Hecla Reports Third Quarter 2020 Results
Record adjusted EBITDA1, Lucky Friday ramp-up ahead of schedule
COEUR D’ALENE, Idaho–(BUSINESS WIRE)–Hecla Mining Company (NYSE:HL) today announced third quarter 2020 financial and operating results.
THIRD QUARTER HIGHLIGHTS
- Sales of $199.7 million, 24% more than the prior year quarter
- Silver production of 3.5 million ounces and gold production of 41,174 ounces
- Lucky Friday ramp-up ahead of schedule
- Generated $73.4 million of cash provided by operating activities and $49.7 million of free cash flow4
- Reported $98.7 million of cash and cash equivalents with $348.7 million of liquidity2
- Record adjusted EBITDA and improved net debt/adjusted EBITDA (last 12 months) of 1.7x1,3
- Increased dividend 50% and approved the payment of the first enhanced silver-linked dividend
- Increased 2020 annual silver production guidance and reduced silver cost guidance
“Because of our strong operating performance and higher prices, Hecla had record adjusted EBITDA, generated the most free cash flow in a decade and repaid our revolver in full. These accomplishments were achieved because of our workforces’ resiliency and our commitment to health and safety,” said Phillips S. Baker, Jr., President and CEO. “With the Lucky Friday ramp-up ahead of schedule, the expected improvements at Casa Berardi, and our modest planned capital expenditures, we are well positioned to further strengthen our balance sheet, increase exploration activities, and pay our enhanced dividend.”
FINANCIAL OVERVIEW
|
|
Third Quarter Ended |
|
Nine Months Ended |
|||||||||
|
HIGHLIGHTS |
2020 |
2019 |
|
2020 |
2019 |
|||||||
|
FINANCIAL DATA (000) |
|
|
|
|
|
|||||||
|
Sales |
$ |
199,703 |
$ |
161,532 |
|
|
$ |
502,983 |
|
$ |
448,321 |
|
|
Gross profit (loss) |
$ |
53,488 |
$ |
14,880 |
|
|
$ |
98,939 |
|
($ |
1,919 |
) |
|
Income (loss) applicable to common shareholders |
$ |
13,490 |
($ |
19,654 |
) |
|
($ |
17,999 |
) |
($ |
91,995 |
) |
|
Adjusted income (loss) applicable to common shareholders1 |
$ |
24,234 |
($ |
11,801 |
) |
|
$ |
10,085 |
|
($ |
66,798 |
) |
|
Adjusted EBITDA 1 |
$ |
75,701 |
$ |
69,786 |
|
|
$ |
168,531 |
|
$ |
112,503 |
|
|
Cash provided by operating activities |
$ |
73,439 |
$ |
54,896 |
|
|
$ |
115,892 |
|
$ |
63,609 |
|
|
Capital expenditures |
$ |
23,693 |
$ |
26,093 |
|
|
$ |
54,382 |
|
$ |
97,338 |
|
|
Free cash flow 4 |
$ |
49,746 |
$ |
28,803 |
|
|
$ |
61,510 |
|
($ |
33,729 |
) |
Net income applicable to common shareholders for the third quarter was $13.5 million, or $0.03 per share, compared to net loss of $19.7 million, or $0.04 per share, for the same period a year ago. The difference was mainly due to the following items:
- Improved gross profit at Greens Creek, Nevada Operations and San Sebastian, partially offset by slightly lower gross profit at Casa Berardi. Combined, our operations generated $38.6 million more gross profit.
- Higher other operating expense by $3.1 million primarily due to costs for an ongoing project to identify and implement potential operational improvements at Casa Berardi.
- Lower ramp-up and suspension-related costs by $2.2 million due to increased production and margins at Lucky Friday.
- Unrealized gains on equity investments of $4.0 million compared to losses of $0.1 million in the prior year period.
Cash provided by operating activities was $73.4 million compared to $54.9 million in the third quarter of 2019, with the increase due to higher income, adjusted for non-cash items.
Adjusted EBITDA was $75.7 million compared to $69.8 million in the third quarter of 2019.
