10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X]           QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2018

Commission file number 1-8491

HECLA MINING COMPANY

(Exact name of registrant as specified in its charter)

	Delaware	77-0664171
	(State or other jurisdiction of	(I.R.S. Employer
	incorporation or organization)	Identification No.)
	6500 Mineral Drive, Suite 200
	Coeur d'Alene, Idaho	83815-9408
	(Address of principal executive offices)	(Zip Code)
208-769-4100
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes XX .    No      .

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes XX .    No___.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act (check one):

Large Accelerated Filer   XX.                                                                                          Accelerated Filer     .

Non-Accelerated Filer      .                  Smaller Reporting Company     .

Emerging growth company     .

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     .

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes      .    No XX.

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Shares Outstanding August 7, 2018
Common stock, par value $0.25 per share	477,012,806

Hecla Mining Company and Subsidiaries

Form 10-Q

For the Quarter Ended June 30, 2018

INDEX*

		Page
PART I - Financial Information
	Item 1 – Condensed Consolidated Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets - June 30, 2018 and December 31, 2017	3
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - Three Months Ended and Six Months Ended – June 30, 2018 and 2017	4
	Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 2018 and 2017	5
	Notes to Condensed Consolidated Financial Statements	6
	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	33
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	61
	Item 4. Controls and Procedures	64
PART II - Other Information
	Item 1 – Legal Proceedings	64
	Item 1A – Risk Factors	64
	Item 4 – Mine Safety Disclosures	66
	Item 6 – Exhibits	66
	Signatures	67
	Exhibits	68
*Items 2, 3 and 5 of Part II are omitted as they are not applicable.

2

Part I - Financial Information

Item 1. Financial Statements

Hecla Mining Company and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(In thousands, except shares)

	June 30, 2018			December 31, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	239,722		$	186,107
Investments		5,556			33,758
Accounts receivable:
Trade		9,717			14,805
Taxes		10,382			10,382
Other, net		8,925			7,003
Inventories:
Concentrates, doré, and stockpiled ore		35,169			28,455
Materials and supplies		25,885			26,100
Other current assets		17,006			13,715
Total current assets		352,362			320,325
Non-current investments		7,449			7,561
Non-current restricted cash and investments		1,005			1,032
Properties, plants, equipment and mineral interests, net		2,006,592			2,020,021
Non-current deferred income taxes		1,179			1,509
Other non-current assets and deferred charges		24,007			14,509
Total assets	$	2,392,594		$	2,364,957
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities	$	53,835		$	46,549
Accrued payroll and related benefits		23,661			31,259
Accrued taxes		6,143			5,919
Current portion of capital leases		6,015			5,608
Accrued interest		5,976			5,745
Other current liabilities		1,388			10,371
Current portion of accrued reclamation and closure costs		8,315			6,679
Total current liabilities		105,333			112,130
Capital leases		8,757			6,193
Accrued reclamation and closure costs		78,102			79,366
Long-term debt		533,230			502,229
Non-current deferred tax liability		112,462			121,546
Non-current pension liability		48,973			46,628
Other non-current liabilities		4,438			12,983
Total liabilities		891,295			881,075
Commitments and contingencies (Notes 2, 4, 7, 9, and 11)
SHAREHOLDERS’ EQUITY
Preferred stock, 5,000,000 shares authorized:
Series B preferred stock, $0.25 par value, 157,816 shares issued and outstanding, liquidation preference — $7,891		39			39
Common stock, $0.25 par value, authorized 750,000,000 shares; issued and outstanding 2018 — 401,322,377 shares and 2017 — 399,176,425 shares		101,643			100,926
Capital surplus		1,628,440			1,619,816
Accumulated deficit		(176,158	)		(195,484	)
Accumulated other comprehensive loss		(31,929	)		(23,373	)
Less treasury stock, at cost; 2018 — 5,226,791 shares and 2017 — 4,529,450 shares issued and held in treasury		(20,736	)		(18,042	)
Total shareholders’ equity		1,501,299			1,483,882
Total liabilities and shareholders’ equity	$	2,392,594		$	2,364,957

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

3

Hecla Mining Company and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)

(Dollars and shares in thousands, except for per-share amounts)

	Three Months Ended						Six Months Ended
	June 30, 2018			June 30, 2017			June 30, 2018			June 30, 2017
Sales of products	$	147,259		$	134,279		$	286,968		$	276,823
Cost of sales and other direct production costs		80,440			77,503			153,309			156,179
Depreciation, depletion and amortization		31,817			25,569			59,871			54,521
Total cost of sales		112,257			103,072			213,180			210,700
Gross profit		35,002			31,207			73,788			66,123
Other operating expenses:
General and administrative		9,787			10,309			17,522			19,515
Exploration		7,838			5,853			15,198			10,367
Pre-development		1,415			1,052			2,420			2,304
Research and development		2,337			312			3,773			995
Other operating expense		638			699			1,153			1,362
Provision for closed operations and environmental matters		1,420			985			2,682			2,104
Lucky Friday suspension-related costs		6,801			8,024			11,818			9,605
Acquisition costs		1,010			(2	)		3,517			25
Total other operating expenses		31,246			27,232			58,083			46,277
Income from operations		3,756			3,975			15,705			19,846
Other income (expense):
Loss on disposition of investments		—			—			—			(167	)
Unrealized (loss) gain on investments		(564	)		(276	)		(254	)		51
Gain (loss) on derivative contracts		16,804			2,487			20,811			(5,322	)
Net foreign exchange gain (loss)		2,476			(3,883	)		5,068			(6,145	)
Interest income and other income and expense		108			319			52			644
Interest expense, net of amount capitalized		(10,079	)		(10,543	)		(19,873	)		(19,065	)
Total other income (expense)		8,745			(11,896	)		5,804			(30,004	)
Income (loss) before income taxes		12,501			(7,921	)		21,509			(10,158	)
Income tax (provision) benefit		(427	)		(16,095	)		(1,195	)		12,976
Net income (loss)		12,074			(24,016	)		20,314			2,818
Preferred stock dividends		(138	)		(138	)		(276	)		(276	)
Income (loss) applicable to common shareholders	$	11,936		$	(24,154	)	$	20,038		$	2,542
Comprehensive income (loss):
Net income (loss)	$	12,074		$	(24,016	)	$	20,314		$	2,818
Unrealized loss and amortization of prior service on pension plans		—			(16	)		—			16
Change in fair value of derivative contracts designated as hedge transactions		(5,203	)		2,047			(7,276	)		5,308
Reclassification of loss on disposition or impairment of marketable securities included in net (loss) income		—			—			—			167
Unrealized holding (losses) gains on investments		41			847			10			591
Comprehensive income (loss)	$	6,912		$	(21,138	)	$	13,048		$	8,900
Basic income (loss) per common share after preferred dividends	$	0.03		$	(0.06	)	$	0.05		$	0.01
Diluted income (loss) per common share after preferred dividends	$	0.03		$	(0.06	)	$	0.05		$	0.01
Weighted average number of common shares outstanding - basic		400,619			396,178			399,972			395,774
Weighted average number of common shares outstanding - diluted		403,610			396,178			402,873			399,236
Cash dividends declared per common share	$	0.0025		$	0.0025		$	0.0050		$	0.0050

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

4

Hecla Mining Company and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

	Six Months Ended
	June 30, 2018			June 30, 2017
Operating activities:
Net income	$	20,314		$	2,818
Non-cash elements included in net income:
Depreciation, depletion and amortization		62,852			56,908
Loss on investments		254			117
Gain on disposition of properties, plants, equipment, and mineral interests		(166	)		(94	)
Provision for reclamation and closure costs		2,640			2,247
Stock compensation		2,441			2,831
Deferred income taxes		(2,977	)		(22,113	)
Amortization of loan origination fees		898			967
(Gain) loss on derivative contracts		(30,236	)		5,386
Foreign exchange (gain) loss		(5,348	)		5,201
Other non-cash items, net		(35	)		2
Change in assets and liabilities:
Accounts receivable		2,471			(1,150	)
Inventories		(6,865	)		1,594
Other current and non-current assets		(2,507	)		3,896
Accounts payable and accrued liabilities		8,701			(10,937	)
Accrued payroll and related benefits		(337	)		(4,901	)
Accrued taxes		(672	)		4,408
Accrued reclamation and closure costs and other non-current liabilities		(4,410	)		(1,359	)
Cash provided by operating activities		47,018			45,821
Investing activities:
Additions to properties, plants, equipment and mineral interests		(43,304	)		(45,964	)
Proceeds from disposition of properties, plants and equipment		463			142
Purchases of investments		(31,682	)		(23,280	)
Maturities of investments		59,336			14,356
Net cash used in investing activities		(15,187	)		(54,746	)
Financing activities:
Proceeds from sale of common stock, net of offering costs		—			9,610
Acquisition of treasury shares		(2,694	)		(2,474	)
Dividends paid to common shareholders		(2,000	)		(1,981	)
Dividends paid to preferred shareholders		(276	)		(276	)
Credit availability and debt issuance fees paid		(3	)		(91	)
Issuance of debt		31,024			—
Repayments of debt		—			(470	)
Repayments of capital leases		(3,762	)		(3,245	)
Net cash provided by financing activities		22,289			1,073
Effect of exchange rates on cash		(532	)		1,086
Net increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents		53,588			(6,766	)
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period		187,139			171,977
Cash, cash equivalents and restricted cash and cash equivalents at end of period	$	240,727		$	165,211
Significant non-cash investing and financing activities:
Addition of capital lease obligations	$	7,008		$	4,645
Payment of accrued compensation in stock	$	4,863		$	4,240

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

5

Note 1.    Basis of Preparation of Financial Statements

In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements and notes to the unaudited interim condensed consolidated financial statements contain all adjustments, consisting of normal recurring items and items which are nonrecurring, necessary to present fairly, in all material respects, the financial position of Hecla Mining Company and its consolidated subsidiaries ("Hecla" or "the Company" or “we” or “our” or “us”).  These unaudited interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and related footnotes as set forth in our annual report filed on Form 10-K for the year ended December 31, 2017, as it may be amended from time to time.

The results of operations for the periods presented may not be indicative of those which may be expected for a full year.  The unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures are adequate for the information not to be misleading.

Certain condensed consolidated financial statement amounts for the prior period have been reclassified to conform to the current period presentation. These reclassifications had no effect on the net income, comprehensive income, or accumulated deficit as previously reported.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements, the reported amounts of revenues and expenses during the reporting period and the disclosures of contingent liabilities.  Accordingly, ultimate results could differ materially from those estimates.     

Note 2.    Investments

Our current investments, which are classified as "available for sale" and consist of bonds having maturities of greater than 90 days, had a fair value and cost basis of $5.6 million and $33.8 million, respectively, at June 30, 2018 and December 31, 2017. During the first six months of 2018 and 2017, we had purchases of such investments of $31.2 million and $23.3 million, respectively, and maturities of $59.3 million and $14.4 million, respectively. Our current investments at June 30, 2018 and December 31, 2017 consisted of the following (in thousands):

	June 30, 2018							December 31, 2017
	Amortized cost		Unrealized loss			Fair value		Amortized cost		Unrealized loss			Fair value
Corporate bonds	$	5,559	$	(3	)	$	5,556	$	33,778	$	(20	)	$	33,758

At June 30, 2018 and December 31, 2017, the fair value of our non-current investments was $7.4 million and $7.6 million, respectively.  Our non-current investments consist of marketable equity securities which are carried at fair value, and are primarily classified as “available-for-sale.”  The cost basis of our non-current investments was approximately $6.0 million and $5.7 million at June 30, 2018 and December 31, 2017, respectively. During the six months ended June 30, 2018, we recognized $0.3 million in net unrealized losses in current earnings. During the six months ended June 30, 2017, we recognized $0.6 million in net unrealized gains on equity investments in other comprehensive income and $0.1 million in net unrealized gains in current earnings.

6

Note 3.   Income Taxes

Major components of our income tax provision (benefit) for the three and six months ended June 30, 2018 and 2017 are as follows (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Current:
Domestic	$	1		$	—		$	1		$	(12,798	)
Foreign		2,965			15,935			4,171			21,451
Total current income tax provision (benefit)		2,966			15,935			4,172			8,653
Deferred:
Domestic		—			2,965			—			(15,939	)
Foreign		(2,539	)		(2,805	)		(2,977	)		(5,690	)
Total deferred income tax provision (benefit)		(2,539	)		160			(2,977	)		(21,629	)
Total income tax provision (benefit)	$	427		$	16,095		$	1,195		$	(12,976	)

The current income tax provisions for the three and six months ended June 30, 2018 and 2017 vary from the amounts that would have resulted from applying the statutory income tax rate to pre-tax income due primarily to the full valuation allowance in the U.S. in 2018, the impact of taxation in foreign jurisdictions and the impact of the change in accounting method treatment of the #4 Shaft development costs in 2017.

As of June 30, 2018, we have a net deferred tax liability in the U.S. of $0.3 million, a net deferred tax liability in Canada of $112.5 million, and a net deferred tax asset in Mexico of $1.5 million, for a consolidated worldwide net deferred tax liability of $111.3 million. We recorded a full valuation allowance in the U.S. in December 2017 as a result of U.S. tax reform. Our circumstances at June 30, 2018 continue to support a full valuation allowance in the U.S. where our domestic tax provision is zero. In the first quarter of 2017, we received consent from the Internal Revenue Service to permit us to take a different income tax position relating to the timing of deductions for the #4 Shaft development costs at Lucky Friday. This tax accounting method change substantially revised the timing of deductions for these costs for regular tax and Alternative Minimum Tax ("AMT") relative to our projected life of mine and projected taxable income. These timing changes caused us to revise our assessment of the ability to generate sufficient future taxable income to realize our deferred tax assets, resulting in a valuation allowance release of approximately $15 million. At June 30, 2018 and December 31, 2017, the balance of the valuation allowances on our deferred tax assets was $79.4 million and $78.7 million, respectively.

Note 4.    Commitments, Contingencies and Obligations

General

We follow GAAP guidance in determining our accruals and disclosures with respect to loss contingencies, and evaluate such accruals and contingencies for each reporting period. Accordingly, estimated losses from loss contingencies are accrued by a charge to income when information available prior to issuance of the financial statements indicates that it is probable that a liability could be incurred and the amount of the loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. If a loss contingency is not probable or reasonably estimable, disclosure of the loss contingency is made in the financial statements when it is at least reasonably possible that a material loss could be incurred.

7

Rio Grande Silver Guaranty

Our wholly-owned subsidiary, Rio Grande Silver Inc. (“Rio”), is party to a joint venture with Emerald Mining & Leasing, LLC (“EML”) and certain other parties with respect to a land package in the Creede Mining District of Colorado that is adjacent to other land held by Rio. Rio holds a 70% interest in the joint venture. In connection with the joint venture, we are required to guarantee certain environmental remediation-related obligations of EML to a third party up to a maximum liability to us of $2.5 million. As of June 30, 2018, we have not been required to make any payments pursuant to the guaranty. We may be required to make payments in the future, limited to the $2.5 million maximum liability, should EML fail to meet its obligations to the third party. However, to the extent that any payments are made by us under the guaranty, EML, in addition to other parties, has jointly and severally agreed to reimburse and indemnify us for any such payments. We have not recorded a liability relating to the guaranty as of June 30, 2018.

Lucky Friday Water Permit Matters

In the past, the Lucky Friday unit experienced multiple regulatory issues relating to its water discharge permits and water management more generally. All of these issues have been resolved except for one: in December 2013, the EPA issued to Hecla Limited a request for information under Section 308 of the Clean Water Act directing Hecla Limited to undertake a comprehensive groundwater investigation of Lucky Friday’s tailings pond no. 3 to evaluate whether the pond is causing the discharge of pollutants via seepage to groundwater that is discharging to surface water. We completed the investigation mandated by the EPA and submitted a draft report to the agency in December 2015. We are waiting for the EPA’s response and we cannot predict what the impact of the investigation will be.

Hecla Limited strives to maintain its water discharges at the Lucky Friday unit in full compliance with its permits and applicable laws; however, we cannot provide assurance that in the future it will be able to fully comply with the permit limits and other regulatory requirements regarding water management.

Johnny M Mine Area near San Mateo, McKinley County, New Mexico

In May 2011, the EPA made a formal request to Hecla Mining Company for information regarding the Johnny M Mine Area near San Mateo, McKinley County, New Mexico, and asserted that Hecla Mining Company may be responsible under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") for environmental remediation and past costs the EPA has incurred at the site. Mining at the Johnny M was conducted for a limited period of time by a predecessor of our subsidiary, Hecla Limited. In August 2012, Hecla Limited and the EPA entered into a Settlement Agreement and Administrative Order on Consent for Removal Action (“Consent Order”), pursuant to which Hecla Limited agreed to pay (i) $1.1 million to the EPA for its past response costs at the site and (ii) any future response costs at the site under the Consent Order, in exchange for a covenant not to sue by the EPA. Hecla Limited paid the $1.1 million to the EPA for its past response costs and in December 2014, submitted to EPA the Engineering Evaluation and Cost Analysis (“EE/CA”) for the site. The EE/CA evaluates three alternative response actions: 1) no action, 2) off-site disposal, and 3) on-site disposal. The range in estimated costs of these alternatives is $0 to $221 million. In the EE/CA, Hecla Limited recommended that EPA approve on-site disposal, which is currently estimated to cost $5.6 million, on the basis that it is the most appropriate response action under CERCLA. In June 2015, the EPA approved the EE/CA, with a few minor conditions. The EPA still needs to publish the EE/CA for public notice and comment, and the agency will not make a final decision on the appropriate response action until the public comment process is complete. It is anticipated that Hecla Limited will implement the response action selected by the EPA pursuant to an amendment to the Consent Order or a new order. Based on the foregoing, we believe it is probable that Hecla Limited will incur a liability for remediation at the site. In the fourth quarter of 2014, we accrued $5.6 million, which continues to be our best estimate of that liability as of the date of this report. There can be no assurance that Hecla Limited’s liability will not be more than $5.6 million, or that its ultimate liability will not have a material adverse effect on Hecla Limited’s or our results of operations or financial position.

8

The Johnny M Mine is in an area known as the San Mateo Creek Basin (“SMCB”), which is an approximately 321 square mile area in New Mexico that contains numerous legacy uranium mines and mills. The EPA is considering listing the entire SMCB on CERCLA’s National Priorities List in order to address perceived groundwater issues within the SMCB. The EE/CA discussed above relates primarily to contaminated rock and soil, not groundwater. In the event that the SMCB is listed as a Superfund site, or for other reasons, it is possible that Hecla Limited’s liability at the Johnny M Site, as well as any other sites within the SMCB at which predecessor companies of Hecla Limited may have been involved, will be greater than our current accrual of $5.6 million due to the increased scope of required remediation.

In July 2018, the EPA informed Hecla Limited that it believes Hecla Limited, among several other potentially responsible parties ("PRPs"), may be liable for cleanup of the site or for costs incurred by the EPA in cleaning up the site. The EPA stated in the letter that it has incurred approximately $9.6 million in response costs. Hecla Limited cannot with reasonable certainty estimate the amount or range of liability, if any, relating to this matter because of, among other reasons, the lack of information concerning the site, including the relative contributions, if any, of contamination by the various PRPs.

Carpenter Snow Creek and Barker-Hughesville Sites in Montana

In July 2010, the EPA made a formal request to Hecla Mining Company for information regarding the Carpenter Snow Creek Superfund site located in Cascade County, Montana. The Carpenter Snow Creek site is located in a historic mining district, and in the early 1980s Hecla Limited leased 6 mining claims and performed limited exploration activities at the site. Hecla Limited terminated the mining lease in 1988.

In June 2011, the EPA informed Hecla Limited that it believes Hecla Limited, among several other viable companies, may be liable for cleanup of the site or for costs incurred by the EPA in cleaning up the site. The EPA stated in the letter that it has incurred approximately $4.5 million in response costs and estimated that total remediation costs may exceed $100 million. Hecla Limited cannot with reasonable certainty estimate the amount or range of liability, if any, relating to this matter because of, among other reasons, the lack of information concerning the site.

In February 2017, the EPA made a formal request to Hecla Mining Company for information regarding the Barker-Hughesville Mining District Superfund site located in Judith Basin and Cascade Counties, Montana. Hecla Limited submitted a response in April 2017. The Barker-Hughesville site is located in a historic mining district, and between approximately June and December 1983, Hecla Limited was party to an agreement with another mining company under which limited exploration activities occurred at or near the site.

In August 2018, the EPA informed Hecla Limited that it believes Hecla Limited, among several other PRPs, may be liable for cleanup of the site or for costs incurred by the EPA in cleaning up the site. The EPA did not include an amount of its alleged response costs to date.  Hecla Limited cannot with reasonable certainty estimate the amount or range of liability, if any, relating to this matter because of, among other reasons, the lack of information concerning past or anticipated future costs at the site, and the relative contributions, if any, of contamination by the various PRPs.

Debt

On April 12, 2013, we completed an offering of $500 million aggregate principal amount of 6.875% Senior Notes due 2021 ("Senior Notes"). The net proceeds from the offering of the Senior Notes were used to partially fund the acquisition of Aurizon Mines Ltd. ("Aurizon") and for general corporate purposes, including expenses related to the Aurizon acquisition. Through the acquisition of Aurizon, we acquired our Casa Berardi mine and other interests in Quebec, Canada. In 2014, we completed additional issuances of our Senior Notes in the aggregate principal amount of $6.5 million, which were contributed to one of our pension plans to satisfy the funding requirement for 2014. Interest on the Senior Notes is payable on May 1 and November 1 of each year, commencing November 1, 2013.

On March 5, 2018, we entered into a note purchase agreement pursuant to which we issued CAD$40 million (approximately USD$30.8 million at the time of the transaction) in aggregate principal amount of our Series 2018-A Senior Notes due May 1, 2021 (the “Notes”) to Ressources Québec, a subsidiary of Investissment Québec, a financing arm of the Québec government. The Notes were issued at a discount of 0.58%, and bear interest at a rate of 4.68% per year, payable on May 1 and November 1 of each year, commencing May 1, 2018. The Notes are senior and unsecured and are pari passu in all material respects with the Senior Notes, including with respect to guarantees of the Notes by certain of our subsidiaries. The net proceeds from the Notes are required to be used for development and expansion of our Casa Berardi mine.

9

See Note 9 and Note 13 for more information.

Other Commitments

Our contractual obligations as of June 30, 2018 included approximately $4.1 million for various costs. In addition, our open purchase orders at June 30, 2018 included approximately $0.7 million, $2.1 million and $7.4 million for various capital and non-capital items at the Lucky Friday, Casa Berardi and Greens Creek units, respectively. We also have total commitments of approximately $15.8 million relating to scheduled payments on capital leases, including interest, primarily for equipment at our Greens Creek, Lucky Friday and Casa Berardi units (see Note 9 for more information). As part of our ongoing business and operations, we are required to provide surety bonds, bank letters of credit, and restricted deposits for various purposes, including financial support for environmental reclamation obligations and workers compensation programs. As of June 30, 2018, we had surety bonds totaling $117.0 million in place as financial support for future reclamation and closure costs, self-insurance, and employee benefit plans. The obligations associated with these instruments are generally related to performance requirements that we address through ongoing operations. As the requirements are met, the beneficiary of the associated instruments cancels or returns the instrument to the issuing entity. Certain of these instruments are associated with operating sites with long-lived assets and will remain outstanding until closure of the sites. We believe we are in compliance with all applicable bonding requirements and will be able to satisfy future bonding requirements as they arise.

Other Contingencies

We also have certain other contingencies resulting from litigation, claims, EPA investigations, and other commitments and are subject to a variety of environmental and safety laws and regulations incident to the ordinary course of business. We currently have no basis to conclude that any or all of such contingencies will materially affect our financial position, results of operations or cash flows. However, in the future, there may be changes to these contingencies, or additional contingencies may occur, any of which might result in an accrual or a change in current accruals recorded by us, and there can be no assurance that their ultimate disposition will not have a material adverse effect on our financial position, results of operations or cash flows.

Note 5.    Earnings (Loss) Per Common Share

We are authorized to issue 750,000,000 shares of common stock, $0.25 par value per share. At June 30, 2018, there were 406,549,168 shares of our common stock issued and 5,226,791 shares issued and held in treasury, for a net of 401,322,377 shares outstanding.

Diluted income (loss) per share for the three and six months ended June 30, 2018 and 2017 excludes the potential effects of outstanding shares of our convertible preferred stock, as their conversion would have no effect on the calculation of dilutive shares.

For the three-month and six-month periods ended June 30, 2018, the calculation of diluted income per share included dilutive (i) restricted stock units that were unvested or which vested in the current period of 1,268,601 and 1,179,086, respectively, and (ii) deferred shares of 1,721,932 for each period. For the three-month period ended June 30, 2017, all restricted share units and deferred shares were excluded from the computation of diluted loss per share, as our reported loss for that period would cause them to have no effect on the calculation of loss per share. For the six-month period ended June 30, 2017, dilutive restricted stock units that were unvested or which vested in the current period of 2,109,789 and deferred shares of 1,352,470 were included in the calculation of diluted income per share.

Note 6.    Business Segments and Sales of Products

We discover, acquire, develop, produce, and market concentrates and doré containing silver, gold, lead and zinc. We are currently organized and managed in four segments, which represent our operating units: the Greens Creek unit, the Lucky Friday unit, the Casa Berardi unit, and the San Sebastian unit.

10

General corporate activities not associated with operating units and their various exploration activities, as well as discontinued operations and idle properties, are presented as “other.”  Interest expense, interest income and income taxes are considered general corporate items, and are not allocated to our segments.

The following tables present information about reportable segments for the three and six months ended June 30, 2018 and 2017 (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Net sales to unaffiliated customers:
Greens Creek	$	74,605		$	71,339		$	140,455		$	130,189
Lucky Friday		3,287			(187	)		8,264			19,823
Casa Berardi		56,103			43,822			111,651			85,534
San Sebastian		13,264			19,305			26,598			41,277
	$	147,259		$	134,279		$	286,968		$	276,823
Income (loss) from operations:
Greens Creek	$	25,516		$	15,418		$	48,668		$	29,532
Lucky Friday		(5,261	)		(8,212	)		(9,407	)		(4,332	)
Casa Berardi		1,014			(1,708	)		4,264			(3,953	)
San Sebastian		(361	)		11,892			4,656			25,346
Other		(17,152	)		(13,415	)		(32,476	)		(26,747	)
	$	3,756		$	3,975		$	15,705		$	19,846

The following table presents identifiable assets by reportable segment as of June 30, 2018 and December 31, 2017 (in thousands):

	June 30, 2018		December 31, 2017
Identifiable assets:
Greens Creek	$	678,862	$	671,960
Lucky Friday		429,213		432,400
Casa Berardi		792,891		804,505
San Sebastian		68,812		62,198
Other		424,016		393,894
	$	2,393,794	$	2,364,957

Our products consist of both metal concentrates, which we sell to custom smelters and brokers, and unrefined bullion bars (doré), which may be sold as doré or further refined before sale to precious metals traders. Revenue is recognized upon the completion of the performance obligations and transfer of control of the product to the customer.

For sales of metals from refined doré, the performance obligation is met and revenue is recognized at the time of transfer of control of the agreed-upon metal quantities to the customer by the refiner. For sales of doré, the performance obligation is met, the transaction price is known, and revenue is recognized at the time of transfer of title and control of the doré containing the agreed-upon metal quantities to the customer. Refining, selling and shipping costs related to sales of doré and metals from doré are recorded to cost of sales as incurred.

11

For concentrate sales, which we currently have at our Greens Creek and Lucky Friday units, the performance obligation is met, the transaction price can be reasonably estimated, and revenue is recognized generally at the time of shipment. Concentrates sold at our Lucky Friday unit typically leave the mine and are received by the customer within the same day. However, there is a period of time between shipment of concentrates from our Greens Creek unit and their physical receipt by the customer, and judgment is required in determining when control has been transferred to the customer for those shipments. We have determined the performance obligation is met and title is transferred to the customer upon shipment of concentrate parcels from Greens Creek because, at that time, 1) legal title is transferred to the customer, 2) the customer has accepted the parcel and obtained the ability to realize all of the benefits from the product, 3) the concentrate content specifications are known, have been communicated to the customer, and the customer has the significant risks and rewards of ownership of it, 4) it is very unlikely a concentrate parcel from Greens Creek will be rejected by a customer upon physical receipt, and 5) we have the right to payment for the parcel.

Judgment is also required in identifying the performance obligations for our concentrate sales. Most of our concentrate sales involve “frame contracts” with smelters that can cover multiple years and specify certain terms under which individual parcels of concentrates are sold. However, some terms are not specified in the frame contracts and/or can be renegotiated as part of annual amendments to the frame contract. We have determined parcel shipments represent individual performance obligations satisfied at a point in time when control of the shipment is transferred to the customer.

The consideration we receive for our concentrate sales fluctuates due to changes in metals prices between the time of shipment and their final settlement. However, we are able to reasonably estimate the transaction price for the concentrate sales at the time of shipment using forward prices for the month of settlement, and previously recorded sales and accounts receivable are adjusted to estimated settlement metals prices until final settlement with the customer. Also, it is unlikely a significant reversal of revenue for any one concentrate parcel will occur. As such, we use the expected value method to price the parcels until the final settlement date occurs, at which time the final transaction price is known. At June 30, 2018, metals contained in concentrates and exposed to future price changes totaled 1.2 million ounces of silver, 5,842 ounces of gold, 11,696 tons of zinc, and 2,792 tons of lead.  However, as discussed in Note 11, we seek to mitigate the risk of negative price adjustments by using financially-settled forward contracts for some of our sales.

Sales and accounts receivable for concentrate shipments are recorded net of charges for treatment, refining, smelting losses, and other charges negotiated by us with the customers, which represent components of the transaction price. Charges are estimated by us upon shipment of concentrates based on contractual terms, and actual charges typically do not vary materially from our estimates. Costs charged by customers include fixed treatment and refining costs per ton of concentrate and may include price escalators which allow the customers to participate in the increase of lead and zinc prices above a negotiated baseline. Costs for shipping concentrates to customers are recorded to cost of sales as incurred.

Sales of metal concentrates and metal products are made principally to custom smelters, brokers and metals traders. The percentage of sales contributed by each segment is reflected in the following table:

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Greens Creek		51	%		53	%		49	%		47	%
Lucky Friday		2	%		—	%		3	%		7	%
Casa Berardi		38	%		33	%		39	%		31	%
San Sebastian		9	%		14	%		9	%		15	%
		100	%		100	%		100	%		100	%

12

Sales of products by metal for the three- and six-month periods ended June 30, 2018 and 2017 were as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Silver	$	38,425		$	46,077		$	73,647		$	97,434
Gold		77,635			66,975			150,679			129,676
Lead		10,690			8,101			19,917			21,720
Zinc		27,614			20,500			57,723			50,365
Less: Smelter and refining charges		(7,105	)		(7,374	)		(14,998	)		(22,372	)
	$	147,259		$	134,279		$	286,968		$	276,823

The following is sales information by geographic area based on the location of smelters and brokers (for concentrate shipments) and location of parent companies (for doré sales to metals traders) for the three- and six-month periods ended June 30, 2018 and 2017 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Canada	$	94,524	$	83,215	$	183,192	$	183,434
Korea		41,537		18,972		74,240		47,943
Japan		3,897		11,804		17,670		24,094
China		198		15,401		67		15,352
United States		4,407		4,080		8,488		9,285
Total, excluding gains/losses on forward contracts	$	144,563	$	133,472	$	283,657	$	280,108

Sales by significant product type for the three- and six-month periods ended June 30, 2018 and 2017 were as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Doré and metals from doré	$	75,526	$	67,533	$	149,018	$	136,513
Lead concentrate		42,149		44,087		76,483		93,004
Zinc concentrate		22,579		16,344		48,231		40,562
Bulk concentrate		4,309		5,508		9,925		10,029
Total, excluding gains/losses on forward contracts	$	144,563	$	133,472	$	283,657	$	280,108

Sales of products for the three- and six-month periods ended June 30, 2018 included net gains of $2.7 million and $3.3 million, respectively, on financially-settled forward contracts for silver, gold, lead and zinc contained in our concentrate sales. Sales of products for the three- and six-month periods ended June 30, 2017 included net gains of $0.8 million and net losses of $3.2 million, respectively, on the forward contracts. See Note 11 for more information.

13

Sales of products to significant customers as a percentage of total sales were as follows for the three- and six-month periods ended June 30, 2018 and 2017:

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
CIBC		28	%		23	%		38	%		24	%
Scotia		18	%		23	%		10	%		22	%
Korea Zinc		28	%		14	%		26	%		17	%
Teck Metals Ltd.		17	%		15	%		11	%		15	%
Trafigura		—	%		12	%		—	%		6	%

Our trade accounts receivable balance related to contracts with customers was $9.7 million at June 30, 2018 and $14.8 million at December 31, 2017, and included no allowance for doubtful accounts.

We have determined our contracts do not include a significant financing component. For doré sales and sales of metal from doré, payment is received at the time the performance obligation is satisfied. The amount of consideration for concentrate sales is variable, and we receive payment for a significant portion of the estimated value of concentrate parcels within a relatively short period of time after the performance obligation is satisfied.

We do not incur significant costs to obtain contracts, nor costs to fulfill contracts which are not addressed by other accounting standards. Therefore, we have not recognized an asset for such costs as of June 30, 2018 or December 31, 2017.

The sales and income (loss) from operations amounts reported above include results from our Lucky Friday segment. The Lucky Friday mine is our only operation where some of our employees are subject to a collective bargaining agreement, and the most recent agreement expired on April 30, 2016. On February 19, 2017, the unionized employees voted against our contract offer, and on March 13, 2017 went on strike and have been on strike since that time. Production at Lucky Friday was suspended from the start of the strike until July 2017, when limited production resumed. For the first six months of 2018 and 2017, suspension costs not related to production of $9.4 million and $7.6 million, respectively, along with $2.4 million and $2.0 million, respectively, in non-cash depreciation expense, are reported in a separate line item on our consolidated statements of operations. We cannot predict how long the strike will last or whether an agreement will be reached. As a result of the strike or other related events, operations at Lucky Friday could continue to be disrupted, which could adversely affect our financial condition and results of operations. If the strike continues for a further extended period or it is determined an eventual resolution is unlikely, it may be appropriate in the future to review the carrying value of properties, plants, equipment and mineral interests at Lucky Friday. Under such review, if estimated undiscounted cash flows from Lucky Friday were less than its carrying value, an impairment loss would be recognized for the difference between the carrying value and the estimated fair value. The carrying value of properties, plants, equipment and mineral interests at Lucky Friday as of June 30, 2018 was approximately $428.1 million. However, Lucky Friday has significant identified reserves and mineralized material and a current estimated mine life of approximately 22 years.

On April 30, 2018, we settled with the National Labor Relations Board ("NLRB") an unfair labor practice claim made by the union. As part of the settlement, Hecla Limited rescinded its last, best and final contract offer implemented in March 2017. We do not believe the settlement with the NLRB will resolve any of the key differences in the ongoing labor dispute. On May 4, 2018, we gave notice to the union that the parties to the labor dispute are at impasse, and implemented portions of our revised final offer presented in December 2017.

14

Note 7.   Employee Benefit Plans

We sponsor defined benefit pension plans covering substantially all U.S. employees.  Net periodic pension cost for the plans consisted of the following for the three and six months ended June 30, 2018 and 2017 (in thousands):

	Three Months Ended June 30,
	2018			2017
Service cost	$	1,252		$	1,196
Interest cost		1,377			1,339
Expected return on plan assets		(1,634	)		(1,462	)
Amortization of prior service cost		15			(84	)
Amortization of net loss		931			1,033
Net periodic pension cost	$	1,941		$	2,022

	Six Months Ended June 30,
	2018			2017
Service cost	$	2,504		$	2,392
Interest cost		2,754			2,678
Expected return on plan assets		(3,268	)		(2,924	)
Amortization of prior service cost		30			(168	)
Amortization of net (gain) loss		1,862			2,066
Net periodic pension cost	$	3,882		$	4,044

For the three- and six-month periods ended June 30, 2018, the service cost component of net periodic pension cost is included in the same line items of our condensed consolidated financial statements as other employee compensation costs, and the net expense of $0.7 million and $1.4 million, respectively, related to all other components of net periodic pension cost is included in other (expense) income on our condensed consolidated statements of operations and comprehensive income (loss). For the three- and six-month periods ended June 30, 2017, all components of net periodic pension cost are included in the same line items of our condensed consolidated financial statements as other employee compensation costs.

In April 2018, we contributed $1.3 million in cash to our defined benefit plans, and expect to contribute an additional $2.6 million in cash or shares of our common stock to our defined benefit plans in 2018. We expect to contribute approximately $0.5 million to our unfunded supplemental executive retirement plan during 2018.

Note 8.    Shareholders’ Equity

Stock-based Compensation Plans

We periodically grant restricted stock unit awards, performance-based share awards and shares of common stock to our employees and directors. We measure compensation cost for restricted stock units and stock grants at the closing price of our stock at the time of grant. We measure compensation cost for performance-based grants using a Monte Carlo simulation to estimate their value at grant date. Restricted stock unit and performance-based share grants vest after a specified period with compensation cost amortized over that period. Although we have no current plans to issue stock options, we may do so in the future.

In March 2018, the Board of Directors granted 1,237,369 shares of common stock to employees for payment of long-term incentive compensation for the period ended December 31, 2017. The shares were distributed in March 2018, and $4.9 million in expense related to the stock awards was recognized in the periods prior to March 31, 2018.

15

In June 2018, the Board of Directors granted the following restricted stock unit awards to employees resulting in a total expense of $5.6 million:

• 1,322,461 restricted stock units, with one third of those vesting in June 2019, one third vesting in June 2020, and one third vesting in June 2021;

• 96,604 restricted stock units, with one half of those vesting in June 2019 and one-half vesting in June 2020; and

• 28,721 restricted stock units that vest in June 2019.

An expense of $2.0 million related to the unit awards discussed above vesting in 2019 will be recognized on a straight-line basis over the twelve months following the date of the award. An expense of $1.9 million related to the unit awards discussed above vesting in 2020 will be recognized on a straight-line basis over the twenty-four months following the date of the award. An expense of $1.7 million related to the unit awards discussed above vesting in 2021 will be recognized on a straight-line basis over the thirty-six-month period following the date of the award.

In June 2018, the Board of Directors granted performance-based share awards to certain executive employees. The value of the awards will be based on the ranking of the market performance of our common stock relative to the performance of the common stock of a group of peer companies over the three-year measurement period ending December 31, 2020. The number of shares to be issued will be based on the value of the awards divided by the share price at grant date. The expense related to the performance-based awards will be recognized on a straight-line base over the thirty months following the date of the award.

Stock-based compensation expense for restricted stock unit and performance-based grants to employees and shares issued to nonemployee directors recorded in the first six months of 2018 totaled $2.4 million, compared to $2.8 million in the same period last year.

In connection with the vesting of restricted stock units and other stock grants, employees have in the past, at their election and when permitted by us, chosen to satisfy their minimum tax withholding obligations through net share settlement, pursuant to which the Company withholds the number of shares necessary to satisfy such withholding obligations and pays the obligations in cash.  As a result, in the first six months of 2018 we withheld 697,341 shares valued at approximately $2.7 million, or approximately $3.86 per share. In the first six months of 2017 we withheld 488,634 shares valued at approximately $2.5 million, or approximately $5.06 per share.

Common Stock Dividends

In September 2011 and February 2012, our Board of Directors adopted a common stock dividend policy that has two components: (1) a dividend that links the amount of dividends on our common stock to our average quarterly realized silver price in the preceding quarter, and (2) a minimum annual dividend of $0.01 per share of common stock, in each case, payable quarterly, if and when declared. For illustrative purposes only, the table below summarizes potential per share dividend amounts at different quarterly average realized price levels according to the first component of the policy:

Quarterly average realized silver price per ounce		Quarterly dividend per share		Annualized dividend per share
	$30		$0.01		$0.04
	$35		$0.02		$0.08
	$40		$0.03		$0.12
	$45		$0.04		$0.16
	$50		$0.05		$0.20

On August 8, 2018, our Board of Directors declared a common stock dividend, pursuant to the minimum annual dividend component of the policy described above, of $0.0025 per share, for a total dividend of approximately $1.0 million payable in September 2018. Because the average realized silver price for the second quarter of 2018 was $16.61 per ounce, below the minimum threshold of $30 according to the policy, no silver-price-linked component was declared or paid. The declaration and payment of common stock dividends is at the sole discretion of our Board of Directors.

16

At-The-Market Equity Distribution Agreement

Pursuant to an equity distribution agreement dated February 23, 2016, we may issue and sell shares of our common stock from time to time through ordinary broker transactions having an aggregate offering price of up to $75 million, with the net proceeds available for general corporate purposes. The terms of sales transactions under the agreement, including trading day(s), number of shares sold in the aggregate, number of shares sold per trading day, and the floor selling price per share, are proposed by us to the sales agent. Whether or not we engage in sales from time to time may depend on a variety of factors, including share price, our cash resources, customary black-out restrictions, and whether we have any material inside information. The agreement can be terminated by us at any time. The shares issued under the equity distribution agreement are registered under the Securities Act of 1933, as amended, pursuant to our shelf registration statement on Form S-3, which was filed with the SEC on February 23, 2016. As of June 30, 2018, we had sold 4,608,847 shares under the agreement for total proceeds of approximately $17.7 million, net of commissions of approximately $0.4 million. No shares were sold under the agreement during the first six months of 2018.

Common Stock Repurchase Program

On May 8, 2012, we announced that our Board of Directors approved a stock repurchase program.  Under the program, we are authorized to repurchase up to 20 million shares of our outstanding common stock from time to time in open market or privately negotiated transactions, depending on prevailing market conditions and other factors.  The repurchase program may be modified, suspended or discontinued by us at any time. Whether or not we engage in repurchases from time to time may depend on a variety of factors, including not only price and cash resources, but customary black-out restrictions, whether we have any material inside information, limitations on share repurchases or cash usage that may be imposed by our credit agreement or in connection with issuances of securities, alternative uses for cash, applicable law, and other investment opportunities from time to time. As of June 30, 2018, 934,100 shares have been purchased at an average price of $3.99 per share, leaving approximately 19.1 million shares that may yet be purchased under the program. The closing price of our common stock at August 7, 2018, was $2.92 per share.

Note 9.    Debt, Credit Facilities and Capital Leases

Senior Notes

On April 12, 2013, we completed an offering of $500 million in aggregate principal amount of our Senior Notes due May 1, 2021 in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended, and in 2014, an additional $6.5 million aggregate principal amount of the Senior Notes were issued to one of our pension plans. The Senior Notes were subsequently exchanged for substantially identical Senior Notes registered with the SEC. The Senior Notes are governed by the Indenture, dated as of April 12, 2013, as amended (the "Indenture"), among Hecla Mining Company ("Hecla") and certain of our subsidiaries and The Bank of New York Mellon Trust Company, N.A., as trustee. The net proceeds from the initial offering of the Senior Notes ($490 million) were used to partially fund the acquisition of Aurizon and for general corporate purposes, including expenses related to the Aurizon acquisition.

