Hecla Mining Company BMO Capital Markets Global Metals and Mining Conference

Transcription

1 Hecla Mining Company 2010 BMO Capital Markets Global Metals and Mining Conference 1

2 Cautionary Statements Cautionary Note Regarding Forward Looking Statements Statements made which are not historical facts, such as anticipated payments, litigation outcome, production, sales of assets, exploration results and plans, costs, and prices or sales performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and involve a number of risks and uncertainties that could cause actual results to differ materially from those projected, anticipated, expected or implied. These risks and uncertainties include, but are not limited to, metals price volatility, volatility of metals production and costs, exploration risks and results, political risks, project development risks, labor issues and ability to raise financing. Refer to the company s Form 10-Q and 10-K reports for a more detailed discussion of factors that may impact expected future results. The company undertakes no obligation and has no intention of updating forward-looking statements. Cautionary Note Regarding Estimates of Measured, Indicated and Inferred Resources The United States Securities and Exchange Commission permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms in this presentation, such as measured," indicated," and "inferred resources" that the SEC guidelines strictly prohibit us from including in our filing with the SEC. U.S. investors are cautioned not to assume that any or all of measured, indicated or inferred resources are economically or legally mineable or that these resources will ever be converted into reserves. U.S. Investors are urged to consider closely the disclosure in our Form 10-K and Form 10-Q. You can review and obtain copies of these filings from the SEC's website at 2

3 Corporate Profile NYSE Listed - Symbol HL Market Capitalization - $1.26 billion* Recent Price - $5.30* Annual silver production of million ozs. Low cash costs 60,000 oz/yr gold plus zinc, lead Two operating US mines *At February 22,

4 Hecla is Unique Established, Growing Largest producer of silver in US 2 nd largest zinc; 3 rd largest lead; plus gold Low-cost producer Cash cost of $1.91/oz in 2009 Long-life mines Record reserves of 140 mm oz Ag Production & resource growth 3 years of increasing silver production Greens Creek Mine, Alaska Since 1989 Vancouver, BC Coeur d Alene, Idaho Lucky Friday Mine, Idaho Since 1942 *San Juan Silver, Colorado *San Sebastian, Mexico *Assumes $0.90/lb lead, zinc 4

5 2009: A Record Year for Hecla Record cash flow Record silver production Record lead-zinc production Record growth in silver reserves at Lucky Friday Debt eliminated More than $100 million in cash at year-end 5

6 Record Cash Flow of $115 Million in 2009 Net Income* Cash Flow from Operations (millions) $54.2 (millions) $115 $ % $ % $14.8 ($80.2) * Net Income to common shareholders 6

7 Record Silver, Lead and Zinc Production Silver (mm ounces) Gold (ounces) % ,650 23% 67, , Zinc Lead (tons) (tons) 32% 80,995 26% 44,263 61,141 35,023 24,549 26,

8 Best Margins in Eight Quarters Margin/oz $19.10 $13.74 $19.58 $10.57 $7.94 $10.35 $13.85 $2.71 Margin Cash Costs/oz ($1.42) $3.43 $4.46 $7.49 $4.67 $3.38 $0.85 ($2.00) Based on average market prices 8

9 Cost per Ton Milled Tons per Day Milled Silver Grade - oz/t Silver oz - Millions Increased Productivity at Both Mines Greens Creek Lucky Friday $90 Tons/day 2, $80 $70 2, $60 2, $50 $40 2, $30 2, $20 $10 1, $ Milling Cost/Ton Mining Cost/Ton 1, Tons per Day Milled Silver Grade Silver Produced 9

10 Debt Free with >$100 Million in Cash Bank Debt and Cash Position $400 $350 $360 (in millions) $750 mm acquisition of Greens Creek mine in Q2/08 $300 $250 $200 $150 $100 $50 $46 $199 $162 $114 $79 $85 $63 $57 $36 $38 $38 $105 Credit crisis limits $380 mm refinancing in mid-2008 Bank debt repaid in Oct 2009 $60 mm revolving credit facility set in Oct 09 Cash flow of $115 mm in 2009 $0 $0 Cash Bank Debt* *Bank debt includes short- and long-term bank debt; does not include capital leases. 10

11 Silver Reserves and Resources - Million oz Growing Silver Reserves and Resources Other Greens Creek Lucky Friday Silver Reserves

12 Greens Creek Mine (Alaska) Higher-grade, Ag-Zn-Au-Pb mine World s 6th largest silver mine Long-life: produced >200 mm oz Ag and >1.7 mm oz Au Greens Creek Low cost: historical cash costs <$3/oz Continuously replace reserves with >100 mm oz Ag & 0.8 mm oz Au Represents ¾ of Hecla s production +7 mm oz silver in 2010 and 60,000 oz gold, zinc, lead 12

