Exhibit 99
Hecla Reports 77% Increase in Earnings for 1st Half of 2003;
Highest Operating Cash Flow in More Than a Decade
COEUR D'ALENE, Idaho--(BUSINESS WIRE)--July 31, 2003--Hecla Mining
Company (NYSE:HL) today reported net income before preferred stock
dividends of $9.3 million, or 7 cents per share, for the first six
months of 2003.
This is a 77% increase compared to net income of $5.2 million, or
2 cents per share, in the first half of 2002. The company continued on
track for record silver production at record low costs in 2003. Gross
profit from operations for the first half of the year was $16.6
million, a 43% improvement over the first six months of 2002. Cash
flow provided by operating activities was the highest in over a
decade, increasing 97% to $13 million, compared to $6.6 million in the
first half of last year.
For the second quarter of 2003, Hecla reported net income before
preferred stock dividends of $2.5 million, or 2 cents per share,
compared to $4.8 million, or 4 cents per share, in the second quarter
of 2002. However, gross profit for the second quarter increased 23% to
$9.6 million, compared to $7.9 million in the second quarter of last
year. Cash flow also improved on a quarter-to-quarter comparison, from
$6.1 million in the second quarter of 2002 to $8.2 million in the
second quarter of this year.
Hecla's President and Chief Executive Officer Phillips S. Baker,
Jr., said, "This is Hecla's sixth consecutive quarter of net income.
We generated enough cash flow to greatly increase our exploration
program and pay down $5.5 million in debt while maintaining our cash
balance. I'm very pleased with where we are operationally and
financially and I'm looking forward to increasing our production in
the future as we begin to develop some of our excellent exploration
opportunities in Mexico and Venezuela."
Second Quarter 2003 Highlights
-- Net income of $2.5 million, gross profit of $9.6 million, cash
flow provided by operating activities of $8.2 million
-- Silver production of 2.4 million ounces, at a record low
average total cash cost of $1.58 per ounce, including total
cash costs of 20 cents per ounce at the San Sebastian mine
-- 51,780 ounces of gold produced, with La Camorra's average
total cash cost at $139 per ounce of gold
-- Reduction in long-term debt to $7.6 million, with cash and
cash equivalents of $113.4 million
-- Exploration expenditures of $3.6 million
-- Progress on Don Sergio and Block B projects
Operations
In the second quarter, Hecla produced 2.4 million ounces of silver
at a record low average total cash cost of $1.58 per ounce. For the
first six months of 2003, Hecla produced 4.8 million ounces of silver
at an average total cash cost of $1.62 per ounce. Gross profit from
the silver segment for the first six months was $8.9 million. Hecla
anticipates mining approximately 9 million ounces of silver this year,
at under $2 per ounce. Gold production in the second quarter of 2003
totaled 51,780 ounces. For the first six months, Hecla produced
105,192 ounces of gold at an average total cash cost of $138 per
ounce. Total gold production in 2003 is estimated at approximately
215,000 ounces.
The total cash cost per ounce of silver at Hecla's San Sebastian
mine in Mexico decreased 84% from the second quarter of 2002, to just
20 cents per ounce of silver during the second quarter of this year.
The average total cash cost of production for the first six months of
2003 was 7 cents per ounce of silver. Low costs at San Sebastian are
due in part to significant by-product credits from increased gold
production and a higher average gold price. San Sebastian produced 1
million ounces of silver and 11,505 ounces of gold in the second
quarter of 2003. The mine's silver production increased 23% in the
first half of this year compared to the first six months of 2002. For
the first half of the year, San Sebastian mined 2 million ounces of
silver and 23,059 ounces of gold, with an average ore grade of 30
ounces of silver per ton and more than a third of an ounce of gold per
ton.
The Greens Creek silver mine in Alaska, in which Hecla holds a
29.73% interest, produced 832,705 ounces of silver for Hecla's account
in the second quarter of this year, and 1.6 million ounces of silver
in the first six months. Production costs continue to be very low, and
have decreased from the same period a year ago, with the average total
cash cost of silver during the second quarter at $1 per ounce and in
the first six months at $1.31 per ounce. The average ore grade of 18.4
ounces of silver per ton during the first half of 2003 is about two
ounces less than the same period a year ago, although the grade of
zinc, a by-product metal, has increased. Gold is also an important
by-product at this polymetallic mine, and the increased gold price has
offset any impact to gross profit from the slightly lower silver
production caused by the lower silver grade. The silver ore grade at
Greens Creek is forecast to maintain its current level for the
remainder of the year.
