Business Wire | Aug 5, 2021 03:30AM EDT

Hecla Reports Second Quarter 2021 Results

Aug. 05, 2021

COEUR D'ALENE, Idaho--(BUSINESS WIRE)--Aug. 05, 2021--Hecla Mining Company (NYSE:HL) today announced second quarter 2021 financial and operating results.

HIGHLIGHTS**

* Sales of $218.0 million, a 31% increase with the largest source being silver. * Gross profit of $59.3 million, an increase of $25.2 million. * Cash provided by operating activities was $86.3 million, with $31.9 million of additions to properties, plant, equipment and mineral interests, resulting in $54.4 million of quarterly free cash flow.1 * Silver production of 3.5 million ounces, an increase of 4% over prior year due to full production at Lucky Friday. * Gold production of 59,139 ounces, a decrease of 1%. * Net income applicable to common shareholders of $0.6 million, or $0.00 per share. * Adjusted net income applicable to common shareholders of $32.8 million, or $0.06 per share.2 * Adjusted EBITDA of $84.0 million, an increase of 31%.3 * Net debt/adjusted EBITDA (last 12 months) of 1.2x, the lowest in 9 years since the issuance of Hecla's prior Senior Notes.4 * Near record-setting quarter in Hecla's 130-year history with the 2nd best revenues, gross profit, cash provided by operations, and adjusted EBITDA. * Strong balance sheet with over $400 million of available liquidity. * Gold production guidance increased and silver cost guidance reduced.

"Despite the continuing pandemic, Hecla had near record results across a number of metrics improving on the consistent performance of the past two years," said Phillips S. Baker, Jr., Hecla's President and CEO. "We generated over $54 million of free cash flow due to a combination of lower treatment charges, increasing throughput and recoveries, and higher prices. Our American silver mines produce more than 40% of all the silver mined in the United States and with silver being important for the transformation to renewable energy, electric vehicles and 5G, Hecla's growing silver production and low costs make it well-positioned for even better results in the future."

**All comparisons to the second quarter of 2020.

FINANCIAL OVERVIEW

Second Quarter Ended Six Months Ended

HIGHLIGHTS June 30, June 30, 2020 June 30, June 30, 2020 2021 2021

FINANCIAL DATA

Sales (000) $ 217,983 $ 166,355 $ 428,835 $ 303,280

Gross profit (000) $ 59,260 $ 34,079 $ 124,072 $ 45,451

Income (loss) applicableto common shareholders $ 647 $ (14,166 ) $ 19,480 $ (31,489 ) (000)

Basic and diluted income(loss) per common share 0.1 (3.0 ) 3.6 (6.0 ) (in cents)

Cash provided byoperating activities $ 86,304 $ 37,526 $ 124,240 $ 42,453 (000)

Net income applicable to common shareholders for the second quarter 2021 was $0.6 million, or $0.00 per share, compared to net loss applicable to common shareholders of $14.2 million, or $(0.03) per share, for the same period in 2020. The improved second quarter result compared to the previous year was mainly due to the following items:

* Higher prices for all metals with realized silver and zinc prices up approximately 50%. * Silver and lead production nearly doubled at Lucky Friday. * Greens Creek and Lucky Friday generated $42.8 million more gross profit. * Ramp-up costs decreased by $3.8 million due primarily to Lucky Friday's return to full production starting in the fourth quarter of 2020. * Lower interest expense by $1.6 million due to reduced debt, as no amounts were drawn on our revolving credit facility during the second quarter of 2021. * Income and mining tax benefits of $4.8 million compared to an income tax provision of $0.6 million.

These improvements were partially offset by:

* Lower gross profit at Nevada Operations from a $9.4 million non-cash adjustment of stockpiled inventory to market value. * Higher costs at Casa Berardi driven by costs associated with higher volumes and higher maintenance-related activities. * Loss on metal derivatives contracts of $17.3 million ($13.3 million, non-cash and unrealized) compared to a loss of $14.0 million ($13.4 million, non-cash and unrealized) from increases in zinc and lead prices. * Exploration and pre-development expense increased by $8.7 million due to increased exploration at Midas, San Sebastian, Greens Creek and Casa Berardi, and for drift development to the Hatter Graben area in Nevada. * General and administrative expense increased by $4.1 million due to our higher share price increasing the value of accrued incentive compensation and the issuance of certain shares occurring a quarter earlier than in 2020. * An unrealized loss on investments in other mining companies of $0.8 million compared to a gain of $6.4 million.

Cash provided by operating activities was $86.3 million, $48.8 million higher than in the second quarter of 2020, due mainly to the $25.2 million increase in gross profit and the positive net impact of working capital changes.

Capital expenditures totaled $31.9 million, with $24.3 million spent at the operations compared to $13.7 million in the second quarter of 2020, with the increase primarily due to higher planned expenditures at Casa Berardi of $12.2 million for the period. Expenditures at Lucky Friday and Greens Creek were approximately $6.0 million each. Capital expenditures also included $7.5 million related to royalty repurchases at the Nevada Operations and Casa Berardi during the second quarter of 2021.

Metals Prices

The average realized silver price in the second quarter was $27.14 per ounce, 47% higher than the $18.44 in the second quarter of 2020. The average realized gold price increased 5% to $1,825 per ounce. Average realized lead and zinc prices increased 33% and 52%, respectively.

Three Months Ended Six Months Ended June 30, June 30,

2021 2020 2021 2020

Silver London PM Fix ($/ounce) $ 26.69 $ 16.33 $ 26.49 $ 16.63 -

Realized price per ounce $ 27.14 $ 18.44 $ 26.45 $ 16.75

Gold - London PM Fix ($/ounce) $ 1,816 $ 1,711 $ 1,807 $ 1,647

Realized price per ounce $ 1,825 $ 1,736 $ 1,795 $ 1,658

Lead - LME Final Cash Buyer ($/ $ 0.96 $ 0.76 $ 0.94 $ 0.80 pound)

Realized price per pound $ 1.04 $ 0.78 $ 0.99 $ 0.78

Zinc - LME Final Cash Buyer ($/ $ 1.32 $ 0.89 $ 1.29 $ 0.93 pound)

Realized price per pound $ 1.35 $ 0.89 $ 1.34 $ 0.89

? Realized prices are calculated by dividing gross revenues for each metal (which include the price adjustments and gains and losses on the forward contracts discussed below) by the payable quantities of each metal included in products sold during the period.

Base Metals Forward Sales Contracts

The following table summarizes the quantities of base metals committed under financially settled forward sales contracts, other than provisional hedges (which address changes in prices between shipment and settlement with customers), at June 30, 2021.

Pounds Under Contract Average Price per Pound (in thousands)

Zinc Lead Zinc Lead

Contracts on forecasted sales

2021 settlements 15,708 14,991 $1.24 $0.94

2022 settlements 66,855 50,982 $1.28 $0.96

2023 settlements 76,280 52,250 $1.29 $1.00

2024 settlements 15,046 - $1.33 -

These contracts represent about 45% of the forecasted payable zinc production through 2024 at an average price of $1.28 per pound, and 35% of the forecasted payable lead production through 2023 at an average price of $0.97 per pound.

Foreign Currency Forward Purchase Contracts

The following table summarizes the Canadian dollars the Company has committed to purchase under foreign exchange forward contracts at June 30, 2021, which is roughly 75% of forecasted Canadian dollar direct production costs for the remainder of 2021, 50% for 2022, 30% for 2023 and 20% for 2024:

Currency Under Contract Average Exchange Rate (in thousands of CAD) CAD/USD

2021 settlements 61,026 $1.32

2022 settlements 84,754 $1.31

2023 settlements 52,565 $1.32

2024 settlements 26,446 $1.33

OPERATIONS OVERVIEW

Overview

The following table provides the production summary on a consolidated basis for the second quarter and six months ended June 30, 2021 and 2020:

Second Quarter Ended Six Months Ended

June 30, June 30, June 30, June 30, 2021 2020 2021 2020

PRODUCTION SUMMARY

Silver Ounces produced 3,524,783 3,403,781 6,984,229 6,649,250-

Payable ounces 3,415,464 3,348,639 6,445,490 5,930,918 sold

Gold - Ounces produced 59,139 59,982 111,143 118,774

Payable ounces 47,168 51,398 104,454 108,501 sold

Lead - Tons produced 11,540 8,977 22,244 14,087

Payable tons sold 10,663 8,026 19,331 12,156

Zinc - Tons produced 17,211 17,855 33,318 30,702

Payable tons sold 11,143 11,989 22,170 21,825

The following tables provide a summary of the final production, cost of sales and other direct production costs and depletion, depreciation and amortization (referred to herein as "cost of sales"), cash cost, after by-product credits ("cash cost"), per silver and gold ounce, and all-in sustaining cost, after by-product credits ("AISC"), per silver and gold ounce for the second quarter and six months ended June 30, 2021, with comparisons to the prior year period:

Second LuckyQuarter Greens Creek Friday Casa Berardi Nevada OperationsEnded

June 30, Silver Gold Silver Gold Silver Gold Silver Gold Silver2021

Production 3,524,783 59,139 2,558,447 12,859 913,294 31,333 7,917 14,947 45,125(ounces)

Increase/ 121,002 (843 ) (195,472 ) (245 ) 443,757 577 2,422 156 29,137(decrease)

Cost ofsales $ 83,390 $ 75,333 $ 55,488 $ - $ 27,901 $ 57,340 $ - $ 17,993 $ -(000)

Increase/ $ 10,253 $ 16,194 $ (2,184 ) N/A $ 16,446 $ 11,758 N/A $ 4,436 N/A(decrease)

Cash costper silver $ 0.18 $ 1,254 $ (2.64 ) $ - $ 8.07 $ 1,199 $ - $ 1,369 $ -or goldounce ^5

Increase/ $ (4.79 ) $ 408 $ (7.83 ) N/A $ - $ 280 N/A $ 675 N/A(decrease)

AISC persilver or $ 7.54 $ 1,419 $ 0.68 $ - $ 14.10 $ 1,434 $ - $ 1,386 $ -gold ounce^6

Increase/ $ (1.79 ) $ 442 $ (6.43 ) N/A $ - $ 357 N/A $ 617 N/A(decrease)

Six Months Ended

Greens Creek

Lucky Friday

Casa Berardi

Nevada Operations

June 30, 2021

Silver

Gold

Silver

Gold

Silver

Gold

Silver

Gold

Silver

Production (ounces)

6,984,229

111,143

5,143,317

26,125

1,777,195

67,523

18,592

17,495

45,125

Increase/(decrease)

334,979

(7,631

)

(386,309

)

748

1,211,910

10,015

7,163

(14,261

)

7,682

Cost of sales (000)

$

159,459

$

145,304

$

108,668

$

-

$

50,696

$

119,856

$

-

$

25,448

$

-

Increase/(decrease)

$

26,008

$

20,926

$

1,815

N/A

$

36,409

$

25,949

N/A

$

(5,023

)

N/A

Cash cost per silver or gold ounce 5

$

0.79

$

1,161

$

(1.65

)

$

-

$

7.85

$

1,106

$

-

$

1,371

$

-

Increase/(decrease)

$

(4.59

)

$

209

$

(7.06

)

N/A

$

-

$

25

N/A

$

655

N/A

AISC per silver or gold ounce6

$

7.38

$

1,357

$

1.14

$

-

$

14.17

$

1,347

$

-

$

1,393

$

-

Increase/(decrease)

$

(2.72

)

$

222

$

(6.37

)

N/A

$

-

$

20

N/A

$

606

N/A

Greens Creek Mine - Alaska

The Greens Creek Mine produced 2.6 million ounces of silver and 12,859 ounces of gold with the mill operating at an average of 2,362 tons per day (tpd) marking another quarter of consistently strong performance. The decrease in silver production compared to the second quarter of 2020 was due to planned lower grades resulting from mine sequencing. Compared to 2020, cost of sales decreased by $2.2 million and the per ounce silver cash cost and AISC decreased by $7.83 and $6.43, respectively, due to higher by-products credits resulting from higher by-product prices, lower treatment costs from favorable changes in smelter terms and lower production costs, driven partially by lower COVID-19 related costs.5,6

The Company's estimated 2021 silver production of 9.5 - 10.2 million ounces is unchanged and gold production increased from 40 - 43 thousand ounces to 43 - 45 thousand ounces. The estimate for 2021 cost of sales has been updated to $222 million. Estimated cash cost and AISC, each per silver ounce has been updated to ($1.00)-$1.00 and $3.25-$4.00, respectively, with lower costs due to anticipated higher by-product credits.5,6

Casa Berardi Mine - Quebec

At the Casa Berardi Mine, 31,333 ounces of gold were produced compared to 30,756 ounces in the second quarter of 2020 due to higher mill throughput which was partially offset by lower grades. The mill operated at an average of 4,117 tpd, which was 33% higher than the prior year period. The increase in cost of sales was due to higher throughput, mill contractor costs related to maintenance and optimization activities, and underground maintenance costs resulting from repairs and replacements of major components for the production fleet. The increase in cash cost and AISC per gold ounce for the second quarter of 2021 compared to 2020 was the result of the higher cost of sales, with the increase in AISC also resulting from higher sustaining capital spending.

