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~~

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

For the quarterly period ended September 30, ~~2021~~

2022

or

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

☐	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~~

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 Incorporation or Organization		I.R.S. Employer	Identification No.
	~~Incorporation or Organization~~			~~Identification No.~~

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

~~208-769-4100~~
~~Registrant's Telephone Number, Including Area 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	HL	New York Stock Exchange

Series B Cumulative Convertible Preferred Stock, par value $0.25 per share	HL-PB	New York Stock Exchange

Indicate by check mark whether the registrant: (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 ☐

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”~~filer,” “smaller reporting company,” and “emerging growth company” in Rule

12b-2

of the Exchange Act.

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 ☒

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 November ~~2, 2021~~ 4, 2022
Common stock, par value $0.25 per share		~~538,139,465~~

606,270,618

Part I -– Financial Information

Item 1. Financial Statements

3

Hecla Mining Company and Subsidiaries

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

(Dollars and shares in thousands, except for

per-share

amounts)

Three Months Ended

Nine Months Ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Revised

Revised

Sales of products
$ 193,560 $ 199,703 $ 622,395 $ 502,983
Cost of sales and other direct production costs
112,542 103,025 318,917 280,303
Depreciation, depletion and amortization
45,790 37,990 138,918 112,492
Total cost of sales
158,332 141,015 457,835 392,795
Gross profit
35,228 58,688 164,560 110,188
Other operating expenses:

General and administrative
8,874 11,713 27,985 27,631
Exploration
13,675 3,407 27,993 7,899
Pre-development
3,433 759 7,046 1,857
Other operating expense
3,344 3,499 10,626 5,864
Provision for closed operations and environmental matters
7,564 1,254 12,297 2,807
Ramp-up and suspension costs
6,910 1,541 17,014 24,109
Foundation grant
0 0 0 1,970
Total other operating expense
43,800 22,173 102,961 72,137
(Loss) income from operations
(8,572 ) 36,515 61,599 38,051
Other income (expense):

Gain (loss) on derivative contracts
12,148 (6,666 ) (4,692 ) (12,775 )
Gain on exchange of investments
0 0 1,158 0
Unrealized (loss) gain on investments
(2,861 ) 3,979 (7,117 ) 9,410
Foreign exchange gain (loss)
3,995 (2,196 ) 24 1,235
Other income (expense)
247 (392 ) (192 ) (2,141 )
Interest expense
(10,469 ) (10,779 ) (31,484 ) (38,919 )
Total other income (expense)
3,060 (16,054 ) (42,303 ) (43,190 )
(Loss) income before income and mining taxes
(5,512 ) 20,461 19,296 (5,139 )
Income and mining tax benefit (provision)
4,533 (5,181 ) 3,924 (7,423 )
Net (loss) income
(979 ) 15,280 23,220 (12,562 )
Preferred stock dividends
(138 ) (138 ) (414 ) (414 )
(Loss) income applicable to common shareholders
$ (1,117 ) $ 15,142 $ 22,806 $ (12,976 )
Comprehensive (loss) income:

Net (loss) income
$ (979 ) $ 15,280 $ 23,220 $ (12,562 )
Change in fair value of derivative contracts designated as hedge transactions
(6,267 ) 6,150 (2,815 ) (2,801 )
Comprehensive (loss) income
$ (7,246 ) $ 21,430 $ 20,405 $ (15,363 )
Basic (loss) income per common share after preferred dividends (in cents)
(0.2 ) 2.9 4.3 (2.5 )
Diluted (loss) income per common share after preferred dividends (in cents)
(0.2 ) 2.8 4.2 (2.5 )
Weighted average number of common shares outstanding - basic
536,966 529,838 535,542 526,098
Weighted average number of common shares outstanding - diluted
536,966 535,788 541,769 526,098
Cash dividends declared per common share (in cents)
1.125 0.250 3.125 0.750


	Three Months Ended						Nine Months Ended
	September 30, 2022			September 30, 2021			September 30, 2022			September 30, 2021
Sales	$	146,339		$	193,560		$	524,080		$	622,395

Cost of sales and other direct production costs		104,900			112,542			326,579			318,917
Depreciation, depletion and amortization		32,992			45,790			106,362			138,918

Total cost of sales		137,892			158,332			432,941			457,835

Gross profit		8,447			35,228			91,139			164,560

Other operating expenses:
General and administrative		11,003			8,874			28,989			27,985
Exploration and pre-development		15,128			17,108			39,136			35,039
Care and maintenance costs		5,092			6,910			16,539			17,014
Provision for closed operations and environmental matters		1,781			7,564			4,154			12,297
Other operating expense		902			3,344			5,310			10,626

Total other operating expenses		33,906			43,800			94,128			102,961

(Loss) income from operations		(25,459	)		(8,572	)		(2,989	)		61,599

Other income (expense):
Interest expense		(10,874	)		(10,469	)		(31,785	)		(31,484	)
Fair value adjustments, net		(4,240	)		9,287			(14,703	)		(10,651	)
Net foreign exchange gain		5,667			3,995			8,111			24
Other income (expense)		1,853			247			4,828			(192	)

Total other (expense) income		(7,594	)		3,060			(33,549	)		(42,303	)

(Loss) income before income and mining taxes		(33,053	)		(5,512	)		(36,538	)		19,296
Income and mining tax benefit		9,527			4,533			3,642			3,924

Net (loss) income		(23,526	)		(979	)		(32,896	)		23,220
Preferred stock dividends		(138	)		(138	)		(414	)		(414	)

(Loss) income applicable to common stockholders	$	(23,664	)	$	(1,117	)	$	(33,310	)	$	22,806

Comprehensive income (loss):
Net (loss) income	$	(23,526	)	$	(979	)	$	(32,896	)	$	23,220
Change in fair value of derivative contracts designated as hedge transactions		(12,692	)		(6,267	)		19,491			(2,815	)

Comprehensive (loss) income	$	(36,218	)	$	(7,246	)	$	(13,405	)	$	20,405

Basic (loss) income per common share after preferred dividends	$	(0.04	)	$	—		$	(0.06	)	$	0.04

Diluted (loss) income per common share after preferred dividends	$	(0.04	)	$	—		$	(0.06	)	$	0.04

Weighted average number of common shares outstanding – basic		554,531			536,966			544,000			535,542

Weighted average number of common shares outstanding – diluted		554,531			536,966			544,000			541,769

Cash dividends declared per common share	$	0.00625		$	0.01		$	0.0125		$	0.02

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

34

Hecla Mining Company and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

Nine Months Ended

September 30, 2021

September 30, 2020

Revised

Operating activities:

Net income (loss)
$ 23,220 $ (12,562 )
Non-cash elements included in net income (loss):

Depreciation, depletion and amortization
139,800 120,076
Gain on exchange of investments
(1,158 ) 0
Unrealized loss (gain) on investments
7,117 (9,410 )
Write-down to stockpile inventory
6,524 0
Provision for reclamation and closure costs
7,821 4,638
Stock compensation
4,774 5,229
Deferred income taxes
(17,886 ) (4,578 )
Amortization of loan origination fees
1,406 3,066
(Gain) loss on derivative contracts
(13,937 ) 4,483
Foreign exchange loss (gain)
615 (2,810 )
Foundation grant
0 1,970
Other non-cash items, net (239 ) 559
Change in assets and liabilities, net of business acquisitions:

Accounts receivable
(3,798 ) (3,741 )
Inventories
22,372 (13,090 )
Other current and non-current assets
1,650 6,748
Accounts payable and accrued liabilities
(14,689 ) (1,762 )
Accrued payroll and related benefits
(1,829 ) 11,317
Accrued taxes
2,730 3,276
Accrued reclamation and closure costs and other non-current liabilities
2,489 2,483
Cash provided by operating activities
166,982 115,892
Investing activities:

Additions to properties, plants, equipment and mineral interests
(80,210 ) (54,382 )
Purchase of carbon credits
(200 ) 0
Proceeds from exchange of investments
1,811 0
Proceeds from disposition of properties, plants, equipment and mineral interests
562 305
Purchases of investments
0 (1,661 )
Net cash used in investing activities
(78,037 ) (55,738 )
Financing activities:

Acquisition of treasury shares
(4,525 ) (2,745 )
Dividends paid to common shareholders
(16,755 ) (3,951 )
Dividends paid to preferred shareholders
(414 ) (414 )
Credit facility and debt issuance fees
(108 ) (1,287 )
Borrowings on debt
0 707,107
Repayments of debt
0 (716,500 )
Repayments of finance leases
(5,598 ) (4,246 )
Net cash used in financing activities
(27,400 ) (22,036 )
Effect of exchange rates on cash
(471 ) (1,873 )
Net increase in cash, cash equivalents and restricted cash and cash equivalents
61,074 36,245
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period
130,883 63,477
Cash, cash equivalents and restricted cash and cash equivalents at end of period
$ 191,957 $ 99,722
Supplemental disclosure of cash flow information:

Cash paid for interest
$ 37,173 $ 33,828
Cash paid (received) for income and mining taxes
10,299 $ (2,608 )
Significant non-cash investing and financing activities:

Addition of finance lease obligations
$ 4,006 $ 5,747
Payment of accrued compensation in stock
$ 0 $ 5,095


	Nine Months Ended
	September 30, 2022			September 30, 2021
Operating activities:
Net (loss) income	$	(32,896	)	$	23,220
Non-cash elements included in net (loss) income:
Depreciation, depletion and amortization		106,743			139,800
Write-down of inventory		2,159			6,524
Fair value adjustments, net		3,486			(7,978	)
Provision for reclamation and closure costs		4,789			7,821
Stock compensation		4,298			4,774
Deferred income taxes		(17,828	)		(17,886	)
Foreign exchange (gain) loss		(8,353	)		615
Other non-cash items, net		2,454			1,167
Change in assets and liabilities:
Accounts receivable		34,788			(3,798	)
Inventories		(19,472	)		22,372
Other current and non-current assets		(3,420	)		1,650
Accounts payable, accrued and other current liabilities		(21,708	)		(14,689	)
Accrued payroll and related benefits		1,679			(1,829	)
Accrued taxes		(2,652	)		2,730
Accrued reclamation and closure costs and other non-current liabilities		(297	)		2,489

Cash provided by operating activities		53,770			166,982
Investing activities:
Additions to properties, plants, equipment and mineral interests		(93,237	)		(80,210	)
Change in restricted cash		2,011			—
Proceeds from sale of investments		9,375			1,811
Proceeds from disposition of properties, plants and equipment		748			562
Purchases of investments		(30,540	)		—
Acquisitions, net		8,952			—
Pre-acquisition advance to Alexco		(25,000	)		—
Purchase of carbon credits		—			(200	)

Net cash used in investing activities		(127,691	)		(78,037	)
Financing activities:
Proceeds from sale of common stock, net		4,542			—
Acquisition of treasury stock		(3,677	)		(4,525	)
Dividends paid to common and preferred stockholders		(10,549	)		(17,169	)
Credit facility fees paid		(517	)		(108	)
Draw on revolving credit facility		25,000			—
Repayments of finance leases		(5,222	)		(5,598	)

Net cash provided by (used in) financing activities		9,577			(27,400	)
Effect of exchange rates on cash		(804	)		(471	)
Net (decrease) increase in cash, cash equivalents and restricted cash		(65,148	)		61,074
Cash, cash equivalents and restricted cash at beginning of period		211,063			130,883

Cash, cash equivalents and restricted cash at end of period	$	145,915		$	191,957

Supplemental disclosure of cash flow information:
Cash paid for interest	$	37,179		$	37,173
Cash paid for income and mining taxes, net	$	13,061		$	10,299
Significant non-cash investing and financing activities:
Addition of finance lease obligations and right-of-use assets	$	9,692		$	4,006
Common stock issued to Alexco Resource Corp. shareholders	$	68,733		$	—
Common stock issued to settle acquired silver stream	$	135,000		$	—
Common stock issued to pension plans	$	5,570		$	22,250

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

45

Hecla Mining Company and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(In thousands, except shares)

September 30, 2021

December 31, 2020

Revised

ASSETS

Current assets:

Cash and cash equivalents
$ 190,904 $ 129,830
Accounts receivable:

Trade
32,821 27,864
Other, net
10,152 11,329
Inventories:

Concentrates, doré, and stockpiled ore
17,594 57,567
Materials and supplies
40,845 38,608
Derivative assets
5,220 3,470
Other current assets
12,744 15,644
Total current assets
310,280 284,312
Investments
8,030 15,148
Restricted cash
1,053 1,053
Properties, plants, equipment and mineral interests, net
2,331,018 2,378,074
Operating lease right-of-use assets
8,201 10,628
Deferred income taxes
5,576 2,912
Derivative assets
6,748 4,558
Other non-current assets and deferred charges
3,511 3,525
Total assets
$ 2,674,417 $ 2,700,210
LIABILITIES

Current liabilities:

Accounts payable and accrued liabilities
$ 62,571 $ 68,516
Accrued payroll and related benefits
26,493 31,807
Accrued taxes
8,557 5,774
Finance leases
5,637 6,491
Operating leases
2,385 3,008
Accrued reclamation and closure costs
11,036 5,582
Accrued interest
5,221 14,157
Derivatives liabilities
4,179 11,737
Other current liabilities
103 138
Total current liabilities
126,182 147,210
Finance leases
8,540 9,274
Operating leases
5,820 7,634
Accrued reclamation and closure costs
108,670 110,466
Long-term debt
507,712 507,242
Deferred tax liability
142,750 156,091
Pension liability
26,229 44,144
Derivatives liabilities
752 18
Other non-current liabilities
4,787 4,346
Total liabilities
931,442 986,425
Commitments and contingencies (Notes 5, 8, 9, and 11)

SHAREHOLDERS’ EQUITY

Preferred stock, 5,000,000 shares authorized:

Series B preferred stock, $0.25 par value, 157,816 shares issued and outstanding, liquidation preference — $7,891
39 39
Common stock, $0.25 par value, 750,000,000 authorized shares; issued September 30, 2021 — 545,371,827 shares and December 31, 2020 — 538,487,415 shares
136,350 134,629
Capital surplus
2,032,334 2,003,576
Accumulated deficit
(362,023 ) (368,074 )
Accumulated other comprehensive loss
(35,704 ) (32,889 )
Less treasury stock, at cost; September 30, 2021 — 7,395,295 and December 31, 2020 — 6,821,044 shares issued and held in treasury
(28,021 ) (23,496 )
Total shareholders’ equity
1,742,975 1,713,785
Total liabilities and shareholders’ equity
$ 2,674,417 $ 2,700,210


	September 30, 2022			December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	144,669		$	210,010
Accounts receivable:
Trade		12,477			36,437
Other, net		12,846			8,149
Inventories:
Concentrates, doré, and stockpiled ore		40,985			25,906
Materials and supplies		51,020			41,859
Derivatives assets		7,190			2,709
Other current assets		14,733			16,557

Total current assets		283,920			341,627
Investments		13,299			10,844
Restricted cash		1,246			1,053
Properties, plants, equipment and mineral interests, net		2,553,974			2,310,810
Operating lease right-of-use assets		11,632			12,435
Deferred income taxes		45,562			45,562
Derivatives assets		20,794			2,503
Other non-current assets		4,202			3,974

Total assets	$	2,934,629		$	2,728,808

LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities	$	87,850		$	68,100
Accrued payroll and related benefits		26,385			28,714
Accrued taxes		7,344			12,306
Finance and operating leases		12,489			8,098
Accrued interest		5,184			14,454
Derivatives liabilities		5,774			19,353
Other current liabilities		5,765			99
Accrued reclamation and closure costs		10,594			9,259

Total current liabilities		161,385			160,383
Finance and operating leases		20,242			17,726
Accrued reclamation and closure costs		105,717			103,972
Long-term debt		530,745			508,095
Deferred tax liability		154,225			149,706
Derivatives liabilities		5,560			18,528
Other non-current liabilities		1,987			9,611

Total liabilities		979,861			968,021

Commitments and contingencies ( Notes 4 , 7 , 8, and 10 )
STOCKHOLDERS’ EQUITY
Preferred stock, 5,000,000 shares authorized:
Series B preferred stock, 25 cent par value, 157,776 shares issued and outstanding, liquidation preference – $7,891		39			39
Common stock, 25 cent par value, 750,000,000 authorized shares; issued September 30, 2022 – 603,702,910 shares and December 31, 2021 – 545,534,760 shares		150,839			136,391
Capital surplus		2,241,649			2,034,485
Accumulated deficit		(397,096	)		(353,651	)
Accumulated other comprehensive income (loss)		(8,965	)		(28,456	)
Less treasury stock, at cost; September 30, 2022 – 8,132,553 shares and December 31, 2021 – 7,395,295 shares issued and held in treasury		(31,698	)		(28,021	)

Total stockholders’ equity		1,954,768			1,760,787

Total liabilities and stockholders’ equity	$	2,934,629		$	2,728,808

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

56

Hecla Mining Company and Subsidiaries

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

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

Three Months Ended September 30, 2021

Series B
Preferred
Stock

Common
Stock

Additional
Paid-In
Capital

Accumulated
Deficit

Accumulated
Other
Comprehensive
Loss, net

Treasury
Stock

Total

Balances, July 1, 2021 (Revised)
$ 39 $ 136,065 $ 2,024,645 $ (354,866 ) $ (29,437 ) $ (28,021 ) $ 1,748,425
Net loss
0 0 0 (979 ) 0 0 (979 )
Restricted stock units granted
0 0 1,472 0 0 0 1,472
Common stock dividends declared (1.125 cents per common share)
0 0 0 (6,040 ) 0 0 (6,040 )
Series B Preferred Stock dividends declared (87.5 cents per share)
0 0 0 (138 ) 0 0 (138 )
Common stock issued for 401(k) match (141,000 shares)
0 35 1,017 0 0 0 1,052
Common stock issued to pension plans (1,000,000 shares)
0 250 5,200 0 0 0 5,450
Other comprehensive income
0 0 0 0 (6,267 ) 0 (6,267 )
Balances, September 30, 2021
$ 39 $ 136,350 $ 2,032,334 $ (362,023 ) $ (35,704 ) $ (28,021 ) $ 1,742,975

Three Months Ended September 30, 2020

Series B
Preferred
Stock

Common
Stock

Additional
Paid-In
Capital

Accumulated
Deficit

Accumulated
Other
Comprehensive
Loss, net

Treasury
Stock

Total

Revised

Revised

Balances, July 1, 2020
$ 39 $ 133,699 $ 1,982,400 $ (380,205 ) $ (46,261 ) $ (23,496 ) $ 1,666,176
Net income
0 0 0 15,280 0 0 15,280
Restricted stock units granted
0 0 1,317 0 0 0 1,317
Common stock dividends declared (0.25 cents per common share)
0 0 0 (1,330 ) 0 0 (1,330 )
Series B Preferred Stock dividends declared (87.5 cents per share)
0 0 0 (138 ) 0 0 (138 )
Common stock issued for 401(k) match (439,000 shares)
0 110 1,303 0 0 0 1,413
Common stock issued to pension plans (2,058,000 shares)
0 514 11,917 0 0 0 12,431
Common stock issued to directors (391,000 shares)
0 98 1,385 0 0 0 1,483
Other comprehensive loss
0 0 0 0 6,150 0 6,150
Balances, September 30, 2020
$ 39 $ 134,421 $ 1,998,322 $ (366,393 ) $ (40,111 ) $ (23,496 ) $ 1,702,782

6


	Three Months Ended September 30, 2022
	Series B Preferred Stock		Common Stock		Capital Surplus		Accumulated Deficit			Accumulated Other Comprehensive Income (Loss), net			Treasury Stock			Total
Balances, July 1, 2022	$	39	$	137,241	$	2,043,621	$	(370,048	)	$	3,727		$	(31,698	)	$	1,782,882
Net loss		—		—		—		(23,526	)		—			—			(23,526	)
Common stock issued to Alexco Resource Corp. shareholders (17,992,875 shares)		—		4,498		64,235		—			—			—			68,733
Common stock issued to settle the acquired silver stream (34,800,990 shares)		—		8,700		126,300		—			—			—			135,000
Common stock issued for 401(k) match (422,860 shares)		—		106		1,472		—			—			—			1,578
Common stock issued under ATM program, net (1,176,861 shares)		—		294		4,248		—			—			—			4,542
Common stock dividends declared (0.0625 cents per common share)		—		—		—		(3,384	)		—			—			(3,384	)
Series B Preferred Stock dividends declared (87.5 cents per share)		—		—		—		(138	)		—			—			(138	)
Restricted stock units granted		—		—		1,773		—			—			—			1,773
Other comprehensive loss		—		—		—		—			(12,692	)		—			(12,692	)

Balances, September 30, 2022	$	39	$	150,839	$	2,241,649	$	(397,096	)	$	(8,965	)	$	(31,698	)	$	1,954,768


	Three Months Ended September 3 0 , 2021
	Series B Preferred Stock		Common Stock		Capital Surplus		Accumulated Deficit			Accumulated Other Comprehensive Income (Loss), net			Treasury Stock			Total
Balances, July 1, 2021	$	39	$	136,065	$	2,024,645	$	(354,866	)	$	(29,437	)	$	(28,021	)	$	1,748,425
Net loss		—		—		—		(979	)		—			—			(979	)
Restricted stock units granted		—		—		1,472		—			—			—			1,472
Common stock dividends declared (1.125 cents per common share)		—		—		—		(6,040	)		—			—			(6,040	)
Series B Preferred Stock dividends declared (87.5 cents per share)		—		—		—		(138	)		—			—			(138	)
Common stock issued for 401(k) match (141,000 shares)		—		35		1,017		—			—			—			1,052
Common stock issued to pension plans (1,000,000 shares)		—		250		5,200		—			—			—			5,450
Other comprehensive loss		—		—		—		—			(6,267	)		—			(6,267	)

Balances, September 30, 2021	$	39	$	136,350	$	2,032,334	$	(362,023	)	$	(35,704	)	$	(28,021	)	$	1,742,975

7

Table of Contents


	Nine Months Ended September 30, 2022
	Series B Preferred Stock		Common Stock		Capital Surplus			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss), net			Treasury Stock			Total
Balances, January 1, 2022	$	39	$	136,391	$	2,034,485		$	(353,651	)	$	(28,456	)	$	(28,021	)	$	1,760,787
Net loss		—		—		—			(32,896	)		—			—			(32,896	)
Restricted stock units granted		—		—		3,881			—			—			—			3,881
Restricted stock units and performance stock units distributed (1,789,042 shares)		—		447		(447	)		—			—			(3,677	)		(3,677	)
Common stock issued for 401(k) match (321,110 shares)		—		186		3,283			—			—			—			3,469
Common stock issued to directors (98,310 shares)		—		25		392			—			—			—			417
Common stock issued to pension plans (1,190,000 shares)		—		298		5,272			—			—			—			5,570
Common stock issued to Alexco Resource Corp. shareholders (17,992,875 shares)		—		4,498		64,235			—			—			—			68,733
Common stock issued to settle the acquired silver stream (34,800,990)		—		8,700		126,300			—			—			—			135,000
Common stock issued under ATM program, net (1,176,861 shares)		—— —		294		4,248			—			—			—			4,542
Common stock dividends declared (1.25 cents per common share)		—		—		—			(10,135	)		—			—			(10,135	)
Series B Preferred Stock dividends declared ($2.625 per share)		—		—		—			(414	)		—			—			(414	)
Other comprehensive income		—		—		—			—			19,491			—			19,491

Balances, September 30, 2022	$	39	$	150,839	$	2,241,649		$	(397,096	)	$	(8,965	)	$	(31,698	)	$	1,954,768


	Nine Months Ended September 30, 2021
	Series B Preferred Stock		Common Stock		Capital Surplus			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss), net			Treasury Stock			Total
Balances, January 1, 2021	$	39	$	134,629	$	2,003,576		$	(368,074	)	$	(32,889	)	$	(23,496	)	$	1,713,785
Net income		—		—		—			23,220			—			—			23,220
Restricted stock units granted		—		—		2,930			—			—			—			2,930
Restricted stock units distributed (1,653,000 shares)		—		413		(413	)		—			—			(4,525	)		(4,525	)
Common stock dividends declared (3.125 cents per common share)		—		—		—			(16,755	)		—			—			(16,755	)
Series B Preferred Stock dividends declared ($2.625 per share)		—		—		—			(414	)		—			—			(414	)
Common stock issued for 401(k) match (524,000 shares)		—		131		3,324			—			—			—			3,455
Common stock issued to pension plans (4,500,000 shares)		—		1,125		21,125			—			—			—			22,250
Common stock issued to directors (207,000 shares)		—		52		1,792			—			—			—			1,844
Other comprehensive loss		—		—		—			—			(2,815	)		—			(2,815	)

Balances, September 30, 2021	$	39	$	136,350	$	2,032,334		$	(362,023	)	$	(35,704	)	$	(28,021	)	$	1,742,975

Nine Months Ended September 30, 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 (Revised)
$ 39 $ 134,629 $ 2,003,576 $ (368,074 ) $ (32,889 ) $ (23,496 ) $ 1,713,785
Net income
0 0 0 23,220 0 0 23,220
Restricted stock units granted
0 0 2,930 0 0 0 2,930
Restricted stock units distributed (1,653,000 shares)
0 413 (413 ) 0 0 (4,525 ) (4,525 )
Common stock dividends declared (3.125 cents per common share)
0 0 0 (16,755 ) 0 0 (16,755 )
Series B Preferred Stock dividends declared ($2.625 per share)
0 0 0 (414 ) 0 0 (414 )
Common stock issued for 401(k) match (524,000 shares)
0 131 3,324 0 0 0 3,455
Common stock issued to pension plans (4,500,000 shares)
0 1,125 21,125 0 0 0 22,250
Common stock issued to directors (207,000 shares)
0 52 1,792 0 0 0 1,844
Other comprehensive loss
0 0 0 0 (2,815 ) 0 (2,815 )
Balances, September 30, 2021
$ 39 $ 136,350 $ 2,032,334 $ (362,023 ) $ (35,704 ) $ (28,021 ) $ 1,742,975

Nine Months Ended September 30, 2020

Series B
Preferred
Stock

Common
Stock

Additional
Paid-In
Capital

Accumulated
Deficit

Accumulated
Other
Comprehensive
Loss, net

Treasury
Stock

Total

Revised

Revised

Balances, January 1, 2020
$ 39 $ 132,292 $ 1,973,700 $ (349,220 ) $ (37,310 ) $ (22,967 ) $ 1,696,534
Net loss
0 0 0 (12,562 ) 0 0 (12,562 )
Restricted stock units granted
0 0 3,746 0 0 0 3,746
Restricted stock units distributed (1,702,000 shares)
0 426 (426 ) 0 0 (1,479 ) (1,479 )
Common stock dividends declared (0.75 cents per common share)
0 0 0 (3,951 ) 0 0 (3,951 )
Series B Preferred Stock dividends declared ($2.625 per share)
0 0 0 (414 ) 0 0 (414 )
Common stock issued for 401(k) match (1,396,000 shares)
0 350 3,295 0 0 0 3,645
Common stock issued for employee incentive compensation (2,800,000 shares)
0 700 4,396 0 0 (1,266 ) 3,830
Common stock issued to pension plans (2,225,000 shares)
0 555 12,226 0 0 0 12,781
Common stock issued to directors (391,000 shares)
0 98 1,385 0 0 0 1,483
Treasury shares issued to charitable foundation (650,000 shares)
0 0 0 (246 ) 0 2,216 1,970
Other comprehensive loss
0 0 0 0 (2,801 ) 0 (2,801 )
Balances, September 30, 2020
$ 39 $ 134,421 $ 1,998,322 $ (366,393 ) $ (40,111 ) $ (23,496 ) $ 1,702,782

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

78

Table of Contents

Note 1.

Basis of Preparation of Financial Statements

~~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,” “the Company,” “we,” “our,” or “us,” except where the context requires otherwise) have been prepared in accordance with the instructions to Form10-Q

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 consolidated financial statements and notes contained in our annual report on Form10-K

10-K

for the year ended December 31,~~2020~~ (~~“2020~~ 2021 (“2021 Form10~~-K”~~

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~~-three- and ~~nine~~~~-month~~nine-month periods ended September 30,~~2021~~ 2022 are not necessarily indicative of the results that may be expected for the year ending December 31,~~2021.~~

2022.

On September 7, 2022, the Company completed the acquisition of the remaining 90.1%

of Alexco Resource Corp. (“Alexco”) for non-cash consideration of

17,992,875

shares of Company common stock valued at $

68.7

million.

Total consideration for the acquisition, deemed to be an asset acquisition under GAAP, was

$

81.5

million of which $76.4 million was non cash including the fair value of the Company’s common stock issued and the fair value of the

9.9

%

Alexco investment held by the Company prior to the completion of the acquisition and previously accounted for as marketable equity securities of $7.7 million. Acquisition costs also included transaction costs of $5.1 million. The total consideration was allocated to the acquired assets and assumed liabilities based on their estimated fair values on the acquisition date, which primarily consisted of mineral interests of

$

236.6
million, a related deferred tax liability of
$
12.9
million, net liabilities of $7.2 million, and a silver stream liability
of
$
135
million. Immediately following the closure of the acquisition, we settled the silver stream liability with the stream holder for
34,800,990
shares of Company common stock.

