Rich History
121 years of building and operating mines
U.S.-Based Operations
two silver mines and four district-sized
land packages (U.S./Mexico)
Low Cash Costs
strong silver margin with cash flow generation
Strong Balance Sheet
$233 million in cash and no debt (June 30, 2012)
quarterly common stock dividend
stock repurchase program
Growth
advancing organic growth projects and
evaluating M&A opportunities
INVES TOR FACT SHEET
September 2012
Underground at Lucky Friday (top left).
Miners on break at Greens Creek (middle).
Exploration in North Idaho (above).
Lucky Friday head frame (bottom left).
Financial Highlights
(dollars in thousands for the year ended Dec. 31)
2007
2008
2009
$ 157,640 $ 204,665 $ 312,548
53,197
(66,563)
67,826
64,995
11,046
119,165
373,123
36,470
104,678
Sales of products
Net income (loss)
Cash provided by operating activities
Cash and cash equivalents at end of reporting period
2010
$ 418,813
48,983
197,809
283,606
2011
$ 477,634
151,164
69,891
266,463
H1/2012
$ 158,172
15,096
31,240
233,327
Cash Flow from Operating Activities
Share Performance
(millions)
Actual
Pro-forma
$60.9
Q1 2011
$66.3
Q2 2011
$60.7
NYSE: HL
as of September 28, 2012
$50.0(1)
Q3 2011
$31.2
Q4 2011
Share Price:
$ 6.55
52-Week Range:
$ 3.70 - $ 7.00
Basic Shares:
285.3 million*
Fully Diluted:
310 million*
Market Capitalization:
$ 1.8 billion
H1/2012
$(118.0)
*as of June 30, 2012
(1) Operating cash flow for 2011 was $69.9 million after environmental litigation settlement payment of $168
million in the fourth quarter.
Low Cash Costs
Cash Margin
$27.05
$30
$20
Cash Cost Per
Ounce
$22.70
$25
$13.78
$14.40
$15.63
$16.59
$10.20
$13.72
$4.20
$1.91
2008
2009
Realized Silver
Price
$34.35
$34.15
$15
$26.02
$24.16
$10
$5
$0
($5)
($2.81)
2007
Reconciliation of Cash Costs per Ounce to Generally Accepted Accounting Principles (GAAP)
(dollars and ounces in thousands, except per ounce – unaudited)
2007
2008
Total cash costs(1)
$ (15,873) $
36,621
Divided by silver ounces produced
5,643
8,709
Total cash cost per ounce produced
$
(2.81) $
4.20
Reconciliation to GAAP:
Total cash costs
Depreciation, depletion and amortization
Treatment costs
By-product credits
Change in product inventory
Suspension-related costs (2)
Reclamation and other costs
Costs of sales and other direct production costs and
depreciation, depletion and amortization (GAAP)
$36.59
$35.30
$35
$/oz
Total cash cost per ounce of silver
represents a non-U.S. Generally
Accepted Accounting Principles (GAAP)
measurement. A reconciliation of total
cash costs to cost of sales and other
direct production costs and depreciation,
depletion and amortization (GAAP) can
be found below. Realized prices are
calculated by dividing gross revenues for
each metal by the payable quantities of
each metal included in the concentrate
and doré sold during the period.
$40
$
$
2009
20,958
10,989
1.91
($1.46)
2010
$
$
2010
(15,435)
10,566
(1.46)
$
$
$1.15
$2.24
$1.03
2011
Q1/12
Q2/12
2011
10,934
9,483
1.15
$
$
Q1/12
2,976
1,329
2.24
$
$
Q2/12
1,410
1,365
1.03
$
(15,873)
12,323
(27,617)
112,079
(1,261)
–
203
$
36,621
35,207
(70,776)
164,963
20,254
–
537
$
20,958
62,837
(80,830)
206,608
310
–
1,596
$
(15,435)
60,011
(92,144)
267,272
3,660
–
630
$
10,934
47,066
(99,019)
254,372
(4,805)
4,135
(44)
$
2,976
9,661
(17,695)
46,353
1,805
–
(149)
$
1,410
9,879
(16,164)
45,352
2,101
–
473
$
79,854
$
186,806
$
211,479
$
223,994
$
212,639
$
42,951
$
43,051
(1) Cash cost per ounce of silver represents a non-U.S. Generally Accepted Accounting Principles (GAAP) measurement that the Company believes provide management and investors an indication
of net cash flow. Management also uses this measurement for the comparative monitoring of performance of mining operations period-to-period from a cash flow perspective. “Total cash cost per
ounce” is a measure developed by gold companies in an effort to provide a comparable standard; however, there can be no assurance that our reporting of this non-GAAP measure is similar to
that reported by other mining companies. Cost of sales and other direct production costs and depreciation, depletion and amortization, was the most comparable financial measures calculated
in accordance with GAAP to total cash costs.
