# HECLA MINING CO/DE/ (HL) FY 2021 MD&A

Verbatim Item 7 Management's Discussion and Analysis from HECLA MINING CO/DE/'s 10-K for fiscal year 2021.

SEC filing source: https://www.sec.gov/Archives/edgar/data/719413/000143774922004164/hl20211231_10k.htm
Accession: 0001437749-22-004164
Filing date: 2022-02-23
Report date: 2021-12-31
Extracted from a substantive MD&A body after the formal Item 7 span was a TOC or reference stub.
Confidence: high

Company profile: /company/HL/
All MD&A years: /company/HL/mda/
Next year: /company/HL/mda/fy2022/ (FY 2022)

Overview

Established in 1891, we believe we are the oldest operating precious metals mining company in the United States. We are the largest silver producer in the United States, producing over 40% of the U.S. silver at our Greens Creek and Lucky Friday operations. We produce gold at our Casa Berardi operation in Quebec, Canada, and Greens Creek, and at our Nevada Operations segment until suspension of production there during 2021. We also produced silver and gold at San Sebastian in Mexico, which was considered an operating segment prior to 2021. Production ceased in the fourth quarter of 2020, and exploration activities are currently ongoing. San Sebastian's activity for all periods presented in this Annual Report on Form 10-K is included in "other". Based upon our geographic footprint, we believe we have low political and economic risk compared to other mines located in other parts of the world. Our exploration interests are also located in the United States, Canada and Mexico, and are primarily located in historical mining districts. Our operating and strategic framework is based on expanding our production and locating and developing new resource potential in a safe and responsible manner.

2021 Highlights

Operational:

[[GREPCENT_TABLE]]
[["","\u2022","Produced 12.9 million ounces of silver and 201,327 ounces of gold. See Consolidated Results of Operations below for information on cost of sales and other direct production costs and depreciation, depletion and amortization and cash costs and AISC, after by-product credits, per silver and gold ounce for 2021, 2020 and 2019."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","Achieved record throughput at Casa Berardi and gold production of 134,511 ounces, as our mill optimization efforts delivered results."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","Developed the UCB mining method at Lucky Friday, which was utilized for approximately 86% of the tons mined in 2021 and assisted in the improvement of silver production at Lucky Friday by 75% compared to 2020."]]
[[/GREPCENT_TABLE]]

60

[[GREPCENT_TABLE]]
[["","\u2022","Continued our trend of strong safety performance, as our All Injury Frequency Rate (\u201cAIFR\u201d) for 2021 was 1.45, 40% below the U.S. national average for MSHA's \u201cmetal and nonmetal\u201d category and within 15% of the 1.22 in 2020, which was the lowest level in our history."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","Continued mitigation of the impacts of COVID-19 through the encouragement of vaccinations as they became available in the geographic locations where we operate and refinement of our operational plans and procedures to protect our workforce, operations and communities while maintaining liquidity."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","Purchased 300,000 tonnes of carbon offset credits for a total cost of $0.9 million, of which 76,000 tonnes were retired in order for us to be carbon neutral in 2021, leaving an inventory of carbon credits for future retirement to remain carbon neutral in the near term."]]
[[/GREPCENT_TABLE]]

Financial:

[[GREPCENT_TABLE]]
[["","\u2022","Reported sales of products of $807.5 million, the highest in our history, reflecting a full year's production from Lucky Friday."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","Generated $220.3 million in net cash provided by operating activities, the second highest in our history. See the Financial Liquidity and Capital Resources section below for further discussion."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","Reduced the minimum realized silver price threshold of our common stock dividend to $20 from $25 per ounce and added $0.01 per share to the annual silver-linked component, our third dividend increase since June 2020. During 2021, we returned $20.7 million, or 19% of free cash flows to our shareholders."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","Made capital expenditures (excluding lease additions and other non-cash items) of approximately $109.0 million, including $49.6 million at Casa Berardi, $23.9 million at Greens Creek, $29.9 million at Lucky Friday, and $5.5 million at the Nevada Operations."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","Generated $111.3 million in free cash flow with all operations contributing positively. A reconciliation of the non-GAAP measure free cash flow to net cash provided by operating activities, the nearest GAAP measure, is included in the Reconciliation of Cash Flows From Operating Activities (GAAP) to Free Cash Flow (Non-GAAP) section below."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","Spent a record $47.9 million on exploration and pre-development activities, which increased our total reserves for silver by approximately 11.5 million ounces, or 6%, and for gold by approximately 330,000 ounces, or 14%. Total measured and indicated resources decreased by 9% for silver (from its record level in 2020) and by 6% for gold, reflecting conversions to reserves during the year. Total inferred resources increased by 8% for silver and 2% for gold."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","Released $58.4 million of valuation allowance on our deferred tax assets, reflecting our current expectation of utilizing these tax assets."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","Achieved the above while increasing our cash balance to $210.0 million, which was $80.2 million higher than at December 31, 2020, with no amount drawn on our revolving credit facility, as of December 31, 2021."]]
[[/GREPCENT_TABLE]]

Our average realized silver, gold, lead and zinc prices increased in 2021 compared to 2020. Average realized prices for silver and gold were higher, with prices for lead and zinc lower, in 2020 compared to their annual averages in 2019. See the Consolidated Results of Operations section below for information on our average realized metals prices for 2021, 2020 and 2019. Lead and zinc represent important by-products at our Greens Creek and Lucky Friday segments, and gold is also a significant by-product at Greens Creek.

61

See the Consolidated Results of Operations section below for a discussion of the factors impacting income applicable to common stockholders for the three years ended December 31, 2021, 2020 and 2019.

Key Issues Impacting our Business

We seek to achieve our long-term objective of generating financial returns, improving operating performance, and expanding our proven and probable reserves and mineral resources by operating, developing and acquiring long-lived, low-cost mines with large land positions in politically stable jurisdictions. Our strategic plan requires that we manage multiple challenges and risks inherent in conducting mining, development, exploration and metal sales at multiple locations.

We develop our strategic plans in the context of significant uncertainty about future availability of ore to mine and process. To sustain operations, we must find new opportunities that require many years and substantial expenditures from discovery to production. We approach this challenge by investing in exploration and capital in districts with known mineralization. There can be no assurance that we will be able to obtain the permits required to develop or otherwise move forward with exploration projects such as Rock Creek and Montanore. See Item 1A. Risk Factors - Legal challenges could prevent the Rock Creek or Montanore projects from ever being developed.

We strive to achieve excellent mine safety and health performance. We seek to implement this goal by: training employees in safe work practices; establishing, following and improving safety standards; investigating accidents, incidents and losses to avoid recurrence; involving employees in the establishment of safety standards; and participating in the National Mining Association’s CORESafety program. We seek to implement reasonable best practices with respect to mine safety and emergency preparedness. We respond to issues outlined in investigations and inspections by MSHA, the Commission of Labor Standards, Pay Equity and Occupational Health and Safety in Quebec, and the Mexico Ministry of Economy and Mining and continue to evaluate our safety practices. There can be no assurance that our practices will mitigate or eliminate all safety risks. Achieving and maintaining compliance with regulations will be challenging and may increase our operating costs. See Item 1A. Risk Factors - We face substantial governmental regulation, including the Mine Safety and Health Act, various environmental laws and regulations and the 1872 Mining Law.

The COVID-19 pandemic continued to impact our operational practices in 2021, following its outbreak in 2020, as we continue to incur incremental costs and modify our operational plans to keep our workforce safe. In 2020, the pandemic adversely impacted our expected production of gold at Casa Berardi and exploration drilling at Greens Creek. We incurred additional costs of approximately $2.3 million in 2020. During 2021 we incurred incremental costs of $2.4 million at Casa Berardi and $1.0 million at Greens Creek in response to COVID-19. See each segment section below for information on how those operations have been impacted by COVID-19. To mitigate the impact of COVID-19, we have taken precautionary measures, including implementing operational plans and practices and increasing our cash reserves. As long as they are required, the operational practices implemented could continue to have an adverse impact on our operating results due to additional costs or deferred production and revenues. There is uncertainty related to the potential additional impacts COVID-19 and any subsequent variants could have on our operations and financial results for 2022. See Item IA. Risk Factors - Natural disasters, public health crises (including COVID-19), political crises, and other catastrophic events or other events outside of our control may materially and adversely affect our business or financial results and The COVID-19 virus pandemic may heighten other risks for information on how restrictions related to COVID-19 have recently affected some of our operations.

Another risk involves metals prices, over which we have no control except, on a limited basis, through the use of derivative contracts. As discussed in the Critical Accounting Estimates section below, metals prices are influenced by a number of factors beyond our control. While we believe global economic and industrial trends could result in continued demand for the metals we produce, prices have been volatile and there can be no assurance that current prices will continue.

Volatility in global financial markets poses a significant challenge to our ability to access credit and equity markets, should we need to do so, and to predict sales prices for our products.  We utilize forward contracts to manage exposure to declines in the prices of (i) silver, gold, zinc and lead contained in our concentrates that have been shipped but have not yet settled, and (ii) the zinc and lead content that we forecast in future concentrate shipments. In addition, we have $210.0 million of cash and cash equivalents and a $250 million revolving credit agreement, of which $17.3 million was used as of December 31, 2021 for letters of credit, leaving approximately $233.0 million available for borrowing.

62

We had total long-term debt as of December 31, 2021 of $508.1 million, comprised of (i) our Senior Notes having total principal of $475 million which are due in 2028 and bear interest at a rate of 7.25% per year and (ii) our Series 2020-A Senior Notes due July 9, 2025 (the “IQ Notes”) issued to Investissement Québec, a financing arm of the Québec government, which have total principal of CAD$48.2 million and bear interest at a rate of 6.515%. See Note 9 of Notes to Consolidated Financial Statements for more information on our debt arrangements. As discussed in the Financial Liquidity and Capital Resources section below, we believe that we will be able to meet the obligations associated with the Senior Notes, IQ Notes and amounts drawn on our revolving credit facility in the future, if any; however, a number of factors could impact our ability to meet the debt obligations and fund our other projects. See Item 1A. Risk Factors - We have a substantial amount of debt that could impair our financial health and prevent us from fulfilling our obligations under our existing and future indebtedness.

Another challenge for us is the risk associated with environmental litigation and ongoing reclamation activities. As described Item 1A. Risk Factors and in Note 15 of Notes to Consolidated Financial Statements, it is possible that our estimate of these liabilities may change in the future, affecting our strategic plans. We are involved in various environmental legal matters and the estimate of our environmental liabilities and liquidity needs, as well as our strategic plans, may be significantly impacted as a result of these matters or new matters that may arise. For example, the Rock Creek project received an adverse court decision in April 2021 which has delayed our strategic plan to permit, develop or operate that project. Overall, we strive for compliance with applicable laws and regulations and attempt to resolve environmental litigation on terms as favorable to us as possible.

Reserve and resource estimation is a major risk inherent in mining. Our reserve and resource estimates, which underly (i) our mining and investment plans, (ii) the valuation of a significant portion of our long-term assets and (iii) depreciation, depletion and amortization expense, may change based on economic factors and actual production experience. Until ore is mined and processed, the volumes and grades of our reserves and resources must be considered as estimates. Our reserves are depleted as we mine. Reserves and resources can also change as a result of changes in economic and operating assumptions. See Item 1A. Risk Factors - Our ore reserve and resource estimates may be imprecise.

Consolidated Results of Operations

Sales of products by metal for the years ended December 31, 2019, 2020 and 2021, and the approximate variances attributed to differences in metals prices, sales volumes and smelter terms, were as follows:

[[GREPCENT_TABLE]]
[["(in thousands)","","Silver","","","Gold","","","Base metals","","","Less: smelter and refining charges","","","Total sales of products"],["2019","","$","192,235","","","$","388,602","","","$","125,433","","","$","(33,004",")","","$","673,266"],["Variances - 2020 versus 2019:"],["Price","","","53,625","","","","70,219","","","","(14,208",")","","","453","","","","110,089"],["Volume","","","14,367","","","","(102,655",")","","","32,616","","","","(8,106",")","","","(63,778",")"],["Smelter terms","","","","","","","","","","","","","","","(27,704",")","","","(27,704",")"],["2020","","","260,227","","","","356,166","","","","143,841","","","","(68,361",")","","","691,873"],["Variances - 2021 versus 2020:"],["Price","","","43,420","","","","6,483","","","","49,028","","","","49","","","","98,980"],["Volume","","","(10,001",")","","","(612",")","","","7,854","","","","869","","","","(1,890",")"],["Smelter terms","","","","","","","","","","","","","","","18,510","","","","18,510"],["2021","","$","293,646","","","$","362,037","","","$","200,723","","","$","(48,933",")","","$","807,473"]]
[[/GREPCENT_TABLE]]

63

Average market and realized metals prices for 2021, 2020 and 2019 were as follows:

[[GREPCENT_TABLE]]
[["","","","Average price for the year ended December 31,"],["","","","2021","","","2020","","","2019"],["Silver \u2014","London PM Fix ($/ounce)","","$","25.17","","","$","20.51","","","$","16.20"],["","Realized price per ounce","","","25.24","","","","21.15","","","","16.65"],["Gold \u2014","London PM Fix ($/ounce)","","","1,800","","","","1,770","","","","1,392"],["","Realized price per ounce","","","1,796","","","","1,757","","","","1,413"],["Lead \u2014","LME Final Cash Buyer ($/pound)","","","1.00","","","","0.83","","","","0.91"],["","Realized price per pound","","","1.03","","","","0.84","","","","0.91"],["Zinc \u2014","LME Final Cash Buyer ($/pound)","","","1.36","","","","1.03","","","","1.16"],["","Realized price per pound","","","1.44","","","","1.03","","","","1.14"]]
[[/GREPCENT_TABLE]]

Average realized prices differ from average market prices primarily because concentrate sales are generally recorded as revenues at the time of shipment at forward prices for the estimated month of settlement, which differ from average market prices. Due to the time elapsed between shipment of concentrates and final settlement with customers, we must estimate the prices at which sales of our metals will be settled.  Previously recorded sales are adjusted to estimated settlement metals prices each period through final settlement. We recorded net positive price adjustments to provisional settlements of $9.3 million, $8.0 million and $0.6 million in 2021, 2020 and 2019, respectively. The price adjustments related to silver, gold, zinc and lead contained in our concentrate sales were largely offset by gains and losses on forward contracts for those metals for each year (see Note 10 of Notes to Consolidated Financial Statements for more information).  The gains and losses on these contracts are included in revenues and impact the realized prices for silver, gold, lead and zinc.  Realized prices are calculated by dividing gross revenues for each metal (which include the price adjustments and gains and losses on the forward contracts discussed above) by the payable quantities of each metal included in products sold during the period.

