Note 2 - Business Segments and Sales of Products

9 Months Ended

Sep. 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 nine months ended September 30, 2025 and 2024 (in thousands):

Three months ended September 30, 2025	Greens Creek		Lucky Friday			Keno Hill			Casa Berardi		Other		Total
Metal sales	$	178,064	$	74,192		$	47,551		$	93,544	$	—	$	393,351
Environmental remediation services		—		—			—			—		16,191		16,191
Intersegment sales		—		—			1,928			—		—		1,928
Reconciliation of sales		178,064		74,192			49,479			93,544		16,191		411,470
Elimination of intersegment sales		—		—			(1,928	)		—		—		(1,928	)
Total consolidated sales														409,542
Cost of sales and other direct production costs
Salaries, wages and other benefits		19,392		16,586			7,377			12,988		177		56,520
Contractors		2,951		3,669			3,781			7,241		15,665		33,307
Materials and consumables		27,430		11,398			5,913			13,444		337		58,522
Product inventory change		5,106		(1,127	)		8,057			4,293		—		16,329
Other direct production costs		10,550		644			(1,985	)		6,560		4		15,773
Depreciation, depletion and amortization		16,229		13,471			8,028			10,896		—		48,624
Gross profit	$	96,406	$	29,551		$	16,380		$	38,122	$	8	$	180,467
Other operating expenses (a)														31,822
Income from operations														148,645
Other Expense:
Interest expense														(13,405	)
Fair value adjustments, net														17,625
Foreign exchange gain, net														305
Other income														2,433
Income before income and mining taxes													$	155,603
Capital additions	$	12,179	$	16,865		$	14,747		$	13,480	$	634	$	57,905

(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 September 30, 2024	Greens Creek		Lucky Friday			Keno Hill			Casa Berardi			Other		Total
Metal sales	$	116,568	$	51,072		$	19,809		$	50,308		$	—	$	237,757
Environmental remediation services		—		—			—			—			7,328		7,328
Intersegment sales		—		—			1,495			—			—		1,495
Reconciliation of sales		116,568		51,072			21,304			50,308			7,328		246,580
Elimination of intersegment sales		—		—			(1,495	)		—			—		(1,495	)
Total consolidated sales															245,085
Cost of sales and other direct production costs
Salaries, wages and employee benefits		18,098		14,218			7,567			12,485			51		52,419
Contractors		1,423		3,988			6,540			4,127			6,645		22,723
Materials and consumables		21,101		10,411			6,472			10,846			55		48,885
Product inventory change		8,125		(126	)		(293	)		(2,176	)		—		5,530
Other direct production costs		10,901		120			5,285			8,901			78		25,285
Transfer to ramp-up and suspension costs(a)		—		(7	)		(9,980	)		—			—		(9,987	)
Depreciation, depletion and amortization		13,948		10,681			4,218			12,097			—		40,944
Gross profit	$	42,972	$	11,787		$	—		$	4,028		$	499	$	59,286
Other operating expenses (b)															36,811
Income from operations															22,475
Other Expense:
Interest expense															(10,901	)
Fair value adjustments, net															3,654
Foreign exchange loss, net															(3,246	)
Other income															1,229
Income before income and mining taxes														$	13,211
Capital additions	$	11,466	$	11,178		$	14,406		$	18,606		$	43	$	55,699

(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.

Nine months ended September 30, 2025	Greens Creek			Lucky Friday			Keno Hill			Casa Berardi		Other			Total
Metal sales	$	418,209		$	201,659		$	90,581		$	234,584	$	—		$	945,033
Environmental remediation services		—			—			—			—		29,875			29,875
Intersegment sales		—			—			4,115			—		—			4,115
Reconciliation of sales		418,209			201,659			94,696			234,584		29,875			979,023
Elimination of intersegment sales		—			—			(4,115	)		—		—			(4,115	)
Total consolidated sales																974,908
Cost of sales and other direct production costs
Salaries, wages and other benefits		55,926			45,921			21,058			38,342		373			161,620
Contractors		5,413			11,360			11,218			29,355		29,015			86,361
Materials and consumables		78,495			33,720			19,957			42,745		511			175,428
Product inventory change		(3,227	)		(421	)		2,063			1,097		—			(488	)
Other direct production costs		30,895			225			2,656			20,044		4			53,824
Depreciation, depletion and amortization		42,715			40,171			15,971			25,311		—			124,168
Gross profit (loss)	$	207,992		$	70,683		$	17,658		$	77,690	$	(28	)	$	373,995
Other operating expenses (a)																79,239
Income from operations																294,756
Other Expense:
Interest expense																(36,055	)
Fair value adjustments, net																30,867
Foreign exchange loss, net																(3,568	)
Other income																4,886
Income before income and mining taxes															$	290,886
Capital additions	$	31,335		$	48,253		$	42,228		$	45,104	$	3,123		$	170,043

(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.

