UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2022
OR
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period fromto
Commission filenumber File Number: 1-8491
HECLA MINING COMPANY
(Exact nameName of registrantRegistrant as specifiedSpecified in its Charter)
Delaware | 77-0664171 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer | |
6500 Mineral Drive, Suite 200 Coeur d’Alene, Idaho | 83815-9408 | |
(Address of | (Zip |
Registrant’s Telephone Number, Including Area Code
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock, par value $0.25 per share | HL | New York Stock Exchange | ||
Series B Cumulative Convertible Preferred Stock, par value $0.25 per share | HL-PB | New York Stock Exchange |
Indicate by check mark whether the registrant:registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation(§ (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ ☑No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule
Large accelerated filer | ☑ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☐ | |||||
Smaller reporting company | ☐ | |||||
Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule Yes ☐ No ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class | Shares Outstanding | |
Common stock, par value $0.25 par value per share | 612,636,803 |
Hecla Mining Company and Subsidiaries
Form 10 – Q
For the Quarter Ended September 30, 2022
INDEX
Page | |||||
PART I. | 3 | ||||
Item | 3 | ||||
3 | |||||
4 | |||||
5 | |||||
6 | |||||
7 | |||||
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 18 | ||||
40 | |||||
41 | |||||
II. | 41 | ||||
41 | |||||
Item 1A. | 41 | ||||
4. | |||||
41 | |||||
Item 6. | 42 | ||||
43 | |||||
* | Items 2, 3 and 5 of Part II are omitted as they are not applicable. |
2
Part I –- Financial Information
Item 1. Financial Statements
Hecla Mining Company and Subsidiaries
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income (Unaudited)
(Dollars and shares in thousands, except for
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | |||||||||||||
Sales | $ | 146,339 | $ | 193,560 | $ | 524,080 | $ | 622,395 | ||||||||
Cost of sales and other direct production costs | 104,900 | 112,542 | 326,579 | 318,917 | ||||||||||||
Depreciation, depletion and amortization | 32,992 | 45,790 | 106,362 | 138,918 | ||||||||||||
Total cost of sales | 137,892 | 158,332 | 432,941 | 457,835 | ||||||||||||
Gross profit | 8,447 | 35,228 | 91,139 | 164,560 | ||||||||||||
Other operating expenses: | ||||||||||||||||
General and administrative | 11,003 | 8,874 | 28,989 | 27,985 | ||||||||||||
Exploration and pre-development | 15,128 | 17,108 | 39,136 | 35,039 | ||||||||||||
Care and maintenance costs | 5,092 | 6,910 | 16,539 | 17,014 | �� | |||||||||||
Provision for closed operations and environmental matters | 1,781 | 7,564 | 4,154 | 12,297 | ||||||||||||
Other operating expense | 902 | 3,344 | 5,310 | 10,626 | ||||||||||||
Total other operating expenses | 33,906 | 43,800 | 94,128 | 102,961 | ||||||||||||
(Loss) income from operations | (25,459 | ) | (8,572 | ) | (2,989 | ) | 61,599 | |||||||||
Other income (expense): | ||||||||||||||||
Interest expense | (10,874 | ) | (10,469 | ) | (31,785 | ) | (31,484 | ) | ||||||||
Fair value adjustments, net | (4,240 | ) | 9,287 | (14,703 | ) | (10,651 | ) | |||||||||
Net foreign exchange gain | 5,667 | 3,995 | 8,111 | 24 | ||||||||||||
Other income (expense) | 1,853 | 247 | 4,828 | (192 | ) | |||||||||||
Total other (expense) income | (7,594 | ) | 3,060 | (33,549 | ) | (42,303 | ) | |||||||||
(Loss) income before income and mining taxes | (33,053 | ) | (5,512 | ) | (36,538 | ) | 19,296 | |||||||||
Income and mining tax benefit | 9,527 | 4,533 | 3,642 | 3,924 | ||||||||||||
Net (loss) income | (23,526 | ) | (979 | ) | (32,896 | ) | 23,220 | |||||||||
Preferred stock dividends | (138 | ) | (138 | ) | (414 | ) | (414 | ) | ||||||||
(Loss) income applicable to common stockholders | $ | (23,664 | ) | $ | (1,117 | ) | $ | (33,310 | ) | $ | 22,806 | |||||
Comprehensive income (loss): | ||||||||||||||||
Net (loss) income | $ | (23,526 | ) | $ | (979 | ) | $ | (32,896 | ) | $ | 23,220 | |||||
Change in fair value of derivative contracts designated as hedge transactions | (12,692 | ) | (6,267 | ) | 19,491 | (2,815 | ) | |||||||||
Comprehensive (loss) income | $ | (36,218 | ) | $ | (7,246 | ) | $ | (13,405 | ) | $ | 20,405 | |||||
Basic (loss) income per common share after preferred dividends | $ | (0.04 | ) | $ | — | $ | (0.06 | ) | $ | 0.04 | ||||||
Diluted (loss) income per common share after preferred dividends | $ | (0.04 | ) | $ | — | $ | (0.06 | ) | $ | 0.04 | ||||||
Weighted average number of common shares outstanding – basic | 554,531 | 536,966 | 544,000 | 535,542 | ||||||||||||
Weighted average number of common shares outstanding – diluted | 554,531 | 536,966 | 544,000 | 541,769 | ||||||||||||
Cash dividends declared per common share | $ | 0.00625 | $ | 0.01 | $ | 0.0125 | $ | 0.02 | ||||||||
|
| Three Months Ended |
| |||||
|
| March 31, 2023 |
|
| March 31, 2022 |
| ||
Sales |
| $ | 199,500 |
|
| $ | 186,499 |
|
Cost of sales and other direct production costs |
|
| 125,550 |
|
|
| 105,772 |
|
Depreciation, depletion and amortization |
|
| 39,002 |
|
|
| 35,298 |
|
Total cost of sales |
|
| 164,552 |
|
|
| 141,070 |
|
Gross profit |
|
| 34,948 |
|
|
| 45,429 |
|
Other operating expenses: |
|
|
|
|
|
| ||
General and administrative |
|
| 12,070 |
|
|
| 8,294 |
|
Exploration and pre-development |
|
| 4,967 |
|
|
| 12,808 |
|
Ramp-up and suspension costs |
|
| 11,336 |
|
|
| 6,205 |
|
Provision for closed operations and environmental matters |
|
| 1,044 |
|
|
| 901 |
|
Other operating (income) expense |
|
| (22 | ) |
|
| 2,463 |
|
Total other operating expenses |
|
| 29,395 |
|
|
| 30,671 |
|
Income from operations |
|
| 5,553 |
|
|
| 14,758 |
|
Other income (expense): |
|
|
|
|
|
| ||
Interest expense |
|
| (10,165 | ) |
|
| (10,406 | ) |
Fair value adjustments, net |
|
| 3,181 |
|
|
| 5,965 |
|
Net foreign exchange gain (loss) |
|
| 108 |
|
|
| (2,038 | ) |
Other income |
|
| 1,392 |
|
|
| 1,505 |
|
Total other expense |
|
| (5,484 | ) |
|
| (4,974 | ) |
Income before income and mining taxes |
|
| 69 |
|
|
| 9,784 |
|
Income and mining tax expense |
|
| (3,242 | ) |
|
| (5,631 | ) |
Net (loss) income |
|
| (3,173 | ) |
|
| 4,153 |
|
Preferred stock dividends |
|
| (138 | ) |
|
| (138 | ) |
Net (loss) income applicable to common stockholders |
| $ | (3,311 | ) |
| $ | 4,015 |
|
Comprehensive income (loss): |
|
|
|
|
|
| ||
Net (loss) income |
| $ | (3,173 | ) |
| $ | 4,153 |
|
Change in fair value of derivative contracts designated as hedge transactions |
|
| 6,516 |
|
|
| (33,165 | ) |
Comprehensive income (loss) |
| $ | 3,343 |
|
| $ | (29,012 | ) |
Basic (loss) income per common share after preferred dividends |
| $ | (0.01 | ) |
| $ | 0.01 |
|
Diluted (loss) income per common share after preferred dividends |
| $ | (0.01 | ) |
| $ | 0.01 |
|
Weighted average number of common shares outstanding - basic |
|
| 600,075 |
|
|
| 538,490 |
|
Weighted average number of common shares outstanding - diluted |
|
| 600,075 |
|
|
| 544,061 |
|
Cash dividends declared per common share |
| $ | 0.01 |
|
| $ | 0.01 |
|
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
3
Hecla Mining Company and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
Nine Months Ended | ||||||||
September 30, 2022 | September 30, 2021 | |||||||
Operating activities: | ||||||||
Net (loss) income | $ | (32,896 | ) | $ | 23,220 | |||
Non-cash elements included in net (loss) income: | ||||||||
Depreciation, depletion and amortization | 106,743 | 139,800 | ||||||
Write-down of inventory | 2,159 | 6,524 | ||||||
Fair value adjustments, net | 3,486 | (7,978 | ) | |||||
Provision for reclamation and closure costs | 4,789 | 7,821 | ||||||
Stock compensation | 4,298 | 4,774 | ||||||
Deferred income taxes | (17,828 | ) | (17,886 | ) | ||||
Foreign exchange (gain) loss | (8,353 | ) | 615 | |||||
Other non-cash items, net | 2,454 | 1,167 | ||||||
Change in assets and liabilities: | ||||||||
Accounts receivable | 34,788 | (3,798 | ) | |||||
Inventories | (19,472 | ) | 22,372 | |||||
Other current and non-current assets | (3,420 | ) | 1,650 | |||||
Accounts payable, accrued and other current liabilities | (21,708 | ) | (14,689 | ) | ||||
Accrued payroll and related benefits | 1,679 | (1,829 | ) | |||||
Accrued taxes | (2,652 | ) | 2,730 | |||||
Accrued reclamation and closure costs and other non-current liabilities | (297 | ) | 2,489 | |||||
Cash provided by operating activities | 53,770 | 166,982 | ||||||
Investing activities: | ||||||||
Additions to properties, plants, equipment and mineral interests | (93,237 | ) | (80,210 | ) | ||||
Change in restricted cash | 2,011 | — | ||||||
Proceeds from sale of investments | 9,375 | 1,811 | ||||||
Proceeds from disposition of properties, plants and equipment | 748 | 562 | ||||||
Purchases of investments | (30,540 | ) | — | |||||
Acquisitions, net | 8,952 | — | ||||||
Pre-acquisition advance to Alexco | (25,000 | ) | — | |||||
Purchase of carbon credits | — | (200 | ) | |||||
Net cash used in investing activities | (127,691 | ) | (78,037 | ) | ||||
Financing activities: | ||||||||
Proceeds from sale of common stock, net | 4,542 | — | ||||||
Acquisition of treasury stock | (3,677 | ) | (4,525 | ) | ||||
Dividends paid to common and preferred stockholders | (10,549 | ) | (17,169 | ) | ||||
Credit facility fees paid | (517 | ) | (108 | ) | ||||
Draw on revolving credit facility | 25,000 | — | ||||||
Repayments of finance leases | (5,222 | ) | (5,598 | ) | ||||
Net cash provided by (used in) financing activities | 9,577 | (27,400 | ) | |||||
Effect of exchange rates on cash | (804 | ) | (471 | ) | ||||
Net (decrease) increase in cash, cash equivalents and restricted cash | (65,148 | ) | 61,074 | |||||
Cash, cash equivalents and restricted cash at beginning of period | 211,063 | 130,883 | ||||||
Cash, cash equivalents and restricted cash at end of period | $ | 145,915 | $ | 191,957 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for interest | $ | 37,179 | $ | 37,173 | ||||
Cash paid for income and mining taxes, net | $ | 13,061 | $ | 10,299 | ||||
Significant non-cash investing and financing activities: | ||||||||
Addition of finance lease obligations and right-of-use | $ | 9,692 | $ | 4,006 | ||||
Common stock issued to Alexco Resource Corp. shareholders | $ | 68,733 | $ | — | ||||
Common stock issued to settle acquired silver stream | $ | 135,000 | $ | — | ||||
Common stock issued to pension plans | $ | 5,570 | $ | 22,250 |
|
| Three Months Ended |
| |||||
|
| March 31, 2023 |
|
| March 31, 2022 |
| ||
Operating activities: |
|
|
|
|
|
| ||
Net (loss) income |
| $ | (3,173 | ) |
| $ | 4,153 |
|
Non-cash elements included in net (loss) income: |
|
|
|
|
|
| ||
Depreciation, depletion and amortization |
|
| 39,892 |
|
|
| 35,456 |
|
Adjustments of inventory to net realizable value |
|
| 4,521 |
|
|
| — |
|
Fair value adjustments, net |
|
| (3,181 | ) |
|
| (2,245 | ) |
Provision for reclamation and closure costs |
|
| 1,694 |
|
|
| 1,643 |
|
Stock-based compensation |
|
| 1,190 |
|
|
| 1,271 |
|
Deferred income taxes |
|
| 558 |
|
|
| 2,234 |
|
Foreign exchange (gain) loss |
|
| (2,218 | ) |
|
| 2,280 |
|
Other non-cash items, net |
|
| 186 |
|
|
| 483 |
|
Change in assets and liabilities: |
|
|
|
|
|
| ||
Accounts receivable |
|
| 15,477 |
|
|
| 2,779 |
|
Inventories |
|
| (9,239 | ) |
|
| (5,081 | ) |
Other current and non-current assets |
|
| (9,856 | ) |
|
| 1,696 |
|
Accounts payable, accrued and other current liabilities |
|
| (9,304 | ) |
|
| (13,907 | ) |
Accrued payroll and related benefits |
|
| 4,705 |
|
|
| 6,909 |
|
Accrued taxes |
|
| 2,226 |
|
|
| 3,754 |
|
Accrued reclamation and closure costs and other non-current liabilities |
|
| 7,125 |
|
|
| (3,516 | ) |
Cash provided by operating activities |
|
| 40,603 |
|
|
| 37,909 |
|
Investing activities: |
|
|
|
|
|
| ||
Additions to properties, plants, equipment and mineral interests |
|
| (54,443 | ) |
|
| (21,478 | ) |
Proceeds from sale of investments |
|
| — |
|
|
| 2,487 |
|
Proceeds from disposition of properties, plants and equipment |
|
| — |
|
|
| 617 |
|
Purchases of investments |
|
| — |
|
|
| (10,868 | ) |
Net cash used in investing activities |
|
| (54,443 | ) |
|
| (29,242 | ) |
Financing activities: |
|
|
|
|
|
| ||
Proceeds from sale of common stock, net |
|
| 11,885 |
|
|
| — |
|
Acquisition of treasury stock |
|
| (482 | ) |
|
| (1,921 | ) |
Borrowing of debt |
|
| 13,000 |
|
|
| — |
|
Repayment of debt |
|
| (13,000 | ) |
|
| — |
|
Dividends paid to common and preferred stockholders |
|
| (3,891 | ) |
|
| (3,509 | ) |
Credit facility fees paid |
|
| — |
|
|
| (54 | ) |
Repayments of finance leases |
|
| (2,464 | ) |
|
| (1,695 | ) |
Net cash provided by (used in) financing activities |
|
| 5,048 |
|
|
| (7,179 | ) |
Effect of exchange rates on cash |
|
| 171 |
|
|
| 519 |
|
Net (decrease) increase in cash, cash equivalents and restricted cash |
|
| (8,621 | ) |
|
| 2,007 |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
| 105,907 |
|
|
| 211,063 |
|
Cash, cash equivalents and restricted cash at end of period |
| $ | 97,286 |
|
| $ | 213,070 |
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
| ||
Cash paid for interest |
| $ | 18,621 |
|
| $ | 18,603 |
|
Cash paid for income and mining taxes, net |
| $ | 1,634 |
|
| $ | 679 |
|
Significant non-cash investing and financing activities: |
|
|
|
|
|
| ||
Addition of finance lease obligations and right-of-use assets |
| $ | 850 |
|
| $ | 2,864 |
|
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
4
Hecla Mining Company and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except shares)
September 30, 2022 | December 31, 2021 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 144,669 | $ | 210,010 | ||||
Accounts receivable: | ||||||||
Trade | 12,477 | 36,437 | ||||||
Other, net | 12,846 | 8,149 | ||||||
Inventories: | ||||||||
Concentrates, doré, and stockpiled ore | 40,985 | 25,906 | ||||||
Materials and supplies | 51,020 | 41,859 | ||||||
Derivatives assets | 7,190 | 2,709 | ||||||
Other current assets | 14,733 | 16,557 | ||||||
Total current assets | 283,920 | 341,627 | ||||||
Investments | 13,299 | 10,844 | ||||||
Restricted cash | 1,246 | 1,053 | ||||||
Properties, plants, equipment and mineral interests, net | 2,553,974 | 2,310,810 | ||||||
Operating lease right-of-use | 11,632 | 12,435 | ||||||
Deferred income taxes | 45,562 | 45,562 | ||||||
Derivatives assets | 20,794 | 2,503 | ||||||
Other non-current assets | 4,202 | 3,974 | ||||||
Total assets | $ | 2,934,629 | $ | 2,728,808 | ||||
LIABILITIES | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 87,850 | $ | 68,100 | ||||
Accrued payroll and related benefits | 26,385 | 28,714 | ||||||
Accrued taxes | 7,344 | 12,306 | ||||||
Finance and operating leases | 12,489 | 8,098 | ||||||
Accrued interest | 5,184 | 14,454 | ||||||
Derivatives liabilities | 5,774 | 19,353 | ||||||
Other current liabilities | 5,765 | 99 | ||||||
Accrued reclamation and closure costs | 10,594 | 9,259 | ||||||
Total current liabilities | 161,385 | 160,383 | ||||||
Finance and operating leases | 20,242 | 17,726 | ||||||
Accrued reclamation and closure costs | 105,717 | 103,972 | ||||||
Long-term debt | 530,745 | 508,095 | ||||||
Deferred tax liability | 154,225 | 149,706 | ||||||
Derivatives liabilities | 5,560 | 18,528 | ||||||
Other non-current liabilities | 1,987 | 9,611 | ||||||
Total liabilities | 979,861 | 968,021 | ||||||
Commitments and contingencies ( Notes 4 7 8, 10 | ||||||||
STOCKHOLDERS’ EQUITY | ||||||||
Preferred stock, 5,000,000 shares authorized: | ||||||||
Series B preferred stock, 25 cent par value, 157,776 shares issued and outstanding, liquidation preference – $7,891 | 39 | 39 | ||||||
Common stock, 25 cent par value, 750,000,000 authorized shares; issued September 30, 2022 – 603,702,910 shares and December 31, 2021 – 545,534,760 shares | 150,839 | 136,391 | ||||||
Capital surplus | 2,241,649 | 2,034,485 | ||||||
Accumulated deficit | (397,096 | ) | (353,651 | ) | ||||
Accumulated other comprehensive income (loss) | (8,965 | ) | (28,456 | ) | ||||
Less treasury stock, at cost; September 30, 2022 – 8,132,553 shares and December 31, 2021 – 7,395,295 shares issued and held in treasury | (31,698 | ) | (28,021 | ) | ||||
Total stockholders’ equity | 1,954,768 | 1,760,787 | ||||||
Total liabilities and stockholders’ equity | $ | 2,934,629 | $ | 2,728,808 | ||||
|
| March 31, 2023 |
|
| December 31, 2022 |
| ||
ASSETS |
|
|
|
|
|
| ||
Current assets: |
|
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 95,939 |
|
| $ | 104,743 |
|
Accounts receivable: |
|
|
|
|
|
| ||
Trade |
|
| 28,928 |
|
|
| 45,146 |
|
Other, net |
|
| 13,216 |
|
|
| 10,695 |
|
Inventories: |
|
|
|
|
|
| ||
Concentrates, doré, stockpiled ore, and metals in transit and in-process |
|
| 28,054 |
|
|
| 37,303 |
|
Materials and supplies |
|
| 56,286 |
|
|
| 53,369 |
|
Other current assets |
|
| 22,527 |
|
|
| 16,471 |
|
Total current assets |
|
| 244,950 |
|
|
| 267,727 |
|
Investments |
|
| 26,434 |
|
|
| 24,018 |
|
Restricted cash |
|
| 1,347 |
|
|
| 1,164 |
|
Properties, plants, equipment and mineral interests, net |
|
| 2,587,565 |
|
|
| 2,569,790 |
|
Operating lease right-of-use assets |
|
| 10,609 |
|
|
| 11,064 |
|
Deferred tax assets |
|
| 13,280 |
|
|
| 21,105 |
|
Other non-current assets |
|
| 41,439 |
|
|
| 32,304 |
|
Total assets |
| $ | 2,925,624 |
|
| $ | 2,927,172 |
|
LIABILITIES |
|
|
|
|
|
| ||
Current liabilities: |
|
|
|
|
|
| ||
Accounts payable and accrued liabilities |
| $ | 83,704 |
|
| $ | 84,747 |
|
Accrued payroll and related benefits |
|
| 41,141 |
|
|
| 37,579 |
|
Accrued taxes |
|
| 6,318 |
|
|
| 4,030 |
|
Finance leases |
|
| 9,040 |
|
|
| 9,483 |
|
Accrued reclamation and closure costs |
|
| 8,531 |
|
|
| 8,591 |
|
Accrued interest |
|
| 5,191 |
|
|
| 14,454 |
|
Other current liabilities |
|
| 11,428 |
|
|
| 19,582 |
|
Total current liabilities |
|
| 165,353 |
|
|
| 178,466 |
|
Accrued reclamation and closure costs |
|
| 109,808 |
|
|
| 108,408 |
|
Long-term debt including finance leases |
|
| 516,961 |
|
|
| 517,742 |
|
Deferred tax liability |
|
| 121,081 |
|
|
| 125,846 |
|
Other non-current liabilities |
|
| 20,264 |
|
|
| 17,743 |
|
Total liabilities |
|
| 933,467 |
|
|
| 948,205 |
|
Commitments and contingencies (Notes 4, 7, 8, and 10) |
|
|
|
|
|
| ||
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
Preferred stock, 5,000,000 shares authorized: |
|
|
|
|
|
| ||
Series B preferred stock, $0.25 par value, 157,776 shares issued and outstanding, liquidation preference — $7,889 |
|
| 39 |
|
|
| 39 |
|
Common stock, $0.25 par value, authorized 750,000,000 shares; issued March 31, 2023 — 610,490,740 shares and December 31, 2022 — 607,619,495 shares |
|
| 152,536 |
|
|
| 151,819 |
|
Capital surplus |
|
| 2,273,793 |
|
|
| 2,260,290 |
|
Accumulated deficit |
|
| (410,995 | ) |
|
| (403,931 | ) |
Accumulated other comprehensive income, net |
|
| 8,964 |
|
|
| 2,448 |
|
Less treasury stock, at cost; March 31, 2023 — 8,229,212 and December 31, 2022 — 8,132,553 shares issued and held in treasury |
|
| (32,180 | ) |
|
| (31,698 | ) |
Total stockholders’ equity |
|
| 1,992,157 |
|
|
| 1,978,967 |
|
Total liabilities and stockholders’ equity |
| $ | 2,925,624 |
|
| $ | 2,927,172 |
|
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
5
Hecla Mining Company and Subsidiaries
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)
(Dollars are in thousands, except for share and per share amounts)
Three Months Ended September 30, 2022 | ||||||||||||||||||||||||||||
Series B Preferred Stock | Common Stock | Capital Surplus | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss), net | Treasury Stock | Total | ||||||||||||||||||||||
Balances, July 1, 2022 | $ | 39 | $ | 137,241 | $ | 2,043,621 | $ | (370,048 | ) | $ | 3,727 | $ | (31,698 | ) | $ | 1,782,882 | ||||||||||||
Net loss | — | — | — | (23,526 | ) | — | — | (23,526 | ) | |||||||||||||||||||
Common stock issued to Alexco Resource Corp. shareholders (17,992,875 shares) | — | 4,498 | 64,235 | — | — | — | 68,733 | |||||||||||||||||||||
Common stock issued to settle the acquired silver stream (34,800,990 shares) | — | 8,700 | 126,300 | — | — | — | 135,000 | |||||||||||||||||||||
Common stock issued for 401(k) match (422,860 shares) | — | 106 | 1,472 | — | — | — | 1,578 | |||||||||||||||||||||
Common stock issued under ATM program, net (1,176,861 shares) | — | 294 | 4,248 | — | — | — | 4,542 | |||||||||||||||||||||
Common stock dividends declared (0.0625 cents per common share) | — | — | — | (3,384 | ) | — | — | (3,384 | ) | |||||||||||||||||||
Series B Preferred Stock dividends declared (87.5 cents per share) | — | — | — | (138 | ) | — | — | (138 | ) | |||||||||||||||||||
Restricted stock units granted | — | — | 1,773 | — | — | — | 1,773 | |||||||||||||||||||||
Other comprehensive loss | — | — | — | — | (12,692 | ) | — | (12,692 | ) | |||||||||||||||||||
Balances, September 30, 2022 | $ | 39 | $ | 150,839 | $ | 2,241,649 | $ | (397,096 | ) | $ | (8,965 | ) | $ | (31,698 | ) | $ | 1,954,768 | |||||||||||
Three Months Ended September 3 0 , 2021 | ||||||||||||||||||||||||||||
Series B Preferred Stock | Common Stock | Capital Surplus | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss), net | Treasury Stock | Total | ||||||||||||||||||||||
Balances, July 1, 2021 | $ | 39 | $ | 136,065 | $ | 2,024,645 | $ | (354,866 | ) | $ | (29,437 | ) | $ | (28,021 | ) | $ | 1,748,425 | |||||||||||
Net loss | — | — | — | (979 | ) | — | — | (979 | ) | |||||||||||||||||||
Restricted stock units granted | — | — | 1,472 | — | — | — | 1,472 | |||||||||||||||||||||
Common stock dividends declared (1.125 cents per common share) | — | — | — | (6,040 | ) | — | — | (6,040 | ) | |||||||||||||||||||
Series B Preferred Stock dividends declared (87.5 cents per share) | — | — | — | (138 | ) | — | — | (138 | ) | |||||||||||||||||||
Common stock issued for 401(k) match (141,000 shares) | — | 35 | 1,017 | — | — | — | 1,052 | |||||||||||||||||||||
Common stock issued to pension plans (1,000,000 shares) | — | 250 | 5,200 | — | — | — | 5,450 | |||||||||||||||||||||
Other comprehensive loss | — | — | — | — | (6,267 | ) | — | (6,267 | ) | |||||||||||||||||||
Balances, September 30, 2021 | $ | 39 | $ | 136,350 | $ | 2,032,334 | $ | (362,023 | ) | $ | (35,704 | ) | $ | (28,021 | ) | $ | 1,742,975 | |||||||||||
Nine Months Ended September 30, 2022 | ||||||||||||||||||||||||||||
Series B Preferred Stock | Common Stock | Capital Surplus | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss), net | Treasury Stock | Total | ||||||||||||||||||||||
Balances, January 1, 2022 | $ | 39 | $ | 136,391 | $ | 2,034,485 | $ | (353,651 | ) | $ | (28,456 | ) | $ | (28,021 | ) | $ | 1,760,787 | |||||||||||
Net loss | — | — | — | (32,896 | ) | — | — | (32,896 | ) | |||||||||||||||||||
Restricted stock units granted | — | — | 3,881 | — | — | — | 3,881 | |||||||||||||||||||||
Restricted stock units and performance stock units distributed (1,789,042 shares) | — | 447 | (447 | ) | — | — | (3,677 | ) | (3,677 | ) | ||||||||||||||||||
Common stock issued for 401(k) match (321,110 shares) | — | 186 | 3,283 | — | — | — | 3,469 | |||||||||||||||||||||
Common stock issued to directors (98,310 shares) | — | 25 | 392 | — | — | — | 417 | |||||||||||||||||||||
Common stock issued to pension plans (1,190,000 shares) | — | 298 | 5,272 | — | — | — | 5,570 | |||||||||||||||||||||
Common stock issued to Alexco Resource Corp. shareholders (17,992,875 shares) | — | 4,498 | 64,235 | — | — | — | 68,733 | |||||||||||||||||||||
Common stock issued to settle the acquired silver stream (34,800,990) | — | 8,700 | 126,300 | — | — | — | 135,000 | |||||||||||||||||||||
Common stock issued under ATM program, net (1,176,861 shares) | —— — | 294 | 4,248 | — | — | — | 4,542 | |||||||||||||||||||||
Common stock dividends declared (1.25 cents per common share) | — | — | — | (10,135 | ) | — | — | (10,135 | ) | |||||||||||||||||||
Series B Preferred Stock dividends declared ($2.625 per share) | — | — | — | (414 | ) | — | — | (414 | ) | |||||||||||||||||||
Other comprehensive income | — | — | — | — | 19,491 | — | 19,491 | |||||||||||||||||||||
Balances, September 30, 2022 | $ | 39 | $ | 150,839 | $ | 2,241,649 | $ | (397,096 | ) | $ | (8,965 | ) | $ | (31,698 | ) | $ | 1,954,768 | |||||||||||
Nine Months Ended September 30, 2021 | ||||||||||||||||||||||||||||
Series B Preferred Stock | Common Stock | Capital Surplus | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss), net | Treasury Stock | Total | ||||||||||||||||||||||
Balances, January 1, 2021 | $ | 39 | $ | 134,629 | $ | 2,003,576 | $ | (368,074 | ) | $ | (32,889 | ) | $ | (23,496 | ) | $ | 1,713,785 | |||||||||||
Net income | — | — | — | 23,220 | — | — | 23,220 | |||||||||||||||||||||
Restricted stock units granted | — | — | 2,930 | — | — | — | 2,930 | |||||||||||||||||||||
Restricted stock units distributed (1,653,000 shares) | — | 413 | (413 | ) | — | — | (4,525 | ) | (4,525 | ) | ||||||||||||||||||
Common stock dividends declared (3.125 cents per common share) | — | — | — | (16,755 | ) | — | — | (16,755 | ) | |||||||||||||||||||
Series B Preferred Stock dividends declared ($2.625 per share) | — | — | — | (414 | ) | — | — | (414 | ) | |||||||||||||||||||
Common stock issued for 401(k) match (524,000 shares) | — | 131 | 3,324 | — | — | — | 3,455 | |||||||||||||||||||||
Common stock issued to pension plans (4,500,000 shares) | — | 1,125 | 21,125 | — | — | — | 22,250 | |||||||||||||||||||||
Common stock issued to directors (207,000 shares) | — | 52 | 1,792 | — | — | — | 1,844 | |||||||||||||||||||||
Other comprehensive loss | — | — | — | — | (2,815 | ) | — | (2,815 | ) | |||||||||||||||||||
Balances, September 30, 2021 | $ | 39 | $ | 136,350 | $ | 2,032,334 | $ | (362,023 | ) | $ | (35,704 | ) | $ | (28,021 | ) | $ | 1,742,975 | |||||||||||
|
| Three Months Ended March 31, 2023 | ||||||||||||
|
| Series B |
| Common |
| Capital Surplus |
| Accumulated |
| Accumulated |
| Treasury |
| Total |
Balances, January 1, 2023 |
| $39 |
| $151,819 |
| $2,260,290 |
| $(403,931) |
| $2,448 |
| $(31,698) |
| $1,978,967 |
Net loss |
| — |
| — |
| — |
| (3,173) |
| — |
| — |
| (3,173) |
Stock-based compensation expense |
| — |
| — |
| 1,190 |
| — |
| — |
| — |
| 1,190 |
Incentive compensation units distributed (498,348 shares) |
| — |
| 125 |
| (125) |
| — |
| — |
| (482) |
| (482) |
Common stock ($0.00625 per share) and Series B Preferred Stock ($0.875 per share) dividends declared |
| — |
| — |
| — |
| (3,891) |
| — |
| — |
| (3,891) |
Common stock issued under ATM program (2,173,274 shares) |
| — |
| 542 |
| 11,343 |
| — |
| — |
| — |
| 11,885 |
Common stock issued for 401(k) match (199,623 shares) |
| — |
| 50 |
| 1,095 |
| — |
| — |
| — |
| 1,145 |
Other comprehensive income |
| — |
| — |
| — |
| — |
| 6,516 |
| — |
| 6,516 |
Balances, March 31, 2023 |
| $39 |
| $152,536 |
| $2,273,793 |
| $(410,995) |
| $8,964 |
| $(32,180) |
| $1,992,157 |
|
| Three Months Ended March 31, 2022 | ||||||||||||
|
| Series B |
| Common |
| Capital Surplus |
| Accumulated |
| Accumulated |
| Treasury |
| Total |
Balances, January 1, 2022 |
| $39 |
| $136,391 |
| $2,034,485 |
| $(353,651) |
| $(28,456) |
| $(28,021) |
| $1,760,787 |
Net income |
| — |
| — |
| — |
| 4,153 |
| — |
| — |
| 4,153 |
Stock-based compensation expense |
| — |
| — |
| 1,271 |
| — |
| — |
| — |
| 1,271 |
Incentive compensation units distributed (888,000 shares) |
| — |
| 222 |
| (222) |
| — |
| — |
| (1,921) |
| (1,921) |
Common stock ($0.00625 per share) and Series B Preferred Stock ($0.875 per share) dividends declared |
| — |
| — |
| — |
| (3,509) |
| — |
| — |
| (3,509) |
Common stock issued for 401(k) match (180,000 shares) |
| — |
| 44 |
| 883 |
| — |
| — |
| — |
| 927 |
Other comprehensive loss |
| — |
| — |
| — |
| — |
| (33,165) |
| — |
| (33,165) |
Balances, March 31, 2022 |
| $39 |
| $136,657 |
| $2,036,417 |
| $(353,007) |
| $(61,621) |
| $(29,942) |
| $1,728,543 |
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
6
The accompanying unaudited interim condensed consolidated financial statements of Hecla Mining Company and its subsidiaries (collectively, “Hecla,” “the Company,” “we,” “our,” or “us,” except where the context requires otherwise) have been prepared in accordance with the instructions to Form accounting principles in the United States of America (“GAAP”). Therefore, this information should be read in conjunction with Hecla Mining Company’s consolidated financial statements and notes contained in our annual report on Form20212022 (“20212022 Form20212022 balance sheet data was derived from our audited consolidated financial statements. The information furnished herein reflects all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods reported. All such adjustments are, in the opinion of management, of a normal recurring nature. Operating results for the three- and nine-month periodsthree-month period ended September 30, 2022March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.2023.
