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Hecla Mining (HL)

Participants
Mike Westerlund VP, IR
Phil Baker President and CEO
Lindsay Hall SVP and CFO
Larry Radford COO
Dean McDonald SVP, Exploration
Jake Sekelsky Roth Capital Partners
John Bridges JP Morgan
Mark Mihaljevic RBC Capital Markets
Trevor Turnbull Scotia Bank
Ryan Thompson Bank of Montreal
Matthew Fields Bank of America Merrill Lynch
Heiko Ihle H.C. Wainwright
Lucas Pipes B. Riley FBR
Call transcript
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Operator

Good day, ladies and gentlemen. Thank you for standing by. And welcome to the Third Quarter 2018 Hecla Mining Company Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time [Operator Instructions].

conference this reminder, a maybe recorded. As time, over to this I would call the turn to our like At host, Mr. Mike Investor Westerlund, Relations. of Vice President

You begin. may

Mike Westerlund

thank for operator. for conference financial call. you, Good and results everyone. Thank morning and operations joining XXXX Hecla’s And us third quarter welcome you

call, have Litigation XX-Q, and goals, Our Officer; news Vice Radford, and the beginning Dean November, of X. website. we President was that issued was XX-K, the today included risks on Xth President results of release could issued statements. management and could shown Reform market and Hecla’s under law, morning These before release financial along an Exploration. with Chief today’s exploration and by Senior Baker, risks the Lindsay Canadian projected Hall, made available and President, earnings Phil results constitute are presentation. to Slide forward-looking CEO; detailed under our at in cause the Officer; come Private projections forward-looking forward-looking which in On disclaimer securities on include Form Vice Act open, Chief Larry McDonald, today’s that information statements from and the this Any Financial team Senior Form presentation and the as Operations in those release the involve Such forward-looking statements Securities differ in on

measurements. disclose may financial we call, this non-GAAP during addition, In

available in www.hecla-mining.com. our at can accompanying You Web these of is to GAAP find reconciliations on the nearest measurements presentation, which the measurements site

will inferred the that I measured, resources, urge filings. the to Baker. reserves make are about you to Investors are call consider we With ore Phil we extract in allowed our we’re economically or cautioned of which produce. filings disclosures that, deposits reserves, terms use and SEC pass to Finally, with which can indicated in our SEC, mineral legally only not our the that are such and we and disclose as

Phil Baker

a quarter and of a to this consistent the demonstrates by including making wanted as me diligently and I good start X% have are I this economics of and acknowledging cold. should higher success respectively that at I and Hecla, is beginning XX how and this of declined all grade more. the Berardi. Since first of made to in of big expertise gains investments having properties, our seen what the by at Like my Thanks, equities, a we are underground expertise have we a leading will four is when acquired roughly with them was these Mike, ownership productivity since by metals that tonnage made. Nevada investment for the low-cost When of great image declined over days bit is bring rough the October management years the Excuse can Hecla, improved we gold a I incremental three cover started year have very of Examples declined these morning where voice. I X. ownership, it Nevada throughput. San year, improvements already Slide ago same business. be everyone. particularly strategy where our they and our all years struck that focus, playbook emphasize since to doing X important Creek we an see of of almost is at we describing technology Casa, the ago, Petroleum's ago you significant; sustainable Metallurgy because then, success In course silver story, also doing much, CIM, to Creek at running of Sebastian XXX and jurisdictions, practically steady I'm think water; industry by rate the That's stay weeks years don't XX% Casa properties. will the precious our the and industry. on more new recognition while for Casa Casa, of operations, have mines the of were to Friday. and Greens the our cannot and how a the long-lived in particularly we that mines ultimately in price environments. daily have the we have ramp the development side, and us Greens coming Lucky trucks up we making but September, the and small which willingness managing made succession difference XX%. and has about couple Canadian the the our was This and by improving Institute the Mining, in pull how advance was strategy the we light

to second the to get track we ore As to on more the elected mine invest when see more in have you to for will a mining next half year our we take expect a bit tons. in estimates, be step development XX% production in of almost back

for is was our quarter the production but to that sterilizing because be of or risk about We mineralization we known clear have what if we previously it. that We consciously it gave would third a up number a too high-grade quarter become of now. above to sterilized run are reasons, this much try has doing not of to produce me

to the been sterilized a plan. mineralization. looks in of was expected upper, mine this the out XXX an terms In feet level of to is in be be of highest the mine of plan, mined the we've followed as another Much would've configuration be which stope if known turned in to the that’s vertical what at like that middle

time not beyond. production the prudent make going operations take our thought. to should than a It substantial less just time, make the Nevada second Being but XXXX investment. now should we’re we XX% So, require better we of the to XX% means, half and in

mine talk and and while Creek even good overall mine equipment design mine make production increased about better the take done to extending work going like and a Greens been is it it's has Larry a requirements better. while life. XXXX, development the of shows reducing what Speaking great likely that Basically, to

I to want in our was that something exploration emphasize Finally, release.

