Hecla Mining (NYSE: HL) sells Casa Berardi mine, boosts silver focus
Rhea-AI Filing Summary
Hecla Mining Company (HL) is updating prior-period financial information after selling its wholly owned subsidiary Hecla Quebec Inc., owner of the Casa Berardi mine, to Orezone Gold Corporation. The transaction closed March 25, 2026 for total undiscounted consideration of up to $602.2 million, with a fair value of $385.7 million, and is described as a strategic shift with a major effect on operations and results.
Casa Berardi is now treated as a discontinued operation and is no longer a reportable segment. Hecla has recast its 2025 Form 10-K and Q1 2026 Form 10-Q to remove Casa Berardi from continuing operations and to conform income statement presentation, including eliminating “Total Cost of Sales” and “Gross Profit” lines and renaming “ramp-up and suspension costs” as “care and maintenance” costs. The company states cash proceeds were used for debt reduction and balance sheet strengthening, and that the divestiture increases revenue exposure to silver and concentrates capital on silver-focused assets in jurisdictions it views as favorable.
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Filing Explained
Hecla completed the sale, but up to 602.2 million dollars of stated consideration includes shares and conditional or deferred payments, not cash received.
On
The headline consideration is up to
The filing updates selected portions of the 2025 Form 10-K and first-quarter 2026 Form 10-Q, while stating that it is not an amendment or restatement; the recast material can be incorporated into future registration statements.
8-K Event Classification
Key Figures
Key Terms
discontinued operation financial
Net Smelter Return financial
Total Recordable Injury Frequency Rate technical
asset retirement obligation financial
Inferred Resources technical
FAQ
What major transaction did HECLA MINING CO (HL) complete involving Casa Berardi?
How is Casa Berardi reported in Hecla Mining (HL) financial statements after the sale?
What changes did HL make to its income statement presentation?
How did Hecla Mining (HL) use cash proceeds from the Casa Berardi sale?
What were Hecla Mining (HL) silver production and sales volumes in 2025?
What financial assurances and reclamation costs does Hecla Mining (HL) report?
How many employees did Hecla Mining (HL) have at year-end 2025?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
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. ☐
ITEM 8.01 OTHER EVENTS
Hecla Mining Company (the "Company," "Hecla," "we," or "our") is filing this Current Report on Form 8-K to recast certain financial information and related disclosures included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Form 10-K"), originally filed on February 17, 2026, and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, originally filed on May 5, 2026 (the "Q1 2026 Form 10-Q").
Discontinued Operations — Casa Berardi
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 in Quebec, Canada, to Orezone Gold Corporation for total undiscounted consideration of up to $602.2 million. The transaction represents a strategic shift that has a major effect on our operations and financial results. Beginning with the Q1 2026 Form 10-Q, Casa Berardi is no longer a reportable segment and its financial results are reflected as a discontinued operation for all periods presented. We recast the 2025 Form 10-K to reflect Casa Berardi as a discontinued operation, with its results excluded from continuing operations and segment results in the recast financial information and related disclosures.
Income Statement Presentation Changes
In connection with the recast described above, and to conform to the presentation adopted beginning with our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 (the "Q2 2026 Form 10-Q"), filed August 4, 2026, we are also recasting the Income Statements in our 2025 Form 10-K and Q1 2026 Form 10-Q to remove the "Total Cost of Sales" and "Gross Profit" line items, which are not required disclosures under GAAP or SEC disclosure rules. We have also renamed the former line item "ramp-up and suspension costs" as "care and maintenance" costs to more accurately describe the nature of those expenses. We have also reclassified amounts in 2023 and 2024 in the Consolidated Statements of Operations and Comprehensive Income (Loss) and Note 5. Business Segments, Sales of Products and Significant Customers to conform with the 2025 presentation.
Exhibit 99.1 filed with this Form 8-K includes the following recast portions of our 2025 Form 10-K for all periods presented to reflect the presentation of Casa Berardi as a discontinued operation and, where applicable, changes to reportable segments, as well as changes to our Income Statement presentation:
Part I. Item 1. Business
Part I. Item 2. Properties
Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Part II. Item 8. Financial Statements and Supplementary Data
Exhibit 99.2 filed with this Form 8-K includes the following recast portions of our Q1 2026 Form 10-Q for all periods presented to reflect the changes to our Income Statement presentation (Items below are under Part I of the Q1 2026 Form 10-Q):
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Except as specifically set forth herein to disclose information related to the disposal of Hecla Quebec described above, to reflect the historical results of our Casa Berardi business as a discontinued operation and to conform our Income Statement presentation to our current presentation, no revisions have been made to our 2025 Form 10-K or Q1 2026 Form 10-Q to update for other information, developments or events that have occurred since such filings. This Form 8-K and related exhibits should be read in conjunction with our 2025 Form 10-K and Q1 2026 Form 10-Q and subsequent filings with the SEC, including Quarterly Reports on Form 10-Q for the periods ended
June 30, 2026 and Current Reports on Form 8-K. These subsequent SEC filings contain important information regarding events, risks, developments and updates affecting the Company and our expectations that have occurred since the filing of our 2025 Form 10-K and Q1 2026 Form 10-Q. The information contained herein is not an amendment to, or a restatement of our 2025 Form 10-K or Q1 2026 Form 10-Q. Unaffected items and unaffected portions of our 2025 Form 10-K and Q1 2026 Form 10-Q have not been repeated in, and are not amended or modified by this Form 8-K or related exhibits.
By virtue of this Current Report, the Company will be able to incorporate the updated information by reference into future registration statements or post effective amendments to existing registration statements.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
The following are filed as exhibits to this report:
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Consent of Independent Registered Public Accounting Firm |
99.1 |
Update to the 2025 Form 10-K (recast to reflect a discontinued operation and conform Income Statement presentation changes) |
99.2 |
Update to the Q1 2026 Form 10-Q (recast to conform Income Statement presentation changes) |
101.INS |
XBRL Instance - the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the XBRL document** |
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Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents** |
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
By: /s/ Russell D. Lawlar
Name: Russell D. Lawlar
Senior Vice President and Chief Financial Officer
Dated: August 28, 2026
EXHIBIT 99.1
Item 1. Business
For information regarding the organization of our business segments and our significant customers, see Note 5 of Notes to Consolidated Financial Statements.
Information set forth in Items 1A and 2 below are incorporated by reference into this Item 1.
Introduction
Hecla Mining Company and its subsidiaries have provided precious and base metals to the U.S. and the world since 1891 (in this report, “we” or “our” or “us” refers to Hecla Mining Company and our affiliates and subsidiaries, unless the context requires otherwise). 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) unrefined doré containing silver and gold. In doing so, we intend to manage our business activities in a safe, environmentally responsible and cost-effective manner.
The silver, zinc, precious metals concentrates, we produce are sold to custom smelters, metal traders, and third-party processors, and the unrefined doré we produce is sold to refiners or further refined before sale of the metals to traders. We are organized and managed in three segments that encompass our operating mines and significant assets being Greens Creek, Lucky Friday, and Keno Hill.
Our current business strategy is to focus our financial and human resources in the following areas:
On March 25, 2026, we completed the sale of our Hecla Quebec Inc. ("Hecla Quebec") subsidiary which owned the Casa Berardi mine to Orezone Gold Corporation ("Orezone") for total consideration with a fair value of $385.7 million ($602.2 million on an undiscounted basis) comprised of the following:
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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. Our current estimate of that excess of $11.5 million 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 increased 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, the Casa Berardi operation is no longer a reportable segment and its financial results are reflected in the Company’s audited consolidated financial statements as a discontinued operation for all periods presented. Unless otherwise specified, the discussion of financial results within Item 7. Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations ("MD&A"), as well as the Consolidated Financial Statements and Notes 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.
Metals Prices
Our operating results are substantially dependent upon the prices of silver, gold, lead, and zinc, which can fluctuate widely. The volatility of such prices is illustrated in the following table, which sets forth our average realized prices and the high, low, and average daily closing market prices for silver, gold, lead, zinc, and copper over the last three years. The sources for the market prices are the London Market Fixing prices from the London Bullion Market Association for silver and gold and the Cash Official prices from the London Metals Exchange for lead, zinc, and copper.
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2025 |
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2024 |
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2023 |
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Silver (per oz.): |
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Realized average |
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$ |
45.25 |
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$ |
28.58 |
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$ |
23.33 |
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Market average |
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$ |
39.94 |
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$ |
28.24 |
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$ |
23.39 |
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Market high |
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$ |
74.84 |
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$ |
34.51 |
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$ |
26.03 |
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Market low |
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$ |
29.41 |
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$ |
22.09 |
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$ |
20.09 |
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Gold (per oz.): |
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Realized average |
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$ |
3,541 |
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$ |
2,417 |
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$ |
1,936 |
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Market average |
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$ |
3,435 |
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$ |
2,387 |
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$ |
1,943 |
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Market high |
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$ |
4,449 |
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$ |
2,778 |
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$ |
2,049 |
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Market low |
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$ |
2,633 |
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$ |
1,985 |
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$ |
1,811 |
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Lead (per lb.): |
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Realized average |
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$ |
0.94 |
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$ |
0.97 |
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$ |
1.03 |
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Market average |
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$ |
0.89 |
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$ |
0.94 |
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$ |
0.97 |
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Market high |
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$ |
0.94 |
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$ |
1.04 |
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$ |
1.06 |
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Market low |
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$ |
0.83 |
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$ |
0.86 |
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$ |
0.90 |
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Zinc (per lb.): |
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Realized average |
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$ |
1.39 |
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$ |
1.37 |
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$ |
1.35 |
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Market average |
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$ |
1.30 |
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$ |
1.26 |
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$ |
1.20 |
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Market high |
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$ |
1.52 |
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$ |
1.47 |
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$ |
1.59 |
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Market low |
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$ |
1.14 |
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$ |
1.04 |
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$ |
1.01 |
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Copper (per lb.): |
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Realized average |
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$ |
4.75 |
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$ |
4.20 |
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NA |
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Market average |
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$ |
4.51 |
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$ |
4.15 |
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NA |
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Market high |
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$ |
5.71 |
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$ |
4.90 |
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NA |
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Market low |
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$ |
3.89 |
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$ |
3.66 |
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NA |
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The prices of the metals we produce 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 for information on a number of the factors that can impact prices of the metals we produce. In both 2025 and 2024, our realized average prices for all metals we sold, except lead,
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were higher compared to 2024 and 2023, respectively. We are unable to predict fluctuations in prices for metals and have limited control over the timing of our concentrate shipments which also impacts our realized prices. However, we utilize financially-settled forward contracts and financially-settled zero cost collars ("Collars") for the metals we produce with the objective of managing the exposure to changes in prices of those metals contained in our concentrate shipments between the time of sale and final settlement. In addition, at times we utilize financially-settled forward contracts to manage the exposure to changes in prices of zinc and lead contained in our forecasted future concentrate shipments, and Collars and put options to protect gross margin for silver and gold contained in forecasted concentrate or dore shipments. See Note 11 of Notes to Consolidated Financial Statements for more information on our base and precious metal forward contract programs.
A comprehensive discussion of our financial results for the years ended December 31, 2025, 2024, and 2023, individual operation performance and other significant items can be found in Item 7. Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations, as well as the Consolidated Financial Statements and Notes thereto.
Products and Segments
Our segments are differentiated by geographic region located in North America. We produce silver, zinc, and precious metals flotation concentrates at Greens Creek and silver and zinc flotation concentrates at Lucky Friday, each of which we sell to custom smelters and metal traders. The flotation concentrates produced at Greens Creek and Lucky Friday contain payable silver, zinc, and lead, and at Greens Creek they also contain payable gold and at times copper. At Greens Creek, we also produce gravity concentrate containing payable silver, gold, and lead. Unrefined bullion (doré) is produced from the gravity concentrate by a third-party processor, and shipped to a refiner before sale of the metals to precious metal traders. Keno Hill is currently in ramp-up and producing silver and precious metal flotation concentrates, but has yet to meet our definition of commercial production. Payable metals are those included in our products which we are paid for by smelters, metal traders, and refiners. Our segments as of December 31, 2025 included:
The Casa Berardi operations located in the Abitibi region of northwestern Quebec, Canada were also considered a segment prior to January 2026. The Casa Berardi operations were 100% owned by our former subsidiary Hecla Quebec and had been in production since late 2006. Following the disposal of Hecla Quebec on March 25, 2026, the results of Casa Berardi are reported as a discontinued operation for all periods presented.
The contributions to our total metals sales by our significant operations in 2025 were 57.6% from Greens Creek, 28.8% from Lucky Friday, and 13.6% from Keno Hill.
Governmental Regulation
The following is a summary of governmental regulation compliance areas which we believe are significant to our business and may have a material effect on our consolidated financial statements, earnings and/or competitive position.
Health and Safety
We are subject to the regulations of the Mine Safety and Health Administration (“MSHA”) in the United States, the Commission of Labor Standards, Pay Equity and Occupational Health and Safety in Quebec, Workers' Safety and Compensation Board in the Yukon and the Mexico Ministry of Economy and Mining, and work with these agencies to address issues outlined in any investigations and inspections and continue to evaluate our safety practices. We strive to achieve excellent mine safety and health performance, and attempt to implement reasonable best practices with respect to mine safety and emergency preparedness. Achieving and maintaining compliance with regulations is challenging and may increase our operating costs. See Human Capital - Health and Safety below and Item 1A. Risk Factors – We face substantial governmental regulation, including in the United States the Mine Safety and Health Act, various environmental laws and regulations and the 1872 Mining Law.
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Environmental
Our operations are subject to various environmental laws and regulations at the federal and state/provincial/territorial level. Compliance with environmental regulations, and litigation based on environmental laws and regulations, involves significant costs and can threaten existing operations or constrain expansion opportunities. For example, since acquiring the Keno Hill mine in September 2022, the site has experienced permit exceedances involving the quality of water discharged into the environment. We are working to assess and improve the existing infrastructure and the environmental management system that was put in place by the previous owners. As part of this process, we have submitted plans to the Yukon Department of Energy, Mines and Resources to upgrade the water treatment plant at the Bermingham mine within our Keno Hill operations and in the interim have made other upgrades to water treatment at the site. See Note 17 of Notes to Consolidated Financial Statements.
Keno Hill is located in a region of the Yukon Territory where extensive historical mining activity occurred. The mining claims and rights that comprise our Keno Hill mine are owned by two of our indirect, wholly-owned subsidiaries, Alexco Keno Hill Mining Company and Elsa Reclamation & Development Company Ltd. (“ERDC”). ERDC and Alexco are parties to the Amended and Restated Subsidiary Agreement (“ARSA”) dated July 18, 2013, among them and Her Majesty the Queen in right of Canada (“Canada”) which addresses the pre-existing environmental condition and the environmental care and maintenance and reclamation of the historical Keno Hill site. Under the ARSA and related documents, ERDC, as a paid contractor for the Federal Government of Canada, is responsible for the development and eventual implementation of the district wide reclamation and closure plan (“Reclamation Plan”) which addresses the historic environmental liabilities of the district from past mining activities pre-dating Hecla’s (and Alexco's) acquisition of the Keno Hill project, as well as for carrying out care and maintenance at various locations within the historical Keno Hill site until the Reclamation Plan is implemented. Hecla’s predecessor, Alexco, previously deposited $10 million Canadian dollars ("CAD") in a trust which funds ERDC’s maximum contribution toward implementing the Reclamation Plan, and agreed to a 1.5% net smelter royalty capped at $4.0 million CAD, with the cap now reached as of December 31, 2025. ERDC receives agreed-to commercial contractor rates when retained by Canada to provide environmental services in the historical Keno Hill site outside the scope of care and maintenance and closure and reclamation planning under the ARSA (in the latter case, for which ERDC receives an annual fee of $900,000 CAD from Canada, adjustable for material changes in scope). The potential liabilities associated with the pre-existing environmental conditions at Keno Hill are indemnified by Canada under the terms and conditions of the ARSA, subject to the requirement for ERDC to develop, permit, and implement the Reclamation Plan, or if Hecla and Canada agree to transfer portions of the historical area to active mining operations within the Keno Hill unit, then such indemnification ceases to the extent of such transferred area. Completing the Reclamation Plan is expected to take approximately 4 more years and is currently estimated to cost approximately $294 million CAD over that time, for which we expect ERDC to be reimbursed for all material costs incurred. However, we are at risk for any variance in timing between expending funds by ERDC and reimbursement by Canada, as well as for any disputed or otherwise non-reimbursed costs (for example if ERDC were to act outside of the scope of the ARSA). In addition, ERDC is responsible for sharing with Canada (i) under certain circumstances, care and maintenance costs pending implementation of the Reclamation Plan, (ii) detailed design and engineering costs to support the Reclamation Plan and (iii) under certain circumstances, post active reclamation costs (i.e. in the event Hecla has brought a historical area with pre-existing environmental conditions into active operations at the Keno Hill unit), which, in each case and in the aggregate, we do not anticipate will have a material impact on our financial results as a whole.
Mine closure and reclamation regulations impose substantial costs on our operations and include requirements that we provide financial assurance supporting those obligations. We currently have $206.3 million of financial assurances, primarily in the form of surety bonds, for anticipated company-wide reclamation. We anticipate approximately $13.4 million in expenditures in 2026 for environmental permit compliance and idle property management. The projected remaining cost for reclamation at the site is included in our accrued reclamation and closure costs liability. See Item 1A. Risk Factors – We face substantial governmental regulation, including in the United States the Mine Safety and Health Act, various environmental laws and regulations and the 1872 Mining Law; Our operations are subject to complex, evolving and increasingly stringent environmental laws and regulations; Compliance with environmental regulations, and litigation based on such regulations, involves significant costs and can threaten existing operations or constrain expansion opportunities; Mine closure and reclamation regulations impose substantial costs on our operations and include requirements that we provide financial assurance supporting those obligations. These costs could significantly increase and we might not be able to provide financial assurance; Our environmental and asset retirement obligations may exceed the provisions we have made; and New federal and state laws, regulations and initiatives could impact our operations.
Licenses, Permits and Claims/Concessions
We are required to obtain various licenses and permits to operate our mines and conduct exploration and reclamation activities. We can only engage in exploration and mining operations in accordance with applicable permits. See Item 1A. Risk Factors – We are required to obtain governmental permits and other approvals in order to conduct mining operations and Legal challenges could prevent exploration projects from being developed or existing mines from future expansion.
In addition, our operations and exploration activities in Canada are conducted pursuant to claims granted by the host government, and are subject to claims renewal and minimum work commitment requirements, which are subject to certain political risks associated with foreign operations. See Item 1A. Risk Factors – Our foreign activities are subject to additional inherent risks, Our operations and
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properties in Canada expose us to additional political risks and Certain of our mines and exploration properties are located on land that is or may become subject competing title claims and/or claims of cultural significance.
Taxes and Royalties
We are subject to various taxes and government royalties in the jurisdictions where we operate, including those specific to mining activities. These include: federal income taxes; state/provincial income taxes; county/city and bureau property taxes and sales and use tax in the U.S.; goods and services tax in Canada; mining-specific taxes in Alaska, Idaho, Nevada, and the Yukon; and mining royalties in Alaska, Nevada and Canada. Accrual and payment of taxes and accounting for deferred taxes can involve significant estimates and assumptions and can have a material impact on our consolidated financial statements. Tax rates and the calculations of taxes can change significantly and are influenced by changes in political administrations and other factors. See Item 1A. Risk Factors – Our accounting and other estimates may be imprecise; Our ability to recognize the benefits of deferred tax assets related to net operating loss carryforwards and other items is dependent, among other things, on generating taxable income; Our foreign activities are subject to additional inherent risks; and We face substantial governmental regulation, including in the United States the Mine Safety and Health Act, various environmental laws and regulations and the 1872 Mining Law. Also, see Note 8 of Notes to Consolidated Financial Statements for more information on income and mining taxes.
Physical Assets
Our business is capital intensive and requires ongoing capital investment for the replacement, modernization and expansion of equipment and facilities and to develop new mineral reserves. At December 31, 2025, the book value of our properties, plants, equipment and mine development, net of accumulated depreciation, was approximately $2.1 billion. For more information see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. We maintain insurance policies against property loss and business interruption. However, such insurance contains exclusions and limitations on coverage, and there can be no assurance that claims would be paid under such insurance policies in connection with a particular event. When we do experience insurable losses – such as with the fire at the Lucky Friday in August and September of 2023 – it can take a long period of time before we receive any or all insurance proceeds. See Item 1A. Risk Factors – Our operations may be adversely affected by risks and hazards associated with the mining industry that may not be fully covered by insurance.
Human Capital
As of December 31, 2025, we had approximately 1,378 employees, of which approximately 1,096 were employed in the United States and 282 in Canada. The vast majority of our employees are full-time. Approximately 325 of our employees at Lucky Friday were covered by a collective bargaining agreement.
The attraction, development and retention of people is critical to delivering our business strategy. Key areas of focus for us include:
Health and Safety
The safety and health of our employees is of paramount importance. Our goal is to achieve world-class safety and health performance by promoting a deeply rooted value-based culture of safety and utilizing technology and innovation to continually improve the safety at our operations. We know that employees' and contractors' safety awareness is fundamental to making our workplace as safe as possible. Therefore, we invest in training and workforce development programs that focus on safety first. All employees and contractors receive training that complies with or exceeds the applicable safety and health regulations as set by the governing body in the jurisdiction in which each operation is located. As part of our commitment to safety, we track a variety of safety performance indicators, including injuries, near misses, observations, and equipment damages. Our goal is to reduce safety incidents. Our Total Recordable Injury Frequency Rate (“TRIFR”) is calculated as the number of recordable injuries in the period multiplied by 200,000 hours and divided by the number of hours worked in the period. Company-wide, our TRIFR was 1.69 for 2025, a 13% reduction from 2024.
Compensation and Benefits
We are among the largest private-sector employers in the communities in which we operate providing a compensation and benefits package that attracts, motivates, and retains employees. In addition to competitive base wages, and incentive compensation, we offer retirement benefits, health insurance plans and paid time off.
Retention and Employee Development
We are committed to hiring talented people, developing effective leaders, providing an inclusive workplace and retaining a large portion of the workforce for long periods of time. The mining workforce of the future, like most industries, will see a continual change
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in the jobs and skill sets required as we adopt new technologies and make our workplace safer and more efficient. We are also committed to helping employees update their skills. For example, we have long supported the Pathways to Mining Careers program, a career training partnership with the University of Alaska Southeast in Juneau. We also offer a reimbursement program to assist with educational expenses for employees who are interested in furthering their education. Advanced education can improve job performance and increase advancement opportunities for the employee, while providing flexibility to our company by increasing the employee’s knowledge base and skill set.
Typically, annual employee surveys are conducted to gauge employee concerns and morale. The results of the surveys, and any responsive measures, are shared with our Board of Directors. Strategic talent reviews and succession planning reviews are conducted periodically across all business areas, and our training programs are adapted accordingly. The Chief Executive Officer (“CEO”), senior level company leadership and the Board of Directors periodically review our top talent. Creating more opportunities for women and indigenous people are among our priorities for employee development. We also strive to maintain an inclusive workplace and provide periodic training to employees to help meet that goal. Our employees are required to abide by our Code of Conduct, which is provided to employees upon being hired and thereafter annually, and is available on our website, to promote the conduct of our business in a consistently legal and ethical manner. Among other provisions, the Code of Conduct reflects our policy and practice not to discriminate against any employee because of race, color, religion, national origin, sex, sexual orientation, gender identity or expression, age, or physical or other disability. We expect our leaders to set the example by being positive role models and good mentors for our employees.
Our head of Human Resources is responsible for developing and executing our human capital strategy. The position is an executive-level position to reflect the priority we place on utilizing our human capital resources to meet our business strategy.
Available Information
Hecla Mining Company is a Delaware corporation. Our current holding company structure dates from the incorporation of Hecla Mining Company in 2006 and the renaming of our subsidiary (previously Hecla Mining Company) as Hecla Limited. Our principal executive offices are located at 6500 N. Mineral Drive, Suite 200, Coeur d’Alene, Idaho 83815-9408. Our telephone number is (208) 769-4100. Our web site address is www.hecla.com. Information on our web site is not incorporated into this Annual Report on Form 10-K. We file our annual, quarterly and current reports and any amendments to these reports with the SEC, copies of which are available on our website or from the SEC free of charge (www.sec.gov). Our restated certificate of incorporation, bylaws, charters of our audit, compensation, and governance and social responsibility committees, as well as our Code of Ethics for the Chief Executive Officer and Senior Financial Officers and our Code of Conduct, are also available on our website. In addition, any amendments to our Code of Ethics or waivers granted to our directors and executive officers will be posted on our website. Each of these documents may be periodically revised, so you are encouraged to visit our website for any updated terms. We will provide copies of these materials to stockholders upon request using the above-listed contact information, directed to the attention of Investor Relations, or via e-mail request sent to hmc-info@hecla.com.
We routinely post important information for investors on our web site, www.hecla.com, in the “Investors” section. We also may use our web site as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investors section of our web site, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our web site is not incorporated by reference into, and is not a part of, this document.
Item 2. Properties
Note on SEC Mining Disclosure Rules
Information concerning our mining properties in this Annual Report on Form 10-K has been prepared in accordance with the requirements of subpart 1300 of SEC Regulation S-K. Subpart 1300 requires us to disclose our mineral resources, in addition to our mineral reserves, as of the end of our most recently completed fiscal year both in the aggregate and for each of our individually material mining properties.
You are cautioned that mineral resources do not have demonstrated economic value. Mineral resources are subject to further exploration and development, are subject to additional risks, and no assurance can be given that they will eventually convert to future reserves. Inferred Resources, in particular, have a great amount of uncertainty as to their existence and their economic and legal feasibility. Investors are cautioned not to assume that any part or all of the Inferred Resource exists or is economically or legally mineable. See Item 1A. Risk Factors.
6
Summary
The map below shows the locations of our operations and our exploration projects, as well as our corporate offices located in Coeur d’Alene, Idaho; Vancouver, British Columbia; Juneau, Alaska; Mullan, Idaho; and Whitehorse, Yukon.
7
The following table summarizes our aggregate metal quantities produced and sold for the last three years:
|
|
|
|
Year Ended December 31, |
|
|||||||||
|
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Silver - |
|
Ounces produced |
|
|
17,004,172 |
|
|
|
16,145,699 |
|
|
|
14,320,448 |
|
|
|
Payable ounces sold |
|
|
15,213,921 |
|
|
|
14,461,604 |
|
|
|
12,932,440 |
|
Gold - |
|
Ounces produced |
|
|
59,349 |
|
|
|
55,275 |
|
|
|
60,896 |
|
|
|
Payable ounces sold |
|
|
46,873 |
|
|
|
45,201 |
|
|
|
50,334 |
|
Lead - |
|
Tons produced |
|
|
56,130 |
|
|
|
52,515 |
|
|
|
40,347 |
|
|
|
Payable tons sold |
|
|
48,727 |
|
|
|
44,795 |
|
|
|
35,429 |
|
Zinc - |
|
Tons produced |
|
|
68,558 |
|
|
|
66,308 |
|
|
|
60,579 |
|
|
|
Payable tons sold |
|
|
47,553 |
|
|
|
47,593 |
|
|
|
43,050 |
|
Copper - |
|
Tons produced |
|
|
1,804 |
|
|
|
1,874 |
|
|
|
1,823 |
|
|
|
Payable tons sold |
|
|
337 |
|
|
|
50 |
|
|
|
— |
|
Hecla is the operator at all mines and exploration properties. Mineral processing plants and related facilities are part of the infrastructure at each operating mine.
8
A summary overview of our mining operations and exploration and pre-development projects is shown in the following table: |
||||||||||||||||||||
|
|
Location |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Property |
|
Country |
|
State/Province |
|
Ownership |
|
|
Claims |
|
Permit Conditions |
|
Stage |
|
Mine Type |
|
Commodity |
|
Mineralization Style |
|
Greens Creek |
|
United States |
|
Alaska |
|
|
100.0 |
% |
|
440 unpatented lode claims, 58 unpatented millsite claims (8,072 acres), 21 patented lode claims and one patented millsite claim (328 acres); Land Exchange Properties (7,301 acres) |
|
Private or USFS administered land, all required permits for production in place |
|
Production |
|
Underground |
|
Ag, Au, Pb, Zn |
|
Massive Sulfide |
Lucky Friday |
|
United States |
|
Idaho |
|
|
100.0 |
% |
|
43 patented lode and millsite claims (710 acres); 53 unpatented lode claims (535 acres) |
|
Private or USFS administered land, all required permits for production in place |
|
Production |
|
Underground |
|
Ag, Pb, Zn |
|
Vein |
Keno Hill |
|
Canada |
|
Yukon |
|
|
100.0 |
% |
|
703 quartz mining leases, 867 quartz mining claims, 2 Crown Grants; (238.12 km2 / 23,812 ha) |
|
All required permits for production in place or in process |
|
Development |
|
Underground |
|
Ag, Au, Pb, Zn |
|
Vein/Fault Zone |
Fire Creek |
|
United States |
|
Nevada |
|
|
100.0 |
% |
|
831 unpatented lode claims (17,175 acres); leases (409 acres); private land (3,208 acres) |
|
BLM administered land, Plan of Operations and other required State permits in place |
|
Exploration |
|
Underground |
|
Au, Ag |
|
Vein |
Hollister |
|
United States |
|
Nevada |
|
|
100.0 |
% |
|
853 unpatented lode claims, 152 leased unpatented lode claims, 11 unpatented mill site claims; 17,960 acres total |
|
BLM administered land, Plan of Operations and other required State permits in place |
|
Exploration |
|
Underground |
|
Au, Ag |
|
Vein |
Midas |
|
United States |
|
Nevada |
|
|
100.0 |
% |
|
1,456 unpatented lode claims, 33 leased unpatented lode claims, (total 27,583 acres unpatented claims); 44 patented lode claims, private land (2,417 acres) |
|
BLM administered land, Plan of Operations and other required State permits in place |
|
Exploration |
|
Underground |
|
Au, Ag |
|
Vein |
San Juan Silver |
|
United States |
|
Colorado |
|
|
100.0 |
% |
|
129 patented lode and millsite claims, fee lands, 704 unpatented lode claims; 13,645 total acres |
|
7 Notice-of-Intent areas for Exploration, Mining Plan of Operations (USFS); 112-d2 mining permit (CO DRMS) |
|
Exploration |
|
Underground |
|
Ag, Pb, Zn |
|
Vein |
Star |
|
United States |
|
Idaho |
|
|
100.0 |
% |
|
174 patented lode and millsite claims; 2,376 total acres |
|
Private land, required permits in place for exploration |
|
Exploration |
|
Underground |
|
Ag, Zn, Pb |
|
Vein |
Monte Cristo |
|
United States |
|
Nevada |
|
|
100.0 |
% |
|
334 unpatented lode claims, 10 leased unpatented lode claims (6,880 acres) |
|
BLM administered land, Notice of Intent required |
|
Exploration |
|
Underground/Open Pit |
|
Au, Ag |
|
Vein |
Rock Creek |
|
United States |
|
Montana |
|
|
100.0 |
% |
|
99 patented lode claims (1,859 acres), 370 unpatented lode claims (6,829 acres), 115 unpatented millsite claims, 5 unpatented tunnel sites; other private land: 754 acres |
|
Private or USFS administered land. Some State permits in-place; no Federal permits. |
|
Exploration |
|
Underground |
|
Ag, Cu |
|
Sediment Hosted - Stratabound |
9
Libby Exploration |
|
United States |
|
Montana |
|
|
100.0 |
% |
|
2 patented lode claims, 36.84 acres (22.33 in wilderness, 14.51 outside wilderness); 26 unpatented lode claims (537 acres), 854 unpatented mill site claims, 11 unpatented tunnel site claims |
|
Private or USFS administered land. Some State permits in-place; no Federal permits. |
|
Exploration |
|
Underground |
|
Ag, Cu |
|
Sediment Hosted - Stratabound |
Republic |
|
United States |
|
Washington |
|
|
100.0 |
% |
|
114 patented claims and private land; 22 unpatented lode claims, 3 state leases, 2,096 acres surface rights, 3,536 acres of mineral rights |
|
Private, BLM and WA DNR administered lands |
|
Exploration |
|
Underground/Open Pit |
|
Au, Ag |
|
Vein |
Silver Valley |
|
United States |
|
Idaho |
|
|
100.0 |
% |
|
Various exploration properties and claim holdings |
|
Private or USFS administered land |
|
Exploration |
|
Underground |
|
Ag, Zn, Pb |
|
Vein |
Aurora |
|
United States |
|
Nevada |
|
|
100.0 |
% |
|
452 unpatented lode claims, 92 patented lode claims, 25 private parcels; 9,928 total acres |
|
Private or USFS administered land, permit work in progress for USFS lands |
|
Exploration |
|
Underground/Open Pit |
|
Au, Ag |
|
Vein |
Rackla - Tiger |
|
Canada |
|
Yukon |
|
|
100.0 |
% |
|
3,315 quartz mineral claims; 164,547 acres (66,590 ha) |
|
Class 3 Quartz Mining Land Use Approval LQ00531; approved by Yukon Environmental and Socio-economic Assessment Board |
|
Exploration |
|
Open Pit/Underground |
|
Au |
|
Carbonate hosted/replacement - reduced intrusion related |
Rackla - Osiris |
|
Canada |
|
Yukon |
|
100.0% |
|
|
1,478 quartz mineral claims; 74,576 acres (30,180 ha) |
|
Class 4 Quartz Mining Land Use Approval LQ00444; approved by Yukon Environmental and Socio-economic Assessment Board |
|
Exploration |
|
Open Pit/Underground |
|
Au |
|
Carbonate hosted, disseminated (Carlin-style) |
|
The following table summarizes the in-situ mineral reserves for all properties as of December 31, 2025:
Asset |
|
Tons (000) |
|
Silver (oz/ton) |
|
Gold (oz/ton) |
|
Lead % |
|
Zinc % |
|
Silver (000 oz) |
|
Gold (000 oz) |
|
Lead Tons |
|
Zinc Tons |
Proven Reserves: (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Greens Creek (2,3) |
|
13 |
|
23.9 |
|
0.120 |
|
3.0 |
|
7.8 |
|
309 |
|
1 |
|
390 |
|
1,000 |
Lucky Friday (2,4) |
|
4,747 |
|
11.8 |
|
— |
|
7.5 |
|
3.8 |
|
56,096 |
|
— |
|
355,370 |
|
181,180 |
Keno Hill(2,5) |
|
9 |
|
23.5 |
|
— |
|
2.4 |
|
6.2 |
|
235 |
|
— |
|
220 |
|
600 |
Total Proven |
|
4,769 |
|
|
|
|
|
|
|
|
|
56,640 |
|
1 |
|
355,980 |
|
182,780 |
Probable Reserves: (6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Greens Creek (2,3) |
|
10,166 |
|
10.4 |
|
0.083 |
|
2.3 |
|
6.3 |
|
105,788 |
|
841 |
|
237,730 |
|
637,130 |
Lucky Friday (2,4) |
|
1,636 |
|
9.5 |
|
— |
|
6.0 |
|
3.7 |
|
15,493 |
|
— |
|
97,590 |
|
60,710 |
Keno Hill(2,5) |
|
2,104 |
|
25.3 |
|
0.007 |
|
2.9 |
|
2.9 |
|
53,172 |
|
16 |
|
61,600 |
|
61,230 |
Total Probable |
|
13,906 |
|
|
|
|
|
|
|
|
|
174,453 |
|
857 |
|
396,920 |
|
759,070 |
Proven and Probable Reserves: (1,6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Greens Creek (2,3) |
|
10,179 |
|
10.4 |
|
0.083 |
|
2.3 |
|
6.3 |
|
106,097 |
|
842 |
|
238,120 |
|
638,130 |
Lucky Friday (2,4) |
|
6,383 |
|
11.2 |
|
— |
|
7.1 |
|
3.8 |
|
71,589 |
|
— |
|
452,960 |
|
241,890 |
Keno Hill(2,5) |
|
2,113 |
|
25.3 |
|
0.007 |
|
2.9 |
|
2.9 |
|
53,407 |
|
16 |
|
61,820 |
|
61,830 |
Total Proven and Probable |
|
18,675 |
|
|
|
|
|
|
|
|
|
231,093 |
|
858 |
|
752,900 |
|
941,850 |
10
The following table summarizes the in-situ mineral resources (8) for all properties, exclusive of mineral reserves, as of December 31, 2025:
11
Asset |
|
Tons (000) |
|
Silver (oz/ton) |
|
Gold (oz/ton) |
|
Lead % |
|
Zinc % |
|
Copper % |
|
Silver (000 oz) |
|
Gold (000 oz) |
|
Lead Tons |
|
Zinc Tons |
|
Copper Tons |
|
|||||||||||
Measured Resources: (8) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Greens Creek (11,12) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Lucky Friday (11,13) |
|
|
1,806 |
|
|
11.8 |
|
|
— |
|
|
7.4 |
|
|
2.1 |
|
|
— |
|
|
21,328 |
|
|
— |
|
|
134,280 |
|
|
37,610 |
|
|
— |
|
Keno Hill (11,14) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Fire Creek (15,16) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Hollister (15,17) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Midas (15,18) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Star (11,20) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Rackla - Tiger Underground (25) |
|
|
32 |
|
|
— |
|
|
0.060 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
2 |
|
|
— |
|
|
— |
|
|
— |
|
Rackla - Tiger Open Pit (25) |
|
|
881 |
|
|
— |
|
|
0.085 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
75 |
|
|
— |
|
|
— |
|
|
— |
|
Rackla - Osiris Underground (26) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Rackla - Osiris Open Pit (26) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Total Measured |
|
|
2,719 |
|
|
|
|
|
|
|
|
|
|
|
|
21,328 |
|
|
77 |
|
|
134,280 |
|
|
37,610 |
|
|
— |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
Tons (000) |
|
Silver (oz/ton) |
|
Gold (oz/ton) |
|
Lead% |
|
Zinc% |
|
Copper% |
|
Silver (000 oz) |
|
Gold (000 oz) |
|
Lead Tons |
|
Zinc Tons |
|
Copper Tons |
|
|||||||||||
Indicated Resources: (9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Greens Creek (11,12) |
|
|
5,844 |
|
|
15.2 |
|
|
0.112 |
|
|
3.4 |
|
|
8.9 |
|
|
— |
|
|
88,655 |
|
|
653 |
|
|
200,430 |
|
|
522,550 |
|
|
— |
|
Lucky Friday (11,13) |
|
|
1,619 |
|
|
11.9 |
|
|
— |
|
|
6.2 |
|
|
1.5 |
|
|
— |
|
|
19,213 |
|
|
— |
|
|
100,200 |
|
|
24,850 |
|
|
— |
|
Keno Hill (11,14) |
|
|
583 |
|
|
24.1 |
|
|
0.009 |
|
|
2.5 |
|
|
6.3 |
|
|
— |
|
|
14,039 |
|
|
5 |
|
|
14,460 |
|
|
36,710 |
|
|
— |
|
Fire Creek (15,16) |
|
|
186 |
|
|
0.9 |
|
|
0.380 |
|
|
— |
|
|
— |
|
|
— |
|
|
158 |
|
|
71 |
|
|
— |
|
|
— |
|
|
— |
|
Hollister (15,17) |
|
|
95 |
|
|
2.4 |
|
|
0.547 |
|
|
— |
|
|
— |
|
|
— |
|
|
227 |
|
|
52 |
|
|
— |
|
|
— |
|
|
— |
|
Midas (15,18) |
|
|
100 |
|
|
5.3 |
|
|
0.394 |
|
|
— |
|
|
— |
|
|
— |
|
|
536 |
|
|
40 |
|
|
— |
|
|
— |
|
|
— |
|
Star (11,19) |
|
|
375 |
|
|
4.7 |
|
|
— |
|
|
9.9 |
|
|
10.5 |
|
|
— |
|
|
1,744 |
|
|
— |
|
|
37,110 |
|
|
39,330 |
|
|
— |
|
Rackla - Tiger Underground (25) |
|
|
960 |
|
|
— |
|
|
0.079 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
76 |
|
|
— |
|
|
— |
|
|
— |
|
Rackla - Tiger Open Pit (25) |
|
|
3,116 |
|
|
— |
|
|
0.100 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
311 |
|
|
— |
|
|
— |
|
|
— |
|
Rackla - Osiris Underground (26) |
|
|
927 |
|
|
— |
|
|
0.133 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
123 |
|
|
— |
|
|
— |
|
|
— |
|
Rackla - Osiris Open Pit (26) |
|
|
4,843 |
|
|
— |
|
|
0.119 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
577 |
|
|
— |
|
|
— |
|
|
— |
|
Total Indicated |
|
|
18,648 |
|
|
|
|
|
|
|
|
|
|
|
|
124,572 |
|
|
1,908 |
|
|
352,200 |
|
|
623,440 |
|
|
— |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
Tons (000) |
|
Silver (oz/ton) |
|
Gold (oz/ton) |
|
Lead % |
|
Zinc % |
|
Copper % |
|
Silver (000 oz) |
|
Gold (000 oz) |
|
Lead Tons |
|
Zinc Tons |
|
Copper Tons |
|
|||||||||||
Measured and Indicated Resources: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Greens Creek (11,12) |
|
|
5,844 |
|
|
15.2 |
|
|
0.11 |
|
|
3.4 |
|
|
8.9 |
|
|
— |
|
|
88,655 |
|
|
653 |
|
|
200,430 |
|
|
522,550 |
|
|
— |
|
Lucky Friday (11,13) |
|
|
3,425 |
|
|
11.8 |
|
|
— |
|
|
6.8 |
|
|
1.8 |
|
|
— |
|
|
40,541 |
|
|
— |
|
|
234,480 |
|
|
62,460 |
|
|
— |
|
Keno Hill (11,14) |
|
|
583 |
|
|
24.1 |
|
|
0.009 |
|
|
2.5 |
|
|
6.3 |
|
|
— |
|
|
14,039 |
|
|
5 |
|
|
14,460 |
|
|
36,710 |
|
|
— |
|
Fire Creek (15,16) |
|
|
186 |
|
|
0.9 |
|
|
0.380 |
|
|
— |
|
|
— |
|
|
— |
|
|
158 |
|
|
71 |
|
|
— |
|
|
— |
|
|
— |
|
Hollister (15,17) |
|
|
95 |
|
|
2.4 |
|
|
0.547 |
|
|
— |
|
|
— |
|
|
— |
|
|
227 |
|
|
52 |
|
|
— |
|
|
— |
|
|
— |
|
Midas (15,18) |
|
|
100 |
|
|
5.3 |
|
|
0.394 |
|
|
— |
|
|
— |
|
|
— |
|
|
536 |
|
|
40 |
|
|
— |
|
|
— |
|
|
— |
|
Star (11,19) |
|
|
375 |
|
|
4.7 |
|
|
— |
|
|
9.9 |
|
|
10.5 |
|
|
— |
|
|
1,744 |
|
|
— |
|
|
37,110 |
|
|
39,330 |
|
|
— |
|
Rackla - Tiger Underground (25) |
|
|
992 |
|
|
— |
|
|
0.079 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
78 |
|
|
— |
|
|
— |
|
|
— |
|
Rackla - Tiger Open Pit (25) |
|
|
3,997 |
|
|
— |
|
|
0.097 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
386 |
|
|
— |
|
|
— |
|
|
— |
|
Rackla - Osiris Underground (26) |
|
|
927 |
|
|
— |
|
|
0.133 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
123 |
|
|
— |
|
|
— |
|
|
— |
|
Rackla - Osiris Open Pit (26) |
|
|
4,843 |
|
|
— |
|
|
0.119 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
577 |
|
|
— |
|
|
— |
|
|
— |
|
Total Measured and Indicated |
|
|
21,367 |
|
|
|
|
|
|
|
|
|
|
|
|
145,900 |
|
|
1,985 |
|
|
486,480 |
|
|
661,050 |
|
|
— |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
Tons (000) |
|
Silver (oz/ton) |
|
Gold (oz/ton) |
|
Lead % |
|
Zinc % |
|
Copper % |
|
Silver (000 oz) |
|
Gold (000 oz) |
|
Lead Tons |
|
Zinc Tons |
|
Copper Tons |
|
|||||||||||
Inferred Resources: (10) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Greens Creek (11,12) |
|
|
1,431 |
|
|
16.3 |
|
|
0.107 |
|
|
3.2 |
|
|
8.0 |
|
|
— |
|
|
23,314 |
|
|
153 |
|
|
45,720 |
|
|
113,910 |
|
|
— |
|
Lucky Friday (11,13) |
|
|
2,238 |
|
|
11.6 |
|
|
— |
|
|
8.6 |
|
|
2.9 |
|
|
— |
|
|
26,033 |
|
|
— |
|
|
192,010 |
|
|
65,770 |
|
|
— |
|
Keno Hill (11,14) |
|
|
662 |
|
|
16.7 |
|
|
0.005 |
|
|
1.9 |
|
|
3.8 |
|
|
— |
|
|
11,044 |
|
|
4 |
|
|
12,450 |
|
|
25,350 |
|
|
— |
|
12
Fire Creek (15,16) |
|
|
1,108 |
|
|
0.5 |
|
|
0.433 |
|
|
— |
|
|
— |
|
|
— |
|
|
501 |
|
|
479 |
|
|
— |
|
|
— |
|
|
— |
|
Fire Creek - Open Pit (20) |
|
|
74,584 |
|
|
0.1 |
|
|
0.029 |
|
|
— |
|
|
— |
|
|
— |
|
|
5,232 |
|
|
2,178 |
|
|
— |
|
|
— |
|
|
— |
|
Hollister (15,17) |
|
|
821 |
|
|
2.6 |
|
|
0.376 |
|
|
— |
|
|
— |
|
|
— |
|
|
2,145 |
|
|
309 |
|
|
— |
|
|
— |
|
|
— |
|
Midas (15,18) |
|
|
1,665 |
|
|
5.1 |
|
|
0.413 |
|
|
— |
|
|
— |
|
|
— |
|
|
8,466 |
|
|
687 |
|
|
— |
|
|
— |
|
|
— |
|
Star (11,19) |
|
|
667 |
|
|
4.9 |
|
|
— |
|
|
9.4 |
|
|
9.2 |
|
|
— |
|
|
3,245 |
|
|
— |
|
|
62,810 |
|
|
61,440 |
|
|
— |
|
San Juan Silver (11,21) |
|
|
2,310 |
|
|
15.9 |
|
|
0.011 |
|
|
1.4 |
|
|
1.1 |
|
|
— |
|
|
36,760 |
|
|
26 |
|
|
49,270 |
|
|
40,310 |
|
|
— |
|
Monte Cristo (22) |
|
|
576 |
|
|
0.2 |
|
|
0.183 |
|
|
— |
|
|
— |
|
|
— |
|
|
135 |
|
|
106 |
|
|
— |
|
|
— |
|
|
— |
|
Rock Creek (11,23) |
|
|
99,258 |
|
|
1.5 |
|
|
— |
|
|
— |
|
|
— |
|
|
0.7 |
|
|
148,291 |
|
|
— |
|
|
— |
|
|
— |
|
|
656,060 |
|
Libby Exploration (11,24) |
|
|
112,185 |
|
|
1.6 |
|
|
— |
|
|
— |
|
|
— |
|
|
0.7 |
|
|
183,346 |
|
|
— |
|
|
— |
|
|
— |
|
|
759,420 |
|
Rackla - Tiger Underground (25) |
|
|
153 |
|
|
— |
|
|
0.069 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
11 |
|
|
— |
|
|
— |
|
|
— |
|
Rackla - Tiger Open Pit (25) |
|
|
30 |
|
|
— |
|
|
0.051 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
2 |
|
|
— |
|
|
— |
|
|
— |
|
Rackla - Osiris Underground (26) |
|
|
4,398 |
|
|
— |
|
|
0.117 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
515 |
|
|
— |
|
|
— |
|
|
— |
|
Rackla - Osiris Open Pit (26) |
|
|
5,919 |
|
|
— |
|
|
0.089 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
529 |
|
|
— |
|
|
— |
|
|
— |
|
Total Inferred |
|
|
308,005 |
|
|
|
|
|
|
|
|
|
|
|
|
448,512 |
|
|
4,999 |
|
|
362,260 |
|
|
306,780 |
|
|
1,415,480 |
|
|||||
13
Individual Properties
MATERIAL OPERATING PROPERTIES
Greens Creek
We own 100% of the Greens Creek mine, located on Admiralty Island near Juneau in southeast Alaska at 58° 4’57.00”N Latitude, 134°37’57.40”W Longitude (WGS84). Admiralty Island is accessed by boat, float plane, or helicopter. On the island, the mine site and various surface facilities are accessed by 13 miles of all-weather gravel roads. The Greens Creek mine has been in production since 1989, with a temporary care and maintenance period from April 1993 through July 1996. We report Greens Creek as a separate segment in our consolidated financial statements. See Note 5 of Notes to Consolidated Financial Statements and Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations - Greens Creek for information on its financial performance.
