Hecla Announces 2023 Production
- Silver production exceeded 2022 levels at 14.3 million ounces, despite the temporary shutdown at the Lucky Friday mine.
- Annual gold production decreased by 14% due to Casa Berardi transitioning to an open pit mine.
- Greens Creek gold production increased by 26%.
- The Company expects to commence the ramp-up of full production and receipt of insurance payments at the Lucky Friday mine in the first quarter of 2024.
- The safety action plan at Keno Hill aims to build a strong operational foundation at the mine.
- Hecla's President and CEO, Phillips S. Baker, Jr., emphasized the company's growth strategy to deliver up to 20 million ounces of silver production by 2025.
- Lucky Friday mine's silver production was 30% lower in 2023 than in 2022 due to a fire-related suspension of production.
- Annual gold production at Casa Berardi declined by 29% due to wildfire-related closures and lower underground tonnage as the mine transitions to a surface operation.
Insights
The report from Hecla Mining Company indicates a mixed performance in their precious metals production, which is a critical element for market stakeholders. The increase in silver production, despite the challenges faced, is a positive sign for Hecla's operational resilience and could be seen as an encouraging factor for investors. The transition of Casa Berardi to an open pit mine, while reducing gold production, has improved margins, which is a key factor in assessing the company's profitability and cost management strategies. The restart of production at the Lucky Friday mine and the expected receipt of insurance payments could provide a financial buffer and facilitate a return to normal operations, potentially driving future growth.
However, the decrease in gold production and the various operational challenges, such as weather-related disruptions at Greens Creek and safety issues at Keno Hill, may raise concerns about the company's ability to maintain consistent production levels. The long-term growth strategy to deliver up to 20 million ounces of silver production by 2025 will be an important metric for investors to monitor, as it reflects the company's ambition and commitment to expanding its market presence, particularly in light of silver's relevance to the energy transition and its use in solar electricity generation.
Hecla Mining Company's preliminary financial results could have a tangible impact on its stock valuation. The marginal increase in silver production year-over-year, despite the Lucky Friday mine shutdown, suggests operational efficiency, particularly with the implementation of the patented UCB mining method. This efficiency might be appealing to investors, as it can translate into lower costs and higher margins. The anticipated insurance proceeds could improve the company's financial position in the short term, potentially enhancing investor sentiment.
On the other hand, the 14% decline in annual gold production and the lower production figures for lead and zinc could pressure revenues, although the increased margins at Casa Berardi might offset some of the impact. The company's focus on safety and operational foundation, especially at Keno Hill, indicates a commitment to sustainable practices, which could be a long-term value driver. Investors will likely scrutinize the company's ability to ramp up production at Lucky Friday and Keno Hill, as well as the successful transition of Casa Berardi to an open pit operation, when considering the stock's future performance.
The operational details provided by Hecla Mining Company offer insights into the mining sector's complexities and the company's strategic responses. The use of the UCB (Underhand Cut and Fill) mining method, which is designed to enhance safety and productivity in underground mining operations, has proven effective at Lucky Friday, yielding more silver than in previous full-year periods. This suggests that Hecla's adoption of innovative mining techniques could set an industry benchmark for both safety and efficiency.
Challenges such as weather events and safety culture improvements underscore the sector's susceptibility to external and internal factors that can disrupt operations. Hecla's proactive safety action plan at Keno Hill exemplifies the industry's increasing focus on safety standards, which can have significant implications for operational continuity and regulatory compliance. The transition of Casa Berardi from underground to surface mining reflects a strategic shift that is becoming more common in the industry, as companies seek to optimize resource extraction and manage costs.
Lucky Friday restarts production
HIGHLIGHTS
- Silver production of 14.3 million ounces exceeded 2022 production of 14.2 million ounces, despite the temporary shutdown at the Lucky Friday mine since August 2023
-
As expected, annual gold production decreased
14% as Casa Berardi transitions to an open pit mine; Greens Creek gold production increased26% - Commenced restart at the Lucky Friday; ramp-up to full production and receipt of insurance payments expected to commence in the first quarter of 2024
- Keno Hill produced 1.5 million ounces, with the Bermingham deposit achieving the highest mined tonnage in December; initiated a safety action plan to build a strong operational foundation at the mine
"Hecla faced multiple challenges in 2023 with the fire at the Lucky Friday mine and improving the safety culture at Keno Hill, but despite these challenges, silver production exceeded last year as Greens Creek delivered another strong year, Lucky Friday's production through July with our patented UCB method produced more silver than the mine typically produced in a full year with the old mining method, and the roughly half year of production at Keno Hill shows its potential to be a meaningful producer,” said Phillips S. Baker, Jr., Hecla's President and CEO. "As planned, we began the transition of Casa Berardi’s production to surface mining, which lowered production but increased margins."
