Lucky Friday Return To Full Production To Exceed 3.4M Ounces Of Silver In 2021

COEUR D'ALENE, ID - Hecla Mining Company, President and CEO, Phillips S. Baker, Jr., said “The strong performance Hecla has had in five of the last six quarters continued in the first quarter of 2021 with the second highest sales in our history, a new record for EBITDA and gross profit on sales that is about a third higher than the next closest quarter. Free cash flow generation was the most Hecla has had in the first quarter in a decade. Since the first quarter is typically our smallest quarter, we anticipate cash flow increasing over the rest of the year. Therefore, the Board has increased the silver-linked dividend at the $25 price threshold by 50% to $0.03 per share annually. The backdrop for silver remains very positive with improving industrial demand due to global policies that support green energy where silver is a key component, strong investment demand and tight supply. Hecla is in a key position as the United States' largest silver producer, mining more than a third of all U.S. production, which should increase as our U.S. silver production is anticipated to be 15 million ounces by 2023 with the Lucky Friday's silver production expected to increase to 5 million ounces by then."

Greens Creek continued its strong performance with slightly lower silver grades due to normal variations in the ore body and produced 2.6 million ounces of silver and 13,266 ounces of gold compared to 2.8 million ounces of silver and 12,273 ounces of gold in the first quarter of 2020. The decrease in silver production was primarily due to lower grade, with the increase in gold production resulting from higher grade, as planned. Compared to 2020, cost per ounce decreased primarily due to $5.7 million in lower treatment costs as a result of favorable smelter terms, of which $4 million are nonrecurring, and the reclassification of the Alaska mine license tax to income and mining tax provision effective January 1, 2021. With higher by-product prices, the cash cost5 and AISC6, after by-product credits, per silver ounce decreased by $6.30 and $6.31 per ounce, respectively. The mill operated at an average of 2,156 tons per day (tpd) in the first quarter compared to 2,185 tpd in the first quarter of 2020.

The Company reaffirms estimated 2021 silver production of 9.5 - 10.2 million ounces of silver and 40 - 43 thousand ounces of gold. The estimate for 2021 cost of sales is $213 million. Estimated cash cost, after by-product credits5, and AISC, after by-product credits6, each per silver ounce is $1.50-$2.25 and $6.50-$7.25, respectively, with lower costs due to anticipated higher by-product credits, lower treatment charges, and the reclassification of mine license tax from production costs to income and mining tax provision.

At the Casa Berardi Mine, 36,190 ounces of gold were produced compared to 26,752 ounces in the first quarter of 2020. This represents an increase of 35% due to higher tonnage, grades and recoveries. The mill operated at an average of 4,093 tpd in the first quarter of 2021 compared to 3,644 tpd in 2020. The increase in cost of sales was primarily due to higher sales volume. The decrease in cash cost and AISC, after by-product credits5,6, per gold ounce for the first quarter of 2021 compared to the first quarter of 2020 was primarily the result of higher gold production, with AISC also impacted by lower sustaining capital spending, partially offset by higher exploration spending. Business improvement activities continued in 2021 and these efforts are expected to reduce costs and increase cash flow over the next two years.

At the Lucky Friday Mine, 0.9 million ounces of silver were produced in the first quarter of 2021. Lucky Friday returned to full production in the fourth quarter of 2020 with estimated annual production in excess of 3.4 million ounces of silver in 2021. The mill operated at an average of 901 tpd. We continue to test and optimize the new mining method to improve safety and increase productivity which could allow Lucky Friday to increase production beyond the 5 million ounces expected by 2023 due to grade. The cost of sales for the first quarter was $22.8 million, and the cash cost, after by-product credits, per silver ounce was $7.62. AISC, after by-product credits, was $14.24 per silver ounce.

At the Nevada operations, 2,548 ounces of gold were produced from 16,459 tons of a stockpiled bulk sample of refractory material processed at a third-party facility. Cost of sales for the first quarter were $7.5 million and cash cost5 and AISC6, after by-product credits, per gold ounce was $1,416 and $1,461, respectively in the first quarter of 2021. The increase over the prior year period was the result of the lower gold production.

In the second quarter of 2021, the Company expects to process oxide material through the Midas mill. Over the remainder of the year, 22,000 tons of refractory material are expected to be processed in third-party facilities, roughly 12,000 tons in a roaster and 10,000 tons in an autoclave. Production for the remainder of the year is expected to be in the range of 17,000 to 19,000 ounces of gold. Fire Creek and the Midas mill are expected to be on care and maintenance by the end of the second quarter. Activities will be limited primarily to development at Hollister for Hatter Graben and exploration at Midas.