Table of Contents
~~Condensed Consolidating Balance Sheets~~

As of September 30, 2017

Parent

Guarantors

Non-Guarantors

Eliminations

Consolidated

(in thousands)

Assets

Cash and cash equivalents
$ 101,061 $ 18,124 $ 53,738 $ — $ 172,923
Other current assets
47,514 51,190 40,283 (575
)
138,412
Properties, plants, and equipment - net
1,964 1,248,762 774,881 — 2,025,607
Intercompany receivable (payable)
461,542 (222,677
)
(351,019
)
112,154 —
Investments in subsidiaries
1,491,449 — — (1,491,449
)
—
Other non-current assets
6,321 199,794 6,906 (153,780
)
59,241
Total assets
$ 2,109,851 $ 1,295,193 $ 524,789 $ (1,533,650
)
$ 2,396,183
Liabilities and Stockholders' Equity

Current liabilities
$ 46,720 $ 56,189 $ 38,183 $ (25,295
)
$ 115,797
Long-term debt
501,917 3,115 4,321 — 509,353
Non-current portion of accrued reclamation
— 61,964 18,794 — 80,758
Non-current deferred tax liability
— 13,349 126,280 (16,906
)
122,723
Other non-current liabilities
48,273 5,363 975 — 54,611
Shareholders' equity
1,512,941 1,155,213 336,236 (1,491,449
)
1,512,941
Total liabilities and stockholders' equity
$ 2,109,851 $ 1,295,193 $ 524,789 $ (1,533,650
)
$ 2,396,183
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~~Table of Contents~~

As of December 31, 2016

Parent

Guarantors

Non-Guarantors

Eliminations

Consolidated

(in thousands)

Assets

Cash and cash equivalents
$ 113,275 $ 24,388 $ 32,114 $ — $ 169,777
Other current assets
33,950 52,400 35,537 (573
)
121,314
Properties, plants, and equipment - net
2,103 1,258,890 771,692 — 2,032,685
Intercompany receivable (payable)
404,121 (222,072
)
(307,018
)
124,969 —
Investments in subsidiaries
1,496,787 — — (1,496,787
)
—
Other non-current assets
4,186 199,957 5,337 (161,579
)
47,901
Total assets
$ 2,054,422 $ 1,313,563 $ 537,662 $ (1,533,970
)
$ 2,371,677
Liabilities and Stockholders' Equity

Current liabilities
$ 22,401 $ 86,730 $ 40,093 $ (22,999
)
$ 126,225
Long-term debt
500,979 3,065 2,773 — 506,817
Non-current portion of accrued reclamation
— 63,025 16,902 — 79,927
Non-current deferred tax liability
— 14,212 122,855 (14,212
)
122,855
Other non-current liabilities
51,198 5,108 (325
)
28 56,009
Stockholders' equity
1,479,844 1,141,423 355,364 (1,496,787
)
1,479,844
Total liabilities and stockholders' equity
$ 2,054,422 $ 1,313,563 $ 537,662 $ (1,533,970
)
$ 2,371,677
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~~Table of Contents~~

~~Condensed Consolidating~~Forward-Looking Statements ~~of Operations~~

Three Months Ended September 30, 2017

Parent

Guarantors

Non-Guarantors

Eliminations

Consolidated

(in thousands)

Revenues
$ (626
)
$ 61,887 $ 79,578 $ — $ 140,839
Cost of sales
687 (29,320
)
(39,725
)
— (68,358
)
Depreciation, depletion, amortization
— (12,607
)
(16,237
)
— (28,844
)
General and administrative
(4,217
)
(4,464
)
(848
)
— (9,529
)
Exploration and pre-development
(129
)
(4,339
)
(4,544
)
— (9,012
)
Research and development
— (1,130
)
— — (1,130
)
Loss on derivative contracts
(11,226
)
— — — (11,226
)
Foreign exchange gain (loss)
12,153 — (16,917
)
— (4,764
)
Lucky Friday suspension-related costs
— (4,780
)
— — (4,780
)
Equity in earnings of subsidiaries
(6,271
)
— — 6,271 —
Other (expense) income
11,041 1,202 (4,676
)
(14,752
)
(7,185
)
Income (loss) before income taxes
1,412 6,449 (3,369
)
(8,481
)
(3,989
)
(Provision) benefit from income taxes
— (1,338
)
(8,013
)
14,752 5,401
Net income (loss)
1,412 5,111 (11,382
)
6,271 1,412
Preferred stock dividends
(138
)
— — — (138
)
Income (loss) applicable to common shareholders
1,274 5,111 (11,382
)
6,271 1,274
Net income (loss)
1,412 5,111 (11,382
)
6,271 1,412
Changes in comprehensive income (loss)
7,636 — 1,022 (1,022
)
7,636
Comprehensive income (loss)
$ 9,048 $ 5,111 $ (10,360
)
$ 5,249 $ 9,048
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~~Table of Contents~~

Nine Months Ended September 30, 2017

Parent

Guarantors

Non-Guarantors

Eliminations

Consolidated

(in thousands)

Revenues
$ (3,912
)
$ 215,184 $ 206,390 $ — $ 417,662
Cost of sales
353 (112,908
)
(111,982
)
— (224,537
)
Depreciation, depletion, amortization
— (41,875
)
(41,490
)
— (83,365
)
General and administrative
(16,407
)
(10,877
)
(1,760
)
— (29,044
)
Exploration and pre-development
(439
)
(8,736
)
(12,508
)
— (21,683
)
Research and development
— (2,125
)
— — (2,125
)
Loss on derivative contracts
(16,548
)
— — — (16,548
)
Foreign exchange gain (loss)
22,286 (43
)
(33,152
)
— (10,909
)
Lucky Friday suspension-related costs
— (14,385
)
— — (14,385
)
Equity in earnings of subsidiaries
(5,925
)
— — 5,925 —
Other (expense) income
24,822 (1,207
)
(14,146
)
(38,682
)
(29,213
)
Income (loss) before income taxes
4,230 23,028 (8,648
)
(32,757
)
(14,147
)
(Provision) benefit from income taxes
— (9,239
)
(11,066
)
38,682 18,377
Net income (loss)
4,230 13,789 (19,714
)
5,925 4,230
Preferred stock dividends
(414
)
— — — (414
)
Income (loss) applicable to common shareholders
3,816 13,789 (19,714
)
5,925 3,816
Net income (loss)
4,230 13,789 (19,714
)
5,925 4,230
Changes in comprehensive income (loss)
13,718 — 1,780 (1,780
)
13,718
Comprehensive income (loss)
$ 17,948 $ 13,789 $ (17,934
)
$ 4,145 $ 17,948
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~~Table of Contents~~

Three Months Ended September 30, 2016

Parent

Guarantors

Non-Guarantors

Eliminations

Consolidated

(in thousands)

Revenues
$ (4,072
)
$ 116,016 $ 67,449 $ — $ 179,393
Cost of sales
— (58,844
)
(31,685
)
— (90,529
)
Depreciation, depletion, amortization
— (19,036
)
(11,143
)
— (30,179
)
General and administrative
(5,355
)
(5,469
)
(331
)
— (11,155
)
Exploration and pre-development
(33
)
(1,343
)
(3,033
)
— (4,409
)
Gain on derivative contracts
7 — — — 7
Acquisition costs
(1,766
)
1 — — (1,765
)
Equity in earnings of subsidiaries
52,606 — — (52,606
)
—
Other expense
(15,597
)
1,187 1,211 7,078 (6,121
)
Income (loss) before income taxes
25,790 32,512 22,468 (45,528
)
35,242
(Provision) benefit from income taxes
— (8,994
)
6,621 (7,080
)
(9,453
)
Net income (loss)
25,790 23,518 29,089 (52,608
)
25,789
Preferred stock dividends
(138
)
— — — (138
)
Income (loss) applicable to common shareholders
25,652 23,518 29,089 (52,608
)
25,651
Net income (loss)
25,790 23,518 29,089 (52,608
)
25,789
Changes in comprehensive income (loss)
(615
)
— 985 (985
)
(615
)
Comprehensive income (loss)
$ 25,175 $ 23,518 $ 30,074 $ (53,593
)
$ 25,174
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~~Table of Contents~~

Nine Months Ended September 30, 2016

Parent

Guarantors

Non-Guarantors

Eliminations

Consolidated

(in thousands)

Revenues
$ (15,866
)
$ 285,277 $ 212,301 $ — $ 481,712
Cost of sales
— (154,160
)
(95,002
)
— (249,162
)
Depreciation, depletion, amortization
— (49,521
)
(35,071
)
— (84,592
)
General and administrative
(17,069
)
(13,671
)
(988
)
— (31,728
)
Exploration and pre-development
(191
)
(3,990
)
(7,465
)
— (11,646
)
Acquisition costs
(2,160
)
(7
)
— — (2,167
)
Equity in earnings of subsidiaries
68,727 — — (68,727
)
—
Other (expense) income
15,844 8,147 (43,039
)
(11,481
)
(30,529
)
Income (loss) before income taxes
49,285 72,075 30,736 (80,208
)
71,888
(Provision) benefit from income taxes
— (22,213
)
(11,871
)
11,481 (22,603
)
Net income (loss)
49,285 49,862 18,865 (68,727
)
49,285
Preferred stock dividends
(414
)
— — — (414
)
Income (loss) applicable to common shareholders
48,871 49,862 18,865 (68,727
)
48,871
Net income (loss)
49,285 49,862 18,865 (68,727
)
49,285
Changes in comprehensive income (loss)
1,689 8 3,238 (3,246
)
1,689
Comprehensive income (loss)
$ 50,974 $ 49,870 $ 22,103 $ (71,973
)
$ 50,974
~~Condensed Consolidating Statements of Cash Flows~~

Nine Months Ended September 30, 2017

Parent

Guarantors

Non-Guarantors

Eliminations

Consolidated

Cash flows from operating activities
$ 35,764 $ 41,071 $ 21,435 $ (24,155
)
$ 74,115
Cash flows from investing activities:

Additions to properties, plants, and equipment
— (28,220
)
(42,170
)
— (70,390
)
Other investing activities, net
176 6,903 (584
)
(5,339
)
1,156
Cash flows from financing activities:

Dividends paid to shareholders
(3,392
)
— — — (3,392
)
Proceeds from (payments on) debt
— (4,518
)
(1,017
)
— (5,535
)
Other financing activity, net
(44,762
)
(21,500
)
42,909 29,494 6,141
Effect of exchange rates on cash
— — 1,051 — 1,051
Changes in cash and cash equivalents
(12,214
)
(6,264
)
21,624 — 3,146
Beginning cash and cash equivalents
113,275 24,388 32,114 — 169,777
Ending cash and cash equivalents
$ 101,061 $ 18,124 $ 53,738 $ — $ 172,923
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Nine Months Ended September 30, 2016

Parent

Guarantors

Non-Guarantors

Eliminations

Consolidated

(in thousands)

Cash flows from operating activities
$ 14,525 $ 51,599 $ 61,710 $ 45,280 $ 173,114
Cash flows from investing activities:

Additions to properties, plants, and equipment
(348
)
(71,265
)
(48,623
)
— (120,236
)
Acquisitions of other companies, net of cash acquired
(3,931
)
— — (3,931
)
Other investing activities, net
(24,696
)
(816
)
(3,647
)
— (29,159
)
Cash flows from financing activities:

Dividends paid to shareholders
(3,296
)
— — — (3,296
)
Proceeds from (payments on) debt
— (7,477
)
(658
)
— (8,135
)
Other financing activity, net
33,335 24,522 (8,926
)
(45,280
)
3,651
Effect of exchange rates on cash
— — 627 — 627
Changes in cash and cash equivalents
15,589 (3,437
)
483 — 12,635
Beginning cash and cash equivalents
94,167 42,692 18,350 — 155,209
Ending cash and cash equivalents
$ 109,756 $ 39,255 $ 18,833 $ — $ 167,844

~~Item 2.~~    ~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~
Certain statements contained in this Form 10-Q, including in ~~Management~~’sManagement’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosure About Market Risk, are intended to be covered by the safe harbor provided for under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  Our forward-looking statements include our current expectations and projections about future results, performance, results of litigation, prospects and opportunities, including reserves and other mineralization. We have tried to identify these forward-looking statements by using words such as “may,” “will,” “expect,” “anticipate,” “believe,” “intend,” “feel,” “plan,” “estimate,” “project,” “forecast” and similar expressions.  These forward-looking statements are based on information currently available to us and are expressed in good faith and believed to have a reasonable basis.  However, our forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements.
These risks, uncertainties and other factors include, but are not limited to, those set forth under Part I, Item ~~1A.~~ 1A – ~~Business –~~ Risk Factors in our annual report filed on Form 10-K for the year ended December 31, ~~2016.~~2020. 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.
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Item 2.    Management'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 annual report on Form 10-K for the year ended December 31, 2020 ("2020 Form 10-K"), filed with the United States Securities and Exchange Commission (the “SEC”). The results of operations reported and summarized below are not necessarily indicative of future operating results (refer to “Forward-Looking Statements” above for further discussion). References to “Notes” are Notes included in our Notes to Condensed Consolidated Financial Statements (Unaudited). Throughout MD&A, all references to losses or income per share are on a diluted basis.

Overview

~~Hecla Mining Company~~Established in 1891 in northern Idaho’s Silver Valley, we believe we are the oldest operating precious metals mining company in the United States and ~~our subsidiaries have provided precious~~the largest silver producer in the United States. Our corporate offices are in Coeur d’Alene, Idaho and ~~base metals to the U.S. and worldwide since 1891. We discover, acquire, develop, produce and market silver, gold, lead and zinc.~~Vancouver, British Columbia. Our production profile includes:

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~~Table of Contents~~
•
concentrates containing silver, gold, lead and zinc, which is shipped to various smelters or sold to metal traders;
•
unrefined doré containing gold and silver, which is sold to refiners or further refined before sale of the metals to traders; and
•
carbon material containing gold and silver, which is sold to third-party processors.

~~We produce lead, zinc~~Our operating properties comprise our five business segments for financial reporting purposes: the Greens Creek operating unit on Admiralty Island in Alaska, the Lucky Friday operating unit in Idaho, the Casa Berardi operating unit in Quebec, Canada, the San Sebastian operating unit in Durango, Mexico, and bulk concentrates, which we sell to custom smelters and brokers, and unrefined precipitate and bullion bars (doré) containing gold and silver, which are further refined before sale to precious metals traders.  ~~We are organized into four segments that encompass~~the Nevada Operations unit in northern Nevada. Since our operating mines are located in the United States, Canada, and ~~development units:  Greens Creek, Lucky Friday, Casa Berardi,~~Mexico, we believe they have low or relatively moderate political risk, and ~~San Sebastian.~~less economic risk than mines located in other parts of the world. Our exploration interests are also in the United States, Canada, and Mexico, and are located in historical mining districts. The map below shows the locations of our operating units, our exploration and pre-development projects, ~~and~~as well as our corporate offices located in Coeur d'Alene, Idaho and Vancouver, British Columbia.

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Table of Contents

Our current business strategy is to focus our financial and human resources in the following areas:

~~operating our properties safely, in an environmentally responsible manner, and cost-effectively;~~
~~continuing to optimize and improve operations at each of our units;~~
~~expanding our proven and probable reserves and production capacity at our operating properties;~~
~~conducting our business with financial stewardship to preserve our financial position in varying metals price environments;~~
advancing permitting of the Rock Creek and Montanore projects. We acquired Rock Creek as part of the acquisition of Revett Mining Company, Inc. ("Revett") in June 2015, and we acquired Montanore through the acquisition of Mines Management, Inc. ("Mines Management") in September 2016;
maintaining and investing in exploration and pre-development projects in the vicinities of six mining districts and projects we believe to be under-explored and under-invested: North Idaho's Silver Valley in the historic Coeur d'Alene Mining District; our Greens Creek unit on Alaska's Admiralty Island located near Juneau; the silver-producing district near Durango, Mexico; the Abitibi region of northwestern Quebec, Canada; the Rock Creek and Montanore projects in northwestern Montana; and the Creede district of Southwestern Colorado; and
~~continuing to seek opportunities to acquire or invest in mining properties and companies.~~
•
rapidly responding to the threats from the COVID-19 pandemic to protect our workforce, operations and communities while maintaining liquidity;
•
operating our properties safely, in an environmentally responsible manner, and cost-effectively;
•
optimizing and improving operations at our units, which includes incurring costs for new technologies and equipment that may not result in measurable benefits;
•
expanding our proven and probable reserves and production capacity at our units;
•
conducting our business with financial stewardship to preserve our financial position in varying metals price and operational environments;
•
advancing permitting of the Rock Creek and Montanore projects;
•
maintaining and investing in exploration and pre-development projects in the vicinities of seven mining districts and projects we believe to be under-explored and under-invested: North Idaho's Silver Valley in the historic Coeur d'Alene Mining District; our Greens Creek unit on Alaska's Admiralty Island located near Juneau; the silver-producing district near Durango, Mexico; the Abitibi region of northwestern Quebec, Canada; our projects in northern Nevada; the Rock Creek and Montanore projects in northwestern Montana; and the Creede district of southwestern Colorado; and
•
continuing to seek opportunities to acquire or invest in mining properties and companies.

31
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Table of Contents
The COVID-19 outbreak impacted our operations in 2020, including adversely impacting our expected production of gold at Casa Berardi, and has continued to impact our operations in 2021. We incurred additional costs of approximately $0.6 million in the first quarter of 2021 and $2.3 million for the full year of 2020 related to quarantining employees at Greens Creek, which started in late March 2020. See each segment section below for information on how those operations have been impacted by COVID-19. To mitigate the impact of COVID-19, we have taken precautionary measures, including implementing operational plans and practices and increasing our cash reserves through a temporary draw-down of our revolving credit facility, which has since been fully repaid. As long as they are required, the operational practices implemented could continue to have an adverse impact on our operating results due to additional costs or deferred production and revenues. There is uncertainty related to the potential additional impacts COVID-19 could have on our operations and financial results for the remainder of 2021. In our 2020 Form 10-K, see Item IA. Risk Factors - Natural disasters, public health crises (including COVID-19), political crises, and other catastrophic events or other events outside of our control may materially and adversely affect our business or financial results and COVID-19 virus pandemic may heighten other risks for information on how restrictions related to COVID-19 have recently affected some of our operations.

A number of key factors may impact the execution of our strategy, including regulatory issues and metals prices. Metals prices can be very ~~volatile. As discussed in the~~ ~~Critical Accounting Estimates~~ ~~section below, metals prices~~volatile and are influenced by a number of factors beyond our ~~control. Average market~~control (except on a limited basis through the use of derivative contracts). See Item 7.Critical Accounting Estimates in our 2020 Form 10-K. The average realized prices of silver, ~~and~~ gold ~~were slightly lower, with prices for~~ lead and zinc were higher in the first ~~nine~~three months of ~~2017 compared to~~2021 than in the ~~same~~comparable period last year, as illustrated by the table in Results of Operations below. While we believe ~~current~~longer-term global economic and industrial trends could result in continued demand for the metals we produce, prices have been volatile and there can be no assurance that current prices will continue.

~~The total principal amount of our Senior Notes due May 1, 2021 is $506.5 million~~Volatility in global financial markets and ~~they bear interest at~~other factors can pose a ~~rate of 6.875% per year. The net proceeds from the Senior Notes were primarily used for the acquisition of Aurizon in June 2013 (see~~ ~~Note 9~~ of ~~Notes~~significant challenge to ~~Condensed Consolidated Financial Statements (Unaudited)~~). ~~As discussed in the~~ ~~Financial Liquidity and Capital Resources~~ ~~section below, we believe that we will be able to meet the obligations associated with the Senior Notes; however, a number of factors could impact~~ our ability to ~~meet~~access credit and equity markets, should we need to do so, and to predict sales prices for our products. To help mitigate this challenge, we utilize forward contracts to manage exposure to declines in the ~~debt obligations~~prices of (i) silver, gold, zinc and ~~fund~~lead contained in our ~~other projects. In June 2017, we announced a private offering under Rule 144A of $500 million in Senior Notes due 2025~~concentrates that have been shipped but have not yet settled, and ~~a concurrent tender offer to purchase our existing Senior Notes. Both the private offering of the notes~~(ii) zinc and the tender offer were abandoned in June 2017, as available terms and conditions were not sufficiently attractive to us to complete the proposed transactions. Our ability to restructure or refinance our debt will depend on the condition of capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. There can be no assurancelead that we ~~will be able~~forecast for future concentrate shipments. We have also utilized put option contracts to ~~restructure or refinance our debt~~manage exposure to declines in the ~~future on terms and conditions favorable to us.~~
On June 15, 2015, we completed the acquisition of Revett, giving us 100% ownership of the Rock Creek project, a significant undeveloped silver and copper deposit in northwestern Montana. In addition, on September 13, 2016, we completed the acquisition of Mines Management, giving us 100% ownership of the Montanore project, another significant undeveloped silver and copper deposit located approximately 10 miles from our Rock Creek project. Development of Rock Creek and Montanore has been challenged by conservation groups at various times, and there can be no assurance that we will be able to obtain the permits required to develop these projects. ~~See~~ ~~Legal challenges could prevent the Rock Creek or Montanore projects from ever being developed~~ in ~~Part I, Item 1A. – Risk Factors~~ in our annual report filed on Form 10-K for the year ended December 31, 2016 for more information. In May 2017, the Montana Federal District Court issued Opinions and Orders in three lawsuits challenging previously granted environmental approvals for the Montanore project. The Orders overturned the approvals for the project granted by the United States Forest Service and the United States Fish and Wildlife Service, and remanded the Record of Decision ("ROD") and associated planning documents for further review by the agencies consistent with its Opinions. In June 2017, the Court vacated the agencies' approvals for the project. As a result, additional work must be performed by the agencies to address the deficiencies in the ROD and associated planning documents identified by the Court, and new approvals must be granted, before the project may proceed beyond certain preliminary actions.
~~As further discussed in the~~ ~~Lucky Friday Segment~~ section below, the union employees at Lucky Friday have been on strike since March 13, 2017. Production at Lucky Friday was suspended from the start of the strike until July 2017, with limited production by salary employees commencing at that time. We cannot predict how long the strike will last or whether an agreement will be reached. We expect to incur cash expenditures of approximately $1.0 million to $1.5 million per month to advance engineering and infrastructure for the restart of full production, in addition to costs related to limited interim production. As a result of the strike or other related events, operations at Lucky Friday could continue to be disrupted, which could adversely affect our financial condition and results of operations.
~~During the third quarter of 2015, we made a development decision to mine near surface, high grade portions~~prices of silver and gold ~~deposits at~~in our ~~San Sebastian project in Mexico. Ore production commenced in the fourth quarter~~forecasted future sales of ~~2015 and has continued since that time.~~those metals. In addition, ~~work began~~we have in ~~the first quarter~~place a $250 million revolving credit agreement, of ~~2017 to develop and rehabilitate underground access~~ which ~~is expected to allow us to mine deeper portions~~$20.3 million was used as of ~~the deposits at San Sebastian. See the~~ ~~San Sebastian Segment~~ ~~section below~~March 31, 2021 for ~~more information. We have generated positive cash flows at San Sebastian since the start~~letters of production there, and we currently believe that will continue until early or mid-2020. However, our ability to generate positive cash flows at San Sebastian may be impacted by changes in costs, precious metals prices, or other factors, and there can be no assurance that we will be able to develop and operate San Sebastian as currently anticipated.credit, leaving approximately $229.7 million available for borrowing.
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~~Table of Contents~~

We strive to ~~operate our properties safely, in an environmentally responsible manner~~achieve excellent mine safety and ~~as cost-effectively as possible.~~health performance. We seek to ~~achieve safe and environmentally sound practices through extensive employee~~implement this goal by: training employees in safe work practices; establishing, following and improving safety ~~standards with the active participation of employees;~~standards; investigating accidents, incidents and losses to avoid recurrence; involving employees in the establishment of safety standards; and ~~participation~~participating in the National Mining Association’s CORESafety program. We attempt to implement reasonable best practices ~~for~~with respect to mine safety and emergency preparedness. ~~Additionally, we~~We work with ~~the U.S. Mine Safety and Health Administration (“MSHA”)~~MSHA to address issues outlined in its investigations and inspections and ~~investigations, and continually~~continue to evaluate our safety practices. Achieving and maintaining compliance with MSHA regulations will be challenging and may increase our operating costs. See Item 1A. Risk Factors - We face substantial governmental regulation, including the Mine Safety and Health Act, various environmental laws and regulations and the 1872 Mining Law in our 2020 Form 10-K.

Another challenge for us is the risk associated with environmental litigation and ongoing reclamation activities. As described in ~~Part I,~~ Item 1A. – Risk Factors ofin our ~~annual report filed on~~2020 Form 10-K ~~for the year ended December 31, 2016~~ and in Note 410 of Notes to Condensed Consolidated Financial Statements (Unaudited), it is possible that our estimate of these liabilities (and our ability to estimate liabilities in general) may change in the future, affecting our strategic plans. We are involved in various environmental legal matters and the estimate of our environmental liabilities and liquidity needs, as ~~wells~~well as our strategic plans, may be significantly impacted as a result of these matters or new matters that may arise. We strive to ensure that our activities are conducted in compliance with applicable laws and regulations and attempt to resolve environmental litigation on terms as favorable ~~terms~~to us as possible.