Note 2. Business Segments and Sales of the remaining 90.1%of Alexco Resource Corp. (“Alexco”) for non-cash consideration of17,992,875shares of Company common stock valued at $68.7 million.Total consideration for the acquisition, deemed to be an asset acquisition under GAAP, was $81.5million of which $76.4 million was non cash including the fair value of the Company’s common stock issued and the fair value of the9.9%Alexco investment held by the Company prior to the completion of the acquisition and previously accounted for as marketable equity securities of $7.7 million. Acquisition costs also included transaction costs of $5.1 million. The total consideration was allocated to the acquired assets and assumed liabilities based on their estimated fair values on the acquisition date, which primarily consisted of mineral interests of
We discover, acquire and develop mines and other mineral interests and produce and market (i) concentrates, containing silver, gold, lead and zinc, (ii) carbon material containing silver and gold, and (iii) doré containing silver and gold. We are currently organized and managed in fourfive segments: Greens Creek, Lucky Friday, Keno Hill, Casa Berardi and Nevada Operations.
General corporate activities not associated with operating mines and their various exploration activities, as well as discontinued operations, explorationidle properties and development projects and idle properties,environmental remediation services in the Yukon, are presented as “other.” Interest expense, interest income and income and mining taxes are considered general corporate items, and are not allocated to our segments.
The following tables present information about our reportable segments metal sales for the three and nine months ended September 30,March 31, 2023 and 2022 and 2021 (in thousands):
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Net sales to unaffiliated customers: | ||||||||||||||||
Greens Creek | $ | 60,875 | $ | 84,806 | $ | 239,688 | $ | 296,978 | ||||||||
Lucky Friday | 28,460 | 29,783 | 102,380 | 98,550 | ||||||||||||
Casa Berardi | 56,939 | 56,065 | 181,679 | 185,098 | ||||||||||||
Nevada Operations | — | 22,906 | 268 | 41,593 | ||||||||||||
Other | 65 | — | 65 | 176 | ||||||||||||
$ | 146,339 | $ | 193,560 | $ | 524,080 | $ | 622,395 | |||||||||
Income (loss) from operations: | ||||||||||||||||
Greens Creek | $ | 1,378 | $ | 26,572 | $ | 63,768 | $ | 127,605 | ||||||||
Lucky Friday | 4,269 | 6,187 | 18,568 | 24,247 | ||||||||||||
Casa Berardi | (5,226 | ) | (6,233 | ) | (8,497 | ) | 4,944 | |||||||||
Nevada Operations | (8,917 | ) | (12,077 | ) | (30,879 | ) | (35,558 | ) | ||||||||
Other | (16,963 | ) | (23,021 | ) | (45,949 | ) | (59,639 | ) | ||||||||
$ | (25,459 | ) | $ | (8,572 | ) | $ | (2,989 | ) | $ | 61,599 | ||||||
|
| Three Months Ended |
| |||||
|
| 2023 |
|
| 2022 |
| ||
Net sales to unaffiliated customers: |
|
|
|
|
|
| ||
Greens Creek |
| $ | 98,611 |
|
| $ | 86,090 |
|
Lucky Friday |
|
| 49,110 |
|
|
| 38,040 |
|
Keno Hill |
|
| — |
|
|
| — |
|
Casa Berardi |
|
| 50,998 |
|
|
| 62,101 |
|
Nevada Operations |
|
| 272 |
|
|
| 268 |
|
Other |
|
| 509 |
|
|
| — |
|
|
| $ | 199,500 |
|
| $ | 186,499 |
|
Income (loss) from operations: |
|
|
|
|
|
| ||
Greens Creek |
| $ | 31,241 |
|
| $ | 34,586 |
|
Lucky Friday |
|
| 14,568 |
|
|
| 8,771 |
|
Keno Hill |
|
| (6,763 | ) |
|
| — |
|
Casa Berardi |
|
| (13,693 | ) |
|
| (2,699 | ) |
Nevada Operations |
|
| (5,410 | ) |
|
| (12,231 | ) |
Other |
|
| (14,390 | ) |
|
| (13,669 | ) |
|
| $ | 5,553 |
|
| $ | 14,758 |
|
The following table presents identifiable assets by reportable segment as of September 30, 2022March 31, 2023 and December 31, 20212022 (in thousands):
|
| March 31, 2023 |
|
| December 31, 2022 |
| ||
Identifiable assets: |
|
|
|
|
|
| ||
Greens Creek |
| $ | 582,855 |
|
| $ | 582,687 |
|
Lucky Friday |
|
| 553,447 |
|
|
| 571,510 |
|
Keno Hill |
|
| 303,340 |
|
|
| 276,096 |
|
Casa Berardi |
|
| 693,763 |
|
|
| 681,631 |
|
Nevada Operations |
|
| 465,037 |
|
|
| 466,722 |
|
Other |
|
| 327,182 |
|
|
| 348,526 |
|
|
| $ | 2,925,624 |
|
| $ | 2,927,172 |
|
7
September 30, 2022 | December 31, 2021 | |||||||
Identifiable assets: | ||||||||
Greens Creek | $ | 594,811 | $ | 589,944 | ||||
Lucky Friday | 534,114 | 516,545 | ||||||
Casa Berardi | 692,833 | 701,868 | ||||||
Nevada Operations | 467,532 | 468,985 | ||||||
Other | 645,339 | 451,466 | ||||||
$ | 2,934,629 | $ | 2,728,808 | |||||
Our sales for the three and nine month periodsperiod ended September 30, 2022March 31, 2023 are comprised of metal sales as described below and $65,000$0.5 million of environmental services revenue.
Sales by metal for the three- and nine-monththree month periods ended September 30,March 31, 2023 and 2022 and 2021 were as follows (in thousands):
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Silver | $ | 45,924 | $ | 61,890 | $ | 182,306 | $ | 232,414 | ||||||||
Gold | 69,289 | 94,984 | 228,475 | 282,471 | ||||||||||||
Lead | 16,033 | 18,082 | 56,912 | 56,198 | ||||||||||||
Zinc | 28,051 | 30,273 | 94,865 | 89,501 | ||||||||||||
Less: Smelter and refining charges | (13,023 | ) | (11,669 | ) | (38,543 | ) | (38,189 | ) | ||||||||
$ | 146,274 | $ | 193,560 | $ | 524,015 | $ | 622,395 | |||||||||
|
| Three Months Ended March 31, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
Silver |
| $ | 81,532 |
|
| $ | 66,332 |
|
Gold |
|
| 75,087 |
|
|
| 77,168 |
|
Lead |
|
| 25,402 |
|
|
| 19,564 |
|
Zinc |
|
| 32,943 |
|
|
| 35,638 |
|
Less: Smelter and refining charges |
|
| (15,973 | ) |
|
| (12,203 | ) |
|
| $ | 198,991 |
|
| $ | 186,499 |
|
Sales of metals for the three month periods ended March 31, 2023 and 2022, included a net gainsgain of $1.6$0.9 million and $8.1a net loss of $4.8 million, for thethree-andnine-month periods ended September 30, 2022, respectively, on financially-settled forward option contracts for silver, gold, lead and zinc contained in our sales. Sales included net gains of $5.0 million and $4.5 million for thethree-andnine-month periods ended September 30, 2021, respectively, on such contracts.zinc. See
Note 3. Income and Mining Taxes
Major components of our income and mining tax benefit (provision) for the three and nine months ended September 30,March 31, 2023 and 2022 and 2021 are as follows (in thousands):
|
| Three Months Ended |
| |||||
|
| March 31, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
Current: |
|
|
|
|
|
| ||
Domestic |
| $ | (1,528 | ) |
| $ | (2,103 | ) |
Foreign |
|
| (1,174 | ) |
|
| (1,741 | ) |
Total current income and mining tax provision |
|
| (2,702 | ) |
|
| (3,844 | ) |
Deferred: |
|
|
|
|
|
| ||
Domestic |
|
| (5,341 | ) |
|
| (5,091 | ) |
Foreign |
|
| 4,801 |
|
|
| 3,304 |
|
Total deferred income and mining tax provision |
|
| (540 | ) |
|
| (1,787 | ) |
Total income and mining tax provision |
| $ | (3,242 | ) |
| $ | (5,631 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Current: | ||||||||||||||||
Domestic | $ | 253 | $ | (2,176 | ) | $ | (2,296 | ) | $ | (7,489 | ) | |||||
Foreign | (1,085 | ) | (1,578 | ) | (4,172 | ) | (4,690 | ) | ||||||||
Total current income and mining tax provision | (832 | ) | (3,754 | ) | (6,468 | ) | (12,179 | ) | ||||||||
Deferred: | ||||||||||||||||
Domestic | 8,156 | 3,213 | 915 | 8,226 | ||||||||||||
Foreign | 2,203 | 5,074 | 9,195 | 7,877 | ||||||||||||
Total deferred income and mining tax benefit | 10,359 | 8,287 | 10,110 | 16,103 | ||||||||||||
Total income and mining tax benefit (provision) | $ | 9,527 | $ | 4,533 | $ | 3,642 | $ | 3,924 | ||||||||
The income and mining tax benefit (provision) for the three and nine months ended September 30,March 31, 2023 and 2022 and 2021 varies from the amounts that would have resulted from applying the statutory tax rates toand
For the three-month and nine-month periodsthree month period ended September 30, 2022,March 31, 2023, we used the annual effective tax rate method to calculate the tax provision, a change from the discrete method used for the three- and nine-month periods ended September 30, 2021, due to reversal of a valuation allowance in the fourth quarter of 2021.provision. Valuation allowances on Nevada, Mexico and certain Canadian net operating losses were treated as discrete adjustments to the annual effective tax rate method calculation including losses incurred by the acquired Alexco Resource Corp. ("Alexco") entities, which were acquired on September 7, 2022, partially causing the increase in the income tax rate for the three and nine months ended September 30, 2022,March 31, 2023, as compared to the three and nine months ended September 30, 2021.March 31, 2022.
Note 4.Employee Benefit Plans
We sponsor three defined benefit pension plans covering substantially all U.S. employees. Net periodic pension cost for the plans consisted of the following for the three and nine months ended September 30,March 31, 2023 and 2022 and 2021 (in thousands):
|
| Three Months Ended |
| |||||
|
| 2023 |
|
| 2022 |
| ||
Service cost |
| $ | 949 |
|
| $ | 1,566 |
|
Interest cost |
|
| 1,993 |
|
|
| 1,369 |
|
Expected return on plan assets |
|
| (3,107 | ) |
|
| (3,363 | ) |
Amortization of prior service cost |
|
| 125 |
|
|
| 128 |
|
Amortization of net loss |
|
| (47 | ) |
|
| 512 |
|
Net periodic pension (benefit) cost |
| $ | (87 | ) |
| $ | 212 |
|
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Service cost | $ | 1,566 | $ | 1,455 | $ | 4,697 | $ | 4,365 | ||||||||
Interest cost | 1,369 | 1,248 | 4,107 | 3,744 | ||||||||||||
Expected return on plan assets | (3,363 | ) | (2,313 | ) | (10,089 | ) | (6,939 | ) | ||||||||
Amortization of prior service cost | 128 | 99 | 384 | 297 | ||||||||||||
Amortization of net loss | 512 | 1,125 | 1,537 | 3,375 | ||||||||||||
Net periodic pension cost | $ | 212 | $ | 1,614 | $ | 636 | $ | 4,842 | ||||||||
For the three- and nine-monththree month periods ended September 30,March 31, 2023 and 2022, and 2021, the service cost component of net periodic pension cost is included in the same line items of our condensed consolidated financial statements as other employee compensation costs. The net benefit related
8
to all other components of net periodic pension cost of $1.4$1.0 million and $4.1 million, respectively, for the three- and nine-month periods ended September 30, 2022, and net expense of $0.2 million and $0.5$1.4 million for the three-three month period ended March 31, 2023, and nine-month periods ended September 30, 2021,2022, respectively, is included in other (expense) income on our condensed consolidated statements of operations and comprehensive income (loss). income.
Note 5. (Loss) Income Per Common Share
We calculate basic (loss) income per common share on the basis of the weighted average number of shares of common stock outstanding during the period. Diluted income per share is calculated using the weighted average number of shares of common stock outstanding during the period plus the effect of potential dilutive common shares during the period using the treasury stock and
Potential dilutive shares of common stock include outstanding unvested restricted stock awards, deferred restricted stock units, warrants and convertible preferred stock for periods in which we have reported net income. For periods in which we report net losses, potential dilutive shares of common stock are excluded, as their conversion and exercise would be anti-dilutive.
The following table represents net (loss) income per common share – basic and diluted (in thousands, except income (loss) per share):
|
| Three Months Ended March 31, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
Numerator |
|
|
|
|
|
| ||
Net (loss) income |
| $ | (3,173 | ) |
| $ | 4,153 |
|
Preferred stock dividends |
|
| (138 | ) |
|
| (138 | ) |
Net (loss) income applicable to common shares |
| $ | (3,311 | ) |
| $ | 4,015 |
|
|
|
|
|
|
|
| ||
Denominator |
|
|
|
|
|
| ||
Basic weighted average common shares |
|
| 600,075 |
|
|
| 538,490 |
|
Dilutive restricted stock units, warrants and deferred shares |
|
| — |
|
|
| 5,571 |
|
Diluted weighted average common shares |
|
| 600,075 |
|
|
| 544,061 |
|
|
|
|
|
|
|
| ||
Basic (loss) income per common share |
| $ | (0.01 | ) |
| $ | 0.01 |
|
Diluted (loss) income per common share |
| $ | (0.01 | ) |
| $ | 0.01 |
|
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Numerator | ||||||||||||||||
Net (loss) income | $ | (23,526 | ) | $ | (979 | ) | $ | (32,896 | ) | $ | 23,220 | |||||
Preferred stock dividends | (138 | ) | (138 | ) | (414 | ) | (414 | ) | ||||||||
Net (loss) income applicable to common shares | $ | (23,664 | ) | $ | (1,117 | ) | $ | (33,310 | ) | $ | 22,806 | |||||
Denominator | ||||||||||||||||
Basic weighted average common shares | 554,531 | 536,966 | 544,000 | 535,542 | ||||||||||||
Dilutive restricted stock units, warrants and deferred shares | — | — | — | 6,227 | ||||||||||||
Diluted weighted average common shares | 554,531 | 536,966 | 544,000 | 541,769 | ||||||||||||
Basic (loss) income per common share | $ | (0.04 | ) | $ | — | $ | (0.06 | ) | $ | 0.04 | ||||||
Diluted (loss) income per common share | $ | (0.04 | ) | $ | — | $ | (0.06 | ) | $ | 0.04 |
For the three month periodsmonths ended September 30, 2022 and 2021, respectively, and the nine month period ended September 30, 2022,March 31, 2023, all outstanding unvested restricted stock units, deferred restricted stock units, warrants and deferred sharesconvertible preferred stock were excluded from the computation of diluted loss per share, as our reported net losses for those periodsloss would cause their conversion and exercise to have noan anti-dilutive effect on the calculation of diluted loss per share.For the ninethree months ended September 30, 2021,March 31, 2022, the calculation of diluted income per common share included (i) 2,496,622 restricted stock1,954,773 incentive compensation units
that were unvested during the period, (ii) 1,578,2931,506,950 warrants to purchase one share of common stock and (iii) 2,152,5782,109,056 deferred compensation stock unitsshares that were dilutive.
Note 6. Stockholders’ Equity
At-The-Market
Pursuant to an equity distribution agreement dated February 18, 2021, we may offer and sell up to 60 million shares of our common stock from time to time to or through sales agents. Sales of the shares, if any, will be made by means of ordinary brokers transactions or as otherwise agreed between the Company and the agents as principals. Whether or not we engage in sales from time to time may depend on a variety of factors, including our share price, our cash resources, customarySeptember 30, 2022March 31, 2023 we had sold 1,176,8616,033,473 shares under the agreement for proceeds of $4.5$29.2 million, net of commissions and fees of approximately $0.1$0.5 million. AllOf this balance, 2,173,274shares were sold during the three months ended March 31, 2023 for proceeds of the sales occurred during September 2022.
Stock-based Compensation Plans
The Company has stock incentive plans for executives, directors and eligible employees, comprised of performance shares and restricted stock. Stock-based compensation expense for restricted stock unit and performance-based grants (collectively “incentive compensation”"incentive compensation") to employees and shares issued to$1.8$1.2 million and $4.3$1.3 million for the three months
9
ended March 31, 2023 and nine months ended September 30, 2022, respectively, and $1.5 million and $4.8 million for the three and nine months ended September 30, 2021, respectively. At September 30, 2022,March 31, 2023, there was $8.4$5.2 million of unrecognized stock-based compensation cost which is expected to be recognized over a weighted-average remaining vesting period of 1.8 1.2 years.
Grant date | Award type | Number granted | Grant date fair value | |||
June 21, 2022 | Restricted stock | 1,103,801 | $ 4.43 | |||
June 21, 2022 | Performance based | 322,799 | $ 3.78 | |||
June 28, 2022 | Directors retainer | 98,310 | $ 4.24 | |||
September 30, 2022 | Restricted stock | 121,826 | $ 3.94 |
In connection with the vesting of incentive compensation, employees have in the past, at their election and when permitted by us, chosen to satisfy their minimum tax withholding obligations through net share settlement, pursuant to which the Company withholds the number of shares necessary to satisfy such withholding obligations and pays the obligations in cash. As a result, in the first ninethree months of 2022,2023, we withheld 737,25896,659 shares valued at approximately $3.7 $0.5million, or approximately $4.99$4.98 per share. In the first nine months of 2021, we withheld 574,251 shares valued at approximately $4.5 million, or approximately $7.88 per share.
Common Stock Dividends
The following table summarizes the dividends our Board of Directors have declared and we have paid during 20222023 pursuant to our dividend policy:
Quarter |
| Prior Quarter Realized Silver Price |
| Silver-linked component |
| Minimum component |
| Total dividend per share |
First |
| 22.03 |
| $0.0025 |
| $0.00375 |
| $0.00625 |
Quarter | Realized Silver Price | Silver-linked component | Minimum component | Total dividend per share | ||||
First | $24.68 | $0.0025 | $0.00375 | $0.00625 | ||||
Second | $20.68 | $0.0025 | $0.00375 | $0.00625 |
Note 7. Debt, Credit Agreement and Leases
Our debt as of September 30, 2022March 31, 2023 and December 31, 20212022 consisted of our 7.25%7.25% Senior Notes due February 15, 2028 (“Senior Notes”) and our Seriesthe Newour $150 million Credit Agreement, which is described separately below. The following tables summarize our long-term debt balances, excluding interest and borrowings under the New Credit Agreement, as of September 30, 2022March 31, 2023 and December 31, 20212022 (in thousands):
|
| March 31, 2023 |
| |||||||||
|
| Senior Notes |
|
| IQ Notes |
|
| Total |
| |||
Principal |
| $ | 475,000 |
|
| $ | 35,643 |
|
| $ | 510,643 |
|
Unamortized discount/premium and issuance costs |
|
| (4,415 | ) |
|
| 356 |
|
|
| (4,059 | ) |
Long-term debt balance |
| $ | 470,585 |
|
| $ | 35,999 |
|
| $ | 506,584 |
|
|
| December 31, 2022 |
| |||||||||
|
| Senior Notes |
|
| IQ Notes |
|
| Total |
| |||
Principal |
| $ | 475,000 |
|
| $ | 35,614 |
|
| $ | 510,614 |
|
Unamortized discount/premium and issuance costs |
|
| (4,640 | ) |
|
| 392 |
|
|
| (4,248 | ) |
Long-term debt balance |
| $ | 470,360 |
|
| $ | 36,006 |
|
| $ | 506,366 |
|
September 30, 2022 | ||||||||||||
Senior Notes | IQ Notes | Total | ||||||||||
Principal | $ | 475,000 | $ | 35,194 | $ | 510,194 | ||||||
Unamortized discount/premium and issuance costs | (4,868 | ) | 419 | (4,449 | ) | |||||||
Long-term debt balance | $ | 470,132 | $ | 35,613 | $ | 505,745 | ||||||
December 31, 2021 | ||||||||||||
Senior Notes | IQ Notes | Total | ||||||||||
Principal | $ | 475,000 | $ | 38,051 | $ | 513,051 | ||||||
Unamortized discount/premium and issuance costs | (5,552 | ) | 596 | (4,956 | ) | |||||||
Long-term debt balance | $ | 469,448 | $ | 38,647 | $ | 508,095 | ||||||
The following table summarizes the scheduled annual future payments, including interest, for our Senior Notes, IQ Notes, and finance and operating leases as of September 30, 2022March 31, 2023 (in thousands). The amounts for the IQ Notes are stated in U.S. dollars (“USD”) based on the USD/Canadian dollar (“CAD”) exchange rate as of September 30, 2022.March 31, 2023.
