Q3 2023 Hecla Mining Co Earnings Call
Thank you for standing by and welcome to the Q3 2023 Hecla Mining Company earnings
Thank you for standing by and welcome to the Q3 2023, Hecla Mining Company earnings Conference call.
I would now like to welcome Envita Patel, VP Investor Relations and Treasurer to begin the call. Envita Overtis.
I would now like to welcome and beat up the Tel VP Investor Relations and treasurer to begin the call and Peter over to you.
Good morning, and thank you all for joining us for Hecla's third quarter, 'twenty 'twenty, Chief financial and operations results Conference call on Monday that the Parker, Vice President of Investor Relations and fashion.
This is Maneem Mandi and thank you all for joining us for Headquarters Third Quarters 2023 Financial and Operations Results Conference call. I'm Anitha Tappakal, Headquarters Vice-President of Investor Relations and Treasurer.
Our financial results news release that was issued yesterday, along with today's presentation, are available on Heckler's website.
Financial results news release issued yesterday, along with todays presentation are available on Hecla's website on today's call that'd be helpful. Baker, Hecla's, President and Chief Executive Officer, Robert <unk>, Senior Vice President and Chief Operating Officer, Russell Waller, Hecla's, Senior Vice President and Chief.
On today's call, we have Phil Baker, Headler's President and Chief Executive Officer, Lauren Roberts, Headler Senior Vice President and Chief Operating Officer, Russell Lawler, Headler Senior Vice President and Chief Financial Officer, and Carlos Aguar, Headler's Vice President of Operation.
<unk> officer and cargo Sigler that does vice president of operations.
Any forward-looking statements moved today by the management team come under the Private Security Setication Reform Act and involve risks as shown on slides, too, in our earnings release and in our chemical and thank you findings with the SES.
Forward looking statements made today by the management team I'm under the private Securities Litigation Reform Act and involve risks as shown on slides two and our earnings release and in our 10-K and 10-Q filings with the SEC.
E is an other risk with cause results to differ from those projected in the forward-lipply state.
These and other risks.
As to differ from those projected in the forward looking statements.
Non-GaV measure cited in the school and related slides are reconciled in the slides of the newsroom.
non-GAAP measures during this call and related slides are reconciled and despite all the news release.
I want to remind you, if you would like to have a call with the management, you can do so by using the link under the section virtual investor event in our earnings release. That was issued yesterday. With that, I'll pass the call to Phil. Thanks, San Vita. Good morning, everyone. Thanks for joining the call. Before it gets to the slides, I want to just remind you that Lauren's going to be retiring at the end of the year. And I just want to thank Lauren for his 10 year at Heckluck.
I want to remind you if you would like to have a call with the management you can do so by using the link under the section, but you are an investor event in our earnings release that was issued yesterday.
I'll pass the call to Phil Thanks, and good morning, everyone. Thanks for joining the call.
I get to the slides.
I want to just remind.
To remind you that Lauren is gonna be retiring at the end of the year and I just want to thank Loren for his tenure at Hecla.
you know during his time there's been a lot of accomplishments that he has has a company has done and that he has led but what really stands out to me is that when he arrived at Hectlough we were still at the Lucky Friday
During his time theres been a lot of accomplishments that he has.
The company has done and he has led but what really stands out to me.
Is that when he arrived at Hecla.
We're still at the Lucky Friday focused on heading the rock using mechanical mining.
focused on cutting the rock using a mechanical mining. But we began the steps that led to the new mining method at Lucky Friday.
But we began the steps that led to the new mining method at the Lucky Friday.
And without his support, knowledge, leadership, I doubt the UCB would have been developed. We wouldn't have a patent for a new mining method. So thanks, Lauren, for all that you've done.
And without his support knowledge leadership.
The ECB would have been developed.
Didn't have a patent for for a new mining method, Sir thanks, Lauren for for all that you've done.
But also like to introduce Carlos Aguiar, he's our vice president of operations, and Carlos is from Mexico, and he became a US citizen two years ago, and has been with the company a total of 27 years.
I'd also like to introduce Carlos AGGY, our he's our vice president of operations and Carlos is from Mexico, and even in the U S. Citizen two years ago and has been with the company a total of 27 years.
17 of those years has been working for us in Latin America, I mean, both Mexico and Venezuela. He has nine years of experience as a GM for us at both San Sebastian and Lucky Friday Mines. And he also knows Casabrardi. He really started the mill modification.
17 of those years has been working for us in Latin America or in both Mexico and Venezuela.
His nine years of experience as a GM for us at both San Sebastian Lucky Friday minds, and he also knows Casa berardi.
Really started the mill modifications and I've known Carlos now for about 20 years I first met him on a tour at the mill in Venezuela.
And I've known Carlos now for about 20 years. I first met him on a tour of the middle in Venezuela.
and his leadership abilities and commitment to operational excellence has really been reflected in the consistent improving and results that he's achieved everywhere that he's worked. Every operation has seen significant improvement with him at the helm.
And his leadership abilities and commitment to operational excellence is really been reflected in the consistent and improving results cities achieved everywhere that he's worked every operation has seen significant improvement with him at the helm.
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So you're gonna enjoy getting to know him and with that interaction I'll start with slide three.
So you're going to get to enjoy getting to know him and with that interaction I'll start with slide three.
I want to take a moment to just step back and discuss our performance from a longer term perspective. We typically do this. We, you know, it's the way we look at the business is on a long-term basis. And over the past five years, you've seen our revenues grow 27%, silver reserves, 79%.
Yes.
I want to take a moment to just step back and discuss our performance from a longer term perspective, we typically do this.
And Thats the way, we look at the business as a long term basis and over the past five years, you've seen our revenues grow 27% silver reserves, 79%.
Silver production 37%. And as we work toward producing up to 20 million ounces by 2025, it means that we will close to double our silver production since 2018.
Silver production, 37%.
And as we work towards producing up to 20 million ounces by 2025. It means that we will.
Close to double our silver production since 2018.
And maybe more impressively is that next number, the $767 million of free cash flow that are three operating mines in general.
And maybe more impressively is that next number the $767 million of free.
Free cash flow that our three operating mines generate.
And this, of course, has resulted in the strong share performance.
And this of course has resulted in the strong share performance.
And it's the quality of our assets. These are assets that have long reserve lives, high grades, low cost, consistent performance and significant expiration potential, which allows you to have this performance over time. And I'll suggest to you that Greens Creek checks all five of those boxes, long reserve life, high grade, low cost, consistent performance, and significant expiration potential. Lucky Friday at this point, checks four of the five, Casay and Kino checks three of them.
And it's the quality of our assets. These are assets that have long reserve lives high grade low cost consistent performance and significant exploration potential which allows you to have this performance over time and I would suggest to you that Greens Creek checks all five of those boxes and a long reserve life high grade low cost consistent performance.
Significant exploration potential Lucky Friday at this point checks for the five Cassa <unk> keynote checks three of them.
But all the minds check the long lives. So we are focusing on setting up the minds for the long term, pushing for continuous improvement, and allowing innovation to fundamentally improve them. So they all end up.
All of the mines checked the long lives. So we're focusing on setting up the mines for the long term pushing for continuous improvement and allowing innovation to fundamentally improve them. So they all end up.
I'm convinced all of them will end up checking all five of the boxes. So with that context for the quarter, let me move to slide four.
I am convinced all of them wind up checking all all five of the boxes, so with that context for the quarter, Let me move to slide four.
I'll start with the lucky Friday, which will not have production until early 2024 as we block off the lower part of the two shaft and build a new secondary escape way of ventilation.
I'll start with the Lucky Friday, which will not have production until early 2024, as we block off the lower part of the two shafts and build a new secondary escapeway ventilation rates.