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Table of Contents

Consolidated Results of Operations

Sales of products by metal for the ~~three- and nine-month~~three-month periods ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020 were as follows:

Three Months Ended
September 30,

Nine Months Ended
September 30,

(in thousands)

2017

2016

2017

2016

Silver
$ 43,228 $ 83,668 $ 140,662 $ 211,825
Gold
73,603 67,534 203,279 203,455
Lead
6,373 17,141 28,093 46,194
Zinc
24,327 27,469 74,692 67,840
Less: Smelter and refining charges
(6,692
)
(16,419
)
(29,064
)
(47,602
)
Sales of products
$ 140,839 $ 179,393 $ 417,662 $ 481,712

Three Months Ended
March 31,

(in thousands)

2021

2020

Silver
$ 77,760 $ 37,572
Gold
101,408 90,694
Lead
15,893 6,420
Zinc
29,191 17,308
Less: Smelter and refining charges
(13,400 ) (15,069 )
Sales of products
$ 210,852 $ 136,925

The ~~$38.6 million and $64.1 million decreases~~fluctuations in sales for the first quarter of ~~products in the third quarter and first nine months of 2017, respectively,~~2021 compared to the ~~same periods~~first quarter of ~~2016 are~~2020 were primarily due ~~to:~~to the following two reasons:

•
~~Lower quantities of~~Higher average realized prices for silver, ~~zinc~~gold, lead and ~~lead sold, due to lower production of those metals and the timing of concentrate shipments at Greens Creek, partially offset by higher gold volumes. See the~~ ~~The Greens Creek Segment,~~~~The Lucky Friday Segment, The Casa Berardi Segment, and The San Sebastian Segment~~ ~~sections below for more information on metal production and sales volumes at each of our operating segments. Total metals production and sales volumes for each period~~zinc. These price variances are ~~shown~~illustrated in the ~~following table:~~table below.

Three Months Ended
September 30,

Nine Months Ended
September 30,

2017

2016

2017

2016

Silver -
Ounces produced
3,323,157 4,316,663 9,500,058 13,200,765

Payable ounces sold
2,540,817 4,284,842 8,098,652 12,222,084
Gold -
Ounces produced
63,046 52,126 171,720 170,779

Payable ounces sold
57,380 50,348 161,921 161,217
Lead -
Tons produced
5,370 10,411 18,426 31,840

Payable tons sold
2,936 9,967 13,612 28,380
Zinc -
Tons produced
14,497 14,825 43,000 50,321

Payable tons sold
8,444 13,596 29,269 37,948
33
~~Table of Contents~~
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. The difference in payable quantities sold for the 2017 periods compared to 2016 is due mainly to timing of concentrate shipments, primarily at Greens Creek.
Lower average silver and gold prices, partially offset by higher lead and zinc prices, in the third quarter of 2017 compared to the same period in 2016. For the first nine months of 2017, average silver and gold prices varied slightly, while average lead and zinc prices were higher, compared to the same period of 2016. These price variances are illustrated in the table below.

Three Months Ended
September 30,

Nine Months Ended
September 30,

2017

2016

2017

2016

Silver –
London PM Fix ($/ounce)
$ 16.83 $ 19.62 $ 17.17 $ 17.08

Realized price per ounce
$ 17.01 $ 19.53 $ 17.37 $ 17.33
Gold –
London PM Fix ($/ounce)
$ 1,278 $ 1,335 $ 1,251 $ 1,258

Realized price per ounce
$ 1,283 $ 1,341 $ 1,255 $ 1,262
Lead –
LME Final Cash Buyer ($/pound)
$ 1.06 $ 0.85 $ 1.02 $ 0.81

Realized price per pound
$ 1.09 $ 0.86 $ 1.03 $ 0.81
Zinc –
LME Final Cash Buyer ($/pound)
$ 1.34 $ 1.02 $ 1.26 $ 0.89

Realized price per pound
$ 1.44 $ 1.01 $ 1.28 $ 0.89

Three months ended March 31,

2021

2020

Silver – London PM Fix ($/ounce)
$ 26.29 $ 16.94
Realized price per ounce $ 25.66 $ 14.48
Gold – London PM Fix ($/ounce)
$ 1,798 $ 1,583
Realized price per ounce $ 1,770 $ 1,588
Lead – LME Final Cash Buyer ($/pound)
$ 0.92 $ 0.84
Realized price per pound $ 0.92 $ 0.78
Zinc –    LME Final Cash Buyer ($/pound)
$ 1.25 $ 0.96
Realized price per pound $ 1.32 $ 0.88

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 ~~third~~first quarter ~~and first nine months~~ of ~~2017,~~2021, we recorded net positive price adjustments to provisional settlements of ~~$1.2 million and~~ $0.6 million ~~respectively,~~ compared to ~~negative~~net positive price adjustments to provisional settlements of ~~$1.1~~$2.6 million ~~and positive price adjustments of $0.4 million, respectively,~~ in the ~~third~~first quarter ~~and first nine months~~ of ~~2016.~~2020. The price adjustments related to silver, gold, lead and zinc contained in our concentrate shipments were largely offset by gains and losses on forward contracts for those metals for ~~each period (see~~the first quarter of 2021. See Note 118 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more ~~information).~~information.  The gains and losses on these contracts are included in revenues and impact the realized prices for silver, gold, lead and zinc.  Realized prices are calculated by dividing gross revenues for each metal (which include the price adjustments and gains and losses on the forward contracts discussed above) by the payable quantities of each metal included in concentrate and doré shipped during the period.

34
25
Table of Contents
For the third quarter and first nine months of 2017, we recorded income applicable to common shareholders of $1.3 million ($0.00 per basic common share) and $3.8 million ($0.01 per basic common share), respectively, compared to $25.7 million ($0.07 per basic common share) and $48.9 million ($0.13 per basic common share), respectively, for the third quarter and first nine months of 2016. The following factors impacted the results for the third quarter and first nine months of 2017 compared to the same periods in 2016:

•
~~Lower gross profit for~~Higher quantities of silver, gold, zinc and lead sold as a result of the ~~third quarter~~timing of shipments and ~~first nine months~~higher production of ~~2017 compared to the same periods in 2016 at our San Sebastian unit by $0.9 million~~silver, lead and $13.8 million, respectively; Lucky Friday unit by $6.5 million and $8.0 million, respectively; and Greens Creek unit by $8.3 million and $1.3 million, respectively. Gross profit for the first nine months of 2017 was also lower at our Casa Berardi unit compared to 2016 by $15.2 million; however, it was higher by $0.6 million for the third quarter of 2017 compared to the same period of 2016.zinc. See The Greens Creek Segment, The Lucky Friday Segment, The Casa Berardi Segment, ~~and~~ The San Sebastian Segment and The Nevada Operations Segment sections ~~below.~~below for more information on metals production and sales volumes at each of our operating segments. Total metals production and sales volumes for each period are shown in the following table:

Three Months Ended
March 31,

2021

2020

Silver - Ounces produced
3,459,446 3,245,469
Payable ounces sold 3,030,026 2,582,279
Gold -    Ounces produced
52,004 58,792
Payable ounces sold 57,286 57,103
Lead -    Tons produced
10,704 5,893
Payable tons sold 8,668 4,130
Zinc -    Tons produced
16,107 12,847
Payable tons sold 11,027 9,836
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 our products 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, Cash Cost, After By-product Credits, per Ounce ("Cash Cost") (non-GAAP) and All-In Sustaining Cost, After By-product Credits, per Ounce ("AISC") (non-GAAP) at our operating units for the three-months ended March 31, 2021 and 2020 were as follows (in thousands, except for Cash Cost and AISC):

Silver

Gold

Greens Creek

Lucky Friday

San Sebastian

Total Silver

Casa Berardi

Nevada Operations

Total Gold

Three Months Ended March 31, 2021:

Sales
$ 98,409 $ 29,122 $ 173 $ 127,704 $ 72,911 $ 10,237 $ 83,148
Total cost of sales
(53,181 ) (22,794 ) (94 ) (76,069 ) (62,516 ) (7,455 ) (69,971 )
Gross profit
$ 45,228 $ 6,328 $ 79 $ 51,635 $ 10,395 $ 2,782 $ 13,177
Cash Cost per silver or gold ounce
$ (0.67 ) $ 7.62 $ — $ 1.40 $ 1,027 $ 1,416 $ 1,052
AISC per silver or gold ounce
$ 1.59 $ 14.24 $ — $ 7.21 $ 1,272 $ 1,461 $ 1,284
Three Months Ended March 31, 2020:

Sales
$ 53,833 $ 2,830 $ 9,927 $ 66,590 $ 46,172 $ 24,163 $ 70,335
Total cost of sales
(49,182 ) (2,832 ) (8,300 ) (60,314 ) (48,325 ) (16,914 ) (65,239 )
Gross profit
$ 4,651 $ (2 ) $ 1,627 $ 6,276 $ (2,153 ) $ 7,249 $ 5,096
Cash Cost per silver or gold ounce
$ 5.63 $ — $ 6.91 $ 5.77 $ 1,268 $ 735 $ 1,061
AISC per silver or gold ounce
$ 7.90 $ — $ 9.59 $ 11.06 $ 1,615 $ 808 $ 1,302
(1)
A reconciliation of these non-GAAP measures to cost of sales and other direct production costs and depreciation, depletion and amortization, the most comparable GAAP measure, can be found below in Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP).
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Table of Contents
While revenue from zinc, lead and gold by-products is significant, we believe that identification of silver as the primary product of Greens Creek, Lucky Friday and San Sebastian is appropriate because:

•
~~Losses~~silver has historically accounted for a higher proportion of revenue than any other metal and is expected to do so in the future;
•
we have historically presented these units as a producer primarily of silver, based on ~~base~~the original analysis that justified putting the project into production, and believe that consistency in disclosure is important to our investors regardless of the relationships of metals prices and production from year to year;
•
metallurgical treatment maximizes silver recovery;
•
the Greens Creek deposit is a massive sulfide deposit containing an unusually high proportion of silver; and in most of its working areas, Greens Creek utilizes selective mining methods in which silver is the metal targeted for highest recovery.
Likewise, we believe the identification of gold, lead and zinc as by-product credits at Greens Creek, Lucky Friday and San Sebastian is appropriate because of their lower economic value compared to silver and due to the fact that silver is the primary product we intend to produce. In addition, we have not consistently received sufficient revenue from any single by-product metal to warrant classification of such as a co-product.
We periodically review our revenues to ensure that reporting of primary products and by-products is appropriate. Because for Greens Creek, Lucky Friday and San Sebastian we consider zinc, lead and gold to be by-products of our silver production, the values of these metals offset operating costs within our calculations of Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce.
We believe the identification of silver as a by-product credit is appropriate at Casa Berardi and Nevada Operations because of its lower economic value compared to gold and due to the fact that gold is the primary product we intend to produce there. In addition, we do not receive sufficient revenue from silver at Casa Berardi to warrant classification of such as a co-product. Because we consider silver to be a by-product of our gold production at Casa Berardi and Nevada Operations, the value of silver offsets operating costs within our calculations of Cash Cost, After By-product Credits, per Gold Ounce and AISC, After By-product Credits, per Gold Ounce.
For the first quarter of 2021, we recorded income applicable to common stockholders of $18.8 million ($0.04 per basic common share), compared to a loss of $17.3 million ($0.03 per basic common share) during the first quarter of 2020. The following factors contributed to the results for the first three months of 2021 compared to the first quarter of 2020:
•
Variances in gross profit (loss) at our operating units as illustrated in the table above. See The Greens Creek Segment,The Lucky Friday Segment, The Casa Berardi Segment, The San Sebastian Segment and The Nevada Operations Segment sections below.
•
Ramp-up costs at Lucky Friday decreased by $8.1 million in the first quarter of 2021 compared to the first quarter of 2020 due to the return to full production starting in the fourth quarter of 2020. See The Lucky Friday Segment section below.
•
Lower interest expense by $5.6 million in the first quarter of 2021 compared to the first quarter of 2020, with the decrease due to the following items in 2020: (i) interest recognized on both our 7.25% Senior Notes due February 15, 2028 ("Senior Notes") and our previously-outstanding 6.875% Senior Notes that were due in 2021 ("2021 Notes") for an overlapping period of almost one month, as the Senior Notes were issued on February 19, 2020 and the 2021 Notes were redeemed on March 19, 2020, (ii) $1.7 million in unamortized initial purchaser discount on the 2021 Notes recognized as expense upon their redemption and (iii) higher interest related to amounts drawn on our revolving credit facility.
•
A net loss on investments in other mining companies of $2.4 million, including a $3.6 million unrealized loss and a $1.2 million gain on exchange of investments, in the first quarter of 2021 compared to a net loss of $1.0 million in the first quarter of 2020.
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Table of Contents
•
Higher other operating expense by $2.7 million in the first quarter of 2021 compared to the first quarter of 2020 due to project costs incurred to identify and implement potential operational improvements at Casa Berardi.
•
Provision for closed operations and environmental matters increased by $3.2 million in the first quarter of 2021 compared to the first quarter of 2020 primarily due to a $2.9 million increase in the accrual for estimated costs at the Johnny M site in New Mexico (see Note 10 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information).
•
Exploration and pre-development expense increased by $3.6 million in the first quarter of 2021 compared to the first quarter of 2020. In the first quarter of 2021, exploration was primarily at our San Sebastian, Casa Berardi and Nevada Operations units.
•
A gain on metal derivatives contracts of ~~$11.2~~$0.5 million ~~and $16.5 million, respectively,~~ in the ~~third~~first quarter ~~and~~of 2021 compared to a gain of $7.9 million in the first ~~nine months~~quarter of ~~2017, with no net activity on base metal derivative contracts for the third quarter and first nine months of 2016.~~2020. See Note 118 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information.
Lucky Friday suspension costs of $4.8 million and $14.4 million in the third quarter and first nine months of 2017, respectively. These costs, which include $1.1 million and $3.3 million in non-cash depreciation expense, were incurred during the suspension of full production resulting from the strike, which started in March 2017.
Higher interest expense by $3.8 million and $11.8 million in the third quarter and first nine months of 2017, respectively, compared to the same periods of 2016. Interest expense in the first nine months of 2017 and 2016 was net of $0.9 million and $12.0 million, respectively, in capitalized interest primarily related to the #4 Shaft project, with the decrease due to completion of the #4 Shaft in January 2017. In addition, interest expense for the nine months ended September 30, 2017 included $0.9 million in costs related to our proposed private offering of new Senior Notes in June 2017 and concurrent tender offer to purchase our existing Senior Notes, which were not completed.
Exploration and pre-development expense increased by $4.6 million and $10.0 million, respectively, in the third quarter and first nine months of 2017 compared to the same periods in 2016. In 2017, we have continued exploration work at our Greens Creek, San Sebastian and Casa Berardi units, and at our other projects in Quebec, Canada. "Pre-development expense" is defined as costs incurred in the exploration stage that may ultimately benefit production, such as underground ramp development, which are expensed due to the lack of proven and probable reserves. Pre-development expense of $1.8 million and $4.1 million in the third quarter and first nine months of 2017, respectively, was related to advancement of our Montanore and Rock Creek projects.
Net foreign exchange losses in the third quarter and first nine months of 2017 of $4.8 million and $10.9 million, respectively, versus a net gain of $2.4 million in the third quarter of 2016 and net loss of $7.7 million in the first nine months of 2016. The variances are primarily related to the impact of changes in the CAD-to-USD exchange rate on the remeasurement of our net monetary liabilities in Quebec. During the first nine months of 2017, the applicable CAD-to-USD exchange rate decreased from 1.3426 to 1.2480, compared to a decrease in the rate from 1.3841 to 1.3116 during the first nine months of 2016.
~~Research and development expense of~~ ~~$1.1 million and $2.1 million in the third quarter and first nine months of 2017, respectively, related to evaluation and development of technologies that would be new to our operations.~~
~~Lower general and administrative expense by~~ ~~$1.6 million and $2.7 million, respectively, for the third quarter and first nine months of 2017 compared to the same periods of 2016 primarily due to lower accruals for incentive compensation.~~
~~Gain on disposal of properties, plants, equipment and mineral interests of~~ ~~$4.8 million recognized in the third quarter of 2017 primarily related to insurance proceeds received for collapse of the mill building at the Troy mine in February 2017 due to snow.~~

•
Income tax benefits of $5.4 million and $18.4 million, in the third quarter and first nine months of 2017, respectively, compared to provisions of $9.5 million of $22.6 million, respectively, in the comparable 2016 periods. The benefit for the first nine months of 2017 includes a benefit from a change in income tax position recognizedA net foreign exchange loss in the first quarter of ~~2017 relating~~2021 of $2.1 million versus a net gain of $6.6 million in the first quarter of 2020, with the variance primarily related to the ~~timing~~impact of ~~deduction for #4 Shaft development~~a weakening of the Canadian dollar ("CAD") relative to the U.S. dollar ("USD") on remeasurement of our assets and liabilities in Quebec. During the first quarter of 2021, the applicable CAD-to-USD exchange rate decreased from 1.2732 to 1.2575, compared to an increase in the rate from 1.2989 to 1.4186 during the first quarter of 2020.
•
An income and mining tax provision of $4.6 million in the first quarter of 2021 compared to an income and mining tax benefit of $1.1 million in the first quarter of 2020. The provision in the 2021 period is primarily the result of income in Quebec and the reclassification of certain income-based state and provincial taxes from Cost of sales and other direct production costs ~~at Lucky Friday. See~~ to ~~Corporate Matters~~Income and mining tax provision ~~below~~ (see Note 3 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more ~~information.~~information).

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28
Table of Contents

The Greens Creek Segment
Dollars are in thousands (except per ounce and per ton amounts)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2017

2016

2017

2016

Sales
$ 61,061 $ 85,804 $ 191,250 $ 199,260
Cost of sales and other direct production costs
(29,320
)
(42,306
)
(100,799
)
(106,238
)
Depreciation, depletion and amortization
(12,607
)
(16,091
)
(39,442
)
(40,746
)
Cost of sales and other direct production costs and depreciation, depletion and amortization
(41,927
)
(58,397
)
(140,241
)
(146,984
)
Gross profit
$ 19,134 $ 27,407 $ 51,009 $ 52,276
Tons of ore milled
219,983 202,523 627,900 610,879
Production:

Silver (ounces)
2,344,315 2,445,328 6,205,659 7,020,688
Gold (ounces)
12,563 11,988 39,289 39,497
Zinc (tons)
14,325 12,144 40,697 42,330
Lead (tons)
4,851 4,803 14,080 15,236
Payable metal quantities sold:

Silver (ounces)
1,569,092 2,603,165 4,930,946 6,370,660
Gold (ounces)
7,862 12,364 30,920 35,883
Zinc (tons)
8,445 11,318 27,582 31,370
Lead (tons)
2,935 4,710 10,015 12,580
Ore grades:

Silver ounces per ton
13.65 15.40 12.84 14.61
Gold ounces per ton
0.09 0.09 0.10 0.10
Zinc percent
7.47 6.86 7.49 7.90
Lead percent
2.77 2.92 2.83 3.05
Mining cost per ton
$ 69.46 $ 69.66 $ 69.64 $ 69.20
Milling cost per ton
$ 31.01 $ 31.55 $ 32.38 $ 31.07
Total Cash Cost, After By-product Credits, Per Silver Ounce ⁽¹⁾
$ (0.15
)
$ 4.80 $ 0.73 $ 4.68
All-In Sustaining Costs ("AISC"), After By-Product Credits, per Silver Ounce ⁽¹⁾
$ 4.47 $ 11.02 $ 5.60 $ 10.18
Dollars are in thousands (except per ounce and per ton amounts)

Three months ended March 31,

2021

2020

Sales
$ 98,409 $ 53,833
Cost of sales and other direct production costs
(38,360 ) (36,753 )
Depreciation, depletion and amortization
(14,821 ) (12,429 )
Total cost of sales
(53,181 ) (49,182 )
Gross profit
$ 45,228 $ 4,651
Tons of ore milled
194,080 198,804
Production:

Silver (ounces)
2,584,870 2,775,707
Gold (ounces)
13,266 12,273
Zinc (tons)
13,354 12,487
Lead (tons)
4,924 5,198
Payable metal quantities sold:

Silver (ounces)
2,247,274 2,093,720
Gold (ounces)
10,547 10,321
Zinc (tons)
9,097 9,652
Lead (tons)
3,645 3,460
Ore grades:

Silver ounces per ton
16.01 16.87
Gold ounces per ton
0.09 0.08
Zinc percent
7.62 6.89
Lead percent
3.06 3.12
Total production cost per ton
$ 182.61 $ 185.92
Cash Cost, After By-product Credits, per Silver Ounce ⁽¹⁾
$ (0.67 ) $ 5.63
AISC, After By-product Credits, per Silver Ounce ⁽¹⁾
$ 1.59 $ 7.90
Capital additions
$ 4,892 $ 5,510

(1)
A reconciliation of these non-GAAP measures to cost of sales and other direct production costs and depreciation, depletion and amortization, the most comparable GAAP measure, can be found below in Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP).
The $40.6 million increase in gross profit during the first quarter of 2021 compared to the same 2020 period was the result of higher sales due to:
•
higher realized prices for silver, gold, zinc and lead;
•
higher overall metals sales volumes due to the timing of concentrate shipments. Silver sales volume was higher in spite of lower silver production primarily resulting from lower grades due to normal variations in the ore body; and
•
lower concentrate treatment costs of $5.7 million primarily as a result of favorable changes in smelter terms, with approximately $4 million to be non-recurring.

36
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Table of Contents
The $8.3 million and $1.3 million decreases in gross profit during the third quarter and first nine months of 2017, respectively, compared to the same 2016 periods were primarily a result of lower metals sales volumes due to the timing of concentrate shipments and lower silver ore grades and recoveries, partially offset by higher mill throughput. As a result of differences in the timing of shipments, there were 13,822 tons of concentrate in inventory, including 5,991 tons of higher-valued lead concentrate, having a value of approximately $26.1 million and cost of $15.2 million at September 30, 2017, compared to 3,617 tons (including 1,355 tons of lead concentrate) having a value of approximately $4.7 million and cost of $3.9 million at September 30, 2016. Results for the third quarter of 2017 were also impacted by lower average realized prices for silver and gold, partially offset by higher prices for zinc and lead, compared to the third quarter of 2016. For the first nine months of 2017, silver and gold prices varied only slightly, while prices for zinc and lead were higher, compared to 2016. Gross profit at Greens Creek was affected by positive price adjustments to revenues of $1.0 million and $0.5 million for the third quarter and first nine months of 2017, respectively, compared to negative price adjustments of $1.0 million and positive price adjustments of $0.3 million for the third quarter and first nine months of 2016, respectively. Price adjustments to revenues result from changes in metals prices between transfer of title of concentrates to buyers and final settlements during the period. The price adjustments related to silver, gold, zinc and lead contained in concentrate shipments were net of gains and losses on forward contracts for those metals for each period. The price adjustments and gains and losses on forward contracts discussed above are included in sales.
Mining costs per ton stayed relatively constant for the third quarter and first nine months of 2017 compared to the same periods in 2016. Milling costs per ton decreased 2% in the third quarter of 2017 compared to the same period in 2016 mainly due to higher tonnage. Milling costs per ton increased 4% for the first nine months of 2017 compared to the same period in 2016 due to an increase in power costs, partially offset by higher tonnage.

