HL - Earnings call transcript Q4 2017

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Operator

Good day, ladies and gentlemen, and welcome to the Q4 and 2017 Hecla Mining Company Earnings Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] I would now like to turn the conference over to Mr. Mike Westerlund, Vice President of Investor Relations. yours. is podium the Sir,

Michael Westerlund

Thank you, us XXXX you joining and and Welcome Hecla's fourth everyone for call. end results thank quarter operations for conference operator. and financial year

issued under in Vice reserves and Reform open today's last that Our along issued Securities earnings and the likely our that Senior of CEO; President securities call, which today's we These Form come with XX-K, news results the Phil to Lindsay On Monday Larry presentation Hall, and Senior statements financial on and Senior as included risks morning forward-looking the was Exploration. results those Chief Such news issued under was Slide Canadian in statements. website. could goals exploration risks today to Private President, the constitute the week, as information include explanation and and this in beginning our presentation. news on forward-looking and Radford, and projected Baker, detailed by our have Officer; release Act Vice cause Financial Operations; in shown results on statements at are involves disclaimer law, release President X. management forward-looking from available releases differ Litigation Form forward-looking the are Any release and made the before Vice market Dean projections XX-Q, President, and the team McDonald,

In addition, measurements. non-GAAP financial during call disclose this we may

website could GAAP on presentation the is measurements www.hecla-mining.com. nearest reconciliations in measurements our accompanying these which to You the available find of at

to in we legally are will call which we pass now such that reasonably make the disclose SEC, you our produce. we are extract we the expect reserves, resources, of and cautioned measured, indicated, mineral and with Phil to SEC filings deposits urge our filings. only are our to inferred and consider the allowed terms not in Baker. disclosures as use Investors about or economically to can I that Finally,

Phil Baker

Thanks, Mike, everyone. good morning

you deck of the Hecla most if was at X XX CEO. Slide to have turn the years to you. XXXX as and available might the for my satisfying me years You one

we in third highest XXX our production. history year silver and production our our First, second higher gold posted

cash we silver a had only Second, sheet. slightly history, is us before on add basis three which the XX in to per negative times million cost helping ounce happened Hecla's balance

silver, And The three metals record had our reserves perhaps this of that when importantly, in used that our gold are that you we achievement the produced in highest industry. remarkable and and thirdly of assumptions below in lead I price the recorded among we history. that most reserves the levels spot lowest think and is we consider especially

productivity how to our more for it which improvements to will learn time cost life even we operate even also important. increase throughput And realize how ore find at make low long years. silver, For is do I reserve and $XX.XX, and used we still does, think and that allows growth it Well, operations, extends what mine to and have better. this why lived us value to

All years. lower for flow cash profile That of properties means than make more our risk be operators. our means more can this can other

resource. known the San these Sebastian the progress to extend on our about mines made talk an the polymetallic not that give is to going innovating mines and how but have life now only make is Larry added you already Dean oxide Now, to production of update to improvements to going we've we productivity at

stream currently path future. the with a near We now mine have have do in close to enough polymetallic of this development is on to We sample a bulk later year. the think that production this maybe oxide is

the strike. Friday, at Lucky on there been has Lastly some progress the

Hecla's Steelworkers, to favor but three in United We have will be union If with vote by decide the tentatively for years. ratified agreed period an the then agreement have will the or it arbitrators we for whether to be may agreement, changes March early membership. in three current a arbitration terms by has early the binding offer of of expired imposed by they labor modified XXXX-XXXX third-party which

it not having a happy is about are to opportunity to to reach to resolution. this an We We resort a third-party see have resolved.

the return XXXX outlook. Sebastian have certainty Lucky work. Now we X, And strong to Lucky we'll to Berardi, amend once and the San looking Friday the forward Casa Slide on and on performance continue Creek, will expect their Greens we to hopefully Friday,

XXX,XXX XX be million mine ounces the is about Now, and the scheduling. about with equivalent we X.X being silver progresses XXXX for year production silver XX quarter of see production to for production million first production We increasing the our gold. this ounces gold ounces, just ounces, expect as due to lowest about is and million

as higher Greens ounces, For to fewer we transition primarily San for about life. than more we as And sustaining cost slightly all-in silver, Creek, at estimate to by-product a of for costs due cash because mine primarily at Sebastian. capital longer $X.XX, after plan silver underground we XXXX $XX.XX ounces credits its

We estimate cost $XXX will be by-product year last estimate last the at million. after the credits as cash same XXX per year all-in costs of the sustaining about of comparable capital gold, gold For ounce, around $X,XXX. investment

project with the Remote as At Friday. this allocated also continued guiding the million results. at XX yet XX X expect not to now properties. year, spending We of and largest is about on total number We're to of Miner exploration and the X expect million our Lucky reflecting of the million exploration Vein in targets last this operations wait for fabrication growth point and million R&D over the about being of between increase we year Hecla's invest

me to So with turn let that introduction, over Lindsay. it

Lindsay Hall

million and of contributing shown prices increasing negative after which million Sebastian XXX XXXX. delivered and flows XXXX the in declined of silver We all was Berardi by and at Metal over ounce lead see cash cash silver XX Slide Phil. the strong production. flow year for and cash a Slide a gold Thanks, case XX million. by-product year-over-year. on XXXX our and despite by million you generated cash San X followed X, On to XX was Greens as gold Casa at good can increased in standout performer decreased cost position credits silver, Creek