Twelve-month period ending March 31, |
| Senior Notes |
|
| IQ Notes |
|
| Finance Leases |
|
| Operating Leases |
| ||||
2024 |
| $ | 34,438 |
|
| $ | 2,322 |
|
| $ | 8,812 |
|
| $ | 2,652 |
|
2025 |
|
| 34,438 |
|
|
| 38,604 |
|
|
| 6,813 |
|
|
| 1,276 |
|
2026 |
|
| 34,438 |
|
|
| — |
|
|
| 3,681 |
|
|
| 1,281 |
|
2027 |
|
| 34,438 |
|
|
| — |
|
|
| 1,327 |
|
|
| 1,256 |
|
2028 |
|
| 505,131 |
|
|
| — |
|
|
| 23 |
|
|
| 1,161 |
|
Thereafter |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 6,307 |
|
|
|
| 642,883 |
|
|
| 40,926 |
|
|
| 20,656 |
|
|
| 13,933 |
|
Less: effect of discounting |
|
| — |
|
|
| — |
|
|
| (1,239 | ) |
|
| (3,285 | ) |
Total |
| $ | 642,883 |
|
| $ | 40,926 |
|
| $ | 19,417 |
|
| $ | 10,648 |
|
Twelve-month period ending September 30, | Senior Notes | IQ Notes | Finance Leases | Operating Leases | ||||||||||||
2023 | $ | 34,438 | $ | 2,293 | $ | 9,296 | $ | 3,101 | ||||||||
2024 | 34,438 | 2,293 | 7,206 | 1,565 | ||||||||||||
2025 | 34,438 | 36,964 | 3,779 | 1,065 | ||||||||||||
2026 | 34,438 | 1,980 | 1,060 | |||||||||||||
2027 | 34,438 | — | 37 | 979 | ||||||||||||
Thereafter | 487,914 | — | — | 5,878 | ||||||||||||
Total | $ | 660,104 | $ | 41,550 | $ | 22,298 | $ | 13,648 | ||||||||
Credit Facility
On July 21, 2022, we entered into a Credit Agreement (“New Credit Agreement”revolving credit facility (the "Credit Agreement") with the various financial institutions (the “Lenders”), Bank of Montreal and Bank of America, N.A. as letters of credit issuers, and Bank of America, N.A., as administrative agent for the Lenders and as swingline lender, to replace our prior credit agreement. The New Credit Agreement is a $150$150 million senior secured revolving facility, with an option to be increased in an aggregate amount not to exceed $75$75 million. TheAny revolving loans under the New Credit Agreement will have a maturity date of July 21, 2026. Proceeds of the revolving loans under the New Credit Agreement may be used for general corporate purposes. The interest rate on the outstanding loans under the New Credit Agreement is based on the Company’s net leverage ratio and is calculated at (i) Term Secured Overnight Financing Rate (“SOFR”("SOFR") plus 2%2% to 3.5%3.5%; or (ii) Bank of America’s Base Rate plus 1%1% to 2.5%2.5% with Base Rate being the highest of (i) the Bank of America prime rate, (ii) the Federal Funds rate plus .50% .50%
10
or (iii) Term SOFR plus 1.00%1.00%. For each amount drawn, we elect whether we draw on a one, three or six month basis or annual basis for SOFR. If we elect to draw for greater than six months, we pay interest quarterly on the outstanding amount.
We are also required to pay a commitment fee of between 0.45%0.45% to 0.78750%0.78750%, depending on our net leverage ratio. Letters of credit issued under the New Credit Agreement bear a fee between 2.00%2.00% and 3.50%3.50% based on our net leverage ratio, as well as a fronting fee to each issuing bank at an agreed upon rate per annum on the average daily dollar amount of our letter of credit exposure.
Hecla Mining Company and certain of our subsidiaries are the borrowers under the New Credit Agreement, while certain of our other subsidiaries are guarantors of the borrowers’ obligations under the New Credit Agreement. As further security, the credit facilityCredit Agreement is collateralized by a mortgage on the Greens Creek mine, the equity interests of subsidiaries that own the Greens Creek mine or are part of the Greens Creek Joint Venture and our subsidiary Hecla Admiralty Company (the “Greens Creek Group”), and by all of the Green Creek Group’s rights and interests in the Greens Creek Joint Venture Agreement, and in all assets of the joint venture and of any member of the Greens Creek Group.
At September 30, 2022, we had drawn $25March 31, 2023, there was $6.7 million at an interest rate of 7.5% and had $7.8 million in outstanding letters of credit under the New Credit Agreement.credit. Letters of credit that are outstanding reduce availability under the New Credit Agreement.
We believe we were in compliance with all covenants under the New Credit Agreement as of September 30, 2022.
Note 8. Derivative Instruments
General
Our current risk management policy provides that up to 75%75% of five years of our foreign currency, lead and zinc metals price and silver and gold price exposure may be covered under a derivatives program with certain other limitations. The silver and gold price program can only establish a floor (puts). We are not currently utilizing this silver and gold program. Our program also utilizes derivatives to manage price risk exposure created from when revenue is recognized from a shipment of concentrate until final settlement.
These instruments expose us to (i) credit risk in the form of
Foreign Currency
Our wholly-owned subsidiaries owning the Casa Berardi operation as well as the recently acquiredand Keno Hill development property which Alexco ownedoperation aresubsidiaries’subsidiaries' future operating and capital costs denominated in CAD. The program utilizes forward contracts to buy CAD, some of which are designated as cash flow hedges. As of September 30, 2022,March 31, 2023, we have
As of September 30, 2022March 31, 2023 and December 31, 2021,2022, we recorded the following balances for the fair value of the contracts (in millions):
|
| March 31, |
|
| December 31, |
| ||
Balance sheet line item: |
| 2023 |
|
| 2022 |
| ||
Other current assets |
| $ | 1.6 |
|
| $ | 1.1 |
|
Other non-current assets |
|
| 0.8 |
|
|
| 0.4 |
|
Current derivative liabilities |
|
| 3.6 |
|
|
| 4.0 |
|
Non-current derivative liabilities |
| $ | 3.1 |
|
| $ | 3.6 |
|
September 30, | December 31, | |||||||
Balance sheet line item: | 2022 | 2021 | ||||||
Current derivatives assets | $ | 0.3 | $ | 2.7 | ||||
Non-current derivatives assets | 0.3 | 2.5 | ||||||
Current derivatives liabilities | 5.8 | — | ||||||
Non-current derivatives liabilities | 5.6 | — |
Net unrealized losses of approximately $10.8$6.1 million related to the effective portion of the hedges wereare included in accumulated other comprehensive income (loss) as of September 30, 2022.March 31, 2023. Unrealized gains and losses will be transferred from accumulated other comprehensive income (loss) to current earnings as the underlying operating expenses are recognized. We estimate approximately $5.1$3.3 million in net unrealized losses included in accumulated other comprehensive income (loss) as of September 30, 2022March 31, 2023 will be reclassified to current earnings in the next twelve months. Net realized gainslosses of approximately $0.2 million and $2.0$0.9 million on contracts related to underlying expenses which have been recognized were transferred from accumulated other comprehensive income (loss) and included in cost of sales and other direct production costs for the three and nine months ended September 30, 2022, respectively. NoMarch 31, 2023. Net gains of $0.7 million for the three months ended March 31, 2023 related to contracts not designated as hedges and no net unrealized gains or losses related to ineffectiveineffectiveness of the hedges wereare included in current earnings for the nine months ended September 30, 2022. Net losses of approximately $0.8 million and $1.1 million for the three and nine months ended September 30, 2022, respectively, related to contracts not designated as hedges were included
11
in fair value adjustments, net on our consolidated statements of operations and comprehensive income for the three and nine months ended September 30, 2022.
Metals Prices
We are currently using financially-settled forward contracts to manage the exposure to:
The following tables summarize the quantities of metals committed under forward sales contracts at September 30, 2022March 31, 2023 and December 31, 2021:2022:
March 31, 2023 |
| Ounces/pounds under contract (in 000's) |
|
| Average price per ounce/pound |
| ||||||||||||||||||||||||||
|
| Silver |
|
| Gold |
|
| Zinc |
|
| Lead |
|
| Silver |
|
| Gold |
|
| Zinc |
|
| Lead |
| ||||||||
|
| (ounces) |
|
| (ounces) |
|
| (pounds) |
|
| (pounds) |
|
| (ounces) |
|
| (ounces) |
|
| (pounds) |
|
| (pounds) |
| ||||||||
Contracts on provisional sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
2023 settlements |
|
| 3,350 |
|
|
| 8 |
|
|
| 15,543 |
|
|
| 18,133 |
|
| $ | 22.27 |
|
| $ | 1,883 |
|
| $ | 1.35 |
|
| $ | 1.01 |
|
Contracts on forecasted sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
2023 settlements |
|
| — |
|
|
| — |
|
|
| 29,873 |
|
|
| 38,581 |
|
|
| — |
|
|
| — |
|
| $ | 1.47 |
|
| $ | 1.00 |
|
2024 settlements |
|
| — |
|
|
| — |
|
|
| 1,764 |
|
|
| 75,178 |
|
|
| — |
|
|
| — |
|
|
| 1.31 |
|
| $ | 0.98 |
|
2025 settlements |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 882 |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 0.97 |
|
December 31, 2022 |
| Ounces/pounds under contract (in 000's) |
|
| Average price per ounce/pound |
| ||||||||||||||||||||||||||
|
| Silver |
|
| Gold |
|
| Zinc |
|
| Lead |
|
| Silver |
|
| Gold |
|
| Zinc |
|
| Lead |
| ||||||||
|
| (ounces) |
|
| (ounces) |
|
| (pounds) |
|
| (pounds) |
|
| (ounces) |
|
| (ounces) |
|
| (pounds) |
|
| (pounds) |
| ||||||||
Contracts on provisional sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
2023 settlements |
|
| 3,124 |
|
|
| 8 |
|
|
| 18,629 |
|
|
| 11,960 |
|
| $ | 21.55 |
|
| $ | 1,795 |
|
| $ | 1.38 |
|
| $ | 0.98 |
|
Contracts on forecasted sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
2023 settlements |
|
| — |
|
|
| — |
|
|
| 37,533 |
|
|
| 75,618 |
|
| N/A |
|
| N/A |
|
| $ | 1.34 |
|
| $ | 1.00 |
| ||
2024 settlements |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 45,856 |
|
| N/A |
|
| N/A |
|
| N/A |
|
| $ | 0.99 |
|
September 30, 2022 | Ounces/pounds under contract (in 000’s) | Average price per ounce/pound | ||||||||||||||||||||||||||||||
Silver | Gold | Zinc | Lead | Silver | Gold | Zinc | Lead | |||||||||||||||||||||||||
(ounces) | (ounces) | (pounds) | (pounds) | (ounces) | (ounces) | (pounds) | (pounds) | |||||||||||||||||||||||||
Contracts on provisional sales | ||||||||||||||||||||||||||||||||
2022 settlements | 2,235 | 1,840 | 18,739 | 14,991 | $ | 19.54 | $ | 1,760 | $ | 1.30 | $ | 0.96 | ||||||||||||||||||||
Contracts on forecasted sales | ||||||||||||||||||||||||||||||||
2022 settlements | 2,235 | 1,840 | 8,763 | 1,984 | N/A | N/A | $ | 1.32 | $ | 0.97 | ||||||||||||||||||||||
2023 settlements | — | — | 71,209 | 75,618 | N/A | N/A | $ | 1.30 | $ | 1.00 | ||||||||||||||||||||||
2024 settlements | — | — | 78,760 | 31,526 | N/A | N/A | $ | 1.34 | $ | 1.00 | ||||||||||||||||||||||
2025 settlements | — | — | 2,480 | — | N/A | N/A | $ | 1.33 | N/A |
December 31, 2021 | Ounces/pounds under contract (in 000’s) | Average price per ounce/pound | ||||||||||||||||||||||||||||||
Silver | Gold | Zinc | Lead | Silver | Gold | Zinc | Lead | |||||||||||||||||||||||||
(ounces) | (ounces) | (pounds) | (pounds) | (ounces) | (ounces) | (pounds) | (pounds) | |||||||||||||||||||||||||
Contracts on provisional sales | ||||||||||||||||||||||||||||||||
2022 settlements | 1,814 | 6 | 13,371 | 4,575 | $ | 23.02 | $ | 1,812 | $ | 1.39 | $ | 0.96 | ||||||||||||||||||||
Contracts on forecasted sales | ||||||||||||||||||||||||||||||||
2022 settlements | — | — | 57,706 | 59,194 | N/A | N/A | $ | 1.28 | $ | 0.98 | ||||||||||||||||||||||
2023 settlements | — | — | 76,280 | 71,650 | N/A | N/A | $ | 1.29 | $ | 1.00 |
We recorded the following balances for the fair value of the forward contracts as of September 30, 2022March 31, 2023 and forward and put option contracts as of December 31, 20212022 (in millions):
|
| March 31, 2023 |
|
| December 31, 2022 |
| ||||||||||||||||||
Balance sheet line item: |
| Contracts in an asset position |
|
| Contracts in a liability position |
|
| Net asset (liability) |
|
| Contracts in an asset position |
|
| Contracts in a liability position |
|
| Net asset (liability) |
| ||||||
Other current assets |
| $ | 5.3 |
|
| $ | — |
|
| $ | 5.3 |
|
| $ | 1.2 |
|
| $ | — |
|
| $ | 1.2 |
|
Other non-current assets |
| $ | 1.3 |
|
| $ | — |
|
| $ | 1.3 |
|
| $ | 0.1 |
|
| $ | — |
|
| $ | 0.1 |
|
Current derivative liabilities |
|
| — |
|
|
| (4.6 | ) |
|
| (4.6 | ) |
|
| — |
|
|
| (12.1 | ) |
|
| (12.1 | ) |
Non-current derivative liabilities |
|
| — |
|
|
| (0.05 | ) |
|
| (0.1 | ) |
|
| — |
|
|
| (2.5 | ) |
|
| (2.5 | ) |
September 30, 2022 | December 31, 2021 | |||||||||||||||||||||||
Balance sheet line item: | Contracts in an asset position | Contracts in a liability position | Net asset (liability) | Contracts in an asset position | Contracts in a liability position | Net asset (liability) | ||||||||||||||||||
Current derivatives assets | $ | 6.9 | $ | — | $ | 6.9 | $ | — | $ | — | $ | — | ||||||||||||
Non-current derivatives assets | $ | 20.5 | $ | — | 20.5 | $ | — | $ | — | $ | — | |||||||||||||
Current derivatives liabilities | — | — | — | 0.7 | (20.1 | ) | (19.4 | ) | ||||||||||||||||
Non-current derivatives liabilities | — | — | — | 0.4 | (18.9 | ) | (18.5 | ) |
Net realized and unrealized gains of approximately $28.3$24.8 million related to the effective portion of the contracts designated as hedges were included in accumulated other comprehensive income (loss) as of September 30, 2022,March 31, 2023, and are net of related deferred taxes. Unrealized gains and losses will be transferred from accumulated other comprehensive income (loss) to current
Credit-risk-related Contingent Features
Certain of our derivative contracts contain cross default provisions which provide that a default under our New Credit Agreement would cause a default under the derivative contract. As of September 30, 2022,March 31, 2023, we have not posted any collateral related to these contracts. The fair value of derivatives in a net liability position related to these agreements was $14.2$14.0 million as of September 30, 2022,March 31, 2023, which includes
12
accrued interest but excludes any adjustment for nonperformance risk. If we were in breach of any of these provisions at September 30, 2022,March 31, 2023, we could have been required to settle our obligations under the agreements at their termination value of $14.2$14.0 million.
Note 9. Fair Value Measurement
Fair value adjustments, net is comprised of the following:
|
| Three Months Ended March 31, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
Gain (loss) on derivative contracts |
| $ | 987 |
|
| $ | (201 | ) |
Unrealized gain on equity securities investments |
|
| 2,194 |
|
|
| 6,100 |
|
Gain on disposition or exchange of investments |
|
| — |
|
|
| 66 |
|
Total fair value adjustments, net |
| $ | 3,181 |
|
| $ | 5,965 |
|
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(Loss) gain on derivative contracts | $ | 873 | $ | 12,148 | $ | (20) | $ | (4,692 | ) | |||||||
Unrealized loss on investments in equity securities | (5,110 | ) | (2,861 | ) | (14,749 | ) | (7,117 | ) | ||||||||
(Loss) gain on disposition or exchange of investments | (3 | ) | — | 66 | 1,158 | |||||||||||
Total fair value adjustments, net | $ | (4,240 | ) | $ | 9,287 | $ | (14,703 | ) | $ | (10,651 | ) | |||||
Accounting guidance has established a hierarchy for inputs used to measure assets and liabilities at fair value on a recurring basis. The three levels included in the hierarchy are:
Level 1: quoted prices in active markets for identical assets or liabilities;
Level 2: significant other observable inputs; and
Level 3: significant unobservable inputs.
The table below sets forth our assets and liabilities that were accounted for at fair value on a recurring basis and the fair value calculation input hierarchy level that we have determined applies to each asset and liability category (in thousands).
Description |
| Balance at |
|
| Balance at |
|
| Input | ||
Assets: |
|
|
|
|
|
|
|
| ||
Cash and cash equivalents: |
|
|
|
|
|
|
|
| ||
Money market funds and other bank deposits |
| $ | 95,939 |
|
| $ | 104,743 |
|
| Level 1 |
Current and non-current investments |
|
|
|
|
|
|
|
| ||
Equity securities - mining industry |
|
| 26,434 |
|
|
| 24,018 |
|
| Level 1 |
Trade accounts receivable: |
|
|
|
|
|
|
|
| ||
Receivables from provisional concentrate sales |
|
| 28,535 |
|
|
| 45,146 |
|
| Level 2 |
Restricted cash balances: |
|
|
|
|
|
|
|
| ||
Certificates of deposit and other deposits |
|
| 1,347 |
|
|
| 1,164 |
|
| Level 1 |
Derivative contracts - current and non-current derivatives assets: |
|
|
|
|
|
|
|
| ||
Foreign exchange contracts |
|
| 2,359 |
|
|
| 1,518 |
|
| Level 2 |
Metal forward contracts |
|
| 6,636 |
|
|
| 1,309 |
|
| Level 2 |
Total assets |
| $ | 161,250 |
|
| $ | 177,898 |
|
|
|
|
|
|
|
|
|
|
|
| ||
Liabilities: |
|
|
|
|
|
|
|
| ||
Derivative contracts - current derivatives liabilities and other non-current |
|
|
|
|
|
|
|
| ||
Foreign exchange contracts |
| $ | 6,674 |
|
| $ | 7,548 |
|
| Level 2 |
Metal forward contracts |
|
| 4,682 |
|
|
| 14,643 |
|
| Level 2 |
Total liabilities |
| $ | 11,356 |
|
| $ | 22,191 |
|
|
|
Description | Balance at September 30, 2022 | Balance at December 31, 2021 | Input Hierarchy Level | |||||||||
Assets: | ||||||||||||
Cash and cash equivalents: | ||||||||||||
Money market funds and other bank deposits | $ | 144,669 | $ | 210,010 | Level 1 | |||||||
Current and non-current investments | ||||||||||||
Equity securities | 13,299 | 14,470 | Level 1 | |||||||||
Trade accounts receivable: | ||||||||||||
Receivables from provisional concentrate sales | 12,477 | 36,437 | Level 2 | |||||||||
Restricted cash balances: | ||||||||||||
Certificates of deposit and other deposits | 1,246 | 1,053 | Level 1 | |||||||||
Derivative contracts – current and non-current derivatives assets: | ||||||||||||
Foreign exchange contracts | 591 | 5,207 | Level 2 | |||||||||
Metal forward and put option contracts | 27,393 | — | Level 2 | |||||||||
Total assets | $ | 199,675 | $ | 267,177 | ||||||||
Liabilities: | ||||||||||||
Derivative contracts – current derivatives liabilities and other non-current liabilities: | ||||||||||||
Foreign exchange contracts | $ | 11,334 | $ | 8 | Level 2 | |||||||
Metal forward and put option contracts | — | 37,873 | Level 2 | |||||||||
Total liabilities | $ | 11,334 | $ | 37,881 | ||||||||
Cash and cash equivalents consist primarily of money market funds and are valued at cost, which approximates fair value, and a small portion consists of municipal bonds having maturities of less than 90 days, which are recorded at fair value.
Current and
Our
Trade accounts receivable from provisional concentrate sales are subject to final pricing and valued using quoted prices based on forward curves for the particular metals. The embedded derivative contained in our concentrate sales is adjusted to fair market value through earnings each period prior to final settlement.
13
We use financially-settled forward contracts to manage exposure to changes in the exchange rate between USD and CAD, and the impact onunitoperation and the Keno Hill mineoperation (see
We use financially-settled forward contracts to manage the exposure to changes in prices of silver, gold, zinc and lead contained in our concentrate shipments that have not reached final settlement. We also use financially-settled forward contracts to manage the exposure to changes in prices of silver, gold, zinc and lead contained in our forecasted future sales (see
At September 30, 2022,March 31, 2023, our Senior Notes and IQ Notes were recorded at their carrying value of $470.1$470.6 million and $35.6 $36.0million, respectively, net of unamortized initial purchaser discount/premium and issuance costs. The estimated fair values of our Senior Notes and IQ Notes were $442.2$480.6 million and $32.7$35.7 million, respectively, at September 30, 2022.March 31, 2023. Quoted market prices, which we consider to be Level 1 inputs, are utilized to estimate fair values of the Senior Notes. Unobservable inputs which we consider to be Level 3, including an assumed current annual yield of 8.7%7.1%, are utilized to estimate the fair value of the IQ Notes. See
Note 10. Commitments, Contingencies |
Johnny M Mine Area near San Mateo, McKinley County and San Mateo Creek Basin, New Mexico
In August 2012, Hecla Limited and the U.S. Environmental Protection Agency (the “EPA”) entered into a Settlement Agreement and Administrative Order on Consent for Removal Action (“Consent Order”) regarding the Johnny M Mine Area near San Mateo, McKinley County, New Mexico. Mining at the Johnny M Mine was conducted for a limited period of time by a predecessor of Hecla Limited, and the EPA had previously asserted that Hecla Limited may be responsible under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) for environmental remediation and past costs incurred by the EPA at the site. Under the Consent Order, Hecla Limited agreed to pay (i) $1.1$1.1 million to the EPA for its past response costs at the site and (ii) any future response costs at the site under the Consent Order, in exchange for a covenant not to sue by the EPA. In December 2014, Hecla Limited submitted to the EPA the Engineering Evaluation and Cost Analysis (“EE/CA”) for the site which recommendedincreased our accrual by $2.9have accrued $9.0 million, to $9.0 million in the first quarter of 2021, primarily representing estimated current costs to begin design and implementation ofimplement the remedy.remedy, which are subject to change as fieldwork is performed. It is possible that Hecla Limited’s liability will be more than $9.0$9.0 million, and any increase in liability could have a material adverse effect on Hecla Limited’s or our results of operations or financial position.
The Johnny M Mine is in an area known as the San Mateo Creek Basin (“SMCB”), which is an approximately 321 square mile area in New Mexico that contains numerous legacy uranium mines and mills. In addition to Johnny M, Hecla Limited’s predecessor was involved at other mining sites within the SMCB. The EPA appears to have deferred consideration of listing the SMCB site on CERCLA’s National Priorities List (“Superfund”) by removing the site from its emphasis list, and is working with various potentially responsible parties (“PRPs”) at the site in order to study and potentially address perceived groundwater issues within the SMCB. The EE/CA discussed above relates primarily to contaminated rock and soil at the Johnny M site, not groundwater and not elsewhere within the SMCB site. It is possible that Hecla Limited’s liability at the Johnny M Site, and for any other mine site within the SMCB at which Hecla Limited’s predecessor may have operated, will be greater than our current accrual of $9.0 million due to the increased scope of required remediation.
In July 2018, the EPA informed Hecla Limited that it and several other PRPs may be liable for cleanup of the SMCB site or for costs incurred by the EPA in cleaning up the site. The EPA stated it has incurred approximately $9.6$9.6 million in response costs to date. On May 2, 2022, Hecla Limited received a letter from an attorney representing a PRP notifying Hecla Limited that three PRPs will seek cost recovery and contribution from Hecla Limited under CERCLA for certain investigatory work performed by the PRPs at the SMCB site. Hecla Limited cannot with reasonable certainty estimate the amount or range of liability, if any, relating to this matter because of, among other reasons, the lack of information concerning the site, including the relative contributions of contamination by the various PRPs.
Carpenter Snow Creek and Barker-Hughesville Sites in Montana
In July 2010, the EPA made a formal request to Hecla for information regarding the Carpenter Snow Creek Superfund site located in Cascade County, Montana. The Carpenter Snow Creek site is located in a historical mining district, and in the early 1980s
14
Hecla Limited leased 6 mining claims and performed limited exploration activities at the site. Hecla Limited terminated the mining lease in 1988.
In June 2011, the EPA informed Hecla Limited that it believes Hecla Limited, and several other PRPs, may be liable for cleanup of the site or for costs incurred by the EPA in cleaning up the site. The EPA stated in the letter that it has incurred approximately $4.5$4.5 million in response costs and estimated that total remediation costs may exceed $100$100 million. Hecla Limited cannot with reasonable certainty estimate the amount or range of liability, if any, relating to this matter because of, among other reasons, the lack of information concerning the site, including the relative contributions of contamination by various other PRPs.
