |
42,648 |
|
|
|
$ |
49,110 |
|
|
|
$ |
116,284 |
|
||||
|
Total cost of sales |
|
$ |
(27,519 |
) |
|
$ |
(3,117 |
) |
|
|
$ |
(14,344 |
) |
|
|
$ |
(32,190 |
) |
|
|
$ |
(34,534 |
) |
|
|
$ |
(84,185 |
) |
||||
|
Gross profit |
|
$ |
7,821 |
|
|
$ |
— |
|
|
|
|
$ |
7,065 |
|
|
|
|
$ |
10,458 |
|
|
|
|
$ |
14,576 |
|
|
|
|
$ |
32,099 |
|
|
Cash flow from operations |
|
$ |
27,112 |
|
|
$ |
(7,982 |
) |
|
|
$ |
515 |
|
|
|
$ |
18,893 |
|
|
|
$ |
46,132 |
|
|
|
$ |
57,558 |
|
||||
|
Capital additions |
|
$ |
(14,988 |
) |
|
$ |
(18,819 |
) |
|
|
$ |
(15,494 |
) |
|
|
$ |
(16,317 |
) |
|
|
$ |
(14,707 |
) |
|
|
$ |
(65,337 |
) |
||||
|
Free cash flow 2 |
|
$ |
12,124 |
|
|
$ |
(26,801 |
) |
|
|
$ |
(14,979 |
) |
|
|
$ |
2,576 |
|
|
|
$ |
31,425 |
|
|
|
$ |
(7,779 |
) |
||||
|
Cash cost per ounce, after by-product credits 3 |
|
$ |
8.85 |
|
|
N/A |
|
|
|
$ |
4.74 |
|
|
|
$ |
6.96 |
|
|
|
$ |
4.30 |
|
|
|
$ |
5.51 |
|
|||||
|
AISC per ounce, after by-product credits 4 |
|
$ |
17.36 |
|
|
N/A |
|
|
|
$ |
10.63 |
|
|
|
$ |
14.24 |
|
|
|
$ |
10.69 |
|
|
|
$ |
12.21 |
|
|||||
Lucky Friday produced 1.1 million ounces of silver during the quarter following restart of production on January 9, 2024. The mine ramped-up to full production during the quarter.
Sales in the first quarter were $35.3 million, and total cost of sales was $27.5 million. Costs of $2.2 million were incurred prior to the restart of production and are included in ramp-up and suspension costs on the consolidated statement of operations. Cash costs and AISC per silver ounce, each after by-product credits, were $8.85 and $17.36 respectively, and were higher than the 2024 cost guidance for the mine due to the ramp-up to full production during the quarter.
Cash flow from operations was $27.1 million and includes the $17.4 million in insurance proceeds received during the quarter. The quarter was also impacted by unfavorable working capital changes related to increases in concentrate inventory and accounts receivable as the mine ramped-up operations to full production. The Company’s applicable underground sublimit coverage is $50 million, and it expects to receive the additional insurance proceeds throughout the year.
Capital expenditures for the quarter were $15.0 million and included capital development, mobile equipment purchases, and completion of the rehabilitation work related to the secondary egress and #2 shaft. Free cash flow for the quarter was $12.1 million, an increase of $38.9 million as the mine resumed operations and collected $17.4 million of insurance proceeds.2
Keno Hill – Yukon Territory
|
Dollars are in thousands except cost per ton |
|
1Q-2024 |
|
|
4Q-2023 |
|
|
3Q-2023 |
|
|
2Q-2023 |
|
|
1Q-2023 |
|
|
FY-2023 |
|
||||||
|
KENO HILL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Tons of ore processed |
|
|
25,165 |
|
|
|
19,651 |
|
|
|
24,616 |
|
|
|
12,064 |
|
|
|
— |
|
|
|
56,331 |
|
|
Total production cost per ton |
|
$ |
132.42 |
|
|
$ |
145.36 |
|
|
$ |
88.97 |
|
|
$ |
202.66 |
|
|
$ |
— |
|
|
$ |
153.64 |
|
|
Ore grade milled – Silver (oz./ton) |
|
|
26.3 |
|
|
|
31.7 |
|
|
|
33.0 |
|
|
|
20.2 |
|
|
|
— |
|
|
|
27.7 |
|
|
Ore grade milled – Lead (%) |
|
|
2.4 |
|
|
|
2.6 |
|
|
|
2.4 |
|
|
|
2.5 |
|
|
|
— |
|
|
|
2.3 |
|
|
Ore grade milled – Zinc (%) |
|
|
1.3 |
|
|
|
1.6 |
|
|
|
2.5 |
|
|
|
4.1 |
|
|
|
— |
|
|
|
2.5 |
|
|
Silver produced (oz.) |
|
|
646,312 |
|
|
|
608,301 |
|
|
|
710,012 |
|
|
|
184,264 |
|
|
|
— |
|
|
|
1,502,577 |
|
|
Lead produced (tons) |
|
|
576 |
|
|
|
481 |
|
|
|
327 |
|
|
|
417 |
|
|
|
— |
|
|
|
1,225 |
|
|
Zinc produced (tons) |
|
|
298 |
|
|
|
396 |
|
|
|
252 |
|
|
|
691 |
|
