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HECLA MINING CO/DE/ (HL)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered revenue of $249.7M, gross profit of $68.3M, and EPS of $0.02, with Adjusted EBITDA of $86.6M; de‑leveraging continued as net debt/TTM Adjusted EBITDA improved to 1.6x .
  • Management issued 2025 guidance broadly in line with 2024 silver production (15.5–17.0 Moz) but lower gold (120–130 koz), and detailed cost/capex plans by mine; Keno Hill growth deferred amid permitting and power constraints .
  • Dividend policy streamlined: silver‑linked component eliminated; base dividend maintained at $0.00375 per share for common and $0.875 for preferred, refocusing cash on free‑cash‑flow accretive projects and balance sheet strength .
  • Call commentary emphasized operational excellence, disciplined capital allocation, and strategic alternatives for Casa Berardi; near‑term cost headwinds include Greens Creek power maintenance (+~$5M) and labor inflation .
  • Street consensus (S&P Global) was unavailable during this session; estimate comparisons cannot be provided.

What Went Well and What Went Wrong

  • What Went Well

    • Record full‑year sales ($929.9M) and Adjusted EBITDA ($337.9M) as Lucky Friday and Greens Creek generated strong free cash flow; net leverage fell to 1.6x from 2.7x YoY .
    • CEO strategic pivot to cash flow and ROIC, streamlining dividend to fund high‑return projects; “Our renewed focus on optimizing cash flow generation and return on capital investment will drive shareholder value” — Rob Krcmarov .
    • Operational momentum: Lucky Friday set mining/throughput records and delivered 1.3 Moz in Q4; Greens Creek produced 1.9 Moz silver with sharply lower cash costs and AISC QoQ; Keno Hill increased reserves +17% in 2024 .

  • What Went Wrong

    • Keno Hill’s permitting delays and Yukon power curtailments constrained Q4 throughput (~25 days mill suspension + 10 days power curtailments; ~130 koz silver lost) and push growth into 2026 .
    • Q4 results include non‑cash write‑downs ($14.6M; primarily remote vein miner) and continuing ramp‑up/suspension costs ($9.6M in Q4; $43.3M FY), diluting earnings quality .
    • Greens Creek Q4 silver output below plan due to equipment availability/backfill delays; 2025 costs guided higher on labor/power maintenance (diesel generation), pressuring margins near‑term .

Financial Results

Consolidated P&L vs Prior Quarters (USD Millions unless noted)

MetricQ2 2024Q3 2024Q4 2024
Revenue$245.7 $245.1 $249.7
Gross Profit$51.4 $59.3 $68.3
Net Income to Common$27.7 $1.6 $11.8
Diluted EPS$0.04 $0.00 $0.02
Adjusted EBITDA$90.9 $88.9 $86.6

Notes: Margins derive from reported figures.

Margins vs Prior Quarters (derived from reported values)

MarginQ2 2024Q3 2024Q4 2024
Gross Margin %20.9%24.2%27.4%
Net Income Margin %11.3%0.7%4.7%
Adjusted EBITDA Margin %37.0%36.3%34.7%

Source inputs: revenue/gross profit/net income/Adjusted EBITDA as cited above .

Segment Breakdown – Q4 2024

SegmentSales ($M)Total Cost of Sales ($M)Gross Profit ($M)Key Q4 Production
Greens Creek$112.0 $67.9 $44.2 1.90 Moz Ag; 14.8 koz Au
Lucky Friday$57.7 $40.2 $17.5 1.34 Moz Ag
Keno Hill$15.4 $15.4 $0.0 0.63 Moz Ag
Casa Berardi$59.2 $51.7 $7.4 20.9 koz Au

KPIs and Unit Costs – Q4 2024

KPIQ4 2024
Consolidated Silver Produced3.87 Moz
Silver Cash Cost/AISC (Greens Creek)$(5.86)/$2.62 per oz
Silver Cash Cost/AISC (Lucky Friday)$7.68/$17.12 per oz
Gold Cash Cost/AISC (Casa Berardi)$1,936/$2,203 per oz
Realized Prices (Q4): Silver/Gold/Zinc/Lead$30.19/oz; $2,656/oz; $1.53/lb; $0.94/lb