Capital expenditures totaled $23.7 million for the third quarter 2020 compared to $26.1 million in the third quarter of 2019, with the decrease due to planned lower expenditures at the operations in 2020 with the exception of Lucky Friday, where we have been returning the mine to full production. Expenditures at the operations were $11.6 million at Casa Berardi, $5.6 million at Greens Creek, $5.5 million at Lucky Friday, $0.4 million at Hecla Nevada, and $0.2 million at San Sebastian.
Metals Prices
The average realized silver price in the third quarter 2020 was 39% higher quarter over quarter and the average realized gold price was 31% higher. The realized zinc price increased by 7%, while the realized lead price decreased by 8%. Based on the realized silver price for the quarter of $25.32 per ounce, a silver price-linked dividend of $0.005 per common share was triggered.
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
|
Silver – |
London PM Fix ($/ounce) |
$ |
24.40 |
|
|
$ |
17.02 |
|
|
$ |
19.22 |
|
|
$ |
15.83 |
|
|
|
Realized price per ounce |
$ |
25.32 |
|
|
$ |
18.18 |
|
|
$ |
19.72 |
|
|
$ |
16.21 |
|
|
Gold – |
London PM Fix ($/ounce) |
$ |
1,911 |
|
|
$ |
1,474 |
|
|
$ |
1,735 |
|
|
$ |
1,363 |
|
|
|
Realized price per ounce |
$ |
1,929 |
|
|
$ |
1,475 |
|
|
$ |
1,745 |
|
|
$ |
1,374 |
|
|
Lead – |
LME Final Cash Buyer ($/pound) |
$ |
0.85 |
|
|
$ |
0.92 |
|
|
$ |
0.81 |
|
|
$ |
0.90 |
|
|
|
Realized price per pound |
$ |
0.86 |
|
|
$ |
0.93 |
|
|
$ |
0.81 |
|
|
$ |
0.90 |
|
|
Zinc – |
LME Final Cash Buyer ($/pound) |
$ |
1.06 |
|
|
$ |
1.06 |
|
|
$ |
0.97 |
|
|
$ |
1.18 |
|
|
|
Realized price per pound |
$ |
1.04 |
|
|
$ |
0.97 |
|
|
$ |
0.94 |
|
|
$ |
1.16 |
|
OPERATIONS OVERVIEW
Overview
The following table provides the production summary on a consolidated basis for the third quarter and nine months ended September 30, 2020 and 2019:
|
|
|
Third Quarter Ended |
|
Nine Months Ended |
||||||
|
|
|
2020 |
2019 |
|
2020 |
2019 |
||||
|
PRODUCTION SUMMARY |
|
|
|
|
||||||
|
Silver – |
Ounces produced |
3,541,371 |
|
3,251,350 |
|
|
10,190,621 |
|
9,193,246 |
|
|
|
Payable ounces sold |
3,147,048 |
|
2,232,691 |
|
|
9,077,966 |
|
7,549,360 |
|
|
Gold – |
Ounces produced |
41,174 |
|
77,311 |
|
|
159,948 |
|
198,100 |
|
|
|
Payable ounces sold |
51,049 |
|
69,760 |
|
|
159,550 |
|
189,823 |
|
|
Lead – |
Tons produced |
9,750 |
|
6,107 |
|
|
24,620 |
|
17,406 |
|
|
|
Payable tons sold |
7,792 |
|
3,817 |
|
|
19,948 |
|
12,628 |
|
|
Zinc – |
Tons produced |
17,997 |
|
15,413 |
|
|
48,699 |
|
42,672 |
|
|
|
Payable tons sold |
12,892 |
|
7,878 |
|
|
34,717 |
|
27,234 |
|
The following tables provide a summary of the (i) final production; (ii) cost of sales and other direct production costs and depreciation, depletion and amortization (“cost of sales”); (iii) cash cost, after by-product credits, per silver or gold ounce; and (iv) all in sustaining costs (“AISC”), after by-product credits, per silver or gold ounce for the third quarter and nine months ended September 30, 2020, with comparisons to the prior year periods:
|
Third Quarter Ended |
|
|
Greens Creek |
Lucky Friday |
San Sebastian |
Casa Berardi |
Nevada Ops |
|||||||||||||||||||||
|
Sept 30, 2020 |
Silver |
Gold |
Silver |
Gold |
Silver |