The Senior Notes are recorded net of a 2% initial purchaser discount totaling $10 million at the time of the April 2013 issuance and having an unamortized balance of $3.6 million as of June 30, 2018. The Senior Notes bear interest at a rate of 6.875% per year from the date of original issuance or from the most recent payment date on which interest has been paid or provided for.  Interest on the Senior Notes is payable on May 1 and November 1 of each year, commencing November 1, 2013. During the six months ended June 30, 2018 and 2017, interest expense related to the Senior Notes and amortization of the initial purchaser discount and fees related to the issuance of the Senior Notes totaled $18.1 million and $17.2 million, respectively. The interest expense related to the Senior Notes for the six months ended June 30, 2017 was net of $0.9 million in capitalized interest, primarily related to the #4 Shaft project at our Lucky Friday unit which was completed in January 2017. Interest expense for the six months ended June 30, 2017 also included $1.1 million in costs related to our private offering of new Senior Notes in June 2017 and concurrent tender offer to purchase our existing Senior Notes, which were not completed.

17

The Senior Notes are guaranteed on a senior unsecured basis by certain of our subsidiaries (the "Guarantors").   The Senior Notes and the guarantees are, respectively, Hecla's and the Guarantors' general senior unsecured obligations and are subordinated to all of Hecla's and the Guarantors' existing and future secured debt to the extent of the assets securing that secured debt.  In addition, the Senior Notes are effectively subordinated to all of the liabilities of Hecla's subsidiaries that are not guaranteeing the Senior Notes, to the extent of the assets of those subsidiaries.

The Senior Notes became redeemable in whole or in part, at any time and from time to time after May 1, 2016, on the redemption dates and at the redemption prices specified in the Indenture, plus accrued and unpaid interest, if any, to the date of redemption.

Upon the occurrence of a change of control (as defined in the Indenture), each holder of Senior Notes will have the right to require us to purchase all or a portion of such holder's Senior Notes pursuant to a change of control offer (as defined in the Indenture), at a purchase price equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase, subject to the rights of holders of the Senior Notes on the relevant record date to receive interest due on the relevant interest payment date.

Ressources Québec Notes

On March 5, 2018, we entered into a note purchase agreement pursuant to which we issued CAD$40 million (approximately USD$30.8 million at the time of the transaction) in aggregate principal amount of our Series 2018-A Senior Notes due May 1, 2021 (the “RQ Notes”) to Ressources Québec, a subsidiary of Investissment Québec, a financing arm of the Québec government. The RQ Notes were issued at a discount of 0.58%, or CAD$0.2 million, and bear interest at a rate of 4.68% per year, payable on May 1 and November 1 of each year, commencing May 1, 2018. The RQ Notes are senior and unsecured and are pari passu in all material respects with the Senior Notes, including with respect to guarantees of the RQ Notes by certain of our subsidiaries. The net proceeds from the RQ Notes are required to be used for development and expansion of our Casa Berardi mine. During the six months ended June 30, 2018, interest expense related to the RQ Notes, including discount and origination fees, totaled $0.7 million.

Credit Facilities

In May 2016, we entered into a $100 million senior secured revolving credit facility with a three-year term, which was amended in July 2017 to extend the term until July 14, 2020. The credit facility is collateralized by the shares of common stock held in our material domestic subsidiaries and by our joint venture interests in the Greens Creek mine, all of our rights and interests in the joint venture agreement, and all of our rights and interests in the assets of the joint venture.  Below is information on the interest rates, standby fee, and financial covenant terms under our credit facility in place as of June 30, 2018:

Interest rates:
Spread over the London Interbank Offer Rate	2.25	-	3.25%
Spread over alternative base rate	1.25	-	2.25%
Standby fee per annum on undrawn amounts		0.50%
Covenant financial ratios:
Senior leverage ratio (debt secured by liens/EBITDA)	not more than 2.50:1
Leverage ratio (total debt less unencumbered cash/EBITDA)	not more than 4.00:1
Interest coverage ratio (EBITDA/interest expense)	not less than 3.00:1

18

We are also able to obtain letters of credit under the facility, and for any such letters we are required to pay a participation fee of between 2.25% and 3.25% based on our total leverage ratio, as well as a fronting fee to each issuing bank of 0.20% annually on the average daily dollar amount of any outstanding letters of credit. There were $3.0 million in letters of credit outstanding as of June 30, 2018.

We believe we were in compliance with all covenants under the credit agreement and no amounts were outstanding as of June 30, 2018.  With the exception of the $3.0 million in letters of credit outstanding, we had not drawn funds on the revolving credit facility as of June 30, 2018. However, as discussed in Note 13, we entered into a $200 million revolving credit facility in July 2018, which we expect to be increased to $250 million upon meeting certain conditions, and have drawn $47.0 million on the facility which is outstanding as of the filing date of this report.

Capital Leases

We have entered into various lease agreements, primarily for equipment at our Greens Creek, Lucky Friday, and Casa Berardi units, which we have determined to be capital leases.  At June 30, 2018, the total liability balance associated with capital leases, including certain purchase option amounts, was $14.8 million, with $6.0 million of the liability classified as current and the remaining $8.8 million classified as non-current. At December 31, 2017, the total liability balance associated with capital leases was $11.8 million, with $5.6 million of the liability classified as current and $6.2 million classified as non-current. The total obligation for future minimum lease payments was $15.8 million at June 30, 2018, with $1.0 million attributed to interest.

At June 30, 2018, the annual maturities of capital lease commitments, including interest, are (in thousands):

Twelve-month period ending June 30,
2019	$	6,558
2020		4,368
2021		3,249
2022		1,640
Total		15,815
Less: imputed interest		(1,044	)
Net capital lease obligation	$	14,771

Note 10.    Developments in Accounting Pronouncements

Accounting Standards Updates Adopted

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09 Revenue Recognition, replacing guidance currently codified in Subtopic 605-10 Revenue Recognition-Overall. The new ASU establishes a new five step principles-based framework in an effort to significantly enhance comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets. In August 2015, the FASB issued ASU No. 2015-14 Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. ASU No. 2015-14 deferred the effective date of ASU No. 2014-09 until annual and interim reporting periods beginning after December 15, 2017. We adopted ASU No. 2014-09 as of January 1, 2018 using the modified-retrospective transition approach. The impact of adoption of the update to our consolidated financial statements for the six months ended June 30, 2017 would have been a reclassification of $1.1 million in doré refining costs from sales of products to cost of sales and other direct production costs.

19

We performed an assessment of the impact of implementation of ASU No. 2014-09, and concluded it does not change the timing of revenue recognition or amounts of revenue recognized compared to how we recognize revenue under our current policies. Our revenues involve a relatively limited number of types of contracts and customers. In addition, our revenue contracts do not involve multiple types of performance obligations. Revenues from doré are recognized, and the transaction price is known, at the time the metals sold are delivered to the customer. Concentrate revenues are generally recognized at the time of shipment. Concentrates sold at our Lucky Friday unit typically leave the mine and are received by the customer within the same day. There is a period of time between shipment of concentrates from our Greens Creek unit and their physical receipt by the customer. However, based on our assessment, we believe control of the concentrate parcels is generally obtained by the customer at the time of shipment.

Our concentrate sales involve variable consideration, as they are subject to changes in metals prices between the time of shipment and their final settlement. However, we are able to reasonably estimate the transaction price for the concentrate sales at the time of shipment using forward prices for the month of settlement, and we then adjust the values each period until final settlement. Also, it is unlikely a significant reversal of revenue for any one concentrate parcel will occur.

Adoption of ASU No. 2014-09 involves additional disclosures, where applicable, on (i) contracts with customers, (ii) significant judgments and changes in judgments in determining the timing of satisfaction of performance obligations and the transaction price, and (iii) assets recognized for costs to obtain or fulfill contracts. See Note 6 for information on our sales of products.

In January 2016, the FASB issued ASU No. 2016-01 Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The guidance requires entities to measure equity investments that are not accounted for under the equity method at fair value, with any changes in fair value included in current earnings, and updates certain disclosure requirements. The update is effective for fiscal years beginning after December 15, 2017. We adopted ASU No. 2016-01 as of January 1, 2018 using the modified-retrospective approach, with a cumulative-effect adjustment from accumulated other comprehensive loss to retained deficit on our balance sheet of $1.3 million, net of the income tax effect.

In August 2016, the FASB issued ASU No. 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The update provides guidance on classification for cash receipts and payments related to eight specific issues. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. We adopted this update as of January 1, 2018.

In November 2016, the FASB issued ASU No. 2016-18 Statement of Cash Flows (Topic 230): Restricted Cash. The update requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. We adopted this update as of January 1, 2018. Cash, cash equivalents, and restricted cash and cash equivalents on the condensed consolidated statement of cash flows includes restricted cash and cash equivalents of $1.0 million as of June 30, 2018 and December 31, 2017, $1.1 million as of June 30, 2017 and $2.2 million as of December 31, 2016, as well as amounts previously reported for cash and cash equivalents.

In January 2017, the FASB issued ASU No. 2017-01 Business Combinations (Topic 805): Clarifying the Definition of a Business. The update clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. We will apply the applicable provisions of the update to any acquisitions occurring after the effective date.

In March 2017, the FASB issued ASU No. 2017-07 Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Period Postretirement Benefit Cost. The update provides specific requirements for classification and disclosure regarding the service cost component and other components of net benefit cost related to pension plans. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. We have implemented this update effective January 1, 2018. For the full year of 2018, a total net expense of approximately $2.8 million for the components of net benefit cost except service cost is expected to be included in other income (expense) on our consolidated statements of operations, and not reported in the same line items as other employee compensation costs.

20

Accounting Standards Updates to Become Effective in Future Periods

In February 2016, the FASB issued ASU No. 2016-02 Leases (Topic 842). The update modifies the classification criteria and requires lessees to recognize the assets and liabilities on the balance sheet for most leases. The update is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We are currently reviewing our leases and compiling the information required to implement the new guidance. See Note 9 for information on future commitments related to our operating leases; the present value of these leases will be recognized on our balance sheet upon implementation of the new guidance. We are currently evaluating the potential impact of implementing this update on our consolidated financial statements.

In August 2017, the FASB issued ASU No. 2017-12 Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The objective of the update is to improve the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements, and simplify the application of existing hedge accounting guidance. The update is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the potential impact of implementing this update on our consolidated financial statements.

Note 11.    Derivative Instruments

Foreign Currency

Our wholly-owned subsidiaries owning the Casa Berardi and San Sebastian mines are U.S. dollar ("USD")-functional entities which routinely incur expenses denominated in Canadian dollars ("CAD") and Mexican pesos ("MXN"), and such expenses expose us to exchange rate fluctuations between the USD and CAD and MXN. In April 2016, we initiated a program to manage our exposure to fluctuations in the exchange rate between the USD and CAD and the impact on our future operating costs denominated in CAD. In October 2016, we also initiated a program to manage our exposure to the impact of fluctuations in the exchange rate between the USD and MXN on our future operating costs denominated in MXN. The programs utilize forward contracts to buy CAD and MXN, and each contract is designated as a cash flow hedge. As of June 30, 2018, we have 107 forward contracts outstanding to buy CAD$256.0 million having a notational amount of US$198.0 million, and 33 forward contracts outstanding to buy MXN$226.3 million having a notional amount of USD$11.3 million. The CAD contracts are related to forecasted cash operating costs at Casa Berardi to be incurred from 2018 through 2021 and have USD-to-CAD exchange rates ranging between 1.2729 and 1.3335. The MXN contracts are related to forecasted cash operating costs at San Sebastian for 2018 through 2020 and have MXN-to-USD exchange rates ranging between 19.4000 and 20.8550. Our risk management policy provides for up to 75% of our planned cost exposure for five years into the future to be hedged under such programs, and for potential additional programs to manage other foreign currency-related exposure areas.

As of June 30, 2018, we recorded the following balances for the fair value of the contracts:

• a current asset of $0.1 million, which is included in other current assets;

• a non-current asset of $0.1 million, which is included in other non-current assets;

• a current liability of $1.4 million, which is included in other current liabilities; and

• a non-current liability of $1.0 million, which is included in other non-current liabilities.

Net unrealized losses of approximately $2.2 million related to the effective portion of the hedges were included in accumulated other comprehensive loss as of June 30, 2018, and are net of deferred taxes. Unrealized gains and losses will be transferred from accumulated other comprehensive loss to current earnings as the underlying operating expenses are recognized. We estimate approximately $1.3 million in net unrealized losses included in accumulated other comprehensive loss as of June 30, 2018 would be reclassified to current earnings in the next twelve months. Net realized gains of approximately $0.4 million on contracts related to underlying expenses which have been recognized were transferred from accumulated other comprehensive loss and included in cost of sales and other direct production costs for the six months ended June 30, 2018. Net unrealized gains of approximately $10 thousand related to ineffectiveness of the hedges were included in current earnings for the six months ended June 30, 2018.

21

Metals Prices

At times, we may use commodity forward sales commitments, commodity swap contracts and commodity put and call option contracts to manage our exposure to fluctuation in the prices of certain metals we produce. Contract positions are designed to ensure that we will receive a defined minimum price for certain quantities of our production, thereby partially offsetting our exposure to fluctuations in the market. Our risk management policy allows for up to 75% of our planned metals price exposure for five years into the future, with certain other limitations, to be hedged under such programs. These instruments do, however, expose us to (i) credit risk in the form of non-performance by counterparties for contracts in which the contract price exceeds the spot price of a commodity and (ii) price risk to the extent that the spot price exceeds the contract price for quantities of our production covered under contract positions.

We are currently using financially-settled forward contracts to manage the exposure to changes in prices of silver, gold, zinc and lead contained in our concentrate shipments between the time of shipment and final settlement. In addition, we currently use financially-settled forward contracts to manage the exposure to changes in prices of zinc and lead (but not silver and gold) contained in our forecasted future concentrate shipments. These contracts are not designated as hedges and are marked-to-market through earnings each period.

As of June 30, 2018, we recorded the following balances for the fair value of the contracts:

• a current asset of $2.4 million, which is included in other current assets and is net of $1.2 million for contracts in a fair value current liability position; and

• a non-current asset of $12.3 million, which is included in other non-current assets and is net of $0.2 million for contracts in a fair value non-current liability position.

We recognized a $3.3 million net gain during the first six months of 2018 on the contracts utilized to manage exposure to prices of metals in our concentrate shipments, which is included in sales of products.  The net gain recognized on the contracts offsets losses related to price adjustments on our provisional concentrate sales due to changes to silver, gold, lead and zinc prices between the time of sale and final settlement.

We recognized a $20.8 million net gain during the first half of 2018 on the contracts utilized to manage exposure to prices for forecasted future concentrate shipments. The net gain on these contracts is included as a separate line item under other income (expense), as they relate to forecasted future shipments, as opposed to sales that have already taken place but are subject to final pricing as discussed in the preceding paragraph.  The net gain for the first half of 2018 is the result of decreasing zinc and lead prices. This program, when utilized, is designed to mitigate the impact of potential future declines in lead and zinc prices from the price levels established in the contracts (see average price information below). When those prices increase compared to the contracts, we incur losses on the contracts.

22

The following tables summarize the quantities of metals committed under forward sales contracts at June 30, 2018 and December 31, 2017:

June 30, 2018	Ounces/pounds under contract (in 000's)								Average price per ounce/pound
	Silver		Gold		Zinc		Lead		Silver		Gold		Zinc		Lead
	(ounces)		(ounces)		(pounds)		(pounds)		(ounces)		(ounces)		(pounds)		(pounds)
Contracts on provisional sales
2018 settlements		1,114		5		20,889		4,960	$	16.50	$	1,298	$	1.38	$	1.07
Contracts on forecasted sales
2018 settlements		—		—		9,039		5,787		N/A		N/A	$	1.34	$	1.09
2019 settlements		—		—		48,502		20,283		N/A		N/A	$	1.40	$	1.10
2020 settlements		—		—		42,329		19,401		N/A		N/A	$	1.40	$	1.13
2021 settlements		—		—		—		4,409		N/A		N/A		N/A	$	1.07

December 31, 2017	Ounces/pounds under contract (in 000's)								Average price per ounce/pound
	Silver		Gold		Zinc		Lead		Silver		Gold		Zinc		Lead
	(ounces)		(ounces)		(pounds)		(pounds)		(ounces)		(ounces)		(pounds)		(pounds)
Contracts on provisional sales
2018 settlements		1,447		5		21,550		4,740	$	16.64	$	1,279	$	1.45	$	1.11
Contracts on forecasted sales
2018 settlements		—		—		32,187		16,645		N/A		N/A	$	1.29	$	1.06
2019 settlements		—		—		23,589		18,078		N/A		N/A	$	1.33	$	1.09
2020 settlements		—		—		3,307		2,866		N/A		N/A	$	1.27	$	1.08

Credit-risk-related Contingent Features

Certain of our derivative contracts contain cross default provisions which provide that a default under our revolving credit agreement would cause a default under the derivative contract. As of June 30, 2018, we have not posted any collateral related to these agreements. The fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $3.7 million as of June 30, 2018. If we were in breach of any of these provisions at June 30, 2018, we could have been required to settle our obligations under the agreements at their termination value of $3.7 million.

23

Note 12.    Fair Value Measurement

The table below sets forth our assets and liabilities that were accounted for at fair value on a recurring basis and the fair value calculation input hierarchy level that we have determined applies to each asset and liability category (in thousands).

Description	Balance at June 30, 2018		Balance at December 31, 2017		Input Hierarchy Level
Assets:
Cash and cash equivalents:
Money market funds and other bank deposits	$	239,722	$	186,107	Level 1
Available for sale securities:
Debt securities - municipal and corporate bonds		5,556		33,758	Level 2
Equity securities – mining industry		7,449		7,561	Level 1
Trade accounts receivable:
Receivables from provisional concentrate sales		9,717		14,805	Level 2
Restricted cash balances:
Certificates of deposit and other deposits		1,005		1,032	Level 1
Derivative contracts:
Foreign exchange contracts		172		4,943	Level 2
Metal forward contracts		14,705		—	Level 2
Total assets	$	278,326	$	248,206
Liabilities:
Derivative contracts:
Foreign exchange contracts	$	2,330	$	—	Level 2
Metal forward contracts		—		15,531	Level 2
Total Liabilities	$	2,330	$	15,531

Cash and cash equivalents consist primarily of money market funds and are valued at cost, which approximates fair value, and a small portion consists of municipal bonds having maturities of less than 90 days, which are recorded at fair value.

Current available-for-sale securities consist of municipal and corporate bonds having maturities of more than 90 days, which are recorded at fair value.

Current and non-current restricted cash balances consist primarily of certificates of deposit, U.S. Treasury securities, and other deposits and are valued at cost, which approximates fair value.

Our non-current available for sale securities consist of marketable equity securities of companies in the mining industry which are valued using quoted market prices for each security.

Trade accounts receivable include amounts due to us for shipments of concentrates and doré sold to customers.  Revenues and the corresponding accounts receivable for sales of metals products are recorded when title and risk of loss transfer to the customer (generally at the time of ship loading, or at the time of customer arrival for trucked products).  Sales of concentrates are recorded using estimated forward prices for the anticipated month of settlement applied to our estimate of payable metal quantities contained in each shipment.  Sales are recorded net of estimated treatment and refining charges, which are also impacted by changes in metals prices and quantities of contained metals.  We estimate the prices at which sales of our concentrates will be settled due to the time elapsed between shipment and final settlement with the customer.  Receivables for previously recorded concentrate sales are adjusted to reflect estimated forward metals prices at the end of each period until final settlement by the customer.  We obtain the forward metals prices used each period from a pricing service.  Changes in metal prices between shipment and final settlement result in changes to revenues previously recorded upon shipment.  The embedded derivative contained in our concentrate sales is adjusted to fair market value through earnings each period prior to final settlement.

24

We use financially-settled forward contracts to manage exposure to changes in the exchange rate between the USD and CAD and MXN, and the impact on CAD- and MXN-denominated operating costs incurred at our Casa Berardi and San Sebastian units (see Note 11 for more information). These contracts qualify for hedge accounting, with unrealized gains and losses related to the effective portion of the contracts included in accumulated other comprehensive loss, and unrealized gains and losses related to the ineffective portion of the contracts included in earnings each period. The fair value of each contract represents the present value of the difference between the forward exchange rate for the contract settlement period as of the measurement date and the contract settlement exchange rate.

We use financially-settled forward contracts to manage the exposure to changes in prices of silver, gold, zinc and lead contained in our concentrate shipments that have not reached final settlement.  We also use financially-settled forward contracts to manage the exposure to changes in prices of zinc and lead contained in our forecasted future concentrate shipments (see Note 11 for more information).  These contracts do not qualify for hedge accounting, and are marked-to-market through earnings each period.  The fair value of each contract represents the present value of the difference between the forward metal price for the contract settlement period as of the measurement date and the contract settlement metal price.

Our Senior Notes, which were recorded at their carrying value of $502.9 million, net of unamortized initial purchaser discount at June 30, 2018 of $3.6 million, had a fair value of $511.8 million at June 30, 2018. Quoted market prices, which we consider to be Level 1 inputs, are utilized to estimate fair values of the Senior Notes. See Note 9 for more information.

Note 13. Subsequent Events

Acquisition of Klondex Mines Ltd.

On July 20, 2018, we acquired all of the issued and outstanding common shares of Klondex Mines Ltd. ("Klondex") for consideration valued at $2.24 per Klondex share (the "Arrangement"). Under the terms of the Arrangement, each holder of Klondex common shares had the option to receive either (i) $2.47 in cash (the “Cash Alternative”), (ii) 0.6272 of a Hecla share per Klondex share (the “Share Alternative”), or (iii) US$0.8411 in cash and 0.4136 of a Hecla share per Klondex share (the “Combined Alternative”), subject in the case of the Cash Alternative and the Share Alternative to pro-ration based on a maximum cash consideration of $153.2 million and a maximum number of Hecla shares issued of 75,276,176. Klondex shareholders also received shares of a newly formed company which holds the Canadian assets of Klondex. Klondex had 180,499,319 issued and outstanding common shares prior to consummation of the Arrangement. An additional 1,549,626 Klondex common shares were issued immediately prior to consummation of the Arrangement related to conversion of in-the-money Klondex share options and certain outstanding restricted share units, resulting in a total of 182,048,945 issued and outstanding Klondex common shares at the time of consummation of the Arrangement. In connection with the Arrangement, we also issued an aggregate of 4,136,000 warrants to purchase one share of our common stock (“Hecla Warrants”) to holders of warrants to purchase Klondex’s common stock. An aggregate of 2,068,000 Hecla Warrants have an exercise price of $8.02 and expire in April 2032. An aggregate of 2,068,000 Hecla Warrants have an exercise price of $1.57 and expire in February 2029. In addition, we settled share-based payment awards held by Klondex directors and employees for cash of $2.0 million. Consideration transferred to consummate the Arrangement was comprised of total cash paid by us of $155.2 million, issuance of 75,276,176 shares of our common stock valued at $242.4 million, and issuance of the Hecla Warrants valued at $10.1 million, for total estimated consideration of $407.7 million. The calculation of consideration is preliminary and subject to change upon completion of the detailed valuation of assets acquired and liabilities assumed through the Arrangement.

Under the Arrangement, we also subscribed for $7.0 million of common shares of a new company which holds the Canadian assets previously owned by Klondex.

25

Revolving Credit Facility

On July 16, 2018, we entered into a $200 million senior secured revolving credit facility which replaced our previous $100 million credit facility and has a term ending on June 14, 2022, provided, however, that if we do not refinance our outstanding Senior Notes due May 1, 2021 by November 1, 2020, the term of the credit facility ends on November 1, 2020. We expect the credit facility to increase to $250 million upon meeting certain conditions, including adding certain subsidiaries of Klondex as borrowers under the credit facility and pledging the assets of those subsidiaries as additional collateral under the credit facility. The credit facility is collateralized by the shares of common stock held in our material domestic subsidiaries and by our joint venture interests in the Greens Creek mine, all of our rights and interests in the joint venture agreement, and all of our rights and interests in the assets of the joint venture.  Below is information on the interest rates, standby fee, and financial covenant terms under our current credit facility:

Interest rates:
Spread over the London Interbank Offer Rate	2.25	-	3.25%
Spread over alternative base rate	1.25	-	2.25%
Standby fee per annum on undrawn amounts		0.50%
Covenant financial ratios:
Senior leverage ratio (debt secured by liens/EBITDA)	not more than 2.50:1
Leverage ratio (total debt less unencumbered cash/EBITDA)(1)	not more than 4.00:1
Interest coverage ratio (EBITDA/interest expense)	not less than 3.00:1

⁽¹⁾ The leverage ratio will change to 4.50:1 from September 30, 2018 to December 31, 2019, and will revert back to 4.00:1 effective January 1, 2020.          

Since entering into the new credit facility we have drawn funds totaling $47.0 million, which is outstanding as of the filing date of this report. Interest on borrowings on the credit facility is payable on March 31, June 30, September 30, and December 31 of each year. We are also able to obtain letters of credit under the facility, and for any such letters we are required to pay a participation fee of between 2.25% and 3.25% based on our total leverage ratio, as well as a fronting fee to each issuing bank of 0.20% annually on the average daily dollar amount of any outstanding letters of credit. There were $3.0 million in letters of credit outstanding as of the filing date of this report.

Note 14.    Guarantor Subsidiaries

Presented below are Hecla’s unaudited interim condensed consolidating financial statements as required by Rule 3-10 of Regulation S-X of the Securities Exchange Act of 1934, as amended, resulting from the guarantees by certain of Hecla's subsidiaries (the "Guarantors") of the Senior Notes and the RQ Notes (see Note 9 for more information). The Guarantors consist of the following of Hecla's 100%-owned subsidiaries: Hecla Limited; Silver Hunter Mining Company; Rio Grande Silver, Inc.; Hecla MC Subsidiary, LLC; Hecla Silver Valley, Inc.; Burke Trading, Inc.; Hecla Montana, Inc.; Revett Silver Company; RC Resources, Inc.; Troy Mine Inc.; Revett Exploration, Inc.; Revett Holdings, Inc.; Mines Management, Inc.; Newhi Corp.; Montanore Minerals Corp.; Hecla Alaska LLC; Hecla Greens Creek Mining Company; Hecla Admiralty Company; and Hecla Juneau Mining Company. We completed the initial offering of the Senior Notes on April 12, 2013, and a related exchange offer for virtually identical notes registered with the SEC on January 3, 2014. We issued the RQ Notes on March 5, 2018.

The unaudited interim condensed consolidating financial statements below have been prepared from our financial information on the same basis of accounting as the unaudited interim condensed consolidated financial statements set forth elsewhere in this report. Investments in the subsidiaries are accounted for under the equity method. Accordingly, the entries necessary to consolidate Hecla, the Guarantors, and our non-guarantor subsidiaries are reflected in the intercompany eliminations column. In the course of preparing consolidated financial statements, we eliminate the effects of various transactions conducted between Hecla and its subsidiaries and among the subsidiaries. While valid at an individual subsidiary level, such activities are eliminated in consolidation because, when taken as a whole, they do not represent business activity with third-party customers, vendors, and other parties. Examples of such eliminations include the following:

• Investments in subsidiaries. The acquisition of a company results in an investment in debt or equity capital on the records of the parent company and a contribution to debt or equity capital on the records of the subsidiary. Such investments and capital contributions are eliminated in consolidation.

26

• Capital contributions. Certain of Hecla's subsidiaries do not generate cash flow, either at all or sufficient to meet their capital needs, and their cash requirements are routinely met with inter-company advances from their parent companies. On at least an annual basis, when not otherwise intended as debt, the boards of directors of such parent companies declare contributions of capital to their subsidiary companies, which increase the parents' investment and the subsidiaries' additional paid-in capital. In consolidation, investments in subsidiaries and related additional paid-in capital are eliminated.

• Debt. Inter-company debt agreements have been established between certain of Hecla's subsidiaries and their parents. The related debt liability and receivable balances, accrued interest expense (if any) and income activity (if any), and payments of principal and accrued interest amounts (if any) by the subsidiary companies to their parents are eliminated in consolidation.

• Dividends. Certain of Hecla's subsidiaries which generate cash flow routinely provide cash to their parent companies through inter-company transfers. On at least an annual basis, the boards of directors of such subsidiary companies declare dividends to their parent companies, which reduces the subsidiaries' retained earnings and increases the parents' dividend income. In consolidation, such activity is eliminated.

• Deferred taxes. Our ability to realize deferred tax assets and liabilities is considered on a consolidated basis for subsidiaries within the United States, with all subsidiaries' estimated future taxable income contributing to the ability to realize all such assets and liabilities. However, when Hecla's subsidiaries are viewed independently, we use the separate return method to assess the realizability of each subsidiary's deferred tax assets and whether a valuation allowance is required against such deferred tax assets. In some instances, a parent company or subsidiary may possess deferred tax assets whose realization depends on the future taxable incomes of other subsidiaries on a consolidated-return basis, but would not be considered realizable if such parent or subsidiary filed on a separate stand-alone basis. In such a situation, a valuation allowance is assessed on that subsidiary's deferred tax assets, with the resulting adjustment reported in the eliminations column of the guarantor and parent's financial statements, as is the case in the unaudited interim financial statements set forth below. The separate return method can result in significant eliminations of deferred tax assets and liabilities and related income tax provisions and benefits. Non-current deferred tax asset balances are included in other non-current assets on the consolidating balance sheets and make up a large portion of that item, particularly for the guarantor balances.

Separate financial statements of the Guarantors are not presented because the guarantees by the Guarantors are joint and several and full and unconditional, except for certain customary release provisions, including: (1) the sale or disposal of all or substantially all of the assets of the Guarantor; (2) the sale or other disposition of the capital stock of the Guarantor; (3) the Guarantor is designated as an unrestricted entity in accordance with the applicable provisions of the indenture; (4) Hecla ceases to be a borrower as defined in the indenture; and (5) upon legal or covenant defeasance or satisfaction and discharge of the indenture.

27

Unaudited Interim Condensed Consolidating Balance Sheets

	As of June 30, 2018
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Assets
Cash and cash equivalents	$	163,357		$	24,387		$	51,978		$	—		$	239,722
Other current assets		18,609			44,279			49,822			(70	)		112,640
Properties, plants, and equipment - net		1,927			1,246,318			758,347			—			2,006,592
Intercompany receivable (payable)		281,519			(145,439	)		(332,954	)		196,874			—
Investments in subsidiaries		1,379,384			—			—			(1,379,384	)		—
Other non-current assets		23,669			8,357			8,296			(6,682	)		33,640
Total assets	$	1,868,465		$	1,177,902		$	535,489		$	(1,189,262	)	$	2,392,594
Liabilities and Stockholders' Equity
Current liabilities	$	(212,784	)	$	77,213		$	39,180		$	201,724		$	105,333
Long-term debt		533,230			5,825			2,932			—			541,987
Non-current portion of accrued reclamation		—			66,157			11,945			—			78,102
Non-current deferred tax liability		—			11,916			112,148			(11,602	)		112,462
Other non-current liabilities		46,720			5,584			1,107			—			53,411
Stockholders' equity		1,501,299			1,011,207			368,177			(1,379,384	)		1,501,299
Total liabilities and stockholders' equity	$	1,868,465		$	1,177,902		$	535,489		$	(1,189,262	)	$	2,392,594

	As of December 31, 2017
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Assets
Cash and cash equivalents	$	103,878		$	31,016		$	51,213		$	—		$	186,107
Other current assets		47,555			47,608			39,630			(575	)		134,218
Properties, plants, and equipment - net		1,946			1,244,161			773,914			—			2,020,021
Intercompany receivable (payable)		287,310			(177,438	)		(341,182	)		231,310			—
Investments in subsidiaries		1,358,025			—			—			(1,358,025	)		—
Other non-current assets		14,409			7,289			9,283			(6,370	)		24,611
Total assets	$	1,813,123		$	1,152,636		$	532,858		$	(1,133,660	)	$	2,364,957
Liabilities and Stockholders' Equity
Current liabilities	$	(226,576	)	$	66,550		$	37,671		$	234,485		$	112,130
Long-term debt		502,229			2,303			3,890			—			508,422
Non-current portion of accrued reclamation		—			67,565			11,801			—			79,366
Non-current deferred tax liability		—			10,120			121,546			(10,120	)		121,546
Other non-current liabilities		53,588			5,185			838			—			59,611
Stockholders' equity		1,483,882			1,000,913			357,112			(1,358,025	)		1,483,882
Total liabilities and stockholders' equity	$	1,813,123		$	1,152,636		$	532,858		$	(1,133,660	)	$	2,364,957

28

Unaudited Interim Condensed Consolidating Statements of Operations

	Three Months Ended June 30, 2018
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Revenues	$	2,697		$	75,197		$	69,365		$	—		$	147,259
Cost of sales		(73	)		(37,489	)		(42,878	)		—			(80,440	)
Depreciation, depletion, amortization		—			(11,996	)		(19,821	)		—			(31,817	)
General and administrative		(4,615	)		(4,602	)		(570	)		—			(9,787	)
Exploration and pre-development		(72	)		(3,064	)		(6,117	)		—			(9,253	)
Research and development		—			(1,579	)		(758	)		—			(2,337	)
Gain on derivative contracts		16,804			—			—			—			16,804
Acquisition costs		(940	)		(68	)		(2	)		—			(1,010	)
Foreign exchange gain (loss)		(5,731	)		(74	)		8,281			—			2,476
Lucky Friday suspension-related costs		—			(6,801	)		—			—			(6,801	)
Equity in earnings of subsidiaries		5,745			—			—			(5,745	)		—
Other expense		(1,741	)		(1,616	)		(5,522	)		(3,714	)		(12,593	)
Income (loss) before income taxes		12,074			7,908			1,978			(9,459	)		12,501
(Provision) benefit from income taxes		—			(3,715	)		(426	)		3,714			(427	)
Net income (loss)		12,074			4,193			1,552			(5,745	)		12,074
Preferred stock dividends		(138	)		—			—			—			(138	)
Income (loss) applicable to common stockholders		11,936			4,193			1,552			(5,745	)		11,936
Net income (loss)		12,074			4,193			1,552			(5,745	)		12,074
Changes in comprehensive income (loss)		(5,162	)		—			—			—			(5,162	)
Comprehensive income (loss)	$	6,912		$	4,193		$	1,552		$	(5,745	)	$	6,912

29

	Six Months Ended June 30, 2018
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Revenues	$	3,312		$	145,408		$	138,248		$	—		$	286,968
Cost of sales		402			(72,190	)		(81,521	)		—			(153,309	)
Depreciation, depletion, amortization		—			(23,256	)		(36,615	)		—			(59,871	)
General and administrative		(8,448	)		(8,050	)		(1,024	)		—			(17,522	)
Exploration and pre-development		(127	)		(5,003	)		(12,488	)		—			(17,618	)
Research and development		—			(2,061	)		(1,712	)		—			(3,773	)
Loss on derivative contracts		20,811			—			—			—			20,811
Acquisition costs		(3,300	)		(68	)		(149	)		—			(3,517	)
Foreign exchange gain (loss)		(14,435	)		(74	)		19,577			—			5,068
Lucky Friday suspension-related costs		—			(11,818	)		—			—			(11,818	)
Equity in earnings of subsidiaries		23,513			—			—			(23,513	)		—
Other expense		(1,414	)		(3,393	)		(9,901	)		(9,202	)		(23,910	)
Income (loss) before income taxes		20,314			19,495			14,415			(32,715	)		21,509
(Provision) benefit from income taxes		—			(9,203	)		(1,194	)		9,202			(1,195	)
Net income (loss)		20,314			10,292			13,221			(23,513	)		20,314
Preferred stock dividends		(276	)		—			—			—			(276	)
Income (loss) applicable to common stockholders		20,038			10,292			13,221			(23,513	)		20,038
Net income (loss)		20,314			10,292			13,221			(23,513	)		20,314
Changes in comprehensive income (loss)		(7,266	)		—			38			(38	)		(7,266	)
Comprehensive income (loss)	$	13,048		$	10,292		$	13,259		$	(23,551	)	$	13,048

30

	Three Months Ended June 30, 2017
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Revenues	$	807		$	70,344		$	63,128		$	—		$	134,279
Cost of sales		(186	)		(40,816	)		(36,501	)		—			(77,503	)
Depreciation, depletion, amortization		—			(13,502	)		(12,067	)		—			(25,569	)
General and administrative		(5,721	)		(4,094	)		(494	)		—			(10,309	)
Exploration and pre-development		(66	)		(2,496	)		(4,343	)		—			(6,905	)
Research and development		—			(312	)		—			—			(312	)
Gain on derivative contracts		2,487			—			—			—			2,487
Foreign exchange gain (loss)		7,666			1			(11,550	)		—			(3,883	)
Lucky Friday suspension costs		—			(8,024	)		—			—			(8,024	)
Equity in earnings of subsidiaries		(2,355	)		—			—			2,355			—
Other (expense) income		(29,115	)		(1,557	)		(2,400	)		20,890			(12,182	)
Income (loss) before income taxes		(26,483	)		(456	)		(4,227	)		23,245			(7,921	)
(Provision) benefit from income taxes		—			1,068			3,727			(20,890	)		(16,095	)
Net income (loss)		(26,483	)		612			(500	)		2,355			(24,016	)
Preferred stock dividends		(138	)		—			—			—			(138	)
Income (loss) applicable to common stockholders		(26,621	)		612			(500	)		2,355			(24,154	)
Net income (loss)		(26,483	)		612			(500	)		2,355			(24,016	)
Changes in comprehensive income (loss)		2,878			—			847			(847	)		2,878
Comprehensive income (loss)	$	(23,605	)	$	612		$	347		$	1,508		$	(21,138	)

31

	Six Months Ended June 30, 2017
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Revenues	$	(3,286	)	$	153,297		$	126,812		$	—		$	276,823
Cost of sales		(334	)		(83,588	)		(72,257	)		—			(156,179	)
Depreciation, depletion, amortization		—			(29,268	)		(25,253	)		—			(54,521	)
General and administrative		(12,190	)		(6,413	)		(912	)		—			(19,515	)
Exploration and pre-development		(310	)		(4,397	)		(7,964	)		—			(12,671	)
Research and development		—			(995	)		—			—			(995	)
Loss on derivative contracts		(5,322	)		—			—			—			(5,322	)
Foreign exchange gain (loss)		10,133			(43	)		(16,235	)		—			(6,145	)
Lucky Friday suspension costs		—			(9,605	)		—			—			(9,605	)
Equity in earnings of subsidiaries		346			—			—			(346	)		—
Other (expense) income		13,781			(2,409	)		(9,470	)		(23,930	)		(22,028	)
Income (loss) before income taxes		2,818			16,579			(5,279	)		(24,276	)		(10,158	)
(Provision) benefit from income taxes		—			(7,901	)		(3,053	)		23,930			12,976
Net income (loss)		2,818			8,678			(8,332	)		(346	)		2,818
Preferred stock dividends		(276	)		—			—			—			(276	)
Income (loss) applicable to common stockholders		2,542			8,678			(8,332	)		(346	)		2,542
Net income (loss)		2,818			8,678			(8,332	)		(346	)		2,818
Changes in comprehensive income (loss)		6,082			—			758			(758	)		6,082
Comprehensive income (loss)	$	8,900		$	8,678		$	(7,574	)	$	(1,104	)	$	8,900

Unaudited Interim Condensed Consolidating Statements of Cash Flows

	Six Months Ended June 30, 2018
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Cash flows from operating activities	$	27,981		$	60,805		$	2,166		$	(43,934	)	$	47,018
Cash flows from investing activities:
Additions to properties, plants, and equipment		—			(25,454	)		(17,850	)		—			(43,304	)
Other investing activities, net		6,294			44			420			21,359			28,117
Cash flows from financing activities:
Dividends paid to stockholders		(2,276	)		—			—			—			(2,276	)
Issuance of debt		31,024			—			—			—			31,024
Payments on debt		—			(1,393	)		(2,369	)		—			(3,762	)
Other financing activity		(3,544	)		(40,658	)		18,930			22,575			(2,697	)
Effect of exchange rate changes on cash		—			—			(532	)		—			(532	)
Changes in cash, cash equivalents and restricted cash and cash equivalents		59,479			(6,656	)		765			—			53,588
Beginning cash, cash equivalents and restricted cash and cash equivalents		103,878			32,048			51,213			—			187,139
Ending cash, cash equivalents and restricted cash and cash equivalents	$	163,357		$	25,392		$	51,978		$	—		$	240,727

32

	Six Months Ended June 30, 2017
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Cash flows from operating activities	$	9,131		$	13,792		$	10,757		$	12,141		$	45,821
Cash flows from investing activities:
Additions to properties, plants, and equipment		—			(19,132	)		(26,832	)					(45,964	)
Other investing activities, net		(8,500	)		164			(22	)		(424	)		(8,782	)
Cash flows from financing activities:
Dividends paid to stockholders		(2,257	)		—			—						(2,257	)
Payments on debt		—			(3,044	)		(671	)					(3,715	)
Other financing activity		(11,169	)		9,501			20,430			(11,717	)		7,045
Effect of exchange rate changes on cash		—			—			1,086			—			1,086
Changes in cash, cash equivalents and restricted cash and cash equivalents		(12,795	)		1,281			4,748			—			(6,766	)
Beginning cash, cash equivalents and restricted cash and cash equivalents		113,275			26,588			32,114			—			171,977
Ending cash, cash equivalents and restricted cash and cash equivalents	$	100,480		$	27,869		$	36,862		$	—		$	165,211

Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations

Certain statements contained in this Form 10-Q, including in Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosure About Market Risk, are intended to be covered by the safe harbor provided for under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  Our forward-looking statements include our current expectations and projections about future results, performance, results of litigation, prospects and opportunities, including reserves and other mineralization. We have tried to identify these forward-looking statements by using words such as “may,” “will,” “expect,” “anticipate,” “believe,” “intend,” “feel,” “plan,” “estimate,” “project,” “forecast” and similar expressions.  These forward-looking statements are based on information currently available to us and are expressed in good faith and believed to have a reasonable basis.  However, our forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements.

These risks, uncertainties and other factors include, but are not limited to, those set forth under Part I, Item 1A. – Business – Risk Factors in our annual report filed on Form 10-K for the year ended December 31, 2017, as updated in Part II, Item 1A – Risk Factors in our quarterly report on Form 10-Q for the quarter ended March 31, 2018. Given these risks and uncertainties, readers are cautioned not to place undue reliance on our forward-looking statements.  All subsequent written and oral forward-looking statements attributable to Hecla Mining Company or to persons acting on our behalf are expressly qualified in their entirety by these cautionary statements.  Except as required by federal securities laws, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

Hecla Mining Company and our subsidiaries have provided precious and base metals to the U.S. and worldwide since 1891. We discover, acquire, develop, and produce silver, gold, lead and zinc.

33

We produce lead, zinc and bulk concentrates, which we sell to custom smelters and brokers, and unrefined doré containing gold and silver, which is further refined before sale to precious metals traders.  We are organized into four segments that encompass our operating and development units:  Greens Creek, Lucky Friday, Casa Berardi, and San Sebastian. The map below shows the locations of our operating units and our exploration and pre-development projects, as well as our corporate offices located in Coeur d'Alene, Idaho and Vancouver, British Columbia.

