HECLA MINING CODE

Previous wording

In this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), “Hecla,” “the Company,” “we,” “us” and “our” refer to Hecla Mining Company and its consolidated subsidiaries, except where the context requires otherwise. You should read this discussion in conjunction with our consolidated financial statements, the related MD&A and the discussion of our Business and Properties in our 2023 Form 10-K filed with the United States Securities and Exchange Commission (the “SEC”). The results of operations reported and summarized below are not necessarily indicative of future operating results (refer to “Forward-Looking Statements” above for further discussion). References to “Notes” are Notes included in our Notes to Condensed Consolidated Financial Statements (Unaudited). Throughout MD&A, all references to losses or income per share are on a diluted basis.

Current wording

In this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), “Hecla,” “the Company,” “we,” “us” and “our” refer to Hecla Mining Company and its consolidated subsidiaries, except where the context requires otherwise. You should read this discussion in conjunction with our consolidated financial statements, the related MD&A and the discussion of our Business and Properties for the year ended December 31, 2023, which were revised to conform with current year financial statement changes as described in Note 2 "Business Segments and Sales of Products", and are included in Exhibit 99.1 to the Company's Current Report on Form 8-K filed May 20, 2024, with the United States Securities and Exchange Commission (the “SEC”). The results of operations reported and summarized below are not necessarily indicative of future operating results (refer to “Forward-Looking Statements” above for further discussion). References to “Notes” are Notes included in our Notes to Condensed Consolidated Financial Statements (Unaudited). Throughout this MD&A, all references to losses or income per share are on a diluted basis.

Previous wording

Produced 4.2 million ounces of silver and 36,592 ounces of gold. See Consolidated Results of Operations below for information on total cost of sales, as well as cash costs and all in sustaining costs, each after by-product credits, per silver and gold ounce for the three-month periods ended March 31, 2024 and 2023.

Current wording

Produced 4.5 million ounces of silver, a 16% increase over the prior year's comparable quarter and 37,324 ounces of gold. See Consolidated Results of Operations below for information on total cost of sales, as well as cash costs and all-in sustaining costs, each after by-product credits, per silver and gold ounce for the three-month periods ended June 30, 2024 and 2023.

Previous wording

Keno Hill produced 0.6 million ounces of silver as ramp-up of production continued during the quarter.

Current wording

Keno Hill produced 0.9 million ounces of silver as ramp-up of production continued during the quarter.

Previous wording

Invested in our operations by making capital expenditures of approximately $47.6 million, including $8.8 million at Greens Creek, $15.0 million at Lucky Friday, $13.3 million at Casa Berardi and $10.3 million at Keno Hill.

Current wording

Invested in our operations by making capital expenditures of approximately $50.4 million, including $11.7 million at Greens Creek, $10.8 million at Lucky Friday, $12.4 million at Casa Berardi and $14.5 million at Keno Hill.

Previous wording

Collected $17.4 million in insurance proceeds related to the Lucky Friday fire.

Current wording

Collected $17.8 million in insurance proceeds related to the Lucky Friday fire.

Previous wording

Spent $4.3 million on exploration and pre-development activities.

Current wording

Spent $6.7 million on exploration and pre-development activities.

Previous wording

Our financial results vary as a result of fluctuations in market prices primarily for silver and gold and, to a lesser extent, zinc and lead. World market prices for these commodities have fluctuated historically and are affected by numerous factors beyond our control. Beginning in 2020, with the onset of the COVID-19 pandemic, and continuing in 2024 because of a series of macro-economic factors, there has been significant volatility in the financial and commodities markets, including the precious metals market. We believe the outlook for precious metals fundamentals in the medium- and long-term are favorable. See Item 1A. “Risk Factors” contained in Part I of our annual report on Form 10-K for the year ended December 31, 2023 ("2023 Form 10-K"), for further discussion. Because we cannot control the price of our products, the key measures that management focuses on in operating our business are production volumes, payable sales volumes, Cash Cost, After By-product Credits, per Ounce (non-GAAP) and All-In Sustaining Cost, After By-product Credits, per Ounce (“AISC”) (non-GAAP), operating cash flows, capital expenditures, free cash flow and adjusted EBITDA. The average realized prices for all metals sold by us continued to exhibit significant volatility period over period. We have also experienced significant cost inflation across our operations, principally associated with higher energy prices, increased costs for other consumables such as reagents, explosives and steel, and higher labor and contractor costs.

