HECLA MINING CO/DE/ (HL)

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

In this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), “Hecla,” “the Company,” “we,” “us” and “our” refer to Hecla Mining Company and its consolidated subsidiaries, except where the context requires otherwise. You should read this discussion in conjunction with our consolidated financial statements, the related MD&A and the discussion of our Business and Properties in our Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 Form 10-K"), filed with the United States Securities and Exchange Commission (the “SEC”). The results of operations reported and summarized below are not necessarily indicative of future operating results (refer to “Forward-Looking Statements” above for further discussion). References to “Notes” are Notes included in our Notes to Condensed Consolidated Financial Statements (Unaudited). Throughout this MD&A, all references to income or losses per share are on a diluted basis.

Overview

Hecla Mining Company stands as North America's premier silver producer, with a rich heritage dating back to 1891. Our operations at Greens Creek, Lucky Friday and Keno Hill combined to produce 37% of 2025 silver production in the U.S. and Canada, complemented by significant gold production from Greens Creek and our former Casa Berardi operation. Our strategic positioning in the stable jurisdictions of the U.S. and Canada provides us with distinct operational advantages and reduced political risk compared to our global peers. Our operational and strategic framework centers on four core pillars:

1.
Achieving operational excellence through standardized systems and continuous improvement

2.
Optimizing our portfolio through strategic reviews and targeting highest risk-adjusted return projects

3.
Intensifying our focus on financial discipline with a rigorous capital allocation framework

4.
Leveraging our position as North America's largest silver producer to meet growing demand from green technology markets

Recent Developments

On March 25, 2026, we completed the sale of our Hecla Quebec Inc. ("Hecla Quebec") subsidiary which owns the Casa Berardi mine to Orezone Gold Corporation ("Orezone") for a fair value of $385.7 million ($601.7 million on an undiscounted basis) comprised of the following:

•
Cash of $170.0 million upon closing on March 25, 2026

•
Accounts receivable related to working capital adjustments of $16.6 million of which $15.6 million was received during April and the remaining $1.0 million is expected to be received in May

•
65,757,265 Orezone common shares valued at $106.1 million on closing

•
Deferred cash consideration ("Deferred Cash Consideration") with a fair value of $57.1 million for the cash payments of $30 million and $50 million to be received 18 months and 30 months after closing, respectively

•
Contingent cash consideration ("Contingent Cash Consideration") with a fair value of $35.9 million for a total of up to $241 million of undiscounted payments consisting of:

o
A fair value of $3.3 million for two annual gold-price related payments of $5 million each should the average gold price exceed $4,200/oz for the first and second years following closing

o
A fair value of $9.9 million for two contingent payments of $10 million each due upon issuance of certain permits to open pit mine two additional identified orebodies

o
A fair value of $22.7 million for certain future gold production-based royalty payments with an undiscounted value of up to $211 million ($80/ounce for the first 500,000 ounces, then $180/ounce thereafter from future open pit operations)

Orezone has a set-off right to reduce the unpaid balance of the Deferred Contingent Cash or the Contingent Cash Consideration payments by 50% of the amount by which the financial assurance required by the Quebec government under the updated Casa Berardi closure plan exceeds $150 million, excluding increases caused by Orezone's post-closing actions. Our current estimate of that excess has been included in determining the fair values of the Deferred Cash consideration and Contingent Cash Consideration for the first gold-priced payment.

The sale of Hecla Quebec represents a disciplined portfolio optimization and focuses capital allocation on our silver assets, which we believe to represent significant growth and value creation opportunities. We have solidified our revenue exposure to silver and we are focused on operating in what we view to be the most favorable jurisdictions. Subsequent to March 31, 2026, we used the

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cash proceeds from the transaction for debt reduction and balance sheet strengthening, enhancing our financial flexibility and capacity to invest in strategic growth investments.

We determined that the sale of Hecla Quebec represents a strategic shift that has a major effect on our operations and financial results and therefore, beginning with this quarterly report on Form 10-Q for the period ending March 31, 2026, the Casa Berardi operation is no longer a reportable segment and its financial results are reflected in the Company’s unaudited interim condensed consolidated financial statements as a discontinued operation for all periods presented. Unless otherwise specified, the discussion of financial results within this Item 2 (MD&A) will focus on our continuing operations, in relation to the respective comparative periods which have been recast to reflect the continuing operations of our business.

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First Quarter 2026 Highlights

Operational Achievements:

•
Leading North American Silver Producer - Through the completion of the sale of Hecla Quebec, we have solidified our position as a leading silver multi-asset mining company.

•
Production - We produced 3.9 million ounces of silver at our primary silver operations, compared to 4.1 million ounces of silver in the first quarter of 2025. At Greens Creek, we produced 12,886 ounces of gold, a decrease compared to 13,759 ounces of gold produced in the first quarter of 2025, driven primarily by lower throughput.

•
Lucky Friday Surface Cooling Project Advancement - Construction of the surface cooling project continued with the project 81% complete and tracking for completion by mid-2026.

Financial Performance:

•
Revenue Generation - Generated sales of $411.4 million, a 100% increase over the first quarter of 2025.

•
Continuous Improvement - Keno Hill's recent track record of gross profit generation continued with $24.3 million of gross profit, driven by higher realized prices, partly offset by lower volumes sold, compared to a gross profit of $1.0 million in the first quarter of 2025.

•
Net income from continuing operations and shareholder returns - Generated net income from continuing operations of $164.7 million, compared to $24.3 million in the first quarter of 2025 and returned $2.5 million in dividends to common stockholders.

•
Investments in Continuing Operations - Made capital investments of $39.3 million, including $6.1 million at Greens Creek, $17.0 million at Lucky Friday and $15.0 million at Keno Hill.