Our current business strategy is to focus our financial and human resources in the following areas:

• operating our properties safely, in an environmentally responsible manner, and cost-effectively;

• fully integrating the acquisition in July 2018 of Klondex Mines Ltd. ("Klondex") discussed further below, which gives us ownership of three operating mines and other mineral interests in northern Nevada;

• continuing to optimize and improve operations at our units, which includes incurring research and development expenditures that may not result in tangible benefits;

• expanding our proven and probable reserves and production capacity at our units;

• conducting our business with financial stewardship to preserve our financial position in varying metals price environments;

• advance permitting of the Rock Creek and Montanore projects. We acquired Rock Creek as part of the acquisition of Revett Mining Company, Inc. ("Revett") in June 2015, and we acquired Montanore through the acquisition of Mines Management, Inc. ("Mines Management") in September 2016;

34

• maintaining and investing in exploration and pre-development projects in the vicinities of seven mining districts and projects, most of which we believe to be under-explored and under-invested: North Idaho's Silver Valley in the historic Coeur d'Alene Mining District; our Greens Creek unit on Alaska's Admiralty Island located near Juneau; the silver-producing district near Durango, Mexico; the Abitibi region of northwestern Quebec, Canada; our newly-acquired projects in northern Nevada; the Rock Creek and Montanore projects in northwestern Montana; and the Creede district of southwestern Colorado; and

• continuing to seek opportunities to acquire or invest in mining properties and companies.

A number of key factors may impact the execution of our strategy, including regulatory issues and metals prices. Metals prices can be very volatile. As discussed in the Critical Accounting Estimates section below, metals prices are influenced by a number of factors beyond our control. Average market prices of gold, lead, and zinc in the first six months of 2018 were higher than their levels from the comparable period last year, with the average silver price lower, as illustrated by the table in Results of Operations below. While we believe current global economic and industrial trends could result in continued demand for the metals we produce, prices have been volatile and there can be no assurance that current prices will continue.

The total principal amount of our Senior Notes due May 1, 2021 is $506.5 million and they bear interest at a rate of 6.875% per year. The net proceeds from the Senior Notes were primarily used for the acquisition of Aurizon in June 2013. In addition, in March 2018 we entered into a note purchase agreement pursuant to which we issued CAD$40 million (approximately USD$30.8 million at the time of the transaction) in aggregate principal amount of our Series 2018-A Senior Notes due May 1, 2021 (the “RQ Notes”) to Ressources Québec which have an annual coupon rate of 4.68%. The net proceeds from the RQ Notes are required to be used for development and expansion of our Casa Berardi unit. Also, we have drawn funds totaling $47.0 million on our revolving credit facility. See Note 9 and Note 13 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information on our debt arrangements. As discussed in the Financial Liquidity and Capital Resources section below, we believe that we will be able to meet the obligations associated with the Senior Notes, RQ Notes, and revolving credit facility; however, a number of factors could impact our ability to meet the debt obligations and fund our other projects.

On July 20, 2018, we completed the acquisition of all of the issued and outstanding common shares of Klondex for total consideration valued at approximately $407.7 million at the time of consummation of the acquisition. See Note 13 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information. As a result of the acquisition, we own 100% of three producing gold mines, along with interests in various gold exploration properties in northern Nevada. The acquisition is expected to increase our annual gold production, gives us ownership of operating gold mines and identified gold reserves and other mineralized material, and provides access to a large land package with known mineralization. We are faced with the challenge of integrating the acquisition and assuming operating responsibility for Klondex's mines and other operations. See Part II, Item 1A – Risk Factors – Operating, Development, Exploration and Acquisition Risks in our quarterly report filed on Form 10-Q for the quarter ended March 31, 2018 for risks associated with our acquisition of Klondex.

On June 15, 2015, we completed the acquisition of Revett, giving us 100% ownership of the Rock Creek project, a significant undeveloped silver and copper deposit in northwestern Montana. In addition, on September 13, 2016, we completed the acquisition of Mines Management, giving us 100% ownership of the Montanore project, another significant undeveloped silver and copper deposit located approximately 10 miles from our Rock Creek project. Development of Rock Creek and Montanore has been challenged by non-governmental organizations and governmental agencies at various times, and there can be no assurance that we will be able to obtain the permits required to develop these projects. See Part II, Item 1A – Risk Factors for more information.

As further discussed in the Lucky Friday Segment section below, the union employees at Lucky Friday have been on strike since March 13, 2017. Production at Lucky Friday was suspended from the start of the strike until July 2017, with limited production by salaried employees commencing at that time. We cannot predict how long the strike will last or whether an agreement will be reached. We expect cash expenditures of about $1.5 million to $2.0 million per month to advance engineering and infrastructure for the restart of full production, in addition to costs related to limited interim production. As a result of the strike or other related events, operations at Lucky Friday could continue to be disrupted, which could adversely affect our financial condition and results of operations.

35

We strive to achieve excellent mine safety and health performance. We seek to implement this goal by: training employees in safe work practices; establishing, following and improving safety standards; investigating accidents, incidents and losses to avoid recurrence; involving employees in the establishment of safety standards; and participating in the National Mining Association’s CORESafety program. We attempt to implement reasonable best practices with respect to mine safety and emergency preparedness. We work with the Mine Safety and Health Administration (“MSHA”) to address issues outlined in investigations and inspections and continue to evaluate our safety practices.

Another challenge for us is the risk associated with environmental litigation and ongoing reclamation activities. As described in Part I, Item 1A – Risk Factors of our annual report filed on Form 10-K for the year ended December 31, 2017 and Note 4 of Notes to Condensed Consolidated Financial Statements (Unaudited), it is possible that our estimate of these liabilities (and our ability to estimate liabilities in general) may change in the future, affecting our strategic plans.  We are involved in various environmental legal matters and the estimate of our environmental liabilities and liquidity needs, as well as our strategic plans, may be significantly impacted as a result of these matters or new matters that may arise. We strive to ensure that our activities are conducted in compliance with applicable laws and regulations and attempt to resolve environmental litigation on as favorable terms as possible.

Results of Operations

Sales of products by metal for the three- and six-month periods ended June 30, 2018 and 2017 were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2018			2017			2018			2017
Silver	$	38,425		$	46,077		$	73,647		$	97,434
Gold		77,635			66,975			150,679			129,676
Lead		10,690			8,101			19,917			21,720
Zinc		27,614			20,500			57,723			50,365
Less: smelter charges		(7,105	)		(7,374	)		(14,998	)		(22,372	)
Sales of products	$	147,259		$	134,279		$	286,968		$	276,823

36

The fluctuations in sales for the second quarter and first six months of 2018 compared to the same periods of 2017 were primarily due to:

• Higher quantities of gold, zinc and lead sold, partially offset by lower silver volume, in the second quarter of 2018. Silver, zinc and lead sales volumes were lower in the first half of 2018, with gold volume higher, compared to the first half of 2017. See The Greens Creek Segment, The Lucky Friday Segment, The Casa Berardi Segment, and The San Sebastian Segment sections below for more information on metal production and sales volumes at each of our operating segments. Total metals production and sales volumes for each period are shown in the following table:

		Three Months Ended June 30,				Six Months Ended June 30,
		2018		2017		2018		2017
Silver -	Ounces produced		2,596,423		2,807,474		5,130,518		6,176,901
	Payable ounces sold		2,313,753		2,688,721		4,405,217		5,557,835
Gold -	Ounces produced		60,313		52,561		118,121		108,674
	Payable ounces sold		59,643		53,170		114,482		104,541
Lead -	Tons produced		5,522		4,420		11,149		13,056
	Payable tons sold		4,745		4,250		8,613		10,676
Zinc -	Tons produced		14,299		12,966		29,510		28,503
	Payable tons sold		10,686		8,978		20,790		20,825

The difference between what we report as "ounces/tons produced" and "payable ounces/tons sold" is attributable to the difference between the quantities of metals contained in the concentrates we produce versus the portion of those metals actually paid for by our customers according to the terms of our sales contracts. Differences can also arise from inventory changes incidental to shipping schedules, or variances in ore grades which impact the amount of metals contained in concentrates produced and sold.

• Higher average realized prices for gold, lead and zinc, and lower average realized prices for silver. These price variances are illustrated in the following table:

		Three Months Ended June 30,				Six Months Ended June 30,
		2018		2017		2018		2017
Silver –	London PM Fix ($/ounce)	$	16.53	$	17.26	$	16.65	$	17.34
	Realized price per ounce	$	16.61	$	17.14	$	16.72	$	17.53
Gold –	London PM Fix ($/ounce)	$	1,306	$	1,257	$	1,318	$	1,238
	Realized price per ounce	$	1,302	$	1,260	$	1,316	$	1,240
Lead –	LME Final Cash Buyer ($/pound)	$	1.08	$	0.98	$	1.11	$	1.01
	Realized price per pound	$	1.13	$	0.95	$	1.16	$	1.02
Zinc –	LME Final Cash Buyer ($/pound)	$	1.41	$	1.18	$	1.48	$	1.22
	Realized price per pound	$	1.29	$	1.14	$	1.39	$	1.21

Average realized prices differ from average market prices primarily because concentrate sales are generally recorded as revenues at the time of shipment at forward prices for the estimated month of settlement, which differ from average market prices.  Due to the time elapsed between shipment of concentrates and final settlement with customers, we must estimate the prices at which sales of our metals will be settled.  Previously recorded sales are adjusted to estimated settlement metal prices each period through final settlement.  For the second quarter and first six months of 2018, we recorded net negative price adjustments to provisional settlements of $2.5 million and $2.6 million, respectively, compared to net positive price adjustments to provisional settlements of $1.3 million and $0.7 million, respectively, in the second quarter and first six months of 2017. The price adjustments related to silver, gold, zinc and lead contained in our concentrate shipments were largely offset by gains and losses on forward contracts for those metals for each period. See Note 11 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information.  The gains and losses on these contracts are included in revenues and impact the realized prices for silver, gold, lead and zinc.  Realized prices are calculated by dividing gross revenues for each metal (which include the price adjustments and gains and losses on the forward contracts discussed above) by the payable quantities of each metal included in concentrate and doré shipped during the period.

37

We recorded income applicable to common shareholders of $11.9 million ($0.03 per basic common share) for the second quarter of 2018 and income applicable to common shareholders of $20.0 million ($0.05 per basic common share) for the first six months of 2018, compared to a loss applicable to common shareholders of $24.2 million ($0.06 per basic common share) and income applicable to common shareholders of $2.5 million ($0.01 per basic common share) for the second quarter and first six months of 2017, respectively. The following factors contributed to the results for the second quarter and first six months of 2018 compared to the same periods in 2017:

• Gains on base metal derivatives contracts of $16.8 million in the second quarter of 2018 and $20.8 million in the first half of 2018, compared to a net gain of $2.5 million in the second quarter of 2017 and a net loss of $5.3 million in the first half of 2017. See Note 11 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information.

• Net foreign exchange gains in the second quarter and first half of 2018 of $2.5 million and $5.1 million, respectively, versus net losses of $3.9 million and $6.1 million in the second quarter and first half of 2017, respectively. The variances are primarily related to the impact of changes in the CAD-to-USD exchange rate on the remeasurement of our net monetary liabilities in Quebec. During the first half of 2018, the applicable CAD-to-USD exchange rate increased from 1.2546 to 1.3168, compared to a decrease in the rate from 1.3426 to 1.2977 during the first half of 2017.

• Income tax provisions of $0.4 million for the second quarter of 2018 and $1.2 million for the six-month period ended June 30, 2018 compared to an income tax provision of $16.1 million and an income tax benefit of $13.0 million, respectively, for the same periods in 2017. The benefit in the first half of 2017 is primarily the result of a change in income tax position recognized in the first quarter of 2017 relating to the timing of deduction for #4 Shaft development costs at Lucky Friday, as further discussed in Corporate Matters below.

• Gross profit at our Greens Creek and Casa Berardi units was higher in the second quarter of 2018 by $9.8 million and $4.3 million, respectively, and in the first half of 2018 by $19.0 million and $11.4 million, respectively, compared to the same periods in 2017. This was partially offset by lower gross profit at our San Sebastian unit, which was $12.0 million and $19.8 million less, respectively, in the second quarter and first half of 2018 compared to the same periods in 2017. Gross profit at Lucky Friday was higher in the second quarter of 2018 by $1.7 million, but lower in the first half of 2018 by $2.9 million, compared to the same periods in 2017. See The Greens Creek Segment, The Lucky Friday Segment, The Casa Berardi Segment, and The San Sebastian Segment sections below.

• Costs of $1.0 million and $3.5 million for the second quarter and first half of 2018, respectively, related to the acquisition of Klondex completed in July 2018.

• Increases in research and development costs by $2.0 million and $2.8 million in the second quarter and first half of 2018, respectively, compared to the same periods in 2017. These costs are related to the evaluation and development of technologies that would be new to our operations.

• Exploration and pre-development expense increased by $2.3 million and $4.9 million in the second quarter and first half of 2018, respectively, compared to the same periods in 2017. In 2018, we have continued exploration work at our Greens Creek, San Sebastian, and Casa Berardi units, and on our land package near our Lucky Friday unit. "Pre-development expense" is defined as costs incurred in the exploration stage that may ultimately benefit production, such as underground ramp development, which are expensed due to the lack of proven and probable reserves.

• Lucky Friday suspension costs of $5.3 million and $9.4 million, along with $1.5 million and $2.4 million in non-cash depreciation expense, in the second quarter and first half of 2018, respectively. Suspension costs were $6.4 million and $7.6 million, along with $1.6 million and $2.0 million in non-cash depreciation, for the second quarter and first half of 2017, respectively. These costs were incurred during the suspension of production resulting from the strike, which started in March 2017.

38

The Greens Creek Segment

Dollars are in thousands (except per ounce and per ton amounts)	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Sales	$	74,605		$	71,339		$	140,455		$	130,189
Cost of sales and other direct production costs		(35,929	)		(40,815	)		(67,150	)		(71,479	)
Depreciation, depletion and amortization		(11,813	)		(13,503	)		(22,452	)		(26,835	)
Cost of sales and other direct production costs and depreciation, depletion and amortization		(47,742	)		(54,318	)		(89,602	)		(98,314	)
Gross profit	$	26,863		$	17,021		$	50,853		$	31,875
Tons of ore milled		208,409			210,788			419,839			407,917
Production:
Silver (ounces)		1,999,791			1,932,047			3,913,023			3,861,344
Gold (ounces)		13,719			12,704			26,837			26,726
Zinc (tons)		14,179			12,966			28,978			26,372
Lead (tons)		5,305			4,420			10,326			9,229
Payable metal quantities sold:
Silver (ounces)		1,723,960			1,922,393			3,184,941			3,361,854
Gold (ounces)		12,783			12,768			21,789			23,058
Zinc (tons)		10,158			8,978			19,950			19,137
Lead (tons)		4,260			4,250			7,183			7,080
Ore grades:
Silver ounces per ton		12.46			12.11			12.08			12.40
Gold ounces per ton		0.10			0.10			0.10			0.10
Zinc percent		7.8	%		7.2	%		8.0	%		7.5	%
Lead percent		3.2	%		2.7	%		3.1	%		2.9	%
Mining cost per ton	$	69.83		$	68.17		$	69.41		$	69.74
Milling cost per ton	$	33.59		$	32.56		$	33.11		$	33.12
Cash Cost, After By-product Credits, Per Silver Ounce (1)	$	(3.47	)	$	1.86		$	(4.22	)	$	1.26
All-In Sustaining Costs ("AISC"), After By-Product Credits, per Silver Ounce (1)	$	4.43		$	8.71		$	2.56		$	6.28

(1) A reconciliation of these non-GAAP measures to cost of sales and other direct production costs and depreciation, depletion and amortization, the most comparable GAAP measure, can be found below in Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP).

The $9.8 million and $19.0 million increases in gross profit for the second quarter and first six months of 2018, respectively, compared to the same periods in 2017 were the result of higher average realized prices for gold, zinc and lead and lower depreciation expense, partially offset by lower average silver prices. The reduction in depreciation and depletion expense is due to an increase in product inventory, which includes deferred depreciation and depletion, the impact of higher reserves on units-of-production depreciation, and expiration of depreciable lives on previously acquired assets.

Mining and milling costs per ton increased slightly in the second quarter of 2018, and decreased slightly in the first half of 2018 compared to the same periods of 2017, primarily as a result of mill throughput that was lower in the second quarter of 2018 and higher in the first half of 2018.

39

The chart below illustrates the factors contributing to the variances in Cash Cost, After By-product Credits, Per Silver Ounce for the second quarter and first six months of 2018 compared to the same periods of 2017.

The following table summarizes the components of Cash Cost, After By-product Credits, per Silver Ounce:

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Cash Cost, Before By-product Credits, per Silver Ounce	$	22.65		$	23.81		$	23.54		$	24.27
By-product credits		(26.12	)		(21.95	)		(27.76	)		(23.01	)
Cash Cost, After By-product Credits, per Silver Ounce	$	(3.47	)	$	1.86		$	(4.22	)	$	1.26

The following table summarizes the components of AISC, After By-product Credits, per Silver Ounce:

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
AISC, Before By-product Credits, per Silver Ounce	$	30.55		$	30.66		$	30.32		$	29.29
By-product credits		(26.12	)		(21.95	)		(27.76	)		(23.01	)
AISC, After By-product Credits, per Silver Ounce	$	4.43		$	8.71		$	2.56		$	6.28

The decrease in Cash Costs, After By-product Credits, per Silver Ounce for the second quarter and first six months of 2018 compared to 2017 was the result of higher by-product credits. The decrease in AISC, After By-Product Credits, per Silver Ounce was due to higher by-product credits, partially offset by higher capital spending.

Mining and milling costs per ounce decreased in the second quarter of 2018 compared to 2017 on a per-ounce basis primarily due higher silver production as a result of higher silver grades. Mining and milling costs per ounce increased in first six months of 2018 compared to 2017 due primarily to higher production costs, partially offset by higher silver production resulting from higher mill throughput.

40

Other cash costs per ounce for the first six months of 2018 were higher compared to 2017 due to higher expense for Alaska mine license tax.

Treatment costs were lower in the second quarter and first six months of 2018 compared to 2017 as a result of improved payment terms from smelters and lower silver prices, as treatment costs include the value of silver not payable to us through the smelting process. The silver not payable to us is either recovered by the smelters through further processing or ultimately not recovered and included in the smelters' waste material.

By-product credits per ounce were higher in the second quarter and first six months of 2018 compared to 2017 due to higher gold, zinc and lead prices, increased zinc and lead production due to higher mill throughput and ore grades, and lower silver production.

The difference between what we report as "production" and "payable metal quantities sold" is attributable to the difference between the quantities of metals contained in the concentrates we produce versus the portion of those metals actually paid for by our customers according to the terms of our sales contracts. Differences can also arise from inventory changes incidental to shipping schedules, or variances in ore grades which impact the amount of metals contained in concentrates produced and sold.

While revenue from zinc, lead and gold by-products is significant, we believe that identification of silver as the primary product of the Greens Creek unit is appropriate because:

• silver has historically accounted for a higher proportion of revenue than any other metal and is expected to do so in the future;

• we have historically presented Greens Creek as a producer primarily of silver, based on the original analysis that justified putting the project into production, and believe that consistency in disclosure is important to our investors regardless of the relationships of metals prices and production from year to year;

• metallurgical treatment maximizes silver recovery;

• the Greens Creek deposit is a massive sulfide deposit containing an unusually high proportion of silver; and

• in most of its working areas, Greens Creek utilizes selective mining methods in which silver is the metal targeted for highest recovery.

Likewise, we believe the identification of gold, lead and zinc as by-product credits is appropriate because of their lower economic value compared to silver and due to the fact that silver is the primary product we intend to produce. In addition, we have not consistently received sufficient revenue from any single by-product metal to warrant classification of such as a co-product.

We periodically review our revenues to ensure that reporting of primary products and by-products is appropriate.  Because we consider zinc, lead and gold to be by-products of our silver production, the values of these metals offset operating costs within our calculations of Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce.

41

The Lucky Friday Segment

Dollars are in thousands (except per ounce and per ton amounts)	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Sales	$	3,287		$	(187	)	$	8,264		$	19,823
Cost of sales and other direct production costs		(1,562	)		—			(5,041	)		(12,109	)
Depreciation, depletion and amortization		(182	)		—			(803	)		(2,433	)
Cost of sales and other direct production costs and depreciation, depletion and amortization		(1,744	)		—			(5,844	)		(14,542	)
Gross profit	$	1,543		$	(187	)	$	2,420		$	5,281
Tons of ore milled		3,447			—			13,006			57,069
Production:
Silver (ounces)		24,687			—			124,467			680,782
Lead (tons)		217			—			823			3,827
Zinc (tons)		120			—			532			2,131
Payable metal quantities sold:
Silver (ounces)		77,125			—			232,867			641,004
Lead (tons)		486			—			1,430			3,596
Zinc (tons)		527			—			840			1,688
Ore grades:
Silver ounces per ton		10.63			—			10.98			12.39
Lead percent		7.28	%		—	%		7.01	%		7.05	%
Zinc percent		3.43	%		—	%		4.43	%		3.99	%
Mining cost per ton	$	89.54		$	—		$	108.08		$	104.72
Milling cost per ton	$	6.15		$	—		$	17.56		$	27.16
Cash Cost, After By-product Credits, per Silver Ounce (1)	$	—		$	—		$	—		$	5.93
AISC, After By-product Credits, per Silver Ounce (1)	$	—		$	—		$	—		$	12.06

(1) A reconciliation of these non-GAAP measures to cost of sales and other direct production costs and depreciation, depletion and amortization, the most comparable GAAP measure, can be found below in Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP).

Gross profit increased by $1.7 million in the second quarter and decreased by $2.9 million in the first six months of 2018, respectively, compared to the same periods in 2017. The variances are primarily due to the lack of metal production in the second quarter of 2017, and limited production during the first half of 2018, as a result of the ongoing strike by unionized employees starting in mid-March 2017, discussed further below. The decrease in gross profit in the first half of 2018 was also due to lower average silver prices and lower silver and lead ore grades. These factors were partially offset by higher average realized lead and zinc prices.

Mining cost per ton increased by 3% in the first half of 2018 compared to the same period in 2017 due primarily to lower ore production as a result of the strike described below. Milling cost per ton in the first half of 2018 decreased by 35%, as the mill only operated when the limited production provided sufficient stockpile. Mining and milling cost per ton for the second quarter and first half of 2018 are not indicative of future operating results under full production, as there was reduced mill throughput during those periods. In addition, costs not directly related to mining and processing ore have been classified as suspension costs during the strike period, and excluded from the calculations of mining and milling cost per ton.

42

The chart below illustrates the factors contributing to the variances in Cash Cost, After By-product Credits, Per Silver Ounce for the first six months of 2017. Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce, are not presented for the second quarter of 2017 and second quarter and first half of 2018, as production was limited due to the strike and results are not comparable to those from the first half of 2017 and are not indicative of future operating results under full production.

     

The following table summarizes the components of Cash Cost, After By-product Credits, per Silver Ounce:

	Six Months Ended June 30,
	2017
Cash Cost, Before By-product Credits, per Silver Ounce	$	22.90
By-product credits		(16.97	)
Cash Cost, After By-product Credits, per Silver Ounce	$	5.93

The following table summarizes the components of AISC, After By-product Credits, per Silver Ounce:

	Six Months Ended June 30,
	2017
AISC, Before By-product Credits, per Silver Ounce	$	29.03
By-product credits		(16.97	)
AISC, After By-product Credits, per Silver Ounce	$	12.06

43

Similar to the Greens Creek segment, the difference between what we report as “production” and “payable metal quantities sold” is due essentially to the difference between the quantities of metals contained in the concentrates we produce versus the portion of those metals actually paid for by our customers according to the terms of our sales contracts.

While value from lead and zinc is significant, we believe that identification of silver as the primary product of the Lucky Friday unit is appropriate because:

• silver has historically accounted for a higher proportion of revenue than any other metal and is expected to do so in the future;

• the Lucky Friday unit is situated in a mining district long associated with silver production; and

• the Lucky Friday unit generally utilizes selective mining methods to target silver production.

Likewise, we believe the identification of lead and zinc as by-product credits is appropriate because of their lower economic value compared to silver and due to the fact that silver is the primary product we intend to produce. In addition, we do not receive sufficient revenue from any single by-product metal to warrant classification of such as a co-product.

We periodically review our revenues to ensure that reporting of primary products and by-products is appropriate.  Because we consider zinc and lead to be by-products of our silver production, the values of these metals offset operating costs within our calculations of Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce.

In 2017, we began work with a third-party equipment manufacturer to develop a remote vein miner ("RVM"), a disc-cutting, continuous-mining machine.  We believe RVMs could be used to eliminate the current drill-and-blast method and increase safety and productivity at Lucky Friday.  We conducted engineering of the machine and ordered long-lead components for the first RVM in late 2017, and we expect to begin commissioning of the machine in 2019.

Many of the employees at our Lucky Friday unit are represented by a union, and the most recent collective bargaining agreement with the union expired on April 30, 2016. On February 19, 2017, the unionized employees voted against our contract offer, and on March 13, 2017 went on strike, and have been on strike since that time. Production at Lucky Friday was suspended from the start of the strike, until limited production by salaried personnel commenced in July 2017. Salaried personnel have continued to perform limited production and capital improvements, which are expected to include development in preparation for arrival of the RVM in 2019. Suspension costs during the strike totaled $9.4 million and $7.6 million in the first half of 2018 and 2017, respectively, which are combined with non-cash depreciation expense of $2.4 million and $2.0 million, respectively, for those periods, in a separate line item on our consolidated statements of operations. These suspension costs are excluded from the calculation of gross profit, Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce, when presented. We cannot predict how long the strike will last or whether an agreement will be reached. As a result of the strike or other related events, operations at Lucky Friday could continue to be disrupted, which could adversely affect our financial condition and results of operations. If the strike continues for a further extended period or it is determined an eventual resolution is unlikely, it may be appropriate in the future to review the carrying value of properties, plants, equipment and mineral interests at Lucky Friday. Under such review, if estimated undiscounted cash flows from Lucky Friday were less than its carrying value, an impairment loss would be recognized for the difference between the carrying value and the estimated fair value. The carrying value of properties, plants, equipment and mineral interests at Lucky Friday as of March 31, 2018 was approximately $428.1 million. However, Lucky Friday has significant identified reserves and mineralized material and a current estimated mine life of approximately 22 years.

On April 30, 2018, we settled with the National Labor Relations Board ("NLRB") an unfair labor practice claim made by the union. As part of the settlement, Hecla Limited rescinded its last, best and final contract offer implemented in March 2017. We do not believe the settlement with the NLRB will resolve any of the key differences in the ongoing labor dispute. On May 4, 2018, we gave notice to the union that the parties to the labor dispute are at impasse, and implemented portions of our revised final offer presented in December 2017.

44

See Note 4 of Notes to Condensed Consolidated Financial Statements (Unaudited) for contingencies related to various accidents and other events occurring at the Lucky Friday mine in prior periods.

The Casa Berardi Segment

Dollars are in thousands (except per ounce and per ton amounts)	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Sales	$	56,103		$	43,822		$	111,651		$	85,534
Cost of sales and other direct production costs		(32,980	)		(32,336	)		(66,057	)		(62,289	)
Depreciation, depletion and amortization		(18,715	)		(11,344	)		(34,825	)		(23,858	)
Cost of sales and other direct production costs and depreciation, depletion and amortization		(51,695	)		(43,680	)		(100,882	)		(86,147	)
Gross profit (loss)	$	4,408		$	142		$	10,769		$	(613	)
Tons of ore milled		349,937			330,109			698,486			623,801
Production:
Gold (ounces)		42,722			33,261			82,899			69,068
Silver (ounces)		12,298			8,477			21,189			17,022
Payable metal quantities sold:
Gold (ounces)		43,000			34,827			84,645			68,993
Silver (ounces)		13,669			10,328			22,504			18,227
Ore grades:
Gold ounces per ton		0.14			0.12			0.14			0.13
Silver ounces per ton		0.04			0.03			0.03			0.03
Mining cost per ton	$	73.61		$	76.83		$	75.28		$	81.42
Milling cost per ton	$	16.71		$	15.50		$	16.34		$	16.33
Cash Cost, After By-product Credits, per Gold Ounce (1)	$	775		$	972		$	800		$	927
AISC, After By-product Credits, per Gold Ounce (1)	$	1,039		$	1,373		$	1,062		$	1,312

(1) A reconciliation of these non-GAAP measures to cost of sales and other direct production costs and depreciation, depletion and amortization, the most comparable GAAP measure, can be found below in Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP).

Gross profit increased by $4.3 million and $11.4 million for the second quarter and first half of 2018, respectively, compared to the same periods of 2017, primarily due to higher gold volume, resulting from increased mill throughput, and higher gold prices. These factors were partially offset by higher cost of sales and depreciation expense, also the result of the higher production.

Mining costs per ton were lower by 4% and 8%, respectively, for the second quarter and first half of 2018 compared to the same periods of last year due primarily to higher ore production. Milling costs per ton were higher by 8% for the second quarter of 2018 and slightly higher for the first half of 2018 compared to the same periods in 2017, in spite of higher ore production, due to higher costs for reagents and other consumables and labor.

45

The chart below illustrates the factors contributing to Cash Cost, After By-product Credits, Per Gold Ounce for the second quarter and first half of 2018 and 2017:

The following table summarizes the components of Cash Cost, After By-product Credits, per Gold Ounce:

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Cash Cost, Before By-product Credits, per Gold Ounce	$	780		$	976		$	804		$	931
By-product credits		(5	)		(4	)		(4	)		(4	)
Cash Cost, After By-product Credits, per Gold Ounce	$	775		$	972		$	800		$	927

The following table summarizes the components of AISC, After By-product Credits, per Gold Ounce:

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
AISC, Before By-product Credits, per Gold Ounce	$	1,044		$	1,377		$	1,066		$	1,316
By-product credits		(5	)		(4	)		(4	)		(4	)
AISC, After By-product Credits, per Gold Ounce	$	1,039		$	1,373		$	1,062		$	1,312

The decrease in Cash Cost, After By-product Credits, per Gold Ounce for the 2018 periods compared to 2017 was primarily due to higher gold production. The decrease in AISC, After By-product Credits, per Gold Ounce was due to higher gold production and lower capital spending, partially offset by higher exploration spending.

The difference between what we report as "production" and "payable metal quantities sold" is mainly attributable to inventory changes incidental to the timing of sales of refined metals and shipping schedules.

We believe the identification of silver as a by-product credit is appropriate at Casa Berardi because of its lower economic value compared to gold and due to the fact that gold is the primary product we intend to produce there. In addition, we do not receive sufficient revenue from silver at Casa Berardi to warrant classification of such as a co-product. Because we consider silver to be a by-product of our gold production at Casa Berardi, the value of silver offsets operating costs within our calculations of Cash Cost, After By-product Credits, per Gold Ounce and AISC, After By-product Credits, per Gold Ounce.

46

The San Sebastian Segment

Dollars are in thousands (except per ounce and per ton amounts)	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Sales	$	13,264		$	19,305		$	26,598		$	41,277
Cost of sales and other direct production costs		(9,969	)		(4,352	)		(15,061	)		(10,302	)
Depreciation, depletion and amortization		(1,107	)		(722	)		(1,791	)		(1,395	)
Cost of sales and other direct production costs and depreciation, depletion and amortization		(11,076	)		(5,074	)		(16,852	)		(11,697	)
Gross profit	$	2,188		$	14,231		$	9,746		$	29,580
Tons of ore milled		37,780			38,478			72,177			75,141
Production:
Silver (ounces)		559,647			866,950			1,071,839			1,617,753
Gold (ounces)		3,872			6,596			8,385			12,880
Payable metal quantities sold:
Silver (ounces)		499,000			756,000			964,905			1,536,750
Gold (ounces)		3,860			5,575			8,048			12,490
Ore grades:
Silver ounces per ton		15.93			23.87			16.01			22.85
Gold ounces per ton		0.12			0.18			0.13			0.18
Mining cost per ton	$	180.12		$	41.63		$	149.14		$	40.16
Milling cost per ton	$	65.46		$	66.97		$	66.25		$	65.29
Cash Cost, After By-product Credits, per Silver Ounce (1)	$	9.79		$	(3.31	)	$	6.46		$	(3.29	)
AISC, After By-product Credits, per Silver Ounce (1)	$	17.15		$	0.06		$	12.95		$	0.24

(1) A reconciliation of this non-GAAP measure to cost of sales and other direct production costs and depreciation, depletion and amortization, the most comparable GAAP measure, can be found below in Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP).

The $12.0 million and $19.8 million decreases in gross profit for the second quarter and first half of 2018 compared to the same periods in 2017 are primarily due to lower silver and gold ore grades, lower mill throughput, and higher costs as a result of transitioning from open pit to underground mining. The ore processed in the second quarter and first half of 2017 came from higher grade deposits mined from shallow open pits. Production from the existing open pits was substantially completed in December 2017; however, during the first half of 2018, a portion of the mill throughput came from ore stockpiled from the open pits. In April 2017, we started development of a new underground portal and work to rehabilitate historic underground infrastructure which should allow us to mine deeper portions of the deposits at San Sebastian. Limited ore production from underground began in January 2018 and continued to increase during the first half of the year. The underground ore production is expected to have lower grades than the open pit.

47

Mining cost per ton were higher by 333% and by 271% for the second quarter and first half of 2018, respectively, compared to the same periods of 2017, while there were slight variances for milling costs. The large increase in mining cost per ton was due to the transition of production from shallow open pits to underground, along with lower ore tonnage.

The chart below illustrates the factors contributing to Cash Cost, After By-product Credits, Per Silver Ounce for the second quarter and first half of 2018 compared to the same periods in 2017:

The following table summarizes the components of Cash Cost, After By-product Credits, per Silver Ounce:

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Cash Cost, Before By-product Credits, per Silver Ounce	$	18.82		$	6.25		$	16.77		$	6.56
By-product credits		(9.03	)		(9.56	)		(10.31	)		(9.85	)
Cash Cost, After By-product Credits, per Silver Ounce	$	9.79		$	(3.31	)	$	6.46		$	(3.29	)

The following table summarizes the components of AISC, After By-product Credits, per Silver Ounce:

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
AISC, Before By-product Credits, per Silver Ounce	$	26.18		$	9.62		$	23.26		$	10.09
By-product credits		(9.03	)		(9.56	)		(10.31	)		(9.85	)
AISC, After By-product Credits, per Silver Ounce	$	17.15		$	0.06		$	12.95		$	0.24

The increase in Cash Cost, After By-product Credits, per Silver Ounce in the second quarter and first half of 2018 compared to the same periods of 2017 was primarily the result of lower silver production and higher mining costs due to the transition from open pit to underground mining. The same factors along with higher exploration spending, partially offset by lower capital costs, resulted in the increase in AISC, After By-product Credits, per Silver Ounce in the second quarter and first half of 2018 compared to the same periods of 2017.

48

The difference between what we report as "production" and "payable metal quantities sold" is mainly attributable to inventory changes incidental to the timing of sales of refined metals and shipping schedules.

We believe the identification of gold as a by-product credit is appropriate at San Sebastian because of its anticipated lower economic value compared to silver over the life of the mine. In addition, we will not receive sufficient revenue from gold at San Sebastian to warrant classification of such as a co-product. Because we consider gold to be a by-product of our silver production at San Sebastian, the value of gold offsets operating costs within our calculations of Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce.

Corporate Matters

Employee Benefit Plans

Our defined benefit pension plans provide a significant benefit to our employees, but also represent a significant liability to us. The liability recorded for the funded status of our plans was $49.4 million and $47.1 million as of June 30, 2018 and December 31, 2017, respectively. In April 2018, we contributed $1.3 million in cash to our defined benefits plans, and expect to contribute an additional $2.6 million in cash or shares of our common stock to our defined benefit plans in 2018. While the economic variables which will determine future funding requirements are uncertain, we expect contributions to continue to be required in future years under current plan provisions, and we periodically examine the plans for affordability and competitiveness. See Note 7 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information.

Income Taxes

Each reporting period we assess our deferred tax balance based on a review of long-range forecasts and quarterly activity.  We recognized a full valuation allowance on our U.S. net deferred tax assets at the end of 2017 based on results of tax law changes. We continue to recognize a net deferred tax liability in Canada. Our net deferred tax asset in Mexico is partially recognized.

The tax provision for the three- and six-month periods ended June 30, 2018 varies from the three- and six-month periods ended June 30, 2017 primarily as a result of the tax reform impacts discussed below, a change in accounting method during 2017 as described in Note 3 of Notes to Condensed Consolidated Financial Statements (Unaudited), and reduced foreign taxes in 2018.

Our U.S. net deferred tax liability at June 30, 2018 totaled $0.3 million, or 0% of total assets, representing no net change from the net deferred tax liability at December 31, 2017. On December 22, 2017, the United States enacted tax reform legislation known as H.R. 1, commonly referred to as the “Tax Cuts and Jobs Act” (the “Act”), resulting in significant modifications to prior law. Among other changes, the Act repealed corporate Alternative Minimum tax ("AMT") and reduced the U.S. corporate income tax rate to 21 percent. As a result of the Act, our AMT credit carryforward of $9.4 million became partially refundable through 2020 and fully refundable in 2021. Due to our U.S tax loss position, the AMT refund is classified as a long-term receivable. However, due to the change relating to the U.S. taxation of foreign earnings under the Act and cumulative tax losses in recent years, we determined it is more likely than not that we will not realize our U.S. net deferred tax assets. At June 30, 2018, we retained a full valuation allowance on U.S. deferred tax assets of $76.0 million.

Our net Canadian deferred tax liability at June 30, 2018 was $112.5 million, a decrease of $9.0 million from the $121.5 million net deferred tax liability at December 31, 2017. The deferred tax liability is primarily related to the excess of the carrying value of the mineral resource assets over the tax bases of those assets for Canadian tax reporting.

Our Mexican net deferred tax asset at June 30, 2018 was $1.5 million, a decrease of $0.3 million from the net deferred tax asset of $1.8 million at December 31, 2017. A $1.6 million valuation allowance remains on deferred tax assets in Mexico.

Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost (“AISC”), Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP)

49

The tables below present reconciliations between the most comparable GAAP measure of cost of sales and other direct production costs and depreciation, depletion and amortization to the non-GAAP measures of Cash Cost, Before By-product Credits, Cash Cost, After By-product Credits, AISC, Before By-product Credits and AISC, After By-product Credits for our operations at the Greens Creek, Lucky Friday, San Sebastian and Casa Berardi units and for the Company for the three- and six-month periods ended June 30, 2018 and 2017.

Cash Cost, After By-product Credits, per Ounce is an important operating statistic that we utilize to measure each mine's operating performance. We have recently started reporting AISC, After By-product Credits, per Ounce which we use as a measure of our mines' net cash flow after costs for exploration, pre-development, reclamation, and sustaining capital. This is similar to the Cash Cost, After By-product Credits, per Ounce non-GAAP measure we report, but also includes on-site exploration, reclamation, and sustaining capital costs. Current GAAP measures used in the mining industry, such as cost of goods sold, do not capture all the expenditures incurred to discover, develop and sustain silver and gold production. Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce also allow us to benchmark the performance of each of our mines versus those of our competitors. As a primary silver mining company, we also use these statistics on an aggregate basis - aggregating the Greens Creek, Lucky Friday and San Sebastian mines - to compare our performance with that of other primary silver mining companies. With regard to Casa Berardi, we use Cash Cost, After By-product Credits, per Gold Ounce and AISC, After By-product Credits, per Gold Ounce to compare its performance with other gold mines. Similarly, these statistics are useful in identifying acquisition and investment opportunities as they provide a common tool for measuring the financial performance of other mines with varying geologic, metallurgical and operating characteristics.

Cash Cost, Before By-product Credits and AISC, Before By-product Credits include all direct and indirect operating cash costs related directly to the physical activities of producing metals, including mining, processing and other plant costs, third-party refining expense, on-site general and administrative costs, royalties and mining production taxes. AISC, Before By-product Credits for each mine also includes on-site exploration, reclamation, and sustaining capital costs. AISC, Before By-product Credits for our consolidated silver properties also includes corporate costs for general and administrative expense, exploration and sustaining capital projects. By-product credits include revenues earned from all metals other than the primary metal produced at each unit. As depicted in the tables below, by-product credits comprise an essential element of our silver unit cost structure, distinguishing our silver operations due to the polymetallic nature of their orebodies.

Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce provide management and investors an indication of operating cash flow, after consideration of the average price received from production. We also use these measurements for the comparative monitoring of performance of our mining operations period-to-period from a cash flow perspective.  Cash Cost, After By-product Credits, per Ounce is a measure developed by precious metals companies (including the Silver Institute) in an effort to provide a uniform standard for comparison purposes. There can be no assurance, however, that these non-GAAP measures as we report them are the same as those reported by other mining companies.

The Casa Berardi section below reports Cash Cost, After By-product Credits, per Gold Ounce and AISC, After By-product Credits, per Gold Ounce for the production of gold, its primary product, and by-product revenues earned from silver, which is a by-product at Casa Berardi. Only costs and ounces produced relating to units with the same primary product are combined to represent Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce. Thus, the gold produced at our Casa Berardi unit is not included as a by-product credit when calculating Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for the total of Greens Creek, Lucky Friday and San Sebastian, our combined silver properties.

