UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2021~~2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number

1-8491

HECLA MINING COMPANY

(Exact name of registrant as specified in its Charter)

	Delaware	77-0664171
	State or Other Jurisdiction of	I.R.S. Employer
	Incorporation or Organization	Identification No.

	6500 N. Mineral Drive, Suite 200
	Coeur d'Alene, Idaho	83815-9408
	Address of Principal Executive Offices	Zip Code

208-769-4100
Registrant's Telephone Number, Including Area Code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange

on which registered

Common Stock, par value $0.25 per share

New York Stock Exchange

Series B Cumulative Convertible Preferred Stock, par value $0.25 per share

HL-PB

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ . No ☐ .

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ . No ☐.☐

Table of Contents

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer ☒.☒	Accelerated filer ☐.☐
Non-accelerated filer ☐.☐	Smaller reporting company ☐.☐
Emerging growth company ☐.☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐.☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

~~Yes ☐. No ☒.~~

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class

Shares Outstanding May ~~4, 2021~~5, 2022

Common stock, par value

$0.25 per share

~~535,551,426~~

539,049,637

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Hecla Mining Company and Subsidiaries

Form 10-Q

For the Quarter Ended March 31, ~~2021~~2022

INDEX*

	Page
PART I - Financial Information

Item 1 – Condensed Consolidated Financial Statements (Unaudited)	3

Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income ~~(Loss)~~ - Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021	3

Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021	4

Condensed Consolidated Balance Sheets - March 31, ~~2021~~2022 and December 31, ~~2020~~2021	5

Condensed Consolidated Statements of Changes in Stockholders' Equity - Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021	6

Notes to Condensed Consolidated Financial Statements (Unaudited)	7

Forward-Looking Statements	21 20

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	2221

Item 3. Quantitative and Qualitative Disclosures About Market Risk	5547

Item 4. Controls and Procedures	5649

PART II - Other Information

Item 1 – Legal Proceedings	5649

Item 1A – Risk Factors	5649

Item 24 – ~~Unregistered Sales of Securities and Use of Proceeds~~Mine Safety Disclosures	5649

Item 46 – ~~Mine Safety Disclosures~~Exhibits	5649

~~Item 6 – Exhibits~~Signatures	57

~~Signatures~~51	58

*Items 2, 3 and 5 of Part II are omitted as they are not applicable.

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Part I - Financial Information

Item 1. Financial Statements

Hecla Mining Company and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income ~~(Loss)~~ (Unaudited)

(Dollars and shares in thousands, except for per-share amounts)

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
	March 31, 2022			March 31, 2021
Sales of products	$	186,499		$	210,852
Cost of sales and other direct production costs		105,772			96,382
Depreciation, depletion and amortization		35,298			47,069
Total cost of sales		141,070			143,451
Gross profit		45,429			67,401
Other operating expenses:
General and administrative		8,294			8,007
Exploration and pre-development		12,808			6,690
Care and maintenance		6,205			4,318
Provision for closed operations and reclamation		901			3,709
Other operating expense		2,463			3,648
Total other operating expense		30,671			26,372
Income from operations		14,758			41,029
Other income (expense):
Interest expense		(10,406	)		(10,744	)
Fair value adjustments, net		5,965			(1,875	)
Net foreign exchange loss		(2,038	)		(2,064	)
Other non-operating income (expense)		1,505			(152	)
Total other expense		(4,974	)		(14,835	)
Income before income and mining taxes		9,784			26,194
Income and mining tax provision		(5,631	)		(4,743	)
Net income		4,153			21,451
Preferred stock dividends		(138	)		(138	)
Income applicable to common stockholders	$	4,015		$	21,313
Comprehensive income:
Net income	$	4,153		$	21,451
Change in fair value of derivative contracts designated as hedge transactions		(33,165	)		1,832
Comprehensive (loss) income	$	(29,012	)	$	23,283
Basic income per common share after preferred dividends	$	0.01		$	0.04
Diluted income per common share after preferred dividends	$	0.01		$	0.04
Weighted average number of common shares outstanding - basic		538,490			534,101
Weighted average number of common shares outstanding - diluted		544,061			540,527
Cash dividends per common share	$	0.00625		$	0.00875

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

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Hecla Mining Company and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

	Three Months Ended						Three Months Ended
	March 31, 2021			March 31, 2020			March 31, 2022			March 31, 2021
Operating activities:
Net income (loss)	$	18,971		$	(17,185	)
Non-cash elements included in net income (loss):
Net income							$	4,153		$	21,451
Non-cash elements included in net income:
Depreciation, depletion and amortization		49,546			41,630			35,456			46,957
Unrealized loss on investments		3,506			978
Gain on exchange of investments		(1,158	)		0
Provision for reclamation and closure costs		4,529			1,548			1,643			4,529
Stock compensation		500			1,219
Stock-based compensation expense								1,271			500
Deferred taxes		32			(3,252	)		2,234			141
Amortization of loan origination fees and loss on extinguishment of debt		539			2,140
Gain on derivative contracts		(10,962	)		(10,437	)
Foreign exchange loss (gain)		1,755			(8,066	)
Fair value adjustments, net								(2,245	)		(8,623	)
Foreign exchange loss								2,280			1,755
Other non-cash items, net		8			(104	)		483			556
Change in assets and liabilities:
Accounts receivable		(2,664	)		9,955			2,779			(2,664	)
Inventories		2,120			(6,602	)		(5,081	)		2,120
Other current and non-current assets		1,528			(2,642	)		1,696			1,528
Accounts payable and accrued liabilities		(24,545	)		(11,879	)		(13,907	)		(24,545	)
Accrued payroll and related benefits		(7,995	)		9,495			6,909			(7,995	)
Accrued taxes		2,031			1,332			3,754			2,031
Accrued reclamation and closure costs and other non-current liabilities		195			(3,203	)		(3,516	)		195
Cash provided by operating activities		37,936			4,927			37,909			37,936
Investing activities:
Additions to properties, plants, equipment and mineral interests		(21,413	)		(19,870	)		(21,478	)		(21,413	)
Proceeds from sale of investments								2,487			0
Proceeds from disposition of properties, plants and equipment		19			154			617			19
Purchases of investments								(10,868	)		0
Net cash used in investing activities		(21,394	)		(19,716	)		(29,242	)		(21,394	)
Financing activities:
Dividends paid to common stockholders		(4,688	)		(1,304	)
Dividends paid to preferred stockholders		(138	)		(138	)
Acquisition of treasury shares								(1,921	)		0
Dividends paid to common and preferred stockholders								(3,509	)		(4,826	)
Credit facility fees paid		(82	)		(458	)		(54	)		(82	)
Borrowings on debt		0			679,500
Repayments of debt		0			(506,500	)
Repayments of finance leases		(1,881	)		(1,284	)		(1,695	)		(1,881	)
Net cash (used in) provided by financing activities		(6,789	)		169,816
Net cash used in financing activities								(7,179	)		(6,789	)
Effect of exchange rates on cash		167			(1,736	)		519			167
Net increase in cash, cash equivalents and restricted cash and cash equivalents		9,920			153,291			2,007			9,920
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period		130,883			63,477			211,063			130,883
Cash, cash equivalents and restricted cash and cash equivalents at end of period	$	140,803		$	216,768		$	213,070		$	140,803
Supplemental disclosure of cash flow information:
Cash paid for interest	$	18,406		$	13,984		$	18,603		$	18,406
Cash paid for income and mining taxes							$	679		$	1,980
Significant non-cash investing and financing activities:
Addition of finance lease obligations and right-of-use assets	$	3,120		$	0		$	2,864		$	3,120
Accounts receivable for proceeds on exchange of investments	$	1,832		$	0		$	0		$	1,832

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

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Hecla Mining Company and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(In thousands, except shares)

		March 31, 2021			December 31, 2020				March 31, 2022			December 31, 2021
ASSETS	ASSETS							ASSETS
Current assets:
Cash and cash equivalents		$	139,750		$	129,830			$	212,029		$	210,010
Accounts receivable:
Trade			35,274			27,864				33,324			36,437
Other, net			8,475			11,329				8,586			8,149
Inventories:
Concentrates, doré, and stockpiled ore			56,917			57,936				29,852			25,906
Materials and supplies			37,335			38,608				43,238			41,859
Derivatives assets			7,195			3,470
Other current assets			12,971			15,644				16,927			19,266
Total current assets			297,917			284,681				343,956			341,627
Investments			11,717			15,148				29,204			10,844
Restricted cash and investments			1,053			1,053				1,041			1,053
Properties, plants, equipment and mineral interests, net			2,320,547			2,345,219				2,298,858			2,310,810
Operating lease right-of-use assets			9,775			10,628				12,342			12,435
Deferred taxes			3,886			2,912				45,562			45,562
Derivatives assets			6,346			4,558
Other non-current assets			3,836			3,525				7,936			6,477
Total assets		$	2,655,077		$	2,667,724			$	2,738,899		$	2,728,808
LIABILITIES	LIABILITIES							LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities		$	53,130		$	68,516			$	73,786		$	68,100
Accrued payroll and related benefits			22,800			31,807				34,864			28,714
Accrued taxes			7,854			8,349				16,128			12,306
Finance leases			6,706			6,491
Operating leases			2,832			3,008
Finance and operating leases										8,535			8,098
Accrued reclamation and closure costs			6,592			5,582				10,594			9,259
Accrued interest			5,175			14,157				5,232			14,454
Derivatives liabilities			3,906			11,737				38,992			19,353
Other current liabilities			123			138				109			99
Total current liabilities			109,118			149,785				188,240			160,383
Finance leases			10,304			9,274
Operating leases			6,954			7,634
Finance and operating leases										18,385			17,726
Accrued reclamation and closure costs			113,671			110,466				103,612			103,972
Long-term debt			507,992			507,242				508,852			508,095
Deferred tax liability			149,220			144,330				140,810			149,706
Pension liability			28,797			44,144
Derivatives liabilities										43,402			18,528
Other non-current liabilities			4,146			4,364				7,055			9,611
Total liabilities			930,202			977,239				1,010,356			968,021
Commitments and contingencies (Notes 4, 7, 8, and 10)
STOCKHOLDERS’ EQUITY	STOCKHOLDERS’ EQUITY							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				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
Common stock, $0.25 par value, 750,000,000 authorized shares; issued March 31, 2022 — 546,635,233 shares and December 31, 2021 — 545,534,760 shares										136,657			136,391
Capital surplus			2,021,072			2,003,576				2,036,417			2,034,485
Accumulated deficit			(377,229	)		(391,374	)			(353,007	)		(353,651	)
Accumulated other comprehensive loss			(31,057	)		(32,889	)			(61,621	)		(28,456	)
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	)
Less treasury stock, at cost; March 31, 2022 — 7,728,800 shares and December 31, 2021 - 7,395,295 shares issued and held in treasury										(29,942	)		(28,021	)
Total stockholders’ equity			1,724,875			1,690,485				1,728,543			1,760,787
Total liabilities and stockholders’ equity		$	2,655,077		$	2,667,724			$	2,738,899		$	2,728,808

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

Table of Contents

Hecla Mining Company and Subsidiaries

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

(Dollars are in thousands, except for share and per share amounts)

Three Months Ended 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, 2022
	Series B Preferred Stock		Common Stock		Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss, net			Treasury Stock			Total
Balances, January 1, 2022	$	39	$	136,391	$	2,034,485		$	(353,651	)	$	(28,456	)	$	(28,021	)	$	1,760,787
Net income		0		0		0			4,153			0			0			4,153
Stock-based compensation expense		0		0		1,271			0			0			0			1,271
Incentive compensation units distributed (888,000 shares)		0		222		(222	)		0			0			(1,921	)		(1,921	)
Common stock ($0.00625 per share) and Series B Preferred Stock ($0.875 per share) dividends declared		0		0		0			(3,509	)		0			0			(3,509	)
Common stock issued for 401(k) match (180,000 shares)		0		44		883			0			0			0			927
Other comprehensive income		0		0		0			0			(33,165	)		0			(33,165	)
Balances, March 31, 2022	$	39	$	136,657	$	2,036,417		$	(353,007	)	$	(61,621	)	$	(29,942	)	$	1,728,543

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

	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	$	(368,074	)	$	(32,889	)	$	(23,496	)	$	1,713,785
Net income		0		0		0		21,451			0			0			21,451
Stock-based compensation expense		0		0		483		0			0			0			483
Common stock ($0.00875 per share) and Series B Preferred Stock ($0.875 per share) dividends declared		0		0		0		(4,826	)		0			0			(4,826	)
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	$	(351,449	)	$	(31,057	)	$	(23,496	)	$	1,750,655

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

Table of Contents

Note 1. Basis of Preparation of Financial Statements

The accompanying unaudited interim condensed consolidated financial statements of Hecla Mining Company and its subsidiaries (collectively, ~~“Hecla”,~~“Hecla,” “the ~~Company”, “we”, “our”~~Company,” “we,” “our,” or ~~“us”,~~“us,” except where the context requires otherwise) have been prepared in accordance with the instructions to Form 10-Q and do not include all information and disclosures required annually by generally accepted accounting principles in the United States (“GAAP”). Therefore, this information should be read in conjunction with ~~Hecla Mining Company’s~~Hecla’s consolidated financial statements and notes contained in our annual report on Form 10-K for the year ended December 31, ~~2020~~2021 (“~~2020~~2021 Form 10-K”). The consolidated December 31, ~~2020~~2021 balance sheet data was derived from our audited consolidated financial statements. The information furnished herein reflects all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods reported. All such adjustments are, in the opinion of management, of a normal recurring nature. Operating results for the three-month period ended March 31, ~~2021~~2022 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2021.~~2022.

The 2019 novel strain of coronavirus ("(“COVID-~~19"~~19”) was characterized as a global pandemic by the World Health Organization on March 11, ~~2020,~~ ~~and COVID-~~19 ~~resulted in travel restrictions and business slowdowns or shutdowns in affected areas. In late~~ ~~March 2020,~~ ~~the Government of Quebec ordered the mining industry to reduce to minimum operations as part of the fight against COVID-~~~~19,~~ ~~causing us to suspend our Casa Berardi operations from~~ ~~March 24, 2020~~ ~~until~~ ~~April 15, 2020~~ ~~when mining operations resumed. In early~~ ~~April 2020,~~ ~~the Government of Mexico issued a similar order causing us to suspend our San Sebastian operations until~~ ~~May 30,~~ 2020. ~~In addition, restrictions imposed by the State of Alaska in late~~ ~~March~~ ~~caused us~~We continue to ~~revise the normal operating procedures for staffing operations at Greens Creek. These suspension orders impacted us in the~~ ~~first~~ ~~half of~~ ~~2020~~ by curtailing our expected production of gold at Casa Berardi by approximately 11,700 ounces, which resulted in a reduction in related revenue for that period. We continued to incur costs at Casa Berardi and San Sebastian while operations were suspended. At Casa Berardi and San Sebastian, suspension costs in ~~2020~~ ~~totaled $1.6 million and $1.8 million, respectively. In addition, we incurred 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.~~ ~~At Lucky Friday and Nevada Operations, COVID-~~19 procedures have been implemented without a significant impact on production or operating costs. It is possible that future restrictions at any of our operations could have an adverse impact on operations or financial results beyond the ~~first~~ ~~quarter of~~ ~~2021.~~

~~We have taken~~take precautionary measures to mitigate the impact of COVID-19, including implementing operational plans and practices. As long as they are required, the operational practices implemented could continue to have an adverse impact on our operating results due to deferred production and revenues or additional costs. We incurred $0.4 million and $1.6 million in COVID-19 mitigation costs during the three months ended March 31, 2022 and 2021, respectively. We continue to monitor the rapidly evolving situation and guidance from federal, state, local and foreign governments and public health authorities and may take additional actions based on their recommendations. The extent of the impact of COVID-19 on our business and financial results will also depend on future developments, including the duration and spread of the outbreak and the success of the current vaccination programs ~~being rolled out within the markets in which we operate~~ and the related impact on prices, demand, creditworthiness and other market conditions and governmental reactions, all of which are highly uncertain.

~~Correction of an Immaterial Error~~

~~During the~~ ~~first~~ ~~quarter of~~ ~~2021~~ ~~we reclassified certain state mining income taxes from~~ ~~Cost of sales and other direct production costs~~ to ~~Income~~ ~~and mining~~ ~~tax provision~~ ~~prospectively effective~~ ~~January 1, 2021.~~ ~~The reclassification required us to recognize previously unrecognized deferred taxes. The impact of this was an adjustment of $11.9 million to accumulated deficit at~~ ~~January 1, 2019~~ ~~to recognize the deferred tax liability. This adjustment resulted~~Certain amounts in the ~~January 1, 2020~~ ~~accumulated deficit balance presented in this Form~~ 10-Qprior year have been reclassified to ~~increase~~conform to ~~$365.2 million.~~the current year presentation.

Note 2. Business Segments and Sales of Products

We discover, acquire and develop mines and other mineral interests and produce and market (i) concentrates, ~~carbon material and doré~~ containing silver, gold, lead and ~~zinc.~~zinc, (ii) carbon material containing silver and gold, and (iii) doré containing silver and gold. We are currently organized and managed in ~~five~~ ~~segments, which represent our operating units: the~~four segments: Greens Creek, ~~unit, the~~ Lucky Friday, ~~unit, the~~ Casa Berardi ~~unit, the San Sebastian exploration unit,~~ and ~~the~~ Nevada ~~Operations unit.~~Operations.