Silver |
Gold |
Gold |
Silver |
Gold |
Silver |
|||||||||||||||||
|
Production (ounces) |
3,541,371 |
41,174 |
|
2,634,436 |
12,838 |
|
636,389 |
266,691 |
|
1,931 |
|
26,405 |
|
3,855 |
|
0 |
|
0 |
|
|||||||||
|
Increase/(decrease) over 2019 |
290,021 |
(36,137 |
) |
90,418 |
(846 |
) |
520,707 |
(274,945 |
) |
(2,768 |
) |
(10,142 |
) |
(2,782 |
) |
(22,381 |
) |
(43,377 |
) |
|||||||||
|
Cost of sales & other direct production costs and dd&a (000) |
$78,517 |
$67,698 |
|
$51,057 |
— |
|
$21,500 |
$5,960 |
|
— |
|
$53,821 |
|
— |
|
$13,877 |
|
— |
|
|||||||||
|
Increase/(decrease) over 2019 |
$21,182 |
$(21,619 |
) |
$10,582 |
— |
|
$17,482 |
$(6,882 |
) |
— |
|
$815 |
|
— |
|
$(22,434 |
) |
— |
|
|||||||||
|
Cash costs, after by-prod credits, per silver or gold ounce 5,6 |
$4.43 |
$1,398 |
|
$4.12 |
— |
|
— |
$7.53 |
|
— |
|
$1,398 |
|
— |
|
— |
|
— |
|
|||||||||
|
Increase/(decrease) over 2019 |
$2.09 |
$488 |
|
$2.07 |
— |
|
— |
$3.83 |
|
— |
|
$432 |
|
— |
|
— |
|
— |
|
|||||||||
|
AISC, after by-prod credits, per silver or gold ounce 7 |
$11.53 |
$1,855 |
|
$7.70 |
— |
|
— |
$8.87 |
|
— |
|
$1,855 |
|
— |
|
— |
|
— |
|
|||||||||
|
Increase/(decrease) over 2019 |
$2.64 |
$642 |
|
$1.65 |
— |
|
— |
$1.66 |
|
— |
|
$506 |
|
— |
|
— |
|
— |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Nine Months Ended |
|
|
Greens Creek |
Lucky Friday |
San Sebastian |
Casa Berardi |
Nevada Ops |
|||||||||||||||||||||
|
Sept 30, 2020 |
Silver |
Gold |
Silver |
Gold |
Silver |
Silver |
Gold |
Gold |
Silver |
Gold |
Silver |
|||||||||||||||||
|
Production (ounces) |
10,190,621 |
159,948 |
|
8,164,062 |
38,215 |
|
1,201,674 |
772,158 |
|
6,064 |
|
83,913 |
|
15,284 |
|
31,756 |
|
37,443 |
|
|||||||||
|
Increase/(decrease) over 2019 |
997,375 |
(38,152 |
) |
1,015,027 |
(3,054 |
) |
785,218 |
(674,292 |
) |
(5,712 |
) |
(15,703 |
) |
(5,757 |
) |
(13,683 |
) |
(122,821 |
) |
|||||||||
|
Cost of sales and other direct production costs and dd&a (000) |
$211,968 |
$192,076 |
|
$157,910 |
— |
|
$35,787 |
$18,271 |
|
— |
|
$147,728 |
|
— |
|
$44,348 |
|
— |
|
|||||||||
|
Increase/(decrease) over 2019 |
$24,244 |
$(70,440 |
) |
$17,673 |
— |
|
$24,638 |
$(18,067 |
) |
— |
|
$(9,511 |
) |
— |
|
$(60,929 |
) |
— |
|
|||||||||
|
Cash costs, after by-prod credits, per silver or gold ounce 5,6 |
$5.08 |
$1,053 |
|
$4.99 |
— |
|
— |
$5.93 |
|
— |
|
$1,181 |
|
— |
|
$716 |
|
— |
|
|||||||||
|
Increase/(decrease) over 2019 |
$2.38 |
$(36 |
) |
$3.32 |
— |
|
— |
$(1.84 |
) |
— |
|
$126 |
|
— |
|
$(449 |
) |
— |
|
|||||||||
|
AISC, after by-prod credits, per silver or gold ounce 7 |
$10.59 |
$1,299 |
|
$7.57 |
— |
|
— |
$6.76 |
|
— |
|
$1,493 |
|
— |
|
$787 |
|
— |
|
|||||||||
|
Increase/(decrease) over 2019 |
$0.89 |
$(220 |
) |
$2.29 |
— |
|
— |
$(5.38 |
) |
— |
|
$120 |
|
— |
|
$(1,054 |
) |
— |
|
|||||||||
Greens Creek Mine – Alaska
At the Greens Creek Mine, 2.6 million ounces of silver and 12,838 ounces of gold were produced, compared to 2.5 million ounces and 13,684 ounces, respectively, in the third quarter of 2019. Higher silver production was a result of slightly higher ore production and grades. The mill operated at an average of 2,340 tons per day (tpd) in the third quarter, a similar throughput as the third quarter of 2019.
