Hecla Reports Fourth Quarter and Full-year 2020 Results
Hecla Mining Company (NYSE:HL) reported fourth quarter 2020 sales of $188.9 million and full-year sales of $691.9 million, marking the highest in its history. The company produced 13.5 million ounces of silver (up 7%) but saw a 23% decline in gold production to 208,962 ounces. Adjusted net income for Q4 was $13.0 million or $0.02 per share. Net debt reduced by 17% to approximately $81 million. Exploration expenses rose, reflecting increased activity at various projects, while production guidance for 2021 indicates an increase in silver production from U.S. mines.
- Fourth quarter sales of $188.9 million and full-year sales of $691.9 million, highest in company history.
- Fourth quarter adjusted net income of $13.0 million or $0.02 per share.
- Silver production increased by 7% to 13.5 million ounces in 2020.
- Net debt reduction of approximately $81 million, or 17%, from March 31, 2020.
- Lowest All-Injury Frequency Rate (AIFR) of 1.22 in company history, down 24% from 2019.
- Expected production increase from U.S. silver mines projected to rise significantly by 2023.
- Full-year gold production declined by 23% to 208,962 ounces.
- Net loss of $16.8 million for the year despite higher sales and adjusted EBITDA.
Hecla Mining Company (NYSE:HL) today announced fourth quarter and full year 2020 financial and operating results.
HIGHLIGHTS
-
Fourth quarter sales of
$188.9 million ; cash flow from operations of$64.9 million ; free cash flow$28.3 million 1 net income of$0.8 million ; adjusted net income applicable to common shareholders of$13.0 million , or$0.02 per share2; and adjusted EBITDA of$55.8 million .3 -
2020 silver production of 13.5 million ounces, up
7% and gold production of 208,962 ounces, down23% , from 2019, which was Hecla's highest annual gold production. -
2020 sales of
$691.9 million (the highest in the Company's history); cash flow from operations of$180.8 million ; free cash flow of$89.8 million 1; adjusted net income applicable to common shareholders of$23.1 million , or$0.04 per share2; net loss of$16.8 million ; and adjusted EBITDA of$224.3 million .3 - Third highest silver and gold reserves in Company's 130-year history despite significant interruptions to 2020 exploration program due to COVID-19.
- Exploration discoveries at Midas, Casa Berardi, San Sebastian, Heva Hosco, and Kinskuch expect to be further drilled in 2021.
-
Net debt reduction of approximately
$81 million , or17% , from March 31, 2020. -
Year-end cash position of
$130 million , an increase of$67 million from 2019 with the credit facility undrawn. -
All-Injury Frequency Rate (AIFR) of 1.22 for 2020, lowest in the Company's history and a reduction of
24% over 2019. - Lucky Friday returned to full production levels in the fourth quarter of 2020.
- Production guidance increases projected silver production over 2020 production.
"The COVID pandemic provided significant challenges to Hecla and the mining industry; however, due to our people and the jurisdictions we operate in, Hecla exceeded the high end of our pre-COVID silver guidance by 1.4 million ounces," said Phillips S. Baker, Jr., President and CEO. "We saw modest disruptions in Quebec and Mexico; however, these did not materially impact our business. During the year we refinanced our long-term debt now due in 2028, and through solid free cash flow generation, added cash to the balance sheet, reduced our net debt, and increased dividends."
Baker continued, "As we look to 2021, we see three significant value drivers. First, with Lucky Friday running at full production, positive results from the work at Casa Berardi, and the continued consistency of Greens Creek, we expect to grow silver production and generate significant free cash flow. Silver production from our United States silver mines is expected to go from 8 million ounces in 2018 to almost 15 million ounces by 2023, further increasing Hecla’s position as the most significant US silver producer.”
“Second, we start the year with the 3rd highest reserves in our history despite disruptions to our planned exploration and definition drilling programs due to COVID‑19, and we expect reserve growth in 2021 from a normal drilling program. Finally, Hecla’s 2021 exploration program is following up on high-grade intercepts that have the potential to expand existing or develop new high-quality deposits in some of the world’s best mining jurisdictions. Examples of this are Midas’ Green Racer Sinter target where we have made a multi-ounce gold discovery in a never before drilled target and at San Sebastian’s El Bronco vein where we are seeing high-grade over significant widths," Baker said.