The 2019 novel strain of coronavirus

(“~~COVID-~~~~19”~~COVID-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~~2020. We continue 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 2020~~ ~~caused us 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. At Greens Creek, we incurred costs of approximately $1.0 million in the~~ ~~first~~~~nine~~ ~~months of~~ ~~2021~~ ~~and $2.3 million for the full year of~~ ~~2020~~ ~~related to quarantining employees from late~~ ~~March 2020~~ ~~through the~~ ~~second~~ ~~quarter of~~ ~~2021.~~ ~~In addition, silver production at Greens Creek in the~~ ~~third~~ ~~quarter of~~ ~~2021~~ ~~was 30% lower than in the~~ ~~third~~ ~~quarter of~~ ~~2020~~ ~~due to reduced ore grades as a result of mine sequencing, which was impacted by manpower challenges due to COVID-~~19 ~~and increased competition for labor which we expect to mitigate through schedule changes and other means. At Casa Berardi, we incurred costs of approximately $1.9 million in the~~ ~~first~~~~nine~~ ~~months of~~ ~~2021~~ ~~related to COVID-~~19 ~~procedures. At the Lucky Friday, San Sebastian and Nevada Operations units, COVID-~~19 procedures have been implemented without a significant impact on operating or suspension costs or production. It is possible that future restrictions at any of our operations could have an adverse impact on operations or financial results beyond the ~~first~~~~nine~~ ~~months of~~ ~~2021.~~

~~We have taken~~take precautionary measures to mitigate the impact of ~~COVID-~~~~19,~~

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 $3.1 million in

COVID-19

mitigation costs during the nine months ended September 30, 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

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.~~

~~In the~~ ~~third~~ ~~quarter of~~ ~~2021,~~ ~~we identified errors impacting amounts reported for accumulated depreciation, depletion and amortization ("DDA") and DDA expense for our Casa Berardi unit from~~ ~~June 1, 2013~~ ~~through~~ ~~June 30, 2021.~~ ~~Certain amounts in the condensed consolidated financial statements and notes thereto for the prior period have been revised to correct these errors. See~~ ~~Note~~ 2 ~~for more information on the errors and revisions made to amounts reported for the prior periods.~~

8uncertain.

~~Table of Contents~~

~~Note~~ 2. ~~Revision of Previously Issued Financial Statements for Immaterial Misstatements~~

~~Casa Berardi DDA~~

In

During the ~~third~~ ~~quarter of~~ ~~2021,~~ ~~we determined accumulated DDA and DDA expense at Casa Berardi, a business unit within our Hecla Quebec Inc. subsidiary, were overstated~~three months ended September 30, 2022, the Company recorded an out-of-period adjustment to correct an immaterial error related to the period ended June 30, 2022. This adjustment increased income taxes related to other comprehensive loss

by $12,649 for the ~~periods from~~ ~~June 1, 2013~~ ~~through~~ ~~June~~three months ended September 30, ~~2021~~ ~~as a result~~2022 to correct the previously recorded tax effect of ~~errors in calculation from the date of acquisition of Casa Berardi. DDA was overstated by approximately $38.2 million~~changes in the ~~aggregate over~~ 8 ~~years~~fair value of derivative contracts designated as ~~a result of errors in the calculation of straight-line depreciation on machinery, equipment and buildings.~~

We assessed the materiality of the effect of the errors on our prior quarterly and annual financial statements, both quantitatively and qualitatively, in accordance with the SEC’s Staff Accounting Bulletin ("SAB") ~~No.~~~~99,~~ ~~“Materiality,” and SAB~~ ~~No.~~~~108,~~ ~~“Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” and concluded the errors were~~ ~~not~~ material to any of our previously issued financial statements. Consequently, we will correct these errors prospectively and revise our financial statements when the consolidated balance sheets, statements of operations and comprehensive income and cash flows for such prior periods are included in future filings (the "Revisions"). The Revisionshedge transactions. This adjustment is non-cash, had no ~~net~~ impact on ~~our sales or~~ net ~~cash provided by operating activities for any period presented. The impact of these misstatements on prior periods is more fully disclosed below.~~

~~Reclassification of State Mining Income Taxes~~

~~As disclosed during the~~ ~~first~~ ~~quarter of~~ ~~2021,~~ ~~we reclassified certain state mining income taxes from~~ ~~Cost of sales~~loss applicable to common shareholders and increased accumulated other ~~direct production costs~~ to ~~Income and mining tax provision~~ ~~prospectively effective~~ ~~January 1, 2021.~~ ~~In connection with the revision of our historical financial statements~~comprehensive loss for the correction of the depreciation adjustment described above, we are also revising our previously issued financial statements for this reclassification that required us to recognize previously unrecognized deferred taxes.

~~The following tables present a summary of the impact, by financial statement line item, of the Revisions for the~~ three months ended ~~March 31, 2021~~ ~~and~~ ~~2020,~~~~June 30, 2021~~ ~~and~~ ~~2020~~ ~~and~~ September 30, ~~2020,~~ ~~the~~ ~~six~~ ~~months ended~~ ~~June 30,~~ ~~2021and~~~~2020,~~ ~~the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2020,~~ ~~as of and for the years ended~~ ~~December 31, 2020~~ ~~and~~ ~~2019,~~ ~~and for the year ended~~ ~~December 31, 2018:~~

Three Months Ended March 31, 2021

(in thousands, except per share amounts)

As Previously
Reported

Adjustment

As Revised

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

Depreciation, depletion and amortization
$ 49,331 $ (2,589 ) $ 46,742
Total cost of sales
146,040 (2,589 ) 143,451
Gross profit
64,812 2,589 67,401
Income from operations
38,449 2,589 41,038
Income before income and mining taxes
23,605 2,589 26,194
Income and mining tax provision
(4,634 ) (109 ) (4,743 )
Net income
18,971 2,480 21,451
Income applicable to common shareholders
18,833 2,480 21,313
Comprehensive income
20,803 2,480 23,283
Basic income per common share after preferred dividends (in cents)
3.5 0.5 4.0
Diluted income per common share after preferred dividends (in cents)
3.5 0.5 4.0
—
Condensed Consolidated Statements of Cash Flows (Unaudited)

Net income
18,971 2,480 21,451
Depreciation, depletion and amortization
49,546 (2,589 ) 46,957
Deferred income taxes
32 109 141
Cash provided by operating activities
37,936 0 37,936

92022 by $12,649.

Note 2.

Business Segments and Sales of Products

Three Months Ended June 30, 2021

(in thousands, except per share amounts)

As Previously
Reported

Adjustment

As Revised

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

Depreciation, depletion and amortization
$ 48,403 $ (2,671 ) $ 45,732
Total cost of sales
158,723 (2,671 ) 156,052
Gross profit
59,260 2,671 61,931
Income from operations
26,462 2,671 29,133
Loss before income and mining taxes
(4,057 ) 2,671 (1,386 )
Income and mining tax benefit
4,842 (708 ) 4,134
Net income
785 1,963 2,748
Income applicable to common shareholders
647 1,963 2,610
Comprehensive income
2,405 1,963 4,368
Basic income per common share after preferred dividends (in cents)
0.1 0.4 0.5
Diluted income per common share after preferred dividends (in cents)
0.1 0.4 0.5

Six Months Ended June 30, 2021

(in thousands, except per share amounts)

As Previously
Reported

Adjustment

As Revised

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

Depreciation, depletion and amortization
$ 97,734 $ (5,260 ) $ 92,474
Total cost of sales
304,763 (5,260 ) 299,503
Gross profit
124,072 5,260 129,332
Income from operations
64,911 5,260 70,171
Income before income and mining taxes
19,548 5,260 24,808
Income and mining tax benefit (provision)
208 (817 ) (609 )
Net income
19,756 4,443 24,199
Income applicable to common shareholders
19,480 4,443 23,923
Comprehensive income
23,208 4,443 27,651
Basic income per common share after preferred dividends (in cents)
3.6 0.7 4.3
Diluted income per common share after preferred dividends (in cents)
3.6 0.7 4.3
—
Condensed Consolidated Statements of Cash Flows (Unaudited)

Net income
19,756 4,443 24,199
Depreciation, depletion and amortization
98,121 (5,260 ) 92,861
Deferred income taxes
(8,562 ) 817 (7,745 )
Cash provided by operating activities
124,240 0 124,240

10

Three Months Ended March 31, 2020

(in thousands, except per share amounts)

As Previously
Reported

Adjustment

As Revised

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

Cost of sales and other direct production costs
$ 85,887 $ (167 ) $ 85,720
Depreciation, depletion and amortization
39,666 (1,851 ) 37,815
Total cost of sales
125,553 (2,018 ) 123,535
Gross profit
11,372 2,018 13,390
Loss from operations
(15,064 ) 2,018 (13,046 )
Loss before income and mining taxes
(18,247 ) 2,018 (16,229 )
Income and mining tax benefit
1,062 (657 ) 405
Net loss
(17,185 ) 1,361 (15,824 )
Loss applicable to common shareholders
(17,323 ) 1,361 (15,962 )
Comprehensive loss
(36,520 ) 1,361 (35,159 )
Basic loss per common share after preferred dividends (in cents)
(3.3 ) 0.3 (3.0 )
Diluted loss per common share after preferred dividends (in cents)
(3.3 ) 0.3 (3.0 )
—
Condensed Consolidated Statements of Cash Flows (Unaudited)

Net loss
(17,185 ) 1,361 (15,824 )
Depreciation, depletion and amortization
41,630 (1,851 ) 39,779
Deferred income taxes
(3,252 ) 490 (2,762 )
Cash provided by operating activities
4,927 0 4,927

Three Months Ended June 30, 2020

(in thousands, except per share amounts)

As Previously Reported

Adjustment

As Revised

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

Cost of sales and other direct production costs
$ 92,853 $ (1,295 ) $ 91,558
Depreciation, depletion and amortization
39,423 (2,736 ) 36,687
Total cost of sales
132,276 (4,031 ) 128,245
Gross profit
34,079 4,031 38,110
Income from operations
9,874 4,031 13,905
Loss before income and mining taxes
(13,402 ) 4,031 (9,371 )
Income and mining tax provision
(626 ) (2,020 ) (2,646 )
Net loss
(14,028 ) 2,011 (12,017 )
Income applicable to common shareholders
(14,166 ) 2,011 (12,155 )
Comprehensive loss
(3,644 ) 2,011 (1,633 )
Basic loss per common share after preferred dividends (in cents)
(2.7 ) 0.4 (2.3 )
Diluted loss per common share after preferred dividends (in cents)
(2.7 ) 0.4 (2.3 )

11

Six Months Ended June 30, 2020

(in thousands, except per share amounts)

As Previously Reported

Adjustment

As Revised

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

Cost of sales and other direct production costs
$ 178,740 $ (1,462 ) $ 177,278
Depreciation, depletion and amortization
79,089 (4,587 ) 74,502
Total cost of sales
257,829 (6,049 ) 251,780
Gross profit
45,451 6,049 51,500
(Loss) income from operations
(4,513 ) 6,049 1,536
Loss before income and mining taxes
(31,649 ) 6,049 (25,600 )
Income and mining tax benefit (provision)
436 (2,678 ) (2,242 )
Net loss
(31,213 ) 3,371 (27,842 )
Loss applicable to common shareholders
(31,489 ) 3,371 (28,118 )
Comprehensive loss
(40,164 ) 3,371 (36,793 )
Basic loss per common share after preferred dividends (in cents)
(6.0 ) 0.6 (5.4 )
Diluted loss per common share after preferred dividends (in cents)
(6.0 ) 0.6 (5.4 )

Condensed Consolidated Statements of Cash Flows (Unaudited)

Net loss
(31,213 ) 3,371 (27,842 )
Depreciation, depletion and amortization
84,185 (4,587 ) 79,598
Deferred income taxes
(5,165 ) 1,216 (3,949 )
Cash provided by operating activities
42,453 0 42,453

Three Months Ended September 30, 2020

(in thousands, except per share amounts)

As Previously Reported

Adjustment

As Revised

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

Cost of sales and other direct production costs
$ 105,977 $ (2,952 ) $ 103,025
Depreciation, depletion and amortization
40,238 (2,248 ) 37,990
Total cost of sales
146,215 (5,200 ) 141,015
Gross profit
53,488 5,200 58,688
Income from operations
31,315 5,200 36,515
Income before income and mining taxes
15,261 5,200 20,461
Income and mining tax provision
(1,633 ) (3,548 ) (5,181 )
Net income
13,628 1,652 15,280
Income applicable to common shareholders
13,490 1,652 15,142
Comprehensive income
19,778 1,652 21,430
Basic income per common share after preferred dividends (in cents)
2.6 0.3 2.9
Diluted income per common share after preferred dividends (in cents)
2.6 0.2 2.8

12

Nine Months Ended September 30, 2020

(in thousands, except per share amounts)

As Previously Reported

Adjustment

As Revised

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

Cost of sales and other direct production costs
$ 284,717 $ (4,414 ) $ 280,303
Depreciation, depletion and amortization
119,327 (6,835 ) 112,492
Total cost of sales
404,044 (11,249 ) 392,795
Gross profit
98,939 11,249 110,188
Income from operations
26,802 11,249 38,051
Loss before income and mining taxes
(16,388 ) 11,249 (5,139 )
Income and mining tax benefit (provision)
(1,197 ) (6,226 ) (7,423 )
Net loss
(17,585 ) 5,023 (12,562 )
Loss applicable to common shareholders
(17,999 ) 5,023 (12,976 )
Comprehensive income
(20,386 ) 5,023 (15,363 )
Basic loss per common share after preferred dividends (in cents)
(3.4 ) 0.9 (2.5 )
Diluted loss per common share after preferred dividends (in cents)
(3.4 ) 0.9 (2.5 )

Condensed Consolidated Statements of Cash Flows (Unaudited)

Net loss
(17,585 ) 5,023 (12,562 )
Depreciation, depletion and amortization
126,911 (6,835 ) 120,076
Deferred income taxes
(6,390 ) 1,812 (4,578 )
Cash provided by operating activities
115,892 0 115,892

For the Year Ended December 31, 2018

(in thousands, except per share amounts)

As Previously
Reported

Adjustment

As Revised

Consolidated Statements of Operations and Comprehensive Loss

Cost of sales and other direct production costs
$ 353,994 $ (1,844 ) $ 352,150
Depreciation, depletion and amortization
134,044 (2,224 ) 131,820
Total cost of sales
488,038 (4,068 ) 483,970
Gross profit
79,099 (4,068 ) 75,031
Loss from operations
(39,126 ) 4,068 (35,058 )
Loss before income and mining taxes
(33,264 ) 4,068 (29,196 )
Income and mining tax benefit
6,701 (4,256 ) 2,445
Net loss
(26,563 ) (188 ) (26,751 )
Loss applicable to common shareholders
(27,115 ) (188 ) (27,303 )
Comprehensive loss
(44,370 ) (188 ) (44,558 )
Basic loss per common share after preferred dividends (in cents)
(6.3 ) — (6.3 )
Diluted loss per common share after preferred dividends (in cents)
(6.3 ) — (6.3 )

Consolidated Statements of Cash Flows

Net loss
(26,563 ) (188 ) (26,751 )
Depreciation, depletion and amortization
140,905 (2,224 ) 138,681
Deferred income taxes
6,278 2,412 8,690
Cash provided by operating activities
94,221 0 94,221

13

As of and for the Year Ended December 31, 2019

(in thousands, except per share amounts)

As Previously
Reported

Adjustment

As Revised

Consolidated Balance Sheet

Inventories: Concentrates, doré, and stockpiled ore
$ 30,364 $ (286 ) $ 30,078
Total current assets
179,124 (286 ) 178,838
Properties, plants, equipment and mineral interests, net
2,423,698 23,752 2,447,450
Total assets
2,637,308 23,466 2,660,774
Deferred tax liability
138,282 19,355 157,637
Total liabilities
944,885 19,355 964,240
Accumulated deficit
(353,331 ) 4,111 (349,220 )
Total shareholders' equity
1,692,423 4,111 1,696,534
Total liabilities and shareholders' equity
2,637,308 23,466 2,660,774
Consolidated Statements of Operations and Comprehensive Loss

Cost of sales and other direct production costs
$ 450,349 $ (2,364 ) $ 447,985
Depreciation, depletion and amortization
199,518 (8,067 ) 191,451
Total cost of sales
649,867 (10,431 ) 639,436
Gross profit
23,399 10,431 33,830
Loss from operations
(57,109 ) 10,431 (46,678 )
Loss before income and mining taxes
(123,658 ) 10,431 (113,227 )
Income and mining tax benefit
24,101 (5,783 ) 18,318
Net loss
(99,557 ) 4,648 (94,909 )
Loss applicable to common shareholders
(100,109 ) 4,648 (95,461 )
Comprehensive loss
(94,398 ) 4,648 (89,750 )
Basic loss per common share after preferred dividends (in cents)
(20.4 ) 0.9 (19.5 )
Diluted loss per common share after preferred dividends (in cents)
(20.4 ) 0.9 (19.5 )

Consolidated Statements of Cash Flows

Net loss
(99,557 ) 4,648 (94,909 )
Depreciation, depletion and amortization
204,475 (8,067 ) 196,408
Deferred income taxes
5,668 3,419 9,087
Cash provided by operating activities
120,866 0 120,866

14

As of and for the Year Ended December 31, 2020

(in thousands, except per share amounts)

As Previously
Reported

Adjustment

As Revised

Consolidated Balance Sheet

Inventories: Concentrates, doré, and stockpiled ore
$ 57,936 $ (369 ) $ 57,567
Total current assets
284,681 (369 ) 284,312
Properties, plants, equipment and mineral interests, net
2,345,219 32,855 2,378,074
Total assets
2,667,724 32,486 2,700,210
Accrued taxes
8,349 (2,575 ) 5,774
Total current liabilities
149,785 (2,575 ) 147,210
Deferred tax liability
132,475 23,616 156,091
Total liabilities
965,384 21,041 986,425
Accumulated deficit
(379,519 ) 11,445 (368,074 )
Total shareholders' equity
1,702,340 11,445 1,713,785
Total liabilities and shareholders' equity
2,667,724 32,486 2,700,210

Consolidated Statements of Operations and Comprehensive Loss

Cost of sales and other direct production costs
389,040 (6,377 ) 382,663
Depreciation, depletion and amortization
157,130 (9,020 ) 148,110
Total cost of sales
546,170 (15,397 ) 530,773
Gross profit
145,703 15,397 161,100
Income from operations
51,581 15,397 66,978
Loss before income and mining taxes
(16,655 ) 15,397 (1,258 )
Income and mining tax provision
(135 ) (8,064 ) (8,199 )
Net loss
(16,790 ) 7,333 (9,457 )
Loss applicable to common shareholders
(17,342 ) 7,333 (10,009 )
Comprehensive loss
(12,369 ) 7,333 (5,036 )
Basic loss per common share after preferred dividends (in cents)
(3.3 ) 1.4 (1.9 )
Diluted loss per common share after preferred dividends (in cents)
(3.3 ) 1.4 (1.9 )

Consolidated Statements of Cash Flows

Net loss
(16,790 ) 7,333 (9,457 )
Depreciation, depletion and amortization
164,026 (9,020 ) 155,006
Deferred income taxes
(5,505 ) 1,687 (3,818 )
Cash provided by operating activities
180,793 0 180,793

15

~~Note~~ 3.~~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 which contain~~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 ~~5 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.

General corporate activities not associated with operating ~~units~~mines and their various exploration activities, as well as discontinued operations, exploration and development projects 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.

The following tables present information about our reportable segments for the three and nine months ended September 30,~~2021~~ 2022 and ~~2020~~2021 (in thousands):

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Net sales to unaffiliated customers:

Greens Creek
$ 84,806 $ 93,494 $ 296,978 $ 232,218
Lucky Friday
29,783 20,812 98,550 35,097
Casa Berardi
56,065 53,554 185,098 149,731
San Sebastian
0 9,138 176 23,998
Nevada Operations
22,906 22,705 41,593 61,939
$ 193,560 $ 199,703 $ 622,395 $ 502,983
Income (loss) from operations:
Revised Revised
Greens Creek
$ 26,572 $ 44,477 $ 127,605 $ 76,762
Lucky Friday
6,187 950 24,247 (12,388 )
Casa Berardi
(6,233 ) 1,419 4,944 5,330
San Sebastian
(1,727 ) 1,946 (4,951 ) 1,766
Nevada Operations
(12,077 ) 5,486 (35,558 ) 6,830
Other
(21,294 ) (17,763 ) (54,688 ) (40,249 )
$ (8,572 ) $ 36,515 $ 61,599 $ 38,051

9

Table of Contents


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Net sales to unaffiliated customers:
Greens Creek	$	60,875		$	84,806		$	239,688		$	296,978
Lucky Friday		28,460			29,783			102,380			98,550
Casa Berardi		56,939			56,065			181,679			185,098
Nevada Operations		—			22,906			268			41,593
Other		65			—			65			176

	$	146,339		$	193,560		$	524,080		$	622,395

Income (loss) from operations:
Greens Creek	$	1,378		$	26,572		$	63,768		$	127,605
Lucky Friday		4,269			6,187			18,568			24,247
Casa Berardi		(5,226	)		(6,233	)		(8,497	)		4,944
Nevada Operations		(8,917	)		(12,077	)		(30,879	)		(35,558	)
Other		(16,963	)		(23,021	)		(45,949	)		(59,639	)

	$	(25,459	)	$	(8,572	)	$	(2,989	)	$	61,599

The following table presents identifiable assets by reportable segment as of September 30,~~2021~~ 2022 and December 31,~~2020~~ 2021 (in thousands):

September 30, 2021

December 31, 2020

Identifiable assets:
Revised
Greens Creek
$ 607,207 $ 610,360
Lucky Friday
512,742 520,463
Casa Berardi
705,328 727,008
San Sebastian
38,186 42,617
Nevada Operations
477,621 513,309
Other
333,333 286,453
$ 2,674,417 $ 2,700,210

16


	September 30, 2022		December 31, 2021
Identifiable assets:
Greens Creek	$	594,811	$	589,944
Lucky Friday		534,114		516,545
Casa Berardi		692,833		701,868
Nevada Operations		467,532		468,985
Other		645,339		451,466

	$	2,934,629	$	2,728,808

Following the acquisition of Alexco (see

~~Table~~Note 1

), our sales for the three and nine month periods ended September 30, 2022 are comprised of ~~Contents~~

~~Sales~~metal sales as described below and $65,000 of ~~products~~environmental services revenue.

Sales by metal for the ~~three~~-three- and ~~nine~~~~-month~~nine-month periods ended September 30,~~2021~~ 2022 and ~~2020~~2021 were as follows (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Silver
$ 61,890 $ 79,684 $ 232,414 $ 179,013
Gold
94,984 98,457 282,471 278,363
Lead
18,082 13,370 56,198 32,244
Zinc
30,273 26,779 89,501 65,540
Less: Smelter and refining charges
(11,669 ) (18,587 ) (38,189 ) (52,177 )
Sales of products
$ 193,560 $ 199,703 $ 622,395 $ 502,983


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Silver	$	45,924		$	61,890		$	182,306		$	232,414
Gold		69,289			94,984			228,475			282,471
Lead		16,033			18,082			56,912			56,198
Zinc		28,051			30,273			94,865			89,501
Less: Smelter and refining charges		(13,023	)		(11,669	)		(38,543	)		(38,189	)

	$	146,274		$	193,560		$	524,015		$	622,395

Sales ~~of products for the~~ ~~three~~~~- and~~ ~~nine~~~~-month periods ended~~ ~~September~~ ~~30,~~~~2021~~ included net gains of ~~$5.0~~$1.6 million and ~~$4.5~~$8.1 million for the

three-and

nine-month periods ended September 30, 2022, respectively, on financially-settled forward contracts for silver, gold, lead and zinc contained in our sales. Sales included net gains of ~~products~~$5.0 million and $4.5 million for the~~three- and~~ ~~nine~~~~-month~~

three-and

nine-month periods ended September 30,~~2020~~ ~~included net losses of $9.6 million and $12.9 million,~~ 2021, respectively, on such contracts. See

Note 98

for more information.

~~Note~~ 4.~~Income and Mining Taxes~~

10

Table of Contents

In ~~January 2021,~~ May 2022 and October 2022, we contributed ~~$16.8~~$5.6 million and $4.2

million, respectively, in shares of our common stock to two of our ~~supplemental executive retirement plan,~~defined benefit plans. In January 2021 and ~~expect to contribute approximately $0.8 million in cash during~~ ~~2021.~~ In September 2021, we contributed ~~$5.5~~

$16.8

million and $5.4 million, respectively, in shares of our common stock to three of our defined benefit ~~pension~~ plans. We do not expect to be required to make additional contributions to our defined benefit pension plans in ~~2021,~~2022, but may ~~choose~~elect to do so.

~~Note~~ 6.~~(Loss) Income Per Common Share~~

Note 5.

(Loss) Income Per Common Share

We calculate basic (loss) income per common share on the basis of the weighted average number of shares of common stock outstanding during the period. Diluted ~~(loss)~~ 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, deferred restricted stock units, warrants and convertible preferred stock for periods in which we have reported net income. For periods in which we report net losses, potential dilutive shares of common stock are excluded, as their conversion and exercise would be anti-dilutive.

18

~~Table of Contents~~

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

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Revised Revised
Numerator

Net (loss) income
$ (979 ) $ 15,280 $ 23,220 $ (12,562 )
Preferred stock dividends
(138 ) (138 ) (414 ) (414 )
Net (loss) income applicable to common shares
$ (1,117 ) $ 15,142 $ 22,806 $ (12,976 )

Denominator

Basic weighted average common shares
536,966 529,838 535,542 526,098
Dilutive restricted stock units, warrants and deferred shares
0 5,950 6,227 0
Diluted weighted average common shares
536,966 535,788 541,769 526,098

Basic (loss) income per common share (in cents)
(0.2 ) 2.9 4.3 (2.5 )
Diluted (loss) income per common share (in cents)
(0.2 ) 2.8 4.2 (2.5 )

~~Diluted (loss) income per share for the~~ ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~September~~ ~~30,~~~~2021~~ ~~and~~ ~~2020~~ ~~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.~~

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.~~

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 September 30,~~2021~~ 2022 and December 31,~~2020:~~

September 30, 2021

Ounces/pounds under contract (in 000’s)

Average price per ounce/pound

Silver

Gold

Zinc

Lead

Silver

Gold

Zinc

Lead

(ounces)

(ounces)

(pounds)

(pounds)

(ounces)

(ounces)

(pounds)

(pounds)

Contracts on provisional sales

2021 settlements
1,190 4 20,867 9,866 $ 23.15 $ 1,776 $ 1.35 $ 1.01
Contracts on forecasted sales

2021 settlements
— — 7,771 6,779 N/A N/A $ 1.26 $ 0.94
2022 settlements
— — 60,043 63,769 N/A N/A $ 1.28 $ 0.98
2023 settlements
— — 76,280 70,327 N/A N/A $ 1.29 $ 1.00
2024 settlements
— — 43,762 — N/A N/A $ 1.31 N/A

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

~~As of~~ ~~September~~ ~~30,~~ 2021:

September 30, 2022

Ounces/pounds under contract (in 000’s)

Average price per ounce/pound


Silver

Gold

Zinc

Lead

Silver

Gold

Zinc

Lead


(ounces)

(ounces)

(pounds)

(pounds)

(ounces)

(ounces)

(pounds)

(pounds)

Contracts on provisional sales

2022 settlements
   2,235    1,840    18,739    14,991    $ 19.54    $ 1,760    $ 1.30    $ 0.96
Contracts on forecasted sales

2022 settlements
   2,235    1,840    8,763    1,984    N/A    N/A    $ 1.32    $ 0.97
2023 settlements
   —      —      71,209    75,618    N/A    N/A    $ 1.30    $ 1.00
2024 settlements
   —      —      78,760    31,526    N/A    N/A    $ 1.34    $ 1.00
2025 settlements
   —      —      2,480    —      N/A    N/A    $ 1.33    N/A
December 31, 2021

Ounces/pounds under contract (in 000’s)

Average price per ounce/pound


Silver

Gold

Zinc

Lead

Silver

Gold

Zinc

Lead


(ounces)

(ounces)

(pounds)

(pounds)

(ounces)

(ounces)

(pounds)

(pounds)

Contracts on provisional sales

2022 settlements
   1,814    6    13,371    4,575    $ 23.02    $ 1,812    $ 1.39    $ 0.96
Contracts on forecasted sales

2022 settlements
   —      —      57,706    59,194    N/A    N/A    $ 1.28    $ 0.98
2023 settlements
   —      —      76,280    71,650    N/A    N/A    $ 1.29    $ 1.00

Effective November 1, 2021, ~~these forward~~ we designated the contracts ~~are~~ ~~not~~ ~~designated~~for lead and zinc contained in our forecasted future shipments as hedges for accounting purposes, with gains and ~~are adjusted~~losses deferred to ~~fair value~~ accumulated other comprehensive loss until the hedged product ships. Prior to November 1, 2021, these contracts had not been designated as hedges for hedge accounting and were therefore

marked-to-market

through earnings each period. ~~Effective~~The forward contracts for silver and gold contained in ~~the~~ ~~fourth~~ ~~quarter of~~ ~~2021,~~ ~~we anticipate designating~~our concentrate shipments have not been designated as hedges ~~forwards contracts utilized to manage exposure to prices for forecasted future zinc~~ and lead sales. As a result, unrealized gains and losses related to the effective portion of the hedges for the designated contracts will be included in accumulated other comprehensive loss, and then transferred from accumulated other comprehensive loss to currentare

marked-to-market

through earnings ~~as the underlying sales are recognized.~~

each period.

23

~~Table of Contents~~

We recorded the following balances for the fair value of the forward contracts as of September 30,~~2021~~ 2022 and forward and put option contracts as of December 31,~~2020~~ 2021 (in millions):

September 30, 2021

December 31, 2020

Balance sheet line item:

Contracts in an
asset position

Contracts in
a liability
position

Net asset
(liability)
��
Contracts in
an asset
position

Contracts in a
liability
position

Net asset
(liability)

Current derivatives assets
$ 3.1 $ (0.4 ) $ 2.7 $ 0.2 $ (0.2 ) $ 0
Non-current derivatives assets
7.1 (2.5 ) 4.6 0.5 (0.1 ) 0.4
Current derivatives liabilities
0.3 (4.4 ) (4.1 ) 0.1 (11.8 ) (11.7 )
Non-current derivatives liabilities
1.2 (1.8 ) (0.6 ) 0 0 0


Description	Balance at September 30, 2022		Balance at December 31, 2021		Input Hierarchy Level
Assets:
Cash and cash equivalents:
Money market funds and other bank deposits	$	144,669	$	210,010		Level 1
Current and non-current investments
Equity securities		13,299		14,470		Level 1
Trade accounts receivable:
Receivables from provisional concentrate sales		12,477		36,437		Level 2
Restricted cash balances:
Certificates of deposit and other deposits		1,246		1,053		Level 1
Derivative contracts – current and non-current derivatives assets:
Foreign exchange contracts		591		5,207		Level 2
Metal forward and put option contracts		27,393		—		Level 2

Total assets	$	199,675	$	267,177

Liabilities:
Derivative contracts – current derivatives liabilities and other non-current liabilities:
Foreign exchange contracts	$	11,334	$	8		Level 2
Metal forward and put option contracts		—		37,873		Level 2

Total liabilities	$	11,334	$	37,881

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

Current and

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.