External Factors that Impact our Results

Our financial results vary as a result of fluctuations in market prices primarily for silver and gold and, to a lesser extent, zinc, lead and copper. World market prices for these commodities have fluctuated historically and are affected by numerous factors beyond our control. To date, tariffs have not materially impacted our financial results. However, future tariffs or other global trade restraints could impact our performance. Historically our US operations have had significant sales into China and Canada, and each of those countries is or could be subject to tariffs, and each has or may retaliate in kind. Notwithstanding these recent developments, we believe that the outlook for precious metals fundamentals is favorable due to macro-economic factors such as lower interest rate expectations, geopolitical uncertainty and global growth expectations, which have resulted in significant volatility in the financial and commodities markets, including the precious metals market. See Item 1A. “Risk Factors” contained in Part I of our 2025 Form 10-K for further discussion. Because we cannot control the price of our products, except to the extent we have entered into hedging transactions, the key measures that management focuses on in operating our business are production volumes, payable sales volumes, Cash Cost, After By-product Credits, per Ounce (non-GAAP) and All-In Sustaining Cost, After By-product Credits, per Ounce (“AISC”) (non-GAAP), operating cash flows, capital expenditures, free cash flow (non-GAAP) and adjusted EBITDA (non-GAAP). The average realized prices for all metals sold by us continued to exhibit significant volatility during the period. We have also experienced significant cost inflation across our operations, principally associated with higher energy prices, increased costs for other consumables such as reagents, explosives and steel, and higher labor and contractor costs.

Consolidated Results of Continuing Operations

Total sales for the three months ended March 31, 2026 and 2025 were as follows:

Environmental remediation services revenue is generated by performing remediation work in the historical Yukon Territory mining district on behalf of the Canadian government. The scope and estimated cost of all work is agreed to in advance by the Canadian

25

government, and the expenses incurred are passed through to the government for reimbursement with minimal margin generated by us in performing this work.

Total metal sales for the three months ended March 31, 2026 and 2025, and the approximate variances attributed to differences in metals prices, sales volumes and smelter terms, were as follows:

The fluctuation in sales for the three months ended March 31, 2026 compared to the same periods in 2025 was primarily due to the following:

•
Higher average realized prices for all metals for compared to the same period in 2025. The table below summarizes average spot prices and our average realized prices for the commodities we sell:

[[GREPCENT_TABLE]]
[["","","","","Three Months Ended March 31,"],["","","","","2026","","","2025"],["Silver \u2013","","London PM Fix ($/ounce)","","$","84.39","","","$","31.91"],["","","Realized price per ounce","","$","82.70","","","$","33.59"],["Gold \u2013","","London PM Fix ($/ounce)","","$","4,875","","","$","2,863"],["","","Realized price per ounce","","$","4,899","","","$","2,940"],["Lead \u2013","","LME Final Cash Bu

[Excerpt truncated for page length; source filing is linked above.]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis (“MD&A”) provides information that management believes is relevant to an assessment and understanding of the consolidated financial condition and results of operations of Hecla Mining Company and its subsidiaries (collectively the “Company,” “our,” or “we”). We use certain non-GAAP financial performance measures in our MD&A. For a detailed description of these measures, please see “Non-GAAP Financial Performance Measures” at the end of this item. This item should be read in conjunction with our Consolidated Financial Statements and the notes thereto included in this annual report.

Overview

Hecla Mining Company stands as the premier silver producer, with a rich heritage dating back to 1891. Our operations at Greens Creek, Lucky Friday and Keno Hill combined to produce 37% of 2024 silver production in the U.S. and Canada, complemented by significant gold production from Casa Berardi and Greens Creek. We began ramp-up of the Keno Hill mill during the second quarter of 2023. Our strategic positioning in the stable jurisdictions of U.S. and Canada provides us with distinct operational advantages and reduced political risk compared to our global peers. Our operational and strategic framework centers on four core pillars:

1.
Achieving operational excellence through standardized systems and continuous improvement

2.
Optimizing our portfolio through strategic reviews and targeting highest risk-adjusted return projects

3.
Intensifying our focus on financial discipline with a rigorous capital allocation framework

4.
Leveraging our position as North America's largest silver producer to meet growing demand from green technology markets

Recent Developments

On January 26, 2026, we announced the sale of our Hecla Quebec Inc. subsidiary which owns the Casa Berardi segment to Orezone for up to $593 million in total consideration. The transaction is expected to close in the first quarter of 2026, subject to the satisfaction of customary closing conditions. There can be no assurance that the transaction will be completed on the expected timeline or at all, or that we will receive the full anticipated consideration. Details of the consideration to be received are as follows:

•
Cash consideration of $160 million due upon closing;

•
Equity consideration of approximately 65.7 million Orezone common shares, to be issued upon closing, valued at $112 million as of January 26, 2026;

•
Deferred cash consideration of $30 million and $50 million to be paid at 18 months and 30 months, respectively, from closing; and

•
Contingent consideration of up to $241 million consisting of:

o
Production-based royalty payments of up to $211 million ($80/ounce for the first 500,000 ounces, then $180/ounce thereafter from open pit operations)

o
Permit receipt payment of $20 million upon grant of permits

o
Gold price-linked payment of up to $10 million at gold prices exceeding $4,200/ounce.

The sale of Casa Berardi represents a disciplined portfolio optimization and focuses capital allocation on our differentiated silver assets, which we believe to represent significant growth and value creation opportunities. Upon closing, we will further solidify our position as a leading silver multi-asset mining company with what we believe to be the best revenue exposure to silver amongst our immediate peers and focused on operating in what we view to be the most favorable jurisdictions. We anticipate using the cash proceeds from the transaction for debt reduction and balance sheet strengthening, enhancing our financial flexibility and capacity to invest in strategic growth investments, positioning us to maximize value from our world-class silver portfolio. We are confident in Orezone's operational expertise and believe they are well-positioned to create additional value from Casa Berardi.

2025 Highlights

Operational Achievements:

•
Strong Production - Delivered 17.0 million ounces of silver and 150,509 ounces of gold. Gold production benefited from higher grades and recoveries at Greens Creek and the continuation of underground mining at Casa Berardi. See Consolidated Results of Operations below for information on total cost of sales, as well as cash costs and AISC, each after by-product credits, per silver and gold ounce for 2025, 2024 and 2023.

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•
Lucky Friday Production - Achieved record production of 5.3 million ounces, while continuing to advance infrastructure projects such as the surface cooling plant and beginning work on a new tailings impoundment.

•
Keno Hill Consistent Production - Produced 3.0 million ounces of silver, meeting production guidance of 2.9 - 3.1 million ounces, which represents a 9% increase from the prior year, while continuing to improve the developed state of the mine and invest in infrastructure needed to advance toward commercial production.

