Hecla Mining Company

Good day and thank you for standing by. Welcome to the Q2 2021 HECLA Mining Company 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. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Anveta Patel. Thank you. Please go ahead.

Thank you, operator, and welcome, everyone. Thank you for joining us for HECLA's second quarter 2021 financial and operation results conference call. I'm Anveta Patel, HECLA's assistant treasurer. Our financial news results released that were issued this morning along with today's presentation are available on HECLA's website. On today's call, we have Phil Baker, HECLA's President and CEO, Lauren Roberts, HECLA's Senior Vice President and Chief Operating Officer, and Russell Lawler, HECLA'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 10Q and 10K filings with the SEC. These and other risks could cause results to differ from those projected in the forward-looking statements. 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, Cynthia. Good morning, everyone, and thanks for joining our call. HECLA this quarter has delivered near-record results on many fronts. We reported our second-highest revenues gross profit, cash flow from operations, and adjusted EBITDA in our history. And as we capitalize on the higher commodity prices with our continued strong production and focus on cost management. We reported record realized silver margin of $19.60 per ounce of silver, as silver was our dominant revenue contributor at 40% for the quarter. At Greens Creek and for the company, we've now lowered our cash costs and all in sustaining cost guidance again for the year, and Lauren's going to speak to that in a minute. Our financial position continues to strengthen, and along with it, our financial flexibility. Our cash position has increased almost two and a half times from the prior year to $181 million as a result of our free cash flow generation. Our financial strength is not new to this quarter, and even for the past few years. This is now our 39th consecutive quarter of paying a dividend. And the dividend that we just announced that we'll pay in September will make it 10 years. And we have now returned the shareholders $72 million in common dividends. In the first six months of 2021, we paid 16% of our free cash flow and dividends. And as the silver price increases, shareholders have the ability to participate in the incremental free cash flow generation with our silver-linked dividend. And at the same time, we'll be maintaining our minimum dividend payment. On the next slide, I want to take a moment to talk about ESG because we published earlier this quarter our 2020 Sustainability Report, which is entitled Small Footprint, Large Benefit. And if you haven't taken a look at this, I would encourage you to do so. Key to understanding HECLA's ESG, and this is on the next slide, is the fact that our minds are very small. underground mines that have been the economic generator or driver of communities for generations. And when I say small mines, I mean small tonnage. The large companies in our industry will mine as many tons in a day as we do in a year. When I say economic drivers for communities, we've been the largest private employer for 30-plus years at all three of our operations. Because we're small, we use very little energy, and most of it is hydro. So our greenhouse gas emissions are extraordinarily low, and I think the best in the industry. I know that in 2020, we produced almost two and a half times more silver equivalent ounces per ton of emissions compared to peers. And the amount of water we use per silver equivalent ounces is 63% of what an average person in the United States consumes in a day. So when it comes to the environmental impact of HECLA, think small. But when you think about the social impact, think big. As the largest private employer in small towns with jobs that exist for generations, We just, earlier this summer, we had a summer intern who started with us, and he's the fifth generation to work at HECLA. So a shout-out to Scott Hoegemeyer and his son. And the jobs that we provide are jobs that provide more than a living wage. These are jobs that sustain and build communities, and particularly during the pandemic. The Alaska Chamber recognized this and named our Greens Creek operation as the large business of the year for the leadership work that we did in 2020 during the pandemic. And it's not just providing jobs. We support communities and special needs through multiple programs that we partially fund through our charitable foundation. Looking at safety, our culture is safety culture has gone across all of our operations with Casa Brardy being awarded Quebec Maritime's Mine Safety Award. This is the first time in that mine's 30-year history to win the award. Finally, the metals that we mine are essential in this transformation to renewable energy and HECLA produces 40% of the United States silver. and our montana assets host america's third largest undeveloped copper deposit with significant silver resources both metals that are keys to green energy and with that i'm going to pass it over to russell to talk about the financial condition of the company thanks phil turning to slide seven propelled by strong production sales from our silver mining higher prices