10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 1-8491

赫克拉矿业公司

（根据其章程所指定的正式名称）


特拉华州	77-0664171
(依据所在地或其他管辖区) 的注册地或组织地点)	(国税局雇主识别号码) 识别号码)
6500 N. Mineral Drive, 200套房科尔德阿伦, 爱达荷	83815-9408
(总部办公地址)	(邮递区号)

注册人的电话号码，包括区号：(208) 769-4100

根据法案第12(b)条规定注册的证券：


每一类的名称	交易符号:	在其上注册的交易所的名称
每股普通股面值为0.25美元的普通股	HL	请使用moomoo账号登录查看New York Stock Exchange
B系列累积可转换优先股股票，每股面值为$0.25	HL-PB	请使用moomoo账号登录查看New York Stock Exchange

请勾选以下选项以指示注册人是否在过去12个月内(或在注册人需要提交此类报告的较短时间内)已提交证券交易法1934年第13或15(d)条所要求提交的所有报告，并且在过去90天内已受到此类报告提交要求的影响。是的 ☑ 否 __

请在以下勾选方框表示注册人是否已在Regulation S-T Rule 405规定的前12个月(或在注册人需要提交此类文件的较短期间内)提交了每个互动数据文件。Yes ☑ 没有__

用复选标记指明注册人是大型加速申报人、加速申报人、非加速申报人、小型申报公司还是新兴成长型公司。参见《交易法》第12b-2条中 “大型加速申报人”、“加速申报公司”、“小型申报公司” 和 “新兴成长型公司” 的定义。


大型加速报告人	☑	加速文件提交人	☐
非加速文件提交人	☐	较小的报告公司	☐
新兴成长公司	☐

如果是新兴成长型企业，请勾选复选标记，表明注册者已选择不使用延长过渡期来符合根据证券交易法第13(a)条规定提供的任何新财务会计准则。 ☐

请勾选以下方框以指示申报人是否为外壳公司（如证券交易所法规则120.2所定义）。是☐ 不可以 ☑

请注明在最新适用日期时本发行人每种普通股的流通股数。

    班级

    2024年11月1日流通在外股份

    普通股，面值
每股面值0.25美元

    637,015,436

赫克拉矿业公司和子公司

10-Q表格

截至2024年9月30日季度结束

指数*




第I部分	财务信息	3

项目1。	基本报表(未经审计)	3
	控件综合收入（损失）简明的合并利润表-截至2024年和2023年9月30日的三个月以及截至九个月。	3
	控件现金流量简明合并利润表-截至九个月。 2024年9月30日和2023年	4
	基本报表 - 2024年9月30日和2023年12月31日	5
	截至2024年和2023年9月30日三个月和九个月的简明综合股东权益变动报表	6
	基本财务报表附注（未经审计）	8
	前瞻性声明	21
事项二	分销计划	22
	概述	22
	合并运营业绩	23
	总销售成本与现金成本的调解，不包括副产品信贷费用和现金成本，副产品信贷后（非GAAP）以及全面持续性成本，不包括副产品信贷前和全面持续性成本，副产品信贷后（非GAAP）	37
	财务流动性和资本资源	50
	合同义务、或有负债和承诺	53
	重要会计估计	53
	不设为资产负债表账目之离线安排	53
	$	54
第3项。	有关市场风险的定量和定性披露	57
事项4。	控制和程序	58

第二部分	其他信息	59

项目1。	法律诉讼	59
项目1A。	风险因素	59
事项4。	矿山安全披露	59
项目5。	其他信息	59
项目6。	展示资料	60
签名		61
*第二部分的第2和第3项目因不适用而被省略。

第一部分 - 金融信息财务信息

第 1 项。国际泳联财务报表

赫克拉矿业公司和子公司

精简的综合损益表未经审计的综合损益表及综合收益（亏损）陈述

（以千美元和千股为单位，除每股金额外）


	三个月截止						九个月结束
	2024年9月30日			2023年9月30日			2024年9月30日			2023年9月30日
销售	$	245,085		$	181,906		$	680,270		$	559,537
销售成本和其他直接生产成本		144,855			112,212			406,780			345,516
折旧、减值和摊销		40,944			36,217			143,614			107,937
销售成本合计		185,799			148,429			550,394			453,453
毛利润		59,286			33,477			129,876			106,084
其他营业费用：
一般行政		10,401			7,596			36,357			30,449
勘探和前期开发		10,553			13,686			21,577			25,546
增加和暂停成本		13,679			21,025			33,740			48,684
关闭业务和环境问题准备金		1,542			2,256			3,681			6,411
递减资产、厂房和设备		14,464			—			14,464			—
其他经营（收入）支出，净额		(13,828	)		1,555			(48,082	)		(2,729	)
其他营业费用		36,811			46,118			61,737			108,361
营业收支（亏损）		22,475			(12,641	)		68,139			(2,277	)
其他支出:
利息支出		(10,901	)		(10,710	)		(36,050	)		(31,186	)
公平价值调整，净额		3,654			(6,397	)		6,804			(5,774	)
净外汇期货损失		(3,246	)		4,176			3,409			434
其他收入		1,229			1,657			3,921			4,425
其他费用总计		(9,264	)		(11,274	)		(21,916	)		(32,101	)
净利润（税前亏损）		13,211			(23,915	)		46,223			(34,378	)
收入和矿业税（准备金）收益		(11,450	)		1,500			(22,345	)		(6,904	)
		1,761			(22,415	)		23,878			(41,282	)
优先股股息		(138	)		(138	)		(414	)		(414	)
净利润（亏损）适用于普通股股东	$	1,623		$	(22,553	)	$	23,464		$	(41,696	)
综合收益（损失）：
	$	1,761		$	(22,415	)	$	23,878		$	(41,282	)
衍生合约定为套期交易的公允价值变动		3,171			(11,384	)		(8,720	)		364
综合收益（损失）	$	4,932		$	(33,799	)	$	15,158		$	(40,918	)
基本每股收益（损失）扣除优先股股息后	$	0.00		$	(0.04	)	$	0.04		$	(0.07	)
摊薄每股收益（损失）扣除优先股股息后	$	0.00		$	(0.04	)	$	0.04		$	(0.07	)
基本每股普通股平均流通股数		621,921			607,896			618,419			604,028
稀释每股普通股平均流通股数		625,739			607,896			621,792			604,028

附注是中期简明合并财务报表不可或缺的一部分。

赫克拉矿业公司和子公司

简明的现金流量表综合现金流量表（未经审计）

(以千为单位)


	九个月结束
	2024年9月30日			2023年9月30日
经营活动：
	$	23,878		$	(41,282	)
净利润（损失）中包括的非现金要素：
Depreciation, depletion and amortization		149,265			111,705
库存调整		10,074			16,332
公平价值调整，净额		(6,804	)		5,774
重置和关闭成本准备金		5,428			7,805
基于股票的报酬		6,401			5,122
延迟所得税		14,261			795
递减资产、厂房和设备		14,464			—
净汇率期货收益		(3,409	)		(434	)
其他非现金项目，净额		145			1,624
资产和负债的变动：
应收账款		(24,199	)		25,020
存货		(27,375	)		(24,339	)
其他流动资产和非流动资产		353			(15,045	)
应付账款、应计费用和其他流动负债		(6,991	)		(2,389	)
应计的工资和相关福利		6,592			(11,244	)
应计税费		1,069			(1,008	)
应计概括和止障成本以及其他非流动负债		(12,345	)		(3,821	)
经营活动产生的现金流量净额		150,807			74,615
投资活动：
物业、工厂和矿山开发的新增投资		(153,708	)		(161,265	)
资产处置收益		1,473			160
投资购买		(73	)		(1,753	)
投资活动产生的净现金流出		(152,308	)		(162,858	)
筹资活动：
出售普通股的收入，净额		58,368			25,888
回购公司股份		(1,197	)		(2,036	)
借款负债		150,000			119,000
偿还债务		(265,000	)		(39,000	)
向普通股和优先股股东支付的股息		(16,691	)		(11,755	)
偿还融资租赁		(7,841	)		(7,990	)
筹资活动的净现金流量(使用)/提供的净现金流量		(82,361	)		84,107
现金汇率影响		(220	)		77
现金、现金等价物和受限现金及现金等价物的净减少		(84,082	)		(4,059	)
期初现金、现金等价物和限制性现金及现金等价物		107,539			105,907
期末现金、现金等价物和限制性现金及现金等价物	$	23,457		$	101,848
现金流量补充披露：
支付的利息现金	$	44,424		$	37,514
支付的税款和矿业税，净额	$	5,730		$	7,385
重大的非现金投资和筹资活动：
财务租赁义务和使用权资产的增加	$	—		$	16,092
发行给ATAC Resources Ltd.股东的普通股	$	—		$	18,789
作为激励补偿发行的普通股	$	4,425		$	—
发行给董事的普通股	$	770		$	676
普通股票发行给临时CEO	$	182		$	—
发行用于401-k匹配的普通股票	$	3,714		$	3,713

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

Hecla Mining Company and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(In thousands, except shares)


	September 30, 2024			December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	22,273		$	106,374
Accounts receivable:
Trade		40,718			19,425
Other, net		16,218			13,691
Inventories:
Product inventories		34,807			28,823
Materials and supplies		69,721			64,824
Other current assets		22,230			27,125
Total current assets		205,967			260,262
Investments		42,019			33,724
Restricted cash and cash equivalents		1,184			1,165
Property, plant and mine development, net		2,665,342			2,666,250
Operating lease right-of-use assets		5,173			8,349
Deferred tax assets		—			2,883
Other non-current assets		36,026			38,471
Total assets	$	2,955,711		$	3,011,104
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities	$	86,976		$	81,599
Accrued payroll and related benefits		26,447			28,240
Accrued taxes		4,563			3,501
Current debt		35,874			—
Finance leases		7,299			9,752
Accrued reclamation and closure costs		10,261			9,660
Accrued interest		5,192			14,405
Other current liabilities		11,960			10,303
Total current liabilities		188,572			157,460
Accrued reclamation and closure costs		108,329			110,797
Long-term debt including finance leases		496,631			653,063
Deferred tax liabilities		111,331			104,835
Other non-current liabilities		12,566			16,845
Total liabilities		917,429			1,043,000
Commitments and contingencies (Notes 4, 7, 8, and 11)
STOCKHOLDERS’ EQUITY

Preferred stock, 5,000,000 shares authorized:
Series B preferred stock, $0.25 par value, 157,776 shares issued and outstanding, liquidation preference — $7,889		39			39
Common stock, $0.25 par value, authorized 750,000,000 shares; issued September 30, 2024 — 637,078,901 shares and December 31, 2023 — 624,647,379 shares		159,185			156,076
Capital surplus		2,413,546			2,343,747
Accumulated deficit		(496,674	)		(503,861	)
Accumulated other comprehensive (loss) income, net		(2,883	)		5,837
Less treasury stock, at cost; September 30, 2024 — 8,813,127 and December 31, 2023 — 8,535,161 shares issued and held in treasury		(34,931	)		(33,734	)
Total stockholders’ equity		2,038,282			1,968,104
Total liabilities and stockholders’ equity	$	2,955,711		$	3,011,104

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

Hecla Mining Company and Subsidiaries

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

(Dollars are in thousands, except for share and per share amounts)


	Three Months Ended September 30, 2024
	Series B Preferred Stock	Common Stock	Capital Surplus	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss), net	Treasury Stock	Total
Balances, July 1, 2024	$39	$156,745	$2,354,004	$(489,738)	$(6,054)	$(34,931)	$1,980,065
Net income	—	—	—	1,761	—	—	1,761
Stock-based compensation expense	—	—	2,128	—	—	—	2,128
Incentive compensation units distributed (357,723 shares)	—	89	981	—	—	—	1,070
Common stock issued as compensation to interim CEO (20,840 shares)	—	5	122	—	—	—	127
Common stock ($0.01375 per share) and Series B Preferred stock ($0.875 per share) dividends declared	—	—	—	(8,697)	—	—	(8,697)
Common stock issued under ATM program (9,090,726 shares)	—	2,273	54,992	—	—	—	57,265
Common stock issued for 401(k) match (291,794 shares)	—	73	1,319	—	—	—	1,392
Other comprehensive income	—	—	—	—	3,171	—	3,171
Balances, September 30, 2024	$39	$159,185	$2,413,546	$(496,674)	$(2,883)	$(34,931)	$2,038,282


	Three Months Ended September 30, 2023
	Series B Preferred Stock	Common Stock	Capital Surplus	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss), net	Treasury Stock	Total
Balances, July 1, 2023	$39	$153,334	$2,289,607	$(430,606)	$14,196	$(33,734)	$1,992,836
Net loss	—	—	—	(22,415)	—	—	(22,415)
Stock-based compensation expense	—	—	1,758	—	—	—	1,758
Common stock ($0.00625 per share) and Series B Preferred stock ($0.875 per share) dividends declared	—	—	—	(3,947)	—	—	(3,947)
Common stock issued for 401(k) match (283,541 shares)	—	71	1,386	—	—	—	1,457
Common stock issued to ATAC Resources Ltd. shareholders (3,676,904 shares)	—	919	17,870	—	—	—	18,789
Common stock issued to directors (125,063 shares)	—	31	645	—	—	—	676
Other comprehensive loss	—	—	—	—	(11,384)	—	(11,384)
Balances, September 30, 2023	$39	$154,355	$2,311,266	$(456,968)	$2,812	$(33,734)	$1,977,770


	Nine Months Ended September 30, 2024
	Series B Preferred Stock	Common Stock	Capital Surplus	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss), net	Treasury Stock	Total
Balances, January 1, 2024	$39	$156,076	$2,343,747	$(503,861)	$5,837	$(33,734)	$1,968,104
Net income	—	—	—	23,878	—	—	23,878
Stock-based compensation expense	—	—	5,449	—	—	—	5,449
Incentive compensation units distributed (2,134,659 shares)	—	534	3,891	—	—	(1,197)	3,228
Common stock issued as compensation to interim CEO (31,671 shares)	—	8	174	—	—	—	182
Common stock issued to directors (145,687 shares)	—	37	733	—	—	—	770
Common stock ($0.02625 per share) and Series B Preferred stock ($1.75 per share) dividends declared	—	—	—	(16,691)	—	—	(16,691)
Common stock issued under ATM program (9,339,287 shares)	—	2,335	56,033	—	—	—	58,368
Common stock issued for 401(k) match (780,218 shares)	—	195	3,519	—	—	—	3,714
Other comprehensive loss	—	—	—	—	(8,720)	—	(8,720)
Balances, September 30, 2024	$39	$159,185	$2,413,546	$(496,674)	$(2,883)	$(34,931)	$2,038,282


	Nine Months Ended September 30, 2023
	Series B Preferred Stock	Common Stock	Capital Surplus	Accumulated Deficit	Accumulated Other Comprehensive Income, net	Treasury Stock	Total
Balances, January 1, 2023	$39	$151,819	$2,260,290	$(403,931)	$2,448	$(31,698)	$1,978,967
Net loss	—	—	—	(41,282)	—	—	(41,282)
Stock-based compensation expense	—	—	4,446	—	—	—	4,446
Incentive compensation units distributed (1,435,193 shares)	—	359	(359)	—	—	(2,036)	(2,036)
Common stock ($0.0125 per share) and Series B Preferred stock ($1.75 per share) dividends declared	—	—	—	(11,755)	—	—	(11,755)
Common stock issued under ATM program (4,253,334 shares)	—	1,063	24,825	—	—	—	25,888
Common stock issued for 401(k) match (657,678 shares)	—	164	3,549	—	—	—	3,713
Common stock issued to ATAC Resources Ltd. shareholders (3,676,904 shares)	—	919	17,870	—	—	—	18,789
Common stock issued to directors (125,063 shares)	—	31	645	—	—	—	676
Other comprehensive income	—	—	—	—	364	—	364
Balances, September 30, 2023	$39	$154,355	$2,311,266	$(456,968)	$2,812	$(33,734)	$1,977,770

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

Note 1. Basis of Preparation of Financial Statements

The accompanying unaudited interim condensed consolidated financial statements of Hecla Mining Company and its subsidiaries (collectively, “Hecla,” “the Company,” “we,” “our,” or “us,” except where the context requires otherwise) have been prepared in accordance with the instructions to Form 10-Q and do not include all information and disclosures required annually by accounting principles generally accepted in the United States of America (“GAAP”). Therefore, this information should be read in conjunction with the Company’s consolidated financial statements and notes contained in our annual report for the year ended December 31, 2023, which were revised to conform with current year financial statement changes as described in Note 2 "Business Segments and Sales of Products", and are included in Exhibit 99.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on May 20, 2024. The consolidated December 31, 2023 balance sheet data was derived from our audited consolidated financial statements. The information furnished herein reflects all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods reported. All such adjustments are, in the opinion of management, of a normal recurring nature. Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

Note 2. Business Segments and Sales of Products

We discover, acquire and develop mines and other mineral interests and produce and market (i) concentrates containing silver, gold, lead, zinc and copper, (ii) carbon material containing silver and gold, and (iii) doré containing silver and gold. We are currently organized and managed in four segments: Greens Creek, Lucky Friday, Keno Hill and Casa Berardi.

Effective January 2024, we revised our internal reporting provided to our Chief Operating Decision Maker to no longer include any financial performance information for our Nevada Operations, reflecting the current status of the Nevada Operations being on care and maintenance. General corporate activities not associated with operating mines and their various exploration activities, idle properties and environmental remediation services in the Yukon, Canada, and the previously separately reported Nevada Operations are presented as “Other". The presentation of the prior period information disclosed below has been revised to reflect this change.

The following tables present information about our reportable segments sales for the three and nine months ended September 30, 2024 and 2023 (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Total sales to external customers:
Greens Creek	$	116,568		$	96,459		$	309,537		$	290,961
Lucky Friday		51,072			21,409			145,483			113,167
Keno Hill		19,809			16,001			59,606			17,582
Casa Berardi		50,308			46,912			150,515			134,856
Other		7,328			1,125			15,129			2,971
	$	245,085		$	181,906		$	680,270		$	559,537

Income (loss) from operations:
Greens Creek	$	37,916		$	31,169		$	100,321		$	92,824
Lucky Friday		12,552			(4,935	)		74,817			20,161
Keno Hill		(12,674	)		(7,462	)		(25,467	)		(24,145	)
Casa Berardi		3,403			(12,433	)		(24,309	)		(35,492	)
Other		(18,722	)		(18,980	)		(57,223	)		(55,625	)
	$	22,475		$	(12,641	)	$	68,139		$	(2,277	)

Reconciliation of income (loss) from operations to income (loss) before income and mining taxes:
Income (loss) from operations:	$	22,475		$	(12,641	)	$	68,139		$	(2,277	)
Adjustments all attributable to the Other segment
Interest expense		(10,901	)		(10,710	)		(36,050	)		(31,186	)
Fair value adjustments, net		3,654			(6,397	)		6,804			(5,774	)
Net foreign exchange (loss) gain		(3,246	)		4,176			3,409			434
Other income		1,229			1,657			3,921			4,425
Income (loss) before income and mining taxes	$	13,211		$	(23,915	)	$	46,223		$	(34,378	)

Other sales for the three and nine months ended September 30, 2024 and 2023 is comprised of revenue from our environmental remediation services subsidiary in the Yukon for both years presented and Nevada Operations metal sales in 2023. During the three and nine months ended September 30, 2024, Keno Hill sold $1.6 million and $3.0 million, respectively, of zinc concentrate to Greens Creek which is eliminated upon consolidation.