of are we the price I a subject reserve use think prices than enough higher of assumptions the spot. for is using creation start of are announcement for This that companies our attention. in don't the that is Many gets significantly calculations XXXX. process company. Our determination reserves will value a mining The

around ounces midpoint most refined we not X. the our in see annual which Slide These on We've conservative most we among guidance. price price means or of our in you are around and Our produce. assumptions estimates production all as original if production the is have tightening are spot margins the lower. industry, most cost the Silver assumptions can the

the is On mentioned. Casa I upper side, the end at but gold as outlook, lowered we Nevada the

at lower cost are lower credits after of costs lower all-in expected. is we substantially per higher is the the with while expiration Casa for and Nevada increased capital production, Cash lower. gold costs same as byproduct end. about expenditures are the other slightly production ounce because lower So silver has and the

to turn Lindsay I’ll for review. now, over the financial So call

Lindsay Hall

quarters in the from banks $XXX Nevada morning everyone. $XXX agreement the We in with November, Also, revolver cash as we to with to previous our early operations. Phil, ended unchanged million per $XXX million good million from when Thanks, and $XX million. quarter increased acquired our debt and the to

We line the needs have for drawing and than source no other working we down use of a as intention on long-term the don't capital borrowing. line of

has quarter, out realized worked during the in we our base monetized our that's we release today, million hedges $XX metal noted As periodically something cash, and it's do a well.

quarter, additions so $XX and sheet. cash $XX a am and pleased working sites with development activities, $XX the basically the million flat generated million we capital free in cash other expanded quarter. balance million in For and operating flows, flow capital I before quite changes

assets three capital products financials. last $XXX operating properties we lower same cash and you believe flows. comparisons see Klondex have cash the enhancing ended last basis year’s Cash purchase debt operations. provided measures the prices. completed million of time from quarter is from the at same outstanding in million get the with additions. same of opportunities our closely business Nevada liquidity increase enhanced is those X, watch ago comparable quarter flow we September Slide the less in year to to On we'll about between or as reported get about in cash credit XXXX, of one transaction by before $XX We can sales our of generate to of activities flows and months operating and our of XX, We The amount of as transaction the and despite free the some delivering with cash a the year provided this as is now the

million. the $XX undertaking costs more and those, only been Klondex. For year-to-date flat. That associated quarter, despite we’d acquisition our Without spent we absorbing in the quarterly we exploration have most than is with history million generated and $X

mining, Turning cash and comes more ounce it. bit great XX%, revenue. acquired we you stockpiles product be cost these to underground generated sustaining had little turning byproduct capital is really by zinc Slide businesses Greens silver our lower the credits costs while On Greens Greens gold, see to and gold and stream good per The great coming Larry were cash prices. a In at cash production revenue really we and function incredibly an exhausted on year. at costs now about from We’ve had we little I both Like XX%. Casa for maintained is can after had has are San byproduct since to operations. and the metal lowest a continues a Casa since flows summary, will are expect to sustaining this transition a $XXX investment while in costs Nevada declined good on. surface talk despite will to have mine. and quarter as the up of credits we until high-grade cash cash EBITDA with byproduct We diversified the of it after cost, the pass Casa’s with declined after the to in costs credits drive source costs credits, San Creek all-in Sebastian fully quarters. low $X.XX increasing after have the has they diversified all-in costs of costs anomaly all-in On silver lead we an and lowest low XX% and gold higher operations. impacted still At dominant Slide revenue. the Sebastian, Creek. the at our at bit that a X so byproduct invested Creek had production quarter. X, of acquired

Larry Radford

Lindsay. Thanks,

are Berardi following year, both having of In the the busy Nevada integration production in Greens costs. metal acquisition and Hecla Third the July. with of quarter was terms operations and Casa good background, in a the both Creek Klondex

So I’ll mention going I and phase. am just properties, that to development a Sebastian forgo discussing in on San simply three intensive these is Friday focus Lucky

about control from. After quickly safety Nevada begun Klondex, Creek. is due have Slide that talk of the would underground have We’ve Fire Nevada were already Let’s can except confirmed at and spaces working Hollister have buttoning down had to wind underground, good diligence, and base the a build has machines and we that what and which on and safety mine good productivity translate developed the to record, X. included transferred we for mine men a the loss up that to money. mines we we taking of

Creek. completed said and the with our and in the we comprehensive the confirmed Fire Creek at and our Keystone we’re Graben acquisition. mine dealing of call, Hatter we Lake Hollister starts value As development unlocking for quarterly plan last premise Fire a at which

up, turned basically much. of to in encountered conditions. back the As ramp conditions which and we play existing Many rick, a phases stuff, water little we began is development add development were foreground unconsolidated bit a

it. in investing are We

We tools techniques the and to manage conditions. have provided

and conclude with President Services and of installed talked that acquire And up, another the place the shotcrete techniques about for now holding dealing any roads be feet. at the Nevada. which of things. below Klondex remind conditions probable. ourselves we shown no at XX. potential ramp began base, Nevada to Roads in only Vice we it highest It's in exploration will [XX.XX] is and We It’s not had properties and Hecla acquisitions. exploration point frustrating at application the we were batch rigs of right just with talk opportunity believe other Hollister drift right produce Our review the are fixing place about than moved the the already Klondex we two mine Hatter failure call. to and the dealing operational Slide availability. success, Montana year One, is for that are but can and as We've of shotcrete on we And Technical provided of year. you Immediate the for still on project two and after We to shotcrete what's upon working any is exploration acquisition the poor I onsite from base will the second, provided back on plant road say the on developing last the at the immediately the are graded to that Graben planet. in time. that of projected end success we’re that without we development the blasting

