We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type |
---|---|---|---|
Hecla Mining Company | NYSE:HL | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 5.59 | 0 | 01:00:00 |
Hecla Mining Company (NYSE:HL) today announced a second quarter net loss applicable to common shareholders of $26.8 million, or $0.07 per share, and a loss after adjustments applicable to common shareholders of $17.6 million, or $0.05 per share.1
SECOND QUARTER HIGHLIGHTS AND SIGNIFICANT ITEMS
“Despite lower silver prices, we continue to advance growth projects like San Sebastian and #4 Shaft at Lucky Friday for their potential to increase production of high-grade ounces at low cash costs, after by-product credits,” said Phillips S. Baker, Jr., Hecla’s President and CEO. “Our assets, particularly Greens Creek with its recent improvements in recovery, have allowed us to weather the metals price weakness, and we retain the ability to reduce costs and programs if prices remain weak or go lower. With expected mining at San Sebastian early in 2016, and, combined with the deeper Lucky Friday in three years, we anticipate the addition of significant additional cash flow, further strengthening us going forward.”
(1) Loss after adjustments applicable to common shareholders represents a non-US Generally Accepted Accounting Principles (GAAP) measurement, a reconciliation of which to net income (loss) applicable to common shareholders (GAAP), the most comparable GAAP measure, can be found at the end of the release. (2) Adjusted EBITDA is a non-GAAP measurement, a reconciliation of which to net income (loss), the most comparable GAAP measure, can be found at the end of the release. (3) Cash cost, after by-product credits, per silver and gold ounce represents a non-GAAP measurement, a reconciliation of which to cost of sales and other direct production costs and depreciation, depletion and amortization, the most comparable GAAP measures, can be found at the end of the release.
FINANCIAL OVERVIEW
Net loss applicable to common shareholders for the second quarter was $26.8 million, or $0.07 per share, compared to net loss applicable to common shareholders of $14.5 million, or $0.04 per share, for the same period a year ago, and was impacted by the following items:
Operating cash flow was $4 million higher than the second quarter 2014 due to the timing of concentrate shipments at Greens Creek contributing $7.3 million and the advance settlement of financially settled base metal forward contracts contributing $12 million.
Capital expenditures (excluding capitalized interest) at the operations totaled $32 million for the second quarter. Expenditures were $11.4 million at Lucky Friday, $12.1 million at Greens Creek and $8.6 million at Casa Berardi.
Metals Prices
The average realized silver price in the second quarter was $16.32 per ounce, 17% lower than the $19.62 price realized in the second quarter of 2014. Realized gold and lead prices also decreased by 8% and 6%, respectively, from the second quarter of 2014. The average realized zinc price rose slightly to $0.96, up 2% from the prior year period.
Second Quarter Ended Six Months Ended June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 AVERAGE METAL PRICES Silver - London PM Fix ($/oz) $ 16.41 $ 19.62 $ 16.56 $ 20.06 Realized price per ounce $ 16.32 $ 19.62 $ 16.83 $ 19.83 Gold - London PM Fix ($/oz) $ 1,193 $ 1,288 $ 1,206 $ 1,291 Realized price per ounce $ 1,194 $ 1,291 $ 1,208 $ 1,295 Lead - LME Cash ($/pound) $ 0.88 $ 0.95 $ 0.85 $ 0.95 Realized price per pound $ 0.94 $ 1.00 $ 0.89 $ 0.99 Zinc - LME Cash ($/pound) $ 1.00 $ 0.94 $ 0.97 $ 0.93 Realized price per pound $ 0.96 $ 0.94 $ 0.95 $ 0.92Base Metals Forward Sales Contracts
The following table summarizes the quantities of base metals committed under financially settled forward sales contracts at June 30, 2015:
Pounds Under Contract Average Price (in thousands) per Pound Zinc Lead Zinc Lead CONTRACTS ON PROVISIONAL SALES 2015 settlements 25,298 5,567 $ 0.97 $ 0.82 CONTRACTS ON FORECASTED SALES 2015 settlements 13,228 — $ 0.88 N/A 2016 settlements 20,779 — $ 0.95 N/AThe contracts represent 11% of the forecasted payable zinc production at an average price of $0.93 per pound. With advanced settlement of financially settled base metal forward contracts, the forecasted payable zinc and lead remaining under contract have declined from 101.9 million pounds of zinc and 86.6 million pounds of lead committed at June 30, 2014 to 34.0 million pounds of zinc and no lead at June 30, 2015.
OPERATIONS OVERVIEW
Overview
The following table provides the production and cash cost, after by-product credits, per silver and gold ounce summary for the second quarters ended June 30, 2015 and 2014:
Second Quarter and Six Months Ended Second Quarter and Six Months Ended June 30, 2015 June 30, 2014 Production (ounces)Increase/(decrease) over2014
Cash costs, afterby-product credits,per silver or goldounce1,2
Production (ounces)Cash costs, afterby-product credits,per silver or goldounce1,2
Q2 6 Mos Q2 6 Mos Q2 6 Mos Q2 6 Mos Q2 6 Mos Silver 2,477,150 5,355,747 (2)% 7% $5.61 $5.24 2,515,835 5,007,688 $5.34 $4.59 Gold 44,692 85,342 3% (5)% $832 $896 43,554 89,822 $952 $917 Greens Creek: Silver 1,856,125 3,892,091 10% 12% $3.30 $3.27 1,689,183 3,476,320 $3.52 $2.52 Gold 13,753 28,992 (8)% (3)% N/A N/A 14,931 29,940 N/A N/A Lucky Friday 613,474 1,450,193 (25)% (5)% $12.58 $10.55 820,786 1,520,391 $9.10 $9.33 Casa Berardi3 30,939 56,350 8% (6)% $832 $896 28,623 59,882 $952 $917 (1) Cash cost, after by-product credits, per silver or gold ounce represents a non-GAAP measurement, a reconciliation of which to cost of sales and other direct production costs and depreciation, depletion and amortization, the most comparable GAAP measures, can be found at the end of the release. (2) Cash cost, after by-product credits, per gold ounce is only applicable to Casa Berardi production. Gold produced from Greens Creek is treated as a by-product credit against the silver cash cost. (3) Casa Berardi also produced 7,551 ounces of silver in the second quarter of 2015, which is treated as a by-product credit against the gold cash cost.The following table provides the production summary on a consolidated basis for the second quarter and six months ended June 30, 2015 and 2014:
Second Quarter Ended Six Months Ended June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 PRODUCTION SUMMARY Silver - Ounces produced 2,477,150 2,515,835 5,355,747 5,007,688 Payable ounces sold 1,986,407 2,216,264 4,912,942 4,405,967 Gold - Ounces produced 44,692 43,554 85,342 89,822 Payable ounces sold 40,237 40,513 80,032 84,478 Lead - Tons produced 9,525 10,229 19,403 19,864 Payable tons sold 7,128 8,654 15,753 16,234 Zinc - Tons produced 17,515 17,383 33,602 34,474 Payable tons sold 12,191 9,767 23,334 23,270Greens Creek Mine - Alaska
Greens Creek’s second quarter production of 1.9 million ounces of silver exceeded the second quarter of 2014 by 10%, while gold production of 13,753 ounces was 8% less. The higher silver production was a result of higher recoveries and grade, partially offset by slightly lower tonnage. Silver recoveries increased 8%, or 5.6 percentage points, to 75.4% over the prior year period. The improvement is a result of a change implemented in late 2014 to the flotation circuit to more efficiently scalp additional lead concentrate directly to final concentrate, and by introducing CO2 for pH control in the lead flotation circuit. The reduction in gold production was the result of lower tonnage and grade partially offset by recoveries that increased due to the plant improvements. The mill operated at an average of 2,194 tons per day (tpd) in the second quarter.
As a result of higher grades and recoveries, the Company now expects Greens Creek to produce 7.7 to 8.0 million ounces of silver, an increase over the previous estimate of 7.3 million ounces.
The cash cost, after by-product credits, per silver ounce of $3.30 decreased from $3.52 in the second quarter 2014.1 The per ounce cost was beneficially impacted by lower operating costs and negatively impacted by lower by-product credits. Power costs were similar to the 2014 period due to higher precipitation levels in southeast Alaska in both cases resulting in availability of less expensive hydroelectric power, a condition that is expected to last through the next quarter. Treatment costs were lower as a result of lower realized silver prices, as treatment costs include the value of silver not payable to the company through the smelting process. Mining costs per ton increased by 1% due to lower production, and milling costs per ton decreased 2% due to slightly lower labor costs and various other variances partially offset by lower production. The Company now expects Greens Creek to produce silver in 2015 at a cash cost, after by-product credits of $3.75 per ounce, a reduction from the previous estimate of $4.50 per ounce.
Lucky Friday Mine - Idaho
Lucky Friday’s second quarter silver production of 613,474 ounces was 25% lower than the second quarter of 2014 due to lower tonnage and grade resulting from a failure of the underground booster fan reducing the ventilation capacity of the mine, leading to the temporary closure of a higher-grade production stope. Lucky Friday has returned to near normal production rates by extending the work schedule to seven days per week from six, but is mining lower grade material until the fan is replaced, expected to be in the fourth quarter. In addition, there are 15 days of scheduled downtime in the third quarter for hoist mechanical maintenance. The mill operated at an average of 792 tpd in the second quarter.
