Q2 2025 Hecla Mining Co Earnings Call
Because 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 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again, thank you. I would now like to turn the call over to Mike Parkin, vice president of strategy and investor relations. Please go ahead.
Thank you, operator. Good morning, and thank you for. Thank you all for joining us for heckla. Second quarter, 2025 results conference call. I am Mike Parkin, vice president strategy, and investor relations, our earnings release, that was issued yesterday. Along with today's presentation are available on our website. On today's call our Rob crits, moral president and chief executive officer, Russell Lawler, senior vice president and Chief Financial Officer Carlos aguar, senior, vice president and chief operations. Officer Kurt Allen, vice president expiration and the Patel vice president F finance and Treasurer and Matt botman vice president technical services at the conclusion of our prepared remarks. We will be available to answer questions, turning the slide to our cautionary. Statement slides, any forward-looking statements made today by the management team come under the private Securities. Litigation Reform Act and it involves risks as shown on the slide to
In our earnings release. And in our 10q 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 the news release.
I will now pass the call over to Rob.
Thank you, Mike and good morning everyone. Turning the slide 3
A strategic Vision remains focused on 4 key pillars grounded in ESG leadership that position Heckler for sustainable value creation.
The first pillar is operational excellence. We're starting to implement semi Automation and advanced analytics across our operations. We standardizing our systems and processes, and improving mind planning to drive efficiency gains throughout the organization.
Our second pillar is portfolio. Optimization our casa barata strategic review has progressed, well,
And I'm pleased to report that we should be in a position to update the market in the coming weeks on path forward.
I also want to address the recent acquisition activity in the sector.
I believe the best opportunities to add value for shareholders is through deals that focus on earlier stage assets. This is Acquisitions of well-defined producing assets that are already being fully valued in the market.
so, while we will continue to evaluate potential opportunities as any prudent management team should
At this time, we see more compelling value surfacing opportunities within our own robust project pipeline.
Our third pillar focuses on discipline Capital allocation so prioritizing High return projects while strengthening our balance sheet.
With structuring our framework to prioritize free cash flow generation with clear return on invested Capital targets.
This means that every dollar we deploy must meet analytically, uh, derived return hurdles,
Strategy in meeting these goals and Russell's going to speak more on this in a moment.
Forth. We committed to maintaining our silver market leadership, our high quality operations. Averaging 14 plus year Reserve lives, which is double the peer average, and they operate exclusively in low-risk jurisdictions.
Are we striving to achieve these uh pillars and while continuing to aim to be an ESG leader in the silver sector through environmental stewardship, through strengthening First Nations Partnerships and maintaining safety excellence.
Turning to slide 4. I want to walk you through the Strategic recalibration at Kino Hill.
That, uh, really demonstrates our discipline approach to Value creation.
Our focus on optimizing Keno Hill, is confirmed that it is a core asset capable of delivering, strong returns, even at conservative middle price assumptions.
The asset meets, our investment hurdle rates at 25 per ounce, silver and approaches self financing capability at current middle prices.
The key strategic.
Pardon me, the key strategic decision was revising. Our production Target to 440 tons per day down from the original, 550 to 600 tons per day Baseline. And this isn't about scaling back. Its about optimization,
Through improved, uh, all quality control over baked over break reduction and cost control this throughput level delivers Superior returns while preserving our expansion. Optionality
We've identified mining capacity as the primary near-term production constraint.
And we have high confidence in achieving our Target through, systematic Capital deployment, including Simon and tailings plant construction waste dump upgrades, Mine Development programs tailings, capacity expansion and water treatment infrastructure enhancements.
This measures approach gives us high confidence in our Target 440 tons per day. While maintaining the flexibility to expand when the conditions warranted
As we turn to slide 5, let me walk you through the compelling, Financial case for our 440 tons per day, optimization at Kino Hill.
The economic sphere of particularly strong looking at the table in the upper left of the slide.
At $30, silver. A significant discount to current spot prices.
Tina Hill. Will deliver a 35% irr over? Its reserved my life.
This return profile is well above our investment thresholds.