we Creek, have several of things. concluded future For Fire

First, set up before ramping is production development. the up ramping key in

north have body and open grade, feed and resource ore the on up the include to south we straight. Second, to

on Our is plan shown XX. development Slide for

of men XX,XXX from feet, plan to used deficit softer development. have and project rock increased will Colorado up by annualized ramp XX,XXX be a up for such machines and We production have machine the with road have to to Midas next We We we testing XX% recovered rate mine and header deployed the development development success. types. year, from from our soon the Klondex feet the rented and ramp of development the We ore the mine. Bulldog middle

west, expect high drill opening to also potentially real We and have stations zones. new to north to the grade up south

have the budgets ounces with these ounces of cost X,XXX Klondex cost cost third the per of Hecla The note ounce including also than tends associated And to Hollister XXXX development because including Midas That said, anything, goal production. As shutdown July. than for ramp them, financial Fire is for reflects the elimination and for which low high fair ounce Creek reflects higher the do are Hecla in per end ounces should corporate ounce the creating these that process underground. Hatter that any The stockpile towards the came one that reducing means Klondex per per cost improving market results. up. value acquired more production is savings neutral of operations Graben operations our stockpile and more not initiatives development the the and cost ounce the the from in XXth. cash July high of provided on the G&A distort Nevada quarter, margins the

sit the Let's resources in talk Creek ongoing in come years, new asset, the to are budget blocking and well. Slide with about cash tackling Slide development. forward is and production Greens into on and impactful two projected our to XXXX the flow These in mine XX. how high life In improving cornerstone On development, want XX, high incredibly are grade to I next as in mine Ore production and reserves basic that life bringing plan East highlight plan and changes the mine forward the Hecla. mine operations

ore for to removed I feet their how project, migration the left off new these already plan new success mine my over a technically, from Slide former the to the The of is well is proud pit zone, the grade Phil the tons. we Changes into running. Berardi XX monthly on creativity. automated from Casa to to first And automated. see XX,XXX requires learn as acquired automation monitoring mine be This operations vehicle how terms of life is extended make two completed we the with important very XX our Changes improved of existing operation take ore automated when team Slide raises completed ways to to underground Casa such The access the capitalizes Casa you team, on directed four XX of underground management status two mentioned now should for for like the machines. the to advances. plan. the leadership CIM significant ore. add value shaft open of companies onto improvement assets. Berardi all brought for acquisition. on level mining recent [indiscernible] XXXX, that where right, been see Berardi hat A most how can zones, earlier, soon time. system the development trucks, and no can and significant article the to truck now Berardi in by to operationally shows shaft Casa the trucks an the this our pockets what our production. Other You completed Nevada plan line also for hoisting market the much is had we’re rock which Hecla in whole highlighted new development have trend too thickening mine. room us. from much shows the has and of to are and the the the live and low eastern looked Magazine needed of then And almost visiting mill or money. considered Hecla’s of leadership. production, in ore control mill the shoots operations the In on mine

Our improvement Nevada reflects the mine, Hecla. transformational made over reflecting the belief for that call cost have I Casa pass will ounce operations Berardi will per metrics now the that been be Dean. our ongoing at

Dean McDonald

lot the had which and quarterly Larry. appendix of highest the ever and was impressive $XX provided Berardi release for as list Nevada at initial about I'm Hecla the going exploration the Creek, continued very Greens, my Creek results Tuesday. a spent is third mines drill There properties. and quarter on Hollister and our in other We to release. and use exploration Thanks, with issued the several at to activity the quarter, in to mines in to San of these at million we out and in but is our the in strong continue growth laid time some intersections aggressive accelerate on drilling our of talk each and Fire say opportunities are programs properties properties, which Casa Sebastian the about our third exploration examine

drilling occurred near and completed in underground development activity but X, of will because X drill is of XX XXXX. being lack concentration and future around X. provide underground Fire Drilling the mentioned, being Larry platforms. to drill production shows at the significantly not Spiral As This be and Creek platforms. increase mineralization, that Spiral Slide of a prioritized in problem lack increased corrected not is accommodate will around

New X and Spirals and drilling continuity Drill used grade high of of mineralization shown expand current soon resources. X number along Haulage has definition and Spiral be X extended platforms and Haulage uptick and targets. between to upgrade X will very the X

intercepted X. Fire to up which is can give and Surface surface mineralization development and east to veins, veins into that zone a drilling the are release. Our targets drilling as grades and Zeus impressive. are are reachable Zeus the south. several grade Drilling high Central Creek XX. programs is geophysical on the will infrastructure location East near Rowena anomalies continue spotty, high underground incorporated of Clementine soil significantly than structures extending that high more Fault the Slide further Gwenivere in mine mine the in had Initial Shack series and the are so the the the to may drill progress in exploration are that Guard next the is important geophysical exploration view Haulage the strategy planning multiple On at To drill extend across programs areas along new opens alteration and veins planned near in be follow strong The mine explore, identified of the these Hollister, at Haulage the and exploration high-grade to XX veins identified. There from the very will and and surface but near see target at Definitions grade blanket further and complete is Surface targets. the results new mine property Many unconformity X drilling Slide quarter. gold veins northwest ourselves recent test during is Slide drilling shown the shown the to room are of of Hatter exploration programs active as have Hollister being Graben. is resistivity are holes self-notice confirmed at south and Clementine and has far indicate IP anticipated. XX. survey you

underground drill to so the expand a like we the veins of can Continued lot development. to Graben and about confirm at east Hatter hydrological Gloria designed comments. mineralization when drift end west the beginning. the to but extensive of the Hatter rest resource in the back drill vein resulted will to acceleration This this development just the that, Fault provide real for known the is Extensive mine resource Graben the exploration Phil to more is fourth the and the our year review network And start provide of to information extend closing east. Hollister grade call of upcoming programs, I'll quarter. at I’ll The in drilling vein the evaluate drill critical provide say platforms, to some to drilling of to release of development and the in will Clementine across pass high the platform the next a with There’s instead.

