HECLA MINING CO/DE/

Total sales for the three and nine months ended September 30, 2025 and 2024 were as follows:

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 passed through to the government for reimbursement with minimal margin generated by us in performing this work.

Total metal sales for the three and nine months ended September 30, 2025 and 2024, and the approximate variances attributed to differences in metals prices, sales volumes and smelter terms, were as follows:

The fluctuation in sales for the three and nine months ended September 30, 2025 compared to the same periods in 2024 was primarily due to the following:

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Higher average realized prices for precious metals for both periods compared to the same periods in 2024. Higher realized prices were partly offset by lower realized prices for lead during the nine months ended September 30, 2025. The table below summarizes average spot prices and our average realized prices for the commodities we sell:

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 $10.9 million and $5.0 million for the three months ended September 30, 2025 and 2024, and $22.0 million and $19.5 million for the nine months ended September 30, 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 and collars 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.

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Higher quantities of all metals sold, except zinc, during the three and nine months ended September 30, 2025 compared to the comparable 2024 periods, driven by higher production at operating sites. 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:

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

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 and nine months ended September 30, 2025 and 2024 were as follows (in thousands, except for Cash Cost and AISC):

(1)

A reconciliation of these non-GAAP measures to total cost of sales, the most comparable GAAP measure, can be found below in Reconciliation of Total Cost of Sales (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP).

(2)

The calculation of AISC for our consolidated silver properties includes corporate costs for general and administrative expense and sustaining capital.

(3)

For the three and nine months ended September 30, 2025, Other includes sales of $16.2 million and $29.9 million and total cost of sales of $16.2 million and $29.9 million respectively, from our environmental remediation services in the Yukon. For the three and nine months ended September 30, 2024, Other includes sales of $7.3 million and $15.1 million and total cost of sales of $6.8 million and $14.3 million, respectively.

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:

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silver has historically accounted for a higher proportion of revenue than any other metal and is expected to do so in the future;

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we have historically presented Greens Creek and Lucky Friday as primary silver producers, based on the original analysis that justified putting the project into production, and the same analysis applies to Keno Hill. Further we believe that consistency in disclosure is important to our investors regardless of the relationships of metals prices and production from year to year;

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metallurgical treatment maximizes silver recovery;

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the Greens Creek, Lucky Friday and Keno Hill deposits are massive sulfide deposits containing an unusually high proportion of silver; and

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in most of their working areas, Greens Creek, Lucky Friday and Keno Hill utilize selective mining methods in which silver is the metal targeted for highest recovery.

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

We periodically review our revenues to ensure that reporting of primary products and by-products is appropriate. Because for Greens Creek, 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. We define an operation as being in commercial production upon achievement of the following criteria:

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Completion of operational commissioning of each major mine and mill component;

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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;

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Silver recoveries are at or near expected steady-state production levels;

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All major capital expenditures have been completed; and

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A significant portion of available funding is directed towards operating activities.

Currently we meet only one of the above criteria - silver recoveries are at expected steady-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.

As Keno Hill has not yet been determined to be in commercial production, its costs and by-product credits are excluded from our consolidated Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce because (i) by definition it has not reached the sustaining stage and (ii) including its costs and by-product credits we believe would distort consolidated Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce of our operating silver mines that are in commercial production and operating as designed, and would not facilitate a meaningful comparison of our performance versus that of our peers who do not report such metrics for mines that are not in commercial production.

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

We reported net income applicable to common stockholders of $100.6 million for the three months ended September 30, 2025, compared to a net income applicable to common stockholders of $1.6 million in the comparable 2024 period. The following were the significant drivers of the change:

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Consolidated gross profit increased by $121.2 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 operation.

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Ramp-up and suspension costs decreased by $10.4 million primarily due to the current period containing no ramp-up costs for Keno Hill, as the site recorded gross profit, whereas in the prior period total cost of sales in excess of sales by $10.0 million were transferred to ramp-up and suspension costs.

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Fair value adjustments, net increased by $14.0 million primarily due to $25.3 million in unrealized gains on our marketable equity securities portfolio, partly offset by losses on undesignated derivative contracts of $7.6 million.