The cost of sales for the third quarter was $51.1 million, and the cash cost, after by-product credits, per silver ounce, was $4.12, compared to $40.5 million and $2.05, respectively, for the third quarter of 2019.5,6 The AISC, after by-product credits, was $7.70 per silver ounce for the third quarter compared to $6.05 in the third quarter of 2019.7 The per ounce silver cash costs were higher primarily due to higher treatment costs resulting from unfavorable changes in smelter terms and COVID-19 mitigation costs. AISC was also higher due to these factors, partially offset by lower capital spending.
Lucky Friday Mine – Idaho
At the Lucky Friday Mine, 636,389 ounces of silver were produced, compared to 115,682 ounces in the third quarter of 2019. The mine has continued normal operations during the pandemic, with the ramp-up ahead of schedule. Lucky Friday, starting in the fourth quarter, will achieve full production with estimated annual production in excess of 3 million ounces of silver in 2021.
Underground testing and modification of the Remote Vein Miner (RVM) continued in Sweden, but with limitations due to COVID-19. In parallel, the Company is testing alternative mining methods to increase productivity at the mine.
Casa Berardi Mine – Quebec
At the Casa Berardi Mine, 26,405 ounces of gold were produced, including 6,800 ounces from the East Mine Crown Pillar (EMCP) pit compared to 36,547 ounces in the third quarter of 2019. The decrease is primarily due to lower mill throughput resulting from longer than planned down time of major mill maintenance activities, along with lower ore grades due to a delay in the availability of higher-grade underground stopes as a result of ground condition challenges. We anticipate ore from these higher-grade stopes to be mined and processed in the fourth quarter. The mill operated at an average of 3,138 tpd in the third quarter, a decrease of 14% over the third quarter of 2019.
The cost of sales was $53.8 million and the cash cost, after by-product credits, per gold ounce was $1,398, compared to $53.0 million and $966, respectively, in the prior year period.5,6 The increase in cash cost, after by-product credits, per gold ounce is primarily due to the lower gold production from the longer than scheduled major mill repairs and two high-grade long hole stopes being delayed in the third quarter. These same factors, partially offset by lower capital and exploration spending, resulted in AISC, after by-product credits, of $1,855 per gold ounce compared to $1,348 in the third quarter of 2019.7
San Sebastian Mine – Mexico
At the San Sebastian Mine, 266,691 ounces of silver and 1,931 ounces of gold were produced, compared to 541,636 ounces and 4,699 ounces, respectively, in the third quarter of 2019. The lower silver and gold production was expected and the result of lower ore grades. The mill operated at an average of 512 tpd, an increase of 4% over the third quarter of 2019.
The cost of sales was $6.0 million and the cash cost, after by-product credits, was $7.53 per silver ounce, compared to $12.8 million and $3.70, respectively, in the third quarter of 2019.5,6 The AISC, after by-product credits, was $8.87 per silver ounce for the third quarter compared to $7.21 in the third quarter of 2019.7 The increase in per ounce costs was primarily due to lower silver production.
