Hecla Announces 2020 Production and Cash Position

Rhea-AI Summary

Hecla Mining Company (NYSE:HL) reported its preliminary silver and gold production for Q4 and FY 2020, highlighting significant operational achievements. Key points include silver production of 13.5 million ounces (up 7%) and gold production of 208,962 ounces (down 23%). The company increased production of zinc and lead by 7% and 41%, respectively, attributed to its Lucky Friday Mine. Year-end cash position reached $131 million, and net debt was reduced by $75 million (16%). Despite operational challenges, Hecla solidified its position as a leading silver producer in the U.S.

Positive

• Silver production increased by 7% year-over-year to 13.5 million ounces, marking the second highest production since 2016.
• Reduction of net debt by approximately $75 million, or 16%, from March 31, 2020.
• Year-end cash position of $131 million with the credit facility undrawn.
• All injury frequency rate (AIFR) of 1.22 for 2020, the lowest in the company’s history, representing a 24% reduction from 2019.

Negative

• Gold production decreased by 23% from 2019, primarily due to operational suspensions linked to COVID-19.
• Production challenges at the Nevada operations, with only 31,756 ounces of gold produced in 2020 and reliance on stockpiled ore for 2021.

Hecla Mining Company (NYSE:HL) today announced its preliminary silver and gold production for the fourth quarter and full year 2020 and year-end cash position.¹

HIGHLIGHTS

• Silver production of 13.5 million ounces, an increase of 7%, second highest production only to 2016.
• Gold production of 208,962 ounces, expected lower gold production from the Nevada operation decreased production 23% from 2019, which was Hecla’s highest gold production.
• Zinc and lead production increased 7% and 41%, respectively, due to the ramp up of the Lucky Friday Mine.
• Silver equivalent production of 40.7 million ounces and gold equivalent production of 471,413 ounces.²
• Year-end cash position of $131 million with the credit facility undrawn.
• Net debt reduction of approximately $75 million, or 16%, from March 31, 2020.³
• All injury frequency rate (AIFR) of 1.22 for 2020, lowest in the Company’s history and a reduction of 24% over 2019.

“Despite the challenges of operating during the pandemic, 2020 marked a year of very strong operational performance with silver production significantly exceeding guidance,” said Hecla’s President and CEO, Phillips S. Baker, Jr. “Our U.S. silver production was 15% higher than the year before and more than 50% higher than 2018, strengthening our position as the United States largest silver producer. The strong performance allowed Hecla to reduce net debt, increase dividends, and double exploration expenditures while more than doubling last year’s cash position. At current prices, we could repeat these results in 2021.”

Greens Creek

At the Greens Creek Mine in 2020, 10.5 million ounces of silver and 48,490 ounces of gold were produced. For the fourth quarter, 2.3 million ounces of silver and 10,276 ounces of gold were produced. The mill operated at an average of 2,236 tons per day (tpd) in 2020. Fourth quarter production was affected by a significant weather event in December when southeast Alaska was impacted by historically high winds and heavy rains that caused heavy damage in the area and communities. Mr. Baker commended the team at Greens Creek for the management of this weather event and noted, “The preparation and response to this event is a testament to the excellent team at Greens Creek and their commitment to safety and the environment.”

Casa Berardi

At the Casa Berardi Mine, 121,493 and 37,580 ounces of gold were produced in 2020 and the fourth quarter, respectively. The latter represents an increase of 11,175 ounces over the third quarter due to more tons milled and higher grades. The mill operated at an average of 3,699 tpd in 2020. Overall, 2020 gold production decreased by 10%, or 12,916 ounces, compared to 2019, primarily due to the three-week suspension of operations at the mine to comply with the Government of Quebec’s COVID‑19 order in April, and downtime for planned major mill repairs in the third quarter.

1. See cautionary statement regarding preliminary statements at the end of this release.
2. Silver and gold equivalent calculation based on average actual prices for each metal in the year as follows: $20.51 for Ag, $1,770 for Au, $0.83 for Pb, and $1.03 for Zn.
3. Net debt represents a non-U.S. Generally Accepted Principles (GAAP) measurement, see cautionary language at the end of this release.

Lucky Friday

At the Lucky Friday Mine, 2.0 million and 0.8 million ounces of silver were produced in 2020 and fourth quarter, respectively. Lucky Friday achieved full production in the fourth quarter with estimated annual production in excess of 3 million ounces of silver in 2021.

San Sebastian

At the San Sebastian Mine in 2020, 1.0 million ounces of silver and 7,223 ounces of gold were produced. For the fourth quarter, 0.2 million ounces of silver and 1,159 ounces of gold were produced. Mining was completed in the third quarter and milling completed in the fourth quarter of 2020. The mill operated at an average of 474 tpd when in production. The Company continues to explore this highly prospective land package and will evaluate further mining based on exploration results.

Nevada Operations

At the Nevada operations in 2020, 31,756 ounces of gold and 37,443 ounces of silver were produced. Ore mined during the third and fourth quarters was stockpiled for expected processing in early 2021. Mining of non-refractory ore is substantially complete. Mining of refractory ore for the bulk sample test continued through the fourth quarter of 2020. Production from this test is expected to be in the range of five thousand ounces of gold in the first half of 2021.

FAQ

What were Hecla Mining's silver and gold production numbers for 2020?

Hecla Mining produced 13.5 million ounces of silver and 208,962 ounces of gold in 2020.

How did Hecla Mining's cash position change in 2020?

Hecla reported a year-end cash position of $131 million, with the credit facility undrawn.

What is the significance of Hecla Mining's net debt reduction?

Hecla reduced its net debt by approximately $75 million, or 16%, from March 31, 2020, which strengthens its financial position.

What were Hecla Mining's production figures from the Lucky Friday Mine?

The Lucky Friday Mine produced 2.0 million ounces of silver in 2020, with expected annual production over 3 million ounces in 2021.

How did COVID-19 affect Hecla Mining's production?

COVID-19 led to a three-week suspension of operations at Casa Berardi, contributing to a 23% decrease in gold production compared to 2019.