Q1 2025 Hecla Mining Co Earnings Call

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Bailey: Good morning and thank you all. Thank you for standing by. My name is Bailey and I will be your conference operator today.

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Daily: My name is daily and I'll be your conference operator today.

Bailey: At this time, I would like to welcome everyone to the Q1 2025 Hecla Mining Company Earnings Conference. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star and 1.

Daily: At this time I would like to welcome everyone to the Q1 2025, Hecla mining Company earnings Conference call.

Daily: All lines have been placed on mute to prevent any background noise.

Daily: After the Speakers' remarks, there'll be a question and answer session.

Daily: If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad.

Daily: If you would like to withdraw your question again press Star and one.

Mike Parkin: I would now like to turn the call over to Mike Parkin, Vice President, Strategy and Investor Relations. You may begin.

Daily: I would now like to turn the call over to Mike Parkin, Vice President strategy and Investor Relations you may begin.

Daily: Good morning, and thank you all for joining us for Hecla's first quarter 2025 results conference call I Am Mike Parkins, Vice President strategy Investor Relations earnings release that was issued yesterday along with today's presentation are available on our website on the call today is Rob <unk> President.

Mike Parkin: Good morning, and thank you all for joining us for Hecla's first quarter 2025 results conference call. I am Mike Parkin, Vice President Strategy Investor Relations. Earnings release that was issued yesterday, along with today's presentation are available on our website.

Mike Parkin: On the call today is Rob Krcmarov, President and Chief Executive Officer, Russell Lawlar, Senior Vice President and Chief Financial Officer, Carlos Aguiar, Senior Vice President and Chief Operations Officer, Kurt Allen, Vice President of Exploration, Anvita Patil, Hecla's Vice President and Treasurer and my predecessor, as well as Matt Blatman, Vice President Technical Services. At the conclusion of our prepared remarks, we will all be available to answer questions.

Rob: And Chief Executive Officer Officer, Russell Waller, Senior Vice President and Chief Financial Officer, Carlos You, our senior Vice President and Chief Operations Officer.

Speaker Change: Allen Vice President of exploration and the top hotel Hecla's, Vice President and Treasurer, and my predecessor, as well as Matt Leamon, Vice President Technical services at the conclusion of our prepared remarks, we will all be available to answer questions turning to slide to.

Mike Parkin: Turning to slide two, any forward-looking statements made today by the management team come under the Private Securities Litigation Reform Act and involve risks as shown on slide two, in our earnings release and in our 10-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 cited in this call and related slides are reconciled in the slides or news release.

Speaker Change: Any forward looking statements made today by the management team come under the private Securities Litigation Reform Act and involve risks as shown on slide two in our earnings release and in our 10-Q filings with the SEC.

Speaker Change: These and other risks could cause results to differ from those projected in the forward looking statements non-GAAP measures signed it in this call and related slides are reconciled in the slides or news release I will now pass the call over to Rob.

Rob Krcmarov: I will now pass the call over to Rob. Thank you, Mike. And good morning, everyone.

Rob: Thank you, Mike and good morning, everyone before we get started I just wanted to take a moment to thank <unk> for his exceptional leadership and dedication over the last couple of years.

Rob Krcmarov: Before we get started, I just want to take a moment to thank Anvita for her exceptional leadership and dedication over the last couple of years. Her willingness to shoulder the responsibilities of both treasury and investor relations during a time of significant transition for the company has been nothing short of remarkable. Anvita, as you now transition back to focusing on your role solely as treasurer and help Mike assume his new investor relations responsibilities, I want you to know that your contributions haven't gone unnoticed.

Rob: Their willingness to shoulder the responsibilities of both Treasury and Investor Relations during a time of significant transition for the company has been nothing short of remarkable.

Rob: And then as you know transition back to focusing on your old role solely as treasurer and help Mike ashamed These new Investor relations responsibilities.

Rob: And I want you to know that you had contributions hasn't gone unnoticed. So thank you and that's it from myself and on behalf of the senior management and the board.

Rob Krcmarov: So thank you, Anvita, from myself and on behalf of the senior management and the board.

Rob: Turning to slide three.

Rob Krcmarov: Turning to slide three, I've completed my first six months with the company and I've done visits to all of our operating mines and initiated a comprehensive review of our extensive exploration portfolio. And I have to say that with each passing month, as I deepen my understanding of both our mineral assets and our talented employees, my confidence in Hecla's promising future continues to strengthen.

Speaker Change: I've completed my first six months with the company and I've done visits to all of them operating months and initiated a comprehensive review of our extensive exploration portfolio.

Speaker Change: And I have to say that with each passing month as a deepen my understanding of both our mineral assets and their talented employees my confidence in hecla's promising future continues to strengthen so let me now share our forward strategy built on four key pillars, all grounded in ESG leadership.

Rob Krcmarov: So let me now share our forward strategy built on four key pillars, all grounded in ESG leadership. First, we're intensely focused on operational excellence and reinvigorating a continuous improvement program and culture at each site. We're standardising systems across all mines to ensure consistent performance. Our investments in analytics and semi-automation will improve real-time decision making. And we're controlling costs aggressively while enhancing production through optimising extraction methods, reduced dilution and better ventilation. On the maintenance front, we're shifting to a more proactive approach with preventative programs that catch issues before they become costly problems and we've identified critical parts that impact production and implemented a tracking system to ensure availability when needed.

Speaker Change: First we're intensely focused on operational excellence and reinvigorating, our continuous improvement program and culture at.

Speaker Change: Each site.

Speaker Change: We are standardizing systems across all mines to ensure consistent performance in our investments in analytics and semi automation will improved real time decision, making.

Speaker Change: Controlling costs aggressively while enhancing production through optimizing extraction methods reduced dilution and bit of installation.

Speaker Change: On the maintenance front, we're shifting to a more proactive approach with preventative programs that catch issues before they become costly problems and.

Speaker Change: We've identified critical parts of impact production and implemented a tracking system to ensure availability when needed.

Rob Krcmarov: We're also investing in our workforce through targeted training and leadership development.

Speaker Change: We're also investing in our workforce through targeted training and leadership development.

Rob Krcmarov: Second, we're optimising our portfolio for maximum returns. While our Casabarati assessment continues, we're evaluating our exploration assets to unlock hidden value. Keno Hill remains our top priority for organic growth, but we're also developing a disciplined acquisition strategy aligned with our core strengths.

Speaker Change: Second we are optimizing our portfolio for maximum returns, while our Casa Berardi assessment continues we're evaluating and in exploration assets to unlock hidden value Keno Hill remains a top priority for organic growth.

Speaker Change: So developing a disciplined acquisition strategy along with our core strengths.

Rob Krcmarov: Third, we've implemented rigorous financial discipline with a structured capital allocation framework focused on free cashflow and clear return on investment targets. And this approach prioritises balance sheet strength, financial flexibility and reliable shareholder returns.

Speaker Change: Third with implemented rigorous financial discipline with a structured capital allocation framework focused on free cash flow and clear return on investment targets.

Speaker Change: And this approach prioritizes balance sheet strength financial flexibility and reliable shareholder returns.

Speaker Change: Fourth we remain committed to sewer market leadership as the largest producer in both the United States and Canada, we're uniquely positioned with long lived mines in top tier jurisdictions that provide regulatory stability and support responsible development.

Rob Krcmarov: Fourth, we remain committed to silver market leadership. As the largest producer in both the United States and Canada, we're uniquely positioned with long-lived mines in top tier jurisdictions that provide regulatory stability and support responsible development. Underpinning everything is our commitment to environmental stewardship, community partnerships, and strengthened relationships with First Nations and all stakeholders, ensuring that we lead in ESG practices across the mining sector.

Speaker Change: Underpinning everything is our commitment to environmental stewardship community partnerships and strengthened relationships with first nations and all stakeholders.

Speaker Change: Ensuring that we laid in ESG practices across the mining sector.

Speaker Change: As we turn to slide four let me highlight our achievements for the first quarter, our operations delivered a strong quarter, producing full point 1 million ounces of silver and more than 34000 ounces of gold.

Rob Krcmarov: As we turn to slide four, let me highlight our achievements for the first quarter. Our operations delivered a strong quarter producing 4.1 million ounces of silver and more than 34,000 ounces of gold. as well as robust volumes of lead and zinc and some copper, positioning us well against our annual guidance.

Speaker Change: As well as robust volumes of lead and zinc and some copper positioning us well against.

Speaker Change: In your guidance.

Rob Krcmarov: I'll highlight two notable achievements. So Lucky Friday set a consecutive quarterly milling record, demonstrating the exceptional consistency that Lucky Friday brings to our portfolio. Meanwhile Keno Hill produced nearly 800,000 oz and delivered its first profitable quarter under Hecla's ownership.

Speaker Change: I'll highlight two notable achievements, so lucky Friday instead of consecutive quarterly milling record demonstrating the exceptional consistency that lucky Friday it brings to our portfolio.

Speaker Change: Meanwhile, Keno Hill produced nearly 800000 ounces and delivered its first profitable quarter under hecla's ownership.

Rob Krcmarov: I'll discuss exploration later in the call, but I'm excited about the surface exploration programs we've initiated in Nevada. Additionally, our Libby exploration project in Montana recently secured placement on the Federal Permitting Improvement Steering Council's FAST 41 permitting dashboard, and that's a significant milestone that can streamline federal approvals and enhance coordination across agencies. Our exploration team has identified new geological concepts that warrant further investigation and the FAST-41 designation really provides a structured framework for advancing these studies.

Speaker Change: I'll discuss exploration later in the call, but I'm excited about the surface exploration programs, we've initiated in Nevada.

Speaker Change: Additionally, Libbey exploration project in Montana recently secured placement on the federal permitting improvement steering Council was fast 41, permitting dashboard and that's a significant milestone that constrained one federal approvals and enhanced coordination across agencies.

Speaker Change: Our exploration team has identified new geological concepts that warrant further investigation and the fast 41 designation really provides a stretch and framework for advancing these studies.

Rob Krcmarov: As with all capital allocation decisions, we remain committed to our discipline and investment criteria. And we'll continue methodical assessment of this assets potential to deliver value to our shareholders.

Speaker Change: As with all capital allocation decisions, we remain committed to a disciplined investment criteria.

Speaker Change: And we'll continue and methodical assessment of this S. Its potential to deliver value to our shareholders.

Rob Krcmarov: From a financial perspective, we delivered record quarterly revenues and adjusted EBITDA, exceeding $90 million, driven by high metal prices and solid contributions from all four operating mines. Our cornerstone assets, Greens Creek and Lucky Friday, continue to generate robust free cash flow of more than $40 million during the quarter. We're maintaining our production and capital investment guidance for the year with some adjustments to individual asset cost projections that Carlos will speak in detail. in a little while. Importantly, our consolidated silver cash costs and all-in-sustaining cost guidance on a per-ounce basis remains unchanged, demonstrating the advantage of our diversified portfolio approach.