FINANCIAL OVERVIEW |
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Fourth Quarter Ended |
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Twelve Months Ended |
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HIGHLIGHTS |
December 31,
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December 31,
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December 31,
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December 31,
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FINANCIAL DATA (000s except per share) |
|
|
|
|
|
|
|
|||||||||||
Sales |
$ |
188,890 |
|
|
$ |
224,945 |
|
|
|
$ |
691,873 |
|
|
|
$ |
673,266 |
|
|
Gross profit (loss) |
$ |
46,764 |
|
|
$ |
25,318 |
|
|
|
$ |
145,703 |
|
|
|
$ |
23,399 |
|
|
Income (Loss) applicable to common stockholders |
$ |
657 |
|
|
$ |
(8,114 |
) |
|
|
$ |
(17,342 |
) |
|
|
$ |
(100,109 |
) |
|
Basic and diluted loss per common share |
$ |
— |
|
|
$ |
(0.02 |
) |
|
|
$ |
(0.03 |
) |
|
|
$ |
(0.20 |
) |
|
Cash provided by operating activities |
$ |
64,901 |
|
|
$ |
57,257 |
|
|
|
$ |
180,793 |
|
|
|
$ |
120,866 |
|
|
Items impacting income (loss) applicable to common shareholders for the 2020 periods compared to 2019 include the following:
-
Gross profit for the fourth quarter was higher by
$21.4 million due primarily to higher metal prices, Casa Berardi's higher-grade underground stopes and Lucky Friday's return to full production. -
Full-year gross profit was
$122.3 million higher, principally due to lower costs and depreciation at Nevada, higher quantities of silver, lead and zinc sold and higher realized silver and gold prices. -
Exploration and pre-development expense was
$8.5 million for the fourth quarter and$18.3 million for 2020, compared to$3.0 million and$19.1 million , respectively, in 2019. The fourth quarter increase was enabled by cash flow generation at our operating mines with the increase primarily at Midas and San Sebastian. -
Ramp-up and suspension costs for the fourth quarter of
$0.8 million and$24.9 million for 2020, compared to$3.3 million and$12.1 million , respectively, for the fourth quarter and full-year of 2019. The full-year 2020 costs were higher primarily due to 1) ramp-up of Lucky Friday prior to return to full production in the fourth quarter, 2) suspension costs in Nevada, and 3) temporary suspension costs at Casa Berardi and San Sebastian in response to COVID-19. -
Losses on metal derivative contracts for the fourth quarter and 2020 of
$9.3 million and$22.1 million , respectively, compared to losses of$1.3 million and$4.0 million in the fourth quarter and 2019, respectively. During 2019, the Company settled in-the-money contracts prior to their maturity date, for cash proceeds of approximately$6.7 million , with no such early settlements in 2020. -
Foreign exchange losses of
$5.8 million and$4.6 million were recognized in the fourth quarter and 2020, respectively, compared to losses of$1.5 million and$8.2 million , respectively, in 2019. The losses were primarily due to changes in the Canadian dollar’s value relative to the U.S. dollar. -
Interest expense was
$10.7 million in the fourth quarter and$49.6 million for the full year of 2020 compared to$14.7 million and$48.4 million , respectively, for 2019. The interest expense in 2020 was primarily related to our Senior Notes. -
Income tax benefit for the fourth quarter of
$1.1 million and a small provision for the full year of 2020, compared to benefits of$4.1 million and$24.1 million , respectively, for 2019.