And demonstrates the potential quality of this asset even under our conservative case at 25 per ounce. Silver, the project will generate a solid 15% irr from January the 1st 2025 forwards.
The 16-year reserve life provides another strategic advantage.
This longevity has the potential to capture value through multiple middle Cycles.
As illustrated by the red line on the chart. We expect, there is the potential for particularly strong free cash flow generation in later years as the Mind reaches its steady state production of 440 tons per day.
And of course I'm going expiration success. Could extend the Min life which could further enhance the already attracted returns
I'll now discuss the median term outlook for Keno Hill and some of the major projects will undertake to deliver the asset into name plate capacity.
Slide 6, outlines our systematic approach to ramping up Tina Hill to its optimized production level.
Our production timeline demonstrates, a measured de-risked path from current operations to 440 tons per day, which we anticipate achieving in 2028.
The key here is that we're building keynote hill with a long-term future in mind rather than rushing the ramp up.
And this approach allows for sustainable returns to our shareholders while ensuring that ESG, Excellence through our commitment to environmental stewardship, and partnering with the First, with a local First Nations.
And from an infrastructure perspective, our tailing storage facility will operate under phase 3 under Phase 2 through 2028. When phase 3 will seamlessly. Take over this sequencing aligns with our waste storage capacity and existing permitting framework. Diminishing, the risk of potential bottlenecks
Now, while our analysis confirms that 440 tons per day makes our return thresholds, even with conservative silver price assumptions, we've preserved valuable optionality.
The infrastructure, we're building can support expansion Beyond this. Level should future conditions warrant.
Meanwhile, our expiration program continues to deliver consistently replacing depletion, and growing our resource base. So what we're accomplishing at keynote Hill is systemic de-risking.
While advancing the project towards sustainable, profitable production, with each milestone we achieve, we increase our confidence in the project's potential to deliver meaningful returns to our shareholders.
As with any development project execution remains key.
Turning to slide 7, the second quarter delivered exceptional results across multiple metrics.
Owners of nearly 58 million and record, adjusted IBA of 133, million. Improving our net, leverage ratio to 7 times.
We generate a cash from operations, of over 160 million and record, quarterly free cash flow of 104 million.
Operationally, we produce 4 and a half million ounces of silver and nearly 46,000 oz of gold.
Our silver operations delivered cash costs of negative 546 per ounce and all is sustaining costs of 5.19 per ounce that's after by product credits.
CAD is unit costs dropped by over 600 per ounce over the price order.
And lucky Friday, set a new quarterly Milling record.
On Green's Creek.
Strong performance year today. We made positive revisions to Gold production and silver costs Guidance with a new guidance, summarized and slide 24 and the appendix of this presentation. I'll now hand the call over to Russell for a detailed financial review. Thank you rob turning to slide 9. Our Capital allocation priority is Center on. Strengthening our balance sheet investing in our highest return opportunities across our portfolio and maximizing free cash flow generation. As we focus on these priorities, we're investing in organic growth, notably. This was Keno Hills, first positive free cash, flow quarter under our ownership, we continue focusing our deleveraging having improved, our net leverage ratio to 0.7 times. And earlier this week, we initiated a partial Redemption.
For 212 million of our senior notes.
Additionally, we also repaid our investment, Quebec notes. Totaling $50 million Canadian from free cash flow in July.
We're also progressing on portfolio, optimization with strategic reviews with the Strategic review of Casa bardy and disposal of a non-core exploration property and a non-core equity position on the right hand side of the slide. You'll note that our producing asset base generated over 100 million dollars in free cash flow. A new quarterly record with all 4 Minds contributing to this total. Moving on to slide 10, silver made up 41% of our Consolidated Revenue with gold increasing to 42% based on the performance of kasab Barty and greens Creek. In addition to the increase in the price of gold, while base Metals made up the remaining 17% with the increase in the silver price. We've also seen an expansion in our margins which Grew From 65% last quarter to 85%. This quarter was silver, A6 of 5.19 cents per ounce after byproduct credits. I'll discuss the details more on the next slide, but in addition to the performance of our operations, we took steps during the quarter to improve our balance sheet which resulted in our net leverage ratio, improving significantly from 0.27 times.
