Note 2 - Business Segments and Sales of Products

6 Months Ended

Jun. 30, 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 to income before income and mining taxes are not related to our reportable segments.

The tables below present information about our reportable segments for the three and six months ended June 30, 2025 and 2024 (in thousands):

Three months ended June 30, 2025	Greens Creek			Lucky Friday			Keno Hill			Casa Berardi		Other			Total
Metal sales	$	122,002		$	64,273		$	26,121		$	85,035	$	—		$	297,431
Environmental remediation services		—			—			—			—		6,596			6,596
Intersegment sales		—			—			1,201			—		—			1,201
Reconciliation of sales		122,002			64,273			27,322			85,035		6,596			305,228
Elimination of intersegment sales		—			—			(1,201	)		—		—			(1,201	)
Total consolidated sales																304,027
Cost of sales and other direct production costs
Salaries, wages and other benefits		18,281			14,559			7,209			12,164		138			52,351
Contractors		1,557			3,828			3,886			11,449		6,419			27,139
Materials and consumables		25,400			10,899			8,050			14,730		68			59,147
Product inventory change		(9,234	)		(476	)		1,968			65		—			(7,677	)
Other direct production costs		10,020			201			(373	)		6,536		—			16,384
Depreciation, depletion and amortization		12,897			13,275			5,141			5,846		—			37,159
Gross profit (loss)	$	63,081		$	21,987		$	240		$	34,245	$	(29	)	$	119,524
Other operating expenses (a)																25,768
Income from operations																93,756
Other Expense:
Interest expense																(11,099	)
Fair value adjustments, net																9,615
Foreign exchange loss, net																(3,517	)
Other income																1,511
Income before income and mining taxes															$	90,266
Capital additions	$	8,397		$	15,942		$	17,045		$	15,367	$	1,292		$	58,043

(a) 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.
 

Three months ended June 30, 2024	Greens Creek			Lucky Friday		Keno Hill			Casa Berardi			Other			Total
Metal sales	$	95,659		$	59,071	$	28,951		$	58,622		$	—		$	242,303
Environmental remediation services		—			—		—			—			3,354			3,354
Intersegment sales		—			—		1,140			—			—			1,140
Reconciliation of sales		95,659			59,071		30,091			58,622			3,354			246,797
Elimination of intersegment sales		—			—		(1,140	)		—			—			(1,140	)
Total consolidated sales																245,657
Cost of sales and other direct production costs
Salaries, wages and employee benefits		17,675			13,155		7,831			12,607			43			51,311
Contractors		1,782			3,156		5,971			6,827			3,173			20,909
Materials and consumables		20,465			8,735		7,239			14,900			339			51,678
Product inventory change		(2,904	)		219		1,107			550			—			(1,028	)
Other direct production costs		8,453			1,552		3,836			5,445			71			19,357
Transfer to ramp-up and suspension costs(a)		—			-		(1,763	)		—			—			(1,763	)
Depreciation, depletion and amortization		11,316			10,707		4,730			27,010			—			53,763
Gross profit (loss)	$	38,872		$	21,547	$	—		$	(8,717	)	$	(272	)	$	51,430
Other operating expenses (b)																10,830
Income from operations																40,600
Other Expense:
Interest expense																(12,505	)
Fair value adjustments, net																5,002
Foreign exchange gain, net																2,673
Other income																1,180
Income before income and mining taxes															$	36,950
Capital additions	$	11,704		$	10,818	$	14,533		$	12,376		$	989		$	50,420

(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.

Six months ended June 30, 2025	Greens Creek			Lucky Friday			Keno Hill			Casa Berardi			Other			Total
Metal sales	$	240,145		$	127,467		$	43,030		$	141,040		$	—		$	551,682
Environmental remediation services		—			—			—			—			13,684			13,684
Intersegment sales		—			—			2,187			—			—			2,187
Reconciliation of sales		240,145			127,467			45,217			141,040			13,684			567,553
Elimination of intersegment sales		—			—			(2,187	)		—			—			(2,187	)
Total consolidated sales																	565,366
Cost of sales and other direct production costs
Salaries, wages and other benefits		36,534			29,335			13,681			25,354			196			105,100
Contractors		2,462			7,691			7,437			22,114			13,350			53,054
Materials and consumables		51,065			22,322			14,044			29,301			174			116,906
Product inventory change		(8,333	)		706			(5,994	)		(3,196	)		—			(16,817	)
Other direct production costs		20,345			(419	)		4,641			13,484			—			38,051
Depreciation, depletion and amortization		26,486			26,700			7,943			14,415			—			75,544
Gross profit (loss)	$	111,586		$	41,132		$	1,278		$	39,568		$	(36	)	$	193,528
Other operating expenses (a)																	47,417
Income from operations																	146,111
Other Expense:
Interest expense																	(22,650	)
Fair value adjustments, net																	13,242
Foreign exchange loss, net																	(3,873	)
Other income																	2,453
Income before income and mining taxes																$	135,283
Capital additions	$	19,156		$	31,388		$	27,481		$	31,624		$	2,489		$	112,138

