UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2025
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission File Number: 1-8491
HECLA MINING COMPANY
(Exact Name of Registrant as Specified in its Charter)
Delaware
77-0664171
(State or other jurisdiction of
incorporation or organization)
(I.R.S. EmployerIdentification No.)
6500 N. Mineral Drive, Suite 200
Coeur d’Alene, Idaho
83815-9408
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (208) 769-4100
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
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,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☑
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
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 August 1, 2025
Common stock, par value
$0.25 par value per share
669,983,628
Hecla Mining Company
Form 10-Q
For the Quarter Ended June 30, 2025
INDEX*
Page
PART I.
FINANCIAL INFORMATION
3
Item 1.
Financial Statements (Unaudited)
Condensed Consolidated Statements of Operations and Comprehensive Income - Three Months Ended and Six Months Ended June 30, 2025 and 2024
Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 2025 and 2024
4
Condensed Consolidated Balance Sheets - June 30, 2025 and December 31, 2024
6
Condensed Consolidated Statements of Changes in Stockholders' Equity – Three Months Ended and Six Months Ended June 30, 2025 and 2024
7
Notes to Condensed Consolidated Financial Statements (unaudited)
9
Forward-Looking Statements
25
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
26
Overview
Consolidated Results of Operations
27
Reconciliation of Total Cost of Sales 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
Financial Liquidity and Capital Resources
52
Contractual Obligations, Contingent Liabilities and Commitments
55
Critical Accounting Estimates
Off-Balance Sheet Arrangements
56
Guarantor Subsidiaries
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
59
Item 4.
Controls and Procedures
60
PART II.
OTHER INFORMATION
61
Legal Proceedings
Item 1A.
Risk Factors
Mine Safety Disclosures
Item 5.
Other Information
Item 6.
Exhibits
62
Signatures
63
*Items 2 and 3 of Part II are omitted as they are not applicable.
2
Part I - Financial Information
Item 1. Financial Statements
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)
(Dollars and shares in thousands, except for per-share amounts)
Three Months Ended
Six Months Ended
June 30, 2025
June 30, 2024
Sales
$
304,027
245,657
565,366
435,185
Cost of sales and other direct production costs
147,344
140,464
296,294
261,925
Depreciation, depletion and amortization
37,159
53,763
75,544
102,670
Total cost of sales
184,503
194,227
371,838
364,595
Gross profit
119,524
51,430
193,528
70,590
Other operating expenses:
General and administrative
12,540
14,740
24,539
25,956
Exploration and pre-development
8,809
6,682
13,310
11,024
Ramp-up and suspension costs
4,165
5,538
7,471
20,061
Provision for closed operations and environmental matters
844
1,153
1,634
2,139
Other operating (income) expense, net
(590
)
(17,283
463
(34,254
Total other operating expenses
25,768
10,830
47,417
24,926
Income from operations
93,756
40,600
146,111
45,664
Other expense:
Interest expense
(11,099
(12,505
(22,650
(25,149
Fair value adjustments, net
9,615
5,002
13,242
3,150
Net foreign exchange (loss) gain
(3,517
2,673
(3,873
6,655
Other income
1,511
1,180
2,453
2,692
Total other expense
(3,490
(3,650
(10,828
(12,652
Income before income and mining taxes
90,266
36,950
135,283
33,012
Income and mining tax provision
(32,561
(9,080
(48,706
(10,895
Net income
57,705
27,870
86,577
22,117
Preferred stock dividends
(138
(276
Net income applicable to common stockholders
57,567
27,732
86,301
21,841
Comprehensive income:
Change in fair value of derivative contracts designated as hedge transactions
3,253
(6,488
5,687
(11,891
Comprehensive income
60,958
21,382
92,264
10,226
Basic income per common share after preferred dividends
0.09
0.04
0.14
Diluted income per common share after preferred dividends
Weighted average number of common shares outstanding - basic
636,928
617,106
634,339
616,649
Weighted average number of common shares outstanding - diluted
639,739
622,206
636,991
620,359
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
Operating activities:
Non-cash elements included in net income:
77,086
105,147
Inventory adjustments
2,370
9,896
(13,242
(3,150
Provision for reclamation and closure costs
3,815
3,606
Stock-based compensation
4,923
4,146
Deferred income taxes
39,509
5,688
Net foreign exchange loss (gain)
3,873
(6,655
Other non-cash items, net
(1,544
(196
Change in assets and liabilities:
Accounts receivable
(10,439
(17,114
Inventories
(20,821
(30,873
Other current and non-current assets
12,691
8,342
Accounts payable, accrued and other current liabilities
3,819
(2,301
Accrued payroll and related benefits
7,823
3,820
Accrued taxes
2,006
(1,016
Accrued reclamation and closure costs and other non-current liabilities
(912
(5,659
Net cash provided by operating activities
197,534
95,798
Investing activities:
Additions to property, plant and mine development
(112,138
(98,009
Proceeds from investment sales
3,696
—
Proceeds from asset dispositions
128
1,274
Purchases of investments
(73
Net cash used in investing activities
(108,314
(96,808
Financing activities:
Proceeds from sale of common stock, net
174,132
1,103
Acquisition of treasury stock
(885
(1,197
Borrowing of debt
133,000
67,000
Repayment of debt
(117,000
(133,000
Dividends paid to common and preferred stockholders
(5,023
(7,994
Repayments of finance leases and other
(4,220
(5,505
Net cash provided by (used in) financing activities
180,004
(79,593
Effect of exchange rates on cash
479
(1,180
Net increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents
269,703
(81,783
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period
28,045
107,539
Cash, cash equivalents and restricted cash and cash equivalents at end of period
297,748
25,756
Reconciliation of cash and cash equivalents and restricted cash and cash equivalents above
Cash and cash equivalents
296,565
24,585
Non-current restricted cash and cash equivalents
1,183
1,171
Total cash and cash equivalents and restricted cash and cash equivalents as reported on the consolidated cash flow statement
Supplemental disclosure of cash flow information:
Cash paid for interest
21,387
23,442
Cash paid for income and mining taxes, net
6,380
4,999
Significant non-cash investing and financing activities:
Common stock issued as incentive compensation
2,503
3,355
Common stock issued for 401(k) match
2,605
2,322
5
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except shares)
December 31, 2024
ASSETS
Current assets:
26,868
Accounts receivable:
Trade
48,002
31,515
Other, net
15,387
17,538
Inventories:
Product inventories
58,203
34,962
Materials and supplies
72,644
69,974
Other current assets
24,059
33,295
Total current assets
514,860
214,152
Investments
44,107
33,897
Restricted cash and cash equivalents
1,177
Property, plants, equipment and mine development, net
2,714,439
2,694,119
Operating lease right-of-use assets
8,834
7,544
Other non-current assets
25,932
30,171
Total assets
3,309,355
2,981,060
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities
87,909
88,957
25,915
22,834
8,324
6,312
Current debt
35,384
33,617
Finance leases
7,770
8,169
Accrued reclamation and closure costs
8,836
13,748
Accrued interest
14,372
14,316
Other current liabilities
4,452
9,885
Total current liabilities
192,962
197,838
119,326
111,162
Long-term debt including finance leases
521,568
508,927
Deferred tax liabilities
155,121
110,266
Other non-current liabilities
10,345
13,353
Total liabilities
999,322
941,546
Commitments and contingencies (Notes 4, 7, 8, and 11)
STOCKHOLDERS’ EQUITY
Preferred stock, 5,000,000 shares authorized:
Series B preferred stock, $0.25 par value, 157,756 shares issued and outstanding, liquidation preference — $7,889
39
Common stock, $0.25 par value, authorized 1,250,000,000 shares; issued June 30, 2025 — 671,843,297 shares and December 31, 2024 — 640,547,918 shares
167,872
160,052
Capital surplus
2,594,492
2,418,149
Accumulated deficit
(411,975
(493,529
Accumulated other comprehensive loss, net
(4,579
(10,266
Less treasury stock, at cost; June 30, 2025 — 8,768,372 and December 31, 2024 — 8,813,127 shares issued and held in treasury
(35,816
(34,931
Total stockholders’ equity
2,310,033
2,039,514
Total liabilities and stockholders’ equity
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)
(Dollars are in thousands, except for share and per share amounts)
Three Months Ended June 30, 2025
Series BPreferredStock
CommonStock
Capital Surplus
AccumulatedDeficit
AccumulatedOtherComprehensive (Loss) Income, net
TreasuryStock
Total
Balances, April 1, 2025
$39
$160,228
$2,423,631
$(467,168)
$(7,832)
$(34,931)
$2,073,967
Stock-based compensation expense
1,953
Stock-based compensation distributed (669,735 shares)
287
(287)
(885)
Common stock issued to directors (179,836 shares)
41
993
1,034
Common stock issued for 401(k) match (229,832 shares)
64
1,322
1,386
Common stock ($0.00375 per share) and Series B Preferred stock ($0.875 per share) dividends declared
(2,512)
Common stock issued under ATM program (29,008,536 shares), net
7,252
166,880
Other comprehensive income
Balances, June 30, 2025
$167,872
$2,594,492
$(411,975)
$(4,579)
$(35,816)
$2,310,033
Three Months Ended June 30, 2024
Balances, April 1, 2024
$156,447
$2,350,249
$(513,608)
$434
$1,958,630
2,157
Stock-based compensation distributed (817,231 shares)
205
(205)
Common stock issued as compensation to interim CEO (10,831 shares)
Common stock issued to directors (145,687 shares)
37
733
770
Common stock ($0.00625 per share) and Series B Preferred stock ($0.875 per share) dividends declared
(4,000)
Common stock issued for 401(k) match (212,854 shares)
53
1,018
1,071
Other comprehensive loss
(6,488)
Balances, June 30, 2024
$156,745
$2,354,004
$(489,738)
$(6,054)
$1,980,065
Six Months Ended June 30, 2025
Balances, January 1, 2025
3,889
Stock-based compensation distributed (1,146,510 shares)
(287
Stock issued for incentive compensation (477,775 shares)
119
2,384
Common stock ($0.0075 per share) and Series B Preferred stock ($1.75 per share) dividends declared
Common stock issued for 401(k) match (482,722 shares)
121
2,484
Six Months Ended June 30, 2024
Balances, January 1, 2024
156,076
2,343,747
(503,861
5,837
(33,734
1,968,104
3,321
Stock-based compensation distributed (1,022,745 shares)
256
(256
(144
Stock issued for incentive compensation (754,191 shares)
189
3,166
(1,053
2,302
Common stock ($0.0125 per share) and Series B Preferred stock ($1.75 per share) dividends declared
Common stock issued under ATM program (248,561 shares), net
1,041
Common stock issued for 401(k) match (488,424 shares)
122
2,200
156,745
2,354,004
(489,738
(6,054
1,980,065
8
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 Form 10-Q and do not include all information and disclosures required annually by accounting principles generally accepted in the United States of America (“GAAP”). Therefore, this information should be read in conjunction with the Company’s consolidated financial statements and notes contained in our annual report on Form 10-K for the year ended December 31, 2024. The consolidated December 31, 2024 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 the fair presentation 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 and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.
Note 2. Business Segments and Sales of Products
We discover, acquire and develop mines and other mineral interests and produce and market (i) concentrates containing silver, gold, lead, zinc and copper, (ii) carbon material containing silver and gold, and (iii) doré containing silver and gold. We are currently organized and managed in four segments: Greens Creek, Lucky Friday, Keno Hill and Casa Berardi.