All of numbers expenditures. these net of capital

of and to for Lucky XX% quarter of about X. of cash draw I not the given through operation costs cash While were consumed XX basically there're strong couple margins Friday sales year. in of year Silver given of $XXX ounce. We had of things to but million or per zero. attention cash to cash margin a operations deliver good that $XX.XX XXX% on the is the fourth you was want ounce, sales per gold most financially The a Slide continued

part overall the provision Firstly, tax as XX%. lowered tax to provision XX for U.S. tax has in as provisions of taxes deferred tax been was the result and before fourth current from term million. the Minimum tax end, year in changes the the for enacted the quarter Tax of was the was positive Canadian well are long asset the reform year corporate Mexico. given income Alternative full implications income us was mining revaluation The U.S. reform The removed the usual rate tax and million arising the XX for from plus and that

contracts base in market X.X mostly to and X-year zinc take XX.X the to out of for locking Secondly, metals than in for rather base hedge hedging XX-year and lead we the unrealized metal million prices and and to revenue our had our losses the million strategy above time lead. book the we prices. healthy the highs what try Remember, not quarter due highs and of our year for are stream rising year-to-year, continue to for zinc is stabilize

balance at to the as ratio EBITDA Turning live of debt our that maintain sheet, we because remained able to within X.X our to ratio year times. leverage last means. same about We're

While EBITDA to reducing net denominator. decreased generated cash Friday, Lucky thereby debt we the flow free still due

our feel have our XXXX, good credit undrawn debt liquidity the position. outstanding about of line come financial XXX including XXX of million in million I so We due while only

summary, talk operations. to the great we excited and for are beyond. our XXXX the and XXXX in to So call very I potential pass now had Larry about a about will

Larry Radford

Thanks, Lindsay.

recently very are hard note, look all we incredible again injury is the of man at mine. we improvement improvements will performance have our chart hours safety. million has the acquired we safety to accident. in in Slide rate the years a XX, XXXX work showing X this proud reached On XX%. Also with This which overall statistic five and frequency reduce without when a time year. Berardi This loss Casa an that from start frankly over a of Let's declined the past is we

a to Creek an of strong producing Slide wanted Creek to also an innovation performance having cash Greens strike is mine silver give after XX. on you by-product seen of as can day. I staff to record Our of our on at cost be silver this per was ounce, contributing tons the $X.XX year XXXX without X Lucky Friday credits of on Greens per the another began had supervisory update some commended operated throughput at ounces initiatives be Slide million since accident. over XX

fans more tablet a about we frequency mines manual in fans with the variable the installed mode. all status see drives on in can still with showing install You to have XX XX of fans, plans XXXX

out system recognizes when men or off. fan area machines equipment leave set XX and fan fan high setting minutes based enter either demand With an When on the miners then speed or the heading on adjust speed the accordingly, ventilation for automatically or the turns type. the of lows

We the the we are about per lower that $XX,XXX stopes save fans year. speed fan average per expect at when by inactive will running an

over, fee innovation switched LHD with in $X arriving quarter. per the if capable all the of second we this fans surface on year. front, savings the operation a a Also million one the second So about is have are of one

better tons of feed XXXX, the day approximately day XXX Casa The Slide mine. acquired tons due record the operated tons X,XXX fourth average XX. XXXX, tons at Moving and better. gold primarily throughput accounted and this more XX, and XXXX per produced quarter getting we pit XXX,XXX Slide since per highest per an shown keeps mine of day XX% in production the of The open X,XXX than mill ounces per Berardi feed. mill than as throughput for onto of which X,XXX In acquisition. is of for greater the was This year the to on just day on is

We X,XXX have run the basis. spot per tons at a mill over day on

but We increase careful of continue watch it in recoveries to ounces. a throughput does at ensure not to to that loss are come further, steady the

loading then truck seen level. surface on the running opens operator We shaft XX XX pocket the have day. Slide then again. cell the shoots to should a goes on shoot for than to XXX and and to commissioned maintenance, our truck be loaded on the first the autonomous this fuel the here Other returns to operate the downs to truck stopping as And truck hours fill

ounces Slide gold of Moving ounces XX,XXX on onto can San credit. in XXXX after cash produced XX, see of cost Sebastian by-product silver and that negative X.X you million at

we to expect Slide be forward, and the in ramped as up to underground material we XX on to Looking off-site production up. quarter, stockpiled production utilities shown ramped are second supplement using the

pit We Vein to open limited second in production also plan quarter. North from the restart the

after of and because year mainly grades. by-product underground of this lower because costs cost mine be from credits in cash expect higher to being We increased

area the in of from two years. an Sebastian past expect In in flow talk free process samples also am XXXX, over $XXX both collect We -- sorry, polymetallic I Hugh moment. Dean San about a cash has the in Zone, to San XXXX, and generated a that million of will

mine, will sulfide making while while I we making cash underground, oxide developed develop oxide We the way cash the sorry, while to cash -- underground from open the am expect oxide who doing pits safely. doing from I Lucky Friday hard expect to underground salaried importantly working the strike working our we commend -- deeper. making it the development women the the have at Lucky possessively very Slide and on and want underground some after XX and most maintaining mining -- the work, and and Friday during been man the the salaried men

which to to well, all May. go would arbitration Looking expect forward at in by goes agreement expect binding which the March I of to the and will and invite subsequent strategy and training we innovative arbitrators ramp extend Remote production edition the the to our features and this read late in as restart start of ratifies union thereafter Engineering fourth is infrastructure up piece the plans shortly the expected the machinery. to of Dean. expect this XXXX. we The Magazine planned we fabrication now January into machine quarter. the will exciting mining incorporate If of rule return the hand is Vein in listeners upgrades. implementation over gold the proceeding would of membership I'll for Miner, The off in the ramp it up Mining include story arrive cover employees,

