Hecla Reports Third Quarter 2024 Results
New CEO takes reins, record silver segment revenues, deleveraging continues
COEUR D’ALENE, Idaho–(BUSINESS WIRE)–Hecla Mining Company (NYSE:HL) (“Hecla” or the “Company”) today announced third quarter 2024 financial and operating results.
THIRD QUARTER HIGHLIGHTS
Operational
- Produced 3.6 million silver ounces and 32,280 ounces of gold.
- Keno Hill produced 0.6 million ounces of silver, with 2.1 million ounces produced in the first nine months of the year, at an average mill throughput of 314 tons per day (”tpd”).
- Sold 98,792 pounds of payable copper at Greens Creek.
- 2024 guidance for silver production decreased and cost guidance increased, gold production and cost guidance affirmed.
Financial
- Revenues of $245.1 million, second highest in Company history, 45% from silver and 32% from gold.
- Net income applicable to common stockholders of $1.6 million or $0.00 per share; adjusted net income applicable to common stockholders of $19.7 million or $0.03 per share.1
- Reduced total debt by $50.6 million; achieved the second highest quarterly Adjusted EBITDA, improving the net leverage ratio* to 1.8.5
-
Cash provided by operating activities of $55.0 million; strong free cash flow generation at Greens Creek and Lucky Friday.2
- Greens Creek generated $54.1 million in cash flow from operations and $46.9 million in free cash flow.2
- Lucky Friday generated $34.4 million in cash flow from operations and $23.2 million in free cash flow (including $14.8 million in insurance receipts).2
- Collected the remaining $14.8 million of Lucky Friday’s underground insurance claim of $50 million.
- Consolidated silver total cost of sales of $132.7 million; cash cost and all-in sustaining cost (“AISC”) per silver ounce (each after by-product credits) of $4.46 and $15.29, respectively.3,4
- Declared silver-linked quarterly dividend of $0.01 per share, reflecting a quarterly realized silver price between $25 and $30 per ounce, for a total cash dividend of $0.01375 per common share.
* Net Leverage ratio is calculated as current debt, long-term debt and finance leases less cash to 12 month trailing adjusted EBITDA.
Exploration
-
At Keno Hill, over 9,800 feet of definition drilling was completed. Drilling continues to intersect high-grade silver mineralization over significant widths and highlights the potential for high-grade silver mineralization in the district. Highlights include:
-
Bermingham Footwall Vein: 63.8 oz/ton silver, 6.7% lead, and 6.4% zinc over 10.2 feet
- Includes: 99.6 oz/ton silver, 10.7% lead, and 9.8% zinc over 6.4 feet
-
Bermingham Footwall Vein: 63.8 oz/ton silver, 6.7% lead, and 6.4% zinc over 10.2 feet
- Flame & Moth Vein 1: 71.6 oz/ton silver, 11.6% lead, and 11.2% zinc over 14.8 feet
-
At Greens Creek, over 27,000 feet of drilling was completed, focused on resource conversion and extension of mineralization. Highlights include:
- 200 South Zone: 74.0 oz/ton silver, 0.03 oz/ton gold, 4.7% zinc, and 2.2% lead over 33.8 feet
- Southwest Bench: 51.4 oz/ton silver, 0.52 oz/ton gold, 9.3% zinc, and 4.9% lead over 19.0 feet
“Hecla produced 3.6 million ounces of silver in the third quarter, bringing year-to-date production to 12.3 million ounces. Lucky Friday had a strong quarter as the mill achieved the second-highest throughput in its 80-year history after a record last quarter,” said Cassie Boggs, Interim President and CEO. “While Greens Creek’s silver production was lower than anticipated due to five days of unplanned mill maintenance in the third quarter, our team was able to complete the maintenance quickly and complete a portion of our fourth quarter scheduled maintenance simultaneously. Strong performance from our silver operations has generated free cash flow of $170 million year-to-date, which along with opportunistic use of our ATM program, has allowed us to substantially repay outstanding borrowings on our revolving credit facility, reducing total debt by $50.6 million.”
Boggs continued, “At Keno Hill, we have already mined more than 2.5 million ounces and produced 2.1 million ounces of silver this year, putting us on track to meet our production guidance for this year. We are prioritizing building the foundation for this operation’s future to operate in Yukon successfully, which includes improving safety and environmental practices and, importantly, valuing the perspectives of the Yukon Government and the First Nation of Na-Cho Nyäk Dun, both of whom have important roles in permitting our improvements to infrastructure as well as our future operations.”
