Hecla Reports Second Quarter 2024 Results
Second highest silver production drives record revenues, positive free cash flow, and deleveraging
COEUR D’ALENE, Idaho–(BUSINESS WIRE)–Hecla Mining Company (NYSE:HL, “Company”) today announced second quarter 2024 financial and operating results.
SECOND QUARTER HIGHLIGHTS
Operational
- Production of 4.5 million silver ounces, second highest in Company history.
- Lucky Friday’s silver production of 1.3 million ounces was the highest since 2000. Record mill throughput of 1,181 tons per day (“tpd”).
- Keno Hill All-Injury Frequency Rate (“AIFR”) improved by 12% to 1.98, while producing a record 0.9 million ounces of silver, a 39% increase over the first quarter of 2024.
- 2024 silver production and consolidated cost guidance reiterated, gold production guidance increased.
Financial
- Revenues of $245.7 million, highest in Company history, 46% from silver and 34% from gold.
- Net income applicable to common stockholders of $27.7 million or $0.04 per share, adjusted net income applicable to common stockholders of $12.3 million or $0.02 per share.1
- Trailing twelve month Adjusted EBITDA of $242.8 million, net leverage ratio* improved to 2.3.5
- Cash provided by operating activities of $78.7 million, free cash flow of $28.3 million.2
-
Free cash flow generated at all operations, particularly strong at Greens Creek and Lucky Friday.
- Greens Creek generated $43.3 million in cash flow from operations and $33.6 million in free cash flow.2
- Lucky Friday generated $44.5 million in cash flow from operations and $33.7 million in free cash flow (including $17.8 million in insurance receipts).2
- Consolidated silver total cost of sales of $123.3 million and cash cost and all-in sustaining cost (“AISC”) per silver ounce (each after by-product credits) of $2.08 and $12.54, respectively.3,4
- Received $17.8 million in Lucky Friday insurance claim proceeds, $35.2 million received to date.
- Realized silver price of $29.77 per ounce, $0.01375 cash dividend per common share, includes silver-linked component of $0.01 per share.
Exploration
-
Drilling at Keno Hill intersected significant widths of high-grade silver mineralization at both the Bermingham and Flame & Moth deposits, confirmed and expanded mineralization in both areas. Highlights include:
- Bermingham Bear Vein: 35.4 oz/ton silver, 2.2% lead, and 2.0% zinc over 20.2 feet.
- Flame & Moth Veins 0, 1, and Stockwork: 28.6 oz/ton silver, 3.3% lead, and 6.2% zinc over 22.3 feet.
- Drilling at Greens Creek intersected strong mineralization in multiple ore zones adding confidence and expanding mineralization. Most notably, the West Zone: 72.7 oz/ton silver, 0.23 oz/ton gold, 9.6% zinc, and 5.2% lead over 26.9 feet.
|
* Net Leverage ratio is calculated as long-term debt and finance leases less cash to adjusted EBITDA. |
“Hecla saw significant improvement in gross profit and free cash flow during the quarter – with our gross profit increasing more than 1.5 times over the prior quarter, and free cash flow generation of $28.3 million, which allowed us to reduce our net debt by $25.1 million,” said Cassie Boggs, interim President and CEO. “This financial performance was driven by strong results and free cash flow generated at Greens Creek and Lucky Friday, while Keno Hill’s ramp-up progressed well with throughput in excess of 400 tpd. With this strong performance and favorable price environment, we will continue our focus on reducing debt while continuing to invest in our operations and exploration programs.”
Boggs continued, “At Keno Hill, while the ramp-up has gone well, our focus will be to ensure Hecla’s culture of safety and environmental excellence is instilled in the operational and mining practices. As a result, we expect costs and investment at the mine will remain at current levels as more work is required to deliver long-term value. We are committed to collaborating and working with the First Nation of Na-Cho Nyäk Dun as they work through the clean-up work after the heap leach failure at Victoria Gold’s Eagle Gold mine. We have offered our assistance and will continue to be available where we can during this time of crisis.”
Boggs concluded, “Silver demand is projected to remain robust, supported by the growing solar demand as the world transitions to a cleaner, greener economy. With Hecla’s silver production expected at about 17 million ounces this year, potentially increasing to 20 million ounces by 2026, Hecla remains the fastest growing established silver producer with growth in the best mining jurisdictions.”