Greens Creek is within the Admiralty Island National Monument, an environmentally sensitive area. The Greens Creek property includes 440 unpatented lode mining claims, 58 unpatented millsite claims, 21 patented lode claims and one patented millsite. In addition, the Greens Creek site includes properties under lease from the U.S. Forest Service ("USFS") for a road right-of-way, mine waste area and tailings storage facility. The USFS leases have varying expiration terms. Greens Creek also has title to mineral rights on 7,301 acres of federal land acquired through a land exchange with the USFS. We are currently exploring, but not mining, on such federal land. The claims and leases above comprise a total area of approximately 24 square miles.
The Greens Creek deposit is a volcanogenic massive sulfide deposit with a relatively high precious metal content compared to other deposits of its type. The host rock consists predominantly of marine sedimentary and mafic to ultramafic volcanic and plutonic rocks, which have been subjected to multiple periods of deformation. These deformational episodes imposed intense tectonic fabrics and folds within the rock. The deposits occur at the contact between Mississippian-age mafic meta-volcanic footwall and a hanging wall of Triassic-age argillite and basalt. Extensive hydrothermal alteration occurred within the meta-volcanic footwall prior to and during ore deposition, converting the basalts to sericite-rich, phyllitic schist. At ore deposition, thick and extensive lenses of base and precious metals, with pyrite and barite, formed at the footwall-hanging wall contact. Major sulfide minerals include pyrite, sphalerite, galena, and tetrahedrite/tennantite.
14
Greens Creek consists of the mine, an ore concentrating mill, a tailings storage area, a ship-loading facility, camp facilities, a ferry dock, and other related infrastructure. The map below illustrates the location and access to Greens Creek:
Greens Creek is an underground mine accessed by a ramp from surface which produces approximately 2,300 to 2,600 tons of ore per day. The primary mining methods are cut and fill and longhole stoping. The Greens Creek ore processing facility includes a SAG/ball mill grinding circuit to grind the run of mine ore to liberate the minerals and produce a slurry suitable for differential flotation of mineral concentrates. A gravity circuit recovers free gold that exists as electrum, a gold/silver alloy in the ore. Gravity concentrates are produced from this circuit prior to flotation. Three flotation concentrates are produced: a silver concentrate which contains most of the silver recovered; a zinc concentrate which is low in precious metals content; and a zinc-rich precious metals concentrate that contains gold, silver, zinc, and lead. Doré is produced from the gravity concentrate by a third-party processor and further refined and sold to precious metal traders. The concentrate products are sold to a number of smelters and traders worldwide. See Note 5 of Notes to Consolidated Financial Statements for information on the significant customers for Greens Creek’s products. Concentrates are shipped from the Hawk Inlet marine terminal about nine miles from the mill.
For more information, see Exhibit 96.1, the Technical Report Summary on the Greens Creek Mine, Alaska, U.S.A., prepared for the Company by the Qualified Person under Section 1300 of SEC Regulation S-K ("QP"), SLR International Corporation ("SLR") with an effective date of December 31, 2021.
The employees at Greens Creek are employees of Hecla Greens Creek Mining Company, our wholly-owned subsidiary, and are not represented by a bargaining agent. There were 546 employees at Greens Creek at December 31, 2025.
As of December 31, 2025, we have recorded a $51.6 million asset retirement obligation for reclamation and closure costs. We maintained a $92.2 million reclamation and long-term water treatment bond for Greens Creek as of December 31, 2025. The net book value of the Greens Creek property and its associated plant, equipment and mineral interests was approximately $517.5 million as of December 31, 2025. The vintage of the facilities at Greens Creek ranges from the 1980s to 2025.
The current mine plan at Greens Creek utilizes estimates of reserves and resources for approximately 11 years of production, through 2036.
Information with respect to Greens Creek's production, costs applicable to sales, average Cash Cost, After By-product Credits, Per Silver Ounce, All-In Sustaining Costs (“AISC”), After By-product Credits, Per Silver Ounce, and proven and probable mineral reserves for the past three years is set forth in the following table.
15
|
|
Years Ended December 31, |
|
|||||||||
Production |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Ore milled (tons) |
|
|
871,659 |
|
|
|
895,318 |
|
|
|
914,796 |
|
Silver (ounces) |
|
|
8,724,996 |
|
|
|
8,480,877 |
|
|
|
9,731,752 |
|
Gold (ounces) |
|
|
59,349 |
|
|
|
55,275 |
|
|
|
60,896 |
|
Lead (tons) |
|
|
18,213 |
|
|
|
18,320 |
|
|
|
19,578 |
|
Zinc (tons) |
|
|
51,387 |
|
|
|
51,288 |
|
|
|
51,496 |
|
Copper (tons) |
|
|
1,804 |
|
|
|
1,874 |
|
|
|
1,823 |
|
|
|
|
|
|
|
|
|
|
|
|||
Costs applicable to sales (1) |
|
$ |
234,221 |
|
|
$ |
214,677 |
|
|
$ |
205,900 |
|
Cash Cost, After By-product Credits, Per Silver Ounce (2) |
|
$ |
(8.02 |
) |
|
$ |
(0.05 |
) |
|
$ |
2.53 |
|
AISC, After By-Product Credits, per Silver Ounce (2) |
|
$ |
(2.36 |
) |
|
$ |
5.65 |
|
|
$ |
7.14 |
|
|
|
|
|
|
|
|
|
|
|
|||
Proven Mineral Reserves(2,3,4,5) |
|
|
|
|
|
|
|
|
|
|||
Total tons |
|
|
12,900 |
|
|
|
9,200 |
|
|
|
8,800 |
|
Silver (ounces per ton) |
|
|
23.9 |
|
|
|
7.6 |
|
|
|
11.3 |
|
Gold (ounces per ton) |
|
|
0.12 |
|
|
|
0.07 |
|
|
|
0.08 |
|
Zinc (percent) |
|
|
7.8 |
|
|
|
6.5 |
|
|
|
8.4 |
|
Lead (percent) |
|
|
3.0 |
|
|
|
2.4 |
|
|
|
3.5 |
|
Contained silver (ounces) |
|
|
308,900 |
|
|
|
69,800 |
|
|
|
99,500 |
|
Contained gold (ounces) |
|
|
1,500 |
|
|
|
700 |
|
|
|
700 |
|
Contained lead (tons) |
|
|
390 |
|
|
|
220 |
|
|
|
310 |
|
Contained zinc (tons) |
|
|
1,000 |
|
|
|
600 |
|
|
|
740 |
|
|
|
|
|
|
|
|
|
|
|
|||
Probable Mineral Reserves(3,4,5,6) |
|
|
|
|
|
|
|
|
|
|||
Total tons |
|
|
10,165,500 |
|
|
|
10,437,800 |
|
|
|
10,008,900 |
|
Silver (ounces per ton) |
|
|
10.4 |
|
|
|
9.9 |
|
|
|
10.5 |
|
Gold (ounces per ton) |
|
|
0.08 |
|
|
|
0.08 |
|
|
|
0.09 |
|
Zinc (percent) |
|
|
6.3 |
|
|
|
6.2 |
|
|
|
6.6 |
|
Lead (percent) |
|
|
2.3 |
|
|
|
2.3 |
|
|
|
2.5 |
|
Contained silver (ounces) |
|
|
105,788,100 |
|
|
|
103,640,900 |
|
|
|
105,121,700 |
|
Contained gold (ounces) |
|
|
840,800 |
|
|
|
864,300 |
|
|
|
879,700 |
|
Contained lead (tons) |
|
|
237,730 |
|
|
|
240,450 |
|
|
|
250,270 |
|
Contained zinc (tons) |
|
|
637,130 |
|
|
|
645,410 |
|
|
|
657,990 |
|
|
|
|
|
|
|
|
|
|
|
|||
Total Proven and Probable Mineral Reserves(3,4,5,6) |
|
|
|
|
|
|
|
|
|
|||
Total tons |
|
|
10,178,400 |
|
|
|
10,447,000 |
|
|
|
10,017,700 |
|
Silver (ounces per ton) |
|
|
10.4 |
|
|
|
9.9 |
|
|
|
10.5 |
|
Gold (ounces per ton) |
|
|
0.08 |
|
|
|
0.08 |
|
|
|
0.09 |
|
Zinc (percent) |
|
|
6.3 |
|
|
|
6.2 |
|
|
|
6.6 |
|
Lead (percent) |
|
|
2.3 |
|
|
|
2.3 |
|
|
|
2.5 |
|
Contained silver (ounces) |
|
|
106,097,000 |
|
|
|
103,710,700 |
|
|
|
105,221,200 |
|
Contained gold (ounces) |
|
|
842,300 |
|
|
|
865,000 |
|
|
|
880,400 |
|
Contained lead (tons) |
|
|
238,120 |
|
|
|
240,670 |
|
|
|
250,580 |
|
Contained zinc (tons) |
|
|
638,130 |
|
|
|
646,010 |
|
|
|
658,730 |
|
16
|
|
December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Silver (per ounce) |
|
$ |
25.00 |
|
|
$ |
22.00 |
|
|
$ |
17.00 |
|
Gold (per ounce) |
|
$ |
2,100 |
|
|
$ |
1,900 |
|
|
$ |
1,600 |
|
Lead (per pound) |
|
$ |
0.90 |
|
|
$ |
0.90 |
|
|
$ |
0.90 |
|
Zinc (per pound) |
|
$ |
1.15 |
|
|
$ |
1.15 |
|
|
$ |
1.15 |
|
17
Information on in-situ mineral resources for Greens Creek excluding reserves for the past three years is set forth in the following table.
|
|
Years Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Measured Resources (1,2,3) |
|
|
|
|
|
|
|
|
|
|||
Total tons |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Silver (ounces per ton) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Gold (ounces per ton) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Zinc (percent) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Lead (percent) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Silver (ounces) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Gold (ounces) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Lead (tons) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Zinc (tons) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|||
Indicated Resources (1,2,3) |
|
|
|
|
|
|
|
|
|
|||
Total tons |
|
|
5,844,200 |
|
|
|
7,618,700 |
|
|
|
8,039,900 |
|
Silver (ounces per ton) |
|
|
15.2 |
|
|
|
14.1 |
|
|
|
13.9 |
|
Gold (ounces per ton) |
|
|
0.11 |
|
|
|
0.10 |
|
|
|
0.10 |
|
Zinc (percent) |
|
|
8.9 |
|
|
|
8.0 |
|
|
|
8.0 |
|
Lead (percent) |
|
|
3.4 |
|
|
|
3.0 |
|
|
|
3.0 |
|
Silver (ounces) |
|
|
88,654,700 |
|
|
|
107,226,000 |
|
|
|
111,526,000 |
|
Gold (ounces) |
|
|
653,000 |
|
|
|
760,000 |
|
|
|
800,000 |
|
Lead (tons) |
|
|
200,430 |
|
|
|
227,360 |
|
|
|
239,250 |
|
Zinc (tons) |
|
|
522,550 |
|
|
|
607,600 |
|
|
|
643,950 |
|
|
|
|
|
|
|
|
|
|
|
|||
Measured and Indicated Resources (1,2,3) |
|
|
|
|
|
|
|
|
|
|||
Total tons |
|
|
5,844,200 |
|
|
|
7,618,700 |
|
|
|
8,039,900 |
|
Silver (ounces per ton) |
|
|
15.2 |
|
|
|
14.1 |
|
|
|
13.9 |
|
Gold (ounces per ton) |
|
|
0.11 |
|
|
|
0.10 |
|
|
|
0.10 |
|
Zinc (percent) |
|
|
8.9 |
|
|
|
8.0 |
|
|
|
8.0 |
|
Lead (percent) |
|
|
3.4 |
|
|
|
3.0 |
|
|
|
3.0 |
|
Silver (ounces) |
|
|
88,654,700 |
|
|
|
107,226,000 |
|
|
|
111,526,000 |
|
Gold (ounces) |
|
|
653,000 |
|
|
|
760,000 |
|
|
|
800,000 |
|
Lead (tons) |
|
|
200,430 |
|
|
|
227,360 |
|
|
|
239,250 |
|
Zinc (tons) |
|
|
522,550 |
|
|
|
607,600 |
|
|
|
643,950 |
|
|
|
|
|
|
|
|
|
|
|
|||
Inferred Resources (1,2,3) |
|
|
|
|
|
|
|
|
|
|||
Total tons |
|
|
1,431,300 |
|
|
|
1,877,700 |
|
|
|
1,929,600 |
|
Silver (ounces per ton) |
|
|
16.3 |
|
|
|
13.4 |
|
|
|
13.4 |
|
Gold (ounces per ton) |
|
|
0.11 |
|
|
|
0.08 |
|
|
|
0.08 |
|
Zinc (percent) |
|
|
8.0 |
|
|
|
6.9 |
|
|
|
2.9 |
|
Lead (percent) |
|
|
3.2 |
|
|
|
2.9 |
|
|
|
6.9 |
|
Silver (ounces) |
|
|
23,314,000 |
|
|
|
25,106,100 |
|
|
|
25,891,000 |
|
Gold (ounces) |
|
|
153,400 |
|
|
|
151,400 |
|
|
|
154,000 |
|
Lead (tons) |
|
|
45,720 |
|
|
|
54,010 |
|
|
|
55,890 |
|
Zinc (tons) |
|
|
113,910 |
|
|
|
130,120 |
|
|
|
133,260 |
|
18
Lucky Friday
We have owned and operated the Lucky Friday mine since 1958, and have wholly owned it since 1964. Lucky Friday is a deep underground silver, lead and zinc mine located in the Coeur d’Alene Mining District in northern Idaho at 47°28'15.70”N Latitude, 115°47'0.44”W Longitude (WGS84). Lucky Friday is one-quarter mile east of Mullan, Idaho, and is adjacent to U.S. Interstate 90. We report Lucky Friday as a separate segment in our consolidated financial statements. See Note 5 of Notes to Consolidated Financial Statements and Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations - Lucky Friday for information on its financial performance.
The Lucky Friday mine is comprised of 710 acres consisting of 43 patented mining claims and fee lands and 535 acres consisting of 53 unpatented mining claims. We also own or control approximately 26 square miles of mineral interests, which include patented mining and millsite claims, fee lands, and unpatented mining claims, that are adjacent to the Lucky Friday mine property. Below is a map illustrating the location and access to Lucky Friday:
The principal mineral-bearing structure at the Lucky Friday Mine through 1997 was the Lucky Friday Vein, a fissure vein typical of many in the Coeur d’Alene Mining District. The Revett Formation (quartzite) of late Precambrian age hosts the productive portion of the vein. The Lucky Friday Vein strikes northeast and dips nearly vertical with an average width of six to seven feet. Its principal ore minerals are galena and tetrahedrite with minor amounts of sphalerite and chalcopyrite. The ore occurs as a single, continuous ore zone in, and along the Lucky Friday Vein. In 1991, Hecla discovered several mineralized veins containing some high-grade silver ores in the Gold Hunter property, located about 5,000 feet northwest of the Lucky Friday Vein workings. Hecla finished a feasibility study in 1997 and achieved full production in 1998. The Gold Hunter veins are hosted in a 200-foot-thick siliceous lens within the Wallace Formation (quartzite, limestone, and argillite) that transitions to the St Regis Formation (quartzite and argillite) below the 5900-level. The veins are sub-parallel, and perhaps ‘en-echelon’ along strike and dip. The strike of the vein system is west-northwest with a dip of 85 degrees to the south. While the veins share many characteristics with the Lucky Friday Vein, there are some mineralogical and rock mechanics differences that currently make mining at Gold Hunter more attractive.
Access to the mining horizons from the surface is by shaft access. Once underground, trackless drifts and ramps are utilized to reach the mining areas. An internal, hoisting shaft was completed in 2017 to extend access at depth in the Gold Hunter area. The principal mining methods in use at Lucky Friday consist of underhand systems with integral paste fill and varying degrees of mechanization. In 2020, we tested and implemented the underhand closed bench ("UCB") mining method. The UCB method is a new and patented productive mining method developed by Hecla for proactive control of fault-slip seismicity in deep, high-stress, narrow-vein mining. The method uses bench drilling and blasting methods to fragment significant vertical and lateral extents of the vein beneath a top cut taken along the strike of the vein and under engineered backfill. The method is accomplished without the use of drop raises or lower mucking drives which may result in local stress concentrations and increased exposure to seismic events. Large blasts using up to 45,000 lbs. of pumped emulsion and programmable electronic detonators fragment up to 500 feet of strike length to a depth of approximately 24 feet. These large blasts proactively induce fault-slip seismicity at the time of the blast and shortly after it. This blasted corridor is then mined underhand for two cuts. As these cuts are mined, little to no blasting is done to advance them. Dilution is controlled by supporting the hanging wall and footwall as the mining progresses through the blasted ore. The entire cycle repeats and stoping advances
19
downdip, under fill, and in a destressed zone. The method allows for greater control of fault-slip seismic events significantly improving safety. In conjunction, a notable productivity increase has been achieved by reducing seismic delays and utilizing bulk mining activities. In 2025, 2024 and 2023, 88%, 86% and 87%, respectively of the tons mined were produced through the UCB method. The underhand cut and fill method was also utilized in 2025, 2024 and 2023. Under this method, once a cut is taken along the strike of the vein, it is backfilled with cemented tailings and the next cut is accessed below from the ramp system. Both methods utilize rubber-tired equipment to access the veins through ramps developed outside of the ore body.
Ore at Lucky Friday is processed using a conventional lead/zinc flotation flowsheet, and the plant capacity currently is estimated at 1,165 tons per day. During August 2023, the production at the mine was suspended due to a fire that occurred while repairing an unused station in the #2 ventilation shaft, which is also the secondary egress (required by MSHA regulations). By early September, the fire had been extinguished, normal ventilation was reestablished and the workforce recalled. Following evaluation of alternatives, it was determined that in order to safely bring the mine back into production in the most rapid and cost-effective way, a new secondary egress needed to be developed to bypass the damaged portion of the #2 shaft. The new egress involved extending an existing ramp 1,600 feet, installing a 290-foot-long manway raise, and developing an 850-foot ventilation raise. This work resulted in operations being suspended for the remainder of 2023, with the mine restarting production in January 2024, and ramping up to full production during the first quarter.
For more information, see Exhibit 96.2, the Technical Report Summary on the Lucky Friday Mine, Idaho, U.S.A., prepared for the Company by the QP, SLR, with an effective date of December 31, 2021.
At December 31, 2025, there were 444 employees at Lucky Friday. The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial, and Service Workers International Union is the bargaining agent for Lucky Friday’s 325 hourly employees as of December 31, 2025. During January 2023, the bargaining agent ratified a six-year labor agreement that expires in May 2029. Following a strike that started in March 2017 and ended in January 2020, re-staffing of the mine and ramp-up activities were completed during 2020, with a return to full production starting in the fourth quarter of 2020.
As of December 31, 2025, we have recorded a $14.9 million asset retirement obligation for reclamation and closure costs. The net book value of the Lucky Friday property and its associated plant, equipment and mineral interests was approximately $585.8 million as of December 31, 2025. The vintage of the facilities at Lucky Friday ranges from the 1950s to 2025.
The current mine plan at Lucky Friday utilizes estimates of reserves and resources for approximately 17 years of production, through 2044.
20
Information with respect to the Lucky Friday’s production, cost applicable to sales, costs applicable to sales - temporarily suspended operations, average Cash Cost, After By-product Credits, Per Silver Ounce, AISC, After By-product Credits, Per Silver Ounce, and proven and probable in -situ mineral reserves for the past three years is set forth in the table below.
|
|
Years Ended December 31, |
|
|||||||||
Production |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Ore milled (tons) |
|
|
427,048 |
|
|
|
406,541 |
|
|
|
231,129 |
|
Silver (ounces) |
|
|
5,260,686 |
|
|
|
4,890,949 |
|
|
|
3,086,119 |
|
Lead (tons) |
|
|
34,284 |
|
|
|
31,265 |
|
|
|
19,543 |
|
Zinc (tons) |
|
|
14,924 |
|
|
|
13,513 |
|
|
|
7,944 |
|
|
|
|
|
|
|
|
|
|
|
|||
Costs Applicable to Sales (1) |
|
$ |
122,635 |
|
|
$ |
103,436 |
|
|
$ |
59,859 |
|
Costs Applicable to Sales - Temporarily suspended operations(1) |
|
$ |
— |
|
|
$ |
1,583 |
|
|
$ |
20,489 |
|
Cash Cost, After By-product Credits, Per Silver Ounce (2) |
|
$ |
8.66 |
|
|
$ |
7.80 |
|
|
$ |
5.51 |
|
AISC, After By-product Credits, Per Silver Ounce (2) |
|
$ |
21.98 |
|
|
$ |
16.50 |
|
|
$ |
12.21 |
|
|
|
|
|
|
|
|
|
|
|
|||
Proven Mineral Reserves(3,4,5) |
|
|
|
|
|
|
|
|
|
|||
Total tons |
|
|
4,746,900 |
|
|
|
5,285,400 |
|
|
|
5,298,600 |
|
Silver (ounces per ton) |
|
|
11.9 |
|
|
|
11.9 |
|
|
|
12.8 |
|
Lead (percent) |
|
|
7.5 |
|
|
|
7.6 |
|
|
|
8.0 |
|
Zinc (percent) |
|
|
3.8 |
|
|
|
3.6 |
|
|
|
3.8 |
|
Contained silver (ounces) |
|
|
56,096,400 |
|
|
|
62,824,900 |
|
|
|
67,594,600 |
|
Contained lead (tons) |
|
|
355,370 |
|
|
|
400,400 |
|
|
|
424,080 |
|
Contained zinc (tons) |
|
|
181,180 |
|
|
|
189,860 |
|
|
|
201,280 |
|
|
|
|
|
|
|
|
|
|
|
|||
Probable Mineral Reserves(3,4,5) |
|
|
|
|
|
|
|
|
|
|||
Total tons |
|
|
1,635,500 |
|
|
|
789,900 |
|
|
|
965,500 |
|
Silver (ounces per ton) |
|
|
9.5 |
|
|
|
11.4 |
|
|
|
10.8 |
|
Lead (percent) |
|
|
6.0 |
|
|
|
7.6 |
|
|
|
7.1 |
|
Zinc (percent) |
|
|
3.7 |
|
|
|
3.1 |
|
|
|
2.9 |
|
Contained silver (ounces) |
|
|
15,492,800 |
|
|
|
9,011,300 |
|
|
|
10,410,500 |
|
Contained lead (tons) |
|
|
97,590 |
|
|
|
60,210 |
|
|
|
68,320 |
|
Contained zinc (tons) |
|
|
60,710 |
|
|
|
24,620 |
|
|
|
28,100 |
|
|
|
|
|
|
|
|
|
|
|
|||
Total Proven and Probable Mineral Reserves(3,4,5) |
|
|
|
|
|
|
|
|
|
|||
Total tons |
|
|
6,382,400 |
|
|
|
6,075,300 |
|
|
|
6,264,100 |
|
Silver (ounces per ton) |
|
|
11.2 |
|
|
|
11.8 |
|
|
|
12.5 |
|
Lead (percent) |
|
|
7.1 |
|
|
|
7.6 |
|
|
|
7.9 |
|
Zinc (percent) |
|
|
3.8 |
|
|
|
3.5 |
|
|
|
3.7 |
|
Contained silver (ounces) |
|
|
71,589,200 |
|
|
|
71,836,200 |
|
|
|
78,005,100 |
|
Contained lead (tons) |
|
|
452,960 |
|
|
|
460,610 |
|
|
|
492,400 |
|
Contained zinc (tons) |
|
|
241,890 |
|
|
|
214,480 |
|
|
|
229,380 |
|
21
|
|
December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Silver (per ounce) |
|
$ |
25.00 |
|
|
$ |
22.00 |
|
|
$ |
17.00 |
|
Lead (per pound) |
|
$ |
0.90 |
|
|
$ |
0.90 |
|
|
$ |
0.90 |
|
Zinc (per pound) |
|
$ |
1.15 |
|
|
$ |
1.15 |
|
|
$ |
1.15 |
|
22
Information on in-situ mineral resources excluding mineral reserves for Lucky Friday for the past three years is set forth in the following table.
|
|
Years Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Measured Resources (1,2,3) |
|
|
|
|
|
|
|
|
|
|||
Total tons |
|
|
1,805,600 |
|
|
|
3,781,400 |
|
|
|
5,325,500 |
|
Silver (ounces per ton) |
|
|
11.8 |
|
|
|
8.7 |
|
|
|
8.6 |
|
Lead (percent) |
|
|
7.4 |
|
|
|
5.8 |
|
|
|
5.6 |
|
Zinc (percent) |
|
|
2.1 |
|
|
|
2.6 |
|
|
|
2.8 |
|
Silver (ounces) |
|
|
21,327,700 |
|
|
|
32,794,700 |
|
|
|
45,784,900 |
|
Lead (tons) |
|
|
134,280 |
|
|
|
217,490 |
|
|
|
299,360 |
|
Zinc (tons) |
|
|
37,610 |
|
|
|
99,840 |
|
|
|
146,420 |
|
|
|
|
|
|
|
|
|
|
|
|||
Indicated Resources (1,2,3) |
|
|
|
|
|
|
|
|
|
|||
Total tons |
|
|
1,618,900 |
|
|
|
845,200 |
|
|
|
1,011,000 |
|
Silver (ounces per ton) |
|
|
11.9 |
|
|
|
8.7 |
|
|
|
8.1 |
|
Lead (percent) |
|
|
6.2 |
|
|
|
6.6 |
|
|
|
6.0 |
|
Zinc (percent) |
|
|
1.5 |
|
|
|
2.3 |
|
|
|
2.7 |
|
Silver (ounces) |
|
|
19,213,200 |
|
|
|
7,350,000 |
|
|
|
8,135,700 |
|
Lead (tons) |
|
|
100,200 |
|
|
|
55,890 |
|
|
|
60,200 |
|
Zinc (tons) |
|
|
24,850 |
|
|
|
19,700 |
|
|
|
26,910 |
|
|
|
|
|
|
|
|
|
|
|
|||
Measured and Indicated Resources (1,2,3) |
|
|
|
|
|
|
|
|
|
|||
Total tons |
|
|
3,424,500 |
|
|
|
4,626,600 |
|
|
|
6,336,500 |
|
Silver (ounces per ton) |
|
|
11.8 |
|
|
|
8.7 |
|
|
|
8.5 |
|
Lead (percent) |
|
|
6.8 |
|
|
|
6.2 |
|
|
|
5.7 |
|
Zinc (percent) |
|
|
1.8 |
|
|
|
2.5 |
|
|
|
2.7 |
|
Silver (ounces) |
|
|
40,540,900 |
|
|
|
40,144,700 |
|
|
|
53,920,600 |
|
Lead (tons) |
|
|
234,480 |
|
|
|
273,380 |
|
|
|
359,560 |
|
Zinc (tons) |
|
|
62,460 |
|
|
|
119,540 |
|
|
|
173,330 |
|
|
|
|
|
|
|
|
|
|
|
|||
Inferred Resources (1,2,3) |
|
|
|
|
|
|
|
|
|
|||
Total tons |
|
|
2,237,700 |
|
|
|
3,811,400 |
|
|
|
3,600,000 |
|
Silver (ounces per ton) |
|
|
11.6 |
|
|
|
10.3 |
|
|
|
7.8 |
|
Lead (percent) |
|
|
8.6 |
|
|
|
7.7 |
|
|
|
5.9 |
|
Zinc (percent) |
|
|
2.9 |
|
|
|
3.2 |
|
|
|
2.8 |
|
Silver (ounces) |
|
|
26,033,300 |
|
|
|
39,183,200 |
|
|
|
27,933,900 |
|
Lead (tons) |
|
|
192,010 |
|
|
|
293,010 |
|
|
|
211,340 |
|
Zinc (tons) |
|
|
65,770 |
|
|
|
121,710 |
|
|
|
100,630 |
|
Keno Hill
The Keno Hill unit is located in the central Yukon Territory, Canada, and covers an area of approximately 15,000 hectares (37,000 acres) in central Yukon (63° 54' 32" N, 135° 19’ 18” W; NTS 105M/14 and 105M/13). The operations are located in the traditional territory of the First Nation of Na-Cho Nyäk Dun (FNNND). We report Keno as a separate segment in our consolidated financial statements. See Note 5 of Notes to Consolidated Financial Statements and Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations - Keno Hill for information on its financial performance.
23
The total Hecla Keno Hill mineral claims as of December 31, 2025, covers an area of 238.12 square kilometers (92 square miles) and comprises 717 quartz mining leases, 867 quartz mining claims and two Crown Grants. Below is a map illustrating the location and access to Keno Hill:
The Keno Hill property is a polymetallic silver-lead-zinc vein district with characteristics similar to other well-known mining districts in the world. Examples of this type of mineralization include the Kokanee Range (Slocan), British Columbia; Coeur d’Alene, Idaho; Freiberg and the Harz Mountains, Germany; and Príbram, Czech Republic.
The local geology is dominated by the Mississippian Keno Hill Quartzite comprising the Basal Quartzite Member and conformably overlying Sourdough Hill Member. Silver predominantly occurs in argentiferous galena and argentiferous tetrahedrite (freibergite). In some assemblages, silver is also found as native silver, in polybasite, stephanite, and pyrargyrite. Lead occurs in galena and zinc in sphalerite. Other sulfides include pyrite, pyrrhotite, arsenopyrite, and chalcopyrite. In general, common gangue minerals include siderite and, to a lesser extent, quartz, and calcite.
Keno Hill ore is mined with a mechanized cut and fill method ("MCF"). Where the ore width is wider than can be safely extracted in one cut, the ore will be mined in adjacent drifts. Lenses are predominantly mined in a bottom-up sequence and filled with cemented rock fill ("CRF") with a 3%-8% binder content. CRF is used to introduce temporary sill levels or to fill initial drifts when multiple adjacent drifts are required. Temporary sill levels form a sequence interrupting pillar which allows for multiple mining fronts to be active on one lens at a time. The remainder of the lifts will be backfilled with unconsolidated rock fill. This mining method was chosen due to the narrow steeply dipping nature of the mineral bodies and to maximize safety and productivity. The various deposits require the use of mining methods that can adequately support the vein and that are flexible and selective while minimizing the direct mining costs. In the MCF method, an attack ramp is developed from the main ramp at a gradient of -15%. Upon reaching the orebody, an intersection is developed, and a lift is developed in both directions along strike, following the geological contact of the orebody. At the end of the lens, the void is backfilled using a Load Haul Dump ("LHD") machine. The LHD utilizes a bulldozer-like plate to push waste tight to the back of the drift. Once the level has been completely backfilled, the next lift above the previously mined lift is accessed by slashing down the back of the attack ramp and working off the muck pile/horizon. MCF drift sizes are on average 3.5 meters high x 3.5 meters wide. For areas wider than development equipment, a second parallel drift will be mined beside the backfilled drift to fully extract the material prior to accessing the lift above. In this situation, the first drift will be completely backfilled with cemented rock fill to ensure a stable wall to allow adjacent mining activity. The lifts are generally sequenced from the bottom-up within each panel.
The Keno Hill mill is based on a conventional sequential flotation process producing silver and precious metal concentrates. The silver concentrates are high in lead which typically accounts for approximately 90% to 95% of the mill feed silver values since given that is strongly associated with lead minerals. Overall, silver represents 70% to 80% of the value of the ores in the district.
For more information, see Exhibit 96.4, the Technical Report Summary on the Keno Hill Operations, Yukon, Canada, prepared for the Company by Mining Plus Canada Ltd., with an effective date of December 31, 2023.
At December 31, 2025, there were 261 employees at Keno Hill.
24
As of December 31, 2025, we have recorded a $3.7 million asset retirement obligation for reclamation and closure costs. The net book value of the Keno Hill property and its associated plant, equipment and mineral interests was approximately $408.0 million as of December 31, 2025. The active infrastructure in place at Keno Hill ranges from the 1980s to 2025.
The current mine plan at Keno Hill utilizes estimates of reserves and resources for approximately 16 years of production, through 2040.
Information with respect to the Keno Hill’s production and proven and probable in -situ mineral reserves and costs applicable to sales for the past three years is set forth in the table below . Information with respect to Keno Hill’s average Cash Cost, After By-Product Credits, Per Silver Ounce, AISC, After By-product Credits, Per Silver Ounce were not reported as the mine has not reached commercial production. At the time the mine reaches commercial production, these metrics will be reported.
|
|
Years Ended December 31, |
|
|||||||||
Production |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Ore milled (tons) |
|
|
108,339 |
|
|
|
109,292 |
|
|
|
56,331 |
|
Silver (ounces) |
|
|
3,018,490 |
|
|
|
2,773,873 |
|
|
|
1,502,577 |
|
Lead (tons) |
|
|
3,633 |
|
|
|
2,930 |
|
|
|
1,225 |
|
Zinc (tons) |
|
|
2,247 |
|
|
|
1,507 |
|
|
|
1,139 |
|
|
|
|
|
|
|
|
|
|
|
|||
Costs applicable to sales(1) |
|
$ |
71,883 |
|
|
$ |
81,336 |
|
|
$ |
59,083 |
|
Proven Mineral Reserves(2,3,4) |
|
|
|
|
|
|
|
|
|
|||
Total tons |
|
|
9,100 |
|
|
|
12,900 |
|
|
|
— |
|
Silver (ounces per ton) |
|
|
23.5 |
|
|
|
28.1 |
|
|
|
— |
|
Gold (ounces per ton) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Lead (percent) |
|
|
2.4 |
|
|
|
3.0 |
|
|
|
— |
|
Zinc (percent) |
|
|
6.2 |
|
|
|
1.6 |
|
|
|
— |
|
Contained silver (ounces) |
|
|
235,100 |
|
|
|
364,200 |
|
|
|
— |
|
Contained gold (ounces) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Contained lead (tons) |
|
|
220 |
|
|
|
380 |
|
|
|
— |
|
Contained zinc (tons) |
|
|
600 |
|
|
|
200 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|||
Probable Mineral Reserves(2,3,4) |
|
|
|
|
|
|
|
|
|
|||
Total tons |
|
|
2,103,500 |
|
|
|
2,629,700 |
|
|
|
2,069,400 |
|
Silver (ounces per ton) |
|
|
25.3 |
|
|
|
24.3 |
|
|
|
26.6 |
|
Gold (ounces per ton) |
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
Lead (percent) |
|
|
2.9 |
|
|
|
2.4 |
|
|
|
2.8 |
|
Zinc (percent) |
|
|
2.9 |
|
|
|
2.4 |
|
|
|
2.5 |
|
Contained silver (ounces) |
|
|
53,171,700 |
|
|
|
63,913,700 |
|
|
|
55,068,000 |
|
Contained gold (ounces) |
|
|
15,600 |
|
|
|
17,000 |
|
|
|
13,400 |
|
Contained lead (tons) |
|
|
61,600 |
|
|
|
63,440 |
|
|
|
58,170 |
|
Contained zinc (tons) |
|
|
61,230 |
|
|
|
62,790 |
|
|
|
52,380 |
|
|
|
|
|
|
|
|
|
|
|
|||
Total Proven and Probable Mineral Reserves(2,3,4) |
|
|
|
|
|
|
|
|
|
|||
Total tons |
|
|
2,112,600 |
|
|
|
2,642,600 |
|
|
|
2,069,400 |
|
Silver (ounces per ton) |
|
|
25.3 |
|
|
|
24.3 |
|
|
|
26.6 |
|
Gold (ounces per ton) |
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
Lead (percent) |
|
|
2.9 |
|
|
|
2.4 |
|
|
|
2.8 |
|
Zinc (percent) |
|
|
2.9 |
|
|
|
2.4 |
|
|
|
2.5 |
|
Contained silver (ounces) |
|
|
53,406,800 |
|
|
|
64,277,900 |
|
|
|
55,068,000 |
|
Contained gold (ounces) |
|
|
15,600 |
|
|
|
17,000 |
|
|
|
13,400 |
|
Contained lead (tons) |
|
|
61,820 |
|
|
|
63,820 |
|
|
|
58,170 |
|
Contained zinc (tons) |
|
|
61,830 |
|
|
|
62,990 |
|
|
|
52,380 |
|
25
|
|
December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Silver (per ounce) |
|
$ |
25.00 |
|
|
$ |
22.00 |
|
|
$ |
17.00 |
|
Lead (per pound) |
|
$ |
0.90 |
|
|
$ |
0.90 |
|
|
$ |
0.90 |
|
Zinc (per pound) |
|
$ |
1.15 |
|
|
$ |
1.15 |
|
|
$ |
1.15 |
|
26
Information on in-situ mineral resources excluding mineral reserves for Keno Hill for the past three years is set forth in the following table.
|
|
Years Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Measured Resources (1,2,3) |
|
|
|
|
|
|
|
|
|
|||
Total tons |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Silver (ounces per ton) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Gold (ounces per ton) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Lead (percent) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Zinc (percent) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Silver (ounces) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Gold (ounces) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Lead (tons) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Zinc (tons) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|||
Indicated Resources (1,2,3) |
|
|
|
|
|
|
|
|
|
|||
Total tons |
|
|
582,800 |
|
|
|
1,050,300 |
|
|
|
4,504,200 |
|
Silver (ounces per ton) |
|
|
24.1 |
|
|
|
13.7 |
|
|
|
7.5 |
|
Gold (ounces per ton) |
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
Lead (percent) |
|
|
2.5 |
|
|
|
1.1 |
|
|
|
0.9 |
|
Zinc (percent) |
|
|
6.3 |
|
|
|
2.1 |
|
|
|
3.5 |
|
Silver (ounces) |
|
|
14,039,200 |
|
|
|
14,430,700 |
|
|
|
33,926,400 |
|
Gold (ounces) |
|
|
5,200 |
|
|
|
12,200 |
|
|
|
26,200 |
|
Lead (tons) |
|
|
14,460 |
|
|
|
11,610 |
|
|
|
41,120 |
|
Zinc (tons) |
|
|
36,710 |
|
|
|
22,460 |
|
|
|
157,350 |
|
|
|
|
|
|
|
|
|
|
|
|||
Measured and Indicated Resources (1,2,3) |
|
|
|
|
|
|
|
|
|
|||
Total tons |
|
|
582,800 |
|
|
|
1,050,300 |
|
|
|
4,504,200 |
|
Silver (ounces per ton) |
|
|
24.1 |
|
|
|
13.7 |
|
|
|
7.5 |
|
Gold (ounces per ton) |
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
Lead (percent) |
|
|
2.5 |
|
|
|
1.1 |
|
|
|
0.9 |
|
Zinc (percent) |
|
|
6.3 |
|
|
|
2.1 |
|
|
|
3.5 |
|
Silver (ounces) |
|
|
14,039,200 |
|
|
|
14,430,700 |
|
|
|
33,926,400 |
|
Gold (ounces) |
|
|
5,200 |
|
|
|
12,200 |
|
|
|
26,200 |
|
Lead (tons) |
|
|
14,460 |
|
|
|
11,610 |
|
|
|
41,120 |
|
Zinc (tons) |
|
|
36,710 |
|
|
|
22,460 |
|
|
|
157,350 |
|
|
|
|
|
|
|
|
|
|
|
|||
Inferred Resources (1,2,3) |
|
|
|
|
|
|
|
|
|
|||
Total tons |
|
|
661,800 |
|
|
|
1,299,600 |
|
|
|
2,835,900 |
|
Silver (ounces per ton) |
|
|
16.7 |
|
|
|
14.8 |
|
|
|
11.2 |
|
Gold (ounces per ton) |
|
|
0.01 |
|
|
|
0.00 |
|
|
|
0.00 |
|
Lead (percent) |
|
|
1.9 |
|
|
|
1.3 |
|
|
|
1.1 |
|
Zinc (percent) |
|
|
3.8 |
|
|
|
2.7 |
|
|
|
1.8 |
|
Silver (ounces) |
|
|
11,043,600 |
|
|
|
19,269,800 |
|
|
|
31,790,500 |
|
Gold (ounces) |
|
|
3,500 |
|
|
|
6,100 |
|
|
|
8,600 |
|
Lead (tons) |
|
|
12,450 |
|
|
|
16,450 |
|
|
|
32,040 |
|
Zinc (tons) |
|
|
25,350 |
|
|
|
34,940 |
|
|
|
51,870 |
|
27
Internal Controls on Exploration and Development Drilling Programs
Exploration and development drilling programs are performed using Industry Standard quality control methods for drilling, sampling, and analytical procedures. Standard operating procedure manuals for geology logging, sampling, and assaying are kept at the operations and updated as required. A secure sample chain-of-custody is established to promote the security of samples during transport from the projects to the analytical facilities. All primary analytical laboratories are ISO 9001 certified and sample preparation and analytical procedures are Industry Standard methods for the metals of interest.
Sample batches sent for analysis are controlled by a system of reference samples of known grade inserted into the sample stream and other control samples. Coarse and fine ‘blank,’ sterile, sample materials are used to monitor contamination at the sample preparation and analytical stages; Standard Reference Materials (“SRM”) of known grades are used to measure accuracy of the analytical results; and pulp duplicate samples and coarse reject duplicate samples are used to monitor precision of the analytical results. Blanks and SRM are inserted according to the analytical batch size and overall number of samples but normally result in a 1:10 to 1:20 insertion rate. Duplicate samples are inserted or requested using a similar 1:10 to 1:20 inclusion rate. As a final measure of assay quality, 5% to 10% of the original samples are sent to a second analytical laboratory for check analysis. Periodically, the Company retains experts to perform audits of the commercial laboratories used in the United States, Mexico and Canada.
The main operating properties store data in SQL-based relational database utilities with built-in logic checks that are implemented as new data is imported. Accurate data entry into the database is confirmed by verification upon data entry/import and again before use in final geology interpretation and resource modeling with checks of new data collected during yearly drilling programs.
Geology and mineral control interpretations, grade estimation parameters, grade and density models, reserve estimation parameters, and modifying factors are peer reviewed within the company. Resource grade models are validated using Industry Standard methods and appropriate documentation and reporting are completed to summarize methods and results. All resource and reserve tabulations at the operations are approved by the local management, with their own sets of controls, and then are compiled by the corporate office which also performs its own set of checks on the final numbers.
All personnel responsible for the management of mineral resource and mineral reserve modeling and approval and reporting of mineral resource and mineral reserve statements are QPs with relevant experience in the type of mineralization and deposit under consideration and in the specific type of activity undertaken for the company. All are eligible members or licensees in good standing of a recognized professional organization based on their academic qualifications and experience and comply with professional standards of competence and ethics. We encourage continuing professional development and training for current QPs as well as others in the Company to develop other QPs within the various departments.
As projects advance toward development and production, data density and the geological understanding of the mineral deposit increases. The Company’s internal controls limit some risk in the resource estimation process, but there is inherent risk in resource modeling due to mineral deposit heterogeneity, sample size and distribution, mining style and mining factor assumptions, and mineral processing issues. Independent audits of reserve models from an outside specialist are arranged on a periodic basis for an operating property. The senior technical staff can also determine when changes in mineral resource and reserve models or negative mine reconciliations are material and recommend internal or external auditing of the models and modifying factors.
