Hecla Reports Third Quarter 2023 Results
For The Period Ended: September 30, 2023
COEUR D’ALENE, Idaho–(BUSINESS WIRE)–Hecla Mining Company (NYSE:HL) today announced third quarter 2023 operating and financial results.
THIRD QUARTER HIGHLIGHTS
Operational
- Produced 3.5 million ounces of silver and 11.4 million ounces year to date (“YTD”).
- Continued ramping up Keno Hill, producing 0.7 million ounces of silver.
- Casa Berardi began to transition to an open pit only operation, producing 24,259 ounces of gold, with total cost of sales of $56.8 million and an All-in Sustaining Cost (“AISC”) per gold ounce of $1,695.4
- Lucky Friday on track to resume operations at the beginning of 2024.
- Gold production guidance reiterated, with gold cash cost guidance lowered.
- Greens Creek silver production guidance increased, offset by lower anticipated production at Keno Hill; consolidated silver cost guidance affirmed.
Financial
- Sales of $181.9 million, with 38% from silver and 36% from gold.
- Consolidated silver total cost of sales of $90.7 million and cash cost and AISC per silver ounce (each after by-product credits) of $3.31 and $11.39, respectively.3,4
- Cash flow from operations of $10.2 million; $74.6 million YTD; with Greens Creek generating $36.1 million in cash flow from operations for the quarter and $122.7 million YTD.
- Greens Creek generated $28.3 million in free cash flow for the quarter, $101.7 million YTD.2
- Net loss applicable to common stockholders of ($22.6) million or ($0.04) per share and adjusted net loss applicable to common stockholders of ($3.5) million or ($0.01) per share.5
Strategic
- Recognition of Hecla’s innovation with the U.S. patent for the Underhand Closed Bench (UCB) mining method and the 2023 NIOSH Mine Safety and Health Technology Metals Sector Innovation Award.
- Completed the acquisition of ATAC Resources, adding a massive land package of over 700 square miles comprised of the Rackla and Connaught properties in the Yukon.
- All-Injury Frequency Rate of 1.34, 28% lower than the national average.
“Greens Creek reported another strong quarter and has generated over $100 million in free cash flow for the first nine months, our plans for returning Lucky Friday to production in early 2024 are well underway, and we are pleased with the start of the transition to an open pit only operation at Casa Berardi,” said Phillips S. Baker Jr., President and CEO. “While exploration drilling at Keno Hill has yielded encouraging results and we expect to increase our reserves and resources, the production ramp-up has been slowed due to key mine infrastructure projects that are just now being completed. However, more importantly, safety performance at Keno Hill has been below Hecla’s standards, and we are assessing our safety processes and mining practices to set the mine up for long term success.”
Baker continued, “Hecla is already the largest silver producer in the U.S. and will be Canada’s largest when Keno Hill achieves full production. Hecla is the fastest-growing established silver producer, and we expect to produce up to 20 million ounces of silver by 2025. Because silver is a key component in solar power generation, which is the fastest growing source of renewable energy, Hecla will be a direct contributor to the energy transition.”
FINANCIAL OVERVIEW
In the following table and throughout this release, “total cost of sales” is comprised of cost of sales and other direct production costs and depreciation, depletion and amortization.
