Note 7 - Debt, Credit Agreement and Leases

9 Months Ended

Sep. 30, 2024

Disclosure Text Block [Abstract]

Debt, Credit Agreement and Leases

Note 7. Debt, Credit Agreement and Leases

Our debt as of September 30, 2024 and December 31, 2023 consisted of our 7.25% Senior Notes due February 15, 2028 (“Senior Notes”), our Series 2020-A Senior Notes due July 9, 2025 (the “IQ Notes”) and any drawn amounts on our $225 million Credit Agreement, which is described separately below. The following tables summarize our current and long-term debt balances, including principal amounts outstanding under the Credit Agreement, as of September 30, 2024 and December 31, 2023 (in thousands):

	September 30, 2024
	Senior Notes			IQ Notes		Credit Agreement		Total
Principal	$	475,000		$	35,735	$	13,000	$	523,735
Unamortized discount/premium and issuance costs		(3,044	)		139		—		(2,905	)
Long-term debt balance	$	471,956		$	—	$	13,000	$	484,956
Current debt balance	$	—		$	35,874		—	$	35,874

	December 31, 2023
	Senior Notes			IQ Notes		Credit Agreement		Total
Principal	$	475,000		$	36,473	$	128,000	$	639,473
Unamortized discount/premium and issuance costs		(3,730	)		257		—		(3,473	)
Long-term debt balance	$	471,270		$	36,730	$	128,000	$	636,000

The following table summarizes the scheduled annual future payments, including interest, for our Senior Notes, IQ Notes, and finance and operating leases as of September 30, 2024 (in thousands). Operating leases are included in other current and non-current liabilities on our condensed consolidated balance sheets. The amounts for the IQ Notes are stated in U.S. dollars (“USD”) based on the USD/Canadian dollar (“CAD”) exchange rate as of September 30, 2024.

Twelve-month period ending September 30,	Senior Notes		IQ Notes		Finance Leases			Operating Leases
2025	$	34,438	$	38,064	$	8,303		$	1,862
2026		34,438		—		6,474			1,298
2027		34,438		—		3,200			1,221
2028		487,914		—		1,172			1,150
2029		—		—		1,172			990
Thereafter		—		—		879			5,138
		591,228		38,064		21,200			11,659
Less: effect of discounting						(2,226	)		(2,948	)
Total	$	591,228	$	38,064	$	18,974		$	8,711

Credit Agreement

On July 21, 2022, we entered into a revolving credit agreement (the "Original Credit Agreement") with various financial institutions (the “Lenders”), Bank of Montreal and Bank of America, N.A. as letters of credit issuers, and Bank of America, N.A., as administrative agent for the Lenders and as swingline lender. The Original Credit Agreement was amended on May 3, 2024, when we entered into a First Amendment to Credit Agreement (the “First Amendment”), which made certain changes to the Original Credit Agreement (the Original Credit Agreement, as amended, modified and supplemented by the First Amendment, is referred to hereafter as the “Credit Agreement”). The First Amendment modified the Original Credit Agreement as follows:

•Increased the amount available for borrowing to $225 million from $150 million;

•Extended the maturity date to July 21, 2028 from July 21, 2026 (the maturity date of the Credit Agreement will be accelerated to August 15, 2027 if our Senior Notes are not refinanced by that date);

•National Bank, TD Securities, Bank of Nova Scotia and ING were added as new Lenders and Credit Suisse AG, New York Branch assigned its interests in the Original Credit Agreement to its affiliate UBS AG, Stamford Branch immediately prior to entering into the First Amendment.

Proceeds of the revolving loans under the Credit Agreement may be used for general corporate purposes. The interest rate on the outstanding loans under the Credit Agreement is based on the Company’s net leverage ratio and is calculated at (i) Term Secured Overnight Financing Rate ("SOFR") plus 2% to 3.5% or (ii) Bank of America’s Base Rate plus 1% to 2.5% with Base Rate being the

highest of (i) the Bank of America prime rate, (ii) the Federal Funds rate plus .50% or (iii) Term SOFR plus 1.00%. For each amount drawn, we elect whether we draw on a one, three or six month basis or annual basis for SOFR. If we elect to draw for greater than six months, we pay interest quarterly on the outstanding amount.

We are also required to pay a commitment fee of between 0.45% to 0.78750%, depending on our net leverage ratio. Letters of credit issued under the Credit Agreement bear a fee between 2.00% and 3.50% based on our net leverage ratio, as well as a fronting fee to each issuing bank at an agreed upon rate per annum on the average daily dollar amount of our letter of credit exposure.

Hecla Mining Company and certain of our subsidiaries are the borrowers under the Credit Agreement, while certain of our other subsidiaries are guarantors of the borrowers’ obligations under the Credit Agreement. As further security, the Credit Agreement is collateralized by a mortgage on the Greens Creek mine, the equity interests of subsidiaries that own the Greens Creek mine or are part of the Greens Creek Joint Venture and our subsidiary Hecla Admiralty Company (the “Greens Creek Group”), and by all of the Greens Creek Group’s rights and interests in the Greens Creek Joint Venture Agreement, and in all assets of the joint venture and of any member of the Greens Creek Group.

At September 30, 2024, we had net draws of $13.0 million outstanding at an interest rate of 7.8%, and $6.3 million of outstanding letters of credit under the Credit Agreement. Letters of credit that are outstanding reduce availability under the Credit Agreement.

We believe we were in compliance with all covenants under the Credit Agreement as of September 30, 2024.