Speaker Change: From a financial perspective, we delivered record quarterly revenues and adjusted EBITDA exceeding $90 million driven by high metal process and solid contributions from all four operating months.

Speaker Change: Our cornerstone assets Greens Creek, and Lucky Friday continue to generate robust free cash flow more than $40 million during the quarter.

Speaker Change: We're maintaining our production and capital investment guidance for the year.

Speaker Change: Some adjustments to envisage individual asset cost predictions that Carlos will speak in detail.

Speaker Change: Yes.

Speaker Change: Importantly, our consolidated silver cash costs and all in sustaining cost guidance on a per ounce basis remains unchanged demonstrating the advantage of a diversified portfolio approach and I'll now hand, the call to Russell for a detailed financial review. Thank you Rob I'll start on slide six we make our capital allocation decisions with a.

Russell Lawlar: And I will now hand the call to Russell for a detailed financial review. Thank you, Rob. I'll start on slide six. We make our capital allocation decisions with a long-term view and strategy in mind. As I reflect on the financial position of the company one year ago, we reported a net leverage ratio of 2.7 times, and our net cash balance was negative $60 million. One year later, I'm happy to report that we've improved the net leverage ratio more than one turn, down to 1.5 times, and improved the cash position of the company substantially with a net balance of approximately $20 million at the end of the quarter.

Russell: Long term view and strategy in mind as I reflect on the financial position of the company one year ago, We reported a net leverage ratio of two seven times and our net cash balance was negative $60 million. One year later Im happy to report that we have improved our net leverage ratio of more than one turned down to one five times and improve the cash position of the company substantially within there.

Russell: Balance of approximately $20 million at the end of the quarter I'll speak more about the details of the quarterly cash flow momentarily. This improvement came from many sources, including better price prices for both gold and silver production from Lucky Friday for the past 12 months and other capital allocation decisions such as eliminating the silverlake dividend. During this time, we also.

Russell Lawlar: I'll speak more about the details of the quarterly cash flow momentarily. This improvement came from many sources, including better prices for both gold and silver, production from Lucky Friday for the past 12 months, and other capital allocation decisions, such as eliminating the SilverLink dividend. During this time, we also continued our investment in the Keno Hill mine, as we see this as our future growth project, which meets our return on investment criteria. We've made progress on these initiatives. And as we look ahead, our plan is to implement strict return on capital criteria on our investments, ensuring stewardship of our investors money with the intention of seeing improved consistency in our financial results and improved performance.

Russell: Our investment in the Keno Hill mine as we see this as our true growth project, which meets our return on investment criteria.

Russell: We've made progress on these initiatives and as we look ahead, our print and our plan is to implement strict return on capital criteria on our investments ensuring stewardship of our investors' money with the intention of seeing improved consistency in our financial results and improved performance. Our plan remains to delever the balance sheet looking to improve both our net leverage ratio and also the outflow of inter.

Russell Lawlar: Our plan remains to deliver the balance sheet, looking to improve both our net leverage ratio and also the outflow of interest. At Casa Berardi, we are still determining the best path forward there where our strategic review options include the outright disposal, a joint venture to spin out the potential of extending the underground or accelerating future cash flows to take advantage of the current record gold prices via prepayment or other financing arrangement, or some combination of these alternatives. And in any scenario, we continue to see potential opportunities to maximize the value of this asset. Looking at the graph on the right-hand side of slide six, we see Greens Creek and Lucky Friday continue their strong free cash flow generation of $42 million generated during the quarter.

Just expense at.

Russell: At Casa Berardi, we are still determining the best path forward, there, where our strategic review options include the outright disposal I.

Russell: A joint venture to spin out the potential of extending the underground or accelerating future cash flows to take advantage of the current record gold prices via prepayment or other financing arrangement or some combination of these alternatives.

Russell: And in any scenario, we continue to see potential opportunities to maximize the value of this asset.

Russell: Looking at the graph on the right hand side of slide six we see Greens Creek and Lucky Friday continue their strong free cash flow generation with $42 million generated during the quarter, where on a consolidated basis, our free cash flow was negative $18 million. However, if you look closer at the details you'll see an inventory build of $12 million and an increase in accounts receivable bill accounts receive.

Russell Lawlar: We're on a consolidated basis. Our free cash flow is negative $18 million. However, if you look closer at the details, you'll see an inventory build of $12 million and an increase in accounts receivable of $29 million. These negative working capital adjustments were due to a few factors, but generally because our production improved toward the end of the quarter, which did not allow us to either sell all of the inventory on hand or collect some of the funds for those sales for the products sold. Additionally, we had working capital outflow of approximately $16 million for accounts payable and other current liabilities, which is primarily the interest on our notes, which we pay each February and August, along with incentive compensation payments and some other outflows for payable.

Russell: <unk> of $29 million. These negative working capital adjustments were due to a few factors, but generally because our production improved towards the end of the quarter, which did not allow us to either sell all of the inventory on hand or collect some of the funds for those sales for the products sold. Additionally, we had working capital outflow of approximately $16 million for accounts payable and other term.

Russell: Liabilities, which is primarily the interest on our notes, which we pay each February and August along with incentive compensation payments and some other outflows for payables.

Russell Lawlar: Although we see negative working capital in the first quarter, I expect to see some of these items will turn in the next quarter as we sell the inventory that was built up or collect receivables, setting us up for a strong Q2. Turning to slide seven, we generated record revenue of $261 million during the quarter with 45% of our revenue from silver, gold at 33%, as we benefited from the improved gold price and base metals coming in at around 22%. With silver prices increasing, our silver margins improved from 54% in 2024 to 65% this quarter.

Russell: Although we see negative working capital in the first quarter I expect to see some of these items will turn in the next quarter as we sell the inventory that was built up and collect the receivables setting us up for a strong Q2.

Russell: Turning to slide seven we generated record revenue of $261 million during the quarter with 45% of our revenue from silver gold at 33% as we benefited from the improved gold price and base metals coming in at around 22% with silver prices, increasing our silver margins improved from 54% in 2024% to 65% this quarter.

Carlos Aguiar: This record revenue and margin expansion of silver operations also provided for record adjusted EBITDA, which helped improve the net leverage ratio from 1.6 times at the end of last year to 1.5 times at the end of this I'll now pass the call to Carlos for a more detailed review of the performance of our operation.

Russell: This record revenue and margin expansion and a silver operations also provided for a record adjusted EBITDA, which helped improve the net leverage ratio from one six times at the end of last year to one five times at the end of this quarter.

Russell: I'll now pass the call to Carlos for a more detailed review of the performance of our operations.

Carlos Aguiar: Thank you, Russell. I'll start on slide nine. Green's Creek continues to demonstrate its consistency as a stable cash flow generator and producer. The mine produced 2 million ounces of silver in the first quarter, driven by 10% increase in the silver grade from the last The grade improved throughout the quarter to approximately 13 ounce per ton in March and remain strong entering the second quarter. Backfill and development activities also continue to improve throughout the quarter, which help with the delivery of higher grade tons to the mill. Negative cash costs of $4.08 per ounce and negative all in sustainable costs, ASIC of $0.03 per ounce were significantly better than annual guidance.

Carlos: Thank you Russell I'll start on slide nine.

Carlos: Greens Creek continues to demonstrate its consistency is a stable cash flow generator and producer. The mine produced 2 million ounces of silver in the first quarter driven by 10% increase in December to great need from the last quarter.

Speaker Change: <unk> drove it throughout the quarter to approximately 13 ounces per ton in March and remained strong entering the segment's lawyer that fail and development. David is also continuously improved throughout the quarter, which held within the liability of the high grade tonnes to the mill.

Carlos: Negative cash cost of $4 eight <unk> per ounce and negative.

Carlos: Sustaining the caused AC or <unk> <unk> per silver ounce were significantly better than annual guidance high end by product credits reduce costs, partially offset by increased fuel purchases due to the need for more site power generation than planned in the quarter.

Carlos Aguiar: High impact product credits reduce costs, partially offset by increased fuel purchases due to the need for more site power generation than planned in the quarter. Capital Investment and Greens Creek totaled $10.8 million, which is expected to rise in the next two quarters due to the construction season ramping up activities, a common theme across our producing portfolio, as well as our exploration assets. Production guidance for 2025 at Greens Creek is maintained at 8.1 to 8.8 million ounces of silver. We are lowering Greens Creek cost guidance significantly, primarily attributable to a strong goal by product credits in the first quarter, with cash cost guidance reduced to 25 cents to 75 cents per ounce from the prior $2 to $2.50 range.

Carlos: Capital invest in great screen deliberately $10 8 million, which is expected to rise in the next two quarters. The intruder. The construction CSR ramping up that team. There is a common theme across our producing portfolio as well as our our exploration assets.

Carlos: Production guidance for 2020 fired rates Green is maintaining at eight one to $8 8 million ounces subsidiary, we are lowering Greens Creek cause guidance significantly primarily attributable to a strong gold byproduct credits in the first quarter with cash cost guidance range is 225 <unk> to seven.

Carlos: <unk> per ounce from the prior $2 or two two.

Carlos: $2 $60 range, and AC guidance lower to $6 50 to $725 from $8 70.

Carlos Aguiar: and AC guidance lowered to $6.50 to $7.25 from $8.75 to $9.50 per ounce. Capital investment guidance isn't changed at $48 to $51 million in sustaining capital and $10 to $12 million in raw capital.

Carlos: 75 to $9 80 per ounce capital investment guidance is unchanged at $48 million to $51 million in sustaining Capex capital and 10 to 12 million Euro Capex.

Carlos Aguiar: Moving to slide 12, Lucky Friday continues to demonstrate operational excellence, achieving a consecutive quarterly million record of almost 109,000 tons, surpassing our previous record in the fall quarter of 2024. The mine delivered consistent silver production of 1.3 million ounces in the first quarter, maintaining its position as a core production asset. While production remains strong, we experienced cost pressures during the quarter, with cash costs at $9.37 per ounce and ASIC of $20.08 per ounce after by-product credits, primarily due to higher labor costs, profit sharing, consumables, and contractor costs.

Carlos: Moving to slide 12, Lucky Friday continues to demonstrate operational excellence achieving cost CPT.

Carlos: Early meeting a record of almost 190000 tons, surpassing our previous Franklin in the fourth quarter of 2020 for.

Carlos: The mine delivered consistent silver production of one 3 million ounces in the first quarter maintaining needs to see insurance at or production asset.

Carlos: But production remains strong we experienced cluster ratios during the quarter with cash cost at $9 37.

Carlos: And they think of $20 <unk> per ounce. After byproduct credits, primarily due to higher labor costs profit sharing consumables and contractor cost English bonds, we implemented cost control initiatives aiming to arrange a reliance on high cost contractors free.

