HL

• Financial Position

  • The company ended Q2 2026 with $483 million in cash, no long-term debt outside of capital leases, and a fully undrawn $225 million revolving credit facility, marking the strongest balance sheet in Hecla's history
  • Consolidated revenue from continuing operations was $334 million, adjusted EBITDA was $199 million (more than double the $94 million reported a year prior), operating cash flow was $175 million, and consolidated free cash flow was $136 million (the second best quarter on record, near the prior quarter's record of $144 million)
  • All three operating mines generated free cash flow in Q2 2026
  • Net income from continuing operations was $118 million, or 18 cents per share
  • The company's cost structure is structurally insulated from energy price volatility: fuel accounts for only 3% of consolidated costs due to high-grade underground operations with low diesel consumption per ounce, and most power comes from renewable hydropower decoupled from fossil fuel price swings

• Operational Safety & Performance

  • Consolidated Total Recordable Injury Frequency Rate (TRIFR) improved to 1.57 from 2.07 in Q1 2026, reflecting ongoing commitment to safe operations; the company held its annual safety day in June 2026
  • Total company silver production was 4.2 million ounces in Q2 2026, up 8% quarter-over-quarter
  • The Q2 2026 revenue decline from Q1's record was driven by lower metal prices and timing of silver concentrate shipments at Greens Creek: unsold Q2 inventory shipped in early August 2026 and will be recognized in Q3 results

• Growth Project Updates

  • Greens Creek Pyrite Concentrate Circuit: Early-stage engineering/metallurgical studies are advancing for a new circuit to extract additional metals from existing mill tailings. The project is low capital intensity, with estimated capex of $40-$60 million and incremental annual operating costs of $10-$15 million. If approved, it would add 1-1.2 million ounces of silver and 10,000-15,000 ounces of gold in annual production, with first production targeted between Q4 2027 and H1 2028, and is expected to exceed the company's 12-15% return on invested capital threshold
  • Greens Creek Tailings Reprocessing Project: The existing tailings facility contains 51 million ounces of silver and 600,000 ounces of gold, with an in-situ value of ~$6.1 billion at June 30, 2026 metal prices. Phase three metallurgical test work with a specialized vendor began in August 2026, expected to complete in Q3 2026, which will determine the project's path forward. It would also be a low-capital project if viable
  • Midas Restart (Nevada): The company is advancing evaluation of a hub-and-spoke model using the existing permitted on-site mill to process ore from Midas and potentially other regional assets like Hollister. Recent exploration has identified two new high-grade gold-silver veins, and the project remains on track for pre-development work
  • Keno Hill (Yukon): The company received approval for its tailings storage facility expansion in Q2 2026, a key milestone for long-term expansion. The mine is currently operating at a sustained lower rate while completing permitting and infrastructure work to support future higher production. Recent exploration extended a high-grade silver trend to 800 feet of strike length, remaining open in both directions, near the historic 96-million-ounce Hector Calumet mine
  • Exploration: The 2026 full-year exploration budget remains a record $55 million, allocated to near-mine programs, Nevada regional exploration (Midas, Aurora, Hollister), and early-stage generative exploration. Drilling at Aurora is scheduled to begin mid-August 2026, with initial results expected in fall 2026; Aurora is a past high-grade producer with an existing on-site mill

• Greens Creek: 2026 full-year production guidance was upgraded to 8-8.3 million ounces of silver (from prior lower guidance) and 51,000-55,000 ounces of gold. Costs applicable to sales are guided to $240 million, with cash costs of negative $12.15 to negative $12 per ounce and AISC of negative $4.25 to negative $3.75 per ounce (both after byproduct credits, both improved from prior guidance)
• Lucky Friday: 2026 full-year silver production guidance was tightened to 4.9-5.2 million ounces. Cash costs are lowered to $9-$9.75 per ounce, while AISC is modestly higher at $20.50-$26 per ounce, reflecting higher planned sustaining capital investments. The surface cooling project remains on track for completion in September 2026
• Keno Hill: 2026 full-year silver production guidance is set to 2.2-2.6 million ounces, reflecting the deliberate slow pace of operation while completing permitting and infrastructure work. Management expects Q3 2026 production to remain similar to Q2, with slight improvements in Q4 2026. Commercial production ramp-up to higher levels is targeted for the end of 2029, conditional on permit approvals by mid-2029
• Full-year 2026 consolidated free cash flow projection: At $50 silver and $3,500 gold (below current spot prices), the company projects ~$500 million in full-year free cash flow; at $75 silver and $4,500 gold (above current spot prices), it projects ~$700 million; at $100 silver and $5,500 gold, it projects nearly $800 million, highlighting significant operating leverage

