Hecla Mining Co. Stock

Hello, everyone. Thank you for joining us, and welcome to the Q2 2026 Hecla Mining Company Earnings Conference Call. [Operator Instructions]

I will now hand the conference over to Mike Parkin, Vice President of Strategy and Investor Relations. Mike, please go ahead.

Thanks, Hilary. Good morning, and thank you all for joining us for Hecla's second quarter 2026 results conference call. I'm Mike Parkin, Vice President of Strategy and Investor Relations. Our earnings release that was issued yesterday along with today's presentation are available on our website.

On the call with us today is Rob Krcmarov, President and Chief Executive Officer; Russell Lawlar, Senior Vice President and Chief Financial Officer; Carlos Aguiar, Senior Vice President and Chief Operations Officer; Brian Erickson, Vice President of Operations; Kurt Allen, Vice President of Exploration, along with other members of our management team. At the conclusion of our prepared remarks, we will be able -- we will be available for -- to answer any questions you might have.

Turning to Slide 2. Any forward-looking statements made today by the management team come under the Private Securities Litigation Reform Act and involve risks as shown on this slide in our earnings release and in our 10-Q filing with the SEC. These and other risks could cause results to differ from those projected in the forward-looking statements. Non-GAAP measures cited in this call and related slides are reconciled in the slides or news release. Please note, as we discuss the financial figures and projections throughout this presentation and in the earnings release, we are referring to our continuing operations.

I will now pass the call over to Rob.

Thank you, Mike, and good morning, everyone. Turning to Slide 3. Hecla ended the third (sic) [ second ] quarter of 2026 from a position of real strength. And I'm speaking to the financial strength, a position today that marks the strongest balance sheet in the company's very long history. And the attributes shown on this slide that define us as North America's premier silver producers, they haven't changed. What has changed, though, is that we have confidence with which we can now invest in what comes next. So I'm eager to have our teams discuss some remarkable developments that are coming out of our substantial project pipeline, which further solidifies our market positioning. More on that in a minute.

Turning to Slide 4. This was another very strong quarter for Hecla, even though a couple of headline numbers moved in a different direction than last quarter. And I want to spend a moment walking through why because I think the underlying story here is a good one. Revenue from continuing operations was $334 million compared to the record $411 million we reported in the first quarter. Two things are driving that change, and it's worth being clear about both because neither of them is a production problem.

First, metal prices pulled back from the highs we saw early in the year. although I do remain confident in the outlook for silver and gold prices. And second, part of the gap was simply timing. A meaningful amount of silver concentrate mostly at Greens Creek was produced but not yet sold as of quarter end. Had that concentrate shipped within the quarter, revenue would have been noticeably higher on top of an already strong quarter. That inventory shipped in early August, and you're going to see it show up in our third quarter results. Those of you who have followed us for some time know the lumpy sales pattern at Greens Creek.

The adjusted EBITDA from continuing operations was $199 million, more than double the $94 million we generated a year ago. Operating cash flow was $175 million and free cash flow was $136 million. Our second best quarter on record and very close to the record $144 million we posted last quarter. Every single one of our mines generated free cash flow again this quarter. with Greens Creek and Lucky Friday each setting new site level quarterly free cash flow records at $130 million and $88 million, respectively.

Our balance sheet is simply the best it's been in our long history. We ended the quarter with $483 million in cash, no long-term debt outside of capital leases and an essentially fully undrawn $225 million revolving credit facility with a $75 million accordion. The balance sheet, this strong gives us real optionality, the flexibility to keep investing in the projects and the assets that make the most sense for this business on our own time line rather than being dictated to by our balance sheet.

On the operating side, we produced 4.2 million ounces of silver up 8% from the prior quarter. And Lucky Friday delivered new quarterly production record of 1.5 million ounces of silver. And I'm especially pleased with our safety performance. Our consolidated total recordable injury frequency rate or TRIFR for short, improved to 1.57, and that's a meaningful improvement from the 2.07 reported for the first quarter. That's the kind of improvement that reflects real deliberate commitment by our teams. And frankly, it matters more to me than any financial metric on this slide. We also conducted our annual Safety Day in early June with senior leadership visiting every site to reinforce safe working practices.

Turning to Slide 5. Our medium-term pathway to 20-plus million ounce silver producer is advancing, and it's anchored by the Keno Hill ramp-up and a potential Midas restart with further potential upside from Keno Hill expansion and from Aurora and Hollister in later years. And nearer term, we've got 2 organic opportunities at Greens Creek that I'm really excited to give you more detail on today. Both are the kind of high return, low capital intensity projects that we look for. Our bar for any of these organic investments is a return on invested capital that clears our cost of capital by a healthy margin and early work on both suggest that they can.

I'll turn it over to Brian now to walk you through those. Brian, over to you.

Thanks, Rob. Good morning, everyone. Turning to Slide 6. I'll start with the Greens Creek pyrite concentrate circuit. It's a project we're going to share considerably more detail about today. To summarize, we're advancing engineering and metallurgical studies on a new processing circuit at the Greens Creek mill. But if the studies pan out, we would produce marketable pyrite concentrate stream from mill tailings that currently goes to the dry stack tailings facility. Still pretty early stage work, but I want to be clear about our conviction.

Relative simplicity of the project, combined with the potential returns we're seeing at this stage of the study give us confidence that this moves towards execution, not an evaluation for its own sake. Once fully ramped up, we expect the new circuit could add approximately 1 million to 1.2 million ounces of silver and 10,000 to 15,000 ounces of gold in additional annual production. This is on top of Greens Creek's existing output while also reducing the volume we're adding to the tailings facility.

Early engineering and medical -- sorry, metallurgical work points to the potential robust return on capital that would meet our investment thresholds. It's expected to be a low capital intensity project with CapEx currently estimated at about $40 million to $60 million anticipated mostly for mill components, storage building, sizing upgrades and some ship loader work to support the additional tonnage.

Additional operating costs throughout the new circuit are also expected to be relatively low in terms of the overall increase to our annual spend and are currently estimated at an incremental $10 million to $15 million per annum. When you put all this together, you can see the potential for impressive NPV upside at current metals prices. Currently, we're targeting first quarter or first production between the fourth quarter of 2027 and the first half of 2028 with the ramp-up period of roughly a year.

We'll continue to firm up the economics as engineering advances, and we'll keep you updated. I want to stress, these numbers are subject to change as we advance through more engineering studies but we're very excited about the potential for this project in terms of production, but more importantly, in potential future cash flows. Second, I'll discuss the Greens Creek tailings reprocessing project. This remains one of the more compelling opportunities in the portfolio, the dry stack tailings facility [indiscernible] over 600,000 ounces of gold [indiscernible].

At June 30, 2026, metals prices, this represents an in situ value of roughly $6.1 billion, I must emphasize is supporting recovery processing capital cost. We're working with a vendor who specializes in new technology and set to commence Phase 3 metallurgical test work this month, which we expect to complete in the quarter. That work together with confirming a suitable processing facility is expected to determine how we move forward. And as with pyrite concentrate potential to reduce Greens Creek reclamation liability potentially meaningful added benefit to the potential cash flows it could generate. If this project proves viable, we would expect it to be an additional low-cost intensity project that dovetails well with the pyrite concentrate project.

Finally, the Midas restart project in Nevada also continues to advance. We're continuing to evaluate the hub and spoke model that would bring ore from Midas and potentially Hollister or other regional sources through the existing permitted mill. We're also evaluating remaining mineralization in the old mine under the existing mill as a potential additional resource. Kurt will touch on the latest Midas exploration results in a few minutes.

I'll now turn the call over to Carlos for an operations review.

Thank you, Brian. Turning to Slide 8. Greens Creek produced 2.1 million ounces of silver and over 14,000 ounces of gold in the second quarter, in line with our expectations. Cost applicable to sales were $50 million, with cash costs of negative $17.11 per ounce, and AISC of negative $10.71 per ounce, both after byproduct credits. Exceptional results this quarter driven by very strong byproduct revenue. Cash flow from operations was $139 million, and free cash flow was a new site level record of $130 million.

As Rob mentioned it, a portion of the concentrate produced this quarter hadn't yet been sold at the end of the last quarter, which is what drove the gap between our strong production and the revenue we recognized. That inventory was shipped in early August and will be reflected in the third quarter financials.

For the full year, we now expect Greens Creek to produce 8 million to 8.3 million ounces of silver, an improvement over prior guidance and 51,000 to 55,000 ounces of gold of cost applicable to sales of $240 million, with cash costs of negative $12.50 to negative $12 per ounce and AISC of negative $4.25 to negative $3.75 per ounce, both after byproduct credits involved an improvement to prior guidance.

Turning to Slide 9. Lucky Friday had an outstanding quarter, producing a record 1.5 million ounces of silver on higher mill grade. Cost applicable to sales were $35 million with cash costs of $3.95 per ounce and AISC of $17.8 per ounce, both after byproduct credits. Cash flow from operation was $104 million, and free cash flow was a new site level record of $88 million.

The Surface Cooling project is on track for completion by September. For the full year, we have tightened out our silver production guidance to 4.9 million to 5.2 million ounces with cost applicable to sales of $140 million. Cash costs are now expected to be lower at $9 to $9.75 per ounce, and AISC expected to be modestly higher at $20.50 to $26 per ounce reflecting higher planned sustaining capital investment.

Turning to Slide 10. At Keno Hill, we produced 625,000 ounces of silver in the second quarter, up from 0.5 million ounces in the first quarter. Cash flow from operation was $18 million and free cash flow was nearly $15 million, the fifth consecutive quarter of positive free cash flow at Keno. We are taking a deliberate approach at Keno Hill. Rather than push for tonnage growth ahead of the site development and permitting work that needs to happen first, we are running the mine at a sustained lower rate while we focus our efforts there and continue to generate positive free cash flow, work that we believe supports a ramp to meaningfully higher tonnage rate in later years.

Our updated full year guidance is 2.2 million to 2.6 million ounces of silver reflecting our focus on permitting and site build-out in the nearer term. I do want to highlight some good news on the permitting front. We received the permit to expand our tailings storage facility at Keno Hill this quarter. That approval reflecting strong working relationships we have built with both the Yukon government and our First Nation partners the NND. And it's an important piece of the foundation supporting our longer-term plans for the site. I now turn the call over to Russell for the finance update.

Thank you, Carlos. Turning to Slide 12, let me...

Sorry, Russell, if I could just -- Russell, if I could just jump in. I'm aware that Brian dropped out. He's been dialing in from Yukon. So I just want to repeat a part that might be important that was missed. At the time, Brian was talking about the 51 million ounces of silver and the 600,000 ounces of gold and the many other metals that are locked in. I just want to point out that we are working with a vendor who specializes in this technology. And they are set to commence Phase 3 metallurgical test work this month, which we expect to complete in the quarter. So that worked together with confirming a suitable processing facility is expected to determine how we move forward. So I just wanted to complete the record on that because I'm aware that it was lost in transmission. So over to you, Russell. Thanks.

Thanks, Rob. I'm going to start on Slide 12. As Mike noted, everything I'll cover here reflects the results from our continuing operations. Mine revenue during the quarter was $323 million, with silver accounting for 68% of that total while gold was 14% and the remaining from our base metal byproducts. Net income from continuing operations was $118 million or $0.18 per share and adjusted EBITDA was $199 million. Our margins remain exceptional. We realized 90% of the realized silver price as margin during the quarter. Consolidated free cash flow was $136 million, nearly matching last quarter's record of $144 million with all 3 mines contributing.

Turning to the balance sheet. We ended the quarter with $483 million in cash, no long-term debt outstanding outside of capital leases and essentially a fully undrawn credit facility. We've moved from a net debt position of nearly $270 million a year ago to a net cash position of roughly $472 million today, the strongest balance sheet in Hecla's history.

Turning to Slide 13. We've all watched oil prices and fuel prices climb on the back of current world events, and I want to spend a moment on why this is far less impactful for Hecla than it is much of our peer group. The starting point is the nature of our ore bodies. Our mines are high-grade underground mines. Because of the greatest high, we process far fewer tonnes to produce each ounce. We don't run large diesel haul truck fleets that define low-grade open pit operations so our diesel consumption per ounce is structurally low. That is the primary reason fuel is only about 3% of our consolidated cost structure this quarter. It's a function of these operations.

The second piece is where our electricity comes from. Power is our largest energy input and we source it from local utilities primarily from renewable hydro power. Hydro power isn't priced off crude oil or natural gas, so when fuel market spike on geopolitical shocks, the cost of that energy actually runs our mines and mills don't move with them. Put those 2 things together, high-grade ore that keeps our fuel intensity low and a power base anchored in hydro that is decoupled from volatile fuel markets and you get a cost structure that is far more predictable and far more insulated from energy price swings than most of our peers can claim. In an environment of rising and uncertain fuel prices, that translates directly into more resilient margins and it carries the added benefit of a lower carbon footprint for the metals we produce.

As we turn to Slide 14, you'll see this slide has been updated for our Q2 results and outlook changes and projects our 2026 after-tax free cash flow across a range of metal prices. A $50 silver and $3,500 gold, we project about $500 million of consolidated free cash flow for the full year, with these prices below current spot prices. At elevated prices of $75 silver and $4,500 gold above current prices, we see the potential to generate nearly $700 million in free cash flow. At the top end of the range, we're showing today $100 per ounce silver and $5,500 gold. We see the potential to generate nearly $800 million of annual free cash flow. That's obviously a bullish scenario, but it shows the kind of operating leverage our platform has across a wide range of prices. This shows how our business has the ability to produce substantial cash flow across a wide range of price environments. I'll now pass the call to Kurt to go through exploration.

Thank you, Russell. Turning to Slide 16. Our 2026 exploration and predevelopment budget of $55 million remains at an all-time record for the company, representing about 4.5% of projected revenue. We've structured that across 3 priority areas: $24 million at our near mine programs, which carry the lowest risk and highest return in our targeting -- adding 1 to 2 years' worth of resources for conversion to reserves.

$16 million in Nevada across Midas, Aurora and Hollister, targeting a resource of 0.5 million to 1.5 million ounces of gold equivalent aimed at forming the basis for a potential Midas restart. And $10 million in early stage and generative exploration. I'm pleased to share some exciting results from our recent exploration release, which came out last week on the 29th of July and is available on our website.

Turning to Slide 17. At Keno Hill, we've extended a high-grade silver trend to 800 feet of strike length, and it remains open in both directions. The extension brings us closer to the historic Hector Calumet mine which produced over 96 million ounces of silver during its operating life. You can see the old working is on the right side of this image. Recent exploration highlights include 10.2 feet at 62.7 ounce per ton silver or nearly 2 kilograms per metric ton, 10.1 feet at 44.6 ounce per ton silver and 8 feet at 22.4 ounce per ton silver. These exceptional results support our long-term vision for Keno Hill as an asset with the potential for generating -- for generational mining. We are following up on these results and are planning to have a further update later this year.

Turning to Slide 18. In Nevada, our drilling around the Pogo-Sinter gap at Midas has identified 2 new Midas style high-grade gold silver veins and the system remains open. This adds to the picture Brian described earlier around the broader Midas hub-and-spoke opportunity. The new veins discovered are very similar in style to what was mined very successfully previously at Midas. Beyond these results, I want to flag the 2 additional exploration programs are ramping up this quarter.

Drilling at Hollister has been underway for several weeks. And at Aurora, my favorite project, we're on track to begin drilling in mid-August. Aurora is a past producer of extremely high-grade mineralization with historic results grading above 2-ounce per ton gold, which is equivalent to more than 60 grams per tonne. Like Midas, it has a permitted mill at the site. There would be investment needed to make this a viable operating site again. But we'll focus on that with -- depending on what the drill bit tells us before we get there. This could provide -- this could prove to be a major value surfacing opportunity for the company, and I really look forward to the results from the initial holes, which we could have this fall. So stay tuned.

I'll now turn the call back to Rob for closing remarks.

Thank you, Kurt. So turning to Slide 19. Let me leave you with a few thoughts before we open the line for questions. This was a quarter of continued strong financial results, building on a track record that has helped us delever and move into a position of real financial strength, the kind that lets us keep investing in our robust project pipeline for years to come and surface value for our shareholders. The underlying business has never been stronger. We're making disciplined investments in our asset base to set it up for continued success.

Our safety performance improved meaningfully this quarter. And as I said at the top of the call, our balance sheet is without question, the strongest it's been in this company's history. We believe in a robust precious metals market, and we think silver has a very bright future. At today's prices, we're already generating substantial free cash flow. And as Russell just said at the top end of the price scenarios we showed you today, this platform can generate nearly $800 million in annual free cash flow.

So that's the kind of operating leverage we have now, and we're working hard to capture it for our shareholders. I really do hope that you share the enthusiasm that we have through our project pipeline and the excitement it's bringing advances and we believe Hecla remains the most compelling way to gain exposure to silver in this sector, and we look forward to continuing to execute and to keeping you updated throughout the year. I will now ask the operator to open the line for questions.

[Operator Instructions] Your first question comes from the line of Heiko Ihle from H.C. Wainwright.

Congratulations on a good quarter. Obviously, metal prices have gone down a little bit. I mean I assume there is some sort of bonus structure for staff by asset related to metal pricing. I just want to see, is there any way for us to extrapolate this into a cost per ounce or cost per tonne by a dollar change in the underlying silver price? Or how do you guys model this out?

I'll hand that one over to Russell.

Yes. Yes. No problem, Heiko. I would say the most direct tied to silver price is the profit share at Lucky Friday. And if you go back late last year, you'll see as we guided, we had our prices in lower prices because the guidance obviously came out lower in the year as prices went up, you saw our prices escalate. This year, we intentionally built higher prices when we came into January, February, we were at high price -- high silver prices. And so we intentionally built high prices into that profit share. As the year has come down, we have seen that cost abate.

And so in the guidance that we've issued now, we've used robust prices, but not, say, the $90 silver that we used at the beginning of the year. I'm thinking -- trying to figure out a way to convey directly how much that would be per ounce. And frankly, I would have to kind of get back to you on that. I don't have a direct number for you right now. But I think it's generally isolated to Lucky Friday, and you can see it as you look at the cost performance of Lucky Friday over the past kind of year or so.

Yes. I think if you guys come up with some sort of -- I don't want to say formula, but yes, almost like a formula for the analyst community. I think that might be quite helpful. Completely -- question.

Yes, of course, longer-term capital investment, any color on what we should model for longer-term capital? And maybe you can't really answer that question, but I'll try it differently. If you can, are there any large-scale investments at any of the other assets coming on in 2027 and 2028 that may not be obvious for us.

I can continue...

Thanks for the question.

Go ahead, Rob.

Okay. Go ahead, Russell. Okay. In terms -- Sorry, this is awkward because we're in separate offices. I'll just start, Russell, maybe you can fill in the gaps, if you don't mind?

In terms of CapEx, we don't really have any huge expansions going on in the near future. What we do have is the Nevada restart, we estimate that's going to be pretty low CapEx given that we already own the mill. The CapEx for the pyrite concentrate project, that's really quite low, particularly in the context of the phenomenal returns that it's expected to generate. The cooling project at Lucky Friday, that's almost finished. And so I would say nothing really major coming up. Anything to add, Russell?

The only thing I'll add to that Rob is we're building -- yes. Yes, a little bit to add to that. The only thing that I'll add is that we're building tails at Greens Creek, Lucky Friday over the next couple of years. And then Keno Hill, there's tailings that we'll be building in the near term and then kind of more intermediate term, but also Keno Hill will continue to invest in the infrastructure to bring that mine production up.

Cool. Thank you both, and I'll get back in queue. And again, good quarter. I appreciate it.

Your next question comes from the line of Cosmos Chiu from CIBC.

Thanks, Rob and team. And congrats on hitting asset level record free cash flows at Greens Creek and Lucky Friday. But I guess my question is, I'm looking at the asset level. And as Russell mentioned, $130 million from Greens Creek, $88 million from Lucky Friday and additional 14-ish from Keno Hill. But I cannot seem to reconcile that down to your corporate level free cash flow of $136 million.

So when compared to, say, Q1 last quarter, Greens Creek was actually lower, Lucky Friday was actually lower as well, but the corporate level was higher. So I guess if you can help me reconcile how I can come up with corporate level and then that will help me in terms of trying to figure out how to better utilize or best utilize the asset level free cash flow numbers.

I can jump in on that one, Rob. Yes, I was looking at this as well. So it's a good question, Cosmos. If you think about our -- the way we think about our mine site free cash flow, we actually look at the -- looking at Page 3 of our earnings release, where we reconcile free cash flow to cash flow from the operations. And what we do for mine site is we actually add back the exploration expense that was incurred at that site because exploration expense is an expense that we allocate from a corporate perspective, and it's not really related to the core of the operation in the current period.

And so as you think about free cash flow at the corporate level in Q1 versus Q2, what you'll see is the exploration expense did go up Q1 over Q2, and that is included in our corporate consolidated free cash flow number. That's one. And then the other is just corporate expenses that are not included in those Q1 corporate cash and cash outflows, I'll say, that it's not included in Q1. So it's essentially timing. It's working capital timing.

Okay. Okay. Maybe switching gears a little bit here in terms of Keno Hill. As you mentioned, Q2 production was about 600,000 silver ounces and as you mentioned in the MD&A, you're working through a lower grade zone. I guess my question is, looking at your revised guidance for the year, 2.2 million to 2.6 million, midpoint is about 2.4 million. So that's about 600,000 ounces annualized times 4. So I'm just trying to figure it out. You're working through a lower grade portion in Q2.

If you're getting out of it, I would have thought that guidance, at least the midpoint could be higher than what's annualized for Q2. That's number one. And I guess, number 2 is the 600,000 ounces like a sustainable level? Is that what we're looking at? Again, I'm just trying to wrap my head around it.

Well, we are projecting the third quarter being a really similar -- yes. Rob, go ahead.

No, no, go ahead, please, Carlos.

Okay. We are projecting to be the third quarter really similar to the second quarter. Definitely, we are in the new zones, we are in development of the new zones at Keno Hill. And that the projection that we can report today, it's going to be really similar to the second quarter for the remainder of the year.

I guess my question is...

Yes. As Carlos said, look at Q3 looking very similar to Q2. The key point is that we expect to meet our revised guidance at the end of this year. And so what happens in between, we just don't have that level of detail disclosed yet. Go ahead, please expand on your question.

Yes. No, I'm just trying to wrap my head around the sustainable rate, but I think you've answered my question in terms of the new guidance, Rob. And then I guess my other question on Keno Hill is with the lower guidance for the year, does that impact potential timing of commercial production or does it really matter.

So we've outlined our 5 criteria for commercial production. We've only met one, which is the silver recoveries. What we're focused on right now is getting the permits that we need and investing in the infrastructure and working our way through that. I would say that if we can receive those permits, the critical ones by mid-2029 and we can execute on the key infrastructure projects over the next 2 or 3 years and the tailings expansion could be advanced far enough in 2029 to permit the mill to resume normal production levels.

We expect to begin ramping up to higher production levels by the end of roughly 2029. So this is a ramp-up that's been taking a little bit longer than what was initially thought. But we understand what permits we need. We understand the infrastructure that we need to invest in, and we're working to resolve the permits and complete those investments. We are buoyed by the fact that the exploration results that Kurt talked about, you saw the 96 million ounces adjacent at the Hector Calumet. You can see the expansion as we've continued to get high-grade extensions to boom deep.

As Kurt said, this is a generational mine that's going to be hopefully in production for a very, very long time, and we just need to get it through this permitting and an investment phase. And it is free cash flow positive today and it has been for the last several quarters.

That's great to hear. And maybe one last question. Rob, sounds great in terms of the different growth projects that you have in the pipeline. I want to focus on the pyrite concentrate circuit, I guess, as you've mentioned, 1 million to 1.2 million ounces of silver per year 10,000 to 15,000 ounces of gold per year. Is that before or after sort of payability? And if it's before, what's the market like for your particular type of pyrite concentrate and is it fairly clean?

If I want to just model out what this could mean in terms of value because you've given me the other parameters, $40 million to $50 million CapEx, if I had it correct, you gave me some operating numbers as well, but I'm just trying to figure out the production numbers.

Well, the quality is very high. In fact, we've had extremely high demand from multiple inquiries, I guess. I'll hand it over to Russell, and maybe he can give you a little bit more color on that.

Thanks, Rob. As we think about the pyrite concentrate, one thing I do want to point out is you -- I think Brian laid it out well, unfortunately, he kind of -- his line was interrupted a little bit during that. And I think Rob came in and kind of cleared some of that up. But we're still working on this project. It's incredibly, I'll say, perspective. We're very high on it. We think it's going to be a very good project. But we're still working on some of the engineering, and we're still nailing down some of the costs.

So what I don't want to do is put out a return on invested capital number now while we're still in those stages while we're putting those numbers together. What I would say is that we have a return on capital criteria, which we presented at our Investor Day earlier this year of 12% to 15% on return on invested capital. This project, we would expect would exceed that substantially. And if you go back and you look, and I think it's in our earnings release or our Q or maybe both, we expect that we would get roughly maybe 1 million ounces of silver a year from this project.

Yes, that would increase our recoveries. And we would reduce the amount that goes to the tails, which is also cost savings. And the investment will be relatively modest, along with from a capital perspective. And the fact is we're already producing 3 concentrates at this mine. So as a result, the operating costs, we don't expect would go up substantially either. And so from a return on expected capital, we just -- we think it's going to be very, very robust. Does that [indiscernible] for you?

Yes. But I guess going back to my first question, the 1 million to 1.2 million ounces that you outlined, that's before payability factors, right? So if I want to guesstimate some kind of model on my own, I would have to kind of, again, I can do it on my own guesstimate some kind of payability factor to apply to the 1 million to 1.2 million ounces?

I would say -- yes. I mean go ahead and apply payability because, again, like I said, kind of on the front end of this, we're still working through that in some of these details.

Your next question comes from the line of Josh Wolfson from RBC Capital Markets.

Just looking at Lucky Friday and the great performance. I think the company had noted this was in the plan. I'm wondering what was sort of the driver of these high grades. And I guess the commentary that it was not expected to be sustained just going -- looking at the outlook for the second half of the year.

I'll hand it over to Carlos in a minute. But basically, Josh, this was scheduled high grade. It's just a matter of timing. We just went through a high-grade zone this quarter. And again, we don't expect to maintain those high grades. It will probably revert back to the main.

Yes, Yes, it's correct, it was part of the timing, even we were expecting to have a fraction of that high grade at the end of the second quarter. And so at the end of the first quarter -- sorry -- so we had the most significant portion of the high grade in the second quarter and then that was the reason, right, which was planned. And of course, we are not expecting to see that kind of level for the remainder of the year, but definitely it was planned. It was just a matter of timing.

Okay. And then just looking at the cooling project in September, is there anything we should be thinking about in terms of what that means for a tie-in, if that will impact productivity or throughput? And then similarly, once the project is completed, how should we be thinking about the outlook for the mine?

Well, this project was really designed to -- go ahead.

Keep going Rob.

Okay. This project was really primarily designed to set up the long-term future as we get into deeper levels and set ourselves up. We already have a long reserve life ahead of us. It's very difficult to quantify productivity improvements, but it just stands to reason that when you're working in a fairly hot mine, you're going to be less productive when the conditions are not great compared to when the workers are comfortable. I can't really quantify that, but you just know inherently that logically, it makes sense that there should be better productivity.

Got it. Great. And then maybe just last question. The commentary on Keno and looking at sustaining profitability, similar kind of outlook there. Should we be expecting more stable grades and throughput levels to what was achieved in the first half? Or is there still going to be some degree of improvement ahead of this -- the 2029 permitting milestone.

Well, just related to the growth -- go ahead, Carlos.

Well, we are projecting a similar grade and throughput in the third quarter. And with a potential to have some benefit in the last quarter. But it's going to be mostly -- second half of the year is going to be slightly better than the first half.

Okay. And that -- the driver for that was going to be -- which of the factors?

It's going to be a probably better grade.

Your next question comes from the line of Kevin O'Halloran from BMO Capital Markets.

Just digging into the guidance update, it was great to see the AISC guidance come down. Can you give us a sense of the drivers of that? Was it higher silver production from Greens Creek and Lucky Friday larger byproduct contribution, better unit costs? And then maybe any broader thoughts on any cost pressures that you're seeing.

Go ahead, Russell.

Yes. No problem. Thanks, Kevin. Yes, as we think about -- yes, I would say from an AISC perspective, Greens Creek, it really shows the value of that ore that comes out of Greens Creek, right? So 2 or 3 things on Greens Creek specifically. First, they had a great first half of the year, right? In terms of the silver production, so silver ounces were very, very strong.

The gold byproduct is huge. And I made a comment in a different question. I think it was to Heiko earlier on the prices that we used in our guidance for Lucky Friday cost will in a similar sense, we have to make an estimate as it relates to the prices that we used for byproducts at the beginning of the year what would be realized versus what we estimate. And so we tend to be a little bit conservative on that. I'd have to go back, frankly, and look to see exactly what those were there in our year-end release.

And so we've outperformed on the gold for sure. The Zinc has been a very strong -- the price of zinc has been very strong. And one of the things that people do sometimes oversee is the fact that Greens Creek has an incredible zinc byproduct as well. So that's Greens Creek. As produced costs are essentially online. They're doing well. And then from Lucky Friday's perspective, we've seen a better cost, I'll say, better cost control in general for the mine as a whole. We have seen that profit share that I highlighted earlier come off a little bit just because the price of silver has come off. But then again, they had a fantastic first half of the year from a production perspective. So you kind of wrap all of that up, and that's the reason the AISC guidance is better.

