Q2 2026 Hecla Mining Co Earnings Call

August 5, 2026

Hillary: Hello everyone. Thank you for joining us, welcome to the Q2 2026 Hecla Mining Company Earnings Conference Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, please press star one again. I will now hand the conference over to Mike Parkin, Vice President of Strategy and Investor Relations. Mike, please go ahead.

Operator: Hello everyone. Thank you for joining us, welcome to the Q2 2026 Hecla Mining Company Earnings Conference Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, please press star one again. I will now hand the conference over to Mike Parkin, Vice President of Strategy and Investor Relations. Mike, please go ahead.

Speaker #1: If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, please press star 1 again.

Speaker #1: I will now hand the conference over to Mike Parkin, Vice President of Strategy and Investor Relations Mike. Please go ahead.

Speaker #2: Thanks, Hillary. Good morning, and thank you all for joining us for Hecla's second quarter 2026 results conference call. I'm Mike Parkin, Vice President of Strategy and Investor Relations.

Mike Parkin: Thanks, Hillary. Good morning, thank you all for joining us for Hecla's Q2 2026 results conference call. I'm Mike Parkin, Vice President of Strategy and Investor Relations. Our earnings release that was issued yesterday, along with today's presentation, are available on our website. On the call with us 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, Brian Erickson, Vice President of Operations, Kurt Allen, Vice President of Exploration, along with other members of our management team. At the conclusion of our prepared remarks, we will be available to answer any questions you might have. Turning to slide two.

Speaker #2: Our earnings release that was issued yesterday, along with today's presentation, are available on our website. On the call with us today is Rob Krcmarov, President and Chief Executive Officer, Russell Lawler, Senior Vice President and Chief Financial Officer, Carlos Aguilar, Senior Vice President and Chief Operating Operations Officer, Brian Erickson, Vice President of Operations, Kurt Allen, Vice President of Expiration, along with other members of our management team.

Speaker #2: At the conclusion of our prepared remarks, we will be available to answer any questions you might have. Turning to the slide, any forward-looking statements made today by the management team are under the Private Securities Litigation Reform Act and involve risks as shown on this slide.

Mike Parkin: Any forward-looking statements made today by the management team come under the Private Securities Litigation Reform Act involve risks as shown on this slide, in our earnings release, and in our 10-Q filing with the SEC. These 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. Please note, as we discuss the financial figures and projections throughout this presentation and in the earnings release, we are referring to our continuing operations. I will now pass the call over to Rob.

Speaker #2: In our earnings release and in our 10Q filing with the SEC. These and other risks could cause results to differ from those projected in the forward-looking statements.

Speaker #2: Non-GAAP measures cited in this call and related slides are reconciled in the slides or news release. Please note, as we discussed the financial figures and projections throughout this presentation and in the earnings release, we are referring to our continuing operations.

Speaker #2: I will now pass the call over to Rob.

Speaker #3: Thank you, Mike, and good morning, everyone. Turning the slide 3. Hecla enters the third quarter of 2026 from a position of real strength. And I'm speaking to financial strength, a position today that marks the strongest balance sheet in the company's very long history.

Rob Krcmarov: Thank you, Mike, and good morning, everyone. Turning to slide three. Hecla enters Q3 2026 from a position of real strength. I'm speaking to financial strength, a position today that marks the strongest balance sheet in the company's very long history. The attributes shown on this slide that define us as North America's premier silver producer, they haven't changed. What has changed, though, is that we have confidence with which we can now invest in what comes next. I'm eager to have our teams discuss some remarkable developments that are coming out of our substantial project pipeline, which further solidifies our market positioning. More on that in a minute. Turning to slide four. This was another very strong quarter for Hecla, even though a couple of headline numbers moved in different directions than last quarter.

Speaker #3: And the attribute shown on this slide that define us as North America's premier silver producer, they haven't changed. What has changed, though, is that the that we have confidence with which we can now invest in what comes next.

Speaker #3: So I'm eager to have our teams discuss some remarkable developments that are coming out of our substantial project pipeline. Which, further solidifies our market positioning.

Speaker #3: More on that in a minute. Turning the slide 4. This was another very strong quarter for Hecla. Even though a couple of the headline numbers moved in different direction than last quarter.

Speaker #3: And I want to spend a moment walking through why. Because I think the underlying story here is a good one. Revenue $334 million, compared to the record $411 million we reported in the first quarter.

Rob Krcmarov: I want to spend a moment walking through why, because I think the underlying story here is a good one. Revenue from continuing operations was $334 million, compared to the record $411 million we reported in Q1. Two things are driving that change. It's worth being clear about both, because neither of them is a production problem. First, metal prices pulled back from the highs we saw early in the year, although I do remain confident in the outlook for silver and gold prices. Second, part of the gap was simply timing. A meaningful amount of silver concentrate, mostly at Greens Creek, was produced but not yet sold as of quarter end. Had that concentrate shipped within the quarter, revenue would've been noticeably higher on top of an already strong quarter.

Speaker #3: Two things are driving that change, and it's worth being clear about both, because neither of them is a production problem. First, metal prices pulled back from the highs we saw early in the year, although I do remain confident in the outlook for silver and gold prices.

Speaker #3: And second, part of the gap was simply timing. A meaningful amount of silver concentrate, mostly at Greens Creek, was produced but not yet sold as of quarter end.

Speaker #3: Had that concentrate shipped within the quarter, revenue would have been noticeably higher. On top of an already strong quarter. That inventory shipped in early August, and you're going to see it show up in our third quarter results.

Rob Krcmarov: That inventory shipped in early August. You're going to see it show up in our Q3 results. Those of you who have followed us for some time know the lumpy sales pattern at Greens Creek. The adjusted EBITDA from continuing operations was $199 million, more than double the $94 million we generated a year ago. Operating cash flow was $175 million, and free cash flow was $136 million. Our second-best quarter on record and very close to the record $144 million we posted last quarter. Every single one of our mines generated free cash flow again this quarter, with Greens Creek and Lucky Friday each setting new site-level quarterly free cash flow records at $130 million and $88 million respectively. Our balance sheet is simply the best it's been in our long history.

Speaker #3: Those of you who have followed us for some time know the lumpy sales pattern at Greens Creek. The adjusted EBITDA from continuing operations was $199 million, more than double the $94 million we generated a year ago.

Speaker #3: Operating cash flow was $175 million, and free cash flow was $136 million. A second best quarter on record, and very close to the record $144 million we posted last quarter.

Speaker #3: Every single one of our minds generated free cash flow again this quarter, with Greens Creek and Lucky Friday each setting new site-level quarterly free cash flow records.

Speaker #3: At $130 million and $88 million respectively. Our balance sheet is simply the best it's been in our long history. We ended the quarter with $483 million in cash, no long-term debt outside of capital leases, and an essentially fully undrawn $225 million revolving credit facility with a $75 million accordion.

Rob Krcmarov: We ended the quarter with $483 million in cash, no long-term debt outside of capital leases, and an essentially fully undrawn $225 million revolving credit facility with a $75 million accordion. A balance sheet this strong gives us real optionality, the flexibility to keep investing in the projects and the assets that make the most sense for this business on our own timeline, rather than being dictated to by our balance sheet. On the operating side, we produced 4.2 million ounces of silver, up 8% from the prior quarter. Lucky Friday delivered new quarterly production record of one and a half million ounces of silver. I'm especially pleased with our safety performance. Our consolidated total recordable injury frequency rate, or TRIFR for short, improved to 1.57. That's a meaningful improvement from the 2.07 reported for Q1.

Speaker #3: The balance sheet this strong gives us real optionality—the flexibility to keep investing in the projects and the assets that make the most sense for this business.

Speaker #3: On our own timeline, rather than being dictated to by our balance sheet. On the operating side, we produced $4.2 million ounces of silver, up 8% from the prior quarter, and Lucky Friday delivered new quarterly production record of $1.5 million ounces of silver.

Speaker #3: And I'd sum especially pleased with our safety performance. Our consolidated total recordable injury frequency rate, or TRIFA for short, improved to 1.57. And that's a meaningful improvement from the 2.07 reported for the first quarter.

Speaker #3: That's the kind of improvement that reflects real deliberate commitment by our teams. And frankly, it matters more to me than any financial metric on this slide.

Rob Krcmarov: That's the kind of improvement that reflects real deliberate commitment by our teams. Frankly, it matters more to me than any financial metric on this slide. We also conducted our annual safety day in early June with senior leadership visiting every site to reinforce safe working practices. Turning to slide five. Our medium-term pathway to 20-plus million-ounce silver producer is advancing, and it's anchored by the Keno Hill ramp-up and a potential Midas restart, with further potential upside from Keno Hill expansion and from Aurora and Hollister in later years. Near return, we've got two organic opportunities at Greens Creek that I'm really excited to give you more detail on today. Both are the kind of high return, low capital intensity projects that we look for.

Speaker #3: We also conducted our annual safety day in early June with senior leadership visiting every site to reinforce safe working practices. So turning the slide 5.

Speaker #3: Our medium-term pathway to 20-plus million ounce silver producer is advancing, and it's anchored by the Kina Hill ramp-up and a potential MIDAS restart. With further potential upside from Kina Hill expansion, and from Aurora and Hollister in later years.

Speaker #3: And near return, we've got two organic opportunities at Greens Creek that I'm really excited to give you more detail on today. Both are the kind of high return low capital intensity projects that we look for.

Speaker #3: Our bar for any of these organic investments is a return on invested capital that clears our cost of capital by a healthy margin. And early work on both suggests that they can alternate over to Brian now to walk you through those.

Rob Krcmarov: Our bar for any of these organic investments is a return on invested capital that clears our cost of capital by a healthy margin, and early work on both suggests that they can. I'll turn it over to Brian now to walk you through those. Brian, over to you.

Speaker #3: Brian, over to you.

Speaker #4: Thanks, Rob. Good morning, everyone. Turning to slide 6. So I'll start with the Greens Creek pirate concentrate circuit. It's a project we've we're going to share considerably more detail about today.

Brian Erickson: Thanks, Rob. Good morning, everyone. Turning to slide six. I'll start with the Greens Creek pyrite concentrate circuit. It's a project we're going to share considerably more detail about today. To summarize, we're advancing engineering and metallurgical studies on a new processing circuit at the Greens Creek mill, that if the studies pan out, would produce marketable pyrite concentrate stream from mill tailings that currently goes to the dry stack tailings facility. Still pretty early-stage work, but I want to be clear about our conviction. The relative simplicity of the project, combined with the potential returns we're seeing at this stage of the study, give us confidence that this moves towards execution, not an evaluation for its own sake. Once fully ramped up, we expect the new circuit could add approximately one to 1.2 million ounces of silver and 10,000 to 15,000 ounces of gold in additional annual production.

Speaker #4: To summarize, we're advancing engineering and metallurgical studies on a new processing circuit at the Greens Creek Mill that is the studies pan out would produce marketable pirate concentrate stream from mill tailings that currently goes to the dry stack tailings facility.

Speaker #4: Still pretty early stage work, but I want to be clear about our conviction. The relatively relative simplicity of the project, combined with the potential returns we're seeing at this stage of the study, give us confidence that this moves towards execution.

Speaker #4: Not an evaluation for its own sake. Once fully ramped up, we expect the new circuit could add approximately 1 to 1.2 million ounces of silver and 10 to 15,000 ounces of gold in additional annual production.

Speaker #4: This is on top of Greens Creek's existing output. We'll also reducing volume. We're adding to the tailings facility. Early engineering and medical sorry, robust return on capital that would meet our investment thresholds.

Brian Erickson: This is on top of Greens Creek's existing output, while also reducing the volume we're adding to the tailings facility. Early engineering and metallurgical work points to the potential robust return on capital that would meet our investment thresholds. It's expected to be a low capital intensity project, with CapEx currently estimated at about $40 to 60 million. Anticipated mostly for mill components, storage building sizing upgrades, and some ship loader work to support the additional tonnage. Additional operating costs to run the new circuit are also expected to be relatively low in terms of the overall increase to our annual spend and are currently estimated at an incremental $10 to 15 million per annum. When you put all this together, you can see the potential for impressive NPV upside at current metals prices.