And this three-month project is going well. At the same time, we are still advancing other projects and completing our equipment purchases. We actually have ten pieces of equipment on surface that are ready to go underground.
And this three months projects going well at the same time, we are still advancing other projects and completing our equipment purchases.
We actually have 10 pieces of equipment on surface that are ready to go underground.
And we expect to ramp back up the full production in Q1 and see the Lucky Friday continue in 2024, the production growth and the free cash flow that we saw before the fire.
And we expect to ramp back up to full production in Q1 and see the Lucky Friday continue in 2020 for the production growth in the free cash flow that we saw before the fire.
At Keno Hill, production has been slowed due to the delay in the Shot Creek plant commissioning just yesterday and the cement rock fill plant scheduled to be completed later this month.
Now at Keno Hill production has been slow due to the delay in the <unk> plant commissioning just yesterday in cement Rockville plants scheduled to be completed later this month there.
Their completion puts us in a position to advance development and production faster and the grade of the ore has even been better than what our block model had predicted.
Their completion puts us in a position to advanced development production faster than the greater the ore.
<unk>, even been better than what our block model had predicted.
However, we're concerned with the safety culture at Keno. Our all-injury frequency rate at Keno is around four, which is not acceptable. If you look at Greens Creek and Lucky Friday, they're both less than one.
However, we are concerned with the safety culture Aquino, our all injury frequency rate at Keno is around four which is not acceptable. If you look at Greens Creek and Lucky Friday, they're both less that one.
In the last two months and more recently in the last two weeks, we've had some near misses that didn't result in an injury or damage to equipment, but they could have.
In the last two months and more recently in the last two weeks, we've had some near misses that didn't result in an injury or damage to equipment, but they could have.
And that's not acceptable to us. As a result, I've tasked Carlos and his team to methodically review all our process and procedures to get safety right.
And that's not acceptable to us as a result.
Carlos and his team to methodically review, all our processes and procedures to get safety right.
Because we know that excellent safety not only prevents injury, but also standardizes activities which increases predictability and production.
Because we know the excellent safety not only prevents injury, but also standardizing activities, which increases predictability.
<unk>.
And so the safety review at Keno will likely lead to changes in our processes, schedules, equipment, the way we mine, and to make the mine safer, we will re-engineer certain processes. With the mine just starting up, and with its expected long mine life, we must get off on the right foot on safety. So we're going to take whatever time is needed to do that.
And so the safety review Kina will likely lead to changes in our processes scheduled equipment and the way, we mine and to make the mine safer, we will reengineer certain processes with the mind, just starting out and with its expected long mine life, we must get off on the right foot bumps sake. So we're going to take whatever time is needed to do.
To that.
Greens Creek had another consistent strong operational quarter, and we're increasing silver production guidance at the mine.
Greens Creek had another consistent and strong operational quarter and we're increasing silver production guidance at the mine. Greens Creek has already generated over a hundred million of free cash flow for the year.
Greens Creek has already generated over $100 billion of free cash flow for the year.
Now, Casa Berardi had a very good quarter, progressing on the transition that we're making for becoming only an open pit mine, reporting cash costs and all and sustaining costs that are well within guidance, and building infrastructure that sets the mine up for success in the next decade. Earlier this year, we saw the need to make the fundamental changes, which we began implementing just this past quarter, and we're already seeing the benefits.
Now Casa Berardi had a very good quarter progressing on the transition that we're making towards becoming only an open pit mine reporting cash cost and all in sustaining costs that are well within guidance and building infrastructure that sets. The mine up for success in the next decade earlier.
Earlier this year, we saw the need to make the fundamental changes, which we began implementing the just this past quarter and we're already seeing the benefits of that.
As a company, silver production guidance is only slightly lower, midpoint of guidance is just 400,000 ounces less silver, silver costs are unchanged, gold is unchanged other than a little lower cash costs.
As a company silver production guidance is only slightly lower mid.
Mid point of guidance, just 400000 ounces less silver silver costs are unchanged goal is unchanged other than a little lower cash costs.
And finally, the safety performance at our mines with the exception of Keno Hill has been one of the best in the industry with an all-in, all-injury frequency rate consistently lower than the U.S. national average. So with that, I'll pass the call on to Russ. Thanks, Phil. I'll take it from here.
And finally, the safety performance at our mines with the exception of Keno Hill has been one of the best in the industry with an all in all injury frequency rate consistently lower than the U S. National average so with that I'll pass the call onto us. Thanks.
Thanks, Phil I'll start on slide six.
If we think about the year so far, even with Lucky Friday down for most of the third quarter, silver accounted for 38% of revenues, with silver operations generating more than $120 million of free cash flow.
We think about the year, so far either Lucky Friday down for most of the third quarter silver accounted for 38% of revenues with silver operations generating more than $120 million of free cash flow.
With strong gold production of 39,000 ounces, gold accounted for 36% of revenues, and base metals contributed 25%. We are on a path of more than half of our revenues coming.
With strong gold production of 39000 ounces gold accounted for 36% of revenues and base metals contributed 25%. We are on a path of more than half of our revenues coming from silver.
A strong balance sheet and financial flexibility have always been key priorities with the goal of maintaining a leverage ratio of less than two times and maintaining significant
<unk> balance sheet and financial flexibility have always been key priorities with the goal of maintaining a leverage ratio of less than two times and maintaining significant liquidity.
In the third quarter, we saw our leverage ratio increase to 2.2 times due to the Lucky Friday suspension of production and our continued investment at Keno Hill. Although we expect our leverage ratio will remain elevated next quarter, we see this increase as temporary. Our liquidity is adequate at $165 million. However, I expect our leverage ratio will be less than two times and our liquidity will grow substantially once the Lucky Friday is back into production and Keno Hill matures.
In the third quarter, we saw our leverage ratio increased to two two times due to the Lucky Friday suspension of production and our continued investment at Keno Hill.
Although we expect our leverage ratio will remain elevated next quarter. We see this increase as temporary our liquidity is adequate at a $165 million. However, I expect our leverage ratio will be less than two times and our liquidity will grow substantially once the lucky Friday is back into production and Keno Hill matures now I'll turn to slide seven to highlight.
Now, I'll turn to slide 7 to highlight some of the key attributes of our silver mines, especially now that we're going through a period of investment. Our silver mines have consistent.
Some of the key attributes of our silver mines, especially now that we're going through a period of investment.
Our silver mines have consistently provided strong margins. This is shown in the graph on the left where over the past four years. This margin has been near or above 50% and has translated into consistent free cash flows. The chart on the right highlights just how strong this free cash flow generation is from our silver mines, where since 2020, Lucky Friday and Greens Creek have generated.
This is shown in the graph on the left where over the past four years, this margin has been near or above 50% and has translated into consistent free cash.
The chart on the right highlights just how strong this free cash flow generation is from our silver market.
Where since 2020, Lucky Friday and Greens Creek have generated more than $800 million of cash flow from operations. And even more impressive is the nearly $600 million of free cash.
More than $800 million of cash flow from operations and even more impressive is the nearly $600 million of free cash flow.
These strong margins and the resulting free cash flow generation allow us to invest both capital and exploration at these mines, as well as in our broad exploration portfolio, in addition to returning capital to our shareholders in the form of dividends.
These strong margins and the resulting free cash flow generation allow us to invest both capital and exploration at these mines as well as in our broad exploration portfolio. In addition to returning capital to our shareholders in the form of dividends.
And now I'll turn the call to Laurence.
Thanks, Russell. I'd like to just make a few comments on my time with Hekla. I began with Hekla as a summer intern in 1988 and became a full-time employee in 1989. I spent a little under eight years with Hekla and could not have asked for a better start to my career.