I would highlight that we do expect capital spend in the last half of the year to be more than we did in the first half of the year. That's a couple of reasons. The third quarter tends to be kind of a full quarter of better weather as we relate to construction, construction projects are underway that kind of thing. And then we just tend to see more equipment deliveries. We order equipment seems to be earlier in the year and it kind of comes in later in the year. So I would expect the third and the fourth quarter to have more capital spend. And you can see that if you look at our capital spend in the first 6 months versus our guidance.

Great. Yes, that's helpful. Maybe another one for you, Russell. Could you remind us of the tax losses that you have in the U.S. and Canada? And how should we be thinking about the effective tax rate going forward?

I can. So our effective tax rate, one of the things that I would like to highlight as it relates to taxes is our operations in the United States and Canada and as a result, just because -- and I'm going to highlight the United States as a result of the -- frankly, the tax regime in the United States, it's lower than most of the other jurisdictions around the world. And so you should see less cash taxes paid from Hecla than many of our peers.

Number two, during the quarter, and you'll see this -- we highlighted it in our earnings release. During the quarter, we did a little bit of tax work to combine our Nevada U.S. group with our kind of main U.S. group that includes Lucky Friday and Greens Creek. And as a result of that, we actually can utilize the expenses in Nevada against the income that's being generated from Greens Creek and Lucky Friday. So you actually see a little bit lower tax rate as a result of that. And we will see, obviously, less cash taxes paid.

We expect to utilize our NOLs, both on a state and a federal basis for the year. And so therefore, we did make a cash tax payment in the first quarter. I was just trying to look that up, and I frankly don't have it in front of me. But you would see that at this point, that would be the taxes that we expect to pay.

Okay. That's great. And then maybe shifting gears back to the pyrite circuit at Greens Creek. Are there any permitting requirements that you would have to secure for that? And any space constraints on surface at the plant there that you would have to work around? And then maybe as a follow-up, as you're doing the technical and the costing work, when should we expect to see some of those details announced? And should we be expecting any changes to the resource or the reserve with the higher recoveries from circuit?

In terms of permitting, I don't really know the answer to that question. It's basically simply an extension to the existing circuit. So I imagine permitting would be minimal, maybe something at the load-out bay. I don't really know Carlos or Matt, could you add any color on that?

Yes. You are right. For the pyrite, there's minimum permitting required and we are not expecting any significant delays [indiscernible] permitting. So for that project, I don't see any issue, but there's some minimum required.

Yes. And in terms of reserves, it's an interesting question because there's almost certainly some material that was stuck in resources. And now that we have the means to process pyritic ore at a profit, I would expect that there may be some of that converting into reserves, but I can't quantify that right now.

Okay. Great. We'll keep an eye on for that. That's all for me.

Your next question comes from the line of Dalton Baretto from Canaccord.

Rob, I'm sure you've seen that the Trail smelter in BC is undergoing like an $800 million upgrade to process, germanium and gallium. I'm just wondering, has Greens Creek ever been assayed for germanium and gallium. Is that something you're looking at and is there a plan to monetize those if it does exist?

I think there could well be some germanium or gallium actually in the tailings project. I don't really know. I'm going to -- I'll defer to Brian. Brian, if you're still on the call, could you answer that, please?

Yes, I'm on. Can you guys hear me?

Yes.

Okay. Yes, there is, and we've looked at that as part of both ore production and the tailings reprocessing and pyrite concentrate. It's pretty minor, but certainly, that's a conversation we need to have with smelters on what the recoveries could be on that and the payability.

Great. And then just sort of a similar question, I guess, on Lucky Friday. A couple of its neighbors down in the Silver Valley there are banging the drum on antimony and downstream processing there. Is that something you guys are looking at as well? Could you be part of that if there was a central antimony plant?

Lucky Friday doesn't really have any significant antimony compared to our neighbors. So we have looked at that.

Great. And just a final one on that sort of Silver Valley thematic there. There's lots of these single asset guys there now that are either up and running or moving towards first production. And there's probably a case to be made for consolidation there. Is that something that Hecla would be interested in or look at all?

We're primarily excited by the inherent upside in our own assets. So at Lucky Friday in particular. There hasn't been any meaningful exploration there since about 2011. And so that's something that we're kicking off at present. We continue to monitor all of our neighbors, I guess, and if there's a compelling value proposition, we will consider it, but we're more excited about the potential on what we already own and understand and where we already have our own infrastructure, which is in top shape.

Your next question comes from the line of Eric Winmill from Scotiabank.

A lot of mine have been answered, but just a quick question on Aurora. I know it's still early days, but there's a mill on site there? Do you think it makes the most sense if you find a resource to process it on site? Or would it be part of maybe kind of hub and spoke system here at Midas? And if you do it at Aurora, any cost to refurb the mill there?

Do you want to do it? Go ahead. At Aurora -- thanks for your question, Eric. At Aurora, it's too far by road. We had processed some loaded carbon previously. But to take ore from Aurora to Midas, it's probably not going to happen. We do have about a 600 tonne per day mill that's on site. It's actually -- it's not in great condition, I have to say, certainly not as good as Midas. And so that's why they're going to require reinvestment or potentially a new mill that remains to be determined. Really, it's -- let the drill bit do the talking.

As Kurt said, he's very excited about this. I went out to this project in the late spring, and I actually understand why he's excited, there's legacy open pits. There's legacy underground production workings and adits. And then the best target that Kurt's focused on hasn't had a single drill hole on it, and you can actually see it from the side of the hill. So I'm very excited to see what he's going to yield.

Okay. Fantastic. That's very helpful. One more, if you don't mind. Just on Midas and what you're seeing here in the Sinter offset. Presumably, that's on the south side of the main fault there, right? But it looks like some sort of an offset. Is it very similar to what you're seeing in the main Midas mine? Or any additional commentary would be helpful.

Yes. It's similar to the Midas mine. It's more broken up than what we see at Midas. Midas had very narrow really high-grade veins within a 6-, 7-foot, 8-foot wide zone. And so it's similar to that in that respect. The offset is very similar to the Sinter discovery that we had in 2021.

Your next question comes from the line of Alex Terentiew from National Bank.

A lot of good questions asked here and most of mine are taken, but I've got a couple of follow-ups here. So first, maybe just on Midas. I mean, obviously, there's a lot of some exciting exploration there. You guys have talked quite a bit about a lot of existing infrastructure that you can quickly turn back on. Can you just remind me, maybe kind of walk me through the process of what we should expect over the next 1 or 2 years? I'm just trying to get a better sense of when we could see Midas become a formal project go ahead that you're going to make a production decision there, and we could see the first gold from that?

I'll hand that one over to Matt.

Thanks Rob. So to answer your question, Alex, we're actively studying. Obviously, Kurt is drilling and identifying the resource and we get that all firmed up. And my worst nightmare is if Kurt finds that resource and turns to me and says let's put it into production tomorrow, and I don't have that ready. So we've already started geotechnical assessments of the rock. We've started on a hydro geo -- hydrogeologic assessment for inflows and geochemistry.

We've also started on some of the mine design and what it would take to refurbish the mill. So those numbers are all ongoing. But obviously, we're not going to invest in any of that until we decide we've been able to firm up with in the ground. So the timing will be very related on exploration success, but we're being prepared now to have that information ready if he gets that -- assuming the drill identifies the resource that we're really looking for. Does that help?

Okay. Yes, yes. No, I guess that helped. I mean, even if the resource proves itself to support a restart, I would expect and still this is a best case, call it, 2, 3 years away from first order, does that kind of make sense still, best case scenario?

It's probably in that range. But again, a lot of unknowns out there, but yes, that's probably a reasonable thought.

Okay. Any permitting constraints or any...

Permitting constraints. Okay. So in terms of permitting constraints, we're in the process of reviewing what we have available. In general, we have a lot of that -- those permits in hand, some will require modifications, some will require some updates, but that's in general, we're in a much better spot than what we would be if it was just a greenfield site.

Okay. Great. And then just one last question...

Alex, when you think about project -- sorry, Alex, when you think about project development, the normal course is you define a resource, you do your studies and stuff like that. But we're in a unique situation in that we already own some of the key infrastructure. And so what we're trying to do is be agile here and run parallel streams. So Kurt is obviously trying to define the critical mass of resources that we need to get this in the production. Matt's trying to work on all the background engineering study work that needs to happen. So it's really about being agile.

In terms of 2 or 3 years, I would suggest it will probably be a little bit longer than that. In terms of key permits, if, for example, conceptually, we want to put a portal to access the new discoveries that Kurt and his team have made. That's probably almost certainly going to require a new permit. But the mill with the tailings facility, all the key ones, we already have them in hand.

Yes, that makes a lot of sense, Rob. I guess we're just going to look at these projects and see all the infrastructure. And I think that these things can be turned on relatively fast, but always forget that there's quite a bit of more work behind the scenes that has to get done.

And I just got one more question just on Keno Hill. I mean, obviously, this mine has been running for a few years. You're talking about certain permits, but hopefully by mid-2029. I just want maybe a bit more color on the work that's being done there or what's needed for these permits. Is some of this more of a time series data collection that is just frankly, no matter what you do, it's just going to take some time to prove things up for whether it's environmental or water purposes? Or I'm just trying to see if there's anything that can be done to expedite that process.

Not really. I mean permitting takes its course. It's up to us to provide the engineering and the design criteria that basically informs the permit. And then the regulators take as long as they need, they obviously need to consult with the First Nations group as well. But we do know the sequence. And really, it is -- as we've said previously, it is focused on making sure that we have sufficient water treatment capacity that we have sufficient tailings capacity and waste dump capacity as well. We understand the sequence we -- but in terms of the timing, it's very hard to pin down. We're going as fast as we can, but it's not entirely in our hands.

This concludes the time allocated for questions. If you have any additional questions, please reach out to Mike Parkin via the contact us link on the website. I will now turn the call back to Rob Krcmarov, President and CEO, for closing remarks.

Well, thank you all for the thoughtful questions today, and thanks for joining us this morning. I'll just leave you with this. We are in the strongest position this company has ever been, and we're putting that strength to work in the right places for our shareholders and for the long-term value of this business. We do look forward to updating you again next quarter. So thanks, everyone, and have a great day.

This concludes today's call. Thank you for attending. You may now disconnect.

Hello, everyone. Thank you for joining us, and welcome to Q1 2026 Hecla Mining Company Earnings Conference Call. [Operator Instructions]. I will now hand the conference over to Mike Parkin, Vice President of Strategy and Investor Relations. Mike, please go ahead.

Thank you, Hillary. Good morning, and thank you for joining us for Hecla's First Quarter 2026 Results Conference Call. I'm Mike Parkin, Vice President of Strategy and Investor Relations. Our earnings release that was issued yesterday, along with today's presentation are both available on our website. On the call today with us is Robert Krcmarov, President and Chief Executive Officer; Russell Lawlar, Senior Vice President and Chief Financial Officer; Carlos Aguiar, Senior Vice President and Chief Operations Officer; Brian Erickson, Vice President of Operations; Kurt Allen, Vice President, Exploration; Matt Blattman, Vice President, Technical Services; as well as other members of our management team. At the conclusion of our prepared remarks, we will also be available for questions.

Turning to Slide 2, cautionary statements. Any forward-looking statements made today by the management team come under the Private Securities Litigation Reform Act and involve risks as shown on Slide 2 in our earnings release and in our 10-Q filing with the SEC. These and other risks could cause results to differ from those projected in the forward-looking statements. Non-GAAP measures cited in this call and related slides are reconciled in both the slides and the news release. We've also published our 2025 sustainability report earlier this week, which is available on our website.

Please note, as we discuss financial figures and projections throughout this presentation and in the earnings release, we are referring to our continuing operations unless otherwise noted. This reflects the sale of the Casa Berardi operation that closed at the end of March. I will now pass the call over to Rob.

Thank you, Mike, and good morning, everyone. Before I get into the quarter, I want to take a moment to acknowledge where we stand as a company right now because I think the context matters. 18 months ago, when I joined Hecla, this company carried nearly $550 million of net debt. Today, we carry no long-term debt, none. That transformation and what it unlocks for shareholders is really what this call is about. So turning to Slide 3. Hecla enters the second quarter of 2026 in the strongest financial and strategic position in the company's recent history. As North America's premium silver producer, we've got six core attributes that really distinguish us from our peer group, a silver legacy stretching back to 1891, operations exclusively in the United States and Canada, peer-leading silver exposure in both revenue and reserves, a reserve life roughly double that of our peer group and a deep and advancing project pipeline and also a cost structure that positions us as the lowest cost producer in our peer group. These all help to support our premium valuation and make us a premier destination for silver investors.

Turning to Slide 4. The Casa Berardi sale in March was a deliberate well-timed decision. We harvested the cash flows to that point, secured substantial value, including a 9.9% equity stake in Orezone and the deferred cash consideration. And we freed ourselves to do what we should be doing, directing our capital and management's attention towards our silver growth platform. And then on April 9, about four weeks ago, we redeemed our final $263 million of senior notes.

So Hecla is now free of long-term debt for the first time in many, many years. We have a fully undrawn $225 million revolving credit facility and a cash balance that's building on strong operating performance in the silver market. What excites me is what comes next across the portfolio from the Greens Creek pyrite concentrate circuit and tailings reprocessing project to the Midas restart opportunity in Nevada. We have a set of organic value creation opportunities that are compelling because of what they share in common. Each is screening to have lower capital intensity than the conventional mine development, though that assessment remains subject to ongoing evaluation, particularly for the early-stage project.

That means the potential for robust returns on invested capital and real per share value creation. We believe in this value, and we're working hard to unlock it. Beyond these near- to medium-term opportunities, I am very excited about our 2026 exploration program, representing a near doubling of exploration investment from 2025, which could be the thing that reshapes the long-term picture of this company.

Turning to Slide 5. The numbers of this quarter, they speak for themselves, and I'm proud of what this team has delivered. Revenue from continuing operations exceeded $410 million. That's up 13% from the prior quarter and double what we generated in Q1 2025. Record adjusted EBITDA of $265 million and record consolidated free cash flow of $144 million with every single mine free cash flow positive, every one. We produced 3.9 million ounces of silver, roughly 3% more than the prior quarter. Cash costs are nearly negative $3 per ounce and all-in sustaining costs below $10 per ounce. At today's silver prices, those are exceptional margins. And the quality of those margins reflects how the transformation of this business is showing up in the numbers.

Turning to Slide 6. So Slide 6 puts our production outlook in perspective. We're guiding to 15.1 million to 16.5 million ounces of silver in 2026, a strong operational baseline. But what I want you to see is the trajectory beyond that. Our project pipeline supports a potential pathway to 20-plus million ounces annually, and that's driven by Keno's gradual ramp to 440 tons per day and the potential restart of Midas in Nevada. And beyond that, a potential Keno Hill expansion and possibly more growth from the Aurora and Hollister mines in Nevada as well as the Libby project in Montana. But before we get to Midas, there are two near-term opportunities associated with our flagship Greens Creek mine in Alaska that I'm particularly excited about. And I want to make sure that they get the proper airtime today. So Brian Erickson, our VP of Operations, he will give an overview on those and then give you an update on the Midas restart project. So Brian, over to you.

Thanks, Rob. Turning to Slide 7. First, I'll discuss the Greens Creek pyrite concentrate circuit, which is a new project that we're introducing to the market. We're evaluating the feasibility and economic potential of developing a pyrite concentrate circuit at the Greens Creek mill. If successful, this project would generate additional marketable concentrate stream, boosting overall silver and gold recoveries from the mill while potentially reducing the mine's reclamation liability significantly. There's also additional upside through potential reserve expansion as the inclusion of lower grade silver in our sulfur blocks could grow the underground mineral reserve. The project is currently estimated to be low in capital intensity and could provide cash flow in about two years. We expect to provide another market update on this project in late '26, early '27. Second, Greens Creek tailings reprocessing project. We introduced this project to the market during our Investor Day this past January in New York. I want to be clear about where this sits today. We're still in the evaluation stage, and we'll make a development decision once the test work is done. What makes this project compelling is what's sitting in the dry stack facility at the site, an estimated 10.4 million tons containing an estimated 50 million ounces of silver and nearly 600,000 ounces of gold, along with several other critical minerals.

At year-end 2025 prices, the gross metal value of what's in the facility was approximately $6.8 billion. I stress gross value because that's before recovery rates, processing costs and the capital required to actually extract the metal. We have a third-party partner advancing Phase 2 metallurgical test work, which we expect to complete around mid-2026. That test work along with confirming a suitable processing facility is what will determine whether and how we move forward with this work. Early results have been encouraging, and the indications are that this doesn't require the kind of capital you need to build a new mine from scratch.

We'll have more to say once that -- more to say on that once the test work's in hand. On top of the potential cash flow, reprocessing the tailings has the added benefit of potentially reducing the mine's long-term reclamation liability, turning what is currently a liability into a source of value. Finally, the Midas restart project in Nevada. As you know, Nevada is considered one of the best jurisdictions in the world for mining, and we have three highly compelling projects in the state that we're planning to advance this year through exploration and other work. Midas, the most advanced of the three is a historically high-grade silver operation, gold as well, we acquired as part of the Klondex transaction. It has fully permitted infrastructure that meaningfully reduces the capital required to bring the asset into a cash flowing state. We're evaluating a hub-and-spoke model -- operating model where ore sources from multiple regional properties, including the nearby Hollister project are transported to and processed through the existing 1,200 ton per day permitted mill. The site also has an adjacent permitted tailings facility with approximately 15 years of storage capacity.

We've allocated $16 million to Nevada exploration in 2026, more than 3x last year's investment, and Kurt will give you an update on the latest drilling results in a moment. Our goal is to establish a resource big enough to warrant investment in a restart. But let me be clear that the grades we're hitting the target is well below 1 million ounces of gold equivalent to get started. This targeted resource is expected to form the basis for a restart PEA. I'll now turn the call over to Carlos for the operations review.

Thank you, Brian. Before I walk through the mines, I should mention that we have reiterated our production and cost guidance for the year. You can find that summary on Slide 22. Turning to Slide 9, starting with Greens Creek. In the first quarter, the mine produced 2.2 million ounces of silver and 13,000 ounces of gold. Total cost of sales came in at $82 million with cash costs of negative nearly $12 per ounce and AISC of negative $8.39 per ounce, both after by-product credits.

Those are best-in-class numbers, and they reflect the strong by-product revenue we are getting from gold, zinc and lead. Cash flow from operations was $131 million and free cash flow was $126 million, a very strong quarter. One thing worth highlighting operationally, Greens Creek set a record for underground backfill placement this quarter, placing nearly 164,000 tons, which is 16% above the 2025 quarterly average. That's a meaningful achievement because it gives us more operational flexibility and better ground stability as we move through the rest of the year.

Turning to Slide 10. Lucky Friday produced 1.2 million ounces of silver in Q1. Total cost of sales was $49 million, cash costs were $12.07 per ounce and AISC was $23.78 per ounce both after by-product credits. Free cash flow was $49 million. On the operating side, throughput was up 10% over the prior quarter, although that was partially offset by 11% decline in the mill grade. That's a fairly typical outcome given the grade variability you naturally see at Lucky Friday, and we do expect average silver grade to improve in the second quarter. On the surface cooling project, construction is 81% complete, and we are on track to finish by midyear. This is an important long-term investment. It's designed to expand cooling capacity over the mine's roughly 15-year reserve lives, so we can continue mining safely and productively at depth.

Turning to Slide 11. At Keno Hill, we produced nearly 0.5 million ounces of silver in Q1 and free cash flow was $15.3 million. I want to point out that this marks four consecutive quarters of positive free cash flow at Keno Hill, demonstrating profitability at current throughput rates and silver prices. Production in Q1 was impacted by two things: reduced power supply from Yukon Energy Corporation due to the extreme cold weather that carried over from Q4 and lower silver grades as we mined through a lower grade zone of the Birmingham deposit. The good news is both of those headwinds are behind us. We expect mill rates to improve in Q2 as we move into higher grade areas and the power constraints have been resolved. With that, I will hand it over to Russell for the finance update.

Thank you, Carlos. As we turn to Slide 13, let me take you through our financial results. As Mike noted in the cautionary statements, what I'm about to discuss is based on results from our continuing operations, meaning that the impact from our sold asset, Casa Berardi is excluded from these figures. The first quarter was record-setting for a number of financial metrics. Revenue from continuing operations was more than $410 million, up 13% over the prior quarter and double the level from the first quarter of last year, reflecting continued operational execution and significantly higher realized silver and gold prices. As you can see on Slide 13, 73% of our revenues came from silver and all of that revenue came from either the United States or Canada. This fundamentally sets Hecla apart from peers in both categories and provides significant value to our shareholders. What is more important, though, is the return on these revenues.

As you can see from the graphs on the bottom of the slide, we realized a margin of 90% of the realized silver price during the quarter, which is truly phenomenal. This margin translated to substantial free cash flow from all our mines, which, as expected, was led by Greens Creek at nearly $126 million during the quarter. However, Lucky Friday was also impressive at almost $50 million, while Keno Hill generated $15 million, even though it's still in the ramp-up stage. I'll speak more about how we'll allocate this capital in a couple of slides. Turning to the balance sheet. We ended the quarter with $588 million in cash and total debt of $266 million, resulting in a net cash position of $321 million. This is a significant strategic inflection point and a significant milestone.

The chart on this slide in the upper right-hand corner illustrates just how dramatically this picture has improved in a fairly short period of time. As Rob mentioned, it's something that materially derisked this company and adds substantial shareholder value. After quarter end, we redeemed our remaining $263 million of senior notes, leaving Hecla with no long-term debt for the first time in many years. We now carry a fully undrawn $225 million revolving credit facility with a $75 million accordion, representing the strongest balance sheet in the company's recent history.

Turning to Slide 14. I'd like to turn our attention to what the entire suite of assets can do over time at different price decks. The chart you see on this slide has been updated for Q1 results and illustrates projected 2026 consolidated free cash flow across a range of silver and gold prices. At $100 ounce per silver and $5,500 ounce per gold, we project over $900 million of consolidated free cash flow for the full year. At price assumptions of about where we are today, $75 silver and $4,500 gold, we project over $700 million.

This incredible cash generation capability provides substantial flexibility and strategic alternatives we'll discuss on the next slide. Our capital allocation framework on Slide 15 reflects a disciplined priority ordered approach. Safety and environmental excellence comes first. It is the foundation of our license to operate, investment in these priorities is non-negotiable. As we move to investing in sustaining and growth capital where we see target returns in the 10% to 15% range, these investments are the lifeblood of our company and provide future value for further investment.

We'll hear from Kurt in a minute on exploration. However, our potential to add shareholder value through the drill bit is exceptional. We've increased our investment this year as we've derisked our balance sheet, freed up cash flows and would expect with success the potential to continue to increase these investments in the future. I discussed the balance sheet strength and deleveraging and the value this brings to our investors on the previous slide. However, we will continue to add cash to our balance sheet while maintaining high-quality investments in our business.

Strategic investments are evaluated on return on invested capital and per share accretion basis, but do not come around often. And thus, we need to maintain a strong balance sheet to be able to make these investments when those opportunities arise. Additionally, considering our best-in-class mines with long lives, low cost in the best jurisdictions, we don't feel rushed to make any strategic investments now, but we'll be in a position to do so when the time comes. And finally, shareholder returns round out the framework. With a debt-free balance sheet and record free cash flow, we're focused on securing a cash balance capable of funding our project pipeline and surfacing value for our shareholders.

And as we do so, we'll begin to consider capital return to our shareholders. We currently have a share repurchase plan, which has been Board approved for 20 million shares. I want to put that in context for a moment because I think it speaks to something that distinguishes Hecla from our peer group. Our peers have pursued growth aggressively through M&A over the past five years, deals that diluted their shareholders by more than 50% in some cases. Hecla's share count has grown at a fraction of that rate. And the result -- on every per share metric that matters, silver production, reserves, revenue, we rank first among our peers. We're the only silver producer in our peer group to have grown silver production per share over that period. That's the discipline we intend to carry forward. So as we accumulate cash and if we see dislocation in our value versus the underlying fundamentals, we won't hesitate to deploy capital through buybacks as long as it meets our return on capital criteria. I'll now turn the call over to Kurt for the exploration update.

Thank you, Russell. Turning to Slide 17. 2026 marks a transformational year for Hecla's exploration program. We're investing $55 million in exploration and predevelopment, which is an all-time record. We've structured the programs across three priority areas, and I expect more and more activity across the number of sites as we move into the warmer months. At our producing assets, we're aiming to more than replace reserve depletion, and I'm very excited about our Nevada growth projects with drilling ongoing at Midas, starting up at Hollister in June and at Aurora in July. The Aurora Gold and Silver project in Western Nevada really has me most excited. It's earlier stage than Midas, but arguably carries the greatest long-term discovery potential.

With historic grades averaging over two ounces per ton gold equivalent and seven drill-ready targets now defined across the large land package, Aurora has the hallmarks of a district that has been underexplored rather than exhausted. And critically, Aurora has its own 600 ton per day permitted mill on site, which means that if exploration delivers a compelling resource, the capital threshold to production is materially lower than a blank sheet development. While I have been to Aurora multiple times, Rob has recently visited the project, and we're both very eager to see our initial drill targets tested.

Turning to Slide 18. Our follow-up drilling on the Sinter Offset vein at Midas continues to build our understanding of this high-grade gold and silver system. Drillhole DMC-476 returned 0.21 ounce per ton gold, 1.6 ounce per ton silver over 2.3 feet, extending the known vertical extent of narrow high-grade mineralization along the Sinter Offset structure to more than 500 feet. We've now defined the strike-length of this structure over 1,350 feet and drilling will continue to step out to the southeast where the structure remains open as well as to the northwest. Two additional holes also intercepted parallel high-grade structures, reinforcing the prospectivity of this area. We will be providing regular Nevada updates, exploration updates throughout 2026. I'll now turn the call back to Rob for closing remarks.

Thank you, Kurt. Let me start with the market because it really sets the stage for everything else. We -- recently, the World Silver Survey was released, and it confirmed 2025 as the fifth consecutive year of supply deficit with cumulative stock drawdowns now exceeding 700 million ounces since 2021. That's the kind of structural tightness that doesn't resolve overnight, and we're not seeing new mine supply coming online in any meaningful manner over the medium term. Price has been volatile year-to-date. That's the nature of this market, but the gold-to-silver ratio sits around 65:1 today, well above the trough that we saw in the last silver bull market.

And history tells us that ratio compresses as silver outperforms. We don't know exactly when that's going to happen. But what I do know is that Hecla, debt-free with record free cash flow and the best silver exposure in the sector is a really compelling way to be positioned for when it actually does. The six attributes on this slide, legacy jurisdiction, silver focus, reserve life, project pipeline, cost structure, they're not just the list, they're the result of deliberate choices made by this team over the past 18 months.

And I believe they represent a differentiated investment case that the market will increasingly recognize debt-free, record free cash flow, clear organic growth pathway at low capital intensity. We're just getting started, and I look forward to keeping you updated throughout the year. I will now ask the operator to open the line for questions.

[Operator Instructions] Your first question comes from the line of Heiko Ihle from Wainwright.

Given the current commodity price environment, are there any longer-term capital projects that you are now more included to undertake at any of your currently operational sites, say, in 2027 and beyond. You've mentioned a bit about the pyrite concentrate circuit for the tailings reprocessing project. But I mean, are there things that maybe are not yet built into analyst models on a 3-year plan maybe?

Thanks for the question, Heiko. Not really. I mean we've basically highlighted the projects that we are focused on in the next several years. Some of them are obviously shorter term, like the Pyrite Concentrate Project, which Carlos spoke about. I mean that's a very near-term opportunity, perhaps coming on in the next couple of years. Beyond that, nothing really longer term unless we have spectacular success at Aurora.

Your next question comes from the line of Wayne Lam from TD.

Maybe just curious at Keno Hill, can you remind us on what the permits are that are outstanding there that are limiting you from ramping up throughput? And if I recall, was that just on the back-end capacity with the dry stack tailings. And just wondering with the potential resolution of the Victoria Gold sales process recently announced, do you view that as maybe providing some visibility to permitting that would allow you to ramp-up the mining rates there?

Thanks for your question, Wayne. On Victoria Gold, it doesn't really affect us other than at some point, when they're ready, they're going to be competing for a little bit of permitting bandwidth. But I don't expect anything is going to happen there in a hurry. Some of the outstanding issues there, the leakage that's still happening that needs to be resolved, a robust relationship like the one we have with the First Nations that needs to be established all that credibility. So Vic Gold, I can't see that really affecting us in the short term.

On the permits question, I have Patrick Malone. He's our VP of Sustainability. I'm just going to refer to him because he's been very heavily involved with him and his team, and he's built out a team there to assist us in our permitting endeavors. Patrick?

Thanks, Rob. So Keno Hill's permitting path involves 2 processes. First, we have to go through -- submit a project proposal to Yes, which is the Yukon Environmental Socioeconomic Assessment Board. We expect to do that by the year-end. Then -- yes it takes about 12 months to complete its review, after which we'll submit 2 permit applications, the QML, which is Quartz Mining License and a Water License for amendment.

Those amendments are really about removing some of the long-term constraints. Those constraints include constraints on waste rock, on tailings and on water treatment as well as some other things like power and camp space. We expect -- our current estimate is that the amended permits could be received sometime around mid-2029, although, of course, there's variability around permitting. In the short-term, between now and the time we receive those permits, there are a few constraints that continue to hold Keno Hill back.