Phil Baker

Dean. Thanks,

I how take to we questions, we’re positioned. Before that five illustrate want point things out

that’s coming and Creek and decade X a is beyond. the mine higher billion and past better over XXXX free in flow is the cash XXXX First, getting over grades Greens generated with

the said, XX% thought. plus value could As more Larry than we mean having value. significantly this more I see mine we be

Berardi Casa leading we many XXXX new saw realizing is with Second, way the and is technologies. in potential

flow for and any because silver this Nevada really Fourth, XXX the added we've in because of than in a exploration gold cash have than Third, all last better to more now long changing not the super targets Finally, like before that to of potential the million over what at X ounces consistent miles potential company our now be we do a million it. is has XXX and manage and please it's open has San happy this contributors and the questions. of Operator, of ounces have years. at expenditures we and we more needed last seen years to Kirkland the that. decade, time after With reduce it's we but team that, we've the to in been Nevada for time square and have Sebastian, management as this operations debt understand had the Friday have risk potential you will Lake, be high-grade Lucky meaningful Hecla are and XX line

Operator

[Operator Capital Jake Instructions] from line Our first Roth coming question Partners. is the of Sekelsky with

Your is open. now line

Jake Sekelsky

done really quarter quarter, metal well another book You’ve with there. so plans over Are program levels more so? in showed hedging next there for? nice a to there you’re specific place which job put this Are base or looking done the any

Phil Baker

re-hedge levels do will than no price go, have. there’s Basically we as we potential particular upside re-hedge, when more will certainly what that determined, see at downside. exposure targets we look be we at We we we our

hedge, the really at the we’re re-hedge. really we look it received moving way forward and would've the it’s -- we get that this we we and opportunity that's to just So, when monetize anyway revenues

it's a So we think for win-win us.

Jake Sekelsky

Nevada to the rents few over there. looks spent Is Fire Or forward? you're expect million going over beginning next work this a as with level quarters development comfortable was this of higher like trend throughput you to Hatter and do just switching And it Creek? on X

Larry Radford

how in roughly Hollister… Creek we is the Fire portion and on spend when But which also Well, of remember million $X about quarter, a tailings will on in expenditure. think roughly, completions we development had much the it's Nevada, I of

Lindsay Hall

central The we Hollister, not to looking really… are

Larry Radford

little really bit is there room… Yes,

Lindsay Hall

Little to million bit X Graben should this be million Hatter year. X or

Larry Radford

with goes tailings the development. way away, construction have dam, The now tailings we and Graben to Creek tailings the about it. costs only of So associated the and that’s the think dam development Hatter dam Fire the

Jake Sekelsky

will lastly upcoming you sample? book at Sebastian, think from San you the just see far results so when And

Phil Baker

the So, quarter, early end the in it of second first quarter. will be

or we that it's deliver will do. three we the So, start late but I will this think material to lots year, in four in

bit So, it take will a of time.

Operator

is line John Morgan. next from with Bridges question coming Now, the JP of

open. Your line now is

John Bridges

increase upward wondered Just and the half you in you do of XX% for ramp to half order Is sort some be the the mine? decent the in capacity trend prior it next of the will have strengthening the flattish productive half to going Nevada there sort of first continue first to earnings second in What expect? as second Or point in up half? until to year. you to second just sheltered investing throughput of be

Phil Baker

certainly the is of quarters upward first an There two course the during year. trend the of

the So, quarters more second first than quarter. quarter than way another third. can the quarter, second quarter of it, Or the than saying less be less first second

John Bridges

what's And the in next you -- capital changed it year do is Will save that expect? sustaining going of much flow? to development plan be Greens how terms you Creek, in cash

Phil Baker

as what in spent about of course the to X John, year. over process, we period the are of course still was And be that X change capital for really the material it's change. next of in the budgeting but it's a or not planned

each huge a not So incrementally reduction. year, it's

development looking engineering the It's better. team of there do you grades had about and originally the would what is been are group higher quite design. XX the a doing that are important It's better in that out areas more earlier years we plan. at after you think in that has get when a way amazing less what's XX guys to aggregate, clearly and years are around how think the win mining I than figure than you're in mine of mining doing stuff

hat a do and a great well. I So, took off his to he as job. really It's as mine Larry said,

John Bridges

would toughening term have the rules takeaways any affect of sort we in then, the against And there? Any elections mining that the plans out other they and came Montana. of anything, your day longer the

Phil Baker

of as pretty a and Alaska. future wide mines There by lost in those that's would margin. have initiative in and is positive Alaska it so, really development No, both an that of was shutdown all lost

So, it's quite positive.