50

In thousands (except per ounce amounts)	Three Months Ended June 30, 2018
	Greens Creek			Lucky Friday(2)			San Sebastian			Corporate(3)		Total Silver			Casa Berardi (Gold)			Total
Cost of sales and other direct production costs and depreciation, depletion and amortization	$	47,742			1,744		$	11,076				$	60,562		$	51,695		$	112,257
Depreciation, depletion and amortization		(11,813	)		(182	)		(1,107	)				(13,102	)		(18,715	)		(31,817	)
Treatment costs		9,481			55			116					9,652			559			10,211
Change in product inventory		321			(1,160	)		769					(70	)		(78	)		(148	)
Reclamation and other costs		(449	)		(58	)		(319	)				(826	)		(139	)		(965	)
Exclusion of Lucky Friday costs		—			(399	)		—					(399	)		—			(399	)
Cash Cost, Before By-product Credits (1)		45,282			—			10,535					55,817			33,322			89,139
Reclamation and other costs		850						103					953			140			1,093
Exploration		778						2,334			434		3,546			1,330			4,876
Sustaining capital		14,183						1,680			517		16,380			9,809			26,189
General and administrative											9,787		9,787						9,787
AISC, Before By-product Credits (1)		61,093			—			14,652					86,483			44,601			131,084
By-product credits:
Zinc		(27,492	)		—								(27,492	)					(27,492	)
Gold		(15,716	)		—			(5,057	)				(20,773	)					(20,773	)
Lead		(9,022	)		—								(9,022	)					(9,022	)
Silver																(201	)		(201	)
Total By-product credits		(52,230	)		—			(5,057	)				(57,287	)		(201	)		(57,488	)
Cash Cost, After By-product Credits	$	(6,948	)	$	—		$	5,478				$	(1,470	)	$	33,121		$	31,651
AISC, After By-product Credits	$	8,863		$	—		$	9,595				$	29,196		$	44,400		$	73,596
Divided by ounces produced		2,000			—			560					2,560			43
Cash Cost, Before By-product Credits, per Ounce	$	22.65		$	—		$	18.82				$	21.81		$	779.96
By-product credits per ounce		(26.12	)		—			(9.03	)				(22.38	)		(4.70	)
Cash Cost, After By-product Credits, per Ounce	$	(3.47	)	$	—		$	9.79				$	(0.57	)	$	775.26
AISC, Before By-product Credits, per Ounce	$	30.55		$	—		$	26.18				$	33.78		$	1,043.97
By-product credits per ounce		(26.12	)		—			(9.03	)				(22.38	)		(4.70	)
AISC, After By-product Credits, per Ounce	$	4.43		$	—		$	17.15				$	11.40		$	1,039.27

51

In thousands (except per ounce amounts)	Three Months Ended June 30, 2017
	Greens Creek			Lucky Friday(2)		San Sebastian			Corporate(3)		Total Silver			Casa Berardi (Gold)			Total
Cost of sales and other direct production costs and depreciation, depletion and amortization	$	54,318		$	—	$	5,074				$	59,392		$	43,680		$	103,072
Depreciation, depletion and amortization		(13,503	)		—		(722	)				(14,225	)		(11,344	)		(25,569	)
Treatment costs		11,423			—		259					11,682			554			12,236
Change in product inventory		(5,542	)		—		815					(4,727	)		(212	)		(4,939	)
Reclamation and other costs		(694	)		—		(5	)				(699	)		(212	)		(911	)
Cash Cost, Before By-product Credits (1)		46,002			—		5,421					51,423			32,466			83,889
Reclamation and other costs		667			—		117					784			213			997
Exploration		1,117			—		1,957			452		3,526			1,071			4,597
Sustaining capital		11,451			—		845			256		12,552			12,059			24,611
General and administrative										10,309		10,309						10,309
AISC, Before By-product Credits (1)		59,237			—		8,340					78,594			45,809			124,403
By-product credits:
Zinc		(21,647	)		—							(21,647	)					(21,647	)
Gold		(13,917	)				(8,287	)				(22,204	)					(22,204	)
Lead		(6,847	)		—							(6,847	)					(6,847	)
Silver															(142	)		(142	)
Total By-product credits		(42,411	)		—		(8,287	)				(50,698	)		(142	)		(50,840	)
Cash Cost, After By-product Credits	$	3,591		$	—	$	(2,866	)			$	725		$	32,324		$	33,049
AISC, After By-product Credits	$	16,826		$	—	$	53				$	27,896		$	45,667		$	73,563
Divided by ounces produced		1,932			—		867					2,799			33
Cash Cost, Before By-product Credits, per Ounce	$	23.81		$	—	$	6.25				$	18.37		$	976.07
By-product credits per ounce		(21.95	)		—		(9.56	)				(18.11	)		(4.25	)
Cash Cost, After By-product Credits, per Ounce	$	1.86		$	—	$	(3.31	)			$	0.26		$	971.82
AISC, Before By-product Credits, per Ounce	$	30.66		$	—	$	9.62				$	28.08		$	1,377.21
By-product credits per ounce		(21.95	)		—		(9.56	)				(18.11	)		(4.25	)
AISC, After By-product Credits, per Ounce	$	8.71		$	—	$	0.06				$	9.97		$	1,372.96

52

In thousands (except per ounce amounts)	Six Months Ended June 30, 2018
	Greens Creek			Lucky Friday(2)			San Sebastian			Corporate(3)		Total Silver			Casa Berardi (Gold)			Total
Cost of sales and other direct production costs and depreciation, depletion and amortization	$	89,602		$	5,844		$	16,852				$	112,298		$	100,882		$	213,180
Depreciation, depletion and amortization		(22,452	)		(803	)		(1,791	)				(25,046	)		(34,825	)		(59,871	)
Treatment costs		20,869			627			320					21,816			1,094			22,910
Change in product inventory		5,475			(2,182	)		3,407					6,700			(179	)		6,521
Reclamation and other costs		(1,360	)		(103	)		(814	)				(2,277	)		(281	)		(2,558	)
Exclusion of Lucky Friday costs		—			(3,383	)		—					(3,383	)		—			(3,383	)
Cash Cost, Before By-product Credits (1)		92,134			—			17,974					110,108			66,691			176,799
Reclamation and other costs		1,699			—			209					1,908			283			2,191
Exploration		1,138			—			4,646			878		6,662			2,520			9,182
Sustaining capital		23,665			—			2,110			634		26,409			18,876			45,285
General and administrative											17,522		17,522						17,522
AISC, Before By-product Credits (1)		118,636			—			24,939					162,609			88,370			250,979
By-product credits:
Zinc		(59,634	)		—								(59,634	)					(59,634	)
Gold		(31,008	)					(11,055	)				(42,063	)					(42,063	)
Lead		(17,996	)		—								(17,996	)					(17,996	)
Silver																(349	)		(349	)
Total By-product credits		(108,638	)		—			(11,055	)				(119,693	)		(349	)		(120,042	)
Cash Cost, After By-product Credits	$	(16,504	)	$	—		$	6,919				$	(9,585	)	$	66,342		$	56,757
AISC, After By-product Credits	$	9,998		$	—		$	13,884				$	42,916		$	88,021		$	130,937
Divided by ounces produced		3,913			—			1,072					4,985			83
Cash Cost, Before By-product Credits, per Ounce	$	23.54		$	—		$	16.77				$	22.09		$	804.44
By-product credits per ounce		(27.76	)		—			(10.31	)				(24.01	)		(4.17	)
Cash Cost, After By-product Credits, per Ounce	$	(4.22	)	$	—		$	6.46				$	(1.92	)	$	800.27
AISC, Before By-product Credits, per Ounce	$	30.32		$	—		$	23.26				$	32.62		$	1,065.95
By-product credits per ounce		(27.76	)		—			(10.31	)				(24.01	)		(4.17	)
AISC, After By-product Credits, per Ounce	$	2.56		$	—		$	12.95				$	8.61		$	1,061.78

53

In thousands (except per ounce amounts)	Six Months Ended June 30, 2017
	Greens Creek			Lucky Friday(2)			San Sebastian			Corporate(3)		Total Silver			Casa Berardi (Gold)			Total
Cost of sales and other direct production costs and depreciation, depletion and amortization	$	98,314		$	14,542		$	11,697				$	124,553		$	86,147		$	210,700
Depreciation, depletion and amortization		(26,835	)		(2,433	)		(1,395	)				(30,663	)		(23,858	)		(54,521	)
Treatment costs		25,554			3,817			484					29,855			1,092			30,947
Change in product inventory		(2,277	)		(149	)		435					(1,991	)		1,169			(822	)
Reclamation and other costs		(1,080	)		(181	)		(595	)				(1,856	)		(230	)		(2,086	)
Cash Cost, Before By-product Credits (1)		93,676			15,596			10,626					119,898			64,320			184,218
Reclamation and other costs		1,333			179			234					1,746			230			1,976
Exploration		1,395			1			3,489			830		5,715			1,868			7,583
Sustaining capital		16,685			3,990			1,977			1,170		23,822			24,470			48,292
General and administrative											19,515		19,515						19,515
AISC, Before By-product Credits (1)		113,089			19,766			16,326					170,696			90,888			261,584
By-product credits:
Zinc		(45,426	)		(4,060	)							(49,486	)					(49,486	)
Gold		(28,769	)					(15,944	)				(44,713	)					(44,713	)
Lead		(14,629	)		(7,496	)							(22,125	)					(22,125	)
Silver																(289	)		(289	)
Total By-product credits		(88,824	)		(11,556	)		(15,944	)				(116,324	)		(289	)		(116,613	)
Cash Cost, After By-product Credits	$	4,852		$	4,040		$	(5,318	)			$	3,574		$	64,031		$	67,605
AISC, After By-product Credits	$	24,265		$	8,210		$	382				$	54,372		$	90,599		$	144,971
Divided by ounces produced		3,861			681			1,618					6,160			69
Cash Cost, Before By-product Credits, per Ounce	$	24.27		$	22.90		$	6.56				$	19.46		$	931.26
By-product credits per ounce		(23.01	)		(16.97	)		(9.85	)				(18.88	)		(4.18	)
Cash Cost, After By-product Credits, per Ounce	$	1.26		$	5.93		$	(3.29	)			$	0.58		$	927.08
AISC, Before By-product Credits, per Ounce	$	29.29		$	29.03		$	10.09				$	27.71		$	1,315.92
By-product credits per ounce		(23.01	)		(16.97	)		(9.85	)				(18.88	)		(4.18	)
AISC, After By-product Credits, per Ounce	$	6.28		$	12.06		$	0.24				$	8.83		$	1,311.74

(1) Includes all direct and indirect operating costs related directly to the physical activities of producing metals, including mining, processing and other plant costs, third-party refining and marketing expense, on-site general and administrative costs, royalties and mining production taxes, after by-product revenues earned from all metals other than the primary metal produced at each unit. AISC, Before By-product Credits also includes on-site exploration, reclamation, and sustaining capital costs.

(2) The unionized employees at Lucky Friday have been on strike since March 13, 2017, and production at Lucky Friday has been limited since that time. As a result, for the second quarter of 2017 and first half of 2018, Cash Cost, Before By-product Credits, Cash Cost, After By-product Credits, AISC, Before By-product Credits, and AISC, After By-product Credits are not presented for Lucky Friday, and costs related to the limited production at Lucky Friday are excluded from the calculation of Cash Cost, Before By-product Credits, Cash Cost, After By-product Credits, AISC, Before By-product Credits, and AISC, After By-product Credits for our combined silver operations.

(3) AISC, Before By-product Credits for our consolidated silver properties includes corporate costs for general and administrative expense, exploration and sustaining capital.

54

Financial Liquidity and Capital Resources

Our liquid assets include (in millions):

	June 30, 2018		December 31, 2017
Cash and cash equivalents held in U.S. dollars	$	218.6	$	168.0
Cash and cash equivalents held in foreign currency		21.1		18.1
Total cash and cash equivalents		239.7		186.1
Marketable debt securities - current		5.6		33.8
Marketable equity securities - non-current		7.4		7.6
Total cash, cash equivalents and investments	$	252.7	$	227.5

Cash and cash equivalents increased by $53.6 million in the first six months of 2018. Cash held in foreign currencies represents balances in Canadian dollars and Mexican pesos, with the $3.0 million increase in the first half of 2018 resulting from increases in both currencies held. Current marketable debt securities decreased by $28.2 million (discussed below), and the value of non-current marketable equity securities decreased by $0.2 million (see Note 2 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information).

As further discussed in Note 13 of Notes to Condensed Consolidated Financial Statements (Unaudited), on July 20, 2018, we completed the acquisition Klondex for total consideration of approximately $407.7 million, made up of $252.5 million for the issuance of shares of our common stock and warrants to purchase shares of our common stock and $155.2 million in cash. Klondex had cash and cash equivalents not relating to their Canadian assets of approximately $11.9 million and $35.0 million drawn on their revolving credit facility which transferred to us as part of the acquisition. We paid off the amount drawn on their revolving credit facility in July 2018.

As discussed in Note 9 of Notes to Condensed Consolidated Financial Statements (Unaudited), on April 12, 2013, we completed an offering of Senior Notes in the total principal amount of US$500 million, which have a total principal balance of $506.5 million as of June 30, 2018. The Senior Notes are due May 1, 2021 and bear interest at a rate of 6.875% per year from the most recent payment date to which interest has been paid or provided for.  In addition, in March 2018 we entered into a note purchase agreement pursuant to which we issued our Series 2018-A Senior Notes due May 1, 2021 (the “RQ Notes”) for total principal of CAD$40 million (approximately USD$30.8 million at the time of the transaction) to Ressources Québec. The RQ Notes bear interest at a rate of 4.68% per year. Interest on the Senior Notes and RQ Notes is payable on May 1 and November 1 of each year, commencing November 1, 2013 and May 1, 2018, respectively, and we have made all interest payments payable to date. Also, in July we entered into a new $200 million revolving credit facility, which we expect to increase to $250 million upon meeting certain conditions, including adding certain subsidiaries of Klondex as borrowers under the credit facility and pledging the assets of those subsidiaries as additional collateral under the credit facility. We have drawn funds on the facility totaling $47.0 million which is outstanding as of the filing date of this report (see Note 13 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information). Interest is payable on amounts drawn from the revolving credit facility at a rate of between 2.25% and 3.25% over the London Interbank Offer Rate, or between 1.25% and 2.25% over an alternative base rate, with interest payable on March 31, June 30, September 30, and December 31 of each year.

As further discussed in the Lucky Friday Segment section above, the union employees at Lucky Friday have been on strike since March 13, 2017, and production at Lucky Friday has been limited since that time. We cannot predict how long the strike will last or whether an agreement will be reached. As a result of the strike or other related events, operations at Lucky Friday could continue to be disrupted, which could adversely affect our financial condition and results of operations.

55

As discussed in Note 8 of Notes to Condensed Consolidated Financial Statements (Unaudited), in February 2016 we entered into an equity distribution agreement under which we may issue and sell shares of our common stock from time to time having an aggregate offering price of up to $75 million, with the net proceeds available for general corporate purposes. Whether or not we engage in sales from time to time may depend on a variety of factors, including share price, our cash resources, customary black-out restrictions, and whether we have any material inside information, and the agreement can be terminated by us at any time. As of June 30, 2018, we had sold 4,608,847 shares through this program for net proceeds of $17.7 million.

Pursuant to our common stock dividend policy described in Note 8 of Notes to Condensed Consolidated Financial Statements (Unaudited), our Board of Directors declared and paid dividends on common stock totaling $2.0 million in the first six months of each of 2018 and 2017. On August 8, 2018, our Board of Directors declared a dividend on common stock totaling $1.0 million payable in September 2018. Our dividend policy has a silver-price-linked component which ties the amount of declared common stock dividends to our realized silver price for the preceding quarter. Another component of our common stock dividend policy anticipates paying an annual minimum dividend. The declaration and payment of dividends on common stock is at the sole discretion of our board of directors, and there can be no assurance that we will continue to declare and pay common stock dividends in the future.

On May 8, 2012, we announced that our board of directors approved a stock repurchase program.  Under the program, we are authorized to repurchase up to 20 million shares of our outstanding common stock from time to time in open market or privately negotiated transactions, depending on prevailing market conditions and other factors.  The repurchase program may be modified, suspended or discontinued by us at any time. Whether or not we engage in repurchases from time to time may depend on a variety of factors, including not only price and cash resources, but customary black-out restrictions, whether we have any material inside information, limitations on share repurchases or cash usage that may be imposed by our credit agreement or in connection with issuances of securities, alternative uses for cash, applicable law, and other investment opportunities from time to time. As of June 30, 2018, 934,100 shares have been purchased in prior periods at an average price of $3.99 per share, leaving 19.1 million shares that may yet be purchased under the program. The closing price of our common stock at August 7, 2018, was $2.92 per share.

We may defer some capital investment and/or exploration and pre-development activities, engage in asset sales or secure additional capital if necessary to maintain liquidity. We also may pursue additional acquisition opportunities, which could require additional equity issuances or other forms of financing. There can be no assurance that such financing will be available to us.

As a result of our current cash balances, the performance of our current and expected operations, current metals prices, proceeds from potential at-the-market sales of common stock, and availability of approximately $150 million of our $200 million revolving credit facility, which we expect to increase to $250 million upon meeting certain conditions, we believe our cash, cash equivalents, investments, projected cash from operations, and availability of financing (including equity issuances), if needed, will be adequate to meet our obligations and other potential cash requirements during the next 12 months. Our obligations and other uses of cash may include, but are not limited to: debt service obligations related to the Senior Notes, RQ Notes and revolving credit facility, capital expenditures at our operations, potential acquisitions of other mining companies or properties, regulatory matters, litigation, potential repurchases of our common stock under the program described above, and payment of dividends on common stock, if declared by our board of directors.  We currently estimate that in 2018, a total of between $140 million and $145 million will be spent on capital expenditures, primarily for equipment, infrastructure, and development at our mines, including $50.3 million incurred in the first half of 2018.  We also estimate that exploration and pre-development expenditures will total approximately $40 million in 2018, including $17.6 million already incurred as of June 30, 2018. In addition, we expect research and development expenditures for our current projects in 2018 to total between $6 million and $10 million, including $3.8 million already incurred as of June 30, 2018. However, capital, exploration, pre-development expenditures, and research and development may change based upon our financial position, metals prices, and other considerations. Our ability to fund the activities described above will depend on our operating performance, metals prices, our ability to estimate revenues and costs, sources of liquidity available to us, and other factors. A sustained downturn in metals prices or significant increase in operational or capital costs, other uses of cash, or other factors beyond our control could impact our plans.

56

		Six Months Ended
		June 30, 2018		June 30, 2017
Cash provided by operating activities (in millions)	$	47.0	$	45.8

Cash provided by operating activities in the first half of 2018 increased by $0.2 million compared to the same period in 2017, with the impact of working capital changes offset by lower net income, as adjusted for non-cash items, resulting primarily from reduced silver and lead production and lower silver prices, partially offset by higher gold production and higher gold, zinc and lead prices.

		Six Months Ended
		June 30, 2018			June 30, 2017
Cash used in investing activities (in millions)	$	(15.2	)	$	(54.7	)

During the first half of 2018, we invested $43.3 million in capital expenditures, not including $7.0 million in non-cash capital lease additions, a decrease of $2.7 million compared to the same period in 2017 primarily due to lower expenditures at Lucky Friday, Casa Berardi and San Sebastian, partially offset by higher expenditures at Greens Creek and for corporate activities.  In the first half of 2018, we purchased bonds having maturities of greater than 90 days and less than 365 days having a cost basis of $31.2 million, and bonds valued at $59.3 million matured during the first half of 2018, compared to purchases of bond having a cost basis of $23.3 million and maturities of bonds valued at $14.4 million in the first half of 2017.

		Six Months Ended
		June 30, 2018		June 30, 2017
Cash provided by financing activities (in millions)	$	22.3	$	1.1

In March 2018, we received net proceeds of $31.0 million from the issuance of the RQ Notes, as discussed above. During the first six months of 2017, we received $9.6 million in net proceeds from the sale of shares of our common stock under the equity distribution agreement discussed above. We made repayments on our capital leases of $3.8 million and $3.2 million in the six-month periods ended June 30, 2018 and 2017, respectively. In the first half of 2017, we also made repayments of debt totaling $0.5 million. During the first six months of each of 2018 and 2017, we paid cash dividends on our common stock totaling $2.0 million, and cash dividends of $0.3 million on our Series B Preferred Stock during each of those periods. We acquired treasury shares for $2.7 million and $2.5 million in the first half of 2018 and 2017, respectively, resulting from our employees' elections to satisfy their tax withholding obligations related to incentive compensation paid in stock through net share settlement. See Note 8 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information.

57

Contractual Obligations, Contingent Liabilities and Commitments

The table below presents our fixed, non-cancelable contractual obligations and commitments primarily related to our Senior Notes, RQ Notes, outstanding purchase orders, certain capital expenditures, our credit facility and lease arrangements as of June 30, 2018 (in thousands):

	Payments Due By Period
	Less than 1 year		1-3 years		4-5 years		More than 5 years		Total
Purchase obligation (1)	$	10,250		—		—	$	—	$	10,250
Commitment fees (2)		500		567		—		—		1,067
Contractual obligations (3)		4,071		—		—		—		4,071
Capital lease commitments (4)		6,558		7,617		1,640		—		15,815
Operating lease commitments (5)		3,838		5,754		3,988		—		13,580
Supplemental executive retirement plan (6)		508		1,394		1,841		5,083		8,826
Defined benefit pension plans (6)		2,596		—		—		—		2,596
Senior notes (7)		34,822		570,340		—		—		605,162
RQ Notes (8)		1,422		32,982		—		—		34,404
Total contractual cash obligations	$	64,565	$	618,654	$	7,469	$	5,083	$	695,771

(1) Consists of open purchase orders of approximately $7.4 million at the Greens Creek unit, $2.1 million at the Casa Berardi unit, and $0.7 million at the Lucky Friday unit.  

(2) At June 30, 2018, we had a $100 million revolving credit agreement under which we were required to pay a standby fee of 0.5% per annum on undrawn amounts under the revolving credit agreement. With the exception of $3.0 million in letters of credit outstanding, there was no amount drawn under the revolving credit agreement as of June 30, 2018, and the amounts in the table above reflect that there were no amounts drawn as of that date.  However, in July 2018 we entered into a new $200 million revolving credit facility, which we expect to increase to $250 million upon meeting certain conditions, including adding certain subsidiaries of Klondex as borrowers under the credit facility and pledging the assets of those subsidiaries as additional collateral under the credit facility. We have since drawn a total of $47.0 million which is outstanding as of the date of the filing date of this report. We are also required to pay a 0.5% standby fee per annum on undrawn amounts under the new revolving credit facility. For more information on our credit facilities, see Note 9 and Note 13 of Notes to Condensed Consolidated Financial Statements (Unaudited).

(3) As of June 30, 2018, we were committed to approximately $4.1 million for various items at Greens Creek.

(4) Includes scheduled capital lease payments of $7.9 million, $2.4 million, and $5.5 million (including interest), respectively, for equipment at our Greens Creek, Lucky Friday and Casa Berardi units, respectively.  These leases have fixed payment terms and contain bargain purchase options at the end of the lease periods (see Note 9 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information).

(5) We enter into operating leases in the normal course of business.  Substantially all lease agreements have fixed payment terms based on the passage of time.  Some lease agreements provide us with the option to renew the lease or purchase the leased property.  Our future operating lease obligations would change if we exercised these renewal options and if we entered into additional operating lease arrangements.

(6) We sponsor defined benefit pension plans covering substantially all U.S. employees and provide certain post-retirement benefits for qualifying retired employees, along with a supplemental executive retirement plan. These amounts represent our estimate of the future funding requirements for these plans.  We believe we will have funding requirements related to our defined benefit plans beyond one year; however, such obligations are not fixed in nature and are difficult to estimate, as they involve significant assumptions. See Note 7 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information.

58

(7) On April 12, 2013, we completed an offering of $500 million in aggregate principal amount of our Senior Notes due May 1, 2021. The Senior Notes bear interest at a rate of 6.875% per year from the date of original issuance or from the most recent payment date to which interest has been paid or provided for.  Interest on the Senior Notes is payable on May 1 and November 1 of each year, commencing November 1, 2013, and we have made all interest payments payable to date. Since the initial offering, we have issued an additional $6.5 million in aggregate principal amount of the Senior Notes to fund obligations under our defined benefit pension plan. See Note 9 of Notes to Condensed Consolidated Financial Statements (Unaudited) for more information.

(8) On March 5, 2018, we entered into a note purchase agreement pursuant to which we issued CAD$40 million (approximately USD$30.8 million at the time of the transaction) in aggregate principal amount of our Series 2018-A Senior Notes due May 1, 2021 (the “RQ Notes”) to Ressources Québec, a subsidiary of Investissment Québec, a financing arm of the Québec government. The RQ Notes bear interest at a rate of 4.68% per year, payable on May 1 and November 1 of each year, commencing May 1, 2018, and we have made all interest payments payable to date.

We record liabilities for costs associated with mine closure, reclamation of land and other environmental matters.  At June 30, 2018, our liabilities for these matters totaled $86.4 million. Future expenditures related to closure, reclamation and environmental expenditures at our sites are difficult to estimate, although we anticipate we will incur expenditures relating to these obligations over the next 30 years. For additional information relating to our environmental obligations, see Note 4 of Notes to Condensed Consolidated Financial Statements (Unaudited).

Off-Balance Sheet Arrangements

At June 30, 2018, we had no existing off-balance sheet arrangements, as defined under SEC regulations, that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Critical Accounting Estimates

Our significant accounting policies are described in Part IV, Note 1 of Notes to Consolidated Financial Statements in our annual report filed on Form 10-K for the year ended December 31, 2017. As described in Note 1 of our annual report, we are required to make estimates and assumptions that affect the reported amounts and related disclosures of assets, liabilities, revenue, and expenses. Our estimates are based on our experience and our interpretation of economic, political, regulatory, and other factors that affect our business prospects. Actual results may differ significantly from our estimates.

We believe that our most critical accounting estimates are related to future metals prices; obligations for environmental, reclamation, and closure matters; mineral reserves; and accounting for business combinations, as they require us to make assumptions that are highly uncertain at the time the accounting estimates are made and changes in them are reasonably likely to occur from period to period. Management has discussed the development and selection of these critical accounting estimates with the Audit Committee of our Board of Directors, and the Audit Committee has reviewed the disclosures presented below. In addition, there are other items within our financial statements that require estimation, but are not deemed to be critical. However, changes in estimates used in these and other items could have a material impact on our financial statements.

59

Future Metals Prices

Metals prices are key components in estimates that determine the valuation of some of our significant assets and liabilities, including properties, plants and equipment, deferred tax assets, and certain accounts receivable. Metals prices are also an important component in the estimation of reserves.  As shown under Part I, Item 1. – Business in our annual report filed on Form 10-K for the year ended December 31, 2017, metals prices have historically been volatile. Silver demand arises from investment demand, particularly in exchange-traded funds, industrial demand, and consumer demand. Gold demand arises primarily from investment and consumer demand.  Investment demand for silver and gold can be influenced by several factors, including:  the value of the U.S. dollar and other currencies, changing U.S. budget deficits, widening availability of exchange-traded funds, interest rate levels, the health of credit markets, and inflationary expectations.  Uncertainty related to the political environment in the U.S., Britain's exit from the European Union and a global economic recovery, including recent uncertainty in China, could result in continued investment demand for precious metals.  Industrial demand for silver is closely linked to world Gross Domestic Product growth and industrial fabrication levels, as it is difficult to substitute for silver in industrial fabrication.  Consumer demand is driven significantly by demand for jewelry and other retail products. We believe that long-term industrial and economic trends, including urbanization and growth of the middle class in countries such as China and India, will result in continued consumer demand for silver and gold and industrial demand for silver.  However, China has recently experienced a lower rate of economic growth which could continue in the near term. There can be no assurance whether these trends will continue or how they will impact prices of the metals we produce. In the past, we have recorded impairments to our asset carrying value because of low prices, and we can offer no assurance that prices will either remain at their current levels or increase.

Processes supporting valuation of our assets and liabilities that are most significantly affected by prices include analysis of asset carrying values, depreciation, reserves, and deferred income taxes. On an annual basis - and more frequently if circumstances warrant - we examine our depreciation rates, reserve estimates, and the valuation allowances on our deferred tax assets. We examine the carrying values of our assets as changes in facts and circumstances warrant.  In our evaluation of carrying values and deferred taxes, we apply several pricing views to our forecasting model, including current prices, analyst price estimates, forward-curve prices, and historical prices (see Mineral Reserves, below, regarding prices used for reserve estimates). Using applicable accounting guidance and our view of metals markets, we use the probability-weighted average of the various methods to determine whether the values of our assets are fairly stated, and to determine the level of valuation allowances, if any, on our deferred tax assets.  In addition, estimates of future metals prices are used in the valuation of certain assets in the determination of the purchase price allocations for our acquisitions (see Business Combinations below).

 Sales of concentrates sold directly to customers are recorded as revenues when title and risk of loss transfer to the customer (generally at the time of shipment) using estimated forward metals prices for the estimated month of settlement. Due to the time elapsed between shipment of concentrates to the customer and final settlement with the customer, we must estimate the prices at which sales of our metals will be settled. Previously recorded sales and trade accounts receivable are adjusted to estimated settlement prices until final settlement by the customer. Changes in metals prices between shipment and final settlement result in changes to revenues and accounts receivable previously recorded upon shipment.  As a result, our trade accounts receivable balances related to concentrate sales are subject to changes in metals prices until final settlement occurs.  For more information, see part N. Revenue Recognition of Note 1 of Notes to Consolidated Financial Statements in our annual report filed on Form 10-K for the year ended December 31, 2017.

We utilize financially-settled forward contracts to manage our exposure to changes in prices for silver, gold, zinc and lead.  See Item 3. – Quantitative and Qualitative Disclosures About Market Risk - Commodity-Price Risk Management below for more information on our contract programs.  These contracts do not qualify for hedge accounting and are therefore marked-to-market through earnings each period.  Changes in silver, gold, zinc and lead prices between the dates that the contracts are entered into and their settlements will result in changes to the fair value asset or liability associated with the contracts, with a corresponding gain or loss recognized in earnings.

Obligations for Environmental, Reclamation and Closure Matters

Accrued reclamation and closure costs can represent a significant and variable liability on our balance sheet. We have estimated our liabilities under appropriate accounting guidance, and on at least an annual basis - and more frequently if warranted - management reviews our liabilities with our Audit Committee. However, the ranges of liability could exceed the liabilities recognized. If substantial damages were awarded, claims were settled, or remediation costs incurred in excess of our accruals, our financial results or condition could be materially adversely affected.

60

Mineral Reserves

Critical estimates are inherent in the process of determining our reserves. Our reserves are affected largely by our assessment of future metals prices, as well as by engineering and geological estimates of ore grade, accessibility and production cost. Metals prices are estimated at long-term averages, as described in Part I, Item 2. – Properties in our annual report filed on Form 10-K for the year ended December 31, 2017. Our assessment of reserves occurs at least annually, and periodically utilizes external audits.

Reserves are a key component in the valuation of our properties, plants and equipment. Reserve estimates are used in determining appropriate rates of units-of-production depreciation, with net book value of many assets depreciated over remaining estimated reserves. Reserves are also a key component in forecasts, with which we compare future cash flows to current asset values in an effort to ensure that carrying values are reported appropriately. Our forecasts are also used in determining the level of valuation allowances on our deferred tax assets. Reserves also play a key role in the valuation of certain assets in the determination of the purchase price allocations for acquisitions. Annual reserve estimates are also used to determine conversions of mineral assets beyond the known reserve resulting from business combinations to depreciable reserves, in periods subsequent to the business combinations (see Business Combinations below).  Reserves are a culmination of many estimates and are not guarantees that we will recover the indicated quantities of metals or that we will do so at a profitable level.

Business Combinations

We are required to allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date.  The valuation of assets acquired and liabilities assumed requires management to make significant estimates and assumptions, especially with respect to long-lived assets (including mineral assets beyond the known reserve). These estimates include future metals prices and mineral reserves, as discussed above.  Management may also be required to make estimates related to the valuation of deferred tax assets or liabilities as part of the purchase price allocation for business combinations. In some cases, we use third-party appraisers to determine the fair values of property and other identifiable assets. In addition, costs related to business combinations are included in earnings as incurred, and our financial results for periods in which business combinations are pursued could be adversely affected as a result.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

The following discussion about our risk management activities includes forward-looking statements that involve risk and uncertainties, as well as summarizes the financial instruments held by us at June 30, 2018, which are sensitive to changes in commodity prices and foreign exchange rates and are not held for trading purposes.  Actual results could differ materially from those projected in the forward-looking statements.  In the normal course of business, we also face risks that are either non-financial or non-quantifiable (See Part I, Item 1A. – Risk Factors of our annual report filed on Form 10-K for the year ended December 31, 2017, as updated in Part II, Item 1A – Risk Factors in our quarterly report filed on Form 10-Q for the period ended March 31, 2018 and this quarterly report filed on Form 10-Q for the period ended June 30, 2018).

Provisional Sales

Sales of all metals products sold directly to customers, including by-product metals, are recorded as revenues when all performance obligations have been completed and the transaction price can be determined or reasonably estimated. For concentrate sales, revenues are generally recorded at the time of shipment at forward prices for the estimated month of settlement. Due to the time elapsed between shipment to the customer and the final settlement with the customer, we must estimate the prices at which sales of our metals will be settled. Previously recorded sales are adjusted to estimated settlement metals prices until final settlement by the customer.  Changes in metals prices between shipment and final settlement will result in changes to revenues previously recorded upon shipment.  Metals prices can and often do fluctuate widely and are affected by numerous factors beyond our control (see Part I, Item 1A. – Risk Factors – A substantial or extended decline in metals prices would have a material adverse effect on us in our annual report filed on Form 10-K for the year ended December 31, 2017).  At June 30, 2018, metals contained in concentrates and exposed to future price changes totaled approximately 1.2 million ounces of silver, 5,842 ounces of gold, 11,696 tons of zinc, and 2,792 tons of lead.  If the price for each metal were to change by 10%, the change in the total value of the concentrates sold would be approximately $6.3 million.  However, as discussed in Commodity-Price Risk Management below, we utilize a program designed and intended to mitigate the risk of negative price adjustments with limited mark-to-market financially-settled forward contracts for our silver, gold, zinc and lead sales.

61

Commodity-Price Risk Management

At times, we may use commodity forward sales commitments, commodity swap contracts and commodity put and call option contracts to manage our exposure to fluctuation in the prices of certain metals we produce. Contract positions are designed to ensure that we will receive a defined minimum price for certain quantities of our production, thereby partially offsetting our exposure to fluctuations in market prices. Our risk management policy allows for up to 75% of our planned metals price exposure for five years into the future, with certain other limitations, to be hedged under such programs. These instruments do, however, expose us to (i) credit risk in the form of non-performance by counterparties for contracts in which the contract price exceeds the spot price of a commodity and (ii) price risk to the extent that the spot price exceeds the contract price for quantities of our production covered under contract positions.

We are currently using financially-settled forward contracts to manage the exposure to changes in prices of silver, gold, zinc and lead contained in our concentrate shipments between the time of shipment and final settlement. In addition, we are using financially-settled forward contracts to manage the exposure to changes in prices of zinc and lead (but not silver and gold) contained in our forecasted future concentrate shipments. These contracts do not qualify for hedge accounting and are marked-to-market through earnings each period.

As of June 30, 2018, we recorded the following balances for the fair value of the contracts:

• a current asset of $2.4 million, which is included in other current assets and is net of $1.2 million for contracts in a fair value liability position; and

• a non-current asset balance of $12.3 million, which is included in other non-current assets and is net of $0.2 million for contracts in a fair value non-current liability position.

We recognized a $3.3 million net gain during the first half of 2018 on the contracts utilized to manage exposure to prices of metals in our concentrate shipments, which is included in sales of products.  The net gain recognized on the contracts offsets losses related to price adjustments on our provisional concentrate sales due to changes to silver, gold, lead and zinc prices between the time of sale and final settlement.

We recognized a $20.8 million net gain during the first half of 2018 on the contracts utilized to manage exposure to prices for forecasted future concentrate shipments. The net gain on these contracts is included as a separate line item under other income (expense), as they relate to forecasted future shipments, as opposed to sales that have already taken place but are subject to final pricing as discussed in the preceding paragraph.  The net gain for the first half of 2018 is the result of a decline in zinc and lead prices. This program, when utilized, is designed to mitigate the impact of potential future declines in lead and zinc prices from the price levels established in the contracts (see average price information below). When those prices increase compared to the contract prices, we incur losses on the contracts.

62

The following tables summarize the quantities of metals committed under forward sales contracts at June 30, 2018 and December 31, 2017:

June 30, 2018	Ounces/pounds under contract (in 000's)								Average price per ounce/pound
	Silver		Gold		Zinc		Lead		Silver		Gold		Zinc		Lead
	(ounces)		(ounces)		(pounds)		(pounds)		(ounces)		(ounces)		(pounds)		(pounds)
Contracts on provisional sales
2018 settlements		1,114		5		20,889		4,960	$	16.50	$	1,298	$	1.38	$	1.07
Contracts on forecasted sales
2018 settlements		—		—		9,039		5,787		N/A		N/A	$	1.34	$	1.09
2019 settlements		—		—		48,502		20,283		N/A		N/A	$	1.40	$	1.10
2020 settlements		—		—		42,329		19,401		N/A		N/A	$	1.40	$	1.13
2021 settlements		—		—		—		4,409		N/A		N/A		N/A	$	1.07

December 31, 2017	Ounces/pounds under contract (in 000's)								Average price per ounce/pound
	Silver		Gold		Zinc		Lead		Silver		Gold		Zinc		Lead
	(ounces)		(ounces)		(pounds)		(pounds)		(ounces)		(ounces)		(pounds)		(pounds)
Contracts on provisional sales
2018 settlements		1,447		5		21,550		4,740	$	16.64	$	1,279	$	1.45	$	1.11
Contracts on forecasted sales
2018 settlements		—		—		32,187		16,645		N/A		N/A	$	1.29	$	1.06
2019 settlements		—		—		23,589		18,078		N/A		N/A	$	1.33	$	1.09
2020 settlements		—		—		3,307		2,866		N/A		N/A	$	1.27	$	1.08

Foreign Currency

We operate or have mining interests in Canada and Mexico, which exposes us to risks associated with fluctuations in the exchange rates between the U.S. dollar ("USD") and the Canadian dollar ("CAD") and Mexican peso ("MXN"). We have determined the functional currency for our Canadian and Mexican operations is the USD. As such, foreign exchange gains and losses associated with the re-measurement of monetary assets and liabilities from CAD and MXN to USD are recorded to earnings each period. For the six months ended June 30, 2018, we recognized a net foreign exchange loss of $5.1 million. Foreign currency exchange rates are influenced by a number of factors beyond our control. A 10% change in the exchange rate between the USD and CAD from the rate at June 30, 2018 would have resulted in a change of approximately $11.2 million in our net foreign exchange gain or loss. A 10% change in the exchange rate between the USD and MXN from the rate at June 30, 2018 would have resulted in a change of approximately $0.6 million in our net foreign exchange gain or loss.

In April 2016, we initiated a program to manage our exposure to fluctuations in the exchange rate between the USD and CAD and the impact on our future operating costs denominated in CAD. In October 2016, we also initiated a program to manage our exposure to the impact of fluctuations in the exchange rate between the USD and MXN on our future operating costs denominated in MXN. The programs utilize forward contracts to buy CAD and MXN, and each contract is designated as a cash flow hedge. As of June 30, 2018, we have 107 forward contracts outstanding to buy CAD$256.0 million having a notional amount of US$198.0 million, and 33 forward contracts outstanding to buy MXN$226.3 million having a notional amount of USD$11.3 million. The CAD contracts are related to forecasted cash operating costs at Casa Berardi to be incurred from 2018 through 2022 and have CAD-to-USD exchange rates ranging between 1.2729 and 1.3335. The MXN contracts are related to forecasted cash operating costs at San Sebastian to be incurred from 2018 through 2020 and have MXN-to-USD exchange rates ranging between 19.4000 and 20.8550. Our risk management policy allows for up to 75% of our planned cost exposure for five years into the future to be hedged under such programs, and for potential additional programs to manage other foreign currency-related exposure areas.

63

As of June 30, 2018, we recorded the following balances for the fair value of the contracts:

• a current asset of $0.1 million, which is included in other current assets;

• a non-current asset of $0.1 million, which is included in other non-current assets; and

• a current liability of $1.4 million, which is included in other current liabilities; and

• a non-current liability of $1.0 million, which is included in other non-current liabilities.

Net unrealized losses of approximately $2.2 million related to the effective portion of the hedges were included in accumulated other comprehensive loss as of June 30, 2018, and are net of related deferred taxes. Unrealized gains and losses will be transferred from accumulated other comprehensive loss to current earnings as the underlying operating expenses are recognized. We estimate approximately $1.3 million in net unrealized losses included in accumulated other comprehensive loss as of June 30, 2018 would be reclassified to current earnings in the next twelve months. Net realized gains of approximately $0.4 million on contracts related to underlying expenses which have been recognized were transferred from accumulated other comprehensive loss and included in cost of sales and other direct production costs for the six months ended June 30, 2018. Net unrealized gains of approximately $10 thousand related to ineffectiveness of the hedges were included in gain (loss) on derivatives contracts on our consolidated statements of operations and comprehensive income (loss) for the six months ended June 30, 2018.

Item 4.    Controls and Procedures

An evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures as required by Securities Exchange Act Rules 13a-15(e) and 15d-15(e) as of the end of the period covered by this report.  Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures, including controls and procedures designed to ensure that information required to be disclosed by us is accumulated and communicated to our management (including our CEO and CFO), were effective as of June 30, 2018, in assuring them in a timely manner that material information required to be disclosed in this report has been properly recorded, processed, summarized and reported. There were no changes in our internal control over financial reporting during the quarter ended June 30, 2018, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Internal control systems, no matter how well designed and operated, have inherent limitations. Therefore, even a system which is determined to be effective cannot provide absolute assurance that all control issues have been detected or prevented. Our systems of internal controls are designed to provide reasonable assurance with respect to financial statement preparation and presentation.

Part II - Other Information

Item 1.    Legal Proceedings

For information concerning legal proceedings, refer to Note 4 of Notes to Condensed Consolidated Financial Statements (Unaudited), which is incorporated by reference into this Item 1.

Item 1A.   Risk Factors

Part I, Item 1A. – Risk Factors of our annual report filed on Form 10-K for the year ended December 31, 2017, as updated in Part II, Item 1A. – Risk Factors in our quarterly report on Form 10-Q for the period ended March 31, 2018, sets forth information relating to important risks and uncertainties that could materially adversely affect our business, financial condition or operating results.  Certain of those risk factors have been updated in this Form 10-Q, as set forth below.

64

Legal challenges could prevent the Rock Creek or Montanore projects from ever being developed.

The proposed development of our Rock Creek project has been challenged by several regional and national conservation groups at various times since the U.S. Forest Service (“USFS”) issued its initial Record of Decision (“ROD”) in 2003 approving Revett Mining Company’s plan of operation (Revett is now our wholly-owned subsidiary, named Hecla Montana, Inc.). Some of these challenges have alleged violations of a variety of federal and state laws and regulations pertaining to Revett’s permitting activities at Rock Creek, including the Endangered Species Act, the National Environmental Policy Act (“NEPA”), the General Mining Law of 1872, the Federal Land Policy Management Act, the Wilderness Act, the National Forest Management Act, the Clean Water Act, the Clean Air Act, the Forest Service Organic Act of 1897, and the Administrative Procedure Act. Although Revett successfully addressed most of these challenges, Revett was directed by the Montana Federal District Court in May 2010 to produce a Supplemental Environmental Impact Statement (“SEIS”) to address NEPA procedural deficiencies that were identified by the court, which SEIS was posted to the Federal Register on July 20, 2018. We cannot predict how possible future challenges will be resolved. Possible new court challenges in the future to the final SEIS and ROD may delay the planned development at Rock Creek. If we are successful in completing the SEIS and defending any challenges to our Rock Creek project, we would still be required to comply with a number of requirements and conditions as development progresses, failing which could make us unable to continue with development activities.

A joint final Environmental Impact Statement with respect to our Montanore project was issued in December 2015 by the USFS and Montana Department of Environmental Quality, and each agency issued a ROD in February 2016 providing approval for development of the Montanore project. However, private conservation groups have taken and may in the future take actions to oppose or delay the Montanore project. On May 30, 2017, the Montana Federal District Court issued Opinions and Orders in three lawsuits challenging previously granted environmental approvals for the Montanore project. The Orders overturned the approvals for the project granted by the USFS and the United States Fish and Wildlife Service, and in each case remanded the ROD and associated planning documents for further review by the agencies consistent with its Opinions. In June 2017, the Court vacated the agencies’ approvals for the project. As a result, additional work must be performed by the agencies to address the deficiencies in the ROD and associated planning documents identified by the Court, and new approvals must be granted, before the project may proceed beyond certain preliminary actions. In addition, there are two lawsuits pending which involve potential defects in title or limiting our access to the properties comprising the Montanore project. A development or outcome from one of these or any other lawsuit could limit our ability to access, develop or operate the Montanore project.