28
PART II
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following Management’s Discussion and Analysis (“MD&A”) provides information that management believes is relevant to an assessment and understanding of the consolidated financial condition and results of operations of Hecla Mining Company and its subsidiaries (collectively the “Company,” “our,” or “we”). We use certain non-GAAP financial performance measures in our MD&A. For a detailed description of these measures, please see “Non-GAAP Financial Performance Measures” at the end of this item. This item should be read in conjunction with our Consolidated Financial Statements and the notes thereto included in this annual report.
Overview
Hecla Mining Company stands as the 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 2024 silver production in the U.S. and Canada, complemented by meaningful gold production from Greens Creek. We began ramp-up of the Keno Hill mill during the second quarter of 2023. Our strategic positioning in the stable jurisdictions of 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 total consideration with a fair value of $385.7 million ($602.2 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. Our current estimate of that excess, being $11.5 million has been included in determining the fair values 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, the Casa Berardi operation is no longer a reportable segment and its financial results are reflected in the Company’s audited consolidated financial statements as a discontinued operation for all periods presented. Unless otherwise specified, the discussion of financial results within this Item 7 (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.
2025 Highlights
Operational Achievements:
29
Financial Performance:
Our average realized prices for silver, gold and zinc increased in both 2025 and 2024 compared to 2024 and 2023 respectively. See the Consolidated Results of Operations section below for information on our average realized metals prices for 2025, 2024 and 2023. Lead and zinc represent important by-products at all our silver operations, and gold is also a significant by-product at Greens Creek. Copper is a minor by-product credit at Greens Creek.
See the Consolidated Results of Operations section below for a discussion of the factors impacting income applicable to common stockholders for the three years ended December 31, 2025, 2024 and 2023.
Key Issues Impacting our Business
Our current business strategy is to focus our financial and human resources in the following areas:
30
We strive to achieve excellent safety and health performance everywhere we work. We seek to implement this goal by: training employees in safe work practices; establishing, following and improving safety standards; investigating accidents, incidents and losses to avoid recurrence; involving employees in the establishment of safety standards; and participating in the National Mining Association’s CORESafety program. We strive for continuous improvement in mine safety and emergency preparedness by staying current with industry best practices, while implementing measures that are appropriate for our operations and the risks we face. We respond to issues outlined in investigations and inspections by MSHA, the Commission of Labor Standards, Pay Equity and Occupational Health and Safety in Quebec, the Workers' Safety and Compensation Board in the Yukon and the Mexico Ministry of Economy and Mining and continue to evaluate our safety practices. There can be no assurance that our practices will mitigate or eliminate all safety risks. Achieving and maintaining compliance with regulations will be challenging and may increase our operating costs. See Item 1A. Risk Factors - We face substantial governmental regulation, including in the United States the Mine Safety and Health Act, various environmental laws and regulations and the 1872 Mining Law.
A number of key factors may impact the execution of our strategy, including regulatory issues, metals prices and inflationary pressures on input costs. Metals prices can be very volatile and are influenced by a number of factors beyond our control (except on a limited basis through the use of derivative contracts). See Item 7. Critical Accounting Estimates and Note 11 of Notes to Consolidated Financial Statements. While we believe longer-term global economic and industrial trends could result in continued demand for the metals we produce, prices have been volatile and there can be no assurance that current prices will continue.
Volatility in global financial markets and other factors can pose a significant challenge to our ability to access credit and equity markets, should we need to do so. We utilize forward contracts and options to manage exposure to declines in the prices of (i) silver, gold, zinc and lead contained in our concentrates that have been shipped but have not yet settled, and (ii) from time to time silver, zinc and lead that we forecast for future concentrate shipments. In addition, we have in place a $225.0 million revolving credit agreement. As of December 31, 2025, no amount was drawn on the facility, with $6.7 million being used for letters of credit, no amount was drawn on the facility, leaving approximately $218.3 million available for borrowing.
Another challenge for us is the risk associated with environmental litigation and ongoing reclamation activities. As described in Item 1A. Risk Factors and in Note 17 of Notes to Consolidated Financial Statements, it is possible that our estimate of these liabilities may change in the future, affecting our strategic plans. We are involved in various environmental legal matters and the estimate of our environmental liabilities and liquidity needs, as well as our strategic plans, may be significantly impacted as a result of these matters or new matters that may arise. We strive to ensure that our activities are conducted in compliance with applicable laws and regulations and attempt to resolve environmental litigation on terms as favorable to us as possible.
Reserve and resource estimation is a major risk inherent in mining. Our reserve and resource estimates, which underlie (i) our mining and investment plans, (ii) the valuation of a significant portion of our long-term assets and (iii) depreciation, depletion and amortization expense, may change based on economic factors and actual production experience. Until ore is mined and processed, the volumes and grades of our reserves and resources must be considered as estimates. Our reserves are depleted as we mine. Reserves and resources can also change as a result of changes in economic and operating assumptions. See Item 1A. Risk Factors - Our mineral reserve and resource estimates may be imprecise.
31
Consolidated Results of Operations
Total metal sales for the years ended December 31, 2025, 2024 and 2023, and the approximate variances attributed to differences in metals prices, sales volumes and smelter terms, were as follows:
(in thousands) |
|
Silver |
|
|
Gold |
|
|
Base metals |
|
|
Less: smelter and refining charges |
|
|
Total sales of products |
|
|||||
2023 |
|
$ |
301,768 |
|
|
$ |
97,449 |
|
|
$ |
188,958 |
|
|
$ |
(50,909 |
) |
|
$ |
537,266 |
|
Variances - 2024 versus 2023: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Price |
|
|
75,889 |
|
|
|
21,646 |
|
|
|
(2,873 |
) |
|
|
10,743 |
|
|
|
105,405 |
|
Volume |
|
|
35,655 |
|
|
|
(9,850 |
) |
|
|
32,321 |
|
|
|
(2,485 |
) |
|
|
55,641 |
|
Smelter terms |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,378 |
|
|
|
1,378 |
|
2024 |
|
$ |
413,312 |
|
|
$ |
109,245 |
|
|
$ |
218,406 |
|
|
$ |
(41,273 |
) |
|
$ |
699,690 |
|
Variances - 2025 versus 2024: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Price |
|
|
253,523 |
|
|
|
52,723 |
|
|
|
(5,131 |
) |
|
|
17,822 |
|
|
|
318,937 |
|
Volume |
|
|
21,548 |
|
|
|
4,028 |
|
|
|
13,145 |
|
|
|
208 |
|
|
|
38,929 |
|
Smelter terms |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
7,228 |
|
|
|
7,228 |
|
2025 |
|
$ |
688,383 |
|
|
$ |
165,996 |
|
|
$ |
226,420 |
|
|
$ |
(16,015 |
) |
|
$ |
1,064,784 |
|
Average market and realized metals prices for 2025, 2024 and 2023 were as follows:
|
|
|
|
Average price for the year ended December 31, |
|
|||||||||
|
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Silver |
|
Realized price per ounce |
|
$ |
45.25 |
|
|
$ |
28.58 |
|
|
$ |
23.33 |
|
|
|
London PM Fix ($/ounce) |
|
|
39.94 |
|
|
|
28.24 |
|
|
|
23.39 |
|
Gold |
|
Realized price per ounce |
|
|
3,541 |
|
|
|
2,417 |
|
|
|
1,936 |
|
|
|
London PM Fix ($/ounce) |
|
|
3,435 |
|
|
|
2,387 |
|
|
|
1,943 |
|
Lead |
|
Realized price per pound |
|
|
0.94 |
|
|
|
0.97 |
|
|
|
1.03 |
|
|
|
LME Final Cash Buyer ($/pound) |
|
|
0.89 |
|
|
|
0.94 |
|
|
|
0.97 |
|
Zinc |
|
Realized price per pound |
|
|
1.39 |
|
|
|
1.37 |
|
|
|
1.35 |
|
|
|
LME Final Cash Buyer ($/pound) |
|
|
1.30 |
|
|
|
1.26 |
|
|
|
1.20 |
|
Copper |
|
Realized price per pound |
|
|
4.75 |
|
|
|
4.20 |
|
|
|
— |
|
|
|
LME Final Cash Buyer ($/pound) |
|
|
4.51 |
|
|
|
4.15 |
|
|
NA |
|
|
Average realized prices 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 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. For 2025, 2024, and 2023, we recorded net positive price adjustments to provisional settlements of $51.0 million, $22.9 million, and $18.2 million, respectively. The price adjustments related to silver, gold, zinc, and lead contained in our concentrate sales were partially offset by gains and losses on derivative instruments for those metals for each year (see Note 11 of Notes to Consolidated Financial Statements 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 forward contracts discussed above) by the payable quantities of each metal included in products sold during the period.
32
Total metals production and sales volumes for each period are shown in the following table:
|
|
|
|
Year Ended December 31, |
|
|||||||||
|
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Silver - |
|
Ounces produced |
|
|
17,004,172 |
|
|
|
16,145,699 |
|
|
|
14,320,448 |
|
|
|
Payable ounces sold |
|
|
15,213,921 |
|
|
|
14,461,604 |
|
|
|
12,932,440 |
|
Gold - |
|
Ounces produced |
|
|
59,349 |
|
|
|
55,275 |
|
|
|
60,896 |
|
|
|
Payable ounces sold |
|
|
46,873 |
|
|
|
45,201 |
|
|
|
50,334 |
|
Lead - |
|
Tons produced |
|
|
56,130 |
|
|
|
52,515 |
|
|
|
40,347 |
|
|
|
Payable tons sold |
|
|
48,727 |
|
|
|
44,795 |
|
|
|
35,429 |
|
Zinc - |
|
Tons produced |
|
|
68,558 |
|
|
|
66,308 |
|
|
|
60,579 |
|
|
|
Payable tons sold |
|
|
47,553 |
|
|
|
47,593 |
|
|
|
43,050 |
|
Copper - |
|
Tons produced |
|
|
1,804 |
|
|
|
1,874 |
|
|
|
1,823 |
|
|
|
Payable tons sold |
|
|
337 |
|
|
|
50 |
|
|
|
— |
|
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 our products versus the portion of those metals actually paid for by our customers pursuant to of our sales contract terms. 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, costs applicable to sales - temporarily suspended operations, depreciation, depletion and amortization, gross profit (loss), Cash Cost, After By-product Credits, per Ounce (“Cash Cost”) (non-GAAP) and AISC (non-GAAP) at our operating units for 2025, 2024 and 2023 were as follows (in thousands, except for Cash Cost and AISC):
|
|
Silver |
|
|
|
|
||||||||||||||||||
|
|
Greens Creek |
|
|
Lucky Friday |
|
|
Keno Hill |
|
|
Total Silver (3) |
|
|
Other (4) |
|
|
Total |
|
||||||
2025: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Sales |
|
$ |
612,827 |
|
|
$ |
306,640 |
|
|
$ |
145,317 |
|
|
$ |
1,064,784 |
|
|
$ |
39,118 |
|
|
$ |
1,103,902 |
|
Costs applicable to sales (1) |
|
|
(234,221 |
) |
|
|
(122,635 |
) |
|
|
(71,883 |
) |
|
|
(428,739 |
) |
|
|
(38,574 |
) |
|
|
(467,313 |
) |
Depreciation, depletion and amortization |
|
|
(55,960 |
) |
|
|
(51,055 |
) |
|
|
(19,769 |
) |
|
|
(126,784 |
) |
|
|
— |
|
|
|
(126,784 |
) |
Gross profit |
|
$ |
322,646 |
|
|
$ |
132,950 |
|
|
$ |
53,665 |
|
|
$ |
509,261 |
|
|
$ |
544 |
|
|
$ |
509,805 |
|
Cash Cost, After By-product Credits, per Silver or Gold Ounce (2) |
|
$ |
(8.02 |
) |
|
$ |
8.66 |
|
|
|
|
|
$ |
(1.75 |
) |
|
|
|
|
|
|
|||
AISC, After By-product Credits, per Silver or Gold Ounce (2) |
|
$ |
(2.36 |
) |
|
$ |
21.98 |
|
|
|
|
|
$ |
11.28 |
|
|
|
|
|
|
|
|||
2024: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Sales |
|
$ |
421,574 |
|
|
$ |
203,154 |
|
|
$ |
74,962 |
|
|
$ |
699,690 |
|
|
$ |
20,556 |
|
|
$ |
720,246 |
|
Costs applicable to sales (1) |
|
|
(214,677 |
) |
|
|
(103,436 |
) |
|
|
(81,336 |
) |
|
|
(399,449 |
) |
|
|
(20,527 |
) |
|
|
(419,976 |
) |
Costs applicable to sales - temporarily suspended operations (1) |
|
|
— |
|
|
|
(1,583 |
) |
|
|
— |
|
|
|
(1,583 |
) |
|
|
— |
|
|
|
(1,583 |
) |
Depreciation, depletion and amortization |
|
|
(53,450 |
) |
|
|
(41,673 |
) |
|
|
(20,380 |
) |
|
|
(115,503 |
) |
|
|
— |
|
|
|
(115,503 |
) |
Gross profit (loss) |
|
$ |
153,447 |
|
|
$ |
56,462 |
|
|
$ |
(26,754 |
) |
|
$ |
183,155 |
|
|
$ |
29 |
|
|
$ |
183,184 |
|
Cash Cost, After By-product Credits, per Silver or Gold Ounce (2) |
|
$ |
(0.05 |
) |
|
$ |
7.80 |
|
|
|
|
|
$ |
2.72 |
|
|
|
|
|
|
|
|||
AISC, After By-product Credits, per Silver or Gold Ounce (2) |
|
$ |
5.65 |
|
|
$ |
16.50 |
|
|
|
|
|
$ |
13.06 |
|
|
|
|
|
|
|
|||
2023: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Sales |
|
$ |
384,504 |
|
|
$ |
116,284 |
|
|
$ |
35,518 |
|
|
$ |
536,306 |
|
|
$ |
6,243 |
|
|
$ |
542,549 |
|
Costs applicable to sales (1) |
|
|
(205,900 |
) |
|
|
(59,859 |
) |
|
|
(59,083 |
) |
|
|
(324,842 |
) |
|
|
(6,200 |
) |
|
|
(331,042 |
) |
Costs applicable to sales - temporarily suspended operations (1) |
|
|
— |
|
|
|
(20,489 |
) |
|
|
— |
|
|
|
(20,489 |
) |
|
|
— |
|
|
|
(20,489 |
) |
Depreciation, depletion and amortization |
|
|
(53,995 |
) |
|
|
(29,384 |
) |
|
|
(6,228 |
) |
|
|
(89,607 |
) |
|
|
(140 |
) |
|
|
(89,747 |
) |
Gross profit (loss) |
|
$ |
124,609 |
|
|
$ |
6,552 |
|
|
$ |
(29,793 |
) |
|
$ |
101,368 |
|
|
$ |
(97 |
) |
|
$ |
101,271 |
|
Cash Cost, After By-product Credits, per Silver or Gold Ounce (2) |
|
$ |
2.53 |
|
|
$ |
5.51 |
|
|
|
|
|
$ |
3.23 |
|
|
|
|
|
|
|
|||
AISC, After By-product Credits, per Silver or Gold Ounce (2) |
|
$ |
7.14 |
|
|
$ |
12.21 |
|
|
|
|
|
$ |
11.76 |
|
|
|
|
|
|
|
|||
33
While revenue from zinc, lead, and gold 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 due to the fact that 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 for Greens Creek, Lucky Friday, and Keno Hill we consider zinc, lead, gold, and copper to be by-products of our silver production, the values of these metals from Greens Creek and Lucky Friday only 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 is in the production ramp-up phase and 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, it's 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 not facilitate a meaningful comparison of our performance versus that of our peers.
34
For the year ended December 31, 2025 and 2024, we reported income from continuing operations of $258.1 million and $50.2 million, respectively, and a loss from continuing operations of $40.2 million in 2023. The following factors contributed to those differences:
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
(Loss) gain on derivative contracts |
|
$ |
(43,568 |
) |
|
$ |
(162 |
) |
|
$ |
1,978 |
|
Unrealized gain (loss) on investments in equity securities |
|
|
40,914 |
|
|
|
3,703 |
|
|
|
(243 |
) |
Gain on disposition or exchange of investments |
|
|
10,986 |
|
|
|
— |
|
|
|
— |
|
Total fair value adjustments, net |
|
$ |
8,332 |
|
|
$ |
3,541 |
|
|
$ |
1,735 |
|
35
Greens Creek
Dollars are in thousands (except per ounce and per ton amounts) |
|
Years Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Sales |
|
$ |
612,827 |
|
|
$ |
421,574 |
|
|
$ |
384,504 |
|
Costs applicable to sales (1) |
|
|
(234,221 |
) |
|
|
(214,677 |
) |
|
|
(205,900 |
) |
Depreciation, depletion and amortization |
|
|
(55,960 |
) |
|
|
(53,450 |
) |
|
|
(53,995 |
) |
Gross profit |
|
$ |
322,646 |
|
|
$ |
153,447 |
|
|
$ |
124,609 |
|
|
|
|
|
|
|
|
|
|
|
|||
Tons of ore milled |
|
|
871,659 |
|
|
|
895,318 |
|
|
|
914,796 |
|
Production: |
|
|
|
|
|
|
|
|
|
|||
Silver (ounces) |
|
|
8,724,996 |
|
|
|
8,480,877 |
|
|
|
9,731,752 |
|
Gold (ounces) |
|
|
59,349 |
|
|
|
55,275 |
|
|
|
60,896 |
|
Lead (tons) |
|
|
18,213 |
|
|
|
18,320 |
|
|
|
19,578 |
|
Zinc (tons) |
|
|
51,387 |
|
|
|
51,288 |
|
|
|
51,496 |
|
Copper (tons) |
|
|
1,804 |
|
|
|
1,874 |
|
|
|
1,823 |
|
Payable metal quantities sold: |
|
|
|
|
|
|
|
|
|
|||
Silver (ounces) |
|
|
7,375,295 |
|
|
|
7,331,502 |
|
|
|
8,493,040 |
|
Gold (ounces) |
|
|
46,873 |
|
|
|
45,201 |
|
|
|
49,790 |
|
Lead (tons) |
|
|
13,585 |
|
|
|
13,706 |
|
|
|
15,247 |
|
Zinc (tons) |
|
|
35,957 |
|
|
|
36,725 |
|
|
|
36,042 |
|
Copper (tons) |
|
|
337 |
|
|
|
50 |
|
|
|
— |
|
Ore grades: |
|
|
|
|
|
|
|
|
|
|||
Silver ounces per ton |
|
|
12.6 |
|
|
|
12.0 |
|
|
|
13.3 |
|
Gold ounces per ton |
|
|
0.092 |
|
|
|
0.086 |
|
|
|
0.089 |
|
Lead percent |
|
|
2.5 |
|
|
|
2.5 |
|
|
|
2.6 |
|
Zinc percent |
|
|
6.6 |
|
|
|
6.4 |
|
|
|
6.4 |
|
Copper percent |
|
|
0.3 |
|
|
|
0.3 |
|
|
|
0.3 |
|
Total production cost per ton |
|
$ |
249.77 |
|
|
$ |
216.15 |
|
|
$ |
204.20 |
|
Cash Cost, After By-product Credits, per Silver Ounce (2) |
|
$ |
(8.02 |
) |
|
$ |
(0.05 |
) |
|
$ |
2.53 |
|
AISC, After By-Product Credits, per Silver Ounce (2) |
|
$ |
(2.36 |
) |
|
$ |
5.65 |
|
|
$ |
7.14 |
|
Capital additions |
|
$ |
54,617 |
|
|
$ |
47,795 |
|
|
$ |
43,542 |
|
Gross profit increased by $169.2 million to $322.6 million in 2025 from $153.4 million in 2024, due to higher realized prices for all metals sold (other than lead) and higher sales volumes, except for lead and zinc which drove record annual revenues, partially offset by higher production costs which were primarily attributable to higher labor, contractor costs and materials and consumables. See Item 1A. Risk Factors - Our profitability could be affected by inflation, including the prices of other commodities for a discussion of certain risks related to our operations profitability.
Gross profit increased by $28.8 million to $153.4 million in 2024 from $124.6 million in 2023, due to higher realized prices for all metals sold other than lead, partly offset by lower sales volumes for all metals, except zinc, and higher production costs which primarily consist of higher labor and contractor costs and higher equipment maintenance. See Item 1A. Risk Factors - Our profitability could be affected by inflation, including the prices of other commodities for a discussion of certain risks related to our operations profitability.
36
Capital additions increased by $6.8 million in 2025 to $54.6 million compared to 2024. Significant components of the 2025 capital additions were $17.9 million on mine and primary ore access development, $14.0 million on mine equipment, $7.7 million on surface equipment and infrastructure, $5.8 million on mill improvements and $4.0 million of definition drilling.
The chart below illustrates the factors contributing to the variances in Cash Cost, After By-product Credits, Per Silver Ounce for 2025 compared to 2024 and 2023:
The following table summarizes the components of Cash Cost, After By-product Credits, per Silver Ounce:
|
|
Years Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Cash Cost, Before By-product Credits, per Silver Ounce |
|
$ |
26.64 |
|
|
$ |
27.19 |
|
|
$ |
24.85 |
|
By-product credits per silver ounce |
|
|
(34.66 |
) |
|
|
(27.24 |
) |
|
|
(22.32 |
) |
Cash Cost, After By-product Credits, per Silver Ounce |
|
$ |
(8.02 |
) |
|
$ |
(0.05 |
) |
|
$ |
2.53 |
|
The following table summarizes the components of AISC, After By-product Credits, per Silver Ounce:
|
|
Years Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
AISC, Before By-product Credits, per Silver Ounce |
|
$ |
32.30 |
|
|
$ |
32.89 |
|
|
$ |
29.46 |
|
By-product credits per silver ounce |
|
|
(34.66 |
) |
|
|
(27.24 |
) |
|
|
(22.32 |
) |
AISC, After By-product Credits, per Silver Ounce |
|
$ |
(2.36 |
) |
|
$ |
5.65 |
|
|
$ |
7.14 |
|
The decrease in Cash Cost, After By-product Credits and AISC, After By-product Credits per Silver Ounce in 2025 compared to 2024 was primarily due to higher by-product credits, primarily due to higher realized gold prices and higher silver production. The decrease in Cash Cost, After By-product Credits, per Silver Ounce in 2024 compared to 2023 was primarily due to higher by-product credits, primarily due to higher realized gold prices, partly offset by lower silver production due to 7 days of unplanned maintenance on the Semi-Autogenous Grinding ("SAG") mill variable frequency drive and lower grade material mined and higher production costs primarily related to higher labor and contractor costs driven by inflation and higher equipment maintenance costs. AISC, After By-product Credits, decreased due to lower cash costs per ounce, partly offset by higher sustaining capital expenditures in 2024 compared to 2023.
37
Lucky Friday
Dollars are in thousands (except per ounce and per ton amounts) |
|
Years Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Sales |
|
$ |
306,640 |
|
|
$ |
203,154 |
|
|
$ |
116,284 |
|
Costs applicable to sales (1) |
|
|
(122,635 |
) |
|
|
(103,436 |
) |
|
|
(59,859 |
) |
Costs applicable to sales - temporarily suspended operations (1)(2) |
|
|
— |
|
|
|
(1,583 |
) |
|
|
(20,489 |
) |
Depreciation, depletion and amortization (2) |
|
|
(51,055 |
) |
|
|
(41,673 |
) |
|
|
(29,384 |
) |
Gross profit |
|
$ |
132,950 |
|
|
$ |
56,462 |
|
|
$ |
6,552 |
|
|
|
|
|
|
|
|
|
|
|
|||
Tons of ore milled |
|
|
427,048 |
|
|
|
406,541 |
|
|
|
231,129 |
|
Production: |
|
|
|
|
|
|
|
|
|
|||
Silver (ounces) |
|
|
5,260,686 |
|
|
|
4,890,949 |
|
|
|
3,086,119 |
|
Lead (tons) |
|
|
34,284 |
|
|
|
31,265 |
|
|
|
19,543 |
|
Zinc (tons) |
|
|
14,924 |
|
|
|
13,513 |
|
|
|
7,944 |
|
Payable metal quantities sold: |
|
|
|
|
|
|
|
|
|
|||
Silver (ounces) |
|
|
4,925,162 |
|
|
|
4,506,632 |
|
|
|
3,020,116 |
|
Lead (tons) |
|
|
31,828 |
|
|
|
28,577 |
|
|
|
19,079 |
|
Zinc (tons) |
|
|
11,596 |
|
|
|
9,735 |
|
|
|
6,160 |
|
Ore grades: |
|
|
|
|
|
|
|
|
|
|||
Silver ounces per ton |
|
|
13.0 |
|
|
|
12.7 |
|
|
|
14.0 |
|
Lead percent |
|
|
8.5 |
|
|
|
8.2 |
|
|
|
8.9 |
|
Zinc percent |
|
|
4.1 |
|
|
|
3.9 |
|
|
|
4.1 |
|
Total production cost per ton |
|
$ |
272.09 |
|
|
$ |
245.19 |
|
|
$ |
218.45 |
|
Cash Cost, After By-product Credits, per Silver Ounce (3) |
|
$ |
8.66 |
|
|
$ |
7.80 |
|
|
$ |
5.51 |
|
AISC, After By-product Credits, per Silver Ounce (3) |
|
$ |
21.98 |
|
|
$ |
16.50 |
|
|
$ |
12.21 |
|
Capital additions |
|
$ |
72,933 |
|
|
$ |
49,592 |
|
|
$ |
65,337 |
|
Gross profit in 2025 of $133.0 million, was $76.5 million higher than 2024, primarily due to higher realized prices for silver, and higher sales volumes for all metals produced driven by record production and the suspension of mining operations mentioned above. However, the benefit of higher production and prices has been partly offset by higher costs, reflected in higher production costs per ton which have increased by 11%. For the year, the higher costs relate to: (i) hourly employee profit sharing costs due to higher silver prices and production; (ii) property and liability insurance resulting from higher asset values and coverage limits; (iii) higher employee medical costs related to headcount growth and inflation in medical care costs; (iv) consumables and repairs to support increased production; (v) an increase in mine hourly headcount to reduce reliance on more expensive contractors and support higher production; (vi) higher equipment maintenance costs related to parts as the mine continued to execute our equipment maintenance standards while supporting increased tonnage; and (vii) higher waste rock removal haulage costs.
While certain cost elements will persist as the mine maintains steady and consistent production, we have identified potential cost mitigation plans. These plans include further reduction of contractors, mining method optimization to improve production efficiency and reduction of consumables usage, mine and mill infrastructure upgrades to increase production and reduce maintenance, and consolidation of sourcing of some high-volume consumables to improve pricing. However, there can be no assurance these efforts will be successful in reducing costs or offsetting the potential future impacts of inflation or other factors impacting profitability.
During August 2023, the production at the mine was suspended due to a fire that occurred while repairing an unused station in the #2 ventilation shaft. It was determined that a secondary egress needed to be developed and as a result, the mine did not restart production until January 9, 2024, and ramped up to full production during the first quarter. The Company had property and business interruption insurance coverage with an underground sub-limit of $50.0 million, and received the full coverage amount of $50.0 million
38
in 2024. The discussion of Lucky Friday's results below for the years ended December 31, 2024 and 2023 has been impacted by this prior suspension of operations.
Gross profit in 2024 of $56.5 million, was $49.9 million higher than 2023, primarily due to higher realized prices for silver, and higher sales volumes for all metals produced due to the suspension of mining operations mentioned above. For the year ended December 31, 2024, $1.6 million of site specific suspension costs were included within costs applicable to sales - temporarily suspended operations on our consolidated statements of operations and comprehensive income (loss), compared to $20.5 million in 2023.
Total capital additions increased by $23.3 million in 2025 to $72.9 million compared to 2024 due to significant projects including $24.5 million for development, $12.1 million for surface cooling project, $11.7 million for pond 5 construction, $6.8 million for definition drilling, $4.4 million for shaft renovation, $2.1 million for bolters, $1.9 million for ramp work and $1.5 million for jumbo replacements.
The chart below illustrates the factors contributing to the variances in Cash Cost, After By-product Credits, Per Silver Ounce for 2025, 2024 and 2023.
The following table summarizes the components of Cash Cost, After By-product Credits, per Silver Ounce:
|
|
Years Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Cash Cost, Before By-product Credits, per Silver Ounce |
|
$ |
25.00 |
|
|
$ |
24.48 |
|
|
|
21.45 |
|
By-product credits per silver ounce |
|
|
(16.34 |
) |
|
|
(16.68 |
) |
|
|
(15.94 |
) |
Cash Cost, After By-product Credits, per Silver Ounce |
|
$ |
8.66 |
|
|
$ |
7.80 |
|
|
$ |
5.51 |
|
The following table summarizes the components of AISC, After By-product Credits, per Silver Ounce:
|
|
Years Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
AISC, Before By-product Credits, per Silver Ounce |
|
$ |
38.32 |
|
|
$ |
33.18 |
|
|
$ |
28.15 |
|
By-product credits per silver ounce |
|
|
(16.34 |
) |
|
|
(16.68 |
) |
|
|
(15.94 |
) |
AISC, After By-product Credits, per Silver Ounce |
|
$ |
21.98 |
|
|
$ |
16.50 |
|
|
$ |
12.21 |
|
The increase in Cash Cost and AISC, each After By-product Credits, per Silver Ounce in 2025 compared to 2024 was due to higher production costs, and higher sustaining capital for AISC, partly offset by higher silver production.
39
The increase in Cash Cost and AISC, each After By-product Credits, per Silver Ounce in 2024 compared to 2023 was due to higher production costs, and higher sustaining capital for AISC, partly offset by higher silver production and higher by-product credits.
Keno Hill
Dollars are in thousands (except per ounce and per ton amounts) |
|
Year Ended |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Sales |
|
$ |
145,317 |
|
|
$ |
74,962 |
|
|
$ |
35,518 |
|
Costs applicable to sales (1)(2) |
|
|
(71,883 |
) |
|
|
(81,336 |
) |
|
|
(59,083 |
) |
Depreciation, depletion and amortization (2) |
|
|
(19,769 |
) |
|
|
(20,380 |
) |
|
|
(6,228 |
) |
Gross profit (loss) |
|
$ |
53,665 |
|
|
$ |
(26,754 |
) |
|
$ |
(29,793 |
) |
Tons of ore milled |
|
|
108,339 |
|
|
|
109,292 |
|
|
|
56,331 |
|
Production: |
|
|
|
|
|
|
|
|
|
|||
Silver (ounces) |
|
|
3,018,490 |
|
|
|
2,773,873 |
|
|
|
1,502,577 |
|
Lead (tons) |
|
|
3,633 |
|
|
|
2,930 |
|
|
|
1,225 |
|
Zinc (tons) |
|
|
2,247 |
|
|
|
1,507 |
|
|
|
1,139 |
|
Payable metal quantities sold: |
|
|
|
|
|
|
|
|
|
|||
Silver (ounces) |
|
|
2,925,368 |
|
|
|
2,623,469 |
|
|
|
1,419,173 |
|
Lead (tons) |
|
|
3,314 |
|
|
|
2,513 |
|
|
|
848 |
|
Zinc (tons) |
|
|
1,696 |
|
|
|
1,132 |
|
|
|
1,102 |
|
Ore grades: |
|
|
|
|
|
|
|
|
|
|||
Silver ounces per ton |
|
|
29.0 |
|
|
|
26.2 |
|
|
|
27.7 |
|
Lead percent |
|
|
3.6 |
% |
|
|
2.8 |
% |
|
|
2.3 |
% |
Zinc percent |
|
|
2.6 |
% |
|
|
1.6 |
% |
|
|
2.5 |
% |
Capital additions |
|
$ |
58,192 |
|
|
$ |
54,869 |
|
|
$ |
44,672 |
|
We have not disclosed cost per ounce statistics for the Keno Hill operation as it is in the production ramp-up phase and 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 operations as part of the Alexco 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 throughput during the year ended December 31, 2025, was 297 tons per day (the mine is currently permitted to a maximum of an average of 440 tons per day), with silver grades milled of 29.0 ounces per ton. In 2025, the mill relied on existing ore stockpiles as the mine continues to focus on development and ramp-up to higher tonnage rates with mining rates of 297 tons per day, with material sourced from both the Bermingham and Flame and Moth deposits. Mill throughput, while currently steady, has been negatively impacted by last year's events as described below.
During the twelve months ended December 31, 2025 and 2024, Keno Hill recorded sales of $145.3 million and $75.0 million, respectively, with the increase due primarily to higher metals sales volumes and realized prices. As a result of higher revenues, Keno Hill generated gross profit of $53.7 million during the twelve months ended December 31, 2025, compared to a gross loss of $26.8 million during the twelve months ended December 31, 2024. During 2025, Keno Hill recorded capital additions of $58.2 million, of which $32.8 million related to mine development, $6.7 million for a backfill plant, $5.2 million related to the dry stack tailings facility ("DSTF"), $4.6 million for surface and general plant additions and $1.4 million for definition drilling. During 2024, Capital additions were $54.9 million, of which $28.1 million related to mine development, $8.8 million related to the DSTF, $5.9 million related to mine mobile equipment, $3.2 million for camp upgrades and $2.9 million for the surface backfill plant.
During 2023, Keno Hill recorded sales and a gross loss of $29.8 million related to the concentrate produced and sold during ramp-up which commenced during the second quarter of 2023. $4.7 million of site specific exploration costs were included within Exploration and pre-development as reported on our consolidated statements of operations and comprehensive (loss) income. Capital additions were $44.7 million, of which $29.6 million related to mine development and $11.3 million to mobile equipment purchases, crusher modifications and camp upgrades.
40
From commencement of production until late August, 2024, ore production and mill throughput generally increased as planned, leading to increased levels of production (though still not reaching the permitted capacity at the mill). However, starting in mid-2024 and continuing today, Keno Hill has been impacted by external events which have affected permitting, projects and production, and delayed our ability to reach sustained, profitable production. In late June 2024, an unrelated, third party, Victoria Gold, experienced a heap leach failure at its Eagle Mine which is located near Keno Hill. This incident had several immediate and ongoing impacts on our operations. The primary impact was that we were forced to suspend milling operations at Keno Hill between August 27 and October 26, 2024 due to delays in receiving authorizations and permits because the focus of the Yukon Government and the First Nation of Na-Cho Nyäk Dun (“FNNND”) on the Eagle Mine incident response and not on routine permitting matters. Mill operations and design and construction projects resumed during the fourth quarter of 2024. Our original planned schedule for permitting and projects has been extended, but we are taking steps, including working with regulators, to establish a viable schedule for our operational plans.
An ongoing impact of the Eagle Mine incident is the FNNND's public position on mining, which has evolved from a call to halt all mining activity to support of environmentally responsible mining practices. We continue to strengthen our partnership with the FNNND - which is important because Keno Hill is within their Traditional Territory - through enhanced environmental stewardship and community engagement initiatives, building on their support for responsible mining practices.
Then, starting in late October 2024, Keno Hill began experiencing power curtailments when the utility, Yukon Energy, experienced a turbine failure at its Aishihik hydroelectric plant in Whitehorse. That failure and Yukon Energy's resulting focus on line maintenance, combined with cold temperatures in the Yukon (and the resulting increase in demand for power), caused Yukon Energy to reduce power to Keno Hill, resulting in the operation's inability to fully power the mine and mill on several occasions in late 2024 and for 8 days in the first quarter of 2025. These power constraints impacted approximately 130,000 ounces of silver production and labor costs for idled employees of approximately $0.5 million in 2025. During December 2025, due to extreme cold weather, Yukon Energy again curtailed power supply to us for 16 days, which continued through December 30, 2025.
Permitting is one of the most important factors in our ability to reach sustainable, profitable production at Keno Hill. Increased production means a need for increased tailings storage, waste storage, water treatment and discharge, camp space and reliable power, all of which are typical requirements for mines in the expansion phase. These projects require new or modified permits, as well as the capital to implement them. Although we continue to make progress on these ordinary-course permitting matters, we have yet to make up for the delays described above. In addition, as we develop new zones for ore production at Keno Hill (and our other mines), we are frequently confronted with challenging conditions such as rock quality and ground water volumes. Currently, we are developing new headings at Keno Hill to supplement existing, or replace mined out headings. At some of these new headings, we are encountering more groundwater than expected. The mine's water license has limits on the amount of water that can be discharged from the mine. Although we currently are within permitted water discharge limits, if production from these new zones would cause water discharges greater than the license allows we will need to make alternative arrangements, which likely includes seeking an amendment to our current water license. There can be no assurances that the Yukon Water Board will grant such an amendment. If we confirm that continued mining in these new zones would lead to discharges in excess of license limits and are unable to amend our license in a timely manner, our options would then include developing a different operating plan to reduce discharges and/or curtailing production to remain within existing permitted discharge limits. Although we consider it unlikely, if none of these potential solutions is achieved, it is possible we would consider pausing production and other mining activities at the impacted areas and reassess our permitting strategy and other future operational aspects of the mine. See the Item 1A. Risk Factors - "We are required to obtain governmental permits and other approvals in order to conduct mining operations."
We also continue to face operational challenges such as work force availability, dilution, execution of projects, limited camp space, and the ramp-up of ERDC environmental remediation activities (which adds incremental demand on Keno Hill's infrastructure and resources, most notably camp space). As a result, we project 2026 silver production to be comparable to 2025 levels. The projected flat production levels at Keno Hill for 2026 should allow us to focus on (i) permitting, (ii) stakeholder outreach and ensuring we have local support, (iii) projects such as tailings storage expansion and the construction of a cemented tails batch plant, (iv) mine development and (v) meeting the above-mentioned operational challenges.
As stated above, Keno Hill has generated profits at current throughput rates and prices. Our immediate focus is to advance permits and successfully execute infrastructure projects, with the goal of putting the mine on a path toward achieving its current permitted capacity of 440 tons per day which, at current prices, we project would generate sustained, positive free cash flow, while preserving expansion optionality beyond 440 tons per day. However, currently, 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). To reach 440 tons per day throughput, we would need to continue to mine ore from both the Bermingham deposit and the lower grade Flame & Moth deposit. Achieving 440 or higher tons per day would require targeted infrastructure investments, obtaining permits, executing projects, mine development and maintaining social license to operate. If any one of these were not to occur, or if prices were to decrease from our current budgeted prices, Keno Hill as currently configured would not be profitable, and placing the operation on care and maintenance would be an option. See Item 1A. Risk Factor - We may not realize all of the anticipated benefits from our acquisitions, including our 2022 acquisition of Alexco.
41
Corporate Matters
Employee Benefit Plans
Our defined benefit pension plans, while providing a significant benefit to our employees, have historically represented a significant liability to us. At December 31, 2025, our plans are in an underfunded status of $0.1 million. We do not expect to be required to contribute to our defined benefit plans in 2026, but we may choose to do so. See Note 7 of Notes to Consolidated Financial Statements for more information. We periodically examine the defined benefit pension plans and supplemental excess retirement plan for affordability and competitiveness.
Income and Mining Taxes
Our deferred tax assets and liabilities are measured at the currently enacted tax rates that are expected to apply in years in which they are expected to be paid for or realized. Each reporting period we assess the realizability of our tax assets. In assessing the need for a valuation allowance, we evaluate all significant available positive and negative evidence, including historical operating results, estimates of future sources of taxable income, carry-forward periods available, the existence of prudent and feasible tax planning strategies and other relevant factors.
Our organizational structure requires us to have two U.S. tax groups that do not consolidate. One of those U.S. tax groups is Hecla Mining Company and subsidiaries (“Hecla U.S. Group”) which has a net deferred tax liability of $117.2 million at December 31, 2025 compared to a net deferred tax liability of $21.7 million at December 31, 2024. The increase of $95.5 million is primarily related to taxable income and the utilization of net operating losses carried forward from prior periods as well as the election of bonus depreciation and other accelerated tax deductions.
Klondex Mines Ltd (“Klondex”) is the other separate U.S. tax group (“Nevada U.S. Group”) that has a net deferred tax liability of $30.6 million and $30.8 million at December 31, 2025 and 2024, respectively.
Our net Canadian deferred tax liability at December 31, 2025 was $9.8 million, an increase of $2.1 million from the $7.7 million net deferred tax liability at December 31, 2024. The increase was due to higher Canadian taxable income.
Our Mexican net deferred tax asset at December 31, 2025 remains at zero with no change from December 31, 2024. The valuation allowance increased to $13.7 million.
As a result of the Tax Cuts and Jobs Act (“TCJA”) enacted in December 2017, under Internal Revenue Code Section 174, a requirement to capitalize and amortize research and experimental expenditures for tax years beginning after December 31, 2021 is now effective. This modification has not had a material impact.
As discussed in Note 8 of Notes to Consolidated Financial Statements, our effective tax rate for 2025 was 28%, reflecting a tax expense of $98.7 million on pre-tax income of $356.8 million, compared to 44% for 2024, reflecting a tax expense of $40.0 million on pre-tax income of $90.2 million. We are subject to income taxes in the United States and other foreign jurisdictions. The overall effective tax rate will continue to be dependent upon the geographic distribution of our earnings in different jurisdictions, the U.S. deduction for percentage depletion, fluctuation in foreign currency exchange rates and deferred tax asset valuation allowance changes. As a result, the 2025 effective tax rate varies significantly from that of 2024. The other relevant provisions of the TCJA that became effective in 2018 consist of global intangible low-taxed income tax ("GILTI"), base erosion and anti-abuse tax ("BEAT") and foreign-derived intangible income ("FDII"). Hecla U.S. Group recorded a current expense for GILTI in 2025 due to earnings in foreign jurisdictions. The BEAT and FDII provisions have not had a material impact.
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)
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 years ended December 31, 2025, 2024, and 2023.
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.
42
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.
We have not disclosed cost per ounce statistics for the Keno Hill operation as it is in the production ramp-up phase and 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.
Cash Cost, Before By-product Credits and AISC, Before By-product Credits 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.