|
In Thousands unless stated otherwise |
|
3Q-2023 |
|
|
2Q-2023 |
|
|
1Q-2023 |
|
|
4Q-2022 |
|
|
3Q-2022 |
|
|
YTD-2023 |
|
|
YTD-2022 |
|
|||||||
|
FINANCIAL AND PRODUCTION SUMMARY |
|
|||||||||||||||||||||||||||
|
Sales |
|
$ |
181,906 |
|
|
$ |
178,131 |
|
|
$ |
199,500 |
|
|
$ |
194,825 |
|
|
$ |
146,339 |
|
|
$ |
559,537 |
|
|
$ |
524,080 |
|
|
Total cost of sales |
|
$ |
148,429 |
|
|
$ |
140,472 |
|
|
$ |
164,552 |
|
|
$ |
169,807 |
|
|
$ |
137,892 |
|
|
$ |
453,453 |
|
|
$ |
432,941 |
|
|
Gross profit |
|
$ |
33,477 |
|
|
$ |
37,659 |
|
|
$ |
34,948 |
|
|
$ |
25,018 |
|
|
$ |
8,447 |
|
|
$ |
106,084 |
|
|
$ |
91,139 |
|
|
Net loss applicable to common stockholders |
|
$ |
(22,553 |
) |
|
$ |
(15,832 |
) |
|
$ |
(3,311 |
) |
|
$ |
(4,590 |
) |
|
$ |
(23,664 |
) |
|
$ |
(41,696 |
) |
|
$ |
(33,310 |
) |
|
Basic loss per common share (in dollars) |
|
$ |
(0.04 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.06 |
) |
|
Adjusted EBITDA1 |
|
$ |
46,251 |
|
|
$ |
67,740 |
|
|
$ |
61,903 |
|
|
$ |
62,261 |
|
|
$ |
26,555 |
|
|
$ |
175,894 |
|
|
$ |
155,230 |
|
|
Total Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
616,246 |
|
|
$ |
551,841 |
|
|||||
|
Net Debt to Adjusted EBITDA1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.2 |
|
|
|
1.9 |
|
|||||
|
Cash provided by operating activities |
|
$ |
10,235 |
|
|
$ |
23,777 |
|
|
$ |
40,603 |
|
|
$ |
36,120 |
|
|
$ |
(24,322 |
) |
|
$ |
74,615 |
|
|
$ |
53,770 |
|
|
Capital Additions |
|
$ |
(55,354 |
) |
|
$ |
(51,468 |
) |
|
$ |
(54,443 |
) |
|
$ |
(56,140 |
) |
|
$ |
(37,430 |
) |
|
$ |
(161,265 |
) |
|
$ |
(93,237 |
) |
|
Free Cash Flow2 |
|
$ |
(45,119 |
) |
|
$ |
(27,691 |
) |
|
$ |
(13,840 |
) |
|
$ |
(20,020 |
) |
|
$ |
(61,752 |
) |
|
$ |
(86,650 |
) |
|
$ |
(39,467 |
) |
|
Silver ounces produced |
|
|
3,533,704 |
|
|
|
3,832,559 |
|
|
|
4,040,969 |
|
|
|
3,663,433 |
|
|
|
3,549,392 |
|
|
|
11,407,232 |
|
|
|
10,525,917 |
|
|
Silver payable ounces sold |
|
|
3,142,227 |
|
|
|
3,360,694 |
|
|
|
3,604,494 |
|
|
|
3,756,701 |
|
|
|
2,479,724 |
|
|
|
10,107,415 |
|
|
|
8,554,894 |
|
|
Gold ounces produced |
|
|
39,269 |
|
|
|
35,251 |
|
|
|
39,571 |
|
|
|
43,634 |
|
|
|
44,747 |
|
|
|
114,091 |
|
|
|
132,173 |
|
|
Gold payable ounces sold |
|
|
36,792 |
|
|
|
31,961 |
|
|
|
39,619 |
|
|
|
40,097 |
|
|
|
40,443 |
|
|
|
108,372 |
|
|
|
125,721 |
|
|
Cash Costs and AISC, each after by-product credits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Silver cash costs per ounce 3 |
|
$ |
3.31 |
|
|
$ |
3.32 |
|
|
$ |
2.14 |
|
|
$ |
4.79 |
|
|
$ |
3.43 |
|
|
$ |
2.86 |
|
|
$ |
1.11 |
|
|
Silver AISC per ounce 4 |
|
$ |
11.39 |
|
|
$ |
11.63 |
|
|
$ |
8.96 |
|
|
$ |
13.98 |
|
|
$ |
12.93 |
|
|
$ |
10.52 |
|
|
$ |
9.49 |
|
|
Gold cash costs per ounce 3 |
|
$ |
1,475 |
|
|
$ |
1,658 |
|
|
$ |
1,775 |
|
|
$ |
1,696 |
|
|
$ |
1,349 |
|
|
$ |
1,635 |
|
|
$ |
1,409 |
|
|
Gold AISC per ounce 4 |
|
$ |
1,695 |
|
|
$ |
2,147 |
|
|
$ |
2,392 |
|
|
$ |
2,075 |
|
|
$ |
1,669 |
|
|
$ |
2,075 |
|
|
$ |
1,678 |
|
|
Realized Prices |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Silver, $/ounce |
|
$ |
23.71 |
|
|
$ |
23.67 |
|
|
$ |
22.62 |
|
|
$ |
22.03 |
|
|
$ |
18.30 |
|
|
$ |
23.28 |
|
|
$ |
21.25 |
|
|
Gold, $/ounce |
|
$ |
1,908 |
|
|
$ |
1,969 |
|
|
$ |
1,902 |
|
|
$ |
1,757 |
|
|
$ |
1,713 |
|
|
$ |
1,921 |
|
|
$ |
1,817 |
|
|
Lead, $/pound |
|
$ |
1.07 |
|
|
$ |
0.99 |
|
|
$ |
1.02 |
|
|
$ |
1.05 |
|
|
$ |
0.95 |
|
|
$ |
1.02 |
|
|
$ |
0.98 |
|
|
Zinc, $/pound |
|
$ |
1.52 |
|
|
$ |
1.13 |
|
|
$ |
1.39 |
|
|
$ |
1.24 |
|
|
$ |
1.23 |
|
|
$ |
1.34 |
|
|
$ |
1.47 |
|
Sales in the third quarter increased by 2% to $181.9 million from the second quarter of 2023 (“prior quarter”) due to higher realized prices for silver, lead and zinc, and higher gold sales volumes, partially offset by lower realized gold prices and lower sales volumes of silver, lead, and zinc, reflecting the temporary suspension of production at Lucky Friday beginning in August due to a fire in the secondary escapeway and subsequent rehabilitation activities.