From 1.5 times last quarter.
Turning to slide 11, our strategic approach to raising Capital demonstrates prudent financial management in which we utilize our ATM facility to raise funds for a partial Redemption of the senior notes, we chose the ATM facility to execute this, Capital raise to minimize shareholder solution versus traditional Equity offerings, which have had discounts of more than 10% this year. Whereas we executed the ATM at a price, which is approximately 10% higher than the volume weighted average price per quarter at at a minimum cost to our shareholders. This plan reductions, this plan debt reduction lowers, our overall future interest expense by about 16 million dollars on an annual basis. We anticipate the interest savings will be reinvested to accelerate value creating activities including investment in our operations expanded expiration programs, as well as strengthening the balance sheet. Our strong existing asset base provides us confidence in our ability to service the remaining debts. Even apart from using the proceeds, from any potential asset sales and fund growth initiatives, while maintaining operational flexibility, so going forward.
We would prioritize other means for debt reduction before issuing more Equity. I'll now turn the call to Carlos to discuss the details of our operations.
Thank you, Russell. I will begin on this slide 13. Great continues to be our Flagship asset generating. A strong free cash flow.
The second quarter, silver production was 2.4 million Oz, 21% increase over the first quarter with silver grade upgrading 13.54 ounces per ton.
Total cost of sale decreased 15% to just under 59 million dollars. Our second quarter silver cash cost was negative, 11.91 cents per ounce, and all sustaining costs were negative, 8.19 cents per ounce. Both after byproduct credits,
Better than expected gold production in higher gold, prices dropped really strong cost performance over the prior quarter.
The operation generated over 75 million in operating cash flow and 69 million in free cash flow.
The table and it's like 13 summarize the guidance for the mind.
Turning to slide 14 lucky Friday. Achieved a new quarterly meeting record of over 114,000. Tons beating the first quarter record by 5%. We maintain consistent, silver production of 1.3 million Oz, with rates of 12, and a half pounds per ton.
Total cost of sale decreased at 4 4% to 42.3 million dollars. With cash cost of $6.19 per ounce and also staining cost of $197 per ounce.
The operation generated $20.7 million in operating cash flow and nearly $5 million in free cash flow.
We expect that through Court to be our software production quarter of the year due to Planet Capital project that will impact hoist availability.
Which was anticipated in October, guidance, lucky Friday. Guidance remains with no change.
Learning to slide 15.
In a hill. Second quarter silver production which is just over 750,000 Oz at a million rate of just under 300 tons per day. As we continue ramping to higher tonnage rates importantly, we delivered 2.7 million in free cash flow in the second quarter or first positive free cash flow quarter under head ownership
The operation remains in pre-commercial production as the ramp up continues and capital projects are executed the cemented tailings plank construction. Work is progressing well and we expect completion of the year end.
On a slide 16 cable Rd showed significant cost improvements over the prior quarter with both cash cost and all all in sustaining cost decreased by more than 600 per ounce.
Second quarter, gold production increased 37% to just over 28,000 Oz driven by Planet increases in bulk and developing surface or grades.
We expect these 3 pink ratio of the 160p to decline in the 4 quarter.
With our surface mining contractor completing the mobilization, this will drive further cost reductions while maintaining full meal capacity.
Cash goes in the second quarter, improved to 1578 per pounds and all in sustaining costs to 1669 per ounce.
We expect to provide an update on our strategic review process in the coming weeks.
I will now pass the call to court.
Thanks, Carlos, turning to slide 17. I will give an update on the activities going on in Nevada.
Historically, Midas produced 2.2 million ounces of gold and 27 million oz of silver at exceptional grades.
with a fully permitted Mill, ample tailings capacity in 30,000 Acres fairly explored Midas offers potentially transformative upside
The 2020-2021 Center Discovery contains 169,000 oz of gold and inferred resources, indicating a larger untapped system.
Active drilling is delivering results.
7 of 12 plant holes are completed and have yielded 2, new gold bearing. Uh structures with visible gold. This is not from infill drilling or incremental extensions but from areas located over 2 miles from the existing underground development and dense Drilling. And that really is what makes this particularly exciting.