13 Greens Creek - Underexplored 1973 discovery A rare, precious metal enriched base metal deposit Deposit type comes in clusters Limited exploration until 2004 Land exchange in 1997 Recent studies outline key mineralized horizon (red-trace) and multiple targets North Young Lil Sore Lower Zinc Killer Creek Upper Plate NWW West Gallagher N MINE Favorable Mine Horizon East Ridge East Lil Sore NE Contact High Sore Cliff Creek 13

14 Greens Creek Ore Zones West Ore Zone East Ore Zone 9A Ore Zone NWW Ore Zone 5250 Ore Zone SWB Ore Zone 200S Ore Zone Looking to NE 14

15 Plan of Underground Exploration Targets Upper Plate NW-W 1147 Drift NW- West Gallagher Fault 5250 North Southwest 200 South Deep 200 South Central West 5250 East Maki Fault N Underground Exploration 2010 Plan 1, ,000 2,000 Feet Upper Plate and Lower Contact of the NW-W Northeast Contact 5250 South Extension 4211 Drift Gallagher Wi ld erness Boundary 200 South Extension 15

16 Lucky Friday Mine Big Ounces at Depth Operating since 1942 Feasibility to extend mine life 20 plus years Underground silver-lead-zinc mine Grade rising, widths increasing, economics improving deeper Part of an underexplored property +3 mm oz Ag plus lead-zinc in 2010 ¼ mile from Interstate 90 Northern Idaho 16

17 A World Class Silver Camp Hecla Land Position HERCULES TAMARACK HECLA The Silver Valley, North Idaho 1.2 billion oz silver produced 300 million oz silver from Hecla s land position Significant vertical continuity in the district (+7500 feet) Large 25 sq. mile claims area Underexplored district 17

18 Silver Reserves - mm oz Large Increase in Lucky Friday Reserves %

19 Schematic: Lucky Friday Deep Development Silver Shaft 30 Vein 4050 level Proposed #4 Shaft 4900 level Current mining from 5900 level access 5900 level 6500 level 7500 level Looking NW 19

20 Improving Quality with Depth 20

21 San Juan Silver JV (Colorado) Past production 84 mm oz Ag Potential >100 mm oz Ag Excellent exploration potential 37 mm oz Ag resource Multiple vein structures $3 mm drill program in 10 21

22 Planned Drill Targets - San Juan Project N 2010 Drill Program 2011 Drill Program Patented/Unpatented Mining Claims Major Trends of Mineralization 0 1 Mile 22

23 San Sebastian Project (Mexico) On-trend with major mines and deposits in central Mexico +300 sq mile property Systematic multi-year exploration approach Discovery made on Peñascote target in 2009 Drill program underway 23

24 Largest US Silver Producer in 2009 Coeur 5% Kinross Newmont 3% 3% Barrick 5% Revett 3% Other 30% US Silver 6% 2 nd largest zinc producer 3 rd largest lead producer Teck 16% Hecla 29% Source Annual Filings, Corporate Reports, and GFMS Estimates 24

25 Significant Silver Reserves in the US Hecla USA, 100% Coeur USA, 10% Australia, 9% Chile, 3% Argentina, 26% Portugal, 17% Canada, 0.2% Mexico, 34% Silver Wheaton USA, 11% Mexico 32% Mexico, 38% Silver Standard Bolivia, 12% Sweden, 4% Greece, 2% Peru, 3% Pan American Argentina, 15% Peru, 46% Mexico, 26% First Majestic Mexico, 0.2% Hochschild Argentina, 18% Fresnillo Peru, 81% Argentina, 0% Bolivia, 45% Argentina, 68% Mexico, 100% Mexico, 100% Source Public Filings, Reserves data only, Silver Wheaton s reserves include Rosemont transaction. 25

26 Cash Costs - US$/oz of Silver Consistently Lowest Cost $12 $ $8 $6 $ $2 $- $(2) 0.9 HL PAAS CDE FR (2.0) $(4) 2008 Q Q Q Q Source Public Filings 26

27 Peer Group Share Performance 140% 90% 40% -10% -60% 1 Year Hecla PAAS SLW SSRI CDE 190% 140% 90% 40% -10% -60% Jan 2, Feb 12, % 150% 100% 50% 0% -50% 6 Months 15% 10% 5% 0% -5% -10% -15% -20% -25% -30% -35% YTD 2010 Source Yahoo; Share prices as of February 12,

28 Hecla s Record Setting Year $313 $217 44% 2009 Prior Record (in millions) 32% $101 30% $78 12% 89 12% $115 77% $ Revenue Gross Profit Silver Oz. Produced Lead Lbs. Produced Zinc Lbs. Produced Cash Flow from Operations Exploration in 4 major mining districts Growing reserve/resource base Production growth will follow 28

29 Hecla Mining Company