Exhibit 99
2003-07
[LOGO]
HECLA
MINING COMPANY HECLA REPORTS $6.7 MILLION IN NET INCOME FOR FIRST QUARTER:
LOWER PRODUCTION COSTS AND INCREASES IN SILVER
PRODUCTION, SALES, GROSS PROFIT AND CASH POSITION
For The Period Ended March 31, 2003
For Release: May 1, 2003
COEUR D'ALENE, IDAHO -- Hecla Mining Company (HL:NYSE) today reported
net income of $6.7 million, or 6 cents per share, for the first quarter of 2003,
compared to $0.5 million, or 1 cent per share, in the first quarter of 2002.
Improved gold and silver prices, increased silver production and lower silver
costs improved the first quarter performance in 2003 compared to the same period
last year. Also contributing to the improvement were a one-time $4 million
litigation settlement and a $1.1 million positive cumulative effect of change in
accounting principle. Excluding the benefits of the one-time items, Hecla earned
$1.7 million in net income for the quarter, a significant improvement over last
year's first quarter. Sales in the first quarter of 2003 were $26.4 million,
compared to $23.4 million in the first quarter of 2002. Gross profit nearly
doubled from $3.7 million in the first quarter of 2002 to $7 million in the
first quarter of this year. Cash flow provided by operating activities improved
more than nine-fold in the same period, from $0.5 million to $4.8 million,
including the litigation settlement described above. As planned, exploration
activities increased to $2.1 million during the first quarter of 2003, compared
to $0.5 million during the first quarter of 2002.
Hecla Chairman and Chief Executive Officer Arthur Brown said, "Things
continue to go very well for our company. Our performance over the past 18
months has put us solidly in the mid-tier level of gold companies, while
remaining a major primary silver producer. Our cash costs are among the lowest
in the industry for both gold and silver, and our prospects for the future look
good. In addition, we are in strong financial shape with the cash on our balance
sheet from the underwritten public offering in January."
FIRST QUARTER 2003 HIGHLIGHTS
--Net income of $6.7 million, gross profit of $7 million
--2.4 million ounces of silver produced at a record low cash cost of $1.67
per ounce
--Outstanding performance at San Sebastian, including a successful
transition from contractor to owner mining
--More than 53,000 ounces of gold produced, with 35,000 ounces produced at
a cash cost of $137 per ounce
--21% increase in the price of gold compared to the first quarter of 2002
--Cash and cash equivalents increased to almost $114 million
--$4 million in settlement proceeds from Zemex Corporation
--$1.1 million positive cumulative effect of change in accounting principle
OPERATIONS
In the first quarter, Hecla produced 2.4 million ounces of silver at a
low average total cash cost of $1.67 per ounce. The company also produced 53,412
ounces of gold, with 34,944 of those ounces produced at an average total cash
cost of $137 per ounce during the first quarter of 2003. Precious metals prices
increased
Contact Vicki Veltkamp, vice president - investor and public relations
6500 N Mineral Drive, Suite 200 o Coeur d'Alene, Idaho 83815-9408 o 208/769-4100
o FAX 208/769-7612
compared to a year ago with an average realized gold price of $333 per
ounce and an average silver price of $4.69 per ounce during the quarter,
compared to $295 and $4.51, respectively, during the first quarter of 2002.
Hecla President and Chief Operating Officer Phil Baker said, "Hecla
produced more silver and at a lower cost per ounce this quarter than in any
previous quarter in our 112-year history. And this is after a record year of
production and costs in 2002. This is evidence of our commitment to growing
profitably. We also are able to confirm our production estimates of 215,000
ounces of gold and 9 million ounces of silver for 2003."
Hecla's underground San Sebastian silver mine in central Mexico was the
star performer during the first quarter. San Sebastian had record production of
1 million ounces of silver and nearly 12,000 ounces of gold during the period.
The grade of silver improved to more than 32 ounces per ton, compared to about
26 ounces per ton during the first quarter of 2002. The gold grade increased to
more than a third of an ounce per ton. As a by-product metal, gold contributed
significantly to San Sebastian's phenomenally low average total cash cost per
ounce of a negative seven cents. San Sebastian has been in the process of
converting from contractor mining to owner mining during the first quarter. That
transition has been very successful, resulting in safer mine conditions and
improvements in production, as well as adding 92 employees to Hecla's roster.
