Hecla Mining (HL) 15 Feb 232022 Q4 Earnings call transcript

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Hecla Mining Company Fourth Quarter 2022 Earnings Conference Call. [Operator Instructions].

I would now like to turn the conference over to Anvita Patil. ahead. go Please

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

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

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

X happening. Good joining I'm is established that our fastest-growing world's for call. miner, Anvita. There morning, is for surprising the X. are XXX-year-old Slide this silver company. everyone. on a And Hecla Thanks, reasons Thanks

First, been and even Hecla when to activities Since other provided has Hecla's commitment a our founding, metals silver. always silver producer more margin.

an market to at strengthen more our needed because did. saw And improve. think that us further. I'm And remarks. or of close and the market. silver that be sell of silver was to committed our of to will market ups of resource would we because joined I silver's encouraged about end prepared as role survive the metal, it our And energy But the investors in silver talk Hecla going course, what the assets. others When downs position we the I and XXXX, silver can large

of the others base provided when didn't Greens our in reserves stream and The and the flow is mines, the into Friday. foundation came acquisition cash that in invest other increased purchased second reason mine further we and Lucky that the own. for This and our XX% XXXX silver Creek X.Xx including to mines the industry-leading growth by we

third a reason ultimately to with productive a mining underhand Lucky closed method, then in mine or more historic Friday with silver is XX-year-old allows the production. has the it method resulted is transforming investment mining its higher grades new And bench, that UCB, that in this safer, double the

just months fourth X we of And X.X year. reserves X now the are and year Keno's for the next X/X million acquisition, since ounces is higher the reason million excess In Hill. and in Keno growth about this silver produce

are then. at having the since increase than in XXXX reserves chart reserve, last more on Hecla Xx start years. where Looking has the replaced produced the almost the despite at added what ounces the Combining of over XX silver XXX were million ounces million XXX been they left, has with

have bodies we that So grow. X

And Canada. land being today, and jurisdictions, and in we jurisdictions, we reserves on reflect that are the differentiate best analyst between a course has for market the focused To whether our grow reviews clearly the XXXX time, And in production, strategy. and didn't large the best since the prospective positions market with long values the strategy stayed U.S. but in jurisdictions.

ounces. X And we we're million from giving Then of us ounces. per right, XXXX XX the million produced year. increased increase XXXX, about on XX.X chart the at about a about the now, to XX%, average by ounces another production to XX% in having decade we looking silver Now million

least from these long-term a we've million this decade. show we'll or But plan for ounces stay not together put XX only because Keno. we at at that that for Realize more I a X years X expect mines

this how highest position XXXX we to about for achieve had growth. balance require set going to and have 'XX, company. the our production production Russell us Russell? this new more all talk sheet to silver And is capital we're I doesn't records in for margins the going history in and the growth 'XX think even significant XXXX, investment. and

$X.X our past The Thanks, cash of double-digit mines the have about these than on XXXX. seen start the margins, see margins Phil. we XX% Casa the from $XX Slide free significant direct of generated of more years over being flow is of I'll growth we have -- have funded which including realized our to free million of XXXX flow, cash The generation is result X silver we averaged where few X. see production years. billion than expect more the over silver contribution past by Berardi's price to industry-leading

in the acquisition made made of earlier flow in at In year equipment million Alexco Lucky in larger capital decision and XXXX, to we've $XX an we the Keno The the the the million. this free $XX acquisition. $XX mine loan in the Hill about investments mine, deploy after equity and at cash then which projects where million we additional approximately in invested of Friday development

strong We invested $XX while balance sheet. committed this programs also in remaining in We to million XXXX. predevelopment and exploration did a

prices declined XX% from $XXX lower base revenue year-over-year lower the from Revenue million the realized in $XXX generation costs. X On care XX% cash from due while Nevada declined was mines our and lower adjusted $XXX to production flow Despite was free million, our revenue prices, inflation-driven approximately the the gold; from year, XXXX EBITDA XXXX for Slide X, to and lower operations and maintenance. million silver; silver with and due on gold for XXXX XX% metals.

be our Xx. below target of Our net continued leverage ratio to

balance with strong year ended million in We with sheet the a cash. $XXX

in zinc $XX as fourth We also some quarter. declined long-term monetized the hedges approximately million zinc prices for

us strong gives executing flexibility Our plans. our in balance sheet

to now call I'll Lauren. turn the

of per per was acquired million seeing in in guidance. to Thanks, the I time for the of day this tons Greens In X.X during and increased had Greens metal since XXXX, ownership day. Creek we quarter. tons impressive X,XXX Record each on start our rate also full per mine period. fourth ounces Russell. has silver that will from The achieved X,XXX year. mine's day throughput remarkable produced X. Slide another recovery of throughput is tons increased Creek the the Equally X,XXX XX%