In February 2017, the EPA made a formal request to Hecla for information regarding the Barker-Hughesville Mining District Superfund site located in Judith Basin and Cascade Counties, Montana. Hecla Limited submitted a response in April 2017. The Barker-Hughesville site is located in a historic mining district, and between approximately June and December 1983, Hecla Limited was party to an agreement with another mining company under which limited exploration activities occurred at or near the site.
In August 2018, the EPA informed Hecla Limited that it and several other PRPs may be liable for cleanup of the site or for costs incurred by the EPA in cleaning up the site. The EPA did not include an amount of its alleged response costs to date. Hecla Limited cannot with reasonable certainty estimate the amount or range of liability, if any, relating to this matter because of, among other reasons, the lack of information concerning past or anticipated future costs at the site and the relative contributions of contamination by various other PRPs.
Greens Creek and Lucky Friday Environmental Issues
On June 30, 2022, our Greens Creek mine received a Notice of Violation (“NOV”) from the EPA alleging that the mine treated, stored, and disposed of certain hazardous waste without a permit in violation of the Resource Conservation and Recovery Act (“RCRA”), relating to the alleged presence of lead outside the concentrate storage building and the alleged improper reuse/recycling of certain materials produced from the
Currently, the EPA has not initiated any formal enforcement proceeding against our Greens Creek subsidiary. In civil judicial cases, EPA can seek statutory penalties up to $81,540$81,540 per day per violation and, in administrative settlements, the EPA can seek administrative penalties of up to $47,423$47,423 per day per violation plus the economic benefit of noncompliance. The EPA typically pursues administrative penalties and assesses lower penalties on a per day basis. At this time, we cannot reasonably assess the amount of penalties the EPA may seek, or predict the terms of any potential settlement with the EPA.
On July 12, 2022, our Lucky Friday mine received a NOV from the EPA alleging violations of the Clean Water Act (“CWA”) between 2018 and 2021 relating primarily to concentration levels of zinc and lead in the mine’s permitted water discharges. Currently, the EPA has not initiated any formal enforcement proceeding against our Lucky Friday subsidiary. In civil judicial cases, the EPA can seek statutory penalties up to $59,973$59,973 per day per violation and, in administrative actions, the EPA can seek administrative penalties up to $23,989$23,989 per day per violation with a maximum administrative penalty of $299,989$299,989 for all alleged violations. The EPA typically pursues administrative penalties. At this time, we cannot reasonably assess the amount of penalties the EPA may seek, or predict the terms of any potential settlement with the EPA.
Litigation Related to Klondex Acquisition
On May 24, 2019, a purported Hecla stockholder filed a putative class action lawsuit in the U.S. District Court for the Southern District of New York against Hecla and certain of our executive officers, one of whom is also a director. The complaint, purportedly brought on behalf of all purchasers of Hecla common stock from March 19, 2018 through and including May 8, 2019, asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and RuleFilings with the court regardingThe Court granted our motionMotion to dismissDismiss the lawsuit, were completedwithout prejudice, in February 2023, and the first quarter of 2021.plaintiffs filed an amended complaint in March 2023 which repeats the same claims. We cannot predict the outcome of this lawsuit or estimate damages if plaintiffs were to prevail. We believe that these claims are without merit and intend to defend them vigorously.
Related to this class action lawsuit, Hecla has been named as a nominal defendant in a shareholder derivative lawsuit which also names as defendants certain current and past (i) members of Hecla’s board of directors and (ii) officers of Hecla. The case was filed
15
on May 4, 2022 in the Delaware Chancery Court. In general terms, the suit alleges breaches of fiduciary duties by the individual defendants, waste of corporate assets and unjust enrichment, and seeks damages, purportedly on behalf of Hecla.
Debt
SeeSeptember 30, 2022.
Other Commitments
Our contractual obligations as of September 30, 2022March 31, 2023 included open purchase orders and commitments of approximately $9.0$15.2 million, $20.4$29.4 million, $1.2$1.3 million,,2.6 millionand$0.31.4 million ,$22.3$20.7 million relating to scheduled payments on finance leases, including interest, primarily for equipment at our Greens Creek, Lucky Friday, Casa Berardi, and Nevada OperationsKeno Hill units, and total commitments of approximately $13.6$13.9 million relating to payments on operating leases (seeSeptember 30, 2022,March 31, 2023, we had surety bonds totaling $193.8$192.8 million and letters of credit totaling $7.8$6.7 million in place as financial support for future reclamation and closure costs, self-insurance, and employee benefit plans. The obligations associated with these instruments are generally related to performance requirements that we address through ongoing operations. As the requirements are met, the beneficiary of the associated instruments cancels or returns the instrument to the issuing entity. Certain of these instruments are associated with operating sites with long-lived assets and will remain outstanding until closure of the sites. We believe we are in compliance with all applicable bonding requirements and will be able to satisfy future bonding requirements as they arise.
Other Contingencies
We also have certain other contingencies resulting from litigation, claims, EPA investigations, and other commitments and are subject to a variety of environmental and safety laws and regulations incident to the ordinary course of business. We currently have no basis to conclude that any or all of such contingencies will materially affect our financial position, results of operations or cash flows. However, in the future, there may be changes to these contingencies, or additional contingencies may occur, any of which might result in an accrual or a change in current accruals recorded by us, and there can be no assurance that their ultimate disposition will not have a material adverse effect on our financial position, results of operations or cash flows.
Note 11. Developments in Accounting Pronouncements
Accounting Standards Updates Adopted
In AugustMarch 2020, ASU No. 2020-04 was issued which provides optional guidance for a limited period of time to ease the Financial Accounting Standards Board (“FASB”)potential burden on accounting for contract modifications caused by reference rate reform. In January 2021, ASU No. 2021-01 was issued which broadened the scope of ASU2020-06Debt – Debt with Conversion and Other Options (Subtopic470-20)and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic815-40):Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.2020-04 to include certain derivative instruments. In December 2022, ASU No. 2022-06 was issued which deferred the sunset date of ASU No. 2020-04. The update is to address issues identified as a result of the complexity associated with applying GAAP to certain financial instruments with characteristics of liabilities and equity. The updateguidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years and with early adoption permitted. We adopted the updateall entities as of January 1, 2022, which did not have a material impact on our consolidated financial statements or disclosures.
Note 12. Subsequent Events
On April 6, 2023, we and ATAC Resources Ltd. ("ATAC") a Canadian publicly traded company, announced a definitive agreement for one of Contents
16
Forward-Looking Statements
Certain statements contained in this Form
These risks, uncertainties and other factors include, but are not limited to, those set forth under20212022 Form10-K,as updated inPart II, Item 1.A. – Risk Factorsin our Quarterly Report on Form10-Qfor the quarter ended June 30, 2022. 10-K. Given these risks and uncertainties, readers are cautioned not to place undue reliance on our forward-looking statements. All subsequent written and oral forward-looking statements attributable to Hecla Mining Company or to persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Except as required by federal securities laws, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
17
Item 2. Management’sManagement's Discussion and Analysis of Financial Condition and Results of Operations
In this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), “Hecla,” “the Company,” “we,” “us” and “our” refer to Hecla Mining Company and its consolidated subsidiaries, except where the context requires otherwise. You should read this discussion in conjunction with our consolidated financial statements, the related MD&A and the discussion of our Business and Properties in our 20212022 Form
Overview
Established in 1891, we believe we are the oldest operating precious metals mining company in the United States. We are the largest silver producer in the United States, producing over 40%45% of the U.S. silver production at our Greens Creek and Lucky Friday operations. We produce gold at our Casa Berardi operation in Quebec, Canada, and Greens Creek, and produced gold at our Nevada Operations segment prior to suspension of operations during 2021. WeCreek. In addition, we are developing the Keno Hill mine in the Yukon, Canada which we acquired on September 7, 2022, and which we believe could become Canada’s largestexpect will start producing silver producer.in the third quarter of 2023. Based upon our operational footprint, we believe we have low political and economic risk compared to other mining companies whose mines are located in other parts of the world. Our exploration interests are located in the United States, Canada and Mexico. Our operating and strategic framework is based on expanding our production and locating and developing new resource potential in a safe and responsible manner.
First Quarter 20222023 Highlights
Operational:
Financial:
Outlook
Our financial results vary as a result of fluctuations in market prices primarily for the rest of 2022. In our 2021 Form10-K,seeItem IA. Risk Factors – Natural disasters, public health crises (includingCOVID-19),political crises,silver and other catastrophic events or other events outside of our control may materiallygold and, adversely affect our business or financial resultsCOVID-19virus pandemic may heighten other risksinformation on how restrictions related toCOVID-19recently affected some of our operations.
18
Consolidated Results of Operations
Sales by metal for the three- and nine-monththree month periods ended September 30,March 31, 2023 and 2022 and 2021 were as follows:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Silver | $ | 45,924 | $ | 61,890 | $ | 182,306 | $ | 232,414 | ||||||||
Gold | 69,289 | 94,984 | 228,475 | 282,471 | ||||||||||||
Lead | 16,033 | 18,082 | 56,912 | 56,198 | ||||||||||||
Zinc | 28,051 | 30,273 | 94,865 | 89,501 | ||||||||||||
Less: smelter charges | (13,023 | ) | (11,669 | ) | (38,543 | ) | (38,189 | ) | ||||||||
Sales of products | $ | 146,274 | $ | 193,560 | $ | 524,015 | $ | 622,395 | ||||||||
|
| Three Months Ended |
| |||||
(in thousands) |
| 2023 |
|
| 2022 |
| ||
Silver |
| $ | 81,532 |
|
| $ | 66,332 |
|
Gold |
|
| 75,087 |
|
|
| 77,168 |
|
Lead |
|
| 25,402 |
|
|
| 19,564 |
|
Zinc |
|
| 32,943 |
|
|
| 35,638 |
|
Less: smelter charges |
|
| (15,973 | ) |
|
| (12,203 | ) |
Sales of products |
| $ | 198,991 |
|
| $ | 186,499 |
|
Sales by metal for the three- and nine-monththree month periods ended September 30,March 31, 2023 and 2022, and 2021, and the approximate variances attributed to differences in metals prices, sales volumes and smelter terms, were as follows:
(in thousands) | Silver | Gold | Base metals | Less: smelter and refining charges | Total sales of products | |||||||||||||||
Three months ended September 30, 2021 | $ | 61,890 | $ | 94,984 | $ | 48,355 | $ | (11,669 | ) | $ | 193,560 | |||||||||
Variances - 2022 versus 2021: | ||||||||||||||||||||
Price | (13,459 | ) | (3,125 | ) | (3,637 | ) | (1,475 | ) | (21,696 | ) | ||||||||||
Volume | (2,134 | ) | (22,570 | ) | (634 | ) | 162 | (25,176 | ) | |||||||||||
Smelter terms | (373 | ) | — | — | (41 | ) | (414 | ) | ||||||||||||
Three months ended September 30, 2022 | $ | 45,924 | $ | 69,289 | $ | 44,084 | $ | (13,023 | ) | $ | 146,274 | |||||||||
(in thousands) | Silver | Gold | Base metals | Less: smelter and refining charges | Total sales of products | |||||||||||||||
Nine months ended September 30, 2021 | $ | 232,414 | $ | 282,471 | $ | 145,699 | $ | (38,189 | ) | $ | 622,395 | |||||||||
Variances - 2022 versus 2021: | ||||||||||||||||||||
Price | (37,682 | ) | 2,557 | 7,748 | (3,381 | ) | (30,758 | ) | ||||||||||||
Volume | (12,335 | ) | (56,468 | ) | (1,670 | ) | 1,567 | (68,906 | ) | |||||||||||
Smelter terms | (91 | ) | (85 | ) | — | 1,460 | 1,284 | |||||||||||||
Nine months ended September 30, 2022 | $ | 182,306 | $ | 228,475 | $ | 151,777 | $ | (38,543 | ) | $ | 524,015 | |||||||||
(in thousands) |
| Silver |
|
| Gold |
|
| Base metals |
|
| Less: smelter and refining charges |
|
| Total sales of products |
| |||||
Three months ended March 31, 2022 |
| $ | 66,332 |
|
| $ | 77,168 |
|
| $ | 55,202 |
|
| $ | (12,203 | ) |
| $ | 186,499 |
|
Variances - 2023 versus 2022: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Price |
|
| (7,458 | ) |
|
| 394 |
|
|
| (11,081 | ) |
|
| (1,489 | ) |
|
| (19,634 | ) |
Volume |
|
| 22,658 |
|
|
| (2,747 | ) |
|
| 14,224 |
|
|
| (3,140 | ) |
|
| 30,995 |
|
Smelter terms |
|
| — |
|
|
| 272 |
|
|
| — |
|
|
| 859 |
|
|
| 1,131 |
|
Three months ended March 31, 2023 |
| $ | 81,532 |
|
| $ | 75,087 |
|
| $ | 58,345 |
|
| $ | (15,973 | ) |
| $ | 198,991 |
|
The fluctuations in sales for the third quarter and first ninethree months of 2022ended 2023 compared to the same periods of 2021period in 2022 were primarily due to the following two reasons:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||
Silver – | London PM Fix ($/ounce) | $ | 19.22 | $ | 24.36 | $ | 21.94 | $ | 25.78 | |||||||||||
Realized price per ounce | $ | 18.30 | $ | 23.97 | $ | 21.25 | $ | 25.75 | ||||||||||||
Gold – | London PM Fix ($/ounce) | $ | 1,728 | $ | 1,789 | $ | 1,825 | $ | 1,801 | |||||||||||
Realized price per ounce | $ | 1,713 | $ | 1,792 | $ | 1,817 | $ | 1,794 | ||||||||||||
Lead – | LME Final Cash Buyer ($/pound) | $ | 0.90 | $ | 1.06 | $ | 0.98 | $ | 0.98 | |||||||||||
Realized price per pound | $ | 0.95 | $ | 1.02 | $ | 0.98 | $ | 1.00 | ||||||||||||
Zinc – | LME Final Cash Buyer ($/pound) | $ | 1.48 | $ | 1.36 | $ | 1.65 | $ | 1.31 | |||||||||||
Realized price per pound | $ | 1.23 | $ | 1.35 | $ | 1.47 | $ | 1.34 |
|
|
|
| Three Months Ended |
| |||||
|
|
|
| 2023 |
|
| 2022 |
| ||
Silver – |
| London PM Fix ($/ounce) |
| $ | 22.56 |
|
| $ | 23.95 |
|
|
| Realized price per ounce |
| $ | 22.62 |
|
| $ | 24.68 |
|
Gold – |
| London PM Fix ($/ounce) |
| $ | 1,889 |
|
| $ | 1,874 |
|
|
| Realized price per ounce |
| $ | 1,902 |
|
| $ | 1,880 |
|
Lead – |
| LME Final Cash Buyer ($/pound) |
| $ | 0.97 |
|
| $ | 1.06 |
|
|
| Realized price per pound |
| $ | 1.02 |
|
| $ | 1.08 |
|
Zinc – |
| LME Final Cash Buyer ($/pound) |
| $ | 1.42 |
|
| $ | 1.70 |
|
|
| Realized price per pound |
| $ | 1.39 |
|
| $ | 1.79 |
|
Average realized prices typically differ from average market prices primarily because concentrate sales are generally recorded as revenues at the time of shipment at forward prices for the estimated month of settlement, which differ from average market prices. Due to the time elapsed between shipment of concentrates and final settlement with the customers, we must estimate the prices at which sales of our metals will be settled. Previously recorded sales are adjusted to estimated settlement metals prices each period through final settlement. For the three- and nine-month periods ended September 30, 2022, weWe recorded net negative price adjustments to provisional settlements of $6.6 million and $21.5 million, respectively, compared to net positive price adjustments to provisional settlements of $0.1$2.1 million and $3.7$1.0 million respectively, infor the three and nine months ended SeptemberMarch 31, 2021.2023 and 2022. The price adjustments related to silver, gold, zinc and lead contained in our concentrate shipments were partially offset by gains and losses on forward contracts for those metals. See
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||
Silver - | Ounces produced | 3,549,392 | 2,676,084 | 10,525,917 | 9,660,313 | |||||||||||||||
Payable ounces sold | 2,479,724 | 2,581,690 | 8,554,894 | 9,027,180 | ||||||||||||||||
Gold - | Ounces produced | 44,747 | 42,207 | 132,173 | 153,350 | |||||||||||||||
Payable ounces sold | 40,443 | 53,000 | 125,721 | 157,454 | ||||||||||||||||
Lead - | Tons produced | 11,600 | 9,904 | 35,794 | 32,148 | |||||||||||||||
Payable tons sold | 8,049 | 8,835 | 28,788 | 28,166 | ||||||||||||||||
Zinc - | Tons produced | 15,859 | 15,546 | 47,571 | 48,864 | |||||||||||||||
Payable tons sold | 11,523 | 11,174 | 32,328 | 33,344 |
19
|
|
|
| Three Months Ended |
| |||||
|
|
|
| 2023 |
|
| 2022 |
| ||
Silver - |
| Ounces produced |
|
| 4,041,878 |
|
|
| 3,324,708 |
|
|
| Payable ounces sold |
|
| 3,604,494 |
|
|
| 2,687,261 |
|
Gold - |
| Ounces produced |
|
| 39,717 |
|
|
| 41,642 |
|
|
| Payable ounces sold |
|
| 39,473 |
|
|
| 41,053 |
|
Lead - |
| Tons produced |
|
| 13,236 |
|
|
| 10,863 |
|
|
| Payable tons sold |
|
| 12,513 |
|
|
| 9,054 |
|
Zinc - |
| Tons produced |
|
| 15,795 |
|
|
| 14,946 |
|
|
| Payable tons sold |
|
| 11,858 |
|
|
| 9,947 |
|
The difference between what we report as “ounces/tons produced” and “payable ounces/tons sold” is attributable to the difference between the quantities of metals contained in the concentrates we produce versus the portion of those metals actually paid for by our customers according to the terms of our sales contracts. Differences can also arise from inventory changes incidental to shipping schedules, or variances in ore grades which impact the amount of metals contained in concentrates produced and sold.
Sales, total cost of sales, gross profit (loss), Cash Cost, Afterthree-three months ended March 31, 2023 and nine -months ended September 30, 2022 and 2021 were as follows (in thousands, except for Cash Cost and AISC):
|
| Silver |
|
| Gold |
| ||||||||||||||||||||||
|
| Greens Creek |
|
| Lucky Friday |
|
| Other |
|
| Total Silver (2) |
|
| Casa Berardi |
|
| Nevada Operations and Other (3) |
|
| Total Gold |
| |||||||
Three Months Ended March 31, 2023: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Sales |
| $ | 98,611 |
|
| $ | 49,110 |
|
| $ | — |
|
| $ | 147,721 |
|
| $ | 50,998 |
|
| $ | 781 |
|
| $ | 51,779 |
|
Total cost of sales |
|
| (66,288 | ) |
|
| (34,534 | ) |
|
| — |
|
|
| (100,822 | ) |
|
| (62,998 | ) |
|
| (732 | ) |
|
| (63,730 | ) |
Gross profit (loss) |
| $ | 32,323 |
|
| $ | 14,576 |
|
| $ | — |
|
| $ | 46,899 |
|
| $ | (12,000 | ) |
| $ | 49 |
|
| $ | (11,951 | ) |
Cash Cost (1) |
| $ | 1.16 |
|
| $ | 4.30 |
|
| $ | — |
|
| $ | 2.14 |
|
| $ | 1,775 |
|
| $ | — |
|
| $ | 1,775 |
|
AISC (1) |
| $ | 3.82 |
|
| $ | 10.69 |
|
| $ | — |
|
| $ | 8.96 |
|
| $ | 2,392 |
|
| $ | — |
|
| $ | 2,392 |
|
Three Months Ended March 31, 2022: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Sales |
| $ | 86,090 |
|
| $ | 38,040 |
|
| $ | — |
|
| $ | 124,130 |
|
| $ | 62,101 |
|
| $ | 268 |
|
| $ | 62,369 |
|
Total cost of sales |
|
| (49,638 | ) |
|
| (29,264 | ) |
|
| — |
|
|
| (78,902 | ) |
|
| (62,168 | ) |
|
| — |
|
|
| (62,168 | ) |
Gross profit (loss) |
| $ | 36,452 |
|
| $ | 8,776 |
|
| $ | — |
|
| $ | 45,228 |
|
| $ | (67 | ) |
| $ | 268 |
|
| $ | 201 |
|
Cash Cost (1) |
| $ | (0.90 | ) |
| $ | 6.57 |
|
| $ | — |
|
| $ | 1.09 |
|
| $ | 1,516 |
|
| $ | — |
|
| $ | 1,516 |
|
AISC (1) |
| $ | 1.83 |
|
| $ | 13.15 |
|
| $ | — |
|
| $ | 7.37 |
|
| $ | 1,764 |
|
| $ | — |
|
| $ | 1,764 |
|
Silver | Gold | |||||||||||||||||||||||||||
Greens Creek | Lucky Friday | Other | Total Silver (2) | Casa Berardi | Nevada Operations | Total Gold | ||||||||||||||||||||||
Three Months Ended September 30, 2022: | ||||||||||||||||||||||||||||
Sales | $ | 60,875 | $ | 28,460 | $ | — | $ | 89,335 | $ | 56,939 | $ | — | $ | 56,939 | ||||||||||||||
Total cost of sales | (52,502 | ) | (24,164 | ) | — | (76,666 | ) | (59,532 | ) | (1,623 | ) | (61,155 | ) | |||||||||||||||
Gross profit (loss) | $ | 8,373 | $ | 4,296 | $ | — | $ | 12,669 | $ | (2,593 | ) | $ | (1,623 | ) | $ | (4,216 | ) | |||||||||||
Cash Cost per silver or gold ounce (1) | $ | 2.65 | $ | 5.23 | $ | — | $ | 3.43 | $ | 1,349 | $ | — | $ | 1,349 | ||||||||||||||
AISC per silver or gold ounce (1) | $ | 8.61 | $ | 15.98 | $ | — | $ | 14.20 | $ | 1,738 | $ | — | $ | 1,738 | ||||||||||||||
Three Months Ended September 30, 2021: | ||||||||||||||||||||||||||||
Sales | $ | 84,806 | $ | 29,783 | $ | — | $ | 114,589 | $ | 56,065 | $ | 22,906 | $ | 78,971 | ||||||||||||||
Total cost of sales | (55,193 | ) | (23,591 | ) | (78,784 | ) | (58,164 | ) | (21,384 | ) | (79,548 | ) | ||||||||||||||||
Gross profit (loss) | $ | 29,613 | $ | 6,192 | $ | — | $ | 35,805 | $ | (2,099 | ) | $ | 1,522 | $ | (577 | ) | ||||||||||||
Cash Cost per silver or gold ounce (1) | $ | 0.74 | $ | 6.35 | $ | — | $ | 2.49 | $ | 1,175 | $ | 1,038 | $ | 1,163 | ||||||||||||||
AISC per silver or gold ounce (1) | $ | 5.94 | $ | 16.79 | $ | — | $ | 12.82 | $ | 1,476 | $ | 1,167 | $ | 1,450 |
(2)
Silver | Gold | |||||||||||||||||||||||||||
Greens Creek | Lucky Friday | Other | Total Silver (2) | Casa Berardi | Nevada Operations | Total Gold | ||||||||||||||||||||||
Nine Months Ended September 30, 2022: | ||||||||||||||||||||||||||||
Sales | $ | 239,688 | $ | 102,380 | $ | — | $ | 342,068 | $ | 181,679 | $ | 268 | $ | 181,947 | ||||||||||||||
Total cost of sales | (162,644 | ) | (83,779 | ) | — | (246,423 | ) | (183,570 | ) | (2,878 | ) | (186,448 | ) | |||||||||||||||
Gross profit | $ | 77,044 | $ | 18,601 | $ | — | $ | 95,645 | $ | (1,891 | ) | $ | (2,610 | ) | $ | (4,501 | ) | |||||||||||
Cash Cost per silver or gold ounce (1) | $ | (0.49 | ) | $ | 4.77 | $ | — | $ | 1.11 | $ | 1,409 | $ | — | $ | 1,409 | |||||||||||||
AISC per silver or gold ounce (1) | $ | 4.69 | $ | 12.86 | $ | — | $ | 10.17 | $ | 1,729 | $ | — | $ | 1,729 | ||||||||||||||
Nine Months Ended September 30, 2021: | ||||||||||||||||||||||||||||
Sales | $ | 296,978 | $ | 98,550 | $ | 176 | $ | 395,704 | $ | 185,098 | $ | 41,593 | $ | 226,691 | ||||||||||||||
Total cost of sales | (163,861 | ) | (74,287 | ) | (95 | ) | (238,243 | ) | (172,760 | ) | (46,832 | ) | (219,592 | ) | ||||||||||||||
Gross profit | $ | 133,117 | $ | 24,263 | $ | 81 | $ | 157,461 | $ | 12,338 | $ | (5,239 | ) | $ | 7,099 | |||||||||||||
Cash Cost per silver or gold ounce (1) | $ | (1.03 | ) | $ | 7.37 | $ | — | $ | 1.26 | $ | 1,127 | $ | 1,124 | $ | 1,127 | |||||||||||||
AISC per silver or gold ounce (1) | $ | 2.40 | $ | 15.00 | $ | — | $ | 8.88 | $ | 1,387 | $ | 1,167 | $ | 1,349 |
(3)
While revenue from zinc, lead and gold
20
Accordingly, we believe the identification of gold, lead and zinc as
We periodically review our revenues to ensure that reporting of primary products and
We believe the identification of silver as a
We reported a net loss applicable to common stockholders of $23.7$3.3 million (($0.04) per basic common share)for the three months ended March 31, 2023, compared to $1.1income of $4.0 million ($Nil) per basic common share) in the third quartercomparable period in 2022. The following were the significant drivers of 2021. The varianceschanges in net loss applicable to common stockholders compared to the income in 2022:
21
Greens Creek
Dollars are in thousands (except per ounce and per ton amounts) |
| Three Months Ended |
| |||||
|
| 2023 |
|
| 2022 |
| ||
Sales |
| $ | 98,611 |
|
| $ | 86,090 |
|
Cost of sales and other direct production costs |
|
| (51,824 | ) |
|
| (38,218 | ) |
Depreciation, depletion and amortization |
|
| (14,464 | ) |
|
| (11,420 | ) |
Total cost of sales |
|
| (66,288 | ) |
|
| (49,638 | ) |
Gross profit |
| $ | 32,323 |
|
| $ | 36,452 |
|
Tons of ore milled |
|
| 233,167 |
|
|
| 211,687 |
|
Production: |
|
|
|
|
|
| ||
Silver (ounces) |
|
| 2,772,860 |
|
|
| 2,429,782 |
|
Gold (ounces) |
|
| 14,885 |
|
|
| 11,402 |
|
Zinc (tons) |
|
| 12,482 |
|
|
| 12,494 |
|
Lead (tons) |
|
| 5,202 |
|
|
| 4,883 |
|
Payable metal quantities sold: |
|
|
|
|
|
| ||
Silver (ounces) |
|
| 2,292,035 |
|
|
| 1,772,391 |
|
Gold (ounces) |
|
| 12,646 |
|
|
| 7,922 |
|
Zinc (tons) |
|
| 9,244 |
|
|
| 8,092 |
|
Lead (tons) |
|
| 4,156 |
|
|
| 3,063 |
|
Ore grades: |
|
|
|
|
|
| ||
Silver ounces per ton |
|
| 14.40 |
|
|
| 13.84 |
|
Gold ounces per ton |
|
| 0.08 |
|
|
| 0.07 |
|
Zinc percent |
|
| 6.0 | % |
|
| 6.6 | % |
Lead percent |
|
| 2.6 | % |
|
| 2.8 | % |
Total production cost per ton |
| $ | 198.60 |
|
| $ | 192.16 |
|
Cash Cost, After By-product Credits, per Silver Ounce (1) |
| $ | 1.16 |
|
| $ | (0.90 | ) |
AISC, After By-Product Credits, per Silver Ounce (1) |
| $ | 3.82 |
|
| $ | 1.83 |
|
Capital additions |
| $ | 6,658 |
|
| $ | 3,092 |
|
The $4.1 million in insurance proceeds related to a coverage lawsuit received during September 2022 and the completion of projects to identify and implement potential operational improvements at our operating sites.