Baker said, "San Sebastian had an outstanding quarter. While we certainly could
see negative cash costs in the future, we don't necessarily expect them.
However, we do anticipate very low-cost performance going forward."
The La Camorra gold mine in Venezuela continued its trend as a solid,
consistent, low-cost producer, with 34,944 ounces of gold in the first quarter
of 2003 at an average total cash cost of $137 per ounce. La Camorra's gold
production decreased about 5,000 ounces compared to the first quarter of 2002,
primarily because of scheduled maintenance. The mine is on track to produce
150,000 ounces at an average total cash cost of $150 per ounce for 2003.
The Greens Creek mine in Alaska, in which Hecla holds a 29.73% interest
in a joint venture with Kennecott Greens Creek Mining Company, produced 740,660
ounces of silver for Hecla's account during the first quarter of 2003. The
average total cash cost at Greens Creek decreased 13% compared to the first
quarter of 2002, to $1.67 per ounce. Although the grade of silver and silver
production for the first quarter of 2003 was, as anticipated, lower than the
same period last year, increased by-product credits from a favorable gold price
continue to keep cash costs low at Greens Creek.
Hecla's third primary silver mine, the Lucky Friday in northern Idaho,
produced 635,452 ounces of silver during the first quarter of 2003, a 54%
increase in silver production over the first quarter of last year. The
improvement was due to an increased silver ore grade to nearly 16 ounces per ton
and increased tonnage processed through the mill. Management continues to work
at lowering production costs at this deep underground mine, which totaled $4.47
average total cash cost per ounce of silver during the first quarter. Although
still comparatively high, total cash costs per ounce at the Lucky Friday mine
have decreased 17% since the first quarter of 2002. According to Baker, "While
our people at Lucky Friday continue to do an excellent job of controlling costs,
we do expect higher costs due to planned mine development during the second
quarter, with lower costs again thereafter."
Contact Vicki Veltkamp, vice president - investor and public relations
6500 N Mineral Drive, Suite 200 o Coeur d'Alene, Idaho 83815-9408 o 208/769-4100
o FAX 208/769-7612
EXPLORATION
Baker said, "We are focusing closely on several excellent exploration
targets this year, particularly in Venezuela and Mexico. Results to date have
been so encouraging that we expect to begin development ramps on two or more
projects before the end of the year. This is part of our effort to double
Hecla's gold production within the next five years."
VENEZUELA
Hecla is experiencing outstanding results from its drilling program on
Block B in Venezuela. With the first 50-hole drilling program 80% complete, more
than 60% of the assays have returned ore grade results, some up to 3+ ounces of
gold per ton. A feasibility study and mine development planning are underway,
and assuming a favorable outcome of the study, Hecla could begin underground
ramp development before the end of the year. Last year, Hecla signed a 20-year
lease with the Venezuelan government-run mining company to explore and develop
the area.
At the Canaima gold property, just seven kilometers northeast of the La
Camorra mine in Venezuela, a resource of 550,000 tons grading 0.38 ounce of gold
per ton has been identified. Geologists and engineers are studying the
complexities of the hydrology and rock mechanics at the property, which lies
adjacent to and under the Cuyuni River. A feasibility study for a development
ramp is in progress.
Mine exploration on the Main and Betzy veins at the La Camorra mine
continues. The goal of this underground mine exploration is to continue to
replace ore reserves that have been mined out, which Hecla has successfully
accomplished since acquiring the mine in 1999. Results have been encouraging
enough to begin work on the development of a shaft. A decision to begin
construction is expected before the end of the year.
MEXICO
Through an exploration program last year and early this year, a
resource of nearly 150,000 tons grading 0.43 ounce of gold per ton has been
identified on the Don Sergio vein, just south of Hecla's San Sebastian mine.
Pending a positive outcome of a feasibility study, preliminary plans are being
made to start ramp development on the deposit in the third quarter.
Hecla is currently conducting exploration drilling on three other
targets on the sizeable and very prospective land position it holds surrounding
the San Sebastian mine in the state of Durango, Mexico. Baker said, "We're now
taking a look at the North, Cerro Pedernalillo and La Esperanza veins. These are
very early stage drilling programs, but are just the beginning of an extensive
exploration program we plan to conduct on numerous targets in the area."