In the 160 pit, 1.4 million tons of overburden were removed during the quarter. Ore from that pit is expected to start being mined and processed in Q4 2021, concurrent with the processing of the last of the East Mine Crown Pillar pit ore.

The Company's estimated 2021 gold production has been increased from 125 - 128 thousand ounces to 128 - 132 thousand ounces. The estimate for 2021 cost of sales has been updated to $220 million. Estimated cash cost and AISC, each per gold ounce has been updated from $900-$975 and $1,185-$1,275 to $1,000-$1,125 and $1,200-$1,325, respectively.5,6

Lucky Friday Mine - Idaho

At the Lucky Friday Mine, 0.9 million ounces of silver were produced in the quarter, an increase of 95% compared to the second quarter of 2020, with the mine at full production. The mill operated at an average of 906 tpd. We continue to test and optimize new mining methods to better manage seismicity and potentially increase productivity.

The cost of sales for the second quarter was $27.9 million, and the cash cost per silver ounce was $8.07. AISC was $14.10 per silver ounce.5,6

The Company's estimated 2021 silver production of 3.4 - 3.8 million ounces is unchanged. The estimate for 2021 cost of sales has been updated to $103 million. Estimated cash cost and AISC, each per silver ounce, has been updated to $7.60-$8.50 and $14.25-$16.25, respectively.5,6

Nevada Operations

At the Nevada operations, 14,947 ounces of gold and 45,125 ounces of silver were produced from processing previously stockpiled ore, including oxide material processed at the Midas mill and a bulk sample of refractory material processed at a third-party roaster facility. Total cost of sales for the second quarter was $18.0 million which included a $9.4 million write-down in the value of stockpile inventory to net realizable value due to lower than anticipated grades. Cash cost and AISC per gold ounce were $1,369 and $1,386, respectively, in the second quarter of 2021.5,6 The increase over the prior year period was due primarily to costs related to the ore stockpile inventory that was mined in previous periods and processed in the current period.

With processing of the oxide material complete, the Fire Creek Mine and Midas mill were placed on care and maintenance during the quarter. In the second half of 2021, approximately 10,000 tons of refractory material is expected to be processed as a test at a third-party autoclave facility. The ounces from this third-party processing are anticipated to be recognized as production at that time. Those ounces and any remaining finished goods inventory are expected to be sold in the second half of 2021. Pre-development for the Hatter Graben area at Hollister and exploration at Midas are ongoing.

EXPLORATION

Exploration expenses were $8.4 million for the second quarter, an increase of $6.4 million compared to the second quarter of 2020 primarily due to increased activity and focus on the Green Racer Sinter discovery at Midas and increased activity at Greens Creek, Casa Berardi, San Sebastian, Heva-Hosco and Kinskuch. Exploration guidance was increased to $40 million earlier in the quarter. An update of the exploration program will be provided later in the third quarter.

PRE-DEVELOPMENT

Pre-development spending was $2.9 million for the quarter, compared to $0.6 million for the second quarter of 2020. The increase over the prior year period is principally due to development of the decline to allow drilling of the Hatter Graben, which commenced late in the first quarter of 2021. Exploration drilling is expected in the third quarter. Pre-development guidance was increased to $8.5 million earlier in the quarter.

DIVIDENDS

Common

On August 4, 2021, the Board of Directors declared a quarterly cash dividend of $0.01125 per share of common stock, consisting of $0.00375 per share for the minimum dividend component and $0.0075 per share for the silver-linked dividend component. The common dividend is payable on or about September 3, 2021, to shareholders of record on August 23, 2021. The realized silver price was $27.14 in the second quarter satisfying the criteria for the silver-linked dividend component of the Company's dividend policy.

Preferred

The Board of Directors declared a quarterly cash dividend of $0.875 cent per share on the outstanding shares of Series B Cumulative Convertible Preferred Stock, payable on or about October 1, 2021, to shareholders of record on September 15, 2021.

2021 ESTIMATES7

The Company has updated its guidance for annual production, cost and expenditures as follows:

2021 Production Outlook

Six Months Greens Creek Lucky Casa Berardi Nevada OperationsEnded Friday

June 30, Silver Gold Silver Gold Silver Gold Silver Gold Silver2021

Production 6,984,229 111,143 5,143,317 26,125 1,777,195 67,523 18,592 17,495 45,125(ounces)

Increase/ 334,979 (7,631 ) (386,309 ) 748 1,211,910 10,015 7,163 (14,261 ) 7,682(decrease)

Cost ofsales $ 159,459 $ 145,304 $ 108,668 $ - $ 50,696 $ 119,856 $ - $ 25,448 $ -(000)

Increase/ $ 26,008 $ 20,926 $ 1,815 N/A $ 36,409 $ 25,949 N/A $ (5,023 ) N/A(decrease)

Cash costper silver $ 0.79 $ 1,161 $ (1.65 ) $ - $ 7.85 $ 1,106 $ - $ 1,371 $ -or goldounce ^5

Increase/ $ (4.59 ) $ 209 $ (7.06 ) N/A $ - $ 25 N/A $ 655 N/A(decrease)

AISC persilver or $ 7.38 $ 1,357 $ 1.14 $ - $ 14.17 $ 1,347 $ - $ 1,393 $ -gold ounce^6

Increase/ $ (2.72 ) $ 222 $ (6.37 ) N/A $ - $ 20 N/A $ 606 N/A(decrease)

Greens Creek Mine - Alaska

The Greens Creek Mine produced 2.6 million ounces of silver and 12,859 ounces of gold with the mill operating at an average of 2,362 tons per day (tpd) marking another quarter of consistently strong performance. The decrease in silver production compared to the second quarter of 2020 was due to planned lower grades resulting from mine sequencing. Compared to 2020, cost of sales decreased by $2.2 million and the per ounce silver cash cost and AISC decreased by $7.83 and $6.43, respectively, due to higher by-products credits resulting from higher by-product prices, lower treatment costs from favorable changes in smelter terms and lower production costs, driven partially by lower COVID-19 related costs.5,6

The Company's estimated 2021 silver production of 9.5 - 10.2 million ounces is unchanged and gold production increased from 40 - 43 thousand ounces to 43 - 45 thousand ounces. The estimate for 2021 cost of sales has been updated to $222 million. Estimated cash cost and AISC, each per silver ounce has been updated to ($1.00)-$1.00 and $3.25-$4.00, respectively, with lower costs due to anticipated higher by-product credits.5,6

Casa Berardi Mine - Quebec

At the Casa Berardi Mine, 31,333 ounces of gold were produced compared to 30,756 ounces in the second quarter of 2020 due to higher mill throughput which was partially offset by lower grades. The mill operated at an average of 4,117 tpd, which was 33% higher than the prior year period. The increase in cost of sales was due to higher throughput, mill contractor costs related to maintenance and optimization activities, and underground maintenance costs resulting from repairs and replacements of major components for the production fleet. The increase in cash cost and AISC per gold ounce for the second quarter of 2021 compared to 2020 was the result of the higher cost of sales, with the increase in AISC also resulting from higher sustaining capital spending.

In the 160 pit, 1.4 million tons of overburden were removed during the quarter. Ore from that pit is expected to start being mined and processed in Q4 2021, concurrent with the processing of the last of the East Mine Crown Pillar pit ore.

The Company's estimated 2021 gold production has been increased from 125 - 128 thousand ounces to 128 - 132 thousand ounces. The estimate for 2021 cost of sales has been updated to $220 million. Estimated cash cost and AISC, each per gold ounce has been updated from $900-$975 and $1,185-$1,275 to $1,000-$1,125 and $1,200-$1,325, respectively.5,6

Lucky Friday Mine - Idaho

At the Lucky Friday Mine, 0.9 million ounces of silver were produced in the quarter, an increase of 95% compared to the second quarter of 2020, with the mine at full production. The mill operated at an average of 906 tpd. We continue to test and optimize new mining methods to better manage seismicity and potentially increase productivity.

The cost of sales for the second quarter was $27.9 million, and the cash cost per silver ounce was $8.07. AISC was $14.10 per silver ounce.5,6

The Company's estimated 2021 silver production of 3.4 - 3.8 million ounces is unchanged. The estimate for 2021 cost of sales has been updated to $103 million. Estimated cash cost and AISC, each per silver ounce, has been updated to $7.60-$8.50 and $14.25-$16.25, respectively.5,6

Nevada Operations

At the Nevada operations, 14,947 ounces of gold and 45,125 ounces of silver were produced from processing previously stockpiled ore, including oxide material processed at the Midas mill and a bulk sample of refractory material processed at a third-party roaster facility. Total cost of sales for the second quarter was $18.0 million which included a $9.4 million write-down in the value of stockpile inventory to net realizable value due to lower than anticipated grades. Cash cost and AISC per gold ounce were $1,369 and $1,386, respectively, in the second quarter of 2021.5,6 The increase over the prior year period was due primarily to costs related to the ore stockpile inventory that was mined in previous periods and processed in the current period.

With processing of the oxide material complete, the Fire Creek Mine and Midas mill were placed on care and maintenance during the quarter. In the second half of 2021, approximately 10,000 tons of refractory material is expected to be processed as a test at a third-party autoclave facility. The ounces from this third-party processing are anticipated to be recognized as production at that time. Those ounces and any remaining finished goods inventory are expected to be sold in the second half of 2021. Pre-development for the Hatter Graben area at Hollister and exploration at Midas are ongoing.

EXPLORATION

Exploration expenses were $8.4 million for the second quarter, an increase of $6.4 million compared to the second quarter of 2020 primarily due to increased activity and focus on the Green Racer Sinter discovery at Midas and increased activity at Greens Creek, Casa Berardi, San Sebastian, Heva-Hosco and Kinskuch. Exploration guidance was increased to $40 million earlier in the quarter. An update of the exploration program will be provided later in the third quarter.

PRE-DEVELOPMENT

Pre-development spending was $2.9 million for the quarter, compared to $0.6 million for the second quarter of 2020. The increase over the prior year period is principally due to development of the decline to allow drilling of the Hatter Graben, which commenced late in the first quarter of 2021. Exploration drilling is expected in the third quarter. Pre-development guidance was increased to $8.5 million earlier in the quarter.

DIVIDENDS

Common

On August 4, 2021, the Board of Directors declared a quarterly cash dividend of $0.01125 per share of common stock, consisting of $0.00375 per share for the minimum dividend component and $0.0075 per share for the silver-linked dividend component. The common dividend is payable on or about September 3, 2021, to shareholders of record on August 23, 2021. The realized silver price was $27.14 in the second quarter satisfying the criteria for the silver-linked dividend component of the Company's dividend policy.