Speaker #4: It's expected to be a low capital intensity project, with capex currently estimated at about $40 to $60 million. The capital is anticipated mostly for mill components, storage building, sizing upgrades, and some ship loader work to support the additional tonnage.

Speaker #4: Additional operating costs around the new circuit are also expected to be relatively low in terms of the overall increase to our annual spend. And are currently estimated as an incremental 10 to 15 million dollars per annum.

Speaker #4: When you put all this together, you can see the potential for impressive MPV upside at current metals prices. Currently, we're targeting first production between the fourth quarter of 2027 and the first half of 2028, with a ramp-up period of roughly a year.

Brian Erickson: Currently, we're targeting first production between Q4 2027 and H1 2028, with a ramp-up period of roughly a year. We'll continue to firm up the economics as engineering advances, and we'll keep you updated. I want to stress these numbers are subject to change as we advance through more engineering studies, but we're very excited about the potential for this project in terms of production, but more importantly, in potential future cash flows. Second, I'll discuss the Greens Creek Tailings Reprocessing project. This remains one of the more compelling opportunities in the portfolio. The dry stack tailings facility over 600,000 ounces of gold as well as other metals. At 30 June 2026 metals prices, this represents an in situ value of roughly $6.1 billion. That must emphasize this before any recovery processing capital costs.

Speaker #4: We'll continue to firm up the economics as engineering advances, and we'll keep you updated. I want to stress, these numbers are subject to change as we advance through more engineering studies.

Speaker #4: But we're very excited about the potential for this project in terms of production, the more importantly, in potential future cash flows. Second, I'll discuss the Greens Creek tailings reprocessing project.

Speaker #4: This remains one of the more compelling opportunities in the portfolio. Dry stack tailings facility 600,000 ounces of gold as well. At June 30th, 2026, metals prices, this represents an in-situ value of roughly $6.1 billion.

Speaker #4: I must emphasize this before any recovery processing capital costs. We're working with a vendor who specializes in new technology. Set to commence phase three metallurgical test work this month.

Brian Erickson: We're working with a vendor who specializes in this new technology and is set to commence phase III metallurgical test work this month, which we expect to complete in the quarter. That work, together with confirming a suitable processing facility, is expected to determine how we move forward. As with the pyrite concentrate, potential to reduce Greens Creek closure and reclamation liability, potentially meaningful added benefit the potential cash flows could generate. If this project proves viable, we would expect it to be an additional low-cost intensity project that dovetails well with the pyrite concentrate project. Finally, the Midas restart project in Nevada also continues to advance. We're continuing to evaluate the hub-and-spoke model that would bring ore from Midas and potentially Hollister or other regional sources through the existing permitted mill.

Speaker #4: Which we expect to complete in the quarter. That work, together with confirming a suitable processing facility, is expected to determine how we move forward.

Speaker #4: And as with the pirate concentrate, the potential to produce Greens Creek long-term reclamation liability potentially meaningful added benefit to the potential cash flows could generate.

Speaker #4: If this project proves viable, we would expect it to be an additional, low-cost, intensity project that dovetails well with the Pirate Concentrate project. Finally, the MIDAS restart project in Nevada also continues to advance.

Speaker #4: We're continuing to evaluate the hub and smoke model that would bring ore from MIDAS and potentially Hollister or other regional sources, through the existing permitted mill.

Speaker #4: We're also evaluating remaining mineralization in the old mine under the existing mill as a potential additional ore source. Kurt will touch on the latest MIDAS exploration results in a few minutes.

Brian Erickson: We're also evaluating remaining mineralization in the old mine under the existing mill as a potential additional ore source. Kurt will touch on the latest Midas exploration results in a few minutes. I'll now turn the call over to Carlos for an operations review.

Speaker #4: And I'll now turn the call over to Carlos for an operations review.

Speaker #2: Thank you, Brian. During the slide 8, Greens Creek produced 2.1 million ounces of silver in over 14,000 ounces of gold in the second quarter.

Carlos Aguiar: Thank you, Brian. Turning to slide eight. Greens Creek produced 2.1 million ounces of silver and over 14,000 ounces of gold in Q2, in line with our expectations. Costs applicable to sales were $50 million, with cash cost of -$17.11 per ounce and AISC of -$10.71 per ounce, both after by-product credits. Exceptional results this quarter were driven by very strong by-product revenues. Cash flow from operation was $139 million, and free cash flow was a new site level record of $130 million. As Rob mentioned, a portion of the concentrate produced this quarter hadn't yet been sold at the end of last quarter, which is what drove the gap between our strong production and the revenue we recognized. That inventory was shipped in early August, and will be reflected in the Q3 financials.

Speaker #2: In line with our expectations. Cost applicable to sales were $50 million, with cash cost of negative $17.11 per ounce, and ASIC of negative $10.71 per ounce, both after byproduct credit.

Speaker #2: Exceptional results this quarter driven by various strong byproduct revenue. Cash flow from operation was $139 million and free cash flow was a new side level record of $130 million.

Speaker #2: As Rob mentioned it, a portion of the concentrate produced this quarter hadn't yet been sold at the end of the last quarter. Which is what drove the gap between our strong production and the revenue we recognized.

Speaker #2: That inventory was shipped in early August, and we will reflect it in the third quarter financials. For the full year, we now expect Greens Creek to produce 8 to 8.3 million ounces of silver, an improvement over prior guidance, and 51 to 55,000 ounces of gold, a cost applicable to sales of $240 million with cash cost of negative $12.50 to negative $12 per ounce, and ASIC of negative $4.25 to negative $3.75 per ounce.

Carlos Aguiar: For the full year, we now expect Greens Creek to produce 8 to 8.3 million ounces of silver, an improvement over prior guidance, and 51,000 to 55,000 ounces of gold at cost applicable to sales of $240 million, with cash cost of $-12.50 to $-12 per ounce, an AISC of $-4.25 to $-3.75 per ounce, both after by-product credits and both an improvement to prior guidance. Turning to slide nine. Lucky Friday had an outstanding quarter, producing a record 1.5 million ounces of silver on higher mill rates. Costs applicable to sales were $35 million, with cash costs of $3.95 per ounce and AISC of $17.8 per ounce, both offset by by-product credits. Cash flow from operation was $104 million, and free cash flow was a new site level record of $88 million. The surface cooling project is on track for completion by September.

Speaker #2: Both after by-product credits and both an improvement to prior guidance. Looking to slide 9, Lucky Friday had an outstanding quarter, producing a record 1.5 million ounces of silver on higher mill grade.

Speaker #2: Cost applicable to sales were $35 million, with cash cost of $3.95 per ounce, and ASIC of $17.8 per ounce, both after byproduct credits. Cash flow from operation was $104 million, and free cash flow was a new side level record of $88 million.

Speaker #2: Resources cooling project is on track for completion by September. For the full year, we have tightened out our silver production guidance to 4.9 to 5.2 million ounces, with cost applicable to sales of $140 million.

Carlos Aguiar: For the full year, we have tightened out our silver production guidance to 4.9 to 5.2 million ounces, with costs applicable to sales of $140 million. Cash costs are now expected to be lower at $9 to $9.75 per ounce, and AISC expected to be modestly higher at $20.50 to $26 per ounce, reflecting higher plant sustaining capital investment. Turning to slide 10. At Keno Hill, we produced 625,000 ounces of silver in Q2, up from half a million ounces in Q1. Cash flow from operation was $18 million, and free cash flow was nearly $15 million, the sixth consecutive quarter of positive free cash flow at Keno. We are taking a deliberate approach at Keno Hill.

Speaker #2: Cash costs are now expected to be lower at 9 to 9.75 per ounce, and ASIC expected to be modestly higher at 20.50 to 26 per ounce.

Speaker #2: Reflecting higher planet sustaining capital investment. Learning to slide 10, Akina Hill, we produced 625,000 ounces of silver in the second quarter. Up from half a million ounces in the first quarter.

Speaker #2: Cash flow from operation was $18 million, and free cash flow was nearly $15 million, the fifth consecutive quarter of positive free cash flow at Qino.

Speaker #2: We are taking a deliberate approach at Qino Hill. Rather than pushing for tonnage growth ahead of the site development and permitting work that needs to happen first, we are running the mine at a sustained lower rate while we focus our efforts there.

Carlos Aguiar: Rather than push for tonnage growth ahead of the site development and permitting work that needs to happen first, we are running the mine at a sustained lower rate while we focus our efforts there and continue to generate positive free cash flow, work that we believe supports a ramp to meaningfully higher tonnage rates in later years. Our updated full year guidance is 2.2 to 2.6 million ounces of silver, reflecting our focus on permitting and site build out in the nearer term. I do want to highlight some good news on the permitting front. We received the permit to expand our tailings and storage facility at Keno Hill this quarter. That approval reflects the strong working relationships we have built with both the Yukon government and our First Nation partners, the FND. It's an important piece of the foundation supporting our longer term plans for the site.

Speaker #2: And continue to generate positive free cash flow. Work that we believe supports a ramp to meaningfully higher tonnage rates in later years. Out of date full year guidance is 2.2 to 2.6 million ounces of silver, reflecting our focus on permitting and site relapse in the nearer term.

Speaker #2: I do want to highlight some good news on the permitting front. We received the permit to expand our tailings storage facility at Qino Hill this quarter.

Speaker #2: That approval reflects the strong working relationships we have built with both the Yukon government and our First Nation partners the MND. And it's an important piece of the foundation supporting our longer-term plans for the site.

Speaker #2: I'd like to turn the call over to Russell for the finance update.

Carlos Aguiar: I now turn the call over to Russell for the finance update.

Speaker #3: Thank you, Carlos. Turning to slide 12, let me take...

Russell Lawlar: Thank you, Carlos. Turning to slide 12.

Rob Krcmarov: Sorry, Russell, if I could just jump in. I'm aware that Brian dropped out. He's been dialing in from Yukon, so I just want to repeat a part that might be important that was missed. At the time, Brian was talking about the 51 million ounces of silver and the 600,000 ounces of gold and the many other metals that are locked in. I just want to point out that we are working with a vendor who specializes in this technology, and they're set to commence phase III metallurgical test work this month, which we expect to complete in the quarter. That work, together with confirming a suitable processing facility, is expected to determine how we move forward. I just wanted to complete the record on that because I'm aware that it was lost in transmission. Over to you, Russell. Thanks.

Speaker #1: Sorry, Russell, if I could just—Russell, if I could just jump in. I'm aware that Brian dropped out. He's been dialing in from Yukon.

Speaker #1: So I just want to repeat a part that might be important that was missed. At the time, Brian was talking about the $51 million ounces of silver and the $600,000 ounces of gold and the many other metals that are locked in.

Speaker #1: I just want to point out that we are working with a vendor who specializes in this technology. And they're set to commence phase three metallurgical test work this month, which we expect to complete in the quarter.

Speaker #1: So that work together with confirming a suitable processing facility is expected to determine how we move forward. So I just wanted to complete the record on that because I'm aware that it was lost in transmission.

Speaker #1: So over to you, Russell. Thanks.

Speaker #3: All right. Thanks, Rob. I'm going to start on slide 12. As Mike noted, everything I'll cover here reflects the results from our continuing operations.

Russell Lawlar: All right. Thanks, Rob. I'm going to start on slide 12. As Mike noted, everything I'll cover here reflects the results from our continuing operations. Mine revenue during the quarter was $323 million, with silver accounting for 68% of that total, while gold was 14% and the remaining from our base metal byproducts. Net income from continuing operations was $118 million, or $0.18 per share, and adjusted EBITDA was $199 million. Our margins remain exceptional. We realized 90% of the realized silver price as margin during the quarter. Consolidated free cash flow is $136 million, nearly matching last quarter's record of $144 million, with all three mines contributing. Turning to the balance sheet, we ended the quarter with $483 million in cash, no long-term debt outstanding outside of capital leases, and essentially a fully undrawn credit facility.

Speaker #3: Mine revenue during the quarter was $323 million with silver accounting for 68% of that total, while gold was 14% and the remaining from our base metal byproducts.

Speaker #3: Net income from continuing operations was $118 million, or 18 cents per share, and adjusted EBITDA was $199 million. Our margins remain exceptional. We realized 90% of the realized silver price as margin during the quarter.

