Nevada operations under review
Hecla Mining Company (NYSE:HL)
(Hecla or the Company) today announced first quarter financial and
operating results.
HIGHLIGHTS
-
Sales of $152.6 million.
-
Cash provided by operating activities of $20 million.
-
Net loss applicable to common stockholders of $25.7 million, or $0.05
per basic share.
-
Adjusted net loss applicable to common stockholders of $18.5 million,
or $0.04 per basic share.1
-
Cost of sales and other direct production costs and depreciation,
depletion and amortization ("cost of sales") of $149.2 million.
-
Gross profit of $3.4 million and adjusted EBITDA of $33.4 million. Net
debt/adjusted EBITDA (last 12 months) of 2.8x.2,3
-
Silver cash cost, after by-product credits, of $2.26 per ounce.4
-
All in sustaining cost (AISC), after by-product credits, of $9.34 per
silver ounce.5
-
Cash and cash equivalents and short-term investments of $11.8 million.
-
Maintain annual capital and exploration spending estimates on a
Company-wide basis.
-
Suspending Nevada production and cost estimates pending results of
comprehensive review.
“Because of Greens Creek’s exceptional performance, Hecla’s first
quarter was largely as expected, financially.” said Phillips S. Baker,
Jr., Hecla’s President and CEO. “Greens Creek exceeded expectations for
both gold and silver production due to higher grades and recoveries.
However, Casa Berardi and our Nevada operations both produced less cash
flow than expected.”
“Casa Berardi’s gold production was lower in part due to lower grades,
which were expected, and also due to the lower mill throughput resulting
from some temporary issues in the mill that have now been addressed, and
we expect results to improve over the rest of the year,” Mr. Baker
continued. “While Nevada operations had better development advance
rates, the operating metrics including cost, grade and negative cash
flow, were unacceptable. We are reviewing our Nevada operations to
determine the best path forward and expect the results of this review in
the second quarter. In the meantime, we are suspending our annual Nevada
estimates for production and cost. We are maintaining our annual
estimates for capital and exploration spending to maintain our liquidity
and balance sheet.”
FINANCIAL OVERVIEW
|
|
|
First Quarter Ended
|
|
HIGHLIGHTS
|
|
March 31, 2019
|
|
March 31, 2018
|
|
FINANCIAL DATA
|
|
|
|
|
|
Sales (000)
|
|
$
|
152,617
|
|
|
$
|
139,709
|
|
Gross profit (000)
|
|
$
|
3,444
|
|
|
$
|
38,786
|
|
(Loss) income applicable to common stockholders (000)
|
|
$
|
(25,671
|
)
|
|
$
|
8,102
|
|
Basic and diluted (loss) income per common share
|
|
$
|
(0.05
|
)
|
|
$
|
0.02
|
|
Net (loss) income (000)
|
|
$
|
(25,533
|
)
|
|
$
|
8,240
|
|
Cash provided by operating activities (000)
|
|
$
|
20,030
|
|
|
$
|
16,383
|
|
|
|
|
|
|
|
|
|
Net loss for the first quarter of $25.5 million was primarily impacted
by losses from operations in Nevada of $13.8 million, due to higher
costs, as well as lower grades and recoveries, than anticipated. In
addition, gross profit was lower by $15.4 million at Casa Berardi as a
result of 11,000 less gold ounces sold, as compared to the first quarter
2018; about half was due to planned lower grades, and the balance due to
the mill maintenance activities.
Operating cash flow of $20.0 million increased 22% over the first
quarter of 2018, principally due to the timing of working capital
changes, offset by lower gross profit. Adjusted EBITDA of $33.4 million
decreased 40% over the first quarter of 2018, mainly due to lower
margins at Casa Berardi and negative margins at our Nevada operations.2
Capital expenditures totaled $36.4 million for the first quarter of 2019
compared to $20.0 million in the prior year period, with the increase
mainly due to the addition of the Nevada operations, as well as
increased expenditures at San Sebastian of $1.5 million and Lucky Friday
of $0.7 million, partly offset by decreased expenditures at Greens Creek
of $4.2 million and Casa Berardi of $3.4 million. Expenditures at Nevada
operations, Casa Berardi, Greens Creek, San Sebastian, and Lucky Friday
were $21.8 million, $5.7 million, $5.3 million, $1.9 million, and $1.7
million, respectively.
Metals Prices
The average realized silver price in the first quarter of 2019 was
$15.70 per ounce, 7% lower than the $16.84 price realized in the first
quarter of 2018. Realized gold, lead and zinc prices decreased 2%, 22%,
and 13%, respectively.
OPERATIONS OVERVIEW
The following table provides the production summary on a consolidated
basis for the quarters ended March 31, 2019 and 2018:
|
|
|
|
|
First Quarter Ended
|
|
|
|
|
|
March 31, 2019
|
|
March 31, 2018
|
|
PRODUCTION SUMMARY
|
|
|
|
Silver -
|
|
Ounces produced
|
|
2,923,131
|
|
2,534,095
|
|
|
|
Payable ounces sold
|
|
2,898,083
|
|
2,091,464
|
|
Gold -
|
|
Ounces produced
|
|
60,021
|
|
57,808
|
|
|
|
Payable ounces sold
|
|
60,936
|
|
54,839
|
|
Lead -
|
|
Tons produced
|
|
5,784
|
|
5,627
|
|
|
|
Payable tons sold
|
|
4,848
|
|
3,868
|
|
Zinc -
|
|
Tons produced
|
|
13,944
|
|
15,211
|
|
|
|
Payable tons sold
|
|
9,533
|
|
10,104
|
|
|
|
|
|
|
|
|
The following table provides a summary of the production, cost of sales,
cash cost, after by-product credits, per silver or gold ounce, and AISC,
after by-product credits, per silver or gold ounce, for the quarters
ended March 31, 2019 and 2018.
|
First Quarter Ended March 31, 2019
|
|
|
|
|
|
Greens Creek
|
|
Lucky
Friday
|
|
San Sebastian
|
|
Casa Berardi
|
|
Nevada Operations
|
|
|
Silver
|
|
Gold
|
|
Silver
|
|
Gold
|
|
Silver
|
|
Silver
|
|
Gold
|
|
Gold
|
|
Silver
|
|
Gold
|
|
Silver
|
|
Production (ounces)
|
|
2,923,131
|
|
|
60,021
|
|
|
2,232,747
|
|
|
14,328
|
|
|
173,627
|
|
|
441,079
|
|
|
3,530
|
|
|
|
31,799
|
|
|
8,240
|
|
|
10,364
|
|
67,438
|
|
Increase/(decrease)
|
|
15
|
%
|
|
4
|
%
|
|
17
|
%
|
|
9
|
%
|
|
74
|
%
|
|
(14
|
)%
|
|
(22
|
)%
|
|
|
(21
|
)%
|
|
(7
|
)%
|
|
N/A
|
|
N/A
|
|
Cost of sales and other direct production costs and depreciation,
depletion and amortization (000)
|
|
$
|
68,645
|
|
|
$
|
80,528
|
|
|
$
|
54,113
|
|
|
—
|
|
|
$
|
2,181
|
|
|
$
|
12,351
|
|
|
—
|
|
$
|
49,081
|
|
|
—
|
|
|
$
|
31,447
|
|
—
|
|
Increase/(decrease)
|
|
33
|
%
|
|
64
|
%
|
|
29
|
%
|
|
N/A
|
|
|
(47
|
)%
|
|
114
|
%
|
|
N/A
|
|
|
—
|
%
|
|
N/A
|
|
|
N/A
|
|
N/A
|
|
Cash costs, after by-product credits, per silver or gold ounce 4,
6
|
|
$
|
2.26
|
|
|
$
|
1,277
|
|
|
$
|
0.49
|
|
|
—
|
|
|
|
—
|
|
|
$
|
11.23
|
|
|
—
|
|
$
|
1,113
|
|
|
—
|
|
|
$
|
1,782
|
|
—
|
|
Increase/(decrease)
|
|
167
|
%
|
|
54
|
%
|
|
110
|
%
|
|
N/A
|
|
|
N/A
|
|
|
300
|
%
|
|
N/A
|
|
|
35
|
%
|
|
N/A
|
|
|
N/A
|
|
N/A
|
|
AISC, after by-product credits per silver or gold ounce5
|
|
$
|
9.34
|
|
|
$
|
1,760
|
|
|
$
|
3.24
|
|
|
—
|
|
|
—
|
|
|
$
|
16.55
|
|
|
—
|
|
$
|
1,338
|
|
|
—
|
|
|
$
|
3,056
|
|
—
|
|
Increase/(decrease)
|
|
65
|
%
|
|
62
|
%
|
|
449
|
%
|
|
N/A
|
|
|
N/A
|
|
|
98
|
%
|
|
N/A
|
|
|
23
|
%
|
|
N/A
|
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Greens Creek Mine - Alaska
At the Greens Creek mine, 2.2 million ounces of silver and 14,328 ounces
of gold were produced, compared to 1.9 million ounces and 13,118 ounces,
respectively, in the first quarter of 2018. The increase was the result
of higher silver and gold grades and recoveries, partially offset by
reduced ore throughput. The mill operated at an average of 2,298 tons
per day (tpd) in the first quarter compared to 2,349 the first quarter
of 2018.
The cost of sales for the first quarter was $54.1 million, and the cash
cost, after by-product credits, per silver ounce, was $0.49, compared to
$41.9 million and $(4.99), respectively, for the first quarter of 2018.4
The AISC, after by-product credits, was $3.24 per silver ounce compared
to $0.59 in the first quarter of 2018.5 The per ounce silver
costs were higher primarily due to lower by-product metals prices and
production as well as higher onsite power generation costs, partially
offset by higher silver production.
Casa Berardi Mine - Quebec
At the Casa Berardi mine, 31,799 ounces of gold were produced, including
6,535 ounces from the East Mine Crown Pillar (EMCP) pit, compared to
40,177 ounces in the first quarter of 2018. The decrease was expected
due to lower grades and to lower mill throughput and recovery as a
result of adjustments to mill components to accommodate a higher
throughput and the requirement for a new carbon in leach (CIL)
drivetrain, which is being installed in early May. The shortfall in
production in the first quarter is expected to be made up over the
remainder of the year. The mill operated at an average of 3,664 tpd in
the first quarter, a decrease of 5% compared to the first quarter of
2018.