Dean McDonald

at Thanks, Last keeping combination reached reserves the announced appendix our last and quarter Lucky at price gold XXX we drilling gold following XXX is which with in and X.X ounces, million year. list start intersections Berardi Silver the the at with drill of gold continued Sebastian. expanding Berardi in and we're In San in the good Casa aggressive reserve A surface while reserves gains Monday. reserves increased Creek in and of reserves in a resources. San This assumptions open ounces Larry. of stable replacing high-grade Greens week, confirming and of proposed at in San on reserves you the history an and insights success drill gold from stayed and Hecla XX% Creek total Greens zone levels will the Creek. pits. provided are year lead that into exploration we Sebastian, highest Greens containing steady. defined new reserves, fourth and silver, was XXX,XXX XXX in and Casa Successful programs resources increase issued Sebastian, give getting Friday release,

with grown XXX that the of separate of XX, defined On X,XXX XX commodity million high-grade see also justify over milling, time. the have industry. providing lowest in past past production XXX some cyanide This in reserves circuit means mineralized to see or years, ounce that silver we from years, XX, mineralization to have silver San ounces prices you assumptions ounces As Slide the silver can multiple added At potentially identify in reserve you the over deeper shown acquisition. million XX a the XX the Hecla to Creek as clearly sulfide have we to X,XXX ounces XX, from Greens actually we trends ounce XXX in to replaced Sebastian price are to and structural per million consistently cumulative addition from gold new million XX% only per of can but used extend flotation polymetallic find the resources opportunities circuit. Slide Slide

underground can see in the current new Francine defining reserves and drilling green Middle, in and outlines, You where Vein is the North the Vein the black, Middle new pits yellow under development of new the resources. and surface reserve, ramp ellipsis projection

occurred mineralized lead historic and West recent The underground XXX of some pods substantial Vein. shallower quantities has expansion both are the highlight East High-grade longitudinal continuous section West drilling polymetallic XX base of by zinc, Slide from center Hugh diagram. Zone and Zone of of and precious pattern Hugh the the to a Let's containing successes. extends the copper the metals, mineralization Francine polymetallic or to the shows rapidly as of high-grade of resource and as drilling closer in the defined the development. hatch metal feet

but this areas, continuous open that underground ellipse. XXX, high-grade slightly the on and of of current and as proposed the XXX to XXX Crown West surface success And lenses as arrows X,XXX as noted new, potential shown high-grade West of areas to has the drilling near-surface pit year oxide have the control projective shows yellow -- and chance this extension shows red defined we the Slide and longitudinal Berardi surface multiple defining Slide that section showed layer directions. mineralization of below green plunge zones. below ramp and throughout We a potential. on near the on the of the XX similar projection in pit expect we've life. new Vein of red oxide X,XXX in pillar mine into mine The of longitudinal resources we and down XXX, and expand continue current apparent confirmed longitudinal continue the continuity extended in areas their a to trends, resource workings. identified earlier The drilling defined resource. reserves mine the polymetallic and includes the including is The this XXXX resources. we mineralization. near-surface feet zones Mine the been extend the zone the the XX, Northwest, the There's standalone Francine now pits feet the the recent view define main open expanded the the the potentially of by the the several on significant feet Vein many Casa ellipse. large represented of strike in in XXX oxide planned and by XXX black working expanded at were We're drilling West XX of shows plunge a area XXXX Middle mineralized development, Zone the Additionally, to pillar is exciting high-grade the mineralized surface and again horizontal have Drilling zones, Southwest resources zone high-grade potential down XXX reserves new Slide the XXX, to in drilling resources adding the to Berardi, of continuous evaluate new East mineralization plan West ellipses. mineralization the to drilling to length. also what zone shown mineralized zones in particularly resources Underground below shoots expanded over the XXX polymetallic resources in open to that polymetallic This mineralization, along are is Hugh the but in in had At horizontal parallel drilled Casa out of particularly XX. mineralization the where drilling of will good this we This step to considerable below

So look far we have that mineralization broad promising. intersected of zones

to high-grade Corridor Casa higher the at the to exploration the success have our a on from will in adding have of and definition drilling we the are extensive the In time trends of Creek to Greens part Lower become Southwest mine I'll zones. Fault addition, life Elsewhere surface the Ore at call of which northeast of pass some we prospect lease project plan. mining Slide in resources to and zones that, which the drilling west resumed back South Company, We've break the Heva the shown in explore made the of And the Quebec existing West as in Cadillac and mine mine XX Deep Casa [indiscernible] Phil. along Berardi is At drilling to West, priority continue in with are mineralized XXX and and property. Gallagher we commenced East two have shoots in on the along of mine. the

Phil Baker

Thanks, another hope a generated top from 'XX on records. and categories, a just I record was like we we our XXXX both returns can and commenting be presentation where on started this you that important 'XX in shareholders. what sense lot growth we our is great year and And for think of Dean. a year how near record get of call many XXXX also where the performance set the so did I a in we

I'd that like operator questions. open So, the for to with line

Operator

the open. comes Bridges first line of question John now Our line from from is you. your Morgan. [Operator Sir JP Thank Instructions]

John Bridges

going what and the composite if what admittedly of I forecasting I zero rate a just tax sort some use should going should companies we're for trying build was NOLs. wonder we of so probably to rate, forward? up the just as bigger tax we are rate Mexico have tax rates, mining assume And sort tax forward, rates Canada? wondering U.S.,