Our

non-current

available for sale securities consist of marketable equity securities of companies in the mining industry which are valued using quoted market prices for each security.

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

We use financially-settled forward contracts to manage exposure to changes in the exchange rate between USD and CAD, and the impact on

CAD-denominated

operating and capital costs incurred at our Casa Berardi unit and the Keno Hill mine (see

Note 98

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 (see

Note 98

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.~~

25

~~Table of Contents~~

At September 30,~~2021,~~ 2022, our Senior Notes ~~which had a~~and IQ Notes were recorded at their carrying value of ~~$469.2~~$470.1 million and $35.6 million, respectively, net of unamortized initial purchaser ~~discount~~discount/premium and issuance ~~costs, had a~~costs. The estimated fair ~~value~~values of ~~$513.2 million.~~our Senior Notes and IQ Notes were $442.2 million and $32.7 million, respectively, at September 30, 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 8.7%, are utilized to estimate the fair value of the IQ Notes. See

Note 87

for more information.

~~Note~~ ~~11.~~~~Commitments, Contingencies and Obligations~~

18

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.

Greens Creek and Lucky Friday Environmental Issues

On June 30, 2022, our Greens Creek mine received a Notice of Violation (“NOV”) from the EPA alleging that the mine treated, stored, and disposed of certain hazardous waste without a permit in violation of the Resource Conservation and Recovery Act (“RCRA”), relating to the alleged presence of lead outside the concentrate storage building and the alleged improper reuse/recycling of certain materials produced from the
on-site
laboratories. The NOV contained two other less significant alleged violations. We disagree with several of the EPA’s allegations on a factual and legal basis.

Currently, the EPA has not initiated any formal enforcement proceeding against our Greens Creek subsidiary. In civil judicial cases, EPA can seek statutory penalties up to $81,540 per day per violation and, in administrative settlements, the EPA can seek administrative penalties of up to $47,423 per day per violation plus the economic benefit of noncompliance. The EPA typically pursues administrative penalties and assesses lower penalties on a per day basis. At this time, we cannot reasonably assess the amount of penalties the EPA may seek, or predict the terms of any potential settlement with the EPA.

On July 12, 2022, our Lucky Friday mine received a NOV from the EPA alleging violations of the Clean Water Act (“CWA”) between 2018 and 2021 relating primarily to concentration levels of zinc and lead in the mine’s permitted water discharges. Currently, the EPA has not initiated any formal enforcement proceeding against our Lucky Friday subsidiary. In civil judicial cases, the EPA can seek statutory penalties up to $59,973 per day per violation and, in administrative actions, EPA can seek administrative penalties up to $23,989 per day per violation with a maximum administrative penalty of $299,989 for all alleged violations. The EPA typically pursues administrative penalties. At this time, we cannot reasonably assess the amount of penalties the EPA may seek, or predict the terms of any potential settlement with the EPA.

Litigation Related to Klondex Acquisition

On May 24, 2019, a purported Hecla stockholder filed a putative class action lawsuit in the U.S. District Court for the Southern District of New York against Hecla and certain of our executive officers, one of whom is also a director. The complaint, purportedly brought on behalf of all purchasers of Hecla common stock from March 19, 2018 through and including May 8, 2019, asserts claims under Sections 10~~(b)~~10(b) and 20~~(a)~~20(a) of the Securities Exchange Act of 1934 and Rule~~10b~~-5

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 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.

20

In October 2021, the FASB issued ASU

2021-08,

Business Combinations (Topic 805): Accounting for Contract Assets and Contract

Liabilities from Contracts with Customers

, which requires entities to recognize and measure contract assets and contract liabilities acquired in

a 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 SOFR. Our New Credit Agreement references SOFR-based rates, compared to our prior credit facility which referenced LIBOR based- rates. Certain of our derivative instruments reference LIBOR-based rates and are in the process of being amended to eliminate the LIBOR-based rate references prior to January 1, 2023. 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.

22

Forward-Looking Statements

Certain statements contained in this Form10~~-Q,~~

10-Q,

including in Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative 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,~~“may,” ~~“will,~~“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.

28

~~Table of Contents~~

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~~2021 Form

10-K,

as updated in

Part II, Item 1.A. – Risk Factors

in our Quarterly Report on Form10-K

10-Q

for the ~~year~~quarter ended ~~December~~ ~~31,~~~~2020~~ (~~"2020~~ ~~Form~~ 10~~-K").~~June 30, 2022. 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.

Item 2.~~Management~~’s Management’s Discussion and Analysis of Financial Condition and Results of Operations

regarding our acquisition of Alexco. Immediately following the acquisition of Alexco, we terminated the acquired silver stream on the Keno Hill property for $135 million, through the issuance of 34,800,990 Hecla common shares to Wheaton Precious Metals, the silver stream holder.

Third Quarter 2022 Highlights

Operational:

Produced 3.6 million ounces of silver and 44,747 ounces of gold. See

Consolidated Results of Operations

below for information on total cost of sales and cash costs and all in sustaining costs (“AISC”), after

by-product

credits, per silver and gold ounce for the three-month periods ended September 30, 2022 and 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 $146.3 million.

Made capital expenditures (excluding lease additions and other

non-cash

items) of approximately $37.4 million, including $7.0 million at Greens Creek, $16.1 million at Lucky Friday, $10.8 million at Casa Berardi.

Returned $3.5 million to our stockholders through payment of dividends.

Spent $15.1 million on exploration and

pre-development

activities.

Year to date 2022 Highlights

Operational:

Produced 10.5 million ounces of silver and 132,108 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 nine-month periods ended September 30, 2022 and 2021.

Continued our trend of strong safety performance, as our All Injury Frequency Rate (“AIFR”) for the year to date was 1.3, 38% below the U.S. national average for MSHA’s “metal and nonmetal” category and 10% below 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 $524.1 million.

Generated $53.8 million in net cash provided by operating activities. 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 $93.2 million, including $24.7 million at Greens Creek, $37.3 million at Lucky Friday, $26.7 million at Casa Berardi, $3.8 million at Corporate and Other.

Returned $10.5 million to our stockholders through payment of dividends.

Spent $39.1 million on exploration and

pre-development

activities.

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;~~

•

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

•

~~expanding our proven and probable reserves and production capacity at our units;~~

•

~~conducting our business with financial stewardship to preserve our financial position in varying metals price and operational environments;~~

•

~~anticipate net zero scope 1 and scope 2 emissions in 2021 with the purchase of carbon credits in the third quarter of 2021;~~

•

~~advancing permitting of one or both of our Montana projects;~~

•

~~maintaining and investing in exploration and pre-development~~

executing value enhancing transactions, such as with the recently consummated Alexco acquisition;

advancing the development of the Keno Hill mine with the anticipation of commencement of production before the end of 2023;

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 and cost-effective manner;

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

24

Table of Contents

Juneau; North Idaho’s Silver Valley in the historic Coeur ~~d'Alene~~d’Alene Mining District; ~~our Greens Creek unit on Alaska’s Admiralty Island located near Juneau;~~ 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 ~~northern~~ Nevada; our projects in northwestern Montana; the ~~Kinskuch property in British Columbia, Canada; the Republic district in northeastern Washington; and the~~ Creede district of southwestern Colorado; the Kinskuch project in British Columbia, Canada; and

the Republic mining district in Washington state;

30improving operations at each of our mines, which includes incurring costs for new technologies and equipment;

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

conducting our business with financial stewardship to preserve our financial position in varying metals price and operational environments;

advancing permitting of ~~Contents~~our Montana assets; and

•

~~continuing to seek opportunities to acquire or invest in mining properties and companies.~~

~~The COVID-19 outbreak impacted~~

continuing to seek opportunities to acquire and 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 ~~operations~~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

.

Since its outbreak 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, including in the third quarter.~~exploration drilling at Greens Creek. We incurred ~~additional~~$0.4 million and $3.1 million in

COVID-19

mitigation costs ~~of approximately $1.0 million in~~during the ~~first~~ nine months ofended September 30, 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 and was discontinued in the second quarter of 2021. In addition, silver production at Greens Creek in the third quarter of 2021 was 30% lower than in the third quarter of 2020 due to reduced ore grades as a result of mine sequencing, which was impacted by manpower challenges due to COVID-19 and increased competition for labor which we expect to mitigate through schedule changes and other means. 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.~~practices and increasing our cash 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. ~~We anticipate continuing to incur COVID mitigation costs at Casa Berardi and experience potential manpower challenges at Greens Creek in the fourth quarter of 2021, and there~~There is uncertainty related to the potential additional impacts

COVID-19

and any subsequent variants could have on our operations and financial results for ~~that period.~~the rest of 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~~

operations.

A number of key factors may impact the execution of our strategy, including regulatory issues, metals prices and ~~metals prices.~~inflationary pressures on input costs. 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). including recent central bank actions to raise interest rates which have negatively impacted precious metals prices. 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~~for all metals sold by us were ~~higher~~lower in the ~~first~~three months ended September 30, 2022, than in the comparable period last year. The average realized prices for all metals sold by us were lower, except for zinc and gold, in the nine months ~~of 2021~~ended September 30, 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.

We have also experienced significant cost inflation compared to 2021 across our operations, principally associated with higher energy prices, increased costs for other consumables such as reagents, explosives and steel, and labor and contractor costs.

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) ~~the~~ zinc and lead ~~content~~ that we forecast infor 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~~$150 million revolving credit agreement, of which ~~$21.0~~we had drawn $25.0 million as of September 30, 2022, and an additional $7.8 million was used as of September 30, ~~2021~~2022 for letters of credit, leaving approximately ~~$229.0~~$117.2 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 respond to issues outlined in MSHA's investigations and inspections 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 MSHA regulations will be challenging and may increase our operating costs. See ~~Item 1A. Risk Factors - We face substantial governmental regulation, including the Mine Safety and Health Act, various environmental laws and regulations and the 1872 Mining Law~~ ~~in our 2020 Form 10-K~~.

Another challenge for us is the risk associated with environmental litigation and ongoing reclamation activities. As described in

Item 1A. Risk Factors

in our ~~2020~~2021 Form

10-K

and above in

Note 1110

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

25

Table of Contents

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. ~~For example, the Rock Creek project received an adverse court decision in April 2021 which could impact our strategic plan to permit, develop or operate that project, at least with respect to timing.~~ We strive ~~for~~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.

3126

Table of Contents

Consolidated Results of Operations

Sales ~~of products~~ by metal for the three- and nine-month periods ended September 30, ~~2021~~2022 and ~~2020~~2021 were as follows:

Three Months Ended
September 30,

Nine Months Ended
September 30,

(in thousands)

2021

2020

2021

2020

Silver
$ 61,890 $ 79,684 $ 232,414 $ 179,013
Gold
94,984 98,457 282,471 278,363
Lead
18,082 13,370 56,198 32,244
Zinc
30,273 26,779 89,501 65,540
Less: Smelter and refining charges
(11,669 ) (18,587 ) (38,189 ) (52,177 )
Sales of products
$ 193,560 $ 199,703 $ 622,395 $ 502,983


	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2022			2021			2022			2021
Silver	$	45,924		$	61,890		$	182,306		$	232,414
Gold		69,289			94,984			228,475			282,471
Lead		16,033			18,082			56,912			56,198
Zinc		28,051			30,273			94,865			89,501
Less: smelter charges		(13,023	)		(11,669	)		(38,543	)		(38,189	)

Sales of products	$	146,274		$	193,560		$	524,015		$	622,395

Sales by metal for the three- and nine-month periods ended September 30, 2022 and 2021, and the approximate variances attributed to differences in metals prices, sales volumes and smelter terms, were as follows:


(in thousands)	Silver			Gold			Base metals			Less: smelter and refining charges			Total sales of products
Three months ended September 30, 2021	$	61,890		$	94,984		$	48,355		$	(11,669	)	$	193,560
Variances - 2022 versus 2021:
Price		(13,459	)		(3,125	)		(3,637	)		(1,475	)		(21,696	)
Volume		(2,134	)		(22,570	)		(634	)		162			(25,176	)
Smelter terms		(373	)		—			—			(41	)		(414	)

Three months ended September 30, 2022	$	45,924		$	69,289		$	44,084		$	(13,023	)	$	146,274


(in thousands)	Silver			Gold			Base metals			Less: smelter and refining charges			Total sales of products
Nine months ended September 30, 2021	$	232,414		$	282,471		$	145,699		$	(38,189	)	$	622,395
Variances - 2022 versus 2021:
Price		(37,682	)		2,557			7,748			(3,381	)		(30,758	)
Volume		(12,335	)		(56,468	)		(1,670	)		1,567			(68,906	)
Smelter terms		(91	)		(85	)		—			1,460			1,284

Nine months ended September 30, 2022	$	182,306		$	228,475		$	151,777		$	(38,543	)	$	524,015

The fluctuations in sales infor the third quarter and first nine months of ~~2021~~2022 compared to the same periods of ~~2020 are~~2021 were primarily due to the following two reasons:

•

Lower average realized silver and gold prices, and higher average realized lead and zinc prices, in the third quarter of 2021 compared to the same period in 2020. Average realized silver, gold, lead and zinc prices were higher in the first nine months of 2021 compared to the same period in 2020. These price variances are illustrated in the table below.

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Silver –
London PM Fix ($/ounce)
$ 24.36 $ 24.40 $ 25.78 $ 19.22

Realized price per ounce
$ 23.97 $ 25.32 $ 25.75 $ 19.72
Gold –
London PM Fix ($/ounce)
$ 1,789 $ 1,911 $ 1,801 $ 1,735

Realized price per ounce
$ 1,792 $ 1,929 $ 1,794 $ 1,745
Lead –
LME Final Cash Buyer ($/pound)
$ 1.06 $ 0.85 $ 0.98 $ 0.81

Realized price per pound
$ 1.02 $ 0.86 $ 1.00 $ 0.81
Zinc –
LME Final Cash Buyer ($/pound)
$ 1.36 $ 1.06 $ 1.31 $ 0.97

Realized price per pound
$ 1.35 $ 1.04 $ 1.34 $ 0.94

Lower average realized prices for all metals sold during the third quarter and first nine months of 2022, except for gold and zinc for which the average realized price was higher during the nine months ended September 30, 2022 all compared to the same periods of 2021. These price variances are illustrated in the following table:

27

Table of Contents


		Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021
Silver –	London PM Fix ($/ounce)	$	19.22	$	24.36	$	21.94	$	25.78
	Realized price per ounce	$	18.30	$	23.97	$	21.25	$	25.75
Gold –	London PM Fix ($/ounce)	$	1,728	$	1,789	$	1,825	$	1,801
	Realized price per ounce	$	1,713	$	1,792	$	1,817	$	1,794
Lead –	LME Final Cash Buyer ($/pound)	$	0.90	$	1.06	$	0.98	$	0.98
	Realized price per pound	$	0.95	$	1.02	$	0.98	$	1.00
Zinc –	LME Final Cash Buyer ($/pound)	$	1.48	$	1.36	$	1.65	$	1.31
	Realized price per pound	$	1.23	$	1.35	$	1.47	$	1.34

Average realized prices typically differ from average market prices primarily because concentrate sales are generally recorded as revenues at the time of shipment at forward prices for the estimated month of settlement, which differ from average market prices. Due to the time elapsed between shipment of concentrates and final settlement with the customers, we must estimate the prices at which sales of our metals will be settled. Previously recorded sales are adjusted to estimated settlement metals prices each period through final settlement. For the ~~third quarter~~three- and ~~first nine months~~nine-month periods ended September 30, 2022, we recorded net negative price adjustments to provisional settlements of ~~2021, we recorded~~$6.6 million and $21.5 million, respectively, compared to net positive price adjustments to provisional settlements of $0.1 million and $3.7 million, respectively, ~~compared to a net negative price adjustment to provisional settlements of $4.3 million and net positive price adjustment of $5.3 million, respectively,~~ in the ~~comparable 2020 periods.~~three and nine months ended September 31, 2021. The price adjustments related to silver, gold, ~~lead~~zinc and ~~zinc~~lead contained in our concentrate shipments were partially offset by gains and losses on forward contracts for those metals. See

Note 9 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, doré and carbon material shipped during the period.

32Lower quantities of all metals sold in the third quarter and first nine months of 2022 compared to 2021 (except for lead in the nine months and zinc in the three months ended September 30, 2022, respectively, due to higher production at Lucky Friday during the first nine months of 2022), primarily due to the decision to defer a silver concentrate shipment at Greens Creek to October 2022 to ensure adequate concentrate volumes for cost-effective shipping, and the

non-recurrence

of Nevada refractory ore processing at a third-party facility in 2021. See

The Greens Creek Segment,

The Lucky Friday Segment, The Casa Berardi Segment

and

~~Table~~

The Nevada Operations Segment

sections below for more information on metal production and sales volumes at each of ~~Contents~~our operating segments. Total metals production and sales volumes for each period are shown in the following table:

•

Lower quantities of silver and zinc sold, partially offset by higher gold and lead volume, in the third quarter of 2021 compared to the third quarter of 2020. For the first nine months of 2021, sales volumes for all payable metals except lead were lower compared to the same period of 2020. 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 metal 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
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Silver -
Ounces produced
2,676,084 3,541,371 9,660,313 10,190,621

Payable ounces sold
2,581,690 3,147,048 9,027,180 9,077,966
Gold -
Ounces produced
42,207 41,174 153,350 159,948

Payable ounces sold
53,000 51,049 157,454 159,550
Lead -
Tons produced
9,904 9,750 32,148 24,620

Payable tons sold
8,835 7,792 28,166 19,948
Zinc -
Tons produced
15,546 17,997 48,864 48,699

Payable tons sold
11,174 12,892 33,344 34,717


		Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021
Silver -	Ounces produced		3,549,392		2,676,084		10,525,917		9,660,313
	Payable ounces sold		2,479,724		2,581,690		8,554,894		9,027,180
Gold -	Ounces produced		44,747		42,207		132,173		153,350
	Payable ounces sold		40,443		53,000		125,721		157,454
Lead -	Tons produced		11,600		9,904		35,794		32,148
	Payable tons sold		8,049		8,835		28,788		28,166
Zinc -	Tons produced		15,859		15,546		47,571		48,864
	Payable tons sold		11,523		11,174		32,328		33,344

The difference between what we report as “ounces/tons produced” and “payable ounces/tons sold” is attributable to the difference between the quantities of metals contained in the concentrates we produce versus the portion of those metals actually paid for by our customers according to the terms of our sales contracts. Differences can also arise from inventory changes incidental to shipping schedules, or variances in ore grades which impact the amount of metals contained in concentrates produced and sold.

28

Table of Contents

Sales, total cost of sales, gross profit, Cash Cost, After

By-product

Credits, per Ounce (“Cash Cost”)

(non-GAAP)

and

All-In

Sustaining Cost, After

By-product

Credits, per Ounce (“AISC”)

(non-GAAP)

at our operating units for the ~~three~~three- and nine ~~months~~-months ended September 30, ~~2021~~2022 and ~~2020~~2021 were as follows (in thousands, except for Cash Cost and AISC):

Silver

Gold

Greens
Creek

Lucky
Friday

San
Sebastian

Total
Silver ⁽²⁾

Casa
Berardi

Nevada
Operations

Total
Gold

Three Months Ended September 30, 2021:

Sales
$ 84,806 $ 29,783 $ — $ 114,589 $ 56,065 $ 22,906 $ 78,971
Total cost of sales
(55,193 ) (23,591 ) — (78,784 ) (58,164 ) (21,384 ) (79,548 )
Gross profit
$ 29,613 $ 6,192 $ — $ 35,805 $ (2,099 ) $ 1,522 $ (577 )
Cash Cost per silver or gold ounce ⁽¹⁾
$ 0.74 $ 6.35 $ — $ 2.49 $ 1,175 $ 1,038 $ 1,163
AISC per silver or gold ounce ⁽¹⁾
$ 5.94 $ 16.79 $ — $ 12.82 $ 1,476 $ 1,167 $ 1,450
Three Months Ended September 30, 2020:

Sales
$ 93,494 $ 20,812 $ 9,138 $ 123,444 $ 53,554 $ 22,705 $ 76,259
Total cost of sales ⁽³⁾
(48,105 ) (21,500 ) (5,960 ) (75,565 ) (51,573 ) (13,877 ) (65,450 )
Gross profit (loss)
$ 45,389 $ (688 ) $ 3,178 $ 47,879 $ 1,981 $ 8,828 $ 10,809
Cash Cost per silver or gold ounce ⁽¹⁾
$ 3.00 $ — $ 7.53 $ 3.41 $ 1,398 $ — $ 1,398
AISC per silver or gold ounce ⁽¹⁾
$ 6.58 $ — $ 8.87 $ 10.52 $ 1,855 $ — $ 1,855


	Silver											Gold
	Greens Creek			Lucky Friday			Other		Total Silver (2)			Casa Berardi			Nevada Operations			Total Gold
Three Months Ended September 30, 2022:
Sales	$	60,875		$	28,460		$	—	$	89,335		$	56,939		$	—		$	56,939
Total cost of sales		(52,502	)		(24,164	)		—		(76,666	)		(59,532	)		(1,623	)		(61,155	)

Gross profit (loss)	$	8,373		$	4,296		$	—	$	12,669		$	(2,593	)	$	(1,623	)	$	(4,216	)

Cash Cost per silver or gold ounce (1)	$	2.65		$	5.23		$	—	$	3.43		$	1,349		$	—		$	1,349
AISC per silver or gold ounce (1)	$	8.61		$	15.98		$	—	$	14.20		$	1,738		$	—		$	1,738
Three Months Ended September 30, 2021:
Sales	$	84,806		$	29,783		$	—	$	114,589		$	56,065		$	22,906		$	78,971
Total cost of sales		(55,193	)		(23,591	)				(78,784	)		(58,164	)		(21,384	)		(79,548	)

Gross profit (loss)	$	29,613		$	6,192		$	—	$	35,805		$	(2,099	)	$	1,522		$	(577	)

Cash Cost per silver or gold ounce (1)	$	0.74		$	6.35		$	—	$	2.49		$	1,175		$	1,038		$	1,163
AISC per silver or gold ounce (1)	$	5.94		$	16.79		$	—	$	12.82		$	1,476		$	1,167		$	1,450

33


	Silver												Gold
	Greens Creek			Lucky Friday			Other			Total Silver (2)			Casa Berardi			Nevada Operations			Total Gold
Nine Months Ended September 30, 2022:
Sales	$	239,688		$	102,380		$	—		$	342,068		$	181,679		$	268		$	181,947
Total cost of sales		(162,644	)		(83,779	)		—			(246,423	)		(183,570	)		(2,878	)		(186,448	)

Gross profit	$	77,044		$	18,601		$	—		$	95,645		$	(1,891	)	$	(2,610	)	$	(4,501	)

Cash Cost per silver or gold ounce (1)	$	(0.49	)	$	4.77		$	—		$	1.11		$	1,409		$	—		$	1,409
AISC per silver or gold ounce (1)	$	4.69		$	12.86		$	—		$	10.17		$	1,729		$	—		$	1,729
Nine Months Ended September 30, 2021:
Sales	$	296,978		$	98,550		$	176		$	395,704		$	185,098		$	41,593		$	226,691
Total cost of sales		(163,861	)		(74,287	)		(95	)		(238,243	)		(172,760	)		(46,832	)		(219,592	)

Gross profit	$	133,117		$	24,263		$	81		$	157,461		$	12,338		$	(5,239	)	$	7,099

Cash Cost per silver or gold ounce (1)	$	(1.03	)	$	7.37		$	—		$	1.26		$	1,127		$	1,124		$	1,127
AISC per silver or gold ounce (1)	$	2.40		$	15.00		$	—		$	8.88		$	1,387		$	1,167		$	1,349

~~Table of Contents~~

Silver

Gold

Greens
Creek

Lucky
Friday

San
Sebastian

Total
Silver⁽²⁾

Casa
Berardi

Nevada
Operations

Total
Gold

Nine Months Ended September 30, 2021:

Sales
$ 296,978 $ 98,550 $ 176 $ 395,704 $ 185,098 $ 41,593 $ 226,691
Total cost of sales
(163,861 ) (74,287 ) (95 ) (238,243 ) (172,760 ) (46,832 ) (219,592 )
Gross profit (loss)
$ 133,117 $ 24,263 $ 81 $ 157,461 $ 12,338 $ (5,239 ) $ 7,099
Cash Cost per silver or gold ounce ⁽¹⁾
$ (1.03 ) $ 7.37 $ — $ 1.26 $ 1,127 $ 1,124 $ 1,127
AISC per silver or gold ounce ⁽¹⁾
$ 2.40 $ 15.00 $ — $ 8.88 $ 1,387 $ 1,167 $ 1,349
Nine Months Ended September 30, 2020:

Sales
$ 232,218 $ 35,097 $ 23,998 $ 291,313 $ 149,731 $ 61,939 $ 211,670
Total cost of sales ⁽³⁾
(153,496 ) (35,787 ) (18,271 ) (207,554 ) (140,893 ) (44,348 ) (185,241 )
Gross profit (loss)
$ 78,722 $ (690 ) $ 5,727 $ 83,759 $ 8,838 $ 17,591 $ 26,429
Cash Cost per silver or gold ounce ⁽¹⁾
$ 4.45 $ — $ 5.93 $ 4.58 $ 1,181 $ 716 $ 1,053
AISC per silver or gold ounce ⁽¹⁾
$ 7.03 $ — $ 6.76 $ 10.09 $ 1,493 $ 787 $ 1,299

(1)

~~(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)

.

(2)

~~(2)~~

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.

~~(3)~~

~~See~~ ~~Note 2~~ of ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~ ~~for information on revisions to amounts previously reported for total cost of sales.~~

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 as a primary silver producer, 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 and Lucky Friday deposits are massive sulfide deposits containing an unusually high proportion of silver; and in most of their working areas, Greens Creek and Lucky Friday utilize selective mining methods in which silver is the metal targeted for highest recovery.

silver has historically accounted for a higher proportion of revenue than any other metal and is expected to do so in the future;

29

Table of Contents

we have historically presented these units as a primary silver producer, 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 and Lucky Friday deposits are massive sulfide deposits containing an unusually high proportion of silver; and

in most of their working areas, Greens Creek and Lucky Friday utilize selective mining methods in which silver is the metal targeted for highest recovery.

Accordingly, we believe the identification of ~~zinc,~~gold, lead and ~~gold~~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, 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.

34

~~Table of Contents~~

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 ~~or 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.

We

For the third quarter we recorded a loss applicable to common ~~shareholders~~stockholders of ~~$1.1~~$23.7 million ~~(0.2 cents~~(($0.04) per basic common share) compared to $1.1 million ($Nil) per basic common share) in the third quarter of 2021. The variances in gross profit (loss) at our operating units as illustrated in the table above contributed to the results for the third quarter of 2022 compared to the same period in 2021. See

The Greens Creek Segment,

The Lucky Friday Segment, The Casa Berardi Segment

and

The Nevada Operations Segment

sections below.

In addition to the impact of lower gross profit on loss applicable to common stockholders, the following were the other significant drivers of changes in loss applicable to common stockholders compared to the prior period in 2021:

General and administrative costs increased by $2.1 million primarily due to the impact of the Alexco acquisition closed on September 7, 2022 and compensation adjustments effective July 1, 2022.

Fair value adjustments, net were losses of $4.2 million versus a gain of $9.3 million in 2021 primarily due to the accounting for our base metals contracts as accounting hedges effective November 1, 2021, which resulted in unrealized gains/losses on these contracts being deferred on the balance sheet, versus them being recognized in the statement of operations in the 2021 comparable quarter (see

Notes 8 and 9

of

Notes to Condensed Consolidated Financial Statements (Unaudited)

for more information).

Exploration and

pre-development

decreased by $2.0 million primarily due to lower expenditures at the Hatter Graben project in Nevada.

Provision for closed operations and environmental matters decreased by $5.8 million primarily due to the settlement in 2021 of a lawsuit for $6.5 million related to a 1989 agreement entered into by our subsidiary, CoCa Mines, Inc. and its subsidiary, Creede Resources, Inc.

Other operating expense decreased by $2.4 million primarily due to the receipt of $2.5 million in insurance proceeds related to a coverage lawsuit received during September 2022 and the completion of projects to identify and implement potential operational improvements at our operating sites.

Net foreign exchange gains increased by $1.7 million reflecting the continued depreciation of the CAD against the USD in 2022. The change is primarily related to the impact of changes in the

CAD-to-USD

exchange rate on the remeasurement of our net monetary liabilities in Quebec.

For the first nine months of 2022, we recorded loss applicable to common stockholders of $33.3 million (($0.06) per basic common share) compared to income applicable to common ~~shareholders~~stockholders of $22.8 million ~~(4.3 cents~~($0.04 per basic common share) in the first nine months of 2021. The variances in gross profit (loss) at our operating units as illustrated in the table above contributed to the results for the first nine months of ~~2021~~2022 compared to ~~income~~the same period in 2021. See

The Greens Creek Segment,

The Lucky Friday Segment, The Casa Berardi Segment

and

The Nevada Operations Segment

sections below.

30

Table of Contents

In addition to the impact of lower gross profit on loss applicable to common ~~shareholders~~stockholders, the following were the other significant drivers of ~~$15.1~~changes in loss applicable to common stockholders compared to the prior period in 2021:

Exploration and

pre-development

expense increased by $4.1 million ~~(2.9 cents per basic common share)~~reflecting increased exploration spending across the Company’s exploration portfolio primarily at San Sebastian, Casa Berardi, Greens Creek and the Nevada Operations.

Pre-development

expense was for the ~~third quarter~~development of ~~2020 and~~ a decline to the Hatter Graben area at the Hollister mine in Nevada.