The cost of sales was $49.1 million and the cash cost, after by-product
credits, per gold ounce was $1,113, compared to $49.2 million and $827,
respectively, in the first quarter of 2018.4,6 The increase
in cash cost, after by-product credits, per gold ounce is mainly due to
lower gold production. The lower production, partially offset by lower
capital spending, resulted in higher AISC, after by-product credits, of
$1,338 per gold ounce compared to $1,086 in the first quarter of 2018.5
San Sebastian Mine - Mexico
At the San Sebastian mine, 441,079 ounces of silver and 3,530 ounces of
gold were produced in the first quarter, compared to 512,192 silver
ounces and 4,513 gold ounces in the prior year period. The decreases
were due to lower grades, as expected, upon transitioning to increased
throughput coming from underground mine material, versus higher-grade
open pit. The mill operated at an average of 494 tpd in the first
quarter, a 29% increase over the first quarter of 2018.
The cost of sales was $12.4 million for the first quarter and the cash
cost, after by-product credits, was $11.23 per silver ounce, compared to
$5.8 million and $2.81, respectively, in the first quarter of 2018.4
The cash cost, after by-product credits, increased due to lower silver
production and lower by-product gold production. The AISC, after
by-product credits, was $16.55 per silver ounce compared to $8.37 in the
first quarter of 2018, principally due to the same factors along with
higher capital spending, partially offset by lower exploration costs.5
A review of the sulfide ore continues, including a bulk sample to test
the capabilities of the third-party plant and the suitability of
long-hole stoping for the ore body, with results expected by the fourth
quarter of 2019.
Nevada Operations - Nevada
For the Nevada operations, 10,364 ounces of gold and 67,438 ounces of
silver were produced. Advance rate increased 27% from the fourth quarter
of 2018 but milled tons declined 30%. Capital investment increased from
the fourth quarter by $4 million to $21.8 million. Of that amount, $15.8
million was for development at Fire Creek and Hollister, including $4.2
million for the Hatter Graben decline.
The Company is demobilizing the mining contractor, mining some
previously-developed remnant stopes at Midas and considering other
alternatives to reduce the cash spend and improve the cash flow at the
Nevada operations. Some of the possible alternatives include third party
processing, reducing development, and changing grade control procedures.
Pending the outcome of the review, the annual production and cost
estimates for Nevada are being suspended.
Lucky Friday Mine - Idaho
Silver production of 173,627 ounces increased 74% over the prior year
period mainly due to a shift in focus from development to production by
the salaried staff. Cost of sales for the first quarter was $2.2 million
compared to $4.1 million in the first quarter of 2018, with the decrease
resulting from lower sales volume due to the timing of concentrate
shipments.
The higher level of production is helping to defray more costs
associated with the strike at Lucky Friday than originally anticipated.
The mine recently celebrated two years of operations without a
Restricted Work Duty Injury (RWDI) or Lost Time Injury (LTI).
The construction of the Remote Vein Miner (RVM) continues in Sweden, and
delivery is expected in the first half of 2020.
EXPLORATION
Exploration (including Corporate Development) expenses were $4.4 million
in the first quarter of 2019, a decrease of $3.0 million compared to the
first quarter 2018.
A complete summary of exploration for the first quarter can be found in
the news release entitled "Hecla Reports Drilling Success at Casa
Berardi, San Sebastian, Greens Creek and Nevada" released on May 8, 2019.
PRE-DEVELOPMENT
Pre-development spending was $0.9 million for the quarter, principally
to advance the permitting of Rock Creek and Montanore.
2019 ESTIMATES7
The annual production and cost outlook have been suspended for Nevada
pending the results of the comprehensive review.
|
2019 Production Outlook
|
|
|
|
Silver Production
(Moz)
|
|
Gold Production
(Koz)
|
|
Silver Equivalent
(Moz)
|
|
Gold Equivalent
(Koz)
|
|
|
|
Original
(if revised)
|
|
Current
|
|
Original
(if revised)
|
|
Current
|
|
Original
(if revised)
|
|
Current
|
|
Original
(if revised)
|
|
Current
|
|
Greens Creek
|
|
7.7
|
|
7.7
|
|
50
|
|
50
|
|
24.0
|
|
24.0
|
|
305
|
|
305
|
|
Lucky Friday
|
|
0.2
|
|
0.2
|
|
N/A
|
|
N/A
|
|
0.2
|
|
0.2
|
|
N/A
|
|
N/A
|
|
San Sebastian
|
|
2.0
|
|
2.0
|
|
14
|
|
14
|
|
3.0
|
|
3.0
|
|
40
|
|
40
|
|
Casa Berardi
|
|
N/A
|
|
N/A
|
|
150
|
|
150
|
|
11.7
|
|
11.7
|
|
150
|
|
150
|
|
Nevada Operations
|
|
0.1
|
|
Suspended
|
|
76
|
|
Suspended
|
|
6.1
|
|
Suspended
|
|
77
|
|
Suspended
|
|
Total8
|
|
10.0
|
|
9.9
|
|
290
|
|
N/A
|
|
45.0
|
|
N/A
|
|
572
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019 Cost Outlook
|
|
|
|
Costs of Sales (million)
|
|
Cash cost, after by-product credits, per silver/gold ounce2,4
|
|
AISC, after by-product credits, per produced silver/gold ounce3
|
|
|
|
Original
(if revised)
|
|
Current
|
|
Original
(if revised)
|
|
Current
|
|
Original
(if revised)
|
|
Current
|
|
Greens Creek
|
|
$202
|
|
$202
|
|
$0
|
|
$0
|
|
$5.50
|
|
$5.50
|
|
Lucky Friday
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
San Sebastian
|
|
$41
|
|
$41
|
|
$9.00
|
|
$9.00
|
|
$12.00
|
|
$12.00
|
|
Total Silver
|
|
$243
|
|
$243
|
|
$1.10
|
|
$1.10
|
|
$11.00
|
|
$11.00
|
|
Casa Berardi
|
|
$210
|
|
$210
|
|
$850
|
|
$850
|
|
$1,150
|
|
$1,150
|
|
Nevada Operations
|
|
$90
|
|
Suspended
|
|
$900
|
|
Suspended
|
|
$1,325
|
|
Suspended
|
|
Total Gold8
|
|
$300
|
|
N/A
|
|
$875
|
|
N/A
|
|
$1,250
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019 Capital and Exploration Outlook
|
|
|
|
Original
(if revised)
|
|
Current
|
|
2019E Capital expenditures (excluding capitalized interest)
|
|
$150 million
|
|
$150 million
|
|
2019E Exploration expenditures (includes Corporate Development)
|
|
$25 million
|
|
$25 million
|
|
2019E Pre-development expenditures
|
|
$2.5 million
|
|
$2.5 million
|
|
2019E Research and Development expenditures
|
|
$3.5 million
|
|
$3.5 million
|
|
|
|
|
|
|
|
1,2,4,6 Non-GAAP measures. See pages 8-9 for more
information.
|
|
|
DIVIDENDS
Common
The Board of Directors elected to declare a quarterly cash
dividend of $0.0025 per share of common stock, payable on or about June
9, 2019, to stockholders of record on May 24, 2019. The realized silver
price was $15.70 in the first quarter and therefore did not satisfy the
criteria for a larger dividend under the Company's dividend policy.
Preferred
The Board of Directors elected to declare a quarterly cash
dividend of $0.875 per share of preferred stock, payable on or about
July 1, 2019, to stockholders of record on June 14, 2019.
CONFERENCE CALL AND WEBCAST
A conference call and webcast will be held Thursday, May 9, at 10:00
a.m. Eastern Time to discuss these results. You may join the conference
call by dialing toll-free 1-855-760-8158 or for international dialing
1-720-634-2922. The participant passcode is HECLA. Hecla's live and
archived webcast can be accessed at www.hecla-mining.com
under Investors or via Thomson StreetEvents Network.
ABOUT HECLA
Founded in 1891, Hecla Mining Company (NYSE:HL) is a leading low-cost
U.S. silver producer with operating mines in Alaska, Idaho, and Mexico
and is a gold producer with operating mines in Quebec, Canada and
Nevada. The Company also has exploration and pre-development properties
in seven world-class silver and gold mining districts in the U.S.,
Canada and Mexico, and an exploration office and investments in
early-stage silver exploration projects in Canada.
NOTES
Non-GAAP Financial Measures
Non-GAAP financial measures are intended to provide additional
information only and do not have any standard meaning prescribed by
generally accepted accounting principles in the United States (GAAP).
These measures should not be considered in isolation or as a substitute
for measures of performance prepared in accordance with GAAP.
(1) Adjusted net income (loss) applicable to common
stockholders is a non-GAAP measurement, a reconciliation of which to net
income (loss) applicable to common stockholders, the most comparable
GAAP measure, can be found at the end of the release. Adjusted net
income (loss) is a measure used by management to evaluate the Company's
operating performance but should not be considered an alternative to net
income (loss), or cash provided by operating activities as those terms
are defined by GAAP, and does not necessarily indicate whether cash
flows will be sufficient to fund cash needs. In addition, the Company
may use it when formulating performance goals and targets under its
incentive program.
(2) Adjusted EBITDA is a non-GAAP measurement, a
reconciliation of which to net income (loss), the most comparable GAAP
measure, can be found at the end of the release. Adjusted EBITDA is a
measure used by management to evaluate the Company's operating
performance but should not be considered an alternative to net income
(loss), or cash provided by operating activities as those terms are
defined by GAAP, and does not necessarily indicate whether cash flows
will be sufficient to fund cash needs. In addition, the Company may use
it when formulating performance goals and targets under its incentive
program.
(3) Net debt to adjusted EBITDA is a non-GAAP measurement, a
reconciliation of adjusted EBITDA and net debt to the closest GAAP
measurements of net income (loss) and debt can be found at the end of
the release. It is an important measure for management to measure
relative indebtedness and the ability to service the debt relative to
its peers. It is calculated as total debt outstanding less total cash on
hand divided by adjusted EBITDA.
(4) Cash cost, after by-product credits, per silver or gold
ounce is a non-GAAP measurement, a reconciliation of which to cost of
sales and other direct production costs and depreciation, depletion and
amortization (sometimes referred to as "cost of sales" in this release),
can be found at the end of the release. It is an important operating
statistic that management utilizes to measure each mine's operating
performance. It also allows the benchmarking of performance of each mine
versus those of our competitors. As a silver and gold mining company,
management also uses the statistic on an aggregate basis - aggregating
the Greens Creek, Lucky Friday and San Sebastian mines - to compare
performance with that of other silver mining companies, and aggregating
Casa Berardi and Nevada Operations to compare performance with other
gold companies. Similarly, the statistic is useful in identifying
acquisition and investment opportunities as it provides a common tool
for measuring the financial performance of other mines with varying
geologic, metallurgical and operating characteristics. In addition, the
Company may use it when formulating performance goals and targets under
its incentive program. Cash cost, after by-product credits, per silver
ounce is not presented for Lucky Friday for the first quarter of 2019
and 2018, as production was limited due to the strike and results are
not comparable to those from prior periods and are not indicative of
future operating results under full production.