Recent events in the State of Montana create additional risks with respect to permitting of the Rock Creek and Montanore projects. In March 2018, each of Hecla Mining Company and our Chief Executive Officer (“CEO”) was notified by the Montana Department of Environmental Quality (“DEQ”) of alleged violations of Montana’s mine reclamation statutes and related regulations due to our CEO’s prior role as an officer of a mining company when it declared bankruptcy, together with the fact that subsequently, proceeds from that company's sureties were insufficient to fully fund reclamation at the company’s mine sites in Montana. To date, no enforcement action has been taken to revoke or deny any permits held by our subsidiaries, however, those subsidiaries have commenced litigation challenging the DEQ’s assertion. The DEQ in turn has attempted to initiate litigation against Hecla Mining Company and our CEO. It is possible that the DEQ may bring an enforcement action in the future, or the litigation may be resolved unfavorably, either of which could have the effect of delaying, increasing the costs of, or preventing exploration and development efforts at the two projects.

Additionally, there is pending in Montana a ballot initiative (“I-186”) that requires the DEQ to deny a permit for any new hardrock mines in Montana unless the reclamation plan provides clear and convincing evidence that the mine will not require perpetual treatment of water polluted by acid mine drainage or other contaminants.  The terms “perpetual treatment,” “perpetual leaching,” and “contaminants” within I-186 are not fully defined and would require further definition from the Montana Legislature or through DEQ rulemaking. A sufficient number of signatures has been obtained from Montana residents to place I-186 on the November 2018 ballot. If I-186 were to be passed, it could have the effect of delaying, increasing the costs of, or preventing further exploration and development activities at Rock Creek and Montanore.

65

Recently enacted tariffs, other potential changes to tariff and import/export regulations, and ongoing trade disputes between the United States and other jurisdictions may have a negative effect on global economic conditions and our business, financial results and financial condition.

The United States recently proposed and enacted tariffs on certain items. Further, there have been ongoing discussions and activities regarding changes to other U.S. trade policies and treaties. In response, a number of our markets, including China, are threatening to impose tariffs on U.S. imports, or have already implemented tariffs on U.S. imports, or to take other measures in response to these U.S. actions. These developments may have a material adverse effect on global economic conditions and the stability of global financial markets, and they may significantly reduce global trade and, in particular, trade between China and the United States. Any of these factors could depress economic activity, restrict our access to customers and have a material adverse effect on our business, financial condition and results of operations. In addition, any actions by foreign markets to implement further trade policy changes, including limiting foreign investment or trade, increasing regulatory scrutiny or taking other actions which impact U.S. companies' ability to obtain necessary licenses or approvals could negatively impact our business.

In early August 2018, China published the list of items that will be subject to import duties should the U.S. proceed with additional tariffs on certain goods imported from China.  Included on the list is are lead and silver concentrates, both of which are products we produce and ship to China.  Lead concentrates are targeted to have a 10% tariff imposed, and silver at 20%.  In 2017 and in the first half of 2018, we sold no lead concentrates to China and $69.6 million and $0.1 million, respectively, in silver concentrates to China. The silver concentrate sales represented 12% of our total sales for 2017.

These tariffs have just recently been announced and are subject to a number of uncertainties as they are implemented, including future adjustments and changes in the countries excluded from such tariffs. The ultimate reaction of other countries, and the individuals in each of these countries, and the impact of these tariffs or other actions on the United States, China, the global economy and our business, financial condition and results of operations, cannot be predicted at this time, nor can we predict the impact of any other developments with respect to global trade.

Item 4. Mine Safety Disclosures

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in exhibit 95 to this Quarterly Report.

Item 6.    Exhibits

See the exhibit index to this Quarterly Report for the list of exhibits.

Items 2, 3 and 5 of Part II are not applicable and are omitted from this report.

66

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		HECLA MINING COMPANY
		(Registrant)
Date:	August 9, 2018	By:	/s/ Phillips S. Baker, Jr.
			Phillips S. Baker, Jr., President,
			Chief Executive Officer and Director
Date:	August 9, 2018	By:	/s/ Lindsay A. Hall
			Lindsay A. Hall, Senior Vice President and
			Chief Financial Officer

67

Hecla Mining Company and Wholly Owned Subsidiaries

Form 10-Q – June 30, 2018

Index to Exhibits

2.1 Arrangement Agreement, dated March 16, 2018, among Hecla Mining Company, 1156291 B.C. Unlimited Liability Company, and Klondex Mines Ltd. Filed as exhibit 2.1 to Registrant’s Current Report on Form 8-K filed on March 19, 2018 (File No. 1-8491), and incorporated herein by reference.

2.2 Amending Agreement dated as of June 4, 2018, by and among Hecla Mining Company, its wholly owned subsidiary, 1156291 B.C. Unlimited Liability Company, and Klondex Mines Ltd. Filed as exhibit 2.1 to Registrant’s Current Report on Form 8-K filed on June 4, 2018 (File No. 1-8491), and incorporated herein by reference.

2.3 Amending Agreement dated as of July 5, 2018, by and among Hecla Mining Company, its wholly owned subsidiary, 1156291 B.C. Unlimited Liability Company, and Klondex Mines Ltd. Filed as exhibit 2.1 to Registrant’s Current Report on Form 8-K filed on July 6, 2018 (File No. 1-8491), and incorporated herein by reference.

3.1 Restated Certificate of Incorporation of the Registrant, as amended. Filed as exhibit 3.1 to Registrant’s Form 10-Q for the period ended March 31, 2018 (File No. 1-8491), and incorporated herein by reference.

3.2 Bylaws of the Registrant as amended to date. Filed as exhibit 3.1 to Registrant's Current Report on Form 8-K filed on August 22, 2014 (File No. 1-8491), and incorporated herein by reference.

4.1 Designations, Preferences and Rights of Series B Cumulative Convertible Preferred Stock of the Registrant. Included as Annex II to Restated Certificate of Incorporation of Registrant. Filed as exhibit 3.1 to Registrant’s Form 10-Q for the period ended March 31, 2018 (File No. 1-8491), and incorporated herein by reference.

4.2(a) Indenture dated as of April 12, 2013 among Hecla Mining Company, as Issuer, certain subsidiaries of Hecla Mining Company, as Guarantors thereto, and The Bank of New York Mellon Trust Company, N.A., as Trustee. Filed as exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on April 15, 2013 (File No. 1-8491), and incorporated herein by reference.

68

4.2(b) Supplemental Indenture dated as of April 14, 2014 among Hecla Mining Company, as Issuer, certain subsidiaries of Hecla Mining Company, as Guarantors thereto, and the Bank of New York Mellon Trust Company, N.A., as Trustee. Filed as exhibit 4.2 to Registrant's registration statement on Form S-3ASR filed on April 14, 2014 (Registration No. 333-195246), and incorporated herein by reference.

4.2(c) Supplemental Indenture dated August 5, 2015, among Revett Mining Company, Inc., Revett Silver Company, Troy Mine, Inc., RC Resources, Inc., Revett Exploration, Inc., and Revett Holdings, Inc., as Guaranteeing Subsidiaries, and The Bank of New York Mellon Trust Company, N.A., as Trustee. Filed as exhibit 4.2 (d) to Registrant's Form 10-K for the year ended December 31, 2015 (File No. 1-8491), and incorporated herein by reference.

4.2(d) Supplemental Indenture dated October 26, 2016, among Mines Management Inc., Newhi, Inc., Montanore Minerals Corp., as Guaranteeing Subsidiaries, and The Bank of New York Mellon Trust, N.A., as Trustee. Filed as exhibit 4.2(e) to Registrant’s Form 10-K for the year ended December 31, 2016 (File No. 1-8491), and incorporated herein by reference.

10.1	Fifth Amended and Restated Credit Agreement dated as of July 16, 2018 by and among Hecla Mining Company, certain subsidiaries of Hecla Mining Company, the Bank of Nova Scotia, as the Administrative Agent for the Lenders, and various Lenders.  Filed as exhibit 10.1 to Registrant's Current Report on Form 8-K filed on July 17, 2018 (File No. 1-8491), and incorporated herein by reference.
31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *

31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *

32.1 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *

32.2 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *

95 Mine safety information listed in Section 1503 of the Dodd-Frank Act. *

101.INS XBRL Instance. **

101.SCH XBRL Taxonomy Extension Schema.**

101.CAL XBRL Taxonomy Extension Calculation.**

69

101.DEF XBRL Taxonomy Extension Definition.**

101.LAB XBRL Taxonomy Extension Labels.**

101.PRE XBRL Taxonomy Extension Presentation.**

___________________

* Filed herewith.

** XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities and Exchange Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

70

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Phillips S. Baker, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Hecla Mining Company;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2018

/s/ Phillips S. Baker, Jr.

Phillips S. Baker, Jr.

President, Chief Executive Officer and Director

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Lindsay A. Hall, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Hecla Mining Company;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2018

/s/ Lindsay A. Hall

Lindsay A. Hall

Senior Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATIONS

I, Phillips S. Baker, Jr., President, Chief Executive Officer and Director of Hecla Mining Company (“Hecla”), certify that to my knowledge:

1. This quarterly report of Hecla on Form 10-Q (“report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of Hecla.

Date: August 9, 2018

/s/ Phillips S. Baker, Jr.

Phillips S. Baker, Jr.

President, Chief Executive Officer and Director

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906 has been provided to Hecla Mining Company and will be retained by Hecla and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished in accordance with Securities and Exchange Commission Release No. 34-47551 and shall not be considered filed as part of the Form 10-Q.

EX-32.2

EXHIBIT 32.2

CERTIFICATIONS

I, Lindsay A. Hall, Senior Vice President and Chief Financial Officer of Hecla Mining Company (“Hecla”), certify that to my knowledge:

1. This quarterly report of Hecla on Form 10-Q (“report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of Hecla.

Date: August 9, 2018

/s/ Lindsay A. Hall

Lindsay A. Hall

Senior Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906 has been provided to Hecla Mining Company and will be retained by Hecla and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished in accordance with Securities and Exchange Commission Release No. 34-47551 and shall not be considered filed as part of the Form 10-Q.

EX-95

Exhibit 95

Mine Safety Disclosures

Our mines are operated subject to the regulation of the Federal Mine Safety and Health Administration (“MSHA”), under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”). In July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) was signed into law, and amended in December 2011. The following mine safety data is provided pursuant to the Dodd-Frank Act.

When MSHA believes a violation of the Mine Act has occurred, it may issue a citation for such violation, including a civil penalty or fine, and the mine operator must abate the alleged violation. During the second quarter of 2018, MSHA proposed no penalty assessments at the Greens Creek mine, $1,154 in penalty assessments at the Lucky Friday mine, and no penalty assessments at the Troy mine. Hecla has not yet received all penalty assessments related to the citations issued in the second quarter of 2018. We have the opportunity to contest or appeal these penalties.

During the second quarter of 2018, MSHA issued the Greens Creek mine 1 citation pursuant to Section 104 of the Mine Act for violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a mine safety or health hazard, and 1 such citation at both the Lucky Friday mine and the Troy mine.

The Greens Creek, Lucky Friday, and Troy mines have no legal actions pending before the Federal Mine Safety and Health Review Commission, regarding citations for which penalties have been assessed.

As required by the reporting requirements of the Dodd-Frank Act, as amended, the table below presents the following information for the three-month period ended June 30, 2018.

Received

Received

Notice of

Total

Notice of

Potential

Legal

Section

Total Dollar

Number

Pattern of

to have

Actions

Legal

Legal

104(d)

Value of

Of

Violations

Patterns

Pending

Actions

Actions

Section

Section

Citations

Section

Section

MSHA

Mining

Under

Under

as of Last

Initiated

Resolved

104 S&S

104(b)

and

110(b)(2)

107(a)

Assessments

Related

Section

Section

Day of

During

During

Mine

Citations

Orders

Orders

Violations

Orders

Proposed

Fatalities

104(e)

104(e)

Period

Period

Period

Greens Creek

1

0

0

—

—

$

0

—

no

no

0

0

0

Lucky Friday

1

0

0

—

—

$

1,154

—

no

no

0

0

0

Troy

1

0

0

—

—

$

0

—

no

no

0

0

0

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Aug. 07, 2018
Document Information [Line Items]
Entity Registrant Name	HECLA MINING CO/DE/
Entity Central Index Key	0000719413
Trading Symbol	hl
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	Yes
Entity Common Stock, Shares Outstanding (in shares)		477,012,806
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 239,722	$ 186,107
Investments	5,556	33,758
Accounts receivable:
Trade	9,717	14,805
Taxes	10,382	10,382
Other, net	8,925	7,003
Inventories:
Concentrates, doré, and stockpiled ore	35,169	28,455
Materials and supplies	25,885	26,100
Other current assets	17,006	13,715
Total current assets	352,362	320,325
Non-current investments	7,449	7,561
Non-current restricted cash and investments	1,005	1,032
Properties, plants, equipment and mineral interests, net	2,006,592	2,020,021
Non-current deferred income taxes	1,179	1,509
Other non-current assets and deferred charges	24,007	14,509
Total assets	2,392,594	2,364,957
Current liabilities:
Accounts payable and accrued liabilities	53,835	46,549
Accrued payroll and related benefits	23,661	31,259
Accrued taxes	6,143	5,919
Current portion of capital leases	6,015	5,608
Accrued interest	5,976	5,745
Other current liabilities	1,388	10,371
Current portion of accrued reclamation and closure costs	8,315	6,679
Total current liabilities	105,333	112,130
Capital leases	8,757	6,193
Accrued reclamation and closure costs	78,102	79,366
Long-term debt	533,230	502,229
Non-current deferred tax liability	112,462	121,546
Non-current pension liability	48,973	46,628
Other non-current liabilities	4,438	12,983
Total liabilities	891,295	881,075
Commitments and contingencies (Notes 2, 4, 7, 9, and 11)
SHAREHOLDERS’ EQUITY
Preferred stock, 5,000,000 shares authorized: Series B preferred stock, $0.25 par value, 157,816 shares issued and outstanding, liquidation preference — $7,891	39	39
Common stock, $0.25 par value, authorized 750,000,000 shares; issued and outstanding 2018 — 401,322,377 shares and 2017 — 399,176,425 shares	101,643	100,926
Capital surplus	1,628,440	1,619,816
Accumulated deficit	(176,158)	(195,484)
Accumulated other comprehensive loss	(31,929)	(23,373)
Less treasury stock, at cost; 2018 — 5,226,791 shares and 2017 — 4,529,450 shares issued and held in treasury	(20,736)	(18,042)
Total shareholders’ equity	1,501,299	1,483,882
Total liabilities and shareholders’ equity	$ 2,392,594	$ 2,364,957

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Series B preferred stock, par value (in dollars per share)	$ 0.25	$ 0.25
Series B preferred stock, shares issued (in shares)	157,816	157,816
Series B preferred stock, shares outstanding (in shares)	157,816	157,816
Series B preferred stock, liquidation preference	$ 7,891	$ 7,891
Common stock, par value (in dollars per share)	$ 0.25	$ 0.25
Common stock, shares authorized (in shares)	750,000,000	750,000,000
Common stock, shares issued (in shares)	401,322,377	399,176,425
Common stock, shares outstanding (in shares)	401,322,377	399,176,425
Treasury stock, shares (in shares)	5,226,791	4,529,450

XML

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Sales of products	$ 147,259	$ 134,279	$ 286,968	$ 276,823
Cost of sales and other direct production costs	80,440	77,503	153,309	156,179
Depreciation, depletion and amortization	31,817	25,569	59,871	54,521
Total cost of sales	112,257	103,072	213,180	210,700
Gross profit	35,002	31,207	73,788	66,123
Other operating expenses:
General and administrative	9,787	10,309	17,522	19,515
Exploration	7,838	5,853	15,198	10,367
Pre-development	1,415	1,052	2,420	2,304
Research and development	2,337	312	3,773	995
Other operating expense	638	699	1,153	1,362
Provision for closed operations and environmental matters	1,420	985	2,682	2,104
Lucky Friday suspension-related costs	6,801	8,024	11,818	9,605
Acquisition costs	1,010	(2)	3,517	25
Total other operating expenses	31,246	27,232	58,083	46,277
Income from operations	3,756	3,975	15,705	19,846
Other income (expense):
Loss on disposition of investments				(167)
Unrealized (loss) gain on investments	(564)	(276)	(254)	51
Gain (loss) on derivative contracts	16,804	2,487	20,811	(5,322)
Net foreign exchange gain (loss)	2,476	(3,883)	5,068	(6,145)
Interest income and other income and expense	108	319	52	644
Interest expense, net of amount capitalized	(10,079)	(10,543)	(19,873)	(19,065)
Total other income (expense)	8,745	(11,896)	5,804	(30,004)
Income (loss) before income taxes	12,501	(7,921)	21,509	(10,158)
Income tax (provision) benefit	(427)	(16,095)	(1,195)	12,976
Net income (loss)	12,074	(24,016)	20,314	2,818
Preferred stock dividends	(138)	(138)	(276)	(276)
Income (loss) applicable to common shareholders	11,936	(24,154)	20,038	2,542
Comprehensive income (loss):
Net income	12,074	(24,016)	20,314	2,818
Unrealized loss and amortization of prior service on pension plans		(16)		16
Change in fair value of derivative contracts designated as hedge transactions	(5,203)	2,047	(7,276)	5,308
Reclassification of loss on disposition or impairment of marketable securities included in net (loss) income				167
Unrealized holding (losses) gains on investments	41	847	10	591
Comprehensive income (loss)	$ 6,912	$ (21,138)	$ 13,048	$ 8,900
Basic income (loss) per common share after preferred dividends (in dollars per share)	$ 0.03	$ (0.06)	$ 0.05	$ 0.01
Diluted income (loss) per common share after preferred dividends (in dollars per share)	$ 0.03	$ (0.06)	$ 0.05	$ 0.01
Weighted average number of common shares outstanding - basic (in shares)	400,619	396,178	399,972	395,774
Weighted average number of common shares outstanding - diluted (in shares)	403,610	396,178	402,873	399,236
Cash dividends declared per common share (in dollars per share)	$ 0.0025	$ 0.0025	$ 0.005	$ 0.005

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Operating activities:
Net income	$ 20,314	$ 2,818
Non-cash elements included in net income:
Depreciation, depletion and amortization	62,852	56,908
Loss on investments	254	117
Gain on disposition of properties, plants, equipment, and mineral interests	(166)	(94)
Provision for reclamation and closure costs	2,640	2,247
Stock compensation	2,441	2,831
Deferred income taxes	(2,977)	(22,113)
Amortization of loan origination fees	898	967
(Gain) loss on derivative contracts	(30,236)	5,386
Foreign exchange (gain) loss	(5,348)	5,201
Other non-cash items, net	(35)	2
Change in assets and liabilities:
Accounts receivable	2,471	(1,150)
Inventories	(6,865)	1,594
Other current and non-current assets	(2,507)	3,896
Accounts payable and accrued liabilities	8,701	(10,937)
Accrued payroll and related benefits	(337)	(4,901)
Accrued taxes	(672)	4,408
Accrued reclamation and closure costs and other non-current liabilities	(4,410)	(1,359)
Cash provided by operating activities	47,018	45,821
Investing activities:
Additions to properties, plants, equipment and mineral interests	(43,304)	(45,964)
Proceeds from disposition of properties, plants and equipment	463	142
Purchases of investments	(31,682)	(23,280)
Maturities of investments	59,336	14,356
Net cash used in investing activities	(15,187)	(54,746)
Financing activities:
Proceeds from sale of common stock, net of offering costs		9,610
Acquisition of treasury shares	(2,694)	(2,474)
Dividends paid to common shareholders	(2,000)	(1,981)
Dividends paid to preferred shareholders	(276)	(276)
Credit availability and debt issuance fees paid	(3)	(91)
Issuance of debt	31,024
Repayments of debt		(470)
Repayments of capital leases	(3,762)	(3,245)
Net cash provided by financing activities	22,289	1,073
Effect of exchange rates on cash	(532)	1,086
Net increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents	53,588	(6,766)
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period	187,139	171,977
Cash, cash equivalents and restricted cash and cash equivalents at end of period	240,727	165,211
Significant non-cash investing and financing activities:
Addition of capital lease obligations	7,008	4,645
Payment of accrued compensation in stock	$ 4,863	$ 4,240

XML

Note 1 - Basis of Preparation of Financial Statements

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]

Note

1.

    Basis of Preparation of Financial Statements

In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements and notes to the unaudited interim condensed consolidated financial statements contain all adjustments, consisting of normal recurring items and items which are nonrecurring, necessary to present fairly, in all material respects, the financial position of Hecla Mining Company and its consolidated subsidiaries ("Hecla" or "the Company" or “we” or “our” or “us”).  These unaudited interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and related footnotes as set forth in our annual report filed on Form

10

-K for the year ended

December 

31,

2017,

as it

may

be amended from time to time.

The results of operations for the periods presented

may

not

be indicative of those which

may

be expected for a full year.  The unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures are adequate for the information

not

to be misleading.

Certain condensed consolidated financial statement amounts for the prior period have been reclassified to conform to the current period presentation. These reclassifications had

no

effect on the net income, comprehensive income, or accumulated deficit as previously reported.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements, the reported amounts of revenues and expenses during the reporting period and the disclosures of contingent liabilities.  Accordingly, ultimate results could differ materially from those estimates.     

XML

Note 2 - Investments

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Investments and Restricted Cash Disclosure [Text Block]

Note

2.

    Investments

Our current investments, which are classified as "available for sale" and consist of bonds having maturities of greater than

90

days, had a fair value and cost basis of

$5.6

million and

$33.8

million, respectively, at

June 

30,

2018

and

December 

31,

2017.

During the

first

six

months of

2018

and

2017,

we had purchases of such investments of

$31.2

million and

$23.3

million, respectively, and maturities of

$59.3

million and

$14.4

million, respectively. Our current investments at

June 

30,

2018

and

December 

31,

2017

consisted of the following (in thousands):

	June 30, 2018							December 31, 2017
	Amortized cost		Unrealized loss			Fair value		Amortized cost		Unrealized loss			Fair value
Corporate bonds	$	5,559	$	(3	)	$	5,556	$	33,778	$	(20	)	$	33,758

At

June 

30,

2018

and

December 

31,

2017,

the fair value of our non-current investments was

$7.4

million and

$7.6

million, respectively.  Our non-current investments consist of marketable equity securities which are carried at fair value, and are primarily classified as “available-for-sale.”  The cost basis of our non-current investments was approximately

$6.0

million and

$5.7

million at

June 

30,

2018

and

December 

31,

2017,

respectively. During the

six

months ended

June 

30,

2018,

we recognized

$0.3

million in net unrealized losses in current earnings. During the

six

months ended

June 

30,

2017,

we recognized

$0.6

million in net unrealized gains on equity investments in other comprehensive income and

$0.1

million in net unrealized gains in current earnings.

XML

Note 3 - Income Taxes

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note

3.

   Income Taxes

Major components of our income tax provision (benefit) for the

three

and

six

months ended

June 30, 2018

and

2017

are as follows (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Current:
Domestic	$	1		$	—		$	1		$	(12,798	)
Foreign		2,965			15,935			4,171			21,451
Total current income tax provision (benefit)		2,966			15,935			4,172			8,653
Deferred:
Domestic		—			2,965			—			(15,939	)
Foreign		(2,539	)		(2,805	)		(2,977	)		(5,690	)
Total deferred income tax provision (benefit)		(2,539	)		160			(2,977	)		(21,629	)
Total income tax provision (benefit)	$	427		$	16,095		$	1,195		$	(12,976	)

The current income tax provisions for the

three

and

six

months ended

June 

30,

2018

and

2017

vary from the amounts that would have resulted from applying the statutory income tax rate to pre-tax income due primarily to the full valuation allowance in the U.S. in

2018,

the impact of taxation in foreign jurisdictions and the impact of the change in accounting method treatment of the

#4

Shaft development costs in

2017.

As of

June 

30,

2018,

we have a net deferred tax liability in the U.S. of

$0.3

million, a net deferred tax liability in Canada of

$112.5

million, and a net deferred tax asset in Mexico of

$1.5

million, for a consolidated worldwide net deferred tax liability of

$111.3

million. We recorded a full valuation allowance in the U.S. in

December 2017

as a result of U.S. tax reform. Our circumstances at

June 

30,

2018

continue to support a full valuation allowance in the U.S. where our domestic tax provision is zero. In the

first

quarter of

2017,

we received consent from the Internal Revenue Service to permit us to take a different income tax position relating to the timing of deductions for the

#4

Shaft development costs at Lucky Friday. This tax accounting method change substantially revised the timing of deductions for these costs for regular tax and Alternative Minimum Tax ("AMT") relative to our projected life of mine and projected taxable income. These timing changes caused us to revise our assessment of the ability to generate sufficient future taxable income to realize our deferred tax assets, resulting in a valuation allowance release of approximately

$15

million. At

June 

30,

2018

and

December 

31,

2017,

the balance of the valuation allowances on our deferred tax assets was

$79.4

million and

$78.7

million, respectively.

XML

Note 4 - Commitments, Contingencies and Obligations

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

Note

4.

    Commitments, Contingencies and Obligations

General

We follow GAAP guidance in determining our accruals and disclosures with respect to loss contingencies, and evaluate such accruals and contingencies for each reporting period. Accordingly, estimated losses from loss contingencies are accrued by a charge to income when information available prior to issuance of the financial statements indicates that it is probable that a liability could be incurred and the amount of the loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. If a loss contingency is

not

probable or reasonably estimable, disclosure of the loss contingency is made in the financial statements when it is at least reasonably possible that a material loss could be incurred.

Rio Grande Silver Guaranty

Our wholly-owned subsidiary, Rio Grande Silver Inc. (“Rio”), is party to a joint venture with Emerald Mining & Leasing, LLC (“EML”) and certain other parties with respect to a land package in the Creede Mining District of Colorado that is adjacent to other land held by Rio. Rio holds a

70%

interest in the joint venture. In connection with the joint venture, we are required to guarantee certain environmental remediation-related obligations of EML to a

third

party up to a maximum liability to us of

$2.5

million. As of

June 

30,

2018,

we have

not

been required to make any payments pursuant to the guaranty. We

may

be required to make payments in the future, limited to the

$2.5

million maximum liability, should EML fail to meet its obligations to the

third

party. However, to the extent that any payments are made by us under the guaranty, EML, in addition to other parties, has jointly and severally agreed to reimburse and indemnify us for any such payments. We have

not

recorded a liability relating to the guaranty as of

June 

30,

2018.

Lucky Friday Water Permit Matters

In the past, the Lucky Friday unit experienced multiple regulatory issues relating to its water discharge permits and water management more generally. All of these issues have been resolved except for one: in

December 2013,

the EPA issued to Hecla Limited a request for information under Section

308

of the Clean Water Act directing Hecla Limited to undertake a comprehensive groundwater investigation of Lucky Friday’s tailings pond

no.

3

to evaluate whether the pond is causing the discharge of pollutants via seepage to groundwater that is discharging to surface water. We completed the investigation mandated by the EPA and submitted a draft report to the agency in

December 2015.

We are waiting for the EPA’s response and we cannot predict what the impact of the investigation will be.

Hecla Limited strives to maintain its water discharges at the Lucky Friday unit in full compliance with its permits and applicable laws; however, we cannot provide assurance that in the future it will be able to fully comply with the permit limits and other regulatory requirements regarding water management.

Johnny M Mine Area near San Mateo, McKinley County, New Mexico

In

May 2011,

the EPA made a formal request to Hecla Mining Company for information regarding the Johnny M Mine Area near San Mateo, McKinley County, New Mexico, and asserted that Hecla Mining Company

may

be responsible under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") for environmental remediation and past costs the EPA has incurred at the site. Mining at the Johnny M was conducted for a limited period of time by a predecessor of our subsidiary, Hecla Limited. In

August 2012,

Hecla Limited and the EPA entered into a Settlement Agreement and Administrative Order on Consent for Removal Action (“Consent Order”), pursuant to which Hecla Limited agreed to pay (i)

$1.1

million to the EPA for its past response costs at the site and (ii) any future response costs at the site under the Consent Order, in exchange for a covenant

not

to sue by the EPA. Hecla Limited paid the

$1.1

million to the EPA for its past response costs and in

December 2014,

submitted to EPA the Engineering Evaluation and Cost Analysis (“EE/CA”) for the site. The EE/CA evaluates

three

alternative response actions:

1

)

no

action,

2

) off-site disposal, and

3

) on-site disposal. The range in estimated costs of these alternatives is

$0

to

$221

million. In the EE/CA, Hecla Limited recommended that EPA approve on-site disposal, which is currently estimated to cost

$5.6

million, on the basis that it is the most appropriate response action under CERCLA. In

June 2015,

the EPA approved the EE/CA, with a few minor conditions. The EPA still needs to publish the EE/CA for public notice and comment, and the agency will

not

make a final decision on the appropriate response action until the public comment process is complete. It is anticipated that Hecla Limited will implement the response action selected by the EPA pursuant to an amendment to the Consent Order or a new order. Based on the foregoing, we believe it is probable that Hecla Limited will incur a liability for remediation at the site. In the

fourth

quarter of

2014,

we accrued

$5.6

million, which continues to be our best estimate of that liability as of the date of this report. There can be

no

assurance that Hecla Limited’s liability will

not

be more than

$5.6

million, or that its ultimate liability will

not

have a material adverse effect on Hecla Limited’s or our results of operations or financial position.

The Johnny M Mine is in an area known as the San Mateo Creek Basin (“SMCB”), which is an approximately

321

square mile area in New Mexico that contains numerous legacy uranium mines and mills. The EPA is considering listing the entire SMCB on CERCLA’s National Priorities List in order to address perceived groundwater issues within the SMCB. The EE/CA discussed above relates primarily to contaminated rock and soil,

not

groundwater. In the event that the SMCB is listed as a Superfund site, or for other reasons, it is possible that Hecla Limited’s liability at the Johnny M Site, as well as any other sites within the SMCB at which predecessor companies of Hecla Limited

may

have been involved, will be greater than our current accrual of

$5.6

million due to the increased scope of required remediation.

In

July 2018,

the EPA informed Hecla Limited that it believes Hecla Limited, among several other potentially responsible parties ("PRPs"),

may

be liable for cleanup of the site or for costs incurred by the EPA in cleaning up the site. The EPA stated in the letter that it has incurred approximately

$9.6

million in response costs. Hecla Limited cannot with reasonable certainty estimate the amount or range of liability, if any, relating to this matter because of, among other reasons, the lack of information concerning the site, including the relative contributions, if any, of contamination by the various PRPs.

Carpenter Snow Creek and Barker-Hughesville Sites in Montana

In

July 2010,

the EPA made a formal request to Hecla Mining Company for information regarding the Carpenter Snow Creek Superfund site located in Cascade County, Montana. The Carpenter Snow Creek site is located in a historic mining district, and in the early

1980s

Hecla Limited leased

6

mining claims and performed limited exploration activities at the site. Hecla Limited terminated the mining lease in

1988.

In

June 2011,

the EPA informed Hecla Limited that it believes Hecla Limited, among several other viable companies,

may

be liable for cleanup of the site or for costs incurred by the EPA in cleaning up the site. The EPA stated in the letter that it has incurred approximately

$4.5

million in response costs and estimated that total remediation costs

may

exceed

$100

million. Hecla Limited cannot with reasonable certainty estimate the amount or range of liability, if any, relating to this matter because of, among other reasons, the lack of information concerning the site.

In

February 2017,

the EPA made a formal request to Hecla Mining Company for information regarding the Barker-Hughesville Mining District Superfund site located in Judith Basin and Cascade Counties, Montana. Hecla Limited submitted a response in

April 2017. 

The Barker-Hughesville site is located in a historic mining district, and between approximately

June

and

December 1983,

Hecla Limited was party to an agreement with another mining company under which limited exploration activities occurred at or near the site.

In

August 2018,

the EPA informed Hecla Limited that it believes Hecla Limited, among several other PRPs,

may

be liable for cleanup of the site or for costs incurred by the EPA in cleaning up the site. The EPA did

not

include an amount of its alleged response costs to date.  Hecla Limited cannot with reasonable certainty estimate the amount or range of liability, if any, relating to this matter because of, among other reasons, the lack of information concerning past or anticipated future costs at the site, and the relative contributions, if any, of contamination by the various PRPs.

Debt

On

April 12, 2013,

we completed an offering of

$500

million aggregate principal amount of

6.875%

Senior Notes due

2021

("Senior Notes"). The net proceeds from the offering of the Senior Notes were used to partially fund the acquisition of Aurizon Mines Ltd. ("Aurizon") and for general corporate purposes, including expenses related to the Aurizon acquisition. Through the acquisition of Aurizon, we acquired our Casa Berardi mine and other interests in Quebec, Canada. In

2014,

we completed additional issuances of our Senior Notes in the aggregate principal amount of

$6.5

million, which were contributed to

one

of our pension plans to satisfy the funding requirement for

2014.

Interest on the Senior Notes is payable on

May 1

and

November 1

of each year, commencing

November 1, 2013.

On

March 5, 2018,

we entered into a note purchase agreement pursuant to which we issued

CAD$40

million (approximately

USD$30.8

million at the time of the transaction) in aggregate principal amount of our Series

2018

-A Senior Notes due

May 1, 2021 (

the “Notes”) to Ressources Québec, a subsidiary of Investissment Québec, a financing arm of the Québec government. The Notes were issued at a discount of

0.58%,

and bear interest at a rate of

4.68%

per year, payable on

May 1

and

November 1

of each year, commencing

May 1, 2018.

The Notes are senior and unsecured and are pari passu in all material respects with the Senior Notes, including with respect to guarantees of the Notes by certain of our subsidiaries. The net proceeds from the Notes are required to be used for development and expansion of our Casa Berardi mine.

See

Note

9

and

Note

13

for more information.

Other Commitments

Our contractual obligations as of

June 

30,

2018

included approximately

$4.1

million for various costs. In addition, our open purchase orders at

June 

30,

2018

included approximately

$0.7

million,

$2.1

million and

$7.4

million for various capital and non-capital items at the Lucky Friday, Casa Berardi and Greens Creek units, respectively. We also have total commitments of approximately

$15.8

million relating to scheduled payments on capital leases, including interest, primarily for equipment at our Greens Creek, Lucky Friday and Casa Berardi units (see

Note

9

for more information). As part of our ongoing business and operations, we are required to provide surety bonds, bank letters of credit, and restricted deposits for various purposes, including financial support for environmental reclamation obligations and workers compensation programs. As of

June 

30,

2018,

we had surety bonds totaling

$117.0

million in place as financial support for future reclamation and closure costs, self-insurance, and employee benefit plans. The obligations associated with these instruments are generally related to performance requirements that we address through ongoing operations. As the requirements are met, the beneficiary of the associated instruments cancels or returns the instrument to the issuing entity. Certain of these instruments are associated with operating sites with long-lived assets and will remain outstanding until closure of the sites. We believe we are in compliance with all applicable bonding requirements and will be able to satisfy future bonding requirements as they arise.

Other Contingencies

We also have certain other contingencies resulting from litigation, claims, EPA investigations, and other commitments and are subject to a variety of environmental and safety laws and regulations incident to the ordinary course of business. We currently have

no

basis to conclude that any or all of such contingencies will materially affect our financial position, results of operations or cash flows. However, in the future, there

may

be changes to these contingencies, or additional contingencies

may

occur, any of which might result in an accrual or a change in current accruals recorded by us, and there can be

no

assurance that their ultimate disposition will

not

have a material adverse effect on our financial position, results of operations or cash flows.

XML

Note 5 - Earnings (Loss) Per Common Share

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Earnings Per Share [Text Block]

Note

5.

    Earnings (Loss) Per Common Share

We are authorized to issue

750,000,000

shares of common stock,

$0.25

par value per share. At

June 

30,

2018,

there were

406,549,168

shares of our common stock issued and

5,226,791

shares issued and held in treasury, for a net of

401,322,377

shares outstanding.

Diluted income (loss) per share for the

three

and

six

months ended

June 

30,

2018

and

2017

excludes the potential effects of outstanding shares of our convertible preferred stock, as their conversion would have

no

effect on the calculation of dilutive shares.

For the

three

-month and

six

-month periods ended

June 

30,

2018,

the calculation of diluted income per share included dilutive (i) restricted stock units that were unvested or which vested in the current period of

1,268,601

and

1,179,086,

respectively, and (ii) deferred shares of

1,721,932

for each period. For the

three

-month period ended

June 

30,

2017,

all restricted share units and deferred shares were excluded from the computation of diluted loss per share, as our reported loss for that period would cause them to have

no

effect on the calculation of loss per share. For the

six

-month period ended

June 

30,

2017,

dilutive restricted stock units that were unvested or which vested in the current period of

2,109,789

and deferred shares of

1,352,470

were included in the calculation of diluted income per share.

XML

Note 6 - Business Segments and Sales of Products

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note

6.

    Business Segments and Sales of Products

We discover, acquire, develop, produce, and market concentrates and doré containing silver, gold, lead and zinc. We are currently organized and managed in

four

segments, which represent our operating units: the Greens Creek unit, the Lucky Friday unit, the Casa Berardi unit, and the San Sebastian unit.

General corporate activities

not

associated with operating units and their various exploration activities, as well as discontinued operations and idle properties, are presented as “other.”  Interest expense, interest income and income taxes are considered general corporate items, and are

not

allocated to our segments.

The following tables present information about reportable segments for the

three

and

six

months ended

June 

30,

2018

and

2017

(in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Net sales to unaffiliated customers:
Greens Creek	$	74,605		$	71,339		$	140,455		$	130,189
Lucky Friday		3,287			(187	)		8,264			19,823
Casa Berardi		56,103			43,822			111,651			85,534
San Sebastian		13,264			19,305			26,598			41,277
	$	147,259		$	134,279		$	286,968		$	276,823
Income (loss) from operations:
Greens Creek	$	25,516		$	15,418		$	48,668		$	29,532
Lucky Friday		(5,261	)		(8,212	)		(9,407	)		(4,332	)
Casa Berardi		1,014			(1,708	)		4,264			(3,953	)
San Sebastian		(361	)		11,892			4,656			25,346
Other		(17,152	)		(13,415	)		(32,476	)		(26,747	)
	$	3,756		$	3,975		$	15,705		$	19,846

The following table presents identifiable assets by reportable segment as of

June 

30,

2018

and

December 

31,

2017

(in thousands):

	June 30, 2018		December 31, 2017
Identifiable assets:
Greens Creek	$	678,862	$	671,960
Lucky Friday		429,213		432,400
Casa Berardi		792,891		804,505
San Sebastian		68,812		62,198
Other		424,016		393,894
	$	2,393,794	$	2,364,957

Our products consist of both metal concentrates, which we sell to custom smelters and brokers, and unrefined bullion bars (doré), which

may

be sold as doré or further refined before sale to precious metals traders. Revenue is recognized upon the completion of the performance obligations and transfer of control of the product to the customer.

For sales of metals from refined doré, the performance obligation is met and revenue is recognized at the time of transfer of control of the agreed-upon metal quantities to the customer by the refiner. For sales of doré, the performance obligation is met, the transaction price is known, and revenue is recognized at the time of transfer of title and control of the doré containing the agreed-upon metal quantities to the customer. Refining, selling and shipping costs related to sales of doré and metals from doré are recorded to cost of sales as incurred.

For concentrate sales, which we currently have at our Greens Creek and Lucky Friday units, the performance obligation is met, the transaction price can be reasonably estimated, and revenue is recognized generally at the time of shipment. Concentrates sold at our Lucky Friday unit typically leave the mine and are received by the customer within the same day. However, there is a period of time between shipment of concentrates from our Greens Creek unit and their physical receipt by the customer, and judgment is required in determining when control has been transferred to the customer for those shipments. We have determined the performance obligation is met and title is transferred to the customer upon shipment of concentrate parcels from Greens Creek because, at that time,

1

) legal title is transferred to the customer,

2

) the customer has accepted the parcel and obtained the ability to realize all of the benefits from the product,

3

) the concentrate content specifications are known, have been communicated to the customer, and the customer has the significant risks and rewards of ownership of it,

4

) it is very unlikely a concentrate parcel from Greens Creek will be rejected by a customer upon physical receipt, and

5

) we have the right to payment for the parcel.

Judgment is also required in identifying the performance obligations for our concentrate sales. Most of our concentrate sales involve “frame contracts” with smelters that can cover multiple years and specify certain terms under which individual parcels of concentrates are sold. However, some terms are

not

specified in the frame contracts and/or can be renegotiated as part of annual amendments to the frame contract. We have determined parcel shipments represent individual performance obligations satisfied at a point in time when control of the shipment is transferred to the customer.

The consideration we receive for our concentrate sales fluctuates due to changes in metals prices between the time of shipment and their final settlement. However, we are able to reasonably estimate the transaction price for the concentrate sales at the time of shipment using forward prices for the month of settlement, and previously recorded sales and accounts receivable are adjusted to estimated settlement metals prices until final settlement with the customer. Also, it is unlikely a significant reversal of revenue for any

one

concentrate parcel will occur. As such, we use the expected value method to price the parcels until the final settlement date occurs, at which time the final transaction price is known. At

June 

30,

2018,

metals contained in concentrates and exposed to future price changes totaled

1.2

million ounces of silver,

5,842

ounces of gold,

11,696

tons of zinc, and

2,792

tons of lead.  However, as discussed in

Note

11

, we seek to mitigate the risk of negative price adjustments by using financially-settled forward contracts for some of our sales.

Sales and accounts receivable for concentrate shipments are recorded net of charges for treatment, refining, smelting losses, and other charges negotiated by us with the customers, which represent components of the transaction price. Charges are estimated by us upon shipment of concentrates based on contractual terms, and actual charges typically do

not

vary materially from our estimates. Costs charged by customers include fixed treatment and refining costs per ton of concentrate and

may

include price escalators which allow the customers to participate in the increase of lead and zinc prices above a negotiated baseline. Costs for shipping concentrates to customers are recorded to cost of sales as incurred.