Total metals production and sales volumes for each period are shown in the following table:

[[GREPCENT_TABLE]]
[["","","","Year Ended December 31,"],["","","","2021","","","2020","","","2019"],["Silver -","Ounces produced","","","12,887,240","","","","13,542,957","","","","12,605,234"],["","Payable ounces sold","","","11,633,802","","","","12,305,917","","","","11,548,373"],["Gold -","Ounces produced","","","201,327","","","","208,962","","","","272,873"],["","Payable ounces sold","","","201,610","","","","202,694","","","","275,060"],["Lead -","Tons produced","","","43,010","","","","34,127","","","","24,210"],["","Payable tons sold","","","36,707","","","","29,108","","","","19,746"],["Zinc -","Tons produced","","","63,617","","","","63,112","","","","58,857"],["","Payable tons sold","","","43,626","","","","46,349","","","","39,381"]]
[[/GREPCENT_TABLE]]

The difference between what we report as “ounces/tons produced” and “payable ounces/tons sold” is attributable to the difference between the quantities of metals contained in our products versus the portion of those metals actually paid for by our customers according to the terms of our sales contracts. Differences can also arise from inventory changes incidental to shipping schedules, or variances in ore grades which impact the amount of metals contained in concentrates produced and sold.

64

Sales, total cost of sales, gross profit, Cash Cost, After By-product Credits, per Ounce (“Cash Cost”) (non-GAAP) and All-In Sustaining Cost, After By-product Credits, per Ounce (“AISC”) (non-GAAP) at our operations for 2021, 2020 and 2019 were as follows (in thousands, except for Cash Cost and AISC):

[[GREPCENT_TABLE]]
[["","","Silver","","","Gold"],["","","Greens Creek","","","Lucky Friday","","","Other (4)","","","Total Silver (2)","","","Casa Berardi","","","Nevada Operations","","","Total Gold"],["2021:"],["Sales","","$","384,843","","","$","131,488","","","$","176","","","$","516,507","","","$","245,152","","","$","45,814","","","$","290,966"],["Cost of sales and other direct production costs and depreciation, depletion and amortization","","","(213,113",")","","","(97,538",")","","","(247",")","","","(310,898",")","","","(229,829",")","","","(48,945",")","","","(278,774",")"],["Gross profit","","$","171,730","","","$","33,950","","","$","(71",")","","","205,609","","","$","15,323","","","$","(3,131",")","","$","12,192"],["Cash Cost, After By-product Credits, per Silver or Gold Ounce (1)","","$","(0.65",")","","$","6.60","","","","","","","$","1.37","","","$","1,125","","","$","1,137","","","$","1,127"],["AISC, After By-product Credits, per Silver or Gold Ounce (1)","","$","3.19","","","$","14.34","","","","","","","$","9.19","","","$","1,399","","","$","1,211","","","$","1,374"],["2020:"],["Sales","","$","327,820","","","$","63,025","","","$","32,906","","","$","423,751","","","$","209,224","","","$","58,898","","","$","268,122"],["Cost of sales and other direct production costs and depreciation, depletion and amortization (3)","","","(210,748",")","","","(56,706",")","","","(24,104",")","","","(291,558",")","","","(194,414",")","","","(44,801",")","","","(239,215",")"],["Gross profit (loss)","","$","117,072","","","$","6,319","","","$","8,802","","","","132,193","","","$","14,810","","","$","14,097","","","$","28,907"],["Cash Cost, After By-product Credits, per Silver or Gold Ounce (1)","","$","4.88","","","$","9.34","","","","","","","$","5.18","","","$","1,131","","","$","716","","","$","1,045"],["AISC, After By-product Credits, per Silver or Gold Ounce (1)","","$","7.97","","","$","18.22","","","","","","","","11.37","","","$","1,436","","","$","787","","","$","1,302"],["2019:"],["Sales","","$","299,722","","","$","16,621","","","$","56,210","","","$","372,553","","","$","192,944","","","$","107,769","","","$","300,713"],["Cost of sales and other direct production costs and depreciation, depletion and amortization (3)","","","(209,355",")","","","(16,621",")","","","(50,509",")","","","(276,485",")","","","(209,615",")","","","(153,336",")","","","(362,951",")"],["Gross profit (loss)","","$","90,367","","","$","\u2014","","","$","5,701","","","$","96,068","","","$","(16,671",")","","$","(45,567",")","","$","(62,238",")"],["Cash Cost, After By-product Credits, per Silver or Gold Ounce (1)","","$","1.74","","","$","\u2014","","","","","","","$","2.73","","","$","1,051","","","$","1,096","","","$","1,066"],["AISC, After By-product Credits, per Silver or Gold Ounce (1)","","$","5.76","","","$","\u2014","","","","","","","$","9.93","","","$","1,354","","","$","1,527","","","$","1,411"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","(1)","A reconciliation of these non-GAAP measures to cost of sales and other direct production costs and depreciation, depletion and amortization, the most comparable GAAP measure, can be found below in Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP)."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","(2)","The calculation of AISC, After By-product Credits, per Ounce for our consolidated silver properties includes corporate costs for general and administrative expense and sustaining exploration and capital costs."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","(3)","See Note 3 of Notes to Consolidated Financial Statements for information on revisions to amounts previously reported for cost of sales and other direct production costs and depreciation, depletion and amortization."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","(4)","Includes results for San Sebastian, which was an operating segment prior to 2021."]]
[[/GREPCENT_TABLE]]

65

While revenue from zinc, lead and gold by-products is significant, we believe that identification of silver as the primary product of Greens Creek and Lucky Friday is appropriate because:

[[GREPCENT_TABLE]]
[["","\u2022","silver has historically accounted for a higher proportion of revenue than any other metal and is expected to do so in the future;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","we have historically presented each of these mines as a primary silver producer, based on the original analysis that justified putting the project into production, and believe that consistency in disclosure is important to our investors regardless of the relationships of metals prices and production from year to year;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","metallurgical treatment maximizes silver recovery;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","the Greens Creek and Lucky Friday deposits are massive sulfide deposits containing an unusually high proportion of silver; and in most of their working areas, Greens Creek and Lucky Friday utilize selective mining methods in which silver is the metal targeted for highest recovery."]]
[[/GREPCENT_TABLE]]

Accordingly, we believe the identification of zinc, lead and gold as by-product credits at Greens Creek and Lucky Friday is appropriate because of their lower economic value compared to silver and due to the fact that silver is the primary product we intend to produce. In addition, we have not consistently received sufficient revenue from any single by-product metal to warrant classification of such as a co-product.

We periodically review our revenues to ensure that reporting of primary products and by-products is appropriate. Because for Greens Creek and Lucky Friday we consider zinc, lead and gold to be by-products of our silver production, the values of these metals offset operating costs within our calculations of Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce.

We believe the identification of silver as a by-product credit is appropriate at Casa Berardi and the Nevada Operations because of its lower economic value compared to gold and because gold is the primary product we intend to produce there. In addition, we do not receive sufficient revenue from silver at Casa Berardi or the Nevada Operations to warrant classification of such as a co-product. Because we consider silver to be a by-product of our gold production at Casa Berardi and Nevada Operations, the value of silver offsets operating costs within our calculations of Cash Cost, After By-product Credits, per Gold Ounce and AISC, After By-product Credits, per Gold Ounce.

For the year ended December 31, 2021, we reported income applicable to common stockholders of $34.5 million compared to losses of $10.0 million and $95.5 million in 2020 and 2019, respectively. The following factors contributed to those differences:

[[GREPCENT_TABLE]]
[["","\u2022","Variances in gross profit (loss) at our operations as illustrated in the table above. See the Greens Creek, Lucky Friday, Casa Berardi, and Nevada Operations sections below."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","Exploration and pre-development expense of $47.9 million, $18.3 million and $19.1 million in 2021, 2020 and 2019, respectively. In 2021, exploration was primarily at San Sebastian, Casa Berardi, Greens Creek, Nevada Operations and Kinskuch, while pre-development expense included $7.7 million related to development of the decline to allow drilling of the Hatter Graben area in Nevada."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","Provision for closed operations and environmental matters of $14.6 million in 2021 compared to $3.9 million in 2020 and $4.7 million in 2019, with the increase in 2021 due to (i) a $2.1 million increase in the accrual for estimated reclamation costs at the Troy Mine, (ii) a $6.5 million settlement of a lawsuit related to a 1989 agreement entered into by our subsidiary, CoCa Mines, Inc., and its subsidiary, Creede Resources, Inc. and (iii) a $2.9 million increase in the accrual for estimated costs at the Johnny M site in New Mexico (see Note 15 of Notes to Consolidated Financial Statements for more information)."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","Other operating expense of $14.2 million, $10.9 million and $4.2 million in 2021, 2020 and 2019, respectively, with the increases in 2021 and 2020 primarily due to costs for projects to identify and implement potential operational improvements at Casa Berardi and Lucky Friday. In addition, in June 2020, we gifted and expensed 650,000 shares of our common stock valued at $2.0 million at the time of the gift to the Hecla Charitable Foundation."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","Ramp-up and suspension costs of $23.0 million, $24.9 million and $12.1 million in 2021, 2020 and 2019, respectively. 2021 includes a full year of care and maintenance for Nevada and San Sebastian. In 2020 Nevada and San Sebastian were placed on care-and-maintenance, with 2020 also including costs related to ramp-up activities at Lucky Friday and government COVID-19 suspension orders impacting Casa Berardi and San Sebastian. 2019 costs were related to the Lucky Friday strike."]]
[[/GREPCENT_TABLE]]

66

[[GREPCENT_TABLE]]
[["","\u2022","Fair value adjustments, net resulted in a loss of $35.8 million in 2021 compared to $11.8 million in 2020 and $5.4 million in 2019. The components for each period are summarized in the following table (in thousands):"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","","Year Ended December 31,"],["","","2021","","","2020","","","2019"],["Loss on derivative contracts","","$","(32,655",")","","$","(22,074",")","","$","(3,971",")"],["Unrealized (loss) gain on investments in equity securities","","","(4,295",")","","","10,268","","","","(2,389",")"],["Gain on disposition or exchange of investments","","","1,158","","","","\u2014","","","","923"],["Total fair value adjustments, net","","$","(35,792",")","","$","(11,806",")","","$","(5,437",")"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","Net foreign exchange gain of $0.4 million in 2021 compared to losses of $4.6 million and $8.2 million in 2020 and 2019, respectively, on translation of our monetary assets and liabilities at Casa Berardi and San Sebastian."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","Interest expense of $41.9 million, $49.6 million and $48.4 million in 2021, 2020 and 2019, respectively. The interest in 2021 and 2020 was primarily related to our Senior Notes, and the interest in 2019 was primarily related to our previously outstanding 2021 Notes (see Note 9 of Notes to Consolidated Financial Statements and Guarantor Subsidiaries below). The higher expense in 2020 was primarily due to (i) interest recognized on both the Senior Notes and 2021 Notes for an overlapping period of almost one month, as the Senior Notes were issued on February 19, 2020 and the 2021 Notes were redeemed on March 19, 2020, (ii) $1.7 million in unamortized initial purchaser discount on the 2021 Notes recognized as expense upon their redemption and (iii) higher interest related to amounts drawn on our revolving credit facility."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","Income tax benefit of $29.6 million in 2021 compared to a provision of $8.2 million in 2020 and a benefit of $18.3 million in 2019, with the benefit in 2021 including $58.4 million for a reduction in the valuation allowance for U.S. deferred tax assets. See Corporate Matters and Note 7 of Notes to Consolidated Financial Statements for more information."]]
[[/GREPCENT_TABLE]]

67

Greens Creek

[[GREPCENT_TABLE]]
[["Dollars are in thousands (except per ounce and per ton amounts)","","Years Ended December 31,"],["","","2021","","","2020","","","2019"],["Sales","","$","384,843","","","$","327,820","","","$","299,722"],["Cost of sales and other direct production costs","","","(164,403",")","","","(161,056",")","","","(161,768",")"],["Depreciation, depletion and amortization","","","(48,710",")","","","(49,692",")","","","(47,587",")"],["Cost of sales and other direct production costs and depreciation, depletion and amortization","","","(213,113",")","","","(210,748",")","","","(209,355",")"],["Gross Profit","","$","171,730","","","$","117,072","","","$","90,367"],["Tons of ore milled","","","841,967","","","","818,408","","","","846,076"],["Production:"],["Silver (ounces)","","","9,243,222","","","","10,494,726","","","","9,890,125"],["Gold (ounces)","","","46,088","","","","48,491","","","","56,625"],["Zinc (tons)","","","53,648","","","","56,814","","","","56,805"],["Lead (tons)","","","19,873","","","","21,400","","","","20,112"],["Payable metal quantities sold:"],["Silver (ounces)","","","8,284,551","","","","9,385,404","","","","8,786,377"],["Gold (ounces)","","","40,149","","","","42,407","","","","47,934"],["Zinc (tons)","","","36,581","","","","41,832","","","","37,848"],["Lead (tons)","","","15,489","","","","17,415","","","","16,414"],["Ore grades:"],["Silver ounces per ton","","","13.51","","","","15.65","","","","14.64"],["Gold ounces per ton","","","0.08","","","","0.08","","","","0.10"],["Zinc percent","","","7.11","","","","7.58","","","","7.43"],["Lead percent","","","2.87","","","","3.13","","","","2.92"],["Total production cost per ton","","$","177.30","","","$","179.37","","","$","174.28"],["Cash Cost, After By-product Credits, per Silver Ounce (1)","","$","(0.65",")","","$","4.88","","","$","1.74"],["AISC, After By-Product Credits, per Silver Ounce (1)","","$","3.19","","","$","7.97","","","$","5.76"],["Capital additions","","$","23,883","","","$","19,685","","","$","29,323"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","(1)","A reconciliation of these non-GAAP measures to cost of sales and other direct production costs and depreciation, depletion and amortization, the most comparable GAAP measure, can be found below in Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP). At Greens Creek, gold, zinc and lead are considered to be by-products of our silver production, and the values of those metals therefore offset operating costs within our calculations of Cash Cost and AISC, After By-product Credits, per Silver Ounce."]]
[[/GREPCENT_TABLE]]

The $51.6 million and $78.3 million increases in gross profit for 2021 compared to 2020 and 2019, respectively, were due to higher realized prices for silver, gold, lead and zinc. The higher gross profit for 2021 compared to 2020 was also impacted by favorable changes in concentrate smelter terms which contributed $23.3 million to gross profit. The impacts of the factors above were partially offset by lower metal sales volume primarily due to lower ore grades.

