Q2 2023 Hecla Mining Company Earnings Call
Hello, and thank you for standing by my name is Regina and I will be your conference operator today at this time I would like to welcome everyone to the Hecla mining company second quarter 2023 earnings Conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer.
If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad.
Draw. Your question Press Star one again I would now like to turn the conference over to Wanna be to Patel, Vice President Investor Relations and Treasurer. Please go ahead.
Mani Regina and thank you all for joining us for Hecla's second quarter, 2023 financial and operations results Conference call I'm, a little talk APAC as vice President of Investor Relations and potentially that our financial.
Financial results news release that was issued yesterday along with today's presentation are available on <unk> website on today's call. We have co Baker Hecla's, President and CEO not in Gothenburg, Sweden, as senior Vice President and Chief operating Officer, and that's a lot of those have less senior Vice President and Chief Financial Officer.
Any forward looking statements made today by the management team come under the private Securities Litigation Reform Act and involve risks as shown on slides two and three in our earnings release and in our 10-K and 10-Q filings with the SEC.
These and other risks could cause results to differ from those projected in the forward looking statements.
non-GAAP measures on this call and related slides are they can find in the slides are they mutually.
I'd like to remind you if you would like to have a cogs with the management.
So by using the link under the section virtual Investor event in our earnings release that was issued yesterday, the Dodge either pass the call to Phil.
Thanks, <unk> and good morning, everyone. Thanks for joining our call.
The second quarter was a good quarter for safety production cash flow and start and changes at Casa, but maybe the most significantly then at the quarter as the restart of the Keno mill because when you combine that with what is happening at Greens Creek and Lucky Friday, I think that Hecla has now in another period of substantial growth in silver production reserves and maybe.
Even faster than what we had over the last five years and if you look at slide four you can see why I'm, saying that because what that shows is what we've done over the last five years in those numbers for those five years, it's pretty remarkable 27% growth in revenue.
79% growth in silver reserves 30.
7% growth in production three quarters of $1 billion of free cash flow from our from our three mines.
And it's no longer a question of Greens Creek mill can operate at 2600 tonnes per day or maybe even 2800 tonnes per day. It's now more of a question of whether we can maintain mining at that rate or even higher and the lucky Friday without the service hoist and the bunker, which is in operation. This month in the fourth quarter respectively.
Already producing about 20% more ore than 18 months ago, and it's at a 5 million ounce run rate.
The restart of Keno.
Alright.
Had our tubing problems, but if you look we have an exceptional district, given the grade of the ore the recoveries that we're experiencing and the remarkable exploration success with continuous discovery of mineralization.
So over the last five years, we had that 37% growth in production and we expect 40% over the next three years and close to 20% growth just this year.
Probably will also see growth in our reserves more free cash flow generation and I think all of this should result in share performance positive share performance.
Exactly as a silver company with gold exposure and we believe gold exposure will always be important to our portfolio for many reasons. It gives us diversification from the concentrate market.
It hedges against silvers higher volatility, especially during recessions. It gives us scale to grow and these are the reasons Casa berardi is important to our portfolio.
As we've indicated for the last year and a half cassa has been impacted more than our other sites by inflation, causing underground mining cost per tonne. The devil underground grades have declined as we expected.
Tailings construction costs are higher because it requires more buttressing.
So while we are permitting the higher grade pits, we are moving quickly to mine only the 160 <unk> warrants can talk more about cats in a moment. So now what I'd like to please move to slide five for a few comments specifically on the quarter.
I think it is.
Great second quarter, and I think the first half silver production is evidence of the point that started with and that's that our silver production is growing even faster now.
With this quarter Lucky Friday produced one 3 million ounces and four out of.
The last five quarters, we've produced more than one 2 million ounces and if that rate Lucky Friday is close to being the 30th largest silver mines in the world and just to put that in context in 2021, Lucky Friday was producing about 40% less than what it's doing now.
And as I mentioned, we started the mill at Keno Hill, and the improvements we completed leading up to the restart of the performing well the secondary crushing circuit modifications are proceeding on schedule the grades better than modeled and we anticipate being at full production by year end.
And of course, all this performance was underpinned by Greens creeks, consistent $2 4 million ounces of production and $36 million of free cash flow.