|
|
— |
|
|
|
1,339 |
|
|
Sales |
|
$ |
10,847 |
|
|
$ |
17,936 |
|
|
$ |
16,001 |
|
|
$ |
1,581 |
|
|
|
— |
|
|
$ |
35,518 |
|
|
Total cost of sales |
|
$ |
(10,847 |
) |
|
$ |
(17,936 |
) |
|
$ |
(16,001 |
) |
|
$ |
(1,581 |
) |
|
|
— |
|
|
$ |
(35,518 |
) |
|
Gross profit |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
Cash flow from operations |
|
$ |
(13,334 |
) |
|
$ |
1,181 |
|
|
$ |
(6,200 |
) |
|
$ |
(12,900 |
) |
|
$ |
(6,324 |
) |
|
$ |
(24,243 |
) |
|
Exploration |
|
$ |
498 |
|
|
$ |
1,548 |
|
|
$ |
1,653 |
|
|
$ |
1,039 |
|
|
$ |
437 |
|
|
$ |
4,677 |
|
|
Capital additions |
|
$ |
(10,346 |
) |
|
$ |
(12,549 |
) |
|
$ |
(11,498 |
) |
|
$ |
(3,505 |
) |
|
$ |
(17,120 |
) |
|
$ |
(44,672 |
) |
|
Free cash flow 2 |
|
$ |
(23,182 |
) |
|
$ |
(9,820 |
) |
|
$ |
(16,045 |
) |
|
$ |
(15,366 |
) |
|
$ |
(23,007 |
) |
|
$ |
(64,238 |
) |
At Keno Hill, ramp-up to production continued and the mine produced 646,312 ounces of silver in the first quarter. Throughput in the quarter averaged 277 tpd, an increase of 29%, partially offset by lower silver grades, which were 26.3 ounces per ton.
The Keno Hill operation continues to ramp-up production by focusing on safety and environmental improvements by standardizing operating procedures, installing infrastructure, upgrading equipment, and executing our safety and environmental action plans. Keno Hill’s AIFR, one of several improving measures, declined 41% over 2023. While the Company’s safety and environmental programs focus on continuous performance improvement, the current action plans with the exception of some long-term infrastructure, are expected to be substantially completed before the end of the year.
Sales during the quarter were $10.8 million and decreased due to lower silver ounces sold due to timing. Ramp-up costs during the quarter were $8.7 million and are included in ramp-up and suspension costs on the consolidated statement of operations. Cash expenditures on production costs, including ramp-up costs, totaled $15.0 million for the quarter. Capital investments during the quarter were $10.3 million for underground and surface infrastructure, mine development, and mobile equipment purchases. The company is advancing the cemented tails batch plant, a critical infrastructure project, which will facilitate a change in the mining method at the Bermingham mine to underhand mining, which should improve safety and productivity. Construction of the project is expected to be completed in the fourth quarter with full conversion to underhand mining expected by the end of 2025.
Casa Berardi – Quebec
|
Dollars are in thousands except cost per ton |
|
1Q-2024 |
|
|
4Q-2023 |
|
|
3Q-2023 |
|
|
2Q-2023 |
|
|
1Q-2023 |
|
|
FY-2023 |
|
||||||
|
CASA BERARDI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Tons of ore processed – underground |
|
|
123,123 |
|
|
|
104,002 |
|
|
|
112,544 |
|
|
|
94,124 |
|
|
|
110,245 |
|
|
|
420,915 |
|
|
Tons of ore processed – surface pit |
|
|
258,503 |
|
|
|
251,009 |
|
|
|
231,075 |
|
|
|
224,580 |
|
|
|
318,909 |
|
|
|
1,025,573 |
|
|
Tons of ore processed – total |
|
|
381,626 |
|
|
|
355,011 |
|
|
|
343,619 |
|
|
|
318,704 |
|
|
|
429,154 |
|
|
|
1,446,488 |
|
|
Surface tons mined – ore and waste |
|
|
3,639,297 |
|
|
|
4,639,770 |
|
|
|
3,574,391 |
|
|
|
2,461,196 |
|
|
|
2,136,993 |
|
|
|
12,812,350 |
|
|
Total production cost per ton |
|
$ |
96.53 |
|
|
$ |
108.20 |
|
|
$ |
103.75 |
|
|
$ |
97.69 |
|
|
$ |
107.95 |
|
|
$ |
104.75 |
|
|
Ore grade milled – Gold (oz./ton) – underground |
|
|
0.137 |
|
|
|
0.124 |
|
|
|
0.133 |
|
|
|
0.137 |
|
|
|
0.127 |
|
|
|
0.129 |
|
|
Ore grade milled – Gold (oz./ton) – surface pit |
