HECLA MINING CO/DE/ Q3 FY2024 earnings call

Management Statement and Operational Highlights

• Cassie Boggs introduced Rob Krcmarov as the incoming CEO, highlighting his experience and Hecla's assets.
• Rob Krcmarov emphasized Hecla's strong team, world-class assets, culture of innovation, ESG practices, and exploration potential.
• Russell Lawlar discussed capital allocation, debt reduction, silver revenue, and copper payability at Greens Creek.
• Carlos Aguiar provided details on individual mine performances, including Greens Creek's downtime, Lucky Friday's production and cost, Casa Berardi's transition, and Keno Hill's permitting delays and exploration.
• Kurt Allen shared Keno Hill's exploration results, including high-grade intercepts in veins.
• Cassie Boggs spoke about strategy, stakeholder outreach, and guidance revisions, noting focus on Keno Hill's measured growth and stakeholder collaboration.

Segment Performance

• Greens Creek: Produced 1.9 million ounces of silver in Q3. Throughput was lower due to 7 days of unplanned downtime. Revenues higher than Q2. Cash cost per ounce $0.93, AISC $7.04. Production guidance revised to 8.6-9 million ounces, with cost guidance reduced.
• Lucky Friday: Produced 1.2 million ounces in Q3. Lower production due to lower mill throughput and grades. Cash cost $9.98/ounce, AISC $19.48/ounce. Production guidance revised to 4.7-5 million ounces, AISC guidance increased to $14.50-$15/ounce.
• Casa Berardi: Produced 21,000 ounces in Q3. Cash cost $1,754/ounce, AISC $2,059/ounce. Production and capital guidance reiterated. Transitioning to surface only operation.
• Keno Hill: Produced ~600,000 ounces in Q3. Mill offline for 35 days due to permitting delays. Expenditures on production cost within guidance. Capital investment in dry stack tail. Exploration success with high-grade intercepts. Production guidance affirmed.

Guidance

• Lowered silver production guidance for Greens Creek (8.6-9 million ounces) and Lucky Friday (4.7-5 million ounces) while affirming Keno Hill's production.
• Increased Lucky Friday's AISC guidance to $14.50-$15/ounce and reduced Greens Creek's cost guidance.
• Affirmed capital and exploration guidance.

Risks

• Permitting delays at Keno Hill impacting mill operations.
• Stakeholder concerns in Yukon affecting operations and production timelines.
• Labor cost fluctuations, including contractor usage affecting costs.
• Market conditions impacting metal prices and cash flow.

Question and Answer

• Q: Lucas Pipes asked about Hecla's strategic positioning.

A: Rob Krcmarov emphasized focus on organic growth, Keno Hill's measured path, and staying in Canada/US.

• Q: Heiko Ihle asked about labor costs.

A: Russell Lawlar and Kurt Allen discussed labor costs, contractor usage, and expected reduction in contractor labor in Q4.

• Q: Mike Parkin asked about Keno Hill's tailings capacity and future updates.

A: Rob Krcmarov mentioned continuing tailings capacity expansion and plans for an Investor Day.

• Q: Sean Wondrack asked about debt reduction.

A: Russell Lawlar discussed deleveraging goals and historical net leverage targets.

• Q: Joseph Reagor asked about Keno Hill's mining method cost savings and dividend policy.

A: Carlos Aguiar and Rob Krcmarov addressed mining method safety focus and dividend policy discretion.