These potentially emerging discoveries, combined with widespread mineralization indicators throughout the area.
Support potential for a significant new deposit. A recent draft engineering, assessment confirms the mill remains in good condition. Requiring only modest Capital to restart.
Hollister was historically ranked as North America's third, highest grade underground Gold. Mine producing 0.5 million oz of gold equivalent located within Trucking distance of midas's processing facilities. The large property shows. Extensive surface alteration in mineralization the hatter groin resource anchors, multiple high-grade expansion targets with additional potential at centium?
Both assets feature, proven high-grade, productive, production, history.
Existing infrastructure, eliminating major Capital needs and vast unexplored potential with that. I'll turn it back to Rob.
Thanks, good. Turning to slide 18.
First, we're focused on creating long-term value, a Keno hill by prioritizing permitting and project execution.
Second. We'll continue deleveraging through strong, free cash flow generation.
Third. We're establishing a capital, allocation framework to ensure smart organic investment and forth. We're rationalizing, our portfolio with the casa baratti strategic review, expected to conclude in the coming weeks.
I now want to address what I feel. Um, hecka mining makes for a compelling investment opportunity. So please turn to slide, 19.
Hecklers competitive Advantage is evident in our industry-leading reserve my life. Average. Reserved, my life.
Of 14 years is double the silver period. The the silver industry peer average of just 7 years. This provides exceptional stability and long-term value creation potential. And allows for us to invest in these operations, under the belief that we have more than a decade to earn a return on those Investments.
Not only do our mindset worldclass mind lives. They're also positioned in the US and Canada, which gives us the best jurisdictional risk ranking of any of our peers.
Moving on to slide 20. We see another reason to own Heckler shares and what makes our portfolio unique
Echo offers investors substantial, silver Revenue exposure with about 45% of our 9-month, 2024 Revenue coming from Silver amongst the highest in our peer group.
And this calculation includes recent uh peer transactions on a pro forma basis.
Silver exposure has remained strong, the second quarter results showing 41% of revenues from silver sales.
Our asset portfolio is heavily focused on silver with both revenues and resources. Concentrated in this precious metal
And finally, on slide 21. We compare Heckler to our immediate peer group on core valuation metrics.
We Believe Heckler represents the best value investment in the midcaps silver space. We trade at approximately a dollar 60 per silver equivalent amounts of total resources. The lowest amongst mid-cap peers.
and at 1.3 times now, which puts us at the low end of the peer range.
the bubble sizes on this chart are equally important. They reflect jurisdictional quality with larger bubbles indicating safer jurisdictions and as you can see, heckler's, focus on safety, jurisdictions is demonstrated by our bubble size relative to our peers.
Its undervaluation represents significant asset reevaluation outside. As we shift capital towards high-return projects designed to unlock the true value of our mineral reserves and resources, I'm confident that over time, and through continued execution, our true value will be better reflected in our share price.
With that operator. I'd like to open the call to questions.
At this time, I would like to remind everyone that in order to ask a question, please press 5 and the number 1 on your telephone keypad for positive moments. You can file a journey roster.
your first question comes from the line of Wayne Lamb with TD security, please go ahead
Yeah. Thanks. Uh, morning guys. Um,
Maybe at greens Creek uh congrats on the good quarter there operationally uh just wondering what was driving the higher grades and the outperformance there in the quarter. Was that a function of positive uh uh reconciliation or were those higher grades anticipated? As part of the Mind plan? And then just wondering maybe if there's potential for that to kind of continue here, or should we expect a bit of a reversion in the back half of the year?
So we are expecting to continue with similar Grace for the remaining of the year and and the main reason about it was a good execution. We had additional areas available to with better grades and and that was the main reason for it.
Okay. Got it. Thanks and then maybe a keynote Hill.
Uh, it seems like there's been quite a change in commentary quote unquote uh maybe helped by the continued strength in males prices. Um, I guess last quarter. Uh, the commentaries seem to indicate that uh, the 4440 tons wasn't sustainable, uh, give them a confines of the current permit, constraints.
