HECLA MINING CO/DE/ Q1 FY2025 earnings call

Management Statement and Operational Highlights:

• Rob Krcmarov completed first six months, visited all operating mines, and initiated exploration review. Focus on four pillars: operational excellence (reinforcing continuous improvement, standardizing systems, investing in analytics/semi-automation, cost control, proactive maintenance, workforce training), portfolio optimization (evaluating assets, prioritizing Keno Hill, disciplined acquisition strategy), financial discipline (structured capital allocation, focus on free cash flow/ROI, balance sheet strength), and silver market leadership (as largest US/Canada producer with long-lived mines).
• Q1 achievements: 4.1 million ounces silver, over 34,000 ounces gold produced; Lucky Friday set milling record; Keno Hill had first profitable quarter under Hecla; Libby project on FAST-41 permitting dashboard.

Segment Performance:

• Greens Creek: Produced 2 million ounces of silver in Q1, with negative cash costs of $40.08 per ounce and negative all-in sustainable costs (ASIC) of $0.03 per silver ounce. Revenue from silver contributed 45% of the total, gold 33%, and base metals around 22%. Production guidance for 2025 remains at 8.1 million to 8.8 million ounces of silver, with cost guidance lowered significantly.
• Lucky Friday: Produced 1.3 million ounces of silver, with cash costs at $9.37 per ounce and ASIC of $20.08 per ounce. Maintained 2025 production guidance of 4.7 million to 5.1 million silver ounces but adjusted cost projections.
• Keno Hill: Produced over 770,000 ounces of silver, delivered first profitable quarter under Hecla ownership. Production guidance for 2025 is 2.7 million to 3.1 million ounces of silver, with quarterly production costs of 15 million to 17 million.
• Casa Berardi: Produced about 20,500 ounces of gold, with cash cost and ASIC per ounce as mentioned. Second half of 2025 expected to show improved economics.

Guidance:

• Maintained production and capital investment guidance for 2025 with adjustments to individual asset cost projections.
• Consolidated silver cash costs and oil and sustaining cost guidance unchanged.
• Casa Berardi's second half expected to improve economics due to higher gold prices.

Risks:

• Tariffs impacting costs of items like rebar and steel, with some indirect impact on parts sourcing; concentrates insulated from direct tariff impact currently but may see effects in 2026.
• Yukon Energy Corporation turbine repair downtime in August, expected to last 6 days, estimated to delay 90,000 ounces of silver production.
• Permitting challenges for Casa Berardi and Nevada projects, affecting timeline and potential value realization.

Question and Answer: Q: Tariffs impact on costs and parts?

A: Russell Lawlar says tariffs may increase costs for rebar and steel, but parts mostly sourced locally (Mexico, Canada, US) are generally exempt; few parts from China with long lead times in stock.

Q: Yukon Energy turbine repair downtime?

A: Carlos Aguiar says repair in August, 6 days downtime, estimated to delay 90,000 ounces of silver production.

Q: Capital allocation and Nevada potential?

A: Rob Krcmarov and Kurt Allen discuss exploration at Midas with two drill rigs, Aurora in permitting, and timeline for potential production in 4-5 years.

Q: Tariffs on Greens Creek concentrate?

A: Russell Lawlar says he'd need to get back to Dalton Baretto on options for placing Greens Creek concentrate if export tax comes into play.