The mine is now expected to produce 2.8 to 3.0 million ounces of silver in 2015, a reduction over the previous estimate of 3.2 million ounces.
The cash cost, after by-product credits, per silver ounce of $12.58, increased from $9.10 per ounce in the second quarter of 2014.¹ This increase was principally due to lower production and realized metals grades relating to ventilation upgrades and lower by-product credits. The Company now expects Lucky Friday to produce silver in 2015 at a cash cost, after by-product credits, of $10.75 per ounce, an increase over the previous estimate of $8.75 per ounce.
#4 Shaft, a key growth project, has been excavated approximately 2,900 feet below the shaft collar to the 7835 level. The project is more than 85% complete and is expected to be finished in the fourth quarter of 2016. The total estimated completion cost of #4 Shaft is approximately $225 million, with $184 million already spent through the second quarter of 2015. As of June 30, 2015, the #4 Shaft team has worked 1,321 days without a lost-time accident.
Casa Berardi - Quebec
Casa Berardi’s second quarter gold production of 30,939 ounces was 8% higher than the second quarter of 2014 because of higher grades and tonnage, partially offset by lower recovery. The mine experienced higher grades as a result of mine sequencing. Although recoveries relative to the 2014 period decreased to 86% from 90% due to the presence of arsenopyrite in some of the 118 Zone ore, adjustments made to the plant in 2015 are expected to contribute to recoveries increasing to 87% during the second half of the year. The mill operated at an average of 2,407 tpd in the second quarter.
With expectations for additional recovery improvements, and the planned addition of higher-grade stopes in Zone 123 in the fourth quarter, the mine is expected to meet its 130,000 gold ounce target for the year.
(1) Cash cost, after by-product credits, per silver and gold ounce represents a non-GAAP measurement, a reconciliation of which to cost of sales and other direct production costs and depreciation, depletion and amortization, the most comparable GAAP measures, can be found at the end of the release.
The cash cost, after by-product credits, per gold ounce of $832, decreased from $952 in the second quarter of 2014 due to higher production and the weaker Canadian dollar.1
EXPLORATION AND PRE-DEVELOPMENT
Expenditures
Exploration and pre-development expenses were $4.6 million and $1.6 million, respectively, in the second quarter of 2015, increases of about $1.5 million and $1.2 million compared to the second quarter 2014 as a result of increased spending at the San Sebastian property. Full year exploration and pre-development expenses are expected to be about $24 million, an increase from the previous expectation of $18 million principally due to increased activity at San Sebastian.
San Sebastian - Mexico
Hecla has secured the use of a Merrill-Crowe processing plant near Velardeña in the State of Durango, Mexico, as announced on July 15, 2015. Under the terms of the agreement, Hecla has exclusive use of the mill for 18 months, with the potential to increase for up to another 12 months. Located within 100 miles of San Sebastian, the mill was previously used by Hecla to process ore when it mined on the property from 2001 to 2005.
The mill has been idle for several years and requires some rehabilitation and updating to meet the standard Hecla uses for environmental protection and best practices in milling standards.
A Preliminary Economic Assessment (PEA) is expected to be completed by the end of the third quarter, but does not include results of the recent in-fill drilling program described below.
There has been significant drilling success over the past two years on the near-surface East Francine, Middle and North veins at the San Sebastian project, and the project is quickly advancing to open pit mine production. The East Francine, Andrea, Middle and North veins now define nearly 5.0 miles of mineralized strike length and are open along strike and at depth. The East Francine Vein is the faulted extension of the past-producing, high-grade Francine Vein which from 2001 to 2005 was one of the highest-grade producers in Mexico.
The East Francine Vein has currently been traced for over 1,600 feet along strike and to 500 feet of depth. The near-surface, high-grade zones are characterized as being silver and gold dominant, supergene enriched and oxidized (cyanide soluble). An in-fill drill program of the main mineralized shoot has demonstrated the continuity of the vein structure and increased resource confidence to measured and indicated categories in the proposed open pit areas. Relative to the initial drilling, the assay results of the in-fill program are generally about 3.3 feet wider than expected and returned some extremely high grades that are consistent with previous drilling. The drilling also appears to extend the high-grade area further along strike to the east and west, potentially expanding the open pit resource. Assay results from the shallow East Francine Vein in-fill drill program include 1.18 oz/ton gold and 358.7 oz/ton silver over 18.6 feet, 0.78 oz/ton gold and 120.3 oz/ton silver over 15.1 feet, 0.87 oz/ton gold and 160.8 oz/ton silver over 11.5 feet, and 0.26 oz/ton gold and 25.4 oz/ton silver over 18.7 feet.
(1) Cash cost, after by-product credits, per silver and gold ounce represents a non-GAAP measurement, a reconciliation of which to cost of sales and other direct production costs and depreciation, depletion and amortization, the most comparable GAAP measures, can be found at the end of the release.
The Middle Vein has been traced for nearly 7,000 feet along strike and to a depth of over 1,000 feet. Shallow in-fill drilling of the Middle Vein confirmed the continuity of the vein mineralization and includes intercepts of 0.57 oz/ton gold and 157.3 oz/ton silver over 7.3 feet, 0.24 oz/ton gold and 26.9 oz/ton silver over 5.5 feet, and 0.19 oz/ton gold and 25.5 oz/ton silver over 5.0 feet. Although assay results are not complete, there appears to be a slight improvement in grade over previous drilling. Exploration drilling continues to define a new zone of near-surface mineralization to the southeast, past the San Ricardo Fault. The zone is slightly deeper and shallower dipping than the Middle Vein to the west of the fault assay and intervals include 0.10 oz/ton gold and 13.2 oz/ton silver over 7.0 feet, and 0.02 oz/ton gold and 11.1 oz/ton silver over 8.9 feet.
The North Vein has a mineralized trend that extends over 3,500 feet along strike and 700 feet to depth and remains open along strike in both directions and at depth. The North Vein in-fill drilling intercepts have returned grade results that are consistent with the initial drilling. These assay intervals include 0.84 oz/ton gold and 16.8 oz/ton silver over 2.6 feet, and 0.69 oz/ton gold and 10.1 oz/ton silver over 3.1 feet. On the North Vein some of the deeper exploration intercepts to the south east include 0.10 oz/ton gold and 14.8 oz/ton silver over 4.1 feet and 0.04 oz/ton gold and 11.7 oz/ton silver over 5.0 feet.
Casa Berardi - Quebec
At Casa Berardi, up to seven drills have been operating underground in an effort to refine current stope designs and resources in the 118, 123, 124 and Southwest zones, and exploration drilling has extended mineralization on the 124 Zone and newly discovered 117 Zone. In-stope and definition drilling of the upper 118 Zone from the 530 level intersected a 15 to 55-foot wide shear zone that includes mineralized intervals of 0.54 oz/ton gold over 26.2 feet and 0.33 oz/ton gold over 19.0 feet. Mineralization is open and deeper drilling suggests the zone continues to plunge to the west. Drilling from the 910 level on the lower 118 Zone intersected a lens grading 0.55 oz/ton gold over 15.7 feet and 0.36 oz/ton gold over 17.7 feet and remains open to depth.
Drilling has identified multiple, stacked high-grade lenses of the 123 Zone that represent at least 1,600 feet of continuous down-dip mineralization with an average strike length of 450 feet. Definition and step-out drilling at the bottom of the 123 Zone resource has linked high-grade mineralized structures at the 850 level that are open at depth and to the west. Recent intersections of quartz-dominant zones include 1.1 oz/ton gold over 18.4 feet (123-01), 1.2 oz/ton gold over 11.2 feet (123-01), 1.8 oz/ton gold over 15.7 feet (123-02), 1.6 oz/ton gold over 10.5 feet (123-03) and 1.2 oz/ton gold over 17.7 feet (123-03). Future drilling is expected to continue to fill the gaps on the 123-01 and 123-03 lenses and extend the mineralization further east and at depth on the 123-04 and 123-11 lenses. The close proximity of these new lenses to mine infrastructure is expected to allow near-term production from these areas.
Exploration drilling from the 810 level of the newly defined 117 Zone has extended gold mineralization both north and south of the Casa Berardi Fault for over 300 feet down-plunge. Recent drill results include 0.64 oz/ton gold over 12.1 feet in iron formation north of the Casa Berardi Fault and 0.15 oz/ton gold over 21.8 feet in sheared veins to the south of the Casa Berardi Fault. Surface drilling on the 124 Zone east of the Principal Zone area defined a 15 to 60-foot thick, quartz-bearing zone for over 300 feet strike length that is expected to define an inferred resource from the 250 level to near-surface. Underground drill results on the 124-81 lens include 0.62 oz/ton gold over 16.7 feet and 0.44 oz/ton gold over 7.9 feet. Surface drilling has started on the 157 Zone program at the East Mine in an effort to better define geometry and continuity of a high-grade target that was drilled in 2004 from surface and in 2010 from underground.