Cash provided by operating activities for the fourth quarter and 2020 of
Adjusted EBITDA3 of
Fourth quarter capital expenditures totaled
| Metals Prices | |||||||||||||||||
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|
Fourth Quarter Ended |
|
Twelve Months Ended |
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December 31,
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December 31,
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December 31,
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December 31,
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AVERAGE METAL PRICES |
|
|
|
|
|
|
|
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Silver - |
London PM Fix ($/oz) |
$ |
24.39 |
|
|
$ |
17.30 |
|
|
$ |
20.51 |
|
|
$ |
16.20 |
|
|
|
Realized price per ounce |
$ |
25.16 |
|
|
$ |
17.47 |
|
|
$ |
21.15 |
|
|
$ |
16.65 |
|
|
Gold - |
London PM Fix ($/oz) |
$ |
1,873 |
|
|
$ |
1,480 |
|
|
$ |
1,770 |
|
|
$ |
1,392 |
|
|
|
Realized price per ounce |
$ |
1,803 |
|
|
$ |
1,488 |
|
|
$ |
1,757 |
|
|
$ |
1,413 |
|
|
Lead - |
LME Cash ($/pound) |
$ |
0.87 |
|
|
$ |
0.92 |
|
|
$ |
0.83 |
|
|
$ |
0.91 |
|
|
|
Realized price per pound |
$ |
0.90 |
|
|
$ |
0.91 |
|
|
$ |
0.84 |
|
|
$ |
0.91 |
|
|
Zinc - |
LME Cash ($/pound) |
$ |
1.19 |
|
|
$ |
1.08 |
|
|
$ |
1.03 |
|
|
$ |
1.16 |
|
|
|
Realized price per pound |
$ |
1.27 |
|
|
$ |
1.10 |
|
|
$ |
1.03 |
|
|
$ |
1.14 |
|
|
*Realized prices are calculated by dividing gross revenues for each metal (which include the price adjustments and gains and losses on the forward contracts discussed above) by the payable quantities of each metal included in products sold during the period. |
Base Metals Forward Sales Contracts
The following table summarizes the quantities of base metals committed under financially settled forward sales contracts, other than provisional hedges (which address changes in prices between shipment and settlement with customers), at December 31, 2020:
|
Pounds Under Contract
|
|
Average Price per Pound |
||||||||
|
Zinc |
Lead |
|
Zinc |
Lead |
||||||
Contracts on forecasted sales |
|
|
|
|
|
||||||
2021 settlements |
41,557 |
|
30,876 |
|
|
$ |
1.17 |
|
$ |
0.88 |
|
2022 settlements |
18,519 |
|
— |
|
|
$ |
1.28 |
|
$ |
— |
|
The contracts represent
Foreign Currency Forward Purchase Contracts
The following table summarizes the Canadian dollars the Company has committed to purchase under foreign exchange forward contracts at December 31, 2020:
|
Currency Under Contract
|
|
Average Exchange Rate |
||
|
CAD |
|
CAD/USD |
||
2021 settlements |
129,989 |
|
|
1.32 |
|
2022 settlements |
84,754 |
|
|
1.31 |
|
2023 settlements |
52,565 |
|
|
1.32 |
|
2024 settlements |
26,446 |
|
|
1.33 |
|
OPERATIONS OVERVIEW
Overview
The following table provides the production summary on a consolidated basis for the fourth quarter and twelve months ended December 31, 2020 and 2019:
|
|
Fourth Quarter Ended |
|
Twelve Months Ended |
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|
|
December 31,
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December 31,
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December 31,
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December 31,
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PRODUCTION SUMMARY |
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|
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|
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Silver - |
Ounces produced |
3,352,336 |
|
|
3,411,988 |
|
|
13,542,957 |
|
|
12,605,234 |
|
|
|
Payable ounces sold |
3,227,951 |
|
|
3,999,013 |
|
|
12,305,917 |
|
|
11,548,373 |
|
|
Gold - |
Ounces produced |
49,014 |
|
|
74,773 |
|
|
208,962 |
|
|
272,873 |
|
|
|
Payable ounces sold |
43,144 |
|
|
85,237 |
|
|
202,694 |
|
|
275,060 |
|
|
Lead - |
Tons produced |
9,507 |
|
|
6,804 |
|
|
34,127 |
|
|
24,210 |
|
|
|
Payable tons sold |
9,160 |
|
|
7,118 |
|
|
29,108 |
|
|
19,746 |
|
|
Zinc - |
Tons produced |
14,413 |
|
|
16,185 |
|
|
63,112 |
|
|
58,857 |
|
|
|
Payable tons sold |
11,632 |
|
|
12,147 |
|
|
46,349 |
|
|
39,381 |
|
|
