Hecla Reports Second Quarter 2025 Results
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Record free cash flow, record revenues and Adjusted EBITDA, Keno Hill delivers first positive free cash flow quarter, and Lucky Friday sets new milling record
Hecla Mining Company (NYSE:HL) ("Hecla", "we", "our" or the "Company") today announced second quarter 2025 financial and operating results. "Prior quarter" refers to the first quarter of 2025.
SECOND QUARTER HIGHLIGHTS
Financial Performance and Capital Execution:
Record quarterly revenue: $304.0 million, representing a 16% increase over prior quarter. Strong Profitability: Reported net income applicable to common stockholders of $57.6 million, or $0.09 per share, $99.7 million during the last 12 months. Record Adjusted EBITDA: $132.5 million during the quarter, $398.7 million during the last 12 months. Improved Leverage: Net leverage ratio* decreased to 0.7x from 1.5x in prior quarter. 5 Post quarter update: The Company announced the issuance of a notice of partial redemption of $212 million of its outstanding $475 million 7.25% Senior Notes due 2028 (the "Notes") funded through At-the-Market ("ATM") proceeds and repayment at maturity of CAD $50M Investissement Quebec Notes ("IQ Notes") funded from free cash flow.
Operational Performance:
Improved Cash Generation: Cash generated by operations of $161.8 million, and record quarterly free cash flow of $103.8 million, with all producing assets contributing. Increased Production volumes: 4.5 million ounces of silver and 45,895 ounces of gold, an increase of 10% and 34%, respectively, compared to prior quarter. Silver Production costs: Total cost of sales of $127.1 million, with cash cost per ounce of ($5.46) and AISC per ounce of $5.19 (both after by-product credits). 3,4 Gold Production costs: Total cost of sales of $50.8 million, with cash cost per ounce of $1,578 and AISC per gold ounce of $1,669, each after by-product credits. 3,4 Greens Creek Gold Performance: Robust gold production attributable to grade exceeding plan driving positive guidance revision for gold production, and cash cost and AISC per ounce. 3,4 Casa Berardi Improvement: Unit costs dropped by over $600 per ounce over the prior quarter as higher production drove unit costs lower and capital spending decreased. Lucky Friday Milestone: Established a new quarterly milling record of 114,475 tons, beating the prior record by 5% set in the prior quarter. Strong Cost Performance at Greens Creek and Lucky Friday.
*Net leverage ratio is calculated as current debt, long-term debt and finance leases less cash divided by trailing twelve-month adjusted EBITDA.
STRATEGIC PRIORITIES FOR 2025
Strengthen the balance sheet - achieving through asset sales, positive free cash flow generation, debt reduction initiatives. Target highest risk-adjusted return projects and work to increase free cash flow generation. Advance Keno Hill's permitting and investing in critical infrastructure to attain sustained profitability. Continue strategic review of non-core assets , with sale of Kinskuch property and liquidation of non-core equity holdings, realizing a $3.2 million gain, as well as progress towards completing the strategic review process on Casa Berardi. Implement standardized enterprise systems and advanced analytics to improve mine planning and cost management, driving sustained profitability and efficient capital allocation.
Rob Krcmarov, President and Chief Executive Officer, said: "Our second quarter results demonstrate exceptional execution across all facets of the business. We generated record sales of $304 million, record free cash flow of $103.8 million, and record Adjusted EBITDA of $132.5 million, while dramatically improving our net leverage to 0.7x. Our mines delivered outstanding operational performance, with silver production up 10% and gold production up 34% quarter-over-quarter, and Lucky Friday achieving a new milling record. By putting $212 million raised through our ATM program toward Note redemption and fully repaying our CAD $50 million IQ notes from free cash flow, we've strengthened our balance sheet, which will free up $17.8 million annually in interest expense going forward, allowing us to refocus those funds towards strengthening our balance sheet while enabling strategic reinvestment into the highest return opportunities across our portfolio. These results reflect our commitment to operational excellence, disciplined capital allocation, and creating long-term shareholder value. With Casa Berardi's strategic review progressing and our portfolio optimization continuing, we're well-positioned to achieve our 2025 guidance and beyond."