The positive movements mentioned above were partly offset by:

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General and administrative expenses increased by $3.5 million primarily due to higher incentive compensation driven by improved financial and operational performance, and strategic headcount increases.

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Interest expense increased by $2.5 million primarily due to the early partial redemption of Senior Notes, partly offset by lower interest expense on the revolving credit facility, having been fully repaid during August.

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Other operating expense (income), net increased by $3.2 million primarily due to a loss on disposal of one of our non-strategic exploration properties.

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Income and mining tax expense increased by $43.4 million due to higher taxable income generated by our US and Quebec operations.

We reported net income applicable to common stockholders of $186.9 million for the nine months ended September 30, 2025, compared to a net income applicable to common stockholders of $23.5 million in the comparable 2024 period. The following were the significant drivers of the change:

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Consolidated gross profit increased by $244.1 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.

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Ramp-up and suspension costs decreased by $23.0 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 total cost of sales in excess of sales by $20.4 million were transferred 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.

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Fair value adjustments, net increased by $24.1 million primarily due to $33.7 million in unrealized gains on our marketable equity securities portfolio and $2.9 million of losses on undesignated derivative contracts.

The positive movements mentioned above were partly offset by:

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Other operating expense (income), net increased by $38.0 million primarily due to the prior period containing $50.0 million of insurance proceeds received related to the Lucky Friday fire, partially offset by $14.5 million write down of property, plant and mine development in 2024.

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Net foreign exchange loss increased by $7.0 million, to a loss of $3.6 million compared to a gain of $3.4 million in the comparable period, driven by a weakening of the US dollar against the Canadian dollar during the current year.

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Income and mining tax expense increased by $81.2 million due to higher taxable income generated by our US and Quebec operations.

Greens Creek

(1)

A reconciliation of these non-GAAP measures to total cost of sales, the most comparable GAAP measure, can be found below in Reconciliation of Total Cost of Sales (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP).

The $53.4 million increase in gross profit for the three months ended September 30, 2025, compared to the same period in 2024 was primarily due to higher realized sales prices for silver and gold, in addition to higher sales volumes for all metals, except zinc.

Capital additions in the current quarter were $0.7 million higher compared to the same period in 2024. Current quarter costs included $2.9 million for mining equipment and related costs, $2.9 million for surface related equipment, $2.4 million for mine development and $2.3 million for primary ore access development.

Production of all metals increased during the three months ended September 30, 2025, compared to the same period in 2024, primarily due to a combination of higher tons milled and higher grades.

The $98.7 million increase in gross profit for the nine months ended September 30, 2025, compared to the same period in 2024, was primarily due to higher realized sales prices for silver, gold and zinc, except lead, and higher sales volumes for gold.

Capital additions during the year were $0.7 million lower compared to the same period in 2024 and included $9.8 million for mining and surface equipment, $8.3 million for primary ore access development, $5.8 million for mine development, $2.9 million for definition drilling and $1.6 million for a cleaner cell replacement.

During the nine months ended September 30, 2025, silver production increased compared to the same period in 2024 primarily due to higher grades and gold production increased by approximately 16% due to a combination of higher grades and recoveries.

The charts below illustrate the factors contributing to Cash Cost, After By-product Credits, per Silver Ounce for Greens Creek:

For the three months ended September 30, 2025, the decrease 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 2024 was primarily due to an increase in gold by-product credits, reflecting higher realized gold prices and gold production, in addition to higher silver production, partly offset by higher production costs primarily for materials and consumables.

For the nine months ended September 30, 2025, the decrease 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 2024 was primarily due to an increase in gold by-product credits, reflecting higher realized gold prices, in addition to higher silver production, partly offset by higher production costs primarily related to materials and consumables.

Lucky Friday

(1)

A reconciliation of these non-GAAP measures to total cost of sales, the most comparable GAAP measure, can be found below in Reconciliation of Total Cost of Sales (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP).

