Hecla Reports Third Quarter 2023 Results

For The Period Ended: September 30, 2023

Hecla Mining Company (NYSE:HL) today announced third quarter 2023 operating and financial results.

THIRD QUARTER HIGHLIGHTS

Operational

• Produced 3.5 million ounces of silver and 11.4 million ounces year to date ("YTD").
• Continued ramping up Keno Hill, producing 0.7 million ounces of silver.
• Casa Berardi began to transition to an open pit only operation, producing 24,259 ounces of gold, with total cost of sales of $56.8 million and an All-in Sustaining Cost ("AISC") per gold ounce of $1,695.⁴
• Lucky Friday on track to resume operations at the beginning of 2024.
• Gold production guidance reiterated, with gold cash cost guidance lowered.
• Greens Creek silver production guidance increased, offset by lower anticipated production at Keno Hill; consolidated silver cost guidance affirmed.

Financial

• Sales of $181.9 million, with 38% from silver and 36% from gold.
• Consolidated silver total cost of sales of $90.7 million and cash cost and AISC per silver ounce (each after by-product credits) of $3.31 and $11.39, respectively.^3,4
• Cash flow from operations of $10.2 million; $74.6 million YTD; with Greens Creek generating $36.1 million in cash flow from operations for the quarter and $122.7 million YTD.
• Greens Creek generated $28.3 million in free cash flow for the quarter, $101.7 million YTD.²
• Net loss applicable to common stockholders of ($22.6) million or ($0.04) per share and adjusted net loss applicable to common stockholders of ($3.5) million or ($0.01) per share.⁵

Strategic

• Recognition of Hecla's innovation with the U.S. patent for the Underhand Closed Bench (UCB) mining method and the 2023 NIOSH Mine Safety and Health Technology Metals Sector Innovation Award.
• Completed the acquisition of ATAC Resources, adding a massive land package of over 700 square miles comprised of the Rackla and Connaught properties in the Yukon.
• All-Injury Frequency Rate of 1.34, 28% lower than the national average.

"Greens Creek reported another strong quarter and has generated over $100 million in free cash flow for the first nine months, our plans for returning Lucky Friday to production in early 2024 are well underway, and we are pleased with the start of the transition to an open pit only operation at Casa Berardi," said Phillips S. Baker Jr., President and CEO. "While exploration drilling at Keno Hill has yielded encouraging results and we expect to increase our reserves and resources, the production ramp-up has been slowed due to key mine infrastructure projects that are just now being completed. However, more importantly, safety performance at Keno Hill has been below Hecla's standards, and we are assessing our safety processes and mining practices to set the mine up for long term success."

Baker continued, "Hecla is already the largest silver producer in the U.S. and will be Canada's largest when Keno Hill achieves full production. Hecla is the fastest-growing established silver producer, and we expect to produce up to 20 million ounces of silver by 2025. Because silver is a key component in solar power generation, which is the fastest growing source of renewable energy, Hecla will be a direct contributor to the energy transition."

FINANCIAL OVERVIEW

In the following table and throughout this release, "total cost of sales" is comprised of cost of sales and other direct production costs and depreciation, depletion and amortization.

Sales in the third quarter increased by 2% to $181.9 million from the second quarter of 2023 ("prior quarter") due to higher realized prices for silver, lead and zinc, and higher gold sales volumes, partially offset by lower realized gold prices and lower sales volumes of silver, lead, and zinc, reflecting the temporary suspension of production at Lucky Friday beginning in August due to a fire in the secondary escapeway and subsequent rehabilitation activities.

Gross profit decreased to $33.5 million, a decrease of 11% over the prior quarter, primarily due to higher depreciation, depletion and amortization at Casa Berardi based on the expectation that underground mining will be completed by mid-2024.

Net loss applicable to common stockholders for the quarter was ($22.6) million, an increase over the prior quarter primarily related to:

• Ramp-up and suspension costs increased by $4.7 million, reflecting the impact of the Lucky Friday suspension, and the ramp-up of Keno Hill, partially offset by Casa Berardi resuming production following a 21-day suspension in June due to the Quebec wildfires.
• Exploration and pre-development expenditures increased by $6.8 million due to increased activity during the summer season.
• Other operating expense of $1.6 million, compared to other operating income of $4.3 million, which included the receipt of $5.9 million from an insurance settlement in the prior quarter.
• Fair value adjustments increased the net loss by $3.8 million due to unrealized losses on our derivative contracts not designated as accounting hedges for $5.2 million, partially offset by unrealized gains on our marketable equity securities portfolio of $1.4 million.