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General corporate activities not associated with operating ~~units~~mines and their various exploration activities, as well as discontinued operations and idle properties, are presented as “other.” Interest expense, interest income and income and mining taxes are considered general corporate items, and are not allocated to our segments.

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The following tables present information about our reportable segments for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 (in thousands):

	Three Months Ended March 31,						Three Months Ended March 31,
	2021			2020			2022			2021
Net sales to unaffiliated customers:
Sales of products:
Greens Creek	$	98,409		$	53,833		$	86,090		$	98,409
Lucky Friday		29,122			2,830			38,040			29,122
Casa Berardi		72,911			46,172			62,101			72,911
San Sebastian		173			9,927
Nevada Operations		10,237			24,163			268			10,237
Other								0			173
	$	210,852		$	136,925		$	186,499		$	210,852
Income (loss) from operations:
Greens Creek	$	44,600		$	4,117		$	34,586		$	44,600
Lucky Friday		6,323			(8,120	)		8,771			6,323
Casa Berardi		9,117			(3,880	)		(2,699	)		11,706
San Sebastian		(2,263	)		679
Nevada Operations		(3,140	)		2,889			(12,231	)		(3,140	)
Other		(16,188	)		(10,749	)		(13,669	)		(18,460	)
	$	38,449		$	(15,064	)	$	14,758		$	41,029

The following table presents identifiable assets by reportable segment as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021 (in thousands):

	March 31, 2021		December 31, 2020		March 31, 2022		December 31, 2021
Identifiable assets:
Greens Creek	$	609,612	$	610,360	$	578,565	$	589,944
Lucky Friday		513,645		520,463		526,971		516,545
Casa Berardi		683,103		694,522		710,374		701,868
San Sebastian		41,238		42,617
Nevada Operations		510,514		513,309		467,092		468,985
Other		296,965		286,453		455,897		451,466
	$	2,655,077	$	2,667,724	$	2,738,899	$	2,728,808

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Sales of products by metal for the three-month periods ended March 31, ~~2021~~2022 and ~~2020~~2021 were as follows (in thousands):

	Three Months Ended March 31,						Three Months Ended March 31,
	2021			2020			2022			2021

Silver	$	77,760		$	37,572		$	66,332		$	77,760
Gold		101,408			90,694			77,168			101,408
Lead		15,893			6,420			19,564			15,893
Zinc		29,191			17,308			35,638			29,191
Less: Smelter and refining charges		(13,400	)		(15,069	)		(12,203	)		(13,400	)
Sales of products	$	210,852		$	136,925		$	186,499		$	210,852

Sales of products for the first three months of ~~2021~~2022 and ~~2020~~2021 included a net ~~gains~~loss of $4.8 million and net gain of $2.8 ~~million and $1.7~~ million, respectively, on financially-settled forward ~~and put~~ option contracts for silver, gold, lead and zinc contained in our sales. See Note 8 for more information.

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Note 3. Income and MiningTaxes

Major components of our income and mining tax (provision) benefit for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 are as follows (in thousands):

	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2021			2020			2022			2021
Current:
Domestic	$	(2,277	)	$	(732	)	$	(2,103	)	$	(2,277	)
Foreign		(2,286	)		(2,069	)		(1,741	)		(2,286	)
Total current income and mining tax provision		(4,563	)		(2,801	)		(3,844	)		(4,563	)

Deferred:
Domestic		319			1,250			(5,091	)		896
Foreign		(390	)		2,613			3,304			(1,076	)
Total deferred income and mining tax (provision) benefit		(71	)		3,863
Total income and mining tax (provision) benefit	$	(4,634	)	$	1,062
Total deferred income and mining tax provision								(1,787	)		(180	)
Total income and mining tax provision							$	(5,631	)	$	(4,743	)

The income and mining tax ~~(provision) benefit~~provision for the three ~~months~~-month periods ended March 31, ~~2021~~2022 and ~~2020~~2021 varies from the amounts that would have resulted from applying the statutory tax rates to pre-tax income due primarily to the impact of taxation in foreign jurisdictions and ~~reversal~~non-recognition of ~~the valuation allowance portion related to~~ net operating ~~loss utilization.~~losses and foreign exchange gains and losses in certain jurisdictions.

~~Effective~~For the ~~January 1, 2021,~~three-month period ended March 31, 2022, we ~~prospectively reclassified certain income based state and provincial taxes~~used the annual effective tax rate method to calculate the tax provision, a change from ~~Cost of Sales and other direct production costs~~ to ~~Income~~ ~~and mining~~ ~~tax (provision) benefit~~~~. The income and mining tax provision~~the discrete method used for the three ~~months~~-month period ended March 31, 2021, ~~31,~~~~2021~~ ~~increased by $3.1 million~~ due to reversal of valuation allowance in the ~~reclassification.~~fourth quarter of 2021. Valuation allowances on Nevada, Mexico and certain Canadian net operating losses were treated as discrete adjustments to the annual effective tax rate method calculation, partially causing the increase in the income tax rate for the three-month period ended March 31, 2022 as compared to March 31, 2021.

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Note 4. Employee Benefit Plans

We sponsor defined benefit pension plans covering substantially all U.S. employees. Net periodic pension cost for the plans consisted of the following for the three ~~months~~-month periods ended March 31, ~~2021~~2022 and ~~2020~~2021 (in thousands):

	Three Months Ended March 31,						Three Months Ended March 31,
	2021			2020			2022			2021
Service cost	$	1,455		$	1,334		$	1,566		$	1,455
Interest cost		1,248			1,404			1,369			1,248
Expected return on plan assets		(2,313	)		(1,872	)		(3,363	)		(2,313	)
Amortization of prior service cost		99			29			128			99
Amortization of net loss		1,125			1,163			512			1,125
Net periodic pension cost	$	1,614		$	2,058		$	212		$	1,614

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The service cost component of net periodic pension cost is included in the same line items of our condensed consolidated financial statements as other employee compensation costs, and the net gain of $1.4 million and net expense of $0.2 million for the three ~~months~~-month periods ended March 31, ~~2021~~2022 and ~~2020~~2021, ~~of $0.2 million and $0.7 million,~~ respectively, related to all other components of net periodic pension cost is included in other (expense) income on our condensed consolidated statements of operations and comprehensive ~~income~~ (loss). income.

In ~~January 2021,~~ ~~we contributed $16.8 million in shares of our common stock to our supplemental executive retirement plan, and expect to contribute approximately $0.8 million during the remainder of~~ ~~2021.~~We do not expect to be required to contribute to our defined benefit pension plans in ~~2021,~~2022, but may do so.

Note 5. Income ~~(Loss)~~ Per Common Share

We calculate basic income ~~(loss)~~ per common share on the basis of the weighted average number of shares of common stock outstanding during the period. Diluted income per share is calculated using the weighted average number of shares of common stock outstanding during the period plus the effect of potential dilutive common shares during the period using the treasury stock and if-converted methods.

Potential dilutive shares of common stock include outstanding unvested restricted stock awards, performance-based share awards, stock units, warrants and convertible preferred stock for periods in which we have reported net income. For periods in which we report net losses, potential dilutive shares of common stock are excluded, as their conversion and exercise would be anti-dilutive.

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The following table represents net income ~~(loss)~~ per common share – basic and diluted (in thousands, except income (loss) per share):

	Three Months Ended March 31,						Three Months Ended March 31,
	2021			2020			2022			2021
Numerator
Net income (loss)	$	18,971		$	(17,185	)
Net income							$	4,153		$	21,451
Preferred stock dividends		(138	)		(138	)		(138	)		(138	)
Net income (loss) applicable to common shares	$	18,833		$	(17,323	)
Net income applicable to common shares							$	4,015		$	21,313

Denominator
Basic weighted average common shares		534,101			523,215			538,490			534,101
Dilutive restricted stock units, warrants and deferred shares		6,426			0
Dilutive incentive compensation units, warrants and deferred shares								5,571			6,426
Diluted weighted average common shares		540,527			523,215			544,061			540,527

Basic income (loss) per common share	$	0.04		$	(0.03	)
Diluted income (loss) per common share	$	0.03		$	(0.03	)
Basic income per common share							$	0.01		$	0.04
Diluted income per common share							$	0.01		$	0.04

Diluted income ~~(loss)~~ per common share for the three ~~months~~-month periods ended March 31, ~~2021~~2022 and ~~2020~~2021 excludes the potential effects of outstanding shares of our convertible preferred stock, as their conversion would have no effect on the calculation of dilutive shares.

For the three months ended March 31, 2022, the calculation of diluted income per common share included (i) 1,954,773 incentive compensation units that were unvested during the period, (ii) 1,506,950 warrants to purchase one share of common stock and (iii) 2,109,056 deferred shares that were dilutive. For the three months ended March 31,2021, the calculation of diluted income per common share included (i) 2,863,038 ~~restricted stock~~incentive compensation units that were unvested during the period, (ii) 1,536,615 warrants to purchase one share of common stock and (iii) 2,026,440 deferred shares that were dilutive. ~~For the~~ ~~three~~ ~~months ended~~ ~~March~~ ~~31,~~~~2020,~~ all outstanding restricted stock units, warrants and deferred shares were excluded from the computation of diluted loss per share, as our reported net losses for those periods would cause their conversion and exercise to have no ~~effect on the calculation of loss per share.~~

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Note 6. Stockholders’ Equity

Stock-based Compensation Plans

Stock-based compensation expense for restricted stock unit and performance-based grants to employees and shares issued to non-employee directors totaled ~~$0.5~~$1.3 million and ~~$1.2~~$0.5 million for the first three months of ~~2021~~2022 and ~~2020,~~2021, respectively.

Common Stock Dividends

On February ~~18, 2021,~~21, 2022, our Board of Directors declared a quarterly cash dividend of ~~$0.00875~~$0.00625 per share of common stock, consisting of $0.00375 per share for the minimum dividend component of our common stock dividend policy and ~~$0.005~~$0.0025 per share for the silver-linked dividend component of the policy, for a total dividend of ~~$4.7~~$3.4 million paid in March ~~2021.~~2022. The realized silver price of ~~$25.16~~$23.49 in the fourth quarter of ~~2020~~2021 satisfied the criterion for the silver-linked dividend component of our common stock dividend policy.

~~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

~~At-The-Market Equity Distribution Agreement~~

~~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. ~~NaN shares have been sold under the agreement as of~~ ~~March~~ ~~31,~~~~2021.~~

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Note 7. Debt, Credit Facility and Leases

Our debt as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021 consisted of our 7.25% Senior Notes due February 15, 2028 ("“Senior ~~Notes"~~Notes”) and our Series 2020-A Senior Notes due July 9, 2025 (the “IQ Notes”). The following tables summarize our long-term debt balances, excluding interest, as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021 (in thousands):

	March 31, 2021								March 31, 2022
	Senior Notes			IQ Notes		Total			Senior Notes			IQ Notes		Total
Principal	$	475,000		$	38,359	$	513,359		$	475,000		$	38,605	$	513,605
Unamortized discount/premium and issuance costs		(6,234	)		867		(5,367	)		(5,324	)		571		(4,753	)
Long-term debt balance	$	468,766		$	39,226	$	507,992		$	469,676		$	39,176	$	508,852

	December 31, 2020								December 31, 2021
	Senior Notes			IQ Notes		Total			Senior Notes			IQ Notes		Total
Principal	$	475,000		$	37,886	$	512,886		$	475,000		$	38,051	$	513,051
Unamortized discount/premium and issuance costs		(6,462	)		818		(5,644	)		(5,552	)		596		(4,956	)
Long-term debt balance	$	468,538		$	38,704	$	507,242		$	469,448		$	38,647	$	508,095

The following table summarizes the scheduled annual future payments, including interest, for our Senior Notes, IQ Notes, and finance and operating leases as of March 31, ~~2021~~2022 (in thousands). The amounts for the IQ Notes are stated in U.S. dollars ~~("USD"~~(“USD”) based on the USD/Canadian dollar ~~("CAD"~~(“CAD”) exchange rate as of March 31, ~~2021.~~2022.

Twelve-month period ending March 31,	Senior Notes		IQ Notes		Finance Leases		Operating Leases		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	$	34,438	$	2,515	$	6,365	$	3,057
2024		34,438		2,499		3,643		2,002		34,438		2,515		4,881		2,528
2025		34,438		2,499		2,076		549		34,438		2,515		3,313		1,079
2026		34,438		39,045		0		525		34,438		39,295		943		1,059
2027										34,438		0		0		1,041
Thereafter		539,568		0		0		2,213		505,130		0		0		6,174
Total	$	711,758	$	49,041	$	18,180	$	11,691	$	677,320	$	46,840	$	15,502	$	14,938

Credit Facility

In July 2018, we entered into a $250 million senior secured revolving credit facility which has a term ending on February 7, 2023. As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, 0 ~~amounts~~borrowings were outstanding under the facility.

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We are also able to obtain letters of credit under the facility, and for any such letters we are required to pay a participation fee of between 2.25% and 4.00% of the amount of the letters of credit based on our total leverage ratio, as well as a fronting fee to each issuing bank of 0.20% annually on the average daily dollar amount of any outstanding letters of credit. There were ~~$20.3~~$17.3 million in letters of credit outstanding as of March 31, ~~2021.~~2022.

We believe we were in compliance with all covenants under the credit agreement as of March 31, ~~2021.~~2022.

Note 8. Derivative Instruments

General

Our current risk management policy provides that up to 75% of:

•

our future foreign currency-related operating cost exposure for five years into the future may be ~~hedged and for potential additional programs to manage other foreign currency-related exposure areas; and~~hedged;

•

our planned lead and zinc metals price exposure for five years into the future, with certain other limitations, to be covered under derivatives programs that would establish a ceiling for prices to be realized on future metals sales; and

•

our planned silver and gold metals price exposure for five years into the future, with certain other limitations, may be covered under derivatives programs that would establish a floor, but not a ceiling, for prices to be realized on future metals sales. We currently do not utilize this program.

In addition, our risk management policy provides for (i) potential additional programs to manage other foreign currency exposures and (ii) that price exposure between the time of shipment and final settlement on silver, gold, lead and zinc contained in our concentrate shipments may be covered under derivatives programs that would establish prices to be realized on those sales.

These instruments ~~do, however,~~ expose us to (i) credit risk in the form of non-performance by counterparties for contracts in which the contract price exceeds the spot price of the hedged commodity or foreign currency and (ii) price risk to the extent that the spot price exceeds the contract price for quantities of our production and/or forecasted costs covered under contract positions.

Foreign Currency

Our wholly-owned subsidiaries owning the Casa Berardi and San Sebastian operations are USD-functional entities which routinely incur expenses denominated in CAD and Mexican pesos ~~("MXN"~~(“MXN”), respectively. Such expenses expose us to exchange rate fluctuations between the USD and CAD and MXN. We ~~have~~utilize a program to manage our exposure to fluctuations in the exchange rate between the USD and CAD and ~~MXN for these subsidiaries'~~the impact on our future operating costs denominated in CAD. In November 2021, we initiated a similar program related to future development costs denominated in CAD, and ~~MXN.~~have used a similar program, on a limited basis, related to interest payments on our IQ Notes (see Note 7). The programs utilize forward contracts to buy ~~CAD and MXN, and each~~CAD. Each contract related to operating costs is designated as a cash flow ~~hedge.~~hedge, while contracts related to development and interest costs have not been designated as hedges as of March 31,2022. As of March 31, ~~2021,~~2022, we have ~~133~~146 forward contracts outstanding to buy a total of CAD$~~256.8~~276.7 million having a notional amount of USD$~~194.8~~213.3 million. The CAD contracts are related to forecasted cash operating and development costs at Casa Berardi to be incurred from ~~2021~~2022 through ~~2024~~2025 and have CAD-to-USD exchange rates ranging between 1.2702 and ~~1.3785. There were 0 outstanding contracts for MXN as of~~ ~~March~~ ~~31,~~~~2021.~~1.3333.

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As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, we recorded the following balances for the fair value of the contracts (in millions):

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,		December 31,
Balance sheet line item:	2022		2021
Other current assets	$	3.9	$	2.7
Other non-current assets		3.9		2.5

Net unrealized gains of approximately ~~$9.5~~$7.8 million related to the effective portion of the hedges were included in accumulated other comprehensive loss as of March 31, ~~2021.~~2022. 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 ~~$4.8~~$3.7 million in net unrealized gains included in accumulated other comprehensive loss as of March 31, ~~2021~~2022 will be reclassified to current earnings in the next twelve months. Net realized gains of approximately ~~$0.6~~$1.1 million on contracts related to underlying operating 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 three months ended March 31, ~~2021.~~2022. ~~NaN~~Net gains of approximately $0.4 million related to contracts not designated as hedges and 0 net unrealized gains or losses related to ineffectiveness of the hedges were included in ~~current earnings~~fair value adjustments, net on our consolidated statements of operations and comprehensive income for the three months ended March 31, ~~2021.~~2022.

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Metals Prices

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; and

•

changes in prices of zinc and lead (but not silver and gold) contained in our forecasted future concentrate shipments.

