HECLA MINING COMPANY
(dollars in thousands, except per share, per ounce
and per pound amounts - unaudited)
Second Quarter Ended Six Months Ended
Highlights -------------------- ----------------
---------- June 30, June 30, June 30, June 30,
Financial Data 2002 2001 2002 2001
-------------- ------- ------- -------- --------
Total revenue $29,348 $25,033 $ 53,139 $ 42,078
Gross profit 7,857 2,358 11,590 3,209
Net income (loss) 4,755 (1,555) 5,241 7,980
Income (loss) from continuing
operations 5,058 (1,288) 6,027 (4,898)
Income (loss) applicable to
common shareholders 2,742 (3,568) 1,216 3,955
Basic and diluted income
(loss) per common share 0.04 (0.05) 0.02 0.06
Cash flow provided by
operating activities 6,056 3,751 6,579 4,008
Sale of Products by Segment
---------------------------
Gold operations $12,037 $11,410 $ 23,310 $ 18,107
Silver operations 16,626 13,151 28,735 22,871
------- ------- -------- --------
Total sales $28,663 $24,561 $ 52,045 $ 40,978
Gross Profit (Loss) by Segment
------------------------------
Gold operations $5,076 $3,108 $ 8,146 $ 4,728
Silver operations 2,781 (750) 3,444 (1,519)
------- ------- -------- --------
Total gross profit $7,857 $2,358 $ 11,590 $ 3,209
OTHER DATA
----------
EBITDA by Segment (1)
---------------------
Gold operations $8,165 $5,866 $ 13,944 $ 9,343
Silver operations 5,823 1,863 9,335 3,631
------- ------- -------- --------
Total EBITDA $13,988 $7,729 $ 23,279 $ 12,974
Production Summary -- Totals
----------------------------
Gold - Ounces 65,323 50,569 121,725 86,152
Silver - Ounces 2,333,573 1,970,062 4,343,571 4,098,457
Lead - Tons 5,298 8,417 9,319 17,446
Zinc - Tons 7,052 5,863 13,367 11,752
Average cost per ounce of
gold produced:
Cash operating costs ($/oz.) 131 131 134 137
Total cash costs ($/oz.) 131 131 134 137
Total production costs
($/oz.) 201 203 204 208
Average cost per ounce of
silver produced(2):
Cash operating costs ($/oz.) 1.90 3.27 2.08 3.22
Total cash costs ($/oz.) 2.00 3.30 2.17 3.23
Total production costs
($/oz.) 3.44 4.71 3.66 4.57
Average Metal Prices
--------------------
Gold - Realized ($/oz.) 304 277 300 278
Gold - London Final ($/oz.) 313 268 302 266
Silver - Handy & Harman
($/oz.) 4.75 4.40 4.63 4.48
Lead - LME Cash (cents/pound) 21.6 22.3 21.4 21.7
Zinc - LME Cash (cents/pound) 36.3 45.3 35.7 44.3
(1) EBITDA represents earnings before interest, income taxes,
depreciation, depletion, amortization and items classified as
other operating expenses not occurring at the operating site. The
company believes EBITDA is helpful in understanding cash flow
generated from operations that is available for income taxes, debt
service, capital expenditures, and other nonsite operating
expenses.
(2) During the second quarter and the first six months of 2002,
approximately $0.2 million and $0.4 million, respectively, of
costs were classified as care-and- maintenance costs and excluded
from the determination of the costs per ounce at the Lucky Friday
mine. Including the care-and-maintenance costs, the cash
operating, total cash and total production costs per ounce total
$1.99, $2.09 and $3.52, respectively, for the second quarter and
$2.18, $2.26 and $3.75, respectively, for the year.