The following tables provide a summary of the final production, cost of sales and other direct production costs and depreciation, depletion and amortization (referred to herein as “cost of sales”), cash cost, after by-product credits (“cash cost”), per silver or gold ounce, and All in Sustaining Cost, after by-product credits (“AISC”), per silver and gold ounce, for the fourth quarter and twelve months ended December 31, 2020:
Fourth Quarter Ended |
Total |
Greens Creek |
Lucky Friday |
San Sebastian |
Casa Berardi |
Nevada Ops |
|||||||||||
December 31, 2020 |
Silver |
Gold |
Silver |
Gold |
Silver |
Silver |
Gold |
Gold |
Silver |
Gold |
Silver |
||||||
Production (ounces) |
3,352,336 |
49,014 |
2,330,664 |
10,276 |
830,200 |
182,614 |
1,159 |
37,579 |
8,858 |
— |
— |
||||||
Increase/(decrease) over 2019 |
(2)% |
(34)% |
(15)% |
(33)% |
|
(57)% |
(70)% |
|
(16)% |
N/A |
N/A |
||||||
Cost of sales (000) |
|
|
|
N/A |
|
|
N/A |
|
N/A |
|
N/A |
||||||
Increase/(decrease) over 2019 |
(6)% |
(48)% |
(17)% |
N/A |
|
(59)% |
N/A |
(8)% |
N/A |
(99)% |
N/A |
||||||
Cash costs per silver or gold ounce 4 |
|
|
|
N/A |
|
|
N/A |
|
N/A |
$— |
N/A |
||||||
Increase/(decrease) over 2019 |
|
|
|
N/A |
N/A |
|
N/A |
|
N/A |
N/A |
N/A |
||||||
AISC per silver or gold ounce 5 |
|
|
|
N/A |
|
|
N/A |
|
N/A |
$— |
N/A |
||||||
Increase/(decrease) over 2019 |
|
|
|
N/A |
N/A |
|
N/A |
|
N/A |
N/A |
N/A |
||||||
| Twelve Months Ended | Total |
Greens Creek |
Lucky Friday |
San Sebastian |
Casa Berardi |
Nevada Ops |
|||||||||||
| December 31, 2020 | Silver |
|
Gold |
Silver |
|
Gold |
Silver |
Silver |
|
Gold |
Gold |
|
Silver |
Gold |
|
Silver |
|
| Production (ounces) | 13,542,957 |
208,963 |
10,494,726 |
48,491 |
2,031,874 |
954,772 |
7,223 |
121,493 |
24,142 |
31,756 |
37,443 |
||||||
| Increase/(decrease) over 2019 |
|
(23)% |
|
(14)% |
|
(49)% |
(54)% |
(10)% |
(23)% |
N/A |
N/A |
||||||
| Cost of sales (000) |
|
|
|
N/A |
|
|
N/A |
|
N/A |
|
N/A |
||||||
| Increase/(decrease) over 2019 |
|
(33)% |
|
N/A |
|
(52)% |
N/A |
(7)% |
N/A |
N/A |
N/A |
||||||
| Cash costs per silver or gold ounce 4 |
|
|
|
N/A |
N/A |
|
N/A |
|
N/A |
|
N/A |
||||||
| Increase/(decrease) over 2019 |
|
|
|
N/A |
N/A |
|
N/A |
|
N/A |
|
N/A |
||||||
| AISC per silver or gold ounce 5 |
|
|
|
N/A |
N/A |
|
N/A |
|
N/A |
|
N/A |
||||||
| Increase/(decrease) over 2019 |
|
|
|
N/A |
N/A |
|
N/A |
|
N/A |
|
N/A |
||||||
Greens Creek Mine - Alaska
The increase in silver production for the full year resulted from higher grades. The mill operated at an average of 2,236 tons per day (tpd) for the full year. Fourth quarter production was affected by a significant weather event in December when southeast Alaska was impacted by high winds and heavy rains that caused major damage in the area and communities.
The higher cost of sales in 2020 were due to higher sales volumes. The increase in per silver ounce cash costs and AISC was primarily due to higher concentrate treatment costs and lower by-product credits, on a per-ounce basis, with these items partially offset by lower capital spending for AISC.
For the full year of 2020, Greens Creek generated cash provided by operating activities of approximately
Proven and Probable silver reserves decreased primarily due to COVID-19 limiting drilling to one-third of the amount drilled in 2019, changes to the mine plan, and less favorable smelter terms. This decline compares to average additions of nearly 8 million ounces per year for the past four years. Measured and Indicated resource increased due to reclassification of reserves and Inferred resource. Measured and Indicated Mineral Resources, inclusive of Mineral Reserves is down only
Casa Berardi - Quebec
Annual gold production decreased by
Lower quarterly and annual cost of sales were due to stripping the East Mine Crown Pillar Pit Extension (XCMP) in 2019 partially offset by increased quantities of waste and ore extracted from the pit and higher haulage costs due to deepening of the pit. However, milling and administrative costs were higher due to costs for pre-crushing of ore to allow for increased throughput, and higher costs for mill improvements, maintenance and reagents. These factors impacted mining and milling costs, along with lower gold production, resulting in increased cash costs and AISC, after by-product credits.