Our all in injury frequency rate was the lowest in the history of the company at 1.18, an accomplishment that reflects our focus on changing behavior and engineering out risk and I think the best example of that.
Engineering.
At risk as the UCB mining method, which puts miners in places that are safer doing safer tasks.
We will be focused on how low the injury frequency rate can go at the Lucky Friday.
And Lauren who is going to retire at the end of the year, we'll talk more about each property.
And silver revenues are growing relative to gold, where almost 45% for the quarter and I think we will likely have more than 55% of our revenues from silver by the end of the year. The silver operations have good cash flow generation and at prices can strengthen the second half should be even better and Russell will have more on this.
We maintained our consolidated silver production and cost guidance, but we have adjusted the production cost guidance for Casa Berardi and the production base.
Based on the impact of the wildfires and the fact that we're moving quickly to the open pit only operations and now I'll pass the call to Russell. Thanks, Phil I'll start on slide seven Hecla has long been known as a leader among the silver miners and the largest U S. Silver producer as we look at the slide it is easy.
Why we're over the past six months the margin of our silver mines was 56% and they've already produced more than $105 million of free cash flow. This year and we're excited to see what qunar will add to this profile over the past three and a half years, the Greens Creek and Lucky Friday mine that generated more than $560 million of free cash flow.
This has allowed us to invest in exploration to grow our production silver reserves as well as acquire and invest in Keno Hill, which we anticipate will both add to our production profile and improve our balance sheet and debt metrics.
This leads me to slide eight where I'll discuss our first quarter revenue profile and balance sheet.
Silver accounted for 40% of our revenues in the first half of the year, which continues to show the strength and consistency in our silver mines with approximately 34% of our revenue coming from gold and 26% from base metals. We ended the quarter with $170 million of cash on our balance sheet and have liquidity of $219 million. We also monetize.
Zinc hedges for approximately $7 6 million as the zinc price declined to its lowest point in the second quarter since April 2020.
The strength of our balance sheet and financial flexibility with a net leverage ratio of less than two times remains one of our most important objective.
As of the end of the quarter, we were slightly higher than our goal. This is primarily due to the suspension of mining operations in June at our Casa Berardi mine.
Two Canadian wildfires as well as our continued investment in Keno Hill I expect that as we come into the third quarter. This will revert to being less than two times due to the production of both of these mines during the quarter.
Now I'll turn the call for Lora.
Thanks Russell.
Let me start by saying, it's very satisfying that our succession and development planning have put us in a position to fill the VP ops role and to backfill that vacancy internally Carlos and Chris have steady hands, who will do a great job as for me I haven't hung up my spurt, just yet there's a lot to accomplish in the next five months.
I'd like to turn to slide 10.
Greens Creek, our cornerstone asset turned in another solid quarter with production of $2 4 million ounces of silver and free cash flow of $36 million for a total of more than $73 million in free cash flow for the first half of 2023.
Oil production remained strong at 16000 ounces due to better grades than planned and improved performance of the gravity circuit.
Cash costs for the quarter was $1 33 per ounce in the APAC per ounce was $5 34.
Both metrics are slightly higher than the previous quarter, primarily due to a lower zinc byproduct credits due to lower zinc price.
Capital spending was $8 8 million in the quarter for a total of $15 million for the year, our expected capital spend at Greens Creek is now between 49 and $52 million for the year, which is a slight decrease over the previous guidance.
We are increasing our gold guidance for Greens Creek, and lowering our EPS guidance because of the lower sustaining capital spend plan for the year.
Moving to slide 11, Lucky Friday produced one 3 million ounces of silver at an <unk> of $14 24 per ounce in the second quarter.
This quarter marked the fifth consecutive quarter of silver production exceeding 1 million ounces, the highest quarterly production in the past 23 years and a new safety record with an all injury frequency rate of 0.52 at the end of June a remarkable achievement.
Capital spending at the mine was $16 3 million as we focused on two key projects. The service hoist, which was completed earlier this month and of course oil bunker, which we anticipate completing by the fourth quarter.