HECLA MINING COMPANY
Consolidated Statements of Operations
(dollars and shares in thousands, except
per share amounts - unaudited)
Second Quarter Ended Six Months Ended
-------------------- ----------------
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
------- ------- ------- --------
Continuing Operations:
Sales of products $28,663 $24,561 $52,045 $40,978
------- ------- ------- -------
Cost of sales and other
direct production costs 14,675 16,832 28,766 28,004
Depreciation, depletion
and amortization 6,131 5,371 11,689 9,765
------- ------- ------- -------
20,806 22,203 40,455 37,769
------- ------- ------- -------
Gross profit 7,857 2,358 11,590 3,209
------- ------- ------- -------
Other operating expenses:
General and administrative 1,767 1,808 3,645 3,322
Exploration 1,206 778 1,730 1,294
Depreciation and
amortization 15 68 67 136
Provision for closed
operations and environmental
matters 148 418 257 991
------- ------- ------- -------
3,136 3,072 5,699 5,743
------- ------- ------- -------
Income (loss) from operations 4,721 (714) 5,891 (2,534)
------- ------- ------- -------
Other income (expense):
Interest and other income 685 472 1,094 1,100
Miscellaneous, net 237 (435) 91 (848)
Interest expense (473) (611) (937) (2,616)
------- ------- ------- -------
449 (574) 248 (2,364)
------- ------- ------- -------
Income (loss) from continuing
operations, before income taxes 5,170 (1,288) 6,139 (4,898)
Income tax provision (112) -- (112) --
------- ------- ------- -------
Income (loss) from continuing
operations 5,058 (1,288) 6,027 (4,898)
Discontinued Operations:
Income (loss), net
of income tax (303) (2) (786) 160
Gain (loss) on disposal,
net of income tax -- (265) -- 12,718
------- ------- ------- -------
Net income (loss) 4,755 (1,555) 5,241 7,980
Preferred stock dividends(1) (2,013) (2,013) (4,025) (4,025)
------- ------- ------- -------
Income (loss) applicable to
common shareholders $2,742 $(3,568) $1,216 $3,955
Basic and diluted income (loss)
per common share:
Income (loss) from continuing
operations after preferred
stock dividends $0.04 ($0.05) $0.03 ($0.13)
Income (loss) from
discontinued operations,
including gain (loss) on
disposal -- -- (0.01) 0.19
------- ------- ------- -------
Basic and diluted income (loss)
per common share $0.04 ($0.05) $0.02 $0.06
======= ======= ======= =======
Weighted average number of common
shares outstanding 75,010 66,839 74,426 66,818
======= ======= ======= =======
(1) For the quarters and six months ended June 30, 2002 and 2001,
preferred stock dividends of $2 million and $4 million,
respectively, were not declared but are included in income (loss)
applicable to common shareholders.
HECLA MINING COMPANY
Consolidated Balance Sheets
(dollars and shares in thousands - unaudited)
Assets June 30, Dec. 31,
-------- 2002 2001
Current assets: -------- --------
Cash and cash equivalents $ 13,073 $ 7,560
Accounts and notes receivable 12,750 6,648
Inventories 14,288 10,868
Other current assets 2,122 1,426
Net assets of discontinued operations 401 2,714
---------- ----------
Total current assets 42,634 29,216
Investments 123 69
Restricted investments 6,375 6,375
Properties, plants and equipment, net 94,049 104,593
Other noncurrent assets 13,047 12,863
---------- ----------
Total assets $ 156,228 $ 153,116
========== ==========
Liabilities
-----------
Current liabilities:
Accounts payable and accrued expenses $ 8,039 $ 7,938
Accrued payroll and related benefits 7,967 7,832
Current portion of long-term debt 6,545 7,043
Accrued taxes 924 787
Current portion of accrued reclamation and
closure costs 6,810 6,026
---------- ----------
Total current liabilities 30,285 29,626
Deferred income taxes 300 300
Long-term debt 7,545 11,948
Accrued reclamation and closure costs 44,925 46,455
Other noncurrent liabilities 6,977 6,823
---------- ----------
Total liabilities 90,032 95,152
---------- ----------
Shareholders' Equity
--------------------
Preferred stock 575 575
Common stock 18,788 18,267
Capital surplus 406,122 404,354
Accumulated deficit (358,940) (364,183)
Accumulated other comprehensive income (loss) (8) 173
Stock held by grantor trust (198) (330)
Unearned stock compensation (25) (6)
Treasury stock (118) (886)
---------- ----------
Total shareholders' equity 66,196 57,964
---------- ----------
Total liabilities and shareholders' equity $ 156,228 $ 153,116
========== ==========
Common shares outstanding at end of period 75,145 73,007
========== ==========
HECLA MINING COMPANY
Consolidated Statements of Cash Flows
(dollars in thousands - unaudited)
Six Months Ended
June 30, June 30,
2002 2001
Operating Activities -------- --------
--------------------
Net income $ 5,241 $ 7,980
Noncash elements included in net income:
Depreciation, depletion and amortization 11,756 9,901
Gain on sale of discontinued operations -- (12,718)
(Gain) loss on disposition of properties, plants
and equipment (185) 17
Provision for reclamation and closure costs 751 476
Change in net assets of discontinued operations 858 1,316
Change in assets and liabilities:
Accounts and notes receivable (6,102) 1,258
Inventories (3,420) (1,256)