FINANCIAL AND OPERATIONAL OVERVIEW
In the following table and throughout this release, "total cost of sales" is comprised of cost of sales and other direct production costs and depreciation, depletion and amortization; "prior quarter" refers to the first quarter of 2025.
| In Thousands unless stated otherwise | | 2Q-2025 | | | 1Q-2025 | | | 4Q-2024 | | | 3Q-2024 | | | 2Q-2024 | | | YTD-2025 | | | YTD-2024 | | | | | | | | | | Financial Highlights | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Sales | | $ | 304,027 | | | $ | 261,339 | | | $ | 249,655 | | | $ | 245,085 | | | $ | 245,657 | | | $ | 565,366 | | | $ | 435,185 | | | Total cost of sales | | $ | 184,503 | | | $ | 187,335 | | | $ | 181,321 | | | $ | 185,799 | | | $ | 194,227 | | | $ | 371,838 | | | $ | 364,595 | | | Gross profit | | $ | 119,524 | | | $ | 74,004 | | | $ | 68,334 | | | $ | 59,286 | | | $ | 51,430 | | | $ | 193,528 | | | $ | 70,590 | | | Net income applicable to common stockholders | | $ | 57,567 | | | $ | 28,734 | | | $ | 11,786 | | | $ | 1,623 | | | $ | 27,732 | | | $ | 86,301 | | | $ | 21,841 | | | Basic income per common share (in dollars) | | $ | 0.09 | | | $ | 0.05 | | | $ | 0.02 | | | $ | 0.00 | | | $ | 0.04 | | | $ | 0.14 | | | $ | 0.04 | | | Adjusted EBITDA 5 | | $ | 132,463 | | | $ | 90,788 | | | $ | 86,558 | | | $ | 88,859 | | | $ | 90,895 | | | $ | 223,251 | | | $ | 163,594 | | | Total Debt | | $ | 564,722 | | | | | | | | | | | | | | | | | | $ | 590,451 | | | | | | | | Net Debt to Adjusted EBITDA 5 | | | 0.7 | | | | | | | | | | | | | | | | | | | 2.3 | | | | | | | | Cash provided by operating activities | | $ | 161,796 | | | $ | 35,738 | | | $ | 67,470 | | | $ | 55,009 | | | $ | 78,718 | | | $ | 197,534 | | | $ | 95,798 | | | Capital Investment | | $ | (58,043 | ) | | $ | (54,095 | ) | | $ | (60,784 | ) | | $ | (55,699 | ) | | $ | (50,420 | ) | | $ | (112,138 | ) | | $ | (98,009 | ) | | Free Cash Flow 2 | | $ | 103,753 | | | $ | (18,357 | ) | | $ | 6,686 | | | $ | (690 | ) | | $ | 28,298 | | | $ | 85,396 | | | $ | (2,211 | ) | | Production Summary | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Silver ounces produced | | | 4,520,510 | | | | 4,112,394 | | | | 3,874,344 | | | | 3,645,004 | | | | 4,458,484 | | | | 8,632,904 | | | | 8,650,582 | | | Silver payable ounces sold | | | 3,522,975 | | | | 3,517,970 | | | | 3,488,207 | | | | 3,729,782 | | | | 3,785,285 | | | | 7,040,945 | | | | 7,267,169 | | | Gold ounces produced | | | 45,895 | | | | 34,232 | | | | 35,727 | | | | 32,280 | | | | 37,324 | | | | 80,127 | | | | 73,916 | | | Gold payable ounces sold | | | 37,333 | | | | 29,655 | | | | 33,563 | | | | 31,414 | | | | 35,276 | | | | 66,988 | | | | 67,465 | | | Cash Costs and AISC, each after by-product credits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Silver cash costs per ounce 3 | | $ | (5.46 | ) | | $ | 1.29 | | | $ | (0.27 | ) | | $ | 4.46 | | | $ | 2.08 | | | $ | (2.29 | ) | | $ | 3.38 | | | Silver AISC per ounce 4 | | $ | 5.19 | | | $ | 11.91 | | | $ | 11.51 | | | $ | 15.29 | | | $ | 12.54 | | | $ | 8.35 | | | $ | 12.81 | | | Gold cash costs per ounce 3 | | $ | 1,578 | | | $ | 2,195 | | | $ | 1,936 | | | $ | 1,754 | | | $ | 1,701 | | | $ | 1,837 | | | $ | 1,685 | | | Gold AISC per ounce 4 | | $ | 1,669 | | | $ | 2,303 | | | $ | 2,203 | | | $ | 2,059 | | | $ | 1,825 | | | $ | 1,935 | | | $ | 1,861 | | | Realized Prices | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Silver, $/ounce | | $ | 34.82 | | | $ | 33.59 | | | $ | 30.19 | | | $ | 29.43 | | | $ | 29.77 | | | $ | 34.20 | | | $ | 27.37 | | | Gold, $/ounce | | $ | 3,314 | | | $ | 2,940 | | | $ | 2,656 | | | $ | 2,522 | | | $ | 2,338 | | | $ | 3,148 | | | $ | 2,222 | | | Lead, $/pound | | $ | 0.92 | | | $ | 0.92 | | | $ | 0.94 | | | $ | 0.93 | | | $ | 1.06 | | | $ | 0.92 | | | $ | 1.02 | | | Zinc, $/pound | | $ | 1.31 | | | $ | 1.29 | | | $ | 1.53 | | | $ | 1.36 | | | $ | 1.51 | | | $ | 1.31 | | | $ | 1.30 | |
Sales increased to $304 million, or 16% over the prior quarter, reflecting higher realized prices for all metals sold except lead, and higher precious metals sales volumes, which were partially offset by lower lead and zinc sales volumes. Silver sales were flat quarter over quarter despite an increase of 10% in silver production due mostly to concentrate inventory build at Greens Creek. Gold sales increased primarily due to a strong operational quarter at Casa Berardi. Gold sales at Greens Creek were relatively flat quarter over quarter, despite higher gold production in the second quarter, also due to the inventory build.