Carlos Aguiar: In response, we implemented cost control initiatives aiming to reduce reliance on high-cost contractors. Free cash flow generation in the first quarter was $8.4 million, negatively impacted by working capital change and the higher operating costs versus the prior quarter. We are maintaining our 2025 production guidance of 4.7 to 5.1 million silver ounces while adjusting our cost projections to reflect current reality.

Carlos: Free cash flow generation in the first quarter was $8 4 million negatively impacted by working capital change and the higher operating costs versus the prior quarter.

Carlos: We are maintaining of 2025 Prudential guidance of $4 70 to $5 1 million silver ounces, while adjusting our cost projections to reflect current realities.

Carlos Aguiar: Looking ahead, we anticipate capital investment to increase in the next two quarters as warmer weather supports our seasonal construction activity. Our focus remains on balancing operational consistency with disciplined cost management to maximize Lockheed Friday long term value contribution to our portfolio.

Carlos: Looking ahead, we anticipate capital investment to increase in the next two quarters as warmer weather than supports our seasonal construction activities on.

Carlos: <unk> remains on balancing operational consistency with disciplined cost management to maximize Lucky Friday long term value and contribution to our portfolio.

Carlos: Turning to slide 11.

Carlos Aguiar: Turning to slide 11, Keno Hill produced over 770,000 ounces of silver. During the quarter, Hill's throughput averaged 350 tons per day, remaining below the permitted limit of 440 tons per day.

Carlos: <unk> produced over 770000 ounces of silver.

Speaker Change: During the quarter intra Alberta is Joanna NTT does per day remaining below the permitted Lino 440 <unk> tons per day.

Carlos Aguiar: We noted in February, our power supplier for Keno Hill, Yukon Energy Corporation, suffered a failure in its power generation turbine in October of last year at the hydro power plant in Whitehorse, which is not scheduled to be repaired until August of this year. Despite this and other challenges, Keno Hill delivered its first profitable quarter under Hecla ownership with $1 million in gross profit, which resulted in no costs being transferred to ramp up in suspension costs. Work continues to bring the asset into a state of sustainable, profitable production.

Speaker Change: As we noted in February our power supplier for Keno Hill, <unk> Energy Corporation superior failure in spiral generation through gaining October of last year.

Speaker Change: At the hydro powered power plant in the Whitehurst, which is not is scheduled to be repaid until August of this year.

Speaker Change: <unk> and other challenge.

Speaker Change: The labor is.

Speaker Change: First profitable quarter under <unk> ownership with 1 million in gross profit, which resulted in not costs being translated to ramp up in some states and cost.

Speaker Change: Work continues to bring the asset into a state of sustainable profitable production blend. The mail has proven to be capable of operating a very leading capacity of 440 tonnes per day, our mining rates have lagged.

Carlos Aguiar: When the mill has proven to be capable of operating a permitting capacity of 440 tons per day, our mining rates have To improve our mining rates and put the mine on path towards achieving its current permitting capacity of 440 tons per day, we must advance permits and successfully continue to improve the development of the deposits and execute critical infrastructure projects, which include dry stack tailings, cementing tailings backfill plants, and water treatment plant upgrades. Long-term profitability and conservative metal price assumptions will require throughput rates of approximately 500 to 600 tons per day due to Hino-Hale high fixed costs.

Speaker Change: Dwayne Breaux, our mining rates and put the mine on path towards achieving its current permitted capacity of $440 per day, we months advance Burley and successfully continued to improve the development of the deposits and execute critical infrastructure projects, which include dry stack tailings.

Speaker Change: Cementing tailings backfill plan, a water treatment plant upgrades.

Speaker Change: Long term profit or be leading and considerably metal price assumptions will require truckload rates of approximately 500 to $600 per day.

Speaker Change: Need to obtain a heel heights inc's costs. These will require new pyramids internal infrastructure investment and execution of significant capital and mine development.

Carlos Aguiar: This will require new permits, additional infrastructure investment, and execution of significant capital price in mind the best. Beyond technical execution, our success also depends on continuing to strengthen our partnership with First Nation and the Yukon government as a responsible long term partner. In 2025, we are reiterating our guidance for Kena Hill, expecting silver production of 2.7 to 3.1 million ounces and quarterly production costs of 15 to 17 million.

Speaker Change: Technical execution, our since he is also the pains are continued to Australia, our partnership with first nation in the Jacob Goldberger.

Speaker Change: It really is possible long term partner.

Speaker Change: Plenty plenty Phi we are reiterating our guidance for Keno Hill expecting similar production of two wholesaling to $3 1 million ounces and what are your production costs of $15 million to $17 million.

Speaker Change: Turning to slide 12.

Carlos Aguiar: Turning to slide 12. Casabrara did produce about 20,500 ounces of gold during the quarter at a cash cost in ASIC of $2,185.233 per ounce.

Speaker Change: Casa Berardi produced about 20500 ounces of gold during the quarter at a cash cost and AC Gulf plenty 195 in 'twenty, three and $3 per ounce respectively.

Carlos Aguiar: In the second half of 2025, the 160 PIT is expected to demonstrate improved economics and generate a stronger cash flow and district ratio decrease and reliance in contractors eases. We need improvement to be achieved late in the third quarter.

Speaker Change: In the second half of 2025, the 160 days is expected to demonstrate and improve economics and generating stronger cash flow in the strip ratio decrease and reliance on contractors eases.

Speaker Change: We need bromine to the ESG mid late in the third quarter.

Carlos Aguiar: Currently, there's no change to the Casa Verde production guidance of 76 to 82,000 ounces of gold production in 2020. Cash Cost Guidance and AC Guidance isn't changed, despite the first quarter cash costs and AC coming in above the full year guidance range, on a pro rata basis, as they are in line with the company's expectations and should improve in the second half of the year.

Speaker Change: Currently there is a change to the cost of it around the production guidance of 76 to 82000 ounces of gold production in 2025.

Speaker Change: Cash cost guidance and <unk> guidance diesel change despite the first quarter desk us in AC coming in above the full year guidance range on a pro rata basis as they are in line with the company's expectation in Chile for early in the second half of the year.

Rob Krcmarov: I now hand the call over to Rob to discuss exploration initiatives in Nevada that are ramping up this month. Thank you, Carlos. As I deepen my understanding of our exploration portfolio, I'm particularly excited about our Nevada assets. We're investing over $3.3 million this year in a targeted exploration program at our high-grade properties with two drill rigs now deploying at Midas. And Nevada Strategy centers on a hub-and-spoke approach, leveraging existing infrastructure across high-grade historical districts. And Midas stands out with its impressive production history of 2.2 million ounces of gold and 27 million ounces of silver at exceptional grades.

Speaker Change: I'll now hand, the call over to Rob to discuss exploration initiatives in Nevada that are ramping up this month.

Speaker Change: Carlos.

Deepen my understanding of the exploration portfolio I'm, particularly excited about our Nevada assets, we're investing over $3 $3 million this year and a targeted exploration program at our high grade properties with two drill rigs now deploying it modest.

Speaker Change: In Nevada strategy centered on a hub and spoke approach leveraging existing infrastructure across high grade historical districts and modest stands out with this impressive production history of $2 2 million ounces of gold and 27 million ounces of silver at exceptional grades.

Rob Krcmarov: This 30,000-acre property features an extensive alteration footprint, suggesting significant potential for new vein discoveries supported by an existing mill and tailings facility that really could become our northern Nevada hub. Just 15 miles to the southeast, Hollister offers complementary potential as North America's third highest grade underground gold mine. with production grades averaging 0.8 ounces per tonne gold. The Hattagrabben resource area already contains a gold and silver resource with geological evidence indicating a fully preserved epithermal system likely holding its best mineralization at depth. And these strategic assets combined with our systematic exploration approach represents a compelling opportunity to create meaningful shareholder value through resource expansion and potential future production.

Speaker Change: This 30000 acre property features an extensive alteration footprint, suggesting significant potential for new design discoveries supported by an existing new and tailings facility that really could become and northern Nevada hub.

Just 15 miles to the southeast Hollister offers complementary potential as north America's third highest grade underground gold mine.

Speaker Change: With production grades averaging eight ounces per ton gold.

Speaker Change: The Hatter Graben resource.

Speaker Change: Areas already contains a golden silver resource with geological evidence, indicating a fully preserve epithelial system likely.

Speaker Change: Holding its best mineralization at depth.

Speaker Change: And these strategic assets combined with our systematic exploration approach represents a compelling opportunity to create meaningful shareholder value through resource expansion and potential future production.

Speaker Change: Moving to slide 14, I'll close by reviewing our key deliverables for 2025.

Rob Krcmarov: Moving to slide 14, I'll close by reviewing our key deliverables for 2025. To position Hecla for sustainable growth and shareholder returns, we remain committed to our strategic priorities. At Keno Hill, we anticipate unlocking long-term value through disciplined permitting processes and execution excellence, and moving this high-grade asset down the path towards reaching its transformative potential. Concurrently, we're implementing a robust capital allocation framework that prioritises higher return investments while maintaining operational efficiency and our commitment to safety and environment. Our focus on generating strong free cash flow. fits well with our deleveraging initiatives and offers opportunities to strengthen our balance sheet and enhance financial flexibility.

Speaker Change: To position Hecla for sustainable growth and shareholder returns, we remain committed to our strategic priorities.

Speaker Change: At Keno Hill, we anticipate unlocking long term value through disciplined permitting processes and execution excellence and.

Speaker Change: And moving this high grade asset down the path towards reaching its transformative potential.

Speaker Change: Concurrently we are implementing a robust capital allocation framework that prioritizes high return investments.

Speaker Change: While maintaining operational efficiency and our commitment to safety and environment.

Speaker Change: Our focus on generating strong free cash flow.

Speaker Change: Fits well with our deleveraging initiatives and offers opportunities to strengthen our balance sheet and.

Speaker Change: And enhanced financial flexibility.

Rob Krcmarov: Finally, we continue to look to optimise our portfolio through rationalisation efforts. at Casa Berardi and are actively evaluating strategic initiatives that align with our core competencies and value creation objectives. We expect that by coordinating these actions, we can maintain operational excellence and achieve financial strength and sustainable growth for years to come.

Speaker Change: Finally, we continue to look to optimize our portfolio through rationalization efforts.

Speaker Change: At Casa Berardi and are actively evaluating strategic initiatives that align with our core competencies and value creation objectives.

Speaker Change: We expect that by coordinating these actions, we can maintain operational excellence and achieve financial strength and sustainable growth for years to come and so with that operator I'd like to open the call to questions.

Bailey: And so with that, operator, I'd like to open the call to questions. At this time, I would like to remind everyone in order to ask a question, press star and then the number one on your telephone keypad.