The service hoist is expected to Debottleneck, our production hoisting capacity, while the courts are bankable decouple, the mine and the mill by adding the capacity to stockpile or for multiple days. Both projects are critical to achieving our production goal of 425000 tons per year. The rate, we expect to achieve by year end.
Free cash flow generation for the first half of the year was $34 million, reflecting the mind strong performance during the year.
We are reiterating the production guidance, but increasing the cash cost guidance for 2023 to $4 to $4 70 per silver ounce and all in sustaining cost of $11 50 to $13 per ounce.
This increase in cost guidance is due to higher labor costs of $2 5 million related to the wage increases and the new collective bargaining agreement.
<unk> zinc byproduct credits because of lower zinc production and prices higher sustaining capital related to the timing of mobile equipment deliveries and increased development to achieve our throughput target.
We are increasing the capital guidance to include higher sustaining and growth capital spend which is primarily related to our two major debottlenecking projects.
Moving now to slide 12 at Keno Hill, we remain on track to achieve full production in the fourth quarter.
We restarted the mill in the second quarter, using lower grade stockpiled ore for the startup.
The mill produced 184000 ounces in the quarter, while operating with a temporary portable crusher.
Milestone and the mill is to complete the secondary crusher improvements, which we anticipate in the third quarter.
We expect capital spend at the mine to be $47 million to $49 million for the year slightly higher than our initial guidance due to increased development and mill improvements.
I'm encouraged by our progress at Keno Hill, while we have a limited sample size. The resource model is performing well through the second quarter.
Middle to model reconciliation is showing slightly fewer tons at better grades for the same silver and lead content and more zinc.
The improvements we made in the mill prior to restart including advancing the level of process control are performing as expected.
Silver recovery met and exceeded our target of 94% and the concentrate quality is very good we're.
We're looking forward the commissioning of the upgraded secondary crushing circuit in the third quarter and expect it to improve the reliability and efficiency of that circuit.
And the mine, we're going through the typical ramp up learning curve.
Where and how to manage the ground and the primary development headings and are now working through the process and the ore headings.
The <unk> zone is requiring more shark week unexpected and that is being incorporated into the mining cycle. Our key underground infrastructure projects should be completed in the third quarter and we look forward to a strong finish for the year. We are reiterating our production cost guidance at more than $2 5 million ounces at an all in sustaining cost between $12 two 5%.
$14 75 per ounce.
We're excited about the future Kino and expect the mine can produce up to 4 million ounces in 2024.
On slide 13, the left hand photo shows an excellent example of very high grades are encountering in the bear vein.
Photo is a little difficult to discern in the in the presentation that you can see a lot of galena in there and Thats, a 160 out space, which is pretty impressive.
Right hand slide shows our progress on the secondary Crusher circuit, where we're replacing most of the components, except the crusher itself.
Turning to slide 14, Casa Berardi produced approximately 19000 ounces of gold for the quarter at an all in sustaining cost of 2000 and $286 per ounce.
Production was lower due to wildfires, Nab attunity, which cause access road closures for the majority of June .
As Phil said in his comments Casa Berardi has experienced declining head grades and keep increasing cost pressure over the past several years.
As noted in our technical report cast it becomes an open pit only operation in the future.
After careful evaluation, we decided to make some changes now to better prepare for that future.
We conducted a stope by stope margin analysis of the remaining underground reserves or resources during the quarter.
It concluded that the east mine did not yield attractive economics and closed at the West mine. The analysis showed attractive economics until about mid 2024.
These changes put more production pressure on the 160 open pit and we made the decision to begin the process of in sourcing the mining there.
We authorized the purchase of $16 million in surface mobile equipment about 12 million of which has been delivered and we are busy assembling it and training operators.
As our crews ramp up and the balance of the equipment is received we expect to take over all of the open pit mining by the end of 2024.
Much of the waste rock being produced by the stripping is being directed to the construction of tailing sell seven this year and through calendar year 2026.
We are adjusting our production cost guidance to reflect these changes.
Previously our plans model with the 160 <unk> combined with the underground production would act as a bridge until we get the permits to mine the higher grade open pits.
With the changes I just described it will not be possible to avoid a production gap, which we estimated about two years between 2028 and 2030.