Speaker #3: Consolidated free cash flow was $136 million, nearly matching last quarter's record of $144 million, with all three mines contributing. Turning to the balance sheet, we ended the quarter with $483 million in cash, no long-term debt outstanding outside of capital leases, and essentially a fully undrawn credit facility.

Speaker #3: We've moved from a net debt position of nearly $270 million a year ago to net cash position of roughly $472 million today. The strongest balance sheet and Heckla's history.

Russell Lawlar: We've moved from a net debt position of nearly $270 million a year ago to net cash position of roughly $472 million today, the strongest balance sheet in Hecla's history. Turning to slide 13. We've all watched oil prices and fuel prices climb on the back of current world events, and I want to spend a moment on why this is far less impactful for Hecla than it is much of our peer group. The starting point is the nature of our ore bodies. Our mines are high-grade underground mines. Because the grade is high, we process far fewer tons to produce each ounce. We don't run large diesel haul truck fleets that define low-grade open pit operations, so our diesel consumption per ounce is structurally low. That is the primary reason fuel is only about 3% of our consolidated cost structure this quarter. It's a function of these operations.

Speaker #3: Turning to slide 13, we've all watched oil prices and fuel prices climb on the back of current world events. And I want to spend a moment on why this is far less impactful for Heckla than it is much of our peer group.

Speaker #3: The starting point is the nature of our overbodies. Our mines are high-grade underground mines. Because the grade is high, we process far fewer tons to produce each ounce.

Speaker #3: We don't run large diesel haul truck fleets that define low-grade open-pit operations, so our diesel consumption per ounce is structurally low. That is the primary reason fuel is only about 3% of our consolidated cost structures this quarter.

Speaker #3: It's a function of these operations. The second piece is where our electricity comes from. Powers are largest energy input, and we source it from local utilities, primarily from renewable hydropower.

Russell Lawlar: The second piece is where our electricity comes from. Power is our largest energy input, and we source it from local utilities, primarily from renewable hydropower. Hydropower isn't priced off crude oil or natural gas, so when fuel markets spike on geopolitical shocks, the cost of that energy actually runs our mines and mills don't move with them. Put those two things together, high-grade ore that keeps our fuel intensity low, and a power base anchored in hydro that is decoupled from volatile fuel markets, and you get a cost structure that far more predictable and far more insulated from energy price swings than most of our peers can claim. In an environment of rising and uncertain fuel prices, that translates directly into more resilient margins, and it carries the added benefit of a lower carbon footprint for the metals we produce.

Speaker #3: Hydropower isn't priced off crude oil or natural gas, so when fuel markets spike on geopolitical shocks, the cost of that energy actually runs our mines and mills don't move with them.

Speaker #3: Put those two things together, high-grade ore that keeps our fuel intensity low, and a power-based anchored in hydro that is decoupled from volatile fuel markets, and you get a cost structure that is far more predictable and far more insulated from energy price swings than most of our peers can claim.

Speaker #3: In an environment of rising and uncertain fuel prices, that translates directly into more resilient margins, and it carries the added benefit of a lower carbon footprint for the metals we produce.

Speaker #3: As we turn to slide 14, you'll see this slide has been updated for our Q2 results and outlook changes and projects our 2026 after-tax free cash flow across a range of metal prices.

Russell Lawlar: As we turn to slide 14, you'll see this slide has been updated for our Q2 results and outlook changes and projects our 2026 after-tax free cash flow across a range of metal prices. At $50 silver and $3,500 gold, we project about $500 million of consolidated free cash flow for the full year, with these prices below current spot prices. At elevated prices of $75 silver and $4,500 gold, above current prices, we see the potential to generate nearly $700 million in free cash flow. At the top end of the range we're showing today, $100 per ounce silver and $5,500 gold, we'd see the potential to generate nearly $800 million of annual free cash flow. That's obviously a bullish scenario, but it shows the kind of operating leverage our platform has across a wide range of prices.

Speaker #3: As $50 silver and $3,500 gold, we project about $500 million of free consolidated free cash flow for the full year. With these prices below current spot prices.

Speaker #3: At elevated prices of $75 silver and $4,500 gold, above current prices, we see the potential to generate nearly $700 million in free cash flow.

Speaker #3: At the top end of the range, we're showing today $100 per ounce silver and $5,500 gold. We'd see the potential to generate nearly $800 million of annual free cash flow.

Speaker #3: That's obviously a bullish scenario, but it shows the kind of operating leverage our platform has across a wide range of prices. This shows how our business has the ability to produce substantial cash flow across a wide range of price environments.

Russell Lawlar: This shows how our business has the ability to produce substantial cash flow across a wide range of price environments. I'll now pass the call to Kurt to go through explorations.

Speaker #3: I'll now call the pass the call to Kurt to go through exploration.

Speaker #1: Thank you, Russell. Turning to slide 16. Our 2026 exploration and pre-development budget of $55 million remains at an all-time record for the company, representing about 4.5% of projected revenue.

Kurt Allen: Thank you, Russell. Turning to slide 16. Our 2026 exploration pre-development budget of $55 million remains at an all-time record for the company, representing about 4.5% of projected revenue. We've structured that across three priority areas: $24 million at our near mine programs, which carry the lowest risk and highest return and are targeting at adding one to two years' worth of resources for conversion to reserves. $16 million in Nevada across Midas, Aurora, and Hollister, targeting a resource of a half a million to 1.5 million ounces of gold equivalent, aimed at forming the basis for a potential Midas restart. $10 million in early stage and generative exploration. I'm pleased to share some exciting results from our recent exploration release, which came out last week on 29 July and is available on our website. Turning to slide 17.

Speaker #1: We've structured that across three priority areas: $24 million at our near-mine programs, which carry the lowest risk and highest return, and our targeting at adding one to two years' worth of resources for conversion to reserves.

Speaker #1: $16 million in Nevada across MIDAS, Aurora, and Hollister. Targeting a resource of a half a million to $1.5 million ounces of gold equivalent. Aimed at forming the basis for a potential MIDAS restart.

Speaker #1: And $10 million in early-stage and generative exploration. I'm pleased to share some exciting results from our recent exploration release, which came out last week on the 29th of July, and is available on our website.

Speaker #1: Turning to slide 17. At Keno Hill, we've extended a high-grade silver trend to 800 feet of strike length, and it remains open in both directions.

Kurt Allen: At Keno Hill, we have extended a high-grade silver trend to 800 feet of strike length, and it remains open in both directions. The extension brings us closer to the historic Hector-Calumet Mine, which produced over 96 million ounces of silver during its operating life. You can see the old workings on the right side of this image. Recent exploration highlights include 10.2 feet at 62.7 ounce per ton silver, or nearly 2 kilograms per metric ton. 10.1 feet at 44.6 ounce per ton silver and 8 feet at 22.4 ounce per ton silver. These exceptional results support our long-term vision for Keno Hill as an asset with the potential for generational mining. We are following up on these results and are planning to have a further update later this year. Turning to slide 18.

Speaker #1: The extension brings us closer to the historic Hector Calumet mine, which produced over 96 million ounces of silver during its operating life. You can see the old workings on the right side of this image.

Speaker #1: Recent exploration highlights include 10.2 feet at 62.7 ounce per ton silver, or nearly 2 kilograms per metric tonning. 10.1 feet at 44.6 ounce per ton silver, and 8 feet at 22.4 ounce per ton silver.

Speaker #1: These exceptional results support our long-term vision for Keno Hill as an asset with the potential for generating for generational mining. We are following up on these results, and are planning to have a further update later this year.

Speaker #1: Turning to slide 18. In Nevada, our drilling around the Pogo Center gap at MIDAS has identified two new MIDAS-style high-grade gold silver mines, and the system remains open.

Kurt Allen: In Nevada, our drilling around the Sinter-Pogo Gap at Midas has identified two new Midas-style high-grade gold, silver veins and the system remains open. This adds to the picture Brian described earlier around a broader Midas hub-and-spoke opportunity. The new veins discovered are very similar in style to what was mined very successfully previously at Midas. Beyond these results, I want to flag that two additional exploration programs are ramping up this quarter. Drilling at Hollister has been underway for several weeks, and at Aurora, my favorite project, we are on track to begin drilling in mid-August. Aurora is a past producer of extremely high-grade mineralization with historic results grading above 2 ounce per ton gold, which is equivalent to more than 60 grams per ton. Like Midas, it has a permitted mill at the site.

Speaker #1: This adds to the picture Brian described earlier around a broader MIDAS-Hub and spoke opportunity. The new veins discovered are very similar in style to what was mined very successfully previously at MIDAS.

Speaker #1: Beyond these results, I want to flag that two additional exploration programs are ramping up this quarter. Drilling at Hollister has been underway for several weeks, and at Aurora, my favorite project, we're on track to begin drilling in mid-August.

Speaker #1: Aurora is a past producer of extremely high-grade mineralization with historic results grading above 2 ounce per ton gold, which is equivalent to more than 60 grams per ton.

Speaker #1: Like MIDAS, it has a permitted mill at the site. There would be investment needed to make this a viable operating site again, but we'll focus on that with the depending on what the drill bit tells us.

Kurt Allen: There would be investment needed to make this a viable operating site again, but we will focus on that depending on what the drill bit tells us before we get there. This could prove to be a major value-surfacing opportunity for the company and I really look forward to the results from the initial holes, which we could have this fall. Stay tuned. I will now turn the call back to Rob for closing remarks.

Speaker #1: Before we get, get there. This could provide this could prove to be a major value servicing opportunity for the company. And I really look forward to the results from the initial holes.

Speaker #1: Which we could have this fall. So stay tuned. I'll now turn the call back to Rob for closing remarks.

Speaker #2: Thank you, Kurt. So turning to slide 19. Let me leave you with a few thoughts before we open the line for questions. This was a quarter of continued strong financial results, building on a track record that has helped us deliver and move into a position of real financial strength.

Russell Lawlar: Thank you, Kurt. Turning to slide 19. Let me leave you with a few thoughts before we open the line for questions. This was a quarter of continued strong financial results, building on a track record that has helped us delever and move into a position of real financial strength, the kind that lets us keep investing in our robust project pipeline for years to come and surface value for our shareholders. The underlying business has never been stronger. We are making disciplined investments in our asset base to set it up for continued success. Our safety performance improved meaningfully this quarter. And as I said at the top of the call, our balance sheet is, without question, the strongest it has been in this company's history. We believe in a robust precious metals market, and we think silver has a very bright future.

Rob Krcmarov: Thank you, Kurt. Turning to slide 19. Let me leave you with a few thoughts before we open the line for questions. This was a quarter of continued strong financial results, building on a track record that has helped us delever and move into a position of real financial strength, the kind that lets us keep investing in our robust project pipeline for years to come and surface value for our shareholders. The underlying business has never been stronger. We are making disciplined investments in our asset base to set it up for continued success. Our safety performance improved meaningfully this quarter. And as I said at the top of the call, our balance sheet is, without question, the strongest it has been in this company's history. We believe in a robust precious metals market, and we think silver has a very bright future.

Speaker #2: The kind that lets us keep investing in our robust pipe project pipeline for years to come, and surface value for our shareholders. The underlying business has never been stronger.

Speaker #2: We're making disciplined investments in our asset-based to set it up for continued success, our safety performance improved meaningfully this quarter, and as I said at the top of the call, our balance sheet is without question the strongest it's been in this company's history.

Speaker #2: We believe in a robust, precious metals market, and we think silver has a very bright future. At today's prices, we're already generating substantial free cash flow.

Rob Krcmarov: At today's prices, we're already generating substantial free cash flow. As Russell just said, at the top end of the price scenarios we showed you today, this platform can generate nearly $800 million in annual free cash flow. That's the kind of operating leverage we have now, and we're working hard to capture it for our shareholders. I really do hope that you share the enthusiasm that we have for our project pipeline and the excitement it's bringing as it advances. We believe Hecla remains the most compelling way to gain exposure to silver in this sector, and we look forward to continuing to execute and to keeping you updated throughout the year. I will now ask the operator to open the line for questions.

Speaker #2: And as Russell just said, at the top end of the price scenarios we showed you today, this platform can generate nearly $800 million in annual free cash flow.

Speaker #2: So that's the kind of operating leverage we have now, and we're working hard to capture it for our shareholders. I really do hope that you share the enthusiasm that we have for our project pipeline and the excitement it's bringing as it advances.