The Lucky Friday silver mine in northern Idaho contributed 1.2
million ounces of silver during the first six months of 2003, with
601,862 ounces of silver produced in the second quarter. The total
cash cost at Lucky Friday was $4.68 per ounce of silver in the second
quarter and $4.57 per ounce of silver for the first six months of the
year. The silver ore grade at the Lucky Friday mine has improved by
about two ounces per ton compared to the first six months of 2002, and
is now running more than 16 ounces of silver per ton.
The La Camorra mine in Venezuela produced 32,109 ounces of gold
during the second quarter of 2003, at a low average total cash cost of
$139 per ounce. For the first six months of the year, La Camorra has
produced 67,053 ounces of gold at an average total cash cost of $138
per ounce, and is on track to produce 145,000 to 150,000 ounces of
gold during 2003. Mining costs per ton at La Camorra during the second
quarter of 2003 were down nearly $10 per ton compared to the same
period last year, and down about $4 per ton compared to the first
quarter of 2003. The decrease is in part due to a benefit derived from
the weak Venezuelan currency, as well as higher unit costs in the
second quarter of 2002 because of development activities during that
time. Mining at La Camorra during the second quarter of this year took
place in a portion of the mine containing a lower gold ore grade when
compared to the same period a year ago. However, the ore grade is
expected to improve in the next six months and should average
approximately three-quarters of an ounce of gold per ton for the year.
Exploration
Hecla tripled exploration expenditures during the second quarter
of 2003 compared to the same period a year ago, and spent about $5.8
million during the first six months of the year on exploration. Baker
said, "We've had good results from those expenditures already this
year. We've begun development on the Don Sergio vein at the San
Sebastian mine in Mexico. In addition, we advanced the engineering
plans, resource definition and permitting on two other projects in
Venezuela and Nevada, with the potential to start two more development
ramps by year-end. This is great progress." Total exploration
expenditures for 2003 are expected to be in the range of $12 million
to $15 million.
VENEZUELA
At the Block B gold project in the El Callao gold district in
Venezuela, Hecla has seen enough exploration success to begin
on-the-ground work in preparation for an eventual development
decision. It is anticipated that a good portion of the identified
resource will be upgraded to the reserve category by year-end. Design
work on surface facilities such as the water and electrical systems,
access road and site preparation is underway and compressors,
generators and other equipment are being purchased. The Block B
project is located about 70 miles from Hecla's La Camorra gold mine,
and ore would be trucked to the La Camorra mill for processing. A
preliminary environmental report has been submitted to the regulatory
agencies and, assuming a favorable outcome of the exploration program
and feasibility study, Hecla could make a decision on underground ramp
development at Block B before the end of the year. According to Baker,
"This project has the potential to substantially increase our gold
production by spending relatively little capital, allowing for very
high returns on investment." Also in the Block B district, evaluation
on an additional 19 exploration targets has been completed and two of
those targets have been scheduled for surface drilling in the second
half of the year.
Work on the Main and Betzy veins of the La Camorra gold mine is
ongoing in an effort to identify new ore shoots and extend existing
resources. Deep exploration continues, with 10 holes drilled so far.
The newest phase of the program at La Camorra involves directional
drilling as much as 300 meters below the current resource envelope.
The objective is to identify a larger resource and extend the mine
life. The first phase of the program is scheduled for completion in
2004.
Hecla is also working on a feasibility study for the development
of the Canaima gold resource, which is just 5 miles away from the La
Camorra mill and easily accessible by road. A preliminary mine plan
has been completed and the final feasibility study is targeted for the
fourth quarter.
MEXICO
The development ramp at the Don Sergio vein is on schedule, and
the surface infrastructure construction is nearly complete. The
project is on target to begin commercial production in the first
quarter of 2004. Don Sergio is expected to add about 30,000 ounces of
gold and 170,000 ounces of silver annually for two years to San
Sebastian's production. Exploration drilling designed to add to the
resource base continued during the second quarter on both the Francine
and Don Sergio veins, as well as several other target areas.