Preferred

The Board of Directors declared a quarterly cash dividend of $0.875 cent per share on the outstanding shares of Series B Cumulative Convertible Preferred Stock, payable on or about October 1, 2021, to shareholders of record on September 15, 2021.

2021 ESTIMATES7

The Company has updated its guidance for annual production, cost and expenditures as follows:

2021 Production Outlook

Silver Production Gold Production Silver Equivalent Gold Equivalent (Moz) (Koz) (Moz) (Koz)

Previous Current Previous Current Previous Current Previous Current

Greens 9.5-10.2 9.5-10.2 40-43 43-45 20.5-21.5 22-23 227-237 244-253.5Creek *

Lucky 3.4-3.8 3.4-3.8 N/A N/A 6.2-6.4 6.2-6.4 67-70 67-70Friday *

Casa N/A N/A 125-128 128-132 11.5-11.7 11.7-12.1 125-128 128-132Berardi

Nevada N/A N/A 20-22 20-21 1.8-2.0 1.8-1.9 20-22 20-21Operations

Total^7 12.9-14.0 12.9-14.0 185-193 191-198 40.0-41.6 41.7-43.3 439-457 459-476.5

* Equivalent ounces include Lead and Zinc production

2021 Cost Outlook

Cost of Sales Cash cost, after by-product AISC, after by-product (millions) credits, per silver/gold credits, per produced ounce^5 silver/gold ounce^6

Previous Current Previous Current Previous Current

Greens $213 $222 $1.50-$2.25 ($1.00)-$1.00 $6.50-$7.25 $3.25-$4.00Creek

Lucky $91 $103 $7.75-$9.75 $7.50-$8.50 $13.75-$16.50 $14.25-$16.25Friday

Total $304 $325 $3.25-$4.25 $1.00-$2.00 $10.75-$12.50 $9.00-$11.00Silver

Casa $212 $220 $900-$975 $1,000-$1,125 $1,185-$1,275 $1,200-$1,325Berardi

Nevada $41 $43 $1,300-$1,425 $1,300-$1,425 $1,385-$1,525 $1,385-$1,525Operations

Total Gold $253 $263 $950-$1,050 $1,050-$1,200 $1,200-$1,300 $1,250-$1,350

2021 Capital and Exploration Outlook

(millions)

Previous Current

Capital expenditures $110 $120

Exploration expenditures (including Corporate Development) $40 $40

Pre-development expenditures $8.5 $8.5

CONFERENCE CALL, WEBCAST AND ONE-ON-ONE CALLS

A conference call and webcast will be held Thursday, August 5, at 10:00 a.m. Eastern Time to discuss these results. We recommend that you dial in at least 10 minutes before the call is due to commence. You may join the conference call by dialing toll-free 1-833-350-1380 or for international dialing 1-647-689-6934. The Participant Code is 8545015 and must be provided when dialing in.

Hecla's live and archived webcast can be accessed below or at www.hecla-mining.com under Investors/Events & Webcasts.

Webcast URL: https://event.on24.com/wcc/r/3190524/9E67287A786A4FA2AC9BAFEDA3EB30E7

One-on one calls are available from 3:00 p.m. to 5:00 p.m. ET. Hecla invites shareholders, investors, and other interested parties to schedule a personal, 30-minute virtual meeting (video or telephone) with a member of senior management to discuss operations, exploration, or ESG matters. Click on the link below to schedule a call (or copy and paste the link into your web browser). You can select a topic once you have entered the meeting calendar. If you are unable to book a time, either due to high demand or for other reasons, please reach out to Russell Lawlar, Sr. Vice President - CFO and Treasurer at rlawlar@hecla-mining.com or 208-769-4130.

One-on-One Meeting URL: https://calendly.com/2021-august-vie

ABOUT HECLA

Founded in 1891, Hecla Mining Company (NYSE:HL) is the largest silver producer in the United States. In addition to operating mines in Alaska, Idaho, and Quebec, Canada, the Company owns a number of exploration and pre-development projects in world-class silver and gold mining districts throughout North America.

NOTES

Non-GAAP Financial Measures

Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by generally accepted accounting principles in the United States (GAAP). These measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

(1) Free cash flow is a non-GAAP measure calculated as cash provided by operating activities less additions to properties, plants and equipment.

(2) Adjusted net income (loss) applicable to common stockholders is a non-GAAP measurement, a reconciliation of which to net income (loss) applicable to common stockholders, the most comparable GAAP measure, can be found at the end of the release. Adjusted net income (loss) is a measure used by management to evaluate the Company's operating performance but should not be considered an alternative to net income (loss) as defined by GAAP. They exclude certain impacts which are of a nature which we believe are not reflective of our underlying performance. Management believes that adjusted net income (loss) per common share provides investors with the ability to better evaluate our underlying operating performance.

(3) Adjusted EBITDA is a non-GAAP measurement, a reconciliation of which to net income (loss), the most comparable GAAP measure, can be found at the end of the release. Adjusted EBITDA is a measure used by management to evaluate the Company's operating performance but should not be considered an alternative to net income (loss), or cash provided by operating activities as those terms are defined by GAAP, and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. In addition, the Company may use it when formulating performance goals and targets under its incentive program.

(4) Net debt to adjusted EBITDA is a non-GAAP measurement, a reconciliation of adjusted EBITDA and net debt to the closest GAAP measurements of net income (loss) and debt can be found at the end of the release. It is an important measure for management to measure relative indebtedness and the ability to service the debt relative to its peers. It is calculated as total debt outstanding less total cash on hand divided by adjusted EBITDA.

(5) Cash cost, after by-product credits, per silver or gold ounce is a non-GAAP measurement, a reconciliation of which to cost of sales and other direct production costs and depreciation, depletion and amortization (sometimes referred to as "cost of sales" in this release), can be found at the end of the release. It is an important operating statistic that management utilizes to measure each mine's operating performance. It also allows the benchmarking of performance of each mine versus those of our competitors. As a primary silver mining company, management also uses cash cost, after by-product credits, per silver ounce on an aggregate basis - aggregating the Greens Creek, Lucky Friday and San Sebastian mines - to compare performance with that of other primary silver mining companies. Gold, lead and zinc produced have been treated as by-product credits in calculating silver costs per ounce. With regard to Casa Berardi and Nevada Operations, management uses cash cost, after by-product credits, per gold ounce to compare its performance with other gold mines with a by-product credit recognized for the value of their silver production. Similarly, the statistic is useful in identifying acquisition and investment opportunities as it provides a common tool for measuring the financial performance of other mines with varying geologic, metallurgical and operating characteristics. In addition, the Company may use it when formulating performance goals and targets under its incentive program.

(6) All in sustaining cost (AISC), after by-product credits, is a non-GAAP measurement, a reconciliation of which to cost of sales and other direct production costs and depreciation, depletion and amortization, the closest GAAP measurement, can be found in the end of the release. AISC, after by-product credits, includes cost of sales and other direct production costs, expenses for reclamation and exploration at the mine sites, corporate exploration related to sustaining operations, and all site sustaining capital costs. AISC, after by-product credits, is calculated net of depreciation, depletion, and amortization and by-product credits.

Current GAAP measures used in the mining industry, such as cost of goods sold, do not capture all the expenditures incurred to discover, develop and sustain silver and gold production. Management believes that AISC is a non-GAAP measure that provides additional information to management, investors and analysts to help in the understanding of the economics of our operations and performance compared to other producers and in the investor's visibility by better defining the total costs associated with production. Similarly, the statistic is useful in identifying acquisition and investment opportunities as it provides a common tool for measuring the financial performance of other mines with varying geologic, metallurgical and operating characteristics. In addition, the Company may use it when formulating performance goals and targets under its incentive program.

Other

(7) Calculations for 2021 include silver, gold, lead and zinc production from Greens Creek, San Sebastian, Casa Berardi and Nevada Operations converted using Au $1,525/oz, Ag $17/oz, Zn $1.00/lb, and Pb $0.85/lb.

Numbers may be rounded.

Cautionary Statements to Investors on Forward-Looking Statements

This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbor created by such sections and other applicable laws, including Canadian securities laws. When a forward-looking statement expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, such statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by the forward-looking statements. Forward-looking statements often address our expected future business and financial performance and financial condition and often contain words such as "anticipate," "intend," "plan," "will," "could," "would," "estimate," "should," "expect," "believe," "project," "target," "indicative," "preliminary," "potential" and similar expressions. Forward-looking statements in this news release may include, without limitation: (i) new mining methods being tested at Lucky Friday to better manage seismicity and potentially increase productivity; (ii) Green Creek's estimated 2021 silver production, gold production, cost of sales, cash cost, and AISC; (iii) Casa Berardi's estimated 2021 gold production, cost of sales, cash cost, and AISC; (iv) Ore from the 160 pit at Casa Berardi is expected to start being mines and processed in Q4 2001, concurrent with the processing of the last of the East Mine Crown Pillar pit ore; (v) Lucky Friday's estimated 2021 silver production, cost of sales, cash cost and AISC; (vi) expectation of the Company to process 10,000 tons of refractory ore from the Nevada operations at a third-party facility in the second half of the year with production and remaining finished goods inventory to be sold at that time; and (vii) Company-wide estimates of future production, sales, costs of sales, cash cost, after by-product credits, AISC, after by-product credits, as well as estimated spending on capital, exploration and pre-development for 2021. The material factors or assumptions used to develop such forward-looking statements or forward-looking information include that the prices assumed in the calculation of cash cost and ASIC will occur and the Company's plans for development and production will proceed as expected and will not require revision as a result of risks or uncertainties, whether known, unknown or unanticipated, to which the Company's operations are subject.

Estimates or expectations of future events or results are based upon certain assumptions, which may prove to be incorrect, which could cause actual results to differ from forward-looking statements. Such assumptions, include, but are not limited to: (i) there being no significant change to current geotechnical, metallurgical, hydrological and other physical conditions; (ii) permitting, development, operations and expansion of the Company's projects being consistent with current expectations and mine plans; (iii) political/regulatory developments in any jurisdiction in which the Company operates being consistent with its current expectations; (iv) the exchange rate for the USD/CAD and USD/MXN, being approximately consistent with current levels; (v) certain price assumptions for gold, silver, lead and zinc; (vi) prices for key supplies being approximately consistent with current levels; (vii) the accuracy of our current mineral reserve and mineral resource estimates; (viii) the Company's plans for development and production will proceed as expected and will not require revision as a result of risks or uncertainties, whether known, unknown or unanticipated; (ix) counterparties performing their obligations under hedging instruments and put option contracts; (x) sufficient workforce is available and trained to perform assigned tasks; (xi) weather patterns and rain/snowfall within normal seasonal ranges so as not to impact operations; (xii) relations with interested parties, including Native Americans, remain productive; (xiii) economic terms can be reached with third-party mill operators who have capacity to process our ore; (xiv) maintaining availability of water rights; (xv) factors do not arise that reduce available cash balances; and (xvi) there being no material increases in our current requirements to post or maintain reclamation and performance bonds or collateral related thereto.

In addition, material risks that could cause actual results to differ from forward-looking statements include, but are not limited to: (i) gold, silver and other metals price volatility; (ii) operating risks; (iii) currency fluctuations; (iv) increased production costs and variances in ore grade or recovery rates from those assumed in mining plans; (v) community relations; (vi) conflict resolution and outcome of projects or oppositions; (vii) litigation, political, regulatory, labor and environmental risks; (viii) exploration risks and results, including that mineral resources are not mineral reserves, they do not have demonstrated economic viability and there is no certainty that they can be upgraded to mineral reserves through continued exploration; (ix) the failure of counterparties to perform their obligations under hedging instruments; (x) we take a material impairment charge on our Nevada operations; (xi) we are unable to remain in compliance with all terms of the credit agreement in order to maintain continued access to the revolver, and (xii) we are unable to refinance the maturing senior notes. For a more detailed discussion of such risks and other factors, see the Company's 2020 Form 10-K, filed on February 18, 2021, with the Securities and Exchange Commission (SEC), as well as the Company's other SEC filings. The Company does not undertake any obligation to release publicly revisions to any "forward-looking statement," including, without limitation, outlook, to reflect events or circumstances after the date of this news release or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. Investors should not assume that any lack of update to a previously issued "forward-looking statement" constitutes a reaffirmation of that statement. Continued reliance on "forward-looking statements" is at investors' own risk.