The Company regularly reviews its segment reporting for alignment with its strategic goals and operational structure as well as for evaluation of business performance and the allocation of resources by Hecla's President and Chief Executive Officer, who has been identified as our Chief Operating Decision Maker ("CODM"). The CODM evaluates the performance for all of our reportable segments based on segment gross profit or loss. For all segments, the CODM uses segment gross profit or loss to assess segment performance and allocate resources for each segment predominantly in the annual budget and forecasting process. The CODM considers budget to actual variances on a monthly basis when making decisions about allocating capital and personnel to the segments. Significant segment expenses that are components of total cost of goods sold and drive the financial performance of our reportable segments are (i) salaries, wages and other benefits, (ii) contractors, (iii) consumables (iv) change in product inventory and (v) other direct production costs. In further evaluating the operational performance of each segment, the CODM also considers the amount of metals production versus budget, and the grade of the metal processed.
General corporate activities not associated with operating mines and their various exploration activities, as well as idle properties and environmental remediation services in the Yukon, Canada, are presented as “other.” The nature of the items that reconcile gross profit to income before income and mining taxes are not related to our reportable segments.
The tables below present information about our reportable segments for the three and six months ended June 30, 2025 and 2024 (in thousands):
Three months ended June 30, 2025
Greens Creek
Lucky Friday
Keno Hill
Casa Berardi
Other
Metal sales
122,002
64,273
26,121
85,035
297,431
Environmental remediation services
6,596
Intersegment sales
1,201
Reconciliation of sales
27,322
305,228
Elimination of intersegment sales
(1,201
Total consolidated sales
Salaries, wages and other benefits
18,281
14,559
7,209
12,164
138
52,351
Contractors
1,557
3,828
3,886
11,449
6,419
27,139
Materials and consumables
25,400
10,899
8,050
14,730
68
59,147
Product inventory change
(9,234
(476
1,968
65
(7,677
Other direct production costs
10,020
201
(373
6,536
16,384
12,897
13,275
5,141
5,846
Gross profit (loss)
63,081
21,987
240
34,245
(29
Other operating expenses (a)
Other Expense:
Foreign exchange loss, net
Capital additions
8,397
15,942
17,045
15,367
1,292
58,043
(a) Other operating expense items include general and administrative, exploration and pre-development, ramp-up and suspension costs, provision for closed operations and environmental matters, and other operating (income) expense, net.
10
Three months ended June 30, 2024
95,659
59,071
28,951
58,622
242,303
3,354
1,140
30,091
246,797
(1,140
Salaries, wages and employee benefits
17,675
13,155
7,831
12,607
43
51,311
1,782
3,156
5,971
6,827
3,173
20,909
20,465
8,735
7,239
14,900
339
51,678
(2,904
219
1,107
550
(1,028
8,453
1,552
3,836
5,445
71
19,357
Transfer to ramp-up and suspension costs(a)
-
(1,763
11,316
10,707
4,730
27,010
38,872
21,547
(8,717
(272
Other operating expenses (b)
Foreign exchange gain, net
11,704
10,818
14,533
12,376
989
50,420
(a) Total cost of sales in excess of sales value are transferred to ramp-up and suspension costs.
(b) Other operating expense items include general and administrative, exploration and pre-development, ramp-up and suspension costs, provision for closed operations and environmental matters, and other operating (income) expense, net.
11
Six months ended June 30, 2025
240,145
127,467
43,030
141,040
551,682
13,684
2,187
45,217
567,553
(2,187
36,534
29,335
13,681
25,354
196
105,100
2,462
7,691
7,437
22,114
13,350
53,054
51,065
22,322
14,044
29,301
174
116,906
(8,333
706
(5,994
(3,196
(16,817
20,345
(419
4,641
13,484
38,051
26,486
26,700
7,943
14,415
111,586
41,132
1,278
39,568
(36
19,156
31,388
27,481
31,624
2,489
112,138
(a) Other operating expense items include general and administrative, exploration and pre-development, provision for closed operations and environmental matters, ramp-up and suspension costs and other operating (income) expense, net.
12
Six months ended June 30, 2024
192,969
94,411
39,797
100,207
427,384
7,801
1,461
41,258
436,646
(1,461
34,982
24,737
14,567
25,351
110
99,747
3,431
5,959
10,709
12,050
6,762
38,911
46,918
18,903
14,825
27,727
524
108,897
(5,100
(1,882
(4,653
(1,189
(12,824
20,654
907
6,452
11,700
115
39,828
(2,200
(10,434
(12,634
25,759
18,619
8,331
49,961
66,325
29,368
(25,393
290
20,531
25,806
24,879
25,692
1,101
98,009
Other sales for the three and six months ended June 30, 2025 and 2024 is solely comprised of revenue from our environmental remediation services subsidiary in the Yukon. Keno Hill sold $1.2 million and $2.2 million during the three and six months ended June 30, 2025, respectively, and $1.1 million and $1.5 million during the three and six months ended June 30, 2024, of precious metals concentrate to Greens Creek which is eliminated upon consolidation.
Lucky Friday's income from operations for the three and six months ended June 30, 2024 included $17.8 and $35.2 million, respectively, of business interruption and property damage insurance proceeds received during the respective period related to the fire which suspended Lucky Friday's operations from August 2023 through January 8, 2024. The insurance proceeds were recorded as part of "Other operating expense (income), net" in our Condensed Consolidated Statements of Operations and Comprehensive Income.
Sales by metal for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2025
2024
Silver
122,661
112,692
240,814
198,925
Gold
123,721
82,469
210,909
149,884
Lead
21,476
23,928
43,582
43,411
Zinc
31,138
32,496
64,263
57,460
Copper
979
1,370
Less: Smelter and refining charges
(2,544
(9,282
(9,256
(22,296
Total metal sales
Total sales
13
Sales of metals for the three and six months ended June 30, 2025 include net gains of $3.8 million and net losses of $1.3 million, respectively, on financially-settled forward contracts for silver, gold, lead and zinc and for the three and six months ended June 30, 2024 include net losses of $12.5 million and $9.4 million, respectively, on such contracts. See Note 8 for more information.
The following table presents total assets by reportable segment as of June 30, 2025 and December 31, 2024 (in thousands):
Total assets:
567,581
564,334
619,273
587,945
426,580
413,982
701,178
687,080
994,743
727,719
Note 3. Income and Mining Taxes
Major components of our income and mining tax for the three and six months ended June 30, 2025 and 2024 are as follows (in thousands):
June 30,
Current:
Domestic
(2,713
(1,961
(5,328
(2,953
Foreign
(3,560
(1,275
(3,869
(2,254
Total current income and mining tax provision
(6,273
(3,236
(9,197
(5,207
Deferred:
(19,288
(11,440
(31,012
(16,623
(7,000
5,596
(8,497
10,935
Total deferred income and mining tax provision
(26,288
(5,844
(39,509
(5,688
Total income and mining tax provision
The income and mining tax provision for the three and six months ended June 30, 2025 and 2024 varies from the amounts that would have resulted from applying the statutory tax rates to pre-tax income or loss due primarily to the impact of taxation in foreign jurisdictions, non-recognition of net operating losses and foreign exchange gains and losses in certain jurisdictions.
For the three and six months ended June 30, 2025, we used the annual effective tax rate method to calculate the tax provision. Valuation allowances on Nevada, Mexico and certain Canadian net operating losses were treated as discrete adjustments to the tax provision.
On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the U.S. The OBBBA permanently extends multiple tax provisions of the 2017 Tax Cuts and Jobs Act, as well as repeals, modifies and introduces various other tax provisions. We do not anticipate the OBBBA to have a material impact to the Company's consolidated financial statements. We continue to evaluate the impact the OBBBA may have on the Company as the legislation has various future effective dates.
14
Note 4. Employee Benefit Plans
We sponsor defined benefit pension plans covering all non-hourly U.S. employees hired prior to July 2024 and our hourly workers at the Lucky Friday mine, as well as and a Supplemental Excess Retirement Plan covering certain eligible employees.
Net periodic pension cost (benefit) for the plans consisted of the following for the three and six months ended June 30, 2025 and 2024 (in thousands):
Three Months EndedJune 30,
Six Months EndedJune 30,
Service cost
1,068
915
2,136
1,830
Interest cost
2,094
2,075
4,188
4,151
Expected return on plan assets
(3,251
(3,136
(6,502
(6,272
Amortization of prior service cost
20
66
40
132
Amortization of net loss
326
16
652
31
Net periodic pension cost (benefit)
257
(64
514
(128
For the three and six months ended June 30, 2025 and 2024, the service cost component of net periodic pension benefit is included in the same line items of our condensed consolidated financial statements as other employee compensation costs. The net benefit related to all other components of net periodic pension cost of $0.8 million and $1.6 million, for the three and six months ended June 30, 2025, respectively, and $1.0 million and $2.0 million, respectively, for the three and six months ended June 30, 2024, is included in other income on our condensed consolidated statements of operations and comprehensive income.
Note 5. Earnings Per Common Share
We calculate basic earnings per common share on the basis of the weighted average number of shares of common stock outstanding during the period. Diluted earnings 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, unvested performance based units and convertible preferred stock (collectively referred to as dilutive units) for all periods in which we have reported net income. The 2025 dilutive units exclude the impact of 2,068,000 warrants exercisable at $8.02 per warrant, due to their anti-dilutive impact.
The following table represents net income per common share – basic and diluted (in thousands, except income per share):
Numerator
Denominator
Basic weighted average common shares
Dilutive units
2,811
5,100
2,652
3,710
Diluted weighted average common shares
Basic earnings per common share
Diluted earnings per common share
Note 6. Stockholders’ Equity
Authorized Share Capital
15
At our annual meeting of shareholders on May 21, 2025, our shareholders approved an amendment to our restated certificate of incorporation increasing the number of authorized shares of our common stock from 750,000,000 to 1,250,000,000.
At-The-Market ("ATM") Equity Distribution Agreement
Pursuant to an equity distribution agreement dated February 18, 2021, we may offer and sell up to 60 million shares of our common stock from time to time to or through sales agents. Sales of the shares, if any, will be made by means of ordinary brokers transactions or as otherwise agreed between the Company and the agents as principals. Whether or not we engage in sales from time to time may depend on a variety of factors, including our share price, our cash resources, potential use of proceeds, 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 under the agreement are registered under the Securities Act of 1933, as amended, pursuant to a shelf registration statement on Form S-3. During the three months ended June 30, 2025, we sold 29,008,536 shares under the agreement for proceeds of $174.1 million, net of commissions and fees of $2.7 million. There were no sales in the first quarter. See Note 13 for more information.
Stock-based Compensation Plans
The Company has stock incentive plans for executives, directors and eligible employees, under which performance shares, restricted stock and shares of common stock are granted. Stock-based compensation expense for restricted stock units and performance-based grants to employees, totaled $3.0 million and $4.9 million for the three and six months ended June 30, 2025, respectively, and $3.0 million and $4.1 million for the three and six months ended June 30, 2024, respectively. At June 30, 2025, there was $16.1 million of unrecognized stock-based compensation cost which is expected to be recognized over a weighted-average remaining vesting period of 1.6 years.
The following table summarizes the stock-based compensation grants awarded during the six months ended June 30, 2025:
Grant date
Award type
Number granted
Grant date fair value per share
January 15, 2025
Restricted stock
325,016
5.41
March 24, 2025
23,826
5.87
June 23, 2025
1,613,885
5.82
Performance based
840,205
0.06
Pursuant to our directors stock plan 179,836 shares and 145,687 shares with a value of $1 million and $0.8 million were awarded to our directors and recorded as stock-based compensation expense during the three and six months ended June 30, 2025 and June 30, 2024, respectively. During the three and six months ended June 30, 2024, 10,831 shares with a value $0.05 million were paid to our interim CEO as part of her compensation.
In connection with the vesting of incentive compensation, certain employees have in the past, at their election and when permitted by us, chosen to satisfy their minimum tax withholding obligations through net share settlement, pursuant to which the Company withholds the number of shares necessary to satisfy such withholding obligations and pays the obligations in cash. As a result, in the three and six months ended June 30, 2025, we withheld 151,976 shares valued at approximately $0.9 million, or approximately $5.82 per share. During the six months ended June 30, 2024, we withheld 277,966 shares valued at approximately $1.2 million, or approximately $4.31 per share.