The chart below illustrates the factors contributing to the variances in Cash Cost, After By-product Credits, ~~Per~~per Silver Ounce for the ~~third~~first quarter ~~and~~of 2021 compared to the first ~~nine months~~quarter of ~~2017 versus the same periods in 2016:~~2020:

The following table summarizes the components of Cash Cost, After By-product Credits, per Silver Ounce:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2017

2016

2017

2016

Cash Cost, Before By-product Credits, per Silver Ounce
$ 20.75 $ 20.15 $ 22.94 $ 20.88
By-product credits
(20.90
)
(15.35
)
(22.21
)
(16.20
)
Cash Cost, After By-product Credits, per Silver Ounce
$ (0.15
)
$ 4.80 $ 0.73 $ 4.68
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~~Table of Contents~~

Three Months Ended March 31,

2021

2020

Cash Cost, Before By-product Credits, per Silver Ounce
$ 18.98 $ 20.09
By-product credits
(19.65 ) (14.46 )
Cash Cost, After By-product Credits, per Silver Ounce
$ (0.67 ) $ 5.63

The following table summarizes the components of AISC, After By-product Credits, per Silver Ounce:

Three Months Ended
September 30,

Nine Months Ended
September 30,

Three Months Ended March 31,

2017

2016

2017

2016

2021

2020

AISC, Before By-product Credits, per Silver Ounce
$ 25.37 $ 26.37 $ 27.81 $ 26.38 $ 21.24 $ 22.36
By-product credits
(20.90
)
(15.35
)
(22.21
)
(16.20
)
(19.65 ) (14.46 )
AISC, After By-product Credits, per Silver Ounce
$ 4.47 $ 11.02 $ 5.60 $ 10.18 $ 1.59 $ 7.90

The decrease in Cash Costs and AISC, After By-Product Credits, per Silver Ounce for the first quarter of 2021 compared to 2020 was primarily due to the higher by-product credits, lower treatment costs and reclassification of mine license tax from production costs to income and mining tax provision effective January 1, 2021.
Restrictions imposed by the State of Alaska beginning in late March 2020 in response to the COVID-19 virus pandemic, including the requirement for employees returning to Alaska to self-quarantine for 14 days (changed in June 2020 to 7 days), has caused us to revise the normal operating procedures and incur additional costs for staffing operations at Greens Creek. The changes at Greens Creek have not materially impacted our operations to date; however, restrictions could have a material impact if they continue longer than anticipated or become broader.
30
Table of Contents
The Lucky Friday Segment
Dollars are in thousands (except per ounce and per ton amounts)

Three Months Ended March 31,

2021

2020

Sales
$ 29,122 $ 2,830
Cost of sales and other direct production costs
(16,458 ) (2,530 )
Depreciation, depletion and amortization
(6,336 ) (302 )
Total cost of sales
(22,794 ) (2,832 )
Gross profit (loss)
$ 6,328 $ (2 )
Tons of ore milled
81,071 10,219
Production:

Silver (ounces)
863,901 95,748
Lead (tons)
5,780 695
Zinc (tons)
2,753 360
Payable metal quantities sold:

Silver (ounces)
763,823 101,102
Lead (tons)
5,023 670
Zinc (tons)
1,930 184
Ore grades:

Silver ounces per ton
11.18 9.87
Lead percent
7.51 7.23
Zinc percent
3.70 3.85
Total production cost per ton
$ 181.28 $ —
Cash Cost, After By-product Credits, per Silver Ounce ⁽¹⁾
$ 7.62 $ —
AISC, After By-product Credits, per Silver Ounce ⁽¹⁾
$ 14.24 $ —
Capital additions
$ 5,912 $ 4,295
The increases in sales, gross profit, ore tonnage and metals production in the first quarter of 2021 compared to the first quarter of 2020 was the result of a full quarter of production following the return to full production during the fourth quarter of 2020 (discussed further below).
31
Table of Contents
The chart below illustrates the factors contributing to Cash Cost, After By-product Credits, per Silver Ounce for the ~~third~~first quarter ~~and first nine months~~ of 2017 was primarily the result of higher by-product credits, partially offset by lower silver production. The decrease in AISC, After By-Product Credits, per Silver Ounce was due to the same factors, along with lower capital spending.
~~Mining~~2021. Total production costs and ~~milling costs increased in the third quarter and first nine months of 2017 compared to 2016 on a per-ounce basis due primarily to lower silver production resulting from reduced silver grades.~~
~~Other cash costs per ounce for the third quarter and first nine months of 2017 were higher compared to 2016 due to the effect of lower silver production.~~
Treatment costs were lower in the third quarter and first nine months of 2017 compared to 2016 as a result of improved payment terms from smelters, partially offset by lower silver production. Treatment costs were also impacted by silver price variances, as treatment costs include the value of silver not payable to us through the smelting process. The silver not payable to us is either recovered by the smelters through further processing or ultimately not recovered and included in the smelters' waste material.
~~By-product credits per ounce were higher in the third quarter and first nine months of 2017 compared to 2016 due to higher zinc and lead prices.~~
The difference between what we report as "production" and "payable metal quantities 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. The difference in payable quantities sold for 2017 compared to 2016 is due mainly to timing of concentrate shipments.
~~While revenue from zinc, lead and gold by-products is significant, we believe that identification of silver as the primary product of the Greens Creek unit is appropriate because:~~
~~silver has historically accounted for a higher proportion of revenue than any other metal and is expected to do so in the future;~~
we have historically presented Greens Creek as a producer primarily of silver, based on the original analysis that justified putting the project into production, and believe that consistency in disclosure is important to our investors regardless of the relationships of metals prices and production from year to year;
~~metallurgical treatment maximizes silver recovery;~~
~~the Greens Creek deposit is a massive sulfide deposit containing an unusually high proportion of silver; and~~
~~in most of its working areas, Greens Creek utilizes selective mining methods in which silver is the metal targeted for highest recovery.~~
Likewise, we believe the identification of gold, lead and zinc as by-product credits is appropriate because of their lower economic value compared to silver and due to the fact that silver is the primary product we intend to produce. In addition, we do not receive sufficient revenue from any single by-product metal to warrant classification of such as a co-product.
38
~~Table of Contents~~
We periodically review our revenues to ensure that reporting of primary products and by-products is appropriate.  Because we consider zinc, lead and gold to be by-products of our silver production, the values of these metals offset operating costs within our calculations of Cash Cost ~~After By-product Credits, per Silver Ounce~~ and AISC, After By-product Credits, per Silver ~~Ounce.~~
~~The Lucky Friday Segment~~
Dollars are in thousands (except per ounce and per ton amounts)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2017

2016

2017

2016

Sales
$ 199 $ 26,140 $ 20,022 $ 70,152
Cost of sales and other direct production costs
— (16,538
)
(12,109
)
(47,921
)
Depreciation, depletion and amortization
— (2,946
)
(2,433
)
(8,775
)
Cost of sales and other direct production costs and depreciation, depletion and amortization
— (19,484
)
(14,542
)
(56,696
)
Gross profit (loss)
$ 199 $ 6,656 $ 5,479 $ 13,456
Tons of ore milled
7,302 74,397 64,371 216,247
Production:

Silver (ounces)
88,298 887,364 769,080 2,721,991
Lead (tons)
519 5,608 4,346 16,604
Zinc (tons)
172 2,681 2,303 7,991
Payable metal quantities sold:

Silver (ounces)
— 829,364 641,004 2,617,130
Lead (tons)
— 5,257 3,596 15,800
Zinc (tons)
— 2,279 1,688 6,578
Ore grades:

Silver ounces per ton
12.87 12.40 12.45 13.05
Lead percent
7.68 7.89 7.12 8.01
Zinc percent
3.21 3.85 3.90 3.94
Mining cost per ton
$ 150.89 $ 99.13 $ 112.60 $ 99.27
Milling cost per ton
$ 13.15 $ 25.99 $ 22.93 $ 24.77
Cash Cost, After By-product Credits, per Silver Ounce ⁽¹⁾
$ 11.60 $ 9.07 $ 6.58 $ 9.34
AISC, After By-product Credits, per Silver Ounce ⁽¹⁾
$ 13.37 $ 20.22 $ 12.21 $ 21.35
~~(1)~~
~~A reconciliation of these non-GAAP measures to cost of sales and other direct production costs and depreciation, depletion and amortization, the most comparable GAAP measure, can be found below in~~ Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP).
~~Gross profit decreased by $6.5 million and $8.0 million in the third quarter and first nine months of 2017, respectively, compared to the same periods in 2016. The $0.2 million in sales reported~~Ounce are not presented for the third quarter of 2017 represents gains on base metal derivatives contracts. Although there was limited concentrate production during the third quarter of 2017, we have opted to defer shipments until a later period. There were 1,489 tons of concentrate in inventory at September 30, 2017. The variance in gross profit for the first nine months of 2017 was primarily due to reduced metal production resulting from the strike by unionized employees starting in mid-March 2017, discussed further below, and the lack of concentrate shipments during the third quarter. Silver and lead production was also impacted by lower ore grades in the first quarter of ~~2017. These factors were partially offset by higher average realized silver, lead and zinc prices realized~~2020, as production was limited during the ~~first quarter of 2017, prior to~~ramp-up after the ~~strike.~~strike and results are not comparable.

39
~~Table of Contents~~

Mining cost per ton was higher by 13% in the first nine months of 2017 compared to the same periods in 2016 due primarily to lower tonnage as a result of the strike discussed below. Milling cost per ton was lower by 7% in the first nine months of 2017 compared to 2016. Mining and milling cost per ton for the third quarter of 2017 are not indicative of future operating results under full production, as there was reduced mill throughput during the quarter. The mill was idle for most of the third quarter of 2017, and only operated when the limited mine production provided a sufficient ore stockpile. In addition, costs not directly related to mining and processing ore have been classified as suspension costs during the strike period, and excluded from the calculations of mining and milling cost per ton for the third quarter and first nine months of 2017.
The chart below illustrates the factors contributing to the variances in Cash Cost, After By-product Credits, Per Silver Ounce for the third quarter and first nine months of 2017 compared to the same periods of 2016:

The following table summarizes the components of Cash Cost, After By-product Credits, per Silver Ounce:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2017

2016

2017

2016

Cash Cost, Before By-product Credits, per Silver Ounce
$ 27.44 $ 24.26 $ 23.42 $ 22.63
By-product credits
(15.84
)
(15.19
)
(16.84
)
(13.29
)
Cash Cost, After By-product Credits, per Silver Ounce
$ 11.60 $ 9.07 $ 6.58 $ 9.34
Three Months Ended March 31,
2021
Cash Cost, Before By-product Credits, per Silver Ounce
24.43
By-product credits
(16.81 )
Cash Cost, After By-product Credits, per Silver Ounce
7.62

The following table summarizes the components of AISC, After By-product Credits, per Silver Ounce:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2017

2016

2017

2016

AISC, Before By-product Credits, per Silver Ounce
$ 29.21 $ 35.41 $ 29.05 $ 34.64
By-product credits
(15.84
)
(15.19
)
(16.84
)
(13.29
)
AISC, After By-product Credits, per Silver Ounce
$ 13.37 $ 20.22 $ 12.21 $ 21.35
40
~~Table of Contents~~
The increase in Cash Cost, After By-product Credits, per Silver Ounce in the third quarter was the result of lower silver production due to the strike. The decrease in Cash Cost, After By-product Credits, per Silver Ounce for the first nine months of 2017 compared to the same period in 2016 was due to higher by-product credits due to higher lead and zinc prices, partially offset by lower silver production. The decrease in AISC, After By-product Credits, per Silver Ounce in the third quarter and first nine months of 2017 was the result of lower capital costs primarily as a result of completion of the #4 Shaft project in January 2017 and higher by-product credits, partially offset by lower silver production. During the strike period, only costs directly related to the limited production are included in the calculations of Cash Cost, After By-product Credits and AISC, After By-product Credits, per Silver Ounce, and suspension-related costs are excluded from those calculations.
Similar to the Greens Creek segment, the difference between what we report as “production” and “payable metal quantities sold” is due 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.
~~While value from lead and zinc is significant, we believe that identification of silver as the primary product of the Lucky Friday unit is appropriate because:~~
~~silver has historically accounted for a higher proportion of revenue than any other metal and is expected to do so in the future;~~
~~the Lucky Friday unit is situated in a mining district long associated with silver production; and~~
~~the Lucky Friday unit generally utilizes selective mining methods to target silver production.~~
Likewise, we believe the identification of lead and zinc as by-product credits is appropriate because of their lower economic value compared to silver and due to the fact that silver is the primary product we intend to produce. In addition, we do not receive sufficient revenue from any single by-product metal to warrant classification of such as a co-product.
We periodically review our revenues to ensure that reporting of primary products and by-products is appropriate.  Because we consider zinc and lead to be by-products of our silver production, the values of these metals offset operating costs within our calculations of Cash Cost, After By-product Credits, per Silver Ounce.

Three Months Ended March 31,

2021

AISC, Before By-product Credits, per Silver Ounce
$ 31.05
By-product credits
(16.81 )
AISC, After By-product Credits, per Silver Ounce
14.24

Many of the employees at our Lucky Friday unit are represented by a union, and the ~~most recent~~current collective bargaining agreement with the union ~~expired~~expires on ~~April 30, 2016. On February 19, 2017, the~~January 6, 2023. The unionized employees ~~voted against our contract offer. On~~were on strike from March 13, 2017 until January 7, 2020, when the ~~unionized employees went on strike,~~union ratified a new collective bargaining agreement. Salaried personnel performed limited production and ~~have been on strike since that time. Production at Lucky Friday was suspended~~capital improvements from July 2017 until the ~~start~~end of the ~~strike, until limited production by salary personnel~~strike. Re-staffing of the mine commenced in ~~July 2017. Suspension costs during~~ the ~~strike~~first quarter of 2020. We have substantially completed the re-staffing and ramp-up process, and the mine has returned to full production starting with the fourth quarter of 2020. Costs related to ramp-up activities totaled ~~$3.7 million and $11.1~~$8.1 million in the ~~third~~first quarter ~~and first nine months~~ of ~~2017, respectively. These costs are combined with~~2020, which include non-cash depreciation expense of ~~$1.1~~$1.8 million and ~~$3.3 million for those periods and~~are reported in a separate line item on our ~~condensed~~ consolidated ~~statement~~statements of ~~operations.~~operations, with no ramp-up costs recognized in the first quarter of 2021. These ~~suspension~~ramp-up costs are excluded from the calculation of gross profit, total production cost per ton, Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce. We cannot predict how long the strike will last or whether an agreement will be reached. As a result of the strike or other related events, operations at Lucky Friday could continue to be disrupted, which could adversely affect our financial condition and results of operations.Ounce, when presented.

See Note 410 of Notes to Condensed Consolidated Financial Statements (Unaudited) for ~~contingencies~~a contingency related to ~~various events occurring~~groundwater monitoring at the Lucky Friday mine in prior periods.

41
32
Table of Contents

The Casa Berardi Segment

Dollars are in thousands (except per ounce and per ton amounts)

Three Months Ended
September 30,

Nine Months Ended
September 30,

Three Months Ended March 31,

2017

2016

2017

2016

2021

2020

Sales
$ 53,990 $ 41,131 $ 139,524 $ 126,614 $ 72,911 $ 46,172
Cost of sales and other direct production costs
(32,999
)
(25,830
)
(95,288
)
(74,076
)
(36,975 ) (31,928 )
Depreciation, depletion and amortization
(15,596
)
(10,465
)
(39,454
)
(32,563
)
(25,541 ) (16,397 )
Cost of sales and other direct production costs and depreciation, depletion and amortization
(48,595
)
(36,295
)
(134,742
)
(106,639
)
Total cost of sales
(62,516 ) (48,325 )
Gross profit (loss)
$ 5,395 $ 4,836 $ 4,782 $ 19,975 $ 10,395 $ (2,153 )
Tons of ore milled
326,145 258,100 949,946 693,288 368,403 331,618
Production:

Gold (ounces)
44,141 31,949 113,209 104,282 36,190 26,752
Silver (ounces)
9,659 8,361 26,681 24,034 10,675 5,934
Payable metal quantities sold:

Gold (ounces)
42,053 30,769 111,046 100,960 40,869 29,082
Silver (ounces)
8,725 9,076 26,952 24,506 8,715 8,423
Ore grades:

Gold ounces per ton
0.153 0.141 0.137 0.172 0.120 0.102
Silver ounces per ton
0.03 0.04 0.03 0.04 0.04 0.02
Mining cost per ton
$ 82.95 $ 92.17 $ 81.95 $ 90.53
Milling cost per ton
$ 16.19 $ 18.07 $ 16.28 $ 18.88
Total production cost per ton
$ 99.67 $ 102.45
Cash Cost, After By-product Credits, per Gold Ounce ⁽¹⁾
$ 750 $ 915 $ 858 $ 750 $ 1,027 $ 1,268
AISC, After By-product Credits, per Gold Ounce (1)
$ 1,091 $ 1,442 $ 1,226 $ 1,243 $ 1,272 $ 1,615
Capital additions
$ 13,847 $ 8,506

(1)
A reconciliation of these non-GAAP measures to cost of sales and other direct production costs and depreciation, depletion and amortization, the most comparable GAAP measure, can be found below in Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP).

Gross profit increased by ~~$0.6 million and decreased by $15.2~~$12.5 million for the ~~third~~first quarter ~~and first nine months~~ of ~~2017, respectively,~~2021 compared to the ~~same periods in 2016. The increase for the third~~first quarter ~~was~~of 2020 primarily due to ~~increased~~higher sales resulting from higher average gold prices and volume, partially offset by higher total cost of sales resulting from the higher sales volume. The lower gold volume in the first quarter of 2020 resulted from reduced ore grades and lower production than anticipated due to a government COVID-19-related order. In late March 2020, the Government of Quebec ordered the mining industry to reduce to minimum operations as part of the fight against the COVID-19 virus, causing us to suspend our Casa Berardi operations from March 24, 2020 until April 15, 2020, when limited mining operations resumed, resulting in reduced mill throughput. As a result of the suspension of operations, gold production was negatively impacted by approximately 5,200 and 6,500 ounces in March and April 2020, respectively. Production may continue to be adversely impacted by the COVID-19 mitigation practices in place until they are no longer required. Suspension-related costs totaling $0.9 million for the first quarter of 2020 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, mining and milling cost per ton, and Cash Cost and AISC, After By-product Credits, per Gold Ounce.
Total capital additions increased by $5.3 million in the first quarter of 2021 compared to the first quarter of 2020 primarily due to ~~higher ore throughput and gold grades,~~growth capital costs incurred for development of the new 160 zone open pit mine, partially offset by lower ~~gold prices. The decrease in gross profit for the first nine months of 2017 compared to 2016 was primarily due to lower~~sustaining capital costs. We expect limited ore ~~grades and higher stripping costs in the first half of the year, partially offset by higher ore throughput. The lower grades were due to the addition of~~ production from the ~~East Mine Crown Pillar ("EMCP")~~160 zone pit which commenced in July 2016, and underground mine sequencing. The increase in ore throughput was also a result of the addition of the EMCP pit. Grades improved in the third quarter of 2017 as higher-grade areas of the underground mine become available for production, and we expect the higher grades to ~~continue~~begin in the fourth quarter of ~~2017.~~
Mining costs per ton were lower by 10% and 9% and milling unit costs decreased by 10% and 14% in the third quarter and first nine months of 2017, respectively, compared to the same periods in 2016 due primarily to higher ore production.2021.

42
33
Table of Contents

The chart below illustrates the factors contributing to Cash Cost, After By-product Credits, ~~Per~~per Gold Ounce for the ~~third~~first quarter ~~and~~of 2021 compared to the first ~~nine months~~quarter of ~~2017 and 2016:~~2020:

The following table summarizes the components of Cash Cost, After By-product Credits, per Gold Ounce:

Three Months Ended
September 30,

Nine Months Ended
September 30,

Three Months Ended March 31,

2017

2016

2017

2016

2021

2020

Cash Cost, Before By-product Credits, per Gold Ounce
$ 754 $ 920 $ 862 $ 754 $ 1,035 $ 1,272
By-product credits
(4
)
(5
)
(4
)
(4
)
(8 ) (4 )
Cash Cost, After By-product Credits, per Gold Ounce
$ 750 $ 915 $ 858 $ 750 $ 1,027 $ 1,268

The following table summarizes the components of AISC, After By-product Credits, per Gold Ounce:

Three Months Ended
September 30,

Nine Months Ended
September 30,

Three Months Ended March 31,

2017

2016

2017

2016

2021

2020

AISC, Before By-product Credits, per Gold Ounce
$ 1,095 $ 1,447 $ 1,230 $ 1,247 $ 1,280 $ 1,619
By-product credits
(4
)
(5
)
(4
)
(4
)
(8 ) (4 )
AISC, After By-product Credits, per Gold Ounce
$ 1,091 $ 1,442 $ 1,226 $ 1,243 $ 1,272 $ 1,615

The decrease in Cash Cost ~~After By-product Credits, per Gold Ounce for the third quarter of 2017 compared to the same period of 2016 was primarily due to higher gold production.~~and AISC, After By-product Credits, per Gold Ounce was also lower in the third quarter of 2017 compared to the third quarter of 2016 due to the higher gold production, along with lower capital spending. The increase in Cash Cost, After By-product Credits, per Gold Ounce for the first ~~nine months~~quarter of ~~2017~~2021 compared to ~~2016~~the first quarter of 2020 was primarily the result of higher ~~stripping costs in the first half of the year, partially offset by higher~~ gold ~~production.~~production, with AISC, After By-product Credits, per Gold Ounce ~~was~~also impacted by lower ~~for the first nine months of 2017 compared to 2016 due to lower~~sustaining capital spending, ~~and higher gold production,~~ partially offset by ~~the increased stripping in the first half of the year.~~
The difference between what we report as "production" and "payable metal quantities sold" is mainly attributable to inventory changes incidental to the timing of sales of refined metals and shipping schedules.
We believe the identification of silver as a by-product credit is appropriate at Casa Berardi because of its lower economic value compared to gold and due to the fact that gold is the primary product we intend to produce there. In addition, we do not receive sufficient revenue from silver at Casa Berardi to warrant classification of such as a co-product. Because we consider silver to be a by-product of our gold production at Casa Berardi, the value of silver offsets operating costs within our calculations of Cash Cost, After By-product Credits, per Gold Ounce.higher exploration spending.

43
34
Table of Contents

The San Sebastian Segment

Dollars are in thousands (except per ounce and per ton amounts)

Three Months Ended
September 30,

Nine Months Ended
September 30,

Three Months Ended March 31,

2017

2016

2017

2016

2021

2020

Sales
$ 25,589 $ 26,318 $ 66,866 $ 85,686 $ 173 $ 9,927
Cost of sales and other direct production costs
(6,039
)
(5,855
)
(16,341
)
(20,927
)
(94 ) (6,827 )
Depreciation, depletion and amortization
(641
)
(677
)
(2,036
)
(2,508
)
— (1,473 )
Cost of sales and other direct production costs and depreciation, depletion and amortization
(6,680
)
(6,532
)
(18,377
)
(23,435
)
Total cost of sales
(94 ) (8,300 )
Gross profit
$ 18,909 $ 19,786 $ 48,489 $ 62,251 $ 79 $ 1,627
Tons of ore milled
36,482 40,192 111,623 108,750 — 35,476
Production:

Silver (ounces)
880,885 975,610 2,498,638 3,434,052 — 346,625
Gold (ounces)
6,342 8,189 19,222 27,000 — 2,802
Payable metal quantities sold:

Silver (ounces)
963,000 843,238 2,499,750 3,209,788 3,392 353,696
Gold (ounces)
7,465 7,215 19,955 24,374 47 2,824
Ore grades:

Silver ounces per ton
25.48 25.77 23.71 33.70 — 10.64
Gold ounces per ton
0.18 0.22 0.18 0.27 — 0.091
Mining cost per ton
$ 35.69 $ 59.49 $ 38.70 $ 83.31
Milling cost per ton
$ 69.42 $ 66.88 $ 66.64 $ 68.52
Total production cost per ton
$ — $ 178.02
Cash Cost, After By-product Credits, per Silver Ounce ⁽¹⁾
$ (3.12
)
$ (4.03
)
$ (3.23
)
$ (3.40
)
$ — $ 6.91
AISC, After By-product Credits, per Silver Ounce ⁽¹⁾
$ (0.83
)
$ (2.39
)
$ (0.14
)
$ (2.25
)
$ — $ 9.59
Capital additions
$ — $ 803

(1)
A reconciliation of ~~these~~this non-GAAP ~~measures~~measure to cost of sales and other direct production costs and depreciation, depletion and amortization, the most comparable GAAP measure, can be found below in Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP).

The ~~$0.9~~$1.5 million decrease in gross profit ~~for~~in the first quarter of 2021 compared to the first quarter of 2020 is primarily due to lower metal volumes. Mining at San Sebastian was completed in the third quarter of ~~2017 compared to~~2020, and milling was completed in the ~~third~~fourth quarter of ~~2016 was primarily due to lower silver~~2020, with exploration and ~~gold production and prices. The reduction in silver and gold production was a result of lower ore throughput and grades. The $13.8~~evaluation activities ongoing.
Suspension-related costs at San Sebastian totaling $0.7 million ~~decrease in gross profit~~ for the first ~~nine months~~quarter of ~~2017 compared to~~2021 are reported in a separate line item on our consolidated statements of operations and excluded from the ~~same period in 2016 was primarily due to lower silver~~calculations of cost of sales and ~~gold~~other direct production ~~as a result of lower ore grades, partially offset by higher ore throughput. The ore processed in the first half of 2016 had considerably higher grades than anticipated over the mine life.~~costs and depreciation, depletion and amortization, total production costs and Cash Cost and AISC, After By-product Credits, per Silver Ounce.

44
35
Table of Contents

The chart below illustrates the factors contributing to Cash Cost, After By-product Credits, Per Silver Ounce for the ~~third~~first quarter ~~and first nine months~~ of ~~2017 and 2016:~~2020:

The following table summarizes the components of Cash Cost, After By-product Credits, per Silver Ounce:

Three Months Ended
September 30,

Nine Months Ended
September 30,

Three Months Ended March 31,

2017

2016

2017

2016

2020

Cash Cost, Before By-product Credits, per Silver Ounce
$ 6.07 $ 7.16 $ 6.39 $ 6.49 $ 19.67
By-product credits
(9.19
)
(11.19
)
(9.62
)
(9.89
)
(12.76 )
Cash Cost, After By-product Credits, per Silver Ounce
$ (3.12
)
$ (4.03
)
$ (3.23
)
$ (3.40
)
$ 6.91

The following table summarizes the components of AISC, After By-product Credits, per Silver Ounce:

Three Months Ended
September 30,

Nine Months Ended
September 30,

Three Months Ended March 31,

2017

2016

2017

2016

2020

AISC, Before By-product Credits, per Silver Ounce
$ 8.36 $ 8.80 $ 9.48 $ 7.64 $ 22.35
By-product credits
(9.19
)
(11.19
)
(9.62
)
(9.89
)
(12.76 )
AISC, After By-product Credits, per Silver Ounce
$ (0.83
)
$ (2.39
)
$ (0.14
)
$ (2.25
)
$ 9.59
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Table of Contents
The Nevada Operations Segment
Dollars are in thousands (except per ounce and per ton amounts)

Three Months Ended March 31,

2021

2020

Sales
$ 10,237 $ 24,163
Cost of sales and other direct production costs
(4,822 ) (7,849 )
Depreciation, depletion and amortization
(2,633 ) (9,065 )
Total cost of sales
(7,455 ) (16,914 )
Gross profit
$ 2,782 $ 7,249
Tons of ore milled
16,459 17,298
Production:

Gold (ounces)
2,548 16,965
Silver (ounces)
— 21,455
Payable metal quantities sold:

Gold (ounces)
5,823 14,876
Silver (ounces)
6,821 25,339
Ore grades:

Gold ounces per ton
0.185 1.055
Silver ounces per ton
— 1.47
Total production cost per ton
$ 360.72 $ 745.14
Cash Cost, After By-product Credits, per Gold Ounce ⁽¹⁾
$ 1,416 $ 735
AISC, After By-product Credits, per Gold Ounce ⁽¹⁾
$ 1,461 $ 808
Capital additions
$ 89 $ 857
(1)
A reconciliation of these non-GAAP measures to cost of sales and other direct production costs and depreciation, depletion and amortization, the most comparable GAAP measure, can be found below in Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP).

