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, 2026
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 July 31, 2026
Common stock, par value
$0.25 par value per share
671,768,431
Hecla Mining Company
Form 10-Q
For the Quarter Ended June 30, 2026
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, 2026 and 2025
Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 2026 And 2025
4
Condensed Consolidated Balance Sheets - June 30, 2026 and December 31, 2025
5
Condensed Consolidated Statements of Changes in Stockholders' Equity – Three Months Ended and Six Months Ended June 30, 2026 and 2025
6
Notes to Condensed Consolidated Financial Statements (unaudited)
8
Forward-Looking Statements
26
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
27
Overview
Consolidated Results of Operations
29
Reconciliation of Costs Applicable to 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)
41
Financial Liquidity and Capital Resources
46
Contractual Obligations, Contingent Liabilities and Commitments
49
Off-Balance Sheet Arrangements
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
50
Item 4.
Controls and Procedures
51
PART II.
OTHER INFORMATION
52
Legal Proceedings
Item 1A.
Risk Factors
Mine Safety Disclosures
Item 5.
Other Information
Item 6.
Exhibits
53
Signatures
54
*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, 2026
June 30, 2025
Sales
$
333,851
218,992
745,284
424,326
COSTS AND EXPENSES
Costs applicable to sales (1)
117,283
102,400
241,693
209,237
Depreciation, depletion and amortization
36,772
31,313
70,540
61,129
General and administrative
15,173
12,540
30,926
24,539
Exploration and pre-development
11,681
8,737
16,297
13,050
Care and maintenance
3,062
4,165
6,308
7,471
Provision for closed operations and environmental matters
1,329
844
2,626
1,634
Other operating expense, net
2,853
1,026
8,089
1,894
Total costs and expenses
188,153
161,025
376,479
318,954
Income from operations
145,698
57,967
368,805
105,372
Other expense:
Interest expense
(2,413
)
(10,948
(8,069
(22,340
Fair value adjustments, net
(9,246
4,450
(15,191
7,838
Net foreign exchange loss
(4,445
(3,793
(3,947
(4,160
Other income
7,049
1,345
10,598
2,287
Total other expense
(9,055
(8,946
(16,609
(16,375
Income before income and mining taxes
136,643
49,021
352,196
88,997
Income and mining tax provision
(18,767
(22,111
(69,667
(37,748
Income from continuing operations
117,876
26,910
282,529
51,249
Income (loss) from discontinued operations, net of taxes
—
30,795
(183,681
35,328
Net income
57,705
98,848
86,577
Preferred stock dividends
(132
(138
(264
(276
Net income applicable to common stockholders
117,744
57,567
98,584
86,301
Comprehensive income:
Change in fair value of derivative contracts designated as hedge transactions and other
(8,144
3,253
(10,301
5,687
Comprehensive income from continuing operations
109,732
30,163
272,228
56,936
Comprehensive income (loss) from discontinued operations
Comprehensive income
60,958
88,547
92,264
Net income (loss) per common share:
Basic:
Continuing operations
0.18
0.04
0.42
0.08
Discontinued operations
0.05
(0.27
0.06
Basic income per common share after preferred dividends
0.09
0.15
0.14
Diluted income (loss) per share:
0.17
Diluted income per common share after preferred dividends
Weighted average number of common shares outstanding - basic
670,763
636,928
670,579
634,339
Weighted average number of common shares outstanding - diluted
675,886
639,739
675,865
636,991
(1) Excludes depreciation, depletion and amortization
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:
Less: (Loss) income from discontinued operations, net of taxes
Non-cash elements included in net income:
71,382
62,671
Inventory adjustments
2,370
15,191
(7,838
Provision for reclamation and closure costs
3,728
3,179
Stock-based compensation
6,081
4,923
Deferred income taxes
35,977
32,405
3,947
4,160
Other non-cash items, net
1,640
588
Change in assets and liabilities:
Accounts receivable
20,206
(10,078
Inventories
(14,882
(15,595
Other current and non-current assets
(57,613
5,632
Accounts payable, accrued and other current liabilities
(8,099
(3,635
Accrued payroll and related benefits
3,730
7,876
Accrued taxes
(5,973
(964
Accrued reclamation and closure costs and other non-current liabilities
(3
(912
Cash provided by operating activities of continuing operations
357,841
136,031
Cash provided by operating activities of discontinued operations
11,324
61,503
Net cash provided by operating activities
369,165
197,534
Investing activities:
Additions to property, plant and mine development
(78,407
(80,514
Proceeds from sale of Hecla Quebec, net of transaction costs
178,181
Proceeds from sale of Minera Hecla
5,228
Proceeds from sales of investments
117,359
3,696
Purchases of investments
(56,419
Proceeds from asset dispositions
739
128
Net cash provided by (used in) investing activities of continuing operations
166,681
(76,690
Net cash used in investing activities of discontinued operations
(8,799
(31,624
Net cash provided by (used in) investing activities
157,882
(108,314
Financing activities:
Proceeds from sale of common stock, net
63
174,132
Acquisition of treasury stock
(4,528
(885
Borrowing of debt
133,000
Repayment of debt
(263,000
(117,000
Dividends paid to common and preferred stockholders
(5,298
(5,023
Repayments of finance leases and other
(3,746
(3,082
Net cash (used in) provided by financing activities of continuing operations
(276,509
181,142
Net cash used in financing activities of discontinued operations
(8,431
(1,138
Net cash (used in) provided by financing activities
(284,940
180,004
Effect of exchange rates on cash
(187
479
Net increase in cash, cash equivalents and restricted cash and cash equivalents
241,920
269,703
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period
242,732
28,045
Cash, cash equivalents and restricted cash and cash equivalents at end of period
484,652
297,748
Reconciliation of cash and cash equivalents and restricted cash and cash equivalents above
Cash and cash equivalents
483,482
296,565
Non-current restricted cash and cash equivalents
1,170
1,183
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
10,628
21,387
Cash paid for income and mining taxes, net
59,228
6,217
Significant non-cash investing and financing activities:
Common stock issued as incentive compensation
1,382
2,503
Common stock issued for 401(k) match
1,313
2,605
Common shares and royalty asset received for sale of Hecla Quebec
130,026
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except shares)
December 31, 2025
ASSETS
Current assets:
241,558
Accounts receivable:
Trade
127,416
170,230
Other, net
42,553
12,019
Inventories:
Product inventories
36,832
26,518
Materials and supplies
59,907
55,169
Current investments
1,858
59,644
Other current assets
19,923
23,421
Assets of discontinued operations
40,785
Total current assets
771,971
629,344
Non-current investments
152,543
47,842
Restricted cash and cash equivalents
1,174
Property, plants, equipment and mine development, net
2,137,252
2,130,581
Operating lease right-of-use assets
8,290
8,859
Other non-current assets
114,051
31,901
710,944
Total assets
3,185,277
3,560,645
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities
71,285
77,592
32,546
30,228
17,215
18,544
Finance leases
5,171
4,262
Accrued reclamation and closure costs
10,902
13,795
Accrued interest
7,678
Derivative liabilities
9,689
37,181
Other current liabilities
1,741
1,926
Liabilities of discontinued operations
40,358
Total current liabilities
148,549
231,564
116,690
112,491
Long-term debt including finance leases
7,563
263,171
Deferred tax liabilities
198,902
157,585
Other non-current liabilities
35,749
33,912
170,276
Total liabilities
507,453
968,999
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, June 30, 2026 - 150,736 shares issued and outstanding and December 31, 2025 - 153,956 shares, liquidation preference — $7,550
38
39
Common stock, $0.25 par value, authorized 1,250,000,000 shares; issued June 30, 2026 — 680,925,226 shares and December 31, 2025 — 679,220,408 shares
170,115
169,689
Capital surplus
2,650,243
2,643,211
Accumulated deficit
(88,593
(182,143
Accumulated other comprehensive loss, net
(13,635
(3,334
Less treasury stock, at cost; June 30, 2026 — 9,190,886 and December 31, 2025 — 8,920,348 shares issued and held in treasury
(40,344
(35,816
Total stockholders’ equity
2,677,824
2,591,646
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, 2026
Series BPreferredStock
CommonStock
Capital Surplus
AccumulatedDeficit
AccumulatedOtherComprehensive Loss, net
TreasuryStock
Total
Balances, April 1, 2026
$39
$169,779
$2,647,282
$(203,819)
$(5,491)
$(36,977)
$2,570,813
Stock-based compensation expense
1,914
Stock-based compensation distributed (1,247,619 shares)
312
(312)
(3,367)
Common stock issued for preferred stock conversion (10,354 shares)
(1)
Common stock issued to directors (86,532 shares)
22
1,360
Common stock ($0.00375 per share) and Series B Preferred stock ($0.875 per share) dividends declared
(2,650)
Other comprehensive loss
(8,144)
Balances, June 30, 2026
$38
$170,115
$2,650,243
$(88,593)
$(13,635)
$(40,344)
$2,677,824
Three Months Ended June 30, 2025
AccumulatedOtherComprehensive (Loss) Income, net
Balances, April 1, 2025
$160,228
$2,423,631
$(467,168)
$(7,832)
$(34,931)
$2,073,967
1,953
Stock-based compensation distributed (669,735 shares)
287
(287)
(885)
Common stock issued to directors (179,836 shares)
993
1,034
Common stock issued for 401(k) match (229,832 shares)
64
1,322
1,386
(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
Six Months Ended June 30, 2026
Balances, January 1, 2026
$169,689
$2,643,211
$(182,143)
$(3,334)
$2,591,646
4,699
Stock-based compensation distributed (1,534,669 shares)
384
(384)
(4,528)
Common stock issued for warrant (8,000 shares) and preferred stock conversion (10,354 shares)
60
Common stock issued for 401(k) match (65,263 shares)
16
1,297
(5,298)
(10,301)
Six Months Ended June 30, 2025
Balances, January 1, 2025
$160,052
$2,418,149
$(493,529)
$(10,266)
$2,039,514
3,889
Stock-based compensation distributed (1,146,510 shares)
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
(5,023)
Common stock issued for 401(k) match (482,722 shares)
121
2,484
7
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, 2025 (“2025 Form 10-K”). 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, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.
