Hecla Reports Fourth Quarter and Full-Year 2022 Results
10% silver production growth in 2022; Expect 18% growth in 2023 and 35% by 2025; Silver cost guidance achieved with 2023 set at similar levels
COEUR D’ALENE, Idaho–(BUSINESS WIRE)–Hecla Mining Company (NYSE:HL) today announced fourth quarter and full-year 2022 financial and operating results.
ANNUAL HIGHLIGHTS
Strategic
- Completed the acquisition of Alexco Resource Corp., adding nearly 50 million ounces of silver reserves; highest-grade and largest primary silver reserves in Canada.
Operational
- Record silver reserves of 241 million ounces, gold reserves of 2.6 million ounces.
- Produced 14.2 million ounces of silver, Hecla’s second highest, and 175,807 ounces of gold.
- Record lead production of 49 thousand tons and zinc production of 65 thousand tons.
- Achieved silver cost guidance with total silver cost of sales of $349.3 million and all-in sustaining cost after by-product credits (“AISC”) of $11.25 per silver ounce.4
- Increased Lucky Friday silver production by 24% to 4.4 million ounces using the Underhand Closed Bench (UCB) mining method.
- Achieved record mill throughput milestones at all three operations.
Financial
- Reported sales of $718.9 million with almost 70% from Greens Creek and Lucky Friday.
- Net loss applicable to common stockholders of $37.9 million or $0.07 per share, and adjusted net income of $27.8 million or $0.05 per share.5
- Adjusted EBITDA of $217.5 million, net debt to adjusted EBITDA ratio of 1.9.1
- Strong balance sheet with $104.7 million in cash and cash equivalents with approximately $245 million in available liquidity.
- Dividends of $12.9 million, or 14% of cash flow from operations.
Environmental, Social, Governance
- Strong safety performance with an All-Injury Frequency Rate of 1.22, which equals prior Company record and is 42% below the U.S. average.
- The San Sebastian mine received the 2022 Environmental and Sustainability Excellence Award given by AEMA.
- Lucky Friday received the SME Murray Innovation Award for 2023 for the pioneering UCB mining method.
- Ratified a 6-year contract agreement with the Union at the Lucky Friday.
“Hecla is the world’s fastest growing established silver company,” said Phillips S. Baker Jr., President and CEO. “This growth has been built on the strong foundation of Greens Creek, the United States’ largest silver mine, and the Lucky Friday, a mine in production for 80 years whose throughput this year was the most in its history. Added to these growing mines is Keno Hill, one of the world’s highest grade silver mines, which we expect to be in production in the second half of this year.”
Baker continued, “In 2022, we achieved our largest silver reserves and second highest silver production in our history, and expect to set new records in 2023 and 2024. If our growth continues as expected, Hecla would produce not only 40% of all the silver mined in the US, but also 40% of all silver mined in Canada. In 2022, we had among the best silver margins in the industry with AISC a little more than half of our realized silver price allowing us to maintain a strong balance sheet even after significant investment in the Lucky Friday and Keno Hill. We expect silver AISC in 2023 to be about the same as 2022 despite inflationary pressures and increased investment in all our mines. With our largest silver reserves, our growing production in Canada and the US, and strong silver margins, we believe our shareholders are well-positioned for higher silver prices as the transition to renewables increases the need for silver as an energy metal.”
FINANCIAL OVERVIEW
In the following table and throughout this release, “total cost of sales” is comprised of cost of sales and other direct production costs and depreciation, depletion and amortization.