•
Nevada Properties Advancement - Advanced exploration and permitting across the Company's Nevada portfolio. At the Midas Project, a 2025 drilling program confirmed mineralized structures in five of six targets tested, including a gold discovery at the previously untested Pogo trend that returned 0.95 ounces per ton gold over 2.2 feet with visible gold, and at the Sinter Offset target, 0.46 ounces per ton gold over 6.1 feet, extending the Sinter Vein approximately 750 feet across a post-mineral fault from its 2021 discovery location. The Midas district historically produced approximately 2.2 million ounces of gold and 27 million ounces of silver during modern-era operations (1998–2014) and includes existing permitted infrastructure, including a mill with approximately 1,200 tons per day capacity, that has been in care and maintenance for approximately five years. At the 100% owned Aurora project, the Company received a Finding of No Significant Impact and Record of Decision for the Polaris exploration project, a permitting milestone enabling the advancement of exploration drilling activities at this historically high-grade gold-silver property. Both Nevada projects are supported by existing infrastructure that the Company plans to evaluate for refurbishment in connection with a potential restart of operations, which is expected to require significantly lower capital expenditure than construction of new facilities, subject to the results of ongoing technical and economic assessments.

•
Safety - Reduced company wide TRIFR to 1.69, an improvement of 13% over the prior year.

Financial Performance:

•
Revenue Generation - Achieved record sales of more than $1.4 billion.

•
Continuous Improvement - Turned Keno Hill profitable for the first time under our ownership, delivering $53.7 million in gross profit and Casa Berardi generated $112.4 million of gross profit, both a significant improvement over the prior year.

•
Shareholder Returns - Generated net income applicable to common stockholders of $321.2 million and returned $10.4 million to our common stockholders through dividend payments.

•
Investment in Operations - Made capital investments of approximately $252.4 million, including $54.6 million at Greens Creek, $72.9 million at Lucky Friday, $61.5 million at Casa Berardi and $58.2 million at Keno Hill.

•
Deleveraged and Strengthened Balance Sheet - Redeemed $212 million of our Senior Notes using proceeds from the sale of stock under our ATM program. In addition, cash flow from operating activities of $562.6 million allowed for full repayment of IQ notes in July and full repayment of the revolving credit facility in September.

Our average realized prices for silver, gold and zinc increased in both 2025 and 2024 compared to 2024 and 2023 respectively. See the Consolidated Results of Operations section below for information on our average realized metals prices for 2025, 2024 and 2023. Lead and zinc represent important by-products at all our silver operations, and gold is also a significant by-product at Greens Creek. Copper is a minor by-product credit at Greens Creek.

See the Consolidated Results of Operations section below for a discussion of the factors impacting income applicable to common stockholders for the three years ended December 31, 2025, 2024 and 2023.

Key Issues Impacting our Business

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

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

•
strengthen our balance sheet to preserve our financial position in varying metals price and operational environments, improve capital allocation framework with a focus on ROIC and increasing free cash flow;

•
improving and optimizing operations at all sites, which includes incurring costs for new technologies and equipment, and implementing standardized systems and processes;

•
optimize asset portfolio and identify growth opportunities, including through the pending sale of our Casa Berardi segment and Quebec assets to Orezone;

•
expanding our proven and probable reserves, mineral resources and production capacity at our properties;

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•
advancing the development and ramp up of the Keno Hill mine to sustained profitability;

•
seeking opportunities to acquire and invest in mining and exploration properties and companies;

•
advancing permitting of the Libby Exploration project in Montana;

•
enhance ESG performance and risk management systems;

•
build high-performing teams and strengthen organizational capabilities; and

•
maintaining and investing in exploration and pre-development projects in the vicinities of mining districts and projects we believe to be under-explored and under-invested: Greens Creek on Alaska's Admiralty Island located near Juneau; North Idaho's Silver Valley in the historic Coeur d'Alene Mining District; our projects located in two districts in Nevada; our projects in the Keno Hill mining district in the Yukon Territory, Canada; northwestern Montana; and the Republic Mining District in Washington state.

We strive to achieve excellent safety and health performance everywhere we work. We seek to implement this goal by: training employees in safe work practices; establishing, following and improving safety standards; investigating accidents, incidents and losses to avoid recurrence; involving employees in the establishment of safety standards; and participating in the National Mining Association’s CORESafety program. We strive for continuous improvement in mine safety and emergency preparedness by staying current with industry best practices, while implementing measures that are appropriate for our operations and the risks we face. We respond to issues outlined in investigations and inspections by MSHA, the Commission of Labor Standards, Pay Equity and Occupational Health and Safety in Quebec, the Workers' Safety and Compensation Board in the Yukon and the Mexico Ministry of Economy and Mining and continue to evaluate our safety practices. There can be no assurance that our practices will mitigate or eliminate all safety risks. Achieving and maintaining compliance with regulations will be challenging and may increase our operating costs. See Item 1A. Risk Factors - We face substantial governmental regulation, including in the United States the Mine Safety and Health Act, various environmental laws and regulations and the 1872 Mining Law.

A number of key factors may impact the execution of our strategy, including regulatory issues, metals prices and inflationary pressures on input costs. Metals prices can be very volatile and are influenced by a number of factors beyond our control (except on a limited basis through the use of derivative contracts). See Item 7. Critical Accounting Estimates and Note 10 of Notes to Consolidated Financial Statements. While we believe longer-term global economic and industrial trends could result in continued demand for the metals we produce, prices have been volatile and there can be no assurance that current prices will continue.

Volatility in global financial markets and other factors can pose a significant challenge to our ability to access credit and equity markets, should we need to do so. We utilize forward contracts and options to manage exposure to declines in the prices of (i) silver, gold, zinc and lead contained in our concentrates that have been shipped but have not yet settled, and (ii) from time to time silver, zinc and lead that we forecast for future concentrate shipments. In addition, we have in place a $225.0 million revolving credit agreement. As of December 31, 2025, no amount was drawn on the facility, with $6.7 million being used for letters of credit, no amount was drawn on the facility, leaving approximately $218.3 million available for borrowing.