Gross profit increased by $17.8 million for the three months ended September 30, 2025 compared to the comparable period in 2024, reflecting a combination of higher sales volumes for silver and lead and realized prices for silver and zinc. However, the benefit of higher production and prices has been partly offset by higher costs, reflected in higher production costs per ton which have increased by 11%. The higher costs primarily relate to: (i) hourly employee profit sharing costs due to higher silver prices and production; (ii) property and liability insurance resulting from higher asset values and coverage limits; (iii) higher employee medical costs related to headcount growth and inflation in medical care costs; and (iv) consumables and repairs to support increased production.

Gross profit increased by $29.5 million for the nine months ended September 30, 2025 compared to the same period in 2024, reflecting a combination of higher sales volumes for all metals due to a full nine months of production in 2025, compared to 2024 when operations did not resume until January 9, 2024, following suspension of operations in August 2023, due to the underground fire in the secondary egress. Higher realized prices for silver and zinc also positively contributed to the higher gross profit. However, the benefit of higher production and prices has been partly offset by higher costs, reflected in higher production costs per ton which have increased by 8%. For the year, the higher costs relate to the factors stated above, in addition to: (i) an increase in mine hourly headcount to reduce reliance on more expensive contractors and support higher production; (ii) higher profit sharing attributable to increased profitability; (iii) higher equipment maintenance costs related to parts as the mine continued to execute our equipment maintenance standards while supporting increased tonnage; and (iv) higher waste rock removal haulage costs.

While certain cost elements will persist as the mine maintains steady and consistent production, we have identified potential cost mitigation plans. These plans include further reduction of contractors, mining method optimization to improve production efficiency and reduction of consumables usage, mine and mill infrastructure upgrades to increase production and reduce maintenance, and consolidation of sourcing of some high-volume consumables to improve pricing. However, there can be no assurance these efforts will be successful in reducing costs or offsetting the potential future impacts of inflation or other factors impacting profitability.

Capital additions increased by $5.7 million for the three months ended September 30, 2025, compared to the same period in 2024. Significant capital expenditures during the three months ended September 30, 2025, included tailings storage pond 5 construction of $6.7 million, capital development of $5.5 million, and bolter additions of $2.1 million and surface cooling project of $1.9 million.

Capital additions increased by $11.3 million for the nine months ended September 30, 2025 compared to the same period in 2024, and included $18.0 million for capital development, $8.3 million for tailings storage pond 5 construction, $8.2 million for the surface cooling project, $5.7 million for definition drilling, $3.6 million for bolter and jumbo additions, $2.7 million for a shaft renovation and $1.0 million for a haul truck replacement.

The charts below illustrate the factors contributing to Cash Cost, After By-product Credits, Per Silver Ounce for Lucky Friday:

Despite higher production costs for the three months ended September 30, 2025, Cash Cost, After By-product Credits, per Silver Ounce are comparable to the same period in 2024 primarily due to improved grades which drove higher silver production. However, AISC, After By-product Credits, per Silver Ounce for the three months ended September 30, 2025, increased compared to the same period in 2024 driven by higher sustaining capital expenditures related to capital development and pond 5 construction.

The increase in Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for the nine months ended September 30, 2025, compared to the same period in 2024 was primarily due to lower by-product credits and higher production costs, partly offset by higher silver production reflecting a full year's production compared to operations only commencing on January 9, 2024 due to the underground fire in the secondary egress in August 2023. AISC, After By-product Credits, per Silver Ounce was also negatively impacted by higher sustaining capital.

Keno Hill

(1)

Zinc tons sold include intersegment sales to Greens Creek.

We have not disclosed cost per ounce statistics for the Keno Hill operation as it is in the production ramp-up phase and has not met our definition of commercial production. See above"Consolidated Results of Operations" for our definition of commercial production. Determination of when those criteria have been met requires the use of judgment, and our definition of commercial production may differ from that of other mining companies.

We acquired our Keno Hill operation as part of the Alexco Resource Corp. acquisition in September 2022 and have focused on development activities and began ramp-up of the mill during the second quarter of 2023. The average mill throughput during the nine months ended September 30, 2025, was 307 tons per day (the mine is currently permitted to a maximum of an average of 440 tons per day), with silver grades milled of 30.0 ounces per ton. During the year, the mill has relied on existing ore stockpiles as the mine continues to focus on development and ramp up to higher tonnage rates with mining rates of 273 tons per day during the nine months ended September 30, 2025, with material sourced from both the Bermingham and Flame and Moth deposits. Mill throughput, while currently steady, has been negatively impacted by last year's events as described below.