The above items were partly offset by:

• A foreign exchange gain of $4.2 million, compared to a loss of $3.9 million, reflecting the impact of the U.S. dollar appreciation on Canadian dollar denominated monetary assets and liabilities.
• An income and mining tax benefit of $1.5 million compared to an expense of $5.2 million based on taxable losses in Canada.

Consolidated silver total cost of sales in the third quarter decreased by 6% to $90.7 million from the prior quarter, primarily due to lower concentrate tons sold from Lucky Friday. Cash costs and AISC per silver ounce, each after by-product credits, were $3.31 and $11.39, respectively which only include costs of Greens Creek for August and September.^3,4 Consolidated cash costs per ounce were unchanged from the prior quarter as Greens Creek cash costs per ounce were higher due to lower gold by-product credits (attributable to lower production and realized prices), which were offset by lower costs at Lucky Friday due to suspension of operations. Consolidated AISC per silver ounce after by-product credits was further impacted by higher planned sustaining capital spending.^3,4

Consolidated gold total cost of sales increased by 32% to $57.8 million in the third quarter due to two factors. In the prior quarter, Casa Berardi operations were suspended due to the Quebec wildfires. In this quarter, depreciation, depletion and amortization expense is accelerated, reflecting the anticipation of underground mining being completed in mid-2024. Cash costs and AISC per gold ounce, each after by-product credits, were $1,475 and $1,695, respectively.^3,4 The decrease in cash costs per ounce was attributable to higher gold production at Casa Berardi, with AISC also impacted by lower sustaining capital spend.

Adjusted EBITDA for the third quarter decreased to $46.3 million compared to $67.7 million in the prior quarter due to suspension of operations at Lucky Friday and higher exploration and pre-development expenses. The prior quarter was favorably impacted by the monetization of zinc hedges, which realized gross proceeds of $7.6 million.

Cash and cash equivalents at the end of the third quarter were $100.7 million and included $80 million drawn on the revolving credit facility. In the third quarter, the ratio of net debt to Adjusted EBITDA increased over the prior quarter from 2.1 to 2.2. With the ongoing ramp-up at Keno Hill, and Lucky Friday operations expected to be suspended for the remainder of 2023, the Company expects the net debt to Adjusted EBITDA ratio to remain above the Company's target of 2.0 for the remainder of 2023.¹

Cash provided by operating activities was $10.2 million and decreased by $13.5 million over the prior quarter, primarily due to the suspension of production at Lucky Friday.

Capital expenditures, net of finance leases, were $55.4 million in the third quarter, compared to $51.5 million in the prior quarter. Capital spend at Casa Berardi was $16.2 million, primarily for tailings construction activities and mobile equipment purchases for the open pit operations. The increase in Greens Creek's capital spend was related to the timing of equipment purchases and surface projects, with the increase in Lucky Friday's capital spend also impacted by the timing of equipment purchases, the service hoist and coarse ore bunker projects, and the rehabilitation and mitigation work related to the #2 shaft. Keno Hill capital spend was $11.5 million and increased over the prior quarter due to increased spend on mine infrastructure projects, mobile equipment purchases, and modifications related to the secondary crusher as the mine continues to ramp-up.

Free cash flow for the quarter was negative $45.1 million, compared to negative $27.7 million in the prior quarter. The decrease in free cash flow was attributable to the Lucky Friday suspension and higher capital spend.²

Forward Sales Contracts for Base Metals and Foreign Currency

The Company uses financially settled forward sales contracts to manage exposures to zinc and lead price changes in forecasted concentrate shipments. On September 30, 2023, the Company had contracts covering approximately 42% of the forecasted payable lead production from 2023 - 2025 at an average price of $0.98 per pound.

The Company also manages Canadian dollar ("CAD") exposure through forward contracts. On September 30, 2023, the Company had hedged approximately 61% of forecasted Casa Berardi and Keno Hill CAD denominated direct production costs through 2026 at an average CAD/USD rate of 1.36. The Company has also hedged approximately 28% of Casa Berardi and Keno Hill CAD denominated total capital expenditures through 2026 at 1.35.

OPERATIONS OVERVIEW

Greens Creek Mine - Alaska

Greens Creek produced 2.3 million ounces of silver in the third quarter, same as the prior quarter. Gold production decreased by 8% to 15,010 ounces due to lower grades; zinc and lead production was consistent with the prior quarter.