Um, so just wondering, uh, you know, what's changed there um, that would enable you to reach that target? Are you getting, are you anticipating more, or uh, from Birmingham or uh, Flaming Moth? Just wondering what's driving uh, the change of thinking here?
Or control all those sorts of things, anything you want to add color or matt?
And and it's just the proper balance between Capital execution. Um,
Permitting and a space for growth. So we are trying to balance the all the component.
And that's it.
okay, but you have you have enough capacity on the back end to
get to the 440 tons. Give them the current permit constraints.
We won't be getting the addition here that will still take, uh, some some time. But we do expect to see an increase next year. And yeah.
Okay. Okay, uh, and then maybe just, uh, 1 last question for me. Um, maybe on the debt, um, just wondering in the context of record prices and the number of your peers, being able to deliver organically, uh, and and buy back some stock. Um, did you guys feel as though the portfolio uh, is not positioned to where the current operations would be able to service that debt and then maybe just wondering uh if you in conjunction with the elimination of the silver link dividend has the capital allocation strategy changed here or just wondering why you felt the need to retire a large amount of the notes with quite a bit of term left on the debt.
Yeah. Thanks. Thanks, Mandy, the idea behind that was both the silverlink dividend and, um, you know, the interest that leaves the company to
To service the debt. Um, those funds would be better served by our investors to be invested in in our operations and, um, in the opportunities that we have within our portfolio. And so we took the opportunity to, um, you know, reduce the debt so that we could increase the cash flow and reinvest in in the assets. Um, you know, you heard. Uh, Kurt talked about, Nevada, We we've owned Nevada for quite some time. We've been high on Nevada for quite some time, but um, the exploration there has been kind of been fits and starts as we've had cash flows. So what we're looking to do is really um, generate consistent cash flows, so that we can then reinvest those cash flows back into those. Those areas that will benefit our, uh, investors the most
Okay, great. Thanks for taking my questions and congrats on a good quarter.
Thank you.
Your next question.
Please go ahead.
Hey, Robert team. Thanks for taking my questions.
Good morning, Michael. Oh perfect. Um, at Casa, you stay in the release that the pit stripping ratio is expected to decline in the fourth quarter of this year and that should be further reducing your costs, uh, 2-part follow-up to that. The first of all we're halfway through Q through next. Q3 next week. Can you provide a bit of color on what we should model for this quarter? And then maybe also quantify the improvements in the stripping ratio that you expect to see in Q4 and your uh, current cost to haul that waste please.
I hi. Hi Co this is Matt lman. I, you know, there's a lot of pieces that are moving here but 1 of the primary factors for the decrease in, stripping ratio is the bit is nearing the end of its mind line. So as you go down deeper in the pit, your stripping ratio is just going to increase or improve uh geometrically as it goes down. So you know, we started off the year somewhere around that 15 to 20 to 1 thing. We're probably close to 10 to 1 at this point and then you'll just see it completely decrease over the next 18 months until those that last ton of ore that comes out is probably 1 to 1. So you know we're probably looking at something like a 10% decrease before the end of the year but it's just going to go slowly until we we we reached the end and may maybe I'll jump in just a little bit, right? Because you know clearly we don't give guidance
On a quarterly basis. We've seen the stripping ratio go down as we've gone through the year and that you see that come through in the economics. We expect as that stripping ratio will go down, we'll be able to reduce, uh, contractor Reliance, which we should see then a cost improvement from that and, you know, as we look at, uh, the guidance that we provided, we, we expect to meet the annual guidance throughout the year. Um, but, you know, clearly we don't give that quarter by quarter.
Fair enough. And then if the property process oh or or the cost of the holidays uh any any color on that?
Distances are just going to get more uh, longer for us and not going to help.
Got it. And I get there is a strategic review process here. But, I mean, with the permitting process for the new pits at Casa, uh, how much, uh, time should we mentally be looking at for that to happen? And maybe just, uh, cash cost, like the costs that you pay to get the sun, I assume, or reasonably the minimum, is correct?