Baker said, "We have a very large property position surrounding
the San Sebastian mine, and we are extremely encouraged by the
potential for the region. We are now undertaking structural analysis
and geochemistry programs that we believe will be excellent targeting
tools, leading to exploration success down the road."
OTHER
Approximately $0.8 million dollars has been spent this year at the
Hollister Block gold project in Nevada. Good progress has been made on
the permitting process and the company is still working toward the
goal of beginning underground ramp development by the end of the year.
At the Greens Creek silver mine in Alaska, 1,000 feet of
exploration drift was completed in the first half of the year. A
drilling program has begun on four new targets. The surface
exploration at Greens Creek has also identified new targets requiring
follow-up drilling.
A six-hole exploration program designed to identify ore deeper in
the vein system at the Lucky Friday mine was completed during the
second quarter. Results confirm that silver ore grades similar to the
grade currently being mined continue 800 feet below the current mining
area.
Other
Compensation of Hecla executives includes a component of company
stock. Over the past two years, management has increased its equity
ownership through stock options and by taking stock in lieu of cash
compensation. With more equity compensation, executives can be
expected to sell shares from time to time, when permitted, to raise
cash, to cover payroll taxes, to diversify their portfolios or for
other personal purposes. There are a number of restrictions that
prohibit executives from trading while in possession of any material
non-public information about the company, leaving only small windows
of opportunity during the year for insider trading. Therefore, any
selling by executives is not a reflection of their confidence in the
future performance of the company's stock.
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.
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.
HECLA MINING COMPANY
(dollars in thousands, except per share, per ounce and
per pound amounts - unaudited)
Second Quarter Ended Six Months Ended
HIGHLIGHTS June 30, June 30, June 30, June 30,
2003 2002 2003 2002
FINANCIAL DATA
Sales of
products $ 30,203 $ 28,663 $ 56,643 $ 52,045
Gross profit 9,646 7,857 16,600 11,590
Income from
operations 3,492 4,721 6,165 5,891
Net income 2,540 4,755 9,273 5,241
Basic and diluted
income per common
share (1) 0.02 0.04 0.07 0.02
Cash flow
provided by
operating
activities 8,240 6,056 12,990 6,579
SALE OF PRODUCTS BY
SEGMENT
Silver
operations(2) $ 19,272 $ 16,626 $ 36,195 $ 28,735
Gold
operations 10,935 12,037 19,911 23,310
Other (4) - - 537 - -
------------- ------------ ------------ ----------
Total sales $ 30,203 $ 28,663 $ 56,643 $ 52,045
GROSS PROFIT (LOSS)
BY SEGMENT
Silver
operations(2) $ 4,736 2,781 $ 8,896 3,444
Gold
operations 4,936 5,076 7,725 8,146
Other (26) - - (21) - -
------------- ------------ ------------ ----------
Total gross
profit $ 9,646 $ 7,857 $ 16,600 $ 11,590
PRODUCTION SUMMARY -
TOTALS
Silver -
Ounces 2,444,109 2,333,573 4,842,308 4,343,571
Gold - Ounces 51,780 65,323 105,192 121,725
Lead - Tons 5,407 5,298 11,034 9,319
Zinc - Tons 7,320 7,052 14,005 13,367
Average cost per
ounce of silver
produced(2):
Cash operating
costs ($/oz.) 1.46 1.99 1.52 2.18
Total cash
costs ($/oz.)(3) 1.58 2.09 1.62 2.26
Total production
costs ($/oz.) 2.84 3.52 2.83 3.75
Average cost per
ounce of gold
produced(2):
Cash operating
costs ($/oz.) 139 131 138 134
Total cash costs
($/oz.)(3) 139 131 138 134
Total production
costs ($/oz.) 206 201 206 204
AVERAGE METAL PRICES
Silver -
Handy & Harman
($/oz.) 4.62 4.75 4.66 4.63
Gold - Realized
($/oz.) 326 306 329 301
Gold - London
Final ($/oz.) 347 313 349 302
Lead - LME Cash
(cents/pound) 20.7 21.6 20.7 21.4
Zinc - LME Cash
(cents/pound) 35.2 36.3 35.4 35.7
(1) For the quarters and six months ended June 30, 2003 and 2002,
respectively, preferred stock dividends of $0.7 million and
$2 million, respectively, and $1.3 million and $4 million,
respectively, were not declared or paid. The preferred dividends
are not included in the determination of net income; however, they
are included in determining income applicable to common
shareholders and earnings per share. Including the effects of
preferred stock dividends, income applicable to common
shareholders totaled $1.9 million and $2.7 million, respectively,
for the three months ended June 30, 2003 and 2002, and $8 million
and $1.2 million, respectively, for the six months ended June 30,
2003 and 2002.