Dollars are in thousands (except per ounce and per ton amounts) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Sales | $ | 60,875 | $ | 84,806 | $ | 239,688 | $ | 296,978 | ||||||||
Cost of sales and other direct production costs | (42,197 | ) | (42,096 | ) | (127,290 | ) | (121,451 | ) | ||||||||
Depreciation, depletion and amortization | (10,305 | ) | (13,097 | ) | (35,354 | ) | (42,410 | ) | ||||||||
Total cost of sales | (52,502 | ) | (55,193 | ) | (162,644 | ) | (163,861 | ) | ||||||||
Gross profit | $ | 8,373 | $ | 29,613 | $ | 77,044 | $ | 133,117 | ||||||||
Tons of ore milled | 229,975 | 211,142 | 651,220 | 620,153 | ||||||||||||
Production: | ||||||||||||||||
Silver (ounces) | 2,468,280 | 1,837,270 | 7,308,660 | 6,980,587 | ||||||||||||
Gold (ounces) | 11,412 | 9,734 | 35,227 | 35,859 | ||||||||||||
Zinc (tons) | 12,580 | 13,227 | 38,470 | 41,191 | ||||||||||||
Lead (tons) | 4,428 | 4,591 | 14,495 | 15,142 | ||||||||||||
Payable metal quantities sold: | ||||||||||||||||
Silver (ounces) | 1,663,909 | 1,774,421 | 5,702,301 | 6,493,528 | ||||||||||||
Gold (ounces) | 7,478 | 9,232 | 25,952 | 31,599 | ||||||||||||
Zinc (tons) | 9,138 | 9,472 | 25,725 | 27,783 | ||||||||||||
Lead (tons) | 2,755 | 3,834 | 10,069 | 12,098 | ||||||||||||
Ore grades: | ||||||||||||||||
Silver ounces per ton | 13.63 | 11.14 | 13.83 | 13.84 | ||||||||||||
Gold ounces per ton | 0.07 | 0.07 | 0.07 | 0.08 | ||||||||||||
Zinc percent | 6.3 | % | 7.1 | % | 6.7 | % | 7.4 | % | ||||||||
Lead percent | 2.4 | % | 2.7 | % | 2.7 | % | 3.0 | % | ||||||||
Total production cost per ton | $ | 185.34 | $ | 181.60 | $ | 191.58 | $ | 178.29 | ||||||||
Cash Cost, After By-product Credits, Per Silver Ounce(1) | $ | 2.65 | $ | 0.74 | $ | (0.49 | ) | $ | (1.03 | ) | ||||||
AISC, After By-Product Credits, per Silver Ounce(1) | $ | 8.61 | $ | 5.94 | $ | 4.69 | $ | 2.40 | ||||||||
Capital additions | $ | 6,988 | $ | 6,228 | $ | 24,748 | $ | 14,339 |
Capital additions increased by $3.6 million in the three months ended March 31, 2023 compared to the same period in 2022 primarily due to mine development expenditure.
The charts below illustrate the factors contributing to the variances in Cash Cost, Afterthird quarter and first ninethree months of 2022ended March 31, 2023 compared to the same periods of 2021.
22
The following table summarizeschart below illustrates the components offactors contributing to Cash Cost, After
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Cash Cost, Before By-product Credits, per Silver Ounce | $ | 22.69 | $ | 26.76 | $ | 22.24 | $ | 21.05 | ||||||||
By-product credits | (20.04 | ) | (26.02 | ) | (22.73 | ) | (22.08 | ) | ||||||||
Cash Cost, After By-product Credits, per Silver Ounce | $ | 2.65 | $ | 0.74 | $ | (0.49 | ) | $ | (1.03 | ) | ||||||
|
| Three Months Ended March 31, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
Cash Cost, Before By-product Credits, per Silver Ounce |
| $ | 21.80 |
|
| $ | 21.82 |
|
By-product credits |
|
| (20.64 | ) |
|
| (22.72 | ) |
Cash Cost, After By-product Credits, per Silver Ounce |
| $ | 1.16 |
|
| $ | (0.90 | ) |
|
| Three Months Ended March 31, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
AISC, Before By-product Credits, per Silver Ounce |
| $ | 24.46 |
|
| $ | 24.55 |
|
By-product credits |
|
| (20.64 | ) |
|
| (22.72 | ) |
AISC, After By-product Credits, per Silver Ounce |
| $ | 3.82 |
|
| $ | 1.83 |
|
The following table summarizes the components of AISC, AfterBy-productCredits, per Silver Ounce:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
AISC, Before By-product Credits, per Silver Ounce | $ | 28.65 | $ | 31.96 | $ | 27.42 | $ | 24.48 | ||||||||
By-product credits | (20.04 | ) | (26.02 | ) | (22.73 | ) | (22.08 | ) | ||||||||
AISC, After By-product Credits, per Silver Ounce | $ | 8.61 | $ | 5.94 | $ | 4.69 | $ | 2.40 | ||||||||
Dollars are in thousands (except per ounce and per ton amounts) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Sales | $ | 28,460 | $ | 29,783 | $ | 102,380 | $ | 98,550 | ||||||||
Cost of sales and other direct production costs | (16,903 | ) | (17,001 | ) | (59,624 | ) | (53,959 | ) | ||||||||
Depreciation, depletion and amortization | (7,261 | ) | (6,590 | ) | (24,155 | ) | (20,328 | ) | ||||||||
Total cost of sales | (24,164 | ) | (23,591 | ) | (83,779 | ) | (74,287 | ) | ||||||||
Gross profit | $ | 4,296 | $ | 6,192 | $ | 18,601 | $ | 24,263 | ||||||||
Tons of ore milled | 90,749 | 78,227 | 265,971 | 241,740 | ||||||||||||
Production: | ||||||||||||||||
Silver (ounces) | 1,074,230 | 831,532 | 3,188,565 | 2,608,727 | ||||||||||||
Lead (tons) | 7,172 | 5,313 | 21,299 | 17,006 | ||||||||||||
Zinc (tons) | 3,279 | 2,319 | 9,101 | 7,673 | ||||||||||||
Payable metal quantities sold: | ||||||||||||||||
Silver (ounces) | 801,115 | 783,672 | 2,822,281 | 2,481,753 | ||||||||||||
Lead (tons) | 5,295 | 5,001 | 18,720 | 16,068 | ||||||||||||
Zinc (tons) | 2,385 | 1,702 | 6,602 | 5,561 | ||||||||||||
Ore grades: | ||||||||||||||||
Silver ounces per ton | 12.50 | 11.21 | 12.67 | 11.34 | ||||||||||||
Lead percent | 8.5 | % | 7.2 | % | 8.5 | % | 7.4 | % | ||||||||
Zinc percent | 4.2 | % | 3.3 | % | 3.9 | % | 3.5 | % | ||||||||
Total production cost per ton | $ | 207.1 | $ | 190.66 | $ | 220.41 | $ | 189.06 | ||||||||
Cash Cost, After By-product Credits, per Silver Ounce(1) | $ | 5.23 | $ | 6.35 | $ | 4.77 | $ | 7.37 | ||||||||
AISC, After By-product Credits, per Silver Ounce(1) | $ | 15.98 | $ | 16.79 | $ | 12.86 | $ | 15.00 | ||||||||
Capital additions | $ | 16,125 | $ | 9,133 | $ | 37,278 | $ | 20,776 |
23
Lucky Friday
Dollars are in thousands (except per ounce and per ton amounts) |
| Three Months Ended |
| |||||
|
| 2023 |
|
| 2022 |
| ||
Sales |
| $ | 49,110 |
|
| $ | 38,040 |
|
Cost of sales and other direct production costs |
|
| (24,079 | ) |
|
| (21,232 | ) |
Depreciation, depletion and amortization |
|
| (10,455 | ) |
|
| (8,032 | ) |
Total cost of sales |
|
| (34,534 | ) |
|
| (29,264 | ) |
Gross profit |
| $ | 14,576 |
|
| $ | 8,776 |
|
Tons of ore milled |
|
| 95,303 |
|
|
| 77,725 |
|
Production: |
|
|
|
|
|
| ||
Silver (ounces) |
|
| 1,262,464 |
|
|
| 887,858 |
|
Lead (tons) |
|
| 8,034 |
|
|
| 5,980 |
|
Zinc (tons) |
|
| 3,313 |
|
|
| 2,452 |
|
Payable metal quantities sold: |
|
|
|
|
|
| ||
Silver (ounces) |
|
| 1,306,013 |
|
|
| 899,454 |
|
Lead (tons) |
|
| 8,357 |
|
|
| 5,991 |
|
Zinc (tons) |
|
| 2,614 |
|
|
| 1,855 |
|
Ore grades: |
|
|
|
|
|
| ||
Silver ounces per ton |
|
| 13.84 |
|
|
| 12.04 |
|
Lead percent |
|
| 8.8 | % |
|
| 8.2 | % |
Zinc percent |
|
| 4.1 | % |
|
| 3.6 | % |
Total production cost per ton |
| $ | 210.72 |
|
| $ | 247.17 |
|
Cash Cost, After By-product Credits, per Silver Ounce (1) |
| $ | 4.30 |
|
| $ | 6.57 |
|
AISC, After By-product Credits, per Silver Ounce (1) |
| $ | 10.69 |
|
| $ | 13.15 |
|
Capital additions |
| $ | 14,707 |
|
| $ | 9,652 |
|
Gross profit increased by $5.8 million for the three months ended March 31, 2023 compared to the same period in 2022, as the impact of increased sales quantities from mining and processing more high grade material and in higher volumes did not offset the combinationeffects of lower realized silver, lead and zinc prices compared to 2021, andprices.
Capital additions increased production costs from more ore mined and processed and inflationary cost increases in consumables and contractor maintenance costs. Gross profitby $5.1 million for the nine month period September 30, 2022 decreased by $5.7 millionthree months ended March 31, 2023 compared to the same period in 2021, as2022, primarily due to expenditures on key projects including the service hoist and coarse ore bunker, increased sales from a combinationdevelopment, and pre-production drilling to achieve the annual throughput goal of mining and processing more high grade material and in higher volumes did not offset the impact of lower silver and lead realized prices and higher production costs which were the result of the same factors experienced425,000 tons in the three months ended September 30, 2022.
24
The chartschart below illustrateillustrates the factors contributing to Cash Cost, AfterOunce for the third quarter and first nine months of 2022 compared to the same periods of 2021.
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Cash Cost, Before By-product Credits, per Silver Ounce | $ | 22.87 | $ | 24.14 | $ | 23.44 | $ | 24.70 | ||||||||
By-product credits | (17.64 | ) | (17.79 | ) | (18.67 | ) | (17.33 | ) | ||||||||
Cash Cost, After By-product Credits, per Silver Ounce | $ | 5.23 | $ | 6.35 | $ | 4.77 | $ | 7.37 | ||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
AISC, Before By-product Credits, per Silver Ounce | $ | 33.62 | $ | 34.58 | $ | 31.53 | $ | 32.33 | ||||||||
By-product credits | (17.64 | ) | (17.79 | ) | (18.67 | ) | (17.33 | ) | ||||||||
AISC, After By-product Credits, per Silver Ounce | $ | 15.98 | $ | 16.79 | 12.86 | $ | 15.00 | |||||||||
|
| Three Months Ended March 31, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
Cash Cost, Before By-product Credits, per Silver Ounce |
| $ | 21.03 |
|
| $ | 26.63 |
|
By-product credits |
|
| (16.73 | ) |
|
| (20.06 | ) |
Cash Cost, After By-product Credits, per Silver Ounce |
| $ | 4.30 |
|
| $ | 6.57 |
|
|
| Three Months Ended March 31, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
AISC, Before By-product Credits, per Silver Ounce |
| $ | 27.42 |
|
| $ | 33.21 |
|
By-product credits |
|
| (16.73 | ) |
|
| (20.06 | ) |
AISC, After By-product Credits, per Silver Ounce |
| $ | 10.69 |
|
| $ | 13.15 |
|
The decrease in Cash Cost, After By-product Credits, per Silver Ounce and AISC, Afterand nine month periodsmonths ended September 30, 2022March 31, 2023 compared to the three and nine month periods ended September 30, 2021same period in 2022 was due to higher silver production resulting from increased grades and volumes processed, higher(for the nine months ended September 30, 2022) due to higher realized zinc prices, and concentrate quality improvement resulting inas higher lead and zinc production withdid not offset lower prices.
25
Casa Berardi
Dollars are in thousands (except per ounce and per ton amounts) |
| Three Months Ended |
| |||||
|
| 2023 |
|
| 2022 |
| ||
Sales |
| $ | 50,998 |
|
| $ | 62,101 |
|
Cost of sales and other direct production costs |
|
| (48,962 | ) |
|
| (46,322 | ) |
Depreciation, depletion and amortization |
|
| (14,036 | ) |
|
| (15,846 | ) |
Total cost of sales |
|
| (62,998 | ) |
|
| (62,168 | ) |
Gross loss |
| $ | (12,000 | ) |
| $ | (67 | ) |
Tons of ore milled |
|
| 429,158 |
|
|
| 386,150 |
|
Production: |
|
|
|
|
|
| ||
Gold (ounces) |
|
| 24,686 |
|
|
| 30,240 |
|
Silver (ounces) |
|
| 6,554 |
|
|
| 7,068 |
|
Payable metal quantities sold: |
|
|
|
|
|
| ||
Gold (ounces) |
|
| 26,826 |
|
|
| 33,066 |
|
Silver (ounces) |
|
| 6,446 |
|
|
| 9,054 |
|
Ore grades: |
|
|
|
|
|
| ||
Gold ounces per ton |
|
| 0.07 |
|
|
| 0.09 |
|
Silver ounces per ton |
|
| 0.02 |
|
|
| 0.02 |
|
Total production cost per ton |
| $ | 107.95 |
|
| $ | 117.96 |
|
Cash Cost, After By-product Credits, per Gold Ounce (1) |
| $ | 1,775 |
|
| $ | 1,516 |
|
AISC, After By-product Credits, per Gold Ounce (1) |
| $ | 2,392 |
|
| $ | 1,764 |
|
Capital additions |
| $ | 17,086 |
|
| $ | 7,808 |
|
Gross loss increased by higher sustaining capital spending.
Dollars are in thousands (except per ounce and per ton amounts) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Sales | $ | 56,939 | $ | 56,065 | $ | 181,679 | $ | 185,098 | ||||||||
Cost of sales and other direct production costs | (44,443 | ) | (38,196 | ) | (137,176 | ) | (111,601 | ) | ||||||||
Depreciation, depletion and amortization | (15,089 | ) | (19,968 | ) | (46,394 | ) | (61,159 | ) | ||||||||
Total cost of sales | (59,532 | ) | (58,164 | ) | (183,570 | ) | (172,760 | ) | ||||||||
Gross profit | $ | (2,593 | ) | $ | (2,099 | ) | $ | (1,891 | ) | $ | 12,338 | |||||
Tons of ore milled | 389,941 | 398,143 | 1,177,709 | 1,141,229 | ||||||||||||
Production: | ||||||||||||||||
Gold (ounces) | 33,335 | 29,722 | 96,881 | 97,245 | ||||||||||||
Silver (ounces) | 6,882 | 7,012 | 22,329 | 25,604 | ||||||||||||
Payable metal quantities sold: | ||||||||||||||||
Gold (ounces) | 32,965 | 31,227 | 99,703 | 102,711 | ||||||||||||
Silver (ounces) | 14,700 | 7,764 | 23,950 | 24,538 | ||||||||||||
Ore grades: | ||||||||||||||||
Gold ounces per ton | 0.10 | 0.09 | 0.09 | 0.10 | ||||||||||||
Silver ounces per ton | 0.02 | 0.02 | 0.02 | 0.02 | ||||||||||||
Total production cost per ton | $ | 114.52 | $ | 86.95 | $ | 115.15 | $ | 95.13 | ||||||||
Cash Cost, After By-product Credits, per Gold Ounce(1) | $ | 1,349 | $ | 1,175 | $ | 1,409 | $ | 1,127 | ||||||||
AISC, After By-product Credits, per Gold Ounce(1) | $ | 1,738 | $ | 1,476 | $ | 1,729 | $ | 1,387 | ||||||||
Capital additions | $ | 10,771 | $ | 11,488 | $ | 26,672 | $ | 37,488 |
Total capital additions decreasedincreased by $0.7$9.3 million and $10.8 million infor the third quarter of 2022 and first ninethree months of 2022 respectively,ended March 31, 2023 compared to the same periods of 2021, reflecting lowerperiod in 2022, primarily due to the tailings raise project and mining development costs following commissioning of the new 160 zone open pit mine in the fourth quarter of 2021.
The chartschart below illustrateillustrates the factors contributing to Cash Cost, AfterOunce for the third quarter and first nine months of 2022 and 2021:
26
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Cash Cost, Before By-product Credits, per Gold Ounce | $ | 1,353 | $ | 1,181 | $ | 1,415 | $ | 1,134 | ||||||||
By-product credits | (4) | (6) | (6) | (7) | ||||||||||||
Cash Cost, After By-product Credits, per Gold Ounce | $ | 1,349 | $ | 1,175 | $ | 1,409 | $ | 1,127 | ||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
AISC, Before By-product Credits, per Gold Ounce | $ | 1,742 | $ | 1,482 | $ | 1,735 | $ | 1,394 | ||||||||
By-product credits | (4) | (6) | (6) | (7) | ||||||||||||
AISC, After By-product Credits, per Gold Ounce | $ | 1,738 | $ | 1,476 | $ | 1,729 | $ | 1,387 | ||||||||
|
| Three Months Ended March 31, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
Cash Cost, Before By-product Credits, per Gold Ounce |
| $ | 1,780 |
|
| $ | 1,521 |
|
By-product credits |
|
| (5 | ) |
|
| (5 | ) |
Cash Cost, After By-product Credits, per Gold Ounce |
| $ | 1,775 |
|
| $ | 1,516 |
|
|
| Three Months Ended March 31, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
AISC, Before By-product Credits, per Gold Ounce |
| $ | 2,397 |
|
| $ | 1,769 |
|
By-product credits |
|
| (5 | ) |
|
| (5 | ) |
AISC, After By-product Credits, per Gold Ounce |
| $ | 2,392 |
|
| $ | 1,764 |
|
The increase in Cash Cost Afterthird quarter and first ninethree months of 2022ended March 31, 2023 compared to the same periods in 2021period for 2022 was primarily due to a combination of higher production costs as discussed above, partially offset by higherand lower gold production in the third quarter of 2022 compared with the same period in 2021.production. The lower production in 2022 also negatively impacted AISC, AfterBy-productCredits, per Gold Ounce, however this was partially offset by lower sustaining capital spent in 2022 compared to 2021.
Dollars are in thousands (except per ounce and per ton amounts) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Sales | $ | — | $ | 22,906 | $ | 268 | $ | 41,593 | ||||||||
Cost of sales and other direct production costs | (1,285 | ) | (15,249 | ) | (2,418 | ) | (31,811 | ) | ||||||||
Depreciation, depletion and amortization | (338 | ) | (6,135 | ) | (460 | ) | (15,021 | ) | ||||||||
Total cost of sales | (1,623 | ) | (21,384 | ) | (2,878 | ) | (46,832 | ) | ||||||||
Gross (loss) profit | $ | (1,623 | ) | $ | 1,522 | $ | (2,610 | ) | $ | (5,239 | ) | |||||
Payable metal quantities sold: | ||||||||||||||||
Gold (ounces) | — | 12,542 | 65 | 23,097 | ||||||||||||
Silver (ounces) | — | 15,833 | 6,363 | 23,868 |
Nevada Operations
Dollars are in thousands (except per ounce and per ton amounts) |
| Three Months Ended |
| |||||
|
| 2023 |
|
| 2022 |
| ||
Sales |
| $ | 272 |
|
| $ | 268 |
|
Cost of sales and other direct production costs |
|
| (253 | ) |
|
| — |
|
Depreciation, depletion and amortization |
|
| (47 | ) |
|
| — |
|
Total cost of sales |
|
| (300 | ) |
|
| — |
|
Gross (loss) profit |
| $ | (28 | ) |
| $ | 268 |
|
Payable metal quantities sold: |
|
|
|
|
|
| ||
Gold (ounces) |
|
| 146 |
|
|
| 65 |
|
Silver (ounces) |
| - |
|
|
| 6,363 |
|
The gross loss of $28 thousand for the three months ended March 31, 2023, was attributable to write downs of stockpiled material to net realizable value reflecting a lower spot gold price versusreceived for the gross profit realized in the comparable period in 2021, due to processing and sale of refractory ore at a third party facility.
Exploration and lower write-downs of ore stockpiled to estimated net realizable value. During 2021, production and revenue were generated from processing of the stockpilednon-refractoryore at the Midas mill and third-party processing of refractory ore in a roaster and autoclave facility, respectively. Fire Creek was placed oncare-and-maintenancein the second quarter of 2021 after processing of the remainingnon-refractoryore stockpile. Care and maintenance costs 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.
See–- Operation, Development, Exploration and Acquisition Risks20212022 Form
27
Corporate Matters
Income Taxes
During the three months of 2022,ended March 31, 2023, an income and mining tax benefitprovision of approximately $9.5 million and $3.6$3.2 million resulted in an effective tax rate of 29% and 10% for the respective periods.4,699%. This compares to an income and mining tax benefitprovision of $4.5$5.6 million and $3.9 million for the third quarter and first nine months of 2021, orresulted in an effective tax rate of 82.2% and (20.3)%58% for the respective periods.comparable period in 2022. The comparability of our income and mining tax (provision) benefit and effective tax rate for the reported periods was impacted by multiple factors, primarily: (i) mining taxes; (ii) variations in our income before income taxes; (iii) geographic distribution of that income; (iv) foreign exchange rates includingperiodthree months ended March 31, 2022 and including the period September 30, 2022, we used the annual effective tax rate method to calculate the quarterly tax provision, a change from the discrete method used for the period ended September 30, 2021, due to reversal of valuation allowance in the fourth quarter of 2021.
Each reporting period we assess our deferred tax balances based on a review of long-range forecasts and quarterly activity. A valuation allowance is provided for deferred tax assets for which it is more likely than not the related tax benefits will not be realized. We analyze our deferred tax assets and, if it is determined that we will not realize all or a portion of our deferred tax assets, we will record or increase a valuation allowance. Conversely, if it is determined we will ultimately more likely than not be able to realize all or a portion of the related benefits for which a valuation allowance has been provided, all or a portion of the related valuation allowance will be reduced. There are a number of factors that impact our ability to realize our deferred tax assets. Valuation allowances are provided on deferred tax assets in Nevada, Mexico, and certain Canadian jurisdictions. For additional information, please see–- Risk Factors20212022 Form
Reconciliation of Total Cost of Sales to Cash Cost, Before
The tables below present reconciliations between the most comparable GAAP measure of total cost of sales to thethree- and nine-monththree month periods ended September 30, 2022March 31, 2023 and 2021.
Cash Cost, After
Cash Cost, Aftermine’smine's operating performance. We use AISC, Aftermines’mines' net cash flow after costs for exploration,pre-development,on-siteexploration, 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
28
Cash Cost, Beforeon-siteexploration, reclamation and sustaining capital costs. AISC, Beforeexploration and capital costs.