In thousands (except per ounce amounts) |
|
Year Ended December 31, 2025 |
|
|||||||||||||||||
|
|
Greens Creek |
|
|
Lucky Friday |
|
|
Keno Hill |
|
|
Corporate(2) |
|
|
Total Silver |
|
|||||
Costs applicable to sales (3) |
|
$ |
234,221 |
|
|
$ |
122,635 |
|
|
$ |
71,883 |
|
|
$ |
— |
|
|
$ |
428,739 |
|
Treatment costs |
|
|
948 |
|
|
|
9,734 |
|
|
|
— |
|
|
|
— |
|
|
|
10,682 |
|
Change in product inventory |
|
|
(1,258 |
) |
|
|
(6 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1,264 |
) |
Reclamation and other costs |
|
|
(1,502 |
) |
|
|
(857 |
) |
|
|
— |
|
|
|
— |
|
|
|
(2,359 |
) |
Exclusion of Keno Hill cash costs (5) |
|
|
— |
|
|
|
— |
|
|
|
(71,883 |
) |
|
|
— |
|
|
|
(71,883 |
) |
Cash Cost, Before By-product Credits (1) |
|
|
232,409 |
|
|
|
131,506 |
|
|
|
— |
|
|
|
— |
|
|
|
363,915 |
|
Reclamation |
|
|
3,029 |
|
|
|
780 |
|
|
|
— |
|
|
|
— |
|
|
|
3,809 |
|
Sustaining capital |
|
|
46,362 |
|
|
|
69,316 |
|
|
|
— |
|
|
|
5,165 |
|
|
|
120,843 |
|
General and administrative |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
57,626 |
|
|
|
57,626 |
|
AISC, Before By-product Credits (1) |
|
|
281,800 |
|
|
|
201,602 |
|
|
|
— |
|
|
|
62,791 |
|
|
|
546,193 |
|
By-product credits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Zinc |
|
|
(93,495 |
) |
|
|
(28,939 |
) |
|
|
— |
|
|
|
— |
|
|
|
(122,434 |
) |
Gold |
|
|
(180,497 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(180,497 |
) |
Lead |
|
|
(24,963 |
) |
|
|
(57,036 |
) |
|
|
— |
|
|
|
— |
|
|
|
(81,999 |
) |
Copper |
|
|
(3,465 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,465 |
) |
Total By-product credits |
|
|
(302,420 |
) |
|
|
(85,975 |
) |
|
|
— |
|
|
|
— |
|
|
|
(388,395 |
) |
Cash Cost, After By-product Credits |
|
$ |
(70,011 |
) |
|
$ |
45,531 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(24,480 |
) |
AISC, After By-product Credits |
|
$ |
(20,620 |
) |
|
$ |
115,627 |
|
|
$ |
— |
|
|
$ |
62,791 |
|
|
$ |
157,798 |
|
Divided by silver ounces produced |
|
|
8,725 |
|
|
|
5,261 |
|
|
|
|
|
|
|
|
|
13,986 |
|
||
Cash Cost, Before By-product Credits, per Silver Ounce |
|
$ |
26.64 |
|
|
$ |
25.00 |
|
|
|
|
|
|
|
|
$ |
26.02 |
|
||
By-product credits per ounce |
|
|
(34.66 |
) |
|
|
(16.34 |
) |
|
|
|
|
|
|
|
|
(27.77 |
) |
||
Cash Cost, After By-product Credits, per Silver Ounce |
|
$ |
(8.02 |
) |
|
$ |
8.66 |
|
|
|
|
|
|
|
|
$ |
(1.75 |
) |
||
AISC, Before By-product Credits, per Silver Ounce |
|
$ |
32.30 |
|
|
$ |
38.32 |
|
|
|
|
|
|
|
|
$ |
39.05 |
|
||
By-product credits per ounce |
|
|
(34.66 |
) |
|
|
(16.34 |
) |
|
|
|
|
|
|
|
|
(27.77 |
) |
||
AISC, After By-product Credits, per Silver Ounce |
|
$ |
(2.36 |
) |
|
$ |
21.98 |
|
|
|
|
|
|
|
|
$ |
11.28 |
|
||
43
In thousands (except per ounce amounts) |
|
Year Ended December 31, 2025 |
|
|||||||||
|
|
Total Silver |
|
|
Other(4) |
|
|
Total |
|
|||
Costs applicable to sales (3) |
|
$ |
428,739 |
|
|
$ |
38,574 |
|
|
$ |
467,313 |
|
Treatment costs |
|
|
10,682 |
|
|
|
— |
|
|
|
10,682 |
|
Change in product inventory |
|
|
(1,264 |
) |
|
|
— |
|
|
|
(1,264 |
) |
Reclamation and other costs |
|
|
(2,359 |
) |
|
|
— |
|
|
|
(2,359 |
) |
Exclusion of Keno Hill cash costs (5) |
|
|
(71,883 |
) |
|
|
— |
|
|
|
(71,883 |
) |
Exclusion of Other costs |
|
|
— |
|
|
|
(38,574 |
) |
|
|
(38,574 |
) |
Cash Cost, Before By-product Credits (1) |
|
|
363,915 |
|
|
|
— |
|
|
|
363,915 |
|
Reclamation and other costs |
|
|
3,809 |
|
|
|
— |
|
|
|
3,809 |
|
Sustaining capital |
|
|
120,843 |
|
|
|
— |
|
|
|
120,843 |
|
General and administrative |
|
|
57,626 |
|
|
|
— |
|
|
|
57,626 |
|
AISC, Before By-product Credits (1) |
|
|
546,193 |
|
|
|
— |
|
|
|
546,193 |
|
By-product credits: |
|
|
|
|
|
|
|
|
|
|||
Zinc |
|
|
(122,434 |
) |
|
|
— |
|
|
|
(122,434 |
) |
Gold |
|
|
(180,497 |
) |
|
|
— |
|
|
|
(180,497 |
) |
Lead |
|
|
(81,999 |
) |
|
|
— |
|
|
|
(81,999 |
) |
Copper |
|
|
(3,465 |
) |
|
|
— |
|
|
|
(3,465 |
) |
Total By-product credits |
|
|
(388,395 |
) |
|
|
— |
|
|
|
(388,395 |
) |
Cash Cost, After By-product Credits |
|
$ |
(24,480 |
) |
|
$ |
— |
|
|
$ |
(24,480 |
) |
AISC, After By-product Credits |
|
$ |
157,798 |
|
|
$ |
— |
|
|
$ |
157,798 |
|
Divided by ounces produced |
|
|
13,986 |
|
|
|
|
|
|
|
||
Cash Cost, Before By-product Credits, per Ounce |
|
$ |
26.02 |
|
|
|
|
|
|
|
||
By-product credits per ounce |
|
|
(27.77 |
) |
|
|
|
|
|
|
||
Cash Cost, After By-product Credits, per Ounce |
|
$ |
(1.75 |
) |
|
|
|
|
|
|
||
AISC, Before By-product Credits, per Ounce |
|
$ |
39.05 |
|
|
|
|
|
|
|
||
By-product credits per ounce |
|
|
(27.77 |
) |
|
|
|
|
|
|
||
AISC, After By-product Credits, per Ounce |
|
$ |
11.28 |
|
|
|
|
|
|
|
||
44
In thousands (except per ounce amounts) |
|
Year Ended December 31, 2024 |
|
|||||||||||||||||
|
|
Greens Creek |
|
|
Lucky Friday |
|
|
Keno Hill |
|
|
Corporate(2) |
|
|
Total Silver |
|
|||||
Costs applicable to sales (3) |
|
$ |
214,677 |
|
|
$ |
103,436 |
|
|
$ |
81,336 |
|
|
$ |
— |
|
|
$ |
399,449 |
|
Costs applicable to sales - temporarily suspended operations(3) |
|
|
— |
|
|
$ |
1,583 |
|
|
|
— |
|
|
|
— |
|
|
$ |
1,583 |
|
Treatment costs |
|
|
26,266 |
|
|
|
14,456 |
|
|
|
— |
|
|
|
— |
|
|
|
40,722 |
|
Change in product inventory |
|
|
(5,858 |
) |
|
|
2,090 |
|
|
|
— |
|
|
|
— |
|
|
|
(3,768 |
) |
Reclamation and other costs |
|
|
(4,481 |
) |
|
|
(2,806 |
) |
|
|
— |
|
|
|
— |
|
|
|
(7,287 |
) |
Exclusion of Lucky Friday cash costs (6) |
|
|
— |
|
|
|
(5,217 |
) |
|
|
— |
|
|
|
— |
|
|
|
(5,217 |
) |
Exclusion of Keno Hill cash costs (5) |
|
|
— |
|
|
|
— |
|
|
|
(81,336 |
) |
|
|
— |
|
|
|
(81,336 |
) |
Cash Cost, Before By-product Credits (1) |
|
|
230,604 |
|
|
|
113,542 |
|
|
|
— |
|
|
|
— |
|
|
|
344,146 |
|
Reclamation |
|
|
3,141 |
|
|
|
891 |
|
|
|
— |
|
|
|
— |
|
|
|
4,032 |
|
Sustaining capital |
|
|
45,214 |
|
|
|
44,864 |
|
|
|
— |
|
|
|
1,532 |
|
|
|
91,610 |
|
Exclusion of Lucky Friday sustaining costs (6) |
|
|
— |
|
|
|
(5,396 |
) |
|
|
— |
|
|
|
— |
|
|
|
(5,396 |
) |
General and administrative |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
45,405 |
|
|
|
45,405 |
|
AISC, Before By-product Credits (1) |
|
|
278,959 |
|
|
|
153,901 |
|
|
|
— |
|
|
|
46,937 |
|
|
|
479,797 |
|
By-product credits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Zinc |
|
|
(89,088 |
) |
|
|
(26,244 |
) |
|
|
— |
|
|
|
— |
|
|
|
(115,332 |
) |
Gold |
|
|
(115,189 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(115,189 |
) |
Lead |
|
|
(26,374 |
) |
|
|
(55,042 |
) |
|
|
— |
|
|
|
— |
|
|
|
(81,416 |
) |
Copper |
|
|
(409 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(409 |
) |
Exclusion of Lucky Friday by-product credits (6) |
|
|
— |
|
|
|
3,943 |
|
|
|
— |
|
|
|
— |
|
|
|
3,943 |
|
Total By-product credits |
|
|
(231,060 |
) |
|
|
(77,343 |
) |
|
|
— |
|
|
|
— |
|
|
|
(308,403 |
) |
Cash Cost, After By-product Credits |
|
$ |
(456 |
) |
|
$ |
36,199 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
35,743 |
|
AISC, After By-product Credits |
|
$ |
47,899 |
|
|
$ |
76,558 |
|
|
$ |
— |
|
|
$ |
46,937 |
|
|
$ |
171,394 |
|
Ounces produced |
|
|
8,481 |
|
|
|
4,891 |
|
|
|
|
|
|
|
|
|
13,372 |
|
||
Exclusion of Lucky Friday ounces produced (6) |
|
|
— |
|
|
|
(253 |
) |
|
|
|
|
|
|
|
|
(253 |
) |
||
Divided by silver ounces produced |
|
|
8,481 |
|
|
|
4,638 |
|
|
|
|
|
|
|
|
|
13,119 |
|
||
Cash Cost, Before By-product Credits, per Silver Ounce |
|
$ |
27.19 |
|
|
$ |
24.48 |
|
|
|
|
|
|
|
|
$ |
26.23 |
|
||
By-product credits per ounce |
|
|
(27.24 |
) |
|
|
(16.68 |
) |
|
|
|
|
|
|
|
|
(23.51 |
) |
||
Cash Cost, After By-product Credits, per Silver Ounce |
|
$ |
(0.05 |
) |
|
$ |
7.80 |
|
|
|
|
|
|
|
|
$ |
2.72 |
|
||
AISC, Before By-product Credits, per Silver Ounce |
|
$ |
32.89 |
|
|
$ |
33.18 |
|
|
|
|
|
|
|
|
$ |
36.57 |
|
||
By-product credits per ounce |
|
|
(27.24 |
) |
|
|
(16.68 |
) |
|
|
|
|
|
|
|
|
(23.51 |
) |
||
AISC, After By-product Credits, per Silver Ounce |
|
$ |
5.65 |
|
|
$ |
16.50 |
|
|
|
|
|
|
|
|
$ |
13.06 |
|
||
45
In thousands (except per ounce amounts) |
|
Year Ended December 31, 2024 |
|
|||||||||
|
|
Total Silver |
|
|
Other(4) |
|
|
Total |
|
|||
Costs applicable to sales (3) |
|
$ |
399,449 |
|
|
$ |
20,527 |
|
|
$ |
419,976 |
|
Costs applicable to sales - temporarily suspended operations (3) |
|
|
1,583 |
|
|
|
— |
|
|
|
1,583 |
|
Treatment costs |
|
|
40,722 |
|
|
|
— |
|
|
|
40,722 |
|
Change in product inventory |
|
|
(3,768 |
) |
|
|
— |
|
|
|
(3,768 |
) |
Reclamation and other costs |
|
|
(7,287 |
) |
|
|
— |
|
|
|
(7,287 |
) |
Exclusion of Lucky Friday cash costs (6) |
|
|
(5,217 |
) |
|
|
— |
|
|
|
(5,217 |
) |
Exclusion of Keno Hill cash costs (5) |
|
|
(81,336 |
) |
|
|
(20,527 |
) |
|
|
(101,863 |
) |
Cash Cost, Before By-product Credits (1) |
|
|
344,146 |
|
|
|
— |
|
|
|
344,146 |
|
Reclamation |
|
|
4,032 |
|
|
|
— |
|
|
|
4,032 |
|
Sustaining capital |
|
|
91,610 |
|
|
|
— |
|
|
|
91,610 |
|
Exclusion of Lucky Friday sustaining costs (6) |
|
|
(5,396 |
) |
|
|
— |
|
|
|
(5,396 |
) |
General and administrative |
|
|
45,405 |
|
|
|
— |
|
|
|
45,405 |
|
AISC, Before By-product Credits (1) |
|
|
479,797 |
|
|
|
— |
|
|
|
479,797 |
|
By-product credits: |
|
|
|
|
|
|
|
|
|
|||
Zinc |
|
|
(115,332 |
) |
|
|
— |
|
|
|
(115,332 |
) |
Gold |
|
|
(115,189 |
) |
|
|
— |
|
|
|
(115,189 |
) |
Lead |
|
|
(81,416 |
) |
|
|
— |
|
|
|
(81,416 |
) |
Copper |
|
|
(409 |
) |
|
|
— |
|
|
|
(409 |
) |
Exclusion of Lucky Friday by-product credits (6) |
|
|
3,943 |
|
|
|
|
|
|
3,943 |
|
|
Total By-product credits |
|
|
(308,403 |
) |
|
|
— |
|
|
|
(308,403 |
) |
Cash Cost, After By-product Credits |
|
$ |
35,743 |
|
|
|
— |
|
|
$ |
35,743 |
|
AISC, After By-product Credits |
|
$ |
171,394 |
|
|
|
— |
|
|
$ |
171,394 |
|
Divided by ounces produced |
|
|
13,372 |
|
|
|
|
|
|
|
||
Exclusion of Lucky Friday ounces produced (6) |
|
|
(253 |
) |
|
|
|
|
|
|
||
Divided by silver ounces produced |
|
|
13,119 |
|
|
|
|
|
|
|
||
Cash Cost, Before By-product Credits, per Ounce |
|
$ |
26.23 |
|
|
|
|
|
|
|
||
By-product credits per ounce |
|
|
(23.51 |
) |
|
|
|
|
|
|
||
Cash Cost, After By-product Credits, per Ounce |
|
$ |
2.72 |
|
|
|
|
|
|
|
||
AISC, Before By-product Credits, per Ounce |
|
$ |
36.57 |
|
|
|
|
|
|
|
||
By-product credits per ounce |
|
|
(23.51 |
) |
|
|
|
|
|
|
||
AISC, After By-product Credits, per Ounce |
|
$ |
13.06 |
|
|
|
|
|
|
|
||
46
In thousands (except per ounce amounts) |
|
Year Ended December 31, 2023 |
|
|||||||||||||||||
|
|
Greens Creek |
|
|
Lucky Friday |
|
|
Keno Hill |
|
|
Corporate(2) |
|
|
Total Silver |
|
|||||
Costs applicable to sales (3) |
|
$ |
205,900 |
|
|
$ |
59,859 |
|
|
$ |
59,083 |
|
|
$ |
— |
|
|
$ |
324,842 |
|
Costs applicable to sales - temporarily suspended operations (3) |
|
|
— |
|
|
|
20,489 |
|
|
|
— |
|
|
|
— |
|
|
|
20,489 |
|
Treatment costs |
|
|
40,987 |
|
|
|
10,981 |
|
|
|
1,070 |
|
|
|
— |
|
|
|
53,038 |
|
Change in product inventory |
|
|
(4,266 |
) |
|
|
(5,164 |
) |
|
|
— |
|
|
|
— |
|
|
|
(9,430 |
) |
Reclamation and other costs |
|
|
(748 |
) |
|
|
(826 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1,574 |
) |
Exclusion of Lucky Friday cash costs (6) |
|
|
— |
|
|
|
(21,340 |
) |
|
|
— |
|
|
|
— |
|
|
|
(21,340 |
) |
Exclusion of Keno Hill cash costs (5) |
|
|
— |
|
|
|
— |
|
|
|
(60,153 |
) |
|
|
— |
|
|
|
(60,153 |
) |
Cash Cost, Before By-product Credits (1) |
|
|
241,873 |
|
|
|
63,999 |
|
|
|
— |
|
|
|
— |
|
|
|
305,872 |
|
Reclamation and other costs |
|
|
2,889 |
|
|
|
671 |
|
|
|
— |
|
|
|
— |
|
|
|
3,560 |
|
Sustaining capital |
|
|
41,935 |
|
|
|
39,019 |
|
|
|
— |
|
|
|
928 |
|
|
|
81,882 |
|
Exclusion of Lucky Friday sustaining costs (6) |
|
|
— |
|
|
|
(19,702 |
) |
|
|
— |
|
|
|
— |
|
|
|
(19,702 |
) |
General and administrative |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
42,722 |
|
|
|
42,722 |
|
AISC, Before By-product Credits (1) |
|
|
286,697 |
|
|
|
83,987 |
|
|
|
— |
|
|
|
43,650 |
|
|
|
414,334 |
|
By-product credits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Zinc |
|
|
(83,454 |
) |
|
|
(14,507 |
) |
|
|
— |
|
|
|
— |
|
|
|
(97,961 |
) |
Gold |
|
|
(104,507 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(104,507 |
) |
Lead |
|
|
(29,284 |
) |
|
|
(34,620 |
) |
|
|
— |
|
|
|
— |
|
|
|
(63,904 |
) |
Exclusion of Lucky Friday by-product credits (6) |
|
|
— |
|
|
|
1,566 |
|
|
|
— |
|
|
|
— |
|
|
|
1,566 |
|
Total By-product credits |
|
|
(217,245 |
) |
|
|
(47,561 |
) |
|
|
— |
|
|
|
— |
|
|
|
(264,806 |
) |
Cash Cost, After By-product Credits |
|
$ |
24,628 |
|
|
$ |
16,438 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
41,066 |
|
AISC, After By-product Credits |
|
$ |
69,452 |
|
|
$ |
36,426 |
|
|
$ |
— |
|
|
$ |
43,650 |
|
|
$ |
149,528 |
|
Ounces produced |
|
|
9,732 |
|
|
|
3,086 |
|
|
|
|
|
|
|
|
|
12,818 |
|
||
Exclusion of Lucky Friday ounces produced (6) |
|
|
— |
|
|
|
(103 |
) |
|
|
|
|
|
|
|
|
(103 |
) |
||
Divided by silver ounces produced |
|
|
9,732 |
|
|
|
2,983 |
|
|
|
|
|
|
|
|
|
12,715 |
|
||
Cash Cost, Before By-product Credits, per Silver Ounce |
|
$ |
24.85 |
|
|
$ |
21.45 |
|
|
|
|
|
|
|
|
$ |
24.06 |
|
||
By-product credits per ounce |
|
|
(22.32 |
) |
|
|
(15.94 |
) |
|
|
|
|
|
|
|
|
(20.83 |
) |
||
Cash Cost, After By-product Credits, per Silver Ounce |
|
$ |
2.53 |
|
|
$ |
5.51 |
|
|
|
|
|
|
|
|
$ |
3.23 |
|
||
AISC, Before By-product Credits, per Silver Ounce |
|
$ |
29.46 |
|
|
$ |
28.15 |
|
|
|
|
|
|
|
|
$ |
32.59 |
|
||
By-product credits per ounce |
|
|
(22.32 |
) |
|
|
(15.94 |
) |
|
|
|
|
|
|
|
|
(20.83 |
) |
||
AISC, After By-product Credits, per Silver Ounce |
|
$ |
7.14 |
|
|
$ |
12.21 |
|
|
|
|
|
|
|
|
$ |
11.76 |
|
||
47
In thousands (except per ounce amounts) |
|
Year Ended December 31, 2023 |
|
|||||||||
|
|
Total Silver |
|
|
Other(4) |
|
|
Total |
|
|||
Costs applicable to sales (3) |
|
$ |
324,842 |
|
|
$ |
6,199 |
|
|
$ |
331,041 |
|
Costs applicable to sales - temporarily suspended operations(3) |
|
|
20,489 |
|
|
|
— |
|
|
|
20,489 |
|
Treatment costs |
|
|
53,038 |
|
|
|
— |
|
|
|
53,038 |
|
Change in product inventory |
|
|
(9,430 |
) |
|
|
— |
|
|
|
(9,430 |
) |
Reclamation and other costs |
|
|
(1,574 |
) |
|
|
— |
|
|
|
(1,574 |
) |
Exclusion of Other costs |
|
|
— |
|
|
|
(6,199 |
) |
|
|
(6,199 |
) |
Exclusion of Lucky Friday cash costs (6) |
|
|
(21,340 |
) |
|
|
— |
|
|
|
(21,340 |
) |
Exclusion of Keno Hill cash costs (5) |
|
|
(60,153 |
) |
|
|
— |
|
|
|
(60,153 |
) |
Cash Cost, Before By-product Credits (1) |
|
|
305,872 |
|
|
|
— |
|
|
|
305,872 |
|
Reclamation and other costs |
|
|
3,560 |
|
|
|
— |
|
|
|
3,560 |
|
Sustaining capital |
|
|
81,882 |
|
|
|
— |
|
|
|
81,882 |
|
Exclusion of Lucky Friday sustaining costs (6) |
|
|
(19,702 |
) |
|
|
— |
|
|
|
(19,702 |
) |
General and administrative |
|
|
42,722 |
|
|
|
— |
|
|
|
42,722 |
|
AISC, Before By-product Credits (1) |
|
|
414,334 |
|
|
|
— |
|
|
|
414,334 |
|
By-product credits: |
|
|
|
|
|
|
|
|
|
|||
Zinc |
|
|
(97,961 |
) |
|
|
— |
|
|
|
(97,961 |
) |
Gold |
|
|
(104,507 |
) |
|
|
— |
|
|
|
(104,507 |
) |
Lead |
|
|
(63,904 |
) |
|
|
— |
|
|
|
(63,904 |
) |
Exclusion of Lucky Friday by-product credits (6) |
|
|
1,566 |
|
|
|
— |
|
|
|
1,566 |
|
Total By-product credits |
|
|
(264,806 |
) |
|
|
— |
|
|
|
(264,806 |
) |
Cash Cost, After By-product Credits |
|
$ |
41,066 |
|
|
$ |
— |
|
|
$ |
41,066 |
|
AISC, After By-product Credits |
|
$ |
149,528 |
|
|
$ |
— |
|
|
$ |
149,528 |
|
Divided by ounces produced |
|
|
12,818 |
|
|
|
|
|
|
|
||
Exclusion of Lucky Friday ounces produced (6) |
|
|
(103 |
) |
|
|
|
|
|
|
||
Divided by silver ounces produced |
|
|
12,715 |
|
|
|
|
|
|
|
||
Cash Cost, Before By-product Credits, per Ounce |
|
$ |
24.06 |
|
|
|
|
|
|
|
||
By-product credits per ounce |
|
|
(20.83 |
) |
|
|
|
|
|
|
||
Cash Cost, After By-product Credits, per Ounce |
|
$ |
3.23 |
|
|
|
|
|
|
|
||
AISC, Before By-product Credits, per Ounce |
|
$ |
32.59 |
|
|
|
|
|
|
|
||
By-product credits per ounce |
|
|
(20.83 |
) |
|
|
|
|
|
|
||
AISC, After By-product Credits, per Ounce |
|
$ |
11.76 |
|
|
|
|
|
|
|
||
48
Financial Liquidity and Capital Resources
Liquidity overview
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 net debt and sufficient liquidity to fund debt service costs, operations, capital expenditures, potential strategic investments, exploration and pre-development projects, while returning cash to stockholders through dividends and potential share repurchases.
At December 31, 2025, we had $241.6 million in cash and cash equivalents, of which $26.5 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 December 31, 2025, we had no amounts drawn on our credit facility with $6.7 million utilized for letters of credit. 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 U.S. operations are adequate to fund our U.S. operations and corporate activities.
Pursuant to our common stock dividend policy described in Note 13 of Notes to Consolidated Financial Statements, our Board of Directors declared and paid dividends on common stock totaling $10.4 million in 2025, $24.9 million in 2024 and $15.2 million in 2023. Until February 2025, our dividend policy had a silver-linked component which tied the amount of declared common stock dividends to our realized silver price for the preceding quarter (our dividend policy was recently revised, see discussion below). Another component of our common stock dividend policy, which remains in place, anticipates paying an annual minimum dividend. In 2024, we made the following dividend payments in relation to our minimum and silver-linked components.
Three months ended |
Declaration Date |
Realized Silver Price |
|
Minimum Component |
|
Silver-Linked Component |
|
Total Dividend |
|
||||
March 31, 2024 |
May 8, 2024 |
$ |
24.77 |
|
$ |
0.00375 |
|
$ |
0.0025 |
|
$ |
0.00625 |
|
June 30, 2024 |
August 6, 2024 |
|
29.77 |
|
|
0.00375 |
|
|
0.0025 |
|
|
0.00625 |
|
September 30, 2024 |
November 6, 2024 |
|
29.43 |
|
|
0.00375 |
|
|
0.01 |
|
|
0.01375 |
|
December 31, 2024 |
February 7, 2025 |
|
30.19 |
|
|
0.00375 |
|
|
0.01 |
|
|
0.01375 |
|
In early February 2025, we revised our common stock dividend policy to eliminate the silver-linked component, while maintaining the annual common stock dividend. However the declaration and payment of dividends remain in the sole discretion of our Board of Directors, and there can be no assurance it will declare any future dividend.
As discussed in Note 13 of Notes to Consolidated Financial Statements, 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 in “at-the-market” (ATM) 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 agreement can be terminated by us at any time. Any sales of shares under the equity distribution agreement are registered under the Securities Act of 1933, as amended, pursuant to a shelf registration statement on Form S-3. During the year ended December 31, 2025, we sold 35,959,328 shares under the agreement for proceeds of $216.2 million, net of commissions and fees of approximately $3.3 million, which were used to redeem $212 million of our Senior Notes. As of December 31, 2025, we have sold a total of 59,802,012 shares under the agreement for proceeds of $348.5 million, net of commissions and fees of $5.4 million.
As a result of our current cash balances, the performance of our current and expected operations, current metals prices, proceeds from potential at-the-market sales of common stock, and availability under our Credit Agreement (refer to Note 10 of Notes to Consolidated Financial Statements), we believe we will be able to meet our obligations and other potential cash requirements during the next 12 months from the date of this report. Our obligations and other uses of cash may include, but are not limited to: debt service obligations related to the Senior Notes; principal and interest payments under our Credit Agreement; deferral of revenues, care and maintenance costs at certain of our operations; capital expenditures 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 $255 to $279 million will be spent in 2026 on capital expenditures, 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 Item 1A. Risk Factors
49
- 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 expenditures and/or exploration and pre-development activities, engage in asset sales or secure additional capital if necessary to maintain liquidity. We also may pursue additional acquisition opportunities, which could require additional equity issuances or other forms of financing. We cannot assure you that such financing will be available to us.
Our liquid assets excluding restricted cash and cash equivalents include (in millions):
|
|
December 31, |
|
|
December 31, |
|
|
December 31, |
|
|||
Cash and cash equivalents held in U.S. dollars |
|
$ |
215.1 |
|
|
$ |
24.5 |
|
|
$ |
98.8 |
|
Cash and cash equivalents held in foreign currency |
|
|
26.5 |
|
|
|
2.4 |
|
|
|
7.6 |
|
Total cash and cash equivalents |
|
|
241.6 |
|
|
|
26.9 |
|
|
|
106.4 |
|
Marketable equity securities |
|
|
107.5 |
|
|
|
33.2 |
|
|
|
32.3 |
|
Total cash, cash equivalents and investments |
|
$ |
349.1 |
|
|
$ |
60.1 |
|
|
$ |
138.7 |
|
Cash and cash equivalents increased by $214.7 million in 2025, for the reasons discussed below. Cash and cash equivalents held in foreign currencies primarily represents balances in CAD, and increased by $24.1 million in 2025. The value of marketable equity securities at the end of 2025 increased by $74.3 million due to an overall fair value increase.
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Cash provided by operating activities of continuing operations (in millions) |
|
$ |
403.4 |
|
|
$ |
167.3 |
|
|
$ |
75.4 |
|
Cash provided by operating activities of continuing operations increased by $236.1 million in 2025 compared to 2024. The increase was due to higher income, adjusted for non-cash items, which increased by $288.3 million, partly offset by the negative impact of working capital and other operating asset and liability changes that increased by $52.2 million. Income, adjusted for non-cash items, was higher primarily due to higher revenues. Negative working capital adjustments, primarily related to an increase in accounts receivables reflecting the higher price environment and a concentrate shipment close to year end at Greens Creek contributed to the increased working capital in 2025 compared to 2024.
Cash provided by operating activities of continuing operations increased by $91.9 million in 2024 compared to 2023. The increase was due to higher income, adjusted for non-cash items, which increased by $134.2 million, partly offset by the negative impact of working capital and other operating asset and liability changes. Income, adjusted for non-cash items, was higher due to higher realized prices for all metals, except lead, and higher volumes sold, except for gold. Higher volumes sold resulted from the current year containing a full year of production from Keno Hill and Lucky Friday (which had suspended operations for 5 months of the year due to the 2023 fire). Negative working capital and other operating asset and liability changes contributed to a decrease of working capital of $42.2 million in 2024 compared to 2023. Significant variances in working capital changes between 2024 and 2023 resulted from negative movements in accounts receivables as Lucky Friday operations were suspended at December 31, 2023.
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Cash used in investing activities of continuing operations (in millions) |
|
$ |
(209.0 |
) |
|
$ |
(152.2 |
) |
|
$ |
(161.2 |
) |
Capital expenditures were $190.9 million in 2025, which was $37.1 million higher than 2024, primarily due to pond 5 construction and development at Lucky Friday, and higher development at Keno Hill. We also purchased silver put options for $25.0 million to protect gross margins for a significant part of our 2026 production. In addition, we collected $28.1 million from investment sales and purchased investments for $21.9 million.
Capital expenditures, in 2024 were consistent with 2023. Higher cash used in investing activities in 2023 was due to short-term investments purchases of $9.0 million.
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Cash (used in) provided by financing activities of continuing operations (in millions) |
|
$ |
(76.0 |
) |
|
$ |
(82.3 |
) |
|
$ |
157.1 |
|
50
During 2025, we fully repaid our IQ Notes and we had net repayments of $23.0 million on our revolving credit facility resulting in no amount drawn as of December 31, 2025. We drew down a cumulative $279 million and repaid a cumulative $384 million, and drew down a cumulative $239 million and repaid a cumulative $111 million on our Credit Agreement during 2024 and 2023, respectively. In 2025, 2024 and 2023, we paid total cash dividends on our common and preferred stock of $10.4 million, $25.3 million, and $15.7 million, respectively. We made payments on our finance leases of $6.7 million, $9.2 million, and $9.9 million in 2025, 2024, and 2023, respectively. We issued stock under our ATM program described above for net proceeds of $216.2 million (utilized to redeem $212 million of Senior Notes), $58.4 million, and $56.7 million in 2025, 2024, and 2023, respectively. During 2025, 2024 and 2023, we also purchased shares of our common stock for $0.9 million, $1.2 million, and $2.0 million, respectively, as a result of our employees' election to utilize net share settlement to satisfy their tax withholding obligations related to incentive compensation paid in stock and vesting of restricted stock units. See Note 13 of Notes to Consolidated Financial Statements for more information.
Exchange rate fluctuations between the U.S. dollar and the Canadian dollar and Mexican peso resulted in an increase in our cash balance of $0.5 million, a decrease of $1.1 million, and an increase of $1.1 million, during 2025, 2024 and 2023, respectively.
Contractual Obligations and Contingent Liabilities and Commitments
The table below presents our fixed, non-cancelable contractual obligations and commitments primarily related to our Senior Notes, revolving credit facility, outstanding purchase orders and certain service contract commitments, and lease arrangements as of December 31, 2025 (in thousands):
|
|
Payments Due By Period |
|
|||||||||||||||||
|
|
Less than |
|
|
2-3 years |
|
|
4-5 years |
|
|
After |
|
|
Total |
|
|||||
Purchase and contractual obligations (1) |
|
$ |
29,686 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
29,686 |
|
Credit Agreement (2) |
|
|
1,604 |
|
|
|
2,543 |
|
|
|
— |
|
|
|
— |
|
|
$ |
4,147 |
|
Finance lease commitments (3) |
|
|
4,469 |
|
|
|
1,247 |
|
|
|
— |
|
|
|
— |
|
|
$ |
5,716 |
|
Operating lease commitments (4) |
|
|
1,501 |
|
|
|
2,974 |
|
|
|
2,621 |
|
|
|
5,060 |
|
|
$ |
12,156 |
|
Senior Notes (5) |
|
|
19,068 |
|
|
|
19,068 |
|
|
|
265,403 |
|
|
|
— |
|
|
$ |
303,539 |
|
Total contractual cash obligations |
|
$ |
56,328 |
|
|
$ |
25,832 |
|
|
$ |
268,024 |
|
|
$ |
5,060 |
|
|
$ |
355,244 |
|
We record liabilities for estimated costs associated with mine closure, reclamation of land and other environmental matters. At December 31, 2025, our liabilities for these matters totaled $126.3 million. Future expenditures related to closure, reclamation and environmental expenditures at our other 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 6 of Notes to Consolidated Financial Statements and Item 1A. Risk Factors – Our environmental obligations may exceed the provisions we have made. As discussed in Note 17 of Notes to Consolidated Financial Statements, we are involved in various other legal proceedings which may result in obligations in excess of provisions we have made.
51
Critical Accounting Estimates
Our significant accounting policies are described in Note 2 of Notes to Consolidated Financial Statements. As described in such Note 2, we are required to make estimates and assumptions that affect the reported amounts and related disclosures of assets, liabilities, revenue, and expenses. Our estimates are based on our experience and our interpretation of economic, political, regulatory, and other factors that affect our business prospects. Actual results may differ significantly from our estimates.
We believe that our most critical accounting estimates are related to future metals prices; obligations for environmental, reclamation, and closure matters; mineral reserves and resources; valuation of deferred tax assets and assumptions used in accounting for our pension plans, as they require us to make assumptions that are highly uncertain at the time the accounting estimates are made and changes in them are reasonably likely to occur from period to period. Management has discussed the development and selection of these critical accounting estimates with the Audit Committee of our Board of Directors, and the Audit Committee has reviewed the disclosures presented below. In addition, there are other items within our financial statements that require estimation, but are not deemed to be critical. However, changes in estimates used in these and other items could have a material impact on our financial statements.
Future Metals Prices
Metals prices are key components in estimates that determine the valuation of some of our significant assets and liabilities, including properties, plants, equipment and mine development, deferred tax assets, and certain accounts receivable. Metals prices are also an important component in the estimation of reserves and resources. As shown above in Item 1. – Business, metals prices have historically been volatile. Silver demand arises from investment demand, particularly in exchange-traded funds, industrial demand, and consumer demand. Gold demand arises primarily from investment and consumer demand. Investment demand for silver and gold can be influenced by several factors, including: the value of the U.S. dollar and other currencies, changing U.S. budget deficits, widening availability of exchange-traded funds, interest rate levels, the health of credit markets, and inflationary expectations. Uncertainty related to (i) the political environment in the U.S., (ii) U.S. and global trading policies (including tariffs), (iii) a global economic recovery, and (iv) recent uncertainty in China, could result in continued investment demand for precious metals. Industrial demand for silver is closely linked to world Gross Domestic Product growth and industrial fabrication levels, as it is difficult to substitute for silver in industrial fabrication. Consumer demand is driven significantly by demand for jewelry and other retail products. We believe that long-term industrial and economic trends, including demand for metals to decarbonize the economy and urbanization and growth of the middle class in countries such as China and India, will result in continued consumer demand for silver and gold and industrial demand for silver. There can be no assurance whether these trends will continue or how they will impact prices of the metals we produce. In the past, we have recorded impairments to our asset carrying values because of low prices, and we can offer no assurance that prices will either remain at their current levels or increase.
Processes supporting valuation of our assets and liabilities that are most significantly affected by metals prices include analysis of asset carrying values, depreciation, reserves and resources, and deferred income taxes. On at least an annual basis - and more frequently if circumstances warrant - we examine our depreciation rates, reserve estimates, and the valuation allowances on our deferred tax assets. We examine the carrying values of our assets as changes in facts and circumstances warrant. In our evaluation of carrying values and deferred taxes, we apply several pricing views to our forecasting model, including current prices, analyst price estimates, forward-curve prices, and historical prices (see Mineral Reserves and Resources, below, regarding prices used for reserve and resource estimates). Using applicable accounting guidance and our view of metals markets, we use the probability-weighted average of the various methods to determine whether the values of our assets are fairly stated, and to determine the level of valuation allowances, if any, on our deferred tax assets. In addition, estimates of future metals prices are used in the valuation of certain assets in the determination of the purchase price allocations for our acquisitions.
Sales of concentrates sold directly to customers are recorded as revenues upon completion of the performance obligations and transfer of control of the product to the customer (generally at the time of shipment) using estimated forward metals prices for the estimated month of settlement. Due to the time elapsed between shipment of concentrates to the customer and final settlement with the customer, we must estimate the prices at which sales of our metals will be settled. Previously recorded sales and trade accounts receivable are adjusted to estimated settlement prices until final settlement by the customer. Changes in metals prices between shipment and final settlement result in changes to revenues and accounts receivable previously recorded upon shipment. As a result, our trade accounts receivable balances related to concentrate sales are subject to changes in metals prices until final settlement occurs. For more information, see Note 5 of Notes to Consolidated Financial Statements.
We utilize financially-settled forward contracts, commodity price collars and put options to manage our exposure to changes in prices for silver, gold, zinc and lead. See Item 7A. – Quantitative and Qualitative Disclosures About Market Risk - Commodity-Price Risk Management below for more information on our contract programs. Changes in silver, gold, zinc and lead prices between the dates that the contracts are entered into and their settlements will result in changes to the fair value asset or liability associated with the contracts, with a corresponding gain or loss for silver and gold contracts recognized in earnings and gain or loss for lead and zinc contracts deferred to accumulated other comprehensive income (loss).
52
Obligations for Environmental, Reclamation and Closure Matters
Accrued reclamation and closure costs can represent a significant and variable liability on our balance sheet. We have estimated our liabilities under appropriate accounting guidance; however, the ranges of liability could exceed the liabilities recognized. If substantial damages were awarded, claims were settled, or remediation costs incurred in excess of our accruals, our financial results or condition could be materially adversely affected.
Mineral Reserves and Resources
Critical estimates are inherent in the process of determining our reserves and resources. Our reserves and resources are affected largely by our assessment of future metals prices, as well as by engineering and geological estimates of ore grade, accessibility, future recoveries, capital expenditures and production costs. See Item 2. – Properties above for the metals price assumptions used in our estimates of reserves and resources as of December 31, 2025, 2024, and 2023. Our assessment of reserves and resources occurs at least annually. Periodically we utilize external specialists to perform independent audits of our operating properties reserves and resources.
Reserves and resources are a key component in the valuation of our properties, plants and equipment. Reserve estimates are used in determining appropriate rates of units-of-production depreciation, with net book value of many assets depreciated over remaining estimated reserves. Reserves and resources are also a key component in forecasts, with which we compare future cash flows to current asset values in an effort to ensure that carrying values are reported appropriately. Our forecasts are also used in determining the level of valuation allowances on our deferred tax assets. Reserves and resources also play a key role in the valuation of certain assets in the determination of the purchase price allocations for acquisitions. Annual reserve and resource estimates are also used to determine conversions of resources and exploration targets beyond the known reserve resulting from business combinations to depreciable reserves, in periods subsequent to the business combinations. Reserves and resources are a culmination of many estimates and are not guarantees that we will recover the indicated quantities of metals or that we will do so at a profitable level.
Valuation of Deferred Tax Assets
Our deferred income tax assets include certain future tax benefits. We record a valuation allowance against any portion of those deferred income tax assets when we believe, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. We review the likelihood that we will realize the benefit of our deferred tax assets and therefore the need for valuation allowances on a quarterly basis, or more frequently if events indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected financial results of the legal entity or consolidated group recording the net deferred tax asset is considered, along with all other available positive and negative evidence.
Certain categories of evidence carry more weight in the analysis than others based upon the extent to which the evidence may be objectively verified. We look to the nature and severity of cumulative pretax losses (if any) in the current three-year period ending on the evaluation date or the expectation of future pretax losses and the existence and frequency of prior cumulative pretax losses.
We utilize a rolling twelve quarters of pre-tax income or loss as a measure of our cumulative results in recent years. Concluding that a valuation allowance is not required is difficult when there is significant negative evidence which is objective and verifiable, such as cumulative losses in recent years. However, a cumulative three year loss is not solely determinative of the need for a valuation allowance. We also consider all other available positive and negative evidence in our analysis.
Other factors considered in the determination of the probability of the realization of the deferred tax assets include, but are not limited to:
The Company assesses available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. A significant piece of objective negative evidence is recent pretax losses and/or expectations of future pretax losses. Such objective evidence limits the ability to consider other subjective evidence including projections for future
53
growth. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth.
See Note 8 of Notes to Consolidated Financial Statements for additional detail on the valuation allowance.
Pension Plan Accounting Assumptions
We are required to make a number of assumptions in estimating the future benefit obligations for, and fair value of assets included in, our pension plans, which impact the amount of liability and net periodic pension cost recognized related to our plans. These include assumptions for applicable discount rates, the expected rate of return on plan assets and the rate of future employee compensation increases. See Note 7 of Notes to Consolidated Financial Statements for more information on the accounting for our pension plans and the related assumptions.
New Accounting Pronouncements
Accounting Standard Updates that Became Effective in the Current Period
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures, amending income tax disclosure requirements for the effective tax rate reconciliation and income taxes paid. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024 and are applied prospectively. Early adoption and retrospective application of the amendments are permitted. As the amendments apply to income tax disclosures only, the Company does not expect adoption to have a material impact on our consolidated financial statements and disclosures. We retrospectively adopted the amended tax disclosures in our financial statements for the year ended December 31, 2025.
Accounting Standard 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; 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 retrospectively. The Company is evaluating the impact of the amendments on our consolidated financial statements and disclosures.
Guarantor Subsidiaries
Presented below are Hecla’s condensed consolidating financial statements as required by Rule 3-10 of Regulation S-X of the Securities Exchange Act of 1934, as amended, resulting from the guarantees by certain of Hecla's subsidiaries of the Senior Notes and IQ Notes (see Note 10 of Notes to Consolidated Financial Statements for more information). As of December 31, 2025, the Guarantors consist of the following Hecla 100%-owned subsidiaries: Hecla Limited; Silver Hunter Mining Company; Rio Grande Silver, Inc.; Hecla MC Subsidiary, LLC; Hecla Silver Valley, Inc.; Burke Trading, Inc.; Hecla Montana, Inc.; Revett Silver Company; RC Resources, Inc.; Troy Mine Inc.; Revett Exploration, Inc.; Revett Holdings, Inc.; Mines Management, Inc.; Newhi, Inc.; Montanore Minerals Corp.; Hecla Alaska LLC; Hecla Greens Creek Mining Company; Hecla Admiralty Company; Hecla Juneau Mining Company; Klondex Holdings Inc.; Klondex Gold & Silver Mining Co.; Klondex Midas Holdings Limited; Klondex Aurora Mine Inc.; Klondex Hollister Mine Inc.; Hecla Quebec, Inc.; and Alexco Resource Corp. We completed the offering of the Senior Notes on February 19, 2020 under our shelf registration statement previously filed with the SEC.
The condensed consolidating financial statements below have been prepared from our financial information on the same basis of accounting as the consolidated financial statements set forth elsewhere in this report. Investments in the subsidiaries are accounted for under the equity method. Accordingly, the entries necessary to consolidate Hecla, the Guarantors, and our non-guarantor subsidiaries are reflected in the eliminations column. In the course of preparing consolidated financial statements, we eliminate the effects of various transactions conducted between Hecla and its subsidiaries and among the subsidiaries. While valid at an individual subsidiary level, such activities are eliminated in consolidation because, when taken as a whole, they do not represent business activity with third-party customers, vendors, and other parties. Examples of such eliminations include the following:
54
Separate financial statements of the Guarantors are not presented because the guarantees by the Guarantors are joint and several and full and unconditional, except for certain customary release provisions, including: (1) the sale or disposal of all or substantially all of the assets of the Guarantor; (2) the sale or other disposition of the capital stock of the Guarantor; (3) the Guarantor is designated as an unrestricted entity in accordance with the applicable provisions of the indenture; (4) Hecla ceases to be a borrower as defined in the indenture; and (5) upon legal or covenant defeasance or satisfaction and discharge of the indenture.
Condensed Consolidating Balance Sheets
|
|
As of December 31, 2025 |
||||||||
|
|
Parent |
|
Guarantors |
|
Non-Guarantors |
|
Eliminations |
|
Consolidated |
|
|
(in thousands) |
||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$210,465 |
|
$18,559 |
|
$12,534 |
|
$— |
|
$241,558 |
Other current assets |
|
56,469 |
|
336,575 |
|
46,258 |
|
(92,301) |
|
347,001 |
Property, plants, equipment and mine development, net |
|
296 |
|
2,122,194 |
|
8,091 |
|
— |
|
2,130,581 |
Intercompany receivable (payable) |
|
(685,894) |
|
(367,211) |
|
667,695 |
|
385,410 |
|
— |
Investments in subsidiaries |
|
2,842,226 |
|
(52) |
|
— |
|
(2,842,174) |
|
— |
Other non-current assets |
|
672,380 |
|
15,646 |
|
200,970 |
|
(799,220) |
|
89,776 |
Assets of discontinued operations |
|
— |
|
751,729 |
|
— |
|
— |
|
751,729 |
Total assets |
|
$3,095,942 |
|
$2,877,440 |
|
$935,548 |
|
$(3,348,285) |
|
$3,560,645 |
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
$86,837 |
|
$166,108 |
|
$46,907 |
|
$(108,646) |
|
$191,206 |
Long-term debt |
|
261,947 |
|
1,224 |
|
— |
|
— |
|
263,171 |
Non-current portion of accrued reclamation |
|
— |
|
111,027 |
|
1,464 |
|
— |
|
112,491 |
Non-current deferred tax liability |
|
131,136 |
|
27,039 |
|
(590) |
|
— |
|
157,585 |
Other non-current liabilities |
|
24,376 |
|
207,966 |
|
198,983 |
|
(397,413) |
|
33,912 |
Liabilities of discontinued operations |
|
— |
|
210,634 |
|
— |
|
— |
|
210,634 |
Stockholders' equity |
|
2,591,646 |
|
2,153,442 |
|
688,784 |
|
(2,842,226) |
|
2,591,646 |
Total liabilities and stockholders' equity |
|
$3,095,942 |
|
$2,877,440 |
|
$935,548 |
|
$(3,348,285) |
|
$3,560,645 |
55
Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
|
|
Year Ended December 31, 2025 |
|
|||||||||||||||||
|
|
Parent |
|
|
Guarantors |
|
|
Non-Guarantors |
|
|
Eliminations |
|
|
Consolidated |
|
|||||
|
|
(in thousands) |
|
|||||||||||||||||
Revenues |
|
$ |
(29,620 |
) |
|
$ |
1,139,645 |
|
|
$ |
— |
|
|
$ |
(6,123 |
) |
|
$ |
1,103,902 |
|
Costs applicable to sales (1) |
|
|
— |
|
|
|
(471,056 |
) |
|
|
— |
|
|
|
3,743 |
|
|
|
(467,313 |
) |
Depreciation, depletion, and amortization |
|
|
— |
|
|
|
(126,784 |
) |
|
|
— |
|
|
|
— |
|
|
|
(126,784 |
) |
General and administrative |
|
|
(21,749 |
) |
|
|
(33,101 |
) |
|
|
(2,776 |
) |
|
|
— |
|
|
|
(57,626 |
) |
Exploration and pre-development |
|
|
(568 |
) |
|
|
(25,062 |
) |
|
|
(1,722 |
) |
|
|
— |
|
|
|
(27,352 |
) |
Equity in earnings of subsidiaries |
|
|
325,751 |
|
|
|
— |
|
|
|
— |
|
|
|
(325,751 |
) |
|
|
— |
|
Other income (expense) |
|
|
(5,038 |
) |
|
|
(82,509 |
) |
|
|
17,142 |
|
|
|
2,379 |
|
|
|
(68,026 |
) |
Income (loss) before income and mining taxes |
|
|
268,776 |
|
|
|
401,133 |
|
|
|
12,644 |
|
|
|
(325,752 |
) |
|
|
356,801 |
|
Income and mining tax provision |
|
|
(10,717 |
) |
|
|
(88,702 |
) |
|
|
677 |
|
|
|
— |
|
|
|
(98,742 |
) |
Income (loss) from continuing operations |
|
|
258,059 |
|
|
|
312,431 |
|
|
|
13,321 |
|
|
|
(325,752 |
) |
|
|
258,059 |
|
Income from discontinued operations, net of taxes |
|
|
63,653 |
|
|
|
63,653 |
|
|
|
— |
|
|
|
(63,653 |
) |
|
|
63,653 |
|
Net income (loss) |
|
|
321,712 |
|
|
|
376,084 |
|
|
|
13,321 |
|
|
|
(389,405 |
) |
|
|
321,712 |
|
Preferred stock dividends |
|
|
(552 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(552 |
) |
Net income (loss) applicable to common stockholders |
|
|
321,160 |
|
|
|
376,084 |
|
|
|
13,321 |
|
|
|
(389,405 |
) |
|
|
321,160 |
|
Income (loss) from continuing operations |
|
|
258,059 |
|
|
|
312,431 |
|
|
|
13,321 |
|
|
|
(325,752 |
) |
|
|
258,059 |
|
Other comprehensive loss |
|
|
6,932 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6,932 |
|
Comprehensive income from continuing operations |
|
|
264,991 |
|
|
|
312,431 |
|
|
|
13,321 |
|
|
|
(325,752 |
) |
|
|
264,991 |
|
Comprehensive income from discontinued operations |
|
|
63,653 |
|
|
|
63,653 |
|
|
|
— |
|
|
|
(63,653 |
) |
|
|
63,653 |
|
Comprehensive income |
|
$ |
328,644 |
|
|
$ |
376,084 |
|
|
$ |
13,321 |
|
|
$ |
(389,405 |
) |
|
$ |
328,644 |
|
(1) Excludes depreciation, depletion and amortization.