Common Stock Dividends
During the first two quarters of 2025, our Board of Directors have declared and we have paid a quarterly dividend of $0.00375 per common share, pursuant to our dividend policy.
Accumulated Other Comprehensive (Loss) Income, Net
The following table lists the beginning balance, quarterly activity and ending balances, net of income and mining tax, of each component of “Accumulated other comprehensive income (loss), net” (in thousands):
Changes in fair value of derivative contracts designated as hedge transactions
AdjustmentsFor Pension Plans
TotalAccumulatedOtherComprehensiveIncome (Loss), Net
Balance January 1, 2025
5,994
(16,260
Change in fair value of derivative contracts
2,787
Gains and deferred gains transferred from accumulated other comprehensive income
(353
Balance March 31, 2025
8,428
(7,832
Changes in fair value of derivative contracts
5,748
(2,495
Balance June 30, 2025
11,681
Balance January 1, 2024
13,708
(7,871
(3,971
(1,432
Balance March 31, 2024
8,305
434
(4,545
(1,943
Balance June 30, 2024
1,817
Note 7. Debt, Credit Agreement and Leases
Our debt as of June 30, 2025 and December 31, 2024 consisted of our 7.25% Senior Notes due February 15, 2028 (“Senior Notes”), our Series 2020-A Senior Notes due July 9, 2025 (the “IQ Notes”) and any drawn amounts on our $225 million Credit Agreement, which is described separately below. The following tables summarize our current and long-term debt balances, including principal amounts outstanding under the Credit Agreement, as of June 30, 2025 and December 31, 2024 (in thousands):
Senior Notes
IQ Notes
Credit Agreement
Principal
475,000
35,358
39,000
549,358
Unamortized discount/premium and issuance costs
(2,360
(2,334
Total debt
472,640
547,024
Less: current debt
(35,384
Long-term debt
511,640
33,525
23,000
531,525
(2,816
92
(2,724
472,184
528,801
(33,617
495,184
The following table summarizes the scheduled annual future payments, including interest, for our Senior Notes, IQ Notes, and finance and operating leases as of June 30, 2025 (in thousands). Operating leases are included in other current and non-current liabilities
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on our condensed consolidated balance sheets. The amounts for the IQ Notes are stated in U.S. dollars (“USD”) based on the USD/Canadian dollar (“CAD”) exchange rate as of June 30, 2025. See Note 13 for more information.
Twelve-month period ending June 30,
Finance Leases
Operating Leases
2026
34,438
36,511
9,061
2,566
2027
6,424
1,320
2028
496,700
1,933
1,185
2029
1,159
2030
977
Thereafter
4,798
565,576
19,736
12,031
Less: effect of discounting
(2,039
(2,757
17,697
9,274
On May 3, 2024 we entered into an amended revolving credit agreement with various financial institutions (the "Lenders"), which provided the Company with borrowing capacity up to $225 million with a maturity date of July 21, 2028 (accelerated to August 15, 2027 if our Senior Notes are not refinanced by that date).
Proceeds of the revolving loans under the Credit Agreement may be used for general corporate purposes. The interest rate on the outstanding loans under the Credit Agreement is based on the Company’s net leverage ratio and is calculated at (i) Term Secured Overnight Financing Rate ("SOFR") plus 2% to 3.5% or (ii) Bank of America’s Base Rate plus 1% to 2.5% with Base Rate being the highest of (i) the Bank of America prime rate, (ii) the Federal Funds rate plus .50% or (iii) Term SOFR plus 1.00%. For each amount drawn, we elect whether we draw on a one, three or six month basis or annual basis for SOFR. If we elect to draw for greater than six months, we pay interest quarterly on the outstanding amount.
We are also required to pay a commitment fee of between 0.45% to 0.78750%, depending on our net leverage ratio. Letters of credit issued under the Credit Agreement bear a fee between 2.00% and 3.50% based on our net leverage ratio, as well as a fronting fee to each issuing bank at an agreed upon rate per annum on the average daily dollar amount of our letter of credit exposure.
Hecla Mining Company and certain of our subsidiaries are the borrowers under the Credit Agreement, while certain of our other subsidiaries are guarantors of the borrowers’ obligations under the Credit Agreement. As further security, the Credit Agreement is collateralized by a mortgage on the Greens Creek mine, the equity interests of subsidiaries that own the Greens Creek mine or are part of the Greens Creek Joint Venture and our subsidiary Hecla Admiralty Company (the “Greens Creek Group”), and by all of the Greens Creek Group’s rights and interests in the Greens Creek Joint Venture Agreement, and in all assets of the joint venture and of any member of the Greens Creek Group.
At June 30, 2025, we had net draws of $39.0 million outstanding at an interest rate of 6.7%, and $6.7 million of outstanding letters of credit under the Credit Agreement. Letters of credit that are outstanding reduce availability under the Credit Agreement.
We believe we were in compliance with all covenants under the Credit Agreement as of June 30, 2025.
Note 8. Derivative Instruments
General
Our current risk management policy provides that up to 75% of five years of our foreign currency, and 100% of our metals price exposure may be covered under a derivatives program, with certain other limitations. Our program also utilizes derivatives to manage price risk exposure created from when revenue is recognized from a shipment of concentrate until final settlement.
These instruments expose us to (i) credit risk in the form of non-performance by counterparties for contracts in which the contract price exceeds the spot price of the hedged commodity or foreign currency and (ii) price risk to the extent that the spot price or currency exchange rate exceeds the contract price for quantities of our production and/or forecasted costs covered under contract positions.
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Foreign Currency
Our wholly-owned subsidiaries owning the Casa Berardi operation and Keno Hill operation are USD-functional entities which routinely incur expenses denominated in CAD. Such expenses expose us to exchange rate fluctuations, for which we have a program to manage our exposure to fluctuations for these subsidiaries' future operating and capital costs denominated in CAD. The program related to forecasted cash operating costs at Casa Berardi and Keno Hill utilizes forward contracts to buy CAD, and only those related to Casa Berardi are designated as cash flow hedges. As of June 30, 2025, we have a total of 274 forward contracts outstanding to buy a total of CAD $234.1 million having a notional amount of USD $170.0 million to hedge the following exposures for 2025 through 2026:
As of June 30, 2025 and December 31, 2024, we recorded the following balances for the fair value of the foreign currency forward contracts (in millions):
December 31,
Balance sheet line item:
3.7
0.3
(1.1
(8.2
(0.1
(2.0
Net unrealized losses of $1.4 million related to the effective portion of the foreign currency forward contracts designated as hedges are included in accumulated other comprehensive (loss) income as of June 30, 2025. Unrealized gains and losses will be transferred from accumulated other comprehensive (loss) income to current earnings as the underlying operating expenses are recognized. We estimate $1.2 million in net unrealized losses included in accumulated other comprehensive (loss) income as of June 30, 2025 will be reclassified to current earnings in the next twelve months.
Net realized losses of $1.0 million and $2.8 million for the three and six months ended June 30, 2025, and net realized losses of $1.1 million and $1.5 million for the three and six months ended June 30, 2024, on contracts related to underlying expenses which have been recognized were transferred from accumulated other comprehensive (loss) income and included in cost of sales and other direct production costs.
Net gains of $5.4 million and $5.5 million for the three and six months ended June 30, 2025, and net losses of $0.5 million and $2.4 million for the three and six months ended June 30, 2024, respectively, were related to contracts not designated as hedges.
No net unrealized gains or losses related to ineffectiveness of the hedges are included in fair value adjustments, net on our consolidated statements of operations and comprehensive income for the three and six months ended June 30, 2025 and 2024, respectively.
Metals Prices
We are currently using financially-settled forward contracts to manage our exposure to:
The following tables summarize the quantities of metals committed under forward metals contracts at June 30, 2025 and December 31, 2024:
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Ounces/pounds under contract (in 000's except gold)
Average price per ounce/pound
(ounces)
(pounds)
Contracts on provisional sales
2025 settlements
870
1
20,889
10,637
35.52
3,463
1.41
0.99
Contracts on forecasted sales
16,976
20,117
N/A
1.38
1.00
2026 settlements
16,755
52,911
1.36
1.03
1,535
20,834
14,661
31.46
1.40
0.97
59,194
47,840
1.39
6,283
Since the first quarter of 2025, we have and continue to utilize financially-settled zero cost collars ("collars") to manage our exposure to changes in the price of silver contained in both our provisional and forecasted Keno Hill future concentrate shipments. These collars provide us a contractual right to receive at least the minimum price if market prices fall below this level, while limiting our potential gains to the maximum price under the collars, even if market prices rise higher. This strategy helps protect us from significant price drops while still allowing for some upside potential within this range. For the three and six months ended June 30, 2025, these collars had net losses of $0.8 million and $0.2 million, respectively. For accounting purposes, they are not designated as hedges.
The following table summarize the quantities of metals committed under collars at June 30, 2025.
Settlement Period
Production Protected
Minimum Price
Maximum Price
($)
100,000
33.50
35.43
1,515,000
30.07
41.15
150,000
32.00
49.42
We recorded the following balances for the fair value of the forward metals and collar contracts as of June 30, 2025 and December 31, 2024 (in millions):
10.2
11.5
2.4
6.6
(0.5
Net realized and unrealized gains of $14.5 million related to the effective portion of the forward metals contracts designated as hedges were included in accumulated other comprehensive income (loss) as of June 30, 2025. Unrealized gains and losses will be transferred from accumulated other comprehensive income (loss) to current earnings as the underlying forecasted sales are recognized. We estimate $13.4 million in net realized and unrealized gains included in accumulated other comprehensive income (loss) as of June 30, 2025 would be reclassified to current earnings in the next twelve months. The realized gains arose due to cash settlement of zinc contracts prior to maturity in 2022 and zinc and lead contracts during 2023 for net proceeds of $17.4 million and $8.5 million, respectively, of which $0.2 million remains to be recognized during the remainder of the year.
We recognized a net gain of $3.3 million, including a $3.5 million gain transferred from accumulated other comprehensive income (loss), and a net loss of $12.5 million, including a $3.0 million gain transferred from accumulated other comprehensive income (loss) during the three months ended June 30, 2025 and 2024, respectively. We recognized a net loss of $2.0 million, including a $5.7 million gain transferred from accumulated other comprehensive income (loss), and a net loss of $9.4 million, including a $4.9 million gain transferred from accumulated other comprehensive income (loss) during the six months ended June 30, 2025 and 2024, respectively.
These gains and losses were recognized on the contracts utilized to manage exposure to prices of metals in our concentrate shipments, which are included in sales. The net losses and gains recognized on the contracts offset gains and losses related to price adjustments on our provisional concentrate sales due to changes to silver, gold, lead and zinc prices between the time of sale and final settlement.
Credit-risk-related Contingent Features
Certain of our derivative contracts contain cross default provisions which provide that a default under our Credit Agreement would cause a default under the derivative contract. As of June 30, 2025, we have not posted any collateral related to these contracts. The fair value of derivatives in a net liability position related to these agreements was $3.0 million as of June 30, 2025, which includes accrued interest but excludes any adjustment for nonperformance risk. If we were in breach of any of these provisions at June 30, 2025, we could have been required to settle our obligations under the agreements at their termination value of $3.0 million.
Note 9. Fair Value Measurement
Fair value adjustments, net is comprised of the following (in thousands):
Gain (loss) on derivative contracts
4,749
(586
4,735
(2,485
Unrealized gain on equity securities investments
4,866
5,588
8,507
5,635
Total fair value adjustments, net
Accounting guidance has established a hierarchy for inputs used to measure assets and liabilities at fair value on a recurring basis. The three levels included in the hierarchy are:
Level 1: quoted prices in active markets for identical assets or liabilities;
Level 2: significant other observable inputs; and
Level 3: significant unobservable inputs.
