Hecla Mining (HL) Q4 2025 Earnings Call Transcript

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DATE

Wednesday, Feb. 18, 2026 at 10 a.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — Robert L. Krcmarov
• Senior Vice President and Chief Financial Officer — Russell D. Lawlar
• Senior Vice President and Chief Operations Officer — Carlos Aguiar
• Vice President, Strategy and Investor Relations — Mike Parkin
• Vice President, Exploration — Kurt D. Allen
• Vice President, Technical Services — Matt Blattman

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TAKEAWAYS

• Revenue -- $1.4 billion, a company record, driven by core silver asset optimization and high silver prices.
• Net income attributable to shareholders -- $21 million, equivalent to $0.49 per share.
• Adjusted EBITDA -- $670 million, reflecting margin expansion and improved productivity.
• Gross debt -- $276 million, representing a sharp reduction and a gross debt to adjusted EBITDA ratio of 0.4x.
• Net leverage ratio -- Declined from 1.6x to 0.1x, a stated 94% improvement, positioning the company for a debt-free balance sheet in 2026 at current prices.
• Operating cash flow -- $563 million, translating to $310 million in free cash flow, with each mine contributing positively.
• Silver production -- 17 million ounces, meeting the top end of guidance; gold production totaled 150,000 ounces, above guidance.
• Lucky Friday silver output -- 5.3 million ounces, a new all-time high, up nearly 50% in four years, with AISC under $22 per ounce for the year.
• Keno Hill silver output -- Over 3 million ounces produced, achieving first-year profitability and positive free cash flow post-acquisition.
• Greens Creek silver output -- 8.7 million ounces for the year, at the top end of guidance and with AISC under negative $2 per ounce after byproduct credits.
• Fourth quarter revenue -- $439 million, with silver representing 59%; excluding Casa Berardi, anticipated silver mix would rise to about 73%.
• Q4 realized silver price -- Nearly $70 per ounce, exceeding the period average by $14 per ounce; all-in sustaining cost was $18.11 per ounce, delivering a $51 margin.
• Free cash flow in Q4 -- Nearly $135 million on a consolidated basis; all operations were free cash flow positive.
• Casa Berardi divestiture -- Pending sale to Aurizon Gold Corporation, with proceeds intended for debt reduction and redeployment into silver assets.
• Silver revenue exposure -- Post-Casa Berardi sale, projected to be 73% of total, the highest among multi-asset silver peers.
• Exploration investment -- $45 million to $55 million planned in 2026, mainly focused on Nevada and near-mine programs.
• Mine-level Q4 performance -- Greens Creek produced 2 million ounces silver with AISC under $3 per ounce after byproducts; Lucky Friday generated 1.3 million ounces with AISC under $26 per ounce; Keno Hill produced 597,000 ounces.
• Safety performance -- Total reportable injury frequency rate improved 13% year over year, reaching 1.69.
• 2026 production guidance -- Silver output expected at 15.1 million to 16.5 million ounces, with Greens Creek guidance at 7.5 million to 8.1 million ounces and Lucky Friday at 4.7 million to 5.2 million ounces.
• Project pipeline -- Surface cooling at Lucky Friday 79% complete, on schedule for mid-2026; Aurora received FONSI, enabling major exploration in 2026; Keno Hill advancement supports path to nameplate 440 tpd throughput.
• Reserve life updates -- Greens Creek added 3.7 million ounces from model updates, replaced 9.5 million ounces mined, and grew reserves net by 2.4 million ounces; Lucky Friday nearly replaced reserves despite record production, with 40.5 million ounces in measured and indicated resources beyond reserves.
• Capital allocation -- Management affirmed a disciplined six-pillar framework, prioritizing safety, asset reinvestment, exploration for organic growth, deleveraging, strategic investments, and shareholder returns based on strict ROIC criteria.

SUMMARY

Hecla Mining Company (NYSE:HL) reported multiple records in revenue, profitability, cash flow, and operational metrics, enabled by core silver asset performance and disciplined capital management. Strong deleveraging reduced both gross and net leverage ratios to low levels, while free cash flow surged and cash on hand grew ninefold year over year. Leadership underscored their ongoing strategic transition to a pure-play silver model, anchored by the Casa Berardi sale and resulting in silver comprising a projected 73% of total revenues post-transaction. The company outlined a pathway to 20 million ounces of annual silver production in the medium term through internal growth at Keno Hill, optimization at Lucky Friday, and potential restarts at Nevada operations. Exploration efforts remain highly focused on Nevada and organic mine-life expansion, with near-term strategic investments and further business development positioned to reinforce the silver growth pipeline.