(2) Various accidents and other events resulted in temporary suspensions of production at the Lucky Friday mine during 2011. Care-and-maintenance, mine rehabilitation, investigation, and other costs
incurred during the suspension periods not related to production have been excluded from total cash costs and the calculation of total cash cost per ounce produced.
Operating Properties
Greens Creek
Admiralty Island, Alaska
Silver Reserves – 98 million ounces
The 100%-owned Greens Creek underground mine is
located in southeast Alaska and produces silver, gold,
lead and zinc concentrates. In 2008, Hecla acquired
Rio Tinto’s remaining 70% interest in the operation,
nearly doubling its overall silver reserves and
production. In the second quarter of 2012, Greens
Creek produced 1.4 million ounces of silver at a cash
cost per ounce of $1.03, net of by-products. Greens
Creek is one of the world’s largest high-grade, low-cost
silver mines, with more than 200 million ounces
produced in the last 20 plus years, during which time it
has maintained an 8- to 10-year mine life.
Lucky Friday
Mullan, Idaho
Silver Reserves – 49 million ounces
The Lucky Friday silver mine is located in one of the
world’s most prolific silver-producing districts: North
Idaho’s Silver Valley. It is the deepest operating mine
in the United States and has been in commercial
production since 1942. Over the past 70 years, more
than 150 million ounces of silver have been mined.
In 2011, Lucky Friday produced 3.0 million ounces
of silver with an average ore grade of 10.69 ounces
of silver per ton. During the second quarter of 2012,
rehabilitation work on the Silver Shaft was completed
past the 4900 level, an important milestone for
development work to resume. The resumption of
development work, including construction of a bypass
drift on the 5900 level, is part of a plan that has
been submitted to MSHA. This development plan will
prepare the mine for resumption of operations, which
is targeted for the first quarter of 2013.
Exploration
For more than 10 years, Hecla’s strategy has been
to build a solid asset base through acquisition and
consolidation of district-sized land packages in four
world-class mining areas. Exploration in proximity to
our operating mines continues to add new resources
and convert those to reserves. Significant progress has
been made to define new resources at the Star mine
in the Silver Valley and at the San Juan Silver property
in Creede, CO. A recent, high-grade discovery on the
Andrea vein at our San Sebastian property in Mexico
will provide a complimentary resource to the Hugh
Zone and could re-establish production in Mexico.
Four Key Growth Initiatives
Lucky Friday #4 Shaft (Mullan, Idaho)
Once the Lucky Friday rehabilitation work is complete,
construction of the #4 Shaft is expected to resume
and will take approximately three years. The #4 Shaft
is expected to increase silver production by 60% from
approximately 3 million to 5 million ounces per year,
mainly due to an expected increase in grade from
10.4 to 14.1 ounces of silver per ton.
San Sebastian (Durango, Mexico)
Options for accessing the existing resources at the
Hugh Zone and a new mine plan have been
completed. A preliminary economic analysis is
expected to be completed in Q3 2012. A work plan
and drill program to define the hydrology of the
Andrea area have been completed and preliminary
mine designs have begun to compliment potential
production from the Hugh Zone.
Star (Silver Valley, ID)
Underground drilling was initiated in Q4 2011. With
completion of the scoping study to evaluate the
mineability of the “Upper Country” (above the water
table at the 2500 level), a preliminary economic
analysis is expected to be completed in Q3 2012. In
addition, a dewatering study which is evaluating
re-opening the mine below the current water level is
also expected to be completed in Q3 2012.
Rehabilitation work on the #5 Shaft continues which
will provide for secondary surface access.
