HECLA MINING CO/DE/

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 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.

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, 2024, 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 this MD&A, all references to income or losses per share are on a diluted basis.

Previous wording

Produced 3.6 million ounces of silver, a 3% increase over the prior year's comparable quarter and 32,280 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 September 30, 2024 and 2023.

Current wording

Consistent Production- Progress at key operations delivering 4.1 million ounces of silver with increased silver production at Lucky Friday and Keno Hill offsetting decreases at Greens Creek. Produced 34,232 ounces of gold with expected decreases at Casa Berardi and Greens Creek. 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, 2025 and 2024.

Previous wording

Invested in our operations by making capital expenditures of approximately $55.7 million, including $11.5 million at Greens Creek, $11.2 million at Lucky Friday, $18.6 million at Casa Berardi and $14.4 million at Keno Hill.

Current wording

Investment in Operations - Made capital expenditures of approximately $54.1 million, including $10.8 million at Greens Creek, $15.4 million at Lucky Friday, $16.3 million at Casa Berardi and $10.4 million at Keno Hill.

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. We believe that the outlook for precious metals fundamentals in the medium- and long-term is favorable due to macro-economic factors such as lower 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 during the 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, lead and copper. World market prices for these commodities have fluctuated historically and are affected by numerous factors beyond our control. Although we have not been materially impacted to date, our financial results could in the future be materially impacted by the introduction of tariffs and other global restraints on trade. Historically our US operations have had significant sales into China and Canada, and each of those countries is or could be subject to tariffs, and each has or may retaliate in kind. Notwithstanding these recent developments, we believe that the outlook for precious metals fundamentals in the medium- and long-term is favorable due to macro-economic factors such as lower 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 Part II, Item 1A. “Risk Factors” of this Form 10-Q and Item 1A. “Risk Factors” contained in Part I of our annual report on Form 10-K for the year ended December 31, 2024 ("2024 Form 10-K"), for further discussion. Because we cannot control the price of our products, except to the extent we have entered into hedging transactions, 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 during the 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 and nine months ended September 30, 2024 and 2023 were as follows:

Current wording

Total sales for the three months ended March 31, 2025 and 2024 were as follows:

Previous wording

Total metal sales for the three and nine months ended September 30, 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 months ended March 31, 2025 and 2024, 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 and nine months ended September 30, 2024 compared to the same periods in 2023 were primarily due to the following two reasons:

Current wording

The fluctuation in sales for the three months ended March 31, 2025 compared to the same period in 2024 was primarily due to the following:

Previous wording

Higher average realized prices for precious metals and lower realized base metals prices during the three and nine months ended September 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:

Current wording

Higher average realized prices for all metals, except lead, during the three months ended March 31, 2025, compared to the same period in 2024. 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 $5.0 million and $19.5 million for the three and nine months ended September 30, 2024, respectively, and $8.1 million and $12.3 million for the three and nine months ended September 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.

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 $6.9 million and $3.5 million for the three months ended March 31, 2025 and 2024, respectively. The price adjustments related to silver, gold, zinc, lead and copper 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, zinc and copper. 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

Higher quantities of silver sold during the three and nine months ended September 30, 2024, compared to the same periods in 2023, primarily due to a full third quarter of Lucky Friday sales in 2024 compared to 2023 when production was suspended in August 2023 following a fire in the secondary egress that suspended operations for the remainder 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

The positive effect of higher metal prices was partially counterbalanced by lower sales volumes during the quarter compared to the comparable period in 2024. Gold sales decreased, though this decline was somewhat mitigated by increased sales volumes for silver and all base metals. The reduction in gold sold stemmed primarily from decreased production at both Greens Creek and Casa Berardi operations. However, this was partially counterbalanced by production growth at Lucky Friday and Keno Hill mines, which contributed to higher silver and base metal sales volumes. The Company's production mix shifted, with silver and base metals gaining greater prominence in the overall sales portfolio compared to the previous year's period. 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 and nine months ended September 30, 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 segments for the three months ended March 31, 2025 and 2024 were as follows (in thousands, except for Cash Cost and AISC):