Another challenge for us is the risk associated with environmental litigation and ongoing reclamation activities. As described in Item 1A. Risk Factors and in Note 16 of Notes to Consolidated Financial Statements, it is possible that our estimate of these liabilities may change in the future, affecting our strategic plans. We are involved in various environmental legal matters and the estimate of our environmental liabilities and liquidity needs, as well as our strategic plans, may be significantly impacted as a result of these matters or new matters that may arise. We strive to ensure that our activities are conducted in compliance with applicable laws and regulations and attempt to resolve environmental litigation on terms as favorable to us as possible.

Reserve and resource estimation is a major risk inherent in mining. Our reserve and resource estimates, which underlie (i) our mining and investment plans, (ii) the valuation of a significant portion of our long-term assets and (iii) depreciation, depletion and amortization expense, may change based on economic factors and actual production experience. Until ore is mined and processed, the volumes and grades of our reserves and resources must be considered as estimates. Our reserves are depleted as we mine. Reserves and resources can also change as a result of changes in economic and operating assumptions. See Item 1A. Risk Factors - Our mineral reserve and resource estimates may be imprecise.

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Consolidated Results of Operations

Total metal sales for the years ended December 31, 2025, 2024 and 2023, and the approximate variances attributed to differences in metals prices, sales volumes and smelter terms, were as follows:

Average market and realized metals prices for 2025, 2024 and 2023 were as follows:

Average realized prices differ from average market prices primarily because concentrate sales are generally recorded as revenues at the time of shipment at forward prices for the estimated month of settlement, which differ from average market prices. Due to the time elapsed between shipment of concentrates and final settlement with customers, we must estimate the prices at which sales of our metals will be settled. Previously recorded sales are adjusted to estimated settlement metals prices each period through final settlement. For 2025, 2024, and 2023, we recorded net positive price adjustments to provisional settlements of $51.0 million, $22.9 million and $18.2 million, respectively. The price adjustments related to silver, gold, zinc and lead contained in our concentrate sales were partially offset by gains and losses on derivative instruments for those metals for each year (see Note 10 of Notes to Consolidated Financial Statements for more information). The gains and losses on these contracts are included in revenues and impact the realized prices for silver, gold, lead and zinc. Realized prices are calculated by dividing gross revenues for each metal (which include the price adjustments and gains and losses on the forward contracts discussed above) by the payable quantities of each metal included in products sold during the period.

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Total metals production and sales volumes for each period are shown in the following table:

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

Sales, total cost of sales, gross profit (loss), Cash Cost, After By-product Credits, per Ounce (“Cash Cost”) (non-GAAP) and AISC (non-GAAP) at our operating units for 2025, 2024 and 2023 were as follows (in thousands, except for Cash Cost and AISC):

(1)
A reconciliation of these non-GAAP measures to total cost of sales, the most comparable GAAP measure, can be found below in Reconciliation of Total Cost of Sales (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP).

(2)
The calculation of AISC for our consolidated silver properties includes corporate costs for general and administrative expense, sustaining capital and production, and related costs and sustaining capital expenditures for Lucky Friday excluding costs incurred during suspension of production from August 2023 until the resumption of operations on January 9, 2024.

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(3)
Other includes $39.1 million, $20.6 million and $6.2 million of sales for 2025, 2024 and 2023, respectively, and $38.6 million, $20.5 million and $6.3 million for, 2025, 2024 and 2023, respectively, related to ERDC, the Company's environmental services business.

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

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

•
we have historically presented the Greens Creek and Lucky Friday units as primary silver producers, based on the original analysis that justified putting the project into production, and the same analysis applies to the Keno Hill unit, and further we believe that consistency in disclosure is important to our investors regardless of the relationships of metals prices and production from year to year;

•
metallurgical treatment maximizes silver recovery;

•
the Greens Creek, Lucky Friday and Keno Hill deposits are massive sulfide deposits containing an unusually high proportion of silver; and

•
in most of their working areas, Greens Creek, Lucky Friday and Keno Hill utilize selective mining methods in which silver is the metal targeted for highest recovery.

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

We periodically review our revenues to ensure that reporting of primary products and by-products is appropriate. Because for Greens Creek, Lucky Friday and Keno Hill we consider zinc, lead, gold and copper to be by-products of our silver production, the values of these metals from Greens Creek and Keno Hill only offset operating costs within our calculations of Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce. We currently do not report Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for our Keno Hill operation as it is in the production ramp-up phase and has not met our definition of commercial production. We define an operation as being in commercial production upon achievement of the following criteria:

•
Completion of operational commissioning of each major mine and mill component;

•
Demonstrated ability to mine and mill consistently and without significant interruption, defined as 75% of historical production levels or mill design capacity over a period of 90 days;

•
Silver recoveries are at or near expected steady-state production levels;

•
All major capital expenditures have been completed; and

•
A significant portion of available funding is directed towards operating activities.

Currently we meet only one of the above criteria - silver recoveries are at expected steady-state production levels. Determination of when these criteria have been met requires the use of judgment, and our definition of commercial production may differ from that of other mining companies.

As Keno Hill has not yet been determined to be in commercial production, it's costs and by-product credits are excluded from our consolidated Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce because (i) by definition it has not reached the sustaining stage and (ii) including its costs and by-product credits we believe would distort consolidated Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce of our operating silver mines that are in commercial production and operating as designed, and not facilitate a meaningful comparison of our performance versus that of our peers.

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

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For the year ended December 31, 2025 and 2024, we reported net income applicable to common stockholders of $321.2 million and $35.3 million, respectively, and a net loss of $84.8 million in 2023. The following factors contributed to those differences:

•
Variances in gross profit (loss) at our operations as illustrated in the table above. See the Greens Creek, Lucky Friday, Keno Hill, and Casa Berardi sections below.

•
General and administrative costs were $57.6 million, $45.4 million and $42.7 million in 2025, 2024 and 2023 respectively. The increase in 2025 of $12.2 million reflects strategic headcount increases, higher stock-based and incentive compensation expense and non-recurring compensation costs related to former employees retirements. The increase in 2024 of $2.7 million reflects non-recurring costs associated with the former CEO's retirement.