Thanks Russell.
I'd like to just make a few comments on my time with backlog.
<unk> as a summer intern in 1988 and became a full time employee and 1989 I.
Spent a little under eight years with <unk> could not have asked for a better start to my career.
So when the opportunity to rejoin HECLA presented itself some two decades later, it was a very easy decision for me to return home.
So when the opportunity to rejoin Hecla presented itself. Some two decades later it was a very easy decision for me to return Hall.
The chance to give something back was very important to me, and it's been a really rewarding four years. So I'd just like to thank the Hecla family for that.
The chance to give something back was very important to me and it's been a really rewarding for years. So I would just like to thank the hecla family for that.
With that, I'll start on slide nine. Greens Creek, our flagship mine, turned in another strong and consistent quarter, producing 2.3 million ounces of silver in line with the prior quarter's 2.4 million ounces.
With that I'll start on slide nine.
<unk> Creek, our flagship mine turned in another strong and consistent quarter, producing $2 3 million ounces of silver in line with the prior quarter's $2 4 million ounces.
The mine has already produced 7.5 million ounces in the first three quarters of the year and remains on track to achieve its throughput target of 2,600 tons per day by the end of the year.
The mine has already produced $7 5 million ounces in the first three quarters of the year and remains on track to achieve its throughput target of 2600 tonnes per day by the end of the year.
Cash costs and all in sustaining costs per silver ounce were $3 and <unk> 18.
Cash costs and all-in sustaining costs per silver ounce were $3.04 and $8.18, respectively, and were higher than the second quarter because of lower gold production and lower gold prices.
<unk> and were higher than the second quarter, because of lower gold production and lower gold prices.
Capital spent for the quarter was $12 million, higher than the previous quarter, and as planned, due to equipment purchases and seasonal surface projects.
Capital spend for the quarter was $12 million higher than the previous quarter and as planned due to equipment purchases and seasonal service projects.
The mine generated 28 million in pre-cash flow in the quarter and is already generated more than 100 million in pre-cash flow this year.
<unk> generated $28 million in free cash flow in the quarter and has already generated more than $100 million in free cash flow this year.
We're increasing silver production guidance to 9.8 to 10 million ounces for the year. Due to mine sequencing, zinc production is expected to be somewhat lower, increasing our cash costs and all sustaining costs per ounce guidance due to lower expected byproduct credits. Capital guidance is unchanged at 46.
We're increasing silver production guidance to $9 eight to 10 million ounces for the year.
Due to mine sequencing zinc production is expected to be somewhat lower increasing our cash cost and all in sustaining cost per ounce guidance due to lower expected byproduct credits.
Capital guidance is unchanged at 47% to $50 million.
Greens Creek truly is a premier silver mine, the 11th largest in the world, and I want to congratulate the team on delivering excellent and consistent results at this truly world-class asset.
Greens Creek truly as a premier silver mine, the 11th largest in the world and I want to congratulate the team on delivering excellent consistent results of this truly world class asset.
Turning to slide 10, I'm excited to report that we've been executing well on our plan to transition Castle priority to a fully open pit operation by mid 2024.
Turning to slide 10, I'm excited to report that we've been executing well on our plan to transition Casa berardi to fully open pit operation by mid 2024.
The mine produced approximately 24,000 ounces of gold at a cash cost of $1,475 and an all-in sustaining cost of $1,695.
The mine produced approximately 24000 ounces of gold at a cash cost of <unk> hundred $75 in an all in sustaining costs of $695 1000.
Mail throughput was lower than the previous quarter due to a planned upgraded gravity search.
Mill throughput was lower than the previous quarter due to a planned upgrade gravity circuit.
We're optimizing that circuit now and expect it to enhance overall plant recovery.
We're optimizing that circuit now and expect it to enhance overall plant recoveries.
The first phase of the in-house open-pit fleet was commissioned this quarter, resulting in record tons moved.
The first phase of the in house.
Fleet was commissioned this quarter, resulting in record tons moved.
the execution of our plans on track and good performance on cost control. We are lowering our cash cost guidance to 1600 to 1800 per ounce.
With the execution of our plans on track and good performance on cost control, we are lowering our cash cost guidance to 1600 to 1800 per ounce.
The mine remained on track to achieve its production and all ends is gaining cost guides.
The mine remains on track to achieve its production and all in sustaining cost guidance.
Carlos was General Manager of Lucky Friday Mine until just a few months ago, when he was promoted to Vice President of Operations. Progress and consistency, we've seen from the Lucky Friday over the past few years, was largely a result of Carlos and his team. As I will retire at the end of the quarter, I'll hand him the reins to discuss the remainder of the operations. Thanks, Lorraine.
Carlos was general manager at Lucky Friday mine until just a few months ago. When he was promoted to vice president of operations. The progress consistency, we've seen from the Lucky Friday over the past few years was largely a result of Carlos and his team.
I will be retiring at the end of the quarter I'll add him to range to discuss the remainder of the operations.
Thanks, Laura and good morning, everyone.
I will start on slide 11. However, before we discuss the progress made at Lucky Friday, I want to congratulate our team at Lucky Friday for receiving the 2023 NIOSH Mind Safety and Health Technology Medal Section Innovation Awards for the UCD Minimum.
I will start on slide 11, however, before we discuss the progress made at Lucky Friday electrical Gratulate our team at Lucky Friday for receiving the 2023 mine safety and health technology.
Innovation Awards.
The UCD mining.
In addition, we also received the US packing in the third quarter.
In Asia, We also received the U S and in the third quarter.
In others, we report a fire of the Lucky Friday in the number two shop, which is also the secondary address. The fire was extinguished in December . However, the operations of the mine are suspended for the remaining of the year until the secondary address is stopped.
In other we reported a fire at the Lucky Friday in the number of key shop, which is also the secondary egress.
The fire extinguisher timber however, the operations of the mine are suspended for the remainder of the year until the secondary egress.
Mitigation plans include driving around vertical skateway and event race to bypass the damaged portion of the shaft.
Our mitigation plans, if you will driving around.
This gateway and have embraced bypass damaged portion of the shops.
The ramp.
And the latter way race will serve as a secondary aggress with the vein race serving as a bypass for ventilation.
And the latter way race with settlements of secondary interest with Zain raised that arena bypass Burbank th.
To explain our mitigation plans in more detail, I will turn to slide 12.
We explained our mitigation plans in more detail I will turn to slide 12.
I will start with the graphic on the left.
I will start with the graphic on the left. First, I want to highlight that the lucky Friday has suasha. Let's start at the source.
First I'd like to highlight at the Lucky Friday has three shop staff.
On the surface the silver shaft, which is the left graphic is the less competition and the number two shop.
silver shaft which in the left graphic is the left of the two shaft and the number two shaft.
Silver shaft is our main production shaft. It is a circular concrete line shaft. It moves people, equipment, materials, and it's critical for our operations and lucky price. This is the shaft where the service oil is wasn't installed early this year and is unaffected by the fire.
These are very sharp is our main production shop. It is a singular concrete line shop in most people equipment materials and it's critical for our operations on Lucky Friday.
This is the shop with established always lesson installed earlier this year and is unaffected by the fire.
To the right of the silver shaft is a graphic, is the number two shaft, where the fire occurred about halfway down.
So the write up the <unk> shop.
<unk> is the number two shafts.
<unk> about highly doubt.
This shaft provides ventilation and in an emergency an alternative way to leave the mine.
<unk> provides 19 Asia, India, and American C and affirm that the way to lead the market.
Between the two shafts is the new 850 foot bend raise we are driving for ventilation, show infusion.
Between the two shaft is a new 880 seafood band range, we are driving for banks in Asia.
<unk> future.
