Earnings call transcript Q1 2023

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Operator

Good morning. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the Hecla Mining Company First Quarter 2023 Earnings Conference Call. [Operator Instructions]. Anvita Patil, Vice President, Investor Relations and Treasurer.

conference. your begin may You

Anvita Patil

Investor Good morning, for Results for us President you Call. and First Quarter thank of Vice Hecla's Hecla's Operations Anvita all and XXXX Treasurer. I'm joining Patil, Rob, Relations Financial Conference and

that results website. morning, Hecla's along issued financial presentation, Our was available today's are this release news on with

Financial and Roberts, Vice President Chief and On today's Baker, Phil President Senior have Officer. Hecla's Hecla's President Vice Operating Hecla's Officer; Russell call, we and Lawlar, Senior CEO; Lauren Chief and

differ statements Reform risks forward-looking and Securities on team non-GAAP projected filings Reconciliations release release. are by the SEC. forward-looking come statements. under management XX-Q cited the measures found from Any or those and earnings X with and other made the These in Act and today the Slides results the and XX-K related of in news this risks in X our in Private as call could Litigation slides slides the in to involve our and shown cause

that, call pass Phil. the to will With I

Phillips Baker

years Anvita. joining I'm on asset. Tinto's Tier for start in Rio to those in With ago, XXth fastest-growing purchase allowing efforts we And that our X. to Creek. Creek has foundational Hecla's It's morning, a Greens focus that us jurisdictions. producer. our our made Good what's made the Greens established April acquisition Creek silver of going the Slide really to everyone. be we of primarily X marked Greens interest commitment call. of been XXth Thanks, anniversary Thanks

Canada. the in of in are soon Now producer we the and silver largest U.S.,

productive lived, and jurisdictions the a about real employees going which XX% prepared of over positions. mine. The not have produce X million to end of allowing in to last XX Friday innovating will basis success ounces than few has substantial the with flow in our is next has executing growth X just Its This on although go remarks. Hecla than to with it stability Lucky Creek's more to years ounces next than year about And on is more and making this Lucky about years. our And Hecla the shareholders. job the allowed Hecla should value come property continuously Greens and its cost, back phenomenal Creek, from provided million growth Greens And million less of cash over invest in be X growth a share value large more on exploring, I'm production to at real investment by all improving, starts years lower the is longer done But to Keno. is from horizon. per year. Greens creating the a more X X.X our primarily jurisdictions, and that the Friday about Keno last ounces Creek growth production million

project we that foreseeable XXXX, grow to also which then production to be only growing to ounces million is to profile doubled increase be and have growth sustained and future. million been has continue, expect for year, production this our our production XX by will ounces expected XX we we've Not we the about Since and seen about our expect reserves. XXXX,

past right. on value created on most increased over importantly, the the a production XX XXXX has the by years on In a share per and reserve this our growth factor X. reserves to fact, graph of have is from silver basis, XXXX, shown And

that's package acquisition, of continue we of a which Keno. large strategy, more reserve of production announcement is XXX our Our Resources the than average near on in Yukon in silver that's and huge ATAC the equivalent land the with and and to growth this miles square a to share increased execute to core This jurisdictions, brings almost good us has per Xx XXXX. land reserve equivalent acquire since tenet packages due

expect the Berardi, transaction an and continue open -- it amount investment We pit only close the year XXXX, margins starting the of acquisition mine, the combination and April marks XXth to of underground also will to it acquired Casa on which the open of our we're being when over generates. mining operations depend of years will we pit in quarter. This and was a transition that an the long investment this few in now how transition to year the mine. solely and next underground we underground require third

to But reserve few will rationale the grades permitting years. higher ore XX% pit. open This is almost for And current grade same higher a higher bought pit holds. the grade mining pipeline the and are is lead the still this what than we materials Casa operating Berardi in why in

is to than less large exposure significant geology, gold have to great exposure dore We silver. land production package, infrastructure, volatility whose and

-- full very record set turned an gold Lucky in safest quarter extraordinary XX-plus at At production, Creek the just years is achieved our takeaways with the considering cost throughput, Slide narrow from been Lucky was the from silver generation feat achieve has a operating. As guidance breaking achieved the implementing production, we're and flow will free gold some it across time record first company. the cash are: operational silver focus track we've Friday when The to performance production last our and the in strong to quarter record turn quarter. strategy strong I production key Friday, safety we which fact. of strong over our X, mines of been and and we quarterly Greens to that on the details quarter

in about a a development the silver exceeded third ounces. is third in And X.X exceed talk in properties production achieved record just Lauren mill with of to for the time Keno expected this quarter, these to quarters. minutes. ounces. X.X And on the going production last track start-up couple of million million Hill is safety more is that This was mine the achieved has X while the

into has This performance operational performance. translated financial

For the and of And cash more quarters million. our for to leading Lucky combined Greens $XX source Friday than generation X Creek revenue now, its due $XX more was is silver flow consecutive production. and silver now of each, million significantly both

capital production. grow Our mines priority to our is profit allocation investing in

million the quarter, Greens each Keno we in see invested and this relatively Friday. quarters. So Casa will and $XX Creek in Lucky in $XX more million capital the coming

all-in commitment XXXX, program. rate core However, our what because injury important we we safety our safe, National employees frequency keeping most is lowest in all Mining's our our have in is history the and implemented -- to