On March 25, 2026, we completed the previously announced sale of our wholly owned subsidiary Hecla Quebec Inc. (“Hecla Quebec”), which owned the Casa Berardi mine and other exploration properties in Quebec, Canada, to Orezone Gold Corporation (“Orezone”) for total undiscounted consideration of up to $601.7 million. The transaction represents a strategic shift that has a major effect on our operations and financial results and therefore, beginning with the quarterly report on Form 10-Q for the period ending March 31, 2026, the Casa Berardi operation is no longer a reportable segment and its financial results are reflected in our condensed consolidated financial statements as a discontinued operation for all periods presented, including prior periods which have been recast to reflect this presentation. Unless otherwise specified, these notes to the unaudited interim condensed consolidated financial statements reflect continuing operations. See Note 13. Sale of Hecla Quebec Inc. and Discontinued Operations for additional information.
During the six months ended June 30, 2026, we also completed the sale of our immaterial Mexican subsidiaries, Minera Hecla and Industrias Hecla, as we executed on our strategic decision to exit Mexico. Minera Hecla was engaged in rehabilitation activities of the former San Sebastian mine site. Total cash consideration of $5.2 million was received, and we recognized a loss of $2.4 million.
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, and (ii) doré containing silver and gold. We are currently organized and managed in three segments: Greens Creek, Lucky Friday, and Keno Hill.
We regularly review our segment reporting for alignment with our strategic goals and operational structure as well as for evaluation of business performance and the allocation of resources by our 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 gross profit. For all segments, the CODM uses segment gross profit to assess segment performance and allocate resources for each segment predominantly in the annual budget and quarterly 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 drive the financial performance of our reportable segments are (i) salaries, wages and other benefits, (ii) contractors, (iii) materials and 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 metal 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 (loss) 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, 2026 and 2025 (in thousands):
Three months ended June 30, 2026
Greens Creek
Lucky Friday
Keno Hill
Total Reportable Segments
Other
Metal sales
165,333
123,221
34,468
323,022
Environmental remediation services
10,829
Intersegment sales
2,234
Reconciliation of sales
36,702
325,256
336,085
Elimination of intersegment sales
(2,234
Total consolidated sales
Salaries, wages and other benefits
19,224
18,665
8,739
46,628
111
46,739
Contractors
2,717
4,082
4,018
10,817
10,651
21,468
Materials and consumables
26,722
10,575
7,957
45,254
(511
44,743
Product inventory change
(9,606
1,457
(490
(8,639
Other direct production costs
10,854
191
1,912
12,957
15
12,972
14,314
16,951
5,507
Gross profit
101,108
71,300
6,825
179,233
563
179,796
Other operating expenses (a)
34,098
Other Expense:
Foreign exchange gain, net
Capital additions
12,070
16,681
7,236
35,987
3,155
39,142
(a) Other operating expense items include general and administrative, exploration and pre-development, care and maintenance, provision for closed operations and environmental matters, and other operating expense, net.
9
Three months ended June 30, 2025
122,002
64,273
26,121
212,396
6,596
1,201
27,322
213,597
220,193
(1,201
Salaries, wages and employee benefits
18,281
14,559
7,209
40,049
138
40,187
1,557
3,828
3,886
9,271
6,419
15,690
25,400
10,899
8,050
44,349
68
44,417
(9,234
(476
1,968
(7,742
10,020
201
(373
9,848
12,897
13,275
5,141
Gross profit (loss)
63,081
21,987
240
85,308
(29
85,279
27,312
8,397
15,942
17,045
41,384
1,292
42,676
10
Six months ended June 30, 2026
416,332
232,577
80,894
729,803
15,481
3,873
84,767
733,676
749,157
(3,873
39,806
39,188
17,636
96,630
289
96,919
5,422
8,038
6,269
19,729
15,291
35,020
54,317
21,020
15,230
90,567
(417
90,150
(4,223
1,164
(3,708
(6,767
20,964
733
4,632
26,329
42
26,371
30,297
30,560
9,683
269,749
131,874
31,152
432,775
276
433,051
64,246
Foreign exchange loss, net
18,183
33,699
22,261
74,143
4,264
78,407
11
Six months ended June 30, 2025
240,145
127,467
43,030
410,642
13,684
2,187
45,217
412,829
426,513
(2,187
36,534
29,335
13,681
79,550
196
79,746
2,462
7,691
7,437
17,590
13,350
30,940
51,065
22,322
14,044
87,431
174
87,605
(8,333
706
(5,994
(13,621
20,345
(419
4,641
24,567
26,486
26,700
7,943
111,586
41,132
1,278
153,996
(36
153,960
48,588
19,156
31,388
27,481
78,025
2,489
80,514
Other sales for the three and six months ended June 30, 2026 is solely comprised of revenue from our environmental remediation services subsidiary in the Yukon. During the three and six months ended June 30, 2026, Keno Hill sold $2.2 million (2025: $1.2 million) and $3.9 million (2025: $2.2 million), respectively, of precious metals concentrate to Greens Creek which is eliminated upon consolidation.
Sales by metal for the three and six months ended June 30, 2026 and 2025 were as follows (in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
Silver
213,728
122,475
509,361
240,452
Gold
43,205
38,872
100,182
70,231
Lead
24,364
21,476
46,661
43,582
Zinc
37,470
31,138
74,343
64,263
Copper
979
420
1,370
Less: Smelter and refining charges
4,247
(2,544
(1,164
(9,256
Total metal sales
Total sales
Sales of metals for the three and six months ended June 30, 2026 include net gains of $9.9 million (2025: $3.3 million) and for the six months ended June 30, 2026, net losses of $0.3 million (2025: $2.0 million), on derivative contracts for silver, lead, and zinc. See Note 8 for more information.
12
The following table presents total assets by reportable segment as of June 30, 2026 and December 31, 2025 (in thousands):
Total assets:
660,706
640,011
664,035
688,997
496,117
505,205
1,364,419
974,703
Total assets of reportable segments
2,808,916
751,729
Note 3. Income and Mining Taxes
Major components of our income and mining tax for the three and six months ended June 30, 2026 and 2025 are as follows (in thousands):
June 30,
Current:
Domestic
(11,912
(2,271
(33,114
(5,328
Foreign
1,244
(15
(576
Total current income and mining tax provision
(10,668
(2,286
(33,690
(5,343
Deferred:
(9,098
(18,571
(34,143
(30,295
999
(1,254
(1,834
(2,110
Total deferred income and mining tax provision
(19,825
(35,977
(32,405
Total income and mining tax provision
The income and mining tax provision for the three and six months ended June 30, 2026 and 2025 varies from the amounts that would have resulted from applying the statutory tax rates to pre-tax income primarily due to the impact of taxation in foreign jurisdictions, domestic and foreign mining taxes, percentage depletion, non-recognition of net operating losses, the tax effect of Global Intangible Low-Taxed Income and subpart F income inclusion, foreign exchange gains and losses in certain jurisdictions, and the tax effects of the entity classification election discussed below.
For the three and six months ended June 30, 2026, we used the annual effective tax rate method to calculate the income and mining tax provision. During the quarter we filed and were approved for an Entity Classification Election to classify Klondex Mines Unlimited Liability Co as a disregarded entity effective January 1, 2026. Effective January 1, 2026, the Klondex (USA) Group joined the US consolidated Hecla Mining Company Group's income tax filings. Due to this change in entity classification, we released a portion of the valuation allowance and revalued the state deferred tax liabilities in our Klondex USA tax group. These amounts were treated as discrete adjustments within the tax provision.
We file income tax returns in U.S. federal and state jurisdictions. Our Canadian subsidiaries file income tax returns in Canada, as well as in the province of British Columbia, and the Yukon Territory. We will be filing a final income tax return for Hecla Quebec Inc. for the disposition of the Casa Berardi mine during the third quarter of 2026.
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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 a Supplemental Excess Retirement Plan ("SERP") covering certain eligible employees.
Net periodic pension cost for the plans consisted of the following for the three and six months ended June 30, 2026 and 2025 (in thousands):
Three Months EndedJune 30,
Six Months EndedJune 30,
Service cost
1,068
1,998
2,136
Interest cost
2,181
2,094
4,362
4,188
Expected return on plan assets
(2,969
(3,251
(5,938
(6,502
Amortization of prior service cost
20
40
Amortization of net loss
326
652
Net periodic pension cost
231
257
462
514
For the three and six months ended June 30, 2026 and 2025, the service cost component of net periodic pension cost is included in the same line items of our condensed consolidated financial statements as other employee compensation costs. For the three and six months ended June 30, 2026, the net benefit related to all other components of net periodic pension cost of $0.8 million (2025: $0.8 million) and $1.5 million (2025: $1.6 million), respectively, is included in other income on our condensed consolidated statements of operations and comprehensive income.
Note 5. Income (Loss) 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 presented.