Phill Baker

the the now are allow Okay, Lindsay with now tax were but I'll that Alt very that of answer preferences lost tax the act let system specifically, tax us. it alternative Min removal under available that true is minimum to reform

expect the the top Do with would significant taxes rate and we taxes, know your of significant, what we U.S. our only we have will I place that you Mexico be liability and zero is have really that -- Canadian I Canadian -- on head? mean would Lindsay. don't expect operations, be So is that taxes. tax would but really not

Lindsay Hall

mining -- mining, XXXX, And as expense it Mexico John the income with tax on in statement X.X. Mexico for the mining is well and total about income Yes, I'm mining included those the tax. us around the as was income tax around John about tax for for helps run the you XX% Mexico if talking with tax in mining million XX about tax

view about the So total got and of in so 'XX, you expense tax Berardi would run at be Casa XX% your provision. XX of million that the

Phill Baker

that's downturn. a down I mean the San Sebastian,

Lindsay Hall

again Yes, tax in it Canada, forwards million. X million mining the of was and we in because have 'XX up loss where as we'll around is carry in X have deferred XX%, it's -- lot -- Canada Canada in

John Bridges

carry will Canada? forwards for long How those last in

Phill Baker

Pardon me.

John Bridges

How the last Canada? forwards long in carry will for

Phill Baker

another got Not think year I I or so. that long,

John Bridges

And -- standalone scale a great base about sort Mexico finding, of are X-X need to of are you then What quick operation? metals to meters. some sulfide that's hear things reserve narrow the of those In relatively do create you follow-up. just

Phill Baker

area. with something to available existing could are quickly use make the the Well, capacity. ability does into the production move And rather with this look, mills that, there are mills in evaluating that ability because we conceivably really that

to have are into putting do to add? position cross Zone sample. the really anything a as as and in bulk we So, ourselves focused a Hugh on do you that the well cut Larry,

Larry Radford

Yes, bit. just getting I'm cold -- over to me just that -- a add pardon

standalone the of we and do nine looking -- versus a Zone about contemplate really it's We we before about the And life mill amount standalone. the cost haulage of resource years we of are a so have rental need roughly six of years in really really Hugh and at mill. to

Operator

from Co. Levy And of our next & line question comes Seelaus Brett the from

Your line is open. now

Brett Levy

little more M&A mines, your metal? thinking plans are I free producing in like mean more gold options about kind capital in I'm that Just also of talk of you some -- just bit or the you potential And of might of towards or a are performance cash whether a have your any the you Can flow. you you terms about your then it's reserves strong wondering area, looks market? gives good silver in guys what are priorities generating another what priorities? variety or It

Phill Baker

Glad capital respect that where to are we markets Brett. following engaged of to a bonds the do markets, With in doing refinancing our looked existing the at certainly we are, XXXX. earlier in

life banks capital keep market long fundamentally us change certainly and had our right, last done on engaged structure, when lot and mine facility we have opportunity really an decide if very guess we're this an will point a that to that extension year. of we of debt some there's flexibility something. how our We eye revolving with do at that carry ability that to also and our the have, gives I an we see have and to we you're to But the operations

the than in that's the lack and last more really there's of to Frankly, good gold think in happened we shape looking opportunities, respect capital we're just but look very it. from market And a we're ways XX of maybe and so we're of looking over optimize there're silver on just With in a silver the M&A for exploration that's years. gold. focused always opportunities reflection structure the course M&A, at silver to the standpoint,

feel I the I going look are not far jurisdictions and from too we're both So, to you go that would in. to we that suggest at we

we and are that long we're to we had. a exploration cost you this we with that we trying success are to Montanore, like see had can said have so it see the do to prices I cycles the we're low do base M&A where the we resource not always great move you we're with position M&A we'll forward the money the that the capture that try no, that these don't in Creek -- engaged having at prepared in has large we've price do can and view that and we market, quality that growth of asset, are make the bad to that, we Rock So, albeit we've really to that -- of feel that prices and that sort do have investing transaction a we in transactions, a think are is transaction, And and to characteristic if but a look emerge. lived various a but

Operator

And our from line question comes next from H.C. the Ihle of Heiko Wainwright.

is line open. Your now

Heiko Ihle

XXXX, in you're to XXX,XXX sustaining I for at X,XXX was ounces bucks, we a of calling now So, it at believe something costs gold all-in XXX,XXX were X,XXX of in X,XXX XXXX.

more of all-in sort Just cost changes is besides some that we returns down mean other to me think on that going this? sustaining the sites spent in because better some in year-over-year. making I am through the walk of the increase with do size scope, still this and you're I at I quite impressed

Phill Baker

it then the increases add? most and find improving manage throughput. opportunity flexibility you think continue to in to to mines I the continue to the like places I those throughput it the order underground Larry what But to focusing maybe has the to from where really really Look, we both keys of as material, and surface thing it the And more give to go to can efficiently. are -- on important increase is the drive would it the think at the those operations recoveries, things, more

Larry Radford

we all upper know Yes, where see its by able end, of we so, or a we're we now been run doing solution kind and at to mill just to have the start -- solid losses.

