Hecla Mining pany(HL) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In 2025, the company achieved record revenue of $1.4 billion and net income applicable to shareholders of $321 million, translating to $0.49 per share [7][12] - Adjusted EBITDA reached $670 million, with total debt reduced to $276 million and a gross debt to Adjusted EBITDA ratio of 0.4 times [7][12] - Operating cash flow was $563 million, resulting in free cash flow of $310 million, with each mine generating positive free cash flow [7][12] Business Line Data and Key Metrics Changes - Silver production guidance was met with 17 million ounces produced, while gold production exceeded guidance with 150,000 ounces [8] - Lucky Friday mine produced a record 5.3 million ounces of silver, a nearly 50% increase from 2021 [8] - Keno Hill achieved over 3 million ounces of silver production, marking its first year of profitability under Hecla's ownership [8] Market Data and Key Metrics Changes - The realized silver price in Q4 was nearly $70 per ounce, exceeding the quarterly average by over $14 per ounce [14] - The all-in sustaining cost for silver was $18.11 per ounce, resulting in a silver margin of $51 per ounce or 74% of the realized price [14] Company Strategy and Development Direction - The company aims to be recognized as the premier silver company in North America, focusing on silver as the strategic anchor of its business [4][5] - The pending sale of Casa Berardi is part of a strategic portfolio optimization to redirect capital towards silver assets [9][10] - The company is committed to operational excellence, investment discipline, and organic growth through disciplined exploration programs [6][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a debt-free balance sheet by 2026, with a substantial reduction in risk [12] - The company anticipates silver production of 15.1-16.5 million ounces in 2026, with a credible pathway to 20 million ounces over the medium term [28][30] - Management highlighted the importance of safety and environmental excellence as foundational to operational success [16][18] Other Important Information - The company reported a 13% reduction in total reportable injury frequency rate, reflecting a commitment to safety culture [18] - The surface cooling project at Lucky Friday is 79% complete and on track for mid-2026 completion, aimed at improving workforce health and safety [8][22] Q&A Session Questions and Answers Question: Exploration at Keno Hill - Management noted intercepting a new high-grade ore shoot at Keno Hill, with a budget of $13 million for exploration this year [35][36] Question: Accounting Treatment for Casa Berardi - Management clarified that cash flows from Casa will continue until the closing date, with potential accounting impacts expected in Q1 [45][50] Question: Strategy for Silver Production Growth - Management emphasized the need to grow the silver portfolio and mentioned the establishment of a project generation group to explore new silver districts [61][62]