•
Exploration and pre-development expense was $27.7 million, $27.3 million and $32.5 million in 2025, 2024 and 2023, respectively. In 2024 exploration and pre-development expense decreased by $5.2 million, compared to 2023, as exploration activities were focused primarily at Greens Creek and Keno Hill, with additional pre-development work at the Libby Exploration project.

•
Ramp-up and suspension costs for the years ended December 31, 2025, 2024 and 2023 are summarized in the table below (in thousands)

While ramping up an operation, costs incurred to generate revenue during the ramp up phase in excess of the revenue generated, are reclassified to ramp up and suspension costs on our statement of operations, which amounted to $26.8 million and $29.8 million in 2024 and 2023, respectively. Operations at Lucky Friday were suspended from August 2023 to January 9, 2024, due to a fire in the secondary egress. Costs incurred during this period amounted to $2.2 million and $25.5 million during 2024 and 2023, respectively. Casa Berardi incurred $2.2 million as operations were suspended for 20 days in June, 2023, due to Quebec wildfires. The costs incurred at San Sebastian and Nevada are holding costs as all operations at these sites were suspended during these periods.

•
Other operating expense was $0.2 million in 2025, compared to other operating income of $45.5 million and $1.4 million in 2024 and 2023, respectively. Within 2025 other operating expense of $0.2 million are $5.5 million of insurance proceeds relating to Casa Berardi. The income in 2024 is primarily related to the Lucky Friday business interruption insurance proceeds of $50 million related to the aforementioned fire.

•
In 2024 we recognized $14.6 million in write down of property, plant and equipment. Of this amount, $13.9 million related to the Lucky Friday remote vein miner machine for which (i) we no longer had a use following the success of the UCB mining method at Lucky Friday, (ii) we had been unsuccessful in locating a buyer, and (iii) the vendor advised us during the period that it would discontinue support for the program.

•
Fair value adjustments, net resulted in a gain of $12.5 million, loss of $2.2 million, and a gain of $2.9 million in 2025, 2024 and 2023, respectively. The components for each period are summarized in the following table (in thousands):

•
Net foreign exchange loss of $5.8 million in 2025, compared to a gain of $7.6 million in 2024 and a loss of $3.8 million in 2023, respectively, on translation of non US our monetary assets and liabilities at Casa Berardi, Keno Hill and San Sebastian.

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•
Interest expense of $41.6 million, $49.8 million and $43.3 million in 2025, 2024 and 2023, respectively. In 2025, interest expense has decreased due to lower debt balances following early redemption of $212 million of Senior Notes, full repayment of our IQ Notes, and a lower drawn balance on our revolving credit facility. In connection with the early redemption of the $212 million Senior Notes, we incurred a loss on extinguishment of $4.9 million, of which $3.8 million related to the call premium and $1.1 million related to the pro-rate expensing of deferred debt costs. In 2024, interest expense also included interest of $9.3 million on amounts drawn on our revolving credit facility.

•
Income and mining tax provision of $157.5 million, $30.4 million and $1.2 million in 2025, 2024, and 2023, respectively. Income and mining tax provision increased in 2025 due to higher taxable income generated by our US and Quebec operations.

Greens Creek

(1)
A reconciliation of these non-GAAP measures to total cost of sales, the most comparable GAAP measure, can be found below in Reconciliation of Total Cost of Sales (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP). At Greens Creek, gold, zinc, lead and copper are considered to be by-products of our silver production, and the values of those metals therefore offset operating costs within our calculations of Cash Cost and AISC, After By-product Credits, per Silver Ounce.

Gross profit increased by $169.2 million to $322.6 million in 2025 from $153.4 million in 2024, due to higher realized prices for all metals sold (other than lead) and higher sales volumes, except for lead and zinc which drove record annual revenues, partially offset by higher production costs which were primarily attributable to higher labor, contractor costs and materials and consumables. See Item 1A. Risk Factors - Our profitability could be affected by inflation, including the prices of other commodities for a discussion of certain risks related to our operations profitability.

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Gross profit increased by $28.8 million to $153.4 million in 2024 from $124.6 million in 2023, due to higher realized prices for all metals sold other than lead, partly offset by lower sales volumes for all metals, except zinc, and higher production costs which primarily consist of higher labor and contractor costs and higher equipment maintenance. See Item 1A. Risk Factors - Our profitability could be affected by inflation, including the prices of other commodities for a discussion of certain risks related to our operations profitability.

Capital additions increased by $6.8 million in 2025 to $54.6 million compared to 2024. Significant components of the 2025 capital additions were $17.9 million on mine and primary ore access development, $14.0 million on mine equipment, $7.7 million on surface equipment and infrastructure, $5.8 million on mill improvements and $4.0 million of definition drilling.

The chart below illustrates the factors contributing to the variances in Cash Cost, After By-product Credits, Per Silver Ounce for 2025 compared to 2024 and 2023:

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

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

The decrease in Cash Cost, After By-product Credits and AISC, After By-product Credits per Silver Ounce in 2025 compared to 2024 was primarily due to higher by-product credits, primarily due to higher realized gold prices and higher silver production. The decrease in Cash Cost, After By-product Credits, per Silver Ounce in 2024 compared to 2023 was primarily due to higher by-product credits, primarily due to higher realized gold prices, partly offset by lower silver production due to 7 days of unplanned maintenance on

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the Semi-Autogenous Grinding ("SAG") mill variable frequency drive and lower grade material mined and higher production costs primarily related to higher labor and contractor costs driven by inflation and higher equipment maintenance costs. AISC, After By-product Credits, decreased due to lower cash costs per ounce, partly offset by higher sustaining capital expenditures in 2024 compared to 2023.

Lucky Friday

(1)
A reconciliation of these non-GAAP measures to total cost of sales, the most comparable GAAP measure, can be found below in Reconciliation of Total Cost of Sales (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP). At Lucky Friday, lead and zinc are considered to be by-products of our silver production, and the values of those metals therefore offset operating costs within our calculations of Cash Cost and AISC, each After By-product Credits, per Silver Ounce.