In permanent is not a. Um, it's not a uh, super world defined process. It's takes time. There's uh, there's review periods. There's backwards. And forwards. What we've previously said is that there was going to be a 5-year permitting Hiatus and, uh, that would allow us towards a tail end of that. We would uh, do some uh, we would do some pretty stripping uh, some deep watering, and so on and so forth, getting ready? Um, that's that's all we can say. We can't be much more specific in that at this point.
Cool. Okay, I'll get back to you. Thank you.
Thank you. Bye.
And your next question comes from the line of Joseph Lear with Ross Capital. Please go ahead.
Hey guys. Uh, thanks for taking the questions. Um, I guess first 1 back on Kino on this slide, bye from the presentation, it shows, um, that at the 440 tons per day that the the free cash flow increases starting. Pretty much in 2028, um, is that driven by higher grades?
lower capex, a combination thereof just so we can you know, model out that
Yeah. Yeah. Joe all I can I can jump in here. That's a combination of a few things. Um you know you do see some of the larger projects coming to an end at that point. So we do see Capital coming off to some degree. Um, if if you Flip Flip to the next slide, you you will see that there is some projects that will have to obviously continue and we'll have to continue um Mine Development and and those types of things. So it's not the capital comes to an absolute halt, but it does you know, as we complete the um kali's batch build plan. There's some water treatment capacity, those types of things. When those things come to a, a completion, you do see the capital de decrease. You also see the throughput, um, that that throughput getting to 440 tons per day, uh, will scale up and get to that 440 tons per day, kind of late in this decade as the anticipation. And so as a result, you see more throughput and therefore you would see um, higher Oz production as well.
Okay, that's that's helpful.
and then, um,
Over at greens Creek. Uh, it looks like
You know, it could have been an even better quarter. I mean, it was already a pretty good quarter for the mine, but it could have been a better quarter if not for maybe some concentrate that didn't get shipped out in time to count it. Um, should we expect that to get sold next quarter?
Yeah, greens Creek, we we've talked about this, you know, it's uh the the sales can be lumpy right because we ship out. Um, essentially generally once per uh, month on a ship and so depending on when you ship within the month, we had a shipment in June but it was kind of earlier in the month of June, uh, compared to in March, it was later in the, in the month of March. And so we just had an inventory build up, and it it really just comes down to, um, when a ship would leave in September whether we would have that inventory, um, kind of remained stable or whether we would see a draw down in inventory.
Okay. But at some point, it'll go out perspective of
Sorry, Joe, what was that?
But at some point it's it'll be sold. It's just it's not necessarily going to show up into 3. It's just eventually going to show up.
Oh yeah, absolutely. And you know it's uh you know we we have to put together, you know, in 1 ship, you may have um 2 or 3 different Parcels going to 2 or 3 different customers. And so, you know, you're managing that process, trying to both manage the inventory on site, um, as well as, um, getting Ships In and Out based on tides and and and light. And when customers need it,
Etc. So it's it's a balancing act trying to get it all done, but we we look at that and try to, you know, maximize get as much revenue as quickly as possible. So you know it's not like we're sitting on it.
Okay.
All right, that's helpful. Thanks. I'll turn it over.
again, if you would like to ask a question, please press star then the number 1 on your telephone keypad,
Your next question comes from the line of Alex Janu with National Bank Financial. Please go ahead.
Questions for me on, um, cats, birdie and Kino Hill, uh, maybe just starting the keno Hill. I went to to clarify your slide size, you've got, um, you know, free cash flow on discounted, uh cash flow expectations at the different silver prices and they're saying 440 tons per day. Is that is that kind of assuming you're gradual ramp up to 440 or is that a hypothetical assuming? It was 440 and 262728 Etc? I'm just trying to maybe we should have clarified that in that slide. Um, that is a ramp up to 440 tons per day. We would get to that 440 tons per day. Uh, late later in the decade, 29 or 30 in this scenario, ramping up to that point. So yeah, I appreciate the question because, um, you know, we should have clarified that on the slide.
Okay. Okay, that makes sense. I figured that was probably the case, but yeah, it's to check, um, and then just a kind of a related there. I know somebody has this earlier or a variation of it just on the capital side.