The following tables summarize the quantities of metals committed under forward sales contracts at March 31, ~~2021~~2022 and December 31, ~~2020:~~2021:

March 31, 2021	Ounces/pounds under contract (in 000's)								Average price per ounce/pound
March 31, 2022																	Ounces/pounds under contract (in 000's)								Average price per ounce/pound
	Silver		Gold		Zinc		Lead		Silver		Gold		Zinc		Lead		Silver		Gold		Zinc		Lead		Silver		Gold		Zinc		Lead
	(ounces)		(ounces)		(pounds)		(pounds)		(ounces)		(ounces)		(pounds)		(pounds)		(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
2022 settlements																		1,573		5		16,976		5,732	$	24.73	$	1,912	$	1.27	$	0.97
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		0		0		37,644		46,517		N/A		N/A	$	1.31	$	0.98
2023 settlements		—		—		41,171		—		N/A		N/A	$	1.27		N/A		0		0		78,264		75,618		N/A		N/A	$	1.30	$	1.00
2024 settlements																		0		0		64,650		23,149		N/A		N/A	$	1.32	$	1.01

December 31, 2021	Ounces/pounds under contract (in 000's)								Average price per ounce/pound
	Silver		Gold		Zinc		Lead		Silver		Gold		Zinc		Lead
	(ounces)		(ounces)		(pounds)		(pounds)		(ounces)		(ounces)		(pounds)		(pounds)
Contracts on provisional sales
2022 settlements		1,814		6		13,371		4,575	$	23.02	$	1,812	$	1.39	$	0.96
Contracts on forecasted sales
2022 settlements		0		0		57,706		59,194		N/A		N/A	$	1.28	$	0.98
2023 settlements		0		0		76,280		71,650		N/A		N/A	$	1.29	$	1.00

December 31, 2020

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
1,282 4 23,314 4,905 $ 25.00 $ 1,858 $ 1.19 $ 0.90
Contracts on forecasted sales

2021 settlements
— — 41,577 30,876 N/A N/A $ 1.17 $ 0.88
2022 settlements
— — 18,519 — N/A N/A $ 1.28 N/A

InEffective ~~June 2019,~~November 1, 2021, we ~~began utilizing financially-settled put option~~designated the contracts ~~to manage the exposure of~~for lead and zinc contained in our forecasted future ~~gold~~shipments as hedges for accounting purposes, with gains and ~~silver sales~~losses deferred to ~~potential declines in market prices for those metals. These put~~accumulated other comprehensive loss until the hedged product ships. Prior to November 1, 2021, these contracts ~~gave us the option, but~~had not ~~the obligation, to realize established prices on quantities of silver and gold to be sold in the future. As of~~ ~~December~~ ~~31,~~~~2020,~~ we had put contracts that provided average floor prices of $16.50 per ounce for silver and $1,650 per ounce for gold for a total of 1.1 million silver ounces and 12,992 gold ounces. We had 0 put option contracts outstanding as of ~~March~~ ~~31,~~~~2021.~~

~~These forward and put option contracts are~~ ~~not~~been designated as hedges for hedge accounting ~~purposes~~and were therefore marked-to-market through earnings each period. The forward contracts for silver and gold contained in our concentrate shipments have not been designated as hedges and are marked-to-market through earnings each period.

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We recorded the following balances for the fair value of the forward contracts as of March 31, ~~2021~~2022 and forward and put option contracts as of December 31, ~~2020~~2021 (in millions):

	March 31, 2021								December 31, 2020								March 31, 2022								December 31, 2021
Balance sheet line item:	Contracts in an asset position		Contracts in a liability position			Net asset (liability)			Contracts in an asset position		Contracts in a liability position			Net asset (liability)			Contracts in an asset position		Contracts in a liability position			Net asset (liability)			Contracts in an asset position		Contracts in a liability position			Net asset (liability)
Current derivatives assets	$	3.3	$	(1.1	)	$	2.2		$	0.2	$	(0.2	)	$	0
Non-current derivatives assets		2.3		(0.2	)		2.1			0.5		(0.1	)		0.4
Other current assets																	$	0.3	$	(0.2	)	$	0.1		$	0	$	0		$	0
Current derivatives liability		0		(3.9	)		(3.9	)		0.1		(11.8	)		(11.7	)		0.5		(39.5	)		(39.0	)		0.7		(20.1	)		(19.4	)
Other non-current liabilities		0.4		(1.2	)		(0.8	)		0		0			0			0.1		(43.5	)		(43.4	)		0.4		(18.9	)		(18.5	)

Net unrealized losses of approximately $63.0 million related to the effective portion of the contracts designated as hedges were included in accumulated other comprehensive loss as of March 31,2022, and are net of related deferred taxes. 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 $28.0 million in net unrealized losses included in accumulated other comprehensive loss as of March 31,2022 would be reclassified to current earnings in the next twelve months. We recognized a net loss of $4.8 million, including a $0.3 million gain transferred from accumulated other comprehensive loss, and net gain of $2.8 million ~~and $1.7 million net gains~~ during the first quarters of ~~2021~~2022 and ~~2020,~~2021, respectively, on the contracts utilized to manage exposure to prices of metals in our concentrate shipments, which is included in sales of products. The net losses and gains recognized on the contracts ~~offsets~~offset gains and losses 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 $0.6 million in net losses and $0.5 million ~~and $7.9 million~~in net gains during the first quarters of ~~2021~~2022 and ~~2020,~~2021, respectively, on the contracts utilized to manage exposure to prices for forecasted future sales. The net losses and gains on these contracts are included as a separate line item under other income (expense), as they relate to forecasted future sales, as opposed to sales that have already taken place but are subject to final pricing as discussed in the preceding paragraph. ~~The~~Increases in zinc and lead prices resulted in the net ~~gain~~loss for the first quarter of ~~2021~~2022. ~~is the result of a decrease in zinc and lead prices.~~

Credit-risk-related Contingent Features

Certain of our derivative contracts contain cross default provisions which provide that a default under our revolving credit agreement would cause a default under the derivative contract. As of March 31, ~~2021,~~2022, we have not posted any separate collateral related to these contracts. The fair value of derivatives in a net liability position related to these agreements was ~~$6.4~~$83.2 million as of March 31, ~~2021,~~2022, which includes accrued interest but excludes any adjustment for nonperformance risk. If we were in breach of any of ~~these~~the cross default provisions at March 31, ~~2021,~~2022, we could have been required to settle our obligations under the agreements at their termination value of ~~$6.4~~$83.2 million.

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Note 9. Fair Value Measurement

Fair value adjustments, net is comprised of the following:

	Three Months Ended March 31,
	2022			2021
(Loss) gain on derivative contracts	$	(201	)	$	473
Unrealized gain (loss) on investments in equity securities		6,100			(3,506	)
Gain on disposition or exchange of investments		66			1,158
Total fair value adjustments, net	$	5,965		$	(1,875	)

Accounting guidance has established a hierarchy for inputs used to measure assets and liabilities at fair value on a recurring basis. The three levels included in the hierarchy are:

Level 1: quoted prices in active markets for identical assets or liabilities;

Level 2: significant other observable inputs; and

Level 3: significant unobservable inputs.

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The table below sets forth our assets and liabilities that were accounted for at fair value on a recurring basis and the fair value calculation input hierarchy level that we have determined applies to each asset and liability category (in thousands).

Description	Balance at March 31, 2021		Balance at December 31, 2020		Input Hierarchy Level	Balance at March 31, 2022		Balance at December 31, 2021		Input Hierarchy Level
Assets:
Cash and cash equivalents:
Money market funds and other bank deposits	$	139,750	$	129,830	Level 1	$	212,029	$	210,010	Level 1
Current and non-current investments:
Equity securities – mining industry		11,717		19,389	Level 1		29,204		14,470	Level 1
Trade accounts receivable:
Receivables from provisional concentrate sales		35,274		27,864	Level 2		33,324		36,437	Level 2
Restricted cash balances:
Certificates of deposit and other bank deposits		1,053		1,053	Level 1		1,041		1,053	Level 1
Derivative contracts - current and non-current derivatives assets:
Metal forward and put option contracts		4,349		381	Level 2
Derivative contracts - other current assets and other non-current assets:
Metal forward contracts							74		0	Level 2
Foreign exchange contracts		9,192		7,647	Level 2		7,829		5,207	Level 2
Total assets	$	201,335	$	186,164		$	283,501	$	267,177

Liabilities:
Derivative contracts - current derivatives liabilities and other non-current liabilities:
Metal forward and put option contracts	$	4,742	$	11,737	Level 2
Derivative contracts - current and non-current derivatives liabilities:
Metal forward contracts						$	82,394	$	37,873	Level 2
Foreign exchange contracts		0		19	Level 2		0		8	Level 2
Total Liabilities	$	4,742	$	11,756		$	82,394	$	37,881

Cash and cash equivalents consist primarily of money market funds and are valued at cost, which approximates fair value, and a small portion consists of municipal bonds having maturities of less than 90 days, which are recorded at fair value.

Current and non-current restricted cash balances consist primarily of certificates of deposit, U.S. Treasury securities, and other deposits and are valued at cost, which approximates fair value.

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~~Our non-current available for sale securities~~Non-current investments consist of marketable equity securities of ~~companies in the~~ mining ~~industry~~companies which are valued using quoted market prices for each security. During the first quarter of 2022, we acquired equity securities of various mining companies for a total cost of $10.9 million, and disposed of mining company equity securities acquired for $2.4 million for proceeds of $2.5 million. NaN such activity occurred during the first quarter of 2021.

Trade accounts receivable from provisional concentrate sales are subject to final pricing and valued using quoted prices based on forward curves for the particular metal. ~~The embedded derivative contained in our concentrate sales is adjusted to fair market value through earnings each period prior to final settlement.~~

We use financially-settled forward contracts to manage exposure to changes in the exchange rate between USD and CAD, and ~~MXN, and~~ the impact on ~~CAD-~~CAD-denominated operating and ~~MXN-denominated operating~~capital costs incurred at ~~our~~ Casa Berardi ~~and San Sebastian units~~ (see Note 8 for more information). The fair value of each contract represents the present value of the difference between the forward exchange rate for the contract settlement period as of the measurement date and the contract settlement exchange rate.

We use financially-settled forward contracts to manage the exposure to changes in prices of silver, gold, zinc and lead contained in our concentrate shipments that have not reached final ~~settlement. We also use financially-settled forward and put option contracts to manage the exposure to changes in prices of silver, gold, zinc and lead contained in our forecasted future sales~~settlement (see Note 8 for more information). The fair value of each forward contract represents the present value of the difference between the forward metal price for the contract settlement period as of the measurement date and the contract settlement metal price. ~~The fair value of each put option contract is measured using the Black-Scholes pricing model, with inputs for the period-end metal price and assumed metal price volatility and discount rate.~~

At 16March

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~~Our~~31,2022, our Senior Notes ~~which~~and IQ Notes were recorded at their carrying value of ~~$468.8~~$469.7 million and $39.2 million, respectively, net of unamortized initial purchaser ~~discount~~discount/premium and issuance ~~costs, had a~~costs. The estimated fair ~~value~~values of ~~$509.7~~our Senior Notes and IQ Notes were $498.5 million and $40.5 million, respectively, at March 31, ~~2021.~~2022. Quoted market prices, which we consider to be Level 1 inputs, are utilized to estimate fair values of the Senior Notes. Unobservable inputs which we consider to be Level 3, including an assumed current annual yield of 6%, are utilized to estimate the fair value of the IQ Notes. See Note 7 for more information.

Note 10. Commitments, Contingencies and Obligations

General

We follow GAAP guidance in determining our accruals and disclosures with respect to loss contingencies, and evaluate such accruals and contingencies for each reporting period. Accordingly, estimated losses from loss contingencies are accrued by a charge to income when information available prior to issuance of the financial statements indicates that it is probable that a liability could be incurred and the amount of the loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. If a loss contingency is not probable or reasonably estimable, disclosure of the loss contingency is made in the financial statements when it is at least reasonably possible that a material loss could be incurred.

~~Lucky Friday Water Permit Matters~~

In ~~December 2013,~~ ~~the Environmental Protection Agency ("EPA") issued to Hecla Limited a request for information under Section~~ ~~308~~ ~~of the Clean Water Act directing Hecla Limited to undertake a comprehensive groundwater investigation of Lucky Friday’s tailings pond~~ ~~no.~~3 to evaluate whether the pond is causing the discharge of pollutants via seepage to groundwater that is discharging to surface water. We completed the investigation mandated by the EPA and submitted a draft report to the agency in ~~December 2015.~~ ~~We are waiting for the EPA’s response and we cannot predict what further action, if any, the agency~~ ~~may~~ ~~take.~~

Johnny M Mine Area near San Mateo, McKinley County and San Mateo Creek Basin, New Mexico

In ~~May 2011,~~ ~~the EPA made a formal request to Hecla Mining Company for information regarding the Johnny M Mine Area near San Mateo, McKinley County, New Mexico, and asserted that Hecla Mining Company~~ ~~may~~ be responsible under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") for environmental remediation and past costs the EPA has incurred at the site. Mining at the Johnny M Mine was conducted for a limited period of time by a predecessor of our subsidiary, Hecla Limited. In August 2012, Hecla Limited and the EPA entered into a Settlement Agreement and Administrative Order on Consent for Removal Action (“Consent Order”)~~, pursuant to which~~ regarding the Johnny M Mine Area near San Mateo, McKinley County, New Mexico. Mining at the Johnny M Mine was conducted for a limited period of time by a predecessor of Hecla Limited, and the EPA had previously asserted that Hecla Limited may be responsible under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) for environmental remediation and past costs incurred by the EPA at the site. Under the Consent Order, Hecla Limited agreed to pay (i) $1.1 million to the EPA for its past response costs at the site and (ii) any future response costs at the site under the Consent Order, in exchange for a covenant not to sue by the EPA. ~~Hecla Limited paid the $1.1 million to the EPA for its past response costs and in~~In December 2014, Hecla Limited submitted to the EPA the Engineering Evaluation and Cost Analysis (“EE/CA”) for the site which recommended on-site disposal of mine-related material. In January 2021, the ~~EPA contacted Hecla Limited to begin negotiations on~~parties began negotiating a new consent order to design and implement the on-site disposal response action recommended in the EE/CA. Based on the foregoing, we believe it is probable that Hecla Limited will incur a liability for the CERCLA removal action and we ~~have~~ increased our accrual by $2.9 million to $9.0 million in the first quarter of 2021 ~~($6.1 million at~~ ~~December 31, 2020)~~ primarily representing estimated costs to begin design and implementation of the remedy. It is possible that Hecla Limited’s liability will be more than $9.0 million, and any increase in liability could have a material adverse effect on Hecla Limited’s or our results of operations or financial position.

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The Johnny M Mine is in an area known as the San Mateo Creek Basin (“SMCB”), which is an approximately 321 square mile area in New Mexico that contains numerous legacy uranium mines and mills. In addition to Johnny M, Hecla ~~Limited's~~Limited’s predecessor was involved at other mining sites within the SMCB. The EPA appears to have deferred consideration of listing the SMCB site on CERCLA’s National Priorities List ~~("Superfund"~~(“Superfund”) by removing the site from its emphasis list, and is working with various potentially responsible parties ~~("PRPs"~~(“PRPs”) at the site in order to study and potentially address perceived groundwater issues within the SMCB. The EE/CA discussed above relates primarily to contaminated rock and soil at the Johnny M site, not groundwater and not elsewhere within the SMCB site. It is possible that Hecla Limited’s liability at the Johnny M Site, and for any other mine site within the SMCB at which Hecla ~~Limited's~~Limited’s predecessor may have operated, will be greater than our current accrual of $9.0 million due to the increased scope of required remediation.

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In July 2018, the EPA informed Hecla Limited that it and several other PRPs may be liable for cleanup of the SMCB site or for costs incurred by the EPA in cleaning up the site. The EPA stated it has incurred approximately $9.6 million in response costs to date. On May 2, 2022, Hecla Limited received a letter from an attorney representing a PRP notifying Hecla Limited that three PRPs will seek cost recovery and contribution from Hecla Limited under CERCLA for certain investigatory work performed by the PRPs at the SMCB site. Hecla Limited cannot with reasonable certainty estimate the amount or range of liability, if any, relating to this matter because of, among other reasons, the lack of information concerning the site, including the relative contributions of contamination by the various PRPs.

Carpenter Snow Creek and Barker-Hughesville Sites in Montana

In July 2010, the EPA made a formal request to Hecla ~~Mining Company~~ for information regarding the Carpenter Snow Creek Superfund site located in Cascade County, Montana. The Carpenter Snow Creek site is located in a historic mining district, and in the early 1980s Hecla Limited leased 6 mining claims and performed limited exploration activities at the site. Hecla Limited terminated the mining lease in 1988.

In June 2011, the EPA informed Hecla Limited that it believes Hecla Limited, and several other PRPs, may be liable for cleanup of the site or for costs incurred by the EPA in cleaning up the site. The EPA stated in the letter that it has incurred approximately $4.5 million in response costs and estimated that total remediation costs may exceed $100 million. Hecla Limited cannot with reasonable certainty estimate the amount or range of liability, if any, relating to this matter because of, among other reasons, the lack of information concerning the site, including the relative contributions of contamination by various other PRPs.

In February 2017, the EPA made a formal request to Hecla ~~Mining Company~~ for information regarding the Barker-Hughesville Mining District Superfund site located in Judith Basin and Cascade Counties, Montana. Hecla Limited submitted a response in April 2017. The Barker-Hughesville site is located in a historic mining district, and between approximately June and December 1983, Hecla Limited was party to an agreement with another mining company under which limited exploration activities occurred at or near the site.

In August 2018, the EPA informed Hecla Limited that it and several other PRPs may be liable for cleanup of the site or for costs incurred by the EPA in cleaning up the site. The EPA did not include an amount of its alleged response costs to date. Hecla Limited cannot with reasonable certainty estimate the amount or range of liability, if any, relating to this matter because of, among other reasons, the lack of information concerning past or anticipated future costs at the site and the relative contributions of contamination by various other PRPs.