Gross profit in 2025 of $133.0 million, was $74.3 million higher than 2024, primarily due to higher realized prices for silver, and higher sales volumes for all metals produced driven by record production and the suspension of mining operations mentioned above. However, the benefit of higher production and prices has been partly offset by higher costs, reflected in higher production costs per ton which have increased by 11%. For the year, the higher costs relate to: (i) hourly employee profit sharing costs due to higher silver prices and production; (ii) property and liability insurance resulting from higher asset values and coverage limits; (iii) higher employee medical costs related to headcount growth and inflation in medical care costs; (iv) consumables and repairs to support increased production; (v) an increase in mine hourly headcount to reduce reliance on more expensive contractors and support higher production; (vi) higher equipment maintenance costs related to parts as the mine continued to execute our equipment maintenance standards while supporting increased tonnage; and (vii) higher waste rock removal haulage costs.

While certain cost elements will persist as the mine maintains steady and consistent production, we have identified potential cost mitigation plans. These plans include further reduction of contractors, mining method optimization to improve production efficiency and reduction of consumables usage, mine and mill infrastructure upgrades to increase production and reduce maintenance, and consolidation of sourcing of some high-volume consumables to improve pricing. However, there can be no assurance these efforts will be successful in reducing costs or offsetting the potential future impacts of inflation or other factors impacting profitability.

During August 2023, the production at the mine was suspended due to a fire that occurred while repairing an unused station in the #2 ventilation shaft. It was determined that a secondary egress needed to be developed and as a result, the mine did not restart

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production until January 9, 2024, and ramped up to full production during the first quarter. The Company had property and business interruption insurance coverage with an underground sub-limit of $50.0 million, and received the full coverage amount of $50.0 million in 2024. The discussion of Lucky Friday's results below for the years ended December 31, 2024 and 2023 has been impacted by this prior suspension of operations.

Gross profit in 2024 of $58.7 million, was $26.6 million higher than 2023, primarily due to higher realized prices for silver, and higher sales volumes for all metals produced due to the suspension of mining operations mentioned above. For the year ended December 31, 2024, $2.2 million of site specific suspension costs were included within Ramp-up and suspension costs on our consolidated statements of operations and comprehensive income (loss), compared to $25.5 million in 2023.

Total capital additions increased by $23.3 million in 2025 to $72.9 million compared to 2024 due to significant projects including $24.5 million for development, $12.1 million for surface cooling project, $11.7 million for pond 5 construction, $6.8 million for definition drilling, $4.4 million for shaft renovation, $2.1 million for bolters, $1.9 million for ramp work and $1.5 million for jumbo replacements.

The chart below illustrates the factors contributing to the variances in Cash Cost, After By-product Credits, Per Silver Ounce for 2025, 2024 and 2023.

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

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

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The increase in Cash Cost and AISC, each After By-product Credits, per Silver Ounce in 2025 compared to 2024 was due to higher production costs, and higher sustaining capital for AISC, partly offset by higher silver production.

The increase in Cash Cost and AISC, each After By-product Credits, per Silver Ounce in 2024 compared to 2023 was due to higher production costs, and higher sustaining capital for AISC, partly offset by higher silver production and higher by-product credits.

Keno Hill

We have not disclosed cost per ounce statistics for the Keno Hill operation as it is in the production ramp-up phase and has not met our definition of commercial production. See above "Consolidated Results of Operations" for our definition of commercial production. Determination of when those criteria have been met requires the use of judgment, and our definition of commercial production may differ from that of other mining companies.

We acquired our Keno Hill operations as part of the Alexco acquisition in September 2022 and have focused on development activities and began ramp-up of the mill during the second quarter of 2023. The average throughput during the year ended December 31, 2025, was 297 tons per day (the mine is currently permitted to a maximum of an average of 440 tons per day), with silver grades milled of 29.0 ounces per ton. In 2025, the mill relied on existing ore stockpiles as the mine continues to focus on development and ramp up to higher tonnage rates with mining rates of 297 tons per day, with material sourced from both the Bermingham and Flame and Moth deposits. Mill throughput, while currently steady, has been negatively impacted by last year's events as described below.

During the twelve months ended December 31, 2025 and 2024, Keno Hill recorded sales of $145.3 million and $75.0 million, respectively, with the increase due primarily to higher metals sales volumes and realized prices. As a result of higher revenues, Keno Hill generated gross profit of $53.7 million during the twelve months ended December 31, 2025, and did not transfer any total cost of sales to ramp-up and suspension costs, whereas in 2024, total cost of sales in excess of sales of $26.8 million were reclassified to ramp-up and suspension costs in the Condensed Consolidated Statements of Operations and Comprehensive Income. During 2025, Keno Hill recorded capital additions of $58.2 million, of which $32.8 million related to mine development, $6.7 million for a backfill plant, $5.2 million related to the dry stack tailings facility ("DSTF"), $4.6 million for surface and general plant additions and $1.4 million for definition drilling. During 2024, Capital additions were $54.9 million, of which $28.1 million related to mine development, $8.8 million related to the DSTF, $5.9 million related to mine mobile equipment, $3.2 million for camp upgrades and $2.9 million for the surface backfill plant.

During 2023, Keno Hill recorded sales and total cost of sales of $35.5 million, related to the concentrate produced and sold during ramp up. During the year ended December 31, 2023, $29.8 million of site specific ramp up costs were included within Ramp-up and suspension costs and $4.7 million of site specific exploration costs were included within Exploration and pre-development as reported

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on our consolidated statements of operations and comprehensive (loss) income. Capital additions were $44.7 million, of which $29.6 million related to mine development and $11.3 million to mobile equipment purchases, crusher modifications and camp upgrades.

From commencement of production until late August, 2024, ore production and mill throughput generally increased as planned, leading to increased levels of production (though still not reaching the permitted capacity at the mill). However, starting in mid-2024 and continuing today, Keno Hill has been impacted by external events which have affected permitting, projects and production, and delayed our ability to reach sustained, profitable production. In late June 2024, an unrelated, third party, Victoria Gold, experienced a heap leach failure at its Eagle Mine which is located near Keno Hill. This incident had several immediate and ongoing impacts on our operations. The primary impact was that we were forced to suspend milling operations at Keno Hill between August 27 and October 26, 2024 due to delays in receiving authorizations and permits because the focus of the Yukon Government and the First Nation of Na-Cho Nyäk Dun (“FNNND”) on the Eagle Mine incident response and not on routine permitting matters. Mill operations and design and construction projects resumed during the fourth quarter of 2024. Our original planned schedule for permitting and projects has been extended, but we are taking steps, including working with regulators, to establish a viable schedule for our operational plans.