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, and comparisons are made to the “prior quarter” which refers to the first quarter of 2024.
|
In Thousands unless stated otherwise |
|
2Q-2024 |
|
|
1Q-2024 |
|
|
4Q-2023 |
|
|
3Q-2023 |
|
|
2Q-2023 |
|
|
YTD-2024 |
|
|
YTD-2023 |
|
|||||||
|
FINANCIAL AND PRODUCTION SUMMARY |
|
|||||||||||||||||||||||||||
|
Sales |
|
$ |
245,657 |
|
|
$ |
189,528 |
|
|
$ |
160,690 |
|
|
$ |
181,906 |
|
|
$ |
178,131 |
|
|
$ |
435,185 |
|
|
$ |
377,631 |
|
|
Total cost of sales |
|
$ |
194,227 |
|
|
$ |
170,368 |
|
|
$ |
153,825 |
|
|
$ |
148,429 |
|
|
$ |
140,472 |
|
|
$ |
364,595 |
|
|
$ |
305,024 |
|
|
Gross profit |
|
$ |
51,430 |
|
|
$ |
19,160 |
|
|
$ |
6,865 |
|
|
$ |
33,477 |
|
|
$ |
37,659 |
|
|
$ |
70,590 |
|
|
$ |
72,607 |
|
|
Net income (loss) applicable to common stockholders |
|
$ |
27,732 |
|
|
$ |
(5,891 |
) |
|
$ |
(43,073 |
) |
|
$ |
(22,553 |
) |
|
$ |
(15,832 |
) |
|
$ |
21,841 |
|
|
$ |
(19,143 |
) |
|
Basic income (loss) per common share (in dollars) |
|
$ |
0.04 |
|
|
$ |
(0.01 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.03 |
) |
|
$ |
0.04 |
|
|
$ |
(0.03 |
) |
|
Adjusted EBITDA1 |
|
$ |
90,895 |
|
|
$ |
72,699 |
|
|
$ |
32,907 |
|
|
$ |
46,251 |
|
|
$ |
67,740 |
|
|
$ |
163,594 |
|
|
$ |
129,642 |
|
|
Total Debt |
|
$ |
590,451 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
571,030 |
|
|||||
|
Net Debt to Adjusted EBITDA1 |
|
|
2.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.1 |
|
|||||
|
Cash provided by operating activities |
|
$ |
78,718 |
|
|
$ |
17,080 |
|
|
$ |
884 |
|
|
$ |
10,235 |
|
|
$ |
23,777 |
|
|
$ |
95,798 |
|
|
$ |
64,380 |
|
|
Capital Expenditures |
|
$ |
(50,420 |
) |
|
$ |
(47,589 |
) |
|
$ |
(62,622 |
) |
|
$ |
(55,354 |
) |
|
$ |
(51,468 |
) |
|
$ |
(98,009 |
) |
|
$ |
(105,911 |
) |
|
Free Cash Flow2 |
|
$ |
28,298 |
|
|
$ |
(30,509 |
) |
|
$ |
(61,738 |
) |
|
$ |
(45,119 |
) |
|
$ |
(27,691 |
) |
|
$ |
(2,211 |
) |
|
$ |
(41,531 |
) |
|
Silver ounces produced |
|
|
4,458,484 |
|
|
|
4,192,098 |
|
|
|
2,935,631 |
|
|
|
3,533,704 |
|
|
|
3,832,559 |
|
|
|
8,650,582 |
|
|
|
7,873,528 |
|
|
Silver payable ounces sold |
|
|
3,785,285 |
|
|
|
3,481,884 |
|
|
|
2,847,591 |
|
|
|
3,142,227 |
|
|
|
3,360,694 |
|
|
|
7,267,169 |
|
|
|
6,965,188 |
|
|
Gold ounces produced |
|
|
37,324 |
|
|
|
36,592 |
|
|
|
37,168 |
|
|
|
39,269 |
|
|
|
35,251 |
|
|
|
73,916 |
|
|
|
74,822 |
|
|
Gold payable ounces sold |
|
|
35,276 |
|
|
|
32,189 |
|
|
|
33,230 |
|
|
|
36,792 |
|
|
|
31,961 |
|
|
|
67,465 |
|
|
|
71,580 |
|
|
Cash Costs and AISC, each after by-product credits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Silver cash costs per ounce 3 |
|
$ |
2.08 |
|
|
$ |
4.78 |
|
|
$ |
4.94 |
|
|
$ |
3.31 |
|
|
$ |
3.32 |
|
|
$ |
3.38 |
|
|
$ |
2.70 |
|
|
Silver AISC per ounce 4 |
|
$ |
12.54 |
|
|
$ |
13.10 |
|
|
$ |
17.48 |
|
|
$ |
11.39 |
|
|
$ |
11.63 |
|
|
$ |
12.81 |
|
|
$ |
10.21 |
|
|
Gold cash costs per ounce 3 |
|
$ |
1,701 |
|
|
$ |
1,669 |
|
|
$ |
1,702 |
|
|
$ |
1,475 |
|
|
$ |
1,658 |
|
|
$ |
1,685 |
|
|
$ |
1,725 |
|
|
Gold AISC per ounce 4 |
|
$ |
1,825 |
|
|
$ |
1,899 |
|
|
$ |
1,969 |
|
|
$ |
1,695 |
|
|
$ |
2,147 |
|
|
$ |
1,861 |
|
|
$ |
2,286 |
|
|
Realized Prices |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Silver, $/ounce |
|
$ |
29.77 |
|
|
$ |
24.77 |
|
|
$ |
23.47 |
|
|
$ |
23.71 |
|
|
$ |
23.67 |
|
|
$ |
27.37 |
|
|
$ |
23.12 |
|
|
Gold, $/ounce |
|
$ |
2,338 |
|
|
$ |
2,094 |
|
|
$ |
1,998 |
|
|
$ |
1,908 |
|
|
$ |
1,969 |
|
|
$ |
2,222 |
|
|
$ |
1,928 |
|
|
Lead, $/pound |
|
$ |
1.06 |
|
|
$ |
0.97 |
|
|
$ |
1.09 |
|
|
$ |
1.07 |
|
|
$ |
0.99 |
|
|
$ |
1.02 |
|
|
$ |
1.00 |
|
|
Zinc, $/pound |
|
$ |
1.51 |
|
|
$ |
1.10 |
|
|
$ |
1.39 |
|
|
$ |
1.52 |
|
|
$ |
1.13 |
|
|
$ |
1.30 |
|
|
$ |
1.26 |
|
Sales in the second quarter increased by 30% from the prior quarter to $245.7 million due to higher quantities sold of all metals produced except zinc, as well as higher realized prices for all metals. The higher sales volumes were due to a full quarter of production at Lucky Friday, increased sales at Keno Hill and Casa Berardi, partially offset by lower volumes sold at Greens Creek.