Lucky Friday's income from operations for the three and nine months ended September 30, 2024 includes $14.8 million and $50.0 million, respectively, of business interruption and property damage insurance proceeds received during the respective periods related to the fire which suspended Lucky Friday's operations from August 2023 through January 8, 2024. The insurance proceeds received are recorded as part of "Other operating (income) expense, net" in our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

During the three and nine month periods ended September 30, 2024, the Company wrote down $14.5 million of property, plant and mine development which had no salvage value. Of this amount, $13.9 million is included in Lucky Friday's income from operations and is related to the remote vein miner machine for which (i) we no longer had a use following the success of the Underhand Closed Bench ("UCB") mining method, (ii) we had been unsuccessful in locating a buyer, and (iii) the vendor advised us during the period that it would discontinue support for the program. The write down is recorded as part of "Write down of Property, Plant and Mine Development" in our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Sales by metal for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Silver	$	109,756		$	74,425		$	308,681		$	235,447
Gold		79,239			70,206			229,123			208,216
Lead		21,591			15,719			65,002			62,778
Zinc		37,281			33,066			94,741			91,912
Copper		409			—			409			—
Less: Smelter and refining charges		(10,518	)		(12,550	)		(32,814	)		(40,743	)
Total metal sales		237,758			180,866			665,142			557,610
Environmental remediation services		7,327			1,040			15,128			1,927
Total sales	$	245,085		$	181,906		$	680,270		$	559,537

Sales of metals for the three and nine months ended September 30, 2024 include a net gain of $0.6 million and net loss of $8.8 million, respectively, on financially-settled forward contracts for silver, gold, lead and zinc and for the three and nine months ended September 30, 2023 include net gains of $4.0 million and $13.1 million, respectively, on such contracts. See Note 8 for more information.

The following table presents total assets by reportable segment as of September 30, 2024 and December 31, 2023 (in thousands):


	September 30, 2024		December 31, 2023
Total assets:
Greens Creek	$	566,552	$	569,369
Lucky Friday		563,833		578,110
Keno Hill		401,587		362,986
Casa Berardi		666,259		683,035
Other		757,480		817,604
	$	2,955,711	$	3,011,104

Note 3. Income and Mining Taxes

Major components of our income and mining tax for the three and nine months ended September 30, 2024 and 2023 are as follows (in thousands):


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2024			2023			2024			2023
Current:
Domestic	$	(1,871	)	$	(1,182	)	$	(4,824	)	$	(2,980	)
Foreign		(1,006	)		(1,029	)		(3,260	)		(3,050	)
Total current income and mining tax provision		(2,877	)		(2,211	)		(8,084	)		(6,030	)
Deferred:
Domestic		(9,532	)		(3,696	)		(26,155	)		(17,619	)
Foreign		959			7,407			11,894			16,745
Total deferred income and mining tax (provision) benefit		(8,573	)		3,711			(14,261	)		(874	)
Total income and mining tax (provision) benefit	$	(11,450	)	$	1,500		$	(22,345	)	$	(6,904	)

The income and mining tax provision for the three and nine months ended September 30, 2024 and 2023 varies from the amounts that would have resulted from applying the statutory tax rates to pre-tax income or loss due primarily to the impact of taxation in foreign jurisdictions, non-recognition of net operating losses and foreign exchange gains and losses in certain jurisdictions.

For the three and nine months ended September 30, 2024, we used the annual effective tax rate method to calculate the tax provision. Valuation allowances on Nevada, Mexico and certain Canadian net operating losses were treated as discrete adjustments to the tax provision.

Note 4. Employee Benefit Plans

We sponsor three defined benefit pension plans, two of which cover substantially all U.S. employees. Net periodic pension benefit for the plans consisted of the following for the three and nine months ended September 30, 2024 and 2023 (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Service cost	$	914		$	949		$	2,744		$	2,847
Interest cost		2,076			1,993			6,227			5,979
Expected return on plan assets		(3,136	)		(3,107	)		(9,408	)		(9,321	)
Amortization of prior service cost		67			125			199			375
Amortization of net loss		15			(47	)		46			(141	)
Net periodic pension benefit	$	(64	)	$	(87	)	$	(192	)	$	(261	)

For the three and nine months ended September 30, 2024 and 2023, the service cost component of net periodic pension benefit is included in the same line items of our condensed consolidated financial statements as other employee compensation costs. The net benefit related to all other components of net periodic pension cost of $1.0 million and $2.9 million for the three and nine months ended September 30, 2024, respectively, and $1.0 million and $3.1 million for the three and nine months ended September 30, 2023, respectively, is included in other income on our condensed consolidated statements of operations and comprehensive income (loss).

During July 2024, we closed the Hecla Mining Company Retirement Plan for Employees (the “Plan”) to new participants. The closure of the Plan does not affect employees hired prior to July 19, 2024, and they will continue to accrue benefits. Benefits to retirees will continue unchanged.

Note 5. Earnings (Loss) Per Common Share

We calculate basic income (loss) per common share on the basis of the weighted average number of shares of common stock outstanding during the period. Diluted income (loss) per share is calculated using the weighted average number of shares of common stock outstanding during the period plus the effect of potential dilutive common shares during the period using the treasury stock and if-converted methods.

Potential dilutive shares of common stock include outstanding unvested restricted stock awards, deferred restricted stock units, performance based units, warrants and convertible preferred stock (collectively referred to as dilutive units) for periods in which we have reported net income. For periods in which we report net losses, potential dilutive units are excluded, as their conversion and exercise would be anti-dilutive.

The following table represents net income (loss) per common share – basic and diluted (in thousands, except income (loss) per share):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Numerator
Net income (loss) applicable to common stockholders	$	1,761		$	(22,415	)	$	23,878		$	(41,282	)
Preferred stock dividends		(138	)		(138	)		(414	)		(414	)
Net income (loss) applicable to common stockholders	$	1,623		$	(22,553	)	$	23,464		$	(41,696	)

Denominator
Basic weighted average common shares		621,921			607,896			618,419			604,028
Dilutive units		3,818			—			3,373			—
Diluted weighted average common shares		625,739			607,896			621,792			604,028

Basic earnings (loss) per common share	$	0.00		$	(0.04	)	$	0.04		$	(0.07	)
Diluted earnings (loss) per common share	$	0.00		$	(0.04	)	$	0.04		$	(0.07	)

For the three and nine months ended September 30, 2023, all outstanding dilutive units were excluded from the computation of diluted loss per share, as our reported net loss would cause their conversion and exercise to have an anti-dilutive effect on the calculation of diluted loss per share.

Note 6. Stockholders’ Equity

At-The-Market ("ATM") Equity Distribution Agreement

Pursuant to an equity distribution agreement dated February 18, 2021, we may offer and sell up to 60 million shares of our common stock from time to time to or through sales agents. Sales of the shares, if any, will be made by means of ordinary brokers transactions or as otherwise agreed between the Company and the agents as principals. Whether or not we engage in sales from time to time may depend on a variety of factors, including our share price, our cash resources, customary black-out restrictions, and whether we have any material inside information. The agreement can be terminated by us at any time. Any sales of shares under the agreement are registered under the Securities Act of 1933, as amended, pursuant to a shelf registration statement on Form S-3. Under the agreement we have sold 23,844,684 shares for total proceeds of $132.3 million, net of commissions and fees of $2.1 million from September 2022 through September 30, 2024. During the three months ended September 30, 2024, we sold 9,090,726 shares under the agreement for proceeds of $57.3 million, net of commissions and fees of $0.9 million and during the nine months ended September 30, 2024, we sold 9,339,287 shares under the agreement for proceeds of $58.4 million, net of commissions and fees of $0.94 million.

Stock-based Compensation Plans

The Company has stock incentive plans for executives, directors and eligible employees, under which performance shares, restricted stock and shares of common stock are granted. Stock-based compensation expense for restricted stock unit, performance-based grants and common stock grants (collectively "incentive compensation") to employees, shares granted to the interim CEO and non-employee directors totaled $2.3 million and $6.4 million for the three and nine months ended September 30, 2024, respectively, and $2.4 million and $5.1 million for the three and nine months ended September 30, 2023, respectively. At September 30, 2024, there was $10.0 million of unrecognized stock-based compensation cost which is expected to be recognized over a weighted-average remaining vesting period of 2.2 years.

The following table summarizes the incentive compensation grants awarded during the nine months ended September 30, 2024:


Grant date	Award type	Number granted		Grant date fair value per share
June 21, 2024	Restricted stock		1,466,677	$5.17
June 21, 2024	Performance based		518,336	$3.32
August 20, 2024	Restricted stock		5,092	$6.01
June 21, 2024	Performance based		5,092	$3.32

In connection with the vesting of incentive compensation, employees have in the past, at their election and when permitted by us, chosen to satisfy their minimum tax withholding obligations through net share settlement, pursuant to which the Company withholds the number of shares necessary to satisfy such withholding obligations and pays the obligations in cash. As a result, in the nine months ended September 30, 2024, we withheld 277,966 shares valued at approximately $1.2 million, or approximately $4.31 per share.

Common Stock Dividends

The following table summarizes the dividends our Board of Directors have declared and we have paid during 2024 pursuant to our dividend policy:


Quarter	Prior Quarter Realized Silver Price	Silver-linked component	Minimum component	Total dividend per share
First	23.47	$0.0025	$0.00375	$0.00625
Second	24.77	$0.0025	$0.00375	$0.00625
Third	29.77	$0.010	$0.00375	$0.01375

Accumulated Other Comprehensive Income (Loss), Net

The following table lists the beginning balance, quarterly activity and ending balances, net of income and mining tax, of each component of “Accumulated other comprehensive income (loss), net” (in thousands):


	Changes in fair value of derivative contracts designated as hedge transactions			Adjustments For Pension Plans			Total Accumulated Other Comprehensive Income (Loss), Net
Balance January 1, 2024	$	13,708		$	(7,871	)	$	5,837
Change in fair value of derivative contracts		(3,971	)		—			(3,971	)
Gains and deferred gains transferred from accumulated other comprehensive income		(1,432	)		—			(1,432	)
Balance March 31, 2024	$	8,305		$	(7,871	)	$	434
Changes in fair value of derivative contracts		(4,545	)		—			(4,545	)
Gains and deferred gains transferred from accumulated other comprehensive income		(1,943	)		—			(1,943	)
Balance June 30, 2024	$	1,817		$	(7,871	)	$	(6,054	)
Changes in fair value of derivative contracts		3,872			—			3,872
Gains and deferred gains transferred from accumulated other comprehensive income		(701	)		—			(701	)
Balance September 30, 2024	$	4,988		$	(7,871	)	$	(2,883	)

Balance January 1, 2023	$	9,162		$	(6,714	)	$	2,448
Changes in fair value of derivative contracts		8,665			—			8,665
Gains and deferred gains transferred from accumulated other comprehensive income		(2,149	)		—			(2,149	)
Balance March 31, 2023	$	15,678		$	(6,714	)	$	8,964
Changes in fair value of derivative contracts		7,445			—			7,445
Gains and deferred gains transferred from accumulated other comprehensive income		(2,213	)		—			(2,213	)
Balance June 30, 2023	$	20,910		$	(6,714	)	$	14,196
Changes in fair value of derivative contracts		(5,265	)		—			(5,265	)
Gains and deferred gains transferred from accumulated other comprehensive income		(6,119	)		—			(6,119	)
Balance September 30, 2023	$	9,526		$	(6,714	)	$	2,812

Note 7. Debt, Credit Agreement and Leases

Our debt as of September 30, 2024 and December 31, 2023 consisted of our 7.25% Senior Notes due February 15, 2028 (“Senior Notes”), our Series 2020-A Senior Notes due July 9, 2025 (the “IQ Notes”) and any drawn amounts on our $225 million Credit Agreement, which is described separately below. The following tables summarize our current and long-term debt balances, including principal amounts outstanding under the Credit Agreement, as of September 30, 2024 and December 31, 2023 (in thousands):


	September 30, 2024
	Senior Notes			IQ Notes		Credit Agreement		Total
Principal	$	475,000		$	35,735	$	13,000	$	523,735
Unamortized discount/premium and issuance costs		(3,044	)		139		—		(2,905	)
Long-term debt balance	$	471,956		$	—	$	13,000	$	484,956
Current debt balance	$	—		$	35,874		—	$	35,874


	December 31, 2023
	Senior Notes			IQ Notes		Credit Agreement		Total
Principal	$	475,000		$	36,473	$	128,000	$	639,473
Unamortized discount/premium and issuance costs		(3,730	)		257		—		(3,473	)
Long-term debt balance	$	471,270		$	36,730	$	128,000	$	636,000

The following table summarizes the scheduled annual future payments, including interest, for our Senior Notes, IQ Notes, and finance and operating leases as of September 30, 2024 (in thousands). Operating leases are included in other current and non-current liabilities on our condensed consolidated balance sheets. The amounts for the IQ Notes are stated in U.S. dollars (“USD”) based on the USD/Canadian dollar (“CAD”) exchange rate as of September 30, 2024.


Twelve-month period ending September 30,	Senior Notes		IQ Notes		Finance Leases			Operating Leases
2025	$	34,438	$	38,064	$	8,303		$	1,862
2026		34,438		—		6,474			1,298
2027		34,438		—		3,200			1,221
2028		487,914		—		1,172			1,150
2029		—		—		1,172			990
Thereafter		—		—		879			5,138
		591,228		38,064		21,200			11,659
Less: effect of discounting						(2,226	)		(2,948	)
Total	$	591,228	$	38,064	$	18,974		$	8,711

Credit Agreement

On July 21, 2022, we entered into a revolving credit agreement (the "Original Credit Agreement") with various financial institutions (the “Lenders”), Bank of Montreal and Bank of America, N.A. as letters of credit issuers, and Bank of America, N.A., as administrative agent for the Lenders and as swingline lender. The Original Credit Agreement was amended on May 3, 2024, when we entered into a First Amendment to Credit Agreement (the “First Amendment”), which made certain changes to the Original Credit Agreement (the Original Credit Agreement, as amended, modified and supplemented by the First Amendment, is referred to hereafter as the “Credit Agreement”). The First Amendment modified the Original Credit Agreement as follows:

•

Increased the amount available for borrowing to $225 million from $150 million;

•

Extended the maturity date to July 21, 2028 from July 21, 2026 (the maturity date of the Credit Agreement will be accelerated to August 15, 2027 if our Senior Notes are not refinanced by that date);

•

National Bank, TD Securities, Bank of Nova Scotia and ING were added as new Lenders and Credit Suisse AG, New York Branch assigned its interests in the Original Credit Agreement to its affiliate UBS AG, Stamford Branch immediately prior to entering into the First Amendment.

Proceeds of the revolving loans under the Credit Agreement may be used for general corporate purposes. The interest rate on the outstanding loans under the Credit Agreement is based on the Company’s net leverage ratio and is calculated at (i) Term Secured Overnight Financing Rate ("SOFR") plus 2% to 3.5% or (ii) Bank of America’s Base Rate plus 1% to 2.5% with Base Rate being the

highest of (i) the Bank of America prime rate, (ii) the Federal Funds rate plus .50% or (iii) Term SOFR plus 1.00%. For each amount drawn, we elect whether we draw on a one, three or six month basis or annual basis for SOFR. If we elect to draw for greater than six months, we pay interest quarterly on the outstanding amount.

We are also required to pay a commitment fee of between 0.45% to 0.78750%, depending on our net leverage ratio. Letters of credit issued under the Credit Agreement bear a fee between 2.00% and 3.50% based on our net leverage ratio, as well as a fronting fee to each issuing bank at an agreed upon rate per annum on the average daily dollar amount of our letter of credit exposure.

Hecla Mining Company and certain of our subsidiaries are the borrowers under the Credit Agreement, while certain of our other subsidiaries are guarantors of the borrowers’ obligations under the Credit Agreement. As further security, the Credit Agreement is collateralized by a mortgage on the Greens Creek mine, the equity interests of subsidiaries that own the Greens Creek mine or are part of the Greens Creek Joint Venture and our subsidiary Hecla Admiralty Company (the “Greens Creek Group”), and by all of the Greens Creek Group’s rights and interests in the Greens Creek Joint Venture Agreement, and in all assets of the joint venture and of any member of the Greens Creek Group.

At September 30, 2024, we had net draws of $13.0 million outstanding at an interest rate of 7.8%, and $6.3 million of outstanding letters of credit under the Credit Agreement. Letters of credit that are outstanding reduce availability under the Credit Agreement.

We believe we were in compliance with all covenants under the Credit Agreement as of September 30, 2024.

Note 8. Derivative Instruments

General

Our current risk management policy provides that up to 75% of five years of our foreign currency, and 100% of our metals price exposure may be covered under a derivatives program, with certain other limitations. Our program also utilizes derivatives to manage price risk exposure created from when revenue is recognized from a shipment of concentrate until final settlement.

These instruments expose us to (i) credit risk in the form of non-performance by counterparties for contracts in which the contract price exceeds the spot price of the hedged commodity or foreign currency and (ii) price risk to the extent that the spot price or currency exchange rate exceeds the contract price for quantities of our production and/or forecasted costs covered under contract positions.

Foreign Currency

Our wholly-owned subsidiaries owning the Casa Berardi operation and Keno Hill operation are USD-functional entities which routinely incur expenses denominated in CAD. Such expenses expose us to exchange rate fluctuations between the USD and CAD. We have a program to manage our exposure to fluctuations in the USD exchange rate for these subsidiaries' future operating and capital costs denominated in CAD. The program related to forecasted cash operating costs at Casa Berardi and Keno Hill utilizes forward contracts to buy CAD, some of which are designated as cash flow hedges. As of September 30, 2024, we have a total of 359 forward contracts outstanding to buy a total of CAD $236.9 million having a notional amount of USD $178.0 million to hedge the following exposures for 2024 through 2026:

•

Forecasted cash operating costs at Casa Berardi and Keno Hill of CAD $194.7 million at an average CAD-to-USD exchange rate of 1.327.

•

Forecasted capital expenditures at Casa Berardi of CAD$19.5 million at an average CAD-to-USD exchange rate of 1.347.

•

Forecasted capital expenditures at Keno Hill of CAD$12.2 million at an average CAD-to-USD exchange rate of 1.356.

•

Forecasted exploration expenditures at Casa Berardi and Keno Hill of CAD$1.6 million at an average CAD-to-USD exchange rate of 1.3608.

•

Forecasted Corporate costs of CAD$8.9 million at an average CAD-to-USD exchange rate of 1.358.

As of September 30, 2024 and December 31, 2023, we recorded the following balances for the fair value of the foreign currency forward contracts (in millions):


	September 30,			December 31,
Balance sheet line item:	2024			2023
Other current assets	$	0.4		$	2.7
Other non-current assets	$	0.4		$	2.0
Other current liabilities	$	(1.7	)	$	(1.1	)
Other non-current liabilities	$	(0.3	)	$	(0.4	)

Net unrealized losses of $1.6 million related to the effective portion of the foreign currency forward contracts designated as hedges are included in accumulated other comprehensive income (loss) as of September 30, 2024. Unrealized gains and losses will be transferred from accumulated other comprehensive income (loss) to current earnings as the underlying operating expenses are recognized. We estimate $1.5 million in net unrealized losses included in accumulated other comprehensive income (loss) as of September 30, 2024 will be reclassified to current earnings in the next twelve months.