Gross profit decreased to $33.5 million, a decrease of 11% over the prior quarter, primarily due to higher depreciation, depletion and amortization at Casa Berardi based on the expectation that underground mining will be completed by mid-2024.
Net loss applicable to common stockholders for the quarter was ($22.6) million, an increase over the prior quarter primarily related to:
- Ramp-up and suspension costs increased by $4.7 million, reflecting the impact of the Lucky Friday suspension, and the ramp-up of Keno Hill, partially offset by Casa Berardi resuming production following a 21-day suspension in June due to the Quebec wildfires.
- Exploration and pre-development expenditures increased by $6.8 million due to increased activity during the summer season.
- Other operating expense of $1.6 million, compared to other operating income of $4.3 million, which included the receipt of $5.9 million from an insurance settlement in the prior quarter.
- Fair value adjustments increased the net loss by $3.8 million due to unrealized losses on our derivative contracts not designated as accounting hedges for $5.2 million, partially offset by unrealized gains on our marketable equity securities portfolio of $1.4 million.
The above items were partly offset by:
- A foreign exchange gain of $4.2 million, compared to a loss of $3.9 million, reflecting the impact of the U.S. dollar appreciation on Canadian dollar denominated monetary assets and liabilities.
- An income and mining tax benefit of $1.5 million compared to an expense of $5.2 million based on taxable losses in Canada.
Consolidated silver total cost of sales in the third quarter decreased by 6% to $90.7 million from the prior quarter, primarily due to lower concentrate tons sold from Lucky Friday. Cash costs and AISC per silver ounce, each after by-product credits, were $3.31 and $11.39, respectively which only include costs of Greens Creek for August and September.3,4 Consolidated cash costs per ounce were unchanged from the prior quarter as Greens Creek cash costs per ounce were higher due to lower gold by-product credits (attributable to lower production and realized prices), which were offset by lower costs at Lucky Friday due to suspension of operations. Consolidated AISC per silver ounce after by-product credits was further impacted by higher planned sustaining capital spending.3,4
Consolidated gold total cost of sales increased by 32% to $57.8 million in the third quarter due to two factors. In the prior quarter, Casa Berardi operations were suspended due to the Quebec wildfires. In this quarter, depreciation, depletion and amortization expense is accelerated, reflecting the anticipation of underground mining being completed in mid-2024. Cash costs and AISC per gold ounce, each after by-product credits, were $1,475 and $1,695, respectively.3,4 The decrease in cash costs per ounce was attributable to higher gold production at Casa Berardi, with AISC also impacted by lower sustaining capital spend.
Adjusted EBITDA for the third quarter decreased to $46.3 million compared to $67.7 million in the prior quarter due to suspension of operations at Lucky Friday and higher exploration and pre-development expenses. The prior quarter was favorably impacted by the monetization of zinc hedges, which realized gross proceeds of $7.6 million.
Cash and cash equivalents at the end of the third quarter were $100.7 million and included $80 million drawn on the revolving credit facility. In the third quarter, the ratio of net debt to Adjusted EBITDA increased over the prior quarter from 2.1 to 2.2. With the ongoing ramp-up at Keno Hill, and Lucky Friday operations expected to be suspended for the remainder of 2023, the Company expects the net debt to Adjusted EBITDA ratio to remain above the Company’s target of 2.0 for the remainder of 2023.1
Cash provided by operating activities was $10.2 million and decreased by $13.5 million over the prior quarter, primarily due to the suspension of production at Lucky Friday.