In the near term, we need approvals on our Phase 2 West tailings from the regulators, which would allow us to expand the Phase 2 tailings. Then after that, waste rock potentially becomes a limitation under both the QML and the Water License. We are -- so receiving these long-term permits in mid-2029 is critical to our long-term success. We are running up against waste production limits and storage capacities in the near term, but we're actively engaged with the regulators to get some short-term relief until we receive those permit amendments.

Okay. So I guess, I know you guys have previously outlined a very gradual phase ramp-up there. So I guess there's no potential to kind of fast track the ramp-up of development on, say, Birmingham or Flame & Moth or some of the infrastructure items so that when you get the permits, you'd be in a position to quickly accelerate to the 440 permitted rate or even 600 imminently?

The 440 rate, I mean, it's going to be a gradual ramp-up. Again, it's a sequence of permits. In the meantime, we need to manage the water. So the more development you do, the more water you need -- you expose the more water you need to treat. So all these things are tied in. I can't see that there's really a way to meaningfully accelerate this project. I would say there are some risks with permitting, but I would think of any potential, let's call it, a curtailment is really a bridge problem. It's not an asset problem. The reserves don't change.

But obviously, if there is a delay, that's got time value of money impact on IRR. But we have a 16-year reserve life. We have very, very strong economics even at $30 silver. That doesn't go away. Our focus, again, is on that permitting work. That keeps us running. And again, I'd note what we talked about earlier in this call, $15.3 million in free cash flow in Q1, and that's the trajectory that we're protecting. So really, it's really all about the permitting and getting ready to ramp up to 440.

On the 600 tonnes per day, that's -- and beyond, that's really a future. That's going to require a whole new wave of capital investment and additional permitting. We're not focused on that. We're really focused on the here and now.

Okay. Understood. And then maybe just with the high-yield notes paid down, obviously, the balance sheet is in pretty great shape. Obviously, in a very different market, you guys have previously rolled back the Silverlink dividend component. But just in the context of your peers now increasing capital returns and linking those returns to cash flows, is that something that we could see sometime soon with a similarly linked component given the cash generation projected ahead?

Thanks, Wayne. This is Russell. I can take that. Certainly, in our prepared remarks, I mentioned that we are looking at capital returns. But what we do believe is that investment in our business brings better returns than it does in terms of shareholder returns. However, we do have a strong balance sheet, like you said, and we have deployed significant cash to debt redemption as compared to -- if you look at our peers, many of our peers have refinanced or kept the debt on the balance sheet. So we have a little bit of a different strategy there to trying to return long-term shareholder value that way.

But we will be discussing with our Board how and what our return on investment strategy should be, our return on capital strategy should be. And so yes, I would say stay tuned to that. We'll continue to discuss that with the market as time goes along. But we want to make sure that we adequately fund all of the growth opportunities that we have internally because that's really where the value is created in this business.

Your next question comes from the line of Cosmos Chiu from CIBC.

Maybe my first question is a follow-up. Rob, in the MD&A, you mentioned that the 440 tonnes per day at Keno Hill is a medium-term target. But it sounds like -- what is medium term? It sounds like you might need the permit. So is medium term, 2029, you're not going to be able to hit the 440 tonnes per day until you get those permits sometime in 2029. Am I reading that correctly?

Yes. That's -- Patrick pointed to a couple of key permits that we really need to get by 2029. And so until we get those, that would...

It remains a challenge between now and the time we get our permit amendments. That really unlocks the value. And we're expecting that to be mid-2029.

Got it. Understood. And then maybe at Greens Creek and maybe elsewhere as well, I saw that there was a bit of inventory buildup. There was inventory buildup last quarter. I think you're kind of working through it. For example, the silver and zinc is now kind of -- sales is equating to production, but precious metals, you're working it through, but it's still not completely -- you haven't completely worked through some of that inventory buildup yet. Lucky Friday sales were lower than production in Q1. So I guess, holistically, my question is what's causing the inventory buildup? When do you think you can kind of work through some of that through sales in subsequent quarters? And how long is that going to take?

Yes. Thanks, Cosmos. I'll take that question. And in terms of the inventory and the accounts receivable, keep in mind at Greens Creek, we have our own deepwater port that we kind of control. So that's actually a huge strategic asset to us. But what that means is our shipments go out generally once a month, and they're very lumpy. And so just depending on when the ship leaves the port, you may have inventory that's sitting at the port or you may have AR that's sitting in your accounts receivable.

We do have opportunities to advance the receipt of accounts receivable. But when we take a look at it, especially with the balance sheet that we have, it's really accretive to our investors for us just to wait and get those funds in the normal course of business. And so that's what you've seen probably more in the past maybe year than you had previously is that we're making those decisions with a longer-term view than we have previously because of the lack of debt and the less leverage, that kind of thing. And so I would suggest it's really a timing difference. And quarter-to-quarter, it's going to be challenging to try to determine exactly when those ships will leave and when they will -- and when that AR might be collected.

But what I would say is that the accounts receivable that we had on our books as of the end of the quarter was really collected in the next 30 days mostly. We also see because we're concentrate producers, as the price of silver goes up, we'll settle those -- the pricing on shipments will be a future month. So we see the value of the accounts receivable go up as well. So that's part of what you're seeing in accounts receivable.

As it relates to Lucky Friday, we generally ship just on a monthly basis -- or sorry, monthly -- weekly basis. And therefore, it just kind of depends on when during the week, the month falls is -- determines on what the AR or the inventory is.

Great. I want to ask my question before I get cut off by the operator here. And then in terms of Greens Creek, it sounds like certainly very interesting in terms of different projects that you have in place. And it's good that you've announced the Pyrite Concentrate Project as well. I guess my question is, in terms of return on invested capital, what kind of hurdle rate are you looking at in terms of some of these projects here, if you can share with us? And then in terms of the Pyrite Concentrate Project, again, to the extent that you can share with us, any potential sort of penalty element to that concentrate? And what's the market like right now for that Pyrite Concentrate?

In terms of return on invested capital, we haven't isolated it for that particular project, but I would expect it would be very compelling, just given that it's a fairly low CapEx project. I don't know what the circuit cost. I'm going to guess around max $40 million or something, could be $50 million.

Good starting point.

Yes. And so I would expect the return on that investment to be really, really quite compelling. Again, our corporate target is 12% to 15%, and this will easily fit in that. With regards to the concentrate market, my understanding is very, very strong, and that's why we're looking at it. And this unlocks potentially more reserves as well as contributes to revenue.

Yes. The only thing I'd like to add to that, Rob -- I mean Cosmos, we've run these things internally, but we're very early in the process. So what I don't want to do is give a specific number that we would have to reel back because we have got a lot of work left to do. But in the work that we've done and we look at the treatment charges that we're modeling, we're being conservative in terms of both the charge that we would pay as well as the refining charge for both gold and silver and the payabilities.

And even with those, what I would hope will be conservative, but maybe long-term treatment charges and refining charges. It's still very, very compelling. And so I think that's probably about all of the detail that we have right now until we are able to do a bit more work and really put a holistic study around it.

Yes. The other thing I forgot to mention is that it also reduces our reclamation liability. So multiple benefits here. We're very excited about this project and also the fact that it's low capital intensity in near term.

Yes. And then if you do get the go ahead for it sometime down the road, all these projects can happen concurrently, right? Like in terms of the tailings recovery, the Pyrite Concentrate, again, not saying that in terms of timing, it's going to coincide exactly, but if that's the case, they can happen concurrently.

Spot on Cosmos. We are working on both streams. Yes. You're absolutely right. We're working on both streams. They're not going to all land at the same time. The pyrite con is obviously much shorter term. We still -- just to remind you, the tailings reprocessing, our Phase 3 testing is underway at the moment. The samples have arrived in the laboratory. If we get success on that, we'll update the market later on this year. The next stage would really be progressively scaling up to -- next to the pilot plant potentially and then scaling up beyond that. That's earlier stage. It's probably not going to deliver for beyond the potential delivery of the pyrite con, but we're working on both of them at the same time.

Your next question comes from the line of Alex Terentiew from National Bank.

Congrats again on another good quarter. Questions for you. Just -- I just want to follow up just on the Keno Hill. Sorry, can you guys hear me?

I can now, yes.

Okay. I'm not sure what happened there. Okay. My first question, just on -- I wanted to follow up on the Keno Hill. So to get to the 440, you're talking about mid-2029 to get those permits. You previously talked about slowly ramping going up over the next few years. Is that still the plan with that timing? Or should we just kind of assume more steady state until then?

Alex, this is Patrick Malone. Yes, I think we're looking at more steady state. Some of that will be dependent on ongoing discussions with the regulators trying to provide a short-term relief. But I think you can expect a steady state or in some cases, maybe slowing down a bit to make sure that we're maintaining capacity.

Okay. That's great. And the last -- sorry, my next question, I know you noted you're going to have some discussions with your Board on capital return strategy here. But you did mention also you have a share buyback in place. Is this something that you plan -- if you decided yet to have a program buy in place or just be a bit more opportunistic? Or how are you approaching that scenario?

I would suggest we need to discuss that with our Board and ensure that we're all aligned on a holistic strategy. But I would also suggest that any investments that we do make from a shareholder return perspective still have to meet the return on investment criteria that we've outlined for investments that we make in our business as well. So we'll be looking at it from that perspective.

Okay. All right. No, that makes sense. Last question, if I may. Greens Creek had another really good quarter here, beat, I think, beat my numbers at least based on grade. And if you look at annual guidance, this was above 25% anyway. I don't know what the exact math was. But my question here is, was that in line with expectations, those better grades? Or do you see -- are there any planned downtime or lower grade phases that we could expect for the rest of the year? Just kind of wondering, is there room for the guidance to possibly even be improved a little on that line if you are getting better grades than expected?

We are reiterating our grade and our cost for Greens Creek, and we are expecting similar grades for the remainder of the year.

Your next question comes from the line of John Tumazos from John Tumazos Very Independent Research.

How should we compare the new Midas Mine to the old one that Dr. Ken Snyder and the team started up? Should we think of it as 500 tonnes a day, half an ounce gold, 10:1 silver? Might the tonnes be more?

Thanks for your question, John. I would say it's almost certainly going to look different from the old Midas mine. So 2 things here. The starting resource at Sinter, which I've flagged previously, is roughly between 180,000 to 200,000 ounces at very high grades. It is a narrow ore body. The extensions that Kurt and his team have found are again narrow and very high grade. The mill is rated at 1,200 tonnes per day. So that's what we have to play with.

We're looking at potentially multiple ore sources from the Sinter. We're also relooking at any potential remnant mining at Midas itself. That's a study that's underway. And you'll recall that Midas was closed at a significantly lower gold price than where we are today. So there's potentially some wins there. So I guess what I'm saying, John, is that we have potentially multiple ore sources, and it's not going to look exactly like the previous Midas operation. The one thing that is constant is that there is a permanent limit on 1,200 tonnes per day for the mill.

I'm unfamiliar with Aurora. Could you tell us whether it's open pit, heap leach target, what the range of grades might be, whether it's got much silver in it or whatever we know thus far about Aurora.

Thanks for that. I'm going to ask Kurt to chip in, in a minute. But I have to say, as Kurt pointed out, I went out to Aurora about 4 weeks ago. Now I've heard Kurt talking very excitedly about Aurora in the past. And I had to work to get him focused on Midas, which he's also excited about. And when I went out there, like I get it, you walk around on the surface and there are historic open pits, historic undergrounds, there's veins like with incredible intensity that just run for kilometers. And Kurt's favorite target has never had a single drill hole in it. So Kurt, anything you want to add?

Yes. I think our targets that we have defined, they're underground minable targets. We're not focused on open pit mineralization there at this point. There has been open pit mining there at Aurora in the past. But we're really focused on high-grade underground mineable targets. Really excited about this project.

Is it gold only? Or is it gold and silver?

It's gold and silver, probably a 1:1 ratio. For the most part, it's high-grade gold, but there's associated high-grade silver with that as well.

If I could ask one more. Coeur and Pan Am each made large silver acquisitions in Mexico. I know we're sticking to the U.S. and Canada. Now that your balance sheet is very strong, is it possible to consider an acquisition? And if so, would it be limited to the U.S. and Canada? Most of the silver targets are in Latin America or spread around the world.

Yes. Good question. I would say one of the things that really differentiates us, and I pointed out in the opening slide is that we operate in safe jurisdictions. And so it's -- you've got to go where the silver is. And so the scarcity of primary silver deposits. We would consider other jurisdictions. But again, they have to be in relatively safe jurisdictions.

So as a rule of thumb, anything in the top 1/3 of the Fraser Institute index, we would do a proper analysis on. We wouldn't accept it at face value and would understand those risks before we moved. So that's -- it is -- we would potentially go offshore but in a safer jurisdiction. On M&A, we've outlined our organic growth project. That's really what we're focused on. Obviously, we continue to look at opportunities. You never stop looking in this business, but we're not really interested in getting bigger for its own sake.

So scale alone, that doesn't create value. And I think Russell discussed the dilution that comes with doing M&A. It's an easy track to fall into and one we've consciously rejected. Again, what we're really focused on is long-term shareholder value creation on a per share basis, and that governs all the decisions that we make. So again, we are going to be disciplined if and when we do M&A. It's really going to be about jurisdiction, safer jurisdictions. Precious metals focused with a strong, strong silver bias, exceptional gold assets, we will consider, but only if they're compelling cash generators that would really fund, really our overall silver strategy, but silver first.

We also have to see a clear competitive advantage for us in operating the asset, whether that's district consolidation, whether it's leveraging existing infrastructure, our technical capability or exploration upside, whatever that is, we need to see a competitive advantage and financial returns. Obviously, as Russell talked about, we're going to hold ourselves accountable to that. So right now, the M&A environment is pretty active. There is competitive pressure to move. We understand that, but we're seeing what happens when companies acquire at a fear of missing out rather than conviction, and we're not going to do that. So we're not acquisition dependent for growth. Our internal pipeline is our main focus, but we'll obviously be opportunistic.

This completes the time allocated for questions. If you have additional questions, please reach out to Mike Parkin via the Contact Us link on the website. I will now turn the call back to Rob Krcmarov, President and CEO, for closing remarks. Please go ahead.

Thank you, Hillary, and thank you all for your time and your questions this morning. This team has worked hard to get Hecla to this point, debt-free, cash generative and with the best silver exposure in the sector. The fundamentals are with us, and we're just getting started. So have a great day, everyone. Thank you.

This concludes today's call. Thank you for attending. You may now disconnect.

Next, we have Rob Krcmarov, President and CEO of Hecla Mining.

Good morning, everyone, and thanks to the European Mining Forum for having us here in Zurich. I'm Rob Krcmarov, President and CEO of Hecla. I've been in the chair for 18 months now. And I'll tell you that the more I've learned about our business, the more I realize that we're building something that's really quite unique and special.

I want to make the next 15 minutes or so making that case. We are headquartered in Coeur d'Alene, Idaho. And we are the largest silver producer in Canada and the United States.

Now I will be making some forward-looking statements. I'll also be talking about non-GAAP financial measures throughout. Reconciliations are in the appendix and on our website and our 10-K filings as well.

A few numbers to ground you. NYSE ticker is HL. Market cap, around about $13 billion today. We've got a very strong trading liquidity. 670 million shares outstanding. Balance sheet at year-end, we had $241 million in cash, $262 million in long-term debt. I'll say had because debt was retired last week. So now we're basically debt-free. We've got a fully undrawn $225 million revolving credit facility and a $75 million accordion on top of that.

Balance sheet is in the best shape that it's been for years. Ownership, around about 78% institutional, 22% retail. Ten analysts covering us, on the left of the page, including Cosmos and others who are here.

There are six things I really want to talk to you today and keep in mind as we go throughout. So firstly, our silver legacy. Oldest precious metals on the New York Exchange, longest listed mining company, 135 years. I think that basically shows that we've got a demonstrated track record, that we're able to operate through every commodity cycle manageable, through depressions, through everything. And it speaks to our resilience and culture.

The next is we're in the best jurisdictions, every mine, every project, U.S., Canada, full stop. And I think in the world that we're living in at the moment, I think that really matters enormously. We've got peer-leading silver exposure both in revenues and reserves, and I'll show you some data on that in a minute. So when silver moves, we obviously move as well. As I said, reserve dominance. Our average reserve mine life is nearly double all of our peers. Again, I'll show you some data on that in a minute.

We've got real project momentum. We've got a pipeline that's at a genuine inflection point at the moment, and I'll be specific about that coming up. Cost excellence. We are the lowest cost producer in the peer group. And obviously, with the silver leverage, it's a very powerful combination.

So I think this map in one image tells you our jurisdictional advantage in a single image: Greens Creek in Alaska, one of the world's premier polymetallic mines; Lucky Friday in Northern Idaho, last year, it smashed all production records, and it's a real transformation story; and Keno Hill in the Yukon, the largest primary silver mine in Canada. And we've also got a growing exploration portfolio, and it's anchored by some really exciting projects in Nevada, which I'll come back to.

So one jurisdiction premium. Really no political risk. I think that's really increasingly rare in this industry and worth more now than it was 5 years ago.

This is a chart I keep coming back to because I don't think it gets enough credit. The silver peer group average reserve life, shown in that dash line at the bottom, is around about 7 years. We're at 13.3, so nearly double. And it's not just the company average. Each one of our individual mines, shown in blue, it beats the peer average on its own. So Greens Creek, 12 years; Lucky Friday, 15 years; and Keno Hill, 13. So our weakest asset exceeds the industry average.

I think another thing worth flagging here is this chart is also sorted out from left to right by gross profit. And our best earning assets, they're all silver mines. They're not gold mines. And so that's the sort of portfolio that we've built. Long mine lives obviously mean that you have planning certainty. You have visibility over the horizon. You can see what's coming at you. It creates genuine optionality and a lower cost of capital over time. That's a real structural advantage.

This bubble chart basically tells the same story visually. X-axis is silver equivalent grade. Y-axis is reserve mine life. Bubble size is the scale of the reserves. So more reserves, larger bubble. Blue is U.S. and Canada. Gray is everything else. And you can see all of our mines in the upper right: high-grade, long-life best jurisdictions. No other company in this peer group has 3 assets in that part of the chart. That's our portfolio.

So for investors in this room, this slide really matters. Q4 2025, 59% of our revenue from silver. Strip out Casa, that was our gold mine in Quebec which we sold recently in Q1 this year, and that number now is nearly 73%. So look, where we sit on that scatter plot, we're that outlier on the right, high silver revenue, higher silver reserve concentration. So if silver leverage is what you're looking for, we are the most direct way to own it.

So what does that leverage look like in practice? At $75 silver and $4,500 gold, close to where the market is today, projected 2026 cash flow is around about $600 million. At $100 silver and $5,500 gold, which is where we were not that long ago, that grows to approximately $850 million. And that cash is being deployed with discipline. Our debt has been retired, as I said. Record exploration investment is underway, and the reason for that is to try and generate value and create options for us. And our project pipeline is funded. Each of those builds value in a different way, but together, they compound.

This shows our production trajectory. So last year, we produced about 17 million ounces. 2026 guidance is 15.1 million to 16.5 million ounces. And I want to address that step down directly because most of you are going to ask why.

It's essentially a single asset, single grade story. Greens Creek, that's our cornerstone asset. The grade bumps around. It is a complex ore body. Some years, we're mining higher-grade zones, others lower. And the mine sequencing this year takes us into a lower-grade zone. So this is a normal function of how underground mines work. The grade varies year to year as you work through the ore body.

Lucky Friday and Keno Hill, they're both broadly flat year-on-year. And again, the long-term grade profile at Greens Creek is unchanged. It's not a reserve quality issue. Our medium-term target, as you can see on the far right, is 20 million ounces, Two primary drivers for that. One is Keno Hill continuing the ramp-up and the other one is a potential restart in Nevada at Midas.

And there's also additional longer-term potential at things like Aurora and additional expansion in the future at Keno Hill. We have a permit limit of 440 tonnes per day. The mill is capable of doing 600. That's going to require another phase of investment capital and more permitting. So that's for the future, but there's real growth potential there, and then a couple of tailings reprocessing opportunities that I'll talk about shortly.

I think Midas is worth spending a moment on, and you can see a picture of the mill there. I think it was built by Franco-Nevada. It was operated by Newmont for a long period of time. It's a good quality mill. We did some engineering studies, two, actually. And the more thorough one at the end of last year suggests maybe around about $50 million to get that back up to operational condition. So largely paid-off mill, needs a bit of refurbishment. We've got an empty tailings dam that just requires some minor repairs.

So the story is we've got a nearly fully permitted facility, 1,200 tonne per day mill, tailings infrastructure, surface facilities, utilities in place. And our 2025 exploration program was pretty exciting. It identified a couple of new structures, new veins, both very high grade. So the path from here is really aggressive exploration in 2026. If that continues to pan out, resource definition and technical studies in the next year or 2, then a go, no-go decision and production perhaps 3 to 4 years beyond that. So realistically, potentially an operating mine in, let's call it, the next 5 years or so. And very low capital intensity, as you can see. We've got the mill and the empty tailings dam.

And I'd say this, having spent a couple of years of my career previously at Barrick, I know Nevada very well. I spent a lot of time there. And I do know this geological setting well. I think the belt that holds Midas and Hollister as well as over in the Walker Lane that hosts Aurora, they're both very highly prospective and definitely underexplored when you're looking at modern exploration techniques.

Aurora itself has its own on-site 600 tonne per day mill. Our Head of Exploration, he's always been going on about how excited he is about Nevada, about Aurora in particular. And I said, "Kurt, you need to focus more on Midas. That's where we have the mill." He says, "Yes, I know, I know." I finally went out there 10 days ago and like I get it now. I was walking around on surface, and I saw line kilometers of epithermal veins, really good vein textures, mineralization everywhere. So very excited to drill that this summer.

All-in sustaining costs in 2025, $11.28 per ounce. And you can see where the rest of the peer group sits. Most of them are north of $20. And I think this really reflects the grade of our ore bodies, the efficiency of our operations and also, obviously, the byproduct credits that we get from our polymetallic mines. And that low cost, it really keeps you alive in a down cycle. And at current silver prices, it's really, really generating some exceptional margins.

This is our capital allocation framework. It's prioritize safety and environment, obviously, first, then sustaining and growth capital. People do sustaining capital and, in lean times, they tend to do the absolute minimum. We're not in that environment now. We can reinvest in our business and make sure we set ourselves that well for the future. And then growth capital, real exploration, not just reserve replacement. We already have very, very long mine lives. And so we're looking at making some transformative discoveries. Hopefully, we're seeing the first steps of that maybe later on this year at Aurora and at Midas.

Balance sheet is really strong, making strategic investments and shareholder returns. The debt's gone as of last week. As I said, we've got a fully undrawn revolving credit facility and the accordion. That's real financial flexibility and the opportunity to be, well, opportunistic, I suppose, if quality assets become available. As cash builds and individual projects clear our investment hurdles, shareholder return enhancements will move up the priority order.

Safety is the foundation of our success. I don't say that as a cliche. Safety is core to everything that we do. Our total reportable injury frequency rate improved last year. I think we can do better. Our focus for 2026 is on fatality prevention. It's been a long, long time, fortunately, that we've had a fatality, and we need to make sure it stays that way. Every metric we hit on, production costs and cash flow, really starts with people going home safely. And as I've always said, a safe mine is a productive mine. Safety speaks to housekeeping. It speaks to planning, making intentional decisions, and that's why I pay attention to it. There's a business reason for it as well as the personal human one.

Let me just briefly touch on a couple of our operating mines. Greens Creek, Admiralty Island, Alaska, that's our cornerstone asset. Since we acquired this, it's generated $2.4 billion of cumulative free cash flow. I mean that's extraordinary. And look at that compounding curve on the upper right. It's one of the most profitable silver mines on earth and it keeps performing. 12-year reserve life, long history of reserve replacement, so much so that we're actually building tailings storage that goes well beyond its reserve life. That's how much faith we have in this thing continuing.

In 2025, we produced 8.7 million ounces of silver, nearly 60,000 ounces of gold, met or beat guidance on both metals. All-in sustaining costs, negative $2.36 per silver ounce for the full year, best 15th percentile of the global silver cost curve. And at the moment, we're advancing something that I find really, really quite compelling and quite interesting. It's something that we haven't just invented recently. We've been working on this for a few years now, and that's really a commercial scale assessment of tailings reprocessing opportunity.

And you can see the tailings there. It's dry stack tails. It's basically a pile of sand sitting on the surface. You can see it there. And that contains roughly 50 million ounces of silver and almost 600,000 ounces of gold at very good grades. Just the combined silver-gold grade equivalent, it's about 4 grams equivalent sitting on surface, already mined, already crushed. Meaningful quantities of lead, zinc, copper and nickel, critical metals as well, approximate in-ground metal value of about $6.8 billion. So if we can capture 10% to 30% or more percent of that, I mean, this is a really potentially meaningful project.

As you can see, we're at Phase 4 metallurgical study. We've already done 3 earlier phases. Very encouraging results. This time around, we've sent a much larger sample to EnviroGold, our partners in Australia. And if this reprocessing works, which is looking like it's going to work, at commercial scale, the next step would be a pilot plant and then obviously scaling up and doing that.

I think the benefit of doing something like this, it's not only harvesting the potential cash flows from recovery of the metals. It also reduces storage costs because we'd be taking tailings off of the site. And that means that reclamation obligations will be reduced, new cash flow stream, and we're effectively monetizing what's now currently a liability. And as I said, there's always that critical minerals dimension.

And so for investors thinking about things like supply chain resilience and the energy transition, I think this is a real option and it's embedded in an asset that we already own, we're already operating. Another thing that I haven't really spoken about, we need to do a fair bit more work around it, there's a very strong pyrite concentrate market. And so that's another option that we're looking at the moment. More on that later on this year.

Lucky Friday, Silver Valley, Northern Idaho. 5.3 million ounces last year, a new production record. I mean, you can see by the decades, historically, it's been bouncing around 2.5 million to 3 million ounces a year. We implemented this very new innovative mining technique called underhand closed bench mining. It's changed the game for everything. It was primarily driven by safety, but you can see productivity now. We're basically forecasting an average of well over 5 million ounces a year for the next decade and probably beyond. 80-year operating history, and this is really an investment in innovation and it's really paid off very well.

We're also completing a couple of significant projects. That's the surface cooling project. That's on track to be completed in the coming months. It is a deep mine. It's to make sure that our workers are comfortable and healthy and safe and operating in a pleasant environment. Now obviously, when you're working in a more pleasant environment, you're going to be more productive. I can't quantify that, but it makes sense to pretty much everyone in this room. We're also doing a pond 5 tailings lift, tailings construction. That's on schedule. That will extend the capacity out to 2044, and so that's also well beyond on our current reserve life. We expect this mine to keep going.

We've also reinitiated exploration for the first time in 15 years. We've got a shaft that's got deep access. And so the idea is look outboard of that and see if we can add value. We've also looked at some business improvement workshops. Last year, we identified a way that we can cut costs is owner-operated drilling, cutting out the contractor. We can do it ourselves and probably cheaper, pretty straightforward. Mine and mill optimization was another project that's being worked on now, and so expect updates throughout the year.

Keno Hill, that's in the Yukon. That's Canada's largest silver mine and our newest mine. It's in the middle of a significant ramp-up. 2025, we produced 3 million ounces of silver. And Q4 last year was the third consecutive quarter that we had positive free cash flow. You'll recall several years ago, we were putting about $60 million a year into this thing. Now it's actually paying for itself, which is very encouraging.

The financial case for Keno Hill, when it's at its fully permitted throughput, that's the 440 tonne permit limit, you can see in the bar chart on the right. At just $50 an ounce silver, the mine generates 47% IRR. And at $75 an ounce silver, about today's spot price, that IRR is a really compelling 83%. So definitely worth pushing through and getting there. And we see really significant exploration potential on this asset, and we believe that we could be running this mine for decades.

Just briefly. We do have some projects to get through. Most of them require some permitting. It's really about water, waste and tailings, and you can see the list of things that are in progress there.

Switching to exploration. In 2026, we're investing $55 million in exploration. That's nearly double what Hecla's invested in the past, and I think it's pretty much an all-time record. And we allocate that across those three categories: near-mine brownfields exploration; Nevada growth, which I'll get to in a second; as well as early-stage generative, and expect to see us a little bit more entrepreneurial, maybe perhaps doing some earn-ins and things like that.

So going to Nevada. 3 assets in 2 huge districts: Midas and Hollister as well as Aurora. Plenty of existing permitting infrastructure already in place, and that's really quite unique. We're not starting with a virgin exploration grassroots posture. We have a lot of key facilities already in place and key permits.

At Midas, fully permitted mill. Historically produced 2.2 million ounces of gold, 27 million ounces of silver. Historically at very high grades, about 0.5 an ounce gold equivalent. Hollister, nearby. Truckable distance, I think it's something like about 14 miles away. Very high-grade gold and silver as well, and that's within hauling distance. And Aurora, also exceptional historic grades, over 2 ounces per tonne. There is a small 600 tonne per day mill, and it produced 20 million ounces of silver. And as I said, this is the one project that our Head of Exploration, Kurt Allen, really is excited about.

So just to wrap up. Six attributes: so silver legacy, 135 years history, best jurisdictions, silver focus, reserve dominance, project momentum, cost excellence.

And so what I've hoped that I've shown you today is that they're not just talking points. They are backed by real assets, by real production, real cash flows, strong balance sheet that just keeps getting stronger in this environment, in fact, a debt-free balance sheet. Record exploration investment and a growth trajectory that sees us going to 20 million ounces of silver in the medium term and perhaps beyond that. Lowest cost in the peer group, longest reserve mine lives, double the grade.