Looking will in to the forward, we continue per ramp-up fourth tons production year expect day and quarter. during our X,XXX achieve the

because to to was quarter ASIC quarter third concentrate was treatment the to higher and shipment due third Fourth costs deferred silver we freight from compared quarter and the quarter, higher a fourth the prepare cash mine flow flow in maintenance in started $X.X XXXX. free since winter. for nearly seasonal billion some million generated operations mine activities the The free $XXX cash to conducted and in

silver. $X.XX as guidance XXXX cost target line be Cash per $X to Silver is for all-in at X.X primarily XXXX increased to higher equipment costs we per ounce, purchases $X.XX with to are sustaining day. is lower $X X,XXX X million while tons to to silver expected due production per at million in the ounces development ounce at and

XX to XX. production operational milestones, reported past record year the silver Friday and Moving the in tons Lucky a including processed as Slide highest record years. the mine achieved

the X-year a stability strong further our the also We us relationship contract reflects gives production for and working ratified mine optimize union, growth. the to which continue to with

in million all-time frequency and we mine. production saw and an for incident reduction In company ore production mining feet for crews. milestones was in performance XX% development ounces. is XXXX, X.X safety year of a The at XX% a all UCB increase tons the impressive new the Silver produced rate, method by delivering record

annual quarterly performing records also production. and delivering throughput well, extremely year all-time as well is new Mill ever the largest of zinc as

will in things expected full at of and to Mine for the all-in support ounce. increase related ounces was $X.XX expansion in growth million production has silver X million in with produce perspective, put there production range infill since used previous capital mining the of XXXX a XX% XXXX, X.X year million UCB spend the is in $XX million production in of ore cost drilling to of year Just to per the been which method. $X.XX associated last $XX to production be the Capital to to the method. remaining to sustaining the

significant to peers the than UCB Society sinking decade XXXX today. of coming Innovation the ore the mining well. we're is transformation Engineers more marked the a a Lucky Friday many XXXX began shaft pioneering high-grade of success as of with of our the Murray from the to which this this #X recipient access of method. mine Mining milestones for ago is Award

is I ever this grateful team it ahead the of I effort, of the As leading have the I scores and be more am others over could look to who mine XX-year-old more proud convinced for years. ahead, am very of it, decade I best than that and the contributed not this of

perform of ounces during XX,XXX new to year. XXX,XXX XX. well, very the Casa the continues Mill approximately produced Berardi quarter Turning for records. throughput to and ounces Slide achieving gold

a and more open driven was our per costs, mines of metal proportion However, challenging processes the pressures. because lower all credit. to other satisfy production sustaining to production no gold Casa resulted year more higher inflation underground in of mining high by exceeding than to combined inflationary exposed there grade our for mines is and lower it silver pit material Berardi ounce, mill. and guidance byproduct appreciable is $X,XXX the cost All-in due our than moves ore conditions

in in challenges was cash even breakeven capital these mine with However, the investment, flow. near

reduced mine to pit are sustaining of fewer primarily XXXX, XXX,XXX production reflects ounce, than lower with sustaining XXX,XXX mine gold cutoff expansion per more per XXXX costs and to higher the to production Our inflation, adjustments for is underground ounces gold. to change mine to from tons as associated plan. be This the for due and grades tons facility. capital the $X,XXX $X,XXX guidance tailings of All-in made the the to expected higher gold open

an exposure a and production, Casa on under-explored gives potential the important our Berardi in package break. large us remains Berardi asset and scale, portfolio to on that exploration land Casa gold

& Birmingham Development with Flame silver increased be Hill primary primary silver largest on Keno mill full quarter XX% the at mine to of and grade production of among we tons and in day At XX by Keno Canada. reserves are starting in by world. the track million at and achieved the ounces third ounces XX per deposits year-end. -- in highest per would Moth the ton, XXX the the gold highest Hill,

of infrastructure estimated continue ounces $XX of million cost be more and million Our million ounce. silver the projects. million our year X.X to as X at guidance to equipment for we complete production surface $XX.XX to sustaining all-in for receive mill Capital an $XX spend $XX.XX development, XXXX to per is is and

While production, the getting Keno full of laser focused are we potential our to development into confidence exploration grow. continues in this Hill on and district

XX. Slide to Moving

underexplored X success significant drilling exploration our We of have many targets.

ounces XX potential feet Some ounces per ounces the ton silver over and include highlights over over These and results Hector-Calumet; XXX at from Wigwam, XX X the ton strong in XX exploration district. demonstrate King. feet per XX Coral per program discovery feet ton Silver at the at

the call With this, back to I'll Phil. pass

Thanks, Lauren.