Net realized losses of $1.5 million and $3.0 million for the three and nine months ended September 30, 2024, respectively, and $0.6 million and $2.5 million for the three and nine months ended September 30, 2023, respectively, on contracts related to underlying expenses which have been recognized were transferred from accumulated other comprehensive income (loss) and included in cost of sales and other direct production costs.

A net gain of $0.5 million and a net loss of $1.9 million for the three and nine months ended September 30, 2024, respectively, and a net loss of $3.2 million and a net gain of $0.1 million for the three and nine months ended September 30, 2023, respectively, were related to contracts not designated as hedges.

No net unrealized gains or losses related to ineffectiveness of the hedges are included in fair value adjustments, net on our consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2024 and 2023, respectively.

Metals Prices

We are currently using financially-settled forward contracts to manage the exposure to:

•

changes in prices of silver, gold, zinc and lead contained in our concentrate shipments between the time of shipment and final settlement; and

•

changes in prices of zinc and lead (but not silver and gold) contained in our forecasted future concentrate shipments.

The following tables summarize the quantities of metals committed under forward metals contracts at September 30, 2024 and December 31, 2023:


September 30, 2024	Ounces/pounds under contract (in 000's except gold)								Average price per ounce/pound
	Silver		Gold		Zinc		Lead		Silver		Gold		Zinc		Lead
	(ounces)		(ounces)		(pounds)		(pounds)		(ounces)		(ounces)		(pounds)		(pounds)
Contracts on provisional sales
2024 settlements		1,460		500		18,905		13,558	$	30.29		2,689	$	1.36	$	0.97
Contracts on forecasted sales
2024 settlements		—		—		4,299		4,519	N/A		N/A		$	1.31	$	0.97
2025 settlements		—		—		26,455		62,501	N/A		N/A			1.39	$	0.98
2026 settlements		—		—		—		33,290	N/A		N/A		N/A		$	1.04


December 31, 2023	Ounces/pounds under contract (in 000's except gold)								Average price per ounce/pound
	Silver		Gold		Zinc		Lead		Silver		Gold		Zinc		Lead
	(ounces)		(ounces)		(pounds)		(pounds)		(ounces)		(ounces)		(pounds)		(pounds)
Contracts on provisional sales
2023 settlements		735		3		441		15,542	$	24.40	$	2,045	$	1.51	$	1.00
Contracts on forecasted sales
2024 settlements		—		—		—		56,713	N/A		N/A		N/A		$	0.98
2025 settlements		—		—		—		49,273	N/A		N/A		N/A		$	0.98

We recorded the following balances for the fair value of the forward metals contracts as of September 30, 2024 and December 31, 2023 (in millions):


	September 30,			December 31,
Balance sheet line item:	2024			2023
Other current assets	$	—		$	3.1
Other non-current assets	$	0.9		$	1.5
Other current liabilities	$	(2.6	)	$	(0.1	)
Other non-current liabilities	$	—		$	—

Net realized and unrealized gains of $5.6 million related to the effective portion of the forward metals contracts designated as hedges were included in accumulated other comprehensive income (loss) as of September 30, 2024. Unrealized gains and losses will be transferred from accumulated other comprehensive income (loss) to current earnings as the underlying forecasted sales are recognized. We estimate $4.5 million in net realized and unrealized gains included in accumulated other comprehensive income (loss) as of September 30, 2024 would be reclassified to current earnings in the next twelve months. The realized gains arose due to cash settlement of zinc contracts prior to maturity in 2022 and zinc and lead contracts during 2023 for net proceeds of $17.4 million and $8.5 million, respectively.

We recognized a net gain of $0.6 million, including a $2.1 million gain transferred from accumulated other comprehensive income (loss), and a net gain of $4.0 million, including a $6.7 million gain transferred from accumulated other comprehensive income (loss) during the three months ended September 30, 2024 and 2023, respectively. We recognized a net loss of $8.8 million, including a $7.1 million gain transferred from accumulated other comprehensive income (loss), and a net gain of $13.1 million, including a $13.0 million gain transferred from accumulated other comprehensive income (loss) during the nine months ended September 30, 2024 and 2023, respectively. These gains and losses were recognized on the contracts utilized to manage exposure to prices of metals in our concentrate shipments, which are included in sales. The net losses and gains recognized on the contracts offset gains and losses related to price adjustments on our provisional concentrate sales due to changes to silver, gold, lead and zinc prices between the time of sale and final settlement.

During June 2024, the Company purchased 26,900 ounces of gold put options priced at $2,100 per ounce, which are not designated as hedges, to provide price protection for Casa Berardi's underground production for the remainder of 2024 at a total cost of $0.1 million. At September 30, 2024, the fair value of these gold put options was negative $0.1 million.

Credit-risk-related Contingent Features

Certain of our derivative contracts contain cross default provisions which provide that a default under our Credit Agreement would cause a default under the derivative contract. As of September 30, 2024, we have not posted any collateral related to these contracts. The fair value of derivatives in a net liability position related to these agreements was $5.8 million as of September 30, 2024, which includes accrued interest but excludes any adjustment for nonperformance risk. If we were in breach of any of these provisions at September 30, 2024, we could have been required to settle our obligations under the agreements at their termination value of $5.8 million.

Note 9. Fair Value Measurement

Fair value adjustments, net is comprised of the following (in thousands):


	Three Months Ended September 30,					Nine Months Ended September 30,
	2024		2023			2024			2023
Gain (loss) on derivative contracts	$	394	$	(2,160	)	$	(2,091	)	$	1,848
Unrealized gain (loss) on equity securities investments		3,260		(4,237	)		8,895			(7,622	)
Total fair value adjustments, net	$	3,654	$	(6,397	)	$	6,804		$	(5,774	)

Accounting guidance has established a hierarchy for inputs used to measure assets and liabilities at fair value on a recurring basis. The three levels included in the hierarchy are:

Level 1: quoted prices in active markets for identical assets or liabilities;

Level 2: significant other observable inputs; and

Level 3: significant unobservable inputs.

The table below sets forth our assets and liabilities that were accounted for at fair value on a recurring basis and the fair value calculation input hierarchy level that we have determined applies to each asset and liability category (in thousands).


Description	Balance at September 30, 2024		Balance at December 31, 2023		Input Hierarchy Level
Assets:
Cash and cash equivalents:
Money market funds and other bank deposits	$	22,273	$	106,374	Level 1
Current and non-current investments:
Equity securities		40,915		32,284	Level 1
Trade accounts receivable:
Receivables from provisional concentrate sales		40,124		17,940	Level 2
Restricted cash and cash equivalent balances:
Certificates of deposit and other deposits		1,184		1,165	Level 1
Derivative contracts - current and non-current derivative assets:
Foreign exchange contracts		805		4,657	Level 2
Metal forward contracts		886		4,698	Level 2

Liabilities:
Derivative contracts - current and non-current derivative liabilities:
Foreign exchange contracts	$	2,010	$	1,508	Level 2
Metal forward contracts		2,625		40	Level 2

Cash and cash equivalents consist primarily of money market funds and are valued at cost, which approximates fair value.

Current and non-current restricted cash and cash equivalent balances consist primarily of certificates of deposit, U.S. Treasury securities, and other deposits and are valued at cost, which approximates fair value.

Our non-current investments consist of marketable equity securities of companies in the mining industry which are valued using quoted market prices for each security.

Trade accounts receivable from provisional concentrate sales are subject to final pricing and valued using quoted prices based on forward curves for the particular metals.

We use financially-settled forward contracts to manage exposure to changes in the exchange rate between USD and CAD, and the impact on CAD-denominated operating and capital costs incurred at our Casa Berardi and Keno Hill operations (see Note 8 for more information). The fair value of each contract represents the present value of the difference between the forward exchange rate for the contract settlement period as of the measurement date and the contract settlement exchange rate.

We use financially-settled forward contracts to manage the exposure to changes in prices of silver, gold, zinc and lead contained in our concentrate shipments that have not reached final settlement. We also use financially-settled forward contracts to manage the exposure to changes in prices of gold, zinc and lead contained in our forecasted future sales (see Note 8 for more information). The fair value of each forward contract represents the present value of the difference between the forward metal price for the contract settlement period as of the measurement date and the contract settlement metal price.

At September 30, 2024, our Senior Notes and IQ Notes were recorded at their carrying value of $472.0 million and $35.9 million, respectively, net of unamortized initial purchaser discount/premium and issuance costs. The estimated fair values of our Senior Notes and IQ Notes were $484.7 million and $37.2 million, respectively, at September 30, 2024. Quoted market prices, which are considered to be Level 1 inputs, are utilized to estimate fair values of the Senior Notes. Unobservable inputs which are considered to be Level 3, including an assumed current annual yield of 6.12%, are utilized to estimate the fair value of the IQ Notes. See Note 7 for more information. The Credit Agreement, which we consider to be Level 1 in the fair value hierarchy, has a carrying and fair value of $13.0 million.

Note 10. Product Inventories

Our major components of product inventories are (in thousands):


	September 30, 2024		December 31, 2023
Concentrates	$	14,544	$	13,328
Stockpiled ore		13,481		7,168
In-process		6,782		8,327
Total product inventories	$	34,807	$	28,823

Note 11. Commitments, Contingencies and Obligations

Johnny M Mine Area near San Mateo, McKinley County and San Mateo Creek Basin, New Mexico

Effective on August 26, 2024, Hecla Limited, its New Mexico Land LLC subsidiary and the U.S. Environmental Protection Agency (the “EPA”) are parties to a Settlement Agreement and Order on Consent for Removal Action (“Consent Order”) resolving certain liabilities of Hecla Limited under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) at the Johnny M Mine Area near San Mateo, McKinley County, New Mexico. Mining at the Johnny M Mine was conducted for a limited period of time by a predecessor of Hecla Limited, and the EPA had previously asserted that Hecla Limited may be responsible under CERCLA for environmental remediation and past costs incurred by the EPA at the site. Under the Consent Order, Hecla Limited agreed to pay $420,000 to the EPA for its past response costs at the site and any future response costs at the site under the Consent Order, and undertake remediation work at the site (the “Remedy”), in exchange for a covenant not to sue by the EPA and protection for certain claims of contribution under CERCLA by third parties related to the site. We have accrued $10.1 million in prior periods, primarily representing estimated current costs to design and implement the Remedy, which are subject to change as fieldwork is performed.

The Johnny M Mine is in an area known as the San Mateo Creek Basin (“SMCB”), which is an approximately 321 square mile area in New Mexico that contains numerous legacy uranium mines and mills. In addition to Johnny M, Hecla Limited’s predecessor was involved at other mining sites within the SMCB. The EPA is working with various potentially responsible parties (“PRPs”) at the site in order to study and potentially address perceived groundwater issues within the SMCB. The Remedy discussed above relates primarily to contaminated rock and soil at the Johnny M site, not groundwater and not elsewhere within the SMCB site. It is possible that Hecla Limited’s liability at the Johnny M Site, and for any other mine site within the SMCB at which Hecla Limited’s predecessor may have operated, will be greater than our current accrual of $10.1 million for the Remedy due to any increased scope of required remediation.

In July 2018, the EPA informed Hecla Limited that it and several other PRPs may be liable for cleanup of the SMCB site or for costs incurred by the EPA in cleaning up the site. The EPA stated it has incurred approximately $9.6 million in response costs to date. In each of May, 2022, and August, 2024, Hecla Limited received a letter from a PRP notifying Hecla Limited that other PRPs may seek cost recovery and contribution from Hecla Limited under CERCLA for certain investigatory work performed by the PRPs at the SMCB site. Hecla Limited cannot with reasonable certainty estimate the amount or range of liability, if any, relating to this matter because of, among other reasons, the lack of information concerning the site, including the relative contributions of contamination by the various PRPs.

Carpenter Snow Creek and Barker-Hughesville Sites in Montana

In July 2010, the EPA made a formal request to Hecla for information regarding the Carpenter Snow Creek Superfund site located in Cascade County, Montana. The Carpenter Snow Creek site is located in a historical mining district, and in the early 1980s Hecla Limited leased 6 mining claims and performed limited exploration activities at the site. Hecla Limited terminated the mining lease in 1988.

In June 2011, the EPA informed Hecla Limited that it believes Hecla Limited, and several other PRPs, may be liable for cleanup of the site or for costs incurred by the EPA in cleaning up the site. The EPA stated in the letter that it has incurred approximately $4.5 million in response costs and estimated that total remediation costs may exceed $100 million. Hecla Limited cannot with reasonable certainty estimate the amount or range of liability, if any, relating to this matter because of, among other reasons, the lack of information concerning the site, including the relative contributions of contamination by various other PRPs.

In February 2017, the EPA made a formal request to Hecla for information regarding the Barker-Hughesville Mining District Superfund site located in Judith Basin and Cascade Counties, Montana. Hecla Limited submitted a response in April 2017. The Barker-Hughesville site is located in a historic mining district, and between approximately June and December 1983, Hecla Limited was party to an agreement with another mining company under which limited exploration activities occurred at or near the site.

In August 2018, the EPA informed Hecla Limited that it and several other PRPs may be liable for cleanup of the site or for costs incurred by the EPA in cleaning up the site. The EPA did not include an amount of its alleged response costs to date. Hecla Limited

cannot with reasonable certainty estimate the amount or range of liability, if any, relating to this matter because of, among other reasons, the lack of information concerning past or anticipated future costs at the site and the relative contributions of contamination by various other PRPs.

Lucky Friday and Keno Hill Environmental Issues

Effective on October 16, 2024, Hecla Limited and the EPA are parties to a Consent Agreement and Final Order (the “Settlement”) resolving certain liabilities of Hecla Limited under the Clean Water Act involving the Lucky Friday mine’s permitted water discharges between 2018 and 2024. Under the Settlement, Hecla Limited will pay the EPA $174,300 and undertake a Supplemental Environmental Project involving river habitat restoration on the South Fork of the Coeur d’Alene River estimated to cost $299,000.

Litigation Related to Klondex Acquisition

On May 24, 2019, a purported Hecla stockholder filed a putative class action lawsuit in the U.S. District Court for the Southern District of New York against Hecla and certain of our executive officers, one of whom was also a director. The complaint, purportedly brought on behalf of all purchasers of Hecla common stock from March 19, 2018 through and including May 8, 2019, asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder and seeks, among other things, damages and costs and expenses. Specifically, the complaint alleges that Hecla, under the authority and control of the individual defendants, made certain material false and misleading statements and omitted certain material information regarding Hecla’s Nevada Operations. The complaint was dismissed by the Federal District Court with prejudice on September 30, 2024. On October 28, 2024, the plaintiffs filed a notice of appeal with the United States Court of Appeals for the Second Circuit.

Related to this class action lawsuit, Hecla has been named as a nominal defendant in a shareholder derivative lawsuit which also names as defendants certain current and past members of Hecla’s Board of Directors and certain past officers of Hecla. The case was filed on May 4, 2022 in the Delaware Chancery Court. In general terms, the suit alleges breaches of fiduciary duties by the individual defendants, waste of corporate assets and unjust enrichment, and seeks damages, purportedly on behalf of Hecla.

Debt

See Note 7 for information on the commitments related to our debt arrangements as of September 30, 2024.

Indirect Taxes

In May 2024, our Keno Hill subsidiary received a notice of assessment ("NOA") for goods and services tax ("GST") on its 2023 sales for CAD $1,973,181 from the Canada Revenue Agency ("CRA"). In addition, in May 2024 Keno Hill also received correspondence from the CRA for GST on Keno Hill's sales and input tax credits from 2020 through 2022 of CAD$1,038,834. As Keno Hill's sales are to a non-Canadian party, we do not believe Keno Hill is subject to collect and remit GST, and we have disputed the NOA and proposed audit adjustments.

Other Commitments

Our contractual obligations as of September 30, 2024 included open purchase orders and commitments of $9.8 million, $18.8 million, $13.1 million, $13.5 million and $0.8 million for various capital and non-capital items at Greens Creek, Lucky Friday, Keno Hill, Casa Berardi and Other, respectively. We also have total commitments of $21.2 million relating to scheduled payments on finance leases, including interest, primarily for equipment at our operations, and total commitments of $11.7 million relating to payments on operating leases (see Note 7 for more information). As part of our ongoing business and operations, we are required to provide surety bonds, bank letters of credit, and restricted deposits for various purposes, including financial support for environmental reclamation obligations and workers compensation programs. As of September 30, 2024, we had surety bonds totaling $215.4 million and letters of credit totaling $6.3 million in place as financial support for future reclamation and closure costs, self-insurance, and employee benefit plans. The obligations associated with these instruments are generally related to performance requirements that we address through ongoing operations. As the requirements are met, the beneficiary of the associated instruments cancels or returns the instrument to the issuing entity. Certain of these instruments are associated with operating sites with long-lived assets and will remain outstanding until closure of the sites. We believe we are in compliance with all applicable bonding requirements and will be able to satisfy future bonding requirements as they arise.

Other Contingencies

We also have certain other contingencies resulting from litigation, claims, EPA investigations, and other commitments and are subject to a variety of environmental and safety laws and regulations incident to the ordinary course of business. We currently have no basis to conclude that any or all of such contingencies will materially affect our financial position, results of operations or cash flows. However, in the future, there may be changes to these contingencies, or additional contingencies may occur, any of which might result in an accrual or a change in current accruals recorded by us, and there can be no assurance that their ultimate disposition will not have a material adverse effect on our financial position, results of operations or cash flows.

Note 12. Recent Accounting Pronouncements

Accounting Standards Updates to Become Effective in Future Periods

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, amending reportable segment disclosure requirements to include disclosure of incremental segment information on an annual and interim basis. Among the requirements are new disclosures regarding significant segment expenses that are regularly provided to the chief operating decision-maker and included within each reported measure of segment profit or loss, as well as other segment items bridging segment revenue to each reported measure of segment profit or loss. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, and are applied retrospectively. Early adoption is permitted. We will retrospectively adopt the segment disclosures required under these amendments in the year ended December 31, 2024, financial statements and don't expect any changes to our current reportable segments.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures, amending income tax disclosure requirements for the effective tax rate reconciliation and income taxes paid. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024 and are applied prospectively. Early adoption and retrospective application of the amendments are permitted. We are currently evaluating the impact of this update on our consolidated financial statements and disclosures.

Forward-Looking Statements

Certain statements contained in this Form 10-Q, including in Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures About Market Risk, are intended to be covered by the safe harbor provided for under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Our forward-looking statements include our current expectations and projections about future results, performance, results of litigation, prospects and opportunities, including reserves and other mineralization. We have tried to identify these forward-looking statements by using words such as “may,” “will,” “expect,” “anticipate,” “believe,” “intend,” “feel,” “plan,” “estimate,” “project,” “forecast” and similar expressions. These forward-looking statements are based on information currently available to us and are expressed in good faith and believed to have a reasonable basis. However, our forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements.