(2) Includes gold produced at silver operations, which is treated as a
by-product credit and included in the calculation of 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.
HECLA MINING COMPANY
Consolidated Statements of Operations
(dollars and shares in thousands, except per share amounts -
unaudited)
Second Quarter Six Months
Ended Ended
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
Sales of products $ 30,203 $ 28,663 $ 56,643 $ 52,045
-------- -------- -------- ---------
Cost of sales and
other direct
production costs 15,335 14,675 29,919 28,766
Depreciation,
depletion and
amortization 5,222 6,131 10,124 11,689
-------- -------- -------- ---------
20,557 20,806 40,043 40,455
-------- -------- -------- ---------
Gross profit 9,646 7,857 16,600 11,590
-------- -------- -------- ---------
Other operating
expenses:
General and
administrative 2,222 1,767 4,261 3,645
Exploration 3,638 1,206 5,771 1,730
Depreciation and
amortization 171 15 200 67
Provision for
closed operations
and environmental
matters 123 148 203 257
-------- -------- -------- ---------
6,154 3,136 10,435 5,699
-------- -------- -------- ---------
Income from operations 3,492 4,721 6,165 5,891
-------- -------- -------- ---------
Other income (expense):
Interest and other
income 980 685 5,559 1,094
Miscellaneous, net (752) 237 (1,225) 91
Interest expense (323) (473) (682) (937)
-------- -------- -------- ---------
(95) 449 3,652 248
-------- -------- -------- ---------
Income from
operations before income
taxes and cumulative
effect of change
in accounting
principle 3,397 5,170 9,817 6,139
Income tax provision (857) (112) (1,616) (112)
-------- -------- -------- ---------
Income from
continuing
operations before
cumulative effect
of change in
accounting
principle 2,540 5,058 8,201 6,027
Cumulative effect of
change in
accounting
principle, net of
income tax - - - - 1,072 - -
Discontinued
operations, net of
income tax - - (303) - - (786)
-------- -------- -------- ---------
Net income $ 2,540 $ 4,755 $ 9,273 $ 5,241
======== ======== ======== =========
Basic and diluted
income (loss) per
common share:
Income from
operations after
preferred stock
dividends $ 0.02 $ 0.04 $ 0.06 $ 0.03
Cumulative effect
of change in
accounting
principle - - - - 0.01 - -
Loss from
discontinued
operations - - - - - - (0.01)
-------- -------- -------- ---------
Basic and diluted
income per
common share (1) $ 0.02 $ 0.04 $ 0.07 $ 0.02
======== ======== ======== =========
Basic weighted
average number of
common shares
outstanding 109,427 75,010 109,374 74,426
======== ======== ======== =========
Diluted weighted
average number of
common shares
outstanding 110,052 75,010 110,173 74,426
======== ======== ======== =========
(1) For the quarters and six months ended June 30, 2003 and 2002,
respectively, preferred stock dividends of $0.7 million and $2
million, respectively, and $1.3 million and $4 million,
respectively, were not declared or paid. The preferred dividends
are not included in the determination of net income; however, they
are included in determining income applicable to common
shareholders and earnings per share. Including the effects of
preferred stock dividends, income applicable to common
shareholders totaled $1.9 million and $2.7 million, respectively,
for the three months ended June 30, 2003 and 2002, and $8 million
and $1.2 million, respectively, for the six months ended June 30,
2003 and 2002.