~~Claim for Indemnification Against CoCa Mines, Inc.~~

In ~~1991,~~ Hecla Limited acquired CoCa Mines, Inc. (“CoCa”) and its subsidiary Creede Resources, Inc. (“CRI”). CoCa and CRI previously operated in the State of Colorado, but presently have limited assets and operations. Between ~~2014~~ ~~and~~ ~~2019,~~ ~~a PRP alleged that CoCa and CRI are required by a~~ ~~1989~~ ~~agreement to indemnify it for certain environmental costs and liabilities it~~ ~~may~~ ~~incur with respect to the Nelson Tunnel/Commodore Waste Rock Pile Superfund site in Creede, Colorado. In~~ ~~2016,~~ ~~without admitting any liability, Hecla Limited, CoCa and CRI entered into a Consent Decree with the United States and the State of Colorado settling any regulatory liability they~~ ~~may~~ ~~have had at the site. On~~ ~~October 30, 2019,~~ the PRP filed a lawsuit in Mineral County, Colorado alleging, among other things, that CoCa and CRI are in breach of contract for failure to indemnify the PRP for its liability to the U.S. under CERCLA with respect to the site. In addition, the lawsuit names Hecla Limited as a defendant in its role as the shareholder of CoCa. The PRP seeks in excess of $5 million in damages, including attorneys’ fees and costs. The lawsuit will be vigorously defended and we believe strong defenses exist against all claims made therein and, as noted above, both CoCa and CRI have limited assets with which to satisfy any claim.

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Litigation Related to Klondex Acquisition

On May 24, 2019, a purported Hecla stockholder filed a putative class action lawsuit in the U.S. District Court for the Southern District of New York against Hecla and certain of our executive officers, one of whom is also a director. The complaint, purportedly brought on behalf of all purchasers of Hecla common stock from March 19, 2018 through and including May 8, 2019, asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder and seeks, among other things, damages and costs and expenses. Specifically, the complaint alleges that Hecla, under the authority and control of the individual defendants, made certain material false and misleading statements and omitted certain material information regarding Hecla’s Nevada ~~Operations unit.~~Operations. The complaint alleges that these misstatements and omissions artificially inflated the market price of Hecla common stock during the class period, thus purportedly harming investors. Filings with the court regarding our motion to dismiss the lawsuit were completed in the first quarter of 2021. We cannot predict the outcome of ~~these lawsuits~~this lawsuit or estimate damages if plaintiffs were to prevail. We believe that these claims are without merit and intend to defend them vigorously.

Related to this class action lawsuit, Hecla has been named as a nominal defendant in a shareholder derivative lawsuit which also names as defendants certain current and past (i) members of Hecla’s board of directors and (ii) officers of Hecla. The case was filed on May 4, 2022 in the Delaware Chancery Court. In general terms, the suit alleges breaches of fiduciary duties by the individual defendants, waste of corporate assets and unjust enrichment, and seeks damages, purportedly on behalf of Hecla.

Debt

See Note 7 for information on the commitments related to our debt arrangements as of March 31, ~~2021.~~2022.

Other Commitments

Our contractual obligations as of March 31, ~~2021~~2022 included ~~approximately $2.1 million for various costs. In addition, our~~ open purchase orders at ~~March~~ ~~31,~~~~2021~~ ~~included~~and commitments of approximately ~~$4.0~~$7.7 million, ~~$0.7~~$10.1 million, ~~$2.8~~$0.2 million and ~~$2.7~~$4.6 million for various capital and non-capital items at ~~the~~Greens Creek, Lucky Friday, Casa Berardi ~~Greens Creek~~ and Nevada Operations, ~~units,~~ respectively. We also have total commitments of approximately ~~$18.2~~$15.5 million relating to scheduled payments on finance leases, including interest, primarily for equipment at our Greens Creek, Lucky Friday, Casa Berardi and Nevada Operations, ~~units,~~ and total commitments of approximately ~~$11.7~~$14.9 million relating to payments on operating leases (see Note 7 for more information). As part of our ongoing business and operations, we are required to provide surety bonds, bank letters of credit, and restricted deposits for various purposes, including financial support for environmental reclamation obligations and workers compensation programs. As of March 31, ~~2021,~~2022, we had surety bonds totaling ~~$176.8~~$183.5 million and letters of credit totaling ~~$20.3~~$17.3 million in place as financial support for future reclamation and closure costs, self-insurance, and employee benefit plans. The obligations associated with these instruments are generally related to performance requirements that we address through ongoing operations. As the requirements are met, the beneficiary of the associated instruments cancels or returns the instrument to the issuing entity. Certain of these instruments are associated with operating sites with long-lived assets and will remain outstanding until closure of the sites. We believe we are in compliance with all applicable bonding requirements and will be able to satisfy future bonding requirements as they arise.

Other Contingencies

We also have certain other contingencies resulting from litigation, claims, EPA investigations, and other commitments and are subject to a variety of environmental and safety laws and regulations incident to the ordinary course of business. We currently have no basis to conclude that any or all of such contingencies will materially affect our financial position, results of operations or cash flows. However, in the future, there may be changes to these contingencies, or additional contingencies may occur, any of which might result in an accrual or a change in current accruals recorded by us, and there can be no assurance that their ultimate disposition will not have a material adverse effect on our financial position, results of operations or cash flows.

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Note 11. Developments in Accounting Pronouncements

Accounting Standards Updates Adopted

In ~~December 2019,~~ ~~the FASB issued ASU~~ ~~No.~~~~2019~~-12 ~~Income Taxes (Topic~~ ~~740~~): Simplifying the Accounting for Income Taxes. The update contains a number of provisions intended to simplify the accounting for income taxes. The update is effective for fiscal years beginning after ~~December 15, 2020,~~ ~~with early adoption permitted. We adopted the update as of~~ ~~January 1, 2021,~~ ~~which did~~ ~~not~~ ~~have a material impact on our consolidated financial statements or disclosures.~~

~~Accounting Standards Updates to Become Effective in Future Periods~~

In August 2020, the ~~FASB~~Financial Accounting Standards Board ("FASB") issued ASU No. 2020-06 Debt - Debt with Conversion and Other Options (Subtopic

470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The update is to address issues identified as a result of the complexity associated with applying generally accepted accounting principles ~~for~~to certain financial instruments with characteristics of liabilities and equity. The update is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years and with early adoption permitted. We adopted the update as of January 1, 2022, which did not have a material impact on our consolidated financial statements or disclosures.

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In October 2021, the FASB issued ASU 2021-08,Business Combinations (Topic 805): Accounting for Contract Assets and ContractLiabilities from Contracts with Customers, which requires entities to recognize and measure contract assets and contract liabilities acquired ina business combination in accordance with ASC 2014-09,Revenue from Contracts with Customers (Topic 606). The update will generally result in an entity recognizing contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than at fair value. The update is effective on a prospective basis for fiscal years beginning after December 15, 2022, with early adoption permitted. We adopted the new standard effective January 1, 2022, which did not have a material impact on our consolidated financial statements or disclosures.

Accounting Standards Updates to Become Effective in Future Periods

In 2017, the United Kingdom’s Financial Conduct Authority ("FCA") announced that after 2021 it would no longer compel banks to submit the rates required to calculate the London Interbank Offered Rate ("LIBOR"), which have been widely used as reference rates for various securities and financial contracts, including loans, debt and derivatives. This announcement indicated that the continuation of LIBOR on the current basis would not be guaranteed after 2021. Subsequently in March 2021, the FCA announced some USD LIBOR tenors (overnight, 1 month, 3 month, 6 month and 12 month) will continue to be published until June 30, 2023. Regulators in the U.S. and other jurisdictions have been working to replace these rates with alternative reference interest rates that are ~~evaluating~~supported by transactions in liquid and observable markets, such as the Secured Overnight Financing Rate ("SOFR"). Currently, our credit facility and certain of our derivative instruments reference LIBOR-based rates. Our credit facility contains provisions specifying alternative interest rate calculations to be employed when LIBOR ceases to be available as a benchmark and we have adhered to the ISDA 2020 IBOR Fallbacks Protocol, which will govern our derivatives upon the final cessation of USD LIBOR. ASU 2020-04,Reference Rate Reform (Topic 848): Facilitation of the Effects ofReference Rate Reform on Financial Reporting, as amended, helps limit the accounting impact from contract modifications, includinghedging relationships, due to the transition from LIBOR to alternative reference rates that are completed by December 31, 2022. We do not expect a significant impact to our financial results, financial position or cash flows from the transition from LIBOR to alternative reference interest rates, but we will continue to monitor the impact of this ~~update on our consolidated financial statements.~~transition until it is completed.

Note 12. Subsequent Events

During April 2022, we invested approximately $10 million in mining company securities.

2019

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Forward-Looking Statements

Certain statements contained in this Form 10-Q, including in Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative ~~Disclosure~~Disclosures 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 – Risk Factors in our annual report filed on Form 10-K for the year ended December 31, ~~2020.~~2021 (“2021 Form 10-K”). Given these risks and uncertainties, readers are cautioned not to place undue reliance on our forward-looking statements. All subsequent written and oral forward-looking statements attributable to Hecla Mining Company or to persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Except as required by federal securities laws, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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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"~~&A”), ~~“Hecla”,~~“Hecla,” ~~the Company”,~~“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~~2021 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

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~~States. We are the largest silver producer in the United ~~States. Our corporate offices are in Coeur d’Alene, Idaho and Vancouver, British Columbia. Our~~States, producing over 40% of the United States silver production ~~profile includes:~~

•

~~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.~~

~~Our operating properties comprise~~at our ~~five business segments for financial reporting purposes: the~~ Greens Creek ~~operating unit on Admiralty Island in Alaska, the~~and Lucky Friday ~~operating unit in Idaho, the~~operations. We produce gold at our Casa Berardi ~~operating unit~~operation in Quebec, Canada, ~~the San Sebastian operating unit in Durango, Mexico,~~ and ~~the~~Greens Creek, and at our Nevada Operations ~~unit in northern Nevada. Since~~segment prior to suspension of operations during 2021. Based upon our ~~operating mines are located in the United States, Canada, and Mexico,~~operational footprint, we believe ~~they~~we have low ~~or relatively moderate~~ political ~~risk,~~ and ~~less~~ economic risk ~~than~~compared to other mines located in other parts of the world. Our exploration interests are ~~also~~located in the United States, Canada and ~~Mexico,~~Mexico. Our operating and ~~are located~~strategic framework is based on expanding our production and locating and developing new resource potential in ~~historical mining districts. The map below shows the locations of our operating units, our exploration~~a safe and ~~pre-development projects, as well as our corporate offices located in Coeur d'Alene, Idaho and Vancouver, British Columbia.~~responsible manner.

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First Quarter 2022 Highlights

Operational:

•

Produced 3.3 million ounces of silver and 41,642 ounces of gold. See Consolidated Results of Operations below for information on total cost of sales and cash costs and AISC, after by-product credits, per silver and gold ounce for the three-month periods ended March 31, 2022 and 2021.

•

Continued our trend of strong safety performance, as our All Injury Frequency Rate (“AIFR”) for the first quarter of 2022 was 1.48, 30% below the U.S. national average for MSHA's “metal and nonmetal” category and within 3% of our AIFR of 1.45 for the full year of 2021.

•

Continued mitigation of the impacts of COVID-19 through refinement of our operational plans and procedures to protect our workforce, operations and communities while maintaining liquidity.

Financial:

•

Reported sales of products of $186.5 million.

•

Generated $37.9 million in net cash provided by operating activities after bi-annual interest payments totaling $18.5 million on the Senior Notes and IQ Notes. See the Financial Liquidity and Capital Resources section below for further discussion.

•

Made capital expenditures (excluding lease additions and other non-cash items) of approximately $21.5 million, including $3.1 million at Greens Creek, $9.7 million at Lucky Friday, $7.8 million at Casa Berardi and $0.9 million at the Nevada Operations.

•

Generated $16.4 million in free cash flow. A reconciliation of the non-GAAP measure free cash flow to net cash provided by operating activities, the nearest GAAP measure, is included in the Reconciliation of Cash Flows From Operating Activities (GAAP) to Free Cash Flow (Non-GAAP) section below.

•

Returned $3.5 million, or 21% of free cash flows, to our shareholders through payment of dividends.

•

Spent $12.8 million on exploration and pre-development activities.

•

Achieved the above while increasing our cash balance to $212.0 million, which was $2.0 million higher than at December 31, 2021, with no borrowings on our revolving credit facility, as of March 31, 2022.

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

•

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;~~cost-effective manner;

•

~~optimizing~~maintaining and investing in exploration and pre-development projects in the vicinities of eleven mining districts and projects we believe to be under-explored and under-invested: Greens Creek on Alaska's Admiralty Island located near Juneau; North Idaho's Silver Valley in the historic Coeur d'Alene Mining District; the silver-producing district near Durango, Mexico; in the vicinity of our Casa Berardi mine and the Heva-Hosco project in the Abitibi region of northwestern Quebec, Canada; our projects located in two districts in Nevada; our projects in northwestern Montana; the Creede district of southwestern Colorado; the Kinskuch project in British Columbia, Canada; and the Republic mining district in Washington state;

•

improving operations at each of our ~~units,~~mines, which includes incurring costs for new technologies and ~~equipment that may not result in measurable benefits;~~equipment;

•

expanding our proven and probable reserves, mineral resources and production capacity at our ~~units;~~properties;

•

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~~one or both of our Montana 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 orand invest in mining and exploration properties and companies.

We strive to achieve excellent mine safety and health performance. We seek to implement this goal by: training employees in safe work practices; establishing, following and improving safety standards; investigating accidents, incidents and losses to avoid recurrence; involving employees in the establishment of safety standards; and participating in the National Mining Association’s CORESafety program. We seek to implement reasonable best practices with respect to mine safety and emergency preparedness. We respond to issues outlined in investigations and inspections by MSHA, the Commission of Labor Standards, Pay Equity and Occupational Health and Safety in Quebec, and the Mexico Ministry of Economy and Mining and continue to evaluate our safety practices. There can be no assurance that our practices will mitigate or eliminate all safety risks. Achieving and maintaining compliance with 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 2021 Form 10-K.

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~~The COVID-19~~Since its outbreak ~~impacted our operations~~ in 2020, ~~including~~the COVID-19 pandemic continues to impact our operational practices and we continue to incur incremental costs and modify our operational plans to keep our workforce safe. In 2020, the pandemic adversely ~~impacting~~impacted our expected production of gold at Casa Berardi and ~~has continued to impact our operations in 2021.~~exploration drilling at Greens Creek. We incurred ~~additional costs of approximately $0.6~~$0.4 million and $1.6 million in COVID-19 mitigation costs during the ~~first quarter of~~three months ended March 31, 2022 and 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.respectively. 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.~~reserves. 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 and any subsequent variants could have on our operations and financial results for the ~~remainder~~rest of ~~2021.~~2022. In our ~~2020~~2021 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 and are influenced by a number of factors beyond our control (except on a limited basis through the use of derivative contracts). See Item 7. Critical Accounting Estimates in our ~~2020~~2021 Form ~~10-K.~~10-K and above in Note 8 of Notes to Condensed Consolidated Financial Statements (Unaudited). The average realized prices of ~~silver,~~ gold, lead and zinc were higher, with the average realized price for silver lower, in the first three months of ~~2021~~2022 than in the comparable period last year, as illustrated by the table in Results of Operations below. While we believe 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.

Volatility in global financial markets and other factors can pose a significant challenge to our ability to 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 prices of (i) silver, gold, zinc and lead contained in our concentrates that have been shipped but have not yet settled, and (ii) zinc and lead that we forecast for future concentrate shipments. ~~We have also utilized put option contracts to manage exposure to declines in the prices of silver and gold in our forecasted future sales of those metals.~~ In addition, we have in place a $250 million revolving credit agreement, of which ~~$20.3~~$17.3 million was used as of March 31, ~~2021~~2022 for letters of credit, leaving approximately ~~$229.7~~$232.7 million available for borrowing.

We strive to achieve excellent mine safety and health performance. We seek to implement this goal by: training employees in safe work practices; establishing, following and improving safety standards; investigating accidents, incidents and losses to avoid recurrence; involving employees in the establishment of safety standards; and participating in the National Mining Association’s CORESafety program. We attempt to implement reasonable best practices with respect to mine safety and emergency preparedness. We work with MSHA to address issues outlined in its investigations and inspections and 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 Item 1A. Risk Factors in our ~~2020~~2021 Form 10-K and above in Note 10 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 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 to us as possible.