68

The chart below illustrates the factors contributing to the variances in Cash Cost, After By-product Credits, Per Silver Ounce for 2021 compared to 2020 and 2019:

The following table summarizes the components of Cash Cost, After By-product Credits, per Silver Ounce:

[[GREPCENT_TABLE]]
[["","","Years Ended December 31,"],["","","2021","","","2020","","","2019"],["Cash Cost, Before By-product Credits, per Silver Ounce","","$","21.33","","","$","22.24","","","$","20.89"],["By-product credits per silver ounce","","","(21.98",")","","","(17.36",")","","","(19.15",")"],["Cash Cost, After By-product Credits, per Silver Ounce","","$","(0.65",")","","$","4.88","","","$","1.74"]]
[[/GREPCENT_TABLE]]

The following table summarizes the components of AISC, After By-product Credits, per Silver Ounce:

[[GREPCENT_TABLE]]
[["","","Years Ended December 31,"],["","","2021","","","2020","","","2019"],["AISC, Before By-product Credits, per Silver Ounce","","$","25.17","","","$","25.33","","","$","24.91"],["By-product credits per silver ounce","","","(21.98",")","","","(17.36",")","","","(19.15",")"],["AISC, After By-product Credits, per Silver Ounce","","$","3.19","","","$","7.97","","","$","5.76"]]
[[/GREPCENT_TABLE]]

The decrease in Cash Costs and AISC, After By-product Credits, per Silver Ounce in 2021 compared to 2020 and 2019 was primarily due to higher by-product credits and lower treatment costs.

Restrictions imposed by the State of Alaska beginning in late March 2020 in response to the COVID-19 virus pandemic, including the requirement for employees returning to Alaska to self-quarantine for 14 days (changed in June 2020 to 7 days and subsequently discontinued), caused us to revise the normal operating procedures and incur additional costs for staffing operations at Greens Creek, including for quarantining employees from late March 2020 through the second quarter of 2021. In addition, manpower challenges impacted mine operations during the third quarter of 2021, and, although they were substantially mitigated in the fourth quarter, they could continue to have an impact. The changes at Greens Creek have not materially impacted our operations to date; however, restrictions and other challenges related to COVID-19 and increased competition for labor could have a material impact if they continue longer than anticipated or become broader.

69

Lucky Friday

[[GREPCENT_TABLE]]
[["Dollars are in thousands (except per ounce and per ton amounts)","","Years Ended December 31,"],["","","2021","","","2020","","","2019"],["Sales","","$","131,488","","","$","63,025","","","$","16,621"],["Cost of sales and other direct production costs","","","(70,692",")","","","(45,233",")","","","(15,446",")"],["Depreciation, depletion and amortization","","","(26,846",")","","","(11,473",")","","","(1,175",")"],["Cost of sales and other direct production costs and depreciation, depletion and amortization","","","(97,538",")","","","(56,706",")","","","(16,621",")"],["Gross profit","","$","33,950","","","$","6,319","","","$","\u2014"],["Tons of ore milled","","","321,837","","","","179,208","","","","57,091"],["Production:"],["Silver (ounces)","","","3,564,128","","","","2,031,874","","","","632,944"],["Lead (tons)","","","23,137","","","","12,727","","","","4,098"],["Zinc (tons)","","","9,969","","","","6,298","","","","2,052"],["Payable metal quantities sold:"],["Silver (ounces)","","","3,288,261","","","","1,866,883","","","","517,074"],["Lead (tons)","","","21,218","","","","11,692","","","","3,332"],["Zinc (tons)","","","7,046","","","","4,517","","","","1,532"],["Ore grades:"],["Silver ounces per ton","","","11.64","","","","11.85","","","","11.83"],["Lead percent","","","7.60","","","","7.49","","","","7.86"],["Zinc percent","","","3.44","","","","3.88","","","","4.25"],["Total production cost per ton","","$","191.50","","","$","251.49","","","$","\u2014"],["Cash Cost, After By-product Credits, per Silver Ounce (1)","","$","6.60","","","$","9.34","","","$","\u2014"],["AISC, After By-product Credits, per Silver Ounce (1)","","$","14.34","","","$","18.22","","","$","\u2014"],["Capital additions","","$","29,885","","","$","25,776","","","$","8,989"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","(1)","A reconciliation of these non-GAAP measures to cost of sales and other direct production costs and depreciation, depletion and amortization, the most comparable GAAP measure, can be found below in Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP). At Lucky Friday, lead and zinc are considered to be by-products of our silver production, and the values of those metals therefore offset operating costs within our calculations of Cash Cost and AISC, After By-product Credits, per Silver Ounce."]]
[[/GREPCENT_TABLE]]

The increases in gross profit, ore tonnage and metal production for 2021 compared to 2020 and 2019 are the result of returning to full production during the fourth quarter of 2020 (discussed further below). Sales were higher for 2021 compared to 2020 and 2019 by $68.5 million and $114.9 million, respectively, due to increased production, and higher realized prices for silver, lead and zinc in 2021 compared to the two prior years.

The chart below illustrates the factors contributing to the variances in Cash Cost, After By-product Credits, Per Silver Ounce for 2021 and the fourth quarter of 2020. Total production cost per ton, Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits per Silver Ounce are not presented for 2019 and the first three quarters of 2020, as production was limited due to the strike and results are not comparable.

70

The following table summarizes the components of Cash Cost, After By-product Credits, per Silver Ounce:

[[GREPCENT_TABLE]]
[["","","Year Ended December 31,","","","Three Months Ended December 31,"],["","","2021","","","2020"],["Cash Cost, Before By-product Credits, per Silver Ounce","","$","24.12","","","","24.63"],["By-product credits per silver ounce","","","(17.52",")","","","(15.29",")"],["Cash Cost, After By-product Credits, per Silver Ounce","","$","6.60","","","$","9.34"]]
[[/GREPCENT_TABLE]]

The following table summarizes the components of AISC, After By-product Credits, per Silver Ounce:

[[GREPCENT_TABLE]]
[["","","Year Ended December 31,","","","Three Months Ended December 31,"],["","","2021","","","2020"],["AISC, Before By-product Credits, per Silver Ounce","","$","31.86","","","$","33.51"],["By-product credits per silver ounce","","","(17.52",")","","","(15.29",")"],["AISC, After By-product Credits, per Silver Ounce","","$","14.34","","","$","18.22"]]
[[/GREPCENT_TABLE]]

The decreases in Cash Cost and AISC, After By-product Credits, per Silver Ounce in 2021 compared to the fourth quarter of 2020 are due to increased silver production and higher by-product credits.

Following settlement of the unionized employees' strike in early 2020, we commenced restaffing and ramp-up procedures and the mine returned to full production in the fourth quarter of 2020. During the strike, which lasted from March 13, 2017 until January 7, 2020, when the union ratified a new collective bargaining agreement, salaried personnel performed limited production and capital improvements. Costs related to ramp-up activities totaled $8.0 million in 2020, and suspension-related costs during the strike in 2019 totaled $12.1 million, which included non-cash depreciation expense of $6.3 million and $4.3 million, respectively, for those years, and are reported in a separate line item on our consolidated statements of operations. These ramp-up and suspension costs are excluded from the calculation of gross profit, total production cost per ton, Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce, when presented. 

71

Casa Berardi

[[GREPCENT_TABLE]]
[["Dollars are in thousands (except per ounce and per ton amounts)","","Years Ended December 31,"],["","","2021","","","2020","","","2019"],["Sales","","$","245,152","","","$","209,224","","","$","192,944"],["Cost of sales and other direct production costs","","","(149,085",")","","","(133,862",")","","","(143,722",")"],["Depreciation, depletion and amortization","","","(80,744",")","","","(60,552",")","","","(65,893",")"],["Cost of sales and other direct production costs and depreciation, depletion and amortization","","","(229,829",")","","","(194,414",")","","","(209,615",")"],["Gross profit (loss)","","$","15,323","","","$","14,810","","","$","(16,671",")"],["Tons of ore milled","","","1,528,246","","","","1,283,701","","","","1,378,065"],["Production:"],["Gold (ounces)","","","134,511","","","","121,492","","","","134,409"],["Silver (ounces)","","","33,571","","","","24,142","","","","31,540"],["Payable metal quantities sold:"],["Gold (ounces)","","","135,987","","","","117,671","","","","137,444"],["Silver (ounces)","","","30,022","","","","25,659","","","","25,320"],["Ore grades:"],["Gold ounces per ton","","","0.104","","","","0.117","","","","0.120"],["Silver ounces per ton","","","0.03","","","","0.02","","","","0.03"],["Total production cost per ton","","$","98.60","","","$","105.71","","","$","101.13"],["Cash Cost, After By-product Credits, per Gold Ounce (1)","","$","1,125","","","$","1,131","","","$","1,051"],["AISC, After By-product Credits, per Gold Ounce (1)","","$","1,399","","","$","1,436","","","$","1,354"],["Capital additions","","$","49,617","","","$","40,840","","","$","36,059"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","(1)","A reconciliation of these non-GAAP measures to cost of sales and other direct production costs and depreciation, depletion and amortization, the most comparable GAAP measure, can be found below in Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP). At Casa Berardi, silver is considered to be a by-product of our gold production, and the value of silver therefore offsets operating costs within our calculations of Cash Cost and AISC, After By-product Credits, per Gold Ounce."]]
[[/GREPCENT_TABLE]]

Gross profit increased in 2021 compared to 2020 due to higher average realized gold prices and increase gold production, partially offset by higher cost of sales. The increase in gross profit in 2021 compared to 2019 was primarily due to higher average gold prices, partially offset by higher cost of sales. The higher cost of sales in 2021 resulted from increased production costs due to: (i) increase in ore tonnage by 19% and 11% compared to 2020 and 2019, respectively, (ii) mill contractor costs related to maintenance and optimization activities, and (iii) higher underground maintenance costs resulting from repairs and replacements of major components for the production fleet. Depreciation, depletion and amortization expense was also higher in 2021 compared to 2020 and 2019 due to the impact of lower reserves in 2021 on units-of-production depreciation and asset additions, with the increase compared to 2020 also due to higher sales quantities. The lower production in 2020 was partially due to a government COVID-19-related order. We suspended operations at Casa Berardi from March 24, 2020 until April 15, 2020, in response to the Government of Quebec’s COVID-19 order for the mining industry. The suspension-related costs totaling $1.6 million for 2020 are reported in a separate line item on our consolidated statements of operations and excluded from the calculations of cost of sales and other direct production costs and depreciation, depletion and amortization, total production cost per ton, and Cash Cost and AISC, After By-product Credits, per Gold Ounce.

Total capital additions increased by $8.8 million and $13.6 million in 2021 compared to 2020 and 2019, respectively, primarily due to growth capital costs incurred for development of the new 160 zone open pit mine. Ore production from the 160 zone pit commenced in the fourth quarter of 2021.

72

The chart below illustrates the factors contributing to Cash Cost, After By-product Credits, Per Gold Ounce for 2021, 2020 and 2019:

The following table summarizes the components of Cash Cost, After By-product Credits, per Gold Ounce:

[[GREPCENT_TABLE]]
[["","","Years Ended December 31,"],["","","2021","","","2020","","","2019"],["Cash Cost, Before By-product Credits, per Gold Ounce","","$","1,131","","","$","1,135","","","$","1,055"],["By-product credits per gold ounce","","","(6",")","","","(4",")","","","(4",")"],["Cash Cost, After By-product Credits, per Gold Ounce","","$","1,125","","","$","1,131","","","$","1,051"]]
[[/GREPCENT_TABLE]]

The following table summarizes the components of AISC, After By-product Credits, per Gold Ounce:

[[GREPCENT_TABLE]]
[["","","Years Ended December 31,"],["","","2021","","","2020","","","2019"],["AISC, Before By-product Credits, per Gold Ounce","","$","1,405","","","$","1,440","","","$","1,358"],["By-product credits per gold ounce","","","(6",")","","","(4",")","","","(4",")"],["AISC, After By-product Credits, per Gold Ounce","","$","1,399","","","$","1,436","","","$","1,354"]]
[[/GREPCENT_TABLE]]

The decrease in Cash Cost and AISC, After By-product Credits, per Gold Ounce for 2021 compared to 2020 was due to higher gold production, partially offset by higher production costs, as discussed above, with AISC, After By-product Credits, per Gold Ounce also impacted by lower sustaining capital, offset by higher exploration. The increase in Cash Cost and AISC, After By-product Credits, per Gold Ounce for 2021 compared to 2019 was due to higher production costs, with AISC, After By-product Credits, per Gold Ounce also impacted by higher exploration, partially offset by lower sustaining capital.

73

Nevada Operations

[[GREPCENT_TABLE]]
[["Dollars are in thousands (except per ounce and per ton amounts)","","Year Ended December 31,"],["","","2021","","","2020","","","2019"],["Sales","","$","45,814","","","$","58,898","","","$","107,769"],["Cost of sales and other direct production costs","","","(33,604",")","","","(21,956",")","","","(86,312",")"],["Depreciation, depletion and amortization","","","(15,341",")","","","(22,845",")","","","(67,024",")"],["Cost of sales and other direct production costs and depreciation, depletion and amortization","","","(48,945",")","","","(44,801",")","","","(153,336",")"],["Gross (loss) profit","","$","(3,131",")","","$","14,097","","","$","(45,567",")"],["Tons of ore milled","","","69,544","","","","27,984","","","","210,397"],["Production:"],["Gold (ounces)","","","20,728","","","","31,756","","","","66,166"],["Silver (ounces)","","","46,319","","","","37,443","","","","181,741"],["Payable metal quantities sold:"],["Gold (ounces)","","","25,426","","","","35,224","","","","72,924"],["Silver (ounces)","","","27,476","","","","45,164","","","","213,526"],["Ore grades:"],["Gold ounces per ton","","","0.321","","","","1.232","","","","0.361"],["Silver ounces per ton","","","0.76","","","","1.70","","","","1.64"],["Total production cost per ton","","$","132.64","","","$","892.09","","","$","332.06"],["Cash Cost, After By-product Credits, per Gold Ounce (1)","","$","1,137","","","$","716","","","$","1,096"],["AISC, After By-product Credits, per Gold Ounce (1)","","$","1,211","","","$","787","","","$","1,527"],["Capital additions","","$","5,470","","","$","4,003","","","$","42,184"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","(1)","A reconciliation of these non-GAAP measures to cost of sales and other direct production costs and depreciation, depletion and amortization, the most comparable GAAP measure, can be found below in Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP). At Nevada Operations, silver is considered to be a by-product of our gold production, and the value of silver therefore offsets operating costs within our calculations of Cash Cost and AISC, After By-product Credits, per Gold Ounce."]]
[[/GREPCENT_TABLE]]

The gross loss in 2021 compared to gross profit in 2020 was due to reduced production and higher costs, including inventory write-downs. The lower gross loss in 2021 compared to 2019 was due to write-downs of the values of stockpile, in-process and finished goods inventory to their net realizable value of $9.7 million in 2021 compared to $37.1 million in 2019. The write-downs in 2019 were primarily attributed to development costs incurred for production at the Fire Creek mine, which resulted in the cost of inventory exceeding its net realizable value. Development ceased at Fire Creek in the second quarter of 2019 when the decision was made to limit near-term production to areas of the mine where development was already completed. Mining of non-refractory ore at Fire Creek in areas where development had already been performed was completed in the fourth quarter of 2020. During 2021 production and revenue was generated from processing of the stockpiled non-refractory ore at the Midas mill and third-party processing of refractory ore in a roaster and autoclave facility, respectively. Fire Creek was placed on care-and-maintenance in the second quarter of 2021 after processing of the remaining non-refractory ore stockpile.

