Hecla Mining Company announced preliminary production, operating costs and cash balance for the first quarter of 2017.
FIRST QUARTER 2017 HIGHLIGHTS (Preliminary Results) Silver production of 3.4 million ounces; gold production of 56,113 ounces.
Silver equivalent production of 10.6 million ounces or gold equivalent production of almost 151,000 ounces.2 Lead production of 8,636 tons; zinc production of 15,537 tons.
Cost of sales and other direct production costs and depreciation, depletion and amortization (“cost of sales”) of $107.6 million, an increase over 2016 reflecting open pit production from Casa Berardi. Silver cash cost, after by-product credits, per ounce of $0.84, the lowest in over five years and below our full year estimate of $2.75.3
Cash, cash equivalents and short-term investments of approximately $213 million at March 31, 2017, an increase of about $14 million for the quarter compared to a $21 million decline in the first quarter, 2016.
“The first quarter production at Greens Creek and San Sebastian exceeded our expectations, more than offsetting the shortfall at Lucky Friday due to a strike by the union workers,” said Phillips S. Baker, Jr., President and CEO. “While our cost of sales increased over last year due to the higher throughput from the Casa Berardi open pit operations, our cash cost, after by-product credits, declined 73% over the first quarter 2016 to $0.84 per silver ounce. This strong operating performance allowed us to add $14 million of cash since the end of the year, marking the fourth consecutive quarter of increasing cash balances.”
The following table provides a summary of the production, cost of sales and cash cost, after by-product credits, per silver and gold ounce, for the first quarter ended March 31, 2017 (preliminary) and 2016 (actual).
At the Greens Creek mine, 1.9 million ounces of silver and 14,022 ounces of gold were produced in the first quarter, compared to 2.5 million ounces and 15,981 ounces, respectively, in the first quarter 2016. Lower silver and gold production was expected and principally due to lower grades than the prior period. The mill operated at an average of 2,190 tons per day (tpd) in the first quarter, in-line with the first quarter 2016.
The cost of sales for the first quarter was $44.0 million, and the cash cost, after by-product credits, per silver ounce, was $0.65, compared to $44.9 million and $3.96, respectively, for the first quarter 2016.5 The per ounce silver costs were lower primarily due to higher base metals prices and fewer ounces of silver production.
At the Lucky Friday mine, 680,782 ounces of silver were produced in the first quarter, compared to 977,084 ounces in the prior year period. The decrease in silver production was due to the strike by the union workers since March 13.
The cost of sales for the first quarter was $14.5 million and the cash cost, after by-product credits, per silver ounce was $5.93, compared to $18.5 million and $9.05, respectively, for the first quarter of 2016, with the decrease in cash cost, after by-product credits, per silver ounce primarily due to higher base metals prices and fewer silver ounces produced.3
At the Casa Berardi mine, 35,807 ounces of gold were produced in the first quarter, including 7,157 ounces from the East Mine Crown Pillar (EMCP) pit, compared to 30,378 ounces in the prior year period, primarily due to higher throughput. The mill operated at an average of 3,263 tpd in the first quarter, an increase of 37% over the first quarter 2016.
The cost of sales was $42.5 million for the first quarter and the cash cost, after by-product credits, per gold ounce was $886, compared to $29.2 million and $781, respectively, in the prior year period, with the increase in cash cost, after by-product credits, per gold ounce partly due to the expensing of stripping costs for the new EMCP pit.4
Founded in 1891, Hecla Mining Company (NYSE:HL) is a leading low-cost U.S. silver producer with operating mines in Alaska, Idaho and Mexico, and is a growing gold producer with an operating mine in Quebec, Canada. The Company also has exploration and pre-development properties in seven world-class silver and gold mining districts in the U.S., Canada, and Mexico, and an exploration office and investments in early-stage silver exploration projects in Canada.