High silver leverage. Silver is obviously getting the attention it needs at the moment, and I think Hecla is the premier way to own it.

And so with that, I'm happy to take any questions if there's time, Cosmos.

Yes. Thanks, Rob, for a very compelling presentation. Unfortunately, we don't have time for questions, but I'm sure Rob will be happy to answer your questions outside.

Great. Thank you.

Good morning, ladies and gentlemen, and thank you for standing by. My name is Kelvin and I will be your conference operator today. At this time, I would like to welcome everyone to the Q4 and year-end 2025 Hecla Mining Company Earnings Conference Call. [Operator Instructions]

I would now like to turn the call over to Mike Parkin, Vice President of Strategy and Investor Relations. Please go ahead.

Thank you, Kelvin. Good morning, and thank you all for joining us for Hecla's Fourth Quarter and Full Year 2025 Results Conference Call. I'm Mike Parkin, Vice President, Strategy and Investor Relations. Our earnings release that was issued yesterday along with today's presentation, are available on our website.

On the call today with us is Rob Krcmarov, President and Chief Executive Officer; Russell Lawlar, Senior Vice President and Chief Financial Officer; Carlos Aguiar, Senior Vice President and Chief Operations Officer; Kurt Allen, Vice President, Exploration; Matt Blattman, Vice President, Technical Services; as well as other members of our management team.

At the conclusion of our prepared remarks, we will all be available to answer questions. Turning to Slide 2, cautionary statements. Any forward-looking statements made today by the management team come under the Private Securities Litigation Reform Act and involve risks as shown on Slide 2 in our earnings release and in our 10-K filings with the SEC.

These and other risks could cause results to differ from those projected in the forward-looking statements. Non-GAAP measures cited in this call and related slides are reconciled in the slides or the news release. I will now pass the call over to Rob.

Thank you, Mike, and good morning, everyone. Turning to Slide 3. 2025 was a transformational year for Hecla, one marked by disciplined execution and strategic clarity. Hecla's 135-year legacy as the oldest company on the New York Stock Exchange is our foundation, but it's not our destination.

What drives this forward is our clear compelling strategy to become and be recognized as the premier silver company in North America. So let me walk you through how we're executing against this strategy. Our foundation relates on 3 critical pillars. First, legacy and longevity. 135 years old, we're the oldest mining company on the NYSE, we protect value through market cycles for over a century. Second, top jurisdictions. All of our mines and projects from Greens Creek in Alaska to Lucky Friday in Idaho to Keno Hill in the Yukon to Midas in Nevada. They operate in the best and safest mining jurisdictions in North America.

This jurisdictional advantage is a competitive advantage that protects our cash flows, reduces our risk profile and safeguards our license to operate. Third, silver-focused. We made a deliberate choice to build peer-leading silver exposure in both our revenue mix and our reserve base. While we produce gold, lead, zinc and copper as important byproducts, silver is the strategic anchor of our business.

Our strategy delivers 4 key outcomes: portfolio value servicing. So we're actively managing our portfolio, retaining and investing in our world-class silver assets while strategically divesting noncore assets. The pending sale of Casa Berardi, which we announced last month is an example of this disciplined approach to capital allocation. It was a difficult decision, but one as fundamentally as a silver company, we had to make operational excellence.

We're relentlessly focused on core asset optimization and execution. Not at the expense of safety or sustainability, they are the foundation of everything that we do and key drivers of productivity, not a compliance exercise

Investment discipline. This is the new Hecla. We utilize strict capital discipline with target ROIC thresholds to guide us in our path forward. Every dollar we deploy is intended to generate returns for our shareholders. And finally, organic growth. Through disciplined exploration programs, we are servicing value for shareholders. And I think our recent Nevada exploration demonstrates this approach.

We're working to discover and build the next generation of production from assets that we already own. This strategy is not abstract. It's delivering tangible results, as you'll see on the next slide.

So moving to Slide 4. 2025 was a transformational year for Hecla. On the financial front, we delivered record revenue of $1.4 billion, record profitability, net income applicable to shareholders of $321 million or $0.49 per share, record adjusted EBITDA, $670 million. But the headline number that matters most is what these records enabled, which is substantial deleveraging and balance sheet transformation.

Our total debt has declined to just $276 million. Our gross debt to adjusted EBITDA ratio, 0.4x. We generated operating cash flow of $563 million, which translated to $310 million in free cash flow, with each mine generating positive free cash flow last year.

On the operational front, we executed well, hit our top end of silver production guidance at 17 million ounces, exceeded our gold production guidance with 150,000 ounces produced. Lucky Friday delivered a record 5.3 million ounces of silver production, exceeding the top end of the guidance range. It was as recently as 2021 that Lucky Friday was producing 3.6 million ounces, nearly a 50% increase in just 4 years.

Keno Hill achieved new record production of over 3 million ounces while achieving first year profitability and positive free cash flow under Hecla ownership. Our Lucky Friday surface cooling project is 79% complete and on track for mid-2026 completion. That's a critical investment in the health and safety of our workforce and a key milestone as we work towards making Lucky Friday a zero discharge facility. And we received our finding of no significant impact or FONSI at Aurora, which is a major permitting milestone allowing us to kick off exploration activities this year at this historic very high-grade gold silver producer in past producer in Western Nevada.

Turning to Slide 5. Now I want to talk about the pending sale of the Casa Berardi to Orezone Gold Corporation. This transaction represents portfolio optimization in action. Casa Beradi is a gold mine in the Tier 1 jurisdiction. It has a nice future, had a nice run with us. its midrange mine plan is for a gold miner, someone with a different schedule than us. So we plan to redirect capital and management focus towards our silver assets. We still have upside exposure with a 10% stake in Orezone. Why does this matter strategically? Well, there's 4 reasons.

First is strategic portfolio optimization. So we're sharpening our focus. Capital that was tied up in gold would now flow towards silver assets with superior economics and longer reserve lives. Second is the enhanced market position. Upon closing, Hecla should be recognized unambiguously as the premier North American silver mining company. So silver would represent about 73% of our consolidated revenues, the highest silver revenue exposure among all our multi-asset mining peers with all our operating mines in the best jurisdictions.

Third, strengthen the balance sheet. We plan to use cash proceeds towards debt reduction and enhanced financial flexibility. This positions us to a debt-free balance sheet with prices sustaining or better. Fourth is value maximization. We maintain exposure to Casa Berardi's upside through our Orezone shares, with Orezone well positioned to extract additional value from the asset given their focus and expertise in gold. I think this is a sophisticated capital allocation. This is how we maximize shareholder returns. And so now I'll pass the call over to Russell.

Thank you, Rob. As we turn to Slide 11, let me take you through our financial scorecard because the numbers tell a compelling story of transformation. On balance sheet strength, our gross leverage ratio improved to 75% from 1.6x in 2024 to 0.4x in 2025, while our net leverage ratio improved 94% from 1.6x to 0.1x. And at current metal prices, we're positioned to achieve a debt-free balance sheet within 2026.

This balance sheet transformation has set the company up for future growth with a substantial reduction to risk. On margin and return generation, our silver all-in sustaining cost per ounce margin improved from a very strong 54% in 2024 to 75% in 2025. This reflects both strong realized prices and disciplined cost management. our free cash flow surged from $4 million last year to $310 million this year.

While our return on invested capital improved 3x from 4% to 12% we're now generating returns well above our cost of capital. These changes all sum up to cash on our balance sheet, increasing ninefold from $27 million coming into the year to $242 million coming out of the year. This represents a complete transformation from a leveraged balance sheet to a position of financial strength in a single year.

As we turn to Slide 8, I'll walk through some of the details from the fourth quarter because they show a sustained momentum and operational consistency. During the fourth quarter, we generated $439 million in revenue. Silver accounted for 59% of that total, but notably excluding Casa Berardi, our silver exposure is expected to increase to approximately 73%, which would provide the highest silver exposure among our peer group, not to mention jurisdictional profile or other unique attributes.

Our realized silver price in the fourth quarter was nearly $70 per ounce, beating the quarterly average by over $14 per ounce. Our all-in sustaining cost was $18.11 per ounce, putting the -- our silver margin at $51 per ounce or 74% of the realized price. This is exceptional profitability. Our adjusted EBITDA was $670 million in 2025, which coupled with gross debt deleveraging, improved our net leverage ratio from 0.3x last quarter to 0.1x this quarter, demonstrating the momentum in our deleveraging trajectory.

We generated almost $135 million in free cash flow on a consolidated basis during the quarter, and all our operations contribute positively. This excellent quarter and the resulting cash flow was due to better pricing, but also executing on a variety of strategic initiatives across all our assets.

As we turn to Slide 9, the bar chart here illustrates our projected cash flows across a range of silver and gold price scenarios. As we discussed during our Investor Day, Hecla has among the best leverage to silver prices compared to peers, which could improve upon closing of the Casa Berardi sale. This analysis on the slide assumes the Casa sale is completed and a $75 silver and $4,500 gold, we forecast cash flows of about $600 million, but this grows to about $850 million at $100 silver and $5,500 gold.

Based on our forecast and at these metal price scenarios, we estimate nearly 70% of our revenue would be tied to silver sales, which is an industry best.

Turning to Slide 10. I want to continue to emphasize our capital allocation framework because it's central to how we create shareholder value. We've shared this framework over the recent months, and it guides every decision we make at Hecla. We maintain an unwavering commitment to 6 key pillars in priority order. First, safety and environmental excellence, which is first and foremost. Second, sustaining and growth capital maintains our asset base de-risking our assets and providing a solid base to build from as we provide high return in organic growth.

On exploration, it provides asymmetric potential returns as it's critical in the long-term strategy of any mining company. As we think about deleveraging and strengthening of our balance sheet, this provides financial resilience and flexibility and ensures ability to invest when opportunities arise. We think about strategic investments, whether internal or external will be guided by our predetermined return on investment criteria.

As we -- and lastly, as we think about shareholder returns, we'll look to return additional capital to shareholders when appropriate, with a focus on maintaining strict return on investment criteria. This framework ensures disciplined decision-making aligned with long-term value creation. I'll now turn the call to Carlos.

Thank you, Russell. Turning to Slide 12. Before we move to asset-by-asset operational results, I want to start with what mattered most. Operational excellence begin with safety. Our 2025 total reportable injury frequency rate was 1.69, which is a 13% reduction year-over-year. this single year improvement reflects a multiyear of systematically driving down our TRIFR to dedicated focus on keeping our employees and contractor safe. This is not luck, its culture, systems and commitment and it matters because safe mines are productive mines.

In 2024, we reaffirmed our commitment to safety values to a company-wide safety day and the rollout of Safety 365: Work safe. Home Safe. In 2025, we focused intensively on the specific drivers of incidents. And in 2026, we are implementing a formal Fatality Prevention Program alongside continued improvement of all safety systems.

Moving to Slide 13. Let me walk through our 3 operating silver mines, starting with Greens Creek, our flagship world-class low-cost silver mine in Alaska that has been in production for over 35 years and is expected to continue delivering exceptional economics for many years to come.

In Q4, Greens Creek produced 2 million ounces of silver with ASIC of under $3 per ounce after byproduct credits generating $102 million in operating cash flow and nearly $80 million in free cash flow. For the full year 2025, Greens Creek delivered 8.7 million ounces of silver at the top end of guidance with ASIC of under negative $2 per ounce after by-product credits.

For 2026, we are projecting 7.5 million to 8.1 million ounces of silver and 51,000 to 55,000 ounces of gold with AISC guided to nearly 0 after by-product credits. This is a testament to the extraordinary economics of this asset. What's remarkable about Greens Creek is the longevity of the resource base. We had a 12-year reserve mine plan, but through ongoing exploration success, we see a pathway of sustained reserve replacement well beyond that time frame. That's why we are investing today in obtaining facility building out capacity to 2045.

When this mine started 35 years ago, we had a 10-year mine life. Today, 12 years of reserves ahead plus significant reserves we are actively working to convert to reserves. Greens Creek is a mine in a Tier 1 jurisdiction with world-class economics. It is the cornerstone of our portfolio.

Turning to Slide 14. Lucky Friday is our primary silver mine in Idaho, at the underground operation with a 15-year reserve plan, producing consistently high grade silver ore. I'm extremely excited about this mine, and I spend 10 years working in that place. In Q4, Lucky Friday produced 1.3 million ounces of silver with ASIC under $26 per ounce after byproduct credits, generating $57 million in operating cash flow and over $33 million in free cash flow.

For the full year 2025, the mine delivered record production of 5.3 million ounces of silver exceeding the top end of guidance with ASIC of under $22 per ounce after byproduct credits. For 2026, we are guiding to 4.7 million to 5.2 million ounces of silver production with ASIC of $23.50 to $26 per ounce after byproduct credits. The expected year-over-year increase in ASIC reflects higher profit sharing payments to our workforce.

This is a good thing. These payments are tied directly to profitability which we expect to remain strong given the current metal prices. A key near-term project at Lucky Friday is our surface cooling project, which is 79% complete and on track for completion by 2026 which will significantly improve underground health and safety.

Turning to Slide 15. Keno Hill is a transformation story. -- Hecla acquired Keno Hill in 2022 and last year, the mine achieved its first full year of profitability and positive free cash flow generation. This is a significant milestone.

In Q4, Keno Hill produced 597,000 ounces of silver, generating $33 million in operating cash flow and over $17 million in free cash flow. For the full year 2025, we exceeded 3 million ounces, a new production record and above the top end of guidance. For 2026, we are guiding to 2.9 million to 3.2 million ounces of silver production with capital investment of $61 million to $66 million as we continue to advance towards steady-state operations.

What's exceptional about Keno Hill, its current profitability while still on path to its nameplate capacity as we reached the planned throughput rate of 440 tons per day we are modeling robust positive free cash flow generation potential across a wide range of silver prices, as you can see in the bar chart on this slide. Keno Hill represents the optionality and upside within our portfolio. I will now hand it over to Kurt to discuss exploration.

Thanks, Carlos. Moving to Slide 17. Our exploration strategy is straightforward, discover and develop the next generation of production from within our existing portfolio of high-quality projects. Moving to Slide 18. .

Our primary growth engine is the Nevada platform. At Midas, recent drilling returned outstanding results, including 6.1 feet at 0.46 ounces per ton gold and 0.93 ounces per ton silver at center offset and 2.2 feet at 0.95 ounces per ton gold and 0.6 ounces per ton silver at Pogo. These confirm high-grade mineralization and support a potential near-term production restart with existing mill infrastructure on site.

Aurora achieved a major milestone, receiving our FONSI from the U.S. Forest Service, clearing a path for 2026 exploration at this historic high-grade gold silver producer. Regarding mine life extension, Greens Creek definition drilling delivered. We added 3.7 million silver ounces through model updates, replaced 9.5 million ounces depleted through mining and grew the reserves by 2.4 million ounces net.

With a 12-year reserve life and 88.7 million silver ounces in measured and indicated resources, Greens Creek continues to demonstrate longevity potential. Lucky Friday nearly replaced reserves, reducing only 200,000 silver ounces during a record 5.3 million silver ounce production year. And with 40.5 million ounces of measured and indicated resources beyond reserves, providing a clear runway for continued reserve replacement.

Now we're investing $45 million to $55 million in 2026 exploration, heavily weighted towards Nevada and near-mine opportunities. This directly supports achieving greater than 100% reserve replacement and building the pipeline to drive us toward 20 million ounces annually. We're discovering high-grade mineralization on lands we control in jurisdictions, we understand with infrastructure often already in place organic growth with superior economics. I'll now turn the call back to Rob.

Thank you, Kurt. Let me now address our medium-term outlook because it shows some of the depth of optionality that's within our portfolio. Our 2026 silver production outlook caused the 15.1 million to 16.5 million ounces. But as we've shown recently at our Investor Day, we've got a credible pathway to 20 million ounces over the medium term. .

We've got multiple projects that could drive us towards that 20 million-ounce target. So first, continued ramp-up of Keno Hill to the permanent capacity of 440 tons per day, that could drive meaningful production growth from current levels. Second, the potential Midas production restart that Kurt just spoke about. Midas is an exceptional gold and silver project in Nevada, the Hecla operated historically. As Kurt pointed out, we have the mill infrastructure in place, and we're currently advancing exploration at Midas with exceptional drill results that we just spoke about.

And that supports greater exploration investment in the project this year. Development decision on Midas could add meaningful gold and silver production over the medium to longer term at low capital intensity, representing a potential significant value surfacing opportunity. But the upside doesn't end there. Touching on just a couple of our other projects. We see potential to optimize Lucky Friday even further from the current record production levels it's been achieving.

At Greens Creek, we've identified the potential for reprocessing of historic dry stack tailings to extract value from the significant metals contained within. These are projects within our control, within our existing portfolio. Projects that offer the potential for significant value creation that we don't need to execute expensive M&A to own. That's why we believe 20 million ounces of silver production over the medium term is achievable with further upside potential over the long term. So what we've presented today is a company in transformation. A company that's moved from financially leveraged and free cash flow constrained into one with a robust balance sheet, strong cash generation and the financial visibility to invest in our project pipeline to surface value for shareholders over the long term.

We're executing operationally at the highest level across our entire portfolio. We're maintaining strict capital allocation discipline across all 6 pillars of our framework. We're strategically focused on becoming the premier North American silver producer and we have multiple near-term and medium-term growth projects within our existing asset base. 2025 was a year of multiple records. 2026 and beyond present exceptional opportunities. We're executing our strategy with precision and we're confident in delivering sustainable shareholder value.

Thank you. And with that, I'll turn it over to questions.

[Operator Instructions] Your first question comes from the line of Heiko Ihle of H.C. Wainwright.

Exploration at Keno Hill, anything you've seen there that was maybe a bit unexpected, better or worse than internal plans so far this year and building on all of that, the cost -- the ongoing cost of exploration per meter so far this year, how has pricing been? And what are you sort of modeling out for the remainder of the year, please?

Yes. Our -- I guess, things that we've seen that in the exploration from 2025, I mean, we've intercepted what we think is a new high-grade ore shoot off the deep Birmingham, and it's open for expansion, and that's going to be one of our focuses this year as well as drilling around the rest of the Birmingham and the Flame & Moth.

Now our budget for Keno Hill this year is $13 million. The direct drilling costs, I think, are on the order of USD 180 to USD 190. I'll have to check that number, though, Heiko, and get back to you. The exploration potential there is quite spectacular.

Fair. And then just 1 quick clarification before I go back in the queue. On [ Casa ], and I went through the press release that you guys issued earlier today, again, just to be clear, you're getting all cash flows from Casa through the closing date, correct? There won't be any backdating or anything. I mean with gold above 5,000 again as of today, that obviously, there's real money to be made every single hour.

That's right. We'll get cash through closing and then obviously, then the structure of the deal will bring further cash flows.

Your next question comes from the line of Cosmos Chiu of CIBC.

Rob. Maybe my first question is an accounting question. Again, on Casa Berardi. I'm just wondering about the accounting sort of treatment accounting impact that could come from Casa. I realized or I kind of looked at the cost for Q1, your guidance, gold cost guidance, and I saw that -- it's actually higher now. It's only one quarter's worth of Casa. So does that feed into your earnings? How does that impact earnings? And the second part is, will you be looking to book some time -- some type of gain on the transaction. I forget what the book value might be. And then overall, what's the timing of some of these accounting transactions.

Cosmos, a couple of things here. First, in terms of the guidance, we took an estimate through the first quarter. So we expect we'll close the deal sometime in the first quarter. So we took a full first quarter versus a production, estimated costs, that kind of thing.

I will say, in January, there was a significant weather in the Abitibi in Eastern Canada. I think you probably saw some of that in Toronto. And as a result, January's production was a bit lower than estimated. But since we only have a quarter of a year, essentially, we just didn't have the time to recoup that production.

So that's why you see the cost on a per ounce basis is higher. And then as we think about the recording of the transaction, so that will flow through our financials through closing. In Q1, we would anticipate Casa Berardi would be held for sale. So that essentially kind of comes out of the core part of our financial statements. But you will still see in the net income line, the impact of Casa's operations through closing. It just separated, right?

I'm trying to -- there's a few other things in there. As we think about the value of the transaction, we obviously -- there's a portion of that, which is deferred and contingent. So we have to go through a fair value process to book the kind of estimated fair value of that, and then we'll compare that to the carrying value.

I would actually expect we'll see some type of a loss on the transaction versus a gain just because the carrying value is likely going to be a bit higher than that. But we're working through that process now. So I won't speculate or try to tell you what that might be. And tell me if I have answered all your questions. I may have missed one.

Okay. Great. And so likely, it's going to be a Q1 sort of -- if it closes in Q1, it will be a sort of Q1 accounting transaction, and I'm sure you'll give us some kind of guidance ahead of it.

Yes, that's right. And obviously, we guided production and costs such that you all have the information needed to kind of see what the ongoing cash flows and that type of thing you'd expect to see from Casa.

Great. And then maybe my second question is on strategy. And Rob, good to hear that you're going to be silver focused, looking to be the premier silver company, and looking to redeploy some of those proceeds coming from Casa into growing your silver sort of portfolio. But again, I guess my question is, if I look at your exploration budget, a big chunk of it is heading to Nevada, which is more gold rich.

We do have some longer-term exploration assets, including in the Silver Valley also San Juan Silver. But that's, again, longer dated. So I guess my question is, if you can walk us through your thinking behind how you can continue to grow your silver production, your silver focus. And do you need to look externally, and I think you answered that question, but I'll ask it anyways, do you need to look externally to really unlock the full silver potential of Hecla.

Yes. Thanks for the question, Cosmos. It's very much on my mind that we need to continue to grow our silver portfolio. Now one of the things is while we've been focused on divesting a few assets and potentially farming out some more to come, we need to bring new projects in the pipeline. And so I've asked Kurt with establishing a project generation in a new business, let's call it, a new business group, which is what I had when I was at my previous company. .

And their task is to get us into some new silver districts early on, monitor competitor intelligence, particularly in the new -- in the junior space, where we can potentially spot some emerging new discoveries and try and partner up with those. On M&A, it's obviously something that we'll continue to consider going forward. But obviously, there's a scarcity of silver producing assets. And I've spoken about our criteria at our Investor Day, what's going to drive some of that. So yes, I'm very aware that we need to replenish the pipeline and Kurt is -- has recruited someone just recently, actually, with a lot of experience.

Yes. Yes. We've got to recruit in, he's quite experienced. So it will be good with the program going forward. Yes.

Great. Kurt, you got a task.

Your next question comes from the line of Alex Terentiew of National Bank. .

Just a couple of questions from me. First on Lucky Friday, your cooling -- surface cooling projects should be done as you're seeing here midyear. I'm just wondering kind of longer term, with this project being completed opportunities to reduce costs here. How does this kind of factor into the long-term plan? I mean, Rob, you made a comment about optimizing Lucky Friday as another avenue of potential upside longer term.

So just kind of wondering how this project factors into the longer-term potential of the mine.

Yes. Thanks for the question, Alex. So the surface cooling project should be done by about midyear. It's primarily driven for, I guess, health and safety reasons or the well-being of our workers. We're obviously deep at Lucky Friday, it's a hot mine. And so as we go into successively deeper [indiscernible], bearing in mind that we have a long, long mine life here, we still have many levels to develop ahead of us. So this is really setting the foundation for the future. But the other thing I'd ask you to consider is that obviously, when workers are comfortable, they're generally more productive. And so that could have an impact.

The other thing I spoke about on our Investor Day is that even though we broke successive records in throughput at Lucky Friday, our GM, Chris Neville, he still believes that he might be able to wring some more out of that. Anything you want to add, Carlos, on that?

And it's part of the optimization plan, right? We have different steps where we have continuous improvement and the hosting capacity and securing the areas, the deep underground. This is the cooling system. So it's -- we say in New York, right? The best decade of Lucky Friday is still ahead of us because we have plenty of opportunities going up an order proportion of production.

Yes. Makes sense. Okay. Another question just on Midas. Obviously, the stuff you guys have going on there in Nevada is pretty exciting. I mean you got the good infrastructure, some really high-grade intercepts. I know this is a -- i wouldn't call it long term, but a longer-term plan anyways. Can you just kind of remind me or refresh me, over the next 1 to 2 years, what can we expect to see there in terms of your guys' plans to move that forward?

So a lot of it hinges on building up a critical mass of high-grade resources to get it back in the construction. Again, just to recap, we've got the mill, we've got the tailings dam. We have some new discoveries out where. One of the new discoveries is there's a resource that was discovered roughly 4 years ago, I guess, it's somewhere around 180,000 to 200,000 ounces at well above the historic mines production grade.

So that's the head start that we have. Now 4 years ago, when that was discovered, the drilling came up against -- across the other side of the fault, there was no mineralization. And so the groundwork that was laid over the last couple of years has basically identified where the offset is gone. And now we've picked up the [ scent ] again and starting to drill mineralization. And I guess the starting resource we're not talking about 1 million ounces to get this thing going. We're talking about 300,000, 400,000 ounces. So we're already a significant portion of the way there. And really, the focus on this year is going to be on exploration. At the same time, we'll do some studies. Matt, maybe you can talk about that.

Yes. I mean, this is out -- the discoveries are out in an area that has no or very little historic mining. So we have -- we've got to collect data on the geotechnical side, the metallurgical performance and hydrogeologic everything in mining is about water ultimately. So we need to collect that information. So in order to fast track this, we're going to be collecting that data and doing studies in parallel with that exploration. So as soon as we have a resource model, we can start doing more technical feasibility work.

And at some point, we'll appoint a dedicated project manager to that. We're planning on success.

Your next question comes from the line of Jon tumazos of John Tumazos very Independent Research.

Could you refresh us on the capacity tons per day of the Midas mill. What you think the initial throughput would be whether you can fill it up and whether the grades would compare to back in the heyday, something like 10 grams gold, 10 ounces silver per ton.

It was -- I think it was 1,200 ton per day is the permitted capacity of the Midas mill.

That's great. The permit is 450,000 tons a year, which works to about 1,200 tons a day.

Yes. And sorry, what was the second part of your question, John.

How many tons per day do you think you're going to put through it? And what might the grades be, in the old days, it was something like 10 grams gold, 10 ounces of silver.

I think it's too early to say, John. I mean we're in the early discovery stages. We need to pin down a more robust resource. The historic rate, you're right, it was 0.4 ounces per ton. So roughly 12, 13 grams per ton and significant silver as well, actually.

There are no further questions at this time. And with that, I will now turn the call over to Rob Krcmarov, CEO, for closing remarks. Please go ahead. .

Well, thank you all for your thoughtful questions and your continued interest and support of Hecla. 2025 was a genuine year of transformation financially, operationally and strategically. And so we enter this year with a stronger balance sheet, a sharper focus and what we believe is the most compelling silver portfolio in North America. We've got a lot of work ahead of us. We know that, and we're looking forward to it, and we'll talk again at Q1. So thank you, everyone. Have a great day.

Ladies and gentlemen, this concludes today's call. We thank you for participating. You may now disconnect your lines.

Ladies and gentlemen, thank you for standing by. Hello, and welcome to Orezone acquisition of Hecla Quebec conference call. [Operator Instructions]

I would now like to turn the conference over to our President and CEO, Patrick Downey. Mr. Downey, please go ahead.

Thank you, and welcome to the Orezone Hecla-Quebec acquisition webinar. I am very pleased and excited to announce this transformational transaction as we witnessed record gold prices. This is a very strategic expansion into Canada for Orezone with the acquisition of Casa Berardi Mine and other exploration assets within the Hecla Quebec portfolio.

I'd like to draw your attention to the important notices and disclaimer and they're on the website, so please take time to read these at your leisure.

So, I'd like to walk through the acquisition highlights. This really positions Orezone as a diversified multi-asset producer. It's in a Tier 1 mining jurisdiction in Quebec, one of the best in the world. It establishes Orezone now as a diversified multi-asset gold producer, adding material scale, production and free cash flow. Casa Berardi has a long operating history, its well-established resource and reserve base and substantial exploration upside will provide a foundation for future asset growth for Orezone. And it's well aligned with our technical expertise with several of our team having spent many years of operational experience both in underground and open pits. The transaction is accretive on key operating and financial per share metrics, which I'll show you later on, and it benefits all existing shareholders. The transaction is funded by an attractive financing sponsorship from Franco-Nevada, whose team worked very closely with us throughout this process and has excellent value creation potential through multiple expansion and enhanced capital markets profile as evidenced by the recent market transaction involving noncore Canadian operations recently.

A brief overview of the transaction. We will require Hecla Quebec Inc. a wholly owned subsidiary of Hecla Mining. It includes 100% ownership of the operating Casa Berardi gold mine and a portfolio of exploration assets in Quebec, including the advanced stage, exploration stage Heva-Hosco project. It's got an upfront consideration of $272 million. Initial cash is $160 million, which is funded by $60 million of our treasury and $100 million from the Franco streaming financing, an equity issuance of 9.9% for a value of USD 112 million, and we really want to welcome Hecla as a cornerstone investor who will go along with us throughout this acquisition. There's a deferred consideration of $80 million, which is cash payments from closing of $30 million at 18 months and $50 million at 30 months post-closing. There's also contingent consideration of up to $240 million. There's a gold price contingent consideration of $10 million, a $5 million this year and $5 million next year, which at current gold prices will be paid. And there's also production payments of up to $231 million linked to permitting and future production from two open pits at the Casa Berardi project termed the WMCP pit and the Principal pit, which are currently undergoing permitting. The $100 million stream financing from Franco-Nevada is based on a five-year fixed delivery of 1,625 ounces of gold per quarter, thereafter a 5% of gold production. And Franco-Nevada production payments also get 20% of spot per ounce delivered, and the other $60 million is cash on hand from Orezone. It's subject to standard regulatory approvals, and we expect to close in Q1 of 2026.