New President and CEO
Ms. Boggs continued, “What we are most excited about is welcoming our new President and CEO, Rob Krcmarov, a proven leader in the mining industry. His vision and expertise will be invaluable as we continue our journey toward growth, innovation and continuous improvement.”
Mr. Krcmarov added, “Hecla has a remarkable legacy of operational excellence, innovation, and a strong commitment to responsible mining and sustainable practices. I am thrilled to be a part of this team and I look forward to contributing to the Company’s continued growth and success.”
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 second quarter of 2024.
|
In Thousands unless stated otherwise |
|
3Q-2024 |
|
|
2Q-2024 |
|
|
1Q-2024 |
|
|
4Q-2023 |
|
|
3Q-2023 |
|
|
2Q-2023 |
|
|
YTD-2024 |
|
|
YTD-2023 |
|
||||||||
|
FINANCIAL AND PRODUCTION SUMMARY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Sales |
|
$ |
245,085 |
|
|
$ |
245,657 |
|
|
$ |
189,528 |
|
|
$ |
160,690 |
|
|
$ |
181,906 |
|
|
$ |
178,131 |
|
|
$ |
680,270 |
|
|
$ |
559,537 |
|
|
Total cost of sales |
|
$ |
185,799 |
|
|
$ |
194,227 |
|
|
$ |
170,368 |
|
|
$ |
153,825 |
|
|
$ |
148,429 |
|
|
$ |
140,472 |
|
|
$ |
550,394 |
|
|
$ |
453,453 |
|
|
Gross profit |
|
$ |
59,286 |
|
|
$ |
51,430 |
|
|
$ |
19,160 |
|
|
$ |
6,865 |
|
|
$ |
33,477 |
|
|
$ |
37,659 |
|
|
$ |
129,876 |
|
|
$ |
106,084 |
|
|
Net income (loss) applicable to common stockholders |
|
$ |
1,623 |
|
|
$ |
27,732 |
|
|
$ |
(5,891 |
) |
|
$ |
(43,073 |
) |
|
$ |
(22,553 |
) |
|
$ |
(15,832 |
) |
|
$ |
23,464 |
|
|
$ |
(41,696 |
) |
|
Basic income (loss) per common share (in dollars) |
|
$ |
0.00 |
|
|
$ |
0.04 |
|
|
$ |
(0.01 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.03 |
) |
|
$ |
0.04 |
|
|
$ |
(0.07 |
) |
|
Adjusted EBITDA1 |
|
$ |
88,859 |
|
|
$ |
90,895 |
|
|
$ |
71,597 |
|
|
$ |
32,907 |
|
|
$ |
46,251 |
|
|
$ |
67,740 |
|
|
$ |
251,351 |
|
|
$ |
175,894 |
|
|
Total Debt |
|
$ |
539,804 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
616,246 |
|
||||||
|
Net Debt to Adjusted EBITDA1 |
|
|
1.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.8 |
|
|
|
2.2 |
|
|||||
|
Cash provided by operating activities |
|
$ |
55,009 |
|
|
$ |
78,718 |
|
|
$ |
17,080 |
|
|
$ |
884 |
|
|
$ |
10,235 |
|
|
$ |
23,777 |
|
|
$ |
150,807 |
|
|
$ |
74,615 |
|
|
Capital Expenditures |
|
$ |
(55,699 |
) |
|
$ |
(50,420 |
) |
|
$ |
(47,589 |
) |
|
$ |
(62,622 |
) |
|
$ |
(55,354 |
) |
|
$ |
(51,468 |
) |
|
$ |
(153,708 |
) |
|
$ |
(161,265 |
) |
|
Free Cash Flow2 |
|
$ |
(690 |
) |
|
$ |
28,298 |
|
|
$ |
(30,509 |
) |
|
$ |
(61,738 |
) |
|
$ |
(45,119 |
) |
|
$ |
(27,691 |
) |
|
$ |
(2,901 |
) |
|
$ |
(86,650 |
) |
|
Silver ounces produced |
|
|
3,645,004 |
|
|
|
4,458,484 |
|
|
|
4,192,098 |
|