By carbon XXXX and XXXX on give the and with Scope and X on be webcast, XXrd our way, our at X which the will to in-person UN expect are Meeting report Annual so release I listen grade and high-grade certified were credits. both offset -- sustainability high hope Meeting in. We in our Annual operations, emissions, you'll zero given we our underground Shareholder May net

the And I'll over with to that, Russell to our pass financials. call talk about

Russell Lawlar

on Thanks, Phil. Slide start I'll X.

is silver most This our have of ability generate our of Since cash our flow. margins flow. free million low prices. by mines, generate than free been mines impressive One to which cash at their the in $XXX has mines generated driven characteristics XXXX, silver more even X

realized we in Looking at of which of silver slide, the and quarter, the first left of chart a price. the is $XX.XX had margin the the side on XX%

XX% are companies silver margin the the X has and that between mines past consistent. XX%. Not many have been Over this years,

allows However, a consistently core capital ensure value invest to This maintain into budgets. to mines, cash by our where been this always mines, strategy we same us add cash cash period, mineral million only exploration generation more Berardi flow resources the our Casa extensions $XX at reserve generated flow than flow. conversion healthy life over silver generated hasn't has and been and free has of we reserve. This of

we production with the of free our Last and cash flow invested acquisition the further made Hill Keno operations discussed, into the there. growth subsequent year, of we've double-digit that this the investments result with Phil

to leads profile This where balance me discuss our sheet. and I'll X, quarter first Slide revenue

quarter During fourth saw fourth the was had was quarter. generated the we although our the at were silver of volumes realized second quarter. and Total shipping metals base the more quarter, to the and fourth the This quarter revenues first in from metals. the deferred fourth over margin it shipment to to Greens higher And prices. at as Creek first we million, silver by $XXX Revenues from XX% our from quarter due operations of schedule company's production, lower was our silver third all ounces the contributor followed gold higher sold highest silver had sold concentrate silver relative due in quarter for history. to XX%, increased revenue the highest the the XX% gross where silver

ratio leverage of the at maximum our which last a quarters X Xx. Adjusted of million, EBITDA $XXX is was our maintaining below target X.Xx, for

target cash $XX.X and balance under targeted the period this quarter remain during million at investment in on As cash maintain balance necessary We through $XXX and a steps we on net shares Casa sheet to in sold with cash the with our X.X than program Hill of balance million amounting quarter, Berardi, our leverage adequate million. of will ATM Keno of million $XXX the liquidity. take Xx, million we'll $XX keep to around go target the sheet and to less our and this ended

on like we to to seeing I what I'd Before pass inflation. the Lauren, call briefly discuss are

and support demand key seeing of all While stabilized operations. pressures are and other effects cost The skilled quarter-over-quarter, fuel, and Berardi. Casa ground our inputs remains pronounced labor steel, costs for more we inflationary at labor labor high across are on inflation

discuss with the I'll And will Lauren. detail. that And call to the -- more that, I'll Lauren in that, turn with turn

Lauren Roberts

mine, I'm was day. Thanks, February record robust to start quarter free first reported another in Creek, with throughput that per X,XXX Russell. flow achieved flagship yet operational Slide and pleased cash report we Greens that year generation. the XX. of another mine reported record had the It quarter in fourth on quarter, strong the this tons I'll just our

X.X the expect of will increased and throughput production higher day set mined, production the due We ounces record by produce Silver quarter. a tons better was million recovery. ounces grades to gold mine per and fourth XX,XXX X,XXX

positive model the silver significant quarter. variance experienced We for in first

to we expect costs lower in during higher quarter over and the the because to reiterate quarter more due $X.XX silver silver line decline All-in ounce, production sustaining fuel silver consumption we for fourth guidance. quarter. model, was the hydropower availability grades prices be the forward, our Looking with per a were and

expected generation, and planned, cash since due which the equipment to history were AISC spending to free is in production mine to mine ounce free lower of guidance are cash $X.X adding XXXX strong $XX quarter. start deliveries, which XXXX of of per of XX.X in require flow, achieve the we The another of long remaining ounces throughput $X.XX was The was timing billion Capital silver its per operations $X flow When its and primarily about year. just XXXX. $X.X the million million in silver generated the in on-tack recoveries second to of than the day nearly financial over quarter of mine mine XX%. million per XX% tons the is

