Note 2 - Business Segments and Sales of Products

3 Months Ended

Mar. 31, 2025

Disclosure Text Block [Abstract]

Business Segments and 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.

The Company regularly reviews its segment reporting for alignment with its strategic goals and operational structure as well as for evaluation of business performance and the allocation of resources by Hecla's President and Chief Executive Officer, who has been identified as our Chief Operating Decision Maker ("CODM"). The CODM evaluates the performance for all of our reportable segments based on segment gross profit or loss. For all segments, the CODM uses segment gross profit or loss to assess segment performance and allocate resources for each segment predominantly in the annual budget and forecasting process. The CODM considers budget to actual variances on a monthly basis when making decisions about allocating capital and personnel to the segments. Significant segment expenses that are components of total cost of goods sold and drive the financial performance of our reportable segments are (i) salaries, wages and other benefits, (ii) contractors, (iii) consumables (iv) change in product inventory and (v) other direct production costs. In further evaluating the operational performance of each segment, the CODM also considers the amount of metals production versus budget, and the grade of the metal processed.

General corporate activities not associated with operating mines and their various exploration activities, as well as idle properties and environmental remediation services in the Yukon, Canada, are presented as “other.” The nature of the items that reconcile gross profit (loss) to income (loss) before income and mining taxes are not related to our reportable segments.

The tables below present information about our reportable segments for the three months ended March 31, 2025 and 2024 (in thousands):

Three months ended March 31, 2025	Greens Creek		Lucky Friday			Keno Hill			Casa Berardi			Other			Total
Metal sales	$	118,143	$	63,194		$	16,909		$	56,005		$	—		$	254,251
Environmental remediation services		—		—			—			—			7,088			7,088
Intersegment sales		—		—			986			—			—			986
Reconciliation of sales		118,143		63,194			17,895			56,005			7,088			262,325
Elimination of intersegment sales		—		—			(986	)		—			—			(986	)
Total consolidated sales																261,339
Cost of sales and other direct production costs
Salaries, wages and other benefits		18,253		14,776			6,472			13,190			58			52,749
Contractors		905		3,863			3,551			10,665			6,931			25,915
Materials and consumables		25,665		11,423			5,994			14,571			106			57,759
Product inventory change		901		1,182			(7,962	)		(3,261	)		—			(9,140	)
Other direct production costs		10,325		(620	)		5,014			6,948			—			21,667
Depreciation, depletion and amortization		13,589		13,425			2,802			8,569			—			38,385
Gross profit (loss)	$	48,505	$	19,145		$	1,038		$	5,323		$	(7	)	$	74,004
Other operating expenses (a)																21,649
Income from operations																52,355
Other Expense:
Interest expense																(11,551	)
Fair value adjustments, net																3,627
Foreign exchange loss, net																(356	)
Other income																942
Income before income and mining taxes															$	45,017
Capital additions	$	10,759	$	15,446		$	10,436		$	16,257		$	1,197		$	54,095

(a) Other operating expense items include general and administrative, exploration and pre-development, provision for closed operations and environmental matters, ramp-up and suspension costs and other operating (income) expense, net.

Three months ended March 31, 2024	Greens Creek			Lucky Friday			Keno Hill			Casa Berardi			Other		Total
Metal sales	$	97,310		$	35,340		$	10,846		$	41,585		$	—	$	185,081
Environmental remediation services		—			—			—			—			4,447		4,447
Intersegment sales		—			—			321			—			—		321
Reconciliation of sales		97,310			35,340			11,167			41,585			4,447		189,849
Elimination of intersegment sales		—			—			(321	)		—			—		(321	)
Total consolidated sales																189,528
Cost of sales and other direct production costs
Salaries, wages and employee benefits		17,307			11,582			6,736			12,744			67		48,436
Contractors		1,649			2,803			4,738			5,223			3,589		18,002
Materials and consumables		26,453			10,168			7,586			12,827			185		57,219
Product inventory change		(2,196	)		(2,101	)		(5,760	)		(1,739	)		—		(11,796	)
Other direct production costs		12,201			(645	)		2,616			6,255			44		20,471
Transfer to ramp-up and suspension costs(a)		—			(2,200	)		(8,671	)		—			—		(10,871	)
Depreciation, depletion and amortization		14,443			7,912			3,601			22,951			—		48,907
Gross profit (loss)	$	27,453		$	7,821		$	—		$	(16,676	)	$	562	$	19,160
Other operating expenses (b)																14,096
Income from operations																5,064
Other Expense:
Interest expense																(12,644	)
Fair value adjustments, net																(1,852	)
Foreign exchange gain, net																3,982
Other income																1,512
Loss before income and mining taxes															$	(3,938	)
Capital additions	$	8,827		$	14,988		$	10,346		$	13,316		$	112	$	47,589

(a) Total cost of sales in excess of sales value are transferred to ramp-up and suspension costs.

(b) Other operating expense items include general and administrative, exploration and pre-development, ramp-up and suspension costs, provision for closed operations and environmental matters, and other operating (income) expense, net.

Other sales for the three months ended March 31, 2025 and 2024 are comprised of revenue from our environmental remediation services subsidiary in the Yukon for both periods presented. During the three months ended March 31, 2025 and 2024, Keno Hill sold $1.0 million and $0.3 million, respectively, of zinc concentrate to Greens Creek which is eliminated upon consolidation.

Lucky Friday's income from operations for the three months ended March 31, 2024 included $17.4 million of business interruption and property damage insurance proceeds received during the respective period related to the fire which suspended Lucky Friday's operations from August 2023 through January 8, 2024. The insurance proceeds were recorded as part of "Other operating expense (income), net" in our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Sales by metal for the three months ended March 31, 2025 and 2024 were as follows (in thousands):

	Three Months Ended March 31,
	2025			2024
Silver	$	118,153		$	86,233
Gold		87,188			67,415
Lead		22,106			19,483
Zinc		33,125			24,964
Copper		391			—
Less: Smelter and refining charges		(6,712	)		(13,014	)
Total metal sales		254,251			185,081
Environmental remediation services		7,088			4,447
Total sales	$	261,339		$	189,528

Sales of metals for the three months ended March 31, 2025 include a net loss of $5.1 million on financially-settled forward contracts for silver, gold, lead and zinc and for the three months ended March 31, 2024 include net gains of $3.1 million on such contracts. See Note 8 for more information.

The following table presents total assets by reportable segment as of March 31, 2025 and December 31, 2024 (in thousands):

	March 31, 2025		December 31, 2024
Total assets:
Greens Creek	$	576,744	$	564,334
Lucky Friday		598,453		587,945
Keno Hill		429,660		413,982
Casa Berardi		695,463		687,080
Other		723,237		727,719
	$	3,023,557	$	2,981,060