Current wording

Our financial results vary as a result of fluctuations in market prices primarily for silver and gold and, to a lesser extent, zinc and lead. World market prices for these commodities have fluctuated historically and are affected by numerous factors beyond our control. We believe that the outlook for precious metals fundamentals in the medium- and long-term is favorable due to macro-economic factors such as interest rate expectations, geopolitical uncertainty and global growth expectations, which have resulted in significant volatility in the financial and commodities markets, including the precious metals market. See Item 1A. “Risk Factors” contained in Part I of our annual report on Form 10-K for the year ended December 31, 2023 ("2023 Form 10-K"), for further discussion. Because we cannot control the price of our products, the key measures that management focuses on in operating our business are production volumes, payable sales volumes, Cash Cost, After By-product Credits, per Ounce (non-GAAP) and All-In Sustaining Cost, After By-product Credits, per Ounce (“AISC”) (non-GAAP), operating cash flows, capital expenditures, free cash flow and adjusted EBITDA. The average realized prices for all metals sold by us continued to exhibit significant volatility period over period. We have also experienced significant cost inflation across our operations, principally associated with higher energy prices, increased costs for other consumables such as reagents, explosives and steel, and higher labor and contractor costs.

Previous wording

Total sales for the three months ended March 31, 2024 and 2023 were as follows:

Current wording

Total sales for the three and six months ended June 30, 2024 and 2023 were as follows:

Previous wording

Environmental remediation services revenue is generated by performing remediation work in the historical Yukon Territory mining district on behalf of the Canadian government. The scope of all work is agreed to in advance by the Canadian government, and it is essentially pass through in nature with minimal margin generated by the Company in performing this work.

Current wording

Environmental remediation services revenue is generated by performing remediation work in the historical Yukon Territory mining district on behalf of the Canadian government. The scope and estimated cost of all work is agreed to in advance by the Canadian government, and the expenses incurred are essentially passed through to the government for reimbursement with minimal margin generated by the Company in performing this work.

Previous wording

Total metal sales for the three months ended March 31, 2024 and 2023, and the approximate variances attributed to differences in metals prices, sales volumes and smelter terms, were as follows:

Current wording

Total metal sales for the three and six months ended June 30, 2024 and 2023, and the approximate variances attributed to differences in metals prices, sales volumes and smelter terms, were as follows:

Previous wording

The fluctuations in sales for the three months ended March 31, 2024 compared to the same period in 2023 were primarily due to the following two reasons:

Current wording

The fluctuations in sales for the three and six months ended June 30, 2024 compared to the same period in 2023 were primarily due to the following two reasons:

Previous wording

Higher average realized prices for silver and gold partially offset by lower average realized prices for lead and zinc during the three months ended March 31, 2024, compared to the same periods in 2023. The table below summarizes spot prices and our realized prices for the commodities we sell:

Current wording

Higher average realized prices for precious and base metals during the three and six months ended June 30, 2024, compared to the same periods in 2023. The table below summarizes average spot prices and our average realized prices for the commodities we sell:

Previous wording

Average realized prices typically 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 the 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 $3.5 million and $2.1 million for the three months ended March 31, 2024, and 2023, respectively. The price adjustments related to silver, gold, zinc and lead contained in our concentrate shipments were partially offset by gains and losses on forward contracts for those metals. See Note 8 of Notes to Condensed Consolidated Financial Statements (Unaudited)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 concentrate, doré and carbon material shipped during the period.