Sales in the third quarter were $96.5 million, in line with the prior quarter as higher realized prices for lead (realized silver price was unchanged) were offset by lower sales volumes of all metals except zinc. Total cost of sales were $60.3 million, a decrease of 4% over the prior quarter primarily due to lower sales volumes. Cash costs and AISC per silver ounce, each after by-product credits, were $3.04 and $8.18 and increased over the prior quarter due to lower gold by-product credits and slightly higher production costs as higher maintenance and contractor costs were partially offset by lower fuel costs. Increased AISC per silver ounce after by-product credits was attributable to higher sustaining capital spend of $11.3 million ($8.7 million in prior quarter) due to timing of equipment purchases and surface projects.^3,4

Cash flow from operations was $36.1 million, a decrease of $7.2 million due to unfavorable working capital changes in the current quarter. Capital spend was $12.1 million during the quarter, an increase of $3.2 million over the prior quarter due to the timing of equipment purchases and seasonal construction projects. Free cash flow for the quarter was $28.3 million, a decrease over the prior quarter due to higher exploration and planned capital spend. Greens Creek has generated $101.7 million in free cash flow for the first nine months of the year.²

The Company is increasing silver production guidance for the mine to 9.8 – 10 million ounces. Cash cost and AISC per ounce (each after by-product credits) guidance for the mine is also increased due to lower than expected zinc and gold production attributable to lower grades due to mine sequencing in the second half of the year. Further details related to guidance are discussed in the Guidance section of the release.

Lucky Friday Mine - Idaho

Lucky Friday produced 0.5 million ounces of silver during the quarter before production was suspended in August. Sales for the quarter were $21.4 million, and the mine generated $0.5 million in cash flow from operations prior to suspension. Costs of $12.0 million were incurred during the remainder of the quarter and are included in ramp-up and suspension costs on the consolidated statement of operations.

Capital expenditures for the quarter were $15.5 million, major projects were the coarse ore bunker, which allows a stockpile of ore to be stored on surface, mobile equipment purchases, the service hoist project, and rehabilitation of the secondary escapeway (#2 shaft). The service hoist and the coarse ore bunker projects are complete.

In August, the Company reported a fire in the secondary escapeway (#2 shaft), which is also used as an exhaust ventilation airway for the mine. The fire was extinguished but damaged the bottom of the shaft. Mitigation plans to bring the mine back into production include developing a new secondary escapeway ramp of 1,600 feet and a 290-foot vertical ladderway to bypass the damaged portion of the secondary escapeway. A vent bypass raise of 850 feet will also be developed to replace the lost ventilation. Capital spend on mitigation plans is expected to be $8-$12 million in the fourth quarter. As of the date of the release, 35% of ramp development and 10% of the escapeway raise was complete. The Company is increasing the capital guidance for the mine to reflect the mitigation plans, details are discussed in the Guidance section below.

Lucky Friday production is suspended for the remainder of 2023 while the new secondary escapeway is completed but the suspension is not expected to materially impact 2024 production. The Company has property and business interruption insurance coverage with an underground sublimit of $50 million.

Casa Berardi - Quebec

Casa Berardi produced 24,259 ounces of gold in the third quarter, an increase of 28% over the prior quarter. The increase was due to the prior quarter being negatively impacted by the wildfire-related road closures. The mill operated at an average of 3,735 tpd during the third quarter compared to 4,600 tpd during the first two months of the prior quarter. The lower throughput in the third quarter is primarily attributable to planned mill maintenance shutdowns. Open pit tons moved during the quarter set a record as the first phase of the in-house equipment fleet was commissioned.

Sales were $46.9 million, a 27% increase over the prior quarter due to higher production. Cost of sales were $56.8 million, 33% higher compared to the prior quarter, attributable to higher production, and an increase in non-cash depreciation, depletion and amortization expense due to amortizing the underground mine assets over a shorter useful life. Cash costs and AISC per gold ounce, each after by-product credits, were $1,475 and $1,695 respectively and decreased over the prior quarter as higher production offset the higher production costs for a full quarter. AISC was further favorably impacted by planned lower sustaining capital spend. ^3,4

Cash flow from operations was $7.9 million, an increase of $16.0 million over the prior quarter due to higher sales volumes and lower per unit costs. Capital spend for the quarter was $16.2 million with $5.1 million and $11.1 million in sustaining and non-sustaining capital spend, respectively. Non-sustaining capital was primarily related to certain construction costs for tailings facilities. Free cash flow for the quarter was negative $6.9 million and improved compared to negative free cash flow in the prior quarter of $27.9 million due to higher cash flow from operations and lower capital spending.²

The Company is lowering the cash cost per ounce guidance for Casa Berardi to reflect the capitalization of certain costs related to the construction of tailings facilities. Further details related to guidance are discussed in the Guidance section of the release.