During the three months ended September 30, 2025 and 2024, Keno Hill recorded sales of $47.6 million and $19.8 million, respectively, with the increase due to higher metals sales volumes and realized prices. As a result of higher revenues, Keno Hill generated gross profit of $16.4 million during the three months ended September 30, 2025, and did not transfer any total cost of sales to ramp-up and suspension costs. During the third quarter of 2024, total cost of sales in excess of sales of $10.0 million were reclassified to ramp-up and suspension costs in the Condensed Consolidated Statements of Operations and Comprehensive Income, (Unaudited). During the quarter, Keno Hill recorded capital additions of $14.7 million, primarily related to mine development, cemented tailings backfill plant and phase 2 of the dry stack tailings facility.

During the nine months ended September 30, 2025 and 2024, Keno Hill recorded sales of $90.6 million and $59.6 million, respectively, with the increase in sales attributable to higher realized sales prices and volumes sold. As a result of higher revenues, Keno Hill generated gross profit of $17.7 million during the nine months ended September 30, 2025, and did not transfer any total cost of sales to ramp-up and suspension costs. During the nine months ended September 30, 2024, total cost of sales in excess of sales of $20.4 million were reclassified to ramp-up and suspension costs in the Condensed Consolidated Statements of Operations and Comprehensive Income, (Unaudited). During the nine months ended September 30, 2025, Keno Hill recorded capital additions of $42.2 million, primarily related to mine development, Bermingham surface backfill plant and phase 2 of the dry stack tailings facility.

From commencement of production until late August, 2024, ore production and mill throughput generally increased as planned, leading to increased levels of production (though still not reaching the permitted capacity at the mill). However, starting in mid-2024 and continuing today, Keno Hill has been impacted by external events which have affected permitting, projects and production, and delayed our ability to reach sustained, profitable production. In late June 2024, an unrelated, third party, Victoria Gold, experienced a heap leach failure at its Eagle Mine which is located near Keno Hill. This incident had several immediate and ongoing impacts on our operations. The primary impact was that we were forced to suspend milling operations at Keno Hill between August 27 and October 26, 2024 due to delays in receiving authorizations and permits because the focus of the Yukon Government (“YG”) and the First Nation of Na-Cho Nyäk Dun (“FNNND”) was on the Eagle Mine incident response and not on routine permitting matters. Mill operations and design and construction projects resumed during the fourth quarter of 2024. Our original planned schedule for permitting and projects has been extended, but we are taking steps, including working with regulators, to establish a viable schedule for our operational plans.

An ongoing impact of the Eagle Mine incident is the FNNND's public position on mining, which has evolved from a call to halt all mining activity to support of environmentally responsible mining practices. We continue to strengthen our partnership with the FNNND - which is important because Keno Hill is within their Traditional Territory - through enhanced environmental stewardship and community engagement initiatives, building on their support for responsible mining practices.

Then, starting in late October 2024, Keno Hill began experiencing power curtailments when the utility, Yukon Energy, experienced a turbine failure at its Aishihik hydroelectric plant in Whitehorse. That failure and Yukon Energy’s resulting focus on line maintenance, combined with cold temperatures in the Yukon (and the resulting increase in demand for power), caused Yukon Energy to reduce power to Keno Hill, resulting in the operation’s inability to fully power the mine and mill on several occasions in late 2024 and for 8 days in the first quarter of 2025. Temporary power constraints in the Yukon region impacted approximately 130,000 ounces of silver production and labor costs for idled employees of approximately $0.5 million through September 30, 2025. These conditions improved subsequent to the first quarter of 2025 when we experienced no power disruptions by Yukon Energy, and we do not expect any further disruptions as the hydroelectric plant turbine was successfully repaired in the third quarter.