Nine months ended September 30, 2024	Greens Creek		Lucky Friday			Keno Hill			Casa Berardi			Other		Total
Metal sales	$	309,537	$	145,483		$	59,606		$	150,515		$	—	$	665,141
Environmental remediation services		—		—			—			—		$	15,129		15,129
Intersegment sales		—		—			2,956			—			—		2,956
Reconciliation of sales		309,537		145,483			62,562			150,515			15,129		683,226
Elimination of intersegment sales		—		—			(2,956	)		—			—		(2,956	)
Total consolidated sales															680,270
Cost of sales and other direct production costs
Salaries, wages and employee benefits		53,080		38,955			22,134			37,836			161		152,166
Contractors		4,854		9,947			17,249			16,177			13,407		61,634
Materials and consumables		68,019		29,314			21,297			38,573			579		157,782
Product inventory change		3,025		(2,008	)		(4,946	)		(3,365	)		—		(7,294	)
Other direct production costs		31,555		1,027			11,737			20,601			193		65,113
Transfer to ramp-up and suspension costs(a)		—		(2,207	)		(20,414	)		—			—		(22,621	)
Depreciation, depletion and amortization		39,707		29,300			12,549			62,058			—		143,614
Gross profit (loss)	$	109,297	$	41,155		$	—		$	(21,365	)	$	789	$	129,876
Other operating expenses (b)															61,737
Income from operations															68,139
Other Expense:
Interest expense															(36,050	)
Fair value adjustments, net															6,804
Foreign exchange gain, net															3,409
Other income															3,921
Income before income and mining taxes														$	46,223
Capital additions	$	31,997	$	36,984		$	39,285		$	44,298		$	1,144	$	153,708

(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, write down of property, plant and equipment and other operating (income) expense, net.

Other sales for the three and nine months ended September 30, 2025 and 2024 is solely comprised of revenue from our environmental remediation services subsidiary in the Yukon. During the three and nine months ended September 30, 2025, Keno Hill sold $1.9 million (2024: $1.5 million) and $4.1 million (2024: $3.0 million) of precious metals concentrate to Greens Creek which is eliminated upon consolidation.

For the three and nine months ended September 30, 2024, recorded within other operating (income) expense, net in our Condensed Consolidated Statements of Operations and Comprehensive Income are $14.8 and $50.0 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. Also recorded within other operating (income) expense, net, the Company wrote down $14.5 million of property, plant and mine development which had no salvage value, of which $13.9 million related to Lucky Friday's remote vein miner machine.

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Silver	$	190,050		$	109,756		$	430,864		$	308,681
Gold		144,017			79,239			354,926			229,123
Lead		24,379			21,591			67,961			65,002
Zinc		37,422			37,281			101,685			94,741
Copper		880			409			2,250			409
Less: Smelter and refining charges		(3,397	)		(10,519	)		(12,653	)		(32,815	)
Total metal sales		393,351			237,757			945,033			665,141
Environmental remediation services		16,191			7,328			29,875			15,129
Total sales	$	409,542		$	245,085		$	974,908		$	680,270

Sales of metals for the three and nine months ended September 30, 2025 include net losses of $8.5 million (2024: $0.6 million net gain) and $9.8 million (2024: $8.8 million net loss), respectively, on financially-settled forward contracts for silver, gold, lead and zinc on such contracts. See Note 8 for more information.

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

	September 30, 2025		December 31, 2024
Total assets:
Greens Creek	$	580,967	$	564,334
Lucky Friday		641,202		587,945
Keno Hill		447,999		413,982
Casa Berardi		712,177		687,080
Other		839,497		727,719
	$	3,221,842	$	2,981,060