Hecla Mining Company (NYSE:HL) today announced second quarter 2023 financial and operating results.
SECOND QUARTER HIGHLIGHTS
Operational
- Produced 3.8 million ounces of silver, 7.9 million ounces in the first half of the year; third highest silver production over a six-month period in Company history.
- Restarted the mill at Keno Hill, producing 184,264 ounces of silver, with full production expected by year-end.
- Lucky Friday's silver production of 1.3 million ounces was the highest since the first quarter of 2000.
- Silver production and cost guidance affirmed; gold production guidance adjusted based on reduced underground mining and wildfires-related suspension of operations at Casa Berardi.
Financial
- Sales of $178.1 million, with 45% from silver and 35% from gold.
- Consolidated silver total cost of sales of $96.8 million and cash cost and AISC per silver ounce (each after by-product credits) of $3.32 and $11.63, respectively.3,4
- Consolidated cash flow from operations of $23.8 million for the quarter, and year to date $64.4 million; with silver operations generating $62.2 million in cash flow from operations for the quarter and year to date $151.7 million.
- Silver operations generated $38.8 million in free cash flow for the quarter, and year to date $107.4 million.2 Since 2020, silver operations have generated cash flow from operations of $788 million and free cash flow of $566 million.
- Net loss applicable to common stockholders of $(15.8) million or $(0.03) per share and adjusted net income of $15.1 million or $0.03 per share.5
- Strong balance sheet with $106.8 million in cash and cash equivalents, and available liquidity of $219 million.
Environmental, Social, Governance
- Strong safety performance with an all-injury frequency rate of 1.18, the lowest in Company history.
Strategic
- Acquired ATAC Resources on July 7th for $18.8 million in Hecla stock, adding a massive land package of over 700 square miles comprised of the Rackla and Connaught properties in the Yukon.
"Our silver operations reported another solid quarter of operational and financial performance with strong free cash flow generation and our lowest all-injury frequency rate in our history," said Phillips S. Baker Jr., President and CEO. "Greens Creek continued its strong and consistent performance, Lucky Friday produced the most silver in a quarter since 2000, and with the service hoist now operational, this mine is closer to achieving 425,000 ore tons in annual throughput by year-end, and we restarted the Keno Hill mill during the quarter."
Baker continued, "Our silver mines have generated $107 million in free cash flow in the first half of the year and in excess of $560 million since 2020. With this free cash flow, we are investing to extend the mine lives and increase the production of our mines making Hecla the fastest growing established silver producer with 17 million ounces of production expected this year and about 20 million ounces by 2025, all in the U.S. and Canada."
Baker concluded, “Silver is an essential metal in powering the transition to a green economy, particularly photovoltaics, whose rapid growth is now using 15 to 20% of global annual silver production. Hecla, with our growing, long-lived, low-cost mines, is well positioned to reliably provide the silver the world needs."
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 | 2Q-2023 | 1Q-2023 | 4Q-2022 | 3Q-2022 | 2Q-2022 | YTD-2023 | YTD-2022 | |||||||||||||||||||||
FINANCIAL AND PRODUCTION SUMMARY | ||||||||||||||||||||||||||||
Sales | $ | 178,131 | $ | 199,500 | $ | 194,825 | $ | 146,339 | $ | 191,242 | $ | 377,631 | $ | 377,741 | ||||||||||||||
Total cost of sales | $ | 140,472 | $ | 164,552 | $ | 169,807 | $ | 137,892 | $ | 153,979 | $ | 305,024 | $ | 295,049 | ||||||||||||||
Gross profit | $ | 37,659 | $ | 34,948 | $ | 25,018 | $ | 8,447 | $ | 37,263 | $ | 72,607 | $ | 82,692 | ||||||||||||||
Net(loss) applicable to common stockholders | $ | (15,832 | ) | $ | (3,311 | ) | $ | (4,590 | ) | $ | (23,664 | ) | $ | (13,661 | ) | $ | (19,143 | ) | $ | (9,646 | ) | |||||||
Basic (loss) per common share (in dollars) | $ | (0.03 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.04 | ) | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.02 | ) | |||||||
Adjusted EBITDA1 | $ | 67,739 | $ | 61,903 | $ | 62,261 | $ | 26,555 | $ | 70,474 | $ | 129,642 | $ | 128,676 | ||||||||||||||
Net Debt to Adjusted EBITDA1 | 2.1 | 1.9 | ||||||||||||||||||||||||||
Cash provided by operating activities | $ | 23,777 | $ | 40,603 | $ | 36,120 | $ | (24,322 | ) | $ | 40,183 | $ | 64,380 | $ | 78,092 | |||||||||||||
Capital Expenditures | $ | (51,468 | ) | $ | (54,443 | ) | $ | (56,140 | ) | $ | (37,430 | ) | $ | (34,329 | ) | $ | (105,911 | ) | $ | (55,807 | ) | |||||||
Free Cash Flow2 | $ | (27,691 | ) | $ | (13,840 | ) | $ | (20,020 | ) | $ | (61,752 | ) | $ | 5,854 | $ | (41,531 | ) | $ | 22,285 | |||||||||
Silver ounces produced | 3,832,559 | 4,040,969 | 3,663,433 | 3,549,392 | 3,645,454 | 7,873,528 | 6,970,162 | |||||||||||||||||||||
Silver payable ounces sold | 3,360,694 | 3,604,494 | 3,756,701 | 2,479,724 | 3,387,909 | 6,965,188 | 6,075,170 | |||||||||||||||||||||
Gold ounces produced | 35,251 | 39,717 | 43,634 | 44,747 | 45,719 | 74,822 | 87,361 | |||||||||||||||||||||
Gold payable ounces sold | 31,961 | 39,619 | 40,097 | 40,443 | 44,225 | 71,580 | 85,278 | |||||||||||||||||||||
Cash Costs and AISC, each after by-product credits | ||||||||||||||||||||||||||||
Silver cash costs per ounce 3 | $ | 3.32 | $ | 2.14 | $ | 4.79 | $ | 3.43 | $ | (1.14 | ) | $ | 2.70 | $ | (0.07 | ) | ||||||||||||
Silver AISC per ounce 4 | $ | 11.63 | $ | 8.96 | $ | 13.98 | $ | 12.93 | $ | 8.08 | $ | 10.21 | $ | 7.75 | ||||||||||||||
Gold cash costs per ounce 3 | $ | 1,658 | $ | 1,775 | $ | 1,696 | $ | 1,349 | $ | 1,371 | $ | 1,725 | $ | 1,440 | ||||||||||||||
Gold AISC per ounce 4 | $ | 2,147 | $ | 2,392 | $ | 2,075 | $ | 1,669 | $ | 1,605 | $ | 2,286 | $ | 1,680 | ||||||||||||||
Realized Prices | ||||||||||||||||||||||||||||
Silver, $/ounce | $ | 23.67 | $ | 22.62 | $ | 22.03 | $ | 18.30 | $ | 20.68 | $ | 23.12 | $ | 22.45 | ||||||||||||||
Gold, $/ounce | $ | 1,969 | $ | 1,902 | $ | 1,757 | $ | 1,713 | $ | 1,855 | $ | 1,928 | $ | 1,867 | ||||||||||||||
Lead, $/pound | $ | 0.99 | $ | 1.02 | $ | 1.05 | $ | 0.95 | $ | 0.97 | $ | 1.00 | ||||||||||||||||