In addition to the uses described above, Cash Cost, After
The Casa Berardi, Nevada Operations and combined gold properties information below reports Cash Cost, After
In thousands (except per ounce amounts) |
| Three Months Ended March 31, 2023 |
| |||||||||||||
|
| Greens Creek |
|
| Lucky Friday |
|
| Corporate (2) |
|
| Total Silver |
| ||||
Total cost of sales |
| $ | 66,288 |
|
| $ | 34,534 |
|
| $ | — |
|
| $ | 100,822 |
|
Depreciation, depletion and amortization |
|
| (14,464 | ) |
|
| (10,455 | ) |
|
| — |
|
|
| (24,919 | ) |
Treatment costs |
|
| 10,368 |
|
|
| 5,277 |
|
|
| — |
|
|
| 15,645 |
|
Change in product inventory |
|
| (1,615 | ) |
|
| (2,409 | ) |
|
| — |
|
|
| (4,024 | ) |
Reclamation and other costs |
|
| (129 | ) |
|
| (409 | ) |
|
| — |
|
|
| (538 | ) |
Cash Cost, Before By-product Credits (1) |
|
| 60,448 |
|
|
| 26,538 |
|
|
| — |
|
|
| 86,986 |
|
Reclamation and other costs |
|
| 722 |
|
|
| 285 |
|
|
| — |
|
|
| 1,007 |
|
Sustaining capital |
|
| 6,641 |
|
|
| 7,784 |
|
|
| — |
|
|
| 14,425 |
|
General and administrative |
|
| — |
|
|
| — |
|
|
| 12,070 |
|
|
| 12,070 |
|
AISC, Before By-product Credits (1) |
|
| 67,811 |
|
|
| 34,607 |
|
|
| 12,070 |
|
|
| 114,488 |
|
By-product credits: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Zinc |
|
| (24,005 | ) |
|
| (6,816 | ) |
|
| — |
|
|
| (30,821 | ) |
Gold |
|
| (25,286 | ) |
|
| — |
|
|
| — |
|
|
| (25,286 | ) |
Lead |
|
| (7,942 | ) |
|
| (14,299 | ) |
|
| — |
|
|
| (22,241 | ) |
Total By-product credits |
|
| (57,233 | ) |
|
| (21,115 | ) |
|
| — |
|
|
| (78,348 | ) |
Cash Cost, After By-product Credits |
| $ | 3,215 |
|
| $ | 5,423 |
|
| $ | — |
|
| $ | 8,638 |
|
AISC, After By-product Credits |
| $ | 10,578 |
|
| $ | 13,492 |
|
| $ | 12,070 |
|
| $ | 36,140 |
|
Divided by ounces produced |
|
| 2,773 |
|
|
| 1,262 |
|
|
|
|
|
| 4,035 |
| |
Cash Cost, Before By-product Credits, per Ounce |
| $ | 21.80 |
|
| $ | 21.03 |
|
|
|
|
| $ | 21.56 |
| |
By-product credits per ounce |
|
| (20.64 | ) |
|
| (16.73 | ) |
|
|
|
|
| (19.42 | ) | |
Cash Cost, After By-product Credits, per Ounce |
| $ | 1.16 |
|
| $ | 4.30 |
|
|
|
|
| $ | 2.14 |
| |
AISC, Before By-product Credits, per Ounce |
| $ | 24.46 |
|
| $ | 27.42 |
|
|
|
|
| $ | 28.38 |
| |
By-product credits per ounce |
|
| (20.64 | ) |
|
| (16.73 | ) |
|
|
|
|
| (19.42 | ) | |
AISC, After By-product Credits, per Ounce |
| $ | 3.82 |
|
| $ | 10.69 |
|
|
|
|
| $ | 8.96 |
|
29
In thousands (except per ounce amounts) |
| Three Months Ended March 31, 2023 |
| |||||||||
|
| Casa Berardi |
|
| Nevada Operations and Other (4) |
|
| Total Gold |
| |||
Total cost of sales |
| $ | 62,998 |
|
| $ | 732 |
|
| $ | 63,730 |
|
Depreciation, depletion and amortization |
|
| (14,036 | ) |
|
| (47 | ) |
|
| (14,083 | ) |
Treatment costs |
|
| 467 |
|
|
| — |
|
|
| 467 |
|
Change in product inventory |
|
| (2,417 | ) |
|
| — |
|
|
| (2,417 | ) |
Reclamation and other costs |
|
| (217 | ) |
|
| — |
|
|
| (217 | ) |
Exclusion of Casa Berardi cash costs (3) |
|
| (2,851 | ) |
|
| — |
|
|
| (2,851 | ) |
Exclusion of Nevada Operations and Other costs |
|
| — |
|
|
| (685 | ) |
|
| (685 | ) |
Cash Cost, Before By-product Credits (1) |
|
| 43,944 |
|
|
| — |
|
|
| 43,944 |
|
Reclamation and other costs |
|
| 217 |
|
|
| — |
|
|
| 217 |
|
Sustaining capital |
|
| 15,015 |
|
|
| — |
|
|
| 15,015 |
|
AISC, Before By-product Credits (1) |
|
| 59,176 |
|
|
| — |
|
|
| 59,176 |
|
By-product credits: |
|
|
|
|
|
|
|
|
| |||
Silver |
|
| (127 | ) |
|
| — |
|
|
| (127 | ) |
Total By-product credits |
|
| (127 | ) |
|
| — |
|
|
| (127 | ) |
Cash Cost, After By-product Credits |
| $ | 43,817 |
|
| $ | — |
|
| $ | 43,817 |
|
AISC, After By-product Credits |
| $ | 59,049 |
|
| $ | — |
|
| $ | 59,049 |
|
Divided by ounces produced |
|
| 25 |
|
|
| — |
|
|
| 25 |
|
Cash Cost, Before By-product Credits, per Ounce |
| $ | 1,780 |
|
| $ | — |
|
| $ | 1,780 |
|
By-product credits per ounce |
|
| (5 | ) |
|
| — |
|
|
| (5 | ) |
Cash Cost, After By-product Credits, per Ounce |
| $ | 1,775 |
|
| $ | — |
|
| $ | 1,775 |
|
AISC, Before By-product Credits, per Ounce |
| $ | 2,397 |
|
| $ | — |
|
| $ | 2,397 |
|
By-product credits per ounce |
|
| (5 | ) |
|
| — |
|
|
| (5 | ) |
AISC, After By-product Credits, per Ounce |
| $ | 2,392 |
|
| $ | — |
|
| $ | 2,392 |
|
30
In thousands (except per ounce amounts) |
| Three Months Ended March 31, 2023 |
| |||||||||
|
| Total Silver |
|
| Total Gold |
|
| Total |
| |||
Total cost of sales |
| $ | 100,822 |
|
| $ | 63,730 |
|
| $ | 164,552 |
|
Depreciation, depletion and amortization |
|
| (24,919 | ) |
|
| (14,083 | ) |
|
| (39,002 | ) |
Treatment costs |
|
| 15,645 |
|
|
| 467 |
|
|
| 16,112 |
|
Change in product inventory |
|
| (4,024 | ) |
|
| (2,417 | ) |
|
| (6,441 | ) |
Reclamation and other costs |
|
| (538 | ) |
|
| (217 | ) |
|
| (755 | ) |
Exclusion of Casa Berardi cash costs (3) |
|
| — |
|
|
| (2,851 | ) |
|
| (2,851 | ) |
Exclusion of Nevada Operations and Other costs |
|
| — |
|
|
| (685 | ) |
|
| (685 | ) |
Cash Cost, Before By-product Credits (1) |
|
| 86,986 |
|
|
| 43,944 |
|
|
| 130,930 |
|
Reclamation and other costs |
|
| 1,007 |
|
|
| 217 |
|
|
| 1,224 |
|
Sustaining capital |
|
| 14,425 |
|
|
| 15,015 |
|
|
| 29,440 |
|
General and administrative |
|
| 12,070 |
|
|
| — |
|
|
| 12,070 |
|
AISC, Before By-product Credits (1) |
|
| 114,488 |
|
|
| 59,176 |
|
|
| 173,664 |
|
By-product credits: |
|
|
|
|
|
|
|
|
| |||
Zinc |
|
| (30,821 | ) |
|
| — |
|
|
| (30,821 | ) |
Gold |
|
| (25,286 | ) |
|
| — |
|
|
| (25,286 | ) |
Lead |
|
| (22,241 | ) |
|
| — |
|
|
| (22,241 | ) |
Silver |
|
| — |
|
|
| (127 | ) |
|
| (127 | ) |
Total By-product credits |
|
| (78,348 | ) |
|
| (127 | ) |
|
| (78,475 | ) |
Cash Cost, After By-product Credits |
| $ | 8,638 |
|
| $ | 43,817 |
|
| $ | 52,455 |
|
AISC, After By-product Credits |
| $ | 36,140 |
|
| $ | 59,049 |
|
| $ | 95,189 |
|
Divided by ounces produced |
|
| 4,035 |
|
|
| 25 |
|
|
|
| |
Cash Cost, Before By-product Credits, per Ounce |
| $ | 21.56 |
|
| $ | 1,780 |
|
|
|
| |
By-product credits per ounce |
|
| (19.42 | ) |
|
| (5 | ) |
|
|
| |
Cash Cost, After By-product Credits, per Ounce |
| $ | 2.14 |
|
| $ | 1,775 |
|
|
|
| |
AISC, Before By-product Credits, per Ounce |
| $ | 28.38 |
|
| $ | 2,397 |
|
|
|
| |
By-product credits per ounce |
|
| (19.42 | ) |
|
| (5 | ) |
|
|
| |
AISC, After By-product Credits, per Ounce |
| $ | 8.96 |
|
| $ | 2,392 |
|
|
|
|
31
In thousands (except per ounce amounts) |
| Three Months Ended March 31, 2022 (5) |
| |||||||||||||
|
| Greens Creek |
|
| Lucky Friday |
|
| Corporate (2) |
|
| Total Silver |
| ||||
Total cost of sales |
| $ | 49,638 |
|
| $ | 29,264 |
|
| $ | — |
|
| $ | 78,902 |
|
Depreciation, depletion and amortization |
|
| (11,420 | ) |
|
| (8,032 | ) |
|
| — |
|
|
| (19,452 | ) |
Treatment costs |
|
| 9,096 |
|
|
| 3,677 |
|
|
| — |
|
|
| 12,773 |
|
Change in product inventory |
|
| 6,538 |
|
|
| (905 | ) |
|
| — |
|
|
| 5,633 |
|
Reclamation and other costs |
|
| (850 | ) |
|
| (361 | ) |
|
| — |
|
|
| (1,211 | ) |
Cash Cost, Before By-product Credits (1) |
|
| 53,002 |
|
|
| 23,643 |
|
|
| — |
|
|
| 76,645 |
|
Reclamation and other costs |
|
| 705 |
|
|
| 282 |
|
|
| — |
|
|
| 987 |
|
Sustaining capital |
|
| 5,956 |
|
|
| 5,562 |
|
|
| 48 |
|
|
| 11,566 |
|
General and administrative |
|
| — |
|
|
| — |
|
|
| 8,294 |
|
|
| 8,294 |
|
AISC, Before By-product Credits (1) |
|
| 59,663 |
|
|
| 29,487 |
|
|
| 8,342 |
|
|
| 97,492 |
|
By-product credits: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Zinc |
|
| (28,651 | ) |
|
| (5,977 | ) |
|
| — |
|
|
| (34,628 | ) |
Gold |
|
| (18,583 | ) |
|
| — |
|
|
| — |
|
|
| (18,583 | ) |
Lead |
|
| (7,966 | ) |
|
| (11,836 | ) |
|
| — |
|
|
| (19,802 | ) |
Total By-product credits |
|
| (55,200 | ) |
|
| (17,813 | ) |
|
| — |
|
|
| (73,013 | ) |
Cash Cost, After By-product Credits |
| $ | (2,198 | ) |
| $ | 5,830 |
|
| $ | — |
|
| $ | 3,632 |
|
AISC, After By-product Credits |
| $ | 4,463 |
|
| $ | 11,674 |
|
| $ | 8,342 |
|
| $ | 24,479 |
|
Divided by ounces produced |
|
| 2,430 |
|
|
| 888 |
|
|
|
|
|
| 3,318 |
| |
Cash Cost, Before By-product Credits, per Ounce |
| $ | 21.82 |
|
| $ | 26.63 |
|
|
|
|
| $ | 23.10 |
| |
By-product credits per ounce |
|
| (22.72 | ) |
|
| (20.06 | ) |
|
|
|
|
| (22.01 | ) | |
Cash Cost, After By-product Credits, per Ounce |
| $ | (0.90 | ) |
| $ | 6.57 |
|
|
|
|
| $ | 1.09 |
| |
AISC, Before By-product Credits, per Ounce |
| $ | 24.55 |
|
| $ | 33.21 |
|
|
|
|
| $ | 29.38 |
| |
By-product credits per ounce |
|
| (22.72 | ) |
|
| (20.06 | ) |
|
|
|
|
| (22.01 | ) | |
AISC, After By-product Credits, per Ounce |
| $ | 1.83 |
|
| $ | 13.15 |
|
|
|
|
| $ | 7.37 |
|
In thousands (except per ounce amounts) |
| Three Months Ended March 31, 2022 (5) |
| |||||
|
| Casa Berardi |
|
| Total Gold |
| ||
Total cost of sales |
| $ | 62,168 |
|
| $ | 62,168 |
|
Depreciation, depletion and amortization |
|
| (15,846 | ) |
|
| (15,846 | ) |
Treatment costs |
|
| 458 |
|
|
| 458 |
|
Change in product inventory |
|
| (563 | ) |
|
| (563 | ) |
Reclamation and other costs |
|
| (210 | ) |
|
| (210 | ) |
Exclusion of Nevada Operations costs |
|
| — |
|
|
| — |
|
Cash Cost, Before By-product Credits (1) |
|
| 46,007 |
|
|
| 46,007 |
|
Reclamation and other costs |
|
| 210 |
|
|
| 210 |
|
Sustaining capital |
|
| 7,281 |
|
|
| 7,281 |
|
AISC, Before By-product Credits (1) |
|
| 53,498 |
|
|
| 53,498 |
|
By-product credits: |
|
|
|
|
|
| ||
Silver |
|
| (166 | ) |
|
| (166 | ) |
Total By-product credits |
|
| (166 | ) |
|
| (166 | ) |
Cash Cost, After By-product Credits |
| $ | 45,841 |
|
| $ | 45,841 |
|
AISC, After By-product Credits |
| $ | 53,332 |
|
| $ | 53,332 |
|
Divided by ounces produced |
|
| 30 |
|
|
| 30 |
|
Cash Cost, Before By-product Credits, per Ounce |
| $ | 1,521 |
|
| $ | 1,521 |
|
By-product credits per ounce |
|
| (5 | ) |
|
| (5 | ) |
Cash Cost, After By-product Credits, per Ounce |
| $ | 1,516 |
|
| $ | 1,516 |
|
AISC, Before By-product Credits, per Ounce |
| $ | 1,769 |
|
| $ | 1,769 |
|
By-product credits per ounce |
|
| (5 | ) |
|
| (5 | ) |
AISC, After By-product Credits, per Ounce |
| $ | 1,764 |
|
| $ | 1,764 |
|
32
In thousands (except per ounce amounts) |
| Three Months Ended March 31, 2022 (5) |
| |||||||||
|
| Total Silver |
|
| Total Gold |
|
| Total |
| |||
Total cost of sales |
| $ | 78,902 |
|
| $ | 62,168 |
|
| $ | 141,070 |
|
Depreciation, depletion and amortization |
|
| (19,452 | ) |
|
| (15,846 | ) |
|
| (35,298 | ) |
Treatment costs |
|
| 12,773 |
|
|
| 458 |
|
|
| 13,231 |
|
Change in product inventory |
|
| 5,633 |
|
|
| (563 | ) |
|
| 5,070 |
|
Reclamation and other costs |
|
| (1,211 | ) |
|
| (210 | ) |
|
| (1,421 | ) |
Exclusion of Nevada Operations costs |
|
| — |
|
|
| — |
|
|
| — |
|
Cash Cost, Before By-product Credits (1) |
|
| 76,645 |
|
|
| 46,007 |
|
|
| 122,652 |
|
Reclamation and other costs |
|
| 987 |
|
|
| 210 |
|
|
| 1,197 |
|
Sustaining capital |
|
| 11,566 |
|
|
| 7,281 |
|
|
| 18,847 |
|
General and administrative |
|
| 8,294 |
|
|
| — |
|
|
| 8,294 |
|
AISC, Before By-product Credits (1) |
|
| 97,492 |
|
|
| 53,498 |
|
|
| 150,990 |
|
By-product credits: |
|
|
|
|
|
|
|
|
| |||
Zinc |
|
| (34,628 | ) |
|
| — |
|
|
| (34,628 | ) |
Gold |
|
| (18,583 | ) |
|
| — |
|
|
| (18,583 | ) |
Lead |
|
| (19,802 | ) |
|
| — |
|
|
| (19,802 | ) |
Silver |
|
| — |
|
|
| (166 | ) |
|
| (166 | ) |
Total By-product credits |
|
| (73,013 | ) |
|
| (166 | ) |
|
| (73,179 | ) |
Cash Cost, After By-product Credits |
| $ | 3,632 |
|
| $ | 45,841 |
|
| $ | 49,473 |
|
AISC, After By-product Credits |
| $ | 24,479 |
|
| $ | 53,332 |
|
| $ | 77,811 |
|
Divided by ounces produced |
|
| 3,318 |
|
|
| 30 |
|
|
|
| |
Cash Cost, Before By-product Credits, per Ounce |
| $ | 23.10 |
|
| $ | 1,521 |
|
|
|
| |
By-product credits per ounce |
|
| (22.01 | ) |
|
| (5 | ) |
|
|
| |
Cash Cost, After By-product Credits, per Ounce |
| $ | 1.09 |
|
| $ | 1,516 |
|
|
|
| |
AISC, Before By-product Credits, per Ounce |
| $ | 29.38 |
|
| $ | 1,769 |
|
|
|
| |
By-product credits per ounce |
|
| (22.01 | ) |
|
| (5 | ) |
|
|
| |
AISC, After By-product Credits, per Ounce |
| $ | 7.37 |
|
| $ | 1,764 |
|
|
|
|
In thousands (except per ounce amounts) | Three Months Ended September 30, 2022 | |||||||||||||||
Greens Creek | Lucky Friday | Corporate (2) | Total Silver | |||||||||||||
Total cost of sales | $ | 52,502 | $ | 24,164 | $ | — | $ | 76,666 | ||||||||
Depreciation, depletion and amortization | (10,305 | ) | (7,261 | ) | — | (17,566 | ) | |||||||||
Treatment costs | 9,477 | 4,791 | — | 14,268 | ||||||||||||
Change in product inventory | 4,464 | 3,022 | — | 7,486 | ||||||||||||
Reclamation and other costs | (118 | ) | (152 | ) | — | (270 | ) | |||||||||
Cash Cost, Before By-product Credits(1) | 56,020 | 24,564 | 80,584 | |||||||||||||
Reclamation and other costs | 705 | 282 | — | 987 | ||||||||||||
Sustaining exploration | 3,776 | — | 722 | 4,498 | ||||||||||||
Sustaining capital | 10,219 | 11,264 | 187 | 21,670 | ||||||||||||
General and administrative | — | — | 11,003 | 11,003 | ||||||||||||
AISC, Before By-product Credits(1) | 70,720 | 36,110 | 11,912 | 118,742 | ||||||||||||
By-product credits: | ||||||||||||||||
Zinc | (26,244 | ) | (7,155 | ) | — | (33,399 | ) | |||||||||
Gold | (17,019 | ) | — | — | (17,019 | ) | ||||||||||
Lead | (6,212 | ) | (11,796 | ) | — | (18,008 | ) | |||||||||
Total By-product credits | (49,475 | ) | (18,951 | ) | — | (68,426 | ) | |||||||||
Cash Cost, After By-product Credits | $ | 6,545 | $ | 5,613 | $ | — | $ | 12,158 | ||||||||
AISC, After By-product Credits | $ | 21,245 | $ | 17,159 | 11,912 | $ | 50,316 | |||||||||
Divided by ounces produced | 2,469 | 1,075 | 3,544 | |||||||||||||
Cash Cost, Before By-product Credits, per Ounce | $ | 22.69 | $ | 22.87 | $ | 22.74 | ||||||||||
By-product credits per ounce | (20.04 | ) | (17.64 | ) | (19.31 | ) | ||||||||||
Cash Cost, After By-product Credits, per Ounce | $ | 2.65 | $ | 5.23 | $ | 3.43 | ||||||||||
AISC, Before By-product Credits, per Ounce | $ | 28.65 | $ | 33.62 | $ | 33.51 | ||||||||||
By-product credits per ounce | (20.04 | ) | (17.64 | ) | (19.31 | ) | ||||||||||
AISC, After By-product Credits, per Ounce | $ | 8.61 | $ | 15.98 | $ | 14.20 | ||||||||||
In thousands (except per ounce amounts) | Three Months ended September 30, 2022 | |||||||
Casa Berardi | Total Gold | |||||||
Total cost of sales | $ | 59,532 | $ | 59,532 | ||||
Depreciation, depletion and amortization | (15,089 | ) | (15,089 | ) | ||||
Treatment costs | 429 | 429 | ||||||
Change in product inventory | 420 | 420 | ||||||
Reclamation and other costs | (203 | ) | (203 | ) | ||||
Cash Cost, Before By-product Credits(1) | 45,089 | 45,089 | ||||||
Reclamation and other costs | 204 | 204 | ||||||
Sustaining exploration | 2,314 | 2,314 | ||||||
Sustaining capital | 10,457 | 10,457 | ||||||
AISC, Before By-product Credits(1) | 58,064 | 58,064 | ||||||
By-product credits: | ||||||||
Silver | (131 | ) | (131 | ) | ||||
Total By-product credits | (131 | ) | (131 | ) | ||||
Cash Cost, After By-product Credits | $ | 44,958 | $ | 44,958 | ||||
AISC, After By-product Credits | $ | 57,933 | $ | 57,933 | ||||
Divided by ounces produced | 33 | 33 | ||||||
Cash Cost, Before By-product Credits, per Ounce | $ | 1,353 | $ | 1,353 | ||||
By-product credits per ounce | (4 | ) | (4 | ) | ||||
Cash Cost, After By-product Credits, per Ounce | $ | 1,349 | $ | 1,349 | ||||
AISC, Before By-product Credits, per Ounce | $ | 1,742 | $ | 1,742 | ||||
By-product credits per ounce | (4 | ) | (4 | ) | ||||
AISC, After By-product Credits, per Ounce | $ | 1,738 | $ | 1,738 | ||||
In thousands (except per ounce amounts) | Three Months ended September 30, 2022 | |||||||||||
Total Silver | Total Gold | Total | ||||||||||
Total cost of sales | $ | 76,666 | $ | 59,532 | $ | 136,198 | ||||||
Depreciation, depletion and amortization | (17,566 | ) | (15,089 | ) | (32,655 | ) | ||||||
Treatment costs | 14,268 | 429 | 14,697 | |||||||||
Change in product inventory | 7,486 | 420 | 7,906 | |||||||||
Reclamation and other costs | (270 | ) | (203 | ) | (473 | ) | ||||||
Cash Cost, Before By-product Credits(1) | 80,584 | 45,089 | 125,673 | |||||||||
Reclamation and other costs | 987 | 204 | 1,191 | |||||||||
Sustaining exploration | 4,498 | 2,314 | 6,812 | |||||||||
Sustaining capital | 21,670 | 10,457 | 32,127 | |||||||||
General and administrative | 11,003 | — | 11,003 | |||||||||
AISC, Before By-product Credits(1) | 118,742 | 58,064 | 176,806 | |||||||||
By-product credits: | ||||||||||||
Zinc | (33,399 | ) | — | (33,399 | ) | |||||||
Gold | (17,019 | ) | — | (17,019 | ) | |||||||
Lead | (18,008 | ) | — | (18,008 | ) | |||||||
Silver | — | (131 | ) | (131 | ) | |||||||
Total By-product credits | (68,426 | ) | (131 | ) | (68,557 | ) | ||||||
Cash Cost, After By-product Credits | $ | 12,158 | $ | 44,958 | $ | 57,116 | ||||||
AISC, After By-product Credits | $ | 50,316 | $ | 57,933 | $ | 108,249 | ||||||
Divided by ounces produced | 3,544 | 33 | ||||||||||
Cash Cost, Before By-product Credits, per Ounce | $ | 22.74 | $ | 1,353 | ||||||||
By-product credits per ounce | (19.31 | ) | (4 | ) | ||||||||
Cash Cost, After By-product Credits, per Ounce | $ | 3.43 | $ | 1,349 | ||||||||
AISC, Before By-product Credits, per Ounce | $ | 33.51 | $ | 1,742 | ||||||||
By-product credits per ounce | (19.31 | ) | (4 | ) | ||||||||
AISC, After By-product Credits, per Ounce | $ | 14.20 | $ | 1,738 | ||||||||
In thousands (except per ounce amounts) | Three Months Ended September 30, 2021 | |||||||||||||||
Greens Creek | Lucky Friday | Corporate and other (2) | Total Silver | |||||||||||||
Total cost of sales | $ | 55,193 | $ | 23,591 | $ | — | $ | 78,784 | ||||||||
Depreciation, depletion and amortization | (13,097 | ) | (6,590 | ) | — | (19,687 | ) | |||||||||
Treatment costs | 7,979 | 3,427 | — | 11,406 | ||||||||||||
Change in product inventory | (122 | ) | (68 | ) | — | (190 | ) | |||||||||
Reclamation and other costs | (786 | ) | (281 | ) | — | (1,067 | ) | |||||||||
Cash Cost, Before By-product Credits(1) | 49,167 | 20,079 | — | 69,246 | ||||||||||||
Reclamation and other costs | 848 | 264 | — | 1,112 | ||||||||||||
Sustaining exploration | 2,472 | — | 474 | 2,946 | ||||||||||||
Sustaining capital | 6,228 | 8,406 | — | 14,634 | ||||||||||||
General and administrative | — | — | 8,874 | 8,874 | ||||||||||||
AISC, Before By-product Credits(1) | 58,715 | 28,749 | 9,348 | 96,812 | ||||||||||||
By-product credits: | ||||||||||||||||
Zinc | (25,295 | ) | (4,611 | ) | — | (29,906 | ) | |||||||||
Gold | (14,864 | ) | — | — | (14,864 | ) | ||||||||||
Lead | (7,640 | ) | (10,188 | ) | — | (17,828 | ) | |||||||||
Total By-product credits | (47,799 | ) | (14,799 | ) | — | (62,598 | ) | |||||||||
Cash Cost, After By-product Credits | $ | 1,368 | $ | 5,280 | — | $ | 6,648 | |||||||||
AISC, After By-product Credits | $ | 10,916 | $ | 13,950 | 9,348 | $ | 34,214 | |||||||||
Divided by ounces produced | 1,837 | 832 | 2,669 | |||||||||||||
Cash Cost, Before By-product Credits, per Ounce | $ | 26.76 | $ | 24.14 | $ | 25.93 | ||||||||||
By-product credits per ounce | (26.02 | ) | (17.79 | ) | (23.44 | ) | ||||||||||
Cash Cost, After By-product Credits, per Ounce | $ | 0.74 | $ | 6.35 | $ | 2.49 | ||||||||||
AISC, Before By-product Credits, per Ounce | $ | 31.96 | $ | 34.58 | $ | 36.26 | ||||||||||
By-product credits per ounce | (26.02 | ) | (17.79 | ) | (23.44 | ) | ||||||||||
AISC, After By-product Credits, per Ounce | $ | 5.94 | $ | 16.79 | $ | 12.82 | ||||||||||
In thousands (except per ounce amounts) | Three Months Ended September 30, 2021 | |||||||||||
Casa Berardi | Nevada Operations | Total Gold | ||||||||||
Total cost of sales | $ | 58,164 | $ | 21,384 | $ | 79,548 | ||||||
Depreciation, depletion and amortization | (19,968 | ) | (6,135 | ) | (26,103 | ) | ||||||
Treatment costs | 475 | 1 | 476 | |||||||||
Change in product inventory | (3,369 | ) | (12,389 | ) | (15,758 | ) | ||||||
Reclamation and other costs | (210 | ) | — | (210 | ) | |||||||
Exclusion of Nevada Operations costs | — | — | — | |||||||||
Cash Cost, Before By-product Credits(1) | 35,092 | 2,861 | 37,953 | |||||||||
Reclamation and other costs | 209 | 327 | 536 | |||||||||
Sustaining exploration | 1,541 | — | 1,541 | |||||||||
Sustaining capital | 7,208 | 29 | 7,237 | |||||||||
AISC, Before By-product Credits(1) | 44,050 | 3,217 | 47,267 | |||||||||
By-product credits: | ||||||||||||
Silver | (169 | ) | (6 | ) | (175 | ) | ||||||
Total By-product credits | (169 | ) | (6 | ) | (175 | ) | ||||||
Cash Cost, After By-product Credits | $ | 34,923 | $ | 2,855 | $ | 37,778 | ||||||
AISC, After By-product Credits | $ | 43,881 | $ | 3,211 | $ | 47,092 | ||||||
Divided by ounces produced | 30 | 3 | 33 | |||||||||
Cash Cost, Before By-product Credits, per Ounce | $ | 1,181 | $ | 1,040 | $ | 1,168 | ||||||
By-product credits per ounce | (6 | ) | (2 | ) | (5 | ) | ||||||
Cash Cost, After By-product Credits, per Ounce | $ | 1,175 | $ | 1,038 | $ | 1,163 | ||||||
AISC, Before By-product Credits, per Ounce | $ | 1,482 | $ | 1,169 | $ | 1,455 | ||||||
By-product credits per ounce | (6 | ) | (2 | ) | (5 | ) | ||||||
AISC, After By-product Credits, per Ounce | $ | 1,476 | $ | 1,167 | $ | 1,450 | ||||||
In thousands (except per ounce amounts) | Three Months Ended September 30, 2021 | |||||||||||
Total Silver | Total Gold | Total | ||||||||||
Total cost of sales | $ | 78,784 | $ | 79,548 | $ | 158,332 | ||||||
Depreciation, depletion and amortization | (19,687 | ) | (26,103 | ) | (45,790 | ) | ||||||
Treatment costs | 11,406 | 476 | 11,882 | |||||||||
Change in product inventory | (190 | ) | (15,758 | ) | (15,948 | ) | ||||||