(5) All in sustaining cost (AISC), after by-product credits,
is a non-GAAP measurement, a reconciliation of which to cost of sales
and other direct production costs and depreciation, depletion and
amortization, the closest GAAP measurement, can be found in the end of
the release. AISC, after by-product credits, includes cost of sales and
other direct production costs, expenses for reclamation and exploration
at the mine sites, corporate exploration related to sustaining
operations, and all site sustaining capital costs. AISC, after
by-product credits, is calculated net of depreciation, depletion, and
amortization and by-product credits. AISC, after by-product credits, per
silver ounce is not presented for Lucky Friday for the first quarter of
2019 and 2018, as production was limited due to the strike and results
are not comparable to those from prior periods and are not indicative of
future operating results under full production.
Current GAAP measures used in the mining industry, such as cost of goods
sold, do not capture all the expenditures incurred to discover, develop
and sustain silver and gold production. Management believes that all in
sustaining costs is a non-GAAP measure that provides additional
information to management, investors and analysts to help in the
understanding of the economics of our operations and performance
compared to other producers and in the investor's visibility by better
defining the total costs associated with production. Similarly, the
statistic is useful in identifying acquisition and investment
opportunities as it provides a common tool for measuring the financial
performance of other mines with varying geologic, metallurgical and
operating characteristics. In addition, the Company may use it when
formulating performance goals and targets under its incentive program.
(6) Cash cost, after by-product credits, per gold ounce is
only applicable to Casa Berardi and Nevada Operations production. Gold
produced from Greens Creek and San Sebastian is treated as a by-product
credit against the silver cash cost.
Other
(7) Expectations for 2019 include silver, gold, lead and zinc
production from Greens Creek, San Sebastian, Casa Berardi and Nevada
Operations converted using Au $1,250/oz, Ag $16.00/oz, Zn $1.25/lb, and
Pb $1.00/lb. Lucky Friday expectations are currently suspended as there
is currently a strike. Numbers may be rounded.
(8) Estimates for 2019 Nevada production and costs, as well
as annual gold estimates, are suspended pending completion of the
comprehensive review of Nevada operations.
Cautionary Statements to Investors on Forward-Looking Statements
This news release contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, which
are intended to be covered by the safe harbor created by such sections
and other applicable laws, including Canadian securities laws. Such
forward-looking statements may include, without limitation: (i)
estimates of future production and sales; (ii) successful integration of
our recently acquired Nevada operations unit and its impact on Hecla's
operations and results; (iii) expectations regarding the development,
growth potential, financial performance of the Company’s projects; (iv)
the Company’s mineral reserves and resources; (v) ability to optimize
operations at Casa Berardi; (vi) ability to complete construction of the
remote vein miner and for it to operate successfully; (vii) impact of
the Lucky Friday strike on production and cash flow; (viii) ability to
generate value from innovations being introduced into the mines; (ix)
impact of metals prices on cash costs, after by-product credits; and (x)
estimates of future smelter demand. Estimates or expectations of future
events or results are based upon certain assumptions, which may prove to
be incorrect. Such assumptions, include, but are not limited to: (i)
there being no significant change to current geotechnical,
metallurgical, hydrological and other physical conditions; (ii)
permitting, development, operations and expansion of the Company’s
projects being consistent with current expectations and mine plans;
(iii) political/regulatory developments in any jurisdiction in which the
Company operates being consistent with its current expectations; (iv)
the exchange rate for the Canadian dollar to the U.S. dollar, being
approximately consistent with current levels; (v) certain price
assumptions for gold, silver, lead and zinc; (vi) prices for key
supplies being approximately consistent with current levels; (vii) the
accuracy of our current mineral reserve and mineral resource estimates;
and (viii) the Company’s plans for development and production will
proceed as expected and will not require revision as a result of risks
or uncertainties, whether known, unknown or unanticipated. Where the
Company expresses or implies an expectation or belief as to future
events or results, such expectation or belief is expressed in good faith
and believed to have a reasonable basis. However, such statements are
subject to risks, uncertainties and other factors, which could cause
actual results to differ materially from future results expressed,
projected or implied by the “forward-looking statements.” Such risks
include, but are not limited to gold, silver and other metals price
volatility, operating risks, currency fluctuations, increased production
costs and variances in ore grade or recovery rates from those assumed in
mining plans, community relations, conflict resolution and outcome of
projects or oppositions, litigation, political, regulatory, labor and
environmental risks, and exploration risks and results, including that
mineral resources are not mineral reserves, they do not have
demonstrated economic viability and there is no certainty that they can
be upgraded to mineral reserves through continued exploration. For a
more detailed discussion of such risks and other factors, see the
Company’s 2018 Form 10-K, filed on February 22, 2019, and Form 10-Q
filed on May 9, 2019 with the Securities and Exchange Commission (SEC),
as well as the Company’s other SEC filings. The Company does not
undertake any obligation to publicly release revisions to any
“forward-looking statement,” including, without limitation, outlook, to
reflect events or circumstances after the date of this news release, or
to reflect the occurrence of unanticipated events, except as may be
required under applicable securities laws. Investors should not assume
that any lack of update to a previously issued “forward-looking
statement” constitutes a reaffirmation of that statement. Continued
reliance on “forward-looking statements” is at investors’ own risk.
Cautionary Statements to Investors on Reserves
and Resources
Reporting requirements in the United States for disclosure of mineral
properties are governed by the SEC and included in the SEC's Securities
Act Industry Guide 7, entitled “Description of Property by Issuers
Engaged or to be Engaged in Significant Mining Operations” (Guide 7).
Although the SEC has recently issued new rules rescinding Guide 7, the
new rules are not binding until January 1, 2021, and at this time the
Company still reports in accordance with Guide 7. However, the Company
is also a “reporting issuer” under Canadian securities laws, which
require estimates of mineral resources and reserves to be prepared in
accordance with Canadian National Instrument 43-101 (NI 43-101). NI
43-101 requires all disclosure of estimates of potential mineral
resources and reserves to be disclosed in accordance with its
requirements. Such Canadian information is included herein to satisfy
the Company's “public disclosure” obligations under Regulation FD of the
SEC and to provide U.S. holders with ready access to information
publicly available in Canada.
Reporting requirements in the United States for disclosure of mineral
properties under Guide 7 and the requirements in Canada under NI 43-101
standards are substantially different. This document contains a summary
of certain estimates of the Company, not only of proven and probable
reserves within the meaning of Guide 7, but also of mineral resource and
mineral reserve estimates estimated in accordance with the definitional
standards of the Canadian Institute of Mining, Metallurgy and Petroleum
referred to in NI 43-101. Under Guide 7, the term "reserve" means that
part of a mineral deposit that can be economically and legally extracted
or produced at the time of the reserve determination. The term
"economically", as used in the definition of reserve, means that
profitable extraction or production has been established or analytically
demonstrated to be viable and justifiable under reasonable investment
and market assumptions. The term "legally", as used in the definition of
reserve, does not imply that all permits needed for mining and
processing have been obtained or that other legal issues have been
completely resolved. However, for a reserve to exist, Hecla must have a
justifiable expectation, based on applicable laws and regulations, that
issuance of permits or resolution of legal issues necessary for mining
and processing at a particular deposit will be accomplished in the
ordinary course and in a timeframe consistent with Hecla's current mine
plans. The terms “measured resources”, “indicated resources,” and
“inferred resources” are Canadian mining terms as defined in accordance
with NI 43-101. These terms are not defined under Guide 7 and are not
normally permitted to be used in reports and registration statements
filed with the SEC in the United States, except where required to be
disclosed by foreign law. The term “resource” does not equate to the
term “reserve”. Under Guide 7, the material described herein as
“indicated resources” and “measured resources” would be characterized as
“mineralized material” and is permitted to be disclosed in tonnage and
grade only, not ounces. The category of “inferred resources” is not
recognized by Guide 7. Investors are cautioned not to assume that any
part or all of the mineral deposits in such categories will ever be
converted into proven or probable reserves. “Resources” have a great
amount of uncertainty as to their existence, and great uncertainty as to
their economic and legal feasibility. It cannot be assumed that all or
any part of such a “resource” will ever be upgraded to a higher category
or will ever be economically extracted. Investors are cautioned not to
assume that all or any part of a “resource” exists or is economically or
legally mineable. Investors are also especially cautioned that the mere
fact that such resources may be referred to in ounces of silver and/or
gold, rather than in tons of mineralization and grades of silver and/or
gold estimated per ton, is not an indication that such material will
ever result in mined ore which is processed into commercial silver or
gold.
Qualified Person (QP) Pursuant to Canadian
National Instrument 43-101
Dean McDonald, PhD. P.Geo., Senior Vice President - Exploration of Hecla
Mining Company, who serves as a Qualified Person under National
Instrument 43-101, supervised the preparation of the scientific and
technical information concerning Hecla’s mineral projects in this news
release. Information regarding data verification, surveys and
investigations, quality assurance program and quality control measures
and a summary of sample, analytical or testing procedures for the Greens
Creek Mine are contained in a technical report prepared for Hecla titled
“Technical Report for the Greens Creek Mine, Juneau, Alaska, USA”
effective date March 28, 2013, and for the Lucky Friday Mine are
contained in a technical report prepared for Hecla titled “Technical
Report on the Lucky Friday Mine Shoshone County, Idaho, USA” effective
date April 2, 2014, for the Casa Berardi Mine are contained in a
technical report prepared for Hecla titled "Technical Report on the
Mineral Resource and Mineral Reserve Estimate for the Casa Berardi Mine,
Northwestern Quebec, Canada" effective date March 31, 2014 (the "Casa
Berardi Technical Report"), and for the San Sebastian Mine are contained
in a technical report prepared for Hecla titled "Technical Report for
the San Sebastian Ag-Au Property, Durango, Mexico" effective date
September 8, 2015. Also included in these three technical reports is a
description of the key assumptions, parameters and methods used to
estimate mineral reserves and resources and a general discussion of the
extent to which the estimates may be affected by any known
environmental, permitting, legal, title, taxation, socio-political,
marketing or other relevant factors. Copies of these technical reports
are available under Hecla's profile on SEDAR at www.sedar.com.
The current Casa Berardi drill program was performed on core sawed in
half and included the insertion of blanks and standards of variable
grade in every 24 core samples. Standards were generally provided by
Analytical Solutions Ltd and prepared in 30 gram bags. Samples were sent
to the Swastika Laboratories in Swastika, Ontario, a registered
accredited laboratory, where they were dried, crushed, and split for
gold analysis. Analysis for gold was completed by fire assay with AA
finish. Gold over-limits were analyzed by fire assay with gravimetric
finish. Data received from the lab were subject to validation using
in-built program triggers to identify outside limit blank or standard
assays that require re-analysis. Over 5% of the original pulps and
rejects are sent for re-assay to ALS Chemex in Val d’Or for quality
control.
Dr. McDonald reviewed and verified information regarding drill sampling,
data verification of all digitally-collected data, drill surveys and
specific gravity determinations relating to the Casa Berardi mine. The
review encompassed quality assurance programs and quality control
measures including analytical or testing practice, chain-of-custody
procedures, sample storage procedures and included independent sample
collection and analysis. This review found the information and
procedures meet industry standards and are adequate for Mineral Resource
and Mineral Reserve estimation and mine planning purposes.
|
HECLA MINING COMPANY
|
|
Condensed Consolidated Statements of (Loss) Income
|
|
(dollars and shares in thousands, except per share amounts -
unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2019
|
|
March 31, 2018
|
|
Sales of products
|
|
$
|
152,617
|
|
|
$
|
139,709
|
|
|
Cost of sales and other direct production costs
|
|
110,386
|
|
|
72,869
|
|
|
Depreciation, depletion and amortization
|
|
38,787
|
|
|
28,054
|
|
|
|
|
149,173
|
|
|
100,923
|
|
|
Gross profit
|
|
3,444
|
|
|
38,786
|
|
|
|
|
|
|
|
|
Other operating expenses:
|
|
|
|
|
|
General and administrative
|
|
9,959
|
|
|
7,735
|
|
|
Exploration
|
|
4,402
|
|
|
7,360
|
|
|
Pre-development
|
|
856
|
|
|
1,005
|
|
|
Research and development
|
|
403
|
|
|
1,436
|
|
|
Other operating expense
|
|
587
|
|
|
515
|
|
|
Provision for closed operations and environmental matters
|
|
570
|
|
|
1,262
|
|
|
Suspension-related costs
|
|
2,778
|
|
|
5,017
|
|
|
Acquisition costs
|
|
13
|
|
|
2,507
|
|
|
|
|
19,568
|
|
|
26,837
|
|
|
(Loss) income from operations
|
|
(16,124
|
)
|
|
11,949
|
|
|
Other income (expense):
|
|
|
|
|
|
(Loss) gain on derivative contracts
|
|
(1,799
|
)
|
|
4,007
|
|
|
Other expense
|
|
(1,124
|
)
|
|
(56
|
)
|
|
Unrealized gain on investments
|
|
96
|
|
|
310
|
|
|
Net foreign exchange (loss) gain
|
|
(3,133
|
)
|
|
2,592
|
|
|
Interest expense
|
|
(10,665
|
)
|
|
(9,794
|
)
|
|
|
|
(16,625
|
)
|
|
(2,941
|
)
|
|
(Loss) income before income taxes
|
|
(32,749
|
)
|
|
9,008
|
|
|
Income tax benefit (provision)
|
|
7,216
|
|
|
(768
|
)
|
|
Net (loss) income
|
|
(25,533
|
)
|
|
8,240
|
|
|
Preferred stock dividends
|
|
(138
|
)
|
|
(138
|
)
|
|
(Loss) income applicable to common stockholders
|
|
$
|
(25,671
|
)
|
|
$
|
8,102
|
|
|
Basic (loss) income per common share after preferred dividends
|
|
$
|
(0.05
|
)
|
|
$
|
0.02
|
|
|
Diluted (loss) income per common share after preferred dividends
|
|
$
|
(0.05
|
)
|
|
$
|
0.02
|
|
|
Weighted average number of common shares outstanding - basic
|
|
482,829
|
|
|
399,322
|
|
|
Weighted average number of common shares outstanding - diluted
|
|
482,829
|
|
|
401,923
|
|
|
|
|
|
|
|
|
|
|
HECLA MINING COMPANY
|
|
Condensed Consolidated Balance Sheets
|
|
(dollars and shares in thousands - unaudited)
|
|
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
11,797
|
|
|
$
|
27,389
|
|
|
Accounts receivable:
|
|
|
|
|
|
Trade
|
|
9,586
|
|
|
4,184
|
|
|
Taxes
|
|
16,831
|
|
|
14,191
|
|
|
Other, net
|
|
5,162
|
|
|
7,443
|
|
|
Inventories
|
|
78,674
|
|
|
87,533
|
|
|
Prepaid taxes
|
|
13,818
|
|
|
12,231
|
|
|
Other current assets
|
|
8,239
|
|
|
11,179
|
|
|
Total current assets
|
|
144,107
|
|
|
164,150
|
|
|
Non-current investments
|
|
6,768
|
|
|
6,583
|
|
|
Non-current restricted cash and investments
|
|
1,025
|
|
|
1,025
|
|
|
Properties, plants, equipment and mineral interests, net
|
|
2,508,981
|
|
|
2,520,004
|
|
|
Operating lease right-of-use asset
|
|
20,647
|
|
|
—
|
|
|
Non-current deferred income taxes
|
|
3,058
|
|
|
1,987
|
|
|
Other non-current assets
|
|
10,019
|
|
|
10,195
|
|
|
Total assets
|
|
$
|
2,694,605
|
|
|
$
|
2,703,944
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
61,680
|
|
|
$
|
77,861
|
|
|
Accrued payroll and related benefits
|
|
36,435
|
|
|
30,034
|
|
|
Accrued taxes
|
|
9,109
|
|
|
7,727
|
|
|
Current portion of finance leases
|
|
5,858
|
|
|
5,264
|
|
|
Current portion of operating leases
|
|
6,701
|
|
|
—
|
|
|
Current portion of accrued reclamation and closure costs
|
|
5,325
|
|
|
3,410
|
|
|
Other current liabilities
|
|
21,713
|
|
|
11,898
|
|
|
Total current liabilities
|
|
146,821
|
|
|
136,194
|
|
|
Non-current finance leases
|
|
9,302
|
|
|
7,871
|
|
|
Non-current operating leases
|
|
13,964
|
|
|
—
|
|
|
Long-term debt
|
|
533,723
|
|
|
532,799
|
|
|
Non-current deferred tax liability
|
|
159,425
|
|
|
173,537
|
|
|
Accrued reclamation and closure costs
|
|
104,186
|
|
|
104,979
|
|
|
Non-current pension liability
|
|
49,821
|
|
|
47,711
|
|
|
Other non-current liabilities
|
|
6,793
|
|
|
9,890
|
|
|
Total liabilities
|
|
1,024,035
|
|
|
1,012,981
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
Preferred stock
|
|
39
|
|
|
39
|
|
|
Common stock
|
|
122,052
|
|
|
121,956
|
|
|
Capital surplus
|
|
1,882,613
|
|
|
1,880,481
|
|
|
Accumulated deficit
|
|
(275,188
|
)
|
|
(248,308
|
)
|
|
Accumulated other comprehensive loss
|
|
(38,210
|
)
|
|
(42,469
|
)
|
|
Treasury stock
|
|
(20,736
|
)
|
|
(20,736
|
)
|
|
Total stockholders’ equity
|
|
1,670,570
|
|
|
1,690,963
|
|
|
Total liabilities and stockholders’ equity
|
|
$
|
2,694,605
|
|
|
$
|
2,703,944
|
|
|
Common shares outstanding
|
|
482,988
|
|
|
482,604
|
|
|
|
|
|
|
|
|
|
|
HECLA MINING COMPANY
|
|
Condensed Consolidated Statements of Cash Flows
|
|
(dollars in thousands - unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2019
|
|
March 31, 2018
|
|
OPERATING ACTIVITIES
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(25,533
|
)
|
|
$
|
8,240
|
|
|
Non-cash elements included in net (loss) income:
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
40,267
|
|
|
29,490
|
|
|
Unrealized gain on investments
|
|
(96
|
)
|
|
(310
|
)
|
|
Adjustment of inventory to market value
|
|
1,399
|
|
|
—
|
|
|
Gain on disposition of properties, plants, equipment and mineral
interests
|
|
—
|
|
|
(129
|
)
|
|
Provision for reclamation and closure costs
|
|
1,594
|
|
|
1,323
|
|
|
Stock compensation
|
|
1,580
|
|
|
1,089
|
|
|
Deferred income taxes
|
|
(8,293
|
)
|
|
(438
|
)
|
|
Amortization of loan origination fees
|
|
625
|
|
|
449
|
|
|
Loss (gain) on derivative contracts
|
|
3,686
|
|
|
(9,094
|
)
|
|
Foreign exchange loss (gain)
|
|
5,550
|
|
|
(3,399
|
)
|
|
Other non-cash charges, net
|
|
2
|
|
|
2
|
|
|
Change in assets and liabilities:
|
|
|
|
|
|
Accounts receivable
|
|
(5,063
|
)
|
|
(7,266
|
)
|
|
Inventories
|
|
3,171
|
|
|
(6,762
|
)
|
|
Other current and non-current assets
|
|
1,124
|
|
|
(3,171
|
)
|
|
Accounts payable and accrued liabilities
|
|
(9,496
|
)
|
|
13,956
|
|
|
Accrued payroll and related benefits
|
|
7,212
|
|
|
(3,927
|
)
|
|
Accrued taxes
|
|
1,237
|
|
|
218
|
|
|
Accrued reclamation and closure costs and other non-current
liabilities
|
|
1,064
|
|
|
(3,888
|
)
|
|
Cash provided by operating activities
|
|
20,030
|
|
|
16,383
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
Additions to properties, plants, equipment and mineral interests
|
|
(33,071
|
)
|
|
(17,635
|
)
|
|
Maturities of investments
|
|
—
|
|
|
30,501
|
|
|
Proceeds from disposition of properties, plants and equipment
|
|
1
|
|
|
151
|
|
|
Purchases of investments
|
|
—
|
|
|
(31,182
|
)
|
|
Net cash used in investing activities
|
|
(33,070
|
)
|
|
(18,165
|
)
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES
|
|
|
|
|
|
Acquisition of treasury shares
|
|
—
|
|
|
(1,225
|
)
|
|
Dividends paid to common stockholders
|
|
(1,209
|
)
|
|
(998
|
)
|
|
Dividends paid to preferred stockholders
|
|
(138
|
)
|
|
(138
|
)
|
|
Debt origination fees
|
|
(39
|
)
|
|
—
|
|
|
Borrowings on debt
|
|
58,000
|
|
|
31,024
|
|
|
Payments on debt
|
|
(58,000
|
)
|
|
—
|
|
|
Repayments of finance leases
|
|
(1,261
|
)
|
|
(1,322
|
)
|
|
Net cash (used in) provided by financing activities
|
|
(2,647
|
)
|
|
27,341
|
|
|
Effect of exchange rates on cash
|
|
95
|
|
|
876
|
|
|
Net (decrease) increase in cash, cash equivalents and restricted
cash and cash equivalents
|
|
(15,592
|
)
|
|
26,435
|
|
|
Cash, cash equivalents and restricted cash and cash equivalents at
beginning of period
|
|
28,414
|
|
|
187,139
|
|
|
Cash, cash equivalents and restricted cash and cash equivalents at
end of period
|
|
$
|
12,822
|
|
|
$
|
213,574
|
|
|
|
|
|
|
|
|
|
|
|
|
HECLA MINING COMPANY
|
|
|
Production Data
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2019
|
|
March 31, 2018
|
|
GREENS CREEK UNIT
|
|
|
|
|
|
|
Tons of ore milled
|
|
206,825
|
|
|
211,430
|
|
|
Mining cost per ton of ore
|
|
$
|
78.83
|
|
|
$
|
68.99
|
|
|
Milling cost per ton of ore
|
|
$
|
35.86
|
|
|
$
|
32.64
|
|
|
Ore grade milled - Silver (oz./ton)
|
|
13.46
|
|
|
11.71
|
|
|
Ore grade milled - Gold (oz./ton)
|
|
0.10
|
|
|
0.10
|
|
|
Ore grade milled - Lead (%)
|
|
2.83
|
|
|
2.96
|
|
|
Ore grade milled - Zinc (%)
|
|
7.32
|
|
|
8.05
|
|
|
Silver produced (oz.)
|
|
2,232,747
|
|
|
1,913,232
|
|
|
Gold produced (oz.)
|
|
14,328
|
|
|
13,118
|
|
|
Lead produced (tons)
|
|
4,782
|
|
|
5,021
|
|
|
Zinc produced (tons)
|
|
13,518
|
|
|
14,799
|
|
|
Cash cost, after by-product credits, per silver ounce (1)
|
|
$
|
0.49
|
|
|
$
|
(4.99
|
)
|
|
AISC, after by-product credits, per silver ounce (1)
|
|
$
|
3.24
|
|
|
$
|
0.59
|
|
|
Capital additions (in thousands)
|
|
$
|
5,312
|
|
|
$
|
9,482
|
|
|
LUCKY FRIDAY UNIT
|
|
|
|
|
|
|
Tons of ore processed
|
|
13,803
|
|
|
9,559
|
|
|
Mining cost per ton of ore
|
|
$
|
131.25
|
|
|
$
|
114.76
|
|
|
Milling cost per ton of ore
|
|
$
|
36.45
|
|
|
$
|
21.67
|
|
|
Ore grade milled - Silver (oz./ton)
|
|
13.33
|
|
|
11.10
|
|
|
Ore grade milled - Lead (%)
|
|
7.97
|
|
|
6.92
|
|
|
Ore grade milled - Zinc (%)
|
|
3.54
|
|
|
4.79
|
|
|
Silver produced (oz.)
|
|
173,627
|
|
|
99,780
|
|
|
Lead produced (tons)
|
|
1,002
|
|
|
606
|
|
|
Zinc produced (tons)
|
|
426
|
|
|
412
|
|
|
Cash cost, after by-product credits, per silver ounce (1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
AISC, after by-product credits, per silver ounce (1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Capital additions (in thousands)
|
|
$
|
1,726
|
|
|
$
|
988
|
|
|
CASA BERARDI UNIT
|
|
|
|
|
|
|
Tons of ore milled - underground
|
|
189,352
|
|
|
191,333
|
|
|
Tons of ore milled - surface pit
|
|
140,399
|
|
|
157,216
|
|
|
Tons of ore milled - total
|
|
329,751
|
|
|
348,549
|
|
|
Surface tons mined - ore and waste
|
|
2,160,123
|
|
|
1,676,434
|
|
|
Mining cost per ton of ore - underground
|
|
$
|
106.47
|
|
|
$
|
108.50
|
|
|
Mining cost per ton of ore - combined
|
|
$
|
86.14
|
|
|
$
|
76.95
|
|
|
Mining cost per ton of ore and waste - surface tons mined
|
|
$
|
3.82
|
|
|
$
|
3.62
|
|
|
Milling cost per ton of ore
|
|
$
|
15.77
|
|
|
$
|
15.96
|
|
|
Ore grade milled - Gold (oz./ton) - underground
|
|
0.130
|
|
|
0.18
|
|
|
Ore grade milled - Gold (oz./ton) - surface pit
|
|
0.05
|
|
|
0.08
|
|
|
Ore grade milled - Gold (oz./ton) - combined
|
|
0.120
|
|
|
0.135
|
|
|
Ore grade milled - Silver (oz./ton)
|
|
0.03
|
|
|
0.03
|
|
|
Gold produced (oz.) - underground
|
|
25,264
|
|
|
29,522
|
|
|
Gold produced (oz.) - surface pit
|
|
6,535
|
|
|
10,655
|
|
|
Gold produced (oz.) - total
|
|
31,799
|
|
|
40,177
|
|
|
Silver produced (oz.)
|
|
8,240
|
|
|
8,891
|
|
|
Cash cost, after by-product credits, per gold ounce (1)
|
|
$
|
1,113
|
|
|
$
|
827
|
|
|
AISC, after by-product credits, per gold ounce (1)
|
|
$
|
1,338
|
|
|
$
|
1,086
|
|
|
Capital additions (in thousands)
|
|
$
|
5,679
|
|
|
$
|
9,067
|
|
|
|
|
|
|
|
|
|
|
|
|
SAN SEBASTIAN UNIT
|
|
|
|
|
|
|
Tons of ore milled
|
|
44,475
|
|
|
34,397
|
|
|
Mining cost per ton of ore
|
|
$
|
125.59
|
|
|
$
|
115.12
|
|
|
Milling cost per ton of ore
|
|
$
|
62.21
|
|
|
$
|
67.13
|
|
|
Ore grade milled - Silver (oz./ton)
|
|
10.94
|
|
|
16.1
|
|
|
Ore grade milled - Gold (oz./ton)
|
|
0.095
|
|
|
0.142
|
|
|
Silver produced (oz.)
|
|
441,079
|
|
|
512,192
|
|
|
Gold produced (oz.)
|
|
3,530
|
|
|
4,513
|
|
|
Cash cost, after by-product credits, per silver ounce (1)
|
|
$
|
11.23
|
|
|
$
|
2.81
|
|
|
AISC, after by-product credits, per silver ounce (1)
|
|
$
|
16.55
|
|
|
$
|
8.37
|
|
|
Capital additions (in thousands)
|
|
$
|
1,896
|
|
|
$
|
430
|
|
|
NEVADA OPERATIONS UNIT
|
|
|
|
|
|
|
Tons of ore milled
|
|
$
|
41,365
|
|
|
N/A
|
|
|
Mining cost per ton of ore
|
|
$
|
212.56
|
|
|
N/A
|
|
|
Milling cost per ton of ore
|
|
$
|
112.35
|
|
|
N/A
|
|
|
Ore grade milled - Gold (oz./ton)
|
|
0.300
|
|
|
N/A
|
|
|
Ore grade milled - Silver (oz./ton)
|
|
2.49
|
|
|
N/A
|
|
|
Gold produced (oz.)
|
|
10,364
|
|
|
N/A
|
|
|
Silver produced (oz.)
|
|
67,438
|
|
|
N/A
|
|
|
Cash cost, after by-product credits, per gold ounce (1)
|
|
$
|
1,782
|
|
|
N/A
|
|
|
AISC, after by-product credits, per gold ounce (1)
|
|
$
|
3,056
|
|
|
N/A
|
|
|
Capital additions (in thousands)
|
|
$
|
21,805
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
(1) Cash cost, after by-product credits, per ounce and AISC, after
by-products credits, per ounce represent a non-U.S. Generally
Accepted Accounting Principles (GAAP) measurement. A reconciliation
of cash cost, after by-product credits and AISC, after by-products
credits to cost of sales and other direct production costs and
depreciation, depletion and amortization (GAAP) can be found in the
cash cost per ounce reconciliation section of this news release.
Gold, lead and zinc produced have been treated as by-product credits
in calculating silver costs per ounce. The primary metal produced at
Casa Berardi and Nevada Operations is gold, with a by-product credit
for the value of silver production.
|
|
|
Reconciliation of Cost of Sales and Other Direct Production Costs
and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before
By-product Credits and Cash Cost, After By-product Credits (non-GAAP)
and All-In Sustaining Costs, Before By-product Credits and All-In
Sustaining Costs, After By-product Credits (non-GAAP)
The tables below present reconciliations between the most comparable
GAAP measure of cost of sales and other direct production costs and
depreciation, depletion and amortization to the non-GAAP measures of
Cash Cost, Before By-product Credits, Cash Cost, After By-product
Credits, AISC, Before By-product Credits and AISC, After By-product
Credits for our operations at the Greens Creek, Lucky Friday, San
Sebastian and Casa Berardi units for the three-month periods ended
March 31, 2019 and 2018.
Cash Cost, After By-product Credits, per Ounce is an important operating
statistic that we utilize to measure each mine's operating performance.
AISC, After By-product Credits, per Ounce is an important operating
statistic that we utilize as a measures of our mines' net cash flow
after costs for exploration, pre-development, reclamation, and
sustaining capital. Current GAAP measures used in the mining industry,
such as cost of goods sold, do not capture all the expenditures incurred
to discover, develop and sustain silver and gold production. Cash Cost,
After By-product Credits, per Ounce and AISC, After By-product Credits,
per Ounce also allow us to benchmark the performance of each of our
mines versus those of our competitors. As a silver and gold mining
company, we also use these statistics on an aggregate basis -
aggregating the Greens Creek, Lucky Friday and San Sebastian mines - to
compare our performance with that of other silver mining companies, and
aggregating Casa Berardi and Nevada Operations for comparison to other
gold mining companies. Similarly, these statistics are useful in
identifying acquisition and investment opportunities as they provide a
common tool for measuring the financial performance of other mines with
varying geologic, metallurgical and operating characteristics.
Cash Cost, Before By-product Credits and AISC, Before By-product Credits
include all direct and indirect operating cash costs related directly to
the physical activities of producing metals, including mining,
processing and other plant costs, third-party refining expense, on-site
general and administrative costs, royalties and mining production taxes.
AISC, Before By-product Credits for each mine also includes on-site
exploration, reclamation, and sustaining capital costs. AISC, Before
By-product Credits for our consolidated silver properties also includes
corporate costs for general and administrative expense, reclamation,
exploration, and pre-development. By-product credits include revenues
earned from all metals other than the primary metal produced at each
unit. As depicted in the tables below, by-product credits comprise an
essential element of our silver unit cost structure, distinguishing our
silver operations due to the polymetallic nature of their orebodies.
Cash Cost, After By-product Credits, per Ounce and AISC, After
By-product Credits, per Ounce provide management and investors an
indication of operating cash flow, after consideration of the average
price, received from production. We also use these measurements for the
comparative monitoring of performance of our mining operations
period-to-period from a cash flow perspective. Cash Cost, After
By-product Credits, per Ounce is a measure developed by precious metals
companies (including the Silver Institute) in an effort to provide a
uniform standard for comparison purposes. There can be no assurance,
however, that our reporting of these non-GAAP measures are the same as
those reported by other mining companies.
The Casa Berardi, Nevada Operations and combined gold properties
information below reports Cash Cost, After By-product Credits, per Gold
Ounce and AISC, After By-product Credits, per Gold Ounce for the
production of gold, its primary product, and by-product revenues earned
from silver, which is a by-product at Casa Berardi and Nevada
Operations. Only costs and ounces produced relating to units with the
same primary product are combined to represent Cash Cost, After
By-product Credits, per Ounce and AISC, After By-product Credits, per
Ounce. Thus, the gold produced at our Casa Berardi and Nevada Operations
units is not included as a by-product credit when calculating Cash Cost,
After By-product Credits, per Silver Ounce and AISC, After By-product
Credits, per Silver Ounce for the total of Greens Creek, Lucky Friday
and San Sebastian, our combined silver properties. Similarly, the silver
produced at our other three units is not included as a by-product credit
when calculating the gold metrics for Casa Berardi and Nevada Operations.
|
In thousands (except per ounce amounts)
|
|
Three Months Ended March 31, 2019
|
|
|
|
Greens
Creek
|
|
Lucky
Friday(2)
|
|
San
Sebastian
|
|
Corporate(3)
|
|
Total
Silver
|
|
Cost of sales and other direct production costs and depreciation,
depletion and amortization
|
|
$
|
54,113
|
|
|
$
|
2,181
|
|
|
$
|
12,351
|
|
|
|
|
$
|
68,645
|
|
|
Depreciation, depletion and amortization
|
|
(12,370
|
)
|
|
(169
|
)
|
|
(1,760
|
)
|
|
|
|
(14,299
|
)
|
|
Treatment costs
|
|
10,352
|
|
|
810
|
|
|
131
|
|
|
|
|
11,293
|
|
|
Change in product inventory
|
|
(3,865
|
)
|
|
1,483
|
|
|
(853
|
)
|
|
|
|
(3,235
|
)
|
|
Reclamation and other costs
|
|
(415
|
)
|
|
—
|
|
|
(312
|
)
|
|
|
|
(727
|
)
|
|
Exclusion of Lucky Friday costs
|
|
—
|
|
|
(4,305
|
)
|
|
—
|
|
|
|
|
(4,305
|
)
|
|
Cash Cost, Before By-product Credits (1)
|
|
47,815
|
|
|
—
|
|
|
9,557
|
|
|
|
|
57,372
|
|
|
Reclamation and other costs
|
|
737
|
|
|
—
|
|
|
123
|
|
|
|
|
860
|
|
|
Exploration
|
|
81
|
|
|
—
|
|
|
1,717
|
|
|
441
|
|
2,239
|
|
|
Sustaining capital
|
|
5,312
|
|
|
—
|
|
|
506
|
|
|
61
|
|
5,879
|
|
|
General and administrative
|
|
|
|
|
|
|
|
9,959
|
|
9,959
|
|
|
AISC, Before By-product Credits (1)
|
|
53,945
|
|
|
—
|
|
|
11,903
|
|
|
|
|
76,309
|
|
|
By-product credits:
|
|
|
|
|
|
|
|
|
|
|
|
Zinc
|
|
(23,285
|
)
|
|
—
|
|
|
—
|
|
|
|
|
(23,285
|
)
|
|
Gold
|
|
(16,518
|
)
|
|
—
|
|
|
(4,602
|
)
|
|
|
|
(21,120
|
)
|
|
Lead
|
|
(6,917
|
)
|
|
—
|
|
|
—
|
|
|
|
|
(6,917
|
)
|
|
Total By-product credits
|
|
(46,720
|
)
|
|
—
|
|
|
(4,602
|
)
|
|
|
|
(51,322
|
)
|
|
Cash Cost, After By-product Credits
|
|
$
|
1,095
|
|
|
$
|
—
|
|
|
$
|
4,955
|
|
|
|
|
$
|
6,050
|
|
|
AISC, After By-product Credits
|
|
$
|
7,225
|
|
|
$
|
—
|
|
|
$
|
7,301
|
|
|
|
|
$
|
24,987
|
|
|
Divided by ounces produced
|
|
2,233
|
|
|
—
|
|
|
441
|
|
|
|
|
2,674
|
|
|
Cash Cost, Before By-product Credits, per Ounce
|
|
$
|
21.41
|
|
|
$
|
—
|
|
|
$
|
21.67
|
|
|
|
|
$
|
21.45
|
|
|
By-product credits per ounce
|
|
(20.92
|
)
|
|
—
|
|
|
(10.44
|
)
|
|
|
|
(19.19
|
)
|
|
Cash Cost, After By-product Credits, per Ounce
|
|
$
|
0.49
|
|
|
$
|
—
|
|
|
$
|
11.23
|
|
|
|
|
$
|
2.26
|
|
|
AISC, Before By-product Credits, per Ounce
|
|
$
|
24.16
|
|
|
$
|
—
|
|
|
$
|
26.99
|
|
|
|
|
$
|
28.53
|
|
|
By-product credits per ounce
|
|
(20.92
|
)
|
|
—
|
|
|
(10.44
|
)
|
|
|
|
(19.19
|
)
|
|
AISC, After By-product Credits, per Ounce
|
|
$
|
3.24
|
|
|
$
|
—
|
|
|
$
|
16.55
|
|
|
|
|
$
|
9.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In thousands (except per ounce amounts)
|
|
Three Months Ended March 31, 2019
|
|
|
|
Casa Berardi
|
|
Nevada
Operations (4)
|
|
Total Gold
|
|
Cost of sales and other direct production costs and depreciation,
depletion and amortization
|
|
$
|
49,081
|
|
|
$
|
31,447
|
|
|
$
|
80,528
|
|
|
Depreciation, depletion and amortization
|
|
(16,155
|
)
|
|
(8,333
|
)
|
|
(24,488
|
)
|
|
Treatment costs
|
|
442
|
|
|
38
|
|
|
480
|
|
|
Change in product inventory
|
|
2,268
|
|
|
(3,246
|
)
|
|
(978
|
)
|
|
Reclamation and other costs
|
|
(129
|
)
|
|
(379
|
)
|
|
(508
|
)
|
|
Cash Cost, Before By-product Credits (1)
|
|
35,507
|
|
|
19,527
|
|
|
55,034
|
|
|
Reclamation and other costs
|
|
129
|
|
|
378
|
|
|
507
|
|
|
Exploration
|
|
1,346
|
|
|
118
|
|
|
1,464
|
|
|
Sustaining capital
|
|
5,692
|
|
|
12,707
|
|
|
18,399
|
|
|
General and administrative
|
|
|
|
|
|
—
|
|
|
AISC, Before By-product Credits (1)
|
|
42,674
|
|
|
32,730
|
|
|
75,404
|
|
|
By-product credits:
|
|
|
|
|
|
|
|
Zinc
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Gold
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Lead
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Silver
|
|
(126
|
)
|
|
(1,057
|
)
|
|
(1,183
|
)
|
|
Total By-product credits
|
|
(126
|
)
|
|
(1,057
|
)
|
|
(1,183
|
)
|
|
Cash Cost, After By-product Credits
|
|
$
|
35,381
|
|
|
$
|
18,470
|
|
|
$
|
53,851
|
|
|
AISC, After By-product Credits
|
|
$
|
42,548
|
|
|
$
|
31,673
|
|
|
$
|
74,221
|
|
|
Divided by ounces produced
|
|
32
|
|
|
10
|
|
|
42
|
|
|
Cash Cost, Before By-product Credits, per Ounce
|
|
$
|
1,116.59
|
|
|
$
|
1,884.17
|
|
|
$
|
1,305.27
|
|
|
By-product credits per ounce
|
|
(3.96
|
)
|
|
(101.99
|
)
|
|
(28.06
|
)
|
|
Cash Cost, After By-product Credits, per Ounce
|
|
$
|
1,112.63
|
|
|
$
|
1,782.18
|
|
|
$
|
1,277.21
|
|
|
AISC, Before By-product Credits, per Ounce
|
|
$
|
1,341.95
|
|
|
$
|
3,158.05
|
|
|
$
|
1,788.37
|
|
|
By-product credits per ounce
|
|
(3.96
|
)
|
|
(101.99
|
)
|
|
(28.06
|
)
|
|
AISC, After By-product Credits, per Ounce
|
|
$
|
1,337.99
|
|
|
$
|
3,056.06
|
|
|
$
|
1,760.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In thousands (except per ounce amounts)
|
|
Three Months Ended March 31, 2019
|
|
|
|
Total Silver
|
|
Total Gold
|
|
Total
|
|
Cost of sales and other direct production costs and depreciation,
depletion and amortization
|
|
$
|
68,645
|
|
|
$
|
80,528
|
|
|
$
|
149,173
|
|
|
Depreciation, depletion and amortization
|
|
(14,299
|
)
|
|
(24,488
|
)
|
|
(38,787
|
)
|
|
Treatment costs
|
|
11,293
|
|
|
480
|
|
|
11,773
|
|
|
Change in product inventory
|
|
(3,235
|
)
|
|
(978
|
)
|
|
(4,213
|
)
|
|
Reclamation and other costs
|
|
(727
|
)
|
|
(508
|
)
|
|
(1,235
|
)
|
|
Exclusion of Lucky Friday costs
|
|
(4,305
|
)
|
|
—
|
|
|
(4,305
|
)
|
|
Cash Cost, Before By-product Credits (1)
|
|
57,372
|
|
|
55,034
|
|
|
112,406
|
|
|
Reclamation and other costs
|
|
860
|
|
|
507
|
|
|
1,367
|
|
|
Exploration
|
|
2,239
|
|
|
1,464
|
|
|
3,703
|
|
|
Sustaining capital
|
|
5,879
|
|
|
18,399
|
|
|
24,278
|
|
|
General and administrative
|
|
9,959
|
|
|
—
|
|
|
9,959
|
|
|
AISC, Before By-product Credits (1)
|
|
76,309
|
|
|
75,404
|
|
|
151,713
|
|
|
By-product credits:
|
|
|
|
|
|
|
|
Zinc
|
|
(23,285
|
)
|
|
—
|
|
|
(23,285
|
)
|
|
Gold
|
|
(21,120
|
)
|
|
—
|
|
|
(21,120
|
)
|
|
Lead
|
|
(6,917
|
)
|
|
—
|
|
|
(6,917
|
)
|
|
Silver
|
|
—
|
|
|
(1,183
|
)
|
|
(1,183
|
)
|
|
Total By-product credits
|
|
(51,322
|
)
|
|
(1,183
|
)
|
|
(52,505
|
)
|
|
Cash Cost, After By-product Credits
|
|
$
|
6,050
|
|
|
$
|
53,851
|
|
|
$
|
59,901
|
|
|
AISC, After By-product Credits
|
|
$
|
24,987
|
|
|
$
|
74,221
|
|
|
$
|
99,208
|
|
|
Divided by ounces produced
|
|
2,674
|
|
|
42
|
|
|
|
|
Cash Cost, Before By-product Credits, per Ounce
|
|
$
|
21.45
|
|
|
$
|
1,305.27
|
|
|
|
|
By-product credits per ounce
|
|
(19.19
|
)
|
|
(28.06
|
)
|
|
|
|
Cash Cost, After By-product Credits, per Ounce
|
|
$
|
2.26
|
|
|
$
|
1,277.21
|
|
|
|
|
AISC, Before By-product Credits, per Ounce
|
|
$
|
28.53
|
|
|
$
|
1,788.37
|
|
|
|
|
By-product credits per ounce
|
|
(19.19
|
)
|
|
(28.06
|
)
|
|
|
|
AISC, After By-product Credits, per Ounce
|
|
$
|
9.34
|
|
|
$
|
1,760.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In thousands (except per ounce amounts)
|
|
Three Months Ended March 31, 2018
|
|
|
|
Greens
Creek
|
|
Lucky
Friday(2)
|
|
San
Sebastian
|
|
Corporate(3)
|
|
Total
Silver
|
|
Casa
Berardi
(Gold)
|
|
Total
|
|
Cost of sales and other direct production costs and depreciation,
depletion and amortization
|
|
$
|
41,861
|
|
|
$
|
4,100
|
|
|
$
|
5,775
|
|
|
|
|
$
|
51,736
|
|
|
$
|
49,187
|
|
|
$
|
100,923
|
|
|
Depreciation, depletion and amortization
|
|
(10,639
|
)
|
|
(621
|
)
|
|
(684
|
)
|
|
|
|
(11,944
|
)
|
|
(16,110
|
)
|
|
(28,054
|
)
|
|
Treatment costs
|
|
11,388
|
|
|
572
|
|
|
204
|
|
|
|
|
12,164
|
|
|
535
|
|
|
12,699
|
|
|
Change in product inventory
|
|
5,154
|
|
|
(1,022
|
)
|
|
2,638
|
|
|
|
|
6,770
|
|
|
(101
|
)
|
|
6,669
|
|
|
Reclamation and other costs
|
|
(912
|
)
|
|
(45
|
)
|
|
(494
|
)
|
|
|
|
(1,451
|
)
|
|
(142
|
)
|
|
(1,593
|
)
|
|
Exclusion of Lucky Friday costs
|
|
—
|
|
|
(2,984
|
)
|
|
—
|
|
|
|
|
(2,984
|
)
|
|
—
|
|
|
(2,984
|
)
|
|
Cash Cost, Before By-product Credits (1)
|
|
46,852
|
|
|
—
|
|
|
7,439
|
|
|
|
|
54,291
|
|
|
33,369
|
|
|
87,660
|
|
|
Reclamation and other costs
|
|
849
|
|
|
—
|
|
|
106
|
|
|
|
|
955
|
|
|
143
|
|
|
1,098
|
|
|
Exploration
|
|
360
|
|
|
—
|
|
|
2,312
|
|
|
444
|
|
3,116
|
|
|
1,190
|
|
|
4,306
|
|
|
Sustaining capital
|
|
9,482
|
|
|
—
|
|
|
430
|
|
|
117
|
|
10,029
|
|
|
9,067
|
|
|
19,096
|
|
|
General and administrative
|
|
|
|
|
|
|
|
7,735
|
|
7,735
|
|
|
|
|
7,735
|
|
|
AISC, Before By-product Credits (1)
|
|
57,543
|
|
|
—
|
|
|
10,287
|
|
|
|
|
76,126
|
|
|
43,769
|
|
|
119,895
|
|
|
By-product credits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Zinc
|
|
(32,142
|
)
|
|
—
|
|
|
—
|
|
|
|
|
(32,142
|
)
|
|
—
|
|
|
(32,142
|
)
|
|
Gold
|
|
(15,292
|
)
|
|
—
|
|
|
(5,998
|
)
|
|
|
|
(21,290
|
)
|
|
—
|
|
|
(21,290
|
)
|
|
Lead
|
|
(8,974
|
)
|
|
—
|
|
|
—
|
|
|
|
|
(8,974
|
)
|
|
—
|
|
|
(8,974
|
)
|
|
Silver
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
(148
|
)
|
|
(148
|
)
|
|
Total By-product credits
|
|
(56,408
|
)
|
|
—
|
|
|
(5,998
|
)
|
|
|
|
(62,406
|
)
|
|
(148
|
)
|
|
(62,554
|
)
|
|
Cash Cost, After By-product Credits
|
|
$
|
(9,556
|
)
|
|
$
|
—
|
|
|
$
|
1,441
|
|
|
|
|
$
|
(8,115
|
)
|
|
$
|
33,221
|
|
|
$
|
25,106
|
|
|
AISC, After By-product Credits
|
|
$
|
1,135
|
|
|
$
|
—
|
|
|
$
|
4,289
|
|
|
|
|
$
|
13,720
|
|
|
$
|
43,621
|
|
|
$
|
57,341
|
|
|
Divided by ounces produced
|
|
1,913
|
|
|
—
|
|
|
512
|
|
|
|
|
2,425
|
|
|
40
|
|
|
|
|
Cash Cost, Before By-product Credits, per Ounce
|
|
$
|
24.49
|
|
|
$
|
—
|
|
|
$
|
14.52
|
|
|
|
|
$
|
22.38
|
|
|
$
|
831
|
|
|
|
|
By-product credits per ounce
|
|
(29.48
|
)
|
|
—
|
|
|
(11.71
|
)
|
|
|
|
(25.73
|
)
|
|
(4
|
)
|
|
|
|
Cash Cost, After By-product Credits, per Ounce
|
|
$
|
(4.99
|
)
|
|
$
|
—
|
|
|
$
|
2.81
|
|
|
|
|
$
|
(3.35
|
)
|
|
$
|
827
|
|
|
|
|
AISC, Before By-product Credits, per Ounce
|
|
$
|
30.07
|
|
|
$
|
—
|
|
|
$
|
20.08
|
|
|
|
|
$
|
31.39
|
|
|
$
|
1,090
|
|
|
|
|
By-product credits per ounce
|
|
(29.48
|
)
|
|
—
|
|
|
(11.71
|
)
|
|
|
|
(25.73
|
)
|
|
(4
|
)
|
|
|
|
AISC, After By-product Credits, per Ounce
|
|
$
|
0.59
|
|
|
$
|
—
|
|
|
$
|
8.37
|
|
|
|
|
$
|
5.66
|
|
|
$
|
1,086
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In thousands (except per ounce amounts)
|
|
Estimated Twelve Months Ended December 31, 2019
|
|
|
|
Greens
Creek
|
|
Lucky
Friday(2)
|
|
San
Sebastian
|
|
Corporate(3)
|
|
Total
Silver
|
|
Casa
Berardi
(Gold)
|
|
Cost of sales and other direct production costs and depreciation,
depletion and amortization
|
|
$
|
202,000
|
|
|
|
|
|
|
$
|
41,000
|
|
|
|
|
$
|
243,000
|
|
|
$
|
210.000
|
|
|
Depreciation, depletion and amortization
|
|
(45,000
|
)
|
|
|
|
|
(4,000
|
)
|
|
|
|
(49,000
|
)
|
|
(80,000
|
)
|
|
Treatment costs
|
|
38,000
|
|
|
|
|
|
1,000
|
|
|
|
|
39,000
|
|
|
|
|
|
Change in product inventory
|
|
(1,000
|
)
|
|
|
|
|
—
|
|
|
|
|
(1,000
|
)
|
|
(2,000
|
)
|
|
Reclamation and other costs
|
|
(1,000
|
)
|
|
|
|
|
(1,000
|
)
|
|
|
|
(2,000
|
)
|
|
1,000
|
|
|
Cash Cost, Before By-product Credits (1)
|
|
193,000
|
|
|
|
|
|
37,000
|
|
|
|
|
230,000
|
|
|
129,000
|
|
|
Reclamation and other costs
|
|
1,000
|
|
|
|
|
|
1,000
|
|
|
|
|
2,000
|
|
|
1,000
|
|
|
Exploration
|
|
2,000
|
|
|
|
|
|
3,500
|
|
|
|
|
5,500
|
|
|
4,000
|
|
|
Sustaining capital
|
|
42,000
|
|
|
|
|
|
1,500
|
|
|
|
|
43,500
|
|
|
43,000
|
|
|
General and administrative
|
|
—
|
|
|
|
—
|
|
40,000
|
|
40,000
|
|
|
—
|
|
AISC, Before By-product Credits (1)
|
|
238,000
|
|
|
|
|
|
43,000
|
|
|
|
|
321,000
|
|
|
177,000
|
|
|
By-product credits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Zinc
|
|
(109,000
|
)
|
|
|
|
|
—
|
|
|
|
|
(109,000
|
)
|
|
—
|
|
|
Gold
|
|
(55,000
|
)
|
|
|
|
|
(19,000
|
)
|
|
|
|
(74,000
|
)
|
|
—
|
|
|
Lead
|
|
(34,000
|
)
|
|
|
|
|
—
|
|
|
|
|
(34,000
|
)
|
|
—
|
|
|
Silver
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(2,000
|
)
|
|
Total By-product credits
|
|
(198,000
|
)
|
|
|
|
|
(19,000
|
)
|
|
|
|
(217,000
|
)
|
|
(2,000
|
)
|
|
Cash Cost, After By-product Credits
|
|
$
|
(5,000
|
)
|
|
|
|
|
|
$
|
18,000
|
|
|
|
|
$
|
13,000
|
|
|
$
|
127,000
|
|
|
AISC, After By-product Credits
|
|
$
|
40,000
|
|
|
|
|
|
|
$
|
24,000
|
|
|
|
|
$
|
104,000
|
|
|
$
|
175,000
|
|
|
Divided by ounces produced
|
|
7,700
|
|
|
|
|
|
2,000
|
|
|
|
|
9,700
|
|
|
150
|
|
|
Cash Cost, Before By-product Credits, per Ounce
|
|
$
|
25.06
|
|
|
|
|
|
|
$
|
18.50
|
|
|
|
|
$
|
23.71
|
|
|
$
|
860
|
|
|
By-product credits per ounce
|
|
(25.71
|
)
|
|
|
|
|
(9.50
|
)
|
|
|
|
(22.37
|
)
|
|
(13
|
)
|
|
Cash Cost, After By-product Credits, per Ounce
|
|
$
|
(0.65
|
)
|
|
|
|
|
|
$
|
9.00
|
|
|
|
|
$
|
1.34
|
|
|
$
|
847
|
|
|
AISC, Before By-product Credits, per Ounce
|
|
$
|
30.91
|
|
|
|
|
|
|
$
|
21.50
|
|
|
|
|
$
|
33.09
|
|
|
$
|
1,180
|
|
|
By-product credits per ounce
|
|
(25.71
|
)
|
|
|
|
|
(9.50
|
)
|
|
|
|
(22.37
|
)
|
|
(13
|
)
|
|
AISC, After By-product Credits, per Ounce
|
|
$
|
5.20
|
|
|
|
|
|
|
$
|
12.00
|
|
|
|
|
$
|
10.72
|
|
|
$
|
1,167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes all direct and indirect operating costs related
directly to the physical activities of producing metals, including
mining, processing and other plant costs, third-party refining and
marketing expense, on-site general and administrative costs,
royalties and mining production taxes, after by-product revenues
earned from all metals other than the primary metal produced at each
unit. AISC, Before By-product Credits also includes on-site
exploration, reclamation, and sustaining capital cost.
|
|
|
|
(2) The unionized employees at Lucky Friday have been on strike
since March 13, 2017, and production at Lucky Friday has been
limited since that time. As a result, for the first quarter of 2018
Cash Cost, Before By-product Credits, Cash Cost, After By-product
Credits, AISC, Before By-product Credits, and AISC, After By-product
Credits are not presented for Lucky Friday, and costs related to the
limited production at Lucky Friday are excluded from the calculation
of Cash Cost, Before By-product Credits, Cash Cost, After By-product
Credits, AISC, Before By-product Credits, and AISC, After By-product
Credits for our combined silver operations.
|
|
|
|
(3) AISC, Before By-product Credits for our consolidated silver
properties includes corporate costs for general and administrative
expense, exploration and sustaining capital.
|
|
|
|
(4) The Nevada Operations were acquired on July 20, 2018 as a
result of the acquisition of Klondex.
|
|
|
Reconciliation of Net (Loss) Income Applicable to Common Stockholders
(GAAP) to Adjusted Net (Loss) Income Applicable to Common Stockholders
(non-GAAP)
This release refers to a non-GAAP measure of adjusted net (loss) income
applicable to common stockholders and adjusted net (loss) income per
share, which are indicators of our performance. They exclude certain
impacts which are of a nature which we believe are not reflective of our
underlying performance. Management believes that adjusted net (loss)
income per common share provides investors with the ability to better
evaluate our underlying operating performance.
|
Dollars are in thousands (except per share amounts)
|
|
Three Months Ended March 31,
|
|
|
|
2019
|
|
2018
|
|
Net (loss) income applicable to common stockholders (GAAP)
|
|
$
|
(25,671
|
)
|
|
$
|
8,102
|
|
|
Adjusting items:
|
|
|
|
|
|
Loss (gain) on derivatives contracts
|
|
1,799
|
|
|
(4,007
|
)
|
|
Suspension costs
|
|
2,778
|
|
|
5,017
|
|
|
Provisional price (gains) losses
|
|
(524
|
)
|
|
65
|
|
|
Net foreign exchange loss (gain)
|
|
3,133
|
|
|
(2,592
|
)
|
|
Gain on disposition of properties, plants, equipment and mineral
interests
|
|
—
|
|
|
(129
|
)
|
|
Acquisition costs
|
|
13
|
|
|
2,507
|
|
|
Adjusted net (loss) income applicable to common stockholders
|
|
$
|
(18,472
|
)
|
|
$
|
8,963
|
|
|
Weighted average shares - basic
|
|
482,829
|
|
|
399,322
|
|
|
Weighted average shares - diluted
|
|
482,829
|
|
|
401,923
|
|
|
Basic and diluted adjusted net (loss) income per common share
|
|
$
|
(0.04
|
)
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net (Loss) Income (GAAP) and Debt (GAAP) to
Adjusted EBITDA (non-GAAP) and Net Debt (non-GAAP)
This release refers to the non-GAAP measures of adjusted earnings before
interest, taxes, depreciation and amortization ("Adjusted EBITDA"),
which is a measure of our operating performance, and net debt to
adjusted EBITDA for the last 12 months (or "LTM adjusted EBITDA"), which
is a measure of our ability to service our debt. Adjusted EBITDA is
calculated as net (loss) income before the following items: interest
expense, income tax (benefit) provision, depreciation, depletion, and
amortization expense, exploration expense, pre-development expense,
acquisition costs, foreign exchange gains and losses, unrealized gains
and losses on derivative contracts, suspension-related costs,
acquisition costs, provisional price gains and losses, stock-based
compensation, unrealized gains on investments, provisions for closed
operations, and interest and other income (expense). Net debt is
calculated as total debt, which consists of the liability balances for
our Senior Notes and Notes, capital leases, and notes payable, less the
total of our cash and cash equivalents and short-term investments.
Management believes that, when presented in conjunction with comparable
GAAP measures, Adjusted EBITDA and net debt to LTM adjusted EBITDA are
useful to investors in evaluating our operating performance and ability
to meet our debt obligations. The following table reconciles net (loss)
income and debt to Adjusted EBITDA and net debt:
|
Dollars are in thousands
|
|
Three Months Ended
March 31,
|
|
Twelve Months Ended
March 31,
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Net (loss) income
|
|
$
|
(25,533
|
)
|
|
$
|
8,240
|
|
|
$
|
(60,336
|
)
|
|
$
|
(45,362
|
)
|
|
Plus: Interest expense
|
|
10,665
|
|
|
9,794
|
|
|
41,815
|
|
|
39,284
|
|
|
Plus: Income taxes
|
|
(7,216
|
)
|
|
768
|
|
|
(14,685
|
)
|
|
50,531
|
|
|
Plus: Depreciation, depletion and amortization
|
|
38,787
|
|
|
28,054
|
|
|
144,777
|
|
|
118,218
|
|
|
Plus: Exploration expense
|
|
4,402
|
|
|
7,360
|
|
|
32,737
|
|
|
26,356
|
|
|
Plus: Pre-development expense
|
|
856
|
|
|
1,005
|
|
|
4,738
|
|
|
5,201
|
|
|
Plus: Acquisition costs
|
|
13
|
|
|
2,507
|
|
|
7,551
|
|
|
2,505
|
|
|
Plus/(Less): Foreign exchange loss (gain)
|
|
3,133
|
|
|
(2,592
|
)
|
|
(4,585
|
)
|
|
4,828
|
|
|
Plus/(Less): Loss (gain) on derivative contracts
|
|
1,799
|
|
|
(6,654
|
)
|
|
517
|
|
|
4,555
|
|
|
Plus: Suspension costs
|
|
2,778
|
|
|
5,017
|
|
|
18,454
|
|
|
24,737
|
|
|
Less: Gain on disposition of properties, plants, equipment and
mineral interests
|
|
—
|
|
|
(129)
|
|
|
(2,664
|
)
|
|
(6,171
|
)
|
|
Plus/(Less): Provisional price losses (gains)
|
|
(524
|
)
|
|
65
|
|
|
3,214
|
|
|
(50
|
)
|
|
Plus: Stock-based compensation
|
|
1,580
|
|
|
1,090
|
|
|
6,732
|
|
|
6,072
|
|
|
Plus: Provision for closed operations and environmental matters
|
|
1,594
|
|
|
1,323
|
|
|
6,361
|
|
|
4,805
|
|
|
Plus/(Less): Unrealized loss (gain) on investments
|
|
(96
|
)
|
|
(310
|
)
|
|
3,030
|
|
|
264
|
|
|
Plus/(Less): Other
|
|
1,124
|
|
|
56
|
|
|
2,009
|
|
|
(1,312
|
)
|
|
Adjusted EBITDA
|
|
$
|
33,362
|
|
|
$
|
55,723
|
|
|
$
|
189,665
|
|
|
$
|
234,461
|
|
|
Total debt
|
|
|
|
|
|
$
|
548,883
|
|
|
$
|
546,329
|
|
|
Less: Cash, cash equivalents and short-term investments
|
|
|
|
|
|
$
|
(11,797
|
)
|
|
$
|
(246,927
|
)
|
|
Net debt
|
|
|
|
|
|
$
|
537,086
|
|
|
$
|
299,402
|
|
|
Net debt/LTM adjusted EBITDA (non-GAAP)
|
|
|
|
|
|
2.8
|
|
1.3
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20190509005325/en/
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