Gross profit increased by 168% to $51.4 million, reflecting higher realized prices and higher sales volumes at Lucky Friday and Casa Berardi.
Net income applicable to common stockholders for the quarter was $27.7 million, a $33.6 million improvement from the prior quarter, primarily because of:
- Ramp-up and suspension costs decreased by $9.0 million to $5.5 million, reflecting a full quarter of Lucky Friday production following the restart in January and improved performance at Keno Hill.
- Fair value adjustments, net increased by $6.9 million due to unrealized gains on both our derivative contracts not designated as accounting hedges, and marketable equity securities portfolio.
The above items were partly offset by:
- Income and mining tax provision increased by $7.3 million to $9.1 million reflecting higher taxable income of our US operations.
- General and administrative costs increased by $3.5 million due to costs incurred related to the former CEO’s retirement, which were primarily non cash equity compensation costs.
Consolidated silver total cost of sales in the second quarter increased by 14% to $123.3 million, reflecting a full quarter of production at Lucky Friday and increased sales at Keno Hill. Consolidated cash costs and AISC per silver ounce, each after by-product credits, were $2.08 and $12.54 respectively and only include costs of Greens Creek and Lucky Friday for the full quarter (commercial production has not been declared at Keno Hill). The decrease in cash costs and AISC per silver ounce was due to higher silver production and higher by-product credits partially offset by higher production costs.3,4
Consolidated gold total cost of sales were $67.3 million, reflecting an increase in sales volumes at Casa Berardi. Cash costs and AISC per gold ounce, each after by-product credits, were $1,701 and $1,825, respectively.3,4 The increase in cash costs per ounce was attributable to higher contractor, maintenance and consumables costs partially offset by higher gold production at Casa Berardi, with AISC also impacted by lower sustaining capital.
Adjusted EBITDA for the quarter was a record $90.9 million, an increase of $18.2 million primarily due to higher gross profit for the reasons mentioned above.5 The net leverage ratio improved to 2.3 from 2.7 in the prior quarter due to higher adjusted EBITDA and a reduction in net debt of $25.1 million as the Company decreased borrowings under its revolving credit facility.5 Cash and cash equivalents at the end of the quarter were $24.6 million and included $62.0 million drawn on the revolving credit facility. Borrowing on the revolving credit facility decreased by $78 million in the quarter as the Company utilized free cash flow and insurance proceeds to reduce the drawn amount. At current price levels and expected production, the Company anticipates the net leverage ratio to return to the Company’s target of less than 2.0 by the end of the year 2024.5
Cash provided by operating activities was $78.7 million and increased by $61.6 million due to an increase in net income adjusted for non-cash items of $32.3 million and a favorable working capital change of $29.3 million.
Capital expenditures of $50.4 million increased by $2.8 million from the prior quarter. Capital investments at the operations were as follows (i) $11.7 million at Greens Creek related to development, equipment purchases and surface projects, (ii) $12.4 million at Casa Berardi, primarily related to tailings construction activities, (iii) $10.8 million at Lucky Friday primarily related to development, pre-production drilling, and equipment purchases, and (iv) $14.5 million at Keno Hill, related to underground development, mobile equipment purchases, and camp expansion.
Free cash flow for the quarter was $28.3 million, compared to negative $30.5 million in the prior quarter.2 The improvement in free cash flow was attributable to a full quarter of Lucky Friday production and improved performance at Keno Hill which led to higher sales volumes and realized prices.
Forward Sales Contracts for Base Metals and Foreign Currency
The Company uses financially settled forward sales contracts to manage exposure to zinc and lead price changes in forecasted concentrate shipments. On June 30, 2024, the Company had contracts covering approximately 7% and 34% of the forecasted payable zinc and lead production, respectively, through 2026, at an average zinc price of $1.37 per pound and a lead price of $0.99 per pound.