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The following table represents net income (loss) per common share – basic and diluted (in thousands, except income(loss) per share):
Three months ended June 30,
Six months ended June 30,
Numerator
Income (loss) from discontinued operations
Denominator
Basic weighted average common shares
Dilutive units
5,123
2,811
5,286
2,652
Diluted weighted average common shares
Basic income per share:
Basic earnings per common share
Diluted income per common share
Note 6. Stockholders’ Equity
Warrants
We have 2,060,000 warrants outstanding at June 30, 2026, (December 31, 2025: 2,068,000 warrants) following the conversion of 8,000 warrants during the six months ended June 30, 2026, each with an exercise price of $8.02. The 2,060,000 warrants outstanding expire in April 2032. The warrants were issued as part of the Klondex acquisition purchase consideration in July 2018. Each warrant entitles the warrant holder to purchase one share of our common stock. We received $64,000 for the 8,000 warrants converted.
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 us 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. We did not sell any shares under ATM during the six months ended June 30, 2026. Since inception, we have sold 59,802,012 shares under the ATM for total proceeds of $348.5 million, net of commissions and fees of $5.4 million.
Preferred Stock
During six months ended June 30, 2026, 3,220 shares of Preferred Stock were converted into 10,354 shares of our common stock.
Stock-based Compensation Plans
We have stock incentive plans for executives, directors, and eligible employees, under which performance stock units, restricted stock units, and shares of common stock are granted. For the three and six months ended June 30, 2026, stock-based compensation expense for restricted stock units and performance-based grants to employees, totaled $2.0 million (2025: $3.0 million) and $4.8 million (2025: $4.9 million), respectively. At June 30, 2026, there was $22.3 million of unrecognized stock-based compensation cost which is expected to be recognized over a weighted-average remaining vesting period of 1.5 years.
The following table summarizes the stock-based compensation grants awarded during the three and six months ended June 30, 2026:
Grant date
Award type
Number granted
Grant date fair value per share
June 23, 2026
Restricted stock
573,134
15.98
Performance based
311,244
23.33
Pursuant to our directors stock plan, 86,532 shares (2025: 179,836) with a value of $1.4 million (2025: $1.0 million) were awarded to our directors and recorded as stock-based compensation expense during the three and six months ended June 30, 2026.
In connection with the vesting of incentive and share-based 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 we withhold the number of shares necessary to satisfy such tax withholding obligations and pay the obligations in cash. As a result, in the three and six months ended June 30, 2026, we withheld 223,404 shares valued at $3.3 million, or $15.07 per share and 270,538 shares valued at $4.5 million, or $16.74 per share, respectively. For the three and six months ended June 30, 2025, we withheld 151,976 shares valued at $0.9 million, or $5.82 per share.
Common and Preferred Stock Dividends
During the first two quarters of 2026, our Board of Directors declared and we paid a quarterly dividend of $0.00375 per common share, pursuant to our dividend policy. In addition, during the first two quarters of 2026, our Board of Directors declared and paid quarterly dividends of $0.875 on its Series B Cumulative Convertible Preferred Stock.
Accumulated Other Comprehensive Income (Loss), Net ("AOCI")
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
AOCI
Balance January 1, 2026
1,505
(4,839
Other comprehensive loss before reclassification
(1,507
Reclassification from AOCI to sales
(2,310
Reclassification from AOCI to costs applicable to sales
349
Reclassification from AOCI to fair value adjustments, net
525
Provision for income taxes
786
Balance March 31, 2026
(652
(5,491
(5,887
747
(3,004
Balance June 30, 2026
(8,796
Balance January 1, 2025
5,994
(16,260
(10,266
Other comprehensive gain before reclassification
3,688
(2,178
Reclassification from AOCI to discontinued operations
1,825
(901
Balance March 31, 2025
8,428
(7,832
6,919
(3,502
1,007
(1,171
Balance June 30, 2025
(4,579
Note 7. Debt, Credit Agreement and Leases
On April 9, 2026, we repaid the remaining $263 million of our 7.25% Senior Notes ("Senior Notes") for a total payment of $265.8 million, including interest of $2.8 million. The full redemption of the Senior Notes resulted in a loss on extinguishment of $0.9 million related to the remaining portion of deferred debt issuance costs, which were recorded as part of Interest expense in our Consolidated Statement of Operations and Comprehensive Income. At December 31, 2025, our debt consisted entirely of our Senior Notes.
The following table summarizes our long-term debt balances as of December 31, 2025 (in thousands):
Senior Notes
Principal
263,000
Unamortized discount/premium and issuance costs
(1,053
Total debt
261,947
The following table summarizes the scheduled annual future payments, including interest, for our finance and operating leases as of June 30, 2026 (in thousands). Operating leases are included in other current and non-current liabilities on our condensed consolidated balance sheets. See Note 11 for more information.
Twelve-month period ending June 30,
Finance Leases
Operating Leases
2027
5,821
1,464
2028
2,422
1,501
2029
1,506
2030
1,381
2031
1,211
928
Thereafter
5,055
14,298
11,835
Less: effect of discounting
(1,564
(3,091
12,734
8,744
Credit Agreement
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, plus a $75 million accordion option, with a maturity date of July 21, 2028 (accelerated to August 15, 2027 if our Senior Notes were not refinanced by that date), the proceeds may be used for general corporate purposes.
At June 30, 2026, we had no amounts drawn and $3.5 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, 2026.
Note 8. Derivative Instruments
General
Our current risk management policy provides that up to 75% of the next five years of our foreign currency, lead and zinc metals prices and silver and gold price exposure may be covered under a derivatives program with certain other limitations. Within this period we can hedge up to 100% of a specific exposure, provided the derivative allows us to participate 100% in the upside. Our program also utilizes derivatives to manage price risk exposure created from the date 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 non-US subsidiaries owning the Keno Hill operation are USD-functional currency entities which routinely incur Canadian dollar ("CAD") denominated expenses. Such expenses expose us to exchange rate fluctuations, for which we have a program to manage our exposure to fluctuations of these subsidiaries' future CAD denominated operating and capital costs. The program utilizes forward contracts to buy CAD, and are not designated as cash flow hedges.
During the six months ended June 30, 2026, realized losses of $0.9 million related to derivatives designated to our previously held Casa Berardi operation were transferred from accumulated other comprehensive (loss) into discontinued operations (three and six months ended June 30, 2025: $1.0 million loss and $2.8 million loss, respectively).
As of June 30, 2026, we have a total of 135 forward contracts outstanding to buy a total of CAD $91.8 million having a notional amount of USD $66.3 million to provide economic hedges to the following exposures in 2026 and 2027:
As of June 30, 2026 and December 31, 2025, we recorded the following balances for the fair value of the forward contracts (in millions):
December 31,
Balance sheet line item:
$0.3
$1.1
2.1
(0.8)
For the three and six months ended June 30, 2026, net losses of $3.6 million and $3.3 million, respectively, (2025: $5.4 million and $5.5 million gain), were recognized.
Metals Prices
We currently utilize a combination of derivatives including financially-settled forward contracts, commodity price collars, and commodity price put options to manage the exposure to:
The following tables summarize the quantities of metals committed under forward metals contracts at June 30, 2026 and December 31, 2025 which are designated and accounted for as cash flow hedges:
Pounds under contract (in 000's)
Average price per pound
(pounds)
Contracts on provisional sales
2026 settlements
23,920
15,432
1.37
1.02
Contracts on forecasted sales
18,574
8,818
1.32
0.98
2027 settlements
53,242
1.41
Average price per ounce/pound
18,850
13,117
1.05
53,407
42,108
1.33
23,810
1.36
N/A
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We utilize Collars to manage our exposure to changes in the price of precious metals in both our provisional concentrate sales 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 the minimum price level specified in the contracts, while limiting our potential gains to the maximum price level specified in the contracts, should market prices rise higher. This strategy helps protect us from significant price drops while still allowing for some upside participation within the minimum and maximum price range. For the three and six months ended June 30, 2026, these Collars had net gains of $12.6 million and net losses of $9.7 million, respectively (three and six months ended June 30, 2025: $0.8 million and $0.2 million loss, respectively). The collars are not designated as cash flow hedges.
The following table summarizes the quantities of silver and gold ounces committed under collars at June 30, 2026.
Settlement Period
Ounces under contract
Average strike price per silver ounce
Average strike price per gold ounce
Silver (ounces)
Gold (ounces)
Minimum ($)
Maximum ($)
475,000
370
72.60
82.35
4,600.00
4,900.00
In December 2025, we entered into financially-settled put option contracts to manage the exposure of future silver sales to potential declines in silver market prices. These put options give us the option, but not the obligation, to realize established prices on quantities of silver to be sold in the future. For the three and six months ended June 30, 2026, we recognized net losses of $6.4 million and $7.6 million, respectively, on these puts. The following table summarizes the quantities of metals for which we have entered into put contracts and the strike price as of June 30, 2026:
Production Protected (in 000's)
Strike price per ounce
($)
6,767
50.00
We recorded the following balances for the fair value of our metals price contracts as of June 30, 2026 and December 31, 2025 (in millions):
$10.4
$8.6
7.2
(7.6)
(36.4)
(4.5)
(1.9)
Net unrealized losses of $14.9 million related to the effective portion of the forward metals contracts designated as hedges were included in accumulated other comprehensive (loss) as of June 30, 2026. 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 $12.3 million in net unrealized losses included in accumulated other comprehensive income (loss) as of June 30, 2026 will be reclassified to current earnings in the next twelve months.
During the three months ended June 30, 2026, we recognized a net gain of $9.9 million (2025: $3.3 million gain), including a $0.7 million loss transferred from accumulated other comprehensive income (loss) (2025: $3.0 million gain). During the six months ended June 30, 2026, we recognized a net loss of $0.3 million (2025: $2.0 million loss), including a $1.6 million gain transferred from accumulated other comprehensive income (loss) (2025: $5.7 million gain). 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, 2026, 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 $21.5 million as of June 30, 2026, which includes
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accrued interest but excludes any adjustment for nonperformance risk. If we were in breach of any of these provisions at June 30, 2026, we could have been required to settle our obligations under the agreements at their termination value of $21.5 million.