Permitting is one of the most important factors in our ability to reach sustainable, profitable production at Keno Hill. Increased production means a need for increased tailings storage, waste storage, water treatment and discharge, camp space and reliable power, all of which are typical requirements for mines in the expansion phase. These projects require new or modified permits, as well as the capital to implement them. Although we continue to make progress on these normal-course permitting matters, we have yet to make up for the delays described above. In addition, as we develop new zones for ore production at Keno Hill (and our other mines), we are frequently confronted with challenging conditions such as rock quality and ground water volumes. Currently, we are developing new headings at Keno Hill to supplement existing, or replace mined out headings. At some of these new headings, we are encountering more groundwater than expected. The mine's water license has limits on the amount of water that can be discharged from the mine. Although we currently are within permitted water discharge limits, if production from these new zones would cause water discharges greater than the license allows we will need to make alternative arrangements, which likely includes seeking an amendment to our current water license. There can be no assurances that the Yukon Water Board will grant such an amendment. If we are unable to amend our license in a timely manner and we confirm that continued mining in these new zones would lead to discharges in excess of license limits, our options would then include curtailing production to remain within existing permitted discharge limits and/or developing a different operational plan to reduce discharges. Although we consider it unlikely, if none of these potential solutions is achieved, it is possible we would consider pausing production and other mining activities at the impacted areas and reassess our permitting strategy and other future operational aspects of the mine. See the Risk Factor in our 2024 Form 10-K"We are required to obtain governmental permits and other approvals in order to conduct mining operations."

We also continue to face operational challenges such as work force availability, dilution, execution of projects, limited camp space, and the ramp-up of the Company's environmental remediation services group activities (which adds incremental demand on Keno Hill's infrastructure and resources, most notably camp space). As a result, we continue to project 2025 silver production to be comparable to 2024 levels. The projected flat production levels at Keno Hill for 2025 should allow us to focus on (i) permitting, (ii) stakeholder outreach and ensuring we have local support, (iii) projects such as tailings storage expansion and the construction of a cemented tails batch plant, (iv) mine development and (v) meeting the above-mentioned operational challenges.

As stated above, Keno Hill has generated profits at current throughput rates and prices. Our immediate focus is to advance permits and successfully execute infrastructure projects, with the goal of putting the mine on a path toward achieving its current permitted capacity of 440 tons per day which, at current prices, we project would generate positive free cash flow, while preserving expansion optionality beyond 440 tons per day. To reach 440 tons per day throughput, we would need to continue to mine ore from both the Bermingham deposit and the lower grade Flame & Moth deposit. Currently Keno Hill is not configured to sustainably produce 440 tons per day (although the mill has achieved that rate for multiple weeks on end during test run periods). Achieving 440 or higher tons per day would require targeted infrastructure investments, obtaining permits, executing projects, mine development and maintaining community support. If any one of these were not to occur, or if prices were to decrease from current prices, Keno Hill as currently configured would not be profitable, and placing the operation on care and maintenance would be an option. See Item 1A. Risk Factors - We may not realize all of the anticipated benefits from our acquisitions, including our 2022 acquisition of Alexco in our 2024 Form 10-K.

Casa Berardi

(1)

A reconciliation of these non-GAAP measures to total cost of sales, the most comparable GAAP measure, can be found below in Reconciliation of Total Cost of Sales (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP).

Since late 2024, as mining underground was nearing the end before transitioning to production coming only from the 160 open pit, we have been strategically reviewing Casa Berardi’s place in our suite of operating mines. This review has coincided with a significant increase in the price of gold and led to opportunities to revise our plans for Casa Berardi. As a result, we currently believe the most compelling option is to continue to operate the mine, while remaining open to other strategic alternatives. At current gold prices, we believe Casa Berardi is capable of continuing cost-effective production from the west underground mine, potentially into 2027. During the third quarter 2025, the Company came to the conclusion the best alternative was to continue to operate the mine, however we will continue to assess strategic alternatives which could include: (i) sale of the asset, (ii) joint venturing the asset, (iii) spin-out of the asset, (iv) continuing to extend the underground mine, (v) purchasing ore from other mines to process at Casa Berardi’s mill, and (vi) accelerating future cash flows to capture part of the current record gold prices through a prepayment structure or other financing arrangement. Even with the underground mining extended, Casa Berardi is expected to produce less gold than its historic production levels, with production expected to conclude at the 160 open pit in 2026, with production in 2027 coming from its stockpiles. Thereafter, the current plan is for Casa Berardi to transition to a new phase focused on developing the Principal and West Mine Crown Pillar open pits. Under this plan production would resume following successful permitting and development during a production gap projected to last between 2028 and 2033. 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.