$101 60 is fully mined we anticipate permitting yet as our long term tailing storage facility for the higher grade pits.
Until then we will build multiple raises on our existing sell seven tailings facility.
In consultation with our engineered record an independent review panel, we've determined that increasing the height of the facility will require us to build a substantial buttress for it that capital has been reflected in our ongoing plans.
I think the way to think about passes in three phases over the next four years, we'll make some modest investments that are returned into period to produce the remaining permitted reserves and resources.
There will be a period of investment while we complete the permitting of the higher grade pits invest in the infrastructure and equipment necessary to complete the transition to a fully surface operation and to expose the first store.
Once the first ore comes and that's inspected expected in 2030 positive free cash flow generation falls quickly and then builds over the coming years.
Before I pass the call back to Bill I want to emphasize capsules long reserve life and the significant exploration potential on a large land package on the Casa Berardi break, we're making the right decisions today to put <unk> back on the path to free cash flow generation and a brighter future with that I'll pass the call back to Phil Thanks, Lauren turning to slide 15.
We are reiterating our silver production and consolidated a guidance with our changes in cash. So we're revising our three year gold production and cost guidance for the year.
Capital guidance is increasing to $2 25 to $2 $35 million, mostly due to the increase of the Lucky Friday and at Casa Berardi for the <unk>.
Reasons that Loren has explained.
So I'd like to turn to slide 16, and before I end my remarks, I want to emphasize the critical role that silver plays in the transition to renewable energy.
Silver demand instead of all takes was about 140 million ounces in 2022, and that's about 12% of total silver demand.
In 2023.
Some technologies that are known as tough con and H J T are expected to account for 80% of all the new photovoltaic manufacturing facilities and these two technologies used 30, and 120% more silver respectively.
Then the currently widely used PERC technology.
So silver demand in solar is set to grow further as the transition to clean energy accelerates and I'm not going to be surprised.
30, maybe even 40% increase in demand in Sogou for solar happens this year or next raising solar to more than 15% of total silver demand.
And if the economy slows I'm confident that the commitment that has been made to renewable energy.
Will cause the growth that silver in solar to continue and so it seems inevitable that solar is going to swamp other silver domain categories with maybe the exception of investment demand.
With that Regina I'd like to open the call to questions.
At this time, if you would like to ask a question simply press star one on your telephone keypad. Our first question will come from the line of Lukas <unk> with Canaccord Genuity. Please go ahead.
Also in Tia and good morning, and thanks for taking my question.
Just wondering about Casa berardi could you provide more color on how much you expect to invest in those three years that the mine is closed down.
And over the next 18 months because I think you had previously said it would cost $100 million to $120 million for transition to open pit mining just wondering if that number is still valid and if so how much of that is baked into this revised capex guidance.
Yes. The short answer is that number is still valid and that was without stripping and if you add the stripping costs and.
Order of magnitude 200 $250 million. This is out in 'twenty eight 'twenty nine.
Maybe a little bit in <unk> and so.
Its not anything thats, an immediate capital outlay.
We are making some relatively small.
Free cash flow a casted does not cover all of the capital costs that we'll make.
And this year and next year that it's a relatively small amount I think the idiots.
But at least $40 million.
And then within the following year's its free cash flow positive.
We'll return that capital that we're investing in 'twenty three 'twenty four.
Okay.
25, 26, 27 time frame.
Yes phase three years.
Got it thanks, and just one more for me you had talked in the past about.
How you were hesitant to shut down the mine just because of.
Certainly.
Demand for labor in that area, what are you planning on doing.
With those employees or how are you planning on retaining them I guess.
Well.
We need to retain employees.
Certainly that's something we want to do and something we want to we're the largest private employer in the region.
But the reality and instead that the mine has to be economic and so we went through and looked very carefully at what stage. We can mine made the determination of the.
The need to shut down the east mine.
And when volumes in the West mine stopes that are economic.
And we will have that workforce through that that period of time and then we will.
Move to open pit.
Only open pit mine and so we will have certainly some of those people left will transition into those.
<unk>.
And what would you like to add to that.
So we've already begun that process of transitioning some of the underground workforce into the open open pit walls. So saw a significant number of.