Note 9. Fair Value Measurement
Fair value adjustments, net is comprised of the following (in thousands):
For the three months ended June 30,
Loss on derivative contracts
(10,638
(416
(20,973
(669
Gain on sale of equity securities investments
70
23,745
Unrealized gain (loss) on equity securities investments
4,866
(17,963
8,507
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 30,2026
Balance atDecember 31,2025
InputHierarchy Level
Assets:
Cash and cash equivalents:
Money market funds and other bank deposits
Level 1
Current and non-current investments:
Equity securities
154,401
107,486
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
306
1,127
Metal forward contracts
10,371
15,840
Gold-price contingent asset
4,210
Liabilities:
Derivative contracts - current and non-current derivative liabilities:
2,100
829
12,138
38,273
Cash and cash equivalents consist primarily of money market funds which are carried at fair value.
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.
Our current and non-current investments consist of marketable equity securities of mining companies and mutual funds held by our SERP 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 Keno Hill operation (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 derivative contracts to (i) manage the exposure to changes in prices of silver, gold, zinc, and lead contained in our concentrate shipments that have not reached final settlement and (ii) 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.
The gold-price linked contingent assets were part of the consideration for the sale of Hecla Quebec to Orezone (see Note 13). The contingent assets are valued quarterly using an option pricing model with observable inputs.
The Credit Agreement, which we consider to be Level 1 in the fair value hierarchy, has a carrying and fair value of nil.
Note 10. Product Inventories
Our major components of product inventories are (in thousands):
Concentrates
26,983
15,656
Stockpiled ore
9,849
10,862
Total product inventories
Note 11. Commitments, Contingencies and Obligations
San Mateo Creek Basin, New Mexico
In July 2018, the 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 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.
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Contingencies Relating to former Casa Berardi Segment
In May 2023, the wall of an impoundment dam (HM3) storing mixed waste material (i.e. clay, till, and rock, but not tailings or other deleterious materials) stripped during open pit mining at our former Casa Berardi mine experienced a slip resulting in the waste material being mobilized downstream. The incident was investigated by the Quebec Ministry of Environment, Fight Against Climate Change, Wildlife and Parks. This investigation resulted in the issuance in July 2026 of four Statements of Offence by the Directeur des poursuites criminelles et pénales (the Quebec authority responsible for prosecuting penal violations of environmental legislation) against Orezone Quebec Inc. (formerly Hecla Quebec Inc.), alleging non-compliance with the conditions of HM3's waste storage authorization and an unauthorized release of contaminants in connection with the incident described above, and seeking penalties, costs, and contributions of approximately $2.7 million in the aggregate. We are reviewing the Statements of Offence and anticipate engaging in negotiations with the government regarding these allegations.
Under the terms of our sale of Hecla Quebec to Orezone, we have agreed to reimburse Orezone for any financial penalties, fines, charges, surcharges, or other amounts payable as a result of the HM3 incident described above, excluding any remediation, closure or similar work at HM3 or any costs associated therewith. We are not liable for any portion of such penalties resulting from actions taken at Casa Berardi after closing. Another term of the transaction provides Orezone with a set-off right to reduce future deferred cash payments owed to us if the financial assurance required under Casa Berardi’s updated closure plan exceeds $150 million. Specifically, Orezone may reduce such future payments by 50% of any amount by which the required financial assurance exceeds $150 million, excluding amounts arising from the mine's post-closing actions that increase the closure scope beyond what was contemplated at the time of sale. On May 13, 2026, the Quebec Ministry of Natural Resources and Forests approved the updated closure plan for Casa Berardi and fixed the total required financial assurance at CAD $237,143,712. Because this amount exceeds the $150 million threshold, Orezone has a right to reduce future deferred cash payments by 50% of the excess, converted to U.S. dollars in accordance with the terms of the purchase agreement, excluding amounts arising from the mine's post-closing actions that increase the closure scope beyond what is currently contemplated. We have accrued $11.5 million for the liability.
Debt
See Note 7 for information on the commitments related to our debt arrangements as of June 30, 2026.
Other Commitments
Our contractual obligations as of June 30, 2026 included open purchase orders and commitments of $9.0 million, $9.4 million and $13.4 million, for various capital and non-capital items at Greens Creek, Lucky Friday, and Keno Hill, respectively. We also have total commitments of $14.3 million relating to scheduled payments on finance leases, including interest, primarily for equipment at our Greens Creek, Lucky Friday, and Keno Hill units, and total commitments of $11.8 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, 2026, we had surety bonds totaling $221.7 million and letters of credit totaling $3.5 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 Standard Updates that Became Effective in the Current Period
In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract. The ASU expands an existing scope exception under ASC 815 to exclude certain contracts with underlyings based on the operations or activities of one of the parties, such as contingent payments the Company will receive related to the permitting success of two open pits at Casa Berardi. The ASU is effective for annual periods beginning after December 15, 2026, including interim periods therein. We early adopted ASU 2025-07 during the six months ended June 30, 2026.
Accounting Standards Updates to Become Effective in Future Periods
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: (i) purchases of inventory, (ii) employee compensation, (iii) depreciation, (iv) depreciation, depletion and amortization from oil and gas, and other extractive sector activities, and (v) 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. Sale of Hecla Quebec Inc. and Discontinued Operations
The sale of Hecla Quebec represents a disciplined portfolio optimization and focuses capital allocation on our silver assets, which we believe to represent significant growth and value creation opportunities. We have solidified revenue exposure to silver and we are focused on operating in what we view to be the most favorable jurisdictions. We used the cash proceeds from the transaction for debt reduction and balance sheet strengthening, enhancing our financial flexibility and capacity to invest in strategic growth investment opportunities.
As part of the sale of Hecla Quebec, we received total consideration with a fair value of $385.7 million comprised of the following:
Orezone has a set-off right to reduce the unpaid balance of the Deferred Cash Consideration by 50% of the amount by which the financial assurance required by the Quebec government under the updated Casa Berardi closure plan exceeds $150 million, excluding increases caused by Orezone's post-closing actions. The closure excess amount has been included in determining the fair value of the Deferred Cash consideration.
The fair value of the Deferred Cash Consideration was determined using a present value model by reference to Orezone's estimated credit rating and considering the expected closure excess amount to be withheld from the first payment. The Deferred Cash Consideration payments have been classified as non-current receivables, which is included in other non-current assets on the unaudited interim Condensed Consolidated Balance Sheet, due to being contractual rights to receive cash at 18 and 30 months, and have been recorded at amortized cost. The discount will be unwound in line with the effective interest method and recognized as interest income over the respective payment periods for each payment.
23
The fair value of each Contingent Cash Consideration payment to be received was determined by using an option pricing model, with significant assumptions including the following: expected success and timing of permitting, the timing of when production would commence, forward gold prices, and Orezone's estimated credit rating. The Company concluded that each contingent consideration payment to be received is a financial asset as it will be settled in cash. The Company next evaluated whether each contingent consideration payment is within the scope of ASC 815 "Derivatives and Hedging" or not. For the contingent consideration payment to be received linked to future gold prices, we concluded that the underlying being the gold price is a market rate, and that the fair value of this contingent consideration payment is assessed at each reporting date, with changes in fair value recorded in earnings. The contingent consideration payments linked to future assets have been classified as current and non-current receivables, which is included in other current and non-current assets on the Condensed Consolidated Balance Sheet, due to being contractual rights to receive cash at 12 and 24 months, and have been recorded at fair value.
For the contingent consideration payments linked to permitting success and future production following permitting success, we concluded these contingent consideration payments are not within the scope of ASC 815, "Derivatives and Hedging" as the receipt of the permits and future production are subject to operational and/or regulatory factors. The Company elected to follow the guidance in ASC 450, Contingencies which requires subsequent assessment for indicators of impairment. Additionally, payment received in excess of initial fair value recorded will be recognized as gains in the period received. The contingent consideration payments linked to permitting success and future production following permitting success, have been classified as non-current receivables, which is included in other non-current assets on the Condensed Consolidated Balance Sheet.
We recognized a loss of $192.5 million, upon the sale of Hecla Quebec which is reported within loss from discontinued operations, net of income and mining taxes on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).
Below is a summary of Hecla Quebec's results from discontinued operations for the six months ended June 30, 2026, three and six months ended June 30, 2025, and statement of financial position as of December 31, 2025.
24
Hecla Quebec Inc.
Results of Discontinued Operations
(Dollars are in Thousands)
85,035
70,284
141,040
44,944
37,629
87,057
5,846
932
14,415
72
1,051
260
Other operating income, net
(1,616
(1,431
49,246
39,612
100,301
Income from discontinued operations
35,789
30,672
40,739
(151
(91
(310
5,165
(2,231
5,404
166
Total other expense (income)
5,456
(2,322
5,547
Income of discontinued operations
41,245
28,350
46,286
Loss on disposal of Hecla Quebec Inc.
(192,482
(10,450
(19,549
(10,958
Reconciliation of Assets and Liabilities of Discontinued Operations to Balance Sheet
5,091
11,615
21,483
Prepaid expenses
2,596
710,246
698
24,690
7,891
2,911
75,980
88,840
210,634
25
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 2025 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 in our Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 Form 10-K"), filed with the United States Securities and Exchange Commission (the “SEC”). The results of operations reported and summarized below are not necessarily indicative of future operating results (refer to “Forward-Looking Statements” above for further discussion). References to “Notes” are Notes included in our Notes to Condensed Consolidated Financial Statements (Unaudited). Throughout this MD&A, all references to income or losses per share are on a diluted basis.