Capital expenditures, net of finance leases, were $55.4 million in the third quarter, compared to $51.5 million in the prior quarter. Capital spend at Casa Berardi was $16.2 million, primarily for tailings construction activities and mobile equipment purchases for the open pit operations. The increase in Greens Creek’s capital spend was related to the timing of equipment purchases and surface projects, with the increase in Lucky Friday’s capital spend also impacted by the timing of equipment purchases, the service hoist and coarse ore bunker projects, and the rehabilitation and mitigation work related to the #2 shaft. Keno Hill capital spend was $11.5 million and increased over the prior quarter due to increased spend on mine infrastructure projects, mobile equipment purchases, and modifications related to the secondary crusher as the mine continues to ramp-up.
Free cash flow for the quarter was negative $45.1 million, compared to negative $27.7 million in the prior quarter. The decrease in free cash flow was attributable to the Lucky Friday suspension and higher capital spend.2
Forward Sales Contracts for Base Metals and Foreign Currency
The Company uses financially settled forward sales contracts to manage exposures to zinc and lead price changes in forecasted concentrate shipments. On September 30, 2023, the Company had contracts covering approximately 42% of the forecasted payable lead production from 2023 – 2025 at an average price of $0.98 per pound.
The Company also manages Canadian dollar (“CAD”) exposure through forward contracts. On September 30, 2023, the Company had hedged approximately 61% of forecasted Casa Berardi and Keno Hill CAD denominated direct production costs through 2026 at an average CAD/USD rate of 1.36. The Company has also hedged approximately 28% of Casa Berardi and Keno Hill CAD denominated total capital expenditures through 2026 at 1.35.
OPERATIONS OVERVIEW
Greens Creek Mine – Alaska
|
Dollars are in thousands except cost per ton |
|
3Q-2023 |
|
|
2Q-2023 |
|
|
1Q-2023 |
|
|
4Q-2022 |
|
|
3Q-2022 |
|
|
YTD-2023 |
|
|
YTD-2022 |
|
|||||||
|
GREENS CREEK |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Tons of ore processed |
|
|
228,978 |
|
|
|
232,465 |
|
|
|
233,167 |
|
|
|
230,225 |
|
|
|
229,975 |
|
|
|
694,610 |
|
|
|
651,220 |
|
|
Total production cost per ton |
|
$ |
200.30 |
|
|
$ |
194.94 |
|
|
$ |
198.60 |
|
|
$ |
211.29 |
|
|
$ |
185.34 |
|
|
$ |
197.94 |
|
|
$ |
191.58 |
|
|
Ore grade milled – Silver (oz./ton) |
|
|
13.1 |
|
|
|
12.8 |
|
|
|
14.4 |
|
|
|
13.1 |
|
|
|
13.6 |
|
|
|
13.4 |
|
|
|
13.8 |
|
|
Ore grade milled – Gold (oz./ton) |
|
|
0.09 |
|
|
|
0.10 |
|
|
|
0.08 |
|
|
|
0.08 |
|
|
|
0.07 |
|
|
|
0.09 |
|
|
|
0.07 |
|
|
Ore grade milled – Lead (%) |
|
|
2.5 |
|
|
|
2.5 |
|
|
|
2.6 |
|
|
|
2.6 |
|
|
|
2.4 |
|
|
|
2.6 |
|
|
|
2.7 |
|
|
Ore grade milled – Zinc (%) |
|
|
6.5 |
|
|
|
6.5 |
|
|
|
6.0 |
|
|
|
6.7 |
|
|
|
6.3 |
|
|
|
6.3 |
|
|
|
6.7 |
|
|
Silver produced (oz.) |
|
|
2,343,192 |
|
|
|
2,355,674 |
|
|
|
2,772,859 |
|
|
|
2,433,275 |
|
|
|
2,468,280 |
|
|
|
7,471,725 |
|
|
|
7,308,660 |
|
|
Gold produced (oz.) |
|
|
15,010 |
|
|
|
16,351 |
|
|
|
14,884 |
|
|
|
12,989 |
|
|
|
11,412 |
|
|
|
46,245 |
|
|
|
35,227 |
|
|
Lead produced (tons) |
|
|
4,740 |
|
|
|
4,726 |
|
|
|
5,202 |
|
|
|
4,985 |
|
|
|
4,428 |
|
|
|
14,668 |
|
|
|
14,495 |
|
|
Zinc produced (tons) |
|
|
13,224 |
|
|
|
13,255 |
|
|
|
12,482 |