Just do a requirement of to acquisition, Alexco should the at comment [indiscernible] When they continue on because which to had 'XX in Keno. we asks explore, or they if announced 'XX exploration the Alexco to either funding. so

And so acquisition. allowed Lauren grow closed with clearly we production, We're go continued priority the they said, program the the glad continue the into because was forward and first while, that to went mine we our shows Keno that potential we given exploration once then, dramatically. of has ahead consistent this them program. as course, And to that really and it full

Slide to Now our turn if for production you'll XX guidance. X-year

and our between to X.X That million to million silver Friday. this expect XX as Lucky Keno drives in as over and X.X in the 'XX XXXX, million to continue year X We increase with XX% to million much X increase production ounces production million ounces growth.

silver expected by-product in all-in credits. $XX.XX sustained to to consolidated is cost approximately $XX.XX come Our after

year. So we this that's with past consistent where were

of At to million free flow exploration, pay going we're positions in in Casa. and today's invest prices, we that see cash about our invest land dividends, maintain $XXX

material costs. increased Casa plant gold As grade, and by Lauren marginal lowering where noted, mining but the we've lower we've at made underground mine our to our Berardi, some production, cutoff change hard decisions less

year year's be ounces have next and to XXX,XXX about XXX,XXX company. XXX,XXX this gold for for XXX,XXX So And then further ounces ounces production the to a decline Casa. about between we'll will XXX,XXX

per With all-in year costs are $X,XXX to this ounce. expected around sustaining less increase to gold production,

years, make an of net free so that about Casa. had at million one realize Casa, we've the negative we've negative cash that year So we're in flow to had I XX cash past only into $XX free flow. cash going investment other

before to flow lower in this We're production, put ASIC going we going and generating. investing be of mine pits to just Casa into which the time more So the is in surface free a to we're cash is going infrastructure be grade period the the tailings. investing higher

Casa to longer as good time. the economics changed X but economics over better plan over a the economics We've not at years, improve of currently, period

If it's you look operations. company, the split it's about among evenly total $XXX pretty our million, for at capital X the and

to resources. more expect $XX identify Creek in Casa targets Berardi underground at than predevelopment with and also invest the mineralization reserves and the the focus us to expand for higher Greens on We exploration million to Keno Hill. grade on

lastly, we're And $X Keno's on to be million. ramp-up, will anticipate approximately we focused going which cost

the it's remarks, I all reason is to that first been this In with is fossil Slide XX. tipping $X.X amount fuel point. No want So in invested significant time the has on number amount you same before investment And we trillion, The the is eclipsed more. the a our also XXXX and and fuels been leave the fossil end prepared has really this happened. invested ever is renewables. past this is past, number, has this in renewables. this year

And silver represents fastest panels since installed, and for grow. to that appetite going growing ounces solar is of takes X.X silver component million are it for of solar gigawatt every the the renewables,

So XXXX. want safety mention remarkable the performance in had to finally, I we

possible Our the and all-in frequency operational is and this success the lowest rate our employees. only in dedication And made was our X.XX of commitment safety among with history.

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

Instructions]. [Operator

B. the Our Lucas first from Riley of question come Pipes will line Securities. with

you Nick level behalf of speak specifically, of Lucas. fully inflation the on to you're if the into year then is assuming baked at question that production? the higher it cost or is lower cost on any asking either of This a of cadence Can Friday, deflation your and cost is any guidance primary operator. the X the attributable Lucky you, operations to this could be throughout guidance Thank Yes. and Joe

QX at You with are is all to anything favorable more going production. exploration almost in can in it the not about operations year and every Lucky more ad, on then year. that And capital, more to the we're this Friday Lucky Lauren, the going the QX to that's say Hecla to spend add our when change higher weather, respect Friday?

is the with and [indiscernible]. it production higher coming think that I higher the that's grades [indiscernible] driving are