Previous wording

For the three and nine months ended September 30, 2024, Other includes sales of $7.3 million and $15.1 million, respectively, and total cost of sales of $6.8 million and $14.3 million, for the three and nine months ended September 30, 2024, respectively, from our environmental remediation services in the Yukon. For the three and nine months ended September 30, 2023, Other includes sales of $1.1 million and $3.0 million for the three and nine months ended September 30, 2023, respectively, and cost of sales of $0.9 million and $2.7 million, respectively, for the three and nine months ended September 30, 2023, related to our environmental remediation services business and Nevada operations.

Current wording

For the three months ended March 31, 2025, Other includes sales and total cost of sales of $7.1 million from our environmental remediation services in the Yukon. For the three months ended March 31, 2024, Other includes sales of $4.4 million and total cost of sales of $3.9 million.

Previous wording

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

Current wording

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

Previous wording

We periodically review our revenues to ensure that reporting of primary products and by-products is appropriate. Because for Greens Creek, Lucky Friday and Keno Hill we consider zinc, lead, gold and copper 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 currently do not report Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for our Keno Hill operation as it is in the production ramp-up phase and has not met our definition of commercial production, and accordingly it is excluded from our consolidated Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce. We define an operation as being in commercial production upon achievement of the following criteria:

Current wording

By-product Credits, per Silver Ounce. We currently do not report Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for our Keno Hill operation as it is in the production ramp-up phase and has not met our definition of commercial production, and accordingly it is excluded from our consolidated Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce. We define an operation as being in commercial production upon achievement of the following criteria:

Previous wording

Demonstrated ability to mine and mill consistently and without significant interruption, defined as 75% of historical production levels or mill design capacity over a period of 30 days;

Current wording

Demonstrated ability to mine and mill consistently and without significant interruption, defined as 75% of historical production levels or mill design capacity over a period of 90 days (previously 30 days);

Previous wording

Determination of when these criteria have been met requires the use of judgment, and our definition of commercial production may differ from that of other mining companies.

Current wording

Currently we meet only one of the above criteria - silver recoveries are at expected steady state-state production levels. Determination of when these criteria have been met requires the use of judgment, and our definition of commercial production may differ from that of other mining companies.

Previous wording

We reported net income applicable to common stockholders of $1.6 million for the three months ended September 30, 2024, compared to a net loss applicable to common stockholders of $22.6 million in the comparable period in 2023. The following were the significant drivers of the change:

Current wording

We reported net income applicable to common stockholders of $28.7 million for the three months ended March 31, 2025, compared to a net loss applicable to common stockholders of $5.9 million in the comparable period in 2024. The following were the significant drivers of the change:

Previous wording

Consolidated gross profit increased by $25.8 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 $54.8 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

Ramp-up and suspension costs decreased by $7.3 million as the prior period included $12.0 million of suspension costs related to the temporary suspension of operations at Lucky Friday due to the underground fire, whereas the current period primarily contained costs related to Keno Hill's ramp-up activities and increased by $4.9 million over the comparable period in 2023.

Current wording

Ramp-up and suspension costs decreased by $11.2 million due to the current period containing no ramp-up costs for Keno Hill, as the site recorded gross profit, whereas in the prior period lower revenue led to a cost of sales transfer of $8.7 million to ramp-up and suspension costs. In addition, the prior period included $2.2 million of suspension costs related to the temporary suspension of operations at Lucky Friday due to the underground fire prior to the restart of operations on January 8, 2024.

Previous wording

Fair value adjustments, net increased by $10.1 million primarily due to $3.3 million in unrealized gains on our marketable equity securities portfolio in 2024 compared to an unrealized loss of $4.2 million in the comparable period in 2023 and an unrealized gain of $0.4 million on our undesignated derivative contracts compared to a $2.2 million unrealized loss when compared to the comparable period in 2023.

Current wording

Fair value adjustments, net increased by $5.5 million primarily due to $3.6 million in unrealized gains on our marketable equity securities portfolio in the current period. In addition, the prior period contained $1.9 million in losses on our undesignated derivative contracts.