NEVADA
A plan of operations has been submitted on schedule for the Hollister
Development Block gold exploration project in Nevada, a joint venture with Great
Basin Gold. The company is working with state and federal officials to shepherd
the plan through the U.S. permitting process.
OTHER
In January, Hecla completed an underwritten public offering of 23
million shares of common stock and received net proceeds of approximately $91.2
million in cash. Proceeds are intended to be used to fund future
Contact Vicki Veltkamp, vice president - investor and public relations
6500 N Mineral Drive, Suite 200 o Coeur d'Alene, Idaho 83815-9408 o 208/769-4100
o FAX 208/769-7612
exploration and development, working capital requirement, capital expenditures,
potential acquisitions and for other general corporate purposes.
During the first quarter, Hecla received $4 million from Zemex
Corporation to settle a lawsuit brought by Hecla against Zemex over its failure
to close on the purchase of Hecla's subsidiary, Kentucky-Tennessee Clay Company,
in early 2001.
During the first quarter, Hecla adopted Statement of Financial
Accounting Standards No. 143 "Accounting For Asset Retirement Obligations,"
which requires the fair value of reclamation liabilities at current operating
properties be recognized in the period in which it is incurred, with an offset
to property, plant and equipment to increase the carrying value of the related
assets. As a result, a $1.1 million positive cumulative effect of change in
accounting principle was recorded, which represents the difference between those
amounts determined under SFAS No. 143 and the amount previously recorded in the
consolidated financial statements.
Hecla Mining Company, headquartered in Coeur d'Alene, Idaho, mines and
processes silver and gold in the United States, Venezuela and Mexico. A
112-year-old company, Hecla has long been well known in the mining world and
financial markets as a quality silver and gold producer. Hecla's common and
preferred shares are traded on the New York Stock Exchange under the symbols HL
and HL-PrB.
Statements made which are not historical facts, such as anticipated
payments, litigation outcome, production, sales of assets, exploration results
and plans, costs, prices or sales performance are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995, and
involve a number of risks and uncertainties that could cause actual results to
differ materially from those projected, anticipated, expected or implied. These
risks and uncertainties include, but are not limited to, metals price
volatility, volatility of metals production, exploration risks and results,
project development risks and ability to raise financing. Refer to the company's
Form 10-Q and 10-K reports for a more detailed discussion of factors that may
impact expected future results. The company undertakes no obligation and has no
intention of updating forward-looking statements.
Cautionary Note to Investors - The United States Securities and
Exchange Commission permits mining companies, in their filings with the SEC, to
disclose only those mineral deposits that a company can economically and legally
extract or produce. We use certain terms in this news release, such as
"resource," that the SEC guidelines strictly prohibit us from including in our
filing with the SEC. U.S. investors are urged to consider closely the disclosure
in our Form 10-K. You can review and obtain copies of these filings from the
SEC's website at http://www.sec.gov/edgar.shtml.
-------------------------------
Hecla Mining Company news releases can be accessed on the
Internet at: http://www.hecla-mining.com
---------------------------
Contact Vicki Veltkamp, vice president - investor and public relations
6500 N Mineral Drive, Suite 200 o Coeur d'Alene, Idaho 83815-9408 o 208/769-4100
o FAX 208/769-7612
HECLA MINING COMPANY
(dollars in thousands, except per share,
per ounce and per pound amounts - unaudited)
First Quarter Ended
-----------------------------
HIGHLIGHTS MAR. 31, 2003 Mar. 31, 2002
- ----------------------------------------------------------------------------------------
FINANCIAL DATA
- ----------------------------------------------------------------------------------------
Sales of products $ 26,441 $ 23,383
Gross profit 6,955 3,734
Income from operations 2,674 1,171
Net income 6,735 486
Basic and diluted income (loss) per common share(1) 0.06 (0.02)
Cash flow provided by operating activities 4,750 523
- ----------------------------------------------------------------------------------------
SALES OF PRODUCTS BY SEGMENT
- ----------------------------------------------------------------------------------------
Silver operations(2) $ 16,924 $ 12,110
Gold operations 8,976 11,273
Other 541 --
----------- -----------
Total sales $ 26,441 $ 23,383
- ----------------------------------------------------------------------------------------
GROSS PROFIT BY SEGMENT