Today, improved with recoveries throughput has XX% silver percentage and our XX by incremental increased points. have improvements,

modest results prepared investments This improvement. of the at with All on asset. very silver truly team continuous largest our was supported capital the to world-class delivering this by and congratulate in excellent I XXth mine the achieved want world, is this producer culture of

produced to ounce silver of AISC Turning Lucky per Slide of million in $XX.XX Friday at ounces an first the X.X quarter. XX.

X consecutive X,XXX of fourth X% an April. million record rate target to the exceeding quarter per our rate marked tons the day as production, year This quarter, mine ounces of of the and achieve in X.XX fourth and XXX,XXX fourth frequency safety by with on Throughput a compared is of of end quarter. increased to quarter ore per tons run track the all-in new to the silver

mine was Hoist X we we Capital ore Service are the Coarse the adding achieving $XX.X Ore production anticipate in on focus is projects the the completing critical projects, and Bunker, the Coarse as the fourth at quarter. Service the Ore capacity, The million to mine spending hoisting stockpile multiple will in our the production expected key which at Hoist days. Both for goals. the debottleneck mill to Bunker capacity by our by while decouple

XXXX generation a January cash was the million, Free in December reflecting for sale. of million receipt $XX quarter flow from $X.X concentrate the

decade this $X.XX in X.X are We with million the history. all-in the XXXX job. we per best of million the to ounce. for do an guidance of production forward, ounces at are a And cost that X to be reiterating phenomenal as team continues mine's convinced ever silver cost will we $X.XX more and look than sustaining to The XX-year

about Hill, gearing Moving the track Capital equipment sustain Keno quarter, progress for mine. mill infrastructure to as and with start. Work made third completed. with mobile the to in significant secondary $XX the at and was spend preproduction Slide to million construction start-up mine of At position development underground the of expansion development, projects XX. mine the the remain season quarter on circuit up XX% we purchases. construction for for service full camp crushing is well modifications and X the These the capacity achieve will preparing permitted with us on

X expected the in Initial ore X.X ounces to Flame recommissioning exceed & XXXX. high is Bermingham is ounces to produce million in Because and million up We could feed silver. to anticipate mine grade mill the fourth we expect deposits. silver the of for mine being from the Moth ore, production of of stockpiled quarter, the

Slide quarter in at due fourth was for lower and contractor to XX,XXX all-in cost due underground quarter to tonnage, Casa Production ounce. ounce was XX. lower cost and the $X,XXX approximately consumables Berardi of the sustaining while higher. per to costs. lower costs Turning reduction the to per compared as produced declined tonnage an of gold ounces Production expected grades

team. However, increased throughput. production. completed are investments strongly, and of continued per the and marking record quarterly all-in XXXX ongoing improvement a These result our improvements mill continuous ounce cash for mill cost to perform by sustaining cost efforts in to due the another The we processing lower

cost declined was mine significant were anticipated XX%, several further cutoff which grade compounded grades over underground grade Smaller the XXXX. and pressures a grades the zones underground by These complete quarters. to as depleted. and the plans, will lower in leading stope work preparation XXXX, resulted next are by higher which were changes inflationary Since underground reevaluation pressures, stopes, in of have more demanding

higher-grade we not exploration the exploration of seen has aim remained Underground yet zones. our underground targets, While focused significant success. identifying exploration with have continue on will

X open However, and with pit reserve be the XXXX. to expected the grades X operation addition Higher beginning operations mine full an FXXX the years. pit from with the in production operation. open of EMCP XXXX followed mine underground The the in combination pit by higher the is underground is surface underground beginning the XX% FXXX permitting in pit current to grade grades inventory, decline in in pit a of a transition became than ore and in to pipeline and with to

we during operation, in capital Phil significant of fully substantial stripping. and mine and Casa exclusive the $XXX period package $XXX transition As Casa mentioned, of to Berardi fleet large million land this of a in the infrastructure, to break. a reserve investments surface need be on to has which the Berardi potential a mine range and exploration expect million will

our go us investment that in in we the this Berardi key concentrate Casa gives market. As through and our portfolio period of gold remains diversification from discovery, exposure mine

back I Phil. to will now call the pass

Phillips Baker

as cost and production our reiterating are XX. guidance shown we for Slide And Lauren. on Thanks, the year,