Speaker #2: And we believe Heckler remains the most compelling way to gain exposure to silver in this sector, and we look forward to continuing to execute and to keeping you updated throughout the year.

Speaker #2: I'll now ask the operator to open the line for questions.

Speaker #4: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand.

Hillary: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, please press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Heiko Ihle from H.C. Wainwright & Co. Your line is now open. Please go ahead.

Operator: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, please press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Heiko Ihle from H.C. Wainwright & Co. Your line is now open. Please go ahead.

Speaker #4: To withdraw your question, please press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality.

Speaker #4: If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Heiko Elay from HC Wainwright.

Speaker #4: Your line is now open. Please go ahead.

Speaker #1: Hello, Rob and team, and congratulations on a good quarter. Thanks for taking my questions.

Heiko Ihle: Hello, Rob and team, congratulations on a good quarter. Thanks for taking my questions.

Speaker #2: Thank you.

Rob Krcmarov: Thank you.

Speaker #1: Obviously, metal prices have gone down a little bit. I mean, I assume there is some sort of bonus structure for staff by asset related to metal pricing.

Heiko Ihle: Obviously, metal prices have gone down a little bit, and I assume there is some sort of bonus structure for staff by asset related to metal pricing. I just want to see, is there any way for us to extrapolate this into a cost per ounce or cost per ton by a dollar change in the underlying silver price? How do you guys model this out?

Speaker #1: I just want to see, is there any way for us to extrapolate this into a cost per ounce or cost per ton by, you know, a dollar change in the underlying silver price?

Speaker #1: Or how do you guys model this out?

Speaker #2: I'll hand that one over to Russell.

Rob Krcmarov: Hand that one over to Russell.

Speaker #3: Yeah, yeah. No, no problem, Heiko. We, you know, I would say the most direct, you know, ties to silver price is the profit share at Lucky Friday.

Russell Lawlar: No problem, Heiko. I would say the most direct tie to silver price is the profit share at Lucky Friday. If you go back late last year, you'll see as we guided, we had our prices in lower prices because the guidance obviously came out lower in the year. As prices went up, you saw our prices escalate. This year, we intentionally built higher prices. When we came into January, February, we were at high silver prices, and so we intentionally built high prices into that profit share. As the year has come down, we have seen that cost abate. In the guidance that we've issued now, we've used robust prices, but not, say, the $90 silver that we used at the beginning of the year.

Speaker #3: And if you go back, late last year, you'll see as we as we guided, we had had our prices in in lower prices because the guidance obviously came out lower in the year as prices went up, you saw our prices escalate.

Speaker #3: This year, we intentionally built higher prices you know, when we came into January or February, we were at high price high silver prices. And so we intentionally built high prices into that profit share.

Speaker #3: As the year has come down, we have seen that cost abate. And so in the guidance that we've issued now, we we've used robust prices, but not, say, the $90 silver that we used at the beginning of the year.

Speaker #3: I'm thinking, trying to figure out a way to convey directly how much that would be per ounce. And frankly, I would have to kind of get back to you on that.

Russell Lawlar: I'm thinking, trying to figure out a way to convey directly how much that would be per ounce, and frankly, I would have to kind of get back to you on that. I don't have a direct number for you right now. I think it's generally isolated to Lucky Friday, and you can see it as you look at the cost performance of Lucky Friday over the past year or so.

Speaker #3: I I don't have a a direct number for you right now, but I think it's generally isolated to Lucky Friday. And you can see it as you look at the cost performance of Lucky Friday over the past, you know, kind of year or so.

Speaker #1: Yeah, yeah, I think if you if you guys come up with some sort of I don't want to say formula, but yeah, almost like a formula for for the analyst community, I think that might be quite helpful.

Heiko Ihle: Yeah. I think if you guys come up with some sort of, I don't want to say formula, but yeah, almost like a formula for the analyst community, I think that might be quite helpful. Completely different question.

Speaker #1: Completely different question.

Speaker #3: For sure.

Speaker #1: Yeah, of course. Longer-term capital investment, any color on what we should model for a longer-term capital? And maybe you can't really answer that question, but that's all I'll I'll try differently.

Russell Lawlar: Appreciate you saying that.

Heiko Ihle: Yeah, of course. Longer term capital investment, any color on what we should model for a longer-term capital? Maybe you can't really answer that question, but I'll try differently. If you can, are there any large-scale investments at any of the other assets coming on 2027 and 2028 that may not be obvious for us?

Speaker #1: If you can, are there any large-scale investments at any of the other assets coming on 2027 and 2028 that may not be obvious for us?

Speaker #3: You know, I can I can continue to speak.

Russell Lawlar: I can continue to speak to the question.

Speaker #2: Thanks for the question.

Rob Krcmarov: Thanks for that.

Speaker #3: Go ahead, Rob.

Russell Lawlar: Go ahead, Rob.

Speaker #2: Okay, go ahead, Russell.

Rob Krcmarov: Okay, go ahead, Russell.

Speaker #3: I was I was.

Russell Lawlar: I was just going to.

Speaker #2: Okay. In in terms sorry, this is awkward because we're in separate offices. I'll I'll just start, Russell, and maybe you can fill in the gaps if you don't mind.

Rob Krcmarov: Okay. Sorry, this is awkward because we're in separate offices. I'll just start, Russell, and maybe you can fill in the gaps, if you don't mind. In terms of CapEx, we don't really have any huge expansions going on in the near future. What we do have is the Nevada restart. We estimate that's going to be pretty low CapEx, given that we already own the mill. The CapEx for the Pyrite Concentrate project, that's really quite low, particularly in the context of the phenomenal returns that it's expected to generate. The cooling project at Lucky Friday, that's almost finished. I would say nothing really major coming up.

Speaker #2: In in terms of CapEx, x, we don't really have any huge you know, expansions going on in the in the near future. What we do have is is a Nevada restart.

Speaker #2: We estimate that's going to be pretty low low CapEx given that we already own the mill. The CapEx for the pyrite concentrate project, that's that's really quite low, particularly in the context of the phenomenal returns that it's expected to generate.

Speaker #2: The the cooling project at Lucky Friday, that's almost finished. And so I I would say nothing really major coming up.

Speaker #3: Yeah, the only thing I'll add to that, Rob.

Russell Lawlar: The only thing I'll add to that, Rob, is.

Speaker #2: Anything to add, Russell?

Rob Krcmarov: Anything to add, Russell?

Speaker #3: We're building yeah, yeah, a little bit to add to that. The only thing that I'll add is that we're building tails at Greens Creek Lucky Friday over the next couple of years.

Russell Lawlar: Yeah, a little bit to add to that. The only thing that I'll add is that we're building tails at Greens Creek Lucky Friday over the next couple of years. Keno Hill, there's tailings that we'll be building in the near term and then kind of more intermediate term. Keno Hill will continue to invest in the infrastructure to bring that mine production up.

Speaker #3: And then you know, Keno Hill, there's tailings that we'll be building. In the near term, and then kind of more intermediate term. But also, you know, Keno Hill will continue to invest in the infrastructure to bring that that mined production up.

Speaker #1: Cool. Thank you both. And I'll get back in queue. And and again, good quarter. I appreciate it.

Heiko Ihle: Cool. Thank you both, I'll get back in queue. Again, good quarter. I appreciate it.

Speaker #4: Thank you for your question.

Hillary: Thank you for your question.

Operator: Thank you for your question.

Speaker #2: Thank you.

Speaker #4: Your next question comes from the line of Cosmo Chu from CIBC. Your line is now open.

Rob Krcmarov: Thank you.

Hillary: Your next question comes from the line of Cosmos Chiu from CIBC. Your line is now open.

Operator: Your next question comes from the line of Cosmos Chiu from CIBC. Your line is now open.

Speaker #5: Thanks, Rob and team. And congrats on hitting asset level record free cash flows at Greens Creek and Lucky Friday. But I guess my question is, you know, I'm looking at the asset level and as Russell mentioned, 130 million from Greens Creek.

Cosmos Chiu: Thanks, Rob and team. Congrats on hitting asset-level record free cash flows at Greens Creek and Lucky Friday. I guess my question is, I'm looking at the asset level, and as Russell mentioned, $130 million from Greens Creek, $88 million from Lucky Friday, and additional 14-ish from Keno Hill. I cannot seem to reconcile that down to your corporate level free cash flow of $136 million. I compared it to, say, Q1 last quarter, Greens Creek was actually lower. Lucky Friday was actually lower as well. The corporate level was higher. I guess if you can help me reconcile how I can come up with corporate level, and then that will help me in terms of trying to figure out how to better utilize or best utilize the asset-level free cash flow numbers.

Speaker #5: 80 8 million dollars from Lucky Friday and additional 14-ish from Keno Hill. But I cannot seem to reconcile that down to your corporate level free cash flow of 136 million.

Speaker #5: So compared to, say, Q1 last quarter, Greens Creek was actually lower. Lucky Friday was actually lower as well. But at the corporate level, it was higher.

Speaker #5: So I guess if you can help me reconcile how I can come up with corporate level and then that will help me in terms of, you know, trying to figure out how to bet better utilize or or best utilize the asset level free cash flow numbers.

Speaker #3: Yeah, and I I can jump in on that one, Rob. You know, I was looking at this as well. So it's a good good question, Cosmo.

Russell Lawlar: I can jump in on that one, Rob. I was looking at this as well. It's a good question, Cosmos. The way we think about our mine site free cash flow, I'm looking at page three of our earnings release, where we reconcile free cash flow to cash flow from the operations. What we do for mine site is we actually add back the exploration expense that was incurred at that site, because exploration expense is an expense that we allocate from a corporate perspective, and it's not really related to the core of the operation in the current period. As you think about free cash flow at the corporate level in Q1 versus Q2, what you'll see is the exploration expense did go up Q1 over Q2, and that is included in our corporate consolidated free cash flow number. That's one.

Speaker #3: If you think about our the way we think about our mine site free cash flow, we actually look at the I'm looking at page three of our earnings release where we reconcile free cash flow to cash flow from the operations.

Speaker #3: And what we do for mine site is we actually add back the expiration expense that was incurred at that site because expiration expense is an expense that we allocate from a corporate perspective.

Speaker #3: And it's not not really related to the core of the operation in the current period. And so as you think about free cash flow at the corporate level in Q1 versus Q2, what you'll see is the expiration expense did go up Q1 over Q2.

Russell Lawlar: As you think about free cash flow at the corporate level in Q1 versus Q2, what you'll see is the exploration expense did go up Q1 over Q2, and that is included in our corporate consolidated free cash flow number. That's one. The other is just corporate expenses that are not included in those Q1 or corporate cash outflows, I'll say.

Speaker #3: And that is included in our corporate consolidated free cash flow number. That that's one. And then the other is just corporate expenses that are not included in those Q1 or corporate cash cash outflows, I'll say.

Russell Lawlar: The other is just corporate expenses that are not included in those Q1 or corporate cash outflows, I'll say.

Speaker #3: So it's not included in that Q1. So it's essentially timing. It's working capital timing.

Cosmos Chiu: Okay.

Russell Lawlar: That's not included in that Q1. It's essentially timing. It's working capital timing.

Speaker #5: Okay, okay. Maybe switching gears a little bit here in terms of Keno Hill. As you mentioned, Q2 production was about $600,000 silver ounces. And as you mentioned, the MDNA, you're working through a lower-grade zone.

Cosmos Chiu: Okay. Maybe switching gears a little bit here in terms of Keno Hill. As you mentioned, Q2 production was about 600,000 silver ounces. As you mentioned, the MD&A, you're working through a lower grade zone. I guess my question is, looking at your revised guidance for the year, 2.2 to 2.6 million, midpoint's about 2.4. That's about 600,000 ounces annualized times four. I'm just trying to figure it out. You're working through a lower grade portion in Q2. If you're getting out of it, I would've thought that guidance, at least a midpoint, could be higher than what's annualized for Q2. That's number one. I guess number two is the 600,000 ounces like a sustainable level? Is that what we're looking at? Again, I'm just trying to wrap my head around it.

Speaker #5: I guess my question is, you know, looking at your revised guidance for the year—2.2 to 2.6 million—the midpoint’s about 2.4. So that’s about 600,000 ounces annualized times four.