Keno Hill - Yukon Territory

Keno Hill continued ramping up production in the third quarter, producing 710,012 ounces of silver. Throughput in the quarter averaged 268 tpd with silver grades of 33 ounces per ton. Tonnage mined was constrained by delays in infrastructure construction which has impacted development rates.

Key underground infrastructure projects include the shotcrete plant, which is now complete, and the cemented rockfill plant, which is expected to be completed at the end of November. With the delay in major construction projects, camp facilities at the mine were constrained, which was also a factor in the slower ramp-up of the mine. Modifications to the secondary crushing circuit are substantially complete, and commissioning is underway. The changes are expected to increase crusher availability and efficiency.

Capital spend during the quarter was $11.5 million for underground and surface infrastructure, mine development and equipment purchases.

All-Injury Frequency Rate at the mine trended higher during the quarter and was higher than the Company's standards. An assessment is being made to determine steps necessary to improve safety procedures and evaluate current mining practices, so production guidance is reduced to 1.6-1.8 million ounces of silver. Further details related to guidance are discussed in the Guidance section.

EXPLORATION AND PRE-DEVELOPMENT

Exploration and pre-development expenses totaled $13.7 million for the third quarter of 2023 and $25.5 million YTD. Exploration activities during the quarter primarily focused on surface and underground exploration drilling at Greens Creek, Keno Hill, Casa Berardi, and Aurora.

Keno Hill, Yukon Territory

At Keno Hill, the underground definition and surface exploration drilling programs are focused on extending mineralization, resource conversion in the high-grade Bermingham Bear Zone Veins (Bear, Footwall, and Main Vein Zones), and defining new mineral resources. During the third quarter, two underground drills completed over 13,000 feet of definition and geotechnical drilling, and two surface core drills completed over 23,000 feet of exploration drilling targeting the Bermingham, Bermingham Townsite, Hector-Calumet Chance, and Coral Wigwam target areas.

Bermingham underground definition and exploration drilling on the Bear Zone is extending mineralization to the northeast outside of the current reserve shapes and down-dip on the three mineralized veins reserve shapes. The northeast drilling is expanding high-grade silver mineralization with the discovery of a new high-grade mineralized shoot outside of the current planned stopes which is also open at depth along plunge. Downdip drilling continues to confirm wide and high-grade silver mineralization within the planned stopes and outside of the planned stopes in the area between the veins where strong stockwork mineralization occurs near their intersection. Assay highlights include (reported widths are estimates of true width):

• Bear Vein: 162.8 oz/ton silver, 6.8% lead, and 0.6% zinc over 6.7 feet
• Bear Vein: 59.4 oz/ton silver, 2.4% lead, and 1.2% zinc over 17.2 feet
  • Includes: 279.8 oz/ton silver, 10.4% lead, and 3.3% zinc over 3.4 feet
• Bear Vein: 29.2 oz/ton silver, 1.5% lead, and 1.2% zinc over 10.9 feet
• Footwall Vein: 36.1 oz/ton silver, 2.3% lead, and 1.9% zinc over 36.0 feet
  • Includes: 107.0 oz/ton silver, 7.2% lead, and 1.1% zinc over 9.7 feet
• Footwall Vein: 56.2 oz/ton silver, 4.1% lead, and 3.3% zinc over 17.2 feet
  • Includes: 111.1 oz/ton silver, 4.1% lead, and 8.7% zinc over 5.5 feet
• Footwall Vein: 74.8 oz/ton silver, 8.8% lead, and 11.2% zinc over 7.6 feet
  • Includes: 107.6 oz/ton silver, 12.7% lead, and 8.9% zinc over 5.3 feet
• Main Vein: 23.8 oz/ton silver, 2.1% lead, and 0.7% zinc over 7.2 feet

High-grade silver mineralization has been intersected in both the steep and shallow plunging targets of the Bermingham Townsite Zones and is open for expansion and continues to confirm the exploration potential within the district. Assay highlights include (reported widths are estimates of true width):

• Townsite Shallow Plunge: 29.8 oz/ton silver, 1.0% lead, and 5.3% zinc over 4.6 feet
• Townsite Steep Plunge: 41.2 oz/ton silver, 7.0% lead, and 2.6% zinc over 6.1 feet
• Townsite Steep Plunge: 100.4 oz/ton silver, 22.8% lead, and 1.3% zinc over 3.6 feet

An initial core-hole testing for continuity of the Deep Bermingham vein system intersected mineralized veining 1,050 feet below the existing resource (assays pending). In addition, the favorable Basal Quartzite host stratigraphy was shown to extend a minimum of 350 feet below this where the hole was ended, or 2,850 feet below surface and indicates that significant potential for expansion exists below the current Bermingham resource.

