Introduction & Market Context
Hecla Mining Company (NYSE:HL), the largest silver producer in the U.S. and Canada, reported record quarterly financial results in its Q1 2025 presentation. Despite these strong results, the company’s stock experienced a significant 12.43% drop in after-hours trading following the earnings announcement, suggesting investor concerns beyond the headline numbers.
The company achieved record sales of $261.3 million and record adjusted EBITDA of $90.8 million, driven by robust silver production and favorable metal prices. Net income attributable to shareholders reached $28.7 million, or $0.05 per share, meeting analyst expectations.
Quarterly Performance Highlights
Hecla’s first quarter was marked by strong operational performance across its portfolio of mines. The company produced 4.1 million ounces of silver and 34,232 ounces of gold, maintaining its production guidance for 2025.
As shown in the following quarterly highlights:
Silver continues to be the primary driver of Hecla’s business, accounting for 45% of revenues, followed by gold (33%), lead (13%), and zinc (9%). The company achieved impressive silver margins in Q1, with margins representing 65% of the silver price, up from 54% in 2024.
The financial breakdown illustrates this revenue composition and margin strength:
Detailed Financial Analysis
Hecla’s financial position continues to strengthen, with the company focusing on deleveraging and increasing financial flexibility. The net leverage ratio improved to 1.5x from 1.6x at year-end 2024, reflecting the company’s commitment to balance sheet strength.
The company’s capital allocation priorities emphasize investment in organic growth while maintaining financial discipline. Greens Creek and Lucky Friday continue to generate substantial free cash flow, with cumulative cash flow from operations reaching $1,234 million and free cash flow of $843 million.
This capital allocation strategy is outlined in the following slide:
Mine-by-Mine Performance
Greens Creek remains Hecla’s cornerstone operation, producing 2 million ounces of silver in Q1 with cash costs and all-in sustaining costs (AISC) below full-year guidance. The mine generated $43.9 million in operating cash flow and $33.4 million in free cash flow during the quarter.
The performance metrics for Greens Creek show its continued strong contribution:
Lucky Friday achieved a new quarterly milling record of 108,745 tons, surpassing the previous record set in Q4 2024. The mine produced 1.3 million ounces of silver with a grade of 13.0 ounces per ton. However, cash costs increased quarter-over-quarter to $9.37 per ounce, and AISC rose to $20.08 per ounce, primarily due to higher operating costs and elevated profit-sharing payments.
The Lucky Friday performance details show both achievements and cost challenges:
A significant milestone was reached at Keno Hill, which achieved its first profitable quarter since acquisition with $1.0 million in gross profit. Silver production increased to 772,430 ounces, representing a 23% growth over the prior quarter. The mine’s strategic growth plan focuses on a phased approach to sustainable profitable production.
The Keno Hill strategic growth plan is detailed here:
Casa Berardi produced 20,500 ounces of gold in Q1, a decrease from the previous quarter due to lower underground grades. The company expects costs to decline in the second half of 2025 as the stripping ratio of the 160 pit decreases. Notably, Hecla is evaluating strategic alternatives for this asset as part of its portfolio optimization efforts.
Strategic Initiatives
Hecla outlined four key themes for 2025, focusing on long-term value creation at Keno Hill, continued deleveraging, establishing a capital allocation framework, and portfolio rationalization at Casa Berardi.
The strategic roadmap for 2025 is illustrated in this slide:
The company is also ramping up exploration activities in Nevada, with surface exploration programs initiated at Midas and two drills expected to be active starting in the second quarter. The Nevada operations include several historically productive mines with significant infrastructure already in place.
Forward-Looking Statements
Hecla maintained its consolidated production, cost, and capital guidance for 2025, though site-specific cost guidance was revised. The company expects to produce between 15.5-17.0 million ounces of silver and 76-82 thousand ounces of gold for the full year.
The detailed guidance shows strong expected silver margins and maintained production targets:
CEO Rob Prichmerov expressed confidence in the company’s future during the earnings call, stating: "With each passing month, as I deepen my understanding of both our mineral assets and our talented employees, my confidence in Hecla’s promising future continues to strengthen."
Market Response and Challenges
Despite the record financial results, Hecla’s stock fell by 12.43% in after-hours trading following the earnings announcement, closing at $4.79. This decline may reflect broader market volatility or investor concerns about future challenges, including potential impacts from international trade tariffs and operational risks.
The company faces several challenges, including reaching production targets at Keno Hill, managing costs at Lucky Friday, and making strategic decisions regarding Casa Berardi. Additionally, supply chain disruptions and dependence on favorable metal prices present ongoing risks.
According to the earnings call transcript, analysts raised questions about the potential sale of Casa Berardi, Keno Hill’s production challenges, and the company’s exploration strategy in Nevada. Management addressed concerns about tariffs and supply chain issues while emphasizing their focus on strategic growth and operational excellence.
As Hecla continues to execute its strategy of focusing on high-margin silver production while optimizing its portfolio, investors will be watching closely to see if the company can maintain its strong operational performance while successfully addressing these challenges.
Full presentation:
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