- ----------------------------------------------------------------------------------------
Silver operations(2) $ 4,160 $ 664
Gold operations 2,789 3,070
Other 6 --
----------- -----------
Total gross profit $ 6,955 $ 3,734
- ----------------------------------------------------------------------------------------
PRODUCTION SUMMARY - TOTALS
- ----------------------------------------------------------------------------------------
Silver - Ounces 2,398,199 2,009,997
Gold - Ounces 53,412 56,402
Lead - Tons 5,627 4,021
Zinc - Tons 6,685 6,315
Average cost per ounce of silver produced(2):
Cash operating costs ($/oz.) 1.58 2.39
Total cash costs ($/oz.)(3) 1.67 2.47
Total production costs ($/oz.) 2.83 4.02
Average cost per ounce of gold produced(2):
Cash operating costs ($/oz.) 137 137
Total cash costs ($/oz.)(3) 137 137
Total production costs ($/oz.) 206 207
- ----------------------------------------------------------------------------------------
AVERAGE METAL PRICES
- ----------------------------------------------------------------------------------------
Silver - Handy & Harman ($/oz.) 4.69 4.51
Gold - Realized ($/oz.) 333 295
Gold - London Final ($/oz.) 352 290
Lead - LME Cash (cents/pound) 20.8 22.3
Zinc - LME Cash (cents/pound) 35.7 36.0
(1) For the quarters ended March 31, 2003 and 2002, respectively, preferred
stock dividends of $0.7 million and $2 million were not declared or paid. The
preferred dividends are not included in the determination of net income;
however, they are included in determining income (loss) applicable to common
shareholders and earnings per share. Including the effects of preferred stock
dividends, income applicable to common shareholders totaled $6.1 million for the
three months ended March 31, 2003, as compared to a loss applicable to common
shareholders of $1.5 million during the same period in 2002.
(2) Includes gold produced at silver operations, which is treated as a
by-product credit in calculating silver costs per ounce.
(3) Total cash costs per ounce of silver and gold represent non-U.S. Generally
Accepted Accounting Principles (GAAP) measurements. A reconciliation of total
cash costs to cost of sales and other direct production costs (GAAP) can be
found in the cash costs per ounce reconciliation section of this news release.
Contact Vicki Veltkamp, vice president - investor and public relations
6500 N Mineral Drive, Suite 200 o Coeur d'Alene, Idaho 83815-9408 o 208/769-4100
o FAX 208/769-7612
HECLA MINING COMPANY
Consolidated Statements of Operations
(dollars and shares in thousands, except per share amounts - unaudited)
First Quarter Ended
------------------------------
MAR. 31, 2003 Mar. 31, 2002
------------- -------------
Sales of products $ 26,441 $ 23,383
--------- ---------
Cost of sales and other direct production costs 14,583 14,091
Depreciation, depletion and amortization 4,903 5,558
--------- --------
19,486 19,649
--------- --------
Gross profit 6,955 3,734
--------- --------
Other operating expenses:
General and administrative 2,039 1,877
Exploration 2,133 524
Depreciation and amortization 29 53
Provision for closed operations and environmental matters 80 109
--------- --------
4,281 2,563
--------- --------
Income from operations 2,674 1,171
--------- --------
Other income (expense):
Interest and other income 4,579 409
Miscellaneous, net (472) (146)
Interest expense (359) (464)
--------- --------
3,748 (201)
--------- --------
Income from operations, before income taxes and
cumulative effect of change in accounting principle 6,422 970
Income tax provision (759) --
--------- --------
Income from operations before cumulative effect
of change in accounting principle 5,663 970
Cumulative effect of change in accounting principle, net of income tax 1,072 --
Discontinued operations, net of income tax -- (484)
--------- --------
Net income $ 6,735 $ 486
========= ========
Basic and diluted income (loss) per common share:
Income (loss) from operations after preferred stock dividends $ 0.05 $ (0.01)
Cumulative effect of change in accounting principle 0.01 --
Loss from discontinued operations -- (0.01)
-------- --------
Basic and diluted income (loss) per common share(1) $ 0.06 $ (0.02)
========= ========
Basic weighted average number of common shares outstanding 109,320 73,840
========== ========
Diluted weighted average number of common shares outstanding 110,209 73,840
========== ========
(1) For the quarters ended March 31, 2003 and 2002, respectively, preferred
stock dividends of $0.7 million and $2 million were not declared or paid. The
preferred dividends are not included in the determination of net income;
however, they are included in determining income (loss) applicable to common
shareholders and earnings per share. Including the effects of preferred stock
dividends, income applicable to common shareholders totaled $6.1 million for the
three months ended March 31, 2003, as compared to a loss applicable to common
shareholders of $1.5 million during the same period in 2002.