Forward-Looking Statements
The foregoing discussion and analysis, as well as certain information contained elsewhere in this report, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act, and are intended to be covered by the safe harbor created thereby. See the discussion in Special Note on Forward-Looking Statements included prior to Item 1.
Item 7A. 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 risk and uncertainties, as well as summarizes the financial instruments held by us at December 31, 2025 which are sensitive to changes in commodity prices, foreign exchange rates and interest 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 Item 1A. Risk Factors above).
Metals Prices
Changes in the market prices of silver, gold, lead, and zinc can significantly affect our profitability and cash flow. As discussed in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates, metals prices can fluctuate due to numerous factors beyond our control. As discussed below, we utilize 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). At December 31, 2025, metals contained in concentrate sales and exposed to future price changes totaled approximately 3.5 million ounces of silver, 2,272 ounces of gold, 14,028
56
tons of zinc, and 8,322 tons of lead. If the price for each metal were to change by 10%, the change in the total value of the concentrates sold would be approximately $18.3 million. However, as discussed in Commodity-Price Risk Management below, at times, subject to management's discretion, we utilize a program designed and intended to mitigate the risk of price adjustments with limited mark-to-market financially-settled forward contracts for our silver, gold, zinc and lead sales. Therefore, the impact of changes in prices on the value of concentrates sold would be substantially offset by a gain or loss on forward contracts to the extent such contracts are utilized.
Commodity-Price Risk Management
We may at times use commodity forward sales commitments, commodity swap contracts and commodity put and call option contracts to manage our exposure to fluctuation in the prices of certain metals we produce. Contract positions are designed to ensure that we will receive a defined minimum price for certain quantities of our production, thereby partially offsetting our exposure to fluctuations in market prices. Our risk management policy allows for up to 75% of our planned metals price exposure for five years into the future, with certain other limitations, to be covered under such programs that would establish a ceiling for prices to be realized on future sales. These instruments do, however, expose us to (i) credit risk in the event of non-performance by counterparties for contracts in which the contract price exceeds the spot price of a commodity and (ii) price risk to the extent that the spot price exceeds the contract price for quantities of our production covered under contract positions.
We are currently using financially-settled forward contracts to manage the exposure to changes in prices of silver, gold, zinc and lead contained in our concentrate shipments between the time of shipment and final settlement. In addition, we are using financially-settled forward contracts to manage the exposure to changes in prices of zinc and lead (but not silver and gold) contained in our forecasted future concentrate shipments. The following tables summarize the quantities of metals committed under forward sales contracts at December 31, 2025 and 2024:
December 31, 2025 |
|
Pounds under contract (in 000's) |
|
|
Average price per pound |
|
||||||||||
|
|
Zinc |
|
|
Lead |
|
|
Zinc |
|
|
Lead |
|
||||
|
|
(pounds) |
|
|
(pounds) |
|
|
(pounds) |
|
|
(pounds) |
|
||||
Contracts on provisional sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
2026 settlements |
|
|
18,850 |
|
|
|
13,117 |
|
|
$ |
1.37 |
|
|
$ |
1.05 |
|
Contracts on forecasted sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
2026 settlements |
|
|
53,407 |
|
|
|
42,108 |
|
|
$ |
1.33 |
|
|
$ |
1.02 |
|
2027 settlements |
|
|
23,810 |
|
|
|
— |
|
|
$ |
1.36 |
|
|
N/A |
|
|
December 31, 2024 |
|
Ounces/pounds under contract (in 000's) |
|
|
Average price per ounce/pound |
|
||||||||||||||||||||||||||
|
|
Silver |
|
|
Gold |
|
|
Zinc |
|
|
Lead |
|
|
Silver |
|
|
Gold |
|
|
Zinc |
|
|
Lead |
|
||||||||
|
|
(ounces) |
|
|
(ounces) |
|
|
(pounds) |
|
|
(pounds) |
|
|
(ounces) |
|
|
(ounces) |
|
|
(pounds) |
|
|
(pounds) |
|
||||||||
Contracts on provisional sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2025 settlements |
|
|
1,535 |
|
|
|
2 |
|
|
|
20,834 |
|
|
|
14,661 |
|
|
$ |
31.46 |
|
|
$ |
2,673 |
|
|
$ |
1.40 |
|
|
$ |
0.97 |
|
Contracts on forecasted sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2025 settlements |
|
|
— |
|
|
|
— |
|
|
|
59,194 |
|
|
|
47,840 |
|
|
N/A |
|
|
N/A |
|
|
$ |
1.39 |
|
|
$ |
0.99 |
|
||
2026 settlements |
|
|
— |
|
|
|
— |
|
|
|
6,283 |
|
|
|
52,911 |
|
|
N/A |
|
|
N/A |
|
|
$ |
1.41 |
|
|
$ |
1.03 |
|
||
We designate the contracts for lead and zinc contained in our forecasted future shipments as hedges for accounting purposes, with gains and losses deferred to accumulated other comprehensive loss until the hedged product ships. The forward contracts for silver and gold contained in our concentrate shipments have not been designated as hedges and are marked-to-market through earnings each period.
Since the first quarter of 2025, we have and continue to 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, even if market prices rise higher. This strategy helps protect us from significant price drops while still allowing for some upside potential within the minimum and maximum price range. For the year ending December 31, 2025, these collars had net losses of $51.5 million, of which $15.2 million was realized. For accounting purposes, they are not designated as hedges. The following tables summarize the quantities of metals hedged under Collars at December 31, 2025:
57
Settlement Period |
|
Production Protected |
|
|
Average strike price per silver ounce |
|
|
Average strike price per gold ounce |
|
|||||||||||||||
|
|
Silver (ounces) |
|
|
Gold (ounces) |
|
|
Minimum ($) |
|
|
Maximum ($) |
|
|
Minimum ($) |
|
|
Maximum ($) |
|
||||||
Contracts on provisional sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2026 settlements |
|
|
2,120 |
|
|
|
— |
|
|
|
49.78 |
|
|
|
63.43 |
|
|
N/A |
|
|
N/A |
|
||
Contracts on forecasted sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2026 settlements |
|
|
800 |
|
|
|
4 |
|
|
|
34.29 |
|
|
|
55.70 |
|
|
|
3,000 |
|
|
|
4,840 |
|
In December 2025, we entered into financially-settled put option contracts to manage the exposure of future silver sales to potential declines in market prices of silver. 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. Total premium paid for the put contracts was $25 million and we recorded a $10.4 million unrealized loss on the puts during the year ending December 31, 2025. The following table summarizes the quantities of metals for which we have entered into put contracts and the average exercise prices as of December 31, 2025:
Settlement Period |
|
Production Protected |
|
|
Strike price per ounce |
|
||
|
|
Silver (ounces in 000's) |
|
|
($) |
|
||
Contracts on forecasted sales |
|
|
|
|
|
|
||
2026 settlements |
|
|
9,672 |
|
|
|
50.00 |
|
At December 31, 2025 and 2024, we recorded the following balances for the fair value of derivative contracts held at that time (in millions):
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||||||||||||||||||
Balance sheet line item: |
|
Contracts in an asset position |
|
|
Contracts in a liability position |
|
|
Net asset (liability) |
|
|
Contracts in an asset position |
|
|
Contracts in a liability position |
|
|
Net asset (liability) |
|
||||||
Other current assets |
|
$ |
8.6 |
|
|
$ |
— |
|
|
$ |
8.6 |
|
|
$ |
11.5 |
|
|
$ |
— |
|
|
$ |
11.5 |
|
Other non-current assets |
|
$ |
7.2 |
|
|
$ |
— |
|
|
$ |
7.2 |
|
|
$ |
6.6 |
|
|
$ |
— |
|
|
$ |
6.6 |
|
Current derivatives liability |
|
$ |
— |
|
|
$ |
(36.4 |
) |
|
$ |
(36.4 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Net realized and unrealized gains of approximately $0.2 million related to the effective portion of the contracts designated as hedges were included in accumulated other comprehensive loss as of December 31, 2025. Realized and unrealized gains and losses will be transferred from accumulated other comprehensive loss to current earnings as the underlying forecasted sales transaction is recognized. We estimate approximately $1.1 million in net realized and unrealized gains included in accumulated other comprehensive loss as of December 31, 2025 will be reclassified to current earnings in the next twelve months. The realized gains arose due to cash settlement of zinc and lead contracts in 2023 and zinc contracts in 2022 prior to maturity for cash proceeds of $8.5 million and $17.4 million, respectively, which have now been fully recognized.
We recognized a net loss of $12.0 million (2024: $1.3 million net gain; 2023: $19.7 million net gain), including a $13.1 million gain transferred from accumulated other comprehensive income (loss) ("AOCI") (2024: $11.4 million gain transferred from AOCI; 2023: $20.6 million gain transferred from AOCI), during 2025 on the contracts utilized to manage exposure to prices of metals in our concentrate shipments, which is included in sales. The net gain recognized on the contracts offsets loss related to price adjustments on our provisional concentrate sales, both of which resulted from changes to silver, gold, lead and zinc prices between the time of sale and final settlement. 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.
Foreign Currency
We operate or have mining interests in Canada, which exposes us to risks associated with fluctuations in the exchange rates between the USD and CAD. We have 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 year ended December 31, 2025, we recognized a net foreign exchange loss of $6.0 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 December 31, 2025 would have resulted in a change of approximately $3.9 million in our net foreign exchange gain or loss.
We utilize a program to manage our exposure to fluctuations in the exchange rate between the USD and CAD and the impact on our future operating costs denominated in CAD. In November 2021, we initiated a similar program related to future development costs denominated in CAD, and have used a similar program, on a limited basis, related to interest payments on our previously held IQ Notes (see Note 10 of Notes to Consolidated Financial Statements). The programs utilize forward contracts to buy CAD. Each contract related to operating costs is designated as a cash flow hedge, while contracts related to development and interest costs have not been designated
58
as hedges as of December 31, 2025. Our risk management policy allows for up to 75% of our planned cost exposure for five years into the future to be covered under such programs, and for potential additional programs to manage other foreign currency-related exposure areas. These instruments do, however, expose us to (i) credit risk in the form of non-performance by counterparties for contracts in which the contract exchange rate exceeds the spot exchange rate of a currency and (ii) exchange rate risk to the extent that the spot exchange rate exceeds the contract exchange rate for amounts of our operating costs covered under contract positions. As of December 31, 2025, we had a total of 165 forward contracts outstanding to buy a total of CAD $101.0 million having a notional amount of USD $73.1 million with CAD-to-USD exchange rates ranging between 1.3148 and 1.4202, with the following exposures in 2026:
As of December 31, 2025 and 2024, we recorded the following balances for the fair value of the contracts (in millions):
|
|
December 31, |
|
|||||
Balance sheet line item: |
|
2025 |
|
|
2024 |
|
||
Other current assets |
|
$ |
1.1 |
|
|
$ |
— |
|
Other non-current assets |
|
|
— |
|
|
|
— |
|
Current derivative liabilities |
|
|
(0.8 |
) |
|
|
(2.4 |
) |
Non-current derivative liabilities |
|
|
— |
|
|
|
(0.4 |
) |
Net unrealized losses of approximately $0.9 million related to the effective portion of the hedges were included in accumulated other comprehensive income (loss) as of December 31, 2025. Unrealized gains and losses will be transferred from accumulated other comprehensive loss to discontinued operations as the underlying operating expenses are recognized. We estimate approximately $0.9 million in net unrealized losses included in accumulated other comprehensive income (loss) as of December 31, 2025 would be reclassified to discontinued operations in the next twelve months.
Net realized losses of approximately $4.1 million (2024: $3.8 million loss; 2023: $3.6 million) on contracts related to underlying expenses which have been recognized were transferred from accumulated other comprehensive loss and included in discontinued operations for the year ended December 31, 2025. Net realized gains of approximately $4.8 million (2024: $5.7 million loss; 2023: $1.2 million gains) related to contracts not designated as hedges and no net unrealized gains or losses related to ineffectiveness of the hedges were included in fair value adjustments, net on our consolidated statements of operations and comprehensive (loss) income for the year ended December 31, 2025.
Interest Rates
We have a $225.0 million credit facility, and amounts drawn on the facility are subject to variable rates of interest based on a spread over the Term Secured Overnight Financing Rate ("SOFR") or an alternative base rate. Interest rates fluctuate due to economic factors beyond our control. As of December 31, 2025, we had no amounts drawn under the facility and $6.7 million for letters of credit. Assuming all revolving loans currently available to us were fully drawn, each one percentage point change in interest rates would result in a $2.2 million change in annual cash interest expense on our credit facility. See Note 10 of Notes to Consolidated Financial Statements for more information on our credit facility.
Item 8. Financial Statements and Supplementary Data
Our Consolidated Financial Statements are included herein beginning on page F-1. Financial statement schedules are omitted as they are not applicable or the information required in the schedule is already included in the Consolidated Financial Statements.
59
Index to Consolidated Financial Statements
|
Page |
Consolidated Financial Statements |
|
Report of Independent Registered Public Accounting Firm (BDO USA, P.C.; Spokane, Washington; PCAOB ID#243) |
63 |
Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended December 31, 2025, 2024 and 2023 |
65 |
Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024 and 2023 |
66 |
Consolidated Balance Sheets at December 31, 2025 and 2024 |
68 |
Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2025, 2024 and 2023 |
69 |
Notes to Consolidated Financial Statements |
70 |
60
Report of Independent Registered Public Accounting Firm
Shareholders and Board of Directors
Hecla Mining Company
Coeur d’Alene, Idaho
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Hecla Mining Company (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive income (loss), changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated February 17, 2026 (not presented herein) expressed an unqualified opinion thereon.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Revenue Recognition of Concentrate Sales – Greens Creek, Lucky Friday and Keno Hill
The Company’s consolidated concentrate revenue balance was $1.046 billion for the year ended December 31, 2025. As described in Note 4 to the Company’s consolidated financial statements, sales of all metals products sold directly to customers are recorded as revenues upon completion of the performance obligations and transfer of control of the product to the customer. For concentrate sales, the performance obligation is met, the transaction price can be reasonably estimated, and revenue is recognized generally at the time of shipment at estimated forward prices for the anticipated month of settlement. The amount of consideration for concentrate sales is variable due to changes in metal prices and final agreed upon concentrate content specifications between the time of shipment and final settlement.
We identified revenue recognition of concentrate sales, specific to Greens Creek, Lucky Friday and Keno Hill as a critical audit matter. Management applies judgement in estimating the value of variable consideration for concentrate sales, including assessing for changes in metals prices and concentrate content specifications between the time of shipment and final settlement. Auditing these judgements
61
and estimates involved especially challenging and subjective auditor judgement due to the nature and extent of audit effort required to address the matter.
The primary procedures we performed to address this critical audit matter included:
/s/ BDO USA, P.C.
We have served as the Company's auditor since 2001.
Spokane, Washington
February 17, 2026, except for the effects of discontinued operations discussed in Note 3 and the effects of the reclassifications discussed in Note 2 for which the date is August 28, 2026
62
Hecla Mining Company and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income (Loss)
(Dollars and shares in thousands, except per share amounts)
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Sales |
|
$ |
|
|
$ |
|
|
$ |
|
|||
COSTS AND EXPENSES |
|
|
|
|
|
|
|
|
|
|||
Costs applicable to sales (1) |
|
|
|
|
|
|
|
|
|
|||
Costs applicable to sales - temporarily suspended operations (1) |
|
|
|
|
|
|
|
|
|
|||
Depreciation, depletion and amortization |
|
|
|
|
|
|
|
|
|
|||
General and administrative |
|
|
|
|
|
|
|
|
|
|||
Exploration and pre-development |
|
|
|
|
|
|
|
|
|
|||
Care and maintenance |
|
|
|
|
|
|
|
|
|
|||
Provision for closed operations and environmental matters |
|
|
|
|
|
|
|
|
|
|||
Write down of property, plant and equipment |
|
|
|
|
|
|
|
|
|
|||
Other operating expense (income), net |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Total costs and expenses |
|
|
|
|
|
|
|
|
|
|||
Income from operations |
|
|
|
|
|
|
|
|
|
|||
Other expense: |
|
|
|
|
|
|
|
|
|
|||
Fair value adjustments, net |
|
|
|
|
|
|
|
|
|
|||
Foreign exchange (loss) gain, net |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Other (expense) income, net |
|
|
( |
) |
|
|
|
|
|
|
||
Interest expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total other expense: |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Income (loss) before income and mining taxes |
|
|
|
|
|
|
|
|
( |
) |
||
Income and mining tax provision |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Income (loss) from continuing operations |
|
|
|
|
|
|
|
|
( |
) |
||
Income (loss) from discontinued operations, net of income and mining taxes |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Net income |
|
|
|
|
|
|
|
|
( |
) |
||
Preferred stock dividends |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net income (loss) applicable to common stockholders |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
|
|
|
|
|
|
|
|
|
|
|||
Comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|||
Income (loss) from continuing operations |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
Other comprehensive (loss) income, net of tax: |
|
|
|
|
|
|
|
|
|
|||
Unrealized gain (loss) and amortization of prior service on pension plans |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Unrealized (loss) gain on derivative contracts designated as hedge transactions |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Total change in accumulated other comprehensive income (loss), net |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Comprehensive income (loss) from continuing operations |
|
|
|
|
|
|
|
|
( |
) |
||
Comprehensive income (loss) from discontinued operations |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Comprehensive income (loss) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
|
|
|
|
|
|
|
|
|
|
|||
Net income per common share |
|
|
|
|
|
|
|
|
|
|||
Basic and Diluted: |
|
|
|
|
|
|
|
|
|
|||
Continuing operations |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
Discontinued operations |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Basic and diluted net income (loss) per common share after preferred dividends |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
|
|
|
|
|
|
|
|
|
|
|||
Weighted average number of common shares outstanding – basic |
|
|
|
|
|
|
|
|
|
|||
Weighted average number of common shares outstanding – diluted |
|
|
|
|
|
|
|
|
|
|||
(1)
The accompanying notes are an integral part of the consolidated financial statements.
63
Hecla Mining Company and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Operating activities: |
|
|
|
|
|
|
|
|
|
|||
Net income (loss) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
Less: Income (loss) from discontinued operations, net of taxes |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Income (loss) from continuing operations |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
Non-cash elements included in net income (loss): |
|
|
|
|
|
|
|
|
|
|||
Depreciation, depletion and amortization |
|
|
|
|
|
|
|
|
|
|||
Fair value adjustments, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Inventory adjustments |
|
|
|
|
|
|
|
|
|
|||
Provision for reclamation and closure costs |
|
|
|
|
|
|
|
|
|
|||
Deferred income taxes |
|
|
|
|
|
|
|
|
|
|||
Stock-based compensation |
|
|
|
|
|
|
|
|
|
|||
Foreign exchange (gain) loss |
|
|
|
|
|
( |
) |
|
|
|
||
Write-down of property, plant and equipment |
|
|
|
|
|
|
|
|
|
|||
Other non-cash items, net |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
|
|||
Accounts receivable |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Inventories |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other current and non-current assets |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Accounts payable, accrued and other current liabilities |
|
|
|
|
|
( |
) |
|
|
|
||
Accrued payroll and related benefits |
|
|
|
|
|
|
|
|
( |
) |
||
Accrued taxes |
|
|
|
|
|
|
|
|
( |
) |
||
Accrued reclamation and closure costs and other non-current liabilities |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Cash provided by operating activities of continuing operations |
|
|
|
|
|
|
|
|
|
|||
Cash provided by operating activities of discontinued operations |
|
|
|
|
|
|
|
|
|
|||
Net cash provided by operating activities |
|
|
|
|
|
|
|
|
|
|||
Investing activities: |
|
|
|
|
|
|
|
|
|
|||
Additions to property, plant and equipment and mine development |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Proceeds from disposition of assets |
|
|
|
|
|
|
|
|
|
|||
Acquisition, net |
|
|
|
|
|
|
|
|
|
|||
Proceeds from sale or exchange of investments |
|
|
|
|
|
|
|
|
|
|||
Purchase of silver puts |
|
|
( |
) |
|
|
|
|
|
|
||
Purchases of investments |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Cash used in investing activities of continuing operations |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Cash used in investing activities of discontinued operations |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Financing activities: |
|
|
|
|
|
|
|
|
|
|||
Proceeds from issuance of common stock, net of offering costs |
|
|
|
|
|
|
|
|
|
|||
Dividends paid to common and preferred stockholders |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Acquisition of treasury shares from employee equity awards |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Borrowings of debt |
|
|
|
|
|
|
|
|
|
|||
Repayments of debt |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Repayments of finance leases and other |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Cash (used in) provided by financing activities of continuing operations |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Cash used by financing activities of discontinued operations |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net cash (used in) provided by financing activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Effect of exchange rates on cash |
|
|
|
|
|
( |
) |
|
|
|
||
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents |
|
|
|
|
|
( |
) |
|
|
|
||
Cash and cash equivalents and restricted cash and cash equivalents at beginning of year |
|
|
|
|
|
|
|
|
|
|||
Cash and cash equivalents and restricted cash and cash equivalents at end of year |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Reconciliation of cash and cash equivalents and restricted cash and cash equivalents above to where reported on the consolidated balance sheet |
|
|
|
|
|
|
|
|
|
|||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Non-current restricted cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|||
Total cash and cash equivalents and restricted cash and cash equivalents as reported on the consolidated statements of cash flows |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
|
|||
Cash paid during year for: |
|
|
|
|
|
|
|
|
|
|||
Interest |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Income and mining taxes, net of refunds |
|
$ |
|
|
$ |
|
|
$ |
|
|||
64
Non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
|
|||
Addition of finance lease obligations and right-of-use assets |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Recognition of operating lease liabilities and right-of-use assets |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Properties, plants, equipment and mine development additions in accounts payable and accrued liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Common stock contributed to pension plans |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Common stock issued as incentive compensation |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Common stock issued to directors |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Common stock issued to interim CEO |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Common stock issued for 401(k) match |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Common stock issued for warrant exercises |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Common stock issued to ATAC Resources Ltd. stockholders |
|
$ |
|
|
$ |
|
|
$ |
|
|||
The accompanying notes are an integral part of the consolidated financial statements.
65
Hecla Mining Company and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share and per share data)
|
|
December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
|
|
|
|
|
||
ASSETS |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Accounts receivable: |
|
|
|
|
|
|
||
Trade |
|
|
|
|
|
|
||
Other, net |
|
|
|
|
|
|
||
Inventories: |
|
|
|
|
|
|
||
Product inventories |
|
|
|
|
|
|
||
Materials and supplies |
|
|
|
|
|
|
||
Current investments |
|
|
|
|
|
|
||
Other current assets |
|
|
|
|
|
|
||
Assets of discontinued operations |
|
|
|
|
|
|
||
Total current assets |
|
|
|
|
|
|
||
Non-current investments |
|
|
|
|
|
|
||
Restricted cash and cash equivalents |
|
|
|
|
|
|
||
Properties, plants, equipment and mine development, net |
|
|
|
|
|
|
||
Operating lease right-of-use assets |
|
|
|
|
|
|
||
Other non-current assets |
|
|
|
|
|
|
||
Assets of discontinued operations |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
||
LIABILITIES |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable and accrued liabilities |
|
$ |
|
|
$ |
|
||
Accrued payroll and related benefits |
|
|
|
|
|
|
||
Accrued taxes |
|
|
|
|
|
|
||
Current debt |
|
|
|
|
|
|
||
Finance leases |
|
|
|
|
|
|
||
Accrued reclamation and closure costs |
|
|
|
|
|
|
||
Accrued interest |
|
|
|
|
|
|
||
Derivative liabilities |
|
|
|
|
|
|
||
Other current liabilities |
|
|
|
|
|
|
||
Liabilities of discontinued operations |
|
|
|
|
|
|
||
Total current liabilities |
|
|
|
|
|
|
||
Accrued reclamation and closure costs |
|
|
|
|
|
|
||
Long-term debt including finance leases |
|
|
|
|
|
|
||
Deferred tax liability |
|
|
|
|
|
|
||
Other non-current liabilities |
|
|
|
|
|
|
||
Liabilities of discontinued operations |
|
|
|
|
|
|
||
Total liabilities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|||
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Preferred stock, |
|
|
|
|
|
|
||
Series B preferred stock, $ |
|
|
|
|
|
|
||
Common stock, $ |
|
|
|
|
|
|
||
Capital surplus |
|
|
|
|
|
|
||
Accumulated deficit |
|
|
( |
) |
|
|
( |
) |
Accumulated other comprehensive loss, net |
|
|
( |
) |
|
|
( |
) |
Less treasury stock, at cost; 2025 — |
|
|
( |
) |
|
|
( |
) |
Total stockholders’ equity |
|
|
|
|
|
|
||
Total liabilities and stockholders’ equity |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of the consolidated financial statements.
66
Hecla Mining Company and Subsidiaries
Consolidated Statements of Changes in Stockholders’ Equity
For the Years Ended December 31, 2025, 2024 and 2023
(Dollars in thousands)
|
|
Series B |
|
|
Common |
|
|
Capital |
|
|
Accumulated |
|
|
Accumulated |
|
|
Treasury |
|
|
Total |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balances, January 1, 2023 |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|||||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Common stock issued to directors ( |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Common stock issued for 401(k) match ( |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Incentive compensation distributed ( |
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
Common stock ($ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Common stock issued to pension plans ( |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Common stock issued to ATAC Resources Ltd. shareholders ( |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Common stock issued under ATM program ( |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Balances, December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Common stock issued as compensation to interim CEO ( |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Common stock issued to directors ( |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Common stock issued for 401(k) match ( |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Common stock issued for warrant exercises ( |
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Incentive compensation distributed ( |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|||
Common stock ($ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Common stock issued under ATM program ( |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Common stock issued upon conversion of |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Balances, December 31, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Common stock issued to directors ( |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Common stock issued for 401(k) match ( |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Stock-based compensation expense |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Incentive compensation distributed ( |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|||
Common stock ($ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Common stock issued under ATM program ( |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Common stock issued upon conversion of |
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Balances, December 31, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
The accompanying notes are an integral part of the consolidated financial statements.
67
Hecla Mining Company and Subsidiaries
Notes to Consolidated Financial Statements
Note 1: The Company
Hecla Mining Company, and its affiliates and subsidiaries (collectively, “Hecla,” “we,” “us” or “the Company”), is the largest silver producer in the United States and Canada. In addition to operating mines in Alaska, Idaho and Quebec, Canada, the Company is developing a mine in the Yukon, Canada, and owns a number of exploration and pre-development projects in world-class silver and gold mining districts throughout North America. Our current holding company structure dates from the incorporation of Hecla Mining Company in 2006 and the renaming of our subsidiary (previously Hecla Mining Company) as Hecla Limited. Hecla Limited was incorporated on October 14, 1891 as an Idaho Corporation in northern Idaho’s Silver Valley. We believe we are the oldest operating precious metals mining company in the United States and the largest silver producer in the United States and Canada. Our corporate offices are in Coeur d’Alene, Idaho and Vancouver, British Columbia. The cash flow and profitability of the Company’s operations are significantly affected by the market price of silver, gold, lead and zinc, which are affected by numerous factors beyond our control.
References to “CAD” and “MXN” refer to the Canadian Dollar and Mexican Peso, respectively.
Sale of Casa Berardi
On January 26, 2026, following completion of a strategic review of Casa Berardi, we announced that we entered into a material definitive agreement to sell our wholly-owned subsidiary Hecla Quebec Inc., which owns the Casa Berardi operation to Orezone Gold Corporation (“Orezone”). The transaction closed on March 25, 2026. See Note 3: Sale of Hecla Quebec Inc. and Discontinued Operations for additional information.
Note 2: Summary of Significant Accounting Policies
A. Principles of Consolidation, Basis of Presentation and Other Information — Our Consolidated Financial Statements have been prepared in accordance with GAAP, and include our accounts and our wholly-owned subsidiaries’ accounts. All inter-company balances and transactions have been eliminated in consolidation.
B. Assumptions and Use of Estimates — Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts and related disclosure of assets, liabilities, revenue and expenses at the date of the consolidated financial statements and reporting periods. We consider our most significant accounting estimates to be future metals prices; obligations for environmental, reclamation and closure matters and mineral reserves and resources. Other significant areas requiring the use of management assumptions and estimates relate to reserves for contingencies and litigation; asset impairments, including long-lived assets; valuation of deferred tax assets; and post-employment, post-retirement and other employee benefit assets and liabilities. We have based our estimates on historical experience and various other assumptions that we believe to be reasonable. Accordingly, actual results may differ materially from these estimates under different assumptions or conditions.
C. Cash and Cash Equivalents — Cash and cash equivalents consist of all cash balances and highly liquid investments with a remaining maturity of three months or less when purchased and are carried at fair value. Cash and cash equivalents are invested in money market funds, certificates of deposit, U.S. government and federal agency securities, municipal securities and corporate bonds. At certain times, amounts on deposit may exceed federal deposit insurance limits.
D. Investments — We determine the appropriate classification of our investments at the time of purchase and re-evaluate such determinations at each reporting date. Currently all our investments are marketable equity securities and are carried at fair value. Marketable securities we anticipate selling within the next twelve months are included in other current assets. Gains and losses on the sale of securities are recognized on a specific identification basis. Gains and losses of marketable securities and investments accounted for under the equity method are included as a component of a separate line item, “fair value adjustments, net,” and "Other income", respectively, both of which are included on our consolidated statements of operations and comprehensive income (loss).
E. Inventories — Major types of inventories include materials and supplies and metals product inventory, which is determined by the stage at which the ore is in the production process (stockpiled ore, in-process and finished goods). Product inventories are stated at the lower of full cost of production or estimated net realizable value based on current metals prices. Materials and supplies inventories are stated at average cost.
Stockpiled ore inventory represents ore that has been mined, hauled to the surface, and is available for further processing. Stockpiles are measured by estimating the number of tons added and removed from the stockpile, the amount of contained metal ounces or pounds (based on assay data) and the estimated metallurgical recovery rates (based on the expected processing method). Costs are allocated to a stockpile based on relative values of material stockpiled and processed using current mining costs incurred up to the point
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of stockpiling the ore, including applicable overhead, depreciation, depletion and amortization relating to mining operations, and removed at each stockpile’s average cost per recoverable unit.
In-process inventory represents material that is currently in the process of being converted to a saleable product. Conversion processes vary depending on the nature of the ore and the specific processing facility, but include mill in-circuit, flotation, and carbon-in-leach. In-process material is measured based on assays of the material fed into the process and the projected recoveries of the respective processing plants. In-process inventory is valued at the lower of the average cost of the material fed into the process attributable to the source material coming from the mine and stockpile plus the in-process conversion costs, including applicable depreciation, depletion and amortization relating to the process facilities incurred to that point in the process, or net realizable value.
Finished goods inventory includes doré and concentrates at our operations, doré in transit to refiners or at refiners waiting to be processed, and bullion in our accounts at refineries.
F. Restricted Cash and Cash Equivalents — Restricted cash and cash equivalents primarily represent investments in certificates of deposit and bonds of U.S. government agencies and are restricted primarily for reclamation funding or surety bonds. Restricted cash and cash equivalents balances are carried at fair value. Non-current restricted cash and cash equivalents is reported in a separate line on the consolidated balance sheets and totaled $
G. Properties, Plants, Equipment and Mine Development – Costs are capitalized when it has been determined an ore body can be economically developed pursuant to certain internal investment criteria. The development stage begins at new projects when our management and/or Board of Directors makes the decision to bring a mine into commercial production, and ends when the production stage, or exploitation of reserves, begins. Expenditures incurred during the development and production stages for new assets, new facilities, alterations to existing facilities that extend the useful lives of those facilities, and major mine development expenditures are capitalized, including primary development costs such as costs of building access ways, shaft sinking, lateral development, drift development, ramps and infrastructure developments. Costs to improve, alter, or rehabilitate primary development assets which appreciably extend the life, increase capacity, or improve the efficiency or safety of such assets are also capitalized.
The costs of removing overburden and waste materials to access the ore body at an open-pit mine prior to the production stage are referred to as “pre-stripping costs.” Pre-stripping costs are capitalized during the development stage. Where multiple open pits exist at an operation utilizing common facilities, pre-stripping costs are capitalized at each pit. The production stage of a mine commences when saleable materials, beyond a de minimis amount, are produced. Stripping costs incurred during the production stage are treated as variable production costs included as a component of inventory, to be recognized in costs applicable to sales in the same period as the revenue from the sale of inventory. When stripping costs incurred during the production phase result in the construction of an asset with an alternative use, such as a tailings storage facility, a portion of those stripping costs are capitalized.
Costs for exploration, pre-development, secondary development at operating mines, including drilling costs related to those activities (discussed further below), and maintenance and repairs on capitalized properties, plants and equipment are charged to operations as incurred. Exploration costs include those relating to activities carried out in search of previously unidentified resources or exploration targets, (a) at undeveloped concessions, or (b) at operating mines already containing proven and probable reserves, where a determination remains pending as to whether new target deposits outside of the existing reserve areas can be economically developed. Pre-development activities involve costs incurred in the exploration stage that may ultimately benefit production, such as underground ramp development, which are expensed due to the lack of evidence of economic viability, which is necessary to demonstrate future recoverability of these expenses. At an underground mine, secondary development costs are incurred for preparation of an ore body for production in a specific ore block, stope or work area, providing a relatively short-lived benefit only to the mine area they relate to, and not to the ore body as a whole. Primary development costs benefit long-term production, multiple mine areas, or the ore body as a whole, and are therefore capitalized.
Drilling, development and related costs are either classified as exploration, pre-development or secondary development, as defined above, and charged to operations as incurred, or capitalized, based on the following criteria:
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If all of these criteria are met, drilling, development and related costs are capitalized. Drilling and development costs not meeting all of these criteria are expensed as incurred. The following factors are considered in determining whether or not the criteria listed above have been met, and capitalization of drilling and development costs is appropriate:
Drilling and related costs of $
When assets are retired or sold, the costs and related allowances for depreciation and amortization are eliminated from the accounts and any resulting gain or loss is reflected in current period net income (loss).
Our mineral interests, which are tangible assets, include acquired undeveloped mineral interests and royalty interests. Undeveloped mineral interests include: (i) resources which are measured, indicated or inferred with insufficient drill spacing or quality to qualify as proven and probable reserves; and (ii) inferred material and exploration targets not immediately adjacent to existing proven and probable reserves but accessible within the immediate mine infrastructure. Residual values for undeveloped mineral interests represent the expected fair value of the interests at the time we plan to convert, develop, further explore or dispose of the interests and are evaluated at least annually.
H. Depreciation, Depletion and Amortization — Capitalized costs are depreciated or depleted using the straight-line method or units-of-production method at rates sufficient to depreciate such costs over the shorter of estimated productive lives of such facilities or the useful life of the individual assets. Productive lives range from
Undeveloped mineral interests and value beyond proven and probable reserves are not amortized until such time as there are proven and probable reserves or the related mineralized material is converted to proven and probable reserves. At that time, the basis of the mineral interest is amortized on a units-of-production basis. Pursuant to our policy on impairment of long-lived assets (discussed further below), if it is determined that an undeveloped mineral interest cannot be economically converted to proven and probable reserves and its carrying value exceeds its estimated undiscounted future cash flows, the basis of the mineral interest is reduced to its fair value and an impairment loss is recorded to expense in the period in which it is determined to be impaired.
I. Impairment of Long-lived Assets — Management reviews and evaluates the net carrying value of all facilities, including idle facilities, for impairment upon the occurrence of events or changes in circumstances that indicate that the related carrying amounts may not be recoverable. We perform the test for recoverability of each property based on the estimated probability adjusted undiscounted expected future cash flows that will be generated from operations at each property, potential future asset disposals, the estimated salvage value of the surface plant and equipment, and the value associated with property interests.
Although management has made what it believes to be a reasonable estimate of factors based on current conditions and information, assumptions underlying future cash flows, which includes the estimated value of resources and exploration targets, are subject to significant risks and uncertainties. Estimates of undiscounted expected future cash flows are dependent upon, among other factors, estimates of: (i) metals to be recovered from proven and probable mineral reserves and identified resources and exploration targets beyond proven and probable reserves, (ii) future production and capital costs, (iii) estimated metals prices (considering current and historical prices, forward pricing curves and related factors) over the estimated remaining mine life, (iv) market values of mineral interests and (v) potential estimated sales value. It is possible that changes could occur in the near term that could adversely affect our estimate of future cash flows to be generated from our operating properties. If estimated probability adjusted undiscounted expected cash flows are less than the carrying value of a property, an impairment loss is recognized for the difference between the carrying value and fair value of the property.
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J. Proven and Probable Mineral Reserves — At least annually, management reviews the reserves used to estimate the quantities and grades of ore at our mines which we believe can be recovered and sold economically. Management’s calculations of proven and probable mineral reserves are based on financial, engineering and geological estimates, including future metals prices and operating costs, and an assessment of our ability to obtain the permits required to mine and process the material. From time to time, management obtains external audits or reviews of reserves.
Reserve estimates will change as existing reserves are depleted through production, as additional reserves are proven and added to the estimates and as market prices of metals, production or capital costs, smelter terms, the grade or tonnage of the deposit, throughput, dilution of the ore or recovery rates change.
K. Leases — Contractual arrangements are assessed at inception to determine if they represent or contain a lease. Right-of-use (“ROU”) assets related to operating leases are separately reported in the Consolidated Balance Sheets. ROU assets related to finance leases are included in Properties, plants, equipment and mine development, net.
Operating and finance lease ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term. When the rate implicit to the lease cannot be readily determined, we utilize our incremental borrowing rate in determining the present value of the future lease payments. The incremental borrowing rate is derived from information available at the lease commencement date and represents the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The ROU asset includes any lease payments made and lease incentives received prior to the commencement date. Operating lease ROU assets also include any cumulative prepaid or accrued rent when the lease payments are uneven throughout the lease term. The ROU assets and lease liabilities may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.
L. Income and Mining Taxes — We provide for federal, state and foreign income taxes currently payable, as well as those deferred, due to timing differences between reporting income and expenses for financial statement purposes versus tax purposes. Federal, state/provincial and foreign tax benefits are recorded as a reduction of income taxes, when applicable. We record deferred tax assets and liabilities for expected future tax consequences of temporary differences between the financial statement carrying amounts and the tax bases of those assets and liabilities, as well as operating loss and tax credit carryforwards, using enacted tax rates in effect in the years in which the differences are expected to reverse. We have elected to account for global intangible low-taxed income tax GILTI as a period cost and recognize the tax expense on income from foreign jurisdiction in the year incurred.
We evaluate uncertain tax positions in a two-step process, whereby (i) it is determined whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with the related tax authority would be recognized.
We evaluate our ability to realize deferred tax assets by considering the sources and timing of taxable income, including the reversal of existing temporary differences, the ability to carryback tax attributes to prior periods, qualifying tax-planning strategies, and estimates of future taxable income exclusive of reversing temporary differences. In determining future taxable income, the Company’s assumptions include the amount of pre-tax operating income according to different state, federal and international taxing jurisdictions, the origination of future temporary differences, and the implementation of feasible and prudent tax-planning strategies. Should we determine that a portion of our deferred tax assets will not be realized, a valuation allowance is recorded in the period that such determination is made. When we determine, based on the existence of sufficient evidence, that more or less of the deferred tax assets are more likely than not to be realized, an adjustment to the valuation allowance is made in the period such a determination is made.
We classify as income taxes mine license taxes incurred in the states of Alaska and Idaho, the net proceeds taxes incurred in Nevada, and resource taxes incurred in Quebec and Yukon, Canada.
M. Reclamation and Remediation Costs (Asset Retirement Obligations) — At our operating properties, we record a liability for the present value of our estimated environmental remediation costs, and the related asset created with it, in the period in which the liability is incurred. The liability is accreted and the asset is depreciated over the life of the related assets. Adjustments for changes resulting from the passage of time and changes to either the timing or amount of the original present value estimate underlying the obligation are made in the period incurred.
At our non-operating properties, we accrue costs associated with environmental remediation obligations when it is probable that such costs will be incurred and they are reasonably estimable. Accruals for estimated losses from environmental remediation obligations have historically been recognized no later than completion of the remediation feasibility study for such facility and are charged to current earnings under provision for closed operations and environmental matters. Costs of future expenditures for environmental remediation are not discounted to their present value unless subject to a contractually obligated fixed payment schedule. Such costs are based on management’s current estimate of amounts to be incurred when the remediation work is performed, within current laws and regulations.
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Future closure, reclamation and environmental-related expenditures are difficult to estimate in many circumstances, due to the early stage nature of investigations, uncertainties associated with defining the nature and extent of environmental contamination, the application of laws and regulations by regulatory authorities, and changes in reclamation or remediation technology. We periodically review accrued liabilities for such reclamation and remediation costs as evidence becomes available indicating that our liabilities have potentially changed. Changes in estimates at our non-operating properties are reflected in current period net income (loss).
N. Revenue Recognition and Trade Accounts Receivable — Sales of all metals products sold directly to customers, including by-product metals, are recorded as revenues and accounts receivable upon completion of the performance obligations and transfer of control of the product to the customer. For sales of metals from refined doré, the performance obligation is met, the transaction price is known, and revenue is recognized at the time of transfer of control of the agreed-upon metal quantities to the customer by the refiner. For sales of unrefined doré, the performance obligation is met, the transaction price is known, and revenue is recognized at the time of transfer of title and control of the doré containing the agreed-upon metal quantities to the customer. For concentrate sales, the performance obligation is met, the transaction price can be reasonably estimated, and revenue is recognized generally at the time of shipment at estimated forward prices for the anticipated month of settlement. Due to the time elapsed from shipment to the customer and the final settlement with the customer, we must estimate the prices at which sales of our concentrates will be settled. Previously recorded sales and accounts receivable are adjusted to estimated settlement metals prices until final settlement by the customer. As discussed in P. Risk Management Contracts below, we seek to mitigate this exposure by using financially-settled forward contracts for some of the metals contained in our concentrate shipments.
Refining, selling and shipping costs related to sales of doré, and metals from doré, are recorded to costs applicable to sales as incurred. Sales and accounts receivable for concentrate shipments are recorded net of charges by the customers for treatment, refining, smelting losses, and other charges negotiated by us with the customers. Charges are estimated by us upon shipment of concentrates based on contractual terms, and actual charges typically do not vary materially from our estimates. Costs charged by customers include fixed costs per ton of concentrate, and price escalators which allow the customers to participate in the increase of lead and zinc prices above a negotiated baseline.
The Company's wholly owned subsidiary Elsa Reclamation and Development Company Ltd. ("ERDC"), generates revenue from performing environmental remediation services for the Crown-Indigenous Relations and Northern Affairs Canada ("CIRNAC"), a department of the Federal Government of Canada. ERDC and CIRNAC agree on annual work plans, which detail the scope of activities to be completed. Based on the work plan, the performance obligations to be met and the transaction price is known. Revenue is recognized on a monthly basis, as the required environmental remediation services performance obligations are completed and CIRNAC approves the activities performed. Modification to the scope of work would be agreed to separately with CIRNAC as no work outside of the work plan is reimbursable.
O. Foreign Currency — The functional currency for our operations located in the U.S., Mexico and Canada is the U.S. dollar (“USD”) for all periods presented. Accordingly, for Keno Hill in Canada and San Sebastian in Mexico, we have translated our monetary assets and liabilities at the period-end exchange rate, and non-monetary assets and liabilities at historical rates, with income and expenses translated at the average exchange rate for the current period. All translation gains and losses have been included in the current period net income (loss). Expenses incurred at our foreign operations and denominated in CAD and MXN expose us to exchange rate fluctuations between those currencies and the USD. As discussed in P. Risk Management Contracts below, we seek to mitigate this exposure by using financially-settled forward contracts to sell CAD.
P. Risk Management Contracts — We use derivative financial instruments as part of an overall risk-management strategy as a means of managing exposure to changes in metals prices and exchange rate fluctuations between the USD and CAD. We do not hold or issue derivative financial instruments for speculative trading purposes. We measure derivative contracts as assets or liabilities based on their fair value. Amounts recognized for the fair value of derivative asset and liability positions with the same counterparty and which would be settled on a net basis are offset against each other on our consolidated balance sheets. Gains or losses resulting from changes in the fair value of derivatives in each period are recorded either in current earnings or other comprehensive income (“OCI”), depending on the use of the derivative, whether it qualifies for hedge accounting and whether that hedge is effective. Amounts deferred in OCI are reclassified to sales of products (for metals price-related contracts) or costs applicable to sales (for foreign currency-related contracts). Ineffective portions of any change in fair value of a derivative are recorded in current period other operating income (expense). For derivatives qualifying as hedges, when the hedged items are sold, extinguished or terminated, or it is determined the hedged transactions are no longer likely to occur, gains or losses on the derivatives are reclassified from OCI to current earnings. As of December 31, 2025 and 2024, certain of our foreign currency-related forward contracts and metals prices hedges qualified for hedge accounting, with unrealized gains and loss related to the effective portion of the contracts included in OCI.