The graphic on the right shows the plans in future to reestablish the secondary aggregate.
The graphic underwrite shelves the planting future to reestablish the secondary egress.
The plans comprise an extension of 1,600 foot drift or ramp. And from this ramp, we will install a 290 foot vertical escape race. Basically, a ladder with landing.
The plants comprised an expansion of 1600 right around and from DRAM, We went and installed.
90 fluid bearing escape rates basically a ladder with landings.
Once complete, the infrastructure will allow for the mind to re-sum production.
<unk> infrastructure will allow for the mine to restart production.
The scapeway is the critical part of production and is on the schedule.
It's gateway is the critical path to production and is on schedule.
35% of the RAM and 10% of the raised complete. The ventilation...
With 35% of the Ram and 10% of the raise completed.
The ventilation raise war has yet to be done.
These mitigation plans are expected to cost about 10 million, and we expect the mine to restart production in January of next year.
These mitigation plans are expected to cost about and Nielsen and we expect the mine to restart production in January of next year.
We have properties and business interruption insurance with an underground sublimit up to $50 million. I will not move to
We have property.
I think your option insurers with Ananda it rounds to blame at up to $50 million.
I will now move to slide 13.
As Bill mentioned earlier.
I still mention that earlier, the safety performance of Pinohil has not been too heckless done.
Deeper pharmacy, Keno Hill has that Bluetooth scanners.
So I am on my way with my team to assess what needs to be done to get safely where it needs to be.
I am on my way with my team to SaaS, what needs to be done to get safely where it needs to be.
With the mine just starting, this is a critical time to establish the culture we want at Keno Hill. Easier now than later.
With the mind, yes, sorry. This is a critical time to establish the culture, we've learned that Keno Hill easier now than later.
You know how it has produced almost 100,000 ounces a year. 700,000 in the third quarter.
Has produced almost 900000 ounces a year.
100000 in the third quarter.
I expect in the fourth quarter we will produce between 900,000 and a million hours.
I expect that the fourth quarter, we will produce between 800001 million ounces.
We have the Shulkrit Plan Commission, Office of the Nudrae of the Plotor, expanded campuses, 8,000 feet of development, 10,000 headings, and the modified secondary crush. We are in a good position for the strong 24. If we can get...
The short trip planned commissioning of its another dry at the Florida expanded <unk> facilities 8000 feet of development and are heading in the multi site secondary crusher.
We are in a good to see some phone a strong 24.
If we can get the safety right.
Slide shows.
Slide 14 shows two of our critical projects, the secondary crusher on the left and the shock grid plan on the right. With that, I will.
Slide 14 challenge to all of our critical projects the secondary crusher on the left on the shelf plan of it right.
With that I will pass the call back to Phil.
Thanks, Carlos. So on slide 15.
Thanks, Carlos So on slide 15, just a little bit on the exploration at keno with the tons. We mined we've been really pleased with Phoenix grade 33 ounces per ton rock as an MSR value in excess of $700.
Just a little bit on the expiration of Keno. With the tons we've mined, we've been really pleased with Keno's grade at 33 ounces per ton. The rock has an NSR value in excess of $700.
And our exploration team is finding more in a number of deposits, but we'll just talk about Birmingham. So let me orient you on this slide. The Birmingham has a number of zones, bare, Arctic, Northeast, deep.
And our exploration team is finding more in a number of deposits, but we will just talk about bermingham. So let me Orient you on this slide the Bermingham has a number of zones bear Arctic northeast deep.
And we're going to be mining here for a long time. The images that you see.
And we're gonna be mining here for a long time the images that you see.
are only of the bear and the image on the on the left is the bear vein and on the right is the foot wall vein and there's a third vein that is not shown called the main vein. I've got to think about names of veins you know it's a little bit confusing but so you got the the bear zone with the bear vein the foot wall vein and the main vein.
We are only at the bear in the in the image on the on the left is the bear vein and on the right is a footwall vein.
And there's a third thing that not shown called the main vein and I've got to think about names of veins.
So it's a little bit confusing, but so you've got the the bare zone with the bear vein, the footwall vein and the main thing.
So looking at the image on the left to the northeast, outside the current design stopes, we are identifying another mineralized chute in the ready clips. Grade appears high enough to have the potential to add to our resources. The best told.
So looking at the image on the left to the northeast outside the current design stopes.
We're identifying another mineralized shoot and the ready clips great appears high enough to have the potential to add to our resource best hole.
is about 163 ounces over 7 feet.
About 163 ounces over 700 feet.
So, if you look at the right image, and this is the footwall vein, this is within the currently planned stopes, and we have 36 feet of 36-ounce and 17 feet of 56-ounce.
So if you look at the Ryan mentioned this is the footwall vein. This is within the currently planned stopes and we have 36, 5% to 36 ounce 17 feet 56 ounce and we don't yet have the results on the main thing drawing point is.
And we don't yet have the results on the main vein drilling. Point is, there is the likelihood to continue to grow high-grade resources at Keno. We could not be more excited about the exploration results that we're having and the potential that we have in the future.
There is the likelihood to continue to grow high grade resources at Cana, we could not be more excited about the exploration results that we're having and the potential that we have in the future.
So slide 16 summarizes our production cost guidance for the year, and we are reiterating our consolidated cost guidance for silver, but lowering the silver production guidance slightly, as I previously mentioned. Gold cash costs are a little lower. Capital is unchanged. Also on this slide, you can see the ramp-up costs for Kino and Lucky Friday suspension costs for the year.
So slide 16 summarizes our production and cost guidance for the year and we are reiterating our consolidated cost guidance for silver, but lowering the silver production guidance slightly as I previously mentioned gold cash costs are lower capital is unchanged.
Also on this slide you can see the ramp up costs for Keno and Lucky Friday suspension costs for the year XP.
expiration is unchanged and as we look ahead to 2025 we we think we're still on track to produce up to 20 million ounces. So if you go to slide six.
Exploration is unchanged.
And as we look ahead to 2025, we think we're still on track to produce up to 20 million ounces. So if you go to slide 17.
And before I open the call for questions I want to I want to end our prepared remarks, focusing on the expected increase in solar energy last year globally 269, Gigawatts of solar was installed and the international Energy Agency estimates that in seven years, the world is going to install.
And before I open the call for questions, I want to end our prepared remarks focusing on the expected increase in solar energy. Last year, globally, 269 gigawatts of solar was installed, and the International Energy Agency estimates that in seven years, the world's going to install about twice as many solar panels this year, about 500 gigawatts.
About twice as many solar panels this year about 500 gigawatts.
And that's not an unreasonable estimate, it's a 9% growth rate.
And that's not an unreasonable estimate.
9% growth rate and that actually compares to a 12% growth rate that we've had over the last 10 years.
And that actually compares to a 12% growth rate that we've had over the last 10 years.
Now, it takes half a million ounces of silver for every gigawatt installed. So last year, that was 140 million ounces, or 12% of the total demand for silver.
Now it takes half a million ounces of silver for every gigawatts installed. So last year that was 140 million ounces or 12% of the total demand for silver and.
2030, with 498, Gigawatts solar we're going to use 100 million ounces more almost 250 million ounces, which would be 21% of the demand its overall demand doesn't grow.
And that's not likely there's there's you know other uses for silver that will see increased demand
And that's not likely there is.
Other uses for silver that we'll see increased demand.
Now to put the hundred million ounces of demand in context, the production for every year
Put the 100 million ounces of demand in context, the production for every year.
of two more, is two more of the largest.
Two more two more of the largest.
So mines in the world that produce silver, they're actually not silver mines, it's not a silver mine, but it produces about 50 million ounces. Or it's 10 Grims Creek, which is the 11th largest silver mine.
So mines in the world that produce silver theyre actually not silver mines.