Production was suspended at the Hollister mine in the third quarter of 2019 and at the Midas mine and Aurora mill in late 2019. Exploration activities and development of a decline to the Hatter Graben area at Hollister are ongoing. Suspension-related costs are reported in a separate line item on our consolidated statements of operations and excluded from the calculations of cost of sales and other direct production costs and depreciation, depletion and amortization, total production costs per ton and Cash Cost and AISC, After By-product Credits, per Gold Ounce.

74

See Item 1A. Risk Factors - Operation, Development, Exploration and Acquisition Risks for a discussion of certain risks relating to our recent and ongoing analysis of the carrying value of the Nevada assets.

Corporate Matters

Employee Benefit Plans

Our defined benefit pension plans, while providing a significant benefit to our employees, represent a significant liability to us.  During 2021, the underfunded status of our plans decreased to a liability of $6.0 million  from $44.9 million at December 31, 2020. The decreased liability was attributable to contributions to the plans and returns on plan assets that, combined, exceeded service costs and interest costs, collectively. During 2021, we contributed a total of approximately $22.3 million in shares of our common stock to the plans (see Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities for more information).  We do not expect to be required to contribute to our defined benefit plans in 2022, but we may choose to do so.  See Note 6 of Notes to Consolidated Financial Statements for more information. While the economic variables which will determine future cash requirements are uncertain, we expect contributions to increase in future years under current defined benefit pension plan provisions, and we periodically examine the defined benefit pension plans and supplemental excess retirement plan for affordability and competitiveness.

Income and Mining Taxes

Each reporting period we assess our deferred tax balance based on a review of long-range forecasts and quarterly activity.  In 2018, through the acquisition of Klondex Mines Ltd., we acquired the Nevada U.S. Group that did not join the Hecla U.S. tax group. We recognized a full valuation allowance on our separate Hecla U.S. net deferred tax assets at the end of 2017 based on results of tax law changes and maintain a full valuation allowance on Hecla U.S. net deferred tax assets at December 31, 2021.

Our net U.S. deferred tax asset in the Hecla U.S. Group is $31.5 million at December 31, 2021 following a release of valuation allowance of $58.4 million, based on a change in circumstances and weight of applicable evidence reviewed to support a more likely than not conclusion for utilization of the deferred tax assets.  We are relying on all available evidence including reversal of deferred taxable temporary differences and a forecast of future taxable income along with a history of positive earnings to support the release.   

Our net U.S. deferred tax liability for the Nevada U.S. Group at December 31, 2021 was $31.5 million compared to the $33.9 million net deferred tax liability at December 31, 2020.  The $2.4 million decrease is for current period activity in Nevada and an increase in valuation allowance for $14.2 million.  The deferred tax liability is primarily related to the excess of the carrying value of the mineral resource assets over the tax bases of those assets for U.S. tax reporting.

Our net Canadian deferred tax liability at December 31, 2021 was $104.2 million, an increase of $5.6 million from the $98.6 million net deferred tax liability at December 31, 2020. The increase was due to current period activity and the impact of weakening of the CAD relative to the USD on remeasurement of the deferred tax liability balance. The deferred tax liability is primarily related to the excess of the carrying value of the mineral resource assets over the tax bases of those assets for Canadian tax reporting.

Our Mexican net deferred tax asset at December 31, 2021 was zero, a decrease of $2.9 million from December 31, 2020. The valuation allowance was increased related to the cessation of production activities at our operations in Mexico.

As a result of the Tax Cuts and Jobs Act (“TCJ Act”) enacted in December 2017, our remaining Alternative Minimum Tax (“AMT”) credit carryforward of $11.4 million became partially refundable through 2020 and fully refundable in 2021. State and Federal AMT refunds of $0.8 million and $10.0 million were received in 2019 and 2020, respectively, leaving a net AMT state credit receivable of $0.6 million as of December 31, 2020, which was received in January 2021.

75

As discussed in Note 7 of Notes to Consolidated Financial Statements, our effective tax rate for 2021 was (535)%, reflecting a tax benefit of $29.6 million on pre-tax income of $5.5 million, compared to (652)% for 2020, reflecting a tax expense of $8.2 million on a pre-tax loss of $1.3 million.  We are subject to income taxes in the United States and other foreign jurisdictions. The overall effective tax rate will continue to be dependent upon the geographic distribution of our earnings in different jurisdictions, the U.S. deduction for percentage depletion, fluctuation in foreign currency exchange rates and deferred tax asset valuation allowance changes. As a result, the 2022 effective tax rate could vary significantly from that of 2021.  The other relevant provisions of the TCJ Act that became effective in 2018 consist of global intangible low-taxed income ("GILTI") tax and base erosion and anti-abuse tax ("BEAT"); however, these provisions have not materially impacted us.

Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP)

to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP)

The tables below present reconciliations between the most comparable GAAP measure of cost of sales and other direct production costs and depreciation, depletion and amortization to the non-GAAP measures of (i) Cash Cost, Before By-product Credits, (ii) Cash Cost, After By-product Credits, (iii) AISC, Before By-product Credits and (iv) AISC, After By-product Credits for our operations and for the Company for the years ended December 31, 2021, 2020 and 2019.

Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce are measures developed by precious metals companies (including the Silver Institute and the World Gold Council) in an effort to provide a uniform standard for comparison purposes. There can be no assurance, however, that these non-GAAP measures as we report them are the same as those reported by other mining companies.

Cash Cost, After By-product Credits, per Ounce is an important operating statistic that we utilize to measure each mine's operating performance. We use AISC, After By-product Credits, per Ounce as a measure of our mines' net cash flow after costs for exploration, pre-development, reclamation, and sustaining capital. This is similar to the Cash Cost, After By-product Credits, per Ounce non-GAAP measure we report, but also includes on-site exploration, reclamation, and sustaining capital costs. Current GAAP measures used in the mining industry, such as cost of goods sold, do not capture all the expenditures incurred to discover, develop and sustain silver and gold production. Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce also allow us to benchmark the performance of each of our mines versus those of our competitors. As a silver and gold mining company, we also use these statistics on an aggregate basis, aggregating the Greens Creek and Lucky Friday mines to compare our performance with that of other silver mining companies, and aggregating Casa Berardi and Nevada Operations for comparison with other gold mining companies. Similarly, these statistics are useful in identifying acquisition and investment opportunities as they provide a common tool for measuring the financial performance of other mines with varying geologic, metallurgical and operating characteristics.

Cash Cost, Before By-product Credits and AISC, Before By-product Credits include all direct and indirect operating cash costs related directly to the physical activities of producing metals, including mining, processing and other plant costs, third-party refining expense, on-site general and administrative costs and royalties. AISC, Before By-product Credits for each mine also includes on-site exploration, reclamation, and sustaining capital costs. AISC, Before By-product Credits for our consolidated silver properties also includes corporate costs for general and administrative expense and sustaining exploration and capital costs. By-product credits include revenues earned from all metals other than the primary metal produced at each operation. As depicted in the tables below, by-product credits comprise an essential element of our silver unit cost structure, distinguishing our silver operations due to the polymetallic nature of their orebodies.

In addition to the uses described above, Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce provide management and investors an indication of operating cash flow and net cash flow, respectively, after consideration of the average price received from production. We also use these measurements for the comparative monitoring of performance of our mining operations period-to-period from a cash flow perspective.  However, comparability of Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for 2021 to 2020 and 2019 is impacted by, among other factors, (i) the return to full production at Lucky Friday in the fourth quarter of 2020 and (ii) suspension of production at San Sebastian in the fourth quarter of 2020 and discontinuation of San Sebastian being reported as an operating segment in 2021.

76

The Casa Berardi, Nevada Operations and combined gold properties information below reports Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce for the production of gold, their primary product, and by-product revenues earned from silver, which is a by-product at Casa Berardi and the Nevada Operations. Only costs and ounces produced relating to operations with the same primary product are combined to represent Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce. Thus, the gold produced at Casa Berardi and Nevada Operations is not included as a by-product credit when calculating Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for the total of Greens Creek, Lucky Friday and San Sebastian, our combined silver properties. Similarly, the silver produced at our other two operations is not included as a by-product credit when calculating the gold metrics for Casa Berardi and the Nevada Operations. As depicted in the tables below, by-product credits from the silver production at our primary gold properties comprise an element of our gold unit cost structure.

[[GREPCENT_TABLE]]
[["In thousands (except per ounce amounts)","","Year Ended December 31, 2021"],["","","Greens Creek","","","Lucky Friday(2)","","","Corporate and other(3)","","","Total Silver"],["Cost of sales and other direct production costs and depreciation, depletion and amortization","","$","213,113","","","$","97,538","","","$","247","","","$","310,898"],["Depreciation, depletion and amortization","","","(48,710",")","","","(26,846",")","","","(152",")","","","(75,708",")"],["Treatment costs","","","36,099","","","","16,723","","","","\u2014","","","","52,822"],["Change in product inventory","","","80","","","","(406",")","","","\u2014","","","","(326",")"],["Reclamation and other costs","","","(3,466",")","","","(1,039",")","","","(95",")","","","(4,600",")"],["Cash Cost, Before By-product Credits (1)","","","197,116","","","","85,970","","","","\u2014","","","","283,086"],["Reclamation and other costs","","","3,390","","","","1,056","","","","","","","","4,446"],["Exploration","","","4,591","","","","\u2014","","","","2,226","","","","6,817"],["Sustaining capital","","","27,582","","","","26,517","","","","210","","","","54,309"],["General and administrative","","","\u2014","","","","\u2014","","","","34,570","","","","34,570"],["AISC, Before By-product Credits (1)","","","232,679","","","","113,543","","","","37,006","","","","383,228"],["By-product credits:"],["Zinc","","","(100,214",")","","","(19,479",")","","","","","","","(119,693",")"],["Gold","","","(72,011",")","","","\u2014","","","","","","","","(72,011",")"],["Lead","","","(30,922",")","","","(42,966",")","","","","","","","(73,888",")"],["Total By-product credits","","","(203,147",")","","","(62,445",")","","","","","","","(265,592",")"],["Cash Cost, After By-product Credits","","$","(6,031",")","","$","23,525","","","$","\u2014","","","$","17,494"],["AISC, After By-product Credits","","$","29,532","","","$","51,098","","","$","37,006","","","$","117,636"],["Divided by silver ounces produced","","","9,243","","","","3,564","","","","","","","","12,807"],["Cash Cost, Before By-product Credits, per Silver Ounce","","$","21.33","","","$","24.12","","","","","","","$","22.11"],["By-product credits per ounce","","","(21.98",")","","","(17.52",")","","","","","","","(20.74",")"],["Cash Cost, After By-product Credits, per Silver Ounce","","$","(0.65",")","","$","6.60","","","","","","","$","1.37"],["AISC, Before By-product Credits, per Silver Ounce","","$","25.17","","","$","31.86","","","","","","","$","29.93"],["By-product credits per ounce","","","(21.98",")","","","(17.52",")","","","","","","","(20.74",")"],["AISC, After By-product Credits, per Silver Ounce","","$","3.19","","","$","14.34","","","","","","","$","9.19"]]
[[/GREPCENT_TABLE]]

77

[[GREPCENT_TABLE]]
[["In thousands (except per ounce amounts)","","Year Ended December 31, 2021"],["","","Casa Berardi","","","Nevada Operations(4)","","","Total Gold"],["Cost of sales and other direct production costs and depreciation, depletion and amortization","","$","229,829","","","$","48,945","","","$","278,774"],["Depreciation, depletion and amortization","","","(80,744",")","","","(15,341",")","","","(96,085",")"],["Treatment costs","","","1,513","","","","1,731","","","","3,244"],["Change in product inventory","","","2,439","","","","(10,907",")","","","(8,468",")"],["Reclamation and other costs","","","(841",")","","","300","","","","(541",")"],["Cash Cost, Before By-product Credits (1)","","","152,196","","","","24,728","","","","176,924"],["Reclamation and other costs","","","841","","","","1,008","","","","1,849"],["Exploration","","","5,326","","","","\u2014","","","","5,326"],["Sustaining capital","","","30,643","","","","511","","","","31,154"],["AISC, Before By-product Credits (1)","","","189,006","","","","26,247","","","","215,253"],["By-product credits:"],["Silver","","","(839",")","","","(1,152",")","","","(1,991",")"],["Total By-product credits","","","(839",")","","","(1,152",")","","","(1,991",")"],["Cash Cost, After By-product Credits","","$","151,357","","","$","23,576","","","$","174,933"],["AISC, After By-product Credits","","$","188,167","","","$","25,095","","","$","213,262"],["Divided by gold ounces produced","","","135","","","","21","","","","156"],["Cash Cost, Before By-product Credits, per Gold Ounce","","$","1,131","","","$","1,193","","","$","1,140"],["By-product credits per ounce","","","(6",")","","","(56",")","","","(13",")"],["Cash Cost, After By-product Credits, per Gold Ounce","","$","1,125","","","$","1,137","","","$","1,127"],["AISC, Before By-product Credits, per Gold Ounce","","$","1,405","","","$","1,267","","","$","1,387"],["By-product credits per ounce","","","(6",")","","","(56",")","","","(13",")"],["AISC, After By-product Credits, per Gold Ounce","","$","1,399","","","$","1,211","","","$","1,374"]]
[[/GREPCENT_TABLE]]