For the full year of 2020, Casa Berardi generated cash provided by operating activities of approximately
Proven and Probable gold reserves decreased approximately
Measured and Indicated gold resources increased
Lucky Friday Mine - Idaho
At the Lucky Friday Mine, 2.0 million and 0.8 million ounces of silver were produced in 2020 and the fourth quarter, respectively. Lucky Friday returned to full production in the fourth quarter.
The cost of sales for the fourth quarter was
Proven and Probable reserves declined
San Sebastian - Mexico
At the San Sebastian Mine, 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 for the year when in production.
The lower cost of sales and silver per ounce cash costs4 was primarily due to lower mining costs, higher by-product, partially offset by lower silver production, and for AISC, lower capital and exploration spending.
For the full year of 2020, San Sebastian generated cash provided by operating activities of approximately
The Company continues to explore this highly prospective land package and will evaluate further mining based on exploration results.
Nevada Operations
During the second half of 2020, all ore mined at Nevada Operations was stockpiled, with no ore milled and no production reported during the period. Mining of refractory ore at Fire Creek in areas with existing development was completed in the fourth quarter with most of the material shipped to a third-party processor by February 2021. The bulk test demonstrated that larger scale, more productive mining methods could be applied successfully to this material. Ground conditions were as good or better than expected and water in the test area was readily managed. The bulk test refractory ore is being processed by a third party through a tolling agreement. While the processing is not yet complete, the recovery information to date follows the grade-recovery curve established through bench testing. Metal prices increased significantly since the tolling agreement was signed, and it is no longer attractive for the third party to displace their own feed to toll. Discussions are underway with another processor with surplus capacity. Fire Creek is expected to be placed on care and maintenance in the second quarter of 2021.
SILVER AND GOLD RESERVE SUMMARY
Proven and Probable silver and gold reserves dropped
Measured and Indicated silver ounces increased
Inferred silver resources are essentially unchanged from last year with a slight drop of
Please refer to the reserves and resources table at the end of this news release for a complete breakdown of the Company's reserves and resources.
EXPLORATION AND PRE-DEVELOPMENT
Exploration
Fourth quarter exploration (including corporate development) expenses were
During the quarter, there were two new discoveries: Green Racer Sinter at Midas and the 160 Zone eastern extension at Casa Berardi.
At Midas, four core rigs intersected mineralization in five of seven targets. At the Green Racer Sinter, a target with no previous drilling located two miles east of the main mine, detailed surface mapping identified an outcrop of spicular geyserite sinter with anomalous gold. The deeper holes are encountering the same favorable host rocks as those of the historic Midas mine where mineralization had an average grade of 0.81 oz/ton gold and 11.3 oz/ton silver over an average width of 4.0 feet. The following table shows the strength of mineralization in three recent holes (the surface is at an elevation of 5,434 feet):
Drillhole |
Elevation
|
Drilled Width
|
Gold Grade
|
Silver Grade
|
DMC-371 |
4901 |
1.6 |
1.12 |
16.9 |
DMC-374 |
4537 |
4.3 |
0.34 |
7.8 |
DMC-390 |
4088 |
4.5 |
3.26 |
14.3 |
At Casa Berardi, a new discovery was made in the 160 Zone 500 feet east of the current resource blocks and the zone open in all directions. The discovery drillhole intersected 0.32 oz/ton gold over 9.5 feet estimated true width including 1.16 oz/ton gold over 2.0 feet estimated true width.
San Sebastian exploration focused on the El Tigre and El Bronco veins discovered under thick soil cover this year. So far, the veins are strong structures that in places have over 28 feet of true thickness, almost a mile of strike length down to 1,000 feet below the surface and are open. The best results to date include 44.5 oz/ton silver and 0.22 oz/ton gold over 9.5 feet estimated true width in the El Bronco vein and 16.2 oz/ton silver and 0.09 oz/ton gold over 3.5 feet estimated true width in the El Tigre vein.