The table below sets forth our assets and liabilities that were accounted for at fair value on a recurring basis and the fair value calculation input hierarchy level that we have determined applies to each asset and liability category (in thousands).
Description
Balance atJune 30,2025
Balance atDecember 31,2024
InputHierarchy Level
Assets:
Cash and cash equivalents:
Money market funds and other bank deposits
Level 1
Current and non-current investments:
Equity securities
43,410
33,158
Trade accounts receivable:
Receivables from provisional concentrate sales
Level 2
Restricted cash and cash equivalent balances:
Certificates of deposit and other deposits
Derivative contracts - current and non-current derivative assets:
Foreign exchange contracts
4,037
Metal forward contracts
12,682
18,039
Liabilities:
Derivative contracts - current and non-current derivative liabilities:
1,238
10,176
522
Cash and cash equivalents consist primarily of money market funds and are valued at cost, which approximates fair value.
Current and non-current restricted cash and cash equivalent balances consist primarily of certificates of deposit, U.S. Treasury securities, and other deposits and are valued at cost, which approximates fair value.
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Our non-current investments consist of marketable equity securities of mining companies 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.
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 and Keno Hill operations (see Note 8 for more information). The fair value of each contract represents the present value of the difference between the forward exchange rate for the contract settlement period as of the measurement date and the contract settlement exchange rate.
We use financially-settled forward contracts to manage the exposure to changes in prices of silver, gold, zinc and lead contained in our concentrate shipments that have not reached final settlement. We also use financially-settled forward contracts to manage the exposure to changes in prices of gold, zinc and lead contained in our forecasted future sales (see Note 8 for more information). The fair value of each forward contract represents the present value of the difference between the forward metal price for the contract settlement period as of the measurement date and the contract settlement metal price.
At June 30, 2025, our Senior Notes and IQ Notes were recorded at their carrying value of $472.6 million and $35.4 million, respectively, net of unamortized initial purchaser discount/premium and issuance costs. The estimated fair values of our Senior Notes and IQ Notes were $479.6 million and $36.8 million, respectively, at June 30, 2025. Quoted market prices, which are considered to be Level 1 inputs, are utilized to estimate fair values of the Senior Notes. Unobservable inputs which are considered to be Level 3, including an assumed current annual yield of 6.87%, are utilized to estimate the fair value of the IQ Notes. See Note 7 for more information. The Credit Agreement, which we consider to be Level 1 in the fair value hierarchy, has a carrying and fair value of $39.0 million.
Note 10. Product Inventories
Our major components of product inventories are (in thousands):
Concentrates
37,610
15,030
Stockpiled ore
9,324
13,168
In-process
11,269
6,764
Total product inventories
Note 11. Commitments, Contingencies and Obligations
San Mateo Creek Basin, New Mexico
In July 2018, the Environmental Protection Agency ("EPA") informed Hecla Limited that it and several other potentially responsible parties (“PRPs”) may be liable for cleanup of the San Mateo Creek Basin (“SMCB”), which is an approximately 321 square mile area in New Mexico that contains numerous legacy uranium mines and mills. At the time, the EPA stated it had incurred approximately $9.6 million in response costs. Also, in May, 2022 and August, 2024, Hecla Limited received a letter from a PRP notifying Hecla Limited that other PRPs may seek cost recovery and contribution from Hecla Limited under CERCLA for certain investigatory work performed by the PRPs at the SMCB site. Hecla Limited cannot with reasonable certainty estimate the amount or range of liability, if any, relating to this matter because of, among other reasons, the lack of information concerning the site, including the relative contributions of contamination by the various PRPs.
Carpenter Snow Creek and Barker-Hughesville Sites in Montana
In July 2010, the EPA made a formal request to Hecla for information regarding the Carpenter Snow Creek Superfund site located in Cascade County, Montana. The Carpenter Snow Creek site is located in a historical mining district, and in the early 1980s Hecla Limited leased 6 mining claims and performed limited exploration activities at the site. Hecla Limited terminated the mining lease in 1988.
In June 2011, the EPA informed Hecla Limited that it believes Hecla Limited, and several other PRPs, may be liable for cleanup of the site or for costs incurred by the EPA in cleaning up the site. The EPA stated in the letter that it has incurred approximately $4.5 million in response costs and estimated that total remediation costs may exceed $100 million. Hecla Limited cannot with reasonable
22
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 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.
Debt
See Note 7 for information on the commitments related to our debt arrangements as of June 30, 2025.
Indirect Taxes
In May 2024, our Keno Hill subsidiary received a notice of assessment ("NOA") for goods and services tax ("GST") on its 2023 sales for CAD $1,973,181 from the Canada Revenue Agency ("CRA"). As Keno Hill's sales are to a non-Canadian party, we do not believe Keno Hill is subject to collect and remit GST, and we have disputed the NOA and proposed audit adjustments. On April 30, 2025, the CRA advised that they agreed with our position and the matter is resolved.
Other Commitments
Our contractual obligations as of June 30, 2025 included open purchase orders and commitments of $12.3 million, $5.9 million, $8.4 million, $10.4 million and $4.5 million for various capital and non-capital items at Greens Creek, Lucky Friday, Keno Hill, Casa Berardi and Other, respectively. We also have total commitments of $19.7 million relating to scheduled payments on finance leases, including interest, primarily for equipment at our operations, and total commitments of $12.0 million relating to payments on operating leases (see Note 7 for more information). As part of our ongoing business and operations, we are required to provide surety bonds, bank letters of credit, and restricted deposits for various purposes, including financial support for environmental reclamation obligations and workers compensation programs. As of June 30, 2025, we had surety bonds totaling $218.9 million and letters of credit totaling $6.7 million in place as financial support for future reclamation and closure costs, self-insurance, and employee benefit plans. The obligations associated with these instruments are generally related to performance requirements that we address through ongoing operations. As the requirements are met, the beneficiary of the associated instruments cancels or returns the instrument to the issuing entity. Certain of these instruments are associated with operating sites with long-lived assets and will remain outstanding until closure of the sites. We believe we are in compliance with all applicable bonding requirements and will be able to satisfy future bonding requirements as they arise.
Other Contingencies
We also have certain other contingencies resulting from litigation, claims, EPA investigations, and other commitments and are subject to a variety of environmental and safety laws and regulations incident to the ordinary course of business. We currently have no basis to conclude that any or all of such contingencies will materially affect our financial position, results of operations or cash flows. However, in the future, there may be changes to these contingencies, or additional contingencies may occur, any of which might result in an accrual or a change in current accruals recorded by us, and there can be no assurance that their ultimate disposition will not have a material adverse effect on our financial position, results of operations or cash flows.
Note 12. Recent Accounting Pronouncements
Accounting Standards Updates to Become Effective in Future Periods
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures, amending income tax disclosure requirements for the effective tax rate reconciliation and income taxes paid. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024 and are applied prospectively. Early adoption and retrospective application of the amendments are permitted. We are currently evaluating the impact of this update on our consolidated financial statements and disclosures.
23
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income (Topic 220): Expense Disaggregation Disclosures, which includes amendments to require the disclosure of certain specific costs and expenses that are included in a relevant expense caption on the face of the income statement. Specific costs and expenses that would be required to be disclosed include: purchases of inventory, employee compensation, depreciation and intangible asset amortization. Additionally, a qualitative description of other items is required, equal to the difference between the relevant expense caption and the separately disclosed specific costs. The amendments in ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, and are applied either prospectively or retrospectively at the option of the Company. We are evaluating the impact of the amendments on our consolidated financial statements and disclosures.
Note 13. Subsequent Events
ATM Equity Distribution Agreement
Subsequent to June 30, 2025, the Company sold an additional 6,949,792 shares under its ATM equity distribution agreement for proceeds of $42.1 million, net of commissions and fees of $0.6 million.
On July 9, 2025, the Company fully repaid the IQ notes, including interest, for $33.6 million.
Dismissal of Litigation related to Klondex Acquisition
On July 17, 2025, the United States Court of Appeals for the Second Circuit.affirmed the district court’s decision to dismiss a putative class action lawsuit filed against Hecla and certain of our executive officers and directors in 2019 concerning certain public disclosures made about our Nevada assets in 2018 and 2019. We expect this to be the end of this matter. The plaintiffs in the related derivative lawsuit pending in Delaware Chancery Court have voluntarily sought to dismiss the lawsuit.
Issued Notice to Redeem Portion of 7.25% Senior Notes Due February 15, 2028
On August 1, 2025, we issued a notice of redemption to the trustee to redeem $212 million of our outstanding $475 million of Senior Notes. We expect the Senior Notes to be redeemed on a pro rata basis on or about August 21, 2025.
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Certain statements contained in this Form 10-Q, including in Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures About Market Risk, are intended to be covered by the safe harbor provided for under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Our forward-looking statements include our current expectations and projections about future results, performance, results of litigation, prospects and opportunities, including reserves and other mineralization. We have tried to identify these forward-looking statements by using words such as “may,” “will,” “expect,” “anticipate,” “believe,” “intend,” “feel,” “plan,” “estimate,” “project,” “forecast” and similar expressions. These forward-looking statements are based on information currently available to us and are expressed in good faith and believed to have a reasonable basis. However, our forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements.
These risks, uncertainties and other factors include, but are not limited to, those set forth under Part II, Item 1A. – Risk Factors of this Form 10-Q and Part I, Item 1A. – Risk Factors in our 2024 Form 10-K. Given these risks and uncertainties, readers are cautioned not to place undue reliance on our forward-looking statements. All subsequent written and oral forward-looking statements attributable to Hecla Mining Company or to persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Except as required by federal securities laws, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
In this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), “Hecla,” “the Company,” “we,” “us” and “our” refer to Hecla Mining Company and its consolidated subsidiaries, except where the context requires otherwise. You should read this discussion in conjunction with our consolidated financial statements, the related MD&A and the discussion of our Business and Properties for the year ended December 31, 2024, filed with the United States Securities and Exchange Commission (the “SEC”). The results of operations reported and summarized below are not necessarily indicative of future operating results (refer to “Forward-Looking Statements” above for further discussion). References to “Notes” are Notes included in our Notes to Condensed Consolidated Financial Statements (Unaudited). Throughout this MD&A, all references to income or losses per share are on a diluted basis.
Hecla Mining Company stands as North America's leading silver producer, with a rich heritage dating back to 1891. Our operations at Greens Creek, Lucky Friday and Keno Hill combined to produce 35% of 2024 silver production in the U.S. and Canada, complemented by significant gold production from Casa Berardi and Greens Creek. We began ramp-up of the Keno Hill mill during the second quarter of 2023 after acquiring it in September 2022. Our strategic positioning in the stable jurisdictions of U.S. and Canada provides us with distinct operational advantages and reduced political risk compared to our global peers. Our operational and strategic framework centers on four core pillars:
Second Quarter 2025 Highlights
Operational Achievements:
Financial Performance:
Exploration:
Year to date 2025 Highlights
External Factors that Impact our Results
Our financial results vary as a result of fluctuations in market prices primarily for silver and gold and, to a lesser extent, zinc, lead and copper. World market prices for these commodities have fluctuated historically and are affected by numerous factors beyond our control. Although we have not been materially impacted to date, our financial results could in the future be materially impacted by the introduction of tariffs and other global restraints on trade. Historically our US operations have had significant sales into China and Canada, and each of those countries is or could be subject to tariffs, and each has or may retaliate in kind. Notwithstanding these recent developments, we believe that the outlook for precious metals fundamentals in the medium- and long-term is favorable due to macro-economic factors such as lower interest rate expectations, geopolitical uncertainty and global growth expectations, which have resulted in significant volatility in the financial and commodities markets, including the precious metals market. See Part II, Item 1A. “Risk Factors” of this Form 10-Q and Item 1A. “Risk Factors” contained in Part I of our annual report on Form 10-K for the year ended December 31, 2024 ("2024 Form 10-K"), for further discussion. Because we cannot control the price of our products, except to the extent we have entered into hedging transactions, the key measures that management focuses on in operating our business are production volumes, payable sales volumes, Cash Cost, After By-product Credits, per Ounce (non-GAAP) and All-In Sustaining Cost, After By-product Credits, per Ounce (“AISC”) (non-GAAP), operating cash flows, capital expenditures, free cash flow (non-GAAP) and adjusted EBITDA (non-GAAP). The average realized prices for all metals sold by us continued to exhibit significant volatility during the period. We have also experienced significant cost inflation across our operations, principally associated with higher energy prices, increased costs for other consumables such as reagents, explosives and steel, and higher labor and contractor costs.