You know, like I could kind of use that chart to help calibrate but uh, you know, you noted, a few things are coming off any big spending that we could kind of think about over the next 2 years to kind of get to that 440 rate. Uh, any major Investments that have to be done.
Um, yeah, well, you know, you know, Carlos is, is sitting here with me, too. So please fill in some of the details, but, um, we, we do have to build some tailings, um, over the next few years. And I think you see that on site 6, um, it's kind of kind of laid out there. Uh, we're working on a tailings batch, build plant, um, now and and that will, you know, kind of come to the conclusion sometime next year. There's some additional water treatment that we have to put in. Um, I think there's some waste voice storage, um, some other infrastructure, some buildings, and things like that. Yeah, they're not all Investments related with, uh, uh, power distribution upgrades. So, it's in some of the probably you settle going to take over 1 year.
And so there are significant upgrades in the infrastructure, and we are expecting to maintain a similar level of investment for the rest of the day.
Okay. And then just on the permitting uh sorry for dry stack dealings with slide 6 shows a, you know, later in 2028 additional property capacity, required, is that capacity required just to maintain it at 440. So I guess my question is um, come 2028 end of the year. Um, you know, what's the risk that that's kind of a hard stop unless if you don't have the permitting, uh, permitted additional capacity or do you have a bit more room to to keep going and kind of work on the permits?
I guess I I'll take that 1. So yes there you know in 20 the end of 2028 we start to run into a capacity requirement, we need additional capacity for tailings. We do have some flexibility that once we have the cemented tailings, plant in constructed and operational. We have more opportunity to put more of the tailings on the ground which then makes uh that surface capacity less of a risk. But yet somewhere in 29, we do have to have that permit in place and it's already underway, we're already chasing that. So it does give us some room to work and similarly, the waste production. There is a limit in our permit that says, total tons of waste that we can mine. It's not a surface constraint, it's not any physical constraints in the permit, so that needs an expansion as well, and they hit about the same time frame. So, that's part of the reason why you ramp up to 440 over a longer period, if you ramp up the mind to 440 very quickly and then run out of capacity, then you're shut down that doesn't help any
Anyone either? So it's it's all about balancing, it all the pieces at once.
Okay, that makes a lot of sense. Thanks uh and then just lastly Casa Bari. Um
You know, gold prices are obviously quite High. Um, is there opportunity to and it's I guess a similar question here on the tailings and permits, uh, is their opportunity to continue Caster variety even for another 6 or 12 months, you know, kind of lowering the cut off getting more tons through or is it uh, or their other constraints, whether it's permits or tailings or something like that, that kind of making that's making 20 end of 2027 a um, a deadline.
When we started this year, uh, with the view of pleasant down the underground, uh, around May of this year, obviously, gold prices have helped. And, um, you know, it's, it's, it's turning out to be an increasingly valuable asset. We've now extended the underground to, at least the end of the year and then we'll just see where gold prices are.
Okay.
Okay. And, and
here on cassa, um,
You know, you've kept guidance. So I guess my question is, you know, any upside to that number? Or should we be kind of thinking that production will come down in the second half of this year?
Yeah, I guess I can jump in and ask that, you know, we're we're working through a strategic review right now. Um I would suggest as Rob said in his comments early in this slide, we'll have something to talk about to the market in a few weeks and at that point uh we'll we'll be able to answer that question.
All right, fair enough. Thanks.
Your last question comes from the line of Kevin O'Hara with BMO Capital markets. Please go ahead.
Hey, Robin team. Thanks for taking my question and congrats on the quarter.
Um, just going back, 1 more time to Kino, uh, on on the ramp up their, can you give us any granularity on the trajectory of the throughput? Would it be like a more gradual increase to the 440 tons per day? Or should we expect, uh, kind of more lumpy gains, and throughput as you complete some of these infrastructure items.
So it'll be a gradual ramp up. Um 2027 will probably be somewhere around about 3:30 tons per day from from memory and that's around about 75% of the permanent capacity. And then it'll um, it'll continue to ramp up to 440.
Yeah, that yeah, there's nothing to that. That's that's that's the plan.
