8-K: Hecla Mining Reports Record First Quarter 2025 Results, Driven by Strong Performance at Keno Hill and Lucky Friday

Hecla Mining Company announced record revenues and Adjusted EBITDA for the first quarter of 2025, with Keno Hill achieving its first profitable quarter and Lucky Friday setting a new milling record.

Summary

• Hecla Mining Company reported record sales of $261.3 million in Q1 2025, a 5% increase over the prior quarter.
• Net income applicable to common stockholders was $28.7 million, or $0.05 per share.
• Adjusted EBITDA reached a record $90.8 million for the quarter and $357.1 million over the last 12 months, improving the net leverage ratio to 1.5x.
• Silver production totaled 4.1 million ounces, and gold production was 34,232 ounces.
• Lucky Friday achieved a new quarterly milling record of 108,745 tons.
• Keno Hill's silver production increased by 23% over the previous quarter to 772,430 ounces and posted its first profitable quarter under Hecla ownership with $1.0 million of gross profit.
• Greens Creek mineralization was extended 400 feet down plunge to the south in the 200 South Zone.
• The company is maintaining its focus on strengthening the balance sheet, advancing Keno Hill's permitting, optimizing the operating portfolio, and identifying exploration opportunities.
• A common stock dividend of $0.00375 per share was declared, payable on or about June 10, 2025, to shareholders of record on May 23, 2025.
• A dividend of $0.875 per share was declared on the Series B Cumulative Convertible Preferred Stock, payable on or about July 1, 2025, to shareholders of record on June 16, 2025.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with record financial results and operational improvements. While there are some challenges and risks, the overall tone is optimistic and suggests a strong future for the company.

Positives

• Record sales of $261.3 million, a 5% increase over the prior quarter, driven by higher realized prices for precious metals.
• Net income applicable to common stockholders was $28.7 million, compared to $11.8 million in the prior quarter.
• Record Adjusted EBITDA of $90.8 million, with a net leverage ratio improvement to 1.5x.
• Keno Hill achieved its first profitable quarter under Hecla ownership, with $1.0 million of gross profit.
• Lucky Friday set a new quarterly milling record of 108,745 tons.
• Greens Creek's cost outlook has been lowered, maintaining cost of sales guidance at $289 million (includes depreciation) but lowering cash cost guidance to $0.25-$0.75 from the prior $2.00-$2.50 (after by-product credits), per silver ounce, and AISC to $6.50-$7.25 from $8.75-$9.50 (after by-product credits), per silver ounce.

Negatives

• Free cash flow was negative $18.4 million, compared to positive $6.7 million in the prior quarter, primarily due to lower cash flow from operations.
• Casa Berardi costs are anticipated to improve late in the third quarter of the year as the strip ratio of the 160 pit is expected to decline.
• Lucky Friday's cost of sales guidance is revised up to $165 million from $135 million (includes depreciation).
• Keno Hill mill throughput for the first quarter averaged 305 tons per day ('tpd'), remaining below the permitted capacity of 440 tpd.
• Casa Berardi is expected to have a production gap commencing in 2027 and continuing until 2032 or later, assuming no underground mine life extension.

Risks

• Power curtailment by YEC at Keno Hill has improved in 2025, with the previously reported eight days of operational stoppage remaining unchanged through quarter end.
• The Company estimates the power curtailments during planned August YEC maintenance downtime could lower production by approximately 90,000 ounces of silver in the third quarter.
• Keno Hill is not configured to sustainably produce 440 tons per day (although the mill has achieved that rate for multiple weeks on end during test run periods).
• If prices were to decrease from current prices, Keno Hill as currently configured would not be profitable, and placing the operation on care and maintenance would be an option.
• Casa Berardi is expected to have a production gap commencing in 2027 and continuing until 2032 or later, assuming no underground mine life extension.
• Given the expected hiatus in future production and the uncertainty surrounding permitting and timing of construction of the new open pits, the Company continues to consider strategic alternatives for Casa Berardi.

Future Outlook

The company is focused on strengthening its balance sheet, advancing Keno Hill's permitting and infrastructure, optimizing its portfolio, and identifying exploration opportunities to create shareholder value. Casa Berardi is expected to have a production gap commencing in 2027 to 2032 or later.

Management Comments

• Rob Krcmarov, President & Chief Executive Officer, stated that the quarter demonstrates the strength and growth potential of the business.
• Krcmarov highlighted the company's focus on operational excellence, portfolio optimization, financial discipline, and leveraging its position as North America's largest silver producer.

Industry Context

Hecla's focus on silver production aligns with growing demand from green technology markets. The company's strategic review of Casa Berardi reflects a broader industry trend of optimizing asset portfolios to maximize value and focus on core competencies.

Comparison to Industry Standards

• Hecla's AISC for silver production at Greens Creek is very competitive compared to peers such as Pan American Silver and Coeur Mining.
• The company's net leverage ratio of 1.5x is generally considered healthy compared to other mining companies, indicating a strong financial position.
• Keno Hill's ramp-up to commercial production is a key focus, and achieving sustained profitability will be crucial for its long-term success, similar to other development-stage mining projects.

Stakeholder Impact

• Shareholders will benefit from the declared dividends and the company's improved financial performance.
• Employees may see increased job security and potential for profit sharing due to the company's success.
• Customers will have a reliable supply of silver and gold from a financially stable producer.
• Suppliers will benefit from the company's continued operations and capital investments.
• Creditors will have increased confidence in the company's ability to meet its debt obligations.

Next Steps

• Strengthen the balance sheet in 2025, targeting highest risk-adjusted return projects and increasing free cash flow generation.
• Advance Keno Hill's permitting and invest in critical infrastructure to attain sustained profitability.
• Optimize operating portfolio through continued strategic review of Casa Berardi to maximize value.
• Identify opportunities in our extensive exploration portfolio to create shareholder value.
• Implement standardized enterprise systems and advanced analytics to improve mine planning and cost management, driving sustained profitability and efficient capital allocation.

Key Dates

Keywords

Hecla Mining, Silver Production, Gold Production, Financial Results, Keno Hill, Lucky Friday, Greens Creek, Casa Berardi, Adjusted EBITDA, Mining, Dividends