The ~~increase~~decrease in gross profit for the first quarter of 2021 compared to the first quarter of 2020 is a result of lower metals production. During the second half of 2020, all ore mined at the Nevada Operations was stockpiled, with no ore milled and no production reported during that period. Mining of non-refractory ore at Fire Creek in areas where development has already been performed was completed in the fourth quarter of 2020. Processing of the stockpiled non-refractory ore at the Midas mill commenced at the end of the first quarter of 2021, and is expected to be completed in the second quarter. In addition, third-party processing of a bulk sample of Fire Creek refractory ore commenced in the first quarter of 2021 and is expected to be completed in the second quarter. Fire Creek is expected to be placed on care-and-maintenance in the second quarter of 2021 after its remaining non-refractory ore stockpile is processed. We also expect to process an additional 10,000 tons of Fire Creek refractory ore at the third-party facility in the second half of 2021.
Production was suspended at the Hollister mine in the third quarter of 2019 and at the Midas mine and Aurora mill in late-2019. Suspension-related costs at Nevada Operations totaling $3.6 million and $4.0 million for the first quarters of 2021 and 2020, respectively, 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, total production costs per ton and Cash Cost and AISC, After By-product Credits, per Gold Ounce.
Total production costs per ton were lower by 52% for the first quarter of 2021 compared to the first quarter of 2020, primarily due to lower mining and milling costs, as production for the 2021 period was from stockpiled bulk sample material processed at a third-party facility.
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Table of Contents
The chart below illustrates the factors contributing to Cash Cost, After By-product Credits, per Silver Ounce in the third quarter and first nine months of 2017 compared to the same periods of 2016 was primarily the result of lower by-product credits due to lower gold production and prices, partially offset by lower mining costs as a result of reduced mining of waste and the impact of lower silver production on the calculation. The same factors, along with higher exploration and capital spending, resulted in the increases in AISC, After By-product Credits, per SilverPer Gold Ounce for the ~~third~~first quarter of 2021 and ~~first nine months of 2017 compared to 2016.~~2020:

The ~~difference between what we report as "production" and "payable metal quantities sold" is mainly attributable to inventory changes incidental to~~following table summarizes the ~~timing of sales of refined metals and shipping schedules.~~
We believe the identification of gold as a by-product credit is appropriate at San Sebastian because of its anticipated lower economic value compared to silver over the life of the mine. In addition, we do not receive sufficient revenue from gold at San Sebastian to warrant classification of such as a co-product. Because we consider gold to be a by-product of our silver production at San Sebastian, the value of gold offsets operating costs within our calculationscomponents of Cash Cost, After By-product Credits, per ~~Silver Ounce~~Gold Ounce:

Three Months Ended March 31,

2021

2020

Cash Cost, Before By-product Credits, per Gold Ounce
$ 1,416 $ 756
By-product credits
— (21 )
Cash Cost, After By-product Credits, per Gold Ounce
$ 1,416 $ 735
The following table summarizes the components of AISC, After By-product Credits, per Gold Ounce:

Three Months Ended March 31,

2021

2020

AISC, Before By-product Credits, per Gold Ounce
$ 1,461 $ 829
By-product credits
— (21 )
AISC, After By-product Credits, per Gold Ounce
$ 1,461 $ 808
The increase in Cash Costs and AISC, After By-product Credits, per ~~Silver Ounce. In addition~~Gold ounce in the first quarter of 2021 compared to the ~~impact~~first quarter of 2020 was due to lower gold production resulting from decreased grades and ore volume.
See Item 1A. Risk Factors - Operation, Development, Exploration and Acquisition Risks in our 2020 Form 10-K for a discussion of certain risks relating to our recent and ongoing analysis of the by-product credits from gold, Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per silver Ounce at San Sebastian are lower compared to our other operations due tocarrying value of the ~~orebody being near surface and having higher precious metal grades, resulting in a lower Cash Cost, Before By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce.~~Nevada assets.

45
38
Table of Contents
In the first quarter of 2017, we began construction of a new underground ramp and rehabilitation of the historical underground access. Once completed, these underground accesses should allow us to mine deeper portions of the deposits at San Sebastian, and we anticipate underground ore production to begin in the first quarter of 2018. Capital costs related to the underground development are expected to total approximately $5.0 million in 2017.

Corporate Matters

Employee Benefit Plans

Our defined benefit pension plans provide a significant benefit to our employees, but ~~also~~ represent a significant liability to us. The liability recorded for the ~~funded~~underfunded status of our plans was ~~$43.9~~$29.6 million and $44.9 million as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, respectively. In January 2021, we contributed $16.8 million in shares of our common stock to our supplemental executive retirement plan ("SERP"), and expect to contribute an additional approximately $0.8 million to the SERP in 2021. We ~~made cash contributions~~do not expect to be required to contribute to our defined benefit pension plans ~~of $1.2 million~~ in ~~April 2017 and $5.7 million in July 2017.~~2021, but we may choose to do so. While the economic variables which will determine future funding requirements are uncertain, we expect contributions to continue to be required in future years under current plan provisions, and we periodically examine the plans for affordability and competitiveness. See Note 7 9 of Notes to ~~Condensed~~ Consolidated Financial Statements ~~(Unaudited)~~in our 2020 Form 10-K for more information.
Income and Mining Taxes

~~Income Taxes~~
~~The~~During the first quarter of 2021, an income and mining tax ~~expense for the three- and nine-month periods ended September 30, 2017 has been computed using a discrete~~provision of approximately $4.6 million resulted in an effective tax rate ~~method. We have historically calculated the provision~~of 19.6% for that period. This compares to an income ~~taxes during interim reporting periods by applying~~and mining tax benefit of $1.1 million, or an ~~estimate of the annual~~ effective tax rate ~~("AETR")~~of 5.8%, for the ~~full fiscal year to “ordinary” pretax~~first quarter of 2020. The comparability of our income ~~or loss (excluding unusual or infrequently occurring discrete items)~~and mining tax (provision) benefit and effective tax rate for the ~~reporting period. However, small changes to estimated annual “ordinary” pre-tax~~reported periods was impacted by multiple factors, primarily: (i) mining taxes; (ii) variations in our income ~~cause significant volatility to~~before income taxes; (iii) geographic distribution of that income; (iv) foreign exchange rates; (v) percentage depletion; (vi) the ~~estimated AETR, due to near break-even levels~~non-recognition of ~~pre-tax~~tax assets; and (vii) the reclassification of the Alaska mine license tax effective January 1, 2021, which increased our income and ~~significant permanent differences in~~mining tax provision by $3.0 million. Therefore, the ~~U.S. and Canada. Therefore, we determined that the AETR method would not provide a reliable estimate for the fiscal three- and nine-month periods ended September~~ ~~30, 2017. As a result of this change in method, an amount representing a recovery of income~~effective tax ~~expense reported in the first and second quarters was recorded in this~~rate will fluctuate, sometimes significantly, period to period.

Each reporting period we assess our deferred tax ~~assets utilizing~~balances based on a review of long-range forecasts ~~to provide reasonable assurance that they will be realized through future earnings.~~ ~~We continue to have a net~~and quarterly activity. A valuation allowance is provided for deferred tax ~~asset in~~assets for which it is more likely than not the ~~U.S. and a net~~related tax benefits will not be realized. We analyze our deferred tax ~~liability in Canada.~~
~~Our U.S. net deferred tax asset at September~~ ~~30, 2017 totaled $44.7 million, or 2% of total~~ assets ~~an increase of $8.9 million from the $35.8 million net deferred tax asset at December 31, 2016. The largest component of the deferred tax asset~~and, if it is ~~net operating loss carryforwards. The next largest component is reclamation costs. We have previously~~ determined that we ~~are an indefinite AMT taxpayer, resulting in additional valuation allowance primarily related to forecasted utilization~~will not realize all or a portion of ~~regular net operating loss carryforwards and the effect of re-measuring temporary~~our deferred tax assets, ~~using~~we will record or increase a ~~tax rate of 20% which differed from the previous rate of 35%. During the fourth quarter of 2016,~~valuation allowance. Conversely, if it is determined we ~~determined that we were eligible~~will ultimately more likely than not be able to ~~take~~realize all or a different income tax position relating to the timing of deductions for #4 Shaft development costs at Lucky Friday. We filed with the Internal Revenue Service ("IRS") a request for approval to use this method, which was approved in the first quarter of 2017. The change resulted in additional deductions of approximately $203 million and $110 million for regular tax and AMT, respectively, resulting in a current tax benefit of approximately $10.7 million for the reduction in AMT payable for 2016. In addition, this change in tax position substantially changes the timing of additional deductions for these costs for regular tax and AMT relative to our projected life of mine and projected taxable income. These timing changes caused us to change our assessmentportion 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 generate sufficient future taxable income~~ to realize our deferred tax ~~assets, resulting~~assets. For additional information, please see Item 1A - Risk Factors in a valuation allowance decrease and deferred tax benefit of approximately $15.1 million in the first quarter of 2017. At September 30, 2017, we retained a valuation allowance on U.S. deferred tax assets of approximately $66 million, primarily for net operating loss carryforwards.
46
~~Table of Contents~~
Our net Canadian deferred tax liability at September 30, 2017 was $122.7 million, a decrease of $0.2 million from the $122.9 million net deferred tax liability at December 31, 2016. The deferred tax liability is primarily related to the excess of the carrying value of the mineral resource assets over the tax bases of those assets for Canadian tax reporting.
We had no Mexican deferred tax asset or liability at September 30, 2017 or December 31, 2016. We expect to have unremitted earnings in Mexico by the end 2017; however, we anticipate being able to fully offset any U.S. tax impact of repatriating any Mexican earnings with foreign tax credits that are available for use under both regular tax and AMT. Accordingly, we estimate the net U.S. income tax impact of unremitted earnings to be zero. A $5.8 million valuation allowance remains on deferred tax assets in foreign jurisdictions.our 2020 10-K.

Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP)
The tables below present reconciliations between the most comparable GAAP measure of cost of sales and other direct production costs and depreciation, depletion and amortization to the non-GAAP measures of (i) Cash Cost, Before By-product Credits, (ii) Cash Cost, After By-product Credits, (iii) AISC, Before By-product Credits and (iv) AISC, After By-product Credits for our operations at the Greens Creek, Lucky Friday, San Sebastian, ~~and~~ Casa Berardi and Nevada Operations units and for the Company for the ~~three- and nine-month~~three-month periods ended ~~September~~ ~~30, 2017~~March 31, 2021 and ~~2016.~~2020.

Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce are measures developed by precious metals companies (including the Silver Institute ~~and/or~~and the World Gold Council) in an effort to provide a uniform standard for comparison purposes. There can be no assurance, however, that these non-GAAP measures as we report them are the same as those reported by other mining companies.

39
Table of Contents
Cash Cost, After By-product Credits, per Ounce is an important operating statistic that we utilize to measure each mine's operating performance. We ~~have recently started reporting~~use AISC, After By-product Credits, per Ounce ~~which we use~~ as a measure of our mines' net cash flow after costs for exploration, pre-development, reclamation, and sustaining capital. This is similar to the Cash Cost, After By-product Credits, per Ounce non-GAAP measure we report, but also includes on-site exploration, reclamation, and sustaining capital costs. Current GAAP measures used in the mining industry, such as cost of goods sold, do not capture all the expenditures incurred to discover, develop and sustain silver and gold production. Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce also allow us to benchmark the performance of each of our mines versus those of our competitors. As a ~~primary~~ silver and gold mining company, we also use these statistics on an aggregate basis - aggregating the Greens Creek, Lucky Friday and San Sebastian mines - to compare our performance with that of other ~~primary~~ silver mining ~~companies. With regard to~~companies, and aggregating Casa Berardi ~~we use Cash Cost, After By-product Credits, per Gold Ounce~~ and ~~AISC, After By-product Credits, per Gold Ounce to compare its performance~~Nevada Operations for comparison with other gold ~~mines.~~mining companies. Similarly, these statistics are useful in identifying acquisition and investment opportunities as they provide a common tool for measuring the financial performance of other mines with varying geologic, metallurgical and operating characteristics.

Cash Cost, Before By-product Credits and AISC, Before By-product Credits include all direct and indirect operating cash costs related directly to the physical activities of producing metals, including mining, processing and other plant costs, third-party refining expense, on-site general and administrative costs ~~royalties~~ and ~~mining production taxes.~~royalties. AISC, Before By-product Credits for each mine also includes on-site exploration, reclamation, and sustaining capital costs. AISC, Before By-product Credits for our consolidated silver properties also includes corporate costs for general and administrative expense, exploration and sustaining capital projects. By-product credits include revenues earned from all metals other than the primary metal produced at each unit. As depicted in the tables below, by-product credits comprise an essential element of our silver unit cost structure, distinguishing our silver operations due to the polymetallic nature of their orebodies.
47
~~Table of Contents~~

In addition to the uses described above, Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce provide management and investors an indication of operating cash flow, after consideration of the average price received from production. We also use these measurements for the comparative monitoring of performance of our mining operations period-to-period from a cash flow perspective.

The Casa Berardi, Nevada Operations and combined gold properties information below reports Cash Cost, After By-product Credits, per Gold Ounce and AISC, After By-product Credits, per Gold Ounce for the production of gold, ~~its~~their primary product, and by-product revenues earned from silver, which is a by-product at Casa ~~Berardi.~~Berardi and Nevada Operations. Only costs and ounces produced relating to units with the same primary product are combined to represent Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce. Thus, the gold produced at our Casa Berardi ~~unit~~and Nevada Operations units is not included as a by-product credit when calculating Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for the total of Greens Creek, Lucky Friday and San Sebastian, our combined silver properties. Similarly, the silver produced at our other three units is not included as a by-product credit when calculating the gold metrics for Casa ~~Berardi.~~Berardi and Nevada Operations.

48
40
Table of Contents

In thousands (except per ounce amounts)

Three Months Ended September 30, 2017

Three Months Ended March 31, 2021

Greens
Creek

Lucky
Friday⁽²⁾

San
Sebastian

Corporate⁽³⁾

Total
Silver

Casa
Berardi
(Gold)

Total

Greens
Creek

Lucky
Friday⁽²⁾

San
Sebastian⁽³⁾

Corporate⁽⁴⁾

Total
Silver

Cost of sales and other direct production costs and depreciation, depletion and amortization
$ 41,927 — $ 6,680 $ 48,607 $ 48,595 $ 97,202
Total cost of sales
$ 53,181 $ 22,794 $ 94 $ 76,069
Depreciation, depletion and amortization
(12,607
)
— (641
)
(13,248
)
(15,596
)
(28,844
)
(14,821 ) (6,336 ) — (21,157 )
Treatment costs
12,067 440 422 12,929 682 13,611 10,541 4,978 — 15,519
Change in product inventory
7,675 1,960 (627
)
9,008 (288
)
8,720 401 (93 ) — 308
Reclamation and other costs
(394
)
18 (494
)
(870
)
(124
)
(994
)
(261 ) (233 ) (94 ) (588 )
Cash Cost, Before By-product Credits ⁽¹⁾
48,668 2,418 5,340 56,426 33,269 89,695 49,041 21,110 — 70,151
Reclamation and other costs
666 38 117 821 123 944 848 264 — 1,112
Exploration
1,944 (2
)
1,495 477 3,914 1,161 5,075 123 — — 435 558
Sustaining capital
8,210 119 402 1,105 9,836 13,775 23,611 4,892 5,454 — — 10,346
General and administrative
9,529 9,529 9,529 8,007 8,007
AISC, Before By-product Credits ⁽¹⁾
59,488 2,573 7,354 80,526 48,328 128,854 54,904 26,828 — 90,174
By-product credits:

Zinc
(27,046
)
(293
)
(27,339
)
(27,339
)
(22,767 ) (4,753 ) — (27,520 )
Gold
(13,907
)
(8,088
)
(21,995
)
(21,995
)
(20,996 ) — — (20,996 )
Lead
(8,067
)
(1,102
)
(9,169
)
(9,169
)
(7,020 ) (9,775 ) — (16,795 )
Silver
(161
)
(161
)
Total By-product credits
(49,020
)
(1,395
)
(8,088
)
(58,503
)
(161
)
(58,664
)
(50,783 ) (14,528 ) — (65,311 )
Cash Cost, After By-product Credits
$ (352
)
$ 1,023 $ (2,748
)
$ (2,077
)
$ 33,108 $ 31,031 $ (1,742 ) $ 6,582 $ — $ 4,840
AISC, After By-product Credits
$ 10,468 $ 1,178 $ (734
)
$ 22,023 $ 48,167 $ 70,190 $ 4,121 $ 12,300 $ — $ 24,863
Divided by ounces produced
2,344 88 880 3,312 44 2,585 864 — 3,449
Cash Cost, Before By-product Credits, per Ounce
$ 20.75 $ 27.44 $ 6.07 $ 17.03 $ 753.70 $ 18.98 $ 24.43 $ — $ 20.34
By-product credits per ounce
(20.90
)
(15.84
)
(9.19
)
(17.66
)
(3.65
)
(19.65 ) (16.81 ) — (18.94 )
Cash Cost, After By-product Credits, per Ounce
$ (0.15
)
$ 11.60 $ (3.12
)
$ (0.63
)
$ 750.05 $ (0.67 ) $ 7.62 $ — $ 1.40
AISC, Before By-product Credits, per Ounce
$ 25.37 $ 29.21 $ 8.36 $ 24.31 $ 1,094.86 $ 21.24 $ 31.05 $ — $ 26.15
By-product credits per ounce
(20.90
)
(15.84
)
(9.19
)
(17.66
)
(3.65
)
(19.65 ) (16.81 ) — (18.94 )
AISC, After By-product Credits, per Ounce
$ 4.47 $ 13.37 $ (0.83
)
$ 6.65 $ 1,091.21 $ 1.59 $ 14.24 $ — $ 7.21

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Table of Contents

In thousands (except per ounce amounts)

Three Months Ended September 30, 2016

Three Months Ended March 31, 2021

Greens
Creek

Lucky
Friday⁽²⁾

San
Sebastian

Corporate⁽³⁾

Total
Silver

Casa
Berardi
(Gold)

Total

Casa
Berardi ⁽⁵⁾

Nevada
Operations ⁽⁶⁾

Total
Gold

Cost of sales and other direct production costs and depreciation, depletion and amortization
$ 58,397 $ 19,484 $ 6,532 $ 84,413 $ 36,295 $ 120,708
Total cost of sales
$ 62,516 $ 7,455 $ 69,971
Depreciation, depletion and amortization
(16,091
)
(2,946
)
(677
)
(19,714
)
(10,465
)
(30,179
)
(25,541 ) (2,633 ) (28,174 )
Treatment costs
15,114 5,211 348 20,673 218 20,891 714 11 725
Change in product inventory
(10,407
)
(46
)
930 (9,523
)
3,460 (6,063
)
(47 ) (1,084 ) (1,131 )
Reclamation and other costs
2,273 (171
)
(140
)
1,962 (115
)
1,847 (208 ) (27 ) (235 )
Cash costs excluded
— (115 ) (115 )
Cash Cost, Before By-product Credits ⁽¹⁾
49,286 21,532 6,993 77,811 29,393 107,204 37,434 3,607 41,041
Reclamation and other costs
682 165 42 889 117 1,006 208 27 235
Exploration
349 — 1,051 421 1,821 655 2,476 907 — 907
Sustaining capital
14,162 9,725 506 76 24,469 16,078 40,547 7,758 89 7,847
General and administrative
11,155 11,155 11,155 —
AISC, Before By-product Credits ⁽¹⁾
64,479 31,422 8,592 116,145 46,243 162,388 46,307 3,723 50,030
By-product credits:

Zinc
(17,152
)
(4,201
)
(21,353
)
(21,353
)
Gold
(13,807
)
(10,922
)
(24,729
)
(24,729
)
Lead
(6,577
)
(9,284
)
(15,861
)
(15,861
)
Silver
(162
)
(162
)
(278 ) — (278 )
Total By-product credits
(37,536
)
(13,485
)
(10,922
)
(61,943
)
(162
)
(62,105
)
(278 ) — (278 )
Cash Cost, After By-product Credits
$ 11,750 $ 8,047 $ (3,929
)
$ 15,868 $ 29,231 $ 45,099 $ 37,156 $ 3,607 $ 40,763
AISC, After By-product Credits
$ 26,943 $ 17,937 $ (2,330
)
$ 54,202 $ 46,081 $ 100,283 $ 46,029 $ 3,723 $ 49,752
Divided by ounces produced
2,445 887 976 4,308 32 36 3 39
Cash Cost, Before By-product Credits, per Ounce
$ 20.15 $ 24.26 $ 7.16 $ 18.06 $ 920.00 $ 1,035 $ 1,416 $ 1,059
By-product credits per ounce
(15.35
)
(15.19
)
(11.19
)
(14.38
)
(5.07
)
(8 ) — (7 )
Cash Cost, After By-product Credits, per Ounce
$ 4.80 $ 9.07 $ (4.03
)
$ 3.68 $ 914.93 $ 1,027 $ 1,416 $ 1,052
AISC, Before By-product Credits, per Ounce
$ 26.37 $ 35.41 $ 8.80 $ 26.96 $ 1,447.40 $ 1,280 $ 1,461 $ 1,291
By-product credits per ounce
(15.35
)
(15.19
)
(11.19
)
(14.38
)
(5.07
)
(8 ) — (7 )
AISC, After By-product Credits, per Ounce
$ 11.02 $ 20.22 $ (2.39
)
$ 12.58 $ 1,442.33 $ 1,272 $ 1,461 $ 1,284

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Table of Contents

In thousands (except per ounce amounts)

Nine Months Ended September 30, 2017

Greens
Creek

Lucky
Friday⁽²⁾

San
Sebastian

Corporate⁽³⁾

Total
Silver

Casa
Berardi
(Gold)

Total

Cost of sales and other direct production costs and depreciation, depletion and amortization
$ 140,241 $ 14,542 $ 18,377 $ 173,160 $ 134,742 $ 307,902
Depreciation, depletion and amortization
(39,442
)
(2,433
)
(2,036
)
(43,911
)
(39,454
)
(83,365
)
Treatment costs
37,621 4,257 906 42,784 1,774 44,558
Change in product inventory
5,398 1,811 (192
)
7,017 881 7,898
Reclamation and other costs
(1,474
)
(163
)
(1,089
)
(2,726
)
(354
)
(3,080
)
Cash Cost, Before By-product Credits ⁽¹⁾
142,344 18,014 15,966 176,324 97,589 273,913
Reclamation and other costs
1,999 217 351 2,567 353 2,920
Exploration
3,339 (1
)
4,984 1,307 9,629 3,029 12,658
Sustaining capital
24,895 4,109 2,379 2,275 33,658 38,245 71,903
General and administrative
29,044 29,044 29,044
AISC, Before By-product Credits ⁽¹⁾
172,577 22,339 23,680 251,222 139,216 390,438
By-product credits:

Zinc
(72,472
)
(4,353
)
(76,825
)
(76,825
)
Gold
(42,675
)
(24,032
)
(66,707
)
(66,707
)
Lead
(22,696
)
(8,599
)
(31,295
)
(31,295
)
Silver
(450
)
(450
)
Total By-product credits
(137,843
)
(12,952
)
(24,032
)
(174,827
)
(450
)
(175,277
)
Cash Cost, After By-product Credits
$ 4,501 $ 5,062 $ (8,066
)
$ 1,497 $ 97,139 $ 98,636
AISC, After By-product Credits
$ 34,734 $ 9,387 $ (352
)
$ 76,395 $ 138,766 $ 215,161
Divided by ounces produced
6,206 769 2,498 9,473 113
Cash Cost, Before By-product Credits, per Ounce
$ 22.94 $ 23.42 $ 6.39 $ 18.62 $ 862.02
By-product credits per ounce
(22.21
)
(16.84
)
(9.62
)
(18.46
)
(3.97
)

Cash Cost, After By-product Credits, per Ounce
$ 0.73 $ 6.58 $ (3.23
)
$ 0.16 $ 858.05
AISC, Before By-product Credits, per Ounce
$ 27.81 $ 29.05 $ 9.48 $ 26.52 $ 1,229.72
By-product credits per ounce
(22.21
)
(16.84
)
(9.62
)
(18.46
)
(3.97
)

AISC, After By-product Credits, per Ounce
$ 5.60 $ 12.21 $ (0.14
)
$ 8.06 $ 1,225.75
In thousands (except per ounce amounts)

Three Months Ended March 31, 2021

Total Silver

Total Gold

Total

Total cost of sales
$ 76,069 $ 69,971 $ 146,040
Depreciation, depletion and amortization
(21,157 ) (28,174 ) (49,331 )
Treatment costs
15,519 725 16,244
Change in product inventory
308 (1,131 ) (823 )
Reclamation and other costs
(588 ) (235 ) (823 )
Cash costs excluded
— (115 ) (115 )
Cash Cost, Before By-product Credits ⁽¹⁾
70,151 41,041 111,192
Reclamation and other costs
1,112 235 1,347
Exploration
558 907 1,465
Sustaining capital
10,346 7,847 18,193
General and administrative
8,007 — 8,007
AISC, Before By-product Credits ⁽¹⁾
90,174 50,030 140,204
By-product credits:

Zinc
(27,520 ) — (27,520 )
Gold
(20,996 ) — (20,996 )
Lead
(16,795 ) — (16,795 )
Silver
(278 ) (278 )
Total By-product credits
(65,311 ) (278 ) (65,589 )
Cash Cost, After By-product Credits
$ 4,840 $ 40,763 $ 45,603
AISC, After By-product Credits
$ 24,863 $ 49,752 $ 74,615
Divided by ounces produced
3,449 39
Cash Cost, Before By-product Credits, per Ounce
$ 20.34 $ 1,059
By-product credits per ounce
(18.94 ) (7 )
Cash Cost, After By-product Credits, per Ounce
$ 1.40 $ 1,052
AISC, Before By-product Credits, per Ounce
$ 26.15 $ 1,291
By-product credits per ounce
(18.94 ) (7 )
AISC, After By-product Credits, per Ounce
$ 7.21 $ 1,284

51
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Table of Contents

In thousands (except per ounce amounts)

Nine Months Ended September 30, 2016

Three Months Ended March 31, 2020

Greens
Creek

Lucky
Friday⁽²⁾

San
Sebastian

Corporate⁽³⁾

Total
Silver

Casa
Berardi
(Gold)