These risks, uncertainties and other factors include, but are not limited to, those set forth under Part I, Item 1A. – Risk Factors in our 2023 Form 10-K and Part II, Item 1A - Risk Factors in our Form 10-Q for the quarterly period ended June 30, 2024. Given these risks and uncertainties, readers are cautioned not to place undue reliance on our forward-looking statements. All subsequent written and oral forward-looking statements attributable to Hecla Mining Company or to persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Except as required by federal securities laws, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

In this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), “Hecla,” “the Company,” “we,” “us” and “our” refer to Hecla Mining Company and its consolidated subsidiaries, except where the context requires otherwise. You should read this discussion in conjunction with our consolidated financial statements, the related MD&A and the discussion of our Business and Properties for the year ended December 31, 2023, which were revised to conform with current year financial statement changes as described in Note 2 "Business Segments and Sales of Products", and are included in Exhibit 99.1 to the Company's Current Report on Form 8-K filed May 20, 2024, with the United States Securities and Exchange Commission (the “SEC”). The results of operations reported and summarized below are not necessarily indicative of future operating results (refer to “Forward-Looking Statements” above for further discussion). References to “Notes” are Notes included in our Notes to Condensed Consolidated Financial Statements (Unaudited). Throughout this MD&A, all references to losses or income per share are on a diluted basis.

Overview

Established in 1891, we are the oldest operating precious metals mining company in the United States. We are also the largest silver producer in the United States and Canada, producing over 45% of the U.S. silver production at our Greens Creek and Lucky Friday operations. We also produce gold at our Casa Berardi and Greens Creek operations. In addition, we are developing the Keno Hill mine in the Yukon Territory, Canada which we acquired on September 7, 2022 and began ramp-up during the second quarter of 2023. Based upon the jurisdictions in which we operate, we believe we have lower political and economic risk compared to other mining companies whose mines are located in other parts of the world. Our exploration interests are located in the United States, Canada and Mexico. Our operating and strategic framework is based on expanding our production and locating and developing new resource potential in a safe and responsible manner.

Third Quarter 2024 Highlights

Operational:

•

Produced 3.6 million ounces of silver, a 3% increase over the prior year's comparable quarter and 32,280 ounces of gold. See Consolidated Results of Operations below for information on total cost of sales, as well as cash costs and all-in sustaining costs, each after by-product credits, per silver and gold ounce for the three-month periods ended September 30, 2024 and 2023.

Financial:

•

Generated sales of $245.1 million and net income applicable to common stockholders of $1.6 million.

•

Invested in our operations by making capital expenditures of approximately $55.7 million, including $11.5 million at Greens Creek, $11.2 million at Lucky Friday, $18.6 million at Casa Berardi and $14.4 million at Keno Hill.

•

Collected $14.8 million in insurance proceeds related to the Lucky Friday fire.

•

Returned $8.6 million to our common stockholders through dividend payments.

•

Spent $10.6 million on exploration and pre-development activities.

•

Raised $57.3 million in equity sales under our ATM program which were utilized to make $49.0 million in net repayments on our outstanding revolving credit facility balance.

•

Copper became a payable metal for Greens Creek, recording $0.4 million of copper sales.

Year to date 2024 Highlights

Operational:

•

Produced 12.3 million ounces of silver, a 8% increase over the prior year's comparable period and 106,196 ounces of gold. See Consolidated Results of Operations below for information on total cost of sales, as well as cash costs and all-in sustaining costs, each after by-product credits, per silver and gold ounce for the nine-month periods ended September 30, 2024 and 2023.

•

Keno Hill produced 2.1 million ounces of silver as ramp-up of production continued with an average throughput of 314 tons per day, and stockpiled ore inventory of approximately 290,700 ounces.

Financial:

•

Generated sales of $680.3 million and net income applicable to common stockholders of $23.5 million.

•

Invested in our operations by making capital expenditures of approximately $153.7 million, including $32.0 million at Greens Creek, $37.0 million at Lucky Friday, $44.3 million at Casa Berardi and $39.3 million at Keno Hill.

•

Collected $50.0 million in insurance proceeds related to the Lucky Friday fire.

•

Returned $16.3 million to our common stockholders through dividend payments.

•

Spent $21.6 million on exploration and pre-development activities.

•

Raised $58.4 million in equity sales under our ATM program which were utilized as part of $115.0 million in net repayments on our outstanding revolving credit facility balance.

External Factors that Impact our Results

Our financial results vary as a result of fluctuations in market prices primarily for silver and gold and, to a lesser extent, zinc and lead. World market prices for these commodities have fluctuated historically and are affected by numerous factors beyond our control. We believe that the outlook for precious metals fundamentals in the medium- and long-term is favorable due to macro-economic factors such as lower interest rate expectations, geopolitical uncertainty and global growth expectations, which have resulted in significant volatility in the financial and commodities markets, including the precious metals market. See Item 1A. “Risk Factors” contained in Part I of our annual report on Form 10-K for the year ended December 31, 2023 ("2023 Form 10-K"), for further discussion. Because we cannot control the price of our products, the key measures that management focuses on in operating our business are production volumes, payable sales volumes, Cash Cost, After By-product Credits, per Ounce (non-GAAP) and All-In Sustaining Cost, After By-product Credits, per Ounce (“AISC”) (non-GAAP), operating cash flows, capital expenditures, free cash flow and adjusted EBITDA. The average realized prices for all metals sold by us continued to exhibit significant volatility during the period. We have also experienced significant cost inflation across our operations, principally associated with higher energy prices, increased costs for other consumables such as reagents, explosives and steel, and higher labor and contractor costs.

Consolidated Results of Operations

Total sales for the three and nine months ended September 30, 2024 and 2023 were as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2024			2023			2024			2023
Silver	$	109,756		$	74,425		$	308,681		$	235,447
Gold		79,239			70,206			229,123			208,216
Lead		21,591			15,719			65,002			62,778
Zinc		37,281			33,066			94,741			91,912
Copper		409			-			409			-
Less: Smelter and refining charges		(10,518	)		(12,550	)		(32,814	)		(40,743	)
Total metal sales		237,758			180,866			665,142			557,610
Environmental remediation services		7,327			1,040			15,128			1,927
Total sales	$	245,085		$	181,906		$	680,270		$	559,537

Environmental remediation services revenue is generated by performing remediation work in the historical Yukon Territory mining district on behalf of the Canadian government. The scope and estimated cost of all work is agreed to in advance by the Canadian government, and the expenses incurred are essentially passed through to the government for reimbursement with minimal margin generated by our subsidiary in performing this work.

Total metal sales for the three and nine months ended September 30, 2024 and 2023, and the approximate variances attributed to differences in metals prices, sales volumes and smelter terms, were as follows:


(in thousands)	Silver		Gold			Base metals			Less: smelter and refining charges			Total sales of products
Three months ended September 30, 2023	$	74,425	$	70,206		$	48,785		$	(12,550	)	$	180,866
Variances - 2024 versus 2023:
Price		20,400		19,693			(5,238	)		—			34,855
Volume		14,931		(10,660	)		15,734			(2,481	)		17,524
Smelter terms		—		—			—			4,513			4,513
Three months ended September 30, 2024	$	109,756	$	79,239		$	59,281		$	(10,518	)	$	237,758


(in thousands)	Silver		Gold			Base metals			Less: smelter and refining charges			Total sales of products
Nine months ended September 30, 2023	$	235,447	$	208,216		$	154,690		$	(40,743	)	$	557,610
Variances - 2024 versus 2023:
Price		52,513		39,147			(2,674	)		—			88,986
Volume		20,721		(18,240	)		8,136			(1,104	)		9,513
Smelter terms		—		—			—			9,033			9,033
Nine months ended September 30, 2024	$	308,681	$	229,123		$	160,152		$	(32,814	)	$	665,142

The fluctuations in sales for the three and nine months ended September 30, 2024 compared to the same periods in 2023 were primarily due to the following two reasons:

•

Higher average realized prices for precious metals and lower realized base metals prices during the three and nine months ended September 30, 2024, compared to the same periods in 2023. The table below summarizes average spot prices and our average realized prices for the commodities we sell:


		Three Months Ended September 30,				Nine Months Ended September 30,
		2024		2023		2024		2023
Silver –	London PM Fix ($/ounce)	$	29.43	$	23.57	$	27.21	$	23.44
	Realized price per ounce	$	29.43	$	23.71	$	28.07	$	23.28
Gold –	London PM Fix ($/ounce)	$	2,477	$	1,929	$	2,296	$	1,932
	Realized price per ounce	$	2,522	$	1,908	$	2,317	$	1,921
Lead –	LME Final Cash Buyer ($/pound)	$	0.93	$	0.99	$	0.95	$	0.97
	Realized price per pound	$	0.93	$	1.07	$	0.99	$	1.02
Zinc –	LME Final Cash Buyer ($/pound)	$	1.26	$	1.10	$	1.22	$	1.22
	Realized price per pound	$	1.36	$	1.52	$	1.32	$	1.34
Copper –	LME Final Cash Buyer ($/pound)	$	4.18	$	—	$	4.14	$	—
	Realized price per pound	$	4.20	$	—	$	4.20	$	—

Average realized prices typically differ from average market prices primarily because concentrate sales are generally recorded as revenues at the time of shipment at forward prices for the estimated month of settlement, which differ from average market prices. Due to the time elapsed between shipment of concentrates and final settlement with the customers, we must estimate the prices at which sales of our metals will be settled. Previously recorded sales are adjusted to estimated settlement metals prices each period through final settlement. We recorded net positive price adjustments to provisional settlements of $5.0 million and $19.5 million for the three and nine months ended September 30, 2024, respectively, and $8.1 million and $12.3 million for the three and nine months ended September 30, 2023, respectively. The price adjustments related to silver, gold, zinc and lead contained in our concentrate shipments were partially offset by gains and losses on forward contracts for those metals. See Note 8 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information. The gains and losses on these contracts are included in revenues and impact the realized prices for silver, gold, lead and zinc. Realized prices are calculated by dividing gross revenues for each metal (which include the price adjustments and gains and losses on the forward contracts discussed above) by the payable quantities of each metal included in concentrate, doré and carbon material shipped during the period.

•

Higher quantities of silver sold during the three and nine months ended September 30, 2024, compared to the same periods in 2023, primarily due to a full third quarter of Lucky Friday sales in 2024 compared to 2023 when production was suspended in August 2023 following a fire in the secondary egress that suspended operations for the remainder of 2023. See The Greens Creek Segment, The Lucky Friday Segment, The Keno Hill Segment, and Casa Berardi Segment sections below for more information on metal production and sales volumes at each of our operating segments. Total metals production and sales volumes for each period are shown in the following table:


		Three Months Ended September 30,				Nine Months Ended September 30,
		2024		2023		2024		2023
Silver -	Ounces produced		3,645,004		3,533,704		12,295,586		11,407,232
	Payable ounces sold		3,729,782		3,142,227		10,996,951		10,107,415
Gold -	Ounces produced		32,280		39,269		106,196		114,091
	Payable ounces sold		31,414		36,792		98,879		108,372
Lead -	Tons produced		12,497		8,024		38,183		34,583
	Payable tons sold		11,563		7,440		32,922		30,848
Zinc -	Tons produced		16,605		14,636		49,007		47,715
	Payable tons sold		13,686		10,993		35,788		34,326
Copper	Tons produced		490		457		1,447		1,374
	Payable tons sold		49		—		49		—

The difference between what we report as “ounces/tons produced” and “payable ounces/tons sold” is attributable to the difference between the quantities of metals contained in the concentrates we produce versus the portion of those metals actually paid for by our customers according to the terms of our sales contracts. Differences can also arise from inventory

changes incidental to shipping schedules, or variances in ore grades which impact the amount of metals contained in concentrates produced and sold.

Sales, total cost of sales, gross profit (loss), Cash Cost, After By-product Credits, per Ounce (“Cash Cost”) (non-GAAP) and AISC (non-GAAP) at our operating units for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands, except for Cash Cost and AISC):


	Silver				Gold and Other
	Greens Creek	Lucky Friday	Keno Hill	Total Silver (2)	Casa Berardi	Other (3)	Total Gold and Other
Three Months Ended September 30, 2024:
Sales	$116,568	$51,072	$19,809	$187,449	$50,308	$7,328	$57,636
Total cost of sales	(73,597)	(39,286)	(19,809)	(132,692)	(46,280)	$(6,827)	(53,107)
Gross profit	$42,971	$11,786	$—	$54,757	$4,028	$501	$4,529
Cash Cost (1)	$0.93	$9.98	$—	$4.46	$1,754	$—	$1,754
AISC (1)	$7.04	$19.40	$—	$15.29	$2,059	$—	$2,059
Three Months Ended September 30, 2023:
Sales	$96,459	$21,409	$16,001	$133,869	$46,912	$1,125	$48,037
Total cost of sales	(60,322)	(14,344)	(16,001)	(90,667)	(56,822)	(940)	(57,762)
Gross profit (loss)	$36,137	$7,065	$—	$43,202	$(9,910)	$185	$(9,725)
Cash Cost (1)	$3.04	$4.74	$—	$3.31	$1,475	$—	$1,475
AISC (1)	$8.18	$10.63	$—	$11.39	$1,695	$—	$1,695


	Silver				Gold
	Greens Creek	Lucky Friday	Keno Hill	Total Silver (2)	Casa Berardi	Other (3)	Total Gold
Nine Months Ended September 30, 2024
Sales	$309,537	$145,483	$59,606	$514,626	$150,515	$15,129	$165,644
Total cost of sales	(200,240)	(104,328)	(59,606)	(364,174)	(171,880)	(14,340)	(186,220)
Gross profit (loss)	$109,297	$41,155	$—	$150,452	$(21,365)	$789	$(20,576)
Cash Cost (1)	$1.62	$7.86	$—	$3.71	$1,707	$—	$1,707
AISC (1)	$6.53	$16.26	$—	$13.57	$1,923	$—	$1,923
Nine Months Ended September 30, 2023
Sales	$290,961	$113,167	$17,582	$421,710	$134,856	$2,971	137,827
Total cost of sales	(189,664)	(81,068)	(17,582)	(288,314)	(162,396)	(2,743)	(165,139)
Gross profit (loss)	$101,297	$32,099	$—	$133,396	$(27,540)	$228	$(27,312)
Cash Cost (1)	$1.81	$5.51	$—	$2.86	$1,635	$—	$1,635
AISC (1)	$5.67	$12.21	$—	$10.52	$2,075	$—	$2,075

(1)

A reconciliation of these non-GAAP measures to total cost of sales, the most comparable GAAP measure, can be found below in Reconciliation of Total Cost of Sales (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP).

(2)

The calculation of AISC for our consolidated silver properties includes corporate costs for general and administrative expense and sustaining capital.

(3)

For the three and nine months ended September 30, 2024, Other includes sales of $7.3 million and $15.1 million, respectively, and total cost of sales of $6.8 million and $14.3 million, for the three and nine months ended September 30, 2024, respectively, from our environmental remediation services in the Yukon. For the three and nine months ended September 30, 2023, Other includes sales of $1.1 million and $3.0 million for the three and nine months ended September 30, 2023, respectively, and cost of sales of $0.9 million and $2.7 million, respectively, for the three and nine months ended September 30, 2023, related to our environmental remediation services business and Nevada operations.

While revenue from zinc, lead and gold by-products is significant, we believe that identification of silver as the primary product of Greens Creek, Lucky Friday and Keno Hill is appropriate because:

•

silver has historically accounted for a higher proportion of revenue than any other metal and is expected to do so in the future;

•

we have historically presented the Greens Creek and Lucky Friday units as primary silver producers, based on the original analysis that justified putting the project into production, and the same analysis applies to the Keno Hill unit. Further we believe

that consistency in disclosure is important to our investors regardless of the relationships of metals prices and production from year to year;

•

metallurgical treatment maximizes silver recovery;

•

the Greens Creek, Lucky Friday and Keno Hill deposits are massive sulfide deposits containing an unusually high proportion of silver; and

•

in most of their working areas, Greens Creek, Lucky Friday and Keno Hill utilize selective mining methods in which silver is the metal targeted for highest recovery.

Accordingly, we believe the identification of gold, lead, zinc and copper as by-product credits at Greens Creek, Lucky Friday and Keno Hill is appropriate because of their lower economic value compared to silver and due to the fact that silver is the primary product we intend to produce at those locations. In addition, we have not consistently received sufficient revenue from any single by-product metal to warrant classification of such as a co-product.

We periodically review our revenues to ensure that reporting of primary products and by-products is appropriate. Because for Greens Creek, Lucky Friday and Keno Hill we consider zinc, lead, gold and copper to be by-products of our silver production, the values of these metals offset operating costs within our calculations of Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce. We currently do not report Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for our Keno Hill operation as it is in the production ramp-up phase and has not met our definition of commercial production, and accordingly it is excluded from our consolidated Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce. We define an operation as being in commercial production upon achievement of the following criteria:

•

Completion of operational commissioning of each major mine and mill component;

•

Demonstrated ability to mine and mill consistently and without significant interruption, defined as 75% of historical production levels or mill design capacity over a period of 30 days;

•

Silver recoveries are at or near expected steady-state production levels;

•

All major capital expenditures have been completed; and

•

A significant portion of available funding is directed towards operating activities.

Determination of when these criteria have been met requires the use of judgment, and our definition of commercial production may differ from that of other mining companies.

We believe the identification of silver as a by-product credit is appropriate at Casa Berardi because of its lower economic value compared to gold and due to the fact that gold is the primary product we intend to produce there. In addition, we do not receive sufficient revenue from silver at the Casa Berardi mine to warrant classification of such as a co-product. Because we consider silver to be a by-product of our gold production at Casa Berardi, the value of silver offsets operating costs within our calculations of Cash Cost, After By-product Credits, per Gold Ounce and AISC, After By-product Credits, per Gold Ounce.

We reported net income applicable to common stockholders of $1.6 million for the three months ended September 30, 2024, compared to a net loss applicable to common stockholders of $22.6 million in the comparable period in 2023. The following were the significant drivers of the change:

•

Consolidated gross profit increased by $25.8 million. See The Greens Creek Segment, The Lucky Friday Segment, The Keno Hill Segment, and The Casa Berardi Segment sections below for a discussion on the key drivers by operating unit.

•

Ramp-up and suspension costs decreased by $7.3 million as the prior period included $12.0 million of suspension costs related to the temporary suspension of operations at Lucky Friday due to the underground fire, whereas the current period primarily contained costs related to Keno Hill's ramp-up activities and increased by $4.9 million over the comparable period in 2023.

•

Other operating income, net increased by $15.4 million primarily due to $14.8 million of insurance proceeds received during the quarter related to the Lucky Friday fire.

•

Fair value adjustments, net increased by $10.1 million primarily due to $3.3 million in unrealized gains on our marketable equity securities portfolio in 2024 compared to an unrealized loss of $4.2 million in the comparable period in 2023 and an unrealized gain of $0.4 million on our undesignated derivative contracts compared to a $2.2 million unrealized loss when compared to the comparable period in 2023.

The positive movements mentioned above were partly offset by:

•

method at Lucky Friday, (ii) we had been unsuccessful in locating a buyer, and (iii) the vendor advised us during the period that it would discontinue support for the program.

•

Net foreign exchange loss increased by $7.4 million to a loss of $3.2 million, compared to a gain of $4.2 million in the comparable period, reflecting the strengthening of the Canadian dollar against the US dollar in 2024, compared to a devaluation in the comparable period in 2023 , and related impact on the revaluation of our Canadian monetary assets and liabilities.

•

Income and mining tax expense increased by $13.0 million due to higher taxable income generated by our US tax group.

We reported net income applicable to common stockholders of $23.5 million for the nine months ended September 30, 2024, compared to a net loss applicable to common stockholders of $41.7 million in the comparable period in 2023. The following were the significant drivers of the change:

•

Ramp-up and suspension costs decreased by $14.9 million as costs incurred in the prior period related to the temporary suspension of operations at Casa Berardi for 20 days resulting from certain forest lands and access road closures due to forest fires and the temporary suspension of operations at Lucky Friday due to an underground fire were not incurred in 2024.