San Juan Silver (Creede, CO)
Equity ramp rehabilitation was completed and
underground drilling initiated in Q4 2011. Drilling to
date has encountered high-grade intercepts. New
Bulldog decline portal construction began in Q4
2011. The design of the decline is being finalized with
decline development expected to occur in
September 2012. A study is under way to evaluate
re-opening the Bulldog mine and completion is
expected in Q4 2012.
Company Profile
Hecla Mining Company is the largest and
lowest-cost silver producer in the United States
with over a century of operating experience.
Hecla was established in 1891 in North Idaho’s
Silver Valley and trades on the New York Stock
Exchange under the symbol “HL.”
Hecla operates the Greens Creek and Lucky
Friday mines in Alaska and Idaho, and owns
district-sized land packages in the Silver Valley
in Idaho, San Juan Silver in Creede, Colorado,
and San Sebastian in Durango, Mexico. During
2012, the Lucky Friday will be conducting
rehabilitation work with operations and
production expected to resume as planned in
early 2013. Hecla has developed a solid base
with long-life, low-cost mines; organic growth
opportunities; exploration upside; an excellent
cash position with no debt; and recently
introduced a new common stock dividend.
Largest Institutional Owners
(appx. 51% ownership, reported as of 09/28/12)
Van Eck Associates Corporation
BlackRock Institutional Trust Company, N.A.
Vanguard Group, Inc.
State Street Global Advisors (US)
Neuflize OBC Investissements
Royce & Associates, LLC
New Jersey Division of Investment
Jennison Associates LLC
C.S. McKee, L.P.
Global X Management Company LLC
Analyst Coverage
Michael Jalonen, BofA Merrill Lynch
Andrew Kaip, BMO Capital Markets
Steven Butler, Canaccord Genuity
Jorge Beristan, Deutsche Bank
John Bridges, JP Morgan
Michael Curran, RBC Capital Markets
Chris Lichtenheldt, UBS Securities
Greens Creek
Admiralty Island, Alaska
operating property
Corporate Office
Vancouver, BC
Corporate Office
Coeur d’Alene, Idaho
Silver Valley
Wallace, Idaho
pre-development project
Lucky Friday
Mullan, Idaho
operating property
San Juan Silver
Creede, Colorado
pre-development project
San Sebastian
Durango, Mexico
pre-development project
Directors
Contacts
Ted Crumley, Chairman
Phillips S. Baker, Jr.
John H. Bowles
George R. Nethercutt, Jr.
Terry V. Rogers
Charles B. Stanley
Dr. Anthony P. Taylor
U.S. Corporate Office
6500 N. Mineral Drive, Suite 200
Coeur d’Alene, Idaho 83815-9408
208.769.4100
Canadian Corporate Office
Suite 970, 800 West Pender Street
Vancouver, BC, Canada V6C 2V6
604.682.6201
Officers
Phillips S. Baker, Jr., President & CEO
James A. Sabala, Sr. VP – Chief Financial Officer
Larry Radford, VP – Operations
Dean W. McDonald, VP – Exploration
Don Poirier, VP – Corporate Development
David C. Sienko, VP – General Counsel
Investor Inquiries
800.432.5291
hmc-info@hecla-mining.com
www.hecla-mining.com
Transfer Agent
American Stock Transfer & Trust Co.
69 Maiden Lane, Plaza Level
New York, NY 10038
800.937.5449
Auditors
BDO USA, LLP
Cautionary Statements
Statements made which are not historical facts, such as anticipated payments, litigation outcome, production, sales of assets, exploration results and plans, prospects and opportunities
including reserves, resources, and mineralization, costs, and prices or sales performance are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of
1995. Words such as “may”, “will”, “should”, “expects”, “intends”, “projects”, “believes”, “estimates”, “targets”, “anticipates” and similar expressions are used to identify these forward-looking
statements. Forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those projected, anticipated, expected or implied.
These risks and uncertainties include, but are not limited to, metals price volatility, volatility of metals production and costs, environmental and litigation risks, operating risks, project development
risks, political and regulatory risks, labor issues, ability to raise financing and exploration risks and results. Refer to the company’s Form 10-K and 10-Q reports for a more detailed discussion of
factors that may impact expected future results. The company undertakes no obligation and has no intention of updating forward-looking statements other than as may be required by law.
©2012 Hecla Mining Company