Operator

our question Mark from is Markets. coming next of And Capital the RBC line Mihaljevic with

is line open. Your now

Mark Mihaljevic

way. first next guess over developing and you're to kind start the going year to Hatter off, so say of I along you Graben be exploration

a we figuring the Or to actually mine of XXXX out really know things get it there? continue year could positive it getting contribute beyond near what take another that, of everything sense all be development would something type kind you assume in in of thing? and XXXX? kind is will then that the Just of start start Assuming outlook to are should done

Phil Baker

If will production the see to year. in the from it in Hatter of part Graben we're XXXX, latter the able be

Mark Mihaljevic

on called Okay, last own through that And of it with comfortable year, XXXX the Hollister makes Fire it's that so next maybe up sense. are man you're kind will, its the Creek carry load then standing? wrapping will

Phil Baker

will is What we're might that the it we're that's that's extend based the it's certainly what likely doesn't got And happen. lot materials very-very developments seeing. needs will a but possible drill we've think But results we're mean to it to I the would anticipating move of many It's that that, happen there. then and continue Hatter within to not, Hollister we what tight. extent Graben on so

Mark Mihaljevic

Okay.

Phil Baker

to Anything add that? Larry to

Mark Mihaljevic

to about you'll and first operation, Yes, Casa look type of sort I grading kind a of what thing. hopefully of even and you're couple of guess get, challenged where to so Is going little some like see the fair break that's say? in bits it's working through Nevada now of for kind the that of really kind XXXX thinking then really kind years

Larry Radford

think I that's right.

Casa. you're saw at is I that to at similar going very look at look what curve we think the to

was investment three If been. flow $XX you It's million. has first we the positive made now years, the look that and incremental cash at

to is that So, and really a the get life the the for outlook going is, acquisition the on mine to return the and best in starting we're back XXs. it

Mark Mihaljevic

what's that the then and in sure there? you a of show guess then point is starting there guess, this the And get you debt look to look want nice turning at to to we sheet, terming really just there timeline to around. Casa at working out paydown the kind under Or to senior that? well, Do quarters starting of balance should at term time show looking Nevada good kind and mentioned out? couple your feet very notes and I you I at how make The quarter and some as to

Larry Radford

the this, to have would were take out if think we one. thing a one pay to realizes debt out on first take we have to it today, I premium, we Well, that

thing what those then is, of -- driver earlier it’s the longer-term somewhere really years San that to time of that’s to May we do been and helps us. so anything have to this we no Lindsay San facility next and what we’re secondly, you’ve you you life ourselves about between think with event, it on some mean Sebastian Sebastian, we we’re of So, when think said, as on a talk improvements you credit about at sudden first for from sample, Sebastian about giver enhancing. to extending But credit we’re almost that's maturity. with got the it think XX Nevada, didn’t all. call the we San see bulk if San now all properties. Lindsay, putting X we than doing out about And a credit think if kind May I bond the year, the to And a at this doing show successful think Sebastian, if at and that? longer mine the add

Lindsay Hall

this plans Nevada No, cash say, at thought we’d will Fire ramp and for I’ll potential just flowing up, start this the San Creek gives where that of mine happening, the now as that doing. will the spring, that's Part be. credit Sebastian our we’re is we exactly know to when with agencies life. rating And review just in what the with we're what we level start said and they execute on Nevada, will doing rating your

plans and the Larry pace. up We’re development picking executing on little picked up short of we Nevada and our

rating we're the just where good. the really feel the for at back spring and let in. strategy and us agencies I see execute So, we'll be we'll on

Phil Baker

in Mark, we’re rate which an clearly, underlying rising, are in we do to be great we that. interest what that’s how environment is credit quality but improve to the at that not is looking that, is offset

Mark Mihaljevic

long think do ready guess the on thing kind got bulk take you the actually to you it would sample of I mill obviously touching then And sulphide. on is like just how go. If San determine you that positive, Sebastian

kind that it six a months Or of kind is expectation? a So turnaround? of reasonable is

Phil Baker

copper have year, consider we the is doesn't by thing that the a the would -- circuit. of Roughly it have to end have we

copper how production we we value So, don't a to how it to would have have that much be much do you where know copper and circuit, I add circuit want losing. you until

make. would of would be add? that to So that we part evaluation the Larry, anything

Larry Radford

as If XXXX. to of the to development take there. and flow some through secondary there’s well do Yes, [indiscernible] we need a so end will ventilations, that

Operator

question with Our coming Metal. from is next [indiscernible] [Sorenzo] of line Anthony the

now Your line is open.