• The pending Casa Berardi transaction is structured to retain all pre-closing cash flows for Hecla and will result in a reported accounting loss due to carrying value, as the CFO stated, "the carrying value is likely going to be a bit higher than that. But."
• Management indicated that year-over-year AISC increases at Lucky Friday are driven by higher profit-sharing payments tied to profitability, with no underlying operational cost deterioration.
• At Midas, management confirmed the permitted processing capacity is 1,200 tonnes per day (450,000 tonnes per year), and stated the strategic goal is to advance resource delineation and technical studies in parallel for potential restart decisions.
• The CEO directly addressed external growth, noting, "It is very much on my mind that we need to continue to grow our silver portfolio," with a new business group and targeted project-generation mandate already under way.

INDUSTRY GLOSSARY

• AISC (All-in Sustaining Cost): Comprehensive metric aggregating total mining costs per ounce, including operating expenses, sustaining capital, and related overhead, offset by byproduct revenues.
• FONSI (Finding of No Significant Impact): U.S. federal regulatory determination that permits a project to proceed, confirming no significant environmental impact arises from proposed activities.
• TRIFR (Total Reportable Injury Frequency Rate): Industry-standard safety measure expressing injury incidents per unit of hours worked, typically per million hours.
• t/d (tonnes per day): Unit of daily ore processing or production throughput capacity at a mining facility.

Full Conference Call Transcript

Mike Parkin: fourth quarter and full year 2025 results conference call. I am Mike Parkin, Vice President, Strategy and Investor Relations. Our earnings release that was issued yesterday along with today's presentation are available on our website. On the call today with us is Robert L. Krcmarov, President and Chief Executive Officer; Russell D. Lawlar, Senior Vice President and Chief Financial Officer; Carlos Aguiar, Senior Vice President and Chief Operations Officer; Kurt D. Allen, Vice President, Exploration; Matt Blattman, Vice President, Technical Services; as well as other members of our management team. At the conclusion of our prepared remarks, we will all be available to answer questions. Turning to slide two, cautionary statements.

Any forward-looking statements made today by the management team come under the Private Securities Litigation Reform Act and involve risks as shown on slide two, in our earnings release, and in our 10-Ks filings with the SEC. These and other risks could cause results to differ from those projected in the forward-looking statements. Non-GAAP measures cited in this call and related slides are reconciled in the slides or the news release. I will now pass the call over to Robert.

Robert L. Krcmarov: Thank you, Mike, and good morning, everyone.

Mike Parkin: Turning to slide three. 2025 was a transformational year for Hecla.

Robert L. Krcmarov: One marked by disciplined execution and strategic clarity.

Mike Parkin: Hundred and thirty five year legacy is the oldest

Robert L. Krcmarov: company on the New York Stock Exchange is our foundation, but it is not our destination. What drives us forward is our clear, compelling strategy to become, and be recognized as, the premier silver company in North America. So let me walk you through how we are executing against this strategy. Our foundation relates on three critical pillars. First, legacy and longevity. At 135 years old, we are the oldest mining company on the NYSE. We have protected value through market cycles for over a century. Second, top two jurisdictions.

All of our mines and projects, from Greens Creek in Alaska to Lucky Friday in Idaho to Keno Hill in the Yukon to Midas in Nevada, operate in the best and safest mining jurisdictions in North America. This jurisdictional advantage is a competitive advantage that protects our cash flows, reduces our risk profile, and safeguards our license to operate. Third, silver focused. We made a deliberate choice to build peer-leading silver exposure in both our revenue mix and our reserve base. While we produce gold, lead, zinc, and copper as important byproducts, silver is the strategic anchor of our business.

Our strategy delivers four key outcomes: portfolio value surfacing—we are actively managing our portfolio, retaining and investing in our world-class silver assets, and strategically divesting noncore assets. The pending sale of Casa Berardi, which we announced last month, is an example of this disciplined approach to capital allocation. It was a difficult decision, but one that, fundamentally as a silver company, we had to make. Operational excellence.

Mike Parkin: We

Robert L. Krcmarov: relentlessly focused on core asset optimization and execution, not at the expense of safety or sustainability. They are the foundation of everything we do, and key drivers of productivity, not a compliance exercise. Investment discipline. This is the new Hecla. We utilize strict capital discipline with target ROIC thresholds to guide us in our path forward. Every dollar we deploy is intended to generate returns for our shareholders. And finally, organic growth. Through disciplined exploration programs, we are surfacing value for shareholders, and I think our recent Nevada exploration demonstrates this approach. We are working to discover and build the next generation of production from assets that we already own. The strategy is not abstract.