HECLA MINING COMPANY
Consolidated Balance Sheets
(dollars and shares in thousands - unaudited)
June 30, 2003 Dec. 31, 2002
ASSETS
Current assets:
Cash and cash equivalents $ 113,380 $ 19,542
Accounts and notes
receivable 13,164 10,154
Inventories 15,166 14,758
Deferred income taxes 1,350 2,700
Other current assets 1,906 1,780
-------------- --------------
Total current assets 144,966 48,934
Investments 275 76
Restricted investments 6,455 6,428
Properties, plants and
equipment, net 85,252 86,725
Mineral interests, net 5,194 5,640
Deferred incomes taxes 300 300
Other noncurrent assets 12,489 12,038
-------------- --------------
Total assets $ 254,931 $ 160,141
============== ==============
LIABILITIES
Current liabilities:
Accounts payable and
accrued expenses $ 11,311 $ 11,731
Accrued payroll and
related benefits 6,399 7,603
Current portion of debt 4,279 7,296
Accrued taxes 2,301 1,572
Current portion of
accrued reclamation and
closure costs 7,000 7,005
-------------- --------------
Total current
liabilities 31,290 35,207
Long-term debt 3,271 4,657
Accrued reclamation and
closure costs 41,853 42,718
Other noncurrent
liabilities 4,851 5,629
-------------- --------------
Total liabilities 81,265 88,211
-------------- --------------
SHAREHOLDERS' EQUITY
Preferred stock 188 188
Common stock 27,373 21,547
Capital surplus 492,313 405,959
Accumulated deficit (346,271) (355,544)
Accumulated other
comprehensive income
(loss) 181 (36)
Stock held by grantor trust - - (66)
Treasury stock (118) (118)
-------------- --------------
Total shareholders' equity 173,666 71,930
-------------- --------------
Total liabilities and
shareholders' equity $ 254,931 $ 160,141
============== ==============
Common shares outstanding
at end of period 109,485 86,179
============== ==============
HECLA MINING COMPANY
Consolidated Statements of Cash Flows
(dollars in thousands - unaudited)
Six Months Ended
June 30, 2003 June 30, 2002
OPERATING ACTIVITIES
Net income $ 9,273 $ 5,241
Noncash elements included in
net income:
Depreciation, depletion
and amortization 10,324 11,756
Cumulative effect of
change in accounting
principle (1,072) - -
(Gain) loss on disposition
of properties, plants and
equipment (296) (185)
Provision for reclamation
and closure costs 132 751
Deferred income taxes 1,350 - -
Change in net assets of
discontinued operations - - 858
Change in assets and
liabilities:
Accounts and notes
receivable (3,010) (6,102)
Inventories (408) (3,420)
Other current and
noncurrent assets (577) (886)
Accounts payable and
accrued expenses (402) 102
Accrued payroll and
related benefits (554) 574
Accrued taxes 729 137
Accrued reclamation and
closure costs and other
noncurrent liabilities (2,499) (2,247)
-------------- ---------------
Net cash provided by
operating activities 12,990 6,579
-------------- ---------------
INVESTING ACTIVITIES
Proceeds from sale of
discontinued operations - - 1,585
Additions to properties,
plants and equipment (6,804) (6,070)
Proceeds from disposition of
properties, plants and
equipment 486 5,622
Increase in restricted
investments (27) - -
Other, net 78 137
-------------- ---------------
Net cash provided (used) by
investing activities (6,267) 1,274
-------------- ---------------
FINANCING ACTIVITIES
Common stock issued under
warrants and stock option
plans 248 2,561
Common stock issued, net of
offering costs 91,270 - -
Borrowing on debt 1,350 3,300
Repayment on debt (5,753) (8,201)
-------------- ---------------
Net cash provided (used) by
financing activities 87,115 (2,340)
-------------- ---------------
Net increase in cash and
cash equivalents 93,838 5,513
Cash and cash equivalents at
beginning of period 19,542 7,560
