Hecla Mining Company
Q2 2024 Earnings
Did HL Beat Earnings? Q2 2024 Results
Hecla Mining delivered a mixed second quarter for 2024, posting revenue of $245.66 million, well ahead of the $219.20 million consensus estimate by 12.07% and up 37.9% year over year, yet falling short on the bottom line with earnings per share of $0.02 against analyst expectations of $0.04, a 50% miss. The primary engine behind the revenue strength was a full quarter of Lucky Friday production following its January restart, combined with the ongoing ramp-up at Keno Hill and favorable silver pricing at $29.77 per ounce, which together pushed adjusted EBITDA to $90.89 million and swung free cash flow to a positive $28.30 million from negative $30.51 million in the prior quarter. The EPS shortfall reflected elevated costs at Keno Hill, where quarterly production expenses held near $27.40 million, along with a $3.50 million increase in G&A tied to former CEO retirement-related equity compensation. Looking ahead, Hecla maintained its 2024 silver production guidance of 16.5 to 17.5 million ounces, raised gold guidance to 126,000 to 138,000 ounces, and expects net leverage to return below 2.0x by year-end.
- Full quarter of Lucky Friday production following restart in January 2024, achieving record mill throughput of 1,181 tpd
- Higher realized prices for all metals including silver at $29.77/oz and gold at $2,338/oz
- Keno Hill ramp-up with throughput exceeding 400 tpd and record 900,440 oz of silver produced
- Strong by-product credits reducing consolidated silver cash costs to $2.08/oz
- $17.8 million in Lucky Friday insurance proceeds received during the quarter
“Hecla saw significant improvement in gross profit and free cash flow during the quarter - with our gross profit increasing more than 1.5 times over the prior quarter, and free cash flow generation of $28.3 million, which allowed us to reduce our net debt by $25.1 million. This financial performance was driven by strong results and free cash flow generated at Greens Creek and Lucky Friday, while Keno Hill's ramp-up progressed well with throughput in excess of 400 tpd. With this strong performance and favorable price environment, we will continue our focus on reducing debt while continuing to invest in our operations and exploration programs.”
Hecla Mining CEO, on the earnings call
Forward Guidance & Outlook
Hecla reiterated 2024 silver production guidance of 16.5-17.5 million ounces and increased gold production guidance to 126-138 thousand ounces (from 121-133K) due to the extension of underground operations at Casa Berardi. Consolidated silver cash cost guidance is $3.00-$3.75/oz and AISC guidance is $13.00-$14.50/oz after by-product credits. Total capital expenditure guidance increased to $196-$218 million (from $190-$210M), primarily reflecting higher investment at Keno Hill. At current price levels and expected production, the net leverage ratio is expected to return to below 2.0x by year-end 2024. The company expects to receive the remaining $14.8 million in Lucky Friday insurance proceeds before year-end. Silver production could potentially increase to 20 million ounces by 2026. Keno Hill production costs are expected to remain at $25-$27 million per quarter for the remainder of 2024.
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Figures from SEC filings and company reports. Not investment advice.