Current wording

Average realized prices typically 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 the 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 $11.0 million and $14.5 million for the three and six months ended June 30, 2024, respectively, and $2.1 million and $4.2 million for the three and six months ended June 30, 2023, respectively. The price adjustments related to silver, gold, zinc and lead contained in our concentrate shipments were partially offset by gains and losses on forward contracts for those metals. See Note 8 of Notes to Condensed Consolidated Financial Statements (Unaudited)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 concentrate, doré and carbon material shipped during the period.

Previous wording

Lower quantities of all metals sold during the three months ended March 31, 2024 compared to the same periods in 2023. This was primarily due to lower gold production and related sales at Casa Berardi, partially offset by sales from Keno Hill during the quarter following production commencing in the second quarter of 2023. See The Greens Creek Segment, The Lucky Friday Segment, The Keno Hill Segment, and Casa Berardi Segment sections below for more information on metal production and sales volumes at each of our operating segments. Total metals production and sales volumes for each period are shown in the following table:

Current wording

Higher quantities of silver sold during the three and six months ended June 30, 2024, compared to the same periods in 2023, primarily due to higher and more consistent throughput at Keno Hill, as the site has continued ramp-up of production during the year. See The Greens Creek Segment, The Lucky Friday Segment, The Keno Hill Segment, and Casa Berardi Segment sections below for more information on metal production and sales volumes at each of our operating segments. Total metals production and sales volumes for each period are shown in the following table:

Previous wording

Sales, total cost of sales, gross profit (loss), Cash Cost, After By-product Credits, per Ounce (“Cash Cost”) (non-GAAP) and AISC (non-GAAP) at our operating units for the three months ended March 31, 2024 and 2023 were as follows (in thousands, except for Cash Cost and AISC):

Current wording

Sales, total cost of sales, gross profit (loss), Cash Cost, After By-product Credits, per Ounce (“Cash Cost”) (non-GAAP) and AISC (non-GAAP) at our operating units for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands, except for Cash Cost and AISC):

Previous wording

We reported a net loss applicable to common stockholders of $5.9 million for the three months ended March 31, 2024, compared to a net loss applicable to common stockholders of $3.3 million in the comparable period in 2023. The following were the significant drivers of changes in net loss applicable to common stockholders compared to 2023:

Current wording

We reported a net income applicable to common stockholders of $27.7 million for the three months ended June 30, 2024, compared to a net loss applicable to common stockholders of $15.8 million in the comparable period in 2023. The following were the significant drivers of changes in net income applicable to common stockholders compared to 2023:

Previous wording

Consolidated gross profit decreased by $15.8 million. See The Greens Creek Segment, The Lucky Friday Segment, The Keno Hill Segment, and The Casa Berardi Segment sections below for a discussion on the key drivers by operating unit.

Current wording

Consolidated gross profit increased by $13.8 million. See The Greens Creek Segment, The Lucky Friday Segment, The Keno Hill Segment, and The Casa Berardi Segment sections below for a discussion on the key drivers by operating unit.

Previous wording

Other operating income (expense) increased by $16.9 million primarily due to the $17.4 million of insurance proceeds received during the quarter related to the Lucky Friday fire.

Current wording

Other operating income, net increased by $13.0 million primarily due to $17.8 million of insurance proceeds received during the quarter related to the Lucky Friday fire. Other operating income, net in the prior period included $5.9 million of insurance proceeds related to a coverage lawsuit.

Previous wording

Fair value adjustments, net losses increased by $5.0 million primarily due to higher unrealized losses on undesignated derivative contracts of $2.9 million and higher unrealized losses on our marketable equity securities portfolio of $2.1 million than in the comparable period in 2023.