-------------- ---------------
Cash and cash equivalents at
end of period $ 113,380 $ 13,073
============== ===============
HECLA MINING COMPANY
Production Data
Second Quarter Ended Six Months Ended
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
LA CAMORRA UNIT
Tons of ore processed 48,886 51,225 93,653 102,167
Days of operation 82 77 162 158
Mining cost per ton $ 32.32 $ 42.18 $ 34.50 $ 39.25
Milling cost per ton $ 14.88 $ 15.82 $ 14.27 $ 15.65
Ore grade milled -
Gold (oz./ton) 0.684 0.928 0.751 0.877
Gold produced (oz.) 32,109 45,869 67,053 86,086
Average cost per
ounce of gold
produced:
Cash operating
costs $ 139 $ 131 $ 138 $ 134
Total cash costs(1) $ 139 $ 131 $ 138 $ 134
Total production
costs $ 206 $ 201 $ 206 $ 204
GREENS CREEK UNIT
(Reflects Hecla's
29.73% share)
Tons of ore milled 57,713 54,690 113,874 107,290
Days of operation 91 91 181 181
Mining cost per ton $ 28.48 $ 28.57 $ 28.08 $ 28.77
Milling cost per ton $ 16.22 $ 15.36 $ 16.26 $ 15.16
Ore grade milled -
Silver (oz./ton) 19.11 20.07 18.37 20.56
Silver produced (oz.) 832,705 858,565 1,573,365 1,687,764
Gold produced (oz.) 8,107 8,639 14,955 15,715
Lead produced (tons) 2,124 2,408 4,111 4,354
Zinc produced (tons) 6,736 6,412 12,818 12,191
Average cost per
ounce of silver
produced(2):
Cash operating
costs $ 0.92 $ 1.38 $ 1.27 $ 1.63
Total cash costs(1) $ 1.00 $ 1.45 $ 1.31 $ 1.68
Total production
costs $ 3.66 $ 4.03 $ 4.00 $ 4.24
SAN SEBASTIAN UNIT
Tons of ore processed 38,375 43,638 70,975 76,661
Days of operation 85 84 159 151
Mining cost per ton $ 27.44 $ 37.96 $ 30.26 $ 35.69
Milling cost per ton $ 35.36 $ 30.71 $ 36.52 $ 30.51
Ore grade milled -
Silver (oz./ton) 27.92 22.39 30.00 23.73
Ore grade milled -
Gold (oz./ton) 0.322 0.280 0.353 0.292
Silver produced (oz.) 1,009,542 880,805 2,031,629 1,649,393
Gold produced (oz.) 11,505 10,754 23,059 19,816
Average cost per
ounce of silver
produced (2):
Cash operating
costs $ 0.00 $ 1.07 $ (0.14)$ 1.19
Total cash costs(1) $ 0.20 $ 1.26 $ 0.07 $ 1.38
Total production
costs $ 1.06 $ 2.25 $ 0.87 $ 2.36
LUCKY FRIDAY UNIT
Tons of ore milled 38,381 43,602 80,693 75,190
Days of operation 91 78 181 153
Mining cost per ton $ 48.30 $ 35.80 $ 46.37 $ 39.89
Milling cost per
ton $ 6.62 $ 6.40 $ 6.47 $ 7.07
Ore grade milled -
Silver (oz./ton) 16.68 14.58 16.28 14.34
Silver produced
(oz.) 601,862 594,203 1,237,314 1,006,414
Lead produced (tons) 3,283 2,890 6,923 4,965
Zinc produced (tons) 584 640 1,187 1,176
Average cost per
ounce of silver
produced (2):
Cash operating
costs $ 4.68 $ 4.25 $ 4.57 $ 4.70
Total cash
costs (1) $ 4.68 $ 4.25 $ 4.57 $ 4.70
Total production
costs $ 4.69 $ 4.69 $ 4.58 $ 5.22
(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 EXPENDITURES
(dollars in thousands)
Six Months Ended
June 30, 2003 June 30, 2002
Greens Creek (29.73%(a)) $ 568 $ 1,398
La Camorra 3,459 3,265
San Sebastian 2,673 1,334
Other 104 73
-------------- --------------
Total Capitalized $ 6,804 $ 6,070
============== ==============
(a) Hecla's share
HEDGED POSITIONS
As of June 30, 2003
Sold forward: 78,728 gold ounces at average price of $288
HECLA MINING COMPANY
Reconciliation of Cash Costs per Ounce to Generally Accepted
Accounting Principles (GAAP)
(dollars and ounces in thousands, except per ounce - unaudited)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
GOLD SEGMENT
Total cash costs $ 4,455 $ 6,029 $ 9,240 $ 11,556
Divided by gold ounces
produced 32 46 67 86
-------- -------- -------- ---------
Total cash cost per
ounce produced $ 139 $ 131 $ 138 $ 134
======== ======== ======== =========
Reconciliation to
GAAP (2):
Total cash costs $ 4,455 $ 6,029 $ 9,240 $ 11,556
Treatment & freight
costs (458) (513) (805) (892)
