Company Release - 10/8/2020
COEUR D'ALENE, Idaho--(BUSINESS WIRE)-- Hecla Mining Company (NYSE:HL) today announced production results and its cash position at the end of the third quarter.
• Silver production of 3.5 million ounces and gold production of 41,174 ounces.
• Equivalent production for silver of 9.0 million ounces or gold of 114,998 ounces.1
• Lead production of 9,750 tons; zinc production of 17,997 tons.
• Cash and cash equivalents of approximately $97 million at September 30, 2020.
• Reaffirmed increased annual silver and gold production guidance.
• Planned increase for fourth quarter exploration program.
“Hecla’s strong operating performance was from increasing silver production at Greens Creek and Lucky Friday and managing COVID-19 at all the mines,” said Phillips S. Baker, Jr., President and CEO. “This operating performance combined with higher silver prices allowed us to close the quarter with $97 million of cash and cash equivalents while fully repaying our revolving credit facility. Given our free cash flow generation, we expect to spend about $5 million more in exploration, and based on our realized silver price for the quarter being above $25, we expect the silver-linked dividend to be triggered.”
Performance Comparison and Updated Outlook
Silver (Moz) Gold (Koz)
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Silver and gold equivalent calculation based on average actual prices for each metal in the third quarter as follows: $24.39 for Ag, $1,911 for Au, $0.85 for Pb, and $1.06 for Zn.
At the Greens Creek mine, 2.6 million ounces of silver and 12,838 ounces of gold were produced in the quarter. Higher silver production compared to the third quarter of 2019 was due to slightly higher ore production and grades. The mill operated at an average of 2,340 tons per day (tpd).
Greens Creek’s nine months production was higher than anticipated due to higher silver grades. The fourth quarter assumes planned grades.
At the Lucky Friday mine, 636,389 ounces of silver were produced in the quarter. The mine has continued normal operations during the pandemic, with the ramp-up proceeding as planned. Lucky Friday is expected to increase production in the fourth quarter to full throughput before the end of the year resulting in an estimated annual production of approximately 3 million ounces in 2021.
At the Casa Berardi mine, 26,405 ounces of gold were produced in the quarter, including 6,800 ounces from the East Mine Crown Pillar pit, with the decrease primarily due to lower mill throughput resulting from major planned mill maintenance activities. The mill operated at an average of 3,138 tpd.
Casa Berardi’s nine-month production was lower than anticipated because of the government-mandated shutdown and planned mill maintenance activities, but production in the fourth quarter should increase due to expected high-grade underground production from the East Mine.
At the San Sebastian mine, 0.3 million ounces of silver and 1,931 ounces of gold were produced in the quarter. Mining was completed in the third quarter and milling is expected to be completed in the fourth quarter of 2020. The mill operated at an average of 512 tpd. The Company continues to explore this highly prospective land package and will evaluate further mining based on exploration success.
At the Nevada operations, ore mined during the quarter has been stockpiled for the third-party processing expected in the fourth quarter. Gold production may not be realized until the first quarter of 2021. Mining of non-refractory ore is substantially complete. Mining of refractory ore for the bulk sample test is expected to continue through the remainder of 2020. Production from this test is expected to be between 5 and 10 thousand ounces of gold.
In September, the Company repaid $50 million on its revolving credit facility and has no remaining balance outstanding. During the third quarter, the Company received C$37.5 million (US$27.6 million) of Investissement Quebec’s C$50 million (US$36.8 million) senior unsecured note proceeds. The remaining amount is expected in the fourth quarter.
Third Quarter Ended Nine Months Ended
September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019
PRODUCTION Increase/ (Decrease) Increase/ (Decrease) Silver (oz)
3,541,371 3,251,350 9% 10.190.620 9,193,246 11%
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