|
|
2,935,631 |
|
|
|
3,533,704 |
|
|
|
3,832,559 |
|
|
|
12,295,586 |
|
|
|
11,407,232 |
|
|
Silver payable ounces sold |
|
|
3,729,782 |
|
|
|
3,785,285 |
|
|
|
3,481,884 |
|
|
|
2,847,591 |
|
|
|
3,142,227 |
|
|
|
3,360,694 |
|
|
|
10,996,951 |
|
|
|
10,107,415 |
|
|
Gold ounces produced |
|
|
32,280 |
|
|
|
37,324 |
|
|
|
36,592 |
|
|
|
37,168 |
|
|
|
39,269 |
|
|
|
35,251 |
|
|
|
106,196 |
|
|
|
114,091 |
|
|
Gold payable ounces sold |
|
|
31,414 |
|
|
|
35,276 |
|
|
|
32,189 |
|
|
|
33,230 |
|
|
|
36,792 |
|
|
|
31,961 |
|
|
|
98,879 |
|
|
|
108,372 |
|
|
Cash Costs and AISC, each after by-product credits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Silver cash costs per ounce 3 |
|
$ |
4.46 |
|
|
$ |
2.08 |
|
|
$ |
4.78 |
|
|
$ |
4.94 |
|
|
$ |
3.31 |
|
|
$ |
3.32 |
|
|
$ |
3.71 |
|
|
$ |
2.86 |
|
|
Silver AISC per ounce 4 |
|
$ |
15.29 |
|
|
$ |
12.54 |
|
|
$ |
13.10 |
|
|
$ |
17.48 |
|
|
$ |
11.39 |
|
|
$ |
11.63 |
|
|
$ |
13.57 |
|
|
$ |
10.52 |
|
|
Gold cash costs per ounce 3 |
|
$ |
1,754 |
|
|
$ |
1,701 |
|
|
$ |
1,669 |
|
|
$ |
1,702 |
|
|
$ |
1,475 |
|
|
$ |
1,658 |
|
|
$ |
1,707 |
|
|
$ |
1,635 |
|
|
Gold AISC per ounce 4 |
|
$ |
2,059 |
|
|
$ |
1,825 |
|
|
$ |
1,899 |
|
|
$ |
1,969 |
|
|
$ |
1,695 |
|
|
$ |
2,147 |
|
|
$ |
1,923 |
|
|
$ |
2,075 |
|
|
Realized Prices |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Silver, $/ounce |
|
$ |
29.43 |
|
|
$ |
29.77 |
|
|
$ |
24.77 |
|
|
$ |
23.47 |
|
|
$ |
23.71 |
|
|
$ |
23.67 |
|
|
$ |
28.07 |
|
|
$ |
23.28 |
|
|
Gold, $/ounce |
|
$ |
2,522 |
|
|
$ |
2,338 |
|
|
$ |
2,094 |
|
|
$ |
1,998 |
|
|
$ |
1,908 |
|
|
$ |
1,969 |
|
|
$ |
2,317 |
|
|
$ |
1,921 |
|
|
Lead, $/pound |
|
$ |
0.93 |
|
|
$ |
1.06 |
|
|
$ |
0.97 |
|
|
$ |
1.09 |
|
|
$ |
1.07 |
|
|
$ |
0.99 |
|
|
$ |
0.99 |
|
|
$ |
1.02 |
|
|
Zinc, $/pound |
|
$ |
1.36 |
|
|
$ |
1.51 |
|
|
$ |
1.10 |
|
|
$ |
1.39 |
|
|
$ |
1.52 |
|
|
$ |
1.13 |
|
|
$ |
1.32 |
|
|
$ |
1.34 |
|
Sales in the third quarter of $245.1 million were consistent with the prior quarter as lower sales volumes of silver, gold and lead, and lower realized prices for silver, zinc, lead were offset by higher sales volumes for zinc and higher realized prices for gold. The lower sales volumes stemmed from a combination of lower production and volumes sold at Lucky Friday and Casa Berardi (due to lower grades and lower mill throughput) and lower sales volumes at Keno Hill due to lower mill throughput attributable to delays in design and construction of the dry stack tailings facility (“DSTF”), including permitting delays following the heap leach failure at Victoria Gold’s Eagle Gold mine. Sales of silver and zinc concentrate inventory built up at Greens Creek in the prior quarter partially offset lower sales volumes from other operations.