It is delivering tangible results, as you will see on the next slide. So moving to slide four, 2025 was a transformational year for Hecla. On the financial front, we delivered records: record revenue at $1,400,000,000; record profitability, net income applicable to shareholders of $21,000,000, or $0.49 per share; record adjusted EBITDA of $670,000,000. But the headline number that matters most is what these records enabled, which is substantial deleveraging and balance sheet transformation. Our total debt has declined to just $276,000,000, our gross debt to adjusted EBITDA ratio 0.4x. We generated operating cash flow of $563,000,000, which translated to $310,000,000 in free cash flow, with each mine generating positive free cash flow last year.

On the operational front, we executed well: hit our top end of silver production guidance at 17,000,000 ounces, exceeded our gold production guidance with 150,000 ounces produced. Lucky Friday delivered a record 5,300,000 of silver production, exceeding the top end of the guidance range. It was as recently as 2021 that Lucky Friday was producing 3,600,000 ounces, nearly a 50% increase in just four years. Keno Hill achieved new record production of over 3,000,000 while achieving first-year profitability and positive free cash flow under Hecla ownership. Our Lucky Friday surface cooling project is 79% complete and on track for mid-2026 completion.

That is a critical investment in the health and safety of our workforce and a key milestone as we work toward making Lucky Friday a zero-discharge facility. And we received our Finding of No Significant Impact, or FONSI, at Aurora, which is a major permitting milestone allowing us to kick off exploration activities this year at this historic, very high-grade gold-silver past producer in western Nevada. Turning to slide five. Now I want to talk about the pending sale of Casa Berardi to Aurizon Gold Corporation. This transaction represents portfolio optimization in action. Casa Berardi is a gold mine in a tier one jurisdiction. It has a nice future. It has had a nice run with us.

Its mid-range mine plan is for a gold miner, someone with a different schedule than us. So we plan to redirect capital and management focus towards our silver assets. We still have upside exposure with a 10% stake in OreZone. Why does this matter strategically? Well, there are four reasons. First is strategic portfolio optimization. We are sharpening our focus. Capital that was tied up in gold would now flow towards silver assets with superior economics and longer reserve life. Second is the enhanced market position.

Upon closing, Hecla should be recognized unambiguously as the premier North American silver mining company, so silver would represent about 73% of our consolidated revenues, the highest silver revenue exposure among all our multi-asset mining peers, with all our operating mines in the best jurisdictions. Third, strengthened balance sheet. We plan to use cash proceeds towards debt reduction and enhanced financial flexibility. This positions us to a debt-free balance sheet with prices sustaining or better. Fourth is value maximization. We maintain exposure to Casa Berardi’s upside through our OreZone shares, with OreZone well positioned to extract additional value from the asset given their focus and expertise in gold. I think this is sophisticated capital allocation.

This is how we maximize shareholder returns. So now I will pass the call over to Russell. Thank you, Rob. As we turn to slide 11,

Russell D. Lawlar: let me take you through our financial scorecard because the numbers tell a compelling story of transformation. On balance sheet strength, our gross leverage ratio improved to 75% from 1.6 times in 2024 to 0.4 times in 2025, while our net leverage ratio

Russell D. Lawlar: 94% from 1.6 times to 0.1 times.

Russell D. Lawlar: And at current metal prices, we are positioned to achieve a debt-free balance

Mike Parkin: sheet within 2026.

Russell D. Lawlar: This balance sheet transformation has set the company up for future growth.

Russell D. Lawlar: With a substantial reduction to risk.

Russell D. Lawlar: On margin and return generation, our silver all-in sustaining cost per ounce margin improved from 54% in 2024 to 75% in 2025. This reflects both strong realized prices and disciplined cost management.

Russell D. Lawlar: And our free cash flow surged from $4,000,000 last

Russell D. Lawlar: year to $310,000,000 this year. While our return on invested capital improved three times from 4% to 12%, we are now generating returns well above our cost of capital. These changes all sum up to cash on our balance sheet increasing ninefold from $27,000,000 coming into the year to $242,000,000 coming out of the year. This represents a complete transformation from a leveraged balance sheet to a position of financial strength in a single year. As we turn to slide eight, I will walk through some of the details from the fourth quarter because they show sustained momentum and operational consistency. During the fourth quarter, we generated $439,000,000 in revenue. Silver accounted for 59% of that total.

Notably, excluding Casa Berardi, our silver exposure is expected to increase to approximately 73%, which would provide the highest silver exposure among our peer group, not to mention jurisdictional profile or other unique attributes. Our realized silver price in the fourth quarter was nearly $70 per ounce, beating the quarterly average by over $14 per ounce. Our all-in sustaining cost was $18.11 per ounce, putting our silver margin at $51 per ounce, or 74% of the realized price.