HECLA MINING COMPANY

Condensed Consolidated Statements of Operations

(dollars and shares in thousands, except per share amounts - unaudited)

Second Quarter Ended Six Months Ended

June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020

Sales of $ 217,983 $ 166,355 $ 428,835 $ 303,280 products

Cost of salesand otherdirect 110,320 92,853 207,029 178,740 productioncosts

Depreciation,depletion and 48,403 39,423 97,734 79,089 amortization

158,723 132,276 304,763 257,829

Gross profit 59,260 34,079 124,072 45,451



Other operating expenses:

General and 11,104 6,979 19,111 15,918 administrative

Exploration 8,367 1,962 14,318 4,492

Pre-development 2,874 563 3,613 1,098

Other operating 3,643 1,445 7,282 2,365 expense

Provision forclosedoperations and 1,024 1,037 4,733 1,553 environmentalmatters

Ramp-up andsuspension 5,786 9,572 10,104 22,568 costs

Foundation - 1,970 - 1,970 grant

32,798 23,528 59,161 49,964

Income (loss) 26,462 10,551 64,911 (4,513 ) from operations

Other income (expense):

Gain onexchange of - - 1,158 - investments

Unrealized(loss) gain on (750 ) 6,409 (4,256 ) 5,431 investments

(Loss) onderivative (17,313 ) (14,002 ) (16,840 ) (6,109 ) contracts

Net foreignexchange (loss) (1,907 ) (3,205 ) (3,971 ) 3,431 gain

Other expense (278 ) (1,326 ) (439 ) (1,749 )

Interest (10,271 ) (11,829 ) (21,015 ) (28,140 ) expense

(30,519 ) (23,953 ) (45,363 ) (27,136 )

(Loss) incomebefore income (4,057 ) (13,402 ) 19,548 (31,649 ) and miningtaxes

Income andmining tax 4,842 (626 ) 208 436 (provision)benefit

Net income 785 (14,028 ) 19,756 (31,213 ) (loss)

Preferred stock (138 ) (138 ) (276 ) (276 ) dividends

Income (loss)applicable to $ 647 $ (14,166 ) $ 19,480 $ (31,489 ) commonshareholders

Basic anddiluted income(loss) percommon share 0.1 (3.0 ) 3.6 (6.0 ) after preferreddividends (incents)

Weightedaverage numberof common 535,531 525,243 534,819 524,218 sharesoutstanding -basic

Weightedaverage numberof common 542,262 525,243 541,468 524,218 sharesoutstanding -diluted

HECLA MINING COMPANYCondensed Consolidated Statements of Cash Flows

(dollars in thousands - unaudited)

Second Quarter Ended Six Months Ended

June 30, June 30, June 30, June 30, 2021 2020 2021 2020

OPERATING ACTIVITIES

Net income (loss) $ 785 $ (14,028 ) $ 19,756 $ (31,213 )

Non-cash elements included in net income (loss):

Depreciation, depletion and 48,575 42,555 98,121 84,185 amortization

Write-down to stockpile 6,242 - 6,431 - inventory

Gain on sale of investments - - (1,158 ) -

Unrealized loss (gain) on 750 (6,409 ) 4,256 (5,431 )investments

Provision for reclamation and 1,654 1,545 6,183 3,093 closure costs

Stock compensation 2,802 1,209 3,302 2,428

Deferred income taxes (8,594 ) (1,913 ) (8,562 ) (5,165 )

Amortization of loanorigination fees and loss on 379 484 918 2,624 extinguishment of debt

Loss on derivative contracts 13,078 21,625 2,116 11,188

Foreign exchange loss (gain) 2,700 4,341 4,455 (3,725 )

Foundation grant - 1,970 - 1,970

Other non-cash items, net 145 677 153 573

Change in assets and liabilities:

Accounts receivable (6,768 ) (16,005 ) (9,432 ) (6,050 )

Inventories 3,788 2,022 5,719 (4,580 )

Other current and non-current 2,597 1,718 4,125 (924 )assets

Accounts payable and accrued 18,056 (3,536 ) (6,489 ) (15,415 )liabilities

Accrued payroll and related 2,644 (4,077 ) (5,351 ) 5,418 benefits

Accrued taxes (3,030 ) 2,580 (999 ) 3,912

Accrued reclamation and closurecosts and other non-current 501 2,768 696 (435 )liabilities

Cash provided by operating 86,304 37,526 124,240 42,453 activities



INVESTING ACTIVITIES

Additions to properties,plants, equipment and mineral (31,898 ) (10,819 ) (53,311 ) (30,689 )interests

Proceeds from disposition ofproperties, plants and 112 46 131 200 equipment

Purchases of investments - (637 ) - (637 )

Net cash used in investing (31,786 ) (11,410 ) (53,180 ) (31,126 )activities



FINANCING ACTIVITIES

Acquisition of treasury shares (4,525 ) (2,745 ) (4,525 ) (2,745 )

Dividends paid to common (6,027 ) (1,318 ) (10,715 ) (2,622 )shareholders

Dividends paid to preferred (138 ) (138 ) (276 ) (276 )shareholders

Credit facility fees paid - (93 ) (82 ) (551 )

Borrowings on debt - - - 679,500

Repayments of debt - (160,000 ) - (666,500 )

Repayments of finance leases (1,889 ) (1,556 ) (3,770 ) (2,840 )

Net cash (used in) provided by (12,579 ) (165,850 ) (19,368 ) 3,966 financing activities

Effect of exchange rates on (195 ) (58 ) (28 ) (1,794 )cash

Net increase (decrease) incash, cash equivalents and 41,744 (139,792 ) 51,664 13,499 restricted cash

Cash, cash equivalents andrestricted cash at beginning of 140,803 216,768 130,883 63,477 period

Cash, cash equivalents andrestricted cash at end of $ 182,547 $ 76,976 $ 182,547 $ 76,976 period

Supplemental disclosure of cash flow information:

Cash paid for interest $ 93 $ 1,853 $ 18,499 $ 15,837

Cash paid for income and mining $ 6,271 $ 2,706 $ 9,469 $ 5,345 taxes

HECLA MINING COMPANYCondensed Consolidated Balance Sheets

(dollars and shares in thousands - unaudited)

June 30, 2021 December 31, 2020

ASSETS

Current assets:

Cash and cash equivalents $ 181,494 $ 129,830

Accounts receivable:

Trade 41,311 27,864

Other, net 9,334 11,329

Inventories 82,962 96,544

Derivative assets 5,879 3,470

Other current assets 10,198 15,644

Total current assets 331,178 284,681

Investments 11,083 15,148

Restricted cash 1,053 1,053

Properties, plants, equipment and mineral 2,305,359 2,345,219 interests, net

Operating lease right-of-use asset 8,902 10,628

Deferred income taxes 5,090 2,912

Derivative assets 4,852 4,558

Other non-current assets 3,721 3,525

Total assets $ 2,671,238 $ 2,667,724



LIABILITIES

Current liabilities:

Accounts payable and accrued liabilities $ 62,183 $ 68,516

Accrued payroll and related benefits 24,270 31,807

Accrued taxes 4,838 8,349

Finance leases 6,223 6,491

Operating leases 2,540 3,008

Other current liabilities 21,353 26,032

Accrued reclamation and closure costs 7,994 5,582

Total current liabilities 129,401 149,785

Finance leases 8,905 9,274

Operating leases 6,368 7,634

Accrued reclamation and closure costs 112,651 110,466

Long-term debt 508,611 507,242

Deferred tax liability 143,181 144,330

Pension liability 30,237 44,144

Other non-current liabilities 11,202 4,364

Total liabilities 950,556 977,239



SHAREHOLDERS' EQUITY

Preferred stock 39 39

Common stock 136,065 134,629

Capital surplus 2,024,645 2,003,576

Accumulated deficit (382,609 ) (391,374 )

Accumulated other comprehensive loss (29,437 ) (32,889 )

Treasury stock (28,021 ) (23,496 )

Total shareholders' equity 1,720,682 1,690,485

Total liabilities and shareholders' equity $ 2,671,238 $ 2,667,724

Common shares outstanding 536,823 531,666

HECLA MINING COMPANYProduction Data

Three Months Ended Six Months Ended

June 30, 2021 June 30, June 30, 2021 June 30, 2020 2020

GREENS CREEK UNIT

Tons of ore milled 214,931 215,275 409,011 414,079

Total production cost per $ 171.13 $ 171.03 $ 176.58 $ 178.18 ton

Ore grade milled - Silver 14.52 15.56 15.23 16.19 (oz./ton)

Ore grade milled - Gold 0.081 0.084 0.085 0.084 (oz./ton)

Ore grade milled - Lead (%) 3.14 3.27 3.10 3.20

Ore grade milled - Zinc (%) 7.57 8.16 7.59 7.55

Silver produced (oz.) 2,558,447 2,753,919 5,143,317 5,529,626

Gold produced (oz.) 12,859 13,104 26,125 25,377

Lead produced (tons) 5,627 5,889 10,551 11,087

Zinc produced (tons) 14,610 16,184 27,964 28,671

Cash cost, after by-productcredits, per silver ounce ^ $ (2.64 ) $ 5.19 $ (1.65 ) $ 5.41 1

AISC, after by-productcredits, per silver ounce ^ $ 0.68 $ 7.11 $ 1.14 $ 7.51 1

Capital additions (in $ 6,339 $ 4,501 $ 11,231 $ 10,011 thousands)

LUCKY FRIDAY UNIT

Tons of ore milled 82,442 44,682 163,513 54,901

Total production cost per $ 199.48 $ - $ 188.30 - ton

Ore grade milled - Silver 11.60 10.99 11.39 10.78 (oz./ton)

Ore grade milled - Lead (%) 7.55 7.33 7.53 7.31

Ore grade milled - Zinc (%) 3.44 4.07 3.57 4.03

Silver produced (oz.) 913,294 469,537 1,777,195 565,285

Lead produced (tons) 5,913 3,088 11,693 3,783

Zinc produced (tons) 2,601 1,671 5,354 2,031

Cash cost, after by-productcredits, per silver ounce ^ $ 8.07 $ - $ 7.85 - 1

AISC, after by-productcredits, per silver ounce ^ $ 14.10 $ - $ 14.17 $ - 1

Capital additions (in $ 5,731 $ 4,761 $ 11,643 $ 9,056 thousands)

CASA BERARDI UNIT

Tons of ore milled - 179,217 154,265 366,136 315,202 underground

Tons of ore milled - 195,466 126,155 376,950 296,836 surface pit

Tons of ore milled - total 374,683 280,420 743,086 612,038

Surface tons mined - ore 2,033,403 930,117 4,024,490 2,655,091 and waste

Total production cost per $ 99.36 $ 99.17 $ 99.52 $ 100.07 ton

Ore grade milled - Gold 0.148 0.163 0.162 0.135 (oz./ton) - underground

Ore grade milled - Gold 0.055 0.045 0.059 0.050 (oz./ton) - surface pit

Ore grade milled - Gold 0.100 0.130 0.110 0.115 (oz./ton) - combined

Ore grade milled - Silver 0.03 0.02 0.03 0.02 (oz./ton)

Gold produced (oz.) - 23,441 25,074 51,009 42,655 underground

Gold produced (oz.) - 7,892 5,682 16,514 14,853 surface pit

Gold produced (oz.) - total 31,333 30,756 67,523 57,508

Silver produced (oz.) 7,917 5,495 18,592 11,429

Cash cost, after by-product $ 1,199 $ 919 $ 1,106 $ 1,081 credits, per gold ounce ^1

AISC, after by-product $ 1,434 $ 1,077 $ 1,347 $ 1,327 credits, per gold ounce ^1