|
|
|
13,842 |
|
|
|
12,580 |
|
|
|
38,961 |
|
|
|
38,470 |
|
|
Sales |
|
$ |
96,459 |
|
|
$ |
95,891 |
|
|
$ |
98,611 |
|
|
$ |
95,374 |
|
|
$ |
60,875 |
|
|
$ |
290,961 |
|
|
$ |
239,688 |
|
|
Total cost of sales |
|
$ |
(60,322 |
) |
|
$ |
(63,054 |
) |
|
$ |
(66,288 |
) |
|
$ |
(70,075 |
) |
|
$ |
(52,502 |
) |
|
$ |
(189,664 |
) |
|
$ |
(162,644 |
) |
|
Gross profit |
|
$ |
36,137 |
|
|
$ |
32,837 |
|
|
$ |
32,323 |
|
|
$ |
25,299 |
|
|
$ |
8,373 |
|
|
$ |
101,297 |
|
|
$ |
77,044 |
|
|
Cash flow from operations |
|
$ |
36,101 |
|
|
$ |
43,302 |
|
|
$ |
43,346 |
|
|
$ |
44,769 |
|
|
$ |
7,749 |
|
|
$ |
122,749 |
|
|
$ |
105,852 |
|
|
Exploration |
|
$ |
4,283 |
|
|
$ |
1,760 |
|
|
$ |
448 |
|
|
$ |
1,050 |
|
|
$ |
3,776 |
|
|
$ |
6,491 |
|
|
$ |
4,870 |
|
|
Capital additions |
|
$ |
(12,060 |
) |
|
$ |
(8,828 |
) |
|
$ |
(6,658 |
) |
|
$ |
(12,150 |
) |
|
$ |
(6,988 |
) |
|
$ |
(27,546 |
) |
|
$ |
(24,748 |
) |
|
Free cash flow 2 |
|
$ |
28,324 |
|
|
$ |
36,234 |
|
|
$ |
37,136 |
|
|
$ |
33,669 |
|
|
$ |
4,537 |
|
|
$ |
101,694 |
|
|
$ |
85,974 |
|
|
Cash cost per ounce, after by-product credits 3 |
|
$ |
3.04 |
|
|
$ |
1.33 |
|
|
$ |
1.16 |
|
|
$ |
4.26 |
|
|
$ |
2.65 |
|
|
$ |
1.81 |
|
|
$ |
(0.49 |
) |
|
AISC per ounce, after by-product credits 4 |
|
$ |
8.18 |
|
|
$ |
5.34 |
|
|
$ |
3.82 |
|
|
$ |
8.61 |
|
|
$ |
7.07 |
|
|
$ |
5.67 |
|
|
$ |
4.02 |
|
Greens Creek produced 2.3 million ounces of silver in the third quarter, same as the prior quarter. Gold production decreased by 8% to 15,010 ounces due to lower grades; zinc and lead production was consistent with the prior quarter.
Sales in the third quarter were $96.5 million, in line with the prior quarter as higher realized prices for lead (realized silver price was unchanged) were offset by lower sales volumes of all metals except zinc. Total cost of sales were $60.3 million, a decrease of 4% over the prior quarter primarily due to lower sales volumes. Cash costs and AISC per silver ounce, each after by-product credits, were $3.04 and $8.18 and increased over the prior quarter due to lower gold by-product credits and slightly higher production costs as higher maintenance and contractor costs were partially offset by lower fuel costs. Increased AISC per silver ounce after by-product credits was attributable to higher sustaining capital spend of $11.3 million ($8.7 million in prior quarter) due to timing of equipment purchases and surface projects.3,4
Cash flow from operations was $36.1 million, a decrease of $7.2 million due to unfavorable working capital changes in the current quarter. Capital spend was $12.1 million during the quarter, an increase of $3.2 million over the prior quarter due to the timing of equipment purchases and seasonal construction projects. Free cash flow for the quarter was $28.3 million, a decrease over the prior quarter due to higher exploration and planned capital spend. Greens Creek has generated $101.7 million in free cash flow for the first nine months of the year.2
The Company is increasing silver production guidance for the mine to 9.8 – 10 million ounces. Cash cost and AISC per ounce (each after by-product credits) guidance for the mine is also increased due to lower than expected zinc and gold production attributable to lower grades due to mine sequencing in the second half of the year. Further details related to guidance are discussed in the Guidance section of the release.