Russell D. Lawlar: This is exceptional profitability. Our adjusted EBITDA was $670,000,000 in 2025, which, coupled with gross debt deleveraging, improved our net leverage ratio from 0.3 times last quarter to 0.1 times this quarter, demonstrating the momentum in our deleveraging trajectory.

Russell D. Lawlar: We generated almost $135,000,000 in free cash flow on a consolidated basis during the quarter, and all our operations contributed positively. This excellent quarter and the resulting cash flow is due to better pricing, but also executing on a variety of strategic initiatives across all our assets. As we turn to slide nine, the bar chart here illustrates our projected cash flows

Russell D. Lawlar: across a range of silver and gold price scenarios.

Russell D. Lawlar: As we discussed during our investor day, Hecla has among the best leverage to silver prices compared to peers, which could improve upon closing of the Casa Berardi sale.

Russell D. Lawlar: This analysis on the slide assumes the Casa Berardi sale is completed, and at $75 silver and $4,500 gold, we forecast cash flows of about $600,000,000. But this grows to about $850,000,000 at $100 silver and $5,500 gold. Based on our forecast at these metal price scenarios, we estimate nearly 70% of our revenue would be tied to silver sales, which is an industry best.

Russell D. Lawlar: Turning to slide 10, I want to continue to emphasize our capital allocation framework because it is central to how we create shareholder value. We shared this framework over the recent months, and it guides every decision we make at Hecla. We maintain an unwavering commitment to six key pillars in priority order.

Mike Parkin: First,

Mike Parkin: safety and environmental excellence, which is first and foremost.

Russell D. Lawlar: Second, sustaining and growth capital maintains our asset base, de-risking our assets, providing a solid base to build from as we provide high-returning organic growth.

Mike Parkin: On exploration, it provides

Russell D. Lawlar: asymmetric potential returns that is critical in the long-term strategy of any mining company. As we think about deleveraging and strengthening of our balance sheet, this provides financial resilience and flexibility and ensures ability to invest when opportunities arise.

Mike Parkin: We think about strategic investments, whether internal or external, will be guided by our predetermined return on investment criteria. And lastly, as we think about shareholder returns, we will look to return additional capital

Russell D. Lawlar: to shareholders when appropriate, with a focus on maintaining strict return on investment criteria. This framework ensures disciplined decision-making aligned with long-term value creation. I will now turn the call to Carlos.

Carlos Aguiar: Thank you, Russell. Turning to slide 12, before we move to asset-by-asset operational results, I want to start with what matters most. Operational excellence begins with safety. Our 2025 total reportable injury frequency rate was 1.69, which is a 13% reduction year over year. This single-year improvement reflects a multiyear effort of systematically driving down our TRIFR through dedicated focus on keeping our employees and contractors safe.

Carlos Aguiar: This is not luck. It is culture, systems, and commitment.

Carlos Aguiar: And it matters because safe mines are productive mines. In 2024, we reaffirmed our commitment to safety values through a company-wide Safety Day and the rollout of Safety 365: Work Safe, Home Safe. In 2025, we focused intensively on the specific drivers of incidents. And in 2026, we are implementing a four-fatality prevention program alongside continued improvement of all safety systems.

Carlos Aguiar: Moving to slide 13,

Carlos Aguiar: let me walk through our three operating timber mines. Starting with Greens Creek, our flagship, world-class, low-cost silver mine in Alaska that has been in production for over 35 years and is expected to continue delivering exceptional economics for many years to come. In Q4, Greens Creek produced 2,000,000 ounces of silver with AISC of under $3 per ounce after byproduct credits, generating $102,000,000 in operating cash flow

Carlos Aguiar: and nearly $80,000,000 in free cash flow.

Carlos Aguiar: For the full year 2025, Greens Creek delivered 8,700,000 ounces of silver at the top end of guidance, with AISC of under negative $2 per ounce after byproduct credits. For 2026, we are projecting 7.5 to 8,100,000 ounces of silver and 51,000 to 55,000 ounces of gold, with AISC guided to nearly zero after byproduct credits. This is a testament to the extraordinary economics of this asset.

Carlos Aguiar: What is remarkable about Greens Creek is the longevity

Carlos Aguiar: the longevity of the resource base. We had a 12-year reserve mine plan. Through ongoing exploration success, we see a pathway of sustained reserve replacement well beyond that timeframe. That is why we are investing today in tailings facility capacity, building out capacity through 2045. When this mine started 35 years ago, it had a 10-year mine life. Today, 12 years of reserves ahead plus significant resources we are actively working to convert to reserves. Greens Creek is a mine in a tier one jurisdiction with world-class economics. It is the cornerstone of our portfolio.