People that were displaced from the east mine are going into the new fleet that we purchase stock with the new fleet.
Got it thanks, guys I'll get back in the queue.
Your next question comes from the line of Lucas pipes with B Riley. Please go ahead.
Thank you very much operator, and good morning, everyone.
Hi.
Hi, Mike.
First question is also on costs and kind of thinking through that.
The transition there.
That's down a little bit in the prior question in terms of transitioning labor.
Can you frame up what the net impact would be over the coming years and how you would manage manage that and then.
Is there kind of.
Yes.
Idle mine costs for the underground works following.
The exit from underground operations, just trying to understand if there's any anything we need to model longer term as it relates to the underground workings. Thank you very much for that.
So Lucas before you.
Can you repeat.
Question I'm not sure I understood.
No so.
Essentially when you abandon the underground section of Casa is it you just pull the plug and walk away from the underground workings or do you have.
Remaining costs maintenance costs for the underground works, even ask you don't actively produce underground anymore.
We it does not sterilize the underground and we will have to make a determine that in the future as to what level of maintenance do we do on the underground so.
Stay tuned, we'll see where we come out on that but.
Certainly.
We will.
What we will do will we will attempt to maintain the ability to to go back into that mine.
Underground different price conditions different cost environment.
The underground.
Could be revised plus X exploration, we're continuing to drive the exploration drifts to do further drilling too.
The west of where we're currently operating in the West mine so.
Stay tuned for that and that will occur over the course of the coming year.
With respect to the employees.
<unk>.
The fact that we are such a large employer and the issue is not going to be.
Having enough employees since the fact that we're having to reduce that number but that will occur over the course of the coming year.
And.
Ultimately, we ended up with roughly half the.
We have at one go ahead, yes. So in terms of company employees, we started the year at about 650 company employees.
And over we're now.
Now down to about 522, just to put things in perspective and over the course of the year there arent many more changes honestly normal attrition.
This change will come with the closure of the.
Of the West mine.
Got it.
Yes.
Thank you very much.
Four.
For the sponsors.
So for my second question I do want to stay on the labor topic.
So in the past you had mentioned labor constraints, especially on the skilled side and I'm wondering if you could give us an update.
From Queens Creek, Lucky Friday Keno.
How things are going on the labor front and I'll leave it there for now thank you very much.
Sure Lucas.
We can talk about I guess in general and then maybe Lauren you can add if there's anything specifically, but in general we've done a very good job.
Tracking.
Okay.
The people that we need.
At the at the mines.
I think.
I think there has been a net turnover rate at the Lucky Friday for example, this.
Fallen to the sort of levels that we've seen in the end.
Distant past, 10% or less sort of should a turnover rate.
Frankly, the biggest issue we have is with.
The technical people engineers geologists.
That's more of a challenge at the moment.
You're always going to have difficulties.
Mechanics.
Very skilled miners, but we've done pretty good job there winter, where we have some vacancies just really in the technical area. It's.
Yeah broadly I would say that.
What we're seeing.
Even less difficult to fill those roles over the past year than it was say the prior to not to say that there is still competition, but we're.
Pretty much it staffing levels everywhere, and we're able to find bolt and we supplement.
In terms of the skilled trades on contract when we need to but it hasnt.
A material impact to the business at this point.
We need more we need schools to fill up more engineers and geologists right exactly right yes.
It's where the skill gap really is on the technical side.
Because there's a bunch of great, Arizona Hecla, So we're doing all right with that.
Yes.
Alright.
Appreciate the color and I think I've mentioned before.
Oh, I know what degree I'll recommend to my children. So thanks, again and best of luck.
Okay Lucas.
Your next question will come from the line of Joseph Reagor with Roth and km. Please go ahead.
Hey, guys. Thanks for taking my questions.
Kind of following on a little bit of that the labor question.
With the shutdown of the East mine will there be any.
Changes in the Labor force at cost in Q3, and also on that on the East mine will there be any charges taken for the closure of that.
The answer's no questions.
We don't anticipate any.
Additional steps labor wise.
Nor is there any impairment charge.
Okay.
Then.
Compared to the February 2022 Technical report you guys put out on Cogs.
How different will the mining rates B as you switch to fully open pit in 2024 compared to what was in that document.