|
In Thousands unless stated otherwise |
|
4Q-2022 |
|
|
3Q-2022 |
|
|
2Q-2022 |
|
|
1Q-2022 |
|
|
4Q-2021 |
|
|
FY 2022 |
|
|
FY 2021 |
|
|||||||
|
FINANCIAL AND PRODUCTION SUMMARY |
|
|||||||||||||||||||||||||||
|
Sales |
|
$ |
194,825 |
|
|
$ |
146,339 |
|
|
$ |
191,242 |
|
|
$ |
186,499 |
|
|
$ |
185,078 |
|
|
$ |
718,905 |
|
|
$ |
807,473 |
|
|
Total cost of sales |
|
$ |
169,807 |
|
|
$ |
137,892 |
|
|
$ |
153,979 |
|
|
$ |
141,070 |
|
|
$ |
131,837 |
|
|
$ |
602,749 |
|
|
$ |
589,672 |
|
|
Gross profit |
|
$ |
25,018 |
|
|
$ |
8,447 |
|
|
$ |
37,263 |
|
|
$ |
45,429 |
|
|
$ |
53,241 |
|
|
$ |
116,156 |
|
|
$ |
217,801 |
|
|
Income (loss) applicable to common stockholders |
|
$ |
(4,590 |
) |
|
$ |
(23,664 |
) |
|
$ |
(13,661 |
) |
|
$ |
4,015 |
|
|
$ |
11,737 |
|
|
$ |
(37,900 |
) |
|
$ |
34,543 |
|
|
Basic income (loss) per common share (in dollars) |
|
$ |
(0.01 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.03 |
) |
|
$ |
0.01 |
|
|
$ |
0.02 |
|
|
$ |
(0.07 |
) |
|
$ |
0.06 |
|
|
Adjusted EBITDA1 |
|
$ |
62,261 |
|
|
$ |
26,554 |
|
|
$ |
70,474 |
|
|
$ |
58,202 |
|
|
$ |
58,249 |
|
|
$ |
217,492 |
|
|
$ |
278,780 |
|
|
Net Debt to Adjusted EBITDA1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.9 |
|
|
|
1.1 |
|
|||||
|
Cash provided by operating activities |
|
$ |
36,120 |
|
|
$ |
(24,322 |
) |
|
$ |
40,183 |
|
|
$ |
37,909 |
|
|
$ |
53,355 |
|
|
$ |
89,890 |
|
|
$ |
220,337 |
|
|
Capital Expenditures |
|
$ |
(56,140 |
) |
|
$ |
(37,430 |
) |
|
$ |
(34,329 |
) |
|
$ |
(21,478 |
) |
|
$ |
(28,838 |
) |
|
$ |
(149,378 |
) |
|
$ |
(109,048 |
) |
|
Free Cash Flow2 |
|
$ |
(20,020 |
) |
|
$ |
(61,752 |
) |
|
$ |
5,854 |
|
|
$ |
16,431 |
|
|
$ |
24,517 |
|
|
$ |
(59,488 |
) |
|
$ |
111,289 |
|
|
Silver ounces produced |
|
|
3,663,433 |
|
|
|
3,549,392 |
|
|
|
3,645,454 |
|
|
|
3,324,708 |
|
|
|
3,226,927 |
|
|
|
14,182,987 |
|
|
|
12,887,240 |
|
|
Silver payable ounces sold |
|
|
3,756,701 |
|
|
|
2,479,724 |
|
|
|
3,387,909 |
|
|
|
2,687,261 |
|
|
|
2,606,622 |
|
|
|
12,311,595 |
|
|
|
11,633,802 |
|
|
Gold ounces produced |
|
|
43,634 |
|
|
|
44,747 |
|
|
|
45,719 |
|
|
|
41,707 |
|
|
|
47,977 |
|
|
|
175,807 |
|
|
|
201,327 |
|
|
Gold payable ounces sold |
|
|
40,097 |
|
|
|
40,443 |
|
|
|
44,225 |
|
|
|
41,053 |
|
|
|
44,156 |
|
|
|
165,818 |
|
|
|
201,610 |
|
|
Cash Costs and AISC, each after by-product credits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Silver cash costs per ounce3 |
|
$ |
4.79 |
|
|
$ |
3.43 |
|
|
$ |
(1.14 |
) |
|
$ |
1.09 |
|
|
$ |
1.69 |
|
|
$ |
2.06 |
|
|
$ |
1.37 |
|
|
Silver AISC per ounce4 |
|
$ |
14.36 |
|
|
$ |
14.20 |
|
|
$ |
8.55 |
|
|
$ |
7.64 |
|
|
$ |
10.08 |
|
|
$ |
11.25 |
|
|
$ |
9.19 |
|
|
Gold cash costs per ounce3 |
|
$ |
1,696 |
|
|
$ |
1,349 |
|
|
$ |
1,371 |
|
|
$ |
1,516 |
|
|
$ |
1,143 |
|
|
$ |
1,478 |
|
|
$ |
1,127 |
|
|
Gold AISC per ounce4 |
|
$ |
2,132 |
|
|
$ |
1,738 |
|
|
$ |
1,641 |
|
|
$ |
1,810 |
|
|
$ |
1,494 |
|
|
$ |
1,825 |
|
|
$ |
1,374 |
|
|
Realized Prices |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Silver, $/ounce |
|
$ |
22.03 |
|
|
$ |
18.30 |
|
|
$ |
20.68 |
|
|
$ |
24.68 |
|
|
$ |
23.49 |
|
|
$ |
21.53 |
|
|
$ |
25.24 |
|
|
Gold, $/ounce |
|
$ |
1,757 |
|
|
$ |
1,713 |
|
|
$ |
1,855 |
|
|
$ |
1,880 |
|
|
$ |
1,802 |
|
|
$ |
1,803 |
|
|
$ |
1,796 |
|
|
Lead, $/pound |
|
$ |
1.05 |
|
|
$ |
0.95 |
|
|
$ |
0.97 |
|
|
$ |
1.08 |
|
|
$ |
1.13 |
|
|
$ |
1.01 |
|
|
$ |
1.03 |
|
|
Zinc, $/pound |
|
$ |
1.24 |
|
|
$ |
1.23 |
|
|
$ |
1.44 |
|
|
$ |
1.79 |
|
|
$ |
1.74 |
|
|
$ |
1.41 |
|
|
$ |
1.44 |
|
Loss applicable to common stockholders decreased to $4.6 million in the fourth quarter 2022 from $23.7 million in the third quarter due to:
- Increased gross profit of $16.6 million due to higher revenues arising from deferred silver concentrate shipments from Greens Creek and Lucky Friday to the fourth quarter, higher realized prices and production partially offset by higher cost of sales.