Fair value adjustments, net losses increased by $4.1 million due to unrealized losses on our equity securities portfolio increasing by $7.6 million offset by a lower loss of ~~$13.0~~$4.7 million ~~(2.5 cents per basic common share)~~on our derivative contracts primarily due to the accounting for our base metals contracts as accounting hedges effective November 1, 2021, which resulted in unrealized gains/losses on these contracts being deferred on the balance sheet, versus them being recognized in the income statement in 2021 the comparable quarter (see

Notes 8 and 9

of

Notes to Condensed Consolidated Financial Statements (Unaudited)

for more information).

Net foreign exchange gains increased by $8.1 million reflecting the continued depreciation of the CAD against the USD in 2022. The change is primarily related to the impact of changes in the

CAD-to-USD

exchange rate on the remeasurement of our net monetary liabilities in Quebec.

Provision for closed operations and environmental matters decreased by $8.1 million primarily due to the settlement in 2021 of a lawsuit for $6.5 million related to a 1989 agreement entered into by our subsidiary, CoCa Mines, Inc. and its subsidiary, Creede Resources, Inc and an increase in the estimated costs accrual for the ~~first nine months~~Johnny M. site in New Mexico of ~~2020.~~ $2.9 million in 2021(see

Note 10

of

Notes to Condensed Consolidated Financial Statements (Unaudited)

for more information).

Other operating expense decreased by $5.3 million primarily due to the receipt of $4.2 million in insurance proceeds related to a coverage lawsuit received during June and September 2022 and the completion of projects to identify and implement potential operation improvements at our operating sites.

31

Table of Contents

Greens Creek


Dollars are in thousands (except per ounce and per ton amounts)	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Sales	$	60,875		$	84,806		$	239,688		$	296,978

Cost of sales and other direct production costs		(42,197	)		(42,096	)		(127,290	)		(121,451	)
Depreciation, depletion and amortization		(10,305	)		(13,097	)		(35,354	)		(42,410	)

Total cost of sales		(52,502	)		(55,193	)		(162,644	)		(163,861	)

Gross profit	$	8,373		$	29,613		$	77,044		$	133,117

Tons of ore milled		229,975			211,142			651,220			620,153
Production:
Silver (ounces)		2,468,280			1,837,270			7,308,660			6,980,587
Gold (ounces)		11,412			9,734			35,227			35,859
Zinc (tons)		12,580			13,227			38,470			41,191
Lead (tons)		4,428			4,591			14,495			15,142
Payable metal quantities sold:
Silver (ounces)		1,663,909			1,774,421			5,702,301			6,493,528
Gold (ounces)		7,478			9,232			25,952			31,599
Zinc (tons)		9,138			9,472			25,725			27,783
Lead (tons)		2,755			3,834			10,069			12,098
Ore grades:
Silver ounces per ton		13.63			11.14			13.83			13.84
Gold ounces per ton		0.07			0.07			0.07			0.08
Zinc percent		6.3	%		7.1	%		6.7	%		7.4	%
Lead percent		2.4	%		2.7	%		2.7	%		3.0	%
Total production cost per ton	$	185.34		$	181.60		$	191.58		$	178.29
Cash Cost, After By-product Credits, Per Silver Ounce (1)	$	2.65		$	0.74		$	(0.49	)	$	(1.03	)
AISC, After By-Product Credits, per Silver Ounce (1)	$	8.61		$	5.94		$	4.69		$	2.40
Capital additions	$	6,988		$	6,228		$	24,748		$	14,339

(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 ~~following factors impacted the results~~$21.2 million and $56.1 million decreases in gross profit for the third quarter and first nine months of ~~2021~~2022, respectively, compared to the same periods ~~in 2020:~~

•

~~Variances in gross profit (loss) at our operating units as illustrated in the tables above. See~~ ~~The Greens Creek Segment,~~~~The Lucky Friday Segment, The Casa Berardi Segment, The San Sebastian Segment,~~ ~~and~~ ~~The Nevada Operations Segment~~ ~~sections below.~~

•

~~There were no ramp-up costs at Lucky Friday in 2021 compared to ramp-up income of $1.6 million and costs of $11.7 million in the third quarter and first nine months of 2020, respectively. See~~ ~~The Lucky Friday Segment~~ ~~section below.~~

•

Lower interest expense by $7.4 million in the first nine months of 2021 compared to the same period of 2020, with the decrease due to the following items: (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 in 2020, 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) reduced debt in 2021, as no amounts were drawn on our revolving credit facility during the first nine months of 2021. We utilized the facility during the first nine months of 2020 to mitigate potential impacts of COVID-19, with all amounts repaid by the end of the third quarter of 2020.

•

Net foreign exchange gains of $4.0 million in the third quarter of 2021 and $24 thousand in the first nine months of 2021 versus a net loss of $2.2 million in the third quarter of 2020 and gain of $1.2 million in the first nine months of 2020. The variances are primarily related to the impact of changes in the CAD-to-USD exchange rate on the remeasurement of our net monetary liabilities in Quebec. During the third quarter and first nine months of 2021, the CAD weakened relative to the USD, resulting in a lower USD value for our net monetary liabilities denominated in CAD and a foreign exchange gain for the period. The CAD strengthened relative to the USD during the third quarter of 2020, but weakened during the first nine months of 2020.

•

Provision for closed operations and environmental matters increased by $6.3 million and $9.5 million in the third quarter and first nine months of 2021, respectively, compared to the same periods of 2020. The increase was primarily due to a $6.5 million settlement of a lawsuit in the third quarter of 2021 related to a 1989 agreement entered into by our subsidiary, CoCa Mines, Inc., and its subsidiary, Creede Resources, Inc. (~~see Part II - Other Information~~, ~~Item 1. Legal Proceedings~~ for more information). The variance for the nine-month period was also the result of 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 11~~ of ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~ ~~for more information).~~

•

Higher other operating expense by $4.8 million in the first nine months of 2021 compared to the same period of 2020 due to costs incurred to identify and implement potential operational improvements at Casa Berardi and Lucky Friday.

•

General and administrative expense decreased by $2.8 million and increased by $0.4 million in the third quarter and first nine months of 2021, respectively, compared to the same periods of 2020. The third quarter variance was the result of timing of issuance of certain equity compensation awards, with the increase for the nine-month period primarily due to higher accrued incentive compensation expense.

35

~~Table of Contents~~

•

An unrealized loss on investments in other mining companies of $2.9 million in the third quarter of 2021 compared to a gain of $4.0 million in the third quarter of 2020. In the first nine months of 2021, we had a net loss on investments of $5.9 million, comprised of a $7.1 million unrealized loss and a $1.2 million gain on exchange of investments, compared to an unrealized gain of $9.4 million in the first nine months of 2020.

•

Exploration and pre-development expense increased by $12.9 million and $25.3 million in the third quarter and first nine months of 2021, respectively, compared to the same periods in 2020. In the first nine months of 2021, exploration was primarily at our San Sebastian, Casa Berardi, Greens Creek and Nevada Operations units and our Kinskuch property, while pre-development expense included $2.6 million and $4.9 million in the third quarter and first nine months of 2021, respectively, related to development of the decline to allow drilling of the Hatter Graben area in Nevada.

•

A gain on metal derivatives contracts of $12.1 million and a loss of $4.7 million in the third quarter and first nine months of 2021, respectively, compared to losses of $6.7 million and $12.8 million in the third quarter and first nine months of 2020, respectively (see ~~Note 9~~ of ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~ ~~for more information).~~

•

Income and mining tax benefits of $4.5 million and $3.9 million in the third quarter and first nine months of 2021, respectively, compared to provisions of $5.2 million and $7.4 million, respectively, in the comparable 2020 periods. The benefits in the 2021 periods are primarily the result of losses in Nevada, Mexico and Quebec.

•

In June 2020, we gifted and recognized expense for 650,000 shares of our common stock valued at $2.0 million at the time of the gift to the Hecla Charitable Foundation (the “Foundation”). The Foundation is a 501(c)(3) entity established in 2007 to provide grants and disburse funds for educational and charitable purposes to qualifying organizations in order to promote the social, environmental and economic sustainability and development of the communities where we have operations and activities.

36

~~Table of Contents~~

~~The Greens Creek Segment~~

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

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Sales
$ 84,806 $ 93,494 $ 296,978 $ 232,218
Cost of sales and other direct production costs ⁽¹⁾
(42,096 ) (36,370 ) (121,451 ) (116,344 )
Depreciation, depletion and amortization
(13,097 ) (11,735 ) (42,410 ) (37,152 )
Cost of sales and other direct production costs and depreciation, depletion and amortization
(55,193 ) (48,105 ) (163,861 ) (153,496 )
Gross profit
$ 29,613 $ 45,389 $ 133,117 $ 78,722
Tons of ore milled
211,142 215,237 620,153 629,316
Production:

Silver (ounces)
1,837,270 2,634,436 6,980,587 8,164,062
Gold (ounces)
9,734 12,838 35,859 38,215
Zinc (tons)
13,227 16,187 41,191 44,858
Lead (tons)
4,591 5,909 15,142 16,996
Payable metal quantities sold:

Silver (ounces)
1,774,421 2,311,477 6,493,528 7,158,933
Gold (ounces)
9,232 9,924 31,599 32,600
Zinc (tons)
9,472 11,666 27,783 31,968
Lead (tons)
3,834 4,214 12,098 12,907
Ore grades:

Silver ounces per ton
11.14 15.04 13.84 15.79
Gold ounces per ton
0.07 0.08 0.08 0.08
Zinc percent
7.05
%
8.17
%
7.41
%
7.76
%
Lead percent
2.68
%
3.26
%
2.96
%
3.22
%
Total production cost per ton
$ 181.60 $ 167.87 $ 178.29 $ 174.66
Cash Cost, After By-product Credits, Per Silver Ounce ⁽²⁾
$ 0.74 $ 3.00 $ (1.03 ) $ 4.45
All-In Sustaining Costs (“AISC”), After By-Product Credits, per Silver Ounce ⁽²⁾
$ 5.94 $ 6.58 $ 2.40 $ 7.03

~~(1)~~

~~See~~ ~~Note 2~~ of ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~ ~~for information on revisions to amounts previously reported for cost of sales and other direct production costs.~~

~~(2)~~

~~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 $15.8 million decrease in gross profit in the third quarter~~ of 2021 ~~compared to the third quarter of 2020 was~~were primarily due to lower ore grades due to mine sequencing and lower realized silver and gold prices. Mine sequencing during the third quarter was impacted by manpower challenges due to COVID-19 and increased competition for labor, which we expect to address through schedule changes and other means. As a result, lower grade material was produced from more easily accessible areas of the mine, and deeper, higher-grade material will be mined in the future. The $54.4 million increase in gross profit in the first nine months of 2021 compared to the same period in 2020 was due to: (i) ~~higher~~lower payable metals sold for all metals produced reflecting the decision to defer a silver concentrate shipment to October to ensure adequate concentrate volumes for cost-effective shipment, (ii) lower realized prices for ~~silver, gold, lead~~all metals in both the three and nine month periods respectively, with the exception of zinc in the nine month period ended September 30, 2022, and ~~(ii) lower concentrate treatment~~(iii) higher production costs reflecting the impact of ~~$18.9 million primarily as a result of favorable changes~~inflationary cost increases in smelter terms, with approximately $4.0 million of the variance expected to be non-recurring. The impacts of the factors above were partially offset by lower metal sales volume primarily due to lower ore grades.

37consumables, labor and contractor costs.

~~Table of Contents~~

The charts below illustrate the factors contributing to the variances in Cash Cost, After

By-product

Credits, Per Silver Ounce for the third quarter and first nine months of ~~2021 versus~~2022 compared to the same periods ~~in 2020:~~

38

~~Table~~ of ~~Contents~~2021.

The following table summarizes the components of Cash Cost, After

By-product

Credits, per Silver Ounce:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Cash Cost, Before By-product Credits, per Silver Ounce
$ 26.76 $ 23.18 $ 21.05 $ 21.57
By-product credits
(26.02 ) (20.18 ) (22.08 ) (17.12 )
Cash Cost, After By-product Credits, per Silver Ounce
$ 0.74 $ 3.00 $ (1.03 ) $ 4.45

32

Table of Contents


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Cash Cost, Before By-product Credits, per Silver Ounce	$	22.69		$	26.76		$	22.24		$	21.05
By-product credits		(20.04	)		(26.02	)		(22.73	)		(22.08	)

Cash Cost, After By-product Credits, per Silver Ounce	$	2.65		$	0.74		$	(0.49	)	$	(1.03	)

The following table summarizes the components of AISC, After

By-product

Credits, per Silver Ounce:

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

AISC, Before By-product Credits, per Silver Ounce
$ 31.96 $ 26.76 $ 24.48 $ 24.15
By-product credits
(26.02 ) (20.18 ) (22.08 ) (17.12 )
AISC, After By-product Credits, per Silver Ounce
$ 5.94 $ 6.58 $ 2.40 $ 7.03


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
AISC, Before By-product Credits, per Silver Ounce	$	28.65		$	31.96		$	27.42		$	24.48
By-product credits		(20.04	)		(26.02	)		(22.73	)		(22.08	)

AISC, After By-product Credits, per Silver Ounce	$	8.61		$	5.94		$	4.69		$	2.40

33

Table of Contents

The ~~decrease~~increase in Cash ~~Costs and AISC,~~Cost, After

By-product

Credits, per Silver Ounce for the third quarter and first nine months of ~~2021~~2022 compared to ~~2020~~2021 was primarily due to higher ~~by-product credits~~cash costs reflecting inflationary cost pressures and lower ~~treatment costs.~~

~~Restrictions imposed by~~

by-product

credits for the ~~State of Alaska beginning~~three months ended September 30, 2022.

The increase in ~~late March 2020 in response to the COVID-19 virus pandemic, including the requirement~~AISC, After

By-product

Credits, per Silver Ounce for employees returning to Alaska to self-quarantine for 14 days (changed in June 2020 to 7 days and subsequently discontinued), caused us to revise the normal operating procedures and incur additional costs for staffing operations at Greens Creek, including for quarantining employees from late March 2020 through the second quarter of 2021. In addition, manpower challenges impacted mine operations during the third quarter and first nine months of 2022 compared to 2021 was primarily due to higher sustaining capital of $10.2 million and ~~although we anticipate mitigating them in the fourth quarter, they could continue to have an impact~~$30.8 million for the ~~remainder~~third quarter and first nine months of 2022, respectively, compared to $6.2 million and $17.5 million, respectively, in 2021, reflecting the ~~year. The changes at Greens Creek have not materially impacted our operations~~costs being incurred on camp construction and higher definition and development drilling during 2022 compared to ~~date; however, restrictions and other challenges related to COVID-19 and increased competition for labor could have a material impact if they continue longer than anticipated or become broader.~~

2021.

39

~~Table of Contents~~Lucky Friday

~~The Lucky Friday Segment~~

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

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Sales
$ 29,783 $ 20,812 $ 98,550 $ 35,097
Cost of sales and other direct production costs
(17,001 ) (18,544 ) (53,959 ) (30,635 )
Depreciation, depletion and amortization
(6,590 ) (2,956 ) (20,328 ) (5,152 )
Cost of sales and other direct production costs and depreciation, depletion and amortization
(23,591 ) (21,500 ) (74,287 ) (35,787 )
Gross profit (loss)
$ 6,192 $ (688 ) $ 24,263 $ (690 )
Tons of ore milled
78,227 55,050 241,740 109,951
Production:

Silver (ounces)
831,532 636,389 2,608,727 1,201,674
Lead (tons)
5,313 3,841 17,006 7,624
Zinc (tons)
2,319 1,810 7,673 3,841
Payable metal quantities sold:

Silver (ounces)
783,672 585,119 2,481,753 1,110,568
Lead (tons)
5,001 3,579 16,068 7,042
Zinc (tons)
1,702 1,226 5,561 2,749
Ore grades:

Silver ounces per ton
11.21 12.10 11.34 11.43
Lead percent
7.22
%
7.35
%
7.43
%
7.33
%
Zinc percent
3.30
%
3.76
%
3.48
%
3.89
%
Total production cost per ton
190.66 — 189.06 —
Cash Cost, After By-product Credits, per Silver Ounce ⁽¹⁾
$ 6.35 $ — $ 7.37 $ —
AISC, After By-product Credits, per Silver Ounce ⁽¹⁾
$ 16.79 $ — $ 15.00 $ —


Dollars are in thousands (except per ounce and per ton amounts)	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Sales	$	28,460		$	29,783		$	102,380		$	98,550

Cost of sales and other direct production costs		(16,903	)		(17,001	)		(59,624	)		(53,959	)
Depreciation, depletion and amortization		(7,261	)		(6,590	)		(24,155	)		(20,328	)

Total cost of sales		(24,164	)		(23,591	)		(83,779	)		(74,287	)

Gross profit	$	4,296		$	6,192		$	18,601		$	24,263

Tons of ore milled		90,749			78,227			265,971			241,740
Production:
Silver (ounces)		1,074,230			831,532			3,188,565			2,608,727
Lead (tons)		7,172			5,313			21,299			17,006
Zinc (tons)		3,279			2,319			9,101			7,673
Payable metal quantities sold:
Silver (ounces)		801,115			783,672			2,822,281			2,481,753
Lead (tons)		5,295			5,001			18,720			16,068
Zinc (tons)		2,385			1,702			6,602			5,561
Ore grades:
Silver ounces per ton		12.50			11.21			12.67			11.34
Lead percent		8.5	%		7.2	%		8.5	%		7.4	%
Zinc percent		4.2	%		3.3	%		3.9	%		3.5	%
Total production cost per ton	$	207.1		$	190.66		$	220.41		$	189.06
Cash Cost, After By-product Credits, per Silver Ounce (1)	$	5.23		$	6.35		$	4.77		$	7.37
AISC, After By-product Credits, per Silver Ounce (1)	$	15.98		$	16.79		$	12.86		$	15.00
Capital additions	$	16,125		$	9,133		$	37,278		$	20,776

(1)

~~(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)

.

~~The increases in gross~~

Gross profit ~~ore tonnage and metals production in~~for the ~~third quarter and first nine~~three months ~~of 2021~~ended September 30, 2022 decreased by $1.9 million compared to the same ~~periods~~period in ~~2020 are~~2021, as the ~~result~~impact of ~~returning~~increased sales quantities from mining and processing more high grade material and in higher volumes, did not offset the combination of lower realized silver, lead and zinc prices compared to ~~full~~2021, and increased production ~~during the fourth quarter of 2020 (discussed further below). Sales were higher by 43%~~costs from more ore mined and ~~181%~~processed and inflationary cost increases in consumables and contractor maintenance costs. Gross profit for the ~~third quarter and first~~ nine ~~months of 2021, respectively,~~month period September 30, 2022 decreased by $5.7 million compared to the same ~~periods~~period in 2021, as increased sales from a combination of ~~2020 due to~~mining and processing more high grade material and in higher volumes did not offset the ~~increase in production,~~impact of lower silver and ~~were also impacted by lower~~lead realized ~~silver~~ prices and higher ~~realized lead and zinc prices~~production costs which were the result of the same factors experienced in the ~~third quarter of 2021, and higher realized prices for all~~ three ~~metals in the first nine~~ months ~~of 2021, compared to the same periods in 2020.~~

ended September 30, 2022.

The charts below illustrate the factors contributing to Cash Cost, After

By-product

Credits, Per Silver Ounce for the third quarter and first nine months of ~~2021. Total production costs and Cash Cost and AISC, After By-product Credits, Per Silver Ounce are not presented for~~2022 compared to the ~~third quarter and first nine months~~same periods of ~~2020, as production was limited during the ramp-up after the strike (discussed below) and results are not comparable.~~

2021.

4034

Table of Contents

The following table summarizes the components of Cash Cost, After

By-product

Credits, per Silver Ounce:

Three Months
Ended
September 30,

Nine Months
Ended
September 30,

2021

2021

Cash Cost, Before By-product Credits, per Silver Ounce
$ 24.14 $ 24.70
By-product credits
(17.79 ) (17.33 )
Cash Cost, After By-product Credits, per Silver Ounce
$ 6.35 $ 7.37

41


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Cash Cost, Before By-product Credits, per Silver Ounce	$	22.87		$	24.14		$	23.44		$	24.70
By-product credits		(17.64	)		(17.79	)		(18.67	)		(17.33	)

Cash Cost, After By-product Credits, per Silver Ounce	$	5.23		$	6.35		$	4.77		$	7.37

~~Table of Contents~~

The following table summarizes the components of AISC, After

By-product

Credits, per Silver Ounce:

Three Months
Ended
September 30,

Nine Months
Ended
September 30,

2021

2021

AISC, Before By-product Credits, per Silver Ounce
$ 34.58 $ 32.33
By-product credits
(17.79 ) (17.33 )
AISC, After By-product Credits, per Silver Ounce
$ 16.79 $ 15.00

~~Following settlement~~

35

Table of ~~the strike by unionized employees at Lucky Friday~~Contents


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
AISC, Before By-product Credits, per Silver Ounce	$	33.62		$	34.58		$	31.53		$	32.33
By-product credits		(17.64	)		(17.79	)		(18.67	)		(17.33	)

AISC, After By-product Credits, per Silver Ounce	$	15.98		$	16.79			12.86		$	15.00

The decrease in early 2020, we commenced restaffing and ramp-up procedures and the mine returned to full production in the fourth quarter of 2020. Ramp-up activities resulted in income of $1.6 million in the third quarter of 2020 and costs of $11.7 million in the first nine months of 2020, which included non-cash depreciation expense of $2.2 million and $6.3 million, respectively, and are included in a separate line item on our consolidated statements of operations. This ramp-up income and costs are excluded from the calculation of gross profit, Cash Cost and AISC, After

By-product

Credits, per Silver Ounce for the three and nine month periods ended September 30, 2022 compared to the three and nine month periods ended September 30, 2021 was due to higher silver production resulting from increased grades and volumes processed, higher

by-product

credits (for the nine months ended September 30, 2022) due to higher realized zinc prices, and concentrate quality improvement resulting in higher lead and zinc production, with the decrease in AISC, After

By-product

Credits, per Silver Ounce ~~when presented.~~

partially offset by higher sustaining capital spending.

The Casa Berardi Segment

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

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Sales
$ 56,065 $ 53,554 $ 185,098 $ 149,731
Cost of sales and other direct production costs
(38,196 ) (36,350 ) (111,601 ) (96,579 )
Depreciation, depletion and amortization ⁽¹⁾
(19,968 ) (15,223 ) (61,159 ) (44,314 )
Cost of sales and other direct production costs and depreciation, depletion and amortization
(58,164 ) (51,573 ) (172,760 ) (140,893 )
Gross profit (loss)
$ (2,099 ) $ 1,981 $ 12,338 $ 8,838
Tons of ore milled
398,143 288,682 1,141,229 900,720
Production:

Gold (ounces)
29,722 26,405 97,245 83,913
Silver (ounces)
7,012 3,855 25,604 15,284
Payable metal quantities sold:

Gold (ounces)
31,227 28,133 102,711 85,969
Silver (ounces)
7,764 4,769 24,538 17,575
Ore grades:

Gold ounces per ton
0.087 0.114 0.102 0.114
Silver ounces per ton
0.02 0.02 0.02 0.02
Total production cost per ton
$ 86.95 $ 127.46 $ 95.13 $ 108.85
Cash Cost, After By-product Credits, per Gold Ounce ⁽²⁾
$ 1,175 $ 1,398 $ 1,127 $ 1,181
AISC, After By-product Credits, per Gold Ounce ⁽²⁾
$ 1,476 $ 1,855 $ 1,387 $ 1,493


Dollars are in thousands (except per ounce and per ton amounts)	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Sales	$	56,939		$	56,065		$	181,679		$	185,098

Cost of sales and other direct production costs		(44,443	)		(38,196	)		(137,176	)		(111,601	)
Depreciation, depletion and amortization		(15,089	)		(19,968	)		(46,394	)		(61,159	)

Total cost of sales		(59,532	)		(58,164	)		(183,570	)		(172,760	)

Gross profit	$	(2,593	)	$	(2,099	)	$	(1,891	)	$	12,338

Tons of ore milled		389,941			398,143			1,177,709			1,141,229
Production:
Gold (ounces)		33,335			29,722			96,881			97,245
Silver (ounces)		6,882			7,012			22,329			25,604
Payable metal quantities sold:
Gold (ounces)		32,965			31,227			99,703			102,711
Silver (ounces)		14,700			7,764			23,950			24,538
Ore grades:
Gold ounces per ton		0.10			0.09			0.09			0.10
Silver ounces per ton		0.02			0.02			0.02			0.02
Total production cost per ton	$	114.52		$	86.95		$	115.15		$	95.13
Cash Cost, After By-product Credits, per Gold Ounce (1)	$	1,349		$	1,175		$	1,409		$	1,127
AISC, After By-product Credits, per Gold Ounce (1)	$	1,738		$	1,476		$	1,729		$	1,387
Capital additions	$	10,771		$	11,488		$	26,672		$	37,488

(1)

~~(1)~~

~~See~~ ~~Note 2~~ of ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~ ~~for information on revisions to amounts previously reported for depreciation, depletion and amortization.~~

~~(2)~~

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)

.

42

~~Table of Contents~~

Gross profit decreased by ~~$4.1~~$0.5 million and ~~increased by $3.5~~$14.2 million for the third quarter and first nine months of ~~2021,~~2022, respectively, compared to the same periods of ~~2020.~~2021. The decrease infor the third quarter and first nine months of 2022 was due to lower realized ~~gold~~ prices and higher cost of sales resulting from increased production costs due to: (i) ~~a 38% increase in~~higher ore tonnage for the nine month period only, (ii) mill contractor costs related to maintenance and optimization activities, ~~and~~ (iii) higher underground maintenance costs resulting from repairs and replacements of major components for the production ~~fleet.~~fleet and (iv) higher fuel and other consumables costs which have been negatively impacted by current inflationary pressures. The ~~increase in gross profit for the nine-month period~~impact of higher costs of sales and lower realized prices was ~~due to higher sales resulting from increased gold production,~~ partially offset by ~~higher cost of~~increased sales ~~as a result of the same factors discussed above impacting costs for~~volume in the third quarter. The lower production in the 2020 periods was partially due to a government COVID-19-related order. We suspended operations at Casa Berardi from March 24, 2020 until April 15, 2020, in response to the Governmentquarter of ~~Quebec’s COVID-19 order for the mining industry.~~

~~Total capital additions increased by $14.0 million~~2022. Lower sales volume in the first nine months of 2022 compared to 2021 due to lower grades mined and processed, was partially offset by higher realized gold price.

36

Table of Contents

Total capital additions decreased by $0.7 million and $10.8 million in the third quarter of 2022 and first nine months of 2022 respectively, compared to the same ~~period~~periods of ~~2020 primarily due to growth capital~~2021, reflecting lower development costs ~~incurred for development~~following commissioning of the new 160 zone open pit ~~mine. Limited ore production from the 160 zone pit is expected to begin~~mine in the fourth quarter of 2021.

The charts below illustrate the factors contributing to Cash Cost, After

By-product

Credits, Per Gold Ounce for the third quarter and first nine months of ~~2021~~2022 and ~~2020:~~

2021:

43

~~Table of Contents~~

The following table summarizes the components of Cash Cost, After

By-product

Credits, per Gold Ounce:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Cash Cost, Before By-product Credits, per Gold Ounce
$ 1,181 $ 1,402 $ 1,134 $ 1,184
By-product credits
(6 ) (4 ) (7 ) (3 )
Cash Cost, After By-product Credits, per Gold Ounce
$ 1,175 $ 1,398 $ 1,127 $ 1,181

37

Table of Contents


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Cash Cost, Before By-product Credits, per Gold Ounce	$	1,353	$	1,181	$	1,415	$	1,134
By-product credits		(4)		(6)		(6)		(7)

Cash Cost, After By-product Credits, per Gold Ounce	$	1,349	$	1,175	$	1,409	$	1,127

The following table summarizes the components of AISC, After

By-product

Credits, per Gold Ounce:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

AISC, Before By-product Credits, per Gold Ounce
$ 1,482 $ 1,859 $ 1,394 $ 1,496
By-product credits
(6 ) (4 ) (7 ) (3 )
AISC, After By-product Credits, per Gold Ounce
$ 1,476 $ 1,855 $ 1,387 $ 1,493


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
AISC, Before By-product Credits, per Gold Ounce	$	1,742	$	1,482	$	1,735	$	1,394
By-product credits		(4)		(6)		(6)		(7)

AISC, After By-product Credits, per Gold Ounce	$	1,738	$	1,476	$	1,729	$	1,387

The ~~decrease~~increase in Cash Cost ~~and AISC,~~ After

By-product

Credits, per Gold Ounce for the third quarter and first nine months of ~~2021~~2022 compared to the same periods in ~~2020~~2021 was primarily due to ~~higher gold production, partially offset by~~ higher production costs, as discussed above, ~~with AISC, After By-product Credits, per Gold Ounce also impacted~~partially offset by higher ~~exploration spending. Sustaining capital was lower~~gold production in the third quarter of 2022 compared with the same period in 2021. The lower production in 2022 also negatively impacted AISC, After

By-product

Credits, per Gold Ounce, however this was partially offset by lower sustaining capital spent in 2022 compared to 2021.

The Nevada Operations Segment


Dollars are in thousands (except per ounce and per ton amounts)	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Sales	$	—		$	22,906		$	268		$	41,593

Cost of sales and other direct production costs		(1,285	)		(15,249	)		(2,418	)		(31,811	)
Depreciation, depletion and amortization		(338	)		(6,135	)		(460	)		(15,021	)

Total cost of sales		(1,623	)		(21,384	)		(2,878	)		(46,832	)

Gross (loss) profit	$	(1,623	)	$	1,522		$	(2,610	)	$	(5,239	)

Payable metal quantities sold:
Gold (ounces)		—			12,542			65			23,097
Silver (ounces)		—			15,833			6,363			23,868

The gross loss of $1.6 million for the three months ended September 30, 2022, was attributable to write downs of stockpiled material to net realizable value reflecting a lower spot gold price, versus the gross profit realized in the comparable period in 2021, ~~but higher~~due to processing and sale of refractory ore at a third party facility.