Silver mine, but it produces about 50 million ounces or it's 10 minutes 10, Greens creeks, which is the 11th largest silver mines.
Clearly, the additional demand for silver that we have in the next seven years is not going to be met by more mine production. Even if there's discoveries of silver, you're not going to be able to get an impermanent or constructed in that seven year time.
Clearly the additional demand for silver that we have over the next seven years is not going to be met by more mine production.
Even if theres discoveries of silver you are not going to be able to get a permit are constructed in that seven year timeframe.
So that's going to come from, to meet that demand, it's got to come from above ground supply, which is going to require substantially higher prices to be mobilized.
So that's going to come from.
To meet that demand and it's got to come from above ground supply, which is going to require substantially higher prices to be mobilized.
Finally, I'm going to be the chairman of the Silver Institute for the next two and a half years. And as a result of that, I was invited to speak at the LBMA conference three weeks ago. And what I was struck by from that conference is that very well-respected, knowledgeable market participants are thinking about silver in the same way they have for the past four years, primarily as torqued gold.
Finally.
I'm going to be the chairman of the Silver Institute for the next two and a half years and as a result of that I was invited to speak at the <unk> conference three weeks ago.
And when I was struck by from that conference is very well respected knowledgeable market participants are thinking about silver in the same way to have for the past 40 years, primarily as torque goals.
And I would just encourage you to think about silver differently, because the demand for silver is so tied to changing our energy sources, it's not going to behave as it has in the past. So while gold goes up, I'm sure silver will, and while copper goes up, I'm sure silver will. But if solar demand is, as I have outlined, then a higher silver price, regardless of what gold and copper do, is inevitable.
And I would just encourage you to think about silver differently because the demand for silver is so tied to changing our energy sources, it's not going to behave as it has in the past so while gold goes up I'm sure silver will and while copper goes up I'm sure silver will but if solar demand is as I have outlined.
Higher silver price, regardless of what gold and copper.
Is inevitable.
And with that what I'd like to do is indeed as you said you got a question from one of the analysts that's traveling and why don't you tell me what that question is that's right. Phil. So we have a question from Mike Parkin of National Bank <unk> Transit Center.
And with that, what I'd like to do is, Indita, you said you got a question from one of the analysts that's traveling, and why don't you tell me what that question is? That's right, Phil. So we have a question from Mike Parkin of National Bank. He's in transit, so we'll send him on this question. The question is, what are management's thoughts on potential timeline to get Keno Hill operating to HETLA standards of practice?
Question.
Question is what are management's thoughts on potential timeline to get Keno Hill operating to Hecla standards of practice.
Well, you know, I think that I'll make some comments and I'll turn it to Lauren and Carlos, but I think
Well I think I'll I'll make some comments and I'll turn it to Loren Carlos but I think.
Now fundamentally, we will ever reach our standards of practice. It's a continuous improvement effort. And so it will take some time. But to get to, you'll never get there, basically.
But fundamentally we will never reach our standard practice.
Our continuous improvement effort and.
And so it will take some time, but.
To get to you'll never get there basically.
But we're gonna send Carlos and his team is gonna go there and they're just going to make sure that we are.
But.
We're going to send Carlos and his team is going to go there and then just going to make sure that we are.
have all the processes in place, all the procedures, we're going to make sure that
Have all the processes in place all the procedures, we're going to make sure that there is an understanding at the site.
There's an understanding at the site of the importance of safety and to follow the practices and procedures. That's
The importance of safety and follow the practices and procedures. That's that's that really is the starting point and then it's how do you engineer out.
that's that really is the starting point. And then it's how do you engineer out risk?
Fortunately, with the infrastructure that we're putting in, we're in a very good place to see that.
Risks Fortunately with the infrastructure that we're putting in we're in a very good place to see that happen.
But with that, I'll turn it over to the two of you. Lauren, anything to add? Sure. I'll start and then I'll pass it to Carlos.
Happen.
But with that I'll turn it over to the two of you Lauren anything to add sure I'll start and then I'll pass it to Carlos.
I think the way to think about Kino in the past year, we've been very focused on the initial my development in building out the infrastructure.
I think the way to think about Kino as in the past year.
Been very focused on the initial mine development and building out the infrastructure.
And that phase is essentially coming to a close now. And as Phil suggests, there was an evolution of our process even within that phase of the work. And now we need to turn our focus to our operational practices and delivering against our operational commitments. And to that end, Carlos and a group of people from our corporate tech services team are heading up there this week to begin that process.
And that phase is essentially coming to a close now.
As <unk> suggests there was an evolution of our process even within that phase of the work.
And now we need to turn our focus to our operational practices in delivering against our operational commitments and to that end of Carlos and a group of people from our corporate Tech services team are heading up there this week to begin that process.
Promise or we can go in the details. Yeah, we are getting close and we are making progress that sets these or priority and we are taking sure that we have the right people, not the right time in the right place, with all the materials and equipment in place. So it's gonna take some time. We still don't know, we are gonna, we are expecting to complete the initial assessment, you know.
Yeah I can go into details, yes, we are getting close saying, we are making progress that SaaS needs our priority and we are making sure that we have the right people at the right time in the right place.
With all the materials and equipment.
So it's going to take some time, we still don't know.
We are expecting to complete the initial assessment.
Sure.
before the end of the year, and then after that we are going to execute the plan.
Before the end of the year and then after that we had when we executed the plan.
So we'll, you know, I guess what I will suggest to you is, we will have substantial production from Keno in 2024, we will give you exactly what we think we'll have when we give the guidance for 2024, early in the new year.
Well I.
I guess, what I will suggest to you is we will have substantial production from from Keno.
2024, we will we will give you exactly what we think will have when we give the guidance for 2024 early in the new year.
So.
any other questions in detail before we take it from the operator. Okay operator you can open the call for questions.
Any other questions in detail before we.
Take it from the operator.
Okay, operator, you can.
Open the call for questions.
At this time I'd like to remind everyone in order to ask a question, press star then the number one on your telephone keypad. We'll pause for just a moment to compile any questions.
At this time I'd like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad, we'll pause for just a moment to compile any questions.
Again, if you'd like to ask a question, please press star one in your telephone keypad.
Again, if you'd like to ask a question. Please press star one on your telephone keypad now.
Yeah.
Our first question comes from the line of Heiko Ile with HC Wainwright. Please go ahead.
Our first question comes from the line of Heiko with.
With H C. Wainwright. Please go ahead.
Hey there, thanks for taking my questions and I'll also join Phil in thanking Lauren for all he's done for the farm. Didn't realize you were at the farm since you were a summer intern.
Hey, there thanks for taking my questions and I'll also joined full and thinking Lauren for all these onto the farm didn't realize you were at the firm since you were somewhere in third.
Yes, it started a long time ago.
Oh well.
This builds a little bit on the emailed-in question, but I mean there's been some mine infrastructure delays at Keno Hill. We're not concerned about it, especially since it seems like drilling at site continues to go quite well, but can you provide some color on what exactly you're seeing and then also the timelines and anticipated costs to remediate the issues that you're still being faced with?
This feels a little bit on the emailed in question, but I mean, there's been some somebody's infrastructure delays at Keno Hill were not concerned about it especially since it seems like drilling site continues to go quite well, but can you provide some color on what exactly you're seeing and then also the timelines and the anticipated cost to renew.
The issues that you are still being faced with.
You know, look, I think the short answer is it's a variety of things. It's not just one thing. And so that goes to the culture that's developing at the site. And, you know, we're just in the, if you think about it, we've only been operating for about five months. And so as a result, you know, and you have people that are coming from all over Canada.
