Hecla Mining Company announced actions taken in response to COVID-19, cash balances and preliminary silver and gold production results at the end of the first quarter.

Highlights

l  Responded quickly to COVID-19 with changes in work schedules and hygiene practices, eliminated most travel starting in February, and strengthened the balance sheet.

l  Three of five operations (U.S. mines) are deemed essential businesses and remain fully operational (represent 69% of Hecla’s 2019 gold equivalent production).

l  Silver production of 3 million ounces and gold production of 57,238 ounces was on plan (silver equivalent production of 10.3 million ounces or gold equivalent production of 110,210 ounces2).

l  The Company is withdrawing its full-year 2020 guidance to assess COVID-19’s impact on its production and costs.

l  Quarter-end cash and cash equivalents of approximately $215 million with the revolving credit facility drawn at $210 million.

l  Hecla’s charitable foundation is making an initial commitment of up to $125,000 support to the local communities where we operate.

“Hecla’s quick response to the COVID-19 outbreak began in February and has protected our workforce, enabling them to continue to safely operate our mines,” said Phillips S. Baker, Jr., Hecla’s President and CEO. “While government orders have shut down two mines, our U.S. mines continue to operate as planned. Our balance sheet is strong with over $200 million in cash, and no near-term debt maturities with our revolver debt not due until 2023 and senior notes in 2028. Also, our charitable foundation is stepping up to support the communities we operate in during this time of need.”

Operations Discussion

Greens Creek

In the second quarter, Greens Creek began quarantining all employees in a Juneau facility for 14 days before employees start a 28-day rotation. No one, including local residents, is allowed on the site who has not been quarantined.

At the Greens Creek mine, 2.5 million ounces of silver and 11,296 ounces of gold were produced in the first quarter compared to 2.2 million ounces of silver and 14,328 ounces of gold in the prior year period. Higher silver production, when compared to the first quarter of 2019, was due to higher ore grades as well as increased recoveries, partially offset by lower mill throughput. The lower gold production was due to lower grades and the lower mill throughput, partially offset by higher recoveries. The mill operated at an average of 2,185 tons per day (tpd).

Casa Berardi

The suspension of operations atCasa Berardi, originally expected to last until April 13th, has now been extended until May 4th, to comply with the Government of Quebec’s stay-at-home order. Limited operations are protecting the facilities and environment.

At the Casa Berardi mine, 26,175 ounces of gold were produced, including 9,171 ounces from the East Mine Crown Pillar pit compared to 31,799 ounces and 6,535 ounces, respectively, in the prior year period. The decrease was due in part to the suspension of mining operations as of March 24, 2020 in response to the Government of Quebec’s order to the mining industry due to COVID-19. Prior to suspension, the mill operated at an average of 3,847 tpd.

San Sebastian

An orderly wind-down of the operations are underway to comply with the Government of Mexico’s order to suspend operations until April 30, 2020. San Sebastian expects to maintain a minimum complement of workers to protect the facilities and environment while operations are suspended.

At the San Sebastian mine, 0.3 million ounces of silver and 2,802 ounces of gold were produced compared to 0.4 million ounces and 3,530 ounces, respectively, in the prior year period with the decrease due to the expected lower grades. The mill operated at an average of 390 tpd.

Nevada Operations

Nevada has a stay-at-home order, but mines are essential infrastructure operations. Nevada operations have daily temperature testing and questionnaires, with significant social distancing by staggering the buses.

At the Nevada operations, gold production was 60% higher with 16,965 ounces of gold produced compared to 10,364 ounces of gold in the prior year period due to planned higher grades. The mining of developed oxide ore is expected to continue at Fire Creek until about mid-year, when the mining activities will stop while studies are completed.

Lucky Friday

While the State of Idaho has a stay-at-home order, the Lucky Friday is an essential business to the state and in a county that has no known cases of COVID-19. The mine has daily temperature testing and a questionnaire, as well as social distancing measures to access the mine.

At the Lucky Friday mine, few ounces were produced principally due to the focus on calling back and training the returning workforce, as well as advancing critical infrastructure projects. The 5370-loading pocket capital project is nearing completion. The #2 shaft hoist project has been delayed until July because a key vendor determined they would be unable to currently support the work as a result of the COVID-19 virus.

Table 1: Production Summary

Source: Hecla Mining