Unidentified Analyst

the in to it spending greater in would at XXXX? to XXXX the than it's of Nevada operations, expect promise be results you then -- exploration be the in exploration was With going

Phil Baker

in We’re because Anthony next overall. at we’re chuckle budget he -- spend Dean I’d is the on That’s to likely the I me. yes, at think looking less exploration look, question is process

about price think love able that a to spend its million environment, just you that annualized we this at level would to in that’s to we quarter, this just $XX not are level. If spend

of third further by things. are see Nevada we were will work But how these going are certainly we decline some going year. encouraged for have annual over relative year-to-date to we And to that expiration you see it quarter. I prioritize to that generally this where less certainly So other are think the are in than the the we where speaking things notwithstanding some of you are in out, we

it that million that be it and got XX not to less. than probably have somewhat be is We million certainly the XX is higher any guidance -- and have so we going will

Unidentified Analyst

to Company. to when miner the quarter. the mine, the remote expecting not that expect vein for of you had Like for out the was you level course rate With third Yes, regard would four a that’s Lucky the remote mining -- times I Friday constructed pointed be the being completed? of record that’s

Phil Baker

been will in that U.S. have the completed, half have slight we XXXX year. a be over but In the delay will completed of second will there's we and thing it that

Unidentified Analyst

to take long install then it Friday? at Lucky How running does get to to and

Phil Baker

some a process a is Lucky a place and is six has that then at It there's the to underground development fully about to get be also the have month it reassembled how Friday? It's underground. be shaft done big to opening -- to

Dean McDonald

XX.

Phil Baker

You had to take…

Dean McDonald

XX.

Phil Baker

and shaft. XX, down that drop then this it thing assembled this Yes, so

it's have it's fit shaft, So, before been but the to down been done constructed, able with designed that to those we things be shaft. before

Dean McDonald

by down the feet. go X X in are feet which It's compartments got about to

Phil Baker

that's Yes, trying to. was what I

Operator

is the And our question Scotia coming Bank. line from next of Trevor Turnbull with

now Your open. line is

Trevor Turnbull

behind I and cash cost certainly looking going sustaining and Klondex, I will if And you in in certainly what all guidance. is terms for When looking the see upside, budgets. cost all-in on cost to I the little those flows have and cost levels? of are reasons am that Where more happy I the grade, bit of target cash Nevada of really or be looking the for at? And in cash doing exploration sustainable acquired for the consolidated safe you that come wondering, talk was could appreciate for basis. you those levels assumption you had levels a you the it high not strategic forward. sustaining am embedded you about vision jurisdictions were all-in and being outlined just a you

Phil Baker

at consolidated into we get is targeting those just like Casa. investment trying we're as close to no did what Trevor, assets to new

to it's going if that Now some make investment the be you make to going you have prices you where not do small. but know be an investments relatively might so and anticipating, are you're

this Is way up as to You for of in development you few that piece investments. work. I it of generate it and of saying new to cash of the But making let's put do just lot dollars I out some end XXXX. maybe to up can of that flow the don't because mean the to have essentially is a in going fair making see a Larry? benefit get we're determination million equipment necessary going Yes lot worth thing ramp of a do of a room a

Larry Radford

there. the would return Yes I then in level, way of $XX would engineering Graben, to Creek come we're it that as well. inferred and and hope look the starting and levels and a it in look really resources Hatter of we that is I Klondex, about those with around lot at although I million just do capable was to guess Fire flow to certainly it free work making cash to

Phil Baker

that's expectation the But at not ‘XX Fire. for

Larry Radford

no. No,

Phil Baker

I mean that's we… where

Larry Radford

Generalize.

Phil Baker

Yes.

So, potential has. looking on get mean way frankly expect consolidated that's this a is this levels Creek we is is, where a quite thing at that a the of Nevada level. of at Greens it that the that's sort to it's to I remarkable good is

Trevor Turnbull

respect I And XXXX. was to nothing with not that's at, what getting certainly

decline looking that's you like as was guess all the I behind of Hatter into say new once for kind investment, beyond out Graben. which I XXX that from the level assume getting more the it of the I you million Looking for includes Nevada, number sustainable? is built XX once or I two you've a you're in assets reflected roughly free in kind each cash out that the saying to a guess million But of

Phil Baker

before would probably Yes, exploration. That that's be right.

Trevor Turnbull

production, mean, or X,XXX a do that ballpark? I kind of that sustaining what to guess a under is -- in have with I back kind but you like, could costs just what of of is sense And I that all-in

Phil Baker

becomes I stuff. to a of even surface. that's that where then sort new Dean just his that all huge growth intriguing this how get find so find and from happen we're because going that? why That's a a more a access thing up of to issues that to open going we're to the to we're is right. of ground seeing remember you head. going underground on about Hollister lot We access have you that going you Dean, is want it what's on me Hollister opportunity question top in we're share probably what just it explored now to didn't with you Hollister and it's ago. we're involved Yes, have one And putting know And of is further and to is think in there just under decade the that were these mean shaking are. the about areas don't with we workings that big of

Dean McDonald

mine. the the There's which Hollister is the I current east where infrastructure Yes. which of of progress in to Clementine the still the Trevor, in that it's diagram offset Hatter one right Fault wide the a things is development shown gap and the Graben. that is now on to to the between mean, fault is Hollister

we’re to some And some veins. more going where length so, strike more grade see X,XXX expectations that is feet there's X,XXX of to veins, the high

And work, and those to out current they get with before fault. no think suddenly veins so, of reason there's we see Clementine the that die the evidence that to

open to Gloria, the be that’s the high series grade mine to east. about veins briefly but very So that again west, To appear West there. a the whole Hollister mentioned of

Phil Baker

you from to the Trevor So, never operate geez going reason this up opportunity to whatever to -- here. want almost us level you that's uncovered don't that I I there is has is now years is more to because get well, XX the opportunity bring continue at just This is as three be didn't I I've that say, Hecla, that something have we the seen has. years, have frankly that, in been that