Greens Creek, Alaska

At Greens Creek, drilling has expanded mineralization both from surface and underground. Four underground drills completed over 43,000 feet of drilling in 109 holes focused on resource conversion and exploration that extends mineralization of known resources. Additionally, two helicopter supported drills completed over 11,900 feet of drilling in 21 holes which extended Upper Plate and East ore zones.

Underground drilling completed three drillholes in the 5250 zone to extend mineralization in the upper portion of zone spanning 150 feet of strike length. Only one hole has assay results which shows two zones of ore grade mineralization that should expand mineralization. The other two drillholes intersected very thick sequences of mineralized white ore and massive sulfide ore lithologies above the modeled resource and, though assays are pending, these drillholes should expand mineralization in the zone.

Highlights from the one hole include:

• 20.9 oz/ton silver, 0.08 oz/ton gold, 8.2% zinc, and 2.1% lead over 19.0 feet
• 11.5 oz/ton silver, 0.10 oz/ton gold, 20.4% zinc, and 6.1% lead over 19.6 feet

Surface exploration drilling targeted gaps and margins in the upper part of the East Zone resource in addition to initial follow up drilling on historic drill intercepts. Drilling occurred over a strike length of 1,650 feet and assay results received to date indicate expansion of mineralization in those areas drilled. Highlights from this drilling include:

• 13.4 oz/ton silver, 0.63 oz/ton gold, 29.6% zinc, and 7.5% lead over 18.5 feet
• 7.5 oz/ton silver, 0.24 oz/ton gold, 22.3% zinc, and 4.9% lead over 39.9 feet

Underground drilling targeted the northern, central, and eastern portion of the Upper Plate zone, targeting mineralization for upgrading and expanding resources over 900 feet of strike length. Surface exploration drilling targeted the western extensions of the Upper Plate resource along strike, the northern extensions up-dip, and the southern extensions down-dip of the current resource. Initial drilling results to date indicate that drilling is upgrading and expanding mineralization in the Upper Plate Zone. Highlights from this drilling include:

• 51.0 oz/ton silver, 0.03 oz/ton gold, 4.2% zinc and 2.0% lead over 7.4 feet
• 9.9 oz/ton silver, 0.03 oz/ton gold, 7.8% zinc and 2.4% lead over 23.1 feet
• 10.5 oz/ton silver, 0.02 oz/ton gold, 4.9% zinc and 2.3% lead over 24.5 feet

Detailed complete drill assay highlights can be found in Table A at the end of the release.

DIVIDENDS

Common Stock

The Board of Directors declared a quarterly cash dividend of $0.00625 per share of common stock, consisting of $0.00375 per share for the minimum dividend component and $0.0025 per share for the silver-linked component. The common stock dividend is payable on or about December 7, 2023, to stockholders of record on November 24, 2023. The third quarter realized silver price was $23.71 per ounce, satisfying the criterion for the Company's common stock silver-linked dividend policy component.

Preferred Stock

The Board of Directors declared a quarterly cash dividend of $0.875 per share of preferred stock, payable on or about January 2, 2024, to stockholders of record on December 15, 2023.

2023 GUIDANCE ⁶

The Company has revised its annual silver production and cost guidance as below. There is no change to gold production guidance.

Silver production for Greens Creek is increased to reflect the higher YTD silver production at the mine. Keno Hill silver production guidance is lowered to incorporate the delays to mine infrastructure and initiatives to improve mine safety. Consolidated silver production guidance also reflects the suspension of operations at the Lucky Friday mine for the remainder of the year. Three-year silver and gold production outlook remains unchanged.

2023 Production Outlook Guidance and Three Year Outlook

* Equivalent ounces include Lead and Zinc production

2023 Cost Guidance

At Greens Creek, guidance for cash costs and AISC, per silver ounce (net of by-products) has increased primarily to reflect lower zinc and gold production compared to planned production in the second half of the year with the decrease primarily attributable to lower than expected grades due to mine sequencing. With the suspension of operations at Lucky Friday for the remainder of the year, cash costs and AISC, per silver ounce (net of by-product credits) reflect the actual costs incurred for the first seven months of the year.