Q. Stock-Based Compensation — The fair values of equity instruments granted to employees that have vesting periods are expensed over the vesting periods on a straight-line basis. The fair values of instruments having no vesting period are expensed when granted. Stock-based compensation expense is recorded among general and administrative expenses, exploration and pre-development and costs applicable to sales.
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R. Basic and Diluted Income (Loss) Per Common Share — We calculate basic income (loss) per share on the basis of the weighted average number of shares of common stock outstanding during the period. Diluted income 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.
S. Comprehensive Income (Loss) — In addition to net income (loss), comprehensive income (loss) includes certain changes in equity during a period, such as adjustments to minimum pension liabilities, adjustments to recognize the over-funded or under-funded status of our defined benefit pension plans, and the change in fair value of derivative contracts designated as hedge transactions, net of tax, if applicable.
T. Discontinued Operations - The Company reports the results of operations of a business as discontinued operations if a disposal represents a strategic shift that has (or will have) a major effect on the Company's operations and financial results when the business is classified as held for sale, in accordance with ASC 360, Property, Plant and Equipment and ASC 250-20, Presentation of Financial Statements - Discontinued Operations. The results of discontinued operations are reported in Income (Loss) from discontinued operations, net of income and mining taxes in the Consolidated Statements of Operations and Comprehensive Income (Loss) for current and prior periods, including any gain or loss recognized on closing or adjustment of the carrying amount to fair value less cost to sell.
U. Reclassifications — Certain amounts in 2023 and 2024 have been reclassified in the Consolidated Statements of Operations and Comprehensive Income (Loss) and Note 5. Business Segments, Sales of Products and Significant Customers to conform with the 2025 presentation.
V
Accounting Standards Updates that Became Effective in the Current Period
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures, amending income tax disclosure requirements for the effective tax rate reconciliation and income taxes paid. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024 and are applied prospectively. Early adoption and retrospective application of the amendments are permitted. We retrospectively adopted the income tax disclosures required under the amendments in the year ended December 31, 2025 consolidated financial statements.
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: purchases of inventory, employee compensation, depreciation and 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 3: Sale of Hecla Quebec Inc. and Discontinued Operations
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 total consideration with a fair value of $
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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 noncurrent 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.
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 determined that the sale of Hecla Quebec represents a strategic shift that has a major effect on our operations and financial results and therefore, the Casa Berardi operation is no longer a reportable segment and its financial results are reflected in the Company’s audited consolidated financial statements as a discontinued operation for all periods presented.
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The following table presents the major classes of line items constituting income from discontinued operations, net of tax, in our Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2025, 2024, and 2023:
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Year ended December 31, |
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2025 |
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2024 |
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2023 |
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Sales |
$ |
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$ |
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$ |
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COSTS AND EXPENSES |
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Costs applicable to sales(1) |
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Depreciation, depletion and amortization |
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General and administrative |
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Exploration and pre-development |
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Other operating expense, net |
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( |
) |
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Total costs and expenses |
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Income (loss) from discontinued operations |
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( |
) |
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( |
) |
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Other (expense) income: |
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Interest expense |
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( |
) |
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( |
) |
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( |
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Fair value adjustments, net |
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( |
) |
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Other income |
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Net foreign exchange gain (loss) |
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( |
) |
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Total other income (expense) |
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( |
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Income (loss) from discontinued operations, before income and mining taxes |
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( |
) |
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( |
) |
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Income and mining tax (provision) benefit |
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( |
) |
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Income (loss) from discontinued operations, net of income and mining taxes |
$ |
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$ |
( |
) |
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$ |
( |
) |
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(1)
The following table presents the carrying amounts of the major classes of asset and liabilities of discontinued operations to the Consolidated Balance Sheet as of December 31, 2025 and 2024:
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December 31, 2025 |
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December 31, 2024 |
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ASSETS |
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Accounts receivable |
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$ |
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$ |
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Inventories: |
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Product inventories |
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Materials and supplies |
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Other current assets |
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Assets of discontinued operations, current |
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Property, plants, equipment and mine development, net |
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Other non-current assets |
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Assets of discontinued operations, non-current |
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Total assets |
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$ |
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$ |
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LIABILITIES |
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Current liabilities: |
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Accounts payable and accrued liabilities |
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$ |
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$ |
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Accrued payroll and related benefits |
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Accrued taxes |
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Finance leases |
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Other current liabilities |
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Liabilities of discontinued operations, current |
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Accrued reclamation and closure costs |
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Deferred tax liabilities |
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Other non-current liabilities |
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Liabilities of discontinued operations, non-current |
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Total liabilities |
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$ |
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$ |
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75
Note 4: Investments
At December 31, 2025 the fair value of our investments was $
Note 5: Business Segments, Sales of Products and Significant Customers
We discover, acquire and develop mines and other mineral interests and produce and market (i) concentrates containing silver, gold, lead, zinc and copper (ii) carbon material containing silver and gold, and (iii) doré containing silver and gold. We are currently organized and managed in
The Company regularly reviews its segment reporting for alignment with its strategic goals and operational structure as well as for evaluation of business performance and the allocation of resources by Hecla's President and Chief Executive Officer, who has been identified as our Chief Operating Decision Maker. The CODM evaluates the performance for all of our reportable segments based on segment gross profit or loss. For all segments, the CODM uses segment gross profit or loss to assess segment performance and allocate resources for each segment predominantly in the annual budget and 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 metals production versus budget, and the grade of the metal processed. Intersegment sales are transacted on the same basis as sales to third parties.
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 (loss) before income and mining taxes are not related to our reportable segments.
76
The tables below present information about our reportable segments as of and for the years ended December 31, 2025, 2024 and 2023 (in thousands).
Year ended December 31, 2025 |
Greens Creek |
|
Lucky Friday |
|
Keno Hill |
|
Total Reportable Segments |
|
Other |
|
Total |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Metal sales |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||
Environmental remediation services |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Intersegment sales |
|
|
|
|
|
|
$ |
|
|
|
|
|
||||||
Reconciliation of sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Elimination of intersegment sales |
|
|
|
|
|
( |
) |
|
( |
) |
|
|
|
( |
) |
|||
Total consolidated sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Salaries, wages and other benefits |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Contractors |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Materials and consumables |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Product inventory change |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||||
Other direct production costs |
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|||||
Depreciation, depletion and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Gross profit |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||
Other operating expenses (a) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Income from operations |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other Expense: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||||
Fair value adjustments, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange gain, net |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||||
Other income |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||||
Income before income and mining taxes |
|
|
|
|
|
|
|
|
|
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Capital additions |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||
Identifiable assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
(a)
77
Year ended December 31, 2024 |
Greens Creek |
|
Lucky Friday |
|
Keno Hill |
|
Total Reportable Segments |
|
Other |
|
Total |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Metal sales |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||
Environmental remediation services |
|
|
|
|
|
|
$ |
|
|
|
|
|
||||||
Intersegment sales |
|
|
|
|
|
|
$ |
|
|
|
|
|
||||||
Reconciliation of sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Elimination of intersegment sales |
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
|
— |
|
|
( |
) |
Total consolidated sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Salaries, wages and other benefits |
|
|
|
|
|
|
$ |
|
|
|
|
|
||||||
Contractors |
|
|
|
|
|
|
$ |
|
|
|
|
|
||||||
Materials and consumables |
|
|
|
|
|
|
$ |
|
|
|
|
|
||||||
Product inventory change |
|
|
|
( |
) |
|
( |
) |
$ |
( |
) |
|
|
|
( |
) |
||
Other direct production costs |
|
|
|
|
|
|
$ |
|
|
|
|
|
||||||
Depreciation, depletion and amortization (a) |
|
|
|
|
|
|
$ |
|
|
|
|
|
||||||
Gross profit/(loss)(a) |
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
|
$ |
|
|||||
Other operating expenses (b) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Income from operations |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other Expense: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||||
Fair value adjustments, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange gain, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Income before income and mining taxes |
|
|
|
|
|
|
|
|
|
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Capital additions |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||
Identifiable assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
(a) Previously reported transfers to ramp-up and suspension costs which were included as part of other operating expenses of $
(b)
Lucky Friday's income from operations for 2024 includes $
During 2024, the Company wrote down $
78
Year ended December 31, 2023 |
Greens Creek |
|
Lucky Friday |
|
Keno Hill |
|
Total Reportable Segments |
|
Other |
|
Total |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Metal sales |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||
Environmental remediation services |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Intersegment sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Reconciliation of sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Elimination of intersegment sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total consolidated sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Salaries, wages and employee benefits |
|
|
|
|
|
|
$ |
|
|
|
|
|
||||||
Contractors |
|
|
|
|
|
|
$ |
|
|
|
|
|
||||||
Materials and consumables |
|
|
|
|
|
|
$ |
|
|
|
|
|
||||||
Product inventory change |
|
|
|
|
|
( |
) |
$ |
|
|
|
|
|
|||||
Other direct production costs |
|
|
|
( |
) |
|
|
$ |
|
|
|
|
|
|||||
Depreciation, depletion and amortization (a) |
|
|
|
|
|
|
$ |
|
|
|
|
|
||||||
Gross profit (loss) (a) |
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
( |
) |
$ |
|
||||
Other operating expenses (b) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Income from operations |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other Expense: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||||
Fair value adjustments, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange loss, net |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||||
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Loss before income and mining taxes |
|
|
|
|
|
|
|
|
|
|
$ |
( |
) |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Capital additions |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||
Identifiable assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
(a) Previously reported transfers to ramp-up and suspension costs which were reported as part of other operating expenses of $
(b)
The following are our long-lived assets by geographic area as of December 31, 2025 and 2024 (in thousands):
|
|
2025 |
|
|
2024 |
|
||
United States |
|
$ |
|
|
$ |
|
||
Canada |
|
|
|
|
|
|
||
Mexico |
|
|
|
|
|
|
||
Total long-lived assets |
|
$ |
|
|
$ |
|
||
Our products consist of metal concentrates, which we sell to custom smelters, metal traders and third-party processors, and unrefined bullion bars (doré), which may be sold as doré or further refined before sale to precious metal traders. Revenue is recognized upon the completion of the performance obligations and transfer of control of the product to the customer.
For concentrate sales, which we currently have at Greens Creek, Lucky Friday, and Keno Hill, the performance obligation is met, the transaction price can be reasonably estimated, and revenue is recognized generally at the time of shipment. Concentrates sold at Lucky Friday typically leave the mine and are received by the customer within the same day. However, there is a period of time between shipment of concentrates from Greens Creek and Keno Hill and their physical receipt by the customer, and judgment is required in determining when control has been transferred to the customer and the performance obligation has been met for those shipments. We have determined control is met, title is transferred and the performance obligation is met upon shipment of concentrate parcels from Greens Creek and Keno Hill because, at that time, 1) legal title is transferred to the customer, 2) the customer has accepted the parcel and obtained the ability to realize all of the benefits from the product, 3) the concentrate content specifications are known, have been communicated to the customer, and the customer has the significant risks and rewards of ownership of it, 4) it is very unlikely a concentrate parcel from Greens Creek will be rejected by a customer upon physical receipt, and 5) we have the right to payment for the parcel.
79
Judgment is also required in identifying our concentrate sales performance obligations. Most of our concentrate sales involve “frame contracts” with smelters that can cover multiple years and specify certain terms under which individual parcels of concentrates are sold. However, some terms are not specified in the frame contracts and/or can be renegotiated as part of annual amendments to the frame contract. We have determined parcel shipments represent individual performance obligations satisfied at the point in time when control of the shipment is transferred to the customer.
The amount of consideration we receive for our concentrate sales is variable and fluctuates due to changes in metals prices between the time of shipment and final settlement with the customer. However, we are able to reasonably estimate the transaction price for the concentrate sales at the time of shipment using forward prices for the month of settlement, and previously recorded sales and accounts receivable are adjusted to estimated settlement metals prices until final settlement with the customer. Also, it is unlikely a significant reversal of revenue for any one concentrate parcel will occur. As such, we use the expected value method to price the parcels until the final settlement date occurs, at which time the final transaction price is known. At December 31, 2025, metals contained in concentrate sales and exposed to future price changes totaled
Sales and accounts receivable for concentrate shipments are recorded net of charges for treatment, refining, smelting losses, and other charges negotiated by us with the customers, which represent components of the transaction price. Charges are estimated by us upon shipment of concentrates based on contractual terms, and actual charges typically do not vary materially from our estimates. Costs charged by customers include fixed treatment and refining costs per ton of concentrate and may include price escalators which allow the customers to participate in the increase of lead and zinc prices above a negotiated baseline. Costs for shipping concentrates to customers are recorded to costs applicable to sales as incurred.
Sales of metal concentrates and metal products are made principally to custom smelters, third-party processors and metal traders. The percentage of metal sales contributed by each segment is reflected in the following table:
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Greens Creek |
|
|
% |
|
|
% |
|
|
% |
|||
Lucky Friday |
|
|
% |
|
|
% |
|
|
% |
|||
Keno Hill |
|
|
% |
|
|
% |
|
|
% |
|||
Other |
|
|
|
|
|
|
|
|
% |
|||
|
|
|
% |
|
|
% |
|
|
% |
|||
Total sales for the years ended December 31, 2025, 2024 and 2023 were as follows (in thousands):
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Silver |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Gold |
|
|
|
|
|
|
|
|
|
|||
Lead |
|
|
|
|
|
|
|
|
|
|||
Zinc |
|
|
|
|
|
|
|
|
|
|||
Copper |
|
|
|
|
|
|
|
|
|
|||
Less: Smelter and refining charges |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total metal sales |
|
|
|
|
|
|
|
|
|
|||
Environmental remediation services |
|
|
|
|
|
|
|
|
|
|||
Total sales |
|
$ |
|
|
$ |
|
|
$ |
|
|||
The following is metal sales information by geographic area based on the location of smelters and metal traders (for concentrate shipments) and the location of parent companies (for doré sales to metal traders) for the years ended December 31, 2025, 2024 and 2023 (in thousands):
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
United States |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Canada |
|
|
|
|
|
|
|
|
|
|||
Japan |
|
|
|
|
|
|
|
|
|
|||
Korea |
|
|
|
|
|
|
|
|
|
|||
China |
|
|
|
|
|
|
|
|
|
|||
Others |
|
|
|
|
|
|
|
|
|
|||
Total, excluding gains/losses on derivative contracts |
|
$ |
|
|
$ |
|
|
$ |
|
|||
80
Metal sales by significant product type for the years ended December 31, 2025, 2024 and 2023 were as follows (in thousands):
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Metals from doré - Greens Creek |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Silver concentrate - Greens Creek, Lucky Friday, Keno Hill |
|
|
|
|
|
|
|
|
|
|||
Zinc concentrate - Greens Creek, Lucky Friday, Keno Hill |
|
|
|
|
|
|
|
|
|
|||
Precious metals concentrate - Greens Creek |
|
|
|
|
|
|
|
|
|
|||
Total, excluding gains/losses on forward contracts |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Metal sales for 2025, 2024 and 2023 included , respectively, on derivative contracts for silver, gold, lead and zinc contained in our sales. See Note 11 for more information.
Metal sales from continuing operations to significant metals customers as a percentage of total sales were as follows for the years ended December 31, 2025, 2024 and 2023:
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Customer A - Greens Creek, Lucky Friday |
|
|
% |
|
|
% |
|
|
% |
|||
Customer B - Greens Creek, Keno Hill |
|
|
% |
|
|
% |
|
|
% |
|||
Customer C - Greens Creek, Keno Hill |
|
|
% |
|
|
% |
|
|
% |
|||
Our trade accounts receivable balance related to contracts with customers was $
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Customer A |
|
|
% |
|
|
% |
|
|
% |
|||
Customer B |
|
|
% |
|
|
% |
|
|
% |
|||
Customer C |
|
|
% |
|
|
% |
|
|
|
|||
Customer D |
|
|
|
|
|
|
|
|
% |
|||
Customer G |
|
|
% |
|
|
% |
|
|
% |
|||
We have determined our contracts do not include a significant financing component. For sales of metal from doré, payment is received at the time the performance obligation is satisfied. The amount of consideration for concentrate sales is variable, and we receive payment for a significant portion of the estimated value of concentrate parcels within a relatively short period of time after the performance obligation is satisfied.
Our environmental services remediation revenue is all generated by our ERDC subsidiary and all from one customer CIRNAC. Annually, ERDC and CIRNAC agree to detailed work plans ("DWP") covering the planned activities from April 1 to March 31, the Canadian government's fiscal year. All DWPs are a separate performance obligation, which are satisfied over time as the services are performed and CIRNAC approves the work performed.
We do not incur significant costs to obtain contracts, nor costs to fulfill contracts which are not addressed by other accounting standards. Therefore, we have not recognized an asset for such costs as of December 31, 2025 and 2024.
81
Note 6: Environmental and Reclamation Activities
The liabilities accrued for our reclamation and closure costs at December 31, 2025 and 2024 were as follows (in thousands):
|
|
2025 |
|
|
2024 |
|
||
Operating properties: |
|
|
|
|
|
|
||
Greens Creek |
|
$ |
|
|
$ |
|
||
Lucky Friday |
|
|
|
|
|
|
||
|
|
|
|
|
|
|||
Non-operating properties: |
|
|
|
|
|
|
||
Nevada |
|
|
|
|
|
|
||
Troy mine |
|
|
|
|
|
|
||
Johnny M |
|
|
|
|
|
|
||
All other sites |
|
|
|
|
|
|
||
Total |
|
|
|
|
|
|
||
|
|
( |
) |
|
|
( |
) |
|
|
$ |
|
|
$ |
|
|||
The activity in our accrued reclamation and closure cost liability for the years ended December 31, 2025, 2024 and 2023 was as follows (in thousands):
Balance at January 1, 2023 |
|
|
|
|
Accruals for estimated costs and revisions due to changes in reclamation plans |
|
|
|
|
Accretion expense |
|
|
|
|
Payment of reclamation obligations |
|
|
( |
) |
Balance at December 31, 2023 |
|
|
|
|
Accruals for estimated costs and revisions due to changes in reclamation plans |
|
|
|
|
Accretion expense |
|
|
|
|
Payment of reclamation obligations |
|
|
( |
) |
Balance at December 31, 2024 |
|
|
|
|
Accruals for estimated costs and revisions due to changes in reclamation plans |
|
|
|
|
Accretion expense |
|
|
|
|
Payment of reclamation obligations |
|
|
( |
) |
Balance at December 31, 2025 |
|
$ |
|
Asset Retirement Obligations
Below is a reconciliation as of December 31, 2025 and 2024 (in thousands) of the asset retirement obligations (“ARO”) which are included in our total accrued reclamation and closure costs of $
Payments for reclamation obligations were incurred at Lucky Friday and Greens Creek, and at our former operating mines San Sebastian, Troy and Johnny M.
|
|
2025 |
|
|
2024 |
|
||
Balance January 1 |
|
$ |
|
|
$ |
|
||
Changes in obligations due to changes in reclamation plans |
|
|
|
|
|
|
||
Accretion expense |
|
|
|
|
|
|
||
Payment of asset retirement obligations |
|
|
( |
) |
|
|
( |
) |
Balance at December 31 |
|
$ |
|
|
$ |
|
||
The AROs related to the changes described above were discounted using a credit adjusted, risk-free interest rate of between
Note 7: Employee Benefit Plans
Pensions and Other Post-retirement Plans
We sponsor defined benefit pension plans covering substantially all U.S. employees and a Supplemental Excess Retirement Plan (“SERP”) covering certain eligible employees. During July 2024, we closed the Hecla Mining Company Retirement Plan for Employees
82
(the “Hecla Plan”) to new participants. The closure of the Hecla Plan does not affect employees hired prior to July 19, 2024, and they will continue to accrue benefits. Benefits to retirees will continue unchanged.
The following tables provide a reconciliation of the changes in the plans’ benefit obligations and fair value of assets over the two-year period ended December 31, 2025, and the funded status as of December 31, 2025 and 2024 (in thousands):
|
|
Pension Benefits |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Change in benefit obligation: |
|
|
|
|
|
|
||
Benefit obligation at beginning of year |
|
$ |
|
|
$ |
|
||
Service cost |
|
|
|
|
|
|
||
Interest cost |
|
|
|
|
|
|
||
Change due to mortality change |
|
|
|
|
|
|
||
Change due to discount rate change |
|
|
( |
) |
|
|
|
|
Actuarial return |
|
|
|
|
|
|
||
Benefits paid |
|
|
( |
) |
|
|
( |
) |
Benefit obligation at end of year |
|
|
|
|
|
|
||
Change in fair value of plan assets: |
|
|
|
|
|
|
||
Fair value of plan assets at beginning of year |
|
|
|
|
|
|
||
Actual return on plan assets |
|
|
|
|
|
|
||
SERP assets to non-current investments |
|
|
( |
) |
|
|
|
|
Benefits paid |
|
|
( |
) |
|
|
( |
) |
Fair value of plan assets at end of year |
|
|
|
|
|
|
||
Funded status at end of year |
|
$ |
( |
) |
|
$ |
|
|
The assets of the SERP are recorded in investments in the consolidated balance sheet as these are held in a Rabbi Trust and not classified as Plan Assets. An out-of-period correction was made to reclassify the SERP assets to non-current investments.
The following table provides the amounts recognized in the consolidated balance sheets as of December 31, 2025 and 2024 (in thousands):
|
|
Pension Benefits |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Non-current assets: |
|
|
|
|
|
|
||
Accrued benefit asset |
|
$ |
|
|
$ |
|
||
Pension liability |
|
|
|
|
|
|
||
Accrued current benefit liability |
|
|
|
|
|
( |
) |
|
Accrued benefit liability |
|
|
( |
) |
|
|
( |
) |
Accumulated other comprehensive loss |
|
|
|
|
|
|
||
Net amount recognized |
|
$ |
|
|
$ |
|
||
The benefit obligation and prepaid benefit costs were calculated by applying the following weighted average assumptions:
|
|
Pension Benefits |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Discount rate: net periodic pension cost |
|
|
% |
|
|
% |
||
Discount rate: projected benefit obligation |
|
|
% |
|
|
% |
||
Expected rate of return on plan assets |
|
|
% |
|
|
% |
||
Rate of compensation increase: net periodic pension cost |
|
|
(1) |
|
||||
Rate of compensation increase: projected benefit obligation |
|
|
(1) |
|
||||
The above assumptions were calculated based on information as of December 31, 2025 and 2024, the measurement dates for the plans. The discount rate is based on the yield curve for investment-grade corporate bonds as published by the U.S. Treasury Department. The expected rate of return on plan assets is based upon consideration of the plan’s current asset mix, historical long-term return rates and the plan’s historical performance. Our current assumption for the rate on plan assets is
83
Net periodic pension cost for the plans consisted of the following in 2025, 2024, and 2023 (in thousands):
|
|
Pension Benefits |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Service cost |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Interest cost |
|
|
|
|
|
|
|
|
|
|||
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Amortization of prior service cost |
|
|
|
|
|
|
|
|
|
|||
Amortization of net loss (gain) |
|
|
|
|
|
|
|
|
( |
) |
||
Net periodic pension (benefit) cost |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
The service cost component of net periodic pension cost is included in the same line items of our consolidated financial statements as other employee compensation costs. The net cost (benefit) of $
Each defined benefit pension plan's statement of investment policy delineates the responsibilities of the board, the committee which administers the plan, the investment manager(s), and investment adviser/consultant, and provides guidelines on investment management. Investment objectives are established for each of the asset categories included in the pension plans with comparisons of performance against appropriate benchmarks. Each plan's policy calls for investments to be supervised by qualified investment managers. The investment managers are monitored on an ongoing basis by our outside consultant, with formal reporting to us and the consultant performed each quarter.
|
|
Target |
|
|
Maximum |
|
||
Large cap U.S. equities |
|
|
% |
|
|
% |
||
Small cap U.S. equities |
|
|
% |
|
|
% |
||
Non-U.S. equities |
|
|
% |
|
|
% |
||
U.S. Fixed income |
|
|
% |
|
|
% |
||
Emerging markets debt |
|
|
% |
|
|
% |
||
Real estate |
|
|
% |
|
|
% |
||
Absolute return |
|
|
% |
|
|
% |
||
Company stock/Real return |
|
|
% |
|
|
% |
||
Each defined benefit pension plan's statement of investment policy and objectives aspires to achieve the assumed long term rate of return on plan assets established by the plan’s actuary plus
Accounting guidance has established a hierarchy of assets measured 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
Level 3: significant unobservable inputs
The fair values by asset category in each pension plan, along with their hierarchy levels, are as follows as of December 31, 2025 (in thousands):
|
|
Hecla plan |
|
Lucky Friday |
||||||||||||
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
Investments measured at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing cash |
|
$ |
|
$— |
|
$— |
|
$ |
|
$ |
|
$— |
|
$— |
|
$ |
Common stock |
|
|
— |
|
— |
|
|
— |
|
— |
|
— |
|
— |
||
Mutual funds |
|
|
— |
|
— |
|
|
|
— |
|
— |
|
||||
Total investments in the fair value hierarchy |
|
|
— |
|
— |
|
|
|
— |
|
— |
|
||||
Investments measured at net asset value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate funds |
|
|
— |
|
— |
|
|
— |
|
— |
|
|
||||
Common collective funds |
|
|
— |
|
— |
|
|
— |
|
|
|
|||||
Total investments measured at net asset value |
|
|
— |
|
— |
|
|
— |
|
|
|
|||||
Total fair value |
|
$ |
|
$— |
|
$— |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
84
The fair values by asset category in each defined benefit pension plan, along with their hierarchy levels, were as follows as of December 31, 2024 (in thousands):
|
|
Hecla plans |
|
Lucky Friday |
||||||||||||
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
Investments measured at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing cash |
|
$ |
|
$— |
|
$— |
|
$ |
|
$ |
|
$— |
|
$— |
|
$ |
Common stock |
|
|
— |
|
— |
|
|
|
— |
|
— |
|
||||
Mutual funds |
|
|
— |
|
— |
|
|
|
— |
|
— |
|
||||
Total investments in the fair value hierarchy |
|
|
— |
|
— |
|
|
|
— |
|
— |
|
||||
Investments measured at net asset value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate funds |
|
|
— |
|
— |
|
|
— |
|
— |
|
— |
|
|||
Common collective funds |
|
|
— |
|
— |
|
|
— |
|
— |
|
— |
|
|||
Total investments measured at net asset value |
|
|
— |
|
— |
|
|
— |
|
— |
|
— |
|
|||
Total fair value |
|
$ |
|
$— |
|
$— |
|
$ |
|
$ |
|
$— |
|
$— |
|
$ |
Common stock investments included investments in Hecla common stock as of December 31, 2025 of $
Generally, investments are valued based on information provided by fund managers to each plan's trustee as reviewed by management and its investment advisers. Mutual funds and equities are valued based on available exchange data. Commingled equity funds consist of publicly-traded investments.
Fair value for real estate funds, hedge funds and common collective equity funds is measured using the net asset value per share (or its equivalent) practical expedient (“NAV”), and has not been categorized in the fair value hierarchy. There are no unfunded commitments related to these investments. There are no restrictions on redemptions of these funds as of December 31, 2025, except as limited by the redemption terms discussed below. The following summarizes information on the asset classes measured using NAV:
|
|
Investment strategy |
|
Redemption terms |
Real estate funds |
|
Invest in real estate properties among the four major property types (office, industrial, retail and multi-family) |
|
Allowed quarterly with notice of between 45 and 60 days |
Hedge funds |
|
Invest in a variety of asset classes which aim to diversify sources of returns |
|
Allowed quarterly with notice of 90 days |
Common collective funds |
|
Invest in U.S. large cap or small/medium cap public equities in actively traded managed equity portfolios |
|
Allowed daily or with notice of 30 days |
The following are estimates of future benefit payments, which reflect expected future service as appropriate, related to our pension plans (in thousands):
Year Ending December 31, |
|
Pension |
|
|
2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Years 2031-2035 |
|
|
|
|
The last time we made a contribution to the plans was during 2023 in the form of $
The following table indicates whether our pension plans had accumulated benefit obligations (“ABO”) in excess of plan assets, or plan assets exceeded ABO. In 2025, one of our plans had ABOs in excess of plan assets. During 2024 two of our plans had plan assets in excess of the ABO and one did not (in thousands).
85
|
2025 |
|
|
2025 |
|
|
2024 |
|
|
2024 |
|
||||
|
Plan Assets Exceed ABO |
|
|
ABO Exceed Plan Assets |
|
|
Plan Assets Exceed ABO |
|
|
ABO Exceed Plan Assets |
|
||||
Projected benefit obligation |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Accumulated benefit obligation |
|
|
|
|
|
|
|
|
|
|
|
||||
Fair value of plan assets |
|
|
|
|
|
|
|
|
|
|
|
||||
For the pension plans, the following amounts are included in “Accumulated other comprehensive income, net” on our balance sheet as of December 31, 2025, that have not yet been recognized as components of net periodic benefit cost (in thousands):
|
|
Pension |
|
|
Unamortized net loss |
|
$ |
|
|
Unamortized prior service cost |
|
|
|
|
Except for a limited number of employees who participate in the SERP, non-U.S. employees are not eligible to participate in the defined benefit pension plans that we maintain for U.S. employees. Canadian employees participate in Canada's public retirement income system, which includes the following components: (i) the Canada (or Quebec) Pension Plan, which is an employee and employer contributory, earnings-related social insurance program, and (ii) the Old Age Security program. Mexican employees participate in Mexico's public retirement income system, which is based on contributions the employee, employer and the government submit to the retirement savings system. The system is administered through savings accounts managed by private fund managers selected by the participant.
Capital Accumulation Plans
Our Capital Accumulation Plan ("401(k) plan") is available to all U.S. salaried and certain hourly employees upon employment. We make a matching contribution in the form of cash or stock of
We also maintain a 401(k) plan that is available to all hourly employees at Lucky Friday upon employment. When an employee meets eligibility requirements we make a matching cash contribution of
Major components of our income and mining tax provision for the years ended December 31, 2025, 2024 and 2023 are as follows (in thousands):
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Current: |
|
|
|
|
|
|
|
|
|
|||
United States |
|
$ |
|
|
$ |
|
|
$ |
|
|||
State income and state mining taxes |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Canada |
|
|
|
|
|
|
|
|
|
|||
Canada - provincial mining taxes |
|
|
( |
) |
|
|
|
|
|
|
||
Total current income and mining tax provision |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Deferred: |
|
|
|
|
|
|
|
|
|
|||
United States |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
State and state mining taxes |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Canada |
|
|
( |
) |
|
|
|
|
|
|
||
Canada - provincial mining taxes |
|
|
( |
) |
|
|
|
|
|
|
||
Total deferred income and mining tax provision |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total income and mining tax provision |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Domestic and foreign components of income (loss) before income and mining taxes for the years ended December 31, 2025, 2024 and 2023 are as follows (in thousands):
86
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
United States |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Canada |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Mexico |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
The Company paid the following income and mining tax payments net of refunds for the years ended December 31, 2025, 2024 and 2023(in thousands):
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
United States |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Alaska |
|
|
|
|
|
|
|
|
|
|||
Idaho |
|
|
|
|
|
|
|
|
|
|||
Canada |
|
|
|
|
|
|
|
|
|
|||
Other |
|
|
|
|
|
|
|
|
|
|||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|||
The annual tax provision is different from the amount that would be provided by applying the United States statutory federal income tax rate to our pretax income (loss). The reasons for the difference for the years ended December 31, 2025, 2024 and 2023 are (in thousands):
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income and mining tax (provision) / benefit at statutory rate |
|
$ |
( |
) |
|
|
% |
|
$ |
( |
) |
|
|
% |
|
$ |
|
|
|
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
State and local income tax, net of federal (national) income tax effect |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
State taxes, net of federal tax benefit (a) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
||
US Mining and other taxes (b) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Foreign tax effects |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Canada |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Canada - Rate differential on foreign earnings |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Canada - Currency remeasurement |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Canada - Mining taxes |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Canada - Provincial taxes |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Canada - Other |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||||
Canada - Change in valuation allowance |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Provincial - Change in valuation allowance |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Provincial - Currency remeasurement |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
||
Mexico |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Rate differential on foreign earnings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Currency remeasurement |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||||
Change in valuation allowance |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
||
Other |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Effect of Cross-Border Tax Laws |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Global intangible low-taxed income |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Subpart F |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Change in valuation allowance |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Nontaxable or nondeductible items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Percentage depletion |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Transfer Pricing Allocation |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Compensation |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Other |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Total (provision) benefit |
|
$ |
( |
) |
|
|
% |
|
$ |
( |
) |
|
|
% |
|
$ |
( |
) |
|
|
( |
)% |
||
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
87
At December 31, 2025 and 2024, the net deferred tax liability was $
|
|
December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Deferred tax assets: |
|
|
|
|
|
|
||
Accrued reclamation costs |
|
$ |
|
|
$ |
|
||
Deferred exploration |
|
|
|
|
|
|
||
Foreign net operating losses |
|
|
|
|
|
|
||
Domestic net operating losses |
|
|
|
|
|
|
||
Foreign exchange loss |
|
|
|
|
|
|
||
Foreign tax credit carryforward |
|
|
|
|
|
|
||
Miscellaneous |
|
|
|
|
|
|
||
Total deferred tax assets |
|
|
|
|
|
|
||
Valuation allowance |
|
|
( |
) |
|
|
( |
) |
Total deferred tax assets |
|
|
|
|
|
|
||
Deferred tax liabilities: |
|
|
|
|
|
|
||
Miscellaneous |
|
|
( |
) |
|
|
( |
) |
Properties, plants and equipment |
|
|
( |
) |
|
|
( |
) |
Total deferred tax liabilities |
|
|
( |
) |
|
|
( |
) |
Net deferred tax liability |
|
$ |
( |
) |
|
$ |
( |
) |
We evaluated the positive and negative evidence available to determine the amount of valuation allowance required on our deferred tax assets. At December 31, 2025, the balance of our valuation allowances was $
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Balance at beginning of year |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Valuation allowance on deferred tax assets acquired with the ATAC (2023) and Alexco (2022) acquisitions |
|
|
|
|
|
|
|
|
( |
) |
||
Decrease (increase) related to non-recognition of deferred tax assets due to uncertainty of recovery and increase related to non-utilization of net operating loss carryforwards |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Decrease related to either or a combination of (i) utilization, (ii) release due to future benefit, and (iii) expiration of deferred tax assets as applicable |
|
|
|
|
|
|
|
|
|
|||
Balance at end of year |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
The Company has permanently reinvested its Canadian and Mexican’s undistributed earnings to support ongoing mining activities and continued project development. Accordingly, no deferred tax liability has been recorded for foreign withholding taxes, U.S. Federal and State income taxes. As of December 31, 2025, the Company does not have any foreign undistributed earnings.
As of December 31, 2025, for U.S. income tax purposes, we have federal and state net operating loss carryforwards of $
88
We have Internal Revenue Code Section 163(j) interest expense limitation carryforwards in the Nevada U.S. Group of $
We have excessive interest and financing expense limitation ("EIFEL") carryforwards of $
As of December 31, 2025, we have foreign tax credit carryforwards of $
We file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. We are no longer subject to income tax examinations by U.S. federal and state tax authorities for years prior to 2002, nor subject to examinations by foreign tax authorities for years prior to 2018. We are currently under examination in certain local Canadian tax jurisdictions. However, we do not anticipate any material adjustments.
We had
On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the U.S. The OBBBA permanently extends multiple tax provisions of the 2017 Tax Cuts and Jobs Act, as well as repeals, modifies and introduces various other tax provisions including, but not limited to federal bonus depreciation and current deductions for domestic research and development expenditures. We have elected bonus depreciation for the year-ended 2025 and do not anticipate that the other items in the OBBBA will have a material impact on the Company's consolidated financial statements. We continue to evaluate the impact the OBBBA may have on the Company as the legislation has various future effective dates.
Pillar Two is a global tax framework that establishes a
Note 9: Income (Loss) per Common Share
We calculate basic income (loss) per share using, as the denominator, the weighted average number of common shares outstanding during the period. Diluted income (loss) per share uses, as its denominator, the weighted average number of common shares outstanding during the period plus the effect of potential dilutive common shares during the period using the treasury stock method for options, warrants, performance based and restricted stock units, and if-converted method for convertible preferred shares.
Potential dilutive common shares include outstanding unvested restricted stock unit awards, deferred restricted stock units, performance based units, warrants and convertible preferred stock (collectively referred to as dilutive units) for periods in which we have reported net income. The 2024 dilutive units exclude the impact of
89
The following table represents net income (loss) per common share – basic and diluted (in thousands, except income (loss) per share):
|
|
Year ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Numerator |
|
|
|
|
|
|
|
|
|
|||
Income (loss) from continuing operations |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
Income (loss) from discontinued operations |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Preferred stock dividends |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net income (loss) applicable to common stockholders |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
|
|
|
|
|
|
|
|
|
|
|||
Denominator |
|
|
|
|
|
|
|
|
|
|||
Basic weighted average common shares |
|
|
|
|
|
|
|
|
|
|||
Dilutive units |
|
|
|
|
|
|
|
|
|
|||
Diluted weighted average common shares |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Basic income (loss) per share: |
|
|
|
|
|
|
|
|
|
|||
Income from continuing operations after preferred dividends |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
Income (loss) from discontinued operations |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Basic net income (loss) per common share after preferred dividends |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
|
|
|
|
|
|
|
|
|
|
|||
Diluted income (loss) per share: |
|
|
|
|
|
|
|
|
|
|||
Income from continuing operations after preferred dividends |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
Income (loss) from discontinued operations |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Diluted net income (loss) per common share after preferred dividends |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
For the year ended December 31, 2023,
Note 10: Debt, Credit Facility and Leases
Debt Summary
Our debt as of December 31, 2025 and 2024 consisted of our outstanding
|
|
December 31, 2025 |
|
|
|
|
Senior Notes |
|
|
Principal |
|
$ |
|
|
Unamortized discount and issuance costs |
|
|
( |
) |
Long-term debt |
|
|
|
|
|
|
December 31, 2024 |
|
|||||||||||||
|
|
Senior Notes |
|
|
IQ Notes |
|
|
Credit Agreement |
|
|
Total |
|
||||
Principal |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Unamortized discount/premium and issuance costs |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Total debt |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Less: current debt |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Long-term debt |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
90
The following table summarizes the scheduled annual future payments, including interest, for the Senior Notes as of December 31, 2025 (in thousands).
|
|
Senior Notes |
|
|
2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
Total |
|
$ |
|
|
Senior Notes
On February 19, 2020, we completed an offering of $
The Senior Notes were recorded net of a
The Senior Notes are guaranteed on a senior unsecured basis by certain of our subsidiaries (the “Guarantors”). The Senior Notes and the guarantees are, respectively, Hecla's and the Guarantors' general senior unsecured obligations and are subordinated to all of Hecla's and the Guarantors' existing and future secured debt to the extent of the assets securing that secured debt. In addition, the Senior Notes are effectively subordinated to all of the liabilities of Hecla's subsidiaries that are not guaranteeing the Senior Notes, to the extent of the assets of those subsidiaries.
Since February 15, 2023, the Senior Notes are redeemable in whole or in part, on the redemption dates specified in the Indenture, at the following redemption prices (expressed as a percentage of the principal amount) plus accrued interest, if any, to the redemption date: (i)
Upon the occurrence of a change of control (as defined in the Indenture), each holder of Senior Notes will have the right to require us to purchase all or a portion of such holder's Senior Notes pursuant to a change of control offer (as defined in the Indenture), at a purchase price equal to
IQ Notes
On July 9, 2020, we entered into a note purchase agreement pursuant to which we issued CAD$
On July 9, 2025, we repaid the IQ Notes, for a total payment of $
Credit Agreement
On July 21, 2022, we entered into a revolving credit agreement (the "Original Credit Agreement") with various financial institutions (the “Lenders”), Bank of Montreal and Bank of America, N.A. as letters of credit issuers, and Bank of America, N.A., as administrative agent for the Lenders and as swingline lender. The Original Credit Agreement was amended on May 3, 2024, when we
91
entered into a First Amendment to Credit Agreement (the “First Amendment”), which made certain changes to the Original Credit Agreement (the Original Credit Agreement, as amended, modified and supplemented by the First Amendment, is referred to hereafter as the “Credit Agreement”). The First Amendment modified the Original Credit Agreement as follows:
Proceeds of the revolving loans under the Credit Agreement may be used for general corporate purposes. The interest rate on the outstanding loans under the Credit Agreement is based on the Company’s net leverage ratio and is calculated at (i) Term Secured Overnight Financing Rate ("SOFR") plus
We are also required to pay a commitment fee of between
Hecla Mining Company and certain of our subsidiaries are the borrowers under the Credit Agreement, while certain of our other subsidiaries are guarantors of the borrowers’ obligations under the Credit Agreement. As further security, the Credit Agreement is collateralized by a mortgage on the Greens Creek mine, the equity interests of subsidiaries that own the Greens Creek mine or are part of the Greens Creek Joint Venture and our subsidiary Hecla Admiralty Company (the “Greens Creek Group”), and by all of the Greens Creek Group’s rights and interests in the Greens Creek Joint Venture Agreement, and in all assets of the joint venture and of any member of the Greens Creek Group.
As of December 31, 2025, $
We believe we were in compliance with all covenants under the Credit Agreement as of December 31, 2025.
Finance Leases
We have entered into various lease agreements, primarily for equipment at our operations, which we have determined to be finance leases. At December 31, 2025, the total liability associated with the finance leases, including certain purchase option amounts, was $
At December 31, 2025, the annual maturities of finance lease commitments, including interest, were (in thousands):
Twelve-month period ending December 31, |
|
|
|
|
2026 |
|
$ |
|
|
2027 |
|
|
|
|
Total |
|
|
|
|
Less: effect of interest |
|
|
( |
) |
Net finance lease obligation |
|
$ |
|
|
Operating Leases
We have entered into various lease agreements, primarily for equipment, buildings and other facilities, and land at our operations and corporate offices, which we have determined to be operating leases. Some of the operating leases allow for extension of the lease
92
beyond the current term at our option. We have considered the likelihood and estimated duration of the extension options in determining the lease term for measurement of the liability and right-of-use asset. For our operating leases as of December 31, 2025, we have assumed a weighted average discount rate of
At December 31, 2025, the annual maturities of undiscounted operating lease payments, including assumed extensions beyond the current lease terms, were (in thousands):
Twelve-month period ending December 31, |
|
|
|
|
2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
More than 5 years |
|
|
|
|
Total |
|
|
|
|
Less: effect of discounting |
|
|
( |
) |
Operating lease liability |
|
$ |
|
|
Note 11: Derivative Instruments
General
Our current risk management policy provides that up to
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.
Foreign Currency
Our wholly-owned subsidiaries owning our Keno Hill operation are USD-functional entities which routinely incur expenses denominated in CAD. Such expenses expose us to exchange rate fluctuations between the USD and CAD. We have a program to manage our exposure to fluctuations in the USD exchange rate for these subsidiaries' future operating and capital costs denominated in CAD. The program related to forecasted cash operating costs at Keno Hill utilizes forward contracts to buy CAD, some of which are designated as cash flow hedges. As of December 31, 2025, we have a total of
As of December 31, 2025 and 2024, we recorded the following balances for the fair value of the contracts (in millions):
93
|
|
December 31, |
|
|||||
Balance sheet line item: |
|
2025 |
|
|
2024 |
|
||
Other current assets |
|
$ |
|
|
$ |
|
||
Other non-current assets |
|
|
|
|
|
|
||
Current derivative liabilities |
|
|
( |
) |
|
|
( |
) |
Non-current derivative liabilities |
|
|
|
|
|
( |
) |
|
Net unrealized losses of approximately $
For the year ended December 31, 2025, net realized losses of approximately $
Metals Prices
We currently use some combination of financially-settled forward contracts, Collars or put options to manage the exposure to:
The following tables summarize the quantities of metals committed under forward sales contracts at December 31, 2025 and 2024:
December 31, 2025 |
|
Pounds under contract (in 000's) |
|
|
Average price per pound |
|
||||||||||
|
|
Zinc |
|
|
Lead |
|
|
Zinc |
|
|
Lead |
|
||||
|
|
(pounds) |
|
|
(pounds) |
|
|
(pounds) |
|
|
(pounds) |
|
||||
Contracts on provisional sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
2026 settlements |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||||
Contracts on forecasted sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
2026 settlements |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||||
2027 settlements |
|
|
|
|
|
— |
|
|
$ |
|
|
N/A |
|
|||
December 31, 2024 |
|
Ounces/pounds under contract (in 000's) |
|
|
Average price per ounce/pound |
|
||||||||||||||||||||||||||
|
|
Silver |
|
|
Gold |
|
|
Zinc |
|
|
Lead |
|
|
Silver |
|
|
Gold |
|
|
Zinc |
|
|
Lead |
|
||||||||
|
|
(ounces) |
|
|
(ounces) |
|
|
(pounds) |
|
|
(pounds) |
|
|
(ounces) |
|
|
(ounces) |
|
|
(pounds) |
|
|
(pounds) |
|
||||||||
Contracts on provisional sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2024 settlements |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Contracts on forecasted sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2024 settlements |
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A |
|
|
N/A |
|
|
$ |
|
|
$ |
|
||||||||
2025 settlements |
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A |
|
|
N/A |
|
|
$ |
|
|
$ |
|
||||||||
We designate the contracts for lead and zinc contained in our forecasted future shipments as hedges for accounting purposes, with gains and losses deferred to accumulated other comprehensive loss until the hedged product ships. The forward contracts for silver and gold contained in our concentrate shipments have not been designated as hedges and are marked-to-market through earnings each period.