Gross profit increased by 15% to $59.3 million, primarily attributable to the lower cost of sales at Keno Hill and Casa Berardi partially offset by higher cost of sales at Greens Creek due to higher volumes of metals sold.
Net income applicable to common stockholders for the quarter was $1.6 million, a $26.1 million reduction from the prior quarter, primarily because of:
- A non-cash write down of $14.5 million, $13.9 million related to the remote vein miner. The machine was determined to be obsolete due to the success of the Underhand Closed Bench mining method at Lucky Friday and the decision by the vendor to terminate the program and exit that line of business.
- Ramp-up and suspension costs increased by $8.1 million to $13.7 million, reflecting the lower mill throughput at Keno Hill due to delays of the DSTF described above.
- Foreign exchange loss of $3.2 million, compared to a gain of $2.7 million in the prior quarter, due to the appreciation of the Canadian dollar against the U.S. dollar.
- Exploration and pre-development increased by $3.9 million, due to increased activity over the summer months.
- Income and mining tax provision increased by $2.4 million to $11.5 million reflecting higher taxable income of our US operations compared to consolidated book income.
The above items were partly offset by:
- General and administrative costs decreased by $4.3 million primarily due to costs related to the departure of the former CEO in the prior quarter.
- Interest expense decreased by $1.6 million reflecting a decrease in the Company’s borrowing on its revolving credit facility.
Consolidated silver total cost of sales in the third quarter increased by 8% to $132.7 million, reflecting a product inventory draw down at Greens Creek. Consolidated cash costs and AISC per silver ounce, each after by-product credits, were $4.46 and $15.29 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 increase in cash costs was primarily due to lower silver production and by-product credits (lower production for all metals except zinc and lower realized prices for all metals except gold).3,4
Consolidated gold total cost of sales were $46.3 million, reflecting a decrease in sales at Casa Berardi. Cash costs and AISC per gold ounce, each after by-product credits, increased to $1,754 and $2,059, respectively, as lower production costs were offset by lower gold production, with AISC also impacted by higher planned capital investment in tailings construction.3,4
Adjusted EBITDA for the quarter was $88.9 million, in line with the prior quarter (which was a record).5 The net leverage ratio improved to 1.8 times from 2.3 times in the prior quarter due to a reduction in total debt of $50.6 million as the Company decreased borrowings under its revolving credit facility. Cash and cash equivalents at the end of the quarter were $22.3 million and included $13.0 million drawn on the revolving credit facility. Borrowing on the revolving credit facility decreased by $49.0 million in the quarter as the Company utilized insurance proceeds and equity issuances under the At-The-Market (“ATM”) program to reduce the drawn amount. At current price levels and expected production, the Company anticipates continuing to reduce borrowings on the revolving credit facility.
Cash provided by operating activities was $55.0 million and decreased by $23.7 million from the prior quarter due to a decrease in net income adjusted for non-cash items of $13.4 million and unfavorable working capital changes of $10.3 million.
Capital investment of $55.7 million increased by $5.3 million from the prior quarter. Capital investments at the operations were as follows (i) $11.5 million at Greens Creek related to development, mill projects including replacement of tails and concentrate filter presses, definition drilling, and equipment purchases, (ii) $18.6 million at Casa Berardi, primarily related to tailings construction activities, (iii) $11.2 million at Lucky Friday primarily related to equipment purchases, pre-production drilling, and development and (iv) $14.4 million at Keno Hill, primarily related to DSTF work, equipment purchases, and capital development.
Free cash flow for the quarter was negative $0.7 million, compared to $28.3 million in the prior quarter.2 The decrease in free cash flow is primarily attributable to lower cash flow from operations and increased capital investment.
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 September 30, 2024, the Company had contracts covering approximately 10% and 32% 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 $1.00 per pound.