Total

Greens
Creek

Lucky
Friday⁽²⁾

San
Sebastian

Corporate⁽⁴⁾

Total
Silver

Cost of sales and other direct production costs and depreciation, depletion and amortization
$ 146,984 $ 56,696 $ 23,435 $ 227,115 $ 106,639 $ 333,754
Total cost of sales
$ 49,182 $ 2,832 $ 8,300 $ 60,314
Depreciation, depletion and amortization
(40,746
)
(8,775
)
(2,508
)
(52,029
)
(32,563
)
(84,592
)
(12,429 ) (302 ) (1,473 ) (14,204 )
Treatment costs
46,069 15,323 1,193 62,585 627 63,212 15,826 432 104 16,362
Change in product inventory
(6,083
)
(1,102
)
1,743 (5,442
)
4,212 (1,230
)
2,870 914 253 4,037
Reclamation and other costs
348 (556
)
(1,583
)
(1,791
)
(344
)
(2,135
)
319 — (361 ) (42 )
Exclusion of Lucky Friday costs
— (3,876 ) — (3,876 )
Cash Cost, Before By-product Credits ⁽¹⁾
146,572 61,586 22,280 230,438 78,571 309,009 55,768 — 6,823 62,591
Reclamation and other costs
2,045 495 126 2,666 345 3,011 788 — 114 902
Exploration
1,368 — 2,349 1,286 5,003 2,280 7,283 4 — 767 350 1,121
Sustaining capital
35,199 32,203 1,494 486 69,382 48,860 118,242 5,510 — 56 — 5,566
General and administrative
31,728 31,728 31,728 8,939 8,939
AISC, Before By-product Credits ⁽¹⁾
185,184 94,284 26,249 339,217 130,056 469,273 62,070 — 7,760 79,119
By-product credits:

Zinc
(52,104
)
(10,685
)
(62,789
)
(62,789
)
(16,026 ) — — (16,026 )
Gold
(42,017
)
(33,961
)
(75,978
)
(75,978
)
(17,197 ) — (4,429 ) (21,626 )
Lead
(19,598
)
(25,485
)
(45,083
)
(45,083
)
(6,926 ) — — (6,926 )
Silver
(409
)
(409
)
Total By-product credits
(113,719
)
(36,170
)
(33,961
)
(183,850
)
(409
)
(184,259
)
(40,149 ) — (4,429 ) (44,578 )
Cash Cost, After By-product Credits
$ 32,853 $ 25,416 $ (11,681
)
$ 46,588 $ 78,162 $ 124,750 $ 15,619 $ — $ 2,394 $ 18,013
AISC, After By-product Credits
$ 71,465 $ 58,114 $ (7,712
)
$ 155,367 $ 129,647 $ 285,014 $ 21,921 $ — $ 3,331 $ 34,541
Divided by ounces produced
7,021 2,722 3,434 13,177 104 2,776 — 347 3,123
Cash Cost, Before By-product Credits, per Ounce
$ 20.88 $ 22.63 $ 6.49 $ 17.49 $ 753.45 $ 20.09 $ — $ 19.67 $ 20.04
By-product credits per ounce
(16.20
)
(13.29
)
(9.89
)
(13.95
)
(3.92
)
(14.46 ) — (12.76 ) (14.27 )
Cash Cost, After By-product Credits, per Ounce
$ 4.68 $ 9.34 $ (3.40
)
$ 3.54 $ 749.53 $ 5.63 $ — $ 6.91 $ 5.77
AISC, Before By-product Credits, per Ounce
$ 26.38 $ 34.64 $ 7.64 $ 25.74 $ 1,247.15 $ 22.36 $ — $ 22.35 $ 25.33
By-product credits per ounce
(16.20
)
(13.29
)
(9.89
)
(13.95
)
(3.92
)
(14.46 ) — (12.76 ) (14.27 )
AISC, After By-product Credits, per Ounce
$ 10.18 $ 21.35 $ (2.25
)
$ 11.79 $ 1,243.23 $ 7.90 $ — $ 9.59 11.06
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Table of Contents
In thousands (except per ounce amounts)

Three Months Ended March 31,
2020

Casa
Berardi

Nevada
Operations

Total
Gold

Total cost of sales
$ 48,325 $ 16,914 $ 65,239
Depreciation, depletion and amortization
(16,397 ) (9,065 ) (25,462 )
Treatment costs
574 26 600
Change in product inventory
1,608 5,280 6,888
Reclamation and other costs
(97 ) (326 ) (423 )
Cash Cost, Before By-product Credits ⁽¹⁾
34,013 12,829 46,842
Reclamation and other costs
96 327 423
Exploration
691 85 776
Sustaining capital
8,506 826 9,332
AISC, Before By-product Credits ⁽¹⁾
43,306 14,067 57,373
By-product credits:

Silver
(100 ) (353 ) (453 )
Total By-product credits
(100 ) (353 ) (453 )
Cash Cost, After By-product Credits
$ 33,913 $ 12,476 $ 46,389
AISC, After By-product Credits
$ 43,206 $ 13,714 $ 56,920
Divided by ounces produced
27 17 44
Cash Cost, Before By-product Credits, per Ounce
$ 1,272 $ 756 $ 1,071
By-product credits per ounce
(4 ) (21 ) (10 )
Cash Cost, After By-product Credits, per Ounce
$ 1,268 $ 735 $ 1,061
AISC, Before By-product Credits, per Ounce
$ 1,619 $ 829 $ 1,312
By-product credits per ounce
(4 ) (21 ) (10 )
AISC, After By-product Credits, per Ounce
$ 1,615 $ 808 $ 1,302
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Table of Contents
In thousands (except per ounce amounts)

Three Months Ended March 31, 2020

Total Silver

Total Gold

Total

Total cost of sales
$ 60,314 $ 65,239 $ 125,553
Depreciation, depletion and amortization
(14,204 ) (25,462 ) (39,666 )
Treatment costs
16,362 600 16,962
Change in product inventory
4,037 6,888 10,925
Reclamation and other costs
(42 ) (423 ) (465 )
Exclusion of Lucky Friday costs
(3,876 ) — (3,876 )
Cash Cost, Before By-product Credits ⁽¹⁾
62,591 46,842 109,433
Reclamation and other costs
902 423 1,325
Exploration
1,121 776 1,897
Sustaining capital
5,566 9,332 14,898
General and administrative
8,939 — 8,939
AISC, Before By-product Credits ⁽¹⁾
79,119 57,373 136,492
By-product credits:

Zinc
(16,026 ) — (16,026 )
Gold
(21,626 ) — (21,626 )
Lead
(6,926 ) — (6,926 )
Silver
0 (453 ) (453 )
Total By-product credits
(44,578 ) (453 ) (45,031 )
Cash Cost, After By-product Credits
$ 18,013 $ 46,389 $ 64,402
AISC, After By-product Credits
$ 34,541 $ 56,920 $ 91,461
Divided by ounces produced
3,123 44
Cash Cost, Before By-product Credits, per Ounce
$ 20.04 $ 1,071
By-product credits per ounce
(14.27 ) (10 )
Cash Cost, After By-product Credits, per Ounce
$ 5.77 $ 1,061
AISC, Before By-product Credits, per Ounce
$ 25.33 $ 1,312
By-product credits per ounce
(14.27 ) (10 )
AISC, After By-product Credits, per Ounce
$ 11.06 $ 1,302

(1)
Includes all direct and indirect operating costs related to the physical activities of producing metals, including mining, processing and other plant costs, third-party refining and marketing expense, on-site general and administrative costs ~~royalties~~ and ~~mining production taxes,~~royalties, before by-product revenues earned from all metals other than the primary metal produced at each unit. AISC, Before By-product Credits also includes on-site exploration, reclamation, and sustaining capital costs.

(2)
The unionized employees at Lucky Friday ~~have been~~were on strike ~~since~~from March ~~13,~~ 2017 until January 2020, and production at Lucky Friday ~~has~~had been limited ~~since that time. For~~from the ~~first nine months~~start of ~~2017, costs~~the strike until the ramp-up was substantially completed in the fourth quarter of 2020. Costs related to ~~suspension of full production~~ramp-up activities totaling ~~approximately $11.1~~$6.3 million, along with ~~$3.3~~$1.8 million in non-cash depreciation expense, ~~for that period,~~in the first quarter of 2020 have been excluded from the calculations of cost of sales and other direct production costs and depreciation, depletion and amortization, Cash Cost, Before By-product Credits, Cash Cost, After By-product Credits, AISC, Before By-product Credits, ~~Cash Cost,~~and AISC, After By-product ~~Credits, AISC, Before By-product Credits, and AISC, After By-product~~ Credits.

(3)
Mining at San Sebastian was completed in the third quarter of 2020, and milling was completed in the fourth quarter of 2020. Suspension-related costs at San Sebastian totaling $0.7 million for the first quarter of 2021 are reported in a separate line item on our consolidated statements of operations and excluded from the calculations of cost of sales and other direct production costs and depreciation, depletion and amortization, Cash Cost, Before By-product Credits, Cash Cost, After By-product Credits, AISC, Before By-product Credits, ~~for our consolidated silver properties includes corporate costs for general~~ and ~~administrative expense, exploration and sustaining capital.~~AISC, After By-product Credits.

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Table of Contents
(4)
AISC, Before By-product Credits for our consolidated silver properties includes corporate costs for general and administrative expense, exploration and sustaining capital.
(5)
In late March 2020, the Government of Quebec ordered the mining industry to reduce to minimum operations as part of the fight against the COVID-19 virus, causing us to suspend our Casa Berardi operations from approximately March 24 until April 15, when limited mining operations resumed, resulting in reduced mill throughput. Suspension-related costs totaling $0.9 million for the first quarter of 2020 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, Cash Cost, Before By-product Credits, Cash Cost, After By-product Credits, AISC, Before By-product Credits, and AISC, After By-product Credits.
(6)
Production was suspended at the Hollister and Midas mines and Aurora mill in the latter part of 2019. Suspension-related costs at Nevada Operations totaling $3.6 million and $4.0 million for the first quarters of 2021 and 2020, respectively, 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, Cash Cost, Before By-product Credits, Cash Cost, After By-product Credits, AISC, Before By-product Credits, and AISC, After By-product Credits.

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 shareholders. Consistent with that strategy, we aim to reduce our net debt and maintain sufficient liquidity to fund debt service costs, operations, capital development and exploration projects, while returning cash to stockholders through dividends and potential share repurchases.
At March 31, 2021, we had $139.8 million in cash and cash equivalents, of which $16.8 million was held in foreign subsidiaries' local currency denominated accounts readily convertible to U.S. dollars that, if repatriated, may be subject to withholding taxes. We expect that there would be no additional tax burden upon repatriation after considering the cash cost associated with the withholding 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.
Our liquid assets include (in millions):

September 30, 2017

December 31, 2016

March 31, 2021

December 31, 2020

Cash and cash equivalents held in U.S. dollars
$ 146.4 $ 156.1 $ 123.0 $ 116.4
Cash and cash equivalents held in foreign currency
26.5 13.7 16.8 13.4
Total cash and cash equivalents
172.9 169.8 139.8 129.8
Marketable debt securities - current
33.0 29.1
Marketable equity securities - non-current
7.1 5.0
Marketable equity securities, current and non-current
11.7 19.3
Total cash, cash equivalents and investments
$ 213.0 $ 203.9 $ 151.5 $ 149.1

Cash and cash equivalents increased by ~~$3.1~~$10.0 million in the first ~~nine~~three months of ~~2017,~~2021 as ~~discussed below.~~a result of operational performance. Cash held in foreign currencies represents balances in ~~Canadian dollars~~CAD and Mexican pesos ("MXN"), with ~~the $12.8~~a $3.4 million increase in the first ~~nine months~~quarter of ~~2017~~2021 resulting from ~~increases~~an increase in ~~both currencies~~CAD held. ~~Current marketable debt securities increased by $3.9 million (discussed below) and non-current~~The value of marketable equity securities ~~increased~~decreased by ~~$2.1 million (see~~ ~~Note 2~~ of ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~ ~~for more information).~~$7.6 million.

~~As discussed in~~ ~~Note 9~~ of ~~Notes to Condensed Consolidated Financial Statements (Unaudited),~~ ~~on April 12, 2013,~~On February 19, 2020, we completed an offering of Senior Notes in the total principal amount of ~~US$500~~USD$475 million ~~which have a total principal balance of $506.5 million as of September 30, 2017~~. The Senior Notes are due ~~May 1, 2021~~February 15, 2028 and bear interest at a rate of ~~6.875%~~7.25% per year from the most recent payment date to which interest has been paid or provided for. ~~Interest on~~In July 2020, we agreed to issue our Series 2020-A Senior Notes due July 9, 2025 (the “IQ Notes”) for CAD$50 million (approximately USD$36.8 million at the ~~Senior Notes~~time of the transaction) in aggregate principal, which mature in July 2025 and bear interest at a rate of 6.515% per year. We also have a $250 million revolving credit facility, with interest is payable on ~~May 1~~amounts drawn at an annual rate of between 2.25% and ~~November 1~~4.00% over the London Interbank Offered Rate, or between 1.25% and 3.00% over an alternative base rate. There was no amount outstanding under the revolving credit facility as of ~~each year, commencing November 1, 2013, and we have made all interest payments payable to date.~~
InMarch 31, 2021, with the ~~third quarter~~exception of ~~2015, we made a development decision to mine near surface, high grade portions~~$20.3 million utilized for letters of ~~the silver and gold deposits at our San Sebastian project in Mexico and commenced ore production at the end of 2015.~~ As a result, San Sebastian has generated positive cash flows since the start of production there. In January 2017, we initiated work to develop and rehabilitate underground access which, upon completion, is expected to allow us to mine deeper portions of the deposits at San Sebastian. We currently anticipate San Sebastian will continue to generate positive cash flows until early or mid-2020. However, our costs could change, and our ability to generate cash flow at San Sebastian could be impacted by changes in precious metals prices or other factors, and there can be no assurance that we will be able to develop and operate San Sebastian as anticipated.
~~As further discussed in the~~ ~~Lucky Friday Segment~~ section above, the union employees at Lucky Friday have been on strike since March 13, 2017. Production at Lucky Friday was suspended from the start of the strike until July 2017, with limited production resuming at that time. We cannot predict how long the strike will last or whether an agreement will be reached. We expect to incur cash expenditures of approximately $1.0 million to $1.5 million per month to advance engineering and infrastructure for the restart of full production, in addition to costs related to limited interim production. As a result of the strike or other related events, operations at Lucky Friday could continue to be disrupted, which could adversely affect our financial condition and results of operations.
~~As discussed in~~ credit. See Note 87 of Notes to Condensed Consolidated Financial Statements (Unaudited)~~, in February 2016 we entered into an equity distribution agreement under which we may issue and sell shares of~~for more information on our common stock from time to time having an aggregate offering price of up to $75 million, with the net proceeds available for general corporate purposes. Whether or not we engage in sales from time to time may depend on a variety of factors, including share price, our cash resources, customary black-out restrictions, and whether we have any material inside information, and the agreement can be terminated by us at any time. As of September 30, 2017, we had sold 4,608,847 shares through the at-the-market program for net proceeds of $17.7 million, including 1,828,760 shares sold in the first nine months of 2017 for total proceeds of approximately $9.6 million. In July 2017, we used $5.7 million of the proceeds from shares sold in the second quarter of 2017 to fund contributions to our defined benefit pension plans.debt arrangements.

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We continue to address the COVID-19 outbreak and face uncertainty related to the potential additional impact it could have on our operations. It is possible that future restrictions at any of our operations could have an adverse impact on operations or financial results, including materially so, beyond 2021. We have taken precautionary measures to mitigate the impact of COVID-19, including implementing revised operational plans. As long as they are required, the revised operational practices could continue to have an adverse impact on our operating results due to deferred production and revenues or additional costs. If required, increasing or prolonged restrictions on our operations could require access to additional sources of liquidity, which may not be available to us. See Item 1A. Risk Factors - Natural disasters, public health crises, political crises (including COVID-19), and other catastrophic events or other events outside of our control may materially and adversely affect our business or financial results and COVID-19 virus pandemic may heighten other risks in our 2020 Form 10-K for information on how restrictions related to COVID-19 have affected some of our operations.

Pursuant to our common stock dividend policy described in Note 810 of Notes to ~~Condensed~~ Consolidated Financial Statements ~~(Unaudited)~~,in our 2020 Form 10-K, our Board of Directors declared and paid dividends on common stock totaling ~~$3.0 million and $2.9~~$4.7 million in the first ~~nine months~~quarter of ~~2017~~2021 and ~~2016, respectively. On November 7, 2017, our Board~~$1.3 million in the first quarter of ~~Directors declared a dividend on common stock totaling $1.0 million payable in December 2017.~~2020. Our dividend policy has a ~~silver-price-linked~~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. During May 2021, our Board of Directors approved an increase in our silver-linked dividend by $0.01 per year and approved a quarterly silver-linked dividend of $0.075 based on the first quarter of 2021 realized silver price of $25.66. The table below provides an overview of the augmented silver-linked dividend policy and the increased minimum dividends.
Quarterly Average Realized Silver Price per Ounce

Quarterly Silver-Linked Dividend per Share

Annualized Silver-Linked Dividend per Share

Annualized Minimum Dividend

Annualized Dividends per Share: Silver-Linked and Minimum

$25 $0.0075 $0.03 $0.015 $0.045
$30 $0.0125 $0.05 $0.015 $0.065
$35 $0.0225 $0.09 $0.015 $0.105
$40 $0.0325 $0.13 $0.015 $0.145
$45 $0.0425 $0.17 $0.015 $0.185
$50 $0.0525 $0.21 $0.015 $0.225
The declaration and payment of dividends on 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.

~~On May 8, 2012, we announced that~~Pursuant to our ~~board of directors approved a~~ stock repurchase ~~program.~~ ~~Under the~~ program described in Note 10 of Notes to Consolidated Financial Statements in our 2020 Form 10-K, we are authorized to repurchase up to 20 million shares of our outstanding common stock from time to time in open market or privately negotiated transactions, depending on prevailing market conditions and other factors. The repurchase program may be modified, suspended or discontinued by us at any time. Whether or not we engage in repurchases from time to time may depend on a variety of factors, including not only price and cash resources, but customary black-out restrictions, whether we have any material inside information, limitations on share repurchases or cash usage that may be imposed by our credit agreement or in connection with issuances of securities, alternative uses for cash, applicable law, and other investment opportunities from time to time. As of ~~September 30, 2017,~~March 31, 2021 and December 31, 2020, 934,100 shares ~~have~~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 3, 2017,~~May 4, 2021, was ~~$4.45~~$6.25 per share.
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 share price, our cash resources, customary black-out restrictions, and whether we have any material inside information. The agreement can be terminated by us at any time. Any shares issued under the equity distribution agreement are registered under the Securities Act of 1933, as amended, pursuant to a shelf registration statement on Form S-3. No shares have been sold under the agreement as of March 31, 2021.

We may defer some capital investment and/or exploration and pre-development activities, engage in asset sales or secure additional capital if necessary to maintain liquidity. We also may pursue additional acquisition opportunities, which could require additional equity issuances or other forms of financing. There can be no assurance that such financing will be available to us.

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As a result of our current cash balances, the performance of our current and expected operations, current metals prices, proceeds from potential at-the-market sales of common stock, and availability of ~~approximately $97 million of~~ our revolving credit facility, we believe ~~our cash, cash equivalents, investments, projected cash from operations, and availability of financing, if needed,~~we will be ~~adequate~~able to meet our obligations and other potential cash requirements during the next 12 ~~months.~~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 revolving credit facility; deferral of revenues, care-and-maintenance and other costs related to addressing the impacts of COVID-19 on our operations; capital expenditures at our ~~operations,~~operations; potential acquisitions of other mining companies or ~~properties,~~properties; regulatory ~~matters, litigation,~~matters; litigation; potential repurchases of our common stock under the program described ~~above,~~above; and payment of dividends on common stock, if declared by our board of directors. We currently estimate a total of approximately $110 million will be spent in 2021 on capital expenditures, ~~will total between $105~~primarily for equipment, infrastructure, and ~~$110 million in 2017,~~development at our mines, including ~~$70.4~~$21.4 million already incurred as of ~~September 30, 2017.~~March 31, 2021. We also estimate ~~combined~~ exploration and pre-development expenditures will total ~~between $25 million and $30~~approximately $38.5 million in ~~2017,~~2021, including ~~$21.7~~$6.7 million already incurred as of ~~September 30, 2017. However, capital, exploration,~~March 31, 2021. Our expenditures for these items and ~~pre-development expenditures~~our related plans for 2021 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 ~~costs (and our~~ ability to estimate ~~future costs),~~revenues and costs, sources of liquidity available to us, including the revolving credit facility, and other factors. A sustained downturn in metals prices, or 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.

Nine Months Ended

September 30,
2017

September 30,
2016

Cash provided by operating activities (in millions)
$ 74.1 $ 173.1
54
~~Table of Contents~~

Three Months Ended

March 31, 2021

March 31, 2020

Cash provided by operating activities (in millions)
$ 37.9 $ 4.9

Cash provided by operating activities in the first ~~nine months~~quarter of ~~2017 decreased~~2021 increased by ~~$99.0~~$33.0 million compared to the ~~same period in 2016~~first quarter of 2020. The increase was due to ~~lower~~a higher net income, ~~as adjusted for non-cash items, resulting primarily~~generated from ~~reduced gross profit at our San Sebastian, Casa Berardi~~higher metal sales volumes and ~~Lucky Friday units. In addition, working capital~~realized prices, and other operating asset and liability changes resulted in a net cash flow decrease of $26.4 million in the first nine months of 2017 compared to a net increase of $11.6 million in the first nine months of 2016. ~~The $38.0 million variance in working capital changes is primarily attributable to (i) estimated income tax payments in Mexico in 2017, (ii) higher~~lower product inventory, due primarily to the timing of shipments at Greens Creek and the strike at Lucky Friday, (iii) lower accruals for incentive compensation, and (iv) reduced accounts payable at Lucky Friday due to completion of the #4 Shaft and the strike. Those factors were partially offset by lower accounts payable and accrued liabilities, the timing of payment of incentive compensation related to prior-year performance and higher accounts receivable ~~also~~ due to the timing of ~~shipments at Greens Creek and~~concentrate shipments. In the ~~strike at Lucky Friday. In addition, in the third~~first quarter of ~~2016,~~2021, we ~~reached a settlement~~made interest payments on our Senior Notes and IQ Notes of $17.2 million and $0.9 million, respectively, In the ~~insurance policy for reclamation at the Troy mine resulting in cash proceeds to us~~first quarter of ~~$16.0~~2020, we made interest payments on our previously-outstanding 2021 Notes, upon their redemption, and revolving credit facility of $13.3 million ~~which was partially offset by payment of $6.0~~and $0.6 million, ~~in August 2016 by one of our subsidiaries for settlement of its liability for response costs at a CERCLA/Superfund site.~~respectively.

Nine Months Ended

September 30,
2017

September 30,
2016

Cash used in investing activities (in millions)
$ (69.2
)
$ (153.3
)

Three Months Ended

March 31, 2021

March 31, 2020

Cash used in investing activities (in millions)
$ (21.4 ) $ (19.7 )

During the first ~~nine months~~quarter of ~~2017,~~2021 we invested ~~$70.4~~$21.4 million in capital expenditures ~~not including $6.4~~compared to $19.9 million in ~~non-cash capital lease additions, a decrease~~the first quarter of ~~$49.8 million compared to~~2020, with the ~~same period in 2016~~variance primarily due to ~~lower costs for (i) the #4 Shaft project, which was completed in January 2017, (ii) construction of the tailings facility at Greens Creek, and (iii) development of the EMCP pit~~increased spending at Casa Berardi.

Three Months Ended

March 31, 2021

March 31, 2020

Cash provided by (used in) financing activities (in millions)
$ (6.8 ) $ 169.8
In the first ~~nine months~~quarter of 2017 and 2016, we purchased bonds having maturities of greater than 90 days and less than 365 days with a cost basis of $35.3 million and $31.9 million, respectively, and bonds valued at $31.2 million and $7.2 million matured during the first nine months of 2017 and 2016, respectively. We purchased marketable equity securities having a cost basis of $1.6 million and $0.9 million during the first nine months of 2017 and 2016, respectively. During the first nine months of 2017,2020, we received ~~$5.6~~$469.5 million in insurance proceeds related collapse of the mill building at the Troy mine in February 2017 due to snow. We recognized a cash outflow for the acquisition of Mines Management, net of cash acquired, of $3.9 million in September 2016. We reduced restricted cash by $1.1 million during the first nine months of 2017 as a result of replacing cash collateral for future reclamation costs with non-cash bonding. During the first nine months of 2016, we incurred an increase in restricted cash of $3.9 million related to the settlement of a CERCLA claim for response costs at a CERCLA/Superfund site by one of our subsidiaries.

Nine Months Ended

September 30,
2017

September 30,
2016

Cash used in financing activities (in millions)
$ (2.8
)
$ (7.8
)
~~During the first nine months of 2017 and 2016, we received $9.6 million and $8.1 million, respectively,~~ in net proceeds from the ~~sale~~issuance of ~~shares~~our Senior Notes and drew $210.0 million on our revolving credit facility, and had debt repayments of $506.5 million for redemption of our 2021 Notes. We had no borrowings or repayments of debt in the first quarter of 2021. We paid cash dividends on our common stock ~~under~~of $4.7 million and $1.3 million in the ~~equity distribution agreement discussed above.~~first quarter of 2021 and 2020, respectively, and cash dividends of $0.1 million on our Series B Preferred Stock during each of those periods. We made repayments on our capital leases of ~~$5.1~~$1.9 million and ~~$6.3 million in the nine-month periods ended September 30, 2017 and 2016, respectively. We also made repayments of debt totaling $0.5 million and $1.8~~$1.3 million in the first ~~nine months~~quarter of ~~2017~~2021 and ~~2016,~~2020, respectively. During the first nine months of 2017 and 2016, we paid cash dividends on our common stock totaling $3.0 million and $2.9 million, respectively, and cash dividends of $0.4 million in each period on our Series B Preferred Stock. We acquired treasury shares for $3.0 million and $4.4 million in the first nine months of 2017 and 2016, respectively, resulting primarily from our employees' elections to utilize net share settlement to satisfy their tax withholding obligations related to incentive compensation paid in stock and vesting of restricted stock units. See ~~Note 8~~ of ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~ ~~for more information.~~
Exchange rate fluctuations between the U.S. dollar and the Canadian dollar and Mexican peso resulted in increases in our cash balance of $1.1 million and $0.6 million, respectively, during the nine months ended September ~~30, 2017 and 2016.~~

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The effect of changes in foreign exchange rates resulted in a $0.2 million increase in cash and cash equivalents in the first quarter of 2021 compared to a decrease of $1.7 million in the first quarter of 2020, with the variance due to strengthening of the CAD and MXN relative to the USD in the 2021 period.