Change in product
inventory (183) (1,750) (842) (1,502)
Reclamation and
other costs 9 106 61 204
-------- -------- -------- ---------
Costs of sales and
other direct
production costs
(GAAP) $ 3,823 $ 3,872 $ 7,654 $ 9,366
======== ======== ======== =========
SILVER SEGMENT
Total cash costs $ 3,850 $ 4,880 $ 7,854 $ 9,832
Divided by silver
ounces produced 2,444 2,334 4,842 4,344
-------- -------- -------- ---------
Total cash cost per
ounce produced $ 1.58 $ 2.09 $ 1.62 $ 2.26
======== ======== ======== =========
Reconciliation to GAAP:
Total cash costs $ 3,850 $ 4,880 $ 7,854 $ 9,832
Treatment & freight
costs (4,602) (4,886) (9,255) (9,289)
By-product credits 11,331 10,297 22,222 18,854
Change in product
inventory 878 217 628 (619)
Reclamation and
other costs 40 302 273 569
-------- -------- -------- ---------
Costs of sales and
other direct
production costs
(GAAP) $ 11,497 $ 10,810 $ 21,722 $ 19,347
======== ======== ======== =========
GREENS CREEK UNIT
(Reflects Hecla's
29.73% share)
Total cash costs $ 833 $ 1,245 $ 2,068 $ 2,829
Divided by silver
ounces produced 833 859 1,573 1,688
-------- -------- -------- ---------
Total cash cost per
ounce produced $ 1.00 $ 1.45 $ 1.31 $ 1.68
======== ======== ======== =========
Reconciliation to GAAP:
Total cash costs $ 833 $ 1,245 $ 2,068 $ 2,829
Treatment & freight
costs (3,079) (3,315) (6,068) (6,409)
By-product credits 6,170 5,930 11,687 11,005
Change in product
inventory 1,081 136 789 (757)
Reclamation and
other costs 41 153 113 300
-------- -------- -------- ---------
Costs of sales and
other direct
production costs
(GAAP) $ 5,046 $ 4,149 $ 8,589 $ 6,968
======== ======== ======== =========
SAN SEBASTIAN UNIT
Total cash costs $ 202 $ 1,110 $ 134 $ 2,270
Divided by silver
ounces produced 1,010 881 2,032 1,649
-------- -------- -------- ---------
Total cash cost per
ounce produced $ 0.20 $ 1.26 $ 0.07 $ 1.38
======== ======== ======== =========
Reconciliation to GAAP:
Total cash costs $ 202 $ 1,110 $ 134 $ 2,270
Treatment & freight
costs (506) (638) (1,016) (1,183)
By-product credits 3,979 3,366 8,036 6,005
Change in product
inventory (243) (20) (225) 20
Reclamation and
other costs (11) 121 141 220
-------- -------- -------- ---------
Costs of sales and
other direct
production costs
(GAAP) $ 3,421 $ 3,939 $ 7,070 $ 7,332
======== ======== ======== =========
LUCKY FRIDAY UNIT
Total cash costs $ 2,815 $ 2,525 $ 5,652 $ 4,733
Divided by silver
ounces produced 602 594 1,237 1,006
-------- -------- -------- ---------
Total cash cost per
ounce produced $ 4.68 $ 4.25 $ 4.57 $ 4.70
======== ======== ======== =========
Reconciliation to GAAP:
Total cash costs $ 2,815 $ 2,525 $ 5,652 $ 4,733
Treatment & freight
costs (1,017) (933) (2,171) (1,697)
By-product credits 1,182 1,001 2,499 1,844
Change in product
inventory 40 101 64 118
Reclamation and
other costs 10 28 19 49
-------- -------- -------- ---------
Costs of sales and
other direct
production costs
(GAAP) $ 3,030 $ 2,722 $ 6,063 $ 5,047
======== ======== ======== =========
(1) Cash costs per ounce of silver or gold represent non-U.S.
Generally Accepted Accounting Principles (GAAP) measurements that
management uses to monitor and evaluate the performance of its
mining operations. We believe cash costs per ounce of silver or
gold provide an indicator of profitability at each location and on
a consolidated total, as well as a meaningful basis for which to
compare other mining companies and other mining operating
properties.
(2) Costs per ounce of gold are based on the gold produced by La
Camorra only.
CONTACT: Hecla Mining Company
Vicki J. Veltkamp, 208/769-4144
http://www.hecla-mining.com
http://www.businesswire.com/cnn/hl.shtml