with grow, innovate value our undeveloped copper on located X is having best and to in more silver. beyond million some low-cost the production world us the which Montana silver to jurisdictions. are XXX our million XXXX tons the the structure properties third Tier allows U.S. sustainable and Our create foundation of their Hecla the X.X is And in in embedded continue that deposit and with based silver is of copper growth long-term that mines This of largest reserve our long with shareholders. ounces for lives is growth, than

don't And I many that means. suspect know me H.R.X Slide XX. what you that brings to of

be into too do, you American you might politics. If

the and group. Association, I years, was States U.S. United X the that's of Chairman lobbying mining industries National For Mining

never legislation, passed. passed. congresses their the of whether tells controlled the the important which had I H.R.X it significance of learned thing, X reform, So which H.R.X The the first control, the last necessarily Congress, their passed Democrats new bill Congress. Republicans was And not, was as you tax and voting House rights it was of Congress. priority or X the H.R. what is The the which XXXth but by

XXXX, that, that might was that success the of sort You that of recall Congress. was primary in

energy of pages. of national H.R.X? it documents the to It the for need thought much for security. I of XXX metals review. EIS H.R.X for and The can move are There's that elements to of Exactly U.S. process. you H.R.X transition on substantial today. the Well, And and year sponsor permitting I project ago current to Congress, prepare What investors permitting decision first, call, permitting. attitudes important NEPA limit the from exceeds significant the reforms towards so with is the mining to lead reform. very allows These told X far faster. NEPA the where harm. mining environmental EIS are agency the are establishes would the be were we changing XXXth NEPA some and appeals this recognition in on reform very, a we limited imminent for XXX-day all a remand the requires

you And the has a enacting to pillar were negotiations that the the changed, has as far bill how Republicans happening of last show attitude night.

is star So I as other in to soon H.R.X among the that positively And gets States importantly, No, attitude makes it's few as is I by in the next likely policymakers will United in do But jurisdictions. it evidenced signed permitting years. think reform the contrast changing Biden? further more that and don't. it pass

exploration. too barriers in mention. Mexico, to their creates of world, and to the new mining In the mining just There silver many largest with law producer are

option Canada and in willing jurisdictions, Mexico, that in our of While strategy long-term convinced am the is our Hecla and invest shareholders. growing is to the including States I for Hecla other best United primarily

because dedication across congratulate to Hecla execution that environment, innovation of It's thank and that their all Hecla safety, And company employees are and finally, all our is the the want sites. we today. to I

Rob, to with the that, like open And I'd to questions. call

Operator

comes Heiko the of Ihle from H.C. Wainwright Company. your And [Operator Instructions]. line first from question &

Heiko Ihle

of decreased got million. costs You $X.X G&A

You the Can year for line in attribute 'XX. higher this trend us for fourth you to maybe G&A? the incentive of quarter of the rest quarter-by-quarter compensation

Phillips Baker

Yes. Off because that Russell I'm will the pass not on top of my I head, sure. to

Russell Lawlar

G&A would quarter we we the on consistent accrue last fourth came year would to compensation. last be was based that, having of What to performance of we end relatively as quarter-by-quarter. expect year, incentive the I in saw

you why So that's saw spike the then.

also department. our the Alexco folks brought corporate from some acquisition We into on

staffing bit saw that. So from in the we more a G&A

And go so little folks you saw are the fourth but those a quarter staff. up still bit, on

would the G&A what to I So year. be it roughly expect throughout is the

Heiko Ihle

it. Got at... And we're what

Phillips Baker

it it also depends which as performance. go more result see Heiko, comp performance, a that. have then I good and on do, If of we you'll we'll hope have we And incentive up

Heiko Ihle

there's you incentive comp. let's there in had future very in Or Creek make a $X.X there throughput that the the undertook particular is anything So there site Were Well, hope Greens just plan little any us billion at help efficiencies right maybe undergoing happen? that bit? to quarter. good now?

Phillips Baker

it making and are focused of X,XXX how mine. a more This improve an done We looking just It's insight. incremental the you improvements. a we tons. had it producing so We're a has can have forward We maybe X,XXX is some we effort really excellent mill more will job But the day, effort. Lauren, day I at incremental a Well, acquired were the significantly tons towards when that by at is Creek focused manage -- to at headed very saying more Greens tons tons. tons turn We believing more very looking operation. had improvements.