Turning to slide 14, Lucky Friday is our primary silver mine in Idaho, a deep underground operation with a 15-year reserve mine plan producing consistent high-grade silver ore. I am extremely excited about this mine. I spent 10 years working in that place.

Carlos Aguiar: In Q4, Lucky Friday produced 1,300,000 ounces of silver with AISC under $26 per ounce after byproduct credits,

Carlos Aguiar: generating $57,000,000 in operating cash flow and over $33,000,000 in free cash flow. For the full year 2025, the mine delivered record production of 5,300,000 ounces of silver, exceeding the top end of guidance, with AISC of under $22 per ounce after byproduct credits. For 2026, we are guiding to 4.7 to 5,200,000 ounces of silver production with AISC of $23.15 to $26 per ounce after byproduct

Carlos Aguiar: credits.

Carlos Aguiar: The expected year-over-year increase in AISC reflects higher profit-sharing payments to our workforce. This is a good thing. These payments are tied directly to profitability, which we expect to remain strong given the current metal prices. A key near-term project at Lucky Friday is a surface cooling project, which is 79% complete and on track for completion by mid-2026, which will significantly improve underground health and safety. Turning to slide 15, here is a transformation story. Hecla acquired Keno Hill in 2022, and last year,

Carlos Aguiar: the mine achieved its first full year of profitability and positive free cash flow generation. This is a significant milestone.

Carlos Aguiar: In Q4, Keno Hill produced 597,000 ounces of silver, generating $33,000,000 in operating cash flow

Carlos Aguiar: and over $17,000,000 in free cash flow. For the full year 2025, we exceeded 3,000,000 ounces, a new production record and above the top end of guidance. For 2026, we are guiding to 2.9 to 3,200,000 ounces of silver production with capital investment of $61,000,000 to $66,000,000 as we continue to advance toward steady-state operations. What is exceptional about Keno Hill is the current profitability while still ramping to its nameplate capacity. As we reach the planned throughput rate of 440 tons per day, we are modeling robust positive free cash flow generation potential across a wide range of silver prices, as you can see in the bar chart on this slide.

Keno Hill represents the optionality and upside within our portfolio. I will now hand it over to Kurt to discuss exploration.

Kurt D. Allen: Thanks, Carlos. Moving to slide 17. Our exploration strategy is straightforward: discover and develop the next generation of production from within our existing portfolio of high-quality projects. Moving to slide 18, our primary growth engine is the Nevada platform. At Midas, recent drilling returned outstanding results, including 6.1 feet at 0.46 ounces per ton gold and 0.93 ounces per ton silver at Center Offset, and 2.2 feet at 0.95 ounces per ton gold and 0.6 ounces per ton silver at Pogo. These confirm high-grade mineralization and support a potential near-term production restart with existing mill infrastructure on-site. Aurora achieved a major milestone, receiving our FONSI from the U.S.

Forest Service, clearing a path for 2026 exploration at this historic high-grade gold-silver producer. Regarding mine life extension, Greens Creek definition drilling delivered. We added 3,700,000 silver ounces through model updates, replaced 9,500,000 ounces depleted through mining, and grew the reserves by 2,400,000 ounces net. With a 12-year reserve life and 88,700,000 silver ounces in measured and indicated resources, Greens Creek continues to demonstrate longevity,

Kurt D. Allen: potential.

Kurt D. Allen: Lucky Friday nearly replaced reserves, reducing only 200,000 silver ounces during a record 5,300,000 silver ounce production year, and with 40,500,000 ounces of measured and indicated resources beyond reserves providing a clear runway for continued reserve replacement. Now we are investing $45,000,000 to $55,000,000 in 2026 exploration, heavily weighted towards Nevada and near-mine opportunities. This directly supports achieving greater than 100% reserve replacement and building the pipeline to drive us toward 20,000,000 ounces annually. We are discovering high-grade mineralization on lands we control, in jurisdictions we understand, with infrastructure often already in place. Organic growth has superior economics. I will now turn the call back to Rob.

Robert L. Krcmarov: Thank you, Kurt. Let me now address our medium-term outlook because it shows the depth of optionality that is within our portfolio. Our 2026 silver production outlook calls for 15.1 to 16,500,000 ounces. But as we have shown recently at our Investor Day, we have a credible pathway to 20,000,000 ounces over the medium term. We have multiple projects that could drive us towards that 20,000,000-ounce target. First, continued ramp-up of Keno Hill to the permanent capacity of 440 tonnes per day could drive meaningful production growth from current levels. Second, the potential modest production restart that Kurt just spoke about. Midas is an exceptional gold and silver project in Nevada that Hecla operated historically.