Speaker #5: So I'm just trying to figure it out. You know, you're working through a lower-grade portion in Q2, if you're getting out of it. I would have thought that guidance, at least the midpoint, could be higher than what's annualized for Q2.

Speaker #5: That's number one. And I guess number two is the $600,000 ounces, like, a sustainable level. Is that what we're looking at? Again, I'm just trying to wrap my head around it.

Speaker #2: Well, we are projecting the third quarter being really similar—yeah, ahead. No, no, you go ahead, please, Carlos. Okay. We are projecting the third quarter to be really similar to the second quarter.

Carlos Aguiar: Well, we are projecting the Q3 being really similar. Yeah. Rob, go ahead.

Rob Krcmarov: No, you go ahead, please, Carlos.

Carlos Aguiar: Okay. We are projecting to be the Q3 really similar to the Q2. Definitely, we are in the new zones. We are in development of the new zones at Keno Hill. That's the projection that we can report today. It's going to be really similar to the Q2 for the remainder of the year.

Speaker #2: Definitely, we are, you know, in a new zone. We are in development of the new zones. Keno Hill. And and that's well, that's a projection that we can report today.

Speaker #2: It's it's going to be really similar on the second quarter. For the remainder of the year. Yeah, you know, the key thing as Rob, sorry.

Cosmos Chiu: Yeah, I guess my question is.

Rob Krcmarov: Yeah.

Cosmos Chiu: So-

Cosmos Chiu: So—

Rob Krcmarov: The key thing.

Cosmos Chiu: Yeah. Rob, sorry about that.

Speaker #2: Yeah. As Carlos said, look at Q3 looking very similar to Q2. The key point is that we we expect to meet our revised guidance at the end of this year.

Rob Krcmarov: Yeah. As Carlos said, look at our Q3 looking very similar to Q2. The key point is that we expect to meet our revised guidance at the end of this year. What happens in between, we just don't have that level of detail, it's not disclosed yet.

Speaker #2: And so what happens in between? We we're just we just don't have that level of details disclosed yet.

Speaker #5: Okay, okay.

Cosmos Chiu: Okay.

Rob Krcmarov: Go ahead, please, expand on your question.

Speaker #2: Go ahead, please. Expand on your question.

Rob Krcmarov: Go ahead, please, expand on your question.

Speaker #5: Yeah. No, I'm just trying to, you know, wrap my head around the sustainable rate. But I think I think you've answered my question in terms of the new guidance, Rob.

Cosmos Chiu: I'm just trying to wrap my head around the sustainable rate. I think you've answered my question in terms of the new guidance, Rob. I guess my other question on Keno Hill is, with the lowered guidance for the year, does that impact potential timing of commercial production, or does it really matter?

Speaker #5: And then, I guess my other question on Keno Hill is: with the lowered guidance for the year, does that impact the potential timing of commercial production?

Speaker #5: Or does it really matter?

Speaker #2: Yeah, so you know, we've outlined our five criteria for commercial production. We've only met one, which is the silver recoveries. You know, what we're focused on right now is getting the permits that we need and investing in the infrastructure and working our our way through through that.

Rob Krcmarov: We've outlined our five criteria for commercial production. We've only met one, which is the silver recovery. What we're focused on right now is getting the permits that we need and investing in the infrastructure and working our way through that. I would say that, if we can receive those permits, the critical ones, by mid-2029, and we can execute on the key infrastructure projects over the next two or three years and the tailings expansion could be advanced far enough, in 2029 to permit the mill to resume normal production levels. We expect to begin ramping up to higher production levels by the end of roughly 2029. This is a ramp-up that's been taking a little bit longer than what was initially thought, but we understand what permits we need.

Speaker #2: I would say that if we can receive those permits the critical ones by mid-2029 and we can execute on the key infrastructure projects over over the, you know, the next two or three years and the tailings expansion could be advanced far enough in 2029 to permit the mill to resume normal production levels, we expect to begin ramping up to higher production levels by the end of roughly 2029.

Speaker #2: So so you know, this is a ramp-up that's been taking a little bit longer than what was initially thought. But we understand what permits we need.

Speaker #2: We understand the infrastructure that we need to invest in. And we're working to resolve the permits and complete those investments. We are buoyed by the fact that, you know, the expiration results that Kurt talked about, you know, you saw the 96 million ounces adjacent at the hectare calumet.

Rob Krcmarov: We understand the infrastructure that we need to invest in, and we're working to resolve the permits and complete those investments. We are buoyed by the fact that the exploration results that Kurt talked about. You saw the 96 million ounces adjacent at the Hector-Calumet. You see the expansion as we've continued to get high-grade extensions to Bermingham Deep. As Kurt said, this is a generational mine that's going to be hopefully in production for a very long time. We just need to get it through this permitting and investment phase. It is free cash flow positive today, and it has been for the last several quarters.

Speaker #2: You see the expansion as we've continued to get high-grade extensions to boom deep. As Kurt said, this this is a generational mine. There's going to be hopefully in production for a very, very long time.

Speaker #2: And we just need to get it through this permitting and and investment phase. And it is free cash flow positive today. And it has been for the the last several quarters.

Cosmos Chiu: Mm-hmm. That's great to hear. Maybe one last question to Rob. Sounds great in terms of the different growth projects that you have in the pipeline. I want to focus on the pyrite concentrate circuit. I guess, as you've mentioned, 1 to 1.2 million ounces of silver per year, 10 to 15 thousand ounces of gold per year. Is that before or after payability? If it's before, what's the market like for your particular type of pyrite concentrate, and is it fairly clean? If I want to just model out what this could mean in terms of value, because you've given me the other parameters, $40 to 15 million CapEx, if I had it correct. You gave me some operating numbers as well. I'm just trying to figure out the production numbers.

Speaker #5: That's great to hear. And maybe one last question. You know, Rob, sounds great in terms of the different growth projects that you have in the pipeline.

Speaker #5: I want to focus on the the Pyrite Concentrate circuit. I guess as you've mentioned, 1 to 1.2 million ounces of silver per year, 10 to 15,000 ounces of gold per year.

Speaker #5: Is that before or after sort of payability? And if it's before, you know, what's the market like for your, you know, particular type of Pyrite Concentrate?

Speaker #5: And is it fairly clean? If I want to just, you know, model out what this could mean in terms of value? Because you've given me the other parameters.

Speaker #5: 40 to 50 million capex if I had it correct. You gave me some, you know, operating numbers as well. But I'm just trying to figure out the the production numbers.

Rob Krcmarov: Well, the quality is very high. In fact, we've had extremely high demand from multiple inquirers, I guess. I'll hand it over to Russell. Maybe he can give you a little bit more color on that.

Speaker #2: Well, the quality is very high. In fact, we've had extremely high demand from multiple inquirers, I guess. I'll hand it over to Russell.

Speaker #2: Maybe he can give you a little bit more color on that.

Speaker #5: Thank you.

Cosmos Chiu: Thank you.

Speaker #3: Yeah. Thanks. Thanks, Rob. You know, as we think about the Pyrite Concentrate, one one thing I do want to point out is you, you know, I think Brian laid it out well.

Russell Lawlar: Yeah. Thanks, Rob. As we think about the pyrite concentrate, one thing I do want to point out is, I think Brian laid it out well. Unfortunately, his line was interrupted a little bit during that. I think Rob came in and kind of cleared some of that up. We're still working on this project. It's incredibly, I'll say, prospective. We're very high on it. We think it's going to be a very good project. We're still working on some of the engineering. We're still nailing down some of the costs. What I don't want to do is put out a return on invested capital number now while we're still in those stages while we're putting those numbers together.

Speaker #3: Unfortunately, he he kind of was a little, you know, his his line was interrupted a little bit during that. And I think, you know, Rob came in and kind of cleared some of that up.

Speaker #3: But there we're still working on this this project. It's it's incredibly I'll say prospective. We we're very high on it. We think it's going to be a very good project.

Speaker #3: But we're still working on some of the engineering and we're still nailing down some of the costs. So what what I don't want to do is put out a, you know, return on invested capital number now while we're still in those stages while we're we're putting those numbers together.

Speaker #3: What I would say is that we have a return on capital criteria, which we presented at our investors bit in our our investor day earlier this year, of 12 to 15 percent on return on invested capital.

Russell Lawlar: What I would say is that we have a return on capital criteria, which we presented at our investor day earlier this year, of 12% to 15% on return on invested capital. This project, we would expect, would exceed that substantially. If you go back and you look, I think it's in our earnings release or our 10-Q or maybe both. We expect that we would get roughly 1 million ounces of silver a year from this project. That would increase our recoveries, and we would reduce the amount that goes to the tails, which is also a cost savings. The investment will be relatively modest from a capital perspective. The fact is, we're already producing 3 concentrates at this mine. As a result, the operating costs we don't expect would go up substantially either.

Speaker #3: This project, we would expect would exceed that substantially. And, you know, if you go back and you look and I think it's in our our earnings release or our Q or maybe both, you know, we expect that we would get roughly maybe a million ounces of silver a year from this project.

Speaker #3: You know, so that would increase our recoveries. And we would reduce the amount that goes to the tails, which is also a cost savings.

Speaker #3: And the the investment would be relatively modest. Along with from a capital perspective, and the fact is we're already producing three concentrates at this mine.

Russell Lawlar: The investment will be relatively modest from a capital perspective. The fact is, we're already producing 3 concentrates at this mine. As a result, the operating costs we don't expect would go up substantially either. From a return on expected capital, we think it's going to be very, very robust.

Speaker #3: So as a result, the operating costs we don't expect would go up substantially either. And so from a return on expected capital, we just we think it's going to be very, very robust.

Russell Lawlar: From a return on expected capital, we think it's going to be very, very robust.

Cosmos Chiu: Russell,

Speaker #5: Does that flavor for you? Yeah. But I guess going back to my first question, the 1 to 1.2 million ounces that you outlined, that's before payability factors, right?

Cosmos Chiu: Russell.

Russell Lawlar: Is that enough flavor for you?

Cosmos Chiu: But I guess going back to my first question, the 1 to 1.2 million ounces that you outlined, that's before payability factors, right? If I want to guesstimate some kind of model on my own, I would have to, again, I can do it on my own, guesstimate some kind of payability factor to apply to the 1 to 1.2 million ounces?

Speaker #5: So if I want to guesstimate some kind of model on my own, I would have to kind of, you know, again, I could do it on my own, guesstimate some kind of payability factor to apply to the 1 to 1.2 million ounces.

Speaker #3: I would say, yeah. I mean, go ahead and apply payability because, again, like I said, kind of on the front end of this, we're still working through that some of these details.

Russell Lawlar: I would say, yeah. Go ahead and apply payability because again, like I said, kind of on the front end of this, we're still working through some of these details.

Speaker #5: Okay. Cool. Great. Thanks, Rob and Russell and team and Carlos for answering all my questions. That's all I have. Thank you.

Cosmos Chiu: Okay, cool. Great. Thanks, Rob, Russell, team, and Carlos for answering all my questions. That's all I have. Thank you.

Speaker #2: Thank you, Cosmos.

Rob Krcmarov: Thank you, Cosmos.

Speaker #1: You are next question. Comes from the line of Josh Wolfson from RBC Capital Markets. Your line is now open.

Hillary: Your next question comes from the line of Josh Wolfson from RBC Capital Markets. Your line is now open.

Operator: Your next question comes from the line of Josh Wolfson from RBC Capital Markets. Your line is now open.

Speaker #4: Yeah. Thanks very much. Just looking at Lucky Friday and the grade performance in the company had noted this was in the plan. You know, I'm wondering you know, what was sort of the driver of of these high grades?

Josh Wolfson: Yeah, thanks very much. Just looking at Lucky Friday and the grade performance. I think the company had noted this was in the plan. I'm wondering what was sort of the driver of these high grades and, I guess, the commentary that it was not expected to be sustained, just looking at the outlook for the H2 of the year. Thank you.

Speaker #4: And I guess the commentary that it was not expected to be sustained just going you know, looking at the outlook for the second half of the year.

Speaker #4: Thank you.

Rob Krcmarov: I'll hand it over to Carlos in a minute. Basically, Josh, this was scheduled high grade. It's just a matter of timing. We just went through a high-grade zone this quarter. Again, we don't expect to maintain those high grades. It'll probably revert back to the mean.