Speaker Change: At this time I would like to remind everyone in order to ask a question Press Star and then the number one on your telephone keypad.

Heiko Ihle: We will take your first question from the line of Heiko Ihle with HC Wainwright. Your line is open. Hey, it's Heiko from Wainwright. I assume you can hear me okay? We can. Good morning. You have a pretty diverse operational asset base across borders. Just out of curiosity with all the recent talk about tariffs, I mean, I can't open a newspaper without reading about it and just international trade facing a variety of arguably self-cost headwinds. Have there been any components or inputs or parts or anything that has been delayed? Anything in particular where you've seen an outsized impact on pricing or availability anywhere across your mind?

Speaker Change: We will take your first question from the line of Heiko inline with H C. Wainwright. Your line is open.

Heiko: Hey, its cycle from Wainwright I assume you can hear me okay.

Speaker Change: We can.

Speaker Change: Perfect. Good morning, Oh, you have a pretty good one you have a pretty diverse operational asset base across borders just out of curiosity with all the recent talk about tariffs I mean, that's kind of when use paper without reading about it and just international trade.

Speaker Change: Facing a variety of arguably salt cost headwinds have there been any components or imports or parts or anything that has been delayed anything in particular, where <unk> seen an outsized impact on pricing or availability anywhere across your minds.

Rob Krcmarov: Thanks for your question. I'll let Russell answer that one, but just bear in mind that roughly 50% of our costs are in labor. There will be some minor impacts on consumables and other things. That's right. Thanks, Rob. And thanks for the question, Heiko.

Speaker Change: Thanks, Thanks for the question.

Speaker Change: I'll, let Russell answer that one, but just bear in mind that roughly 50% of our costs are in labor.

Speaker Change: There will be some some minor impacts on consumables and other things.

Speaker Change: That's right [noise] excuse me, thanks, Rob and thanks for the question Heiko.

Russell Lawlar: Yeah, as we think about the business, we've really got the items that we purchase and then the things that we sell, so as we think about the things that we purchase, we do anticipate seeing higher costs for things like rebar and steel and those types of things just because the tariffs will hit that type of industry maybe more directly than others. We haven't necessarily seen our lack of being able to get parts and things like that. Part of that is because we do try to look ahead and as tariffs were being announced and even talked about months ago, we tried to be proactive and make sure that we had parts stocked.

Speaker Change: Yes, as we think about the business, we've really got the items that we purchased and then the things that we sell right. So as we think about the things that we purchased we do anticipate seeing higher costs for things like rebar and steel and those types of things just because of the tariffs will hit that type of.

Speaker Change: Industry, maybe more directly than others, we haven't necessarily seen any.

Speaker Change: Our lack of being able to get parts and things like that part of that is because we do try to look ahead and as tariffs were being announced and even talked about months ago, we tried to be proactive and make sure that we had things.

Russell Lawlar: As I think more specifically about the parts that we do buy, most of the things we buy, we buy at each operation in that country, and so I think that any tariffs in that regard would be kind of indirect where maybe you buy a part from a supplier that's manufactured in their plant in, say, Mexico or something like that, but currently right now, Mexico, Canada, the United States, parts sourced out of those are generally exempt, so that's okay. And as we think about parts that we get from China, there's not much. A few grinding balls and things like that, but frankly, we have a kind of long lead time supply on those, so we've got a lot of those in stock.

Speaker Change: Arts stocked.

Speaker Change: I think more specifically about the parts that we do by.

Speaker Change: Most of the things we buy we buy at each operation in that country, and so I think that any tariffs on that in that regard would be kind of indirect where may be you buy apart from apart from a supplier that's manufactured in their plan.

Speaker Change: <unk> in say, Mexico, or something like that but currently right now Mexico, Canada, United States parts sourced out of those are generally exempt so that's okay.

Speaker Change: And as we think about parts that we get from China. There is not much peak grinding balls and things like that but frankly, we've been we have a kind of long long lead time supply on those so we've got a lot of it was in stock we haven't been indirectly yet.

Russell Lawlar: We haven't been hit directly yet.

Russell Lawlar: On the other side of the equation is what we sell, which is our concentrates. We export all of our concentrates, essentially. Some of those concentrates get exported from the United States to Canada, and then some go either from Canada or the United States to Asia. And some of those concentrates, frankly, do go to China. The contracting strategy that we've had currently has really insulated us from any direct impact of those tariffs going into China. But I would expect in 2026, we may see the impact of tariffs. And what we'll see there, I think, is more, we'll see the cost to place that at a Western smelter might go up versus a smelter in China.

Speaker Change: The other on the other side of the equation is what we sell which is our concentrates we export all of our concentrates essentially some of those concentrates get exported from the United States, Canada, and then some go either from Canada, or the United States to Asia.

Speaker Change: And some of those concentrates frankly do go to China.

Speaker Change: The contracting strategy that we've had currently has really insulated us from any direct impact of those tariffs going into China, but I would expect in 2026.

Speaker Change: We may see the impact of tariffs and what we'll see there I think is more you will see that cost us to place that at the end of Western smelter might go up versus in a smelter in China, but I don't expect any risk of us not being able to place concentrated.

Heiko Ihle: But I don't expect any risk of us not being able to place that. Does that does that answer your question fully? It does. I mean, yeah, it does.

Speaker Change: Does that does that answer your question fully.

Speaker Change: It does yes.

Heiko Ihle: Yeah, I mean, I've been in this industry long enough to remember the days when, you know, it was impossible to get tires for trucks. So this stuff still sits freshly on my mind, I guess.

Speaker Change: Yeah, I mean I've been in this industry long enough to remember the days when you know it was impossible to get tires for trucks.

Speaker Change: So at this tussle sits freshly on my mind I guess.

Carlos Aguiar: Completely different follow-up question. You mentioned the Yukon Energy Corporation repair for the turbine failure that's going to be happening in August. Obviously early for this question, but is the site going to be down altogether when that happens? And if so, how long do you think this will halt the operation? and I again.

Speaker Change: Completely different follow up question, you mentioned Teu Con Energy Corporation repair for the turbine failure, that's going to be happening in August.

Speaker Change: Early for this question, but is the site going to be down altogether when that happens and if so how long do you think this will halt the operations.

Speaker Change: And I again.

Speaker Change: Yes.

Speaker Change:

Carlos Aguiar: Any way you can quantify your best guess as to the financial impact as well? The projection for the repairs of the turbine is expected to be in the month of August, and it's going to last six days. So we are planning to advance six days, six days. And in our projections, we included that downtime, right? And we are on a schedule to advance some of the maintenance projects during that period of time with some restriction in the power source. But there are plenty of projects that can be advanced during that period of time.

Speaker Change: Any way you can quantify your best guess as to the financial impacts as well.

Speaker Change: Separately <unk> shown that part of the rate base of the survey is expected to be in the month of pilots and he is going to last six days. So we are planning to advance.

Speaker Change: Yes, yes, six days six days and and <unk> included that downtime right.

Speaker Change: <unk>.

Speaker Change: We are we are on schedule to advance some of the maintenance projects during that period of time.

Speaker Change: Some registration end up in a power source, but there are plenty of prior years that can be.

Speaker Change: During that period of time.

Carlos Aguiar: and of course the economic impact of those days right now are estimated a delay in 90,000 ounces of silver, and of course, with some labor costs associated with it. So we're in regular dialogue with Yukon Power, we know it's coming, we've planned for it and we're ready. Perfect. That's, that's good to hear. I'll get back in queue and give other people a chance. Thank you.

Speaker Change: And of course that economic impact of those.

Speaker Change: Days right now are estimated.

Speaker Change: And they lay in 90000 ounces of silver.

Speaker Change: And of course, with some labor costs associated with that.

Speaker Change: So we're in regular dialogue with E comm palette, we know what's coming with planned for it and we're ready.

Speaker Change: Perfect.

Speaker Change: That's good to hear I'll get back in queue and give other people a chance. Thank you.

Speaker Change: Thank you.

Speaker Change: Your next question comes from the line of.

Dalton Barreto: Your next question comes from the line of Dalton Barreto with Canaccord, your line is Thanks, operator. Good morning, Robin team. Thanks. I want to stay on Kino here. It seems to me that the language used in your outlet for Kino has gotten significantly more uncertain, let's call it. I'm just trying to get some context around it.

Dalton Barreto: Dalton Barreto with Canaccord Your line is open.

Speaker Change: Thanks, operator, good morning, Robin team, Thanks for taking my questions.

Speaker Change: Wanted to stay on keynote here.

Speaker Change: It seems to me that the language used in your outlook for keto has gotten significantly more on.

Uncertain, let's call. It I'm, just trying to get some context around it and specifically trying to understand like if you got the permits to more on your community support how.

Dalton Barreto: I'm specifically trying to understand, like, if you got the permits tomorrow and you had community support, how much capital and time would it require to get that operation sustainably to 600 tons per day? And then on the flip side, what sort of metal prices would you need to see in order to sort of curtail production while you do these projects? Thank you.

Speaker Change: How much capital and time required to get that operation sustainably. The 600 tonnes per day, and then on the flip side, what sort of metal prices would you need to see in order to sort of curtail production. While you do restart these projects. Thank you.

Speaker Change: Okay.

Rob Krcmarov: Good morning Dalton and thanks for your question. Our messaging at Keynote is really about, it's an evolving work in progress. There's no doubt that we underestimated some things like costs, and obviously we've had some unforeseen events like the neighbouring heap leach that basically put permitting on hold. But having said that, I think we've made some real progress there, building on what we accomplished last year. So, you know, we fixed the crushing system that was really slowing us down. We got all the permits for expanding our tailings facility, which was crucial. And I think the big win for us was really running the mill for extended periods of time and consistently hitting about 400 tonnes per day, and that was over several months.

Speaker Change: Good morning.

Speaker Change: Thanks for your question.

Speaker Change:

Speaker Change: <unk> got Keener is really about it's it's a it's an evolving working progress there's no doubt that we underestimated some things like costs and obviously, we've had some unforeseen events like.

Speaker Change: At the neighboring.

Speaker Change: Heap Leach that basically put permitting on hold but having said that I think we've made some real progress building on what we accomplished last year. So.

Speaker Change: We fixed the crushing system that was really slowing us down.

Speaker Change: We got all the permits for expanding our tailings facility, which was crucial and I think the big win for US was really running the mill for.

Speaker Change: Extended periods of time and consistently hitting about 400 tons per day and that was either several months, so that really proves that processing works.

Rob Krcmarov: So that really proves our processing set up works. And that's kind of huge for our next steps. And going forwards, really, we need to get our mining rate in sync with what our mill can handle. And we're going to do this by gradually ramping up both the Birmingham and Flaming Moth deposits. We know we need permits for this.

Speaker Change: Protesting setup works and that's kind of a huge for our next steps and going forwards.