Mining was completed in the third quarter and milling is expected to be completed in the fourth quarter of 2020. The Company continues to explore this highly prospective land package and will evaluate further mining based on exploration success.
Nevada Operations
At the Nevada operations, ore mined during the quarter has been stockpiled for the third-party processing expected in the fourth quarter. Gold production will not be realized until 2021. Mining of non-refractory ore is substantially complete. Mining of refractory ore is expected to continue through the remainder of 2020. Production from the processing of the refractory ore is expected to be about 5 thousand ounces of gold.
EXPLORATION
Exploration (including corporate development) expenses were $3.4 million, a decrease of $1.4 million compared to the third quarter of 2019, primarily due to decreased activity at all sites mainly related to COVID-19 precautions. Turnaround time for assay results has also been longer than normal during the year due to assay laboratory delays related to COVID-19 and increased overall sample loads.
Greens Creek – Alaska
At Greens Creek, one drill rig program was focused on the 200S Zone, approximately 750 feet south of existing mining. A second drill rig was mobilized to site in October to bring drilling at Greens Creek back to pre-pandemic levels. Strong definition drilling assay results confirmed and upgraded 200S Zone resources, including 20.2 oz/ton silver, 0.02 oz/ton gold, 6.3% zinc and 2.9% lead over 28.5 feet and 30.3 oz/ton silver, 0.03 oz/ton gold, 18.2% zinc and 9.7% lead over 8.0 feet on the upper bench structure. Drilling targeting the lower contact returned 31.6 oz/ton silver, 0.22 oz/ton gold, 1.2% zinc and 0.6% lead over 32.9 feet.
In the fourth quarter of 2020 definition drilling is planned in the Upper Plate, 9a, East Ore, West, and Northwest West ore zones with lesser amounts of pre-production drilling in the 9a and 5250 ore zones. The two drilling rigs are currently active on the East Zone and the Upper Plate Zone.
More complete drill assay highlights from Greens Creek can be found in Table A at the end of the release.
Casa Berardi – Quebec
At Casa Berardi, drilling in the East Mine focused on defining continuity and expanding mineralization in the 160 Zone Pit area and in the 148 Zone. Definition drilling in the 160 Zone targeted mineralization below the current 160 Pit shell to further define the continuity of the 160 lenses at depth. Intersections from this drilling included 0.07 oz/ton gold over 108.2 feet, 0.10 oz/ton gold over 59.7 feet, and 0.06 oz/ton gold over 138.4 feet including 0.11 oz/ton gold over 8.9 feet and expands mineralization in the 160-03 and 160-04 lenses at depth plunging to the east. Exploration drilling in the East Mine occurred in the 148 Zone from underground targeting the down-plunge trend of the known high-grade mineralization. Intersections include 0.67 oz/ton gold over 9.8 feet located 98 feet below the currently defined 148-01 lens limit at the contact of the Casa Berardi Fault. Exploration drilling in the 159 Zone located just south of the 160 Zone Pit area intersected a narrow high-grade vein containing 0.41 oz/ton gold over 5.6 feet including 0.84 oz/ton gold over 2.6 feet. This vein is open for expansion to the east and at depth.
In the West Mine area, definition and exploration drilling focused on defining and expanding mineralization in the Upper 123 Zone from the 350 level, the Lower 123 Zone from the 1070 level, and the 128 Zone from the 490 level. Recent high-grade intersections from the Upper 123 Zone indicate the 123-01 lens is open for expansion up dip and include 0.91 oz/ton gold over 9.2 feet, 0.63 oz/t gold over 9.6 feet, and 0.51 oz/ton gold over 9.8 feet. Drilling in the 128 Zone identifies that two additional lenses, one to the north and one to the south of the 128-01 lens. Intersections include 0.91 oz/ton gold over 1.0 feet and 0.12 oz/ton gold over 17.7 feet including 0.23 oz/ton gold over 3.3 feet and 0.31 oz/ton gold over 3.9 feet. These initial results indicate mineralization is open at depth for expansion.
In the fourth quarter of 2020, underground drilling will focus on refining and expanding resources in the 123, 124, and 128 zones in the West Mine and the 148, 159, and 160 zones in the East Mine.