- Exploration and pre-development expense decreased by $8.2 million due to the completion of seasonal exploration programs in the prior quarter.
The above items were partially offset by:
- Increase in general and administrative expenses of $3.4 million due to higher incentive compensation accruals and a full quarter of additional staffing as a result of the Alexco acquisition.
- Increase of $2.9 million in provision for closed operations reflecting updated costs for Troy mine reclamation.
- Higher ramp-up and suspension costs of $2.5 million related to the Keno Hill ramp-up.
Consolidated silver cost of sales in 2022 increased 12% to $349.3 million from the prior year due to higher labor costs including contractor costs, and inflationary pressures for fuel, consumables, ground support and other inputs. Cash costs and AISC per silver ounce, each after by-product credits, were $2.06 and $11.25, respectively.3,4 The increase in cash costs and AISC per silver ounce was due to higher cost of sales, and increased sustaining capital, partially offset by higher by-product credits due to higher by-products and silver production.3,4
Consolidated gold cost of sales decreased by 9% to $253.0 million primarily due to Nevada operations were being on care and maintenance. Cash costs and AISC per gold ounce, each after by-product credits, were $1,478 and $1,825, respectively.3,4 The increase in total cash costs was due to higher labor, contractor costs, and inflation in diesel, reagents, and other key inputs as well as lower gold production with AISC also impacted by higher sustaining capital.
Loss applicable to common stockholders was $37.9 million in 2022 compared to net income of $34.5 million in 2021 with decrease in profitability attributable to:
- Lower sales of $88.6 million due to lower gold production and lower metal prices for silver, lead, and zinc, partially offset by higher silver, lead and zinc production.
- Lower gross profit due to lower sales and higher production costs.
- Higher general and administrative expenses of $8.8 million due to higher incentive compensation accruals, compensation increases effective July 1, and additional staffing as a result of the Alexco acquisition.
- A decrease in income tax benefit of $22.0 million
The above items were partially offset by:
- Decrease in exploration and pre-development expense of $1.9 million.
- Fair value adjustments that resulted in a loss of $4.7 million in 2022 compared to a loss of $35.8 million in 2021 as result of lower realized and unrealized losses on derivatives and investments.
- Decrease in provision for closed operations and environmental matters of $5.8 million.
Adjusted EBITDA for the year was $217.5 million and decreased by $61.3 million over the prior year primarily due to lower revenues and higher production costs amidst inflationary pressures. The ratio of Net debt to adjusted EBITDA increased to 1.9 due to lower Adjusted EBITDA and use of cash as the Company invested in development of the Keno Hill mine.1
Cash provided by operating activities was $89.9 million for 2022 and decreased $130.5 million year over year due to lower net income and unfavorable working capital changes. When compared to the third quarter, cash provided by operating activities increased by $60.4 million due to increased gross margin and monetization of zinc hedges.
Capital expenditures, net of leases, totaled $149.4 million in 2022 compared to $109.0 million in 2021. The increase was due to higher capital spend at Lucky Friday, as the Company invested in the infrastructure necessary to increase throughput, sustaining expenditures at Greens Creek, and development capital at the Keno Hill partially offset by lower spend at Casa Berardi. Fourth quarter capital expenditures totaled $56.1 million, including $12.2 million at Greens Creek, $13.0 million at Casa Berardi, $13.7 million at Lucky Friday, and $16.1 million at Keno Hill.