Got it. it. Got

ask Okay. about That's very returns. helpful. wanted And capital I then just to secondly,

target that release you Do around XX% noted for of flow level XXXX? cash XXXX. mind in dividends You in were the in have a

policy, levels We to put we've XXXX, in which just our dividend in had we a place. when There's is it place. been since I have few it adjustments terms first in the think, of 'XX,

agenda to But clearly have other the the at we time. to dividend dividend then a tied not anticipating that in over I'm we near-term. clearly, we to so that And have on pay produce price. the silver will have in the the we changes And relative that's and the the base moment. silver as that's metals. any more ability We not raise dividend But

congrats Well, luck. so the and appreciate far of on . Great. Okay. progress the continue best comments and

comes of ROTH Joseph with line MKM. from the Your next Reagor question

of couple fluctuation? across particular that? kind first like just guess thing, income is I also quarterly closed costs, a in G&A, that ramp-up costs. statement. of elevated there seems there categories, A was It the things. and just costs couple some Or your drove that of operations Was anything on

we'll the it's group we to people that. with I to with somewhat people cost. our an And realize biggest in see saw a costs -- into great increase associated think is acquisition higher add the that costs, brought to of thing the of company. G&A Alexco, We

there into of category. Anything... was that incentive accrued category. into G&A was a our result The of Those the Basically, be meeting falls comp higher incentive comp a drivers. falls other a as thing that number the all targets, will that of is there biggest

operations, just that that's costs there's there And In P&L. in [indiscernible]. G&A, Keno operations, the is made of the an a through one it. costs of et spend fourth our quarter true-up on Ramp-up certainly, the cetera, some closed run Hill that fact noncash then we just money there which up accrual closed ramp-up as you mentioned, we the capital, developing that is

well Okay. Fair to take, production into the delta a average of Hill, -- high-grade above been at I Birmingham's let's if I material the between then even day to or enough. XXX X what's of on quarters or get there's tons your difficulty QX. per the I'm that's say, guide at the start-up some having And the guide getting last , this suggesting stockpiled ballpark. Is over that's Keno to kind don't that compared

there it's have to that the hitting yes, essentially. don't the We're but going plan And where mill we just be material stockpiled, through the mine is Joe, going So that [indiscernible] is way It's grade is. higher anything first. just Is first.

add? And so over rate you the anything will to time decline. Lauren, see

That's the that. explanation, exactly

is Okay. equivalent, is And silver confirm, just that billion to -- X.X silver, not right?

Correct.

amazing Just is silver. we the the exploration more finding [indiscernible] with and This grades it. is -- that of is have

we we've It So be. very thought excited it with we're got in hand. is what would what very,

normalized for X Okay. And up? done year of like mines extra then some Hill expectation what's ramp across with these the with Keno things you're and you're spend doing a the once capital this

million but look magnitude, that a make if I to be $XXX normalized. would Hopefully, the be at sort closer Look, to better $XXX we'll order it get and million, we have say investment. that "Geez, certainly we million would say, return of of we would $XXX things can

of sort So . that range.

come will with Your of from line . next the Brevik question Jeff

had already about about my of been I questions Casa has one Berardi. Hill Keno So answered, one but

open to plan higher how you in sustaining But Because [indiscernible] you , only last year, your to plan? the had this in pit mining changed? mean. that -- I mining have in report, had will XXXX, open has a costs? you what's pit So all-in transition -- technical

year of not we had the unless in plan, year that year a plan but we I a remember, the that don't but sure the or high-grade underground it's material. exactly whether before is that year Yes. more I'm it's after, find

We X in process just the or to able X development are to platforms but ongoing very by hard or you to available years that and encouraged the of have it's drill the don't because of it's an than we have, be front us put get place. more reserves in X exploration underground

with of So more underground. respect just-in-time a process to it's the

part you costs well, that find the any year, to try years understand. so sustaining of I most do all-in you production the other have materials have after increase decrease costs? you the the can higher-grade you because you coming said And cash this in other will initiatives -- that operating your -- not Then do initiatives cost. that. but any Have to are

The pits. initiative to the higher-grade is getting biggest the pits,

So Mine pit. the West significantly than the pits higher grade both are and the pit Principal XXX Pillar Crown

grade with those that will so you that report to the And be come Lauren, that more add? buying we'll that, in see anything increased And production. could technical from pits.

question. that think It's So Phil. which mining transition larger now pit, the I pits that, and ready. are they're the ahead it, into XXX will developed the higher-grade underground we us, of captures a material X and soon We're as timing as

to get That able And for work we to in we've of things order for the the to us permits we that has One permits technical all been need those is of as to done. pits. get be of do the the had things front got work, with that in the deal data that. we've for uncover

in they and highest we those a us of us getting those process so allow operational. remaining than the the that remember, in But which decade pits. once to more become is we're of X have pits pit, of will front the from And Principal grade open permits the