Greens Creek - Alaska
At Greens Creek, definition and exploration drilling made progress in refining the NWW, 9A, Deep 200 South and West Wall resources and expanding the Gallagher Fault Block and Upper Southwest trends. Recent drilling of the lower NWW Zone has generally confirmed and upgraded the resource model of the shared and upper limbs. Recent assay results include 107.3 oz/ton silver, 0.73 oz/ton gold, 4.0% zinc, and 2.1% lead over 6.0 feet and 50.5 oz/ton silver, 0.14 oz/ton gold, 13.1% zinc, and 7.3% lead over 6.2 feet. Exploration extensions to this drilling have defined additional West Wall mineralization up to 240 feet down-dip from the current resource model.
Drilling of the 9A zone has defined continuous mineralization along the southernmost portion of the mine contact within the Maki Fault. Overall this drilling has added continuity to existing drilling and should allow for the current modeled blocks to be connected into a more continuous resource. Assay intervals include 26.8 oz/ton silver, 0.01 oz/ton gold, 3.8% zinc, and 2.4% lead over 14.0 feet and 10.4 oz/ton silver, 0.06 oz/ton gold, 18.4% zinc, and 7.9% lead over 10.2 feet. Drilling of the Upper Southwest defined multiple, flat-lying mineralized contacts between the 5250 and Upper Southwest mineralization. Recent exploration drilling of the Gallagher Fault Block combined with existing intercepts defines mineralized zones within the Gallagher Fault with 95 to 425 vertical feet of continuity over 1,000 feet of strike length.
Drilling of the Deep 200 South in the past few years has defined three stacked folds of high-grade mineralization that represent up to 600 feet of down-dip continuity. Recent drill intersections of the folded upper bench mineralization include 61.9 oz/ton silver, 0.04 oz/ton gold, 2.1% zinc, and 1.3% lead over 6.2 feet and 41.2 oz/ton silver, 0.04 oz/ton gold, 3.7% zinc and 3.2% lead over 7.0 feet along the upper limb. The mineralization remains open to the south and exploration drilling is planned for later in the year.
The first drill hole of the surface exploration program at Greens Creek started in mid-June at southeast Killer Creek. This hole intersected the “mine contact” at 1,580 feet where there is sulfide-bearing veins, pyrite pods and pyrite laminations with minor lead-zinc sulfides. This contact is located on the north side of Greens Creek about 3,100 feet away from NWW mine infrastructure. Surface drilling of this target and the High Sore area southeast of the mine is planned for the next two months.
More complete drill assay highlights from San Sebastian, Greens Creek, and Casa Berardi can be found in Table A at the end of the release.
Other Properties
Limited mapping and trenching programs are being advanced in the Silver Valley over the summer. In mid-June fieldwork started on to the Opinaca-Wildcat project near the Eleonore Mine in northern Quebec. Prospecting and sampling of outcrops and floats are mainly focused on the area covered by the Induced Polarization geophysical survey in April. These surveys are expected to serve as the basis for follow-up prospection and trenching in July and August.
2015 GUIDANCE
Estimated 2015 production was updated on July 16, 2015. Exploration and pre-development expectations have increased to $24 million from $18 million on increased activity at San Sebastian. Estimated cash costs, after by-product credits, for Greens Creek are lowered to $3.75 per ounce and for Lucky Friday are increased to $10.75 an ounce. Capital expectations for the year remain unchanged, as do estimates for Casa Berardi production and cash costs, after by-product credits.
For the full year 2015, the Company expects:
Mine
2015E¹ SilverProduction(Moz)
2015E GoldProduction (oz)
Cash cost, after by-product credits, persilver/gold ounce2,3
Greens Creek 7.7-8.0 55,000 $3.75 per silver ounce Lucky Friday 2.8-3.0 n/a $10.75 per silver ounce Casa Berardi n/a 130,000 $825 per gold ounce Company-wide 10.5-11.0 185,000 $6.00 per silver ounce Silver Equivalent Production: Including all metals 352015E capital expenditures (excluding capitalized interest)
$150 million
2015E pre-development and exploration expenditures
$24 million
(1) 2015E refers to the Company's estimates for 2015. (2) Cash cost, after by-product credits, per silver and gold ounce represents a non-GAAP measurement, a reconciliation of which to cost of sales and other direct production costs and depreciation, depletion and amortization, the most comparable GAAP measures, can be found at the end of the release. (3) All metal equivalent production of 35 million silver oz includes silver, gold, lead and zinc production from Lucky Friday, Greens Creek and Casa Berardi converted using the following conversion ratios: 60:1 gold to silver, 80:1 zinc to silver and 90:1 lead to silver.COMMON STOCK DIVIDEND
The Board of Directors declared a quarterly cash dividend of $0.0025 per share of common stock, payable on or about September 1, 2015, to shareholders of record on August 21, 2015.
CONFERENCE CALL AND WEBCAST
A conference call and webcast will be held Thursday, August 6, at 11:00 a.m. Eastern Time to discuss these results. You may join the conference call by dialing toll-free 1-855-760-8158 or for international by dialing 1-720-634-2922. The participant passcode is HECLA. Hecla’s live and archived webcast can be accessed at www.hecla-mining.com under Investors or via Thomson StreetEvents Network.
ABOUT HECLA
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 in Quebec, Canada. The Company also has exploration and pre-development properties in six 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.
Cautionary Statements to Investors on Forward-Looking Statements, including 2015 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 statements may include, without limitation: (i) estimates for 2015 for 1) silver and gold production, 2) cash cost, after by-product credits, and 3) capital expenditures and pre-development and exploration expenditures, in each case for each of the Company’s three mines and on a Company-wide basis; (ii) estimated Company-wide silver equivalent production (which assumes metal prices of gold at $1,225/oz., silver at $17.25/oz., zinc at $0.90/lb. and lead at $0.95/lb. and USD/CAD at $0.91); (iii) certain statements regarding the Greens Creek mine, including expected continued availability of hydroelectric power, and planned drilling and the ability for planned drilling, when combined with existing drilling data, to extend known areas of mineralization in various zones; (iv) certain statements regarding the Lucky Friday mine, including the estimated completion of repairs to the booster fan in the fourth quarter, and the future prospects of the #4 Shaft project, including expectations that 1) it will produce high grade ounces at low cash costs after by-product credits, 2) it will contribute to significant additional cash flow, 3) it will be finished in the fourth quarter of 2016, and 4) that it will cost $225 million; (v) certain statements regarding the Casa Berardi mine, including expectations that 1) there will be additional recovery improvements, 2) higher grade stopes in Zone 123 will be added in the fourth quarter, 3) future drilling will extend mineralization, and 4) the proximity of new lenses to existing infrastructure will allow near term production from these areas; and (vi) statements regarding the future prospects of San Sebastian, including expectations that 1) mining will commence in early 2016, 2) it will produce high grade ounces at low cash costs after by-product credits, 3) it will contribute to significant additional cash flow, and 4) the completion of a preliminary economic assessment by the end of the third quarter. Estimates or expectations of future events or results are based upon certain assumptions, which may prove to be incorrect. Such assumptions, include, but are not limited to: (i) there being no significant change to current geotechnical, metallurgical, hydrological and other physical conditions; (ii) permitting, development, operations and expansion of the Company’s projects being consistent with current expectations and mine plans; (iii) political/regulatory developments in any jurisdiction in which the Company operates being consistent with its current expectations; (iv) the exchange rate for the Canadian dollar to the U.S. dollar, being approximately consistent with current levels; (v) certain price assumptions for gold, silver, lead and zinc; (vi) prices for key supplies being approximately consistent with current levels; (vii) the accuracy of our current mineral reserve and mineral resource estimates; and (viii) the Company’s plans for development and production will proceed as expected and will not require revision as a result of risks or uncertainties, whether known, unknown or unanticipated. Where the Company 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.” Such risks include, but are not limited to gold, silver and other metals price volatility, operating risks, currency fluctuations, increased production costs and variances in ore grade or recovery rates from those assumed in mining plans, community relations, conflict resolution and outcome of projects or oppositions, litigation, political, regulatory, labor and environmental risks, and exploration risks and results, including that mineral resources are not mineral reserves, they do not have demonstrated economic viability and there is no certainty that they can be upgraded to mineral reserves through continued exploration. For a more detailed discussion of such risks and other factors, see the Company’s 2014 Form 10-K, filed on February 18, 2015 with the Securities and Exchange Commission (SEC), as well as the Company’s other SEC filings. The Company does not undertake any obligation to release publicly revisions to any “forward-looking statement,” including, without limitation, outlook, to reflect events or circumstances after the date of this news release, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. Investors should not assume that any lack of update to a previously issued “forward-looking statement” constitutes a reaffirmation of that statement. Continued reliance on “forward-looking statements” is at investors’ own risk.