Since the first quarter of 2025, we have and continue to 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, even if market prices rise higher. This strategy helps protect us from significant price drops while still allowing for some upside potential within the minimum and maximum price range. For the year ending December 31, 2025, these collars had net losses of $
94
Settlement Period |
|
Production Protected |
|
|
Average strike price per silver ounce |
|
|
Average strike price per gold ounce |
|
|||||||||||||||
|
|
Silver (ounces) |
|
|
Gold (ounces) |
|
|
Minimum ($) |
|
|
Maximum ($) |
|
|
Minimum ($) |
|
|
Maximum ($) |
|
||||||
Contracts on provisional sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2026 settlements |
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A |
|
|
N/A |
|
||||||
Contracts on forecasted sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2026 settlements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
In December 2025, we entered into financially-settled put option contracts to manage the exposure of future silver sales to potential declines in market prices of silver. 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. Total premium paid for the put contracts was $
Settlement Period |
|
Production Protected |
|
|
Strike price per ounce |
|
||
|
|
Silver (ounces in 000's) |
|
|
($) |
|
||
Contracts on forecasted sales |
|
|
|
|
|
|
||
2026 settlements |
|
|
|
|
|
|
||
At December 31, 2025 and 2024, we recorded the following balances for the fair value of derivative contracts held at that time (in millions):
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||||||||||||||||||
Balance sheet line item: |
|
Contracts in an asset position |
|
|
Contracts in a liability position |
|
|
Net asset (liability) |
|
|
Contracts in an asset position |
|
|
Contracts in a liability position |
|
|
Net asset (liability) |
|
||||||
Other current assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Other non-current assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Current derivatives liability |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Other non-current liability |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Net realized and unrealized gains of approximately $
We recognized a net loss of $
We recognized a net gain of $
We recognized a net gain of $
Credit-risk-related Contingent Features
Certain of our derivative contracts contain cross default provisions which provide that a default under our revolving credit agreement would cause a default under the derivative contract. As of December 31, 2025, we have not posted any collateral related to these contracts. The fair value of derivatives in a net liability position related to these arrangements was $
95
Note 12: Fair Value Measurement
Fair value adjustments, net is comprised of the following (in thousands):
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
(Loss) gain on derivative contracts |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
Unrealized gain (loss) on investments in equity securities |
|
|
|
|
|
|
|
|
( |
) |
||
|
|
|
|
|
|
|
|
|
||||
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 fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). 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 (in thousands) 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. See Note 7 for information on the fair values of our defined benefit pension plan assets.
|
|
Balance at |
|
|
Balance at |
|
|
Input |
||
Assets: |
|
|
|
|
|
|
|
|
||
Cash and cash equivalents: |
|
|
|
|
|
|
|
|
||
Money market funds and other bank deposits |
|
$ |
|
|
$ |
|
|
Level 1 |
||
Current and non-current investments: |
|
|
|
|
|
|
|
|
||
Equity securities |
|
|
|
|
|
|
|
Level 1 |
||
Trade accounts receivable: |
|
|
|
|
|
|
|
|
||
Receivables from provisional concentrate sales |
|
|
|
|
|
|
|
Level 2 |
||
Derivative contracts - other current assets and other non-current assets: |
|
|
|
|
|
|
|
|
||
Metal forward contracts |
|
|
|
|
|
|
|
Level 2 |
||
Foreign exchange contracts |
|
|
|
|
|
|
|
Level 2 |
||
Restricted cash and cash equivalents balances: |
|
|
|
|
|
|
|
|
||
Certificates of deposit and other deposits |
|
|
|
|
|
|
|
Level 1 |
||
|
|
|
|
|
|
|
|
|
||
Liabilities |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|||
Metal forward contracts |
|
$ |
|
|
$ |
|
|
Level 2 |
||
Foreign exchange contracts |
|
|
|
|
|
|
|
Level 2 |
||
Cash and cash equivalents consist primarily of money market funds which are carried at fair value.
Current and non-current restricted cash and cash equivalents balances consist primarily of certificates of deposit, U.S. Treasury securities, and other deposits which are carried at fair value.
Our current and non-current investments consist of marketable equity securities of companies in the mining industry which are valued using quoted market prices for each security.
96
Trade accounts receivable include amounts due to us for shipments of concentrates, doré, metals sold from doré, and carbon material sold to customers. Revenues and the corresponding accounts receivable for sales of metals products are recorded when title and risk of loss transfer to the customer (generally at the time of ship loading, or at the time of arrival at the customer for trucked products). Sales of concentrates are recorded using estimated forward prices for the anticipated month of settlement applied to our estimate of payable metal quantities contained in each shipment. Sales are recorded net of estimated treatment and refining charges, which are also impacted by changes in metals prices and quantities of contained metals. We estimate the prices at which sales of our concentrates will be settled due to the time elapsed between shipment and final settlement with the customer. Receivables for previously recorded concentrate sales are adjusted to reflect estimated forward metals prices at the end of each period until final settlement by the customer. We obtain the forward metals prices used each period from a pricing service. Changes in metals prices between shipment and final settlement result in changes to revenues previously recorded upon shipment.
We use financially-settled forward contracts to manage exposure to changes in the exchange rate between the USD and CAD, and the impact on CAD-denominated operating and capital costs incurred at our Keno Hill development project (see Note 11 for more information). The contracts related to operating costs qualify for hedge accounting, while the contracts related to capital costs have not been designated as hedges. Unrealized gains and losses related to the effective portion of the contracts designated as hedges are included in accumulated other comprehensive loss, and unrealized gains and losses related to the contracts not designated as hedges and the ineffective portion of the contracts designated as hedges are included in earnings each period. 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 some combination of financially-settled forward contracts and commodity price collars to manage the exposure to changes in prices of silver, gold, zinc and lead contained in our concentrate shipments that have not reached final settlement. We also use financially-settled forward contracts, commodity price collars and silver put options to manage the exposure to changes in prices of silver, gold, lead and zinc contained in our forecasted future concentrate shipments (see Note 11 for more information). The derivative instruments for silver and gold contained in our concentrate shipments have not been designated as hedges and are marked-to-market through earnings each period. 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.
At December 31, 2025, our Senior Notes were recorded at their carrying value of $
Note 13: Stockholders’ Equity
Authorized Share Capital
At our annual meeting of shareholders on May 21, 2025, our stockholders approved an amendment to our restated certification of incorporation increasing the number of authorized shares of our common stock from
Common Stock
Subject to the rights of the holders of any outstanding shares of preferred stock, each share of common stock is entitled to: (i) one vote on all matters presented to the stockholders, with no cumulative voting rights; (ii) receive such dividends as may be declared by the Board of Directors out of funds legally available therefor; and (iii) in the event of our liquidation or dissolution, share ratably in any distribution of our assets.
Dividends
In September 2011 and February 2012, our Board of Directors (“Board”) adopted a common stock dividend policy that had two components: (1) a dividend that links the amount of dividends on our common stock to our average quarterly realized silver price in the preceding quarter, and (2) a minimum annual dividend of $
In early February 2025, we revised our common stock dividend policy to eliminate the silver-linked component while maintaining the annual common stock dividend, however the declaration and payment of dividends remain in the sole discretion of our Board of Directors, and there can be no assurance it will declare any future dividend.
97
Total quarterly common stock and preferred stock dividends declared by our Board for the years ended December 31, 2025, 2024 and 2023 amounted to $
At-The-Market Equity Distribution Agreement
Pursuant to an equity distribution agreement dated February 18, 2021, we may offer and sell up to
Common Stock Repurchase Program
In 2012, our Board approved a stock repurchase program under which we are authorized to repurchase up to
Preferred Stock
We have
Stock Award Plans
We use stock-based compensation plans to aid us in attracting, retaining and motivating our employees, as well as to provide incentives more directly linked to increases in stockholder value. These plans provide for the grant of options to purchase shares of our common stock, the issuance of restricted stock units, performance-based shares and other equity-based awards.
Stock-based compensation expense amounts for restricted stock units, performance based grants and common stock grants (collectively "incentive compensation") to employees, shares granted to the interim CEO (in 2024) and non-employee directors totaled $
Stock Incentive Plan
During 2010, our stockholders voted to approve the adoption of our 2010 Stock Incentive Plan and to reserve up to
98
the plan to restore the number of shares of common stock available for issuance under the 2010 plan to the original
Directors’ Stock Plan
In 2017, we adopted the amended and restated Hecla Mining Company Stock Plan for Non-Employee Directors (the “Directors’ Stock Plan”), which may be terminated by our Board of Directors at any time. Each non-employee director is credited each year with that number of shares determined by dividing $
Restricted Stock Units
Unvested restricted stock units ("RSU") activity granted by the Board to employees are summarized as follows:
|
|
Shares |
|
|
Weighted Average |
|
||
Unvested, January 1, 2023 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
$ |
|
||
Canceled |
|
|
( |
) |
|
$ |
|
|
Vested |
|
|
( |
) |
|
$ |
|
|
Unvested, December 31, 2023 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
$ |
|
||
Canceled |
|
|
( |
) |
|
$ |
|
|
Vested |
|
|
( |
) |
|
$ |
|
|
Unvested, December 31, 2024 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
$ |
|
||
Canceled |
|
|
( |
) |
|
$ |
|
|
Vested |
|
|
( |
) |
|
$ |
|
|
Unvested, December 31, 2025 |
|
|
|
|
$ |
|
||
Unvested RSUs will be forfeited by participants upon termination of employment in advance of vesting, with the exception of termination due to retirement if certain criteria are met. At December 31, 2025, there was unrecognized compensation expense of $
Performance-Based Shares
We periodically grant performance-based share awards ("PSUs") to certain senior employees. The value of the PSUs (if any) is based on the ranking of the market performance of our common stock relative to the performance of the common stock of a group of peer companies over a
99
Unvested PSUs activity granted by the Board to eligible employees are summarized as follows:
|
|
Shares |
|
|
Weighted Average |
|
||
Unvested, January 1, 2023 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
$ |
|
||
Canceled |
|
|
( |
) |
|
$ |
|
|
Vested (1) |
|
|
( |
) |
|
$ |
|
|
Unvested, December 31, 2023 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
$ |
|
||
Forfeited (2) |
|
|
( |
) |
|
$ |
|
|
Unvested, December 31, 2024 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
$ |
|
||
Vested (1) |
|
|
( |
) |
|
$ |
|
|
Cancelled |
|
|
( |
) |
|
$ |
|
|
Unvested, December 31, 2025 |
|
|
|
|
$ |
|
||
(1)
Unvested PSUs will be forfeited by participants upon termination of employment in advance of vesting. At December 31, 2025, there was unrecognized compensation expense of $
In connection with the vesting of RSUs, PSUs and other stock grants, employees have in the past, at their election and when permitted by us, chosen to satisfy their tax withholding obligations through net share settlement, pursuant to which we withhold the number of shares necessary to satisfy such withholding obligations and pay the obligations in cash. Pursuant to such net settlements, in 2025, we withheld
Warrants
We have
During 2024, the warrant holder of
100
Note 14: Accumulated Other Comprehensive Income (Loss)
The following table lists the beginning balance, yearly activity and ending balance of each component of “Accumulated Other Comprehensive Income (Loss), net” (in thousands):
|
|
Changes in fair value of derivative contracts designated as hedge transactions |
|
|
Adjustments |
|
|
Total |
|
|||
Balance January 1, 2023 |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Other comprehensive income (loss) before reclassification |
|
|
|
|
|
( |
) |
|
|
|
||
Reclassification from AOCI to sales |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Reclassification from AOCI to discontinued operations |
|
|
|
|
|
|
|
|
|
|||
Reclassification from AOCI to other expense (income) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Provision for income taxes |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Net current year other comprehensive income (loss) |
|
|
|
|
|
( |
) |
|
|
|
||
Balance December 31, 2023 |
|
|
|
|
|
( |
) |
|
|
|
||
Other comprehensive loss before reclassification |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Reclassification from AOCI to sales |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Reclassification from AOCI to discontinued operations |
|
|
|
|
|
|
|
|
|
|||
Reclassification from AOCI to other expense (income) |
|
|
|
|
|
|
|
|
|
|||
Provision for income taxes |
|
|
|
|
|
|
|
|
|
|||
Net current year other comprehensive loss |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance December 31, 2024 |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Other comprehensive income before reclassification |
|
|
|
|
|
|
|
|
|
|||
Reclassification from AOCI to sales |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Reclassification from AOCI to discontinued operations |
|
|
|
|
|
|
|
|
|
|||
Reclassification from AOCI to fair value adjustments |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Reclassification from AOCI to other expense (income) |
|
|
|
|
|
|
|
|
|
|||
Provision for income taxes |
|
|
( |
) |
|
|
|
|
|
|
||
Net current year other comprehensive (loss) income |
|
|
( |
) |
|
|
|
|
|
|
||
Balance December 31, 2025 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
See Note 7 for more information on our employee benefit plans and Note 11 for more information on our derivative instruments.
Note 15: Product Inventories
Product Inventories
Our major components of product inventories are (in thousands):
|
|
2025 |
|
|
2024 |
|
||
Concentrates |
|
$ |
|
|
$ |
|
||
Stockpiled ore |
|
|
|
|
|
|
||
Total product inventories |
|
|
|
|
|
|
||
Note 16: Properties, Plants, Equipment and Mine Development, net, and Lease Commitments
Properties, Plants, Equipment and Mine Development
Our major components of properties, plants, equipment, and mine development are (in thousands):
101
|
|
December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
|
|
|
|
|
||
Mining properties, including asset retirement obligations |
|
$ |
|
|
$ |
|
||
Development costs |
|
|
|
|
|
|
||
Plants and equipment |
|
|
|
|
|
|
||
Land |
|
|
|
|
|
|
||
Mineral interests |
|
|
|
|
|
|
||
Construction in progress |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Less accumulated depreciation, depletion and amortization |
|
|
|
|
|
|
||
Net carrying value |
|
$ |
|
|
$ |
|
||
During 2025, we incurred total capital expenditures of $
Mineral interests include amounts for value beyond proven and probable reserves (“VBPP”) related to mines and exploration or pre-development interests acquired by us which are not depleted until the mineralized material they relate to is converted to proven and probable reserves. As of December 31, 2025, mineral interests included VBPP assets of $
Note 17: 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 $
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 $
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.
102
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.
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 $
Debt
See Note 10 for information on the commitments related to our debt arrangements as of December 31, 2025.
Other Commitments
Our contractual obligations as of December 31, 2025 included open purchase orders and commitments of $
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, including two active lawsuits in federal courts in Idaho and Alaska, respectively, involving labor and employment matters. 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.
103
EXHIBIT 99.2
Item 1. Financial Statements
Hecla Mining Company
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income (Unaudited)
(Dollars and shares in thousands, except for per-share amounts)
|
|
Three Months Ended |
|
|||||
|
|
March 31, 2026 |
|
|
March 31, 2025 |
|
||
Sales |
|
$ |
|
|
$ |
|
||
COSTS AND EXPENSES |
|
|
|
|
|
|
||
Costs applicable to sales(1) |
|
|
|
|
|
|
||
Depreciation, depletion and amortization |
|
|
|
|
|
|
||
General and administrative |
|
|
|
|
|
|
||
Exploration and pre-development |
|
|
|
|
|
|
||
Care and maintenance |
|
|
|
|
|
|
||
Provision for closed operations and environmental matters |
|
|
|
|
|
|
||
Other operating expense, net |
|
|
|
|
|
|
||
Total costs and expenses |
|
|
|
|
|
|
||
Income from continuing operations |
|
|
|
|
|
|
||
Other expense: |
|
|
|
|
|
|
||
Interest expense |
|
|
( |
) |
|
|
( |
) |
Fair value adjustments, net |
|
|
( |
) |
|
|
|
|
Net foreign exchange gain (loss) |
|
|
|
|
|
( |
) |
|
Other income |
|
|
|
|
|
|
||
Total other expense |
|
|
( |
) |
|
|
( |
) |
Income before income and mining taxes |
|
|
|
|
|
|
||
Income and mining tax provision |
|
|
( |
) |
|
|
( |
) |
Income from continuing operations |
|
|
|
|
|
|
||
(Loss) income from discontinued operations, net of income and mining taxes |
|
|
( |
) |
|
|
|
|
Net (loss) income |
|
|
( |
) |
|
|
|
|
Preferred stock dividends |
|
|
( |
) |
|
|
( |
) |
Net (loss) income applicable to common stockholders |
|
$ |
( |
) |
|
$ |
|
|
|
|
|
|
|
|
|
||
Comprehensive (loss) income: |
|
|
|
|
|
|
||
Net income from continuing operations |
|
$ |
|
|
$ |
|
||
Change in fair value of derivative contracts designated as hedge transactions and other |
|
|
( |
) |
|
|
|
|
Comprehensive income from continuing operations |
|
|
|
|
|
|
||
Comprehensive loss from discontinued operations |
|
|
( |
) |
|
|
|
|
Comprehensive (loss) income |
|
$ |
( |
) |
|
$ |
|
|
|
|
|
|
|
|
|
||
Net (loss) income per common share: |
|
|
|
|
|
|
||
Basic: |
|
|
|
|
|
|
||
Continuing operations |
|
$ |
|
|
$ |
|
||
Discontinued operations |
|
|
( |
) |
|
|
|
|
Basic (loss) income per common share after preferred dividends |
|
$ |
( |
) |
|
$ |
|
|
|
|
|
|
|
|
|
||
Diluted (loss) income per common share: |
|
|
|
|
|
|
||
Continuing operations |
|
$ |
|
|
$ |
|
||
Discontinued operations |
|
|
( |
) |
|
|
|
|
Diluted (loss) income per common share after preferred dividends |
|
$ |
( |
) |
|
$ |
|
|
|
|
|
|
|
|
|
||
Weighted average number of common shares outstanding - basic |
|
|
|
|
|
|
||
Weighted average number of common shares outstanding - diluted |
|
|
|
|
|
|
||
(1)
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
1
Hecla Mining Company
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
|
|
Three Months Ended |
|
|||||
|
|
March 31, 2026 |
|
|
March 31, 2025 |
|
||
Operating activities: |
|
|
|
|
|
|
||
Net (loss) income |
|
$ |
( |
) |
|
$ |
|
|
Less: (Loss) income from discontinued operations, net of income and mining taxes |
|
|
( |
) |
|
|
|
|
Income from continuing operations |
|
$ |
|
|
$ |
|
||
Non-cash elements included in net (loss) income: |
|
|
|
|
|
|
||
Depreciation, depletion and amortization |
|
|
|
|
|
|
||
Inventory adjustments |
|
|
|
|
|
|
||
Fair value adjustments, net |
|
|
|
|
|
( |
) |
|
Provision for reclamation and closure costs |
|
|
|
|
|
|
||
Stock-based compensation |
|
|
|
|
|
|
||
Deferred income taxes |
|
|
|
|
|
|
||
Net foreign exchange (gain) loss |
|
|
( |
) |
|
|
|
|
Other non-cash items, net |
|
|
|
|
|
|
||
Change in assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
( |
) |
|
|
( |
) |
Inventories |
|
|
|
|
|
( |
) |
|
Other current and non-current assets |
|
|
( |
) |
|
|
|
|
Accounts payable, accrued and other current liabilities |
|
|
( |
) |
|
|
( |
) |
Accrued payroll and related benefits |
|
|
( |
) |
|
|
( |
) |
Accrued taxes |
|
|
|
|
|
|
||
Accrued reclamation and closure costs and other non-current liabilities |
|
|
|
|
|
( |
) |
|
Cash provided by operating activities of continuing operations |
|
|
|
|
|
|
||
Cash provided by operating activities of discontinued operations |
|
|
|
|
|
|
||
Net cash provided by operating activities |
|
|
|
|
|
|
||
Investing activities: |
|
|
|
|
|
|
||
Additions to property, plants, equipment and mine development |
|
|
( |
) |
|
|
( |
) |
Proceeds from sale of Hecla Quebec, net of transaction costs |
|
|
|
|
|
|
||
Proceeds from sale of Minera Hecla |
|
|
|
|
|
|
||
Proceeds from sales of investments |
|
|
|
|
|
|
||
Purchases of investments |
|
|
( |
) |
|
|
|
|
Proceeds from asset dispositions |
|
|
|
|
|
|
||
Net cash provided by (used in) investing activities of continuing operations |
|
|
|
|
|
( |
) |
|
Net cash used in investing activities of discontinued operations |
|
|
( |
) |
|
|
( |
) |
Net cash provided by (used in) investing activities |
|
|
|
|
|
( |
) |
|
Financing activities: |
|
|
|
|
|
|
||
Proceeds from sale of common stock, net |
|
|
|
|
|
|
||
Acquisition of treasury stock |
|
|
( |
) |
|
|
|
|
Borrowing of debt |
|
|
|
|
|
|
||
Repayment of debt |
|
|
|
|
|
( |
) |
|
Dividends paid to common and preferred stockholders |
|
|
( |
) |
|
|
( |
) |
Repayments of finance leases and other |
|
|
( |
) |
|
|
( |
) |
Net cash (used in) provided by financing activities of continuing operations |
|
|
( |
) |
|
|
|
|
Net cash used in financing activities of discontinued operations |
|
|
( |
) |
|
|
( |
) |
Net cash (used in) provided by financing activities |
|
|
( |
) |
|
|
|
|
Effect of exchange rates on cash |
|
|
( |
) |
|
|
( |
) |
Net increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents |
|
|
|
|
|
( |
) |
|
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period |
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash and cash equivalents at end of period |
|
$ |
|
|
$ |
|
||
Reconciliation of cash and cash equivalents and restricted cash and cash equivalents above |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Non-current restricted cash and cash equivalents |
|
$ |
|
|
|
|
||
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 |
|
$ |
|
|
$ |
|
||
Cash paid for income and mining taxes, net |
|
$ |
|
|
|
|
||
Significant non-cash investing and financing activities: |
|
|
|
|
|
|
||
Common stock issued as incentive compensation |
|
$ |
|
|
|
|
||
Common stock issued for 401(k) match |
|
$ |
|
|
|
|
||
Common shares and royalty asset received for sale of Hecla Quebec |
|
$ |
|
|
|
|
||
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
2
Hecla Mining Company
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except shares)
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||
ASSETS |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Accounts receivable: |
|
|
|
|
|
|
||
Trade |
|
|
|
|
|
|
||
Other, net |
|
|
|
|
|
|
||
Inventories: |
|
|
|
|
|
|
||
Product inventories |
|
|
|
|
|
|
||
Materials and supplies |
|
|
|
|
|
|
||
Current investments |
|
|
|
|
|
|
||
Other current assets |
|
|
|
|
|
|
||
Assets of discontinued operations |
|
|
|
|
|
|
||
Total current assets |
|
|
|
|
|
|
||
Non-current investments |
|
|
|
|
|
|
||
Restricted cash and cash equivalents |
|
|
|
|
|
|
||
Property, plants, equipment and mine development, net |
|
|
|
|
|
|
||
Operating lease right-of-use assets |
|
|
|
|
|
|
||
Other non-current assets |
|
|
|
|
|
|
||
Assets of discontinued operations |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
||
LIABILITIES |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable and accrued liabilities |
|
$ |
|
|
$ |
|
||
Accrued payroll and related benefits |
|
|
|
|
|
|
||
Accrued taxes |
|
|
|
|
|
|
||
Finance leases |
|
|
|
|
|
|
||
Accrued reclamation and closure costs |
|
|
|
|
|
|
||
Accrued interest |
|
|
|
|
|
|
||
Derivative liabilities |
|
|
|
|
|
|
||
Other current liabilities |
|
|
|
|
|
|
||
Liabilities of discontinued operations |
|
|
|
|
|
|
||
Total current liabilities |
|
|
|
|
|
|
||
Accrued reclamation and closure costs |
|
|
|
|
|
|
||
Long-term debt including finance leases |
|
|
|
|
|
|
||
Deferred tax liabilities |
|
|
|
|
|
|
||
Other non-current liabilities |
|
|
|
|
|
|
||
Liabilities of discontinued operations |
|
|
|
|
|
|
||
Total liabilities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|||
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Preferred stock, |
|
|
|
|
|
|
||
Series B preferred stock, $ |
|
|
|
|
|
|
||
Common stock, $ |
|
|
|
|
|
|
||
Capital surplus |
|
|
|
|
|
|
||
Accumulated deficit |
|
|
( |
) |
|
|
( |
) |
Accumulated other comprehensive loss, net |
|
|
( |
) |
|
|
( |
) |
Less treasury stock, at cost; March 31, 2026 — |
|
|
( |
) |
|
|
( |
) |
Total stockholders’ equity |
|
|
|
|
|
|
||
Total liabilities and stockholders’ equity |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
3
Hecla Mining Company
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)
(Dollars are in thousands, except for share and per share amounts)
|
|
Three Months Ended March 31, 2026 |
||||||||||||
|
|
Series B |
|
Common |
|
Capital Surplus |
|
Accumulated |
|
Accumulated |
|
Treasury |
|
Total |
Balances, January 1, 2026 |
|
$ |
|
$ |
|
$ |
|
$( |
|
$( |
|
$( |
|
$ |
Net loss |
|
— |
|
— |
|
— |
|
( |
|
— |
|
— |
|
( |
Stock-based compensation expense |
|
— |
|
|
|
|
— |
|
— |
|
— |
|
||
Stock-based compensation distributed ( |
|
— |
|
|
( |
|
— |
|
— |
|
( |
|
( |
|
Common stock issued for warrant conversion ( |
|
— |
|
|
|
— |
|
— |
|
|
|
|||
Common stock issued for 401(k) match ( |
|
— |
|
|
|
— |
|
— |
|
— |
|
|||
Common stock ($ |
|
— |
|
— |
|
— |
|
( |
|
— |
|
— |
|
( |
Other comprehensive loss |
|
— |
|
— |
|
— |
|
— |
|
( |
|
— |
|
( |
Balances, March 31, 2026 |
|
$ |
|
$ |
|
$ |
|
$( |
|
$( |
|
$( |
|
$ |
|
|
Three Months Ended March 31, 2025 |
||||||||||||
|
|
Series B |
|
Common |
|
Capital Surplus |
|
Accumulated |
|
Accumulated |
|
Treasury |
|
Total |
Balances, January 1, 2025 |
|
$ |
|
$ |
|
$ |
|
$( |
|
$( |
|
$( |
|
$ |
Net income |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
||
Stock-based compensation expense |
|
— |
|
— |
|
|
— |
|
— |
|
— |
|
||
Stock-based compensation distributed ( |
|
— |
|
|
|
— |
|
— |
|
|
||||
Common stock ($ |
|
— |
|
— |
|
— |
|
( |
|
— |
|
— |
|
( |
Common stock issued for 401(k) match ( |
|
— |
|
|
|
— |
|
— |
|
— |
|
|||
Other comprehensive income |
|
— |
|
— |
|
— |
|
— |
|
|
— |
|
||
Balances, March 31, 2025 |
|
$ |
|
$ |
|
$ |
|
$( |
|
$( |
|
$( |
|
$ |
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
4
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 months ended March 31, 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 in Quebec, Canada, and other exploration properties in Quebec, Canada, to Orezone Gold Corporation ("Orezone") for total undiscounted consideration of up to $
During the quarter 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 $
Note 2. 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. Subsequent to March 31, 2026, 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 $
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 closure excess amount to be withheld from the first payment. The Deferred Cash
5
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.
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 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 $
Below is a summary of Hecla Quebec's results from discontinued operations for the first quarters of 2026 and 2025 and statement of financial position as of December 31, 2025.
6
Hecla Quebec Inc.
Results of Discontinued Operations
(Dollars are in Thousands)
|
Three Months Ended |
|
|||||
|
March 31, 2026 |
|
|
March 31, 2025 |
|
||
Sales |
$ |
|
|
$ |
|
||
COSTS AND EXPENSES |
|
|
|
|
|
||
Costs applicable to sales(1) |
|
|
|
|
|
||
Depreciation, depletion and amortization |
|
|
|
|
|
||
Exploration and pre-development |
|
|
|
|
|
||
Other operating expense, net |
|
|
|
|
|
||
Total costs and expenses |
|
|
|
|
|
||
Income from discontinued operations |
|
|
|
|
|
||
Other (expense) income: |
|
|
|
|
|
||
Interest expense |
|
( |
) |
|
|
( |
) |
Fair value adjustments, net |
|
( |
) |
|
|
|
|
Net foreign exchange loss |
|
|
|
|
|
||
Total other (expense) income |
|
( |
) |
|
|
|
|
Income from discontinued operations, before income and mining tax provision |
|
|
|
|
|
||
Loss on disposal of Hecla Quebec Inc. |
|
( |
) |
|
|
|
|
Income and mining tax provision |
|
( |
) |
|
|
( |
) |
(Loss) income from discontinued operations |
$ |
( |
) |
|
$ |
|
|
(1)
Hecla Quebec Inc.
Reconciliation of Assets and Liabilities of Discontinued Operations to Balance Sheet
(Dollars are in Thousands)
|
|
December 31, 2025 |
|
|
ASSETS |
|
|
|
|
Accounts receivable |
|
$ |
|
|
Inventories: |
|
|
|
|
Product inventories |
|
|
|
|
Materials and supplies |
|
|
|
|
Prepaid expenses |
|
|
|
|
Assets of discontinued operations, current |
|
|
|
|
Property, plants, equipment and mine development, net |
|
|
|
|
Other non-current assets |
|
|
|
|
Assets of discontinued operations, non-current |
|
|
|
|
Total assets |
|
$ |
|
|
LIABILITIES |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
|
|
Accrued payroll and related benefits |
|
|
|
|
Accrued taxes |
|
|
|
|
Finance leases |
|
|
|
|
Liabilities of discontinued operations, current |
|
|
|
|
Accrued reclamation and closure costs |
|
|
|
|
Deferred tax liabilities |
|
|
|
|
Other non-current liabilities |
|
|
|
|
Liabilities of discontinued operations, non-current |
|
|
|
|
Total liabilities |
|
$ |
|
|
7
Note 3. 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
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 segment gross profit or loss. For all segments, the CODM uses segment gross profit or loss to assess segment performance and allocate resources for each segment predominantly in the annual budget and 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 are components of total cost of goods sold and 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 metals 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 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 months ended March 31, 2026 and 2025 (in thousands):
Three months ended March 31, 2026 |
Greens Creek |
|
Lucky Friday |
|
Keno Hill |
|
Total Reportable Segments |
|
Other |
|
Total |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Metal sales |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||
Environmental remediation services |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Intersegment sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Reconciliation of sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Elimination of intersegment sales |
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
|
— |
|
|
( |
) |
Total consolidated sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Salaries, wages and other benefits |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Contractors |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Materials and consumables |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Product inventory change |
|
|
|
( |
) |
|
( |
) |
|
|
|
|
|
|
||||
Other direct production costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Depreciation, depletion and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Gross profit (loss) |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
|||||
Other operating expenses (a) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Income from operations |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other Expense: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||||
Fair value adjustments, net |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||||
Foreign exchange gain, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Income before income and mining taxes |
|
|
|
|
|
|
|
|
|
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Capital additions |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||
(a)
8
Three months ended March 31, 2025 |
Greens Creek |
Lucky Friday |
Keno Hill |
Total Reportable Segments |
Other |
Total |
|
|
|
|
|
|
|
Metal sales |
$ |
$ |
$ |
$ |
$ |
$ |
Environmental remediation services |
||||||
Intersegment sales |
||||||
Reconciliation of sales |
||||||
Elimination of intersegment sales |
( |
( |
( |
|||
Total consolidated sales |
|
|
|
|
|
|
Salaries, wages and employee benefits |
||||||
Contractors |
||||||
Materials and consumables |
||||||
Product inventory change |
( |
( |
( |
|||
Other direct production costs |
( |
|||||
Depreciation, depletion and amortization |
||||||
Gross profit |
$ |
$ |
$ |
$ |
$( |
$ |
Other operating expenses (a) |
|
|
|
|
|
|
Income from operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Expense: |
|
|
|
|
|
|
Interest expense |
|
|
|
|
|
( |
Fair value adjustments, net |
|
|
|
|
|
|
Foreign exchange loss, net |
|
|
|
|
|
( |
Other income |
|
|
|
|
|
|
Income before income and mining taxes |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
Capital additions |
$ |
$ |
$ |
$ |
$ |
$ |
(a)
Other sales for the three months ended March 31, 2026 and 2025 is solely comprised of revenue from our environmental remediation services subsidiary in the Yukon. During the three months ended March 31, 2026, Keno Hill sold $
Sales by metal for the three months ended March 31, 2026 and 2025 were as follows (in thousands):
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Silver |
|
$ |
|
|
$ |
|
||
Gold |
|
|
|
|
|
|
||
Lead |
|
|
|
|
|
|
||
Zinc |
|
|
|
|
|
|
||
Copper |
|
|
|
|
|
|
||
Less: Smelter and refining charges |
|
|
( |
) |
|
|
( |
) |
Total metal sales |
|
|
|
|
|
|
||
Environmental remediation services |
|
|
|
|
|
|
||
Total sales |
|
$ |
|
|
$ |
|
||
Sales of metals for the three months ended March 31, 2026 include net loss) on derivative contracts for silver, lead and zinc on such contracts. See Note 9 for more information.
9
The following table presents total assets by reportable segment as of March 31, 2026 and December 31, 2025 (in thousands):
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||
Total assets: |
|
|
|
|
|
|
||
Greens Creek |
|
$ |
|
|
$ |
|
||
Lucky Friday |
|
|
|
|
|
|
||
Keno Hill |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total assets of reportable segments |
|
|
|
|
|
|
||
Assets of discontinued operations |
|
|
|
|
|
|
||
Total assets |
|
|
|
|
|
|
||
Note 4. Income and Mining Taxes
Major components of our income and mining tax for the three months ended March 31, 2026 and 2025 are as follows (in thousands):
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Current: |
|
|
|
|
|
|
||
Domestic |
|
$ |
( |
) |
|
$ |
( |
) |
Foreign |
|
|
( |
) |
|
|
|
|
Total current income and mining tax provision |
|
|
( |
) |
|
|
( |
) |
Deferred: |
|
|
|
|
|
|
||
Domestic |
|
|
( |
) |
|
|
( |
) |
Foreign |
|
|
( |
) |
|
|
( |
) |
Total deferred income and mining tax provision |
|
|
( |
) |
|
|
( |
) |
Total income and mining tax provision |
|
$ |
( |
) |
|
$ |
( |
) |
The income and mining tax provision for the three months ended March 31, 2026 and 2025 varies from the amounts that would have resulted from applying the statutory tax rates to pre-tax income or loss due primarily to the impact of taxation in foreign jurisdictions, domestic and foreign mining taxes, percentage depletion, non-recognition of net operating losses and the tax effect of Global Intangible Low-Taxed Income and subpart F income inclusion.
For the three months ended March 31, 2026, we used the annual effective tax rate method to calculate the tax provision. Valuation allowances on Nevada and certain Canadian net operating losses were treated as discrete adjustments to 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 provinces of British Columbia and Quebec, and the Yukon Territory. During the quarter, we concluded a Canada Revenue Agency audit of one of our Canadian subsidiaries with no adjustments to our filed tax positions.
Note 5. 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 months ended March 31, 2026 and 2025 (in thousands):
|
|
Three Months Ended |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Service cost |
|
$ |
|
|
$ |
|
||
Interest cost |
|
|
|
|
|
|
||
Expected return on plan assets |
|
|
( |
) |
|
|
( |
) |
Amortization of prior service cost |
|
|
|
|
|
|
||
Amortization of net loss |
|
|
|
|
|
|
||
Net periodic pension cost |
|
$ |
|
|
$ |
|
||
For the three months ended March 31, 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 months
10
ended March 31, 2026, the net benefit related to all other components of net periodic pension cost of $
Note 6. 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.
The following table represents net (loss) income per common share – basic and diluted (in thousands, except income
(loss) per share):
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Numerator |
|
|
|
|
|
|
||
Income from continuing operations |
|
$ |
|
|
$ |
|
||
Loss from discontinued operations |
|
|
( |
) |
|
|
|
|
Preferred stock dividends |
|
|
( |
) |
|
|
( |
) |
Net (loss) income applicable to common stockholders |
|
$ |
( |
) |
|
$ |
|
|
|
|
|
|
|
|
|
||
Denominator |
|
|
|
|
|
|
||
Basic weighted average common shares |
|
|
|
|
|
|
||
Dilutive units |
|
|
|
|
|
|
||
Diluted weighted average common shares |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Basic income (loss) per share: |
|
|
|
|
|
|
||
Income from continuing operations |
|
$ |
|
|
$ |
|
||
(Loss) income from discontinued operations |
|
|
( |
) |
|
|
|
|
Basic (loss) earnings per common share after preferred dividends |
|
$ |
( |
) |
|
$ |
|
|
|
|
|
|
|
|
|
||
Diluted income (loss) per share: |
|
|
|
|
|
|
||
Income from continuing operations |
|
$ |
|
|
$ |
|
||
(Loss) income from discontinued operations |
|
|
( |
) |
|
|
|
|
Diluted (loss) earnings per common share after preferred dividends |
|
$ |
( |
) |
|
$ |
|
|
Note 7. Stockholders’ Equity
Warrants
We have
At-The-Market ("ATM") Equity Distribution Agreement
Pursuant to an equity distribution agreement dated February 18, 2021, we may offer and sell up to
we have sold
Stock-based Compensation Plans
11
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 months ended March 31, 2026, stock-based compensation expense for restricted stock units and performance-based grants to employees, totaled $
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 withholding obligations and pays the obligations in cash. As a result, in the three months ended March 31, 2026, we withheld
Common Stock Dividends
During the first quarter of 2026, our Board of Directors declared and we paid a quarterly dividend of $
Accumulated Other Comprehensive (Loss), Net
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 (loss), net” (in thousands):
|
|
Changes in fair value of derivative contracts designated as hedge transactions |
|
|
Adjustments |
|
|
Total |
|
|||
Balance January 1, 2026 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Other comprehensive loss before reclassification |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Reclassification from AOCI to sales |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Reclassification from AOCI to costs applicable to sales |
|
|
|
|
|
|
|
|
|
|||
Reclassification from AOCI to fair value adjustments, net |
|
|
|
|
|
|
|
|
|
|||
Provision for income taxes |
|
|
|
|
|
|
|
|
|
|||
Balance March 31, 2026 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|||
Balance January 1, 2025 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Other comprehensive loss before reclassification |
|
|
|
|
|
|
|
|
|
|||
Reclassification from AOCI to sales |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Reclassification from AOCI to costs applicable to sales |
|
|
|
|
|
|
|
|
|
|||
Provision for income taxes |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Balance March 31, 2025 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Note 8. Debt, Credit Agreement and Leases
Our debt as of March 31, 2026 and December 31, 2025 consisted of our
The following tables summarize our long-term debt balances as of March 31, 2026 and December 31, 2025 (in thousands):
|
|
March 31, 2026 |
|
|
|
|
Senior Notes |
|
|
Principal |
|
$ |
|
|
Unamortized discount and issuance costs |
|
|
( |
) |
Long-term debt |
|
$ |
|
|
12
|
|
December 31, 2025 |
|
|
|
|
Senior Notes |
|
|
Principal |
|
$ |
|
|
Unamortized discount/premium and issuance costs |
|
|
( |
) |
Total debt |
|
$ |
|
|
The following table summarizes the scheduled annual future payments, including interest, for our Senior Notes, finance and operating leases as of March 31, 2026 (in thousands). Operating leases are included in other current and non-current liabilities on our condensed consolidated balance sheets. See Note 14 for more information.
Twelve-month period ending March 31, |
|
Senior Notes |
|
|
Finance Leases |
|
|
Operating Leases |
|
|||
2027 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
2028 |
|
|
|
|
|
|
|
|
|
|||
2029 |
|
|
|
|
|
|
|
|
|
|||
2030 |
|
|
|
|
|
|
|
|
|
|||
2031 |
|
|
|
|
|
|
|
|
|
|||
Thereafter |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Less: effect of discounting |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|||
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 $
At March 31, 2026, we had
We believe we were in compliance with all covenants under the Credit Agreement as of March 31, 2026.
Note 9. Derivative Instruments
General
Our current risk management policy provides that up to
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.
Foreign Currency
Our wholly-owned non-US subsidiaries owning the Keno Hill operation are USD-functional currency entities which routinely incur expenses denominated in CAD. Such expenses expose us to exchange rate fluctuations, for which we have a program to manage our exposure to fluctuations of these subsidiaries' future operating and capital costs denominated in CAD. The program utilizes forward contracts to buy CAD, and are not designated as cash flow hedges.
During the quarter, realized losses of $
As of March 31, 2026, we have a total of
13
As of March 31, 2026 and December 31, 2025, we recorded the following balances for the fair value of the foreign currency forward contracts (in millions):
|
|
March 31, |
|
December 31, |
Balance sheet line item: |
|
2026 |
|
2025 |
Other current assets |
|
$ |
|
$ |
Other current liabilities |
|
( |
|
( |
Net gains of $
Metals Prices
We currently a combination of derivatives including financially-settled forward contracts, commodity price collars ("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 March 31, 2026 and December 31, 2025 and designated and accounted for as cash flow hedges:
March 31, 2026 |
|
Pounds under contract (in 000's) |
|
|
Average price per pound |
|
||||||||||
|
|
Zinc |
|
|
Lead |
|
|
Zinc |
|
|
Lead |
|
||||
|
|
(pounds) |
|
|
(pounds) |
|
|
(pounds) |
|
|
(pounds) |
|
||||
Contracts on provisional sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
2026 settlements |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||||
Contracts on forecasted sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
2026 settlements |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||||
2027 settlements |
|
|
|
|
|
— |
|
|
$ |
|
|
$ |
|
|||
December 31, 2025 |
|
Pounds under contract (in 000's) |
|
|
Average price per ounce/pound |
|
||||||||||
|
|
Zinc |
|
|
Lead |
|
|
Zinc |
|
|
Lead |
|
||||
|
|
(pounds) |
|
|
(pounds) |
|
|
(pounds) |
|
|
(pounds) |
|
||||
Contracts on provisional sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
2026 settlements |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||||
Contracts on forecasted sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
2026 settlements |
|
|
|
|
|
|
|
|
|
|
|
|
||||
2027 settlements |
|
|
|
|
|
|
|
|
|
|
N/A |
|
||||
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, even if market prices rise higher. This strategy helps protect us from significant price drops while still allowing for some upside potential within the minimum and maximum price range. For the three months ended March 31, 2026, these collars had net losses of $
14
Settlement Period |
|
Ounces under contract (in 000's) |
|
|
Average strike price per silver ounce |
|
|
Average strike price per gold ounce |
|
|||||||||||||||
|
|
Silver (ounces) |
|
|
Gold (ounces) |
|
|
Minimum ($) |
|
|
Maximum ($) |
|
|
Minimum ($) |
|
|
Maximum ($) |
|
||||||
Contracts on provisional sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2026 settlements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Contracts on forecasted sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2026 settlements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
In December 2025, we entered into financially-settled put option contracts to manage the exposure of future silver sales to potential declines in market prices of silver. 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 months ended March 31, 2026, we recognized a $
Settlement Period |
|
|
|
Production Protected (in 000's) |
|
|
Strike price per ounce |
|
||
|
|
|
|
Silver (ounces) |
|
|
($) |
|
||
Contracts on forecasted sales |
|
|
|
|
|
|
|
|
||
2026 settlements |
|
|
|
|
|
|
|
|
||
We recorded the following balances for the fair value of the forward metals, Collars and put contracts as of March 31, 2026 and December 31, 2025 (in millions):
|
|
March 31, |
|
|
December 31, |
|
||
Balance sheet line item: |
|
2026 |
|
|
2025 |
|
||
Other current assets |
|
$ |
|
|
$ |
|
||
Other non-current assets |
|
|
|
|
|
|
||
Other current liabilities |
|
|
( |
) |
|
|
( |
) |
Other non-current liabilities |
|
|
( |
) |
|
|
( |
) |
Net realized and unrealized losses of $
During the three months ended March 31, 2026, we recognized a net loss of $
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 March 31, 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 $
15
Note 10. Fair Value Measurement
Fair value adjustments, net is comprised of the following (in thousands):
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Loss on derivative contracts |
|
$ |
( |
) |
|
$ |
( |
) |
Gain on sale of equity securities investments |
|
|
|
|
|
|
||
|
|
( |
) |
|
|
|
||
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 at |
|
|
Balance at |
|
|
Input |
||
Assets: |
|
|
|
|
|
|
|
|
||
Cash and cash equivalents: |
|
|
|
|
|
|
|
|
||
Money market funds and other bank deposits |
|
$ |
|
|
$ |
|
|
Level 1 |
||
Current and non-current investments: |
|
|
|
|
|
|
|
|
||
Equity securities |
|
|
|
|
|
|
|
Level 1 |
||
Trade accounts receivable: |
|
|
|
|
|
|
|
|
||
Receivables from provisional concentrate sales |
|
|
|
|
|
|
|
Level 2 |
||
Restricted cash and cash equivalent balances: |
|
|
|
|
|
|
|
|
||
Certificates of deposit and other deposits |
|
|
|
|
|
|
|
Level 1 |
||
Derivative contracts - current and non-current derivative assets: |
|
|
|
|
|
|
|
|
||
Foreign exchange contracts |
|
|
|
|
|
|
|
Level 2 |
||
|
|
|
|
|
|
|
Level 2 |
|||
Gold-price contingent asset |
|
|
|
|
|
|
|
Level 2 |
||
|
|
|
|
|
|
|
|
|
||
Liabilities: |
|
|
|
|
|
|
|
|
||
Derivative contracts - current and non-current derivative liabilities: |
|
|
|
|
|
|
|
|
||
Foreign exchange contracts |
|
$ |
|
|
$ |
|
|
Level 2 |
||
Metal forward contracts |
|
|
|
|
|
|
|
Level 2 |
||
Cash and cash equivalents consist primarily of money market funds which are carried at fair value.
Current and 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 9 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.
16
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 9 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 2). The contingent assets are valued quarterly using an option pricing model with observable inputs.
At March 31, 2026, our Senior Notes were recorded at their carrying value of $
Note 11. Product Inventories
Our major components of product inventories are (in thousands):
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||
Concentrates |
|
$ |
|
|
$ |
|
||
Stockpiled ore |
|
|
|
|
|
|
||
Total product inventories |
|
$ |
|
|
$ |
|
||
Note 12. 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 $
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 $
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.