Speaker #2: I'll I'll hand it over to Carlos in a minute. But basically, Josh, this was scheduled high grade. It's just a matter of timing. We just went through a high-grade zone this quarter.

Speaker #2: And again, we don't expect to maintain those high grades. It'll probably revert back to the mean.

Speaker #4: Yeah. Yeah. It's it's correct. It was part of the timing. Even we were expecting to have, you know, a fraction of that high grade in at the end of the second quarter.

Carlos Aguiar: Yeah. It's correct. It was part of the timing. Even we were expecting to have a fraction of that high grade at the end of the Q2. At the end of the Q1, sorry. We had the most significant portion of the high grade in the Q2, and that was the reason, which was planned. Of course, we are not expecting to keep that kind of level for the remain of the year. Definitely, it was planned, and it was just a matter of timing.

Speaker #4: And and so at the end of the first quarter, sorry, so so we had a the most significant you know, portion of the high grade in the second quarter.

Speaker #4: And that was the reason, right, which was planned and of course, we had an expecting to see you know, that kind of level for the for the remainder of the year.

Speaker #4: But definitely it was planned. It was just a matter of timing. And then just looking at the cooling project in September, is there anything we should be thinking about in terms of what that means for tie-in if that that will impact you know, productivity or or throughput?

Josh Wolfson: Got it. Thank you. Just looking at the surface cooling project in September, is there anything we should be thinking about in terms of what that means for tie-in, if that will impact productivity or throughput? Similarly, once the project is completed, how should we be thinking about the outlook for the mine?

Speaker #4: And then similarly, once the project is completed, how should we be thinking about the outlook for the mine?

Speaker #2: Well, this project was really designed to go ahead. Keep going, Rob. Okay. This project was really primarily designed to set up a long-term future as as we get into deeper levels and and set ourselves up.

Rob Krcmarov: Well, this project was really designed to. Go ahead.

Carlos Aguiar: Yeah. Keep going, Rob.

Rob Krcmarov: Okay. This project was really primarily designed to set up the long-term future as we get into deeper levels and set ourselves up. We already have a long reserve life ahead of us. It's very difficult to quantify productivity improvements, but it just stands to reason that when you're working in a fairly hot mine, you're going to be less productive when the conditions are not great compared to when the workers are comfortable. I can't really quantify that, but you just know inherently, that logically it makes sense that there should be better productivity.

Speaker #2: We already have a long reserve life ahead of us. It's it's very difficult to quantify productivity improvements, but it you know, it just stands to reason that when you're working in a in a fairly hot mine, you're going to be less productive when the conditions are not great compared to when the workers are comfortable.

Speaker #2: I can't really quantify that, but you just know inherently that, logically, it makes sense that there should be better productivity.

Speaker #4: Got it. Great. And then maybe just last question, you know, the commentary on Kino and and looking at sustaining you know, profitability. You know, similar kind of outlook there.

Josh Wolfson: Got it. Great. Maybe just last question. The commentary on Keno and looking at sustaining profitability, similar kind of outlook there. Should we be expecting more stable grades and throughput levels to what was achieved in the H1? Or is there still going to be some degree of improvement ahead of the 2029 permitting milestone? Thank you.

Speaker #4: Should should we be expecting more stable grades and and throughput levels to what was achieved in the first half? Or or you know, is there is there still going to be some degree of improvement ahead of this the 2029 permitting milestone?

Speaker #4: Thank you.

Speaker #2: Well, just related to the grades, go ahead, Carlos. Keep going.

Rob Krcmarov: Well, just related to the grade.

Carlos Aguiar: Well, we are.

Rob Krcmarov: Go ahead, Carlos. Sorry.

Rob Krcmarov: Go ahead, Carlos. Sorry. Keep going.

Speaker #4: Well, we are projecting a similar grade and throughput in the third quarter. And with the potential to have some benefit in the last quarter, but but it's going to be mostly second second half of the year is going to be a a slightly bit better than the first half.

Carlos Aguiar: keep going. Well, we are projecting a similar grade and throughput in Q3, with the potential to have some benefit in Q4. It's going to be mostly H2 of the year is going to be slightly better than H1.

Carlos Aguiar: Well, we are projecting a similar grade and throughput in Q3, with the potential to have some benefit in Q4. It's going to be mostly H2 of the year is going to be slightly better than H1.

Speaker #2: Okay. And and that the

Josh Wolfson: Okay. The driver for that was going to be which of the factors?

Speaker #4: driver for that was going to be which which of the factors? It's going to be a probably better grade. Got it. Great.

Carlos Aguiar: It's going to be probably better grades.

Josh Wolfson: Got it. Great. Okay. Those are all my questions. Thank you.

Speaker #2: Okay. Those are all my questions. Thank you.

Speaker #1: Your next question comes from the line of Kevin. Oh, Hallorann from BMO Capital Market. Your line is now open.

Hillary: Your next question comes from the line of Kevin O'Halloran from BMO Capital Markets. Your line is now open.

Operator: Your next question comes from the line of Kevin O'Halloran from BMO Capital Markets. Your line is now open.

Speaker #5: Hey, Rob and team. Thanks for taking my questions. Just digging into the guidance updates. It was great to see the ASIC guidance come down.

Kevin O'Halloran: Hey, Rob and team. Thanks for taking my questions. Just digging into the guidance updates, it was great to see the AISC guidance come down. Can you give us a sense of the drivers of that? Was it higher silver production from Greens Creek and Lucky Friday? Larger by-product contribution, better unit costs? Then maybe any broader thoughts on any cost pressures that you're seeing?

Speaker #5: Can you give us a sense of the drivers of that? Was it higher silver production from Greens Creek and Lucky Friday? Larger byproduct contribution, better unit costs, and then maybe any broader thoughts on any cost pressures that you're seeing?

Speaker #2: All right. Go ahead, Russell.

Rob Krcmarov: Go ahead, Russell.

Speaker #3: Yeah. No no problem. Thanks, Kevin. Yeah. As we think about you know, I I would say from an ASIC perspective, Greens Creek, it really shows the value of that ore that comes out of Greens Creek, right?

Russell Lawlar: Yeah. No problem. Thanks, Kevin. Yeah, I would say from an AISC perspective, Greens Creek, it really shows the value of that ore that comes out of Greens Creek, right? Two or three things on Greens Creek specifically. First, they had a great H1, right? In terms of their silver production, so silver ounces were very strong. The gold by-product is huge, and I made a comment in a different question, I think it was to Heiko earlier, on the prices that we used in our guidance for Lucky Friday cost. Well, in a similar sense, we have to make an estimate as it relates to the prices that we used for by-products at the beginning of the year, what would be realized versus what we estimate. So we tend to be a little bit conservative on that.

Speaker #3: So two two or three things on Greens Creek specifically. First, they had a great first half of the year, right? In terms of their silver production so silver ounces were were very, very strong.

Speaker #3: The gold byproduct is huge. And and I made a comment in a different question. I I think it was to Heiko earlier on the the prices that we used in our guidance for Lucky Friday cost.

Speaker #3: Well, in a similar sense, we have to make a an estimate as it relates to the prices that we use for byproducts at the beginning of the year.

Speaker #3: What would be realized versus what we estimate? And so we tend to be a little bit conservative on that. I'd have to go back, frankly, and look at to see exactly what those were there in our year-end release.

Russell Lawlar: I'd have to go back frankly, and look to see exactly what those were, but they're in our year-end release. We've outperformed on the gold for sure. The price of zinc has been very strong, and one of the things that people do sometimes oversee is the fact that Greens Creek has an incredible zinc by-product as well. That's Greens Creek. As produced costs are essentially online, they're doing well. From Lucky Friday's perspective, we've seen a better cost control in general, for the mine as a whole. We have seen that profit share that I highlighted earlier come off a little bit just because the price of silver's come off. They had a fantastic H1 of the year from a production perspective. You kind of wrap all of that up and that's the reason the AISC guidance is better.

Speaker #3: And so we've outperformed on the gold for sure. Zinc has been a a very strong you know, the price of zinc has been very strong.

Speaker #3: And one of the things that people do sometimes oversee is the the fact that Greens Creek has an incredible zinc byproduct as well. So that's that's Greens Creek.

Speaker #3: Yeah. It's produced cost or or essentially online. They're they're doing well. And then from Lucky Friday's perspective, we've seen a better cost I'll say better cost control in general for the mine as a whole.

Speaker #3: We have seen that profit share that I highlighted earlier come off a little bit just because the the price of silver has come off.

Speaker #3: But then again, they had a fantastic first half of the year from a production perspective. So you kind of wrap all of that up, and that's the reason the ASIC guidance is better.

Speaker #3: I would highlight that we do expect capital spend in the last half of the year to be more than we did in the first half of the year.

Russell Lawlar: I would highlight that we do expect capital spend in the H2 of the year to be more than we did in the H1 of the year. That's a couple of reasons. Q3 tends to be a full quarter of better weather, as we relate to construction. Construction projects are underway, that kind of thing. We just tend to see more equipment deliveries. We order equipment, seems to be earlier in the year, and it kind of comes in later in the year. I would expect Q3 and Q4 to have more capital spend. You can see that if you look at our capital spend in the first six months versus our guidance.

Speaker #3: That's a couple of reasons. The third quarter tends to be, you know, a kind of a full quarter of better weather. You know, as we relate to construction, construction projects are underway, that kind of thing.

Speaker #3: And then we just tend to see more equipment deliveries. You know, we order equipment—it seems to be earlier in the year, and that kind of comes in later in the year.

Speaker #3: So I would expect the the third and the fourth quarter to have more capital spend. And you can see that if you look at our capital spend in the first six months versus our guidance.

Speaker #5: Great. Yeah. That's helpful. Maybe another one for you, Russell. Could you remind us of the tax losses that you have in the US and Canada and how should we be thinking about the effective tax rate going forward?

Kevin O'Halloran: Great. Yeah, that's helpful. Maybe another one for you, Russell. Could you remind us of the tax losses that you have in the US and Canada, and how should we be thinking about the effective tax rate going forward?

Speaker #3: I I can. So our our effective tax rate one of the things that I would like to highlight as it relates to taxes is our operations are in the United States and Canada.

Russell Lawlar: I can. Our effective tax rate, one of the things that I would like to highlight as it relates to taxes is our operations are in the United States and Canada. As a result, just because, and I'm going to highlight the United States, as a result of frankly, the tax regime in the United States, it's lower than most of the other jurisdictions around the world. You should see less cash taxes paid from Hecla than many of our peers. Number two, during the quarter, and you'll see this, we highlighted it in our earnings release. During the quarter, we did a little bit of tax work to combine our Nevada US group with our main US group that includes Lucky Friday and Greens Creek.

Speaker #3: And as a result, just because and I'm going to highlight the United States, as a result of the frankly, the tax regime in the United States, it's lower than most of the other jurisdictions around the the world.

Speaker #3: And so you should see less cash taxes paid from HECLA than than many of our peers. Number two, during the quarter and you'll see this we we highlighted it in our earnings release we during the quarter, we did a a little bit of of tax work to combine our Nevada US group with our our kind of main US group that includes Lucky Friday and Greens Creek.

Speaker #3: And as a result of that, we actually can can utilize the expenses in Nevada against the income that's being generated from Greens Creek and Lucky Friday.

Russell Lawlar: As a result of that, we actually can utilize the expenses in Nevada against the income that is being generated from Greens Creek and Lucky Friday. You actually see a little bit lower tax rate as a result of that. We will see, obviously, less cash taxes paid. We expect to utilize our NOLs both on a state and a federal basis for the year, therefore, we did make a cash tax payment in Q1. I was just trying to look that up, and I frankly don't have it in front of me. You would see that at this point, that would be the taxes that we would expect to pay.

Speaker #3: So you actually see a little bit lower tax rate as a result of that. And we will see obviously less cash taxes paid. We we did what we expect to utilize our our NOLs both on a state and a and a federal basis for the year.

Speaker #3: And so therefore, we did make a cash tax payment in the first quarter. I was just trying to look that up, and I I frankly don't have it in front of me.

Speaker #3: But you would see that you know, at this point, that would be the the taxes that we would expect to pay.

Speaker #5: Okay. That's great. Thanks. And then maybe shifting gears, back to the pirate circuit at Greens Creek. Are there any permitting requirements that you would have to secure for that?

