Hecla Mining Company

Company second quarter 2023 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. To withdraw your question, press star one again. I would now like to turn the conference over to Anvita Patel, Vice President, Investor Relations and Treasurer. Please go ahead.

Good morning, Regina, and thank you all for joining us for HECLA's second quarter 2023 financial and operations results conference call. I'm Anvita Patil, HECLA's Vice President of Investor Relations and Treasurer. Our financial results news release that was issued yesterday, 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, Hitler 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 in slides two and three in our earnings release and in our 10-K and 10-Q filings with the SEC. These and other risks could cause results to differ from those projected in the forward-looking statement. Non-GAAP measures cited in this call and related slides are reconciled in the slides or the news release. I'd like to remind you, if you would like to have a call with the management, you can do so by using the link under the section Virtual Investor Event in our earnings release that was issued yesterday. With that, I will pass the call to Phil.

Thanks, Vida. Good morning, everyone. Thanks for joining our call. This second quarter was a good quarter for safety, production, cash flow, and starting changes at CASA. But maybe the most significant event of the quarter is the restart of the Kino Mill. Because when you combine that with what is happening at Greens Creek and Lucky Friday, I think that HECLA is now in another period of substantial growth in silver production reserves, and maybe even faster than what we had over the last five years. And if you look at slide four, you can see why I'm saying that, because what that shows is what we've done over the last five years. And the numbers for those five years are pretty remarkable, 27% growth in revenue, 79% growth in silver reserves, 37% growth in production, three-quarters of a billion of free cash flow from our three mines. And it's no longer a question that Green Street Mill can operate at 2,600 tons per day or maybe even 2,800 tons per day. It's now more of a question of whether we can maintain mining at that rate or even higher. And the lucky Friday, without the service hoist in the bunker, which is in operation this month and the fourth quarter respectively, is already producing about 20% more ore than 18 months ago and is at a 5 million ounce run rate. At the restart of Keno, we'll have our teething problems, but if you look, we have an exceptional district given the grade of the ore, the recoveries that we're experiencing, and the remarkable exploration success with continuous discovery of mineralization. So over the last five years, we had that 37% growth in production, and we expect 40% over the next three years and close to 20% growth just this year. We probably will also see growth in our reserves, more free cash flow generation, and I think all of this should result in share performance, positive share performance. Now, Heckler is a silver company with gold exposure, and we believe gold exposure will always be important to our portfolio for many reasons. It gives us diversification from the concentrate market. It hedges against silver's higher volatility, especially during recessions. It gives us scale to grow. And these are the reasons Casa Berardi is important to our portfolio. As we've indicated for the last year and a half, CASA has been impacted more than our other sites by inflation causing underground mining costs per ton to double. Underground grades have declined as we expected. And tailings construction costs are higher because it requires more buttressing. So while we are permitting the higher grade pits, we are moving quickly to mine only the 160-pit. Lauren's going to talk more about CASA in a moment. So now what I'd like to do is move to slide five for a few comments specifically on the quarter. I think it was a great second quarter, and I think the first half silver production is evidence of the point I started with, and that's that our silver production is growing even faster now. With this quarter, Lucky Friday produced 1.3 million ounces, and four out of the last five quarters we've produced more than 1.2 million ounces. And at that rate, Lucky Friday is close to being the 30th largest silver mine in the world. And just to put that in a context, in 2021, Lucky Friday was producing about 40% less than what it's doing now. And as I mentioned, we restarted the mill at Keno Hill, and the improvements we completed leading up to the restart are performing well. The secondary crushing circuit modifications are proceeding on schedule. The grade's better than modeled, and we anticipate being at full production by year end. And of course, all this performance was underpinned by Green Streak's consistent 2.4 million ounces of production and $36 million of free cash flow. Our all-in injury frequency rate was the lowest in the history of the company at 1.18, an accomplishment that reflects our focus on changing behavior and engineering out risk. And I think the best example of engineering Out risk is the UCB mining method, which puts miners in places that are safer doing safer tasks. We will be focused on how low the injury frequency rate can go at the lucky Friday. And Lauren, who's going to retire at the end of the year, will talk more about each property. Now, silver revenues are growing relative to gold. We're almost 45% for the quarter, and I think we'll likely have more than 55% of our revenues from silver by the end of the year. The silver operations have good cash flow generation, and if prices can strengthen a little bit, the second half should be even better, and Russell will have more on this. We maintained our consolidated silver production cost guidance, but we have adjusted the production cost guidance for cash variety and the production based on the impact of the wildfires and the fact that we're moving quickly to open pit only operations. And now I'll pass the call to Russell.