Lauren Roberts

industrial question, tons today this on you where the with absolutely. progression day. are we understanding X,XXX linear said, that's the what a about concepts, significant X,XXX we operated, how then back, And we're were and we a trials. achieve capital the a for investment we by through and which from challenge tested a series we just Heiko. of the mill developed of of to of a thank step at sort some mill year, tons as wisdom the willing done. day quarter-by-quarter to mill. Phil and And conventional We're Yes, in Really, the no And interesting could looked end to our pace took be doing just

improving beneficial. that of same is and to we're that time doing are what the increase team's we recovery, grinding able the just remarkable, And try more really. is this to and, to And the to the with this utilize we find at eyes look quite circuit at fresh throughput. we And horsepower are something and in very it's instance, testament a things which new, willingness been

Heiko Ihle

then Yes. a And just one. quick

somewhat in for some amount to of say preferred talked even. Is that longer or the the shares your You source rather ATM under funds. is is and I your meaningful it way mean I your well? cheap a intermediate in But firm fair about funding to is are fair future? way that it this to as They raise easy preferred term like say do ATMs. the it and to some this

Phillips Baker

No.

can't Our that's preferred the that way I silver price, is cash my a not certainly silver cash And of flow, at free just these with $XX will, prices. in flow we it generating it with sort frankly, higher, -- price pretty hope of generate lot but Heiko. estimation, go free nice

You the said use that, strength we're of get we and -- having But but have we'll sheet. borrow less, choice, more we either a maintain the the or below frankly, ATM. -- it's spend balance $XX,

Heiko Ihle

with been And successful in past. very that you've the

Operator

from next Siperco Michael the question of from RBC Capital comes Your Markets. line

Michael Siperco

Great.

one, quarters Friday. First Lucky Greens and from great Creek

transition So bit the and I'm not let expand you you've you've ask you a over? sure the of Can a about -- that's expand on? but me this maybe, possible, what how what Understanding tell what is cost high period of couple ask your exactly, vision there can once years? and the course, provided. Casa like said of could if about mine range Berardi. investment production on to look what guidance contingent or us what And the you this bit could maybe the is, over be could of next transition And low and and

Phillips Baker

of West fleet mine will equipment allows Pillar pits. the and a to require Crown us pits Sure. mining Mine the Principal The transition period that

thing to facility. to disposal that tailings doing the sort And that unique we're the is mining the XXX allow be of pit or storage

-- And when pit that going we we're other mining is get to so for those so it accept pits. to still to the but we're and going to try to of -- through ready to working tailings that try this, accelerate the we're

indicated we've thinking what once is next So make of although operating, will open very to we're $XXX high be the hopes and of things sure. pit. to now, we surface for have order in the million this out. transition, the the transition but of that continue that -- underground on then you'll still Principal. couple know have that over to then because capital made we success Crown will the from and Where years infrastructure need are equipment, and where they'll those million at underground, will, no that magnitude come $XXX we for not Mine see be have costs lower you'll the we and higher-grade be pit exploration substantially explore, the the West production Pillar I'm the But point, they you than absolutely focus longer I on just do will

the substantial you towards free our the of cash these the end you'll and pits see latter -- So technical look at functioning. flow fully as are mine generation is at what report,

to add that? to anything Lauren,

Lauren Roberts

of intend operation operate throughputs mill we to the over And the open you've steadily at the -- several fully long-term to the years. say and full last just at in we the seen that been the investments mill. we've pits permitted to utilize mill recoveries concept with is and increased the we've that I the operating have and the the as can the then deliver ore made limit best would mill

Phillips Baker

to mention improve maybe studies the we're we're still the doing to that recovery, flotation. And on that as ways studying the

Lauren Roberts

Yes.

work quarters circuit So say mill. coming the see recovery. a continue we'll over we evaluate our a the been to some the preliminary add to long-range And a Berardi. relatively something to work doing it as And we've on view for we potential for investment, modest increase I'll the is is in that of through Casa significant plan that flotation

Michael Siperco

Okay.

And so...

Phillips Baker

one experienced Things thought have fundamentally make we've activity. in just of the we exception from that inflationary changed the me let Michael. So comment, the other with what pressure not

Michael Siperco

Right. Right. No understood.

want So necessarily the other just I maybe if this to rather as keep you And that on follow continue the right am want operations than plug fair I to that in it more am period. saying I way In as your time pull you and you more open on don't transition today a up. that say? understanding words, measured options you to underground Is could a in underground shorter in something understanding explore. drastic to right immediate

Phillips Baker

at the where through continuing direction. willing best term. to at We ways course something certainly long the we've can the we're of out do all Yes, the We're forward. to the willing Friday, Lucky say of mine look, over to we the look have margins -- Whether the We -- like of -- to evaluating for quickly that action are something we either what were we go can that just this take underground, what's or generate done optionality. it's we we're have we still we the so which at point, today. we We're should the this in it pre-judged that see recognize We're direction still able i.e., that that. years We making, at had, Casa haven't working that way any to a not and We're pre-judged -- cover benefits investments Lucky Berardi. we at the investment in to negative reaping we of But go. make we're had that flow. cash same number haven't Friday to of now it's prepared like this need that. thing has