Qualified Person (QP) Pursuant to Canadian National Instrument 43-101
Dean McDonald, PhD. P.Geo., Senior Vice President - Exploration of Hecla Mining Company, who serves as a Qualified Person under National Instrument 43-101, supervised the preparation of the scientific and technical information concerning Hecla’s mineral projects in this news release. Information regarding data verification, surveys and investigations, quality assurance program and quality control measures and a summary of sample, analytical or testing procedures for the Greens Creek Mine are contained in a technical report prepared for Hecla and Aurizon Mines Ltd. titled “Technical Report for the Greens Creek Mine, Juneau, Alaska, USA” effective date March 28, 2013, and for the Lucky Friday Mine are contained in a technical report prepared for Hecla titled “Technical Report on the Lucky Friday Mine Shoshone County, Idaho, USA” effective date April 2, 2014, and for the Casa Berardi Mine are contained in a technical report prepared for Hecla titled “Technical Report on the Mineral Resource and Mineral Reserve Estimate for the Casa Berardi Mine, Northwestern Quebec, Canada” effective date March 31, 2014 (the “Casa Berardi Technical Report”). Also included in these three technical reports is a description of the key assumptions, parameters and methods used to estimate mineral reserves and resources and a general discussion of the extent to which the estimates may be affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant factors. Copies of these technical reports are available under Hecla’s profile on SEDAR at www.sedar.com.
Cautionary Statements to Investors on Reserves and Resources
Reporting requirements in the United States for disclosure of mineral properties are governed by the SEC and included in the SEC’s Securities Act Industry Guide 7, entitled “Description of Property by Issuers Engaged or to be Engaged in Significant Mining Operations” (“Guide 7”). However, the Company is also a “reporting issuer” under Canadian securities laws, which require estimates of mineral resources and reserves to be prepared in accordance with Canadian National Instrument 43-101 (“NI 43-101”). NI 43-101 requires all disclosure of estimates of potential mineral resources and reserves to be disclosed in accordance with its requirements. Such Canadian information is being included here to satisfy the Company’s “public disclosure” obligations under Regulation FD of the SEC and to provide U.S. holders with ready access to information publicly available in Canada.
Reporting requirements in the United States for disclosure of mineral properties under Guide 7 and the requirements in Canada under NI 43-101 standards are substantially different. This document contains a summary of certain estimates of the Company, not only of proven and probable reserves within the meaning of Guide 7, which requires the preparation of a “final” or “bankable” feasibility study demonstrating the economic feasibility of mining and processing the mineralization using the three-year historical average price for any reserve or cash flow analysis to designate reserves and that the primary environmental analysis or report be filed with the appropriate governmental authority, but also of mineral resource and mineral reserve estimates estimated in accordance with the definitional standards of the Canadian Institute of Mining, Metallurgy and Petroleum referred to in NI 43-101. The terms “measured resources,” “indicated resources,” and “inferred resources” are Canadian mining terms as defined in accordance with NI 43-101. These terms are not defined under Guide 7 and are not normally permitted to be used in reports and registration statements filed with the SEC in the United States, except where required to be disclosed by foreign law. Investors are cautioned not to assume that any part or all of the mineral deposits in such categories will ever be converted into proven or probable reserves. “Resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of such a “resource” will ever be upgraded to a higher category or will ever be economically extracted. Investors are cautioned not to assume that all or any part of a “resource” exists or is economically or legally mineable. Investors are also especially cautioned that the mere fact that such resources may be referred to in ounces of silver and/or gold, rather than in tons of mineralization and grades of silver and/or gold estimated per ton, is not an indication that such material will ever result in mined ore which is processed into commercial silver or gold.
HECLA MINING COMPANYCondensed Consolidated Statements of Loss
(dollars and shares in thousands, except per share amounts - unaudited)
Second Quarter Ended Six Months Ended June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 Sales of products $ 104,197 $ 117,502 $ 223,289 $ 243,289 Cost of sales and other direct production costs 67,567 71,039 141,532 148,780 Depreciation, depletion and amortization 27,166 27,735 52,420 53,538 94,733 98,774 193,952 202,318 Gross profit 9,464 18,728 29,337 40,971 Other operating expenses: General and administrative 8,296 8,159 17,016 16,100 Exploration 4,592 3,140 9,208 7,290 Pre-development 1,618 437 2,138 856 Other operating expense 766 693 1,394 1,411 Gain/(loss) on sale of PP&E 116 — 190 Provision for closed operations and environmental matters 9,335 1,267 9,802 2,371 Acquisition costs 2,147 — 2,147 — 26,870 13,696 41,895 28,028 Income (loss) from operations (17,406 ) 5,032 (12,558 ) 12,943 Other income (expense): Gain on sale or impairment of investments (166 ) — (166 ) — Unrealized gain (loss) on investments (117 ) (608 ) (2,960 ) 80 Gain (loss) on derivative contracts (887 ) (11,601 ) 4,905 (2,149 ) Interest and other income 35 97 73 176 Net foreign exchange gain (loss) (1,833 ) (5,382 ) 10,441 (1,248 ) Interest expense, net of amount capitalized (6,541 ) (6,962 ) (12,733 ) (13,802 ) (9,509 ) (24,456 ) (440 ) (16,943 ) Loss before income taxes (26,915 ) (19,424 ) (12,998 ) (4,000 ) Income tax benefit (provision) 132 5,025 (1,307 ) 1,242 Net loss (26,783 ) (14,399 ) (14,305 ) (2,758 ) Preferred stock dividends (138 ) (138 ) (276 ) (276 ) Loss applicable to common shareholders $ (26,921 ) $ (14,537 ) $ (14,581 ) $ (3,034 ) Basic and diluted loss per common share after preferred dividends $ (0.07 ) $ (0.04 ) $ (0.04 ) $ (0.01 ) Weighted average number of common shares outstanding - basic and diluted 371,295 344,216 370,042 343,437HECLA MINING COMPANY
Condensed Consolidated Balance Sheets
(dollars and share in thousands - unaudited)
June 30, 2015 December 31, 2014 ASSETS Current assets: Cash and cash equivalents $ 191,574 $ 209,665 Accounts receivable: Trade 7,781 17,696 Other, net 24,519 17,184 Inventories 52,404 47,473 Current deferred income taxes 8,766 12,029 Other current assets 14,040 12,312 Total current assets 299,084 316,359 Non-current investments 2,672 4,920 Non-current restricted cash and investments 957 883 Properties, plants, equipment and mineral interests, net 1,863,440 1,831,564 Non-current deferred income taxes 105,739 98,923 Reclamation insurance asset 16,800 — Other non-current assets and deferred charges 3,576 9,415 Total assets $ 2,292,268 $ 2,262,064 LIABILITIES Current liabilities: Accounts payable and accrued liabilities $ 44,500 $ 41,869 Accrued payroll and related benefits 23,163 27,956 Accrued taxes 2,420 4,241 Current portion of capital leases 9,894 9,491 Current portion of debt 1,789 — Other current liabilities 6,236 5,797 Current portion of accrued reclamation and closure costs 21,191 1,631 Total current liabilities 109,193 90,985 Capital leases 10,187 13,650 Accrued reclamation and closure costs 70,718 55,619 Long-term debt 501,376 498,479 Non-current deferred tax liability 137,716 153,300 Other non-current liabilities 51,504 53,057 Total liabilities 880,694 865,090 SHAREHOLDERS’ EQUITY Preferred stock 39 39 Common stock 94,771 92,382 Capital surplus 1,515,362 1,486,750 Accumulated deficit (157,547 ) (141,306 ) Accumulated other comprehensive loss (31,250 ) (32,031 ) Treasury stock (9,801 ) (8,860 ) Total shareholders’ equity 1,411,574 1,396,974 Total liabilities and shareholders’ equity $ 2,292,268 $ 2,262,064 Common shares outstanding 376,733 367,377HECLA MINING COMPANY