Capital additions (in $ 12,153 $ 4,278 $ 26,000 $ 12,784 thousands)

Three Months Ended Six Months Ended

June 30, June 30, 2020 June 30, June 30, 2021 2021 2020

SAN SEBASTIAN

Tons of ore milled - 21,647 - 57,123

Total production cost per ton $ - $ 100.12 $ - $ 148.50

Ore grade milled - Silver (oz./ton) - 7.96 - 9.63

Ore grade milled - Gold (oz./ton) - 0.074 - 0.085

Silver produced (oz.) - 158,842 - 505,467

Gold produced (oz.) - 1,331 - 4,133

Cash cost, after by-product $ - $ 1.14 $ - $ 5.09 credits, per silver ounce ^1

AISC, after by-product credits, per $ - $ 1.85 $ - $ 5.65 silver ounce ^1

Capital additions (in thousands) $ 7 $ (499 ) $ 7 $ 304

NEVADA OPERATIONS

Tons of ore milled 38,947 10,686 55,406 27,984

Total production cost per ton $ 161.50 $ 1,172.66 $ 220.68 $ 892.09

Ore grade milled - Gold (oz./ton) 0.41 1.519 0.343 1.232

Ore grade milled - Silver (oz./ton) 1.24 2.07 0.88 1.7

Gold produced (oz.) 14,947 14,791 17,495 31,756

Silver produced (oz.) 45,125 15,988 45,125 37,443

Cash cost, after by-product $ 1,369 $ 694 $ 1,371 $ 716 credits, per gold ounce ^1

AISC, after by-product credits, per $ 1,386 $ 769 $ 1,393 $ 787 gold ounce ^1

Capital additions (in thousands) $ 77 $ 612 $ 166 $ 1,469

(1) Cash cost, after by-product credits, per ounce and AISC, after by-product credits. per ounce represent non-U.S. Generally Accepted Accounting Principles (GAAP) measurements. A reconciliation of cost of sales and other direct production costs and depreciation, depletion and amortization (GAAP) to cash cost, after by-product credits can be found in the cash cost per ounce reconciliation section of this news release. Gold, lead and zinc produced have been treated as by-product credits in calculating silver costs per ounce. The primary metal produced at Casa Berardi and Nevada Operations is gold, with a by-product credit for the value of silver production.

Non-GAAP Measures

(Unaudited)

Reconciliation of Cost of Sales (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP)

The tables below present reconciliations between the most comparable GAAP measure of cost of sales and other direct production costs and depreciation, depletion and amortization to the non-GAAP measures of Cash Cost, Before By-product Credits, Cash Cost, After By-product Credits, AISC, Before By-product Credits and AISC, After By-product Credits for our operations at the Greens Creek, Lucky Friday, San Sebastian, Casa Berardi and Nevada Operations units for the three- and six-month periods ended June 30, 2021 and 2020.

Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce are measures developed by precious metals companies (including the Silver Institute and the World Gold Council) in an effort to provide a uniform standard for comparison purposes. There can be no assurance, however, that these non-GAAP measures as we report them are the same as those reported by other mining companies.

Cash Cost, After By-product Credits, per Ounce is an important operating statistic that we utilize to measure each mine's operating performance. AISC, After By-product Credits, per Ounce is an important operating statistic that we utilize as a measures of our mines' net cash flow after costs for exploration, pre-development, reclamation, and sustaining capital. Current GAAP measures used in the mining industry, such as cost of goods sold, do not capture all the expenditures incurred to discover, develop and sustain silver and gold production. Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce also allow us to benchmark the performance of each of our mines versus those of our competitors. As a silver and gold mining company, we also use these statistics on an aggregate basis - aggregating the Greens Creek, Lucky Friday and San Sebastian mines - to compare our performance with that of other silver mining companies, and aggregating Casa Berardi and Nevada Operations for comparison to other gold mining companies. Similarly, these statistics are useful in identifying acquisition and investment opportunities as they provide a common tool for measuring the financial performance of other mines with varying geologic, metallurgical and operating characteristics.

Cash Cost, Before By-product Credits and AISC, Before By-product Credits include all direct and indirect operating cash costs related directly to the physical activities of producing metals, including mining, processing and other plant costs, third-party refining expense, on-site general and administrative costs, royalties and mining production taxes. AISC, Before By-product Credits for each mine also includes on-site exploration, reclamation, and sustaining capital costs. AISC, Before By-product Credits for our consolidated silver properties also includes corporate costs for general and administrative expense, reclamation, exploration, and pre-development. By-product credits include revenues earned from all metals other than the primary metal produced at each unit. As depicted in the tables below, by-product credits comprise an essential element of our silver unit cost structure, distinguishing our silver operations due to the polymetallic nature of their orebodies. Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce provide management and investors an indication of operating cash flow, after consideration of the average price, received from production. We also use these measurements for the comparative monitoring of performance of our mining operations period-to-period from a cash flow perspective.

The Casa Berardi, Nevada Operations and combined gold properties information below reports Cash Cost, After By-product Credits, per Gold Ounce and AISC, After By-product Credits, per Gold Ounce for the production of gold, its primary product, and by-product revenues earned from silver, which is a by-product at Casa Berardi and Nevada Operations. Only costs and ounces produced relating to units with the same primary product are combined to represent Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce. Thus, the gold produced at our Casa Berardi and Nevada Operations units is not included as a by-product credit when calculating Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for the total of Greens Creek, Lucky Friday and San Sebastian, our combined silver properties. Similarly, the silver produced at our other three units is not included as a by-product credit when calculating the gold metrics for Casa Berardi and Nevada Operations.

In thousands(except per ounce Three Months Ended June 30, 2021amounts)

Greens Lucky San Corporate Total Creek Friday^(2) Sebastian ^(4) Silver ^(3)

Cost of sales andother directproduction costs $ 55,488 27,901 $ 1 $ 83,390 and depreciation,depletion andamortization

Depreciation,depletion and (14,492 ) (7,402 ) - (21,894 )amortization

Treatment costs 8,924 4,686 - 13,610

Change in product (435 ) (1,596 ) - (2,031 )inventory

Reclamation and (672 ) (325 ) (1 ) (998 )other costs

Cash Cost, BeforeBy-product Credits 48,813 23,264 - 72,077 ^(1)

Reclamation and 847 264 - 1,111 other costs

Sustaining 1,300 - - 450 1,750 exploration

Sustaining capital 6,339 5,244 - - 11,583

General and - - - 11,104 11,104 administrative

AISC, BeforeBy-product Credits 57,299 28,772 - 97,625 ^(1)

By-product credits:

Zinc (26,510 ) (5,093 ) - (31,603 )

Gold (20,438 ) - - (20,438 )

Lead (8,605 ) (10,799 ) $ - (19,404 )

Total By-product (55,553 ) (15,892 ) - (71,445 )credits

Cash Cost, After $ (6,740 ) $ 7,372 $ - $ 632 By-product Credits

AISC, After $ 1,746 $ 12,880 $ - $ 26,180 By-product Credits

Divided by ounces 2,558 913 - 3,471 produced

Cash Cost, BeforeBy-product $ 19.08 $ 25.49 $ - $ 20.76 Credits, per Ounce

By-product credits (21.72 ) (17.42 ) - (20.58 )per ounce

Cash Cost, AfterBy-product $ (2.64 ) $ 8.07 $ - $ 0.18 Credits, per Ounce

AISC, BeforeBy-product $ 22.40 $ 31.52 $ - $ 28.12 Credits, per Ounce

By-product credits (21.72 ) (17.42 ) - (20.58 )per ounce

AISC, AfterBy-product $ 0.68 $ 14.10 $ - $ 7.54 Credits, per Ounce

In thousands (except per ounce amounts) Three months ended June 30, 2021

Casa Nevada Berardi Operations ^ Total Gold (5)

Cost of sales and other directproduction costs and depreciation, $ 57,340 $ 17,993 $ 75,333 depletion and amortization

Depreciation, depletion and amortization (20,910 ) (5,599 ) (26,509 )

Treatment costs 535 1,719 2,254

Change in product inventory 1,015 12,583 13,598

Reclamation and other costs (215 ) (218 ) (433 )

Exclusion of Nevada Operations costs - (4,914 ) (4,914 )

Cash Cost, Before By-product Credits ^ 37,765 21,564 59,329 (1)

Reclamation and other costs 215 218 433

Sustaining exploration 1,103 - 1,103

Sustaining capital 6,064 44 6,108

AISC, Before By-product Credits ^(1) 45,147 21,826 66,973

By-product credits:

Silver (209 ) (1,103 ) (1,312 )

Total By-product credits (209 ) (1,103 ) (1,312 )

Cash Cost, After By-product Credits $ 37,556 $ 20,461 $ 58,017

AISC, After By-product Credits $ 44,938 $ 20,723 $ 65,661

Divided by ounces produced 31 15 46

Cash Cost, Before By-product Credits, $ 1,206 $ 1,443 $ 1,282 per Ounce

By-product credits per ounce (7 ) (74 ) (28 )

Cash Cost, After By-product Credits, per $ 1,199 $ 1,369 $ 1,254 Ounce

AISC, Before By-product Credits, per $ 1,441 $ 1,460 $ 1,447 Ounce

By-product credits per ounce (7 ) (74 ) (28 )

AISC, After By-product Credits, per $ 1,434 $ 1,386 $ 1,419 Ounce

In thousands (except per ounce amounts) Three months ended June 30, 2021

Total Total Gold Total Silver

Cost of sales and other direct productioncosts and depreciation, depletion and $ 83,390 $ 75,333 $ 158,723 amortization

Depreciation, depletion and amortization (21,894 ) (26,509 ) (48,403 )

Treatment costs 13,610 2,254 15,864

Change in product inventory (2,031 ) 13,598 11,567

Reclamation and other costs (998 ) (433 ) (1,431 )

Exclusion of Nevada Operations costs - (4,914 ) (4,914 )

Cash Cost, Before By-product Credits ^(1) 72,077 59,329 131,406

Reclamation and other costs 1,111 433 1,544

Sustaining exploration 1,750 1,103 2,853

Sustaining capital 11,583 6,108 17,691

General and administrative 11,104 - 11,104

AISC, Before By-product Credits ^(1) 97,625 66,973 164,598

By-product credits:

Zinc (31,603 ) - (31,603 )

Gold (20,438 ) - (20,438 )

Lead (19,404 ) - (19,404 )

Silver - (1,312 ) (1,312 )

Total By-product credits (71,445 ) (1,312 ) (72,757 )

Cash Cost, After By-product Credits $ 632 $ 58,017 $ 58,649

AISC, After By-product Credits $ 26,180 $ 65,661 $ 91,841

Divided by ounces produced 3,471 46

Cash Cost, Before By-product Credits, per $ 20.76 $ 1,282 Ounce

By-product credits per ounce (20.58 ) (28 )

Cash Cost, After By-product Credits, per $ 0.18 $ 1,254 Ounce

AISC, Before By-product Credits, per $ 28.12 $ 1,447 Ounce

By-product credits per ounce (20.58 ) (28 )

AISC, After By-product Credits, per Ounce $ 7.54 $ 1,419

In thousands Three Months Ended June 30, 2020(except per ounceamounts) Greens Lucky San Corporate Total Creek Friday^(2) Sebastian ^(4) Silver

Cost of sales andother directproduction costs $ 57,672 $ 11,455 $ 4,010 $ 73,137 and depreciation,depletion andamortization

Depreciation,depletion and (12,988 ) (1,894 ) (895 ) (15,777 )amortization

Treatment costs 20,016 3,032 47 23,095

Change in product (4,020 ) (118 ) (398 ) (4,536 )inventory

Reclamation and 93 - (296 ) (203 )other costs

Exclusion of Lucky - (12,475 ) - (12,475 )Friday cash cost

Cash Cost, BeforeBy-product Credits 60,773 - 2,468 63,241 ^(1)