shaft both right we mentioned earlier, to down Berardi in the day. And setting where it that we optimize up the has automated contractors through terms So shaft. what getting of are of I this really automated resources we cut Much can more we in-house to going now it bring is with Casa underground. do large the every enough the the as or been to was truck, right there then now didn’t data delving this. mentioned XXX so great little a what's and with I gets bit ore the pit throughput by it shaft, granular, it's more where in open start it's going done the an have Once and as off and automated down the underground grades and are

a So, lot of then more a understand, front reduce days, clawback of And of open some we automation expense. can want the to this owner we versus in contractor by getting wins open our the actually year And we that to without this things cost early one in we but fleet are doing put, costs pit. of next have is analysis. have if done real and analysis is that lot

Heiko Ihle

then our for help just modeling here. And some with

be already that given was assume i.e., low You out settlements just what a goes pricing would be release a assumption remind that’s this of they are bunch XXXX as contract, you -- and base has mean I me beyond? you that in XX guys have and accurate over how it an fairly far to long XXXX the would I metal in numbers. the saw hedged? can XXXX there nothing

Phill Baker

of it of just a right, go is goes is two there -- liquidity others years. That’s there beyond a lack sort because that’s to three far it's --

Heiko Ihle

I at XXXX calendar should point fully So assumed time in XXXX some up? what detail set see at during

Lindsay Hall

see Yes, positions. the XXXX, look we you -- and continue just XXXX 'XX, in will more you will XXXX course to layering more over and of in see

do hedging on we that that streams. in as targets giving expectation And any month, given really revenue that as metal's on we view a going disciplined it's positions. to that pretty amount we given a putting not revenue streams, is could the that week, those way but there of We the those we given where limit in taking reaches have we had it's us day, any price, protecting visibility a program price any a are be the are of a

And so, will continue yes positions. to you put us see in

Operator

next of line Cosmos Our comes Chiu question from from the CIBC.

is line open. now Your

Cosmos Chiu

does to How right that a San how transitional Phil, bit two that go for how the in at of guidance we sort maybe of a terms There's reserves look first a on just understanding the in we terms I'm of of in fit as XXXX year like more looking maybe model bit is should forward where go oxides. it? the here. underground. off are on years Sebastian about asset basis,

Phill Baker

we he -- really looking Look, -- Sebastian Larry model there's The to for is mine good stack number a mode. going news San since is out the time been has to know be started am potential able still I a that that up, restarted has, see you the I this papers and about of is this I can in -- this at am because there's a whole in we're just sulfides the really it, it years. of that thing it

with game, this right, So and put we'll if it sample year does think really our together what give do the this to But can have guidance bulk going is to thing like. this change turns that you is bulk expectation at be samples Larry do to this but the out we able look we'll point? what

Larry Radford

looking we're production we've XXXX, guidance at… given Well, for our so

Dean McDonald

that… and oxides all from coming the It's

Larry Radford

ton at all that's per we're and looking per oxide Yes, about and XX then… so gold, ounce ton underground, X.X and ounces silver 'XX

Phill Baker

modeling, this For it's… polymetallic, first the

Larry Radford

resource silver, online. zinc, I the to it's gram invite the Zone XXX that. lead, to and X.X% do we're roughly X.X% switch we're read I metric imperial can about. our you ballpark from you am Hugh talking X.X% going so but copper, -- here, polymetallic, Yes, that's to

Cosmos Chiu

thinking the at. range ultimately we'll that about the sort would What this think tonnage you when terms right mine of in what should besides -- you of? And be

Larry Radford

be going we're say. still day lot, you tons per don't our in I XXX given mill I see any per should so and day around tons between whether a know moving to XXX

we're now, and change mill units… right to running metric the So roughly XXX it's at [indiscernible] going

Cosmos Chiu

okay. imperial, to Back

Larry Radford

per metric, what it's tons should [indiscernible] we XXX the metric a and in rate. good a run day, it's mill the at No, that sometime XXXX we're into at about that in

Phill Baker

And that's oxides.

Larry Radford

oxides, yes, switch all all that's that It's to and… sulfide here oxides, will and

Phill Baker

just with stay Yes the sulfide.

Larry Radford

while Hugh let the since… Zone, or was about for Hugh so, a metric, in polymetallic Hecla Zone the poly the describe -- Stay bit. known me The little

Phill Baker

Since decade.

Larry Radford

oxides and new polymetallic there're of Vein. we're now. off just very Actually, finds some where it's Decade, right the yes, Middle mining west

at plan and we the the own and oxide as intimated, XXXX, online producing so need market get will. we keep -- the that as oxide And in Phil Zone so we to we six that Zone, we're oxide both with models would are provide Hugh we years we we looking that ideally, something production and going. So this backfilling ideally say drilling. concurrently into ideally, before the time. and up haven't feeds is to same The put that sulfide yet fast of will we pretty keep and the we up of finish five any Hugh or kind probably moving finish our

Dean McDonald

is Dean. this Yes,

longitudinal the the been comment includes shown quick that the the Zone with and on in. some resource reserve have It Middle of that the discoveries polymetallic, resource critical Hugh and mass not the side resource, Hugh a latest Just because include statements, polymetallics or talking the new the it shaded Vein does to the Zone. in we about extensions polymetallics really

modeling We are up now. that

a into the refer quite larger East we and million had Francine and one what X the spectrum we We've so, bit modeled silver And of carries middle, the be anticipate it infill to polymetallics we ounces. now and that. economics that we've as the resource with the at east resource to oxide larger about a on so looking will east out drilled would the drilled that a