The Company also manages Canadian dollar (“CAD”) exposure through forward contracts. At June 30, 2024, the Company had hedged approximately 54% of forecasted Casa Berardi and Keno Hill CAD- denominated direct production costs through 2026 at an average CAD/USD rate of 1.33. The Company has also hedged approximately 21% of Casa Berardi and Keno Hill’s projected CAD-denominated total capital expenditures through 2026 at 1.35.
OPERATIONS OVERVIEW
Greens Creek Mine – Alaska
|
Dollars are in thousands except cost per ton |
|
2Q-2024 |
|
|
1Q-2024 |
|
|
4Q-2023 |
|
|
3Q-2023 |
|
|
2Q-2023 |
|
|
YTD-2024 |
|
|
YTD-2023 |
|
|||||||
|
GREENS CREEK |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Tons of ore processed |
|
|
225,746 |
|
|
|
232,188 |
|
|
|
220,186 |
|
|
|
228,978 |
|
|
|
232,465 |
|
|
|
457,934 |
|
|
|
465,632 |
|
|
Total production cost per ton |
|
$ |
218.09 |
|
|
$ |
212.92 |
|
|
$ |
223.98 |
|
|
$ |
200.30 |
|
|
$ |
194.94 |
|
|
$ |
215.46 |
|
|
$ |
196.77 |
|
|
Ore grade milled – Silver (oz./ton) |
|
|
12.6 |
|
|
|
13.3 |
|
|
|
12.9 |
|
|
|
13.1 |
|
|
|
12.8 |
|
|
|
13.0 |
|
|
|
13.6 |
|
|
Ore grade milled – Gold (oz./ton) |
|
|
0.09 |
|
|
|
0.09 |
|
|
|
0.09 |
|
|
|
0.09 |
|
|
|
0.10 |
|
|
|
0.09 |
|
|
|
0.09 |
|
|
Ore grade milled – Lead (%) |
|
|
2.5 |
|
|
|
2.6 |
|
|
|
2.8 |
|
|
|
2.5 |
|
|
|
2.5 |
|
|
|
2.5 |
|
|
|
2.6 |
|
|
Ore grade milled – Zinc (%) |
|
|
6.2 |
|
|
|
6.3 |
|
|
|
6.5 |
|
|
|
6.5 |
|
|
|
6.5 |
|
|
|
6.2 |
|
|
|
6.2 |
|
|
Silver produced (oz.) |
|
|
2,243,551 |
|
|
|
2,478,594 |
|
|
|
2,260,027 |
|
|
|
2,343,192 |
|
|
|
2,355,674 |
|
|
|
4,722,145 |
|
|
|
5,128,533 |
|
|
Gold produced (oz.) |
|
|
14,137 |
|
|
|
14,588 |
|
|
|
14,651 |
|
|
|
15,010 |
|
|
|
16,351 |
|
|
|
28,725 |
|
|
|
31,235 |
|
|
Lead produced (tons) |
|
|
4,513 |
|
|
|
4,834 |
|
|
|
4,910 |
|
|
|
4,740 |
|
|
|
4,726 |
|
|
|
9,347 |
|
|
|
9,928 |
|
|
Zinc produced (tons) |
|
|
12,400 |
|
|
|
13,062 |
|
|
|
12,535 |
|
|
|
13,224 |
|
|
|
13,255 |
|
|
|
25,462 |
|
|
|
25,737 |
|
|
Sales |
|
|
95,659 |
|
|
$ |
97,310 |
|
|
$ |
93,543 |
|
|
$ |
96,459 |
|
|
$ |
95,891 |
|
|
$ |
192,969 |
|
|
$ |
194,502 |
|
|
Total cost of sales |
|
$ |
(56,786 |
) |
|
$ |
(69,857 |
) |
|
$ |
(70,231 |
) |
|
$ |
(60,322 |
) |
|
$ |
(63,054 |
) |
|
$ |
(126,643 |
) |
|
$ |
(129,342 |
) |
|
Gross profit |
|
$ |
38,873 |
|
|
$ |
27,453 |
|
|
$ |
23,312 |
|
|
$ |
36,137 |
|
|
$ |
32,837 |
|
|
$ |
66,326 |
|
|
$ |
65,160 |
|
|
Cash flow from operations |
|
$ |
43,276 |
|
|
$ |
28,706 |
|
|
$ |
34,576 |
|
|
$ |
36,101 |
|
|
$ |
43,302 |
|
|
$ |
71,982 |
|
|
$ |
86,648 |
|
|
Exploration |
|
$ |
2,011 |
|
|
$ |
551 |
|
|
$ |
1,324 |
|
|
$ |
4,283 |
|
|
$ |
1,760 |
|
|
$ |
2,562 |
|
|
$ |
2,208 |
|
|
Capital additions |
|
$ |
(11,704 |
) |
|
$ |
(8,827 |
) |
|
$ |
(15,996 |
) |
|
$ |
(12,060 |
) |
|
$ |
(8,828 |
) |
|
$ |
(20,531 |
) |
|
$ |
(15,486 |
) |
|
Free cash flow 2 |
|
$ |
33,583 |
|
|
$ |
20,430 |
|
|
$ |
19,904 |
|
|
$ |
28,324 |
|
|
$ |
36,234 |
|
|
$ |
54,013 |
|
|
$ |
73,370 |
|
|
Cash cost per ounce, after by-product credits 3 |
|
$ |
0.19 |
|
|
$ |
3.45 |
|
|
$ |
4.94 |
|
|
$ |
3.04 |
|
|
$ |
1.33 |
|
|
$ |
1.90 |
|
|
$ |
1.23 |
|
|
AISC per ounce, after by-product credits 4 |
|
$ |
5.40 |
|
|
$ |
7.16 |
|
|
$ |
12.00 |
|
|
$ |
8.18 |
|
|
$ |
5.34 |
|
|
$ |
6.33 |
|
|
$ |
4.51 |
|
Greens Creek produced 2.2 million ounces of silver during the quarter, a decrease of 9% compared to the prior quarter, primarily due to lower mined grades which reverted to plan. Throughput for the quarter averaged 2,481 tpd, a decline of 3% as multiple mill maintenance projects including installation of a new primary screen, relining of the grinding circuit, and concentrate thickener rake replacement, were completed during the quarter. By-product metal production was lower primarily due to lower grades.