Free cash flow for the year was negative $59.5 million, a decrease of $170.8 million over the prior year due to lower revenues, higher production costs, higher capital spend at Lucky Friday and Greens Creek, and investment in the Keno Hill development. Free cash flow for the fourth quarter was negative $20.0 million and increased by $41.7 million over the prior quarter primarily due to higher cash flow from operations partially offset by higher capital spend.2
Forward Sales Contracts for Base Metals and Foreign Currency
The Company uses financially settled forward sales contracts to manage exposures to changes in prices of zinc and lead. At December 31, 2022, the Company had contracts covering approximately 36% of the forecasted payable zinc production for 2023 at an average price of $1.34 per pound, and 40% of the forecasted payable lead production (through 2024) at an average price of $0.99 per pound. In the fourth quarter, the Company monetized zinc hedges for cash proceeds of approximately $17.0 million.
The Company also manages CAD exposure through forward contracts. At December 31, 2022, the Company had hedged approximately 46% of forecasted CAD direct production costs for Casa Berardi through 2026 at an average CAD/USD rate of 1.31. The Company has also hedged approximately 34% of capital costs for Casa Berardi for 2023 at 1.33. At Keno Hill, 74% of the planned spend for 2023 is hedged at an average CAD/USD rate of 1.38.
OPERATIONS OVERVIEW
Greens Creek Mine – Alaska
|
Dollars are in thousands except cost per ton |
|
4Q-2022 |
|
|
3Q-2022 |
|
|
2Q-2022 |
|
|
1Q-2022 |
|
|
4Q-2021 |
|
|
FY 2022 |
|
|
FY 2021 |
|
|||||||
|
GREENS CREEK |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Tons of ore processed |
|
|
230,225 |
|
|
|
229,975 |
|
|
|
209,558 |
|
|
|
211,687 |
|
|
|
221,814 |
|
|
|
881,445 |
|
|
|
841,967 |
|
|
Total production cost per ton |
|
$ |
211.29 |
|
|
$ |
185.34 |
|
|
$ |
197.84 |
|
|
$ |
192.16 |
|
|
$ |
174.55 |
|
|
$ |
196.73 |
|
|
$ |
177.30 |
|
|
Ore grade milled – Silver (oz./ton) |
|
|
13.1 |
|
|
|
13.6 |
|
|
|
14.0 |
|
|
|
13.8 |
|
|
|
12.6 |
|
|
|
13.6 |
|
|
|
13.5 |
|
|
Ore grade milled – Gold (oz./ton) |
|
|
0.08 |
|
|
|
0.07 |
|
|
|
0.08 |
|
|
|
0.07 |
|
|
|
0.07 |
|
|
|
0.08 |
|
|
|
0.08 |
|
|
Ore grade milled – Lead (%) |
|
|
2.6 |
|
|
|
2.4 |
|
|
|
3.0 |
|
|
|
2.8 |
|
|
|
2.6 |
|
|
|
2.7 |
|
|
|
2.9 |
|
|
Ore grade milled – Zinc (%) |
|
|
6.7 |
|
|
|
6.3 |
|
|
|
7.2 |
|
|
|
6.6 |
|
|
|
6.3 |
|
|
|
6.7 |
|
|
|
7.1 |
|
|
Silver produced (oz.) |
|
|
2,433,275 |
|
|
|
2,468,280 |
|
|
|
2,410,598 |
|
|
|
2,429,782 |
|
|
|
2,262,635 |
|
|
|
9,741,935 |
|
|
|
9,243,222 |
|
|
Gold produced (oz.) |
|
|
12,989 |
|
|
|
11,412 |
|
|
|
12,413 |
|
|
|
11,402 |
|
|
|
10,229 |
|
|
|
48,216 |
|
|
|
46,088 |
|
|
Lead produced (tons) |
|
|
4,985 |
|
|
|
4,428 |
|
|
|
5,184 |
|
|
|
4,883 |
|
|
|
4,731 |
|
|
|
19,480 |
|
|
|
19,873 |
|
|
Zinc produced (tons) |
|
|
13,842 |
|
|
|
12,580 |
|
|
|
13,396 |
|
|
|
12,494 |
|
|
|
12,457 |
|
|
|
52,312 |
|
|
|
53,648 |
|
|
Sales |
|
$ |
95,374 |
|
|
$ |
60,875 |
|
|
$ |
92,723 |
|
|
$ |
86,090 |
|
|
$ |
87,865 |
|
|
$ |
335,062 |
|
|
$ |
384,843 |
|
|