Speaker Change: Really we need to get at our mining right in sync with what mill can handle and we're going to do this by gradually ramping up both the bermingham and flame and moth deposits. We know we need the permits for this said we've recently.

Carlos Aguiar: So we've recently welcomed a highly experienced sustainability executive, Patrick Malone, with decades of permitting experience, who's already begun building a specialised team. We're also strengthening our technical capabilities to make sure that we get those permit applications right. And I have to say our collaborative engagement with the First Nations has increased as well. So let me just recap. So we're focusing on expanding our water treatment plant, adding waste storage, enhancing our tailings facilities. We're also starting construction on a tailings batch fuel plant, and that's going to improve both productivity and safety. The waste and tailing storage, that is going to reach capacity by 2028.

Speaker Change: Welcome to <unk>.

Speaker Change: Daily experience sustainability executive.

Speaker Change: Patrick Maloney with decades of permitting and experience. He has already begun building a specialized team. We're also strengthening our technical capabilities to make sure that we get those.

Speaker Change: Permit applications rot.

And I have to say our collaborative engagement with the first nations has increased as well so.

Speaker Change: Let me just recap so we're focusing on expanding our water treatment plant, adding waste storage enhancing our tailings facilities. We're also starting construction on a tailings backfield plant and thats going to improve both productivity and safety.

Speaker Change: The waste entitling storage that is going to reach capacity by 2020, so getting those permits.

Carlos Aguiar: So getting those permits. It's really time sensitive and so we're also working on increasing our camp capacity to house more workers as we scale up.

It's really time sensitive and so we're also working on increasing our capacity to have more way because as we scale up.

Rob Krcmarov: I should also mention that we've done a thorough assessment of what care and maintenance would look like. You know, that's just good planning. You know, we still believe that advancing kina who will make strategic sense, even though I can't tell you exactly when it's going to hit our profitability targets reaching 600 tons per day. That is going to take a few years to get there. First, we need to sustainably mine at 400 tons per day. I'm talking metric tons here and and match that to the mills capacity.

Speaker Change: I should also mention that we've done a thorough assessment of what care and maintenance would look like.

Speaker Change: That's just good planning.

Speaker Change: <unk>.

Speaker Change: We still believe that advancing kenai, who make strategic sense, even though comps exactly when it's going to hit.

Speaker Change: Profitability targets.

Speaker Change: Reaching 600 tonnes per day that is going to take a few years to get there first we need to sustainably mine at 400 tonnes per day.

Speaker Change: I'm talking metric tons.

Speaker Change: And match that to the mill's capacity anything you want to add to tell us yes.

Carlos Aguiar: Anything you want to add, Carlos? Yeah, that's that. This is still a work in progress, you know, permitting. You mentioned tailings capacity. And of course, we are really excited this this year to start the construction of the backfield plant. Right. Which is going to change and it's going to improve safety and productivity in the in the near future. And so, you know, our understanding of that ore body, it keeps improving and with each milestone it brings us really closer to unlocking the real value of this silver district which we're quite excited about. So it's still a work in progress.

Speaker Change: Is this sustainable or can province permitting.

<unk> said capacity.

Speaker Change: And of course, we added really excited these are this year to have started the construction of that.

Speaker Change: Backfill plants, which is going to solve and this will improve safety and productivity and that in the near future.

Speaker Change: And so you know our understanding of the orebody, it keeps improving and with each milestone it brings us really closer to unlocking the real value of the silver district, which we're quite excited about so it's still a work in progress.

Speaker Change: Got it. Thank you for all that I think Rob.

Rob Krcmarov: Got it. Thank you for all that, Rob. You kind of mentioned, you mentioned cost as well. And I would say that, you know, we've invested quite a bit of capital in in Keno Hill over the past few years. Obviously, we've all seen that. I think that, you know, you look at the performance that we've seen over the past few years, we have seen improved or more consistent performance. We need to improve that. We'll continue to make these investments that, you know, Carlos and Rob both mentioned, the tailings batch fill plant, and that should help us, you know, improve the rate that we can extract from the mine.

Speaker Change: If I can switch gears when you kind of you kind of mentioned you mentioned cost as well and I would say that we've invested quite a bit of capital in.

Speaker Change: And Keno Hill over the past few years, obviously, we've all seen that I think that you know when you look at the performance that we've seen over the past few years, we have seen an improved and more consistent performance, we need to improve that we will continue to make these investments so Carlos and Rob both mentioned the tailings backfill plant and that should help us.

Speaker Change: Prove the rate that we can extract from the mind because right now.

Rob Krcmarov: Because right now, you know, in the past, frankly, it used to be that the mill wasn't able to keep up, and now the mine isn't able to keep up with the mill. So, we just keep hitting those bottlenecks. And so, if we think about that, we will see capital continue into the future over the next few years as we do those types of projects, these infrastructure projects, and improve the developed state of the mine. But we should see that tail off as we kind of get further out into the future. You know, and keep in mind as well, we do have investment criteria that we are looking at and evaluating, and Keno Hill continues to meet that, but we have to execute on these plans.

Speaker Change: In the past frankly, it used to be that the mill wasn't able to keep up and now the mine isn't able to keep up with the mill. So we just keep keep hitting those.

Speaker Change: Those bottlenecks and so do we think about that we will see capital continue into the future over the next few years as we do those types of projects. These infrastructure projects and improve the development developed state of the mine, where we shouldnt see that tail off as we.

Speaker Change: As we kind of get further out into the future.

Speaker Change: Keep in mind as well, we do have investment criteria that we are looking at and evaluating and Keno Hill continues to meet that but we have to execute on these plans.

Speaker Change: Understood. Thank you for that my follow up Raj if I can direct that one to you as well I appreciate your comments in terms of placing.

Dalton Barreto: Understood. Thank you for that, Russ.

Dalton Barreto: My follow up, Russ, if I can direct that one to you as well. I appreciate your comments in terms of placing the green screen concentrate and sort of finding an alternative to China. But in the March 20th executive order, One of the things that order talks about having the Commerce Department look into, in addition to export tariffs on critical minerals, is also an export tax. And I'm wondering, if that goes into play, what options do you have for placing green screen contracts?

Speaker Change: Placing the Greens Creek concentrate.

Speaker Change: And sort of finding out and I'll turn it over to China, but India in the March 20th Executive order.

Speaker Change: One of the things that order talks about having the commerce Department looking into in addition to excellent cash on critical minerals.

Speaker Change: He is also an export tax and I'm wondering if that goes into play.

Speaker Change: What options do you have a place in gains grade concentrate.

Russell Lawlar: Oh, you know, frankly, Dalton, I'll have to get back to you on that one. You know, there's there's been various things that we've looked at, but I can't say that I have that on my radar. And I apologize for that. Great. Thanks, guys.

Speaker Change: Frankly, adult and I'll have to get back to you on that one.

Speaker Change: There's been various things that we've looked at but I cant say that I have that on my radar and I apologize for that.

Speaker Change: Great. Thanks, guys I'll jump back in queue.

Dalton Barreto: I'll jump back in.

Speaker Change: Okay.

Speaker Change: Your next question comes from the line of Michael <unk> with RBC capital markets. Your line is open.

Michael Saperco: Your next question comes from the line of Michael Saperco with RBC Capital Markets. Your line is open. Thanks very much. And thanks for taking my question.

Speaker Change: Thanks very much.

Speaker Change: Thanks for taking my question, maybe maybe a couple on.

Michael Saperco: Maybe, maybe a couple on on the growth outlook. And Rob, you talked about Nevada and what you're seeing there, I guess, can you give us a little bit more color about maybe how you see that in the context of the portfolio? I know it's early and maybe how what we should be expecting in terms of a timeline for either either a study or an update on on what you see in terms of the potential in Nevada. Sure, good morning Michael. I'm going to hand you over to Kurt, but I have to say, I was out there about a month ago, and you know, we have this permitted unused mill, we have tailing storage capacity, and so really our approach is this hub and spoke model.

Speaker Change: On the growth outlook, and Rob you talked about Nevada, and what Youre seeing there I guess can you give us a little bit more color about maybe how you see that in the context of the portfolio I know, it's early and maybe how what we should be expecting in terms of.

Speaker Change: Timeline for either either a study or an update on what you see in terms of the potential in Nevada.

Speaker Change: Sure Good morning, Michael.

Speaker Change: I'm going to hand, you over to it could but I have to say I was out there about a month ago and you know we have this permitted.

Speaker Change: Unused mill.

Speaker Change: We have tailing storage capacity and so really our approach is this hub and spoke model right now what we need to do is build a critical amount of resources.

Kurt Allen: Right now what we need to do is build up a critical amount of resources, and then re-look at a path forward. Kurt, could you add some more colour please? Yeah, thanks. Thanks, Michael. You know, the program that we have at Midas this year, we're going to have two drill rigs, we've got about seven targets, and these are all high grade vein targets. You know, we're thinking that we've kind of figured out the structural regime on the east part of the property there. These are early stage drill holes, it's going to tell us a lot, but we're focused on trying to identify the high grade portions of those veins.

Speaker Change: And then when you look at the path forward could could you add some more color. Please.

Speaker Change: Yeah.

Michael: Thanks, Michael.

Speaker Change: The program that we have at Midas. This year, we're going to have two drill rigs.

Speaker Change: Got about seven targets and these are all high grade vein targets.

Speaker Change: We're thinking that we've kind of figured out the structural regime on the east part of the property there.

Speaker Change: These are early stage drill holes it is going to tell us a lot, but we're focused on trying to identify the high grade portions of those veins and I think it's going to be similar size or potential is similar size to what was mined in the past now or is another project that we're currently in the permitting process. So we're we're.

Kurt Allen: And I think it's going to be similar size, you know, our potential is similar size to what was mined in the past. Now Aurora is another project that we're currently in the permitting process. So we're, we're doing a five year EA and expiration EA there, we should have that by the end of the year. And that's going to open up the entire district there for expiration. So we're kind of waiting on that EA at Aurora. And then Hollister, you know, in my years of experience, it's probably one of the largest surface expressions of an epithermal system.

Speaker Change: A five year EAA and exploration of Yea, there, we should have that by the end of the year and that's going to open up the entire district there for exploration. So we're kind of waiting on that <unk> and then Hollister.

Speaker Change: In my years of experience is probably one of the largest surface expressions of an app with thermal system and we've got several targets. There we're not going to drill there. This year, we're hoping to be able to do that next year, but I think you know.

Rob Krcmarov: And we've got several targets there, we're not going to drill there this year, we're hoping to be able to do that next year. But I think, you know, within a couple two, three years, four years, depending on the results from this year and next year's programs, I think we'll be on to something and move those projects forward. Thanks Kurt. One of the most striking things when I was on site, to Kurt's point, what defines a mineral system or the limits of the mineral system is how altered the rocks are. That shows you that fluids have been going through it.