An ongoing impact of the Eagle Mine incident is the FNNND's public position on mining, which has evolved from a call to halt all mining activity to support of environmentally responsible mining practices. We continue to strengthen our partnership with the FNNND - which is important because Keno Hill is within their Traditional Territory - through enhanced environmental stewardship and community engagement initiatives, building on their support for responsible mining practices.

Then, starting in late October 2024, Keno Hill began experiencing power curtailments when the utility, Yukon Energy, experienced a turbine failure at its Aishihik hydroelectric plant in Whitehorse. That failure and Yukon Energy's resulting focus on line maintenance, combined with cold temperatures in the Yukon (and the resulting increase in demand for power), caused Yukon Energy to reduce power to Keno Hill, resulting in the operation's inability to fully power the mine and mill on several occasions in late 2024 and for 8 days in the first quarter of 2025. These power constraints impacted approximately 130,000 ounces of silver production and labor costs for idled employees of approximately $0.5 million in 2025. During December 2025, due to extreme cold weather, Yukon Energy again curtailed power supply to us for 16 days, which continued through December 30, 2025.

Permitting is one of the most important factors in our ability to reach sustainable, profitable production at Keno Hill. Increased production means a need for increased tailings storage, waste storage, water treatment and discharge, camp space and reliable power, all of which are typical requirements for mines in the expansion phase. These projects require new or modified permits, as well as the capital to implement them. Although we continue to make progress on these ordinary-course permitting matters, we have yet to make up for the delays described above. In addition, as we develop new zones for ore production at Keno Hill (and our other mines), we are frequently confronted with challenging conditions such as rock quality and ground water volumes. Currently, we are developing new headings at Keno Hill to supplement existing, or replace mined out headings. At some of these new headings, we are encountering more groundwater than expected. The mine's water license has limits on the amount of water that can be discharged from the mine. Although we currently are within permitted water discharge limits, if production from these new zones would cause water discharges greater than the license allows we will need to make alternative arrangements, which likely includes seeking an amendment to our current water license. There can be no assurances that the Yukon Water Board will grant such an amendment. If we confirm that continued mining in these new zones would lead to discharges in excess of license limits and are unable to amend our license in a timely manner, our options would then include developing a different operating plan to reduce discharges and/or curtailing production to remain within existing permitted discharge limits. Although we consider it unlikely, if none of these potential solutions is achieved, it is possible we would consider pausing production and other mining activities at the impacted areas and reassess our permitting strategy and other future operational aspects of the mine. See the Item 1A. Risk Factors - "We are required to obtain governmental permits and other approvals in order to conduct mining operations."

We also continue to face operational challenges such as work force availability, dilution, execution of projects, limited camp space, and the ramp-up of ERDC environmental remediation activities (which adds incremental demand on Keno Hill's infrastructure and resources, most notably camp space). As a result, we project 2026 silver production to be comparable to 2025 levels. The projected flat production levels at Keno Hill for 2026 should allow us to focus on (i) permitting, (ii) stakeholder outreach and ensuring we have local support, (iii) projects such as tailings storage expansion and the construction of a cemented tails batch plant, (iv) mine development and (v) meeting the above-mentioned operational challenges.

As stated above, Keno Hill has generated profits at current throughput rates and prices. Our immediate focus is to advance permits and successfully execute infrastructure projects, with the goal of putting the mine on a path toward achieving its current permitted capacity of 440 tons per day which, at current prices, we project would generate sustained, positive free cash flow, while preserving expansion optionality beyond 440 tons per day. However, currently, Keno Hill is not configured to sustainably produce 440 tons per day (although the mill has achieved that rate for multiple weeks on end during test run periods). To reach 440 tons per day throughput, we would need to continue to mine ore from both the Bermingham deposit and the lower grade Flame & Moth deposit. Achieving 440 or higher tons per day would require targeted infrastructure investments, obtaining permits, executing projects, mine development and

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maintaining social license to operate. If any one of these were not to occur, or if prices were to decrease from our current budgeted prices, Keno Hill as currently configured would not be profitable, and placing the operation on care and maintenance would be an option. See Item 1A. Risk Factor - We may not realize all of the anticipated benefits from our acquisitions, including our 2022 acquisition of Alexco.

Casa Berardi

(1)
A reconciliation of these non-GAAP measures to total cost of sales, the most comparable GAAP measure, can be found below in Reconciliation of Total Cost of Sales (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP). At Casa Berardi, silver is considered to be a by-product of our gold production, and the value of silver therefore offsets operating costs within our calculations of Cash Cost and AISC, each After By-product Credits, per Gold Ounce.

Since late 2024, as underground mining neared completion before transitioning to production coming only from the 160 open pit, we conducted a strategic review of Casa Berardi's role within our operating mine portfolio. This review coincided with a significant increase in gold prices and created opportunities to revise our plans for Casa Berardi, including extending underground mining throughout 2025, which resulted in higher gold production in 2025 compared to 2024. However, severe weather conditions in December 2025 froze the mill feeder system, negatively impacting production during late December and into January 2026.

On January 26, 2026, we announced the sale of our Hecla Quebec Inc. subsidiary which owns the Casa Berardi segment to Orezone. For a description of the material terms of the sale see "Recent Developments" above.

Gross profit increased by $126.3 million to $112.4 million in 2025 compared to a gross loss of $13.9 million in 2024. The increase in gross profit primarily relates to significantly higher realized gold prices in addition to higher gold sales volumes. For 2025, gross profit also benefited from lower depreciation expense resulting from the west underground mine being fully depreciated in 2024, partly offset by higher production costs. See Item 1A. Risk Factors - Our profitability could be affected by inflation, including the prices of other commodities for a discussion of certain risks related to our operation's profitability.

Gross loss decreased by $29.7 million to $13.9 million in 2024 compared to $43.7 million in 2023. The decrease in gross loss primarily relates to an increase in realized gold prices, partly offset by lower gold sales volumes. For 2024, the benefit of lower production costs due to the closure of the east mine in July 2023, was largely offset by increased depreciation expense from the accelerated amortization of the west underground mine in the first half of 2024. See Item 1A. Risk Factors - Our profitability could be affected by inflation, including the prices of other commodities for a discussion of certain risks related to our operation's profitability.