Gross profit increased by $34.1 million to $38.1 million for the three months ended September 30, 2025, compared to a gross profit of $4.0 million in the comparable period in 2024. The increase in gross profit is primarily related to higher realized prices and gold ounces sold, partly offset by higher contractor costs. Capital additions decreased by $5.1 million to $13.5 million during the quarter, compared to the same period in 2024, and primarily related to tailings facility construction.

Gross profit increased by $99.1 million to $77.7 million for the nine months ended September 30, 2025, compared to a gross loss of $21.4 million in the comparable period in 2024. The increase in gross profit is primarily related to higher realized prices and gold ounces sold, partly offset by higher contractor costs. The prior period gross loss also included higher depreciation expense related to accelerated depreciation of the west underground mine and product inventory net realizable value write downs of $6.3 million.

Capital additions of $45.1 million during the year are in line with the prior year and primarily related to tailings facility construction.

Although Casa Berardi generated gross profits during the last four quarters and free cash flow during the last two quarters, it reported gross losses and outflows of cash during the prior three fiscal years. This lack of profitability and free cash flow generation, 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 as described above.

The charts below illustrate the factors contributing to Cash Cost, After By-product Credits, Per Gold Ounce for Casa Berardi:

The decrease in Cash Cost After By-product Credits, per Gold Ounce, and AISC, After By-product Credits, per Gold Ounce for the three months ended September 30, 2025, compared to the same period in 2024 was primarily due to higher gold production and lower production costs. AISC, After By-product Credits, per Gold Ounce benefited from lower sustaining capital over the comparable period in 2024.

The increase in Cash Cost After By-product Credits, per Gold Ounce for the nine months ended September 30, 2025, compared to the same period in 2024 was primarily due to higher production costs, partly offset by higher gold production. AISC, After By-product Credits, per Gold Ounce benefited from lower sustaining capital over the comparable period in 2024.

Corporate Matters

Income Taxes

During the three and nine months ended September 30, 2025, an income and mining tax provision of $54.9 million and $103.6 million, resulted in an effective tax rate of 35.3% and 35.6%, respectively. This compares to an income and mining tax provision of $11.5 million and $22.3 million, which resulted in an effective tax rate of 86.7% and 48.3%, respectively, for the three and nine months ended September 30, 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 and nine months ended September 30, 2025, compared to the comparable periods in 2024 is primarily related to the reported consolidated income 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.

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.

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

The tables below present reconciliations between the most comparable GAAP measure of 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, 2025 and 2024.

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

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

We have not disclosed cost per ounce statistics for the Keno Hill operation as it is in the production ramp-up phase and has not met our definition of commercial production. See above "Consolidated Results of Operations" for our definition of commercial production. Determination of when those criteria have been met requires the use of judgment, and our definition of commercial production may differ from that of other mining companies.

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

In addition to the uses described above, Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce provide management and investors an indication of operating cash flow, after consideration of the average price received from production. We also use these measurements for the comparative monitoring of performance of our mining operations period-to-period from a cash flow perspective. 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 ramp-up phase of 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.

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.

(1)

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

(2)

AISC, Before By-product Credits for our consolidated silver properties includes corporate costs for general and administrative expense and sustaining capital.

(3)

Lucky Friday operations were suspended in August 2023 following the underground fire in the #2 shaft secondary egress and resumed on January 9, 2024. The portion of cash costs, sustaining costs, by-product credits, and silver production incurred during the suspension period are 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.

(4)

Other includes $16.2 million and $29.9 million of total cost of sales for the three and nine months ended September 30, 2025, respectively related to our environmental remediation services business, and $6.8 million and $14.3 million of total cost of sales for the three and nine months ended September 30, 2024.

(5)

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.