Total cost of sales |
|
$ |
(70,075 |
) |
|
$ |
(52,502 |
) |
|
$ |
(60,506 |
) |
|
$ |
(49,636 |
) |
|
$ |
(49,251 |
) |
|
$ |
(232,718 |
) |
|
$ |
(213,113 |
) |
|
Gross profit |
|
$ |
25,299 |
|
|
$ |
8,373 |
|
|
$ |
32,217 |
|
|
$ |
36,453 |
|
|
$ |
38,614 |
|
|
$ |
102,344 |
|
|
$ |
171,730 |
|
|
Cash flow from operations |
|
$ |
44,769 |
|
|
$ |
7,749 |
|
|
$ |
41,808 |
|
|
$ |
56,295 |
|
|
$ |
50,632 |
|
|
$ |
150,621 |
|
|
$ |
208,715 |
|
|
Exploration |
|
$ |
1,050 |
|
|
$ |
3,776 |
|
|
$ |
929 |
|
|
$ |
165 |
|
|
$ |
696 |
|
|
$ |
5,920 |
|
|
$ |
4,591 |
|
|
Capital additions |
|
$ |
(12,150 |
) |
|
$ |
(6,988 |
) |
|
$ |
(14,668 |
) |
|
$ |
(3,092 |
) |
|
$ |
(9,544 |
) |
|
$ |
(36,898 |
) |
|
$ |
(23,883 |
) |
|
Free cash flow2 |
|
$ |
33,669 |
|
|
$ |
4,537 |
|
|
$ |
28,069 |
|
|
$ |
53,368 |
|
|
$ |
41,784 |
|
|
$ |
119,643 |
|
|
$ |
189,423 |
|
|
Cash cost per ounce, after by-product credits3 |
|
$ |
4.26 |
|
|
$ |
2.65 |
|
|
$ |
(3.29 |
) |
|
$ |
(0.90 |
) |
|
$ |
0.50 |
|
|
$ |
0.70 |
|
|
$ |
(0.65 |
) |
|
AISC per ounce, after by-product credits4 |
|
$ |
9.04 |
|
|
$ |
8.61 |
|
|
$ |
3.48 |
|
|
$ |
1.90 |
|
|
$ |
5.66 |
|
|
$ |
5.77 |
|
|
$ |
3.19 |
|
Greens Creek produced 9.7 million ounces of silver in 2022, an increase of 5% over the prior year achieving record mill throughput.
Fourth quarter sales were $95.4 million, and increased $34.5 million over the third quarter due to higher realized prices, increased by-product production and the favorable impact of a deferred silver concentrate shipment from the third quarter resulting in higher metals sold. Cost of sales for the quarter were $70.1 million, an increase of $17.6 million over the prior quarter with the increase attributable to higher costs related to higher volumes of metals sold and higher fuel and consumables costs. Cash costs and AISC per silver ounce, each after by-product credits, were $4.26 and $9.04 and increased quarter over quarter due to higher treatment and freight costs due to higher concentrate quantities shipped, and higher costs related to fuel and consumables as the mill achieved record throughput.3,4 Cash flow from operations increased by $37.0 million over the prior quarter due to increased sales and lower exploration spend partially offset by higher costs. Free cash flow for the fourth quarter was $33.7 million, an increase of $29.1 million over the prior quarter due to higher cash flow from operations partially offset by higher capital spend.2
2022 sales were $335.1 million, a decrease of $49.8 million compared to 2021 due to lower realized silver prices partially offset by higher silver and gold production. Cost of sales increased to $232.7 million compared to $213.1 million in 2021 due to higher labor and contractor costs due to record tons mined, inflationary pressures for fuel, reagents and other inputs, and higher volumes of consumables as the mill achieved record throughput in 2022. Cash costs and AISC per silver ounce (each after by-product credits) were $0.70 and $5.77, respectively, increasing year over year due to the reasons outlined above, partially offset by higher by-product credits.3,4 The increase in AISC was also impacted by higher exploration and sustaining capital spend during the year. Cash flow from operations for the year was $150.6 million, and decreased by $58.1 million over the prior year due to lower revenues and higher production costs. Free cash flow generation for the year was $119.6 million and declined by $69.8 million over the prior year due to lower cash flow from operations and higher planned capital spend.2