Okay.
Fundamentally there's really just two changes.
To document one is.
The underground production that's shown there.
We will not occur past 2024.
And that was I think originally going to about 2030 and then.
There is additional capital that bet.
We'll be looking for.
<unk>.
Otherwise.
It's the plan that we have always had.
And anything to add Russell anything.
Let's say in terms of the immediate changes.
With.
With the shortening of the underground we are accelerating the $1 65, which is why we why we purchased the equipment.
So for context.
The acceleration is not massive we go from circa 12 million tons move this year to a little under 20 next year.
So that's not that's not a huge change and then the following the following couple of years the rate drops off and will be fully in sourced at that point in time.
Okay.
Alright, Thanks out there and then.
On <unk>, obviously, great to see it started up early.
I think you guys were originally targeting Q3, but.
How confident are you guys in the full year guidance.
Since you started early is there any chance for upside to it and.
How are things going smoothly start this quarter to achieve it.
We are confident in the in the guidance at this point, but it is a start up and so you will be a function of what we see is the ability to put the tonnes in the mill.
And what the grade is going to be in and the recoveries.
Certainly our learning as we as we go but there isn't anything that would cause us to say, let's change something at the moment loan no nothing to add to it that's correct.
Okay. Thanks, guys I'll turn it over.
Your next question will come from the line of Mike Parkin with National Bank. Please go ahead.
Hi, guys, sorry to beat a dead horse.
Couple of questions on cost as well.
You've kind of indicated where you started the year unemployment, where you are now can you give us a sense as well.
Let's say 2025 us how many employees you'd expect to have visit.
So around just over 500 or would it be even lower.
It's sort of in that range that.
That we would have because remember where we are in sourcing the mining.
So so what.
Thats done by contractors will be done by Hecla employees.
Okay.
<unk>.
Okay, and then with respect to your reserves and resources now.
Is there going to be any reclassification.
Any of the ounces that fit in the underground categories into potentially open pit.
We will not be will not go into open pit, but there will be a reclassification of reserves to resources.
From the underground.
And it's relatively small amount recollection is in the <unk>.
15% of the total.
Four 7 million tons.
Yes.
Okay.
And then in terms of what Youre planning to mine with the future open pit is that.
What we're seeing in the inferred resources right now.
Yes.
Dave.
Yes, Timna reserves when it's what three gram material. So so the current 160 pit is one seven grams, one eight gram something like that and so when we go into the principal and the and the West mine Crown pillar pit significantly heightened.
And the strip ratio is particularly on the principal pit is quite attractive.
I was actually going to be one of my questions. Historically, you've had quite an elevated strip ratio can you give us just a general sense of what the life of mine.
Average would be.
I don't remember that but principal principal is about seven to one in the West mine Crown pillar is.
A multiple of that.
I don't remember whether it is 22 to one.
Okay.
And that's in the technical report.
Nothing nothing has changed with respect to the timing of those pits are as described in the technical report.
Really the big change in the technical report is.
Underground being shortened and the 160 pad being advanced.
And more and more capital for the sell seven given that youre, saying that sell seven.
Okay.
And the decision to move ahead with this is there like a minimum IRR threshold that you're using.
Testify.
At what silver price would that be done that.
Well, it's a gold asset so so alright.
Alright.
Yes, so so the real decision in terms of.
We.
Big capital outlay, and probably didn't happen until 2027 2028.
No.
Because between now and then it is cash flow positive.
So you just end up having those two yields where you've got to make a capital outlay and so.
While we expect that this.
We will go forward.
Certainly a different decision that conditions are different at that time could be made but.
And the reason, we expect to get full use less very high grade open pit material.
There are economic.
Generating.
According to the technical report I want to say a billion.
Dollars.
Plus or minus cash free cash flow over overall.
Okay.
<unk> moved up the capital so it's a very economic set of pits.
Okay.
Extension decision the ultimate decision is made.
In 2728.
Okay.
Again for any questions. Please press star one and our next question will come from the line of Heiko with H C. Wainwright. Please go ahead.
Hello, everyone, sorry for and case.
Something that's been asked before I got on a little bit later.
On another call so sincere apologies stuff working out in here.
