• Revenue: Record revenues achieved in the second quarter.

• Silver Production: Second highest silver production in Hecla's 133-year history.

• Free Cash Flow: $28.3 million for the quarter, driven by $61 million from operations and $18 million in insurance proceeds.

• Net Debt Reduction: Reduced by $25 million in the second quarter.

• Net Leverage Ratio: Improved to 2.3 times, with a target of less than 2 times by year-end.

• Adjusted EBITDA: Increased by 25% over the first quarter.

• Greens Creek Free Cash Flow: $34 million in the second quarter, $72 million in the first half of the year.

• Lucky Friday Free Cash Flow: $33.7 million in the second quarter, including $17.8 million in insurance proceeds.

• Casa Berardi Gold Production: 23,000 ounces in the second quarter.

• Keno Hill Silver Production: 0.9 million ounces in the second quarter, surpassing 400 tons per day throughput.

• Dividend: Increased by a penny per share due to higher realized silver prices.

• Warning! GuruFocus has detected 8 Warning Signs with HL.

Release Date: August 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Hecla Mining Co (NYSE:HL) reported record revenues and the second highest silver production in its 133-year history.

• The company generated strong free cash flow, particularly from its Greens Creek and Lucky Friday mines.

• Hecla Mining Co (NYSE:HL) is committed to deleveraging its balance sheet, having reduced net debt by $25 million in the second quarter.

• The company is investing in its operations, particularly at Keno Hill, which has shown remarkable success and potential for long-term value.

• Hecla Mining Co (NYSE:HL) has a unique silver-linked dividend policy, which provides additional exposure and leverage to silver prices.

Negative Points

• Higher labor and contractor costs have impacted the cost structure, particularly at the Lucky Friday mine.

• Keno Hill has not yet declared commercial production despite strong production, indicating ongoing challenges.

• The company is facing increased capital expenditures, particularly at Keno Hill, due to necessary infrastructure and safety improvements.

• There is uncertainty regarding the timeline for appointing a new CEO, which could impact strategic direction.

• Hecla Mining Co (NYSE:HL) is experiencing inflationary pressures in mining supplies and contractor costs, affecting overall cost management.

Q & A Highlights

Q: What's your appetite for further paydown beyond the targets that you outlined, specifically regarding net leverage? A: Russell Lawlar, CFO, stated that the first priority is to invest in operations and exploration programs. Any additional free cash flow will be allocated to reducing the revolver. Once the revolver is paid down, the focus will shift to building cash reserves, potentially between $100 million and $200 million, before considering further capital allocation.