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Consolidated Results of Operations

Sales of products by metal for the three-month periods ended March 31, 2022 and 2021, and ~~2020~~the approximate variances attributed to differences in metals prices, sales volumes and smelter terms, were as follows:

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

(in thousands)	Silver			Gold			Base metals			Less: smelter and refining charges			Total sales of products
Three months ended March 31, 2021	$	77,760		$	101,408		$	45,084		$	(13,400	)	$	210,852
Variances - 2022 versus 2021:
Price		(2,613	)		4,298			12,316			(76	)		13,925
Volume		(8,726	)		(28,453	)		(2,198	)		1,369			(38,008	)
Smelter terms		(89	)		(85	)		—			(96	)		(270	)
Three months ended March 31, 2022	$	66,332		$	77,168		$	55,202		$	(12,203	)	$	186,499

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~~The fluctuations in sales~~Average market and realized metals prices for the ~~first quarter of~~three-month periods ended March 31, 2022 and 2021 ~~compared to the first quarter of 2020~~ were ~~primarily due to the following two reasons:~~as follows:

•

~~Higher average realized prices for silver, gold, lead and zinc. These price variances are illustrated in the table below.~~

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

		Three months ended March 31,
		2022		2021
Silver –	London PM Fix ($/ounce)	$	23.95	$	26.29
	Realized price per ounce	$	24.68	$	25.66
Gold –	London PM Fix ($/ounce)	$	1,874	$	1,798
	Realized price per ounce	$	1,880	$	1,770
Lead –	LME Final Cash Buyer ($/pound)	$	1.06	$	0.92
	Realized price per pound	$	1.08	$	0.92
Zinc –	LME Final Cash Buyer ($/pound)	$	1.70	$	1.25
	Realized price per pound	$	1.79	$	1.32

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 first ~~quarter~~quarters of 2022 and 2021, we recorded net positive price adjustments to provisional settlements of $1.0 million and $0.6 million, ~~compared to net positive price adjustments to provisional settlements of $2.6 million in the first quarter of 2020.~~respectively. 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 the first quarter of 2021.~~metals. See Note 8 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more 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.

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Total metals production and sales volumes for each period are shown in the following table:

•

~~Higher quantities of silver, gold, zinc and lead sold as a result of the timing of shipments and higher production of silver, lead and zinc. See~~ ~~The Greens Creek Segment,~~~~The Lucky Friday Segment, The Casa Berardi Segment, The San Sebastian Segment~~ ~~and~~ ~~The Nevada Operations Segment~~ sections 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

		Three Months Ended March 31,
		2022		2021
Silver -	Ounces produced		3,324,708		3,459,446
	Payable ounces sold		2,687,261		3,030,026
Gold -	Ounces produced		41,642		52,004
	Payable ounces sold		41,053		57,286
Lead -	Tons produced		10,863		10,704
	Payable tons sold		9,054		8,668
Zinc -	Tons produced		14,946		16,107
	Payable tons sold		9,947		11,027

The difference between what we report as ~~"ounces/~~“ounces/tons ~~produced"~~produced” and ~~"payable~~“payable ounces/tons ~~sold"~~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~~pursuant 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.

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Sales, total cost of sales, gross profit, Cash Cost, After By-product Credits, per Ounce ("(“Cash ~~Cost"~~Cost”) (non-GAAP) and All-In Sustaining Cost, After By-product Credits, per Ounce ~~("AISC"~~(“AISC”) (non-GAAP) at our ~~operating units~~operations for the ~~three-months~~three-month periods ended March 31, ~~2021~~2022 and ~~2020~~2021 were as follows (in thousands, except for Cash Cost and AISC):

	Silver												Gold									Silver												Gold
	Greens Creek			Lucky Friday			San Sebastian			Total Silver			Casa Berardi			Nevada Operations			Total Gold			Greens Creek			Lucky Friday			Other ⁽²⁾			Total Silver ⁽³⁾			Casa Berardi			Nevada Operations			Total Gold
Three Months Ended March 31, 2022:
Sales																						$	86,090		$	38,040		$	—		$	124,130		$	62,101		$	268		$	62,369
Total cost of sales																							(49,638	)		(29,264	)		—			(78,902	)		(62,168	)		—			(62,168	)
Gross profit (loss)																						$	36,452		$	8,776		$	—		$	45,228		$	(67	)	$	268		$	201
Cash Cost After By-product Credits, per Silver or Gold Ounce ⁽¹⁾																						$	(0.90	)	$	6.57		$	—		$	1.09		$	1,516		$	—		$	1,516
AISC, After By-product Credits, per Silver or Gold ounce ⁽¹⁾																						$	1.90		$	13.15		$	—		$	7.64		$	1,810		$	—		$	1,810
Three Months Ended March 31, 2021:
Sales	$	98,409		$	29,122		$	173		$	127,704		$	72,911		$	10,237		$	83,148		$	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	)		(53,181	)		(22,794	)		(94	)		(76,069	)		(59,927	)		(7,455	)		(67,382	)
Gross profit	$	45,228		$	6,328		$	79		$	51,635		$	10,395		$	2,782		$	13,177		$	45,228		$	6,328		$	79		$	51,635		$	12,984		$	2,782		$	15,766
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
Cash Cost After By-product Credits, per Silver or Gold Ounce ⁽¹⁾																						$	(0.67	)	$	7.62		$	—		$	1.40		$	1,027		$	1,416		$	1,052
AISC, After By-product Credits, per Silver or Gold ounce ⁽¹⁾																						$	1.59		$	14.24		$	—		$	7.21		$	1,272		$	1,461		$	1,284

(1)

A reconciliation of these non-GAAP measures to total 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 Total 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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(2)

Includes results for San Sebastian, which was an operating segment prior to 2021.

(3)

The calculation of AISC, After By-product Credits, per Ounce for our consolidated silver properties includes corporate costs for general and administrative expense and sustaining exploration and capital costs.

While revenue from zinc, lead and gold by-products is significant, we believe that identification of silver as the primary product of Greens Creek and Lucky Friday ~~and San Sebastian~~ 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 each of these ~~units~~operations 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~~and Lucky Friday deposits are massive sulfide ~~deposit~~deposits containing an unusually high proportion of silver; and

•

in most of ~~its~~their working areas, Greens Creek ~~utilizes~~and Lucky Friday utilize 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 and 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 and 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.

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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 and Nevada Operations 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,~~2022, we recorded income applicable to common stockholders of ~~$18.8~~$4.0 million ($~~0.04~~0.01 per basic common share), compared to ~~a loss~~income of ~~$17.3~~$21.3 million ($~~0.03~~0.04 per basic common share) during the first quarter of ~~2020.~~2021. The following factors contributed to the results for the first three months of ~~2021~~2022 compared to the first quarter of ~~2020:~~2021:

•

Variances in gross profit (loss) at our ~~operating units~~operations as illustrated in the table above. See the ~~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~~Exploration and pre-development expense increased by $6.1 million in the first quarter of 2022 compared to the first quarter of 2021. In the first quarter of 2022, exploration was primarily at ~~Lucky Friday decreased by $8.1~~San Sebastian, Casa Berardi, Nevada Operations and Greens Creek. Pre-development expense for the first quarter of 2022 totaled $3.1 million compared to $0.7 million in the first quarter of 2021, ~~compared~~with the increase for development of a decline to the ~~first quarter of 2020 due to~~Hatter Graben area at the ~~return to full production starting~~Hollister mine in ~~the fourth quarter of 2020. See~~ ~~The Lucky Friday Segment~~ ~~section below.~~Nevada.

•

~~Lower interest expense~~Care and maintenance costs increased by ~~$5.6~~$1.9 million in the first quarter of ~~2021~~2022 compared to the first quarter of ~~2020, with the decrease~~2021 due to suspension of production at Nevada Operations. See 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.Nevada Operations section below.

~~Table~~

The impact of ~~Contents~~

these factors was partially offset by the following:

•

~~Higher other operating expense by $2.7~~Fair value adjustments, net resulted in a gain of $6.0 million in the first quarter of ~~2021~~2022 compared to a loss of $1.9 million the first quarter of ~~2020 due~~2021 (see Note 9 of Notes to ~~project costs incurred to identify and implement potential operational improvements at Casa Berardi.~~Condensed Consolidated Financial Statements (Unaudited) for more information).

•

Provision for closed operations and environmental matters ~~increased~~decreased by ~~$3.2~~$2.8 million in the first quarter of ~~2021~~2022 compared to the first quarter of ~~2020~~2021 primarily due to a $2.9 million increase in the accrual for estimated costs at the Johnny M site in New Mexico in the first quarter of 2021 (see Note 10 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information).

•

~~Exploration and pre-development~~Lower other operating expense ~~increased~~ by ~~$3.6~~$1.2 million in the first quarter of ~~2021~~2022 compared to the first quarter of ~~2020. In~~2021 primarily due to project costs incurred to identify and implement potential operational improvements at Casa Berardi in the first quarter of 2021, ~~exploration was primarily~~partially offset by similar project costs incurred at ~~our San Sebastian, Casa Berardi and Nevada Operations units.~~

•

~~A gain on metal derivatives contracts of $0.5 million~~Greens Creek in the first quarter of ~~2021 compared to a gain of $7.9 million in the first quarter of 2020. See~~ ~~Note 8~~ of ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~ ~~for more information.~~

•

A net foreign exchange loss in the first quarter of 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 impact of 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 2020.2022.

•

An income and mining tax provision of ~~$4.6~~$5.6 million in the first quarter of ~~2021~~2022 compared to ~~an income and mining tax benefit~~a provision of ~~$1.1~~$4.7 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~~ to ~~Income~~ ~~and mining~~ ~~tax provision~~ (see Note 3 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information).

2825

Table of Contents

~~The~~ Greens Creek ~~Segment~~

Dollars are in thousands (except per ounce and per ton amounts)	Three months ended March 31,						Three months ended March 31,
	2021			2020			2022			2021
Sales	$	98,409		$	53,833		$	86,090		$	98,409
Cost of sales and other direct production costs		(38,360	)		(36,753	)		(38,218	)		(38,360	)
Depreciation, depletion and amortization		(14,821	)		(12,429	)		(11,420	)		(14,821	)
Total cost of sales		(53,181	)		(49,182	)		(49,638	)		(53,181	)
Gross profit	$	45,228		$	4,651		$	36,452		$	45,228
Tons of ore milled		194,080			198,804			211,687			194,080
Production:
Silver (ounces)		2,584,870			2,775,707			2,429,782			2,584,870
Gold (ounces)		13,266			12,273			11,402			13,266
Zinc (tons)		13,354			12,487			12,494			13,354
Lead (tons)		4,924			5,198			4,883			4,924
Payable metal quantities sold:
Silver (ounces)		2,247,274			2,093,720			1,772,391			2,247,274
Gold (ounces)		10,547			10,321			7,922			10,547
Zinc (tons)		9,097			9,652			8,092			9,097
Lead (tons)		3,645			3,460			3,063			3,645
Ore grades:
Silver ounces per ton		16.01			16.87			13.84			16.01
Gold ounces per ton		0.09			0.08			0.07			0.09
Zinc percent		7.62			6.89			6.56			7.62
Lead percent		3.06			3.12			2.76			3.06
Total production cost per ton	$	182.61		$	185.92		$	192.16		$	182.61
Cash Cost, After By-product Credits, per Silver Ounce ⁽¹⁾	$	(0.67	)	$	5.63		$	(0.90	)	$	(0.67	)
AISC, After By-product Credits, per Silver Ounce ⁽¹⁾	$	1.59		$	7.90		$	1.90		$	1.59
Capital additions	$	4,892		$	5,510		$	3,092		$	1,772

(1)

The ~~$40.6~~$8.8 million ~~increase~~decrease in gross profit during the first quarter of ~~2021~~2022 compared to the same ~~2020~~2021 period was the result of lower sales volumes, as a result of lower ore grades and the timing of concentrate shipments, and lower average silver prices, partially offset by higher ~~sales due to:~~average gold, zinc and lead prices.

•

~~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.~~

2926

Table of Contents

The chart below illustrates the factors contributing to the variances in Cash Cost, After By-product Credits, per Silver Ounce for the first quarter of ~~2021~~2022 compared to the first quarter of ~~2020:~~2021:

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

	Three Months Ended March 31,						Three Months Ended March 31,
	2021			2020			2022			2021
Cash Cost, Before By-product Credits, per Silver Ounce	$	18.98		$	20.09		$	21.82		$	18.98
By-product credits		(19.65	)		(14.46	)		(22.72	)		(19.65	)
Cash Cost, After By-product Credits, per Silver Ounce	$	(0.67	)	$	5.63		$	(0.90	)	$	(0.67	)

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

	Three Months Ended March 31,						Three Months Ended March 31,
	2021			2020			2022			2021
AISC, Before By-product Credits, per Silver Ounce	$	21.24		$	22.36		$	24.62		$	21.24
By-product credits		(19.65	)		(14.46	)		(22.72	)		(19.65	)
AISC, After By-product Credits, per Silver Ounce	$	1.59		$	7.90		$	1.90		$	1.59

The decrease in Cash Costs, After By-Product Credits, per Silver Ounce for the first quarter of 2022 compared to 2021 was primarily due to the higher by-product credits, partially offset by higher mining and milling costs. The net impact of these factors was outweighed by higher sustaining capital spending, resulting in the increase in AISC, After By-Product Credits, per Silver Ounce for the first quarter of ~~2021~~2022 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.

3027

Table of Contents

~~The~~ Lucky Friday ~~Segment~~

Dollars are in thousands (except per ounce and per ton amounts)	Three Months Ended March 31,						Three Months Ended March 31,
	2021			2020			2022			2021
Sales	$	29,122		$	2,830		$	38,040		$	29,122
Cost of sales and other direct production costs		(16,458	)		(2,530	)		(21,232	)		(16,458	)
Depreciation, depletion and amortization		(6,336	)		(302	)		(8,032	)		(6,336	)
Total cost of sales		(22,794	)		(2,832	)		(29,264	)		(22,794	)
Gross profit (loss)	$	6,328		$	(2	)	$	8,776		$	6,328
Tons of ore milled		81,071			10,219			77,725			81,071
Production:
Silver (ounces)		863,901			95,748			887,858			863,901
Lead (tons)		5,780			695			5,980			5,780
Zinc (tons)		2,753			360			2,452			2,753
Payable metal quantities sold:
Silver (ounces)		763,823			101,102			899,454			763,823
Lead (tons)		5,023			670			5,991			5,023
Zinc (tons)		1,930			184			1,855			1,930
Ore grades:
Silver ounces per ton		11.18			9.87			12.04			11.18
Lead percent		7.51			7.23			8.16			7.51
Zinc percent		3.70			3.85			3.61			3.70
Total production cost per ton	$	181.28		$	—		$	247.17		$	190.54
Cash Cost, After By-product Credits, per Silver Ounce ⁽¹⁾	$	7.62		$	—		$	6.57		$	7.62
AISC, After By-product Credits, per Silver Ounce ⁽¹⁾	$	14.24		$	—		$	13.15			14.24
Capital additions	$	5,912		$	4,295		$	9,652		$	5,912

(1)

A reconciliation of these non-GAAP measures to total cost of sales, the most comparable GAAP measure, can be found below in Reconciliation of Total Cost of Sales (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP).

The ~~increases~~increase in ~~sales,~~ gross profit ~~ore tonnage and metals production~~ in the first quarter of ~~2021~~2022 compared to the first quarter of ~~2020~~2021 was the result of ~~a full~~higher sales volume and lead and zinc prices, partially offset by lower average silver prices.

Total production cost per ton increased by approximately 30% in the first quarter of ~~production following~~2022 compared to the ~~return to full production during the fourth~~first quarter of ~~2020 (discussed further below).~~ 2021 primarily due to higher costs for labor, equipment maintenance, contractors and consumables and lower mill throughput.

3128

Table of Contents

The chart below illustrates the factors contributing to Cash Cost, After By-product Credits, per Silver Ounce for the first ~~quarter~~quarters of ~~2021. Total production costs~~2022 and Cash Cost and AISC, After By-product Credits, per Silver Ounce are not presented for the first quarter of 2020, as production was limited during the ramp-up after the strike and results are not comparable.2021.

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

	~~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,
	2022			2021
Cash Cost, Before By-product Credits, per Silver Ounce	$	26.63		$	24.43
By-product credits		(20.06	)		(16.81	)
Cash Cost, After By-product Credits, per Silver Ounce	$	6.57		$	7.62

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

	Three Months Ended March 31,			Three Months Ended March 31,
	2021			2022			2021
AISC, Before By-product Credits, per Silver Ounce	$	31.05		$	33.21		$	31.05
By-product credits		(16.81	)		(20.06	)		(16.81	)
AISC, After By-product Credits, per Silver Ounce		14.24		$	13.15		$	14.24

~~Many of the employees at our Lucky Friday unit are represented by a union, and the current collective bargaining agreement with the union expires on January 6, 2023.~~

The unionized employees were on strike from March 13, 2017 until January 7, 2020, when the union ratified a new collective bargaining agreement. Salaried personnel performed limited production and capital improvements from July 2017 until the end of the strike. Re-staffing of the mine commenceddecrease in the 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 $8.1 million in the first quarter of 2020, which include non-cash depreciation expense of $1.8 million and are reported in a separate line item on our consolidated statements of operations, with no ramp-up costs recognized in the first quarter of 2021. These 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 ~~when presented.~~

~~See~~ ~~Note 10~~for the first quarter of ~~Notes~~2022 compared to ~~Condensed Consolidated Financial Statements (Unaudited)~~ ~~for a contingency related~~the first quarter of 2021 was due to ~~groundwater monitoring at the Lucky Friday mine in prior periods.~~higher silver production resulting from increased grades, higher by-product credits due to increased lead and zinc prices, and improved quality of concentrates.