The decrease in gross loss for the first nine months of ~~2021,~~2022 compared to the same ~~periods of 2020.~~

44

~~Table of Contents~~

~~The San Sebastian Segment~~

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

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Sales
$ — $ 9,138 $ 176 $ 23,998
Cost of sales and other direct production costs
— (5,179 ) (95 ) (15,122 )
Depreciation, depletion and amortization
— (781 ) — (3,149 )
Cost of sales and other direct production costs and depreciation, depletion and amortization
— (5,960 ) (95 ) (18,271 )
Gross profit
$ — $ 3,178 $ 81 $ 5,727
Payable metal quantities sold:

Silver (ounces)
— 229,250 3,493 745,726
Gold (ounces)
— 1,713 47 5,757

~~The $3.2 million and $5.6 million decreases in gross profit for the third quarter and first nine months~~period of 2021 ~~respectively, compared to the same periods in 2020 are primarily due to the suspension of production, as mining at San Sebastian~~ was ~~completed in the third quarter of 2020 and milling was completed in the fourth quarter of 2020. Exploration and evaluation activities are ongoing.~~

Suspension-related costs at San Sebastian totaling $0.6 million and $2.0 million for the third quarter and first nine months of 2021, respectively, are reported in a separate line item on our consolidated statements of operations.

~~The Nevada Operations Segment~~

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

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Sales
$ 22,906 $ 22,705 $ 41,593 $ 61,939
Cost of sales and other direct production costs
(15,249 ) (6,582 ) (31,811 ) (21,623 )
Depreciation, depletion and amortization
(6,135 ) (7,295 ) (15,021 ) (22,725 )
Cost of sales and other direct production costs and depreciation, depletion and amortization
(21,384 ) (13,877 ) (46,832 ) (44,348 )
Gross profit (loss)
$ 1,522 $ 8,828 $ (5,239 ) $ 17,591
Payable metal quantities sold:

Gold (ounces)
12,542 11,280 23,097 35,224
Silver (ounces)
15,833 16,433 23,868 45,164

~~The decreases in gross profit for the third quarter and first nine months of 2021 compared to the same periods of 2020 were~~ primarily the result of lower ~~ore grades, with the third quarter also impacted by~~sales volumes and lower ~~realized gold prices and the nine-month period impacted by increased~~ write-downs of ore ~~stockpile~~stockpiled to estimated net realizable value. ~~Processing~~During 2021, production and revenue were generated from processing of the stockpiled

non-refractory

ore at the Midas mill and third-party processing of ~~a bulk sample of~~ refractory ore in a roaster ~~commenced at the end of the first quarter of 2021~~ and was completed in the second quarter. We also processed an additional approximately 14,200 tons of Fire Creek refractory ore at a third-party facility, and we anticipate production and sales from the remaining approximately 2,200 tons of previously stockpiled material processed at the third-party autoclave facility, will be recognized in the fourth quarter of 2021. The write-downs of ore stockpile inventory totaled approximately $0.1 million and $9.7 million in the third quarter and first nine months of 2021, respectively, compared to $1.5 million of such write-downs in the first nine months of 2020, with no portion of that amount recognized in the third quarter of 2020. During the second half of 2020, all ore mined at the Nevada Operations was stockpiled, with no ore milled and no production reported during that period. Mining of non-refractory ore at Fire Creek in areas where development has already been performed was completed in the fourth quarter of 2020.respectively. Fire Creek was placed on

care-and-maintenance

in the second quarter of 2021 after processing of the remaining

non-refractory

ore stockpile.

45

~~Table of Contents~~

~~Production was suspended at the Hollister mine in the third quarter of 2019~~ Care and ~~at the Midas mine and Aurora mill in late 2019. Suspension-related~~maintenance costs at the Nevada Operations unit totaling $6.3 million and $15.0 million for the third quarter and first nine months of 2021, respectively, and $2.9 million and $9.6 million in the third quarter and first nine months of 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~~amortization.

Exploration activities and ~~Cash Cost~~

pre-development

activities continued in 2022 and ~~AISC, After By-product Credits, per Gold Ounce.~~

was focused on drill testing targets at Aurora, Midas and the Hatter Graben in addition to target generation through detailed mapping, sampling and geological mapping.

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.

38

Table of Contents

Corporate Matters

Employee Benefit Plans

Our three defined benefit pension plans (the “DB plans”) provide a significant benefit to our employees, but represent a ~~significant~~ liability to us. The ~~net~~ liability recorded for the underfunded status of our plans was ~~$27.0~~$4.8 million and ~~$44.9~~$6.0 million as of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. ~~In September 2021,~~During May 2022, we contributed ~~$5.5~~an aggregate of $5.6 million in shares of our common stock to two of our ~~defined benefit pension plans (see~~ ~~Part II - Other Information, Item 2. Unregistered Sales of Securities and Use of Proceeds~~~~for more information).~~DB plans. We ~~do not expect to be required to make~~contributed an additional ~~contributions to our defined benefit pension plans in 2021, but may choose to do so. In January 2021, we contributed $16.8~~$4.2 million in shares of our common stock to one of our ~~supplemental executive retirement plan (“SERP”),~~DB plans in October 2022 and do not expect to ~~contribute approximately $0.8 million~~make additional contributions to our DB plans in ~~cash~~2022, but may choose to ~~the SERP in 2021.~~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~~the provisions of two DB plans, and we periodically examine the ~~defined benefit pension~~ plans ~~and SERP~~ for affordability and competitiveness. See

Note 9 6

of

Notes to Consolidated Financial Statements

in our ~~2020~~2021 Form

10-K

for more information.

Income Taxes

During the third quarter and first nine months of ~~2021,~~2022, an income and mining tax ~~benefits~~benefit of approximately $9.5 million and $3.6 million resulted in an effective tax rate of 29% and 10% for the respective periods. This compares to an income and mining tax benefit of $4.5 million and $3.9 million respectively, resulted in effective tax rates of 82% and (20)%, respectively, for those periods. This compares to income and mining tax provisions of $5.2 million and $7.4 million, or effective tax rates of 25% and (144)%, for the third quarter and first nine months of ~~2020, respectively.~~2021, or an effective tax rate of 82.2% and (20.3)% for the respective periods. 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. ~~Therefore, the~~The effective tax rate will fluctuate, sometimes significantly, period to period.

Beginning with the period ended March 31, 2022 and including the period September 30, 2022, we used the annual effective tax rate method to calculate the quarterly tax provision, a change from the discrete method used for the period ended September 30, 2021, due to reversal of valuation allowance in the fourth quarter of 2021.

Each reporting period we assess our deferred tax balances based on a review of long-range forecasts and quarterly activity. A valuation allowance is provided for deferred tax assets for which it is more likely than not ~~that~~ the related tax benefits will not be realized. We analyze our deferred tax assets and, if it is determined that we will not realize all or a portion of our deferred tax assets, we will record or increase a valuation allowance. Conversely, if it is determined we will ultimately more likely than not be able to realize all or a portion of the related benefits for which a valuation allowance has been provided, all or a portion of the related valuation allowance will be reduced. There are a number of factors that impact our ability to realize our deferred tax assets. Valuation allowances are provided on deferred tax assets in Nevada, Mexico, and certain Canadian jurisdictions. For additional information, please see~~Note 4~~ of ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~ ~~and~~

Item ~~1A.~~1A – Risk Factors ~~- Our ability to recognize the benefits of deferred tax assets related to net operating loss carryforwards and other items is dependent on future cash flows and taxable income~~

in our ~~2020~~ 2021 Form

10-K.

46

~~Table~~Reconciliation of ~~Contents~~

~~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 our five operating units~~ and for the Company for the three- and nine-month periods ended September 30, ~~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.

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'~~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

39

Table of Contents

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, royalties and mining production taxes. AISC, Before

By-product

Credits for each mine also includes

on-site

exploration, reclamation, and sustaining capital costs. AISC, Before

By-product

Credits for our consolidated silver properties also includes corporate costs for general and administrative expense and sustaining exploration and capital costs.

By-product

credits include revenues earned from all metals other than the primary metal produced at each unit. As depicted in the tables below,

by-product

credits comprise an essential element of our silver unit cost structure, distinguishing our silver operations due to the polymetallic nature of their orebodies.

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. However, comparability of Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for the third quarter and first nine months of 2021 to the same periods of 2020 is impacted by, among other factors, the return to full production at Lucky Friday and suspension of production at San Sebastian in the fourth quarter of 2020.

47

~~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 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 and Lucky Friday, ~~and San Sebastian,~~ our combined silver properties. Similarly, the silver produced at our other ~~three~~two units is not included as a

by-product

credit when calculating the gold metrics for Casa Berardi and Nevada Operations.

In thousands (except per ounce amounts)

Three Months Ended September 30, 2021

Greens
Creek

Lucky
Friday⁽²⁾

San
Sebastian⁽³⁾

Corporate⁽⁴⁾

Total Silver

Cost of sales and other direct production costs and depreciation, depletion and amortization
$ 55,193 23,591 $ — $ 78,784
Depreciation, depletion and amortization
(13,097 ) (6,590 ) — (19,687 )
Treatment costs
7,979 3,427 — 11,406
Change in product inventory
(122 ) (68 ) — (190 )
Reclamation and other costs
(786 ) (281 ) — (1,067 )
Cash Cost, Before By-product Credits ⁽¹⁾
49,167 20,079 — 69,246
Reclamation and other costs
848 264 — 1,112
Sustaining exploration
2,472 — — 474 2,946
Sustaining capital
6,228 8,406 — — 14,634
General and administrative
8,874 8,874
AISC, Before By-product Credits ⁽¹⁾
58,715 28,749 — 96,812
By-product credits:

Zinc
(25,295 ) (4,611 ) — (29,906 )
Gold
(14,864 ) — — (14,864 )
Lead
(7,640 ) (10,188 ) $ — (17,828 )
Total By-product credits
(47,799 ) (14,799 ) — (62,598 )
Cash Cost, After By-product Credits
$ 1,368 $ 5,280 $ — $ 6,648
AISC, After By-product Credits
$ 10,916 $ 13,950 $ — $ 34,214
Divided by silver ounces produced
1,837 832 — 2,669
Cash Cost, Before By-product Credits, per Silver Ounce
$ 26.76 $ 24.14 $ — $ 25.93
By-product credits per ounce
(26.02 ) $ (17.79 ) — (23.44 )
Cash Cost, After By-product Credits, per Silver Ounce
$ 0.74 $ 6.35 $ — $ 2.49
AISC, Before By-product Credits, per Silver Ounce
$ 31.96 $ 34.58 $ — $ 36.26
By-product credits per ounce
(26.02 ) $ (17.79 ) — (23.44 )
AISC, After By-product Credits, per Silver Ounce
$ 5.94 $ 16.79 $ — $ 12.82

4840

Table of Contents


In thousands (except per ounce amounts)	Three Months Ended September 30, 2022
	Greens Creek			Lucky Friday			Corporate (2)		Total Silver
Total cost of sales	$	52,502		$	24,164		$	—	$	76,666
Depreciation, depletion and amortization		(10,305	)		(7,261	)		—		(17,566	)
Treatment costs		9,477			4,791			—		14,268
Change in product inventory		4,464			3,022			—		7,486
Reclamation and other costs		(118	)		(152	)		—		(270	)

Cash Cost, Before By-product Credits (1)		56,020			24,564					80,584
Reclamation and other costs		705			282			—		987
Sustaining exploration		3,776			—			722		4,498
Sustaining capital		10,219			11,264			187		21,670
General and administrative		—			—			11,003		11,003

AISC, Before By-product Credits (1)		70,720			36,110			11,912		118,742
By-product credits:
Zinc		(26,244	)		(7,155	)		—		(33,399	)
Gold		(17,019	)		—			—		(17,019	)
Lead		(6,212	)		(11,796	)		—		(18,008	)

Total By-product credits		(49,475	)		(18,951	)		—		(68,426	)

Cash Cost, After By-product Credits	$	6,545		$	5,613		$	—	$	12,158

AISC, After By-product Credits	$	21,245		$	17,159			11,912	$	50,316

Divided by ounces produced		2,469			1,075					3,544
Cash Cost, Before By-product Credits, per Ounce	$	22.69		$	22.87				$	22.74
By-product credits per ounce		(20.04	)		(17.64	)				(19.31	)

Cash Cost, After By-product Credits, per Ounce	$	2.65		$	5.23				$	3.43

AISC, Before By-product Credits, per Ounce	$	28.65		$	33.62				$	33.51
By-product credits per ounce		(20.04	)		(17.64	)				(19.31	)

AISC, After By-product Credits, per Ounce	$	8.61		$	15.98				$	14.20

41

In thousands (except per ounce amounts)

Three Months Ended September 30, 2021

Casa Berardi⁽⁵⁾

Nevada
Operations⁽⁶⁾

Total Gold

Cost of sales and other direct production costs and depreciation, depletion and amortization
$ 58,164 $ 21,384 $ 79,548
Depreciation, depletion and amortization
(19,968 ) (6,135 ) (26,103 )
Treatment costs
475 1 476
Change in product inventory
(3,369 ) (12,389 ) (15,758 )
Reclamation and other costs
(210 ) — (210 )
Cash Cost, Before By-product Credits ⁽¹⁾
35,092 2,861 37,953
Reclamation and other costs
209 327 536
Sustaining exploration
1,541 — 1,541
Sustaining capital
7,208 29 7,237
AISC, Before By-product Credits ⁽¹⁾
44,050 3,217 47,267
By-product credits:

Silver
(169 ) (6 ) (175 )
Total By-product credits
(169 ) (6 ) (175 )
Cash Cost, After By-product Credits
$ 34,923 $ 2,855 $ 37,778
AISC, After By-product Credits
$ 43,881 $ 3,211 $ 47,092
Divided by gold ounces produced
30 3 33
Cash Cost, Before By-product Credits, per Gold Ounce
$ 1,181 $ 1,040 $ 1,168
By-product credits per ounce
(6 ) (2 ) (5 )
Cash Cost, After By-product Credits, per Gold Ounce
$ 1,175 $ 1,038 $ 1,163
AISC, Before By-product Credits, per Gold Ounce
$ 1,482 $ 1,169 $ 1,455
By-product credits per ounce
(6 ) (2 ) (5 )
AISC, After By-product Credits, per Gold Ounce
$ 1,476 $ 1,167 $ 1,450

49

Table of Contents


In thousands (except per ounce amounts)	Three Months ended September 30, 2022
	Casa Berardi			Total Gold
Total cost of sales	$	59,532		$	59,532
Depreciation, depletion and amortization		(15,089	)		(15,089	)
Treatment costs		429			429
Change in product inventory		420			420
Reclamation and other costs		(203	)		(203	)

Cash Cost, Before By-product Credits (1)		45,089			45,089
Reclamation and other costs		204			204
Sustaining exploration		2,314			2,314
Sustaining capital		10,457			10,457

AISC, Before By-product Credits (1)		58,064			58,064
By-product credits:
Silver		(131	)		(131	)

Total By-product credits		(131	)		(131	)

Cash Cost, After By-product Credits	$	44,958		$	44,958

AISC, After By-product Credits	$	57,933		$	57,933

Divided by ounces produced		33			33
Cash Cost, Before By-product Credits, per Ounce	$	1,353		$	1,353
By-product credits per ounce		(4	)		(4	)

Cash Cost, After By-product Credits, per Ounce	$	1,349		$	1,349

AISC, Before By-product Credits, per Ounce	$	1,742		$	1,742
By-product credits per ounce		(4	)		(4	)

AISC, After By-product Credits, per Ounce	$	1,738		$	1,738

42

In thousands (except per ounce amounts)

Three Months Ended September 30, 2021

Total
Silver

Total Gold

Total

Cost of sales and other direct production costs and depreciation, depletion and amortization
$ 78,784 79,548 $ 158,332
Depreciation, depletion and amortization
(19,687 ) (26,103 ) (45,790 )
Treatment costs
11,406 476 11,882
Change in product inventory
(190 ) (15,758 ) (15,948 )
Reclamation and other costs
(1,067 ) (210 ) (1,277 )
Cash Cost, Before By-product Credits ⁽¹⁾
69,246 37,953 107,199
Reclamation and other costs
1,112 536 1,648
Sustaining exploration
2,946 1,541 4,487
Sustaining capital
14,634 7,237 21,871
General and administrative
8,874 — 8,874
AISC, Before By-product Credits ⁽¹⁾
96,812 47,267 144,079
By-product credits:

Zinc
(29,906 ) — (29,906 )
Gold
(14,864 ) — (14,864 )
Lead
(17,828 ) — (17,828 )
Silver
— (175 ) (175 )
Total By-product credits
(62,598 ) (175 ) (62,773 )
Cash Cost, After By-product Credits
$ 6,648 $ 37,778 $ 44,426
AISC, After By-product Credits
$ 34,214 $ 47,092 $ 81,306
Divided by ounces produced
2,669 33
Cash Cost, Before By-product Credits, per Ounce
$ 25.93 $ 1,168
By-product credits per ounce
(23.44 ) (5 )
Cash Cost, After By-product Credits, per Ounce
$ 2.49 $ 1,163
AISC, Before By-product Credits, per Ounce
$ 36.26 $ 1,455
By-product credits per ounce
(23.44 ) (5 )
AISC, After By-product Credits, per Ounce
$ 12.82 $ 1,450

50

Table of Contents


In thousands (except per ounce amounts)	Three Months ended September 30, 2022
	Total Silver			Total Gold			Total
Total cost of sales	$	76,666		$	59,532		$	136,198
Depreciation, depletion and amortization		(17,566	)		(15,089	)		(32,655	)
Treatment costs		14,268			429			14,697
Change in product inventory		7,486			420			7,906
Reclamation and other costs		(270	)		(203	)		(473	)

Cash Cost, Before By-product Credits (1)		80,584			45,089			125,673
Reclamation and other costs		987			204			1,191
Sustaining exploration		4,498			2,314			6,812
Sustaining capital		21,670			10,457			32,127
General and administrative		11,003			—			11,003

AISC, Before By-product Credits (1)		118,742			58,064			176,806
By-product credits:
Zinc		(33,399	)		—			(33,399	)
Gold		(17,019	)		—			(17,019	)
Lead		(18,008	)		—			(18,008	)
Silver		—			(131	)		(131	)

Total By-product credits		(68,426	)		(131	)		(68,557	)

Cash Cost, After By-product Credits	$	12,158		$	44,958		$	57,116

AISC, After By-product Credits	$	50,316		$	57,933		$	108,249

Divided by ounces produced		3,544			33
Cash Cost, Before By-product Credits, per Ounce	$	22.74		$	1,353
By-product credits per ounce		(19.31	)		(4	)

Cash Cost, After By-product Credits, per Ounce	$	3.43		$	1,349

AISC, Before By-product Credits, per Ounce	$	33.51		$	1,742
By-product credits per ounce		(19.31	)		(4	)

AISC, After By-product Credits, per Ounce	$	14.20		$	1,738

43

In thousands (except per ounce amounts)

Three Months Ended September 30, 2020

Greens
Creek

Lucky
Friday⁽²⁾

San
Sebastian

Corporate⁽⁴⁾

Total
Silver

Cost of sales and other direct production costs and depreciation, depletion and amortization ⁽⁷⁾
$ 48,105 $ 21,500 $ 5,960 $ 75,565
Depreciation, depletion and amortization
(11,735 ) (2,956 ) (781 ) (15,472 )
Treatment costs
22,675 4,038 81 26,794
Change in product inventory
2,899 11 826 3,736
Reclamation and other costs ⁽⁸⁾
(891 ) — (392 ) (1,283 )
Exclusion of Lucky Friday cash costs
— (22,593 ) — (22,593 )
Cash Cost, Before By-product Credits ⁽¹⁾
61,053 — 5,694 66,747
Reclamation and other costs
788 — 114 902
Sustaining exploration
370 — — 429 799
Sustaining capital
8,265 — 244 38 8,547
General and administrative ⁽⁸⁾
10,345 10,345
AISC, Before By-product Credits ⁽¹⁾
70,476 — 6,052 87,340
By-product credits:

Zinc
(23,772 ) — — (23,772 )
Gold
(21,226 ) — (3,686 ) (24,912 )
Lead
(8,149 ) — — (8,149 )
Total By-product credits
(53,147 ) — (3,686 ) (56,833 )
Cash Cost, After By-product Credits
$ 7,906 $ — $ 2,008 $ 9,914
AISC, After By-product Credits
$ 17,329 $ — $ 2,366 $ 30,507
Divided by ounces produced
2,634 — 267 2,901
Cash Cost, Before By-product Credits, per Ounce
$ 23.18 $ — $ 21.34 $ 23.00
By-product credits per ounce (20.18 ) — (13.81 ) (19.59 )
Cash Cost, After By-product Credits, per Ounce $ 3.00 $ — $ 7.53 $ 3.41
AISC, Before By-product Credits, per Ounce $ 26.76 $ — $ 22.68 $ 30.11
By-product credits per ounce
(20.18 ) — (13.81 ) (19.59 )
AISC, After By-product Credits, per Ounce
$ 6.58 $ — $ 8.87 $ 10.52

51

Table of Contents


In thousands (except per ounce amounts)	Three Months Ended September 30, 2021
	Greens Creek			Lucky Friday			Corporate and other (2)		Total Silver
Total cost of sales	$	55,193		$	23,591		$	—	$	78,784
Depreciation, depletion and amortization		(13,097	)		(6,590	)		—		(19,687	)
Treatment costs		7,979			3,427			—		11,406
Change in product inventory		(122	)		(68	)		—		(190	)
Reclamation and other costs		(786	)		(281	)		—		(1,067	)

Cash Cost, Before By-product Credits (1)		49,167			20,079			—		69,246
Reclamation and other costs		848			264			—		1,112
Sustaining exploration		2,472			—			474		2,946
Sustaining capital		6,228			8,406			—		14,634
General and administrative		—			—			8,874		8,874

AISC, Before By-product Credits (1)		58,715			28,749			9,348		96,812
By-product credits:
Zinc		(25,295	)		(4,611	)		—		(29,906	)
Gold		(14,864	)		—			—		(14,864	)
Lead		(7,640	)		(10,188	)		—		(17,828	)

Total By-product credits		(47,799	)		(14,799	)		—		(62,598	)

Cash Cost, After By-product Credits	$	1,368		$	5,280			—	$	6,648

AISC, After By-product Credits	$	10,916		$	13,950			9,348	$	34,214

Divided by ounces produced		1,837			832					2,669
Cash Cost, Before By-product Credits, per Ounce	$	26.76		$	24.14				$	25.93
By-product credits per ounce		(26.02	)		(17.79	)				(23.44	)

Cash Cost, After By-product Credits, per Ounce	$	0.74		$	6.35				$	2.49

AISC, Before By-product Credits, per Ounce	$	31.96		$	34.58				$	36.26
By-product credits per ounce		(26.02	)		(17.79	)				(23.44	)

AISC, After By-product Credits, per Ounce	$	5.94		$	16.79				$	12.82

44

In thousands (except per ounce amounts)

Three Months Ended September 30, 2020

Casa Berardi

Nevada
Operations

Total Gold

Cost of sales and other direct production costs and depreciation, depletion and amortization ⁽⁷⁾
$ 51,573 $ 13,877 $ 65,450
Depreciation, depletion and amortization ⁽⁷⁾
(15,223 ) (7,295 ) (22,518 )
Treatment costs
562 — 562
Change in product inventory
543 6,920 7,463
Reclamation and other costs ⁽⁸⁾
(449 ) (324 ) (773 )
Exclusion of Nevada cash costs
— (13,178 ) (13,178 )
Cash Cost, Before By-product Credits ⁽¹⁾
37,006 — 37,006
Reclamation and other costs
97 — 97
Sustaining exploration
335 — 335
Sustaining capital
11,629 — 11,629
AISC, Before By-product Credits ⁽¹⁾
49,067 — 49,067
By-product credits:

Silver
(93 ) — (93 )
Total By-product credits
(93 ) — (93 )
Cash Cost, After By-product Credits
$ 36,913 $ — $ 36,913
AISC, After By-product Credits
$ 48,974 $ — $ 48,974
Divided by ounces produced
26 — 26
Cash Cost, Before By-product Credits, per Ounce
$ 1,402 $ — $ 1,402
By-product credits per ounce
(4 ) — (4 )
Cash Cost, After By-product Credits, per Ounce
$ 1,398 $ — 1,398
AISC, Before By-product Credits, per Ounce
$ 1,859 $ — $ 1,859
By-product credits per ounce
(4 ) — (4 )
AISC, After By-product Credits, per Ounce
$ 1,855 $ — $ 1,855

52

Table of Contents


In thousands (except per ounce amounts)	Three Months Ended September 30, 2021
	Casa Berardi			Nevada Operations			Total Gold
Total cost of sales	$	58,164		$	21,384		$	79,548
Depreciation, depletion and amortization		(19,968	)		(6,135	)		(26,103	)
Treatment costs		475			1			476
Change in product inventory		(3,369	)		(12,389	)		(15,758	)
Reclamation and other costs		(210	)		—			(210	)
Exclusion of Nevada Operations costs		—			—			—

Cash Cost, Before By-product Credits (1)		35,092			2,861			37,953
Reclamation and other costs		209			327			536
Sustaining exploration		1,541			—			1,541
Sustaining capital		7,208			29			7,237

AISC, Before By-product Credits (1)		44,050			3,217			47,267
By-product credits:
Silver		(169	)		(6	)		(175	)

Total By-product credits		(169	)		(6	)		(175	)

Cash Cost, After By-product Credits	$	34,923		$	2,855		$	37,778

AISC, After By-product Credits	$	43,881		$	3,211		$	47,092

Divided by ounces produced		30			3			33
Cash Cost, Before By-product Credits, per Ounce	$	1,181		$	1,040		$	1,168
By-product credits per ounce		(6	)		(2	)		(5	)

Cash Cost, After By-product Credits, per Ounce	$	1,175		$	1,038		$	1,163

AISC, Before By-product Credits, per Ounce	$	1,482		$	1,169		$	1,455
By-product credits per ounce		(6	)		(2	)		(5	)

AISC, After By-product Credits, per Ounce	$	1,476		$	1,167		$	1,450

45

In thousands (except per ounce amounts)

Three Months Ended September 30, 2020

Total
Silver

Total Gold

Total

Cost of sales and other direct production costs and depreciation, depletion and amortization ⁽⁷⁾
$ 75,565 65,450 $ 141,015
Depreciation, depletion and amortization ⁽⁷⁾
(15,472 ) (22,518 ) (37,990 )
Treatment costs
26,794 562 27,356
Change in product inventory
3,736 7,463 11,199
Reclamation and other costs ⁽⁸⁾
(1,283 ) (773 ) (2,056 )
Exclusion of cash costs
(22,593 ) (13,178 ) (35,771 )
Cash Cost, Before By-product Credits ⁽¹⁾
66,747 37,006 103,753
Reclamation and other costs
902 97 999
Sustaining exploration
799 335 1,134
Sustaining capital
8,547 11,629 20,176
General and administrative ⁽⁸⁾
10,345 — 10,345
AISC, Before By-product Credits ⁽¹⁾
87,340 49,067 136,407
By-product credits:

Zinc
(23,772 ) — (23,772 )
Gold
(24,912 ) — (24,912 )
Lead
(8,149 ) — (8,149 )
Silver
— (93 ) (93 )
Total By-product credits
(56,833 ) (93 ) (56,926 )
Cash Cost, After By-product Credits
$ 9,914 $ 36,913 $ 46,827
AISC, After By-product Credits
$ 30,507 $ 48,974 $ 79,481
Divided by ounces produced
2,901 26
Cash Cost, Before By-product Credits, per Ounce
$ 23.00 $ 1,402
By-product credits per ounce
(19.59 ) (4 )
Cash Cost, After By-product Credits, per Ounce
$ 3.41 $ 1,398
AISC, Before By-product Credits, per Ounce
$ 30.11 $ 1,859
By-product credits per ounce
(19.59 ) (4 )
AISC, After By-product Credits, per Ounce
$ 10.52 $ 1,855

53

Table of Contents


In thousands (except per ounce amounts)	Three Months Ended September 30, 2021
	Total Silver			Total Gold			Total
Total cost of sales	$	78,784		$	79,548		$	158,332
Depreciation, depletion and amortization		(19,687	)		(26,103	)		(45,790	)
Treatment costs		11,406			476			11,882
Change in product inventory		(190	)		(15,758	)		(15,948	)
Reclamation and other costs		(1,067	)		(210	)		(1,277	)
Exclusion of Nevada Operations costs		—

Cash Cost, Before By-product Credits (1)		69,246			37,953			107,199
Reclamation and other costs		1,112			536			1,648
Sustaining exploration		2,946			1,541			4,487
Sustaining capital		14,634			7,237			21,871
General and administrative		8,874			—			8,874

AISC, Before By-product Credits (1)		96,812			47,267			144,079
By-product credits:
Zinc		(29,906	)		—			(29,906	)
Gold		(14,864	)		—			(14,864	)
Lead		(17,828	)		—			(17,828	)
Silver		—			(175	)		(175	)

Total By-product credits		(62,598	)		(175	)		(62,773	)

Cash Cost, After By-product Credits	$	6,648		$	37,778		$	44,426

AISC, After By-product Credits	$	34,214		$	47,092		$	81,306

Divided by ounces produced		2,669			33
Cash Cost, Before By-product Credits, per Ounce	$	25.93		$	1,168
By-product credits per ounce		(23.44	)		(5	)

Cash Cost, After By-product Credits, per Ounce	$	2.49		$	1,163

AISC, Before By-product Credits, per Ounce	$	36.26		$	1,455
By-product credits per ounce		(23.44	)		(5	)

AISC, After By-product Credits, per Ounce	$	12.82		$	1,450

46

In thousands (except per ounce amounts)