Look I think the short answer is it's a variety of things. It's not just one thing and so that goes to the culture. That's developing at the site and we're just in the if you think about it we've only been operating for about five months and so as a result.
And you have people that are coming from all over Canada.
from different minds, they've had different set of expectations, different set of practices. They will describe the same thing, use different words describing the same thing. And so, becomes a communication issue. So it is not, there's not a, you know, sort of a,
From different mines, they've had different set of expectations different set of practices. They will describe the same thing you use different words, describing the same thing and so.
<unk> becomes a communication issue. So it is it is not there's not a.
Sort of.
You know, one thing that we need to do, it is really about the culture. You guys add to that. Yeah, I agree, Bill. Keno is rather unique in the sense that it's effectively a melting pot of the Canadian mining districts from east to west.
One thing that we need to do it is really about.
About the culture, you guys add to that.
I agree bill.
The keynote.
Rather unique.
Since that it's effectively a melting pot of Canadian mining districts from east to West.
So there's really no critical mass of miners or supervision from any one area. And as a consequence, we need to build the culture from scratch the way we, as Hekla, want the culture to be. And that's going to take us a little bit of time, but the production will come.
So theres really no critical mass of miners or supervision from any one area and as a consequence, we need to build the culture.
<unk> scratched the way, we hecla, we want the culture to be that's going to take us a little bit of time, but the production will come.
along with that evolution in the culture, and as the culture comes together, the production will improve. So it's a normal process, actually, at the beginning of a mine. A bit unique at Keno, given the diversity of people there. But, you know, it's behaviors, and it's behaviors, you know, from the miners and their supervisors, and, you know, throughout the organization, and it's changing the attitudes so that the behaviors change.
Along with that evolution in the culture and as the culture comes together that production will improve so it's nor.
Normal process actually at the beginning of the mine a bit unique aquino given the diversity of people there, but its behaviors and its behaviors.
From the miners and their supervisors.
Throughout the organization and it's changing the attitudes behaviors change.
No that makes that makes sense.
A completely different one. You maintain your capital guidance. Can you provide some color on what you're seeing in regards to inflation for expenses? As in, where are we compared to what you were expecting? And just in general, what you're seeing in regards to cost inflation, which line items are better, which may be a little bit worse than you had expected? And on that same token, any bottlenecks for availability of anything?
Completely different one you maintained your capital guidance can you provide some color on what youre seeing in regards to inflation for expenses as in where are we compared to what you were expecting and just in general what youre seeing in regards to the cost inflation, which line items are better or which may be a little bit worse than you had expected.
And on that same token any bottlenecks for availability of anything.
You know, I will turn it over to, you know, Lauren and Russell and Carlos. I mean, from my perspective, the inflationary pressure has, is reduced. I have no, there's no doubt that there's probably some, some items within.
I.
I will turn it over to Loren and Russell and Carlos I mean from my perspective.
The inflationary pressure has.
Is reduced.
Of note there is no doubt that theres, probably some some items within.
the capital and the operating costs that are feeling inflationary pressure, but it's not like what we had previously. Oh, for sure.
The.
Capital and operating costs that are feeling inflationary pressure, but it's not like what we had previously oh for sure.
You know, it's just inflation tends to be a sticky thing, Heiko, so it comes quickly and it abates slowly, but we're not seeing the big increases that we did. I would say things are relatively flat. Fuel is starting to moderate.
It's just inflation tends to be a sticky thing heiko. So it comes quickly into debate slowly.
But we're not seeing the big increases that we did I would say things are relatively flat fuel is starting to moderate so.
We're not seeing any big changes now. I would guess in terms of supply.
We're not seeing any big changes now I guess in terms of supply.
We are able to get the equipment we need and the materials that we need. Some items are longer lead than they were pre-COVID. Things like transformers are...
We are able to get the equipment, we need and the materials that we need some items are longer than they were pre COVID-19 things.
Things like Transformers are.
very slow, very long lead, but even those items are beginning to shorten in terms of lead time. Probably the most challenging aspect is skilled trades and I think everybody in the industry is facing that same challenge. And it's a bit of a generational thing. We are seeing the...
Very slow very long lead, but even those items are beginning to shorten in terms of lead time.
Probably the most challenging aspect is skilled trades and I think everybody in the industry is facing that same challenge.
And it's a bit of a generational thing we are seeing the.
Older guys starting to retire and fewer folks coming in. So we're hiring relatively inexperienced people in training.
Older guys, starting to retire and fewer folks coming in so we're we're hiring relatively inexperienced people in training.
We've seen this before, probably a couple decades back, but we're experiencing that.
We've seen this year or probably.
A couple of decades back but.
We're experiencing that.
Thanks, Paul.
That's it for me, I'll get back in queue. Thank you.
For me I'll get back in queue. Thank you.
Thanks Heiko.
Our next question comes from the line of Michael <unk> with RBC capital markets. Please go ahead.
Our next question comes from the line of Michael Sperko with RBC Capital Markets.
Thanks, thanks very much all for taking my question. Maybe shifting gears to Lucky Friday. So you've outlined the three key items that, or it sounds like the three key items that you need to complete to bring the mine back into production. Based on the commentary though, it looks like maybe you're about 15% done on the work that you need to do across those three items. Is that fair, or how should we look at the timing and effort?
Thanks, Thanks, very much for taking my question maybe.
Maybe shifting gears to Lucky Friday.
So you've outlined the three key items.
Or it sounds like the three key items that you need to complete to bring the mine back into production.
Based on the commentary, though it looks like maybe you are about 15% done on the work that you need to do.
Across those three items is that fair or how should we look at the timing and effort.
uh... required to to get uh... that that we have worked on
Required to get.
That rehab work done.
I mean, the short answer is, well, we will be done very early in January , you know, unless we have some major surprise. Carlos? Yeah, as today, we are between 35 and 40% of the project completed. And as you say, we are expecting.
The short answer is we will be done.
Very early in January.
Unless we have some major surprise Carlos yesterday, we havent been between 35% 30% of that.
Project completed.
And as you say we are expecting.
restart the mining starting in early 2024. And in fact, Carlos and I were underground yesterday looking at the progress and we are slightly ahead of schedule in some areas. So we were pleased with what we saw.
Restart the mining.
In early 2020, Florida.
Carlos and I were underground yesterday looking at the progress.
We are slightly ahead of schedule in some areas. So we're pleased with what we saw.
Okay. So.
Okay, so has the event bypass been been the raise been started yet? Just based on the commentary. It's not exactly Both raises both raise started and the ramp is 35% complete so yeah, we're both going 40
Bypass bin bin.
Ray has been started yet.
Just based on the commentary, it's not exactly like that.
Yes, yes, yes.
All three of US both started and the ramp is what percent of almost 35% complete so yes, both going.
Okay. Okay.
Okay. And then it's a contractor, Michael, it's a contractor that, you know, has come on that was mobilized on the better part of a month ago.
And then can you just said.
Specter, Michael it's a contractor that come on that was mobilized on the better part of a month ago.
and mobilize on the escape way first.
Mobilized on the.
The Escapeway first.
And it's more recently been mobilized on the ventilation. Realized the ventilation.
And.
More recently been mobilized on the.
Ventilation realize the ventilation.
doesn't have to be done to go back into production. It's the critical path is the escape way. We have enough ventilation.
Reyes doesn't have to be done to go back into production.
Critical path is the Escapeway, we have enough ventilation.
without the ventilation raised for a period of time.
Without the ventilation raise for a period of time.
Okay, that was going to be my follow up question on that. So the escape way is the critical path and you're comfortable with, say, I suppose we have, what, two months or so to get that done and to get Lucky back into production by, say, February ? Is that a fair way to look at it? January .
Okay that was going to be my follow up question on that so the escape ways, the critical path and you're comfortable with.