Michael Siperco

of next year, way? where or Is conviction either you year it's if there into have in time, think more a end point you'll

Phillips Baker

is I be. will what there tell sure able I'm Yes, to know you we're don't do. going or to that would when be

Michael Siperco

Okay.

there? if on Okay. could, package land color opportunity ATAC. your about enough. the I in talk Could know a preliminary do yet, maybe differently? What give Switching the but deal more as No, I see here? fair What a transaction, you little hasn't you years. the what over be plans a well-known can will way the property might to bit closed gears, do obviously, you you

Phillips Baker

plan into faster is interested short-term Frankly, this has we once do the we faster a put full than happened always happened this company, what -- to while anticipated. it we it. in were had than we the had assessment Look, acquired this,

big You that. to and had so the by we reacted suggestion gold,

start and any of years. than identifiable is, allows to So really We're have been other pressure almost -- long, good us the quickly. over to doing we we that money evaluation not obviously, spend to The has that seeing have amount to but news XXXX. we're need be -- immediate what a a we that deliberate on take us to in don't money coming advancing do the it actions don't to it. until going don't advance going complete We spent wait determining

Michael Siperco

Okay.

like you and were in fair act the you neighborhood, opportunistically. of you're motivated That's to sort property, the a assessment it? So of

Phillips Baker

that to XX we be look, it Exactly. or we Keno, the to within with to mean, I of couldn't property pass of was up pick thought and already it resources something up. been in have so this that the kilometers able size identified, have

Michael Siperco

and quickly, I'll on. it then Very pass it. Got

around you sort keeping using the Or you in and Just into -- credit that the following the broadly, the more up rather the on of I balance than dipping really guess, the the answered question, was the ATM million you can focus cash question facility? can priority at -- $XXX sheet? the but about of the on if the quarter. level was say really use Was ATM

Phillips Baker

Yes, that's right.

Operator

of Securities. comes B. Riley the Pipes from Lucas question line next Your from

Lucas Pipes

an slightly question have and direction. Casa I miner. another take excellent a I a Is Berardi, want strategic? have the for on asset reputation being different You underground to

portfolio? if, wondered in I the the is with mine, less important surface to your asset a maybe So transition

Phillips Baker

huge different if we is flow of Thanks, producer, cash that, a my strategic silver. is It time because asset. has the the concentrates. volatility less that the mentioned it things well. in periods, cost second a the look, as Realize very than of processing at dore Yes, Lucas. than production. largest to I is our been, are It served asset largest. very does. the concentrate swings not us has gold has It generator Gold from perspective, subject It

have to need we this. So we think

we'll you it future, guess, down line think can go very have term? important the foreseeable for necessarily you have I -- enough you business, in you and asset a But the long maybe silver in do don't. it's to I Now, us. the grow

you high an it's is have think asset exposure to. that to I the exploration that want would potential not And not so

So have view we to through, I it we expect work its what its we which end that as in of than reserves. longer something be of just will much life, sort through

Lucas Pipes

I wondered this throughput, And in you helpful. could very silver year. there then in bottlenecking to Friday, for you later That's mean the have color. operation total switching for the of And what the terms Lucky total ahead? Thank that projects this years production

Phillips Baker

Sure.

i.e., infrastructure, least at end than ton working run rate something and I'm you the kick of we're the a year, have underground Theoretically, Lauren with be at is year, say the in to more going XXX,XXX day. going tons So place, me. hoisting infrastructure to the X,XXX that a that the can at capacity. that's tonnes do we to

continue time, mining the objective day. at improve we to that. but than we'll we'll maybe, as Lauren? our to and more optimize moment. be than over tons I'm That's X,XXX to method, X,XXX a objective The do to not the able be more do that is tons, hopeful to able new get So

Lauren Roberts

incredibly doing day... really with this the job I what has there. No, Lucky optimistic XXX,XXX and towards done team The don't we're a advancing us disagree about Phil. of remarkable ton I'm a Friday

Phillips Baker

year. A

Lauren Roberts

the method. those of mining will are hoisting the that one mining support have a significant that is there Sorry, mining the the method do. to us system. allow to a happen it's lot And due new rate year other objective. measure of the But And of pieces to in innovation to

of the the in on team at without closing throughput target all our intend tools moment, to is we have. the So that them

And I'll potentially place, have better. from so a another can of probably would in conversation bit that limitation are at see a like the I'm is expect there. hit Phil, with once and go we Eventually on that do what the where tools mill point, optimistic we Phil, And, we'll doing. I capable will

Lucas Pipes

And on... it. Got

Phillips Baker

mill relative so basis, on Lucas, Those, And with. concerned to I'm not limitations. deal are about a easier

