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HECLA MINING CO/DE/ (HL)·Q2 2025 Earnings Summary

Executive Summary

  • Record quarter: revenue $304.0M (+16% q/q), gross profit $119.5M (+62% q/q), Adjusted EBITDA $132.5M (+46% q/q), and free cash flow $103.8M; EPS $0.09 diluted .
  • Strong beats vs S&P Global consensus: revenue $304.0M vs $257.7M*, EPS $0.09 vs $0.054*, and EBITDA $132.5M vs $76.4M*; driven by higher realized silver ($34.82/oz) and gold ($3,314/oz) prices and higher precious metals volumes .
  • Balance sheet actions: ATM equity proceeds and free cash used to repay CAD$50M IQ notes and to fund partial redemption notice for $212M of 7.25% Senior Notes (expected Aug-19), cutting annual interest expense by ~$17.8M; net leverage fell to 0.7x LTM Adjusted EBITDA .
  • Guidance improved: consolidated gold production raised to 126–137 koz; consolidated silver cash cost/AISC lowered; Greens Creek gold guidance raised and cost guidance materially lowered; Lucky Friday and Casa Berardi maintained .
  • Catalysts: Keno Hill’s first positive free cash flow quarter and pathway to 440 tpd, Casa Berardi strategic review update “in the coming weeks,” and debt redemption completion; Q3 seasonality and planned maintenance imply near-term production/cost mix effects .

Values retrieved from S&P Global. All S&P values are marked with an asterisk (*).

What Went Well and What Went Wrong

What Went Well

  • “Record quarterly revenue: $304.0 million” and “Record Adjusted EBITDA: $132.5 million,” “record quarterly free cash flow of $103.8 million,” with cash from operations $161.8M; mines delivered silver +10% q/q and gold +34% q/q production .
  • CEO: “We generated record sales of $304 million, record free cash flow of $103.8 million, and record Adjusted EBITDA of $132.5 million, while dramatically improving our net leverage to 0.7x... Lucky Friday achieving a new milling record” .
  • Greens Creek cost/outlook improved with negative silver cash costs ($11.91/oz) and AISC ($8.19/oz) after credits; gold guidance raised and per-ounce cost guidance lowered for the mine .

What Went Wrong

  • Taxes and FX: income/mining tax provision up $16.4M; foreign exchange loss up $3.2M; exploration/pre-development expense +$4.3M q/q .
  • Lucky Friday costs remain elevated vs peers: silver cash cost $6.19/oz and AISC $19.07/oz despite strong throughput; management addressing contractor reliance and cost controls .
  • Keno Hill still below nameplate throughput (294 tpd) and only modest gross profit ($0.24M), with power curtailments expected to reduce Q3 output by ~90k oz; production ramp and permitting remain gating factors .

Financial Results

Consolidated P&L and Margins vs Prior Periods and Estimates

MetricQ2 2024 (oldest)Q4 2024Q1 2025Q2 2025 (newest)
Revenue/Sales ($M)$245.7 $249.7 $261.3 $304.0
Gross Profit ($M)$51.4 $68.3 $74.0 $119.5
Gross Margin (%)21.0% (51.4/245.7) 27.4% (68.3/249.7) 28.3% (74.0/261.3) 39.3% (119.5/304.0)
Diluted EPS ($)$0.04 $0.02 $0.05 $0.09
Adjusted EBITDA ($M)$90.9 $86.6 $90.8 $132.5
Adjusted EBITDA Margin (%)37.0% (90.9/245.7) 34.7% (86.6/249.7) 34.7% (90.8/261.3) 43.6% (132.5/304.0)
Revenue vs Consensus ($M)———$304.0 vs $257.7*
EPS vs Consensus ($)———$0.09 vs $0.054*
EBITDA vs Consensus ($M)———$132.5 vs $76.4*

Values retrieved from S&P Global. All S&P values are marked with an asterisk (*).