•

Other operating income, net increased by $45.4 million primarily due to $50.0 million of insurance proceeds received during the period related to the Lucky Friday fire. Other operating income, net in the prior period included $5.9 million of insurance proceeds related to a coverage lawsuit.

•

Fair value adjustments, net increased by $12.6 million primarily due to $9.0 million of unrealized gains on our marketable equity securities portfolio in 2024 compared to an unrealized loss of $7.6 million the comparable period in 2023. This was partially offset by unrealized losses on undesignated derivative contracts of $2.1 million in 2024 compared to an unrealized gain of $1.8 million in the comparable period in 2023.

•

Net foreign exchange gain increased by $3.0 million to $3.4 million reflecting the continued strengthening of the US dollar against the Canadian dollar, and related impact on the revaluation of our Canadian monetary assets and liabilities.

The positive movements mentioned above were partly offset by:

•

A $14.5 million write down of property, plant and equipment which had no salvage value. Of this amount, $13.9 million related to the Lucky Friday remote vein miner machine for which (i) we no longer had a use following the success of the UCB mining method at Lucky Friday, (ii) we had been unsuccessful in locating a buyer, and (iii) the vendor advised us during the period that it would discontinue support for the program.

•

General and administrative expenses increased by $5.9 million, primarily related to non-recurring non-cash compensation costs associated with our former CEO's retirement in the second quarter and higher incentive compensation accruals.

•

Interest expense increased by $4.9 million as higher amounts were drawn on our revolving credit facility.

•

Income and mining tax expense increased by $15.4 million due to higher taxable income generated by our US tax group.

Greens Creek


Dollars are in thousands (except per ounce and per ton amounts)	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Sales	$	116,568		$	96,459		$	309,537		$	290,961
Cost of sales and other direct production costs		(59,649	)		(49,307	)		(160,533	)		(151,107	)
Depreciation, depletion and amortization		(13,948	)		(11,015	)		(39,707	)		(38,557	)
Total cost of sales		(73,597	)		(60,322	)		(200,240	)		(189,664	)
Gross profit	$	42,971		$	36,137		$	109,297		$	101,297
Tons of ore milled		212,863			228,978			670,797			694,610
Production:
Silver (ounces)		1,857,314			2,343,192			6,579,459			7,471,725
Gold (ounces)		11,746			15,010			40,471			46,245
Lead (tons)		4,165			4,740			13,512			14,668
Zinc (tons)		12,585			13,224			38,047			38,961
Copper (tons)		490			457			1,447			1,374
Payable metal quantities sold:
Silver (ounces)		1,921,040			1,973,606			5,588,407			6,421,060
Gold (ounces)		11,302			12,371			33,800			38,025
Lead (tons)		3,822			3,600			10,382			11,506
Zinc (tons)		10,466			9,444			27,555			27,648
Copper (tons)		49			—			49			—
Ore grades:
Silver ounces per ton		11.2			13.1			12.4			13.4
Gold ounces per ton		0.08			0.09			0.09			0.09
Lead percent		2.4	%		2.5	%		2.5	%		2.6	%
Zinc percent		6.6	%		6.5	%		6.4	%		6.3	%
Copper percent		0.3	%		0.3	%		0.3	%		0.3	%
Total production cost per ton	$	222.39		$	200.30		$	217.66		$	197.94
Cash Cost, After By-product Credits, per Silver Ounce (1)	$	0.93		$	3.04		$	1.62		$	1.81
AISC, After By-Product Credits, per Silver Ounce (1)	$	7.04		$	8.18		$	6.53		$	5.67
Capital additions	$	11,466		$	12,060		$	31,997		$	27,546

(1)

The $6.8 million increase in gross profit for the three months ended September 30, 2024, compared to the same period in 2023 was primarily due to higher realized sales prices for silver and gold, partially offset by lower metals sales volumes. Capital additions were largely consistent with the comparable period, decreasing by $0.6 million.

The $8.0 million increase in gross profit for the nine months ended September 30, 2024, compared to the same period in 2023 was primarily due to higher realized sales prices for silver and gold, partially offset by lower metals sales volumes. Capital additions increased by $4.5 million in the same period primarily due to primary ore access development.

Production during the three and nine months ended September 30, 2024, declined primarily due to a combination of unplanned semi-antogenous grinding ("SAG") mill maintenance and lower grade. Throughput for the quarter averaged 2,314 tons per day, a decline of 7% as various mill maintenance projects were completed during the quarter, including SAG liners inspection, bolts retorquing, as well as work completed during a 7-day unscheduled maintenance event, of which 5 were in September. The mill restarted during early October and we expect similar production levels in the fourth quarter as during the quarter ended September 30, 2024.

The charts below illustrate the factors contributing to Cash Cost, After By-product Credits, per Silver Ounce for Greens Creek:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Cash Cost, Before By-product Credits, per Silver Ounce	$	29.97		$	25.48		$	26.73		$	24.03
By-product credits		(29.04	)		(22.44	)		(25.11	)		(22.22	)
Cash Cost, After By-product Credits, per Silver Ounce	$	0.93		$	3.04		$	1.62		$	1.81


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
AISC, Before By-product Credits, per Silver Ounce	$	36.08		$	30.62		$	31.64		$	27.89
By-product credits		(29.04	)		(22.44	)		(25.11	)		(22.22	)
AISC, After By-product Credits, per Silver Ounce	$	7.04		$	8.18		$	6.53		$	5.67

For the three months ended September 30, 2024, the decrease in Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce was primarily due to an increase in by-product credits, benefiting from higher realized gold prices, partly offset by higher production costs and lower ounces produced.

For the nine months ended September 30, 2024, Cash Cost, After By-product Credits, per Silver Ounce was slightly lower compared to the comparable period from 2023, as higher production costs were offset by higher by-product credits on a per ounce basis, benefiting from higher realized gold prices. In addition to the factors impacting Cash Cost per Silver Ounce, AISC, After By-product Credits, per Silver Ounce was also impacted by higher sustaining capital.

Lucky Friday


Dollars are in thousands (except per ounce and per ton amounts)	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
Sales	$51,072	$21,409	$145,483	$113,167
Cost of sales and other direct production costs	(28,605)	(10,038)	(75,028)	(57,327)
Depreciation, depletion and amortization	(10,681)	(4,306)	(29,300)	(23,741)
Total cost of sales	(39,286)	(14,344)	(104,328)	(81,068)
Gross profit	$11,786	$7,065	$41,155	$32,099
Tons of ore milled	104,281	36,619	297,956	225,965
Production:
Silver (ounces)	1,184,819	475,414	3,554,039	3,024,544
Lead (tons)	7,662	2,957	22,580	19,171
Zinc (tons)	3,528	1,159	9,699	7,810
Payable metal quantities sold:
Silver (ounces)	1,100,873	534,183	3,275,614	2,974,835
Lead (tons)	7,042	3,330	20,633	18,809
Zinc (tons)	2,706	981	7,266	6,061
Ore grades:
Silver ounces per ton	12.1	13.6	12.6	14.0
Lead percent	7.9%	8.6%	8.1%	8.9%
Zinc percent	3.9%	3.5%	3.8%	4.1%
Total production cost per ton	$260.99	$191.81	$243.18	$223.44
Cash Cost, After By-product Credits, per Silver Ounce (1)	$9.98	$4.74	$7.86	$5.51
AISC, After By-product Credits, per Silver Ounce (1)	$19.40	$10.63	$16.26	$12.21
Capital additions	$11,178	$15,494	$36,984	$46,518

(1)

During August 2023, mining was suspended due to a fire which occurred while repairing an unused station in the #2 ventilation shaft, which is also the secondary egress. By early September, the fire had been extinguished, normal ventilation was reestablished and the workforce recalled. Following evaluation of alternatives, it was determined that in order to safely bring the mine back into production in the most rapid and cost-effective way, a new secondary egress needed to be developed to bypass the damaged portion of the #2 shaft. The new egress involved extending an existing ramp 1,600 feet, installing a 290-foot-long manway raise, and developing an 850-foot ventilation raise. This work resulted in operations being suspended for the remainder of 2023, with the mine restarting production on January 9, 2024, and ramping up to full production during the first quarter. The Company has property and business interruption insurance coverage with an underground sub-limit of $50.0 million, and through September 30, 2024, has received the full coverage amount of $50.0 million. The discussion of Lucky Friday's results below for the nine months ended September 30, 2024 and 2023, has been impacted by the prior suspension of operations.

Gross profit increased by $4.7 million for the three months ended September 30, 2024 compared to the same period in 2023, reflecting a combination of higher sales volumes for all metals and higher realized sales prices for silver, as the mine suspended operations in August 2023 and did not resume operations until January 9, 2024.

Gross profit increased by $9.1 million for the nine months ended September 30, 2024, compared to the same period in 2023, reflecting higher realized prices for silver, and higher sales volumes for all metals produced due to the suspension of mining operations mentioned above.

For both the three and nine month periods ended September 30, 2023, $12.0 million of site specific suspension costs were included within Ramp-up and suspension costs.

Capital additions decreased by $4.3 million for the three months ended September 30, 2024 and decreased by $9.5 million for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023. Capital expenditures decreased during 2024 as the prior period included expenditures for bolters, the installation of a service hoist and the coarse ore bunker.

The charts below illustrate the factors contributing to Cash Cost, After By-product Credits, Per Silver Ounce for Lucky Friday:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Cash Cost, Before By-product Credits, per Silver Ounce	$	27.11		$	20.20		$	24.53		$	21.45
By-product credits		(17.13	)		(15.46	)		(16.67	)		(15.94	)
Cash Cost, After By-product Credits, per Silver Ounce	$	9.98		$	4.74		$	7.86		$	5.51


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
AISC, Before By-product Credits, per Silver Ounce	$	36.53		$	26.09		$	32.93		$	28.15
By-product credits		(17.13	)		(15.46	)		(16.67	)		(15.94	)
AISC, After By-product Credits, per Silver Ounce	$	19.40		$	10.63		$	16.26		$	12.21

The increase in Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for the three months ended September 30, 2024, compared to the same period in 2023 was primarily due to higher production costs, partly offset by higher silver production in the current quarter as mining operations were suspended in August 2023. AISC, After By-product Credits, per Silver Ounce was also negatively impacted higher sustaining capital.

The increase in Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for the nine months ended September 30, 2024, compared to the same period in 2023 was primarily due to higher production costs, partly offset by higher silver production in the current year as mining operations were suspended in August 2023 and resumed on January 9, 2024.

Keno Hill


Dollars are in thousands (except per ounce and per ton amounts)	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Sales	$	19,809		$	16,001		$	59,606		$	17,582
Cost of sales and other direct production costs		(15,591	)		(14,053	)		(47,057	)		(15,373	)
Depreciation, depletion and amortization		(4,218	)		(1,948	)		(12,549	)		(2,209	)
Total cost of sales		(19,809	)		(16,001	)		(59,606	)		(17,582	)
Gross profit	$	—		$	—		$	—		$	—
Tons of ore milled		24,027			24,616			86,169			36,680
Production:
Silver (ounces)		597,293			710,012			2,144,045			894,276
Lead (tons)		670			327			2,091			744
Zinc (tons)		492			252			1,261			943
Payable metal quantities sold:
Silver (ounces)		703,951			628,571			2,115,825			694,198
Lead (tons)		699			509			1,907			533
Zinc (tons)		514			569			967			617
Ore grades:
Silver ounces per ton		25.7			33.0			25.6			28.2
Lead percent		3.0	%		2.4	%		2.6	%		2.1	%
Zinc percent		2.4	%		2.5	%		1.7	%		3.1	%
Capital additions	$	14,406		$	11,497		$	39,285		$	32,123

Since acquiring our Keno Hill operations as part of the acquisition of Alexco Resource Corp. ("Alexco") on September 7, 2022, we have focused on development activities, with initial operation of the mill beginning in the second quarter of 2023. The average throughput during the nine months ended September 30, 2024 was 314 tons per day, with silver grades milled of 25.6 ounces per ton. Since commencing production, mill throughput has generally increased as planned, leading to increased levels of production. However, we expect 2025 silver production to remain similar to 2024 as we focus on stakeholder engagement, permitting, infrastructure and capital projects, with production projected to increase again in 2026. The pause in silver production growth at Keno Hill is a direct result of the heap leach failure at Victoria Gold’s Eagle Mine in late June 2024. This failure had several immediate and ongoing impacts on our operations. The primary impact was the Company was forced to suspend milling operations at Keno Hill on August 27, 2024, due to delays in receiving an authorization to construct and a permit modification Keno Hill’s dry stack tailings storage facility (“DSTF”). The delayed authorization and permit were a result of the focus of the Yukon Government (“YG”) and the First Nation of Na-Cho Nyäk Dun (“FNNND”) on Eagle Mine incident response and not on routine permitting matters. Mill operations resumed on October 26, 2024 after receiving the authorization and modification and completing related design and construction work on the DSTF. A second impact of the Eagle Mine incident has been expression of strong positions by the FNNND on continuing and future mining activities at projects within their Traditional Territory, where Keno Hill is located, including a call to halt mining production. We are committed to responsible and sustainable mining that governments and local communities support. As such, the projected flat production levels at Keno Hill for 2025 should allow us to focus on stakeholder outreach and ensuring we have local support for increasing production levels by 2026. In 2025, the Company's environmental remediation services group is also expected to increase construction activities, adding incremental demand on Keno Hill's infrastructure and resources.

During the three months ended September 30, 2024, Keno Hill recorded sales and total cost of sales of $19.8 million related to concentrate produced and sold. The third quarter of 2024 had $10.0 million of site-specific ramp-up costs, compared to $5.1 million in the third quarter of 2023, due to the mill shutdown. During the quarter, Keno Hill recorded capital additions of $14.4 million, related to mine development, work on the DSTF and other mining equipment purchases.

During the nine months ended September 30, 2024, Keno Hill recorded sales and total cost of sales of $59.6 million related to concentrate produced and sold. The nine months ended September 30, 2024 and 2023 had $20.4 million of site-specific ramp up costs included in ramp-up and suspension costs. During the current year, Keno Hill recorded capital additions of $39.3 million, primarily related to mine development, work on the DSTF, a surface backfill plant and other mining equipment purchases.

Casa Berardi


Dollars are in thousands (except per ounce and per ton amounts)	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Sales	$	50,308		$	46,912		$	150,515		$	134,856
Cost of sales and other direct production costs		(34,183	)		(37,842	)		(109,822	)		(119,108	)
Depreciation, depletion and amortization		(12,097	)		(18,980	)		(62,058	)		(43,288	)
Total cost of sales		(46,280	)		(56,822	)		(171,880	)		(162,396	)
Gross profit (loss)	$	4,028		$	(9,910	)	$	(21,365	)	$	(27,540	)
Tons of ore milled		369,599			343,619			1,118,204			1,091,477
Production:
Gold (ounces)		20,534			24,259			65,725			67,846
Silver (ounces)		5,578			5,084			18,043			16,685
Payable metal quantities sold:
Gold (ounces)		20,112			24,423			65,079			69,804
Silver (ounces)		3,918			5,864			17,105			17,209
Ore grades:
Gold ounces per ton		0.06			0.08			0.07			0.07
Silver ounces per ton		0.02			0.02			0.02			0.02
Total production cost per ton	$	97.82		$	103.75		$	100.67		$	103.63
Cash Cost, After By-product Credits, per Gold Ounce (1)	$	1,754		$	1,475		$	1,707		$	1,635
AISC, After By-product Credits, per Gold Ounce (1)	$	2,059		$	1,695		$	1,923		$	2,075
Capital additions	$	18,606		$	16,225		$	44,298		$	54,127

(1)

As part of the transition of the Casa Berardi mine from a combined underground and open pit operation to an open pit only operation, the lower margin east mine underground operations were closed in July 2023 and, along with mining the 160 open pit, only the higher margin stopes of the west underground mine will be mined until they are exhausted, which is expected to occur in mid-2025, at which time most underground activity is expected to cease. Following the halt to underground mining, Casa Berardi is expected to only produce gold from the 160 open pit, and at lower volumes than historic production levels with production expected to conclude in 2027. We forecast a gap in production commencing in 2027 and lasting until 2032 or later, when no ore is expected to be mined and no revenue is expected. During this hiatus, our focus is expected to be on investing in infrastructure and equipment, permitting and de-watering and stripping two expected new open pits, Principal and West Mine Crown Pillar. Upon conclusion of the hiatus and related permitting and construction, the mine is expected to generate significant free cash flow at current gold prices.

Gross profit increased by $13.9 million to $4.0 million for the three months ended September 30, 2024, compared to a gross loss of $9.9 million in the same period in 2023. The increase in gross profit is primarily related to higher realized prices, partly offset by lower gold ounces sold, and lower depreciation costs in the current quarter due to the west underground mine being fully depreciated during the first half of the year. Capital additions increased by $2.4 million during the quarter, compared to the same period in 2023, primarily related to a tailings dam raise.

Gross loss decreased by $6.2 million to $21.4 million for the nine months ended September 30, 2024, compared to a gross loss of $27.5 million in the same period in 2023. The decrease in gross loss primarily relates to an increase in realized gold prices, partly offset by lower gold ounces sold and a $9.3 million reduction in production costs due to the closure of the east mine in July 2023. These

items were partly offset by a $18.8 million increase in depreciation expense, reflecting the west underground mine being fully depreciated during the first half of the year, in line with the initial expectation of underground mining ceasing in the first half of 2024 and $6.3 million in product inventory net realizable value write downs attributable to higher depreciation. Capital additions decreased by $9.8 million during the nine months ended September 30, 2024, compared to the same period in 2023, primarily related to the cessation of capitalization of underground development. The majority of capital additions for the current year are related to a tailings dam raise.

Although Casa Berardi generated gross profit during the third quarter of 2024, it has generated gross losses during the previous eight quarters. This lack of profitability, the expected hiatus in future production discussed above, and the uncertainty surrounding permitting and timing of construction of the new open pits, has caused us to undertake a review of how Casa Berardi fits into the Company’s future strategy. While it is possible we may continue down the path towards future production at the Principal and West Mine Crown Pillar pits, we are also examining potential strategic alternatives.

The charts below illustrate the factors contributing to Cash Cost, After By-product Credits, Per Gold Ounce for Casa Berardi:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Cash Cost, Before By-product Credits, per Gold Ounce	$	1,762		$	1,480		$	1,714		$	1,641
By-product credits		(8	)		(5	)		(7	)		(6	)
Cash Cost, After By-product Credits, per Gold Ounce	$	1,754		$	1,475		$	1,707		$	1,635


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
AISC, Before By-product Credits, per Gold Ounce	$	2,067		$	1,700		$	1,930		$	2,081
By-product credits		(8	)		(5	)		(7	)		(6	)
AISC, After By-product Credits, per Gold Ounce	$	2,059		$	1,695		$	1,923		$	2,075

The increase in Cash Cost After By-product Credits, per Gold Ounce, for the three months ended September 30, 2024, compared to the same period in 2023 was primarily due to lower gold production and higher production costs. Higher AISC, After By-product Credits, per Gold Ounce reflected lower gold production and higher sustaining capital over the comparable period in 2023.