Lucky Friday Mine – Idaho
|
Dollars are in thousands except cost per ton |
|
3Q-2023 |
|
|
2Q-2023 |
|
|
1Q-2023 |
|
|
4Q-2022 |
|
|
3Q-2022 |
|
|
YTD-2023 |
|
|
YTD-2022 |
|
|||||||
|
LUCKY FRIDAY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Tons of ore processed |
|
|
36,619 |
|
|
|
94,043 |
|
|
|
95,303 |
|
|
|
90,935 |
|
|
|
90,749 |
|
|
|
225,965 |
|
|
|
265,971 |
|
|
Total production cost per ton |
|
$ |
191.81 |
|
|
$ |
248.65 |
|
|
$ |
210.72 |
|
|
$ |
232.73 |
|
|
$ |
207.10 |
|
|
$ |
223.44 |
|
|
$ |
220.41 |
|
|
Ore grade milled – Silver (oz./ton) |
|
|
13.6 |
|
|
|
14.3 |
|
|
|
13.8 |
|
|
|
14.0 |
|
|
|
12.5 |
|
|
|
14.0 |
|
|
|
12.7 |
|
|
Ore grade milled – Lead (%) |
|
|
8.6 |
|
|
|
9.1 |
|
|
|
8.8 |
|
|
|
9.1 |
|
|
|
8.5 |
|
|
|
8.9 |
|
|
|
8.5 |
|
|
Ore grade milled – Zinc (%) |
|
|
3.5 |
|
|
|
4.2 |
|
|
|
4.1 |
|
|
|
4.1 |
|
|
|
4.2 |
|
|
|
4.1 |
|
|
|
3.9 |
|
|
Silver produced (oz.) |
|
|
475,414 |
|
|
|
1,286,666 |
|
|
|
1,262,464 |
|
|
|
1,224,199 |
|
|
|
1,074,230 |
|
|
|
3,024,544 |
|
|
|
3,188,565 |
|
|
Lead produced (tons) |
|
|
2,957 |
|
|
|
8,180 |
|
|
|
8,034 |
|
|
|
7,934 |
|
|
|
7,172 |
|
|
|
19,171 |
|
|
|
21,299 |
|
|
Zinc produced (tons) |
|
|
1,159 |
|
|
|
3,338 |
|
|
|
3,313 |
|
|
|
3,335 |
|
|
|
3,279 |
|
|
|
7,810 |
|
|
|
9,101 |
|
|
Sales |
|
$ |
21,409 |
|
|
$ |
42,648 |
|
|
$ |
49,110 |
|
|
$ |
45,434 |
|
|
$ |
28,460 |
|
|
$ |
113,167 |
|
|
$ |
102,380 |
|
|
Total cost of sales |
|
$ |
(14,344 |
) |
|
$ |
(32,190 |
) |
|
$ |
(34,534 |
) |
|
$ |
(32,819 |
) |
|
$ |
(24,166 |
) |
|
$ |
(81,068 |
) |
|
$ |
(83,779 |
) |
|
Gross profit |
|
$ |
7,065 |
|
|
$ |
10,458 |
|
|
$ |
14,576 |
|
|
$ |
12,615 |
|
|
$ |
4,294 |
|
|
$ |
32,099 |
|
|
$ |
18,601 |
|
|
Cash flow from operations |
|
$ |
515 |
|
|
$ |
18,893 |
|
|
$ |
46,132 |
|
|
$ |
(7,437 |
) |
|
$ |
11,624 |
|
|
$ |
65,540 |
|
|
$ |
45,250 |
|
|
Capital additions |
|
$ |
(15,494 |
) |
|
$ |
(16,317 |
) |
|
$ |
(14,707 |
) |
|
$ |
(13,714 |
) |
|
$ |
(16,125 |
) |
|
$ |
(46,518 |
) |
|
$ |
(37,278 |
) |
|
Free cash flow 2 |
|
$ |
(14,979 |
) |
|
$ |
2,576 |
|
|
$ |
31,425 |
|
|
$ |
(21,151 |
) |
|
$ |
(4,501 |
) |
|
$ |
19,022 |
|
|
$ |
7,972 |
|
|
Cash cost per ounce, after by-product credits 3 |
|
$ |
4.74 |
|
|
$ |
6.96 |
|
|
$ |
4.30 |
|
|
$ |
5.82 |
|
|
$ |
5.23 |
|
|
$ |
5.51 |
|
|
$ |
4.77 |
|
|
AISC per ounce, after by-product credits 4 |
|
$ |
10.63 |
|
|
$ |
14.24 |
|
|
$ |
10.69 |
|
|
$ |
12.88 |
|
|
$ |
15.98 |
|
|
$ |
12.21 |
|
|
$ |
12.86 |
|
Lucky Friday produced 0.5 million ounces of silver during the quarter before production was suspended in August. Sales for the quarter were $21.4 million, and the mine generated $0.5 million in cash flow from operations prior to suspension. Costs of $12.0 million were incurred during the remainder of the quarter and are included in ramp-up and suspension costs on the consolidated statement of operations.