17
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 Casa Berardi 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.
As disclosed in Note 2, the sale of our subsidiary that owns the Casa Berardi segment to Orezone Gold Corporation ("Orezone") has been completed. Under the terms of the sale, 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 $
Debt
See Note 8 for information on the commitments related to our debt arrangements as of March 31, 2026.
Other Commitments
Our contractual obligations as of March 31, 2026 included open purchase orders and commitments of $
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, including two active lawsuits in federal courts in Idaho and Alaska, respectively, involving labor and employment matters. 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 13. 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. The ASU is effective for annual periods beginning after December 15, 2026, including interim periods therein. We early adopted ASU 2025-07 in the current period on a prospective basis.
Accounting Standards Updates to Become Effective in Future Periods
18
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: purchases of inventory, employee compensation, depreciation and 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 14. Subsequent Events
Senior Notes
On April 9, 2026, the Company completed the full redemption of its remaining $
19
Forward-Looking Statements
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, 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.
20
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.
Overview
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 2025 silver production in the U.S. and Canada, complemented by meaningful 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 ($602.2 million on an undiscounted basis) comprised of the following:
Orezone has a set-off right to reduce the unpaid balance of the Deferred Contingent Cash 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. 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.
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 our revenue exposure to silver and we are focused on operating in what we view to be the most favorable jurisdictions. Subsequent to March 31, 2026, we used the
21
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 with this 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.
22
First Quarter 2026 Highlights
Operational Achievements:
Financial Performance:
External Factors that Impact our Results
Our financial results vary as a result of fluctuations in market prices primarily for silver and gold and, to a lesser extent, 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 lower interest rate expectations, 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 expenditures, 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 and steel, and higher labor and contractor costs.
Consolidated Results of Continuing Operations
Total sales for the three months ended March 31, 2026 and 2025 were as follows:
|
|
Three Months Ended |
|
|||||
(in thousands) |
|
2026 |
|
|
2025 |
|
||
Silver |
|
$ |
295,633 |
|
|
$ |
117,977 |
|
Gold |
|
|
56,977 |
|
|
|
31,359 |
|
Lead |
|
|
22,297 |
|
|
|
22,106 |
|
Zinc |
|
|
36,873 |
|
|
|
33,125 |
|
Copper |
|
|
412 |
|
|
|
391 |
|
Less: Smelter and refining charges |
|
|
(5,411 |
) |
|
|
(6,712 |
) |
Total metal sales |
|
|
406,781 |
|
|
|
198,246 |
|
Environmental remediation services |
|
|
4,652 |
|
|
|
7,088 |
|
Total sales |
|
$ |
411,433 |
|
|
$ |
205,334 |
|
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 margin generated by us in performing this work.
Total metal sales for the three months ended March 31, 2026 and 2025, and the approximate variances attributed to differences in metals prices, sales volumes and smelter terms, were as follows:
23
(in thousands) |
|
Silver |
|
|
Gold |
|
|
Base metals |
|
|
Less: smelter and refining charges |
|
|
Total sales of products |
|
|||||
Three months ended March 31, 2025 |
|
$ |
117,977 |
|
|
$ |
31,359 |
|
|
$ |
55,622 |
|
|
$ |
(6,712 |
) |
|
$ |
198,246 |
|
Variances - 2026 versus 2025: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Price |
|
|
175,587 |
|
|
|
22,460 |
|
|
|
3,683 |
|
|
|
— |
|
|
|
201,730 |
|
Volume |
|
|
2,069 |
|
|
|
3,158 |
|
|
|
277 |
|
|
|
— |
|
|
|
5,504 |
|
Smelter terms |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,301 |
|
|
|
1,301 |
|
Three months ended March 31, 2026 |
|
$ |
295,633 |
|
|
$ |
56,977 |
|
|
$ |
59,582 |
|
|
$ |
(5,411 |
) |
|
$ |
406,781 |
|
The fluctuation in sales for the three months ended March 31, 2026 compared to the same periods in 2025 was primarily due to the following:
|
|
|
|
Three Months Ended |
|
|||||
|
|
|
|
2026 |
|
|
2025 |
|
||
Silver – |
|
London PM Fix ($/ounce) |
|
$ |
84.39 |
|
|
$ |
31.91 |
|
|
|
Realized price per ounce |
|
$ |
82.70 |
|
|
$ |
33.59 |
|
Gold – |
|
London PM Fix ($/ounce) |
|
$ |
4,875 |
|
|
$ |
2,863 |
|
|
|
Realized price per ounce |
|
$ |
4,899 |
|
|
$ |
2,940 |
|
Lead – |
|
LME Final Cash Buyer ($/pound) |
|
$ |
0.88 |
|
|
$ |
0.89 |
|
|
|
Realized price per pound |
|
$ |
0.98 |
|
|
$ |
0.92 |
|
Zinc – |
|
LME Final Cash Buyer ($/pound) |
|
$ |
1.47 |
|
|
$ |
1.29 |
|
|
|
Realized price per pound |
|
$ |
1.41 |
|
|
$ |
1.29 |
|
Copper – |
|
LME Final Cash Buyer ($/pound) |
|
$ |
5.82 |
|
|
$ |
4.24 |
|
|
|
Realized price per pound |
|
$ |
5.72 |
|
|
$ |
4.41 |
|
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 positive price adjustments to provisional settlements of $0.8 million and $6.9 million for the three months ended March 31, 2026 and 2025, 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 9 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 forward contracts and collars discussed above) by the payable quantities of each metal included in concentrate and doré.
|
|
|
|
Three Months Ended |
|
|||||
|
|
|
|
2026 |
|
|
2025 |
|
||
Silver - |
|
Ounces produced |
|
|
3,903,149 |
|
|
|
4,107,242 |
|
|
|
Payable ounces sold |
|
|
3,575,018 |
|
|
|
3,512,749 |
|
Gold - |
|
Ounces produced |
|
|
12,886 |
|
|
|
13,759 |
|
|
|
Payable ounces sold |
|
|
11,533 |
|
|
|
10,478 |
|
Lead - |
|
Tons produced |
|
|
13,093 |
|
|
|
14,007 |
|
|
|
Payable tons sold |
|
|
11,400 |
|
|
|
11,990 |
|
Zinc - |
|
Tons produced |
|
|
16,804 |
|
|
|
16,935 |
|
|
|
Payable tons sold |
|
|
13,456 |
|
|
|
12,847 |
|
Copper |
|
Tons produced |
|
|
462 |
|
|
|
411 |
|
|
|
Payable tons sold |
|
|
36 |
|
|
|
44 |
|
24
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, gross profit (loss), Cash Cost, After By-product Credits, per Ounce (“Cash Cost”) (non-GAAP) and AISC (non-GAAP) at our operating segments for the three months ended March 31, 2026 and 2025 were as follows (in thousands, except for Cash Cost and AISC):
|
|
Silver |
|
|
|
|
||||||||||||||||||
|
|
Greens Creek |
|
|
Lucky Friday |
|
|
Keno Hill |
|
|
Total Silver (3) |
|
|
Other (4) |
|
|
Total Silver and Other |
|
||||||
Three Months Ended March 31, 2026: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Sales |
|
$ |
250,999 |
|
|
$ |
109,356 |
|
|
$ |
46,426 |
|
|
$ |
406,781 |
|
|
$ |
4,652 |
|
|
$ |
411,433 |
|
Costs applicable to sales (1) |
|
$ |
(66,375 |
) |
|
$ |
(35,173 |
) |
|
$ |
(17,923 |
) |
|
$ |
(119,471 |
) |
|
$ |
(4,939 |
) |
|
$ |
(124,410 |
) |
Depreciation, depletion and amortization |
|
$ |
(15,983 |
) |
|
$ |
(13,609 |
) |
|
$ |
(4,176 |
) |
|
$ |
(33,768 |
) |
|
$ |
— |
|
|
$ |
(33,768 |
) |
Gross profit (loss) |
|
$ |
168,641 |
|
|
$ |
60,574 |
|
|
$ |
24,327 |
|
|
$ |
253,542 |
|
|
$ |
(287 |
) |
|
$ |
253,255 |
|
Cash Cost (1) |
|
$ |
(11.94 |
) |
|
$ |
12.07 |
|
|
$ |
— |
|
|
$ |
(3.24 |
) |
|
|
|
|
|
|
||
AISC (1) |
|
$ |
(8.39 |
) |
|
$ |
23.78 |
|
|
$ |
— |
|
|
$ |
8.17 |
|
|
|
|
|
|
|
||
Three Months Ended March 31, 2025: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Sales |
|
$ |
118,143 |
|
|
$ |
63,194 |
|
|
$ |
16,909 |
|
|
$ |
198,246 |
|
|
$ |
7,088 |
|
|
$ |
205,334 |
|
Costs applicable to sales (1) |
|
$ |
(56,049 |
) |
|
$ |
(30,624 |
) |
|
$ |
(13,069 |
) |
|
$ |
(99,742 |
) |
|
$ |
(7,095 |
) |
|
$ |
(106,837 |
) |
Depreciation, depletion and amortization |
|
|
(13,589 |
) |
|
|
(13,425 |
) |
|
|
(2,802 |
) |
|
|
(29,816 |
) |
|
|
— |
|
|
|
(29,816 |
) |
Gross profit (loss) |
|
$ |
48,505 |
|
|
$ |
19,145 |
|
|
$ |
1,038 |
|
|
$ |
68,688 |
|
|
$ |
(7 |
) |
|
$ |
68,681 |
|
Cash Cost (2) |
|
$ |
(4.08 |
) |
|
$ |
9.37 |
|
|
$ |
— |
|
|
$ |
1.29 |
|
|
|
|
|
|
|
||
AISC (2) |
|
$ |
(0.03 |
) |
` |
$ |
20.08 |
|
|
$ |
— |
|
|
$ |
11.91 |
|
|
|
|
|
|
|
||
While revenue from zinc, lead, copper and gold 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 due to the fact that 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.
25
We periodically review our revenues to ensure that reporting of primary products and by-products is appropriate. Because for Greens Creek, Lucky Friday and Keno Hill we consider zinc, lead, gold and copper 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.
For the three months ended March 31, 2026, we reported income from continuing operations of $164.7 million (2025: $24.3 million) and a net loss applicable to common stockholders of $19.2 million (2025: Income of $28.7 million). Net loss applicable to common stockholders is lower than net income from continuing operations, due to the recognition of a loss from discontinued operations of $183.7 million, primarily due to the loss on the sale of Hecla Quebec of $192.5 million. The following were the significant drivers of the increase in net income from continuing operations:
The positive movements mentioned above were partly offset by:
26
Greens Creek
Dollars are in thousands (except per ounce and per ton amounts) |
|
Three Months Ended |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Sales |
|
$ |
250,999 |
|
|
$ |
118,143 |
|
Costs applicable to sales (1) |
|
|
(66,375 |
) |
|
|
(56,049 |
) |
Depreciation, depletion and amortization |
|
|
(15,983 |
) |
|
|
(13,589 |
) |
Gross profit |
|
$ |
168,641 |
|
|
$ |
48,505 |
|
Tons of ore milled |
|
|
208,922 |
|
|
|
212,899 |
|
Production: |
|
|
|
|
|
|
||
Silver (ounces) |
|
|
2,177,142 |
|
|
|
2,002,560 |
|
Gold (ounces) |
|
|
12,886 |
|
|
|
13,759 |
|
Lead (tons) |
|
|
4,398 |
|
|
|
4,496 |
|
Zinc (tons) |
|
|
12,550 |
|
|
|
12,835 |
|
Copper (tons) |
|
|
462 |
|
|
|
411 |
|
Payable metal quantities sold: |
|
|
|
|
|
|
||
Silver (ounces) |
|
|
2,024,531 |
|
|
|
1,744,652 |
|
Gold (ounces) |
|
|
11,533 |
|
|
|
10,478 |
|
Lead (tons) |
|
|
3,458 |
|
|
|
3,321 |
|
Zinc (tons) |
|
|
10,291 |
|
|
|
9,507 |
|
Copper (tons) |
|
|
36 |
|
|
|
44 |
|
Ore grades: |
|
|
|
|
|
|
||
Silver ounces per ton |
|
|
13.0 |
|
|
|
11.8 |
|
Gold ounces per ton |
|
|
0.085 |
|
|
|
0.086 |
|
Lead percent |
|
|
2.5 |
% |
|
|
2.6 |
% |
Zinc percent |
|
|
6.8 |
% |
|
|
6.8 |
% |
Copper percent |
|
|
0.3 |
% |
|
|
0.3 |
% |
Total production cost per ton |
|
$ |
273.16 |
|
|
$ |
240.00 |
|
Cash Cost, After By-product Credits, per Silver Ounce (2) |
|
$ |
(11.94 |
) |
|
$ |
(4.08 |
) |
AISC, After By-Product Credits, per Silver Ounce (2) |
|
$ |
(8.39 |
) |
|
$ |
(0.03 |
) |
Capital investments |
|
$ |
6,113 |
|
|
$ |
10,759 |
|
The $120.1 million increase in gross profit for the three months ended March 31, 2026, compared to the same period in 2025 was primarily due to higher realized sales prices for silver and gold, in addition to higher sales volumes for all metals produced.
Capital investments in the current quarter were $4.6 million lower compared to the same period in 2025. Current quarter costs included $3.1 million for primary ore access development, $1.0 million for definition drilling and $1.0 million for mining equipment.
Production of all metals other than silver was negatively impacted during the three months ended March 31, 2026, compared to the same period in 2025, primarily due to lower milled tons, partly offset by higher silver grades.
27
The charts below illustrate the factors contributing to Cash Cost, After By-product Credits, per Silver Ounce for Greens Creek:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Cash Cost, Before By-product Credits, per Silver Ounce |
|
$ |
28.04 |
|
|
$ |
28.46 |
|
By-product credits |
|
|
(39.98 |
) |
|
|
(32.54 |
) |
Cash Cost, After By-product Credits, per Silver Ounce |
|
$ |
(11.94 |
) |
|
$ |
(4.08 |
) |
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
AISC, Before By-product Credits, per Silver Ounce |
|
$ |
31.59 |
|
|
$ |
32.51 |
|
By-product credits |
|
|
(39.98 |
) |
|
|
(32.54 |
) |
AISC, After By-product Credits, per Silver Ounce |
|
$ |
(8.39 |
) |
|
$ |
(0.03 |
) |
For the three months ended March 31, 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, in addition to higher silver production, partly offset by higher production costs.
28
Lucky Friday
Dollars are in thousands (except per ounce and per ton amounts) |
|
Three Months Ended |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Sales |
|
$ |
109,356 |
|
|
$ |
63,194 |
|
Costs applicable to sales (1) |
|
|
(35,173 |
) |
|
|
(30,624 |
) |
Depreciation, depletion and amortization |
|
|
(13,609 |
) |
|
|
(13,425 |
) |
Gross profit |
|
$ |
60,574 |
|
|
$ |
19,145 |
|
Tons of ore milled |
|
|
108,608 |
|
|
|
108,745 |
|
Production: |
|
|
|
|
|
|
||
Silver (ounces) |
|
|
1,237,288 |
|
|
|
1,332,252 |
|
Lead (tons) |
|
|
8,250 |
|
|
|
8,480 |
|
Zinc (tons) |
|
|
3,832 |
|
|
|
3,681 |
|
Payable metal quantities sold: |
|
|
|
|
|
|
||
Silver (ounces) |
|
|
1,131,692 |
|
|
|
1,268,845 |
|
Lead (tons) |
|
|
7,574 |
|
|
|
7,978 |
|
Zinc (tons) |
|
|
2,829 |
|
|
|
3,081 |
|
Ore grades: |
|
|
|
|
|
|
||
Silver ounces per ton |
|
|
11.9 |
|
|
|
13.0 |
|
Lead percent |
|
|
8.0 |
% |
|
|
8.2 |
% |
Zinc percent |
|
|
4.1 |
% |
|
|
4.0 |
% |
Total production cost per ton |
|
$ |
309.68 |
|
|
$ |
258.59 |
|
Cash Cost, After By-product Credits, per Silver Ounce (2) |
|
$ |
12.07 |
|
|
$ |
9.37 |
|
AISC, After By-product Credits, per Silver Ounce (2) |
|
$ |
23.78 |
|
|
$ |
20.08 |
|
Capital investments |
|
|
17,018 |
|
|
$ |
15,446 |
|
Gross profit increased by $41.4 million for the three months ended March 31, 2026 compared to the comparable period in 2025, reflecting higher realized prices for silver, zinc and lead, partly offset by lower sales volumes for all metals driven by lower production reflecting lower processed grade material, except for zinc.
Capital investments increased by $1.6 million for the three months ended March 31, 2026, compared to the same period in 2025. Significant capital expenditures during the three months ended March 31, 2026, included capital development of $7.4 million, $1.2 million for a shaft rehabilitation, $1.1 million for the surface cooling project, $0.8 million for definition drilling and $0.7 million for an underground truck replacement, $0.6 million on ramp work and $0.4 million on tailings facility pond 5 construction.
29
The charts below illustrate the factors contributing to Cash Cost, After By-product Credits, Per Silver Ounce for Lucky Friday:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Cash Cost, Before By-product Credits, per Silver Ounce |
|
$ |
30.33 |
|
|
$ |
25.13 |
|
By-product credits |
|
|
(18.26 |
) |
|
|
(15.76 |
) |
Cash Cost, After By-product Credits, per Silver Ounce |
|
$ |
12.07 |
|
|
$ |
9.37 |
|
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
AISC, Before By-product Credits, per Silver Ounce |
|
$ |
42.04 |
|
|
$ |
35.84 |
|
By-product credits |
|
|
(18.26 |
) |
|
|
(15.76 |
) |
AISC, After By-product Credits, per Silver Ounce |
|
$ |
23.78 |
|
|
$ |
20.08 |
|
For the three months ended March 31, 2026, Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce are higher than the same period in 2025 primarily due to lower silver production and higher profit sharing and incentive compensation costs, partly offset by higher by-product credits.
30
Keno Hill
Dollars are in thousands (except per ounce and per ton amounts) |
|
Three Months Ended |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Sales |
|
$ |
46,426 |
|
|
$ |
16,909 |
|
Costs applicable to sales (1) |
|
|
(17,923 |
) |
|
|
(13,069 |
) |
Depreciation, depletion and amortization |
|
|
(4,176 |
) |
|
|
(2,802 |
) |
Gross profit |
|
$ |
24,327 |
|
|
$ |
1,038 |
|
Tons of ore milled |
|
|
24,274 |
|
|
|
27,411 |
|
Production: |
|
|
|
|
|
|
||
Silver (ounces) |
|
|
488,719 |
|
|
|
772,430 |
|
Lead (tons) |
|
|
445 |
|
|
|
1,031 |
|
Zinc (tons) |
|
|
422 |
|
|
|
419 |
|
Payable metal quantities sold: |
|
|
|
|
|
|
||
Silver (ounces) |
|
|
418,795 |
|
|
|
499,252 |
|
Lead (tons) |
|
|
368 |
|
|
|
691 |
|
Zinc (tons) |
|
|
336 |
|
|
|
259 |
|
Ore grades: |
|
|
|
|
|
|
||
Silver ounces per ton |
|
|
20.8 |
|
|
|
29.0 |
|
Lead percent |
|
|
2.0 |
% |
|
|
4.0 |
% |
Zinc percent |
|
|
2.2 |
% |
|
|
1.9 |
% |
Capital investments |
|
$ |
15,025 |
|
|
$ |
10,436 |
|
(1) - Excludes depreciation, depletion and amortization.
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 March 31, 2026, was 276 tons per day (the mine is currently permitted to a maximum of an average of 440 tons per day), with silver grades milled of 20.8 ounces per ton. During the first three months of 2026, the mill has relied on existing ore stockpiles as the mine continues to focus on development and ramp-up to higher tonnage rates with mining rates of 276 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 depart that zone and transition into the Arctic zone, as well as by mine sequencing at the Flame and Moth deposit, 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. We expect these impacts to diminish throughout the remainder of the year.
During the three months ended March 31, 2026 and 2025, Keno Hill recorded sales of $46.4 million and $16.9 million, respectively, with the increase due to higher realized prices, partly offset by lower metals sales volumes. As a result of higher revenues, Keno Hill generated gross profit of $24.3 million during the three months ended March 31, 2026 (2025 - $1.0 million). During the quarter, Keno Hill recorded capital investments of $15.0 million, primarily related to $7.0 million of mine development, $1.9 million for underground haul trucks, and $0.8 million for surface equipment.
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 and 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
31
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 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; 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 ones, 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. The Phase 2W dry‑stack expansion requires final design approval from the Yukon Government ("YG"). We currently expect such approval by mid‑2026, which would allow Phase 2W to become operational before Phase 2E reaches capacity. If these approvals are not received on a timely basis, milling operations could be curtailed or interrupted. Further in the future, at current mining rates, we project that we would run out of tailings storage space in late 2028. 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. If that were to occur and an alternative plan not developed, milling operations could be curtailed or interrupted.
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 it remains 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.
32
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, which could become an operational challenge if we are successful in modifying the waste rock production limit.
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. The mill is currently permitted to process up to 440 tons per day, but there are factors other than mill capacity that limit throughput (e.g. dry stack tailings capacity and restrictions on waste rock production and disposal). 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
During the three months ended March 31, 2026, an income and mining tax provision of $50.9 million, resulted in an effective tax rate of 23.3%. This compares to an income and mining tax provision of $14.3 million, which resulted in an effective tax rate of 35.8% for the three months ended March 31, 2025. The comparability of our income and mining tax provision and effective tax rate for
33
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; and (vi) the non-recognition of tax assets. The effective tax rate will fluctuate, sometimes significantly, period to period. The change in the effective tax rate during the three months ended March 31, 2026, compared to the comparable period in 2025 is primarily related to the reported consolidated income as well as the losses incurred at our consolidated Alexco subsidiaries (that own the Keno Hill mine assets), and our Nevada subsidiaries, for which no tax benefit is recognized due to uncertainty surrounding our ability to utilize these future tax benefits.
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 Nevada, Mexico, and 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.
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)
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 months ended March 31, 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.
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.
Cash Cost, Before By-product Credits and AISC, Before By-product Credits 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
34
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) |
|
Three Months Ended March 31, 2026 |
|
|||||||||||||||||||||
|
|
Greens Creek |
|
|
Lucky Friday |
|
|
Keno Hill (4) |
|
|
Corporate (3) |
|
|
Other (4) |
|
|
Total Silver and Other |
|
||||||
Costs applicable to sales (1) |
|
$ |
66,375 |
|
|
$ |
35,173 |
|
|
$ |
17,923 |
|
|
$ |
— |
|
|
$ |
4,939 |
|
|
$ |
124,410 |
|
Treatment costs |
|
|
895 |
|
|
|
2,553 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,448 |
|
Change in product inventory |
|
|
(5,383 |
) |
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5,384 |
) |
Reclamation and other costs |
|
|
(846 |
) |
|
|
(195 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,041 |
) |
Exclusion of Keno Hill cash costs (5) |
|
|
— |
|
|
|
— |
|
|
|
(17,923 |
) |
|
|
— |
|
|
|
|
|
|
(17,923 |
) |
|
Exclusion of Other costs (3) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,939 |
) |
|
|
(4,939 |
) |
Cash Cost, Before By-product Credits (2) |
|
|
61,041 |
|
|
|
37,530 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
98,571 |
|
Reclamation and other costs |
|
|
934 |
|
|
|
225 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,159 |
|
Sustaining capital |
|
|
6,795 |
|
|
|
14,263 |
|
|
|
— |
|
|
|
1,008 |
|
|
|
— |
|
|
|
22,066 |
|
General and administrative |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
15,753 |
|
|
|
— |
|
|
|
15,753 |
|
AISC, Before By-product Credits (2) |
|
|
68,770 |
|
|
|
52,018 |
|
|
|
— |
|
|
|
16,761 |
|
|
|
— |
|
|
|
137,549 |
|
By-product credits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Zinc |
|
|
(25,369 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(25,369 |
) |
Gold |
|
|
(55,214 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(55,214 |
) |
Lead |
|
|
(6,037 |
) |
|
|
(22,591 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(28,628 |
) |
Copper |
|
|
(433 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(433 |
) |
Total By-product credits |
|
|
(87,053 |
) |
|
|
(22,591 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(109,644 |
) |
Cash Cost, After By-product Credits |
|
$ |
(26,012 |
) |
|
$ |
14,939 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(11,073 |
) |
AISC, After By-product Credits |
|
$ |
(18,283 |
) |
|
$ |
29,427 |
|
|
$ |
— |
|
|
$ |
16,761 |
|
|
$ |
— |
|
|
$ |
27,905 |
|
Ounces produced |
|
|
2,177 |
|
|
|
1,237 |
|
|
|
|
|
|
|
|
|
|
|
|
3,414 |
|
|||
Cash Cost, Before By-product Credits, per Ounce |
|
$ |
28.04 |
|
|
$ |
30.33 |
|
|
|
|
|
|
|
|
|
|
|
$ |
28.87 |
|
|||
By-product credits per ounce |
|
|
(39.98 |
) |
|
|
(18.26 |
) |
|
|
|
|
|
|
|
|
|
|
|
(32.11 |
) |
|||
Cash Cost, After By-product Credits, per Ounce |
|
$ |
(11.94 |
) |
|
$ |
12.07 |
|
|
|
|
|
|
|
|
|
|
|
$ |
(3.24 |
) |
|||
AISC, Before By-product Credits, per Ounce |
|
$ |
31.59 |
|
|
$ |
42.04 |
|
|
|
|
|
|
|
|
|
|
|
$ |
40.28 |
|
|||
By-product credits per ounce |
|
|
(39.98 |
) |
|
|
(18.26 |
) |
|
|
|
|
|
|
|
|
|
|
|
(32.11 |
) |
|||
AISC, After By-product Credits, per Ounce |
|
$ |
(8.39 |
) |
|
|
23.78 |
|
|
|
|
|
|
|
|
|
|
|
$ |
8.17 |
|
|||
35
In thousands (except per ounce amounts) |
|
Three Months Ended March 31, 2025 |
|
|||||||||||||||||||||
|
|
Greens Creek |
|
|
Lucky Friday |
|
|
Keno Hill (4) |
|
|
Corporate (3) |
|
|
Other (3) |
|
|
Total Silver |
|
||||||
Costs applicable to sales (1) |
|
$ |
56,049 |
|
|
$ |
30,624 |
|
|
$ |
13,069 |
|
|
$ |
— |
|
|
$ |
7,095 |
|
|
$ |
106,837 |
|
Treatment costs |
|
|
2,143 |
|
|
|
3,963 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6,106 |
|
Change in product inventory |
|
|
(901 |
) |
|
|
(839 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,740 |
) |
Reclamation and other costs |
|
|
(307 |
) |
|
|
(273 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(580 |
) |
Exclusion of Keno Hill cash costs (4) |
|
|
— |
|
|
|
— |
|
|
|
(13,069 |
) |
|
|
— |
|
|
|
— |
|
|
|
(13,069 |
) |
Exclusion of Other costs (5) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(7,095 |
) |
|
|
(7,095 |
) |
Cash Cost, Before By-product Credits (2) |
|
|
56,984 |
|
|
|
33,475 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
90,459 |
|
Reclamation and other costs |
|
|
757 |
|
|
|
195 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
952 |
|
Sustaining capital |
|
|
7,368 |
|
|
|
14,070 |
|
|
|
— |
|
|
|
1,025 |
|
|
|
— |
|
|
|
22,463 |
|
General and administrative |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
11,999 |
|
|
|
— |
|
|
|
11,999 |
|
AISC, Before By-product Credits (2) |
|
|
65,109 |
|
|
|
47,740 |
|
|
|
— |
|
|
|
13,024 |
|
|
|
— |
|
|
|
125,873 |
|
By-product credits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Zinc |
|
|
(23,374 |
) |
|
|
(6,950 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(30,324 |
) |
Gold |
|
|
(34,977 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(34,977 |
) |
Lead |
|
|
(6,091 |
) |
|
|
(14,043 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(20,134 |
) |
Copper |
|
|
(729 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(729 |
) |
Total By-product credits |
|
|
(65,171 |
) |
|
|
(20,993 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(86,164 |
) |
Cash Cost, After By-product Credits |
|
$ |
(8,187 |
) |
|
$ |
12,482 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4,295 |
|
AISC, After By-product Credits |
|
$ |
(62 |
) |
|
$ |
26,747 |
|
|
$ |
— |
|
|
$ |
13,024 |
|
|
$ |
— |
|
|
$ |
39,709 |
|
Divided by ounces produced |
|
|
2,003 |
|
|
|
1,332 |
|
|
|
|
|
|
|
|
|
|
|
|
3,335 |
|
|||
Cash Cost, Before By-product Credits, per Ounce |
|
$ |
28.46 |
|
|
$ |
25.13 |
|
|
|
|
|
|
|
|
|
|
|
$ |
27.13 |
|
|||
By-product credits per ounce |
|
|
(32.54 |
) |
|
|
(15.76 |
) |
|
|
|
|
|
|
|
|
|
|
|
(25.84 |
) |
|||
Cash Cost, After By-product Credits, per Ounce |
|
$ |
(4.08 |
) |
|
$ |
9.37 |
|
|
|
|
|
|
|
|
|
|
|
$ |
1.29 |
|
|||
AISC, Before By-product Credits, per Ounce |
|
$ |
32.51 |
|
|
$ |
35.84 |
|
|
|
|
|
|
|
|
|
|
|
$ |
37.75 |
|
|||
By-product credits per ounce |
|
|
(32.54 |
) |
|
|
(15.76 |
) |
|
|
|
|
|
|
|
|
|
|
|
(25.84 |
) |
|||
AISC, After By-product Credits, per Ounce |
|
$ |
(0.03 |
) |
|
$ |
20.08 |
|
|
|
|
|
|
|
|
|
|
|
$ |
11.91 |
|
|||
Financial Liquidity and Capital Resources
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 March 31, 2026, we had $587.6 million in cash and cash equivalents, of which $14.8 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 March 31, 2026, we had no amount drawn on our $225 million credit facility, with $8.0 million used for letters of credit, leaving $217.0 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
36
on our common and preferred stock of $2.8 million (2025: $2.5 million) during the three months ended March 31, 2026. 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 may depend 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 March 31, 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 7 of Notes to Condensed Consolidated Financial Statements (Unaudited) pursuant to an equity distribution agreement dated February 18, 2021, as of March 31, 2026, there were 197,988 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, as the proceeds were utilized to repay our Senior Notes and eliminate our debt service costs on April 9, 2026. Our obligations and other uses of cash may include, but are not limited to: debt service obligations related to the Senior Notes; 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 $204 to $223 million will be spent in 2026 on capital expenditures,
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.
Our liquid assets include (in millions):
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||
Cash and cash equivalents held in U.S. dollars |
|
$ |
572.8 |
|
|
$ |
215.1 |
|
Cash and cash equivalents held in foreign currency |
|
|
14.8 |
|
|
|
26.5 |
|
Total cash and cash equivalents |
|
|
587.6 |
|
|
|
241.6 |
|
Marketable equity securities - current and non-current |
|
|
178.0 |
|
|
|
107.5 |
|
Total cash, cash equivalents and investments |
|
$ |
765.6 |
|
|
$ |
349.1 |
|
37
Cash and cash equivalents increased by $346.0 million in the first three 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 $70.5 million.
|
|
Three Months Ended |
|
|||||
|
|
March 31, 2026 |
|
|
March 31, 2025 |
|
||
Cash provided by operating activities from continuing operations (in millions) |
|
$ |
182.9 |
|
|
$ |
27.6 |
|
Cash provided by operating activities from continuing operations for the three months ended March 31, 2026, of $182.9 million represents a $155.3 million increase compared to the $27.6 million of cash provided by operating activities from continuing operations during the same period of 2025. $168.6 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 $13.3 million working capital and other asset and liability movement.
|
|
Three Months Ended |
|
|||||
|
|
March 31, 2026 |
|
|
March 31, 2025 |
|
||
Cash provided by (used in) investing activities of continuing operations (in millions) |
|
$ |
174.4 |
|
|
$ |
(37.8 |
) |
During the three months ended March 31, 2026, cash provided by investing activities of continuing operations increased by $212.2 million, primarily due to the sales of Hecla Quebec and Minera Hecla for total proceeds of $173.3 million, net of transaction costs paid. In addition, we made net investment sales related to our marketable securities portfolio (which includes our SERP assets which are held in a Rabbi Trust) of $39.7 million. Capital investments of $39.3 million across our operations were consistent with the same period in 2025.
|
|
Three Months Ended |
|
|||||
|
|
March 31, 2026 |
|
|
March 31, 2025 |
|
||
Cash (used in) provided by financing activities of continuing operations (in millions) |
|
$ |
(5.1 |
) |
|
$ |
15.9 |
|
Cash used in financing activities of continuing operations was lower than the same period in 2025 primarily due to the prior period containing net borrowings of $20.0 million on our revolving credit facility. In addition, the following impacted cash used in investing activities for the three months ended March 31, 2026 and 2025:
|
|
Three Months Ended |
|
|||||
|
|
March 31, 2026 |
|
|
March 31, 2025 |
|
||
Cash provided by operating activities from discontinued operations (in millions) |
|
$ |
11.3 |
|
|
$ |
8.1 |
|
During the three months ended March 31, 2026 and 2025, cash provided by operating activities from discontinued operations was $11.3 million and $8.1 million, respectively. The increase in cash provided by operating activities related to higher operating income due to higher realized prices.
|
|
Three Months Ended |
|
|||||
|
|
March 31, 2026 |
|
|
March 31, 2025 |
|
||
Cash used in investing activities of discontinued operations (in millions) |
|
$ |
(8.8 |
) |
|
$ |
(16.3 |
) |
During the three months ended March 31, 2026 and 2025, cash used in investing activities from discontinued operations was $8.8 million and $16.3 million, respectively. The decrease in investing activities related to the seasonal variations in our investments at Casa Berardi.
|
|
Three Months Ended |
|
|||||
|
|
March 31, 2026 |
|
|
March 31, 2025 |
|
||
Cash used in financing activities of discontinued operations (in millions) |
|
$ |
(8.4 |
) |
|
$ |
(0.7 |
) |
During the three months ended March 31, 2026 and 2025, cash used in financing activities from discontinued operations was $8.4 million and $0.7 million, respectively, with the increase used in financing activities related to the early repayment of finance leases.
38
Contractual Obligations, Contingent Liabilities and Commitments
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 March 31, 2026 (in thousands):
|
|
Payments Due By Period |
|
|||||||||||||||||
|
|
Less than 1 year |
|
|
1-3 years |
|
|
4-5 years |
|
|
More than |
|
|
Total |
|
|||||
Purchase obligations (1) |
|
$ |
29,507 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
29,507 |
|
Credit facility(2) |
|
|
1,628 |
|
|
|
2,123 |
|
|
|
— |
|
|
|
— |
|
|
|
3,751 |
|
Finance lease commitments (3) |
|
|
3,747 |
|
|
|
579 |
|
|
|
— |
|
|
|
— |
|
|
|
4,326 |
|
Operating lease commitments (4) |
|
|
3,948 |
|
|
|
7,860 |
|
|
|
6,702 |
|
|
|
5,235 |
|
|
|
23,745 |
|
Senior Notes (5) |
|
|
19,068 |
|
|
|
279,769 |
|
|
|
— |
|
|
|
— |
|
|
|
298,837 |
|
Total contractual cash obligations |
|
$ |
57,898 |
|
|
$ |
290,331 |
|
|
$ |
6,702 |
|
|
$ |
5,235 |
|
|
$ |
360,166 |
|
We record liabilities for costs associated with mine closure, reclamation of land and other environmental matters. At March 31, 2026, our liabilities for these matters totaled $126.4 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 12 of Notes to Condensed Consolidated Financial Statements (Unaudited).
Off-Balance Sheet Arrangements
At March 31, 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.
39
Guarantor Subsidiaries
Presented below are Hecla’s unaudited interim condensed consolidating financial statements as required by Rule 3-10 of Regulation S-X of the Securities Exchange Act of 1934, as amended, resulting from the guarantees by certain of Hecla's subsidiaries of the Senior Notes (see Note 8 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information). The Guarantors consist of the following of Hecla's 100%-owned subsidiaries: Hecla Limited; Silver Hunter Mining Company; Rio Grande Silver, Inc.; Hecla MC Subsidiary, LLC; Hecla Silver Valley, Inc.; Burke Trading, Inc.; Hecla Montana, Inc.; Revett Silver Company; RC Resources, Inc.; Troy Mine Inc.; Revett Exploration, Inc.; Revett Holdings, Inc.; Mines Management, Inc.; Newhi, Inc.; Montanore Minerals Corp.; Hecla Alaska LLC; Hecla Greens Creek Mining Company; Hecla Admiralty Company; Hecla Juneau Mining Company; Klondex Holdings Inc.; Klondex Gold & Silver Mining Co.; Klondex Midas Holdings Limited; Klondex Aurora Mine Inc.; Klondex Hollister Mine Inc.; and Alexco Resource Corp. We completed the offering of the Senior Notes on February 19, 2020 under our shelf registration statement previously filed with the SEC.
The unaudited interim condensed consolidating financial statements below have been prepared from our financial information on the same basis of accounting as the unaudited interim condensed consolidated financial statements set forth elsewhere in this report. Investments in the subsidiaries are accounted for under the equity method. Accordingly, the entries necessary to consolidate Hecla, the Guarantors, and our non-guarantor subsidiaries are reflected in the intercompany eliminations column. In the course of preparing consolidated financial statements, we eliminate the effects of various transactions conducted between Hecla and its subsidiaries and among the subsidiaries. While valid at an individual subsidiary level, such activities are eliminated in consolidation because, when taken as a whole, they do not represent business activity with third-party customers, vendors, and other parties. Examples of such eliminations include the following:
Separate financial statements of the Guarantors are not presented because the guarantees by the Guarantors are joint and several and full and unconditional, except for certain customary release provisions, including: (1) the sale or disposal of all or substantially all of the assets of the Guarantor; (2) the sale or other disposition of the capital stock of the Guarantor; (3) the Guarantor is designated as an unrestricted entity in accordance with the applicable provisions of the indenture; (4) Hecla ceases to be a borrower as defined in the indenture; and (5) upon legal or covenant defeasance or satisfaction and discharge of the indenture.
40
Unaudited Interim Condensed Consolidating Balance Sheets
|
|
As of March 31, 2026 |
||||||||
|
|
Parent |
|
Guarantors |
|
Non-Guarantors |
|
Eliminations |
|
Consolidated |
|
|
(in thousands) |
||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$399,934 |
|
$3,401 |
|
$184,215 |
|
$— |
|
$587,550 |
Other current assets |
|
38,359 |
|
324,451 |
|
14,873 |
|
(7,592) |
|
370,091 |
Property, plants, equipment and mine development, net |
|
296 |
|
2,122,421 |
|
492 |
|
— |
|
2,123,209 |
Intercompany receivable (payable) |
|
(691,491) |
|
(101,324) |
|
784,522 |
|
8,293 |
|
— |
Investments in subsidiaries |
|
2,902,908 |
|
(52) |
|
— |
|
(2,902,856) |
|
— |
Other non-current assets |
|
430,028 |
|
61,547 |
|
356,044 |
|
(552,176) |
|
295,443 |
Total assets |
|
$3,080,034 |
|
$2,410,444 |
|
$1,340,146 |
|
$(3,454,331) |
|
$3,376,293 |
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
$72,237 |
|
$128,802 |
|
$17,582 |
|
$(24,772) |
|
$193,849 |
Long-term debt |
|
262,073 |
|
573 |
|
— |
|
— |
|
262,646 |
Non-current portion of accrued reclamation |
|
— |
|
113,997 |
|
5 |
|
— |
|
114,002 |
Non-current deferred tax liability |
|
151,006 |
|
181,651 |
|
12,219 |
|
(150,807) |
|
194,069 |
Other non-current liabilities |
|
23,908 |
|
207,515 |
|
185,337 |
|
(375,846) |
|
40,914 |
Stockholders' equity |
|
2,570,810 |
|
1,777,906 |
|
1,125,003 |
|
(2,902,906) |
|
2,570,813 |
Total liabilities and stockholders' equity |
|
$3,080,034 |
|
$2,410,444 |
|
$1,340,146 |
|
$(3,454,331) |
|
$3,376,293 |
|
|
As of December 31, 2025 |
||||||||
|
|
Parent |
|
Guarantors |
|
Non-Guarantors |
|
Eliminations |
|
Consolidated |
|
|
(in thousands) |
||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$210,465 |
|
$18,559 |
|
$12,534 |
|
$— |
|
$241,558 |
Other current assets |
|
56,469 |
|
336,575 |
|
46,258 |
|
(92,301) |
|
347,001 |
Property, plants, equipment and mine development, net |
|
296 |
|
2,122,194 |
|
8,091 |
|
— |
|
2,130,581 |
Intercompany receivable (payable) |
|
(685,894) |
|
(367,211) |
|
667,695 |
|
385,410 |
|
— |
Investments in subsidiaries |
|
2,842,226 |
|
(52) |
|
— |
|
(2,842,174) |
|
— |
Other non-current assets |
|
672,380 |
|
15,646 |
|
200,970 |
|
(799,220) |
|
89,776 |
Assets of discontinued operations |
|
— |
|
751,729 |
|
— |
|
— |
|
751,729 |
Total assets |
|
$3,095,942 |
|
$2,877,440 |
|
$935,548 |
|
$(3,348,285) |
|
$3,560,645 |
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
$86,837 |
|
$166,108 |
|
$46,907 |
|
$(108,646) |
|
$191,206 |
Long-term debt |
|
261,947 |
|
1,224 |
|
— |
|
— |
|
263,171 |
Non-current portion of accrued reclamation |
|
— |
|
111,027 |
|
1,464 |
|
— |
|
112,491 |
Non-current deferred tax liability |
|
131,136 |
|
27,039 |
|
(590) |
|
— |
|
157,585 |
Other non-current liabilities |
|
24,376 |
|
207,966 |
|
198,983 |
|
(397,413) |
|
33,912 |
Liabilities of discontinued operations |
|
— |
|
210,634 |
|
— |
|
— |
|
210,634 |
Stockholders' equity |
|
2,591,646 |
|
2,153,442 |
|
688,784 |
|
(2,842,226) |
|
2,591,646 |
Total liabilities and stockholders' equity |
|
$3,095,942 |
|
$2,877,440 |
|
$935,548 |
|
$(3,348,285) |
|
$3,560,645 |
41
Unaudited Interim Condensed Consolidating Statements of Operations
|
|
Three Months Ended March 31, 2026 |
|
|||||||||||||||||
|
|
Parent |
|
|
Guarantors |
|
|
Non-Guarantors |
|
|
Eliminations |
|
|
Consolidated |
|
|||||
|
|
(in thousands) |
|
|||||||||||||||||
Revenues |
|
$ |
(10,205 |
) |
|
$ |
423,277 |
|
|
$ |
— |
|
|
$ |
(1,639 |
) |
|
$ |
411,433 |
|
Costs applicable to sales (1) |
|
|
— |
|
|
|
(125,715 |
) |
|
|
— |
|
|
|
1,305 |
|
|
|
(124,410 |
) |
Depreciation, depletion, amortization |
|
|
— |
|
|
|
(33,768 |
) |
|
|
— |
|
|
|
— |
|
|
|
(33,768 |
) |
General and administrative |
|
|
(4,877 |
) |
|
|
(9,923 |
) |
|
|
(953 |
) |
|
|
— |
|
|
|
(15,753 |
) |
Exploration and pre-development |
|
|
(223 |
) |
|
|
(4,729 |
) |
|
|
336 |
|
|
|
— |
|
|
|
(4,616 |
) |
Equity in earnings of subsidiaries |
|
|
176,816 |
|
|
|
— |
|
|
|
— |
|
|
|
(176,816 |
) |
|
|
— |
|
Other income (expense) |
|
|
53,340 |
|
|
|
(13,448 |
) |
|
|
5,438 |
|
|
|
(62,663 |
) |
|
|
(17,333 |
) |
Income before income and mining taxes |
|
|
214,851 |
|
|
|
235,694 |
|
|
|
4,821 |
|
|
|
(239,813 |
) |
|
|
215,553 |
|
Income and mining tax provision |
|
|
(50,198 |
) |
|
|
(59,054 |
) |
|
|
(4,647 |
) |
|
|
62,999 |
|
|
|
(50,900 |
) |
Net income from continuing operations |
|
|
164,653 |
|
|
|
176,640 |
|
|
|
174 |
|
|
|
(176,814 |
) |
|
|
164,653 |
|
Net loss from discontinued operations, net of taxes |
|
|
(183,681 |
) |
|
|
8,801 |
|
|
|
— |
|
|
|
(8,801 |
) |
|
|
(183,681 |
) |
Preferred stock dividends |
|
|
(132 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(132 |
) |
Net loss applicable to common stockholders |
|
$ |
(19,160 |
) |
|
$ |
185,441 |
|
|
$ |
174 |
|
|
$ |
(185,615 |
) |
|
$ |
(19,160 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income from continuing operations |
|
|
164,653 |
|
|
|
176,640 |
|
|
|
174 |
|
|
|
(176,814 |
) |
|
|
164,653 |
|
Other comprehensive loss |
|
|
(2,157 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,157 |
) |
Comprehensive income from continuing operations |
|
$ |
162,496 |
|
|
$ |
176,640 |
|
|
$ |
174 |
|
|
$ |
(176,814 |
) |
|
$ |
162,496 |
|
Comprehensive loss from discontinued operations |
|
|
(183,681 |
) |
|
|
8,801 |
|
|
|
— |
|
|
|
(8,801 |
) |
|
|
(183,681 |
) |
Comprehensive loss |
|
$ |
(21,185 |
) |
|
$ |
185,441 |
|
|
$ |
174 |
|
|
$ |
(185,615 |
) |
|
$ |
(21,185 |
) |
(1) - Excludes depreciation, depletion and amortization
42