78

[[GREPCENT_TABLE]]
[["In thousands (except per ounce amounts)","","Year Ended December 31, 2021"],["","","Total Silver","","","Total Gold","","","Total"],["Cost of sales and other direct production costs and depreciation, depletion and amortization","","$","310,898","","","$","278,774","","","$","589,672"],["Depreciation, depletion and amortization","","","(75,708",")","","","(96,085",")","","","(171,793",")"],["Treatment costs","","","52,822","","","","3,244","","","","56,066"],["Change in product inventory","","","(326",")","","","(8,468",")","","","(8,794",")"],["Reclamation and other costs","","","(4,600",")","","","(541",")","","","(5,141",")"],["Cash Cost, Before By-product Credits (1)","","","283,086","","","","176,924","","","","460,010"],["Reclamation and other costs","","","4,446","","","","1,849","","","","6,295"],["Exploration","","","6,817","","","","5,326","","","","12,143"],["Sustaining capital","","","54,309","","","","31,154","","","","85,463"],["General and administrative","","","34,570","","","","\u2014","","","","34,570"],["AISC, Before By-product Credits (1)","","","383,228","","","","215,253","","","","598,481"],["By-product credits:"],["Zinc","","","(119,693",")","","","\u2014","","","","(119,693",")"],["Gold","","","(72,011",")","","","\u2014","","","","(72,011",")"],["Lead","","","(73,888",")","","","\u2014","","","","(73,888",")"],["Silver","","","","","","","(1,991",")","","","(1,991",")"],["Total By-product credits","","","(265,592",")","","","(1,991",")","","","(267,583",")"],["Cash Cost, After By-product Credits","","$","17,494","","","$","174,933","","","$","192,427"],["AISC, After By-product Credits","","$","117,636","","","$","213,262","","","$","330,898"],["Divided by ounces produced","","","12,807","","","","156"],["Cash Cost, Before By-product Credits, per Ounce","","$","22.11","","","$","1,140"],["By-product credits per ounce","","","(20.74",")","","","(13",")"],["Cash Cost, After By-product Credits, per Ounce","","$","1.37","","","$","1,127"],["AISC, Before By-product Credits, per Ounce","","$","29.93","","","$","1,387"],["By-product credits per ounce","","","(20.74",")","","","(13",")"],["AISC, After By-product Credits, per Ounce","","$","9.19","","","$","1,374"]]
[[/GREPCENT_TABLE]]

79

[[GREPCENT_TABLE]]
[["In thousands (except per ounce amounts)","","Year Ended December 31, 2020"],["","","Greens Creek","","","Lucky Friday(2)","","","Corporate and other (3)","","","Total Silver"],["Cost of sales and other direct production costs and depreciation, depletion and amortization","","$","210,748","","","$","56,706","","","$","24,104","","","$","291,558"],["Depreciation, depletion and amortization","","","(49,692",")","","","(11,473",")","","","(3,548",")","","","(64,713",")"],["Treatment costs","","","77,122","","","","4,590","","","","287","","","","81,999"],["Change in product inventory","","","(3,144",")","","","2,340","","","","(2,357",")","","","(3,161",")"],["Reclamation and other costs (5)","","","(1,608",")","","","(274",")","","","(1,198",")","","","(3,080",")"],["Lucky Friday cash costs excluded","","","\u2014","","","","(31,442",")","","","\u2014","","","","(31,442",")"],["Cash Cost, Before By-product Credits (1)","","","233,426","","","","20,447","","","","17,288","","","","271,161"],["Reclamation and other costs","","","3,154","","","","222","","","","418","","","","3,794"],["Exploration","","","354","","","","\u2014","","","","1,788","","","","2,142"],["Sustaining capital","","","28,797","","","","7,154","","","","337","","","","36,288"],["General and administrative (5)","","","\u2014","","","","\u2014","","","","33,759","","","","33,759"],["AISC, Before By-product Credits (1)","","","265,731","","","","27,823","","","","53,590","","","","347,144"],["By-product credits:"],["Zinc","","","(79,413",")","","","(4,273",")","","","\u2014","","","","(83,686",")"],["Gold","","","(74,615",")","","","\u2014","","","","(12,586",")","","","(87,201",")"],["Lead","","","(28,193",")","","","(8,421",")","","","\u2014","","","","(36,614",")"],["Total By-product credits","","","(182,221",")","","","(12,694",")","","","(12,586",")","","","(207,501",")"],["Cash Cost, After By-product Credits","","$","51,205","","","$","7,753","","","$","4,702","","","$","63,660"],["AISC, After By-product Credits","","$","83,510","","","$","15,129","","","$","41,004","","","$","139,643"],["Divided by silver ounces produced","","","10,495","","","","830","","","","955","","","","12,280"],["Cash Cost, Before By-product Credits, per Silver Ounce","","$","22.24","","","$","24.63","","","","","","","$","22.08"],["By-product credits per ounce","","","(17.36",")","","","(15.29",")","","","","","","","(16.90",")"],["Cash Cost, After By-product Credits, per Silver Ounce","","$","4.88","","","$","9.34","","","","","","","$","5.18"],["AISC, Before By-product Credits, per Silver Ounce","","$","25.33","","","$","33.51","","","","","","","$","28.27"],["By-product credits per ounce","","","(17.36",")","","","(15.29",")","","","","","","","(16.90",")"],["AISC, After By-product Credits, per Silver Ounce","","$","7.97","","","$","18.22","","","","","","","$","11.37"]]
[[/GREPCENT_TABLE]]

80

[[GREPCENT_TABLE]]
[["In thousands (except per ounce amounts)","","Year Ended December 31, 2020"],["","","Casa Berardi(6)","","","Nevada Operations(4)","","","Total Gold"],["Cost of sales and other direct production costs and depreciation, depletion and amortization","","$","194,414","","","$","44,801","","","$","239,215"],["Depreciation, depletion and amortization","","","(60,552",")","","","(22,845",")","","","(83,397",")"],["Treatment costs","","","2,591","","","","45","","","","2,636"],["Change in product inventory","","","2,226","","","","15,869","","","","18,095"],["Reclamation and other costs (5)","","","(773",")","","","(978",")","","","(1,751",")"],["Exclusion of Nevada Operations costs","","","\u2014","","","","(13,511",")","","","(13,511",")"],["Cash Cost, Before By-product Credits (1)","","","137,906","","","","23,381","","","","161,287"],["Reclamation and other costs","","","386","","","","654","","","","1,040"],["Exploration","","","2,231","","","","\u2014","","","","2,231"],["Sustaining capital","","","34,431","","","","1,600","","","","36,031"],["AISC, Before By-product Credits (1)","","","174,954","","","","25,635","","","","200,589"],["By-product credits:"],["Silver","","","(499",")","","","(635",")","","","(1,134",")"],["Total By-product credits","","","(499",")","","","(635",")","","","(1,134",")"],["Cash Cost, After By-product Credits","","$","137,407","","","$","22,746","","","$","160,153"],["AISC, After By-product Credits","","$","174,455","","","$","25,000","","","$","199,455"],["Divided by gold ounces produced","","","121","","","","32","","","","153"],["Cash Cost, Before By-product Credits, per Gold Ounce","","$","1,135","","","$","736","","","$","1,052"],["By-product credits per ounce","","","(4",")","","","(20",")","","","(7",")"],["Cash Cost, After By-product Credits, per Gold Ounce","","$","1,131","","","$","716","","","$","1,045"],["AISC, Before By-product Credits, per Gold Ounce","","$","1,440","","","$","807","","","$","1,309"],["By-product credits per ounce","","","(4",")","","","(20",")","","","(7",")"],["AISC, After By-product Credits, per Gold Ounce","","$","1,436","","","$","787","","","$","1,302"]]
[[/GREPCENT_TABLE]]

81

[[GREPCENT_TABLE]]
[["In thousands (except per ounce amounts)","","Year Ended December 31, 2020"],["","","Total Silver","","","Total Gold","","","Total"],["Cost of sales and other direct production costs and depreciation, depletion and amortization","","$","291,558","","","$","239,215","","","$","530,773"],["Depreciation, depletion and amortization","","","(64,713",")","","","(83,397",")","","","(148,110",")"],["Treatment costs","","","81,999","","","","2,636","","","","84,635"],["Change in product inventory","","","(3,161",")","","","18,095","","","","14,934"],["Reclamation and other costs (5)","","","(3,080",")","","","(1,751",")","","","(4,831",")"],["Cash costs excluded","","","(31,442",")","","","(13,511",")","","","(44,953",")"],["Cash Cost, Before By-product Credits (1)","","","271,161","","","","161,287","","","","432,448"],["Reclamation and other costs","","","3,794","","","","1,040","","","","4,834"],["Exploration","","","2,142","","","","2,231","","","","4,373"],["Sustaining capital","","","36,288","","","","36,031","","","","72,319"],["General and administrative (5)","","","33,759","","","","\u2014","","","","33,759"],["AISC, Before By-product Credits (1)","","","347,144","","","","200,589","","","","547,733"],["By-product credits:"],["Zinc","","","(83,686",")","","","\u2014","","","","(83,686",")"],["Gold","","","(87,201",")","","","\u2014","","","","(87,201",")"],["Lead","","","(36,614",")","","","\u2014","","","","(36,614",")"],["Silver","","","\u2014","","","","(1,134",")","","","(1,134",")"],["Total By-product credits","","","(207,501",")","","","(1,134",")","","","(208,635",")"],["Cash Cost, After By-product Credits","","$","63,660","","","$","160,153","","","$","223,813"],["AISC, After By-product Credits","","$","139,643","","","$","199,455","","","$","339,098"],["Divided by ounces produced","","","12,280","","","","153"],["Cash Cost, Before By-product Credits, per Ounce","","$","22.08","","","$","1,052"],["By-product credits per ounce","","","(16.90",")","","","(7",")"],["Cash Cost, After By-product Credits, per Ounce","","$","5.18","","","$","1,045"],["AISC, Before By-product Credits, per Ounce","","$","28.27","","","$","1,309"],["By-product credits per ounce","","","(16.90",")","","","(7",")"],["AISC, After By-product Credits, per Ounce","","$","11.37","","","$","1,302"]]
[[/GREPCENT_TABLE]]

82

[[GREPCENT_TABLE]]
[["In thousands (except per ounce amounts)","","Year Ended December 31, 2019"],["","","Green Creek","","","Lucky Friday(2)","","","Corporate and other (3)","","","Total Silver"],["Cost of sales and other direct production costs and depreciation, depletion and amortization","","$","209,355","","","$","16,621","","","$","50,509","","","$","276,485"],["Depreciation, depletion and amortization","","","(47,587",")","","","(1,175",")","","","(9,772",")","","","(58,534",")"],["Treatment costs","","","48,487","","","","2,884","","","","760","","","","52,131"],["Change in product inventory","","","(1,155",")","","","1,016","","","","(2,953",")","","","(3,092",")"],["Reclamation and other costs","","","(2,523",")","","","\u2014","","","","(1,588",")","","","(4,111",")"],["Lucky Friday cash costs excluded","","","\u2014","","","","(19,346",")","","","\u2014","","","","(19,346",")"],["Cash Cost, Before By-product Credits (1)","","","206,577","","","","\u2014","","","","36,956","","","","243,533"],["Reclamation and other costs","","","2,949","","","","\u2014","","","","492","","","","3,441"],["Exploration","","","982","","","","\u2014","","","","5,999","","","","6,981"],["Sustaining capital","","","35,829","","","","\u2014","","","","2,569","","","","38,398"],["General and administrative","","","\u2014","","","","\u2014","","","","35,832","","","","35,832"],["AISC, Before By-product Credits (1)","","","246,337","","","","\u2014","","","","81,848","","","","328,185"],["By-product credits:"],["Zinc","","","(91,435",")","","","\u2014","","","","\u2014","","","","(91,435",")"],["Gold","","","(69,391",")","","","\u2014","","","","(21,960",")","","","(91,351",")"],["Lead","","","(28,589",")","","","\u2014","","","","\u2014","","","","(28,589",")"],["Silver","","","\u2014","","","","\u2014","","","","\u2014"],["Total By-product credits","","","(189,415",")","","","\u2014","","","","(21,960",")","","","(211,375",")"],["Cash Cost, After By-product Credits","","$","17,162","","","$","\u2014","","","$","14,996","","","$","32,158"],["AISC, After By-product Credits","","$","56,922","","","$","\u2014","","","$","59,888","","","$","116,810"],["Divided by silver ounces produced","","","9,890","","","","\u2014","","","","1,869","","","","11,759"],["Cash Cost, Before By-product Credits, per Silver Ounce","","$","20.89","","","$","\u2014","","","","","","","$","20.71"],["By-product credits per ounce","","","(19.15",")","","","\u2014","","","","","","","","(17.98",")"],["Cash Cost, After By-product Credits, per Silver Ounce","","$","1.74","","","$","\u2014","","","","","","","$","2.73"],["AISC, Before By-product Credits, per Silver Ounce","","$","24.91","","","$","\u2014","","","","","","","$","27.91"],["By-product credits per ounce","","","(19.15",")","","","\u2014","","","","","","","","(17.98",")"],["AISC, After By-product Credits, per Silver Ounce","","$","5.76","","","$","\u2014","","","","","","","$","9.93"]]
[[/GREPCENT_TABLE]]

83

[[GREPCENT_TABLE]]
[["In thousands (except per ounce amounts)","","Year Ended December 31, 2019"],["","","Casa Berardi","","","Nevada Operations(4)","","","Total"],["Cost of sales and other direct production costs and depreciation, depletion and amortization","","$","209,615","","","$","153,336","","","$","362,951"],["Depreciation, depletion and amortization","","","(65,893",")","","","(67,024",")","","","(132,917",")"],["Treatment costs","","","1,876","","","","158","","","","2,034"],["Change in product inventory","","","(3,371",")","","","(9,008",")","","","(12,379",")"],["Reclamation and other costs","","","(515",")","","","(2,019",")","","","(2,534",")"],["Cash Cost, Before By-product Credits (1)","","","141,712","","","","75,443","","","","217,155"],["Reclamation and other costs","","","515","","","","1,512","","","","2,027"],["Exploration","","","3,450","","","","2,333","","","","5,783"],["Sustaining capital","","","36,825","","","","24,652","","","","61,477"],["AISC, Before By-product Credits (1)","","","182,502","","","","103,940","","","","286,442"],["By-product credits:"],["Silver","","","(508",")","","","(2,922",")","","","(3,430",")"],["Total By-product credits","","","(508",")","","","(2,922",")","","","(3,430",")"],["Cash Cost, After By-product Credits","","$","141,204","","","$","72,521","","","$","213,725"],["AISC, After By-product Credits","","$","181,994","","","$","101,018","","","$","283,012"],["Divided by gold ounces produced","","","134","","","","66","","","","200"],["Cash Cost, Before By-product Credits, per Gold Ounce","","$","1,055","","","$","1,140","","","$","1,083"],["By-product credits per ounce","","","(4",")","","","(44",")","","","(17",")"],["Cash Cost, After By-product Credits, per Gold Ounce","","$","1,051","","","$","1,096","","","$","1,066"],["AISC, Before By-product Credits, per Gold Ounce","","$","1,358","","","$","1,571","","","$","1,428"],["By-product credits per ounce","","","(4",")","","","(44",")","","","(17",")"],["AISC, After By-product Credits, per Gold Ounce","","$","1,354","","","$","1,527","","","$","1,411"]]
[[/GREPCENT_TABLE]]