Previous wording

Other operating income, net increased by $15.4 million primarily due to $14.8 million of insurance proceeds received during the quarter related to the Lucky Friday fire.

Current wording

Other operating expense (income), net increased by $18.0 million primarily due to the prior period containing $17.4 million of insurance proceeds received related to the Lucky Friday fire.

Previous wording

Net foreign exchange loss increased by $7.4 million to a loss of $3.2 million, compared to a gain of $4.2 million in the comparable period, reflecting the strengthening of the Canadian dollar against the US dollar in 2024, compared to a devaluation in the comparable period in 2023 , and related impact on the revaluation of our Canadian monetary assets and liabilities.

Current wording

Net foreign exchange loss increased by $4.3 million to a loss of $0.4 million, compared to a gain of $3.9 million in the comparable period. During the current period, exchange rates remained relatively stable, whereas the prior period saw a strengthening of the US dollar against Canadian dollar.

Previous wording

Income and mining tax expense increased by $13.0 million due to higher taxable income generated by our US tax group.

Current wording

Income and mining tax expense increased by $14.3 million due to higher taxable income generated by our US tax group.

Previous wording

The $8.0 million increase in gross profit for the nine months ended September 30, 2024, compared to the same period in 2023 was primarily due to higher realized sales prices for silver and gold, partially offset by lower metals sales volumes. Capital additions increased by $4.5 million in the same period primarily due to primary ore access development.

Current wording

The $21.1 million increase in gross profit for the three months ended March 31, 2025, compared to the same period in 2024 was primarily due to higher realized sales prices for silver, gold and zinc, partially offset by lower metals sales volumes. Capital additions in the current quarter were $1.9 million higher than the prior year period and included $3.1 million for primary ore access development, $1.4 million for mine development and $1.2 million for definition drilling.

Previous wording

For the three months ended September 30, 2024, the decrease in Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce was primarily due to an increase in by-product credits, benefiting from higher realized gold prices, partly offset by higher production costs and lower ounces produced.

Current wording

For the three months ended March 31, 2025, the decrease in Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce was primarily due to an increase in by-product credits, benefiting from higher realized gold and zinc prices, partly offset by higher production costs and lower ounces produced. AISC, After By-product Credits, per Silver Ounce also benefited from lower sustaining capital expenditures.

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 three months ended September 30, 2024, compared to the same period in 2023 was primarily due to higher production costs, partly offset by higher silver production in the current quarter as mining operations were suspended in August 2023. AISC, After By-product Credits, per Silver Ounce was also negatively impacted higher sustaining capital.

Current wording

The increase in Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for the three months ended March 31, 2025, compared to the same period in 2024 was primarily due to higher production costs, partly offset by higher silver production reflecting a full quarter's production compared to operations only commencing on January 9, 2024 following suspension in August 2023. AISC, After By-product Credits, per Silver Ounce was also negatively impacted by higher sustaining capital.

Previous wording

Since acquiring our Keno Hill operations as part of the acquisition of Alexco Resource Corp. ("Alexco") on September 7, 2022, we have focused on development activities, with initial operation of the mill beginning in the second quarter of 2023. The average throughput during the nine months ended September 30, 2024 was 314 tons per day, with silver grades milled of 25.6 ounces per ton. Since commencing production, mill throughput has generally increased as planned, leading to increased levels of production. However, we expect 2025 silver production to remain similar to 2024 as we focus on stakeholder engagement, permitting, infrastructure and capital projects, with production projected to increase again in 2026. The pause in silver production growth at Keno Hill is a direct result of the heap leach failure at Victoria Gold’s Eagle Mine in late June 2024. This failure had several immediate and ongoing impacts on our operations. The primary impact was the Company was forced to suspend milling operations at Keno Hill on August 27, 2024, due to delays in receiving an authorization to construct and a permit modification Keno Hill’s dry stack tailings storage facility (“DSTF”). The delayed authorization and permit were a result of the focus of the Yukon Government (“YG”) and the First Nation of Na-Cho Nyäk Dun (“FNNND”) on Eagle Mine incident response and not on routine permitting matters. Mill operations resumed on October 26, 2024 after receiving the authorization and modification and completing related design and construction work on the DSTF. A second impact of the Eagle Mine incident has been expression of strong positions by the FNNND on continuing and future mining activities at projects within their Traditional Territory, where Keno Hill is located, including a call to halt mining production. We are committed to responsible and sustainable mining that governments and local communities support. As such, the projected flat production levels at Keno Hill for 2025 should allow us to focus on stakeholder outreach and ensuring we have local support for increasing production levels by 2026. In 2025, the Company's environmental remediation services group is also expected to increase construction activities, adding incremental demand on Keno Hill's infrastructure and resources.