Condensed Consolidated Statements of Cash Flows
(dollars in thousands - unaudited)
Six Months Ended June 30, 2015 June 30, 2014 OPERATING ACTIVITIES Net loss $ (14,115 ) $ (2,758 ) Non-cash elements included in net loss: Depreciation, depletion and amortization 52,966 54,045 Unrealized (gain)/loss on investments 3,043 — (Gain) loss on disposition of properties, plants, equipment and mineral interests 190 44 Provision for reclamation and closure costs 10,256 2,710 Stock compensation 2,261 2,561 Deferred income taxes (705 ) (6,840 ) Amortization of loan origination fees 910 1,135 (Gain) loss on derivative contracts 7,812 6,231 Foreign exchange gain (9,672 ) (55 ) Other non-cash charges, net 25 (986 ) Change in assets and liabilities: Accounts receivable 2,469 8,398 Inventories (3,417 ) (2,418 ) Other current and non-current assets (3,904 ) 1,617 Accounts payable and accrued liabilities (4,210 ) (17,084 ) Accrued payroll and related benefits 803 9,069 Accrued taxes (1,938 ) 2,582 Accrued reclamation and closure costs and other non-current liabilities 9,399 (1,222 ) Cash provided by operating activities 52,173 57,029 INVESTING ACTIVITIES Additions to properties, plants, equipment and mineral interests (58,272 ) (57,461 ) Acquisition of Revett, net of cash acquired (809 ) — Proceeds from disposition of properties, plants and equipment 153 238 Purchases of investments (947 ) — Changes in restricted cash and investment balances — 4,334 Net cash used in investing activities (59,875 ) (52,889 ) FINANCING ACTIVITIES Proceeds from exercise of warrants — 14,112 Acquisition of treasury shares (941 ) (1,501 ) Dividends paid to common shareholders (1,850 ) (1,715 ) Dividends paid to preferred shareholders (276 ) (276 ) Credit availability and debt issuance fees paid (123 ) (577 ) Repayments of capital leases (4,940 ) (4,525 ) Net cash provided by (used in) financing activities (8,130 ) 5,518 Effect of exchange rates on cash (2,259 ) 250 Net increase (decrease) in cash and cash equivalents (18,091 ) 9,908 Cash and cash equivalents at beginning of period 209,665 212,175 Cash and cash equivalents at end of period $ 191,574 $ 222,083HECLA MINING COMPANY
Production Data
Three Months Ended Six Months Ended June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 GREENS CREEK UNIT Tons of ore milled 199,694 201,146 395,163 403,861 Mining cost per ton $ 73.60 $ 73.09 $ 73.64 $ 69.98 Milling cost per ton $ 30.31 $ 31.07 $ 29.53 $ 29.29 Ore grade milled - Silver (oz./ton) 12.33 12.03 13.05 12.24 Ore grade milled - Gold (oz./ton) 0.106 0.120 0.112 0.120 Ore grade milled - Lead (%) 3.36 3.25 3.31 3.20 Ore grade milled - Zinc (%) 8.93 8.57 8.64 8.57 Silver produced (oz.) 1,856,125 1,689,183 3,892,091 3,476,320 Gold produced (oz.) 13,753 14,931 28,992 29,940 Lead produced (tons) 5,393 5,044 10,323 9,869 Zinc produced (tons) 15,462 15,288 29,382 30,329 Total cash cost, net of by-product credits, per silver ounce (1) $ 3.30 $ 3.52 $ 3.27 $ 2.52 Capital additions (in thousands) $ 12,056 $ 7,267 $ 18,400 $ 12,849 LUCKY FRIDAY UNIT Tons of ore processed 72,059 80,379 146,304 159,468 Mining cost per ton $ 99.14 $ 87.83 $ 91.80 $ 84.44 Milling cost per ton $ 20.53 $ 21.81 $ 20.40 $ 21.21 Ore grade milled - Silver (oz./ton) 8.98 10.73 10.38 10.06 Ore grade milled - Lead (%) 6.1 6.83 6.56 6.66 Ore grade milled - Zinc (%) 3.1 2.88 3.14 2.94 Silver produced (oz.) 613,474 820,786 1,450,193 1,520,391 Lead produced (tons) 4,132 5,185 9,080 9,995 Zinc produced (tons) 2,053 2,095 4,220 4,145 Total cash cost, net of by-product credits, per silver ounce (1) $ 12.58 $ 9.10 $ 10.55 9.33 Capital additions (in thousands) $ 11,352 $ 12,277 $ 25,060 $ 22,787 CASA BERARDI UNIT Tons of ore processed 219,002 212,489 407,097 398,632 Mining cost per ton $ 95.88 $ 103.92 $ 100.33 $ 111.96 Milling cost per ton $ 18.95 $ 19.23 $ 20.33 $ 20.89 Ore grade milled - Gold (oz./ton) 0.165 0.15 0.16 0.17 Ore grade milled - Silver (oz./ton) 0.04 0.031 0.04 0.031 Gold produced (oz.) 30,939 28,623 56,350 59,882 Total cash cost, net of by-product credits, per gold ounce (1) $ 832 $ 952 $ 896 $ 917 Capital additions (in thousands) $ 8,601 $ 10,978 $ 16,198 $ 23,834 (1) Cash cost, after by-product credits, per silver and gold ounce represents a non-GAAP measurement, a reconciliation of which to cost of sales and other direct production costs and depreciation, depletion and amortization, the most comparable GAAP measures, can be found in the cash cost per ounce reconciliation section of this news release. Gold, lead and zinc produced have been treated as by-product credits in calculating silver costs per ounce. The primary metal produced at Casa Berardi is gold, with a by-product credit for the value of silver production.
HECLA MINING COMPANY
Reconciliation of Cash Cost, Before By-product Credits, per Ounce and Cash Cost, After By-product Credits, per Ounce to Generally Accepted Accounting Principles (GAAP) (Unaudited)
This release contains references to a non-GAAP measure of cash cost, before by-product credits, per ounce and cash cost, after by-product credits, per ounce. Cash cost, before by-product credits, per ounce and cash cost, after by-product credits, per ounce represent non-U.S. Generally Accepted Accounting Principles (GAAP) measurements that the Company believes provide management and investors an indication of net cash flow. Management also uses this measurement for the comparative monitoring of performance of mining operations period-to-period from a cash flow perspective. Cash cost, before by-product credits, per ounce and Cash cost, after by-product credits, per ounce are measures developed by gold companies and used by silver companies in an effort to provide a comparable standard; however, there can be no assurance that our reporting of these non-GAAP measures is similar to those reported by other mining companies. Cost of sales and other direct production costs and depreciation, depletion and amortization are the most comparable financial measures calculated in accordance with GAAP to cash cost, before by-product credits cash cost, after by-product credits.
As depicted in the Greens Creek Unit and the Lucky Friday Unit tables below, by-product credits comprise an essential element of our silver unit cost structure. By-product credits constitute an important competitive distinction for our silver operations due to the polymetallic nature of their orebodies. By-product credits included in our presentation of cash cost, after by-product credits, per silver ounce include:
Total, Greens Creek and Lucky Friday Units Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 By-product value, all silver properties: Zinc $ 25,224 $ 23,653 $ 46,914 $ 46,609 Gold 13,487 15,997 28,995 32,257 Lead 14,472 16,988 28,365 32,755 Total by-product credits $ 53,183 $ 56,638 $ 104,274 $ 111,621 By-product credits per silver ounce, all silver properties Zinc $ 10.21 $ 9.42 $ 8.78 $ 9.32 Gold 5.47 6.38 5.43 6.46 Lead 5.86 6.77 5.31 6.56 Total by-product credits $ 21.54 $ 22.57 $ 19.52 $ 22.34By-product credits included in our presentation of cash cost, after by-product credits, per gold ounce for our Casa Berardi Unit include:
Casa Berardi Unit Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 Silver by-product value $ 123 $ 114 $ 220 $ 218 Silver by-product credits per gold ounce $ 3.96 $ 3.98 $ 3.90 $ 3.65
The following table calculates cash cost, before by-product credits, per ounce and cash cost, after by-product credits, per ounce (in thousands, except per-ounce amounts):
Total, Greens Creek and Lucky Friday Three Months EndedJune 30, Six Months EndedJune 30, 2015 2014 2015 2014 Cash cost, before by-product credits (1) $ 67,034 $ 70,051 $ 132,280 $ 134,570 By-product credits (53,183 ) (56,638 ) (104,273 ) (111,621 ) Cash cost, after by-product credits 13,851 13,413 28,007 22,949 Divided by silver ounces produced 2,469 2,509 5,342 4,996 Cash cost, before by-product credits, per silver ounce 27.15 27.91 24.76 26.93 By-product credits per silver ounce (21.54 ) (22.57 ) (19.52 ) (22.34 ) Cash cost, after by-product credits, per silver ounce $ 5.61 $ 5.34 $ 5.24 $ 4.59 Reconciliation to GAAP: Cash cost, after by-product credits $ 13,851 $ 13,413 $ 28,007 $ 22,949 Depreciation, depletion and amortization 16,451 19,280 33,063 36,502 Treatment costs (19,305 ) (20,010 ) (39,226 ) (39,916 ) By-product credits 53,183 56,641 104,273 111,624 Change in product inventory (6,119 ) (7,211 ) (401 ) (2,416 ) Reclamation and other costs (96 ) 383 298 908 Cost of sales and other direct production costs and depreciation, depletion and amortization (GAAP) $ 57,965 $ 62,496 $ 126,014 $ 129,651 Greens Creek UnitThree Months EndedJune 30,
