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[HECLA MINING COMPANY LETTERHEAD]
FOURTH QUARTER REPORT TO SHAREHOLDERS
FOR THE QUARTER ENDING DECEMBER 31, 1993
FEBRUARY 3, 1994
HECLA REPORTS FOURTH QUARTER AND YEAR-END RESULTS
COEUR D'ALENE, IDAHO -- Hecla Mining Company (HL:NYSE) today reported a
net loss of $3.8 million on revenue of $19.5 million for the fourth quarter of
1993. After a $2 million dividend to preferred shareholders, the Company's
loss for the 1993 quarter amounted to $5.8 million, or 17 cents per common
share. This is in contrast to a net loss of $51.1 million, or $1.65 per common
share, for the same period of 1992.
For the year, Hecla reported a net loss of $11.7 million on revenue of
$84.8 million. After preferred dividends of $4.1 million, the Company's loss
for 1993 amounted to $15.8 million, or 48 cents per common share. This
compares with a loss of $49.3 million, or $1.60 a share, on revenue of $113.1
million for 1992. In 1992, noncash asset write-downs and reclamation accruals
of $41 million made up the bulk of the loss. In 1993, similar charges to
earnings accounted for $2.5 million of the loss. Total revenue for 1993
declined 25 percent compared with 1992 mainly as the result of curtailed metals
production at the silver operations and lower grade ore being mined at the
Republic mine. Lead and zinc, important byproducts of Hecla's silver
operations, were affected by severely depressed prices with lead at an
eight-year low. Reduced production and low lead and zinc prices offset the
fourth quarter improvement in precious metals prices. "We are encouraged by
the recent strength of the precious metals market, and that lead and zinc
prices have also begun to trend upward," said Arthur Brown, chairman, president
and chief executive officer.
On December 29, 1993, the Company signed a definitive agreement to acquire
Equinox Resources Ltd. (EQX:TSE) of Vancouver, British Columbia, for 0.3 of a
share of Hecla common stock for each share of Equinox's outstanding common
stock. Due diligence by both parties has been satisfactorily completed. The
agreement will be presented for approval at a meeting of Equinox shareholders
on February 25, 1994. The acquisition immediately brings Hecla 30,000 ounces
of annual gold production from the American Girl mine in southern California,
plus a suite of promising gold and silver exploration projects. Equinox's
Rosebud deposit in northern Nevada has the potential to add more than 70,000
ounces of annual gold production to Hecla's account.
Hecla's first operation outside the United States and Canada began
production early in 1994. The La Choya mine, located in Sonora, Mexico, is
expected to produce 63,000 ounces of gold in 1994. "This area of Mexico is
drawing intense interest from other gold companies, and we believe our presence
there positions Hecla well to participate in the future growth of mining in
that country," Brown said.
During the fourth quarter, Hecla exchanged 655,000 common shares for all
the outstanding common shares of Mountain West Products in Rexburg, Idaho. The
acquisition will strengthen the Company's position in the landscape products
market with volcanic scoria, pumice and soil additives.
Hecla Mining Company has its headquarters in Coeur d'Alene, Idaho. During
its 103-year history, Hecla has been a leading U.S. producer of silver and
lead, and more recently a significant supplier of gold and industrial minerals.
-HL-
RESULTS IN BRIEF
Fourth Quarter Year Ended
(dollars in thousands, except --------------------------------- ---------------------------------
per-share amounts) Dec. 31, 1993 Dec. 31, 1992 Dec. 31, 1993 Dec. 31, 1992
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Total revenue $ 19,482 $ 19,021 $ 84,812 $ 113,079
Net loss (3,819) (51,131) (11,735) (49,289)
Loss applicable to
common shareholders (5,831) (51,131) (15,805) (49,289)
Loss per common share (0.17) (1.65) (0.48) (1.60)
Sale of products
Gold operations 4,831 5,250 21,375 31,733
Silver operations 2,379 3,971 13,476 25,687
Industrial minerals 10,665 9,197 44,953 43,231
Specialty metals 476 -- 2,043 --
Total sales 18,351 18,418 81,847 100,651
Gross profit (loss)
Gold operations 671 1,064 5,241 6,812
Silver operations (1,795) (3,925) (9,329) (7,954)
Industrial minerals 889 161 5,038 5,012
Specialty metals (210) -- (504) --
Total gross profit (loss) (445) (2,700) 446 3,870