The Company also manages Canadian dollar (“CAD”) exposure through forward contracts. On September 30, 2024, the Company had hedged approximately 39% 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 15% 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 |
|
3Q-2024 |
|
|
2Q-2024 |
|
|
1Q-2024 |
|
|
4Q-2023 |
|
|
3Q-2023 |
|
|
YTD-2024 |
|
|
YTD-2023 |
|
|||||||
|
GREENS CREEK |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Tons of ore processed |
|
|
212,863 |
|
|
|
225,746 |
|
|
|
232,188 |
|
|
|
220,186 |
|
|
|
228,978 |
|
|
|
670,797 |
|
|
|
694,610 |
|
|
Total production cost per ton |
|
$ |
222.39 |
|
|
$ |
218.09 |
|
|
$ |
212.92 |
|
|
$ |
223.98 |
|
|
$ |
200.30 |
|
|
$ |
217.66 |
|
|
$ |
197.94 |
|
|
Ore grade milled – Silver (oz./ton) |
|
|
11.2 |
|
|
|
12.6 |
|
|
|
13.3 |
|
|
|
12.9 |
|
|
|
13.1 |
|
|
|
12.4 |
|
|
|
13.4 |
|
|
Ore grade milled – Gold (oz./ton) |
|
|
0.08 |
|
|
|
0.09 |
|
|
|
0.09 |
|
|
|
0.09 |
|
|
|
0.09 |
|
|
|
0.09 |
|
|
|
0.09 |
|
|
Ore grade milled – Lead (%) |
|
|
2.4 |
|
|
|
2.5 |
|
|
|
2.6 |
|
|
|
2.8 |
|
|
|
2.5 |
|
|
|
2.5 |
|
|
|
2.6 |
|
|
Ore grade milled – Zinc (%) |
|
|
6.6 |
|
|
|
6.2 |
|
|
|
6.3 |
|
|
|
6.5 |
|
|
|
6.5 |
|
|
|
6.4 |
|
|
|
6.3 |
|
|
Silver produced (oz.) |
|
|
1,857,314 |
|
|
|
2,243,551 |
|
|
|
2,478,594 |
|
|
|
2,260,027 |
|
|
|
2,343,192 |
|
|
|
6,579,459 |
|
|
|
7,471,725 |
|
|
Gold produced (oz.) |
|
|
11,746 |
|
|
|
14,137 |
|
|
|
14,588 |
|
|
|
14,651 |
|
|
|
15,010 |
|
|
|
40,471 |
|
|
|
46,245 |
|
|
Lead produced (tons) |
|
|
4,165 |
|
|
|
4,513 |
|
|
|
4,834 |
|
|
|
4,910 |
|
|
|
4,740 |
|
|
|
13,512 |
|
|
|
14,668 |
|
|
Zinc produced (tons) |
|
|
12,585 |
|
|
|
12,400 |
|
|
|
13,062 |
|
|
|
12,535 |
|
|
|
13,224 |
|
|
|
38,047 |
|
|
|
38,961 |
|
|
Copper produced (tons) |
|
|
490 |
|
|
|
462 |
|
|
|
495 |
|
|
|
449 |
|
|
|
457 |
|
|
|
1,447 |
|
|
|
1,374 |
|
|
Sales |
|
|
116,568 |
|
|
|
95,659 |
|
|
$ |
97,310 |
|
|
$ |
93,543 |
|
|
$ |
96,459 |
|
|
$ |
309,537 |
|
|
$ |
290,961 |
|
|
Total cost of sales |
|
$ |
(73,597 |
) |
|
$ |
(56,786 |
) |
|
$ |
(69,857 |
) |
|
$ |
(70,231 |
) |
|
$ |
(60,322 |
) |
|
$ |
(200,240 |
) |
|
$ |
(189,664 |
) |
|
Gross profit |
|
$ |
42,971 |
|
|
$ |
38,873 |
|
|
$ |
27,453 |
|
|
$ |
23,312 |
|
|
$ |
36,137 |
|
|
$ |
109,297 |
|
|
$ |
101,297 |
|
|
Cash flow from operations |
|
$ |
54,076 |
|
|
$ |
43,276 |
|
|
$ |
28,706 |
|
|
$ |
34,576 |
|
|
$ |
36,101 |
|
|
$ |
126,058 |
|
|
$ |
122,749 |
|
|
Exploration |
|
$ |
4,325 |
|
|
$ |
2,011 |
|
|
$ |
551 |
|
|
$ |
1,324 |
|
|
$ |
4,283 |
|
|
$ |
6,887 |
|
|
$ |
6,491 |
|
|
Capital additions |
|
$ |
(11,466 |
) |
|
$ |
(11,704 |
) |
|
$ |
(8,827 |
) |
|
$ |
(15,996 |
) |
|
$ |
(12,060 |
) |
|
$ |
(31,997 |
) |
|
$ |
(27,546 |
) |
|
Free cash flow 2 |
|
$ |
46,935 |
|
|
$ |
33,583 |
|
|
$ |
20,430 |
|
|
$ |
19,904 |
|
|
$ |
28,324 |
|
|
$ |
100,948 |
|
|
$ |
101,694 |
|
|
Cash cost per ounce, after by-product credits 3 |