Contact Vicki Veltkamp, vice president - investor and public relations
6500 N Mineral Drive, Suite 200 o Coeur d'Alene, Idaho 83815-9408 o 208/769-4100
o FAX 208/769-7612
HECLA MINING COMPANY
Consolidated Balance Sheets
(dollars and shares in thousands - unaudited)
MAR. 31, 2003 Dec. 31, 2002
- --------------------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------------------
Current assets:
Cash and cash equivalents $ 113,554 $ 19,542
Accounts and notes receivable 9,890 10,154
Inventories 15,675 14,758
Deferred income taxes 2,025 2,700
Other current assets 3,333 1,780
---------- ----------
Total current assets 144,477 48,934
Investments 125 76
Restricted investments 6,455 6,428
Properties, plants and equipment, net 90,893 92,365
Deferred income taxes 300 300
Other noncurrent assets 12,250 12,038
---------- ----------
TOTAL ASSETS $ 254,500 $ 160,141
========== ==========
- --------------------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------------------
Current liabilities:
Accounts payable and accrued expenses $ 9,245 $ 11,731
Accrued payroll and related benefits 4,432 7,603
Current portion of debt 8,490 7,296
Accrued taxes 1,296 1,572
Current portion of accrued reclamation and closure costs 7,064 7,005
---------- ----------
Total current liabilities 30,527 35,207
Long-term debt 4,476 4,657
Accrued reclamation and closure costs 42,439 42,718
Other noncurrent liabilities 6,370 5,629
---------- ----------
TOTAL LIABILITIES 83,812 88,211
---------- ----------
- --------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
- --------------------------------------------------------------------------------------------
Preferred stock 188 188
Common stock 27,349 21,547
Capital surplus 492,055 405,959
Accumulated deficit (348,809) (355,544)
Accumulated other comprehensive income (loss) 23 (36)
Stock held by grantor trust -- (66)
Treasury stock (118) (118)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 170,688 71,930
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 254,500 $ 160,141
========== ==========
Common shares outstanding at end of period 109,389 86,179
========== ==========
Contact Vicki Veltkamp, vice president - investor and public relations
6500 N Mineral Drive, Suite 200 o Coeur d'Alene, Idaho 83815-9408 o 208/769-4100
o FAX 208/769-7612
HECLA MINING COMPANY
Consolidated Statements of Cash Flows
(dollars in thousands - unaudited)
First Quarter Ended
------------------------------
MAR. 31, 2003 Mar. 31, 2002
- ---------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES
- ---------------------------------------------------------------------------------------------------------
Net income $ 6,735 $ 486
Noncash elements included in net income:
Depreciation, depletion and amortization 4,932 5,611
Cumulative effect of change in accounting principle (1,072) --
Gain on disposition of properties, plants and equipment (209) (122)
Provision for reclamation and closure costs 234 340
Deferred incomes taxes 675 --
Change in net assets of discontinued operations -- 438
Change in assets and liabilities:
Accounts and notes receivable 264 (3,230)
Inventories (917) (1,169)
Other current and noncurrent assets (415) (839)
Accounts payable and accrued expenses (2,476) (875)
Accrued payroll and related benefits (2,535) 669
Accrued taxes (276) 206
Accrued reclamation and closure costs and other noncurrent liabilities (190) (992)
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 4,750 523
--------- ---------
- ---------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
- ---------------------------------------------------------------------------------------------------------
Proceeds from sale of discontinued operations -- 1,585
Additions to properties, plants and equipment (2,027) (2,182)
Proceeds from disposition of properties, plants and equipment 325 138
Increase in restricted investments (1,377) --
Other, net -- 108
--------- ---------
NET CASH USED BY INVESTING ACTIVITIES (3,079) (351)
--------- ---------
- ---------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