Speaker Change: Within a couple two three years four years, depending on the results from this year and next year's programs I think will be onto something and move those projects forward.

Speaker Change: Thanks, good although one of the most striking things when I was when I was on sought to curts point, what defines a mineral system or the limits of the mineral system is how altered the Rockstar that shows you that fluids have been going through it and so when I was on <unk> you <unk>.

Michael Saperco: And so when I was on site, you stand on really intense alteration that Kurt was talking about, and it's probably a couple of kilometres away from where pretty much all the previous historic mining and development and exploration has been focused. So that playground is huge. And so that's what's really got me excited. I think there's an opportunity in where all the work has previously been focused around existing operations and really not that much outside of it. Sorry I cut you off Michael, go ahead. No, that's good color. So I suppose I'm looking to understand and maybe lost track a little bit of where exactly you you were in the advancement in Nevada.

Speaker Change: You stand on really intense alteration that Curt was talking about and it's.

Speaker Change: It's probably a couple of kilometers away from where all the pretty much all the previous historic mining and development and exploration spend focus so that playground, it's huge.

Speaker Change: And so that's why it's really got me excited I think theres an opportunity in where all the work has previously been focused around existing operations and really not that much thought of it.

Michael: Sorry, I cut you off Michael go ahead.

Speaker Change: No.

Speaker Change: Good color so.

Speaker Change: I suppose.

Speaker Change: I'm looking to understand and maybe lost track a little bit.

Speaker Change: Where exactly you are in the advancement in Nevada like is it fair to say that.

Michael Saperco: Like, is it fair to say that, you know, in an optimistic scenario, we'd be talking about a potential production scenario, let's say four or five years down the road? Is that the kind of timeframe that you might have in mind if everything works out? That's certainly possible, just given that we have some permanent facilities. We obviously are under-invested in exploration at the moment. And as I said on the last call, that's not through lack of quality targets or opportunities. It's just basically our focus on financial discipline. And, you know, as our financial situation improves, I do.

Speaker Change: In an optimistic scenario, we'd be talking about a potential production scenario, let's say four or five years down. The road is that the kind of timeframe that you might have in mind, if everything works out.

Speaker Change: That's certainly possible just given that we have some permanent facilities. We obviously are under invested in exploration of alignment and as I said on the last call that is not through lack of quality targets of opportunity. It's just basically a focus on financial discipline and.

Speaker Change: Financial situation improves I do.

Speaker Change: See that we'll be investing a lot more in exploration and a lot of it will be focused at Nevada, I think there's some very good potential there.

Russell Lawlar: Unknown Executive, Michael Parkin, Nicholas Giles, Unknown Executive, Michael Parkin, Okay, and that's actually a perfect segue into my next question, if I could.

Speaker Change: To your point for refi is obviously, we need to.

Speaker Change: We'll probably need some more permits I don't know how long that's going to take but its not an unrealistic assumption.

Speaker Change: Okay, that's actually a perfect segue into my next question if I could.

Russell Lawlar: In terms of your capital allocation priorities, talking about deleveraging, you've talked about, you know, potential for additional CapEx at Keno and underfunded exploration, which presumably will go higher, as well as whatever other development activities. Can you kind of break that down for us? Like, how do you look at organic reinvestment in assets versus, versus your deleveraging efforts? Good morning, and thanks, Mike. This is Russell. I'll take that question. It's always a balancing act, right? And I'll say we're fortunate because we have assets that do generate a substantial amount of cash in Lucky Friday and Greens Creek.

Speaker Change: In terms of your capital allocation priorities talking about deleveraging.

Speaker Change: You've talked about potential for additional capex at keno.

Speaker Change: And under funded exploration, which presumably will go higher as well as whatever other development activities can you kind of break that down for us like how do you look at organic reinvestment in assets versus <unk>.

Speaker Change: First as Youre deleveraging efforts.

Speaker Change: Good morning, and thanks, Thanks, Mike the services Russell I'll take that question.

Speaker Change: Always a balancing act right and I'll say, we're fortunate because we have assets that they do generate a substantial amount of cash and Lucky Friday, and Greens Creek and as we look at the economics for Casa Berardi, we're going through this.

Russell Lawlar: And as we look at the economics for Casa Berardi, we're going through this strategic review right now, but we do anticipate the economics of that will improve and provide cash flow as well, especially in today's prices out later this year and into next. And so as we think about that cash flow, there's a balancing act between ensuring that you invest substantial capital into those operations that provide that cash flow. So Lucky Friday, Greens Creek, etc. The growth capital at Keno Hill, because for Keno Hill to hit those return on invested capital metrics that we've talked about, we need to invest in it.

Speaker Change: The strategic review right now, but we do anticipate the economics of that will improve and provide cash flow as well, especially in today's prices.

Speaker Change: Out later this year and into next and so as we think about that cash flow. There's a balancing act between ensuring that you invest substantial capital into those operations that provide that cash flow. So lucky Friday Greens Creek etcetera the.

Speaker Change: The growth capital at Keno Hill, because fortino held to hit those return on invested capital metrics that we've talked about we need to invest in it.

Russell Lawlar: So we'll be doing those things while at the same time looking to de-lever, reduce the interest expense that we're paying now. And as we do that, then we anticipate seeing further cash flows from that. And then frankly, the last thing that I haven't talked about is the expiration. So it is a balancing act between making sure that we're taking care of all of those items kind of all at the same time in a strategic way. But I would say, as we look out into the future, we anticipate those investments as we're planning out our cash flows.

Speaker Change: So we will be doing those things while at the same time looking to delever.

Speaker Change: We reduced the interest expense that we're paying now and as we do that then we anticipate seeing further cash flows from that and then frankly the last thing that I haven't talked about is the exploration. So.

Speaker Change: It is a balancing act between.

Making sure that we're taking care of all of those those.

Speaker Change: Those items kind of all at the same time in a strategic way, but I would say as we look out into the future. We anticipate those investments as we're thinking as we're planning out our cash flows right. So we're we're planning those cash flows as it relates to where those investments as it relates to investment in our operating assets, where our exploration portfolio.

Russell Lawlar: So we're planning those cash flows as it relates to, or those investments as it relates to investment in our operating assets or our exploration portfolio. Okay, great. That's good color. Thanks very much. I'll pass it on.

Speaker Change: Okay, great. That's good color, thanks, very much I'll pass it on.

Andrew Jason: Your next question comes from the line of Andrew Jason with National Bank. Your line is open.

Andrew Doosan: Your next question comes from the line of Andrew Doosan with National Bank. Your line is open. Hi, Robin team. Thanks for taking my question. Maybe just that Lucky Friday, I know the labor costs there have been, you know, one of the main drivers of increasing costs over the last little while, can you just give some more color on, you know, what's driving those labor costs higher is, you know, is it just wage inflation? Is there labor tightness that you have to address? So just any color you can provide there. Well, I mean, there's two main things there.

Andrew Jason: Hi, Rob and team Thanks for taking my question.

Andrew Jason: Maybe just start on Lucky Friday, and other labor costs. There then.

Speaker Change: One of the main drivers of increase in costs over the last little while can you just give some more color on what's driving those labor costs higher as you know is it just wage inflation is there labor tightness that you have to address so just any color you can provide there.

Speaker Change: Well I mean, there's two main things one is that we have been using contractors and that's something that we've got our focus and attention on to try and minimize the use of high quite cost.

Rob Krcmarov: One is that we have been using contractors and that's something that we've got our focus and attention on, to try and minimise the use of high cost contract labour. The other thing is the profit sharing, which is a good problem to have. That means that we're actually generating profit.

Speaker Change: Correct later.

Speaker Change: The other thing is the.

Speaker Change: Profit sharing which is a good problem to have that means that we're actually generating profits.

Rob Krcmarov: Anything else Ted?

Speaker Change: Anything else that.

Rob Krcmarov: You know, I'll jump in. And just to add on to what Rob had said, you know, the performance at Lucky Friday has been has been actually very strong. So the the amount that we do pay under the prop sharing program, as well as the, and I'm going to miss the acronym exactly, but the production bonus out there, the bonus that we pay to the workers there, has actually paid out above target based on the performance of Lucky Friday. That's, and that that performance on that bonus is related to production, safety, environmental performance. And then there is a cost component there too.

Speaker Change: I'll jump in and just to add onto what Rob had said the performance at Lucky Friday has been has been actually very strong. So the amount that we do pay under the profit sharing program as well as the.

Speaker Change: I'm going to Miss the acronym exactly but the production bonus all favor the bonus that we paid to the workers there.

Speaker Change: <unk> has actually paid out above target based on the performance of Lucky Friday.

Speaker Change: And that that performance on that bonuses related to production safety environmental performance and then there is a cost component there too, but when you take it all in balance Lucky Friday is frankly outperformed and as a result, we have seen those additional payments, which which we welcome. Those are those are good problems to have like what Rob said.

Rob Krcmarov: But when you take it all in balance, Lucky Friday has frankly outperformed. And as a result, we have seen those additional payments, which which we welcome. Those are those are the good problems to have, like what Rob Got it.

Speaker Change: Got it thanks, and then maybe shifting to cash as well. So you left production and cash cost base guidance unchanged, but there was an increase in that.

Andrew Doosan: Thanks.

Andrew Doosan: And then maybe shifting to CAF as well. So you left production and cash cost as the guidance unchanged, but there was an increase in Cost of Sales in Millions. So just wondering, you know, what are you seeing from the operation to offset that increase in millions, cost of sales with unchanged production and cash cost guidance? That's a good question. Thanks. Thanks for asking, Andrew. So keep in mind that cost of sales number is both cash cost and non cash cost and it's a gap number. Whereas the and it's so you know, as we present that number and we present non gap numbers, we have to present the closest gap number to the non-gap number, which is cost of sales.

Speaker Change: Cost of sales a $1 million so I'm just wondering.

What are you seeing from the operation to offset that increase in millions.

Speaker Change: Cost of sales with unchanged production and cash cost guidance.

Speaker Change: That's a good question. Thanks, Thanks for asking Andrew So keep in mind that cost of sales numbers, both cash costs and noncash costs and that's a GAAP number, whereas the and if so you know as we present that number and we present non-GAAP numbers, we have to present.

Speaker Change: The closest GAAP number to the non-GAAP number which is cost of sales and so that's the number that's presented there. So it's a combination of it's a GAAP number it's both.

Carlos Aguiar: And so that's the number that's presented there. So it's a combination of, it's a gap number, it's both non-cash and cash costs. But as we looked at Casa Berardi and we looked at the performance both in the first quarter and what we expect for the remainder of the year, and we updated our expectations and our models, we really, frankly, the model still predicts that we'll come out within our guidance. And so therefore, although we did see costs increase as we have seen the, you know, frankly, the stripping is a little bit behind where we expected to be at this point, we still anticipate coming in under guidance.