|
$ |
0.93 |
|
|
$ |
0.19 |
|
|
$ |
3.45 |
|
|
$ |
4.94 |
|
|
$ |
3.04 |
|
|
$ |
1.62 |
|
|
$ |
1.81 |
|
|
AISC per ounce, after by-product credits 4 |
|
$ |
7.04 |
|
|
$ |
5.40 |
|
|
$ |
7.16 |
|
|
$ |
12.00 |
|
|
$ |
8.18 |
|
|
$ |
6.53 |
|
|
$ |
5.67 |
|
Greens Creek produced 1.9 million ounces of silver, a decrease over the prior quarter, primarily due to lower grades and reduced mill throughput attributable to five days of unplanned maintenance on the Semi-Autogenous Grinding (“SAG”) mill variable frequency drive (unplanned maintenance extended to two days in October). By-product metal production was lower for gold and lead due to lower mill throughput and lower grades, while zinc production was flat as higher grades offset the lower milled throughput. The mine added copper to its by-product metals as the silver concentrate now includes copper as a payable metal (copper has been produced at the mine for multiple years but previously was not a payable metal in concentrates).
Sales in the quarter were $116.6 million, a 22% increase due to higher quantities of payable metals sold (all metals) as silver and zinc concentrate inventory built up from the prior quarter was sold in the third quarter. Higher quantities of metals sold offset the lower realized prices for all metals except gold. Total cost of sales was $73.6 million, an increase of 30%, reflecting higher payable metals sold. Cash costs and AISC per silver ounce, each after by-product credits, were $0.93 and $7.04, respectively, and increased over the prior quarter as lower production costs were offset by lower silver production and lower by-product credits (lower production volumes and lower realized prices for all metals except gold).3,4
Cash flow from operations was $54.1 million, a 25% increase, primarily due to higher gross profit. Capital investments were consistent with the prior quarter. Free cash flow for the quarter was $46.9 million, an increase of 40%, attributable to higher cash flow from operations.2
Lucky Friday Mine – Idaho
|
Dollars are in thousands except cost per ton |
|
3Q-2024 |
|
|
2Q-2024 |
|
|
1Q-2024 |
|
|
4Q-2023 |
|
|
3Q-2023 |
|
|
YTD-2024 |
|
|
YTD-2023 |
|
|||||||
|
LUCKY FRIDAY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Tons of ore processed |
|
|
104,281 |
|
|
|
107,441 |
|
|
|
86,234 |
|
|
|
5,164 |
|
|
|
36,619 |
|
|
|
297,956 |
|
|
|
225,965 |
|
|
Total production cost per ton |
|
$ |
260.99 |
|
|
$ |
233.99 |
|
|
$ |
233.10 |
|
|
$ |
201.42 |
|
|
$ |
191.81 |
|
|
$ |
243.18 |
|
|
$ |
223.44 |
|
|
Ore grade milled – Silver (oz./ton) |
|
|
12.1 |
|
|
|
12.9 |
|
|
|
12.9 |
|
|
|
12.7 |
|
|
|
13.6 |
|
|
|
12.6 |
|
|
|
14.0 |
|
|
Ore grade milled – Lead (%) |
|
|
7.9 |
|
|
|
8.1 |
|
|
|
8.2 |
|
|
|
8.0 |
|
|
|
8.6 |
|
|
|
8.1 |
|
|
|
8.9 |
|
|
Ore grade milled – Zinc (%) |
|
|
3.9 |
|
|
|
3.6 |
|
|
|
3.9 |
|
|
|
3.5 |
|
|
|
3.5 |
|
|
|
3.8 |
|
|
|
4.1 |
|
|