Current wording

Fair value adjustments, net increased by $2.5 million primarily due to $9.0 million of unrealized gains on our marketable equity securities portfolio compared to the comparable period in 2023. This was partially offset by unrealized losses on undesignated derivative contracts resulting from a $6.5 million negative movement when compared to the comparable period in 2023.

Previous wording

Net foreign exchange gain increased by $3.9 million to $4.0 million reflecting the continued strengthening of the US dollar against the Canadian dollar impact, and related impact on the revaluation of our Canadian monetary assets and liabilities.

Current wording

Net foreign exchange gain increased by $10.4 million to $6.7 million reflecting the continued strengthening of the US dollar against the Canadian dollar, and related impact on the revaluation of our Canadian monetary assets and liabilities.

Previous wording

The $4.9 million decrease in gross profit for the first quarter of 2024 compared to the same period in 2023 was primarily due to lower sales volumes for all metals produced except zinc and higher cost of sales and other direct production costs attributable to an increase in hourly labor rates during the quarter, higher contractor labor maintenance expense, partially offset by higher realized silver and gold prices and lower treatment and refining charges. Capital additions increased by $2.2 million in the same period primarily due to higher mobile equipment purchases and the mine infrastructure development.

Current wording

The $6.0 million increase in gross profit for the three months ended June 30, 2024, compared to the same period in 2023 was primarily due to higher realized sales prices for all metals sold, partially offset by lower metals sales volumes. Capital additions increased by $2.9 million in the same period primarily due to primary ore access development.

Previous wording

The increase in Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for the quarter compared to the same quarter in 2023 was primarily due to higher production costs and higher sustaining capital, respectively.

Current wording

For the six months ended June 30, 2024, the increase in Cash Cost, After By-product Credits, per Silver Ounce was primarily due to higher production costs and lower ounces produced. In addition to the factors impacting Cash Cost per Silver Ounce, AISC, After By-product Credits, per Silver Ounce was also impacted by higher sustaining capital.

Previous wording

During August 2023, mining was suspended while repairing an unused station in the #2 ventilation shaft, which is also the secondary egress. While under repair, a fire occurred causing damage to the station and shaft. The operation remained suspended due to a fire at the unused station. By early September, the fire had been extinguished, normal ventilation was reestablished and the workforce recalled. Following evaluation of alternatives, it was determined that in order to safely bring the mine back into production in the most rapid and cost-effective way, a new secondary egress needed to be developed to bypass the damaged portion of the #2 shaft. The new egress extends an existing ramp 1,600 feet, installed a 290-foot-long manway raise, and developed an 850-foot ventilation raise. This work resulted in operations being suspended for the remainder of 2023, with the mine restarting production on January 9th, and ramping up to full production during March. The Company has property and business interruption insurance coverage with an underground sub-limit of $50.0 million, and to date has received $17.4 million in property damage and business interruption insurance proceeds. There can be no assurance that we will succeed in receiving the full $50 million.

Current wording

During August 2023, mining was suspended while repairing an unused station in the #2 ventilation shaft, which is also the secondary egress. While under repair, a fire occurred causing damage to the station and shaft. The operation remained suspended due to a fire at the unused station. By early September, the fire had been extinguished, normal ventilation was reestablished and the workforce recalled. Following evaluation of alternatives, it was determined that in order to safely bring the mine back into production in the most rapid and cost-effective way, a new secondary egress needed to be developed to bypass the damaged portion of the #2 shaft. The new egress extends an existing ramp 1,600 feet, installed a 290-foot-long manway raise, and developed an 850-foot ventilation raise. This work resulted in operations being suspended for the remainder of 2023, with the mine restarting production on January 9, 2024, and ramping up to full production during March. The Company has property and business interruption insurance coverage with an underground sub-limit of $50.0 million, and through June 30, 2024, has received $35.2 million in property damage and business interruption insurance proceeds. There can be no assurance that we will succeed in receiving the full $50 million. The discussion of Lucky Friday's results below for the six months ended June 30, 2024 and 2023, have been impacted by the previously suspended operations.

