Keno Hill Continues To Ramp Up To Higher Tonnage Rates

COEUR D’ALENE, ID – Hecla Mining Company President & CEO, Rob Krcmarov, said, “Our third quarter results represent a defining moment for Hecla, with record-breaking performance across a number of key financial metrics. We achieved quarterly revenues of $410 million, net income of $101 million, records in the Company’s 134 year history. Operationally, all four producing assets contributed to positive free cash flow for the second consecutive quarter. Greens Creek, Alaska, continues to exceed expectations, Keno Hill, Yukon Territory, has delivered three consecutive quarters of profitability under our ownership, Lucky Friday, in Idaho, maintained consistent production while advancing the surface cooling project, and Casa Berardi’s cost trajectory is improving. This validates both the quality of our asset base and the skill of our operating teams. We continue to make significant progress on our strategic priorities including operational excellence, balance sheet strength, and value creation for shareholders, which has led to these results.”
Sales increased to $409.5 million, 35% over the prior quarter, reflecting higher realized prices for all metals sold, and higher precious metals sales volumes, which were partially offset by lower lead and zinc sales volumes. Payable silver ounces sold were 27% higher compared to the prior quarter, with silver inventories declining and production up 2%. Payable gold ounces sold increased 10% compared to the prior quarter, primarily due to sales more closely matching production, with timing of sales at Greens Creek driving an increase in accounts receivable at quarter end which were settled in October.
Gross profit was $180.5 million, an increase of 51% over the prior quarter. The increase is attributable to (i) Greens Creek gross profit increasing by $33.3 million due to higher revenue driven by higher realized prices and higher concentrate sales volumes, partially offset by higher total costs of sales related to the higher volumes sold; (ii) Keno Hill gross profit increased by $16.1 million, due primarily to higher revenue driven by higher realized prices and concentrate volumes sold, partially offset by higher total costs of sales on higher volumes sold; and (iii) Lucky Friday gross profit increased $7.6 million, reflecting higher realized silver and zinc prices on 6% higher silver concentrate sales volumes over the prior quarter, offset by 9% lower zinc concentrate sold and 6% higher total costs of sales. Casa Berardi gross profit increased by $3.9 million reflecting the benefit of higher realized gold prices, offset by lower payable gold sales volumes and higher total cost of sales.
Consolidated silver total cost of sales was $157.5 million, an increase of $30.4 million or 24% from the prior quarter, primarily due to higher sales volumes sold. Depreciation, depletion and amortization expense increased $6.4 million for silver operations due to higher sales volumes.
Cash provided by operating activities was $148.0 million, nearly flat over the prior quarter, primarily attributable to unfavorable working capital changes of $37.8 million, including a $61.0 million increase in accounts receivable reflecting timing of sales at Greens Creek (majority of receivables for Greens Creek were settled in October), Lucky Friday and Keno Hill. Cash provided by operating activities was also impacted by a semi-annual interest payment on the Senior Notes. The above items were partly offset by a partial reversal in inventory realized in the prior quarter.
Greens Creek produced 2.3 million ounces of silver and 15,584 ounces of gold. Silver and gold production decreased 3% and 12% respectively over the prior quarter due to 3% and 12% lower silver and gold grades milled, respectively, and 1% decrease in tons milled. Zinc and lead production decreased 9% and 4% respectively, primarily due to lower mill throughput and grade, with grade variability consistent with plan.
Sales were $178.1 million, an increase of 46% over the prior quarter, with higher realized prices and concentrate volumes sold exceeding production, reversing a portion of the inventory built up in the prior quarter. Total cost of sales was $81.7 million, an increase of 39% over the prior quarter, primarily due to 20% higher volumes of concentrates sold and freight costs, partly offset by lower consumable costs.
Lucky Friday continued along a path of operational consistency, while continuing construction of the surface cooling project. The mill processed 105,329 tons, down 8% compared to the prior quarter, as expected due to the lower hoisting capacity in the quarter as the hoist served both production and cooling equipment movement. Silver production totaled 1.3 million ounces, consistent with the prior quarter, as lower mill throughput was offset by 7% higher milled silver grade. Lead production increased 1% to 8,894 tons, driven by higher milled grades. Zinc production declined 5% to 3,716 tons, due to 2% decrease in average milled grade.