More complete drill assay highlights from Casa Berardi can be found in Table A at the end of the release.
San Sebastian – Mexico
At San Sebastian two core rigs operated throughout the quarter, one at the newly discovered El Bronco Vein and one at the newly discovered El Tigre Vein. The El Bronco Vein was discovered late in the second quarter and the El Tigre Vein was discovered early in the third quarter of this year as a result of short vertical reverse circulation (SVRC) drilling in areas with thick soil cover. These two new blind vein discoveries represent strong new structures to explore for zones of high-grade mineralization and continue to demonstrate the excellent prospectivity of the San Sebastian District and the effectiveness of SVRC drilling to discover new veins under cover.
Early drilling at the El Bronco Vein produced positive results with a recent drillhole returning: 0.29 oz/ton gold, 20.7 oz/ton silver over 4.2 feet (true width). Follow-up offset drilling of this intercept is currently in progress. The El Tigre Vein is a strong vein structure with an average true width in the first seven holes of 12.8 feet. Step-out drilling at both the El Bronco and El Tigre veins on approximately 300-foot centers is in progress and scheduled to continue into the fourth quarter of 2020 and into 2021.
More complete drill assay highlights from San Sebastian can be found in Table A at the end of the release.
Midas – Nevada
At Midas, four core rigs operated in September and will continue drilling into late November testing high-priority targets. Detailed mapping and sampling, geology modeling, alteration mineral speciation, and CSAMT geophysics during the first two quarters of 2020 defined numerous high-priority drilling targets at Midas including the Green Racer Sinter, Elko Prince, North Block, Southern Cross, SV1, Jackknife Ridge, and G3 target areas. Targets were prioritized based on anomalous gold, silver, and pathfinder elements, strong alteration associated with a boiling hydrothermal system at depth, and structural preparation. Because they were outside the Plan of Operations, many of these targets have never been drill tested or limited previous drilling did not adequately test the target. Initial drill testing of these targets began late in the third quarter beginning with the Green Racer Sinter, North Block, Southern Cross, and SV1 targets. Assay results are pending for drilling completed to date.
2020 ESTIMATES 8
|
2020 Production Outlook |
||||||||
|
|
Silver Production |
Gold Production |
Silver Equivalent |
Gold Equivalent |
||||
|
|
Current |
Prior |
Current |
Prior |
Current |
Prior |
Current |
Prior |
|
Greens Creek* |
10.2-10.5 |
10-10.3 |
47-48 |
47-48 |
23.5-24.0 |
21.5-22.1 |
263.5-268 |
240-246 |
|
Lucky Friday* |
1.8-2.0 |
1.6-1.8 |
N/A |
N/A |
4.0 |
3.2-3.6 |
43-45.5 |
35-40 |
|
San Sebastian |
0.8-0.9 |
0.8-0.9 |
6-7 |
6 |
1.5 |
14-1.7 |
15-17 |
16-19 |
|
Casa Berardi |
N/A |
N/A |
115-120 |
114-124 |
10.5-11.0 |
12.1-12.6 |
115-121 |
135-140 |
|
Nevada Operations |
N/A |
N/A |
32 |
32 |
2.9 |
2.9 |
32 |
32 |
|
Total |
12.8-13.4 |
12.4-13.0 |
200-207 |
199-210 |
42.8-43.4 |
40.4-42.6 |
468.5-482.5 |
458-477 |
|
* Equivalent ounces include lead and zinc production. |
||||||||
|
2020 Cost Outlook |
||||||
|
|
Costs of Sales (million) |
Cash cost, after by-product credits, per silver/gold ounce5,6,9 |
AISC, after by-product credits, per silver/gold ounce7,9 |
|||
|
|
Current |
Prior |
Current |
Prior |
Current |
Prior |
|
Greens Creek |
$215 |
$205 |
$5.25-$5.50 |
$6.00-$6.75 |
$8.75-$9.00 |
$9.50-$10.00 |
|
Lucky Friday** |
$56 |
$14 |
$8.25-$9.00 |
$9.50-$10.25 |
$12.75-$13.75 |
$14.00-$15.00 |
|
San Sebastian |
$25 |
$25 |
$6.00-$6.75 |
$6.25-$8.50 |
$8.75-$9.50 |
$8.00-$10.75 |
|
Total Silver |
$296 |
$244 |
$5.50-$6.25 |
$6.50-$7.00 |
$11.75-$12.25 |
$12.25-$13.25 |
|
Casa Berardi |
$200 |
$185 |
$1,075-$1,125 |
$900-$975 |
$1,425-$1,500 |
$1,225-$1,275 |
|
Nevada Operations |
