Hecla Mining (NYSE:HL) reported second-quarter results marked by strong cash generation, record site-level free cash flow at Greens Creek and Lucky Friday, and a balance sheet that President and Chief Executive Officer Rob Krcmarov called the strongest in the company’s history.
Revenue from continuing operations totaled $334 million in the second quarter, down from a record $411 million in the first quarter. Krcmarov attributed the sequential decline to lower metal prices and shipment timing, particularly at the Greens Creek mine. A meaningful amount of silver concentrate produced at Greens Creek had not been sold by quarter-end, though it shipped in early August and is expected to be reflected in third-quarter results.
Cash Flow and Balance Sheet Strength
All three operating mines generated free cash flow during the quarter. Greens Creek produced site-level free cash flow of $130 million, while Lucky Friday generated a site record of $88 million. Keno Hill contributed nearly $15 million of free cash flow, its fifth consecutive quarter of positive free cash flow.
Hecla ended the quarter with $483 million in cash, no long-term debt other than capital leases, and an essentially undrawn $225 million revolving credit facility, including a $75 million accordion feature. Chief Financial Officer Russell Lawlar said the company moved from net debt of nearly $270 million a year earlier to a net cash position of roughly $472 million.
Lawlar also said the company’s high-grade underground operations have relatively low diesel intensity and that its principal power supply comes from local utilities, primarily renewable hydropower. Fuel represented about 3% of Hecla’s consolidated cost structure during the quarter, according to Lawlar.
Under its 2026 price-sensitivity scenarios, Hecla projected approximately $500 million in full-year consolidated free cash flow at $50 per ounce silver and $3,500 per ounce gold. The company said potential annual free cash flow could approach $700 million at $75 silver and $4,500 gold, and nearly $800 million at $100 silver and $5,500 gold.
Operations and Updated Guidance
Consolidated silver production totaled 4.2 million ounces, up 8% from the first quarter. Lucky Friday produced a quarterly record of 1.5 million ounces, driven by higher mill grade from a planned high-grade mining area. Management said it does not expect those grades to continue through the remainder of the year.
- Greens Creek: Produced 2.1 million ounces of silver and more than 14,000 ounces of gold. Hecla raised its full-year silver guidance to 8.0 million to 8.3 million ounces and expects 51,000 to 55,000 ounces of gold. The company also improved its cost guidance, projecting cash costs of negative $12.50 to negative $12.00 per ounce and all-in sustaining costs of negative $4.25 to negative $3.75 per ounce, after by-product credits.
- Lucky Friday: Hecla tightened silver production guidance to 4.9 million to 5.2 million ounces. It now expects cash costs of $9.00 to $9.75 per ounce and AISC of $20.50 to $26.00 per ounce, after by-product credits. The mine’s surface cooling project remained on track for completion by September.
- Keno Hill: Produced 625,000 ounces of silver, compared with 500,000 ounces in the first quarter. Full-year guidance was updated to 2.2 million to 2.6 million ounces as the company prioritizes permitting and site infrastructure work rather than pursuing near-term tonnage growth.
Keno Hill received a permit during the quarter to expand its tailings storage facility. Krcmarov said the company expects to begin ramping toward higher production levels around the end of 2029 if it receives critical permits, completes infrastructure projects, and advances the tailings expansion sufficiently to support normal mill production.
Greens Creek Growth Projects
Hecla is advancing engineering and metallurgical studies for a pyrite concentrate circuit at Greens Creek. If developed, the circuit would recover metals from mill tailings currently sent to the dry-stack tailings facility. Vice President of Operations Brian Erickson said the project could add approximately 1.0 million to 1.2 million ounces of silver and 10,000 to 15,000 ounces of gold annually once fully ramped up.
Initial capital spending for the project is estimated at $40 million to $60 million, with incremental annual operating costs estimated at $10 million to $15 million. Hecla is targeting first production between the fourth quarter of 2027 and the first half of 2028, followed by an approximately one-year ramp-up period. Management said the production figures are before payability factors and remain subject to further engineering work.
The company is also conducting phase-three metallurgical test work on potential reprocessing of Greens Creek dry-stack tailings. The facility contains more than 600,000 ounces of gold, 51 million ounces of silver and other metals, which Hecla valued at roughly $6.1 billion in situ at June 30 metal prices before recovery, processing and capital costs. The test work and evaluation of a suitable processing facility are expected to help determine next steps.
Exploration and Nevada Restart Work
Hecla’s 2026 exploration and pre-development budget remains $55 million. At Keno Hill, the company extended a high-grade silver trend to 800 feet of strike length, where it remains open in both directions. Reported drill highlights included 10.2 feet grading 62.7 ounces per ton silver, 10.1 feet grading 44.6 ounces per ton silver, and 8 feet grading 22.4 ounces per ton silver.
In Nevada, drilling at Midas identified two new high-grade gold-silver veins near the Sinter-Pogo Gap. Hecla is evaluating a potential hub-and-spoke restart model that could use the existing permitted Midas mill to process ore from Midas, Hollister or other regional sources. Management said a restart timeline will depend on exploration results, technical studies and certain permit modifications, though key mill and tailings permits are already in hand.
Drilling at Hollister was underway, while exploration at Aurora was expected to begin in mid-August. Krcmarov said Aurora’s on-site mill would require reinvestment or potentially replacement if a viable resource is defined, and that hauling ore from Aurora to Midas is unlikely because of the distance by road.
About Hecla Mining (NYSE:HL)
Hecla Mining Company, founded in 1891 and headquartered in Coeur d’Alene, Idaho, is one of the oldest publicly traded precious metals companies in the United States. Originally established to develop the rich silver deposits of the Coeur d’Alene district, Hecla has evolved into a diversified mining enterprise focused on the exploration, development and production of silver and gold, with by-product credits from lead and zinc.
The company’s principal operations are located in North America and Latin America.