3229

Table of Contents

~~The~~ Casa Berardi ~~Segment~~

Dollars are in thousands (except per ounce and per ton amounts)	Three Months Ended March 31,						Three Months Ended March 31,
	2021			2020			2022			2021
Sales	$	72,911		$	46,172		$	62,101		$	72,911
Cost of sales and other direct production costs		(36,975	)		(31,928	)		(46,322	)		(36,975	)
Depreciation, depletion and amortization		(25,541	)		(16,397	)		(15,846	)		(22,952	)
Total cost of sales		(62,516	)		(48,325	)		(62,168	)		(59,927	)
Gross profit (loss)	$	10,395		$	(2,153	)	$	(67	)	$	12,984
Tons of ore milled		368,403			331,618			386,150			368,403
Production:
Gold (ounces)		36,190			26,752			30,240			36,190
Silver (ounces)		10,675			5,934			7,068			10,675
Payable metal quantities sold:
Gold (ounces)		40,869			29,082			33,066			40,869
Silver (ounces)		8,715			8,423			9,054			8,715
Ore grades:
Gold ounces per ton		0.120			0.102			0.091			0.120
Silver ounces per ton		0.04			0.02			0.02			0.04
Total production cost per ton	$	99.67		$	102.45		$	117.96		$	99.67
Cash Cost, After By-product Credits, per Gold Ounce ⁽¹⁾	$	1,027		$	1,268		$	1,516		$	1,027
AISC, After By-product Credits, per Gold Ounce ⁽¹⁾	$	1,272		$	1,615		$	1,810		$	1,272
Capital additions	$	13,847		$	8,506		$	7,808		$	13,847

(1)

A reconciliation of these non-GAAP measures to total 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 Total Cost of ~~Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP)~~Sales(GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP).

Gross profit ~~increased~~decreased by ~~$12.5~~$13.1 million for the first quarter of ~~2021~~2022 compared to the first quarter of ~~2020~~2021 primarily due to ~~higher sales resulting from higher average~~lower gold ~~prices and volume, partially offset~~production, due to lower ore grades, accompanied by higher ~~total cost~~mining costs for labor, contractors and consumables. The increase in mining costs is partially attributable to inflation and a higher portion of ~~sales resulting~~development costs for the new 160 zone open pit mine being included in expense, as production from the ~~higher sales volume. The lower gold volume~~pit commenced in the ~~first~~fourth 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.2021.

Total capital additions ~~increased~~decreased by ~~$5.3~~$6.0 million in the first quarter of ~~2021~~2022 compared to the first quarter of ~~2020~~2021 primarily due to growth capital costs incurred in the 2021 period for development of the ~~new~~ 160 zone open pit ~~mine, partially offset by lower sustaining capital costs. We expect limited ore production from the 160 zone pit to begin in the fourth quarter of 2021.~~mine.

3330

Table of Contents

The chart below illustrates the factors contributing to Cash Cost, After By-product Credits, per Gold Ounce for the first quarter of ~~2021~~2022 compared to the first quarter of ~~2020:~~2021:

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

	Three Months Ended March 31,						Three Months Ended March 31,
	2021			2020			2022			2021
Cash Cost, Before By-product Credits, per Gold Ounce	$	1,035		$	1,272		$	1,521		$	1,035
By-product credits		(8	)		(4	)		(5	)		(8	)
Cash Cost, After By-product Credits, per Gold Ounce	$	1,027		$	1,268		$	1,516		$	1,027

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

	Three Months Ended March 31,						Three Months Ended March 31,
	2021			2020			2022			2021
AISC, Before By-product Credits, per Gold Ounce	$	1,280		$	1,619		$	1,815		$	1,280
By-product credits		(8	)		(4	)		(5	)		(8	)
AISC, After By-product Credits, per Gold Ounce	$	1,272		$	1,615		$	1,810		$	1,272

The ~~decrease~~increase in Cash Cost and AISC, After By-product Credits, per Gold Ounce for the first quarter of ~~2021~~2022 compared to the first quarter of ~~2020~~2021 was primarily the result of ~~higher~~lower gold production and higher mining costs. These factors along with higher exploration spending, partially offset by lower sustaining capital, resulted in the increase in AISC, After By-product Credits, per Gold ~~Ounce also impacted by lower sustaining capital spending, partially offset by higher exploration spending.~~Ounce.

3431

Table of Contents

~~The San Sebastian Segment~~Nevada Operations

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

Three Months Ended March 31,

2021

2020

Sales
$ 173 $ 9,927
Cost of sales and other direct production costs
(94 ) (6,827 )
Depreciation, depletion and amortization
— (1,473 )
Total cost of sales
(94 ) (8,300 )
Gross profit
$ 79 $ 1,627
Tons of ore milled
— 35,476
Production:

Silver (ounces)
— 346,625
Gold (ounces)
— 2,802
Payable metal quantities sold:

Silver (ounces)
3,392 353,696
Gold (ounces)
47 2,824
Ore grades:

Silver ounces per ton
— 10.64
Gold ounces per ton
— 0.091
Total production cost per ton
$ — $ 178.02
Cash Cost, After By-product Credits, per Silver Ounce ⁽¹⁾
$ — $ 6.91
AISC, After By-product Credits, per Silver Ounce ⁽¹⁾
$ — $ 9.59
Capital additions
$ — $ 803

~~(1)~~

~~A reconciliation of this non-GAAP 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 $1.5 million decrease in gross profit 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 2020, and milling was completed in the fourth quarter of 2020, with exploration and evaluation activities ongoing.

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, total production costs and Cash Cost and AISC, After By-product Credits, per Silver Ounce.

~~Table of Contents~~

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

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

Three Months Ended March 31,

2020

Cash Cost, Before By-product Credits, per Silver Ounce
$ 19.67
By-product credits
(12.76 )
Cash Cost, After By-product Credits, per Silver Ounce
$ 6.91

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

Three Months Ended March 31,

2020

AISC, Before By-product Credits, per Silver Ounce
$ 22.35
By-product credits
(12.76 )
AISC, After By-product Credits, per Silver Ounce
$ 9.59

~~Table of Contents~~

~~The Nevada Operations Segment~~

Dollars are in thousands (except per ounce and per ton amounts)	Three Months Ended March 31,						Three Months Ended March 31,
	2021			2020			2022		2021
Sales	$	10,237		$	24,163		$	268	$	10,237
Cost of sales and other direct production costs		(4,822	)		(7,849	)		—		(4,495	)
Depreciation, depletion and amortization		(2,633	)		(9,065	)		—		(2,960	)
Total cost of sales		(7,455	)		(16,914	)		—		(7,455	)
Gross profit	$	2,782		$	7,249		$	268	$	2,782
Tons of ore milled		16,459			17,298			—		16,459
Production:
Gold (ounces)		2,548			16,965			—		2,548
Silver (ounces)		—			21,455			—		—
Payable metal quantities sold:
Gold (ounces)		5,823			14,876			65		5,823
Silver (ounces)		6,821			25,339			6,363		6,821
Ore grades:
Gold ounces per ton		0.185			1.055			—		0.185
Silver ounces per ton		—			1.47			—		—
Total production cost per ton	$	360.72		$	745.14		$	—	$	360.72
Cash Cost, After By-product Credits, per Gold Ounce ⁽¹⁾	$	1,416		$	735		$	—	$	1,416
AISC, After By-product Credits, per Gold Ounce ⁽¹⁾	$	1,461		$	808		$	—	$	1,461
Capital additions	$	89		$	857		$	876	$	89

(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 decrease in gross profit for the first quarter of ~~2021~~2022 compared to the first quarter of ~~2020~~2021 is a result of ~~lower metals production. During~~sales volume, with the final sale of 2021 production occurring in the first quarter of 2022. Development ceased at Fire Creek in the second ~~half~~quarter of ~~2020, all ore mined at~~2019 when the ~~Nevada Operations~~decision was ~~stockpiled, with no ore milled and no~~made to limit near-term production ~~reported during that period.~~to areas of the mine where development was already completed. Mining of non-refractory ore at Fire Creek in areas where development ~~has~~had already been performed was completed in the fourth quarter of 2020. ~~Processing~~During 2021, production and revenue were generated from 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 refractory ore in a ~~bulk sample of~~roaster and autoclave facility, respectively. 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~~was placed on care-and-maintenance in the second quarter of 2021 after ~~its~~processing of the 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.~~stockpile.

~~Production was suspended~~Exploration activities and pre-development activities related to the Hatter Graben area at ~~the~~ Hollister ~~mine in the third quarter of 2019~~are ongoing. Care and ~~at the Midas mine and Aurora mill in late-2019. Suspension-related~~maintenance 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.

~~Table of Contents~~

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

~~The following table summarizes the components of Cash Cost, After By-product Credits, per 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 Gold ounce in the first quarter of 2021 compared to the 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~~2021 Form 10-K for a discussion of certain risks relating to our recent and ongoing analysis of the carrying value of the Nevada assets.

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Corporate Matters

Employee Benefit Plans

Our defined benefit pension plans, ~~provide~~while providing a significant benefit to our employees, ~~but~~ represent a ~~significant~~ liability to us. The liability recorded for the underfunded status of our plans was ~~$29.6~~$5.9 million and ~~$44.9~~$6.0 million as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, 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 do not expect to be required to contribute to our defined benefit pension plans in ~~2021,~~2022, 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 defined benefit pension plan provisions, and we periodically examine the plans for affordability and competitiveness. See Note 96 of Notes to Consolidated Financial Statements in our ~~2020~~2021 Form 10-K for more information.

Income and Mining Taxes

During the first quarter of ~~2021,~~2022, an income and mining tax provision of approximately ~~$4.6~~$5.6 million resulted in an effective tax rate of ~~19.6%~~57.6% for that period. This compares to an income and mining tax ~~benefit~~provision of ~~$1.1~~$4.7 million, or an effective tax rate of ~~5.8%~~18.1%, for the first quarter of ~~2020.~~2021. The comparability of our income and mining tax (provision) benefit and effective tax rate for the reported periods was impacted by multiple factors, primarily: (i) mining taxes; (ii) variations in our income before income taxes; (iii) geographic distribution of that income; (iv) foreign exchange ~~rates;~~rates including non-recognition of foreign exchange gains and losses; (v) percentage depletion; and (vi) the non-recognition of tax ~~assets; and (vii) the reclassification of the Alaska mine license tax effective January 1, 2021, which increased our income and mining tax provision by $3.0 million.~~assets. Therefore, the effective tax rate will fluctuate, sometimes significantly, period to period. For the period ended March 31, 2022, we used the annual effective tax rate method to calculate the tax provision, a change from the discrete method used for the period ended March 31, 2021, due to reversal of valuation allowance in the fourth quarter of 2021.

Each reporting period we assess our deferred tax balances based on a review of long-range forecasts and quarterly activity. A valuation allowance is provided for deferred tax assets for which it is more likely than not the related tax benefits will not be realized. We analyze our deferred tax assets and, if it is determined that we will not realize all or a portion of our deferred tax assets, we will record or increase a valuation allowance. Conversely, if it is determined we will ultimately more likely than not be able to realize all or a portion of the related benefits for which a valuation allowance has been provided, all or a portion of the related valuation allowance will be reduced. There are a number of factors that impact our ability to realize our deferred tax assets. Valuation allowances are provided on deferred tax assets in our Nevada, Mexico, and certain Canadian jurisdictions. For additional information, please see Item 1A - Risk Factors in our ~~2020~~2021 10-K.

Reconciliation of Total 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 total 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, Casa Berardi and Nevada Operations units~~ and for the Company for the three-month periods ended March 31, ~~2021~~2022 and ~~2020.~~2021.

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 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.

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Cash Cost, After By-product Credits, per Ounce is an important operating statistic that we utilize to measure each mine's operating performance. We use AISC, After By-product Credits, per Ounce 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 silver and gold mining company, we also use these statistics on an aggregate basis - aggregating the Greens Creek and Lucky Friday ~~and San Sebastian~~ mines to compare our performance with that of other silver mining companies, and aggregating Casa Berardi and Nevada Operations for comparison with other gold mining companies. Similarly, these statistics are useful in identifying acquisition and investment opportunities as they provide a common tool for measuring the financial performance of other mines with varying geologic, metallurgical and operating characteristics.

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

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

Table of Contents

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

In thousands (except per ounce amounts)	Three Months Ended March 31, 2022
	Greens Creek			Lucky Friday			Corporate⁽²⁾		Total Silver
Total cost of sales	$	49,638		$	29,264				$	78,902
Depreciation, depletion and amortization		(11,420	)		(8,032	)				(19,452	)
Treatment costs		9,096			3,677					12,773
Change in product inventory		6,538			(905	)				5,633
Reclamation and other costs		(850	)		(361	)				(1,211	)
Cash Cost, Before By-product Credits ⁽¹⁾		53,002			23,643					76,645
Reclamation and other costs		705			282					987
Exploration		165			—			716		881
Sustaining capital		5,956			5,562			48		11,566
General and administrative								8,294		8,294
AISC, Before By-product Credits ⁽¹⁾		59,828			29,487					98,373
By-product credits:
Zinc		(28,651	)		(5,977	)				(34,628	)
Gold		(18,583	)		—					(18,583	)
Lead		(7,966	)		(11,836	)				(19,802	)
Total By-product credits		(55,200	)		(17,813	)				(73,013	)
Cash Cost, After By-product Credits	$	(2,198	)	$	5,830				$	3,632
AISC, After By-product Credits	$	4,628		$	11,674				$	25,360
Divided by ounces produced		2,430			888					3,318
Cash Cost, Before By-product Credits, per Ounce	$	21.82		$	26.63				$	23.10
By-product credits per ounce		(22.72	)		(20.06	)				(22.01	)
Cash Cost, After By-product Credits, per Ounce	$	(0.90	)	$	6.57				$	1.09
AISC, Before By-product Credits, per Ounce	$	24.62		$	33.21				$	29.65
By-product credits per ounce		(22.72	)		(20.06	)				(22.01	)
AISC, After By-product Credits, per Ounce	$	1.90		$	13.15				$	7.64

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In thousands (except per ounce amounts)	Three Months Ended March 31, 2021														Three Months Ended March 31, 2022
	Greens Creek			Lucky Friday⁽²⁾			San Sebastian⁽³⁾			Corporate⁽⁴⁾		Total Silver			Casa Berardi			Total Gold
Total cost of sales	$	53,181		$	22,794		$	94				$	76,069		$	62,168		$	62,168
Depreciation, depletion and amortization		(14,821	)		(6,336	)		—					(21,157	)		(15,846	)		(15,846	)
Treatment costs		10,541			4,978			—					15,519			458			458
Change in product inventory		401			(93	)		—					308			(563	)		(563	)
Reclamation and other costs		(261	)		(233	)		(94	)				(588	)		(210	)		(210	)
Cash Cost, Before By-product Credits ⁽¹⁾		49,041			21,110			—					70,151			46,007			46,007
Reclamation and other costs		848			264			—					1,112			210			210
Exploration		123			—			—			435		558			1,394			1,394
Sustaining capital		4,892			5,454			—			—		10,346			7,281			7,281
General and administrative											8,007		8,007						—
AISC, Before By-product Credits ⁽¹⁾		54,904			26,828			—					90,174			54,892			54,892
By-product credits:
Zinc		(22,767	)		(4,753	)		—					(27,520	)
Gold		(20,996	)		—			—					(20,996	)
Lead		(7,020	)		(9,775	)		—					(16,795	)
Silver																(166	)		(166	)
Total By-product credits		(50,783	)		(14,528	)		—					(65,311	)		(166	)		(166	)
Cash Cost, After By-product Credits	$	(1,742	)	$	6,582		$	—				$	4,840		$	45,841		$	45,841
AISC, After By-product Credits	$	4,121		$	12,300		$	—				$	24,863		$	54,726		$	54,726
Divided by ounces produced		2,585			864			—					3,449			30			30
Cash Cost, Before By-product Credits, per Ounce	$	18.98		$	24.43		$	—				$	20.34		$	1,521		$	1,521
By-product credits per ounce		(19.65	)		(16.81	)		—					(18.94	)		(5	)		(5	)
Cash Cost, After By-product Credits, per Ounce	$	(0.67	)	$	7.62		$	—				$	1.40		$	1,516		$	1,516
AISC, Before By-product Credits, per Ounce	$	21.24		$	31.05		$	—				$	26.15		$	1,815		$	1,815
By-product credits per ounce		(19.65	)		(16.81	)		—					(18.94	)		(5	)		(5	)
AISC, After By-product Credits, per Ounce	$	1.59		$	14.24		$	—				$	7.21		$	1,810		$	1,810

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In thousands (except per ounce amounts)	Three Months Ended March 31, 2021									Three Months Ended March 31, 2022
	Casa Berardi ⁽⁵⁾			Nevada Operations ⁽⁶⁾			Total Gold			Total Silver			Total Gold			Total
Total cost of sales	$	62,516		$	7,455		$	69,971		$	78,902		$	62,168		$	141,070
Depreciation, depletion and amortization		(25,541	)		(2,633	)		(28,174	)		(19,452	)		(15,846	)		(35,298	)
Treatment costs		714			11			725			12,773			458			13,231
Change in product inventory		(47	)		(1,084	)		(1,131	)		5,633			(563	)		5,070
Reclamation and other costs		(208	)		(27	)		(235	)		(1,211	)		(210	)		(1,421	)
Cash costs excluded		—			(115	)		(115	)
Cash Cost, Before By-product Credits ⁽¹⁾		37,434			3,607			41,041			76,645			46,007			122,652
Reclamation and other costs		208			27			235			987			210			1,197
Exploration		907			—			907			881			1,394			2,275
Sustaining capital		7,758			89			7,847			11,566			7,281			18,847
General and administrative								—			8,294			—			8,294
AISC, Before By-product Credits ⁽¹⁾		46,307			3,723			50,030			98,373			54,892			153,265
By-product credits:
Zinc											(34,628	)		—			(34,628	)
Gold											(18,583	)		—			(18,583	)
Lead											(19,802	)		—			(19,802	)
Silver		(278	)		—			(278	)					(166	)		(166	)
Total By-product credits		(278	)		—			(278	)		(73,013	)		(166	)		(73,179	)
Cash Cost, After By-product Credits	$	37,156		$	3,607		$	40,763		$	3,632		$	45,841		$	49,473
AISC, After By-product Credits	$	46,029		$	3,723		$	49,752		$	25,360		$	54,726		$	80,086
Divided by ounces produced		36			3			39			3,318			30
Cash Cost, Before By-product Credits, per Ounce	$	1,035		$	1,416		$	1,059		$	23.10		$	1,521
By-product credits per ounce		(8	)		—			(7	)		(22.01	)		(5	)
Cash Cost, After By-product Credits, per Ounce	$	1,027		$	1,416		$	1,052		$	1.09		$	1,516
AISC, Before By-product Credits, per Ounce	$	1,280		$	1,461		$	1,291		$	29.65		$	1,815
By-product credits per ounce		(8	)		—			(7	)		(22.01	)		(5	)
AISC, After By-product Credits, per Ounce	$	1,272		$	1,461		$	1,284		$	7.64		$	1,810