Nine Months Ended September 30, 2021

Greens
Creek

Lucky
Friday⁽²⁾

San
Sebastian⁽³⁾

Corporate⁽⁴⁾

Total Silver

Cost of sales and other direct production costs and depreciation, depletion and amortization
$ 163,861 $ 74,287 $ 95 $ 238,243
Depreciation, depletion and amortization
(42,410 ) (20,328 ) — (62,738 )
Treatment costs
27,444 13,087 — 40,531
Change in product inventory
(156 ) (1,757 ) — (1,913 )
Reclamation and other costs
(1,777 ) (840 ) (95 ) (2,712 )
Cash Cost, Before By-product Credits ⁽¹⁾
146,962 64,449 — 211,411
Reclamation and other costs
2,543 792 — 3,335
Sustaining exploration
3,895 — — 1,359 5,254
Sustaining capital
17,459 19,104 — — 36,563
General and administrative
27,985 27,985
AISC, Before By-product Credits ⁽¹⁾
170,859 84,345 — 284,548
By-product credits:

Zinc
(74,571 ) (14,457 ) — (89,028 )
Gold
(56,299 ) — — (56,299 )
Lead
(23,265 ) (30,762 ) — (54,027 )
Total By-product credits
(154,135 ) (45,219 ) — (199,354 )
Cash Cost, After By-product Credits
$ (7,173 ) $ 19,230 $ — $ 12,057
AISC, After By-product Credits
$ 16,724 $ 39,126 $ — $ 85,194
Divided by silver ounces produced
6,981 2,609 — 9,590
Cash Cost, Before By-product Credits, per Silver Ounce
$ 21.05 $ 24.70 $ — $ 22.05
By-product credits per ounce
(22.08 ) (17.33 ) — (20.79 )
Cash Cost, After By-product Credits, per Silver Ounce
$ (1.03 ) $ 7.37 $ — $ 1.26
AISC, Before By-product Credits, per Silver Ounce
$ 24.48 $ 32.33 $ — $ 29.67
By-product credits per ounce
(22.08 ) (17.33 ) — (20.79 )
AISC, After By-product Credits, per Silver Ounce
$ 2.40 $ 15.00 $ — $ 8.88

54

Table of Contents


In thousands (except per ounce amounts)	Nine Months Ended September 30, 2022
	Greens Creek			Lucky Friday			Corporate (1)		Total Silver
Total cost of sales	$	162,644		$	83,779		$	—	$	246,423
Depreciation, depletion and amortization		(35,354	)		(24,155	)		—		(59,509	)
Treatment costs		27,369			13,271			—		40,640
Change in product inventory		9,899			2,620			—		12,519
Reclamation and other costs		(1,988	)		(769	)		—		(2,757	)

Cash Cost, Before By-product Credits (1)		162,570			74,746			—		237,316
Reclamation and other costs		2,115			846			—		2,961
Sustaining exploration		4,870			—			2,207		7,077
Sustaining capital		30,843			24,937			334		56,114
General and administrative		—			—			28,989		28,989

AISC, Before By-product Credits (1)		200,398			100,529			31,530		332,457
By-product credits:
Zinc		(87,723	)		(21,358	)		—		(109,081	)
Gold		(55,966	)		—			—		(55,966	)
Lead		(22,449	)		(38,175	)		—		(60,624	)

Total By-product credits		(166,138	)		(59,533	)		—		(225,671	)

Cash Cost, After By-product Credits	$	(3,568	)	$	15,213			—	$	11,645

AISC, After By-product Credits	$	34,260		$	40,996		$	31,530	$	106,786

Divided by ounces produced		7,309			3,189					10,498
Cash Cost, Before By-product Credits, per Ounce	$	22.24		$	23.44				$	22.61
By-product credits per ounce		(22.73	)		(18.67	)				(21.50	)

Cash Cost, After By-product Credits, per Ounce	$	(0.49	)	$	4.77				$	1.11

AISC, Before By-product Credits, per Ounce	$	27.42		$	31.53				$	31.67
By-product credits per ounce		(22.73	)		(18.67	)				(21.50	)

AISC, After By-product Credits, per Ounce	$	4.69		$	12.86				$	10.17

47

In thousands (except per ounce amounts)

Nine Months Ended September 30, 2021

Casa Berardi⁽⁵⁾

Nevada
Operations⁽⁶⁾

Total Gold

Cost of sales and other direct production costs and depreciation, depletion and amortization
$ 172,760 $ 46,832 $ 219,592
Depreciation, depletion and amortization
(61,159 ) (15,021 ) (76,180 )
Treatment costs
1,723 1,731 3,454
Change in product inventory
(2,401 ) (9,951 ) (12,352 )
Reclamation and other costs
(632 ) 299 (333 )
Cash Cost, Before By-product Credits ⁽¹⁾
110,291 23,890 134,181
Reclamation and other costs
632 681 1,313
Sustaining exploration
3,551 — 3,551
Sustaining capital
21,030 195 21,225
AISC, Before By-product Credits ⁽¹⁾
135,504 24,766 160,270
By-product credits:

Silver
(656 ) (1,131 ) (1,787 )
Total By-product credits
(656 ) (1,131 ) (1,787 )
Cash Cost, After By-product Credits
$ 109,635 $ 22,759 $ 132,394
AISC, After By-product Credits
$ 134,848 $ 23,635 $ 158,483
Divided by gold ounces produced
97 20 117
Cash Cost, Before By-product Credits, per Gold Ounce
$ 1,134 $ 1,180 $ 1,142
By-product credits per ounce
(7 ) (56 ) (15 )
Cash Cost, After By-product Credits, per Gold Ounce
$ 1,127 $ 1,124 $ 1,127
AISC, Before By-product Credits, per Gold Ounce
$ 1,394 $ 1,223 $ 1,364
By-product credits per ounce
(7 ) (56 ) (15 )
AISC, After By-product Credits, per Gold Ounce
$ 1,387 $ 1,167 $ 1,349

55

Table of Contents


In thousands (except per ounce amounts)	Nine Months Ended September 30, 2022
	Casa Berardi			Total Gold
Total cost of sales	$	183,570		$	183,570
Depreciation, depletion and amortization		(46,394	)		(46,394	)
Treatment costs		1,345			1,345
Change in product inventory		(936	)		(936	)
Reclamation and other costs		(623	)		(623	)

Cash Cost, Before By-product Credits (1)		136,962			136,962
Reclamation and other costs		623			623
Sustaining exploration		4,886			4,886
Sustaining capital		25,587			25,587

AISC, Before By-product Credits (1)		168,058			168,058
By-product credits:
Silver		(485	)		(485	)

Total By-product credits		(485	)		(485	)

Cash Cost, After By-product Credits	$	136,477		$	136,477

AISC, After By-product Credits	$	167,573		$	167,573

Divided by ounces produced		97			97
Cash Cost, Before By-product Credits, per Ounce	$	1,415		$	1,415
By-product credits per ounce		(6	)		(6	)

Cash Cost, After By-product Credits, per Ounce	$	1,409		$	1,409

AISC, Before By-product Credits, per Ounce	$	1,735		$	1,735
By-product credits per ounce		(6	)		(6	)

AISC, After By-product Credits, per Ounce	$	1,729		$	1,729

48

In thousands (except per ounce amounts)

Nine Months Ended September 30, 2021

Total
Silver

Total Gold

Total

Cost of sales and other direct production costs and depreciation, depletion and amortization
$ 238,243 219,592 $ 457,835
Depreciation, depletion and amortization
(62,738 ) (76,180 ) (138,918 )
Treatment costs
40,531 3,454 43,985
Change in product inventory
(1,913 ) (12,352 ) (14,265 )
Reclamation and other costs
(2,712 ) (333 ) (3,045 )
Cash Cost, Before By-product Credits ⁽¹⁾
211,411 134,181 345,592
Reclamation and other costs
3,335 1,313 4,648
Sustaining exploration
5,254 3,551 8,805
Sustaining capital
36,563 21,225 57,788
General and administrative
27,985 — 27,985
AISC, Before By-product Credits ⁽¹⁾
284,548 160,270 444,818
By-product credits:

Zinc
(89,028 ) — (89,028 )
Gold
(56,299 ) — (56,299 )
Lead
(54,027 ) — (54,027 )
Silver
— (1,787 ) (1,787 )
Total By-product credits
(199,354 ) (1,787 ) (201,141 )
Cash Cost, After By-product Credits
$ 12,057 $ 132,394 $ 144,451
AISC, After By-product Credits
$ 85,194 $ 158,483 $ 243,677
Divided by ounces produced
9,590 117
Cash Cost, Before By-product Credits, per Ounce
$ 22.05 $ 1,142
By-product credits per ounce
(20.79 ) (15 )
Cash Cost, After By-product Credits, per Ounce
$ 1.26 $ 1,127
AISC, Before By-product Credits, per Ounce
$ 29.67 $ 1,364
By-product credits per ounce
(20.79 ) (15 )
AISC, After By-product Credits, per Ounce
$ 8.88 $ 1,349

56

Table of Contents


In thousands (except per ounce amounts)	Nine Months Ended September 30, 2022
	Total Silver			Total Gold			Total
Total cost of sales	$	246,423		$	183,570		$	429,993
Depreciation, depletion and amortization		(59,509	)		(46,394	)		(105,903	)
Treatment costs		40,640			1,345			41,985
Change in product inventory		12,519			(936	)		11,583
Reclamation and other costs		(2,757	)		(623	)		(3,380	)

Cash Cost, Before By-product Credits (1)		237,316			136,962			374,278
Reclamation and other costs		2,961			623			3,584
Sustaining exploration		7,077			4,886			11,963
Sustaining capital		56,114			25,587			81,701
General and administrative		28,989			—			28,989

AISC, Before By-product Credits (1)		332,457			168,058			500,515
By-product credits:
Zinc		(109,081	)		—			(109,081	)
Gold		(55,966	)		—			(55,966	)
Lead		(60,624	)		—			(60,624	)
Silver					(485	)		(485	)

Total By-product credits		(225,671	)		(485	)		(226,156	)

Cash Cost, After By-product Credits	$	11,645		$	136,477		$	148,122

AISC, After By-product Credits	$	106,786		$	167,573		$	274,359

Divided by ounces produced		10,498			97
Cash Cost, Before By-product Credits, per Ounce	$	22.61		$	1,415
By-product credits per ounce		(21.50	)		(6	)

Cash Cost, After By-product Credits, per Ounce	$	1.11		$	1,409

AISC, Before By-product Credits, per Ounce	$	31.67		$	1,735
By-product credits per ounce		(21.50	)		(6	)

AISC, After By-product Credits, per Ounce	$	10.17		$	1,729

49

In thousands (except per ounce amounts)

Nine Months Ended September 30, 2020

Greens
Creek

Lucky
Friday⁽²⁾

San
Sebastian

Corporate⁽⁴⁾

Total
Silver

Cost of sales and other direct production costs and depreciation, depletion and amortization ⁽⁷⁾
$ 153,496 $ 35,787 $ 18,271 $ 207,554
Depreciation, depletion and amortization
(37,152 ) (5,152 ) (3,149 ) (45,453 )
Treatment costs
58,517 7,502 232 66,251
Change in product inventory
1,749 807 681 3,237
Reclamation and other costs ⁽⁸⁾
(478 ) — (1,050 ) (1,528 )
Exclusion of Lucky Friday cash costs
— (38,944 ) — (38,944 )
Cash Cost, Before By-product Credits ⁽¹⁾
176,132 — 14,985 191,117
Reclamation and other costs
2,365 — 342 2,707
Sustaining exploration
374 — — 1,362 1,736
Sustaining capital
18,276 — 299 38 18,613
General and administrative ⁽⁸⁾
26,263 26,263
AISC, Before By-product Credits ⁽¹⁾
197,147 — 15,626 240,436
By-product credits:

Zinc
(59,711 ) — — (59,711 )
Gold
(57,850 ) — (10,402 ) (68,252 )
Lead
(22,208 ) — — (22,208 )
Total By-product credits
(139,769 ) — (10,402 ) (150,171 )
Cash Cost, After By-product Credits
$ 36,363 $ — $ 4,583 $ 40,946
AISC, After By-product Credits
$ 57,378 $ — $ 5,224 $ 90,265
Divided by ounces produced
8,164 — 772 8,936
Cash Cost, Before By-product Credits, per Ounce
$ 21.57 $ — 19.40 $ 21.39
By-product credits per ounce
(17.12 ) — (13.47 ) (16.81 )
Cash Cost, After By-product Credits, per Ounce $ 4.45 $ — 5.93 $ 4.58
AISC, Before By-product Credits, per Ounce $ 24.15 $ — $ 20.23 $ 26.90
By-product credits per ounce (17.12 ) — (13.47 ) (16.81 )
AISC, After By-product Credits, per Ounce
$ 7.03 $ — $ 6.76 $ 10.09

57

Table of Contents


In thousands (except per ounce amounts)	Nine Months Ended September 30, 2021
	Greens Creek			Lucky Friday			Corporate and other (2)			Total Silver
Total cost of sales	$	163,861		$	74,287		$	95		$	238,243
Depreciation, depletion and amortization		(42,410	)		(20,328	)		—			(62,738	)
Treatment costs		27,444			13,087			—			40,531
Change in product inventory		(156	)		(1,757	)		—			(1,913	)
Reclamation and other costs		(1,777	)		(840	)		(95	)		(2,712	)

Cash Cost, Before By-product Credits (1)		146,962			64,449						211,411
Reclamation and other costs		2,543			792						3,335
Sustaining exploration		3,895			—			1,359			5,254
Sustaining capital		17,459			19,104			—			36,563
General and administrative		—			—			27,985			27,985

AISC, Before By-product Credits (1)		170,859			84,345			29,344			284,548
By-product credits:
Zinc		(74,571	)		(14,457	)		—			(89,028	)
Gold		(56,299	)		—						(56,299	)
Lead		(23,265	)		(30,762	)		—			(54,027	)

Total By-product credits		(154,135	)		(45,219	)		—			(199,354	)

Cash Cost, After By-product Credits	$	(7,173	)	$	19,230		$	—		$	12,057

AISC, After By-product Credits	$	16,724		$	39,126		$	29,344		$	85,194

Divided by ounces produced		6,981			2,609						9,590
Cash Cost, Before By-product Credits, per Ounce	$	21.05		$	24.70					$	22.05
By-product credits per ounce		(22.08	)		(17.33	)					(20.79	)

Cash Cost, After By-product Credits, per Ounce	$	(1.03	)	$	7.37					$	1.26

AISC, Before By-product Credits, per Ounce	$	24.48		$	32.33					$	29.67
By-product credits per ounce		(22.08	)		(17.33	)					(20.79	)

AISC, After By-product Credits, per Ounce	$	2.40		$	15.00					$	8.88

50

In thousands (except per ounce amounts)

Nine Months Ended September 30, 2020

Casa Berardi

Nevada
Operations

Total Gold

Cost of sales and other direct production costs and depreciation, depletion and amortization ⁽⁷⁾
$ 140,893 $ 44,348 $ 185,241
Depreciation, depletion and amortization ⁽⁷⁾
(44,314 ) (22,725 ) (67,039 )
Treatment costs
1,693 45 1,738
Change in product inventory
1,751 15,869 17,620
Reclamation and other costs ⁽⁸⁾
(637 ) (978 ) (1,615 )
Exclusion of Nevada cash costs
— (13,178 ) (13,178 )
Cash Cost, Before By-product Credits ⁽¹⁾
99,386 23,381 122,767
Reclamation and other costs
287 654 941
Sustaining exploration
1,493 — 1,493
Sustaining capital
24,413 1,600 26,013
AISC, Before By-product Credits ⁽¹⁾
125,579 25,635 151,214
By-product credits:

Silver
(285 ) (635 ) (920 )
Total By-product credits
(285 ) (635 ) (920 )
Cash Cost, After By-product Credits
$ 99,101 $ 22,746 $ 121,847
AISC, After By-product Credits
$ 125,294 $ 25,000 $ 150,294
Divided by ounces produced
84 32 116
Cash Cost, Before By-product Credits, per Ounce
$ 1,184 $ 736 $ 1,061
By-product credits per ounce
(3 ) (20 ) (8 )
Cash Cost, After By-product Credits, per Ounce
$ 1,181 $ 716 $ 1,053
AISC, Before By-product Credits, per Ounce
$ 1,496 $ 807 $ 1,307
By-product credits per ounce
(3 ) (20 ) (8 )
AISC, After By-product Credits, per Ounce
$ 1,493 $ 787 $ 1,299

58

Table of Contents


In thousands (except per ounce amounts)	Nine Months Ended September 30, 2021
	Casa Berardi			Nevada Operations			Total Gold
Total cost of sales	$	172,760		$	46,832		$	219,592
Depreciation, depletion and amortization		(61,159	)		(15,021	)		(76,180	)
Treatment costs		1,723			1,731			3,454
Change in product inventory		(2,401	)		(9,951	)		(12,352	)
Reclamation and other costs		(632	)		299			(333	)

Cash Cost, Before By-product Credits (1)		110,291			23,890			134,181
Reclamation and other costs		632			681			1,313
Sustaining exploration		3,551			—			3,551
Sustaining capital		21,030			195			21,225

AISC, Before By-product Credits (1)		135,504			24,766			160,270
By-product credits:
Silver		(656	)		(1,131	)		(1,787	)

Total By-product credits		(656	)		(1,131	)		(1,787	)

Cash Cost, After By-product Credits	$	109,635		$	22,759		$	132,394

AISC, After By-product Credits	$	134,848		$	23,635		$	158,483

Divided by ounces produced		97			20			117
Cash Cost, Before By-product Credits, per Ounce	$	1,134		$	1,180		$	1,142
By-product credits per ounce		(7	)		(56	)		(15	)

Cash Cost, After By-product Credits, per Ounce	$	1,127		$	1,124		$	1,127

AISC, Before By-product Credits, per Ounce	$	1,394		$	1,223		$	1,364
By-product credits per ounce		(7	)		(56	)		(15	)

AISC, After By-product Credits, per Ounce	$	1,387		$	1,167		$	1,349

51

In thousands (except per ounce amounts)

Nine Months Ended September 30, 2020

Total
Silver

Total Gold

Total

Cost of sales and other direct production costs and depreciation, depletion and amortization ⁽⁷⁾
$ 207,554 185,241 $ 392,795
Depreciation, depletion and amortization ⁽⁷⁾
(45,453 ) (67,039 ) (112,492 )
Treatment costs
66,251 1,738 67,989
Change in product inventory
3,237 17,620 20,857
Reclamation and other costs ⁽⁸⁾
(1,528 ) (1,615 ) (3,143 )
Exclusion of cash costs
(38,944 ) (13,178 ) (52,122 )
Cash Cost, Before By-product Credits ⁽¹⁾
191,117 122,767 313,884
Reclamation and other costs
2,707 941 3,648
Sustaining exploration
1,736 1,493 3,229
Sustaining capital
18,613 26,013 44,626
General and administrative ⁽⁸⁾
26,263 — 26,263
AISC, Before By-product Credits ⁽¹⁾
240,436 151,214 391,650
By-product credits:

Zinc
(59,711 ) — (59,711 )
Gold
(68,252 ) — (68,252 )
Lead
(22,208 ) — (22,208 )
Silver
— (920 ) (920 )
Total By-product credits
(150,171 ) (920 ) (151,091 )
Cash Cost, After By-product Credits
$ 40,946 $ 121,847 $ 162,793
AISC, After By-product Credits
$ 90,265 $ 150,294 $ 240,559
Divided by ounces produced
8,936 116
Cash Cost, Before By-product Credits, per Ounce
$ 21.39 $ 1,061
By-product credits per ounce (16.81 ) (8 )
Cash Cost, After By-product Credits, per Ounce $ 4.58 $ 1,053
AISC, Before By-product Credits, per Ounce $ 26.90 $ 1,307
By-product credits per ounce
(16.81 ) (8 )
AISC, After By-product Credits, per Ounce
$ 10.09 $ 1,299

Table of Contents


In thousands (except per ounce amounts)	Nine Months Ended September 30, 2021
	Total Silver			Total Gold			Total
Total cost of sales	$	238,243		$	219,592			457,835
Depreciation, depletion and amortization		(62,738	)		(76,180	)		(138,918	)
Treatment costs		40,531			3,454			43,985
Change in product inventory		(1,913	)		(12,352	)		(14,265	)
Reclamation and other costs		(2,712	)		(333	)		(3,045	)

Cash Cost, Before By-product Credits (1)		211,411			134,181			345,592
Reclamation and other costs		3,335			1,313			4,648
Sustaining exploration		5,254			3,551			8,805
Sustaining capital		36,563			21,225			57,788
General and administrative		27,985			—			27,985

AISC, Before By-product Credits (1)		284,548			160,270			444,818
By-product credits:
Zinc		(89,028	)		—			(89,028	)
Gold		(56,299	)		—			(56,299	)
Lead		(54,027	)		—			(54,027	)
Silver		—			(1,787	)		(1,787	)

Total By-product credits		(199,354	)		(1,787	)		(201,141	)

Cash Cost, After By-product Credits	$	12,057		$	132,394		$	144,451

AISC, After By-product Credits	$	85,194		$	158,483		$	243,677

Divided by ounces produced		9,590			117
Cash Cost, Before By-product Credits, per Ounce	$	22.05		$	1,142
By-product credits per ounce		(20.79	)		(15	)

Cash Cost, After By-product Credits, per Ounce	$	1.26		$	1,127

AISC, Before By-product Credits, per Ounce	$	29.67		$	1,364
By-product credits per ounce		(20.79	)		(15	)

AISC, After By-product Credits, per Ounce	$	8.88		$	1,349

(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 was 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 $5.4 million, along with $6.3 million in non-cash depreciation expense, in the first nine months 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.~~

59

~~Table of Contents~~

~~(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 $2.0 million for the first nine months 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.

~~(4)~~

~~AISC, Before By-product~~ Credits for our consolidated silver properties includes corporate costs for general and administrative expense, exploration and sustaining capital.

~~(5)~~

In late March 2020, the Government of Quebec ordered the mining industry to reduce to minimum operations as part of the fight against the COVID-19 virus, causing us to suspend our Casa Berardi operations from approximately March 24 until April 15, when limited mining operations resumed, resulting in reduced mill throughput. Suspension-related costs totaling $1.6 million for the first nine months of 2020 are reported in a separate line item on our consolidated statements of operations and excluded from the calculations of cost of sales and other direct production costs and depreciation, depletion and amortization, Cash Cost, Before By-product Credits, Cash Cost, After By-product Credits, AISC, Before By-product Credits, and AISC, After By-product Credits.

~~(6)~~

Production was suspended at the Hollister and Midas mines and Aurora mill in the latter part of 2019. Suspension-related costs at Nevada Operations totaling $15.0 million and $9.6 million for the first nine months 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.

~~(7)~~

~~See~~ ~~Note 2~~ of ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~ ~~for information on revisions to amounts previously reported for cost of sales and other direct production costs and depreciation, depletion and amortization.~~

~~(8)~~

Excludes the discretionary portion of general and administrative costs for Greens Creek, Casa Berardi and corporate of $0.4 million, $0.4 million and $1.4 million, respectively, for the third quarter and first nine months of 2020.

Financial Liquidity and Capital Resources

We have a disciplined cash management strategy of maintaining financial flexibility to execute our capital priorities and provide long-term value to our ~~shareholders.~~stockholders. Consistent with that strategy, we aim to maintain ~~an acceptable level of net debt and~~ sufficient liquidity to fund debt service costs, operations, capital development and exploration projects, while returning cash to stockholders through dividends and potential share repurchases.

At September 30, ~~2021,~~2022, we had ~~$190.9~~$144.7 million in cash and cash equivalents, of which ~~$15.3~~$30.8 million was held in foreign ~~subsidiaries'~~subsidiaries’ local currency that we anticipate utilizing for near-term operating, exploration or capital costs by those foreign subsidiaries. We also have USD cash and cash equivalent balances held by our foreign subsidiaries that, if repatriated,

52

Table of Contents

may be subject to withholding taxes. We expect that there would be no additional tax burden upon repatriation after considering the cash cost associated with the withholding taxes. We believe that our liquidity and capital resources from our U.S. operations are adequate to fund our U.S. operations and corporate activities.

~~Our liquid assets include (in millions):~~

September 30,
2021

December 31,
2020

Cash and cash equivalents held in U.S. dollars
$ 175.6 $ 116.4
Cash and cash equivalents held in foreign currency
15.3 13.4
Total cash and cash equivalents
190.9 129.8
Marketable equity securities - current and non-current
8.0 19.3
Total cash, cash equivalents and investments
$ 198.9 $ 149.1

~~Cash and cash equivalents increased by $61.1 million~~

As discussed in the first nine months of 2021. Cash held in foreign currencies represents balances in Canadian dollars and Mexican pesos, with the $1.9 million increase in the first nine months of 2021 resulting from increases in CAD held. The value of marketable equity securities decreased by $11.3 million.

60Overview

~~Table of Contents~~

~~On February 19, 2020,~~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 on 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 amount, 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 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 September 30, 2021, with the exception of $21.0 million utilized for letters of credit. See ~~Note 8~~ of ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~ ~~for more information on our debt arrangements.~~

We continue to address the

COVID-19

outbreak and face uncertainty related to the potential additional impacts it could have on our operations. It is possible that future restrictions at any of our operations could have a material adverse impact on operations or financial results beyond 2021. We have taken precautionary measures to mitigate the impact of COVID-19, including implementing revised operational plans. COVID-19 and these revised plans have had negative impacts on operations and financial results, including the impact of manpower challenges on mine sequencing at Greens Creek, resulting in lower grade material mined during the third quarter of 2021, with higher grade production being deferred to future periods. COVID-19 and the revised operational practices, as long as they are required, could continue to have an adverse impact on our operating results due to deferred production and revenues or additional costs. The impacts of

COVID-19

and 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 in

Note 712

of~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~ ~~and~~ ~~Note 10~~ of

Notes to Consolidated Financial Statements

in our ~~2020~~2021 Form

10-K,

our ~~Board~~board of ~~Directors~~directors declared and paid dividends on our common stock totaling ~~$16.8~~$3.4 million in each of the first, second and third quarters of 2022 and $4.7 million, $6.0 million and $6.0 million in the ~~first nine months~~comparable periods of 2021, ~~and $4.0 million in the first nine months of 2020.~~respectively. Our dividend policy has a silver-linked component which ties the amount of declared common stock dividends to our realized silver price for the preceding quarter. Another component of our common stock dividend policy anticipates paying an annual minimum dividend. In each of May and September 2021, our Board of Directors approved an increase in our silver-linked dividend policy by 1 cent per year, and in September 2021 also approved a reduction in the minimum realized silver price threshold to $20 from $25 per ounce. We realized silver prices of $25.66, $27.14 and $23.97 in the first, second and third quarters of 2021, respectively, thus satisfying the criterion for the silver-linked dividend component of our common stock dividend policy. As a result, on May 5, 2021 and August 4, 2021, our Board of Directors declared quarterly cash dividends of 1.125 cents per share of common stock, consisting of 0.375 cent per share for the minimum dividend component and 0.75 cent per share for the silver-linked dividend component of our dividend policy, and on November 3, 2021, declared a quarterly cash dividend of 0.625 cent per share of common stock, consisting of 0.375 cent per share for the minimum dividend component and 0.25 cent per share for the silver-linked dividend component of our dividend policy. In total, dividends of $6.0 million were paid in each of June and September 2021, and $3.4 million in dividends is expected to be paid in December 2021.

For illustrative purposes only, the table below summarizes potential dividend amounts under our dividend policy.


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

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~~Table of Contents~~

Quarterly Average
Realized Silver
Price ($ per
ounce)

Quarterly Silver-
Linked Dividend
(cents per share)

Annualized Silver-
Linked Dividend
(cents per share)

Annualized
Minimum
Dividend
(cents per
share)

Annualized
Dividends per
Share: Silver-
Linked and
Minimum (cents
per share)

$20 0.25 1 1.5 2.5
$25 1 4 1.5 5.5
$30 1.5 6 1.5 7.5
$35 2.5 10 1.5 11.5
$40 3.5 14 1.5 15.5
$45 4.5 18 1.5 19.5
$50 5.5 22 1.5 23.5

The declaration and payment of dividends on our common stock is at the sole discretion of our board of directors, and there can be no assurance that we will continue to declare and pay common stock dividends in the future.

Pursuant to our stock repurchase program described in

Note 1012

of

Notes to Consolidated Financial Statements

in our ~~2020~~2021 Form

10-K,

we are authorized to repurchase up to 20 million shares of our outstanding common stock from time to time in open market or privately negotiated transactions, depending on prevailing market conditions and other factors. The repurchase program may be modified, suspended or discontinued by us at any time. Whether or not we engage in repurchases from time to time may depend on a variety of factors, including not only price and cash resources, but customary

black-out

restrictions, whether we have any material inside information, limitations on share repurchases or cash usage that may be imposed by our credit agreement or in connection with issuances of securities, alternative uses for cash, applicable law, and other investment opportunities from time to time. As of September 30, ~~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 November ~~2, 2021,~~4, 2022, was ~~$5.87~~$4.76 per share.

~~Pursuant~~

As discussed in

Note 6

of

Notes to Condensed Consolidated Financial Statements (Unaudited)

, pursuant to an equity distribution agreement dated February 18, 2021, we may offer and sell up to 60 million shares of our common stock from time to time to or through sales agents in ~~“at-the-market”~~

“at-the-market”

(ATM) offerings. Sales of the shares, if any, will be made by means of ordinary brokers transactions or as otherwise agreed between the Company and the agents as principals. Whether or not we engage in sales from time to time may depend on a variety of factors, including share price, our cash resources, customary

black-out

restrictions, and whether we have any material inside information. The agreement can be terminated by us at any time. Any sales of 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

As of September 30, 2022, we had sold 1,176,861 shares ~~have been sold~~ under the agreement asfor proceeds of $4.5 million, net of commissions and fees of approximately $0.1 million. All of the sales occurred during September ~~30, 2021.~~

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

2022.