84

[[GREPCENT_TABLE]]
[["In thousands (except per ounce amounts)","","Year Ended December 31, 2019"],["","","Total Silver","","","Total Gold","","","Total"],["Cost of sales and other direct production costs and depreciation, depletion and amortization","","$","276,485","","","$","362,951","","","$","639,436"],["Depreciation, depletion and amortization","","","(58,534",")","","","(132,917",")","","","(191,451",")"],["Treatment costs","","","52,131","","","","2,034","","","","54,165"],["Change in product inventory","","","(3,092",")","","","(12,379",")","","","(15,471",")"],["Reclamation and other costs","","","(4,111",")","","","(2,534",")","","","(6,645",")"],["Lucky Friday cash costs excluded","","","(19,346",")","","","\u2014","","","","(19,346",")"],["Cash Cost, Before By-product Credits (1)","","","243,533","","","","217,155","","","","460,688"],["Reclamation and other costs","","","3,441","","","","2,027","","","","5,468"],["Exploration","","","6,981","","","","5,783","","","","12,764"],["Sustaining capital","","","38,398","","","","61,477","","","","99,875"],["General and administrative","","","35,832","","","","\u2014","","","","35,832"],["AISC, Before By-product Credits (1)","","","328,185","","","","286,442","","","","614,627"],["By-product credits:"],["Zinc","","","(91,435",")","","","\u2014","","","","(91,435",")"],["Gold","","","(91,351",")","","","\u2014","","","","(91,351",")"],["Lead","","","(28,589",")","","","\u2014","","","","(28,589",")"],["Silver","","","\u2014","","","","(3,430",")","","","(3,430",")"],["Total By-product credits","","","(211,375",")","","","(3,430",")","","","(214,805",")"],["Cash Cost, After By-product Credits","","$","32,158","","","$","213,725","","","$","245,883"],["AISC, After By-product Credits","","$","116,810","","","$","283,012","","","$","399,822"],["Divided by ounces produced","","","11,759","","","","200"],["Cash Cost, Before By-product Credits, per Ounce","","$","20.71","","","$","1,083"],["By-product credits per ounce","","","(17.98",")","","","(17",")"],["Cash Cost, After By-product Credits, per Ounce","","$","2.73","","","$","1,066"],["AISC, Before By-product Credits, per Ounce","","$","27.91","","","$","1,428"],["By-product credits per ounce","","","(17.98",")","","","(17",")"],["AISC, After By-product Credits, per Ounce","","$","9.93","","","$","1,411"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","(1)","Includes all direct and indirect operating costs related to the physical activities of producing metals, including mining, processing and other plant costs, third-party refining and marketing expense, non-discretionary on-site general and administrative costs, royalties and mining production taxes, before by-product revenues earned from all metals other than the primary metal produced at each operation. AISC, Before By-product Credits also includes on-site exploration, reclamation, and sustaining capital costs."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","(2)","The unionized employees at Lucky Friday were on strike from March 2017 until January 2020, and production at Lucky Friday had been limited from the start of the strike until the ramp-up was substantially completed in the fourth quarter of 2020. Costs related to ramp-up activities totaling approximately $8.0 million in 2020, and suspension-related costs totaling approximately $12.1 million during the strike in 2019, which include $6.3 million and $4.3 million, respectively, in non-cash depreciation expense for those periods, have been excluded from the calculations of cost of sales and other direct production costs and depreciation, depletion and amortization, Cash Cost, Before By-product Credits, Cash Cost, After By-product Credits, AISC, Before By-product Credits, and AISC, After By-product Credits."]]
[[/GREPCENT_TABLE]]

85

[[GREPCENT_TABLE]]
[["","(3)","Includes results for San Sebastian, which was an operating segment prior to 2021, and corporate costs. AISC, Before By-product Credits for our consolidated silver properties includes non-discretionary corporate costs for general and administrative expense, exploration and sustaining capital."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","(4)","Production was suspended at the Hollister mine in the third quarter of 2019 and at the Midas mine and Aurora mill in late 2019, and at the Midas mill and Fire Creek mine in mid-2021. Suspension-related costs at Nevada Operations totaling $20.4 million for 2021 and $13.5 million for 2020 are reported in a separate line item on our consolidated statements of operations and excluded from the calculations of cost of sales and other direct production costs and depreciation, depletion and amortization and Cash Cost and AISC, After By-product Credits, per Gold Ounce. During the second half of 2020, all ore mined at Nevada Operations was stockpiled, with no ore milled and no production reported during the period. As a result, costs incurred at Nevada Operations during the second half of 2020 were excluded from the calculations of Cash Cost and AISC, After By-product Credits, per Gold Ounce."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","(5)","Excludes the discretionary portion of general and administrative costs for Greens Creek, Casa Berardi, Lucky Friday and corporate of $0.6 million, $0.4 million, $0.1 million and $1.8 million, respectively, for 2020."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","(6)","In late March 2020, the Government of Quebec ordered the mining industry to reduce to minimum operations as part of the fight against COVID-19, causing us to suspend our Casa Berardi operations from March 24 until April 15, when mining operations resumed, resulting in reduced mill throughput. Suspension-related costs totaling $1.6 million for 2020 are reported in a separate line item on our consolidated statements of operations and excluded from the calculations of cost of sales and other direct production costs and depreciation, depletion and amortization and Cash Cost and AISC, After By-product Credits, per Gold Ounce."]]
[[/GREPCENT_TABLE]]

Reconciliation of Cash Provided by Operating Activities (GAAP) to Free Cash Flow (non-GAAP)

The non-GAAP measure of free cash flow is calculated as net cash provided by operating activities (GAAP) less additions to properties, plants, equipment and mineral interests (GAAP). Management believes that, when presented in conjunction with comparable GAAP measures, free cash flow is useful to investors in evaluating our operating performance. The following table reconciles net cash provided by operating activities to free cash flow:

[[GREPCENT_TABLE]]
[["","","Year ended December 31,"],["","","2021","","","2020","","","2019"],["Net cash provided by operating activities (GAAP)","","$","220,337","","","$","180,793","","","$","120,866"],["Less: Additions to properties, plants, equipment and mineral interests (GAAP)","","","(109,048",")","","","(91,016",")","","","(121,421",")"],["Free cash flow","","$","111,289","","","$","89,777","","","$","(555",")"]]
[[/GREPCENT_TABLE]]

Financial Liquidity and Capital Resources

Liquidity overview

We have a disciplined cash management strategy of maintaining financial flexibility to execute our capital priorities and provide long-term value to our shareholders. Consistent with that strategy, we aim to maintain an acceptable level of net debt and sufficient liquidity to fund debt service costs, operations, capital expenditures, exploration and pre-development projects, while returning cash to stockholders through dividends and potential share repurchases.

At December 31, 2021, we had $210.0 million in cash and cash equivalents, of which $13.8 million was held in foreign subsidiaries' local currency denominated accounts readily convertible to U.S. dollars that we anticipate utilizing for near-term operating, exploration or capital costs by those foreign operations. We also have USD cash and cash equivalent balances held by our foreign subsidiaries that, if repatriated, may be subject to withholding taxes. We expect that there would be no additional tax burden upon repatriation after considering the cash cost associated with the withholding taxes. We believe that our liquidity and capital resources from our U.S. operations are adequate to fund our U.S. operations and corporate activities.

86

As discussed in Overview above, we continue to address the COVID-19 outbreak and face uncertainty related to the potential additional impacts it could have on our operations. The impacts of COVID-19 and increasing or prolonged restrictions, if required, on our operations could require access to additional sources of liquidity, which may not be available to us.

Pursuant to our common stock dividend policy described in Note 12 of Notes to Consolidated Financial Statements, our board of directors declared and paid dividends on common stock totaling $20.1 million in 2021, $8.6 million in 2020, and $4.9 million in 2019.  Our dividend policy has a silver-linked component which ties the amount of declared common stock dividends to our realized silver price for the preceding quarter. Another component of our common stock dividend policy anticipates paying an annual minimum dividend. In each of May and September 2021, our Board of Directors approved an increase in our silver-linked dividend policy by $0.01 per year, and in September 2021 also approved a reduction in the minimum realized silver price threshold to $20 from $25 per ounce.  We realized silver prices of $25.66, $27.14, $23.97 and $23.49 in the first, second, third and fourth quarters of 2021, respectively, thus satisfying the criterion for the silver-linked dividend component of our common stock dividend policy. As a result, on May 5, 2021 and August 4, 2021, our Board of Directors declared quarterly cash dividends of $0.01125 per share of common stock, consisting of $0.00375 per share for the minimum dividend component and $0.0075 per share for the silver-linked dividend component of our dividend policy, and on November 3, 2021 and February 21, 2022, 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 dividend component of our dividend policy. For illustrative purposes only, the table below summarizes potential dividend amounts under our dividend policy.

[[GREPCENT_TABLE]]
[["Quarterly Average Realized Silver Price ($ per ounce)","","","Quarterly Silver- Linked Dividend ($ per share)","","","Annualized Silver-Linked Dividend ($ per share)","","","Annualized Minimum Dividend ($ per share)","","","Annualized Dividends per Share: Silver- Linked and Minimum ($ per share)"],["$","20","","","$","0.0025","","","$","0.01","","","$","0.015","","","$","0.025"],["$","25","","","$","0.0100","","","$","0.04","","","$","0.015","","","$","0.055"],["$","30","","","$","0.0150","","","$","0.06","","","$","0.015","","","$","0.075"],["$","35","","","$","0.0250","","","$","0.10","","","$","0.015","","","$","0.115"],["$","40","","","$","0.0350","","","$","0.14","","","$","0.015","","","$","0.155"],["$","45","","","$","0.0450","","","$","0.18","","","$","0.015","","","$","0.195"],["$","50","","","$","0.0550","","","$","0.22","","","$","0.015","","","$","0.235"]]
[[/GREPCENT_TABLE]]

The declaration and payment of dividends on common stock is at the sole discretion of our board of directors, and there can be no assurance that we will continue to declare and pay common stock dividends in the future.

Pursuant to our stock repurchase program described in Note 12 of Notes to Consolidated Financial Statements, we are authorized to repurchase up to 20 million shares of our outstanding common stock from time to time in open market or privately negotiated transactions, depending on prevailing market conditions and other factors.  The repurchase program may be modified, suspended or discontinued by us at any time.  As of December 31, 2021, 934,100 shares had been purchased in prior periods at an average price of $3.99 per share, leaving 19.1 million shares that may yet be purchased under the program.  We have not repurchased any shares since June 2014. The closing price of our common stock at February 18, 2022, was $5.10 per share.

Pursuant to our at the market equity distribution agreement (“ATM”) described in Note 12 of Notes to Consolidated Financial Statements we may offer and sell up to 60 million shares of our common stock from time to time to or through sales agents. Sales of the shares, if any, will be made by means of ordinary brokers transactions or as otherwise agreed between the Company and the agents as principals. Whether or not we engage in sales from time to time may depend on a variety of factors, including share price, our cash resources, customary black-out restrictions, and whether we have any material inside information. The agreement can be terminated by us at any time. Any shares issued under the equity distribution agreement are registered under the Securities Act of 1933, as amended, pursuant to a shelf registration statement on Form S-3. No shares have been sold under the agreement as of December 31, 2021.  

87

We believe as a result of our cash balances, the performance of our current and expected operations, current metals prices, proceeds from potential at-the-market sales of common stock, and availability of our revolving credit facility, we will be able to meet our obligations and other potential cash requirements during the next 12 months from the date of this report. Our obligations and other uses of cash may include, but are not limited to: debt service obligations related to the Senior Notes, IQ Notes and revolving credit facility (if amounts are drawn); care-and-maintenance and other costs related to addressing the impact of COVID-19 on our operations; capital expenditures at our operations; potential acquisitions of other mining companies or properties; regulatory matters; litigation; potential repurchases of our common stock under the program described above; and payment of dividends on common stock, if declared by our board of directors. We currently estimate that a total of approximately $135 million will be spent on capital expenditures, primarily for equipment, infrastructure, and development at our mines, in 2022. We also estimate that exploration and pre-development expenditures will total approximately $45 million in 2022. Our expenditures for these items and our related plans for 2022 may change based upon our financial position, metals prices, and other considerations. Our ability to fund the activities described above will depend on our operating performance, metals prices, our ability to estimate revenues and costs, sources of liquidity available to us, including the revolving credit facility, and other factors. A sustained downturn in metals prices, significant increase in operational or capital costs or other uses of cash, our inability to access the credit facility or the sources of liquidity discussed above, or other factors beyond our control could impact our plans. See Item 1A. Risk Factors - An extended decline in metals prices, an increase in operating or capital costs, mine accidents or closures, increasing regulatory obligations, or our inability to convert resources or exploration targets to reserves may cause us to record write-downs, which could negatively impact our results of operations and We have a substantial amount of debt that could impair our financial health and prevent us from fulfilling our obligations under our existing and future indebtedness.

We may defer some capital expenditures and/or exploration and pre-development activities, engage in asset sales or secure additional capital if necessary to maintain liquidity. We also may pursue additional acquisition opportunities, which could require additional equity issuances or other forms of financing. We cannot assure you that such financing will be available to us.

Our liquid assets include (in millions):

[[GREPCENT_TABLE]]
[["","","December 31, 2021","","","December 31, 2020","","","December 31, 2019"],["Cash and cash equivalents held in U.S. dollars","","$","196.2","","","$","116.4","","","$","50.3"],["Cash and cash equivalents held in foreign currency","","","13.8","","","","13.4","","","","12.2"],["Total cash and cash equivalents","","","210.0","","","","129.8","","","","62.5"],["Marketable equity securities, current and non-current","","","14.4","","","","19.3","","","","6.2"],["Total cash, cash equivalents and investments","","$","224.4","","","$","149.1","","","$","68.7"]]
[[/GREPCENT_TABLE]]

Cash and cash equivalents increased by $80.2 million in 2021, discussed below. Cash and cash equivalents held in foreign currencies represents balances in CAD and Mexican Pesos (“MXN”), and increased by $0.4 million in 2021 resulting from an increase in CAD held. The value of current and non-current marketable equity securities decreased by $4.9 million.

[[GREPCENT_TABLE]]
[["","","Year Ended December 31,"],["","","2021","","","2020","","","2019"],["Cash provided by operating activities (in millions)","","$","220.3","","","$","180.8","","","$","120.9"]]
[[/GREPCENT_TABLE]]

Cash provided by operating activities increased by $39.5 million in 2021 compared to 2020.  The increase was due to higher income, adjusted for non-cash items, partially offset by the impact of working capital and other operating asset and liability changes. Income, adjusted for non-cash items, was higher by $42.9 million primarily due to higher income from operations, which was mainly a result of higher realized silver, gold, lead and zinc prices and lower treatment charges. Working capital and other operating asset and liability changes resulted in a net cash increase of $18.9 million in 2021 compared to an increase in cash of $22.4 million in 2020.  Significant variances in working capital changes between 2021 and 2020 resulted from lower cash flows from changes in accounts payable, accruals for incentive compensation and accounts receivable, partially offset by a reduction in inventory.    