Lucas Pipes

at how time the Phil, what the mill bottlenecks the capacities when current comes? of mill? may you the you us address can remind And

Phillips Baker

I don't know.

capacity the I lot producing. a less than we're was think actually

Lauren Roberts

we XXX,XXX until maximum it's plant. to step let's What year, the capacity. get think time, see hit was long modest where And -- they're to about And mirror. -- there. the reached have what this there I the this capacity we throughput do. But the go be point, nameplate investments the will at we'll in then capacity our but do, rearview of and a as from one Yes. push there grinding we is -- mean Phil will throughput the we'll said, we'll relatively limit have those will let's grading at we -- that

Lucas Pipes

what And H.R.X, grinding U.S.? to X it would think mine a Excellent. pass? of be time have mean would you on net the get effect permitting terms I in Phil, now. XX around to do or in think years so if you speaking figures total H.R. were the What seen permitted forward, do of average

Phillips Baker

it guess to drafted. I have that do I loop suggest . system I haven't this even sort into of is passing is would you . locked what judicial considered permitting judicial that that as actually a really unlock a that But does And you

message I'm environment is trying few same improved So And probably a -- for on faster of significantly that's the be path it there's mining. really a is path on be is give I more the that certain. investors and only will to would think countries that U.S. other the

Lucas Pipes

now. engineering my Phil But will who I degree talkers luck. very and much best you the I of appreciate to team right are children recommend for continued that

Operator

from Research. the Very Independent of next line Your John comes from Tumazos question

John Tumazos

have idle cycles, freeze-thaw a cetera. keeping kept a background that they us et Keno progress. it give time. little of are now while? the long They underground must all Could such the and a the of and you've from you Congratulations of good How had in having was some it shape. good for It on for mill possession equipment dry lot of kept the a shape

Phillips Baker

and operating if they a a as a we per a capacity XXX that remember since relatively it don't of of modifications, have started nothing yes consistent might it, they actually different months, we was would the but at period or its it's did have recall -- it number month just owned that, it that short at In was some complete John, it X is, you time. operated that but on of So, was functioning. it the operate meantime, change, for mill try ability a I year made design a improve basis things tons improve I to because that. and really full really that to never done day. that characterize It's be never potential, maintained as ago operates

good job. a done they've So

properly, made to us investments, that modest there these see over you'll want we the make made have the just coming functioning testing about were Lauren I it. good been feel pretty sure and We to months are Lauren? it Anything modifications and recently. you add, and I

Lauren Roberts

the in I would order. say, Alexco with in good really the guys pleased plant. we condition diligence, terms of were good Even of of the job and mill the we during did John, saw it mothballing a keeping working what

on that's operating improvements what So bring you and a we're doing. the throughput reliability, things recovery. that a to and They're exactly expect, are Phil to focused is XXX-year-old company about improving incremental talking would mill,

in we're relatively So -- order, was and all good but facility some The modest. fine-tuning. doing

John Tumazos

one? realizable you explain $X.X one. statement, cash adjustment flow reference I another that In can of inventory Could ask is million there the a value. to net

Phillips Baker

Yes. Russell?

Russell Lawlar

cost the just the quarter. mining gold first was in of couple That of costs the Berardi, months Casa above at of were the

we And to quarters. a -- that realizable inventory during took so net adjustment those just you

Phillips Baker

Is the well. is Greens that Creek one the other in as

Russell Lawlar

No.

Phillips Baker

Okay.

Russell Lawlar

The also we up came so which have small not at Greens a and mining it's in that issue back adjustment there, Creek. at prices been have mostly in mostly Nevada, March, did in and Berardi, in nothing but There's would and potentially No, stockpiling it's March. Casa February. January,

John Tumazos

And more. understand definition. flow the if to cash I'm one could free I ask trying

As million look the cash the at cash XX million. balances in to I appeared company statement, $X the USD flow first fell where consume quarter,

maybe ignore You cash I to in it. add that's to you was than flow income shareholders million. your distributed only spending, to million get million million, million, to how issued get to million taxes different back by million. and was stock I'm figure $XX $XX If expense $XX $XX capital I trying $XX $X is provision consumed, the $X to all million or the which out $XX free $XX million interest want for

flow. So free trying I'm of to cash just definition figure out the

Phillips Baker

then a also So a consolidated us of on John, we're shows doing statement doing got -- the flow cash cash we've calculation we're a -- And free basis. mine. by flow

of X So of themselves, all the there's free the at statement $XX cash G&A, the of then flow those all you mines, when Greens company, on you flow Creek Lucky look generated Friday, When cash of expenditures into go the there's that by at cash million. and other operating look flows. the

that's we're a what capital well. our we're what property cash say each number. subtracting we expenditures when at so from And doing flow And company, is free is as what that as doing

Russell, anything that's So to taking and not go. as as other we're far we adjustments. making any add... We're --

Russell Lawlar

generate That's in or investment or... corporation at utilize correct. Casa the of at What for flow we're for that's amount exploration trying investment Greens Friday or this to Keno to delineate capital Lucky there is expense cash Creek, available that Berardi Hill

Phillips Baker

G&A.