Segment Breakdown – Q2 2025

SegmentSales ($M)Gross Profit ($M)Silver Produced (Moz)Gold Produced (koz)
Greens Creek (AK)$122.0 $63.1 2.423 17.75
Lucky Friday (ID)$64.3 $22.0 1.341 —
Keno Hill (YT)$26.1 $0.24 0.751 —
Casa Berardi (QC)$85.0 $34.2 —28.15
Consolidated$304.0 $119.5 4.521 45.895

Operational KPIs – Consolidated

KPIQ2 2024Q4 2024Q1 2025Q2 2025
Silver produced (Moz)4.458 3.874 4.112 4.521
Gold produced (koz)37.324 35.727 34.232 45.895
Silver cash cost ($/oz, after credits)$2.08 $(0.27) $1.29 $(5.46)
Silver AISC ($/oz, after credits)$12.54 $11.51 $11.91 $5.19
Gold cash cost ($/oz, after credits)$1,701 $1,936 $2,195 $1,578
Gold AISC ($/oz, after credits)$1,825 $2,203 $2,303 $1,669
Cash from operations ($M)$78.7 $67.5 $35.7 $161.8
Capital investment ($M)$50.4 $60.8 $54.1 $58.0
Free cash flow ($M)$28.3 $6.7 $(18.4) $103.8
Net debt / LTM Adjusted EBITDA (x)——1.5 0.7

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated gold production (koz)FY 2025120–130 126–137 Raised
Consolidated silver cash cost ($/oz, after credits)FY 2025$3.00–$3.25 ($1.25)–($0.75) Lowered
Consolidated silver AISC ($/oz, after credits)FY 2025$15.75–$17.00 $11.50–$13.50 Lowered
Greens Creek gold production (koz)FY 202544–48 50–55 Raised
Greens Creek silver cash cost ($/oz)FY 2025$2.00–$2.50 ($6.25)–($5.00) narrative; alt table: ($7.00)–($5.75) Lowered (range discrepancy noted)
Greens Creek silver AISC ($/oz)FY 2025$8.75–$9.50 $0.00–$1.50 narrative; alt table: ($1.00)–$0.50 Lowered (range discrepancy noted)
Lucky Friday silver production (Moz)FY 20254.7–5.1 4.7–5.1 Maintained
Lucky Friday silver cash cost ($/oz)FY 2025$4.25–$4.75 $7.00–$7.50 Maintained current plan; note 8-K Feb vs Aug frameworks differ
Casa Berardi gold production (koz)FY 202576–82 76–82 Maintained
Casa Berardi cash cost/AISC ($/oz)FY 2025$1,500–$1,650 / $1,750–$1,950 $1,500–$1,650 / $1,750–$1,950 Maintained
Capital expenditure (total, $M)FY 2025$222–$242 $222–$242 Maintained

Note: The August 6 release presents Greens Creek cost guidance both narratively and in a later table with slightly different ranges; we flag this discrepancy for diligence .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025)Current Period (Q2 2025)Trend
Debt deleveraging & ATMPlan to delever; net leverage 1.5x; balancing investments and deleveraging ATM proceeds used to redeem $212M notes; repay CAD$50M; net leverage 0.7x; interest savings ~$17.8M/yr Improving
Keno Hill throughput targetMill proved ~400 tpd; mining rate lag; long-term 500–600 tpd with permits/capex; first profitable quarter Strategic recalibration to 440 tpd target for superior returns; first positive free cash flow quarter; Q3 ~90k oz curtailment; staged ramp with permitting Clarified/optimized
Casa Berardi strategic reviewAlternatives under evaluation; update targeted for Q2; potential proceeds to delever “In coming weeks” update; costs to improve as strip ratio declines in Q4; guidance maintained Pending decision
Greens Creek performanceNegative cash/AISC; strong grades; seasonal capex ahead Higher grades/throughput; inventory timing affects shipments; cost guidance materially lowered Improving
Supply chain/tariffsMonitoring tariffs impacts on input costs; concentrate placement insulated near-term No new impact disclosed; continued focus on domestic sourcing and contracts Stable
Exploration (Nevada)Initiated Midas drilling; Aurora EA by year-end; hub-and-spoke concept Continued enthusiasm, portfolio optimization; capital allocation discipline emphasized Building momentum