At Casa Berardi, decrease in cash costs per gold ounce, after by-product credits, guidance is primarily due to the capitalization of construction costs related to tailings facilities.

2023 Capital, Exploration, Ramp-up, and Suspension Costs Guidance

Consolidated capital and exploration guidance is unchanged. The table below includes suspension cost guidance for Lucky Friday.

CONFERENCE CALL AND WEBCAST

A conference call and webcast will be held on Tuesday, November 7, at 10:00 a.m. Eastern Time to discuss these results. We recommend that you dial in at least 10 minutes before the call commencement. You may join the conference call by dialing toll-free 1-888-330-2391 or for international dialing 1-240-789-2702. The Conference ID is 4812168 and must be provided when dialing in. Hecla's live and archived webcast can be accessed at https://events.q4inc.com/attendee/780742330 or www.hecla.com under Investors.

VIRTUAL INVESTOR EVENT

Hecla will be holding a Virtual Investor Event on Tuesday, November 7, from 12:00 p.m. to 2:00 p.m. Eastern Time.

Hecla invites shareholders, investors, and other interested parties to schedule a personal, 30-minute virtual meeting (video or telephone) with a member of senior management to discuss Financial, Exploration, Operations, ESG or general matters. Click on the link below to schedule a call (or copy and paste the link into your web browser). You can select a topic once you have entered the meeting calendar. If you are unable to book a time, either due to high demand or for other reasons, please reach out to Anvita M. Patil, Vice President, Investor Relations and Treasurer at [email protected] or 208-769-4100.

One-on-One meeting URL: https://calendly.com/2023-nov-vie

ABOUT HECLA

Founded in 1891, Hecla Mining Company (NYSE:HL) is the largest silver producer in the United States. In addition to operating mines in Alaska, Idaho, and Quebec, Canada, the Company is developing a mine in the Yukon, Canada, and owns a number of exploration and pre-development projects in world-class silver and gold mining districts throughout North America.

NOTES

Non-GAAP Financial Measures

Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by United States generally accepted accounting principles ("GAAP"). These measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The non-GAAP financial measures cited in this release and listed below are reconciled to their most comparable GAAP measure at the end of this release.

⁽¹⁾ Adjusted EBITDA is a non-GAAP measurement, a reconciliation of which to net income, the most comparable GAAP measure, can be found at the end of the release. Adjusted EBITDA is a measure used by management to evaluate the Company's operating performance but should not be considered an alternative to net income, or cash provided by operating activities as those terms are defined by GAAP, and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. In addition, the Company may use it when formulating performance goals and targets under its incentive program. Net debt to adjusted EBITDA is a non-GAAP measurement, a reconciliation of which to debt and net income (loss), the most comparable GAAP measurements, can be found at the end of the release. It is an important measure for management to measure relative indebtedness and the ability to service the debt relative to its peers. It is calculated as total debt outstanding less total cash on hand divided by adjusted EBITDA.

⁽²⁾ Free cash flow is a non-GAAP measure calculated as cash provided by operating activities less capital additions. Cash provided by operating activities for the Greens Creek, Lucky Friday, and Casa Berardi operating segments excludes exploration and pre-development expense, as it is a discretionary expenditure and not a component of the mines' operating performance. Capital expenditures refers to Additions to properties, plants and equipment from the Consolidated Statements of Cash Flows, net of finance leases.

⁽³⁾ Cash cost, after by-product credits, per silver and gold ounce is a non-GAAP measurement, a reconciliation of total cost of sales, can be found at the end of the release. It is an important operating statistic that management utilizes to measure each mine's operating performance. It also allows the benchmarking of performance of each mine versus those of our competitors. As a primary silver mining company, management also uses the statistic on an aggregate basis - aggregating the Greens Creek and Lucky Friday mines - to compare performance with that of other silver mining companies, and aggregating Casa Berardi and the Nevada operations, to compare its performance with other gold mining companies. Similarly, the statistic is useful in identifying acquisition and investment opportunities as it provides a common tool for measuring the financial performance of other mines with varying geologic, metallurgical and operating characteristics. In addition, the Company may use it when formulating performance goals and targets under its incentive program.

⁽⁴⁾ All-in sustaining cost (AISC), after by-product credits, is a non-GAAP measurement, a reconciliation of which to total cost of sales, the closest GAAP measurement, can be found in the end of the release. AISC, after by-product credits, includes total cost of sales and other direct production costs, expenses for reclamation at the mine sites and all site sustaining capital costs. AISC, after by-product credits, is calculated net of depreciation, depletion, and amortization and by-product credits. Prior year presentation has been adjusted to conform with current year presentation.