Sales in the quarter were $95.7 million, a 2% decrease due to lower quantities of all metals sold, partially offset by higher realized prices. Lower sales volumes were also attributable to an increase in silver and zinc concentrate inventory due to the timing of shipments at quarter end. Total cost of sales decreased to $56.8 million, reflecting lower sales volumes. Cash costs and AISC per silver ounce, each after by-product credits, were $0.19 and $5.40, respectively, and decreased over the prior quarter due to lower treatment charges and higher by-product credits (higher realized prices for by-products offset lower production volumes).3,4
Cash flow from operations was $43.3 million, an increase of $14.6 million, primarily due to higher realized prices. Free cash flow for the quarter was $33.6 million, an increase of $13.2 million, as higher cash flow from operations was partially offset by planned higher capital investment during the quarter.
Lucky Friday Mine – Idaho
|
Dollars are in thousands except cost per ton |
|
2Q-2024 |
|
|
1Q-2024 |
|
|
4Q-2023 |
|
|
3Q-2023 |
|
|
2Q-2023 |
|
|
YTD-2024 |
|
|
YTD-2023 |
|
|||||||
|
LUCKY FRIDAY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Tons of ore processed |
|
|
107,441 |
|
|
|
86,234 |
|
|
|
5,164 |
|
|
|
36,619 |
|
|
|
94,043 |
|
|
|
193,675 |
|
|
|
189,346 |
|
|
Total production cost per ton |
|
$ |
233.99 |
|
|
$ |
233.10 |
|
|
$ |
201.42 |
|
|
$ |
191.81 |
|
|
$ |
248.65 |
|
|
$ |
233.59 |
|
|
$ |
229.56 |
|
|
Ore grade milled – Silver (oz./ton) |
|
|
12.9 |
|
|
|
12.9 |
|
|
|
12.7 |
|
|
|
13.6 |
|
|
|
14.3 |
|
|
|
12.9 |
|
|
|
14.1 |
|
|
Ore grade milled – Lead (%) |
|
|
8.1 |
|
|
|
8.2 |
|
|
|
8.0 |
|
|
|
8.6 |
|
|
|
9.1 |
|
|
|
8.2 |
|
|
|
9.0 |
|
|
Ore grade milled – Zinc (%) |
|
|
3.6 |
|
|
|
3.9 |
|
|
|
3.5 |
|
|
|
3.5 |
|
|
|
4.2 |
|
|
|
3.7 |
|
|
|
4.2 |
|
|
Silver produced (oz.) |
|
|
1,308,155 |
|
|
|
1,061,065 |
|
|
|
61,575 |
|
|
|
475,414 |
|
|
|
1,286,666 |
|
|
|
2,369,220 |
|
|
|
2,549,130 |
|
|
Lead produced (tons) |
|
|
8,229 |
|
|
|
6,689 |
|
|
|
372 |
|
|
|
2,957 |
|
|
|
8,180 |
|
|
|
14,918 |
|
|
|
16,214 |
|
|
Zinc produced (tons) |
|
|
3,320 |
|
|
|
2,851 |
|
|
|
134 |
|
|
|
1,159 |
|
|
|
3,338 |
|
|
|
6,171 |
|
|
|
6,651 |
|
|
Sales |
|
$ |
59,071 |
|
|
$ |
35,340 |
|
|
$ |
3,117 |
|
|
$ |
21,409 |
|
|
$ |
42,648 |
|
|
$ |
94,411 |
|
|
$ |
91,758 |
|
|
Total cost of sales |
|
$ |
(37,523 |
) |
|
$ |
(27,519 |
) |
|
$ |
(3,117 |
) |
|
$ |
(14,344 |
) |
|
$ |
(32,190 |
) |
|
$ |
(65,042 |
) |
|
$ |
(66,724 |
) |
|
Gross profit |
|
$ |
21,548 |
|
|
$ |
7,821 |
|
|
$ |
— |
|
|
$ |
7,065 |
|
|
$ |
10,458 |
|
|
$ |
29,369 |
|
|
$ |
25,034 |
|
|
Cash flow from operations |
|
$ |
44,546 |
|
|
$ |
27,112 |
|
|
$ |
(7,982 |
) |
|
$ |
515 |
|
|
$ |
18,893 |
|
|
$ |
71,658 |
|
|
$ |
65,025 |
|
|
Capital additions |
|
$ |
(10,818 |
) |
|
$ |
(14,988 |
) |
|
$ |
(18,819 |
) |
|
$ |
(15,494 |
) |
|
$ |
(16,317 |
) |
|
$ |
(25,806 |
) |
|
$ |
(31,024 |
) |
|
Free cash flow 2 |
|
$ |
33,728 |
|
|
$ |
12,124 |
|
|
$ |
(26,801 |
) |
|
$ |
(14,979 |
) |
|
$ |
2,576 |
|
|
$ |
45,852 |
|
|
$ |
34,001 |
|
|