Gross profit was $119.5 million, an increase of 62% over the prior quarter. The increase is attributable to (i) Greens Creek gross profit increasing by $14.6 million due to higher realized prices for precious metals and zinc, partially offset by lower sales volumes of all metals except gold, (ii) Lucky Friday gross profit increased by $2.8 million due primarily to higher realized silver and zinc prices and lower costs of sales, and (iii) Keno Hill gross profit of $0.2 million (second profitable quarter under Hecla's ownership), reflecting the benefit of higher realized silver prices on 40% higher sales volumes over the prior quarter, largely offset by higher costs of sales. At Casa Berardi, the gross profit increased by $28.9 million reflecting the benefit of higher realized gold prices and sales volumes and lower production costs.
Net income applicable to common stockholders was $57.6 million compared to $28.7 million in the prior quarter. The improvement was primarily related to:
More than a 16% increase in sales due primarily to higher precious metal prices in the quarter. Positive fair value adjustments, net of $9.6 million due to an increase in the fair value of our marketable securities portfolio and hedges not designated for hedge accounting. A gain on sale of property, plant and equipment of $2.2 million, primarily arising on the sale of the Kinskuch property.
Partly offset by:
An increase in income and mining tax provision of $16.4 million, reflecting an increase in taxes, including Alaska Mining License Tax and Quebec Mining Duties as well as the inability to recognize the tax benefit of the loss from our Keno Hill operations. An increase in exploration and pre-development expense of $4.3 million reflecting increased exploration activity across our portfolio as activity increased heading into the warmer months of the year. An increase in foreign exchange loss of $3.2 million, reflecting the impact of the U.S. dollar depreciation compared to the Canadian dollar.
Consolidated silver total cost of sales was $127.1 million, a decrease of $2.5 million or 1.9% from the prior quarter, primarily due to lower cost of sales at Green Creek and Lucky Friday of $10.7 million and $1.8 million respectively, partially offset by higher cost of sales at Keno Hill of $10.0 million reflecting a combination of higher sales volumes and higher mining, contractor, maintenance and consumables usage.
Silver Cash costs and AISC per silver ounce, each after by-product credits , were ($5.46) and $5.19, respectively, lower versus the prior quarter, primarily due to lower treatment charges, higher by-product credits (due to higher gold production and realized gold prices) and higher silver production. AISC was also positively impacted by lower sustaining capital due to timing delays of certain projects to the second half of 2025. 3,4
Gold total cost of sales for Casa Berardi decreased by $0.1 million as higher sales volumes were offset by lower production costs.
Gold Cash costs and AISC per gold ounce, each after by-product credits , were $1,578 and $1,669 respectively, a decrease over the prior quarter as lower production costs and sustaining capital spend further benefited from higher gold production. 3,4 Casa Berardi costs are anticipated to continue to improve in the fourth quarter of 2025 as the strip ratio of the 160 pit is expected to decline and the reliance on a third party contractor is reduced.
Adjusted EBITDA was $132.5 million, a 46% increase over the prior quarter. The ratio of net debt to adjusted EBITDA (net leverage ratio) improved to 0.7x from 1.5x in the prior quarter due to strong EBITDA generation during the last 12 months, and a $276.8 million decrease in net debt. 1 Cash and cash equivalents at June 30, 2025, were $296.6 million and included $39 million drawn on the revolving credit facility. Subsequent to quarter end, a further approximately $42 million was raised through the ATM facility and CAD $50 million IQ Notes were repaid from free cash flows.
Cash provided by operating activities was $161.8 million, an increase of $126.1 million over the prior quarter, primarily attributable to favorable working capital changes of $42.3 million (the prior quarter was $48.2 million unfavorable), including a decrease of accounts receivable reflecting significant collections at Greens Creek and Keno Hill, and the timing of accounts payable vendor payments.