Previous wording

Gross profit decreased by $6.8 million for the quarter ended March 31, 2024, compared to the same period in 2023, reflecting a combination of lower sales volumes for all metals produced as the mine ramped up to full production and higher maintenance, mining and milling costs, partially offset by higher realized silver prices.

Current wording

Gross profit increased by $4.3 million for the six months ended June 30, 2024, compared to the same period in 2023, reflecting higher realized prices for all metals produced, partly offset by lower sales volumes for all metals produced as the mine ramped up to full production following restart of operations on January 9, 2024.

Previous wording

The increase in Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce compared to the same period in 2023 was primarily due to a combination of lower production and lower by-product credits in 2024.

Current wording

The decrease in Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for the three months ended June 30, 2024, compared to the same period in 2023 was primarily due to a combination of higher production and higher by-product credits, primarily resulting from an increase in base metals prices during the quarter.

Previous wording

We acquired our Keno Hill operations as part of the Alexco acquisition on September 7, 2022, and have focused on development activities and began initial operation of the mill during the second quarter of 2023. The average throughput during the first quarter of 2024 was 277 tons per day, with silver grades milled of 26.3 ounces per ton.

Current wording

We acquired our Keno Hill operations as part of the acquisition of Alexco Resource Corp. ("Alexco") on September 7, 2022, and have focused on development activities and began initial operation of the mill during the second quarter of 2023. The average throughput during the six months ended June 30, 2024, was 341 tons per day, with silver grades milled of 25.6 ounces per ton.

Previous wording

During 2024, Keno Hill recorded both sales and total cost of sales of $10.8 million, related to the concentrate produced and sold. The first quarter 2024 had $8.7 million of site-specific ramp up costs included in Ramp-up and suspension costs, compared to $5.9 million in the first quarter of 2023. Keno Hill recorded capital additions of $10.3 million, related to various mine underground development projects, mobile equipment purchases and deposits on long lead items for the the cemented tails batch plant.

Current wording

During the three months ended June 30, 2024, Keno Hill recorded sales and total cost of sales of $29.0 million related to concentrate produced and sold. The second quarter of 2024 had $1.8 million of site-specific ramp-up costs included in ramp-up and suspension costs, compared to $9.4 million in the second quarter of 2023. During the quarter, Keno Hill recorded capital additions of $14.5 million, related to various mine underground development projects, mobile equipment purchases and other projects including a surface backfill plant.

Previous wording

As part of the transition of the Casa Berardi mine from a combined underground and open pit operation to an open pit only operation, the lower margin east mine underground operations were closed in July 2023 and only the higher margin stopes of the west underground mine will be mined throughout mid-2024, at which time most underground activity, except for exploration will cease. This strategic change has resulted in production and sales decreasing significantly compared to the three-month period ended March 31, 2023. Following the halt to underground mining, Casa Berardi is expected to only produce gold from the 160 open pit, and at lower volumes than historic production levels with production expected to conclude no later than 2027. We forecast a gap in production from at least 2028 to at least 2030 when no ore will be mined and there will be no revenue. During this hiatus, our focus will be on investing in infrastructure and equipment, and on permitting and stripping two expected new open pits, Principal and West Mine Crown Pillar.. We expect to resume open pit mining at Casa Berardi no earlier than 2030, and anticipate that the mine will generate significant free cash flow at current gold prices.

Current wording

As part of the transition of the Casa Berardi mine from a combined underground and open pit operation to an open pit only operation, the lower margin east mine underground operations were closed in July 2023 and only the higher margin stopes of the west underground mine will be mined until they are exhausted. Following a recently completed stope-by-stope analysis this is expected to be at the end of 2024, at which time most underground activity, except for exploration is expected to cease. Following the halt to underground mining, Casa Berardi is expected to only produce gold from the 160 open pit, and at lower volumes than historic production levels with production expected to conclude no later than 2027. We forecast a gap in production from at least 2028 to at least 2030 when no ore will be mined and there will be no revenue. During this hiatus, our focus is expected to be on investing in infrastructure and equipment, and on permitting and stripping two expected new open pits, Principal and West Mine Crown Pillar. We expect to resume open pit mining at Casa Berardi no earlier than 2030, and anticipate that the mine will generate significant free cash flow at current gold prices.