Current wording

A second and ongoing impact of the Eagle Mine incident was the expression of strong positions by the FNNND on continuing and future mining activities at projects within their Traditional Territory, where Keno Hill (and Eagle Mine) is located, including an initial call to halt mining production. The FNNND 's position has evolved since then to support environmentally responsible mining practices. We are committed to responsible and sustainable mining that governments and local communities support, including the FNNND, and this factors into to our evolving plans and projections for Keno Hill.

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, along with mining the 160 open pit, only the higher margin stopes of the west underground mine will be mined until they are exhausted, which is expected to occur in mid-2025, at which time most underground activity 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 in 2027. We forecast a gap in production commencing in 2027 and lasting until 2032 or later, when no ore is expected to be mined and no revenue is expected. During this hiatus, our focus is expected to be on investing in infrastructure and equipment, permitting and de-watering and stripping two expected new open pits, Principal and West Mine Crown Pillar. Upon conclusion of the hiatus and related permitting and construction, the mine is expected to generate significant free cash flow at current gold prices.

Current wording

Casa Berardi is advancing toward a more streamlined and efficient surface-only operation, with plans to focus exclusively on the 160 pit by mid-2025. This transition follows the successful extraction of higher-margin stopes from the west underground mine, positioning the Company for continued productivity and cost-effective mining. Our previously announced strategic review is ongoing and includes evaluating the following scenarios (i) an outright disposal, (ii) joint venturing the asset, (iii) spin-out of the asset, (iv) extending the underground mine, and (iv) accelerating future cash flows to capture part of the current record gold prices via a prepayment structure or other financing arrangement. If underground mining is not extended, 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 at the 160 open pit in 2027. We forecast a gap in production commencing in 2027 and lasting until 2032 or later, when no ore is expected to be mined and no revenue is expected. During this hiatus, our focus is expected to be on investing in infrastructure and equipment, permitting and de-watering and stripping two expected new open pits, Principal and West Mine Crown Pillar. Upon successful completion of permitting, design, and construction of the new open pits (which is not assured), we expect Casa Berardi to generate substantial free cash flow at current gold prices when production resumes. This long-term approach aligns with our commitment to maximizing the value of our assets through strategic mine planning and operational flexibility.

Previous wording

Gross profit increased by $13.9 million to $4.0 million for the three months ended September 30, 2024, compared to a gross loss of $9.9 million in the same period in 2023. The increase in gross profit is primarily related to higher realized prices, partly offset by lower gold ounces sold, and lower depreciation costs in the current quarter due to the west underground mine being fully depreciated during the first half of the year. Capital additions increased by $2.4 million during the quarter, compared to the same period in 2023, primarily related to a tailings dam raise.

Current wording

Gross profit increased by $22.0 million to $5.3 million for the three months ended March 31, 2025, compared to a gross loss of $16.7 million in the same period in 2024. The increase in gross profit is primarily related to higher realized prices, partly offset by lower gold ounces sold and higher contractor costs. The prior period gross loss also included higher depreciation expense related to accelerated depreciation of the west underground mine and a product inventory net realizable value write down of $5.1 million. Capital additions increased by $2.9 million to $16.3 million during the quarter, compared to the same period in 2024, and primarily related to a tailings dam raise.