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Table of Contents

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 ofunder our ~~revolving credit facility,~~New Credit Agreement, we believe we will be able to meet our obligations and other potential cash requirements during the next 12 months from the date of this report. Our obligations and other uses of cash may include, but are not limited to: debt service obligations related to the Senior Notes and IQ Notes; principal and interest payments under our ~~revolving credit facility;~~New Credit Agreement; deferral of revenues,

care-and-maintenance

and other costs related to addressing the impacts of

COVID-19

on our operations; capital expenditures at our operations; 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 a ~~total~~range of approximately ~~$120~~$150 to 165 million will be spent in ~~2021~~2022 on capital expenditures, primarily for equipment, infrastructure, and development at our mines, including ~~$75.2~~$93.2 million already incurred as of September 30, ~~2021 and excluding $9.1 million for the acquisition of royalty interests and land at our operations.~~2022, before any lease financing. We also estimate exploration and

pre-development

expenditures will total approximately ~~$48.5~~$45.0 million in ~~2021,~~2022, including ~~$35.0~~$39.1 million already incurred as of September 30, ~~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.

Nine Months Ended

September 30, 2021

September 30, 2020

Cash provided by operating activities (in millions)
$ 167.0 $ 115.9

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.

Our liquid assets include (in millions):


	September 30, 2022		December 31, 2021
Cash and cash equivalents held in U.S. dollars	$	113.9	$	196.2
Cash and cash equivalents held in foreign currency		30.8		13.8

Total cash and cash equivalents		144.7		210.0
Marketable equity securities – non-current		13.3		14.4

Total cash, cash equivalents and investments	$	158.0	$	224.4

Cash and cash equivalents decreased by $65.3 million in the first nine months of 2022. Cash held in foreign currencies represents balances in Canadian dollars and Mexican Pesos (“MXN”), with the $17.0 million increase in the first nine months of 2022 resulting from increases in CAD held following the Alexco acquisition. The value of

non-current

marketable equity securities decreased by $1.1 million.


	Nine Months Ended
	September 30, 2022		September 30, 2021
Cash provided by operating activities (in millions)	$	53.8	$	167.0

Cash provided by operating activities in the first nine months of 2022 of $53.8 million represented a $113.2 million decrease compared to the $167.0 million provided by operating activities in the first nine months of 2021. $93.2 million of the variance was the result of a net loss compared to a net income in 2021, ~~increased by $51.1~~as adjusted for

non-cash

items. Net working capital changes in 2022 resulted in an outflow of $11.0 million versus an inflow of $8.9 million in 2021 reflecting an increase in inventory balances in 2022 due to the deferral of a shipment from Greens Creek to the fourth quarter of 2022 and an inventory build at Lucky Friday, changes in fair value of the net hedge book and collections of accounts receivable balances.


	Nine Months Ended
	September 30, 2022			September 30, 2021
Cash used in investing activities (in millions)	$	(127.7	)	$	(78.0	)

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Table of Contents

During the first nine months of 2022, we invested $93.2 million in capital expenditures, excluding $9.7 million in

non-cash

finance lease additions, an increase of $13.0 million compared to the same period in ~~2020 due to higher net income, as adjusted for non-cash items, and lower product inventory, partially offset by lower accounts payable and accruals for incentive compensation.~~

Nine Months Ended

September 30, 2021

September 30, 2020

Cash used in investing activities (in millions)
$ (78.0 ) $ (55.7 )

During the first nine months of 2021, we invested $80.2 million in capital expenditures, including $9.1 million for acquisition of royalty interests and land at our operations and excluding $4.0 million in non-cash capital lease additions, an increase of $25.8 million compared to the same period in 2020.2021. The variance was primarily due to increased spending at Lucky Friday and Greens Creek partially offset by lower spending at Casa ~~Berardi and Lucky Friday. We recognized proceeds from~~Berardi. As a result of the ~~exchange~~Alexco acquisition, we assumed a cash balance of ~~investments in~~$9.0 million, net of transaction costs of $5.1 million having advanced $25.0 million to Alexco

pre-acquisition,

to enable them to fund development of the ~~first nine months of 2021 and purchased marketable equity securities having a cost basis of $1.7 million during~~Keno Hill mining district prior to the ~~first nine months of 2020.~~

Nine Months Ended

September 30, 2021

September 30, 2020

Cash used in financing activities (in millions)
$ (27.4 ) $ (22.0 )

In the first nine months of 2020, we received $469.5 million and $27.6 million in net proceeds from the issuance of our Senior Notes and IQ Notes, respectively, drew $210.0 million on our revolving credit facility, and had debt repayments of $506.5 million for redemption of our 2021 Notes and $210.0 million for our revolving credit facility. We had no borrowings or repayments of debt during the first nine months of 2021.acquisition closing. During the first nine months of ~~2021~~2022, we acquired investments in other mining companies and ~~2020,~~short term investments for a total of $30.5 million, and disposed of the short-term investments and a mining company investment, generating total proceeds of $9.4 million.


	Nine Months Ended
	September 30, 2022		September 30, 2021
Cash provided by (used in) financing activities (in millions)	$	9.5	$	(27.4	)

During the first nine months of 2022 and 2021, we paid cash dividends on our common and preferred stock totaling ~~$16.8~~$10.5 million and ~~$4.0~~$17.2 million, ~~respectively, and cash dividends of $0.4 million on our Series B Preferred Stock in each of those periods, with the increase in common dividends resulting from higher~~respectively. Due to lower realized silver prices ~~and amendments~~during 2022 to date, the dividends paid on our common stock were $6.8 million lower than in the prior year, reflecting our dividend policy discussed above. We issued stock under our ATM program described above for net proceeds of $4.5 million in 2022. We made repayments on our ~~capital~~finance leases of ~~$5.6~~$5.2 million and ~~$4.2~~$5.6 million in the nine-month periods ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively. We acquired treasury shares for ~~$4.5~~$3.7 million and ~~$2.7~~$4.5 million in the first ~~nine months~~half of ~~2021~~2022 and ~~2020,~~2021, respectively, as a result of ~~employees'~~employees’ elections to utilize net share settlement to satisfy their tax withholding obligations related to incentive compensation paid in ~~stock and vesting of restricted stock units.~~

stock.

63

~~Table of Contents~~

The effect of changes in foreign exchange rates resulted in a ~~$0.5~~$0.8 million decrease in cash and cash equivalents in the first nine months of ~~2021~~2022 compared to a decrease of ~~$1.9~~$0.5 million ~~in the first nine months~~ of ~~2020,~~2021, with the variance due to ~~strengthening~~depreciation of the CAD and MXN relative to the USD in ~~2021.~~

the 2022 period.

Contractual Obligations, Contingent Liabilities and Commitments

The table below presents our fixed,

non-cancelable

contractual obligations and commitments primarily related to our Senior Notes, IQ Notes, ~~revolving~~ credit facility, outstanding purchase orders, certain capital expenditures and lease arrangements as of September 30, ~~2021~~2022 (in thousands):

Payments Due By Period

Less than 1
year

1-3 years

3-5 years

More than
5 years

Total

Purchase obligations ⁽¹⁾
$ 19,291 $ — $ — $ — $ 19,291
Contractual obligations ⁽²⁾
664 — — — 664
Finance lease commitments ⁽³⁾
6,336 7,903 855 — 15,094
Operating lease commitments ⁽⁴⁾
3,166 3,627 1,057 1,953 9,803
Supplemental executive retirement plan ⁽⁵⁾
759 1,789 2,833 6,249 11,630
Revolving credit facility ⁽⁶⁾
1,717 612 — — 2,329
Senior Notes ⁽⁷⁾
34,438 68,876 68,876 522,349 694,539
IQ Notes ⁽⁸⁾
2,467 4,934 39,768 — 47,169
Total contractual cash obligations
$ 68,838 $ 87,741 $ 113,389 $ 530,551 $ 800,519


	Payments Due By Period
	Less than 1 year		1-3 years		4-5 years		More than 5 years		Total
Purchase obligations (1)	$	33,514	$	—	$	—	$	—	$	33,514
Credit facility (2)		25,722		1,447		583		—		27,752
Finance lease commitments (3)		9,296		10,985		2,017		—		22,298
Operating lease commitments (4)		3,101		2,630		2,039		5,878		13,648
Senior Notes (5)		34,438		68,876		68,876		487,914		660,104
IQ Notes (6)		2,293		39,257		—		—		41,550

Total contractual cash obligations	$	108,364	$	123,195	$	73,515	$	493,792	$	798,866

(1)

~~(1)~~

Consists of open purchase orders and commitments of approximately ~~$5.5~~$9.0 million at ~~the~~ Greens Creek, ~~unit, $8.5~~$1.2 million at ~~the~~Casa Berardi, $20.4 million at Lucky Friday, ~~unit, $0.5 million at the Casa Berardi unit and $4.7~~$2.6 million at the Nevada Operations ~~unit.~~

and $0.3 at Keno Hill.

(2)

~~(2)~~

As

The New Credit Agreement provides for a $150 million revolving credit facility, under which $25 million was drawn as of September 30, ~~2021, we were committed~~2022 and repaid October 4, 2022. We had $7.8 million in letters of credit outstanding as of September 30, 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 ~~approximately $0.7 million for various items at Greens Creek.~~

Condensed Consolidated Financial Statements (Unaudited)

.

(3)

~~(3)~~

Includes scheduled finance lease payments of ~~$14.1~~$14.2 million, ~~$0.9~~$3.4 million, ~~and $0.1~~$1.4 million, $0.049 million (including interest), and $3.3 million, respectively, for equipment at our Greens Creek, Lucky Friday, Casa Berardi, ~~and~~ Nevada Operations ~~units. These leases have fixed payment terms~~ and ~~contain bargain purchase options at the end of the lease periods (see~~ ~~Note 8~~ of ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~ ~~for more information).~~

Keno Hill.

55

Table of Contents

(4)

~~(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.

(5)

~~(5)~~

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 September 30, 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 5~~ of ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~ ~~for more information.~~

~~(6)~~

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. We had $21.0 million in letters of credit outstanding as of September 30, 2021. 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 8~~ of ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~.

64

~~Table of Contents~~

~~(7)~~

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.~~year. See

Note 8 7

of

Notes to Condensed Consolidated Financial Statements (Unaudited)

for more information.

(6)

~~(8)~~

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

Note 8 7

of

Notes to Condensed Consolidated Financial Statements (Unaudited)

for more information.

We record liabilities for costs associated with mine closure, reclamation of land and other environmental matters. At September 30, ~~2021,~~2022, our liabilities for these matters totaled ~~$119.7~~$116.3 million. Future expenditures related to closure, reclamation and environmental expenditures at our sites are difficult to estimate, although we anticipate we will incur expenditures relating to these obligations over the next 30 years. For additional information relating to our environmental obligations, see

Note 1110

of

Notes to Condensed Consolidated Financial Statements (Unaudited)

.

Critical Accounting Estimates

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 Form
10-K.

Off-Balance

Sheet Arrangements

At September 30, ~~2021,~~2022, 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 are material to investors.

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 8 7

of

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;~~Inc.; and Hecla Quebec, 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.

65

~~Table of Contents~~

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.

•

~~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.

56

Table of Contents

Investments in subsidiaries

. The acquisition of a company results in an investment in debt or equity capital on the records of the parent company and a contribution to debt or equity capital on the records of the subsidiary. Such investments and capital contributions are eliminated in consolidation.

Capital contributions

. Certain of Hecla’s subsidiaries do not generate cash flow, either at all or that is sufficient to meet their capital needs, and their cash requirements are routinely met with inter-company advances from their parent companies. Generally on an annual basis, when not otherwise intended as debt, the boards of directors of such parent companies declare contributions of capital to their subsidiary companies, which increase the parents’ investment and the subsidiaries’ additional

paid-in

capital. In consolidation, investments in subsidiaries and related additional

paid-in

capital are eliminated.

Debt.

At times, inter-company debt agreements have been established between certain of Hecla’s subsidiaries and their parents. The related debt liability and receivable balances, accrued interest expense (if any) and income activity (if any), and payments of principal and accrued interest amounts (if any) by the subsidiary companies to their parents are eliminated in consolidation.

Dividends.

Certain of Hecla’s subsidiaries which generate cash flow routinely provide cash to their parent companies through inter-company transfers. On at least an annual basis, the boards of directors of such subsidiary companies declare dividends to their parent companies, which reduces the subsidiaries’ retained earnings and increases the parents’ dividend income. In consolidation, such activity is eliminated.

Deferred taxes

. Our ability to realize deferred tax assets and liabilities is considered for two consolidated tax groups of subsidiaries within the United States: The Nevada U.S. Group and the Hecla U.S. Group. Within each tax group, all subsidiaries’ estimated future taxable income contributes to the ability of their tax group to realize all such assets and liabilities. However, when Hecla’s subsidiaries are viewed independently, we use the separate return method to assess the realizability of each subsidiary’s deferred tax assets and whether a valuation allowance is required against such deferred tax assets. In some instances, a parent company or subsidiary may possess deferred tax assets whose realization depends on the future taxable incomes of other subsidiaries on a consolidated-return basis, but would not be considered realizable if such parent or subsidiary filed on a separate stand-alone basis. In such a situation, a valuation allowance is assessed on that subsidiary’s deferred tax assets, with the resulting adjustment reported in the eliminations column of the guarantor and parent’s financial statements, as is the case in the unaudited interim financial statements set forth below. The separate return method can result in significant eliminations of deferred tax assets and liabilities and related income tax provisions and benefits.

Non-current

deferred tax asset balances are included in other

non-current

assets on the consolidating balance sheets and make up a large portion of that item, particularly for the guarantor balances.

Separate financial statements of the 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.

6657

Table of Contents

Unaudited Interim Condensed Consolidating Balance Sheets

As of September 30, 2021

Parent

Guarantors

Non-
Guarantors

Eliminations

Consolidated

(in thousands)

Assets

Cash and cash equivalents
$ 138,350 $ 29,737 $ 22,817 $ — $ 190,904
Other current assets
6,616 111,247 1,513 — 119,376
Properties, plants, equipment and mineral interests - net
1,913 2,320,850 8,255 — 2,331,018
Intercompany receivable (payable)
(458,892 ) 443,348 274,212 (258,668 ) —
Investments in subsidiaries
2,589,521 — — (2,589,521 ) —
Other non-current assets
305,478 19,943 (122,676 ) (169,626 ) 33,119
Total assets
$ 2,582,986 $ 2,925,125 $ 184,121 $ (3,017,815 ) $ 2,674,417
Liabilities and Shareholders' Equity

Current liabilities
$ 291,220 $ 227,627 $ 1,881 $ (394,546 ) $ 126,182
Long-term debt
507,712 14,228 132 — 522,072
Non-current portion of accrued reclamation
— 103,400 5,270 — 108,670
Non-current deferred tax liability
15,808 160,690 — (33,748 ) 142,750
Other non-current liabilities
25,271 5,793 704 — 31,768
Shareholders' equity
1,742,975 2,413,387 176,134 (2,589,521 ) 1,742,975
Total liabilities and shareholders' equity
$ 2,582,986 $ 2,925,125 $ 184,121 $ (3,017,815 ) $ 2,674,417


	As of September 30, 2022
	Parent			Guarantors			Non- Guarantors		Eliminations			Consolidated

	(in thousands)
Assets
Cash and cash equivalents	$	100,333		$	24,486		$	19,850	$	—		$	144,669
Other current assets		11,939			118,657			8,655		—			139,251
Properties, plants, equipment and mineral interests, net		1,913			2,288,145			263,916					2,553,974
Intercompany receivable (payable)		(195,180	)		(188,353	)		321,214		62,319			—
Investments in subsidiaries		2,110,836			—			—		(2,110,836	)		—
Other non-current assets		378,230			29,860			32,545		(343,900	)		96,735

Total assets	$	2,408,071		$	2,272,795		$	646,180	$	(2,392,417	)	$	2,934,629

Liabilities and Stockholders’ Equity
Current liabilities	$	(105,320	)	$	246,660		$	12,561	$	7,484		$	161,385
Long-term debt		530,745			20,242			—		—			550,987
Non-current portion of accrued reclamation		—			99,888			5,829		—			105,717
Non-current deferred tax liability		22,098			408,148			13,043		(289,064	)		154,225
Other non-current liabilities		5,780			1,076			691		—			7,547
Stockholders’ equity		1,954,768			1,496,781			614,056		(2,110,837	)		1,954,768

Total liabilities and stockholders’ equity	$	2,408,071		$	2,272,795		$	646,180	$	(2,392,417	)	$	2,934,629

Unaudited Interim Condensed Consolidating Statements of Operations

Three Months Ended September 30, 2021

Parent

Guarantors

Non-
Guarantors

Eliminations

Consolidated

(in thousands)

Revenues
$ 4,950 $ 188,607 $ 3 $ — $ 193,560
Cost of sales
1,481 (114,022 ) (1 ) — (112,542 )
Depreciation, depletion, amortization
— (45,790 ) — — (45,790 )
General and administrative
(3,334 ) (5,077 ) (463 ) — (8,874 )
Exploration and pre-development
— (14,651 ) (2,457 ) — (17,108 )
Loss on derivative contracts
12,148 — — — 12,148
Equity in earnings of subsidiaries
(13,806 ) — — 13,806 —
Other (expense) income
(7,028 ) (3,619 ) (9,324 ) (6,935 ) (26,906 )
Income (loss) before income taxes
(5,589 ) 5,448 (12,242 ) 6,871 (5,512 )
(Provision) benefit from income taxes
4,610 (8,504 ) 1,492 6,935 4,533
Net income (loss)
(979 ) (3,056 ) (10,750 ) 13,806 (979 )
Preferred stock dividends
(138 ) — — — (138 )
Income (loss) applicable to common shareholders
(1,117 ) (3,056 ) (10,750 ) 13,806 (1,117 )
Net income (loss)
(979 ) (3,056 ) (10,750 ) 13,806 (979 )
Changes in comprehensive income (loss)
(6,267 ) — — — (6,267 )
Comprehensive income (loss)
$ (7,246 ) $ (3,056 ) $ (10,750 ) $ 13,806 $ (7,246 )

67


	Three Months Ended September 30, 2022
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated

	(in thousands)
Revenues	$	1,640		$	144,634		$	65		$	—		$	146,339
Cost of sales		204			(105,031	)		(73	)		—			(104,900	)
Depreciation, depletion, amortization		—			(32,992	)		—			—			(32,992	)
General and administrative		(3,792	)		(5,664	)		(1,547	)		—			(11,003	)
Exploration and pre-development		(292	)		(13,143	)		(1,693	)		—			(15,128	)
Equity in earnings of subsidiaries		2,871			—			—			(2,871	)		—
Other (expense) income		(32,300	)		12,289			(4,398	)		9,040			(15,369	)

Income (loss) before income taxes		(31,669	)		93			(7,646	)		6,169			(33,053	)
(Provision) benefit from income taxes		8,142			10,424			—			(9,039	)		9,527

Net income (loss)		(23,527	)		10,517			(7,646	)		(2,870	)		(23,526	)
Preferred stock dividends		(138	)		—			—			—			(138	)

Income (loss) applicable to common stockholders	$	(23,665	)	$	10,517		$	(7,646	)	$	(2,870	)	$	(23,664	)

Net income (loss)		(23,527	)		10,517			(7,646	)		(2,870	)		(23,526	)
Changes in comprehensive income (loss)		(12,692	)		—			—			—			(12,692	)

Comprehensive income (loss)	$	(36,219	)	$	10,517		$	(7,646	)	$	(2,870	)	$	(36,218	)

58

Table of Contents


	Nine Months Ended September 30, 2022
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated

	(in thousands)
Revenues	$	8,193		$	515,822		$	65		$	—		$	524,080
Cost of sales		2,000			(328,506	)		(73	)		—			(326,579	)
Depreciation, depletion, amortization		—			(106,362	)		—			—			(106,362	)
General and administrative		(12,682	)		(14,464	)		(1,843	)		—			(28,989	)
Exploration and pre-development		(586	)		(32,489	)		(6,061	)		—			(39,136	)
Equity in earnings of subsidiaries		(5,476	)		—			—			5,476			—
Other expense		(25,483	)		(13,577	)		(11,653	)		(8,839	)		(59,552	)

Income (loss) before income taxes		(34,034	)		20,424			(19,565	)		(3,363	)		(36,538	)
(Provision) benefit from income taxes		1,137			(6,345	)		11			8,839			3,642

Net income (loss)		(32,897	)		14,079			(19,554	)		5,476			(32,896	)
Preferred stock dividends		(414	)		—			—			—			(414	)

Income (loss) applicable to common stockholders	$	(33,311	)	$	14,079		$	(19,554	)	$	5,476		$	(33,310	)

Net income (loss)		(32,897	)		14,079			(19,554	)		5,476			(32,896	)
Changes in comprehensive income (loss)		19,491			—			—			—			19,491

Comprehensive income (loss)	$	(13,406	)	$	14,079		$	(19,554	)	$	5,476		$	(13,405	)

59

Nine Months Ended September 30, 2021

Parent

Guarantors

Non-
Guarantors

Eliminations

Consolidated

(in thousands)

Revenues
$ 4,477 $ 617,742 $ 176 $ — $ 622,395
Cost of sales
3,452 (322,260 ) (109 ) — (318,917 )
Depreciation, depletion, amortization
— (138,918 ) — — (138,918 )
General and administrative
(13,083 ) (14,324 ) (578 ) — (27,985 )
Exploration and pre-development
(14 ) (30,770 ) (4,255 ) — (35,039 )
Loss on derivative contracts
(4,692 ) — — — (4,692 )
Equity in earnings of subsidiaries
20,057 — — (20,057 ) —
Other (expense) income
11,779 (42,867 ) (15,513 ) (30,947 ) (77,548 )
Income (loss) before income taxes
21,976 68,603 (20,279 ) (51,004 ) 19,296
(Provision) benefit from income taxes
1,244 (30,410 ) 2,143 30,947 3,924
Net income (loss)
23,220 38,193 (18,136 ) (20,057 ) 23,220
Preferred stock dividends
(414 ) — — — (414 )
Income (loss) applicable to common shareholders
22,806 38,193 (18,136 ) (20,057 ) 22,806
Net income (loss)
23,220 38,193 (18,136 ) (20,057 ) 23,220
Changes in comprehensive income (loss)
(2,815 ) — — — (2,815 )
Comprehensive income (loss)
$ 20,405 $ 38,193 $ (18,136 ) $ (20,057 ) $ 20,405

Table of Contents

Unaudited Interim Condensed Consolidating Statements of Cash Flows

Nine Months Ended September 30, 2021

Parent

Guarantors

Non-Guarantors

Eliminations

Consolidated

(in thousands)

Cash flows from operating activities
$ 513,050 $ 222,828 $ (23,055 ) $ (545,841 ) $ 166,982
Cash flows from investing activities:

Additions to properties, plants, equipment and mineral interests
— (80,207 ) (3 ) (80,210 )
Other investing activities, net
(850,032 ) 2,330 44 849,831 2,173
Cash flows from financing activities:

Dividends paid to shareholders
(17,169 ) — — (17,169 )
Payments on debt
— (5,598 ) — (5,598 )
Other financing activity, net
403,245 (120,578 ) 16,690 (303,990 ) (4,633 )
Effect of exchange rates on cash
— (440 ) (31 ) — (471 )
Changes in cash, cash equivalents and restricted cash and cash equivalents
49,094 18,335 (6,355 ) — 61,074
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
$ 138,350 $ 30,790 $ 22,817 $ — $ 191,957

68

~~Table of Contents~~


	Nine Months Ended September 30, 2022
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated

	(in thousands)
Cash flows from operating activities	$	287,919		$	145,834		$	(153,190	)	$	(226,793	)	$	53,770
Cash flows from investing activities:
Additions to properties, plants, and equipment		—			(90,138	)		(3,099	)		—			(93,237	)
Acquisition, net		8,952						—						8,952
Other investing activities, net		(573,131	)		(1,880	)		(16,525	)		548,130			(43,406	)
Cash flows from financing activities:
Dividends paid to stockholders		(10,549	)		—			—			—			(10,549	)
Issuance of debt		25,000			—			—						25,000
Payments on debt		—			(5,222	)		—			—			(5,222	)
Other financing activity		187,036			(37,653	)		172,302			(321,337	)		348
Effect of exchange rate changes on cash		—			548			(256	)		—			(804	)

Changes in cash, cash equivalents and restricted cash		(74,773	)		10,393			(768	)					(65,148	)
Beginning cash, cash equivalents and restricted cash		175,108			15,135			20,820			—			211,063

Ending cash, cash equivalents and restricted cash	$	100,335		$	25,528		$	20,052		$	—		$	145,915

~~Item 3.~~~~Quantitative and Qualitative Disclosures About Market Risk~~

Item 3.
Quantitative and Qualitative Disclosures About Market Risk

The following discussion about our exposure to market risks and risk management activities includes forward-looking statements that involve risks and uncertainties, as well as summarizes the financial instruments held by us at September 30, ~~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~~

(See

Item 1A. – Risk Factors

of our ~~2020~~2021 Form

10-K).

,

as updated in
Part II. Item 1A – Risk Factors
in our Quarterly Report on Form
10-Q
for the quarter ended June 30, 2022.

Metals Prices

Changes in the market prices of silver, gold, lead and zinc can significantly affect our profitability and cash flow. Metals prices can and often do fluctuate widely and are affected by numerous factors beyond our control (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

September 30, ~~2021,~~2022, metals contained in concentrate sales and exposed to future price changes totaled ~~1.5~~2.235 million ounces of silver, ~~3,902~~1,840 ounces of gold, ~~11,904~~8,500 tons of zinc, and ~~6,096~~6,800 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 ~~$8.3~~$8.2 million. As discussed in

Note 98

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.

60

Table of Contents

Commodity-Price Risk Management

See

Note 98

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 and nine months ended September 30, ~~2021 and 2020,~~2022 we recognized a net foreign exchange ~~gains~~gain of ~~$24 thousand~~$5.7 million and ~~$1.2~~$8.1 million ~~respectively.~~respectively, compared to $4.0 million and $0.02 million, respectively for the comparable periods in 2021. Foreign currency exchange rates are influenced by a number of factors beyond our control. A 10% change in the exchange rate between the USD and CAD from the rate at September 30, ~~2021~~2022 would have resulted in a change of approximately ~~$11.1~~$7.2 million in our net foreign exchange gain or loss. A 10% change in the exchange rate between the USD and MXN from the rate at September 30, ~~2021~~2022 would have resulted in a change of approximately ~~$0.1~~$0.027 million in our net foreign exchange gain or loss. We do not hedge the remeasurement of monetary assets and liabilities. We do hedge some of our operating and capital costs denominated in foreign currency.

See

Note 8

of

69

~~Table of Contents~~

~~See~~ ~~Note 9~~ 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.

~~Item 4.~~~~Controls and Procedures~~

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 September 30, ~~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 September 30, ~~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

~~Item 1.~~~~Legal Proceedings~~

Hecla Mining Company and Subsidiaries

Item 1.

Legal Proceedings

For information concerning ~~certain~~ legal proceedings, refer to

Note 1110

of

Notes to Condensed Consolidated Financial Statements (Unaudited)

, which is incorporated by reference into this Item 1. ~~In addition, Hecla Mining Company’s subsidiary Hecla Limited~~

Item 1A.

Risk Factors

Item 1A. – Risk Factors

of our 2021 Form

10-K

and ~~its subsidiary CoCa Mines Inc. ("CoCa"), and CoCa’s subsidiary Creede Resources, Inc. (collectively, the “Subsidiaries”) settled a lawsuit in Mineral County, Colorado (previously discussed in~~Item 1A. – Risk Factors of Part II of our ~~prior filings, including our quarterly report~~Quarterly Report on Form

10-Q

for ~~the~~our fiscal quarter ended June 30, 2020) involving a claim of breach of contract for failure to indemnify a potentially responsible party for its liability to the United States under CERCLA at a Superfund site in Colorado. In exchange for the payment of $6.45 million, the Subsidiaries were granted a full release with respect to the claims made in the lawsuit, which was dismissed, with prejudice, on September 7, 2021.

~~Item 1A.~~~~Risk Factors~~

~~Item 1A.~~ – ~~Risk Factors~~ ~~of our 2020 Form 10-K sets~~2022 set 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 September 22, 2021, we issued 100,000 unregistered shares of our common stock to the Lucky Friday Pension Plan Trust and 900,000 shares to the Hecla Mining Company Retirement Plan Trust in private placements in order to fund those defined benefit pension plans. 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 November 3, 2021. We did not receive any cash proceeds from the issuance of the shares. The shares had a value of approximately $5.5 million at the time of issuance.

7061

Table of Contents

Item 4.

Mine Safety Disclosures

~~Item 4. Mine Safety Disclosures~~

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation

S-K

is included in exhibit 95 to this Quarterly Report.

Item 6.Exhibits

~~Hecla Mining Company and Wholly Owned Subsidiaries~~

~~Form 10-Q – September 30, 2021~~

~~Index to Exhibits~~

~~3.1~~
		Hecla Mining Company and Wholly Owned Subsidiaries Form 10-Q – September 30, 2022 Index to Exhibits

2.1(a)		~~Bylaws~~Arrangement Agreement dated as of ~~the Registrant, as amended August 21, 2021.~~July 4, 2022, by and among Hecla Mining Company, Hecla Canada Ltd., 1080980 B.C. Ltd. And Alexco Resource Corp. Filed as exhibit ~~3.2~~2.1 to ~~Registrant’s~~our Current Report on Form 8-K filed on ~~August 23, 2021~~July 5, 2022 (File No. 1-8491) and incorporated herein by reference.

~~4.1~~
10.1		~~Registration Rights~~Assignment and Amendment Agreement dated as of ~~September 22, 2021,~~July 25, 2022, among Hecla Mining Company, Alexco Resource Corp., and 1080980 B.C. Ltd. Filed as ~~Issuer,~~exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 (File No. 1-8491) and ~~the~~incorporated herein by reference.

10.2		Credit Agreement dated as of July 21, 2022, by and among Hecla Mining Company, ~~Retirement Plan Trust, which is~~Hecla Limited, Hecla Alaska LLC, Hecla Greens Creek Mining Company, and Hecla Juneau Mining Company, as the ~~funding vehicle~~Borrowers, Bank of America, N.A., as the Administrative Agent for the ~~Hecla Mining Company Retirement Plan, a tax-qualified employee benefit pension plan sponsored~~Lenders, and various Lenders. Filed as exhibit 10.1 to our Current Report on Form 8-K on July 21, 2022 (File No. 1-8491) and incorporated herein by reference.