As Kurt pointed out, we have the mill infrastructure in place, and we are currently advancing exploration at Midas with exceptional drill results that we just spoke about, and that supports greater exploration investment in the project this year. A development decision on Midas could add meaningful gold and silver production over the medium to the longer term at low capital intensity, representing a potential significant value surfacing opportunity. The upside does not end there. Touching on just a couple of our other projects, we see potential to optimize Lucky Friday even further from the current record production levels it has been achieving.

At Greens Creek, we have identified the potential for reprocessing of the historic dry stack tailings to extract value from the significant metals contained within. These are projects within our control, within our existing portfolio—projects that offer the potential for significant value creation that we do not need to execute expensive M&A to own. That is why we believe 20,000,000 ounces of silver production over the medium term is achievable with further upside potential over the long term.

So what we have presented today is a company in transformation, a company that has moved from financially leveraged and free cash flow constrained into one with a robust balance sheet, strong cash generation, and the financial flexibility to invest in our project pipeline to surface value for shareholders over the long term. We are executing operationally at the highest level across our entire portfolio. We are maintaining strict capital allocation discipline across all six pillars of our framework. We are strategically focused on becoming the premier North American silver producer, and we have multiple near-term and medium-term growth projects within our existing asset base. 2025 was a year of multiple records. 2026 and beyond present exceptional opportunities.

We are executing our strategy with precision, and we are confident in delivering sustainable shareholder value. Thank you. We will now open for questions.

Operator: Ladies and gentlemen, we will now begin the question and answer session. One moment please for your first question. Your first question comes from the line of Heiko Felix Ihle of H.C. Wainwright. Please go ahead.

Heiko Felix Ihle: Hey, Rob and team. Nice to see all of you guys in New York City a couple of weeks ago.

Robert L. Krcmarov: Likewise.

Operator: Exploration at Keno Hill, anything you have seen there that was maybe a bit unexpected?

Heiko Felix Ihle: Unexpected, better or worse than, you know, internal plans so far this year? And building on all of that, the costs, the ongoing costs of exploration, you know, for per meter, so far this year, how has pricing been, and what are you sort of modeling out for the remainder of the year, please? Yeah. Our I guess, things that we have seen that

Operator: that

Heiko Felix Ihle: in the exploration from 2025, I mean, we have intercepted what we think is a new high-grade ore chute off the deep Birmingham, and it is open for expansion. And that is going to be one of our focuses this year, as well as drilling around

Robert L. Krcmarov: the

Heiko Felix Ihle: the rest of the Birmingham and the Flame and Moth. Now our budget for Keno Hill this year is $13,000,000. The direct drilling costs, I think, are on the order of $180 to $190 U.S. I will have to check that number, though, Heiko, and get back to you. The exploration potential there is quite, quite spectacular.

Robert L. Krcmarov: Fair.

Heiko Felix Ihle: And then just one quick clarification before I go back in the queue. On Casa, and I went through the press release that you guys issued earlier today again. Just to be clear, you are getting all cash flows from Casa through the closing date, correct? There will not be any backdating or anything. I mean, with gold above $5,000 again as of today, obviously, there is real money to be made every single hour.

Robert L. Krcmarov: Yeah. Heiko, that is right. We will get cash flows through closing, and then, you know, obviously, then the structure of the deal will bring further cash flows.

Operator: Yep. Yep. Got it. Perfect. Thank you guys very much. I will get back in queue. Thank you. Your next question comes from the line of Cosmos Chiu of CIBC. Please go ahead. Hi. Thanks, Rob and team. Maybe my first question is an accounting question.

Cosmos Chiu: Again, on Casa Berardi. I am just wondering about the accounting sort of treatment, accounting impact that could come from Casa. I realized, or I kind of looked at the costs for Q1, your guidance, gold cost guidance, and I saw that it is actually higher. Now, it is only one quarter’s worth of Casa. So does that feed into your earnings? How does that impact earnings? And the second part is, will you be looking to book some type of gain on the transaction? I forget what the book value might be. And then overall, what is the timing of some of these accounting transactions? So we can—so Cosmos, a couple of things here.

First, in terms of the guidance, we took an estimate through the first quarter. So we expect we will close the deal sometime in the first quarter. So we just took a full first quarter versus production, estimated costs, that kind of thing. I will say in January, there was

Russell D. Lawlar: significant weather in eastern Canada. I think you probably saw some of that in Toronto. And as a result, January’s production was a bit lower than estimated. But since we only have a quarter

Cosmos Chiu: of

Russell D. Lawlar: of a year, essentially, we just did not have the time to recoup that production. So that is why you see the cost on a per-ounce basis is higher.

