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, net income applicable to shareholders of $321 million ($0.49 per share), and record Adjusted EBITDA of $670 million [7][12] - Total debt decreased to $276 million, with a gross debt to Adjusted EBITDA ratio of 0.4 times [7][12] - Operating cash flow was $563 million, resulting in $310 million in free cash flow, 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 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 strategy to optimize the portfolio and 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 focus on financial strength and growth [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] - Significant exploration results were reported at Midas, with high-grade mineralization supporting potential near-term production [25][26] Q&A Session Summary Question: Exploration at Keno Hill - Management noted intercepting a new high-grade ore shoot and plans to focus on expanding this area, with a budget of $13 million for exploration [35][36] Question: Accounting Treatment for Casa Berardi - Management clarified that cash flows from Casa will continue through 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 plans for a new project generation group to identify new silver districts [61][62]