Silver produced (oz.) |
|
|
1,184,819 |
|
|
|
1,308,155 |
|
|
|
1,061,065 |
|
|
|
61,575 |
|
|
|
475,414 |
|
|
|
3,554,039 |
|
|
|
3,024,544 |
|
|
Lead produced (tons) |
|
|
7,662 |
|
|
|
8,229 |
|
|
|
6,689 |
|
|
|
372 |
|
|
|
2,957 |
|
|
|
22,580 |
|
|
|
19,171 |
|
|
Zinc produced (tons) |
|
|
3,528 |
|
|
|
3,320 |
|
|
|
2,851 |
|
|
|
134 |
|
|
|
1,159 |
|
|
|
9,699 |
|
|
|
7,810 |
|
|
Sales |
|
$ |
51,072 |
|
|
$ |
59,071 |
|
|
$ |
35,340 |
|
|
$ |
3,117 |
|
|
$ |
21,409 |
|
|
$ |
145,483 |
|
|
$ |
113,167 |
|
|
Total cost of sales |
|
$ |
(39,286 |
) |
|
$ |
(37,523 |
) |
|
$ |
(27,519 |
) |
|
$ |
(3,117 |
) |
|
$ |
(14,344 |
) |
|
$ |
(104,328 |
) |
|
$ |
(81,068 |
) |
|
Gross profit |
|
$ |
11,786 |
|
|
$ |
21,548 |
|
|
$ |
7,821 |
|
|
$ |
— |
|
|
$ |
7,065 |
|
|
$ |
41,155 |
|
|
$ |
32,099 |
|
|
Cash flow from operations |
|
$ |
34,374 |
|
|
$ |
44,546 |
|
|
$ |
27,112 |
|
|
$ |
(7,982 |
) |
|
$ |
515 |
|
|
$ |
106,032 |
|
|
$ |
65,540 |
|
|
Capital additions |
|
$ |
(11,178 |
) |
|
$ |
(10,818 |
) |
|
$ |
(14,988 |
) |
|
$ |
(18,819 |
) |
|
$ |
(15,494 |
) |
|
$ |
(36,984 |
) |
|
$ |
(46,518 |
) |
|
Free cash flow 2 |
|
$ |
23,196 |
|
|
$ |
33,728 |
|
|
$ |
12,124 |
|
|
$ |
(26,801 |
) |
|
$ |
(14,979 |
) |
|
$ |
69,048 |
|
|
$ |
19,022 |
|
|
Cash cost per ounce, after by-product credits 3 |
|
$ |
9.98 |
|
|
$ |
5.32 |
|
|
$ |
8.85 |
|
|
N/A |
|
|
$ |
4.74 |
|
|
$ |
7.86 |
|
|
$ |
5.51 |
|
|
|
AISC per ounce, after by-product credits 4 |
|
$ |
19.40 |
|
|
$ |
12.74 |
|
|
$ |
17.36 |
|
|
N/A |
|
|
$ |
10.63 |
|
|
$ |
16.26 |
|
|
$ |
12.21 |
|
|
Lucky Friday produced 1.2 million ounces of silver, 9% lower than the prior quarter, due to 6% lower milled grades and 3% lower throughput. Mill throughput averaged 1,133 tpd, the second highest in the mine’s history after a record in the prior quarter.
Sales in the third quarter were $51.1 million, 14% lower due to lower volumes of metals sold and lower realized prices. Total cost of sales increased to $39.3 million, primarily due to higher production costs attributable to higher underground mobile equipment maintenance costs and higher contractor costs. Key mill projects, including installation of new cyclones, were completed during the quarter, contributing to lower mill throughput. Cash costs and AISC per silver ounce, each after by-product credits, were $9.98 and $19.40 respectively and were higher due to higher production costs and lower by-product credits (lower production and realized prices), and lower silver production.3,4
Cash flow from operations was $34.4 million and decreased over the prior quarter due to lower gross margins realized and lower insurance proceeds of $14.8 million (prior quarter included $17.8 million in insurance proceeds). With $14.8 million in insurance proceeds received during the quarter, the Company has completed the claim after reaching the underground insurance sublimit of $50 million.