Lucky Friday Mine – Idaho
|
Dollars are in thousands except cost per ton |
|
4Q-2022 |
|
|
3Q-2022 |
|
|
2Q-2022 |
|
|
1Q-2022 |
|
|
4Q-2021 |
|
|
FY 2022 |
|
|
FY 2021 |
|
|||||||
|
LUCKY FRIDAY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Tons of ore processed |
|
|
90,935 |
|
|
|
90,749 |
|
|
|
97,497 |
|
|
|
77,725 |
|
|
|
80,097 |
|
|
|
356,907 |
|
|
|
321,837 |
|
|
Total production cost per ton |
|
$ |
232.73 |
|
|
$ |
207.10 |
|
|
$ |
211.45 |
|
|
$ |
247.17 |
|
|
$ |
198.83 |
|
|
$ |
223.55 |
|
|
$ |
191.50 |
|
|
Ore grade milled – Silver (oz./ton) |
|
|
14.0 |
|
|
|
12.5 |
|
|
|
13.2 |
|
|
|
12.0 |
|
|
|
12.5 |
|
|
|
13.0 |
|
|
|
11.6 |
|
|
Ore grade milled – Lead (%) |
|
|
9.1 |
|
|
|
8.5 |
|
|
|
8.8 |
|
|
|
8.2 |
|
|
|
8.1 |
|
|
|
8.7 |
|
|
|
7.6 |
|
|
Ore grade milled – Zinc (%) |
|
|
4.1 |
|
|
|
4.2 |
|
|
|
3.9 |
|
|
|
3.6 |
|
|
|
3.3 |
|
|
|
3.9 |
|
|
|
3.4 |
|
|
Silver produced (oz.) |
|
|
1,224,199 |
|
|
|
1,074,230 |
|
|
|
1,226,477 |
|
|
|
887,858 |
|
|
|
955,401 |
|
|
|
4,412,764 |
|
|
|
3,564,128 |
|
|
Lead produced (tons) |
|
|
7,934 |
|
|
|
7,172 |
|
|
|
8,147 |
|
|
|
5,980 |
|
|
|
6,131 |
|
|
|
29,233 |
|
|
|
23,137 |
|
|
Zinc produced (tons) |
|
|
3,335 |
|
|
|
3,279 |
|
|
|
3,370 |
|
|
|
2,452 |
|
|
|
2,296 |
|
|
|
12,436 |
|
|
|
9,969 |
|
|
Sales |
|
$ |
45,434 |
|
|
$ |
28,460 |
|
|
$ |
35,880 |
|
|
$ |
38,040 |
|
|
$ |
32,938 |
|
|
$ |
147,814 |
|
|
$ |
131,488 |
|
|
Total cost of sales |
|
$ |
(32,819 |
) |
|
$ |
(24,166 |
) |
|
$ |
(30,348 |
) |
|
$ |
(29,265 |
) |
|
$ |
(23,252 |
) |
|
$ |
(116,598 |
) |
|
$ |
(97,538 |
) |
|
Gross profit |
|
$ |
12,615 |
|
|
$ |
4,294 |
|
|
$ |
5,532 |
|
|
$ |
8,775 |
|
|
$ |
9,686 |
|
|
$ |
31,216 |
|
|
$ |
33,950 |
|
|
Cash flow from operations |
|
$ |
(7,437 |
) |
|
$ |
11,624 |
|
|
$ |
21,861 |
|
|
$ |
11,765 |
|
|
$ |
16,953 |
|
|
$ |
37,813 |
|
|
$ |
62,594 |
|
|
Capital additions |
|
$ |
(13,714 |
) |
|
$ |
(16,125 |
) |
|
$ |
(11,501 |
) |
|
$ |
(9,652 |
) |
|
$ |
(9,109 |
) |
|
$ |
(50,992 |
) |
|
$ |
(29,885 |
) |
|
Free cash flow2 |
|
$ |
(21,151 |
) |
|
$ |
(4,501 |
) |
|
$ |
10,360 |
|
|
$ |
2,113 |
|
|
$ |
7,844 |
|
|
$ |
(13,179 |
) |
|
$ |
32,709 |
|
|
Cash cost per ounce, after by-product credits3 |
|
$ |
5.81 |
|
|
$ |
5.23 |
|
|
$ |
3.07 |
|
|
$ |
6.57 |
|
|
$ |
4.50 |
|
|
$ |
5.06 |
|
|
$ |
6.60 |
|
|
AISC per ounce, after by-product credits4 |
|
$ |
12.88 |
|
|
$ |
15.98 |
|
|
$ |
9.91 |
|
|
$ |
13.15 |
|
|
$ |
12.54 |
|
|
$ |
12.86 |
|
|
$ |
14.34 |
|
Lucky Friday produced 4.4 million ounces of silver, an increase of 24% over the prior year due to record throughput, and higher mined grades. Silver production for the fourth quarter was 1.2 million ounces, an increase of 14% over the prior quarter due to higher grades mined.