Total sales for the three and six months ended June 30, 2025 and 2024 were as follows:
(in thousands)
Environmental remediation services revenue is generated by performing remediation work in the historical Yukon Territory mining district on behalf of the Canadian government. The scope and estimated cost of all work is agreed to in advance by the Canadian government, and the expenses incurred are essentially passed through to the government for reimbursement with minimal margin generated by us in performing this work.
Total metal sales for the three and six months ended June 30, 2025 and 2024, and the approximate variances attributed to differences in metals prices, sales volumes and smelter terms, were as follows:
Base metals
Less: smelter and refining charges
Total sales of products
56,424
Variances - 2025 versus 2024:
Price
16,775
36,976
(9,156
44,595
Volume
(6,806
4,276
6,325
(772
3,023
Smelter terms
7,510
53,593
100,871
47,884
62,082
(5,227
104,739
(5,995
(1,057
13,571
6,519
13,040
109,215
The fluctuation in sales for the three and six months ended June 30, 2025 compared to the same periods in 2024 was primarily due to the following:
Silver –
London PM Fix ($/ounce)
33.63
28.86
32.77
26.11
Realized price per ounce
34.82
29.77
34.20
27.37
Gold –
3,279
2,338
3,071
2,205
3,314
3,148
2,222
Lead –
LME Final Cash Buyer ($/pound)
0.88
0.98
0.89
0.96
Realized price per pound
0.92
1.06
1.02
Zinc –
1.20
1.29
1.24
1.31
1.51
1.30
Copper –
4.32
4.28
4.56
4.52
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. We recorded net positive price adjustments to provisional settlements of $4.2 million and $11.0 million for the three months ended June 30, 2025 and 2024, and $11.1 million and $14.5 million for the six months ended June 30, 2025 and 2024, respectively. The price adjustments related to silver, gold, zinc, lead and copper contained in our concentrate shipments were partially offset by gains and losses on forward contracts for those metals. See Note 8 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information. The gains and losses on these contracts are included in revenues and impact the realized prices for silver, gold, lead, zinc and copper. 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.
28
Silver -
Ounces produced
4,520,510
4,458,484
8,632,904
8,650,582
Payable ounces sold
3,522,975
3,785,285
7,040,945
7,267,169
Gold -
45,895
37,324
80,127
73,916
37,333
35,276
66,988
67,465
Lead -
Tons produced
14,650
13,587
28,657
25,686
Payable tons sold
11,663
11,338
23,653
21,359
Zinc -
18,479
16,191
35,414
32,402
11,667
10,781
24,514
22,102
499
462
910
957
108
152
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.
Sales, total cost of sales, gross profit (loss), Cash Cost, After By-product Credits, per Ounce (“Cash Cost”) (non-GAAP) and AISC (non-GAAP) at our operating segments for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands, except for Cash Cost and AISC):
Gold and Other
Total Silver (2)
Other (3)
Total Gold and Other
Three Months Ended June 30, 2025:
$122,002
$64,273
$26,121
$212,396
$85,035
$6,596
$91,631
(58,921)
(42,286)
(25,881)
(127,088)
(50,790)
$(6,625)
(57,415)
$63,081
$21,987
$240
$85,308
$34,245
$(29)
$34,216
Cash Cost (1)
$(11.91)
$6.19
$—
$(5.46)
$1,578
AISC (1)
$(8.19)
$19.07
$5.19
$1,669
Three Months Ended June 30, 2024:
$95,659
$59,071
$28,950
$183,680
$58,623
$3,354
$61,977
(56,786)
(37,523)
(28,950)
(123,259)
(67,340)
(3,628)
(70,968)
$38,873
$21,548
$60,421
$(8,717)
$(274)
$(8,991)
$0.19
$5.32
$2.08
$1,701
$5.40
$12.74
$12.54
$1,825
29
Total Gold
410,642
154,724
(128,559
(86,335
(41,752
(256,646
(101,472
(13,720
(115,192
153,996
39,532
(8.37
7.77
(2.29
1,837
(4.50
19.57
8.35
1,935
327,177
108,008
(126,643
(65,042
(39,797
(231,482
(125,600
(7,513
(133,113
66,326
29,369
95,695
288
(25,105
1.90
6.67
3.38
1,685
6.33
14.50
12.81
1,861
While revenue from zinc, lead, copper and gold by-products is significant, we believe that identification of silver as the primary product of Greens Creek, Lucky Friday and Keno Hill is appropriate because:
Accordingly, we believe the identification of gold, lead, zinc and copper as by-product credits at Greens Creek, Lucky Friday and Keno Hill 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 at those locations. 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 Keno Hill we consider zinc, lead, gold and copper to be by-products of our silver production, the values of these metals offset operating costs within our calculations of Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce. We currently do not report Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for our Keno Hill operation as it is in the production ramp-up phase and has not met our definition of commercial production. We define an operation as being in commercial production upon achievement of the following criteria:
30
Currently we meet only one of the above criteria - silver recoveries are at expected steady-state production levels. Determination of when these criteria have been met requires the use of judgment, and our definition of commercial production may differ from that of other mining companies.
As Keno Hill has not yet been determined to be in commercial production, its costs and by-product credits are excluded from our consolidated Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce because (i) by definition it has not reached the sustaining stage and (ii) including its costs and by-product credits we believe would distort consolidated Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce of our operating silver mines that are in commercial production and operating as designed, and would not facilitate a meaningful comparison of our performance versus that of our peers who do not report such metrics for mines that are not in commercial production.
We believe the identification of silver as a by-product credit is appropriate at Casa Berardi because of its lower economic value compared to gold and due to the fact that gold is the primary product we produce there. In addition, we do not receive sufficient revenue from silver at the Casa Berardi mine to warrant classification of such as a co-product. Because we consider silver to be a by-product of our gold production at Casa Berardi, the value of silver offsets operating costs within our calculations of Cash Cost, After By-product Credits, per Gold Ounce and AISC, After By-product Credits, per Gold Ounce.
We reported net income applicable to common stockholders of $57.6 million for the three months ended June 30, 2025, compared to a net income applicable to common stockholders of $27.7 million in the comparable period in 2024. The following were the significant drivers of the change:
The positive movements mentioned above were partly offset by:
We reported net income applicable to common stockholders of $86.3 million for the six months ended June 30, 2025, compared to a net income applicable to common stockholders of $21.8 million in the comparable period in 2024. The following were the significant drivers of the change:
32
Dollars are in thousands (except per ounce and per ton amounts)
(46,024
(45,470
(102,073
(100,884
(12,897
(11,316
(26,486
(25,759
(58,921
(56,786
38,873
Tons of ore milled
230,221
225,746
443,120
457,934
Production:
Silver (ounces)
2,422,978
2,243,551
4,425,538
4,722,145
Gold (ounces)
17,750
14,137
31,509
28,725
Lead (tons)
4,931
4,513
9,427
9,347
Zinc (tons)
14,024
12,400
26,859
25,462
Copper (tons)
Payable metal quantities sold:
1,591,745
1,576,918
3,336,397
3,667,367
11,634
10,312
22,112
22,498
2,862
2,890
6,183
6,560
9,039
7,525
18,546
17,089
Ore grades:
Silver ounces per ton
13.4
12.6
13.0
Gold ounces per ton
0.10
Lead percent
2.6
%
2.5
Zinc percent
6.9
6.2
6.8
Copper percent
Total production cost per ton
225.71
218.09
232.57
215.46
Cash Cost, After By-product Credits, per Silver Ounce (1)
(11.91
0.19
AISC, After By-Product Credits, per Silver Ounce (1)
(8.19
5.40
The $24.2 million increase in gross profit for the three months ended June 30, 2025, compared to the same period in 2024 was primarily due to higher realized sales prices for silver and gold, in addition to higher sales volumes for all metals, except lead.
Capital additions in the current quarter were $3.3 million lower than the prior year period and included $2.8 million for primary ore access development, $2.0 million for mine development and $1.8 million for mining equipment and related costs.
Production of all metals increased during the three months ended June 30, 2025, primarily due to a combination of higher tons milled and higher grades.
The $45.3 million increase in gross profit for the six months ended June 30, 2025, compared to the same period in 2024 was primarily due to higher realized sales prices for silver, gold and lead, partially offset by lower metals sales volumes for all metals, except zinc.
Capital additions during the year were $1.4 million lower than the prior year period and included $6.0 million for primary ore access development, $3.4 million for mine development, $2.8 million for mining equipment and $1.7 million for definition drilling.
Silver production during the six months ended June 30, 2025, declined primarily due to a combination of lower tons milled reflecting a combination of lower heading availability, long hole mining and lower grade ore during the first quarter of 2025 which outweighed an improvement in silver production during the second quarter of 2025. Production of gold, lead and zinc are higher during the current year primarily due to higher grades.
33
The charts below illustrate the factors contributing to Cash Cost, After By-product Credits, per Silver Ounce for Greens Creek:
Cash Cost, Before By-product Credits, per Silver Ounce
22.42
25.83
25.15
25.46
By-product credits
(34.33
(25.64
(33.52
(23.56
Cash Cost, After By-product Credits, per Silver Ounce
34
AISC, Before By-product Credits, per Silver Ounce
26.14
31.04
29.02
29.89
AISC, After By-product Credits, per Silver Ounce
For the three months ended June 30, 2025, the decrease in Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce was primarily due to an increase in gold by-product credits, reflecting higher realized gold prices and higher silver production.
For the six months ended June 30, 2025, the decrease in Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce was primarily due to an increase in gold by-product credits, reflecting higher realized gold prices, partly offset by lower silver production. AISC, After By-product Credits, per Silver Ounce also benefited from lower sustaining capital expenditures.
(29,011
(26,815
(59,635
(46,423
(13,275
(10,708
(26,700
(18,619
(42,286
(37,523
21,548
114,475
107,441
223,220
193,675
1,340,877
1,308,155
2,673,129
2,369,220
8,829
8,229
17,309
14,918
3,911
3,320
7,592
6,171
1,228,493
1,220,850
2,497,338
2,174,741
8,027
7,599
16,005
13,591
2,887
2,919
5,968
4,560
12.5
12.9
12.7
8.2
8.1
4.2
3.6
4.1
241.63
233.99
249.89
233.59
6.19
5.32
AISC, After By-product Credits, per Silver Ounce (1)
19.07
12.74
Gross profit increased by $0.4 million for the three months ended June 30, 2025 compared to the comparable period in 2024, reflecting a combination of higher sales volumes for all metals due to higher milled tons. Higher realized prices for silver and zinc also positively contributed to the higher gross profit, however this benefit was partly offset by higher contractor, consumables and maintenance costs reflecting the higher volumes produced and sold, and higher profit sharing costs under the collective bargaining agreement.