Sales of metal concentrates and metal products are made principally to custom smelters, brokers and metals traders. The percentage of sales contributed by each segment is reflected in the following table:

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Greens Creek		51	%		53	%		49	%		47	%
Lucky Friday		2	%		—	%		3	%		7	%
Casa Berardi		38	%		33	%		39	%		31	%
San Sebastian		9	%		14	%		9	%		15	%
		100	%		100	%		100	%		100	%

Sales of products by metal for the

three

- and

six

-month periods ended

June 

30,

2018

and

2017

were as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Silver	$	38,425		$	46,077		$	73,647		$	97,434
Gold		77,635			66,975			150,679			129,676
Lead		10,690			8,101			19,917			21,720
Zinc		27,614			20,500			57,723			50,365
Less: Smelter and refining charges		(7,105	)		(7,374	)		(14,998	)		(22,372	)
	$	147,259		$	134,279		$	286,968		$	276,823

The following is sales information by geographic area based on the location of smelters and brokers (for concentrate shipments) and location of parent companies (for doré sales to metals traders) for the

three

- and

six

-month periods ended

June 

30,

2018

and

2017

(in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Canada	$	94,524	$	83,215	$	183,192	$	183,434
Korea		41,537		18,972		74,240		47,943
Japan		3,897		11,804		17,670		24,094
China		198		15,401		67		15,352
United States		4,407		4,080		8,488		9,285
Total, excluding gains/losses on forward contracts	$	144,563	$	133,472	$	283,657	$	280,108

Sales by significant product type for the

three

- and

six

-month periods ended

June 

30,

2018

and

2017

were as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Doré and metals from doré	$	75,526	$	67,533	$	149,018	$	136,513
Lead concentrate		42,149		44,087		76,483		93,004
Zinc concentrate		22,579		16,344		48,231		40,562
Bulk concentrate		4,309		5,508		9,925		10,029
Total, excluding gains/losses on forward contracts	$	144,563	$	133,472	$	283,657	$	280,108

Sales of products for the

three

- and

six

-month periods ended

June 

30,

2018

included net gains of

$2.7

million and

$3.3

million, respectively, on financially-settled forward contracts for silver, gold, lead and zinc contained in our concentrate sales. Sales of products for the

three

- and

six

-month periods ended

June 

30,

2017

included net gains of

$0.8

million and net losses of

$3.2

million, respectively, on the forward contracts. See

Note

11

for more information.

Sales of products to significant customers as a percentage of total sales were as follows for the

three

- and

six

-month periods ended

June 

30,

2018

and

2017:

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
CIBC		28	%		23	%		38	%		24	%
Scotia		18	%		23	%		10	%		22	%
Korea Zinc		28	%		14	%		26	%		17	%
Teck Metals Ltd.		17	%		15	%		11	%		15	%
Trafigura		—	%		12	%		—	%		6	%

Our trade accounts receivable balance related to contracts with customers was

$9.7

million at

June 

30,

2018

and

$14.8

million at

December 

31,

2017,

and included

no

allowance for doubtful accounts.

We have determined our contracts do

not

include a significant financing component. For doré sales and sales of metal from doré, payment is received at the time the performance obligation is satisfied. The amount of consideration for concentrate sales is variable, and we receive payment for a significant portion of the estimated value of concentrate parcels within a relatively short period of time after the performance obligation is satisfied.

We do

not

incur significant costs to obtain contracts, nor costs to fulfill contracts which are

not

addressed by other accounting standards. Therefore, we have

not

recognized an asset for such costs as of

June 

30,

2018

or

December 

31,

2017.

The sales and income (loss) from operations amounts reported above include results from our Lucky Friday segment. The Lucky Friday mine is our only operation where some of our employees are subject to a collective bargaining agreement, and the most recent agreement expired on

April 30, 2016.

On

February 19, 2017,

the unionized employees voted against our contract offer, and on

March 13, 2017

went on strike and have been on strike since that time. Production at Lucky Friday was suspended from the start of the strike until

July 2017,

when limited production resumed. For the

first

six

months of

2018

and

2017,

suspension costs

not

related to production of

$9.4

million and

$7.6

million, respectively, along with

$2.4

million and

$2.0

million, respectively, in non-cash depreciation expense, are reported in a separate line item on our consolidated statements of operations. We cannot predict how long the strike will last or whether an agreement will be reached. As a result of the strike or other related events, operations at Lucky Friday could continue to be disrupted, which could adversely affect our financial condition and results of operations. If the strike continues for a further extended period or it is determined an eventual resolution is unlikely, it

may

be appropriate in the future to review the carrying value of properties, plants, equipment and mineral interests at Lucky Friday. Under such review, if estimated undiscounted cash flows from Lucky Friday were less than its carrying value, an impairment loss would be recognized for the difference between the carrying value and the estimated fair value. The carrying value of properties, plants, equipment and mineral interests at Lucky Friday as of

June 

30,

2018

was approximately

$428.1

million. However, Lucky Friday has significant identified reserves and mineralized material and a current estimated mine life of approximately

22

years.

On

April 30, 2018,

we settled with the National Labor Relations Board ("NLRB") an unfair labor practice claim made by the union. As part of the settlement, Hecla Limited rescinded its last, best and final contract offer implemented in

March 2017.

We do

not

believe the settlement with the NLRB will resolve any of the key differences in the ongoing labor dispute. On

May 4, 2018,

we gave notice to the union that the parties to the labor dispute are at impasse, and implemented portions of our revised final offer presented in

December 2017.

XML

Note 7 - Employee Benefit Plans

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

Note

7.

   

Employee Benefit Plans

We sponsor defined benefit pension plans covering substantially all U.S. employees.  Net periodic pension cost for the plans consisted of the following for the

three

and

six

months ended

June 

30,

2018

and

2017

(in thousands):

	Three Months Ended June 30,
	2018			2017
Service cost	$	1,252		$	1,196
Interest cost		1,377			1,339
Expected return on plan assets		(1,634	)		(1,462	)
Amortization of prior service cost		15			(84	)
Amortization of net loss		931			1,033
Net periodic pension cost	$	1,941		$	2,022

	Six Months Ended June 30,
	2018			2017
Service cost	$	2,504		$	2,392
Interest cost		2,754			2,678
Expected return on plan assets		(3,268	)		(2,924	)
Amortization of prior service cost		30			(168	)
Amortization of net (gain) loss		1,862			2,066
Net periodic pension cost	$	3,882		$	4,044

For the

three

- and

six

-month periods ended

June 

30,

2018,

the service cost component of net periodic pension cost is included in the same line items of our condensed consolidated financial statements as other employee compensation costs, and the net expense of

$0.7

million and

$1.4

million, respectively, related to all other components of net periodic pension cost is included in other (expense) income on our condensed consolidated statements of operations and comprehensive income (loss). For the

three

- and

six

-month periods ended

June 

30,

2017,

all components of net periodic pension cost are included in the same line items of our condensed consolidated financial statements as other employee compensation costs.

In

April 2018,

we contributed

$1.3

million in cash to our defined benefit plans, and expect to contribute an additional

$2.6

million in cash or shares of our common stock to our defined benefit plans in

2018.

We expect to contribute approximately

$0.5

million to our unfunded supplemental executive retirement plan during

2018.

XML

Note 8 - Shareholders' Equity

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

Note

8.

    Shareholders’ Equity

Stock-based Compensation Plans

We periodically grant restricted stock unit awards, performance-based share awards and shares of common stock to our employees and directors. We measure compensation cost for restricted stock units and stock grants at the closing price of our stock at the time of grant. We measure compensation cost for performance-based grants using a Monte Carlo simulation to estimate their value at grant date. Restricted stock unit and performance-based share grants vest after a specified period with compensation cost amortized over that period. Although we have

no

current plans to issue stock options, we

may

do so in the future.

In

March 2018,

the Board of Directors granted

1,237,369

shares of common stock to employees for payment of long-term incentive compensation for the period ended

December 31, 2017.

The shares were distributed in

March 2018,

and

$4.9

million in expense related to the stock awards was recognized in the periods prior to

March 

31,

2018.

In

June 2018,

the Board of Directors granted the following restricted stock unit awards to employees resulting in a total expense of

$5.6

million:

• 1,322,461 restricted stock units, with one third of those vesting in June 2019, one third vesting in June 2020, and one third vesting in June 2021;

• 96,604 restricted stock units, with one half of those vesting in June 2019 and one -half vesting in June 2020; and

• 28,721 restricted stock units that vest in June 2019.

An expense of

$2.0

million related to the unit awards discussed above vesting in

2019

will be recognized on a straight-line basis over the

twelve

months following the date of the award. An expense of

$1.9

million related to the unit awards discussed above vesting in

2020

will be recognized on a straight-line basis over the

twenty-four

months following the date of the award. An expense of

$1.7

million related to the unit awards discussed above vesting in

2021

will be recognized on a straight-line basis over the

thirty-six

-month period following the date of the award.

In

June 2018,

the Board of Directors granted performance-based share awards to certain executive employees. The value of the awards will be based on the ranking of the market performance of our common stock relative to the performance of the common stock of a group of peer companies over the

three

-year measurement period ending

December 31, 2020.

The number of shares to be issued will be based on the value of the awards divided by the share price at grant date. The expense related to the performance-based awards will be recognized on a straight-line base over the

thirty

months following the date of the award.

Stock-based compensation expense for restricted stock unit and performance-based grants to employees and shares issued to nonemployee directors recorded in the

first

six

months of

2018

totaled

$2.4

million, compared to

$2.8

million in the same period last year.

In connection with the vesting of restricted stock units and other stock grants, employees have in the past, at their election and when permitted by us, chosen to satisfy their minimum tax withholding obligations through net share settlement, pursuant to which the Company withholds the number of shares necessary to satisfy such withholding obligations and pays the obligations in cash.  As a result, in the

first

six

months of

2018

we withheld

697,341

shares valued at approximately

$2.7

million, or approximately

$3.86

per share. In the

first

six

months of

2017

we withheld

488,634

shares valued at approximately

$2.5

million, or approximately

$5.06

per share.

Common Stock Dividends

In

September 2011

and

February 2012,

our Board of Directors adopted a common stock dividend policy that has

two

components: (

1

) a dividend that links the amount of dividends on our common stock to our average quarterly realized silver price in the preceding quarter, and (

2

) a minimum annual dividend of

$0.01

per share of common stock, in each case, payable quarterly, if and when declared. For illustrative purposes only, the table below summarizes potential per share dividend amounts at different quarterly average realized price levels according to the

first

component of the policy:

Quarterly average realized silver price per ounce		Quarterly dividend per share		Annualized dividend per share
	$30		$0.01		$0.04
	$35		$0.02		$0.08
	$40		$0.03		$0.12
	$45		$0.04		$0.16
	$50		$0.05		$0.20

On

August 8, 2018,

our Board of Directors declared a common stock dividend, pursuant to the minimum annual dividend component of the policy described above, of

$0.0025

per share, for a total dividend of approximately

$1.0

million payable in

September 2018.

Because the average realized silver price for the

second

quarter of

2018

was

$16.61

per ounce, below the minimum threshold of

$30

according to the policy,

no

silver-price-linked component was declared or paid. The declaration and payment of common stock dividends is at the sole discretion of our Board of Directors.

At-The-Market Equity Distribution Agreement

Pursuant to an equity distribution agreement dated

February 23, 2016,

we

may

issue and sell shares of our common stock from time to time through ordinary broker transactions having an aggregate offering price of up to

$75

million, with the net proceeds available for general corporate purposes. The terms of sales transactions under the agreement, including trading day(s), number of shares sold in the aggregate, number of shares sold per trading day, and the floor selling price per share, are proposed by us to the sales agent. Whether or

not

we engage in sales from time to time

may

depend on a variety of factors, including share price, our cash resources, customary black-out restrictions, and whether we have any material inside information. The agreement can be terminated by us at any time. The shares issued under the equity distribution agreement are registered under the Securities Act of

1933,

as amended, pursuant to our shelf registration statement on Form S-

3,

which was filed with the SEC on

February 23, 2016.

As of

June 

30,

2018,

we had sold

4,608,847

shares under the agreement for total proceeds of approximately

$17.7

million, net of commissions of approximately

$0.4

million.

No

shares were sold under the agreement during the

first

six

months of

2018.

Common Stock Repurchase Program

On

May 8, 2012,

we announced that our Board of Directors approved a stock repurchase program.  Under the program, we are authorized to repurchase up to

20

million shares of our outstanding common stock from time to time in open market or privately negotiated transactions, depending on prevailing market conditions and other factors.  The repurchase program

may

be modified, suspended or discontinued by us at any time. Whether or

not

we engage in repurchases from time to time

may

depend on a variety of factors, including

not

only price and cash resources, but customary black-out restrictions, whether we have any material inside information, limitations on share repurchases or cash usage that

may

be imposed by our credit agreement or in connection with issuances of securities, alternative uses for cash, applicable law, and other investment opportunities from time to time. As of

June 

30,

2018,

934,100

shares have been purchased at an average price of

$3.99

per share, leaving approximately

19.1

million shares that

may

yet be purchased under the program. The closing price of our common stock at

August 

7,

2018,

was

$2.92

per share.

XML

Note 9 - Debt, Credit Facilities and Capital Leases

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Debt Disclosure [Text Block]

Note

9.

    Debt, Credit Facilities and Capital Leases

Senior Notes

On

April 12, 2013,

we completed an offering of

$500

million in aggregate principal amount of our Senior Notes due

May 1, 2021

in a private placement conducted pursuant to Rule

144A

and Regulation S under the Securities Act of

1933,

as amended, and in

2014,

an additional

$6.5

million aggregate principal amount of the Senior Notes were issued to

one

of our pension plans. The Senior Notes were subsequently exchanged for substantially identical Senior Notes registered with the SEC. The Senior Notes are governed by the Indenture, dated as of

April 12, 2013,

as amended (the "Indenture"), among Hecla Mining Company ("Hecla") and certain of our subsidiaries and The Bank of New York Mellon Trust Company, N.A., as trustee. The net proceeds from the initial offering of the Senior Notes (

$490

million) were used to partially fund the acquisition of Aurizon and for general corporate purposes, including expenses related to the Aurizon acquisition.

The Senior Notes are recorded net of a

2%

initial purchaser discount totaling

$10

million at the time of the

April 2013

issuance and having an unamortized balance of

$3.6

million as of

June 

30,

2018.

The Senior Notes bear interest at a rate of

6.875%

per year from the date of original issuance or from the most recent payment date on which interest has been paid or provided for.  Interest on the Senior Notes is payable on

May 1

and

November 1

of each year, commencing

November 1, 2013.

During the

six

months ended

June 

30,

2018

and

2017,

interest expense related to the Senior Notes and amortization of the initial purchaser discount and fees related to the issuance of the Senior Notes totaled

$18.1

million and

$17.2

million, respectively. The interest expense related to the Senior Notes for the

six

months ended

June 

30,

2017

was net of

$0.9

million in capitalized interest, primarily related to the

#4

Shaft project at our Lucky Friday unit which was completed in

January 2017.

Interest expense for the

six

months ended

June 

30,

2017

also included

$1.1

million in costs related to our private offering of new Senior Notes in

June 2017

and concurrent tender offer to purchase our existing Senior Notes, which were

not

completed.

The Senior Notes are guaranteed on a senior unsecured basis by certain of our subsidiaries (the "Guarantors").   The Senior Notes and the guarantees are, respectively, Hecla's and the Guarantors' general senior unsecured obligations and are subordinated to all of Hecla's and the Guarantors' existing and future secured debt to the extent of the assets securing that secured debt.  In addition, the Senior Notes are effectively subordinated to all of the liabilities of Hecla's subsidiaries that are

not

guaranteeing the Senior Notes, to the extent of the assets of those subsidiaries.

The Senior Notes became redeemable in whole or in part, at any time and from time to time after

May 1, 2016,

on the redemption dates and at the redemption prices specified in the Indenture, plus accrued and unpaid interest, if any, to the date of redemption.

Upon the occurrence of a change of control (as defined in the Indenture), each holder of Senior Notes will have the right to require us to purchase all or a portion of such holder's Senior Notes pursuant to a change of control offer (as defined in the Indenture), at a purchase price equal to

101%

of the principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase, subject to the rights of holders of the Senior Notes on the relevant record date to receive interest due on the relevant interest payment date.

Ressources Québec Notes

On

March 5, 2018,

we entered into a note purchase agreement pursuant to which we issued

CAD$40

million (approximately

USD$30.8

million at the time of the transaction) in aggregate principal amount of our Series

2018

-A Senior Notes due

May 1, 2021 (

the “RQ Notes”) to Ressources Québec, a subsidiary of Investissment Québec, a financing arm of the Québec government. The RQ Notes were issued at a discount of

0.58%,

or

CAD$0.2

million, and bear interest at a rate of

4.68%

per year, payable on

May 1

and

November 1

of each year, commencing

May 1, 2018.

The RQ Notes are senior and unsecured and are pari passu in all material respects with the Senior Notes, including with respect to guarantees of the RQ Notes by certain of our subsidiaries. The net proceeds from the RQ Notes are required to be used for development and expansion of our Casa Berardi mine. During the

six

months ended

June 

30,

2018,

interest expense related to the RQ Notes, including discount and origination fees, totaled

$0.7

million.

Credit Facilities

In

May 2016,

we entered into a

$100

million senior secured revolving credit facility with a

three

-year term, which was amended in

July 2017

to extend the term until

July 14, 2020.

The credit facility is collateralized by the shares of common stock held in our material domestic subsidiaries and by our joint venture interests in the Greens Creek mine, all of our rights and interests in the joint venture agreement, and all of our rights and interests in the assets of the joint venture.  Below is information on the interest rates, standby fee, and financial covenant terms under our credit facility in place as of

June 

30,

2018:

Interest rates:
Spread over the London Interbank Offer Rate	2.25	-	3.25%
Spread over alternative base rate	1.25	-	2.25%
Standby fee per annum on undrawn amounts		0.50%
Covenant financial ratios:
Senior leverage ratio (debt secured by liens/EBITDA)	not more than 2.50:1
Leverage ratio (total debt less unencumbered cash/EBITDA)	not more than 4.00:1
Interest coverage ratio (EBITDA/interest expense)	not less than 3.00:1

We are also able to obtain letters of credit under the facility, and for any such letters we are required to pay a participation fee of between

2.25%

and

3.25%

based on our total leverage ratio, as well as a fronting fee to each issuing bank of

0.20%

annually on the average daily dollar amount of any outstanding letters of credit. There were

$3.0

million in letters of credit outstanding as of

June 

30,

2018.

We believe we were in compliance with all covenants under the credit agreement and

no

amounts were outstanding as of

June 

30,

2018.

  With the exception of the

$3.0

million in letters of credit outstanding, we had

not

drawn funds on the revolving credit facility as of

June 

30,

2018.

However, as discussed in

Note

13

, we entered into a

$200

million revolving credit facility in

July 2018,

which we expect to be increased to

$250

million upon meeting certain conditions, and have drawn

$47.0

million on the facility which is outstanding as of the filing date of this report.

Capital Leases

We have entered into various lease agreements, primarily for equipment at our Greens Creek, Lucky Friday, and Casa Berardi units, which we have determined to be capital leases.  At

June 

30,

2018,

the total liability balance associated with capital leases, including certain purchase option amounts, was

$14.8

million, with

$6.0

million of the liability classified as current and the remaining

$8.8

million classified as non-current. At

December 

31,

2017,

the total liability balance associated with capital leases was

$11.8

million, with

$5.6

million of the liability classified as current and

$6.2

million classified as non-current. The total obligation for future minimum lease payments was

$15.8

million at

June 

30,

2018,

with

$1.0

million attributed to interest.

At

June 

30,

2018,

the annual maturities of capital lease commitments, including interest, are (in thousands):

Twelve-month period ending June 30,
2019	$	6,558
2020		4,368
2021		3,249
2022		1,640
Total		15,815
Less: imputed interest		(1,044	)
Net capital lease obligation	$	14,771

XML

Note 10 - Developments in Accounting Pronouncements

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

Note

10.

    Developments in Accounting Pronouncements

Accounting Standards Updates Adopted

In

May 2014,

the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU")

No.

2014

-

09

Revenue Recognition, replacing guidance currently codified in Subtopic

605

-

10

Revenue Recognition-Overall. The new ASU establishes a new

five

step principles-based framework in an effort to significantly enhance comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets. In

August 2015,

the FASB issued ASU

No.

2015

-

14

Revenue from Contracts with Customers (Topic

606

): Deferral of the Effective Date. ASU

No.

2015

-

14

deferred the effective date of ASU

No.

2014

-

09

until annual and interim reporting periods beginning after

December 15, 2017.

We adopted ASU

No.

2014

-

09

as of

January 1, 2018

using the modified-retrospective transition approach. The impact of adoption of the update to our consolidated financial statements for the

six

months ended

June 30, 2017

would have been a reclassification of

$1.1

million in doré refining costs from sales of products to cost of sales and other direct production costs.

We performed an assessment of the impact of implementation of ASU

No.

2014

-

09,

and concluded it does

not

change the timing of revenue recognition or amounts of revenue recognized compared to how we recognize revenue under our current policies. Our revenues involve a relatively limited number of types of contracts and customers. In addition, our revenue contracts do

not

involve multiple types of performance obligations. Revenues from doré are recognized, and the transaction price is known, at the time the metals sold are delivered to the customer. Concentrate revenues are generally recognized at the time of shipment. Concentrates sold at our Lucky Friday unit typically leave the mine and are received by the customer within the same day. There is a period of time between shipment of concentrates from our Greens Creek unit and their physical receipt by the customer. However, based on our assessment, we believe control of the concentrate parcels is generally obtained by the customer at the time of shipment.

Our concentrate sales involve variable consideration, as they are subject to changes in metals prices between the time of shipment and their final settlement. However, we are able to reasonably estimate the transaction price for the concentrate sales at the time of shipment using forward prices for the month of settlement, and we then adjust the values each period until final settlement. Also, it is unlikely a significant reversal of revenue for any

one

concentrate parcel will occur.

Adoption of ASU

No.

2014

-

09

involves additional disclosures, where applicable, on (i) contracts with customers, (ii) significant judgments and changes in judgments in determining the timing of satisfaction of performance obligations and the transaction price, and (iii) assets recognized for costs to obtain or fulfill contracts. See

Note

6

for information on our sales of products.

In

January 2016,

the FASB issued ASU

No.

2016

-

01

Financial Instruments - Overall (Subtopic

825

-

10

): Recognition and Measurement of Financial Assets and Financial Liabilities. The guidance requires entities to measure equity investments that are

not

accounted for under the equity method at fair value, with any changes in fair value included in current earnings, and updates certain disclosure requirements. The update is effective for fiscal years beginning after

December 15, 2017.

We adopted ASU

No.

2016

-

01

as of

January 1, 2018

using the modified-retrospective approach, with a cumulative-effect adjustment from accumulated other comprehensive loss to retained deficit on our balance sheet of

$1.3

million, net of the income tax effect.

In

August 2016,

the FASB issued ASU

No.

2016

-

15

Statement of Cash Flows (Topic

230

): Classification of Certain Cash Receipts and Cash Payments. The update provides guidance on classification for cash receipts and payments related to

eight

specific issues. The update is effective for fiscal years beginning after

December 15, 2017,

and interim periods within those fiscal years, with early adoption permitted. We adopted this update as of

January 1, 2018.

In

November 2016,

the FASB issued ASU

No.

2016

-

18

Statement of Cash Flows (Topic

230

): Restricted Cash. The update requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The update is effective for fiscal years beginning after

December 15, 2017,

and interim periods within those fiscal years, with early adoption permitted. We adopted this update as of

January 1, 2018.

Cash, cash equivalents, and restricted cash and cash equivalents on the condensed consolidated statement of cash flows includes restricted cash and cash equivalents of

$1.0

million as of

June 

30,

2018

and

December 

31,

2017,

$1.1

million as of

June 30, 2017

and

$2.2

million as of

December 31, 2016,

as well as amounts previously reported for cash and cash equivalents.

In

January 2017,

the FASB issued ASU

No.

2017

-

01

Business Combinations (Topic

805

): Clarifying the Definition of a Business. The update clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The update is effective for fiscal years beginning after

December 15, 2017,

and interim periods within those fiscal years. We will apply the applicable provisions of the update to any acquisitions occurring after the effective date.

In

March 2017,

the FASB issued ASU

No.

2017

-

07

Compensation - Retirement Benefits (Topic

715

): Improving the Presentation of Net Periodic Pension Cost and Net Period Postretirement Benefit Cost. The update provides specific requirements for classification and disclosure regarding the service cost component and other components of net benefit cost related to pension plans. The update is effective for fiscal years beginning after

December 15, 2017,

and interim periods within those fiscal years. We have implemented this update effective

January 1, 2018.

For the full year of

2018,

a total net expense of approximately

$2.8

million for the components of net benefit cost except service cost is expected to be included in other income (expense) on our consolidated statements of operations, and

not

reported in the same line items as other employee compensation costs.

Accounting Standards Updates to Become Effective in Future Periods

In

February 2016,

the FASB issued ASU

No.

2016

-

02

Leases (Topic

842

). The update modifies the classification criteria and requires lessees to recognize the assets and liabilities on the balance sheet for most leases. The update is effective for fiscal years beginning after

December 15, 2018,

with early adoption permitted. We are currently reviewing our leases and compiling the information required to implement the new guidance. See

Note

9

for information on future commitments related to our operating leases; the present value of these leases will be recognized on our balance sheet upon implementation of the new guidance. We are currently evaluating the potential impact of implementing this update on our consolidated financial statements.

In

August 2017,

the FASB issued ASU

No.

2017

-

12

Derivatives and Hedging (Topic

815

): Targeted Improvements to Accounting for Hedging Activities. The objective of the update is to improve the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements, and simplify the application of existing hedge accounting guidance. The update is effective for fiscal years beginning after

December 15, 2018,

and interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the potential impact of implementing this update on our consolidated financial statements.

XML

Note 11 - Derivative Instruments

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Note

11.

    Derivative Instruments

Foreign Currency

Our wholly-owned subsidiaries owning the Casa Berardi and San Sebastian mines are U.S. dollar ("USD")-functional entities which routinely incur expenses denominated in Canadian dollars ("CAD") and Mexican pesos ("MXN"), and such expenses expose us to exchange rate fluctuations between the USD and CAD and MXN. In

April 2016,

we initiated a program to manage our exposure to fluctuations in the exchange rate between the USD and CAD and the impact on our future operating costs denominated in CAD. In

October 2016,

we also initiated a program to manage our exposure to the impact of fluctuations in the exchange rate between the USD and MXN on our future operating costs denominated in MXN. The programs utilize forward contracts to buy CAD and MXN, and each contract is designated as a cash flow hedge. As of

June 

30,

2018,

we have

107

forward contracts outstanding to buy

CAD$256.0

million having a notational amount of

US$198.0

million, and

33

forward contracts outstanding to buy

MXN$226.3

million having a notional amount of

USD$11.3

million. The CAD contracts are related to forecasted cash operating costs at Casa Berardi to be incurred from

2018

through

2021

and have USD-to-CAD exchange rates ranging between

1.2729

and

1.3335.

The MXN contracts are related to forecasted cash operating costs at San Sebastian for

2018

through

2020

and have MXN-to-USD exchange rates ranging between

19.4000

and

20.8550.

Our risk management policy provides for up to

75%

of our planned cost exposure for

five

years into the future to be hedged under such programs, and for potential additional programs to manage other foreign currency-related exposure areas.

As of

June 

30,

2018,

we recorded the following balances for the fair value of the contracts:

• a current asset of $0.1 million, which is included in other current assets;

• a non-current asset of $0.1 million, which is included in other non-current assets;

• a current liability of $1.4 million, which is included in other current liabilities; and

• a non-current liability of $1.0 million, which is included in other non-current liabilities.

Net unrealized losses of approximately

$2.2

million related to the effective portion of the hedges were included in accumulated other comprehensive loss as of

June 

30,

2018,

and are net of deferred taxes. Unrealized gains and losses will be transferred from accumulated other comprehensive loss to current earnings as the underlying operating expenses are recognized. We estimate approximately

$1.3

million in net unrealized losses included in accumulated other comprehensive loss as of

June 

30,

2018

would be reclassified to current earnings in the next

twelve

months. Net realized gains of approximately

$0.4

million on contracts related to underlying expenses which have been recognized were transferred from accumulated other comprehensive loss and included in cost of sales and other direct production costs for the

six

months ended

June 

30,

2018.

Net unrealized gains of approximately

$10

thousand related to ineffectiveness of the hedges were included in current earnings for the

six

months ended

June 

30,

2018.

Metals Prices

At times, we

may

use commodity forward sales commitments, commodity swap contracts and commodity put and call option contracts to manage our exposure to fluctuation in the prices of certain metals we produce. Contract positions are designed to ensure that we will receive a defined minimum price for certain quantities of our production, thereby partially offsetting our exposure to fluctuations in the market. Our risk management policy allows for up to

75%

of our planned metals price exposure for

five

years into the future, with certain other limitations, to be hedged under such programs. These instruments do, however, expose us to (i) credit risk in the form of non-performance by counterparties for contracts in which the contract price exceeds the spot price of a commodity and (ii) price risk to the extent that the spot price exceeds the contract price for quantities of our production covered under contract positions.

We are currently using financially-settled forward contracts to manage the exposure to changes in prices of silver, gold, zinc and lead contained in our concentrate shipments between the time of shipment and final settlement. In addition, we currently use financially-settled forward contracts to manage the exposure to changes in prices of zinc and lead (but

not

silver and gold) contained in our forecasted future concentrate shipments. These contracts are

not

designated as hedges and are marked-to-market through earnings each period.

As of

June 

30,

2018,

we recorded the following balances for the fair value of the contracts:

• a current asset of $2.4 million, which is included in other current assets and is net of $1.2 million for contracts in a fair value current liability position; and

• a non-current asset of $12.3 million, which is included in other non-current assets and is net of $0.2 million for contracts in a fair value non-current liability position.

We recognized a

$3.3

million net gain during the

first

six

months of

2018

on the contracts utilized to manage exposure to prices of metals in our concentrate shipments, which is included in sales of products.  The net gain recognized on the contracts offsets losses related to price adjustments on our provisional concentrate sales due to changes to silver, gold, lead and zinc prices between the time of sale and final settlement.

We recognized a

$20.8

million net gain during the

first

half of

2018

on the contracts utilized to manage exposure to prices for forecasted future concentrate shipments. The net gain on these contracts is included as a separate line item under other income (expense), as they relate to forecasted future shipments, as opposed to sales that have already taken place but are subject to final pricing as discussed in the preceding paragraph.  The net gain for the

first

half of

2018

is the result of decreasing zinc and lead prices. This program, when utilized, is designed to mitigate the impact of potential future declines in lead and zinc prices from the price levels established in the contracts (see average price information below). When those prices increase compared to the contracts, we incur losses on the contracts.

The following tables summarize the quantities of metals committed under forward sales contracts at

June 

30,

2018

and

December 

31,

2017:

June 30, 2018	Ounces/pounds under contract (in 000's)								Average price per ounce/pound
	Silver		Gold		Zinc		Lead		Silver		Gold		Zinc		Lead
	(ounces)		(ounces)		(pounds)		(pounds)		(ounces)		(ounces)		(pounds)		(pounds)
Contracts on provisional sales
2018 settlements		1,114		5		20,889		4,960	$	16.50	$	1,298	$	1.38	$	1.07
Contracts on forecasted sales
2018 settlements		—		—		9,039		5,787		N/A		N/A	$	1.34	$	1.09
2019 settlements		—		—		48,502		20,283		N/A		N/A	$	1.40	$	1.10
2020 settlements		—		—		42,329		19,401		N/A		N/A	$	1.40	$	1.13
2021 settlements		—		—		—		4,409		N/A		N/A		N/A	$	1.07

December 31, 2017	Ounces/pounds under contract (in 000's)								Average price per ounce/pound
	Silver		Gold		Zinc		Lead		Silver		Gold		Zinc		Lead
	(ounces)		(ounces)		(pounds)		(pounds)		(ounces)		(ounces)		(pounds)		(pounds)
Contracts on provisional sales
2018 settlements		1,447		5		21,550		4,740	$	16.64	$	1,279	$	1.45	$	1.11
Contracts on forecasted sales
2018 settlements		—		—		32,187		16,645		N/A		N/A	$	1.29	$	1.06
2019 settlements		—		—		23,589		18,078		N/A		N/A	$	1.33	$	1.09
2020 settlements		—		—		3,307		2,866		N/A		N/A	$	1.27	$	1.08

Credit-risk-related Contingent Features

Certain of our derivative contracts contain cross default provisions which provide that a default under our revolving credit agreement would cause a default under the derivative contract. As of

June 

30,

2018,

we have

not

posted any collateral related to these agreements. The fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was

$3.7

million as of

June 

30,

2018.

If we were in breach of any of these provisions at

June 

30,

2018,

we could have been required to settle our obligations under the agreements at their termination value of

$3.7

million.

XML

Note 12 - Fair Value Measurement

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Fair Value Disclosures [Text Block]

Note

12.

    Fair Value Measurement

The table below sets forth our assets and liabilities that were accounted for at fair value on a recurring basis and the fair value calculation input hierarchy level that we have determined applies to each asset and liability category (in thousands).

Description	Balance at June 30, 2018		Balance at December 31, 2017		Input Hierarchy Level
Assets:
Cash and cash equivalents:
Money market funds and other bank deposits	$	239,722	$	186,107	Level 1
Available for sale securities:
Debt securities - municipal and corporate bonds		5,556		33,758	Level 2
Equity securities – mining industry		7,449		7,561	Level 1
Trade accounts receivable:
Receivables from provisional concentrate sales		9,717		14,805	Level 2
Restricted cash balances:
Certificates of deposit and other deposits		1,005		1,032	Level 1
Derivative contracts:
Foreign exchange contracts		172		4,943	Level 2
Metal forward contracts		14,705		—	Level 2
Total assets	$	278,326	$	248,206
Liabilities:
Derivative contracts:
Foreign exchange contracts	$	2,330	$	—	Level 2
Metal forward contracts		—		15,531	Level 2
Total Liabilities	$	2,330	$	15,531

Cash and cash equivalents consist primarily of money market funds and are valued at cost, which approximates fair value, and a small portion consists of municipal bonds having maturities of less than

90

days, which are recorded at fair value.

Current available-for-sale securities consist of municipal and corporate bonds having maturities of more than

90

days, which are recorded at fair value.

Current and non-current restricted cash balances consist primarily of certificates of deposit, U.S. Treasury securities, and other deposits and are valued at cost, which approximates fair value.

Our non-current available for sale securities consist of marketable equity securities of companies in the mining industry which are valued using quoted market prices for each security.

Trade accounts receivable include amounts due to us for shipments of concentrates and doré sold to customers.  Revenues and the corresponding accounts receivable for sales of metals products are recorded when title and risk of loss transfer to the customer (generally at the time of ship loading, or at the time of customer arrival for trucked products).  Sales of concentrates are recorded using estimated forward prices for the anticipated month of settlement applied to our estimate of payable metal quantities contained in each shipment.  Sales are recorded net of estimated treatment and refining charges, which are also impacted by changes in metals prices and quantities of contained metals.  We estimate the prices at which sales of our concentrates will be settled due to the time elapsed between shipment and final settlement with the customer.  Receivables for previously recorded concentrate sales are adjusted to reflect estimated forward metals prices at the end of each period until final settlement by the customer.  We obtain the forward metals prices used each period from a pricing service.  Changes in metal prices between shipment and final settlement result in changes to revenues previously recorded upon shipment.  The embedded derivative contained in our concentrate sales is adjusted to fair market value through earnings each period prior to final settlement.

We use financially-settled forward contracts to manage exposure to changes in the exchange rate between the USD and CAD and MXN, and the impact on CAD- and MXN-denominated operating costs incurred at our Casa Berardi and San Sebastian units (see

Note

11

for more information). These contracts qualify for hedge accounting, with unrealized gains and losses related to the effective portion of the contracts included in accumulated other comprehensive loss, and unrealized gains and losses related to the ineffective portion of the contracts included in earnings each period. The fair value of each contract represents the present value of the difference between the forward exchange rate for the contract settlement period as of the measurement date and the contract settlement exchange rate.

We use financially-settled forward contracts to manage the exposure to changes in prices of silver, gold, zinc and lead contained in our concentrate shipments that have

not

reached final settlement.  We also use financially-settled forward contracts to manage the exposure to changes in prices of zinc and lead contained in our forecasted future concentrate shipments (see

Note

11

for more information).  These contracts do

not

qualify for hedge accounting, and are marked-to-market through earnings each period.  The fair value of each contract represents the present value of the difference between the forward metal price for the contract settlement period as of the measurement date and the contract settlement metal price.

Our Senior Notes, which were recorded at their carrying value of

$502.9

million, net of unamortized initial purchaser discount at

June 

30,

2018

of

$3.6

million, had a fair value of

$511.8

million at

June 

30,

2018.

Quoted market prices, which we consider to be Level

1

inputs, are utilized to estimate fair values of the Senior Notes. See

Note

9

for more information.

XML

Note 13 - Subsequent Events

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Subsequent Events [Text Block]

Note

13.

Subsequent Events

Acquisition of Klondex Mines Ltd.

On

July 20, 2018,

we acquired all of the issued and outstanding common shares of Klondex Mines Ltd. ("Klondex") for consideration valued at

$2.24

per Klondex share (the "Arrangement"). Under the terms of the Arrangement, each holder of Klondex common shares had the option to receive either (i)

$2.47

in cash (the “Cash Alternative”), (ii)

0.6272

of a Hecla share per Klondex share (the “Share Alternative”), or (iii)

US$0.8411

in cash and

0.4136

of a Hecla share per Klondex share (the “Combined Alternative”), subject in the case of the Cash Alternative and the Share Alternative to pro-ration based on a maximum cash consideration of

$153.2

million and a maximum number of Hecla shares issued of

75,276,176.

Klondex shareholders also received shares of a newly formed company which holds the Canadian assets of Klondex. Klondex had

180,499,319

issued and outstanding common shares prior to consummation of the Arrangement. An additional

1,549,626

Klondex common shares were issued immediately prior to consummation of the Arrangement related to conversion of in-the-money Klondex share options and certain outstanding restricted share units, resulting in a total of

182,048,945

issued and outstanding Klondex common shares at the time of consummation of the Arrangement. In connection with the Arrangement, we also issued an aggregate of

4,136,000

warrants to purchase

one

share of our common stock (“Hecla Warrants”) to holders of warrants to purchase Klondex’s common stock. An aggregate of

2,068,000

Hecla Warrants have an exercise price of

$8.02

and expire in

April 2032.

An aggregate of

2,068,000

Hecla Warrants have an exercise price of

$1.57

and expire in

February 2029.

In addition, we settled share-based payment awards held by Klondex directors and employees for cash of

$2.0

million. Consideration transferred to consummate the Arrangement was comprised of total cash paid by us of

$155.2

million, issuance of

75,276,176

shares of our common stock valued at

$242.4

million, and issuance of the Hecla Warrants valued at

$10.1

million, for total estimated consideration of

$407.7

 million. The calculation of consideration is preliminary and subject to change upon completion of the detailed valuation of assets acquired and liabilities assumed through the Arrangement.

Under the Arrangement, we also subscribed for

$7.0

million of common shares of a new company which holds the Canadian assets previously owned by Klondex.

Revolving Credit Facility

On

July 16, 2018,

we entered into a

$200

million senior secured revolving credit facility which replaced our previous

$100

million credit facility and has a term ending on

June 14, 2022,

provided, however, that if we do

not

refinance our outstanding Senior Notes due

May 1, 2021

by

November 1, 2020,

the term of the credit facility ends on

November 1, 2020.

We expect the credit facility to increase to

$250

million upon meeting certain conditions, including adding certain subsidiaries of Klondex as borrowers under the credit facility and pledging the assets of those subsidiaries as additional collateral under the credit facility. The credit facility is collateralized by the shares of common stock held in our material domestic subsidiaries and by our joint venture interests in the Greens Creek mine, all of our rights and interests in the joint venture agreement, and all of our rights and interests in the assets of the joint venture.  Below is information on the interest rates, standby fee, and financial covenant terms under our current credit facility:

Interest rates:
Spread over the London Interbank Offer Rate	2.25	-	3.25%
Spread over alternative base rate	1.25	-	2.25%
Standby fee per annum on undrawn amounts		0.50%
Covenant financial ratios:
Senior leverage ratio (debt secured by liens/EBITDA)	not more than 2.50:1
Leverage ratio (total debt less unencumbered cash/EBITDA) (1)	not more than 4.00:1
Interest coverage ratio (EBITDA/interest expense)	not less than 3.00:1

(

1

)

The leverage ratio will change to

4.50:1

from

September 30, 2018

to

December 31, 2019,

and will revert back to

4.00:1

effective

January 1, 2020.          

Since entering into the new credit facility we have drawn funds totaling

$47.0

million, which is outstanding as of the filing date of this report. Interest on borrowings on the credit facility is payable on

March 31,

June 30,

September 30,

and

December 31

of each year. We are also able to obtain letters of credit under the facility, and for any such letters we are required to pay a participation fee of between

2.25%

and

3.25%

based on our total leverage ratio, as well as a fronting fee to each issuing bank of

0.20%

annually on the average daily dollar amount of any outstanding letters of credit. There were

$3.0

million in letters of credit outstanding as of the filing date of this report.

XML

Note 14 - Guarantor Subsidiaries

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Guarantor Subsidiaries [Text Block]

Note

14.

    Guarantor Subsidiaries

Presented below are Hecla’s unaudited interim condensed consolidating financial statements as required by Rule

3

-

10

of Regulation S-

X

of the Securities Exchange Act of

1934,

as amended, resulting from the guarantees by certain of Hecla's subsidiaries (the "Guarantors") of the Senior Notes and the RQ Notes (see

Note

9

for more information). The Guarantors consist of the following of Hecla's

100%

-owned subsidiaries: Hecla Limited; Silver Hunter Mining Company; Rio Grande Silver, Inc.; Hecla MC Subsidiary, LLC; Hecla Silver Valley, Inc.; Burke Trading, Inc.; Hecla Montana, Inc.; Revett Silver Company; RC Resources, Inc.; Troy Mine Inc.; Revett Exploration, Inc.; Revett Holdings, Inc.; Mines Management, Inc.; Newhi Corp.; Montanore Minerals Corp.; Hecla Alaska LLC; Hecla Greens Creek Mining Company; Hecla Admiralty Company; and Hecla Juneau Mining Company. We completed the initial offering of the Senior Notes on

April 12, 2013,

and a related exchange offer for virtually identical notes registered with the SEC on

January 3, 2014.

We issued the RQ Notes on

March 5, 2018.

The unaudited interim condensed consolidating financial statements below have been prepared from our financial information on the same basis of accounting as the unaudited interim condensed consolidated financial statements set forth elsewhere in this report. Investments in the subsidiaries are accounted for under the equity method. Accordingly, the entries necessary to consolidate Hecla, the Guarantors, and our non-guarantor subsidiaries are reflected in the intercompany eliminations column. In the course of preparing consolidated financial statements, we eliminate the effects of various transactions conducted between Hecla and its subsidiaries and among the subsidiaries. While valid at an individual subsidiary level, such activities are eliminated in consolidation because, when taken as a whole, they do

not

represent business activity with

third

-party customers, vendors, and other parties. Examples of such eliminations include the following:

• Investments in subsidiaries . The acquisition of a company results in an investment in debt or equity capital on the records of the parent company and a contribution to debt or equity capital on the records of the subsidiary. Such investments and capital contributions are eliminated in consolidation.

• Capital contributions . Certain of Hecla's subsidiaries do not generate cash flow, either at all or sufficient to meet their capital needs, and their cash requirements are routinely met with inter-company advances from their parent companies. On at least an annual basis, when not otherwise intended as debt, the boards of directors of such parent companies declare contributions of capital to their subsidiary companies, which increase the parents' investment and the subsidiaries' additional paid-in capital. In consolidation, investments in subsidiaries and related additional paid-in capital are eliminated.

• Debt. Inter-company debt agreements have been established between certain of Hecla's subsidiaries and their parents. The related debt liability and receivable balances, accrued interest expense (if any) and income activity (if any), and payments of principal and accrued interest amounts (if any) by the subsidiary companies to their parents are eliminated in consolidation.