Previous wording

Gross loss increased by $4.7 million to $16.7 million for the period ended March 31, 2024, compared to a gross loss of $12.0 million in the same period in 2023. The increase in gross loss includes $5.1 million in product inventory net realizable value write downs attributable to higher depreciation, depletion and amortization expense, reflecting the accelerated amortization of the west underground mine, the purchase of mobile equipment fleet in June and early July 2023 and the cessation of capitalization of any underground mine development costs effective July 2023. Processing of lower grade tonnage from both the underground and surface operations, higher costs related to mill maintenance and optimization activities, and higher fuel and other consumables costs, also contributed to the increased gross loss compared to the same period in 2023. Capital additions decreased by $3.8 million compared to the same period in 2023, primarily related to the cessation of capitalization of underground development.

Current wording

Gross loss increased by $7.8 million to $25.4 million for the six months ended June 30, 2024, compared to a gross loss of $17.6 million in the same period in 2023. The increase in gross loss includes $6.3 million in product inventory net realizable value write downs attributable to higher depreciation, depletion and amortization expense, reflecting the accelerated amortization of the west underground mine, the purchase of mobile equipment fleet in June and early July 2023 and the cessation of capitalization of any underground mine development costs effective July 2023. As mentioned above, the prior period contained $2.2 million of costs classified as suspension costs in relation to the mine's suspension of activities caused by road closures from the Quebec forest fires. Capital additions decreased by $12.2 million during the six-month period ended June 30, 2024, compared to the same period in 2023, primarily related to the cessation of capitalization of underground development. The majority of capital additions for the current year have related to a tailings dam raise and paste backfill.

Previous wording

The decrease in Cash Cost After By-product Credits, per Gold Ounce, for the first quarter 2024 compared to the same period for 2023 was primarily due to lower production costs from the cessation of underground mining of the east mine during July 2023, partially offset by lower production. Decreased sustaining capital for the first quarter of 2024, reflecting no underground development positively impacted AISC, After By-product Credits, per Gold Ounce.

Current wording

The decrease in Cash Cost After By-product Credits, per Gold Ounce, for the six months ended June 30, 2024 was primarily related to lower production costs from the cessation of underground mining of the east mine during July 2023, in addition to higher production. Decreased sustaining capital for the six months ended June 30, 2024, reflecting no underground development and the prior period containing machinery and equipment expenditures related to surface operations positively impacted AISC, After By-product Credits, per Gold Ounce.

Previous wording

During the three months ended March 31, 2024, an income and mining tax provision of $1.8 million resulted in an effective tax rate of negative 46.1%. This compares to an income and mining tax provision of $3.2 million for the three months ended March 31, 2023, which resulted in an effective tax rate of 4699.0%. The comparability of our income and mining tax provision and effective tax rate for the reported periods was impacted by multiple factors, primarily: (i) mining taxes; (ii) variations in our income before income taxes; (iii) geographic distribution of that income; (iv) foreign exchange rates including non-recognition of foreign exchange gains and losses; (v) percentage depletion; and (vi) the non-recognition of tax assets. The effective tax rate will fluctuate, sometimes significantly, period to period. The change in the effective tax rate during the three months ended March 31, 2024 compared to the comparable periods in 2023 is primarily related to the reported consolidated loss as well as the losses incurred at the consolidated Alexco subsidiaries, and the Nevada subsidiaries, for which no tax benefit is recognized due to uncertainty surrounding our ability to utilize these future tax benefits.