So production. that is possibility for oxide future the a

Phill Baker

access done just And really to with too too polymetallic. that history resource too just involved it. we Sebastian and of relative return had And we at taking are when deep much why we had anything just our things plans that’s was this get we with you and we to bit that at viewing it. mill. too risk and look give time were the much said capital where that XXXX, to was haven’t the much and let build capital a it on little to we taking And needed the that a workings long me as because was too to San Hugh Zone it a we identified

of deeper be we've since almost Middle Hugh that top to the workings Vein then is with to So gotten underground happened allows what's the we Zone. the us are the really that off doing

less mill. to to rather much own will can is and and come have capital mills conclusion we now that that in we use we the so there willing have the outlays the that maker area in our than just build So we do that the

have is thing this and economics changed it all then So has improved the expiration dramatically more the finding dramatically of of on that top mineralization.

in just we're part to is investors trying did hadn’t people plans San that's to like change not that other it's the and been and I'm sure Sebastian. so to going years rapidly to very of been So and going alert what change do oxide at our in it its just it

Cosmos Chiu

going it of a guess like I and the is oxides the definitely potentially of in terms good XXXX. in the Phil oxide have is from potential continue good There sulfides to XXXX. for and So we guidance oxide the It's the number is sounds sulfides. here there exploration both to coming

on And that, for more a expect of the where terms so bit should we detail plans in sulfites?

Phill Baker

it's over expect I you do half maybe quarter But I the think the I the not to year say I -- towards keep the and sample. end what because stuff. is of sort it's will goes. guess as in this would just quarter time this the as of -- bulk plans I'll the future we're give expect second said we We updated in to the of probably even would Certainly, is able year that third before

would it on the able So sample our and sooner by to back quarter build and the do to we're expect be than third that do we'll plans. the of so trying but to bulk that we

Cosmos Chiu

you're like and being maybe switching on mentioned Lucky coming then and about little a Phil made And talking Friday timing vote gears here, things progress you well, about at the kind sounds there's and well. bit. you in go It if at of be terms looking March in out then timing? What Friday could of Lucky as restart sort of all arbitration in here May

Phill Baker

quarter It's quarter that a the to maybe and half. better Is Larry? thing restart fair see and a

Larry Radford

Yes, successful QX an as arbitration now. would I expect was right assuming said assumption ramp full we it's have May that's that the in up best earlier, we and

egress upgrade. We shaft And loading upgrade in there're emergency a advantage will of restarts was recur and some There's do probably shaft take that commissioned contractor. some in with there. the pocket any infrastructure, we'll silver electrical XXXX will do to

So of when a it's we work. mine opportunity to restart good that do actually some the

Phill Baker

or Let's will contract then the the then a not -- at path there ahead that either to by ratification ourselves. clearly membership will of do of this but if we the get contract be that should has work. be and Really, they have back old

Cosmos Chiu

just you're simple it that looking And majority a for? Phil, is

Phill Baker

I their know don't rules are. what

Cosmos Chiu

you're part we Greens be guess than on these see the different machines Berardi? now. And the here. more used some putting of of right days? I in assembling for at question be used this maybe And the Vein Remote mucking Creek? one Friday, more or remote it is control that Miner it Casa I eventually Lucky Can Can specifically from machine that point The guess question. last other underground the place at me, this How in time, technology at

Phill Baker

mining a blast. is actually So, machine drilling this a machine replaces, not mucking machine. eliminates, It

technology. It's rock. taking the cuts it boring tunnel So,

Cosmos Chiu

So, a it's TVM?

Phill Baker

isn't it development, the couldn't that's difference development, stope, is in be the is designing Yes, it's is for stope but is the that for do say not what to the cut we're rock, stope. for the to mine This right. actually used

Casa as that this the epithermal could it at other fit. it Larry? places but probably of As an Greens Friday have could that vein application the would has, application probably definitely types conceivably far an application operations and could Creek, at or other at that that not geometry it Lucky either systems there's -- have have some

Larry Radford

have have it's rock conditions Yes, I rock right to in hardness. the mean of terms you

Cosmos Chiu

okay? -- so Hardness,

Larry Radford

worth determine a Mines amenable of rock Friday Colorado is School very two have them whether those test large things really or is down so Lucky sent the Interestingly, abrasion, the quite and are and now. this cutting slabs that to of facility, them Hardness has we cut technology. technology

they long and circle tunnel you work think turn machine. and say of the will will boring how Well, in how the access a perhaps to side you machine this of turned If side if cutting clockwise. let's it’s machine a in those the

-- really first article world, at and in it’s running by way Platinum Mining in Engineering, be great to January's one this this the now. I two. a the machine So, Anglo everybody will Africa invite number South isn’t has look

Cosmos Chiu

going is This replace replace to drill your is to your explosive… this going So, jumbo?

Phill Baker

that. if will see that replace test it We will to

Cosmos Chiu

So could LHDs potentially as your it replace well?

Phill Baker

No, no.

Cosmos Chiu

Is there it? No, a behind conveyer okay.