Baker continued, “We look forward to a strong year in 2024 as we execute our growth strategy to deliver up to 20 million ounces of silver production by 2025. With silver's critical role in energy transition and its application in solar electricity generation, Hecla will play an important role in producing silver as the world’s fastest-growing established silver producer and the dominant producer of silver in the
OPERATIONS
Greens Creek
The Greens Creek mine produced 9.7 million ounces of silver and 60,896 ounces of gold for the year. Fourth quarter production was 2.3 million ounces of silver and 14,651 ounces of gold. Throughput for the quarter was 2,393 tons per day (tpd),
Lucky Friday
The Lucky Friday mine produced 3.1 million ounces of silver in 2023,
The mine restarted production on January 9th and is expected to ramp up to full production in the first quarter. The plans to resume production were completed on schedule and involved developing a new secondary egress consisting of a ramp of 1,600 feet and a 290-foot vertical escapeway. The Company received a favorable coverage determination letter and expects to start receiving insurance proceeds during the first quarter.
Keno Hill
Keno Hill produced 1.5 million ounces of silver in 2023, with 608,301 ounces produced in the fourth quarter. Throughput for the quarter averaged 214 tpd with silver grades of 32 ounces per ton. As safety has improved, so has mining, with Bermingham achieving the highest production in December, exceeding 9,500 tons mined. Ore inventory at the end of the year was approximately 3,000 tons at a silver grade of 27 ounces per ton.
Hecla's injury-free standard drives the pace of production and development at Keno Hill. A safety action plan, which will be executed over the year, has been initiated, focusing on training, supervision, mining practices, and implementation of the safety processes.
Casa Berardi
The Casa Berardi mine produced 90,363 and 22,517 ounces of gold in 2023 and the fourth quarter, respectively. As expected, annual gold production declined by
PRODUCTION SUMMARY
|
Three Months Ended |
|
Twelve Months Ended |
|
||
|
December 31, |
September 30, |
|
December 31, |
December 31, |
|
|
2023 |
2023 |
|
2023 |
2022 |
|
Production |
|
|
Increase/
|
|
|
Increase/
|
Silver (oz) |
2,935,632 |
3,533,704 |
(17)% |
14,342,863 |
14,182,987 |
1 % |
Gold (oz) |
37,168 |
39,269 |
(5)% |
151,259 |
175,807 |
(14)% |
Lead (tons) |
5,282 |
8,276 |
(36)% |
40,347 |
48,250 |
(16)% |
Zinc (tons) |
12,669 |
14,980 |
(15)% |
60,579 |
63,463 |
(5)% |
Greens Creek - Silver (oz) |
2,260,027 |
2,343,192 |
(4)% |
9,731,752 |
9,741,935 |
(0)% |
Greens Creek - Gold (oz) |
14,651 |
15,010 |
(2)% |
60,896 |
48,217 |
26 % |
Lucky Friday - Silver (oz) |
61,574 |
475,414 |
(87)% |
3,086,119 |
4,412,763 |
(30)% |
Keno Hill - Silver (oz) |
608,301 |
710,012 |
(14)% |
1,502,577 |
- |
NA |
Casa Berardi - Gold (oz) |
22,517 |
24,259 |
(7)% |
90,363 |
127,590 |
(29)% |
(1) See the cautionary statement regarding preliminary statements at the end of this release. |
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(2) Silver and gold equivalent calculation based on the respective average annual metal prices as follows: |
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ABOUT HECLA
Founded in 1891, Hecla Mining Company (NYSE: HL) is the largest silver producer in
Cautionary Statements Regarding Estimates and Forward-Looking Statements
All measures of the Company's fourth quarter and full year 2023 operating results contained in this release are preliminary and reflect the Company’s expected results as of the date of this release. Actual reported fourth quarter and full year 2023 results are subject to management's final review as well as review by the Company's independent registered accounting firm and may vary significantly from current expectations because of a number of factors, including, without limitation, additional or revised information and changes in accounting standards or policies or in how those standards are applied.
Statements made or information provided in this news release that are not historical facts are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbor created by such sections and other applicable laws, and "forward-looking information" within the meaning of Canadian securities laws. When a forward-looking statement expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, such statements are subject to risks, uncertainties, and other factors, which could cause actual results to differ materially from future results expressed, projected, or implied by the forward-looking statements. Forward-looking statements often address our expected future business and financial performance and financial condition and often contain words such as “anticipate,” “intend,” “plan,” “will,” “could,” “would,” “estimate,” “should,” “expect,” “believe,” “project,” “target,” “indicative,” “preliminary,” “potential” and similar expressions. Forward-looking statements in this news release may include, without limitation: (i) Casa Berardi will transition to a complete surface operation by the end of this year; (ii) the Company will produce up to 20 million ounces of silver by 2025; (iii) the Company will soon be the dominant producer of silver in
In addition, material risks that could cause actual results to differ from forward-looking statements include but are not limited to: (i) gold, silver and other metals price volatility; (ii) operating risks; (iii) currency fluctuations; (iv) increased production costs and variances in ore grade or recovery rates from those assumed in mining plans; (v) community relations; and (vi) litigation, political, regulatory, labor and environmental risks. For a more detailed discussion of such risks and other factors, see the Company's 2022 Form 10-K filed on February 17, 2023 for a more detailed discussion of factors that may impact expected future results. The Company undertakes no obligation and has no intention of updating forward-looking statements other than as may be required by law.
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Anvita M. Patil
Vice President – Investor Relations and Treasurer
Cheryl Turner
Communications Coordinator
800-HECLA91 (800-432-5291)
Investor Relations
Email: hmc-info@hecla.com
Website: www.hecla.com
Source: Hecla Mining Company
FAQ
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