10.3		Stream Termination Agreement dated as of July 4, 2022, by and between Hecla Mining Company and ~~the Lucky Friday Pension Plan Trust, which is the funding vehicle for the Lucky Friday Pension Plan.~~Wheaton Precious Metals Corp. *

~~10.1~~

Hecla Mining Company 2010 Stock Incentive Plan (Amended and Restated as of August 21, 2021). *

~~10.2~~

31.1

Form of Indemnification Agreement dated July 1, 2021, between Registrant and Kurt Allen, incorporated by reference to exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 (File No. 1-8491). (1)

~~10.3~~

Form of Change in Control Agreement dated July 1, 2021, between Registrant and Kurt Allen, incorporated by reference to exhibit 10.2 to the Company’s Annual Report on Form 10-K for the year-ended December 31, 2015 (File No. 1-8491). (1)

~~31.1~~

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

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

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

~~32.2~~
32.2		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *

~~99.1~~

Contribution Agreement, dated as of September 22, 2021, among Hecla Mining Company, as sponsor of the Hecla Mining Company Retirement Plan, the Retirement Committee, as the named fiduciary of the Hecla Mining Company Retirement Plan, and U.S. Bank National Association, as trustee of the Hecla Mining Company Retirement Plan Trust. *

~~99.2~~

95

Contribution Agreement, dated as of September 22, 2021, among Hecla Mining Company, Hecla Limited as sponsor of the Lucky Friday Pension Plan, the Pension Committee, as the named fiduciary of the Lucky Friday Pension Plan, and U.S. Bank National Association, as trustee of the Hecla Mining Company Retirement Plan Trust. *

71

~~Table of Contents~~

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

~~101.INS~~
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~~
101.SCH		Inline XBRL Taxonomy Extension Schema.**

~~101.CAL~~
101.CAL		Inline XBRL Taxonomy Extension Calculation.**

~~101.DEF~~
101.DEF		Inline XBRL Taxonomy Extension Definition.**

~~101.LAB~~
101.LAB		Inline XBRL Taxonomy Extension Labels.**

~~101.PRE~~
101.PRE		Inline XBRL Taxonomy Extension Presentation.**

~~104~~
104		Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*	Filed herewith.

62

~~(1) Indicates a management contract or compensatory plan or arrangement.~~

* Filed herewith.

Table of Contents

** XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

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

72

63

Table of Contents

SIGNATURES

~~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:		~~(Registrant)~~
November 9, 2022		By:
~~Date:~~	~~November 4, 2021~~	~~By:~~	/s/ Phillips S. Baker, Jr.


				Phillips S. Baker, Jr., President,
				Chief Executive Officer and Director

Date:		November 9, 2022
~~Date:~~ By:	~~November 4, 2021~~	~~By:~~	/s/ Russell D. Lawlar


						Russell D. Lawlar, Senior Vice President,
						Chief Financial Officer ~~and Treasurer~~

7364

			~~Page~~
~~PART I - Financial Information~~
		Page
PART I – Financial Information

Item 1 – Condensed Consolidated Financial Statements (Unaudited)


Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income -– Three Months Ended and Nine Months Ended – September 30, ~~2021~~2022 and ~~2020~~2021	3
			4

Condensed Consolidated Statements of Cash Flows -– Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~2021	4
			5

Condensed Consolidated Balance Sheets -– September 30, ~~2021~~2022 and December 31, ~~2020~~2021	5
			6

Condensed Consolidated Statements of Changes in ~~Stockholders'~~Stockholders’ Equity -– Three Months Ended and Nine Months Ended – September 30, ~~2021~~2022 and ~~2020~~2021	6
			7

Notes to Condensed Consolidated Financial Statements (Unaudited)	8

		~~Forward Looking Statements~~ 9

		Item 2. ~~Management~~’sManagement’s Discussion and Analysis of Financial Condition and Results of Operations	29
			23

Item 3. Quantitative and Qualitative Disclosures About Market Risk	69
			60

Item 4. Controls and Procedures	70

~~PART II - Other Information~~ 61

PART II – Other Information

Item 1 – Legal Proceedings			61
				~~Item 1~~ – ~~Legal Proceedings~~	70
Item 1A – Risk Factors			61
				~~Item 1A~~ – ~~Risk Factors~~	70
Item 4 – Mine Safety Disclosures			62
				~~Item 2~~ – ~~Unregistered Sales of Securities and Use of Proceeds~~	70
Item 6 – Exhibits			62
				~~Item 4~~ – ~~Mine Safety Disclosures~~	71
Signatures
		~~Item 6~~ – ~~Exhibits~~	71
		64

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2021			2020			2021			2020
					Revised						Revised
Current:
Domestic	$	(2,176	)	$	(705	)	$	(7,489	)	$	1,690
Foreign		(1,578	)		(2,286	)		(4,690	)		(6,005	)
Total current income and mining tax provision		(3,754	)		(2,991	)		(12,179	)		(7,695	)

Deferred:
Domestic		3,213			(2,761	)		8,226			(1,108	)
Foreign		5,074			571			7,877			1,380
Total deferred income and mining tax benefit		8,287			(2,190	)		16,103			272
Total income and mining tax benefit (provision)	$	4,533		$	(5,181	)	$	3,924		$	(7,423	)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021

Current:
Domestic	$	253		$	(2,176	)	$	(2,296	)	$	(7,489	)
Foreign		(1,085	)		(1,578	)		(4,172	)		(4,690	)

Total current income and mining tax provision		(832	)		(3,754	)		(6,468	)		(12,179	)
Deferred:
Domestic		8,156			3,213			915			8,226
Foreign		2,203			5,074			9,195			7,877

Total deferred income and mining tax benefit		10,359			8,287			10,110			16,103

Total income and mining tax benefit (provision)	$	9,527		$	4,533		$	3,642		$	3,924

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Service cost	$	1,455		$	1,334		$	4,365		$	4,002
Interest cost		1,248			1,404			3,744			4,212
Expected return on plan assets		(2,313	)		(1,872	)		(6,939	)		(5,616	)
Amortization of prior service cost		99			29			297			87
Amortization of net loss		1,125			1,163			3,375			3,489
Net periodic pension cost	$	1,614		$	2,058		$	4,842		$	6,174


Grant date	Award type	Number granted	Grant date fair value
June 21, 2022	Restricted stock	1,103,801	$ 4.43
June 21, 2022	Performance based	322,799	$ 3.78
June 28, 2022	Directors retainer	98,310	$ 4.24
September 30, 2022	Restricted stock	121,826	$ 3.94

*	~~Signatures~~	73


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

	Three Months Ended						Nine Months Ended
	September 30, 2021			September 30, 2020			September 30, 2021			September 30, 2020
				Revised						Revised
Sales of products	$	193,560		$	199,703		$	622,395		$	502,983
Cost of sales and other direct production costs		112,542			103,025			318,917			280,303
Depreciation, depletion and amortization		45,790			37,990			138,918			112,492
Total cost of sales		158,332			141,015			457,835			392,795
Gross profit		35,228			58,688			164,560			110,188
Other operating expenses:
General and administrative		8,874			11,713			27,985			27,631
Exploration		13,675			3,407			27,993			7,899
Pre-development		3,433			759			7,046			1,857
Other operating expense		3,344			3,499			10,626			5,864
Provision for closed operations and environmental matters		7,564			1,254			12,297			2,807
Ramp-up and suspension costs		6,910			1,541			17,014			24,109
Foundation grant		0			0			0			1,970
Total other operating expense		43,800			22,173			102,961			72,137
(Loss) income from operations		(8,572	)		36,515			61,599			38,051
Other income (expense):
Gain (loss) on derivative contracts		12,148			(6,666	)		(4,692	)		(12,775	)
Gain on exchange of investments		0			0			1,158			0
Unrealized (loss) gain on investments		(2,861	)		3,979			(7,117	)		9,410
Foreign exchange gain (loss)		3,995			(2,196	)		24			1,235
Other income (expense)		247			(392	)		(192	)		(2,141	)
Interest expense		(10,469	)		(10,779	)		(31,484	)		(38,919	)
Total other income (expense)		3,060			(16,054	)		(42,303	)		(43,190	)
(Loss) income before income and mining taxes		(5,512	)		20,461			19,296			(5,139	)
Income and mining tax benefit (provision)		4,533			(5,181	)		3,924			(7,423	)
Net (loss) income		(979	)		15,280			23,220			(12,562	)
Preferred stock dividends		(138	)		(138	)		(414	)		(414	)
(Loss) income applicable to common shareholders	$	(1,117	)	$	15,142		$	22,806		$	(12,976	)
Comprehensive (loss) income:
Net (loss) income	$	(979	)	$	15,280		$	23,220		$	(12,562	)
Change in fair value of derivative contracts designated as hedge transactions		(6,267	)		6,150			(2,815	)		(2,801	)
Comprehensive (loss) income	$	(7,246	)	$	21,430		$	20,405		$	(15,363	)
Basic (loss) income per common share after preferred dividends (in cents)		(0.2	)		2.9			4.3			(2.5	)
Diluted (loss) income per common share after preferred dividends (in cents)		(0.2	)		2.8			4.2			(2.5	)
Weighted average number of common shares outstanding - basic		536,966			529,838			535,542			526,098
Weighted average number of common shares outstanding - diluted		536,966			535,788			541,769			526,098
Cash dividends declared per common share (in cents)		1.125			0.250			3.125			0.750

	September 30, 2021			December 31, 2020
				Revised
ASSETS
Current assets:
Cash and cash equivalents	$	190,904		$	129,830
Accounts receivable:
Trade		32,821			27,864
Other, net		10,152			11,329
Inventories:
Concentrates, doré, and stockpiled ore		17,594			57,567
Materials and supplies		40,845			38,608
Derivative assets		5,220			3,470
Other current assets		12,744			15,644
Total current assets		310,280			284,312
Investments		8,030			15,148
Restricted cash		1,053			1,053
Properties, plants, equipment and mineral interests, net		2,331,018			2,378,074
Operating lease right-of-use assets		8,201			10,628
Deferred income taxes		5,576			2,912
Derivative assets		6,748			4,558
Other non-current assets and deferred charges		3,511			3,525
Total assets	$	2,674,417		$	2,700,210
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities	$	62,571		$	68,516
Accrued payroll and related benefits		26,493			31,807
Accrued taxes		8,557			5,774
Finance leases		5,637			6,491
Operating leases		2,385			3,008
Accrued reclamation and closure costs		11,036			5,582
Accrued interest		5,221			14,157
Derivatives liabilities		4,179			11,737
Other current liabilities		103			138
Total current liabilities		126,182			147,210
Finance leases		8,540			9,274
Operating leases		5,820			7,634
Accrued reclamation and closure costs		108,670			110,466
Long-term debt		507,712			507,242
Deferred tax liability		142,750			156,091
Pension liability		26,229			44,144
Derivatives liabilities		752			18
Other non-current liabilities		4,787			4,346
Total liabilities		931,442			986,425
Commitments and contingencies (Notes 5, 8, 9, and 11)
SHAREHOLDERS’ EQUITY
Preferred stock, 5,000,000 shares authorized:
Series B preferred stock, $0.25 par value, 157,816 shares issued and outstanding, liquidation preference — $7,891		39			39
Common stock, $0.25 par value, 750,000,000 authorized shares; issued September 30, 2021 — 545,371,827 shares and December 31, 2020 — 538,487,415 shares		136,350			134,629
Capital surplus		2,032,334			2,003,576
Accumulated deficit		(362,023	)		(368,074	)
Accumulated other comprehensive loss		(35,704	)		(32,889	)
Less treasury stock, at cost; September 30, 2021 — 7,395,295 and December 31, 2020 — 6,821,044 shares issued and held in treasury		(28,021	)		(23,496	)
Total shareholders’ equity		1,742,975			1,713,785
Total liabilities and shareholders’ equity	$	2,674,417		$	2,700,210

	Three Months Ended September 30, 2020
	Series B Preferred Stock		Common Stock		Additional Paid-In Capital		Accumulated Deficit			Accumulated Other Comprehensive Loss, net			Treasury Stock			Total
							Revised									Revised
Balances, July 1, 2020	$	39	$	133,699	$	1,982,400	$	(380,205	)	$	(46,261	)	$	(23,496	)	$	1,666,176
Net income		0		0		0		15,280			0			0			15,280
Restricted stock units granted		0		0		1,317		0			0			0			1,317
Common stock dividends declared (0.25 cents per common share)		0		0		0		(1,330	)		0			0			(1,330	)
Series B Preferred Stock dividends declared (87.5 cents per share)		0		0		0		(138	)		0			0			(138	)
Common stock issued for 401(k) match (439,000 shares)		0		110		1,303		0			0			0			1,413
Common stock issued to pension plans (2,058,000 shares)		0		514		11,917		0			0			0			12,431
Common stock issued to directors (391,000 shares)		0		98		1,385		0			0			0			1,483
Other comprehensive loss		0		0		0		0			6,150			0			6,150
Balances, September 30, 2020	$	39	$	134,421	$	1,998,322	$	(366,393	)	$	(40,111	)	$	(23,496	)	$	1,702,782

	Nine Months Ended September 30, 2020
	Series B Preferred Stock		Common Stock		Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss, net			Treasury Stock			Total
								Revised									Revised
Balances, January 1, 2020	$	39	$	132,292	$	1,973,700		$	(349,220	)	$	(37,310	)	$	(22,967	)	$	1,696,534
Net loss		0		0		0			(12,562	)		0			0			(12,562	)
Restricted stock units granted		0		0		3,746			0			0			0			3,746
Restricted stock units distributed (1,702,000 shares)		0		426		(426	)		0			0			(1,479	)		(1,479	)
Common stock dividends declared (0.75 cents per common share)		0		0		0			(3,951	)		0			0			(3,951	)
Series B Preferred Stock dividends declared ($2.625 per share)		0		0		0			(414	)		0			0			(414	)
Common stock issued for 401(k) match (1,396,000 shares)		0		350		3,295			0			0			0			3,645
Common stock issued for employee incentive compensation (2,800,000 shares)		0		700		4,396			0			0			(1,266	)		3,830
Common stock issued to pension plans (2,225,000 shares)		0		555		12,226			0			0			0			12,781
Common stock issued to directors (391,000 shares)		0		98		1,385			0			0			0			1,483
Treasury shares issued to charitable foundation (650,000 shares)		0		0		0			(246	)		0			2,216			1,970
Other comprehensive loss		0		0		0			0			(2,801	)		0			(2,801	)
Balances, September 30, 2020	$	39	$	134,421	$	1,998,322		$	(366,393	)	$	(40,111	)	$	(23,496	)	$	1,702,782

	Three Months Ended March 31, 2021
(in thousands, except per share amounts)	As Previously Reported			Adjustment			As Revised
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)
Depreciation, depletion and amortization	$	49,331		$	(2,589	)	$	46,742
Total cost of sales		146,040			(2,589	)		143,451
Gross profit		64,812			2,589			67,401
Income from operations		38,449			2,589			41,038
Income before income and mining taxes		23,605			2,589			26,194
Income and mining tax provision		(4,634	)		(109	)		(4,743	)
Net income		18,971			2,480			21,451
Income applicable to common shareholders		18,833			2,480			21,313
Comprehensive income		20,803			2,480			23,283
Basic income per common share after preferred dividends (in cents)		3.5			0.5			4.0
Diluted income per common share after preferred dividends (in cents)		3.5			0.5			4.0
								—
Condensed Consolidated Statements of Cash Flows (Unaudited)
Net income		18,971			2,480			21,451
Depreciation, depletion and amortization		49,546			(2,589	)		46,957
Deferred income taxes		32			109			141
Cash provided by operating activities		37,936			0			37,936

	Three Months Ended June 30, 2021
(in thousands, except per share amounts)	As Previously Reported			Adjustment			As Revised
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)
Depreciation, depletion and amortization	$	48,403		$	(2,671	)	$	45,732
Total cost of sales		158,723			(2,671	)		156,052
Gross profit		59,260			2,671			61,931
Income from operations		26,462			2,671			29,133
Loss before income and mining taxes		(4,057	)		2,671			(1,386	)
Income and mining tax benefit		4,842			(708	)		4,134
Net income		785			1,963			2,748
Income applicable to common shareholders		647			1,963			2,610
Comprehensive income		2,405			1,963			4,368
Basic income per common share after preferred dividends (in cents)		0.1			0.4			0.5
Diluted income per common share after preferred dividends (in cents)		0.1			0.4			0.5

	Six Months Ended June 30, 2021
(in thousands, except per share amounts)	As Previously Reported			Adjustment			As Revised
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)
Depreciation, depletion and amortization	$	97,734		$	(5,260	)	$	92,474
Total cost of sales		304,763			(5,260	)		299,503
Gross profit		124,072			5,260			129,332
Income from operations		64,911			5,260			70,171
Income before income and mining taxes		19,548			5,260			24,808
Income and mining tax benefit (provision)		208			(817	)		(609	)
Net income		19,756			4,443			24,199
Income applicable to common shareholders		19,480			4,443			23,923
Comprehensive income		23,208			4,443			27,651
Basic income per common share after preferred dividends (in cents)		3.6			0.7			4.3
Diluted income per common share after preferred dividends (in cents)		3.6			0.7			4.3
								—
Condensed Consolidated Statements of Cash Flows (Unaudited)
Net income		19,756			4,443			24,199
Depreciation, depletion and amortization		98,121			(5,260	)		92,861
Deferred income taxes		(8,562	)		817			(7,745	)
Cash provided by operating activities		124,240			0			124,240

	Three Months Ended March 31, 2020
(in thousands, except per share amounts)	As Previously Reported			Adjustment			As Revised
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income (Unaudited)
Cost of sales and other direct production costs	$	85,887		$	(167	)	$	85,720
Depreciation, depletion and amortization		39,666			(1,851	)		37,815
Total cost of sales		125,553			(2,018	)		123,535
Gross profit		11,372			2,018			13,390
Loss from operations		(15,064	)		2,018			(13,046	)
Loss before income and mining taxes		(18,247	)		2,018			(16,229	)
Income and mining tax benefit		1,062			(657	)		405
Net loss		(17,185	)		1,361			(15,824	)
Loss applicable to common shareholders		(17,323	)		1,361			(15,962	)
Comprehensive loss		(36,520	)		1,361			(35,159	)
Basic loss per common share after preferred dividends (in cents)		(3.3	)		0.3			(3.0	)
Diluted loss per common share after preferred dividends (in cents)		(3.3	)		0.3			(3.0	)
								—
Condensed Consolidated Statements of Cash Flows (Unaudited)
Net loss		(17,185	)		1,361			(15,824	)
Depreciation, depletion and amortization		41,630			(1,851	)		39,779
Deferred income taxes		(3,252	)		490			(2,762	)
Cash provided by operating activities		4,927			0			4,927

	Three Months Ended June 30, 2020
(in thousands, except per share amounts)	As Previously Reported			Adjustment			As Revised
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income (Unaudited)
Cost of sales and other direct production costs	$	92,853		$	(1,295	)	$	91,558
Depreciation, depletion and amortization		39,423			(2,736	)		36,687
Total cost of sales		132,276			(4,031	)		128,245
Gross profit		34,079			4,031			38,110
Income from operations		9,874			4,031			13,905
Loss before income and mining taxes		(13,402	)		4,031			(9,371	)
Income and mining tax provision		(626	)		(2,020	)		(2,646	)
Net loss		(14,028	)		2,011			(12,017	)
Income applicable to common shareholders		(14,166	)		2,011			(12,155	)
Comprehensive loss		(3,644	)		2,011			(1,633	)
Basic loss per common share after preferred dividends (in cents)		(2.7	)		0.4			(2.3	)
Diluted loss per common share after preferred dividends (in cents)		(2.7	)		0.4			(2.3	)

	Six Months Ended June 30, 2020
(in thousands, except per share amounts)	As Previously Reported			Adjustment			As Revised
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income (Unaudited)
Cost of sales and other direct production costs	$	178,740		$	(1,462	)	$	177,278
Depreciation, depletion and amortization		79,089			(4,587	)		74,502
Total cost of sales		257,829			(6,049	)		251,780
Gross profit		45,451			6,049			51,500
(Loss) income from operations		(4,513	)		6,049			1,536
Loss before income and mining taxes		(31,649	)		6,049			(25,600	)
Income and mining tax benefit (provision)		436			(2,678	)		(2,242	)
Net loss		(31,213	)		3,371			(27,842	)
Loss applicable to common shareholders		(31,489	)		3,371			(28,118	)
Comprehensive loss		(40,164	)		3,371			(36,793	)
Basic loss per common share after preferred dividends (in cents)		(6.0	)		0.6			(5.4	)
Diluted loss per common share after preferred dividends (in cents)		(6.0	)		0.6			(5.4	)

Condensed Consolidated Statements of Cash Flows (Unaudited)
Net loss		(31,213	)		3,371			(27,842	)
Depreciation, depletion and amortization		84,185			(4,587	)		79,598
Deferred income taxes		(5,165	)		1,216			(3,949	)
Cash provided by operating activities		42,453			0			42,453

	For the Year Ended December 31, 2018
(in thousands, except per share amounts)	As Previously Reported			Adjustment			As Revised
Consolidated Statements of Operations and Comprehensive Loss
Cost of sales and other direct production costs	$	353,994		$	(1,844	)	$	352,150
Depreciation, depletion and amortization		134,044			(2,224	)		131,820
Total cost of sales		488,038			(4,068	)		483,970
Gross profit		79,099			(4,068	)		75,031
Loss from operations		(39,126	)		4,068			(35,058	)
Loss before income and mining taxes		(33,264	)		4,068			(29,196	)
Income and mining tax benefit		6,701			(4,256	)		2,445
Net loss		(26,563	)		(188	)		(26,751	)
Loss applicable to common shareholders		(27,115	)		(188	)		(27,303	)
Comprehensive loss		(44,370	)		(188	)		(44,558	)
Basic loss per common share after preferred dividends (in cents)		(6.3	)		—			(6.3	)
Diluted loss per common share after preferred dividends (in cents)		(6.3	)		—			(6.3	)

Consolidated Statements of Cash Flows
Net loss		(26,563	)		(188	)		(26,751	)
Depreciation, depletion and amortization		140,905			(2,224	)		138,681
Deferred income taxes		6,278			2,412			8,690
Cash provided by operating activities		94,221			0			94,221

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020

Silver	$	61,890		$	79,684		$	232,414		$	179,013
Gold		94,984			98,457			282,471			278,363
Lead		18,082			13,370			56,198			32,244
Zinc		30,273			26,779			89,501			65,540
Less: Smelter and refining charges		(11,669	)		(18,587	)		(38,189	)		(52,177	)
Sales of products	$	193,560		$	199,703		$	622,395		$	502,983

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
					Revised						Revised
Numerator
Net (loss) income	$	(979	)	$	15,280		$	23,220		$	(12,562	)
Preferred stock dividends		(138	)		(138	)		(414	)		(414	)
Net (loss) income applicable to common shares	$	(1,117	)	$	15,142		$	22,806		$	(12,976	)

Denominator
Basic weighted average common shares		536,966			529,838			535,542			526,098
Dilutive restricted stock units, warrants and deferred shares		0			5,950			6,227			0
Diluted weighted average common shares		536,966			535,788			541,769			526,098

Basic (loss) income per common share (in cents)		(0.2	)		2.9			4.3			(2.5	)
Diluted (loss) income per common share (in cents)		(0.2	)		2.8			4.2			(2.5	)

Quarterly Average Realized Silver Price ($ per ounce)		Quarterly Silver- Linked Dividend (cents per share)		Annualized Silver- Linked Dividend (cents per share)		Annualized Minimum Dividend (cents per share)		Annualized Dividends per Share: Silver- Linked and Minimum (cents per share)
	$20		0.25		1		1.5		2.5
	$25		1		4		1.5		5.5
	$30		1.5		6		1.5		7.5
	$35		2.5		10		1.5		11.5
	$40		3.5		14		1.5		15.5
	$45		4.5		18		1.5		19.5
	$50		5.5		22		1.5		23.5


Quarter	Realized Silver Price	Silver-linked component	Minimum component	Total dividend per share
First	$24.68	$0.0025	$0.00375	$0.00625
Second	$20.68	$0.0025	$0.00375	$0.00625

	September 30, 2021
	Senior Notes			IQ Notes		Total
Principal	$	475,000		$	37,862	$	512,862
Unamortized discount/premium and issuance costs		(5,779	)		629		(5,150	)
Long-term debt balance	$	469,221		$	38,491	$	507,712

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


	September 30, 2022
	Senior Notes			IQ Notes		Total
Principal	$	475,000		$	35,194	$	510,194
Unamortized discount/premium and issuance costs		(4,868	)		419		(4,449	)

Long-term debt balance	$	470,132		$	35,613	$	505,745


	December 31, 2021
	Senior Notes			IQ Notes		Total
Principal	$	475,000		$	38,051	$	513,051
Unamortized discount/premium and issuance costs		(5,552	)		596		(4,956	)

Long-term debt balance	$	469,448		$	38,647	$	508,095

Twelve-month period ending September 30,	Senior Notes		IQ Notes		Finance Leases		Operating Leases
2022	$	34,438	$	2,467	$	6,336	$	3,166
2023		34,438		2,467		4,590		2,590
2024		34,438		2,467		3,313		1,037
2025		34,438		2,467		855		533
2026		34,438		37,301		0		524
Thereafter		522,349		0		0		1,953
Total	$	694,539	$	47,169	$	15,094	$	9,803


Twelve-month period ending September 30,	Senior Notes		IQ Notes		Finance Leases		Operating Leases
2023	$	34,438	$	2,293	$	9,296	$	3,101
2024		34,438		2,293		7,206		1,565
2025		34,438		36,964		3,779		1,065
2026		34,438				1,980		1,060
2027		34,438		—		37		979
Thereafter		487,914		—		—		5,878

Total	$	660,104	$	41,550	$	22,298	$	13,648

	September 30,		December 31,
Balance sheet line item:	2021		2020
Current derivatives assets	$	2.5	$	3.5
Non-current derivatives assets		2.2		4.2
Current derivatives liability		0		0
Non-current derivative liability		0.2		0


	September 30,		December 31,
Balance sheet line item:	2022		2021
Current derivatives assets	$	0.3	$	2.7
Non-current derivatives assets		0.3		2.5
Current derivatives liabilities		5.8		—
Non-current derivatives liabilities		5.6		—

September 30, 2021	Ounces/pounds under contract (in 000’s)								Average price per ounce/pound
	Silver		Gold		Zinc		Lead		Silver		Gold		Zinc		Lead
	(ounces)		(ounces)		(pounds)		(pounds)		(ounces)		(ounces)		(pounds)		(pounds)
Contracts on provisional sales
2021 settlements		1,190		4		20,867		9,866	$	23.15	$	1,776	$	1.35	$	1.01
Contracts on forecasted sales
2021 settlements		—		—		7,771		6,779		N/A		N/A	$	1.26	$	0.94
2022 settlements		—		—		60,043		63,769		N/A		N/A	$	1.28	$	0.98
2023 settlements		—		—		76,280		70,327		N/A		N/A	$	1.29	$	1.00
2024 settlements		—		—		43,762		—		N/A		N/A	$	1.31		N/A


September 30, 2022	Ounces/pounds under contract (in 000’s)								Average price per ounce/pound
	Silver		Gold		Zinc		Lead		Silver		Gold		Zinc		Lead
	(ounces)		(ounces)		(pounds)		(pounds)		(ounces)		(ounces)		(pounds)		(pounds)
Contracts on provisional sales
2022 settlements		2,235		1,840		18,739		14,991	$	19.54	$	1,760	$	1.30	$	0.96
Contracts on forecasted sales
2022 settlements		2,235		1,840		8,763		1,984		N/A		N/A	$	1.32	$	0.97
2023 settlements		—		—		71,209		75,618		N/A		N/A	$	1.30	$	1.00
2024 settlements		—		—		78,760		31,526		N/A		N/A	$	1.34	$	1.00
2025 settlements		—		—		2,480		—		N/A		N/A	$	1.33		N/A

	September 30, 2021								December 31, 2020
Balance sheet line item:	Contracts in an asset position		Contracts in a liability position			Net asset (liability)		��	Contracts in an asset position		Contracts in a liability position			Net asset (liability)
Current derivatives assets	$	3.1	$	(0.4	)	$	2.7		$	0.2	$	(0.2	)	$	0
Non-current derivatives assets		7.1		(2.5	)		4.6			0.5		(0.1	)		0.4
Current derivatives liabilities		0.3		(4.4	)		(4.1	)		0.1		(11.8	)		(11.7	)
Non-current derivatives liabilities		1.2		(1.8	)		(0.6	)		0		0			0


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
(Loss) gain on derivative contracts	$	873		$	12,148		$	(20)		$	(4,692	)
Unrealized loss on investments in equity securities		(5,110	)		(2,861	)		(14,749	)		(7,117	)
(Loss) gain on disposition or exchange of investments		(3	)		—			66			1,158

Total fair value adjustments, net	$	(4,240	)	$	9,287		$	(14,703	)	$	(10,651	)

Description	Balance at September 30, 2021		Balance at December 31, 2020		Input Hierarchy Level
Assets:
Cash and cash equivalents:
Money market funds and other bank deposits	$	190,904	$	129,830	Level 1
Current and non-current investments:
Equity securities		8,030		19,389	Level 1
Trade accounts receivable:
Receivables from provisional concentrate sales		32,821		27,864	Level 2
Restricted cash balances:
Certificates of deposit and other deposits		1,053		1,053	Level 1
Derivative contracts - current and non-current derivative assets:
Foreign exchange contracts		4,655		7,647	Level 2
Metal forward and put option contracts		7,313		381	Level 2
Total assets	$	244,776	$	186,164

Liabilities:
Derivative contracts - current derivatives liabilities and other non-current liabilities:
Foreign exchange contracts	$	200	$	19	Level 2
Metal forward and put option contracts		4,731		11,737	Level 2
Total liabilities	$	4,931	$	11,756

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