Speaker Change: Noncash and cash costs, but as we as we looked at Casa Berardi and we looked at the performance both in the in the first quarter and the what we expect for the remainder of the year and we updated our expectations in our models, we really frankly, the model's still predicts that will come out within our guidance and so therefore, although we did see cost.

Speaker Change: <unk> increase as we.

Speaker Change: We have seen the frankly, the stripping is a little bit behind where we decide where we expect it to be at this point, we still anticipate coming in under guidance, it'll just costs a little bit more money.

Carlos Aguiar: It'll just cost a little bit more.

Speaker Change: Got it thanks for that color I'll jump back in the queue.

Andrew Doosan: Got it. Thanks for that color.

Andrew Doosan: I'll jump back in the queue.

Your next question comes from the line of Nick Giles with B Riley Securities. Your line is open.

Nick Giles: Your next question comes from the line of Nick Giles with B Reilly Securities. Your line is open. Thank you, operator, and good morning, everyone.

Henry Hurdle: Thank you operator, and good morning, everyone. This is Henry hurdle on for Nick trials.

Henry Hurl: This is Henry Hurl, on for Nick Giles. I wanted to start by asking if there are any updates on a potential sale of CASA, and then have the higher gold prices change the way that you're approaching this. And then should we also think about any potential proceeds from the sale as earmarked for a debt pay down? Good morning, Henry. It's not a foregone conclusion that we're going to sell Casa. What we said was that we're looking at all strategic alternatives, and that includes an outright sale, it includes joint venturing, spinning out the asset, extending the underground mine, taking advantage of the current high gold prices.

Henry Hurdle: Going to start by asking if there are any updates on a potential sale of Casa and then have a higher gold prices changed the way that you're approaching this.

Henry Hurdle: And then should we also think about any potential proceeds from the sale as earmarked for debt pay down.

Henry Hurdle: Thanks.

Andrew Jason: Good morning, Andrew.

Andrew Jason: It's not a foregone conclusion that we're going to sell what we what we said was that we're looking at all strategic alternatives and that includes an outright sale that includes joint venturing spinning out the S. Extending the underground mine taking advantage of the current high gold prices.

Rob Krcmarov: and whatever. And so that's a work in progress. And what I said is that we'd provide an update sometime during Q2. Our work is still underway and we'll report by next quarter, if not sooner. And as it relates to the proceeds, you know, the way we would look at it is we would use proceeds to deliver, or we would anticipate doing that. So, yeah, just to cover that up. Alright, yeah, thanks for that.

Andrew Jason: And whatever and so that's a working progress and what I said is that would provide an update sometime during Q2 at work is still underway and.

Andrew Jason: We will report by next quarter, if not sooner.

Andrew Jason: And as it relates to the proceeds the way we would look at it is we would use proceeds to delever or we would anticipate doing that.

Andrew Jason: So, yes to just to cover that off as well.

Andrew Jason: Alright, thanks for that and then so how could the permanent timeline impact the strategic alternatives process.

Rob Krcmarov: And then so how could the permitting timeline impact the strategic alternatives process? And then would you feel that you could, you could get the full value for the asset despite kind of the setback of the permitting? I mean, there's no doubt that we have a permanent hiatus ahead of us. Last time we communicated this, we said it was going to take about five years. I don't know if it's going to exactly take five years. I don't know whether there's an opportunity to accelerate it or not. But it's certainly, you know, you're going to discount those future cash flows.

Andrew Jason: And then what do you feel like you could you could get the full value for the asset despite kind of a setback of permitting.

Andrew Jason: There's no doubt that we have a permitting hiatus ahead of us at last time, we communicated. This we said it was going to take about five years.

Andrew Jason: I don't know if it's gonna exactly take five years I don't know, whether there's an opportunity to accelerate it or not but it's certainly you're going to discount those future cash flows there's no doubt about that.

Rob Krcmarov: There's there's no doubt about that. But again, you know, since we started our strategic review, the gold price has moved up significantly. And so, you know, we're looking at that through basically a refreshed lens of a much higher gold price. Got it. Yeah, that's right. You know, essentially what what we're doing is just looking to see how best we can, you know, daylight as much value from Casabrari as possible and the change in the gold price, you know, will play into Got it. Thanks for the commentary and continue best of luck. Thank you, Andrew.

Andrew Jason: But again.

Andrew Jason: Since we started a strategic review the gold price has moved up significantly and so.

Andrew Jason: We're looking at that through basically refresh lenses are of much higher gold price.

Andrew Jason: Got it thanks for that.

Andrew Jason: Essentially what we're doing is just looking to see how best we can daylight as much value from Casa berardi as possible and the change in the gold price.

Andrew Jason: <unk> play into that.

Andrew Jason: Got it thanks for the commentary and continued best of luck.

Henry Hurdle: Thank you Henry.

Speaker Change: Your next question comes from the line of Joseph Reagor with Roth Capital markets. Your line is open.

Joseph Reagor: Your next question comes from the line of Joseph Reagor with Ross Capital Markets. Your line is open. Hey Rob and team. Thanks for taking my questions.

Speaker Change: Hey, Robin team, Thanks for taking my questions.

Speaker Change: Backing up a bit to keno.

Rob Krcmarov: Backing up a bit to Keno. Are you guys, I guess, sure that the mine can support an operate or mining rate of, you know, five or 600 tons per day? I know it's always been a challenge there to get the mining rate up at the mine underground. Like, so what's your level of confidence that even with the permit, you could do that in the I think with the investments that we've spoken about, getting to a increased mining rate, that is clear. I think we can achieve that, whether it makes economic sense or not, that's another matter.

Speaker Change:

Speaker Change: Are you guys thought yes sure that the.

Speaker Change: Mine can support.

Speaker Change: And offer our mining rate of five or 600 tonnes per day I know its always that challenge there to get the mining rate up at the mine underground.

Speaker Change: So what's your level of confidence that even with the permits you could do that.

Speaker Change: In the future.

Speaker Change: I think with the investments that we've spoken about.

Speaker Change: Getting to a increased mining right like that that is I think we can achieve that whether it makes economic sense or not.

Speaker Change: That's another that's another matter.

Speaker Change: Clearly a key part of this is getting flame and moth production ramped up we also a critical piece of increasing the production rate, it's really doing enough development. That's really what we we have a focus on at the moment.

Matt Blatman: Clearly a key part of this is getting flame and moth production ramped up. We also, a critical piece of increasing the production rate is really doing enough development. That's really what we have a focus on at the moment. to make sure that all of our stopes are prepared and sequenced.

Speaker Change: To make sure that all the best types of prepaid and.

And sequenced I've got met with US is there anything you want to add.

Matt Blatman: I've got Matt with us. Matt, is there anything you want to add? Yes, and thanks. Thanks for that, Rob. One of the ones that I would be most focused on is we can ramp up, we can get things going, but at this point we don't have permits to store all the waste, you know, by accelerating production right now, we then run out of space and put even more pressure for our permitting. So it's a strategic choice at this point to not move things any faster than we've got it already going. So, to answer the direct question, we're very confident we can get up to the 440 pretty easily and the 600 will come eventually, but there are other constraints that are limiting our ability to do that right now.

Speaker Change: Yes. Thanks, Thanks for that Bob one of the ones that I would be most focused on is we can ramp up we can get things going but at this point, we don't have permits to store all the waste by accelerating production right. Now, we then run out of space and putting more pressure on permitting says there's a strategic choice at this point not move things in the fab.

Speaker Change: And then we've got it already to go.

Speaker Change: So.

Speaker Change: The answer the direct question, we're very confident we can get up to the $4 40 pretty easily in the 600 will come eventually but there are other constraints that are limiting our ability to do that right now.

Speaker Change: Okay Fair enough and then I'm looking at the cost revisions at Casa at Lucky Friday, obviously, they're reflective of a variety of factors that occurred already in Q1.

Joseph Reagor: Okay, fair enough.

Russell Lawlar: And then Looking at the cost revisions at CASA and Lucky Friday, obviously they're reflective of a variety of factors that occurred already in Q1. How confident are you guys that the revised number is now correct and is there a portion of this revision that is related to profit sharing, which would, in the event gold and silver were to pull back, that the cost would also pull back with that? Yeah, I would suggest that anytime that we put our guidance out, we're confident in those numbers. Unfortunately, sometimes we do have to revise them. So, you know, we put the numbers out and we're confident that we can achieve those or else, you know, we would put out the numbers that we believe we could achieve.

Speaker Change: Like how confident are you guys at the revised number is now correct and is there a portion of this revision that's where that is related to profit sharing which would enjoy an event gold and silver were to pull back that the cost would also pull back with that.

Speaker Change: Yes, I would suggest that anytime that we put our guidance out we're confident in those numbers. Unfortunately, sometimes we do have to revise them. So we put the numbers out and we're confident that we can achieve those or else. We would put up the numbers that we believed we could achieve.

Russell Lawlar: You know, as it relates to profit sharing, yeah, yeah, I think that if you did see it pull back, then you could I think more important than that would be us continuing to execute on cost control and replacing contractors with employees and those types of things that are more meaningful to the companies. Okay, thanks. My other questions are already touched on.

Speaker Change: As it relates to.

Speaker Change: Profit sharing yes, I think that if you did see a pullback then you could.

Speaker Change: See you know a lesser costs I think more important than that would be.

Speaker Change: U S continuing to execute on cost control and replacing contractors with employees and those types of things that are that's more meaningful to the company as a whole.

Speaker Change: Okay. Thanks, My other questions were already touched on and I'll turn it over.

Dalton Barreto: I'll turn it over. Thank you.

Speaker Change: Thank you.

Dalton Barreto: Your next question comes from the line of Dalton Barreto with Canaccord. Your line is open.

Rob Krcmarov: Your next question comes from the line of Dalton Barreto with Canaccord, your line is Thanks for taking my follow-ups, guys. Rob, in your prepared remarks, one of the things you mentioned was a disciplined acquisition strategy. I'm wondering if you can wrap some parameters around that for us, just anything around jurisdiction, commodity, asset size, stage, anything like that.

Yes, thanks for taking my follow ups guys, Rob in your prepared remarks.

Dalton Barreto: One of the things you mentioned was a disciplined allocation strategy, sorry acquisition strategy and I'm wondering if you can wrap some parameters around that for us just anything around jurisdiction commodity asset size stage anything like that thank you.

Rob Krcmarov: Thank you. Sure. So, um... When we think about M&A, we need to have some some parameters. And this is something that's socialized with the board as well. And so we need to carefully look at our gold and silver mix. You know, we're aware that, you know, we're unique in our space in the the that we have a great proportion of our revenues come from silver. And so primarily, we want to remain a silver company. And that's really what we're focused on. Do we have room for gold? Yes, we probably do. But really, we'd be looking at it exactly the same as we would any other investment.