Please refer to the assay results tables at the end of this news release for more complete drill assay highlights.
2021 Exploration Program
Exploration expenditures for 2021 are estimated to be
San Sebastian should also represent
Nevada exploration is targeted at
Almost
Pre-development - Montanore/Rock Creek
Pre-development spending was
At Montanore, the Kootenai National Forest’s (KNF) final Supplemental Environment Impact Study (SEIS) and Record of Decision (ROD) are expected later in 2021. At Rock Creek, the KNF partially approved the Plan of Operation to reflect the ROD and the Montana Department of Environmental Quality approved modifications to the existing Exploration License to match the ROD. Decisions on litigation challenging decisions of the US Fish and Wildlife Service and the KNF are expected later in the year.
2021 ESTIMATES6 |
||||
2021 Production Outlook |
||||
|
Silver Production
|
Gold Production
|
Silver Equivalent
|
Gold Equivalent
|
Greens Creek * |
9.5 - 10.2 |
40 - 43 |
20.5 - 21.5 |
227 - 237 |
Lucky Friday * |
3.4 - 3.8 |
N/A |
6.2 – 6.4 |
67 - 70 |
Casa Berardi |
N/A |
125 - 128 |
11.5 - 11.7 |
125 - 128 |
Nevada Operations |
N/A |
20 - 22 |
1.8 - 2.0 |
20 - 22 |
2021 Total |
12.9 - 14.0 |
185 - 193 |
40.0 - 41.6 |
439 – 457 |
2022 Total |
13.7 - 14.5 |
173 - 181 |
41.0 - 42.5 |
448 – 465 |
2023 Total |
14.2 - 15.0 |
177 - 186 |
42.5 - 44.5 |
467 - 485 |
* Equivalent ounces include Lead and Zinc production |
| 2021 Cost Outlook | |||
|
Costs of Sales
|
Cash cost, after by-product
|
AISC, after by-product credits, per
|
Greens Creek |
|
|
|
Lucky Friday |
|
|
|
Total Silver |
|
|
|
Casa Berardi |
|
|
|
Nevada Operations |
|
|
|
Total Gold |
|
|
|
2021 Capital and Exploration Outlook |
|
Capital expenditures (excluding capitalized interest) |
|
Exploration expenditures (includes Corporate Development) |
|
Pre-development expenditures |
|
DIVIDENDS
Common
On February 16, 2021, the Board of Directors declared a quarterly cash dividend of
Preferred
The Board of Directors also declared a quarterly cash dividend of
INVESTOR VIRTUAL OUTREACH
Conference Call Information
A conference call and webcast will be held today, at 9:00 a.m. Eastern Time to discuss fourth quarter and year-end 2020 financial results. You may join the conference call by dialing toll-free 1-833-350-1380 or for international by dialing 1-647-689-6934. The Conference ID is 7412488. Please dial-in and provide the Conference ID number at least 10 minutes prior to the start time to join the call and mitigate any hold times.
Hecla’s live webcast can be accessed at www.hecla-mining.com under Investors/Events & Webcasts (https://ir.hecla-mining.com/news-events/events-webcasts/default.aspx). The webcast will also be archived on the site.
One-on-One Calls
Hecla will be holding a Virtual Investor Event on Friday, February 19, from 11:30 a.m. to 1:30 p.m. Eastern Time inviting shareholders, investors, and other interested parties to schedule a personal, 30-minute virtual meeting (video or telephone) with a member of senior management. Click on the link below to schedule a call (You can also copy and paste the link into your web browser.). If you are unable to book a time, either due to high demand or for other reasons, please reach out to Jeanne DuPont at jdupont@hecla-mining.com or at 208-769-4177.
- Operations call with Lauren Roberts, SR VP and COO and senior mine management: https://calendly.com/2020-q4-vie/operations
- Finance call with Lindsay Hall, SR VP and CFO and Russell Lawlar, Treasurer: https://calendly.com/2020-q4-vie/finance
- Call with Phil Baker, President and CEO: https://calendly.com/2020-q4-vie/ceo
Planned Videocasts
Hecla will be conducting a series of videocasts commencing later in 2021 that will provide additional information on the Company, silver and the industry. These will be available on the Company’s website at www.hecla-mining.com and various social media platforms.