Current wording

During the three and six months ended June 30, 2024, an income and mining tax provision of $9.1 million and $10.9 million, respectively, resulted in an effective tax rate of 24.6% and 33.0%, respectively. This compares to an income and mining tax provision of $5.2 million and $8.4 million which resulted in an effective tax rate of -49.0% and -80.3%, for the three and six months ended June 30, 2023, respectively. The comparability of our income and mining tax provision and effective tax rate for the reported periods was impacted by multiple factors, primarily: (i) mining taxes; (ii) variations in our income before income taxes; (iii) geographic distribution of that income; (iv) foreign exchange rates including non-recognition of foreign exchange gains and losses; (v) percentage depletion; and (vi) the non-recognition of tax assets. The effective tax rate will fluctuate, sometimes significantly, period to period. The change in the effective tax rate during the three and six months ended June 30, 2024, compared to the comparable periods in 2023 is primarily related to the reported consolidated income (loss) as well as the losses incurred at our consolidated Alexco subsidiaries, and our Nevada subsidiaries, for which no tax benefit is recognized due to uncertainty surrounding our ability to utilize these future tax benefits.

Previous wording

The tables below present reconciliations between the most comparable GAAP measure of total cost of sales 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 three months ended March 31, 2024 and 2023.

Current wording

The tables below present reconciliations between the most comparable GAAP measure of total cost of sales 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 three and six months ended June 30, 2024 and 2023.

Previous wording

For the three months ended March 31, 2024, Other includes $4.4 million of sales and $3.9 million, of total cost of sales, from our environmental remediation services in the Yukon compared to $0.5 million of sales and $0.4 million of total cost of sales for the three months ended March 31, 2023.

Current wording

Other includes $3.6 million and $7.5 million of total cost of sales for the three and six months ended June 30, 2024, respectively, related to our environmental remediation services business. For the three and six months ended June 30, 2023, Other includes total cost of sales of $1.1 million and $1.8 million, respectively, related to our environmental remediation services business and Nevada operations.

Previous wording

Keno Hill is in the ramp-up phase of production and is excluded from the calculation of total cost of sales, Cash Cost, Before By-product Credits, Cash Cost, After By-product Credits, AISC, Before By-product Credits, and AISC, After By-product Credits.

Current wording

Keno Hill is in the ramp-up phase of production and is excluded from the calculation of Cash Cost, Before By-product Credits, Cash Cost, After By-product Credits, AISC, Before By-product Credits, and AISC, After By-product Credits.

Previous wording

At March 31, 2024, we had $80.2 million in cash and cash equivalents, of which $5.5 million was held in foreign subsidiaries' local currency that we anticipate utilizing for near-term operating, exploration or capital costs by those foreign subsidiaries. At March 31, 2024, we had utilized $140.0 million drawn on our credit facility of $150 million, with $6.8 million used for letters of credit and the remainder available as borrowings. 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.

Current wording

At June 30, 2024, we had $24.6 million in cash and cash equivalents, of which $4.9 million was held in foreign subsidiaries' local currency that we anticipate utilizing for near-term operating, exploration or capital costs by those foreign subsidiaries. At June 30, 2024, we had utilized $62.0 million drawn on our credit facility of $225 million, with $6.3 million used for letters of credit and the remainder available as borrowings. 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.

Previous wording

Pursuant to our common stock dividend policy described in Note 12 of Notes to Consolidated Financial Statementsin our 2023 Form 10-K, our Board of Directors declared and paid dividends on our common stock of $3.9 million and $3.8 million, in the first quarters of 2024 and 2023, respectively. 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.

Current wording

Pursuant to our common stock dividend policy described in Note 12 of Notes to Consolidated Financial Statementsin our consolidated financial statements and notes for the year ended December 31, 2023, our Board of Directors declared and paid dividends on our common stock of $4.0 million and $8.0 million during the three and six months ended June 30, 2024, respectively, and $3.8 million and $7.8 million for the three and six months ended June 30, 2023, respectively. 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.