• Dividends. Certain of Hecla's subsidiaries which generate cash flow routinely provide cash to their parent companies through inter-company transfers. On at least an annual basis, the boards of directors of such subsidiary companies declare dividends to their parent companies, which reduces the subsidiaries' retained earnings and increases the parents' dividend income. In consolidation, such activity is eliminated.

• Deferred taxes . Our ability to realize deferred tax assets and liabilities is considered on a consolidated basis for subsidiaries within the United States, with all subsidiaries' estimated future taxable income contributing to the ability to realize all such assets and liabilities. However, when Hecla's subsidiaries are viewed independently, we use the separate return method to assess the realizability of each subsidiary's deferred tax assets and whether a valuation allowance is required against such deferred tax assets. In some instances, a parent company or subsidiary may possess deferred tax assets whose realization depends on the future taxable incomes of other subsidiaries on a consolidated-return basis, but would not be considered realizable if such parent or subsidiary filed on a separate stand-alone basis. In such a situation, a valuation allowance is assessed on that subsidiary's deferred tax assets, with the resulting adjustment reported in the eliminations column of the guarantor and parent's financial statements, as is the case in the unaudited interim financial statements set forth below. The separate return method can result in significant eliminations of deferred tax assets and liabilities and related income tax provisions and benefits. Non-current deferred tax asset balances are included in other non-current assets on the consolidating balance sheets and make up a large portion of that item, particularly for the guarantor balances.

Separate financial statements of the Guarantors are

not

presented because the guarantees by the Guarantors are joint and several and full and unconditional, except for certain customary release provisions, including: (

1

) the sale or disposal of all or substantially all of the assets of the Guarantor; (

2

) the sale or other disposition of the capital stock of the Guarantor; (

3

) the Guarantor is designated as an unrestricted entity in accordance with the applicable provisions of the indenture; (

4

) Hecla ceases to be a borrower as defined in the indenture; and (

5

) upon legal or covenant defeasance or satisfaction and discharge of the indenture.

Unaudited Interim Condensed Consolidating Balance Sheets

	As of June 30, 2018
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Assets
Cash and cash equivalents	$	163,357		$	24,387		$	51,978		$	—		$	239,722
Other current assets		18,609			44,279			49,822			(70	)		112,640
Properties, plants, and equipment - net		1,927			1,246,318			758,347			—			2,006,592
Intercompany receivable (payable)		281,519			(145,439	)		(332,954	)		196,874			—
Investments in subsidiaries		1,379,384			—			—			(1,379,384	)		—
Other non-current assets		23,669			8,357			8,296			(6,682	)		33,640
Total assets	$	1,868,465		$	1,177,902		$	535,489		$	(1,189,262	)	$	2,392,594
Liabilities and Stockholders' Equity
Current liabilities	$	(212,784	)	$	77,213		$	39,180		$	201,724		$	105,333
Long-term debt		533,230			5,825			2,932			—			541,987
Non-current portion of accrued reclamation		—			66,157			11,945			—			78,102
Non-current deferred tax liability		—			11,916			112,148			(11,602	)		112,462
Other non-current liabilities		46,720			5,584			1,107			—			53,411
Stockholders' equity		1,501,299			1,011,207			368,177			(1,379,384	)		1,501,299
Total liabilities and stockholders' equity	$	1,868,465		$	1,177,902		$	535,489		$	(1,189,262	)	$	2,392,594

	As of December 31, 2017
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Assets
Cash and cash equivalents	$	103,878		$	31,016		$	51,213		$	—		$	186,107
Other current assets		47,555			47,608			39,630			(575	)		134,218
Properties, plants, and equipment - net		1,946			1,244,161			773,914			—			2,020,021
Intercompany receivable (payable)		287,310			(177,438	)		(341,182	)		231,310			—
Investments in subsidiaries		1,358,025			—			—			(1,358,025	)		—
Other non-current assets		14,409			7,289			9,283			(6,370	)		24,611
Total assets	$	1,813,123		$	1,152,636		$	532,858		$	(1,133,660	)	$	2,364,957
Liabilities and Stockholders' Equity
Current liabilities	$	(226,576	)	$	66,550		$	37,671		$	234,485		$	112,130
Long-term debt		502,229			2,303			3,890			—			508,422
Non-current portion of accrued reclamation		—			67,565			11,801			—			79,366
Non-current deferred tax liability		—			10,120			121,546			(10,120	)		121,546
Other non-current liabilities		53,588			5,185			838			—			59,611
Stockholders' equity		1,483,882			1,000,913			357,112			(1,358,025	)		1,483,882
Total liabilities and stockholders' equity	$	1,813,123		$	1,152,636		$	532,858		$	(1,133,660	)	$	2,364,957

Unaudited Interim Condensed Consolidating Statements of Operations

	Three Months Ended June 30, 2018
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Revenues	$	2,697		$	75,197		$	69,365		$	—		$	147,259
Cost of sales		(73	)		(37,489	)		(42,878	)		—			(80,440	)
Depreciation, depletion, amortization		—			(11,996	)		(19,821	)		—			(31,817	)
General and administrative		(4,615	)		(4,602	)		(570	)		—			(9,787	)
Exploration and pre-development		(72	)		(3,064	)		(6,117	)		—			(9,253	)
Research and development		—			(1,579	)		(758	)		—			(2,337	)
Gain on derivative contracts		16,804			—			—			—			16,804
Acquisition costs		(940	)		(68	)		(2	)		—			(1,010	)
Foreign exchange gain (loss)		(5,731	)		(74	)		8,281			—			2,476
Lucky Friday suspension-related costs		—			(6,801	)		—			—			(6,801	)
Equity in earnings of subsidiaries		5,745			—			—			(5,745	)		—
Other expense		(1,741	)		(1,616	)		(5,522	)		(3,714	)		(12,593	)
Income (loss) before income taxes		12,074			7,908			1,978			(9,459	)		12,501
(Provision) benefit from income taxes		—			(3,715	)		(426	)		3,714			(427	)
Net income (loss)		12,074			4,193			1,552			(5,745	)		12,074
Preferred stock dividends		(138	)		—			—			—			(138	)
Income (loss) applicable to common stockholders		11,936			4,193			1,552			(5,745	)		11,936
Net income (loss)		12,074			4,193			1,552			(5,745	)		12,074
Changes in comprehensive income (loss)		(5,162	)		—			—			—			(5,162	)
Comprehensive income (loss)	$	6,912		$	4,193		$	1,552		$	(5,745	)	$	6,912

	Six Months Ended June 30, 2018
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Revenues	$	3,312		$	145,408		$	138,248		$	—		$	286,968
Cost of sales		402			(72,190	)		(81,521	)		—			(153,309	)
Depreciation, depletion, amortization		—			(23,256	)		(36,615	)		—			(59,871	)
General and administrative		(8,448	)		(8,050	)		(1,024	)		—			(17,522	)
Exploration and pre-development		(127	)		(5,003	)		(12,488	)		—			(17,618	)
Research and development		—			(2,061	)		(1,712	)		—			(3,773	)
Loss on derivative contracts		20,811			—			—			—			20,811
Acquisition costs		(3,300	)		(68	)		(149	)		—			(3,517	)
Foreign exchange gain (loss)		(14,435	)		(74	)		19,577			—			5,068
Lucky Friday suspension-related costs		—			(11,818	)		—			—			(11,818	)
Equity in earnings of subsidiaries		23,513			—			—			(23,513	)		—
Other expense		(1,414	)		(3,393	)		(9,901	)		(9,202	)		(23,910	)
Income (loss) before income taxes		20,314			19,495			14,415			(32,715	)		21,509
(Provision) benefit from income taxes		—			(9,203	)		(1,194	)		9,202			(1,195	)
Net income (loss)		20,314			10,292			13,221			(23,513	)		20,314
Preferred stock dividends		(276	)		—			—			—			(276	)
Income (loss) applicable to common stockholders		20,038			10,292			13,221			(23,513	)		20,038
Net income (loss)		20,314			10,292			13,221			(23,513	)		20,314
Changes in comprehensive income (loss)		(7,266	)		—			38			(38	)		(7,266	)
Comprehensive income (loss)	$	13,048		$	10,292		$	13,259		$	(23,551	)	$	13,048

	Three Months Ended June 30, 2017
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Revenues	$	807		$	70,344		$	63,128		$	—		$	134,279
Cost of sales		(186	)		(40,816	)		(36,501	)		—			(77,503	)
Depreciation, depletion, amortization		—			(13,502	)		(12,067	)		—			(25,569	)
General and administrative		(5,721	)		(4,094	)		(494	)		—			(10,309	)
Exploration and pre-development		(66	)		(2,496	)		(4,343	)		—			(6,905	)
Research and development		—			(312	)		—			—			(312	)
Gain on derivative contracts		2,487			—			—			—			2,487
Foreign exchange gain (loss)		7,666			1			(11,550	)		—			(3,883	)
Lucky Friday suspension costs		—			(8,024	)		—			—			(8,024	)
Equity in earnings of subsidiaries		(2,355	)		—			—			2,355			—
Other (expense) income		(29,115	)		(1,557	)		(2,400	)		20,890			(12,182	)
Income (loss) before income taxes		(26,483	)		(456	)		(4,227	)		23,245			(7,921	)
(Provision) benefit from income taxes		—			1,068			3,727			(20,890	)		(16,095	)
Net income (loss)		(26,483	)		612			(500	)		2,355			(24,016	)
Preferred stock dividends		(138	)		—			—			—			(138	)
Income (loss) applicable to common stockholders		(26,621	)		612			(500	)		2,355			(24,154	)
Net income (loss)		(26,483	)		612			(500	)		2,355			(24,016	)
Changes in comprehensive income (loss)		2,878			—			847			(847	)		2,878
Comprehensive income (loss)	$	(23,605	)	$	612		$	347		$	1,508		$	(21,138	)

	Six Months Ended June 30, 2017
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Revenues	$	(3,286	)	$	153,297		$	126,812		$	—		$	276,823
Cost of sales		(334	)		(83,588	)		(72,257	)		—			(156,179	)
Depreciation, depletion, amortization		—			(29,268	)		(25,253	)		—			(54,521	)
General and administrative		(12,190	)		(6,413	)		(912	)		—			(19,515	)
Exploration and pre-development		(310	)		(4,397	)		(7,964	)		—			(12,671	)
Research and development		—			(995	)		—			—			(995	)
Loss on derivative contracts		(5,322	)		—			—			—			(5,322	)
Foreign exchange gain (loss)		10,133			(43	)		(16,235	)		—			(6,145	)
Lucky Friday suspension costs		—			(9,605	)		—			—			(9,605	)
Equity in earnings of subsidiaries		346			—			—			(346	)		—
Other (expense) income		13,781			(2,409	)		(9,470	)		(23,930	)		(22,028	)
Income (loss) before income taxes		2,818			16,579			(5,279	)		(24,276	)		(10,158	)
(Provision) benefit from income taxes		—			(7,901	)		(3,053	)		23,930			12,976
Net income (loss)		2,818			8,678			(8,332	)		(346	)		2,818
Preferred stock dividends		(276	)		—			—			—			(276	)
Income (loss) applicable to common stockholders		2,542			8,678			(8,332	)		(346	)		2,542
Net income (loss)		2,818			8,678			(8,332	)		(346	)		2,818
Changes in comprehensive income (loss)		6,082			—			758			(758	)		6,082
Comprehensive income (loss)	$	8,900		$	8,678		$	(7,574	)	$	(1,104	)	$	8,900

Unaudited Interim Condensed Consolidating Statements of Cash Flows

	Six Months Ended June 30, 2018
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Cash flows from operating activities	$	27,981		$	60,805		$	2,166		$	(43,934	)	$	47,018
Cash flows from investing activities:
Additions to properties, plants, and equipment		—			(25,454	)		(17,850	)		—			(43,304	)
Other investing activities, net		6,294			44			420			21,359			28,117
Cash flows from financing activities:
Dividends paid to stockholders		(2,276	)		—			—			—			(2,276	)
Issuance of debt		31,024			—			—			—			31,024
Payments on debt		—			(1,393	)		(2,369	)		—			(3,762	)
Other financing activity		(3,544	)		(40,658	)		18,930			22,575			(2,697	)
Effect of exchange rate changes on cash		—			—			(532	)		—			(532	)
Changes in cash, cash equivalents and restricted cash and cash equivalents		59,479			(6,656	)		765			—			53,588
Beginning cash, cash equivalents and restricted cash and cash equivalents		103,878			32,048			51,213			—			187,139
Ending cash, cash equivalents and restricted cash and cash equivalents	$	163,357		$	25,392		$	51,978		$	—		$	240,727

	Six Months Ended June 30, 2017
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Cash flows from operating activities	$	9,131		$	13,792		$	10,757		$	12,141		$	45,821
Cash flows from investing activities:
Additions to properties, plants, and equipment		—			(19,132	)		(26,832	)					(45,964	)
Other investing activities, net		(8,500	)		164			(22	)		(424	)		(8,782	)
Cash flows from financing activities:
Dividends paid to stockholders		(2,257	)		—			—						(2,257	)
Payments on debt		—			(3,044	)		(671	)					(3,715	)
Other financing activity		(11,169	)		9,501			20,430			(11,717	)		7,045
Effect of exchange rate changes on cash		—			—			1,086			—			1,086
Changes in cash, cash equivalents and restricted cash and cash equivalents		(12,795	)		1,281			4,748			—			(6,766	)
Beginning cash, cash equivalents and restricted cash and cash equivalents		113,275			26,588			32,114			—			171,977
Ending cash, cash equivalents and restricted cash and cash equivalents	$	100,480		$	27,869		$	36,862		$	—		$	165,211

XML

Note 2 - Investments (Tables)

6 Months Ended

Jun. 30, 2018

Notes Tables

Available-for-sale Securities [Table Text Block]

	June 30, 2018							December 31, 2017
	Amortized cost		Unrealized loss			Fair value		Amortized cost		Unrealized loss			Fair value
Corporate bonds	$	5,559	$	(3	)	$	5,556	$	33,778	$	(20	)	$	33,758

XML

Note 3 - Income Taxes (Tables)

6 Months Ended

Jun. 30, 2018

Notes Tables

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Current:
Domestic	$	1		$	—		$	1		$	(12,798	)
Foreign		2,965			15,935			4,171			21,451
Total current income tax provision (benefit)		2,966			15,935			4,172			8,653
Deferred:
Domestic		—			2,965			—			(15,939	)
Foreign		(2,539	)		(2,805	)		(2,977	)		(5,690	)
Total deferred income tax provision (benefit)		(2,539	)		160			(2,977	)		(21,629	)
Total income tax provision (benefit)	$	427		$	16,095		$	1,195		$	(12,976	)

XML

Note 6 - Business Segments and Sales of Products (Tables)

6 Months Ended

Jun. 30, 2018

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Net sales to unaffiliated customers:
Greens Creek	$	74,605		$	71,339		$	140,455		$	130,189
Lucky Friday		3,287			(187	)		8,264			19,823
Casa Berardi		56,103			43,822			111,651			85,534
San Sebastian		13,264			19,305			26,598			41,277
	$	147,259		$	134,279		$	286,968		$	276,823
Income (loss) from operations:
Greens Creek	$	25,516		$	15,418		$	48,668		$	29,532
Lucky Friday		(5,261	)		(8,212	)		(9,407	)		(4,332	)
Casa Berardi		1,014			(1,708	)		4,264			(3,953	)
San Sebastian		(361	)		11,892			4,656			25,346
Other		(17,152	)		(13,415	)		(32,476	)		(26,747	)
	$	3,756		$	3,975		$	15,705		$	19,846

Reconciliation of Assets from Segment to Consolidated [Table Text Block]

	June 30, 2018		December 31, 2017
Identifiable assets:
Greens Creek	$	678,862	$	671,960
Lucky Friday		429,213		432,400
Casa Berardi		792,891		804,505
San Sebastian		68,812		62,198
Other		424,016		393,894
	$	2,393,794	$	2,364,957

Schedules of Concentration of Risk, by Risk Factor [Table Text Block]

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Greens Creek		51	%		53	%		49	%		47	%
Lucky Friday		2	%		—	%		3	%		7	%
Casa Berardi		38	%		33	%		39	%		31	%
San Sebastian		9	%		14	%		9	%		15	%
		100	%		100	%		100	%		100	%

Revenue from External Customers by Products and Services [Table Text Block]

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Silver	$	38,425		$	46,077		$	73,647		$	97,434
Gold		77,635			66,975			150,679			129,676
Lead		10,690			8,101			19,917			21,720
Zinc		27,614			20,500			57,723			50,365
Less: Smelter and refining charges		(7,105	)		(7,374	)		(14,998	)		(22,372	)
	$	147,259		$	134,279		$	286,968		$	276,823

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Doré and metals from doré	$	75,526	$	67,533	$	149,018	$	136,513
Lead concentrate		42,149		44,087		76,483		93,004
Zinc concentrate		22,579		16,344		48,231		40,562
Bulk concentrate		4,309		5,508		9,925		10,029
Total, excluding gains/losses on forward contracts	$	144,563	$	133,472	$	283,657	$	280,108

Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block]

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Canada	$	94,524	$	83,215	$	183,192	$	183,434
Korea		41,537		18,972		74,240		47,943
Japan		3,897		11,804		17,670		24,094
China		198		15,401		67		15,352
United States		4,407		4,080		8,488		9,285
Total, excluding gains/losses on forward contracts	$	144,563	$	133,472	$	283,657	$	280,108

Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block]

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
CIBC		28	%		23	%		38	%		24	%
Scotia		18	%		23	%		10	%		22	%
Korea Zinc		28	%		14	%		26	%		17	%
Teck Metals Ltd.		17	%		15	%		11	%		15	%
Trafigura		—	%		12	%		—	%		6	%

XML

Note 7 - Employee Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2018

Notes Tables

Schedule of Net Benefit Costs [Table Text Block]

	Three Months Ended June 30,
	2018			2017
Service cost	$	1,252		$	1,196
Interest cost		1,377			1,339
Expected return on plan assets		(1,634	)		(1,462	)
Amortization of prior service cost		15			(84	)
Amortization of net loss		931			1,033
Net periodic pension cost	$	1,941		$	2,022

	Six Months Ended June 30,
	2018			2017
Service cost	$	2,504		$	2,392
Interest cost		2,754			2,678
Expected return on plan assets		(3,268	)		(2,924	)
Amortization of prior service cost		30			(168	)
Amortization of net (gain) loss		1,862			2,066
Net periodic pension cost	$	3,882		$	4,044

XML

Note 8 - Shareholders' Equity (Tables)

6 Months Ended

Jun. 30, 2018

Notes Tables

Schedule of Potential Per Share Dividend Amounts Quarterly Price Levels [Table Text Block]

Quarterly average realized silver price per ounce		Quarterly dividend per share		Annualized dividend per share
	$30		$0.01		$0.04
	$35		$0.02		$0.08
	$40		$0.03		$0.12
	$45		$0.04		$0.16
	$50		$0.05		$0.20

XML

Note 9 - Debt, Credit Facilities and Capital Leases (Tables)

6 Months Ended

Jun. 30, 2018

Notes Tables

Schedule of Line of Credit Facilities [Table Text Block]

Interest rates:
Spread over the London Interbank Offer Rate	2.25	-	3.25%
Spread over alternative base rate	1.25	-	2.25%
Standby fee per annum on undrawn amounts		0.50%
Covenant financial ratios:
Senior leverage ratio (debt secured by liens/EBITDA)	not more than 2.50:1
Leverage ratio (total debt less unencumbered cash/EBITDA)	not more than 4.00:1
Interest coverage ratio (EBITDA/interest expense)	not less than 3.00:1

Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block]

Twelve-month period ending June 30,
2019	$	6,558
2020		4,368
2021		3,249
2022		1,640
Total		15,815
Less: imputed interest		(1,044	)
Net capital lease obligation	$	14,771

XML

Note 11 - Derivative Instruments (Tables)

6 Months Ended

Jun. 30, 2018

Notes Tables

Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block]

June 30, 2018	Ounces/pounds under contract (in 000's)								Average price per ounce/pound
	Silver		Gold		Zinc		Lead		Silver		Gold		Zinc		Lead
	(ounces)		(ounces)		(pounds)		(pounds)		(ounces)		(ounces)		(pounds)		(pounds)
Contracts on provisional sales
2018 settlements		1,114		5		20,889		4,960	$	16.50	$	1,298	$	1.38	$	1.07
Contracts on forecasted sales
2018 settlements		—		—		9,039		5,787		N/A		N/A	$	1.34	$	1.09
2019 settlements		—		—		48,502		20,283		N/A		N/A	$	1.40	$	1.10
2020 settlements		—		—		42,329		19,401		N/A		N/A	$	1.40	$	1.13
2021 settlements		—		—		—		4,409		N/A		N/A		N/A	$	1.07

December 31, 2017	Ounces/pounds under contract (in 000's)								Average price per ounce/pound
	Silver		Gold		Zinc		Lead		Silver		Gold		Zinc		Lead
	(ounces)		(ounces)		(pounds)		(pounds)		(ounces)		(ounces)		(pounds)		(pounds)
Contracts on provisional sales
2018 settlements		1,447		5		21,550		4,740	$	16.64	$	1,279	$	1.45	$	1.11
Contracts on forecasted sales
2018 settlements		—		—		32,187		16,645		N/A		N/A	$	1.29	$	1.06
2019 settlements		—		—		23,589		18,078		N/A		N/A	$	1.33	$	1.09
2020 settlements		—		—		3,307		2,866		N/A		N/A	$	1.27	$	1.08

XML

Note 12 - Fair Value Measurement (Tables)

6 Months Ended

Jun. 30, 2018

Notes Tables

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

Description	Balance at June 30, 2018		Balance at December 31, 2017		Input Hierarchy Level
Assets:
Cash and cash equivalents:
Money market funds and other bank deposits	$	239,722	$	186,107	Level 1
Available for sale securities:
Debt securities - municipal and corporate bonds		5,556		33,758	Level 2
Equity securities – mining industry		7,449		7,561	Level 1
Trade accounts receivable:
Receivables from provisional concentrate sales		9,717		14,805	Level 2
Restricted cash balances:
Certificates of deposit and other deposits		1,005		1,032	Level 1
Derivative contracts:
Foreign exchange contracts		172		4,943	Level 2
Metal forward contracts		14,705		—	Level 2
Total assets	$	278,326	$	248,206
Liabilities:
Derivative contracts:
Foreign exchange contracts	$	2,330	$	—	Level 2
Metal forward contracts		—		15,531	Level 2
Total Liabilities	$	2,330	$	15,531

XML

Note 13 - Subsequent Events (Tables)

6 Months Ended

Jun. 30, 2018

Notes Tables

Schedule of Line of Credit Facilities [Table Text Block]

Interest rates:
Spread over the London Interbank Offer Rate	2.25	-	3.25%
Spread over alternative base rate	1.25	-	2.25%
Standby fee per annum on undrawn amounts		0.50%
Covenant financial ratios:
Senior leverage ratio (debt secured by liens/EBITDA)	not more than 2.50:1
Leverage ratio (total debt less unencumbered cash/EBITDA)	not more than 4.00:1
Interest coverage ratio (EBITDA/interest expense)	not less than 3.00:1

Revolving Credit Facility [Member]

Notes Tables

Schedule of Line of Credit Facilities [Table Text Block]

Interest rates:
Spread over the London Interbank Offer Rate	2.25	-	3.25%
Spread over alternative base rate	1.25	-	2.25%
Standby fee per annum on undrawn amounts		0.50%
Covenant financial ratios:
Senior leverage ratio (debt secured by liens/EBITDA)	not more than 2.50:1
Leverage ratio (total debt less unencumbered cash/EBITDA) (1)	not more than 4.00:1
Interest coverage ratio (EBITDA/interest expense)	not less than 3.00:1

XML

Note 14 - Guarantor Subsidiaries (Tables)

6 Months Ended

Jun. 30, 2018

Notes Tables

Condensed Balance Sheet [Table Text Block]

	As of June 30, 2018
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Assets
Cash and cash equivalents	$	163,357		$	24,387		$	51,978		$	—		$	239,722
Other current assets		18,609			44,279			49,822			(70	)		112,640
Properties, plants, and equipment - net		1,927			1,246,318			758,347			—			2,006,592
Intercompany receivable (payable)		281,519			(145,439	)		(332,954	)		196,874			—
Investments in subsidiaries		1,379,384			—			—			(1,379,384	)		—
Other non-current assets		23,669			8,357			8,296			(6,682	)		33,640
Total assets	$	1,868,465		$	1,177,902		$	535,489		$	(1,189,262	)	$	2,392,594
Liabilities and Stockholders' Equity
Current liabilities	$	(212,784	)	$	77,213		$	39,180		$	201,724		$	105,333
Long-term debt		533,230			5,825			2,932			—			541,987
Non-current portion of accrued reclamation		—			66,157			11,945			—			78,102
Non-current deferred tax liability		—			11,916			112,148			(11,602	)		112,462
Other non-current liabilities		46,720			5,584			1,107			—			53,411
Stockholders' equity		1,501,299			1,011,207			368,177			(1,379,384	)		1,501,299
Total liabilities and stockholders' equity	$	1,868,465		$	1,177,902		$	535,489		$	(1,189,262	)	$	2,392,594

	As of December 31, 2017
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Assets
Cash and cash equivalents	$	103,878		$	31,016		$	51,213		$	—		$	186,107
Other current assets		47,555			47,608			39,630			(575	)		134,218
Properties, plants, and equipment - net		1,946			1,244,161			773,914			—			2,020,021
Intercompany receivable (payable)		287,310			(177,438	)		(341,182	)		231,310			—
Investments in subsidiaries		1,358,025			—			—			(1,358,025	)		—
Other non-current assets		14,409			7,289			9,283			(6,370	)		24,611
Total assets	$	1,813,123		$	1,152,636		$	532,858		$	(1,133,660	)	$	2,364,957
Liabilities and Stockholders' Equity
Current liabilities	$	(226,576	)	$	66,550		$	37,671		$	234,485		$	112,130
Long-term debt		502,229			2,303			3,890			—			508,422
Non-current portion of accrued reclamation		—			67,565			11,801			—			79,366
Non-current deferred tax liability		—			10,120			121,546			(10,120	)		121,546
Other non-current liabilities		53,588			5,185			838			—			59,611
Stockholders' equity		1,483,882			1,000,913			357,112			(1,358,025	)		1,483,882
Total liabilities and stockholders' equity	$	1,813,123		$	1,152,636		$	532,858		$	(1,133,660	)	$	2,364,957

Condensed Income Statement [Table Text Block]

	Three Months Ended June 30, 2018
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Revenues	$	2,697		$	75,197		$	69,365		$	—		$	147,259
Cost of sales		(73	)		(37,489	)		(42,878	)		—			(80,440	)
Depreciation, depletion, amortization		—			(11,996	)		(19,821	)		—			(31,817	)
General and administrative		(4,615	)		(4,602	)		(570	)		—			(9,787	)
Exploration and pre-development		(72	)		(3,064	)		(6,117	)		—			(9,253	)
Research and development		—			(1,579	)		(758	)		—			(2,337	)
Gain on derivative contracts		16,804			—			—			—			16,804
Acquisition costs		(940	)		(68	)		(2	)		—			(1,010	)
Foreign exchange gain (loss)		(5,731	)		(74	)		8,281			—			2,476
Lucky Friday suspension-related costs		—			(6,801	)		—			—			(6,801	)
Equity in earnings of subsidiaries		5,745			—			—			(5,745	)		—
Other expense		(1,741	)		(1,616	)		(5,522	)		(3,714	)		(12,593	)
Income (loss) before income taxes		12,074			7,908			1,978			(9,459	)		12,501
(Provision) benefit from income taxes		—			(3,715	)		(426	)		3,714			(427	)
Net income (loss)		12,074			4,193			1,552			(5,745	)		12,074
Preferred stock dividends		(138	)		—			—			—			(138	)
Income (loss) applicable to common stockholders		11,936			4,193			1,552			(5,745	)		11,936
Net income (loss)		12,074			4,193			1,552			(5,745	)		12,074
Changes in comprehensive income (loss)		(5,162	)		—			—			—			(5,162	)
Comprehensive income (loss)	$	6,912		$	4,193		$	1,552		$	(5,745	)	$	6,912

	Six Months Ended June 30, 2018
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Revenues	$	3,312		$	145,408		$	138,248		$	—		$	286,968
Cost of sales		402			(72,190	)		(81,521	)		—			(153,309	)
Depreciation, depletion, amortization		—			(23,256	)		(36,615	)		—			(59,871	)
General and administrative		(8,448	)		(8,050	)		(1,024	)		—			(17,522	)
Exploration and pre-development		(127	)		(5,003	)		(12,488	)		—			(17,618	)
Research and development		—			(2,061	)		(1,712	)		—			(3,773	)
Loss on derivative contracts		20,811			—			—			—			20,811
Acquisition costs		(3,300	)		(68	)		(149	)		—			(3,517	)
Foreign exchange gain (loss)		(14,435	)		(74	)		19,577			—			5,068
Lucky Friday suspension-related costs		—			(11,818	)		—			—			(11,818	)
Equity in earnings of subsidiaries		23,513			—			—			(23,513	)		—
Other expense		(1,414	)		(3,393	)		(9,901	)		(9,202	)		(23,910	)
Income (loss) before income taxes		20,314			19,495			14,415			(32,715	)		21,509
(Provision) benefit from income taxes		—			(9,203	)		(1,194	)		9,202			(1,195	)
Net income (loss)		20,314			10,292			13,221			(23,513	)		20,314
Preferred stock dividends		(276	)		—			—			—			(276	)
Income (loss) applicable to common stockholders		20,038			10,292			13,221			(23,513	)		20,038
Net income (loss)		20,314			10,292			13,221			(23,513	)		20,314
Changes in comprehensive income (loss)		(7,266	)		—			38			(38	)		(7,266	)
Comprehensive income (loss)	$	13,048		$	10,292		$	13,259		$	(23,551	)	$	13,048

	Three Months Ended June 30, 2017
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Revenues	$	807		$	70,344		$	63,128		$	—		$	134,279
Cost of sales		(186	)		(40,816	)		(36,501	)		—			(77,503	)
Depreciation, depletion, amortization		—			(13,502	)		(12,067	)		—			(25,569	)
General and administrative		(5,721	)		(4,094	)		(494	)		—			(10,309	)
Exploration and pre-development		(66	)		(2,496	)		(4,343	)		—			(6,905	)
Research and development		—			(312	)		—			—			(312	)
Gain on derivative contracts		2,487			—			—			—			2,487
Foreign exchange gain (loss)		7,666			1			(11,550	)		—			(3,883	)
Lucky Friday suspension costs		—			(8,024	)		—			—			(8,024	)
Equity in earnings of subsidiaries		(2,355	)		—			—			2,355			—
Other (expense) income		(29,115	)		(1,557	)		(2,400	)		20,890			(12,182	)
Income (loss) before income taxes		(26,483	)		(456	)		(4,227	)		23,245			(7,921	)
(Provision) benefit from income taxes		—			1,068			3,727			(20,890	)		(16,095	)
Net income (loss)		(26,483	)		612			(500	)		2,355			(24,016	)
Preferred stock dividends		(138	)		—			—			—			(138	)
Income (loss) applicable to common stockholders		(26,621	)		612			(500	)		2,355			(24,154	)
Net income (loss)		(26,483	)		612			(500	)		2,355			(24,016	)
Changes in comprehensive income (loss)		2,878			—			847			(847	)		2,878
Comprehensive income (loss)	$	(23,605	)	$	612		$	347		$	1,508		$	(21,138	)

	Six Months Ended June 30, 2017
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Revenues	$	(3,286	)	$	153,297		$	126,812		$	—		$	276,823
Cost of sales		(334	)		(83,588	)		(72,257	)		—			(156,179	)
Depreciation, depletion, amortization		—			(29,268	)		(25,253	)		—			(54,521	)
General and administrative		(12,190	)		(6,413	)		(912	)		—			(19,515	)
Exploration and pre-development		(310	)		(4,397	)		(7,964	)		—			(12,671	)
Research and development		—			(995	)		—			—			(995	)
Loss on derivative contracts		(5,322	)		—			—			—			(5,322	)
Foreign exchange gain (loss)		10,133			(43	)		(16,235	)		—			(6,145	)
Lucky Friday suspension costs		—			(9,605	)		—			—			(9,605	)
Equity in earnings of subsidiaries		346			—			—			(346	)		—
Other (expense) income		13,781			(2,409	)		(9,470	)		(23,930	)		(22,028	)
Income (loss) before income taxes		2,818			16,579			(5,279	)		(24,276	)		(10,158	)
(Provision) benefit from income taxes		—			(7,901	)		(3,053	)		23,930			12,976
Net income (loss)		2,818			8,678			(8,332	)		(346	)		2,818
Preferred stock dividends		(276	)		—			—			—			(276	)
Income (loss) applicable to common stockholders		2,542			8,678			(8,332	)		(346	)		2,542
Net income (loss)		2,818			8,678			(8,332	)		(346	)		2,818
Changes in comprehensive income (loss)		6,082			—			758			(758	)		6,082
Comprehensive income (loss)	$	8,900		$	8,678		$	(7,574	)	$	(1,104	)	$	8,900

Condensed Cash Flow Statement [Table Text Block]

	Six Months Ended June 30, 2018
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Cash flows from operating activities	$	27,981		$	60,805		$	2,166		$	(43,934	)	$	47,018
Cash flows from investing activities:
Additions to properties, plants, and equipment		—			(25,454	)		(17,850	)		—			(43,304	)
Other investing activities, net		6,294			44			420			21,359			28,117
Cash flows from financing activities:
Dividends paid to stockholders		(2,276	)		—			—			—			(2,276	)
Issuance of debt		31,024			—			—			—			31,024
Payments on debt		—			(1,393	)		(2,369	)		—			(3,762	)
Other financing activity		(3,544	)		(40,658	)		18,930			22,575			(2,697	)
Effect of exchange rate changes on cash		—			—			(532	)		—			(532	)
Changes in cash, cash equivalents and restricted cash and cash equivalents		59,479			(6,656	)		765			—			53,588
Beginning cash, cash equivalents and restricted cash and cash equivalents		103,878			32,048			51,213			—			187,139
Ending cash, cash equivalents and restricted cash and cash equivalents	$	163,357		$	25,392		$	51,978		$	—		$	240,727

	Six Months Ended June 30, 2017
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Cash flows from operating activities	$	9,131		$	13,792		$	10,757		$	12,141		$	45,821
Cash flows from investing activities:
Additions to properties, plants, and equipment		—			(19,132	)		(26,832	)					(45,964	)
Other investing activities, net		(8,500	)		164			(22	)		(424	)		(8,782	)
Cash flows from financing activities:
Dividends paid to stockholders		(2,257	)		—			—						(2,257	)
Payments on debt		—			(3,044	)		(671	)					(3,715	)
Other financing activity		(11,169	)		9,501			20,430			(11,717	)		7,045
Effect of exchange rate changes on cash		—			—			1,086			—			1,086
Changes in cash, cash equivalents and restricted cash and cash equivalents		(12,795	)		1,281			4,748			—			(6,766	)
Beginning cash, cash equivalents and restricted cash and cash equivalents		113,275			26,588			32,114			—			171,977
Ending cash, cash equivalents and restricted cash and cash equivalents	$	100,480		$	27,869		$	36,862		$	—		$	165,211

XML

Note 2 - Investments (Details Textual) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Debt Securities, Available-for-sale, Current, Total	$ 5,556		$ 33,758
Payments to Acquire Debt Securities, Available-for-sale	31,200	$ 23,300
Proceeds from Sale and Maturity of Marketable Securities, Total	59,336	14,356
Equity Securities, FV-NI	7,400		7,600
Equity Securities, FV-NI, Cost	6,000		$ 5,700
Equity Securities, FV-NI, Unrealized Gain (Loss), Total	$ (300)	100
Other Comprehensive Income (Loss), Securities, Available-for-Sale, Unrealized Holding Gain (Loss) Arising During Period, before Tax		$ 600

XML

Note 2 - Investments - Current Investments (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Fair market value	$ 5,556	$ 33,758
Corporate Bond Securities [Member]
Amortized cost	5,559	33,778
Unrealized loss	(3)	(20)
Fair market value	$ 5,556	$ 33,758

XML

Note 3 - Income Taxes (Details Textual) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Jun. 30, 2018	Dec. 31, 2017
Deferred Tax Liabilities, Net, Total		$ 111.3
Deferred Tax Assets, Valuation Allowance, Total		79.4	$ 78.7
Internal Revenue Service (IRS) [Member] | Domestic Tax Authority [Member]
Deferred Tax Liabilities, Net, Total		0.3
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount	$ (15.0)
Canada Revenue Agency [Member] | Foreign Tax Authority [Member]
Deferred Tax Liabilities, Net, Total		112.5
Mexican Tax Authority [Member] | Foreign Tax Authority [Member]
Deferred Tax Liabilities, Net, Total		$ 1.5

XML

Note 3 - Income Taxes - Major Components of Income Tax Provision (Benefit) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Current:
Domestic	$ 1		$ 1	$ (12,798)
Foreign	2,965	15,935	4,171	21,451
Total current income tax provision (benefit)	2,966	15,935	4,172	8,653
Deferred:
Domestic		2,965		(15,939)
Foreign	(2,539)	(2,805)	(2,977)	(5,690)
Total deferred income tax provision (benefit)	(2,539)	160	(2,977)	(21,629)
Total income tax provision (benefit)	$ 427	$ 16,095	$ 1,195	$ (12,976)

XML

Note 4 - Commitments, Contingencies and Obligations (Details Textual) $ in Millions		1 Months Ended			3 Months Ended			6 Months Ended		12 Months Ended	28 Months Ended
	Apr. 12, 2013 USD ($)	Jul. 31, 2018 USD ($)	Aug. 31, 2012 USD ($)	Jun. 30, 2011 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2014 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2014 USD ($)	Mar. 05, 2018 USD ($)	Mar. 05, 2018 CAD ($)
Environmental Remediation Expense					$ 1,420,000	$ 985,000		$ 2,682,000	$ 2,104,000
Contractual Obligation, Total					4,100,000			4,100,000
Capital Leases, Future Minimum Payments Due, Total					15,815,000			15,815,000
Surety Bonds					117,000,000			117,000,000
Lucky Friday [Member]
Open Purchase Orders					700,000			700,000
Casa Berardi [Member]
Open Purchase Orders					2,100,000			2,100,000
Greens Creek [Member]
Open Purchase Orders					$ 7,400,000			7,400,000
Senior Notes [Member]
Proceeds from Issuance of Debt	$ 500,000,000
Debt Instrument, Interest Rate, Stated Percentage	6.875%
Debt Instrument, Increase (Decrease), Net, Total										$ 6,500,000
Debt Instrument, Face Amount	$ 500,000,000
Series 2018-A Senior Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage												4.68%	4.68%
Debt Instrument, Face Amount												$ 30,800,000	$ 40
Debt Instrument, Issuance, Discount Rate												0.58%	0.58%
Johnny M Mine Area near San Mateo, New Mexico [Member]
Payment Of Response Costs			$ 1,100,000								$ 1,100,000
Estimated Response Costs		$ 9,600,000						5,600,000
Environmental Remediation Expense							$ 5,600,000
Johnny M Mine Area near San Mateo, New Mexico [Member] | Minimum [Member]
Estimated Alternative Response Costs								0
Johnny M Mine Area near San Mateo, New Mexico [Member] | Maximum [Member]
Estimated Alternative Response Costs								$ 221,000,000
Carpenter Snow Creek Superfund Site, Cascade County, Montana [Member]
Estimated Response Costs				$ 4,500,000
Estimated Future Response Cost				$ 100,000,000
Joint Venture [Member] | Rio Grande Silver Inc and Emerald Mining and Leasing LLC [Member]
Equity Method Investment, Ownership Percentage					70.00%			70.00%
Maximum Environmental Remediation Obligation					$ 2,500,000			$ 2,500,000

XML

Note 5 - Earnings (Loss) Per Common Share (Details Textual) - $ / shares	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Common Stock, Shares Authorized	750,000,000	750,000,000		750,000,000
Common Stock, Par or Stated Value Per Share	$ 0.25	$ 0.25		$ 0.25
Common Stock, Shares, Issued, Total	401,322,377	401,322,377		399,176,425
Treasury Stock, Shares, Ending Balance	5,226,791	5,226,791		4,529,450
Common Stock, Shares, Outstanding, Ending Balance	401,322,377	401,322,377		399,176,425
Restricted Stock Units (RSUs) [Member]
Incremental Common Shares Attributable to Share-based Payment Arrangements, Total	1,268,601	1,179,086	2,109,789
Deferred Shares [Member]
Incremental Common Shares Attributable to Share-based Payment Arrangements, Total	1,721,932	1,721,932	1,352,470

XML

Note 6 - Business Segments and Sales of Products (Details Textual) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018 USD ($) oz T	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($) oz T	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Number of Reportable Segments			4
Derivative, Gain on Derivative	$ 2,700	$ 800	$ 3,300
Derivative, Loss on Derivative				$ 3,200
Accounts Receivable, Net, Current, Total	9,717		9,717		$ 14,805
Allowance for Doubtful Accounts Receivable, Ending Balance	0		0		$ 0
Employee Labor Strike Related Costs	6,801	$ 8,024	11,818	9,605
Lucky Friday [Member]
Long-Lived Assets	$ 428,100		$ 428,100
Estimated Mine Life			22 years
Lucky Friday [Member] | Suspension Costs [Member]
Employee Labor Strike Related Costs			$ 9,400	7,600
Lucky Friday [Member] | Non-cash Depreciation Expense [Member]
Employee Labor Strike Related Costs			$ 2,400	$ 2,000
Silver [Member]
Metals Contained in Concentrates | oz	1,200,000		1,200,000
Gold [Member]
Metals Contained in Concentrates | oz	5,842		5,842
Zinc [Member]
Metals Contained in Concentrates | T	11,696		11,696
Lead [Member]
Metals Contained in Concentrates | T	2,792		2,792

XML

Note 6 - Business Segments and Sales of Products - Information About Reportable Segments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Net sales	$ 147,259	$ 134,279	$ 286,968	$ 276,823
Income (loss) from operations	3,756	3,975	15,705	19,846
Greens Creek [Member]
Net sales	74,605	71,339	140,455	130,189
Income (loss) from operations	25,516	15,418	48,668	29,532
Lucky Friday [Member]
Net sales	3,287	(187)	8,264	19,823
Income (loss) from operations	(5,261)	(8,212)	(9,407)	(4,332)
Casa Berardi [Member]
Net sales	56,103	43,822	111,651	85,534
Income (loss) from operations	1,014	(1,708)	4,264	(3,953)
San Sebastian [Member]
Net sales	13,264	19,305	26,598	41,277
Income (loss) from operations	(361)	11,892	4,656	25,346
Other Segments [Member]
Income (loss) from operations	$ (17,152)	$ (13,415)	$ (32,476)	$ (26,747)

XML

Note 6 - Business Segments and Sales of Products - Identifiable Assets by Reporting Segments (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Identifiable assets:
Identifiable assets	$ 2,392,594	$ 2,364,957
Greens Creek [Member]
Identifiable assets:
Identifiable assets	678,862	671,960
Lucky Friday [Member]
Identifiable assets:
Identifiable assets	429,213	432,400
Casa Berardi [Member]
Identifiable assets:
Identifiable assets	792,891	804,505
San Sebastian [Member]
Identifiable assets:
Identifiable assets	68,812	62,198
Other Segments [Member]
Identifiable assets:
Identifiable assets	$ 424,016	$ 393,894