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In thousands (except per ounce amounts)	Three Months Ended March 31, 2021									Three Months Ended March 31, 2021
	Total Silver			Total Gold			Total			Greens Creek			Lucky Friday			Corporate and other⁽²⁾			Total Silver
Total cost of sales	$	76,069		$	69,971		$	146,040		$	53,181		$	22,794		$	94		$	76,069
Depreciation, depletion and amortization		(21,157	)		(28,174	)		(49,331	)		(14,821	)		(6,336	)		—			(21,157	)
Treatment costs		15,519			725			16,244			10,541			4,978			—			15,519
Change in product inventory		308			(1,131	)		(823	)		401			(93	)		—			308
Reclamation and other costs		(588	)		(235	)		(823	)		(261	)		(233	)		(94	)		(588	)
Cash costs excluded		—			(115	)		(115	)
Cash Cost, Before By-product Credits ⁽¹⁾		70,151			41,041			111,192			49,041			21,110			—			70,151
Reclamation and other costs		1,112			235			1,347			848			264			—			1,112
Exploration		558			907			1,465			123			—			435			558
Sustaining capital		10,346			7,847			18,193			4,892			5,454			—			10,346
General and administrative		8,007			—			8,007									8,007			8,007
AISC, Before By-product Credits ⁽¹⁾		90,174			50,030			140,204			54,904			26,828			8,442			90,174
By-product credits:
Zinc		(27,520	)		—			(27,520	)		(22,767	)		(4,753	)		—			(27,520	)
Gold		(20,996	)		—			(20,996	)		(20,996	)		—			—			(20,996	)
Lead		(16,795	)		—			(16,795	)		(7,020	)		(9,775	)		—			(16,795	)
Silver					(278	)		(278	)
Total By-product credits		(65,311	)		(278	)		(65,589	)		(50,783	)		(14,528	)		—			(65,311	)
Cash Cost, After By-product Credits	$	4,840		$	40,763		$	45,603		$	(1,742	)	$	6,582		$	—		$	4,840
AISC, After By-product Credits	$	24,863		$	49,752		$	74,615		$	4,121		$	12,300		$	8,442		$	24,863
Divided by ounces produced		3,449			39						2,585			864						3,449
Cash Cost, Before By-product Credits, per Ounce	$	20.34		$	1,059					$	18.98		$	24.43					$	20.34
By-product credits per ounce		(18.94	)		(7	)					(19.65	)		(16.81	)					(18.94	)
Cash Cost, After By-product Credits, per Ounce	$	1.40		$	1,052					$	(0.67	)	$	7.62					$	1.40
AISC, Before By-product Credits, per Ounce	$	26.15		$	1,291					$	21.24		$	31.05					$	26.15
By-product credits per ounce		(18.94	)		(7	)					(19.65	)		(16.81	)					(18.94	)
AISC, After By-product Credits, per Ounce	$	7.21		$	1,284					$	1.59		$	14.24						7.21

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In thousands (except per ounce amounts)	Three Months Ended March 31, 2020														Three Months Ended March 31, 2021
	Greens Creek			Lucky Friday⁽²⁾			San Sebastian			Corporate⁽⁴⁾		Total Silver			Casa Berardi			Nevada Operations⁽³⁾			Total Gold
Total cost of sales	$	49,182		$	2,832		$	8,300				$	60,314		$	59,927		$	7,455		$	67,382
Depreciation, depletion and amortization		(12,429	)		(302	)		(1,473	)				(14,204	)		(22,952	)		(2,960	)		(25,912	)
Treatment costs		15,826			432			104					16,362			714			11			725
Change in product inventory		2,870			914			253					4,037			(47	)		(1,084	)		(1,131	)
Reclamation and other costs		319			—			(361	)				(42	)		(208	)		185			(23	)
Exclusion of Lucky Friday costs		—			(3,876	)		—					(3,876	)
Cash Cost, Before By-product Credits ⁽¹⁾		55,768			—			6,823					62,591			37,434			3,607			41,041
Reclamation and other costs		788			—			114					902			208			27			235
Exploration		4			—			767			350		1,121			907			—			907
Sustaining capital		5,510			—			56			—		5,566			7,758			89			7,847
General and administrative											8,939		8,939
AISC, Before By-product Credits ⁽¹⁾		62,070			—			7,760					79,119			46,307			3,723			50,030
By-product credits:
Zinc		(16,026	)		—			—					(16,026	)
Gold		(17,197	)		—			(4,429	)				(21,626	)
Lead		(6,926	)		—			—					(6,926	)
Silver																(278	)		—			(278	)
Total By-product credits		(40,149	)		—			(4,429	)				(44,578	)		(278	)		—			(278	)
Cash Cost, After By-product Credits	$	15,619		$	—		$	2,394				$	18,013		$	37,156		$	3,607		$	40,763
AISC, After By-product Credits	$	21,921		$	—		$	3,331				$	34,541		$	46,029		$	3,723		$	49,752
Divided by ounces produced		2,776			—			347					3,123			36			3			39
Cash Cost, Before By-product Credits, per Ounce	$	20.09		$	—		$	19.67				$	20.04		$	1,035		$	1,416		$	1,059
By-product credits per ounce		(14.46	)		—			(12.76	)				(14.27	)		(8	)		—			(7	)
Cash Cost, After By-product Credits, per Ounce	$	5.63		$	—		$	6.91				$	5.77		$	1,027		$	1,416		$	1,052
AISC, Before By-product Credits, per Ounce	$	22.36		$	—		$	22.35				$	25.33		$	1,280		$	1,461		$	1,291
By-product credits per ounce		(14.46	)		—			(12.76	)				(14.27	)		(8	)		—			(7	)
AISC, After By-product Credits, per Ounce	$	7.90		$	—		$	9.59					11.06		$	1,272		$	1,461		$	1,284

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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

~~Table of Contents~~

In thousands (except per ounce amounts)	Three Months Ended March 31, 2020									Three Months Ended March 31, 2021
	Total Silver			Total Gold			Total			Total Silver			Total Gold			Total
Total cost of sales	$	60,314		$	65,239		$	125,553		$	76,069		$	67,382		$	143,451
Depreciation, depletion and amortization		(14,204	)		(25,462	)		(39,666	)		(21,157	)		(25,912	)		(47,069	)
Treatment costs		16,362			600			16,962			15,519			725			16,244
Change in product inventory		4,037			6,888			10,925			308			(1,131	)		(823	)
Reclamation and other costs		(42	)		(423	)		(465	)		(588	)		(23	)		(611	)
Exclusion of Lucky Friday costs		(3,876	)		—			(3,876	)
Cash Cost, Before By-product Credits ⁽¹⁾		62,591			46,842			109,433			70,151			41,041			111,192
Reclamation and other costs		902			423			1,325			1,112			235			1,347
Exploration		1,121			776			1,897			558			907			1,465
Sustaining capital		5,566			9,332			14,898			10,346			7,847			18,193
General and administrative		8,939			—			8,939			8,007			—			8,007
AISC, Before By-product Credits ⁽¹⁾		79,119			57,373			136,492			90,174			50,030			140,204
By-product credits:
Zinc		(16,026	)		—			(16,026	)		(27,520	)		—			(27,520	)
Gold		(21,626	)		—			(21,626	)		(20,996	)		—			(20,996	)
Lead		(6,926	)		—			(6,926	)		(16,795	)		—			(16,795	)
Silver		0			(453	)		(453	)		—			(278	)		(278	)
Total By-product credits		(44,578	)		(453	)		(45,031	)		(65,311	)		(278	)		(65,589	)
Cash Cost, After By-product Credits	$	18,013		$	46,389		$	64,402		$	4,840		$	40,763		$	45,603
AISC, After By-product Credits	$	34,541		$	56,920		$	91,461		$	24,863		$	49,752		$	74,615
Divided by ounces produced		3,123			44						3,449			39
Cash Cost, Before By-product Credits, per Ounce	$	20.04		$	1,071					$	20.34		$	1,059
By-product credits per ounce		(14.27	)		(10	)					(18.94	)		(7	)
Cash Cost, After By-product Credits, per Ounce	$	5.77		$	1,061					$	1.40		$	1,052
AISC, Before By-product Credits, per Ounce	$	25.33		$	1,312					$	26.15		$	1,291
By-product credits per ounce		(14.27	)		(10	)					(18.94	)		(7	)
AISC, After By-product Credits, per Ounce	$	11.06		$	1,302					$	7.21		$	1,284

(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 and royalties, before by-product revenues earned from all metals other than the primary metal produced at each ~~unit.~~operation. AISC, Before By-product Credits also includes on-site exploration, reclamation, and sustaining capital costs.

(2)

The unionized employees at Lucky Friday were on strike from March 2017 until January 2020, and production at Lucky Friday had been limited from the start of the strike until the ramp-up was substantially completed in the fourth quarter of 2020. Costs related to ramp-up activities totaling $6.3 million, along with $1.8 million in non-cash depreciation expense, 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, 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, and AISC, After By-product Credits.

~~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)~~(3)

InProduction was suspended at the Hollister mine in the third quarter of 2019 and at the Midas mine and Aurora mill in late ~~March 2020,~~2019, and at 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, resultingMidas mill and Fire Creek mine in ~~reduced mill throughput. Suspension-related~~mid-2021. Care and maintenance costs at Nevada Operations totaling ~~$0.9~~$5.7 million and $3.6 million for the first ~~quarter~~quarters of ~~2020~~2022 and 2021, respectively, are reported in a separate line item on our consolidated statements of operations and excluded from the calculations of total 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.

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

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

	Three Months Ended March 31,
	2022			2021
Net cash provided by operating activities (GAAP)	$	37,909		$	37,936
Less: Additions to properties, plants, equipment and mineral interests (GAAP)		(21,478	)		(21,413	)
Free cash flow	$	16,431		$	16,523

Financial Liquidity and Capital Resources

Liquidity Overview

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~~maintain an acceptable level of 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,~~2022, we had ~~$139.8~~$212.0 million in cash and cash equivalents, of which ~~$16.8~~$23.4 million was held in foreign subsidiaries' local currency ~~denominated accounts readily convertible to U.S. dollars~~that we anticipate utilizing for near-term operating, exploration or capital costs by those foreign subsidiaries. We also have USD cash and cash equivalent balances held by our foreign subsidiaries that, if repatriated, 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):~~

March 31, 2021

December 31, 2020

Cash and cash equivalents held in U.S. dollars
$ 123.0 $ 116.4
Cash and cash equivalents held in foreign currency
16.8 13.4
Total cash and cash equivalents
139.8 129.8
Marketable equity securities, current and non-current
11.7 19.3
Total cash, cash equivalents and investments
$ 151.5 $ 149.1

~~Cash and cash equivalents increased by $10.0 million~~As discussed in the first three months of 2021 as a result of operational performance. Cash held in foreign currencies represents balances in CAD and Mexican pesos ("MXN"), with a $3.4 million increase in the first quarter of 2021 resulting from an increase in CAD held. The value of marketable equity securities decreased by $7.6 million.

~~On February 19, 2020,~~Overview above, we ~~completed an offering of Senior Notes in the total principal amount of USD$475 million~~. The Senior Notes are due February 15, 2028 and bear interest at a rate of 7.25% per year from the most recent payment date to which interest has been paid or provided for. 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 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 amounts drawn at an annual rate 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. There was no amount outstanding under the revolving credit facility as of March 31, 2021, with the exception of $20.3 million utilized for letters of credit. See ~~Note 7~~ of ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~ ~~for more information on our debt arrangements.~~

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We continue to address the COVID-19 outbreak and face uncertainty related to the potential additional ~~impact~~impacts 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 impactThe impacts 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, if required, 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 inNote 1012 of Notes to Consolidated Financial Statements in our ~~2020 Form~~2021 10-K, our ~~Board~~board of ~~Directors~~directors declared and paid dividends on common stock totaling $3.4 million in the first quarter of 2022 and $4.7 million in the first quarter of ~~2021 and $1.3 million in the first quarter of 2020.~~2021. Our dividend policy has a silver-linked component which ties the amount of declared common stock dividends to our realized silver price for the preceding quarter. Another component of our common stock dividend policy anticipates paying an annual minimum dividend. ~~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~~For illustrative purposes only, the ~~first quarter of 2021 realized silver price of $25.66. The~~ table below ~~provides an overview of the augmented silver-linked~~summarizes potential dividend ~~policy and the increased minimum dividends.~~amounts under our dividend policy.

Quarterly Average Realized Silver Price ($ per ounce)		Quarterly Silver- Linked Dividend ($ per share)		Annualized Silver-Linked Dividend ($ per share)		Annualized Minimum Dividend ($ per share)		Annualized Dividends per Share: Silver- Linked and Minimum ($ per share)
$	20	$	0.0025	$	0.01	$	0.015	$	0.025
$	25	$	0.0100	$	0.04	$	0.015	$	0.055
$	30	$	0.0150	$	0.06	$	0.015	$	0.075
$	35	$	0.0250	$	0.10	$	0.015	$	0.115
$	40	$	0.0350	$	0.14	$	0.015	$	0.155
$	45	$	0.0450	$	0.18	$	0.015	$	0.195
$	50	$	0.0550	$	0.22	$	0.015	$	0.235

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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.

Pursuant to our stock repurchase program described in Note 1012 of Notes to Consolidated Financial Statementsin our ~~2020 Form~~2021 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 March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, 934,100 shares had been purchased in prior periods at an average price of $3.99 per share, leaving 19.1 million shares that may yet be purchased under the program. We have not repurchased any shares since June 2014. The closing price of our common stock at May ~~4, 2021,~~5, 2022, was ~~$6.25~~$5.08 per share.

Pursuant to anour at-the-market equity distribution agreement ~~dated February 18,~~ (“ATM”) described in Note 12 of Notes to Consolidated Financial Statements in our2021 10-K, we may offer and sell up to 60 million shares of our common stock from time to time to or through sales agents. Sales of the shares, if any, will be made by means of ordinary brokers transactions or as otherwise agreed between the Company and the agents as principals. Whether or not we engage in sales from time to time may depend on a variety of factors, including our share price ~~our~~and 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.~~2022.

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.

~~Table of Contents~~

Asbelieve 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 our revolving credit facility, ~~we believe~~ we will be able to meet our obligations and other potential cash requirements during the next 12 months from the date of this report. Our obligations and other uses of cash may include, but are not limited to: debt service obligations related to the Senior Notes, ~~and~~ IQ ~~Notes; principal~~Notes and ~~interest payments under our~~ revolving credit ~~facility; deferral of revenues,~~facility (if amounts are drawn); care-and-maintenance and other costs related to addressing the ~~impacts~~impact of COVID-19 on our operations; capital expenditures at our operations; potential acquisitions of other mining companies or properties; regulatory matters; litigation; potential repurchases of our common stock under the program described above; and payment of dividends on common stock, if declared by our board of directors. We currently estimate that a total of approximately ~~$110~~$135 million will be spent in ~~2021~~2022 on capital expenditures, primarily for equipment, infrastructure, and development at our mines, including ~~$21.4~~$21.5 million already incurred as of March 31, ~~2021.~~2022. We also estimate that exploration and pre-development expenditures will total approximately ~~$38.5~~$45 million in ~~2021,~~2022, including ~~$6.7~~$12.8 million already incurred as of March 31, ~~2021.~~2022. Our expenditures for these items and our related plans for ~~2021~~2022 may change based upon our financial position, metals prices, and other considerations. Our ability to fund the activities described above will depend on our operating performance, metals prices, our ability to estimate revenues and costs, sources of liquidity available to us, including the revolving credit facility, and other factors. A sustained downturn in metals prices, significant increase in operational or capital costs or other uses of cash, our inability to access the credit facility or the sources of liquidity discussed above, or other factors beyond our control could impact our plans. In our 2021 10-K, see Item 1A. Risk Factors - An extended decline in metals prices, an increase in operating or capital costs, mine accidents or closures, increasing regulatory obligations, or our inability to convert resources or exploration targets to reserves may cause us to record write-downs, which could negatively impact our results of operations and We have a substantial amount of debt that could impair our financial health and prevent us from fulfilling our obligations under our existing and future indebtedness.

Three Months Ended

March 31, 2021

March 31, 2020

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

We may defer some capital expenditures 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. We cannot assure you that such financing will be available to us.