Cash cost per ounce, after by-product credits 3 |
|
$ |
5.32 |
|
|
$ |
8.85 |
|
|
N/A |
|
|
$ |
4.74 |
|
|
$ |
6.96 |
|
|
$ |
6.67 |
|
|
$ |
5.64 |
|
|
|
AISC per ounce, after by-product credits 4 |
|
$ |
12.74 |
|
|
$ |
17.36 |
|
|
N/A |
|
|
$ |
10.63 |
|
|
$ |
14.24 |
|
|
$ |
14.50 |
|
|
$ |
12.48 |
|
|
Lucky Friday produced 1.3 million ounces of silver, the highest quarterly production since 2000 and an increase of 23% over the prior quarter, reflecting a full quarter of production. Mill throughput of 1,181 tpd also set a record in the mine’s 80-year history.
Sales in the second quarter were $59.1 million, and total cost of sales were $37.5 million, compared to $35.3 million and $27.5 million, respectively in the prior quarter, reflecting higher sales volumes and realized prices. Cash costs and AISC per silver ounce, each after by-product credits, were $5.32 and $12.74 respectively, and were lower due to higher production, but higher than guidance due to higher labor and contractor costs, and higher profit sharing (under the collective bargaining agreement) reflecting the strong performance and higher realized prices.
Cash flow from operations was $44.5 million and includes $17.8 million in insurance proceeds received during the quarter, as well as positive working capital adjustments due to ramp-up being achieved in the prior quarter.
Capital expenditures for the quarter were $10.8 million, and included capital development, mobile equipment purchases, and completion of the rehabilitation work related to the secondary egress (#2 shaft). Free cash flow for the quarter was $33.7 million, an increase of $21.6 million reflecting a full quarter of operations and the collection of $17.8 million of insurance proceeds.2 The Company’s underground insurance sublimit coverage is $50 million, of which $35.2 million has been received to date and the Company expects to receive the remaining $14.8 million in insurance proceeds before the end of the year.
Keno Hill – Yukon Territory
|
Dollars are in thousands except cost per ton |
|
2Q-2024 |
|
|
1Q-2024 |
|
|
4Q-2023 |
|
|
3Q-2023 |
|
|
2Q-2023 |
|
|
YTD-2024 |
|
|
YTD-2023 |
|
|||||||
|
KENO HILL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Tons of ore processed |
|
|
36,977 |
|
|
|
25,165 |
|
|
|
19,651 |
|
|
|
24,616 |
|
|
|
12,064 |
|
|
|
62,142 |
|
|
|
12,064 |
|
|
Total production cost per ton |
|
$ |
116.48 |
|
|
$ |
132.42 |
|
|
$ |
145.36 |
|
|
$ |
88.97 |
|
|
$ |
202.66 |
|
|
$ |
123.60 |
|
|
$ |
109.42 |
|
|
Ore grade milled – Silver (oz./ton) |
|
|
25.1 |
|
|
|
26.3 |
|
|
|
31.7 |
|
|
|
33.0 |
|
|
|
20.2 |
|
|
|
25.6 |
|
|
|
20.2 |
|
|
Ore grade milled – Lead (%) |
|
|
2.4 |
|
|
|
2.4 |
|
|
|
2.6 |
|
|
|
2.4 |
|
|
|
2.5 |
|
|
|
2.4 |
|
|
|
2.5 |
|
|
Ore grade milled – Zinc (%) |
|
|
1.4 |
|
|
|
1.3 |
|
|
|
1.6 |
|
|
|
2.5 |
|
|
|
4.1 |
|
|
|
1.4 |
|
|
|
4.1 |
|
|
Silver produced (oz.) |
|
|
900,440 |
|
|
|
646,312 |
|
|
|
608,301 |
|
|
|
710,012 |
|
|
|
184,264 |
|
|
|
1,546,752 |
|
|
|
184,264 |
|
|
Lead produced (tons) |
|
|
845 |
|
|
|
576 |
|
|
|
481 |
|
|
|
327 |
|
|
|
417 |
|
|
|
1,421 |
|
|
|
417 |
|
|
Zinc produced (tons) |
|
|