Trevor Turnbull

with Dean. And I just talked down this about sat and

first and earlier lining that really of that to to just of cash potential flow on the was half premature, top guess assets, sustainability flow year the both agencies the with the head just spending free the and time, certainly just still of the sustainability kind agencies, of to spring of potentially them would see a further help north but you Hollister and the going the going Lindsay cash you -- I as to the Fire out. Mark little at be get as make? little bit Creek any closer our or not the to think Fire comment potential I pursue a make that around, cash investments taking there’s bit seems early think rating kind mentioning I are kind agree given to a next that. again even given up of spring, that I changes that's at are Graben made the to of rating certainly look lot grade in flow it’s XXXX also trying and going exploration Creek, next the of Are in Hatter

Phil Baker

pay Creek. need XXXX I to I am significant for think is I we anticipating mean the have do. because we would to contributions Graben, see to not able pretty Hatter largely Fire we to in necessarily neutral spring, make to and not that suggested, Nevada. we close being sure it can but for next development cash Nevada flow we what be the the I the it's at pay we’re able within think run is in mean

Trevor Turnbull

I for looking much And this would've themselves, be acquisition pay the at expected to a rating cash call through for continue sorry before they it's you actually Hecla and misunderstood. thinking actually no, be cash lot feel not pay agencies stage? flow I very more able these you've just worst and contributing outlined to the come time least these which flow going that I the -- neutral at a cash be assets I for that to that on whole actually or flow best like to were bump while guess this while a to flow at at bump was things, free early given I in they're cash see accretive to

Phil Baker

the is, on going that back going the Yes, to go is up I it’s going that. be EBITDA think what's and you’re of to going happen to to see

Trevor Turnbull

Okay.

Phil Baker

to an Right, going to debt it's be measure. EBITDA

be going that are comfortable. if to around We the roughly should And more operations. times. shed be We we speaking now getting consistently, two, they two have more

that’s okay, enough add now some had do EBITDA they the of anything we operations. more you heading had got more have one so didn't we ahead and that? we think I now what we to are like to complaints was some on. have have Lindsay, And

Lindsay Hall

and go when they would given when they you risk want, you meeting us. and you say, plans to visit what your we are industries execution gave them, I when you’ve plans rating say, No, go

XXXX. look We them. through XXXX, the on for executing here we gave plans out you, looking expect to we they're really in and they go are And cycles the past

them, are big item if plans, on that’s So your to come a ticket executing you for them. you

Phil Baker

this this. going have the was change the were up. guys advanced I I when to have Creek the in would life we we has they with past Greens is, it's Nothing come eyes went grade and opened. move going extend, better through at are meaningful changed -- move things these end we be we how but up. this, And is mine can't to We to really able really were overemphasize than mine to with it very life other the that and think going mine of actually they the developed that my of

driver value showing. and will something big be we that that's So,

the more we and we still to are will market will rating give as give also agencies We time to working meaningful. it the unless goes But color on. it

Operator

the from Our Thompson Montreal. next question of line Bank is of Ryan coming with

Your now open. line is

Ryan Thompson

shorter same bit at now was asking end you're but about you it's lines talk throughputs sort around of question of was what the XXX Fire on reserve My the a about spectrum right talking Trevor to just Obviously, those day. life Can as the ramping Creek? and along tons up more. little per

to wondering, if some forward-looking just into of add the if in drilling just you reserve was you can And year? to I what make and put to expect maybe statements that this So, XXXX could and exploration out, you targeting there are trend? results reserve on the how that we expect tie life you

Phil Baker

actually do the the them to long-lived ore of guess definition in if would these -- probable that to move it thing you have drill into because first body, reserve this tough mineralization next the and reserves panels to are very is of I and mean Well, which platforms have don't nature reserves you drilling is the reserves, got the say category. with I proven

we and measured is things development material Dean platforms and move it. inferred that be will about understood and with be doing more into the Larry in So, life when indicated on resources that with that that on with And assets mine of to with of where creating to the today. of talked that and measured try fact the a these work going of And and be order based they growth that's look the one inferred if inferred, are we mine fair acquired will life at just we we that from reserves. you life to the we assets is of these indicated amount

But And few going through no process for years. to surprise add? there. Dean, is it that anything we're to so, the you that's be next there's going do a want

Dean McDonald

to about What's it's really particularly about near Fire mean now reserve I it term somewhat going resource and and in Ryan. particular Hollister Yes, is in the conversion to Creek to that is applies be that unique selling.

it's to and drilled Historically areas been has really grade upgrade confidence level. upgraded the the that's going continuity. found the across that context So that have also

in we development to on until reserve rely advanced sealing. get So well the is this going heavily very

areas. better So the so get At trying going game. platforms it's more Larry's the sealing to we you some can in to of pushing know we're group But about maybe to get so those of hard drilling. in same than define is drill term even near define time ahead the resource some be

Phil Baker

to anything Larry, fair. add? that's no, Yes,

Larry Radford

right. exactly No,

Ryan Thompson

to a get those platforms is to sort assume and because drill So at see And XXXX. chance a work in dip ticking end is really up that this haven't of time really of do the just more probably before just in? year tonnage had the it safe that the we'll reserve at you [indiscernible] expect

that is So fair or… assume to

Phil Baker

of Ryan, that, we're not… now process determining the but in that's

Larry Radford

certainly somewhat? that Could we significant it say Yes, increase. I any are would declining not that anticipating

Phil Baker

only days. We've could. of certainly for XXX Yes, ownership had this about

So you know generate us struggling. and the before flow. clearly guys They needed were to cash look, the Klondex,

didn’t We They needed understood to the the mine surprise a So, all up do. us. None set of that they to of is to grow they sort didn't development reserve do basin. that.