Contractual Obligations, Contingent Liabilities and Commitments

The table below presents our fixed, non-cancelable contractual obligations and commitments primarily related to our Senior Notes, IQ Notes, credit facility, outstanding purchase orders, certain capital expenditures ~~our credit facility~~and lease arrangements as of ~~September 30, 2017~~March 31, 2021 (in thousands):

Payments Due By Period

Less than 1
year

1-3 years

4-5 years

More than
5 years

Total

Purchase obligations ⁽¹⁾
$ 23,100 $ — $ — $ — $ 23,100
Commitment fees ⁽²⁾
500 942 — — 1,442
Contractual obligations ⁽³⁾
471 — — — 471
Capital lease commitments ⁽⁴⁾
6,293 6,548 1,260 — 14,101
Operating lease commitments ⁽⁵⁾
2,993 2,337 1,377 159 6,866
Supplemental executive retirement plan ⁽⁶⁾
444 1,061 1,439 3,730 6,674
Senior Notes ⁽⁷⁾
34,822 69,644 526,813 — 631,279
Total contractual cash obligations
$ 68,623 $ 80,532 $ 530,889 $ 3,889 $ 683,933

Payments Due By Period

Less than 1
year

1-3 years

4-5 years

More than
5 years

Total

Purchase obligations ⁽¹⁾
$ 10,162 $ — $ — $ — $ 10,162
Contractual obligations ⁽²⁾
2,053 — — — 2,053
Credit facility ⁽³⁾
1,722 1,477 — — 3,199
Finance lease commitments ⁽⁴⁾
7,329 8,775 2,076 — 18,180
Operating lease commitments ⁽⁵⁾
3,696 4,708 1,074 2,213 11,691
Supplemental executive retirement plan ⁽⁶⁾
758 1,691 2,575 6,985 12,009
Senior Notes ⁽⁷⁾
34,438 68,875 68,875 539,570 711,758
IQ Notes ⁽⁸⁾
2,499 4,998 41,544 — 49,041
Total contractual cash obligations
$ 62,657 $ 90,524 $ 116,144 $ 548,768 $ 818,093

(1)
Consists of open purchase orders of approximately ~~$20.9~~$2.8 million at the Greens Creek unit, ~~$0.3~~$4.0 million at the Lucky Friday unit, ~~and $1.9~~$0.7 million asat the Casa Berardi unit and $2.7 million at the Nevada Operations unit.

(2)
As of March 31, 2021, we were committed to approximately $2.1 million for various items.
(3)
We have a ~~$100~~$250 million revolving credit agreement under which we are required to pay a standby fee of ~~0.5%~~between 0.5625% and 1.00% per annum on undrawn amounts and interest of between 2.25% and 4.00% over the London Interbank Offered Rate or between 1.25% and 3.00% over an alternative base rate on drawn amounts under the revolving credit agreement. ~~There was no amount due under the revolving~~We had $20.3 million in letters of credit ~~agreement~~outstanding as of ~~September~~ ~~30, 2017, and~~March 31, 2021. The amounts in the ~~amounts~~table above assume no additional amounts will be ~~due during~~drawn in future periods, and include only the ~~agreement's term.~~standby fee on the current undrawn balance. For more information on our credit facility, see Note 97 of Notes to Condensed Consolidated Financial Statements (Unaudited).

~~(3)~~
~~As of September~~ ~~30, 2017, we were committed to approximately $0.5 million for various items at Greens Creek.~~

(4)
Includes scheduled ~~capital~~finance lease payments of ~~$2.9~~$17.5 million, ~~$3.8~~$0.4 million and ~~$7.4~~$0.3 million (including interest), respectively, for equipment at our Greens Creek, ~~Lucky Friday and~~ Casa Berardi ~~units, respectively.~~  ~~These leases have fixed payment terms~~ and ~~contain bargain purchase options at the end of the lease periods (see~~ ~~Note 9~~ of ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~ ~~for more information).~~Nevada Operations units.

(5)
We enter into operating leases in the normal course of business.  Substantially all lease agreements have fixed payment terms based on the passage of time.  Some lease agreements provide us with the option to renew the lease or purchase the leased property.  Our future operating lease obligations would change if we exercised these renewal options and if we entered into additional operating lease arrangements.

(6)
We sponsor defined benefit pension plans covering substantially all U.S. employees and provide certain post-retirement benefits for qualifying retired employees, along with a supplemental executive retirement plan ("SERP"). These amounts represent our estimate of the future ~~funding~~benefit payment requirements for the ~~supplemental executive retirement plan.~~next 10 years for the SERP as of March 31, 2021. However, in January 2021, we contributed $16.8 million in shares of our common stock to the SERP in order to fund future benefit payments. We believe we will have future funding requirements related to our defined benefit pension plans and benefit payment obligations for the SERP beyond 10 years; however, such funding requirements are not fixed in nature and are difficult to estimate, as they involve significant assumptions. See Note 74 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information.

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(7)
On ~~April 12, 2013,~~February 19, 2020, we completed an offering of ~~$500~~$475 million in aggregate principal amount of our Senior Notes due ~~May 1, 2021. See~~ ~~Note 9~~ of ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~ ~~for more information.~~February 15, 2028. The Senior Notes bear interest at a rate of ~~6.875%~~7.25% per year from the original date of issuance or the most recent payment date to which interest has been paid or provided for.  Interest on the Senior Notes is payable on ~~May 1~~February 15 and ~~November 1~~August 15 of each year, commencing November 1, 2013, and we have made all interest payments payable to date. Since the initial offering, we have issued an additional $6.5 million in aggregate principal amount of the Senior Notes to fund obligations under our defined benefit pension plans.August 15, 2020. See Note 7~~and~~ ~~Note 9~~ of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information.

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(8)
On July 9, 2020, we entered into a note purchase agreement pursuant to which we issued our IQ Notes for CAD$50 million (approximately USD$36.8 million at the time of the transaction) in aggregate principal. The IQ Notes were issued at a premium of 103.65%, or CAD$1.8 million, implying an effective annual yield of 5.74% and an aggregate principal amount to be repaid of CAD$48.2 million. The IQ Notes were issued in four equal installments of CAD$12.5 million on July 9, August 9, September 9 and October 9, 2020. The IQ Notes bear interest on amounts outstanding at a rate of 6.515% per year, payable on January 9 and July 9 of each year, commencing January 9, 2021. See Note 7 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information.

We record liabilities for costs associated with mine closure, reclamation of land and other environmental matters.  At ~~September 30, 2017,~~March 31, 2021, our liabilities for these matters totaled ~~$87.3~~$120.3 million. Future expenditures related to closure, reclamation and environmental expenditures at our sites are difficult to estimate, ~~and~~although we anticipate we will incur expenditures relating to these obligations over the next 30 years. For additional information relating to ~~certain of~~ our environmental obligations, see Note 410 of Notes to Condensed Consolidated Financial Statements (Unaudited).

Off-Balance Sheet Arrangements

At ~~September 30, 2017,~~March 31, 2021, we had no existing off-balance sheet arrangements, as defined under SEC regulations, that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that would be material to investors.

~~Critical Accounting Estimates~~Guarantor Subsidiaries

~~Our significant accounting policies~~Presented below are ~~described in~~ ~~Part IV~~, ~~Note 1~~Hecla’s unaudited interim condensed consolidating financial statements as required by Rule 3-10 of ~~Notes to Consolidated Financial Statements~~ ~~in our annual report filed on Form 10-K for the year ended December 31, 2016~~. ~~As described in~~ ~~Note 1~~ Regulation S-X of the ~~annual report, we are required to make estimates~~Securities Exchange Act of 1934, as amended, resulting from the guarantees by certain of Hecla's subsidiaries of the Senior Notes (see Note 7 for more information). The Guarantors consist of the following of Hecla'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 ~~assumptions that affect~~Hecla Quebec, Inc.. We completed the ~~reported amounts and related disclosures~~offering of ~~assets, liabilities, revenue, and expenses. Our estimates are based~~the Senior Notes on February 19, 2020 under our ~~experience and our interpretation of economic, political, regulatory, and other factors that affect our business prospects. Actual results may differ significantly from our estimates.~~
We believe that our most critical accounting estimates are related to future metals prices; obligations for environmental, reclamation, and closure matters; mineral reserves; and accounting for business combinations, as they require us to make assumptions that are highly uncertain at the time the accounting estimates are made and changes in them are reasonably likely to occur from period to period. Management has discussed the development and selection of these critical accounting estimatesshelf registration statement previously filed with the Audit Committee of our Board of Directors, and the Audit Committee has reviewed the disclosures presented below. In addition, there are other items within our financial statements that require estimation, but are not deemed to be critical. However, changes in estimates used in these and other items could have a material impact on our financial statements.
~~Future Metals Prices~~
Metals prices are key components in estimates that determine the valuation of some of our significant assets and liabilities, including properties, plants and equipment, deferred tax assets, and certain accounts receivable. Metals prices are also an important component in the estimation of reserves.  ~~As shown under~~ ~~Part I~~, ~~Item 1A. – Risk Factors~~ in our annual report filed on Form 10-K for the year ended December 31, 2016, metals prices have historically been volatile. Silver demand arises from investment demand, particularly in exchange-traded funds, industrial demand, and consumer demand. Gold demand arises primarily from investment and consumer demand.  Investment demand for silver and gold can be influenced by several factors, including:  the value of the U.S. dollar and other currencies, changing U.S. budget deficits, widening availability of exchange-traded funds, interest rate levels, the health of credit markets, and inflationary expectations.  Uncertainty related to the political environment in the U.S., Britain's exit from the European Union and a global economic recovery, including recent uncertainty in China, could result in continued investment demand for precious metals.  Industrial demand for silver is closely linked to world Gross Domestic Product growth and industrial fabrication levels, as it is difficult to substitute for silver in industrial fabrication.  Consumer demand is driven significantly by demand for jewelry and other retail products. We believe that long-term industrial and economic trends, including urbanization and growth of the middle class in countries such as China and India, will result in continued consumer demand for silver and gold and industrial demand for silver.  However, China has recently experienced a lower rate of economic growth which could continue in the near term. There can be no assurance whether these trends will continue or how they will impact prices of the metals we produce. In the past, we have recorded impairments to our asset carrying value because of low prices, and we can offer no assurance that prices will either remain at their current levels or increase. SEC.

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~~Processes supporting valuation~~The unaudited interim condensed consolidating financial statements below have been prepared from our financial information on the same basis of ~~our assets and liabilities that~~accounting as the unaudited interim condensed consolidated financial statements set forth elsewhere in this report. Investments in the subsidiaries are most significantly affected by prices include analysis of asset carrying values, depreciation, reserves, and deferred income taxes. On at least an annual basis - and more frequently if circumstances warrant - we examine our depreciation rates, reserve estimates, andaccounted for under the ~~valuation allowances on our deferred tax assets. We examine~~equity method. Accordingly, the ~~carrying values of our assets as changes in facts and circumstances warrant.~~  ~~In our evaluation of carrying values and deferred taxes, we apply several pricing views~~entries necessary to ~~our forecasting model, including current prices, analyst price estimates, forward-curve prices, and historical prices (see~~ ~~Mineral Reserves~~~~, below, regarding prices used for reserve estimates). Using applicable accounting guidance~~consolidate Hecla, the Guarantors, and our ~~view~~non-guarantor subsidiaries are reflected in the intercompany eliminations column. In the course of ~~metals markets,~~preparing consolidated financial statements, we ~~use~~eliminate the ~~probability-weighted average~~effects of various transactions conducted between Hecla and its subsidiaries and among the subsidiaries. While valid at an individual subsidiary level, such activities are eliminated in consolidation because, when taken as a whole, they do not represent business activity with third-party customers, vendors, and other parties. Examples of such eliminations include the following:
•
Investments in subsidiaries. The acquisition of a company results in an investment in debt or equity capital on the records of the parent company and a contribution to debt or equity capital on the records of the subsidiary. Such investments and capital contributions are eliminated in consolidation.
•
Capital contributions. Certain of Hecla's subsidiaries do not generate cash flow, either at all or that is sufficient to meet their capital needs, and their cash requirements are routinely met with inter-company advances from their parent companies. Generally on an annual basis, when not otherwise intended as debt, the boards of directors of such parent companies declare contributions of capital to their subsidiary companies, which increase the parents' investment and the subsidiaries' additional paid-in capital. In consolidation, investments in subsidiaries and related additional paid-in capital are eliminated.
•
Debt.  At times, inter-company debt agreements have been established between certain of Hecla's subsidiaries and their parents. The related debt liability and receivable balances, accrued interest expense (if any) and income activity (if any), and payments of principal and accrued interest amounts (if any) by the subsidiary companies to their parents are eliminated in consolidation.
•
Dividends.  Certain of Hecla's subsidiaries which generate cash flow routinely provide cash to their parent companies through inter-company transfers. On at least an annual basis, the boards of directors of such subsidiary companies declare dividends to their parent companies, which reduces the subsidiaries' retained earnings and increases the parents' dividend income. In consolidation, such activity is eliminated.
•
Deferred taxes. Our ability to realize deferred tax assets and liabilities is considered for two consolidated tax groups of subsidiaries within the United States: The Nevada U.S. Group and the Hecla U.S. Group. Within each tax group, all subsidiaries' estimated future taxable income contributes to the ability of their tax group to realize all such assets and liabilities. However, when Hecla's subsidiaries are viewed independently, we use the separate return method to assess the realizability of each subsidiary's deferred tax assets and whether a valuation allowance is required against such deferred tax assets. In some instances, a parent company or subsidiary may possess deferred tax assets whose realization depends on the future taxable incomes of other subsidiaries on a consolidated-return basis, but would not be considered realizable if such parent or subsidiary filed on a separate stand-alone basis. In such a situation, a valuation allowance is assessed on that subsidiary's deferred tax assets, with the resulting adjustment reported in the eliminations column of the guarantor and parent's financial statements, as is the case in the unaudited interim financial statements set forth below. The separate return method can result in significant eliminations of deferred tax assets and liabilities and related income tax provisions and benefits. Non-current deferred tax asset balances are included in other non-current assets on the consolidating balance sheets and make up a large portion of that item, particularly for the guarantor balances.
Separate financial statements of the ~~various methods~~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 determine whether the values of our assets are fairly stated, and to determine the level of valuation allowances, if any, on our deferred tax assets.  In addition, estimates of future metals prices are usedbe a borrower as defined in the ~~valuation of certain assets in the determination~~indenture; and (5) upon legal or covenant defeasance or satisfaction and discharge of the ~~purchase price allocations for our acquisitions (see~~ ~~Business Combinations~~ ~~below).~~indenture.
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Unaudited Interim Condensed Consolidating Balance Sheets

As of March 31, 2021

Parent

Guarantors

Non-
Guarantors

Eliminations

Consolidated

(in thousands)

Assets

Cash and cash equivalents
$ 95,223 $ 16,876 $ 27,651 $ — $ 139,750
Other current assets
7,378 149,096 1,763 (70 ) 158,167
Properties, plants, equipment and mineral interests - net
1,913 2,310,363 8,271 — 2,320,547
Intercompany receivable (payable)
(139,294 ) (367,504 ) 220,389 286,409 —
Investments in subsidiaries
1,768,493 — — (1,768,493 ) —
Other non-current assets
306,995 20,305 (121,813 ) (168,874 ) 36,613
Total assets
$ 2,040,708 $ 2,129,136 $ 136,261 $ (1,651,028 ) $ 2,655,077
Liabilities and Stockholders' Equity

Current liabilities
$ (233,794 ) $ 184,713 $ 5,705 $ 152,494 $ 109,118
Long-term debt
507,992 17,088 170 — 525,250
Non-current portion of accrued reclamation
— 107,055 6,616 — 113,671
Non-current deferred tax liability
15,384 168,865 — (35,029 ) 149,220
Other non-current liabilities
26,251 5,992 700 — 32,943
Stockholders' equity
1,724,875 1,645,423 �� 123,070 (1,768,493 ) 1,724,875
Total liabilities and stockholders' equity
$ 2,040,708 $ 2,129,136 $ 136,261 $ (1,651,028 ) $ 2,655,077
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Unaudited Interim Condensed Consolidating Statements of Operations

Three Months Ended March 31, 2021

Parent

Guarantors

Non-
Guarantors

Eliminations

Consolidated

(in thousands)

Sales
$ 2,846 $ 207,833 $ 173 $ — $ 210,852
Cost of sales
559 (97,160 ) (108 ) — (96,709 )
Depreciation, depletion and amortization
— (49,331 ) — — (49,331 )
General and administrative
(3,113 ) (4,779 ) (115 ) — (8,007 )
Exploration and pre-development
— (4,892 ) (1,798 ) — (6,690 )
Gain on derivative contracts
473 — — — 473
Equity in earnings of subsidiaries
14,566 — — (14,566 ) —
Other (expense) income
4,292 (18,956 ) (5,102 ) (7,217 ) (26,983 )
(Loss) income before income and mining taxes
19,623 32,715 (6,950 ) (21,783 ) 23,605
Income and mining tax (provision) benefit
(652 ) (11,850 ) 651 7,217 (4,634 )
Net income (loss)
18,971 20,865 (6,299 ) (14,566 ) 18,971
Preferred stock dividends
(138 ) — — — (138 )
Income (loss) applicable to common stockholders
18,833 20,865 (6,299 ) (14,566 ) 18,833
Net income (loss)
18,971 20,865 (6,299 ) (14,566 ) 18,971
Changes in comprehensive income (loss)
1,832 — — — 1,832
Comprehensive income (loss)
$ 20,803 $ 20,865 $ (6,299 ) $ (14,566 ) $ 20,803

~~Sales~~Unaudited Interim Condensed Consolidating Statements of concentrates sold directly to customers are recorded as revenues when title and risk of loss transfer to the customer (generally at the time of shipment) using estimated forward metals prices for the estimated month of settlement. Due to the time elapsed between shipment of concentrates to the customer and final settlement with the customer, we must estimate the prices at which sales of our metals will be settled. Previously recorded sales and trade accounts receivable are adjusted to estimated settlement prices until final settlement by the customer. Changes in metals prices between shipment and final settlement result in changes to revenues and accounts receivable previously recorded upon shipment.  As a result, our trade accounts receivable balances related to concentrate sales are subject to changes in metals prices until final settlement occurs.  For more information, see part N. Revenue Recognition of ~~Note 1~~ of ~~Notes to Consolidated Financial Statements~~ ~~in our annual report filed on Form 10-K for the year ended December 31, 2016.~~Cash Flows

Three Months Ended March 31, 2021

Parent

Guarantors

Non-
Guarantors

Eliminations

Consolidated

(in thousands)

Cash flows from operating activities
$ (27,033 ) $ 67,045 $ 652 $ (2,728 ) $ 37,936
Cash flows from investing activities:

Additions to properties, plants, equipment and mineral interests
— (21,413 ) — — (21,413 )
Other investing activities, net
(28,804 ) — 19 28,804 19
Cash flows from financing activities:

Dividends paid to stockholders
(4,826 ) — — (4,826 )
Payments on debt
— (1,881 ) — (1,881 )
Other financing activity
66,630 (38,466 ) (2,170 ) (26,076 ) (82 )
Effect of exchange rate changes on cash
— 189 (22 ) — 167
Changes in cash, cash equivalents and restricted cash and cash equivalents
5,967 5,474 (1,521 ) — 9,920
Beginning cash, cash equivalents and restricted cash and cash equivalents
89,256 12,455 29,172 — 130,883
Ending cash, cash equivalents and restricted cash and cash equivalents
$ 95,223 $ 17,929 $ 27,651 $ — $ 140,803
~~We utilize financially-settled forward contracts to manage our exposure to changes in prices for silver, gold, zinc and lead.~~  ~~See~~
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Item ~~7A. –~~ 3.Quantitative and Qualitative Disclosures About Market Risk ~~- Commodity-Price Risk Management~~ below for more information on our contract programs.  These contracts do not qualify for hedge accounting and are therefore marked-to-market through earnings each period.  Changes in silver, gold, zinc and lead prices between the dates that the contracts are entered into and their settlements will result in changes to the fair value asset or liability associated with the contracts, with a corresponding gain or loss recognized in earnings.
~~Obligations for Environmental, Reclamation and Closure Matters~~
Accrued reclamation and closure costs can represent a significant and variable liability on our balance sheet. We have estimated our liabilities under appropriate accounting guidance, and on at least an annual basis - and more frequently if warranted - management reviews our liabilities with our Audit Committee. However, the ranges of liability could exceed the liabilities recognized. If substantial damages were awarded, claims were settled, or remediation costs incurred in excess of our accruals, our financial results or condition could be materially adversely affected.
~~Mineral Reserves~~
Critical estimates are inherent in the process of determining our reserves. Our reserves are affected largely by our assessment of future metals prices, as well as by engineering and geological estimates of ore grade, accessibility and production cost. Metals prices are estimated at long-term averages, as described in ~~Part I~~, ~~Item 2. – Properties~~ ~~in our annual report filed on Form 10-K for the year ended December 31, 2016. Our assessment of reserves occurs at least annually, and periodically utilizes external audits.~~
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Reserves are a key component in the valuation of our properties, plants and equipment. Reserve estimates are used in determining appropriate rates of units-of-production depreciation, with net book value of many assets depreciated over remaining estimated reserves. Reserves are also a key component in forecasts, with which we compare future cash flows to current asset values in an effort to ensure that carrying values are reported appropriately. Our forecasts are also used in determining the level of valuation allowances on our deferred tax assets. Reserves also play a key role in the valuation of certain assets in the determination of the purchase price allocations for acquisitions. Annual reserve estimates are also used to determine conversions of mineral assets beyond the known reserve resulting from business combinations to depreciable reserves, in periods subsequent to the business combinations (see ~~Business Combinations~~ ~~below).  Reserves are a culmination of many estimates and are not guarantees that we will recover the indicated quantities of metals or that we will do so at a profitable level.~~
~~Business Combinations~~
We are required to allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date.  The valuation of assets acquired and liabilities assumed requires management to make significant estimates and assumptions, especially with respect to long-lived assets (including mineral assets beyond the known reserve). These estimates include future metals prices and mineral reserves, as discussed above.  Management may also be required to make estimates related to the valuation of deferred tax assets or liabilities as part of the purchase price allocation for business combinations. In some cases, we use third-party appraisers to determine the fair values and lives of property and other identifiable assets. In addition, costs related to business combinations are included in earnings as incurred, and our financial results for periods in which business combinations are pursued could be adversely affected as a result.
~~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 ~~risk~~risks and uncertainties, ~~and~~as well as summarizes the financial instruments held by us at ~~September~~ ~~30, 2017,~~March 31, 2021, 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 non-financial or non-quantifiable (See ~~Part I~~, Item 1A. – Risk Factors of our ~~annual report filed~~2020 Form 10-K).
Metals Prices
Changes in the market prices of silver, gold, lead and zinc can significantly affect our profitability and cash flow. Metal prices can and often do fluctuate widely and are affected by numerous factors beyond our control (see Item 1A – Risk Factors – A substantial or extended decline in metals prices would have a material adverse effect on us in our 2020 Form 10-K ). We utilize financially-settled forward and put option contracts to manage our exposure to changes in prices for ~~the year ended December 31, 2016).~~silver, gold, zinc and lead.

Provisional Sales

Sales of all metals products sold directly to customers, including by-product metals, are recorded as revenues when ~~title~~all performance obligations have been completed and ~~risk of loss transfers to~~ the ~~customer (generally~~transaction price can be determined or reasonably estimated. For concentrate sales, revenues are generally recorded at the time of ~~shipment)~~shipment at forward prices for the estimated month of settlement. Due to the time elapsed between shipment to the customer and the final settlement with the customer we must estimate the prices at which sales of our metals will be settled. Previously recorded sales are adjusted to estimated settlement metals prices until final settlement by the customer. Changes in metals prices between shipment and final settlement will result in changes to revenues previously recorded upon shipment. Metals prices can and often do fluctuate widely and are affected by numerous factors beyond our control (see ~~Part I~~, Item ~~1A.~~ 1A – Risk Factors – A substantial or extended decline in metals prices would have a material adverse effect on us in our ~~annual report filed on~~2020 Form ~~10-K for the year ended December 31, 2016)~~10-K). At ~~September 30, 2017,~~March 31, 2021, metals contained in ~~concentrates~~concentrate sales and exposed to future price changes totaled ~~approximately 1.5~~2.0 million ounces of silver, ~~5,536~~5,523 ounces of gold, ~~9,974~~8,831 tons of zinc, and ~~1,423~~4,522 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 ~~$6.4~~$8.8 million. ~~However, as~~As discussed in Commodity-Price Risk Management below, we utilize a program designed and intended to mitigate the risk of negative price adjustments with limited mark-to-market financially-settled forward contracts for our silver, gold, zinc and lead sales.

Commodity-Price Risk Management

~~At times, we use commodity forward sales commitments, commodity swap contracts~~See Note 8 of Notes to Condensed Consolidated Financial Statements (Unaudited) and ~~commodity put~~Item 7A. Quantitative and ~~call option contracts to manage~~Qualitative Disclosures About Market Risk in our ~~exposure to fluctuation in the prices of certain metals which we produce. Contract positions are designed to ensure that we will receive~~2020 Form 10-K for a ~~defined minimum price for certain quantities~~description of our ~~production, thereby partially offsetting our exposure to fluctuations in the market. Our~~commodity-price risk management policy allows for up to 75% of our planned metals price exposure for five years into the future, with certain other limitations, to be hedged under such programs. These instruments do, however, expose us to (i) credit risk in the form of possible non-performance by counterparties for contracts in which the contract price exceeds the spot price of a commodity and (ii) price risk to the extent that the spot price exceeds the contract price for quantities of our production covered under contract positions.program.