Gross profit increased by $11.8 million for the six months ended June 30, 2025 compared to the comparable period in 2024, reflecting a combination of higher sales volumes for all metals due to a full six months of production in 2025, compared to 2024 when operations did not resume until January 9, 2024, following suspension of operations in August 2023, due to the underground fire in the secondary egress. Higher realized prices for silver and zinc also positively contributed to the higher gross profit, however this benefit
35
was partly offset by lower realized lead prices and higher contractor, drilling, consumables and maintenance costs reflecting the higher volumes produced and sold, and higher profit sharing costs under the collective bargaining agreement.
Capital additions increased by $5.1 million for the three months ended June 30, 2025, compared to the comparable period in 2024. Significant capital expenditures in 2025 included capital development of $6.4 million, the surface cooling project of $5.4 million, pond 5 construction of $1.3 million and definition drilling of $1.9 million.
Capital additions increased by $5.6 million for the six months ended June 30, 2025 and included $12.5 million for capital development, $6.4 million for the surface cooling project, $3.8 million for definition drilling, $1.8 million for shaft renovations and $1.7 million for pond 5 construction.
The charts below illustrate the factors contributing to Cash Cost, After By-product Credits, Per Silver Ounce for Lucky Friday:
36
22.47
22.27
23.79
23.08
(16.28
(16.95
(16.02
(16.41
35.35
29.69
35.59
30.91
The increase in Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for the three months ended June 30, 2025, compared to the same period in 2024 was primarily due to higher production costs, partly offset by higher silver production. AISC, After By-product Credits, per Silver Ounce was also negatively impacted by higher sustaining capital.
The increase in Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for the six months ended June 30, 2025, compared to the same period in 2024 was primarily due to higher production costs, partly offset by higher silver production reflecting a full quarter's production compared to operations only commencing on January 9, 2024 following suspension in August 2023 due to the underground fire in the secondary egress. AISC, After By-product Credits, per Silver Ounce was also negatively impacted by higher sustaining capital.
28,950
(20,740
(24,221
(33,809
(31,466
(5,141
(4,729
(7,943
(8,331
(25,881
(28,950
26,771
36,977
54,182
62,142
750,712
900,440
1,523,142
1,546,752
890
845
1,921
1,421
544
471
963
769
697,475
979,543
1,196,727
1,411,874
775
849
1,466
1,208
Zinc (tons) (1)
407
337
666
453
28.9
25.1
29.0
25.6
3.5
2.3
1.4
2.1
We have not disclosed cost per ounce statistics for the Keno Hill operation as it is in the production ramp-up phase and has not met our definition of commercial production. See above "Consolidated Results of Operations" for our definition of commercial production. Determination of when those criteria have been met requires the use of judgment, and our definition of commercial production may differ from that of other mining companies.
We acquired our Keno Hill operations as part of the Alexco Resource Corp. acquisition in September 2022 and have focused on development activities and began ramp-up of the mill during the second quarter of 2023. The average mill throughput during the six months ended June 30, 2025, was 299 tons per day (the mine is currently permitted to a maximum of an average of 440 tons per day),
with silver grades milled of 29.0 ounces per ton. During the first quarter of the year, the mill relied on the existing ore stockpiles as the mine continues to focus on development and ramp up to higher tonnage rates with mining rates of 263 tons per day during the first six months ended June 30, 2025, with material sourced from both the Bermingham and Flame and Moth deposits. Mill throughput, while currently steady, has been negatively impacted by last year's events as described below.
During the three months ended June 30, 2025 and 2024, Keno Hill recorded sales of $26.1 million and $29.0 million, respectively, with the decrease due to lower metals sales volumes, partly offset by higher realized prices. As a result of higher metals prices, Keno Hill generated a gross profit of $0.2 million during the three months ended June 30, 2025, and did not transfer any total cost of sales to ramp-up and suspension costs. During the second quarter of 2024, total cost of sales in excess of sales of $1.8 million were reclassified to ramp-up and suspension costs in the Condensed Consolidated Statements of Operations and Comprehensive Income, (Unaudited). During the quarter, Keno Hill recorded capital additions of $17.0 million, related to mine development and other mining equipment purchases.
During the six months ended June 30, 2025 and 2024, Keno Hill recorded sales of $43.0 million and $39.8 million, respectively, with the increase in sales attributable to higher realized sales prices, partly offset by lower volumes sold. As a result of higher revenues, Keno Hill generated a gross profit of $1.3 million during the six months ended June 30, 2025, and did not transfer any total cost of sales to ramp-up and suspension costs. During the six months ended June 30, 2024, total cost of sales in excess of sales of $10.4 million were reclassified to ramp-up and suspension costs in the Condensed Consolidated Statements of Operations and Comprehensive Income, (Unaudited). During the six months ended June 30, 2025, Keno Hill recorded capital additions of $27.5 million, primarily related to mine development and the Bermingham backfill plant.
From commencement of production until late August, 2024, ore production and mill throughput generally increased as planned, leading to increased levels of production (though still not reaching the permitted capacity at the mill). However, starting in mid-2024 and continuing today, Keno Hill has been impacted by external events which have affected permitting, projects and production, and delayed our ability to reach sustained, profitable production. In late June 2024, an unrelated, third party, Victoria Gold, experienced a heap leach failure at its Eagle Mine which is located near Keno Hill. This incident had several immediate and ongoing impacts on our operations. The primary impact was we were forced to suspend milling operations at Keno Hill between August 27 and October 26 due to delays in receiving authorizations and permits because the focus of the Yukon Government (“YG”) and the First Nation of Na-Cho Nyäk Dun (“FNNND”) was on the Eagle Mine incident response and not on routine permitting matters. Mill operations and design and construction projects resumed during the fourth quarter of 2024. Our original planned schedule for permitting and projects has been extended, but we are taking steps, including working with regulators, to establish a viable schedule for our operational plans.
An ongoing impact of the Eagle Mine incident is the FNNND's public position on mining, which has evolved from a call to halt all mining activity to support of environmentally responsible mining practices. We continue to strengthen our partnership with the FNNND - which is important because Keno Hill is within their Traditional Territory - through enhanced environmental stewardship and community engagement initiatives, building on their support for responsible mining practices.
Then, starting in late October 2024, Keno Hill began experiencing power curtailments when Yukon Energy experienced a turbine failure at its hydroelectric plant in Whitehorse. That failure and Yukon Energy’s resulting focus on line maintenance, combined with cold temperatures in the Yukon (and the resulting increase in demand for power), caused Yukon Energy to reduce power to Keno Hill, resulting in the operation’s inability to fully power the mine and mill on several occasions in late 2024 and for 8 days in the first quarter of 2025. Temporary power constraints in the Yukon region impacted approximately 130,000 ounces of silver production and labor costs for idled employees of approximately $0.5 million through June 30, 2025. These conditions improved in the second quarter of 2025 when we experienced no power disruptions by Yukon Energy, nor do we expect any disruptions while the weather remains warm, except that we expect a 6-day outage in August 2025 when the turbine at Yukon Energy's hydroelectric plant in Whitehorse is scheduled to be fixed. There can be no assurance that Keno Hill will not face power supply constraints in the future.
Permitting is one of the most important factors in our ability to reach sustainable, profitable production at Keno Hill. Increased production means a need for increased tailings storage, waste storage, water treatment, camp space and reliable power, all of which are typical requirements for mining companies in the expansion phase. These projects require new or modified permits, as well as the capital to implement them. Although we continue to make progress on these normal-course permitting matters, we have yet to make up for the delays described above. We also continue to face operational challenges such as work force availability, dilution, execution of projects, limited camp space, and the ramp-up of the Company's environmental remediation services group activities in the summer (which adds incremental demand on Keno Hill's infrastructure and resources, most notably camp space). As a result, we continue to
38
project 2025 silver production to be comparable to 2024 levels. The projected flat production levels at Keno Hill for 2025 should allow us to focus on (i) permitting, (ii) stakeholder outreach and ensuring we have local support, (iii) projects such as tailings storage expansion and the construction of a cemented tails batch plant, (iv) mine development and (v) meeting the above-mentioned operational challenges.
As stated above, Keno Hill has generated marginal profits for us at current throughput rates and prices. Our immediate focus is to advance permits and successfully execute infrastructure projects, with the goal of putting the mine on a path toward achieving its current permitted capacity of 440 tons per day which, at current prices, we project would generate positive free cash flow, while preserving expansion optionality beyond 440 tons per day. To reach 440 tons per day throughput, we would need to continue to mine ore from both the Bermingham deposit and the lower grade Flame & Moth deposit. Currently Keno Hill is not configured to sustainably produce 440 tons per day (although the mill has achieved that rate for multiple weeks on end during test run periods). Achieving 440 or higher tons per day would require targeted infrastructure investments, obtaining permits, executing projects, mine development and maintaining community support. If any one of these were not to occur, or if prices were to decrease from current prices, Keno Hill as currently configured would not be profitable, and placing the operation on care and maintenance would be an option. See Item 1A. Risk Factors - We may not realize all of the anticipated benefits from our acquisitions, including our 2022 acquisition of Alexco in our 2024 Form 10-K.
58,623
(44,944
(40,330
(87,057
(75,639
(5,846
(27,010
(14,415
(49,961
(50,790
(67,340
393,648
366,979
784,816
748,605
28,145
23,187
48,618
45,191
5,943
6,338
11,095
12,465
25,699
24,964
44,876
44,967
5,262
7,974
10,483
13,187
0.08
0.07
0.02
113.19
107.84
114.19
102.07
Cash Cost, After By-product Credits, per Gold Ounce (1)
1,578
1,701
AISC, After By-product Credits, per Gold Ounce (1)
1,669
1,825
Casa Berardi is advancing toward a more streamlined and efficient surface-only operation. The plan was to focus exclusively on the 160 pit by mid-2025, however following the significant increase in the gold price during the year to date, it was decided to continue to mine the easily accessible ore in the west underground mine, potentially through the end of 2025. This transition follows the continued successful extraction of higher-margin stopes from the west underground mine, positioning the mine for continued productivity and cost-effective mining. Our previously announced strategic review is ongoing and includes evaluating the following scenarios (i) sale of the asset, (ii) joint venturing the asset, (iii) spin-out of the asset, (iv) extending the underground mine, and (iv) accelerating future cash flows to capture part of the current record gold prices via a prepayment structure or other financing arrangement. If underground mining is not extended, Casa Berardi is expected to only produce gold from the 160 open pit, and at lower volumes than historic production levels, with production expected to conclude at the 160 open pit in 2027. Casa Berardi is transitioning to a new phase focused on developing the Principal and West Mine Crown Pillar open pits. This strategic repositioning is expected to optimize long-term value, with production anticipated to resume following successful permitting and development during a production gap expected
between 2027 and 2032. Upon successful completion of permitting, design, and construction of the new open pits (which is not assured), we expect Casa Berardi to generate substantial free cash flow at current gold prices when production resumes. This long-term approach aligns with our commitment to maximizing the value of our assets through strategic mine planning and operational flexibility.
Gross profit increased by $43.0 million to $34.2 million for the three months ended June 30, 2025, compared to a gross loss of $8.7 million in the comparable period in 2024. The increase in gross profit is primarily related to higher realized prices and gold ounces sold, partly offset by higher contractor costs. The prior period gross loss also included higher depreciation expense related to accelerated depreciation of the west underground mine. Capital additions increased by $3.0 million to $15.4 million during the quarter, compared to the same period in 2024, and primarily related to a tailings dam raise.
Gross profit increased by $65.0 million to $39.6 million for the six months ended June 30, 2025, compared to a gross loss of $25.4 million in the comparable period in 2024. The increase in gross profit is primarily related to higher realized prices and gold ounces sold, partly offset by higher contractor costs. The prior period gross loss also included higher depreciation expense related to accelerated depreciation of the west underground mine and a product inventory net realizable value write down of $6.3 million. Capital additions increased by $5.9 million to $31.6 million during the year, compared to the same period in 2024, and primarily related to a tailings dam raise.