Previous wording

Pursuant to our stock repurchase program described in Note 12 of Notes to Consolidated Financial Statements in our 2023 Form 10-K, 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. Whether or not we engage in repurchases from time to time may depend on a variety of factors, including not only price and cash resources, but customary black-out restrictions, whether we have any material inside information, limitations on share repurchases or cash usage that may be imposed by our credit agreement or in connection with issuances of securities, alternative uses for cash, applicable law, and other investment opportunities from time to time. As of March 31, 2024 and December 31, 2023, 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.

Current wording

Pursuant to our stock repurchase program described in Note 12 of Notes to Consolidated Financial Statements in our consolidated financial statements and notes for the year ended December 31, 2023, 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. Whether or not we engage in repurchases from time to time may depend on a variety of factors, including not only price and cash resources, but customary black-out restrictions, whether we have any material inside information, limitations on share repurchases or cash usage that may be imposed by our credit agreement or in connection with issuances of securities, alternative uses for cash, applicable law, and other investment opportunities from time to time. As of June 30, 2024 and December 31, 2023, 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.

Previous wording

As discussed in Note 6 of Notes to Condensed Consolidated Financial Statements (Unaudited) pursuant to an equity distribution agreement dated February 18, 2021, we may offer and sell up to 60 million shares of our common stock from time to time to or through sales agents in “at-the-market” offerings. 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 equity distribution agreement can be terminated by us at any time. Any sales of shares under that agreement are registered under the Securities Act of 1933, as amended, pursuant to a shelf registration statement on Form S-3. During the three months ended March 31, 2024, we sold 248,561 shares under the agreement for proceeds of $1.1 million, net of commissions and fees of $0.04 million.

Current wording

As discussed in Note 6 of Notes to Condensed Consolidated Financial Statements (Unaudited) pursuant to an equity distribution agreement dated February 18, 2021, we may offer and sell up to 60 million shares of our common stock from time to time to or through sales agents in “at-the-market” offerings. 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 equity distribution agreement can be terminated by us at any time. Any sales of shares under that agreement are registered under the Securities Act of 1933, as amended, pursuant to a shelf registration statement on Form S-3. During the six months ended June 30, 2024, we sold 248,561 shares under the agreement for proceeds of $1.1 million, net of commissions and fees of $0.04 million.

Previous wording

As a result of our current 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 under our New Credit Agreement, we believe we will be able to meet our obligations and other potential cash requirements during the next 12 months and beyond. Our obligations and other uses of cash may include, but are not limited to: debt service obligations related to the Senior Notes and IQ Notes; principal and interest payments under our Credit Agreement; care-and-maintenance; 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.

Current wording

As a result of our current 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 under our Credit Agreement, we believe we will be able to meet our obligations and other potential cash requirements during the next 12 months and beyond. Our obligations and other uses of cash may include, but are not limited to: debt service obligations related to the Senior Notes and IQ Notes; principal and interest payments under our Credit Agreement; care-and-maintenance; 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.

Previous wording

We currently estimate a range of approximately $190 to $210 million (before any lease financing) will be spent in 2024 on capital expenditures, primarily for equipment, infrastructure, and development at our mines, including $47.6 million already incurred as of March 31, 2024. We also estimate exploration and pre-development expenditures will total approximately $32.5 million in 2024, including $4.3 million already incurred as of March 31, 2024. Our expenditures for these items and our related plans for 2024 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.

Current wording

We currently estimate a range of approximately $196 to $218 million (before any lease financing) will be invested in 2024 on capital expenditures, primarily for equipment, infrastructure, and development at our mines, including $98.0 million already incurred as of June 30, 2024. We also estimate exploration and pre-development expenditures will total approximately $31.5 million in 2024, including $11.0 million already incurred as of June 30, 2024. Our expenditures for these items and our related plans for 2024 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.