Six Months EndedJune 30,
2015 2014 2015 2014 Cash cost, before by-product credits (1) $ 49,540 $ 50,405 $ 96,653 $ 97,004 By-product credits (43,409 ) (44,459 ) (83,940 ) (88,236 ) Cash cost, after by-product credits 6,131 5,946 12,713 8,768 Divided by silver ounces produced 1,856 1,689 3,892 3,476 Cash cost, before by-product credits, per silver ounce 26.69 29.84 24.82 27.91 By-product credits per silver ounce (23.39 ) (26.32 ) (21.57 ) (25.38 ) Cash cost, after by-product credits, per silver ounce $ 3.30 $ 3.52 $ 3.27 $ 2.52 Reconciliation to GAAP: Cash cost, after by-product credits $ 6,131 $ 5,946 $ 12,713 $ 8,768 Depreciation, depletion and amortization 13,775 16,960 27,521 31,986 Treatment costs (15,639 ) (14,993 ) (30,872 ) (30,382 ) By-product credits 43,409 44,462 83,940 88,239 Change in product inventory (4,775 ) (7,376 ) 919 (2,377 ) Reclamation and other costs (86 ) 340 302 868 Cost of sales and other direct production costs and depreciation, depletion and amortization (GAAP) $ 42,815 $ 45,339 $ 94,523 $ 97,102Lucky Friday Unit
Three Months EndedJune 30,
Six Months EndedJune 30,
2015 2014 2015 2014 Cash cost, before by-product credits (1) $ 17,494 $ 19,646 $ 35,627 $ 37,566 By-product credits (9,774 ) (12,179 ) (20,333 ) (23,385 ) Cash cost, after by-product credits 7,720 7,467 15,294 14,181 Divided by silver ounces produced 613 820 1,450 1,520 Cash cost, before by-product credits, per silver ounce 28.53 23.95 24.57 24.71 By-product credits per silver ounce (15.94 ) (14.85 ) (14.02 ) (15.38 ) Cash cost, after by-product credits, per silver ounce $ 12.58 $ 9.10 $ 10.55 $ 0.01 Reconciliation to GAAP: Cash cost, after by-product credits $ 7,720 $ 7,467 $ 15,294 $ 14,181 Depreciation, depletion and amortization 2,676 2,320 5,542 4,516 Treatment costs (3,666 ) (5,017 ) (8,354 ) (9,534 ) By-product credits 9,774 12,179 20,333 23,385 Change in product inventory (1,344 ) 165 (1,320 ) (39 ) Reclamation and other costs (10 ) 43 (5 ) 40 Cost of sales and other direct production costs and depreciation, depletion and amortization (GAAP) $ 15,150 $ 17,157 $ 31,490 $ 32,549 Casa Berardi Unit Three Months EndedJune 30,Six Months EndedJune 30,
2015 2014 2015 2014 Cash cost, before by-product credits (1) $ 25,876 $ 27,351 $ 50,711 $ 55,159 By-product credits (123 ) (114 ) (220 ) (218 ) Cash cost, after by-product credits 25,753 27,237 50,491 54,941 Divided by gold ounces produced 30.94 28.62 56.35 59.88 Cash cost, before by-product credits, per gold ounce 836.34 955.54 899.93 921.13 By-product credits per gold ounce (3.96 ) (3.98 ) (3.90 ) (3.65 ) Cash cost, after by-product credits, per gold ounce $ 832.38 $ 951.56 $ 896.03 $ 917.48 Reconciliation to GAAP: Cash cost, after by-product credits $ 25,753 $ 27,237 $ 50,491 $ 54,941 Depreciation, depletion and amortization 10,714 8,456 19,357 17,037 Treatment costs (144 ) (131 ) (297 ) (229 ) By-product credits 123 114 220 218 Change in product inventory 206 395 (2,066 ) 288 Reclamation and other costs 116 207 234 412 Cost of sales and other direct production costs and depreciation, depletion and amortization (GAAP) $ 36,768 $ 36,278 $ 67,939 $ 72,667Total, All Locations Three Months EndedJune 30,
Six Months EndedJune 30,
2015 2014 2015 2014 Reconciliation to GAAP: Cash cost, after by-product credits $ 39,604 $ 40,650 $ 78,498 $ 77,890 Depreciation, depletion and amortization 27,165 27,736 52,420 53,539 Treatment costs (19,449 ) (20,141 ) (39,523 ) (40,145 ) By-product credits 53,306 56,755 104,493 111,842 Change in product inventory (5,913 ) (6,816 ) (2,467 ) (2,128 ) Reclamation and other costs 20 590 531 1,320 Cost of sales and other direct production costs and depreciation, depletion and amortization (GAAP) $ 94,733 $ 98,774 $ 193,952 $ 202,318 (1) Includes all direct and indirect operating cash costs related directly to the physical activities of producing metals, including mining, processing and other plant costs, third-party refining and marketing expense, on-site general and administrative costs, royalties and mining production taxes, before by-product revenues earned from all metals other than the primary metal produced at each unit.
HECLA MINING COMPANY
Reconciliation of Net Loss Applicable to Common Shareholders (GAAP) to Adjusted Net Income (Loss) Applicable to Common Stockholders (dollars and ounces in thousands, except per share amounts - unaudited)This release refers to a non-GAAP measure of adjusted net income (loss) applicable to common stockholders and adjusted net income (loss) per share, which are indicators of our performance. 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.
Dollars are in thousands (except per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Net loss applicable to common shareholders (GAAP) $ (26,805 ) $ (14,537 ) $ (14,391 ) $ (3,034 ) Adjusting items: (Gains) losses on derivatives contracts 887 11,601 (4,905 ) 2,149 Provisional price losses (gains) 601 210 (1,524 ) 948 Environmental accruals 8,700 856 8,700 856 Foreign exchange (gain) loss 1,833 5,382 (10,441 ) 1,248 Acquisition costs 2,147 — 2,147 — Income tax effect of above adjustments (4,934 ) (5,067 ) (1,767 ) (1,581 ) Adjusted net income (loss) applicable to common shareholders $ (17,571 ) $ (1,555 ) $ (22,181 ) $ 586 Weighted average shares - basic 371,295 344,216 370,042 343,437 Weighted average shares - diluted 371,295 344,216 370,042 343,437 Basic adjusted net income (loss) per common share $ (0.05 ) $ — $ (0.06 ) $ — Diluted adjusted net income (loss) per common share $ (0.05 ) $ — $ (0.06 ) $ —
HECLA MINING COMPANY
Reconciliation of Net Loss (GAAP) to Adjusted EBITDA (dollars and ounces in thousands, except per share amounts - unaudited)This release refers to a non-GAAP measure of adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), which is a measure of our operating performance. Adjusted EBITDA is calculated as net income before the following items: interest expense, income tax provision, depreciation, depletion, and amortization expense, exploration expense, pre-development expense, Aurizon acquisition costs, Lucky Friday suspension-related costs, interest and other income (expense), foreign exchange gains and losses, gains and losses on derivative contracts, unrealized gains on investments, provisions for environmental matters, stock-based compensation, and provisional price gains and losses. Management believes that, when presented in conjunction with comparable GAAP measures, Adjusted EBITDA is useful to investors in evaluating our operating performance. The following table reconciles net loss to Adjusted EBITDA:
Dollars are in thousands Three Months Ended Six Months Ended June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 Net loss $ (26,667 ) $ (14,399 ) $ (14,115 ) $ (2,758 ) Plus: Interest expense, net of amount capitalized 6,541 6,962 12,733 13,802 Plus/(Less): Income taxes (132 ) (5,025 ) 1,307 (1,242 ) Plus: Depreciation, depletion and amortization 27,166 27,735 52,420 53,538 Plus: Exploration expense 4,592 3,140 9,208 7,290 Plus: Pre-development expense 1,618 437 2,138 856 Foreign exchange (gain) loss 1,833 5,382 (10,441 ) 1,248 Plus: Acquisition costs 2,147 — 2,147 — Plus: Provision for closed operations and environmental matters 9,478 1,777 10,256 2,710 Plus/(Less): Losses (gains) on derivative contracts 887 11,601 (4,905 ) 2,149 Plus: Provisional price losses 601 210 (1,524 ) 948 Other 1,449 2,007 5,314 2,305 Adjusted EBITDA $ 29,513 $ 39,827 $ 64,538 $ 80,846
Assay Results - Q2 2015
Note: All assay intervals represent true widths of drill core with the exception of the results from Greens Creek. At Greens Creek the assay intervals represent the horizontal width because the mineralized bodies are very irregular in shape and in most cases this is the best approximation for true width.