Capital investment was $58.0 million, compared to $54.1 million in the prior quarter, with capital investment at Keno Hill of $17.0 million, Lucky Friday of $15.9 million and Casa Berardi of $15.4 million. Capital investment is expected to increase in the third quarter, due to the warmer weather and ramping up construction activities.
Free cash flow was $103.8 million, a new quarterly record, compared to negative $18.4 million in the prior quarter, with the increase primarily due to higher cash flow from operations, reflecting increased income generation and positive working capital adjustments. 2
ATM capital raise
During and post quarter end, the Company utilized its ATM facility to raise capital for a partial redemption of $212 million of the outstanding $475 million 7.25% Senior Notes which is expected to close in mid-to-late August 2025. This approach minimizes shareholder dilution compared to alternative financing methods such as traditional equity offerings.
The Company expects to invest the bulk of the anticipated interest savings generated from this potential near-term debt reduction into strengthening its balance sheet and surfacing value initiatives, including investment in operations, expanded exploration programs, and advancing its project pipeline. These investments are designed to unlock additional value from our asset base and support long-term growth.
The Company's mining operations are demonstrating their ability to produce strong free cash flow at today's robust metal prices. If metal prices continue at these levels, the Company expects future free cash flow generation to be sufficient to meet debt service requirements and support investment in continued value-enhancing activities. In addition, the Company may also look to use proceeds from potential future asset sales to further reduce the amount of outstanding debt. This balanced approach allows us to optimize our capital structure while maintaining operational flexibility and pursue growth opportunities.
This financing strategy reflects our commitment to prudent capital management while positioning the Company to accelerate value creation through both operational excellence and strategic development initiatives.
Financial Instruments for Base and Precious Metals and Foreign Currency
The Company uses financially settled forward sales contracts to manage exposure to zinc and lead price changes in forecasted concentrate shipments. On June 30, 2025, the Company had contracts covering approximately 12% and 24% of the forecasted payable zinc and lead production for 2025 - 2026 at an average price of $1.37 and $1.02 per pound, respectively.
In the second quarter of 2025, the Company also established price protection through the use of zero-cost collars for the Keno Hill mine's forecasted silver production. The Company’s hedging strategy at Keno Hill is focused on risk management during the period of heavy investment and ramp-up of operations to the nameplate capacity of 440 tons per day. Financial instruments covering a total of 1.67 million ounces of silver production over the next three quarters have been entered into to secure a price floor. As of June 30, 2025, these silver financial instruments were in a net liability position of $0.5 million. For accounting purposes, they are not designated as hedges.
The Company also manages Canadian dollar ("CAD") exposure through forward contracts. At June 30, 2025, the Company had hedged approximately 29% of forecasted Casa Berardi and Keno Hill CAD denominated direct production costs through 2026 at an average CAD/USD rate of 1.35. The Company has also hedged approximately 18% of Casa Berardi and Keno Hill CAD denominated total capital expenditures through 2026 at 1.39.
Please refer to the discussion of derivative instruments in the Company's Form 10-Q expected to be filed with the SEC on August 6, 2025
OPERATIONS OVERVIEW
Greens Creek Mine - Alaska