Capital expenditures for the quarter were $15.5 million, major projects were the coarse ore bunker, which allows a stockpile of ore to be stored on surface, mobile equipment purchases, the service hoist project, and rehabilitation of the secondary escapeway (#2 shaft). The service hoist and the coarse ore bunker projects are complete.
In August, the Company reported a fire in the secondary escapeway (#2 shaft), which is also used as an exhaust ventilation airway for the mine. The fire was extinguished but damaged the bottom of the shaft. Mitigation plans to bring the mine back into production include developing a new secondary escapeway ramp of 1,600 feet and a 290-foot vertical ladderway to bypass the damaged portion of the secondary escapeway. A vent bypass raise of 850 feet will also be developed to replace the lost ventilation. Capital spend on mitigation plans is expected to be $8-$12 million in the fourth quarter. As of the date of the release, 35% of ramp development and 10% of the escapeway raise was complete. The Company is increasing the capital guidance for the mine to reflect the mitigation plans, details are discussed in the Guidance section below.
Lucky Friday production is suspended for the remainder of 2023 while the new secondary escapeway is completed but the suspension is not expected to materially impact 2024 production. The Company has property and business interruption insurance coverage with an underground sublimit of $50 million.
Casa Berardi – Quebec
|
Dollars are in thousands except cost per ton |
|
3Q-2023 |
|
|
2Q-2023 |
|
|
1Q-2023 |
|
|
4Q-2022 |
|
|
3Q-2022 |
|
|
YTD-2023 |
|
|
YTD-2022 |
|
|||||||
|
CASA BERARDI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Tons of ore processed – underground |
|
|
112,544 |
|
|
|
94,124 |
|
|
|
110,245 |
|
|
|
160,150 |
|
|
|
162,215 |
|
|
|
316,913 |
|
|
|
500,400 |
|
|
Tons of ore processed – open pit |
|
|
231,075 |
|
|
|
224,580 |
|
|
|
318,909 |
|
|
|
250,883 |
|
|
|
227,726 |
|
|
|
774,564 |
|
|
|
677,309 |
|
|
Tons of ore processed – total |
|
|
343,619 |
|
|
|
318,704 |
|
|
|
429,154 |
|
|
|
411,033 |
|
|
|
389,941 |
|
|
|
1,091,477 |
|
|
|
1,177,709 |
|
|
Open pit tons mined – ore and waste |
|
|
3,574,391 |
|
|
|
2,461,196 |
|
|
|
2,136,993 |
|
|
|
2,657,638 |
|
|
|
2,822,906 |
|
|
|
8,172,580 |
|
|
|
6,864,657 |
|
|
Total production cost per ton |
|
$ |
103.75 |
|
|
$ |
97.69 |
|
|
$ |
107.95 |
|
|
$ |
125.75 |
|
|
$ |
114.52 |
|
|
$ |
103.63 |
|
|
$ |
115.15 |
|
|
Ore grade milled – Gold (oz./ton) – underground |
|
|
0.13 |
|
|
|
0.14 |
|
|
|
0.13 |
|
|
|
0.15 |
|
|
|
0.15 |
|
|
|
0.13 |
|
|
|
0.17 |
|
|
Ore grade milled – Gold (oz./ton) – open pit |
|
|
0.06 |
|
|
|
0.04 |
|
|
|
0.05 |
|
|
|
0.05 |
|
|
|
0.06 |
|
|
|
0.05 |
|
|
|
0.06 |
|
|
Ore grade milled – Gold (oz./ton) – combined |
|
|
0.08 |
|
|
|
0.07 |
|
|
|
0.07 |
|
|
|
0.09 |
|
|
|
0.10 |
|
|
|
0.07 |
|
|
|
0.09 |
|
|
Gold produced (oz.) – underground |
|
|
12,416 |
|
|
|
10,226 |
|
|
|
11,788 |
|
|
|
20,365 |
|
|
|
22,181 |
|
|
|
34,430 |
|
|
|
64,421 |
|
|
Gold produced (oz.) – open pit |
|
|
11,843 |
|
|
|
8,675 |
|
|
|
12,898 |
|
|
|
10,344 |
|
|
|
11,154 |
|
|
|
33,416 |
|
|
|
32,460 |
|
|
Gold produced (oz.) – total |
|
|
24,259 |
|
|
|
18,901 |
|