Greens Creek (Alaska)
ZoneDrill HoleNumber
Drill HoleAzm/Dip
SampleFrom
SampleTo
HorizontalWidth(feet)
Silver(oz/ton)
Gold(oz/ton)
Zinc(%)
Lead(%)
DepthFromMinePortal(feet)
Northwest WestDefinition
GC3958 243/-61 244.40 250.90 6.4 10.11 0.07 7.98 4.08 -621 317.30 320.80 3.4 14.62 0.16 13.14 6.39 -685 325.00 329.30 4.2 39.29 0.23 10.91 5.05 -692 GC3960 243/-28 66.80 93.30 9.1 23.95 0.08 13.29 6.51 -438 144.50 151.70 2.5 45.82 0.02 19.02 7.75 -475 189.00 193.30 3.4 14.16 0.05 8.69 4.90 -497 GC3978 243/-82 79.60 85.80 6.0 107.31 0.73 4.00 2.12 -482 178.30 181.80 3.2 33.08 0.21 6.42 3.14 -580 191.00 201.70 6.9 23.94 0.07 7.65 3.40 -593 243.00 257.60 6.6 39.73 0.08 11.61 6.59 -644 GC3980 243/-71 0.00 59.50 14.4 26.82 0.11 13.45 4.78 -403 95.00 98.00 5.4 14.45 0.07 1.06 0.50 -494 100.00 104.40 5.4 35.64 1.33 4.44 2.59 -499 297.20 317.70 6.2 50.53 0.14 13.11 7.32 -688 GC3982 243/-55 187.50 203.70 12.8 30.11 0.07 9.23 4.86 -569 213.00 217.40 4.2 10.90 0.03 4.73 3.36 -583 262.00 270.80 5.5 14.37 0.07 0.33 0.18 -624 304.00 305.50 0.9 166.68 0.59 4.64 2.09 -656 331.00 343.50 5.7 29.27 0.08 7.60 5.65 -680 347.40 352.80 2.5 47.32 0.31 19.63 12.47 -692 359.20 389.60 13.8 18.36 0.15 4.56 2.58 -701 395.50 404.80 4.2 22.90 0.10 7.80 4.53 -727 GC3983 243/-64 0.00 89.00 10.8 52.37 0.12 20.88 7.55 -403 94.00 99.00 4.6 14.23 0.18 2.06 1.29 -487 113.90 142.80 14.0 21.03 0.18 5.77 3.14 -505 183.50 189.50 2.5 19.49 0.09 3.49 1.59 -568 205.80 214.30 4.6 42.96 0.36 6.66 3.27 -588 221.70 226.70 2.7 20.86 0.17 2.87 1.35 -602 GC3984 243/-36 0.00 5.80 5.8 27.70 0.11 23.21 6.72 -403 GC3986 063/-80 9.00 9.80 0.8 116.66 0.21 15.49 3.47 -421 199.00 204.00 2.7 23.75 0.11 4.70 2.10 -608 GC3989 063/-75 145.70 153.00 7.3 16.39 0.14 4.15 1.42 -551 GC3991 243/-70 169.40 177.30 6.8 23.30 0.11 8.72 4.07 -570 183.80 188.70 4.2 43.53 0.11 12.49 6.92 -582 GC3993 243/-51 386.10 395.00 5.0 31.79 0.27 12.15 6.17 -710 GC3997 063/58 62.40 66.50 3.4 27.38 0.07 15.74 7.60 -336 116.10 119.20 2.6 21.23 0.04 9.03 5.00 -291 GC3999 063/-55 165.70 174.50 6.9 36.34 0.07 8.22 4.77 -546 183.60 205.40 17.2 18.74 0.14 8.41 4.64 -550 GC4001 063/-38 37.20 48.50 5.7 50.87 0.20 8.00 3.59 -422 52.00 64.40 5.2 22.26 0.09 8.68 4.48 -431 GC4003 063/-64 11.60 13.20 1.6 20.56 0.02 10.32 3.99 -410 21.00 31.00 6.9 18.94 0.05 10.36 5.54 -418 36.00 41.50 4.6 12.10 0.13 15.45 8.11 -432 55.40 65.00 9.3 17.36 0.02 3.90 1.76 -449 159.00 163.60 3.9 22.50 0.08 12.12 7.19 -541 GC4005 063/73 105.40 115.80 10.4 20.59 0.08 15.04 6.61 -282 122.10 133.60 10.0 352.90 0.54 9.79 4.12 -267 GC4023 063/-28 234.50 236.50 1.9 34.88 0.18 22.77 12.39 -502 GC4026 063/-43 158.40 170.20 11.4 13.33 0.10 11.22 6.13 -505 GC4028 063/-55 155.70 159.00 3.1 13.96 0.00 8.57 4.38 -527 GC4030 063/-8.5 45.60 49.10 2.2 18.36 0.09 6.92 3.10 -401 100.10 115.60 14.0 15.79 0.04 10.86 4.79 -408 GC4031 063/-66 120.00 136.70 9.1 26.41 0.14 2.90 1.61 -510 158.10 168.30 7.9 21.77 0.07 6.13 3.15 -546 173.80 183.80 6.8 25.60 0.12 14.15 8.10 -557 GC4038 243/-70 261.40 267.70 6.3 23.03 0.11 3.08 1.62 -645 GC4041 063/9 68.20 71.00 2.6 19.97 0.04 10.26 4.69 -381 84.80 92.80 7.3 43.98 0.10 9.00 3.24 -378 GC4050 063/-63 124.90 134.50 9.6 19.03 0.14 6.73 2.98 -516 140.80 145.20 3.5 12.15 0.14 12.96 3.32 -530 GC4054 063/-87 224.00 229.60 4.5 53.05 0.16 12.26 6.31 -629 GC4067 063/-25 160.10 163.90 3.7 35.97 0.28 8.10 3.40 -470 West Wall GC4023 063/-28 515.10 517.30 1.6 11.02 0.02 16.89 9.22 -628Deep 200 SouthDefinition
GC3963 243/-71 273.00 281.00 7.0 41.21 0.04 3.69 3.21 -1524 484.50 494.50 9.5 32.93 0.48 10.29 5.80 -1725 GC3970 243/-63 298.00 305.60 6.4 31.53 0.04 4.81 2.78 -1534 GC3975 063/-64 386.00 406.00 4.5 10.58 0.10 3.12 1.68 -1616 487.50 499.80 9.6 26.49 0.03 2.13 1.19 -1708 GC3977 063/-76 294.00 300.50 6.2 18.48 0.11 1.70 1.05 -1554 GC3981 063/-86 269.50 278.80 8.6 20.58 0.17 4.43 2.62 -1537 GC3988 243/-62 301.00 307.70 6.2 61.86 0.04 2.10 1.29 -1534 GC3992 243/-70 501.80 509.20 6.7 22.94 0.14 1.68 0.77 -1741 GC3998 243/-55 319.30 330.30 9.3 24.21 0.11 3.13 2.02 -1531 GC4009 063/-82 281.00 285.80 4.3 26.29 0.21 4.36 2.76 -1548 643.00 647.00 2.4 17.94 0.00 3.50 1.76 -1911 GC4013 243/-87 255.80 263.20 6.5 10.85 0.08 1.39 0.73 -1524 GC4021 243/-59 299.50 310.20 7.8 15.06 0.13 1.02 0.64 -1528 GC4029 063/-83 272.50 278.20 4.8 17.96 0.17 1.14 0.58 -1539 618.90 626.00 4.6 27.23 0.20 14.13 6.81 -1885 641.90 661.50 12.6 15.13 0.13 6.26 3.72 -1906 GC4039 063/-60 405.10 413.30 5.0 20.03 0.12 0.82 0.51 -1622 GC4051 243/-73 263.90 266.00 1.9 52.71 0.04 5.68 3.12 -1522 568.90 575.30 5.7 30.24 0.33 7.34 3.99 -1763 9a Definition GC4004 063/83 226.90 236.60 6.1 17.35 0.02 15.95 6.22 -87 263.00 267.30 1.7 25.00 0.04 27.97 11.01 -51 GC4007 063/70 190.40 209.00 18.6 14.16 0.02 22.07 9.73 -119 238.90 250.00 10.2 10.45 0.06 18.42 7.88 -88 GC4020 243/86 247.30 294.00 14.4 15.16 0.10 8.57 4.53 -66 411.60 417.30 1.8 55.97 0.37 10.35 6.36 96 GC4033 063/-1.5 322.00 334.60 11.4 35.33 0.20 9.77 4.98 -329 GC4055 063/46 305.00 317.10 10.4 11.13 0.03 21.06 6.61 -101 365.70 373.60 6.4 12.88 0.02 19.58 9.03 -58 GC4066 063/11 380.00 396.70 14.0 26.76 0.01 3.75 2.41 -243
Casa Berardi (Quebec)
Zone Drill Hole NumberDrill HoleSection
Drill HoleAzm/Dip
SampleFrom
SampleTo
TrueWidth(feet)
Gold(oz/ton)
DepthFrom MineSurface(feet)