Phill Baker

to right a LHD. conveyeral outside the goal it's is of it's of the principal name actually to everything discharge worth remotely it It's contemplated that conveyer now as that, behind and mentioning the exercise stope. is run There into implies this

Larry Radford

of the what than trying anything to stress is It's manage safety. drives Lucky the And that more Friday.

there And blast, ability manage makes that there not to better safer. by someone machine so phase the having it. and is have it by cut And to at having then than drill rather

Cosmos Chiu

magazine, article. the I'll read the

I has sent think us. it to Mike

back But other on, come later I'll really if So questions. I sounds any have interesting. it

Phill Baker

have. the the No, of example to the our things to across is are margins it that and we Hecla is. that sort we business, of mine of life of do And we just frankly have an sort able it's because and do trying that that

Operator

comes question Thompson BMO. of line next Ryan our And from from the

now is line open. Your

Ryan Thompson

the two this Cosmos of the and how that asked sort that differences kind we if just between goes talk but of assume to about between, my key already, from think cost we differences contracts, perspective? about key arbitration, should can dispute question the you

Phill Baker

really is that a Well, the schedule work. key there essentially schedule, difference day contracts one things number old had the mine two on differences, puts XXX is and a starting a have point there didn't of the while where key is number the of new year but they to

a days And the available so, maybe the difference whole in there's working. of all, mine number XX% with

the not any improvements see the is to The headings at one new But exotic. allows time all something do to I that but is scheduled. might in not because we're we're have are determine think And but primarily it's aware make allows of make frankly management people that it. you people miners perspective, the use and that so system asking, we're over ability trying not to what new most a the it's The this second and we're we'll cost old system really to and that giving The in. guidance system system determination. where Canada, work from we that mines making in U.S. improvements the senior

Ryan Thompson

to that the will arbitration? ratify go you how union workers the And confident actually decision to are

Phill Baker

they We will decision a won't, as don't we and view understand up to accept they and them it's make. whatever or to we'll that whether have

Ryan Thompson

is one one be rock last of technology, impact cannot kind regardless? implement or south the went there of the agreement, any ability just back done to like the And cutting on on sort if to you technology CBA circling talk old that to the

Phill Baker

we it. No can do

Operator

comes is question next from And Sir, from Very Independent the our now of Tumazos line John open. your line Research. Tumazos John

John Tumazos

or and strategy have day, and permitted, like rebound, settles, and might recognition share do Friday as love of different exploration doing shareholder have selling silver to some I market your get as a does one focus the something such Lucky like [indiscernible] much as market the to gradually you Do expect I buyback everything am strike or I on a a Phil, asset that? others stock to other or to do. releases trigger faster you assets something Creek stock three Rock you're and buying try advances you the am Montanore recognition it a patient frustrated where say

Phill Baker

former. more other look don't out hand, approach the it's of likely shareholders, but the But deliver of I former view then the latter. think evaluating can more value the to second being always John so we we're we so how the as

John Tumazos

Doesn't not of… seem The market in on. several things seems digest that understand going terms you've to everything to the

Phill Baker

quality of $X margin to peers, to have the they calculate comment you fair doesn't we that that, we that $X, with have is the life and to generate. -- ever and our lower technology to that the reserves, our so -- it the and about we I it us $X, that's much attention do of going price we're the pay doing most at reserves have so if think enough and to think a seem really think $X, to market nominated fact marginal ounce the have of start allow relative the I assets

huge seem keep Creek the pay benefit $X attention. and over just that overtime be to at next we a market You is will think will think going years much Greens they I that’s to a fan the it's fan to doesn’t the million shareholders adding. XX-XX a But year

Operator

our And next question Turnbull the from of comes from Trevor Scotiabank. line

now is line open. Your

Trevor Turnbull

or couple is just questions I a keep one I'll touch or this of arbitration arbitration? respect that different last your that’s proposed to mandated One my with try go parties this just and I had on kind curious the outcome ones. something to you other of thing was of the to up, brief. a coming was

Phill Baker

it was that it that's there unfair because this solution potential of no it this that function the realized evolved as labor implementation that is we practice the had a hearing involved was new contracts. money -- we about of that a in made hearing Well,

on and guess they I March on XX March XXth strike. went that did we So

arbitration you know to than resolved. so characterize guess judge one either to other to the come to I a would try the is us some at go and encouraged way the or just because it's And I its having less but its going solution solution least perfect

third-party just seems like that's for pick that it to other. best the everybody the for So way just one to or go

Trevor Turnbull

anyway. would catch up or showing like side to the there belong curious spectrum talking on and attention of new another your or? but development way to silver in more side? your What said opportunities I what just isn’t as concur your anything there it out from the mentioned M&A just seems a kind Are criteria production a gold. discovery in lot open had that stage, though when space? you on the quick I you would eyes You would you It M&A always question type opportunity keep silver forward of pragmatic meet

Phill Baker

Yes, doing spectrum. something have that the if attention are not along are it doesn’t for then And we capable much looking we it's things going that that focus we had have the cost. of long-lime really on. fundamentally, for anything lives general potential are But to

Trevor Turnbull

to with finally, subject to more the sustaining. of one time And I kind changing respect CapEx then am housekeeping question

year? I break just on this the to get think a but you CapEx gave trying We is handle figures, you where bit? can down some going consolidated a are better that

Phill Baker

place the be mine costs the which in gives by there. Page cash the our calculation in press capital it would think of go probably you to sustaining and I XX So sustaining best release guidance all cost of and has

Trevor Turnbull

it also just sustaining CapEx? new breakdown does budgets non from And

Phill Baker

We basically put everything sustaining. in

Trevor Turnbull

of at CapEx, work to to there egress, sense operations. if mentioning that kind of he advantage the headed was out loading you're everything And such about do Friday, then subject with Larry the of pocket, the were back talking Lucky you take arbitration work to that what that stuff some on some electrical would on that of the was any number be? Do

Phill Baker

remember? you Any guess Larry do

Larry Radford

a vague $X that recollection it's just in million. think order It's I

Operator

next Fields of the from Matthew America. from of question Our line Bank comes

Your line now open. is

Matthew Fields

I I there's the Lucky was your guidance. press looking no CapEx that XX at and Friday release Page noticed of in

million let's As for in from of $X to ramping of XXXX? guidance CapEx some Can say up $XX million as $XXX far improvement augmentation to May sort expect million that we your you're December. to

Phill Baker

say million, would I of that under it's Yes, is magnitude you $XX that Larry and I… certainly am could in right but expect order or

Matthew Fields

do we XXXX? back would how at If capital go Friday that much you in the expect spend would we to work Lucky

Larry Radford

Full full would $XX be about year, it's -- so million. year right now

Matthew Fields

XX? right million, XX So it's I'd or, you roughly less somewhere it think do call say than that's

Larry Radford

loading and pocket? just know work. question much go we're the about mean asked way, to the in I shooting you the from hip not exactly the how By upgrade waste back

Matthew Fields

Trevor did.

