Hecla Mining Reports Strong Q3 Earnings and Future Prospects

Financial Overview

Hecla Mining Company closed the third quarter with a solid cash position of $692 million, a significant rise from $483 million in June. The company continues to operate without long-term debt, apart from finance leases, and has secured a new $500 million revolving credit facility, of which only $3.4 million has been drawn for letters of credit. Additionally, Hecla holds a $100 million accordion option for further financial flexibility.

Silver Production Insights

During the quarter, Hecla sold silver at an average price of $63.62 per ounce while achieving an all-in sustaining cost of $14.34 per ounce. It's noteworthy that these numbers do not include the Keno Hill operations, which are currently in a pre-commercial production phase.

Hecla's total silver production reached 4.2 million ounces, with significant contributions from various mines: over 1.9 million ounces from Greens Creek, nearly 1.3 million ounces from Lucky Friday, and a record 963,000 ounces from Keno Hill. Chief Operating Officer Carlos Aguiar attributed Keno Hill's record output to higher silver grades and increased milling rates. However, due to existing permit limitations on waste rock and water, the company anticipates a decrease in throughput to roughly 300 tons per day by the fourth quarter, continuing into early 2027.

Future Operations and Projects

Hecla's strategy includes maintaining operations at Keno Hill while securing necessary permits and infrastructure for future productivity. In the event of delays or significant drops in silver prices, Hecla may consider temporarily shutting down the operation. The company is currently working on obtaining relevant permits, expected around mid-2029, and does not foresee Keno Hill achieving commercial production until later this decade or early next decade.

Looking to enhance operations, Hecla is pushing forward with plans for a new pyrite concentrate circuit at Greens Creek. Preliminary estimates suggest this could yield an additional 1 million to 1.2 million ounces of silver along with 10,000 to 15,000 ounces of gold annually once operational. Temporary production could start as early as late 2027, depending on permit approvals.

In addition, Hecla is exploring various options to utilize the existing tailings at Greens Creek, including processing through third parties, direct sales, or on-site processing. A trial shipment of approximately 5,500 dry metric tons is planned for the fourth quarter, although commercial shipments remain uncertain.

Capital Strategy and Production Guidance

Hecla has adjusted its 2026 silver production guidance upward, reflecting improved cash cost projections and a reduction in planned capital investments. The firm credits higher-than-anticipated byproduct credits from gold and zinc, coupled with a decrease in capital sustaining costs, for these favorable adjustments.

Management maintains a goal to exceed 20 million ounces of silver production annually in the medium term. However, growth will depend on ongoing exploration and permitting endeavors. Despite the anticipated slowdown at Keno Hill, this long-term target remains unchanged.

On the topic of shareholder returns, discussions are underway for potential strategies, including share buybacks and dividends, which may be assessed in the first half of 2027. However, a silver-linked dividend is currently considered unlikely.

About Hecla Mining Company

Established in 1891 and based in Coeur d'Alene, Idaho, Hecla Mining Company (NYSE: HL) is recognized as one of the oldest precious and base metals mining firms on the New York Stock Exchange. It specializes in the exploration, development, and production of silver, gold, lead, and zinc through several operations, including the Greens Creek mine in Alaska and the Lucky Friday mine in Idaho. Hecla remains committed to delivering quality metals to various industries while continuing to explore new mineral resources across North America.