Cosmos Chiu: And then as we think about the recording of the transaction—so that will flow through our financials through closing. In Q1, we would anticipate

Russell D. Lawlar: Casa Berardi would be held for sale. That essentially kind of comes out of the core part of our financial statements. But you will still see in the net income line the impact of Casa’s operations through closing.

Cosmos Chiu: It is just separated, right? Yep.

Russell D. Lawlar: And I am trying to—there are a few other things in there. You know, as we think about the

Cosmos Chiu: value of the transaction, we—obviously there is a portion of that which is deferred and contingent. So we have to go through a fair value process to book the

Russell D. Lawlar: you know, kind of estimated fair value of that, and then we will compare that to the carrying value.

Cosmos Chiu: I would actually expect we will see some type of a loss on the transaction versus a

Russell D. Lawlar: gain, just because the carrying value is likely going to be a bit higher than that. But we are working through that process now. So, you know, I will not speculate or try to tell you what that might be. And tell me if I marked up all your questions. I may have missed one. Okay. Great. And so likely, it is going to be a Q1—if it closes in Q1, it will be a Q1 accounting transaction. And I am sure you will give us some kind of guidance ahead of it.

Russell D. Lawlar: Yeah. That is right. And, you know, obviously, we guided production and costs such that you all have the information needed to kind of see what the ongoing cash flows and that type of thing you would expect to see from Casa.

Cosmos Chiu: Mhmm. Right. And then maybe my second question is on strategy. And, Rob, it is good to hear that you are going to be, you know, silver-focused, looking to be the premier silver company, and looking to, you know, redeploy some of those proceeds coming from Casa into growing your silver portfolio. But, again, I guess my question is, if I look at your exploration budget, a big chunk of it is heading to Nevada, which is more gold rich. You do have, you know, some longer-term exploration assets, including in the Silver Valley, also San Juan Silver. But that is, again, longer dated.

So I guess my question is if you can, you know, walk us through your thinking behind how you can continue to grow your silver production, your silver focus, and, you know, do you need to look externally? And I think you answered that question, but I will ask it again. Do you need to look externally to really unlock the full silver potential of Hecla?

Robert L. Krcmarov: Yeah. Thanks for the question, Cosmos. It is very much on my mind that we need to continue to grow our silver portfolio. Now one of the things is while we have been focused on divesting a few assets and potentially farming out some—more to come—we need to bring new projects into the pipeline, and so I have tasked Kurt with establishing a project generation and a new business—let us call it a new business group—which is what I had when I was at my previous company.

And their task is to get us into some new silver districts early on, monitor competitor intelligence, particularly in the juniors space where we can potentially spot some emerging new discoveries and try and partner up with those. On M&A, it is obviously something that we will continue to consider going forward. But, obviously, there is a scarcity of silver-producing assets. And, you know, I have spoken about, you know, our criteria at our Investor Day, what is going to drive some of that. So yes, I am very aware that we need to replenish the pipeline, and Kurt has recruited someone just recently, actually, with a lot of experience

Kurt D. Allen: Yes. Yes. We have got a recruit in. He is quite experienced, so it will be good with the program going forward.

Cosmos Chiu: Yep. Great. Kurt, quite the task. Thanks, Rob and Russell and Kurt and team. Those are all the questions I have. Thanks again.

Robert L. Krcmarov: Alright. Thank you.

Operator: Your next question comes from the line of Alexander Terentiew of National Bank. Please go ahead.

Alexander Terentiew: Hi, guys. Just a couple of questions from me. First, on Lucky Friday. Your cooling—surface cooling project should be done, as you are saying here, midyear.

Alexander Terentiew: I am just wondering, kind of longer term with this project being completed, opportunities to reduce cost here—how does this kind of factor into the long-term plan? I mean, Rob, you made a comment about optimizing Lucky Friday as another venue, potential upside longer term. So just kind of wondering how this project factors into the longer-term potential of the mine.

Robert L. Krcmarov: Yeah. Thanks for the question, Alex. The surface cooling project should be done by about midyear. It is primarily driven for, I guess, health and safety reasons—for the well-being of our workers. We are obviously deep at Lucky Friday. It is a hot mine, and so as we go into successively deeper levels, bearing in mind that we have a long, long mine life here—we still have many levels to develop ahead of us—this is really setting the foundation for the future. But the other thing I would ask you to consider is that, obviously, when workers are comfortable, they are generally more productive, and so that could have an impact.

