Earnings Call Insights: Hecla Mining Company HL Q3 2025
Management View- CEO Robert Krcmarov opened by stating that Hecla "delivered record results this quarter," highlighting revenues of $410 million, net income of $101 million, and adjusted EBITDA of $196 million. Krcmarov emphasized, "Net leverage has improved from 1.8x this time last year to 0.3x in Q3. So that's an 83% reduction. And that's in a single year. That's a structural derisking of the company."
- Krcmarov described the company as having "gone from being capital constrained to capital flexible," citing $148 million in operating cash flow and consolidated free cash flow of $90 million for the quarter, with all four producing assets generating positive free cash flow.
- The CEO noted, "Our silver production was 4.6 million ounces, up 2% from last quarter. Cash costs were negative $2.03 per ounce, thanks to strong by-product credits, while all-in sustaining costs came in at $11.01."
- Regarding operational projects, the Lucky Friday surface cooling project is "expected for completion in the first half of 2026," and Greens Creek "received its wetlands permit for the dry stack tailings expansion."
- CFO Russell Lawlar stated, "We generated $393 million in mine site revenues with silver continuing to be our primary revenue driver at 48% of the total, followed by gold at 37% and base metals rounding out the balance."
- Lawlar added, "Our net leverage ratio improved to 0.3x during the quarter, the lowest in more than a decade, down from 0.7x in the second quarter."
- Lawlar highlighted, "We generated consolidated free cash flow of more than $90 million during the quarter. Greens Creek led the way with nearly $75 million."
- COO Carlos Aguiar reported, "The third quarter silver production came in at 2.3 million ounces with 15,600 ounces of gold, both tracking well to full year guidance. Sales came in at $178 million, up 46% from last quarter, driven by higher volumes sold and metal prices."
Outlook- Krcmarov stated, "We’ve tightened our production guidance and reiterated the cost guidance."
- Aguiar noted, "Based on our strong year-to-date performance at Greens Creek, we are tightening our silver and gold production guidance and lowering our capital expenditure guidance while reiterating our cost guidance."
- For Lucky Friday, Aguiar said, "We are tightening our silver production guidance, reiterating our total capital expenditure guidance and modestly raising our cost guidance."
- At Keno Hill, Aguiar confirmed, "We are tightening our silver production guidance at Keno Hill based on a strong year-to-date performance. Capital expenditures are expected to modestly exceed our original guidance."
- Casa Berardi's gold production guidance was also tightened.
Financial Results- Hecla reported Q3 revenues of $410 million, net income of $101 million, and adjusted EBITDA of $196 million.
- Net leverage improved to 0.3x in Q3 from 0.7x in the prior quarter.
- Operating cash flow was $148 million, with consolidated free cash flow at $90 million.
- All producing assets—Greens Creek, Lucky Friday, Casa Berardi, and Keno Hill—delivered positive free cash flow for a second consecutive quarter.
- Silver production was 4.6 million ounces, and cash costs were negative $2.03 per ounce, while all-in sustaining costs stood at $11.01 per ounce.
- Sales at Greens Creek reached $178 million, up 46% quarter-over-quarter.
Q&A- Heiko Ihle, H.C. Wainwright: Asked about inflationary factors and supply chain bottlenecks. Lawlar responded, "The biggest maybe cost pressure that we've seen is with the metals price environment...competition for labor...we have to be competitive as it relates to what we pay for labor, but also filling roles...with contractors." Aguiar added, "There's a little bit related with mining supplies and reagents and air movement...workforce consultants and labor."
- Ihle followed up on exploration labor costs and assay timing. Allen explained, "We have seen some increase in our drilling costs. Really, it's associated with labor, drillers and drillers helpers. Regarding assaying, turnaround has been somewhat normal."
- Alexander Terentiew, National Bank: Asked about exploration focus and metrics for Keno Hill commercial production. Krcmarov said, "We're going to substantially increase our exploration budget in Nevada. In fact, we've increased it beyond what the starting budget was this year." On Keno Hill, Krcmarov stated, "We're really only there on one [criteria], and that's the silver recoveries right now...our current ramp-up plan really has us getting to commercial production around about 2027 at roughly 345 to 385 tons per day."
- Joseph Reagor, ROTH Capital: Questioned guidance ranges and production realization. Lawlar replied, "We try not to guide to the quarter, but we also understand that we've only got 1 quarter left. And that's kind of where our models say we're going to come in."
- Reagor also asked about strong price realizations. Lawlar explained, "There's 2 factors...timing...Greens Creek...ship later in the quarter...we started to utilize more collars as it relates to our provisional hedging, which gave us that upside."
Sentiment Analysis- Analysts probed on cost pressures, labor inflation, and the sustainability of guidance, reflecting a neutral to slightly positive tone, with interest in the company’s operational discipline and exploration pipeline.
- Management’s sentiment was confident and constructive during prepared remarks, consistently describing performance as "record," "exceptional," and "compelling," and stressing operational and financial transformation. Lawlar and Krcmarov were direct and open in Q&A, providing detailed explanations about guidance, cost drivers, and project milestones.
- Compared to the previous quarter, management’s tone shifted from cautious optimism to strong confidence, supported by record results and operational momentum. Analysts' tone remained neutral, focused on clarification and future outlook.
Quarter-over-Quarter Comparison- Guidance for production was tightened in Q3, compared to prior quarter’s maintenance or upward revision without tightening.
- Financial performance advanced from record levels in Q2 (revenue $304 million, net income nearly $58 million, adjusted EBITDA $133 million, free cash flow $104 million) to new records in Q3 (revenue $410 million, net income $101 million, adjusted EBITDA $196 million, free cash flow $90 million).
- Net leverage further improved from 0.7x in Q2 to 0.3x in Q3.
- Strategic focus evolved from portfolio optimization and capital allocation to emphasizing financial flexibility and operational execution.
- Management’s confidence increased, as illustrated by phrases such as "structural derisking" and "capital flexible."
- Analysts continued to focus on operational sustainability, guidance credibility, and exploration priorities, consistent with prior quarter.
Risks and Concerns- Labor cost inflation and competition for skilled workers were cited as ongoing cost pressures.
- Tariff costs on imported capital project components and mining input inflation were mentioned as risks.
- Supply chain bottlenecks were described as muted but present.
- Keno Hill’s commercial production timing remains contingent on achieving multiple operational and permitting milestones.
- Management is actively monitoring capital allocation, project generation, and portfolio rationalization to mitigate risks and maintain flexibility.
Final Takeaway
Hecla Mining reported record quarterly financial results, driven by strong silver and gold prices, cost discipline, and operational momentum across all producing assets. The company achieved a substantial reduction in net leverage and delivered positive free cash flow from every mine for a second straight quarter. Management tightened production guidance and reiterated cost guidance, underscoring confidence in execution and financial flexibility. Strategic investments in exploration, particularly in Nevada, and key operational projects position Hecla for sustained growth and value creation, while ongoing focus on risk mitigation and disciplined capital deployment define the company’s transformation narrative.
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