Sales were $74.2 million, an increase of 15% over the prior quarter, due to a higher realized silver and zinc price and higher volumes of silver concentrate sold, partially offset by lower volumes of zinc concentrate sold.
Lucky Friday is executing a surface cooling project (a key infrastructure project to increase the cooling capacity required for the mine over the reserve mine-life) designed to improve operational efficiency by addressing thermal constraints in the underground mine. Once complete, this project should improve the health and safety of the underground mine by helping to lower the temperature in the mine. The project is 66% complete and tracking for completion in the first half of 2026 and its related impact on the production hoist. With the additional shaft time available in 2026, other maintenance items in the silver shaft can be advanced along with meeting the production plan.
Keno Hill produced 898,328 ounces of silver, a 20% increase over the prior quarter due to 11% higher mill throughput and milled grade. Mill throughput for the third quarter averaged 323 tons per day (“tpd”). The mill continued to rely on the ore stockpile in the quarter as Keno Hill continues to ramp up to higher tonnage rates (third quarter ore tons mined averaged 291 tpd, up 9% compared to the prior quarter). The ore stockpile is back to normal operating levels. The Company continues to advance Keno Hill toward commercial production through ongoing investment in critical infrastructure supporting the production ramp-up.
Sales were $47.6 million, increasing 82% over the prior quarter, primarily due to increased concentrate sales and higher realized silver and zinc prices. Total cost of sales was $31.2 million, $5.3 million higher than the prior quarter, due to higher concentrate sales (47% higher tons sold than the prior quarter for the silver concentrate and 36% higher for the precious metals concentrate). For the third consecutive quarter, Keno Hill achieved positive gross profit, as a result no costs were allocated to ramp-up and suspension costs.
Power reliability at Keno Hill has improved in 2025, with stable operations maintained following several days of interruption in the first quarter. With the utility’s successful completion of repairs to the hydroelectric plant serving Keno Hill, stable power has been established at the mine. This operational foundation has enabled consistent production performance and lays the groundwork for increased cash generation going forward.
Exploration results continue to be promising, supporting asset life extension and production scaling opportunities. Recent exploration success has identified new ore shoots, providing confidence in the resource base’s development potential.
Casa Berardi produced 25,070 ounces of gold, an 11% decrease over the prior quarter, driven by planned lower underground tons and grade. Total tons milled was 3% higher compared to the prior quarter. The 160 Pit generated 30% less mined tons (ore and waste) and 12% more gold produced than the prior quarter, while total production costs per ton decreased 13%. The pit’s stripping ratio is expected to continue declining in the fourth quarter of 2025, and the third-party surface contractor is demobilizing.
Sales were $93.5 million, an increase of 10% over the prior quarter, primarily due to 4% higher ounces sold and 6% higher average realized gold price. At current gold prices, Casa Berardi is positioned to sustain profitable gold production approximately through year end 2027, during this time we also anticipate strong cash flow generation. The production plan combines potential for underground mining through 2027, supplemented by ore from the 160 Pit in 2026 and surface stockpiles in 2027. This blended mining strategy should extend the mine’s productive life while lowering the risk in transition to the next development phase.
Exploration programs delivered significant progress across multiple high-priority targets, with high-impact drilling campaigns at Midas, Keno Hill, and Greens Creek demonstrating the exceptional discovery potential within our district-scale land positions. Results to date continue to support our conviction that these strategically consolidated properties hold substantial opportunities for transformative discoveries.
The U.S. Forest Service issued the final decision notice and finding of no significant impact for the Company’s 100% owned copper-silver Libby Exploration Project in Montana. This milestone provides the potential to advance the exploration phase of this asset. The Company is evaluating next steps for the Libby Exploration Project. As of December 31, 2024, Libby has Inferred Resources of 112.2 million tons grading 0.7% copper and 1.6 ounces per ton silver for contained metal of 759,420 tons of copper and 183.3 million ounces of silver.