The increase in Cash Cost After By-product Credits, per Gold Ounce, for the nine months ended September 30, 2024 was primarily related to lower gold production, partly offset by lower production costs from the cessation of underground mining of the east mine during July 2023. Sustaining capital decreased for the nine months ended September 30, 2024, reflecting no underground development and the prior period containing machinery and equipment expenditures related to surface operations positively impacted AISC, After By-product Credits, per Gold Ounce.

Corporate Matters

Income Taxes

During the three and nine months ended September 30, 2024, an income and mining tax provision of $11.5 million and $22.3 million, respectively, resulted in an effective tax rate of 86.7% and 48.3%, respectively. This compares to an income and mining tax benefit of $1.5 million and an income and mining tax provision of $6.9 million which resulted in an effective tax rate of 6.3% and -20.1%, for the three and nine months ended September 30, 2023, respectively. The comparability of our income and mining tax provision and effective tax rate for the reported periods was impacted by multiple factors, primarily: (i) mining taxes; (ii) variations in our income before income taxes; (iii) geographic distribution of that income; (iv) foreign exchange rates including non-recognition of foreign exchange gains and losses; (v) percentage depletion; and (vi) the non-recognition of tax assets. The effective tax rate will fluctuate, sometimes significantly, period to period. The change in the effective tax rate during the three and nine months ended September 30, 2024, compared to the comparable periods in 2023 is primarily related to the reported consolidated income (loss) as well as the losses incurred at our consolidated Alexco subsidiaries, and our Nevada subsidiaries, for which no tax benefit is recognized due to uncertainty surrounding our ability to utilize these future tax benefits.

Each reporting period we assess our deferred tax balances based on a review of long-range forecasts and quarterly activity. A valuation allowance is provided for deferred tax assets for which it is more likely than not the related tax benefits will not be realized. We analyze our deferred tax assets and, if it is determined that we will not realize all or a portion of our deferred tax assets, we record or increase a valuation allowance. Conversely, if it is determined we will ultimately more likely than not be able to realize all or a portion of the related benefits for which a valuation allowance has been provided, all or a portion of the related valuation allowance will be reduced. There are a number of factors that impact our ability to realize our deferred tax assets. Valuation allowances are provided on deferred tax assets in Nevada, Mexico, and certain Canadian jurisdictions. For additional information, please see risk factors Our accounting and other estimates may be imprecise and Our ability to recognize the benefits of deferred tax assets related to net operating loss carryforwards and other items is dependent on future cash flows and taxable income in Item 1A - Risk Factors in our 2023 Form 10-K.

Reconciliation of Total Cost of Sales to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP)

The tables below present reconciliations between the most comparable GAAP measure of total cost of sales to the non-GAAP measures of (i) Cash Cost, Before By-product Credits, (ii) Cash Cost, After By-product Credits, (iii) AISC, Before By-product Credits and (iv) AISC, After By-product Credits for our operations and for the Company for the three and nine months ended September 30, 2024 and 2023.

Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce are measures developed by precious metals companies (including the Silver Institute and the World Gold Council) in an effort to provide a uniform standard for comparison purposes. There can be no assurance, however, that these non-GAAP measures as we report them are the same as those reported by other mining companies.

Cash Cost, After By-product Credits, per Ounce is an important operating statistic that we utilize to measure each mine's operating performance. We use AISC, After By-product Credits, per Ounce as a measure of our mines' net cash flow after costs for reclamation and sustaining capital. This is similar to the Cash Cost, After By-product Credits, per Ounce non-GAAP measure we report, but also includes reclamation and sustaining capital costs. Current GAAP measures used in the mining industry, such as cost of goods sold, do not capture all the expenditures incurred to discover, develop and sustain silver and gold production. Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce also allow us to benchmark the performance of each of our mines versus those of our competitors. As a silver and gold mining company, we also use these statistics on an aggregate basis - aggregating the Greens Creek and Lucky Friday mines to compare our performance with that of other silver mining companies. Similarly, these statistics are useful in identifying acquisition and investment opportunities as they provide a common tool for measuring the financial performance of other mines with varying geologic, metallurgical and operating characteristics.

We have not disclosed cost per ounce statistics for the Keno Hill operation as it is in the production ramp-up phase and has not met our definition of commercial production. See above "Consolidated Results of Operations" for our definition of commercial production. Determination of when those criteria have been met requires the use of judgment, and our definition of commercial production may differ from that of other mining companies.

Cash Cost, Before By-product Credits and AISC, Before By-product Credits include all direct and indirect operating cash costs related directly to the physical activities of producing metals, including mining, processing and other plant costs, third-party refining expense, on-site general and administrative costs, royalties and mining production taxes. AISC, Before By-product Credits for each mine also includes reclamation and sustaining capital costs. AISC, Before By-product Credits for our consolidated silver properties also includes corporate costs for general and administrative expense and sustaining capital costs. By-product credits include revenues earned from all metals other than the primary metal produced at each unit. As depicted in the tables below, by-product credits comprise an essential element of our silver unit cost structure, distinguishing our silver operations due to the polymetallic nature of their orebodies.

In addition to the uses described above, Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce provide management and investors an indication of operating cash flow, after consideration of the average price received from production. We also use these measurements for the comparative monitoring of performance of our mining operations period-to-period from a cash flow perspective. We currently do not report Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for our Keno Hill operation as it is in the ramp-up phase of production and accordingly it is excluded from our consolidated Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce.

Casa Berardi reports Cash Cost, After By-product Credits, per Gold Ounce and AISC, After By-product Credits, per Gold Ounce for the production of gold, their primary product, and by-product revenues earned from silver, which is a by-product at Casa Berardi. Only costs and ounces produced relating to units with the same primary product are combined to represent Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce. Thus, the gold produced at Casa Berardi is not included as a by-product credit when calculating Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for the total of Greens Creek and Lucky Friday, our combined silver properties. Similarly, the silver produced at our other three units is not included as a by-product credit when calculating the gold metrics for Casa Berardi.


In thousands (except per ounce amounts)	Three Months Ended September 30, 2024
	Greens Creek			Lucky Friday			Keno Hill (6)			Corporate (2)		Total Silver
Total cost of sales	$	73,597		$	39,286		$	19,809		$	—	$	132,692
Depreciation, depletion and amortization		(13,948	)		(10,681	)		(4,218	)		—		(28,847	)
Treatment costs		5,962			3,650			—			—		9,612
Change in product inventory		(8,125	)		106			—			—		(8,019	)
Reclamation and other costs		(1,825	)		(241	)		—			—		(2,066	)
Exclusion of Keno Hill cash costs (6)		—			—			(15,591	)		—		(15,591	)
Cash Cost, Before By-product Credits (1)		55,661			32,120			—			—		87,781
Reclamation and other costs		786			303			—			—		1,089
Sustaining capital		10,558			10,862			—			42		21,462
General and administrative		—			—			—			10,401		10,401
AISC, Before By-product Credits (1)		67,005			43,285			—			10,443		120,733
By-product credits:
Zinc		(22,126	)		(7,046	)		—			—		(29,172	)
Gold		(25,430	)		—			—			—		(25,430	)
Lead		(5,970	)		(13,245	)		—			—		(19,215	)
Copper		(409	)		—			—			—		(409	)
Total By-product credits		(53,935	)		(20,291	)		—			—		(74,226	)
Cash Cost, After By-product Credits	$	1,726		$	11,829		$	—		$	—	$	13,555
AISC, After By-product Credits	$	13,070		$	22,994		$	—		$	10,443	$	46,507
Ounces produced		1,857			1,185								3,042
Cash Cost, Before By-product Credits, per Ounce	$	29.97		$	27.11							$	28.86
By-product credits per ounce		(29.04	)		(17.13	)							(24.40	)
Cash Cost, After By-product Credits, per Ounce	$	0.93		$	9.98							$	4.46
AISC, Before By-product Credits, per Ounce	$	36.08		$	36.53							$	39.69
By-product credits per ounce		(29.04	)		(17.13	)							(24.40	)
AISC, After By-product Credits, per Ounce	$	7.04		$	19.40							$	15.29


In thousands (except per ounce amounts)	Three Months Ended September 30, 2024
	Gold - Casa Berardi			Other (4)			Total Gold and Other
Total cost of sales	$	46,280		$	6,827		$	53,107
Depreciation, depletion and amortization		(12,097	)		—			(12,097	)
Treatment costs		36			—			36
Change in product inventory		2,176			—			2,176
Reclamation and other costs		(207	)		—			(207	)
Exclusion of Other costs		—			(6,827	)		(6,827	)
Cash Cost, Before By-product Credits (1)		36,188			—			36,188
Reclamation and other costs		207			—			207
Sustaining capital		6,054			—			6,054
AISC, Before By-product Credits (1)		42,449			—			42,449
By-product credits:
Silver		(163	)		—			(163	)
Total By-product credits		(163	)		—			(163	)
Cash Cost, After By-product Credits	$	36,025		$	—		$	36,025
AISC, After By-product Credits	$	42,286		$	—		$	42,286
Divided by ounces produced		21			—			21
Cash Cost, Before By-product Credits, per Ounce	$	1,762		$	—		$	1,762
By-product credits per ounce		(8	)		—			(8	)
Cash Cost, After By-product Credits, per Ounce	$	1,754		$	—		$	1,754
AISC, Before By-product Credits, per Ounce	$	2,067		$	—		$	2,067
By-product credits per ounce		(8	)		—			(8	)
AISC, After By-product Credits, per Ounce	$	2,059		$	—		$	2,059


In thousands (except per ounce amounts)	Three Months Ended September 30, 2024
	Total Silver			Total Gold and Other			Total
Total cost of sales	$	132,692		$	53,107		$	185,799
Depreciation, depletion and amortization		(28,847	)		(12,097	)		(40,944	)
Treatment costs		9,612			36			9,648
Change in product inventory		(8,019	)		2,176			(5,843	)
Reclamation and other costs		(2,066	)		(207	)		(2,273	)
Exclusion of Keno Hill cash costs (6)		(15,591	)		—			(15,591	)
Exclusion of Other costs		—			(6,827	)		(6,827	)
Cash Cost, Before By-product Credits (1)		87,781			36,188			123,969
Reclamation and other costs		1,089			207			1,296
Sustaining capital		21,462			6,054			27,516
General and administrative		10,401			—			10,401
AISC, Before By-product Credits (1)		120,733			42,449			163,182
By-product credits:
Zinc		(29,172	)		—			(29,172	)
Gold		(25,430	)		—			(25,430	)
Lead		(19,215	)		—			(19,215	)
Silver		—			(163	)		(163	)
Copper		(409	)		—			(409	)
Total By-product credits		(74,226	)		(163	)		(74,389	)
Cash Cost, After By-product Credits	$	13,555		$	36,025		$	49,580
AISC, After By-product Credits	$	46,507		$	42,286		$	88,793
Divided by ounces produced		3,042			21
Cash Cost, Before By-product Credits, per Ounce	$	28.86		$	1,762
By-product credits per ounce		(24.40	)		(8	)
Cash Cost, After By-product Credits, per Ounce	$	4.46		$	1,754
AISC, Before By-product Credits, per Ounce	$	39.69		$	2,067
By-product credits per ounce		(24.40	)		(8	)
AISC, After By-product Credits, per Ounce	$	15.29		$	2,059


In thousands (except per ounce amounts)	Three Months Ended September 30, 2023
	Greens Creek			Lucky Friday			Keno Hill (6)			Corporate (2)		Total Silver
Total cost of sales	$	60,322		$	14,344		$	16,001		$	—	$	90,667
Depreciation, depletion and amortization		(11,015	)		(4,306	)		(1,948	)		—		(17,269	)
Treatment costs		10,369			1,368			1,033			—		12,770
Change in product inventory		377			(2,450	)		—			—		(2,073	)
Reclamation and other costs		(348	)		(168	)		—			—		(516	)
Exclusion of Lucky Friday cash costs		—			(20	)		—			—		(20	)
Exclusion of Keno Hill cash costs		—			—			(15,086	)		—		(15,086	)
Cash Cost, Before By-product Credits (1)		59,705			8,768			—			—		68,473
Reclamation and other costs		722			101			—			—		823
Sustaining capital		11,330			7,386			—			237		18,953
Exclusion of Lucky Friday sustaining costs		—			(4,934	)		—			—		(4,934	)
General and administrative		—			—			—			7,596		7,596
AISC, Before By-product Credits (1)		71,757			11,321			—			7,833		90,911
By-product credits:
Zinc		(20,027	)		(2,019	)		—			—		(22,046	)
Gold		(25,344	)		—			—			—		(25,344	)
Lead		(7,201	)		(5,368	)		—			—		(12,569	)
Exclusion of Lucky Friday by-product credits		—			676			—			—		676
Total By-product credits		(52,572	)		(6,711	)		—			—		(59,283	)
Cash Cost, After By-product Credits	$	7,133		$	2,057		$	—		$	—	$	9,190
AISC, After By-product Credits	$	19,185		$	4,610		$	—		$	7,833	$	31,628
Ounces produced		2,343			475								2,818
Exclusion of Lucky Friday ounces produced		—			(41	)							(41	)
Divided by ounces produced		2,343			434								2,777
Cash Cost, Before By-product Credits, per Ounce	$	25.48		$	20.20							$	24.66
By-product credits per ounce		(22.44	)		(15.46	)							(21.35	)
Cash Cost, After By-product Credits, per Ounce	$	3.04		$	4.74							$	3.31
AISC, Before By-product Credits, per Ounce	$	30.62		$	26.09							$	32.74
By-product credits per ounce		(22.44	)		(15.46	)							(21.35	)
AISC, After By-product Credits, per Ounce	$	8.18		$	10.63							$	11.39


In thousands (except per ounce amounts)	Three Months Ended September 30, 2023
	Gold - Casa Berardi			Other			Total Gold and Other
Total cost of sales	$	56,822		$	940		$	57,762
Depreciation, depletion and amortization		(18,980	)		32			(18,948	)
Treatment costs		254			—			254
Change in product inventory		(1,977	)		—			(1,977	)
Reclamation and other costs		(219	)		—			(219	)
Exclusion of Other costs		—			(972	)		(972	)
Cash Cost, Before By-product Credits (1)		35,900			—			35,900
Reclamation and other costs		219			—			219
Sustaining capital		5,133			—			5,133
AISC, Before By-product Credits (1)		41,252			—			41,252
By-product credits:
Silver		(119	)		—			(119	)
Total By-product credits		(119	)		—			(119	)
Cash Cost, After By-product Credits	$	35,781		$	—		$	35,781
AISC, After By-product Credits	$	41,133		$	—		$	41,133
Divided by ounces produced		24			—			24
Cash Cost, Before By-product Credits, per Ounce	$	1,480		$	—		$	1,480
By-product credits per ounce		(5	)		—			(5	)
Cash Cost, After By-product Credits, per Ounce	$	1,475		$	—		$	1,475
AISC, Before By-product Credits, per Ounce	$	1,700		$	—		$	1,700
By-product credits per ounce		(5	)		—			(5	)
AISC, After By-product Credits, per Ounce	$	1,695		$	—		$	1,695


In thousands (except per ounce amounts)	Three Months Ended September 30, 2023
	Total Silver			Total Gold and Other			Total
Total cost of sales	$	90,667		$	57,762		$	148,429
Depreciation, depletion and amortization		(17,269	)		(18,948	)		(36,217	)
Treatment costs		12,770			254			13,024
Change in product inventory		(2,073	)		(1,977	)		(4,050	)
Reclamation and other costs		(516	)		(219	)		(735	)
Exclusion of Other costs		—			(972	)		(972	)
Exclusion of Lucky Friday cash costs (3)		(20	)		—			(20	)
Exclusion of Keno Hill cash costs		(15,086	)		—			(15,086	)
Cash Cost, Before By-product Credits (1)		68,473			35,900			104,373
Reclamation and other costs		823			219			1,042
Sustaining capital		18,953			5,133			24,086
Exclusion of Lucky Friday sustaining costs (3)		(4,934	)		—			(4,934	)
General and administrative		7,596			—			7,596
AISC, Before By-product Credits (1)		90,911			41,252			132,163
By-product credits:
Zinc		(22,046	)		—			(22,046	)
Gold		(25,344	)		—			(25,344	)
Lead		(12,569	)		—			(12,569	)
Silver		—			(119	)		(119	)
Exclusion of Lucky Friday by-product credits (3)		676			—			676
Total By-product credits		(59,283	)		(119	)		(59,402	)
Cash Cost, After By-product Credits	$	9,190		$	35,781		$	44,971
AISC, After By-product Credits	$	31,628		$	41,133		$	72,761
Ounces produced		2,818			24
Exclusion of Lucky Friday ounces produced (3)		(41	)		—
Divided by ounces produced		2,777			24
Cash Cost, Before By-product Credits, per Ounce	$	24.66		$	1,480
By-product credits per ounce		(21.35	)		(5	)
Cash Cost, After By-product Credits, per Ounce	$	3.31		$	1,475
AISC, Before By-product Credits, per Ounce	$	32.74		$	1,700
By-product credits per ounce		(21.35	)		(5	)
AISC, After By-product Credits, per Ounce	$	11.39		$	1,695


In thousands (except per ounce amounts)	Nine Months Ended September 30, 2024
	Greens Creek			Lucky Friday			Keno Hill (6)			Corporate (2)		Total Silver
Total cost of sales	$	200,240		$	104,328		$	59,606		$	—	$	364,174
Depreciation, depletion and amortization		(39,707	)		(29,300	)		(12,549	)		—		(81,556	)
Treatment costs		21,755			9,619			—			—		31,374
Change in product inventory		(3,025	)		602			—			—		(2,423	)
Reclamation and other costs		(3,362	)		(654	)		—			—		(4,016	)
Exclusion of Lucky Friday cash costs (3)		—			(3,634	)		—			—		(3,634	)
Exclusion of Keno Hill cash costs (6)		—			—			(47,057	)		—		(47,057	)
Cash Cost, Before By-product Credits (1)		175,901			80,961			—			—		256,862
Reclamation and other costs		2,356			708			—			—		3,064
Sustaining capital		29,885			32,430			—			1,143		63,458
Exclusion of Lucky Friday sustaining costs (3)		—			(5,396	)		—			—		(5,396	)
General and administrative		—			—			—			36,357		36,357
AISC, Before By-product Credits (1)		208,142			108,703			—			37,500		354,345
By-product credits:
Zinc		(64,205	)		(18,537	)		—			—		(82,742	)
Gold		(80,826	)		—			—			—		(80,826	)
Lead		(19,769	)		(40,432	)		—			—		(60,201	)
Copper		(409	)		—			—			—		(409	)
Exclusion of Lucky Friday by-product credits (3)		—			3,943			—			—		3,943
Total By-product credits		(165,209	)		(55,026	)		—			—		(220,235	)
Cash Cost, After By-product Credits	$	10,692		$	25,935		$	—		$	—	$	36,627
AISC, After By-product Credits	$	42,933		$	53,677		$	—		$	37,500	$	134,110
Ounces produced		6,579			3,554								10,133
Exclusion of Lucky Friday ounces produced (3)		—			(253	)							(253	)
Divided by ounces produced		6,579			3,301								9,880
Cash Cost, Before By-product Credits, per Ounce	$	26.73		$	24.53							$	26.00
By-product credits per ounce		(25.11	)		(16.67	)							(22.29	)
Cash Cost, After By-product Credits, per Ounce	$	1.62		$	7.86							$	3.71
AISC, Before By-product Credits, per Ounce	$	31.64		$	32.93							$	35.86
By-product credits per ounce		(25.11	)		(16.67	)							(22.29	)
AISC, After By-product Credits, per Ounce	$	6.53		$	16.26							$	13.57