Reclamation and 789 - 114 903 other costs

Sustaining - - - 314 314 exploration

Sustaining capital 4,501 - (1 ) - 4,500

General and 6,979 6,979 administrative

AISC, BeforeBy-product Credits 66,063 - 2,581 75,937 ^(1)

By-product credits:

Zinc (19,913 ) - - (19,913 )

Gold (19,427 ) - (2,287 ) (21,714 )

Lead (7,133 ) - - (7,133 )

Total By-product (46,473 ) - (2,287 ) (48,760 )credits

Cash Cost, After $ 14,300 $ - $ 181 $ 14,481 By-product Credits

AISC, After $ 19,590 $ - $ 294 $ 27,177 By-product Credits

Divided by ounces 2,754 - 158 2,912 produced

Cash Cost, BeforeBy-product $ 22.06 $ - $ 15.61 $ 21.71 Credits, per Ounce

By-product credits (16.87 ) - (14.47 ) (16.74 )per ounce

Cash Cost, AfterBy-product $ 5.19 $ - $ 1.14 $ 4.97 Credits, per Ounce

AISC, BeforeBy-product $ 23.98 $ - $ 16.32 $ 26.07 Credits, per Ounce

By-product credits (16.87 ) - (14.47 ) (16.74 )per ounce

AISC, AfterBy-product $ 7.11 $ - $ 1.85 $ 9.33 Credits, per Ounce

In thousands (except per ounce amounts) Three Months Ended June 30, 2020

Casa Nevada Berardi^ Operations^ Total Gold (6) (5)

Cost of sales and other direct productioncosts and depreciation, depletion and $ 45,582 $ 13,557 $ 59,139 amortization

Depreciation, depletion and amortization (17,281 ) (6,365 ) (23,646 )

Treatment costs 558 19 577

Change in product inventory (400 ) 3,669 3,269

Reclamation and other costs (92 ) (328 ) (420 )

Cash Cost, Before By-product Credits ^(1) 28,367 10,552 38,919

Reclamation and other costs 94 327 421

Sustaining exploration 467 - 467

Sustaining capital 4,278 774 5,052

AISC, Before By-product Credits ^(1) 33,206 11,653 44,859

By-product credits:

Silver (92 ) (282 ) (374 )

Total By-product credits (92 ) (282 ) (374 )

Cash Cost, After By-product Credits $ 28,275 $ 10,270 $ 38,545

AISC, After By-product Credits $ 33,114 $ 11,371 $ 44,485

Divided by ounces produced 31 15 46

Cash Cost, Before By-product Credits, per $ 922 $ 713 $ 854 Ounce

By-product credits per ounce (3 ) (19 ) (8 )

Cash Cost, After By-product Credits, per $ 919 $ 694 $ 846 Ounce

AISC, Before By-product Credits, per $ 1,080 $ 788 $ 985 Ounce

By-product credits per ounce (3 ) (19 ) (8 )

AISC, After By-product Credits, per Ounce $ 1,077 $ 769 $ 977

In thousands (except per ounce amounts) Three Months Ended June 30, 2020

Total Total Gold Total Silver

Cost of sales and other direct productioncosts and depreciation, depletion and $ 73,137 $ 59,139 $ 132,276 amortization

Depreciation, depletion and amortization (15,777 ) (23,646 ) (39,423 )

Treatment costs 23,095 577 23,672

Change in product inventory (4,536 ) 3,269 (1,267 )

Reclamation and other costs (203 ) (420 ) (623 )

Exclusion of Lucky Friday cash cost (12,475 ) - (12,475 )

Cash Cost, Before By-product Credits ^(1) 63,241 38,919 102,160

Reclamation and other costs 903 421 1,324

Sustaining exploration 314 467 781

Sustaining capital 4,500 5,052 9,552

General and administrative 6,979 - 6,979

AISC, Before By-product Credits ^(1) 75,937 44,859 120,796

By-product credits:

Zinc (19,913 ) - (19,913 )

Gold (21,714 ) - (21,714 )

Lead (7,133 ) - (7,133 )

Silver (374 ) (374 )

Total By-product credits (48,760 ) (374 ) (49,134 )

Cash Cost, After By-product Credits $ 14,481 $ 38,545 $ 53,026

AISC, After By-product Credits $ 27,177 $ 44,485 $ 71,662

Divided by ounces produced 2,912 46

Cash Cost, Before By-product Credits, per $ 21.71 $ 854 Ounce

By-product credits per ounce (16.74 ) (8 )

Cash Cost, After By-product Credits, per $ 4.97 $ 846 Ounce

AISC, Before By-product Credits, per $ 26.07 $ 985 Ounce

By-product credits per ounce (16.74 ) (8 )

AISC, After By-product Credits, per Ounce $ 9.33 $ 977

In thousands Six Months Ended June 30, 2021(except perounce amounts) Greens Lucky San Corporate Total Creek Friday^(2) Sebastian^ ^(4) Silver (3)

Cost of salesand other directproduction costsand $ 108,668 $ 50,696 $ 95 $ 159,459 depreciation,depletion andamortization

Depreciation,depletion and (29,313 ) (13,738 ) - (43,051 )amortization

Treatment costs 19,465 9,664 - 29,129

Change inproduct (34 ) (1,689 ) - (1,723 )inventory

Reclamation and (932 ) (559 ) (95 ) (1,586 )other costs

Cash Cost,Before 97,854 44,374 - 142,228 By-productCredits ^(1)

Reclamation and 1,695 528 2,223 other costs

Sustaining 1,423 - - 885 2,308 exploration

Sustaining 11,231 10,698 - 21,929 capital

General and - - - 19,111 19,111 administrative

AISC, BeforeBy-product 112,203 55,600 - 187,799 Credits ^(1)

By-product credits:

Zinc (49,277 ) (9,846 ) - (59,123 )

Gold (41,434 ) - - (41,434 )

Lead (15,625 ) (20,574 ) - (36,199 )

Total By-product (106,336 ) (30,420 ) - (136,756 )credits

Cash Cost, AfterBy-product $ (8,482 ) $ 13,954 $ - $ 5,472 Credits

AISC, AfterBy-product $ 5,867 $ 25,180 $ - $ 51,043 Credits

Divided by 5,143 1,777 6,920 ounces produced

Cash Cost,BeforeBy-product $ 19.03 $ 24.97 $ - $ 20.55 Credits, perOunce

By-productcredits per (20.68 ) (17.12 ) - (19.76 )ounce

Cash Cost, AfterBy-product $ (1.65 ) $ 7.85 $ - $ 0.79 Credits, perOunce

AISC, BeforeBy-product $ 21.82 $ 31.29 $ - $ 27.14 Credits, perOunce

By-productcredits per (20.68 ) (17.12 ) - (19.76 )ounce

AISC, AfterBy-product $ 1.14 $ 14.17 $ - $ 7.38 Credits, perOunce

In thousands (except per ounce amounts) Six Months Ended June 30, 2021

Casa Nevada Berardi Operations Total Gold ^(5)

Cost of sales and other directproduction costs and depreciation, $ 119,856 $ 25,448 $ 145,304 depletion and amortization

Depreciation, depletion and (46,451 ) (8,232 ) (54,683 )amortization

Treatment costs 1,249 1,730 2,979

Change in product inventory 968 11,499 12,467

Reclamation and other costs (423 ) (245 ) (668 )

Exclusion of Nevada Operations costs - (5,103 ) (5,103 )

Cash Cost, Before By-product Credits ^ 75,199 25,097 100,296 (1)

Reclamation and other costs 423 245 668

Sustaining exploration 2,010 - 2,010

Sustaining capital 13,822 133 13,955

AISC, Before By-product Credits ^(1) 91,454 25,475 116,929

By-product credits:

Silver (487 ) (1,103 ) (1,590 )

Total By-product credits (487 ) (1,103 ) (1,590 )

Cash Cost, After By-product Credits $ 74,712 $ 23,994 $ 98,706

AISC, After By-product Credits $ 90,967 $ 24,372 $ 115,339

Divided by ounces produced 68 17 85

Cash Cost, Before By-product Credits, $ 1,113 $ 1,434 $ 1,180 per Ounce

By-product credits per ounce (7 ) (63 ) (19 )

Cash Cost, After By-product Credits, $ 1,106 $ 1,371 $ 1,161 per Ounce

AISC, Before By-product Credits, per $ 1,354 $ 1,456 $ 1,376 Ounce

By-product credits per ounce (7 ) (63 ) (19 )

AISC, After By-product Credits, per $ 1,347 $ 1,393 $ 1,357 Ounce

In thousands (except per ounce amounts) Six Months Ended June 30, 2021

Total Total Gold Total Silver

Cost of sales and other directproduction costs and depreciation, $ 159,459 $ 145,304 $ 304,763 depletion and amortization

Depreciation, depletion and (43,051 ) (54,683 ) (97,734 )amortization

Treatment costs 29,129 2,979 32,108

Change in product inventory (1,723 ) 12,467 10,744

Reclamation and other costs (1,586 ) (668 ) (2,254 )

Exclusion of Nevada Operations costs - (5,103 ) (5,103 )

Cash Cost, Before By-product Credits ^ 142,228 100,296 242,524 (1)

Reclamation and other costs 2,223 668 2,891

Sustaining exploration 2,308 2,010 4,318

Sustaining capital 21,929 13,955 35,884

General and administrative 19,111 - 19,111

AISC, Before By-product Credits ^(1) 187,799 116,929 304,728

By-product credits:

Zinc (59,123 ) - (59,123 )

Gold (41,434 ) - (41,434 )

Lead (36,199 ) - (36,199 )

Silver (1,590 ) (1,590 )

Total By-product credits (136,756 ) (1,590 ) (138,346 )

Cash Cost, After By-product Credits $ 5,472 $ 98,706 $ 104,178

AISC, After By-product Credits $ 51,043 $ 115,339 $ 166,382

Divided by ounces produced 6,920 85

Cash Cost, Before By-product Credits, $ 20.55 $ 1,180 per Ounce

By-product credits per ounce (19.76 ) (19 )

Cash Cost, After By-product Credits, $ 0.79 $ 1,161 per Ounce

AISC, Before By-product Credits, per $ 27.14 $ 1,376 Ounce

By-product credits per ounce (19.76 ) (19 )

AISC, After By-product Credits, per $ 7.38 $ 1,357 Ounce

In thousands Six Months Ended June 30, 2020(except perounce amounts) Greens Lucky San Corporate Total Creek Friday^(2) Sebastian ^(4) Silver

Cost of salesand otherdirectproduction $ 106,853 $ 14,287 $ 12,311 $ 133,451 costs anddepreciation,depletion andamortization

Depreciation,depletion and (25,417 ) (2,196 ) (2,368 ) (29,981 )amortization

Treatment costs 35,842 3,464 151 39,457

Change inproduct (1,150 ) 796 (145 ) (499 )inventory

Reclamation and 413 - (658 ) (245 )other costs

Exclusion ofLucky Friday - (16,351 ) - (16,351 )cash cost

Cash Cost,Before 116,541 - 9,291 125,832 By-productCredits ^(1)

Reclamation and 1,577 - 228 1,805 other costs

Sustaining 4 - - 664 668 exploration

Sustaining 10,011 - 55 - 10,066 capital

General and - - - 15,918 15,918 administrative

AISC, BeforeBy-product 128,133 - 9,574 154,289 Credits ^(1)

By-product credits:

Zinc (35,939 ) - - (35,939 )

Gold (36,624 ) (6,716 ) (43,340 )

Lead (14,059 ) - - (14,059 )