$46 |
$39 |
$725-$750 |
$825-$1,000 |
$800-$825 |
$850-$1,050 |
|
Total Gold |
$246 |
$224 |
$1,025-$1,100 |
$900-$975 |
$1,300-$1,350 |
$1,150-$1,250 |
|
** Prior cost of sales guidance was only during the period of full production, while current cost of sales guidance is during the entire year. Lucky Friday cash costs and AISC, after by-product credits, per silver ounce are calculated using only Fourth Quarter 2020 production and cost estimates. |
||||||
|
2020 Capital and Exploration Outlook |
||
|
(in millions) |
Current |
Prior |
|
2020E Capital expenditures |
$100 |
$90 |
|
2020E Exploration expenditures (includes Corporate Development) |
$16 |
$11 |
|
2020E Pre-development expenditures |
$2.5 |
$2.2 |
DIVIDENDS
Common
The Board of Directors declared a quarterly cash dividend of $0.00875 per share of common stock, consisting of $0.005 per share for the silver price-linked component and $0.00375 for the base annual dividend component. The common dividend is payable on or about December 1, 2020, to stockholders of record on November 18, 2020. The realized silver price was $25.32 in the third quarter and, therefore, satisfied the recently amended criteria for a larger silver linked dividend under the Company’s dividend policy.
Preferred
The Board of Directors also declared the regular quarterly dividend of $0.875 per share on the 157,816 outstanding shares of Series B Cumulative Convertible Preferred Stock. This represents a total amount to be paid of approximately $138,000. The cash dividend is payable on or about January 4, 2021 to shareholders of record on December 15, 2020.
CONFERENCE CALL AND WEBCAST
A conference call and webcast will be held Monday, November 9, at 10:00 a.m. Eastern Time to discuss these results. We recommend that you dial in at least 10 minutes before the call is due to commence. You may join the conference call by dialing toll-free 1-833-350-1380 or for international dialing 1-647-689-6934. The Participant Code is 6996406 and must be provided when dialing in. Hecla’s live and archived webcast can be accessed at www.hecla-mining.com under Investors.
ABOUT HECLA
Founded in 1891, Hecla Mining Company (NYSE:HL) is a leading low-cost U.S. silver producer with operating mines in Alaska, Idaho, and Mexico and is a gold producer with operating mines in Quebec, Canada and Nevada. The Company also has exploration and pre-development properties in seven world-class silver and gold mining districts in the U.S., Canada and Mexico, and an exploration office and investments in early-stage silver exploration projects in Canada.
NOTES
Non-GAAP Financial Measures
Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by generally accepted accounting principles in the United States (GAAP). These measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.
(1) Adjusted EBITDA and adjusted net income are non-GAAP measurements, reconciliations of which to net income (loss), the most comparable GAAP measure, can be found at the end of the release. Adjusted EBITDA and adjusted net income are measures used by management to evaluate the Company’s operating performance but should not be considered an alternative to net income (loss), or cash provided by (used in) operating activities as those terms are defined by GAAP, and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. In addition, the Company may use it when formulating performance goals and targets under its incentive program.
(2) Liquidity of $348.7 million calculated as $250.0 million in available credit facility plus $98.7 million in cash equivalents at September 30, 2020.
(3) Net debt to adjusted EBITDA is a non-GAAP measurement, a reconciliation of which to debt and net income (loss), the most comparable GAAP measurements, can be found at the end of the release.
Contacts
Russell Lawlar
Treasurer
Jeanne DuPont
Corporate Communications Coordinator
800-HECLA91 (800-432-5291)
Investor Relations
Email: [email protected]
Website: www.hecla-mining.com
