Hecla Mining Company Q3 FY2025 earnings call

• Balance sheet transformation: Net leverage improved from 1.8x to 0.3x in a year, repaid revolver, redeemed debt, and eliminated over $15M in annual interest expense.
• Operational momentum: All 4 producing assets had positive free cash flow for the second consecutive quarter. Silver production was 4.6 million ounces, up 2% from last quarter; cash costs were negative $2.03 per ounce, AISC $11.01.
• Capital allocation framework: 6 priorities including investment in safety/environmental excellence, sustaining capital, growth capital, exploration, deleveraging, and shareholder returns.
• Exploration: Substantially increase exploration budget in Nevada, reinitiate dormant projects like Rackla build in Yukon, and focus on near-mine and brownfields exploration next year.

In Q3 2025, Hecla Mining's revenue was $410 million. Silver was the primary revenue driver at 48% of total revenue, followed by gold at 37% and base metals. Greens Creek had silver production of 2.3 million ounces, gold production of 15,600 ounces, sales of $178 million, with cash costs at negative $8.50 per silver ounce and AISC of negative $2.55 per ounce, generating nearly $75 million in free cash flow. Lucky Friday had silver production of 1.3 million ounces, sales of $74.2 million, and free cash flow of $13.5 million. Keno Hill had silver production of nearly 900,000 ounces and free cash flow of $8.3 million. Casa Berardi had gold production of 25,000 ounces, cash costs of $1,582 per ounce, and AISC of $1,746 per ounce.

• Tightened production guidance for Greens Creek, Lucky Friday, Keno Hill, and Casa Berardi based on strong year-to-date performance.
• Keno Hill expected to reach commercial production around 2027 at roughly 345 to 385 tons per day, with full nameplate throughput in 2028 assuming water discharge approval from regulators.

• Inflationary factors: Competition for labor, potential tariff costs on imported components.
• Supply chain: Delays in assaying turnaround, especially during peak sampling seasons.
• Regulatory: Pending water discharge approval for Keno Hill to achieve full nameplate throughput.

Q: Can you go through inflationary factors at mine assets?

A: Competition for labor, contractors needed; some tariff costs on imported components for capital projects.

Q: What's the outlook for exploration next year and projects in Nevada?

A: Substantially increase exploration budget in Nevada, reinitiate dormant projects, focus on near-mine and brownfields, with heightened activity expected next year.

Q: When will Keno Hill be declared commercial?

A: Around 2027 at roughly 345 to 385 tons per day, full nameplate throughput in 2028 assuming water discharge approval from regulators.

Q: Regarding guidance, why not raise high end?

A: Production profiles vary; e.g., Greens Creek has variable production, models suggest Q4 within high end, and timing of shipments and hedging strategies affect price realizations