Although Casa Berardi generated gross profits during the last four quarters and free cash flow during the current quarter, it reported gross losses during the prior three fiscal years. This lack of profitability and free cash flow generation, the expected hiatus in future production discussed above, the uncertainty surrounding permitting and pit design and construction, and the time involved to resolve these uncertainties, has caused us to undertake a review of how Casa Berardi fits into the Company's future strategy. While it is possible we may continue down the path towards future production at the Principal and West Mine Crown Pillar pits, we are also examining potential strategic alternatives as described above.
The charts below illustrate the factors contributing to Cash Cost, After By-product Credits, Per Gold Ounce for Casa Berardi:
Cash Cost, Before By-product Credits, per Gold Ounce
1,585
1,709
1,845
1,692
(7
(8
Cash Cost, After By-product Credits, per Gold Ounce
AISC, Before By-product Credits, per Gold Ounce
1,676
1,833
1,943
1,868
AISC, After By-product Credits, per Gold Ounce
The decrease in Cash Cost After By-product Credits, per Gold Ounce, and AISC, After By-product Credits, per Gold Ounce for the three months ended June 30, 2025, compared to the same period in 2024 was primarily due to higher gold production.
The increase in Cash Cost After By-product Credits, per Gold Ounce, and AISC, After By-product Credits, per Gold Ounce for the three and six months ended June 30, 2025, compared to the same period in 2024 was primarily due to higher production costs, partly offset by higher gold production. AISC, After By-product Credits, per Gold Ounce benefited from lower sustaining capital over the comparable period in 2024.
Corporate Matters
Income Taxes
During the three and six months ended June 30, 2025, an income and mining tax provision of $32.6 million and $48.7 million, resulted in an effective tax rate of 36.1% and 36.0%, respectively. This compares to an income and mining tax provision of $9.1 million and $10.9 million, which resulted in an effective tax rate of 24.6% and 33.0%, respectively, for the three and six months ended June 30, 2024. The comparability of our income and mining tax provision 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 including non-recognition of foreign exchange gains and losses; (v) percentage depletion; and (vi) the non-recognition of tax assets. The effective tax rate will fluctuate, sometimes significantly, period to period. The change in the effective tax rate during the three and six months ended June 30, 2025, compared to the comparable periods in 2024 is primarily related to the reported consolidated income (loss) as well as the losses incurred at our consolidated Alexco subsidiaries, and our Nevada subsidiaries, for which no tax benefit is recognized due to uncertainty surrounding our ability to utilize these future tax benefits.
Each reporting period we assess our deferred tax balances based on a review of long-range forecasts and quarterly activity. A valuation allowance is provided for deferred tax assets for which it is more likely than not the related tax benefits will not be realized. We analyze our deferred tax assets and, if it is determined that we will not realize all or a portion of our deferred tax assets, we 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 risk factors Our accounting and other estimates may be imprecise and 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 generating taxable income in Item 1A - Risk Factors in our 2024 Form 10-K.
The tables below present reconciliations between the most comparable GAAP measure of total cost of sales 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 and for the Company for the three and six months ended June 30, 2025 and 2024.
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' net cash flow after costs for 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 reclamation and sustaining capital costs. Current GAAP measures used in the mining industry, such as cost of goods sold, do not capture all the expenditures incurred to discover, develop and sustain silver and gold production. Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce also allow us to benchmark the performance of each of our mines versus those of our competitors. As a silver and gold mining company, we also use these statistics on an aggregate basis - aggregating the Greens Creek and Lucky Friday mines to compare our performance with that of other silver 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 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 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. We currently do not report Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for our Keno Hill operation as it is in the ramp-up phase of production and accordingly it is excluded from our consolidated Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce.
Casa Berardi 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. 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 Casa Berardi 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, our combined silver properties. Similarly, the silver produced at our other three units is not included as a by-product credit when calculating the gold metrics for Casa Berardi.
In thousands (except per ounce amounts)
Keno Hill (5)
Corporate (2)
Total Silver
58,921
42,286
25,881
127,088
(31,313
Treatment costs
(1,001
1,054
Change in product inventory
9,234
225
9,459
Reclamation and other costs
57
(160
(103
Exclusion of Keno Hill cash costs (5)
Cash Cost, Before By-product Credits (1)
54,314
30,130
84,444
757
195
952
Sustaining capital
8,268
17,069
1,270
26,607
AISC, Before By-product Credits (1)
63,339
47,394
13,810
124,543
By-product credits:
(23,512
(7,120
(30,632
(52,194
(6,610
(14,708
(21,318
(871
Total By-product credits
(83,187
(21,828
(105,015
Cash Cost, After By-product Credits
(28,873
8,302
(20,571
AISC, After By-product Credits
(19,848
25,566
19,528
2,423
1,341
3,764
Cash Cost, Before By-product Credits, per Ounce
22.44
By-product credits per ounce
(27.90
Cash Cost, After By-product Credits, per Ounce
(5.46
AISC, Before By-product Credits, per Ounce
33.09
AISC, After By-product Credits, per Ounce
5.19
Gold - Casa Berardi
Other (4)
50,790
6,625
57,415
44
(62
(324
Exclusion of Other costs
(6,625
44,602
324
2,242
47,168
(202
44,400
46,966
Divided by ounces produced
(37,159
97
9,397
(427
129,046
1,276
28,849
171,711
(105,217
23,829
66,494
45
56,786
37,523
123,259
(26,753
6,069
2,746
8,815
7,296
(115
7,181
(882
(311
(1,193
57,953
29,135
87,088
785
183
968
10,911
9,517
1,035
21,463
69,649
38,835
15,775
124,259
(21,873
(6,706
(28,579
(28,844
(6,818
(15,466
(22,284
(57,535
(22,172
(79,707
418
6,963
7,381
12,114
16,663
44,552
2,244
1,308
3,552
24.52
(22.44
2.08
34.98
12.54
67,340
3,628
70,968
(550
(206
(3,628
39,626
206
2,667
42,499
(183
39,443
42,316
46
(53,763
8,867
6,631
(1,399
126,714
1,174
24,130
166,758
(79,890
46,824
86,868
47
128,559
86,335
41,752
256,646
(61,129
1,142
5,017
6,159
8,333
(614
7,719
(250
(433
(683
111,298
63,605
174,903
1,514
390
1,904
15,636
31,139
2,295
49,070
128,448
95,134
26,834
250,416
(46,886
(14,070
(60,956
(87,171
(12,701
(28,751
(41,452
(1,600
(148,358
(42,821
(191,179
(37,060
20,784
(16,276
(19,910
52,313
59,237
4,426
7,099
24.64
(26.93
35.28
101,472
13,720
115,192
89
3,196
(636
89,706
636
4,136
94,478
(367
89,339
94,111
49
48
(75,544
6,248
10,915
(1,319
264,609
2,540
53,206
344,894
(191,546
73,063
153,348
Keno Hill(5)
126,643
65,042
231,482
(52,709
15,793
5,969
21,762
496
(1,537
(413
(1,950
Exclusion of Lucky Friday cash costs (3)
(3,634
120,240
48,841
169,081
1,570
405
1,975
19,327
21,568
41,996
Exclusion of Lucky Friday sustaining costs
(5,396
141,137
65,418
27,057
233,612
(42,079
(11,491
(53,570
(55,395
(13,799
(27,187
(40,986
Exclusion of Lucky Friday by-product credits
3,943
(111,273
(34,735
(146,008
8,967
14,106
23,073
29,864
30,683
87,604
4,722
2,369
7,091
Exclusion of Lucky Friday ounces produced
(253
2,116
6,838
24.73
(21.35
34.16
50
125,600
7,513
133,113
76
1,189
(415
76,489
415
7,528
84,432
(326
76,163
84,106
51
(102,670
21,838
6,785
(2,365
Exclusion of Lucky Friday cash costs
Exclusion of Keno Hill cash costs
245,570
2,390
49,524
318,044
(146,334
99,236
171,710
We have a disciplined cash management strategy of maintaining financial flexibility to execute our capital priorities and provide long-term value to our 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 expenditures, exploration and pre-development projects, while returning cash to stockholders through dividends and potential share repurchases.
At June 30, 2025, we had $296.6 million in cash and cash equivalents, of which $2.9 million was held in foreign subsidiaries' local currency that we anticipate utilizing for near-term operating, exploration or capital costs by those foreign subsidiaries. At June 30, 2025, we had $39.0 million drawn on our $225 million credit facility, and additional $6.7 million used for letters of credit, leaving $179.3 million for additional borrowings. We also have USD cash and cash equivalent balances held by our foreign subsidiaries that, if repatriated, may be subject to withholding taxes. We expect that there would be no additional tax burden upon repatriation after considering the cash cost associated with the withholding taxes. We believe that our liquidity and capital resources from our U.S. operations are adequate to fund our U.S. operations and corporate activities.
Pursuant to our common stock dividend policy described in Note 12 of Notes to Consolidated Financial Statements in our consolidated financial statements and notes for the year ended December 31, 2024, our Board of Directors declared and paid dividends on our common and preferred stock of $2.5 million and $5.0 million during the three and six months ended June 30, 2025, and $4.0 million and $8.0 million during the three and six months ended June 30, 2024, respectively. Our common stock dividend policy anticipates paying an annual minimum dividend of $0.015 per share. Prior to the first quarter of 2025, our dividend policy previously had an additional silver-linked component which tied the amount of declared common stock dividends to our realized silver price for the preceding quarter.
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 12 of Notes to Consolidated Financial Statements in our consolidated financial statements and notes for the year ended December 31, 2024, 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 June 30, 2025 and December 31, 2024, 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.
As discussed in Note 6 of Notes to Condensed Consolidated Financial Statements (Unaudited) pursuant to an equity distribution agreement dated February 18, 2021, as of June 30, 2025, there were 7,147,780 remaining shares of our common stock that we may offer and sell from time to time in “at-the-market” 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 equity distribution agreement can be terminated by us at any time. Any sales of shares under that agreement are registered under the Securities Act of 1933, as amended, pursuant to a shelf registration statement on Form S-3. During the six months ended June 30, 2025, we sold 29,008,536 shares under the agreement. Subsequent to June 30, 2025, we sold an additional 6,949,792 shares, leaving 197,988 remaining shares of our common stock that may be sold under the equity distribution agreement.
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 under our Credit Agreement, we believe we will be able to meet our obligations and other potential cash requirements during the next 12 months and beyond. Our obligations and other uses of cash may include, but are not limited to: debt service obligations related to the Senior Notes; principal and interest payments under our Credit Agreement; ramp up and suspension costs; 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. The IQ Notes were fully repaid on July 9, 2025, and on August 1, 2025, we issued a notice of redemption for a portion of our Senior Notes. See Note 13 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information.
We currently estimate a range of approximately $222 to $242 million (before any lease financing) will be invested in 2025 on capital expenditures, primarily for equipment, infrastructure, and development at our mines, including $112.1 million already incurred as of June 30, 2025. We also estimate exploration and pre-development expenditures will total approximately $28.0 million in 2025, including $13.3 million already incurred as of June 30, 2025. Our expenditures for these items and our related plans for 2025 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 (which requires compliance with certain financial and other covenants), and other factors. A sustained downturn in metals prices, significant increase in operational or capital costs or other uses of cash, poor results of our operating units, our inability to access the credit facility or the sources of liquidity discussed above, or other factors beyond our control could impact our plans.
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 may also 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):
Cash and cash equivalents held in U.S. dollars
293.7
24.5
Cash and cash equivalents held in foreign currency
2.9
Total cash and cash equivalents
296.6
26.9
Marketable equity securities - non-current
43.4
33.2
Total cash, cash equivalents and investments
340.0
60.1
Cash and cash equivalents increased by $269.7 million in the first six months of 2025. Cash held in foreign currencies represents balances in Canadian dollars and Mexican Pesos. The value of non-current marketable equity securities increased by $10.2 million.