TotalBy-product (86,622 ) - (6,716 ) (93,338 )credits

Cash Cost,After $ 29,919 $ - $ 2,575 $ 32,494 By-productCredits

AISC, AfterBy-product $ 41,511 $ - $ 2,858 $ 60,951 Credits

Divided by 5,530 - 505 6,035 ounces produced

Cash Cost,BeforeBy-product $ 21.07 $ - $ 18.39 $ 20.85 Credits, perOunce

By-productcredits per (15.66 ) - (13.30 ) (15.47 )ounce

Cash Cost,AfterBy-product $ 5.41 $ - $ 5.09 $ 5.38 Credits, perOunce

AISC, BeforeBy-product $ 23.17 $ - $ 18.95 $ 25.57 Credits, perOunce

By-productcredits per (15.66 ) - (13.30 ) (15.47 )ounce

AISC, AfterBy-product $ 7.51 $ - $ 5.65 $ 10.10 Credits, perOunce

In thousands (except per ounce amounts) Six Months Ended June 30, 2020

Casa Nevada Berardi ^ Operations Total Gold (6) ^(5)

Cost of sales and other directproduction costs and depreciation, $ 93,907 $ 30,471 $ 124,378 depletion and amortization

Depreciation, depletion and amortization (33,678 ) (15,430 ) (49,108 )

Treatment costs 1,132 45 1,177

Change in product inventory 1,208 8,949 10,157

Reclamation and other costs (189 ) (654 ) (843 )

Cash Cost, Before By-product Credits ^ 62,380 23,381 85,761 (1)

Reclamation and other costs 190 654 844

Sustaining exploration 1,158 - 1,158

Sustaining capital 12,784 1,600 14,384

AISC, Before By-product Credits ^(1) 76,512 25,635 102,147

By-product credits:

Silver (192 ) (635 ) (827 )

Total By-product credits (192 ) (635 ) (827 )

Cash Cost, After By-product Credits $ 62,188 $ 22,746 $ 84,934

AISC, After By-product Credits $ 76,320 $ 25,000 $ 101,320

Divided by ounces produced 58 32 90

Cash Cost, Before By-product Credits, $ 1,084 $ 736 $ 961 per Ounce

By-product credits per ounce (3 ) (20 ) (9 )

Cash Cost, After By-product Credits, per $ 1,081 $ 716 $ 952 Ounce

AISC, Before By-product Credits, per $ 1,330 $ 807 $ 1,144 Ounce

By-product credits per ounce (3 ) (20 ) (9 )

AISC, After By-product Credits, per $ 1,327 $ 787 $ 1,135 Ounce

In thousands (except per ounce amounts) Six Months Ended June 30, 2020

Total Total Gold Total Silver

Cost of sales and other directproduction costs and depreciation, $ 133,451 $ 124,378 $ 257,829 depletion and amortization

Depreciation, depletion and (29,981 ) (49,108 ) (79,089 )amortization

Treatment costs 39,457 1,177 40,634

Change in product inventory (499 ) 10,157 9,658

Reclamation and other costs (245 ) (843 ) (1,088 )

Exclusion of Lucky Friday cash cost (16,351 ) - (16,351 )

Cash Cost, Before By-product Credits ^ 125,832 85,761 211,593 (1)

Reclamation and other costs 1,805 844 2,649

Sustaining exploration 668 1,158 1,826

Sustaining capital 10,066 14,384 24,450

General and administrative 15,918 - 15,918

AISC, Before By-product Credits ^(1) 154,289 102,147 256,436

By-product credits:

Zinc (35,939 ) - (35,939 )

Gold (43,340 ) - (43,340 )

Lead (14,059 ) - (14,059 )

Silver (827 ) (827 )

Total By-product credits (93,338 ) (827 ) (94,165 )

Cash Cost, After By-product Credits $ 32,494 $ 84,934 $ 117,428

AISC, After By-product Credits $ 60,951 $ 101,320 $ 162,271

Divided by ounces produced 6,035 90

Cash Cost, Before By-product Credits, $ 20.85 $ 961 per Ounce

By-product credits per ounce (15.47 ) $ (9 )

Cash Cost, After By-product Credits, $ 5.38 $ 952 per Ounce

AISC, Before By-product Credits, per $ 25.57 $ 1,144 Ounce

By-product credits per ounce (15.47 ) $ (9 )

AISC, After By-product Credits, per $ 10.10 $ 1,135 Ounce

In thousands Previous Estimate for Twelve Months Ended(except per December 31, 2021ounce amounts) Greens Lucky San Corporate Total Creek Friday Sebastian ^(4) Silver

Total cost of $ 213,000 $ 90,400 $ - $ 303,400 sales

Depreciation,depletion and (55,000 ) (26,000 ) - (81,000 )amortization

Treatment costs 38,000 17,100 - 55,100

Change inproduct 4,000 - - 4,000 inventory

Reclamation and 4,500 1,000 - 5,500 other costs

Cash Cost,Before 204,500 82,500 - 287,000 By-productCredits ^(1)

Reclamation and 4,500 500 - 5,000 other costs

Exploration 4,000 - - 4,000

Sustaining 36,000 22,000 - 58,000 capital

General and - - - 34,500 34,500 administrative

AISC, BeforeBy-product 249,000 105,000 - 388,500 Credits ^(1)

By-product credits:

Zinc (86,000 ) (14,500 ) - (100,500 )

Gold (70,000 ) - - (70,000 )

Lead (28,000 ) (38,900 ) - (66,900 )

Total By-product (184,000 ) (53,400 ) - (237,400 )credits

Cash Cost, AfterBy-product $ 20,500 $ 29,100 $ - $ 49,600 Credits

AISC, AfterBy-product $ 65,000 $ 51,600 $ - $ 151,100 Credits

Divided bysilver ounces 9,850 3,600 - 13,450 produced

Cash Cost,BeforeBy-product $ 20.76 $ 22.92 $ - $ 21.34 Credits, perSilver Ounce

By-productcredits per (18.68 ) (14.83 ) - (17.65 )silver ounce

Cash Cost, AfterBy-product $ 2.08 $ 8.09 $ - $ 3.69 Credits, perSilver Ounce

AISC, BeforeBy-product $ 25.28 $ 29.17 $ - $ 28.88 Credits, perSilver Ounce

By-productcredits per (18.68 ) (14.83 ) - (17.65 )silver ounce

AISC, AfterBy-product $ 6.60 $ 14.34 $ - $ 11.23 Credits, perSilver Ounce

Previous Estimate for Twelve MonthsIn thousands (except per ounce Endedamounts) December 31, 2021

Casa Nevada Total Gold Berardi Operations

Total cost of sales $ 212,000 $ 41,000 $ 253,000

Depreciation, depletion and (87,500 ) (5,600 ) (93,100 )amortization

Treatment costs 400 4,600 5,000

Change in product inventory (9,000 ) (11,600 ) (20,600 )

Reclamation and other costs 300 500 800

Cash Cost, Before By-product Credits ^ 116,200 28,900 145,100 (1)

Reclamation and other costs 500 100 600

Exploration 3,800 - 3,800

Sustaining capital 31,500 2,000 33,500

AISC, Before By-product Credits ^(1) 152,000 31,000 183,000

By-product credits:

Silver (600 ) (550 ) (1,150 )

Total By-product credits (600 ) (550 ) (1,150 )

Cash Cost, After By-product Credits $ 115,600 $ 28,350 $ 143,950

AISC, After By-product Credits $ 151,400 $ 30,450 $ 181,850

Divided by gold ounces produced 127 21 148

Cash Cost, Before By-product Credits, $ 919 $ 1,376 $ 984 per Gold Ounce

By-product credits per gold ounce (5 ) (26 ) (8 )

Cash Cost, After By-product Credits, $ 914 $ 1,350 $ 976 per Gold Ounce

AISC, Before By-product Credits, per $ 1,201 $ 1,476 $ 1,241 Gold Ounce

By-product credits per gold ounce (5 ) (26 ) (8 )

AISC, After By-product Credits, per $ 1,196 $ 1,450 $ 1,233 Gold Ounce

Previous Estimate for Twelve MonthsIn thousands (except per ounce amounts) Ended December 31, 2021

Total Total Gold Total Silver

Total cost of sales $ 303,400 $ 253,000 $ 556,400

Depreciation, depletion and amortization (81,000 ) (93,100 ) (174,100 )

Treatment costs 55,100 5,000 60,100

Change in product inventory 4,000 (20,600 ) (16,600 )

Reclamation and other costs 5,500 800 6,300

Cash Cost, Before By-product Credits ^ 287,000 145,100 432,100 (1)

Reclamation and other costs 5,000 600 5,600

Exploration 4,000 3,800 7,800

Sustaining capital 58,000 33,500 91,500

General and administrative 34,500 - 34,500

AISC, Before By-product Credits ^(1) 388,500 183,000 571,500

By-product credits:

Zinc (100,500 ) - (100,500 )

Gold (70,000 ) - (70,000 )

Lead (66,900 ) - (66,900 )

Silver (1,150 ) (1,150 )

Total By-product credits (237,400 ) (1,150 ) (238,550 )

Cash Cost, After By-product Credits $ 49,600 $ 143,950 $ 193,550

AISC, After By-product Credits $ 151,100 $ 181,850 $ 332,950

Divided by ounces produced 13,450 148

Cash Cost, Before By-product Credits, $ 21.34 $ 984 per Ounce

By-product credits per ounce (17.65 ) (8 )

Cash Cost, After By-product Credits, per $ 3.69 $ 976 Ounce

AISC, Before By-product Credits, per $ 28.88 $ 1,241 Ounce

By-product credits per ounce (17.65 ) (8 )

AISC, After By-product Credits, per $ 11.23 $ 1,233 Ounce

In thousands Current Estimate for Twelve Months Ended(except per December 31, 2021ounce amounts) Greens Lucky San Corporate Total Creek Friday Sebastian ^(4) Silver

Total cost of $ 222,000 $ 102,500 $ - $ 324,500 sales

Depreciation,depletion and (59,200 ) (27,400 ) - (86,600 )amortization

Treatment costs 37,500 14,500 - 52,000

Change inproduct (3,700 ) (1,250 ) - (4,950 )inventory

Reclamation and 1,500 1,500 - 3,000 other costs

Cash Cost,Before 198,100 89,850 - 287,950 By-productCredits ^(1)

Reclamation and 3,400 1,000 - 4,400 other costs

Exploration 4,300 - - 1,732 6,032

Sustaining 35,000 26,500 - 61,500 capital

General and - - - 38,700 38,700 administrative

AISC, BeforeBy-product 240,800 117,350 - 398,582 Credits ^(1)

By-product credits:

Zinc (98,000 ) (17,000 ) - (115,000 )

Gold (75,100 ) - - (75,100 )

Lead (31,000 ) (43,000 ) - (74,000 )

TotalBy-product (204,100 ) (60,000 ) - (264,100 )credits

Cash Cost,After $ (6,000 ) $ 29,850 $ - $ 23,850 By-productCredits

AISC, AfterBy-product $ 36,700 $ 57,350 $ - $ 134,482 Credits

Divided bysilver ounces 9,850 3,600 - 13,450 produced

Cash Cost,BeforeBy-product $ 20.11 $ 24.96 $ - $ 21.41 Credits, perSilver Ounce

By-productcredits per (20.72 ) (16.67 ) - (19.64 )silver ounce

Cash Cost,AfterBy-product $ (0.61 ) $ 8.29 $ - $ 1.77 Credits, perSilver Ounce

AISC, BeforeBy-product $ 24.45 $ 32.60 $ - $ 29.63 Credits, perSilver Ounce

By-productcredits per (20.72 ) (16.67 ) - (19.64 )silver ounce

AISC, AfterBy-product $ 3.73 $ 15.93 $ - $ 10.00 Credits, perSilver Ounce

In thousands (except per ounce Current Estimate for Twelve Months Endedamounts) December 31, 2021

Casa Nevada Total Gold Berardi Operations

Total cost of sales $ 220,000 $ 42,600 $ 262,600

Depreciation, depletion and (81,000 ) (14,500 ) (95,500 )amortization

Treatment costs 500 5,000 5,500

Change in product inventory (3,800 ) (4,650 ) (8,450 )

Reclamation and other costs 850 675 1,525

Cash Cost, Before By-product Credits ^ 136,550 29,125 165,675 (1)