So, a snapshot. What do we become? Well, immediately, we've become an emerging diversified mid-tier producer. We've got our operating mine in Bomboré mine in Burkina Faso. 2026 production will be between 170,000 and 185,000 ounces for that year, reserves there of 2.4 million ounces, additional resources of 2.1 million ounces and a land package of 13,000 hectares. With the acquisition of Hecla Quebec, production guidance for 2026 is 83,000 to 91,000 ounces of gold, reserves of 1.3 million ounces. The package includes a further 2.1 million ounces of M&I resources and a large land package of 56,000 hectares. So it's a clear entrance into a Tier 1 mining jurisdiction in Quebec, significant increase in our production and cash flow. We'll now be established as a multi-asset producer. We will retain a strong balance sheet going forward and the financial sponsorship of the preeminent streamer in the business, Franco-Nevada and a clear path to unlock future value where our P/NAV was currently 0.47x, EV/EBITDA 1.55x, and we'll walk through that later in the presentation. And obviously, significant exploration potential, which we're very excited about.

So those of you who don't know where is Casa Berardi. It's in Quebec, just north of Val-d'Or. It's a Tier 1 jurisdiction where you've got Agnico, IAMGOLD, Gold Fields, Alamos, Eldorado, a very, very large land package of 19,500 hectares, covers a 37 kilometers of strike along the Casa Berardi fault, which is underpinned by the Casa Berardi operation. 19,150 hectares of exploration claims, as I said, and 570 hectares of mining leases. Easily accessible. It's 95 kilometers north of the town of La Sarre where most of the staff live and the workforce live. Accessible by paved highway. It's essentially the same travel time if you're leaving Val-d'Or and going to LaRonde, La Sarre to Casa Berardi would be the same travel time. Paved highway and 38 kilometers of mine access road. The employees commute daily to site, established skilled local workforce. We were very impressed with the local workforce when we did our due diligence, a very, very knowledgeable project, very well-run operation, well maintained, very safe operation. Paved airstrip, 70 kilometers from site at La Sarre, if need be, and grid power on the Hydro-Quebec system, which is obviously a very, very low cost of power.

Quick operations overview on Casa Berardi. It has produced 3.2 million ounces of gold over 30 years of operations, still relatively underexplored. Production over the last five years has averaged just over 106,000 ounces per year, proven and probable reserves of 1.3 million ounces, a further 900,000 ounces of measured and indicated and 0.5 million ounces of inferred, and we'll show you those later on in the presentation. Mining is currently via underground and open pit, and that will continue as such. Current mill feed is from the West Mine underground and from the F160 open pit. Standard processing facility, jaw crusher, SAG and ball, gravity, CIL, large capacity of almost 400,000 tonnes per day. So lots of room to expand should we have exploration success, which we very much hope we will. Average recovery of 88%, which will also be a focus of our operations going forward.

So, operating history. 30 years of production at Casa Berardi, mainly underground. It was originally run by Inco and TVX, shutdown in the $250 gold price era, which maybe some of you remember, I certainly do. 2006 to 2016, sustained production of approximately 141,000 ounces a year with an average head grade of over 7 grams per tonne of gold, and that was from one underground zone in the mine. Since 2017, the operations have shifted to open pit, which in recent years has really resulted in reduced focus in underground exploration and development. And we plan to actively renew this focus. And we've seen that upside at the operation.

So, where is our path forward? The recent disclosures at 2024 was done at $1,900 an ounce gold. Open pit mining was to end in 2026 with operations -- underground operations and stockpile continuing to 2027 and then permitting of the Principal and WMCP pits, which have over 1 million ounces of contained reserves commencing in 2033. Obviously, a greater than $2,500 gold price. The stated underground M&I is almost 900,000 ounces, grading 6.13 grams per tonne, which provides us with significant scope to maintain and extend ongoing underground operations. We will continue to operate the F160 pit, and we will look to expand that at current gold prices and obviously, at $2,500. I think at $2,100, it had three more years of operation at that pit. So lots of runway to continue to produce and expand and explore.

So, an overview of the mine and the exploration upside, which obviously we're very excited about. The near-term underground mine plan is underpinned by a substantial resource base and established infrastructure. There's a shaft and a ramp at the WMCP, the Western area. which accesses the Principal area. There's an underground ramp at the East Mine area as well and the mill itself is over by the F160 pit. Current underground operations are really focused at the Western area and the Principal area and the mining -- open pit mining at the F160 pit. As you can see, the measured and indicated where it's located and the inferred. So we've got excellent access to develop and mine those zones. There's multiple well-defined ore shoots at this operation. They're wide open on several fronts, as you can see, and some of them relatively shallow, particularly under the F160 underground, underneath a small pit called the F134 just to the east of the Principal pit, just under the West Mine Crown Pillar pit and this conversion zone and significant exploration in the gap zone between the East and the West, which remains very, very much relatively underexplored. So lots of exploration to do. We will plan to ramp up exploration over the next six months to a rate of around 80,000 to 100,000 meters a year.

And we will be targeting the higher grades. As you can see, the Casa Berardi deposits host multiple plunging zones at significantly higher grade. And I want you to focus on those greater than 15 gram per tonne shoots. As you can see, they're not spotty. They're very continuous. This is something that we will focus on in our exploration going forward. You can see some of them are still relatively shallow here. So this will become a big exploration focus for us as we move forward in the coming years.

And if you look at Casa Berardi compared to other deposits in the Canadian shield, several of those underground mines and some of them in the vicinity of this operation extend to depths of over 3 kilometers. We're really down around 1 kilometer. Red Lake at 3.5 kilometers, La Ronde, Agnico at 3.75 kilometers, Westwood, IAMGOLD just down the road at 2 kilometers. Macassa. Agnico 2.25 kilometers and Casa Berardi, the greatest depth is 1.5 kilometers. But on average, we would be below 1 kilometer. So, again, significant exploration for us, and it will be a key focus of us expanding and delivering better grade to the mill.

A big land package. We cover 37 kilometers of the Casa Berardi fault. There's been limited regional drilling. It has identified multiple mineralized zones. I would like to point out that in a lot of the Abitibi fault, you do not have a lot of cover. You can see the rocks right on the ground. It's not the case here. You have between 30 to 40 meters of till cover. So you have to look for these things. So it's something that we will focus on. So regional exploration will become a big part of our program, but you can see that there has been discoveries. And in particular, I'd like to point out the Lac Germain one, again, relatively shallow drilled, but we will look to identify these within trucking distance to this mill, which has approximately 4,000 tonne a day capacity under current configuration. So lots of exploration upside in that regard.

How do we create further value here? We're obviously going to focus on near-term mine planning, as I've talked about, to improve the grades from underground to the mill and increase the tonnage. We will be targeting a multiyear underground life of mines and the F160 pit extensions. Again, as I said, currently, it's at $1,900 reserve, so we will relook at that. We will focus on open pit grade control and blast monitoring, immediate underground investments. I can say, though, this is a very, very well-maintained mine. It's a dry mine. The equipment is in excellent condition. Hecla have done a fantastic job in regards to safety, housekeeping, maintenance. We were very, very impressed by that. So -- but we will add more equipment to allow us to get access to drill cubbies and get the drill program going fast. We look to restart the East Mine underground and access that area, very high grades down there. So it's one of the key focuses. On the mill, very well-maintained mill, but we will look at some process automation upgrades, look at potentially the addition of a flash flotation. There is some preg-robbing graphite near the main Casa Berardi fault. We look at potentially flash floating that off to improve recoveries, and that will be test work that we will continue to focus on over the coming months. And obviously, the key focus will be to recommence exploration drilling. We want to rapidly ramp up to 80,000 to 100,000 meters a year, both surface and underground, establish a high-grade stope inventory. Historically, this was a plus 7 gram -- in recent times, a plus 7-gram mill feed. And that would really, really rapidly improve the production and the economics. So reestablish that high-grade stope inventory and increase the head grade. Lots of targets to go after and lots of regional targets to go after.

So also included in our acquisition of Hecla Quebec is a number of exploration properties. Heva-Hosco is the main one. It's located 20 kilometers east of Rouyn-Noranda, 3,850 hectare property, 8-kilometers strike along the prolific Cadillac-Larder lake break, established about 1.2 million ounces of M&I and 0.6 million ounces of inferred and 400,000 meters of drilling. We will start relooking at that, obviously reinvigorating the exploration over the coming years and see if we can develop that as our next pipeline of operations in the region. Two other explorations. One is Wildcat/Opinaca in the James Bay Area, 24 kilometers southeast of the Eléonore mine. combined property package of almost 30,000 hectares and Duverny in near -- just north of Val-d'Or, and again, another early-stage exploration project that becomes part of the package.

So, what does this do for us again? We are now a new emerging mid-tier producer. 2026 consolidated gold production between 230,000 to 250,000 ounces. Our medium-term target is 350,000 ounces a year. We expect to do that very quickly. We obviously got our Stage 2 expansion at Bomboré, which will put Bomboré in the 230,000 to 250,000 ounces a year. We will look at upgrading Casa and getting the higher grades to the mill. And our target in the coming years and the next two to three years is to be a 350,000 ounce a year producer with two very, very well-established operations in the Casa Berardi mine and the Bomboré mine and look to grow from there.

Excellent re-rate potential in our global peer comparisons. 2026 production, as I said, around 240,000 ounces in the mid of guidance there. That would put us in the upper end of our peers. We're at the lower end pro forma in terms of market cap. Obviously, we expect to re-rate in terms of EV/EBITDA and P/NAV multiple. So lots of opportunity for a re-rate here in the very near term.

One quick thing that I'd like investors to pay attention to here is the re-rate of acquisition of noncore Canadian mines. You can see what happened to Discovery when they acquired the Porcupine complex. It's been a great success for them. Again, they were backed by Franco, Orla when they acquired the Musselwhite mine, and they were, I would say, fairly well valued at the time and look where they've gone to since 352% return. The Coffee development asset up in the Yukon, which was divested by Newmont, so the recent Canadian noncore acquisitions have generated significant returns outperforming gold and the GDXJ, and we expect and hope the same with this acquisition of the Casa Berardi and Hecla Quebec assets.

That's the end of the presentation. I'll now hand back to the operator for questions.

[Operator Instructions] And we will take our first question from Jeremy Hoy from Canaccord Genuity.

Thanks a lot for the detailed run through there. You actually answered a lot of my questions. With Casa Berardi, Hecla's plan had been to pause processing after 2027 for five years, while the pits were permitted. Am I right in -- it sounds as though you guys don't think that you need to pause processing that you can extend the underground mine life and really sustain existing production levels throughout that period. Is that the case?

Yes, that is the case. Obviously, we've got an M&I inventory, a big, large inventory there that's near existing infrastructure. We will also have the open pit extending -- we plan to extend the F160. The reserves were done at $1,900. And we're in the process of -- with Hecla, actually, they started looking at expanding the F160. So we will look to do that. That would add at $2,100, I think it adds another two to three years of production there as well. So that's the other part of it. And obviously, we're going to really start our exploration program concurrently with that.

We've gone through all of this with the Franco technical team. That was a big part of our due diligence, how we would do this so that we could have that 6-, 7-year runway from today to continue to explore, develop and produce. So we've rebuilt most of that underground mine inventory within our system.

Okay. Great. You mentioned that you would be putting out a new mine plan. Are we going to see an official FS or something along those lines? And when might we see that? And can you give us an idea of the CapEx that would be involved? You had mentioned some new equipment, some plant upgrades, Presumably, there'll be some more development as well.

Yes. We're working on that right now. We'll probably advise the market in the near future in that regard. So it's something that we will be actively -- we also want to put our arms around the team on site. I mean we've done our due diligence. We really like this team. They're very enthusiastic. And again, as I said, Hecla has done a great job on safety, housekeeping, maintenance. But we want to put our arms around them and get them to buy in what we're doing and make sure that we hear back from them. What are their thoughts on this to make sure that we've got a complete buy-in before we start telling them what we're doing with the mine that they have been running.

Yes, that's great to hear, Paddy. There's a lot of exploration potential at Bomboré as well as we saw when we went there last summer. How will the exploration spend be distributed between the two operations?

Well, with the current gold price, Casa will be self-funding. So we -- one of the key things we wanted to do is really ensure that we had that sort of runway and leeway to do that. So the cash flow that Casa will generate will self-fund that exploration. So if you look at it in rough terms, it's about $125 a meter there for drilling, diamond drilling. Obviously, we've got to set up some infrastructure and stuff like that in terms of a core Shack and a few other things to get that independently set up. But if you're doing, say, 100,000 meters a year, you're sort of looking at, at the outside, $15 million, and that's easily funded out of the operations cash flow.

This doesn't impact the pace of drilling at Bomboré at all.

No, not at all. Bomboré was always self-funding next year anyway. Lots of -- if you're looking at current spot prices, Bomboré after taxes, after royalties after the government takes a dividend and whatever will be well north of $200 million free cash flow in Bomboré alone.

Yes. Understood. Okay. Great. I guess last one for me. You talked about the opportunity you see with the rest of the portfolio that you got in this transaction. I'm just thinking about a couple of years out. I mean, it's -- the Bomboré build is very manageable. You're going to be through to some pretty impressive cash flow there. This is immediately cash flowing. I mean, presumably, you're going to have -- be able to look at other opportunities, external opportunities in the not-too-distant future. Does this mark a shift in the overall strategy in terms of jurisdiction? Or is this a one-off opportunity?

No, no. So we still -- our strength, particularly in West Africa, is obviously building and operating mines. We're still very good at that. We know how to do it. We've got a proven track record in that regard. And that will still remain one of our hunting grounds in terms of looking for acquisitions in that area. This one is really a strength that we bring in terms of operations, again, exploration. It's where we can feel that we can bring value to the table here without overstretching our resources and ensuring that we can add value for all shareholders and stakeholders.

So we're not overstretching ourselves here. It gives us a base in Quebec to look for other operations, but we will continue to look. I mean, mining is a worldwide operation. We don't want to start going all over the world, but we certainly still are very comfortable in Canada. We're very comfortable in West Africa. Lots of opportunities in both areas. So, we will continue to focus there.

[Operator Instructions] And Mr. Downey, seeing as there are no more questions in the queue, I'll hand it over to our President and CEO, Patrick Downey, for closing remarks.

Thank you. Well, we're very excited to announce this transaction. I want to thank everybody who's helped us along the way to get here. We look forward to closing it. We look forward to welcoming Hecla as a significant cornerstone shareholder in our company, and we will ensure that we will do them pride going forward. We also want to welcome the Casa team. I'm looking forward to getting up there this week and really making sure that everybody is on board for a successful 2026 and beyond. Thank you.

The meeting has now concluded. Thank you all for joining. You may now disconnect.

Good afternoon. I'm Mike Parkin, Vice President of Strategy and Investor Relations. Today, we're here to provide an in-depth view on what differentiates Hecla on our -- from our silver peers and the opportunities we have to create value for shareholders. Today's event is hybrid. So we'll be taking questions from both people in the room as well as online. For those on the webcast, there's a button that you can enter a question and then we'll read those out in person and answer your question at the end of the event.

[Operator Instructions]

Before we get started, a representative is here from the New York Stock Exchange to provide an overview on safety procedures.

Good afternoon. My name is Joe Carey. I'm the Fire and Life Safety Director here. Welcome to the exchange. [Operator Instructions]

Thank you, Joe. Turning to Slide 2. Any forward-looking statements made today by the management team come under the Private Securities Litigation Reform Act and involve risks as shown on Slide 2 in our earnings releases and in our 10-Q filings with the SEC. These and other risks could cause results to differ from those projected in the forward-looking statements. Non-GAAP measures cited in this presentation and related slides are reconciled in the slides or the news release. Turning to Slide 3. Hecla at a glance. Hecla Mining Company is headquartered in [indiscernible], Idaho, and our common stock trades on the New York Stock Exchange where we are today under the ticker HL.

We are covered by 10 brokers and our share ownership is split roughly 22% retail, 78% institutional, and our market capitalization as of mid-January was just over $17 billion. Next slide. Hecla operates 4 precious metals mines, all of which are located in either the United States or Canada, making Hecla the lowest geopolitical risk silver miner in the sector. We have a number of precious metals projects scattered across Canada, as you can see, and they're scattered across Canada and the United States, some of which we will be talking about with you today.

Next slide. Our Board of Directors and executives and management team are shown on this slide, many of whom are with us today in the room to help support us in our presentation as well as during the Q&A period. Our news release detailing 2025 production results and 2026 guidance was issued this morning, along with today's presentation, they are both available on our website. Turning to Slide 6. I will now pass it over to Cassie Bogs, Independent Chair of Hecla's Board of Directors.

Thank you, Mike. Good afternoon, everyone. I'm Cassie Boggs, the Independent Chair of Hecla's Board of Directors. And on behalf of the Board, I want to welcome all of you here today, and thank you for your investment in Hecla and your interest in understanding where we're going. But I'm going to be brief because I know what you want to do is hear from Rob and his team. But I wanted to give you a Board level context about what you're going to see. When we appointed Rob [indiscernible] as CEO in November of 2024, the Board was very clear. We needed a fundamental transformation, disciplined capital allocation, operational excellence, a platform to build for sustainable growth, not quick fixes. And 14 months later, we are seeing it.

Our Board meets quarterly to review performance against Rob's strategic plan. We track return on invested capital monthly. We stress test capital allocation decisions across multiple price scenarios. And what we're seeing is an inspired management team that is executing with precision. But what gives us confidence isn't just past performance. It's what this team has built to sustain that performance through commodity cycles. Capital allocation frameworks with clear hurdles, business improvement programs that engage our workforce and exploration investment at peer levels. The Board approved a $55 million exploration budget for 2026.

That's nearly double what we did last year because we believe in the discovery potential across our portfolio. That's a strategic choice we've made to invest in our future. Today, you're going to hear the specifics, operational performance, financial framework, exploration strategy and our medium-term production outlook. The Board has reviewed this plan. We've challenged the assumptions. We've tested the capital requirements, and we are confident this team will deliver. As Chair, my role is oversight and governance. But I want you to know our Board is very engaged. We visit the operations. We meet with the workforce. We understand our assets, and we hold management accountable to the commitments they're making to you today.

So now let me turn it over to Rob Kritchmarof, our President and CEO, to show you how we are executing on this very exciting vision. Thank you.

Thank you, Cassie, and good afternoon, everyone. Thanks for being here, and welcome to our Investor Day. Before we walk through our prepared materials, I want to make sure that you're all aware of news out of Hecla that just hit the wire. Today, we announced entry into an agreement to sell Hecla Quebec, our subsidiary that owns Casa. I'll refer you to the press release for whatever details we can give. But just to summarize, the purchase price is almost $600 million with $160 million in cash, 9.9% of Arezone shares paid at closing, and the rest is in the form of deferred and contingent payments. The deal is subject to customary closing conditions, and we estimate closing could be in roughly 30 days. Casa Berardi has been and remains a key asset for Hecla, but closing the sale would allow us to redirect our capital and our attention towards what we do best and what we believe generates the most value for our shareholders, Silver. Timing on this deal moved quickly, and we thought it made the most sense to proceed with this Investor Day despite the timing of this announcement. So as we go through this presentation today, please keep this development in mind. With that, let's get started, and thanks again for being here. So let me start by what drew me to Hecla. Around about 4 years ago, I left my previous place of employment as an executive at Barrick.

And I'd set up myself to have a career as a Board member to contribute my experience that I've gained over many decades. I have to say I was enjoying it. I joined 4 companies, all in the mining industry, 2 producing companies, the world's largest drilling company and also a major streaming and royalty company, and I was enjoying it. So one day out of the blue, I get a call from a recruiter, and he says, "Hey, I've got a CEO job for you. Are you interested? And without even pausing, I said, absolutely not. And he said, "Well, I kind of see that you're fully engaged, but can you help me find someone? And so I said, sure, but you need to give me a bit of information. I want to find a good match for you. And so he sent through the details, and I looked at the profile, and I thought that kind of describes me. And then when I found out that the company was Hecla, I thought this is interesting. I knew a little bit about Hecla. I spent most of my time in the gold industry. But what I did know is that the company had been around a long time. And I thought, well, that says something. That means that there's a really good DNA. They've been able to pivot and adapt to survive over a century.

There's something there. I also came to understand that -- I mean -- and I was aware of Greens Creek. Pretty much everyone in the mining industry is aware of what a fabulous asset that is. I didn't really know much about the rest of it. So as I did my research, I saw a Lucky Friday that's been around for more or less 80 years, and I thought well, that's nice. I saw some growth at Keno Hill. I've never heard of Keno Hill, but I thought at least there's some growth there. I saw a huge portfolio of projects and properties, mostly exploration and predevelopment stage. And I thought, wow, I looked into those and none of them had materially advanced. And I thought there's some value here. We just got to unlock it. And I happen to know a thing or 2 about exploration, obviously. I engaged with all the Board members individually before I joined. I got very comfortable.

I could see that it was a talented, complementary Board, diverse skill sets, most important, independent. And that's important to me. And obviously, to investors, it's important that there's good governance at the corporate level. And so I saw that there was an opportunity to transform the company, bring some fresh new perspectives and help bring a new culture as well. And with the profile being sought, that seemed to be a good match for me. A key question for me is how can I add value? What would be my purpose here? And I thought about it, and I thought I've been very fortunate in my career in that I've had over 3 decades of experience in what was at one time, the largest precious metal company, complicated at one time operating 25 mines all around the world.

So I've had that diversity of experience. I've also -- my experience has ranged everything from technical and operational all the way through to strategic and commercial. And I thought I could bring something here. But one of the things that I really enjoyed throughout most of my career is really developing and nurturing and building world-class teams, teams that, and watching them grow, watching them become empowered, watching them thriving and delivering value. And I saw an opportunity to do that at Hecla and reshape the culture that hopefully will help it last for at least another 135 years. I'll get to the specifics in a moment. Now I didn't know the management team at the time, obviously, at the time that I started, but I quickly came to realize that this was a really, really talented team for a reasonably modest-sized company, we had some really good firepower throughout the organization. I saw that they were receptive to change.

They were wanting to be empowered. They're wanting to thrive and to make a difference. And then as we sat down and started to talk about how we're going to position the company, what's our strategy going to be, I could see them becoming really excited to play a role, not just be told what to do. And I have to say like it's been phenomenal working with this team. They're very energized and excited. It's true that, obviously, we've all been beneficiaries of increased metal prices. But more importantly, what really excites me is that we actually have started to transform. And you'll see the transformation in our systems, what we value and where we're heading. And in fact, that's the key theme that should really emerge over the next couple of hours, surfacing value through transformation. Now you all have choices.

So why is Hecla the most compelling investment in the silver space, and that's what we're going to talk about today. But I do -- before we get to the first slide, I do want to give you some key takeaways upfront. The first is, no matter what your historic perception is of Hecla, we are a company that's already undergoing a transformation. And if you're not already invested in us, we should absolutely be on your radar. We obviously have a silver focus. I believe that silver still has a long way to go despite these record prices.

The fundamentals are excellent. We have great operating assets, high grades, lowest cost quartile, long mine lives. We're in premier jurisdictions, and that really matters. I think that's a real point of distinction for Hecla. All of our operations are in Canada and the U.S., predictability, rule of law. As investors, you don't want to wake up and read in the newspapers that your -- one of your revenue-producing assets has been nationalized or that there's been some new surprise tax or perhaps even a surprise royalty, which is what happened in Ghana a couple of weeks ago to affect your cash cows. So safety is one of the things that Hecla offers that no one else can. We have a large portfolio of projects. We'll go through some of those, some of them with really compelling value propositions. You'll see growth, you'll see financial discipline, operating excellence, and we are a company that is value and per share metrics driven. So let's start at the beginning.

When I joined Hecla as President and CEO in November 2024, I inherited a company that was at a crossroads. On the one hand, we had exceptional silver assets. And on the other hand, we weren't capturing the value that those assets should deliver. Capital allocation lack rigor, 3 acquisitions had underperformed. Investment decisions really reflected competing voices rather than rigor and analysis and disciplined criteria. Quite simply, we weren't earning the returns that our asset base should generate. Our organizational systems were in their infancy. They weren't really built for excellence, HR, planning, decision-making. They've grown organically without the rigor required to sustain performance in the long run. We had good people working hard, but within systems that didn't really enable their full potential. And for a very long time, debt constrained our flexibility.

So these were opportunities to transform Hecla, and that's exactly what we've done. We set out to build a systematically excellent growth-oriented North American silver company, earning returns, matching the quality of our assets. So on planning, we moved from single scenario planning to 5 scenario optimization. Basically, a fundamental shift from production-driven to value-driven planning. We reinforced capital discipline, rigorous analytical frameworks replace gut feel. multi-scenario stress testing, 12% minimum return on invested capital threshold. And that's a Board expectation. That's not just guidance, monthly tracking quarterly oversight. The framework is pretty straightforward, basically sustain what we have, invest in high-return growth projects, invest in exploration, strengthen the balance sheet and then return capital to shareholders. And Russell is going to walk through the details here. It's not complicated. It's about maximizing value. Our 2025 performance shows this transformation is real. We hit every guidance metric while executing some really remarkable changes. Russell, Carlos, Kurt, Brian and others are going to add some detail here, but let me highlight just a couple of key points. So the gross leverage dropped to a mere 0.4x, and we're positioned for complete deleveraging this year. We generated $310 million in free cash flow in 2025, all 4 operations free cash flow positive and notably, Keno Hill as well, even though that's still in ramp-up. We're generating 12% returns consolidated, 38% on a go-forward basis from silver operations, and that's at $50 silver.

That's industry-leading performance. On operational excellence, safety improved significantly. Being concerned about the safety of family, friends, coworkers, neighbors, people that we know, that's an innate human quality. But it's what we do about that, that concern that we have that really matters. But there's also a business reason why investors who obviously don't have the same connection with our employees should also care. Safe mines are efficient mines. Safe mines are profitable mines. Safety really speaks to a culture of planning, of duty of care to people, to equipment, to operational execution and intention speaks to intention and planning and housekeeping, and that creates the foundation for operational excellence. And we've also demonstrated operational excellence through our record operational achievements across the portfolio, and we've talked about some of the record-breaking records that we've broken in the last few quarters. the market saw what we were doing. We delivered the best performance among silver stocks, nearly double the silver miners ETF. But we didn't just deleverage to sit on cash. We deleveraged to create a platform for growth, growth in value. Regarding exploration investments, for many years, we were spending like we had no opportunities. Now we're investing like the company that we need to be, $55 million in 2026, double what we invested last year, including $16 million in Nevada, for example, at Midas and Aurora, and they are 2 tremendous district scale opportunities and more on that in a moment. With almost 0.25 billion ounces of proven and probable silver reserves and targets and targets for 100% reserve replacement, we're building the foundation for sustained production growth. Now before we talk about our outlook, let me explain why our silver focus matters. Primary silver companies obviously trade at a significant premium to gold producers. Hecla generates today around about 50% of revenues from silver.

Almost all of our peers are in the 20% to 30% range and have drifted towards gold. We're going in the opposite direction. And here's what drives that premium. It's scarcity. Why? Because high-grade primary silver deposits are geologically rare. Lucky Friday sits in only 1 of 3 districts that has produced over 1 billion ounces of silver alongside Pozi and Bolivia and Pachuca in Mexico. And that scarcity creates pricing power in the commodity market and the equity market. But really, production growth means nothing without value creation. I mean we could acquire 10 million ounces tomorrow, but those ounces -- if those ounces come at marginal returns or in challenging jurisdictions, we could be destroying value. So it really is about value creation, not just pure production growth. Now let me show you where this is heading. Our transformation strategy rests on 3 connected pillars. First and foundational is investment discipline. Every capital investment should meet 12% ROIC, and we track monthly. Our balance sheet is targeting sub-1x leverage and plus $200 million in cash. That's not about being conservative. That's really about building the flexibility to fund our vision. Second is operational excellence. We have some great assets and some great people. But what's different now is really the rigor and the analysis. near real-time production tracking at Greens Creek. And fairly soon, we have plans on rolling that out at Lucky Friday and eventually Keno Hill as well, predictive maintenance, integrated ROIC dashboards and so on. On portfolio quality, I'm aware that the market sees Greens Creek as Tier 1 and the rest as a collection of legacy assets.

Our strategy creates another premier asset though, through Nevada exploration. That's our primary path, organic value creation where we control the timing, we capture the full upside and we leverage our existing infrastructure. And that's fundamentally different from acquisition-dependent growth, which is based on limited knowledge and insights and comes with many potential risks. And we're all aware that there's a graveyard full of mining companies that have done poor acquisitions. We certainly won't be one of them. Obviously, if a compelling opportunity emerges that meets our financial and strategic criteria and creates per share value, we have the capacity. But Nevada is where the portfolio transformation happens.

So we'll talk about Keno growth more in more detail soon, but Nevada isn't speculation. High-grade silver and gold deposits, they're geologically scarce. They concentrate in premier jurisdictions and our Nevada district offers just that. If we execute over the next 18 to 24 months, we could have material production within 5 years. That transforms Hecla from a Greens Creek anchored into a true multi-district platform, all in premier safe North American jurisdictions. By 2028, if we execute and we continue to have some of the fabulous exploration success that Kurt and his team has been having, you'll have a company that's trading on production growth and exploration success, not just a single asset. So we are a fundamentally different company. Record operations, disciplined planning, strong balance sheet, strategic growth investments. It's not the same company that I inherited 14 months ago. We built a company designed to compound value through cycles. So the road ahead is clear: continue operational excellence, continue to build our analytical capabilities, deploy capital with discipline, high-return growth projects, value creation opportunities and eventually, when the time is right, value-accretive acquisitions.