Fourth quarter sales were $45.4 million, an increase of $17.0 million over the prior quarter due to increased production, higher realized prices, and the sale of the silver concentrate shipment which was deferred from the third quarter. Cost of sales were $32.8 million and increased $8.7 million over the prior quarter due to costs associated with the deferred silver concentrate shipment inventoried in the third quarter, and higher labor costs as the mine continued to fill key positions. Cash costs after by-product credits per silver ounce were $5.81 and increased over the prior quarter due to higher labor costs and higher treatment and freight costs resulting from higher concentrate sales, partially offset by higher by-product credits and higher silver production. AISC after by-product credits per silver ounce was $12.88 and decreased over the prior quarter as the factors affecting cash cost per ounce were offset by lower capital spend in the fourth quarter.3,4 Cash flow from operations was negative $7.4 million, a decrease of $19.1 million over the prior quarter due to unfavorable working capital changes and receipt of $6.7 million related to the deferred silver concentrate shipment received in January 2023. Free cash flow was negative $21.2 million and decreased over the prior quarter primarily due to decreased cash flow from operations partially offset by lower capital spend.2
2022 sales were $147.8 million, an increase of $16.3 million over 2021 as higher metal production offset lower realized prices and higher treatment costs due to increased concentrate production. Cost of sales increased to $116.6 million compared to $97.5 million in 2021 reflecting higher costs related to increased tons mined and milled, as well as inflationary pressures for fuel, reagents and other input costs realized during the year. Cash costs and AISC per silver ounce, each after by-product credits, were $5.06 and $12.86, respectively, decreasing year over year due to higher production and by-product credits partially offset by higher costs and capital spend. 3,4 Cash flow from operations for the year was $37.8 million, a decrease of $24.8 million over the prior year due to higher production costs and unfavorable working capital changes. Free cash flow was negative $13.2 million due to lower cash flow from operations and increased capital spend for the year.2
Casa Berardi – Quebec
|
Dollars are in thousands except cost per ton |
|
4Q-2022 |
|
|
3Q-2022 |
|
|
2Q-2022 |
|
|
1Q-2022 |
|
|
4Q-2021 |
|
|
FY 2022 |
|
|
FY 2021 |
|
|||||||
|
CASA BERARDI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Tons of ore processed – underground |
|
|
160,150 |
|
|
|
162,215 |
|
|
|
176,576 |
|
|
|
161,609 |
|
|
|
161,355 |
|
|
|
660,550 |
|
|
|
694,617 |
|
|
Tons of ore processed – surface pit |
|
|
250,883 |
|
|
|
227,726 |
|
|
|
225,042 |
|
|
|
224,541 |
|
|
|
225,662 |
|
|
|
928,189 |
|
|
|
833,629 |
|
|
Tons of ore processed – total |
|
|
411,033 |
|
|
|
389,941 |
|
|
|
401,618 |
|
|
|
386,150 |
|
|
|
387,017 |
|
|
|
1,588,739 |
|
|
|
1,528,246 |
|
|
Surface tons mined – ore and waste |
|
|
2,657,638 |
|
|
|
2,822,906 |
|
|
|
2,149,412 |
|
|
|
1,892,339 |
|
|
|
1,507,457 |
|
|
|
9,522,295 |
|
|
|
7,015,178 |
|
|
Total production cost per ton |
|
$ |
125.75 |
|
|
$ |
114.52 |
|
|
$ |
113.07 |
|
|
$ |
117.96 |
|
|
$ |
108.82 |
|
|