~~Table of Contents~~

We are currently using financially-settled forward contracts to manage the exposure to changes in prices of silver, gold, zinc and lead contained in our concentrate shipments between the time of shipment and final settlement. In addition, we are using financially-settled forward contracts to manage the exposure to changes in prices of zinc and lead (but not silver and gold) contained in our forecasted future concentrate shipments. These contracts do not qualify for hedge accounting and are marked-to-market through earnings each period.

~~As of September~~ ~~30, 2017, we recorded the following balances for the fair value of the contracts:~~

~~a current asset of $0.4 million, which is net of $0.1 million for contracts in a liability position and included in other current assets;~~

~~a current liability of $7.9 million, which is net of $0.2 million for contracts in an asset position and included in other current liabilities; and~~

~~a non-current liability of $4.0 million, which is included in other non-current liabilities.~~

We recognized a $3.9 million net loss during the first nine months of 2017 on the contracts utilized to manage exposure to prices of metals in our concentrate shipments, which is included in sales of products. The net loss recognized on the contracts offsets gains related to price adjustments on our provisional concentrate sales due to changes to silver, gold, lead and zinc prices between the time of sale and final settlement.

We recognized a $16.5 million net loss during the first nine months of 2017 on the contracts utilized to manage exposure to prices for forecasted future concentrate shipments. The net loss on these contracts is included as a separate line item under other income (expense), as they relate to forecasted future shipments, as opposed to sales that have already taken place but are subject to final pricing as discussed in the preceding paragraph. The net loss for the first nine months of 2017 is the result of higher zinc and lead prices. This program, when utilized, is designed to mitigate the impact of potential future declines in lead and zinc prices from the price levels established in the contracts (see average price information below). When those prices increase compared to the contract prices, we recognize losses.

~~The following tables summarize the quantities of metals committed under forward sales contracts at September~~ ~~30, 2017 and December 31, 2016:~~

September 30, 2017

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

2017 settlements
1,399 5 19,070 2,535 $ 17.18 $ 1,298 $ 1.33 $ 1.07
2018 settlements
— — 2,370 — N/A N/A $ 1.38 N/A
Contracts on forecasted sales

2017 settlements
— — 441 2,866 N/A N/A $ 1.23 $ 1.05
2018 settlements
— — 39,463 17,968 N/A N/A $ 1.27 $ 1.05
2019 settlements
— — 14,330 8,267 N/A N/A $ 1.30 $ 1.07
2020 settlements
— — 3,307 2,205 N/A N/A $ 1.27 $ 1.07
60
~~Table of Contents~~
December 31, 2016

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

2017 settlements
1,295 4 19,070 7,441 $ 16.29 $ 1,172 $ 1.18 $ 0.97
Contracts on forecasted sales

2017 settlements
— — 35,384 17,637 N/A N/A $ 1.19 $ 1.03
2018 settlements
— — 13,779 5,732 N/A N/A $ 1.21 $ 1.05
Our concentrate sales are based on a provisional sales price containing an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable from the sale of the concentrates at the forward price at the time of the sale. The embedded derivative, which does not qualify for hedge accounting, is marked-to-market through earnings each period prior to final settlement.
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 ~~U.S. dollar ("USD")~~USD and the ~~Canadian dollar ("CAD")~~CAD and ~~Mexican peso ("MXN").~~MXN, respectively. We have determined ~~that~~ the functional currency for our Canadian and Mexican operations is the USD. As such, foreign exchange gains and losses associated with the re-measurement of monetary assets and liabilities from CAD and MXN to USD are recorded to earnings each period. For the ~~nine~~three months ended ~~September~~ ~~30, 2017,~~March 31, 2021 and 2020, we recognized a net foreign exchange loss of ~~$10.9 million.~~$2.1 million and gain of $6.6 million, 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, 2017~~March 31, 2021 would have resulted in a change of approximately ~~$11.8~~$10.5 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, 2017~~March 31, 2021 would have resulted in a change of approximately ~~$0.9~~$0.1 million in our net foreign exchange gain or loss.
In April 2016, we initiated a program to manage our exposure to fluctuations in the exchange rate between the USD and CAD and the impact on our future operating costs denominated in CAD. In October 2016, we also initiated a program to manage our exposure to the impact of fluctuations in the exchange rate between the USD and MXN on our future operating costs denominated in MXN. The programs utilize forward contracts to buy CAD and MXN, and each contract is designated as a cash flow hedge. As of September 30, 2017, we have 94 forward contracts outstanding to buy CAD$200.1 million having a notional amount of US$154.0 million, and 6 forward contracts outstanding to buy MXN$43.3 million having a notional amount of USD$2.2 million. The CAD contracts are related to forecasted cash operating costs at Casa Berardi to be incurred from 2017 through 2020 and have CAD-to-USD exchange rates ranging between 1.2787 and 1.3380. The MXN contracts are related to forecasted cash operating costs at San Sebastian for 2017 and have MXN-to-USD exchange rates ranging between 19.5910 and 21.0000. Our risk management policy allows for up to 75% of our planned cost exposure for five years into the future to be hedged under such programs, and for potential additional programs to manage other foreign currency-related exposure areas.
~~As of September~~ ~~30, 2017, we recorded the following balances for the fair value of the contracts:~~
~~a current asset of $2.8 million, which is included in other current assets; and~~
~~a non-current asset of $3.7 million, which is included in other non-current assets.~~
Net unrealized gains of approximately $6.8 million related to the effective portion of the hedges were included in accumulated other comprehensive income as of September 30, 2017. Unrealized gains and losses will be transferred from accumulated other comprehensive loss to current earnings as the underlying operating expenses are recognized. We estimate approximately $2.9 million in net unrealized gains included in accumulated other comprehensive income as of September 30, 2017 would be reclassified to current earnings in the next twelve months. Net realized gains of approximately $0.4 million on contracts related to underlying expenses which have been recognized were transferred from accumulated other comprehensive loss and included in cost of sales and other direct production costs for the nine months ended September 30, 2017. Net unrealized gains of approximately $2 thousand related to ineffectiveness of the hedges were included in current earnings for the nine months ended September 30, 2017.

61
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Table of Contents
See Note 8 of Notes to Condensed Consolidated Financial Statements (Unaudited) and Note 11 of Notes to Consolidated Financial Statements in our 2020 Form 10-K for a description of our foreign currency risk management.

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 ~~defined~~required by Securities Exchange Act Rules 13a-15(e) and 15d-15(e) as of the end of the period covered by this report.  Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures, including controls and procedures designed to ensure that information required to be disclosed by us is accumulated and communicated to our management (including our CEO and CFO), were effective as of ~~September 30, 2017,~~March 31, 2021, 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, 2017~~March 31, 2021 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 Note 410 of Notes to Condensed Consolidated Financial Statements (Unaudited), which is incorporated by reference into this Item 1.

Item 1A. Risk Factors

~~Part I,~~ Item ~~1A. –~~1A - Risk Factors of our annual report filed on Form 10-K for the year ended December 31, ~~2016~~2020 sets forth information relating to important risks and uncertainties that could materially adversely affect our business, financial condition or operating results.  ~~Those risk factors continue to be relevant to an understanding~~
Item 2. Unregistered Sales of Securities and Use of Proceeds
On January 27, 2021, we issued 3,500,000 unregistered shares of our ~~business, financial condition~~common stock to the Hecla Mining Company Pre-2005 Supplemental Excess Retirement Plan and ~~operating results.~~the Hecla Mining Company Post-2004 Supplemental Excess Retirement Plan (together, the "SERP") in private placements in order to fund future benefit payment requirements for the SERP. The private placements were exempt from registration under the Securities Act of 1933 pursuant to section 4(a)(2) of that Act. The shares were subsequently registered for resale on a registration statement on Form S-3 filed with the SEC on February 18, 2021. We did not receive any cash proceeds from the issuance of the shares. The shares had a value of approximately $16.8 million at the time of issuance.

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 S-K is included in exhibit 95 to this Quarterly Report.

~~Item 6.~~    ~~Exhibits~~
~~See the exhibit index to this Form 10-Q for the list of exhibits.~~
~~Items 2, 3 and 5 of Part II are not applicable and are omitted from this report.~~
62
56
Table of Contents

~~SIGNATURES~~Item 6.Exhibits
~~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:~~
~~November 7, 2017~~
~~By:~~
~~/s/ Phillips S. Baker, Jr.~~
~~Phillips S. Baker, Jr., President,~~
~~Chief Executive Officer and Director~~
~~Date:~~
~~November 7, 2017~~
~~By:~~
~~/s/ Lindsay A. Hall~~
~~Lindsay A. Hall, Senior Vice President and~~
~~Chief Financial Officer~~
63
~~Table of Contents~~

Hecla Mining Company and Wholly Owned Subsidiaries
Form 10-Q ~~– September 30, 2017~~- March 31, 2021
Index to Exhibits

1.1
Equity Distribution Agreement, dated as of February 18, 2021, by and among Hecla Mining Company and the sales agents party thereto. Filed as exhibit 1.1 to Registrant’s Form 8-K filed on February 18, 2021 (File No. 1-8491) and incorporated herein by reference.
3.1
~~Restated Certificate~~Bylaws of ~~Incorporation of the Registrant.~~Hecla Mining Company, as amended February 26, 2021. Filed as exhibit ~~3.1~~3.2 to ~~Registrant's~~Registrant’s Form 8-K filed on March 1, 2021 (File No. 1-8491) and incorporated herein by reference.
10.1
Form of Indemnification Agreement, dated February 26, 2021, between Registrant and Alice Wong, and dated March 1, 2021, between Registrant and Russell D. Lawlar, incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~June~~September 30, ~~2017 (File No. 1-8491),~~2006, and ~~incorporated herein by reference.~~filed on November 9, 2006.

~~3.2~~10.2
~~Bylaws~~Form of ~~the Registrant as amended to date. Filed as exhibit 3.1 to Registrant's Current Report on Form 8-K filed on August 22, 2014 (File No. 1-8491), and incorporated herein by reference.~~
~~4.1~~
~~Designations, Preferences and Rights~~Change of Series B Cumulative Convertible Preferred Stock of the Registrant. Included as Annex II to Restated Certificate of Incorporation of Registrant filed as exhibit 3.1 to Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 (File No. 1-8491), and incorporated herein by reference.
~~4.2(a)~~
~~Indenture dated as of April 12, 2013 among~~Control Agreement between Hecla Mining Company ~~as Issuer, certain subsidiaries of Hecla Mining Company, as Guarantors thereto,~~ and ~~The Bank of New York Mellon Trust Company, N.A., as Trustee. Filed as exhibit 10.1~~Russell D. Lawlar, incorporated by reference to ~~Registrant’s Current Report on Form 8-K filed on April 15, 2013 (File No. 1-8491), and incorporated herein by reference.~~
~~4.2(b)~~
Supplemental Indenture, dated as of April 14, 2014, among Hecla Mining Company, as Issuer, certain subsidiaries of Hecla Mining Company, as Guarantors thereto, and The Bank of New York Mellon Trust Company, N.A., as Trustee. Filed as exhibit 4.2Exhibit 10.2 to ~~Registrant’s Registration Statement on Form S-3ASR filed on April 14, 2014 (File No. 1-8491), and incorporated herein by reference.~~
~~4.2(c)~~
Supplemental Indenture, dated August 5, 2015, among Revett Mining Company, Inc., Revett Silver Company, Troy Mine, Inc., RC Resources, Inc., Revett Exploration, Inc., and Revett Holdings, Inc., as Guaranteeing Subsidiaries, and The Bank of New York Mellon Trust Company, N.A., as Trustee. Filed as exhibit 4.2(d) to Registrant’sthe Company’s Annual Report on Form 10-K for the year ended December 31, 2015, ~~(File No. 1-8491),~~ and ~~incorporated herein by reference.~~filed on February 23, 2016.

~~4.2(d)~~31.1
~~Supplemental Indenture, dated October 26, 2016, among Mines Management Inc., Newhi, Inc., Montanore Minerals Corp., as Guaranteeing Subsidiaries, and The Bank~~Certification pursuant to Section 302 of ~~New York Mellon Trust, N.A., as Trustee. Filed as exhibit 4.2(e) to Registrant’s Annual Report on Form 10-K for~~ the ~~year ended December 31, 2016 (File No. 1-8491), and incorporated herein by reference.~~Sarbanes-Oxley Act of 2002. *

~~10.1~~31.2
Fourth Amended and Restated Credit Agreement effective May 20, 2016, by and among Hecla Mining Company, Hecla Limited, Hecla Alaska LLC, Hecla Greens Creek Mining Company, and Hecla Juneau Mining Company, asCertification pursuant to Section 302 of the ~~Borrowers, The Bank~~Sarbanes-Oxley Act of Nova Scotia, as the Administrative Agent for the Lenders, and various Lenders. Filed as exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on May 25, 2016 (File No. 1-8491), and incorporated herein by reference.
64
~~Table of Contents~~
~~10.2~~
First Amendment to Fourth Amended and Restated Credit Agreement effective July 14, 2017, by and among Hecla Mining Company, Hecla Limited, Hecla Alaska LLC, Hecla Greens Creek Mining Company, and Hecla Juneau Mining Company, as the Borrowers, The Bank of Nova Scotia, as the Administrative Agent for the Lenders, and various Lenders. Filed as exhibit 10.2 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 (File No. 1-8491), and incorporated herein by reference.2002. *

~~31.1~~32.1
Certification pursuant to Section ~~302~~906 of the Sarbanes-Oxley Act of 2002. *

~~31.2~~32.2
Certification pursuant to Section ~~302~~906 of the Sarbanes-Oxley Act of 2002. *
95
Mine safety information listed in Section 1503 of the ~~Sarbanes-Oxley Act of 2002.~~Dodd-Frank Act. *

~~32.1~~
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
~~32.2~~
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
95
Mine safety information listed in Section 1503 of the Dodd-Frank Act. *
101.INS
Inline XBRL ~~Instance.~~Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. **

101.SCH
Inline XBRL Taxonomy Extension Schema.**

101.CAL
Inline XBRL Taxonomy Extension Calculation.**

101.DEF
Inline XBRL Taxonomy Extension Definition.**

101.LAB
Inline XBRL Taxonomy Extension Labels.**

101.PRE
Inline XBRL Taxonomy Extension Presentation.**
104
Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

~~___________________~~

*          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.

65
Items 3 and 5 of Part II are not applicable and are omitted from this report.
57
Table of Contents
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 6, 2021
By:
/s/ Phillips S. Baker, Jr.
Phillips S. Baker, Jr., President,
Chief Executive Officer and Director
Date:
May 6, 2021
By:
/s/ Russell D. Lawlar
Russell D. Lawlar, Senior Vice President,
Chief Financial Officer and Treasurer
58

	Delaware	77-0664171
	(State or ~~other jurisdiction~~Other Jurisdiction of	(I.R.S. Employer
	~~incorporation~~Incorporation or ~~organization)~~Organization	Identification No.)

	6500 N. Mineral Drive, Suite 200
	Coeur d'Alene, Idaho	83815-9408
	(Address of ~~principal executive offices)~~Principal Executive Offices	(Zip ~~Code)~~Code

208-769-4100
(Registrant's ~~telephone number, including area code)~~Telephone Number, Including Area Code

Large accelerated filer ☒.	Accelerated ~~Filer~~ XX.	~~Accelerated Filer~~ . filer ☐.
~~Non-Accelerated Filer~~ ~~. (Do not check if a smaller~~Non-accelerated filer ☐.	Smaller reporting ~~company)~~	~~Smaller Reporting Company~~. company ☐.
Emerging growth company . ☐.

		Page
PART I - Financial Information

	Item 1 – Condensed Consolidated Financial Statements (Unaudited)

	~~Condensed Consolidated Balance Sheets - September 30, 2017 and December 31, 2016~~	3

	Condensed Consolidated Statements of Operations and Comprehensive ~~Loss~~Income (Loss) - Three Months Ended March 31, 2021 and ~~Nine Months Ended September 30, 2017 and 2016~~2020	4 3

	Condensed Consolidated Statements of Cash Flows - ~~Nine~~Three Months Ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020	5 4

Condensed Consolidated Balance Sheets - March 31, 2021 and December 31, 2020	5

Condensed Consolidated Statements of Changes in Stockholders' Equity - Three Months Ended March 31, 2021 and 2020	6

Notes to Condensed Consolidated Financial Statements (Unaudited)	6 7

Forward-Looking Statements	21

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	30 22

	Item 3. Quantitative and Qualitative Disclosures About Market Risk	59 55

	Item 4. Controls and Procedures	62 56

PART II - Other Information

	Item 1 – Legal Proceedings	62 56

	~~Item 1A~~ ~~– Risk Factors~~	62

	~~Item 4~~ ~~– Mine Safety Disclosures~~	62

	~~Item 6~~ ~~– Exhibits~~	62

	~~Signatures~~	63

	~~Exhibits~~	64


*Items 2, 3 and 5 of Part II are omitted as they are not applicable.Item 1A – Risk Factors	56

Item 2 – Unregistered Sales of Securities and Use of Proceeds	56

Item 4 – Mine Safety Disclosures	56

Item 6 – Exhibits	57

Signatures	58

	September 30, 2017			December 31, 2016
ASSETS
Current assets:
Cash and cash equivalents	$	172,923		$	169,777
Investments		32,973			29,117
Accounts receivable:
Trade		6,982			20,082
Taxes		10,382			187
Other, net		9,031			9,780
Inventories:
Concentrates, doré, and stockpiled ore		38,064			25,944
Materials and supplies		24,663			24,079
Other current assets		16,317			12,125
Total current assets		311,335			291,091
Non-current investments		7,098			5,002
Non-current restricted cash and investments		1,076			2,200
Properties, plants, equipment and mineral interests, net		2,025,607			2,032,685
Non-current deferred income taxes		44,683			35,815
Other non-current assets and deferred charges		6,384			4,884
Total assets	$	2,396,183		$	2,371,677
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities	$	46,847		$	60,064
Accrued payroll and related benefits		29,085			36,515
Accrued taxes		5,081			9,061
Current portion of capital leases		5,852			5,653
Current portion of debt		—			470
Current portion of accrued reclamation and closure costs		6,514			5,653
Accrued interest		14,450			5,745
Other current liabilities		7,968			3,064
Total current liabilities		115,797			126,225
Capital leases		7,436			5,838
Accrued reclamation and closure costs		80,758			79,927
Long-term debt		501,917			500,979
Non-current deferred tax liability		122,723			122,855
Non-current pension liability		43,451			44,491
Other noncurrent liabilities		11,160			11,518
Total liabilities		883,242			891,833
Commitments and contingencies (Notes 2, 4, 7, 9, and 11)
SHAREHOLDERS’ EQUITY
Preferred stock, 5,000,000 shares authorized:
Series B preferred stock, $0.25 par value, 157,816 shares issued and outstanding, liquidation preference — $7,891		39			39
Common stock, $0.25 par value, authorized 750,000,000 shares; issued and outstanding 2017 — 399,018,708 shares and 2016 — 395,286,875 shares		100,886			99,806
Capital surplus		1,617,669			1,597,212
Accumulated deficit		(166,602	)		(167,437	)
Accumulated other comprehensive loss		(20,884	)		(34,602	)
Less treasury stock, at cost; 2017 — 4,529,450 and 2016 — 3,941,210 shares issued and held in treasury		(18,167	)		(15,174	)
Total shareholders’ equity		1,512,941			1,479,844
Total liabilities and shareholders’ equity	$	2,396,183		$	2,371,677

	Three Months Ended
	March 31, 2021			March 31, 2020
Sales of products	$	210,852		$	136,925
Cost of sales and other direct production costs		96,709			85,887
Depreciation, depletion and amortization		49,331			39,666
Total cost of sales		146,040			125,553
Gross profit		64,812			11,372
Other operating expenses:
General and administrative		8,007			8,939
Exploration		5,951			2,530
Pre-development		739			535
Other operating expense		3,639			920
Ramp-up and suspension costs		4,318			12,996
Provision for closed operations and environmental matters		3,709			516
Total other operating expense		26,363			26,436
Income (loss) from operations		38,449			(15,064	)
Other income (expense):
Gain on exchange of investments		1,158			0
Unrealized loss on investments		(3,506	)		(978	)
Gain on derivative contracts		473			7,893
Net foreign exchange (loss) gain		(2,064	)		6,636
Other non-operating expense		(161	)		(423	)
Interest expense		(10,744	)		(16,311	)
Total other expense		(14,844	)		(3,183	)
Income (loss) before income and mining taxes		23,605			(18,247	)
Income and mining tax (provision) benefit		(4,634	)		1,062
Net income (loss)		18,971			(17,185	)
Preferred stock dividends		(138	)		(138	)
Income (loss) applicable to common stockholders	$	18,833		$	(17,323	)
Comprehensive income (loss):
Net income (loss)	$	18,971		$	(17,185	)
Change in fair value of derivative contracts designated as hedge transactions		1,832			(19,335	)
Comprehensive income (loss)	$	20,803		$	(36,520	)
Basic income (loss) per common share after preferred dividends	$	0.04		$	(0.03	)
Diluted income (loss) per common share after preferred dividends	$	0.03		$	(0.03	)
Weighted average number of common shares outstanding - basic		534,101			523,215
Weighted average number of common shares outstanding - diluted		540,527			523,215
Cash dividends per common share	$	0.00875		$	0.0025

	Three Months Ended						Nine Months Ended
	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016
Sales of products	$	140,839		$	179,393		$	417,662		$	481,712
Cost of sales and other direct production costs		68,358			90,529			224,537			249,162
Depreciation, depletion and amortization		28,844			30,179			83,365			84,592
Total cost of sales		97,202			120,708			307,902			333,754
Gross profit		43,637			58,685			109,760			147,958
Other operating expenses:
General and administrative		9,529			11,155			29,044			31,728
Exploration		7,255			3,859			17,622			10,171
Pre-development		1,757			550			4,061			1,475
Research and development		1,130			—			2,125			—
Other operating expense		134			962			1,615			2,535
Gain on disposition of properties, plants, equipment and mineral interests		(4,830	)		(8	)		(4,924	)		(319	)
Provision for closed operations and reclamation		2,940			2,162			5,044			4,779
Lucky Friday suspension-related costs		4,780			—			14,385			—
Acquisition costs		—			1,765			—			2,167
Total other operating expense		22,695			20,445			68,972			52,536
Income from operations		20,942			38,240			40,788			95,422
Other income (expense):
(Loss) gain on derivative contracts		(11,226	)		7			(16,548	)		—
Loss on disposition of investments		—			—			(167	)		—
Unrealized (loss) gain on investments		(124	)		49			(73	)		488
Foreign exchange (loss) gain		(4,764	)		2,375			(10,909	)		(7,713	)
Interest and other income		541			145			1,185			346
Interest expense, net of amount capitalized		(9,358	)		(5,574	)		(28,423	)		(16,655	)
Total other expense		(24,931	)		(2,998	)		(54,935	)		(23,534	)
(Loss) income before income taxes		(3,989	)		35,242			(14,147	)		71,888
Income tax benefit (provision)		5,401			(9,453	)		18,377			(22,603	)
Net income		1,412			25,789			4,230			49,285
Preferred stock dividends		(138	)		(138	)		(414	)		(414	)
Income applicable to common shareholders	$	1,274		$	25,651		$	3,816		$	48,871
Comprehensive income:
Net income	$	1,412		$	25,789		$	4,230		$	49,285
Reclassification of loss on disposition or impairment of marketable securities included in net income		—			—			167			1,000
Unrealized loss and amortization of prior service on pension plans		(16	)		—			—			—
Change in fair value of derivative contracts designated as hedge transactions		6,760			(1,602	)		12,068			(1,556	)
Unrealized holding gains on investments		892			987			1,483			2,245
Comprehensive income	$	9,048		$	25,174		$	17,948		$	50,974
Basic income per common share after preferred dividends	$	0.00		$	0.07		$	0.01		$	0.13
Diluted income per common share after preferred dividends	$	0.00		$	0.07		$	0.01		$	0.13
Weighted average number of common shares outstanding - basic		398,848			387,578			396,809			383,458
Weighted average number of common shares outstanding - diluted		401,258			389,918			400,176			386,318
Cash dividends declared per common share	$	0.0025		$	0.0025		$	0.0075		$	0.0075

	Nine Months Ended
	September 30, 2017			September 30, 2016
Operating activities:
Net income	$	4,230		$	49,285
Non-cash elements included in net income:
Depreciation, depletion and amortization		87,634			83,900
Loss on disposition of investments		167			—
Unrealized loss (gain) on investments		73			(488	)
Gain on disposition of properties, plants, equipment, and mineral interests		(4,924	)		(319	)
Provision for reclamation and closure costs		3,379			3,685
Stock compensation		4,943			4,814
Acquisition costs		—			1,048
Deferred income taxes		(24,280	)		10,330
Amortization of loan origination fees		1,415			1,397
Loss on derivative contracts		16,718			337
Foreign exchange loss		11,171			7,555
Other non-cash items, net		(1	)		5
Change in assets and liabilities, net of business acquisitions:
Accounts receivable		4,903			5,776
Inventories		(9,611	)		(44	)
Other current and non-current assets		(2,685	)		(539	)
Accounts payable and accrued liabilities		(7,759	)		2,042
Accrued payroll and related benefits		(913	)		8,621
Accrued taxes		(4,469	)		(2,894	)
Accrued reclamation and closure costs and other non-current liabilities		(5,876	)		(1,397	)
Cash provided by operating activities		74,115			173,114
Investing activities:
Additions to properties, plants, equipment and mineral interests		(70,390	)		(120,236	)
Acquisitions of other companies, net of cash acquired		—			(3,931	)
Proceeds from disposition of properties, plants, equipment and mineral interests		151			348
Insurance proceeds received for damaged property		5,628			—
Purchases of investments		(36,916	)		(32,847	)
Maturities of investments		31,169			7,240
Changes in restricted cash and investment balances		1,124			(3,900	)
Net cash used in investing activities		(69,234	)		(153,326	)
Financing activities:
Proceeds from sale of common stock, net of offering costs		9,610			8,121
Acquisition of treasury shares		(2,993	)		(4,363	)
Dividends paid to common shareholders		(2,978	)		(2,882	)
Dividends paid to preferred shareholders		(414	)		(414	)
Credit availability and debt issuance fees		(476	)		(107	)
Repayments of debt		(470	)		(1,807	)
Repayments of capital leases		(5,065	)		(6,328	)
Net cash used in financing activities		(2,786	)		(7,780	)
Effect of exchange rates on cash		1,051			627
Net increase in cash and cash equivalents		3,146			12,635
Cash and cash equivalents at beginning of period		169,777			155,209
Cash and cash equivalents at end of period	$	172,923		$	167,844
Significant non-cash investing and financing activities:
Addition of capital lease obligations	$	6,439		$	2,297
Common stock issued for the acquisition of other companies	$	—		$	48,109
Payment of accrued compensation in restricted stock units	$	4,240		$	5,511