Ryan Thompson

quick follow-up on that. And a just question

think you referring should of sort should So, of cutoff about you how I grade guys do results? we were sort about how for think or grades? what And you

Phil Baker

is which look and that lots tell extent there's considering there How cut huge amount can the that how as of that, is to can that Larry? at do the cut-off Look, we a that of and inferred to be mined, that that. do we grade that grade where we're reduce do point three, on an at off going we that stuff is I mineralization is they you opportunity.

Larry Radford

about grams. units metric cap graded and grade grams is cut-off underground our X about the in XX Yes,

So, screams opportunity. just it

Ryan Thompson

Okay.

Larry Radford

upgrade XX. Yes, coming it. the of XX underground Creeks I'm and that's Casa from Fire seeing about at grade is average kind

opportunity there. be to there's So, an got in

Operator

Our from next Merrill America line question Bank is with the Fields Lynch. of coming of Matthew

open. now line is Your

Matthew Fields

May wait I of the made the and refi. you wondering protection I understand just the about guys when to was call of 'XX until just some away. bond falls comments wanting

agencies for premium, new that to pay to the Hecla of waiting mean but market say. you. call don’t you an pay regardless I made what what points will agencies lot you X.X rating bond market guys So of for the have the a awful will pay of the upgrade

So and actually corner upgrade you're I and to don't putting not into there movement until agencies the a yourself not don't going if wait you, own rating you’re because…

Phil Baker

no, No, no…

Matthew Fields

and… behind One

Phil Baker

assets company makes some not it to is. that do years to got Yes making on would part whatever the is going should that companies -- we and the that certainly -- and we trying us if -- different the, I we’re level and for long-lived market bond have metals I Because have We of XX for we think to certainly going market we indebtedness we think we great think we and is is about that. and for the the debt but what and with that your that all we’re understand no, sure the we’re appreciate indebtedness and have business been worked produced accept to of -- to understand so we the Hecla a that to Hecla that so Hecla going have with that to as are story have sense any I’ve we a engagement in exercise we’re that. communicate there's

do the -- to that rating to will Lindsay, preparing the agencies just one wait just is factors We’ll add? we’re not So, of we consider. anything that for that.

Lindsay Hall

flowing great assets, jurisdictions. cash great some had we No,

we We market. have and mindful resources to and and patient ways will leveraging lots interest the that we and reserves cost reduce be look creates of against debt at at of a that that end,

Phil Baker

reduce certainly we can't the the we we refi can. do it, investment will If do and

Matthew Fields

debt, to and revolver upsize Would sort been borrow, the that's you on that's been some a refinancing invoked the of in issue you transaction old a I high smaller do recent of think consider pre-payable market? create a somewhat some doing in type the transaction revolver where and let’s say bond

Phil Baker

I you likely. those things that credit -- Lindsay? the of all am not say so fan on say cabinet will have, relying I a facility structures big never think a that's I revolving to with that just don’t while never

Larry Radford

No.

Operator

Ihle Wainwright. H.C. line coming next Heiko from with of question our And is the

open. now is line Your

Unidentified Analyst

any the were are the and Greens at here Or as four expect of previously This over Heiko. you term longer mines mind planned? they resume expected is for [indiscernible] new is impacts it expected next then guys years from XXXX Do things impact Creek? to plan only

Phil Baker

that. know don’t top off you Do the I the know of head? to your Larry answer

Larry Radford

mine and I’ll without emphasize produced first any we’re ore. not of sterilizing to have I the is We're amount the moving expecting Well, just additions of basically reserve ore of mean, higher of all, the that same. grade we forward metal are the over life

XXXX. will impactful follow. will And year, in very follow but few next are in starting mostly moving grade mine years life, bit we the forward years high little So, XXXX. The

Phil Baker

recollection higher the is a plan the life, are forward. anticipating, and couple yet. but moved Yes, so had my old we And we toward grade and of done don't ounce mine end mine have that that just we the it

We we will are in work that the we've anticipating with last. life that extend probably done mine the the

it's cash on net-net to go be it's better, be more flow all going longer. going it's earlier and going So, to to

Larry Radford

the about $XX with in in reduction that’s savings. million And development

Operator

last question Pipes Riley Lucas line of is FBR. B. from with coming our And the

Your line is now open.

Unidentified Analyst

made question will But Friday remote whether at and miner vein this if miner Lucky I missed asking vein Matt. apologize, the the remote to definitive up for a follow have the This I Lucas not actually utilized is Nevada? This be wanted you is and on Matt, earlier. I decision on there.

Phil Baker

had. we No,

Phil Baker

well for call. everyone Okay, us joining thanks on the

We call. to are Have good them questions, happy day. Thanks a a very I take you give have or more Mike if just much.

Operator

you Thank may you your day. you. This the concludes And today's and ladies program and now gentlemen conference. Good in for disconnect. thank participation