Cash provided by operating activities (in millions)
197.5
95.8
Cash provided by operating activities for the six months ended June 30, 2025, of $197.5 million represents a $101.7 million increase compared to the $95.8 million of cash provided by operations during the same period of 2024. $62.8 million of the variance was attributable to higher income adjusted for non-cash items, reflecting higher net income driven by higher revenues, partly offset by lower non-cash depreciation, depletion and amortization expense, and a working capital improvement of $39.0 million primarily driven by lower accounts receivable and inventory, in addition to an accounts payable build.
Cash used in investing activities (in millions)
(108.3
(96.8
During the six months ended June 30, 2025, we invested $112.1 million in capital expenditures, an increase of $14.1 million compared to the same period in 2024. Cash used in investing activities of $108.3 million includes $3.7 million of proceeds received from the sale of investments.
Cash provided by financing activities (in millions)
180.0
(79.6
During the six months ended June 30, 2025, we had net borrowings of $16.0 million on our revolving credit facility resulting in $39.0 million outstanding at an interest rate of 6.7% on June 30, 2025. In addition, during the six months ended June 30, 2025 and 2024:
54
The table below presents our fixed, non-cancelable contractual obligations and commitments primarily related to our Senior Notes, IQ Notes, credit facility, outstanding purchase orders (including certain capital expenditures) and lease arrangements as of June 30, 2025 (in thousands):
Payments Due By Period
Less than 1 year
1-3 years
4-5 years
More than5 years
Purchase obligations (1)
37,922
Credit facility(2)
1,422
2,690
39,074
43,186
Finance lease commitments (3)
8,357
2,318
Operating lease commitments (4)
2,505
2,162
Senior Notes (5)
531,138
IQ Notes (6)
Total contractual cash obligations
121,920
544,690
43,554
714,962
We record liabilities for costs associated with mine closure, reclamation of land and other environmental matters. At June 30, 2025, our liabilities for these matters totaled $128.2 million. Future expenditures related to closure, reclamation and environmental expenditures at our sites are difficult to estimate, although we anticipate we will incur expenditures relating to these obligations over the next 30 years. For additional information relating to our environmental obligations, see Note 11 of Notes to Condensed Consolidated Financial Statements (Unaudited).
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 2024 Form 10-K.
At June 30, 2025, 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.
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 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.; Hecla Quebec, Inc.; and Alexco Resource Corp. 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.
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:
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.
Unaudited Interim Condensed Consolidating Balance Sheets
As of June 30, 2025
Parent
Guarantors
Non-Guarantors
Eliminations
Consolidated
Assets
282,590
13,489
486
53,252
140,572
24,471
218,295
Properties, plants, equipment and mineral interests, net
603
2,705,732
8,104
Intercompany receivable (payable)
(367,109
(730,040
612,706
484,443
Investments in subsidiaries
2,386,402
(52
(2,386,350
529,653
21,016
29,002
(499,615
80,056
2,885,391
2,150,717
674,769
(2,401,522
Liabilities and Stockholders' Equity
Current liabilities
8,755
165,375
36,097
(17,265
511,829
9,739
Non-current portion of accrued reclamation
117,839
1,487
Non-current deferred tax liability
54,772
98,202
2,147
Stockholders' equity
2,310,035
1,749,217
637,185
(2,386,404
Total liabilities and stockholders' equity
As of December 31, 2024
14,755
11,624
489
37,143
125,698
24,443
187,284
Properties, plants, equipment and mineral interests - net
2,685,407
8,109
(437,765
(650,923
594,307
494,381
2,451,783
(2,451,731
502,802
21,686
28,775
(480,474
72,789
2,569,321
2,193,440
656,123
(2,437,824
41,612
156,652
24,099
(24,525
464,075
6,406
(37
38,483
109,650
1,512
24,122
86,141
2,039,512
1,821,238
630,546
(2,451,782
Unaudited Interim Condensed Consolidating Statements of Operations
Revenues
(1,266
566,632
Cost of sales
(2,832
(293,462
(296,294
Depreciation, depletion, amortization
(9,341
(14,100
(1,098
(24,539
(200
(12,295
(815
(13,310
Equity in earnings of subsidiaries
68,572
(68,572
Other income (expense)
62,768
(51,156
(4,997
(27,011
(20,396
117,701
120,075
(6,910
(95,583
Benefit (provision) from income taxes
(31,124
(42,509
(2,084
27,011
77,566
(8,994
Income applicable to common stockholders
Changes in comprehensive income
58
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 June 30, 2025, which are sensitive to changes in commodity prices and foreign exchange rates and are not held for trading purposes. Actual results could differ materially from those projected in the forward-looking statements. In the normal course of business, we also face risks that are either non-financial or non-quantifiable (See Part I, Item 1A. – Risk Factors of our 2024 Form 10-K).
Changes in the market prices of silver, gold, lead, zinc and copper 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 2024 Form 10-K). We utilize collars and 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 2024 Form 10-K). At June 30, 2025, metals contained in concentrate sales and exposed to future price changes totaled 0.9 million ounces of silver, 750 ounces of gold, 9,475 tons of zinc and 4,825 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 $7.3 million. As discussed in Note 8 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, lead and copper sales.
Commodity-Price Risk Management
See Note 8 of Notes to Condensed Consolidated Financial Statements (Unaudited) for a description of our commodity-price risk management program.
Foreign Currency Risk Management
We operate and have mining interests in Canada, which exposes us to risks associated with fluctuations in the exchange rates between the USD and the CAD. We determined the functional currency for our Canadian operations is the USD. As such, foreign exchange gains and losses associated with the re-measurement of monetary assets and liabilities from CAD to USD are recorded to earnings each period. For the three and six months ended June 30, 2025, we recognized a net foreign exchange loss of $3.5 million and $3.9 million, compared to a net foreign exchange gain of $2.7 million and $6.7 million for the three and six months ended June 30, 2024. 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 June 30, 2025 would have resulted in a change of approximately $7.2 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 CAD.
See Note 9 of Notes to Condensed Consolidated Financial Statements (Unaudited) for a description of our foreign currency risk management program.
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 June 30, 2025, 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 three months ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Internal control systems, no matter how well designed and operated, have inherent limitations. Therefore, even a system which is determined to be effective cannot provide absolute assurance that all control issues have been detected or prevented. Our systems of internal controls are designed to provide reasonable assurance with respect to financial statement preparation and presentation.
Part II - Other Information
Hecla Mining Company and Subsidiaries
Item 1. Legal Proceedings
For information concerning legal proceedings, refer to Note 11 of Notes to Condensed Consolidated Financial Statements (Unaudited), which is incorporated by reference into this Item 1.
Item 1A. Risk Factors
Item 1A. – Risk Factors of our 2024 Form 10-K set forth information relating to important risks and uncertainties that could materially adversely affect our business, financial condition or operating results.
Tariffs, other import/export regulations, or trade disputes between the United States and other jurisdictions may have a negative effect on global economic conditions and on our business, financial results and financial condition.
There remains risk and uncertainty to our business and the global economy surrounding tariffs imposed by the Trump Administration and possible reciprocal tariffs announced by other countries. On July 6, 2025, Treasury Secretary Scott Bessent announced that countries that have not reached trade deals with the United States by August 1 will no longer be subject to a pause of the country-specific tariff rates previously announced on April 2. In addition, on July 7, the administration sent letters setting country-specific tariff rates for several countries with whom the U.S. has not reached trade deals, including Japan and South Korea, with tariffs set for each at 25% on all goods effective August 1. On July 22 and July 31, Japan and South Korea, respectively, reached trade deals with the United States, reducing their export tariff rates to 15%. To date, neither nation has reciprocated with tariffs that impact our products sold therein.
Currently, we sell our products into Japan and South Korea, as well as Canada, and we have recently had sales into China. We have very little sales in the United States. As of the date of this report, neither Japan nor South Korea have announced plans to implement reciprocal tariffs on U.S. imports in response to the U.S.-announced tariffs. While the impacts of tariffs on us to date have been immaterial to the sales of our products, reciprocal tariffs could make it more expensive for us to export our products to affected countries, including Japan and South Korea. This creates risk for us that customers in those or other tariff-impacted countries will seek to renegotiate existing agreements with us, seek to shift some or all of their increased costs to us in future agreements, break or terminate agreements with us if they are deemed uneconomic to the customer, or take other actions, any of which alone or in combination could materially adversely impact our business, financial condition, and results of operations. Further, any materials that we import to the U.S. from countries subject to tariffs could become more expensive if subject to a tariff, which could also have a material adverse impact on our business, financial condition, and results of operations.
In addition to possible impacts directly on our business, tariffs or other trade obstacles could have a material adverse effect on global economic conditions and the stability of global financial markets, and they may significantly reduce global trade. Any of these factors could depress economic activity, impact U.S. dollar/foreign currency exchange rates, restrict our access to customers and have a material adverse effect on our business, financial condition and results of operations.
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 5. Other Information
During the three months ended June 30, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
Item 6. Exhibits
Hecla Mining Company and Wholly Owned Subsidiaries
Form 10-Q – June 30, 2025
Index to Exhibits
Exhibit
Number
3.1
Restated Certificate of Incorporation of Hecla Mining Company. Filed as exhibit 3.1 to Registrant’s Current Report on form 8-K filed on May 22, 2025 (File No. 1-08491) and incorporated herein by reference.
10.1
Form of Indemnification Agreement dated May 21, 2025, between Registrant and Dean Gehring. Identical Indemnification Agreements were entered into between the Registrant and Charles B. Stanley on May 4, 2007, David C. Sienko on January 29, 2010, Robert D. Brown on January 4, 2016, Stephen F. Ralbovsky and George R. Johnson on March 1, 2016, Catherine J. Boggs on January 1, 2017, Alice Wong on February 26, 2021, Michael L. Clary on March 1, 2020, Russell D. Lawlar on March 1, 2021, Kurt Allen on July 1, 2021, Carlos Aguiar on August 16, 2023, Mark P. Board on February 22, 2024, Jill Satre on October 16, 2024, Rob Krcmarov on November 7, 2024, and Patrick Malone on April 7, 2025. Filed as exhibit 10.7 to Registrant’s Form 10-K for the year ended December 31, 2024 (File No. 1-8491) and incorporated herein by reference. (1)
Hecla Mining Company 2010 Stock Incentive Plan – Notice of Award of Restricted Stock Units, as amended and effective June 6, 2025. (1)*
10.3
Hecla Mining Company 2010 Stock Incentive Plan – Notice of Award of Performance-based Stock Units, as amended and effective June 6, 2025. (1)*
10.4
Form of Change in Control and Severance Agreement dated June 5, 2025, between Registrant and each of Kurt Allen, Carlos Aguiar, Michael Clary, and Robert Brown. Identical Change in Control and Severance Agreements entered into between the Registrant and Rob Krcmarov on November 7, 2024 and between the Registrant and each of Russell Lawlar and David Sienko on June 20, 2025. Filed as exhibit 10.3 to Registrant’s Current Report on Form 8-K on November 4, 2024 (File No. 1-8491) and incorporated herein by reference. (1)
31.1*
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
95*
Mine safety information listed in Section 1503 of the Dodd-Frank Act.
101.INS
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document. **
101.SCH
Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents **
104
Cover page formatted as Inline XBRL and contained in Exhibit 101 **
* Filed herewith
** XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
(1) Indicates a management contract or compensatory plan or arrangement.
Items 2 and 3 of Part II are not applicable and are omitted from this report.
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.
(Registrant)
Date:
August 6, 2025
By:
/s/ Rob Krcmarov
Rob Krcmarov, President and Chief Executive Officer,
Director
/s/ Russell D. Lawlar
Russell D. Lawlar, Senior Vice President,
Chief Financial Officer