Other current and noncurrent assets (886) (338)
Accounts payable and accrued expenses 102 614
Accrued payroll and related benefits 574 451
Accrued taxes 137 131
Accrued reclamation and closure costs and other
noncurrent liabilities (2,247) (3,824)
------- -------
Net cash provided by operating activities 6,579 4,008
------- -------
Investing Activities
--------------------
Proceeds from sale of discontinued operations 1,585 59,761
Additions to properties, plants and equipment (6,070) (12,740)
Proceeds from disposition of properties, plants and
equipment 5,622 239
Increase in restricted investments -- (296)
Purchase of investments and change in cash surrender
value of life insurance, net -- 313
Other, net 137 (97)
------- -------
Net cash provided by investing activities 1,274 47,180
------- -------
Financing Activities
--------------------
Common stock issued under warrants and stock option
plans 2,561 --
Common stock issued, other -- 38
Borrowing on debt 3,300 10,609
Repayment on debt (8,201) (59,803)
------- -------
Net cash used by financing activities (2,340) (49,156)
------- -------
Net increase in cash and cash equivalents 5,513 2,032
Cash and cash equivalents at beginning of period 7,560 1,373
------- -------
Cash and cash equivalents at end of period $ 13,073 $ 3,405
======== =========
HECLA MINING COMPANY
Production Data
Second Quarter Ended Six Months Ended
-------------------- ----------------
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
La Camorra Unit
---------------
Tons of ore processed 51,225 40,789 102,167 77,241
Days of operation 77 84 158 163
Mining cost per ton $42.18 $36.86 $39.25 $34.60
Milling cost per ton $15.82 $19.72 $15.65 $19.04
Ore grade milled - Gold (oz./ton) 0.928 1.009 0.877 0.924
Gold produced (oz.) 45,869 39,912 86,086 67,653
Average cost per ounce
of gold produced:
Cash operating costs $131 $131 $134 $137
Total cash costs $131 $131 $134 $137
Total production costs $201 $203 $204 $208
Greens Creek Unit (Reflects Hecla's 29.73% share)
-------------------------------------------------
Tons of ore milled 54,690 45,726 107,290 93,829
Days of operation 91 91 181 181
Mining cost per ton $28.57 $29.00 $28.77 $30.03
Milling cost per ton $15.36 $20.27 $15.16 $18.86
Ore grade milled
- Silver (oz./ton) 20.07 21.44 20.56 23.90
Silver produced (oz.) 858,565 759,612 1,687,764 1,726,650
Gold produced (oz.) 8,639 6,088 15,715 13,052
Lead produced (tons) 2,408 1,734 4,354 3,621
Zinc produced (tons) 6,412 4,974 12,191 10,092
Average cost per ounce
of silver produced:
Cash operating costs $1.38 $2.45 $1.63 $2.09
Total cash costs $1.45 $2.48 $1.68 $2.11
Total production costs $4.03 $4.95 $4.24 $4.40
San Sebastion Unit (1)
----------------------
Tons of ore processed 43,638 18,065 76,661 21,443
Days of operation 84 44 151 44
Mining cost per ton $37.96 $25.81 $35.69 $24.30
Milling cost per ton $30.71 $39.69 $30.51 $35.31
Ore grade milled
- Silver (oz./ton) 22.39 16.33 23.73 16.26
Ore grade milled
- Gold (oz./ton) 0.28 0.285 0.292 0.283
Silver produced (oz.) 880,805 237,025 1,649,393 281,755
Gold produced (oz.) 10,754 4,439 19,816 5,177
Average cost per ounce
of silver produced:
Cash operating costs $1.07 ($0.80) $1.19 ($1.02)
Total cash costs $1.26 ($0.62) $1.38 ($0.87)
Total production costs $2.25 $0.55 $2.36 $0.11
HECLA MINING COMPANY
Production Data
Second Quarter Ended Six Months Ended
-------------------- ----------------
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
Lucky Friday Unit
-----------------
Tons of ore milled 43,602 73,867 75,190 153,271
Days of operation 78 77 153 154
Mining cost per ton $35.80 $45.79 $39.89 $45.05
Milling cost per ton $6.40 $7.17 $7.07 $7.31
Ore grade milled
- Silver (oz./ton) 14.58 13.95 14.34 14.45
Silver produced (oz.) 594,203 973,425 1,006,414 2,090,052
Lead produced (tons) 2,890 6,683 4,965 13,825
Zinc produced (tons) 640 889 1,176 1,660
Average cost per ounce
of silver produced(2):
Cash operating costs $3.91 $4.90 $4.29 $4.71
Total cash costs $3.91 $4.90 $4.29 $4.71
Total production costs $4.35 $5.54 $4.81 $5.31
(1) Production from the San Sebastian mine commenced in May 2001.
(2) During the second quarter and the first six months of 2002,
approximately $0.2 million and $0.4 million, respectively, of
costs were classified as care-and- maintenance costs and excluded
from the determination of the costs per ounce at the Lucky Friday
mine. Including the care-and-maintenance costs, the cash
operating, total cash and total production costs per ounce total
$4.25, $4.25 and $4.69, respectively, for the second quarter and
$4.70, $4.70 and $5.22, respectively, for the year.
Capital Expenditures
(dollars in thousands)
Six Months Ended
-----------------
June 30, June 30,
-------- --------
Greens Creek (29.73%(a)) 1,398 2,460
La Camorra 3,265 2,718
San Sebastian 1,334 7,434
Other 73 222
-------- --------
Total Capitalized $ 6,070 $ 12,834
======== ========
(a) Hecla's share
Hedged Positions
As of June 30, 2002
Gold: 139,342 ounces hedged @ average price of $288
CONTACT: Hecla Mining Company
Vicki Veltkamp, 208/769-4100
Fax 208/769-7612
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