- ---------------------------------------------------------------------------------------------------------
Common stock issued under warrants and stock option plans 41 983
Common stock issued 91,287 --
Borrowing on debt 1,350 3,300
Repayment on debt (337) (3,396)
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 92,341 887
--------- ---------
Net increase in cash and cash equivalents 94,012 1,059
Cash and cash equivalents at beginning of period 19,542 7,560
--------- ---------
Cash and cash equivalents at end of period $ 113,554 $ 8,619
========= =========
Contact Vicki Veltkamp, vice president - investor and public relations
6500 N Mineral Drive, Suite 200 o Coeur d'Alene, Idaho 83815-9408 o 208/769-4100
o FAX 208/769-7612
HECLA MINING COMPANY
Production Data
First Quarter Ended
--------------------------------
MAR. 31, 2003 Mar. 31, 2002
- ------------------------------------------------------------------------------------------
LA CAMORRA UNIT
- ------------------------------------------------------------------------------------------
Tons of ore milled 44,767 50,941
Days of operation 80 81
Mining cost per ton $36.87 $36.30
Milling cost per ton $13.61 $15.49
Ore grade milled - Gold (oz./ton) 0.824 0.827
Gold produced (oz.) 34,944 40,217
Average cost of gold produced:
Cash operating costs per ounce $137 $137
Total cash costs per ounce(1) $137 $137
Total production costs per ounce $206 $207
- ------------------------------------------------------------------------------------------
GREENS CREEK UNIT (REFLECTS HECLA'S 29.73% SHARE)
- ------------------------------------------------------------------------------------------
Tons of ore milled 56,161 52,600
Days of operation 90 90
Mining cost per ton $27.67 $28.99
Milling cost per ton $16.30 $14.96
Ore grade milled - Silver (oz./ton) 17.62 21.07
Silver produced (oz.) 740,660 829,198
Gold produced (oz.) 6,848 7,076
Lead produced (tons) 1,987 1,946
Zinc produced (tons) 6,082 5,778
Average cost of silver produced(2):
Cash operating costs per ounce $1.67 $1.90
Total cash costs per ounce(1) $1.67 $1.91
Total production costs per ounce $4.39 $4.45
- ------------------------------------------------------------------------------------------
SAN SEBASTIAN UNIT
- ------------------------------------------------------------------------------------------
Tons of ore processed 32,600 33,023
Days of operation 75 67
Mining cost per ton $33.57 $32.68
Milling cost per ton $37.89 $30.24
Ore grade milled - Silver (oz./ton) 32.45 25.50
Ore grade milled - Gold (oz./ton) 0.389 0.307
Silver produced (oz.) 1,022,087 768,588
Gold produced (oz.) 11,554 9,062
Average cost of silver produced(2):
Cash operating costs per ounce $(0.27) $1.34
Total cash costs per ounce(1) $(0.07) $1.51
Total production costs per ounce $0.67 $2.49
Contact Vicki Veltkamp, vice president - investor and public relations
6500 N Mineral Drive, Suite 200 o Coeur d'Alene, Idaho 83815-9408 o 208/769-4100
o FAX 208/769-7612
HECLA MINING COMPANY
Production Data (cont.)
First Quarter Ended
--------------------------------
MAR. 31, 2003 Mar. 31, 2002
- -------------------------------------------------------------------------
LUCKY FRIDAY UNIT
- -------------------------------------------------------------------------
Tons of ore processed 42,312 31,588
Days of operation 90 75
Mining cost per ton $44.61 $45.54
Milling cost per ton $6.33 $8.01
Ore grade milled - Silver (oz./ton) 15.92 13.99
Silver produced (oz.) 635,452 412,211
Gold produced (oz.) 66 47
Lead produced (tons) 3,640 2,075
Zinc produced (tons) 603 537
Average cost of silver produced(2):
Cash operating costs per ounce $4.47 $5.36
Total cash costs per ounce(1) $4.47 $5.36
Total production costs per ounce $4.48 $5.97
(1) Total cash costs per ounce of silver and gold represent non-U.S. Generally
Accepted Accounting Principles (GAAP) measurements. A reconciliation of total
cash costs to cost of sales and other direct production costs (GAAP) can be
found in the cash costs per ounce reconciliation section of this news release.
(2) Gold produced is treated as a by-product credit in calculating silver costs
per ounce.