Can you drive down Cogs.
<unk>.
First time that happened to me on where coal can you provide some color on the cost of labor parts and so on for your new mining operation in the Yukon.
Now youll have a pretty decent sample size for what actually transpired versus what you have modeled with output costs.
The thing else that you would say would be good to pass onto the analyst community with starting up operations that you maybe didn't expect availability of labor bottleneck for parts that kind of stuff.
Well I guess, the first thing I'll say Tycho is that we've been fortunate in that.
We have not had a huge turnover at.
At Keno.
There was a cadre of people there and.
They wanted to be there and it's pretty cool place and.
They recognize sort of grades so.
It's.
We've been fortunate in that the turnover rate has not been.
The high end, we have been able to attract.
Technical people to the site data certainly the issue is it's a it's a.
Rotational schedules. So you got to have basically twice as many people as you would need for.
Operation that does not have that right.
<unk>.
And it's certainly in the in the Yukon.
But.
Comp wise, I think where we're competitive I don't off the top of my head can't tell you where we're at it stands any do you have any color Lauren no.
From that perspective, I would say that we've really not had trouble staffing either meters.
<unk> or technical people.
The other thing is there has been some other operations that have closed down.
And that actually has.
Given that's a supplement of quite a few folks.
So the Minto operation.
That's quite helpful. Thank you.
Moving on from that I don't know what everyone else was focus on costs or at least on the questions.
But can you walk us through your exploration plans for the Arizona versus to coincide zone for the remainder of the year.
Just when it comes to you know maybe meters in holes and uneven money spent.
So I'm, sorry, which was muscle, which which zones.
So their sone versus the tons of its own.
Okay.
Well look we have so many targets.
<unk>.
It's a challenge.
And so they are actually will be.
<unk> has now moved from those two zones.
The chance vein, which is lost.
Sure.
It is a little bit further further afield, but.
We're getting great results.
One of the things, we're going to try to figure out is how we might drill in the winter.
Should we be drilling in the winter. So so I guess stay tuned for that.
Our total spend in exploration for.
Keno Hill.
<unk> 2017.
$73 7 million.
So we don't have a huge budget budget there.
But it will it will expand if we start drilling in the winter and plus will start to have.
Access underground.
We've got platforms that were waiting to get access to but we'll be getting access to those fairly quickly. So youll see a little bit of drilling in the fourth quarter from from the underground.
New more drilling as a result of those two is.
Underground platforms.
It wasn't going to asked US until you just brought it up but what is the.
Cost differential between winter drilling in summer drilling approximately.
I Couldnt tell you other than it's it's.
It's more.
The big issue that I have is just managing the water.
As it gets so cold remember, it's minus 40 50 degrees on occasion, there, having said that we expense that of cancer and we have been and we actually do.
All of the surface drilling that all of it but almost all preferentially in the winter in the winter because of the swampy nature of that that area. So we have the skills and the.
Experience to do it.
We just have not done it there.
I'd say, we <unk>.
<unk> did not do it there.
But we can.
I think it's likely that youll see us start to do some.
That's very helpful. Thank you and I will get back in queue.
Thanks Heiko.
And with that I'll hand, the call back over to Phil Baker for any closing remarks.
Okay, well, thanks, very much Regina I appreciate the questions.
Yes.
Hope that you.
Think about the five years that we have.
The last experience in the accomplishments that we have had.
Because I think we're in a position to.
See that same sort of experience, where we see the growth.
The dramatic growth in our in our silver production.
And the fact that we have the silver production in the U S and in Canada.
Is is more meaningful today than it was five years ago.
And we really have a group of people that is.
Very capable.
They like working for Hecla and working for a company that has the the.
The history and the expertise that we have where we're able to do things like the UCB.
UCB method of mining at the at the Lucky Friday.
So stay tuned we're certainly available for questions.
Questions. We have we have some time set up or.
Analysts.
Shareholders anyone who's interested to be able to talk to Lauren and Russell awry and so please.
Please make a request to be on one of those calls.
With that have a good rest of your day. Thank you very much.
That will conclude today's conference call. Thank you all for joining you may now disconnect.
Please wait.
France will begin shortly.
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