Hecla Mining Company stands as North America's premier silver producer, with a rich heritage dating back to 1891. Our operations at Greens Creek, Lucky Friday, and Keno Hill combined to produce 37% of total 2025 silver production in the U.S. and Canada, complemented by significant gold production from Greens Creek. Our strategic positioning in the stable jurisdictions of the 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:
Recent Developments
On March 25, 2026, we completed the sale of our Hecla Quebec Inc. ("Hecla Quebec") subsidiary which owns the Casa Berardi mine to Orezone Gold Corporation ("Orezone") for a fair value of $385.7 million ($601.7 million on an undiscounted basis) comprised of the following:
Orezone has a set-off right to reduce the unpaid balance of the Deferred Cash Consideration payments by 50% of the amount by which the financial assurance required by the Quebec government under the updated Casa Berardi closure plan exceeds $150 million, excluding increases caused by Orezone's post-closing actions. The closure excess amount has been included in determining the fair value of the Deferred Cash Consideration.
The sale of Hecla Quebec represents disciplined portfolio optimization and focuses capital allocation on our silver assets, which we believe to represent significant growth and value creation opportunities. We have solidified our revenue exposure to silver and we are focused on operating in what we view to be the most favorable jurisdictions. We used the cash proceeds from the transaction for debt reduction and balance sheet strengthening, enhancing our financial flexibility and capacity to invest in strategic growth investments.
We determined that the sale of Hecla Quebec represents a strategic shift that has a major effect on our operations and financial results and therefore, beginning in the first quarterly report on Form 10-Q for the period ending March 31, 2026, the Casa Berardi operation is no longer a reportable segment and its financial results are reflected in the Company’s unaudited interim condensed consolidated financial statements as a discontinued operation for all periods presented. Unless otherwise specified, the discussion of financial results within this Item 2 MD&A will focus on our continuing operations, in relation to the respective comparative periods which have been recast to reflect the continuing operations of our business.
Second Quarter 2026 Highlights
Operational Achievements:
Financial Performance:
Year to date 2026 Highlights
Growth Pipeline
We are evaluating several organic growth opportunities that may leverage existing infrastructure, operational expertise, and permitting frameworks.
At Greens Creek, we are evaluating a proposed pyrite concentrate circuit that, if developed, could recover additional silver and gold that currently report to tailings. Preliminary engineering and metallurgical work indicates the potential for incremental future silver and gold production from this circuit, possibly as soon as late 2027 or the first half of 2028. These estimates are preliminary and remain subject to significant technical, economic, permitting, metallurgical, and other uncertainties, and the project has not been approved for construction.
We are also evaluating the potential to reprocess all or part of the existing dry-stack tailings facility at Greens Creek. This project could recover additional silver and gold currently contained in tailings material, subject to further metallurgical testing and the identification of a suitable third-party processing arrangement.
Lastly, we continue to evaluate the potential restart of our fully permitted Midas mill in northern Nevada. Any restart would depend on, among other things, our ability to expand the existing high-grade gold and silver resource to a scale sufficient to support a sustainable operation.
Each of these opportunities remains in varying stages of engineering, metallurgical evaluation, permitting review, and economic analysis. The timing, scope, and ultimate development of these opportunities may influence future capital allocation decisions, exploration expenditures, and sustaining or growth capital requirements, and may require the receipt of additional permits, approvals, and other authorizations. We have not approved construction or development of any of these projects, and any decision to proceed would require further technical, economic, and regulatory review and approval by management and, where applicable, our Board of Directors.
28
There is no assurance that any of these opportunities will be developed, or that if developed, will be completed on the timeline or with the results currently anticipated.
See Item 1A. "Risk Factors" in Part II of this report.
External Factors that Impact our Results
Our financial results vary as a result of fluctuations in market prices primarily for silver and, to a lesser extent, gold, zinc, lead, and copper. World market prices for these commodities have fluctuated historically and are affected by numerous factors beyond our control. To date, tariffs have not materially impacted our financial results. However, future tariffs or other global trade restraints could impact our performance. 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 is favorable due to macro-economic factors such as geopolitical uncertainty and global growth expectations, which have resulted in significant volatility in the financial and commodities markets, including the precious metals market. See Item 1A. “Risk Factors” contained in Part I of our 2025 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 investments, 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, steel, and higher labor and contractor costs.
Consolidated Results of Continuing Operations
Total sales for the three and six months ended June 30, 2026 and 2025 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 passed through to the government for reimbursement with minimal operating income generated by us in performing this work.
Total metal sales for the three and six months ended June 30, 2026 and 2025, 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
53,593
Variances - 2026 versus 2025:
Price
95,748
8,849
8,278
112,875
Volume
(4,495
(4,516
(9,040
Smelter terms
6,791
61,842
109,215
271,335
31,309
11,961
314,605
(2,426
(1,358
248
(3,536
8,092
121,424
The fluctuation in sales for the three and six months ended June 30, 2026 compared to the same periods in 2025 was primarily due to the following:
Silver –
London PM Fix ($/ounce)
73.44
33.63
78.92
32.77
Realized price per ounce
63.06
34.82
73.14
34.20
Gold –
4,517
3,279
4,696
3,071
4,256
3,314
4,620
3,148
Lead –
LME Final Cash Buyer ($/pound)
0.89
0.88
Realized price per pound
0.97
0.92
Zinc –
1.57
1.20
1.52
1.24
1.63
1.31
1.51
Copper –
6.05
4.32
5.94
4.28
5.67
4.56
5.72
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 negative price adjustments to provisional settlements of $13.1 million and $6.2 million for the three and six months ended June 30, 2026, respectively, (three and six months ended June 30, 2025: $4.2 million and $11.1 million positive adjustments, 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 and collars 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, and zinc. Realized prices are calculated by dividing gross revenues for each metal (which include the price adjustments and gains and losses on the metals derivative contracts discussed below) by the payable quantities of each metal included in concentrate, doré, and carbon material shipped during the period.
30
Silver -
Ounces produced
4,208,827
4,514,567
8,111,976
8,621,809
Payable ounces sold
3,392,314
3,517,713
6,967,332
7,030,462
Gold -
14,199
17,750
27,085
31,509
10,151
11,634
21,684
22,112
Lead -
Tons produced
14,650
28,384
28,657
Payable tons sold
12,594
11,663
23,994
23,653
Zinc -
17,014
18,479
33,818
35,414
11,163
11,667
24,619
24,514
403
499
865
910
1
108
37
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, costs applicable to sales, depreciation, depletion and amortization, gross profit, 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, 2026 and 2025 were as follows (in thousands, except for Cash Cost and AISC):
Total Silver (3)
Other (4)
Total Silver and Other
(49,911
(34,970
(22,136
(107,017
(117,283
(14,314
(16,951
(5,507
(36,772
Cash Cost (2)
(17.11
3.95
(8.10
AISC (2)
(10.71
17.08
6.07
(46,024
(29,011
(20,740
(95,775
(6,625
(102,400
(12,897
(13,275
(5,141
(31,313
(11.91
6.19
(5.46
1.29
(8.19
`
19.07
5.19
11.91
(116,286
(70,143
(40,059
(226,488
(15,205
(241,693
(30,297
(30,560
(9,683
(70,540
(14.45
7.58
(5.73
(9.52
20.07
7.10
(102,073
(59,635
(33,809
(195,517
(13,720
(209,237
(26,486
(26,700
(7,943
(61,129
(8.37
7.77
(2.29
(4.50
19.57
8.35
31
While revenue from gold, zinc, lead, and copper 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 because 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 we consider zinc, lead, gold, and copper at Greens Creek, Lucky Friday, and Keno Hill 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 has not met our definition of commercial production. We define an operation as being in commercial production upon achievement of the following criteria:
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.
32
For the three months ended June 30, 2026 we reported income from continuing operations of $117.9 million (2025: $26.9 million) and net income applicable to common stockholders of $117.7 million (2025: $57.6 million). The following were the significant drivers of the increase in income from continuing operations:
The positive movements mentioned above were partly offset by:
For the six months ended June 30, 2026 we reported income from continuing operations of $282.5 million (2025: $51.2 million) and net income applicable to common stockholders of $98.6 million (2025: $86.3 million). Net income applicable to common stockholders is lower than income from continuing operations, due to the recognition of a loss from discontinued operations of $183.7 million, primarily due to the loss of $192.5 million on the sale of Hecla Quebec. The following were the significant drivers of the increase in income from continuing operations:
33
Dollars are in thousands (except per ounce and per ton amounts)
Tons of ore milled
217,433
230,221
426,355
443,120
Production:
2,051,022
2,422,978
4,228,164
4,425,538
Lead (tons)
4,752
4,931
9,150
9,427
Zinc (tons)
12,553
14,024
25,103
26,859
Copper (tons)
Payable metal quantities sold:
1,333,880
1,591,745
3,358,411
3,336,397
2,653
2,862
6,111
6,183
8,684
9,039
18,975
18,546
Ore grades:
Silver ounces per ton
12.0
13.4
12.5
12.6
Gold ounces per ton
0.088
0.104
0.086
0.095
Lead percent
2.6
%
2.5
Zinc percent
6.5
6.9
6.6
6.8
Copper percent
0.2
0.3
Total production cost per ton
260.15
225.71
266.52
232.57
Cash Cost, After By-product Credits, per Silver Ounce (2)
AISC, After By-Product Credits, per Silver Ounce (2)
The $38.0 million increase in gross profit for the three months ended June 30, 2026, compared to the same period in 2025 was primarily due to higher realized sales prices for all metals, partly offset by lower sales volumes reflecting lower grades and tons milled.
Capital investments in the current quarter were $3.7 million higher compared to the same period in 2025. Current quarter costs included $5.8 million for surface infrastructure and equipment, $1.8 million for mining equipment and development, $1.7 million for primary ore access development and $1.2 million for definition drilling.