Reclamation and other costs 700 300 1,000

Exploration 4,000 - 4,000

Sustaining capital 26,000 125 26,125

AISC, Before By-product Credits ^(1) 167,250 29,550 196,800

By-product credits:

Silver (875 ) (1,125 ) (2,000 )

Total By-product credits (875 ) (1,125 ) (2,000 )

Cash Cost, After By-product Credits $ 135,675 $ 28,000 $ 163,675

AISC, After By-product Credits $ 166,375 $ 28,425 $ 194,800

Divided by gold ounces produced 130 21 151

Cash Cost, Before By-product Credits, $ 1,050 $ 1,421 $ 1,101 per Gold Ounce

By-product credits per gold ounce (7 ) (55 ) (13 )

Cash Cost, After By-product Credits, $ 1,043 $ 1,366 $ 1,088 per Gold Ounce

AISC, Before By-product Credits, per $ 1,287 $ 1,441 $ 1,308 Gold Ounce

By-product credits per gold ounce (7 ) (55 ) (13 )

AISC, After By-product Credits, per $ 1,280 $ 1,386 $ 1,295 Gold Ounce

Current Estimate for Twelve MonthsIn thousands (except per ounce amounts) Ended December 31, 2021

Total Total Gold Total Silver

Total cost of sales $ 324,500 $ 262,600 $ 587,100

Depreciation, depletion and amortization (86,600 ) (95,500 ) (182,100 )

Treatment costs 52,000 5,500 57,500

Change in product inventory (4,950 ) (8,450 ) (13,400 )

Reclamation and other costs 3,000 1,525 4,525

Cash Cost, Before By-product Credits ^(1) 287,950 165,675 453,625

Reclamation and other costs 4,400 1,000 5,400

Exploration 6,032 4,000 10,032

Sustaining capital 61,500 26,125 87,625

General and administrative 38,700 - 38,700

AISC, Before By-product Credits ^(1) 398,582 196,800 595,382

By-product credits:

Zinc (115,000 ) - (117,600 )

Gold (75,100 ) - (75,100 )

Lead (74,000 ) - (77,800 )

Silver (2,000 ) (2,000 )

Total By-product credits (264,100 ) (2,000 ) (272,500 )

Cash Cost, After By-product Credits $ 23,850 $ 163,675 $ 181,125

AISC, After By-product Credits $ 134,482 $ 194,800 $ 322,882

Divided by ounces produced 13,450 151

Cash Cost, Before By-product Credits, per $ 21.41 $ 1,101 Ounce

By-product credits per ounce (19.64 ) (13 )

Cash Cost, After By-product Credits, per $ 1.77 $ 1,088 Ounce

AISC, Before By-product Credits, per $ 29.63 $ 1,308 Ounce

By-product credits per ounce (19.64 ) (13 )

AISC, After By-product Credits, per Ounce $ 10.00 $ 1,295

Includes all direct and indirect operating costs related to the physical activities of producing metals, including mining, processing and other plant costs, third-party refining and marketing expense, on-site general(1) and administrative costs, royalties and mining production taxes, before by-product revenues earned from all metals other than the primary metal produced at each unit. AISC, Before By-product Credits also includes on-site exploration, reclamation, and sustaining capital costs.



The unionized employees at Lucky Friday were on strike from March 2017 until January 2020, and production at Lucky Friday had been limited from the start of the strike until the ramp-up was substantially completed in the fourth quarter of 2020. Costs related to ramp-up activities totaling(2) $9.2 million, along with $4.1 million in non-cash depreciation expense in the first half of 2020, have been excluded from the calculations of cost of sales and other direct production costs and depreciation, depletion and amortization, Cash Cost, Before By-product Credits, Cash Cost, After By-product Credits, AISC, Before By-product Credits, and AISC, After By-product Credits.



Mining at San Sebastian was completed in the third quarter of 2020, and milling was completed in the fourth quarter of 2020. Suspension-related costs at San Sebastian totaling $1.4 million for the first half of 2021 are(3) reported in a separate line item on our consolidated statements of operations and excluded from the calculations of cost of sales and other direct production costs and depreciation, depletion and amortization, Cash Cost, Before By-product Credits, Cash Cost, After By-product Credits, AISC, Before By-product Credits, and AISC, After By-product Credits.



AISC, Before By-product Credits for our consolidated silver properties(4) includes corporate costs for general and administrative expense, exploration and sustaining capital.



Production was suspended at the Hollister and Midas mines and Aurora mill in the latter part of 2019. Suspension-related costs at Nevada Operations totaling $5.2 million and $2.7 million for the second quarter of 2021 and 2021, respectively, ($8.8 million and $6.7 million for the first halves of(5) 2021 and 2020) are reported in a separate line item on our consolidated statements of operations and excluded from the calculations of cost of sales and other direct production costs and depreciation, depletion and amortization, Cash Cost, Before By-product Credits, Cash Cost, After By-product Credits, AISC, Before By-product Credits, and AISC, After By-product Credits.

.

In late March 2020, the Government of Quebec ordered the mining industry to reduce to minimum operations as part of the fight against the COVID-19 virus, causing us to suspend our Casa Berardi operations from approximately March 24 until April 15, when limited mining operations resumed, resulting(6) in the reduced mill throughput. Suspension-related costs totaling $1.6 million for the first half of 2020 are reported in a separate line item on our consolidated statements of operations and excluded from the calculations of cost of sales and other direct production costs and depreciation, depletion and amortization and Cash Cost and AISC, After By-product Credits, per Gold Ounce.

Reconciliation of Net Income (Loss) Applicable to Common Shareholders (GAAP) to Adjusted Net Income (Loss) Applicable to Common Stockholders (non-GAAP)

This release refers to a non-GAAP measure of adjusted net income (loss) applicable to common stockholders and adjusted net income (loss) per share, which are indicators of our performance. They exclude certain impacts which are of a nature which we believe are not reflective of our underlying performance. Management believes that adjusted net income (loss) per common share provides investors with the ability to better evaluate our underlying operating performance.

Dollars are in thousands Three Months Ended June Six Months Ended June(except per share amounts) 30, 30,

2021 2020 2021 2020

Net income (loss)applicable to common $ 647 $ (14,166 ) $ 19,480 $ (31,489 )shareholders (GAAP)

Adjusting items:

Loss on derivatives 17,313 14,002 16,840 6,109 contracts

Provisional price (gains) (3,077 ) (6,986 ) (3,629 ) (9,597 )

Environmental accruals - - 2,882 -

Foreign exchange loss 1,907 3,205 3,971 (3,431 )(gain)

Ramp-up and suspension 5,786 9,572 10,104 22,568 costs

Acquisition costs - 6 - 11

Unrealized (gain) loss on 750 (6,409 ) 4,256 (5,431 )investments

Foundation grant - 1,970 - 1,970

Loss on disposition ofproperties, plants, 143 677 152 573 equipment and mineralinterests

Write-down to stockpile 9,379 - 9,577 - inventory

Additional interestassociated with early - - - 2,902 repayment of long-term debt

Loss on extinguishment of - - - 1,666 debt

Adjusted net income (loss)applicable to common $ 32,848 $ 1,871 $ 63,633 $ (14,149 )shareholders

Weighted average shares - 535,531 525,243 534,819 524,218 basic

Weighted average shares - 542,262 525,243 541,468 524,218 diluted

Basic adjusted net income(loss) per common share (in 6.1 0.4 11.9 (2.7 )cents)

Diluted adjusted net income(loss) per common share (in 6.1 0.4 11.8 (2.7 )cents)

Reconciliation of Net Income (Loss) (GAAP) and Debt (GAAP) to Adjusted EBITDA (non-GAAP) and Net Debt (non-GAAP)

This release refers to the non-GAAP measures of adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), which is a measure of our operating performance, and net debt to adjusted EBITDA for the last 12 months (or "LTM adjusted EBITDA"), which is a measure of our ability to service our debt. Adjusted EBITDA is calculated as net income (loss) before the following items: interest expense, income tax provision, depreciation, depletion, and amortization expense, acquisition costs, foreign exchange gains and losses, gains and losses on derivative contracts, ramp-up and suspension costs, provisional price gains and losses, stock-based compensation, unrealized losses and gains on investments, provisions for closed operations, Foundation grant expense and interest and other income (expense). Net debt is calculated as total debt, which consists of the liability balances for our Senior Notes, revolving credit facility and finance leases, less the total of our cash and cash equivalents. Management believes that, when presented in conjunction with comparable GAAP measures, Adjusted EBITDA and net debt to LTM adjusted EBITDA are useful to investors in evaluating our operating performance and ability to meet our debt obligations. The following table reconciles net loss and debt to Adjusted EBITDA and net debt:

Dollars are Three Months Ended Six Months Ended Twelve Months Endedin thousands June 30, June 30, June 30,

2021 2020 2021 2020 2021 2020

Net income $ 785 $ (14,028) $ 19,756 $ (31,213) $ 34,179 $ (58,705)(loss)

Plus:Interest 10,271 11,829 21,015 28,140 42,444 54,587expense

Plus/(Less): (4,842) 626 (208) (436) 363 (6,142)Income taxes

Plus:Depreciation, 48,403 39,423 97,734 79,089 175,775 190,343depletion andamortization

Plus/(Less):Foreign 1,907 3,205 3,971 (3,431) 12,007 (2,709)exchange loss(gain)

Plus: Ramp-upand 5,786 9,572 10,104 22,568 12,447 29,575suspensioncosts

Plus: Lossesondispositionofproperties, 143 677 152 573 151 574plants,equipment andmineralinterests

Plus:Acquisition - 6 - 11 9 246costs

Plus:Stock-based 2,802 1,210 3,302 2,428 7,332 4,544compensation

Plus/(Less):Losses(gains) on 13,078 21,625 2,116 11,188 (3,494) 19,203derivativecontracts

Plus/Less:Provisional (3,077) (6,986) (3,629) (9,597) (2,040) (10,894)price (gain)loss

Plus:Provision forclosedoperations 1,654 1,545 6,183 3,093 9,279 6,798andenvironmentalmatters

Plus/(Less):Unrealized(gain) loss 750 (6,409) 4,256 (5,431) (581) (4,075)oninvestments

Gain onexchange of - - (1,158) - (1,158) investments

Write-down tostockpile 6,242 - 6,431 - 6,431 -inventory

Foundation - 1,970 - 1,970 - 1,970grant

Other 135 (28) 287 1,176 1,367 2,371

Adjusted $ 84,037 $ 64,237 $ 170,312 $ 100,128 $ 294,511 $ 227,686EBITDA

Total debt $ 523,739 $ 531,054

Less: Cashand cash $ (181,494) $ (75,923)equivalents

Net debt $ 342,245 $ 455,131

Net debt/LTMadjusted 1.2 2.0EBITDA(non-GAAP)

Reconciliation of Cash Provided by Operating Activities (GAAP) to Free Cash Flow (non-GAAP)

This release refers to a non-GAAP measure of free cash flow, calculated as cash provided by operating activities, less additions to properties, plants, equipment and mineral interests. Management believes that, when presented in conjunction with comparable GAAP measures, free cash flow is useful to investors in evaluating our operating performance. The following table reconciles cash provided by operating activities to free cash flow:

Dollars are in thousands Three Months Ended Six Months Ended June 30, June 30,

2021 2020 2021 2020

Cash provided by operating $ 86,304 $ 37,526 $ 124,240 $ 42,453 activities

Less: Additions toproperties, plants equipment (31,898 ) (10,819 ) (53,311 ) (30,689 )and mineral interests

Free cash flow $ 54,406 $ 26,707 $ 70,929 $ 11,764

Category: Earnings

View source version on businesswire.com: https://www.businesswire.com/news/home/20210805005305/en/

CONTACT: Russell Lawlar Senior Vice President - CFO and Treasurer

CONTACT: Jeanne DuPont Senior Communications Coordinator

CONTACT: 800-HECLA91 (800-432-5291) Investor Relations Email: hmc-info@hecla-mining.com Website: www.hecla-mining.com