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In 2025, total capital additions increased by $0.8 million to $61.5 million compared to 2024, and in the current year primarily related to tailings facility construction. Total capital additions decreased by $9.4 million in 2024 compared to 2023 as the prior year contained a significant amount of purchases of new surface fleet equipment as the mine transitioned from an underground to an open pit operation. The majority of 2024 capital expenditures consisted of tailings dam construction costs.

The chart below illustrates the factors contributing to Cash Cost, After By-product Credits, Per Gold Ounce for 2025, 2024 and 2023:

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

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

The increase in Cash Cost, After By-product Credits, per Gold Ounce and AISC, After By-product Credits, per Gold Ounce for 2025 compared to 2024 was primarily driven by higher production costs, partly offset by higher gold production. For 2024, Cash Cost, After By-product Credits, per Gold Ounce was higher primarily due to lower production compared to 2023. The increase in AISC, After By-product Credits, per Gold Ounce for 2025 compared to 2024 was partly offset by sustaining capital expenditures that were $4.0 million lower than 2024.

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Corporate Matters

Employee Benefit Plans

Our defined benefit pension plans, while providing a significant benefit to our employees, have historically represented a significant liability to us. At December 31, 2025, our plans are in an underfunded status of $0.1 million. We do not expect to be required to contribute to our defined benefit plans in 2026, but we may choose to do so. See Note 6 of Notes to Consolidated Financial Statements for more information. We periodically examine the defined benefit pension plans and supplemental excess retirement plan for affordability and competitiveness.

Income and Mining Taxes

Our deferred tax assets and liabilities are measured at the currently enacted tax rates that are expected to apply in years in which they are expected to be paid for or realized. Each reporting period we assess the realizability of our tax assets. In assessing the need for a valuation allowance, we evaluate all significant available positive and negative evidence, including historical operating results, estimates of future sources of taxable income, carry-forward periods available, the existence of prudent and feasible tax planning strategies and other relevant factors.

Our organizational structure requires us to have two U.S. tax groups that do not consolidate. One of those U.S. tax groups is Hecla Mining Company and subsidiaries (“Hecla U.S. Group”) which has a net deferred tax liability of $117.2 million at December 31, 2025 compared to a net deferred tax liability of $21.7 million at December 31, 2024. The increase of $95.5 million is primarily related to taxable income and the utilization of net operating losses carried forward from prior periods as well as the election of bonus depreciation and other accelerated tax deductions.

Klondex Mines Ltd (“Klondex”) is the other separate U.S. tax group (“Nevada U.S. Group”) that has a net deferred tax liability of $30.6 million and $30.8 million at December 31, 2025 and 2024, respectively.

Our net Canadian deferred tax liability at December 31, 2025 was $98.6 million, an increase of $40.8 million from the $57.8 million net deferred tax liability at December 31, 2024. The increase was due to higher Canadian taxable income.

Our Mexican net deferred tax asset at December 31, 2025 remains at zero with no change from December 31, 2024. The valuation allowance increased to $13.7 million.

As a result of the Tax Cuts and Jobs Act (“TCJA”) enacted in December 2017, under Internal Revenue Code Section 174, a requirement to capitalize and amortize research and experimental expenditures for tax years beginning after December 31, 2021 is now effective. This modification has not had a material impact.

As discussed in Note 7 of Notes to Consolidated Financial Statements, our effective tax rate for 2025 was 33%, reflecting a tax expense of $157.5 million on pre-tax income of $479.2 million, compared to 46% for 2024, reflecting a tax expense of $30.4 million on pre-tax income of $66.2 million. We are subject to income taxes in the United States and other foreign jurisdictions. The overall effective tax rate will continue to be dependent upon the geographic distribution of our earnings in different jurisdictions, the U.S. deduction for percentage depletion, fluctuation in foreign currency exchange rates and deferred tax asset valuation allowance changes. As a result, the 2025 effective tax rate varies significantly from that of 2024. The other relevant provisions of the TCJA that became effective in 2018 consist of global intangible low-taxed income tax ("GILTI"), base erosion and anti-abuse tax ("BEAT") and foreign-derived intangible income ("FDII"). Hecla U.S. Group recorded a current expense for GILTI in 2025 due to earning in foreign jurisdictions. The BEAT and FDII provisions have not had a material impact.

Reconciliation of Total Cost of Sales to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP)

The tables below present reconciliations between the most comparable GAAP measure of total cost of sales to the non-GAAP measures of (i) Cash Cost, Before By-product Credits, (ii) Cash Cost, After By-product Credits, (iii) AISC, Before By-product Credits and (iv) AISC, After By-product Credits for our operations and for the Company for the years ended December 31, 2025, 2024 and 2023.

Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce are measures developed by precious metals companies (including the Silver Institute and the World Gold Council) in an effort to provide a uniform standard for comparison purposes. There can be no assurance, however, that these non-GAAP measures as we report them are the same as those reported by other mining companies.

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

We have not disclosed cost per ounce statistics for the Keno Hill operation as it is in the production ramp-up phase and has not met our definition of commercial production. See above "Consolidated Results of Operations" for our definition of commercial production. Determination of when those criteria have been met requires the use of judgment, and our definition of commercial production may differ from that of other mining companies.

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

In addition to the uses described above, Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce provide management and investors an indication of operating cash flow, after consideration of the average price received from production. We also use these measurements for the comparative monitoring of performance of our mining operations period-to-period from a cash flow perspective.

Casa Berardi reports Cash Cost, After By-product Credits, per Gold Ounce and AISC, After By-product Credits, per Gold Ounce for the production of gold, their primary product, and by-product revenues earned from silver, which is a by-product at Casa Berardi. Only costs and ounces produced relating to units with the same primary product are combined to represent Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce. Thus, the gold produced at Casa Berardi is not included as a by-product credit when calculating Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver

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Ounce for the total of Greens Creek and Lucky Friday, our combined silver properties. Similarly, the silver produced at our other three units is not included as a by-product credit when calculating the gold metrics for Casa Berardi

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