(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.

Six months ended June 30, 2024	Greens Creek			Lucky Friday			Keno Hill			Casa Berardi			Other		Total
Metal sales	$	192,969		$	94,411		$	39,797		$	100,207		$	—	$	427,384
Environmental remediation services		—			—			—			—			7,801		7,801
Intersegment sales		—			—			1,461			—			—		1,461
Reconciliation of sales		192,969			94,411			41,258			100,207			7,801		436,646
Elimination of intersegment sales		—			—			(1,461	)		—			—		(1,461	)
Total consolidated sales																435,185
Cost of sales and other direct production costs
Salaries, wages and employee benefits		34,982			24,737			14,567			25,351			110		99,747
Contractors		3,431			5,959			10,709			12,050			6,762		38,911
Materials and consumables		46,918			18,903			14,825			27,727			524		108,897
Product inventory change		(5,100	)		(1,882	)		(4,653	)		(1,189	)		—		(12,824	)
Other direct production costs		20,654			907			6,452			11,700			115		39,828
Transfer to ramp-up and suspension costs(a)		—			(2,200	)		(10,434	)		—			—		(12,634	)
Depreciation, depletion and amortization		25,759			18,619			8,331			49,961			—		102,670
Gross profit (loss)	$	66,325		$	29,368		$	—		$	(25,393	)	$	290	$	70,590
Other operating expenses (b)																24,926
Income from operations																45,664
Other Expense:
Interest expense																(25,149	)
Fair value adjustments, net																3,150
Foreign exchange gain, net																6,655
Other income																2,692
Income before income and mining taxes															$	33,012
Capital additions	$	20,531		$	25,806		$	24,879		$	25,692		$	1,101	$	98,009

(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 and six months ended June 30, 2025 and 2024 is solely comprised of revenue from our environmental remediation services subsidiary in the Yukon. Keno Hill sold $1.2 million and $2.2 million during the three and six months ended June 30, 2025, respectively, and $1.1 million and $1.5 million during the three and six months ended June 30, 2024, of precious metals concentrate to Greens Creek which is eliminated upon consolidation.

Lucky Friday's income from operations for the three and six months ended June 30, 2024 included $17.8 and $35.2 million, respectively, 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.

Sales by metal for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
Silver	$	122,661		$	112,692		$	240,814		$	198,925
Gold		123,721			82,469			210,909			149,884
Lead		21,476			23,928			43,582			43,411
Zinc		31,138			32,496			64,263			57,460
Copper		979			—			1,370			—
Less: Smelter and refining charges		(2,544	)		(9,282	)		(9,256	)		(22,296	)
Total metal sales		297,431			242,303			551,682			427,384
Environmental remediation services		6,596			3,354			13,684			7,801
Total sales	$	304,027		$	245,657		$	565,366		$	435,185

Sales of metals for the three and six months ended June 30, 2025 include net gains of $3.8 million and net losses of $1.3 million, respectively, on financially-settled forward contracts for silver, gold, lead and zinc and for the three and six months ended June 30, 2024 include net losses of $12.5 million and $9.4 million, respectively, on such contracts. See Note 8 for more information.

The following table presents total assets by reportable segment as of June 30, 2025 and December 31, 2024 (in thousands):

	June 30, 2025		December 31, 2024
Total assets:
Greens Creek	$	567,581	$	564,334
Lucky Friday		619,273		587,945
Keno Hill		426,580		413,982
Casa Berardi		701,178		687,080
Other		994,743		727,719
	$	3,309,355	$	2,981,060