CAPITAL ADDITIONS
(dollars in thousands)
First Quarter Ended
---------------------------------
MAR. 31, 2003 Mar. 31, 2002
------------- -------------
Greens Creek (29.73%*) $ 276 $ 696
La Camorra 819 969
San Sebastian 875 498
Other 57 19
------------- -------------
Total capitalized $ 2,027 $ 2,182
============= =============
*Hecla's share
HEDGED POSITIONS
As of March 31, 2003
Gold: 93,729 ounces hedged @ average price of $288
Contact Vicki Veltkamp, vice president - investor and public relations
6500 N Mineral Drive, Suite 200 o Coeur d'Alene, Idaho 83815-9408 o 208/769-4100
o FAX 208/769-7612
HECLA MINING COMPANY
Reconciliation of Cash Costs per Ounce to Generally Accepted
Accounting Principles (GAAP) (dollars and ounces in
thousands, except per ounce - unaudited)
First Quarter Ended
--------------------------------
MAR. 31, 2003 Mar. 31, 2002
- ---------------------------------------------------------------------------------------------
GOLD SEGMENT
- ---------------------------------------------------------------------------------------------
Total cash costs $ 4,785 $ 5,499
Divided by ounces produced 35 40
---------- --------
Total cash cost per ounce produced $ 137 $ 137
========== ========
Reconciliation to GAAP(1):
Total cash costs $ 4,785 $ 5,499
Reclamation 52 93
Treatment & freight costs (347) (379)
Change in product inventory (659) 248
Other costs -- 33
---------- --------
Costs of sales and other direct production costs (GAAP) $ 3,831 $ 5,494
========== ========
- ---------------------------------------------------------------------------------------------
SILVER SEGMENT
- ---------------------------------------------------------------------------------------------
Total cash costs $ 4,005 $ 4,956
Divided by ounces produced 2,398 2,010
---------- --------
Total cash cost per ounce produced $ 1.67 $ 2.47
========== ========
Reconciliation to GAAP:
Total cash costs $ 4,005 $ 4,956
Reclamation 233 267
Treatment & freight costs (4,654) (4,403)
By-product credits 10,891 8,553
Change in product inventory (250) (836)
Other costs (8) 60
---------- --------
Costs of sales and other direct production costs (GAAP) $ 10,217 $ 8,597
========== ========
- ---------------------------------------------------------------------------------------------
GREENS CREEK UNIT (REFLECTS HECLA'S 29.73% SHARE)
- ---------------------------------------------------------------------------------------------
Total cash costs $ 1,237 $ 1,582
Divided by ounces produced 741 829
---------- --------
Total cash cost per ounce produced $ 1.67 $ 1.91
========== ========
Reconciliation to GAAP:
Total cash costs $ 1,237 $ 1,582
Reclamation 72 147
Treatment & freight costs (2,989) (3,094)
By-product credits 5,514 5,077
Change in product inventory (293) (892)
---------- --------
Costs of sales and other direct production costs (GAAP) $ 3,541 $ 2,820
========== ========
- ---------------------------------------------------------------------------------------------
SAN SEBASTIAN UNIT
- ---------------------------------------------------------------------------------------------
Total cash costs $ (72) $ 1,164
Divided by ounces produced 1,022 769
---------- --------
Total cash cost per ounce produced $ (0.07) $ 1.51
========== ========
Reconciliation to GAAP:
Total cash costs $ (72) $ 1,164
Reclamation 152 99
Treatment & freight costs (510) (545)
By-product credits 4,062 2,636
Change in product inventory 18 39
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Costs of sales and other direct production costs (GAAP) $ 3,650 $ 3,393
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LUCKY FRIDAY UNIT
- ---------------------------------------------------------------------------------------------
Total cash costs $ 2,840 $ 2,210
Divided by ounces produced 635 412
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Total cash cost per ounce produced $ 4.47 $ 5.36
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Reconciliation to GAAP:
Total cash costs $ 2,840 $ 2,210
Reclamation 9 21
Treatment & freight costs (1,155) (764)
By-product credits 1,315 840
Change in product inventory 25 17
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Costs of sales and other direct production costs (GAAP) $ 3,034 $ 2,324
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(1) Costs per ounce of gold are based on the gold produced by La Camorra only.
Contact Vicki Veltkamp, vice president - investor and public relations
6500 N Mineral Drive, Suite 200 o Coeur d'Alene, Idaho 83815-9408 o 208/769-4100
o FAX 208/769-7612