Management Commentary

  • CEO (prepared): “We generated record sales... record free cash flow... record Adjusted EBITDA... improving our net leverage to 0.7x... Our mines delivered outstanding operational performance...” and highlighted redeploying interest savings to strengthen the balance sheet and invest in high-return opportunities .
  • CEO on strategy: four pillars—operational excellence (semi-automation, advanced analytics), portfolio optimization (Casa review), disciplined capital allocation (ROIC hurdles, ATM-funded deleveraging), and silver leadership in low-risk jurisdictions .
  • CFO (Q&A): Rationale for retiring notes and eliminating silver-linked dividend—redirect cash to operations and exploration (e.g., Nevada), consistent cash flows to reinvest, minimize dilution via ATM .
  • COO (Q&A): Greens Creek grade outperformance driven by execution and access to better-grade areas; expectation to sustain similar rates through year .

Q&A Highlights

  • Greens Creek shipments: revenue “lumpy” due to monthly shipping cadence; inventory build in Q2 will be sold but timing depends on September sailings .
  • Keno Hill pathway: revised target to 440 tpd later in decade; ramp includes tailings batch fill plant, water treatment, waste storage; increased flexibility with Flame & Moth ore; 2025 power curtailment planned (~90k oz impact in Q3) .
  • Debt/Capital Allocation: Management prefers reinvestment vs buybacks; deleveraging increases cash flow and funding for organic opportunities; ATM chosen to minimize dilution compared to traditional equity .
  • Casa Berardi costs: strip ratio expected to decline in Q4, improving unit costs; production/cost guidance maintained despite Q1 cost uptick .

Estimates Context

  • Q2 2025 beats: Revenue $304.0M vs $257.7M*, EPS $0.09 vs $0.054*, EBITDA $132.5M vs $76.4M* .
  • Forward (near-term): Q3 2025 consensus revenue $324.1M* (actual later reported $409.5M*), EPS $0.095*, EBITDA $138.8M*; Q4 2025 revenue $343.8M*, EPS $0.131* [GetEstimates].
  • Implications: Consensus likely to revise up for revenue/EPS given Q2 beat and improved cost guidance (especially Greens Creek), partially offset by planned Q3 curtailments at Keno Hill and seasonal construction impacts .

Values retrieved from S&P Global. All S&P values are marked with an asterisk (*).

Estimates Table

MetricQ2 2025 ConsensusQ2 2025 ActualQ3 2025 ConsensusQ4 2025 Consensus
Revenue ($M)257.7*304.0 324.1* (actual 409.5*)343.8*
EPS ($)0.054*0.09 0.095* (actual 0.12*)0.131*
EBITDA ($M)76.4*132.5 138.8* (actual 203.4*)—

Values retrieved from S&P Global. All S&P values are marked with an asterisk (*).

Key Takeaways for Investors

  • Broad-based beat: Significant upside vs consensus across revenue, EPS, and EBITDA, underpinned by commodity prices and volumes; cost improvements at Greens Creek amplified operating leverage .
  • FCF and deleveraging: Record $103.8M FCF plus ATM-funded redemption should reduce interest expense and support further organic reinvestment; net leverage down to 0.7x .
  • Guidance mix: Consolidated gold raised; consolidated silver cost metrics lowered; Greens Creek mine-specific guidance materially improved; expect Lucky Friday Q3 production softness due to infrastructure project .
  • Near-term setup: Q3 may reflect planned curtailments (Keno Hill, Lucky Friday) and seasonal capex; monitor shipments, working capital timing, and hedges/puts at Keno Hill .
  • Strategic actions pending: Casa Berardi review update could reshape asset portfolio and silver exposure; potential monetization or JV could accelerate deleveraging .
  • Macro/contracting: Tariffs and export policy remain watch items; Hecla’s contracts and sourcing mitigate near-term risk; concentrate placement likely manageable with cost differentials .
  • Trading lens: Debt reduction and improved cost guidance are positive catalysts; any Casa outcome and Q3 operational execution will guide estimate revisions and multiple re-rating, while metal prices remain the primary sensitivity.