Hecla Mining Company

Thank you for standing by. Welcome to the Helka Mining Company Q1 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Anvita Patel. You may begin.

Thank you, operator, and welcome, everyone, and thank you for joining us for HECLA's first quarter 2021 financial and operations results conference call. This is Anvita Patil, HECLA's assistant treasurer. Our financial results news release that was issued this morning along with today's presentation are available on HECLA's website. On today's call, we have Phil Baker, Hetler's President and CEO, Lauren Roberts, Hetler's Senior Vice President and Chief Operating Officer, and Russell Lawler, Hetler's Senior Vice President and Chief Financial Officer. Any forward-looking statements made today by the management team come under the Private Securities Litigation Reform Act and involve risks, as shown on Slides 2 and 3 in our earnings release and in our 10-Q and 10-K filings with the SEC. These and other risks could cause results to differ from those projected in the forward-looking statement. Reconciliations of non-GAAP measures cited in this call and related slides are also found in those documents. With that, I will pass the call to Phil Baker.

Thanks, Anvita. Good morning, everyone. Thank you for joining our call. Referring to slide four, we had a very strong first quarter, very good operational financial performance. We recorded... Quarterly adjusted EBITDA, that was a record for the company. It was $12 million higher than our previous record. We had the highest cash gross margin, and we had the second highest revenues in our 130-year history. And all of this was driven primarily by the strong production results and cost performance at all of our operations. At Green's Creek, we're lowering our cash cost and all in sustaining cash cost guidance for the year. And Lauren's going to speak more about that in a minute. The fundamentals of our balance sheet reflect the success of quarters that we've had of improving performance by HECLA. So our balance sheet is in very good shape. One of the things I want to point out is that typically our first quarter is one of our smallest cash flow quarters. I went back and looked at the last 30 years, and about 20 of the 30 were the lowest. There were about 10 where the first quarter wasn't the lowest cash flow for the year. And when it wasn't the lowest, it was always the second lowest. So when we consider our operating plans, when we consider the reversal that we'll have of the working capital buildup, We're anticipating significant free cash flow generation over the rest of the year. So as good as the first quarter was, we think the rest of the year will be stronger. And as a result of that, the board has announced an increase to our dividend policy. Our silver link dividend payment that occurs at $25 will be increased by 50% to $0.03 per share annually. And Russell is going to speak more about that. We're returning about 28% of our free cash flow in the first quarter to shareholders, and as silver prices increase, shareholders will have the ability to participate in the incremental free cash flow generation that we'll have. We also had a very strong operating performance. And despite that, despite the good performance, we were able to maintain our low all-in frequency rate about 1.71 for the first quarter. In addition, our sustainability report, which we're going to release in May with the annual meeting, highlights our ESG performance that we've had. The report focuses, in fact, the title of the report is something like Small Footprint, Big Benefit, because we have these underground mines that have an extraordinarily small footprint and they're largely energized by alternative power making our greenhouse gas emissions per ounce probably the lowest or among the lowest in the industry. And we've also focused on policies and activities that really make HECLA a uniquely positive ESG investment. So we're going to focus a lot of attention on that at the annual meeting. And also at the annual meeting, we're going to update expiration. So we're going to wait for now. We'll wait until the annual meeting. But let me just say that we've had some of the best drilling results in the history of the company. And as you're going to see in a few weeks, we're in the early days of some of these programs today. but they have the potential to be extraordinarily accretive. Really look forward to the rest of the year, and with that, I'm going to pass the call to Russell. Thanks, Bill.