Production of all metals was negatively impacted during the three months ended June 30, 2026, compared to the same period in 2025, primarily due to lower tons milled and grades.
The $158.2 million increase in gross profit for the six months ended June 30, 2026, compared to the same period in 2025 was primarily due to higher realized sales prices for silver and gold, partly offset by lower sales volumes for silver and gold.
Capital investments in the current year were $1.0 million lower compared to the same period in 2025. Current year costs included $7.3 million for surface infrastructure and equipment, $4.8 million for primary ore access development, $2.5 million for mining equipment and related costs, $2.2 million for definition drilling and $1.1 million on mill equipment.
Production of all metals was negatively impacted during the six months ended June 30, 2026, compared to the same period in 2025, primarily due to lower tons milled and grades.
34
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
27.05
22.42
27.56
25.15
By-product credits
(44.16
(34.33
(42.01
(33.52
Cash Cost, After By-product Credits, per Silver Ounce
35
AISC, Before By-product Credits, per Silver Ounce
33.45
26.14
32.49
29.02
AISC, After By-product Credits, per Silver Ounce
For the three and six months ended June 30, 2026, the decrease in Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce compared to the same period in 2025 was primarily due to an increase in gold by-product credits, reflecting higher realized gold prices, partly offset by lower silver production and higher production costs.
$123,221
$64,273
$232,577
$127,467
(34,970)
(29,011)
(70,143)
(59,635)
(16,951)
(13,275)
(30,560)
(26,700)
$71,300
$21,987
$131,874
$41,132
101,978
114,475
210,586
223,220
1,532,569
1,340,877
2,769,857
2,673,129
9,967
8,829
18,217
17,309
3,884
3,911
7,716
7,592
1,457,066
1,228,493
2,588,758
2,497,338
9,443
8,027
17,017
16,005
2,816
2,887
5,645
5,968
15.6
13.7
12.7
10.3%
8.2%
9.1%
4.5%
4.2%
4.3%
4.1%
$321.26
$241.63
$315.29
$249.89
$3.95
$6.19
$7.58
$7.77
AISC, After By-product Credits, per Silver Ounce (2)
$17.08
$19.07
$20.07
$19.57
$16,681
$15,942
$33,699
$31,388
Gross profit increased by $49.3 million for the three months ended June 30, 2026 compared to the comparable period in 2025, reflecting higher realized prices for silver, zinc, and lead and higher sales volumes for silver and lead reflecting higher production resulting from improved grades.
Capital investments increased by $0.7 million for the three months ended June 30, 2026, compared to the same period in 2025. Significant capital expenditures during the three months ended June 30, 2026, included $7.0 million on tailings facility pond 5 construction, capital development of $5.7 million, $1.4 million for the surface cooling project, $1.0 million for a shaft rehabilitation, $0.8 million for definition drilling.
Gross profit increased by $90.7 million for the six months ended June 30, 2026 compared to the comparable period in 2025, reflecting higher realized prices for silver, zinc, and lead and higher sales volumes for silver and lead driven by higher production.
Capital investments increased by $2.3 million for the six months ended June 30, 2026, compared to the same period in 2025. Significant capital expenditures during the six months ended June 30, 2026, included capital development of $13.5 million, $7.3 million on tailings facility pond 5 construction, $2.5 million for the surface cooling project, $2.6 million for a shaft rehabilitation, $1.5 million
36
for definition drilling, $1.5 million for underground equipment, $1.2 million on ramp work and $1.1 million on a cone crusher replacement.
The charts below illustrate the factors contributing to Cash Cost, After By-product Credits, Per Silver Ounce for Lucky Friday:
20.57
22.47
24.93
23.79
(16.62
(16.28
(17.35
(16.02
33.70
35.35
37.42
35.59
For the three months ended June 30, 2026, Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce are lower than the same period in 2025 primarily due to higher silver production, by-product credits, and treatment costs, partly offset by higher profit sharing.
For the six months ended June 30, 2026, Cash Cost, After By-product Credits, per Silver Ounce was largely in line with the same period in 2025 as higher silver production and by-product credits were offset by higher as-produced costs, primarily related to higher profit sharing. AISC, After By-product Credits, per Silver Ounce were higher than the same period in 2025 primarily due to higher sustaining capital investments.
33,504
26,771
57,778
54,182
625,236
750,712
1,113,955
1,523,142
573
890
1,018
1,921
577
544
963
527,960
697,475
946,755
1,196,727
432
775
800
1,466
396
407
732
666
19.3
28.9
19.9
29.0
1.8
3.5
1.9
3.7
2.0
2.3
We have not disclosed cost per ounce statistics for the Keno Hill operation as it 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 operation 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 three months ended June 30, 2026, was 368 tons per day (2025: 294 tons per day) (the mine is currently permitted to a maximum of an average of 440 tons per day), with silver grades milled of 19.3 ounces per ton (2025: 28.9 ounces per ton). During the first six months of 2026, the mine continued to focus on development and ramp up to higher tonnage rates with mining rates of 332 tons per day during the quarter, with material sourced from both the Bermingham and Flame and Moth deposits. Mill throughput, while currently steady, was negatively impacted in the first quarter by limited ore availability from the Bermingham deposit due to reduced output from the Bear zone and dilution control issues in narrow vein stopes caused by mining remnant areas as we departed that zone and transitioned into the Arctic zone, as well as by mine sequencing at both Bermingham and Flame and Moth deposits, which was altered as a result of power curtailments by Yukon Energy (the electric utility that supplies the Mine) lasting sixteen days in December 2025 and five days in January 2026 due to extreme cold weather. These impacts have diminished, however, near-term production may decrease due to other factors discussed below.
During the three months ended June 30, 2026, Keno Hill recorded sales of $34.5 million (2025: $26.1 million), with the increase due to higher realized prices, partly offset by lower metals sales volumes driven by lower grades. As a result of higher revenues, Keno Hill generated gross profit of $6.8 million during the three months ended June 30, 2026 (2025: $0.2 million). During the quarter, Keno Hill recorded capital investments of $7.2 million, primarily related to mine development, camp expansion, dry-stack tailings facility, and surface equipment.
During the six months ended June 30, 2026, Keno Hill recorded sales of $80.9 million (2025: $43.0 million), with the increase due to higher realized prices, partly offset by lower metals sales volumes driven by lower grades. As a result of higher revenues, Keno Hill generated gross profit of $31.2 million during the six months ended June 30, 2026 (2025: $1.3 million). During the six months ended June 30, 2026, Keno Hill recorded capital investments of $22.3 million, primarily related to $15.9 million for mine development and infrastructure, $3.3 million for mobile equipment, $1.5 million for phase 2 of the dry-stack tailings facility, $1.1 million for definition drilling and $0.5 million for permitting.
Prior Period Disruptions and Ongoing Impacts
From commencement of production until late August 2024, ore production and mill throughput generally increased as planned, resulting in higher production levels, although still below the mill’s permitted capacity. Beginning in mid‑2024 and continuing into 2025, however, Keno Hill was impacted by external events that affected permitting, projects, production, and delayed our ability to achieve sustained, profitable operations.
In late June 2024, an unrelated third party, Victoria Gold, experienced a heap leach failure at its Eagle Mine located near Keno Hill. Due to the resulting focus of the Yukon Government (“YG”) and the First Nation of Na‑Cho Nyäk Dun (“FNNND”) on the incident response rather than routine permitting matters, we were required to suspend milling operations at Keno Hill between August 27 and October 26, 2024 while awaiting authorizations and permits.
Beginning in late October 2024, Keno Hill experienced power curtailments after Yukon Energy suffered a turbine failure at its Aishihik hydroelectric plant in Whitehorse. This failure, combined with Yukon Energy’s focus on electric transmission line maintenance and increased power demand due to cold winter temperatures, resulted in reduced power deliveries to Keno Hill and prevented us from fully powering the mine and mill on multiple occasions in late 2024 and the first quarter of 2025. These power constraints reduced silver production by approximately 130,000 ounces and resulted in approximately $0.5 million of labor costs for idled employees through September 30, 2025. Power conditions improved following the first quarter of 2025 and we do not expect additional curtailments due to the Aishihik turbine, which was successfully repaired in the third quarter of 2025. However, as mentioned above, we experienced power curtailments in the fourth quarter of 2025 and the first quarter of 2026. See the Risk Factor in our 2025 Form 10-K, "We may be subject to a number of unanticipated risks related to inadequate infrastructure."
Current Operational Challenges
Keno Hill continues to face operational challenges that constrain throughput and limit our ability to ramp up production. These challenges include: ore availability and dilution control issues during the transition from the Bear to the Arctic Zone at Bermingham; Flame and Moth mine sequencing; workforce availability and retention in a remote location; execution of infrastructure projects; limited camp capacity; and incremental demands on site infrastructure and resources associated with the ramp‑up of our subsidiary’s environmental remediation services activities at the Keno Hill site.
In addition, deliveries of certain equipment, including haul trucks, a bolter, a scissor deck, and a generator, were delayed during the first quarter. These delays affected capital development activities and, in the future, if delays occur and are not resolved on a timely basis, they could adversely impact mining flexibility and future ore availability.
Permitting and Infrastructure Constraints
Permitting remains one of the most significant factors affecting our ability to achieve sustained, profitable production at Keno Hill. Increasing production requires additional capacity across several operational areas, including tailings storage, waste rock disposal, water treatment and discharge limits, camp accommodation, and reliable power supply. Expanding these capacities requires obtaining new permits or amending existing permits, as well as capital investments to develop the associated infrastructure.
Although progress continues on these permitting matters, the pace of advancement has been affected by delays resulting from the Eagle Mine incident and heightened regulatory focus on the Yukon mining sector.