Previous wording

Although Casa Berardi generated gross profit during the third quarter of 2024, it has generated gross losses during the previous eight quarters. This lack of profitability, the expected hiatus in future production discussed above, and the uncertainty surrounding permitting and timing of construction of the new open pits, has caused us to undertake a review of how Casa Berardi fits into the Company’s future strategy. While it is possible we may continue down the path towards future production at the Principal and West Mine Crown Pillar pits, we are also examining potential strategic alternatives.

Current wording

Although Casa Berardi generated gross profits during the last three quarters, it has generated gross losses for the prior three fiscal years and for seven of the last ten quarters. This lack of profitability, the expected hiatus in future production discussed above, the uncertainty surrounding permitting and pit design and construction, and the time involved to resolve these uncertainties, has caused us to undertake a review of how Casa Berardi fits into the Company's future strategy. While it is possible we may continue down the path towards future production at the Principal and West Mine Crown Pillar pits, we are also examining potential strategic alternatives.

Previous wording

The increase in Cash Cost After By-product Credits, per Gold Ounce, for the three months ended September 30, 2024, compared to the same period in 2023 was primarily due to lower gold production and higher production costs. Higher AISC, After By-product Credits, per Gold Ounce reflected lower gold production and higher sustaining capital over the comparable period in 2023.

Current wording

The increase in Cash Cost After By-product Credits, per Gold Ounce, and AISC, After By-product Credits, per Gold Ounce for the three months ended March 31, 2025, compared to the same period in 2024 was primarily due to lower gold production and higher production costs. AISC, After By-product Credits, per Gold Ounce benefited from lower sustaining capital over the comparable period in 2024.

Previous wording

During the three and nine months ended September 30, 2024, an income and mining tax provision of $11.5 million and $22.3 million, respectively, resulted in an effective tax rate of 86.7% and 48.3%, respectively. This compares to an income and mining tax benefit of $1.5 million and an income and mining tax provision of $6.9 million which resulted in an effective tax rate of 6.3% and -20.1%, for the three and nine months ended September 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 nine months ended September 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.

Current wording

During the three months ended March 31, 2025, an income and mining tax provision of $16.1 million resulted in an effective tax rate of 35.9%. This compares to an income and mining tax provision of $1.8 million which resulted in an effective tax rate of (46.1%), for the three months ended March 31, 2024. 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, 2025, compared to the comparable periods in 2024 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

Each reporting period we assess our deferred tax balances based on a review of long-range forecasts and quarterly activity. A valuation allowance is provided for deferred tax assets for which it is more likely than not the related tax benefits will not be realized. We analyze our deferred tax assets and, if it is determined that we will not realize all or a portion of our deferred tax assets, we record or increase a valuation allowance. Conversely, if it is determined we will ultimately more likely than not be able to realize all or a portion of the related benefits for which a valuation allowance has been provided, all or a portion of the related valuation allowance will be reduced. There are a number of factors that impact our ability to realize our deferred tax assets. Valuation allowances are provided on deferred tax assets in Nevada, Mexico, and certain Canadian jurisdictions. For additional information, please see risk factors Our accounting and other estimates may be imprecise and Our ability to recognize the benefits of deferred tax assets related to net operating loss carryforwards and other items is dependent on future cash flows and taxable incomein Item 1A - Risk Factors in our 2023 Form 10-K.

Current wording

Each reporting period we assess our deferred tax balances based on a review of long-range forecasts and quarterly activity. A valuation allowance is provided for deferred tax assets for which it is more likely than not the related tax benefits will not be realized. We analyze our deferred tax assets and, if it is determined that we will not realize all or a portion of our deferred tax assets, we record or increase a valuation allowance. Conversely, if it is determined we will ultimately more likely than not be able to realize all or a portion of the related benefits for which a valuation allowance has been provided, all or a portion of the related valuation allowance will be reduced. There are a number of factors that impact our ability to realize our deferred tax assets. Valuation allowances are provided on deferred tax assets in Nevada, Mexico, and certain Canadian jurisdictions. For additional information, please see risk factors Our accounting and other estimates may be imprecise and Our ability to recognize the benefits of deferred tax assets related to net operating loss carryforwards and other items is dependent on future cash flows generating taxable incomein Item 1A - Risk Factors in our 2024 Form 10-K.