ABOUT HECLA
Founded in 1891, Hecla Mining Company (NYSE:HL) is a leading low-cost U.S. silver producer with operating mines in Alaska and Idaho and is a growing gold producer with an operating mine Quebec, Canada. The Company also has exploration and pre-development properties in eight world-class silver and gold mining districts in the U.S., Canada and Mexico, and an exploration office and investments in early-stage silver exploration projects in Canada.
NOTES
Non-GAAP Financial Measures
Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by United States generally accepted accounting principles (GAAP). These measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The non-GAAP financial measures cited in this release and listed below are reconciled to their most comparable GAAP measure at the end of this release.
(1) Free cash flow is a non-GAAP measure calculated as cash provided by operating activities less additions to properties, plants and equipment.
(2) Adjusted net (loss) income applicable to common shareholders is a non-GAAP measurement, a reconciliation of which to net (loss) income applicable to common stockholders, the most comparable GAAP measure, can be found at the end of the release. Adjusted net (loss) income is a measure used by management to evaluate the Company’s operating performance but should not be considered an alternative to net (loss) income as defined by GAAP. They exclude certain impacts which are of a nature which we believe are not reflective of our underlying performance. Management believes that adjusted net income (loss) per common share provides investors with the ability to better evaluate our underlying operating performance.
(3) Adjusted EBITDA is a non-GAAP measurement, a reconciliation of which to net income, the most comparable GAAP measure, can be found at the end of the release. Adjusted EBITDA is a measure used by management to evaluate the Company's operating performance but should not be considered an alternative to net income, or cash provided by operating activities as those terms are defined by GAAP and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. In addition, the Company may use it when formulating performance goals and targets under its incentive program.
(4) Cash cost, after by-product credits, per silver and gold ounce is a non-GAAP measurement, a reconciliation of which to cost of sales and other direct production costs and depreciation, depletion and amortization (sometimes referred to as "cost of sales" in this release), can be found at the end of the release. It is an important operating statistic that management utilizes to measure each mine's operating performance. It also allows the benchmarking of performance of each mine versus those of our competitors. As a primary silver mining company, management also uses cash cost, after by-product credits, per silver ounce on an aggregate basis - aggregating the Greens Creek, Lucky Friday and San Sebastian mines - to compare performance with that of other primary silver mining companies. Gold, lead and zinc produced have been treated as by-product credits in calculating silver costs per ounce. With regard to Casa Berardi and Nevada Operations, management uses cash cost, after by-product credits, per gold ounce to compare its performance with other gold mines with a by-product credit recognized for the value of their silver production. Similarly, the statistic is useful in identifying acquisition and investment opportunities as it provides a common tool for measuring the financial performance of other mines with varying geologic, metallurgical and operating characteristics. In addition, the Company may use it when formulating performance goals and targets under its incentive program.
(5) All in sustaining cost (AISC), after by-product credits, is a non-GAAP measurement, a reconciliation of which to cost of sales and other direct production costs and depreciation, depletion and amortization, the closest GAAP measurement, can be found in the end of the release. AISC, after by-product credits, includes cost of sales and other direct production costs, expenses for reclamation and exploration at the mine sites, corporate exploration related to sustaining operations, and all site sustaining capital costs. AISC, after by-product credits, is calculated net of depreciation, depletion, and amortization and by-product credits.
Current GAAP measures used in the mining industry, such as cost of goods sold, do not capture all the expenditures incurred to discover, develop and sustain silver and gold production. Management believes that all in sustaining costs is a non-GAAP measure that provides additional information to management, investors and analysts to help (i) in the understanding of the economics of our operations and performance compared to other producers and (ii) in the transparency by better defining the total costs associated with production. Similarly, the statistic is useful in identifying acquisition and investment opportunities as it provides a common tool for measuring the financial performance of other mines with varying geologic, metallurgical and operating characteristics. In addition, the Company may use it when formulating performance goals and targets under its incentive program.
Other
(6) Expectations for 2021 include silver, gold, lead and zinc production from Greens Creek, Lucky Friday, San Sebastian, Casa Berardi, and Nevada Operations converted using Au
Cautionary Statement Regarding Forward Looking Statements, Including 2021 Outlook
This news release contains “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, including Canadian securities laws. Such forward-looking state
FAQ
What were Hecla Mining's fourth quarter sales for 2020?
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