Reclamation and other costs | (1,067 | ) | (210 | ) | (1,277 | ) | ||||||
Exclusion of Nevada Operations costs | — | |||||||||||
Cash Cost, Before By-product Credits(1) | 69,246 | 37,953 | 107,199 | |||||||||
Reclamation and other costs | 1,112 | 536 | 1,648 | |||||||||
Sustaining exploration | 2,946 | 1,541 | 4,487 | |||||||||
Sustaining capital | 14,634 | 7,237 | 21,871 | |||||||||
General and administrative | 8,874 | — | 8,874 | |||||||||
AISC, Before By-product Credits(1) | 96,812 | 47,267 | 144,079 | |||||||||
By-product credits: | ||||||||||||
Zinc | (29,906 | ) | — | (29,906 | ) | |||||||
Gold | (14,864 | ) | — | (14,864 | ) | |||||||
Lead | (17,828 | ) | — | (17,828 | ) | |||||||
Silver | — | (175 | ) | (175 | ) | |||||||
Total By-product credits | (62,598 | ) | (175 | ) | (62,773 | ) | ||||||
Cash Cost, After By-product Credits | $ | 6,648 | $ | 37,778 | $ | 44,426 | ||||||
AISC, After By-product Credits | $ | 34,214 | $ | 47,092 | $ | 81,306 | ||||||
Divided by ounces produced | 2,669 | 33 | ||||||||||
Cash Cost, Before By-product Credits, per Ounce | $ | 25.93 | $ | 1,168 | ||||||||
By-product credits per ounce | (23.44 | ) | (5 | ) | ||||||||
Cash Cost, After By-product Credits, per Ounce | $ | 2.49 | $ | 1,163 | ||||||||
AISC, Before By-product Credits, per Ounce | $ | 36.26 | $ | 1,455 | ||||||||
By-product credits per ounce | (23.44 | ) | (5 | ) | ||||||||
AISC, After By-product Credits, per Ounce | $ | 12.82 | $ | 1,450 | ||||||||
In thousands (except per ounce amounts) | Nine Months Ended September 30, 2022 | |||||||||||||||
Greens Creek | Lucky Friday | Corporate (1) | Total Silver | |||||||||||||
Total cost of sales | $ | 162,644 | $ | 83,779 | $ | — | $ | 246,423 | ||||||||
Depreciation, depletion and amortization | (35,354 | ) | (24,155 | ) | — | (59,509 | ) | |||||||||
Treatment costs | 27,369 | 13,271 | — | 40,640 | ||||||||||||
Change in product inventory | 9,899 | 2,620 | — | 12,519 | ||||||||||||
Reclamation and other costs | (1,988 | ) | (769 | ) | — | (2,757 | ) | |||||||||
Cash Cost, Before By-product Credits(1) | 162,570 | 74,746 | — | 237,316 | ||||||||||||
Reclamation and other costs | 2,115 | 846 | — | 2,961 | ||||||||||||
Sustaining exploration | 4,870 | — | 2,207 | 7,077 | ||||||||||||
Sustaining capital | 30,843 | 24,937 | 334 | 56,114 | ||||||||||||
General and administrative | — | — | 28,989 | 28,989 | ||||||||||||
AISC, Before By-product Credits(1) | 200,398 | 100,529 | 31,530 | 332,457 | ||||||||||||
By-product credits: | ||||||||||||||||
Zinc | (87,723 | ) | (21,358 | ) | — | (109,081 | ) | |||||||||
Gold | (55,966 | ) | — | — | (55,966 | ) | ||||||||||
Lead | (22,449 | ) | (38,175 | ) | — | (60,624 | ) | |||||||||
Total By-product credits | (166,138 | ) | (59,533 | ) | — | (225,671 | ) | |||||||||
Cash Cost, After By-product Credits | $ | (3,568 | ) | $ | 15,213 | — | $ | 11,645 | ||||||||
AISC, After By-product Credits | $ | 34,260 | $ | 40,996 | $ | 31,530 | $ | 106,786 | ||||||||
Divided by ounces produced | 7,309 | 3,189 | 10,498 | |||||||||||||
Cash Cost, Before By-product Credits, per Ounce | $ | 22.24 | $ | 23.44 | $ | 22.61 | ||||||||||
By-product credits per ounce | (22.73 | ) | (18.67 | ) | (21.50 | ) | ||||||||||
Cash Cost, After By-product Credits, per Ounce | $ | (0.49 | ) | $ | 4.77 | $ | 1.11 | |||||||||
AISC, Before By-product Credits, per Ounce | $ | 27.42 | $ | 31.53 | $ | 31.67 | ||||||||||
By-product credits per ounce | (22.73 | ) | (18.67 | ) | (21.50 | ) | ||||||||||
AISC, After By-product Credits, per Ounce | $ | 4.69 | $ | 12.86 | $ | 10.17 | ||||||||||
In thousands (except per ounce amounts) | Nine Months Ended September 30, 2022 | |||||||
Casa Berardi | Total Gold | |||||||
Total cost of sales | $ | 183,570 | $ | 183,570 | ||||
Depreciation, depletion and amortization | (46,394 | ) | (46,394 | ) | ||||
Treatment costs | 1,345 | 1,345 | ||||||
Change in product inventory | (936 | ) | (936 | ) | ||||
Reclamation and other costs | (623 | ) | (623 | ) | ||||
Cash Cost, Before By-product Credits(1) | 136,962 | 136,962 | ||||||
Reclamation and other costs | 623 | 623 | ||||||
Sustaining exploration | 4,886 | 4,886 | ||||||
Sustaining capital | 25,587 | 25,587 | ||||||
AISC, Before By-product Credits(1) | 168,058 | 168,058 | ||||||
By-product credits: | ||||||||
Silver | (485 | ) | (485 | ) | ||||
Total By-product credits | (485 | ) | (485 | ) | ||||
Cash Cost, After By-product Credits | $ | 136,477 | $ | 136,477 | ||||
AISC, After By-product Credits | $ | 167,573 | $ | 167,573 | ||||
Divided by ounces produced | 97 | 97 | ||||||
Cash Cost, Before By-product Credits, per Ounce | $ | 1,415 | $ | 1,415 | ||||
By-product credits per ounce | (6 | ) | (6 | ) | ||||
Cash Cost, After By-product Credits, per Ounce | $ | 1,409 | $ | 1,409 | ||||
AISC, Before By-product Credits, per Ounce | $ | 1,735 | $ | 1,735 | ||||
By-product credits per ounce | (6 | ) | (6 | ) | ||||
AISC, After By-product Credits, per Ounce | $ | 1,729 | $ | 1,729 | ||||
In thousands (except per ounce amounts) | Nine Months Ended September 30, 2022 | |||||||||||
Total Silver | Total Gold | Total | ||||||||||
Total cost of sales | $ | 246,423 | $ | 183,570 | $ | 429,993 | ||||||
Depreciation, depletion and amortization | (59,509 | ) | (46,394 | ) | (105,903 | ) | ||||||
Treatment costs | 40,640 | 1,345 | 41,985 | |||||||||
Change in product inventory | 12,519 | (936 | ) | 11,583 | ||||||||
Reclamation and other costs | (2,757 | ) | (623 | ) | (3,380 | ) | ||||||
Cash Cost, Before By-product Credits(1) | 237,316 | 136,962 | 374,278 | |||||||||
Reclamation and other costs | 2,961 | 623 | 3,584 | |||||||||
Sustaining exploration | 7,077 | 4,886 | 11,963 | |||||||||
Sustaining capital | 56,114 | 25,587 | 81,701 | |||||||||
General and administrative | 28,989 | — | 28,989 | |||||||||
AISC, Before By-product Credits(1) | 332,457 | 168,058 | 500,515 | |||||||||
By-product credits: | ||||||||||||
Zinc | (109,081 | ) | — | (109,081 | ) | |||||||
Gold | (55,966 | ) | — | (55,966 | ) | |||||||
Lead | (60,624 | ) | — | (60,624 | ) | |||||||
Silver | (485 | ) | (485 | ) | ||||||||
Total By-product credits | (225,671 | ) | (485 | ) | (226,156 | ) | ||||||
Cash Cost, After By-product Credits | $ | 11,645 | $ | 136,477 | $ | 148,122 | ||||||
AISC, After By-product Credits | $ | 106,786 | $ | 167,573 | $ | 274,359 | ||||||
Divided by ounces produced | 10,498 | 97 | ||||||||||
Cash Cost, Before By-product Credits, per Ounce | $ | 22.61 | $ | 1,415 | ||||||||
By-product credits per ounce | (21.50 | ) | (6 | ) | ||||||||
Cash Cost, After By-product Credits, per Ounce | $ | 1.11 | $ | 1,409 | ||||||||
AISC, Before By-product Credits, per Ounce | $ | 31.67 | $ | 1,735 | ||||||||
By-product credits per ounce | (21.50 | ) | (6 | ) | ||||||||
AISC, After By-product Credits, per Ounce | $ | 10.17 | $ | 1,729 | ||||||||
In thousands (except per ounce amounts) | Nine Months Ended September 30, 2021 | |||||||||||||||
Greens Creek | Lucky Friday | Corporate and other (2) | Total Silver | |||||||||||||
Total cost of sales | $ | 163,861 | $ | 74,287 | $ | 95 | $ | 238,243 | ||||||||
Depreciation, depletion and amortization | (42,410 | ) | (20,328 | ) | — | (62,738 | ) | |||||||||
Treatment costs | 27,444 | 13,087 | — | 40,531 | ||||||||||||
Change in product inventory | (156 | ) | (1,757 | ) | — | (1,913 | ) | |||||||||
Reclamation and other costs | (1,777 | ) | (840 | ) | (95 | ) | (2,712 | ) | ||||||||
Cash Cost, Before By-product Credits(1) | 146,962 | 64,449 | 211,411 | |||||||||||||
Reclamation and other costs | 2,543 | 792 | 3,335 | |||||||||||||
Sustaining exploration | 3,895 | — | 1,359 | 5,254 | ||||||||||||
Sustaining capital | 17,459 | 19,104 | — | 36,563 | ||||||||||||
General and administrative | — | — | 27,985 | 27,985 | ||||||||||||
AISC, Before By-product Credits(1) | 170,859 | 84,345 | 29,344 | 284,548 | ||||||||||||
By-product credits: | ||||||||||||||||
Zinc | (74,571 | ) | (14,457 | ) | — | (89,028 | ) | |||||||||
Gold | (56,299 | ) | — | (56,299 | ) | |||||||||||
Lead | (23,265 | ) | (30,762 | ) | — | (54,027 | ) | |||||||||
Total By-product credits | (154,135 | ) | (45,219 | ) | — | (199,354 | ) | |||||||||
Cash Cost, After By-product Credits | $ | (7,173 | ) | $ | 19,230 | $ | — | $ | 12,057 | |||||||
AISC, After By-product Credits | $ | 16,724 | $ | 39,126 | $ | 29,344 | $ | 85,194 | ||||||||
Divided by ounces produced | 6,981 | 2,609 | 9,590 | |||||||||||||
Cash Cost, Before By-product Credits, per Ounce | $ | 21.05 | $ | 24.70 | $ | 22.05 | ||||||||||
By-product credits per ounce | (22.08 | ) | (17.33 | ) | (20.79 | ) | ||||||||||
Cash Cost, After By-product Credits, per Ounce | $ | (1.03 | ) | $ | 7.37 | $ | 1.26 | |||||||||
AISC, Before By-product Credits, per Ounce | $ | 24.48 | $ | 32.33 | $ | 29.67 | ||||||||||
By-product credits per ounce | (22.08 | ) | (17.33 | ) | (20.79 | ) | ||||||||||
AISC, After By-product Credits, per Ounce | $ | 2.40 | $ | 15.00 | $ | 8.88 | ||||||||||
In thousands (except per ounce amounts) | Nine Months Ended September 30, 2021 | |||||||||||
Casa Berardi | Nevada Operations | Total Gold | ||||||||||
Total cost of sales | $ | 172,760 | $ | 46,832 | $ | 219,592 | ||||||
Depreciation, depletion and amortization | (61,159 | ) | (15,021 | ) | (76,180 | ) | ||||||
Treatment costs | 1,723 | 1,731 | 3,454 | |||||||||
Change in product inventory | (2,401 | ) | (9,951 | ) | (12,352 | ) | ||||||
Reclamation and other costs | (632 | ) | 299 | (333 | ) | |||||||
Cash Cost, Before By-product Credits(1) | 110,291 | 23,890 | 134,181 | |||||||||
Reclamation and other costs | 632 | 681 | 1,313 | |||||||||
Sustaining exploration | 3,551 | — | 3,551 | |||||||||
Sustaining capital | 21,030 | 195 | 21,225 | |||||||||
AISC, Before By-product Credits(1) | 135,504 | 24,766 | 160,270 | |||||||||
By-product credits: | ||||||||||||
Silver | (656 | ) | (1,131 | ) | (1,787 | ) | ||||||
Total By-product credits | (656 | ) | (1,131 | ) | (1,787 | ) | ||||||
Cash Cost, After By-product Credits | $ | 109,635 | $ | 22,759 | $ | 132,394 | ||||||
AISC, After By-product Credits | $ | 134,848 | $ | 23,635 | $ | 158,483 | ||||||
Divided by ounces produced | 97 | 20 | 117 | |||||||||
Cash Cost, Before By-product Credits, per Ounce | $ | 1,134 | $ | 1,180 | $ | 1,142 | ||||||
By-product credits per ounce | (7 | ) | (56 | ) | (15 | ) | ||||||
Cash Cost, After By-product Credits, per Ounce | $ | 1,127 | $ | 1,124 | $ | 1,127 | ||||||
AISC, Before By-product Credits, per Ounce | $ | 1,394 | $ | 1,223 | $ | 1,364 | ||||||
By-product credits per ounce | (7 | ) | (56 | ) | (15 | ) | ||||||
AISC, After By-product Credits, per Ounce | $ | 1,387 | $ | 1,167 | $ | 1,349 | ||||||
In thousands (except per ounce amounts) | Nine Months Ended September 30, 2021 | |||||||||||
Total Silver | Total Gold | Total | ||||||||||
Total cost of sales | $ | 238,243 | $ | 219,592 | 457,835 | |||||||
Depreciation, depletion and amortization | (62,738 | ) | (76,180 | ) | (138,918 | ) | ||||||
Treatment costs | 40,531 | 3,454 | 43,985 | |||||||||
Change in product inventory | (1,913 | ) | (12,352 | ) | (14,265 | ) | ||||||
Reclamation and other costs | (2,712 | ) | (333 | ) | (3,045 | ) | ||||||
Cash Cost, Before By-product Credits(1) | 211,411 | 134,181 | 345,592 | |||||||||
Reclamation and other costs | 3,335 | 1,313 | 4,648 | |||||||||
Sustaining exploration | 5,254 | 3,551 | 8,805 | |||||||||
Sustaining capital | 36,563 | 21,225 | 57,788 | |||||||||
General and administrative | 27,985 | — | 27,985 | |||||||||
AISC, Before By-product Credits(1) | 284,548 | 160,270 | 444,818 | |||||||||
By-product credits: | ||||||||||||
Zinc | (89,028 | ) | — | (89,028 | ) | |||||||
Gold | (56,299 | ) | — | (56,299 | ) | |||||||
Lead | (54,027 | ) | — | (54,027 | ) | |||||||
Silver | — | (1,787 | ) | (1,787 | ) | |||||||
Total By-product credits | (199,354 | ) | (1,787 | ) | (201,141 | ) | ||||||
Cash Cost, After By-product Credits | $ | 12,057 | $ | 132,394 | $ | 144,451 | ||||||
AISC, After By-product Credits | $ | 85,194 | $ | 158,483 | $ | 243,677 | ||||||
Divided by ounces produced | 9,590 | 117 | ||||||||||
Cash Cost, Before By-product Credits, per Ounce | $ | 22.05 | $ | 1,142 | ||||||||
By-product credits per ounce | (20.79 | ) | (15 | ) | ||||||||
Cash Cost, After By-product Credits, per Ounce | $ | 1.26 | $ | 1,127 | ||||||||
AISC, Before By-product Credits, per Ounce | $ | 29.67 | $ | 1,364 | ||||||||
By-product credits per ounce | (20.79 | ) | (15 | ) | ||||||||
AISC, After By-product Credits, per Ounce | $ | 8.88 | $ | 1,349 | ||||||||
Financial Liquidity and Capital Resources
We have a disciplined cash management strategy of maintaining financial flexibility to execute our capital priorities and provide long-term value to our stockholders. Consistent with that strategy, we aim to maintain an acceptable level of net debt and sufficient liquidity to fund debt service costs, operations, capital developmentexpenditures, exploration and explorationpre-development projects, while returning cash to stockholders through dividends and potential share repurchases.
At September 30, 2022,March 31, 2023, we had $144.7$95.9 million in cash and cash equivalents, of which $30.8$25.6 million was held in foreign subsidiaries’subsidiaries' local currency that we anticipate utilizing for near-term operating, exploration or capital costs by those foreign subsidiaries. We also have USD cash and cash equivalent balances held by our foreign subsidiaries that, if repatriated,
33
taxes. We believe that our liquidity and capital resources from our U.S. operations are adequate to fund our U.S. operations and corporate activities.
Pursuant to our common stock dividend policy described in1220212022 Formeach of the first second and third quarters of 20222023 and $4.7 million, $6.0 million and $6.0 million in the comparable periods of 2021,2022, respectively. Our dividend policy has a silver-linked component which ties the amount of declared common stock dividends to our realized silver price for the preceding quarter. Another component of our common stock dividend policy anticipates paying an annual minimum dividend.
For illustrative purposes only, the table below summarizes potential dividend amounts under our dividend policy.
Quarterly Average Realized Silver Price ($ per ounce) | Quarterly Silver- Linked Dividend ($ per share) | Annualized Silver-Linked Dividend ($ per share) | Annualized Minimum Dividend ($ per share) | Annualized Dividends per Share: Silver- Linked and Minimum ($ per share) | |||||||||||||||||||
Less than $20 | $— | $— | $0.015 | $0.015 | |||||||||||||||||||
$20 | $0.0025 | $0.01 | $0.015 | $0.025 | |||||||||||||||||||
$25 | $0.0100 | $0.04 | $0.015 | $0.055 | |||||||||||||||||||
$30 | $0.0150 | $0.06 | $0.015 | $0.075 | |||||||||||||||||||
$35 | $0.0250 | $0.10 | $0.015 | $0.115 | |||||||||||||||||||
$40 | $0.0350 | $0.14 | $0.015 | $0.155 | |||||||||||||||||||
$45 | $0.0450 | $0.18 | $0.015 | $0.195 | |||||||||||||||||||
$50 | $0.0550 | $0.22 | $0.015 | $0.235 |
Quarterly Average Realized Silver Price ($ per ounce) |
|
| Quarterly Silver-Linked Dividend ($ per share) |
| Annualized Silver-Linked Dividend ($ per share) |
| Annualized Minimum Dividend ($ per share) |
| Annualized Dividends per Share: Silver-Linked and Minimum ($ per share) | |
Less than $20 |
|
| $— |
| $— |
| $0.015 |
| $0.015 | |
$ | 20 |
|
| $0.0025 |
| $0.01 |
| $0.015 |
| $0.025 |
$ | 25 |
|
| $0.010 |
| $0.04 |
| $0.015 |
| $0.055 |
$ | 30 |
|
| $0.015 |
| $0.06 |
| $0.015 |
| $0.075 |
$ | 35 |
|
| $0.025 |
| $0.10 |
| $0.015 |
| $0.115 |
$ | 40 |
|
| $0.035 |
| $0.14 |
| $0.015 |
| $0.155 |
$ | 45 |
|
| $0.045 |
| $0.18 |
| $0.015 |
| $0.195 |
$ | 50 |
|
| $0.055 |
| $0.22 |
| $0.015 |
| $0.235 |
The declaration and payment of dividends on our common stock is at the sole discretion of our board of directors, and there can be no assurance that we will continue to declare and pay common stock dividends in the future.
Pursuant to our stock repurchase program described in1220212022 FormSeptember 30, 2022March 31, 2023 and December 31, 2021,2022, 934,100 shares had been purchased in prior periods at an average price of $3.99 per share, leaving 19.1 million shares that may yet be purchased under the program. We have not repurchased any shares since June 2014. The closing price of our common stock at November 4, 2022, was $4.76 per share.
As discussed in, pursuant to an equity distribution agreement dated February 18, 2021, we may offer and sell up to 60 million shares of our common stock from time to time to or through sales agents in“at-the-market”(ATM) “at-the-market” offerings. Sales of the shares, if any, will be made by means of ordinary brokers transactions or as otherwise agreed between the Company and the agents as principals. Whether or not we engage in sales from time to time may depend on a variety of factors, including share price, our cash resources, customarythe equity distributionthat agreement are registered under the Securities Act of 1933, as amended, pursuant to a shelf registration statement on FormAs of September 30, 2022, During the three months ended March 31, 2023, we had sold 1,176,8612,173,274 shares under the agreement for proceeds of $4.5$11.9 million, net of commissions and fees of approximately $0.1$0.2 million. All of the sales occurred during September 2022.
As a result of our current cash balances, the performance of our current and expected operations, current metals prices, proceeds from potential New Credit Agreement, we believe we will be able to meet our obligations and other potential cash requirements during the next 12 months from the date of this report. Our obligations and other uses of cash may include, but are not limited to: debt service obligations related to the Senior Notes and IQ Notes; principal and interest payments under our New Credit Agreement; deferral of revenues,$150 $190to 165 $200million will be spent in 20222023 on capital expenditures, primarily for equipment, infrastructure, and development at our mines, including $93.2$54.4 million already incurred as of September 30, 2022,March 31, 2023, before any lease financing. We also estimate exploration and$45.0$33.0 million in 2022,2023, including $39.1$5.0 million already incurred as of September 30, 2022.March 31, 2023. Our expenditures for these items and our related plans for 20222023 may change based upon our financial position, metals prices, and other considerations. Our ability to fund the activities described above will depend on our operating performance, metals prices, our ability to estimate revenues and costs, sources of liquidity available to us, including the revolving credit facility, and other factors. A sustained downturn in metals
34
prices, significant increase in operational or capital costs or other uses of cash, our inability to access the credit facility or the sources of liquidity discussed above, or other factors beyond our control could impact our plans.
We may defer some capital investment and/or exploration and
Our liquid assets include (in millions):
September 30, 2022 | December 31, 2021 | |||||||
Cash and cash equivalents held in U.S. dollars | $ | 113.9 | $ | 196.2 | ||||
Cash and cash equivalents held in foreign currency | 30.8 | 13.8 | ||||||
Total cash and cash equivalents | 144.7 | 210.0 | ||||||
Marketable equity securities – non-current | 13.3 | 14.4 | ||||||
Total cash, cash equivalents and investments | $ | 158.0 | $ | 224.4 | ||||
|
| March 31, 2023 |
|
| December 31, 2022 |
| ||
Cash and cash equivalents held in U.S. dollars |
| $ | 70.3 |
|
| $ | 86.8 |
|
Cash and cash equivalents held in foreign currency |
|
| 25.6 |
|
|
| 17.9 |
|
Total cash and cash equivalents |
|
| 95.9 |
|
|
| 104.7 |
|
Marketable equity securities - non-current |
|
| 26.4 |
|
|
| 24.0 |
|
Total cash, cash equivalents and investments |
| $ | 122.3 |
|
| $ | 128.7 |
|
Cash and cash equivalents decreased by $65.3$8.8 million in the first ninethree months of 2022.2023. Cash held in foreign currencies represents balances in Canadian dollars and Mexican Pesos, (“MXN”), with the $17.0$7.7 million increase in the first ninethree months of 20222023 resulting from increases in CAD held following the Alexco acquisition. The value ofdecreasedincreased by $1.1$2.4 million.
Nine Months Ended | ||||||||
September 30, 2022 | September 30, 2021 | |||||||
Cash provided by operating activities (in millions) | $ | 53.8 | $ | 167.0 |
|
| Three Months Ended |
| |||||
|
| March 31, 2023 |
|
| March 31, 2022 |
| ||
Cash provided by operating activities (in millions) |
| $ | 40.6 |
|
| $ | 37.9 |
|
Cash provided by operating activities infor the first ninethree months ended March 31, 2023 of 2022 of $53.8$40.6 million represented a $113.2$2.7 million decrease increasecompared to the $167.0$37.9 million provided by operatingcompared to the same period for 2022. The increase was due to working capital management activities generating $1.1 million of cash inflows in the first ninethree months of 2021. $93.2 million of the variance was the result of a net lossended March 31, 2023 compared to a net income in 2021, as adjusted fornon-cashitems. Net working capital changes in 2022 resulted in an outflowoutflows of $11.0 million versus an inflow of $8.9$7.4 million in 2021 reflecting an increase in inventory balances inthe same period for 2022 primarily due to enhanced accounts receivable collection activities, partially offset by lower income adjusted for non cash items of $5.8 million in the deferral of a shipment from Greens Creekthree months ended March 31, 2023 compared to the fourth quarter ofsame period for 2022, reflecting lower realized prices and an inventory build at Lucky Friday, changes in fair value of the net hedge book and collections of accounts receivable balances.