⁽⁵⁾ Adjusted net income (loss) applicable to common stockholders is a non-GAAP measurement, a reconciliation of which to net income (loss) applicable to common stockholders, the most comparable GAAP measure, can be found at the end of the release. Adjusted net income (loss) applicable to common stockholders is a measure used by management to evaluate the Company's operating performance but should not be considered an alternative to net income (loss) applicable to common stockholders as defined by GAAP. They exclude certain impacts which are of a nature which we believe are not reflective of our underlying performance. Management believes that adjusted net income (loss) applicable to common stockholders per common share provides investors with the ability to better evaluate our underlying operating performance.

Current GAAP measures used in the mining industry, such as total cost of goods sold, do not capture all the expenditures incurred to discover, develop and sustain silver and gold production. Management believes that AISC is a non-GAAP measure that provides additional information to management, investors and analysts to help (i) in the understanding of the economics of our operations and performance compared to other producers and (ii) in the transparency by better defining the total costs associated with production. Similarly, the statistic is useful in identifying acquisition and investment opportunities as it provides a common tool for measuring the financial performance of other mines with varying geologic, metallurgical and operating characteristics. In addition, the Company may use it when formulating performance goals and targets under its incentive program.

Other

⁽⁶⁾ Expectations for 2023 include silver, gold, lead and zinc production from Greens Creek, Lucky Friday, Keno Hill, and Casa Berardi converted using Au $1,800/oz, Ag $22/oz, Zn $1.15/lb, and Pb 0.90$/lb, for equivalent ounce calculations and Au $1,950/oz, Ag $24.50/oz, Zn $1.10/lb, and Pb 1.00$/lb, for by-product credit calculations. Numbers are rounded.

Cautionary Statement Regarding Forward Looking Statements, Including 2023 Outlook

This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbor created by such sections and other applicable laws, including Canadian securities laws. Words such as "may", "will", "should", "expects", "intends", "projects", "believes", "estimates", "targets", "anticipates" and similar expressions are used to identify these forward-looking statements. Such forward-looking statements may include, without limitation: (i) Lucky Friday will resume operations by the beginning of 2024; (ii) Ongoing mitigation plans at Lucky Friday will be completed as planned and will cost $8-$12 million, and are not expected to impact 2024 production; (iii) the Company's property insurance policy is expected to cover the majority of expenses (net of deductibles) related to property damage and business interruption at the Lucky Friday; (iv) Greens Creek will achieve throughput of 2,600 tpd by the fourth quarter; (v) Keno Hill's cemented rockfill plant will be completed by end of November; (vi) Modifications to secondary crushing unit at Keno Hill will increase crusher availability and efficiency; (vii) Exploration drilling at Keno Hill will increase reserves and resources at the mine; (viii) Underground mining at Casa Berardi will be completed by mid-2024; (ix) the Company will achieve silver production of 20 million ounces by 2025; (ix) the Company will be Canada's largest silver producer once Keno Hill achieves full production, and will play a pivotal role in producing renewable energy; (x) Net debt to Adjusted EBITDA ratio will remain above the Company's target of 2.00 for the remainder of 2023; and (xi) mine-specific and Company-wide 2023 estimates of future production (and for 2024 and 2025), sales and total cost of sales, as well as cash cost and AISC per ounce (in each case after by-product credits) and Company-wide estimated spending on capital, exploration and pre-development for 2023. The material factors or assumptions used to develop such forward-looking statements or forward-looking information include that the Company's plans for development and production will proceed as expected and will not require revision as a result of risks or uncertainties, whether known, unknown or unanticipated, to which the Company's operations are subject.

Estimates or expectations of future events or results are based upon certain assumptions, which may prove to be incorrect, which could cause actual results to differ from forward-looking statements. Such assumptions, include, but are not limited to: (i) there being no significant change to current geotechnical, metallurgical, hydrological and other physical conditions; (ii) permitting, development, operations and expansion of the Company's projects being consistent with current expectations and mine plans; (iii) political/regulatory developments in any jurisdiction in which the Company operates being consistent with its current expectations; (iv) the exchange rate for the USD/CAD being approximately consistent with current levels; (v) certain price assumptions for gold, silver, lead and zinc; (vi) prices for key supplies being approximately consistent with current levels; (vii) the accuracy of our current mineral reserve and mineral resource estimates; (viii) there being no significant changes to Company plans for 2023 and beyond due to COVID-19 or any other public health issue, including, but not limited to with respect to availability of employees, vendors and equipment; (ix) the Company's plans for development and production will proceed as expected and will not require revision as a result of risks or uncertainties, whether known, unknown or unanticipated; (x) counterparties performing their obligations under hedging instruments and put option contracts; (xi) sufficient workforce is available and trained to perform assigned tasks; (xii) weather patterns and rain/snowfall within normal seasonal ranges so as not to impact operations; (xiii) relations with interested parties, including First Nations and Native Americans, remain productive; (xiv) maintaining availability of water rights; (xv) factors do not arise that reduce available cash balances; and (xvi) there being no material increases in our current requirements to post or maintain reclamation and performance bonds or collateral related thereto.