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AVERAGE METAL PRICES
Fourth Quarter Year Ended
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Dec. 31, 1993 Dec. 31, 1992 Dec. 31, 1993 Dec. 31, 1992
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Gold (dollars/ounce) $ 374 $ 338 $ 360 $ 344
Silver (dollars/ounce) 4.60 3.74 4.30 3.94
Lead (cents/pound) 19 22 18 25
Zinc (cents/pound) 43 49 44 56
(more)
Contact Bill Booth, Manager - Investor and Public Affairs
6500 Mineral Drive * Coeur d'Alene, Idaho 83814-8788 * 208/769-4100
* FAX 208/769-4159
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HECLA MINING COMPANY
SELECTED FINANCIAL INFORMATION
(in thousands, except per-share amounts)
Fourth Quarter Year Ended
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Dec. 31, 1993 Dec. 31, 1992 Dec. 31, 1993 Dec. 31, 1992
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Income Statement Data:
Sales of products $ 18,351 $ 18,418 $ 81,847 $ 100,651
Gross profit (loss) (445) (2,700) 446 3,870
General & administrative 2,003 2,874 6,961 8,520
Exploration & research 1,492 2,177 4,353 8,976
Depreciation & amortization 167 413 669 819
Reduction in carrying value of mining properties 200 27,928 200 27,928
Provision for closed operations &
environmental matters 1,735 12,173 2,307 12,670
Loss from operations (6,042) (48,265) (14,044) (55,043)
Other income (expense):
Interest and other income 1,131 603 2,965 12,428
Loss on sale of investments -- (2,115) (144) (2,115)
Miscellaneous income (expense) -- (55) 40 34
Interest expense:
Total interest cost (1,186) (2,120) (5,023) (6,905)
Less amount capitalized 1,306 618 3,533 2,070
Loss before income taxes and cumulative effect
of change in accounting principles (4,791) (51,334) (12,673) (49,531)
Income tax benefit (972) (203) (938) (345)
Cumulative effect of change in accounting principles -- -- -- 103
Net loss (3,819) (51,131) (11,735) (49,289)
Dividends on preferred stock 2,012 -- 4,070 --
Loss applicable to common shareholders (5,831) (51,131) (15,805) (49,289)
Loss per common share (0.17) (1.65) (0.48) (1.60)
Weighted average number of common
shares outstanding 34,016 31,587 32,915 30,866
Common shares outstanding at end of period 34,583 31,587
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Cash Flow Data:
Cash flow from operations 6,139 9,481
Cash, cash equivalents and short-term
investments at end of period 65,431 3,287
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Dec. 31, 1993 Dec. 31, 1992
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Selected Balance Sheet Data:
Total current assets $ 97,227 $ 32,968
Properties, plants and equipment, net 222,870 179,827
Total assets 332,878 222,443
Working capital 77,620 20,270
Total current liabilities 19,607 12,698
Long-term debt 49,489 70,382
Total shareholders' equity 240,062 113,719
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PRODUCTION DATA
Fourth Quarter Year Ended
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Dec. 31, 1993 Dec. 31, 1992 Dec. 31, 1993 Dec. 31, 1992
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REPUBLIC UNIT
Gold (oz.) 11,241 11,240 49,601 58,343
Silver (oz.) 70,541 64,167 276,688 299,957
Cash cost per oz. of gold $ 248 $ 194 $ 207 $ 176
Full cost per oz. of gold $ 308 $ 253 $ 262 $ 220
LUCKY FRIDAY UNIT
Silver (oz.) 474,805 547,040 2,122,738 2,031,779
Gold (oz.) 242 257 972 965
Lead (tons) 3,930 5,460 19,795 21,336
Zinc (tons) 858 1,125 4,385 4,213
Cash cost per oz. of silver $ 6.63 $ 4.47 $ 5.54 $ 4.12
Full cost per oz. of silver $ 7.88 $ 5.64 $ 6.77 $ 5.35
GREENS CREEK UNIT
Silver (oz.) -- 472,793 551,107 1,959,368
Gold (oz.) -- 2,183 2,826 9,094
Lead (tons) -- 1,162 1,298 4,650
Zinc (tons) -- 2,839 3,453 11,385
Cash cost per oz. of silver $ -- $ 5.96 $ 5.11 $ 4.82
Full cost per oz. of silver $ -- $ 7.69 $ 7.16 $ 6.54
OTHER (CACTUS AND MISCELLANEOUS)
Gold (oz.) 1,362 3,645 7,316 29,252
Silver (oz.) 4,339 20,080 24,165 439,744
TOTAL PRODUCTION & AVERAGE COSTS
Silver (oz.) 549,685 1,104,080 2,974,698 4,730,848
Gold (oz.) 12,845 17,325 60,715 97,654
Lead (tons) 3,930 6,622 21,093 25,986
Zinc (tons) 858 3,964 7,838 15,598
Average cash cost per oz. of gold $ 249 $ 191 $ 212 $ 188
Average full cost per oz. of gold $ 310 $ 246 $ 268 $ 258
Average cash cost per oz. of silver $ 6.63 $ 5.16 $ 5.45 $ 4.51
Average full cost per oz. of silver $ 7.88 $ 6.59 $ 6.85 $ 5.89
Contact Bill Booth, Manager - Investor and Public Affairs (208) 769-4100