Nine Months Ended | ||||||||
September 30, 2022 | September 30, 2021 | |||||||
Cash used in investing activities (in millions) | $ | (127.7 | ) | $ | (78.0 | ) |
|
| Three Months Ended |
| |||||
|
| March 31, 2023 |
|
| March 31, 2022 |
| ||
Cash used in investing activities (in millions) |
| $ | (54.4 | ) |
| $ | (29.2 | ) |
During the first ninethree months of 2022,ended March 31, 2023, we invested $93.2$54.4 million in capital expenditures, excluding $9.7 million innon-cashfinance lease additions, an increase of $13.0$33.0 million compared to the same period in 2021.2022. The variance was primarily due to $17.1 million spend at Keno Hill during the three months ended March 31, 2023 and increased spending at Lucky Friday andCasa Berardi, Greens Creek partially offset by lower spending at Casa Berardi. As a result of the Alexco acquisition, we assumed a cash balance of $9.0 million, net of transaction costs of $5.1 million having advanced $25.0 million to Alexcopre-acquisition,to enable them to fund development of the Keno Hill mining district prior to the acquisition closing.and Lucky Friday. During the first nine months ofsame period in 2022, we acquired investmentsinvested $10.9 million in othermarketable securities of mining companies and short term investments for a total of $30.5 million, and disposed of the short-term investments and a mining company investment, generating totalgenerated proceeds of $9.4 million.
Nine Months Ended | ||||||||
September 30, 2022 | September 30, 2021 | |||||||
Cash provided by (used in) financing activities (in millions) | $ | 9.5 | $ | (27.4 | ) |
|
| Three Months Ended |
| |||||
|
| March 31, 2023 |
|
| March 31, 2022 |
| ||
Cash provided by (used in) financing activities (in millions) |
| $ | 5.0 |
|
| $ | (7.2 | ) |
During the first ninethree months ofended March 31, 2023 and 2022, and 2021, we paid cash dividends on our common and preferred stock totaling $10.5 $3.9million and $17.2$3.5 million, respectively. Due to lower realized silver prices during 2022 to date, the dividends paid on our common stock were $6.8 million lower than in the prior year, reflecting our dividend policy discussed above. We issued stock under our ATM program described above for net proceeds of $4.5$11.9 million in 2022.the three months ended March 31, 2023. We made repayments on our finance leases of $5.2$2.5 million and $5.6$1.7 million in the nine-month periodsthree months ended September 30,March 31, 2023 and 2022, and 2021, respectively. We acquired treasury shares for $3.7 million and $4.5 million in the first half of 2022 and 2021, respectively, as a result of employees’ elections to utilize net share settlement to satisfy their tax withholding obligations related to incentive compensation paid in stock.
Contractual Obligations, Contingent Liabilities and Commitments
The table below presents our fixed,September 30, 2022March 31, 2023 (in thousands):
|
| Payments Due By Period |
| |||||||||||||||||
|
| Less than 1 year |
|
| 1-3 years |
|
| 4-5 years |
|
| More than |
|
| Total |
| |||||
Purchase obligations (1) |
| $ | 50,910 |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 50,910 |
|
Credit facility(2) |
|
| 1,074 |
|
|
| 2,149 |
|
|
| 1,398 |
|
|
| — |
|
|
| 4,621 |
|
Finance lease commitments (3) |
|
| 8,812 |
|
|
| 10,494 |
|
|
| 1,350 |
|
|
| — |
|
|
| 20,656 |
|
Operating lease commitments (4) |
|
| 2,652 |
|
|
| 2,557 |
|
|
| 2,417 |
|
|
| 6,307 |
|
|
| 13,933 |
|
Senior Notes (5) |
|
| 34,438 |
|
|
| 68,876 |
|
|
| 539,569 |
|
|
| — |
|
|
| 642,883 |
|
IQ Notes (6) |
|
| 2,322 |
|
|
| 38,604 |
|
|
| — |
|
|
| — |
|
|
| 40,926 |
|
Total contractual cash obligations |
| $ | 100,208 |
|
| $ | 122,680 |
|
| $ | 544,734 |
|
| $ | 6,307 |
|
| $ | 773,929 |
|
35
Payments Due By Period | ||||||||||||||||||||
Less than 1 year | 1-3 years | 4-5 years | More than 5 years | Total | ||||||||||||||||
Purchase obligations (1) | $ | 33,514 | $ | — | $ | — | $ | — | $ | 33,514 | ||||||||||
Credit facility (2) | 25,722 | 1,447 | 583 | — | 27,752 | |||||||||||||||
Finance lease commitments (3) | 9,296 | 10,985 | 2,017 | — | 22,298 | |||||||||||||||
Operating lease commitments (4) | 3,101 | 2,630 | 2,039 | 5,878 | 13,648 | |||||||||||||||
Senior Notes (5) | 34,438 | 68,876 | 68,876 | 487,914 | 660,104 | |||||||||||||||
IQ Notes (6) | 2,293 | 39,257 | — | — | 41,550 | |||||||||||||||
Total contractual cash obligations | $ | 108,364 | $ | 123,195 | $ | 73,515 | $ | 493,792 | $ | 798,866 | ||||||||||
(2)
We record liabilities for costs associated with mine closure, reclamation of land and other environmental matters. At September 30, 2022,March 31, 2023, our liabilities for these matters totaled $116.3$118.3 million. Future expenditures related to closure, reclamation and environmental expenditures at our sites are difficult to estimate, although we anticipate we will incur expenditures relating to these obligations over the next 30 years. For additional information relating to our environmental obligations, see
Critical Accounting Estimates
There have been no significant changes to the critical accounting estimates disclosed inManagement’sManagement's Discussion and Analysis of Financial Condition and Results of Operations20212022 Form
Off-Balance
At September 30, 2022,March 31, 2023, we had no existing
Guarantor Subsidiaries
Presented below are Hecla’s unaudited interim condensed consolidating financial statements as required by RuleHecla’sHecla's subsidiaries of the Senior Notes and IQ Notes (seeHecla’sHecla's 100%-owned subsidiaries: Hecla Limited; Silver Hunter Mining Company; Rio Grande Silver, Inc.; Hecla MC Subsidiary, LLC; Hecla Silver Valley, Inc.; Burke Trading, Inc.; Hecla Montana, Inc.; Revett Silver Company; RC Resources, Inc.; Troy Mine Inc.; Revett Exploration, Inc.; Revett Holdings, Inc.; Mines Management, Inc.; Newhi, Inc.; Montanore Minerals Corp.; Hecla Alaska LLC; Hecla Greens Creek Mining Company; Hecla Admiralty Company; Hecla Juneau Mining Company; Klondex Holdings Inc.; Klondex Gold & Silver Mining Co.; Klondex Midas Holdings Limited; Klondex Aurora Mine Inc.; Klondex Hollister Mine Inc.; and Hecla Quebec, Inc.; and Alexco Resource Corp. We completed the offering of the Senior Notes on February 19, 2020 under our shelf registration statement previously filed with the SEC. We issued the IQ Notes in four equal tranches between July and October 2020.
36
The unaudited interim condensed consolidating financial statements below have been prepared from our financial information on the same basis of accounting as the unaudited interim condensed consolidated financial statements set forth elsewhere in this report. Investments in the subsidiaries are accounted for under the equity method. Accordingly, the entries necessary to consolidate Hecla, the Guarantors, and our
Separate financial statements of the Guarantors are not presented because the guarantees by the Guarantors are joint and several and full and unconditional, except for certain customary release provisions, including: (1) the sale or disposal of all or substantially all of the assets of the Guarantor; (2) the sale or other disposition of the capital stock of the Guarantor; (3) the Guarantor is designated as an unrestricted entity in accordance with the applicable provisions of the indenture; (4) Hecla ceases to be a borrower as defined in the indenture; and (5) upon legal or covenant defeasance or satisfaction and discharge of the indenture.
37
Unaudited Interim Condensed Consolidating Balance Sheets
As of September 30, 2022 | ||||||||||||||||||||
Parent | Guarantors | Non- Guarantors | Eliminations | Consolidated | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 100,333 | $ | 24,486 | $ | 19,850 | $ | — | $ | 144,669 | ||||||||||
Other current assets | 11,939 | 118,657 | 8,655 | — | 139,251 | |||||||||||||||
Properties, plants, equipment and mineral interests, net | 1,913 | 2,288,145 | 263,916 | 2,553,974 | ||||||||||||||||
Intercompany receivable (payable) | (195,180 | ) | (188,353 | ) | 321,214 | 62,319 | — | |||||||||||||
Investments in subsidiaries | 2,110,836 | — | — | (2,110,836 | ) | — | ||||||||||||||
Other non-current assets | 378,230 | 29,860 | 32,545 | (343,900 | ) | 96,735 | ||||||||||||||
Total assets | $ | 2,408,071 | $ | 2,272,795 | $ | 646,180 | $ | (2,392,417 | ) | $ | 2,934,629 | |||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||
Current liabilities | $ | (105,320 | ) | $ | 246,660 | $ | 12,561 | $ | 7,484 | $ | 161,385 | |||||||||
Long-term debt | 530,745 | 20,242 | — | — | 550,987 | |||||||||||||||
Non-current portion of accrued reclamation | — | 99,888 | 5,829 | — | 105,717 | |||||||||||||||
Non-current deferred tax liability | 22,098 | 408,148 | 13,043 | (289,064 | ) | 154,225 | ||||||||||||||
Other non-current liabilities | 5,780 | 1,076 | 691 | — | 7,547 | |||||||||||||||
Stockholders’ equity | 1,954,768 | 1,496,781 | 614,056 | (2,110,837 | ) | 1,954,768 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,408,071 | $ | 2,272,795 | $ | 646,180 | $ | (2,392,417 | ) | $ | 2,934,629 | |||||||||
|
| As of March 31, 2023 |
| |||||||||||||||||
|
| Parent |
|
| Guarantors |
|
| Non-Guarantors |
|
| Eliminations |
|
| Consolidated |
| |||||
|
| (in thousands) |
| |||||||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Cash and cash equivalents |
| $ | 54,365 |
|
| $ | 31,522 |
|
| $ | 10,052 |
|
| $ | — |
|
| $ | 95,939 |
|
Other current assets |
|
| 12,235 |
|
|
| 133,378 |
|
|
| 3,398 |
|
|
| — |
|
|
| 149,011 |
|
Properties, plants, equipment and mineral interests, net |
|
| (38 | ) |
|
| 2,579,385 |
|
|
| 8,218 |
|
|
| — |
|
|
| 2,587,565 |
|
Intercompany receivable (payable) |
|
| (188,218 | ) |
|
| (708,757 | ) |
|
| 562,447 |
|
|
| 334,528 |
|
|
| — |
|
Investments in subsidiaries |
|
| 2,267,701 |
|
|
| — |
|
|
| — |
|
|
| (2,267,701 | ) |
|
| — |
|
Other non-current assets |
|
| 389,556 |
|
|
| 21,303 |
|
|
| 20,979 |
|
|
| (338,729 | ) |
|
| 93,109 |
|
Total assets |
| $ | 2,535,601 |
|
| $ | 2,056,831 |
|
| $ | 605,094 |
|
| $ | (2,271,902 | ) |
| $ | 2,925,624 |
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Current liabilities |
| $ | 32,312 |
|
| $ | 134,219 |
|
| $ | 3,023 |
|
| $ | (4,201 | ) |
| $ | 165,353 |
|
Long-term debt |
|
| 506,584 |
|
|
| 10,377 |
|
|
| — |
|
|
| — |
|
|
| 516,961 |
|
Non-current portion of accrued reclamation |
|
| — |
|
|
| 107,880 |
|
|
| 1,928 |
|
|
| — |
|
|
| 109,808 |
|
Non-current deferred tax liability |
|
| — |
|
|
| 121,081 |
|
|
| — |
|
|
| — |
|
|
| 121,081 |
|
Other non-current liabilities |
|
| 4,548 |
|
|
| 6,721 |
|
|
| 8,995 |
|
|
| — |
|
|
| 20,264 |
|
Stockholders' equity |
|
| 1,992,157 |
|
|
| 1,676,553 |
|
|
| 591,148 |
|
|
| (2,267,701 | ) |
|
| 1,992,157 |
|
Total liabilities and stockholders' equity |
| $ | 2,535,601 |
|
| $ | 2,056,831 |
|
| $ | 605,094 |
|
| $ | (2,271,902 | ) |
| $ | 2,925,624 |
|
Unaudited Interim Condensed Consolidating Statements of Operations
Three Months Ended September 30, 2022 | ||||||||||||||||||||
Parent | Guarantors | Non- Guarantors | Eliminations | Consolidated | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Revenues | $ | 1,640 | $ | 144,634 | $ | 65 | $ | — | $ | 146,339 | ||||||||||
Cost of sales | 204 | (105,031 | ) | (73 | ) | — | (104,900 | ) | ||||||||||||
Depreciation, depletion, amortization | — | (32,992 | ) | — | — | (32,992 | ) | |||||||||||||
General and administrative | (3,792 | ) | (5,664 | ) | (1,547 | ) | — | (11,003 | ) | |||||||||||
Exploration and pre-development | (292 | ) | (13,143 | ) | (1,693 | ) | — | (15,128 | ) | |||||||||||
Equity in earnings of subsidiaries | 2,871 | — | — | (2,871 | ) | — | ||||||||||||||
Other (expense) income | (32,300 | ) | 12,289 | (4,398 | ) | 9,040 | (15,369 | ) | ||||||||||||
Income (loss) before income taxes | (31,669 | ) | 93 | (7,646 | ) | 6,169 | (33,053 | ) | ||||||||||||
(Provision) benefit from income taxes | 8,142 | 10,424 | — | (9,039 | ) | 9,527 | ||||||||||||||
Net income (loss) | (23,527 | ) | 10,517 | (7,646 | ) | (2,870 | ) | (23,526 | ) | |||||||||||
Preferred stock dividends | (138 | ) | — | — | — | (138 | ) | |||||||||||||
Income (loss) applicable to common stockholders | $ | (23,665 | ) | $ | 10,517 | $ | (7,646 | ) | $ | (2,870 | ) | $ | (23,664 | ) | ||||||
Net income (loss) | (23,527 | ) | 10,517 | (7,646 | ) | (2,870 | ) | (23,526 | ) | |||||||||||
Changes in comprehensive income (loss) | (12,692 | ) | — | — | — | (12,692 | ) | |||||||||||||
Comprehensive income (loss) | $ | (36,219 | ) | $ | 10,517 | $ | (7,646 | ) | $ | (2,870 | ) | $ | (36,218 | ) | ||||||
|
| Three Months Ended March 31, 2023 |
| |||||||||||||||||
|
| Parent |
|
| Guarantors |
|
| Non-Guarantors |
|
| Eliminations |
|
| Consolidated |
| |||||
|
| (in thousands) |
| |||||||||||||||||
Revenues |
| $ | 900 |
|
| $ | 198,600 |
|
| $ | — |
|
| $ | — |
|
| $ | 199,500 |
|
Cost of sales and other direct production costs |
|
| (878 | ) |
|
| (124,672 | ) |
|
| — |
|
|
| — |
|
|
| (125,550 | ) |
Depreciation, depletion, amortization |
|
| — |
|
|
| (39,002 | ) |
|
| — |
|
|
| — |
|
|
| (39,002 | ) |
General and administrative |
|
| (4,863 | ) |
|
| (6,829 | ) |
|
| (378 | ) |
|
| — |
|
|
| (12,070 | ) |
Exploration and pre-development |
|
| (91 | ) |
|
| (4,008 | ) |
|
| (868 | ) |
|
| — |
|
|
| (4,967 | ) |
Equity in earnings of subsidiaries |
|
| 2,015 |
|
|
| — |
|
|
| — |
|
|
| (2,015 | ) |
|
| — |
|
Other (expense) income |
|
| 4,953 |
|
|
| (20,038 | ) |
|
| 2,473 |
|
|
| (5,230 | ) |
|
| (17,842 | ) |
Income before income and mining taxes |
|
| 2,036 |
|
|
| 4,051 |
|
|
| 1,227 |
|
|
| (7,245 | ) |
|
| 69 |
|
Income and mining tax expense |
|
| (5,209 | ) |
|
| (3,263 | ) |
|
| — |
|
|
| 5,230 |
|
|
| (3,242 | ) |
Net income (loss) |
|
| (3,173 | ) |
|
| 788 |
|
|
| 1,227 |
|
|
| (2,015 | ) |
|
| (3,173 | ) |
Preferred stock dividends |
|
| (138 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (138 | ) |
Net income (loss) applicable to common stockholders |
| $ | (3,311 | ) |
| $ | 788 |
|
| $ | 1,227 |
|
| $ | (2,015 | ) |
| $ | (3,311 | ) |
Net income (loss) |
|
| (3,173 | ) |
|
| 788 |
|
|
| 1,227 |
|
|
| (2,015 | ) |
|
| (3,173 | ) |
Changes in comprehensive income (loss) |
|
| 6,516 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 6,516 |
|
Comprehensive income (loss) |
| $ | 3,343 |
|
| $ | 788 |
|
| $ | 1,227 |
|
| $ | (2,015 | ) |
| $ | 3,343 |
|
38
Nine Months Ended September 30, 2022 | ||||||||||||||||||||
Parent | Guarantors | Non- Guarantors | Eliminations | Consolidated | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Revenues | $ | 8,193 | $ | 515,822 | $ | 65 | $ | — | $ | 524,080 | ||||||||||
Cost of sales | 2,000 | (328,506 | ) | (73 | ) | — | (326,579 | ) | ||||||||||||
Depreciation, depletion, amortization | — | (106,362 | ) | — | — | (106,362 | ) | |||||||||||||
General and administrative | (12,682 | ) | (14,464 | ) | (1,843 | ) | — | (28,989 | ) | |||||||||||
Exploration and pre-development | (586 | ) | (32,489 | ) | (6,061 | ) | — | (39,136 | ) | |||||||||||
Equity in earnings of subsidiaries | (5,476 | ) | — | — | 5,476 | — | ||||||||||||||
Other expense | (25,483 | ) | (13,577 | ) | (11,653 | ) | (8,839 | ) | (59,552 | ) | ||||||||||
Income (loss) before income taxes | (34,034 | ) | 20,424 | (19,565 | ) | (3,363 | ) | (36,538 | ) | |||||||||||
(Provision) benefit from income taxes | 1,137 | (6,345 | ) | 11 | 8,839 | 3,642 | ||||||||||||||
Net income (loss) | (32,897 | ) | 14,079 | (19,554 | ) | 5,476 | (32,896 | ) | ||||||||||||
Preferred stock dividends | (414 | ) | — | — | — | (414 | ) | |||||||||||||
Income (loss) applicable to common stockholders | $ | (33,311 | ) | $ | 14,079 | $ | (19,554 | ) | $ | 5,476 | $ | (33,310 | ) | |||||||
Net income (loss) | (32,897 | ) | 14,079 | (19,554 | ) | 5,476 | (32,896 | ) | ||||||||||||
Changes in comprehensive income (loss) | 19,491 | — | — | — | 19,491 | |||||||||||||||
Comprehensive income (loss) | $ | (13,406 | ) | $ | 14,079 | $ | (19,554 | ) | $ | 5,476 | $ | (13,405 | ) | |||||||
Unaudited Interim Condensed Consolidating Statements of Cash Flows
Nine Months Ended September 30, 2022 | ||||||||||||||||||||
Parent | Guarantors | Non- Guarantors | Eliminations | Consolidated | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Cash flows from operating activities | $ | 287,919 | $ | 145,834 | $ | (153,190 | ) | $ | (226,793 | ) | $ | 53,770 | ||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Additions to properties, plants, and equipment | — | (90,138 | ) | (3,099 | ) | — | (93,237 | ) | ||||||||||||
Acquisition, net | 8,952 | | — | | | 8,952 | | |||||||||||||
Other investing activities, net | (573,131 | ) | (1,880 | ) | (16,525 | ) | 548,130 | (43,406 | ) | |||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Dividends paid to stockholders | (10,549 | ) | — | — | — | (10,549 | ) | |||||||||||||
Issuance of debt | 25,000 | — | — | 25,000 | ||||||||||||||||
Payments on debt | — | (5,222 | ) | — | — | (5,222 | ) | |||||||||||||
Other financing activity | 187,036 | (37,653 | ) | 172,302 | (321,337 | ) | 348 | |||||||||||||
Effect of exchange rate changes on cash | — | 548 | (256 | ) | — | (804 | ) | |||||||||||||
Changes in cash, cash equivalents and restricted cash | (74,773 | ) | 10,393 | (768 | ) | (65,148 | ) | |||||||||||||
Beginning cash, cash equivalents and restricted cash | 175,108 | 15,135 | 20,820 | — | 211,063 | |||||||||||||||
Ending cash, cash equivalents and restricted cash | $ | 100,335 | $ | 25,528 | $ | 20,052 | $ | — | $ | 145,915 | ||||||||||
|
| Three Months Ended March 31, 2023 |
| |||||||||||||||||
|
| Parent |
|
| Guarantors |
|
| Non-Guarantors |
|
| Eliminations |
|
| Consolidated |
| |||||
|
| (in thousands) |
| |||||||||||||||||
Cash flows from operating activities |
| $ | 5,497 |
|
| $ | 52,516 |
|
| $ | (28,184 | ) |
| $ | 10,774 |
|
| $ | 40,603 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Additions to properties, plants, and equipment |
|
| — |
|
|
| (54,443 | ) |
|
| — |
|
|
| — |
|
|
| (54,443 | ) |
Other investing activities, net |
|
| (40,113 | ) |
|
| — |
|
|
| — |
|
|
| 40,113 |
|
|
| — |
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Dividends paid to common and preferred stockholders |
|
| (3,891 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (3,891 | ) |
Issuance of debt |
|
| 13,000 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 13,000 |
|
Payments on debt |
|
| (13,000 | ) |
|
| (2,135 | ) |
|
| (329 | ) |
|
| — |
|
|
| (15,464 | ) |
Other financing activity |
|
| 22,983 |
|
|
| 15,557 |
|
|
| 23,750 |
|
|
| (50,887 | ) |
|
| 11,403 |
|
Effect of exchange rate changes on cash |
|
| — |
|
|
| 171 |
|
|
| — |
|
|
| — |
|
|
| 171 |
|
Changes in cash, cash equivalents and restricted cash |
|
| (15,524 | ) |
|
| 11,666 |
|
|
| (4,763 | ) |
|
| — |
|
|
| (8,621 | ) |
Beginning cash, cash equivalents and restricted cash |
|
| 69,890 |
|
|
| 21,202 |
|
|
| 14,815 |
|
|
| — |
|
|
| 105,907 |
|
Ending cash, cash equivalents and restricted cash |
| $ | 54,366 |
|
| $ | 32,868 |
|
| $ | 10,052 |
|
| $ | — |
|
| $ | 97,286 |
|
39
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The following discussion about our exposure to market risks and risk management activities includes forward-looking statements that involve risks and uncertainties, as well as summarizes the financial instruments held by us at September 30, 2022,March 31, 2023, which are sensitive to changes in commodity prices and foreign exchange rates and are not held for trading purposes. Actual results could differ materially from those projected in the forward-looking statements. In the normal course of business, we also face risks that are either(See20212022 Form,as updated inPart II. Item 1A – Risk Factorsin our Quarterly Report on Form10-Qfor the quarter ended June 30, 2022.
Metals Prices
Changes in the market prices of silver, gold, lead and zinc can significantly affect our profitability and cash flow. Metals prices can and often do fluctuate widely and are affected by numerous factors beyond our control (see20212022 Form
Provisional Sales
Sales of all metals products sold directly to customers, including20212022 FormSeptember 30, 2022, March 31, 2023, metals contained in concentrate sales and exposed to future price changes totaled 2.235 3,350million ounces of silver, 1,8407,660 ounces of gold, 8,500 7,050tons of zinc, and 6,8008,225 tons of lead. If the price for each metal were to change by 10%, the change in the total value of the concentrates sold would be approximately $8.2$12.8 million. As discussed in
Commodity-Price Risk Management
See20212022 Form
Foreign Currency Risk Management
We operate or have mining interests in Canada, and Mexico, which exposes us to risks associated with fluctuations in the exchange rates between the USD and the CAD and MXN, respectively.CAD. We have determined the functional currency for our Canadian and Mexican operations is the USD. As such, foreign exchange gains and losses associated with the and MXN to USD are recorded to earnings each period. For the three and nine months ended September 30,March 31, 2023 and 2022, we recognized a net foreign exchange gain of $5.7$0.4 million and $8.1loss of $2.0 million, respectively, compared to $4.0 million and $0.02 million, respectively for the comparable periods in 2021.respectively. Foreign currency exchange rates are influenced by a number of factors beyond our control. A 10% change in the exchange rate between the USD and CAD from the rate at September 30, 2022March 31, 2023 would have resulted in a change of approximately $7.2 million in our net foreign exchange gain or loss. A 10% change in the exchange rate between the USD and MXN from the rate at September 30, 2022 would have resulted in a change of approximately $0.027 $10.7million in our net foreign exchange gain or loss. We do not hedge the remeasurement of monetary assets and liabilities. We do hedge some of our operating and capital costs denominated in foreign currency.
See1120212022 Form
40
Item 4. Controls and Procedures
An evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures as required by Securities Exchange Act RulesSeptember 30, 2022,March 31, 2023, in assuring them in a timely manner that material information required to be disclosed in this report has been properly recorded, processed, summarized and reported. There were no changes in our internal control over financial reporting during the quarter ended September 30, 2022March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Internal control systems, no matter how well designed and operated, have inherent limitations. Therefore, even a system which is determined to be effective cannot provide absolute assurance that all control issues have been detected or prevented. Our systems of internal controls are designed to provide reasonable assurance with respect to financial statement preparation and presentation.
Part II - Other Information
Hecla Mining Company and Subsidiaries
Item 1. Legal Proceedings
For information concerning legal proceedings, refer to
Item 1A. Risk Factors
Item 1A. – Risk Factors
Item 4. Mine Safety Disclosures
The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation
41
Item 6. Exhibits
Hecla Mining Company and Wholly Owned Subsidiaries
Form 10-Q – March 31, 2023
Index to Exhibits
Exhibit Number | Description | |
4.1(a) | ||
4.1(b) | ||
4.1(c)* | ||
31.1* | ||
31.2* | ||
32.1* | ||
32.2* | ||
95* | ||
Mine safety information listed in Section 1503 of the Dodd-Frank Act. | ||
101.INS | ||
Inline XBRL Instance Document – | ||
101.SCH | ||
Inline XBRL Taxonomy Extension | ||
101.CAL | ||
Inline XBRL Taxonomy Extension | ||
101.DEF | ||
Inline XBRL Taxonomy Extension | ||
101.LAB | ||
Inline XBRL Taxonomy Extension | ||
101.PRE | ||
Inline XBRL Taxonomy Extension | ||
104 | ||
Cover Page Interactive Data File |
* Filed herewith
** XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
Items 3 and 5 of Part II are not applicable and are omitted from this report.
42
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
HECLA MINING COMPANY | ||||||
(Registrant) | ||||||
Date: | May 10, 2023 | By: | /s/ Phillips S. Baker, Jr. |
Phillips S. Baker, Jr., President, | ||||||
Chief Executive Officer and Director | ||||||
Date: | May 10, 2023 | By: | /s/ Russell D. Lawlar |
Russell D. Lawlar, Senior Vice President, | ||||||
Chief Financial Officer |
43