471 |
|
|
|
298 |
|
|
|
396 |
|
|
|
252 |
|
|
|
691 |
|
|
|
769 |
|
|
|
691 |
|
|
Sales |
|
$ |
28,950 |
|
|
$ |
10,847 |
|
|
$ |
17,936 |
|
|
$ |
16,001 |
|
|
$ |
1,581 |
|
|
$ |
39,797 |
|
|
$ |
1,581 |
|
|
Total cost of sales |
|
$ |
(28,950 |
) |
|
$ |
(10,847 |
) |
|
$ |
(17,936 |
) |
|
$ |
(16,001 |
) |
|
$ |
(1,581 |
) |
|
$ |
(39,797 |
) |
|
$ |
(1,581 |
) |
|
Gross profit |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
Cash flow from operations |
|
$ |
14,585 |
|
|
$ |
(13,334 |
) |
|
$ |
1,181 |
|
|
$ |
(6,200 |
) |
|
$ |
(12,900 |
) |
|
$ |
1,251 |
|
|
$ |
(19,224 |
) |
|
Exploration |
|
$ |
2,019 |
|
|
$ |
498 |
|
|
$ |
1,548 |
|
|
$ |
1,653 |
|
|
$ |
1,039 |
|
|
$ |
2,517 |
|
|
$ |
1,476 |
|
|
Capital additions |
|
$ |
(14,533 |
) |
|
$ |
(10,346 |
) |
|
$ |
(12,549 |
) |
|
$ |
(11,498 |
) |
|
$ |
(3,505 |
) |
|
$ |
(24,879 |
) |
|
$ |
(20,625 |
) |
|
Free cash flow 2 |
|
$ |
2,071 |
|
|
$ |
(23,182 |
) |
|
$ |
(9,820 |
) |
|
$ |
(16,045 |
) |
|
$ |
(15,366 |
) |
|
$ |
(21,111 |
) |
|
$ |
(38,373 |
) |
At Keno Hill, ramp-up continued and the mine produced 900,440 ounces of silver in the second quarter, a record for the operation, and an increase of 39% over the prior quarter. Throughput in the quarter averaged 406 tpd, an increase of 47%, partially offset by lower silver grades, which were 25.1 ounces per ton. Production commenced from the Flame & Moth deposit at the beginning of July and is expected to supplement ore production from the Bermingham deposit.
Sales during the quarter were $29.0 million, an increase of $18.1 million over the prior quarter due to a combination of higher realized prices and volumes. Ramp-up costs during the quarter were $1.8 million and are included in ramp-up and suspension costs on the consolidated statement of operations. Expenditures on production costs, including ramp-up costs (excluding depreciation), totaled $27.4 million for the quarter, higher than the guidance of $15-$17 million per quarter due to increased production volumes and throughput. Capital investments during the quarter were $14.5 million for underground and surface infrastructure projects including camp expansion, mine development, and mobile equipment purchases.
The Company continues to make progress on the cemented tails batch plant, a critical infrastructure project, which will facilitate a change in the mining method at the Bermingham deposit 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. Other key capital projects in progress are expansion of camp facilities, water treatment plant upgrades, and key equipment purchases.
Keno Hill’s AIFR, one of several improving measures, improved 12% to 1.98. As the Keno Hill operation moves towards full production, the Company expects sustained investment in long-term infrastructure to support sustainable and safe mining operations throughout the current reserve mine plan of eleven years. Continued focus on safety, environmental, permitting, and mining practices, and relations with First Nation of Na-Cho Nyäk Dun are key to maintaining and increasing production levels and delivering long-term value at this operation.