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 and nine months ended September 30, 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 months ended March 31, 2025 and 2024.

Previous wording

Casa Berardi reports Cash Cost, After By-product Credits, per Gold Ounce and AISC, After By-product Credits, per Gold Ounce for the production of gold, their primary product, and by-product revenues earned from silver, which is a by-product at Casa Berardi. Only costs and ounces produced relating to units 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 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 and Lucky Friday, our combined silver properties. Similarly, the silver produced at our other three units is not included as a by-product credit when calculating the gold metrics for Casa Berardi.

Current wording

By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce. Thus, the gold produced at Casa Berardi 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 and Lucky Friday, our combined silver properties. Similarly, the silver produced at our other three units is not included as a by-product credit when calculating the gold metrics for Casa Berardi.

Previous wording

Other includes $6.8 million and $14.3 million of total cost of sales for the three and nine months ended September 30, 2024, respectively, related to our environmental remediation services business. For the three and nine months ended September 30, 2023, Other includes total cost of sales of $0.9 million and $2.7 million, respectively, related to our environmental remediation services business and Nevada operations.

Current wording

Other includes $7.1 million and $3.9 million of total cost of sales for the three months ended March 31, 2025, and 2024, respectively related to our environmental remediation services business.

Previous wording

At September 30, 2024, we had $22.3 million in cash and cash equivalents, of which $8.8 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 September 30, 2024, we had utilized $13.0 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.

Current wording

At March 31, 2025, we had $23.7 million in cash and cash equivalents, of which $3.1 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, 2025, we had $43.0 million drawn on our $225 million credit facility, and additional $6.6 million used for letters of credit, leaving $175 million for additional 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 consolidated financial statements and notes for the year ended December 31, 2023, our Board of Directors declared and paid dividends on our common stock and preferred of $8.7 million and $16.7 million during the three and nine months ended September 30, 2024, respectively, and $3.9 million and $11.8 million for the three and nine months ended September 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.

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, 2024, our Board of Directors declared and paid dividends on our common and preferred stock of $2.5 million and $3.9 million during the three months ended March 31, 2025 and 2024, respectively. Our common stock dividend policy anticipates paying an annual minimum dividend of $0.015 per share. Prior to the first quarter of 2025, our dividend policy previously had an additional silver-linked component which tied the amount of declared common stock dividends to our realized silver price for the preceding quarter.

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 September 30, 2024, we sold 9,090,726 shares under the agreement for proceeds of $57.3 million, net of commissions and fees of $0.9 million and during the nine months ended September 30, 2024, we sold 9,339,287 shares under the agreement for proceeds of $58.4 million, net of commissions and fees of $0.94 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, there are 36,156,316 remaining shares of our common stock that we may offer and sell from time to time 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, 2025, we did not sell any shares under the agreement.

Previous 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 $153.7 million already incurred as of September 30, 2024. We also estimate exploration and pre-development expenditures will total approximately $31.5 million in 2024, including $21.6 million already incurred as of September 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 (which requires compliance with certain financial and other covenants), and other factors. A sustained downturn in metals prices, significant increase in operational or capital costs or other uses of cash, poor results of our operating units, 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 $222 to $242 million (before any lease financing) will be invested in 2025 on capital expenditures, primarily for equipment, infrastructure, and development at our mines, including $54.1 million already incurred as of March 31, 2025. We also estimate exploration and pre-development expenditures will total approximately $28.0 million in 2025, including $4.5 million already incurred as of March 31, 2025. Our expenditures for these items and our related plans for 2025 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 (which requires compliance with certain financial and other covenants), and other factors. A sustained downturn in metals prices, significant increase in operational or capital costs or other uses of cash, poor results of our operating units, our inability to access the credit facility or the sources of liquidity discussed above, or other factors beyond our control could impact our plans.