Note 2 - Business Segments and Sales of Products

9 Months Ended

Sep. 30, 2024

Disclosure Text Block [Abstract]

Business Segments, Sales of Products

Note 2. Business Segments and Sales of Products

We discover, acquire and develop mines and other mineral interests and produce and market (i) concentrates containing silver, gold, lead, zinc and copper, (ii) carbon material containing silver and gold, and (iii) doré containing silver and gold. We are currently organized and managed in four segments: Greens Creek, Lucky Friday, Keno Hill and Casa Berardi.

Effective January 2024, we revised our internal reporting provided to our Chief Operating Decision Maker to no longer include any financial performance information for our Nevada Operations, reflecting the current status of the Nevada Operations being on care and maintenance. General corporate activities not associated with operating mines and their various exploration activities, idle properties and environmental remediation services in the Yukon, Canada, and the previously separately reported Nevada Operations are presented as “Other". The presentation of the prior period information disclosed below has been revised to reflect this change.

The following tables present information about our reportable segments sales for the three and nine months ended September 30, 2024 and 2023 (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Total sales to external customers:
Greens Creek	$	116,568		$	96,459		$	309,537		$	290,961
Lucky Friday		51,072			21,409			145,483			113,167
Keno Hill		19,809			16,001			59,606			17,582
Casa Berardi		50,308			46,912			150,515			134,856
Other		7,328			1,125			15,129			2,971
	$	245,085		$	181,906		$	680,270		$	559,537
Income (loss) from operations:
Greens Creek	$	37,916		$	31,169		$	100,321		$	92,824
Lucky Friday		12,552			(4,935	)		74,817			20,161
Keno Hill		(12,674	)		(7,462	)		(25,467	)		(24,145	)
Casa Berardi		3,403			(12,433	)		(24,309	)		(35,492	)
Other		(18,722	)		(18,980	)		(57,223	)		(55,625	)
	$	22,475		$	(12,641	)	$	68,139		$	(2,277	)
Reconciliation of income (loss) from operations to income (loss) before income and mining taxes:
Income (loss) from operations:	$	22,475		$	(12,641	)	$	68,139		$	(2,277	)
Adjustments all attributable to the Other segment
Interest expense		(10,901	)		(10,710	)		(36,050	)		(31,186	)
Fair value adjustments, net		3,654			(6,397	)		6,804			(5,774	)
Net foreign exchange (loss) gain		(3,246	)		4,176			3,409			434
Other income		1,229			1,657			3,921			4,425
Income (loss) before income and mining taxes	$	13,211		$	(23,915	)	$	46,223		$	(34,378	)

Other sales for the three and nine months ended September 30, 2024 and 2023 is comprised of revenue from our environmental remediation services subsidiary in the Yukon for both years presented and Nevada Operations metal sales in 2023. During the three and nine months ended September 30, 2024, Keno Hill sold $1.6 million and $3.0 million, respectively, of zinc concentrate to Greens Creek which is eliminated upon consolidation.

Lucky Friday's income from operations for the three and nine months ended September 30, 2024 includes $14.8 million and $50.0 million, respectively, of business interruption and property damage insurance proceeds received during the respective periods related to the fire which suspended Lucky Friday's operations from August 2023 through January 8, 2024. The insurance proceeds received are recorded as part of "Other operating (income) expense, net" in our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

During the three and nine month periods ended September 30, 2024, the Company wrote down $14.5 million of property, plant and mine development which had no salvage value. Of this amount, $13.9 million is included in Lucky Friday's income from operations and is related to the remote vein miner machine for which (i) we no longer had a use following the success of the Underhand Closed Bench ("UCB") mining method, (ii) we had been unsuccessful in locating a buyer, and (iii) the vendor advised us during the period that it would discontinue support for the program. The write down is recorded as part of "Write down of Property, Plant and Mine Development" in our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Sales by metal for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Silver	$	109,756		$	74,425		$	308,681		$	235,447
Gold		79,239			70,206			229,123			208,216
Lead		21,591			15,719			65,002			62,778
Zinc		37,281			33,066			94,741			91,912
Copper		409			—			409			—
Less: Smelter and refining charges		(10,518	)		(12,550	)		(32,814	)		(40,743	)
Total metal sales		237,758			180,866			665,142			557,610
Environmental remediation services		7,327			1,040			15,128			1,927
Total sales	$	245,085		$	181,906		$	680,270		$	559,537

Sales of metals for the three and nine months ended September 30, 2024 include a net gain of $0.6 million and net loss of $8.8 million, respectively, on financially-settled forward contracts for silver, gold, lead and zinc and for the three and nine months ended September 30, 2023 include net gains of $4.0 million and $13.1 million, respectively, on such contracts. See Note 8 for more information.

The following table presents total assets by reportable segment as of September 30, 2024 and December 31, 2023 (in thousands):

	September 30, 2024		December 31, 2023
Total assets:
Greens Creek	$	566,552	$	569,369
Lucky Friday		563,833		578,110
Keno Hill		401,587		362,986
Casa Berardi		666,259		683,035
Other		757,480		817,604
	$	2,955,711	$	3,011,104