Tailings Storage
The currently permitted dry‑stack tailings storage area at Keno Hill (Phase 2E) is expected to reach capacity in approximately October 2026. We received governmental approvals for the Phase 2W dry‑stack expansion in early July 2026 and have begun construction. We currently expect Phase 2W to become operational before Phase 2E reaches capacity. Further in the future, at current milling rates, we project that we would run out of tailings storage space in the second quarter of 2028. If no alternative storage or disposal solution has been developed by that time, we may reduce mining rates in advance to preserve available storage capacity, which would curtail milling operations, or we may continue mining at or near current rates until storage capacity is reached, which could interrupt milling operations. The construction season in the Yukon is approximately April through October, and if permits are received by the first half of 2029, it is possible that tailings expansion could be advanced far enough in 2029 to permit the mill to resume normal production levels, and begin ramping up to higher production levels by the end of 2029.
Quartz Mining License and Water License Amendments
Keno Hill's mill is currently permitted to process up to 440 tons per day (and it has achieved that rate for multiple weeks during test run periods); however, several factors other than mill capacity limit actual throughput, including dry-stack tailings capacity and restrictions on waste rock production and disposal. To sustain operations at or near this permitted capacity, we will need to amend our quartz mining license (“QML”) and water license (“WL”) to remove these constraints. The process for securing these amendments includes submission of a Project Proposal to the Yukon Environmental and Socio‑economic Assessment Board (“YESAB”), which we intend to submit by year‑end 2026.
The YG is required to consult with the FNNND on permitting matters, including the YESAB review process. FNNND previously entered into a Cooperation and Benefits Agreement for Keno Hill, and we believe they remain supportive of the project. However, there can be no assurance that such support will continue or that the timing or outcome of the YESAB review will not be affected by FNNND’s position. In addition, FNNND has indicated interest in revisiting the existing Cooperation and Benefits Agreement ("CBA"), including unresolved wealth‑sharing provisions. We do not currently believe that negotiating changes to the CBA would impede the YESAB review process, but it is possible it could.
The YESAB review process is expected to take approximately 12 months, after which applications for amendments to the QML and WL would be submitted to the applicable regulators. We currently estimate that this overall process could be completed by approximately mid‑2029, although each sequential step in this process is subject to its own timing variability, and delays at any stage would affect the overall timeline. There can be no assurance, however, that any of these approvals or amendments will be obtained on this timeline or at all. Construction would commence after receiving the permits.
Waste Rock and Water Management Constraints
Our QML places limits on the cumulative amount of waste rock that may be produced during mining and on waste rock storage capacity and classification. At current mining rates, we project that the waste rock production limit could be reached by approximately mid‑2027, at which point waste rock production would need to be curtailed absent receipt of a QML amendment. If we do not alter mining rates by a sufficient amount or receive changes to our QML (which we are seeking, independent of the QML amendment process described above), it is possible mine production would stop by approximately mid‑2027 until the amended permits are received and related construction completed. Our QML also limits capacity in our waste rock disposal areas. At Bermingham, we have reached our authorized capacity for the current facility and we are temporarily storing waste rock in stockpiles until approvals to expand the waste rock disposal area can be obtained. In the event the Yukon Government restricts our ability to temporarily stockpile waste rock, our ability to further develop Bermingham would be limited, which could negatively impact production at Keno Hill. There is no assurance such approvals will be received, which could force us to curtail or halt production if alternative arrangements cannot be found.
As we develop new mining zones at Keno Hill, we have periodically encountered higher‑than‑expected groundwater inflows. While we currently remain within permitted water discharge limits, development of new zones could require an amendment to our WL. There can be no assurance that the YG would grant such an amendment. If we are unable to amend our WL on a timely basis and continued development would result in discharges exceeding permitted limits, we may be required to curtail production or adjust mine sequencing to remain in compliance.
See the Risk Factor in our 2025 Form 10‑K, “We are required to obtain governmental permits and other approvals in order to conduct mining operations.”
Strategic Focus and Path to 440 Tons Per Day
As stated above, Keno Hill has generated profits at current throughput rates and metal prices. Our near‑term strategic focus is to advance permitting and execute key infrastructure projects to place the mine on a path toward achieving its currently permitted capacity of 440 tons per day. At that rate and at current prices, we expect Keno Hill would generate sustained positive free cash flow while preserving optionality for potential expansion beyond 440 tons per day. As discussed above, to sustain operations at or near this permitted capacity, we will need to amend our QML and WL to remove these constraints. Sustained production at this level would require ore from both the Bermingham deposit and the lower‑grade Flame & Moth deposit, and, as discussed above, completion of infrastructure projects, receipt of required permit amendments, continued mine development, and maintenance of social license to operate.
If the prerequisites to continue mining through the mid-2027 to mid-2029 (or later) period – including receipt of QML and WL amendments are not met on a timely basis, our operations and financial results could be materially adversely affected. Even if amended permits are received on a timely basis, there will be a period of time required to construct the associated infrastructure. Given that the overall permitting process involves multiple sequential regulatory steps, each subject to its own timing variability, and risks inherent to construction in Yukon once permits are received, mining rates and continuous operation at Keno Hill between approximately 2027 and 2030 remains uncertain. It is likely that there will be times of curtailed production, if not outright halts to production during that period.
We continue to study the aforementioned issues to develop a plan to optimize Keno Hill for the periods described herein. Such a plan could result in accelerated production schedules and an earlier transition to care and maintenance. Alternatively, such a plan could result in slower mining rates so that curtailment periods are minimized, or possibly eliminated, until permits are received and sustained, profitable production at higher throughput rates is achievable.
If any one of the prerequisites described above is not achieved on a timely basis, or if metal prices decrease materially from current levels, Keno Hill could be placed on care and maintenance. See the Risk Factor in our 2025 Form 10‑K, “We may not realize all of the anticipated benefits from our acquisitions, including our 2022 acquisition of Alexco.”
Corporate Matters
Income Taxes
For the three months ended June 30, 2026, the Company recorded an income and mining tax provision of $18.7 million (2025: $22.1 million), resulting in an effective tax rate of 13.7% (2025: 45.1%). For the six months ended June 30, 2026, the Company recorded an income and mining tax provision of $69.7 million (2025: $37.7 million) resulting in an effective tax rate of 19.8% (2025: 42.4%). 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; (vi) the non-recognition of tax assets, and (vii) the change in tax status of Klondex ULC. 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, 2026, compared to the comparable period in 2025 is primarily related to variations in our income before taxes and the relative effect on the tax provision.
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 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 2025 Form 10-K.
The tables below present reconciliations between the most comparable GAAP measure of costs applicable to 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, 2026 and 2025.
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 each 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.
In thousands (except per ounce amounts)
Keno Hill (4)
Corporate (2)
Other (3)
Costs applicable to sales (5)
49,911
34,970
22,136
10,266
Treatment costs
(3,148
(2,794
(5,942
Change in product inventory
9,606
9,189
Reclamation and other costs
(889
(227
(1,116
Exclusion of Keno Hill cash costs (4)
Exclusion of Other costs (3)
Cash Cost, Before By-product Credits (1)
55,480
31,532
87,012
933
225
1,158
Sustaining capital
12,188
19,884
2,380
34,452
AISC, Before By-product Credits (1)
68,601
51,641
17,553
137,795
By-product credits:
(26,669
(8,971
(35,640
(56,935
(6,667
(16,494
(23,161
(311
Total By-product credits
(90,582
(25,465
(116,047
Cash Cost, After By-product Credits
(35,102
6,067
(29,035
AISC, After By-product Credits
(21,981
26,176
21,748
2,051
1,533
3,584
Cash Cost, Before By-product Credits, per Ounce
24.28
By-product credits per ounce
(32.38
Cash Cost, After By-product Credits, per Ounce
AISC, Before By-product Credits, per Ounce
38.45
AISC, After By-product Credits, per Ounce
43
Total Silver
46,024
29,011
20,740
6,625
(1,001
1,054
9,234
9,459
57
(160
(103
Exclusion of Other costs
54,314
30,130
84,444
757
195
952
8,268
17,069
1,270
26,607
63,339
47,394
13,810
124,543
(23,512
(7,120
(30,632
(52,194
(6,610
(14,708
(21,318
(871
(83,187
(21,828
(105,015
(28,873
8,302
(20,571
(19,848
25,566
19,528
Divided by ounces produced
2,423
1,341
3,764
22.44
(27.90
33.09
44
116,286
70,143
40,059
15,205
(2,253
(241
(2,494
4,223
(418
3,805
(1,735
(422
(2,157
116,521
69,062
185,583
1,867
450
2,317
18,983
34,147
3,388
56,518
137,371
103,659
34,314
275,344
(52,038
(17,788
(69,826
(112,149
(12,704
(30,269
(42,973
(744
(177,635
(48,057
(225,692
(61,114
21,005
(40,109
(40,264
55,602
49,652
4,228
2,770
6,998
26.52
(32.25
39.35
45
Keno Hill(4)
102,073
59,635
33,809
13,720
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
Exclusion of Lucky Friday by-product credits
(1,600
(148,358
(42,821
(191,179
(37,060
20,784
(16,276
(19,910
52,313
59,237
4,426
2,673
7,099
24.64
(26.93
35.28
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 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, 2026, we had $483.5 million in cash and cash equivalents, of which $10.6 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, 2026, we had no amount drawn on our $225 million credit facility plus a $75 million accordion option, with $3.5 million used for letters of credit, leaving $221.5 million available for 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 continuing operations are adequate to fund our 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, 2025, our Board of Directors declared and paid dividends on our common and preferred stock of $2.5 million (2025: $2.5 million) during the three months ended June 30, 2026. During the six months ended June 30, 2026, we paid dividends on our common and preferred stock of $5.3 million (2025: $5.0 million). Our common stock dividend policy anticipates paying an annual minimum dividend of $0.015 per share. 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, 2025, 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 depends 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, 2026 and December 31, 2025, 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, 2026, there were 197,998 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.