$ |
117.89 |
|
|
$ |
98.60 |
|
|
Ore grade milled – Gold (oz./ton) – underground |
|
|
0.15 |
|
|
|
0.15 |
|
|
|
0.19 |
|
|
|
0.14 |
|
|
|
0.17 |
|
|
|
0.16 |
|
|
|
0.16 |
|
|
Ore grade milled – Gold (oz./ton) – surface pit |
|
|
0.05 |
|
|
|
0.06 |
|
|
|
0.05 |
|
|
|
0.05 |
|
|
|
0.07 |
|
|
|
0.05 |
|
|
|
0.06 |
|
|
Ore grade milled – Gold (oz./ton) – combined |
|
|
0.09 |
|
|
|
0.10 |
|
|
|
0.10 |
|
|
|
0.09 |
|
|
|
0.11 |
|
|
|
0.09 |
|
|
|
0.10 |
|
|
Gold produced (oz.) – underground |
|
|
20,365 |
|
|
|
22,181 |
|
|
|
22,866 |
|
|
|
19,374 |
|
|
|
22,910 |
|
|
|
84,786 |
|
|
|
98,090 |
|
|
Gold produced (oz.) – surface pit |
|
|
10,344 |
|
|
|
11,154 |
|
|
|
10,440 |
|
|
|
10,866 |
|
|
|
14,356 |
|
|
|
42,804 |
|
|
|
36,421 |
|
|
Gold produced (oz.) – total |
|
|
30,709 |
|
|
|
33,335 |
|
|
|
33,306 |
|
|
|
30,240 |
|
|
|
37,266 |
|
|
|
127,590 |
|
|
|
134,511 |
|
|
Silver produced (oz.) – total |
|
|
5,960 |
|
|
|
6,882 |
|
|
|
8,379 |
|
|
|
7,068 |
|
|
|
7,967 |
|
|
|
28,289 |
|
|
|
33,571 |
|
|
Sales |
|
$ |
53,458 |
|
|
$ |
56,939 |
|
|
$ |
62,639 |
|
|
$ |
62,101 |
|
|
$ |
60,054 |
|
|
$ |
235,136 |
|
|
$ |
245,152 |
|
|
Total cost of sales |
|
$ |
(65,328 |
) |
|
$ |
(59,532 |
) |
|
$ |
(61,870 |
) |
|
$ |
(62,168 |
) |
|
$ |
(57,069 |
) |
|
$ |
(248,898 |
) |
|
$ |
(229,829 |
) |
|
Gross profit (loss) |
|
$ |
(11,870 |
) |
|
$ |
(2,593 |
) |
|
$ |
769 |
|
|
$ |
(67 |
) |
|
$ |
2,985 |
|
|
$ |
(13,762 |
) |
|
$ |
15,323 |
|
|
Cash flow from operations |
|
$ |
10,188 |
|
|
$ |
8,721 |
|
|
$ |
7,417 |
|
|
$ |
8,089 |
|
|
$ |
10,029 |
|
|
$ |
34,415 |
|
|
$ |
73,791 |
|
|
Exploration |
|
$ |
1,637 |
|
|
$ |
2,624 |
|
|
$ |
1,341 |
|
|
$ |
2,635 |
|
|
$ |
2,124 |
|
|
$ |
8,237 |
|
|
$ |
9,526 |
|
|
Capital additions |
|
$ |
(12,995 |
) |
|
$ |
(10,771 |
) |
|
$ |
(8,093 |
) |
|
$ |
(7,808 |
) |
|
$ |
(9,537 |
) |
|
$ |
(39,667 |
) |
|
$ |
(49,617 |
) |
|
Free cash flow2 |
|
$ |
(1,170 |
) |
|
$ |
574 |
|
|
$ |
665 |
|
|
$ |
2,916 |
|
|
$ |
2,616 |
|
|
$ |
2,985 |
|
|
$ |
33,700 |
|
|
Cash cost per ounce, after by-product credits3 |
|
$ |
1,696 |
|
|
$ |
1,349 |
|
|
$ |
1,371 |
|
|
$ |
1,516 |
|
|
$ |
1,137 |
|
|
$ |
1,478 |
|
|
$ |
1,125 |
|
|
AISC per ounce, after by-product credits4 |
|
$ |
2,132 |
|
|
$ |
1,738 |
|
|
$ |
1,641 |
|
|
$ |
1,810 |
|
|
$ |
1,470 |
|
|
$ |
1,825 |
|
|
$ |
1,399 |
|
Casa Berardi produced 127,590 and 30,709 ounces of gold in 2022 and the fourth quarter, respectively. Gold production for the year decreased by 5% compared to last year due to a 12% decrease in overall gold grade, partially offset by a 4% increase in tonnage and a 3% increase in mill recoveries. The lower grade was due to a higher ratio of lower grade ore sourced from the open pits. The mill continued to perform well, achieving record throughput of 4,468 tons per day (tpd) in the fourth quarter of 2022.
Full year 2022 cost of sales was $248.9 million, an increase of $19.1 million over the prior year due to inflationary pressures and increased labor, consumables, and contractor costs. Cash costs and AISC per ounce, each after by-product credits, were $1,478 and $1,825, respectively.
Contacts
Anvita M. Patil
Vice President – Investor Relations and Treasurer
Cheryl Turner
Communications Coordinator
800-HECLA91 (800-432-5291)
Investor Relations
Email: [email protected]
Website: http://www.hecla-mining.com