Disposal, we have.
What.
Two months or so to get that done and to get lucky back into production by saying February does that is that a fair way to look at it.
January.
Okay.
If it's February , if it's February , something unexpected has happened.
Yes.
February.
If something unexpected has happened.
Understood, okay. And then just on the insurance, can you share if or when you think you'll have visibility into what will be covered? Do you anticipate that entire $25 million you outlined in terms of costs at Lucky being covered plus business continuity? Is that the right way to look at it?
Understood Okay.
And then just on the insurance can you share if or when do you think you'll have visibility into.
What will be covered do you anticipate that entire $25 million you outlined in terms of of course lucky being covered plus business continuity is that the right way to look at it.
Well, what we will say is it will certainly be no more than $50 million and.
Well, what we'll say is it will certainly be no more than $50 million. And, you know, like anytime you have a claim with an insurance company, there's a process that we're in that process.
Like any time you have.
Claim with an insurance company there is a process that.
We're in that process.
And what the outcome is going to be, I'm not able to predict. But we're very confident that we will get a large portion of costs and business interruption.
What the.
The outcome is going to be.
Not able to predict but we're very confident that we will.
We will get a.
A large portion of costs and business interruption.
up to $50 million for us or anything that it's a work in progress. Obviously as we work through getting the lucky Friday back in, we're engaged with the insurance company and we're just working through the process at the moment. As more info comes to light or as that comes clear, then we can tell them.
Up to $50 million Russell anything that you can see.
It's a work in progress obviously as we as we.
Work through.
Getting Lucky Friday back and we're engaged with the insurance company and we're just working through the process at the moment as more as more info comes to light or is that comes clear then we can we can tell the market.
But should we be thinking about this as a six month kind of process or would this be something that would be wrapped up sort of in line with when Lucky comes back into production?
Should we be thinking about this as a <unk>.
Six month kind of process or would this be something that would be wrapped up sort of in line with when lucky comes back into production.
It depends on who you ask within the heck lives to be answered that question. Look, I think Michael, you know, just to be safe, you know, to think more in terms of six months than immediately, but I think they should pay us immediately. So, I would agree with that. I think that you from a conservativeity standpoint should push it out into the future a little bit, but that could change it anytime, right? That is where working through the process. Okay.
It depends on who you ask within Hecla has to be answered that question look I think.
Thank Michael.
Just to be safe.
<unk>.
I think more in terms of six months, then then immediately but I think they should pay us immediately so so I would agree with that I think that you firm from a conservatively standpoint should push it out into the future a little bit but that could change at any time right as we're working through the process.
Okay understood. Thanks, very much I'll pass it on.
Okay.
Right.
<unk>.
Our next question comes from Alina Lucas Pice with B. Riley Secure.
Our next question comes from the line of Lucas pipes with B Riley Securities. Please go ahead.
Please go ahead. Thank you very much, operator. Lauren, I would like to add my congratulations.
Thank you very much operator, Laura and I would like to add my congratulations.
I wanted to start my questions with.
I wanted to start my questions with Phil, what you mentioned down on the silver solar side. What would be a substitute for a silver in a PV solar panel?
Phil you mentioned down on the silver solar side.
What would be a substitute for silver and a PV.
Solar panel.
Ultimately it would be copper.
is the substitute for it. The problem is the processes for building the solar is you gotta use our buildings, so you gotta use silver for giving those processes. And then secondly, the performance and the durability of the solar panels is substantially less with copper.
As the as the substitute for it.
Problem is the processes for building.
Solar is.
As.
You got to use our buildings. So you got to use silver.
Given those processes and then secondly, the performance and the durability of the solar panels is substantially less with copper.
So is there a price in which the industry would change? Yeah, I'm sure there is. You know, but at the same time, you're seeing, you know, copper prices, you know, increase in the availability of copper. So
So is there a price in which the industry would would change.
I'm sure there is.
But at the same time you're seeing.
Copper prices.
The increase in the availability of copper so.
It's certainly nothing that anyone is projecting to occur in the next decade.
Certainly nothing that anyone is projecting to occur in the next decade.
The other thing to mention is that there are new processes.
The other thing dimension is that there are new processes.
on the new plans that are being built. They're all being built with processes that require even more silver. And they require that because it's not only cheaper to build, but it's also has greater efficiency.
On the new plants that are being built they are all being built with with processes that require even more silver and they require that because it's there.
Not only cheaper to build but its also has greater efficiency.
and realize these solar panels are somewhere around 25 to 30% efficiency using silver. And so with these new processes, it gets to the upper end.
And realize these solar panels are somewhere around.
25% to 30% efficiency using silver.
And so with these new processes it gets to the upper end of that.
That's helpful. Phil from your vantage point as a silver supplier it doesn't make any difference to you whether these solar panels are built in.
That's helpful. Phil, from your vantage point as a silver supplier, does it make any difference to you whether these solar panels are built in Asia or are near shore to the U.S., for example?
In Asia or are.
Near short.
The U S. For example.
You know, I guess, practically speaking, it doesn't matter from just a, you know, thinking about supply chain, it would be great to see it built, you know, in U.S. or.
I guess practically speaking it doesn't matter from a from just.
Thinking about supply chain it would be great to see it built.
In the U S or.
or countries friendly to the US, friendlier maybe is better with saying that, you know, without the potential disruption and...
Our country's friendly to the U S.
Friendlier, maybe is a better way of saying that.
Without that.
Potential disruption.
cells coming from China, because China does, I don't know, 80, 90% of all the solar panels.
Selves coming from China, because China does I don't know, 80%, 90% of all the solar panels.
Yeah.
Would you have.
Would you have conversations about off-take agreements or supply agreements with...
Conversations about off take agreements or supply agreements with potential customers.
<unk>.
Yeah, they remember what we produce as a concentrate that goes to the smelters. And unfortunately, there are no smelters that can... Well, they're not very many smelters in the US, and there's none that can really process our material.
Yes, well remember what we produce a concentrate that goes to the smelters and unfortunately.
There are no smelters that Kim.
But when they are not very many smelters in the U S and there is none that can really process are material.
You know, there's in Canada, there's a few smelters that can process it. But frankly, we have to ship the material really to Korea and Japan to get it processed. And so we're a step away from that ultimate customer.
In Canada. There is a few smelters that can process it but frankly, we have to ship the material really to Korea, and Japan to get it to get it processed and so we're a step away from that ultimate customer.
Um, you know, it goes into the smelter. We don't, we don't receive the metal back.
It goes into the smelter, we don't we don't receive the metal back.
where we pay a fee treatment charge for processing that material.
Sure.
We pay a fee treatment charge.
Processing that material.
Yeah.
Okay.
Helpful.
certainly keep my eyes on best. To go back to Kino.
Certainly keep my eyes on that.
<unk>.
Go back to to Keno.
Can you remind us what exactly costs to slow down in the infrastructure development?
Can you remind us what exactly caused the slowdown in the infrastructure development.
I mean, I think the cause of the slow down is, in part, you know, we're located, you know, in the Yukon getting people and materials there. You know, that's probably been the biggest, biggest challenge that we've had. Having camp space, you know, getting, you know, you got to get things sort of aligned where you got the camp space expanded. So you now have the room to bring the people in to do the work. Lauren, the...
I mean, I think the cause of the slowdown is in part.
The where we're located in the Yukon getting people and materials there.
That's probably been the biggest biggest challenge that we've had having.
Having camp space.
Getting you Gotta get things sort of aligned where you got the camp space expanded and so you now have the room to bring the people and to do that do the work.
Lauren.
And Carlos.
grows? Well, we bring the contractors and almost 25% of our total workforce at the same time. So that that causes some delays on the execution of the project.