Kevin O'Halloran: Okay. That's great. Thanks. Maybe shifting gears back to the pyrite circuit at Greens Creek. Are there any permitting requirements that you would have to secure for that, and any space constraints on surface at the plant there that you would have to work around? Maybe as a follow-up, as you are doing the technical and the costing work, when should we expect to see some of those details announced? Should we be expecting any changes to the resource of the reserve with the higher recoveries from the circuit?

Speaker #5: And and any space constraints on surface at the plant there that you would have to work around? And then maybe as a follow-up, as you're doing the the technical and the costing work, when should we expect to see some of those details announced?

Speaker #5: And should we be be expecting any changes to the resource of the reserve with the higher recoveries from the circuit?

Rob Krcmarov: In terms of permitting, I don't really know the answer to that question. It's basically simply an extension to the existing circuit, I imagine permitting would be minimal. Maybe something at the load out bay. I don't really know Carlos or Matt, could you add any color on that?

Speaker #2: In in terms of in terms of permitting, I don't really know the answer to that question. I it's it's basically simply an extension to the existing circuit.

Speaker #2: So I imagine permitting would be minimal, maybe something at the loadout bay. I don't really know. Carlos or Matt, could you add any color on that?

Speaker #4: Yeah. What about you are right. For the pilot counters minimum permitting required. And and and we are not expecting any significant delays related with permitting.

Carlos Aguiar: Yeah. You are right. For the pyrite con, there's minimum permitting required. We are not expecting any significant delays related to permitting. For that project, I don't see any issue. There are some minimum requirements.

Speaker #4: So for that project, it's I don't see any issue. But there's some some minimum required.

Speaker #2: Yeah. And in terms of.

Rob Krcmarov: Yeah. In terms of reserves, it's an interesting question because there's almost certainly some material that was stuck in resources, and now that we have the means to process pyritic ore at a profit, I would expect that there may be some of that converting into reserves. I can't quantify that right now.

Speaker #5: In terms of reserves, it's an interesting question because there's almost certainly some material that was in stuck in resources and now that we have the means to process piratic ore at a profit, I would expect that there may be some of that converting into reserves.

Speaker #5: But I can't quantify that right now. Okay, great. We'll keep an eye out for that. That's all from me. Thanks for taking my questions.

Kevin O'Halloran: Okay, great. We'll keep an eye out for that. That's all for me. Thanks for taking my questions.

Speaker #2: Thanks, Kevin.

Rob Krcmarov: Thanks, Kevin.

Speaker #3: You're welcome.

Speaker #1: You are next question comes from the line of Dalton Barretto from Canaccord. Your line is now open.

Hillary: Your next question comes from the line of Dalton Baretto from Canaccord. Your line is now open.

Operator: Your next question comes from the line of Dalton Baretto from Canaccord. Your line is now open.

Speaker #6: All right. Thanks. Good morning, Rob and team. Rob, I'm sure you've seen that the Trail smelter in BC is undergoing an $800 million upgrade to process germanium and gallium.

Dalton Baretto: Thanks. Good morning, Rob and team. Rob, I'm sure you've seen that the Trail smelter in BC is undergoing an $800 million upgrade to process germanium and gallium. I'm just wondering, has Greens Creek ever been assayed for germanium and gallium? Is that something you're looking at, and is there a plan to monetize those if it does exist?

Speaker #6: And I'm just wondering, has Greens Creek ever been assayed for germanium and gallium? Is that something you're looking at? And is there a plan to monetize those if if it does exist?

Speaker #2: I think they could will be some germanium or gallium actually in the in the tailings project. I don't really know. I'm going to have to I'll defer to Brian if Brian, if you're still on the call, could you answer that, please?

Rob Krcmarov: I think there could well be some germanium or gallium actually in the tailings project. I don't really know. I'll defer to Brian. Brian, if you're still on the call, could you answer that, please?

Speaker #7: Yeah, I'm on. Can you guys hear me?

Brian Erickson: Yeah, I'm on. Can you guys hear me?

Speaker #2: Yeah.

Rob Krcmarov: Yep.

Speaker #7: Okay. Yeah. There is. And we've looked at that as part of both oil production and the tailings reprocessing and pirate concentrate. It's it's pretty minor, but certainly that's a conversation we need to have with smelters on what the what the recoveries could be on that and the payability.

Brian Erickson: Okay. Yeah, there is, we've looked at that as part of both ore production and the tailings reprocessing and pyrite concentrate. It's pretty minor, but certainly that's a conversation we need to have with smelters on what the recoveries could be on that and the payability.

Speaker #6: Great. Thanks. And then just sort of a similar question, I guess, on Lucky Friday. You know, a couple of its neighbors down in the Silver Valley there are banging the drum on antimony and downstream processing there.

Dalton Baretto: Great, thanks. Then just a similar question, I guess, on Lucky Friday. A couple of its neighbors down in the Silver Valley there are banging the drum on antimony and downstream processing there. Is that something you guys are looking at as well? Could you be part of that if there was a central antimony plant?

Speaker #6: Is that something you guys are looking at as well? Could you be part of that if there was a central antimony plant?

Speaker #2: Yeah. Well, Lucky Friday doesn't really have any significant antimony compared to our neighbors. So we have looked at that.

Rob Krcmarov: Well, Lucky Friday doesn't really have any significant antimony compared to our neighbors, so we have looked at it.

Speaker #6: Great. Thanks. And there's just a final one on that sort of Silver Valley thematic there. You know, there there is lots of these single assay guys there now that are you know, either up and running or moving towards first production.

Dalton Baretto: Great, thanks. There's just a final one on that sort of Silver Valley thematic there. There is lots of these single-asset guys there now that are either up and running or moving towards first production. There's probably a case to be made for consolidation there. Is that something that Hecla would be interested in or look at at all?

Speaker #6: And you know, there's probably a case to be made for consolidation there. Is that something that HECLA would be interested in or look at at all?

Speaker #2: We're primarily excited by the inherent upside in our own assets. So at Lucky Friday in particular, you know, there hasn't been any meaningful exploration there since about 2011.

Rob Krcmarov: We're primarily excited by the inherent upside in our own assets. At Lucky Friday in particular, there hasn't been any meaningful exploration there since about 2011. That's something that we're kicking off at present. We continue to monitor all of our neighbors, I guess. If there's a compelling value proposition, we will consider it, but we're more excited about the potential on what we already own and understand and where we already have our own infrastructure, which is in top shape.

Speaker #2: And so that's something that we're kicking off kicking off at present. We continue to monitor all of our neighbors, I I guess. And you know, if there there's a compelling value proposition, we will consider it.

Speaker #2: But we're more excited about the potential on what we already own and understand and where we already have our own infrastructure which is in top shape.

Speaker #6: Great. Thanks for that, Rob.

Dalton Baretto: Great. Thanks a lot, Rob.

Speaker #2: Thanks, Dalton.

Rob Krcmarov: Thanks, Dalton.

Speaker #1: You are next question comes from the line of Eric. Windmill from Scotiabank. Your line is now open.

Hillary: Your next question comes from the line of Eric Zaunscherb from Scotiabank. Your line is now open.

Operator: Your next question comes from the line of Eric Zaunscherb from Scotiabank. Your line is now open.

Speaker #8: Oh, hi, Rob and team. Thanks for taking my question. A lot of mine have been answered, but just quick question on Aurora. I know still early days, but there's a mill on site there.

Eric Zaunscherb: Oh, hi, Rob and team. Thanks for taking my question. A lot of mine have been answered. Just a quick question on Aurora. I know it's still early days. There's a mill on site there. Do you think it makes the most sense if you find a resource to process it on site, or would it be part of maybe a hub-and-spoke system here at Midas? If you do it at Aurora, any cost to refurb the mill there? Thanks.

Eric Winmill: Oh, hi, Rob and team. Thanks for taking my question. A lot of mine have been answered. Just a quick question on Aurora. I know it's still early days. There's a mill on site there. Do you think it makes the most sense if you find a resource to process it on site, or would it be part of maybe a hub-and-spoke system here at Midas? If you do it at Aurora, any cost to refurb the mill there? Thanks.

Speaker #8: Do you think it makes the most sense? You know, if you find a resource to process it on site, or would it be part of maybe kind of hub-and-spoke system here at Midas?

Speaker #8: And if you do it at Aurora at any cost to to refurb the mill there? Thanks.

Speaker #2: Do you want to do it or should I? At Aurora, thanks for your question, Eric. At Aurora, it's too far by road. We had processed some loaded carbon previously.

Rob Krcmarov: Do you want to do it, or shall I? Go ahead. At Aurora. Thanks for your question, Eric. At Aurora, it's too far by road. We had processed some loaded carbon previously. To take ore from Aurora to Midas, it's probably not going to happen. We do have about a 600-ton per day mill that's on site. It's not in great condition, I have to say. Certainly not as good as Midas. That's either going to require reinvestment or potentially a new mill. That remains to be determined. Really, it's let the drill bit do the talking. As Kurt said, he's very excited about this. I went out to this project in the late spring, and I actually understand why he's excited. There's legacy open pits, there's legacy underground production workings and adits.

Speaker #2: But to take ore from Aurora to Midas, it's probably not going to happen. We do have about a 600-ton-per-day mill that's on site.

Speaker #2: It's actually it's it's it's not in great condition, I have to say. Certainly not as good as Midas. And so that's either going to require reinvestment or or you know, potentially a new new mill.

Speaker #2: That remains to be determined. Really, it's let's let the drill bit do the talking. As Kurt said, he's very excited about this. I went out to this project in the in the late spring and I actually understand why he's excited.

Speaker #2: There's legacy open pits. There's legacy underground production workings and addits. And then the best target that Kurt's focused on hasn't had a single drill hole on it.

Rob Krcmarov: The best target that Kurt's focused on hasn't had a single drill hole on it, and you can actually see it from the side of the hill. I'm very excited to see what he's going to yield.

Speaker #2: And you can actually see it from from the side of the hill. So I'm very excited to see what he's going to yield.

Speaker #8: Okay, fantastic. Thank you. That's very helpful. One more, if you don't mind—just on Midas and what you're seeing there in the center offset. Presumably, that's on the south side of the main fault there, right?

Eric Zaunscherb: Okay, fantastic. Thank you. That's very helpful. One more if you don't mind. Just on Midas and what you're seeing here in the Center Offset. Presumably that's on the south side of the main fault there, right? Looks like some sort of an offset. Is it very similar to what you're seeing in the main Midas mine, or any additional commentary would be helpful. Thanks.

Eric Winmill: Okay, fantastic. Thank you. That's very helpful. One more if you don't mind. Just on Midas and what you're seeing here in the Center Offset. Presumably that's on the south side of the main fault there, right? Looks like some sort of an offset. Is it very similar to what you're seeing in the main Midas mine, or any additional commentary would be helpful. Thanks.

Speaker #8: But it looks like some sort of an offset. Is it, you know, very similar to what you're seeing in the main Midas mine or any additional commentary would be helpful.

Speaker #8: Thanks.

Speaker #2: Yeah. It's it's similar to the Midas mine. It's it's more broken up than what we see at Midas. You know, Midas had very narrow, really high-grade veins within a 6, 7 foot, 8 foot wide zone.

Kurt Allen: Yeah. It's similar to the Midas mine. It's more broken up than what we see at Midas. Midas had very narrow, really high-grade veins within a 6, 7 foot, 8-foot wide zone. It's similar to that in that respect. The offset is very similar to the Center discovery that we had in 2021.

Speaker #2: And so it's similar to that in that respect. The offset is very similar to the center discovery that we had in 2021.

Speaker #8: Okay, great. Thank you. Really appreciate that. Yeah, sounds good. I'll hop back in the queue. Cheers.

Eric Zaunscherb: Okay, great. Thank you. Really appreciate that. Yeah, that sounds good. I'll hop back in the queue. Cheers.

Eric Winmill: Okay, great. Thank you. Really appreciate that. Yeah, that sounds good. I'll hop back in the queue. Cheers.

Speaker #2: Thanks, Eric.

Rob Krcmarov: Thanks, Eric.

Speaker #1: Your next question comes from the line of Alex Tarantu from National Bank. Your line is now open.

