Hecla Mining Co. reported adjusted net income of $6.6 million, or 1 cent per share, for the first quarter of 2023, and announced that the new Keno Hill Mine in Yukon Territory is 75% complete.
The Coeur d’Alene, Idaho-based company also posted a net loss applicable to stockholders of $3.3 million, or 1 cent per share, and the production of 4 million silver ounces, more than any quarter since 2016.
“As we continue our growth in silver production, silver revenues are now exceeding gold revenues for the second consecutive quarter,” the company’s president and chief executive officer, Phillips S. Baker Jr., said in the May 10 earnings report.
He said the Greens Creek Mine in Alaska had “excellent operational performance achieving record throughput and very strong silver and record gold production, and Lucky Friday exceeded 1.2 million ounces of silver production for the third time out of the last four quarters.”
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Greens Creek produced 2.77 million ounces of silver in the first quarter and gold production for the quarter totaled 14,885 ounces, compared with 2.43 million ounces of silver and 11,402 ounces of gold in the first quarter of 2022.
Lucky Friday in Idaho produced 1.26 million ounces of silver, compared with 887,858 ounces in the 2022 quarter, and the Casa Berardi Mine in Quebec produced 24,688 ounces of gold, down from 30,240 ounces in the first quarter of last year.
All-in sustainable costs for the quarter were $8.96 per silver ounce after by-product credits, with lower fuel costs partially offset by higher labor costs, according to Hecla. The AISC in the first quarter of 2022 was $7.37 per ounce. The AISC for gold production was $2,392 per ounce in the quarter, compared with $1,764 in the 2022 quarter.
Baker said that Greens Creek and Lucky Friday generated $69 million in free cash flow, and “our first priority in capital allocation of this free cash flow is investing in our mines – particularly Keno Hill, which remains on track to produce more than 2.5 million ounces of silver this year, Casa Berardi, where we are beginning the transition to a primarily open pit operation, and Lucky Friday, where we are completing the ore bunker and service hoist.”
Hecla stated in the earnings report that Keno Hill is expected to begin production in the third quarter of this year, and the 75% completion estimate from at the end of April. Capital spending for the first quarter totaled $17.1 million for mine development, equipment purchases and projects that included reconfiguring the secondary crushing circuit and installing underground infrastructure.
The company reported the workforce at Keno Hill is roughly 290 people.
“Hecla produced 45% of United States silver in 2022, making us the nation’s largest silver producer. With almost 17 million ounces of silver production expected in 2023 and potentially increasing to 20 million ounces by 2025, Hecla is expected to become Canada’s largest silver producer as well,” Baker said.
“Our production growth provides shareholders more exposure to silver from long-lived, low-cost mines that will help provide silver needed for solar power, the fastest growing renewable energy source,” he said in the earnings announcement.
Hecla reported that exploration and pre-development expenses in the quarter totaled $4.9 million, with exploration and definition drilling activities primarily focused on targets at Casa Berardi, Greens Creek and Keno Hill and 3D detailed geological modeling set for properties.
Hecla owns the closed Midas and Hollister underground mines in Elko County, Fire Creek in Lander County and Aurora in Mineral County.