88

Cash provided by operating activities increased by $59.9 million in 2020 compared to 2019. The increase was due to higher income, adjusted for non-cash items, partially offset by the impact of working capital and other operating asset and liability changes. Income, adjusted for non-cash items, was higher by $47.6 million primarily due to higher gross profit, which was mainly a result of higher realized silver and gold prices and higher silver production, partially offset by lower realized lead and zinc prices and higher treatment charges. Working capital and other operating asset and liability changes resulted in a net cash increase of $22.4 million in 2020 compared to an increase in cash of $10.1 million in 2019. Significant variances in working capital changes between 2020 and 2019 resulted from lower accounts receivable, higher accounts payable, and higher accruals for incentive compensation and taxes, partially offset by higher product inventory.

[[GREPCENT_TABLE]]
[["","","Year Ended December 31,"],["","","2021","","","2020","","","2019"],["Cash used in investing activities (in millions)","","$","107.0","","","$","92.9","","","$","119.9"]]
[[/GREPCENT_TABLE]]

Capital expenditures were $109.0 million in 2021, including $9.1 million for acquisition of royalty interests and land at our operations and excluding non-cash lease additions of $4.9 million, which was $18.0 million higher than capital expenditures in 2020. The increase was due to increased spending at Lucky Friday and Casa Berardi. We recognized $1.8 million in proceeds from the exchange of investments in 2021 and purchased marketable equity securities having a cost basis of $2.2 million during 2020.

Capital expenditures were $91.0 million in 2020, excluding non-cash lease additions of $9.1 million, which was $30.4 million lower than capital expenditures in 2019. The decrease was due to reduced spending at Nevada, Greens Creek and San Sebastian, partially offset by higher capital expenditures at Lucky Friday and Casa Berardi. During 2019, we purchased marketable equity securities having a cost basis of $0.4 million and sold marketable equity securities for proceeds of $1.8 million.

[[GREPCENT_TABLE]]
[["","","Year Ended December 31,"],["","","2021","","","2020","","","2019"],["Cash provided by (used in) financing activities (in millions)","","$","(32.6",")","","$","(19.4",")","","$","33.2"]]
[[/GREPCENT_TABLE]]

We had no borrowings or repayments of debt during 2021. In 2020 and 2019, we had aggregate draws of $210.0 million and $279.5 million, respectively, on our revolving credit facility, with repayments of the same amounts in those years. In addition, in 2020 we received $469.5 million and $36.8 million in net proceeds from the issuance of our Senior Notes and IQ Notes, respectively, and had debt repayments of $506.5 million for redemption of our 2021 Notes. In 2021, 2020 and 2019, we paid total cash dividends on our common and preferred stock of $20.7 million, $9.2 million and $5.5 million, respectively. We made payments on our finance leases of $7.3 million, $6.0 million, and $7.2 million in 2021, 2020, and 2019, respectively. We also purchased shares of our common stock for $4.5 million, $2.7 million, and $2.2 million in 2021, 2020, and 2019, respectively, as a result of our employees' election to utilize net share settlement to satisfy their tax withholding obligations related to incentive compensation paid in stock and vesting of restricted stock units. See Note 12 of Notes to Consolidated Financial Statements for more information.

Exchange rate fluctuations between the U.S. dollar and the Canadian dollar and Mexican peso resulted in a decrease in our cash balance of $0.5 million during 2021, a decrease of $1.1 million during 2020 and an increase of $0.9 million in 2019.

89

Contractual Obligations and Contingent Liabilities and Commitments

The table below presents our fixed, non-cancelable contractual obligations and commitments primarily related to our Senior Notes, IQ Notes, revolving credit facility, outstanding purchase orders and certain service contract commitments, and lease arrangements as of December 31, 2021 (in thousands): 

[[GREPCENT_TABLE]]
[["","","Payments Due By Period"],["","","Less than 1 year","","","2-3 years","","","4-5 years","","","After 5 years","","","Total"],["Purchase and contractual obligations (1)","","$","18,932","","","$","\u2014","","","$","\u2014","","","$","\u2014","","","$","18,932"],["Commitment fees (2)","","","1,717","","","","179","","","","\u2014","","","","\u2014","","","","1,896"],["Finance lease commitments (3)","","","6,097","","","","7,578","","","","556","","","","\u2014","","","","14,231"],["Operating lease commitments (4)","","","3,153","","","","4,095","","","","2,117","","","","6,418","","","","15,783"],["Senior Notes (5)","","","34,438","","","","68,875","","","","68,875","","","","513,742","","","","685,930"],["IQ Notes (6)","","","2,479","","","","4,958","","","","39,342","","","","\u2014","","","","46,779"],["Total contractual cash obligations","","$","66,816","","","$","85,685","","","$","110,890","","","$","520,160","","","$","783,551"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["(1)","Consists of open purchase orders and contractual obligations of approximately $4.8 million at Greens Creek, $10.2 million at Lucky Friday, $0.1 million at Casa Berardi, and $3.8 million at the Nevada Operations."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["(2)","We have a $250 million revolving credit agreement which is currently undrawn. We had $17.3 million in letters of credit outstanding as of December 31, 2021. The amounts in the table above assume no additional amounts will be drawn in future periods, and include only the standby fee on the current undrawn balance. For more information on our credit facility, see Note 9 of Notes to Consolidated Financial Statements."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["(3)","Includes scheduled finance lease payments of $12.5 million and $1.7 million (including interest) for equipment at Greens Creek and Casa Berardi, respectively. These leases have fixed payment terms and contain bargain purchase options at the end of the lease periods. See Note 9 of Notes to Consolidated Financial Statements for more information."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["(4)","We enter into operating leases in the normal course of business. Substantially all lease agreements have fixed payment terms based on the passage of time. Some lease agreements provide us with the option to renew the lease or purchase the leased property. Our future operating lease obligations would change if we exercised these renewal options and if we entered into additional operating lease arrangements. See Note 9 of Notes to Consolidated Financial Statements for more information."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["(5)","On February 19, 2020, we completed an offering of $475 million in aggregate principal amount of our Senior Notes due February 15, 2028. The Senior Notes bear interest at a rate of 7.25% per year with interest payable on February 15 and August 15 of each year, commencing August 15, 2020. See Note 9 of Notes to Consolidated Financial Statements for more information."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["(6)","On July 9, 2020, we entered into a note purchase agreement pursuant to which we issued our IQ Notes for CAD$50 million (approximately USD$36.8 million at the time of the transaction) in aggregate principal amount. The IQ Notes bear interest on amounts outstanding at a rate of 6.515% per year, payable on January 9 and July 9 of each year, commencing January 9, 2021. See Note 9 of Notes to Consolidated Financial Statements for more information."]]
[[/GREPCENT_TABLE]]

We record liabilities for estimated costs associated with mine closure, reclamation of land and other environmental matters.  At December 31, 2021, our liabilities for these matters totaled $113.2 million.  Future expenditures related to closure, reclamation and environmental expenditures at our other sites are difficult to estimate, although we anticipate we will incur expenditures relating to these obligations over the next 30 years. For additional information relating to our environmental obligations, see Note 5 of Notes to Consolidated Financial Statements and Item 1A. Risk Factors – Our environmental obligations may exceed the provisions we have made. As discussed in Note 15 of Notes to Consolidated Financial Statements, we are involved in various other legal proceedings which may result in obligations in excess of provisions we have made.

90

Critical Accounting Estimates

Our significant accounting policies are described in Note 2 of Notes to Consolidated Financial Statements. As described in such Note 2, we are required to make estimates and assumptions that affect the reported amounts and related disclosures of assets, liabilities, revenue, and expenses. Our estimates are based on our experience and our interpretation of economic, political, regulatory, and other factors that affect our business prospects. Actual results may differ significantly from our estimates.

We believe that our most critical accounting estimates are related to future metals prices; obligations for environmental, reclamation, and closure matters; mineral reserves and resources; accounting for business combinations; valuation of deferred tax assets and assumptions used in accounting for our pension plans, as they require us to make assumptions that are highly uncertain at the time the accounting estimates are made and changes in them are reasonably likely to occur from period to period. Management has discussed the development and selection of these critical accounting estimates with the Audit Committee of our board of directors, and the Audit Committee has reviewed the disclosures presented below. In addition, there are other items within our financial statements that require estimation, but are not deemed to be critical. However, changes in estimates used in these and other items could have a material impact on our financial statements.

Future Metals Prices

Metals prices are key components in estimates that determine the valuation of some of our significant assets and liabilities, including properties, plants, equipment and mineral interests, deferred tax assets, and certain accounts receivable. Metals prices are also an important component in the estimation of reserves and resources.  As shown above in Item 1. – Business, metals prices have historically been volatile. Silver demand arises from investment demand, particularly in exchange-traded funds, industrial demand, and consumer demand. Gold demand arises primarily from investment and consumer demand.  Investment demand for silver and gold can be influenced by several factors, including:  the value of the U.S. dollar and other currencies, changing U.S. budget deficits, widening availability of exchange-traded funds, interest rate levels, the health of credit markets, and inflationary expectations.  Uncertainty related to (i) the political environment in the U.S., (ii) U.S. and global trading policies (including tariffs), (iii) a global economic recovery, (iv) recent uncertainty in China and (v) from the current downturn and continued uncertainty resulting from the COVID-19 outbreak and any subsequent variants, could result in continued investment demand for precious metals.  Industrial demand for silver is closely linked to world Gross Domestic Product growth and industrial fabrication levels, as it is difficult to substitute for silver in industrial fabrication.  Consumer demand is driven significantly by demand for jewelry and other retail products. We believe that long-term industrial and economic trends, including demand for metals to decarbonize the economy and urbanization and growth of the middle class in countries such as China and India, will result in continued consumer demand for silver and gold and industrial demand for silver.  However, the global economy has been significantly impacted by the COVID-19 outbreak, with the ultimate severity and duration of the downturn unknown. There can be no assurance whether these trends will continue or how they will impact prices of the metals we produce. In the past, we have recorded impairments to our asset carrying values because of low prices, and we can offer no assurance that prices will either remain at their current levels or increase. 

Processes supporting valuation of our assets and liabilities that are most significantly affected by metals prices include analysis of asset carrying values, depreciation, reserves and resources, and deferred income taxes. On at least an annual basis - and more frequently if circumstances warrant - we examine our depreciation rates, reserve estimates, and the valuation allowances on our deferred tax assets. We examine the carrying values of our assets as changes in facts and circumstances warrant.  In our evaluation of carrying values and deferred taxes, we apply several pricing views to our forecasting model, including current prices, analyst price estimates, forward-curve prices, and historical prices (see Mineral Reserves and Resources, below, regarding prices used for reserve and resource estimates). Using applicable accounting guidance and our view of metals markets, we use the probability-weighted average of the various methods to determine whether the values of our assets are fairly stated, and to determine the level of valuation allowances, if any, on our deferred tax assets.  In addition, estimates of future metals prices are used in the valuation of certain assets in the determination of the purchase price allocations for our acquisitions (see Business Combinations below).

91

Sales of concentrates sold directly to customers are recorded as revenues upon completion of the performance obligations and transfer of control of the product to the customer (generally at the time of shipment) using estimated forward metals prices for the estimated month of settlement. Due to the time elapsed between shipment of concentrates to the customer and final settlement with the customer, we must estimate the prices at which sales of our metals will be settled. Previously recorded sales and trade accounts receivable are adjusted to estimated settlement prices until final settlement by the customer. Changes in metals prices between shipment and final settlement result in changes to revenues and accounts receivable previously recorded upon shipment.  As a result, our trade accounts receivable balances related to concentrate sales are subject to changes in metals prices until final settlement occurs.  For more information, see Note 4 of Notes to Consolidated Financial Statements.

We utilize financially-settled forward contracts to manage our exposure to changes in prices for silver, gold, zinc and lead.  See Item 7A. – Quantitative and Qualitative Disclosures About Market Risk - Commodity-Price Risk Management below for more information on our contract programs.  Effective November 1, 2021, we designated the contracts for lead and zinc as hedges for accounting purposes, with gains and losses deferred to accumulated other comprehensive income until the hedged product ships. Prior to November 1, 2021, these contracts were not designated as hedges for accounting purposes and were therefore marked-to-market through earnings each period.  Changes in silver, gold, zinc and lead prices between the dates that the contracts are entered into and their settlements will result in changes to the fair value asset or liability associated with the contracts, with a corresponding gain or loss for silver and gold contracts recognized in earnings and gain or loss for lead and zinc contracts deferred to accumulated other comprehensive income (loss).

Obligations for Environmental, Reclamation and Closure Matters

Accrued reclamation and closure costs can represent a significant and variable liability on our balance sheet. We have estimated our liabilities under appropriate accounting guidance; however, the ranges of liability could exceed the liabilities recognized. If substantial damages were awarded, claims were settled, or remediation costs incurred in excess of our accruals, our financial results or condition could be materially adversely affected.

Mineral Reserves and Resources

Critical estimates are inherent in the process of determining our reserves and resources. Our reserves and resources are affected largely by our assessment of future metals prices, as well as by engineering and geological estimates of ore grade, accessibility and production cost. See Item 2. – Properties above for the metals price assumptions used in our estimates of reserves and resources as of December 31, 2021, 2020 and 2019. Our assessment of reserves and resources occurs at least annually, and periodically utilizes external audits.

Reserves and resources are a key component in the valuation of our properties, plants and equipment. Reserve estimates are used in determining appropriate rates of units-of-production depreciation, with net book value of many assets depreciated over remaining estimated reserves. Reserves and resources are also a key component in forecasts, with which we compare future cash flows to current asset values in an effort to ensure that carrying values are reported appropriately. Our forecasts are also used in determining the level of valuation allowances on our deferred tax assets. Reserves and resources also play a key role in the valuation of certain assets in the determination of the purchase price allocations for acquisitions. Annual reserve and resource estimates are also used to determine conversions of resources and exploration targets beyond the known reserve resulting from business combinations to depreciable reserves, in periods subsequent to the business combinations (see Business Combinations below).  Reserves and resources are a culmination of many estimates and are not guarantees that we will recover the indicated quantities of metals or that we will do so at a profitable level.

92

Business Combinations

We are required to allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date.  The valuation of assets acquired and liabilities assumed requires management to make significant estimates and assumptions, especially with respect to long-lived assets (including resources and exploration targets beyond the known reserve). These estimates include future metals prices and mineral reserves and resources, as discussed above.  Management may also be required to make estimates related to the valuation of deferred tax assets or liabilities as part of the purchase price allocation for business combinations. In some cases, we use third-party appraisers to determine the fair values of property and other identifiable assets. In addition, costs related to business combinations are included in earnings as incurred, and our financial results for periods in which business combinations are pursued could be adversely affected as a result.