Dalton Barreto: Sure.

Dalton Barreto: <unk>.

Dalton Barreto: When we think about the M&A, we need to have some some parameters and this is something that's socialized with the board as well and so we need to carefully look at our gold and silver mix.

Dalton Barreto: We're aware that we are unique in our space in the.

Dalton Barreto: We have a greater portion of their revenues come from silver insight, primarily we want to remain a silver company and that's really what we're focused on.

Dalton Barreto: Do we have room to go yes, we probably do but really we'd be looking at exactly the same as we would any other investment.

Dalton Barreto:

Rob Krcmarov: I think the Sorry, I lost my train of thought here. So with M&A, it's about not reacting to available opportunities and really doing proper and thorough due diligence. And then a key part of that is assessing what are the returns and how does that compete with internal growth projects as well.

Dalton Barreto: I think the.

Dalton Barreto: I'm, sorry, I almost lost my train of thought here. So so with M&A, it's about not reacting to available opportunities and really doing a proper and thorough due diligence and then.

A key part of that is.

Assessing what are the returns and how does that compete with internal growth projects as well and so.

Rob Krcmarov: And so M&A is something that we're always looking at, but it'll become more of a focus as we de-lever and as we get into a position of strength. Great. Thanks, Rob.

Dalton Barreto: M&A is something that we're always looking at but it will become more of a focus.

Dalton Barreto: As we as we de lever and as we get into a position of strength.

Dalton Barreto: Great. Thanks, Rob and if I can just ask on led to you, which I think is massively underappreciated part of your portfolio right now and I don't think sediment hosted at high grade copper deposit really that's not anymore.

Rob Krcmarov: And if I can just ask on Libby, which I think is a massively underappreciated part of your portfolio right now, and I don't think sediment-hosted high-grade copper deposits really exist anymore. Send us things on fast track. You know, if permitting goes the way you hope, what's the approach? Are you going to go at it solo? Would you bring in a partner? How would you look at that? I think, I mean, this is a material asset for us, you know, you're aware of the inferred resource of about 180 million ounces of silver and about 1.7 billion pounds of copper.

Dalton Barreto: John fast track it.

Speaker Change: Permanent goes the way you hope or what's the approach you're going to go out at solo would you bring in a partner how would you look at that.

Speaker Change: No I think I mean this is a this is a material asset for US you know youre aware of the inferred resource of about.

Speaker Change: About 180 million ounces of silver and.

Speaker Change: About $1 7 billion pounds of copper so we recognized that significant but its also going to come with a very significant capital costs.

Rob Krcmarov: So we recognize it's significant, but it's also going to come with a very significant capital cost. I don't know what it's going to be, but I imagine it's going to be closer to a billion dollars more than anything. And so, you know, I am interested in perhaps looking at partnering up with perhaps someone who has more of a focus on copper. Remember, this is about 0.7% copper grade, which is quite significant. And so if we could partner up with that, that would be something we'd certainly consider because I think the prize is large enough to share.

Speaker Change: I don't know, what it's going to be but I imagine, it's going to be closer to $1 billion.

Speaker Change: More than anything and so you know I.

I am interested in perhaps looking at partnering up with perhaps someone who has more of a focus on copper remember this is about 7%.

Speaker Change: Copper grade, which is quite significant and so if we could partner up with that that would be something we'd certainly consider because I think the prizes large enough to share and that would that.

Rob Krcmarov: And that would mean that we could maintain our focus on our core business, which is basically precious metals. Yeah, thanks, Rob. I don't think you'd find any shortage of interested parties. Thanks for taking my questions.

Speaker Change: That would mean that we could maintain our focus on on our core business, which is basically appreciate precious metals.

Speaker Change: Yeah. Thanks, Rob I don't think by any shortage of interested party. Thanks for taking my questions.

John Tumazos: Sure. And your final question will come from the line of John Tumazos with John Tumazos Very Independent Research. Your line is open. Ram, thank you. Following up on Questions with Libby. How fast can Hecla move? and Tempest here, the Fast 41. What are the steps to get it to definitive fees? besides the infill drilling of the inferred resource.

Speaker Change: Sure.

Speaker Change: And your final question will come from the line of John Tumazos with John Tumazos very independent research. Your line is open.

Speaker Change: Okay.

Speaker Change: Rob Thanks.

Speaker Change: Following up on <unk>.

Speaker Change: Questions with Liberty.

Speaker Change: How fast can it.

Speaker Change: <unk>.

Speaker Change: It's 10% of the fast 41.

Speaker Change: What are the steps to get it too definitive fees.

Speaker Change: Besides the infill drilling of inferred resource.

Rob Krcmarov: Let me just outline the next immediate step. So, you know, we've obviously got the designation and that's going to, you know, enhance that long-term potential and make sure that there's a bit more transparency on the process. At the moment, we've got a plan of operations that's under an environmental assessment, and that's being reviewed by the U.S. Forestry Service. And we expect a decision on that to be issued pretty soon, now actually. And if that's approved and they issue a FONSI, so that's a finding of no significant impact, there's going to be a 45-day objection period, and then there's going to be a 30-day period that we could respond to that.

Speaker Change: But let me just at London. The next immediate step. So you know, we've obviously got the designation and that's going to enhance that long term potential and make sure that there is a bit more.

Speaker Change: Transparency on the process.

Speaker Change: At the moment, we've got a plan of operations, that's under an environmental assessment and that's being reviewed by the U S Forest Resurface and we expect a decision on that to be issued pretty soon now actually.

Speaker Change: And if that's approved and they issue a fancy so that's a finding of no significant impact.

Speaker Change: There's going to be a 45 day objection period, and then there's going to be a 30 day period that we could respond to that.

Rob Krcmarov: And depending on the nature of any objections received by the Forestry Service, you know, there might be an updated plan of operations and that would be, that could be approved in Q3 of 2025. Once that process is finished, we'll basically have the authority to dewater and rehabilitate an existing 14,000 foot at it, about half of it's underwater, and we'd need to extend it by about 4,000 feet and do some lateral drifts so that we can do our exploration activities. So there's a ton of work that still needs to happen. We do need to reestablish and revalidate the resource and then ultimately produce some sort of an economic study.

Speaker Change: And depending on the nature of any objections received by the Forest service.

Speaker Change: They might be an updated plan of operations and that would be that could be approved in Q3 of 2025. Once that process is finished we will basically have the authority to dewater and rehabilitate and existing 14000 foot edit about half of that's under water and we need to extend it by about 4000.

Speaker Change: Feet and do some lateral drifts so that we can do that exploration activities. So there's a ton of work that still needs to happen.

Speaker Change: We didn't need to reestablish and really validate the resource and then ultimately produce some sort of an economic study. So it's going to take quite a few years and a considerable amount of effort, but we do recognize the value of this asset in our portfolio.

Rob Krcmarov: So it's going to take quite a few years and a considerable amount of effort, but we do recognise the value of this asset in our portfolio.

Speaker Change: Rob is this plan of operation.

Rob Krcmarov: Rob, is this plan of operation? for exploration as opposed to tons per day mining for production. And when you get, what do you What do you think is the target concept? for Tons Per Day production. 2,000, 10,000, 20,000 tons. So it's a fairly flat-lying ore body, and it'll likely be mined by room and pillar. And so, I don't know, Matt, could you comment what a potential conceptual... The previous work that's been done has been targeted at 12,500 tons a day, so it's a relatively large production, it's relatively low-grade, I mean, you've got to get the tons up.

Speaker Change: For exploration as opposed to the tons per day mining for production.

Speaker Change: And when you're correct.

Speaker Change: Yeah.

Speaker Change: Where do you think is the target concept.

Speaker Change: <unk> tons per day production.

Speaker Change: 2000, 10000, 20000 tonnes a day.

Speaker Change:

Speaker Change: So it's a fairly flat lying ore body.

Speaker Change: And it'll likely be mined by room, and pillar and say I.

Matt Leamon: I don't know, Matt could you comment what potential.

Speaker Change: Conceptual.

Speaker Change: Previous work that had been done had been targeted at 12500 tonnes a day. So it's a relatively large production.

Speaker Change: Production Thats low relatively low grade I mean, you got to get the tonnes up so youre in that 10 to 15000 ton a day range for a room and pillar and what really limits us from driving in foreigners you just cant develop the headings fast enough to get more tons through it but it's in that range. It's not a 2003 thousand tons and it's not 50000.

Matt Blatman: So you're in that 10,000 to 15,000 ton a day range for room and pillar. And what really limits us from driving any farther is you just can't develop the headings fast enough to get more tons through it. But it's in that range. It's not a 2,000, 3,000 tons, and it's not 50,000 tons, it's somewhere in between.

Speaker Change: It's somewhere in between.

Rob Krcmarov: Yeah, but I do want to emphasize that this is purely conceptual at this stage. All we have is the, well, hopefully, the permission to conduct exploration activities. It doesn't imply any pathway to mining yet. We still have quite a few hoops to jump through.

I do want to emphasize that this is purely conceptual stage, where all we have is the is well hopefully the permission to conduct exploration activities. It doesn't imply any any pathway to mining. It we still have quite a few hoops to jump through.

Speaker Change: One last point could you refresh me as to the tons per day, when the Troy mine operators nearby.

Rob Krcmarov: One last point, could you refresh me as to the tons per day when the Troy mine operated nearby? That was a similar flatline room and pillar. I think that predates just about everyone in the room, so we'd have to look that one up for you. That's right, we'd have to go back and take a look.

Speaker Change: It was a similar flat line.

Speaker Change: <unk> core.

Speaker Change: I'm sorry.

Speaker Change: Let me I got predates just about everyone in the room. So we'd have to look that one up for you. That's right we'd have to go back and take a look I want their earned 42 years ago I'm too old right.

John Tumazos: I went there 42 years ago, I'm too old, excuse me. Thank you so much.

Speaker Change: [laughter].

Speaker Change: Okay.

Chris Ross: Thank you so much I will now turn the call back over to Rob Chris Ross for closing remarks.

Rob Krcmarov: I will now turn the call back over to Rob Krcmarov for closing remarks. Okay, thank you everyone for joining us on the call and thank you all for your questions. We look forward to updating you next quarter, if not earlier. Have a good day, everyone. Thanks, everyone. This does conclude today's conference call. You may now

Chris Ross: Okay. Thank you everyone for joining us on the cole and thank you all for your questions. We look forward to updating you next quarter, if not early and have a good day everyone.

Chris Ross: Thanks, everyone. This does conclude today's conference call you may now disconnect.

Chris Ross: [music].

Chris Ross: Yeah.

Chris Ross: [music].

Chris Ross: Sure.

Chris Ross: Yeah.