Capital investment for the quarter was $11.2 million, consistent with the prior quarter. Free cash flow for the quarter was $23.2 million, lower compared to the prior quarter primarily due to lower gross margins.2
Keno Hill – Yukon Territory
|
Dollars are in thousands except cost per ton |
|
3Q-2024 |
|
|
2Q-2024 |
|
|
1Q-2024 |
|
|
4Q-2023 |
|
|
3Q-2023 |
|
|
YTD-2024 |
|
|
YTD-2023 |
|
|||||||
|
KENO HILL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Tons of ore processed |
|
|
24,027 |
|
|
|
36,977 |
|
|
|
25,165 |
|
|
|
19,651 |
|
|
|
24,616 |
|
|
|
86,169 |
|
|
|
36,680 |
|
|
Ore grade milled – Silver (oz./ton) |
|
|
25.7 |
|
|
|
25.1 |
|
|
|
26.3 |
|
|
|
31.7 |
|
|
|
33.0 |
|
|
|
25.6 |
|
|
|
28.2 |
|
|
Ore grade milled – Lead (%) |
|
|
3.0 |
|
|
|
2.4 |
|
|
|
2.4 |
|
|
|
2.6 |
|
|
|
2.4 |
|
|
|
2.6 |
|
|
|
2.1 |
|
|
Ore grade milled – Zinc (%) |
|
|
2.4 |
|
|
|
1.4 |
|
|
|
1.3 |
|
|
|
1.6 |
|
|
|
2.5 |
|
|
|
1.7 |
|
|
|
3.1 |
|
|
Silver produced (oz.) |
|
|
597,293 |
|
|
|
900,440 |
|
|
|
646,312 |
|
|
|
608,301 |
|
|
|
710,012 |
|
|
|
2,144,045 |
|
|
|
894,276 |
|
|
Lead produced (tons) |
|
|
670 |
|
|
|
845 |
|
|
|
576 |
|
|
|
481 |
|
|
|
327 |
|
|
|
2,091 |
|
|
|
744 |
|
|
Zinc produced (tons) |
|
|
492 |
|
|
|
471 |
|
|
|
298 |
|
|
|
396 |
|
|
|
252 |
|
|
|
1,261 |
|
|
|
943 |
|
|
Sales |
|
$ |
19,809 |
|
|
$ |
28,950 |
|
|
$ |
10,847 |
|
|
$ |
17,936 |
|
|
$ |
16,001 |
|
|
$ |
59,606 |
|
|
$ |
17,582 |
|
|
Total cost of sales |
|
$ |
(19,809 |
) |
|
$ |
(28,950 |
) |
|
$ |
(10,847 |
) |
|
$ |
(17,936 |
) |
|
$ |
(16,001 |
) |
|
$ |
(59,606 |
) |
|
$ |
(17,582 |
) |
|
Gross profit |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
Cash flow from operations* |
|
$ |
(6,811 |
) |
|
$ |
(465 |
) |
|
$ |
(8,720 |
) |
|
$ |
(1,188 |
) |
|
$ |
(6,200 |
) |
|
$ |
(15,996 |
) |
|
$ |
(25,424 |
) |
|
Exploration |
|
$ |
2,664 |
|
|
$ |
2,019 |
|
|
$ |
498 |
|
|
$ |
1,548 |
|
|
$ |
1,653 |
|
|
$ |
5,181 |
|
|
$ |
3,129 |
|
|
Capital additions |
|
$ |
(14,406 |
) |
|
$ |
(14,533 |
) |
|
$ |
(10,346 |
) |
|
$ |
(12,549 |
) |
|
$ |
(11,498 |
) |
|
$ |
(39,285 |
) |
|
$ |
(32,123 |
) |
|
Free cash flow 2* |
|
$ |
(18,553 |
) |
|
$ |
(12,979 |
) |
|
$ |
(18,568 |
) |
|
$ |
(12,189 |
) |
|
$ |
(16,045 |
) |
|
$ |
(50,100 |
) |
|
$ |
(54,418 |
) |
*Revised for 2Q-2024, 1Q-2024 and 4Q-2023′
Keno Hill produced 597,293 ounces of silver at an average grade of 25.7 ounces per ton. Mined throughput averaged 343 tpd, milled tonnage averaged 261 tpd during the quarter, and 314 tpd during the nine months ended September 30, 2024. Lower mill throughput during the quarter was attributable to the delays in receiving an authorization for construction and a permit modification for the DSTF as the Yukon Government (“YG”) and the First Nation of Na-Cho Nyäk Dun (“FNNND”) initially focused on the Victoria Gold’s Eagle Mine heap leach pad failure that occurred in June and not on permitting matters (Keno Hill does not utilize heap leach processing). Mill operations resumed on October 26, after receiving the authorization and modification and completing related design and construction work on the DSTF.
Contacts
For further information, please contact:
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