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Our liquid assets include (in millions):

	March 31, 2022		December 31, 2021
Cash and cash equivalents held in U.S. dollars	$	188.6	$	196.2
Cash and cash equivalents held in foreign currency		23.4		13.8
Total cash and cash equivalents		212.0		210.0
Marketable equity securities, current and non-current		29.2		14.4
Total cash, cash equivalents and investments	$	241.2	$	224.4

Cash and cash equivalents increased by $2.0 million in the first three months of 2022 as a result of operational performance. Cash held in foreign currencies represents balances in CAD and MXN, with a $9.6 million increase in the first quarter of 2022 resulting from an increase in CAD held. The value of marketable equity securities increased by $14.8 million due to acquisitions of $10.9 million and stock price appreciation during the quarter.

Three Months Ended

March 31,

2022

March 31,

2021

Cash provided by operating activities (in millions)

37.9

Cash provided by operating activities in the first quarter of ~~2021 increased by $33.0 million~~2022 was substantially unchanged compared to the first quarter of ~~2020. The increase was due to a higher net~~2021, with lower income ~~generated from higher metal sales volumes and realized prices, and lower product inventory, partially~~adjusted for non-cash items offset by ~~lower accounts payable and accrued liabilities,~~ the ~~timing~~impact of payment of incentive compensation related to prior-year performance and higher accounts receivable due to the timing of concentrate shipments. In the first quarter of 2021, we made interest payments on our Senior Notes and IQ Notes of $17.2 million and $0.9 million, respectively, In the first quarter of 2020, we made interest payments on our previously-outstanding 2021 Notes, upon their redemption, and revolving credit facility of $13.3 million and $0.6 million, respectively.working capital changes.

Three Months Ended

March 31, 2021

March 31, 2020

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

Three Months Ended

March 31,

2022

March 31,

2021

Cash used in investing activities (in millions)

(29.2

)

(21.4

)

During the first quarter of ~~2021~~2022 we invested ~~$21.4~~$21.5 million in capital expenditures compared to ~~$19.9 million in the first quarter of 2020, with the variance primarily due to 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 quarter of 2020, we received $469.5 million in net proceeds from the issuance of 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 of $4.7 million and $1.3$21.4 million in the first quarter of 2021, with higher capital spending at Greens Creek and ~~2020, respectively,~~Lucky Friday offset by lower spending at Casa Berardi. In the first quarter of 2022 we acquired investments in other mining companies for a total cost of $10.9 million and recognized $2.5 million in proceeds on the sale of investments, with no such activity in the first quarter of 2021.

Three Months Ended

March 31,

2022

March 31,

2021

Cash used in financing activities (in millions)

(7.2

)

(6.8

)

We paid total cash dividends ~~of $0.1 million~~ on our ~~Series B Preferred Stock during each~~common and preferred stock of ~~those periods.~~$3.5 million and $4.8 million in the first quarter of 2022 and 2021, respectively. We made repayments on our capital leases of ~~$1.9~~$1.7 million and ~~$1.3~~$1.9 million in the first quarter of ~~2021~~2022 and ~~2020,~~2021, respectively.

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~~The effect of changes in foreign exchange rates~~Exchange rate fluctuations between the U.S. dollar and the Canadian dollar and Mexican peso resulted in a ~~$0.2~~$0.5 million increase in cash and cash equivalents in the first quarter of ~~2021~~2022 compared to ~~a decrease~~an increase of ~~$1.7~~$0.2 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.~~2021.

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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 and certain capital expenditures and lease arrangements as of March 31, ~~2021~~2022 (in thousands):

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

	Payments Due By Period
	Less than 1 year		1-3 years		4-5 years		More than 5 years		Total
Purchase and contractual obligations ⁽¹⁾	$	22,645	$	—	$	—	$	—	$	22,645
Commitment fees ⁽²⁾		1,496		—		—		—		1,496
Finance lease commitments ⁽³⁾		6,365		8,194		943		—		15,502
Operating lease commitments ⁽⁴⁾		3,057		3,607		2,100		6,174		14,938
Senior Notes ⁽⁵⁾		34,438		68,875		68,875		505,132		677,320
IQ Notes ⁽⁶⁾		2,515		5,030		39,295		—		46,840
Total contractual cash obligations	$	70,516	$	85,706	$	111,213	$	511,306	$	778,741

(1)

Consists of open purchase orders and contractual obligations of approximately ~~$2.8~~$7.7 million at ~~the~~ Greens Creek, ~~unit, $4.0~~$10.1 million at ~~the~~ Lucky Friday, ~~unit, $0.7~~$0.2 million at ~~the~~ Casa Berardi ~~unit~~ and ~~$2.7~~$4.6 million at the Nevada ~~Operations unit.~~Operations.

(2)

~~As of March 31, 2021, we were committed to approximately $2.1 million for various items.~~

~~(3)~~

We have a $250 million revolving credit agreement ~~under~~ which we are required to pay a standby fee of 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.is currently undrawn. We had ~~$20.3~~$17.3 million in letters of credit outstanding as of March 31, ~~2021.~~2022. The amounts in the table above assume no additional amounts will be drawn in future periods, and include only the standby fee on the current undrawn balance. For more information on our credit facility, see Note 7 of Notes to Condensed Consolidated Financial Statements (Unaudited).

~~(4)~~(3)

Includes scheduled finance lease payments of ~~$17.5 million, $0.4~~$13.9 million and ~~$0.3~~$1.6 million (including interest)~~, respectively,~~ for equipment at ~~our~~ Greens Creek and Casa Berardi, ~~and Nevada Operations units.~~respectively.

~~(5)~~(4)

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 benefit payment requirements for the 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 4~~ of ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~ ~~for more information.~~

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~~(7)~~(5)

On February 19, 2020, we completed an offering of $475 million in aggregate principal amount of our Senior Notes due February 15, 2028. The Senior Notes bear interest at a rate of 7.25% per year, ~~from the original date of issuance or the most recent payment date to which~~with interest ~~has been paid or provided for. Interest on the Senior Notes is~~ payable on February 15 and August 15 of each year, commencing August 15, 2020. See Note 7 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information.

~~(8)~~(6)

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.~~amount. 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 estimated costs associated with mine closure, reclamation of land and other environmental matters. At March 31, ~~2021,~~2022, our liabilities for these matters totaled ~~$120.3~~$114.2 million. Future expenditures related to closure, reclamation and environmental expenditures at our sites are difficult to estimate, although we anticipate we will incur expenditures relating to these obligations over the next 30 years. For additional information relating to our environmental obligations, see Note 10 of Notes to Condensed Consolidated Financial Statements (Unaudited).

~~Off-Balance Sheet Arrangements~~Critical Accounting Estimates

~~At March 31,~~There have been no significant changes to the critical accounting estimates disclosed in Management's Discussion and Analysis of Financial Condition and Results of Operations in our 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.Form 10-K.

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Guarantor Subsidiaries

Presented below are Hecla’s unaudited interim condensed consolidating financial statements as required by Rule 3-10 of Regulation S-X of the Securities Exchange Act of 1934, as amended, resulting from the guarantees by certain of Hecla's subsidiaries of the Senior Notes and IQ Notes (see Note 7of Notes to Condensed Consolidated Financial Statements (Unaudited) 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 Hecla Quebec, ~~Inc..~~Inc. We completed the offering of the Senior Notes on February 19, 2020 under our shelf registration statement previously filed with the SEC. We issued the IQ Notes in four equal tranches between July and October 2020.

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The unaudited interim condensed consolidating financial statements below have been prepared from our financial information on the same basis of accounting as the unaudited interim condensed consolidated financial statements set forth elsewhere in this report. Investments in the subsidiaries are accounted for under the equity method. Accordingly, the entries necessary to consolidate Hecla, the Guarantors, and our non-guarantor subsidiaries are reflected in the intercompany eliminations column. In the course of preparing consolidated financial statements, we eliminate the 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.

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•

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 Guarantors are not presented because the guarantees by the Guarantors are joint and several and full and unconditional, except for certain customary release provisions, including: (1) the sale or disposal of all or substantially all of the assets of the Guarantor; (2) the sale or other disposition of the capital stock of the Guarantor; (3) the Guarantor is designated as an unrestricted entity in accordance with the applicable provisions of the indenture; (4) Hecla ceases to be a borrower as defined in the indenture; and (5) upon legal or covenant defeasance or satisfaction and discharge of the indenture.

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Unaudited Interim Condensed Consolidating Balance Sheets

	As of March 31, 2021															As of March 31, 2022
	Parent			Guarantors				Non- Guarantors			Eliminations			Consolidated		Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)															(in thousands)
Assets
Cash and cash equivalents	$	95,223		$	16,876			$	27,651		$	—		$	139,750	$	164,037		$	29,638		$	18,354		$	—		$	212,029
Other current assets		7,378			149,096				1,763			(70	)		158,167		4,798			125,786			1,343			—			131,927
Properties, plants, equipment and mineral interests - net		1,913			2,310,363				8,271			—			2,320,547		1,913			2,288,710			8,235			—			2,298,858
Intercompany receivable (payable)		(139,294	)		(367,504	)			220,389			286,409			—		(222,013	)		(219,670	)		214,657			227,026			—
Investments in subsidiaries		1,768,493			—				—			(1,768,493	)		—		1,566,919			—			—			(1,566,919	)		—
Other non-current assets		306,995			20,305				(121,813	)		(168,874	)		36,613		360,176			32,607			(116,294	)		(180,404	)		96,085
Total assets	$	2,040,708		$	2,129,136			$	136,261		$	(1,651,028	)	$	2,655,077	$	1,875,830		$	2,257,071		$	126,295		$	(1,520,297	)	$	2,738,899
Liabilities and Stockholders' Equity
Current liabilities	$	(233,794	)	$	184,713			$	5,705		$	152,494		$	109,118	$	(410,590	)	$	251,290		$	1,714		$	345,826		$	188,240
Long-term debt		507,992			17,088				170			—			525,250		508,852			17,878			507			—			527,237
Non-current portion of accrued reclamation		—			107,055				6,616			—			113,671		—			99,899			3,713			—			103,612
Non-current deferred tax liability		15,384			168,865				—			(35,029	)		149,220		2,937			437,077			—			(299,204	)		140,810
Other non-current liabilities		26,251			5,992				700			—			32,943		46,088			3,661			708			—			50,457
Stockholders' equity		1,724,875			1,645,423		��		123,070			(1,768,493	)		1,724,875		1,728,543			1,447,266			119,653			(1,566,919	)		1,728,543
Total liabilities and stockholders' equity	$	2,040,708		$	2,129,136			$	136,261		$	(1,651,028	)	$	2,655,077	$	1,875,830		$	2,257,071		$	126,295		$	(1,520,297	)	$	2,738,899

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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

	Three Months Ended March 31, 2022
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Sales	$	(4,770	)	$	191,269		$	—		$	—		$	186,499
Cost of sales		1,050			(106,822	)		—			—			(105,772	)
Depreciation, depletion and amortization		—			(35,298	)		—			—			(35,298	)
General and administrative		(4,393	)		(3,764	)		(137	)		—			(8,294	)
Exploration and pre-development		(146	)		(10,646	)		(2,016	)		—			(12,808	)
Fair value adjustments, net		256			1,939			3,770			—			5,965
Equity in earnings of subsidiaries		4,212			—			—			(4,212	)		—
Other income (expense)		11,351			(21,886	)		798			(10,771	)		(20,508	)
Income (loss) before income and mining taxes		7,560			14,792			2,415			(14,983	)		9,784
Income and mining tax (provision) benefit		(3,407	)		(13,006	)		11			10,771			(5,631	)
Net income (loss)		4,153			1,786			2,426			(4,212	)		4,153
Preferred stock dividends		(138	)		—			—			—			(138	)
Income (loss) applicable to common stockholders		4,015			1,786			2,426			(4,212	)		4,015
Net income (loss)		4,153			1,786			2,426			(4,212	)		4,153
Changes in comprehensive loss		(33,165	)		—			—			—			(33,165	)
Comprehensive (loss) income	$	(29,012	)	$	1,786		$	2,426		$	(4,212	)	$	(29,012	)

Unaudited Interim Condensed Consolidating Statements of Cash Flows

	Three Months Ended March 31, 2022
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Cash flows from operating activities	$	1,891		$	30,240		$	18,489		$	(12,711	)	$	37,909
Cash flows from investing activities:
Additions to properties, plants, equipment and mineral interests		—			(21,476	)		(2	)					(21,478	)
Other investing activities, net		(4,213	)		(2,173	)		(5,591	)		4,213			(7,764	)
Cash flows from financing activities:
Dividends paid to stockholders		(3,509	)		—			—						(3,509	)
Payments on debt		—			(1,695	)		—						(1,695	)
Other financing activity		(5,240	)		10,139			(15,372	)		8,498			(1,975	)
Effect of exchange rate changes on cash		—			509			10			—			519
Changes in cash, cash equivalents and restricted cash and cash equivalents		(11,071	)		15,544			(2,466	)		—			2,007
Beginning cash, cash equivalents and restricted cash and cash equivalents		175,108			15,135			20,820			—			211,063
Ending cash, cash equivalents and restricted cash and cash equivalents	$	164,037		$	30,679		$	18,354		$	—		$	213,070

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

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

The following discussion about our exposure to market risks and risk management activities includes forward-looking statements that involve risks and uncertainties, as well as summarizes the financial instruments held by us at March 31, ~~2021,~~2022, 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 Item 1A. – Risk Factors of our ~~2020~~2021 Form 10-K).

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Metals Prices

Changes in the market prices of silver, gold, lead and zinc can significantly affect our profitability and cash flow. ~~Metal~~Metals 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~~2021 Form 10-K ). We utilize financially-settled forward ~~and put option~~ contracts to manage our exposure to changes in prices for 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 all performance obligations have been completed and the transaction price can be determined or reasonably estimated. For concentrate sales, revenues are generally recorded at the time of 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 Item 1A – Risk Factors – A substantial or extended decline in metals prices would have a material adverse effect on us in our ~~2020~~2021 Form 10-K). At March 31, ~~2021,~~2022, metals contained in concentrate sales and exposed to future price changes totaled ~~2.0~~2.1 million ounces of silver, ~~5,523~~5,476 ounces of gold, ~~8,831~~10,798 tons of zinc, and ~~4,522~~5,940 tons of lead. If the price for each metal were to change by 10%, the change in the total value of the concentrates sold would be approximately ~~$8.8~~$11.7 million. As discussed in ~~Commodity-Price Risk Management~~Note 8 ~~below,~~of Notes to Condensed Consolidated Financial Statements (Unaudited), 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

See Note 8 of Notes to Condensed Consolidated Financial Statements (Unaudited) and Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our ~~2020~~2021 Form 10-K for a description of our commodity-price risk management program.

Foreign Currency Risk Management

We operate or have mining interests in Canada and Mexico, which exposes us to risks associated with fluctuations in the exchange rates between the USD and the CAD and MXN, respectively. We have determined the functional currency for our Canadian and Mexican operations is the USD. As such, foreign exchange gains and losses associated with the re-measurement of monetary assets and liabilities from CAD and MXN to USD are recorded to earnings each period. For the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, we recognized a net foreign exchange loss of ~~$2.1~~$2.0 million and ~~gain of $6.6~~$2.1 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 March 31, ~~2021~~2022 would have resulted in a change of approximately ~~$10.5~~$10.1 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 March 31, ~~2021~~2022 would have resulted in a change of approximately $0.1 million in our net foreign exchange gain or loss.

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See Note 8 of Notes to Condensed Consolidated Financial Statements (Unaudited) and Note 11 of Notes to Consolidated Financial Statements in our ~~2020~~2021 Form 10-K for a description of our foreign currency risk management.

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Item 4. Controls and Procedures

An evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures as required by Securities Exchange Act 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 March 31, ~~2021,~~2022, 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 March 31, ~~2021~~2022 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 certain legal proceedings, refer to Note 10 of Notes to Condensed Consolidated Financial Statements (Unaudited), which is incorporated by reference into this Item 1.

Item 1A. Risk Factors

Item 1A - Risk Factors of our annual report filed on Form 10-K for the year ended December 31, ~~2020~~2021 sets forth information relating to important risks and uncertainties that could materially adversely affect our business, financial condition or operating results.

~~Item 2. Unregistered Sales of Securities and Use of Proceeds~~

On January 27, 2021, we issued 3,500,000 unregistered shares of our common stock to the Hecla Mining Company Pre-2005 Supplemental Excess Retirement Plan and 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.

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Item 6. Exhibits

Hecla Mining Company and Wholly Owned Subsidiaries

Form 10-Q - March 31, ~~2021~~2022

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~~

~~Bylaws of Hecla Mining Company, as amended February 26, 2021. Filed as exhibit 3.2 to 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 September 30, 2006, and filed on November 9, 2006.

~~10.2~~

Form of Change of Control Agreement between Hecla Mining Company and Russell D. Lawlar, incorporated by reference to Exhibit 10.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, and filed on February 23, 2016.

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

31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *

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. *

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95	Mine safety information listed in Section 1503 of the Dodd-Frank Act. *

101.INS

Inline XBRL 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.

Items 2, 3 and 5 of Part II are not applicable and are omitted from this report.

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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~~10, 2022	By:	/s/ Phillips S. Baker, Jr.
			Phillips S. Baker, Jr., President,
			Chief Executive Officer and Director

Date:	May ~~6, 2021~~10, 2022	By:	/s/ Russell D. Lawlar
			Russell D. Lawlar, Senior Vice President,
			Chief Financial Officer ~~and Treasurer~~

5851

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

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

	Three Months Ended
	March 31, 2021		March 31, 2020
Cash provided by operating activities (in millions)	$	37.9	$	4.9

	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