South-West (107) CBW-0365-012 10738 360/-66 177.2 188.6 9.8 0.20 -1354.3 Upper 118 (118-42) CBP-0530-186 12058 341/-31 127.3 147.6 18.7 0.21 -1825.8 (118-43) CBP-0530-189 12068 360/-20 76.8 133.5 24.3 0.22 -1791.0 (118-47) CBP-0530-193 12081 017/-10 65.3 85.3 19.0 0.33 -1770.0 (118-47) CBP-0530-194 12081 016/-20 60.4 88.9 26.2 0.54 -1781.2 (118-42) CBP-0530-197 12054 341/-20 134.5 163.1 24.0 0.26 -1815.0 (118-46) CBP-0530-199 12059 305/-78 131.6 155.2 22.3 0.22 -1898.6 (118-46) CBP-0530-205 12060 248/-80 131.9 158.1 25.3 0.27 -1901.2 (118-46) CBP-0530-206 12059 211/-72 141.1 170.6 26.9 0.22 -1904.9 Lower 118 (118-32) CBP-0910-037 12120 180/-32 70.2 83.7 12.5 0.21 -3018.7 (118-27) CBP-0910-040 12011 183/-45 275.6 357.6 54.8 0.21 -3212.3 (118-32) CBP-0910-041 12118 181/-49 75.5 96.1 17.7 0.36 -3047.2 (118-22) CBP-0910-048 12032 170/-31 324.8 360.9 34.1 0.30 -3158.5 (118-31) CBP-0930-001 12052 166/-2 147.6 165.4 15.7 0.55 -3048.2 (118-27) CBP-0930-006 12043 176/10 190.3 203.4 13.1 0.23 -3008.9 (118-27) CBP-0930-008 12031 188/-5 177.5 196.5 17.7 0.24 -3054.5 (118-22) CBP-0930-010 12027 188/-32 267.7 282.2 13.5 0.34 -3150.6 Upper 123 (123-05) CBP-0550-090 12539 142/47 259.5 291.0 21.7 0.25 -1609.6 (123-05) CBP-0550-091 12554 135/20 229.0 276.6 37.1 0.23 -1718.5 (123-05) CBP-0550-092 12546 135/29 210.0 256.9 46.6 0.26 -1698.2 (123-05) CBP-0550-093 12544 135/37 206.7 262.5 55.1 0.20 -1666.0 Lower 123 (123-02) CBP-0810-017 12386 181/-26 336.3 352.4 15.7 1.84 -2753.6 (123-01) CBP-0810-018 12385 181/-19 332.3 347.8 11.8 0.34 -2695.5 (123-01) CBP-0810-019 12387 181/-11 307.1 324.8 13.5 0.77 -2666.7 (123-01) CBP-0810-020 12388 181/3 259.5 280.8 18.4 1.08 -2581.4 (123-01) CBP-0810-021 12375 189/-4 322.8 335.3 11.8 1.11 -2615.8 (123-01) CBP-0810-022 12376 189/-11 339.6 353.0 12.5 0.55 -2655.2 (123-01) CBP-0810-027 12276 171/-5 278.2 290.7 11.2 1.21 -2619.4 (123-03) CBP-0810-032 12395 176/-29 327.1 338.9 10.2 1.09 -2766.7 (123-04) CBP-0830-041 12241 211/49 354.3 371.4 12.1 0.42 -2445.2 (123-03) CBP-0830-042 12292 165/-27 200.1 251.6 31.5 0.32 -2808.4 (123-04) CBP-0830-054 12243 202/17 290.0 305.8 15.1 0.34 -2624.7 (123-04) CBP-0850-047 12320 186/-24 381.6 393.7 10.8 0.73 -2873.0 (123-03) CBP-0850-055 12386 139/-1 215.9 229.0 10.5 1.63 -2721.1 (123-03) CBP-0850-056 12390 139/-17 246.1 264.4 13.5 1.04 -2795.3 (123-02) CBP-0850-058 12387 147/-30 292.0 308.7 13.8 1.13 -2863.5 (123-03) CBP-0850-059 12377 147/-15 227.4 252.6 21.3 0.80 -2784.1 (123-03) CBP-0850-060 12378 147/2 207.3 228.7 17.7 1.18 -2711.9 Principale (124-81) CBP-0250-050 12539 170/49 128.3 137.8 7.9 0.44 -698.5 (124-81) CBP-0250-051 12538 170/58 141.1 160.8 16.7 0.62 -669.6 (124-81) CBP-0250-053 12531 192/45 49.2 55.8 6.6 0.31 -757.2 Explo U 117 CBW-1069 11700 010/-77 4068.2 4104.3 21.8 0.15 -4501.6 CBW-1069 11,600 010/-73 4,190.8 4,206.1 12.10 0.64 (4,601.3) Explo S 100 CBS-099-047EXT 10550 360/-72 4068.2 4104.3 14.4 0.15 -2615.5 Explo S 124 CBS-15-624 12900 360/-60 1200.8 1235.2 64.0 0.20 -802.2
San Sebastian (Mexico)
Zone
Drill HoleNumber
SampleFrom (ft)
Sample To(ft)
Width(feet)
True Width(feet)
Gold(oz/ton)
Silver(oz/ton)
East Francine Vein SS-797 95.1 127.4 32.2 32.2 0.09 26.05 East Francine Vein SS-798 67.7 86.4 18.6 18.6 1.18 358.73 East Francine Vein SS-801 53.6 65.2 11.5 11.5 0.87 160.80 East Francine Vein SS-802 41.3 59.6 18.3 18.2 0.58 61.94 East Francine Vein SS-804 113.7 128.9 15.2 15.2 0.22 12.15 East Francine Vein SS-805 61.9 89.3 27.4 27.4 0.11 42.14 East Francine Vein SS-806 25.5 41.9 16.4 16.4 0.38 9.85 East Francine Vein SS-807 39.3 57.9 18.7 18.7 0.26 25.35 East Francine Vein SS-808 84.9 100.0 15.1 15.1 0.78 120.32 East Francine Vein SS-811 64.3 70.0 5.8 5.5 0.15 29.46 Middle Vein SS-771 241.7 243.9 2.2 2.0 0.17 12.15 Middle Vein SS-790 764.7 773.7 9.0 8.9 0.02 11.06 Middle Vein SS-799 322.7 330.2 7.5 7.0 0.10 13.19 Middle Vein SS-808 366.1 369.7 3.6 3.6 0.04 2.11 Middle Vein SS-836 259.3 264.4 5.2 5.1 0.02 5.09 Middle Vein SS-838 116.5 128.4 12.0 11.3 0.03 2.04 Middle Vein SS-846 252.3 262.3 10.0 9.6 0.02 4.04 Middle Vein SS-852 147.2 156.4 9.2 9.2 0.02 5.40 Middle Vein SS-856 280.6 285.9 5.3 5.3 0.01 4.03 Middle Vein SS-859 143.0 146.2 3.1 3.1 0.22 12.21 Middle Vein SS-863 148.8 156.1 7.3 7.3 0.57 157.33 Middle Vein SS-865 202.2 207.5 5.2 5.2 0.01 5.30 Middle Vein SS-867 139.5 141.3 1.8 1.8 0.01 4.66 Middle Vein SS-868 93.9 99.4 5.5 5.5 0.24 26.85 Middle Vein SS-870 155.3 161.6 6.2 5.0 0.19 25.50 Middle Vein SS-872 261.3 266.8 5.5 5.1 0.04 5.58 Middle Vein SS-873 115.4 118.4 3.1 3.1 0.13 42.16 Middle Vein SS-875 175.9 184.0 8.2 8.2 0.18 18.25 Middle Vein SS-876 244.8 252.0 7.2 6.9 0.04 9.46 Middle Vein SS-877 141.1 143.7 2.6 2.6 0.13 37.72 Middle Vein SS-878 173.7 180.0 6.2 5.9 0.05 7.01 North Vein SS-773 459.7 464.3 4.6 4.6 0.11 5.67 North Vein SS-777 479.3 484.6 5.2 5.2 0.03 4.87 North Vein SS-778 579.9 584.0 4.1 4.1 0.01 14.78 North Vein SS-782 669.2 675.2 6.0 5.6 0.03 8.15 North Vein SS-784 423.8 424.4 0.6 0.6 0.21 9.07 North Vein SS-785 528.0 537.3 9.3 9.2 0.02 4.75 North Vein SS-794 692.4 697.7 5.2 5.2 0.01 6.75 North Vein SS-799 773.0 778.0 5.0 5.0 0.04 11.72 North Vein SS-832 104.9 108.4 3.5 3.5 0.24 8.24 North Vein SS-835 74.3 76.0 1.6 2.6 0.84 16.77 North Vein SS-837 67.4 70.0 2.6 2.5 0.74 5.51 North Vein SS-839 83.5 99.7 16.2 15.5 0.08 2.96 North Vein SS-840 19.5 26.9 7.4 7.1 0.18 0.48 North Vein SS-843 68.5 70.3 1.8 1.8 0.49 6.42 North Vein SS-845 76.6 94.0 17.4 17.3 0.15 9.48 North Vein SS-848 75.3 77.4 2.1 3.1 0.69 10.12 North Vein SS-850 74.3 78.3 4.0 3.9 0.61 6.40 North Vein SS-851 54.7 62.8 8.1 8.1 0.13 5.39 North Vein SS-853 54.3 60.0 5.7 5.7 0.27 5.33 North Vein SS-854 25.7 42.9 17.2 17.2 0.10 2.32 North Vein SS-857 57.0 66.9 10.0 9.9 0.30 3.13 North Vein SS-858 44.3 52.5 8.2 8.0 0.30 3.63 North Vein SS-860 40.2 45.0 4.8 4.5 0.12 2.22 North Vein SS-861 67.5 71.9 4.4 3.2 0.10 2.11 North Vein SS-896 10.4 14.8 4.4 4.3 0.24 3.19 North Vein Foot Wall Vein SS-896 100.5 102.5 2.0 2.0 0.01 5.31
View source version on businesswire.com: http://www.businesswire.com/news/home/20150806005359/en/
Hecla Mining CompanyMike Westerlund, 800-HECLA91 (800-432-5291)Vice President – Investor Relationshmc-info@hecla-mining.comhttp://www.hecla-mining.com
1 Year Hecla Mining Chart |
1 Month Hecla Mining Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions