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Hecla Reports First Quarter 2022 Results

HL

8th consecutive quarter of free cash flow generation

The Period Ended: March 31, 2022
For Release: May 10, 2022

Hecla Mining Company (NYSE:HL) (Hecla or the Company) today announced first quarter 2022 financial and operating results.

FIRST QUARTER HIGHLIGHTS

Operational

  • Silver production of 3.3 million ounces, a 3% increase over fourth quarter 2021.
  • The Company's silver mines reported total cost of sales of $78.9 million and cash cost and AISC per silver ounce (each after by-product credits) of $1.09 and $7.64 respectively.1,2

Financial

  • Sales of $186.5 million, a slight increase over fourth quarter 2021.
  • Cash provided by operating activities of $37.9 million and $16.4 million of quarterly free cash flowafter semi-annual interest payment of $18.5 million on outstanding long-term debt.3
  • Income applicable to common shareholders of $4.0 million, or $0.01 per share (basic).
  • Returned 21% of free cash flow to our common and preferred shareholders through dividends.
  • Credit ratings upgraded to B1 and B+ by Moody’s and S&P, respectively.

“All of our mines generated positive free cash flow despite inflationary cost pressures, slow supply chains, and some COVID-19 related labor challenges,” said Phillips S. Baker Jr., President and CEO. “Hecla, the largest silver producer in the U.S., is also the country’s third largest zinc miner, and by-products contributed to the silver mines’ strong performance and help offset inflationary pressure. Over the last eight quarters, we have generated $434 million in cash flow from operations and this quarter marked our eighth consecutive quarter of free cash flow, with $232 million generated over that period. This strong, consistent performance has strengthened our balance sheet and led to credit rating upgrades.”

Baker continued, “With strong grades and our innovative mining method at the Lucky Friday, we expect the mine’s quarterly silver production for the rest of the year to exceed one million ounces contributing to our increasing silver production profile. Growing U.S. silver production is particularly rewarding as demand for silver to generate green energy is growing and the need for domestically sourced metals is being understood because of the pandemic and the Ukrainian war.”

FINANCIAL OVERVIEW

“Total cost of sales” as used in this release is comprised of cost of sales and other direct production costs and depreciation, depletion and amortization.

In Thousands unless stated otherwise

Q1-2022

4Q-2021

3Q-2021

2Q-2021

1Q-2021

FY 2021

FINANCIAL AND PRODUCTION HIGHLIGHTS

Sales

$

186,499

$

185,078

$

193,560

$

217,983

$

210,852

$

807,473

Total cost of sales

$

141,070

$

131,837

$

158,332

$

156,052

$

143,451

$

589,672

Gross profit

$

45,429

$

53,241

$

35,228

$

61,931

$

67,401

$

217,801

Income (loss) applicable to common shareholders

$

4,015

$

11,737

$

(1,117

)

$

2,610

$

21,313

$

34,543

Basic income (loss) per common share (in dollars)

$

0.01

$

0.02

$

$

0.05

$

0.04

$

0.06

Adjusted EBITDA 4

$

58,199

$

58,249

$

49,414

$

84,507

$

86,610

$

278,780

Net Debt to Adjusted EBITDA4,*

1.2

1.1

Cash provided by operating activities

$

37,909

$

53,355

$

42,742

$

86,304

$

37,936

$

220,337

Capital Expenditures

$

(21,478

)

$

(28,838

)

$

(26,899

)

$

(31,898

)

$

(21,413

)

$

(109,048

)

Free Cash Flow 2

$

16,431

$

24,517

$

15,843

$

54,406

$

16,523

$

111,289

Silver ounces produced

3,324,708

3,226,927

2,676,084

3,524,783

3,459,446

12,887,240

Silver payable ounces sold

2,687,261

2,606,622

2,581,690

3,415,464

3,030,026

11,633,802

Gold ounces produced

41,642

47,977

42,207

59,139

52,004

201,327

Gold payable ounces sold

41,053

44,156

53,000

47,168

57,286

201,610

*Reflects trailing twelve months ending March 31, 2022. Reconciliations are available at the end of the release.

Income applicable to common shareholders for the first quarter was $4.0 million, or $0.01 per share, compared to $11.7 million, or $0.02 per share, in the fourth quarter of 2021 (“the prior quarter”), and was impacted by the following factors:

  • Gross profit decreased by $7.8 million due primarily to higher mining costs at Casa Berardi resulting from inflationary pressures and increased used of contractors.
  • An income tax provision of $5.6 million for U.S. and foreign jurisdiction income and mining taxes impacted by non-recognition of net operating losses in Nevada compared to a benefit of $25.6 million in the prior quarter primarily due to the release of the valuation allowance on the Hecla U.S. group deferred tax assets.
  • A net foreign exchange loss of $2.0 million versus a net gain of $0.4 million in the prior quarter primarily due to strengthening of the Canadian dollar against the U.S. dollar.
  • Higher general and administrative expense by $1.7 million due to higher incentive compensation accruals.

These decreases were partially offset by:

  • Net gains from fair value adjustments of $6.0 million versus net losses of $25.1 million in the prior quarter primarily due to unrealized losses on base metal derivatives contracts incurred prior to their designation as hedges for accounting purposes effective November 1, 2021.
  • Provision for closed operations and environmental matters decreased by $1.4 million reflecting an accrual for increased costs at the legacy Troy mine in the prior quarter.

Cash provided by operating activities of $37.9 million decreased $15.4 million compared to the prior quarter, primarily due to negative working capital changes of $17.8 million mostly due to interest payments on the outstanding long-term debt.

Capital expenditures totaled $21.5 million, $7.3 million less than the prior quarter due to lower spending at Greens Creek and Casa Berardi, which spent $3.1 and $7.8 million respectively this quarter while Lucky Friday spent $9.7 million.

The impact of inflationary pressures, supply chain challenges, and manpower constraints due to various factors, including COVID-19, impacted each operation differently. Overall, the Company’s silver assets operated as planned with Greens Creek outperforming due to higher grades while Lucky Friday saw some production impact due to delays in equipment delivery. Although all operations were impacted by inflation, AISC for consolidated silver assets declined over the prior quarter as higher by-product credits and higher silver production more than offset the inflationary cost pressures. Casa Berardi saw the largest impact because it mines the greatest volume of material (approximately 8 times that of Greens Creek annually) and processes the largest volume of ore (approximately 1.8 times that of Greens Creek), therefore increases in the cost of fuel, steel, reagents, and other consumables have a greater impact on the mine. Casa Berardi was also constrained by the lack of available manpower due to competition for skilled workers in the Abitibi. The Company is monitoring and attempting to proactively mitigate the impact that inflation, supply chain delays, and lack of available manpower has on production and per ounce costs, and if current by-product credits continue, believes that it can successfully navigate these challenges.

Forward Sales Contracts for Base Metals and Foreign Currency

The Company uses financially settled forward sales contracts to manage exposures to changes in prices of zinc and lead. At March 31, 2022, the Company had contracts covering approximately 60% of the forecasted payable zinc production (through 2024) at an average price of $1.30 per pound, and 50% of the forecasted payable lead production (through 2024) at an average price of $0.99 per pound.

The Company manages Canadian dollar (CAD) exposure through forward contracts. At March 31, 2022, the Company had hedged approximately 35% of forecasted CAD direct production costs through 2025 at an average CAD/USD rate of 1.30. The Company has also hedged approximately 27% of capital costs for 2022 at 1.29.

OPERATIONS OVERVIEW

Greens Creek Mine - Alaska

Dollars are in thousands except cost per ton

1Q-2022

4Q-2021

3Q-2021

2Q-2021

1Q-2021

FY 2021

GREENS CREEK

Tons of ore processed

211,687

221,814

211,142

214,931

194,080

841,967

Total production cost per ton

$

192.16

$

174.55

$

181.60

$

171.13

$

182.61

$

177.30

Ore grade milled - Silver (oz./ton)

13.84

12.60

11.14

14.52

16.01

13.51

Ore grade milled - Gold (oz./ton)

0.07

0.07

0.07

0.08

0.09

0.08

Ore grade milled - Lead (%)

2.76

2.61

2.68

3.14

3.06

2.87

Ore grade milled - Zinc (%)

6.56

6.28

7.05

7.57

7.62

7.11

Silver produced (oz.)

2,429,782

2,262,635

1,837,270

2,558,447

2,584,870

9,243,222

Gold produced (oz.)

11,402

10,229

9,734

12,859

13,266

46,088

Lead produced (tons)

4,883

4,731

4,591

5,627

4,924

19,873

Zinc produced (tons)

12,494

12,457

13,227

14,610

13,354

53,648

Sales

$

86,090

$

87,865

$

84,806

$

113,763

$

98,409

$

384,843

Total cost of sales

$

(49,638

)

$

(49,251

)

$

(55,193

)

$

(55,488

)

$

(53,181

)

$

(213,113

)

Gross profit

$

36,452

$

38,614

$

29,613

$

58,275

$

45,228

$

171,730

Cash flow from operations

$

56,295

$

50,632

$

40,626

$

68,521

$

44,345

$

204,124

Exploration

$

165

$

696

$

2,472

$

1,300

$

123

$

4,591

Capital additions

$

(3,092

)

$

(9,544

)

$

(6,228

)

$

(6,339

)

$

(1,772

)

$

(23,883

Free cash flow 2

$

53,368

$

41,784

$

36,870

$

63,482

$

42,696

$

184,832

Total cost of sales for the first quarter 2022 was $49.6 million compared to $49.3 million in the prior quarter. Cash cost and AISC per silver ounce (each after by-product credits) were $(0.90) and $1.90, respectively, decreasing over prior quarter due to higher by-product credits and higher silver production due to higher mined grades. 1,2

Lucky Friday Mine - Idaho

Dollars are in thousands except cost per ton

1Q-2022

4Q-2021

3Q-2021

2Q-2021

1Q-2021

FY 2021

LUCKY FRIDAY

Tons of ore processed

77,725

80,097

78,227

82,442

81,071

321,837

Total production cost per ton

$

247.17

$

198.83

$

190.66

$

199.48

$

190.54

$

191.50

Ore grade milled - Silver (oz./ton)

12.04

12.54

11.21

11.60

11.18

11.64

Ore grade milled - Lead (%)

8.16

8.11

7.22

7.55

7.51

7.60

Ore grade milled - Zinc (%)

3.61

3.33

3.30

3.44

3.70

3.44

Silver produced (oz.)

887,858

955,401

831,532

913,294

863,901

3,564,128

Lead produced (tons)

5,980

6,131

5,313

5,913

5,780

23,137

Zinc produced (tons)

2,452

2,296

2,319

2,601

2,753

9,969

Sales

$

38,040

$

32,938

$

29,783

$

39,645

$

29,122

$

131,488

Total cost of sales

$

(29,264

)

$

(23,252

)

$

(23,591

)

$

(27,901

)

$

(22,794

)

$

(97,538

)

Gross profit

$

8,776

$

9,686

$

6,192

$

11,744

$

6,328

$

33,950

Cash flow from operations

$

11,765

$

16,953

$

15,017

$

19,681

$

10,943

$

62,594

Capital additions

$

(9,652

)

$

(9,109

)

$

(9,133

)

$

(5,731

)

$

(5,912

)

$

(29,885

)

Free cash flow 2

$

2,113

$

7,844

$

5,884

$

13,950

$

5,031

$

32,709

Total cost of sales for the first quarter 2022 was $29.3 million, an increase of $6.0 million over the prior quarter due to increased use of contractors resulting from manpower shortages, and higher maintenance costs related to underground mobile equipment. Cash cost and AISC per silver ounce (each after by-product credits) were $6.57 and $13.15, respectively, and increased over prior quarter due to higher total cost of sales and lower production.1,2

Casa Berardi Mine - Quebec

Dollars are in thousands except cost per ton

1Q-2022

4Q-2021

3Q-2021

2Q-2021

1Q-2021

FY 2021

CASA BERARDI

Tons of ore processed – underground

161,609

161,355

167,435

178,908

186,919

694,617

Tons of ore processed – surface pit

224,541

225,662

230,708

195,775

181,484

833,629

Tons of ore processed – total

386,150

387,017

398,143

374,683

368,403

1,528,246

Surface tons mined – ore and waste

1,586,118

1,507,457

1,483,231

2,033,403

1,991,087

7,015,178

Total production cost per ton

$

117.96

$

108.82

$

86.95

$

99.36

$

99.67

$

98.60

Ore grade milled – Gold (oz./ton) - underground

0.141

0.165

0.155

0.148

0.147

0.161

Ore grade milled – Gold (oz./ton) - surface pit

0.054

0.072

0.037

0.055

0.048

0.056

Ore grade milled – Gold (oz./ton) - combined

0.091

0.110

0.087

0.100

0.120

0.104

Ore grade milled – Silver (oz./ton)

0.02

0.02

0.02

0.03

0.04

0.03

Gold produced (oz.) – underground

19,374

22,910

24,170

23,441

27,569

98,090

Gold produced (oz.) – surface pit

10,866

14,356

5,552

7,892

8,621

36,421

Gold produced (oz.) – total

30,240

37,266

29,722

31,333

36,190

134,511

Silver produced (oz.) – total

7,068

7,967

7,012

7,917

10,675

33,571

Sales

$

62,101

$

60,054

$

56,065

$

56,122

$

72,911

$

245,152

Total cost of sales

$

(62,168

)

$

(57,069

)

$

(58,164

)

$

(54,669

)

$

(59,927

)

$

(229,829

)

Gross profit/(loss)

$

(67

)

$

2,985

$

(2,099

)

$

1,453

$

12,984

$

15,323

Cash flow from operations

$

8,089

$

10,029

$

17,058

$

15,756

$

30,948

$

73,791

Exploration

$

2,635

$

2,124

$

4,382

$

1,739

$

1,281

$

9,526

Capital additions

$

(7,808

)

$

(9,537

)

$

(11,488

)

$

(14,745

)

$

(13,847

)

$

(49,617

)

Free cash flow 2

$

2,916

$

2,616

$

9,952

$

2,750

$

18,382

$

33,700

Casa Berardi produced 30,240 ounces of gold compared to 37,266 ounces in the prior quarter. This represents a decrease of 19% due to lower grades milled as more material was sourced from the 160 pit. The mill continued to perform well, operating at an average of 4,291 tons per day (“tpd”) in the first quarter of 2022 compared to 4,207 tpd over prior quarter with availability exceeding 90% in both periods.

Total cost of sales for the first quarter 2022 was $62.2 million compared to $57.1 million in the prior quarter. The increase in total cost of sales was primarily due to inflationary cost pressures related to steel, reagents, fuel for mobile equipment, other consumables, and increased contractor costs across the operation due to a lack of manpower availability. Cash cost and AISC per gold ounce (each after by-product credits) increased by $379 per ounce and $340 per ounce over the prior quarter to $1,516 and $1,810, respectively, with the increase primarily driven by higher total cost of sales. 1,2

EXPLORATION AND PRE-DEVELOPMENT

Exploration and pre-development expenses totaled $12.8 million for the first quarter 2022. Exploration activities primarily focused on targets at Casa Berardi, Greens Creek, Nevada Operations, and San Sebastian.

Exploration highlights

  • Drilling from Casa Berardi’s ten drills continues to expand and upgrade resources while the first regional exploration sonic drilling identified alteration and geochemical vectors to guide exploration to mineralization undercover.
  • Greens Creek drilling continued with 3 drills to upgrade and expand resources in four of the nine zones.
  • Drilling at San Sebastian's La Roca target identified large new quartz carbonate vein systems up to 51.7 feet in true width.

At Casa Berardi, seven underground and three surface core drills focused on resource conversion and exploration drilling to upgrade and expand resources in the West, Principal, and East mine areas. Drilling in the West Mine targeted the eastern edge of the 113 Zone to define continuity and expand mineralization to the east and targeted the 118 Zone to define and expand mineralization in the 14 and 15 lenses up and down plunge and to the east. Highlights from this drilling include intercepts grading 0.55 oz/ton gold over 23.0 feet and 0.43 oz/ton gold over 12.1 feet, expanding and upgrading high-grade mineralization in the 113 Zone.

Drilling in the Principal Mine targeted the lower part of the 123 Zone and the extensions to the 124 and 134 zones. In the 123 Zone, drilling confirmed the eastern plunge of mineralization hosted within a chert and massive sulfide horizon crosscut by quartz veins where additional drilling is planned. Surface drilling targeting the area between the 124 and 134 zones focused on expanding and connecting mineralization between these two zones which could have a positive impact on future mining in the proposed Principal and 134 open pits. Highlights from this drilling include 0.05 oz/ton gold over 86.6 feet and 0.08 oz/ton gold over 31.4 feet.

Drilling in the East Mine targeted upgrading and expanding mineralization in the 146 and 148 zones. Results from the 146 Zone drilling indicate the original 146-09 lens is expanding into multiple stacked mineralized lenses characterized by pyrite and pyrrhotite bands within the sedimentary rocks located 300 feet south of the Casa Berardi Fault. Highlight assay results from the 146 Zone drilling contain 0.18 oz/ton gold over 11.5 feet which includes 0.70 oz/ton silver over 3.0 feet.

Sonic drilling at Casa Berardi began in January with one drill focused on testing three areas in the East, Central, and West blocks of our property package. The focus of this drilling is to test historical gold till overburden anomalies and core into the bedrock for gold and lithogeochemical analysis in addition to mapping alteration. Results to date indicate that sonic drilling is a very useful tool to identify vectors to mineralization under cover.

At Greens Creek, three underground core drills focused on resource conversion in the Southwest Bench, West, East, and 200 South ore zones and exploration in the East and Gallagher Fault Block zones. All assay results from the last of the 2021 drilling programs in the 9A and 200 South ore zones have been received confirming and expanding mineralization in both zones. Highlights from the 9A drilling include intercepts containing 18.3 oz/ton silver, 0.05 oz/ton gold, 2.8% zinc, and 1.6% lead over 20.7 feet and 7.4 oz/ton silver, 0.02 oz/ton gold, 6.8% zinc, and 3.0% lead over 41.5 feet. Drilling in the 200 South Zone targeted expanding and upgrading resources in the southern portions of the zone and highlights include intercepts containing 40.4 oz/ton silver, 0.43 oz/ton gold, 12.4% zinc and 4.7% lead over 5.7 feet and 25.1 oz/ton silver, 0.42 oz/ton gold, 4.2% zinc, and 2.0% lead over 10.5 feet.

At Nevada operations, drilling with three drill rigs at Midas has been focused on drill testing the prospectivity of the Racer structure within the East Graben Corridor along 1.7 miles of strike length at a drill hole spacing of approximately 1,000 feet and initial drill testing of the Vapor Trail structure.

At Hollister, exploration drilling continued in January and February from the second drill station of the Hatter Graben decline completing exploration drill hole HUC-112. In February, development drifting at the Hatter Graben exploration area encountered high water inflows which eventually halted development. As a result of this inflow, exploration drilling was suspended while water management options are being evaluated. Two exploration drill holes have been completed targeting multiple zones of narrow banded quartz veins and veinlets south of the existing resource. Recent assay results from these initial two drill holes show multiple narrow vein zones with intercepts including 0.10 oz/ton gold and 17.6 oz/ton silver over 0.6 feet estimated true thickness and 0.10 oz/ton gold and 3.1 oz/ton silver over 1.5 feet estimated true thickness.

Exploration at San Sebastian continues to advance drill testing multiple targets within the district in addition to expanding our SVRC (short vertical reverse circulation) drilling in areas under cover. Near the San Sebastian Mine Area, core drilling targeted the deeper portions of the past producing veins for silver dominant polymetallic mineralization. Recent assay results from this area include 4.9 oz/ton silver, 2.0% copper, 2.5% lead, 5.3% zinc over 1.6 feet from the West Francine Vein. Drilling at La Roca, interpreted to be an area where an entire epithermal vein system is preserved, discovered several large vein zones up to 51.7 feet true thickness, with anomalous silver with samples grading up to 10.5 oz/ton silver. These early drilling results are helping to define the orientations of the targeted vein structures and drilling now is focused on testing the favorable depth of mineralization, which is believed to be deeper than the current levels tested.

More complete drill assay highlights can be found in Table A at the end of the release.

DIVIDENDS

Common Stock

TheBoard of Directors declared a quarterly cash dividend of $0.00625 per share of common stock, consisting of $0.00375 per share for the minimum dividend component and $0.0025 per share for the silver-linked component. The common stock dividend is payable on or about June 10, 2022, to stockholders of record on May 25, 2022. The realized silver price was $24.68 per ounce in the first quarter satisfying the criterion for the silver-linked component under the Company's common stock dividend policy.

Preferred Stock

TheBoard of Directors elected to declare a quarterly cash dividend of $0.875 per share of preferred stock, payable on or about July 1, 2022, to stockholders of record on June 15, 2022.

CONFERENCE CALL AND WEBCAST

A conference call and webcast will be held Tuesday, May 10, at 10:00 a.m. Eastern Time to discuss these results. You may join the conference call by dialing toll-free 1-833-350-1380 or for international dialing 1-647-689-6934. The Conference ID is 1659347. Please dial-in and provide the Conference ID number at least 10 minutes prior to the start time to join the call and mitigate any hold times. Hecla's live and archived webcast can be accessed at www.hecla-mining.com under Investors/Events & Webcasts.

VIRTUAL INVESTOR EVENT

Hecla will be holding a Virtual Investor Event on Tuesday, May 10, from 11:00 a.m. to 12:30 p.m. Eastern Time.

Hecla invites shareholders, investors, and other interested parties to schedule a personal, 30-minute virtual meeting (video or telephone) with a member of senior management to discuss Operations, Exploration, or general matters. Click on the link below to schedule a call (or copy and paste the link into your web browser.) You can select a topic once you have entered the meeting calendar. If you are unable to book a time, either due to high demand or for other reasons, please reach out to Anvita M. Patil, Vice President - Investor Relations and Treasurer at amishra@hecla-mining.com or 208-769-4117.

One-on-One meeting URL: https://calendly.com/2022-may-vie

ABOUT HECLA

Founded in 1891, Hecla is the largest silver producer in the United States. In addition to operating mines in Alaska and Idaho, and Quebec, Canada, the Company owns a number of exploration and pre-development properties in world-class silver and gold mining districts throughout North America.

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 United States generally accepted accounting principles (GAAP). These measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The non-GAAP financial measures cited in this release and listed below are reconciled to their most comparable GAAP measure at the end of this release.

(1) Cash cost, after by-product credits, per silver and gold ounce is a non-GAAP measurement, a reconciliation of which to total cost of sales, 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 primary silver mining company, management also uses the statistic on an aggregate basis - aggregating the Greens Creek and Lucky Friday mines - to compare performance with that of other silver mining companies, and aggregating Casa Berardi and the Nevada operations, to compare its performance with other gold mining 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 nine-months of 2020, as production was limited due to the strike and subsequent ramp-up and results are not comparable to those from prior periods and are not indicative of future operating results under full production.

(2) 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 total cost of sales, 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.

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 (i) in the understanding of the economics of our operations and performance compared to other producers and (ii) in the transparency 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.

(3) Free cash flow is a non-GAAP measure calculated as cash provided by operating activities less additions to properties, plants and equipment. Cash provided by operating activities for the Greens Creek, Lucky Friday, Casa Berardi, and Nevada operating segments excludes exploration and pre-development expense, as it is a discretionary expenditure and not a component of the mines’ operating performance.

(4) Adjusted EBITDA is a non-GAAP measurement, a reconciliation of which to net income, 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, 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. Net debt to adjusted EBITDA is a non-GAAP measurement, a reconciliation of which to debt and net income (loss), the most comparable GAAP measurements, 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.

Numbers may be rounded.

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. When a forward-looking statement 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. Forward-looking statements often address our expected future business and financial performance and financial condition and often contain words such as “anticipate,” “intend,” “plan,” “will,” “could,” “would,” “estimate,” “should,” “expect,” “believe,” “project,” “target,” “indicative,” “preliminary,” “potential” and similar expressions. Forward-looking statements in this news release may include, without limitation: (i) the Lucky Friday mine may exceed 1 million ounces of quarterly silver production for the remainder of 2022; (ii) as demand for silver is expected to grow in the transition to a green economy, so will Hecla's role in a clean energy future; and (iii) the Company believes it will meet previously disclosed guidance on future production, sales, total cost of sales, cash costs, after by-product credits, AISC, after by-product credits and cash flows as well as estimated spending on capital, exploration and pre-development. The material factors or assumptions used to develop such forward-looking statements or forward-looking information include that 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, to which the Company’s operations are subject.

Estimates or expectations of future events or results are based upon certain assumptions, which may prove to be incorrect, which could cause actual results to differ from forward-looking statements. 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 USD/CAD and USD/MXN, 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; (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; (ix) counterparties performing their obligations under hedging instruments and put option contracts; (x) sufficient workforce is available and trained to perform assigned tasks; (xi) weather patterns and rain/snowfall within normal seasonal ranges so as not to impact operations; (xii) relations with interested parties, including Native Americans, remain productive; (xiii) economic terms can be reached with third-party mill operators who have capacity to process our ore; (xiv) maintaining availability of water rights; (xv) factors do not arise that reduce available cash balances; and (xvi) there being no material increases in our current requirements to post or maintain reclamation and performance bonds or collateral related thereto.

In addition, material risks that could cause actual results to differ from forward-looking statements include, but are not limited to: (i) gold, silver and other metals price volatility; (ii) operating risks; (iii) currency fluctuations; (iv) increased production costs and variances in ore grade or recovery rates from those assumed in mining plans; (v) community relations; (vi) conflict resolution and outcome of projects or oppositions; (vii) litigation, political, regulatory, labor and environmental risks; (viii) 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; (ix) the failure of counterparties to perform their obligations under hedging instruments; (x) we take a material impairment charge on our Nevada operations; (xi) we are unable to remain in compliance with all terms of the credit agreement in order to maintain continued access to the revolver, and (xii) we are unable to refinance the maturing senior notes. For a more detailed discussion of such risks and other factors, see the Company’s 2021 Form 10-K, filed on February 23, 2022, with the Securities and Exchange Commission (SEC), as well as the Company’s other SEC filings. The Company does not undertake any obligation to release publicly 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

This news release uses the terms “resource.” Mineral resources that are not mineral reserves do not have demonstrated economic viability. You should not assume that all or any part of measured or indicated mineral resources will ever be converted into mineral reserves. Further, inferred mineral resources have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically, and an inferred mineral resource may not be considered when assessing the economic viability of a mining project, and may not be converted to a mineral reserve. On October 31, 2018, the SEC adopted new mining disclosure rules (“S-K 1300”) that is more closely aligned with current industry and global regulatory practices and standards, including National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) which we comply with because we also are a “reporting issuer” under Canadian securities laws. While S-K 1300 is more closely aligned with NI 43-101 than the prior SEC mining disclosure rules, there are some differences. NI 43-101 is a rule developed by the Canadian Securities Administrators, which established standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Unless otherwise indicated, all resource and reserve estimates contained in this press release have been prepared in accordance with NI 43-101, as well as S-K 1300.

Qualified Person (QP)

Kurt D. Allen, MSc., CPG, VP - Exploration of Hecla Mining Company and Keith Blair, MSc., CPG, Chief Geologist of Hecla Limited, who serve as a Qualified Person under S-K 1300 and NI 43-101, supervised the preparation of the scientific and technical information concerning Hecla’s mineral projects in this news release. Technical Report Summaries (each a “TRS”) for each of the Company’s material properties are filed as exhibits 96.1, 96.2 and 96.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, and are available at www.sec.gov. Information regarding data verification, surveys and investigations, quality assurance program and quality control measures and a summary of analytical or testing procedures for the Greens Creek Mine are contained in its TRS and in a NI 43-101 technical report titled “Technical Report for the Greens Creek Mine” effective date December 31, 2018, and for the Lucky Friday Mine are contained in its TRS and in its technical report titled “Technical Report for the Lucky Friday Mine Shoshone County, Idaho, USA” effective date April 2, 2014, for Casa Berardi are contained in its TRS and in its technical report titled “Technical Report on the mineral resource and mineral reserve estimate for Casa Berardi Mine, Northwestern Quebec, Canada” effective date December 31, 2018 (the “Casa Berardi Technical Report”), and for the San Sebastian Mine, Mexico, 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 each TRS and the four 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. 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 Fire Creek Mine are contained in a technical report prepared for Klondex Mines, dated March 31, 2018; the Hollister Mine dated May 31, 2017, amended August 9, 2017; and the Midas Mine dated August 31, 2014, amended April 2, 2015. Copies of these technical reports are available under Hecla’s and Klondex’s profiles on SEDAR at www.sedar.com. Mr. Allen and Mr. Blair reviewed and verified information regarding drill sampling, data verification of all digitally collected data, drill surveys and specific gravity determinations relating to all the mines. 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 Operations

(dollars and shares in thousands, except per share amounts - unaudited)

Three Months Ended

March 31, 2022

December 31, 2021

Sales of products

$

186,499

$

185,078

Cost of sales and other direct production costs

105,772

98,962

Depreciation, depletion and amortization

35,298

32,875

Total cost of sales

141,070

131,837

Gross profit

45,429

53,241

Other operating expenses:

General and administrative

8,294

6,585

Exploration and pre-development

12,808

12,862

Care and maintenance costs

6,205

5,998

Provision for closed operations and reclamation

901

2,274

Other operating expense

2,463

3,701

30,671

31,420

Income from operations

14,758

21,821

Other income (expense):

Interest expense

(10,406

)

(10,461

)

Fair value adjustments, net

5,965

(25,141

)

Foreign exchange (loss) gain, net

(2,038

)

393

Other income (expense), net

1,505

(382

)

Total other expense

(4,974

)

(35,591

)

Income (loss) before income and mining taxes

9,784

(13,770

)

Income and mining tax (provision) benefit

(5,631

)

25,645

Net income

4,153

11,875

Preferred stock dividends

(138

)

(138

)

Income applicable to common shareholders

$

4,015

$

11,737

Basic earnings per common share after preferred dividends

$

0.01

$

0.02

Diluted earnings per common share after preferred dividends

$

0.01

$

0.02

Weighted average number of common shares outstanding - basic

538,490

538,124

Weighted average number of common shares outstanding - diluted

544,061

543,134

HECLA MINING COMPANY

Condensed Consolidated Statements of Cash Flows

(dollars in thousands - unaudited)

Three Months Ended

March 31, 2022

December 31, 2021

OPERATING ACTIVITIES

Net income

$

4,153

$

11,875

Non-cash elements included in net income:

Depreciation, depletion and amortization

35,456

32,851

Provision for reclamation and closure costs

1,643

3,693

Deferred income taxes

2,234

(30,163

)

Stock compensation

1,271

1,308

Fair value adjustments, net

(2,245

)

23,018

Foreign exchange loss (gain)

2,280

(694

)

Other non-cash charges, net

483

1,007

Change in assets and liabilities:

Accounts receivable

2,779

(1,607

)

Inventories

(5,081

)

(5,453

)

Other current and non-current assets

1,696

(3,328

)

Accounts payable and accrued liabilities

(13,907

)

13,894

Accrued payroll and related benefits

6,909

3,099

Accrued taxes

3,754

3,727

Accrued reclamation and closure costs and other non-current liabilities

(3,516

)

128

Cash provided by operating activities

37,909

53,355

INVESTING ACTIVITIES

Additions to properties, plants, equipment and mineral interests

(21,478

)

(28,838

)

Purchase of carbon credits

(669

)

Proceeds from sale of investments

2,487

Proceeds from disposition of properties, plants and equipment

617

515

Purchases of investments

(10,868

)

Net cash used in investing activities

(29,242

)

(28,992

)

FINANCING ACTIVITIES

Acquisition of treasury shares

(1,921

)

Dividends paid to common and preferred stockholders

(3,509

)

(3,503

)

Debt origination fees

(54

)

(8

)

Repayments of debt and capital leases

(1,695

)

(1,687

)

Net cash used in provided by financing activities

(7,179

)

(5,198

)

Effect of exchange rates on cash

519

(59

)

Net increase in cash and cash equivalents and restricted cash and cash equivalents

2,007

19,106

Cash and cash equivalents and restricted cash and cash equivalents at beginning of period

211,063

191,957

Cash and cash equivalents and restricted cash and cash equivalents at end of period

$

213,070

$

211,063

HECLA MINING COMPANY

Condensed Consolidated Balance Sheets

(dollars and shares in thousands - unaudited)

March 31, 2022

December 31, 2021

ASSETS

Current assets:

Cash and cash equivalents

$

212,029

$

210,010

Accounts receivable:

Trade

33,324

36,437

Other, net

8,586

8,149

Inventories

73,090

67,765

Other current assets

16,927

19,266

Total current assets

343,956

341,627

Investments

29,204

10,844

Restricted cash and investments

1,041

1,053

Properties, plants, equipment and mineral interests, net

2,298,858

2,310,810

Operating lease right-of-use asset

12,342

12,435

Deferred taxes

45,562

45,562

Other non-current assets

7,936

6,477

Total assets

$

2,738,899

$

2,728,808

LIABILITIES

Current liabilities:

Accounts payable and accrued liabilities

$

73,786

$

68,100

Accrued payroll and related benefits

34,864

28,714

Accrued taxes

16,128

12,306

Finance and operating leases

8,535

8,098

Accrued reclamation and closure costs

10,594

9,259

Derivatives liabilities

38,992

19,353

Other current liabilities

5,341

14,553

Total current liabilities

188,240

160,383

Finance and operating leases

18,385

17,726

Long-term debt

508,852

508,095

Deferred tax liability

140,810

149,706

Accrued reclamation and closure costs

103,612

103,972

Derivative liabilities

43,402

18,528

Other non-current liabilities

7,055

9,611

Total liabilities

1,010,356

968,021

STOCKHOLDERS’ EQUITY

Preferred stock

39

39

Common stock

136,657

136,391

Capital surplus

2,036,417

2,034,485

Accumulated deficit

(353,007

)

(353,651

)

Accumulated other comprehensive loss

(61,621

)

(28,456

)

Treasury stock

(29,942

)

(28,021

)

Total stockholders’ equity

1,728,543

1,760,787

Total liabilities and stockholders’ equity

$

2,738,899

$

2,728,808

Non-GAAP Measures
(Unaudited)

Reconciliation of Total Cost of Sales (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP)

The tables below present reconciliations between the most comparable GAAP measure of total cost of sales to the non-GAAP measures of (i) Cash Cost, Before By-product Credits, (ii) Cash Cost, After By-product Credits, (iii) AISC, Before By-product Credits and (iv) AISC, After By-product Credits for our operations at Greens Creek, Lucky Friday, Casa Berardi and Nevada Operations and for the Company for the three-month periods ended March 31, 2022 and December 31, 2021.

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 these non-GAAP measures as we report them are the same as those reported by other mining companies.

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 which we use as a measure of our operation's net cash flow after costs for exploration, pre-development, reclamation, and sustaining capital. This is similar to the Cash Cost, After By-product Credits, per Ounce non-GAAP measure we report, but also includes on-site exploration, reclamation, and sustaining capital costs. 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 operations versus those of our competitors. As a primary silver and gold mining company, we also use these statistics on an aggregate basis. We aggregate Greens Creek and Lucky Friday to compare our performance with that of other primary silver mining companies and aggregate Casa Berardi and Nevada Operations to compare our performance with that of other primary 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 operation 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, exploration and sustaining capital projects. By-product credits include revenues earned from all metals other than the primary metal produced at each operation. 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.

In addition to the uses described above, 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.

The Casa Berardi and Nevada Operations sections below report Cash Cost, After By-product Credits, per Gold Ounce and AISC, After By-product Credits, per Gold Ounce for the production of gold, their 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 operations 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 Casa Berardi and Nevada Operations is not included as a by-product credit when calculating CashCost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for the total of Greens Creek and Lucky Friday, our combined silver properties. Similarly, the silver produced at our other two operations is not included as a by-product credit when calculating the similar gold metrics for Casa Berardi.

In thousands (except per ounce amounts)

Three Months Ended March 31, 2022

Three Months Ended December 31, 2021

Greens
Creek

Lucky
Friday

Corporate

Total
Silver

Greens
Creek

Lucky
Friday

Corporate(2)

Total
Silver

Total cost of sales

$

49,638

$

29,264

$

78,902

$

49,252

$

23,251

$

152

$

72,655

Depreciation, depletion and amortization

(11,420

)

(8,032

)

(19,452

)

(6,300

)

(6,518

)

(152

)

(12,970

)

Treatment costs

9,096

3,677

12,773

8,655

3,636

12,291

Change in product inventory

6,538

(905

)

5,633

236

1,351

1,587

Reclamation and other costs

(850

)

(361

)

(1,211

)

(1,689

)

(199

)

(1,888

)

Cash Cost, Before By-product Credits (1)

53,002

23,643

76,645

50,154

21,521

71,675

Reclamation and other costs

705

282

987

847

264

1,111

Exploration

165

716

881

696

867

1,563

Sustaining capital

5,956

5,562

48

11,566

10,123

7,413

172

17,708

General and administrative

8,294

8,294

6,585

6,585

AISC, Before By-product Credits (1)

59,828

29,487

9,058

98,373

61,820

29,198

7,624

98,642

By-product credits:

Zinc

(28,651

)

(5,977

)

(34,628

)

(25,643

)

(5,022

)

(30,665

)

Gold

(18,583

)

(18,583

)

(15,712

)

(15,712

)

Lead

(7,966

)

(11,836

)

(19,802

)

(7,657

)

(12,204

)

(19,861

)

Total By-product credits

(55,200

)

(17,813

)

(73,013

)

(49,012

)

(17,226

)

(66,238

)

Cash Cost, After By-product Credits

$

(2,198

)

$

5,830

$

$

3,632

$

1,142

$

4,295

$

$

5,437

AISC, After By-product Credits

$

4,628

$

11,674

$

9,058

$

25,360

$

12,808

$

11,972

$

7,624

$

32,404

Divided by ounces produced

2,430

888

3,318

2,262

955

3,217

Cash Cost, Before By-product Credits, per Silver Ounce

$

21.82

$

26.63

$

23.10

$

22.18

$

22.54

$

22.28

By-product credits per ounce

(22.72

)

(20.06

)

(22.01

)

(21.68

)

(18.04

)

(20.59

)

Cash Cost, After By-product Credits, per Silver Ounce

$

(0.90

)

$

6.57

$

1.09

$

0.50

$

4.50

$

1.69

AISC, Before By-product Credits, per Silver Ounce

$

24.62

$

33.21

$

29.65

$

27.34

$

30.58

$

30.67

By-product credits per ounce

(22.72

)

(20.06

)

(22.01

)

(21.68

)

(18.04

)

(20.59

)

AISC, After By-product Credits, per Silver Ounce

$

1.90

$

13.15

$

7.64

$

5.66

$

12.54

$

10.08

In thousands (except per ounce amounts)

Three Months Ended
March 31, 2022

Three Months Ended December 31, 2021

Casa
Berardi

Total Gold

Casa
Berardi

Nevada
Operations(3)

Total Gold

Total cost of sales

$

62,168

$

62,168

$

57,069

$

2,113

$

59,182

Depreciation, depletion and amortization

(15,846

)

(15,846

)

(19,585

)

(320

)

(19,905

)

Treatment costs

458

458

423

423

Change in product inventory

(563

)

(563

)

4,839

(956

)

3,883

Reclamation and other costs

(210

)

(210

)

(208

)

1

(207

)

Cash Cost, Before By-product Credits (1)

46,007

46,007

42,538

838

43,376

Reclamation and other costs

210

210

209

327

536

Exploration

1,394

1,394

1,775

1,775

Sustaining capital

7,281

7,281

10,459

316

10,775

AISC, Before By-product Credits (1)

54,892

54,892

54,981

1,481

56,462

By-product credits:

Silver

(166

)

(166

)

(183

)

(21

)

(204

)

Total By-product credits

(166

)

(166

)

(183

)

(21

)

(204

)

Cash Cost, After By-product Credits

$

45,841

$

45,841

$

42,355

$

817

$

43,172

AISC, After By-product Credits

$

54,726

$

54,726

$

54,798

$

1,460

$

56,258

Divided by gold ounces produced

30

30

37

37

Cash Cost, Before By-product Credits, per Gold Ounce

$

1,521

$

1,521

$

1,142

$

1,737

$

1,148

By-product credits per ounce

(5

)

(5

)

(5

)

(44

)

(5

)

Cash Cost, After By-product Credits, per Gold Ounce

$

1,516

$

1,516

$

1,137

$

1,693

$

1,143

AISC, Before By-product Credits, per Gold Ounce

$

1,815

$

1,815

$

1,475

$

3,073

$

1,499

By-product credits per ounce

(5

)

(5

)

(5

)

(44

)

(5

)

AISC, After By-product Credits, per Gold Ounce

$

1,810

$

1,810

$

1,470

$

3,029

$

1,494

In thousands (except per ounce amounts)

Three Months Ended March 31, 2022

Three Months Ended December 31, 2021

Total Silver

Total Gold

Total

Total Silver

Total Gold

Total

Total cost of sales

$

78,902

$

62,168

$

141,070

$

72,655

$

59,182

$

131,837

Depreciation, depletion and amortization

(19,452

)

(15,846

)

(35,298

)

(12,970

)

(19,905

)

(32,875

)

Treatment costs

12,773

458

13,231

12,291

423

12,714

Change in product inventory

5,633

(563

)

5,070

1,587

3,883

5,470

Reclamation and other costs

(1,211

)

(210

)

(1,421

)

(1,888

)

(207

)

(2,095

)

Cash Cost, Before By-product Credits (1)

76,645

46,007

122,652

71,675

43,376

115,051

Reclamation and other costs

987

210

1,197

1,111

536

1,647

Exploration

881

1,394

2,275

1,563

1,775

3,338

Sustaining capital

11,566

7,281

18,847

17,708

10,775

28,483

General and administrative

8,294

8,294

6,585

6,585

AISC, Before By-product Credits (1)

98,373

54,892

153,265

98,642

56,462

155,104

By-product credits:

Zinc

(34,628

)

(34,628

)

(30,665

)

(30,665

)

Gold

(18,583

)

(18,583

)

(15,712

)

(15,712

)

Lead

(19,802

)

(19,802

)

(19,861

)

(19,861

)

Silver

(166

)

(166

)

(204

)

(204

)

Total By-product credits

(73,013

)

(166

)

(73,179

)

(66,238

)

(204

)

(66,442

)

Cash Cost, After By-product Credits

$

3,632

$

45,841

$

49,473

$

5,437

$

43,172

$

48,609

AISC, After By-product Credits

$

25,360

$

54,726

$

80,086

$

32,404

$

56,258

$

88,662

Divided by ounces produced

3,318

30

3,217

37

Cash Cost, Before By-product Credits, per Ounce

$

23.10

$

1,521

$

22.28

$

1,148

By-product credits per ounce

(22.01

)

(5

)

(20.59

)

(5

)

Cash Cost, After By-product Credits, per Ounce

$

1.09

$

1,516

$

1.69

$

1,143

AISC, Before By-product Credits, per Ounce

$

29.65

$

1,815

$

30.67

$

1,499

By-product credits per ounce

(22.01

)

(5

)

(20.59

)

(5

)

AISC, After By-product Credits, per Ounce

$

7.64

$

1,810

$

10.08

$

1,494

(1)

Includes all direct and indirect operating costs related to the physical activities of producing metals, including mining, processing and other plant costs, third-party refining and marketing expense, non-discretionary on-site general and administrative costs, royalties and mining production taxes, before by-product revenues earned from all metals other than the primary metal produced at each operation. AISC, Before By-product Credits also includes on-site exploration, reclamation, and sustaining capital costs.

(2)

Three months ended December 31, 2021, include results for San Sebastian, which was an operating segment prior to 2021. AISC, Before By-product Credits for our consolidated silver properties includes non-discretionary corporate costs for general and administrative expense, exploration and sustaining capital.

(3)

Production was suspended at the Hollister mine in the third quarter of 2019 and at the Midas mine and Aurora mill in late 2019, and at the Midas mill and Fire Creek mine in mid-2021. Care and maintenance costs at Nevada Operations totaling $5.7 million for the first quarter of 2022 and $5.4 million for the fourth quarter of 2021 are reported in a separate line item on our consolidated statements of operations and excluded from the calculations of cost of sales and other direct production costs and depreciation, depletion and amortization and Cash Cost and AISC, After By-product Credits, per Gold Ounce.

Reconciliation of Net Income (Loss) (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 income (loss) before the following items: interest expense, income and mining tax provision (benefit), depreciation, depletion, and amortization expense, acquisition costs,, foreign exchange gains and losses, unrealized gains and losses on derivative contracts, care and maintenance costs, provisional price gains and losses, stock-based compensation, unrealized gains and losses 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 IQ Notes and capital leases, 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

Q1-2022

Q4 -2021

Q3 -2021

Q2 -2021

Q1 -2021

LTM
3/31/2022

FY 2021

Net income (loss)

$

4,153

11,875

(979

)

2,748

21,451

17,797

35,095

Plus: Interest expense

10,406

10,461

10,469

10,271

10,744

41,607

41,945

Plus/(Less): Income and mining tax provision (benefit)

5,631

(25,645

)

(4,533

)

(4,134

)

4,743

(28,681

)

(29,569

)

Plus: Depreciation, depletion and amortization

35,298

32,875

45,790

46,059

47,069

160,022

171,793

Plus/(Less): Foreign exchange loss (gain)

2,038

(393

)

(3,995

)

1,907

2,064

(443

)

(417

)

Plus/(Less): Loss/(gain) on derivative contracts

201

25,840

(16,053

)

13,078

(10,962

)

23,066

11,903

Plus: Care and maintenance costs

6,205

5,998

6,910

5,786

4,318

24,899

23,012

Less: Provisional price gains

(968

)

(5,648

)

(72

)

(3,077

)

(552

)

(9,765

)

(9,349

)

(Less)/Plus: (Gain) loss on disposition of properties, plants, equipment and mineral interests

(8

)

326

(390

)

143

8

71

87

Plus: Stock-based compensation

1,271

1,307

1,472

2,802

500

6,852

6,081

Plus: Provision for closed operations and environmental matters

1,643

3,693

8,088

1,654

4,529

15,078

17,964

(Less)/Plus: Unrealized (gain) loss on investments

(6,100

)

(2,822

)

2,861

750

3,506

(5,311

)

4,295

Adjustments of inventory to net realizable value

93

6,242

189

6,335

6,524

(Less)/Plus: Other

(1,571

)

382

(247

)

278

(997

)

(1,158

)

(584

)

Adjusted EBITDA

$

58,199

58,249

49,414

84,507

$

86,610

$

250,369

$

278,780

Total debt

$

523,430

$

521,483

Less: Cash and cash equivalents

$

212,029

$

210,010

Net debt

$

311,401

$

311,473

Net debt/LTM adjusted EBITDA (non-GAAP)

1.2

1.1

Reconciliation of Cash Provided by Operating Activities (GAAP) to Free Cash Flow (non-GAAP)

This release refers to a non-GAAP measure of free cash flow, calculated as cash provided by operating activities, less additions to properties, plants, equipment and mineral interests. Management believes that, when presented in conjunction with comparable GAAP measures, free cash flow is useful to investors in evaluating our operating performance. The following table reconciles cash provided by operating activities to free cash flow:

Dollars are in millions

Cumulative

Q2/2020 to Q1/2022

Cash provided by operating activities

$

434.0

Less: Additions to properties, plants equipment and mineral interests

(201.6

)

Free cash flow

$

232.4

Table A
Assay Results - Q1 2022

Casa Berardi (Quebec)

Zone

Drill Hole
Number

Drill Hole
Section

Drill Hole
Azm/Dip

Sample From
(feet)

Sample To
(feet)

True Width
(feet)

Gold
(oz/ton)

Depth From Mine
Surface (feet)

113 Zone

CBW-1163

11505

330/-6

611.1

631.1

19.4

0.31

3279.1

113 Zone

Including

330/-6

611.1

614.7

3.3

0.29

3277.4

113 Zone

Including

330/-6

614.7

618

3

0.51

3278.1

113 Zone

Including

330/-6

627.5

629.1

1.3

1.74

3280.5

113 Zone

CBW-1164

11515

336/-8

616.6

631.1

12.1

0.43

3293.7

113 Zone

Including

336/-8

627.5

629.1

1.3

3.31

3294.6

113 Zone

CBW-1166

11455

327/27

897.7

909.2

7.9

0.05

2861.9

113 Zone

CBW-1167

11515

334/16

669.4

690.4

21

0.08

3176.4

113 Zone

Including

334/16

685.5

690.4

4.9

0.17

3177

113 Zone

CBW-1167

11505

334/16

765.9

788.8

23

0.55

3185.2

113 Zone

Including

334/16

768.5

771.8

3.3

0.37

3184.5

113 Zone

Including

334/16

774.4

785.6

9.8

0.94

3185.4

113 Zone

CBW-1168

11470

334/26

823.6

840.3

15.7

0.01

2952.4

118 Zone

CBP-1040

11910

211/6

276.5

285.4

8.2

0.08

2265.5

118 Zone

CBP-1040

11900

211/6

342.4

354.2

8.9

0.15

2255.2

118 Zone

CBP-1041

11910

211/29

300.1

315.5

14.8

0.14

2158.2

118 Zone

CBP-1041

11910

211/29

320.8

326.7

4.9

0.21

2151

119 Zone

CBP-1157

11765

194/-4

503.8

519.6

14.8

0.01

958.9

124 Zone

CBP-1085

12340

2/13

215.5

218.1

2

0.13

682.3

124 Zone

CBP-1086

12345

2/32

184

200.4

12.1

0.09

479.1

124 Zone

CBP-1087

12325

350/-35

280.4

320.8

36.1

0.06

754.1

124 Zone

Including

350/-35

302.4

306.7

3.3

0.15

756.3

124 Zone

CBP-1090

12300

336/14

245.7

260.8

15.1

0.02

530.6

124 Zone

CBP-1094

12315

336/-47

324.7

341.1

10.5

0.02

814.3

124 Zone

CBP-1095

12295

326/-26

314.9

327.3

8.5

0.01

726.4

124 Zone

CBP-1097

12315

326/25

157.4

173.2

14.8

0

514.2

124 Zone

CBP-1097

12300

326/25

196.8

209.9

12.1

0.01

499.2

124 Zone

CBF-124-002

12900

12/-57

452.6

507.1

0

0

402.7

124 Zone

CBF-124-004

12900

13/-70

511.7

531.4

0

0.02

486.8

124 Zone

CBF-124-004

12900

13/-70

610.1

654.4

0

0.01

590.8

124 Zone

CBF-124-005

12900

1/-46

206.6

212.9

31.4

0.08

158.2

124 Zone

CBF-124-007

12775

357.64/48.87

441.2

455.9

5.9

0.04

337.2

124 Zone

CBF-124-008

12950

4.88/53.48

382.1

390.3

1.7

0.03

331

124 Zone

CBF-124-008

12950

4.88/53.48

585.5

603.8

10.2

0.03

475.1

124 Zone

CBF-124-015

12805

359.74/49.38

351.6

355.2

1.7

0.13

269.1

124 Zone

CBF-124-017

12850

353/-54

630.4

738

0

0.05

529.2

124 Zone

CBF-124-017

12850

353/-54

630.4

742.9

86.6

0.05

531.1

124 Zone

Including

353/-54

649.4

659.3

7.5

0.14

506.9

124 Zone

Including

353/-54

733.1

742.9

7.5

0.13

569.2

134 Zone

CBF-134-079

13475

357.79/47.5

347

348.7

0.7

0.13

247.8

134 Zone

CBS-21-043

13259

155/-52

1022

1067.6

27

0.12

762.7

134 Zone

CBS-21-048

13500

356/-52

1297.2

1315.3

8.2

0.03

875.2

134 Zone

CBS-21-048

13500

356/-52

1420.2

1449.8

19.4

0.1

1138.8

134 Zone

Including

356/-52

1425.2

1441.6

10.8

0.14

1138.8

134 Zone

CBS-21-048

13500

356/-52

1474.4

1489.1

7.9

0.07

1172.8

134 Zone

CBS-21-049

13259

161/-60

1041.7

1056.2

4.7

0.03

875.2

134 Zone

CBS-22-050

13530

358.71/58.96

1173.9

1175.6

0.8

0.11

885.9

134 Zone

CBS-22-050

13530

358.71/58.96

1506.8

1513.7

4

0.04

1117

134 Zone

CBS-22-052

13640

358/46

1031.6

1034.8

1.6

0.09

741.8

134 Zone

CBS-22-052

13640

358/46

1136.5

1144.7

3.9

0.04

819.1

134 Zone

CBS-22-052

13640

358/46

1192.9

1194.2

0.7

0.06

857.2

146 Zone

CBE-0311

14700

174/28

419.8

432

9.8

0.03

1603.4

146 Zone

CBE-0312

14685

182/38

414.3

425.4

8.2

0.2

1541.5

146 Zone

Including

182/38

414.3

417.5

2

0.36

1543.7

146 Zone

CBE-0319

14660

203/2

226.3

236.8

8.9

0.23

1778.7

146 Zone

Including

203/2

235.2

236

1.3

0.63

1778.4

146 Zone

CBE-0319

14635

203/2

424.1

518.9

72.2

0.11

1761.6

146 Zone

Including

203/2

473.3

476.6

3

0.32

1761.4

146 Zone

Including

203/2

493

496.3

3

0.28

1759.9

146 Zone

Including

203/2

496.3

499.5

3

0.36

1234.9

146 Zone

CBE-0326

14590

213/8

553.3

571.4

16.4

0.04

1710.6

146 Zone

CBE-0326

14590

213/8

593.7

605.2

11.2

0.03

1710.6

146 Zone

Including

213/8

553.3

555

1.3

0.16

1711.8

146 Zone

CBE-0320

14625

204/25

424.4

515.9

82

0.08

1688.8

146 Zone

Including

204/25

424.4

428.7

3.3

0.15

1698.3

146 Zone

Including

204/25

453.3

455.9

1.6

0.27

1692.2

146 Zone

Including

204/25

467.1

471.3

3.6

0.44

1689.1

146 Zone

CBE-0324

14620

204/-5

473

521.2

42

0.08

1827.1

146 Zone

Including

204/-5

473

477.2

3.9

0.25

1826.6

146 Zone

Including

204/-5

495

500.5

4.9

0.24

1827.1

146 Zone

Including

204/-5

518.9

521.2

2

0.15

1827.7

146 Zone

CBE-0324

14625

204/-5

206.3

217.5

11.2

0.05

1809.3

146 Zone

CBE-0324

14625

204/-5

464.1

521.2

57.1

0.07

1825.5

146 Zone

Including

204/-5

473

477.2

4.3

0.25

1825.1

146 Zone

Including

204/-5

495

500.5

5.6

0.24

1825.6

146 Zone

CBE-0330

14635

199/-15

485.4

508.4

11.5

0.18

1913.8

146 Zone

Including

199/-15

489

492.7

3

0.7

1912.5

146 Zone

Including

199/-15

492.7

495.9

2.6

0.27

1913.3

146 Zone

CBE-0330

14635

199/-15

526.4

547.1

19.4

0.09

1922.6

146 Zone

Including

199/-15

538.9

542.5

3

0.32

1923.4

146 Zone

CBE-0331

14640

198/-27

544.5

559.6

14.4

0.1

2022.8

146 Zone

CBE-0334

14690

180/-37.5

201.7

216.5

13.8

0.05

1921.6

146 Zone

CBE-0336

14690

178/49

433

452.6

17.7

0.02

1467.8

146 Zone

CBE-0332

14660

192/16

425.1

435.6

8.2

0.11

1905.5

Greens Creek (Alaska)

Zone

Drill Hole
Number

Drill Hole
Azm/Dip

Sample
From (feet)

Sample
To (feet)

True Width
(feet)

Silver
(oz/ton)

Gold
(oz/ton)

Zinc (%)

Lead
(%)

Depth From Mine
Portal (feet)

9A

GC5615

243/32

159.0

164.5

4.2

20.5

0.09

4.9

2.5

-147

9A

GC5615

243/32

168.5

170.5

1.5

85.2

0.48

11.3

4.7

-142

9A

GC5615

243/32

189.0

231.0

41.5

7.4

0.02

6.8

3.0

-124

9A

GC5627

243/53

123.0

124.0

0.7

9.5

0.01

4.0

1.9

-131

9A

GC5627

243/53

132.2

139.5

5.0

14.9

0.04

3.7

2.1

-119

9A

GC5627

243/53

142.5

144.5

1.4

27.5

0.01

18.5

9.0

-116

9A

GC5627

243/53

252.0

255.5

1.5

46.8

0.04

10.5

4.4

-27

9A

GC5627

243/53

270.5

271.5

0.4

8.6

0.01

12.3

3.7

-13

9A

GC5627

243/53

275.0

280.0

2.1

21.4

0.03

21.2

4.7

-7

9A

GC5627

243/53

370.0

371.0

0.3

30.6

0.02

16.2

8.4

68

9A

GC5629

243/70

160.0

162.0

2.0

8.4

0.01

4.3

2.5

-78

9A

GC5634

226.3/42.3

145.2

148.5

3.1

14.8

0.12

10.8

3.4

-133

9A

GC5634

226.3/42.3

163.0

173.0

9.5

3.8

0.08

9.3

2.4

-118

9A

GC5637

301.3/58.2

166.6

171.0

4.2

13.1

0.02

6.0

3.3

-84

9A

GC5638

322.6/60.6

116.1

138.0

20.7

18.3

0.05

2.8

1.3

-87

9A

GC5638

322.6/60.6

158.0

164.5

6.4

16.0

0.07

1.9

1.0

-111

9A

GC5640

30.3/84.8

117.0

122.8

5.8

2.1

0.23

2.9

1.1

-113

9A

GC5640

30.3/84.8

128.0

130.9

2.9

8.0

0.49

3.1

1.7

-110

9A

GC5640

30.3/84.8

140.4

141.4

1.0

5.6

0.07

3.3

2.5

-102

9A

GC5646

5.7/-52.4

0.0

1.0

1.0

6.6

0.03

12.6

7.0

-139

9A

GC5646

5.7/-52.4

21.0

22.0

1.0

12.3

0.08

6.6

3.6

-158

9A

GC5646

5.7/-52.4

38.9

39.9

0.8

10.8

0.10

10.4

5.7

-171

9A

GC5649

46.7/33.1

0.0

6.0

6.0

3.8

0.08

8.9

4.7

-125

9A

GC5649

46.7/33.1

163.7

165.7

2.0

6.8

0.02

6.0

3.3

-39

9A

GC5649

46.7/33.1

172.9

174.5

1.6

4.9

0.03

7.8

5.6

-35

200 South

GC5626

233/-73

59.0

63.7

4.6

9.1

0.02

5.3

5.6

-1351

200 South

GC5631

196.8/-64.7

60.0

62.0

2.0

6.2

0.03

7.6

3.6

-1359

200 South

GC5641

246/-24.6

61.0

63.5

1.3

7.5

0.02

5.6

2.9

-1318

200 South

GC5641

246/-24.6

83.5

86.5

1.0

1.4

0.01

15.8

7.4

-1328

200 South

GC5641

246/-24.6

99.0

101.0

0.4

0.9

0.01

14.1

4.5

-1335

200 South

GC5597

243/-71

791.0

804.0

12.6

25.0

0.09

0.5

0.2

-2054

200 South

GC5597

243/-71

818.0

822.0

3.9

33.4

0.27

0.9

0.5

-2073

200 South

GC5642

243.8/38.1

166.7

172.1

5.4

15.7

0.18

9.1

3.4

-1661

200 South

GC5642

243.8/38.1

207.5

213.7

5.7

4.1

0.08

16.2

3.5

-1638

200 South

GC5642

243.8/38.1

222.0

225.0

2.7

5.0

0.12

1.8

0.7

-1630

200 South

GC5643

243.8/15

174.1

180.0

5.7

40.4

0.43

12.4

4.7

-1724

200 South

GC5644

243.8/-3.6

224.8

236.0

10.5

25.1

0.42

4.2

2.0

-1790

San Sebastian (Mexico)

Zone

Drill Hole
Number

Drill Hole
Azm/Dip

Sample
From (feet)

Sample
To (feet)

True
Width
(feet)

Silver
(oz/ton)

Gold
(oz/ton)

Copper
(%)

Lead (%)

Zinc
(%)

Depth
From
Surface
(feet)

FRANCINE VEIN

SS-1463-EXT

25/-60

2290.9

2294.2

1.8

0.8

0

0.6

0.2

0.4

2005.2

WEST FRANCINE VEIN

SS-2151-A

25/-48

2359.4

2359.9

0.4

0.6

0

0.1

1

1

1868.1

WEST FRANCINE VEIN

SS-2152

25/-42

2398.3

2400.7

1.6

4.9

0

2

2.5

5.3

1671.8

MIDDLE VEIN

SS-2151-A

25/-48

3289.8

3290.6

0.7

0.1

0

0

0.5

0.9

2677.5

MIDDLE VEIN

SS-2152

25/-42

3629.9

3641.1

8.2

0.2

0

0.1

0.3

0.5

2633.5

LA ROCA (New Vein)

LR-018

140/-62

2282

2282.9

0.8

6.8

0

0.1

0

0

1906.2

LA ROCA (New Vein)

LR-019

140/-71

2357.3

2366.3

5.4

0.7

0

0

0

0

2244.6

LA ROCA (New Vein)

Including

2362.2

2362.9

0.4

2.7

0

0

0

0

2245.7

LA ROCA (El Rosario)

LR-019

140/-71

2565.5

2594.1

17.2

0.2

0

0

0

0

2456.3

LA ROCA (New Vein)

LR-020

140/-60

2044.5

2053.1

6.1

0.1

0

0

0

0

1827.9

LA ROCA (New Vein)

LR-020

140/-60

2062.3

2067

3.3

0.4

0

0

0

0

1841.6

LA ROCA (New Vein)

LR-020

140/-60

2076.2

2090.6

10.2

0.1

0

0

0

0

1857.7

LA ROCA (La Blanca)

LR-020

140/-60

2113

2186

51.7

0.5

0

0

0

0

1914.9

LA ROCA (La Blanca)

Including

2159.8

2165.9

3.9

1.3

0

0

0

0

1911.5

LA ROCA (La Blanca)

Including

2164.6

2165.9

0.8

2.9

0

0

0

0

1912.9

LA ROCA (New Vein)

LR-020

140/-60

2383.1

2409.4

18.6

0.1

0

0

0

0

2128.6

LA ROCA (New Vein)

LR-020

140/-60

2545.7

2551

3.8

3.1

0

0

0

0

2260.6

LA ROCA (New Vein)

Including

2545.7

2546.2

0.3

10.5

0.01

0

0

0

2249.7

LA ROCA (New Vein)

Including

2547.7

2549.7

1.2

4.3

0

0

0

0

2253.5

Hollister (Nevada)

Zone

Drill Hole
Number

Drillhole
Azm/Incl

Sample
From (feet)

Sample To
(feet)

Drilled Width
(feet)

Est. True
Width (feet)

Gold
(oz/ton)

Silver
(oz/ton)

Depth From
Surface (feet)

Hatter Graben South

HUC-111

121/-20

1782.8

1783.5

0.7

0.5

0.03

4.9

-1385

Hatter Graben South

HUC-111

121/-20

2027.8

2029

1.2

1.1

0.05

1.1

-1364

Hatter Graben South

HUC-111

121/-20

2302

2302.8

0.8

0.7

0.19

2.7

-1371

Hatter Graben South

HUC-111

121/-20

2332.7

2335.7

3

2.1

0.09

0.2

-1371

Hatter Graben South

HUC-112

138/-28

1618.7

1619.8

1.1

0.6

0.1

17.6

-2011

Hatter Graben South

HUC-112

138/-28

1696.2

1698.8

2.6

1.5

0

2

-2072

Hatter Graben South

HUC-112

138/-28

1819.6

1820

0.4

0.3

0.01

1.7

-2147

Hatter Graben South

HUC-112

138/-28

1972.3

1973

0.7

0.5

0.03

1.8

-2235

Hatter Graben South

HUC-112

138/-28

2089.6

2090.3

0.7

0.6

0.01

1.8

-2456

Hatter Graben South

HUC-112

138/-28

2389.4

2391

1.6

1.5

0.1

3.1

-2424

Category: Earnings