Tumazos line will of Your Research. Tumazos John the question with Independent John next come Very from

especially the all progress, the on Congratulations Yukon. in

Osisko companies to participates is no of Hecla lot all. those aren't that is So a time Silver, have the digest sold looking ounce And million just as market short-term more the companies has which can't money. X% capacity small when or XX acquisitions. my equity preproduction deposits, there's unusual stock. the Mining, question deposit which equity. at manpower the a for in issued X.X down. at It's sold an mine money silver just because as last will beautiful raise week, big languishing And good they million-ounce MAG their and A

your some go to spree could on you engineers, So project build. a a and whenever for buying new board deposits warehouse needed your

One I depends what as it is make with John, employees, you're far capacity Well, guess the acquiring. as it I'd X is on comments.

does inventorying not you're much require that Something much, support.

develop, those dozen Remember, are to silver things we to have that do. have to have have acquisitions a develop. and Things as compete projects, that to already it we dozen relatively So obviously, in have projects just half easy we explore well half we as things need gold general. with plus we another would

need don't So we inventory. our to add to

look But our don't agree them things and said such. would that, to we and try feel into capacity, what consider our accretive Having John, we I potentially the you, with could capabilities to should fold. bring do be to compelled

had that have We Hecla's growth history. with sustainable growth this the have we growth mean -- have. not its is in in that something I what we really its

Instructions]. [Operator

Your question come Baretto with of the line Canaccord. Dalton from will

beat death but to I to sure have I of hate understand make here, want to a just questions. fully I here. I do cash the couple

get them, waiting When be them? So And you Principal get it like there? then to you're the in do you for how expect permits just can pit. you once sounds on soon

answer Lauren, do you question? want the to

Sure.

the we of then -- applications, a needs It's WMC, permitting of next one are that be in strip which Then pre-strip the bit happen. to It's in a and which and to amount it the of permit have for the we're little we Pillar not that And time single will of August. by the process, process of will a in permit already of of some takes a reasonable this sequence. So West balance in pit. and application. year, Mine process course submitting is the Crown over group

in carry resource into time. ore so start we're delivering current point should the mining And system underground that this XXXX. on in , to pit the And us about XXXX, the

here. like long-dated So it sounds reasonably it's

putting these that Phil. one conditions at on set of get would you maybe there make and for you Is a you under which care look you, is permits? maintenance So investments until cash this the

no gone which that do in this the that it need be the position plan, operate. that. continue pretty to we production with have a That's exercise capital modest That a injection to put so costly amount have, would workforce. put and it there's With to to able to We're of of plan to have part we to slows we've and why the down disruptive don't on to a care reason the very maintenance.

There's an incredible elsewhere. and and and amount is care of into of Quebec people of activity there going maintenance in those risk Ontario material a going

Absolutely.

whether That how what's actually the maybe makes last I an to we now. grab some ask going kind Can on then if And Nevada, just approaching update you're investments whether there, sense. making could of it on in X give one. you're

Just anything there? that's going on

Sure.

to was identified. was primary not And was the -- encountered and in anticipated, that that how do then having having with for for and out much we're So how to not influx is the have the reason water, we of plan [indiscernible] Nevada. We're hydrogeology deal acquisition a what figure to have an water we water. to

and with So the to water. able to to until have that happens, be deal permits have we

going in our Nevada. elsewhere also So to And slow exploration until of that we dollars. have opportunities we're happens, lots put

that. doing we're So

until wait Aurora, called that? we're are the season the What's to advancing . having at We

season. The

drilling some some The we've evaluating which had we're the and expiration great done. we've initial I is, We in that at think, do there. done, otherwise, season. we're seen us But Until evaluating results see follow-through. the not so Midas, then and that's June, you'll

going on not Creek. that a push until are plan have we we Midas convinced Fire we're So the good to exploration things for

XXXX. not there see expenditures you're to much So in going

management. hand further over to the time. have We back questions no I'll at this conference

we that management. Okay. the being to you available appreciate on remind you I want just have Well, sometimes call. we with

for to you'd press call, have release. a the the If information find one-on-one that on you'll like

So a thanks much. great very Have day.

conclude today's meeting. We that Ladies joining. thank and you gentlemen, for all will

You may disconnect. now