|
|
0.039 |
|
|
|
0.056 |
|
|
|
0.058 |
|
|
|
0.045 |
|
|
|
0.046 |
|
|
|
0.050 |
|
|
Ore grade milled – Gold (oz./ton) – combined |
|
|
0.070 |
|
|
|
0.065 |
|
|
|
0.072 |
|
|
|
0.063 |
|
|
|
0.058 |
|
|
|
0.050 |
|
|
Gold produced (oz.) – underground |
|
|
13,707 |
|
|
|
11,206 |
|
|
|
12,416 |
|
|
|
10,226 |
|
|
|
11,788 |
|
|
|
45,636 |
|
|
Gold produced (oz.) – surface pit |
|
|
8,297 |
|
|
|
11,311 |
|
|
|
11,843 |
|
|
|
8,675 |
|
|
|
12,898 |
|
|
|
44,727 |
|
|
Gold produced (oz.) – total |
|
|
22,004 |
|
|
|
22,517 |
|
|
|
24,259 |
|
|
|
18,901 |
|
|
|
24,686 |
|
|
|
90,363 |
|
|
Silver produced (oz.) – total |
|
|
6,127 |
|
|
|
5,730 |
|
|
|
5,084 |
|
|
|
5,956 |
|
|
|
5,645 |
|
|
|
22,415 |
|
|
Sales |
|
$ |
41,584 |
|
|
$ |
42,822 |
|
|
$ |
46,912 |
|
|
$ |
36,946 |
|
|
$ |
50,998 |
|
|
$ |
177,678 |
|
|
Total cost of sales |
|
$ |
(58,260 |
) |
|
$ |
(58,945 |
) |
|
$ |
(56,822 |
) |
|
$ |
(42,576 |
) |
|
$ |
(62,998 |
) |
|
$ |
(221,341 |
) |
|
Gross loss |
|
$ |
(16,676 |
) |
|
$ |
(16,123 |
) |
|
$ |
(9,910 |
) |
|
$ |
(5,630 |
) |
|
$ |
(12,000 |
) |
|
$ |
(43,663 |
) |
|
Cash flow from operations |
|
$ |
3,186 |
|
|
$ |
3,136 |
|
|
$ |
7,877 |
|
|
$ |
(8,148 |
) |
|
$ |
(684 |
) |
|
$ |
2,181 |
|
|
Exploration |
|
$ |
685 |
|
|
$ |
635 |
|
|
$ |
1,482 |
|
|
$ |
1,107 |
|
|
$ |
1,054 |
|
|
$ |
4,278 |
|
|
Capital additions |
|
$ |
(13,316 |
) |
|
$ |
(15,929 |
) |
|
$ |
(16,225 |
) |
|
$ |
(20,816 |
) |
|
$ |
(17,086 |
) |
|
$ |
(70,056 |
) |
|
Free cash flow 2 |
|
$ |
(9,445 |
) |
|
$ |
(12,158 |
) |
|
$ |
(6,866 |
) |
|
$ |
(27,857 |
) |
|
$ |
(16,716 |
) |
|
$ |
(63,597 |
) |
|
Cash cost per ounce, after by-product credits 3 |
|
$ |
1,669 |
|
|
$ |
1,702 |
|
|
$ |
1,475 |
|
|
$ |
1,658 |
|
|
$ |
1,775 |
|
|
$ |
1,652 |
|
|
AISC per ounce, after by-product credits 4 |
|
$ |
1,899 |
|
|
$ |
1,969 |
|
|
$ |
1,695 |
|
|
$ |
2,147 |
|
|
$ |
2,392 |
|
|
$ |
2,048 |
|
Casa Berardi produced 22,004 ounces of gold in the quarter, in line with the prior quarter as a 7% increase in throughput and recoveries were offset by lower grades from the 160 pit. The mill operated at an average of 4,194 tpd during the quarter.
Sales were $41.6 million, a 3% decrease due to fewer ounces sold, largely offset by higher realized prices. Total cost of sales was $58.3 million, a 1% decline, primarily attributable to lower labor costs. Cash costs and AISC per gold ounce, each after by-product credits, were $1,669 and $1,899 respectively and decreased primarily due to lower production costs. AISC was further favorably impacted by planned lower sustaining capital spend. 3,4
Cash flow from operations was $3.2 million, consistent with the prior quarter. Capital investments for the quarter totaled $13.3 million ($4.9 million in sustaining and $8.4 million in non-sustaining) and were primarily related to construction costs for tailings facilities. Free cash flow for the quarter was negative $9.4 million and improved by $2.7 million due to lower capital spending.2
The mine continues to transition to a surface only operation. With the increase in gold prices, a stope-by-stope analysis is currently under review for the underground operations to evaluate the extension of underground mine-life. The Company will update the production and cost guidance if deemed necessary.
EXPLORATION AND PRE-DEVELOPMENT
Exploration and pre-development expenses totaled $4.3 million for the quarter. Exploration activities during the quarter primarily focused on underground definition and exploration drilling at Greens Creek, Keno Hill, and Casa Berardi.
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