The other thing I spoke about on our Investor Day is that even though we broke successive records in throughput at Lucky Friday, our GM there, Chris Neville, still believes that he might be able to wring some more out of that. Anything you want to add, Carlos? On that? Yeah. And it is part of the optimization plan, right? We have a different effect

Carlos Aguiar: where

Alexander Terentiew: we have continuous improvement and, you know, the hoisting

Carlos Aguiar: capacity and, you know, securing the areas in the deep underground, this is the cooling system.

Alexander Terentiew: So it is

Robert L. Krcmarov: we said it in New York, right? The best decade of Lucky Friday is the

Carlos Aguiar: ahead of us because we have plenty of opportunities going up.

Robert L. Krcmarov: You know, an order

Alexander Terentiew: proportion of production. Yeah. Makes sense. Okay. Thanks.

Alexander Terentiew: Another question just on Midas. Obviously, the stuff you guys have going on there in Nevada is pretty exciting. I mean, you have got the good infrastructure, some really high-grade intercepts. I know this is a—you know, I would not call it long term, but a longer-term plan anyway. Can you just kind of remind me or refresh me, over the next one to two years, what can we expect to see there in terms of your guys’ plans to move that forward?

Robert L. Krcmarov: So a lot of it hinges on building up a critical mass of high-grade resources to get it back into construction. Again, just to recap, we have got the mill, we have got the tailings dam. We have some new discoveries. At where one of the new discoveries is, there is a resource that was discovered roughly four years ago, I guess. It is somewhere around 180,000 to 200,000 ounces at well above the historic Midas production grade. So that is the head start that we have. Now four years ago, when that was discovered, the drilling came up against a fault. Across the other side of the fault, there was no mineralization.

And so the groundwork that was laid over the last couple of years has basically identified where the offset has gone, and now we have picked up the scent again and are starting to drill mineralization. And, you know, I guess the starting resource—we are not talking about a million ounces to get this thing going. We are talking about 300,000 to 400,000 ounces. So we are already a significant portion of the way there. And really, the focus this year is going to be on exploration. At the same time, we will do some studies. Matt, maybe you can talk about that.

Matt Blattman: Yeah. I mean, this is out in the—

Matt Blattman: the discoveries are out in an area that has very little historic mining. So we have got to collect data on the geotechnical side, the metallurgical performance, and hydrogeologic. Everything in mining is about water, ultimately, so we need to collect that information. So in order to fast track this, we are going to be collecting that data and doing studies in parallel with that exploration, so as soon as we have a resource model, we can start doing more technical feasibility work

Robert L. Krcmarov: and at some point we will appoint a dedicated project manager to that. We are planning on success here.

Matt Blattman: Yeah. Okay. Sounds good. Thank you.

Robert L. Krcmarov: Thanks, Alex.

Operator: The next question comes from the line of John Tumazos of John Tumazos Very Independent Research.

Operator: Please go ahead.

John Tumazos: Thank you very much.

Operator: Could you

John Tumazos: refresh us on the capacity, tons per day, of the Midas mill, what you think the initial throughput would be, whether you can fill it up,

Matt Blattman: and whether the grades would compare to

John Tumazos: back in the heyday, something like 10 grams gold,

Matt Blattman: 10 ounces silver per ton.

Robert L. Krcmarov: It was—I think it was 1,200 tonnes per day is the permitted capacity of the Midas mill.

Matt Blattman: That is right. The permit is 450,000 tonnes a year, which works out to about 1,200 tons a day.

Robert L. Krcmarov: Yep. Sorry. What was the second part of your question, John? I will—

John Tumazos: How many tons per day do you think

John Tumazos: you are going to put through it? And what might the grades be? In the old days, it was something like 10 grams gold, 10 ounces silver.

Robert L. Krcmarov: I think it is too early to say, John. I mean, we are in the early—we need to pin down a more robust resource. The historic grades—you are right. It was 0.4 ounces per ton, so roughly 12 to 13 grams per ton, and significant silver as well, actually.

John Tumazos: Super. Nothing like catching up with an old friend.

Robert L. Krcmarov: Good to hear from you, John.

Operator: There are no further questions at this time. And with that, I will now turn the call over to Robert L. Krcmarov, CEO, for closing remarks. Please go ahead.

Robert L. Krcmarov: Well, thank you all for your thoughtful questions and your continued interest and support of Hecla. 2025 was a genuine year of transformation—financially, operationally, and strategically. And so we enter this year with a stronger balance sheet, a sharper focus, and what we believe is the most compelling silver portfolio in North America. We have a lot of work ahead of us. We know that, and we are looking forward to it. We will talk again at Q1. Thank you, everyone. Have a great day.

Operator: Ladies and gentlemen, this concludes today's call. We thank you for participating. You may now disconnect your lines.

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