Larry Radford

am Trevor did. sorry, I

generator, about give total. so, That's under well precise little it's is will me there's million -- get answer. and look we that an -- as $X to installed Let emergency

Matthew Fields

'XX? plus million XX So, X for million

Larry Radford

be inclusive. the XX no -- would -- that That million is all

Phill Baker

go we million work. to $XX if roughly So back

Matthew Fields

in of So, for plus augmentation XX of including total? X regular million

Larry Radford

saying full million. spent if Yes, we're have we we're XX just so million what out we that XX to million proportioning and run is a in year would XX that,

Matthew Fields

those into of talking fall as you're expenditures some So, about that XXXX would well or?

Larry Radford

are spending the pocket actually We're has and the XXXX. even a upgrade So work spend money done. hoist that bit ongoing now, might The fabrication on in loading been now.

the work the the need all So, just we no, mining that anticipation that time for the we've the fabrication in been starts. by complete pushing

Matthew Fields

this lot we of heard I offline. can numbers, so take Okay, a maybe

Larry Radford

think able spend the I just the am going be of be to $XX -- Friday at it but much things, if I'd to in knowing more XXXX. Yes, surprised million we're timing Lucky of surprised in in capital than

the that's number point this I'd at So use.

Matthew Fields

engineering I Creek over Rock a terms switching like in see give go, then and sounds in us the some the on way when can permitting, we studies, of of you construction think in where being I future. feasibility Creek but to the saw close getting and sense position of actual to Okay of a we know enough Rock spent? to update terms could it you dollars maybe kind is are there timing. Montanore, is pole long

Phill Baker

can XXXX Look, it there and or all see the us if and then comes there decision can no of is like next the its course if to the work go If injunction. depends depends is when allowed year, on this forward -- you we few whether decision then injunction the months on are if comes out event. some in there's doing and out not then an see

to getting we guidance so results any given that said see we will so. the not be have [Indiscernible] to do for able in if that. Having move to geared the expenditure authorization waiting up have quickly, in that to manage projected to We be. team given, are the we that, what place just we're are

Operator

from Lucas Pipes line of question And our from Riley. last comes B. the

is Your open. line now

Lucas Pipes

level, up? And then you versus corporate from spectrum geography follow how and back answered. if been look to be also, the evaluation asked Most that of and industry side specific on M&A introducing levels others? evaluation wanted on you more the a this would the would at across asset I is there and you focused if the has my that questions up say maybe

Phill Baker

you So, Lucas, still are online?

Lucas Pipes

I'm here, can me? hear you

Phill Baker

Yes, so question. second the part, repeat second

Lucas Pipes

evaluations, the the public Hecla point? how from then evaluations vantage evaluations of those in corporate evaluations compared I obviously, So of part markets. it there from and to are curious, some the level there or your we question be was have peers And your regard asset in for was second out

Phill Baker

the jurisdictions we jurisdictions, first on the are the M&A, the to So, right. question that first in,

lots of knowledge. have We

We have infrastructure.

to we ability the have. what have We leverage

have Alaska, at the But [indiscernible] you we of long live of I geology [indiscernible] those there Idaho, are for cost beyond jurisdictions sort potential where Secondly, Mexico jurisdictions good those then mean two are, certainly those looking areas. Abitibi, The where low specifically and mines. that, Durango,

the Mexico, in other Nevada other so, places it Yukon And Canada, and Columbia, places includes and British in Ontario.

characteristic. it's off course of lot have successful, companies the been hope most but I of LaRonde, been respect have Eagle to not then go, that taking time lived they've assets. last they the assets the have its a for And that of XX evaluation parts that years. With look, to So, those again that long have we And Agnico another it's we in world occasional that low our clearly out built that worthwhile I which us you of take thing I other market mention there's then companies company, and added that would had school look say had undervalues of the and evaluate. those XX% to of characteristic. believe at cost is attention the the over to the question, if respect

that. does we type the do where right more the our aren't to of view to that Anything or. assets, know methodical of doing we industry want those the you that we are so, to competitors on market lives -- down not And compelling extent With my see that want than do has your into add to when take extent market a lot competitors respect to things set math not put they in and Helco assets, they have do to we to in put time value the a the value us. so forced that from mine the way you they things to think experience to might long get because care don't. the in Lindsay I you enough

Lindsay Hall

think it. I that's No, nailed

Phill Baker

Okay, thanks longer have the free give you very gone Mike if good to a appreciate much. questions, any call. We Well Have day. a we've more much. very or I we interest than typically and do. Thanks feel

Operator

may have day. in today's participating for you and conference. you disconnect. program thank all great gentlemen, today's This concludes Everyone a and Ladies

Hecla Mining (HL) 15 Feb 182017 Q4 Earnings call transcript