| Dollars are in thousands except cost per ton | | 2Q-2025 | | | 1Q-2025 | | | 4Q-2024 | | | 3Q-2024 | | | 2Q-2024 | | | YTD-2025 | | | YTD-2024 | | | | | | | | | | GREENS CREEK | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Operating Highlights | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Tons of ore processed | | | 230,221 | | | | 212,899 | | | | 224,521 | | | | 212,863 | | | | 225,746 | | | | 443,120 | | | | 457,934 | | | Total production cost per ton | | $ | 225.71 | | | $ | 240.00 | | | $ | 211.64 | | | $ | 222.39 | | | $ | 218.09 | | | $ | 232.57 | | | $ | 215.46 | | | Ore grade milled - Silver (oz./ton) | | | 13.40 | | | | 11.75 | | | | 10.72 | | | | 11.22 | | | | 12.60 | | | | 12.61 | | | | 13.00 | | | Ore grade milled - Gold (oz./ton) | | | 0.10 | | | | 0.09 | | | | 0.09 | | | | 0.08 | | | | 0.09 | | | | 0.10 | | | | 0.09 | | | Ore grade milled - Lead (%) | | | 2.62 | | | | 2.58 | | | | 2.61 | | | | 2.44 | | | | 2.50 | | | | 2.60 | | | | 2.50 | | | Ore grade milled - Zinc (%) | | | 6.87 | | | | 6.77 | | | | 6.59 | | | | 6.60 | | | | 6.20 | | | | 6.82 | | | | 6.20 | | | Ore grade milled - Copper (%) | | | 0.28 | | | | 0.25 | | | | 0.25 | | | | 0.31 | | | | 0.27 | | | | 0.27 | | | | 0.30 | | | Silver produced (oz.) | | | 2,422,978 | | | | 2,002,560 | | | | 1,901,418 | | | | 1,857,314 | | | | 2,243,551 | | | | 4,425,538 | | | | 4,722,145 | | | Gold produced (oz.) | | | 17,750 | | | | 13,759 | | | | 14,804 | | | | 11,746 | | | | 14,137 | | | | 31,509 | | | | 28,725 | | | Lead produced (tons) | | | 4,931 | | | | 4,496 | | | | 4,808 | | | | 4,165 | | | | 4,513 | | | | 9,427 | | | | 9,347 | | | Zinc produced (tons) | | | 14,024 | | | | 12,835 | | | | 13,241 | | | | 12,585 | | | | 12,400 | | | | 26,859 | | | | 25,462 | | | Copper produced (tons) | | | 499 | | | | 411 | | | | 427 | | | | 490 | | | | 462 | | | | 910 | | | | 957 | | | Silver concentrate produced (tons) | | | 17,985 | | | | 15,541 | | | | 15,775 | | | | 14,706 | | | | 15,196 | | | | 33,526 | | | | 30,771 | | | Zinc concentrate produced (tons) | | | 20,936 | | | | 18,228 | | | | 19,251 | | | | 18,954 | | | | 17,876 | | | | 39,164 | | | | 37,543 | | | Bulk concentrate produced (tons) | | | 8,316 | | | | 7,515 | | | | 8,537 | | | | 5,869 | | | | 7,754 | | | | 15,831 | | | | 15,679 | | | Silver concentrate sold (tons) | | | 13,789 | | | | 15,496 | | | | 16,061 | | | | 17,692 | | | | 12,025 | | | | 29,285 | | | | 27,698 | | | Zinc concentrate sold (tons) | | | 17,987 | | | | 18,384 | | | | 19,464 | | | | 21,957 | | | | 14,807 | | | | 36,371 | | | | 34,370 | | | Bulk concentrate sold (tons) | | | 8,061 | | | | 8,330 | | | | 10,975 | | | | 5,775 | | | | 7,859 | | | | 16,391 | | | | 17,659 | | | Financial Highlights | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Sales | | $ | 122,002 | | | $ | 118,143 | | | $ | 112,037 | | | $ | 116,568 | | | $ | 95,659 | | | $ | 240,145 | | | $ | 192,969 | | | Total cost of sales | | $ | (58,921 | ) | | $ | (69,638 | ) | | $ | (67,887 | ) | | $ | (73,597 | ) | | $ | (56,786 | ) | | $ | (128,559 | ) | | $ | (126,643 | ) | | Gross profit | | $ | 63,081 | | | $ | 48,505 | | | $ | 44,150 | | | $ | 42,971 | | | $ | 38,873 | | | $ | 111,586 | | | $ | 66,326 | | | Cash flow from operations | | $ | 75,371 | | | $ | 43,858 | | | $ | 60,442 | | | $ | 54,076 | | | $ | 43,276 | | | $ | 119,229 | | | $ | 71,982 | | | Exploration | | $ | 2,049 | | | $ | 343 | | | $ | 1,129 | | | $ | 4,325 | | | $ | 2,011 | | | $ | 2,393 | | | $ | 2,562 | | | Capital additions | | $ | (8,397 | ) | | $ | (10,759 | ) | | $ | (15,798 | ) | | $ | (11,466 | ) | | $ | (11,704 | ) | | $ | (19,156 | ) | | $ | (20,531 | ) | | Free cash flow 2 | | $ | 69,023 | | | $ | 33,442 | | | $ | 45,773 | | | $ | 46,935 | | | $ | 33,583 | | | $ | 102,466 | | | $ | 54,013 | | | Cash Costs and AISC, each after by-product credits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cash cost per ounce, after by-product credits 3 | | $ | (11.91 | ) | | $ | (4.08 | ) | | $ | (5.86 | ) | | $ | 0.93 | | | $ | 0.19 | | | $ | (8.37 | ) | | $ | 1.90 | | | AISC per ounce, after by-product credits 4 | | $ | (8.19 | ) | | $ | (0.03 | ) | | $ | 2.62 | | | $ | 7.04 | | | $ | 5.40 | | | $ | (4.50 | ) | | $ | 6.33 | |