XML

Note 6 - Business Segments and Sales of Products - Percentage of Sales by Segments (Details) - Sales Revenue, Net [Member]	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Percentage of sales	100.00%	100.00%	100.00%	100.00%
Greens Creek [Member]
Percentage of sales	51.00%	53.00%	49.00%	47.00%
Lucky Friday [Member]
Percentage of sales	2.00%		3.00%	7.00%
Casa Berardi [Member]
Percentage of sales	38.00%	33.00%	39.00%	31.00%
San Sebastian [Member]
Percentage of sales	9.00%	14.00%	9.00%	15.00%

XML

Note 6 - Business Segments and Sales of Products - Sales of Products (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Sales of products	$ 147,259	$ 134,279	$ 286,968	$ 276,823
Less: Smelter and refining charges	(7,105)	(7,374)	(14,998)	(22,372)
Sales by significant product type	144,563	133,472	283,657	280,108
Silver [Member]
Sales of products	38,425	46,077	73,647	97,434
Doré and Metals from Doré [Member]
Sales by significant product type	75,526	67,533	149,018	136,513
Gold [Member]
Sales of products	77,635	66,975	150,679	129,676
Lead Concentrate [Member]
Sales by significant product type	42,149	44,087	76,483	93,004
Lead [Member]
Sales of products	10,690	8,101	19,917	21,720
Zinc Concentrate [Member]
Sales by significant product type	22,579	16,344	48,231	40,562
Zinc [Member]
Sales of products	27,614	20,500	57,723	50,365
Bulk Concentrate [Member]
Sales by significant product type	$ 4,309	$ 5,508	$ 9,925	$ 10,029

XML

Note 6 - Business Segments and Sales of Products - Sales by Geographic Area (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Sales by geographical area	$ 144,563	$ 133,472	$ 283,657	$ 280,108
CANADA
Sales by geographical area	94,524	83,215	183,192	183,434
KOREA, REPUBLIC OF
Sales by geographical area	41,537	18,972	74,240	47,943
JAPAN
Sales by geographical area	3,897	11,804	17,670	24,094
CHINA
Sales by geographical area	198	15,401	67	15,352
UNITED STATES
Sales by geographical area	$ 4,407	$ 4,080	$ 8,488	$ 9,285

XML

Note 6 - Business Segments and Sales of Products - Sales From Continuing Operations to Significant Metals Customers As a Percentage of Total Sales (Details) - Sales Revenue, Goods, Net [Member] - Customer Concentration Risk [Member]	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
CIBC [Member]
Significant metal customers	28.00%	23.00%	38.00%	24.00%
Scotia [Member]
Significant metal customers	18.00%	23.00%	10.00%	22.00%
Korea Zinc [Member]
Significant metal customers	28.00%	14.00%	26.00%	17.00%
Teck Metals Ltd [Member]
Significant metal customers	17.00%	15.00%	11.00%	15.00%
Trafigura AG [Member]
Significant metal customers		12.00%		6.00%

XML

Note 7 - Employee Benefit Plans (Details Textual) - USD ($) $ in Millions	1 Months Ended	3 Months Ended	6 Months Ended
	Apr. 30, 2018	Jun. 30, 2018	Jun. 30, 2018
Pension Plan [Member]
Defined Benefit Plan, Plan Assets, Contributions by Employer	$ 1.3
Defined Benefit Plan, Expected Future Employer Contributions, Remainder of Fiscal Year		$ 2.6	$ 2.6
Supplemental Employee Retirement Plan [Member]
Defined Benefit Plan, Expected Future Employer Contributions, Remainder of Fiscal Year		0.5	0.5
Other Nonoperating Income (Expense) [Member]
Net Periodic Defined Benefits Expense (Reversal of Expense), Excluding Service Cost Component		$ 0.7	$ 1.4

XML

Note 7 - Employee Benefit Plans - Net Periodic Pension Cost (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Service cost	$ 1,252	$ 1,196	$ 2,504	$ 2,392
Interest cost	1,377	1,339	2,754	2,678
Expected return on plan assets	(1,634)	(1,462)	(3,268)	(2,924)
Amortization of prior service cost	15	(84)	30	(168)
Amortization of net loss	931	1,033	1,862	2,066
Net periodic pension cost	$ 1,941	$ 2,022	$ 3,882	$ 4,044

XML

Note 8 - Shareholders' Equity (Details Textual) $ / shares in Units, $ in Millions		1 Months Ended		3 Months Ended		6 Months Ended		28 Months Ended	74 Months Ended
	Aug. 08, 2018 USD ($) $ / shares	Jun. 30, 2018 USD ($) $ / item shares	Mar. 31, 2018 USD ($) shares	Jun. 30, 2018 USD ($) $ / shares $ / item shares	Jun. 30, 2017 $ / shares	Jun. 30, 2018 USD ($) $ / shares $ / item shares	Jun. 30, 2017 USD ($) $ / shares shares	Jun. 30, 2018 USD ($) $ / item shares	Jun. 30, 2018 USD ($) $ / shares $ / item shares	Aug. 07, 2018 $ / shares	Feb. 23, 2016 USD ($)	May 08, 2012 shares
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period | shares			1,237,369
Allocated Share-based Compensation Expense, Total			$ 4.9
Share-based Compensation Arrangement by Share-based Payment Award, Measurement Period Used to Value Performance-based Awards		3 years
Shares Paid for Tax Withholding for Share Based Compensation | shares						697,341	488,634
Payments Related to Tax Withholding for Share-based Compensation						$ 2.7	$ 2.5
Treasury Stock Acquired, Average Cost Per Share | $ / shares						$ 3.86	$ 5.06
Common Stock, Dividends, Per Share, Declared | $ / shares				$ 0.0025	$ 0.0025	$ 0.005	$ 0.005
Average Realized Silver Price | $ / item						16.61
Average Realized Silver Price, Minimum Dividend, Threshold | $ / item		30		30		30		30	30
Stock Issued During Period, Shares, New Issues | shares						0		4,608,847
Stock Issued During Period, Value, New Issues								$ 17.7
Payments for Brokerage Fees								$ 0.4
Common Stock Repurchase Program [Member]
Treasury Stock Acquired, Average Cost Per Share | $ / shares									$ 3.99
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | shares												20,000,000
Cumulative Stock Repurchased | shares		934,100		934,100		934,100		934,100	934,100
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased | shares		19,100,000		19,100,000		19,100,000		19,100,000	19,100,000
Subsequent Event [Member]
Common Stock, Dividends, Per Share, Declared | $ / shares	$ 0.0025
Dividends, Common Stock, Total	$ 1.0
Subsequent Event [Member] | Common Stock Repurchase Program [Member]
Share Price | $ / shares										$ 2.92
Minimum [Member]
Common Stock, Dividends, Per Share, Declared | $ / shares						$ 0.01
Maximum [Member]
Common Stock, Aggregate Offering Price											$ 75.0
Restricted Stock Units (RSUs) [Member]
Allocated Share-based Compensation Expense, Total		$ 5.6
Restricted Stock Units RSUs, Vesting In June 2019, June 2020, and June 2021 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | shares		1,322,461
Restricted Stock Units RSUs, Vesting In June 2019, June 2020, and June 2021 [Member] | Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage		33.00%
Restricted Stock Units RSUs, Vesting In June 2019, June 2020, and June 2021 [Member] | Share-based Compensation Award, Tranche Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage		33.00%
Restricted Stock Units RSUs, Vesting In June 2019, June 2020, and June 2021 [Member] | Share-based Compensation Award, Tranche Three [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage		33.00%
Restricted Stock Units RSUs, Vesting in June 2019 and June 2020 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | shares		96,604
Restricted Stock Units RSUs, Vesting in June 2019 and June 2020 [Member] | Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage		50.00%
Restricted Stock Units RSUs, Vesting in June 2019 and June 2020 [Member] | Share-based Compensation Award, Tranche Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage		50.00%
Restricted Stock Units RSUs, Vesting in June 2019 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | shares		28,721
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options		$ 2.0		$ 2.0		$ 2.0		$ 2.0	$ 2.0
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition		1 year
Restricted Stock Units (RSUs) Vesting in June 2020 [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options		$ 1.9		1.9		1.9		1.9	1.9
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition		2 years
Restricted Stock Units (RSUs) Vesting in June 2021 [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options		$ 1.7		$ 1.7		1.7		$ 1.7	$ 1.7
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition		3 years
Performance Shares [Member]
Allocated Share-based Compensation Expense, Total						$ 2.4	$ 2.8
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition		30 years

XML

Note 8 - Shareholders' Equity - Common Stock Dividend Policy (Details)	6 Months Ended
	Jun. 30, 2018 $ / shares $ / item
Quarterly Average Realized Price, Level 1 [Member]
Quarterly average realized silver price per ounce (in USD per Per Share) | $ / item	30
Quarterly dividend per share (in dollars per share)	$ 0.01
Annual dividend per share (in dollars per share)	$ 0.04
Quarterly Average Realized Price, Level 2 [Member]
Quarterly average realized silver price per ounce (in USD per Per Share) | $ / item	35
Quarterly dividend per share (in dollars per share)	$ 0.02
Annual dividend per share (in dollars per share)	$ 0.08
Quarterly Average Realized Price, Level 3 [Member]
Quarterly average realized silver price per ounce (in USD per Per Share) | $ / item	40
Quarterly dividend per share (in dollars per share)	$ 0.03
Annual dividend per share (in dollars per share)	$ 0.12
Quarterly Average Realized Price, Level 4 [Member]
Quarterly average realized silver price per ounce (in USD per Per Share) | $ / item	45
Quarterly dividend per share (in dollars per share)	$ 0.04
Annual dividend per share (in dollars per share)	$ 0.16
Quarterly Average Realized Price, Level 5 [Member]
Quarterly average realized silver price per ounce (in USD per Per Share) | $ / item	50
Quarterly dividend per share (in dollars per share)	$ 0.05
Annual dividend per share (in dollars per share)	$ 0.20

XML

Note 9 - Debt, Credit Facilities and Capital Leases (Details Textual) $ in Millions			3 Months Ended	6 Months Ended		12 Months Ended
	May 31, 2016 USD ($)	Apr. 12, 2013 USD ($)	Mar. 31, 2018	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2014 USD ($)	Aug. 08, 2018 USD ($)	Jul. 16, 2018 USD ($)	Jul. 15, 2018 USD ($)	Mar. 05, 2018 USD ($)	Mar. 05, 2018 CAD ($)	Dec. 31, 2017 USD ($)
Letters of Credit Outstanding, Amount				$ 3,000,000
Capital Lease Obligations, Total				14,771,000								$ 11,800,000
Capital Lease Obligations, Current				6,015,000								5,608,000
Capital Lease Obligations, Noncurrent				8,757,000								$ 6,193,000
Capital Leases, Future Minimum Payments Due, Total				15,815,000
Capital Leases, Future Minimum Payments, Interest Included in Payments				1,044,000
Subsequent Event [Member]
Letters of Credit Outstanding, Amount							$ 3,000,000
Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 100,000,000
Debt Instrument, Term	3 years
Long-term Line of Credit, Total				47,000,000
Revolving Credit Facility [Member] | Subsequent Event [Member]
Line of Credit Facility, Maximum Borrowing Capacity								$ 250,000,000	$ 100,000,000
Line of Credit Facility, Current Borrowing Capacity								$ 200,000,000
Letter of Credit [Member]
Letter of Credit Outstanding, Fronting Fee	0.20%
Letter of Credit [Member] | Subsequent Event [Member]
Letter of Credit Outstanding, Fronting Fee								0.20%
Letter of Credit [Member] | Minimum [Member]
Letter of Credit, Participation Fee, Percent	2.25%
Letter of Credit [Member] | Minimum [Member] | Subsequent Event [Member]
Letter of Credit, Participation Fee, Percent								2.25%
Letter of Credit [Member] | Maximum [Member]
Letter of Credit, Participation Fee, Percent	3.25%
Letter of Credit [Member] | Maximum [Member] | Subsequent Event [Member]
Letter of Credit, Participation Fee, Percent								3.25%
Senior Notes [Member]
Debt Instrument, Face Amount		$ 500,000,000
Payment for Pension Benefits						$ 6,500,000
Proceeds from Issuance of Senior Long-term Debt		$ 490,000,000
Underwriting Discount on Senior Notes		2.00%
Debt Instrument, Unamortized Discount, Total		$ 10,000,000		3,600,000
Debt Instrument, Interest Rate, Stated Percentage		6.875%
Interest Expense, Debt, Total				18,100,000	$ 17,200,000
Interest Costs Capitalized					900,000
Debt Instrument, Redemption Price, Percentage			101.00%
Senior Notes [Member] | Costs Related to Private Offering and Tender Offer [Member]
Interest Expense, Debt, Total					$ 1,100,000
Series 2018-A Senior Notes [Member]
Debt Instrument, Face Amount										$ 30,800,000	$ 40.0
Debt Instrument, Unamortized Discount, Total											$ 0.2
Debt Instrument, Interest Rate, Stated Percentage										4.68%	4.68%
Interest Expense, Debt, Total				$ 700,000
Debt Instrument, Issuance, Discount Rate										0.58%	0.58%

XML

Note 9 - Debt, Credit Facilities and Capital Leases - Credit Facility (Details)	6 Months Ended
	Jun. 30, 2018
Maximum [Member]
Senior leverage ratio (debt secured by liens/EBITDA)	2.5
Leverage ratio (total debt less unencumbered cash/EBITDA)	4
Interest coverage ratio (EBITDA/interest expense)	3
New Facility [Member]
Standby fee per annum on undrawn amounts	0.50%
New Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member]
Variable rate	2.25%
New Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member]
Variable rate	3.25%
New Facility [Member] | Base Rate [Member] | Minimum [Member]
Variable rate	1.25%
New Facility [Member] | Base Rate [Member] | Maximum [Member]
Variable rate	2.25%

XML

Note 9 - Debt, Credit Facilities and Capital Leases - Annual Maturities of Capital Lease Commitments, Including Interest (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
2019	$ 6,558
2020	4,368
2021	3,249
2022	1,640
Total	15,815
Less: imputed interest	(1,044)
Net capital lease obligation	$ 14,771	$ 11,800

XML

Note 10 - Developments in Accounting Pronouncements (Details Textual) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended		12 Months Ended
	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Revenue from Contract with Customer, Including Assessed Tax	$ 147,259		$ 134,279	$ 286,968	$ 276,823
Restricted Cash and Cash Equivalents, Total	1,000		$ 1,100	1,000	1,100		$ 1,000	$ 2,200
Other Nonoperating Income (Expense) [Member]
Net Periodic Defined Benefits Expense (Reversal of Expense), Excluding Service Cost Component	$ 700			1,400
Scenario, Forecast [Member] | Other Nonoperating Income (Expense) [Member]
Net Periodic Defined Benefits Expense (Reversal of Expense), Excluding Service Cost Component						$ 2,800
Accounting Standards Update 2014-09 [Member] | Pro Forma [Member]
Revenue from Contract with Customer, Including Assessed Tax					$ 1,100
Accounting Standards Update 2016-01 [Member] | AOCI Attributable to Parent [Member]
Reclassification from Accumulated Other Comprehensive Income to Retained Earnings				$ 1,300
Accounting Standards Update 2016-01 [Member] | Retained Earnings [Member]
Reclassification from Accumulated Other Comprehensive Income to Retained Earnings		$ (1,300)

XML

Note 11 - Derivative Instruments (Details Textual) $ in Thousands, $ in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 CAD ($)	Jun. 30, 2018 MXN ($)
Maximum Allocation of Forecasted CAD-demonimated Operating Costs	75.00%		75.00%		75.00%	75.00%
Forecasted CAD-denominated Operating Costs to be Hedged, Term			5 years
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax, Ending Balance	$ 2,200		$ 2,200
Gain (Loss) on Sale of Derivatives	16,804	$ 2,487	20,811	$ (5,322)
Gain (Loss) on Components Excluded from Assessment of Foreign Currency Cash Flow Hedge Effectiveness			10
Derivative, Gain on Derivative	2,700	$ 800	3,300
Derivative Liability, Fair Value, Amount Not Offset Against Collateral, Total	3,700		3,700
Derivative, Fair Value, Obligations Under the Agreements	3,700		3,700
Cost of Sales [Member]
Gain (Loss) on Sale of Derivatives			400
Other Comprehensive Income (Loss) [Member]
Foreign Currency Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months	1,300		1,300
Foreign Exchange Contract [Member] | Other Current Assets [Member]
Derivative Asset, Current	100		100
Foreign Exchange Contract [Member] | Other Noncurrent Assets [Member]
Derivative Assets, Noncurrent, Total	100		100
Foreign Exchange Contract [Member] | Other Current Liabilities [Member]
Derivative Liability, Current	1,400		1,400
Foreign Exchange Contract [Member] | Other Noncurrent Liabilities [Member]
Derivative Liability, Noncurrent	$ 1,000		$ 1,000
Foreign Exchange Contract [Member] | Casa Berardi [Member] | Minimum [Member] | United States of America, Dollars
Derivative, Forward Exchange Rate	1.2729		1.2729		1.2729	1.2729
Foreign Exchange Contract [Member] | Casa Berardi [Member] | Maximum [Member] | United States of America, Dollars
Derivative, Forward Exchange Rate	1.3335		1.3335		1.3335	1.3335
Foreign Exchange Contract [Member] | Casa Berardi [Member] | Designated as Hedging Instrument [Member]
Derivative, Number of Instruments Held, Total	107		107		107	107
Derivative, Notional Amount	$ 198,000		$ 198,000		$ 256
Foreign Exchange Contract [Member] | San Sebastian [Member] | Minimum [Member] | United States of America, Dollars
Derivative, Forward Exchange Rate	19.4		19.4		19.4	19.4
Foreign Exchange Contract [Member] | San Sebastian [Member] | Maximum [Member] | United States of America, Dollars
Derivative, Forward Exchange Rate	20.855		20.855		20.855	20.855
Foreign Exchange Contract [Member] | San Sebastian [Member] | Designated as Hedging Instrument [Member]
Derivative, Number of Instruments Held, Total	33		33		33	33
Derivative, Notional Amount	$ 11,300		$ 11,300			$ 226.3
Commodity Contract [Member] | Other Current Assets [Member]
Derivative Asset, Current	2,400		2,400
Commodity Contract [Member] | Other Noncurrent Assets [Member]
Derivative Assets, Noncurrent, Total	12,300		12,300
Commodity Contract [Member] | Other Current Liabilities [Member]
Derivative Liability, Current	1,200		1,200
Commodity Contract [Member] | Other Noncurrent Liabilities [Member]
Derivative Liability, Noncurrent	$ 200		200
Unsettled Concentrate Sales Contracts [Member]
Derivative, Gain on Derivative			3,300
Forecasted Future Concentrate Contracts [Member]
Derivative, Gain on Derivative			$ 20,800

XML

Note 11 - Derivative Instruments - Summary of Forward Sales Contracts (Details) oz in Thousands, lb in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2018 oz lb $ / oz $ / lb	Dec. 31, 2017 oz lb $ / oz $ / lb
Silver 2018 Settlements for Provisional Sales [Member]
Ounces/pounds under contract (Ounce) | oz	1,114	1,447
Average price per ounce/pound (in USD per Ounce) | $ / oz	16.5	16.64
Gold 2018 Settlements for Provisional Sales [Member]
Ounces/pounds under contract (Ounce) | oz	5	5
Average price per ounce/pound (in USD per Ounce) | $ / oz	1,298	1,279
Zinc 2018 Settlements for Provisional Sales [Member]
Ounces/pounds under contract (Ounce) | lb	20,889	21,550
Average price per ounce/pound (in USD per Ounce) | $ / lb	1.38	1.45
Lead 2018 Settlements for Provisional Sales [Member]
Ounces/pounds under contract (Ounce) | lb	4,960	4,740
Average price per ounce/pound (in USD per Ounce) | $ / lb	1.07	1.11
Zinc 2018 Settlements for Forecasted Sales [Member]
Ounces/pounds under contract (Ounce) | lb	9,039	32,187
Average price per ounce/pound (in USD per Ounce) | $ / lb	1.34	1.29
Lead 2018 Settlements for Forecasted Sales [Member]
Ounces/pounds under contract (Ounce) | lb	5,787	16,645
Average price per ounce/pound (in USD per Ounce) | $ / lb	1.09	1.06
Zinc 2019 Settlements for Forecasted Sales [Member]
Ounces/pounds under contract (Ounce) | lb	48,502	23,589
Average price per ounce/pound (in USD per Ounce) | $ / lb	1.4	1.33
Lead 2019 Settlements for Forecasted Sales [Member]
Ounces/pounds under contract (Ounce) | lb	20,283	18,078
Average price per ounce/pound (in USD per Ounce) | $ / lb	1.1	1.09
Zinc 2020 Settlements for Forecasted Sales [Member]
Ounces/pounds under contract (Ounce) | lb	42,329	3,307
Average price per ounce/pound (in USD per Ounce) | $ / lb	1.4	1.27
Lead 2020 Settlements for Forecasted Sales [Member]
Ounces/pounds under contract (Ounce) | lb	19,401	2,866
Average price per ounce/pound (in USD per Ounce) | $ / lb	1.13	1.08
Lead 2021 Settlements for Forecasted Sales [Member]
Ounces/pounds under contract (Ounce) | lb	4,409
Average price per ounce/pound (in USD per Ounce) | $ / lb	1.07

XML

Note 12 - Fair Value Measurement (Details Textual) - Senior Notes [Member] - USD ($) $ in Millions	Jun. 30, 2018	Apr. 12, 2013
Notes Payable, Total	$ 502.9
Debt Instrument, Unamortized Discount, Total	3.6	$ 10.0
Fair Value, Inputs, Level 1 [Member]
Notes Payable, Fair Value Disclosure	$ 511.8

XML

Note 12 - Fair Value Measurement - Assets and Liabilities Accounted for at Fair Value (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Trade accounts receivable:
Receivables from provisional concentrate sales	$ 8,925	$ 7,003
Fair Value, Measurements, Recurring [Member]
Restricted cash balances:
Certificates of deposit and other deposits	1,005	1,032
Total assets	278,326	248,206
Liabilities:
Total liabilities	2,330	15,531
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Cash and cash equivalents:
Money market funds and other bank deposits	239,722	186,107
Available for sale securities:
Equity securities – mining industry	7,449	7,561
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities:
Debt securities - municipal and corporate bonds	5,556	33,758
Trade accounts receivable:
Receivables from provisional concentrate sales	9,717	14,805
Restricted cash balances:
Foreign exchange contracts	172	4,943
Metal forward contracts	14,705
Liabilities:
Foreign exchange contracts	2,330
Metal forward contracts		$ 15,531

XML

Note 13 - Subsequent Events (Details Textual)				1 Months Ended	6 Months Ended	28 Months Ended
		Jul. 20, 2018 USD ($) $ / shares shares	Jul. 19, 2018 shares	Aug. 08, 2018 USD ($)	Jun. 30, 2018 USD ($) shares	Jun. 30, 2018 USD ($) shares	Jan. 01, 2020	Sep. 30, 2018	Jul. 16, 2018 USD ($)	Jul. 15, 2018 USD ($)	Dec. 31, 2017 shares	May 31, 2016 USD ($)
Common Stock, Shares, Issued, Total | shares					401,322,377	401,322,377					399,176,425
Stock Issued During Period, Shares, New Issues | shares					0	4,608,847
Letters of Credit Outstanding, Amount					$ 3,000,000	$ 3,000,000
Common Stock, Shares, Outstanding, Ending Balance | shares					401,322,377	401,322,377					399,176,425
Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity												$ 100,000,000
Revolving Credit Facility [Member] | Scenario, Forecast [Member]
Leverage Ratio							4	4.5
Letter of Credit [Member]
Letter of Credit Outstanding, Fronting Fee												0.20%
Maximum [Member]
Leverage Ratio					4	4
Maximum [Member] | Letter of Credit [Member]
Letter of Credit, Participation Fee, Percent												3.25%
Minimum [Member] | Letter of Credit [Member]
Letter of Credit, Participation Fee, Percent												2.25%
Subsequent Event [Member]
Letters of Credit Outstanding, Amount				$ 3,000,000
Subsequent Event [Member] | Revolving Credit Facility [Member]
Line of Credit Facility, Current Borrowing Capacity									$ 200,000,000
Line of Credit Facility, Maximum Borrowing Capacity									$ 250,000,000	$ 100,000,000
Proceeds from Lines of Credit, Total				$ 47
Subsequent Event [Member] | Letter of Credit [Member]
Letter of Credit Outstanding, Fronting Fee									0.20%
Subsequent Event [Member] | Warrants in Connection with Klondex Mines Acquisition [Member]
Class of Warrant or Right, Issued During Period | shares		4,136,000
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | shares		1
Subsequent Event [Member] | Warrants in Connection with Klondex Mines Acquisition Expiring April 2032 [Member]
Class of Warrant or Right, Outstanding | shares		2,068,000
Subsequent Event [Member] | Warrants in Connection with Klondex Mines Acquisition Expiring February 2029 [Member]
Class of Warrant or Right, Outstanding | shares		2,068,000
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares		$ 1.57
Subsequent Event [Member] | Klondex Mines Ltd [Member]
Common Stock, Shares, Issued, Total | shares		182,048,945	180,499,319
Stock Issued During Period, Shares, New Issues | shares			1,549,626
Common Stock, Shares, Outstanding, Ending Balance | shares		182,048,945
Subsequent Event [Member] | Maximum [Member]
Leverage Ratio	[1]								4
Subsequent Event [Member] | Maximum [Member] | Letter of Credit [Member]
Letter of Credit, Participation Fee, Percent									3.25%
Subsequent Event [Member] | Minimum [Member] | Letter of Credit [Member]
Letter of Credit, Participation Fee, Percent									2.25%
Klondex Mines Ltd [Member] | Subsequent Event [Member]
Business Acquisition, Share Price | $ / shares		$ 2.24
Business Combination, Consideration, Cash Alternative, Price Per Share | $ / shares		$ 2.47
Business Combination, Consideration, Share Alternative, Share Exchange Rate		0.6272
Business Combination Consideration, Combined Alternative, Price Per Share | $ / shares		$ 0.8411
Business Combination Consideration, Combined Alternative, Share Exchange Rate		0.4136
Payments to Acquire Businesses, Gross		$ 155,200,000
Stock Issued During Period, Shares, New Issues | shares		75,276,176
Business Combination, Subscrition of New Formed Company, Value		$ 8,020,000
Employee Service Share-based Compensation, Cash Flow Effect, Cash Used to Settle Awards		2,000,000
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable		242,400,000
Business Combination, Consideration Transferred, Total		407,700,000
Klondex Mines Ltd [Member] | Subsequent Event [Member] | Hecla Warrants [Member]
Class of Warrant or Right, Issued During Period, Value		10,100,000
Klondex Mines Ltd [Member] | Subsequent Event [Member] | Maximum [Member]
Payments to Acquire Businesses, Gross		$ 153,200,000
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares		75,276,176

[1] The leverage ratio will change to 4.50:1 from September 30, 2018 to December 31, 2019, and will revert back to 4.00:1 effective January 1, 2020.

XML

Note 13 - Subsequent Events - Credit Facility (Details)		Jul. 16, 2018	Jun. 30, 2018
Maximum [Member]
Senior leverage ratio (debt secured by liens/EBITDA)			2.5
Leverage ratio (total debt less unencumbered cash/EBITDA)			4
Interest coverage ratio (EBITDA/interest expense)			3
Maximum [Member] | Subsequent Event [Member]
Senior leverage ratio (debt secured by liens/EBITDA)		2.5
Leverage ratio (total debt less unencumbered cash/EBITDA)	[1]	4
Interest coverage ratio (EBITDA/interest expense)		3
Revolving Credit Facility [Member] | Subsequent Event [Member]
Standby fee per annum on undrawn amounts		0.50%
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | Subsequent Event [Member]
Variable rate		2.25%
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | Subsequent Event [Member]
Variable rate		3.25%
Revolving Credit Facility [Member] | Base Rate [Member] | Minimum [Member] | Subsequent Event [Member]
Variable rate		1.25%
Revolving Credit Facility [Member] | Base Rate [Member] | Maximum [Member] | Subsequent Event [Member]
Variable rate		2.25%

[1] The leverage ratio will change to 4.50:1 from September 30, 2018 to December 31, 2019, and will revert back to 4.00:1 effective January 1, 2020.

XML

Note 14 - Guarantor Subsidiaries (Details Textual)	6 Months Ended
	Jun. 30, 2018
Subsidiary or Equity Method Investee, Cumulative Percentage Ownership after All Transactions	100.00%

XML

Note 14 - Guarantor Subsidiaries - Unaudited Interim Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017	Dec. 31, 2016
Identifiable assets:
Cash and cash equivalents	$ 239,722	$ 186,107	$ 165,211	$ 171,977
Other current assets	112,640	134,218
Properties, plants, and equipment - net	2,006,592	2,020,021
Intercompany receivable (payable)
Investments in subsidiaries
Other non-current assets	33,640	24,611
Total assets	2,392,594	2,364,957
Liabilities and Stockholders' Equity
Current liabilities	105,333	112,130
Long-term debt	541,987	508,422
Non-current portion of accrued reclamation	78,102	79,366
Non-current deferred tax liability	112,462	121,546
Other non-current liabilities	53,411	59,611
Stockholders' equity	1,501,299	1,483,882
Total liabilities and shareholders' equity	2,392,594	2,364,957
Reportable Legal Entities [Member] | Parent Company [Member]
Identifiable assets:
Cash and cash equivalents	163,357	103,878	100,480	113,275
Other current assets	18,609	47,555
Properties, plants, and equipment - net	1,927	1,946
Intercompany receivable (payable)	281,519	287,310
Investments in subsidiaries	1,379,384	1,358,025
Other non-current assets	23,669	14,409
Total assets	1,868,465	1,813,123
Liabilities and Stockholders' Equity
Current liabilities	(212,784)	(226,576)
Long-term debt	533,230	502,229
Non-current portion of accrued reclamation
Non-current deferred tax liability
Other non-current liabilities	46,720	53,588
Stockholders' equity	1,501,299	1,483,882
Total liabilities and shareholders' equity	1,868,465	1,813,123
Reportable Legal Entities [Member] | Guarantor Subsidiaries [Member]
Identifiable assets:
Cash and cash equivalents	24,387	31,016	27,869	26,588
Other current assets	44,279	47,608
Properties, plants, and equipment - net	1,246,318	1,244,161
Intercompany receivable (payable)	(145,439)	(177,438)
Investments in subsidiaries
Other non-current assets	8,357	7,289
Total assets	1,177,902	1,152,636
Liabilities and Stockholders' Equity
Current liabilities	77,213	66,550
Long-term debt	5,825	2,303
Non-current portion of accrued reclamation	66,157	67,565
Non-current deferred tax liability	11,916	10,120
Other non-current liabilities	5,584	5,185
Stockholders' equity	1,011,207	1,000,913
Total liabilities and shareholders' equity	1,177,902	1,152,636
Reportable Legal Entities [Member] | Non-Guarantor Subsidiaries [Member]
Identifiable assets:
Cash and cash equivalents	51,978	51,213	36,862	32,114
Other current assets	49,822	39,630
Properties, plants, and equipment - net	758,347	773,914
Intercompany receivable (payable)	(332,954)	(341,182)
Investments in subsidiaries
Other non-current assets	8,296	9,283
Total assets	535,489	532,858
Liabilities and Stockholders' Equity
Current liabilities	39,180	37,671
Long-term debt	2,932	3,890
Non-current portion of accrued reclamation	11,945	11,801
Non-current deferred tax liability	112,148	121,546
Other non-current liabilities	1,107	838
Stockholders' equity	368,177	357,112
Total liabilities and shareholders' equity	535,489	532,858
Consolidation, Eliminations [Member]
Identifiable assets:
Cash and cash equivalents
Other current assets	(70)	(575)
Properties, plants, and equipment - net
Intercompany receivable (payable)	196,874	231,310
Investments in subsidiaries	(1,379,384)	(1,358,025)
Other non-current assets	(6,682)	(6,370)
Total assets	(1,189,262)	(1,133,660)
Liabilities and Stockholders' Equity
Current liabilities	201,724	234,485
Long-term debt
Non-current portion of accrued reclamation
Non-current deferred tax liability	(11,602)	(10,120)
Other non-current liabilities
Stockholders' equity	(1,379,384)	(1,358,025)
Total liabilities and shareholders' equity	$ (1,189,262)	$ (1,133,660)

XML

Note 14 - Guarantor Subsidiaries - Unaudited Interim Condensed Consolidating Statements of Operations (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenues	$ 147,259	$ 134,279	$ 286,968	$ 276,823
Cost of sales	(80,440)	(77,503)	(153,309)	(156,179)
Depreciation, depletion, amortization	(31,817)	(25,569)	(59,871)	(54,521)
General and administrative	(9,787)	(10,309)	(17,522)	(19,515)
Exploration and pre-development			(17,618)
Research and development	(2,337)	(312)	(3,773)	(995)
Gain (loss) on derivative contracts	16,804	2,487	20,811	(5,322)
Acquisition costs	(1,010)	2	(3,517)	(25)
Foreign exchange gain (loss)	2,476	(3,883)	5,068	(6,145)
Lucky Friday suspension-related costs	(6,801)	(8,024)	(11,818)	(9,605)
Equity in earnings of subsidiaries
Other expense	(12,593)	(12,182)	(23,910)	(22,028)
Income (loss) before income taxes	12,501	(7,921)	21,509	(10,158)
(Provision) benefit from income taxes	(427)	(16,095)	(1,195)	12,976
Net income (loss)	12,074	(24,016)	20,314	2,818
Preferred stock dividends	(138)	(138)	(276)	(276)
Income (loss) applicable to common stockholders	11,936	(24,154)	20,038	2,542
Changes in comprehensive income (loss)	(5,162)	2,878	(7,266)	6,082
Comprehensive income (loss)	6,912	(21,138)	13,048	8,900
Revenues	147,259	134,279	286,968	276,823
Mineral, Exploration [Member]
Exploration and pre-development	(9,253)	(6,905)		(12,671)
Reportable Legal Entities [Member] | Parent Company [Member]
Revenues	2,697	807	3,312	(3,286)
Cost of sales	(73)	(186)	402	(334)
Depreciation, depletion, amortization
General and administrative	(4,615)	(5,721)	(8,448)	(12,190)
Exploration and pre-development			(127)
Research and development
Gain (loss) on derivative contracts	16,804	2,487	20,811	(5,322)
Acquisition costs	(940)		(3,300)
Foreign exchange gain (loss)	(5,731)	7,666	(14,435)	10,133
Lucky Friday suspension-related costs
Equity in earnings of subsidiaries	5,745	(2,355)	23,513	346
Other expense	(1,741)	(29,115)	(1,414)	13,781
Income (loss) before income taxes	12,074	(26,483)	20,314	2,818
(Provision) benefit from income taxes
Net income (loss)	12,074	(26,483)	20,314	2,818
Preferred stock dividends	(138)	(138)	(276)	(276)
Income (loss) applicable to common stockholders	11,936	(26,621)	20,038	2,542
Changes in comprehensive income (loss)	(5,162)	2,878	(7,266)	6,082
Comprehensive income (loss)	6,912	(23,605)	13,048	8,900
Revenues	2,697	807	3,312	(3,286)
Reportable Legal Entities [Member] | Parent Company [Member] | Mineral, Exploration [Member]
Exploration and pre-development	(72)	(66)		(310)
Reportable Legal Entities [Member] | Guarantor Subsidiaries [Member]
Revenues	75,197	70,344	145,408	153,297
Cost of sales	(37,489)	(40,816)	(72,190)	(83,588)
Depreciation, depletion, amortization	(11,996)	(13,502)	(23,256)	(29,268)
General and administrative	(4,602)	(4,094)	(8,050)	(6,413)
Exploration and pre-development			(5,003)
Research and development	(1,579)	(312)	(2,061)	(995)
Gain (loss) on derivative contracts
Acquisition costs	(68)		(68)
Foreign exchange gain (loss)	(74)	1	(74)	(43)
Lucky Friday suspension-related costs	(6,801)	(8,024)	(11,818)	(9,605)
Equity in earnings of subsidiaries
Other expense	(1,616)	(1,557)	(3,393)	(2,409)
Income (loss) before income taxes	7,908	(456)	19,495	16,579
(Provision) benefit from income taxes	(3,715)	1,068	(9,203)	(7,901)
Net income (loss)	4,193	612	10,292	8,678
Preferred stock dividends
Income (loss) applicable to common stockholders	4,193	612	10,292	8,678
Changes in comprehensive income (loss)
Comprehensive income (loss)	4,193	612	10,292	8,678
Revenues	75,197	70,344	145,408	153,297
Reportable Legal Entities [Member] | Guarantor Subsidiaries [Member] | Mineral, Exploration [Member]
Exploration and pre-development	(3,064)	(2,496)		(4,397)
Reportable Legal Entities [Member] | Non-Guarantor Subsidiaries [Member]
Revenues	69,365	63,128	138,248	126,812
Cost of sales	(42,878)	(36,501)	(81,521)	(72,257)
Depreciation, depletion, amortization	(19,821)	(12,067)	(36,615)	(25,253)
General and administrative	(570)	(494)	(1,024)	(912)
Exploration and pre-development			(12,488)
Research and development	(758)		(1,712)
Gain (loss) on derivative contracts
Acquisition costs	(2)		(149)
Foreign exchange gain (loss)	8,281	(11,550)	19,577	(16,235)
Lucky Friday suspension-related costs
Equity in earnings of subsidiaries
Other expense	(5,522)	(2,400)	(9,901)	(9,470)
Income (loss) before income taxes	1,978	(4,227)	14,415	(5,279)
(Provision) benefit from income taxes	(426)	3,727	(1,194)	(3,053)
Net income (loss)	1,552	(500)	13,221	(8,332)
Preferred stock dividends
Income (loss) applicable to common stockholders	1,552	(500)	13,221	(8,332)
Changes in comprehensive income (loss)		847	38	758
Comprehensive income (loss)	1,552	347	13,259	(7,574)
Revenues	69,365	63,128	138,248	126,812
Reportable Legal Entities [Member] | Non-Guarantor Subsidiaries [Member] | Mineral, Exploration [Member]
Exploration and pre-development	(6,117)	(4,343)		(7,964)
Consolidation, Eliminations [Member]
Revenues
Cost of sales
Depreciation, depletion, amortization
General and administrative
Exploration and pre-development
Research and development
Gain (loss) on derivative contracts
Acquisition costs
Foreign exchange gain (loss)
Lucky Friday suspension-related costs
Equity in earnings of subsidiaries	(5,745)	2,355	(23,513)	(346)
Other expense	(3,714)	20,890	(9,202)	(23,930)
Income (loss) before income taxes	(9,459)	23,245	(32,715)	(24,276)
(Provision) benefit from income taxes	3,714	(20,890)	9,202	23,930
Net income (loss)	(5,745)	2,355	(23,513)	(346)
Preferred stock dividends
Income (loss) applicable to common stockholders	(5,745)	2,355	(23,513)	(346)
Changes in comprehensive income (loss)		(847)	(38)	(758)
Comprehensive income (loss)	(5,745)	1,508	(23,551)	(1,104)
Revenues
Consolidation, Eliminations [Member] | Mineral, Exploration [Member]
Exploration and pre-development

XML

Note 14 - Guarantor Subsidiaries - Unaudited Interim Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities	$ 47,018	$ 45,821
Additions to properties, plants, and equipment	(43,304)	(45,964)
Other investing activities, net	28,117	(8,782)
Dividends paid to stockholders	(2,276)	(2,257)
Issuance of debt	31,024
Payments on debt	(3,762)	(3,715)
Other financing activity	(2,697)	7,045
Effect of exchange rate changes on cash	(532)	1,086
Changes in cash, cash equivalents and restricted cash and cash equivalents	53,588	(6,766)
Beginning cash, cash equivalents and restricted cash and cash equivalents	186,107	171,977
Ending cash, cash equivalents and restricted cash and cash equivalents	239,722	165,211
Additions to properties, plants, equipment and mineral interests	(43,304)	(45,964)
Payments on debt	(3,762)	(3,715)
Reportable Legal Entities [Member] | Parent Company [Member]
Cash flows from operating activities	27,981	9,131
Additions to properties, plants, and equipment
Other investing activities, net	6,294	(8,500)
Dividends paid to stockholders	(2,276)	(2,257)
Issuance of debt	31,024
Payments on debt
Other financing activity	(3,544)	(11,169)
Effect of exchange rate changes on cash
Changes in cash, cash equivalents and restricted cash and cash equivalents	59,479	(12,795)
Beginning cash, cash equivalents and restricted cash and cash equivalents	103,878	113,275
Ending cash, cash equivalents and restricted cash and cash equivalents	163,357	100,480
Additions to properties, plants, equipment and mineral interests
Payments on debt
Reportable Legal Entities [Member] | Guarantor Subsidiaries [Member]
Cash flows from operating activities	60,805	13,792
Additions to properties, plants, and equipment	(25,454)	(19,132)
Other investing activities, net	44	164
Dividends paid to stockholders
Issuance of debt
Payments on debt	(1,393)	(3,044)
Other financing activity	(40,658)	9,501
Effect of exchange rate changes on cash
Changes in cash, cash equivalents and restricted cash and cash equivalents	(6,656)	1,281
Beginning cash, cash equivalents and restricted cash and cash equivalents	31,016	26,588
Ending cash, cash equivalents and restricted cash and cash equivalents	24,387	27,869
Additions to properties, plants, equipment and mineral interests	(25,454)	(19,132)
Payments on debt	(1,393)	(3,044)
Reportable Legal Entities [Member] | Non-Guarantor Subsidiaries [Member]
Cash flows from operating activities	2,166	10,757
Additions to properties, plants, and equipment	(17,850)	(26,832)
Other investing activities, net	420	(22)
Dividends paid to stockholders
Issuance of debt
Payments on debt	(2,369)	(671)
Other financing activity	18,930	20,430
Effect of exchange rate changes on cash	(532)	1,086
Changes in cash, cash equivalents and restricted cash and cash equivalents	765	4,748
Beginning cash, cash equivalents and restricted cash and cash equivalents	51,213	32,114
Ending cash, cash equivalents and restricted cash and cash equivalents	51,978	36,862
Additions to properties, plants, equipment and mineral interests	(17,850)	(26,832)
Payments on debt	(2,369)	(671)
Consolidation, Eliminations [Member]
Cash flows from operating activities	(43,934)	12,141
Additions to properties, plants, and equipment
Other investing activities, net	21,359	(424)
Dividends paid to stockholders
Issuance of debt
Payments on debt
Other financing activity	22,575	(11,717)
Effect of exchange rate changes on cash
Changes in cash, cash equivalents and restricted cash and cash equivalents
Beginning cash, cash equivalents and restricted cash and cash equivalents
Ending cash, cash equivalents and restricted cash and cash equivalents
Additions to properties, plants, equipment and mineral interests
Payments on debt