Valuation of Deferred Tax Assets

Our deferred income tax assets include certain future tax benefits. We record a valuation allowance against any portion of those deferred income tax assets when we believe, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. We review the likelihood that we will realize the benefit of our deferred tax assets and therefore the need for valuation allowances on a quarterly basis, or more frequently if events indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected financial results of the legal entity or consolidated group recording the net deferred tax asset is considered, along with all other available positive and negative evidence.

Certain categories of evidence carry more weight in the analysis than others based upon the extent to which the evidence may be objectively verified. We look to the nature and severity of cumulative pretax losses (if any) in the current three-year period ending on the evaluation date or the expectation of future pretax losses and the existence and frequency of prior cumulative pretax losses.

We utilize a rolling twelve quarters of pre-tax income or loss as a measure of our cumulative results in recent years. Concluding that a valuation allowance is not required is difficult when there is significant negative evidence which is objective and verifiable, such as cumulative losses in recent years. However, a cumulative three year loss is not solely determinative of the need for a valuation allowance. We also consider all other available positive and negative evidence in our analysis.

Other factors considered in the determination of the probability of the realization of the deferred tax assets include, but are not limited to:

[[GREPCENT_TABLE]]
[["","\u2022","Earnings history;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","Projected future financial and taxable income based upon existing reserves and long-term estimates of commodity prices;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","The duration of statutory carry forward periods;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","Prudent and feasible tax planning strategies readily available that may alter the timing of reversal of the temporary difference;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","Nature of temporary differences and predictability of reversal patterns of existing temporary differences; and"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","The sensitivity of future forecasted results to commodity prices and other factors."]]
[[/GREPCENT_TABLE]]

The Company assesses available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. A significant piece of objective negative evidence is recent pretax losses and/or expectations of future pretax losses. Such objective evidence limits the ability to consider other subjective evidence including projections for future growth. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth.

See Note 7 of Notes to Consolidated Financial Statements for additional detail on the valuation allowance.

93

Pension Plan Accounting Assumptions

We are required to make a number of assumptions in estimating the future benefit obligations for, and fair value of assets included in, our pension plans, which impact the amount of liability and net periodic pension cost recognized related to our plans. These include assumptions for applicable discount rates, the expected rate of return on plan assets and the rate of future employee compensation increases. See Note 6 of Notes to Consolidated Financial Statements for more information on the accounting for our pension plans and the related assumptions.

New Accounting Pronouncements 

Accounting Standards Updates Adopted

In December 2019, the FASB issued ASU No. 2019-12 Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The update contains a number of provisions intended to simplify the accounting for income taxes. The update is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. We adopted the update as of January 1, 2021, which did not have a material impact on our consolidated financial statements or disclosures.

Accounting Standards Updates to Become Effective in Future Periods

In August 2020, the FASB issued ASU No. 2020-06 Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The update is to address issues identified as a result of the complexity associated with applying generally accepted accounting principles to certain financial instruments with characteristics of liabilities and equity. The update is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years and with early adoption permitted. We are evaluating the impact of this update on our consolidated financial statements.

Guarantor Subsidiaries

Presented below are Hecla’s condensed consolidating financial statements as required by Rule 3-10 of Regulation S-X of the Securities Exchange Act of 1934, as amended, resulting from the guarantees by certain of Hecla's subsidiaries of the Senior Notes and IQ Notes (see Note 9 of Notes to Consolidated Financial Statements for more information). The Guarantors consist of the following of Hecla's 100%-owned subsidiaries: Hecla Limited; Silver Hunter Mining Company; Rio Grande Silver, Inc.; Hecla MC Subsidiary, LLC; Hecla Silver Valley, Inc.; Burke Trading, Inc.; Hecla Montana, Inc.; Revett Silver Company; RC Resources, Inc.; Troy Mine Inc.; Revett Exploration, Inc.; Revett Holdings, Inc.; Mines Management, Inc.; Newhi, Inc.; Montanore Minerals Corp.; Hecla Alaska LLC; Hecla Greens Creek Mining Company; Hecla Admiralty Company; Hecla Juneau Mining Company; Klondex Holdings Inc.; Klondex Gold & Silver Mining Co.; Klondex Midas Holdings Limited; Klondex Aurora Mine Inc.; Klondex Hollister Mine Inc.; and Hecla Quebec, Inc. We completed the offering of the Senior Notes on February 19, 2020 under our shelf registration statement previously filed with the SEC. We issued the IQ Notes in four equal tranches between July and October 2020.

The condensed consolidating financial statements below have been prepared from our financial information on the same basis of accounting as the consolidated financial statements set forth elsewhere in this report. Investments in the subsidiaries are accounted for under the equity method. Accordingly, the entries necessary to consolidate Hecla, the Guarantors, and our non-guarantor subsidiaries are reflected in the intercompany eliminations column. In the course of preparing consolidated financial statements, we eliminate the effects of various transactions conducted between Hecla and its subsidiaries and among the subsidiaries. While valid at an individual subsidiary level, such activities are eliminated in consolidation because, when taken as a whole, they do not represent business activity with third-party customers, vendors, and other parties. Examples of such eliminations include the following:

[[GREPCENT_TABLE]]
[["","\u2022","Investments in subsidiaries. The acquisition of a company results in an investment in debt or equity capital on the records of the parent company and a contribution to debt or equity capital on the records of the subsidiary. Such investments and capital contributions are eliminated in consolidation."]]
[[/GREPCENT_TABLE]]

94

[[GREPCENT_TABLE]]
[["","\u2022","Capital contributions. Certain of Hecla's subsidiaries do not generate cash flow, either at all or that is sufficient to meet their capital needs, and their cash requirements are routinely met with inter-company advances from their parent companies. Generally on an annual basis, when not otherwise intended as debt, the boards of directors of such parent companies declare contributions of capital to their subsidiary companies, which increase the parents' investment and the subsidiaries' additional paid-in capital. In consolidation, investments in subsidiaries and related additional paid-in capital are eliminated."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","Debt. At times, inter-company debt agreements have been established between certain of Hecla's subsidiaries and their parents. The related debt liability and receivable balances, accrued interest expense (if any) and income activity (if any), and payments of principal and accrued interest amounts (if any) by the subsidiary companies to their parents are eliminated in consolidation."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","Dividends. Certain of Hecla's subsidiaries which generate cash flow routinely provide cash to their parent companies through inter-company transfers. On at least an annual basis, the boards of directors of such subsidiary companies declare dividends to their parent companies, which reduces the subsidiaries' retained earnings and increases the parents' dividend income. In consolidation, such activity is eliminated."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","Deferred taxes. Our ability to realize deferred tax assets and liabilities is considered for two consolidated tax groups of subsidiaries within the United States: The Nevada U.S. Group and the Hecla U.S. Group. Within each tax group, all subsidiaries' estimated future taxable income contributes to the ability of their tax group to realize all such assets and liabilities. However, when Hecla's subsidiaries are viewed independently, we use the separate return method to assess the realizability of each subsidiary's deferred tax assets and whether a valuation allowance is required against such deferred tax assets. In some instances, a parent company or subsidiary may possess deferred tax assets whose realization depends on the future taxable income of other subsidiaries on a consolidated-return basis, but would not be considered realizable if such parent or subsidiary filed on a separate stand-alone basis. In such a situation, a valuation allowance is assessed on that subsidiary's deferred tax assets, with the resulting adjustment reported in the eliminations column of the guarantor and parent's financial statements, as is the case in the financial statements set forth below. The separate return method can result in significant eliminations of deferred tax assets and liabilities and related income tax provisions and benefits. Non-current deferred tax asset balances are included in other non-current assets on the consolidating balance sheets and make up a large portion of that item, particularly for the guarantor balances."]]
[[/GREPCENT_TABLE]]

Separate financial statements of the Guarantors are not presented because the guarantees by the Guarantors are joint and several and full and unconditional, except for certain customary release provisions, including: (1) the sale or disposal of all or substantially all of the assets of the Guarantor; (2) the sale or other disposition of the capital stock of the Guarantor; (3) the Guarantor is designated as an unrestricted entity in accordance with the applicable provisions of the indenture; (4) Hecla ceases to be a borrower as defined in the indenture; and (5) upon legal or covenant defeasance or satisfaction and discharge of the indenture.

95

Condensed Consolidating Balance Sheets

[[GREPCENT_TABLE]]
[["","","As of December 31, 2021"],["","","Parent","","","Guarantors","","","Non- Guarantors","","","Eliminations","","","Consolidated"],["","","(in thousands)"],["Assets"],["Cash and cash equivalents","","$","175,108","","","$","14,082","","","$","20,820","","","$","\u2014","","","$","210,010"],["Other current assets","","","3,083","","","","127,277","","","","1,257","","","","\u2014","","","","131,617"],["Properties, plants, equipment and mineral interests - net","","","1,913","","","","2,300,651","","","","8,246","","","","\u2014","","","","2,310,810"],["Intercompany receivable (payable)","","","(237,252",")","","","(229,707",")","","","219,409","","","","247,550","","","","\u2014"],["Investments in subsidiaries","","","1,562,706","","","","\u2014","","","","\u2014","","","","(1,562,706",")","","","\u2014"],["Other non-current assets","","","352,280","","","","23,897","","","","(125,731",")","","","(174,075",")","","","76,371"],["Total assets","","$","1,857,838","","","$","2,236,200","","","$","124,001","","","$","(1,489,231",")","","$","2,728,808"],["Liabilities and Stockholders' Equity"],["Current liabilities","","$","(436,699",")","","$","233,456","","","$","1,122","","","$","362,504","","","$","160,383"],["Long-term debt","","","508,095","","","","17,200","","","","526","","","","\u2014","","","","525,821"],["Non-current portion of accrued reclamation","","","\u2014","","","","99,516","","","","4,456","","","","\u2014","","","","103,972"],["Non-current deferred tax liability","","","1,764","","","","436,971","","","","\u2014","","","","(289,029",")","","","149,706"],["Other non-current liabilities","","","23,891","","","","3,578","","","","670","","","","\u2014","","","","28,139"],["Stockholders' equity","","","1,760,787","","","","1,445,479","","","","117,227","","","","(1,562,706",")","","","1,760,787"],["Total liabilities and stockholders' equity","","$","1,857,838","","","$","2,236,200","","","$","124,001","","","$","(1,489,231",")","","$","2,728,808"]]
[[/GREPCENT_TABLE]]

Condensed Consolidating Statements of Operations

[[GREPCENT_TABLE]]
[["","","Year Ended December 31, 2021"],["","","Parent","","","Guarantors","","","Non- Guarantors","","","Eliminations","","","Consolidated"],["","","(in thousands)"],["Revenues","","$","(544",")","","$","807,841","","","$","176","","","$","\u2014","","","$","807,473"],["Cost of sales","","","4,674","","","","(422,444",")","","","(109",")","","","\u2014","","","","(417,879",")"],["Depreciation, depletion, and amortization","","","(152",")","","","(171,641",")","","","\u2014","","","","\u2014","","","","(171,793",")"],["General and administrative","","","(13,832",")","","","(19,943",")","","","(795",")","","","\u2014","","","","(34,570",")"],["Exploration and pre-development","","","(182",")","","","(42,195",")","","","(5,524",")","","","\u2014","","","","(47,901",")"],["Fair value adjustments, net","","","(34,017",")","","","1,747","","","","(3,522",")","","","\u2014","","","","(35,792",")"],["Equity in earnings of subsidiaries","","","(225,671",")","","","\u2014","","","","\u2014","","","","225,671","","","","\u2014"],["Other income (expense)","","","237,033","","","","(62,790",")","","","(10,495",")","","","(257,760",")","","","(94,012",")"],["(Loss) income before income taxes","","","(32,691",")","","","90,575","","","","(20,269",")","","","(32,089",")","","","5,526"],["Benefit (provision) from income and mining taxes","","","67,786","","","","(292,705",")","","","(3,272",")","","","257,760","","","","29,569"],["Net income (loss)","","","35,095","","","","(202,130",")","","","(23,541",")","","","225,671","","","","35,095"],["Preferred stock dividends","","","(552",")","","","\u2014","","","","\u2014","","","","\u2014","","","","(552",")"],["Income (loss) applicable to common stockholders","","","34,543","","","","(202,130",")","","","(23,541",")","","","225,671","","","","34,543"],["Net income (loss)","","","35,095","","","","(202,130",")","","","(23,541",")","","","225,671","","","","35,095"],["Changes in comprehensive income (loss)","","","4,433","","","","\u2014","","","","\u2014","","","","\u2014","","","","4,433"],["Comprehensive income (loss)","","$","39,528","","","$","(202,130",")","","$","(23,541",")","","$","225,671","","","$","39,528"]]
[[/GREPCENT_TABLE]]

96

Condensed Consolidating Statements of Cash Flows

[[GREPCENT_TABLE]]
[["","","Year Ended December 31, 2021"],["","","Parent","","","Guarantors","","","Non- Guarantors","","","Eliminations","","","Consolidated"],["","","(in thousands)"],["Cash flows from operating activities","","$","(289,567",")","","$","287,187","","","$","(16,895",")","","$","239,612","","","$","220,337"],["Cash flows from investing activities:"],["Additions to properties, plants, equipment and mineral interests","","","\u2014","","","","(108,905",")","","","(143",")","","","\u2014","","","","(109,048",")"],["Other investing activities, net","","","176,114","","","","2,888","","","","\u2014","","","","(176,983",")","","","2,019"],["Cash flows from financing activities:"],["Dividends paid to stockholders","","","(20,672",")","","","\u2014","","","","\u2014","","","","\u2014","","","","(20,672",")"],["Repayments of debt","","","\u2014","","","","(7,285",")","","","\u2014","","","","\u2014","","","","(7,285",")"],["Other financing activity","","","219,977","","","","(170,887",")","","","8,898","","","","(62,629",")","","","(4,641",")"],["Effect of exchange rate changes on cash","","","\u2014","","","","(318",")","","","(212",")","","","\u2014","","","","(530",")"],["Changes in cash, cash equivalents and restricted cash and cash equivalents","","","85,852","","","","2,680","","","","(8,352",")","","","\u2014","","","","80,180"],["Beginning cash, cash equivalents and restricted cash and cash equivalents","","","89,256","","","","12,455","","","","29,172","","","","\u2014","","","","130,883"],["Ending cash, cash equivalents and restricted cash and cash equivalents","","$","175,108","","","$","15,135","","","$","20,820","","","$","\u2014","","","$","211,063"]]
[[/GREPCENT_TABLE]]

Forward-Looking Statements

The foregoing discussion and analysis, as well as certain information contained elsewhere in this report, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act, and are intended to be covered by the safe harbor created thereby. See the discussion in Special Note on Forward-Looking Statements included prior to Item 1.