Hillary: Your next question comes from the line of Alex Tarnavsky from National Bank. Your line is now open.

Operator: Your next question comes from the line of Alex Tarnavsky from National Bank. Your line is now open.

Speaker #7: Yeah. Good morning, guys. A lot of good questions asked here. And most of mine are taken. But I got a couple of follow-ups here.

Alex Tarnavsky: Yeah. Good morning, guys. A lot of good questions asked here, and most of mine are taken, but I got a couple of follow-ups here. Firstly, just on Midas, obviously there's a lot of some exciting exploration there. You guys have talked quite a bit about a lot of existing infrastructure that you can quickly turn back on. Can you just remind me, maybe kind of walk me through the process of what we should expect over the next one or two years? I'm just trying to get a better sense of when we could see Midas become a formal project go-ahead that you're going to make a production decision there, and we could see that first gold from that.

Alex Terentiew: Yeah. Good morning, guys. A lot of good questions asked here, and most of mine are taken, but I got a couple of follow-ups here. Firstly, just on Midas, obviously there's a lot of some exciting exploration there. You guys have talked quite a bit about a lot of existing infrastructure that you can quickly turn back on. Can you just remind me, maybe kind of walk me through the process of what we should expect over the next one or two years? I'm just trying to get a better sense of when we could see Midas become a formal project go-ahead that you're going to make a production decision there, and we could see that first gold from that.

Speaker #7: So first, maybe just on Midas. I mean, obviously, there's a lot of some exciting exploration there. You guys have talked quite a bit about a lot of existing infrastructure that that you can quickly turn back on.

Speaker #7: Can you just remind me maybe kind of walk me through the process of, you know, what we should expect over the next one or two years?

Speaker #7: And I'm just trying to get a better sense of, you know, when we could see Midas become you know, a formal project go ahead that you're going to, you know, make a production decision there and we could see that first goal from that.

Speaker #2: I'll hand that one over to Matt.

Rob Krcmarov: I'll hand that one over to Matt.

Speaker #4: Thanks, Rob. So to answer your question, Alex, we're actively studying, you know, obviously, Kurt is drilling and identifying the resource. And we get that all firmed up.

Matt Blattman: Thanks, Rob. To answer your question, Alex, we're actively studying. Obviously, Kurt is drilling and identifying the resource, and we get that all firmed up. My worst nightmare is if Kurt finds that resource and turns to me and says, Let's put it into production tomorrow, and I don't have that ready. We've already started geotechnical assessment of the rock. We've started on a hydrogeologic assessment, so inflows and geochemistry. We've also started on some of the mine design and what it would take to refurbish the mill. Those numbers are all ongoing. Obviously, we're not going to invest in any of that until we've been able to firm up what's in the ground.

Speaker #4: And my worst nightmare is that Kurt finds that resource and he turns to me and says, "Let's put it into production tomorrow." And I don't have that ready.

Speaker #4: So we've already started geotechnical assessment of the rock. We've started on a hydrogeo hydrogeologic assessment of the inflows and geochemistry. We've also started on some of the mine design and what it would take to refurbish the mill.

Speaker #4: So those numbers are all ongoing. But obviously, we're not going to invest in any of that until we've decided we've been able to firm up within the ground.

Speaker #4: So the timing will be very related on exploration success, but we're being prepared now to have that information ready if he gets that or assuming the drill identifies the resource that we're really looking for.

Matt Blattman: The timing will be very related on exploration success, but we're being prepared now to have that information ready if he gets that, or assuming the drill identifies the resource that we're really looking for. Does that help?

Speaker #4: Does that help?

Speaker #7: Okay. Yeah. Yeah. No. I guess that helps. I mean I mean, even if the the resource you know, proves itself to you know, to to support a restart, I I would expect then still this is a you know, best-case call it you know, two, three years away from first ore.

Alex Tarnavsky: Okay. Yeah. No, I guess that helps. Even if the resource proves itself to support a restart, I would expect then still this is a best case, call it 2, 3 years away from first orders. Does that kind of make sense still, best case scenario?

Alex Terentiew: Okay. Yeah. No, I guess that helps. Even if the resource proves itself to support a restart, I would expect then still this is a best case, call it 2, 3 years away from first orders. Does that kind of make sense still, best case scenario?

Speaker #7: Is that kind of makes sense still? Best-case scenario?

Speaker #4: It's probably in that range, but again, you know, like it's a lot of unknowns out there. But yeah, that's probably a reasonable thought.

Matt Blattman: It's probably in that range. Again, it's a lot of unknowns out there. Yeah, that's probably a reasonable thought.

Speaker #7: Okay. Any any permitting constraints or any any sorry. Go ahead.

Alex Tarnavsky: Okay. Any permitting constraints or.

Alex Terentiew: Okay. Any permitting constraints or.

Matt Blattman: Permitting constraints.

Matt Blattman: Sorry, go ahead.

Speaker #4: Permitting constraints. Permitting constraints.

Matt Blattman: Permitting constraints.

Speaker #2: Got it.

Alex Tarnavsky: Got it.

Alex Terentiew: Got it.

Speaker #4: Okay. So in terms of permitting constraints, we're in the process of of reviewing what we have available. In general, we have a lot of that those permits in hand.

Matt Blattman: Okay. In terms of permitting constraints, we're in the process of reviewing what we have available. In general, we have a lot of those permits in hand. Some will require modifications, some will require some updates. In general, we're in a much better spot than we would be if it was just a greenfield site.

Speaker #4: Some will require modifications. Some will require some updates. But that's you know, in general, we're in a but much better spot than we we would be if it was just a greenfield site.

Speaker #7: Okay. Great. And then just one last question on.

Alex Tarnavsky: Okay, great. Then just one last question.

Alex Terentiew: Okay, great. Then just one last question.

Rob Krcmarov: Alex Tarnavsky, when you think about project development, the normal course is you define a resource, you do your studies and stuff like that. We are in a unique situation in that we already own some of the key infrastructure. What we are trying to do is be agile here and run parallel streams. Kurt is obviously trying to define the critical masses of resources that we need to get this into production. Matt is trying to work on all the background engineering study work that needs to happen. It is really about being agile. In terms of 2 or 3 years, I would suggest it will probably be a little bit longer than that.

Speaker #2: Alex, what do you think about project sorry, Alex. When you when you think about project development, you know, the the normal course is you define a resource.

Speaker #2: You do your studies and stuff like that. But we're in a unique situation in that we already own some of the key infrastructure. And so what we're trying to do is be agile here and run parallel streams.

Speaker #2: So Kurt's obviously trying to define the critical masses of of of resources that we need to get this in the in the production. Matt's trying to work on all the background engineering study work that that needs to happen.

Speaker #2: So it's really about being agile. In terms of you know, two or three years there, I would suggest it would probably be a little bit longer than that in terms of key permits.

Rob Krcmarov: In terms of key permits, if, for example, conceptually, we want to put a portal to access the new discoveries that Kurt and his team have made, that is probably almost certainly going to require a new permit. The mill, the tailing facility, all the key ones, we already have them in hand.

Speaker #2: If, for example, conceptually, we want to put a portal to access the new discoveries that Kurt and his team have made, that's probably almost certainly going to require a a new permit.

Speaker #2: But the mill, the tailings facility, all the key ones—we already have them in hand.

Speaker #7: Yeah. No. That makes a lot of sense, Rob. I guess I guess, you know, we just kind of look at these projects and see all the infrastructure.

Alex Tarnavsky: Yeah. That makes a lot of sense, Rob. I guess we are just going to look at these projects and see all the infrastructure, and think that these things can be turned on relatively fast. I always forget that there is quite a bit of more work behind the scenes that has to get done. I just got one more question just on Keno Hill. Obviously, this mine has been running for a few years. You are talking about certain permits, but hopefully by mid-2029. I just want maybe a bit more color on the work that is being done there or what is needed for these permits. Is some of this more of a time series data collection that is just, frankly, no matter what you do, it is just going to take some time to prove things up for whether it is environmental or water purposes?

Alex Terentiew: Yeah. That makes a lot of sense, Rob. I guess we are just going to look at these projects and see all the infrastructure, and think that these things can be turned on relatively fast. I always forget that there is quite a bit of more work behind the scenes that has to get done. I just got one more question just on Keno Hill. Obviously, this mine has been running for a few years. You are talking about certain permits, but hopefully by mid-2029. I just want maybe a bit more color on the work that is being done there or what is needed for these permits.

Speaker #7: And I think that these things can be turned on relatively fast. But I always forget that there's quite a bit of more work behind the scenes that has to get done.

Speaker #7: So and and just got one more question just on Kino Hill. I mean, obviously, this mine's been running for a few years. You you're talking about, you know, certain permits but hopefully by mid-2029.

Speaker #7: I just want maybe a bit more color on on the work that's being done there or what's needed for these permits. Is this is some of this more of a you know, time series data collection that is just frankly, no matter what you do, it just it's just going to take some time to prove things up for for whether it's environmental or water you know, purposes?

Alex Terentiew: Is some of this more of a time series data collection that is just, frankly, no matter what you do, it is just going to take some time to prove things up for whether it is environmental or water purposes? I am just trying to see if there is anything that can be done to expedite that process.

Speaker #7: Or I'm just trying to see if there's anything that can be done to expedite that process.

Alex Tarnavsky: I am just trying to see if there is anything that can be done to expedite that process.

Speaker #2: Not really. I mean, permitting takes its course. We it's it's up to us to provide the engineering and the design criteria that basically informs the permit.

Rob Krcmarov: Not really. Permitting takes its course. It is up to us to provide the engineering and the design criteria that basically informs the permit, and then the regulators take as long as they need. They obviously need to consult with the First Nations group as well. We do know the sequence, and really it is, as we have said previously, it is focused on making sure that we have sufficient water treatment capacity, that we have sufficient tailings capacity, and waste dump capacity as well. We understand the sequence, but in terms of the timing, it is very hard to pin down. We are going as fast as we can, but it is not entirely in our hands.

Speaker #2: And then the regulators take as long as they need they obviously need to consult with the First Nations group as well. But we do know the sequence.

Speaker #2: And really, it is as we've said previously, it is focused on making sure that we have sufficient water treatment capacity, that we have sufficient tailings capacity, and waste dump capacity as well.

Speaker #2: We understand the sequence. But in terms of the timing, it's very hard to pin down. We're going as fast as we can, but it's not entirely in our hands.

Speaker #7: I appreciate it. Thank you. That's it for me.

Alex Tarnavsky: I appreciate it. Thank you. That is it for me.

Alex Terentiew: I appreciate it. Thank you. That is it for me.

Speaker #1: This concludes the time allocated for questions. If you have any additional questions, please reach out to Mike Parkin via the Contact Us link on the website.

Hillary: This concludes the time allocated for questions. If you have any additional questions, please reach out to Mike Parkin via the Contact Us link on the website. I will now turn the call back to Rob Krcmarov, President and CEO, for closing remarks.

Operator: This concludes the time allocated for questions. If you have any additional questions, please reach out to Mike Parkin via the Contact Us link on the website. I will now turn the call back to Rob Krcmarov, President and CEO, for closing remarks.

Speaker #1: I will now turn the call back to Rob Critchmarov, president and CEO for Closing Remarks.

Speaker #2: Well, thank you all for the thoughtful questions today. And thanks for joining us this morning. I'll just leave you with this. We we are in the strongest position this company's ever been in.

Rob Krcmarov: Well, thank you all for the thoughtful questions today, and thanks for joining us this morning. I will just leave you with this. We are in the strongest position this company has ever been in, and we are putting that strength to work in the right places for our shareholders and for the long-term value of this business. We do look forward to updating you again next quarter. Thanks, everyone, and have a great day.

Speaker #2: And we're putting that strength to work in the right places—for our shareholders and for the long-term value of this business. We look forward to updating you again next quarter.

Speaker #2: So thanks, everyone, and have a great day.

Speaker #1: This concludes today's call. Thank you for attending. You may now disconnect.

Hillary: This concludes today's call. Thank you for attending. You may now disconnect.

Operator: This concludes today's call. Thank you for attending. You may now disconnect. This event has now concluded. Access the Hecla Mining Company IR website for more information. This line will now disconnect.

Operator 1: This event has now concluded. Access the Hecla Mining Company IR website for more information. This line will now disconnect.

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