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated Silver Production2025N/A (not provided)15.5–17.0 Moz New
Consolidated Gold Production2025N/A120–130 koz New
Greens Creek Cash Cost/AISC (Ag)2025N/A$2.00–$2.50 / $8.75–$9.50 per oz New (higher vs 2024 actual drivers)
Lucky Friday Cash Cost/AISC (Ag)2025N/A$4.25–$4.75 / $16.50–$18.00 per oz New
Keno Hill Production Cost (ex‑D&A)2025N/A$15–$17M per quarter New
Casa Berardi Cash Cost/AISC (Au)2025N/A$1,500–$1,650 / $1,750–$1,950 per oz New (lower vs 2024 plan as mine transitions)
Total Silver Costs of Sales2025N/A$424M New
Capex – Total2025$196–$218M (2024) $222–$242M Raised
Capex – Greens Creek2025$50–$55M (2024) $58–$63M Raised (DSTF expansion)
Capex – Lucky Friday2025$45–$50M (2024) $63–$68M Raised (surface cooling; development)
Capex – Keno Hill2025$45–$50M (2024) $43–$48M Similar (growth infra)
Capex – Casa Berardi2025$56–$63M (2024) $58–$63M Similar
Exploration & Pre‑Dev Spend2025$25M (2024) $28M Raised
Dividend Policy (Common)Ongoing$0.01375 incl. silver‑linked (Q3) $0.00375 base‑only; silver‑linked eliminated Lowered (policy streamlined)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 2024)Current Period (Q4 2024)Trend
Capital Allocation & DividendPaid silver‑linked dividends as silver realized >$25/oz Eliminated silver‑linked component; focus on ROIC/free cash flow Shift to reinvestment discipline
Greens Creek Costs/PowerLower AISC in Q2 on by‑product credits; normalizing in Q3 2025 costs up on power maintenance/diesel, labor; ~+$5M impact cited Near‑term cost headwind
Lucky Friday PerformanceRecord throughput in Q2; still strong in Q3 with higher costs Q4 further gains; 2025 AISC similar; capex to cooling/development Operational strength; capex elevated
Keno Hill Permitting/PowerRamp‑up in Q2; DSTF permit delays in Q3; stakeholders caution Ongoing power curtailments; 2025 flat production; growth targeted 2026 Delayed growth; stakeholder engagement
Casa Berardi StrategyExtended UG ops in 2024; considering alternatives Evaluating sale/alternatives; transition to surface‑only mid‑2025 Strategic review; H2 cost tailwind
Balance Sheet De‑leveragingNet leverage improved to ~2.3x (Q2); 1.8x (Q3) 1.6x; target <1x over time Positive trajectory

Management Commentary

  • Strategic pillars: “Operational excellence… portfolio optimization… financial discipline… and ESG leadership,” emphasizing return on capital and cash flow generation to drive shareholder value .
  • On Keno Hill: phased strategy to 440 tpd then ~600 tpd; permitting/power reliability critical; Premier support noted for permitting efficiencies and power solutions .
  • On Casa Berardi: transitioning to surface‑only mid‑2025; five‑year development hiatus expected; evaluating strategic alternatives to maximize value .
  • On dividend policy change: “streamlined our dividend policy to eliminate the silver‑linked component, enabling us to pursue significant growth opportunities, particularly at Keno Hill” — CEO .

Q&A Highlights

  • Casa Berardi strategic review: considering outright sale or stake sale; timeline guidance update expected by Q2; trade‑off between near‑term deleveraging vs future gold price risk .
  • Leverage target and cash priorities: aiming for net leverage “less than 1x” over time; balancing revolver paydown, cash build, and organic investments .
  • Greens Creek power maintenance: hydropower utility maintenance and diesel generation increase costs by ~$5M; timing around mid‑2025 .
  • Keno Hill trajectory: throughput goal of ~600 tpd needed for profitability given high fixed costs; care‑and‑maintenance remains a contingency if permitting delays persist .
  • Lucky Friday 2025 capex allocation: ~$20M mine development and ~$13M surface cooling project; capex expected to reduce after completion .

Estimates Context

  • Wall Street consensus (S&P Global Capital IQ) could not be retrieved during this session due to data access limits; therefore, estimate comparisons for Q4 2024 (EPS and revenue) are unavailable.
  • Implication: Post‑print estimate revisions likely focus on Greens Creek cost headwinds, Keno Hill timing to 2026, and Casa Berardi H2 cost relief; monitor consensus adjustments when available.

Key Takeaways for Investors

  • De‑leveraging intact; TTM net leverage at 1.6x with path to <1x supports equity rerating on sustained FCF delivery .
  • Policy shift (eliminating silver‑linked dividend) reallocates capital to higher‑return growth (Greens Creek DSTF, Lucky Friday cooling, Keno Hill infra), a near‑term yield trade‑off that may be long‑term accretive .
  • Greens Creek remains cornerstone, but 2025 cost inflation (labor/power) will pressure unit costs; watch execution on backfill/equipment availability and DSTF expansion .
  • Lucky Friday operational momentum continues; 2025 capex intensity transient and aimed at sustaining throughput and thermal constraints — supportive of stable AISC and FCF .
  • Keno Hill growth deferred; stakeholder/permit cadence and Yukon power restoration are gating factors; upside lever is Phase 2 to ~600 tpd in 2026 on expanded reserves .
  • Casa Berardi is a swing factor: H2 2025 cost relief on surface‑only transition, but multi‑year hiatus (2027–2032+) and permitting uncertainty keep strategic alternatives in play .
  • Trading setup: catalysts include 2025 guidance execution, power/permits progress in Yukon, Casa outcome, and silver price tailwinds; risks are cost inflation and regulatory timing.