As a result of our current cash balances, the expected performance of our 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. While the formerly held Casa Berardi operation was a significant part of our operations, we don't believe its divestiture will have an impact on our ability to meet future obligations due to projected cash flow generation from our remaining operations, and the redemption of our Senior Notes. Our obligations and other uses of cash may include, but are not limited to: interest payments under our Credit Agreement; care and maintenance costs; capital investments at our operations; potential acquisitions of other mining companies or properties; regulatory matters; litigation; potential repurchases of our common stock under the program described above; and payment of dividends on common stock, if declared by our Board of Directors.
We currently estimate a range of approximately $208 to $223 million will be spent in 2026 on capital investments, primarily for equipment, infrastructure, and development at our mines, before any lease financing. We also estimate exploration and pre-development expenditures will total approximately $55 million in 2026. Our expenditures for these items and our related plans for 2026 may change based upon our financial position, metals prices, and other considerations. Our ability to fund the activities described above will depend on our operating performance, metals prices, our ability to estimate revenues and costs, sources of liquidity available to us, including the revolving credit facility, and other factors. A sustained downturn in metals prices, significant increase in operational or capital costs or other uses of cash, our inability to access the credit facility or the sources of liquidity discussed above, or other factors beyond our control could impact our plans. See the Risk Factor in our 2025 Form 10-K "An extended decline in metals prices, an increase in operating or capital costs, or treatment charges, mine accidents or closures, increasing regulatory obligations, or our inability to convert resources or exploration targets to reserves may cause us to record write-downs, which could negatively impact our results of operations."
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.
47
Our liquid assets include (in millions):
Cash and cash equivalents held in U.S. dollars
472.9
215.1
Cash and cash equivalents held in foreign currency
10.6
26.5
Total cash and cash equivalents
483.5
241.6
Marketable equity securities - current and non-current
154.4
107.5
Total cash, cash equivalents and investments
637.9
349.1
Cash and cash equivalents increased by $241.9 million in the first six months of 2026 from cash generated from operations, the proceeds received for disposing of Hecla Quebec, Minera Hecla, and marketable securities. Cash held in foreign currencies represents balances in Canadian dollars. The value of our current and non-current marketable equity securities increased by $46.9 million primarily due to consideration received as part of the Hecla Quebec sale, partly offset by disposals.
Six months ended
Cash provided by operating activities from continuing operations (in millions)
357.8
136.0
Cash provided by operating activities from continuing operations for the six months ended June 30, 2026, of $357.8 million represents a $221.8 million increase compared to the $136.0 million of cash provided by operating activities from continuing operations during the same period of 2025. $266.8 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 a negative $45.0 million working capital and other asset and liability movement.
Cash provided by (used in) investing activities of continuing operations (in millions)
166.7
(76.7
During the six months ended June 30, 2026, cash provided by investing activities of continuing operations increased by $243.4 million, primarily due to the sales of Hecla Quebec and Minera Hecla for total proceeds of $183.4 million, net of transaction costs paid. In addition, we generated net investment proceeds related to our marketable securities portfolio (which includes our SERP assets which are held in a Rabbi Trust) of $60.9 million. Capital investments of $78.4 million across our operations were consistent with the same period in 2025.
Cash (used in) provided by financing activities of continuing operations (in millions)
(276.5
181.1
Cash used in financing activities of continuing operations was lower than the same period in 2025 by $457.7 million primarily due to the repayment of $263.0 million of our Senior Notes. In addition, the prior period contained stock issuances under our ATM program for net proceeds of $174.1 million and net borrowings of $16.0 million on our revolving credit facility. In addition, during the six months ended June 30, 2026 we paid cash dividends on our common and preferred stock totaling $5.3 million (2025: $5.0 million) and made payments on our finance leases of $3.7 million (2025: $3.1 million).
Cash flows from discontinued operations for the six months ended June 30, 2026 have been presented in our condensed consolidated statements of cash flows. The discontinued operations reflect only the period prior to the disposal of Hecla Quebec on March 25, 2026, and are therefore not comparable to the six months ended June 30, 2025, which reflects a full six months of activity.
48
The table below presents our fixed, non-cancelable contractual obligations and commitments primarily related to our Senior Notes, credit facility, outstanding purchase orders (including certain capital expenditures), and lease arrangements as of June 30, 2026 (in thousands):
Payments Due By Period
Less than 1 year
1-3 years
4-5 years
More than5 years
Purchase obligations (1)
35,870
Credit facility(2)
1,837
1,753
3,590
Finance lease commitments (3)
4,844
3,633
Operating lease commitments (4)
3,007
2,309
Total contractual cash obligations
44,992
9,604
5,942
65,593
We record liabilities for costs associated with mine closure, reclamation of land and other environmental matters. At June 30, 2026, our liabilities for these matters totaled $127.6 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).
At June 30, 2026, 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.
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, 2026, 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 II, Item 1A. - Risk Factors of this Form 10-Q, Part I, Item 1A. – Risk Factors of our 2025 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 2025 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 2025 Form 10-K). At June 30, 2026, hedged metals contained in concentrate sales and exposed to future price changes totaled 0.5 million ounces of silver, 370 ounces of gold, 10,850 tons of zinc, and 7,000 tons of lead. If the price for each metal were to change by 10%, the change in the total value of the hedged concentrates sold would be approximately $8.5 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 financially-settled forward contracts for our silver, gold, zinc, and lead sales.
Commodity-Price Risk Management
See Note 8 of Notes to Condensed Consolidated Financial Statements (Unaudited) for a description of our metals prices 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, 2026, we recognized a net foreign exchange loss of $4.4 million (2025: $3.8 million) and $3.9 million (2025: $4.2 million). 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, 2026 would have resulted in a change of approximately $1.4 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 as economic hedges.
See Note 8 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, 2026, 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.
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 2025 Form 10-K set forth information relating to important risks and uncertainties that could materially adversely affect our business, financial condition, or operating results.
The growth opportunities described in this report are subject to significant risks and uncertainties.
The growth opportunities discussed elsewhere in this report, including the Greens Creek pyrite concentrate circuit, the Greens Creek tailings reprocessing project, and the potential restart of our Midas mill (collectively, the “Growth Projects”), are in early stages of technical and economic evaluation and are subject to the following risks:
In addition, the Growth Projects are subject to the risks described in Part I, Item 1A of our 2025 Form 10-K, including, without limitation, the following risks:
Any decision to proceed with development of these projects would require further technical, economic, and regulatory review and approval by management and, where applicable, our Board of Directors. There is no assurance that any of these projects will be developed, or that if developed, will be profitable or completed on the timeline, at the cost, or with the results currently projected.
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, 2026, 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, 2026
Index to Exhibits
Exhibit
Number
4.1(a)
Indenture, dated as of February 19, 2020, by and among Hecla Mining Company and The Bank of New York Mellon Trust Company, N.A., as trustee. Filed as exhibit 4.1 to Registrant’s Current Report on Form 8-K filed on February 19, 2020 (File No. 1-8491) and incorporated herein by reference.
4.1(b)
First Supplemental Indenture, dated as of February 19, 2020, among Hecla Mining Company, as Issuer, certain subsidiaries of Hecla Mining Company, as guarantors hereto, and the Bank of New York Mellon Trust, N.A., as Trustee. Filed as exhibit 4.2 to Registrant’s Current Report on Form 8-K filed on February 19, 2020 (File No. 1-8491) and incorporated herein by reference.
4.1(c)
Second Supplemental Indenture, dated as of February 6, 2023, among Hecla Mining Company, as Issuer, certain subsidiaries of Hecla Mining Company, as Guarantors hereto, and the Bank of New York Mellon Trust, N.A., as Trustee. Filed as exhibit 4.1(c) to Registrant’s Form 10-Q for the quarter ended March 31, 2023, filed on April 10, 2023 (File No. 1-8491). and incorporated herein by reference.
4.2
Form of 7.250% Senior Note due 2028 (included in Exhibit 4.1(b).
10.1
Amended and Restated Hecla Mining Company Stock Plan for Nonemployee Directors. Filed as exhibit 10.3 to Registrant’s Form 10-Q for the quarter ended September 30, 2024 (File No 1-8491) and incorporated herein by reference. (1)
10.2
First Amendment to the Amended and Restated Hecla Mining Company Stock Plan for Nonemployee Directors. Filed as exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on May 22, 2026 (File No. 1-8491) and incorporated herein by reference. (1)
10.3
Credit Agreement dated as of July 21, 2022, by and among Hecla Mining Company, Hecla Limited, Hecla Alaska LLC, Hecla Greens Creek Mining Company, and Hecla Juneau Mining Company, as the Borrowers, Bank of America, N.A., as the Administrative Agent for the Lenders, and various Lenders. Filed as exhibit 10.1 to Registrant’s Current Report on Form 8-K on July 21, 2022 (File No. 1-8491) and incorporated herein by reference.
10.4
First Amendment to Credit Agreement, dated as of May 3, 2024, by and among Hecla Mining Company, Hecla Limited, Hecla Alaska LLC, Hecla Greens Creek Mining Company, and Hecla Juneau Mining Company, as the Borrowers, Bank of America, N.A., as Administrative Agent for the Lenders, and various Lenders. Filed as exhibit 10.1 to Registrant’s Form 10-Q for the quarter ended March 31, 2024 (File No. 1-8491) and incorporated herein by reference.
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 **
(1) Indicates a management contract or compensatory plan or arrangement
* Filed herewith
** XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
Items 2 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 4, 2026
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