|
|
24,686 |
|
|
|
30,709 |
|
|
|
33,335 |
|
|
|
67,846 |
|
|
|
96,881 |
|
|
Silver produced (oz.) – total |
|
|
5,084 |
|
|
|
5,956 |
|
|
|
5,645 |
|
|
|
5,960 |
|
|
|
6,882 |
|
|
|
16,685 |
|
|
|
22,329 |
|
|
Sales |
|
$ |
46,912 |
|
|
$ |
36,946 |
|
|
$ |
50,998 |
|
|
$ |
53,458 |
|
|
$ |
56,939 |
|
|
$ |
134,856 |
|
|
$ |
181,679 |
|
|
Total cost of sales |
|
$ |
(56,822 |
) |
|
$ |
(42,576 |
) |
|
$ |
(62,998 |
) |
|
$ |
(65,328 |
) |
|
$ |
(59,532 |
) |
|
$ |
(162,396 |
) |
|
$ |
(183,570 |
) |
|
Gross (loss) profit |
|
$ |
(9,910 |
) |
|
$ |
(5,630 |
) |
|
$ |
(12,000 |
) |
|
$ |
(11,870 |
) |
|
$ |
(2,593 |
) |
|
$ |
(27,540 |
) |
|
$ |
(1,891 |
) |
|
Cash flow from operations |
|
$ |
7,877 |
|
|
$ |
(8,148 |
) |
|
$ |
(684 |
) |
|
$ |
10,188 |
|
|
$ |
8,721 |
|
|
$ |
(955 |
) |
|
$ |
24,227 |
|
|
Exploration |
|
$ |
1,482 |
|
|
$ |
1,107 |
|
|
$ |
1,054 |
|
|
$ |
1,637 |
|
|
$ |
2,624 |
|
|
$ |
3,643 |
|
|
$ |
6,600 |
|
|
Capital additions |
|
$ |
(16,225 |
) |
|
$ |
(20,816 |
) |
|
$ |
(17,086 |
) |
|
$ |
(12,995 |
) |
|
$ |
(10,771 |
) |
|
$ |
(54,127 |
) |
|
$ |
(26,672 |
) |
|
Free cash flow 2 |
|
$ |
(6,866 |
) |
|
$ |
(27,857 |
) |
|
$ |
(16,716 |
) |
|
$ |
(1,170 |
) |
|
$ |
574 |
|
|
$ |
(51,439 |
) |
|
$ |
4,155 |
|
|
Cash cost per ounce, after by-product credits 3 |
|
$ |
1,475 |
|
|
$ |
1,658 |
|
|
$ |
1,775 |
|
|
$ |
1,696 |
|
|
$ |
1,349 |
|
|
$ |
1,635 |
|
|
$ |
1,409 |
|
|
AISC per ounce, after by-product credits 4 |
|
$ |
1,695 |
|
|
$ |
2,147 |
|
|
$ |
2,392 |
|
|
$ |
2,075 |
|
|
$ |
1,669 |
|
|
$ |
2,075 |
|
|
$ |
1,678 |
|
Casa Berardi produced 24,259 ounces of gold in the third quarter, an increase of 28% over the prior quarter. The increase was due to the prior quarter being negatively impacted by the wildfire-related road closures. The mill operated at an average of 3,735 tpd during the third quarter compared to 4,600 tpd during the first two months of the prior quarter. The lower throughput in the third quarter is primarily attributable to planned mill maintenance shutdowns. Open pit tons moved during the quarter set a record as the first phase of the in-house equipment fleet was commissioned.
Sales were $46.9 million, a 27% increase over the prior quarter due to higher production. Cost of sales were $56.8 million, 33% higher compared to the prior quarter, attributable to higher production, and an increase in non-cash depreciation, depletion and amortization expense due to amortizing the underground mine assets over a shorter useful life. Cash costs and AISC per gold ounce, each after by-product credits, were $1,475 and $1,695 respectively and decreased over the prior quarter as higher production offset the higher production costs for a full quarter. AISC was further favorably impacted by planned lower sustaining capital spend. 3,4
Cash flow from operations was $7.9 million, an increase of $16.0 million over the prior quarter due to higher sales volumes and lower per unit costs. Capital spend for the quarter was $16.2 million with $5.1 million and $11.
Contacts
Anvita M. Patil
Vice President – Investor Relations and Treasurer
Cheryl Turner
Communications Coordinator
800-HECLA91 (800-432-5291)
Investor Relations
Email: hmc-info@hecla.com
Website: http://www.hecla.co