In addition, material risks that could cause actual results to differ from forward-looking statements include, but are not limited to: (i) gold, silver and other metals price volatility; (ii) operating risks; (iii) currency fluctuations; (iv) increased production costs and variances in ore grade or recovery rates from those assumed in mining plans; (v) community relations; (vi) conflict resolution and outcome of projects or oppositions; (vii) litigation, political, regulatory, labor and environmental risks; (viii) exploration risks and results, including that mineral resources are not mineral reserves, they do not have demonstrated economic viability and there is no certainty that they can be upgraded to mineral reserves through continued exploration; (ix) the failure of counterparties to perform their obligations under hedging instruments; (x) we take a material impairment charge on any of our assets; and (xi) inflation causes our costs to rise more than we currently expect. For a more detailed discussion of such risks and other factors, see the Company's (i) 2022 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 17, 2023. The Company does not undertake any obligation to release publicly, revisions to any "forward-looking statement," including, without limitation, outlook, to reflect events or circumstances after the date of this presentation, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. Investors should not assume that any lack of update to a previously issued "forward-looking statement" constitutes a reaffirmation of that statement. Continued reliance on "forward-looking statements" is at investors' own risk.

Qualified Person (QP)

Kurt D. Allen, MSc., CPG, VP - Exploration of Hecla Mining Company and Keith Blair, MSc., CPG, Chief Geologist of Hecla Limited, who serve as a Qualified Person under S-K 1300 and NI 43-101, supervised the preparation of the scientific and technical information concerning Hecla's mineral projects in this news release. Technical Report Summaries (each a "TRS") for each of the Company's material properties are filed as exhibits 96.1, 96.2 and 96.3 to the Company's 2022 Annual Report on Form 10-K and are available at www.sec.gov. Information regarding data verification, surveys and investigations, quality assurance program and quality control measures and a summary of analytical or testing procedures for (i) the Greens Creek Mine are contained in its TRS and in a NI 43-101 technical report titled "Technical Report for the Greens Creek Mine" effective date December 31, 2018, (ii) the Lucky Friday Mine are contained in its TRS and in its technical report titled "Technical Report for the Lucky Friday Mine Shoshone County, Idaho, USA" effective date April 2, 2014, (iii) Casa Berardi are contained in its TRS and in its technical report titled "Technical Report on the mineral resource and mineral reserve estimate for Casa Berardi Mine, Northwestern Quebec, Canada" effective date December 31, 2018, and (iv) the San Sebastian Mine, Mexico, are contained in a technical report prepared for Hecla titled "Technical Report for the San Sebastian Ag-Au Property, Durango, Mexico" effective date September 8, 2015. Also included in each TRS and the four technical reports is a description of the key assumptions, parameters and methods used to estimate mineral reserves and resources and a general discussion of the extent to which the estimates may be affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant factors. Information regarding data verification, surveys and investigations, quality assurance program and quality control measures and a summary of sample, analytical or testing procedures are contained in technical reports prepared for Klondex Mines Ltd. for (i) the Fire Creek Mine (technical report dated March 31, 2018), (ii) the Hollister Mine (technical report dated May 31, 2017, amended August 9, 2017), and (iii) the Midas Mine (technical report dated August 31, 2014, amended April 2, 2015). Copies of these technical reports are available under Hecla's profile on SEDAR at www.sedar.com. Mr. Allen and Mr. Blair reviewed and verified information regarding drill sampling, data verification of all digitally collected data, drill surveys and specific gravity determinations relating to all the mines. The review encompassed quality assurance programs and quality control measures including analytical or testing practice, chain-of-custody procedures, sample storage procedures and included independent sample collection and analysis. This review found the information and procedures meet industry standards and are adequate for Mineral Resource and Mineral Reserve estimation and mine planning purposes.