So let me show you where this is heading. This chart shows how we go from 17 million ounces in 2025 to a potential 20 million ounces producer over the medium term. In 2026, we're guiding 15.1 million to 16.5 million ounces. Now look at that medium-term bar on the right. There's a potential pathway there to about 20 million ounces, and that's driven by 2 catalysts. First is Kingo Hill ramp-up, which grows from 3 million ounces today to 4.5 million ounces. So that's 1.5 million ounces. But from an asset that we already know and we know well, and we already own it. Second is the Midas restart. You'll see that dash portion that represents Nevada production with high-grade discoveries that Kurt is going to talk about in detail, existing permitted infrastructure and capital-efficient development that Matt will outline. So Midas can contribute meaningful ounces potentially beginning around 2030 to 2031. So those 2 drivers alone get us to potentially up to 20 million ounces.

I think a key point to stress here is that this chart shows our pipeline, not our ceiling because there's more beyond the medium-term 20 million ounce profile, there's also potential for further expansion at Keno Hill. Aurora and Hollister in Nevada, they provide additional district scale opportunities. We're obviously not including these right now because they need development decisions. They need permitting milestones, more CapEx invested. They've got a ways to go, but they are real options that our strengthened balance sheet positions us to pursue and they point to our long-term sustainability well beyond our already peer-leading long reserve mine lives. Of course, there are risks to achieving that increase in production as we detail in our SEC filings. So just reiterating, 17 million ounces today, about 20 million ounces in the medium term and a clear pipeline beyond that. And this isn't an aspiration because Lucky Friday and Keno Hill, they're producing today. Keno Hill is ramping up now. and Nevada has the infrastructure and permits -- key permits already in hand. So we have the assets, we have the balance sheet, we have the discipline, and we have the plan. So summing up, Hecla's future is silver, long mine lives, low-cost quartile, premier and safe jurisdictions, Alaska, Idaho, Yukon, that's our fundamental advantage. Gold funds the vision, but silver is our competitive focus and our growth engine. And again, here's what makes us difference. Greens Creek, 26% ROIC at conservative prices.

That is an absolute unicorn. And while that's generating returns, we're investing for value, $55 million in exploration. And I think we're already starting to see some measurable unlocking of value there. I'm quite excited about that. The pipeline is deep in Nevada, 313 million ounces of silver equivalent resources with existing infrastructure. And we know how to find deposits. I spent decades building exploration teams that discovered Goldrush, which is a Tier 1 that's currently in production today. That team -- my team also discovered [indiscernible], which has been recently described by Barrick as the discovery of the century. And we're applying that same discipline and methodology here at Hecla. On our operations, significant improvement in safety. We're targeting best-in-class on every metric. We operate exclusively where risk is manageable and capital is rewarded. On finance, our balance sheet isn't a constraint anymore. It's an enabler. Debt capitalization under 5%, every decision governed by strict ROIC hurdles. We pursue M&A only when it meets our discipline test.

So we're building a silver company that generates sustainable returns through operational excellence, funds growth through exploration and uses a strong balance sheet to create options. That's Hecla's future. And now our leadership team will take you deeper into how we're executing that vision. So I talked about moving from gut feel to analytical rigor. That means understanding our costs and returns with precision, making consistent value-based decisions and tracking performance with discipline. Russell Lawler will now walk you through our capital allocation framework and the financial targets that drive our decision-making. And you'll see how we're deploying the balance sheet that we've rebuilt, how we're thinking about reinvestment returns and the financial metrics that we've committed to. Over to you, Russell.

Thanks, Rob. In November of last year, I celebrated 15 years here at Hecla. During that time, I've had the good fortune of working with many incredible people, many of which are in the audience today. So I'll just mention Brian Erickson. He was the Surface ops manager when I started at Greens Creek years ago. Chris Neville sitting next to him was the mine manager. Mike Setri is out here somewhere. You'll hear from him later on today as well. He was the Tech Services Manager and then Justin Wick. Justin actually handles our logistics and our concentrate sales. These guys were guys that I worked with up there. We were able to work creatively to solve problems, add value to Greens Creek and value to Hecla as a whole. I was able to do many things that not a lot of people in the finance industry would have the opportunity to do because of that time. And the other thing, too, that we'll see later on in this presentation is a video of Juno of our Greens Creek mine, and it's really a spectacular place. And those years that I spent at Greens Creek will always be special to me. But as we get back to the slides and we think about the transformation that we've gone through, I'm going to talk about a few things, including our balance sheet 2026 expectations.

But before I do that, I want to talk about 3 key themes that I expect to really take away from this presentation. First, our financial position has substantially improved from this time last year. We have $242 million in our treasury with a total liquidity position of more than $500 million. We paid down our debt by approximately 50% from a year ago, both by adding to our future cash flows and reducing the risk to the company. Second, although metals prices are currently very healthy, and we expect this to continue, we manage the company with a long-term disciplined view, one in which we can thrive and provide returns in any price environment. Third, we strive to be disciplined in capital allocation with our return on capital targets and clearly defined framework. We expect to be an industry leader in providing real returns to our shareholders. As you can see, we've achieved remarkable results, a dramatic improvement in our debt position, a 75% improvement in gross leverage ratio and an 82x increase in free cash flow, all driven by operational success on opportunistic deleveraging. Specifically, our gross leverage improved from 1.6x at the beginning of the year to 0.4x, and our net cash balance increased by more than $200 million. This is all made possible by the strength of our assets and success in our operations as well as strong metal price environment, where we saw silver margin per ounce at 75% compared to a very strong margin a year ago of 54% and free cash flow increasing from essentially breakeven to $310 million, all leading to a tripling of our return on invested capital from 4% last year to 12% this year.

As we move to the next slide, 2025 focused on our balance sheet transformation, not just in the numbers, but in how we think about our business. The key change has been a rotation to thinking about debt on a gross versus net basis. This shift in mindset allows us to view our business as one built to invest accumulated capital rather than just holding it for risk mitigation purposes. We're targeting gross debt at no more than 1x EBITDA. This allows us to excel through challenges and price cycles with flexibility to invest in projects when opportunities arise, not just when we're firing on all cylinders. Turning to the next slide. Deleveraging not only reduces risk, it increases free cash flow. Our interest expense drops from $35 million to $40 million annually to around $20 million, directly boosting cash flow. Free cash flow kicked into high gear in the second quarter and remained consistent. This came from operational excellence at Greens Creek and Lucky Friday, Keno Hills ramp-up and Casa Berardi capitalizing on strong prices as stripping ratios improved. Turning to Slide 22. We've been focused on return on invested capital for the past year. The results are strong. As the numbers demonstrate, we more than tripled our return from about 4% in 2024 to 12% in 2025.

With our best-in-class operations, we expect to generate significant returns in almost any price environment. Even at $30 silver, Greens Creek projects to generate 27% return, while Lucky Friday projects to generate 8% but at higher prices, which may even seem conservative today, those percentages project to more than double and our consolidated return more than triples.

Going to the next slide. We need to -- Slide 23. Nowhere is the fundamental shift more pronounced than at Lucky Friday, where we've demonstrated how disciplined investment creates lasting value. Over the next decade -- over the last decade, we've done many things to enhance value, including implementing a new mining method. This mining method have 1 goal to improve safety. We delivered on that goal. Safety improved 58%, but production also increased by 45% and inflation-adjusted costs stayed flat.

Lucky Friday is delivering 12% returns on a decade-long investment. Show me another 80-year-old mine that's doing that. We're not done though, we're actively working on further cost improvements, reducing contractor reliance, optimizing mining methods in-sourcing, drilling and consolidating sourcing.

The point here is that Lucky Friday isn't a cost story. It's a return [indiscernible]. We've invested [indiscernible] deliberately in a safer, more productive mine. It's delivering and we're still improving. As we move on to the next slide, I'll talk about our guidance for 2026. Our expectations are strong with silver between 15.1 million and 16.5 million ounces.

And as the slide shows, we're becoming a more balanced company. Greens Creek now provides slightly less than half our production. Gold production is expected at 134,000 to 146,000 ounces with approximately 2/3 of that coming from Casa Berardi and the remainder from Greens Creek. This strong by-product credit at Greens Creek is why our cost per ounce are so low.

Turning to costs on our all-in sustaining cost per ounce of silver is expected to be $15 to $16.25. This increase reflects 3 factors: lower production volumes, higher sustaining capital investment and more conservative by-product pricing. We expect gold all-in sustaining cost to be between $2,150 per ounce and $2,350, driven by underground extensions at Casa Barito ensure safe and productive operations over the next few years. Capital is expected to be $255 million to $279 million, which includes continued investment in Keno Hill, tailings at some of our operations and other capital investment, which Carlos and his team will cover later on in the presentation.

We also anticipate increasing our investment in exploration to $55 million, which Kurt will cover in detail in a few minutes. To put this guidance in context, at $50 silver, we generate nearly $350 million in free cash flow. While utilizing a $75 silver price and gold price of 4,000, we anticipate cash generation of around $700 million. And to be clear, this is comprehensive. It includes all expected capital, G&A, exploration, interest and other charges, including taxes. We ended 2025 with approximately $242 million in cash and cash equivalents on our balance sheet. Depending on 2026 prices and operational performance, the total of our treasury could increase to more than $1 billion. by the end of the year. For silver leverage in safe jurisdictions, Hecla is the only choice. No other minor offers this combination of silver exposure, liquidity, scale and jurisdictional safety.

Capital allocation is critical as we have established clear criteria for how we deploy capital. So as we move to the next slide, I'll talk a little bit about how we'll allocate that capital and that cash flow that I had just mentioned. This framework similar to what we presented last quarter with 1 additional strategic investments. With our strengthened balance sheet and expected cash generation, we're now positioned to deploy capital for maximum shareholder returns. First, we continue investing in our foundation, safety, environmental excellence and fully funding capital and exploration programs.

Second, based on forecasted cash flows, we expect to fully redeem our bonds by -- during this year. That can be a meaningful portion of the capital structure. But today, we have sufficient liquidity and cash to invest in our business, maintain liquidity and pursue strategic opportunities while delivering. Strategic investments must meet rigorous criteria alignment with our silver focus and safe jurisdictions, clearing our 12% hurdle and delivering transformational value. This could include M&A, joint ventures or strategic partnerships, but only when they meet our disciplined criteria. As cash flow grows, we'll evaluate further investment across these areas, but we'll maintain disciplined purpose is set up -- our purpose is set up to set up the company for long-term success. On shareholder returns, our previous SilverLink dividend constrained our ability to invest in growth. We believe $1 invested internally or in the right external opportunity can provide superior returns to paying a higher dividend. We'll also evaluate share repurchases, but only if we see a dislocation in value. whatever path we choose, long-term shareholders are a priority. We're not making decisions on short-term views or day-to-day share price. These results reflect our folks position in silver, where there's a fundamental supply-demand gap. We expect that gap to continue to persist.

I'll now have the presentation over to Anita, who will explain why we're so excited to be in silver.

Thank you, Russell, and good afternoon, all. Thank you for being here. So this year, I'll be celebrating 19 years at Hecla this February. And I've grown with the company, and I can tell you, I've never been this energized to be a part of this company. In my role leading treasury and finance, we work hand in hand with our excellent operations team that you'll hear from shortly, to ensure every dollar that we deploy meets our key ROIC threshold. And I think when operations and finance teams are aligned.

That's when disciplined capital allocation happens and we create the most value for all our stakeholders. So with that, we will delve into silver. Sugar, of course, all of you must have seen was more than $110 per ounce today. It's an unprecedented territory, and it's a very exciting time. So I'm going to make a case for why silver is the most compelling commodity opportunity, not just today but also in the long term and how Hecla is the best way to capture that opportunity. From this section, I hope you will take away these 3 key points. First, silver market is in a structural deficit, and we expect to remain as such going forward. Second, this deficit is due to constraints on silver supply and strong demand for silver and investment as well as industrial. And third and perhaps the most important Hecla is the silver company to capture this full silver opportunity, and it's because of our jurisdictional risk profile. Our superior asset quality and most importantly, the significant transformation that we as a company have gone through that Rob and Russell talked about. So with that, turning to Slide 27. We'll start with the fundamentals of silver market. So silver supply is about 1 billion ounces. 80% of that come to mine production, 20% comes from recycling. And it has been 1 billion-ounce market for more than a decade. And this 80-20 mix has not changed. However, silver demand has evolved significantly. Now silver is a unique metal. It has the highest electrical conductivity, it's valuable, and it's a key industrial metal just like copper.

But it's also a monetary asset just like gold. So silver's demand has seen a significant increase, as I said. The demand composition is 60% industrial, with the remaining 40% coming from jewelry, silverware, investment demand. But it's the industrial demand piece that has given silver a very solid base. The past 5 years, silver's industrial demand has seen a 10% annual growth rate increase. And it's been driven by silver's used in solar or PV, photovoltaics, that has seen a 19% annual growth rate over the past 5 years. That is phenomenal, and this strong demand has resulted in a market imbalance, which has resulted in a supply deficit of 800 million ounces since 2021 cumulatively. So to put that into perspective, we have used nearly a year's worth of mine production from above grown silver stocks in just 4 years, and that is unsustainable. This deficit is not going away. And let me tell you why, and that's on the next slide, please. This is primarily because of 2 reasons. First, supply side remains constrained. 2/3 of Silver's mine production comes from non-primary silver mines. So these are copper lead, zinc, gold mines where silver is a byproduct and the prices of these metals is not driven by what silver price is. Second, recycling, which is the other 20% of silver supply, that has seen -- that hasn't seen significant economic or technical incentives. So that supply source is going to be range bound. Then the demand for silver is very strong. Industrial demand doesn't show any signs for waiting. It provides a very strong base.

And investment demand will continue to benefit from macroeconomic and geopolitical factors, as you can see. The same factors that drive gold demand higher. So you might ask if the deficit has been this large for 4 years, why is it now that we saw this increase in silver price. And there is 1 key factor for that. significant and sustained supply tightness, and that's driven by some key aspects. There's been a strong investment demand with ETF buying, physical buying, jewelry demand for silver by retail. There's uncertainty around U.S. trade policy as we can all see. China has recently imposed restrictions on silver exports and the industrial demand continues to be strong. All of these factors have resulted in a liquidity squeeze in the London market and exchanges across the world. Next slide, please. So delving a little bit more into the industrial demand piece. What is propelling that? So silver is used in photovoltaic and solar that has been the dominant long-term foundation. And our internal research suggests that this is not going to go away. It's not just 5 years rather next 25 years, that solar is going to be a key beneficiary of this energy transition that we're seeing in the world. But it is not just solar, it's electrification, EV. AI, data centers, all of these use silver, and we expect they will continue to do so because when you are building systems that cannot fail, there is absolutely no substitute at all for Silver's unique electrical properties at scale. So -- and along with this, of course, is investment demand, where silver has a very high correlation with gold. And again, it's driven by macroeconomic and geopolitical factors. That's harder to forecast, but that investment demand is here to stay. Next slide, please. So now that we have established the strong arguments for silver, I think the question is, how do investors take advantage of this unique silver opportunity. Hecla is the answer. We are the premier silver company, and especially in a market where silver primary producers trade at a valuation, which is at a premium compared to gold producers. Hecla particularly stands apart with 4 key advantages: first, our jurisdictional profile. All our operations are in the U.S. and Canada. And it matters in an increasingly geopolitical uncertainty that we all see. And it just doesn't stop there. Our growth pipeline, which Matt will talk about, Kurt will talk about is all in U.S. and Canada. Second, our silver exposure. Nearly 50% of our silver revenues come from -- our revenues come from silver, and that number is only bound to increase with our announcement this morning. And this is especially important, as Rob mentioned, because our peers have drifted towards gold, and we have stayed committed to silver. Third, our reserve life dominance. We are average reserve life is 14 years, which is twice that of our peers. And this longevity matters when we are investing with the long-term horizon in mind where we can innovate and improve our operations. And Ryan will talk more about it.

And fourth, our cost excellence and superior asset quality. Our silver operations are in the lower end of our silver cost curve, and this asset quality provides maximum leverage to silver prices. Hecla is the choice not just now but also in the long term. And before I hand over to Carlos, I'll leave you all with this practical and time-tested thought. Has anyone here been to an Indian wedding Well, I have been too many, including my own 20 years ago, and there are 2 key things I have learned. First, silver along with gold is the currency of transaction at all Indian weddings. And secondly, Silver demand at these occasions is particularly press inelastic.

So with that, I'll hand it over to Carlos to speak about how we are executing our bright future ahead.

Thank you, Anvita, and good afternoon, everyone. I'm Carlos Aguiar, Senior Vice President and Chief Operating Officer. Today, I will show you what operational excellence actually looks like at Hecla. And I don't mean a master concept. I'm talking about measurable performance that drives real shareholder value. You are going to see in our safety results, our production execution in our financial returns. We are systematically improving performance across the portfolio and why we believe the best years of several of these assets are still ahead of us. I've been with Hecla for 30 years in 4 different countries, 5 different mines. And I'm really excited to be today for the same reason is the years that are still ahead of us. But let me start where we always do at Hecla with safety. Safety is not just the first item on the agenda. It's the foundation of everything we do at the company. It drives our priorities, and motivated us to innovate. This is anchored in our safety 365 values, ownership, transparency, competence and continuous improvement. I'm proud to report that we achieved a 13% improvement in our total reportable injury frequency rate in 2025. How did we do it through investments in training and has a reporting and taking quick action when we identify trends. We demonstrate this commitment every year on safety day when we actually stand down operations company-wide.

Think about that. All the people that we have in this room, we stop everything, so our teams can come together at each side for meaningful dialogue about keeping each order safe. And we are not stopping there. This year, we are taking the next step by proactively stress testing our critical control systems to identify and address [indiscernible] before they can [indiscernible] in a serious harm. The discipline, the planning and the systematic approach required to keep our workers sales create the same operational excellence that drive consistent, reliable production. Safety Excellence is not separately from operational excellence. It sets the foundation for it. Now let me talk about the tools and the systems we are building to drive performance across every aspect of our operations and deliver value to our shareholders. We are addressing 3 operational challenges that cost us time and money. First, we are making decisions with incomplete information. Second, we are responding to equipment failures after they happen instead of preventing them. And third, we are operating each differently despite having common processes. Our solution is pretty straightforward, connect our operations, standardize our systems and use the resulting data to make better decisions faster. Here's Here's how we are doing it. What platform? We are replacing fragmented system with integrated financials, procurement and maintenance. When Lucky Friday solves a problem Greens Creek should know immediately. Real-time equipment monitoring. We are extending networks underground, so machines can tell loss when they need attention. before they fail. That's a game changer.

This makes the change from emergency repairs to a scheduled maintenance. AA driving analytics. We are turning data from sensors systems and operations into actionable insights that help us to optimize everything from ventilation to production scheduling. The outcome lower cost, safer operations and faster decisions at every level. So I have outlined our safety approach and the technology improvements in the works. Now let me show you how we are deploying capital and reinvesting in our business. Our 2026 capital program is between $255 million to $279 million. And here's the key point. Every dollar meets our 12% to 15% ROIC tradeshow. It's every single dollar. The 2 largest components tell you exactly our priorities are: first, 29% for tailings infrastructure, which this extends Greens Creek and Lucky Friday to the year 2045.

Second, 28% on for mine development. This secures decades of future production. At Greens Creek, we are replacing critical flotation sales this year. This is a major mill infrastructure that's only upgraded once every 25 years. There will be some planned downtime in but this position grains quake for operational excellence through the next decade. So here's what you are going to see in the next few minutes, operational transformation backed by measurable results. And what I hope you take away is this. First, we improved safety significantly while exceeding production guidance across the portfolio. Second, we delivered in our cost commitments. And third, we are building the systems capabilities and workforce culture that drives sustaining performance through commodity cycles. And most importantly, this performance is sustainable. Our operations have clear line of sight to 2026 target and beyond. Look, Greens Creek and Lucky Friday are cash flow engines. Keno Hal is ramping up to full permitted capacity with exceptional cash flow potential. Casa Berardi is maximizing value in this strong oil price environment.

And behind these results, it's a worst horse committed to operational excellence and continuous improvement. We have a portfolio that delivers today while positioning us for tomorrow. And now to provide deeper insight into our operations and want to turn over to Brian Ericsson. Ryan is a true Hecla [indiscernible] who spent 27 years at Greens Creek. And before being promoted to VP of Operations. He was the General Manager of our cornerstone mine. Ryan.

So thanks, Carlos, and thanks for joining us this afternoon. To get started, I'd like to introduce our site general managers. With us today, we have Bill Cloth from Greens Creek. Chris Neville from our Lucky Friday operation and Jason Palen all the way from the [indiscernible]. So I'm going to -- I'll talk about a bunch of high-level details of our operations, but I would really encourage all of you to spend some time with these exceptional folks. They truly are generating the value at our operations worth your time. So now we'll discuss our operations. Turning to Slide 35. So Greens Creek mine is the largest and lowest cost silver producer in the United States with 35 years of continual operation and a bright future ahead. It's been our cash flow workhorse since 2008 with expectations continuing for decades to come. Now I'd like to play a brief video of Greens Creek to give you a view of this outstanding operation.

[Presentation]

So operating international monument requires excellence, environmental, operational and financial. And what you just saw is how we earned that privilege over the last 35 years. Now let me show you how that discipline translates to returns because at Greens Creek, environmental stewardship and value creation reinforce each other. Next slide. But you just saw represents 35 years of continuous improvement in action. Greens Creek exemplifies how sustained technical compounds value excellence compound, sorry. Since start-up, we've achieved 9% increase in silver recovery and a 15% improvement in gold recovery. These are not onetime gains, but sustained improvements that create lasting value. Next slide. Here's what that means in dollars. As an example, our 2014 carbon dioxide pH control project costs less than $2 million but generated over 110% return on invested capital. Those recovery improvements alone delivered 18 million additional silver equivalent ounces over the past decade. That's $400 million in incremental revenue and cash flow. That's operational excellence with measurable return. Next slide. And we're not standing still. Let me walk you through a few business improvement initiatives in action at Greens Creek. Let me start with our remaining method optimization. We're rebuilding our long hole stoping capacity with a target to reach 15% of ore tons by 2027. This is up from 3% in 2025. This fundamentally lowers our operating cost per ton and reduces our development requirements. Our short-term interval control systems enable real-time production optimization. While predictive maintenance technology reduces equipment downtime and maintenance costs by up to 8% while also improving fleet availability, enhanced backfill capabilities create production optionality, supporting our vision to possibly increase throughput after 2027. The systematic improvements built on a culture of operational excellence that has delivered lasting value. These improvements compound, Greens Creek's generated over $2.4 billion in cumulative free cash flow.

That's a staggering 192% return on our 2008 acquisition investment. Show me another mine that returns values like that. Next slide. And 1 more opportunity that I'm particularly excited about is the Greens Creek tailings reprocessing project. The tailings contained 12 Department of Energy listed critical minerals and a year-end 2025 pricing, this potentially represents $6.8 billion in gross value. I get accused of speaking softly quite often by my colleagues. So I'm going to repeat that. That's $6.8 billion in gross value. Even at a conservative 5% recovery, that's significant value. without even considering potential reclamation obligation reductions. We spent 5 years developing partnerships and conducting bench scale testing. And in 2026, we plan to do pilot plant testing of rates and pyrite concentrate to expand this possibility. Next slide. So let me bring this together. Green Creek. Greens Creek remains our cornerstone asset. It's a substantial cash flow generator with a dedicated team focused on safety, environmental excellence and financial performance. Through continuous improvement, exploration potential and the exciting opportunity tailings reprocessing presents, this mine is as intriguing as it's ever been. Turning to Slide 42, we'll discuss our Keystone asset, Lucky Friday. So Lucky Friday [indiscernible] has been a cornerstone of Ido Silver Valley for 80 years and after systematic investment in mining innovation. We believe that the best years could be ahead of us. We'll now play a brief video on Lucky Friday.

[Presentation]

[indiscernible] Friday. Now let's turn to how that transformation is translating into safety, productivity and return, starting with the innovation behind that transformation. UCB mining method. So Lucky Friday has a long history of innovation from underhand longwall mining to the Silver Valley's first concrete line circular shaft. But beginning in 2020, our team developed a patented breakthrough, the underhand closed bench or UCB mining. UCB has proven transformational to the property. Most importantly, UCB release seismic energy in a controlled manner during blasting, dramatically improving safety conditions with roughly 90% of the seismic energy released within the first 12 hours of the blast. It also enables bulk mining larger and more mechanized equipment and less manual labor boosting productivity and improving workforce safety. As Russell highlighted, UCB was born of necessity and our focus on safety has transformed Lucky and Friday into a return story. Excellent. Russell also spoke about a 12% annualized returns we have seen at Lucky Friday over the past decade, especially with the UCB method. The invention of the UCB was a catalyst for ongoing business improvement to fully capitalize on a creative solution to an historic challenging seismicity problem. Here are a few ongoing improvements, I'd like to highlight. In the next 2 years, we plan to bring UCB production drilling in-house versus contractor, which is expected to reduce costs by $1.3 million annually or about 30% an ounce in operating costs.

The mine is improving refrigeration to keep the miners safe and more productive. A significant production increase was recognized within months from a workshop focused on increasing the number of ore skips per day up to silver shaft from 157 to 180 skips per day.

So that's a 15% improvement, translating to roughly 8% more annual metal production. Mill throughput over the last 5 years has increased from 48 tonnes per hour at over 68 or 60 tonnes per hour through crusher and cyclone optimization. And just recently, the operation briefly saw 70 tonne per hour production rates indicating additional potential. The Lucky Friday team represents the core of Hecla with their continued drive for improvement and creating value, and the projects highlighted are delivering that value. Next slide. So you saw this graph briefly in the video, but I liked it so much, I wanted to display it one more time to drive home an important point. Success of the UCB mining method has transformed the production profile of this mine. -- from an average of 25.5 million ounces per decade over the past 6 decades to nearly 50 million ounces per decade post UCB implementation.

We produced 5.2 million ounces in 2025 and broke multiple records, tonnes milled, tonnes mined and silver production most notably. Lucky Freda is not a cost story. It's a return story where the best decades of the [indiscernible] mine is ahead of us. Next slide. So Lucky Friday is effectively a new mine with many factors in alignment for future success. We have higher grades of depth a safer and more production way to mind with the UCB and higher prices and also a fantastic management team with Chris at the helm, really looking forward to what the future holds for this Keystone asset of the company. Next slide.

So located 280 miles north of Whitehorse, the Yukon, [indiscernible] is the largest silver mine in Canada. The operation is currently ramping up to its permitted capacity of 440 short tonnes per day. The site consists of 2 underground mines, Birmingham and Flame and mouth in a mill that produces high-value concentrate for world markets. Since its acquisition in 2022, Hecla has made substantial improvements to improve the workforce health and safety. We implement leading environmental standards, protect Yukon and the First Nation's historic lands and to derisk production at this world-class silver deposit. The sites in a spectacular setting that remains endowed in mineral wealth, and we have a hard-working group of people addressing historical reclamation while building Yukon's mining future. Next slide. [indiscernible] has advanced through an investment in ramp-up phase and is not yet in commercial production. We're building infrastructure with room for expansion when future returns justify. At 440 short tonnes per day, [indiscernible] reserves supports 16 years of mine life. And as Kurt will speak to in our exploration segment, we believe there is significant upside potential at this operation. allowing us to potentially operate here for many decades into the future. marked a milestone for Keno Hill, producing just over 3 million ounces of silver at the upper end of guidance and its first year of positive free cash flow under Hecla ownership.

At 440 tonnes per day and $50 silver Keno Hill has the potential to generate well over $100 million in annual free cash flow. Leverage to higher silver prices is also significant. $75 silver generates about $250 million in annual free cash flow, and more than $300 million at $100 silver. Keno Hills IRR is equally impressive. Our internal analysis shows the asset achieves a 12% IRR at just $30 per ounce silver, well below current prices. which supports our decision to advance through final ramp-up. With 16 years of reserve life and exploration upside, Keno Hill should capture multiple silver cycles, generating exceptional returns over its life.

Next slide. At current metal prices, Keno Hill is expected to be more than self-financing, generating cash flow for reinvestment growth. And coupled with ongoing exploration investment, this asset has decades potential from it. Slide 51. And finally, Casa Berardi. Casa is located in Western Quebec and [indiscernible] open pit and underground gold mines and mining at Casa began in 1988 with a previous owner. Hecla acquired the operation in 2013 through an acquisition. Since the acquisition Hecla produced 1.4 million ounces of gold from this operation.

Next slide. Casa Berardi is expected to generate significant cash flows in 2026 and 2027 at current basis. At 4,000 gold, we expect to generate $250 million in cumulative free cash flow, building on the strong performance in 2025. The 160 pit should be depleted by year-end 2026. And over the next 2 years, processed ore will consist of a blend from the 160 pit and the higher-grade underground ore. Beyond that, the operation is expected to transition to temporary hair and maintenance while we developed 2 additional open pits and also evaluating third-party or purchase opportunities to bridge any production caps. Next slide. Casa Berardi is generating exceptional cash flow at current gold prices, cash flow we're deploying into our silver growth-focused strategy to create shareholder value. I'd now like to turn it over to Matt Blattman, our VP of Technical Services, to speak about [indiscernible], 1 of our most compelling near-term organic growth opportunities.