Okay, great, that's helpful. Um, and then just final question for me, shifting to, uh, to the Montana assets. Can you remind us what your current thinking is on how to advance those? And I think you previously been looking at a few options like maybe bringing in a partner versus advancing, it yourself, is there any updates on your thinking there?
Uh, not really, our Focus has really been on completing the casa review. Um where I have Dave shankha here with me. Um, we're basically in the final stages of the review period. In fact, I think that finishes next week, can you fill us in Dave? Sure. Yeah, we expect to get a finding of no significant impact uh, on our our permit application. Uh and the objection period ended this week.
Um, so the forest service will work through that. But we would expect by say October time frame that we would have, that plan of operations approved, which would allow us to begin to rehab the, the added, and the portal. And to, to begin the exploration work, uh, at that project. So,
We'll see what we'll see. What happens with the objection. Period.
In. Um, so this is just to remind you this is primarily a copper asset uh copper equivalent grade of about 1.2%, copper equivalent. Um, I would say that it's probably not going to be uh core for us and so we would be receptive to uh, someone who's going to have a copper Focus coming in and partnering with us. We do definitely want to participate in the upside on this thing because we see substantial value there to be realized.
Okay, great. That's it for me. Thanks, guys.
Thank you. Kevin.
And that concludes our question and answer session. I will now handle over the call to Mike Parkin for closing your work.
Actually, uh, I'll make some closing remarks, operator. Uh, just before we wrap up, I do want to recap Hecla's value proposition. So, um, unmatched jurisdictional security—it's something I've talked about—and so, in an era of increasing geopolitical uncertainty, I think Hecla offers what others can't: complete operational stability, with 100% of our core assets in Canada and the U.S. We eliminate the regulatory surprises, the policy shifts, and the security risks that plague some of our competitors in less stable jurisdictions. And so, your investments are going to be protected by really the world's most reliable mining frameworks.
You've got the industry-leading, silver exposure. And if you believe in Silver's fundamentals and you should techa delivers peer leading, silver Revenue exposure, and so what we do produce gold and lead and zinc, silver dominates, our Revenue Matrix and revenue mix rather and that percentage could increase further, depending on the results of the uh, strategic review of Casa variety. When silver moves, we should move more.
And this concentrated exposure gives you high leverage to the metal, with some very compelling supply-demand dynamics in the sector.
You got decades of visible production, short mine lives, creating investment uncertainty, and our assets offer something rare: multi-decade production visibility that extends well beyond typical investment horizons. Our long-life mines don't just offer returns next quarter; they provide a sustainable production platform.
Cycles. And this isn't just speculating on finding tomorrow's answers. It's ownership of proven long-term cash flow generation.
And there's discipline Capital allocation while competitors. Chase expensive m&a deals in Risky. Jurisdictions with deliberately stayed on the sidelines of the recent consolidation frenzy. Our strategy is clear create value through the drill bit, not through the checkbook.
Our proven expiration teams, consistently delivered, mine Life Extensions and new discoveries and that's the most accurate form of growth.
Uh, we're also built for all cycles, so our crown jewels, Greens Creek and Lucky Friday.
They're not just minds. They're fortresses, these are low cost, long life assets that are projected to generate cash even in downturns.
And that positions us to play offense when others are forced to play defense. So when the next cycle turns and distress assets flood the market, we expect to have a balance sheet that will allow us to capitalize While others perhaps struggle to find their higher cost operations in uh Dior risky jurisdictions.
In the bottom line really is that uh I think Heckler offers what smart investors seek and that's jurisdictional certainty. Industry-leading silver, leverage Decades of production, visibility discipline management, and cycle, proof assets.
In a sector full of risks. Our approach is to systematically eliminate the variables that destroy value while maximizing exposure to Silver's upside.
So, not just another mining investment, it's a strategic position in the future of silver backed by the stability to only the US and Canadian assets can provide. So thanks for joining us today and we look forward to updating you on our continued progress in delivering shareholder value through, operational excellence and strategic execution, have a great day, everyone.
Ladies and gentlemen, that concludes today's call. Thank you all for coming. You may now disconnect.