We bring the contractors.
And most 25% tariff.
At the same time.
That cost us some delays on the execution of the projects.
But the good news Lukas as Ware.
But the good news, Lucas, is we're essentially done with those infrastructure projects. You know, there's some cleanup that we'll be doing during the course of November on some of the projects. The Rockville plant will be completed the end of this month. We're done with the...
Essentially done with those infrastructure projects.
There is some some cleanup that will be doing during the course of November on some of the projects.
The Rockville will plant will be completed at the end of this month.
We're done with the.
<unk>.
The crusher, with the exception of some electrical work that will happen during the course of November . So, you know, all of that is behind us and when we look at capital for next year, it's substantially less than what we have. And while we're not done with the budget and we're not prepared to give guidance as to what capital will be, it is a lot less.
The crusher with the exception of some electrical work that will that will happen. During the course of November so all of that is behind us.
When we look at capital for next year.
It's substantially less than what we had.
We're not done with the budget and we're not prepared to give guidance as to what capital will be it is a lot less.
That's helpful. When would you expect to demobilize some of the contractors and workforce?
That's helpful.
You expect to demobilize some of the.
Contractors.
Book or something there.
Some of it is happening as we speak, but primarily in December .
Some of it's happening as we speak but primarily in December.
Okay.
That's helpful really appreciate the color. Thank you and best of luck.
That's helpful. I really appreciate the color. Thank you and best of luck.
Thanks, a lot.
Our next question comes from the line of Stephen Greene with TD Securities. Please go ahead.
Our next question comes from a line of Stephen Green with TV securities. Please go ahead.
Hi everyone. Just a quick one on Greens Creek. You upped the guidance a bit this year. You also beat guidance a bit last year. It appears to be grade driven. Can you confirm that? Is this positive grade reconciliation you're getting or just in some higher grades?
Good morning, everyone. Just a quick one on Greens Creek.
Yes, you up the guidance a bit this year you also beat guidance a bit last year.
Here's to be great great.
Great driven can you confirm that and is this is this positive grade reconciliation, you're getting or or just in some higher grade stopes.
It is grade driven and it is slightly higher, you know, realize it doesn't take much additional grade.
It is great driven than it is.
Slightly higher.
Realize it doesn't take.
Much additional grade.
to have a pretty material impact. Gold in particular has been, the grade reconciliation has been higher and that's something that we have had to deal with for the life of the mine. It's a fairly nuggety gold distribution. And of course, we've had lower grade base metals. And so as a result of that, we've had lower.
To happen.
Pretty material impact.
Gold in particular has been the grade reconciliation has been been higher and that's something that we have had to deal with for the life of the mine, it's a fairly negative gold.
Distribution and in and of course, we've had lower grade base metals and so as a result of that we've had lower.
You know, it's kind of an odd thing. You produce more gold, produce more silver, but because you have less.
Yes, it's a it's kind of an odd thing you produce more gold produced more silver, but because you have.
Less and less.
less lead and zinc per ounce and gold per ounce, you end up having a higher cost per ounce. But because you've got more ounces for it to be applied against. But yeah, it is a slightly positive grade reconciliation. Anything to add, Loren? No, that's a fact.
<unk> lead and zinc per ounce and gold per ounce, you end up having higher cost per ounce. So.
But.
As you got more ounces for it to be applied to slight against so.
But yes it is.
Slightly positive grade reconciliation anything to add no.
Okay, and, you know, we're, we're a couple of months away from 2024 now, and I think your, your previous kind of long term guidance suggested.
Okay.
We're a couple of months away from 2020 for now and I think your your previous time long term guidance suggested.
a plenty lower grades, silver grades at least, in 2024. How is that looking now, and this recent performance, do you expect that to bleed into next year as well?
Okay.
Slightly lower grades silver range at least in 2024, how is that looking now and this recent outperformance do you expect that to bleed into next year as well.
Yeah, look, I think generally speaking, you will see over the course of the next decade, slightly decreased grades at Greens Creek. And it's just a function of trying to maximize the NPV of the of the asset. So so yes, expect expect lower grades. You know, part of what the way we're trying to offset that is increased throughput. And so that's why
Yes look I think generally speaking you will see over the course of.
The next decade slightly decreased grades at Greens Creek, and it's just a function of.
So im trying to maximize the NPV.
The asset.
So, yes expect expect lower grades.
Part of what the way, we're trying to offset that is increased throughput and so that's why you've seen us.
moved to try to get to this 2600 tons a day. To put that in a context, when we took over operation of Greenstrike, when we purchased the portion we didn't know in 2008, the throughput was roughly 20, 100, maybe a little less.
Move to try to get to this 2600 tonnes a day to put that in context, when we took over operator ship green.
Green Street, when we purchased the portion we didn't know.
2008, the throughput was roughly $1 100, maybe a little less.
uh tons per per day so we're now at you know 2600 and we've gone from maybe a quarter of the
<unk> tons per day. So we're now at 2600, and we've gone from maybe a quarter of the <unk>.
the tons being long hold to very, very little of it. So it is a huge accomplishment within the mind. And then in the middle, it's much more than anyone ever thought that that mill would be able to do. So it's been quite an accomplishment that these guys have done it at Green's Creek. engine. A A
<unk> being long hole to very very little of it. So it is a huge accomplishment within the mine and then in the mill.
It's much more than anyone ever thought that mill would be able to.
To do so.
Been quite an accomplishment that these guys have done it at Greens Creek.
I would, you know, they're always looking for a way to improve the operation. And so I wouldn't be surprised if they don't find ways for improvement, but generally speaking, we should see somewhat lower production as the grades, as the grade decline.
They're always looking for a way to improve the operation.
So I wouldn't be surprised if they don't find ways for improvement but.
Generally speaking, we should see somewhat lower production as the grades.
Greg declines.
Okay. So just remember.
Okay, just remember, remember on recoveries, recoveries have gone up dramatically, you know, it's, I'm trying to remember the numbers, but it's five, six percent. It's a lot. And even move the move from 2,300 to 2,600 tons a day, we saw no meaningful degradation in recovery.
Remember on recoveries recoveries have gone up dramatically.
I'm trying to remember the numbers, but it's 5% to 6% it's a lot.
Even move to move from 'twenty 300, 2600 tonnes a day, we did we saw no meaningful degradation recovery.
And so so.
Yes.
And don't don't get too enthusiastic over over what these guys can do you know let's let's start with what the what the grade and you know the numbers would suggest but
And don't get too enthusiastic over over what these guys can do.
Let's start with what the what the grade.
The numbers would suggest but.
You know, this is a great team that works up at Greens Creek.
These are this is a great team that works up at Greens Creek.
Okay. Okay fair enough that's helpful. Thanks.
Yes.
Again, as a reminder, if you'd like to ask a question, please press star one on your telephone keypad now.
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There are no further questions at this time I would now like to turn the call over to Phil Baker for closing remarks.
There are no further questions at this time. I would now like to turn the call over to Phil Baker for closing remarks.
Okay, well thanks for the question listen we really enjoy the engagement that we have with you and so I'll remind you that we have the opportunity if anybody wants to have a one on one call with.
Okay, well, thanks for the questions. We really enjoy the engagement that we have with you. And so I'll remind you that we have the opportunity, if anybody wants to have a one-on-one call with...
know, one of us, we have time set up to do that. So please take advantage of that. I also want to just thank the teams of people that Hecla has that it's really made Hecla a unique silver producer. And again, I want to thank Loren for his service to us. And with that.
One of US we have.
<unk> set up to do that so.
So please take advantage of that and I also want to just thank the teams of people that Hecla has really made hecla unique silver producer and again I want to thank Loren for his service to us.
And with that have a great day.
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