Thanks, Brian. Good afternoon. I'm Matt Blattman. I'm Vice President of Technical Services here at Hecla, and I'm excited today to talk to you about our project in Midas and why it aligns so well with our approach, disciplined approach to capital that Rob outlined in the strategy Midas is a high-grade gold silver district in Northern Nevada, located about halfway between make and Elco, just north of Interstate 80. The district originally operated between 1907 and 1940-something and eventually became 1 of those mining camps that Nevada is just so famous for. In the more recent times, the district has produced about 2.2 million ounces of gold some 27 million ounces of silver and about an average grade of 0.5 ounce per tonne.

And eventually, and it operated that during that time frame from 1998 to 2014 and eventually had then transitioned to its current state of care and maintenance. Now I grew up in Winnemucca. If you can tell by my accent. And as a teenager, he used to go out with my best friend and his grandfather and work his grandfather's claims building fences and whatnot. Later on, when I was going to school at the Mackay School of Mines in Reno, getting my mining engineering degree, I worked for a consulting company that did the original resource model on the Midas deposit that eventually became [indiscernible] mine. So as you can imagine, I'm pretty familiar with the district and I've got a rather sentimental attachment to it. So in November of last year, we announced high-grade gold intercepts at both our Pogo and [indiscernible] targets, with visible gold, including about 1 ounce per ton over 2 feet at Pogo and about 0.5 ounce per ton over 6 feet at Sinter.

These results validate our approach our systematic approach towards exploration that shows that significant high-grade mineralization still exists in the district well beyond those mined out areas. But here's what makes Midas exceptional. We have most of that infrastructure already in place. That includes a mill that was built in the late '90s by Franco Nevada and later operated by Norman Newmont. We have that -- the permit on that mill allows us to process about 1,200 tonnes per day. And we have a tailings facility that has a remaining capacity of about 7 million tons. And that also includes all the associated infrastructure and utilities that come with an operation like that. And the facility has only been on care and maintenance for about 5 years now. We had a recent preliminary engineering study by 1 of our trusted consultants, and they estimated it to bring the facility back online, it would cost us about -- sorry, about $50 million. we're now conducting more comprehensive engineering studies and analysis to refine that estimate and really understand what the scope of work will look like. But regardless of that final number it's clear that it's going to be rather low capital intensity when you compare that against building a brand-new mill. And the permitting time line is an advantage. It's a massive advantage, while our competitors might be facing time lines that are 10 years or more to get a new permit for a facility, we already have many of those permits in hand. And much of the infrastructure is already ready there to be refurbished and bring back online. Our 2026 exploration program is designed to define resources that could support a restart decision within 3 years. We're using rather conservative assumptions in our conceptual planning. That means great estimates that are below the historical averages, mill throughput capacities that are below the nameplate capacity of the mill because we want disciplined economic thresholds and not just optimistic projections of the future. But if we can find resources that are, say, several hundred thousand ounces, with grades that are consistent with those historical values. The economics are really quite compelling, low upfront capital leveraging existing infrastructure with high-grade ore and a potential path to production within 5 years.

[indiscernible] to talk a little bit more on the detail at Pogo and Center and the broader [indiscernible] district, but we believe these deposits represent a fully preserved epithermal system across our entire 30,000-acre land package. We can develop these initial discoveries while we continue district-wide exploration, potentially extended mine life and even the scale of the operation as we go forward. the strategic value here is really pretty -- not just pretty underappreciated, is underappreciated. [indiscernible] offers genuine near-term production with a capital efficiency profile that's rare in this industry. we're not building in some remote location from scratch, brand new everything. We're reactivating proven infrastructure in a proven district with high-grade gold distilleries. Midas represents an organic growth opportunity that leverages our existing assets and maintains capital discipline and creates tangible shareholder value in an accelerated time line. And [indiscernible] isn't our only opportunity in Nevada. Our Hollister project is nearby, and we're evaluating Aurora where we just received our exploration permits recently.

This emerging hub-and-spoke model with Midas infrastructure at the center, could support multiple sources of ore over time, including potential joint ventures or purchases with third parties. Now this hub-and-spoke model is common in Northern Nevada. It's essentially the business model that Nevada Gold Mines MGM operates under.

And with that, I'll turn -- I will pass the time over to Kurt, who's going to speak more about it in Nevada exploration program. and provide some more detail on our largest ever exploration focused on organic growth opportunities. Thank you.

Thanks, Matt. I'm Kurt Allen, Vice President of Exploration, here at Hecla. I've spent the last 38 years in exploration and operations, including my time as the chief geologist at the San Sebastian mine in Mexico as well as the Rosebud mine in Nevada. That time taught me that the real measure of an exploration property and project is not whether there's just mineralization in the ground. It's whether you can mine it economically. Over the next 15 minutes, I want to walk you through why I believe and why we believe Hecla's exploration pipeline represents a significant value creation over the next decade and beyond. Before I begin, there are 3 main points that I want you all to take away from this exploration overview. The first point is our strategic shift from underinvestment to peer competitive exploration investment, representing a fundamental transition from depletion to growth. The second point is that we have exceptional existing assets in proven world-class districts, all located in safe jurisdictions. And finally, we have multiple near-term growth catalysts with significant exploration potential and discovery potential. So why does exploration matter Exploration is really the engine of our future. Every ounce we produce today was discovered yesterday. As Rob and Russell explained earlier, the financial shackles are now off that has kept us from investing in our exploration pipeline. The shackles are gone, the increased 2026 exploration investment of $55 million. We are transitioning from depletion to growth from defensive to offensive from underfunded to strategically invest it. Next slide. This slide shows where our projects are the operations and exploration projects all within low-risk, safe jurisdictions. Next slide. Our 2026 exploration budget brings us to peer competitive levels representing 4.5% of projected revenue. Our target is to achieve a 100% reserve replacement plus mine life extensions. And our focus for this year is approximately 80% on our operating assets and near-term development opportunities. With about half of our exploration investment directed at extending our already long mine lives, the return on resource additions is exceptional and gives us an even longer planning horizon. In Nevada, I'm really super excited about the emerging discoveries that we're seeing at Midas and the potential to restart operations, and I'll talk more about that in a moment. On our early stage projects and generative exploration efforts, this is really where we can make a game-changing discovery. Now that we're back in the game, I'm excited about the possibilities for future discoveries. Now let me walk you through our top opportunities for 2026, starting with our foundation, Greens Creek, on Slide 60. We Greens Creek is a textbook example of how systematic disciplined exploration can continuously extend mine life and create enduring value. The slide tells a remarkable story spanning 50 years.

When we look at these plan views showing drill intercepts greater than 5-ounce per tonne silver, you can see the evolution from the discovery from 1975 through today. Now the initial discovery drilling in 1975 identified what many thought would be a modest 10-year mine life. But through persistent exploration, and a deep understanding of geology, we made discovery after discovery. The key message here is the exploration potential remains open in multiple directions. Greens Creek started with a 10-year mine life 35 years ago, and today still maintains a 12-year reserve life. That's the power of systematic exploration and a world-class district. And to pick up on Brian's point earlier, we're building an expanded dry stack tailings facility in anticipation of ongoing exploration success. Next slide. Let me show you specifically where we're focused in 2026, both underground and on surface. This slide demonstrates how we're pursuing a two-pronged approach to extend mine life. On the underground side, our 2025 exploration program extended Gallagher Mineralization 550 feet down plunge from the existing resource. And we also intersected silver-rich mineralization in the northern and southern portions of the 200 South zone. Those intercepts absolutely warrants follow-up drilling. Looking at the underground plan view, you can see the reserves are in red. Resources are in blue, and our exploration targets are in light blue. Those red arrows show where exploration potential remains open in multiple directions and multiple vectors for growth. On the surface side, we completed our 2025 exploration program drilling 3 target areas: eStore, Cliff Creek and Gallagher. And we also completed large geophysical program and mapping in our -- in the area of our lower Zinc Creek target.

The exploration we completed in 2025, significantly advanced multiple targets, especially lower Zinc Creek, where we see strong potential for near surface discoveries. When you combine our underground success extending known zones with our surface program that's identifying new targets, you can see why we're confident about adding to the mine life through focused exploration program. This is a world-class deposit, and it's in a world-class district, and we're applying world-class exploration techniques to continue the growth story that's been unfolding here for 50 years. Next slide. What I want to show you now is one of the most compelling exploration success stories in our portfolio, the Birmingham vein system at Keno Hill. This illustrates why we believe systematic well-funded exploration in high-grade silver districts delivers predictable and repeatable results. You're looking at a longitudinal section through the Birmingham system. And what you see here is the evolution over 16 years from 2009 through the present day. Each period shows drill intercepts greater than 10 ounces per tonne silver. Through each period of discovery from the Aetna to the the bar, the Northeast Birmingham and the deep Northeast, Birmingham, we're not just finding parallel structures. We're understanding that this system has both lateral and significant depth potential. We've been adding to the Birmingham system for 16 years, where we've developed a robust geologic structural model that with our systematic drill testing, we continue to make discoveries. That's the hallmark of a world-class vein system in the hands of a skilled exploration team. Slide 63 shows us continuing that trend in 2025, where we have discovered what we believe to be a new ore shoot, 500 feet along strike and down plunge significantly extending known mineralization. Based on the drill spacing, the continuity of high-grade intercepts and the geologic interpretation, we're targeting an additional 50 million ounces of silver resource from this 1 area.

Now one of the key aspects at Keno Hill that really excites me is if you look at the plan map on the right side, you can see all of our targets within the Keno Hill district. There are currently a total of 17 targets that have exploration discovery potential in excess of 50 million ounces of silver each. You can add up the potential we see at Keno Hill, and understand that we have only begun to unlock the value from this very prospective district. Moving to Lucky Friday on Slide 64. Lucky Friday sits in the Silver Valley, which, as Rob stated earlier, is 1 of 3 districts on the planet that have produced over 1 billion ounces of silver. This slide shows the history of exploration. And in 1991, north of the Lucky Friday vein system, we discovered that the modest ore body below the surface outcrops of the historic gold Hunter mine continue at depth and blossomed into a world-class ore body containing greater than 200 million silver ounces. Mineralization continues to be open at depth and a long strike. Extensive potential continues to exist today, and Lucky Friday has the infrastructure to support expanded operations at minimal cost, finding another gold hunter scale deposit doubles the asset value. Moving to Nevada on Slide 65. We are unlocking significant value in Nevada with our large district land packages in Tier 1 jurisdictions, with exceptional infrastructure. We have 3 advanced projects consisting of Midas, Aurora and Hollister, where continued exploration success could lead to a path to restart development decision by 2029, 2030. The combined exploration potential of these 3 projects is on the order of 2.5 million to 3.5 million ounces of gold equivalent a mix of high-grade gold and high-grade silver. The minus [indiscernible] history here is shown over 2 centuries, where significant exploration potential and opportunity remain. Our projects in Nevada have proven geology, existing infrastructure, strong community relations, political stability, all located in Tier 1 jurisdictions. Slide 66 at Midas shows strong results from our drilling program in 2025, and it really validates our systematic approach to targeting with structures confirmed in 5 of the 6 targets drilled. These early-stage discovery demonstrates the district scale potential. The Pogo and Center offset discoveries in 2025 represent a significant breakthrough at Midas, finding visible gold in the first drilling of a 2-mile trend at Pogo, intercepting 0.95 ounce per ton gold over 2.2 feet and 0.6 ounce per ton silver. And the discovery of the high-grade center vein offset display 750 feet across the post-mineral faulting really does validate our systematic targeting approach to this untested Southeast Midas area. Moving to Slide 67.

In 2021, we discovered the center vein. It is estimated to contain between 150,000 and 200,000 tons at grades between 0.65 and 1.6 ounce per ton gold and between 10 and 15 ounces per tonne silver. These are really super high grades. In 2025, we founded again 700 feet across a major fault that is shown in drill hole 462. Why does that matter? Well, because when you find the same high-grade structure on the other side of the fault, it tells you you're dealing with a much larger system than you initially thought. Our last role of this season, almost 2.5 football fields away from 462, intersected 0.46 ounces per ton gold over 6 feet, and that's shown in drill hole 475. The zone is open in all directions. It's not just geologic curiosity with permitted infrastructure already in place, successful delineation could enable near-term production to restart with minimal capital. That's the Nevada advantage. We're not just discovering deposits, we're discovering deposits where we already have permits and mills to process it. Moving to Aurora. As seen on Slide 68, receipt of the Polaris exploration permit project permit in Q4 of last year at Aurora was really the first step in unlocking the exploration potential of 1 of the highest grade gold silver districts in Nevada. The second step is planned significant drilling of our high-priority targets in 2026. Now while I'm super excited about all of our exploration targets, I'm really excited about the high-grade results we're seeing at Midas. But Aurora is the 1 project I'm most excited about because it's the exceptional high-grade potential, and now we have the permit in hand to do the systematic expiration that's required. Lastly, Slide 69 emphasizes the 3 key points I want you all to take away from the exploration update. Our strategic shift from underinvestment to peer competitive exploration spending, our exceptional existing assets with proven world-class exploration potential, all are located in safe low-risk jurisdictions, and we have multiple near-term catalysts with significant exploration potential. These 3 points demonstrate why we believe Hecla's position for sustainable organic growth through strategic exploration investment.

Turning to Slide 7. I'll now pass it over to Patrick.

Thanks, Kurt. I hope you're as excited about some of our opportunities as we are. Good afternoon. My name is Patrick Malone, and I oversee sustainability for Hecla. I also have with me today in the second row, Laura Johnstone, who oversees external relations in the Yukon. She'll be available during Q&A to answer any questions you may have about mining policy with the new government or with relationships with First Nations. I joined Hecla last year in April, and I joined for a couple of reasons. First, I saw that Rob has been named I've known Rob for a lot of years. We worked together at Barrick, and I have nothing but respect for him, and I was really excited for the opportunity to be part of his executive team. I was also really excited to join a premier silver producer. As you've heard from Anvita and others, silver is such a fascinating story. Not only is it the key to unlocking energy transition, but it also has monetary value has cultural value. It's just -- it's really an interesting place to be. And I think the recent run-up in the prices over only confirms the excitement that I had. I'm a passionate believer in responsible mining. I spent over my 25-, 26-year career now. I've permitted mines. I have operated mines of closed mines, and have redeveloped old mine sites. My whole career has been focused on different aspects of mining. And I've held legal roles I have held technical roles, operational roles, executive roles, I've been at a major, I've been an exploration junior and now at Hecla. And there's a common theme through all of this. it's the importance of trust in a mining company. You can have the best geology. You can have the best technology. You have a perfect safety record. But if you don't have trust, the trust of your stakeholders, you're not going to be successful over the long term.

I have an exert from our recently past our recently adopted sustainability policy. And I think it really encapsulates what we're trying to do Hecla, respect the lands we work on, build last relationships with communities and provide enduring benefits for current and future generations. That's the formula for trust. It's actually a really simple formula, but very few companies, very few mine companies get it right. But for you, as investors, I think this is a key point. When you're evaluating companies that you want to own, particularly over the long term, look for companies that invest in long-term relationships; because those are the ones that are going to be successful. They're going to be -- continue to be successful in getting new permits. They're going to continue to be able to operate. They're going to continue to be able to expand and grow. Building those relationships is baked into Hecla's strategy and the values of who we are. And because of those values, we're confident in our growth opportunities. We're confident in those opportunities because our communities, our stakeholders are confident in us. So let me underscore a couple of ways a few ways that we earn and maintain that trust. So first, each of our mines operates largely on hydropower. It's fairly unique. We have low greenhouse gas emissions. We have low carbon intensity, low overall emissions, and we have an advantage of having this cheap renewable resource. This is also important for our relationships with the communities because long after we're gone. Those resources will still be available. They'll continue to benefit from the fact that we were there. You also heard earlier about dry stack tailings. I'd love to talk to you a lot about -- I'm really fascinated with dry stack tailings. But it's basically what it sounds like. Instead of being wet tails, they're dry tails. And that reduces risk, some of the risks that conventional tails pose. It also makes it interesting for us to be able to go back in and recapture some of the value by reprocessing some of these tails in the future, as you heard from Brian. Lucky Friday during the video, I don't know if you picked up on it, but they're working towards 0 discharge, 0 water discharge in the environment.

This is another amazing thing. Every year, we're making progress in getting to a point where where there will be no discharges outside of the mine site. That protects water. It's a much more sustainable way to do business. And again, it reduces risk. We're also very proud of the economic impact we have on our communities. You can see some numbers there, but in 2024, over $1 billion of economic impact. And through our Hecla Charitable Foundation, Cumulatively, we've already directly invested more than $5 million in our communities. And at these metal prices, we're expecting 2025 to be a very good year for our charitable foundation. You can hear more about that in our sustainability report, which will be coming out in a couple of months. Here's another story that I'd like to share with you. Our Keno Hill mine site sits in the traditional territory of the nation of [indiscernible] done, the NND. They've historically been supporters of mining because mining has been a part of their community for a long, long time. But in 2024, with the Victoria Gold heap leach failure, they begin the question. What -- how can we trust these miners? Do we want to continue our relationship with mining? Recently, Laura Lee and I met with the Chief of the NND Dana Hope who we meet with regularly. And we are talking about Telo. We were talking about the importance of mining in her community. And she talked -- she used an interesting phrase. She said, they're interested in generational mining. They're interested in mining that creates jobs and prosperity today for their kids and for their grain kids. They're interested in mining that leaves things better than they found them.

That's exactly what we're looking for. We want log and live mines. We want responsible mines. We think that's good business. We think that's smart investment. Chief Hope expressed confidence in Hecla, partly because they've seen the way we operate. They've seen the wilderness that thrives around our Keno Hill mine, and they were also intrigued when we told them about the burgeoning brown bear populations around Greens Creek. An NND culture, the presence of bars indicates a healthy environment. It's fascinating. They asked us if they could come out into our Greens Creek. So this spring, we're planning on bringing the Chief and Council over to Greens Creek to let them see firsthand how we're able to operate in this pristine environment. Now I believe in I believe mining companies reputations are largely determined by what we leave behind. So for a minute, I'm going to talk about reclamation and closure, which is something that mining companies don't often talk about, but something that we're very proud of. The top pictures -- you can see San the San Sebastian mine in Mexico during operations. It was an open pit mine. And then you can see what it looks like last fall. I challenge you to find where an open pit mine is in that picture. It looks like agricultural lands have been completely backfilled, receded. It's virtually indistinguishable from the surrounding environment. When [indiscernible] took over Keno Hill, we accepted an obligation to clean up decades of historical mining impacts in the mining district.

Okay. We've been engaged in that project now for a couple of years. And interestingly, it's entirely funded by the Canadian federal government. We're doing the work. We're being reimbursed and paid for doing this work. But in the process, not only are we cleaning up the environment, we're building out a new workforce. We're investing in communities. We're building these relationships. We're building trust. And our efforts have been noticed. In fact, this last year, there's a picture there of when we received the excellence and Environmental Stewardship Award from the Yukon government. In the picture, you can see recently elected premier Kari-Dixon, presenting the award to Lora Lee as well as Lance to members of my team. .

At that same event, Rob was able to sit down with the Premier and talk about mining and talk about the future of Hecla. And the Premier was clear that mining is important to the future of the Yukon and he remains fully supportive of Hecla, fully supportive of Keno Hill as we ramp up and responsibly develop the mine. Now as I look forward through the rest of the year in the future, I'm really excited. I'm excited because we have the right team, we have the right resources. We have the right leadership and we're at the right time to do some amazing things. Now of the many stakeholder relationships that we have, 1 of our key relationships remains with the governments that that oversee our operations. To tell you a little bit more about those relationships and what we're doing with them. I'm going to turn the podium over to Mike Satre, our Director of Governmental Affairs.

Well, thank you, Patrick, and good afternoon, everyone. My name is Mike Satre. I'm the Director of Governmental Affairs for Hecla. I first joined the company in 2008 when I was part of the Greens Creek management team that stayed on after that foundational acquisition. I saw a significant opportunity by staying with Hecla at that time, and I even see more today. I have almost 30 years of experience in the mining industry, first half of which was spent as a geologist in both open pit and underground mines and technical and management positions. But I sense to made the jump into the external affairs side of the business. where I truly enjoy translating what we do on an operational basis into the public policy world. When I can sit down with the people in D.C. and make them understand how their actions impact a minor underground in Idaho, it truly makes a difference. The political world these days is more complex and moving faster than ever. But there is no question that our industry is at an unprecedented inflection point, and this creates significant opportunities for Hecla. The public recognition of the need for critical minerals, coupled with favorable government policies have fundamentally shifted the landscape in our favor. Today, I will talk about 3 critical developments that are accelerating value for Hecla. The emergence of critical minerals as strategic national priorities, sweeping regulatory reforms that are removing barriers to development and our aggressive positioning to capitalize on both. Next slide. So let's start with the fact that now Hecla is a leading critical minerals producer. Silver, lead and copper were newly recognized on the official U.S. Critical Minerals last just a few months ago. They joined Zinc, which had already been on the list and gold, which is recognized as critical through executive orders. and listing just isn't symbolic. Critical mineral designation drives tangible advantages, federal funding opportunities, predictable permitting processes and federal prioritization for our projects. But it's not just the United States as Canada has been equally aggressive. They've designated zinc is critical and established the critical minerals infrastructure fund that focuses on nation-building projects. including energy infrastructure like the Yukon BC intertie, this creates real tailwinds for our Canadian operations. The message from both nations is clear. Critical mineral development is imperative for national security and silver represents precisely the type of strategic resource that must be prioritized in any modern mineral strategy. And that's not our words.

That comes from the U.S. senators who signed on to a letter endorsing silver as a critical mineral. Next slide. So let's talk about the regulatory environment. The Trump administration has made mineral development a national security imperative through executive orders. deregulatory actions are underway across federal agencies specifically designed to remove unnecessary hurdles to mineral production. More specifically, the FAS 41 process has emerged as a true game changer and the permitting council is now actively soliciting mining projects to enroll for accelerated permitting. We, last year, strategically placed 3 of our exploration projects on the FAS 41 transparency list, Libby, Greens Creek in Aurora, and all 3 projects received favorable notices of decision in the past 4 months on expedited times line -- on time lines.

On the congressional side, we're seeing genuine bipartisan momentum. The Speed Act would implement NEPA reforms designed to eliminate duplication, shorten time lines and limit for this litigation and the permit act would implement similar reforms under the Clean Water Act. These bills have already passed the house, and we are now working on garnering bipartisan support in the Senate. Next slide. And when I say working on these bills, I mean it. This is what separates us from our competitors. We're not waiting for policy to happen. We're actively shaping it. At the federal level, we built direct relationships with White House and agency leadership. We've driven placement of our projects on the FAS 41 list. We've worked with the National Energy Dominance Council and the Department of Interior to secure Silver's critical mineral designation. In Congress, we built bipartisan relationships that matter. Chair Westerman led 11 House Natural Resources Committee members on a tour of Greens Creek in August, and we're in regular meetings with both Republican and Democratic committee staff to advance permitting reform -- and importantly, we've used our leadership roles in both national and state mining associations to support those efforts. We're also evaluating government grants, including Department of Energy funding for recovery of critical minerals from tailings. And in the Yukon, as Patrick talked about, we've established relationships with the new Premier and Yukon party government to support our operational needs. This is strategic engagement at scale. The path forward is clear. Hecla's portfolio aligns perfectly with what the U.S. and Canadian governments have designated as strategic priorities and regulatory barriers are being dismantled. Hecla is actively driving this transformation. This is the environment we've been building towards, the path is favorable, and now we're focused on execution.

So now moving to Slide 79, I'll turn it over to Rob Brown, who will speak about our corporate development strategy and portfolio optimization.

Thank you, Mike. So I'm Rob Brown. I'm the Vice President of Corporate Development. I'm a geologist with a finance background and have spent 3 decades in commercial roles, mainly M&A, including several years in investment banking and as a CEO at another company. I recently participated in a Board strategy workshop where we aligned on what disciplined M&A looks like at Hecla. And that's what we'll cover in the next few minutes. You've just seen a $55 million exploration program across compelling internal pipelines, you're likely thinking with a strong balance sheet and silver focus, are you looking at M&A?

The short answer, yes, but with discipline. And let me explain what we're thinking about. Where we are today, we have approximately $240 million in cash, minimal debt and the strongest balance sheet in Hecla's modern history. Kurt showed you a significant exploration opportunities. Those are our primary bets. But we'd be negligent if we weren't evaluating external opportunities in what's becoming a consolidated sector. Our M&A philosophy, while we're not acquisition-dependent for growth, Nevada exploration, Keno Hill ramp-up, near-mine opportunities, these deliver growth we can control. But if the right asset emerges, we're positioned to act. So we have 4 nonnegotiable criteria, starting with jurisdiction. We strongly prefer the U.S. and Canada but we will consider other jurisdictions if they rank in the top 3 of the Fraser Institute Mining surveys, and we can confidently identify and mitigate key risks. We conduct rigorous risk assessments, political, economic, legal, operational and security.

If we can't get comfortable with the risk profile, we'll walk. No asset is compromising our jurisdictional standards. Precious metals with strong silver bias. Our primary focus our silver assets that strengthen our position as the premier North American silver producer. But we'll also consider exceptional gold assets if they're compelling cash generators that fund our silver growth strategy. Think of Casa Berardi's role with the gold funding our Silver sort strategy. we're not diversifying away from silver. We're finding assets that support our Silver focused program. The competitive advantage. Why is this worth more in our hands? Is it nearby infrastructure, exploration upside that we can unlock operational synergies, do we have the opportunity for district consolidation? Financial returns, we must clear a 12% return on invested capital at conservative metal prices, and we will stress test every assumption. We've reviewed multiple opportunities over the past year. We've passed on all of them. Some were in jurisdictions we just won't touch. Some were mediocre assets that were at a premium price some required capital that would generate better returns within our own portfolio and some just didn't return -- didn't clear our return hurdles. That discipline is intentional. We won't chase deals just to show activity.

What are we actively watching? What the sector is consolidating and primary silver assets are scarce. -- safe, mining-friendly jurisdictions are limited. So what are we tracking? Silver focused opportunities in North America high-quality gold assets that could serve as a cash engine, exceptional assets in top-tier jurisdictions beyond the U.S. and Canada, distressed situations where quality assets might become available. joint venture opportunities, leveraging our infrastructure or technical capability and district consolidation place, particularly in Nevada. We're patient, but ready. Why this matters to you? If we find nothing that meets our criteria, we'll deploy capital into internal opportunities, strengthen the balance sheet further or return capital to shareholders. if we find the right opportunity, whether in our home jurisdictions or a safe mining friendly region, whether Silver focus or a gold cash generator, we can move decisively without excessive dilution or stretching the balance sheet, either way, discipline is going to govern the decision. So in summary, strategic flexibility, capital discipline and silver focus. I'll now return it back to Rob for his closing remarks.

Thank you. So 14 months ago, Hecla had exceptional assets that weren't delivering the returns that they should today. million in free cash flow doubled to 12% balance sheet rebuild, exploration investments doubled and unlocking value. Now that's transformation. So what makes it sustainable Well, we've implemented some systems as we've talked about. Russell showed you the capital allocation frameworks. Carlos showed you the tools, the business improvement tools. Kurt showed you an exploration strategy turning drilling into discoveries and value. And these capabilities compound. Next is discipline. Our returns threshold, it doesn't change when silver hits $50. Our standards don't relax when schedules get tight. Clarity. We are the premier American silver producer. Every decision serves that vision. People UCB mining innovation, metallurgical breakthrough, systematic exploration operational discipline at Keno Hill, none of these from mandates, all from teams who believe in we're building. So where are we headed over the next 18 to 24 months, Keynote-permitted capacity, number of drill results that either advance or redirect our strategy in 3 to 5 years, if Nevada succeeds potentially a fourth production center. If not, we'll obviously redeploy that capital where it creates better returns. But throughout all of that discipline. We won't chase production growth for growth's sake, as Rob pointed out. So you obviously all have a choice. You can buy the ETF and get the commodity exposure, or you can invest in the largest primary silver producer in the United States and Canada, exclusively in Tier 1 jurisdictions, reserve life is double that of our peers, $0.30 ROIC from our silver operations and a balance sheet built to execute. I think the best years of Hecla really are ahead of us. So thank you. And with that, we'll turn it over to questions. I've got a very talented management team here. So feel free to ask them more questions. You can hear it Dare from [indiscernible].

Okay. Mike, let's head off with some questions, please.

First question, selling silver, how do you choose who to sell your silver to? .

Amit, would you want to answer that?

So the silver that we produce is in concentrates, and it goes to our customers who are smelters Couriers Inc, tech, these are big players. Most of the silver goes to the concentrates and to benchmark customers. So we have predetermined contracts. We also sell silver on spot market based on the terms that we get if they're profitable or not. But mostly, these are all predetermined. We do not produce silver in dore, it's all concentrates. Most of it is concentrates. .

Next question. It's on the news that we announced just before the Investor Day kicked off. What was the the kind of decision-making around selling Casa Berardi?

So we've owned Casa Berardi for around about 13 years. During most of its life, I hadn't really made a lot of money. So right now at very high gold prices, it's making money. You saw in Q2 and Q3, we made something like $30 million and $32 million, respectively. We're making money now. At the moment, on our current base plan is to harvest and we would continue to operate the 160 open pit until the end of this year and then supplement that with stockpiles. So we've got about 2 years of production ahead of us. This is our plan. And then we have about a roughly -- we've signaled roughly a 5-year permitting hiatus. And at some point, the plan was to do some dewatering, complete the engineering studies and put the Principal pit into production. That's kind of long dated. What we've done essentially is bring that cash flow forward. Now you saw our model depending on your. On the gold price assumption, anywhere between, let's call it, $300 million to $400 million of free cash flow. We're bringing that forward. We're not having that 5-year weight. We don't have to invest in capital in what's a gold asset. It's clearly not core to us. We want to focus on our silver business. Casa has also been demanding a lot of attention from technical support. And so we can redeploy that on our silver business. So really, we're heavily invested in silver. I think I think the new owner ore zone, I think they're good operators. I think this is a win-win for both of us.