In thousands (except per ounce amounts)	Nine Months Ended September 30, 2024
	Casa Berardi			Other (4)			Total Gold
Total cost of sales	$	171,880		$	14,340		$	186,220
Depreciation, depletion and amortization		(62,058	)		—			(62,058	)
Treatment costs		112			—			112
Change in product inventory		3,365			—			3,365
Reclamation and other costs		(622	)		—			(622	)
Exclusion of Other costs		—			(14,340	)		(14,340	)
Cash Cost, Before By-product Credits (1)		112,677			—			112,677
Reclamation and other costs		622			—			622
Sustaining capital		13,582			—			13,582
AISC, Before By-product Credits (1)		126,881			—			126,881
By-product credits:
Silver		(489	)		—			(489	)
Total By-product credits		(489	)		—			(489	)
Cash Cost, After By-product Credits	$	112,188		$	—		$	112,188
AISC, After By-product Credits	$	126,392		$	—		$	126,392
Divided by ounces produced		66			—			66
Cash Cost, Before By-product Credits, per Ounce	$	1,714		$	—		$	1,714
By-product credits per ounce		(7	)		—			(7	)
Cash Cost, After By-product Credits, per Ounce	$	1,707		$	—		$	1,707
AISC, Before By-product Credits, per Ounce	$	1,930		$	—		$	1,930
By-product credits per ounce		(7	)		—			(7	)
AISC, After By-product Credits, per Ounce	$	1,923		$	—		$	1,923


In thousands (except per ounce amounts)	Nine Months Ended September 30, 2024
	Total Silver			Total Gold and Other			Total
Total cost of sales	$	364,174		$	186,220		$	550,394
Depreciation, depletion and amortization		(81,556	)		(62,058	)		(143,614	)
Treatment costs		31,374			112			31,486
Change in product inventory		(2,423	)		3,365			942
Reclamation and other costs		(4,016	)		(622	)		(4,638	)
Exclusion of Lucky Friday cash costs (3)		(3,634	)		—			(3,634	)
Exclusion of Keno Hill cash costs (6)		(47,057	)		—			(47,057	)
Exclusion of Other costs		—			(14,340	)		(14,340	)
Cash Cost, Before By-product Credits (1)		256,862			112,677			369,539
Reclamation and other costs		3,064			622			3,686
Sustaining capital		63,458			13,582			77,040
Exclusion of Lucky Friday sustaining costs (3)		(5,396	)		—			(5,396	)
General and administrative		36,357			—			36,357
AISC, Before By-product Credits (1)		354,345			126,881			481,226
By-product credits:
Zinc		(82,742	)		—			(82,742	)
Gold		(80,826	)		—			(80,826	)
Lead		(60,201	)		—			(60,201	)
Copper		(409	)		—			(409	)
Silver		—			(489	)		(489	)
Exclusion of Lucky Friday by-product credits (3)		3,943			—			3,943
Total By-product credits		(220,235	)		(489	)		(220,724	)
Cash Cost, After By-product Credits	$	36,627		$	112,188		$	148,815
AISC, After By-product Credits	$	134,110		$	126,392		$	260,502
Ounces produced		10,133			66
Exclusion of Lucky Friday ounces produced (3)		(253	)		—
Divided by ounces produced		9,880			66
Cash Cost, Before By-product Credits, per Ounce	$	26.00		$	1,714
By-product credits per ounce		(22.29	)		(7	)
Cash Cost, After By-product Credits, per Ounce	$	3.71		$	1,707
AISC, Before By-product Credits, per Ounce	$	35.86		$	1,930
By-product credits per ounce		(22.29	)		(7	)
AISC, After By-product Credits, per Ounce	$	13.57		$	1,923


In thousands (except per ounce amounts)	Nine Months Ended September 30, 2023
	Greens Creek			Lucky Friday			Keno Hill(6)			Corporate (2)		Total Silver
Total cost of sales	$	189,664		$	81,068		$	17,582		$	—	$	288,314
Depreciation, depletion and amortization		(38,557	)		(23,741	)		(2,209	)		—		(64,507	)
Treatment costs		31,114			10,832			1,146			—		43,092
Change in product inventory		(2,479	)		(3,313	)		—			—		(5,792	)
Reclamation and other costs		(214	)		(826	)		—			—		(1,040	)
Exclusion of Lucky Friday cash costs (3)		—			(20	)		—			—		(20	)
Exclusion of Keno Hill cash costs (6)		—			—			(16,519	)		—		(16,519	)
Cash Cost, Before By-product Credits (1)		179,528			64,000			—			—		243,528
Reclamation and other costs		2,166			671			—			—		2,837
Sustaining capital		26,686			24,251			—			831		51,768
Exclusion of Lucky Friday sustaining costs		—			(4,934	)		—			—		(4,934	)
General and administrative		—			—			—			30,449		30,449
AISC, Before By-product Credits (1)		208,380			83,988			—			31,280		323,648
By-product credits:
Zinc		(64,955	)		(14,284	)		—			—		(79,239	)
Gold		(79,089	)		—			—			—		(79,089	)
Lead		(22,002	)		(33,953	)		—			—		(55,955	)
Exclusion of Lucky Friday by-product credits		—			676			—			—		676
Total By-product credits		(166,046	)		(47,561	)		—			—		(213,607	)
Cash Cost, After By-product Credits	$	13,482		$	16,439		$	—		$	—	$	29,921
AISC, After By-product Credits	$	42,334		$	36,427		$	—		$	31,280	$	110,041
Ounces produced		7,472			3,025								10,497
Exclusion of Lucky Friday ounces produced		—			(41	)							(41	)
Divided by ounces produced		7,472			2,984								10,456
Cash Cost, Before By-product Credits, per Ounce	$	24.03		$	21.45							$	23.29
By-product credits per ounce		(22.22	)		(15.94	)							(20.43	)
Cash Cost, After By-product Credits, per Ounce	$	1.81		$	5.51							$	2.86
AISC, Before By-product Credits, per Ounce	$	27.89		$	28.15							$	30.95
By-product credits per ounce		(22.22	)		(15.94	)							(20.43	)
AISC, After By-product Credits, per Ounce	$	5.67		$	12.21							$	10.52


In thousands (except per ounce amounts)	Nine Months Ended September 30, 2023
	Casa Berardi			Other (4)			Total Gold
Total cost of sales	$	162,396		$	2,743		$	165,139
Depreciation, depletion and amortization		(43,288	)		(142	)		(43,430	)
Treatment costs		1,072			—			1,072
Change in product inventory		(5,345	)		—			(5,345	)
Reclamation and other costs		(655	)		—			(655	)
Exclusion of Casa Berardi cash costs (5)		(2,851	)		—			(2,851	)
Exclusion of Other costs		—			(2,601	)		(2,601	)
Cash Cost, Before By-product Credits (1)		111,329			—			111,329
Reclamation and other costs		655			—			655
Sustaining capital		29,175			—			29,175
AISC, Before By-product Credits (1)		141,159			—			141,159
By-product credits:
Silver		(390	)		—			(390	)
Total By-product credits		(390	)		—			(390	)
Cash Cost, After By-product Credits	$	110,939		$	—		$	110,939
AISC, After By-product Credits	$	140,769		$	—		$	140,769
Divided by ounces produced		68			—			68
Cash Cost, Before By-product Credits, per Ounce	$	1,641		$	—		$	1,641
By-product credits per ounce		(6	)		—			(6	)
Cash Cost, After By-product Credits, per Ounce	$	1,635		$	—		$	1,635
AISC, Before By-product Credits, per Ounce	$	2,081		$	—		$	2,081
By-product credits per ounce		(6	)		—			(6	)
AISC, After By-product Credits, per Ounce	$	2,075		$	—		$	2,075


In thousands (except per ounce amounts)	Nine Months Ended September 30, 2023
	Total Silver			Total Gold			Total
Total cost of sales	$	288,314		$	165,139		$	453,453
Depreciation, depletion and amortization		(64,507	)		(43,430	)		(107,937	)
Treatment costs		43,092			1,072			44,164
Change in product inventory		(5,792	)		(5,345	)		(11,137	)
Reclamation and other costs		(1,040	)		(655	)		(1,695	)
Exclusion of Lucky Friday cash costs		(20	)		—			(20	)
Exclusion of Keno Hill cash costs		(16,519	)		—			(16,519	)
Exclusion of Casa Berardi cash costs (5)		—			(2,851	)		(2,851	)
Exclusion of Other costs		—			(2,601	)		(2,601	)
Cash Cost, Before By-product Credits (1)		243,528			111,329			354,857
Reclamation and other costs		2,837			655			3,492
Sustaining capital		51,768			29,175			80,943
Exclusion of Lucky Friday sustaining costs		(4,934	)		—			(4,934	)
General and administrative		30,449			—			30,449
AISC, Before By-product Credits (1)		323,648			141,159			464,807
By-product credits:
Zinc		(79,239	)		—			(79,239	)
Gold		(79,089	)		—			(79,089	)
Lead		(55,955	)		—			(55,955	)
Silver		—			(390	)		(390	)
Exclusion of Lucky Friday by-product credits		676			—			676
Total By-product credits		(213,607	)		(390	)		(213,997	)
Cash Cost, After By-product Credits	$	29,921		$	110,939		$	140,860
AISC, After By-product Credits	$	110,041		$	140,769		$	250,810
Ounces produced	$	10,497		$	68
Exclusion of Lucky Friday ounces produced	$	(41	)	$	—
Divided by ounces produced		10,456			68
Cash Cost, Before By-product Credits, per Ounce	$	23.29		$	1,641
By-product credits per ounce		(20.43	)		(6	)
Cash Cost, After By-product Credits, per Ounce	$	2.86		$	1,635
AISC, Before By-product Credits, per Ounce	$	30.95		$	2,081
By-product credits per ounce		(20.43	)		(6	)
AISC, After By-product Credits, per Ounce	$	10.52		$	2,075

(1)

Includes all direct and indirect operating costs related to the physical activities of producing metals, including mining, processing and other plant costs, third-party refining and marketing expense, on-site general and administrative costs and royalties, before by-product revenues earned from all metals other than the primary metal produced at each operation. AISC, Before By-product Credits also includes reclamation and sustaining capital costs.

(2)

AISC, Before By-product Credits for our consolidated silver properties includes corporate costs for general and administrative expense and sustaining capital.

(3)

Lucky Friday operations were suspended in August 2023 following the underground fire in the #2 shaft secondary egress and resumed on January 9, 2024. The portion of cash costs, sustaining costs, by-product credits, and silver production incurred during the suspension period are excluded from the calculation of total cost of sales, Cash Cost, Before By-product Credits, Cash Cost, After By-product Credits, AISC, Before By-product Credits, and AISC, After By-product Credits.

(4)

Other includes $6.8 million and $14.3 million of total cost of sales for the three and nine months ended September 30, 2024, respectively, related to our environmental remediation services business. For the three and nine months ended September 30, 2023, Other includes total cost of sales of $0.9 million and $2.7 million, respectively, related to our environmental remediation services business and Nevada operations.

(5)

During the nine months ended September 30, 2023, the Company completed the necessary studies to conclude usage of the F-160 pit as a tailings storage facility after mining is complete. As a result, a portion of the mining costs have been excluded from Cash Cost, Before By-product Credits and AISC, Before By-product Credits.

(6)

Keno Hill is in the ramp-up phase of production and is excluded from the calculation of Cash Cost, Before By-product Credits, Cash Cost, After By-product Credits, AISC, Before By-product Credits, and AISC, After By-product Credits.

Financial Liquidity and Capital Resources

We have a disciplined cash management strategy of maintaining financial flexibility to execute our capital priorities and provide long-term value to our stockholders. Consistent with that strategy, we aim to maintain an acceptable level of net debt and sufficient liquidity to fund debt service costs, operations, capital expenditures, exploration and pre-development projects, while returning cash to stockholders through dividends and potential share repurchases.

At September 30, 2024, we had $22.3 million in cash and cash equivalents, of which $8.8 million was held in foreign subsidiaries' local currency that we anticipate utilizing for near-term operating, exploration or capital costs by those foreign subsidiaries. At September 30, 2024, we had utilized $13.0 million drawn on our credit facility of $225 million, with $6.3 million used for letters of credit and the remainder available as borrowings. We also have USD cash and cash equivalent balances held by our foreign subsidiaries that, if repatriated, may be subject to withholding taxes. We expect that there would be no additional tax burden upon repatriation after considering the cash cost associated with the withholding taxes. We believe that our liquidity and capital resources from our U.S. operations are adequate to fund our U.S. operations and corporate activities.

Pursuant to our common stock dividend policy described in Note 12 of Notes to Consolidated Financial Statements in our consolidated financial statements and notes for the year ended December 31, 2023, our Board of Directors declared and paid dividends on our common stock and preferred of $8.7 million and $16.7 million during the three and nine months ended September 30, 2024, respectively, and $3.9 million and $11.8 million for the three and nine months ended September 30, 2023, respectively. Our dividend policy has a silver-linked component which ties the amount of declared common stock dividends to our realized silver price for the preceding quarter. Another component of our common stock dividend policy anticipates paying an annual minimum dividend.

For illustrative purposes only, the table below summarizes potential dividend amounts under our dividend policy.


Quarterly Average Realized Silver Price ($ per ounce)		Quarterly Silver-Linked Dividend ($ per share)	Annualized Silver-Linked Dividend ($ per share)	Annualized Minimum Dividend ($ per share)	Annualized Dividends per Share: Silver-Linked and Minimum ($ per share)
Less than $20		$—	$—	$0.015	$0.015
$	20	$0.0025	$0.01	$0.015	$0.025
$	25	$0.010	$0.04	$0.015	$0.055
$	30	$0.015	$0.06	$0.015	$0.075
$	35	$0.025	$0.10	$0.015	$0.115
$	40	$0.035	$0.14	$0.015	$0.155
$	45	$0.045	$0.18	$0.015	$0.195
$	50	$0.055	$0.22	$0.015	$0.235

The declaration and payment of dividends on our common stock is at the sole discretion of our Board of Directors, and there can be no assurance that we will continue to declare and pay common stock dividends in the future.

Pursuant to our stock repurchase program described in Note 12 of Notes to Consolidated Financial Statements in our consolidated financial statements and notes for the year ended December 31, 2023, we are authorized to repurchase up to 20 million shares of our outstanding common stock from time to time in open market or privately negotiated transactions, depending on prevailing market conditions and other factors. The repurchase program may be modified, suspended or discontinued by us at any time. Whether or not we engage in repurchases from time to time may depend on a variety of factors, including not only price and cash resources, but customary black-out restrictions, whether we have any material inside information, limitations on share repurchases or cash usage that may be imposed by our credit agreement or in connection with issuances of securities, alternative uses for cash, applicable law, and other investment opportunities from time to time. As of September 30, 2024 and December 31, 2023, 934,100 shares had been purchased in prior periods at an average price of $3.99 per share, leaving 19.1 million shares that may yet be purchased under the program. We have not repurchased any shares since June 2014.

As discussed in Note 6 of Notes to Condensed Consolidated Financial Statements (Unaudited) pursuant to an equity distribution agreement dated February 18, 2021, we may offer and sell up to 60 million shares of our common stock from time to time to or through sales agents in “at-the-market” offerings. Sales of the shares, if any, will be made by means of ordinary brokers transactions or as otherwise agreed between the Company and the agents as principals. Whether or not we engage in sales from time to time may depend on a variety of factors, including share price, our cash resources, customary black-out restrictions, and whether we have any material inside information. The equity distribution agreement can be terminated by us at any time. Any sales of shares under that agreement are registered under the Securities Act of 1933, as amended, pursuant to a shelf registration statement on Form S-3. During the three months ended September 30, 2024, we sold 9,090,726 shares under the agreement for proceeds of $57.3 million, net of commissions and fees of $0.9 million and during the nine months ended September 30, 2024, we sold 9,339,287 shares under the agreement for proceeds of $58.4 million, net of commissions and fees of $0.94 million.

As a result of our current cash balances, the performance of our current and expected operations, current metals prices, proceeds from potential at-the-market sales of common stock, and availability under our Credit Agreement, we believe we will be able to meet

our obligations and other potential cash requirements during the next 12 months and beyond. Our obligations and other uses of cash may include, but are not limited to: debt service obligations related to the Senior Notes and IQ Notes; principal and interest payments under our Credit Agreement; ramp up and suspension costs; capital expenditures at our operations; potential acquisitions of other mining companies or properties; regulatory matters; litigation; potential repurchases of our common stock under the program described above; and payment of dividends on common stock, if declared by our Board of Directors.

We currently estimate a range of approximately $196 to $218 million (before any lease financing) will be invested in 2024 on capital expenditures, primarily for equipment, infrastructure, and development at our mines, including $153.7 million already incurred as of September 30, 2024. We also estimate exploration and pre-development expenditures will total approximately $31.5 million in 2024, including $21.6 million already incurred as of September 30, 2024. Our expenditures for these items and our related plans for 2024 may change based upon our financial position, metals prices, and other considerations. Our ability to fund the activities described above will depend on our operating performance, metals prices, our ability to estimate revenues and costs, sources of liquidity available to us, including the revolving credit facility (which requires compliance with certain financial and other covenants), and other factors. A sustained downturn in metals prices, significant increase in operational or capital costs or other uses of cash, poor results of our operating units, our inability to access the credit facility or the sources of liquidity discussed above, or other factors beyond our control could impact our plans.

We may defer some capital investment and/or exploration and pre-development activities, engage in asset sales or secure additional capital if necessary to maintain liquidity. We also may pursue additional acquisition opportunities, which could require additional equity issuances or other forms of financing. There can be no assurance that such financing will be available to us.

Our liquid assets include (in millions):


	September 30, 2024		December 31, 2023
Cash and cash equivalents held in U.S. dollars	$	13.5	$	98.8
Cash and cash equivalents held in foreign currency		8.8		7.6
Total cash and cash equivalents		22.3		106.4
Marketable equity securities - non-current		40.9		32.3
Total cash, cash equivalents and investments	$	63.2	$	138.7

Cash and cash equivalents decreased by $84.1 million in the first nine months of 2024. Cash held in foreign currencies represents balances in Canadian dollars and Mexican Pesos. The value of non-current marketable equity securities increased by $8.6 million.


	Nine Months Ended
	September 30, 2024		September 30, 2023
Cash provided by operating activities (in millions)	$	150.8	$	74.6

Cash provided by operating activities for the nine months ended September 30, 2024, of $150.8 million represents a $76.2 million increase compared to the $74.6 million provided in the same period for 2023. $106.3 million of the variance was attributable to higher income adjusted for non-cash items, reflecting higher non-cash depreciation, depletion and amortization expense, a foreign exchange gain and write down of property, plant and equipment. The increase was partly offset by negative net working capital changes resulting from higher accounts receivable balances reflecting the timing of sales at Greens Creek, Lucky Friday and Keno Hill and an increase in inventories at Lucky Friday, Casa Berardi and Keno Hill.


	Nine Months Ended
	September 30, 2024			September 30, 2023
Cash used in investing activities (in millions)	$	(152.3	)	$	(162.9	)

During the nine months ended September 30, 2024, cash used in investing activities of $152.3 million, included $153.7 million invested in our business, net of $1.5 million in proceeds from the sale of property, plant and mine development. Capital expenditures decreased by $7.6 million compared to the same period in 2023. The variance was primarily due to lower capital spending at Lucky Friday and Casa Berardi, partially offset by higher capital spending at Greens Creek.


