Hecla Mining produced 4.2M oz of silver in Q2, up 8% from Q1, and generated $136M in free cash flow. Keno Hill permitting advances while Greens Creek expansion studies target 2027-28 first production.
Hecla Mining posted a sharp jump in silver production during the second quarter, with output rising 8% from the prior three months to 4.2 million ounces. Free cash flow hit $136 million, near the company's quarterly record of $144 million set in the first quarter. President and CEO Rob Krcmarov called the balance sheet the strongest in Hecla's history.
Revenue from continuing operations was $334 million, down from a record $411 million in the first quarter. Krcmarov attributed the decline to lower metal prices and shipment timing, particularly at Greens Creek. A meaningful amount of silver concentrate produced at Greens Creek had not been sold by quarter-end, though it shipped in early August and is expected to be reflected in third-quarter results.
Net income from continuing operations came in at $118 million, or $0.18 per share. Adjusted EBITDA more than doubled year over year to $199 million, compared with $94 million in the same period of 2025. Operating cash flow was $175 million.
All three operating mines generated free cash flow during the quarter. Greens Creek produced site-level free cash flow of $130 million. Lucky Friday generated a site record of $88 million. Keno Hill contributed nearly $15 million of free cash flow, its fifth consecutive quarter of positive free cash flow.
Hecla ended the quarter with $483 million in cash, no long-term debt other than capital leases, and an essentially undrawn $225 million revolving credit facility that includes a $75 million accordion feature. CFO Russell Lawlar said the company moved from net debt of nearly $270 million a year earlier to a net cash position of roughly $472 million.
Keno Hill produced 625,000 ounces of silver, up from 500,000 ounces in the first quarter. Hecla updated full-year guidance to 2.2 million to 2.6 million ounces as the company prioritizes permitting and site infrastructure work over near-term tonnage growth.
The mine received a permit during the quarter to expand its tailings storage facility. Krcmarov said the company expects to begin ramping toward higher production levels around the end of 2029, contingent on receiving critical permits, completing infrastructure projects, and advancing the tailings expansion enough to support normal mill production.
At Greens Creek, Hecla is advancing engineering and metallurgical studies for a pyrite concentrate circuit that would recover metals from mill tailings currently sent to the dry-stack facility. Vice President of Operations Brian Erickson said the project could add roughly 1.0 million to 1.2 million ounces of silver and 10,000 to 15,000 ounces of gold annually once fully ramped up.
Initial capital spending is estimated at $40 million to $60 million, with incremental annual operating costs of $10 million to $15 million. Hecla is targeting first production between the fourth quarter of 2027 and the first half of 2028, followed by an approximately one-year ramp-up period. Management said the production figures are before payability factors and remain subject to further engineering work.
The company is also conducting phase-three metallurgical test work on potential reprocessing of Greens Creek dry-stack tailings. The facility contains more than 600,000 ounces of gold, 51 million ounces of silver and other metals, which Hecla valued at roughly $6.1 billion in situ at June 30 metal prices before recovery, processing and capital costs.
Lucky Friday produced a quarterly record of 1.5 million ounces, driven by higher mill grade from a planned high-grade mining area. Management said it does not expect those grades to continue through the remainder of the year. Hecla tightened silver production guidance to 4.9 million to 5.2 million ounces. The mine's surface cooling project remained on track for completion by September.
In Nevada, drilling at Midas identified two new high-grade gold-silver veins near the Sinter-Pogo Gap. Hecla is evaluating a potential hub-and-spoke restart model that could use the existing permitted Midas mill to process ore from Midas, Hollister or other regional sources. Management said a restart timeline will depend on exploration results, technical studies and certain permit modifications, though key mill and tailings permits are already in hand.
Drilling at Hollister was underway, while exploration at Aurora was expected to begin in mid-August. Krcmarov said Aurora's on-site mill would require reinvestment or potentially replacement if a viable resource is defined, and that hauling ore from Aurora to Midas is unlikely because of the distance by road.
Hecla's 2026 exploration and pre-development budget remains $55 million. At Keno Hill, the company extended a high-grade silver trend to 800 feet of strike length, where it remains open in both directions. Reported drill highlights included 10.2 feet grading 62.7 ounces per ton silver, 10.1 feet grading 44.6 ounces per ton silver, and 8 feet grading 22.4 ounces per ton silver.
Under its 2026 price-sensitivity scenarios, Hecla projected roughly $500 million in full-year consolidated free cash flow at $50 per ounce silver and $3,500 per ounce gold. The company said potential annual free cash flow could approach $700 million at $75 silver and $4,500 gold, and nearly $800 million at $100 silver and $5,500 gold.
Lawlar also said the company's high-grade underground operations have relatively low diesel intensity and that its principal power supply comes from local utilities, primarily renewable hydropower. Fuel represented about 3% of Hecla's consolidated cost structure during the quarter.
Greens Creek: Hecla raised full-year silver guidance to 8.0 million to 8.3 million ounces and expects 51,000 to 55,000 ounces of gold. The company improved its cost guidance, projecting cash costs of negative $12.50 to negative $12.00 per ounce and all-in sustaining costs of negative $4.25 to negative $3.75 per ounce, after by-product credits.
Lucky Friday: Cash costs are expected at $9.00 to $9.75 per ounce and AISC of $20.50 to $26.00 per ounce, after by-product credits.
Keno Hill: Full-year guidance was updated to 2.2 million to 2.6 million ounces.
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