The next question online had to do with the comments around the potential to reprocess our tailings at Greens Creek they're looking for? What are we -- what should the market be looking for in terms of next steps, news flow? What do we need to do?

Brian, do you want to talk to that, please?

Yes. Like I talked about, we've been engaged with universities and some of the kind of start-ups that are looking at that technology for about the last 5 years. We, again, have done a bunch scale testing, and we hope to move to pilot plant testing this year. So again, a fairly new thing for us, but I suspect you're soon we'll have some -- probably some discussions in the public realm about potential partners and how that advances in the company.

I think the key point here is this isn't just a dream that we're actually taking some action steps to see if we can realize some value. Even if we get a small percentage of that value, that's still material. So we'll chase that to ground.

Heiko Ihle from H.C. Wainwright. Maybe just talk a bit about the competitive bidding process for Casa Berardi and if the process has shifted or rather the pricing has shifted given that obviously, gold prices are probably a lot higher today than when this conversation first started. .

Yes. Thanks for the question. So when we started the process, it was about 14 months ago. It was about when I started, the gold price was around about $2,600, Casa was really not making really any money then. When we started that process, we invited various companies to come and tender. We eventually lined up on one. They did an extensive due diligence. It went for a long time. I won't comment on their process, but in the end, the offer that we received didn't reflect the value of the increasing value of the mine at increasingly higher gold prices. So I guess at the time that they submitted the bid, there wasn't that much confidence. I mean, we've never been in 3,500 gold territory. And so we modeled our cash flows. We knew with a high degree of confidence, what we could achieve by executing our operating plan, which was the 160 pit and processing of the stockpiles. We also pivoted and kept the underground going even though that was supposed to have closed 2 years ago. So I think we showed some flexibility, agility and we recognize the increasing value. In September, we announced that the offer wasn't sufficient. We're going to pivot, and we're going to harvest this thing. We basically shut down the data room. And not long after we had multiple unsolicited offers. And at this time, people had more confidence that the gold price was going to be stronger for longer. And so the nonbinding offers that they put forward to us, they got our attention. And so we engaged and there had been roughly 4 months of due diligence since then.

Fair enough. And then just one quick one, and it's just a number that blew my mind in the presentation. You mentioned the economic impact of Keno Hill last year was $179 million. And I mean, as someone who's walked the soil there, that's just a huge number for what's in a lot of ways, a fairly compact mine. Maybe if somebody on your team could break that number down just a touch.

Sure. Who wants to do that? Patrick, go ahead, please. .

Yes. So that's the total economic impact. It includes as well capital investment as well as ongoing salary, other reagents, all of that altogether, that's what the number is. I don't have the exact breakdown for you right now, but I could work with Mike to get that to you if that would be of interest.

Maybe Russell, you can add a little bit more color on that, please.

Yes. Just adding a little bit to what Patrick said. Keep in mind, that includes the work that RDC is doing, right, that environmental cleanup that we spoke to as well as all of the capital that we we're deploying a lot of capital into that mine as well as our operating costs are in 2020. I'm talking 2025 in this case, but probably about $90 million plus in the capital plus ERDC, so that's how you get to that total number.

I'd also add that A key thing is the previous few years, Casa was draining of around about $50 million of free cash flow. Now it's self-sustaining. And we're getting closer and closer to that permit 440 tonnes per day. So we're looking the future with the excitement. And this is also going to be a generational mine, I think that's my expectation. There are so many documented historic workings, and we're only really touching 2 of them at the moment. .

There's a question online that's a perfect follow-up to Russell's comments. Could you explain the ERDC and what that program involves?

Yes, I'm happy to take that one. So ERDC, also redevelopment corporation. We -- there's a historic mining district that has well on 100 years' worth of impacts. There are water quality impacts. They're open adits. There are a number of features that need to be remediated and reclaimed and the program, we are working together with the federal government. They provide the funding. We provide the manpower, the know-how, and we are systematically going out and addressing an order of importance the sources of water contamination, building places or facilities to treat water to reduce contact and move tailings, consolidate those. It's -- from a closure perspective, from a redevelopment perspective, it's actually really satisfying work when you take something that had been closed to the standards of prior generations and bringing them up to modern standards.

And Patrick, just as a follow-up, you mentioned we provide the manpower, but that's also covered by the federal government as well in terms of the wages.

That's right. We're largely reimbursed for everything that we do. .

Any other questions from the audience?

I should thank the audience for coming in. I know it's brutal out there, and the fact that you've rated it to come in here, I appreciate it.

One more question from online. Thanks for the informative event. At Keno Hill, you talked about the potential at 440. Can you remind us of your planned mining and processing rates for 2026, 2027 and when you expect to sustainably operate at 440. With the exploration side at the project and significant upside to mine life, is there an opportunity to accelerate and beyond 440.

Let's talk about 2026 first. So Jason, do you want to answer that?

Yes. I believe guidance was released for that. And as you see the guidance, you'll see a modest increase as we go into 2026 is that we work to further increase our developed state and associated infrastructure. As we look into the 4 years, we're looking for that modest growth until we can establish develop state tied infrastructure permits and all those things to establish the full permitted rates at 440 not only to get to the growth, but do it efficiently and sustainably. .

Thanks for that. So just to follow on from that. So our permitted rate is 440. There are a number of steps to get through there that were outlined on the slide. Jason's point is there's a between our permitted 440 and what we've been mining at. So last year, we mined at around about 300 tonnes per day. this year going to be more or less around about 325, and that will start to gradually ramp up. We've also invested in a tailings backfill plant, which is going to highly help with productivity, but it's also certainly going to make it safer, that will be rolled out. And so you'll see that daily tonnage rates start to increase gradually perhaps somewhere in around about 2 years. We might be around about 440 million. Any discussion on beyond that, that's going to require more permitting, more infrastructure investments. We're aware of the optionality in the potential there. But right now, we're just focused on get to 440 and even at these prices today making coins.

That's good. Another 1 with respect to Montana, the Libbey copper silver project, you've had some news on permits in a favorable manner there. What should we be thinking in terms of market updates there? What's the goal?

So at the moment, we were very grateful for the Fast 41 designation. But what that does is it allows us to continue exploration allows us to rehabilitate an underground shaft allows us. It doesn't allow us to extend it. It allows some dewatering. But fundamentally, this is a very valuable project. I mean there's a pile of copper and reasonably low grade silver. But fundamentally, this is a copper deposit to develop it, there will be a long permitting time frame. All we have right now is the pivot to explore. And for that reason, I'm more interested in getting a very capable copper company with proper credentials to actually take this on either by their way in or earn their way in give us a free ride so that we can focus on our precious metals business. Mike, is there anything you want to add.

Yes. I think the key is that we -- as Rob said, that we have the ability to go explore. And it's a 5-year exploration program. We have a significant amount of dewatering and rehabilitation to do first. And we also still need to secure some state permits, which are still pending. So as we work through that process, that slow process to get to a point where we can complete that expiration. And on the other side, we'll do what Rob talked about.

One other question from online is a clarification around comments around the silver price and our assumptions. So our base our guidance came out this morning, full details in the news release that's available on our website. In that press release, we make assumptions on metal prices. Can you comment how does that compare or contrast to the comments on the outlook for [indiscernible] in the presentation?

Russell, do you want to take that one, please? .

In the presentation, one thing that we tried to make clear is that in this business for the long-term perspective in mind. And so as we think about the prices that we use to both plan the business, but also you can see in our cost guidance, we use conservative prices because we have -- frankly, we have assets that can produce at these price -- at lower prices and give significant margins at the prices we see today. And so although we're bullish on our prices, we're bullish on silver. We're bullish on gold as well. We're still going to utilize more teratism in our planning so that we can ensure that we capture that margin. .

Last question from those online. Would you ever consider holding metal on your balance sheet rather than selling everything you produce?

Maybe Anvita, you can take that.

As I said that most of our silver is in concentrate. So we are required to sell to benchmark customers. So unlike [indiscernible] or other things that we can -- we might have been able to hold, we it's better to sell that inventory and keep that going. And plus, as Russell said, our operations are steady state, long term, and we have that inventory buildup that will keep happening. So to keep that working capital going and deploy our capital to the best possible alternatives.

Last call for questions on the floor. Seeing none.

Thank you, everyone, for participating. A line and in person and make the most of these times. These are exciting times. We're excited about Hecla. I hope that came through, and I hope you are as well. So [indiscernible].

Thank you for standing by. My name is Van, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q3 2025 Hecla Mining Company Earnings Conference Call. [Operator Instructions] Thank you.

I would now like to turn the call over to Mike Parkin, Vice President, Strategy and Investor Relations. Please go ahead.

Thank you, and good morning for joining us on Hecla's Third Quarter 2025 Results Conference Call. I am Mike Parkin, Vice President, Strategy and Investor Relations.

Our earnings release that was issued yesterday, along with today's presentation, are available on our website.

On the call today is Rob Krcmarov, President and Chief Executive Officer; Russell Lawlar, Senior Vice President and Chief Financial Officer; Carlos Aguiar, Senior Vice President and Chief Operations Officer; Kurt Allen, Vice President, Exploration; as well as other members of the management team.

At the conclusion of our prepared remarks, we will all be available to answer questions.

Turning to Slide 2, cautionary statements. Any forward-looking statements made today by the management team come under the Private Securities Litigation Reform Act and involve risks as shown on Slide 2 in our earnings release and in our 10-Q filings, with the SEC. These and other risks could cause results to differ from those projected in the forward-looking statements. Non-GAAP measures cited in this call and related slides are reconciled in the slides or the news release.

I will now pass the call over to Rob.

Thank you, Mike, and good morning, everyone. So turning to Slide 3. Let me just start by reminding you why Hecla stands apart in the silver sector. As the oldest silver company on the New York Stock Exchange with a history dating back 134 years, we operate exclusively in the premier jurisdictions of the United States and Canada. We maintain peer-leading silver exposure on both a revenue and resource basis with an average reserve life that's double our peer group. We're building project momentum through strategic investment in our pipeline, and we're achieving cost excellence as the lowest cost producer among our peers.

I've got to say these are exciting times, and Hecla really is thriving on strong silver and gold prices. We're using this momentum to strengthen our finances, fund high-return projects and boost shareholder value. But I think the outlook is even brighter.

Silver faces its fifth consecutive year of supply shortages with rising industrial demand and investment flows expected to support prices for years to come. And unlike most of our peers, we're uniquely positioned with one of the most favorable silver to gold revenue ratios in the sector, allowing us to capitalize on the silver strength and drive meaningful value creation for our shareholders.

Moving to Slide 4. Q3 really was exceptional, and just let me walk you through why. Firstly, record results. We delivered record results this quarter. We hit revenues of $410 million. Net income came in at $101 million and adjusted EBITDA was $196 million. These aren't just numbers. They prove that our business model works. We capture upside in strong markets while our cost position offers protection in weak ones.

Now here's what matters a lot, and that's our balance sheet transformation. Net leverage has improved from 1.8x this time last year to 0.3x in Q3. So that's an 83% reduction. And that's in a single year. That's a structural derisking of the company. This deleveraging consisted of fully repaying our revolver, redeeming $212 million of debt and paying the CAD 50 million note due to Investissement Quebec. So this deleveraging effort has eliminated over $15 million in annual interest expense. We've gone from being capital constrained to capital flexible.

Our cash flow generation has been nothing short of stellar. We've generated $148 million in operating cash flow, while consolidated free cash flow came in at $90 million. And here's the key piece. All 4 of our producing assets, Greens Creek, Lucky Friday, Casa Berardi, Keno Hill generated positive free cash flow for the second consecutive quarter. So that's operational momentum.

On the operational front, our silver production was 4.6 million ounces, up 2% from last quarter. Cash costs were negative $2.03 per ounce, thanks to strong by-product credits, while all-in sustaining costs came in at $11.01. As a result of this performance, we've tightened our production guidance and reiterated the cost guidance.

Lucky Friday surface cooling project is progressing on track and is expected for completion in the first half of 2026, while Greens Creek received its wetlands permit for the dry stack tailings expansion. Completion of these projects is critical to the future success of the company.

So in summary, our operations have executed really well. We've derisked the balance sheet and built financial flexibility. We're cash-generative across all assets. And we're positioned to invest in growth, and that's the transformation story.

I'll now pass the call over to Russell.

Thank you, Rob. Moving to Slide 6. I want to continue to highlight the strong financial performance we delivered during the third quarter. We generated $393 million in mine site revenues with silver continuing to be our primary revenue driver at 48% of the total, followed by gold at 37% and base metals rounding out the balance. This percentage of silver revenue, especially with the jurisdictions in which we operate makes us a standout in the industry.

Our silver margins remain robust at $31.57 per ounce, representing 74% of the realized price of silver with all-in sustaining costs of just over $11 per silver ounce.

We're demonstrating excellent cost discipline across our operations. Our net leverage ratio improved to 0.3x during the quarter, the lowest in more than a decade, down from 0.7x in the second quarter. This reflects our adjusted EBITDA growing to $506 million on a trailing 12-month basis as well as our significant reduction in overall gross debt outstanding while maintaining disciplined capital spending.

Most importantly, we generated consolidated free cash flow of more than $90 million during the quarter. Greens Creek led the way with nearly $75 million, demonstrating why it remains one of the world's premier silver mines. We continue to see the free cash flow inflection we've been speaking about at Casa Berardi with nearly $36 million in free cash flow during the quarter, while Lucky Friday added $14 million and Keno Hill impressively contributed more than $8 million, while we continue ramping that asset up.

The third quarter marked the second consecutive quarter of all of our producing mines contributing to positive free cash flow. As you can see, at current prices, we anticipate generating significant cash flow.

As we turn to Slide 7, I'll walk through our capital allocation framework, which is a discipline and focus -- which is disciplined and focused on 6 clear priorities with each one having a specific purpose.

Our first priority is investment in safety and environmental excellence. This is non-negotiable and is the foundation of everything we do.

Second is investing in sustaining capital at our operating mines. We target a minimum of 10% to 15% returns at these operations. Investing in sustaining capital keeps our production stable, extends our mine lives and generates cash flow with low execution risk.

Third is our investment in growth capital, where we target returns of at least 10% to 12%. This investment is intended to increase production and extend mine life. However, we will only make these investments if they demonstrate robust economics at conservative prices.

Fourth is investment in exploration. Historically, we've underinvested in exploration. However, because of the deleveraging of the balance sheet and associated cash flow that's been freed up, we anticipate further investment in this area. In fact, we are currently targeting 2% to 5% of revenues as we look to 2026. Investment in exploration provides asymmetric upside. And although we're planning to invest more in this area, we'll also be prudent with our investors' dollars and target the highest return opportunities, both brownfield narrow mines and greenfield optionality.

Fifth is we plan to make further investments in deleveraging and strengthening our balance sheet. From a pure financial perspective, we anticipate a return of 5% to 7%. However, more importantly, having a strong and delevered balance sheet reduces risk and provides flexibility. It also allows us to maintain investment during downturns and seize opportunities when they arise.

The last priority is shareholder returns. We currently pay a quarterly dividend, and we'll consider further shareholder returns only after operational requirements are met and the balance sheet is strong. That said, we're confident enough in cash flow to start thinking about this.

In summary, this framework isn't complicated. It's about maximizing value while maintaining financial flexibility to navigate cycles. We're operating under this framework now, and we've seen better prices and stronger cash flows. We'll see those -- the capital and exploration projects we invest in meet these above criteria, including the remainder of this year.

And with that, I'll turn the call to Carlos.

Thank you, Russell. Turning to Slide 9. Greens Creek is delivering exactly what we need from our cornerstone asset, a strong operational quarter, driving robust free cash flow generation.

The third quarter silver production came in at 2.3 million ounces with 15,600 ounces of gold, both tracking well to full year guidance.

Sales came in at $178 million, up 46% from last quarter, driven by higher volumes sold and metal prices.

More importantly, the unit economics are excellent. Cash costs came in at negative $8.50 per silver ounce and AISC of negative $2.55 per ounce, both offset by-product credits.

Free cash flow was nearly $75 million for the quarter. Based on our strong year-to-date performance at Greens Creek, we are tightening our silver and gold production guidance and lowering our capital expenditure guidance while reiterating our cost guidance.

Moving to Slide 10. Lucky Friday continues to do what it does well, deliver consistent profitable silver. Third quarter silver production was 1.3 million ounces with a 7% increase in milled silver grade.

Sales came in at $74.2 million, up 15% quarter-over-quarter.

The free cash flow was $13.5 million, nearly triple the prior quarter, reflecting improving operational momentum.

The surface cooling project is on track for 2026 completion. This investment is strategic. It opens access to deeper high-grade zones, extending mine life and profitability.

Thanks to our strong year-to-date performance on Lucky Friday, we are tightening our silver production guidance, reiterating our total capital expenditure guidance and modestly raising our cost guidance.

Turning to Slide 11, Keno Hill. We have now delivered 2 consecutive quarters of positive free cash flow, a significant milestone. Third quarter silver production came in at nearly 900,000 ounces at an average milling rate of 323 tons per day. Keno Hill is well positioned to deliver on its 2025 silver production guidance.

The free cash flow was $8.3 million, positive cash generation while still in ramp-up and investment mode. We have hedges through the second quarter of 2026 providing silver price protection during this period of capital investment.

Our reliability improved significantly in the third quarter, thanks to the Yukon Energy successful repair of the hydroelectric plant. This reduced a key operational risk we have been managing. Consistent with the other 2 primary silver mines, we are tightening our silver production guidance at Keno Hill based on a strong year-to-date performance. Capital expenditures are expected to modestly exceed our original guidance as we are outperforming on several key factors, including the underground development, which is tracking 13% above plan year-to-date.

Turning to Slide 12. Casa Berardi delivered another solid performance, setting the mine up well to achieve guidance. Gold production of 25,000 ounces, down 11% due to planned lower underground ore grades, and cash costs of $1,582 per ounce and AISC of $1,746 per ounce. We are tightening gold production guidance for Casa Berardi based on a strong year-to-date performance while maintaining our cash cost and AISC guidance.

Our 2025 capital expenditure guidance for the mine remains unchanged. The company is actively evaluating options to extend production beyond 2027. These initiatives could potentially reduce the previously disclosed production gap and enable Casa Berardi to remain a sustaining cash flow contributor to the portfolio.

I'll now turn the call over to Kurt.

Thanks, Carlos. Moving to Slide 13. Our Nevada assets offer opportunities to unlock hidden value. We have 3 key properties with significant historical production. Midas, 2.2 million ounces of gold historically, with a fully permitted mill and tailings capacity. Hollister, 0.5 million gold equivalent ounces within hauling distance of Midas. And Aurora, 1.9 million ounces of gold historically with an on-site 600 ton per day mill.

All properties have significant exploration potential, minimal regulatory hurdles and existing infrastructure. We're developing a comprehensive Nevada strategy with an exploration update on Nevada, Keno Hill and Greens Creek coming later this month that will shed light on our Nevada exploration progress and what's to come next year.

You can expect a heightened level of activity in Nevada next year as we work to surface value from this exploration portfolio.

I'll now turn the call over back to Rob.

Thanks, Kurt. I'm pretty excited what you and your team are doing in Nevada, so keep up with this work. We've got 4 strategic priorities that flow directly from our transformation. And the first is long-term value creation at Keno Hill, prioritizing permitting and execution. At current prices and even at lower prices, this asset is expected to generate material returns at 440 tons per day and has expansion optionality beyond that.

Second, continued deleveraging and strengthening our balance sheet with focus on free cash flow generation across all assets. And we've proven in Q3 that we can do this rapidly when the metal prices support it.

Third, establish a capital allocation framework, balancing further debt reduction, organic growth investment, exploration and potential shareholder returns.

And fourth, portfolio rationalization, continually assessing which assets deserve more capital and where to monetize noncore assets for high-return opportunities.

With that, I'll turn it over for questions.

[Operator Instructions] Our first question comes from the line of Heiko Ihle from H.C. Wainwright.

Can you hear me all right?

We can hear you.

Perfect. Do you want to just go through some of the inflationary factors that you're seeing at mine -- at your asset base across the mines. I assume the effects of that have been muted a little bit in the last few quarters. But maybe just go through some of the inputs or equipment or hires, whatever, where you're still seeing inflationary impacts and also maybe some supply chain bottlenecks?

Heiko, this is Russell. I'll take this question. And Carlos, please chime in as well. But I would say that the biggest inflationary factor we've likely seen or the biggest maybe cost pressure that we've seen is with the metals price environment that we've seen, there's obviously competition for labor. And so we have to be competitive as it relates to what we pay for labor, but also filling roles and looking for where we can't fill them, we have to fill them with contractors. And that's been something -- a challenge that we've had now for quite some time. It's just with the higher price, you see that getting exacerbated.

But then in addition to that, what we do see from a pure inflationary perspective, I'd say the impact is relatively muted, like you said, but we are seeing some tariff costs as we think about capital projects and maybe there's components that we have to import. And so then we'll see potential tariffs on those types of items.

We try to minimize that, right? And we try to find the best competitive bid for the quality of components that we're looking for. But there's a little bit there as well. Carlos, do you have anything to add to that?

Yes, there's a little bit related with mining supplies and reagents and air movement. That is mainly all the stuff related with the workforce consultants and labor.

I had a different follow-up question planned, but now you got me curious. I mean you spent almost $9 million on exploration, $8.8 million, I think it was. What are you seeing with labor costs related to drilling and also timing for getting your assays back? Is there any positive or negative changes?

You, Kurt?

Yes. This is Kurt. We have seen some increase in our drilling costs. Really, it's associated with labor, drillers and drillers helpers. Regarding assaying, turnaround has been somewhat normal. Of course, this time of the year, it starts to tighten up a little bit as people are getting their summer sampling programs into the assay labs. But it hasn't been as bad as it was a few years ago.

Our next question comes from the line of Alex Terentiew from National Bank.

Congrats on another great quarter here. I got 2 questions. The first one, I think your last comment there about providing an update on exploration and projects in about a month or so that may kind of -- might have to wait for that, but I'll ask it anyways.

I mean obviously, your balance sheet has improved quite a bit and your cash flow outlook has improved. So when it comes to exploration next year and projects that you're getting excited about, can you give us any kind of taste of where you are? What you're thinking about? Maybe you got the permit approval to start doing some exploration as well. You made a good mention here of Nevada. I'm just trying to get a better look of -- a sense of what we can expect there?

And then my second question, Keno Hill, again, the second quarter in a row where you guys look to seem to have made some pretty good progress. Can you remind me of what metrics you need to see there to get that mine or that project rather declared commercial?

Sure. I'll start with exploration, and then I'll hand it over to Kurt to fill in some more details. So we're going to substantially increase our exploration budget in Nevada. In fact, we've increased it beyond what the starting budget was this year. I'm quite excited by the results that we're getting there.

We've also had quite a few dormant projects, which we expect to reinitiate. So things like the Rackla build targets up in the Yukon. This is virgin country with outcropping gossans, and so we need to make some advance there. And then obviously, our near-mine exploration where we continue to do resource extension drilling and seek new discoveries. Could you just fill in some more gaps, please?

Yes. Next year, we're really planning on focusing on near-mine and brownfields to start with. That's going to get the biggest part of the budget for next year.

And then we're also doing more greenfields exploration and early-stage exploration than what we've done in the past with a generative exploration program that will be kicked off next year as well. We've got some really good targets. We've got some really good property packages. As Rob said, the Rackla district is just ripe for discovery, and we're looking forward to getting in there and spending the summer, doing the basic boots on the ground field work there. And then Nevada as well. Go ahead, Rob.

Kurt, Sorry.

And Nevada, I'm really excited about. Like we talked about, we've got infrastructure, minimal requirements on the permitting side of things. So that's really, in my view, a faster track to production probably from any of our exploration projects outside the mine -- the current mine operations areas.

If I could just...

Yes, go ahead.

Sorry. If I could just add, Kurt touched on a point that's quite important, and that's that we're increasing our project generation efforts. I mean coming into this -- coming into Hecla, one of my observations was that we generally stuck to our knitting. We stuck to our existing mine sites and focused all of our exploration there.

I've talked about portfolio rationalization, and we will be farming out and divesting some projects, but we need to replace that. And so project generation is an important skill to have. We also need to become a little bit more commercial and create a whole series of options. And so look in the future for us to be doing earn-in agreements on other company properties. So that's exploration.

On Keno Hill, look, for commercial production, we've got 5 criteria that we laid out for commercial production. And honestly, we're really only there on one, and that's the silver recoveries right now. Everything else, the completion of the major components, hitting 75% of mill capacity, finishing the major CapEx, that's all still in front of us.

And so our current ramp-up plan really has us getting to commercial production around about 2027 at roughly 345 to 385 tons per day. And then the following year, 2028 would move towards nameplate throughput. And that's assuming that we get the water discharge approval sorted with the Yukon regulators. So in summary, call it, 2027 for commercial and 2028 for full nameplate.

Okay. That's great. And obviously, a lot of exciting stuff to come next year on the exploration front. Looking forward to it.

Thanks, Alex.

[Operator Instructions] Our next question comes from the line of Joseph Reagor from ROTH Capital.

I had a question on your guidance. Obviously, raising the low end was great. But it seems like if I look at, say, like Greens Creek's gold production, Lucky Friday's silver and Casa's gold production, you'd have to have a pretty weak quarter for Q4 to not hit like above the high end. And so I'm wondering if that's just a matter of like company policy not to raise the high end of guidance? Or is it that you guys are having some expected downtime or anything during the quarter or lower grades? Just help me figure out how to stay within that high end.

I think, Joe -- Joe, this is Russell. I'll take the question, but my colleagues, they will chime in as well. If you go look and take a look at the -- in our earnings release where we have our past 5 quarters of production, you will see Greens Creek, for example, does have kind of a production profile that will vary, right? So Q3 of last year, Q4 of last year, we were less than 2 million ounces. I think what the guidance would probably tell you is we'll probably see a 2 million or so ounce quarter at Greens Creek for the Q4.

And I think as we think about our guidance, we try not to guide to the quarter, but we also understand that we've only got 1 quarter left. And that's kind of where our models say we're going to come in.

Okay. That's fair. And then looking at the really strong price realizations you guys had in the quarter. I mean normally, there's some fluctuation, but it was abnormally strong this quarter. Was there anything specific that led to that? Was it just timing of shipments? Did you have more like late quarter shipments and early quarter shipments and that's how the weighted price got so well above spot? Or is there something else I'm missing there?

I would say I'll jump in again. There's 2 factors here. One is the timing that you mentioned. The Greens Creek, obviously, is our largest silver producer, and they ship once a month. And they tended to ship later in the quarter. And as you see the price change throughout the quarter, it ran up at the end of the quarter, which obviously weighted our sales toward the end of the quarter. That's part of it.

The other thing that -- and I've got Anvita Mishra here, she's our Treasurer. You guys all know her since she did IR recently. With the change of the silver dynamics, where we've seen the more upside potential, I'll say, we've actually started to utilize more collars as it relates to our provisional hedging, which gave us that upside. And so I think in the past, you would have seen us use forwards. But as we saw the market change, we started to be more flexible on using collars for provisional hedging, which has allowed our investors to enjoy more upside. So I would say it's both of those factors.

[Operator Instructions] There are no further questions. I will now turn the call back over to Rob Krcmarov, President and CEO, for closing remarks.

Thank you, Van. So let me bring this all together. We came into 2025 with a clear mission, and that's to transform Hecla from a cash-constrained operator into a financially flexible company that can pursue value-creating opportunities. And I think our results clearly demonstrate that we've executed on that plan.

And really, there's 4 things I want to reemphasize. First is operational execution is solid. All 4 of our producing assets generated positive free cash flow this quarter. Greens Creek and Lucky Friday are performing as we expected. Casa Berardi is tracking cost improvements, and Keno Hill has achieved consecutive quarters of profitability and is ramping towards our next production target of 440 tons per day.

Secondly, record financial performance with quarterly revenue, net income and adjusted EBITDA at all-time highs. And we did not leave deleveraging to chance. We combined operational cash generation with strategic capital deployment to fully repay our revolver, redeem $212 million in debt and fully repay the maturing IQ notes from free cash flow. And in doing so, we moved from 0.7x to 0.3x leverage in a quarter. So that's a disciplined capital management, and it gives us the flexibility that we need.

Third, we have general -- we have genuine optionality now. So reserve lives between 12 and 17 years, expansion potential at Keno Hill, strategic evaluation of the broader portfolio to surface value for shareholders and the ability to pursue value-creating M&A, but only if the right opportunity emerges. And that flexibility is what we lack as a cash-constrained company.

The next phase is about demonstrating consistent execution, stable cash generation, continued deleveraging and disciplined capital deployment. And that consistency is how we recapture our historical value premium, and we're confident in our path.

Fourth, strategic direction with 4 well-defined long-term pillars that will guide our capital allocation, and we'll elaborate more on that in our Strategy Day on the 26th of January, our Investor Day rather.

And so summing up, I think there's a compelling valuation with industry-leading reserve life, peer-leading silver exposure and strong jurisdiction quality, all at reasonable valuation that we believe offers significant upside. And we're executing on our plans, generating substantial free cash flow and building a foundation for sustained value creation for shareholders.

With that, thank you, everyone, for dialing in, and have a good day.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.