	Nine Months Ended
	September 30, 2024			September 30, 2023
Cash (used in) provided by financing activities (in millions)	$	(82.4	)	$	84.1

During the nine months ended September 30, 2024, we had net repayments of $115.0 million on our revolving credit facility resulting in $13.0 million outstanding at an interest rate of 7.8% on September 30, 2024. During the nine months ended September 30, 2024 and 2023:

•

we paid cash dividends on our common and preferred stock totaling $16.7 million and $11.8 million, respectively;

•

we issued stock under our ATM program described above for net proceeds of $58.4 million and $25.9 million, respectively; and

•

we made repayments on our finance leases of $7.8 million and $8.0 million, respectively.

Contractual Obligations, Contingent Liabilities and Commitments

The table below presents our fixed, non-cancelable contractual obligations and commitments primarily related to our Senior Notes, IQ Notes, credit facility, outstanding purchase orders (including certain capital expenditures) and lease arrangements as of September 30, 2024 (in thousands):


	Payments Due By Period
	Less than 1 year		1-3 years		4-5 years		More than 5 years		Total
Purchase obligations (1)	$	55,865	$	—	$	—	$	—	$	55,865
Credit facility(2)		14,882		3,086		1,243		—		19,211
Finance lease commitments (3)		8,303		9,674		2,344		879		21,200
Operating lease commitments (4)		1,862		2,519		2,140		5,138		11,659
Senior Notes (5)		34,438		68,876		487,914		—		591,228
IQ Notes (6)		38,064		—		—		—		38,064
Total contractual cash obligations	$	153,414	$	84,155	$	493,641	$	6,017	$	737,227

(1)

Consists of open purchase orders and commitments of approximately $9.8 million, $18.8 million, $13.1 million, $13.5 million and $0.8 million for various capital and non-capital items at Greens Creek, Lucky Friday, Keno Hill, Casa Berardi and Other Operations, respectively.

(2)

The Credit Agreement provides for a $225 million revolving credit facility. We had net draws of $13.0 million and $6.3 million in letters of credit outstanding as of September 30, 2024. The amounts in the table above assume no additional amounts will be drawn in future periods, and include only the standby fee on the current undrawn balance and accrued interest. For more information on our credit facility, see Note 7 of Notes to Condensed Consolidated Financial Statements (Unaudited).

(3)

Includes scheduled finance lease payments of $3.9 million, $4.6 million, $7.2 million, and $5.5 million for equipment at Greens Creek, Lucky Friday, Casa Berardi, and Keno Hill, respectively.

(4)

We enter into operating leases in the normal course of business. Substantially all lease agreements have fixed payment terms based on the passage of time. Some lease agreements provide us with the option to renew the lease or purchase the leased property. Our future operating lease obligations would change if we exercised these renewal options and if we entered into additional operating lease arrangements.

(5)

On February 19, 2020, we completed an offering of $475 million in aggregate principal amount of our Senior Notes due February 15, 2028. The Senior Notes bear interest at a rate of 7.25% per year, with interest payable on February 15 and August 15 of each year. See Note 7 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information.

(6)

On July 9, 2020, we entered into a note purchase agreement pursuant to which we issued our IQ Notes for CAD$50 million (approximately USD$36.8 million at the time of the transaction) in aggregate principal amount. The IQ Notes bear interest on amounts outstanding at a rate of 6.515% per year, payable on January 9 and July 9 of each year. See Note 7 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information.

We record liabilities for costs associated with mine closure, reclamation of land and other environmental matters. At September 30, 2024, our liabilities for these matters totaled $118.6 million. Future expenditures related to closure, reclamation and environmental expenditures at our sites are difficult to estimate, although we anticipate we will incur expenditures relating to these obligations over the next 30 years. For additional information relating to our environmental obligations, see Note 11 of Notes to Condensed Consolidated Financial Statements (Unaudited).

Critical Accounting Estimates

There have been no significant changes to the critical accounting estimates disclosed in “Critical Accounting Policies” in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Exhibit 99.1 to the May 20, 2024 8-K.

Off-Balance Sheet Arrangements

At September 30, 2024, we had no existing off-balance sheet arrangements, as defined under SEC regulations, that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Guarantor Subsidiaries

Presented below are Hecla’s unaudited interim condensed consolidating financial statements as required by Rule 3-10 of Regulation S-X of the Securities Exchange Act of 1934, as amended, resulting from the guarantees by certain of Hecla's subsidiaries of the Senior Notes and IQ Notes (see Note 7 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information). The Guarantors consist of the following of Hecla's 100%-owned subsidiaries: Hecla Limited; Silver Hunter Mining Company; Rio Grande Silver, Inc.; Hecla MC Subsidiary, LLC; Hecla Silver Valley, Inc.; Burke Trading, Inc.; Hecla Montana, Inc.; Revett Silver Company; RC Resources, Inc.; Troy Mine Inc.; Revett Exploration, Inc.; Revett Holdings, Inc.; Mines Management, Inc.; Newhi, Inc.; Montanore Minerals Corp.; Hecla Alaska LLC; Hecla Greens Creek Mining Company; Hecla Admiralty Company; Hecla Juneau Mining Company; Klondex Holdings Inc.; Klondex Gold & Silver Mining Co.; Klondex Midas Holdings Limited; Klondex Aurora Mine Inc.; Klondex Hollister Mine Inc.; Hecla Quebec, Inc.; and Alexco Resource Corp. We completed the offering of the Senior Notes on February 19, 2020 under our shelf registration statement previously filed with the SEC. We issued the IQ Notes in four equal tranches between July and October 2020.

The unaudited interim condensed consolidating financial statements below have been prepared from our financial information on the same basis of accounting as the unaudited interim condensed consolidated financial statements set forth elsewhere in this report. Investments in the subsidiaries are accounted for under the equity method. Accordingly, the entries necessary to consolidate Hecla, the Guarantors, and our non-guarantor subsidiaries are reflected in the intercompany eliminations column. In the course of preparing consolidated financial statements, we eliminate the effects of various transactions conducted between Hecla and its subsidiaries and among the subsidiaries. While valid at an individual subsidiary level, such activities are eliminated in consolidation because, when taken as a whole, they do not represent business activity with third-party customers, vendors, and other parties. Examples of such eliminations include the following:

•

Investments in subsidiaries. The acquisition of a company results in an investment in debt or equity capital on the records of the parent company and a contribution to debt or equity capital on the records of the subsidiary. Such investments and capital contributions are eliminated in consolidation.

•

Capital contributions. Certain of Hecla's subsidiaries do not generate cash flow, either at all or that is sufficient to meet their capital needs, and their cash requirements are routinely met with inter-company advances from their parent companies. Generally on an annual basis, when not otherwise intended as debt, the Boards of Directors of such parent companies declare contributions of capital to their subsidiary companies, which increase the parents' investment and the subsidiaries' additional paid-in capital. Occasionally, parent companies may also subscribe for additional common shares of their subsidiaries. In consolidation, investments in subsidiaries and related additional paid-in capital are eliminated.

•

Debt. At times, inter-company debt agreements have been established between certain of Hecla's subsidiaries and their parents. The related debt liability and receivable balances, accrued interest expense (if any) and income activity (if any), and payments of principal and accrued interest amounts (if any) by the subsidiary companies to their parents are eliminated in consolidation.

•

Dividends. Certain of Hecla's subsidiaries which generate cash flow routinely provide cash to their parent companies through inter-company transfers. On at least an annual basis, the Boards of Directors of such subsidiary companies declare dividends to their parent companies, which reduces the subsidiaries' retained earnings and increases the parents' dividend income. In consolidation, such activity is eliminated.

•

Deferred taxes. Our ability to realize deferred tax assets and liabilities is considered for two consolidated tax groups of subsidiaries within the United States: The Nevada U.S. Group and the Hecla U.S. Group. Within each tax group, all subsidiaries' estimated future taxable income contributes to the ability of their tax group to realize all such assets and liabilities. However, when Hecla's subsidiaries are viewed independently, we use the separate return method to assess the realizability of each subsidiary's deferred tax assets and whether a valuation allowance is required against such deferred tax assets. In some instances, a parent company or subsidiary may possess deferred tax assets whose realization depends on the future taxable incomes of other subsidiaries on a consolidated-return basis, but would not be considered realizable if such parent or subsidiary filed on a separate stand-alone basis. In such a situation, a valuation allowance is assessed on that subsidiary's deferred tax assets, with the resulting adjustment reported in the eliminations column of the guarantor and parent's financial statements, as is the case in the unaudited interim financial statements set forth below. The separate return method can result in significant eliminations of deferred tax assets and liabilities and related income tax provisions and benefits. Non-current deferred tax asset balances are included in other non-current assets on the consolidating balance sheets and make up a large portion of that item, particularly for the guarantor balances.

Separate financial statements of the Guarantors are not presented because the guarantees by the Guarantors are joint and several and full and unconditional, except for certain customary release provisions, including: (1) the sale or disposal of all or substantially all of the assets of the Guarantor; (2) the sale or other disposition of the capital stock of the Guarantor; (3) the Guarantor is designated as an unrestricted entity in accordance with the applicable provisions of the indenture; (4) Hecla ceases to be a borrower as defined in the indenture; and (5) upon legal or covenant defeasance or satisfaction and discharge of the indenture.

Unaudited Interim Condensed Consolidating Balance Sheets


	As of September 30, 2024
	Parent			Guarantors			Non-Guarantors		Eliminations			Consolidated
	(in thousands)
Assets
Cash and cash equivalents	$	13,095		$	8,216		$	962	$	—		$	22,273
Other current assets		22,950			137,520			23,224		—			183,694
Properties, plants, equipment and mineral interests, net		—			2,657,082			8,260		—			2,665,342
Intercompany receivable (payable)		(191,308	)		(850,839	)		552,052		490,095			—
Investments in subsidiaries		2,232,270			(52	)		—		(2,232,218	)		—
Other non-current assets		490,750			21,573			77,996		(505,917	)		84,402
Total assets	$	2,567,757		$	1,973,500		$	662,494	$	(2,248,040	)	$	2,955,711
Liabilities and Stockholders' Equity
Current liabilities	$	43,224		$	164,312		$	22,960	$	(41,924	)	$	188,572
Long-term debt		466,178			4,300			—		26,153			496,631
Non-current portion of accrued reclamation		—			106,551			1,778		—			108,329
Non-current deferred tax liability		20,074			91,257			—		—			111,331
Other non-current liabilities		—			12,566			—		—			12,566
Stockholders' equity		2,038,281			1,594,514			637,756		(2,232,269	)		2,038,282
Total liabilities and stockholders' equity	$	2,567,757		$	1,973,500		$	662,494	$	(2,248,040	)	$	2,955,711


	As of December 31, 2023
	Parent			Guarantors			Non-Guarantors		Eliminations			Consolidated
	(in thousands)
Assets
Cash and cash equivalents	$	89,377		$	16,053		$	944	$	—		$	106,374
Other current assets		15,929			127,531			10,428		—		$	153,888
Properties, plants, equipment and mineral interests - net		642			2,657,261			8,347		—		$	2,666,250
Intercompany receivable (payable)		(132,464	)		(812,078	)		589,842		354,700		$	—
Investments in subsidiaries		2,248,533			—			—		(2,248,533	)	$	—
Other non-current assets		432,468			21,960			29,353		(399,189	)	$	84,592
Total assets	$	2,654,485		$	2,010,727		$	638,914	$	(2,293,022	)	$	3,011,104
Liabilities and Stockholders' Equity
Current liabilities	$	50,383		$	141,439		$	10,128	$	(44,490	)	$	157,460
Long-term debt		636,000			17,063			0		—		$	653,063
Non-current portion of accrued reclamation		—			108,731			2,066		—		$	110,797
Non-current deferred tax liability		—			104,835			—		—		$	104,835
Other non-current liabilities		—			16,845			0		—		$	16,845
Stockholders' equity		1,968,102			1,621,814			626,720		(2,248,532	)	$	1,968,104
Total liabilities and stockholders' equity	$	2,654,485		$	2,010,727		$	638,914	$	(2,293,022	)	$	3,011,104

Unaudited Interim Condensed Consolidating Statements of Operations


	Nine Months Ended September 30, 2024
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
	(in thousands)
Revenues	$	(8,761	)	$	689,031		$	—		$	—		$	680,270
Cost of sales		(2,976	)		(403,804	)		—			—			(406,780	)
Depreciation, depletion, amortization		—			(143,614	)		—			—			(143,614	)
General and administrative		(16,436	)		(18,474	)		(1,447	)		—			(36,357	)
Exploration and pre-development		(375	)		(18,919	)		(2,283	)		—			(21,577	)
Equity in earnings of subsidiaries		28,758			—			—			(28,758	)		—
Other income (expense)		50,206			(60,159	)		7,005			(22,771	)		(25,719	)
Income before income and mining taxes		50,416			44,061			3,275			(51,529	)		46,223
Expense from income taxes		(26,539	)		(18,576	)		—			22,770			(22,345	)
Net income		23,877			25,485			3,275			(28,759	)		23,878
Preferred stock dividends		(414	)		—			—			—			(414	)
Income applicable to common stockholders	$	23,463		$	25,485		$	3,275		$	(28,759	)	$	23,464
Net income		23,877			25,485			3,275			(28,759	)		23,878
Changes in comprehensive income		(8,720	)		—			—			—			(8,720	)
Comprehensive income	$	15,157		$	25,485		$	3,275		$	(28,759	)	$	15,158

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The following discussion about our exposure to market risks and risk management activities includes forward-looking statements that involve risks and uncertainties, as well as summarizes the financial instruments held by us at September 30, 2024, which are sensitive to changes in commodity prices and foreign exchange rates and are not held for trading purposes. Actual results could differ materially from those projected in the forward-looking statements. In the normal course of business, we also face risks that are either non-financial or non-quantifiable (See Part I, Item 1A. – Risk Factors of our 2023 Form 10-K and Part II, Item 1A - Risk Factors in our Form 10-Q for the quarterly period ended June 30, 2024).

Metals Prices

Changes in the market prices of silver, gold, lead and zinc can significantly affect our profitability and cash flow. Metals prices can and often do fluctuate widely and are affected by numerous factors beyond our control (see Item 1A – Risk Factors – A substantial or extended decline in metals prices would have a material adverse effect on us in our 2023 Form 10-K). We utilize financially-settled forward and put option contracts to manage our exposure to changes in prices for silver, gold, zinc and lead.

Provisional Sales

Sales of all metals products sold directly to customers, including by-product metals, are recorded as revenues when all performance obligations have been completed and the transaction price can be determined or reasonably estimated. For concentrate sales, revenues are generally recorded at the time of shipment at forward prices for the estimated month of settlement. Due to the time elapsed between shipment to the customer and the final settlement with the customer, we must estimate the prices at which sales of our metals will be settled. Previously recorded sales are adjusted to estimated settlement metals prices until final settlement by the customer. Changes in metals prices between shipment and final settlement will result in changes to revenues previously recorded upon shipment. Metals prices can and often do fluctuate widely and are affected by numerous factors beyond our control (see Item 1A – Risk Factors – A substantial or extended decline in metals prices would have a material adverse effect on us in our 2023 Form 10-K). At September 30, 2024, metals contained in concentrate sales and exposed to future price changes totaled 1.5 million ounces of silver, 500 ounces of gold, 22,525 tons of zinc and 51,650 tons of lead. If the price for each metal were to change by 10%, the change in the total value of the concentrates sold would be approximately $21.3 million. As discussed in Note 8 of Notes to Condensed Consolidated Financial Statements (Unaudited), we utilize a program designed and intended to mitigate the risk of negative price adjustments with limited mark-to-market financially-settled forward contracts for our silver, gold, zinc and lead sales.

Commodity-Price Risk Management

See Note 8 of Notes to Condensed Consolidated Financial Statements (Unaudited) for a description of our commodity-price risk management program.

Foreign Currency Risk Management

We operate and have mining interests in Canada, which exposes us to risks associated with fluctuations in the exchange rates between the USD and the CAD. We determined the functional currency for our Canadian operations is the USD. As such, foreign exchange gains and losses associated with the re-measurement of monetary assets and liabilities from CAD to USD are recorded to earnings each period. For the three and nine months ended September 30, 2024, we recognized a net foreign exchange loss of $3.2 million and net foreign exchange gain of $3.4 million, respectively, compared to a net foreign exchange gain of $4.2 million and $0.4 million for the three and nine months ended September 30, 2023, respectively. Foreign currency exchange rates are influenced by a number of factors beyond our control. A 10% change in the exchange rate between the USD and CAD from the rate at September 30, 2024 would have resulted in a change of approximately $7.3 million in our net foreign exchange gain or loss. We do not hedge the remeasurement of monetary assets and liabilities. We do hedge some of our operating and capital costs denominated in CAD.

See Note 9 of Notes to Condensed Consolidated Financial Statements (Unaudited) for a description of our foreign currency risk management program.

Item 4. Controls and Procedures

An evaluation was performed under the supervision and with the participation of our management, including the Interim Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures as required by Securities Exchange Act Rules 13a-15(e) and 15d-15(e) as of the end of the period covered by this report. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures, including controls and procedures designed to ensure that information required to be disclosed by us is accumulated and communicated to our management (including our CEO and CFO), were effective as of September 30, 2024, in assuring them in a timely manner that material information required to be disclosed in this report has been properly recorded, processed, summarized and reported. There were no changes in our internal control over financial reporting during the three months ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Internal control systems, no matter how well designed and operated, have inherent limitations. Therefore, even a system which is determined to be effective cannot provide absolute assurance that all control issues have been detected or prevented. Our systems of internal controls are designed to provide reasonable assurance with respect to financial statement preparation and presentation.

Part II - Other Information

Hecla Mining Company and Subsidiaries

Item 1. Legal Proceedings

For information concerning legal proceedings, refer to Note 11 of Notes to Condensed Consolidated Financial Statements (Unaudited), which is incorporated by reference into this Item 1.

Item 1A. Risk Factors

Item 1A. – Risk Factors of our 2023 Form 10-K set forth information relating to important risks and uncertainties that could materially adversely affect our business, financial condition or operating results.

Item 4. Mine Safety Disclosures

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in exhibit 95 to this Quarterly Report.

Item 5. Other Information

During the three months ended September 30, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits

Hecla Mining Company and Wholly Owned Subsidiaries

Form 10-Q – September 30, 2024

Index to Exhibits


Exhibit Number		Description
10.3*		Amended and Restated Hecla Mining Company Stock Plan for Nonemployee Directors
31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
95*		Mine safety information listed in Section 1503 of the Dodd-Frank Act.
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document. **
101.SCH		Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents **
104		Cover page formatted as Inline XBRL and contained in Exhibit 101 **

* Filed herewith

** XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

(1) Indicates a management contract or compensatory plan or arrangement.

Items 2 and 3 of Part II are not applicable and are omitted from this report.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		HECLA MINING COMPANY
		(Registrant)

Date:	November 7, 2024	By:	/s/ Catherine J. Boggs
			Catherine J. Boggs, Interim President and Chief Executive Officer,
			Director

Date:	November 7, 2024	By:	/s/ Russell D. Lawlar
			Russell D. Lawlar, Senior Vice President,
			Chief Financial Officer