Casa Berardi – Quebec
|
Dollars are in thousands except cost per ton |
|
2Q-2024 |
|
|
1Q-2024 |
|
|
4Q-2023 |
|
|
3Q-2023 |
|
|
2Q-2023 |
|
|
YTD-2024 |
|
|
YTD-2023 |
|
|||||||
|
CASA BERARDI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Tons of ore processed – underground |
|
|
118,485 |
|
|
|
123,123 |
|
|
|
104,002 |
|
|
|
112,544 |
|
|
|
94,124 |
|
|
|
241,608 |
|
|
|
204,369 |
|
|
Tons of ore processed – surface pit |
|
|
248,494 |
|
|
|
258,503 |
|
|
|
251,009 |
|
|
|
231,075 |
|
|
|
224,580 |
|
|
|
506,997 |
|
|
|
543,489 |
|
|
Tons of ore processed – total |
|
|
366,979 |
|
|
|
381,626 |
|
|
|
355,011 |
|
|
|
343,619 |
|
|
|
318,704 |
|
|
|
748,605 |
|
|
|
747,858 |
|
|
Surface tons mined – ore and waste |
|
|
4,064,091 |
|
|
|
3,639,297 |
|
|
|
4,639,770 |
|
|
|
3,574,391 |
|
|
|
2,461,196 |
|
|
|
7,703,388 |
|
|
|
4,598,189 |
|
|
Total production cost per ton |
|
$ |
107.84 |
|
|
$ |
96.53 |
|
|
$ |
108.20 |
|
|
$ |
103.75 |
|
|
$ |
97.69 |
|
|
$ |
102.07 |
|
|
$ |
103.58 |
|
|
Ore grade milled – Gold (oz./ton) – underground |
|
|
0.14 |
|
|
|
0.14 |
|
|
|
0.12 |
|
|
|
0.13 |
|
|
|
0.14 |
|
|
|
0.14 |
|
|
|
0.13 |
|
|
Ore grade milled – Gold (oz./ton) – surface pit |
|
|
0.04 |
|
|
|
0.04 |
|
|
|
0.06 |
|
|
|
0.06 |
|
|
|
0.05 |
|
|
|
0.04 |
|
|
|
0.05 |
|
|
Ore grade milled – Gold (oz./ton) – combined |
|
|
0.07 |
|
|
|
0.07 |
|
|
|
0.07 |
|
|
|
0.07 |
|
|
|
0.06 |
|
|
|
0.07 |
|
|
|
0.07 |
|
|
Gold produced (oz.) – underground |
|
|
13,719 |
|
|
|
13,707 |
|
|
|
11,206 |
|
|
|
12,416 |
|
|
|
10,226 |
|
|
|
27,426 |
|
|
|
22,014 |
|
|
Gold produced (oz.) – surface pit |
|
|
9,468 |
|
|
|
8,297 |
|
|
|
11,311 |
|
|
|
11,843 |
|
|
|
8,675 |
|
|
|
17,765 |
|
|
|
21,573 |
|
|
Gold produced (oz.) – total |
|
|
23,187 |
|
|
|
22,004 |
|
|
|
22,517 |
|
|
|
24,259 |
|
|
|
18,901 |
|
|
|
45,191 |
|
|
|
43,587 |
|
|
Silver produced (oz.) – total |
|
|
6,338 |
|
|
|
6,127 |
|
|
|
5,730 |
|
|
|
5,084 |
|
|
|
5,956 |
|
|
|
12,465 |
|
|
|
11,601 |
|
|
Sales |
|
$ |
58,623 |
|
|
$ |
41,584 |
|
|
$ |
42,822 |
|
|
$ |
46,912 |
|
|
$ |
36,946 |
|
|
$ |
100,207 |
|
|
$ |
87,944 |
|
|
Total cost of sales |
|
$ |
(67,340 |
) |
|
$ |
(58,260 |
) |
|
$ |
(58,945 |
) |
|
$ |
(56,822 |
) |
|
$ |
(42,576 |
) |
|
$ |
(125,600 |
) |
|
$ |
(105,574 |
) |
|
Gross loss |
|
$ |
(8,717 |
) |
|
$ |
(16,676 |
) |
|
$ |
(16,123 |
) |
|
$ |
(9,910 |
) |
|
$ |
(5,630 |
) |
|
$ |
(25,393 |
) |
|
$ |
(17,630 |
) |
|
Cash flow from operations |
|
$ |
17,816 |
|
|
$ |
3,186 |
|
|
$ |
3,136 |
|
|
$ |
7,877 |
|
|
$ |
(8,148 |
) |
|
$ |
21,002 |
|
|
$ |
(8,832 |
) |
|
Exploration |
|
$ |
315 |
|
|
$ |
685 |
|
|
$ |
635 |
|
|
$ |
1,482 |
|
|
$ |
1,107 |
|
|
$ |
1,000 |
|
|
$ |
2,161 |
|
|
Capital additions |
|
$ |
(12,376 |
) |
|
$ |
(13,316 |
) |
|
$ |
(15,929 |
) |
|
$ |
(16,225 |
) |
|
$ |
(20,816 |
) |
|
$ |
(25,692 |
) |
|
$ |
(37,902 |
) |
|
Free cash flow 2 |
|
$ |
5,755 |
|
|
$ |
(9,445 |
) |
|
$ |
(12,158 |
) |
|
$ |
(6,866 |
) |
|
$ |
(27,857 |
) |
|
$ |
(3,690 |
) |
|
$ |
(44,573 |
) |
|
Cash cost per ounce, after by-product credits 3 |
|
$ |
1,701 |
|
|
$ |
1,669 |
|
|
$ |
1,702 |
|
|
$ |
1,475 |
|
|
$ |
1,658 |
|
|
$ |
1,685 |
|
|
$ |
1,725 |
|
|
AISC per ounce, after by-product credits 4 |
|
$ |
1,825 |
|
|
$ |
1,899 |
|
|
$ |
1,969 |
|
|
$ |
1,695 |
|
|
$ |
2,147 |
|
|
$ |
1,861 |
|
|
$ |
2,286 |
|
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