	March 31, 2021			December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	139,750		$	129,830
Accounts receivable:
Trade		35,274			27,864
Other, net		8,475			11,329
Inventories:
Concentrates, doré, and stockpiled ore		56,917			57,936
Materials and supplies		37,335			38,608
Derivatives assets		7,195			3,470
Other current assets		12,971			15,644
Total current assets		297,917			284,681
Investments		11,717			15,148
Restricted cash and investments		1,053			1,053
Properties, plants, equipment and mineral interests, net		2,320,547			2,345,219
Operating lease right-of-use assets		9,775			10,628
Deferred taxes		3,886			2,912
Derivatives assets		6,346			4,558
Other non-current assets		3,836			3,525
Total assets	$	2,655,077		$	2,667,724
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities	$	53,130		$	68,516
Accrued payroll and related benefits		22,800			31,807
Accrued taxes		7,854			8,349
Finance leases		6,706			6,491
Operating leases		2,832			3,008
Accrued reclamation and closure costs		6,592			5,582
Accrued interest		5,175			14,157
Derivatives liabilities		3,906			11,737
Other current liabilities		123			138
Total current liabilities		109,118			149,785
Finance leases		10,304			9,274
Operating leases		6,954			7,634
Accrued reclamation and closure costs		113,671			110,466
Long-term debt		507,992			507,242
Deferred tax liability		149,220			144,330
Pension liability		28,797			44,144
Other non-current liabilities		4,146			4,364
Total liabilities		930,202			977,239
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, 157,816 shares issued and outstanding, liquidation preference — $7,891		39			39
Common stock, $0.25 par value, 750,000,000 authorized shares; issued March 31, 2021 — 542,154,997 shares and December 31, 2020 — 538,487,415 shares		135,546			134,629
Capital surplus		2,021,072			2,003,576
Accumulated deficit		(377,229	)		(391,374	)
Accumulated other comprehensive loss		(31,057	)		(32,889	)
Less treasury stock, at cost; March 31, 2021 and December 31, 2020 - 6,821,044 shares issued and held in treasury		(23,496	)		(23,496	)
Total stockholders’ equity		1,724,875			1,690,485
Total liabilities and stockholders’ equity	$	2,655,077		$	2,667,724

	Three Months Ended March 31, 2021
	Series B Preferred Stock		Common Stock		Additional Paid-In Capital		Accumulated Deficit			Accumulated Other Comprehensive Loss, net			Treasury Stock			Total
Balances, January 1, 2021	$	39	$	134,629	$	2,003,576	$	(391,374	)	$	(32,889	)	$	(23,496	)	$	1,690,485
Net income		0		0		0		18,971			0			0			18,971
Restricted stock units granted		0		0		483		0			0			0			483
Common stock dividends declared ($0.00875 per common share)		0		0		0		(4,688	)		0			0			(4,688	)
Series B Preferred Stock dividends declared ($0.875 per share)		0		0		0		(138	)		0			0			(138	)
Common stock issued for 401(k) match (165,000 shares)		0		42		1,088		0			0			0			1,130
Shares issued to pension plans (3,500,000 shares)		0		875		15,925		0			0			0			16,800
Other comprehensive income		0		0		0		0			1,832			0			1,832
Balances, March 31, 2021	$	39	$	135,546	$	2,021,072	$	(377,229	)	$	(31,057	)	$	(23,496	)	$	1,724,875

	Three Months Ended March 31, 2020
	Series B Preferred Stock		Common Stock		Additional Paid-In Capital		Accumulated Deficit			Accumulated Other Comprehensive Loss, net			Treasury Stock			Total
Balances, January 1, 2020, as revised (see Note 1)		39		132,292		1,973,700		(365,186	)		(37,310	)		(22,967	)		1,680,568
Net loss		0		0		0		(17,185	)		0			0			(17,185	)
Restricted stock units granted		0		0		1,219		0			0			0			1,219
Common stock dividends declared ($0.0025 per common share)		0		0		0		(1,304	)		0			0			(1,304	)
Series B Preferred Stock dividends declared ($0.875 per share)		0		0		0		(138	)		0			0			(138	)
Common stock issued for 401(k) match (352,000 shares)		0		89		1,114		0			0			0			1,203
Other comprehensive loss		0		0		0		0			(19,335	)		0			(19,335	)
Balances, March 31, 2020	$	39	$	132,381	$	1,976,033	$	(383,813	)	$	(56,645	)	$	(22,967	)	$	1,645,028

	September 30, 2017							December 31, 2016
	Amortized cost		Unrealized loss			Fair value		Amortized cost		Unrealized loss			Fair value
Corporate bonds	$	32,987	$	(14	)	$	32,973	$	22,100	$	(46	)	$	22,054
Municipal bonds		—		—			—		3,727		(1	)		3,726
Agency bonds		—		—					3,339		(2	)		3,337
Total	$	32,987	$	(14	)	$	32,973	$	29,166	$	(49	)	$	29,117

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Current:
Domestic	$	—		$	4,123		$	(12,797	)	$	4,122
Foreign		(3,959	)		5,773			17,491			8,416
Total current income tax (benefit) provision		(3,959	)		9,896			4,694			12,538

Deferred:
Domestic		1,980			(5,723	)		(13,958	)		3,642
Foreign		(3,422	)		5,280			(9,113	)		6,423
Total deferred income tax (benefit) provision		(1,442	)		(443	)		(23,071	)		10,065
Total income tax (benefit) provision	$	(5,401	)	$	9,453		$	(18,377	)	$	22,603

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Net sales to unaffiliated customers:
Greens Creek	$	61,061		$	85,804		$	191,250		$	199,260
Lucky Friday ⁽¹⁾		199			26,140			20,022			70,152
Casa Berardi		53,990			41,131			139,524			126,614
San Sebastian		25,589			26,318			66,866			85,686
	$	140,839		$	179,393		$	417,662		$	481,712
Income (loss) from operations:
Greens Creek	$	16,575		$	26,498		$	46,107		$	49,407
Lucky Friday		(4,642	)		6,652			(8,974	)		13,442
Casa Berardi		2,882			3,691			(1,071	)		16,246
San Sebastian		17,017			18,415			42,363			58,911
Other		(10,890	)		(17,016	)		(37,637	)		(42,584	)
	$	20,942		$	38,240		$	40,788		$	95,422

	Three Months Ended March 31,
	2021			2020
Net sales to unaffiliated customers:
Greens Creek	$	98,409		$	53,833
Lucky Friday		29,122			2,830
Casa Berardi		72,911			46,172
San Sebastian		173			9,927
Nevada Operations		10,237			24,163
	$	210,852		$	136,925
Income (loss) from operations:
Greens Creek	$	44,600		$	4,117
Lucky Friday		6,323			(8,120	)
Casa Berardi		9,117			(3,880	)
San Sebastian		(2,263	)		679
Nevada Operations		(3,140	)		2,889
Other		(16,188	)		(10,749	)
	$	38,449		$	(15,064	)

	September 30, 2017		December 31, 2016
Identifiable assets:
Greens Creek	$	666,463	$	681,303
Lucky Friday		432,752		442,829
Casa Berardi		814,053		806,044
San Sebastian		55,395		33,608
Other		427,520		407,893
	$	2,396,183	$	2,371,677

	March 31, 2021
	Senior Notes			IQ Notes		Total
Principal	$	475,000		$	38,359	$	513,359
Unamortized discount/premium and issuance costs		(6,234	)		867		(5,367	)
Long-term debt balance	$	468,766		$	39,226	$	507,992

	December 31, 2020
	Senior Notes			IQ Notes		Total
Principal	$	475,000		$	37,886	$	512,886
Unamortized discount/premium and issuance costs		(6,462	)		818		(5,644	)
Long-term debt balance	$	468,538		$	38,704	$	507,242

Twelve-month period ending March 31,	Senior Notes		IQ Notes		Finance Leases		Operating Leases
2022	$	34,438	$	2,499	$	7,329	$	3,696
2023		34,438		2,499		5,132		2,706
2024		34,438		2,499		3,643		2,002
2025		34,438		2,499		2,076		549
2026		34,438		39,045		0		525
Thereafter		539,568		0		0		2,213
Total	$	711,758	$	49,041	$	18,180	$	11,691

	Three Months Ended March 31,
	2021			2020

Silver	$	77,760		$	37,572
Gold		101,408			90,694
Lead		15,893			6,420
Zinc		29,191			17,308
Less: Smelter and refining charges		(13,400	)		(15,069	)
Sales of products	$	210,852		$	136,925

	Three Months Ended
	March 31,
	2021			2020
Current:
Domestic	$	(2,277	)	$	(732	)
Foreign		(2,286	)		(2,069	)
Total current income and mining tax provision		(4,563	)		(2,801	)

Deferred:
Domestic		319			1,250
Foreign		(390	)		2,613
Total deferred income and mining tax (provision) benefit		(71	)		3,863
Total income and mining tax (provision) benefit	$	(4,634	)	$	1,062

	Three Months Ended March 31,
	2021			2020
Numerator
Net income (loss)	$	18,971		$	(17,185	)
Preferred stock dividends		(138	)		(138	)
Net income (loss) applicable to common shares	$	18,833		$	(17,323	)

Denominator
Basic weighted average common shares		534,101			523,215
Dilutive restricted stock units, warrants and deferred shares		6,426			0
Diluted weighted average common shares		540,527			523,215

Basic income (loss) per common share	$	0.04		$	(0.03	)
Diluted income (loss) per common share	$	0.03		$	(0.03	)

Quarterly average realized silver price per ounce		Quarterly dividend per share		Annualized dividend per share
$	30	$	0.01	$	0.04
$	35	$	0.02	$	0.08
$	40	$	0.03	$	0.12
$	45	$	0.04	$	0.16
$	50	$	0.05	$	0.20

Quarterly Average Realized Silver Price per Ounce	Quarterly Silver-Linked Dividend per Share	Annualized Silver-Linked Dividend per Share	Annualized Minimum Dividend	Annualized Dividends per Share: Silver-Linked and Minimum
$25	$0.0075	$0.03	$0.015	$0.045
$30	$0.0125	$0.05	$0.015	$0.065
$35	$0.0225	$0.09	$0.015	$0.105
$40	$0.0325	$0.13	$0.015	$0.145
$45	$0.0425	$0.17	$0.015	$0.185
$50	$0.0525	$0.21	$0.015	$0.225

Interest rates:
Spread over the London Interbank Offer Rate	2.25	-	3.25%
Spread over alternative base rate	1.25	-	2.25%
Standby fee per annum on undrawn amounts		0.50%
Covenant financial ratios:
Senior leverage ratio (debt secured by liens/EBITDA)	not more than 2.50:1
Leverage ratio (total debt less unencumbered cash/EBITDA)	not more than 4.00:1
Interest coverage ratio (EBITDA/interest expense)	not more than 3.00:1

Twelve-month period ending September 30,
2018	$	6,293
2019		4,179
2020		2,369
2021		1,260
Total		14,101
Less: imputed interest		(813	)
Net capital lease obligation	$	13,288

	March 31,		December 31,
Balance sheet line item:	2021		2020
Current derivatives assets	$	5.0	$	3.5
Non-current derivatives assets		4.2		4.2

March 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
2021 settlements		1,492		5		12,070		1,587	$	25.48	$	1,736	$	1.26	$	0.89
Contracts on forecasted sales
2021 settlements		—		—		33,841		30,479		N/A		N/A	$	1.20	$	0.89
2022 settlements		—		—		53,407		42,715		N/A		N/A	$	1.26	$	0.96
2023 settlements		—		—		41,171		—		N/A		N/A	$	1.27		N/A

Description	Balance at September 30, 2017		Balance at December 31, 2016		Input Hierarchy Level	Balance at March 31, 2021		Balance at December 31, 2020		Input Hierarchy Level
Assets:
Cash and cash equivalents:
Money market funds and other bank deposits	$	172,923	$	169,777	Level 1	$	139,750	$	129,830	Level 1
Available for sale securities:
Debt securities - municipal and corporate bonds		32,973		29,117	Level 2
Current and non-current investments:
Equity securities – mining industry		7,098		5,002	Level 1		11,717		19,389	Level 1
Trade accounts receivable:
Receivables from provisional concentrate sales		6,982		20,082	Level 2		35,274		27,864	Level 2
Restricted cash balances:
Certificates of deposit and other bank deposits		1,076		2,200	Level 1		1,053		1,053	Level 1
Derivative contracts:
Derivative contracts - current and non-current derivatives assets:
Metal forward and put option contracts							4,349		381	Level 2
Foreign exchange contracts		6,533		27	Level 2		9,192		7,647	Level 2
Metal forward contracts		394		5,403	Level 2
Total assets	$	227,979	$	231,608		$	201,335	$	186,164

Liabilities:
Derivative contracts:
Derivative contracts - current derivatives liabilities and other non-current liabilities:
Metal forward and put option contracts						$	4,742	$	11,737	Level 2
Foreign exchange contracts	$	—	$	5,288	Level 2		0		19	Level 2
Metal forward contracts		11,902		192	Level 2
Total liabilities	$	11,902	$	5,480
Total Liabilities						$	4,742	$	11,756

	As of September 30, 2017
	Parent		Guarantors			Non-Guarantors			Eliminations			Consolidated
	(in thousands)
Assets
Cash and cash equivalents	$	101,061	$	18,124		$	53,738		$	—		$	172,923
Other current assets		47,514		51,190			40,283			(575	)		138,412
Properties, plants, and equipment - net		1,964		1,248,762			774,881			—			2,025,607
Intercompany receivable (payable)		461,542		(222,677	)		(351,019	)		112,154			—
Investments in subsidiaries		1,491,449		—			—			(1,491,449	)		—
Other non-current assets		6,321		199,794			6,906			(153,780	)		59,241
Total assets	$	2,109,851	$	1,295,193		$	524,789		$	(1,533,650	)	$	2,396,183
Liabilities and Stockholders' Equity
Current liabilities	$	46,720	$	56,189		$	38,183		$	(25,295	)	$	115,797
Long-term debt		501,917		3,115			4,321			—			509,353
Non-current portion of accrued reclamation		—		61,964			18,794			—			80,758
Non-current deferred tax liability		—		13,349			126,280			(16,906	)		122,723
Other non-current liabilities		48,273		5,363			975			—			54,611
Shareholders' equity		1,512,941		1,155,213			336,236			(1,491,449	)		1,512,941
Total liabilities and stockholders' equity	$	2,109,851	$	1,295,193		$	524,789		$	(1,533,650	)	$	2,396,183

	As of December 31, 2016
	Parent		Guarantors			Non-Guarantors			Eliminations			Consolidated
	(in thousands)
Assets
Cash and cash equivalents	$	113,275	$	24,388		$	32,114		$	—		$	169,777
Other current assets		33,950		52,400			35,537			(573	)		121,314
Properties, plants, and equipment - net		2,103		1,258,890			771,692			—			2,032,685
Intercompany receivable (payable)		404,121		(222,072	)		(307,018	)		124,969			—
Investments in subsidiaries		1,496,787		—			—			(1,496,787	)		—
Other non-current assets		4,186		199,957			5,337			(161,579	)		47,901
Total assets	$	2,054,422	$	1,313,563		$	537,662		$	(1,533,970	)	$	2,371,677
Liabilities and Stockholders' Equity
Current liabilities	$	22,401	$	86,730		$	40,093		$	(22,999	)	$	126,225
Long-term debt		500,979		3,065			2,773			—			506,817
Non-current portion of accrued reclamation		—		63,025			16,902			—			79,927
Non-current deferred tax liability		—		14,212			122,855			(14,212	)		122,855
Other non-current liabilities		51,198		5,108			(325	)		28			56,009
Stockholders' equity		1,479,844		1,141,423			355,364			(1,496,787	)		1,479,844
Total liabilities and stockholders' equity	$	2,054,422	$	1,313,563		$	537,662		$	(1,533,970	)	$	2,371,677

	Three Months Ended September 30, 2017
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
	(in thousands)
Revenues	$	(626	)	$	61,887		$	79,578		$	—		$	140,839
Cost of sales		687			(29,320	)		(39,725	)		—			(68,358	)
Depreciation, depletion, amortization		—			(12,607	)		(16,237	)		—			(28,844	)
General and administrative		(4,217	)		(4,464	)		(848	)		—			(9,529	)
Exploration and pre-development		(129	)		(4,339	)		(4,544	)		—			(9,012	)
Research and development		—			(1,130	)		—			—			(1,130	)
Loss on derivative contracts		(11,226	)		—			—			—			(11,226	)
Foreign exchange gain (loss)		12,153			—			(16,917	)		—			(4,764	)
Lucky Friday suspension-related costs		—			(4,780	)		—			—			(4,780	)
Equity in earnings of subsidiaries		(6,271	)		—			—			6,271			—
Other (expense) income		11,041			1,202			(4,676	)		(14,752	)		(7,185	)
Income (loss) before income taxes		1,412			6,449			(3,369	)		(8,481	)		(3,989	)
(Provision) benefit from income taxes		—			(1,338	)		(8,013	)		14,752			5,401
Net income (loss)		1,412			5,111			(11,382	)		6,271			1,412
Preferred stock dividends		(138	)		—			—			—			(138	)
Income (loss) applicable to common shareholders		1,274			5,111			(11,382	)		6,271			1,274
Net income (loss)		1,412			5,111			(11,382	)		6,271			1,412
Changes in comprehensive income (loss)		7,636			—			1,022			(1,022	)		7,636
Comprehensive income (loss)	$	9,048		$	5,111		$	(10,360	)	$	5,249		$	9,048

	Nine Months Ended September 30, 2017
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
	(in thousands)
Revenues	$	(3,912	)	$	215,184		$	206,390		$	—		$	417,662
Cost of sales		353			(112,908	)		(111,982	)		—			(224,537	)
Depreciation, depletion, amortization		—			(41,875	)		(41,490	)		—			(83,365	)
General and administrative		(16,407	)		(10,877	)		(1,760	)		—			(29,044	)
Exploration and pre-development		(439	)		(8,736	)		(12,508	)		—			(21,683	)
Research and development		—			(2,125	)		—			—			(2,125	)
Loss on derivative contracts		(16,548	)		—			—			—			(16,548	)
Foreign exchange gain (loss)		22,286			(43	)		(33,152	)		—			(10,909	)
Lucky Friday suspension-related costs		—			(14,385	)		—			—			(14,385	)
Equity in earnings of subsidiaries		(5,925	)		—			—			5,925			—
Other (expense) income		24,822			(1,207	)		(14,146	)		(38,682	)		(29,213	)
Income (loss) before income taxes		4,230			23,028			(8,648	)		(32,757	)		(14,147	)
(Provision) benefit from income taxes		—			(9,239	)		(11,066	)		38,682			18,377
Net income (loss)		4,230			13,789			(19,714	)		5,925			4,230
Preferred stock dividends		(414	)		—			—			—			(414	)
Income (loss) applicable to common shareholders		3,816			13,789			(19,714	)		5,925			3,816
Net income (loss)		4,230			13,789			(19,714	)		5,925			4,230
Changes in comprehensive income (loss)		13,718			—			1,780			(1,780	)		13,718
Comprehensive income (loss)	$	17,948		$	13,789		$	(17,934	)	$	4,145		$	17,948

	Three Months Ended September 30, 2016
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
	(in thousands)
Revenues	$	(4,072	)	$	116,016		$	67,449		$	—		$	179,393
Cost of sales		—			(58,844	)		(31,685	)		—			(90,529	)
Depreciation, depletion, amortization		—			(19,036	)		(11,143	)		—			(30,179	)
General and administrative		(5,355	)		(5,469	)		(331	)		—			(11,155	)
Exploration and pre-development		(33	)		(1,343	)		(3,033	)		—			(4,409	)
Gain on derivative contracts		7			—			—			—			7
Acquisition costs		(1,766	)		1			—			—			(1,765	)
Equity in earnings of subsidiaries		52,606			—			—			(52,606	)		—
Other expense		(15,597	)		1,187			1,211			7,078			(6,121	)
Income (loss) before income taxes		25,790			32,512			22,468			(45,528	)		35,242
(Provision) benefit from income taxes		—			(8,994	)		6,621			(7,080	)		(9,453	)
Net income (loss)		25,790			23,518			29,089			(52,608	)		25,789
Preferred stock dividends		(138	)		—			—			—			(138	)
Income (loss) applicable to common shareholders		25,652			23,518			29,089			(52,608	)		25,651
Net income (loss)		25,790			23,518			29,089			(52,608	)		25,789
Changes in comprehensive income (loss)		(615	)		—			985			(985	)		(615	)
Comprehensive income (loss)	$	25,175		$	23,518		$	30,074		$	(53,593	)	$	25,174

	Nine Months Ended September 30, 2016
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
	(in thousands)
Revenues	$	(15,866	)	$	285,277		$	212,301		$	—		$	481,712
Cost of sales		—			(154,160	)		(95,002	)		—			(249,162	)
Depreciation, depletion, amortization		—			(49,521	)		(35,071	)		—			(84,592	)
General and administrative		(17,069	)		(13,671	)		(988	)		—			(31,728	)
Exploration and pre-development		(191	)		(3,990	)		(7,465	)		—			(11,646	)
Acquisition costs		(2,160	)		(7	)		—			—			(2,167	)
Equity in earnings of subsidiaries		68,727			—			—			(68,727	)		—
Other (expense) income		15,844			8,147			(43,039	)		(11,481	)		(30,529	)
Income (loss) before income taxes		49,285			72,075			30,736			(80,208	)		71,888
(Provision) benefit from income taxes		—			(22,213	)		(11,871	)		11,481			(22,603	)
Net income (loss)		49,285			49,862			18,865			(68,727	)		49,285
Preferred stock dividends		(414	)		—			—			—			(414	)
Income (loss) applicable to common shareholders		48,871			49,862			18,865			(68,727	)		48,871
Net income (loss)		49,285			49,862			18,865			(68,727	)		49,285
Changes in comprehensive income (loss)		1,689			8			3,238			(3,246	)		1,689
Comprehensive income (loss)	$	50,974		$	49,870		$	22,103		$	(71,973	)	$	50,974

	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2017			2016			2017			2016
Silver	$	43,228		$	83,668		$	140,662		$	211,825
Gold		73,603			67,534			203,279			203,455
Lead		6,373			17,141			28,093			46,194
Zinc		24,327			27,469			74,692			67,840
Less: Smelter and refining charges		(6,692	)		(16,419	)		(29,064	)		(47,602	)
Sales of products	$	140,839		$	179,393		$	417,662		$	481,712

Dollars are in thousands (except per ounce and per ton amounts)	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Sales	$	61,061		$	85,804		$	191,250		$	199,260
Cost of sales and other direct production costs		(29,320	)		(42,306	)		(100,799	)		(106,238	)
Depreciation, depletion and amortization		(12,607	)		(16,091	)		(39,442	)		(40,746	)
Cost of sales and other direct production costs and depreciation, depletion and amortization		(41,927	)		(58,397	)		(140,241	)		(146,984	)
Gross profit	$	19,134		$	27,407		$	51,009		$	52,276
Tons of ore milled		219,983			202,523			627,900			610,879
Production:
Silver (ounces)		2,344,315			2,445,328			6,205,659			7,020,688
Gold (ounces)		12,563			11,988			39,289			39,497
Zinc (tons)		14,325			12,144			40,697			42,330
Lead (tons)		4,851			4,803			14,080			15,236
Payable metal quantities sold:
Silver (ounces)		1,569,092			2,603,165			4,930,946			6,370,660
Gold (ounces)		7,862			12,364			30,920			35,883
Zinc (tons)		8,445			11,318			27,582			31,370
Lead (tons)		2,935			4,710			10,015			12,580
Ore grades:
Silver ounces per ton		13.65			15.40			12.84			14.61
Gold ounces per ton		0.09			0.09			0.10			0.10
Zinc percent		7.47			6.86			7.49			7.90
Lead percent		2.77			2.92			2.83			3.05
Mining cost per ton	$	69.46		$	69.66		$	69.64		$	69.20
Milling cost per ton	$	31.01		$	31.55		$	32.38		$	31.07
Total Cash Cost, After By-product Credits, Per Silver Ounce ⁽¹⁾	$	(0.15	)	$	4.80		$	0.73		$	4.68
All-In Sustaining Costs ("AISC"), After By-Product Credits, per Silver Ounce ⁽¹⁾	$	4.47		$	11.02		$	5.60		$	10.18

	Three Months Ended March 31,
	2021
Cash Cost, Before By-product Credits, per Silver Ounce		24.43
By-product credits		(16.81	)
Cash Cost, After By-product Credits, per Silver Ounce		7.62

	Three Months Ended March 31,
	2021
AISC, Before By-product Credits, per Silver Ounce	$	31.05
By-product credits		(16.81	)
AISC, After By-product Credits, per Silver Ounce		14.24