1. Greens Creek: Produced 2.1 million ounces of silver and over 14,000 ounces of gold in Q2 2026. Costs applicable to sales were $50 million, with negative cash costs of $17.11 per ounce and negative All-In Sustaining Cost (AISC) of $10.71 per ounce (after byproduct credits). Site-level quarterly free cash flow hit a new record of $130 million. Revenue contribution across the company: silver accounted for 68% of total mine revenue, gold 14%, with the remainder from base metal byproducts, and Greens Creek contributes the largest share of the company's free cash flow.
2. Lucky Friday: Produced a new quarterly record of 1.5 million ounces of silver in Q2 2026 on higher mill grades. Costs applicable to sales were $35 million, with cash costs of $3.95 per ounce and AISC of $17.8 per ounce (after byproduct credits). Site-level quarterly free cash flow hit a new record of $88 million.
3. Keno Hill: Produced 625,000 ounces of silver in Q2 2026, up from 500,000 ounces in Q1 2026. Cash flow from operations was $18 million, and free cash flow was nearly $15 million, marking the fifth consecutive quarter of positive free cash flow at this site.

• Project-specific uncertainty: All growth projects are still in early stages of study; production volumes, capital costs, and returns are preliminary and subject to change as engineering and test work advances
• Permitting risk: Key permits for Keno Hill expansion and potential new development at Midas and other projects are required, and timing is not fully within the company's control, dependent on regulatory review and stakeholder consultation, which can extend timelines beyond initial projections
• Metal price volatility: Profit sharing at Lucky Friday is tied to silver prices, leading to variable unit costs as silver prices fluctuate; overall financial performance is dependent on precious metal prices, which can be volatile
• Exploration risk: Discovery of viable mineral resources is not guaranteed, and even successful discoveries require significant time and investment to develop into producing operations
• Energy price volatility: While the company's cost structure is more insulated than peers, sustained high energy prices could still put upward pressure on operating costs

Q: Heiko Ehle (HC Wainwright) asked about how silver price changes impact staff profit sharing (specifically at Lucky Friday) and if there are any unannounced large capital projects coming in 2027-2028. / A: Management confirmed that profit sharing tied to silver prices is only material at Lucky Friday; higher silver prices increase this cost, while lower prices reduce it, with the current guidance incorporating moderated silver price assumptions relative to early 2026. For future capex, there are no large unannounced major expansion projects. The largest planned investments are the low-capex pyrite concentrate circuit at Greens Creek, the potential low-capex Midas restart (leveraging existing owned mill infrastructure), and small tailings facility and infrastructure investments at existing sites.

Q: Cosmo Chu (CIBC) asked for clarification on the discrepancy between the sum of individual mine free cash flows and the corporate consolidated free cash flow, as well as details on Keno Hill's 2026 production guidance and commercial production timing. / A: Management explained that individual mine free cash flow adds back site-level exploration expense, which is included as a cash outflow in consolidated corporate free cash flow; higher exploration spending in Q2 explains the discrepancy, which is just timing and working capital variation. For Keno Hill, Q2 and Q3 2026 production are expected to run at ~600,000 ounces per quarter, with the 2.2-2.6 million ounce full-year guidance reflecting this pace. Commercial ramp-up to higher production is targeted for the end of 2029, conditional on receiving key permits by mid-2029, which is the current timeline despite being slower than initial projections.

Q: Josh Wolfson (RBC Capital Markets) asked what drove Lucky Friday's Q2 record high grades and what the impact of the upcoming surface cooling project completion will be. / A: Management confirmed that the higher Q2 grades were the result of planned timing of mine development, not a sustained new production level; grades are expected to revert to long-term averages for the rest of 2026. The cooling project, on track for September completion, is designed to improve working conditions at deeper mine levels, which is expected to support long-term productivity, though specific productivity improvements cannot be quantified yet.

Q: Kevin O'Halloran (BMO Capital Markets) asked what drove the improved AISC guidance, and what permitting and reserve changes are expected for the Greens Creek pyrite circuit. / A: Management explained the lower AISC guidance comes from higher than expected byproduct prices (gold and zinc) at Greens Creek, stronger year-to-date production, and better cost control at Lucky Friday, partially offset by higher planned second half capital spending due to construction seasonality. For the pyrite circuit, only minimal incremental permitting is required with no expected major delays; the project will increase silver recoveries from existing ore, and it is likely that some existing resources will be converted to reserves as a result, though quantification is not yet complete.

Q: Dalton Barreto (Canaccord) asked about potential consolidation in the Silver Valley near Lucky Friday, and whether Hecla would pursue acquisitions of adjacent new producers. / A: Management stated that the company is primarily focused on unlocking inherent upside in its existing assets, including Lucky Friday which has seen little meaningful exploration since 2011 and is currently the focus of new exploration work. While Hecla will consider compelling, value-accretive consolidation opportunities if they arise, management prioritizes investment in its existing owned and understood assets with already in-place infrastructure.