Lauren Roberts

exactly. Yes,

corporation amount whichever generate the but flow those utilize back So would way to that choose. of mines into for invest it and -- cash

John Tumazos

the the at And the definition different is mines than statements. financial

Phillips Baker

same. the it's No,

John Tumazos

was the activities whole company. million for $XX.X Operating

Russell Lawlar

say to that the included. calculation. consolidated side it's an It's same difference would add at actually the life just back the do exploration of cetera, the the expense I that's expenses et exploration mines the mine only. meant expand only versus the otherwise, we because the is is But mine, expense

Operator

from of Joseph And from your next comes MKM. Reagor Roth line question the

Joseph Reagor

some asked on following of what kind just guess about. I John of So

therefore, Given bringing to it that way million a reduce cash the finding flow, interest year to consideration debt, any corporate maybe negative. but to $XX the there are remove and down free Is mines expense? a is the or generating zero in

Phillips Baker

#X, when would going the look mines; #X, we capital answer debt explore; assets our and is, #X, to reduction. be allocation: we're to short probably company; invest to the mean at we're we the are adding going the in #X I

starts reduction And the things debt BB-. upgraded silver from rating see the the to into that of plus, by we to $XX then the of enter to us I prices Joe, mention -- just the one extent, is you think should So agencies B+ picture. one you --

have. we would than that what And opportunity hope So debt. currently when we have we will refinance do, lower the have would we a coupon we to that

term, debt So improved access the debt. that's to of think don't U.S. seeing equity in another we nor want to the long want We going use do and bank as that interest that environment permitting likely way given the market. want develop really that to have and properties, we reducing that plan to more the long-term think to Montana the expense. that's do we we want markets, do do to we're We we to don't -- to do bond want we're

We would bond. long-term prefer do to the

that that we So stay it's in market. important

guys get So market. it want to better ratings a Anything is want we ultimately, a you -- add lower bond getting priority we to Russell do Anvita But that that? that so coupon. in to is be the or

Russell Lawlar

use add compelling investment et the Keno reduction debt other and are as in it to in the Berardi, things now. exploration, in that Casa things would relates I investing thing but capital. investment only And of allocation, be in the the that cetera, we're conversation that Hill has most is of Just is it to right capital it

than some debt we then we amounts some As at we right strategy of cash in mines. market that, it's we then would we see business. to allocation the now, look But do something where -- dislodgement could do do if in or would certainly our of that. investment we see our see look significant better so the we now, But -- capital is on

Joseph Reagor

that? what is that, as NPV? not due what be majority the question, debt it the acquisitions, growth? you be at And the you was really What's it decisions? going to on? not that Is important would it are X of then the look and metric When is, to making guys of second have -- consider to to Kind production which you to guys thing it expansions, the guys ROI? Is you for et the of Is those me next refinance you most into cetera, do kind follow-ups is is Okay. led guys look focused XXXX. metrics

Phillips Baker

start question. with me let Well, that

we've size period has done And are geology what of property opportunity that a of it's focused it XX substantial at to to things a But of to And see time. It's in think is Anything miles. that the focus track drives lost buy the falls jurisdiction. It's can something assets have case looking have I've of the prefer in That's category. over of ability we Keno ATAC, to for first be with the sort us on really really so built of the in be what you square compelling long question. the the and that of already And when want operate infrastructure got -- that's right a we're acquire. part As else I history. that what developed. We thing -- of will prospects ATAC, we're that would that in. that to we there's that it's time on. the sort with

Russell Lawlar

we -- we're debt it, to with The do do And debt first my at and as on refinance? our question then be, to when of and we market credit when when when the the do are a would paying continuing to compelling we we the the coupon will it we're for it And What can that. the answer lower than do part continuing would and Phil that had ratings to credit we're that to there's increase had with eye so market. week, that to do go to rating do look we have work to of and sense we increase us the ahead a reason makes so earlier, to last it mentioned go got doing now, our now.

Phillips Baker

we in investors. have contact stay with And, got with Joe, We've just so debt we meetings investors market. like equity do debt the

Operator

RBC And have Siperco line the of from Michael a question Markets. Capital follow-up we from

Michael Siperco

Hecla Mining (HL) 10 May 232023 Q1 Earnings call transcript